TIDMSFE
RNS Number : 6809M
Safestyle UK PLC
23 September 2021
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.
23 September 2021
Safestyle UK plc
("Safestyle" or the "Group")
Interim Results 2021
Strong first half driven by improved gross margins and continued
progress made against our strategic priorities
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 4 July 2021.
Financial and operational highlights
H1 21 v H1 21 v
H1 2021 H1 2020 H1 2019 20 % change 19 % change
Revenue (GBPm) 73.0 42.1 64.4 73.4% 13.3%
-------- -------- -------- ------------- -------------
Gross profit (GBPm) 23.5 9.7 16.6 141.7% 41.4%
-------- -------- -------- ------------- -------------
Gross margin % 32.23% 23.13% 25.84% 910bps 639bps
-------- -------- -------- ------------- -------------
Underlying profit / (loss)
before taxation(1) (GBPm) 5.1 (5.1) (0.8) n/a n/a
-------- -------- -------- ------------- -------------
Non-underlying items(2)
(GBPm) (0.8) (0.5) (1.6) (47.3%) 53.5%
-------- -------- -------- ------------- -------------
Profit / (Loss) before
taxation (GBPm) 4.3 (5.6) (2.5) n/a n/a
-------- -------- -------- ------------- -------------
EPS - Basic (pence) 3.0p (5.0p) (2.8p) n/a n/a
-------- -------- -------- ------------- -------------
Net cash / (debt)(3) (GBPm) 14.4 6.0 (0.6)
-------- -------- -------- ------------- -------------
For the purposes of this announcement, where appropriate we have
included comparisons of the Group's financial and operating
performance for H1 2020 and also H1 2019 with the latter, in many
cases, a more meaningful comparative being prior to the disruption
of the COVID-19 pandemic in 2020.
1) Underlying profit / (loss) before taxation is defined as reported
profit / (loss) 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.
2) Non-underlying items consist of non-recurring items, share-based
payments and the Commercial Agreement amortisation.
3) Net cash / (debt) 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.
Financial headlines
-- The Group's underlying profit before taxation of GBP5.1m
represents the strongest financial performance of the business
since H2 2017 and a GBP10.4m turnaround versus H2 2018. This was
driven by a recovery in volume and improvements in gross margin
alongside a transformation agenda.
-- The net cash position of the business has strengthened to
GBP14.4m versus GBP6.0m at the end of H1 2020 which included the
support received from shareholders in May 2020. Based on this and
current expectations for 2022, the Board will engage with
shareholders in Q4 to discuss its cash allocation policy. Clearly
this will be in the context of any other investment
opportunities.
-- Revenue growth of 13.3% versus H1 2019 demonstrates the
Group's execution of its Turnaround Plan from 2018.
-- Early anticipation of cost inflation, a benign market
combined with the impact of strategic initiatives delivered a
639bps improvement in gross margin versus H1 2019.
Operational headlines
-- The COVID pandemic continued to impact operations in H1 2021
and our priority remained the safety of our staff and customers
throughout the period. Managers and staff have shown huge
flexibility and resilience as we have sustained our commercial
operations.
-- Despite the sustained turbulence, continued progress was made
against our core strategies, including brand development, consumer
finance costs, revenue management, compliance and
sustainability.
-- A 14(th) installation depot was recently opened in Milton
Keynes. This investment improves operational coverage, reduces
travelling time and will help drive the productivity of our fitting
teams.
-- Order book at the end of H1 was 9.6% ahead of H1 2020's
position and 65.7% ahead of the closing position at the end of H1
2019.
-- The Group has achieved a 10.9% reduction in its CO(2) per
frames installed metric versus 2020. 95% of the waste generated
from the Group's operations, which includes the removal of old
product from customers' homes, was recycled. Several initiatives
are underway which are expected to further reduce emissions and
increase this recycling % in H2.
-- Customer service provision has remained a challenge due to
the broad range of disruption experienced, most notably labour
availability.
Outlook
-- Continued operational challenges are anticipated for the
remainder of the year, particularly potential supply chain
disruption and resource shortages in critical skilled labour
pools.
-- The business will take prompt action to anticipate further
cost pressures during H2, including raw materials and labour cost
increases.
-- Demand has normalised over the summer versus very high levels
in February to April as other channels for consumer spending
re-opened. However, household savings remain at historic highs and
we will maintain a balance between order intake with installations
capacity to continue to optimise margins.
-- Like many companies, the Group is focused on recovering and
improving its customer service levels, a priority aligned with our
pre-pandemic strategic focus on transforming our customer
experience.
-- Trading in July and August has continued to be as expected
notwithstanding the operational challenges we continue to
experience. H2 will see continued focus on delivering and embedding
our long term strategic priorities. Faced with this sustained
uncertainty, the Board expects performance for the full 2021 year
to be in line with current expectations.
Commenting on the results, Mike Gallacher, CEO said:
"The business faced continued operational disruption during H1
and I am proud of the flexibility and resilience of all our staff
in sustaining our operations while ensuring the safety of our
customers and our people.
The momentum we built on return from the first lockdown was
sustained into H1 2021 resulting in strong revenue growth versus
2019 and an order book 65.7% higher than at the end of H1 2019.
This performance has underpinned our ability to deliver a rapid
recovery in profitability and a further strengthening of our
balance sheet.
Despite the continuing challenges of managing the disruption
caused by the pandemic we have continued to make progress on a
number of our strategic priorities. Our aim remains to build long
term value for shareholders by modernising the business and hence
building the foundations for sustained long term growth."
