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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Joules Group Plc | LSE:JOUL | London | Ordinary Share | GB00BZ059357 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 9.22 | 9.40 | 9.60 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMJOUL
RNS Number : 1304J
Joules Group plc
07 September 2016
7 September 2016
Joules Group Plc
("Joules", the "Group")
Annual Results for the 52 weeks ended 29 May 2016
A transformational year for the Joules brand
Highlights:
Hot Features
Premium
2016 2015 Change
52 weeks 53 weeks
Group Revenue GBP131.3m GBP116.4m 12.8%
* comparable 52 week basis(1) 14.2%
Underlying(2) EBITDA GBP13.5m GBP10.5m 28.6%
Underlying Profit Before
Tax(3) GBP7.5m GBP5.3m 41.5%
Basic underlying EPS(4) 6.9p 4.8p 42.9%
-- Group revenue increased 14.2% for the comparable 52 week period
-- Retail sales increased 12.8%1
-- E-commerce sales up 17.3%1 supported by the re-launch of Joules.com in September 2015
-- Store sales up 13.1%1 supported by 10 new store openings
-- Wholesale sales increased 18.3%1 reflecting the growing appeal of the Joules brand in the UK and target
international markets
-- International revenue now represents 10.1% of Group revenue
-- Joules active customer base increased by 33% to 824,000
Colin Porter, Chief Executive, commented:
"FY16 was a transformational year in the development and expansion of the Joules brand which included our successful admission to AIM in May.
We have delivered strong growth across our Retail and Wholesale channels, significantly increasing profitability by effectively leveraging our operating cost base. Our active customer base and international sales have also grown impressively, all of which is great testament to the growing strength and appeal of Joules as a premium lifestyle brand.
Group trading to date in FY17 has been in line with expectations and early feedback on our Spring/Summer 17 ranges from our trade customers has been positive. The Group has a clear growth strategy, underpinned by the consistent quality and design of our products and the skill and commitment of our enterprising team.
The Board remains confident in the brand's long term development in the UK and internationally."
(1) On a comparable 52 week basis, FY15 was a 53 week period.
(2) Underlying excludes exceptional and non-recurring items, primarily related to the costs of admission to AIM and the capital structure in place prior to admission.
(3) Reconciliation to Statutory profit before tax:
GBPmillion FY16 FY15 --------------------- ------ ------ Underlying profit before tax 7.5 5.3 --------------------- ------ ------ IPO transaction (2.7) - costs Shareholder loan note interest (5.6) (4.6) Exceptional asset impairment (0.3) (0.5) Other non-recurring items (0.1) (0.1) --------------------- ------ ------ Statutory profit before tax (1.2) 0.1 --------------------- ------ ------
(4) Earnings Per Share is calculated as: underlying PBT (as described above) less tax at the statutory tax rate, on a pro forma basis i.e. assuming that the number of shares in issue immediately post-IPO were in issue through the entire period.
Enquiries:
Joules Group plc Tel: +44 (0) 1858
435 255
Colin Porter, CEO
Marc Dench, CFO
Peel Hunt LLP, Nominated Tel: +44 (0) 20
Advisor 7418 8900
Dan Webster
Adrian Trimmings
George Sellar
Liberum Capital Limited Tel: +44 (0) 20
3100 2000
John Fishley
Anna Hartropp
Joshua Hughes
Hudson Sandler (Financial Tel: +44 (0) 20
PR) 7796 4133
Alex Brennan
Lucy Wollam
About Joules
Joules is a British, premium lifestyle brand. The Group designs and sells Joules branded clothing, footwear, accessories and homeware and operates a balanced multi-channel proposition which encompasses retail (stores and e-commerce), wholesale and other smaller channels such as country shows and events and licensing.
Joules has 97* UK and ROI stores, a customer database of approximately 2 million* customers, an established e-commerce platform and a fast growing international presence. Joules is also a top selling wholesale brand in major UK retailers such as John Lewis and Next Label and, in 2015, won "Fashion Retail Business of the Year" in the GBP30-GBP100m turnover category at the Drapers Awards.
The Joules brand is at the heart of the business and encompasses values of "time-off", heritage, countryside, Britishness, family and fun. These brand values are reflected in the product designs, which are recognisable for their distinctive colours, prints, detail and quality.
www.joules.com www.joulesgroup.com
*As at 29 May 2016
CHAIRMAN'S STATEMENT
INTRODUCTION
This is our first Annual Report as a public company and it is my great pleasure to welcome new shareholders to Joules. As Chairman for the last three years I have seen Joules grow and develop into the established and much-loved premium lifestyle brand it is today and I am now even more excited about our future prospects than ever before.
This was a significant year for the business with the Company's admission to the AIM market of the London Stock Exchange in May 2016 being a notable highlight. Joules has an authentic British heritage; a strong and distinctive brand; an enviable track record; and significant growth opportunities ahead. We were delighted with the enthusiasm and shareholder support shown during our Initial Public Offering ('IPO'), and we look forward to delivering value for all stakeholders over the coming years.
OUR BUSINESS
The Joules brand is at the heart of our business and encompasses values of 'time-off', heritage, countryside, Britishness, family and fun. These values resonate through all product designs, which are known and loved for their distinctive colours, prints, details and quality. These designs successfully span across a broad range of product categories, from Womenswear to Homeware, demonstrating the brand's relevance to multiple aspects of our customers' lives.
The growth of the business in recent years has been underpinned by significant investment that has been made in the Group's infrastructure, including supply chain, IT and international sales support offices. We are confident that this investment, along with the strength and appeal of the Joules brand, provides a strong foundation for sustainable, long term growth.
OUR TEAM
The skill, creativity and energy of our people continues to be a key factor in driving the business forward and expanding the Joules brand. I would like to take this opportunity to thank everyone in the Joules team across the world for their hard work and dedication throughout what has been such a transformational year for the business.
The success of the business to date has been led by a dynamic and highly talented management team who have a deep understanding of the Joules customer as well as strong commercial and product design expertise. This is underpinned by outstanding enthusiasm, energy and leadership skills.
With our IPO the leadership team was further strengthened with the appointment of two new Non-Executive Directors to our Board. These were David Stead, who has more than 15 years' experience as a director of companies in the UK retail sector, and Jill Little, who has vast relevant experience of the retail industry including driving international expansion. We are already benefiting from their experience and knowledge and look forward to their contributions in the years to come.
FINANCIAL RESULTS & DIVID
Group revenue of GBP131.3 million increased by 12.8% compared to the prior period (53 weeks to 31 May 2015: GBP116.4 million). Against the comparable 52 week prior period, Group revenue increased by 14.2%. This reflects strong growth in both the Retail and Wholesale segments. On a geographic basis, UK sales increased 11.6% to GBP118.1 million and International sales increased 24.7% to GBP13.2 million. International now represents just over 10% of Group revenue. Underlying PBT grew by 41.5% to GBP7.5 million, and Underlying EPS was 6.9 pence per share (FY15: 4.8 pence). Statutory PBT was GBP(1.2)million (FY15: GBP0.1 million), statutory basic (and diluted) EPS are -2.0 pence per share (FY15: -0.5 pence per share). The Chief Executive's Strategic Report and Financial Review that follow provide a more in-depth analysis of the trading performance and financial results of the Group.
