22 February 2024
ME GROUP INTERNATIONAL
PLC
("Me
Group" or "the Group" or "the Company")
Preliminary results for the
12 months ended 31 October 2023
A year of record financial
performance
ME Group International plc (LSE:
MEGP), the instant-service equipment group, announces its unaudited
preliminary results for the 12 months ended 31 October 2023 ("FY
2023" or the "Period").
KEY
FINANCIALS
|
12 months ended
31 October 2023
|
12 months ended
31 October 2022
|
Change
|
Revenue
|
£297.7m
|
£259.8m
|
+14.6%
|
EBITDA1
|
£106.6m
|
£92.2m
|
+15.6%
|
Profit before tax
|
£67.1m
|
£53.4m
|
+25.7%
|
Profit after tax
|
£50.7m
|
£38.8m
|
+30.7%
|
Cash generated from
operations
|
£103.7m
|
£87.9m
|
+18.0%
|
Gross cash
|
£111.1m
|
£136.2m
|
+18.4%
|
Net cash2
|
£33.9m
|
£34.0m
|
+0.3%
|
Earnings per share
(diluted)
|
13.31p
|
10.23p
|
+30.1%
|
Dividends:
|
|
|
|
- Interim Dividend per ordinary
share (declared)
|
2.97p
|
2.60p
|
n/a
|
- Special Dividend per ordinary
share (paid)
|
-
|
7.10p
|
n/a
|
- Final Dividend per ordinary
share (recommended)
|
4.42p
|
3.00p
|
n/a
|
Total dividend per ordinary
share3/4
|
7.39p
|
12.70p
|
n/a
|
1
EBITDA is profit before depreciation,
amortisation, other net gains / (losses) and finance cost and
income.
2 Net cash excludes investments in convertible bonds (£4.7m) and
lease liabilities (£13.3 million). See note 8 for details of net
cash.
3 Interim Dividend paid on 23 November 2023 (£11.2 million).
Recommended Final Dividend will be paid on
10 May 2024, subject to approval at the
AGM
4
The total dividend per
ordinary share of 12.70p in respect of FY 2022 included special
dividends totalling 7.10p per share (£26.8 million).
HIGHLIGHTS
· A year of
record financial performance.
·
Next-generation photobooth rollout underway, modernising and
digitalising photobooth estate
· Market leader
in Japan, following photobooth acquisition
· Continued
expansion of laundry operations
· Creation of
further shareholder value through dividends and share buyback
programme
· Return to the
FTSE 250 Index on the London Stock Exchange
Serge Crasnianski, CEO & Deputy
Chairman, commented:
"We are
pleased to report a year of record financial performance during
which we continued to make good strides in delivering on our
long-term growth strategy. We have reported strong revenue and
profit growth across all of our business areas and geographic
regions, achieved despite the widely reported macroeconomic
challenges. Our laundry operations, a key growth driver for the
Group, performed particularly strongly and our expansion continued
at pace. Demand for photobooth services remains robust and we
continue to develop our relationships with governments and
regulatory bodies for our digital and secure photo ID
services.
"The modernisation and
digitalisation of our business will drive operational efficiencies
and improve the services and experience we offer. Our
next-generation photobooth is being rolled out at pace, bringing a
multi-service offering and seamless user experience, backed by
proprietary software. This is just one of many initiatives we are
driving forward, underpinned by our strategic focus on digital
innovation. We are also working on a range of additional service
features and functionalities that could attract more consumers to
use our instant vending equipment.
"The Board looks ahead to the future
with confidence and, notwithstanding changes in the macro
environment, expects the Group to build on the success of FY 2023
and achieve continued revenue and earnings growth in FY
2024."
PUBLICATION OF ANNUAL REPORT AND ACCOUNTS
ME Group International plc will
publish its annual report and accounts for the financial year
ended
31 October 2023 (the "Annual Report") by 29 February 2024. The
Annual Report shall be available on the Company's website at
www.me-group.com.
The Annual Report will be posted to
those shareholders who have not chosen to receive electronic
communication or communication through the Company's
website.
A copy of the Annual Report will
also be submitted to the National Storage Mechanism and will be
available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism
ENQUIRIES:
ME
Group International plc
|
+44
(0) 1372 453 399
|
Serge Crasnianski, CEO
|
|
Stéphane Gibon, CFO
|
|
|
|
Hudson Sandler
Wendy Baker / Nick Moore
|
+44
(0) 20 7796 4133
me-group@hudsonsandler.com
|
NOTES TO EDITORS
ME Group International plc (LSE: MEGP) operates,
sells and services a wide range of instant-service vending
equipment, primarily aimed at the consumer market.
The Group operates vending units across 18 countries
and its technological innovation is focused on four principal
areas:
·
Photo.ME - Photobooths and integrated biometric
identification solutions
· Wash.ME
- Unattended laundry services and launderettes
·
Print.ME - High-quality digital printing
kiosks
· Feed.ME
- Vending equipment for the food service market
In addition, the Group operates other vending
equipment such as children's rides, amusement machines, and
business service equipment.
Whilst the Group both sells and services this
equipment, the majority of units are owned, operated and maintained
by the Group. The Group pays the site owner a commission based on
turnover, which varies depending on the country, location and the
type of machine.
The Group has built long-term relationships with
major site owners and its equipment is generally sited in prime
locations in areas of high footfall such as supermarkets, shopping
malls (indoors and outdoors), transport hubs, and administration
buildings (City Halls, Police etc.). Equipment is maintained and
serviced by an established network of more than 650 field
engineers.
In August 2022 the Company changed its listed entity
name to ME Group International plc (previously Photo-Me
International plc) to better reflect the Group's diversification
focus and business strategy.
The Company's shares have been listed on the London
Stock Exchange since 1962.
For further information: www.me-group.com
CHAIRMAN'S STATEMENT
2023
Overview
I am pleased to report that the Group delivered a
record financial performance in FY 2023, with strong growth
delivered against the prior year, particularly across the Group's
core Photobooth and Laundry operations. This reflected the positive
trading momentum achieved throughout the year with growth achieved
across all of ME Group's key business areas and key territories,
with activity supported by strong consumer demand for our automated
services.
For the 12 months ended 31 October 2023, the Group
delivered robust revenue growth of 14.6%, EBITDA growth of 15.6%
and a 25.7% increase in profit before tax. In FY 2023, Group EBITDA
also surpassed £100 million for the first time, reaching £106.6
million, with profit before tax increasing by £13.7 million to
£67.1 million, reflecting the Group's focus on delivering growth
profitably across its global vending estate.
Today, ME Group has a dominant market position in
most of the markets in which it operates, with its long-term
customer contracts supporting good predictability and visibility on
its revenue streams. The Group's operations are highly
cash-generative, with these cash flows used to fund growth through
product innovation and expansion, and in turn driving value to our
shareholders through growth and dividends.
Strategic
progress
We have continued to make good progress against our
growth strategy. Our technological innovation expertise is
supporting the diversification of our product portfolio and the
Group's digital transformation, as we modernise our vending estate
and our organisation. This underpins our continued focus on
expanding the number of units in operation and increasing the yield
per unit, while reducing production and operational costs to the
Group. This enables us to capitalise on the Group's operating
leverage.
Our growth strategy is focused on five core
pillars:
1.
Expansion into new geographic territories
2.
Entering new market segments
3.
Ongoing new product and technology innovation
4.
Continued expansion and diversification of services and revenue
growth
5.
Merger & Acquisition
Progress was achieved across these pillars, notably
with the deployment of our next generation photobooth, integrated
with our newly developed proprietary software. We also cemented our
presence in the Japanese photobooth market, positioning the Group
as market leader in the country, following our photobooth
acquisition. Further details on our progress are set out in the
Chief Executive's Report.
We continue to explore a plethora of potential
opportunities that will help us to meet our growth ambitions and we
remain confident in the Group's ability to achieve these and drive
attractive levels of returns for our shareholders.
Entry into the FTSE
250 Index
In June, we were delighted to be informed that the
Group had been included as a constituent of the FTSE
250 Index, following a review by global index provider FTSE
Russell. Our return to the FTSE 250 marked an important corporate
milestone demonstrating the journey that the Group has been on to
expand and diversify its operations through technological
innovation.
The Board &
Executive Team
Post period-end, on 2 November 2023, we announced
that Jean-Marc Janailhac who had been an Executive Director of the
Company since July 2020, would be stepping down from his executive
role and replaced by Christian Autié who was appointed COO. We are
delighted however that Jean-Marc continues to sit on the Board this
time in his original capacity as a Non-executive Director. I would
like to take this opportunity to thank him for his valuable
contribution to the Company as an Executive Director and I am
pleased he will continue to work closely with me and the Board in
his previous role.
The Board of Directors continues to believe that it
has a strong team in place to continue supporting the leadership
team in delivering on the Group's long-term growth strategy.
I would like to thank my Board colleagues, the
executive team, and every employee across the Group for their
continued dedication, commitment, and hard work.
Shareholder returns
and dividend
Share
buyback
As a Group, we are committed to creating shareholder
value wherever we can and as a Board we look to explore
opportunities that reward our shareholders. In August, we announced
the launch of a Share Buyback Programme to run until the Company's
next Annual General Meeting. As at 31 October 2023 the Company held
1,260,534 shares, with an average value of 156p per share, at a
cost of £1,969,000. It is the aim that the Buyback Programme will
reduce the Company's share capital and in turn drive an increase in
the earnings per share and consequently the yield for all
shareholders.
Dividends
Under the Company's current distribution policy, it
will look to pay annual dividends in excess of 55% of its annual
profits after tax, subject to market and capital requirements. This
total will be split between interim dividends (1/3) (generally to
be paid in the month of November) and final dividends (2/3)
(generally to be paid in the month of May).
