TIDMSFE
RNS Number : 2112A
Safestyle UK PLC
22 September 2022
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the Group's obligations under Article 17 of MAR.
22 September 2022
Safestyle UK plc
("Safestyle" or the "Group")
Interim Results 2022
Strong balance sheet and strategic investment programme will
position Group for long-term growth
Safestyle UK plc (AIM: SFE), the leading UK-focused retailer and
manufacturer of PVCu replacement windows and doors for the
homeowner market, today announces its interim results for the six
months ended 3 July 2022(1) (H1).
Financial and operational highlights
H1 2022 H1 2021 H1 22
v H1 21
% change
Revenue 78.3 73.0 7.2%
-------- -------- ----------
Gross Profit 19.4 23.5 (17.7%)
-------- -------- ----------
Gross margin % 24.75% 32.23% (748bps)
-------- -------- ----------
Underlying (loss) / profit before
taxation(2) (1.4) 5.1 n/a
-------- -------- ----------
Non-underlying items(3) (1.4) (0.8) (86.5%)
-------- -------- ----------
(Loss) / profit before taxation (2.8) 4.3 n/a
-------- -------- ----------
EPS - Basic (1.5)p 2.6p n/a
-------- -------- ----------
Net cash(4) 13.0 14.4 n/a
-------- -------- ----------
Interim dividend per share 0.4p - n/a
-------- -------- ----------
1) The interim financial statements are presented for the period
ended on the closest Sunday to the end of June. This date
was 3 July 2022 for the current reporting period and 4 July
2021 for the prior period. All references made throughout
2) to H1 2022 are for the period 3 January 2022 to 3 July 2022
and references to H1 2021 are for the period 4 January 2021
to 4 July 2021.
Underlying (loss) / profit before taxation is defined as reported
(loss) / profit before taxation before non-underlying items
and is included as an alternative performance measure in order
to aid users in understanding the ongoing performance of the
Group.
3) Non-underlying items consist of non-recurring costs, share-based
payments and the Commercial Agreement amortisation.
4) Net cash is cash and cash equivalents less borrowings.
A reconciliation between the terms used in the above table and
those in the financial statements can be found in the Financial
Review.
Headlines
-- H1 revenue growth of 7.2%, order intake (sales) growth of
11.7% and order book growth of 17.7%.
-- Return to dividend payments, with an interim dividend declared of 0.4p per share.
-- Net cash increased to GBP13.0m from GBP12.1m at year-end.
-- H1 underlying profit reduction due to the c.GBP4m impact of a cyber-attack in Q1.
-- The business initiated a GBP5m strategic investment programme
(versus 2021) that includes TV advertising, new business
development, the Safestyle Academy (for new fitters) and a range of
actions to improve our customer experience and reduce our cost of
quality.
-- Order book investment of GBP1.7m plus cost push on materials
and lead generation spend have reduced H1 gross margins; price
increases expected to mitigate these in H2.
-- We continue to make progress on our ESG agenda and remain on
track to achieve our 2025 targets with a further 1% reduction in
CO(2) per frame and waste to landfill decreasing to 4% in this
first half.
Outlook
-- The business expects its strong value proposition, consumer
finance options and its products' energy efficiency benefits to
mitigate what may be an uncertain consumer market in H2 and
beyond.
-- Softer sales at the height of an unusually hot summer in the
UK drove a decision to invest in an earlier return to TV, with a
focused message on value and energy efficiency.
-- Record temperatures in late July also caused some disruption
to our factory fulfilment performance for c.2 weeks which impacted
customer service and installation volumes during Q3; the factory is
now operating normally .
-- H2 revenues are forecast to accelerate to double-digit growth
and will support gross margin percentages back above 30%.
-- Our strategic investment programme will be sustained through
H2 and covered at our forthcoming Capital Markets Day (detailed
below).
-- The Board forecasts that the Group's underlying performance
will still be profitable for H2 and for the full year. After the
impact of the factors above, although we anticipate revenue
exceeding expectations, we now expect full year underlying profit
will be no lower than GBP1.0m. The Board have, however, decided not
to reduce the pace or quantum of our investment following delays
caused by a prolonged period of turbulence.
-- As the national value player in our industry, we believe we
are well placed to attract consumers in tougher economic times and
have traded resiliently through previously difficult economic
periods.
-- Having returned to a dividend payment at the half year, the
Group targets a progressive dividend policy in line with its
capital allocation policy.
Commenting on the results, Mike Gallacher, CEO said:
"The business has delivered a good trading performance in the
first half, achieving revenue growth of 7.2% against an
increasingly difficult economic backdrop. Despite the obvious
financial impact of the cyber-attack, it is pleasing to see our net
cash position remains strong, increasing to GBP13.0m at period end
with the Group's order book also growing by 17.7% over the first
half, representing a closing position that was 17.6% ahead of the
prior period. This supports our ability to act on our long-standing
intent to return to paying dividends to shareholders.
In 2022 we emerged from a sustained period of turbulence and
have now initiated a multi-year strategic investment programme. For
2022, this represents a GBP5m investment versus 2021 and it
encompasses a full year return to TV advertising (GBP2.5m), the
initiation of an important new business development project
(GBP0.7m), the launch of the new Safestyle Academy which has
prioritised training new window fitters (GBP0.8m), the roll out of
Standard Operating Procedures (' SOPs') across our depot network
and a range of investments behind improving our customer experience
and reducing our quality costs. This programme is designed to
modernise the business, drive growth and build sustainable
competitive advantage over the medium term. More details will be
shared at our Capital Markets Day which is scheduled to take place
on 16(th) November 2022. We remain committed to sustaining these
strategic investments through the coming years.
Looking ahead, notwithstanding the challenging macro-economic
conditions, we still expect the business to deliver both an
(underlying) profitable full year and positive cashflow from
operations. As a result of the challenges in Q3 caused by the
unusually hot weather and the Board's commitment to our strategic
investment programme, we now expect full year underlying profit
will be no lower than GBP1.0m. As ever, the Group remains keenly
focused on advancing our strategic priorities and believe these
investments will leave us well positioned to deliver sustainable
long-term performance for our shareholders."