The Directors intend to pursue a progressive dividend policy, subject to the availability of sufficient distributable profits and the need to retain sufficient earnings for the future growth of the Group. It is currently intended that, in the absence of unforeseen circumstances, the first dividend following Admission will be paid in respect of the financial year ending May 2017 (FY17).
THE FUTURE
It is too early to assess the specific macro economic effects of the UK's decision to leave the European Union, though it has created an environment of increased uncertainty. I believe that Joules is well placed to meet these uncertainties through a combination of the strength of its brand and products; its target customer demographic; and the historic investment that has been made in infrastructure. The impact on the product cost base, resulting from a weaker GBP, is mitigated through foreign exchange hedging in place throughout FY17 and the first quarter of the subsequent year.
We have a loyal and growing customer base, a committed and enterprising team and a well-invested infrastructure. These qualities give us confidence of successfully delivering the Board's clear strategy for growing the Joules brand in the UK and internationally.
CHIEF EXECUTIVE OFFICER'S STRATEGIC REPORT
I am pleased to present the Group's first Strategic Report to shareholders. This is an exciting time for the Joules brand as we continue to expand both in the UK and internationally, whilst ensuring our focus is as resolute as ever on product quality, design and delighting our customers.
THE JOULES BRAND
Joules is a premium lifestyle brand with an authentic heritage. The brand is distinctive for its values of 'time-off', heritage, countryside, Britishness, family and fun. Our brand and design-led ethos deliver unique product designs, which remain central to Joules' continued success, growth and appeal. Key components of our designs include unwavering focus on quality, colour and surprising details that excite our customers. The brand is also known and loved for its exclusive, in-house designed proprietary prints, which include florals, conversationals, "pops of colour" and screen prints.
OUR BUSINESS MODEL
Joules operates a truly multi-channel business model, which is reflected in the Group's balanced revenue mix by channel. The Joules brand has two key channels to market: retail (including stores, e-commerce and the country shows and events circuit) and wholesale. Other channels include product licensing, which given the strength of the Joules brand, is likely to become increasingly important over time.
Retail
The Group has a fast growing and diverse store portfolio of 97 UK and Republic of Ireland stores (including five concessions) plus three franchise stores. Our stores have a diverse geographic footprint, reflecting the broad appeal of the brand. The Group operates a fully transactional and feature rich website, www.joules.com, through which Joules branded products are sold to customers in the UK and internationally. The Group also operates dedicated, local currency and local language consumer websites for the US and Germany.
Wholesale
Joules branded products are sold through selected wholesale partners, primarily in the UK, North America and Germany, supporting the expansion of the brand. The wholesale channel consists primarily of:
-- "House accounts"- national multi-channel retailers, such as John Lewis and Next Label, which Joules sells to and
manages directly; and
-- "Field accounts"- generally smaller retailers including independents managed directly by Joules or by Joules'
sales agents and, in the US also via a distributor.
OUR GROWTH STRATEGY
We have a clear strategy for the long-term, sustainable development of Joules as a premium lifestyle brand, both in the UK and internationally. This strategy is built on the following key pillars, and is continuously underpinned by a firm focus on product quality and design.
1. INCREASING CUSTOMER VALUE - we intend to continue to grow our customer database, increase the number of active customers and develop the value of the average active customer.
2. UK AND REPUBLIC OF IRELAND (ROI) STORE ROLL-OUT - as part of our multi-channel approach, there remains significant further growth potential for the brand in the UK and ROI. We are targeting a net 10 to 12 new stores per year in the medium term.
3. INTERNATIONAL EXPANSION - the Joules brand and products resonate well in international markets and the new markets provide an opportunity to further leverage the investment in our central creative and commercial teams. Our medium term focus is on North America and Germany.
4. PRODUCT EXTENSION - as a premium lifestyle brand, the Joules product offer naturally extends to meet many of the lifestyle needs of our customers. Joules has had success extending the product offer within existing categories and into new categories and we will continue to expand into new areas that are appropriate for the development of the Joules brand.
STRATEGIC PRIORITIES AND DEVELOPMENTS KPI
------------------------------------------------------------- ------------------
Increasing customer value
* Re-launched the Joules.com website with richer Active customer
content and mobile optimisation numbers(1)
FY14: 529,000
FY15: 621,000
* Successfully up-weighted digital media spend for new FY16: 824,000
customer acquisition and retention
* Increased average customer frequency of transaction
and transaction value
------------------------------------------------------------- ------------------
UK and ROI store roll-out Number of
* Opened 10 new stores during the year and converted stores
one franchise to an owned store FY14: 80
FY15: 91
FY16: 97
* Closed five stores, taking advantage of end of lease
terms where we believe there is a better location Total selling
space (Sq
Ft)
* Opened three 'Regional Shopping Centre' stores - a FY14: 84,500
new location type FY15: 100,000
FY16: 111,000
* New store payback periods continue to be less than 12
months
* All, but one, stores open for more than 12 months
delivered a positive contribution
------------------------------------------------------------- ------------------
International expansion
* US showroom and sales office in New York relocated International
and enlarged as % of total
revenue
FY14: 5.8%
* Nordstom increased the range of wellington boots and FY15: 9.1%
accessories stocked and evolved from online only to FY16: 10.1%
space in 80 stores for Autumn/Winter 16
* Von Maur expanded range within several of their 33
department stores to include women's nightwear and
outerwear for Autumn/Winter 16
* Launching kids apparel and accessories in 50 of
Dillards' 330 department stores for Autumn/Winter 16
------------------------------------------------------------- ------------------
Product extension
* Accessories grew by 27% in the year and is now 13% of
total sales
* Homeware category grew by 33% in the year
* Baby Joule grew by an impressive 42% in the year
following an increased focus on this important
category
------------------------------------------------------------- ------------------
Key Performance Indicators
Our KPIs have been selected based on their link to the successful delivery of our strategy, they are monitored by the Board on a regular basis.
Financial KPIs:
- Revenue by channel - delivering balanced growth across our core-sales channels
- Group gross margin - maintaining overall product level profitability whilst developing the different channels to market
- EBITDA margin - how effectively we are leveraging our cost base and infrastructure
- Return on Capital Employed ('ROCE') - how we are managing working capital and growth capital investments
Revenue growth by channel
Retail - Stores Retail - E-commerce Wholesale FY14: GBP39.3m FY14: GBP23.9m FY14: GBP26.9m FY15: GBP52.4m(2) FY15: GBP25.8m(2) FY15: GBP31.6m(2) FY16: GBP58.2m FY16: GBP 30.1m FY16: GBP37.2m ------------------- -------------------- ------------------- Group gross margin EBITDA margin ROCE(3) FY14: 55.0% FY14: 9.5% FY14: 23.9% FY15: 53.3% FY15: 9.0% FY15: 27.3% FY16: 53.5% FY16: 10.3% FY16: 31.9% ------------------- -------------- --------------
(1) Active customer defined as a customer who is registered on our database and has transacted within the last 12 months. Prior years restated following improvements in data cleansing processes during FY16.