The Board declared an interim dividend for the six
months ended 30 April 2023 of 2.97 pence per Ordinary share (the
"Interim Dividend"), which amounted to £11.2 million, paid to
shareholders on 23 November 2023 to shareholders on the register on
3 November 2023.
The Board has recommended a final dividend for the
year ended 31 October 2023 of 4.42 pence per Ordinary share ("Final
Dividend") amounting to £16.6 million. Combined with the Interim
Dividend, this brings the total dividend for the year ended 31
October 2023 to 7.39 pence per Ordinary share (£27.9 million).
Subject to approval at the Company's annual general
meeting on 26 April 2024, the Final Dividend will be paid on 23 May
2024 to shareholders listed on the register at the close of
business on 26 April 2024. The ex-dividend date will be 25 April
2024.
Sustainability
We remain committed to strengthening our
sustainability activity to deliver our goals through inventing
eco-responsible local services to support growth by integrating
social, environmental, and economic expectations into our strategy
and operations. Details of our Sustainability approach and KPIs are
available on the Group's website at me-group.com.
Looking
ahead
Laundry is a key part of our growth strategy and we
continue to invest to expand our portfolio and build on new and
existing partnerships, to further extend our convenient laundry
services in high footfall destinations. We are also improving the
user experience, through the launch of our consumer App for our
laundry services, which delivers better marketing insight. In the
year ahead, we plan to install an average of 80-90 Revolution
laundry machine per month, with a particular focus on expansion in
France and the United Kingdom.
The photobooth market remains robust, and even though
it is a mature market, turnover and the number of transactions has
stayed stable from year-to-year. Within the Group, 70% of the
photobooth market is based on the requirement for official photos
(driving licences, passports, ID photos, etc.), unofficial photos
(universities, schools, sports clubs etc.) and, to a lesser extent,
fun products.
The Group does not foresee a drop in demand for
official photos in the short- or medium-term. The Group is securing
this market as much as possible by developing agreements with
administrations and regulatory bodies (ANTS in France, HMPO in the
UK and MY NUMBER in Japan) and by trying to replicate this same
model in other countries and by extending it to all official needs
(passports, identity cards and driving licences). The demand for
official photos is helped by the continual introduction of new
legislation (for example, the compulsory renewal of 'old pink
driving licences' in France and the My Number campaign in
Japan).
At the same time, the Group is working on a range of
additional, more entertaining offers in photobooths that could
attract other consumers.
The Group has proven to be resilient, despite the
ongoing macroeconomic headwinds. It remains highly cash generative,
and our financial position remains strong, driven by good trading
momentum across the business. This supports the Board's confidence
in the Company's ability to make further strategic progress in FY
2024 and beyond.
The Board expects the Group to achieve continued
revenue and earnings growth in the financial year ahead, building
on the success of FY 2023, subject to any major changes to the
macroeconomic environment.
Sir John Lewis
OBE
Non-executive Chairman
22 February 2024
CHIEF EXECUTIVE'S REPORT
BUSINESS REVIEW
We are pleased to report a record financial
performance in FY 2023. Photo.ME and Wash.ME have continued to
drive the overall Group performance as photo ID and laundry
services remain in high demand across our key territories, and the
Group continued to deliver against its long-term growth
strategy.
Our continued focus on technological innovation and
diversification, underpinned by our in-house R&D capabilities,
enables us to meet the needs of end-users internationally. This,
alongside the global footprint of our operations, well positions us
on the international stage as a leading operator in instant service
vending.
Financial
performance
Total revenue increased by 14.6% to £297.7 million
(2022: £259.8 million), with strong growth delivered in each of our
geographic regions.
By geography, our largest region, Continental Europe,
reported revenue growth of 15.4%, due to a continued strong
performance in France. In the UK & Republic of Ireland, revenue
was up 14.8%, and in Asia Pacific operating revenue was up
11.0%.
Each of our principal business areas delivered
operating revenue growth year-on-year compared with the same period
in FY 2022. Our laundry operations performed particularly strongly,
up 32.0%, photobooth operations grew by 11.8%, digital printing by
5.6% and Other Vending Equipment and Feed.ME operating revenue was
up 30.8% on FY 2022.
As a result of the above, EBITDA (excluding
associates) was £106.6 million, an increase of 15.6%, which
delivered an EBITDA margin of 35.8%. Reported profit before tax was
up 25.7% to £67.1 million (2022: £53.4 million), with all regions
reporting growth.
The Group's corporation tax charge for the year was
£16.4 million, resulting in an effective tax rate of 24.4%. Tax
charge for the prior year was £14.6 million, an effective tax rate
of 27.4%.
Capital expenditure was £53.5 million, primarily
related to laundry (£24.7 million), photobooths (£8.9 million),
kiosks (£3.1 million), plant, machinery and vehicles (£6.3 million)
and the acquisition of a photobooth business in Japan (£4.8
million).
The Group remains well capitalised and in a strong
financial position, with net cash of approximately £33.9
million.
During the year ended 31 October 2023, the Group
repurchased 1,260,534 of its ordinary shares and also paid
dividends totalling £23.4 million (comprising the interim dividend
for 2022 of £9.8 million, the final dividend for 2022 of £11.3
million and a special dividend for 2022 of £2.3 million). In
November 2023, the Company paid its announced interim dividend for
2023, totalling £11.2 million.
Further details of the Group's performance by
business area and geographic region are set out below.
Overview of principal
business areas
Below is an overview of the Group's four principal
business areas: photobooth (Photo.ME), digital printing (Print.ME),
laundry (Wash.ME) and food (Feed.ME). In addition, the Group
operates Other Vending Equipment.
Photo.ME -
Photobooths and secure integrated
biometric photo ID solutions
|
12 months ended
31 October 2023
|
12 months
ended
31 October 2022
|
Number of units in
operation
|
30,762
|
27,625
|
Percentage of total group vending
estate (number of units)
|
64.7%
|
62.9%
|
Revenue
|
£172.5m
|
£154.3m
|
Capex
|
£8.9m
|
£3.0m
|
EBITDA
|
£61.8m
|
£54.2m
|
Our photobooth operations, our largest business area
by number of units, revenue and EBITDA contribution, continued to
perform strongly throughout the financial year.
Revenue increased by 11.8% to £172.5 million (2022:
£154.3 million). This performance was supported by continued demand
of official photo ID, the continued expansion of the estate both
organically and through acquisition, and annualised benefits of FY
2022 price increases implemented in certain locations, particularly
France, Germany and Austria. The average revenue per machine
(excluding VAT) increased to £5,908 per year (2022: £5,586 per
year).
Subsequently, EBITDA was up 14.0% at £61.8 million
and represented 58.0% of total Group EBITDA. EBITDA was 35.8% of
photobooth revenue during the Period.
Capex increased from £3 million to £8.9 million,
reflecting investment in the rollout of next generation
photobooths, with 547 installed in France and Germany in FY 2023.
While deployment of the machines was slower than initially
expected, due to supplier delays, these short-term challenges have
been resolved. At the year-end we were installing approximately 180
next-generation units per month. In addition, a programme to
upgrade our existing photobooth estate with new proprietary
software and functionalities is underway.
At 31 October 2023, the number of photobooths in
operation was 30,762, an 11.4% increase on the prior year (2022:
27,625), reflecting the ongoing expansion programme as we continue
to rollout units in existing and new territories. This represents
64.7% of the Group's total vending units.
Growth strategy and
progress
We believe that there are a number of long-term
growth drivers in place which underpin our continued expansion.
Demand for photo ID for the use in official documentation,
including driving licences and passports, Government requirements
for digitalised photo ID and security to combat fraud, and
consumers increasingly requesting multi-functional instant services
are all factors underpinning the continued growth of Photo.ME.
There continues to be a compelling case for the Group to grow its
photobooth business and benefit from industry trends and widespread
consumer demand.
Our next-generation photobooth was developed by the
Group's in-house R&D team and offers range of new
functionalities, focused around enhancing the user experience.
These new features include 'Mobile to Print', user personalisation
services using AI and photo filters. The Group expects other new
functions will be added over time. The Group aims to install 3,000
next-generation machines in FY 2024, and approximately 8,000
next-generation photobooths by the end of FY 2025.
At the same time, the Group is modernising the
hardware of its existing photobooth estate and intends to install
its new proprietary software at a rate of around 200 machines per
month. This proprietary software enables the Group's engineers to
quickly and cost-effectively upgrade each machine, remotely rather
than needing to physically visit the machines.
In October 2023, the Company's Japanese subsidiary,
ME Group Japan K.K., acquired the automated-photobooth business
owned and operated by two subsidiaries of FUJIFILM Corporation
(formerly FUJIFILM Co., Ltd) in Japan for an initial consideration
of £4.8 million (Japanese Yen 873 million), funded by a local loan
facility. This added 3,548 traditional photobooths, located in
high-footfall locations such as travel hubs and shopping centres
throughout Japan, delivering official photo ID for consumers,
including for the government's social security and taxation photo
ID card scheme. The acquired photobooths were fully integrated into
the Group's operations in Japan in October 2023 and will benefit
from operational synergies under the Group's ownership. Further
details of the Japan acquisition are detailed in the Review of
Performance by Geography section.
Following the Group's entry into the Australian
market through a small acquisition in 2021, the Group is trialling
11 photobooths in across Sydney and Melbourne, as part of our
ongoing diversification strategy as we build our presence in both
new and existing markets. Whilst this is at an early stage in terms
of building out the market, the Group is exploring how best to
drive forward expansion and remains excited by the prospects for
the Australian market.
The Board continues to believe that there are
longer-term opportunities in the photo ID market across both
existing and new geographic markets.
Planned photobooth investment in FY 2024 is between
£15 million and £20 million, with a target return on investment in
approximately 18 months.