A webinar for analysts and investors for the 2021 Interim
Results will be held today at 9.00 am. If you would like to join,
please contact FTI Consulting at safestyle@fticonsulting.com or
using the details below in order to access the registration
details.
Enquiries:
Safestyle UK plc via FTI Consulting
Mike Gallacher, Chief Executive Officer
Rob Neale, Chief Financial Officer
Zeus Capital (Nominated Adviser & Joint Broker) Tel: 0203
Dan Bate /Dan Harris/ Dominic King 829 5000
Liberum Capital Limited (Joint Broker) Tel: 0203
Neil Patel / Jamie Richards 100 2100
FTI Consulting (Financial PR) Tel: 0203
Alex Beagley / James Styles / Sam Macpherson 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
During the first half of 2021 our focus remained on ensuring the
safety of staff and customers while endeavouring to sustain our
business operations. Clearly in some areas this proved impossible
at times and both Door Canvass and our Sales teams were impacted
heavily in Q1, whilst attendance and customer availability saw
sustained operational challenges impacting all functions within the
business. I would like to thank all our staff and agents for their
flexibility and resilience through this period, following on from
the challenges of 2020.
Summary of Performance
Our H1 performance has further strengthened the financial
position of the Group with GBP14.4m of net cash at the end of the
first half, an increase of GBP6.8m since the year-end and more than
double the H1 2020 position.
Our H1 revenues grew 13.3% versus H1 2019 and gross margin
increased by 639bps to 32.2% which demonstrates our focus on margin
development. We have experienced unprecedented levels of cost
inflation for materials and resources, most notably due to
constraints on installation capacity, predominantly in skilled
installation and service engineers. Labour shortages in this area
will likely continue and offer a strategic opportunity to
differentiate ourselves positively in both the retention,
development and recruitment of skilled contractors. Our margin
improvement activity anticipated the cost increases we are now
experiencing and we will continue to take proactive action as
necessary to protect our margins in H2.
We continued to invest behind our strategic priorities, notably
customer service resource levels and our installation network in H1
and underlying other operating expenses for the first half were
GBP17.8m, similar to H2 2020 levels.
The Group's underlying profit before taxation was GBP5.1m, a
GBP10.2m improvement versus the H1 2020 loss of GBP(5.1)m and a
GBP5.9m improvement versus H1 2019's loss of GBP(0.8)m.
Trading and Operational Update
Order intake: Our sales and canvass activities were severely
impacted during Q1 as a result of the UK's third COVID lockdown.
Restrictions began to subside in February and order intake
performed well into early Q2. This enabled the Group to replenish
the order book that had been partly utilised in Q1, when our sales
were severely restricted but installation operations continued.
Order intake levels slowed in May as a result of both the normal
seasonal trends and the impact of the reopening of other sectors of
the UK economy. Costs of order acquisition also increased versus
the very low levels seen in the first four months of the year and
we do not anticipate that these extraordinarily low costs will be
replicated in H2. The order book at the end of H1 was 9.6% ahead of
H1 2020's position and 65.7% ahead of the closing position at the
end of H1 2019. This will continue to support momentum into the
second half of the year.
Operations: We have continued to manage the broad range of
operational challenges that emerged as the business restarted
operations last year. These challenges have encompassed staff
absences due to isolations, supply chain interruptions, material
shortages and critical skill shortages.
Our strategic work on improving our customer experience has
partly mitigated the impact of these challenges and will remain a
priority for the business into 2022 and beyond. The scope of work
in this area has included training, enhanced staffing levels and
new system development.
As reported earlier in the year, we opened our 13(th) depot in
Nottingham in December 2020 and we have recently opened our 14(th)
depot in Milton Keynes. This investment improves our operational
coverage, reduces travelling time and hence will help drive the
productivity of our fitting teams. Concurrently, significant
progress has been made in improving our offering for installers
faced with the national shortage of skilled labour in this
area.
The Group is navigating these challenges while driving long term
changes and I am pleased that we have not seen disruption so far
this year at levels that are in any way comparable to those we
experienced in August and September 2020. The collaboration between
our people and those of our key partners combined with our scale
have proven to be real advantages in ensuring very high levels of
supply continuity which have in turn enabled us to maintain good
levels of fulfilment with our customers.
Strategic Progress
Despite the management challenges of operating through a period
of sustained turbulence we continue to make good progress on our
strategic priorities, modernising our sales force and our Safestyle
brand, establishing a competitive advantage in digital marketing,
embedding compliance and delivering on our sustainability
targets.
The work we have done to date on improving our customer
experience has undoubtedly mitigated the impact of the operational
turbulence outlined above but these challenges will continue during
H2. This has required short term investment with the aim of exiting
2021 having recovered service levels to our pre pandemic
standards.
Outlook
Looking ahead, the Board remains cognisant of the risk of
further disruption to operations if infection rates accelerate in
the Autumn, up to and including the risk of a further lockdown.
Certainly the legacy issues of supply chain disruption and
inflation will continue to impact the business and we will take
prompt action to protect margins as we have demonstrated throughout
H1. It is likely that the business and the wider industry will
continue to be constrained by the shortage of available skilled
labour.
Despite this background of uncertainty, the Board is confident
in the progress the Group has made to build a sustainable long term
business, that leverages our scale advantage in the UK. This
confidence is underpinned by the financial strength of the business
following the execution of our 2018/19 Turnaround Plan, the
subsequent recovery from the Covid pandemic and the continued
demand in the RMI market. Despite our clear national market
leadership position, our market share remains small and this
represents significant potential for future growth.