Enquiries:
Safestyle UK plc via FTI Consulting
Mike Gallacher, Chief Executive Officer
Rob Neale, Chief Financial Officer
Zeus (Nominated Adviser & Joint Broker) Tel: 0203
Dan Bate / James Edis (Investment Banking) 829 5000
Dominic King (Corporate Broking)
Liberum Capital Limited (Joint Broker) Tel: 0203
Neil Patel / Jamie Richards 100 2100
FTI Consulting (Financial PR) Tel: 0203
Alex Beagley / Sam Macpherson / Amy Goldup 727 1000
About Safestyle UK plc
The Group is the leading retailer and manufacturer of PVCu
replacement windows and doors to the UK homeowner market. For more
information, please visit www.safestyleukplc.co.uk or
www.safestyle-windows.co.uk.
CEO's Statement
H1 saw the delivery of strong revenue growth, increasing by 7.2%
with order intake (sales) up 11.7% versus the prior period. As a
result, our order book grew by 17.7% in H1 and our net cash
position moved to GBP13.0m. As indicated previously our financial
performance in H1 was materially impacted by a cyber-attack at the
end of January. This was predominantly caused by the delay to a
planned pricing move designed to keep pace with inflationary cost
push coming through. As a result, the business saw planned profits
for H1 reduced by c.GBP4.0m to a loss of (GBP1.4m), albeit
profitability recovered rapidly to planned levels in May and into
June.
Input costs in H1 reflect the highest levels of inflation in
many years, increasing year on year by over 20% in some cases. The
main causes were due to rising energy costs being passed on by our
suppliers as well as higher raw material, staffing and fuel costs.
As we have demonstrated in the last few years, we have moved
promptly to mitigate the impact of these costs on our margins
through proactive price changes alongside careful cost management.
Whilst the cyber-attack caused a delay, we implemented our Q1 price
increase early in Q2 and the effect of this began to come through
in our revenues in the latter part of the quarter. Our systems are
now operating normally. We expect to continue to respond to cost
pressures as necessary while also ensuring that our offering
maintains its value proposition for our customers.
The growth in the order book through H1 represents an investment
of GBP1.7m. The business also initiated a multi-year strategic
investment programme in H1 equating to a GBP2.1m increase in
operating expenses versus H1 2021. This spend consisted of GBP0.9m
of TV spend, alongside further growth in people costs, IT, training
and customer service investment. The strong cash position of the
business has supported this growth in line with our strategic
priorities.
Trading & Operations
The 11.7% growth in order intake (sales) delivered during H1
reflected the success of our largest TV campaign since 2017. The
campaign communicated a new, modernised brand proposition and a
strong value message and was fronted by David Seaman MBE. The
GBP0.9m investment in H1 allowed us to sustain the campaign and
ensure its impact was maximised across the market and was supported
by an aligned digital marketing campaign.
We continue to make significant progress leveraging our scale in
digital marketing, supported by the excellent agency we appointed
in 2020. Increasing the use of Artificial Intelligence ('AI') and
other optimisation strategies will continue to be essential to help
offset the rising levels of digital marketing rate inflation.
Our processing, installations and customer service levels were
impacted by the cyber-attack in the early part of the year. Despite
this, revenue increased 7.2% in H1 with a return to volume growth
of 2% in Q2. The business now operates 14 depots, an increase of 2
since 2020 in order to support both a broader footprint and
improved medium-term fit capacity.
Dividend
We are pleased to report a return to dividend payments with the
Board approving an interim dividend of 0.4p per share (H1 2021:
GBPnil) and an intention to adopt a progressive dividend policy
going forward. Further details of the dividend including a dividend
timetable are included in the Financial Review further below.
Strategic Priorities
After a number of years of turbulence, 2022 saw us initiate an
ambitious GBP5m (versus 2021) strategic investment programme aimed
at supporting the medium and long-term performance of the business.
It remains important to share our strategic roadmap at our Capital
Markets Day scheduled for 16(th) November 2022.
For H1 2022 the strategic investment programme included the
following specific activities:
Delivering Profitable Growth : Rebuilding our brand is a key
element of our growth strategy. Between 2018 and 2021, brand
investment was significantly scaled back, driving up digital
marketing costs and impacting our national brand awareness. Our
return to national TV in 2022 is therefore a strategic investment
that, when sustained, will drive awareness, reduce cost and drive
volume growth. In addition, we have modernised the brand,
leveraging proprietary industry market research which was conducted
during 2020-2021.
Transforming our Customer Experience: Delivering a consistent
and good customer experience across the regions has been a
consistent barrier to scale across our industry. Our approach is
based on designing and implementing robust business processes,
supported by modern IT systems and effective training. This is a
phased multi-year initiative, with an early focus on customer
service levels through investing in modernising our call centre and
implementing Net Promoter Score (NPS) across the installations
network.
A key element of this programme is the launch of the Safestyle
Academy, initially focused on training new window fitters. Our
12-month programme is the largest such programme in the UK and will
deliver regular cohorts of well-trained window fitters to the
business, addressing the current skill shortages across the UK and
embedding the Safestyle approach to customer service. The first
cohort from this programme will graduate before the end of the
year.
Levelling up our Depots and Branches: As our business grows, we
need to ensure that we develop and implement SOPs that close the
range of performance across our network. During H1 we rolled out
our new SOPs across installations and developed our first training
programme for depot management. This training will be deployed
across our installations management population during H2.
IT as an Enabler : Early modernisation of our systems helped to
mitigate the impact of the sophisticated cyber-attack we
experienced in Q1. Over the next two years, our focus will be to
modernise our legacy systems, including implementing a modern CRM
system, which will transform our customer experience.
Our ESG agenda: The business takes its broader responsibilities
seriously and has introduced a temporary monthly cost of living
allowance was announced for Q4 2022 and Q1 2023 for selected groups
of staff to mitigate some of the impact of the current cost of fuel
increases.
I am delighted that we have also sustained progress in our
environmental agenda and can confirm that w e are on track to
achieve our 2025 targets with a further 1% reduction in CO(2) per
frame versus FY 2021 and waste to landfill decreasing further to
4%. The key remaining breakthrough to reduce our carbon emissions
further is electrifying the Group's vehicle fleet which requires
both the vehicle technology and infrastructure. We have also
commenced our Scope 3 audits of our 10 largest suppliers and we
will be able to share more details on this in our 2022 Annual
Report next year.
Business Outlook
The economic and consumer outlook will remain challenging in H2,
with consumer confidence levels at a 40-year low and inflation at a
corresponding high. Against this context, we are confident in
leveraging both our clear value proposition and the relevance of
our product at a time of high household energy costs. This
proposition is supported by market leading finance options and a
credible 10-year warranty.
