TIDMBRCK
RNS Number : 8307U
Brickability Group PLC
28 November 2023
THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED TO
CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE
REGULATION (EU NO. 596/2014) WHICH IS PART OF UK LAW BY VIRTUE OF
THE EUROPEAN UNION (WITHDRAWAL) ACT 2018. UPON THE PUBLICATION OF
THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE
IN THE PUBLIC DOMAIN.
28 November 2023
Brickability Group PLC
("Brickability" or "the Group")
Interim Results for the six months ended 30 September 2023
Brickability Group PLC (AIM: BRCK), the leading construction
materials distributor, today announces its unaudited interim
results for the six months ended 30 September 2023 ("H1 FY24").
H1 FY24 Financial Highlights
-- Revenue of GBP324.8m, a decrease of 7.9% compared to H1 FY23
(H1 FY23: GBP352.7m) and a 14.4% reduction on a like-for-like
(1) basis
-- Gross profit of GBP55.0m (H1 FY23: GBP54.9m)
-- Increased gross profit margin of 16.9% (H1 FY23: 15.6%)
-- Adjusted EBITDA (2) increased slightly to GBP25.6m (H1 FY23:
GBP25.5m (3) )
-- Adjusted Profit before tax (4) decreased by 2.7% to GBP21.8m
(H1 FY23: GBP22.4m (3) )
-- Statutory Profit before tax increased by 8.8% to GBP16.0m
(H1 FY23: GBP14.7m (3) )
-- Statutory EPS increased by 1.1% to 3.78p (H1 FY23: 3.74p)
-- Adjusted EPS (5) decreased by 11.7% to 5.30p (H1 FY23: 6.00p)
-- Net debt (6) as at 30 September 2023 of GBP30.9m (H1 FY23:
GBP27.4m)
-- Increased Interim dividend of 1.07 pence per share (H1 FY23:
1.01 pence)
Operational Highlights
-- Resilient performance across the Group in the first half of FY23,
despite macroeconomic and geopolitical backdrop.
-- Particularly strong performance in the Contracting and Distribution
divisions, highlighting the benefit of the Group's diversification
strategy.
Post Period and Outlook
-- Strategic acquisition announced in October of Group Topek
Holdings Limited ("Topek") which means the Group now has
a full range of cladding capabilities, as well as significantly
increasing the Group's presence in the cladding remediation
market.
-- Borrowing facility increased to an initial GBP100m, from
GBP60m, providing the Group with additional liquidity headroom
to fund the Group's working capital requirements and potential
further acquisitions.
-- Proportion of brick revenues now reduced to c.50% of Group
revenues as the Company's strategic focus on diversification
continues to yield substantial benefits.
-- As previously announced by the Company on 11 October 2023,
the Board expects that forecast reductions in newbuild volumes
will have a corresponding impact upon the performance of
the Group's existing businesses throughout the second half
of the current financial year.
-- The acquisition pipeline continues to be exciting, and targeted
growth against our robust acquisition criteria will continue.
-- The Board remains confident in the Group's ability to continue
to deliver on its strategic objectives.
-- Increased interim dividend reflects the performance of the
business in the half year and the Board's confidence in the
longer-term outlook for the Group.
(1) like-for-like ("LFL") revenue is a measure of performance, adjusted
for the impact of acquisitions.
(2) Earnings before interest, tax, depreciation, amortisation and other
non-underlying items (See Financial Review and note 5).
(3) Re-stated (see note 8 in the interim statement)
(4) Statutory profit before tax excluding non-underlying items (see
note 5).
(5) Adjusted profit after tax (statutory profit after tax before non-underlying
items) divided by the weighted average number of shares in the
year.
(6) Bank borrowings less cash.
John Richards, Chairman, commented:
" It is pleasing to report H1 FY24 performance, and maintained
profitability, in line with Board expectations despite challenging
trading conditions. Whilst we have previously communicated that the
second half of the year is anticipated to see industry wide volume
reductions, which the Group is not immune, the Board continues to
believe that Brickability's diversified, multi-business, approach
positions the Group to continue to perform well in the current
market backdrop and in the future.
"The acquisition of Topek is the Group's second largest (7) to
date and, with the acquisition of Taylor Maxwell having delivered a
significant increase in exposure for the Group to public and
commercial end markets, the addition of Topek further increases our
presence in these markets.
"Market conditions will continue to be uncertain in the near
term but, having built a robust and increasingly diverse business
and with a disciplined approach to costs, we remain confident in
the Group's ability to continue to deliver on its strategy. The
Board is pleased to recommend an interim dividend of 1.07p per
share, reflecting the performance of the business in the half year
and the Board's confidence in the longer-term outlook for the
Group."
(7) Based on transaction value
Enquiries:
Brickability Group PLC via Montfort Communications
John Richards, Chairman
Alan Simpson, Chief Executive Officer
Mike Gant, Chief Financial Officer
Cenkos Securities plc (Nominated adviser
and broker)
Ben Jeynes / George Lawson (Corporate
Finance)
Julian Morse / Michael Johnson (Sales) +44 (0) 207 397 8900
Montfort Communications (Financial PR) +44 (0) 203 514 0897
James Olley brickability@montfort.london
Ella Henderson
This announcement contains inside information.
About Brickability
Brickability is a leading construction materials distributor,
serving customers across the UK and Europe for over 37 years
through its national and local networks. The Group operates from
more than 70 locations across the country with over 700
employees.
Brickability Group PLC
Interim Report for the six months ended 30 September 2023
Chairman's Statement
Overview
I am pleased to report a resilient set of results for the six
months to 30 September 2023 with the Group delivering a good
financial performance trading in line with expectations, achieving
an adjusted EBITDA of GBP25.6 million (H1 FY23: GBP25.5
million).
As has been well documented, the private housebuilding sector
has encountered a number of headwinds. Against this macro backdrop,
it is pleasing to see the Group's strategic focus on
diversification yielding substantial benefits, with public
housebuilding and contracting proving to be robust in comparison.
Our Taylor Maxwell bricks and cladding businesses, which form
integral parts of the Group's diversified portfolio, have
demonstrated resilience and are notably less exposed to private
housebuilding. Our Distribution and Contracting businesses have
also performed well.
Despite the short-term headwinds, the mid- to long-term
fundamentals of the private housebuilding sector are robust.
Population growth provides a solid foundation for sustained demand,
while changing demographics and societal trends continue to drive
an increase in household formation. The historical and persistent
gap between demand and supply in the housing market indicates
significant potential for growth and expansion. We also continue to
operate within a supportive political environment. Finally, the
strength and financial stability of major housebuilders provide
confidence in the sector's ability to weather short-term challenges
and capitalise on long-term opportunities.
A pivotal aspect of our strategy is robust cost control,
including in relation to recruitment, aligning our workforce with
the evolving market conditions. We are also steadfast in our
commitment to developing and nurturing talent within the
organisation. Despite cost control measures, we are pressing
forward with our management development programmes and business
apprenticeship scheme. These initiatives empower us to cultivate a
robust management talent pool, ensuring our ability to thrive in
the future.
Against the current macro backdrop, Brickability's diversified,
multi-business approach and long-term mindset continues to enable
the Group to perform well and position the Group in good stead for
the future.
Acquisitions
We continue to look for opportunities to grow the business
organically and to capitalise on the synergies created within the
Group. The acquisition pipeline continues to be exciting, and
targeted growth against our robust acquisition criteria will
continue.
In June 2023, we completed the acquisition of Precision Facades
Systems Limited for an initial consideration of GBP0.6 million with
its patented framing system for cladding. Post period, we announced
the strategic acquisition of Topek in October 2023. Topek offers a
range of services which will complement the Group's existing
cladding portfolio, including Taylor Maxwell Cladding, SBS Cladding
and Architectural Facades, meaning that the Group now has a full
range of cladding capabilities including design, fabrication,
supply and installation. The acquisition of Topek will also
significantly increase the Group's presence in the cladding
remediation market and further enhances our diversification.
Board and Environmental, Social and Governance
As the Group continues to expand in scale and customer base, we
are acutely aware of the role and responsibility we have in
tackling environmental, social and governance priorities. We remain
committed to developing our ESG strategy and ensuring continued
progress is made in that regard.
In May 2023 we announced that Alan Simpson, Chief Executive
Officer ("CEO") and founder of many of the Group's businesses, will
be stepping down from the role of CEO and as a Director of the
Company. Alan has been instrumental in building the Brickability
Group into the successful business it is today, overseeing the
Group's IPO in 2019 and multiple transformative acquisitions since.
Alan remains a major shareholder of the Group and will continue to
work with the Group in a non-board role post his stepping down. On
behalf of the Board, I thank Alan for his invaluable years of
service and congratulate him for his immense achievements.
The Board is pleased that Alan will be succeeded as CEO by Frank
Hanna, who will take up the role in April 2024. Frank is a
prominent figure in the UK brick industry and, with the wealth of
experience he brings, will help lead the Group through its next
stages of growth.
Interim Dividend
The Board is pleased to recommend an interim dividend of 1.07p
per share (H1 FY23: 1.01p), payable on 22 February 2024, reflecting
the performance of the business in the half year and the Board's
confidence in the longer-term outlook for the Group. The
ex-dividend date is 25 January 2024 with an associated record date
of 26 January 2024.
John Richards
Chairman
28 November 2023
Chief Executive's Review
The Group has performed in line with the board's expectations
during the first half of the year, against an uncertain economic
environment. Whilst revenue fell compared to last year, gross
profit remained comparable with the prior period reflecting
improved margins across all the divisions.
Group adjusted EBITDA margin has grown by 0.7% compared to the
prior period, driven by price inflation and business mix.
We continue to develop our IT systems to enhance the quality and
pace of our management information, along with making progress in
upgrading our corporate website.