Wash.ME -
Unattended Revolution laundry
services and laundrettes
|
12 months ended
31 October 2023
|
12 months
ended
31 October 2022
|
Total Laundry units deployed (owned,
sold and acquisitions)
|
6,870
|
5,924
|
Total revenue from Laundry
operations
|
£81.6m
|
£61.8m
|
Total Laundry EBITDA
|
£39.5m
|
£29.1m
|
Revolution
|
|
|
- Number of Revolutions in
operation
|
5,533
|
4,754
|
- Percentage of total group
vending estate (number of units)
|
11.6%
|
10.8%
|
- Total revenue from
Revolutions
|
£76.1m
|
£56.7m
|
- Revolution capex
|
£24.7m
|
£20.2m
|
Total revenue from our laundry operations grew by
32.0% to £81.6 million as we continued to expand our estate of
Revolution laundry units, generating a higher level of turnover
from this business. At 31 October 2023, the total number of laundry
units deployed (owned, sold) was up 16.0% to 6,870. Total laundry
EBITDA increase by 35.7% to £39.5 million.
Growth of Revolution
laundry operations
The total number of Revolution units in operation
grew 16.4% to 5,533, as the Group continued to roll out new
machines at a rate of 65 per month, with more than 780 machines
installed during the year. Revolution laundry machines accounted
for 11.6% of the Group's total estate by number of machines (2022:
10.8%).
Revenue increased by 34.2% to £76.1 million, which
represented 25.6% of Group revenue, driven by a combination of
higher demand and more machines in operation. The average revenue
per machine (excluding VAT) was £14,793 per year (2022: £12,816 per
year).
EBITDA was £39.5 million and contributed 37.1% of
Group EBITDA. EBITDA from Revolution was 48.4% of revenue.
Wash.ME remains our fastest growing and highest
margin business area and we continued to invest to deliver our
expansion plans. As a result, Revolution capex increased to £24.7
million (2022: £20.2 million) reflecting the continued rollout of
units across our core territories. Furthermore, the Group has
entered a period of machine refurbishment and maintenance, the
first since laundry operations were launched in 2012.
Growth strategy and
progress
A key part of our growth strategy for the laundry
business is expanding operations through new and existing partners
in target territories, as a means of meeting consumer demand by
offering convenient, competitively priced and high-capacity laundry
services. We announced a new strategic partnership with leading
supermarket chain Co-op, in the UK, to position Revolution units at
sites in selected parts of the country. The partnership will allow
us to position laundry services at an increasing number of high
footfall locations across the UK, offering convenient laundry
services to consumers at those sites. We see this as a mutually
beneficial relationship where we build a destination for consumers
looking for high-capacity laundry facilities while shopping.
As well as entering new market segments through
strategic partnerships, the Group continues to deliver innovative
solutions to drive forward the service offering available under
Wash.ME. Alternative machine formats continue to prove popular with
different types of users. We see good potential for our 'Flex'
units, a compact format that can fit into smaller spaces, and
believe there to be a long-term opportunity to address the domestic
market and at-home laundry needs. Whilst this is at an early stage,
we will continue to monitor the opportunity and update in due
course.
In June, the Group began rolling out a new consumer
App aimed at laundry services as a means of improving the user
experience as well as providing better marketing insights on the
Group's end-consumers. It remains a focus for us to improve the App
and work towards rolling this out more widely across our
operations.
The Group plans to install an average of 80-90
laundry machines per month in FY 2024. In addition, photovoltaic
solar panels on being installed on Revolution laundry machines
rollout across key territories, including France and the United
Kingdom.
Planned laundry investment in FY 2024 will be £22.0
million to £30.0 million, with a with a target return on investment
in approximately 18 months.
Print.ME -
High-quality digital printing
services
|
12 months ended
31 October 2023
|
12 months
ended
31 October 2022
|
Number of units in
operation
|
4,734
|
4,785
|
Percentage of total group vending
estate (number of units)
|
10.0%
|
10.9%
|
Revenue
|
£11.3m
|
£10.7m
|
Capex
|
£3.1m
|
£1.3m
|
EBITDA
|
£4.2m
|
£3.6m
|
Our estate of digital printing kiosks offers a wide
range of competitively priced print formats and personalised
products. Our key markets are France, where most machines are
situated, the UK and Switzerland.
At 31 October 2023 the Group had 4,734 kiosks in
operation, a reduction of 1.1% compared with the prior year. These
accounted for 10.0% of the total number of vending units in
operation.
Revenue increased to £11.3 million from £10.7 million
in the prior year, reflecting increased demand from new digital
kiosks, replacing 413 old machines. Revenue represented 4.1%
of Group revenue.
The average revenue per machine (excluding VAT) was
£2,374 per year (2022: £2,279).
EBITDA was £4.2 million which represented 3.9% of
Group EBITDA. EBITDA was 37.2% of Print.ME revenue in the
period.
Capex was £3.1 million, a significant increase on the
prior year reflecting an investment programme to replace some
existing machines, and deployment of 500 new kiosks.
Growth strategy and
progress
In recent years, we have focused more investment
towards the Print.ME business as demand for high-quality digital
printing services remains robust. This, paired with the increasing
use of smartphones and demand for social media sharing, presents a
long-term opportunity for our digital printing services. The Group
is forecasting c.£3.0 million of capex in FY 2024. As part of the
growth strategy for this business area, the Group continues to
explore opportunities to extend the services offered through its
wider vending estate including digital printing services. Our
next-generation photobooths, currently being deployed, offers this
functionality as part of the multi-service offering.
Feed.ME -
Vending equipment for the food
service market
Feed.ME activities are focused on two areas,
self-service fresh fruit juice equipment market and pizza
vending machines aimed at the B2B retail and hospitality markets.
The Group currently has operations in Belgium, France, Japan and
Switzerland.
The Feed.ME business model is primarily based on the
sale of vending equipment. Customers frequently, but under no
obligation, sell the vending equipment back to the Group at a later
date. The equipment is then refurbished and re-sold, generating
repeat revenue for the Group.
The Group also sells maintenance agreements, under
which it services vending equipment for an agreed period of
time.
Technical adjustments to our pizza vending machine
led the Group to move manufacture of this machine in-house during
the commercialisation phase. This enabled us to increase production
to 30 machines per month and ensures that our R&D team are on
hand to support and have oversight of quality control and cost
efficiencies.
On a smaller scale, the Group operates fruit juice
machines in Japan. During the year we reinstated our B2B vending
operations aimed at end markets such as the hospitality sector. At
31 October 2023, the Group had 441 freshly squeezed-orange-juice
vending machines in operation, which includes fulfilment of the
oranges for the machines.
Revenue from the sale of equipment, consumables and
services was £8.9 million. Combined with other revenue (£4.6
million), the total revenue of Feed.ME was £13.5 million (2022:
£12.5 million). This business area contributed 4.5% of total Group
revenue.
A review following the technical issues experienced
with the pizza machines, which have slowed progress in this
business area, has resulted in an impairment of goodwill and
intangibles of £2.6 million related to the acquisition of the pizza
vending machine manufacturer (Resto'Clock) in 2021. The group will
continue to sell pizza vending equipment, with the target of
relaunching this division and improving profitability.
EBITDA was £3.8 million and contributed 3.6 % of
Group EBITDA.
Growth strategy and
progress
The food service sector remains an attractive
proposition for the Group. We remain focused on growing our fruit
juice vending machine operations in Japan and we plan to increase
the production of our pizza vending machines, with the aim of
selling more than 15 per month.
The Group's aim is to become the food vending
equipment market leader in Europe.
Other vending equipment
At 31 October 2023,
the Group operated 6,055 (2022: 6,483) other vending units in
addition to its four principal business areas. These included 2,356
children's rides (Amuse.ME), 3,374 photocopiers (Copy.ME) and 325
other miscellaneous machines.
These machines are
typically located in high-footfall locations alongside the Group's
principal activities, thereby benefiting from existing site owner
relationships and operating synergies. Amuse.ME units are mostly
situated in the United Kingdom and the Netherlands. Copy.ME units
are mostly situated in France. The Group will continue to operate
other vending units where profitable.
Other vending
equipment accounted for 13.6% of the Group's total vending estate
by number of units, down 1.7% compared with the previous year and
represented 4.0% of the total Group revenue.
Growth Strategy In
Action
Our growth strategy is centred on five key pillars to
support the development of the Group's principal business areas:
photobooths, laundry services, digital printing and food vending
equipment.
We are pleased to have made solid progress against
our five-year plan to 2027, driving forward a number of initiatives
as part of this mid-term roadmap.
Below we are pleased to outline progress in FY 2023
on delivery of our growth strategy against each of the five key
pillars aimed at supporting the development of the Group's
principal business areas.
1.
Expansion into new
geographic territories
Continue to build the Group's international presence
in recently entered markets of Italy, Finland and Australia.
Progress in FY
2023
The Group has continued to drive expansion of
operations in new geographic territories. In Australia, we have
around 11 photobooths installed across Sydney and Melbourne, our
pilot cities. Whilst expansion in Australia remains at an early
test phase, we continue to look at how we can best grow our
operations and believe there is a significant opportunity in the
region.
2.
Entering new market
segments
Through securing new partnerships with businesses
such as supermarkets and smaller retailers.
Progress in FY
2023
Our partners and site owners remain a valuable route
for us to grow our business by entering new market segments. We
launched new partnerships with Co-op and Morrisons, two major
supermarket chains in the UK, enabling us to offer conveniently
accessible laundry services to consumers at those sites.
3.
Ongoing new product and
technology innovation
To meet the vending needs of
consumers through state-of-the-art user experience, backed by the
best technology, and an omnichannel approach.
Progress in FY
2023
The Group is well underway with the deployment of
modernisation software across its photobooth estate. This new
proprietary software provides us with the ability to deploy new
functionality and services, as well as update interfaces, remotely.
Further details are disclosed further down in this report.
4.