(2) FY15 was a 53 week period
(3) Return on Capital employed ('ROCE') is calculated as Underlying Operating Profit after Tax divided by Average Capital employed (Capital employed defined as Underlying Net Assets adjusted for excess cash balances
BUSINESS REVIEW
A year of excellent progress
Joules has continued to make excellent progress over the past year, including the significant milestone of the Group's admission to the AIM market of the London Stock Exchange towards the end of the financial year. The success of our IPO reflects 27 years of careful development of the Joules brand, our unique multi-channel approach and our consistent focus on our customer. These qualities remained central to our performance in FY16 as the Group made further progress against its strategic objectives and continued to develop and expand as a premium lifestyle brand in the core UK market and also internationally.
Strong multi-channel retail growth
Retail sales, which includes stores, E-commerce and shows, continued to grow impressively by 12.8% during the year (on a consistent 52 week basis) as we expanded Joules' retail coverage across the UK and ROI to 97 stores at the end of the period. This was supported by 10 new store openings and the conversion of one franchise store during the year. During the year we closed five stores taking the opportunity of lease breaks to exit where we believe we could perform better in a different location. We relocated one store, in Harrogate, and expanded our space in two others, increasing total selling space to 111,000 square feet by the end of the year.
FY16 saw us expand into a new store location type with three Regional Shopping Centre locations - Milton Keynes, Meadowhall and Birmingham Grand Central. These stores, which have a larger selling space than average, have proved very popular with our customers - both old and new - and have served to further develop and strengthen our brand as well as deliver attractive financial returns.
Joules is a truly multi-channel brand, with e-commerce revenues representing nearly one third of retail revenue. E-commerce continued to deliver very strong sales growth of 17.3% against the prior year (on a consistent 52 week basis), this growth was supported by the ongoing development of our website functionality and the overall customer offer. We re-launched our Joules.com e-commerce site in September 2015, with improved functionality, richer content and optimisation for mobile devices.
With traffic from mobile and tablet devices now representing over 70% of the total, and with the mobile conversion rate improving by 50 basis points in the year, the re-launched site has been instrumental in supporting the growth of e-commerce revenues.
'Click & Collect' continues to prove popular with our customers and towards the end of the year we commenced the roll-out of 'Order in Store' which provides customers in store with access to the entire range of products across all of our categories.
Wholesale expansion in the UK and overseas
Wholesale sales increased by 18.3% (on a consistent 52 week basis), reflecting the growing appeal of the Joules brand. Continued expansion in the UK was driven primarily through national multi-channel retailers such as John Lewis and Next Label as well as through smaller, independent specialist partners that have a good fit with the Joules brand.
Joules' products with their unique prints, colour and British character continue to resonate strongly with customers in international markets, where our focus remains on North America and Germany where we are building brand awareness. During the year we invested further in our infrastructure in the US, opening a new, larger trade showroom and sales office in New York. Our focused approach, on developing larger wholesale accounts, continues to make good progress with increased product range listings in Nordstrom and Von Maur for Autumn/Winter 16 and the department store Dillards launching Childrenswear from Autumn/Winter 16.
The growth of international wholesale (up 48.1% in the year) helped drive a 24.7% increase in the Group's total international sales (including international retail). Excluding the impact of non-recurring international shows, total international revenues were up nearly 36%, taking international sales as a proportion of total Group sales to 10.1%.
Further development as a lifestyle brand
Joules delivered growth across every product category during the year, with particularly strong performances in the core Womenswear category and the newer Homeware, Accessories and 'Baby Joule' categories. Our licensed products, although relatively small in scale, continued to perform well.
The popularity of the brand across multiple product categories highlights the exciting growth potential for Joules as it continues to grow as a true lifestyle brand.
Customer and Marketing
Joules has a loyal, fast growing and highly engaged customer community. During the year we continued to expand our customer database - that now stands at just over two million customers - and developed new ways to communicate and engage with this community online, in stores, across social media platforms and through events. One innovative and successful example of digital customer engagement during the year was our 'Design Your Own Welly' App and competition. Customers were invited to go online and bring a Joules welly to life by creating their own, bespoke bold and bright designs. We received more than 45,000 entries to the competition, including many new customers, helping to raise brand awareness amongst existing and potential customers.
We were delighted to win 'Fashion Business of the Year' (in the GBP30-100m category) at the 2015 Drapers Awards, with the judges acknowledging Joules' "very impressive growth story while demonstrating confidence in our brand positioning, ethos and strategy". This award was fitting testament to the hard work of our team as well as the brand's strong values.
Platform for long term growth
The focus of the management team is on the long term, sustainable development of the Joules brand, as demonstrated by further investments made during the year including in our new stores, a strengthened e-commerce proposition and the infrastructure to support our US wholesale business.
During the year we implemented the first phase of our company wide ERP replacement programme. We are in the process of migrating our existing 'Sales & stock management' IT platform to the Microsoft Dynamics AX ERP platform. Phase one has seen the implementation of Microsoft Dynamics AX to support our US wholesale business. The programme, which represents a significant investment for the Group, is ongoing as we extend the platform across our core UK wholesale and retail channels with a plan to go live in FY18.
The creativity, skill and commitment of the Joules team are key drivers of the brand's growth and success. We continue to invest in skills and people development in all areas of the business including our customer facing colleagues and team leaders across the business.
Looking ahead
Group trading to date in the FY17 financial year has been in line with our expectations and early feedback on our Spring/Summer 17 ranges from our trade customers has been positive.
We have a strong brand, a loyal and growing customer base, a committed and enterprising team and a well-invested infrastructure. These qualities give me confidence for the future and for the delivery against our strategic objectives as we grow the Joules brand in the UK and internationally.
FINANCIAL REVIEW
Joules Group plc was admitted to AIM on 26 May 2016 (the 'IPO'), just prior to the end of the financial period. To provide a meaningful comparison to the prior financial period and for future reporting periods, the front section of this Annual Report reports on both the underlying the statutory results.
PROFIT BEFORE TAX - UNDERLYING
Underlying profit before tax ('PBT') was GBP7.5 million for the 52 weeks to 29 May 2016, an increase of 41.5% on the prior period (53 weeks to 31 May 2015).
EARNINGS BEFORE INTEREST, TAX, DEPRECIATION & AMORTISATION ('EBITDA')
Underlying EBITDA increased by 28.6% to GBP13.5 million (FY15: GBP10.5m). The underlying EBITDA margin increased by 1.3 percentage points from 9.0% to 10.3%.
UNDERLYING AND STATUTORY RESULTS
During the period there were a number of costs that were exceptional or non-recurring in nature. These items relate primarily to the IPO and to the capital structure that was in place prior to the IPO. To provide a meaningful year-on-year comparison, for historic and future periods, these items have been excluded from the underlying results reported in the front section of the Annual Report. A reconciliation between Underlying and Statutory (GAAP) results is provided below.