Bricks and Building Materials Division
The Group's largest division, representing c70% of total sales,
saw revenues fall 15.2%, 15.2% on a LFL basis, during the period.
Following a period of significant growth in the division, the fall
is a reflection of the weaker economic conditions affecting the
housing market, especially the newbuild sector. Adjusted EBITDA
margins however have been maintained, supported by price increases
as well as reflecting the mix of the companies in the division.
Brick volumes have declined in line with the market movement for
UK despatches whilst manufacturer price increases flowing from H2
FY23 have helped to soften the impact on revenue. Whilst Timber
volumes are substantially flat over the period, market pricing has
been in decline following the significant increases experienced
recent years. The performance in our public and commercial sectors
together with the growth of our higher-margin cladding supply
businesses has been strong and has helped to mitigate some of the
impact of the headwinds in the private housing sector.
Importing Division
The Importing Division's revenue decreased by 1.6% in the first
half of the year. Adjusting for the impact of the acquisitions of
Modular Clay Products, which was acquired on 31 May 2022, along
with E.T. Clay and Heritage Clay Tiles, which were acquired on 30
September 2022, revenue fell 34.1%, on a LFL basis. The fall in
revenue reflects the weaker economic environment with lower demand
for bricks in the UK market and an increased availability of
domestic bricks.
During the period of high market demand last year, our flexible
supply chain meant we were able to source bricks for our customers
when the domestic market experienced shortages. The current
financial year sees a reduction in this activity as the
availability of bricks manufactured in the UK has improved,
however, there still remains a demand for imported brick types not
available from UK sources. It is our expectation that when market
conditions and brick demand normalise, the demand for imported
bricks will increase again due to the capacity constraints of
domestic manufacture.
Distribution Division
Revenue in the first half grew by 7.0% in the Distribution
Division, 7.0% on a LFL basis, with growth in all businesses in the
division. Towelrads continues to grow, driven by customer and
product diversification. FSN Doors and Forum Tiles saw strong
revenue growth as a result of some recent high-value orders. HBS NE
Ltd (Upowa) continues to grow, and we expect the growth rate to
accelerate throughout the second half of the year, despite the
headwinds in the private housing sector, following the introduction
of Part L legislation.
Contracting Division
Revenue in the first half grew by 17.8%, 17.8% on a LFL basis,
driven by the continued recovery of material price inflation and
the resilience of housebuilding in the mid to higher end of the
market in the Sout East. The recovery of the significant material
price increases experienced in FY23 has also seen margins improve
during the period.
Continental Tile Joint Venture
Production trials for new clay tiles from our joint venture in
Germany have progressed to an advanced stage in the period, with an
expected launch in Q1 FY25. Whilst market demand remains
suppressed, we have invested in new sales infrastructure in the UK
to maximise the success of this opportunity.
Summary
In a challenging market, Brickability has demonstrated its
resilience and its ability to deliver upon its strategic objectives
and remains committed to growing the business in a sustainable
manner.
We continue to prepare for Frank Hanna's arrival, and I look
forward to handing over the CEO role to Frank and working with him,
in a non-board role, to further grow and develop the Group.
Alan J Simpson
Chief Executive
28 November 2023
Financial Review
Revenue and Gross Profit
The Group delivered revenue of GBP324.8 million in the first six
months of H1 FY24 (H1 FY23: GBP352.7 million), a decrease of 7.9%
(GBP27.9 million) compared to the prior period. When the impact of
acquisitions is adjusted, like for like revenue decreased by 14.4%
when compared to H1 FY23.
The decrease in LFL revenue largely reflects the general
challenges being faced in the construction industry, with the
weaker economic environment affecting product demand in the
housebuilding sector. The Distribution division is also continuing
to grow through the diversification of customers and products. The
Contracting division has seen an increase in revenue compared to H1
FY23, with growth primarily from major housebuilders and developers
operating in the mid to higher end of the market.
Revenue by division was:
H1 FY24 H1 FY23 LFL
GBP'000 GBP'000 % Change % Change
===================== ========== ========== =========== ===========
Bricks and Building
Materials 229,167 270,101 (15.2) (15.2)
===================== ========== ========== =========== ===========
Importing 53,247 54,125 (1.6) (34.1)
===================== ========== ========== =========== ===========
Distribution 33,227 31,041 7.0 7.0
===================== ========== ========== =========== ===========
Contracting 23,421 19,880 17.8 17.8
===================== ========== ========== =========== ===========
Group eliminations (14,222) (22,478) (36.7) -
===================== ========== ========== =========== ===========
Total 324,840 352,669 (7.9) (14.4)
===================== ========== ========== =========== ===========
Gross profit for the 6 months increased by 0.2% to GBP55.0
million (H1 FY23: GBP54.9 million) whilst the Group's gross margin
percentage increased to 16.9% (H1 FY23: 15.6%), reflecting the
change in product mix across the group.
Adjusted Profit and Adjusted EBITDA
Statutory profit before tax of GBP16.0 million (H1 FY23: GBP14.7
million (3) ) includes a net charge of GBP5.8 million (H1 FY23:
GBP7.6 million), in respect of 'other items' which are largely
acquisition related and not considered reflective of the Group's
underlying trading operations. These are analysed below the
Condensed Consolidated Statement of Profit or Loss and Other
Comprehensive Income.
The Group's Adjusted EBITDA at GBP25.6 million for the first six
months of FY24 was comparable with the same period last year.
Adjusted EBITDA as a percentage of revenue has increased to 7.9%
(H1 FY23 : 7.2%, FY 2023: 7.6%) due mainly to the change in sales
mix across the group as noted above.
Adjusted EBITDA by division was :
H1 FY24 H1 FY23
EBITDA EBITDA
H1 FY24 as % H1 FY23 as %
GBP'000 Revenue GBP'000 Revenue
===================== ========== ========== ========== ==========
Bricks and Building
Materials 13,585 5.9% 15,704 5.8%
===================== ========== ========== ========== ==========
Importing 4,924 9.2% 5,424 10.0%
===================== ========== ========== ========== ==========
Distribution 5,229 15.7% 4,953 16.0%
===================== ========== ========== ========== ==========
Contracting 3,690 15.8% 2,565 12.9%
===================== ========== ========== ========== ==========
Central (1,861) - (3,112) -
===================== ========== ========== ========== ==========
Total 25,567 7.9% 25,534 7.2%
===================== ========== ========== ========== ==========
Statutory Profit before tax
Statutory Profit before tax for the period was GBP16.0 million
(H1 FY23: GBP14.7 million). Comparative results to 30 September
2022 have been restated, following the completion of the fair value
assessment relating to acquisitions acquired shortly before the
prior year interim financial statements were published. The
restatement relates to the consideration and net assets
acquired.
The decrease of GBP0.6 million in the H1 FY23 statutory profit
before tax, compared to the GBP15.3 million originally reported,
primarily relates to a charge of GBP0.5 million in connection with
earn-out consideration payable for the acquisition of Modular Clay
Products. Contingent consideration of GBP2.4 million was initially
recognised within goodwill and deferred consideration payable.
However, after review and based on interpretation guidance under
IFRS 3, the earn-out consideration payable treatment has been
amended and is now recognised as remuneration costs as an expense
in profit or loss over the earn-out performance period.
Further details of the prior period restatement are included in
note 8 to the interim financial statements.
Earnings per share
Basic EPS was 3.78 pence per share (H1 FY23: 3.74 pence
restated), while adjusted basic EPS was 5.30 pence per share (H1
FY23: 6.00 pence restated). Adjusted EPS is an underlying EPS,
based on the adjusted profit as noted above.
Dividend
The Board is recommending an interim dividend of 1.07p per share
(H1 FY23: 1.01p) to shareholders on the register at 26 January
2024. The ex-dividend date and payment date for the dividend will
be 25 January 2024 and 22 February 2024 respectively.
Cash flow and net debt
The Group generated operating cash flows before movements in
working capital of GBP22.6 million in the first six months of the
year compared to GBP23.2 million in the same period in FY23. Cash
generated from operations was GBP3.4 million (H1 FY23: GBP6.3
million).
The net working capital outflow of GBP19.3 million is comprised
of a GBP3.5 million outflow in respect of inventories, trade
receivables and trade payables and GBP15.8 million of accrual
movements and payments, primarily in respect of supplier rebates,
employee bonuses and contingent earn-outs, which are timing related
and mostly expected to unwind by the financial year end.
The net debt position (cash less bank borrowings) at 30
September 2023 was GBP30.9 million compared to GBP27.4 million at
30 September 2022, and is an increase of GBP22.9 million since the
net debt position at 31 March 2023.
The increase in net debt during the period includes an outflow
of working capital requirements of GBP19.3 million (H1 FY23:
GBP16.9 million) in line with the expected working capital cycle of
the Group. Much of this is expected to unwind during the second
half of the year. Other notable cash outflows were; the further
investment in property plant and equipment and intangible assets of
GBP4.5 million (H1 FY23: GBP5.8 million), tax paid of GBP5.0
million (H1 FY23: GBP5.0 million), dividends paid of GBP6.5 million
(H1 FY23: GBP6.1 million), the initial payment for the acquisition
of Precision Facades Systems of GBP0.6 million (H1 FY23: GBP15.4
million) and payment of deferred consideration, in relation to
previous acquisitions, of GBP4.7 million (H1 FY23: GBP2.0
million).
Bank facilities
At the reporting date, the group had a total bank debt of
GBP30.9 million, with a further GBP29.1 million of undrawn
committed facilities available. In October 2023 and following the
acquisition of Topek, the Group entered into a new revolving credit
facility with an initial limit of GBP100 million, on a club basis
with HSBC and Barclays. The GBP100m limit reduces to GBP80m over
the term of the loan which is 3 years (with the option of two
one-year extensions).