Continued expansion and
diversification of services
Revenue growth through a
multi-service instant-service offering and integration of
centralised operating systems.
Progress in FY 2023
The Group has rolled out a number of next generation
photobooths, predominantly across France, as part of our strategy
to introduce a multi-service offering across its operations.
Machines are being installed at a rate of around 180 per month with
ambitions to increase to 250 new installations per month during
2024.
5.
Merger and acquisition
strategy
Focused on enabling our growth
strategy through bolt-on acquisitions, which meet the Group's
return-on-investment criteria, to extend our geographic footprint,
consolidate our market position and increase the breadth of our
services available through our machine network.
Progress in FY 2023
In October our Japanese subsidiary,
ME Group Japan K.K., completed the acquisition of the
automated-photobooth business from FUJIFILM Corporation. The
acquired photobooths have been fully integrated into the Group's
operations, benefitting from wider operational synergies, and
consequently the Group is positioned as a market leader for
photobooths across Japan.
Innovation and
Diversification
Continuous technological innovation and
diversification of operations are central to the Group's growth
strategy, driven by our dedicated 50-strong R&D team, most of
whom work at our primary R&D facility in France.
We are continually looking at ways to create or
evolve service offerings through our vending estate that meet the
changing needs of consumers both across our existing and new
markets. Our in-house team develops and tests new technologies,
products, and functionality before these enter the
commercialisation phase and are deployed within our vending
estate.
In recent years, innovation has been primarily
focused on key initiatives to digitally transform the Group,
improve operational efficiencies and enhance the end-user
experience.
1. A
state-of-the-art user experience, backed by the
best technology
· Design
of new, intuitive, and modern user interfaces across product
categories
· Integration of digital payment systems
· Up-to-date functionalities, through an aggregate of the best
of external technology providers
2. An omnichannel
approach, leveraging digital functionalities to enhance user
experience of our brands and explore new business
models
· Use of
a powerful CRM which offers a customised experience to end
users
· Launch
of applications that connect to our machines to offer
mobile-to-machine features
· Remote management of our self-service vending equipment
through a cloud-based infrastructure
· Multi-service
functionality for the next-generation machines. Centralised
operating system offering operational efficiencies and a seamless,
connected user experience for the consumer
This digital transformation through
the modernisation and modularisation of our vending estate will
enable the Group to be more agile and operationally efficient. It
will support the swift deployment of software upgrades and new
services across our machine estate, whilst also enabling us to
enhance consumer engagement through targeted marketing
campaigns.
Innovation in
action
New proprietary
software
Our new proprietary software developed by the
in-house R&D team is at the centre of the Group's digital
transformation, which is initially being rolled out for
photobooths. This software is fitted as standard on all
next-generation photobooths being installed and, over the coming
years, the Group aims to retrofit this software across its existing
photobooth estate.
At the touch of a button, the Group will be able to
remotely run a software upgrade for each photobooth, giving it the
ability to deploy new functionality and services quickly and
cost-effectively.. It will allow the Group to remotely update the
consumer interface and enhance the end-user experience.
Previously, software updates were implemented
manually by an engineer on site.
Enhanced user
experience
Our next-generation photobooth offers a redesigned
user experience (UI and UX) to support greater digital
functionality. This includes visual enhancements to the user
interface as well as a more efficient consumer interaction, such as
a reduction in the number of clicks required during user
interaction. Additionally, users will be able to provide feedback
on their experience via a QR code on each machine.
Ongoing
digitalisation driving operational efficiencies
We are currently working to develop several new
initiatives to centralise back-office processes aimed at driving
operational efficiencies. These include:
· A new application for
field engineers offering centralised route planning
· Real-time telematics to
monitor the operational performance of each machine and reduce
downtime
· A new CRM tools to
support the Group's sales team function, due to go live by the end
of 2024
· Applications to enhance
engagement with end user and support marketing campaigns, with new
store locator launched in June 2024
· Launch
of end-user App in the first half of 2024
REVIEW OF PERFORMANCE BY GEOGRAPHY
Commentary on the Group's financial
performance is set out below, in line with the segments as operated
by the Board and the management of the Group. These segmental
breakdowns are consistent with the information prepared to support
the Board's decision-making. Some commentary below relates to the
performance of specific products in the relevant
geographies.
Vending units in
operations
|
At October
2023
|
At
October 2022
|
|
Number
|
% of total
|
Number
|
% of
total
|
|
of units
|
estate
|
of
units
|
estate
|
Continental Europe
|
26,232
|
55.1%
|
25,331
|
57.7%
|
UK & Republic of
Ireland
|
6,297
|
13.2%
|
6,858
|
15.6%
|
Asia Pacific
|
15,037
|
31.6%
|
11,721
|
26.7%
|
Total
|
47,566
|
100%
|
43,910
|
100%
|
The total number of vending units in operation at 31
October 2023 increased by 8.3% to 47,566 (2022: 43,910), mainly due
to the acquisition of a photobooth business in Japan, which was
completed in September 2023.
Key
financials
The Group reports its financial
performance based on three geographic regions of operation: (i)
Continental Europe; (ii) the UK & Republic of Ireland; and
(iii) Asia Pacific.
Revenue by geographic
region
|
12 months ended
31 October 2023
|
12 months
ended
31 October 2022
|
|
|
|
Continental Europe
|
£205.2m
|
£177.8m
|
UK & Republic of
Ireland
|
£48.2m
|
£42.0m
|
Asia Pacific
|
£44.3m
|
£39.9m
|
Total
|
£297.7m
|
£259.7m
|
Operating profit by geographic
region
|
12 months ended
31 October 2023
|
12 months
ended
31 October 2022
|
|
|
|
Continental Europe
|
£62.6m
|
£51.3m
|
UK & Republic of
Ireland
|
£12.4m
|
£11.6m
|
Asia Pacific
|
£4.3m
|
£2.0m
|
Corporate costs
|
£(11.8)m
|
£(8.1)m
|
Total
|
£67.5m
|
£56.8m
|
Total revenue increased by 14.6% to £297.7 million,
reflecting the strong year-on-year performance in all three
geographic areas from higher consumer demand for the Group's
instant-service machines and, to a lesser extent, the year-on-year
benefit of end consumer pricing rises implemented during 2022.
Continental Europe
Continental Europe is the Group's
largest region by both number of machines and contribution to Group
revenue.
Revenue increased 15.4% to £205.2
million (2022: £177.8 million), reflecting a strong performance and
revenue growth across all business areas, notably laundry and
photobooth operations.
Total operating revenue increased by
18.7% year-on-year, primarily driven by Wash.ME, which grew by
28.2% and Photo.ME, which grew by 16.1%. Wash.ME delivered
consistent quarter-on-quarter growth reflecting continued expansion
of operations, with a further 779 laundry units deployed, of which
491 were installed in France. Photobooth operations benefited from
higher consumer demand and the rollout of 547 next-generation
photobooths, alongside consumer price increases implemented across
France (from €6 to €8) and Germany (€8 to €10) during FY 2022. The
Group's other business areas saw strongest year-on-year revenue
growth in Q1 2023 and Q2 2023, which reflects the recovery of
operations in FY 2023 compared with FY 2022 which was still
impacted by the pandemic.
Operating profit grew significantly
to £62.6 million, an increase of 22.0%.
At 31 October 2023, 26,232 units
were in operation in Continental Europe which represented 55.1% of
the Group's total estate. Continental Europe contributed 68.9% of
total Group revenue.
UK & Republic of
Ireland
Revenue grew by 14.8% to £48.2
million, reflecting further expansion in the number of laundry
units and demand for laundry services, with Wash.ME operating
revenue up 45.7%. Photo.ME operating revenue was up 2.2%, and Other
Vending and Feed.ME operations were up 5.8%.
In the UK and Republic of Ireland,
the Group has strategic relationships in retail sectors, leading
shopping centres, supermarkets and forecourts. We have over 3,000
photobooths and 1,300 laundry units sited across this region with
key partners including Tesco, Morrisions, Co-op, Musgraves, BWG,
Circle K and Applegreen. The Group remains focused on growing its
vending estate within these key accounts, which will provide it
with the opportunity to continue building market share in the UK
& Republic of Ireland.
Operating profit grew by 6.9% to
£12.4 million (2022: £11.6 million).
As at 31 October 2023, there were
6,297 units in operation in the UK & Republic of Ireland, a
decrease of 8.2%, due to the loss of two key accounts in 2023. This
segment represented 13.2% of the Group's total vending
estate.
Asia Pacific
Revenue increased by 11.0% to £44.3
million, driven by a 5.4% increase in photobooth operating revenue,
and a 53.5% in revenue from Other Vending and Feed.ME operations
which mainly related to the successful expansion of freshly
squeezed orange juice vending operations in Japan. Asia Pacific
continues to be the only market in which the Group operates fresh
fruit juice vending machines, with 441 orange juice machines
installed by 31 October 2023.
Operating profit in the region more
than doubled to £4.3 million (2022: £2.0 million).
As set out above, the Group acquired
3,548 photobooths in Japan at the end of the financial year for
£4.8 million. As a consequence, the Group became the market-leading
photobooth operator in the Japanese market. To date, this
acquisition has performed in line with expectations and is expected
to increase Asia Pacific revenue by 20% to 30% and to add
approximately £2.2 million in profit in FY 2024.
As at 31 October 2023, there were
15,037 units in operation in Asia Pacific, which represented 31.6%
of the Group's total vending estate. The region contributed 14.9%
of total Group revenue.
Serge
Crasnianski
Chief Executive Officer & Deputy
Chairman
22 February 2024
Key performance Indicators
(KPIs)
The Group measures its performance
using different types of indicators. The main objective of these
KPIs is to monitor the Group's cash generation, long-term
profitability, preservation of the value of its assets, and of
returns to shareholders.