The Board intends to carefully consider its cash allocation
policy during Q4. Clearly sustained progress offers the possibility
of a return to a progressive shareholder distribution policy, but
due consideration will also be given to any strategic investment
opportunities that may also arise.
In summary, the business continues to improve its financial
performance and modernise while navigating the significant
operational challenges associated with the pandemic. Whilst
uncertainty remains for H2 the fundamentals of the business
continue to improve. Consequently, the Board expects performance
for the full 2021 year to be in line with current expectations and
believes that we are well placed to sustain our trajectory of
improvement in 2022 and beyond.
Mike Gallacher
Chief Executive Officer
23 September 2021
Financial Review
H1 21 H1 21
H1 2021 H1 2020 vs 20 H1 2019 vs 19
GBP000 GBP000 % change GBP000 % change
Revenue 72,980 42,082 73.4% 64,413 13.3%
--------- --------- ---------- --------- ----------
Cost of sales (49,456) (32,349) (52.9%) (47,771) (3.5%)
--------- --------- ---------- --------- ----------
Gross Profit 23,524 9,733 141.7% 16,642 41.4%
--------- --------- ---------- --------- ----------
Underlying other operating
expenses(1) (17,838) (14,207) (25.6%) (16,745) (6.5%)
--------- --------- ---------- --------- ----------
Underlying operating profit
/ (loss) 5,686 (4,474) n /a (103) n/a
--------- --------- ---------- --------- ----------
Finance Income - - n/a 1 n/a
--------- --------- ---------- --------- ----------
Finance Costs (628) (619) (1.5%) (728) 13.7%
--------- --------- ---------- --------- ----------
Underlying profit / (loss)
before taxation(2) 5,058 (5,093) n/a (830) n/a
--------- --------- ---------- --------- ----------
Non-underlying items(3) (766) (520) (47.3%) (1,649) 53.5%
--------- --------- ---------- --------- ----------
Profit / (loss) before taxation 4,292 (5,613) n/a (2,479) n/a
--------- --------- ---------- --------- ----------
Taxation (729) 622 170
--------- --------- ---------- --------- ----------
Profit / (loss) for the
period 3,563 (4,991) (2,309)
--------- --------- ---------- --------- ----------
Basic EPS (pence per share) 3.0p (5.0p) (2.8p)
--------- --------- ---------- --------- ----------
Diluted EPS (pence per share) 2.9p (5.0p) (2.8p)
--------- --------- ---------- --------- ----------
Cash and cash equivalents 18,600 10,120 5,374
--------- --------- ---------- --------- ----------
Borrowings (4,193) (4,095) (6,016)
--------- --------- ---------- --------- ----------
Net cash / (debt)(4) 14,407 6,025 (642)
--------- --------- ---------- --------- ----------
H1 21 H1 21
v 20 v 19
KPIs H1 2021 H1 2020 change H1 2019 change
Gross margin %(5) 32.23% 23.13% 910bps 25.84% 639bps
-------- -------- -------- -------- --------
Average Order Value (GBP
inc VAT) 4,020 3,440 16.9% 3,304 21.7%
-------- -------- -------- -------- --------
Average Frame Price (GBP
ex VAT) 764 688 11.0% 669 14.2%
-------- -------- -------- -------- --------
Frames installed - units 96,241 62,697 53.5% 98,966 (2.8%)
-------- -------- -------- -------- --------
Orders installed 21,958 15,054 45.9% 24,029 (8.6%)
-------- -------- -------- -------- --------
Frames per order 4.38 4.16 5.3% 4.12 6.3%
-------- -------- -------- -------- --------
H1 2021 represents a further improvement on the Group's H2 2020
financial performance. The Group has more than mitigated
inflationary pressures and has materially improved gross margins
through a number of margin-enhancing initiatives. The Group has
also invested in customer service resource and installation
capacity as it continues to recover from the impact of 2020 and
early 2021 operational turbulence caused by the pandemic.
In the first half of the year, the Group made an underlying
profit before taxation(2) of GBP5.1m, representing the most
profitable six month period for the Group since 2017. Net cash(4)
has also continued to increase during the first half of the year to
GBP14.4m at the end of the period, an increase of GBP6.8m versus
year-end.
This Financial Review now expands on the changes in the
financial measures and KPIs of the business and will draw attention
to how the performance compares to both H1 2020 and also H1 2019
which is, in many cases, a more meaningful comparative being prior
to the disruption of the COVID-19 pandemic in 2020.
Financial and KPI headlines
-- Revenue increased to GBP73.0m, growth of 73.4% versus the
COVID-impacted H1 2020 and by 13.3% versus H1 2019.
-- Frames installed increased by 53.5% versus H1 2020 to 96,241
with the prior year level adversely impacted by the first half
COVID disruption in 2020. Versus H1 2019, frames installed reduced
by 2.8% with the Group optimising the balance between utilisation
of its available installation capacity alongside delivering
material improvements in its margins.
-- The Group has continued to improve average frame price,
achieving an 11.0% increase versus H1 2020 which is attributable to
both favourable market conditions and discount management. H igher
average-priced composite guard doors were 7.4% of frames installed
in the first half versus 7.7% in H1 2020.
-- Alongside the average price improvement, the majority of the
benefit as a result of changes made to the Group's consumer finance
portfolio in the latter part of 2020 are now being realised which
has resulted in a reduction in finance subsidy costs of GBP1.1m
versus H1 2020 and GBP1.8m versus H1 2019.
-- Gross profit increased by 141.7% and 41.4% versus H1 2020 and
H1 2019 respectively to GBP23.5m. Gross margin percentage increased
by 910bps versus H1 2020 and by 639bps versus H1 2019. This is
predominantly attributable to the improvement in average frame
price, the reduction in finance subsidy costs and lower lead
generation costs which are a result of both internally-driven
efficiencies and favourable market conditions.