Defined benefit pension scheme
In June 2021, the Group acquired a defined benefit pension
scheme as part of the net assets of Taylor Maxwell (2017) Limited.
Shortly afterwards, it entered into a buy-out process to transfer
the risk associated with the scheme to an insurer. This process was
completed during the period and the pension scheme is expected to
be wound up by the end of the financial year.
Subsequent events
In October 2023, the Group acquired the entire share capital and
100% of the voting rights in Group Topek Holdings Limited for
consideration initially expected to be up to GBP52.8 million, with
up to GBP17.7 million of this payable over the three years
following acquisition depending on performance. The GBP52.8 million
is higher than the GBP45 million disclosed in the RNS as it
includes working capital adjustments to acquire the business on a
cash-free, debt-free basis. Further details are outlined in note
13. At the same time, the Group refinanced its banking facilities
as noted above.
There are no other material post-balance sheet events.
Mike Gant
Chief Financial Officer
28 November 2023
Condensed Consolidated Statement of Profit or Loss and Other
Comprehensive Income
For the six months ended 30 September 2023 (unaudited)
6 months 6 months
ended ended Year ended
30 Sept 30 Sept 31 March
2023 2022 2023
GBP'000 (Restated) (Audited)
Notes GBP'000 GBP'000
======================================================= =================== ===================== ================
Revenue 324,840 352,669 681,087
Cost of sales (269,861) (297,720) (568,220)
=================================================== =================== ===================== ================
Gross profit 54,979 54,949 112,867
Other operating income 720 - 561
Administrative expenses 5 (40,187) (38,360) (80,011)
=================================================== =================== ===================== ================
Comprising:
Depreciation and amortisation (6,921) (6,368) (13,114)
Other administrative expenses (33,266) (31,992) (66,897)
=================================================== =================== ===================== ================
Impairment losses on financial assets (414) (408) (1,611)
Finance income 208 52 143
Finance expense (2,248) (2,342) (5,256)
Share of post-tax profit of equity accounted
associates 97 91 123
Share of post-tax loss of equity accounted
joint ventures - (384) (721)
Fair value gains 2,815 1,142 8,432
Profit before tax 15,970 14,740 34,527
Tax expense (4,631) (3,593) (6,830)
=================================================== =================== ===================== ================
Profit for the period 11,339 11,147 27,697
======================================================= =================== ===================== ================
Other comprehensive income
Items that will not be reclassified to profit
or loss:
Remeasurements of defined benefit pension schemes (17) 26 43
Deferred tax on remeasurement of defined benefit
pension schemes 6 (5) (11)
Fair value gain on investments in equity instruments
designated as FVTOCI - - 10
======================================================= =================== ===================== ================
Other comprehensive income for the period (11) 21 42
======================================================= =================== ===================== ================
Total comprehensive income 11,328 11,168 27,739
======================================================= =================== ===================== ================
Profit/(loss) for the year attributable
to:
===================
Equity holders of the parent 11,336 11,169 27,738
Non-controlling interests 3 (22) (41)
=================================================== =================== ===================== ================
11,339 11,147 27,697
=================================================== =================== ===================== ================
Total comprehensive income/(loss) attributable
to:
===================
Equity holders of the parent 11,325 11,190 27,780
Non-controlling interests 3 (22) (41)
=================================================== =================== ===================== ================
11,328 11,168 27,739
===================
Earnings per share
==================================== ===== ====== =======
3.78
Basic earnings per share 7 p 3.74 p 9.26 p
==================================== ===== ====== =======
3.70
Diluted earnings per share 7 p 3.67 p 9.10 p
==================================== ===== ====== =======
5.30
Adjusted basic earnings per share 7 p 6.00 p 11.93 p
==================================== ===== ====== =======
5.20
Adjusted diluted earnings per share 7 p 5.89 p 11.71 p
==================================== ===== ====== =======
Adjusted profit
Adjusted profit excludes those items that are not considered to
be directly attributable to the Group's underlying trading
operations or for which separate disclosure would assist in
understanding the Group's performance in the period. It can be
reconciled to statutory profit after tax as follows:
6 months
ended Year ended
6 months 30 Sept 31 March
ended 2022 2023
30 Sept
2023 (Restated) (Audited)
GBP'000 GBP'000 GBP'000
================================================== ============ ============= ================
Profit for the period 11,339 11,147 27,697
Acquisition costs 23 171 281
Earn-out consideration classified as remuneration
under IFRS 3 2,695 2,627 5,483
Share-based payment expense (including employer
NI) 830 571 1,567
Amortisation and impairment of intangible assets 4,315 4,084 8,399
Unwinding of discount on contingent consideration 832 1,421 2,891
Share of post-tax profit of equity accounted
associates (97) (91) (123)
Fair value gains on contingent consideration (2,815) (886) (8,176)
Gain on acquisition - (256) (256)
====================================================== ============ ============= ================
Tax on adjusting items (1,196) (890) (2,094)
====================================================== ============ ============= ================
Adjusted profit for the period 15,926 17,898 35,669
====================================================== ============ ============= ================
Depreciation and amortisation 2,606 2,284 4,715
Finance income (208) (52) (143)
Finance expense 1,416 921 2,365
Tax expense 5,827 4,483 8,924
====================================================== ============ ============= ================
Adjusted EBITDA 25,567 25,534 51,530
====================================================== ============ ============= ================
Adjusted EBITDA reflects earnings before interest, tax,
depreciation, amortisation and other non-underlying items. A
reconciliation between adjusted EBITDA and statutory profit before
tax is included in note 5.
Condensed Consolidated Balance Sheet
Six months ended 30 September 2023 (unaudited)
6 months 6 months
ended ended Year ended
30 Sept 30 Sept 31 March
2023 2022 2023
GBP'000 (Restated) (Audited)
Notes GBP'000 GBP'000
================================================== =================== ==================== ==============
Non-current assets
Property, plant and equipment 28,457 23,859 24,783
Right of use assets 17,240 13,586 18,553
Intangible assets 148,769 156,573 152,424
Investments in equity accounted associates 391 321 324
Investments in financial assets - 178 188
Trade and other receivables 6,456 3,944 3,611
================================================== =================== ==================== ==============
Total non-current assets 201,313 198,461 199,883
================================================== =================== ==================== ==============
Current assets
Inventories 34,347 36,579 33,159
Trade and other receivables 116,357 132,948 125,603
Employee benefits 523 660 646
Current income tax assets 953 - 1,677
Cash and cash equivalents 22,920 6,651 21,645
============================================== =================== ==================== ==============
Total current assets 175,100 176,838 182,730
================================================== =================== ==================== ==============
Total assets 376,413 375,299 382,613
================================================== =================== ==================== ==============
Current liabilities
Trade and other payables (101,487) (128,194) (131,419)
Current income tax liabilities - (699) -
Loans and borrowings 10 (15,836) - (12,624)
Lease liabilities (3,234) (3,386) (3,225)
============================================== =================== ==================== ==============
Total current liabilities (120,557) (132,279) (147,268)
================================================== =================== ==================== ==============
Non-current liabilities
Trade and other payables (6,188) (17,273) (9,592)
Loans and borrowings 10 (37,880) (33,820) (16,800)
Lease liabilities (11,685) (10,813) (12,967)
Provisions (1,967) (1,445) (2,364)
Deferred tax liabilities (17,222) (19,122) (18,244)
Total non-current liabilities (74,942) (82,473) (59,967)
================================================== =================== ==================== ==============
Total liabilities (195,499) (214,752) (207,235)
================================================== =================== ==================== ==============
Net assets 180,914 160,547 175,378
================================================== =================== ==================== ==============
Equity
Called up share capital 3,003 2,997 3,003
Share premium account 102,851 102,633 102,847
Capital redemption reserve 2 2 2
Share-based payment reserve 4,169 2,438 3,509
Merger reserve 11,146 11,146 11,146
Retained earnings 59,871 41,443 55,002
============================================= ======= ======= =======
Equity attributable to equity holders of the
parent 181,042 160,659 175,509
============================================= ======= ======= =======
Non-controlling interests (128) (112) (131)
============================================= ======= ======= =======
Total equity 180,914 160,547 175,378
============================================= ======= ======= =======
Condensed Consolidated Statement of Changes in Equity
For the six months ended 30 September 2023 (unaudited)
Total
attributable
to equity
Share holders
Share premium Capital Share-based Merger Retained of the Non-controlling
capital account redemption payments reserve Earnings parent interest Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 April 2022 2,985 102,146 21,930 11,146 36,365 154,574 (90) 154,484
============================== ===== ======= ===== ====== ======= ======= ===== =======
Profit for the six months
to 30 September 2022 (as
restated) - - - - - 11,169 11,169 (22) 11,147
Other comprehensive income
for the six months to
30 September 2022 (as