Description
|
Relevance
|
Performance
|
|
|
|
12 months ended
31 October
|
12 months
ended
31 October
|
|
|
|
2023
|
2022
|
Total Group revenue at actual rate of
exchange
|
|
|
£297.7m
|
£259.8m
|
Group Profit before tax
|
|
|
£67.1m
|
£53.4m
|
Increase in number of
photobooths
|
|
|
3,137
|
(242)
|
Increase in number of Laundry units
(operated)
|
The increase in number of Revolutions
is a constant priority and a main driver for growth
|
779
|
660
|
PRINCIPAL RISKS
As with any
business, the Group faces risks and uncertainties that could impact
the achievement of the Group's strategy.
These risks are accepted as inherent
to the Group's business. The Board recognises that the nature and
scope of these risks can change; it therefore regularly reviews the
risks faced by the Group as well as the systems and processes to
mitigate them.
The table below sets out what the
Board believes to be the principal risks and uncertainties, their
impact, and actions taken to mitigate them.
Economic
Nature of risk
|
Description and
impact
|
Mitigation
|
Global economic
conditions
|
Economic growth has a major
influence on consumer spending.
A sustained period of economic
recession and a period of high inflation could lead to a decrease
in consumer expenditure in discretionary areas.
|
The Group focuses on maintaining the
characteristics and affordability of its needs-driven
products.
Like most businesses around the
world, the Group has had to face a significant increase in supply
chain and raw material costs, however, its strong position in the
markets in which it operates gives the Group significant pricing
power.
The Group has no exposure to the
invasion of Ukraine by Russia and other conflict areas.
|
Volatility of foreign exchange
rates
|
The majority of the Group's revenue
and profit is generated outside the UK, and the Group's financial
results could be adversely impacted by an increase in the value of
sterling relative to those currencies. Current and imminent global
events (including upcoming elections in both the UK the US) could
well cause currency volatility.
|
The Group hedges its exposure to
currency fluctuations on transactions, as relevant. However, by its
nature, in the Board's opinion, it is very difficult to hedge
against currency fluctuations arising from translation in
consolidation in a cost-effective manner.
|
Regulatory
Nature of risk
|
Description and
impact
|
Mitigation
|
Centralisation of the production of
ID photos
|
In many European countries where the
Group operates, if governments were to implement centralised image
capture, for biometric passport and other applications, or widen
the acceptance of self-made or home-made photographs for official
document applications, the Group's revenues and profits could be
affected.
|
The Group has developed new systems
that respond to this situation, leveraging 3D technology in ID
security standards, and securely linking our booths to the
administration repositories. Solutions are in place in France,
Ireland, Germany, Switzerland and the UK.
Furthermore, the Group also ensures
that its ID products remain affordable and of
a high-quality.
|
|
|
|
Strategic
Nature of risk
|
Description and
impact
|
Mitigation
|
Identification of new business
opportunities
|
The failure to identify new business
areas may impact the ability of the Group to grow in the
long-term.
|
Management teams constantly review
demand in existing markets and potential new opportunities. The
Group continues to invest in research in new products and
technologies. Furthermore, the Group also ensures that its ID
products remain affordable and of a high-quality.
|
Inability to deliver anticipated
benefits from the launch of new products
|
The realisation of long-term
anticipated benefits depends mainly on the continued growth of the
laundry and food businesses and the successful development of
integrated secure ID solutions. Failure in this regard could lead
to a lack of competitiveness.
|
The Group regularly monitors the
performance of its entire estate of machines. New
technology-enabled secure ID solutions are heavily trialled before
launch and the performance of operating machines is continually
monitored.
|
Market
Nature of risk
|
Description and
impact
|
Mitigation
|
Commercial relationships
|
The Group has well-established,
long-term relationships with a number of site-owners. The
deterioration in the relationship with, or ultimately the loss of,
a key account would have an adverse, albeit contained, impact on
the Group's results, bearing in mind that the Group's turnover is
spread over a large client base and none of the accounts represent
more than 2% of Group turnover.
To maintain its performance, the
Group needs to have the ability to continue trading in good
conditions in France and the UK, taking into account the situation
in these two countries.
|
The Group's major key relationships
are supported by medium-term contracts. The Group actively manages
its site-owner relationships at all levels to ensure a high quality
of service.
The Group continues to monitor the
situation in both the French and the UK markets.
|
Operational
Nature of risk
|
Description and
impact
|
Mitigation
|
Reliance on foreign
manufacturers
|
The Group sources most of its
products from outside the UK. Consequently, the Group is subject to
risks associated with international trade.
|
Extensive research is conducted into
quality and ethics before the Group procures products from any new
country or supplier. The Group also maintains very close
relationships with both its suppliers and shippers to ensure that
risks of disruption to production and supply are managed
appropriately.
|
Reputation
|
The Group's brands are key assets of
the business. Failure to protect the Group's reputation and brands
could lead to a loss of trust and confidence. This could result in
a decline in our customer base.
|
The protection of the Group's brands
in its core markets is sustained with certain unique features. The
appearance of the machine is subject to high maintenance standards.
Furthermore, the reputational risk is diluted as the Group also
operates under a range of brands.
|
Product and service
quality
|
The Board recognises that the
quality and safety of both its products and services are of
critical importance and that any major failure could affect
consumer confidence and the Group's competitiveness.
|
The Group continues to invest in its
existing estate, to ensure that it remains contemporary, and in
constant product innovation to meet customer needs.
The Group also has a programme in
place to regularly train its technicians.
|
Technological
Nature of risk
|
Description and
impact
|
Mitigation
|
Failure to keep up with advances in
technology
|
The Group operates in fields
where upgrades to new technologies are critical. Failure to
exceed or keep in step could result in a lack of ability to
compete.
|
The Group mitigates this risk by
continually focusing on R&D.
|
Cyber risk: Third party attack on
secure ID data transfer feeds
|
The Group operates an increasing
number of photobooths capturing ID data and transferring these
data directly to government databases. The rising threat of
cybercrime could lead to business disruption as well as to data
breaches.
|
The Group undertakes an ongoing
assessment of the risks and ensures that the infrastructure
meets the security requirements.
|
Environmental
Nature of risk
|
Description and
impact
|
Mitigation
|
Increased potential legislation and
the rising cost of waste disposal. Energy consumption, water
scarcity, and rising car fuel prices (for employees, suppliers,
transportation and final consumers) and raising awareness of the
climate crisis amongst consumers
|
The rising costs associated with
compliance with such increased demands could impact on overall
profitability.
|
Reducing
the amount of waste produced; and the recovery, refurbishment and
resale of electrical equipment such as children's rides which
promote the principle embodied in recent legislation of reuse
before recycling.
|
GROUP FINANCIAL STATEMENTS
Group Statement of Comprehensive
Income
For
the 12 months ending 31 October 2023
|
|
12 months ended
31 October
|
|
12 months
ended
31 October
|
|
|
2023
|
|
2022
|
|
Notes
|
£ '000
|
|
£
'000
|
Revenue
|
3
|
297,662
|
|
259,780
|
Cost of Sales
|
|
(195,017)
|
|
(178,377)
|
Gross Profit
|
|
102,645
|
|
81,403
|
Other Operating
Income
|
|
194
|
|
7,916
|
Administrative
Expenses
|
|
(35,351)
|
|
(32,638)
|
Share of Post-Tax Profits from
Associates
|
|
14
|
|
-
|
Operating Profit
|
|
67,502
|
|
56,681
|
Other net gains /
(losses)
|
|
701
|
|
(1,176)
|
Finance Income
|
|
1,401
|
|
-
|
Finance Cost
|
|
(2,537)
|
|
(2,151)
|
Profit before Tax
|
|
67,067
|
|
53,354
|
Total Tax
Charge
|
4
|
(16,401)
|
|
(14,561)
|
Profit for the year
|
|
50,666
|
|
38,793
|
|
|
|
|
|
Other Comprehensive Income
|
|
|
|
|
Items that are or may
subsequently be classified to Profit and Loss:
|
|
|
|
|
Exchange Differences Arising on
Translation of Foreign Operations
|
|
454
|
|
829
|
Total Items that are or may subsequently be classified
to profit and loss
|
|
454
|
|
829
|
Items that will not be
classified to profit and loss:
|
|
|
|
|
Remeasurement (losses) / gains
in defined benefit obligations and other post-employment benefit
obligations
|
|
(220)
|
|
1,151
|
Deferred tax on remeasurement
losses / (gains)
|
|
48
|
|
(248)
|
Total Items that will not be
classified to Profit and Loss
|
|
(172)
|
|
903
|
Other comprehensive income for
the year net of tax
|
|
282
|
|
1,732
|
Total Comprehensive income for
the ear
|
|
50,948
|
|
40,525
|
|
|
|
|
|
Profit for the Year Attributable
to:
|
|
|
|
|
Owners of the
Parent
|
|
50,666
|
|
38,793
|
Non-controlling
interests
|
|
-
|
|
-
|
|
|
50,666
|
|
38,793
|
|
|
|
|
|
Total comprehensive income
attributable to:
|
|
|
|
|
Owners of the
Parent
|
|
50,948
|
|
40,525
|
Non-controlling
interests
|
|
-
|
|
-
|
|
|
50,948
|
|
40,525
|
|
|
|
|
|
Earnings per Share
|
|
|
|
|
Basic Earnings per
Share
|
6
|
13.40p
|
|
10.26p
|
Diluted Earnings per
Share
|
6
|
13.31p
|
|
10.23p
|
All results derive from continuing
operations.
The accompanying notes form an
integral part of these condensed consolidated financial
statements.