Following a strong H1, order intake performance in Q3 slowed at
the height of an unusually hot summer although our order book
mitigated the impact on revenue. Record temperatures in late July
caused some disruption to our critical manufacturing equipment and
subsequently to our order fulfilment levels for c.2 weeks into
mid-August. As referenced above, the factory is back to operating
normally and measures are in place to ensure that if we experience
similar temperature levels in the future, it will not have the same
impact.
Our response to the softer market was to bring forward the
second phase of our 2022 TV campaign into August with a key message
around energy efficiency. Early signs are that this has helped
stimulate demand and we have returned to value growth in August,
although volumes are still marginally behind the prior year. If we
do see weakening consumer demand across the industry in the months
ahead, it will be even more critical to sustain our TV campaign
investment.
We continue to forecast double-digit revenue growth in H2 due to
a combination of volume delivery and price progression which in
turn we forecast to drive gross margin percentages back above 30%
with a return to underlying profits for both the second half of the
year and also for the full year. This performance will be despite
protecting our investment agenda, including further investment in
new business development. These activities and initiatives will be
covered during our Capital Markets Day.
Overall, we still expect to deliver both a full year underlying
profit and positive cashflow from operations despite the GBP4m
impact of the cyber-attack and the strategic investment programme.
A lthough we anticipate revenue exceeding expectations, we now
expect full year underlying profit will be no lower than GBP1.0m
after the Q3 challenges and the increased new business development
investment described above.
Our view, supported by our current performance, remains that as
the national value player in our industry we are well placed to
attract consumers in tougher economic times while still progressing
our financial performance and investing for the medium-term.
Mike Gallacher
Chief Executive Officer
22 September 2022
Financial Review
H1 2022 H1 2021
Underlying Non-underlying Total Underlying Non-underlying Total H1 22
items(3) items(3) v H1
21 change
in underlying
%
------------ --------------- --------- ------------ --------------- --------- ---------------
Financials GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------------ --------------- --------- ------------ --------------- --------- ---------------
Revenue 78,250 78,250 72,980 72,980 7.2%
------------ --------------- --------- ------------ --------------- --------- ---------------
Cost of sales (58,886) (58,886) (49,456) (49,456) (19.1%)
------------ --------------- --------- ------------ --------------- --------- ---------------
Gross Profit 19,364 19,364 23,524 23,524 (17.7%)
------------ --------------- --------- ------------ --------------- --------- ---------------
Other operating
expenses(1) (19,943) (1,429) (21,372) (17,838) (766) (18,604) (11.8%)
------------ --------------- --------- ------------ --------------- --------- ---------------
Operating (loss)
/ profit (579) (1,429) (2,008) 5,686 (766) 4,920 n/a
------------ --------------- --------- ------------ --------------- --------- ---------------
Finance costs (833) (833) (628) (628) (32.6%)
------------ --------------- --------- ------------ --------------- --------- ---------------
(Loss) / profit
before
taxation(2) (1,412) (1,429) (2,841) 5,058 (766) 4,292 n/a
------------ --------------- --------- ------------ --------------- --------- ---------------
Taxation 807 (729)
------------ --------------- --------- ------------ --------------- --------- ---------------
(Loss) / profit
for the period (2,034) 3,563
------------ --------------- --------- ------------ --------------- --------- ---------------
Basic EPS (pence
per share) (1.5)p 2.6p
------------ --------------- --------- ------------ --------------- --------- ---------------
Diluted EPS
(pence
per share) (1.5)p 2.5p
------------ --------------- --------- ------------ --------------- --------- ---------------
Cash and Cash
equivalents 17,327 18,600
------------ --------------- --------- ------------ --------------- --------- ---------------
Borrowings (4,305) (4,193)
------------ --------------- --------- ------------ --------------- --------- ---------------
Net Cash(4) 13,022 14,407
------------ --------------- --------- ------------ --------------- --------- ---------------
H1 22
v 21
KPIs for the period H1 2022 H1 2021 change
Gross margin %(5) 24.75% 32.23% (748bps)
-------- -------- ---------
Average Order Value (GBP
inc VAT) 4,300 4,020 7.0%
-------- -------- ---------
Average Frame Price (GBP
ex VAT) 832 764 8.9%
-------- -------- ---------
Frames installed - units 94,525 96,241 (1.8%)
-------- -------- ---------
Orders installed 21,946 21,958 (0.1%)
-------- -------- ---------
Frames per order 4.31 4.38 (1.6%)
-------- -------- ---------
Some of the Group's KPIs have been further broken down in the
table below into quarterly measures to aid the understanding of
performance trends within the period.
Q1 22 Q2 22
v Q1 v Q2
KPIs by quarter Q1 2022 Q1 2021 21 change Q2 2022 Q2 2021 21 change
Revenue 36.7 34.7 5.8% 41.6 38.3 8.5%
-------- -------- ----------- -------- -------- -----------
Average Order Value (GBP
inc VAT) 4,149 3,874 7.1% 4,443 4,164 6.7%
-------- -------- ----------- -------- -------- -----------
Average Frame Price (GBP
ex VAT) 820 741 10.7% 843 787 7.0%
-------- -------- ----------- -------- -------- -----------
Frames installed - units 44,875 47,542 (5.6%) 49,650 48,699 2.0%
-------- -------- ----------- -------- -------- -----------
Orders installed 10,641 10,907 (2.4%) 11,305 11,051 2.3%
-------- -------- ----------- -------- -------- -----------
Frames per order 4.22 4.36 (3.3%) 4.39 4.41 (0.3%)
-------- -------- ----------- -------- -------- -----------
H1 2022's financial performance was significantly impacted by
the consequences of the cyber-attack which caused a delay to the
implementation of a planned January price increase and also reduced
installation volumes during the period when the Group's normal
processes were curtailed. The price increase was implemented in
late April which, alongside a return to normal processing capacity
levels, resulted in installation volume returning to year on year
growth in Q2 with the Group also returning to an underlying profit
before taxation in May and June.
Alongside the financial impact of the cyber-attack, H1 also
includes a number of material investments that underpin the Group's
medium-term strategic priorities. These include a GBP0.9m spend on
the H1 TV campaign alongside further investment in customer service
resource, installations capacity, training and IT.
Finally, as described in the CEO's statement, order intake grew
by 11.7% over the prior period which resulted in the order book
increasing by 17.7%, closing the half 17.6% higher versus the end
of H1 2021. The costs associated with this growth in the order book
totalled GBP1.7m and gross margins are expected to increase in H2
as the order book unwinds over the coming months.