-- Underlying other operating expenses(1) for the period
increased by GBP3.63m (25.6%) versus H1 2020. The prior period was
materially reduced as a result of a GBP1.1m furlough reclaim
benefit as part of the Government's Coronavirus Job Retention
Scheme ('CJRS') and reduced levels of operating activity during the
lockdown period. In the last 12 months, the Group has invested in
its installation capacity, customer service resource and IT with
the increase versus H1 2019 of GBP1.1m (6.5%) being a clearer
measure of the impact of these changes.
-- Finance costs marginally increased versus H1 2020 with
reduced borrowing costs due to lower utilisation (and thus lower
fees) in relation to the GBP3m revolving credit facility. These
were offset by higher finance costs on lease liabilities following
the renewal of the Group's installation van fleet and the
consequential higher interest expense charged at the beginning of
the lease under IFRS 16.
-- Underlying profit / (loss) before taxation was a profit of
GBP5.1m for the period (H1 2020: loss of GBP(5.1)m) with the
recovery in volume and improvements in gross margin described above
driving the swing from loss to profitability.
-- Non-underlying items(3) were GBP0.8m for the period (H1 2020:
GBP0.5m) and therefore reported profit / (loss) before taxation was
GBP4.3m versus a loss of GBP(5.6)m in H1 2020.
-- Net cash improved to GBP14.4m versus GBP7.6m at the end of
last year. The improved cash position is directly related to the
profitability of the first half of the year. The GBP2.5m VAT
deferral reported at the end of the year has reduced to GBP1.7m at
the end of H1 and will be fully repaid by January 2022. With this
exception, working capital is being controlled normally and the
Group is generating sustained, positive net cash inflows.
(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 profit / (loss) 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 / (debt) 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 three years, the Group has encountered
a series of unprecedented and unusual challenges. These gave rise
to a number of significant non-underlying items in 2018 and
consequential items continued into 2019 as the Group addressed the
impact of these challenges, predominantly as part of its Turnaround
Plan. The impact of COVID-19 in 2020 has also given rise to a
material non-underlying item in the form of a holiday pay accrual
which is described in detail below.
Consequently, adjusted measures of underlying other operating
expenses and underlying profit / (loss) before taxation have been
presented as the primary 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 profit / (loss) 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. A full breakdown of
these items is shown below. Non-recurring costs are excluded
because they are not expected to repeat in future years. These
costs are therefore not included in the Group's primary 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 the primary 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
the primary 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 H1 2021 was GBP73.0m compared to GBP42.1m for H1
2020, representing an increase of 73.4% with the prior period
comparative impacted by the cessation of installation activity
between late March and the end of May 2020. Revenue versus H1 2019
represents year on year growth of 13.3% and this increase is more
representative of the Group's improving revenue performance.
Frames installed volume improved by 53.5% versus H1 2020 to
96,241 frames, which is 2.8% lower than H1 2019. The revenue
improvement exceeds this volume performance for both comparative
periods as a result of improvements in the following areas:
-- The average frame price increased by 11.0% to GBP764 (H1
2020: GBP688, H1 2019: GBP669). The impact of modest list price
increases in H2 2020 were realised alongside a larger benefit
coming from the continued drive to reduce discount levels and
optimise margins alongside volume.
-- The improvement in the average frame price was also despite a
reduced mix of higher average-priced composite guard doors which
reduced to 7.4% of installed volumes (H1 2020: 7.7%, H1 2019:
10.0%).
-- Alongside the above favourable average frame price
improvements, the results of the Group's project to reduce finance
subsidy costs incurred as part of its consumer finance offering,
which was launched in H2 2020, are now being almost fully realised
in this reporting period. These reductions follow changes to our
promotional finance portfolio in late 2020 which have generated a
GBP1.1m benefit in the first half of the year versus H1 2020 and a
GBP1.7m benefit versus more comparable volumes in H1 2019.
Following a comprehensive re-tender process with both existing
and potential new partners earlier this year, we expect the
residual subsidy costs to reduce slightly in H2 2021. The cost of
providing market-leading consumer finance products as a means of
payment is now expected to be a minimal net cost to the Group in
the future.
-- The metric of the average number of frames per order has also
increased to 4.38 in the first half of the year, which represents
an increase of 5.3% and 6.3% versus H1 2020 and H1 2019
respectively. This is a result of the Group driving a higher order
size and this higher frame count alongside the average frame price
growth described above has resulted in an increase in the average
order value versus H1 2020 of 16.9% to GBP4,020. Improvements in
these metrics have underpinned the improvements in the Group's
margins.
Gross profit
Gross profit increased by 141.7% to GBP23.5m versus H1 2020 and
by 41.4% versus H2 2019. The Group's gross margin percentage
improved significantly by 910bps to 32.2% versus H1 2020 of 23.1%.
This represents a further increase on the improved gross margin
percentage for the second half of 2020 of 26.3%.
The combination of the increase in installation volumes versus
H1 2020 alongside the average price and finance subsidy reductions
described above were all significant contributors to the growth in
gross profit and the improvement in the Group's gross margin
percentage in H1 versus the preceding period. The additional
components behind the improving trends were as follows:
-- The Group began the year with an order book that was 83%
ahead of the prior year which proved invaluable to insulating the
Group from selling restrictions at the start of the year as part of
another national lockdown in response to the COVID pandemic. At the
end of the first half of the year, the order book remained ahead of
the H1 2020 closing order book by 9.6%.