52 Weeks ended 29 53 Weeks ended
May 2016 31 May 2015
----------------------------------------------- --------------------------------------
GBPmillion Underlying IPO Non-recurring Reported Underlying Non-recurring Reported
costs
Revenue 131.3 - - 131.3 116.4 - 116.4
Gross profit 70.3 - - 70.3 62.0 - 62.0
Admin expenses (62.3) (2.7) (0.4) (65.4) (56.4) (0.6) (57.0)
Operating
profit 8.0 (2.7) (0.4) 4.8 5.7 (0.6) 5.1
Net finance
costs (0.5) - (5.6) (6.0) (0.4) (4.6) (5.0)
Profit before
tax 7.5 (2.7) (6.0) (1.2) 5.3 (5.2) 0.1
----------- -----------
Operating
profit 8.0 (2.7) (0.4) 4.8 5.7 (0.6) 5.1
Depreciation
& Amortisation (5.5) - (0.4) (5.9) (4.8) (0.5) (5.3)
EBITDA 13.5 (2.7) (0.0) 10.7 10.5 (0.1) 10.4
----------------- ------- ----------- ------- ------- ------- ------- -------
REVENUE
Group revenue increased by 12.8% to GBP131.3 million from GBP116.4 million in FY15, the prior year being a 53 week period. Against a comparable 52 weeks, Group revenue increased by 14.2%, with Retail revenue increasing by 12.8% and Wholesale revenue increasing by 18.3%. Sales in International markets, which are predominantly Wholesale, increased by 24.7% and now represent 10.1% of Group revenues (FY15: 9.1%).
Retail - Stores
Store revenue at GBP58.2 million increased by 13.1% on the comparable 52 weeks. During the year we opened 10 new stores, converted one franchise and closed five stores, resulting in an increase in owned store numbers from 91 to 97. Total store selling space increased by 10.9% to 111,000 sq. ft. over the period. We had three franchises at the end of FY16 (FY15: 4).
Retail - E-commerce
E-commerce revenue at GBP30.1 million increased by 17.3% on the comparable 52 weeks and was 32.1% of total Retail revenue (FY15: 30.6%). E-commerce benefited from more visitors and higher conversion following the re-launch of the content rich, mobile optimised website and the ongoing new customer acquisition activity.
Wholesale
Wholesale revenue at GBP37.2 million increased by 18.3% on the comparable 52 weeks. Good performances were delivered in both the UK and international markets and from both the larger 'house account' and the smaller 'field account' customer bases.
GROSS MARGIN
Gross margin at 53.5% was 0.2 percentage points higher than the prior year. Our commercial and buying activity enabled us to offset the impact of the strengthening US Dollar and maintain overall intake margins. Increasing international Wholesale sales, in particular within the US where we have a high mix of lower margin footwear sales and a significant proportion of our business via a distributor, result in downward pressure on Group gross margin which has been more than mitigated by the growth of the Retail segment and improved e-commerce distribution costs.
ADMINISTRATIVE EXPENSES - UNDERLYING
Underlying administrative expenses increased by 10.5% from GBP56.4 million to GBP62.3 million. Underlying operating expenses were 47.4% of revenue (FY15: 48.5%). The Group strengthened several central functions during the year particularly in design, commercial and support and increased investment in new customer acquisition and internal photo-shoot capability to support the retail and wholesale channels.
Total rent cost, including service charges, for the period was GBP9.3 million (FY15: GBP8.5m) with the increase due to new store openings and the relocation of our Shanghai sourcing office and expanded New York showroom during the period.
Underlying depreciation & amortisation increased to GBP5.5 million (FY15: GBP4.8m) following the completion of several IT infrastructure projects in the current and prior year, including the first phase of the Enterprise Resource Planning (ERP) programme.
Administrative expenses - non-underlying
Non-underlying administrative expenses totalled GBP3.1 million (FY15: GBP0.6m). This included IPO transaction related costs of GBP2.7 million (FY15: GBPnil) and non-recurring costs of GBP0.4 million (FY15: GBP0.6m). Non-recurring costs included costs related to the pre-IPO ownership structure GBP0.1 million (FY15: GBP0.1m) and asset impairment GBP0.3 million (FY15: GBP0.5m).
NET FINANCE COSTS - UNDERLYING
Underlying net finance costs of GBP0.5 million (FY15: GBP0.4m) related to interest and facility charges on the Group's revolving credit facility with Barclays Bank Plc.
Net finance costs - non-underlying
Non-underlying net finance costs totalled GBP5.6 million (FY15: GBP4.6m), consisting primarily of interest on shareholder loan notes at GBP4.7 million (FY15: GBP4.4m) and amortisation of the loan note arrangement fee of GBP0.9 million (FY15: GBP0.4m). The shareholder loan notes were converted to equity immediately prior to the IPO and the expense will not be ongoing.
TAXATION
The reported tax rate in the current and prior year is impacted by the non-underlying items noted above. These included a proportion of non-deductible costs and the impact from the proportion of the shareholder loan note interest that was deemed deductible on finalisation of the Advanced Thin Capitalisation Agreement ('ATCA') with HMRC during the period.
The Group's effective tax rate in future years is expected to be broadly in line with the statutory rate.
EARNINGS PER SHARE AND DIVID
Statutory basic (and diluted) earnings per share for the period are -2.0 pence per share. On an underlying, pro forma basis the FY16 basic earnings per share are 6.9 pence (FY15: 4.8 pence).
To facilitate meaningful comparison of earnings per share the weighted average number of shares in issue has been restated on a pro forma basis to reflect the post-IPO capital structure. The pro forma assumes that the number of shares in issue post-IPO were in issue throughout. Earnings are adjusted for non-underlying items detailed above and to reflect the statutory tax rate.
GBPmillion FY16 FY15
------------------ ------- -------
PBT - Underlying 7.5 5.3
Statutory tax
rate 20.0% 20.8%
Tax (1.5) (1.1)
------- -------
Earnings -
Underlying 6.0 4.2
Shares - Pro
forma (million) 87.5 87.5
EPS - Pence 6.9 4.8
As detailed in the Admission Document, The Board is not recommending the payment of a dividend for FY16.
CASH FLOW AND CASH POSITION
Net cash flow from operating activities was GBP16.9 million (FY15: GBP6.0m) including a net working capital inflow of GBP7.1 million due to improved inventory efficiency and higher trade payables at the period end.
The Group ended the period with underlying net cash/(debt) of GBP3.2 million (FY15: GBP(6.5)m) an improvement of GBP8.7 million in the period. Gross cash was GBP9.3 million (FY15: GBP2.1m) and underlying borrowings GBP6.1 million (FY15: GBP8.6m), which includes borrowings under the Group's revolving credit facility and asset finance loans. Underlying borrowings excludes shareholder loan notes that were settled during the year as part of the IPO transaction (FY15: GBP(42.8)m).
The Group has access to a GBP25 million revolving credit facility provided by Barclays Bank Plc to fund seasonal working capital requirements. This facility matures in May 2020.
INVENTORY
Inventory at year end was GBP19.3 million (FY15: GBP17.7m). The higher year-on-year inventory was a result of receiving deliveries for Autumn/Winter 16 ranges earlier than the prior year. Inventory management and stock turn both improved in the year.