The Group made an underlying loss before taxation(3) of
GBP(1.4)m for the period due to the above factors. Net cash(4) grew
by GBP0.9m from the year end position to GBP13.0m.
Financial and KPI headlines
-- Revenue increased to GBP78.3m, growth of 7.2% on H1 21.
-- Frames installed declined by 1.8% versus H1 21 to 94,525,
albeit frames installed in Q2 grew by 2.0% over 2021 as the
business recovered from the disruption caused by the
cyber-attack.
-- Average frame price has continued to increase this year, with
growth of 8.9% achieved versus H1 21 to GBP832. This increase
largely signals the carry through of price actions in 2021. As
referenced in the CEO's statement, planned price increases this
year were delayed until Q2 as a result of the cyber-attack. The
Group has continued to increase its prices to keep pace with cost
inflation. H igher-priced composite guard doors reduced year on
year from 7.4% to 6.6% which represents a mild negative mix effect
on the average frame price.
-- Gross profit reduced by 17.7% versus H1 21 to GBP19.4m. Gross
margin percentage(5) reduced by 748bps to 24.75%. H1 21 represents
a strong comparative with the gross margin percentage positively
influenced by lower lead generation costs due to favourable market
conditions alongside a benefit of the order book reducing during
the period. This year, lead generation costs have returned to more
normalised (and thus higher) levels and the order book grew through
the first half with the associated costs of delivering this
expensed in H1. In addition, the delay to the price increase
described above adversely impacted gross margin percentage in H1 as
inflation of input costs came through. The gross margin percentage
is expected to increase back above 30% as the order book unwinds
and recent price increases feed through into the Group's
revenues.
-- Underlying other operating expenses(1) for the period
increased by GBP2.1m (11.8%) over H1 21 due to a GBP0.9m investment
in the H1 TV campaign, wage inflation and increased investment in
customer service resource, installations capacity, training and
IT.
-- Underlying (loss) / profit before taxation was a loss of
GBP(1.4)m for the period (H1 21: profit of GBP5.1m) due to the
impact on H1 financial performance of the cyber-attack, order book
growth and the Group's investment agenda.
-- Non-underlying items(1) totalled GBP1.4m (H1 21: GBP0.8m)
with the increase a result of the non-recurring costs associated
with recovery from the cyber-attack. Consequently, after
non-underlying items, reported (loss) / profit before taxation was
a loss of GBP(2.8)m versus a profit of GBP4.3m in H1 21.
-- Net cash improved to GBP13.0m compared to GBP12.1m at the end
of the prior year. The improved cash position at the end of the
period is a result of working capital timing partially offset by
the loss for the year to date.
(1) Underlying other operating expenses are defined in the 'Underlying performance
measures'
section below and the reconciliation between this measure and the GAAP measure is
shown in
the 'Financials' table at the front of this Financial Review
(2) Underlying (loss) / profit before taxation is defined in the 'Underlying
performance
measures' section below and the reconciliation between this measure and the GAAP
measure is
shown in the 'Financials' table at the front of this Financial Review
(3) See the non-underlying items section in this Financial Review
(4) Net cash is cash and cash equivalents less borrowings
(5) Gross margin % is gross profit divided by revenue
Underlying performance measures
In the course of the last four years, the Group has faced a
series of unprecedented and unusual challenges. These gave rise to
a number of significant non-underlying items starting in 2018 with
consequential items in 2019 as the Group addressed the impact of
these challenges, predominantly as part of its Turnaround Plan. The
impact of COVID-19 in 2020 also gave rise to a material
non-underlying item in the form of a holiday pay accrual. The costs
of recovering from the cyber-attack in H1 22 are also treated as
non-underlying costs. Further details are provided below in this
Financial Review.
As a consequence of these items, adjusted measures of underlying
other operating expenses and underlying (loss) / profit before
taxation have been presented as the measures of financial
performance. Adoption of these measures results in non-underlying
items being excluded to enable a meaningful evaluation of the
performance of the Group compared to prior periods.
These alternative measures are entirely consistent with how the
Board monitors the financial performance of the Group and the
underlying (loss) / profit before taxation is the basis of
performance targets for incentive plans for the Executive Directors
and senior management team.
Non-underlying items consist of non-recurring costs, share based
payments and Commercial Agreement amortisation. Non-recurring costs
are excluded because they are not expected to repeat in future
years. These costs are therefore not included in these alternative
performance measures as they would distort how the performance and
progress of the Group is assessed and evaluated.
Share based payments are subject to volatility and fluctuation
and are excluded from these alternative performance measures as
such changes would again potentially distort the evaluation of the
Group's performance year to year.
Finally, Commercial Agreement amortisation is also excluded from
these alternative performance measures because the Board believes
that exclusion of this enables a better evaluation of the Group's
underlying performance year to year.
Revenue
Revenue for the period was GBP78.3m compared to GBP73.0m for H1
21, representing an increase of 7.2%. In the first quarter of the
year, year on year revenue growth was 5.8% increasing to 8.5%
growth in Q2 with this improving revenue trajectory reflecting the
recovery from the January cyber-attack.
Frames installed volumes reduced by 1.8% versus H1 21 to 94,525
with the impact of the cyber-attack reducing volumes between
January and April although the Group returned to volume growth in
the second quarter of 2%, as it recovered fully from the disruption
this caused. As with the prior year, the revenue growth exceeds the
volume performance as a result of the following:
-- The average frame price increased by 8.9% year on year to
GBP832 (H1 2021: GBP764). The price performance in H1 largely
represents the exit rate of price from 2021. The Group had to delay
implementation of planned list price increase from January to April
and thus the full effect of this will only come through in the
second half results.
-- The project to reduce the Group's finance subsidy costs which
are incurred as part of its consumer finance offering over the last
18 months is now complete. The ongoing expectation is that finance
subsidy costs are expected to be minimal as we go forward, whilst
we also strive to ensure that we have a market-leading set of
affordable payment options available to our customers.
-- The average number of frames per order has remained broadly
the same year on year at 4.31 with the Group continuing to drive a
healthy average order size which, alongside the average frame price
growth described above, has resulted in an increase in the average
order value over H1 21 of 7.0% to GBP4,300.
Gross profit
Gross profit was GBP19.4m, a reduction of 17.7% over H1 21. The
Group's gross margin percentage reduced by 748bps to 24.75% versus
H1 21's strong comparative of 32.23%.