Despite remaining at these healthy levels, the Group has
utilised some of the record order book built in the latter part of
last year which has resulted in an 8.3% reduction in the order book
versus the year's opening position.
-- The third national lockdown in the UK restricted the Group's
selling and marketing activities in January. Once the Group was
able to restart activities from February this year, the Group again
experienced a strong consumer response that was similar to that
experienced in H2 2020. Lead generation activities were increased
across all lead sources and costs per lead remained low when
compared to pre-pandemic levels. As lockdown restrictions lifted in
late April and May, lead costs have increased and are now similar
to pre-pandemic levels.
Alongside the lead generation cost environment described above,
the Group has continued to make strong progress on lead management,
conversion optimisation and sales performance which has reduced
cancellation rates. As a result of all these factors, the cost to
order intake ratio for H1 2021 was 11.9% lower than H1 2020.
-- The improvement in gross profit versus the prior period is
despite a GBP0.7m reclaim / benefit in H1 2020 under the CJRS
scheme to contribute to the costs of the Group's furloughed factory
employees. In H1 2021, the Group made a claim of less than GBP0.1m
during the first few months of the year when it furloughed a small
number of its staff for a short period during the third
lockdown.
Although there has continued to be short-term disruption caused
by COVID-required isolations and illness in 2021, the return to
higher / more normal levels of activity across the period has
driven an improved utilisation of fixed costs included within cost
of sales. This has also contributed to the improvement in the
Group's gross margin percentage.
Underlying other operating expenses
Underlying other operating expenses were GBP17.84m for the first
half, which are the same as H2 2020 levels (GBP17.85m) and
represent an increase of GBP1.1m (6.5%) versus H1 2019, two periods
that are more reasonable comparatives than H1 2020 in terms of the
Group's activity levels. The key factors behind the increase versus
H1 2019 are as follows:
-- The Group has invested in both its customer service resource
levels and its installations capacity in H2 2020 and into H1 2021.
In H2 2020, the Group re-opened its Crawley depot and also opened a
new depot in Nottingham just prior to the end of 2020. In
conjunction with this increased depot footprint, further resources
have been added to manage the operation.
-- In addition to the above, the Group has increased investment
in IT licensing and infrastructure with the rollout of new
technology including further improvements in network security and
resilience alongside the implementation of Office 365 and Microsoft
Teams which have facilitated the continuation of operations
throughout the last 18 months within the context of the COVID
pandemic.
Underlying other operating expenses increased by GBP3.6m (25.6%)
versus H1 2020. Whilst taking into account the factors detailed
above, this increase is predominantly a result of the H1 2020
comparative being reduced when the business was, for over 2 months,
in full lockdown and thus activity levels and associated operating
costs were much reduced.
In addition to this activity-driven variance, H1 2020 included
GBP1.1m received for the Group's CJRS reclaim for furloughed staff
costs which further reduced operating expenses for the first half
of last year. The equivalent for H1 2021 was a claim of GBP0.1m
which was made during the first few months of 2021 when the Group
furloughed some of its staff for a short period during the third
national lockdown.
Underlying profit / (loss) before taxation
Underlying profit / (loss) before taxation was GBP5.1m versus a
loss in H1 2020 of GBP(5.1)m and a loss of GBP(0.8)m for H1 2019.
This loss is before the non-underlying items described below.
Non-underlying items
A total of GBP0.8m has been separately treated as non-underlying
items for the year (H1 2020: GBP0.5m, H1 2019: GBP1.6m). The
current year's total consists of GBP0.1m of non-recurring items (H1
2020: GBP0.1m, H1 2019: GBP1.1m), a GBP0.5m shared based payment
charge (H1 2020: GBP0.2m, H1 2019: GBP0.3m) and GBP0.2m (H1 2020
and H1 2019: GBP0.2m) of Commercial Agreement (Intangible Asset)
amortisation. The table below shows the full breakdown of these
items:
H1 2021 H1 2020 H1 2019
GBP000 GBP000 GBP000
-------- -------- --------
Holiday pay release (88) - -
-------- -------- --------
Restructuring and operational
costs 96 100 571
-------- -------- --------
Litigation Costs 33 - -
-------- -------- --------
Impairment of right-of-use assets - - 524
-------- -------- --------
Modification of right-of-use assets 12 36 -
-------- -------- --------
Total non-recurring items (note
4) 53 136 1,095
-------- -------- --------
Commercial Agreement amortisation 226 226 226
-------- -------- --------
Equity-settled share based payment
charges 487 158 328
-------- -------- --------
Total non-underlying items 766 520 1,649
-------- -------- --------
The holiday pay release represents a release for part of an
accrual made at the end of 2020 of GBP0.5m which arose as a result
of the impact of the shutdown of operations and resultant extension
of 2020 leave entitlement into early 2022 which is in line with the
legislation. This increased the level of deferred holiday
entitlement of our people at the end of 2020 which was recognised
as an accrual in 2020 and will reverse in full by early 2023. This
item was excluded from the Group's underlying performance measures
to ensure performance of the business is not skewed by both the
expense in 2020, or its subsequent release in 2021/22.
As reported in the last three 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 predominantly increased versus H1
2020 as a result of the charges in relation to the Restricted Share
Award granted in October 2020 that vested in June 2021.
The items classified as non-recurring costs on the Consolidated
Income Statement, the share based payment charge 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 profit / (loss) 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 3.0p for the first
half compared to a loss of (5.0)p for H1 2020. Diluted earnings per
share were 2.9p (H1 2020: loss of (5.0)p, H1 2019 loss of (2.8)p).