Group Statement of
Financial Position
As at 31 October
2023
|
|
31 October
|
31
October
|
|
|
2023
|
2022
|
|
|
|
(restated)
|
|
Notes
|
£'000
|
£'000
|
Assets
|
|
|
|
Goodwill
|
7
|
18,888
|
16,320
|
Other intangible
assets
|
7
|
13,054
|
16,435
|
Property, plant &
equipment
|
7
|
118,124
|
101,090
|
Investment
property
|
7
|
-
|
592
|
Investment in
associates
|
|
35
|
21
|
Financial instruments held at
FVTPL
|
|
5,886
|
5,239
|
Other
receivables
|
|
3,005
|
1,973
|
Non-Current Assets
|
|
158,992
|
141,670
|
Inventories
|
|
32,501
|
25,491
|
Trade and other
receivables
|
|
21,391
|
20,050
|
Current tax
|
|
7,962
|
2,990
|
Cash and cash
equivalents
|
8
|
111,091
|
136,185
|
Current assets
|
|
172,945
|
184,716
|
Non-Current Assets Classified as Held for
Sale
|
|
585
|
-
|
Total assets
|
|
332,522
|
326,386
|
|
|
|
|
Equity
|
|
|
|
Share capital
|
|
1,891
|
1,889
|
Share premium
|
|
11,083
|
10,627
|
Treasury
shares
|
|
(1,969)
|
-
|
Translation and other
reserves
|
|
11,958
|
11,159
|
Retained
earnings
|
|
136,025
|
108,974
|
Total Shareholders' funds
|
|
158,988
|
132,649
|
|
|
|
|
Liabilities
|
|
|
|
Financial
liabilities
|
8
|
58,447
|
82,429
|
Post-employment benefit
obligations
|
|
4,063
|
3,850
|
Deferred tax
liabilities
|
|
8,566
|
7,778
|
Non-current liabilities
|
|
71,076
|
94,057
|
Financial
liabilities
|
8
|
32,063
|
35,657
|
Provisions
|
|
1,884
|
1,567
|
Current tax
|
|
10,590
|
10,208
|
Trade and other
payables
|
|
57,921
|
52,248
|
Current liabilities
|
|
102,458
|
99,680
|
Total equity and liabilities
|
|
332,522
|
326,386
|
The accompanying notes form an
integral part of these condensed consolidated financial
statements.
Group Statement of Cash
Flows
For the 12 months ending
31 October 2023
|
12 months ended
31 October
|
12 months
ended
31 October
|
|
2023
|
2022
|
|
£'000
|
£'000
|
Cash flow from operating
activities
|
|
|
Profit before tax
|
67,067
|
53,354
|
Finance costs
|
1,286
|
794
|
Interest of lease
liabilities
|
1,251
|
1,357
|
Finance income
|
(1,401)
|
-
|
Other net (gains) /
losses
|
(701)
|
1,176
|
Operating profit
|
67,502
|
56,681
|
Amortisation and impairment of
intangible assets
|
6,586
|
6,772
|
Depreciation and impairments of
property,plant and equipment
|
32,552
|
28,791
|
Loss / (gain) on sale of
property, plant and equipment and intangible
assets
|
555
|
(7,490)
|
Exchange
differences
|
(129)
|
(594)
|
Movements in
provisions
|
362
|
(809)
|
Other non cash
items
|
(33)
|
(432)
|
Changes in working capital:
|
-
|
-
|
Inventories
|
(7,010)
|
(7,033)
|
Trade and other
receivables
|
(2,372)
|
2,295
|
Trade and other
payables
|
5,673
|
9,764
|
Cash generated from operations
|
103,686
|
87,945
|
Net interest
paid
|
(1,136)
|
(2,151)
|
Taxation paid
|
(20,203)
|
(10,895)
|
Net cash generated from operating
activities
|
82,347
|
74,899
|
Cash flows from investing
activities
|
|
-
|
Acquisition of
subsidiaries
|
(4,790)
|
(739)
|
Proceeds from disposal of
subsidiaries
|
209
|
152
|
Purchase of intangible
assets
|
(2,813)
|
(2,486)
|
Proceeds from sale of
intangible assets
|
-
|
71
|
Purchase of property, plant and
equipment
|
(45,842)
|
(32,670)
|
Proceeds from sale of property,
plant and equipment
|
1,539
|
8,997
|
Investment in financial
instruments
|
-
|
(4,450)
|
Net cash utilised in investing
activities
|
(51,697)
|
(31,125)
|
Cash flows from financing
activities
|
|
|
Issue of ordinary shares to
equity shareholders
|
458
|
28
|
Acquisition of minority
interest
|
-
|
(2,985)
|
Purchase of treasury
shares
|
(1,969)
|
-
|
Repayment of principal of
leases
|
(5,857)
|
(6,196)
|
Repayment of borrowings
|
(30,960)
|
(24,622)
|
New borrowings
drawn
|
4,817
|
61,773
|
Dividends paid to owners of the
Parent
|
(23,443)
|
(35,497)
|
Net cash utilised in financing
activities
|
(56,954)
|
(7,499)
|
Net (decrease) / increase in
cash and cash equivalents
|
(26,304)
|
36,275
|
Cash and cash equivalents at
beginning of year
|
136,185
|
99,362
|
Exchange gain on cash and cash
equivalents
|
1,210
|
548
|
Cash and cash equivalents at end of
year
|
111,091
|
136,185
|
The accompanying notes form an
integral part of these condensed consolidated financial
statements.
Group Statement of Changes in
Equity
For the 12 months ending 31 October
2023
|
Share
capital
£'000
|
Share
premium
£'000
|
Treasury shares
£'000
|
Other
reserves
£'000
|
Translation
reserve
£'000
|
Retained
earnings
£'000
|
Attributable to
owners of the
Parent
£'000
|
Non-controlling
interests
£'000
|
Total
£'000
|
At 1 November 2021
|
1,889
|
10,599
|
-
|
1,781
|
7,654
|
106,051
|
127,974
|
1,720
|
129,694
|
Profit for the period
|
-
|
-
|
-
|
-
|
-
|
38,793
|
38,793
|
-
|
38,793
|
Other comprehensive income / (expense):
|
|
|
|
|
|
|
|
|
|
Exchange differences
|
-
|
-
|
-
|
-
|
840
|
-
|
840
|
(11)
|
829
|
Remeasurement gains in defined benefit pension scheme and other post-employment benefit obligations
|
-
|
-
|
-
|
-
|
-
|
1,151
|
1,151
|
-
|
1,151
|
Deferred tax on remeasurement gains
|
-
|
-
|
-
|
-
|
-
|
(248)
|
(248)
|
-
|
(248)
|
Total other comprehensive income / (expense)
|
-
|
-
|
-
|
-
|
840
|
903
|
1,743
|
(11)
|
1,732
|
Total comprehensive income / (expense)
|
-
|
-
|
-
|
-
|
840
|
39,696
|
40,536
|
(11)
|
40,525
|
Transactions with owners of the Parent:
|
|
|
|
|
|
|
|
|
|
Shares issued in the period
|
-
|
28
|
-
|
-
|
-
|
-
|
28
|
-
|
28
|
Share options
|
-
|
-
|
-
|
884
|
-
|
-
|
884
|
-
|
884
|
Dividends
|
-
|
-
|
-
|
-
|
-
|
(35,497)
|
(35,497)
|
-
|
(35,497)
|
Acquisition of minority
|
-
|
-
|
-
|
-
|
-
|
(1,276)
|
(1,276)
|
(1,709)
|
(2,985)
|
Total transactions with owners of the Parent
|
-
|
28
|
-
|
884
|
-
|
(36,773)
|
(35,861)
|
(1,709)
|
(37,570)
|
At 31 October 2022
|
1,889
|
10,627
|
-
|
2,665
|
8,494
|
108,974
|
132,649
|
-
|
132,649
|
At 1 November 2022
|
1,889
|
10,627
|
-
|
2,665
|
8,494
|
108,974
|
132,649
|
-
|
132,649
|
Profit for the period
|
-
|
-
|
-
|
-
|
-
|
50,666
|
50,666
|
-
|
50,666
|
Other comprehensive income / (expense):
|
|
|
|
|
|
|
|
|
|
Exchange differences
|
-
|
-
|
-
|
-
|
454
|
-
|
454
|
-
|
454
|
Remeasurement losses in defined benefit pension scheme and other post-employment benefit obligations
|
-
|
-
|
-
|
-
|
-
|
(220)
|
(220)
|
-
|
(220)
|
Deferred tax on remeasurement losses
|
-
|
-
|
-
|
-
|
-
|
48
|
48
|
-
|
48
|
Total other comprehensive income / (expense)
|
-
|
-
|
-
|
-
|
454
|
(172)
|
282
|
-
|
282
|
Total comprehensive income
|
-
|
-
|
-
|
-
|
454
|
50,494
|
50,948
|
-
|
50,948
|
Transactions with owners of the Parent:
|
|
|
|
|
|
|
|
|
|
Shares issued in the period
|
2
|
456
|
-
|
-
|
-
|
-
|
458
|
-
|
458
|
Purchase of treasury shares
|
-
|
-
|
(1,969)
|
-
|
-
|
-
|
(1,969)
|
-
|
(1,969)
|
Share options
|
-
|
-
|
-
|
345
|
-
|
-
|
345
|
-
|
345
|
Dividends
|
-
|
-
|
-
|
-
|
-
|
(23,443)
|
(23,443)
|
-
|
(23,443)
|
Total transactions with owners of the Parent
|
2
|
456
|
(1,969)
|
345
|
-
|
(23,443)
|
(24,609)
|
-
|
(24,609)
|
At 31 October 2023
|
1,891
|
11,083
|
(1,969)
|
3,010
|
8,948
|
136,025
|
158,988
|
-
|
158,988
|
The accompanying notes form an
integral part of these condensed consolidated financial
statements.
NOTES
1.