restated) - - - - - 21 21 - 21
============================== ===== ======= ===== ====== ======= ======= ===== =======
Total comprehensive income
for the period - - - - - 11,190 11,190 (22) 11,168
Dividends paid - - - - - (6,111) (6,111) - (6,111)
Issue of shares on exercise
of share options 12 487 - - - - 499 - 499
Equity settled share-based
payments - - - 670 - - 670 - 670
Deferred tax on share-based
payment transactions - - -(162) - - (162) - (162)
============================== ===== ======= ===== ====== ======= ======= ===== =======
Total contributions by
and distributions to owners 12 487 - 508 - (6,111) (5,104) - (5,104)
============================== ===== ======= ===== ====== ======= ======= ===== =======
At 30 September 2022 2,997 102,633 22,438 11,146 41,444 160,660 (112) 160,548
============================== ===== ======= ===== ====== ======= ======= ===== =======
Profit for the six months
to 31 March 2023 - - - - - 16,569 16,569 (19) 16,550
Other comprehensive income
for the six months to
31 March 2023 - - - - - 21 21 - 21
============================== ===== ======= ===== ====== ======= ======= ===== =======
Total comprehensive income
for the six months to
31 March 2023 - - - - - 16,590 16,590 (19) 16,571
Dividends paid - - - - - (3,032) (3,032) - (3,032)
Issue of shares on exercise
of share options 6 214 - - - - 220 - 220
Equity settled share-based
payments - - - 967 - - 967 - 967
Deferred tax on share-based
payment transactions - - - (35) - - (35) - (35)
Current tax on share-based
payment transactions - - - 139 - - 139 - 139
Total contributions by
and distributions to owners 6 214 -1,071 - (3,032) (1,741) - (1,741)
============================== ===== ======= ===== ====== ======= ======= ===== =======
At 31 March 2023 3,003 102,847 23,509 11,146 55,002 175,509 (131) 175,378
============================== ===== ======= ===== ====== ======= ======= ===== =======
At 1 April 2023 3,003 102,847 23,509 11,146 55,002 175,509 (131) 175,378
============================= ===== ======= ===== ====== ======= ======= ===== =======
Profit for the six
months to 30 September
2023 - - - - - 11,336 11,336 3 11,339
Other comprehensive
income for the six
months to 30 September
2023 - - - - - (11) (11) - (11)
============================= ===== ======= ===== ====== ======= ======= ===== =======
Total comprehensive
income for the period - - - - - 11,325 11,325 3 11,328
Dividends paid - - - - - (6,456) (6,456) - (6,456)
Issue of shares on
exercise of share
options - 4 - - - - 4 - 4
Equity settled share-based
payments - - - 839 - - 839 - 839
Deferred tax on share-based
payment transactions - - -(179) - - (179) - (179)
============================= ===== ======= ===== ====== ======= ======= ===== =======
Total contributions
by and distributions
to owners - 4 - 660 - (6,456) (5,792) - (5,792)
============================= ===== ======= ===== ====== ======= ======= ===== =======
At 30 September 2023 3,003 102,851 24,169 11,146 59,871 181,042 (128) 180,914
============================= ===== ======= ===== ====== ======= ======= ===== =======
Condensed Consolidated Statement of Cash Flows
For the six months ended 30 September 2023 (unaudited)
6 months
ended Year ended
6 months 30 Sept 31 March
ended 2022 2023
30 Sept
2023 (Restated) (Audited)
GBP'000 GBP'000 GBP'000
=========================================== =================== =================== ============= ================
Operating activities
Profit for the period 11,339 11,147 27,697
Adjustments for:
Depreciation of property, plant and equipment 715 946 1,566
Depreciation of right of use assets 1,847 1,338 3,101
Amortisation of intangible assets 4,359 4,084 8,447
Gain on disposal of property, plant &
equipment (41) (31) (314)
and right of use assets
Foreign exchange losses 147 138 29
Share-based payments expense 830 571 1,567
Other operating income (60) - (365)
Share of post-tax profit in equity accounted
associates (97) (91) (123)
Share of post-tax loss in equity accounted
joint ventures - 384 721
Fair value changes in contingent consideration (2,815) (886) (8,176)
Gain on acquisition - (256) (256)
Movements in provisions (397) (315) (141)
Finance income (208) (52) (143)
Finance expense 2,248 2,342 5,256
Acquisition costs 23 171 281
Income tax expense 4,631 3,593 6,830
Pension charge in excess of contributions
paid 121 155 196
Operating cash flows before movements
in working capital 22,642 23,238 46,173
Changes in working capital:
Increase in inventories (1,183) (4,284) (865)
Decrease in trade and other receivables 8,263 8,949 19,331
Decrease in trade and other payables (26,338) (21,611) (19,765)
================================================================ =================== ============= ================
Cash generated from operations 3,384 6,292 44,874
Payment of acquisition expenses (23) (171) (281)
Interest received 41 8 125
Income taxes paid (5,042) (5,047) (11,074)
================================================================ =================== ============= ================
Net cash (used in)/generated from operating
activities (1,640) 1,082 33,644
================================================================ =================== ============= ================
Investing activities
Purchase of property, plant and equipment (4,402) (5,582) (7,229)
Proceeds from sale of property, plant and
equipment 47 86 441
Purchase of right of use assets (16) - (2,525)
Purchase of intangible assets (124) (264) (478)
Acquisition of subsidiaries (550) (15,403) (16,674)
Net cash acquired with subsidiary undertakings - 4,675 4,676
Acquisition of interests in joint ventures - - (442)
Loan to joint venture (1,719) (2,608) (2,960)
Proceeds from sale of other investments 188 - -
Dividends received from associates 30 30 60
Net cash used in investing activities (6,546) (19,066) (25,131)
================================================================== ======== ======== =========
Financing activities
Equity dividends paid (6,456) (6,111) (9,143)
Proceeds from issue of ordinary shares net of
share issue costs 4 499 719
Proceeds from bank borrowings 60,000 53,000 115,400
Repayment of bank borrowings (39,000) (43,500) (123,000)
Payment of lease liabilities (1,737) (1,357) (2,791)
Payment of deferred and contingent consideration (4,744) (2,038) (3,499)
Interest paid (1,754) (882) (2,246)
Net cash generated from/(used in) financing
activities 6,313 (389) (24,560)
========================================================== ====== ======== ======== =========
Net decrease in cash and cash equivalents (1,873) (18,373) (16,047)
Cash and cash equivalents at beginning of period 9,021 25,028 25,028
Effect of changes in foreign exchange rates (64) (4) 40
Cash and cash equivalents at end of period 7,084 6,651 9,021
========================================================== ====== ======== ======== =========
Notes to the Condensed Consolidated Interim Financial
Statements
For the six months ended 30 September 2023 (unaudited)
1. General Information
Brickability Group PLC (the 'Company' or the 'Group') is a
public company limited by shares, incorporated in the United
Kingdom under the Companies Act 2006 (registration number 11123804)
and registered in England and Wales. The registered office address
is c/o Brickability Limited, South Road, Bridgend Industrial
Estate, Bridgend, United Kingdom, CF31 3XG.
Copies of the Interim Report may be obtained from the registered
address or from the Investors section of the Company's website at
www.brickabilitygroupplc.com .
2. Basis of Preparation
These condensed consolidated interim financial statements have
been prepared in accordance with IAS 34 Interim Financial Reporting
and should be read in conjunction with the Group's last annual
consolidated financial statements as at and for the year ended 31
March 2023. They do not include all of the information required for
a complete set of IFRS financial statements. However, selected
explanatory notes are included to explain events and transactions
that are significant to understanding changes in the Group's
financial position and performance since the last annual financial
statements.
The Annual Report and Accounts for the year ended 31 March 2023
was audited and has been filed with the Registrar of Companies. The
Independent Auditors' Report on the Annual Report and Accounts for
the year ended 31 March 2023 was not qualified and did not contain
statements under s498(2) or (3) of the Companies Act 2006.
The financial information for the six months ended 30 September
2023 and 30 September 2022 is unaudited and has not been reviewed
by the Company's auditors.
The interim financial statements are presented in pounds
sterling, which is the functional currency of the Group. Amounts
are rounded to the nearest thousand, unless otherwise stated.
The Directors have a reasonable expectation that the Group has
adequate resources to continue in operational existence for the
foreseeable future and thus continue to adopt the going concern
basis in preparing these interim financial statements.
3. Significant Accounting Policies
The Group has applied the same accounting policies in these
interim financial statements as in its 2023 annual financial
statements. New standards effective from 1 January 2023 are
outlined in the 2023 annual financial statements. The application
of these standards has not had a material impact on the amounts
reported in either the current or prior reporting periods.
There have been no other significant amendments or new standards
introduced during the period that would have a material impact on
the amounts reported.
4. Use of judgements and estimates
The significant judgements made by management in applying the
Group's accounting policies and key sources of estimation
uncertainty for the interim financial statements are the same as
those described in the 2023 annual financial statements.
5. Segmental analysis
The Group has four reportable divisions as follows:
* Bricks and Building Materials, which incorporates the
sale of superior quality building materials to all
sectors of the construction industry including
national house builders, developers, contractors,
general builders and retail to members of the public;
* Importing, which is primarily responsible for
importing building products, not otherwise available
in the UK, to complement traditional and contemporary
architecture;
* Distribution, which focuses on the sale and
distribution of a wide range of products, including
windows, doors, radiators and associated parts and
accessories; and
* Contracting, which provides flooring and roofing
construction services, primarily within the
residential construction sector.
Revenues and profits are reported in the same manner as that
reported internally to the Board, as the Group's Chief Operating
Decision-Maker (CODM).