The basis for these calculations is detailed in note 5.
Net cash and cashflow
As reported previously, the actions taken last year to protect
liquidity and maintain the Group's borrowing facility ensured that
it could invest quickly to facilitate a strong restart to trading
last year. The Group has, since the end of June last year,
increased its net cash by GBP8.4m to GBP14.4m at the end of H1
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.
Net cash inflow / (outflow) from operating activities, including
the cashflow impact of non-underlying items, was GBP9.2m (H1 2020
outflow: GBP(0.1)m). The inflow for the period reflects the
strength of the Group's operating model with trading results
correlating positively with cashflow generation. This net inflow is
after the Group has begun repaying GBP2.5m of VAT that was deferred
as part of the Group's COVID protection measures. This has reduced
to GBP1.7m at the end of the first half and, in line with the
scheme, will be fully repaid by January 2022. With this one
exception, the Group is managing all its working capital outflows
as normal.
Capital expenditure has increased to GBP0.6m in the first half
from GBP0.3m in H1 2020 with the prior year representing a reduced
level of activity similar to operating expenses. The majority of
the expenditure in H1 is in relation to ongoing investment in the
Group's IT infrastructure and systems.
Dividends
The Board does not propose an interim dividend (H1 2020:
GBPnil). However, based on current performance expectations, the
Group would generate further net cash by the end of the year.
Consequently, the Board intends to discuss its cash allocation
policy with shareholders in Q4, with due consideration also given
to any strategic investment opportunities that may arise.
Rob Neale
Chief Financial Officer
23 September 2021
Consolidated Income Statement
Unaudited Unaudited Audited
6 months 12 months
Note 6 months ended ended ended
28th Jun
4th Jul 2021 2020 3rd Jan 2021
GBP000 GBP000 GBP000
Revenue 72,980 42,082 113,191
Cost of sales (49,456) (32,349) (84,732)
Gross profit 23,524 9,733 28,459
Expected credit losses
expensed (269) (665) (890)
Other operating expenses (18,335) (14,062) (32,566)
Operating profit /
(loss) 4,920 (4,994) (4,997)
Finance income - - 1
Finance costs (628) (619) (1,161)
--------------- ---------- -------------
Profit / (loss) before
taxation 4,292 (5,613) (6,157)
--------------- ---------- -------------
Underlying profit /
(loss) before taxation
before non-recurring
costs, Commercial Agreement
amortisation and share
based payments 5,058 (5,093) (4,758)
Non-recurring items 4 (53) (136) (523)
Commercial Agreement
amortisation (226) (226) (452)
Share based payments (487) (158) (424)
Profit / (loss) before
taxation 4,292 (5,613) (6,157)
Taxation (729) 622 1,103
Profit / (loss) for
the period 3,563 (4,991) (5,054)
=============== ========== =============
Earnings per share
Basic (pence per share) 5 3.0p (5.0p) (4.3p)
Diluted (pence per
share) 5 2.9p (5.0p) (4.3p)
There is no other comprehensive income for the period.
All operations were continuing throughout all periods.
Consolidated Statement of Financial Position
Unaudited Unaudited Audited
6 months 6 months 12 months
Note ended ended ended
3 January
4 July 2021 28 June 2020 2021
GBP000 GBP000 GBP000
Assets
Intangible assets - Trademarks 504 504 504
Intangible assets - Goodwill 20,758 20,758 20,758
Intangible assets - Software 856 824 850
Intangible assets - Other 1,058 1,510 1,284
Property, plant and equipment 11,089 12,213 11,475
Right-of-use assets 7 11,119 6,318 8,004
Deferred taxation asset 1,433 1,508 1,980
Non-current assets 46,817 43,635 44,855
Inventories 4,785 3,346 4,545
Trade and other receivables 5,828 6,184 5,663
Cash and cash equivalents 18,600 10,120 11,705
Current assets 29,213 19,650 21,913
Total assets 76,030 63,285 66,768
============ ============= ==========
Equity
Called up share capital 1,384 1,328 1,368
Share premium account 89,495 89,495 89,495
Profit and loss account 9,258 5,176 5,347
Common control transaction
reserve (66,527) (66,527) (66,527)
33,610 29,472 29,683
Liabilities
Trade and other payables 6 23,576 19,990 21,929
Lease liabilities 7 3,814 4,291 2,524
Corporation taxation liabilities 177 - -
Deferred taxation liability - 17 -
Provision for liabilities
and charges 1,102 1,089 1,118
Current liabilities 28,669 25,387 25,571
Provision for liabilities
and charges 2,079 1,888 1,801
Lease liabilities 7 7,479 2,443 5,586
Borrowing facility 4,193 4,095 4,127
Non-current liabilities 13,751 8,426 11,514
Total liabilities 42,420 33,813 37,085
Total equity and liabilities 76,030 63,285 66,768
============ ============= ==========
Consolidated Statement of Changes in Equity
Common
Profit control
Share Share and loss transaction Total
capital premium account reserve equity
GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 29 December 2019 828 81,845 10,009 (66,527) 26,155
Total comprehensive (loss) for
the period - - (4,991) - (4,991)
Transactions with owners recorded
directly in equity:
Issue of new shares 500 8,000 - - 8,500
Transaction costs relating to
the issue of new shares - (350) - - (350)
Equity settled share based payment
transactions - - 158 - 158
--------- --------- ---------- ------------- --------
Balance at 28 June 2020 1,328 89,495 5,176 (66,527) 29,472
--------- --------- ---------- ------------- --------
Total comprehensive (loss) for
the period - - (63) - (63)
Transactions with owners recorded
directly in equity:
Equity settled share based payment
transactions - - 266 - 266
Deferred taxation asset taken
to reserves - - 8 - 8