CAPITAL EXPITURE
Investment in property, plant, equipment and intangible assets totalled GBP7.1 million in FY16 (FY15: GBP8.8m). Major areas of expenditure in the year were new store openings and relocations and spend on our core IT infrastructure, including the re-launch of our E-commerce platform and the completion of phase one of our ERP implementation. Phase two of the ERP implementation is ongoing, with a plan to go live in FY18.
PRINCIPAL RISKS AND UNCERTAINTIES
Set out below are the principal risks and uncertainties that the Directors consider could impact the business. The Board continually reviews the potential risks facing the Group and the controls in place to mitigate any potential adverse impacts. The Board also recognises that the nature and scope of risks can change and that there may be other risks to which the Group is exposed and so the list is not intended to be exhaustive.
The Corporate Governance Report includes an overview of our approach to risk management and internal control systems and processes.
EXTERNAL RISKS
External risks reflect those risks where we are unable to influence the likelihood of the risk arising and therefore focus is on minimising the impact should the risk arise.
Risk and impact Mitigating factors ---------------------------------- --------------------------------- Economy The majority of Group's As a premium lifestyle revenue is generated brand with a geographically from sales in the UK disperse retail store to UK customers. A deterioration portfolio, a strong e-commerce in the UK economy may channel and long standing adversely impact consumer wholesale customer accounts, confidence and spending the Directors consider on discretionary items. that the UK business would A reduction in consumer be less affected by a expenditure could materially reduction in consumer and adversely affect expenditure than many the Group's financial other clothing retailers. condition, operations In addition, the property and business prospects. portfolio has short lease The expected exit of terms, providing relative the UK from the EU has flexibility to close or increased the likelihood relocate stores should and potential impact it become necessary. of this risk. ---------------------------------- --------------------------------- Competitor actions New competitors or existing Joules differentiates clothing retailers or from competitors through lifestyle brands may its strong brand and products target our segment of that are known for their the market. Existing quality, details, colour competitors may increase and prints. Our large their level of discounting customer database allows or promotions and/or the Group to communicate expand their presence effectively with customers, in new channels. These developing customer engagement actions could adversely and loyalty. impact our sales and profits. ---------------------------------- --------------------------------- Foreign Exchange The Group purchases the The Group's Treasury Policy majority of its product sets out the parameters stock from overseas and and procedures relating is therefore exposed to foreign currency hedging. to foreign currency risk, We currently seek to hedge
primarily the US Dollar. a material proportion Without mitigation, input of forecasted US Dollar costs may fluctuate in requirement 12 months the short term, creating ahead through the use uncertainty as to profits of forward contracts. and cash flows. The anticipated exit The Group's US wholesale of the UK from the EU business generates US has resulted in a devaluation Dollar income which provides of GBP to the US Dollar a degree of natural hedging. and increased volatility. This may be sustained or worsen going forward. ---------------------------------- --------------------------------- Regulatory and Political New regulations or compliance The Group has processes requirements may be introduced in place to monitor and from time to time. These report to the Board on may have material impact new regulations and compliance on the cost base or operational requirements that could complexity of the business. have an impact on the Non-compliance with the business. The impact of regulation could result any new regulation is in financial penalties. evaluated and reflected The anticipated exit in the Group's financial of the UK from the EU forecasts and planning. has increased uncertainty in this area. ---------------------------------- ---------------------------------
INTERNAL RISKS
Internal risks reflect those where we can influence the likelihood of the risk arising and the impact if the risk should arise.
Risk and Impact Mitigating factors
-------------------------------- --------------------------------------
Brand and reputation
The strength of our Brand and reputation are
brand and its reputation monitored closely by senior
are very important to management and the Board.
the success of the Group. The Group's public relations
Failure to protect and are actively managed and
manage this could reduce customer feedback, both
the confidence and trust direct and indirect, is
that customers place carefully monitored.
in the business, which We carefully consider each
could have a detrimental new trade customer with
impact on sales, profits whom we do business and
and business prospects. monitor on an ongoing basis.
Our brand may be undermined
or damaged by our actions
or those of our wholesale
partners.
-------------------------------- --------------------------------------
Product sourcing The Group has a policy
The Group's products and process for the selection
are predominantly manufactured of new suppliers. This
overseas. Failure to includes a review of compliance
carry out sufficient with laws and regulations
due diligence, and to and that suppliers meet
act in the event of generally accepted standards
any negative findings, of good practice. In addition,
especially in relation suppliers are required
to ethical or quality to sign up to Joules' code
related issues, could of conduct.
adversely impact our The Group operates a programme
brand and reputation. of ethical audits across
the product supply base
supported by a third party
agency.
-------------------------------- --------------------------------------
Design Joules has a long established
As with all clothing in-house creative and design
and lifestyle brands team who have a high level
there is a risk that of awareness and understanding
our offer will not satisfy of our target customer
the needs of our customers segment. A large proportion
or that we fail to correctly of our product range is
identify trends that anchored in classic products
are important to our that are evolved season
customer base. These to season.
outcomes may result Early feedback from our
in lower sales, excess trade customers can allow
inventories and/or higher us to further refine our
markdowns. product range ahead of
significant purchase commitments.
-------------------------------- --------------------------------------
Key management
Our performance is linked The Group's remuneration
to the performance of policy, which includes
our people and in particular a long term incentive scheme
to the leadership of and performance-related
key individuals. The pay, is designed to attract
loss of a key individual and retain key management.
whether at management The Group operates learning
level or within a specialist and development initiatives
skill set could have to increase the opportunities
a detrimental effect for internal succession.
on our operations and,
in some cases, the creative
vision for the brand.
-------------------------------- --------------------------------------
ERP system The first phase of our
We are in the process implementation went live
of implementing a new in November 2015, supporting
IT platform, Microsoft our US wholesale operations.
Dynamics AX, across A dedicated programme team
the Group. With any with significant experience
project of this scale, of our business processes
there is a risk of a and ERP implementation
poorly managed implementation has been established. The
or take up of new systems, programme team reports
which could result in monthly to a steering committee
business disruption. comprised of Group senior
management.
-------------------------------- --------------------------------------
IT security and systems A Business Continuity Plan
availability exists to minimise the
Non availability of impact of a loss of key
the Group's IT systems, systems and to recover
including the website, the use of the system and
for a prolonged period associated data.
could result in business A regular assessment of
disruption, loss of vulnerability to malicious
sales and reputational attacks is performed and
damage. any weaknesses rectified.
Malicious attacks, data All Group employees are
breaches or viruses, made aware of the Group's
could lead to business IT security policies and
interruption and reputational we deploy a suite of tools
damage. (email filtering, antivirus
etc) to protect against
such events.
-------------------------------- --------------------------------------
Supply chain
The disruption to any The Business Continuity
material element of Plan includes an established
the Group's supply chain, procedure in the event
in particular the UK of the loss of the UK distribution
central distribution centre. In addition the
centre, could impact Group maintains insurance
sales and impact on cover at an appropriate
our ability to supply level to protect against
our wholesale customers, the impact of such an interruption.
stores and consumers.