This reduced year on year gross margin percentage is despite the
higher average price described above and is a result of the
slightly lower installation volume with the other significant
elements being as follows:
-- Despite the operational disruption on installations and
customer service as a result of the cyber-attack, the Group
achieved order intake growth of 11.7% over H1 21. The Group's order
book increased by 17.7% over H1, representing a closing position
that was 17.6% ahead of the prior period. The cost associated with
driving this growth totals GBP1.7m within gross margin for H1 22
which will unwind as the order book is fitted out in future
periods.
The order intake growth, investment and consequential impact on
gross margin in the period is in contrast to the movement in the
order book in H1 21 which was reduced by 8.3% from its record
opening high levels at the start of 2021 and equated to a GBP0.4m
gross margin benefit in H1 21. These order book changes alone
represent a year on year swing in gross profit of GBP2.1m which is
c.50% of the total year on year reduction in gross profit.
-- Alongside the order book changes described above, H1 22
represented a more normalised cost for lead acquisition costs
versus a comparative in H1 21 that was buoyed by a strong consumer
response following the restart of all selling activities when the
third national COVID lockdown was ended in early 2021. The
consequential rate increase back to these normalised levels
represents a cost of GBP1.8m versus H1 2021 levels across the first
half.
The focus within the sales and marketing teams remains to ensure
that the balance between good conversion, volume, discount levels
and cancellation rates is optimised.
-- Finally, the rising cost push linked to rising input costs
including PVCu profile, glass, installation materials, scaffolding,
fuel and contractor costs represent a year on year rate increase of
GBP5.5m. This is marginally higher than the GBP5.3m benefit of the
increased average frame rate and highlights the pace at which cost
increases have come through this year. The price actions enacted in
April and also into H2 22 are to ensure the Group mitigates this
cost headwind whilst also striving to deliver value to its
customers.
Underlying other operating expenses
Underlying other operating expenses were GBP19.9m which includes
TV investment of GBP0.9m and is an increase of GBP2.1m (11.8%) over
H1 21. Excluding the TV spend, the increase of other operating
expenses was GBP1.2m (6.7%). The key factors behind this increase
are as follows:
-- Wage inflation represents the largest single driver of the
year on year cost increase. The costs of a 3% annual payrise for
most staff have been incurred alongside higher % increases for a
number of colleagues to underpin attraction and retention of people
at all levels of the organisation.
-- Furthermore, commensurate with the Group's strategic
priorities, we have continued to grow our customer service resource
levels and invest in installations capacity in the last 18 months.
The opening of the Milton Keynes depot in August 2021 alongside
increased operational headcount are the other main drivers of the
year on year increase in operating expenses.
-- Finally, the Group continues its ongoing investment in IT,
recruitment and training as key enablers of the Group's strategic
priorities. The ongoing investment in upgrading and implementing
new IT systems is part of the technology roadmap. This has already
delivered benefits including the continuation of operations
throughout the pandemic and critically helped to mitigate the full
potential impact of the cyber-attack in January 2022.
Underlying (loss) / profit before taxation
Underlying (loss) before taxation was GBP(1.4)m versus a profit
in H1 21 of GBP5.1m. This loss is before the non-underlying items
described below.
Non-underlying items
A total of GBP1.4m has been separately treated as non-underlying
items for the year (H1 2021: GBP0.8m). The current period's total
consists of GBP0.9m of non-recurring costs (H1 21: GBP0.1m), a
GBP0.3m share based payment charge (H1 21: GBP0.5m) and GBP0.2m (H1
21: GBP0.2m) of Commercial Agreement (Intangible Asset)
amortisation. The table below shows the full breakdown of these
items:
H1 2022 H1 2021
GBP000 GBP000
-------- --------
Holiday pay accrual (release) (72) (88)
-------- --------
RSA related costs 12 -
-------- --------
Restructuring and operational
costs 96 96
-------- --------
Litigation Costs 23 33
-------- --------
Cyber incident-related costs 945 -
-------- --------
Impairment of right-of-use assets 27 -
-------- --------
Modification of right-of-use assets
and liabilities (112) 12
-------- --------
Total non-recurring costs (note
4) 919 53
-------- --------
Commercial Agreement amortisation 226 226
-------- --------
Equity-settled share based payment
charges 284 487
-------- --------
Total non-underlying items 1,429 766
-------- --------
The holiday pay accrual arose as a result of the impact of the
shutdown of operations and resultant extension of 2020 leave
entitlement which, for some employees, is up to March 2023. The
release in the current reporting period represents a
partial-unwinding of the original accrual booked in 2020 due to the
deferred holiday subsequently taken in the year.
The Group incurred GBP0.1m (H1 21: GBP0.1m) of restructuring and
non-recurring operational costs which reduced the Group's overheads
in some areas. GBP0.9m of separately identifiable cyber
incident-related costs are included in non-recurring costs in
relation to the incremental costs incurred as part of the recovery
from the cyber-attack. Finally, a credit of GBP0.1m has been
recognised in relation to the early termination of leases on six
properties identified as right-of-use assets in the period.
As reported in the last four years, the Commercial Agreement
arose as a result of an agreement entered into in 2018 with Mr M.
Misra which encompassed a five year non-compete agreement and the
provision of services by Mr Misra in support of the continued
recovery of Safestyle. The Group agreed consideration with Mr Misra
subject to the satisfaction of both clear performance conditions by
him over five years and Safestyle's trading performance in
2019.
The non-compete element of the Commercial Agreement was
accounted for as an intangible asset on the basis that it is an
identi able, non-monetary item without physical substance, which is
within the control of the entity and is capable of generating
future economic bene ts for the entity. The intangible asset was
measured based on the fair value of the consideration that the
Group expects to issue under the terms of the agreement and is
being amortised over five years which matches the term of the
non-compete arrangement.
Share based payment charges reduced versus H1 21 with this year
representing a more normalised charge with the prior period higher
due to charges in relation to the Restricted Share Award granted in
October 2020 that vested in June 2021.
The items classified as non-recurring costs in the Consolidated
Income Statement, the share based payment charges and the
amortisation of the intangible asset created as a result of the
Commercial Agreement reached in 2018 have all been excluded from
the underlying (loss) / profit before taxation performance measure
to enable a meaningful evaluation of the performance of the Group
from year to year.
Earnings per share
Basic earnings per share for the period were a loss of (1.5)p
for the period compared to a profit of 2.6p in H1 21. Diluted
earnings per share were a loss of (1.5)p (H1 21: profit of 2.5p).