6 months ended 30 September 2023
==============================================================================================
Bricks Unallocated
and Building and group
Materials Importing Distribution Contracting eliminations Consolidated
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
==================== =============== ============ =============== ============== =============== ===============
Revenue from sale
of goods 226,171 38,085 28,866 - - 293,122
Revenue from
rendering
of services - 4,363 3,934 23,421 - 31,718
==================== =============== ============ =============== ============== =============== ===============
Total external
revenue 226,171 42,448 32,800 23,421 - 324,840
==================== =============== ============ =============== ============== =============== ===============
Total internal
revenue 2,996 10,799 427 - (14,222) -
==================== =============== ============ =============== ============== =============== ===============
Total revenue 229,167 53,247 33,227 23,421 (14,222) 324,840
==================== =============== ============ =============== ============== =============== ===============
Adjusted EBITDA 13,585 4,924 5,229 3,690 (1,861) 25,567
==================== =============== ============ =============== ============== =============== ===============
Depreciation and
amortisation (6,921) (6,921)
Acquisition and
re-financing
costs (23) (23)
Earn out
consideration
classified as
remuneration
under IFRS 3 (2,695) (2,695)
Share-based payment
expense (830) (830)
Finance income 208 208
Finance expense (2,248) (2,248)
Share of results of
associates 97 97
Fair value gains
and losses 2,815 2,815
Group profit before
tax 13,585 4,924 5,229 3,690 (11,458) 15,970
==================== =============== ============ =============== ============== =============== ===============
6 months ended 30 September 2022
==============================================================================================
Bricks Unallocated
and Building and group
Materials Importing Distribution Contracting eliminations Consolidated
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
==================== =============== ============ =============== ============== =============== ===============
Revenue from sale
of goods 264,899 30,728 27,133 - - 322,760
Revenue from
rendering
of services - 6,278 3,776 19,855 - 29,909
==================== =============== ============ =============== ============== =============== ===============
Total external
revenue 264,899 37,006 30,909 19,855 - 352,669
==================== =============== ============ =============== ============== =============== ===============
Total internal
revenue 5,202 17,119 132 25 (22,478) -
==================== =============== ============ =============== ============== =============== ===============
Total revenue 270,101 54,125 31,041 19,880 (22,478) 352,669
==================== =============== ============ =============== ============== =============== ===============
Adjusted EBITDA 15,704 5,424 4,953 2,565 (3,112) 25,534
==================== =============== ============ =============== ============== =============== ===============
Depreciation and
amortisation (6,368) (6,368)
Acquisition and
re-financing
costs (171) (171)
Earn out
consideration
classified as
remuneration
under IFRS 3 (2,627) (2,627)
Share-based payment
expense (571) (571)
Finance income 52 52
Finance expense (2,342) (2,342)
Share of results of
associates 91 91
Fair value gains
and losses 1,142 1,142
Group profit before
tax 15,704 5,424 4,953 2,565 (13,906) 14,740
==================== =============== ============ =============== ============== =============== ===============
Year ended 31 March 2023
==============================================================================================
Bricks Unallocated
and Building and group
Materials Importing Distribution Contracting eliminations Consolidated
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
==================== =============== ============ =============== ============== =============== ===============
Revenue from sale
of goods 490,472 75,411 54,510 - - 620,393
Revenue from
rendering
of services - 11,472 8,085 41,137 - 60,694
==================== =============== ============ =============== ============== =============== ===============
Total external
revenue 490,472 86,883 62,595 41,137 - 681,087
==================== =============== ============ =============== ============== =============== ===============
Total internal
revenue 8,122 30,700 394 201 (39,417) -
==================== =============== ============ =============== ============== =============== ===============
Total revenue 498,594 117,583 62,989 41,338 (39,417) 681,087
==================== =============== ============ =============== ============== =============== ===============
Adjusted EBITDA 30,141 13,188 8,893 5,620 (6,312) 51,530
==================== =============== ============ =============== ============== =============== ===============
Depreciation and
amortisation (13,114) (13,114)
Acquisition and
re-financing
costs (281) (281)
Earn out
consideration
classified as
remuneration
under IFRS 3 (5,483) (5,483)
Share-based payment
expense (1,567) (1,567)
Finance income 143 143
Finance expense (5,256) (5,256)
Share of results of
associates 123 123
Fair value gains
and losses 8,432 8,432
Group profit before
tax 30,141 13,188 8,893 5,620 (23,315) 34,527
==================== =============== ============ =============== ============== =============== ===============
6 months ended 30 September 2023
=========================================================================================
Bricks
and Building
Materials Importing Distribution Contracting Central Consolidated
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
========================= =============== ============ =============== ============== ========== ===============
Non-current segment
assets 77,469 24,725 55,823 29,230 13,675 200,922
Current segment assets 102,616 25,887 28,903 13,503 4,191 175,100
========================= =============== ============ =============== ============== ========== ===============
Total segment assets 180,085 50,612 84,726 42,733 17,866 376,022
========================= =============== ============ =============== ============== ========== ===============
Unallocated assets:
Investment in associates 391
Investment in joint
ventures -
Investment in financial
assets -
Group assets 376,413
========================= =============== ============ =============== ============== ========== ===============
Total segment
liabilities (78,446) (12,664) (17,868) (4,960) (26,459) (140,397)
Loans and borrowings
(excluding leases and
overdrafts) (37,880)
Deferred tax liabilities (17,222)
========================= =============== ============ =============== ============== ========== ===============
Group liabilities (195,499)
========================= =============== ============ =============== ============== ========== ===============
6 months ended 30 September 2022
=========================================================================================
Bricks
and Building
Materials Importing Distribution Contracting Central Consolidated
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
========================= =============== ============ =============== ============== ========== ===============
Non-current segment
assets 80,812 26,784 52,809 31,014 6,543 197,962
Current segment assets 111,735 31,779 23,043 10,281 - 176,838
========================= =============== ============ =============== ============== ========== ===============
Total segment assets 192,547 58,563 75,852 41,295 6,543 374,800
========================= =============== ============ =============== ============== ========== ===============
Unallocated assets:
Investment in associates 321
Investment in joint
ventures -
Investment in financial
assets 178
Group assets 375,299
========================= =============== ============ =============== ============== ========== ===============
Total segment
liabilities (99,418) (24,209) (10,994) (5,589) (21,600) (161,810)
Loans and borrowings
(excluding leases and
overdrafts) (33,820)
Deferred tax liabilities (19,122)
========================= =============== ============ =============== ============== ========== ===============
Group liabilities (214,752)
========================= =============== ============ =============== ============== ========== ===============
Year ended 31 March 2023
=========================================================================================
Bricks
and Building
Materials Importing Distribution Contracting Central Consolidated
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
========================= =============== ============ =============== ============== ========== ===============
Non-current segment
assets 79,152 33,147 49,880 29,520 7,672 199,371
Current segment assets 114,359 26,403 25,849 11,965 4,154 182,730
========================= =============== ============ =============== ============== ========== ===============
Total segment assets 193,511 59,550 75,729 41,485 11,826 382,101
========================= =============== ============ =============== ============== ========== ===============
Unallocated assets:
Investment in associates 324
Investment in joint
ventures -
Investment in financial
assets 188
Group assets 382,613
========================= =============== ============ =============== ============== ========== ===============
Total segment
liabilities (96,394) (17,739) (18,601) (4,933) (34,524) (172,191)
Loans and borrowings
(excluding leases and
overdrafts) (16,800)
Deferred tax liabilities (18,244)
========================= =============== ============ =============== ============== ========== ===============
Group liabilities (207,235)
========================= =============== ============ =============== ============== ========== ===============
6. Dividends
Year ended
6 months 6 months 31 March
ended ended 2023
30 Sept 30 Sept
2023 2022 (Audited)
GBP'000 GBP'000 GBP'000
============================================= =================== === =========== ========== ===============
Amounts recognised as distributions to
equity holders in the period:
Final dividend for the year ended 31 March
2023 of 2.15p per share
(30 Sept 2022: for the year ended 31 March
2022 of 1.0850p per share)
(31 March 2023: for the year ended 31 March
2022 of 2.04p per share) 6,456 6,111 6,111
Interim dividend for the year ended 31 March
2024
(31 March 2023: for the year ended 31 March
2023 of 1.01p per share) - - 3,032
======================================================================= =========== ========== ===============
Total dividends paid during the period 6,456 6,111 9,143
======================================================================= =========== ========== ===============
The Directors recommend that an interim dividend of 1.07p per
ordinary share be paid for the year ended 31 March 2024. This
dividend has not been included as a liability in these interim
financial statements.
7. Earnings per share
Earnings per share (EPS) is calculated by dividing the profit
for the year, attributable to ordinary equity holders of the
parent, by the weighted average number of ordinary shares
outstanding during the year.
Diluted EPS is calculated by dividing the profit for the year,
attributable to ordinary equity holders, by the weighted average
number of ordinary shares outstanding during the year plus the
weighted average number of ordinary shares that would be issued on
conversion of all the dilutive potential ordinary shares into
ordinary shares.
The calculation of basic and diluted earnings per share is based
on the following data:
6 months ended 30 September
2022
6 months ended 30 September
2023 (Restated)
================================== ====================================
Weighted Weighted
average Earnings average
number per number Earnings
Earnings of share Earnings of per share
GBP'000 shares (p) GBP'000 shares (p)
========================== ========= ============ ========= ========= ============ ===========
Basic earnings per share 11,336 300,289,736 3.78 11,169 298,826,434 3.74
Effect of dilutive
securities
Employee share options - 5,971,423 - - 5,411,479 -
Diluted earnings per
share 11,336 306,261,159 3.70 11,169 304,237,913 3.67
========================== ========= ============ ========= ========= ============ ===========
Year ended 31 March
2023 (Audited)
==================================
Weighted
average Earnings
number per
Earnings of share
GBP'000 shares (p)
========================== ========= ============ =========
Basic earnings per share 27,738 299,439,718 9.26
Effect of dilutive
securities - 5,403,747 -
Employee share options
Diluted earnings per
share 27,738 304,843,465 9.10
========================== ========= ============ =========
Adjusted earnings per share and adjusted diluted earnings per
share, based on the adjusted profit attributable to the equity
holders of the parent (adjusted profit for the period add
non-controlling interest share of loss), is based on the following
data:
6 months ended 30 September
2022
6 months ended 30 September
2023 (Restated)
================================== ====================================
Weighted Weighted
average Earnings average
number per number Earnings
Earnings of share Earnings of per share
GBP'000 shares (p) GBP'000 shares (p)
=============================== ========= ============ ========= ========= ============ ===========
Adjusted basic earnings
per share 15,923 300,289,736 5.30 17,920 298,826,434 6.00
Effect of dilutive securities
Employee share options - 5,971,423 - - 5,411,479 -
Adjusted diluted earnings
per share 15,923 306,261,159 5.20 17,920 304,237,913 5.89
=============================== ========= ============ ========= ========= ============ ===========
Year ended 31 March
2023 (Audited)
==================================
Weighted
average Earnings
number per
Earnings of share
GBP'000 shares (p)
=============================== ========= ============ =========
Adjusted basic earnings
per share 35,710 299,439,718 11.93
Effect of dilutive securities
Employee share options - 5,403,747 -
Adjusted diluted earnings
per share 35,710 304,843,465 11.71
=============================== ========= ============ =========
8. Business combinations
The Group acquired the entire share capital and 100% of the
voting rights in the following company during the period:
Acquisition
Company acquired date
============================= ==============
Precision Façade Systems 2 June 2023
Ltd
The book value of the assets acquired and liabilities assumed on
acquisition were as follows:
Precision
Façade
Systems
Ltd
GBP'000
================================ =============
Property plant and equipment 15
Right of use assets -
Inventory 5
Trade and other receivables 15
Cash and cash equivalents -
Trade and other payables (14)
Current income tax liabilities -
Lease liabilities -
Deferred tax -
================================ =============
Total identifiable net assets 21
=================================== =============
Goodwill 579
=================================== =============
Total consideration 600
=================================== =============
Satisfied by:
Cash paid 550
Deferred cash consideration 50
Contingent consideration -
============================= ====
Total consideration 600
================================= ====
Due to the timing of the acquisition, a detailed assessment of
the fair value of all identifiable net assets, and the value of any
uncollectable contractual cash flows, has not yet been completed at
the date of these interim financial statements.