General information
Me Group International plc (the
"Company") is a public limited company incorporated and registered
in England and Wales and whose shares are quoted on the London
Stock Exchange, under the symbol MEGP. The registered number of the
Company is 735438 and its registered office is at Unit 3B, Blenheim
Rd, Epsom, KT19 9AP.
The principal activities of the
Group continue to be the operation, sale, and servicing of a wide
range of instant-service equipment. The Group operates
coin-operated automatic photobooths for identification and fun
purposes, and a diverse range of vending equipment, including
digital photo kiosks, laundry machines, and business service
equipment, and amusement machines.
Abridged financial information
The financial information in this
announcement, which was approved by the Board of Directors, does
not constitute the Company's statutory accounts for the years ended
31 October 2023 or 31 October 2022. The financial information for
2022 is derived from the statutory accounts for that year, which
have been delivered to the Registrar of Companies. The auditors
have reported on those accounts; their report was unqualified, did
not draw attention to any matters by way of emphasis and did not
contain statements under s498(2) or (3) Companies Act
2006.
The audit of the statutory accounts
for the year ended 31 October 2023 is substantially complete, with
only a number of minor procedural matters outstanding. These
accounts will be finalised on the basis of the financial
information presented by the directors in this results announcement
and will be delivered to the Registrar of Companies following the
Company's annual general meeting.
2.
Basis of preparation and accounting
policies
This preliminary announcement has
been prepared in accordance with UK-adopted international
accounting standards ("IFRS") and in conformity with the
requirements of the Companies Act 2006.
Whilst the financial information included in this
preliminary announcement has been prepared in accordance with IFRS,
this announcement does not itself contain sufficient information to
comply with IFRS. This preliminary announcement constitutes a
dissemination announcement in accordance with Section 6.3 of the
Disclosures and Transparency Rules (DTR).
3. Segmental
analysis
IFRS 8 requires operating segments
to be identified, based on information presented to the Chief
Operating Decision Maker (CODM) in order to allocate resources to
the segments and monitor performance. The Group reports its
segments on a geographical basis: Asia Pacific, Continental Europe
and United Kingdom & Ireland. The Group's Continental European
operations are predominately based in Western Europe and, with the
exception of the Swiss operations, use the Euro as their domestic
currency. The Board, being the CODM, believe that the economic
characteristics of the European operations, together with the fact
that they are similar in terms of operations, use common systems
and the nature of the regulatory environment allow them to be
aggregated into one reporting segment.
Segmental results are reported
before intra-group transfer pricing charges.
|
Asia
|
Continental
|
United
Kingdom
|
|
|
|
Pacific
|
Europe
|
&
Ireland
|
Corporate
|
Total
|
31 October 2023
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
Total revenue
|
44,332
|
211,432
|
48,183
|
-
|
303,947
|
Inter segment sales
|
-
|
(6,275)
|
(10)
|
-
|
(6,285)
|
Revenue from external
customers
|
44,332
|
205,157
|
48,173
|
-
|
297,662
|
EBITDA
|
9,475
|
90,109
|
18,545
|
(11,490)
|
106,639
|
Depreciation and
amortisation
|
(5,126)
|
(26,079)
|
(6,785)
|
(355)
|
(38,345)
|
(Impairment) / reversal of
impairment
|
(37)
|
(1,395)
|
639
|
-
|
(793)
|
Operating profit / (loss)
|
4,312
|
62,635
|
12,399
|
(11,844)
|
67,502
|
Operating profit
|
|
|
|
|
67,502
|
Other net gains
|
|
|
|
|
701
|
Finance income
|
|
|
|
|
1,401
|
Finance costs
|
|
|
|
|
(2,537)
|
Profit before tax
|
|
|
|
|
67,067
|
Tax
|
|
|
|
|
(16,401)
|
Profit for the period
|
|
|
|
|
50,666
|
Capital expenditure (excluding Right
of Use assets)
|
8,846
|
36,509
|
7,380
|
733
|
53,468
|
|
|
|
|
|
|
Non-current assets
|
28,134
|
103,226
|
26,508
|
1,124
|
158,992
|
|
Asia
|
Continental
|
United
Kingdom
|
|
|
|
Pacific
|
Europe
|
&
Ireland
|
Corporate
|
Total
|
31 October 2022
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
Total revenue
|
39,945
|
187,897
|
41,996
|
-
|
269,838
|
Inter segment sales
|
-
|
(10,058)
|
-
|
-
|
(10,058)
|
Revenue from external
customers
|
39,945
|
177,839
|
41,996
|
-
|
259,780
|
EBITDA
|
9,094
|
75,497
|
15,388
|
(7,738)
|
92,241
|
Depreciation and
amortisation
|
(5,421)
|
(26,153)
|
(6,954)
|
(322)
|
(38,850)
|
(Impairment) / reversal of
impairment
|
(1,715)
|
1,919
|
3,086
|
-
|
3,290
|
Operating profit / (loss)
|
1,958
|
51,263
|
11,520
|
(8,060)
|
56,681
|
Operating profit
|
|
|
|
|
56,681
|
Other net losses
|
|
|
|
|
(1,176)
|
Finance income
|
|
|
|
|
-
|
Finance costs
|
|
|
|
|
(2,151)
|
Profit before tax
|
|
|
|
|
53,354
|
Tax
|
|
|
|
|
(14,561)
|
Profit for the period
|
|
|
|
|
38,793
|
Capital expenditure (excluding Right
of Use assets)
|
4,218
|
20,056
|
9,522
|
1,359
|
35,156
|
|
|
|
|
|
|
Non-current assets
(restated)
|
24,870
|
90,959
|
25,045
|
796
|
141,670
|
Total revenue from external customers is analysed
below:
|
31
October
|
31
October
|
|
2023
|
2022
|
|
£'000
|
£'000
|
Total revenue from external
customers
|
|
|
Sales of equipment, spare parts &
consumables
|
18,724
|
20,459
|
Sales of services
|
3,615
|
3,895
|
|
22,339
|
24,355
|
Vending revenue
|
275,323
|
235,425
|
Total revenue
|
297,662
|
259,780
|
There were no key customers in the period ended 31
October 2023 (2022: none).
4. Taxation
expenses
Tax charges/(credits) in the statement of
comprehensive income
|
31
October
|
|
31
October
|
|
2023
|
|
2022
|
|
£'000
|
|
£'000
|
Taxation
|
|
|
|
Current taxation
|
|
|
|
UK Corporation tax
|
|
|
|
- current period
|
9,833
|
|
6,104
|
- prior periods
|
(1,068)
|
|
2,253
|
|
8,765
|
|
8,357
|
Overseas taxation
|
|
|
|
- current period
|
6,916
|
|
7,200
|
- prior periods
|
(212)
|
|
90
|
|
6,704
|
|
7,290
|
Total current taxation
|
15,469
|
|
15,647
|
Deferred taxation
|
|
|
|
Origination and reversal of temporary
differences
|
|
|
|
- current period - UK
|
677
|
|
(150)
|
- current period -
overseas
|
(663)
|
|
(961)
|
Adjustments in respect of prior
periods - UK
|
843
|
|
27
|
Adjustments in respect of prior
periods - Overseas
|
-
|
|
45
|
Impact of change in rate
|
75
|
|
(47)
|
Total deferred tax
|
932
|
|
(1,086)
|
Tax
charge in the income statement
|
16,401
|
|
14,561
|
|
|
|
|
Tax
relating to items (credited)/charged to other components of
comprehensive income
|
|
|
|
Corporation tax
|
-
|
|
-
|
Deferred tax
|
(48)
|
|
248
|
Tax
charge in other comprehensive income
|
(48)
|
|
248
|
|
|
|
|
Total tax charge in the statement of comprehensive
income
|
16,353
|
|
14,809
|
The Group tax charge of £16.4m (2022: £14.6m)
corresponds to an effective tax rate of 24.5% (2022: 27.4%).
The UK main rate of corporation tax increased from 19%
to 25% on 1 April 2023.
The Group undertakes business in multiple tax
jurisdictions.
5. Dividends
paid and proposed
|
31 October
2023
|
|
31 October
2022
|
|
pence per
share
|
£'000
|
|
pence per
share
|
£'000
|
Dividends Paid
|
|
|
|
|
|
Special dividend
|
|
|
|
|
|
Approved by the Board on 18 July
2022
|
-
|
-
|
|
6.50
|
24,572
|
Final
|
|
|
|
|
|
2021 approved at AGM held on 29 April
2022
|
-
|
-
|
|
2.89
|
10,925
|
Interim Dividend
|
|
|
|
|
|
2022 approved by the board on 18 July
2022
|
2.60
|
9,829
|
|
-
|
-
|
Final
|
|
|
|
|
|
2022 approved at AGM held on 28 April
2023
|
3.00
|
11,345
|
|
-
|
-
|
Special dividend
|
|
|
|
|
|
2022 approved by the board on 20
April 2023
|
0.60
|
2,269
|
|
-
|
-
|
|
|
|
|
|
|
|
6.20
|
23,443
|
|
9.39
|
35,497
|
Dividends Proposed
|
|
|
|
|
|
Interim Dividend
|
|
|
|
|
|
2022 approved by the board on 18 July
2022
|
-
|
-
|
|
2.60
|
9,829
|
Interim Dividend
|
|
|
|
|
|
2023 approved by the board on 11 July
2023
|
2.97
|
11,240
|
|
-
|
-
|
|
|
|
|
|
|
|
2.97
|
11,240
|
|
2.60
|
9,829
|
Period ended
31 October 2023 - Dividends paid in the period
The Board approved an interim dividend of 2.60p per
ordinary share for the six month period ended 30 April 2022, at its
18 July 2022 meeting. The interim dividend was paid on 3 November
2022.
The Board proposed a final dividend of 3.00p per
ordinary share in respect of the year ended 31 October 2022, which
was approved by shareholders at the Annual General Meeting held on
28 April 2023 and paid on 12 May 2023.
The Board also approved, at its 20 April 2023
meeting, a special dividend of 0.60p per ordinary share, which was
paid on 19 May 2023.