The basis for these calculations is detailed in note 5.
Net cash and cashflow
The Group has increased its net cash during the period, closing
at GBP13.0m compared to GBP12.1m at the end of 2021. GBP4.5m of the
Group's GBP7.5m facility, being that of the term loan, remains
drawn with the remaining GBP3.0m revolving credit facility undrawn.
The current facility expires in October 2023.
Net cash inflow from operating activities, including the
cashflow impact of non-underlying items, was GBP3.7m (H1 2021:
GBP9.2m). The inflow for the period, although reduced versus the
prior period which reflects the reduction in H1 profits as
described above, reflects the strong operating cashflow model of
the Group. In addition, H1 each year typically contains a timing
benefit within working capital, most notably related to the timing
of quarterly VAT payments.
Partially offsetting this positive profit net cash inflow was
capital investment of GBP0.6m (H1 21: GBP0.2m), representing the
ongoing investment in the Group's infrastructure and systems as
well as some maintenance capex for the manufacturing facility.
Dividends and capital allocation policy
The Board has approved an interim dividend of 0.4p per share (H1
2021: GBPnil) signalling a return to the dividend list for the
first time since 2017 as part of the Group's capital allocation
policy. As reported previously, the Board's policy is to firstly
utilise surplus cash to fund forthcoming strategic initiatives.
Subsequent to that, the policy is to return surplus cash to
shareholders through the restoration of a progressive dividend
followed by buyback programmes and latterly, special dividends in
order to maximise returns to our shareholders.
The return to a dividend signals the Board drawing a line under
the turbulence of the past few years and the intention for a
progressive dividend policy from here. The interim dividend will be
paid on 28 October 2022 to shareholders on the register on 30
September 2022 and will have an ex-dividend date of 29 September
2022.
Rob Neale
Chief Financial Officer
22 September 2022
Consolidated Income Statement
Unaudited Unaudited Audited
Note 6 months 6 months 12 months
ended ended ended
3rd Jul 2022 4th Jul 2021 2nd Jan 2022
GBP000 GBP000 GBP000
Revenue 78,250 72,980 143,251
Cost of sales (58,886) (49,456) (99,496)
Gross profit 19,364 23,524 43,755
Expected credit losses
expensed (348) (269) (362)
Other operating expenses (21,024) (18,335) (35,807)
Operating (loss)
/ profit (2,008) 4,920 7,586
Finance costs 6 (833) (628) (1,623)
------------- ------------- -------------
(Loss) / profit before
taxation (2,841) 4,292 5,963
------------- ------------- -------------
Underlying (loss)
/ profit before taxation
before non-recurring
costs, Commercial
Agreement amortisation
and share based payments (1,412) 5,058 7,613
Non-recurring costs 4 (919) (53) (511)
Commercial Agreement
amortisation (226) (226) (452)
Share based payments (284) (487) (687)
(Loss) / profit before
taxation (2,841) 4,292 5,963
Taxation 807 (729) (1,188)
(Loss) / profit for
the period (2,034) 3,563 4,775
============= ============= =============
Earnings per share
Basic (pence per share) 5 (1.5)p 2.6p 3.5p
Diluted (pence per
share) 5 (1.5)p 2.5p 3.4p
There is no other comprehensive income for the period.
All operations were continuing throughout all periods.
Consolidated Statement of Financial Position
Unaudited Unaudited Audited
Note 6 months 6 months 12 months
ended ended ended
3rd Jul 4th Jul 2021 2nd Jan 2022
2022
GBP000 GBP000 GBP000
Assets
Intangible assets - Trademarks 504 504 504
Intangible assets - Goodwill 20,758 20,758 20,758
Intangible assets - Software 1,103 856 870
Intangible assets - Other 606 1,058 832
Property, plant and equipment 10,589 11,089 10,811
Right-of-use assets 10,578 11,119 11,146
Deferred taxation asset 1,847 1,433 1,053
Non-current assets 45,985 46,817 45,974
Inventories 5,457 4,785 5,298
Trade and other receivables 6,985 5,828 4,880
Cash and cash equivalents 17,327 18,600 16,351
Current assets 29,769 29,213 26,529
Total assets 75,754 76,030 72,503
========== ============= =============
Equity
Called up share capital 1,389 1,384 1,386
Share premium account 89,495 89,495 89,495
Profit and loss account 9,127 9,258 10,893
Common control transaction
reserve (66,527) (66,527) (66,527)
33,484 33,610 35,247
Liabilities
Trade and other payables 7 23,400 23,576 18,052
Lease liabilities 4,332 3,814 4,104
Corporation taxation liabilities 159 177 159
Provision for liabilities
and charges 1,333 1,102 1,274
Current liabilities 29,224 28,669 23,589
Provision for liabilities
and charges 2,219 2,079 2,109
Lease liabilities 6,522 7,479 7,327
Borrowing facility 4,305 4,193 4,231
Non-current liabilities 13,046 13,751 13,667
Total liabilities 42,270 42,420 37,256
Total equity and liabilities 75,754 76,030 72,503
========== ============= =============
Consolidated Statement of Changes in Equity
Share Share Profit Common Total
capital premium and loss control equity
account transaction
reserve
GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 3 January 2021 1,368 89,495 5,347 (66,527) 29,683
Total comprehensive profit
for the period - - 3,563 - 3,563
Transactions with owners
recorded
directly in equity:
Equity settled share based
payment transactions - - 358 - 358
Deferred taxation asset
taken
to reserves - - 6 - 6
Issue of new shares 16 - (16) - -
Balance at 4 July 2021 1,384 89,495 9,258 (66,527) 33,610
------------------ ---------------- ---------- -------------------- ---------------
Total comprehensive profit
for the period - - 1,212 - 1,212
Transactions with owners
recorded
directly in equity:
Issue of new shares 2 - (2) - -
Deferred taxation asset
taken
to reserves - - (2) - (2)
Corporation taxation taken
to reserves - - 98 - 98
Equity settled share based
payment transactions - - 329 - 329
Balance at 2 January 2022 1,386 89,495 10,893 (66,527) 35,247
================== ================ ========== ==================== ===============
Total comprehensive (loss)
for the period - - (2,034) - (2,034)
Transactions with owners recorded
directly in equity:
Issue of new shares 3 - (3) - -
Deferred taxation asset taken
to reserves - - (13) - (13)
Equity settled share based
payment transactions - - 284 - 284
Balance at 3 July 2022 1,389 89,495 9,127 (66,527) 33,484
======= ========= ======== =========== =============
Consolidated Statement of Cash Flows
Unaudited Unaudited Audited
6 months ended 6 months ended 12 months ended
Note 3 Jul 2022 4 Jul 2021 2 Jan 2022
GBP000 GBP000 GBP000
Cash flows from operating activities
(Loss) / profit for the period (2,034) 3,563 4,775
Adjustments for:
Depreciation of plant, property and equipment 699 756 1,473
Depreciation of right-of-use assets 1,851 1,835 3,882
Amortisation of intangible fixed assets 438 426 842
Impairment of right-of-use assets 27 - 122
Modification of right-of-use assets and
liabilities (112) 12 (83)
Finance expense 6 833 628 1,623