-------------------------------- --------------------------------------
JOULES GROUP PLC
CONSOLIDATED INCOME STATEMENT (UNAUDITED)
52 weeks 53 weeks
ended 29 ended
May 31
2016 May
GBP'000 2015
GBP'000
REVENUE 131,262 116,421
Cost of sales (61,003) (54,386)
GROSS PROFIT 70,259 62,035
Administrative expenses (62,296) (56,458)
Exceptional administrative
expenses (3,128) (500)
Total administrative
expenses (65,424) (56,958)
OPERATING PROFIT 4,835 5,077
Finance income and
similar incomes - 190
Finance costs and
similar charges (461) (416)
Non-recurring finance
costs (5,554) (4,762)
PROFIT/(LOSS) BEFORE
TAX (1,180) 89
Income tax expense (613) (529)
PROFIT/(LOSS) FOR
THE PERIOD (1,793) (440)
Basic earnings/(loss)
per share (pence) (2.04) (0.50)
Diluted earnings/(loss)
per share (pence) (2.04) (0.50)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)
52 weeks 53 weeks
ended ended
29 31
May May
2016 2015
GBP'000 GBP'000
Profit/(loss) for
the period (1,793) (440)
Items that may be
reclassified subsequently
to profit or loss:
Net gain/(loss) arising
on changes in fair
value of hedging
instruments entered
into for cash flow
hedges (26) 2,221
Exchange difference
on translation of
foreign operations (48) (31)
Income tax relating
to items that will
be reclassified subsequently
to profit and loss 15 (444)
TOTAL COMPREHENSIVE (EXPENSE)/
INCOME FOR THE PERIOD (1,852) 1,306
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (UNAUDITED)
29 May 31 May
2016 2015
GBP'000 GBP'000
NON-CURRENT ASSETS
Property, plant
and equipment 11,151 11,458
Intangibles 5,903 4,416
Deferred tax 653 803
TOTAL NON-CURRENT
ASSETS 17,707 16,677
CURRENT ASSETS
Inventories 19,253 17,652
Trade and other
receivables 10,856 10,156
Current corporation
tax receivable 231 179
Cash and cash equivalents 9,278 2,121
Derivative financial
instruments 474 500
TOTAL CURRENT ASSETS 40,092 30,608
TOTAL ASSETS 57,799 47,285
CURRENT LIABILITIES
Trade and other
payables 27,919 18,716
Borrowings 5,461 7,629
Provisions 773 587
TOTAL CURRENT LIABILITIES 34,153 26,932
NON-CURRENT LIABILITIES
Borrowings 627 43,827
TOTAL LIABILITIES 34,780 70,759
NET ASSETS/(LIABILITIES) 23,019 (23,474)
EQUITIES
Share capital 875 91,510
Hedging reserve 389 400
Translation reserve (72) (24)
Merger reserve (125,807) (125,662)
Retained earnings 136,224 10,302
Share premium 11,410 -
TOTAL EQUITY 23,019 (23,474)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)
Merger Hedging Translation Share Share Retained Total
reserve reserve reserve capital premium earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at
25 May 2014 (125,662) (1,377) 7 91,510 - 10,742 (24,780)
Loss for the
period - - - - - (440) (440)
Other comprehensive
income for
the period - 1,777 (31) - - - 1,746
Balance at
30 May 2015 (125,662) 400 (24) 91,510 - 10,302 (23,474)
Loss for the
period - - - - - (1,793) (1,793)
Other comprehensive
income for
the period - (11) (48) - - - (59)
Share buyback (145) - - - - - (145)
Share issue - - - 37,009 - - 37,009
Share capital
reduction - - - (127,715) - 127,715 -
Share issue - - - 71 11,410 - 11,481
Balance at
29 May 2016 (125,807) 389 (72) 875 11,410 136,224 23,019
CONSOLIDATED CASH FLOW STATEMENT (UNAUDITED)
52 weeks 53 weeks
ended ended
29 May 31
2016 May
GBP'000 2015
GBP'000
Net cash inflow from
operating activities
Profit before interest
and income taxes 4,835 5,077
Adjustments for:
Depreciation 4,516 4,242
Amortisation 1,011 554
Impairment of fixed
assets 380 500
Profit on sale of - -
fixed assets
Finance income - 190
Finance expense (461) (416)
Tax paid (500) (1,069)
(Increase)/decrease
in inventory (1,601) (4,285)
(Increase)/decrease
in receivables (700) (2,082)
Increase/(decrease)
in payables 9,389 3,330
Net cash from operating
activities 16,869 6,041
Cash flow from investing
activities
Purchase of property,
plant and equipment (7,087) (8,792)
Sale of property, - -
plant, equipment
and intangible assets
Net cash used in
investing activities (7,087) (8,792)
Cash flow from financing
activities
Proceeds from new
share capital subscribed 11,481 -
Redemption of shares (145) -
Repayment of borrowings (13,913) (393)
Proceeds from borrowings - 1,049
Net cash (used in)/generated
from financing activities (2,577) 656
Net (decrease)/increase
in cash and cash
equivalents 7,205 (2,095)
Cash and cash equivalents
at beginning of period 2,121 4,247
Effect of foreign
exchange rate changes (48) (31)
Cash and cash equivalents
at end of period 9,278 2,121
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. BASIS OF PREPARATION OF PRELIMINARY ANNOUCEMENT
The preliminary consolidated financial information for the 52 weeks ended 29 May 2016 was approved by the Directors on 5 September 2016.
This preliminary consolidated financial information has been prepared in accordance with the principles of International Financial Reporting Standards ('IFRS') and has been prepared on a going concern basis. The preliminary consolidated financial information does not constitute statutory consolidated financial statements for the 52 weeks ended 29 May 2016 as defined in section 434 of the Companies Act 2006.
The Annual Report and Group Financial Statements for the 52 weeks ended 29 May 2016 were the first for Joules Group plc and they were approved by the Board of Directors on 5 September 2016. The report of the auditor on those Group Financial Statements was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under section 498 of the Companies Act 2006. The Annual Report and Group Financial Statements for the 52 weeks ended 29 May 2016 will be filed with the Registrar in due course.
Going concern
The Directors have prepared a detailed forecast with a supporting business plan for the foreseeable future. The forecast indicates that the Group will remain in compliance with covenants throughout the forecast period. As such, the Directors have a reasonable expectation the Company and Group will have adequate resources to continue in operational existence for the foreseeable future. As such, they continue to prepare the financial statements on the basis of going concern.
2. SEGMENT REPORTING
The Group has three reportable segments; Retail, Wholesale and Other. For each of the three segments, the Group's chief operating decision maker (the "Board") reviews internal management reports on a monthly basis. Each segment can be summarised as follows:
-- Retail: Retail includes sales and costs relevant to Stores, E-commerce, Shows and Franchises.
-- Wholesale: Wholesale includes sales and costs relevant to the sale of products to other retail businesses or
distributors for onward sale to their customer.
-- Other: Other includes income from licencing, central costs and items that are not distinguishable into categories
above.
The accounting policies of the reportable segments are the same as described in note 1. Information regarding the results of each reportable segment is included below. Segment results before exceptional items are used to measure performance as management believes that such information is the most relevant in evaluating the performance of certain segments relative to other entities that operate within these industries.