The goodwill figure is therefore subject to change and the above
consideration is subject to post completion adjustments. Residual
goodwill will primarily comprise the strategic value of the
acquisition, including the potential for future growth within the
framing market. None of the goodwill is expected to be deductible
for tax purposes.
The acquisition was carried out in order to supplement and
expand the Group's existing product range in the cladding market.
Upon acquisition the assets and liabilities were hived into the
acquiring group company and the entity ceased trading. As such, the
Group's revenue and net profit would not be impacted had the
business combination taken place at the beginning of the financial
period.
Acquisition costs of GBP23,000 were recognised in profit or loss
in respect of stamp duty and legal and professional fees associated
with this acquisition.
Business combinations completed in prior periods
Whiffen Holdings Limited and Beacon Roofing Limited
The Group acquired 100% of the share capital and voting rights
in Whiffen Holdings Limited and its subsidiary, Beacon Roofing
Limited (together the 'Whiffen Holdings Group'), on 31 March 2022.
As disclosed in the 2022 Annual Report and Accounts, due to the
timing of the acquisition the value of the identifiable net assets
was included on a provisional basis pending a detailed assessment
of the fair value of the contingent consideration and all
identifiable net assets. This assessment was still ongoing at the
time of publishing the 2022 interim financial statements.
Details of the revised fair value of identifiable assets and
liabilities acquired, purchase consideration and goodwill are as
follows:
Book value Restated
originally fair
reported Adjustment value
GBP'000 GBP'000 GBP'000
================================ ============ =========== =========
Property plant and equipment 709 502 1,211
Identifiable intangible assets - 2,255 2,255
Inventory 45 - 45
Trade and other receivables 2,476 - 2,476
Cash and cash equivalents 741 - 741
Trade and other payables (1,206) - (1,206)
Current income tax liabilities (365) - (365)
Provisions (76) - (76)
Deferred tax (73) (675) (748)
================================= ============ =========== =========
Total identifiable net assets 2,251 2,082 4,333
================================= ============ =========== =========
Goodwill 5,968 (1,889) 4,079
================================= ============ =========== =========
Total consideration 8,219 193 8,412
================================= ============ =========== =========
Satisfied by:
Cash paid 5,371 - 5,371
Deferred cash consideration 1,676 - 1,676
Contingent consideration 1,172 193 1,365
=============================== ====== ==== ======
Total consideration 8,219 193 8,412
=============================== ====== ==== ======
Had the full fair value assessment been carried out prior to
announcing the interim results to 30 September 2022, the interim
financial statements would have differed as follows:
-- The cost of property, plant and equipment would have been GBP502,000
higher on acquisition, with a corresponding decrease in goodwill.
A depreciation charge of GBP6,000 would have also been subsequently
recorded, with a corresponding reduction in the property, plant
and equipment balance at 30 September 2022.
-- Intangible assets of GBP2,255,000 and a related deferred tax
liability of GBP675,000 would have also been recognised, with
a corresponding net decrease in goodwill. An amortisation charge
of GBP113,000 and a deferred tax credit of GBP23,000 would have
been recorded in profit or loss.
-- The contingent consideration liability on acquisition would
have been GBP193,000 higher, with a corresponding increase in
goodwill. An interest charge of GBP89,000 would have been recognised
in respect of unwinding the discount applied to the contingent
consideration.
Modular Clay Products Ltd
The Group acquired 100% of the share capital and voting rights
in Modular Clay Products Ltd on 31 May 2022. As disclosed in the
2022 interim financial statements, the value of the identifiable
net assets had been included at 30 September 2022 on a provisional
basis as an independent valuation of the fair value of was ongoing
at the time of preparing the interim financial statements. The
values were, however, finalised before reporting the Group's annual
results to 31 March 2023.
Details of the revised fair value of identifiable assets and
liabilities acquired, purchase consideration and goodwill are as
follows:
Book value Restated
originally fair
reported Adjustment value
GBP'000 GBP'000 GBP'000
================================ ============ =========== =========
Property plant and equipment 16 - 16
Right of use assets 28 - 28
Identifiable intangible assets - 3,810 3,810
Inventory 164 - 164
Trade and other receivables 2,569 319 2,888
Cash and cash equivalents 4,205 - 4,205
Trade and other payables (1,785) (319) (2,104)
Current income tax liabilities (514) - (514)
Lease liabilities (28) - (28)
Deferred tax 8 (934) (926)
================================= ============ =========== =========
Total identifiable net assets 4,663 2,876 7,539
================================= ============ =========== =========
Goodwill 5,010 (5,010) -
================================= ============ =========== =========
Gain on acquisition - (256) (256)
================================= ============ =========== =========
Total consideration 9,673 (2,390) 7,283
================================= ============ =========== =========
Satisfied by:
Cash paid 7,283 - 7,283
Contingent consideration 2,390 (2,390) -
============================ ====== ======== ======
Total consideration 9,673 (2,390) 7,283
============================ ====== ======== ======
Had the full fair value assessment been carried out prior to
announcing the interim results to September 2022, these interim
financial statements would have differed as follows:
-- GBP460,000 would have been recognised in administrative expenses
in respect of earn-out consideration payable to the sellers of
Modular Clay Products. Earn-out consideration is payable depending
on the future performance of the business. Due to a clause in
the contract, this earn-out consideration is deemed to be treated
as remuneration under IFRS 3, with the cost being accrued in the
profit and loss over the earn-out period. This would have also
led to a reduction in goodwill and contingent consideration.
-- Amortisation amounting to GBP127,000 would have been charged
on the intangible assets recognised. A deferred tax credit of
GBP24,000 would have also been recognised on the release of the
associated deferred tax liability over the intangible assets'
useful life.
-- A gain of GBP256,000 would have been recognised in profit or
loss on the acquisition. The Group does not consider the acquisition
to be a bargain purchase commercially. However, as noted above,
further amounts payable to the seller, dependent on future performance,
are deemed to be treated as remuneration as a result of a 'good
leaver' clause being included within the contract. Due to this
component of consideration being accounted for as remuneration,
the fair value of identifiable net assets acquired exceeds the
consideration under IFRS 3. The gain has therefore arisen as a
result of accounting treatments, with IFRS 3 requiring the gain
to be credited to profit or loss on acquisition.
E. T. Clay Products Limited
The Group acquired 100% of the share capital and voting rights
in E. T. Clay Products Limited on 30 September 2022. As disclosed
in the 2022 interim financial statements, due to the timing of the
acquisition the value of the identifiable net assets was included
on a provisional basis pending a detailed assessment of the fair
value of the contingent consideration and all identifiable net
assets.
Details of the revised fair value of identifiable assets and
liabilities acquired, purchase consideration and goodwill are as
follows:
Book value Restated
originally fair
reported Adjustment value
GBP'000 GBP'000 GBP'000
================================ ============ =========== =========
Property plant and equipment 157 - 157
Right of use assets - 792 792
Identifiable intangible assets - 3,083 3,083
Inventory 2,838 - 2,838
Trade and other receivables 8,651 - 8,651
Cash and cash equivalents 627 - 627
Trade and other payables (5,524) (80) (5,604)
Current income tax liabilities (878) 20 (858)
Lease liabilities - (792) (792)
Provisions - (27) (27)
Deferred tax (31) (761) (792)
================================= ============ =========== =========
Total identifiable net assets 5,840 2,235 8,075
================================= ============ =========== =========
Goodwill 5,868 (4,238) 1,630
================================= ============ =========== =========
Total consideration 11,708 (2,003) 9,705
================================= ============ =========== =========
Satisfied by:
Cash paid 7,490 1,172 8,662
Deferred cash consideration 1,008 (1,008) -
Contingent consideration 3,210 (2,167) 1,043
=============================== ======= ======== ======
Total consideration 11,708 (2,003) 9,705
=============================== ======= ======== ======
Had the full fair value assessment been carried out prior to
announcing the interim results to 30 September 2022, the interim
financial statements would have differed as follows:
-- Right of use assets of GBP792,000 would have been recognised,
with a corresponding lease liability.
-- Intangible assets of GBP3,083,000 and a related deferred tax
liability of GBP761,000 would have been recognised, with a corresponding
net decrease in goodwill.