Issue of shares - Commercial
Agreement 40 - (40) - -
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:
Issue of new shares 16 - (16) - -
Deferred taxation asset taken
to reserves - - 6 - 6
Equity settled share based payment
transactions - - 358 - 358
Balance at 4 July 2021 1,384 89,495 9,258 (66,527) 33,610
========= ========= ========== ============= ========
Consolidated Statement of Cash Flows
Unaudited Unaudited Audited
6 months ended 6 months ended 12 months ended
Note 4 July 2021 28 June 2020 3 January 2021
GBP000 GBP000 GBP000
Cash flows from operating activities
Profit / (loss) for the period 3,563 (4,991) (5,054)
Adjustments for:
Depreciation of plant, property and equipment 754 771 1,559
Depreciation of right-of-use assets 7 1,835 1,939 3,745
Amortisation of intangible fixed assets 426 441 880
Reversal of impairment loss - - (292)
Modification of right-of-use assets and liabilities 7 12 - 5
Finance income - - (1)
Finance expense 678 619 1,161
Equity settled share based payments charge 343 158 424
Taxation charge / (credit) 729 (622) (1,103)
--------------- --------------- ----------------
8,340 (1,685) 1,324
(Increase) in inventories (240) (621) (1,820)
(Increase) in trade and other receivables (165) (2,185) (1,664)
Increase in trade and other payables 6 1,647 4,606 6,545
Increase in provisions 262 96 38
--------------- --------------- ----------------
1,504 1,896 3,099
Other interest (paid) (613) (280) (986)
--------------- --------------- ----------------
Net cash inflow / (outflow) from operating activities 9,231 (69) 3,437
--------------- --------------- ----------------
Net cash (outflow) from investing activities
Acquisition of property, plant and equipment (197) (254) (401)
Interest received - - 1
Acquisition of intangible fixed assets (377) (15) (156)
Net cash (outflow) from investing activities (574) (269) (556)
Cash flows from financing activities
Proceeds from issue of share capital 16 8,150 8,500
Transaction costs relating to the issue of share
capital - - (350)
Proceeds from loans and borrowings - - 2,000
Repayment of borrowings - - (2,000)
Transaction costs relating to loans and borrowings - (9) (39)
Payment of lease liabilities 7 (1,779) (2,118) (3,722)
--------------- --------------- ----------------
Net cash (outflow) / inflow from financing activities (1,763) 6,023 4,389
Net inflow in cash and cash equivalents 6,894 5,685 7,270
Cash and cash equivalents at start of period 11,706 4,435 4,435
Cash and cash equivalents at end of period 18,600 10,120 11,705
=============== =============== ================
Notes to the interim financial information
1 General information and basis of preparation
The interim financial information for the six months ended 4
July 2021 and for the six months ended 28 June 2020 does not
constitute statutory financial statements and is neither reviewed
nor audited. The comparative figures for the year ended 3 January
2021 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 4 July 2021 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 3 January 2021.
The condensed consolidated interim financial information should
be read in conjunction with the annual financial statements for the
period ended 3 January 2021 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 3 January 2021.
Period end
These interim financial statements are presented for the first
26 weeks of the financial year which ended on 4 July 2021 for the
current year and which ended on the 28 June 2020 and 30 June 2019
for the first half comparative periods of the two prior years. All
references made throughout these accounts for H1 2021 are for the
period 4 January 2021 to 4 July 2021. References to H1 2020 are for
the period 30 December 2019 to 28 June 2020 and references to H1
2019 are for the period 30 December 2018 to 30 June 2019.
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 profit of GBP3.6m in the 6 months to
4 July 2021 (June 20: GBP(5.0)m loss) and had net current assets /
(liabilities) of GBP0.5m (June 2020: GBP(5.7)m). As described in
the financial review, the Group returned to profitability in H1
2021, with this being the most profitable 6 month period since
2017. The Group's net cash position strengthened considerably to
GBP14.4m (June 20: GBP6.0m) driven by the cash inflow generated
from operating activities.
The banking facilities in place remain unchanged with a GBP4.5m
term loan and a GBP3.0m revolving credit facility which mature in
October 2023. Throughout the period to 4 July 2021, the term loan
was fully drawn whilst the revolving credit facility remained
undrawn. This remains the case at the date of this announcement.
The finance agreement contains certain covenants, including a
minimum EBITDA to be tested on a cumulative monthly basis. The
covenant headroom has increased significantly to GBP6.1m at the end
of the reporting period.
The Directors have prepared forecasts covering the period to
December 2022. The forecasts includes a number of assumptions in
relation to sales volume, pricing, margin improvements and overhead
investments.
Whilst the Group's trading and cash flow forecasts have been
prepared using current trading assumptions, the operating
environment presents a number of challenges which could negatively
impact the actual performance achieved. Excluding the potential
impact of COVID-19 which is considered below, these risks include,
but are not limited to, achieving forecast levels of order intake,
the impact on customer confidence as a result of general economic
conditions and Brexit and achieving forecast margin improvements.
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.