Segment Review and Results
52 WEEKSED 29 MAY 2016 Retail Wholesale Other Total
GBP'000 GBP'000 GBP'000 GBP'000
Revenue 93,687 37,196 379 131,262
Cost of sales (36,616) (24,387) - (61,003)
--------- ---------- --------- ---------
GROSS PROFIT 57,071 12,809 379 70,259
Administration expenses (34,146) (5,998) (16,348) (56,492)
--------- ---------- --------- ---------
SEGMENT RESULT 22,925 6,811 (15,969) 13,767
--------- ---------- --------- ---------
RECONCILIATION OF SEGMENT RESULT TO PROFIT BEFORE TAX
Segment result 22,925 6,811 (15,969) 13,767
Depreciation and amortisation (3,306) (258) (1,963) (5,527)
Central administrative expenses (277)
Exceptional costs (3,128)
Net finance expense (6,015)
Interest receivable and similar income -
---------
LOSS BEFORE TAX (1,180)
---------
53 WEEKSED 31 MAY 2015 Retail Wholesale Other Total
GBP'000 GBP'000 GBP'000 GBP'000
Revenue 84,413 31,633 375 116,421
Cost of sales (35,009) (19,377) - (54,386)
--------- ---------- --------- ---------
GROSS PROFIT 49,404 12,256 375 62,035
Administration expenses (31,865) (4,762) (14,698) (51,325)
--------- ---------- --------- ---------
SEGMENT RESULT 17,539 7,494 (14,323) 10,710
--------- ---------- --------- ---------
RECONCILIATION OF SEGMENT RESULT TO PROFIT BEFORE TAX
Segment result 17,539 7,494 (14,323) 10,710
Depreciation and amortisation (2,956) (161) (1,679) (4,796)
Central administrative expenses (337)
Exceptional costs (500)
Net finance expense (5,178)
Interest receivable and similar income 190
---------
PROFIT BEFORE TAX 89
---------
There are no discontinued operations in the period.
GEOGRAPHICAL INFORMATION
The Group's revenue from external customers by geographical location are as detailed below. Predominantly all non-current assets (excluding financial instruments, deferred tax assets and other financial assets) are situated in the UK, therefore separate geographical disclosure of non-current assets is not considered necessary.
UK International Support Total
GBP'000 GBP'000 GBP'000 GBP'000
52 weeks ended 29 May 2016 118,041 13,222 - 131,262
53 Weeks ended 31 May 2015 105,819 10,602 - 116,421
3. EXPENSES BY NATURE
52 weeks 53 weeks
ended ended
29 May 31
2016 May
GBP'000 2015
GBP'000
Cost of inventories 51,572 46,842
Transportation, carriage
and packing 6,905 5,450
Employees remuneration
and benefits
and third party labour
costs 25,597 22,984
Depreciation and amortisation 5,527 4,796
Exceptional impairment 380 500
Other expenses 36,446 30,772
126,427 111,344
Other expenses and exceptional impairment include GBP3,128,000 for May 2016 (May 2015: GBP500,000) of exceptional items which have been disclosed separately on the face of the income statement in order to summarise the underlying results. Neither 'underlying profit or loss' nor 'exceptional items' are defined by IFRS however the directors believe that the disclosures presented in this manner provide clear presentation of the financial performance of the Group.
Other expenses include GBP3,162,000 of costs and offsetting income, which net to GBPnil, that were incurred as part of the listing of Joules Group plc on AIM. These costs were recharged to the exiting shareholders as the listing related to the disposal of their shares. The net amount of GBPnil has been classified as Exceptional.
52 weeks 53 weeks
ended ended
29 May 31
2016 May
GBP'000 2015
GBP'000
The analysis of auditor's remuneration
is as follows:
Fees payable to the company's
auditor for the audit of the
Group's annual accounts 44 40
Total audit fees 44 40
Other services pursuant to legislation:
Tax compliance 66 15
Tax advice 74 99
Services relating
to IPO 803 -
Other 5 6
Total non-audit fees 948 120
4. OPERATING PROFIT
Operating profit is 52 weeks 53 weeks
stated after charging/(crediting): ended ended
29 May 31
2016 May
GBP'000 2015
GBP'000
Hire of plant and
machinery 444 597
Other operating leases 8,570 7,928
Depreciation, amortisation
and impairment of
fixed assets 5,907 5,296
(Profit)/loss on disposal
of fixed assets - -
5. INTEREST PAYABLE AND SIMILAR CHARGES
52 weeks 53 weeks
ended ended
29 May 31
2016 May
GBP'000 2015
GBP'000
Bank loan interest 461 416
Shareholder loan note
interest 4,676 4,399
Amortisation of debt
costs 878 363
6,015 5,178
Amortisation of debt costs relate to fees incurred in 2013 with regard to the Shareholder loan notes, as these fees related to a debt facility they were amortised over the expected life of the facility. During the period the Shareholder loan note debt was settled and all remaining unamortised debt costs were expensed.
6. INCOME TAX
52 weeks 53 weeks
ended ended
a) Analysis of charge 29 May 31
in the period 2016 May
GBP'000 2015
GBP'000
Current tax
UK corporation tax based
on the profit/(loss)
for the period 869 1,083
Adjustment in respect
of prior periods (438) (561)
Overseas tax 17 21
Total current tax charge 448 543
Deferred taxation
Adjustment in respect
of prior periods 225 330
Origination and reversal
of timing differences (142) (358)
Effect of adjustment
in tax rate 82 14
Total deferred taxation
charge/(credit) 165 (14)
Tax charge for the period
(note 6b) 613 529
In addition to the amount charged to the income statement, the following amounts relating to tax have been recognised in other comprehensive income.
52 weeks 53 weeks
ended ended
29 May 31
2016 May
GBP'000 2015
GBP'000
Deferred taxation
Gains/(Losses) arising
during the period on
deferred tax on cash
flow hedges 15 (444)
Total income tax gain/(loss)
recognised in other
comprehensive income 15 (444)
6. INCOME TAX (Continued)
b) Factors affecting the tax charge for the period
There are reconciling items between the expected tax charge and the actual which are shown below:
52 weeks 53 weeks
ended ended
29 May 31
2016 May
GBP'000 2015
GBP'000
Profit / (loss) before
taxation (1,180) 89
20.0% 20.8%
UK corporation tax
at the standard rate (236) 19
Effects of:
Expenses/(credits)
not deductible for
tax
purposes and other
permanent differences 940 553
Difference in overseas
tax rate 17 11
Effect of adjustment
in tax rate 82 14
Losses not recognised
due to uncertainty 23 163
Adjustment in respect
of prior period (213) (231)
Tax expense for the
period (note 6a) 613 529
The 2013 budget issued on 20 March 2013 announced that the main rate of corporation tax would be reduced to 21% from 1 April 2014 and to 20% from 1 April 2015. The UK corporation tax at the standard rate for the year is therefore 20.0% (2015: 20.8%).
In July 2015 the UK government announced its intention to reduce the standard corporation tax rate to 18% by 2020. The measure to reduce the rate to 19% for the financial year beginning 1 April 2017 and to 18% for the financial year beginning 1 April 2020 were substantively enacted on 26 October 2015 and have been reflected in the calculation of deferred tax in the May 2016 numbers.