Heritage Clay Tiles Limited
The Group acquired 100% of the share capital and voting rights
in Heritage Clay Tiles Limited on 30 September 2022. As disclosed
in the 2022 interim financial statements, due to the timing of the
acquisition the value of the identifiable net assets was included
on a provisional basis pending a detailed assessment of the fair
value of the contingent consideration and all identifiable net
assets.
Details of the revised fair value of identifiable assets and
liabilities acquired, purchase consideration and goodwill are as
follows:
Book value Restated
originally fair
reported Adjustment value
GBP'000 GBP'000 GBP'000
================================ ============ =========== =========
Property plant and equipment 29 - 29
Right of use assets - 305 305
Identifiable intangible assets - 309 309
Inventory 1,172 - 1,172
Trade and other receivables 1,072 660 1,732
Cash and cash equivalents (109) (47) (156)
Trade and other payables (2,214) (650) (2,864)
Current income tax liabilities (37) 37 -
Lease liabilities - (305) (305)
Provisions - (5) (5)
Deferred tax 60 (76) (16)
================================= ============ =========== =========
Total identifiable net assets (27) 228 201
================================= ============ =========== =========
Goodwill 1,012 (402) 610
================================= ============ =========== =========
Total consideration 985 (174) 811
================================= ============ =========== =========
Satisfied by:
Cash paid 630 99 729
Deferred cash consideration 85 (85) -
Contingent consideration 270 (188) 82
=============================== ==== ====== ====
Total consideration 985 (174) 811
=============================== ==== ====== ====
Had the full fair value assessment been carried out prior to
announcing the interim results to 30 September 2022, the interim
financial statements would have differed as follows:
-- Right of use assets of GBP305,000 would have been recognised,
with a corresponding lease liability.
-- Intangible assets of GBP309,000 and a related deferred tax
liability of GBP76,000 would have been recognised, with a corresponding
net decrease in goodwill.
As the acquisitions of E. T. Clay Products Limited and Heritage
Clay Tiles Limited took place on the final day of the reporting
period, there is no impact on the profit or loss reported for the
six months ended 30 September 2022.
For both acquisitions, the change from deferred cash
consideration to additional cash paid was due to the timing of the
final completion payments being made, based on final agreed form
completion accounts, compared to the interim financial statements
being published.
The contingent consideration liability would have been
discounted to fair value, with a corresponding reduction in
goodwill. Following a further review of forecast results on
acquisition, and the expected changes in market and economic
conditions, the contingent consideration payable was also initially
anticipated to be lower than that upon which the undiscounted
contingent consideration reported in the 2022 interim financial
statements was originally based.
The September 2022 comparatives have been restated in these
interim financial statements to reflect the changes for all of the
above acquisitions.
A prior period restatement would usually require the
presentation of a third balance sheet at 1 April 2022. However, as
the restatement of the provisional fair values would have no impact
on the balance sheet at that date, it is not considered that this
would provide additional useful information. As such, a third
consolidated balance sheet has not been included within these
interim financial statements.
Contingent consideration
The Group has entered into contingent consideration arrangements
in purchasing several subsidiaries. Final amounts payable under
these agreements are all subject to future performance and the
acquired business achieving pre-determined EBITDA targets, over the
three years following acquisition, with the exception of HBS NE
Limited which is over five years.
The fair value of all contingent consideration is based on a
discounting cash flow model, applying a discount rate of between
1.7% and 23.6% to the expected future cash flows.
Summarised below are the fair values of the contingent
consideration at both acquisition and reporting date, the potential
undiscounted amount payable and the discount rates applied within
the discounting cash flow models, for each acquisition where
contingent consideration arrangements remain in place.
Undiscounted Undiscounted
amount amount
Discount Fair value Fair value Fair value payable payable
rate at at 30 September at 30 September 30 September 30 September
Company acquisition 2023 2022 2023 2022
acquired GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
=============== =============== ================== =============== =============== ============== ==============
U Plastics
Limited 3.5% 2,208 - 1,100 - 1,116
Bathroom Barn
Limited 1.7% 231 73 98 74 100
McCann
Logistics Ltd 1.7% 889 - 1,584 - 1,604
Taylor Maxwell
Group
(2017) Limited 4.1% - 333 431 340 435
SBS Cladding
Limited 4.1% 1,845 782 1,434 800 1,500
Leadcraft
Limited 10.4% 722 957 700 1,066 861
16.1%
HBS NE Limited - 10,069 4,285 11,287 6,998 21,513
23.6%
Beacon Roofing
Limited 13.0% 1,365* 1,643 1,452* 1,962 1,885*
E. T. Clay
Products
Limited 16.0% 1,043* - 1,043* - 1,420*
Heritage Clay
Tiles
Limited 20.0% 82* - 82* - 119*
=============== =============== ================== =============== =============== ============== ==============
*2022 and acquisition values restated following completion of
fair value assessment of total consideration payable and net assets
acquired as noted above.
The potential undiscounted amount payable in respect of E. T.
Clay Products Limited and Heritage Clay Tiles Limited ranges from
GBPnil to GBP3,480,000 and the amount payable for SBS Cladding
Limited ranges from GBP1,200,000 to GBP2,000,000 (2022: GBPnil to
GBP2,000,0000). It is not possible to determine a range of outcomes
for other acquisitions as the arrangements do not contain a maximum
payable.
Changes in the range of outcomes are due to amounts paid or
payable being determined during the year as milestones within the
performance period are met.
The acquisition of Taylor Maxwell Group (2017) Limited is also
subject to further payments depending on future performance,
ranging from GBPnil to GBP13,000,000, over the three years
following acquisition. Based on current interpretation guidance
concerning contingent payments to employees under IFRS 3, the
earn-out amounts payable are recognised in profit or loss over the
earn-out period as remuneration costs. This is due to the inclusion
of a 'bad leaver' clause in the share purchase agreement, under
which the earn-out consideration payment is forfeited. The earn-out
consideration is therefore deemed to effectively be contingent on
the continued employment of the seller and the seller not being
considered a 'bad leaver'. The anticipated total amount payable,
however, is not expected to change due to other clauses and payment
terms within the share purchase agreement. A charge of GBP2,167,000
has been recognised in the period ended 30 September 2023 in
respect of this earn-out consideration, presented within other
administrative expenses.
Similarly, the acquisition of Modular Clay Products Ltd is also
subject to further amounts payable depending on future performance
over the three years following acquisition, which are recognised as
remuneration due to a 'good leaver' clause within the share
purchase agreement. It is not possible to determine a range for
these future payments as the agreement does not contain a maximum
payable. A charge of GBP528,000 has been recognised in the period
in respect of this earn-out consideration, presented within other
administrative expenses.
Fair value
Fair value Additions Fair value at
at through (gain)/loss Settlement 30 September
31 March business Finance GBP'000 GBP'000 2023
2023 combinations expense GBP'000
Company acquired GBP'000 GBP'000 GBP'000
=================== ============== ===================== ======== ============= ============ ================
U Plastics Limited 962 - 2 - (964) -
McCann Logistics
Ltd 1,324 - 6 7 (1,337) -
SBS Cladding
Limited 1,464 - 18 - (700) 782
HBS NE Limited 3,901 - 384 - - 4,285
Beacon Roofing
Limited 2,355 - 148 167 (1,027) 1,643
E. T. Clay Products
Limited 2,433 - 187 (2,620) - -
Other business
combinations 1,655 - 77 (369) - 1,363
=================== ============== ================= ============ ============= ============ ==============
Beacon Roofing Limited has continued to perform well following
acquisition, gaining new business from a competitor that entered
administration during the year ended 31 March 2023. This has
resulted in the fair value loss as the amount expected to be paid
in relation to contingent consideration is now higher.
A fair value gain has been recognised for E. T. Clay Products
Limited and Heritage Clay Tiles (within 'Other Business
Combination' line) as trading has been more challenging than
previously expected. Given the ongoing uncertainty in the market,
and the anticipated timescales for the industry to return to former
levels of demand, further payment in the earn-out period is not
currently expected.
A sensitivity in respect of the inputs into the discounted cash
flow model, determining the contingent consideration, is outlined
in note 9.
9. Financial instruments
Fair values
The significant unobservable inputs used in the fair value
measurements categorised within level 3 of the fair value
hierarchy, together with a quantitative sensitivity analysis at 30
September and 31 March are shown below:
Significant
Valuation Unobservable Range/ Sensitivity of the
Financial instrument technique inputs estimate input to fair value
==================== =========== ============================ ============== ===================================
Contingent Present Assumed probability-adjusted Sept 2023: The higher the adjusted
Consideration value of EBITDA of acquired GBP362,000 - EBITDA, the higher the
in a business future entities. GBP17,702,000 fair value. If forecast
combination (note cash flows EBITDA was 10% higher,
8) Sept 2022: while all other variables
GBP435,000 - remained constant, the
GBP53,781,000 fair value of the overall
contingent consideration
March 2023: liability would increase
GBP406,000 by GBP830,000 (2022:
- GBP2,465,000).
GBP17,702,000 A 10% decrease in EBITDA
would result in a
decrease
in the liability of
GBP762,000
(2022: GBP3,241,000).
(March 2023: increase
and decrease of
Discount rate GBP706,000)
Sept 2023:
1.7% - 23.6% The higher the discount
rate, the lower the fair
Sept 2022: value. If the discount
1.7% - 23.6% rate applied was 2%
higher,
March 2023: while all other variables
1.7% - 23.6% remained constant, the
fair value of the overall
contingent consideration
liability would decrease
by GBP232,000 (2022:
GBP719,000).
A 2% decrease in the rate
would result in an
increase
in the liability of
GBP245,000
(2022: GBP657,000).