IT project impairment - - 14
Equity settled share based payments charge 284 358 687
Taxation (credit) / charge (807) 729 1,188
---------------- ---------------- ----------------
1,179 8,307 14,523
(Increase) in inventories (159) (240) (753)
(Increase) / decrease in trade and other
receivables (2,105) (165) 783
Increase / (decrease) in trade and other
payables 7 5,348 1,647 (3,877)
Increase in provisions 8 262 195
---------------- ---------------- ----------------
3,092 1,504 (3,652)
Other interest (paid) (599) (563) (1,250)
---------------- ---------------- -----------------
Net cash inflow from operating activities 3,672 9,248 9,621
---------------- ---------------- -----------------
Net cash (outflow) from investing activities
Acquisition of property, plant and equipment (477) (197) (809)
Acquisition of intangible fixed assets (445) (377) (424)
Net cash (outflow) from investing activities (922) (574) (1,233)
Cash flows from financing activities
Proceeds from issue of share capital - - -
Payment of lease liabilities (1,774) (1,779) (3,742)
---------------- ---------------- -----------------
Net cash (outflow) from financing activities (1,774) (1,779) (3,742)
Net inflow in cash and cash equivalents 976 6,895 4,646
Cash and cash equivalents at start of period 16,351 11,705 11,705
Cash and cash equivalents at end of period 17,327 18,600 16,351
================ ================ =================
Notes to the interim financial information
1 General information and basis of preparation
The interim financial information for the six months ended 3
July 2022 and for the six months ended 4 July 2021 does not
constitute statutory financial statements and is neither reviewed
nor audited. The comparative figures for the year ended 2 January
2022 are not the Group's consolidated statutory accounts for that
financial year but are extracted from those accounts which have
been reported on by the Group's auditor and delivered to the
Registrar of Companies. The report of the auditor was (i)
unqualified and (ii) did not contain a statement with reference to
Articles 113B of Companies (Jersey) Law 1991
The condensed consolidated interim financial information for the
period ended 3 July 2022 has been prepared in accordance with IAS
34, 'Interim financial reporting' as adopted by the European
Union.
Selected explanatory notes are included to explain events and
transactions that are significant to an understanding of the
changes in financial position and performance of the Group since
the last annual consolidated financial statements as at and for the
year ended 2 January 2022.
The condensed consolidated interim financial information should
be read in conjunction with the annual financial statements for the
year ended 2 January 2022 which have been prepared in accordance
with International Financial Reporting Standards ("IFRS") as
adopted by the European Union.
The accounting policies adopted in the condensed interim
financial information are consistent with those set out in the
financial statements for the year ended 2 January 2022.
Period-end
These interim financial statements are presented for the first
26 weeks of the financial year which ended on 3 July 2022 for the
current year and ended on the 4 July 2021 for the first half
comparative period of the prior year. All references made
throughout these accounts for H1 2022 are for the period 3 January
2022 to 3 July 2022. References to H1 2021 are for the period 4
January 2021 to 4 July 2021.
2 Going concern
The financial statements are prepared on a going concern basis
which the Directors believe to be appropriate for the following
reasons.
The Group made a statutory loss of GBP2.0m in the 6 months to 3
July 2022 (June 21: GBP3.6m profit) and had net current assets of
GBP0.5m (June 2021: GBP0.5m). As described in the financial review,
H1 2022's financial performance was significantly impacted by the
consequences of the cyber-attack which caused a delay to the
implementation of a planned January price increase and also reduced
installation volumes during the period when the Group's normal
processes were curtailed. The price increase was implemented in
late April which, alongside a return to normal processing capacity
levels, resulted in installation volume returning to year on year
growth in Q2 with the Group also returning to underlying profit
before taxation in May and June. Despite the loss for the period,
the Group's net cash position improved from GBP12.1m to GBP13.0m as
a result of working capital timing partially offset by the loss for
the year to date.
The banking facilities in place remain in place with a GBP4.5m
term loan and a GBP3.0m revolving credit facility which mature in
October 2023. During 2022, a revised covenant has been agreed with
the facility provider which replaces the minimum EBITDA that was
historically tested on a monthly basis. A springing covenant is now
in place whereby EBITDA is not tested when net cash is positive.
Throughout the period to 3 July 2022, the term loan was fully drawn
whilst the revolving credit facility remained undrawn. This remains
the case at the date of this announcement.
The Directors have prepared forecasts covering the period to
December 2023. The forecasts include a number of assumptions in
relation to sales volume, pricing, margin improvements and overhead
investments. Whilst the Directors believe the assumptions to be
sensible, the operating environment is exposed to a number of risks
which could impact the actual performance achieved in 2022 and
2023. These risks include, but are not limited to, reducing
consumer confidence due to the general economic conditions,
delivering the required levels of order intake as consumers are
impacted by rising inflation and the Group's ability to maintain
margins given the rising input costs. If future trading performance
significantly underperforms the Group's forecasts, this could
impact the ability of the Group to comply with its covenant tests
over the period of the forecasts.
The Directors have considered the Group's strengthened financial
position alongside a number of possible downside scenarios. Even
with scenarios which have modelled significant reductions in
activity, the resultant cash flow forecasts and projections show
that the Group will be able to maintain a net cash position (and
thus headroom) in excess of GBP10m and therefore not trigger the
springing covenants of the borrowing facility. As such, the
Directors have concluded that the risk of the liquidity
requirements of the business exceeding the total quantum of
facilities available remain remote.
Based on the above, the Directors believe that it remains
appropriate to prepare the financial statements on a going concern
basis.
3 Significant accounting policies
Revenue recognition
The Group earns revenues from the design, manufacture, delivery
of, and installation of domestic double-glazed replacement windows
and doors.