Period ended
31 October 2023 - Proposed dividends not paid in the
period
The Board approved an interim dividend of 2.97p per
ordinary share for the six month period ended 30 April 2023, at its
11 July 2023 meeting. The interim dividend was paid on 23 November
2023.
Period ended
31 October 2022 - Dividends paid in the period
The Board proposed a final dividend of 2.89p per
ordinary share in respect of the year ended 31 October 2021, which
was approved by shareholders at the Annual General Meeting held on
29 April 2022 and paid on 13 May 2022.
The Board also approved, at its 18 July meeting, a
special dividend of 6.50p per ordinary share, which was paid on 1
September 2022.
Period ended
31 October 2022 - Proposed dividends not paid in the
period
The Board approved an interim dividend of 2.60p per
ordinary share for the six month period ended 30 April 2022, at its
18 July 2022 meeting. The interim dividend was paid on 3 November
2022.
6. Earnings
per share
Basic earnings per share amounts are calculated by
dividing net earnings attributable to shareholders of the Parent of
£50,666,000 (2022: £38,793,000) by the weighted average number of
shares in issue during the period.
Diluted earnings per share amounts are calculated by
dividing the net earnings attributable to shareholders of the
Parent by the weighted average number of shares outstanding during
the period plus the weighted average number of shares that would be
issued on conversion of all the dilutive potential shares into
shares. The Group has only one category of dilutive potential
shares being share options granted to senior staff, including
directors.
The earnings and weighted average number of shares
used in the calculation are set out in the table below:
|
31 October
2023
|
31 October 2022
|
|
|
Weighted
|
|
|
Weighted
|
|
|
|
average
|
Earnings
|
|
average
|
Earnings
|
|
|
number
|
per share
|
|
number
|
per
share
|
|
Earnings
|
of shares
|
pence
|
Earnings
|
of
shares
|
pence
|
|
£'000
|
'000
|
|
£'000
|
'000
|
|
Basic earnings per share
|
50,666
|
378,110
|
13.40
|
38,793
|
378,052
|
10.26
|
Effect of dilutive share
options
|
-
|
2,490
|
(0.09)
|
-
|
1,048
|
(0.03)
|
Diluted earnings per share
|
50,666
|
380,600
|
13.31
|
38,793
|
379,100
|
10.23
|
Potential shares (for example, arising from exercising
share options) are treated as dilutive only when their conversion
to shares would decrease basic earnings per share or increase loss
per share from continuing operations.
7.
Non-current assets: Goodwill, other intangibles, property, plant
and equipment and investment property
|
Goodwill
|
Other
Intangible
|
Property, plant
&
|
Investment
|
|
|
assets
|
Equipment
|
property
|
|
£'000
|
£'000
|
£'000
|
£'000
|
Net
book value at 31 October 2021
|
15,305
|
19,988
|
91,973
|
597
|
Exchange adjustment
|
159
|
(110)
|
1,092
|
10
|
Additions - photobooths & vending
machines
|
-
|
-
|
27,205
|
-
|
Additions - other assets
|
-
|
2,486
|
5,465
|
-
|
Additions - right of use
assets
|
-
|
-
|
7,298
|
-
|
Additions - new
subsidaries
|
1,652
|
98
|
11
|
-
|
Amortisation /
Depreciation
|
-
|
(6,618)
|
(32,219)
|
(15)
|
(Impairment) / Reversal of
impairment
|
-
|
(153)
|
3,443
|
-
|
Disposals at net book
value
|
-
|
(71)
|
(3,178)
|
-
|
Net
book value at 31 October 2022
|
17,116
|
15,620
|
101,090
|
592
|
Purchase price allocation
adjustment
|
(796)
|
814
|
-
|
-
|
Net
book value at 1 November 2022
|
16,320
|
16,434
|
101,090
|
592
|
Exchange adjustment
|
1
|
(175)
|
628
|
9
|
Additions - photobooths & vending
machines
|
-
|
-
|
39,122
|
-
|
Additions - other assets
|
-
|
2,813
|
6,720
|
-
|
Additions - right of use
assets
|
-
|
-
|
3,516
|
-
|
Additions - new
subsidaries
|
3,268
|
49
|
1,496
|
-
|
Transfers
|
-
|
(121)
|
121
|
-
|
Transferred to non-current assets
held for sale
|
-
|
-
|
-
|
(585)
|
Amortisation /
Depreciation
|
-
|
(4,440)
|
(33,889)
|
(16)
|
(Impairment) / Reversal of
impairment
|
(701)
|
(1,445)
|
1,353
|
-
|
Disposals at net book
value
|
-
|
(61)
|
(2,033)
|
-
|
Net
book value at 31 October 2023
|
18,888
|
13,054
|
118,124
|
-
|
8. Net
cash
|
31 October
|
31
October
|
|
2023
|
2022
|
|
£'000
|
£'000
|
Cash and cash equivalents per
statement of financial position
|
111,091
|
136,185
|
Non-current borrowings
|
(50,137)
|
(72,365)
|
Current borrowings
|
(27,037)
|
(29,799)
|
Net
Cash
|
33,917
|
34,021
|
Cash and cash equivalents per the cash flow comprise
cash at bank and in hand and short-term deposit accounts with an
original maturity of less than three months, less bank
overdrafts.
Net cash is a non-GAAP measure since it is not
defined in accordance with IFRS but is a key indicator used by
management in assessing operational performance and financial
position strength. The inclusion of items in net cash as defined by
the Group may not be comparable with other companies' measurement
of net cash/debt. The Group includes in net cash: cash and cash
equivalents and certain financial assets (mainly deposits), less
instalments on loans and other borrowings.
RESPONSIBILITY STATEMENT OF THE DIRECTORS IN RESPECT OF THE
FINANCIAL REPORT
The Directors of the Company are
responsible for preparing the Annual Report and the financial
statements in accordance with applicable law and
regulations.
The
Directors who are making this responsibility statement and who are
responsible for preparing the Annual Report, the Report of the
Directors and the Group and Company financial statements in
accordance with applicable law and regulations (and their
respective functions) are as follows:
Sir John Lewis OBE
(Non-executive Chairman of the Board, Chairman of the Nomination
Committee, and member of the Remuneration and Audit Committees);
Serge Crasnianski (CEO and Deputy Chairman and member of the
Executive Team); Tania Crasnianski (Executive Director and member
of the Executive Team); Jean-Marc Janailhac
(Non-executive Director); René Proglio
(Non-executive Director and Chairman of the Audit Committee);
Emmanuel Olympitis (Senior Independent Non-executive Director,
Chairman of the Remuneration Committee and a member of the Audit
and Nomination Committees); Françoise Coutaz-Replan (Non-executive
Director and member of the Audit Committee); and
Camille Claverie (Non-executive
Director).
Company law requires the Directors
to prepare financial statements for the Group and the Company for
each financial year. Under that law, the Directors are required to
prepare the Group financial statements in accordance with
UK-adopted international accounting standards and applicable law
and have elected to prepare the Company's financial statements on
the same basis.
Under company law, the Directors
must not approve the financial statements unless they are satisfied
that they give a true and fair view of the state of affairs of the
Group and the Company and of their respective profit or loss for
that period. In preparing each of the Group and the Company's
financial statements, the Directors are required to:
■ Select suitable
accounting policies and then apply them consistently;
■ Make judgments and
accounting estimates that are reasonable and prudent;
■ State whether
they have been prepared in accordance with UK-adopted international
accounting standards, subject to any material departures disclosed
and explained in the Group and Company financial statements
respectively; and
■ Prepare the
financial statements on the going-concern basis unless it is
inappropriate to presume that the Group and the Parent Company will
continue in business.
The Directors are responsible for
keeping adequate accounting records that are sufficient to show and
explain the Company's transactions and disclose with reasonable
accuracy at any time the financial position of the Company and the
Group and enable them to ensure that their financial
statements and the Directors' Remuneration Report comply with the
Companies Act 2006 and as regards the Group's financial statements,
Article 4 of the IAS Regulation.
The Directors have general
responsibility for taking such steps as are reasonably open to them
to safeguard the assets of the Group and to prevent and detect
fraud and other irregularities.
Under applicable law and
regulations, the Directors are also responsible for preparing a
Strategic Report, Directors' Report, Directors' Remuneration Report
and Corporate Governance Statement that comply with that law and
those regulations.
The Directors are responsible for
the maintenance and integrity of the corporate and financial
information included on the Company's website. Legislation in the
UK governing the preparation and dissemination of financial
statements may differ from legislation in other
jurisdictions.
Responsibility Statement of the
Directors in respect of the annual financial report
Each of the Directors of the Company
confirms that, to the best of his or her knowledge:
■ The financial
statements, which have been prepared in accordance with UK-adopted
international accounting standards, give a true and fair view of
the assets, liabilities, financial position and profit or loss of
the Company and the undertakings included in the consolidation
taken as a whole; and
■ The Strategic
Report and Report of Directors in the Annual Report include a fair
review of the development and performance of the business and the
position of the Company and the undertakings included in the
consolidation taken as a whole, together with a description of the
principal risks and uncertainties that they face.
Fair, balanced and
understandable
In accordance with the principles of
the UK Corporate Governance Code, the Directors have arrangements
in place to ensure that the information presented in the Annual
Report is fair, balanced and understandable.
The Board considers, on the advice
of its Audit Committee, that the Annual Report, taken as a whole,
is fair, balanced and understandable, and provides the information
necessary for shareholders to assess the Company's and the Group's
position and performance, business model and
strategy.
By order of the Board
Sir
John Lewis OBE (Non-executive Chairman)
Serge Crasnianski (Chief Executive Officer and Deputy
Chairman)
22 February 2024