(March 2023: decrease
of GBP372,000 and
increase
of GBP393,000)
==================== =========== ============================ ============== ===================================
Reconciliation of level 3 fair value measurements of financial
instruments
6 months
ended Year ended
6 months 30 Sept 31 March
ended 2022 2023
30 Sept
2023 (Restated) (Audited)
Contingent consideration liability GBP'000 GBP'000 GBP'000
======================================== =================== === =========== ============= ===============
At 1 April 14,093 19,774 19,774
Additions through business combinations - 1,125 1,125
Finance expense charged to profit or
loss 822 1,398 2,853
Settlement (4,027) (1,435) (1,483)
Fair value gains recognised in profit
or loss (2,815) (886) (8,176)
================================================================== =========== ============= ===============
At 30 September/ 31 March 8,073 19,976 14,093
================================================================== =========== ============= ===============
10. Loans and borrowings
Year ended
6 months 6 months 31 March
ended ended 2023
30 Sept 30 Sept
2023 2022 (Audited)
GBP'000 GBP'000 GBP'000
======================================== =========== ============= ===============
Current loans and borrowings at 1 April 12,624 - -
Non-current loans and borrowings at
1 April 16,800 24,240 24,240
=========== ============= ===============
Total loans and borrowings at 1 April 29,424 24,240 24,240
Issue of bank loans 60,000 53,000 115,400
Repayment of bank loans (39,000) (43,500) (123,000)
Movement in overdraft facility 3,212 - 12,624
Other movements* 80 80 160
Loans and borrowings at 30 September/
31 March 53,716 33,820 29,424
======================================== =========== ============= ===============
Analysed as:
Current loans and borrowings 15,836 - 12,624
Non-current loans and borrowings 37,880 33,820 16,800
======================================== =========== ============= ===============
Loans and borrowings at 30 September/
31 March 53,716 33,820 29,424
======================================== =========== ============= ===============
*Other movements relate to interest accrued, arrangement fees
incurred and the amortisation of those fees.
The Directors consider that the carrying amount of loans and
borrowings approximates to their fair value. Non-current bank loans
comprise a principal loan value of GBP38,000,000 (2022:
GBP34,100,000, March 2023: GBP17,000,000) less arrangement fees of
GBP120,000 (2022: GBP280,000, March 2023: GBP200,000), which are
amortised over the term of the loan.
During the period, the Group had a revolving credit facility of
GBP60,000,000, including an ancillary carve out of a GBP5,000,000
overdraft, which run to December 2024. The revolving facility bears
interest at a variable rate based on the SONIA. At the reporting
date, interest was charged at a rate of 1.9% above the adjusted
SONIA interest rate benchmark.
The Group also has a notional pool agreement, whereby certain
cash balances within the Group are entitled to be offset, providing
the overall overdrawn balance does not exceed the GBP5,000,000
facility limit. The Company's overdraft balance at the reporting
date is a result of the timing of cash transfers within the Group
and funds being transferred from the Group's central facility.
Since the reporting date, the Group re-financed its banking
facilities and now has a revolving credit facility for an initial
GBP100,000,000, which will run for three years with two extension
options of one year.
11. Pensions
Defined benefit pension plans
On 30 June 2021, the Group acquired Taylor Maxwell Group (2017)
Limited, which operated a defined benefit pension scheme.
The Group commenced a buy-out process to transfer the risk
associated with the scheme to an insurer. As part of this process,
a buy-in contract was incepted on 7 July 2021 to meet the future
benefits payable and reduce the risk of additional funding being
required from the Group. On 1 August 2023, the scheme's liabilities
relating to the policy were fully transferred to the insurance
company, when the policy was converted into individual policies in
the members' names.
Scheme assets relate to cash funds net of residual liabilities
relating to top-up benefit payments, which are due to past members
of the scheme following a High Court ruling on the Lloyds Banking
Group pensions court case. Scheme invested assets are stated at
their current bid price at 30 September 2023. The defined benefit
scheme is expected to completely wound up by 31 March 2024.
The valuations for September 2023 and September 2022 have been
prepared using the same methodology as that included in the Annual
Report and Accounts for the year ended 31 March 2023. Other
principal assumptions, in respect of mortality rates, are
consistent with those set out in that Annual Report and Accounts
for all periods.
12. Related party transactions
Transactions and balances between the Company and its
subsidiaries, which are related parties, have been eliminated on
consolidation and are not disclosed in this note.
Key management personnel
Year ended
31 March
2023
6 months 6 months (Audited)
ended
ended 30 Sept GBP'000
2022
30 Sept GBP'000
2023
GBP'000
====================================== =================== ============ =========== ==============
Key management personnel compensation
Short-term employee benefits 1,766 1,808 6,031
Post-employment benefits 54 40 80
Share-based payment expense 350 200 538
2,170 2,048 6,649
========================================================== ============ =========== ==============
During the interim period, the Group made sales amounting to
GBPnil (2022: GBP21,000 and year to 31 March 2023: GBP31,000) to
members of key management. A GBPnil balance was included within
trade receivables at each the reporting date, in respect of these
sales.
Other related parties
Included within trade and other receivables/payables are the
following amounts due from/to other related parties, at the
reporting date:
Amounts owed Amounts owed
by related parties to related parties
============ =========================== ============ =============================
Year Year ended
ended 31 March
2023
6 months 6 months 31 March 6 months 6 months (Audited)
ended ended 2023 ended ended
30 Sept 30 Sept (Audited) 30 Sept 30 Sept GBP'000
2023 2022 2023 2022
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
====================== ============ =========== ============== ============ ============= ================
Associates - - 6 124 92 184
Joint ventures 4,881 2,668 3,033 - - 88
Other related parties 42 - 200 8 - 27
====================== ============ =========== ============== ============ ============= ================
4,923 2,668 3,239 132 92 299
====================== ============ =========== ============== ============ ============= ================
During the period, the Group made a loan of EUR2,000,000 (2022:
EUR3,050,000 and year to 31 March 2023: EUR3,450,000) to its joint
venture, equating to GBP1,736,000 (2022: GBP2,668,000 and year to
31 March 2023: GBP3,033,000) outstanding at the reporting date. The
loan is repayable by 30 June 2025 and carries interest, payable
monthly, at a rate of 3% above the Bank of England base rate.
Interest of GBP152,000 (2022: GBP36,000 and year to 31 March 2023:
GBP127,000) was charged in the period.
Transactions undertaken between the Group and its related
parties during the year were as follows:
Sales to related Purchases from
parties related parties
============ =========================== ============ =============================
Year Year ended
ended 31 March
2023
6 months 6 months 31 March 6 months 6 months (Audited)
ended ended 2023 ended ended
30 Sept 30 Sept (Audited) 30 Sept 30 Sept GBP'000
2023 2022 2023 2022
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
====================== ============ =========== ============== ============ ============= ================
Associates - - 5 92 239 537
Joint ventures - - - - - 431
Other related parties 249 - 202 - 106 218
====================== ============ =========== ============== ============ ============= ================
249 - 207 92 345 1,186
====================== ============ =========== ============== ============ ============= ================
Other related parties comprise of entities owned by directors
and key management. Sales relate to building materials. Purchases
relate to rent and administrative expenses payable.
Right of use assets in respect of properties leased from other
related parties had a carrying value of GBP2,365,000 (2022:
GBP407,000 and 31 March 2023: GBP2,377,000), while associated lease
liabilities of GBP2,214,000 (2022: GBP434,000 and 31 March 2023:
GBP2,209,000) are included at the period end.
13. Post balance sheet events
On 10 October 2023, the Group completed the acquisition of the
entire share capital and 100% of the voting rights in Group Topek
Holdings Limited, a specialist cladding installation and
remediation contractor.
The acquisition was made in order to expand the Group's cladding
portfolio, to establish a full range of cladding capabilities
including design, fabrication, supply and installation.
The provisional book values of the separable assets acquired and
liabilities assumed on acquisition are estimated as follows:
GBP'000
================================ ==== ========
Property plant and equipment 58
Right of use assets 136
Trade and other receivables 5,050
Cash and cash equivalents 7,915
Trade and other payables (1,676)
Loans and borrowings (351)
Current income tax liabilities (404)
Lease liabilities (136)
Deferred tax (16)
======================================== ========
Total identifiable net assets 10,576
======================================== ========
Satisfied by:
Cash paid 35,140
Contingent consideration 17,700
======================================== ========
Total consideration 52,840
======================================== ========
Cash paid reflects an initial cash payment agreed in respect of
the value attributed to the business, based on a multiple of
Adjusted EBITDA, plus any further amounts paid in respect of excess
working capital, including any surplus cash, based on draft agreed
form completion accounts.
Due to the timing of the acquisition, a detailed assessment of
the fair value of the identifiable net assets, and value of any
uncollectible contractual cash flows, has not been completed at the
date of approving these financial statements. The above
consideration is undiscounted and subject to post completion
adjustments.
It is expected that goodwill will arise on the acquisition which
will primarily comprise the value of expected synergies arising
from the acquisition and the value of the assembled workforce. The
goodwill is not expected to be deductible for tax purposes.
The contingent consideration subject to future performance, with
the amount payable dependent on the acquired business achieving
pre-determined EBITDA targets over the three years following
acquisition. The potential contingent consideration payable ranges
from GBPnil to GBP17,700,000.
Acquisition costs of GBP23,000, in relation to stamp duty and
legal and professional fees, are estimated to be incurred in
connection with this acquisition and will be recognised in profit
or loss. Due to the timing of the acquisition, not all costs have
been invoiced or finalised at the time of approving these financial
statements.
On 10 October 2023, the Group also re-financed its existing
banking facilities, as outlined in note 10.
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END
IR DZMZMMNDGFZZ
(END) Dow Jones Newswires
November 28, 2023 02:00 ET (07:00 GMT)
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