Despite a level of uncertainty from COVID-19 remaining, the
Directors have considered the Group's strengthened financial
position alongside possible future operational interruption caused
by the UK government's response if the present context worsens
again. The Directors note that the period to June 2021 has been
impacted by a third national lockdown at the start of the year. In
addition, some of the Group's customers and some members of the
workforce have had to isolate at times during the year in
accordance with government policy. Despite these challenges, the
financial position of the Group is the strongest it has been since
2017 and has indeed strengthened during the period despite these
challenges. 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 items
Unaudited Unaudited Audited
6 months 6 months
ended ended 12 months ended
4 July 2021 28 June 2020 3 January 2021
Non-recurring items consist
of the following: GBP000 GBP000 GBP000
Holiday pay (release)
/ accrual (88) - 470
Restructuring and operational
costs 96 100 266
Litigation costs 33 - 74
Modification of right-of-use
assets 12 36 5
Reversal of prior year
impairment of right-of-use
assets - - (292)
53 136 523
------------ ------------- ----------------
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 part-unwinding
of the original accrual booked in 2020 due to the deferred holiday
subsequently taken in H1 2021.
Restructuring and operational costs are expenses incurred,
including redundancy payments, as a result of changes being made to
reduce the cost structure of the business.
Litigations costs are 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.
Modification of right-of-use assets relates to the closure of
properties identified as right-of-use assets during the period.
For further detail on the 2020 non-recurring charges, please
refer to the Group's Annual Report & Accounts 2020.
5 Earnings per share
Unaudited Unaudited Audited
6 months 6 months
ended ended 12 months ended
4 July 2021 28 June 2020 3 January 2021
Profit / (loss) per share
(pence) 3.0 (5.0) (4.3)
Diluted Profit / (loss)
per share (pence) 2.9 (5.0) (4.3)
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 ended 6 months ended 12 months ended
4 July 2021 28 June 2020 3 January 2021
GBP000 GBP000 GBP000
Profit / (loss) attributable
to ordinary shareholders 3,563 (4,991) (5,054)
=============== =============== ================
Weighted-average number
of ordinary shares (basic)
No of shares No of shares No of shares
'000 '000 '000
In issue during the period 117,921 99,753 117,749
=============== =============== ================
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
6 months
ended
4 July 2021
GBP000
Profit attributable to
ordinary shareholders 3,563
=============
No of shares
'000
Weighted-average number
of ordinary shares (basic) 117,921
Effect of conversion of
share options and share
consideration 4,907
Weighted-average number
of ordinary shares (d
iluted) at period end 122,828
=============
The comparatives for H1 20 and FY 20 have not been included on
the basis that the basic and diluted amounts are the same.
6 Trade and other payables
Unaudited Unaudited Audited
6 months 6 months
ended ended 12 months ended
4 July 2021 28 June 2020 3 January 2021
GBP000 GBP000 GBP000
Trade payables 6,500 6,018 7,036
Other taxation and social
security costs 7,023 5,856 5,563
Other c reditors and deferred
income 5,088 2,451 5,025
Accruals 4,965 5,665 4,305
23,576 19,990 21,929
------------ ------------- ----------------
Trade payables represents the total amounts payable by Safestyle
as part of normal business operations.
Other creditors and deferred income have increased versus June
2020 as a result of a higher number of customer deposits and survey
fees received in the first half of the year that are deferred until
the revenue can be recognised.
7 IFRS 16
Motor
Properties Vehicles Equipment Total
GBP000 GBP000 GBP000 GBP000
----------- ---------- ---------- --------
Assets
At 3 January 2021 4,770 3,034 200 8,004
Additions 296 3,503 190 3,989
Lease extensions 533 545 40 1,118
Depreciation (553) (1,198) (84) (1,835)
Modification (134) (23) - (157)
----------- ---------- ---------- --------
At 4 July 2021 4,912 5,861 346 11,119
Liabilities
At 3 January 2021 4,899 2,996 215 8,110
Payment (689) (1,334) (97) (2,120)
Lease extensions 533 545 40 1,118
Interest 169 163 9 341
Modification (129) (16) - (145)
Additions 296 3,503 190 3,989
----------- ---------- ---------- --------
At 4 July 2021 5,079 5,857 357 11,293
Reconciliation of movements of liabilities to cashflows arising
from financing activities
At 3 January 2021 4,899 2,996 215 8,110
Changes from financing cash
flows
Payment of lease liabilities (520) (1,171) (88) (1,779)
----------- ---------- ---------- --------
Total changes from financing
cash flows (520) (1,171) (88) (1,779)
Other changes
New leases 829 4,048 230 5,107
Lease modification (129) (16) - (145)
Interest expense 169 163 9 341
Interest paid (cash) (169) (163) (9) (341)
----------- ---------- ---------- --------
Total liability-related
other changes 700 4,032 230 4,962
At 4 July 2021 5,079 5,857 357 11,293
----------- ---------- ---------- --------
Liabilities classification
Current (<1 year) 1,480 2,206 128 3,814
Long term (>1 year) 3,599 3,651 229 7,479
----------- ---------- ---------- --------
5,079 5,857 357 11,293
The interest expense recognised in the profit and loss statement
is in the table above. No expenses relating to short-term leases
and low value leases has been recognised. The total cash outflow
for leases is GBP2,120k. This comprises the payment of lease
liabilities of GBP1,779k and the interest paid of GBP341k.
The Group has a number of leases within the business including
properties for installation depots and sales branches, vehicles and
plant & equipment. With the exception of short-term leases and
leases of low-value underlying assets, each lease is reflected in
the consolidated statement of financial position as a right-of-use
asset and a lease liability. Leases are either non-cancellable or
may only be cancelled by incurring a substantive termination fee.
For leases relating to properties, the Group must keep those
properties in a good state of repair and return the properties to
their original condition at the end of the lease.
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END
IR BIGDCBBDDGBD
(END) Dow Jones Newswires
September 23, 2021 02:00 ET (06:00 GMT)
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