There are five main steps followed for revenue recognition:
- Identifying the contract with a customer
- Identifying the performance obligations
- Determining the transaction price
- Allocating the transaction price to the performance obligations; and
- Recognising revenue when or as an entity satisfied performance obligations.
The various stages of the performance obligations are the
design, manufacture, delivery of and installation of domestic
double-glazed replacement windows and doors.
In applying the principle of recognising revenue related to
satisfaction of performance obligations under IFRS 15, the Group
considers that the final end product is dependent upon a number of
services in the process that may be capable of distinct
identifiable performance obligations. However, where obligations
are not separately identifiable, in terms of a customer being
unable to enjoy the benefit in isolation, the standard allows for
these to be combined. The Group considers that in the context of
the contracts held these are not distinct. As such the performance
obligations are treated as one combined performance obligation and
revenue is recognised in full, at a point in time, being on
completion of the installation. Revenue is shown net of discounts,
sales returns, charges for the provision of consumer credit and VAT
and other sales related taxes. Revenue is measured based on the
consideration specified in a contract with a customer.
There is no identifiable amount included in the final price for
a warranty, as the Group provides a guarantee on all
installations.
Payments received in advance are held within other creditors as
a contract liability. The final payment is due on installation.
A survey fee is paid at the point of agreeing the contract and
the customer has up to 14 days, defined in the contract to change
their minds. If the customer changes their mind after this cooling
off period, the Group has the right to retain this survey fee and
as such revenue for this is recognised at the point in time that
this becomes non-refundable.
In addition to the above, the Group recognises revenue from the
sale of materials for recycling. The revenue is recognised when the
materials are collected by the recycling company which represents
the completion of the performance obligation. The Group has
determined that this revenue is derived from its ordinary
activities and as such this balance is recognised within
revenue.
Non-recurring items
Items that are either material because of their nature,
non-recurring or whose significance is sufficient to warrant
separate disclosure and identification within the consolidated
financial statements are referred to as non-recurring items. The
separate reporting of non-recurring items is important to provide
an understanding of the Group's underlying performance.
4 Non-recurring costs
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
3 July 2022 4 July 2021 3 January
2022
Non-recurring costs consist
of the following: GBP000 GBP000 GBP000
Holiday pay accrual (release) (72) (88) (79)
RSA related costs 12 - 147
Restructuring and operational
costs 96 96 300
Litigation costs 23 33 90
Cyber incident-related 945 - -
costs
Impairment of right-of-use
assets 27 - 122
Modification of right-of-use
assets and liabilities (112) 12 (83)
IT project impairment - - 14
919 53 511
------------ ------------ ----------
The holiday pay accrual arose as a result of the impact of the
shutdown of operations and resultant extension of 2020 leave
entitlement which, for some employees, is up to March 2023. The
release in the current reporting period represents a
partial-unwinding of the original accrual booked in 2020 due to the
deferred holiday subsequently taken in the year.
RSA related costs are the employer related taxes associated with
the issue of Restricted Share Award scheme during the year.
Restructuring and operational costs are expenses incurred,
including redundancy payments, as a result of changes being made to
reduce the cost structure to the business.
Litigation costs are mainly expenses incurred as a result of an
ongoing legal dispute between the Group and an ex-agent. These
costs are predominantly legal advisor's fees.
Cyber incident-related costs are in relation to the separately
identifiable incremental costs incurred as part of the recovery
from the cyber-attack.
Impairment of right-of-use assets relate to the closure of the
properties identified as assets under IFRS 16.
Modification of right-of-use assets and liabilities relate to
the closure of the properties identified as right-of-use assets
during the period.
IT project impairment charge represented the impairment of a
capital investment made in a new electronic survey system that was
stopped following the results of field trials.
For further detail on the 2021 non-recurring charges, please
refer to the 2021 Annual Report.
5 Earnings per share
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
3 July 2022 4 July 2021 2 January
2022
Basic (loss) / profit
per share (pence) (1.5)p 2.6p 3.5p
Diluted (loss) / profit
per share (pence) (1.5)p 2.5p 3.4p
a) Basic earnings per share
The calculation of basic earnings per share has been based on the
following profit attributable to ordinary shareholders and weighted-average
number of shares outstanding.
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
3 July 2022 4 July 2021 2 January
2022
GBP000 GBP000 GBP000
(Loss) / profit attributable
to ordinary shareholders (2,034) 3,563 4,775
=============== =============== ==============
Weighted-average number
of ordinary shares (basic)
No of shares No of shares No of shares
'000 '000 '000
In issue during the period 138,628 136,946 137,753
=============== =============== ==============
b) Diluted earnings per share
The calculation of diluted earnings per share has been based on
the following profit attributable to ordinary shareholders and
weighted-average number of ordinary shares outstanding after
adjustment for the effects of all dilutive potential ordinary
shares.
Unaudited Audited
6 months 12 months
ended ended
4 July 2021 2 January
2022
GBP000 GBP000
Profit attributable to
ordinary shareholders 3,563 4,775
============= =============
No of shares No of shares
'000 '000
Weighted-average number
of ordinary shares (basic) 136,946 137,753
Effect of conversion
of share options and
share consideration 5,808 3,589
Weighted-average number
of ordinary shares (diluted)
at period end 142,754 141,342
============= =============
The loss per ordinary share and diluted loss per share for H1
2022 are equal because share options are only included in the
calculation of diluted earnings per share if their issue would
decrease the net profit per share.
6 Finance costs
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
3 July 2022 4 July 2021 2 January
2022
GBP000 GBP000 GBP000
On borrowing costs 327 287 593
Unwind of discount on
provisions 161 - 269
On lease liabilities 345 341 761
833 628 1,623
------------ ------------ -----------
7 Trade and other payables
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
3 July 2022 4 July 2021 2 January
2022
GBP000 GBP000 GBP000
Trade payables 9,112 6,500 7,118
Other taxation and social
security costs 4,465 7,023 3,169
Other creditors and deferred
income 5,901 5,088 4,747
Accruals 3,922 4,965 3,018
23,400 23,576 18,052
------------ ------------ -----------
Trade payables represents the total amounts payable by Safestyle
as part of normal business operations.
Other taxation and social security costs have reduced versus 4
July 2021 as a result of the repayment of the VAT deferral scheme
to HMRC highlighted in the 2021 Annual Report.
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END
IR UAUNRUNUKUAR
(END) Dow Jones Newswires
September 22, 2022 02:00 ET (06:00 GMT)
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