7 & 8. PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS
Property, Plant and Intangible
Equipment
Leasehold Fixtures Motor Total IT Total
improve-ments and vehicles GBP'000 Systems GBP'000
GBP'000 fittings GBP'000 GBP'000
GBP'000
Cost
At 25 May 2014 155 21,370 514 22,039 2,544 2,544
Additions - 5,391 16 5,407 3,385 3,385
At 31 May 2015 155 26,761 530 27,446 5,929 5,929
At 1 June 2015 155 26,761 530 27,446 5,929 5,929
Additions - 4,589 - 4,589 2,498 2,498
Disposals (55) (8,570) (404) (9,029) (674) (674)
At 29 May 2016 100 22,780 126 23,006 7,753 7,753
Accumulated
depreciation/amortisation
At 25 May 2014 111 10,658 477 11,246 959 959
Charge for the
period 8 4,203 31 4,242 554 554
Impairment - 500 - 500 - -
At 31 May 2015 119 15,361 508 15,988 1,513 1,513
At 1 June 2015 119 15,361 508 15,988 1,513 1,513
Charge for the
period 5 4,504 7 4,516 1,011 1,011
Disposals (55) (8,570) (404) (9,029) (674) (674)
Impairment - 380 - 380 - -
At 29 May 2016 69 11,675 111 11,855 1,850 1,850
Net book value
At 25 May 2014 44 10,712 37 10,793 1,585 1,585
At 31 May 2015 36 11,400 22 11,458 4,416 4,416
At 29 May 2016 31 11,105 15 11,151 5,903 5,903
Property, Plant and Equipment and Intangibles
During the period the Directors conducted a detailed review of the Group's fixed assets, as a result of this review GBP9,044,000 (GBP8,370,000 of Property, Plant and Equipment and GBP674,000 of Intangibles) of nil book value items which were no longer in existence or use as at the balance sheet date were identified, these have been recorded as a disposal above.
9. BORROWINGS
29 May 31 May
2016 2015
GBP'000 GBP'000
Bank loans 5,009 7,068
Asset loans 1,079 1,566
Shareholder loan
notes - 43,699
Financing costs
capitalised - (877)
6,088 51,456
Borrowings are
repayable
as follows:
Bank loans
Within one year 5,009 7,068
Asset loans
Within one year 452 561
Between one and
two years 333 490
Between two and
five years 294 515
1,079 1,566
Shareholder loan
notes
Between two and
five years - 17,480
After five years - 26,219
- 43,699
Financing costs
capitalised - (877)
- 42,822
Total borrowings
Between one and
two years 333 490
Between two and
five years 294 17,995
After five years - 26,219
Financing costs
capitalised - (877)
627 43,827
On demand or within
one year 5,461 7,629
6,088 51,456
9. BORROWINGS (Continued)
Summary of borrowing arrangements
The Bank Loan is a Revolving Credit Facility in which amounts drawn down are generally repayable within three months. The facility matures in May 2020. The asset loans are secured against the assets to which they relate. Interest is paid at varying rates above base rate.
The shareholder loan notes were issued in November 2013 and were repayable in equal amounts representing 20% of the outstanding balance annually from 31 October 2018 for a period of 5 years. Interest accrued annually at 11% and was added to the principal amount outstanding. The loan notes were settled in full on 26th May 2016 as a part of the IPO on admission to AIM.
The weighted average interest rates paid during the period were as follows:
52 weeks 53 weeks
ended
29 May ended
2016 31 May
% 2015
%
Asset loans 7.4 8.9
Shareholder loan notes 11.0 11.0
Bank loans 3.0 3.0
10. FINANCIAL COMMITMENTS
Operating Lease Commitments
At the balance sheet date, the Group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
Land & Buildings
29 May 31 May
2016 2015
GBP'000 GBP'000
Leases expiring:
Not later than
1 year 8,040 7,996
Later than 1
year and not
later than 5
years 27,881 26,497
Later than 5
years 17,550 16,975
53,471 51,468
Other
29 May 31 May
2016 2015
GBP'000 GBP'000
Leases expiring:
Not later than
1 year 333 299
Later than 1 year
and not later
than 5 years 359 495
Later than 5 - -
years
692 794
11. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
29 May 31 May
2016 2015
GBP'000 GBP'000
Increase/(decrease)
in cash in the period 7,157 (2,126)
Cash flow from movement
in debt 13,913 (656)
Change in net debt
resulting from cash
flows 21,070 (2,782)
Non cash interest on
loan notes (4,676) (4,399)
Non cash movement on
amortised deal fees
of loan notes (878) (363)
Non cash settlement
on loan notes 37,009 -
Net debt at start of
the year (49,335) (41,791)
Net debt at end of
year 3,190 (49,335)
12. RELATED PARTY TRANSACTIONS
Transactions between the company and its subsidiaries, which are related parties, have been eliminated on consolidation.
The Directors and key management control 31,011,102 shares in Joules Group plc, which represents 35.44% of the issued share capital.
13. EARNINGS PER SHARE
Basic and diluted earnings per share are calculated by dividing profit or loss attributable to ordinary equity holders by the weighted average number of ordinary shares in issue during the period.
The acquisition of Joules Investments Holdings Limited by Joules Group plc on 26 May 2016 has been accounted for using reverse acquisition accounting principles. The effect of using reverse acquisition accounting principles on share capital is that the capital that existed as at the point Joules Group plc legally acquired Joules Investments Holdings Limited is accounted for as if it had been in existence as at the comparative period end (31 May 2015) and as at the opening balance sheet date (25 May 2014).
The weighted average number of shares in issue for the current and prior year has therefore been stated to reflect the post IPO share capital structure, this adjustment assumes the total shares issued during the IPO were in issue throughout the whole of the current and previous period presented.
For the calculation of diluted earnings per share, the weighted average number of shares in issue is further adjusted to assume conversion of all potentially dilutive ordinary shares. The Company has one category of potentially dilutive ordinary shares, being management shares not yet vested.
52 weeks 53 weeks
ended ended
29 May 31
2016 May
2015
Basic earnings/(loss)
per share (pence) (2.04) (0.50)
Diluted earnings/(loss)
per share (pence) (2.04) (0.50)
13. EARNINGS PER SHARE (Continued)
The calculation of basic and diluted earnings per share is based on the following data:
Earnings
52 weeks 53 weeks
ended ended
29 May 31
2016 May
GBP'000 2015
GBP'000
Earnings for the purpose
of basic and diluted
earnings per share,
being the net loss (1,793) (440)
Earnings for the purpose
of basic earnings
per share (1,793) (440)
Number of shares
52 weeks 53 weeks
ended ended
29 May 31
2016 May
2015
Weighted number
of ordinary shares
for the purpose
of basic earnings
per share 87,499,796 87,499,796
Potentially dilutive
share awards 446,875 446,875
Weighted number
of ordinary shares
for the purpose
of diluted earnings
per share 87,946,671 87,946,671
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR LFMRTMBMMBPF
(END) Dow Jones Newswires
September 07, 2016 02:00 ET (06:00 GMT)
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