Likewise Group PLC FY23 Audited Final Results

RNS Number : 0053P

Likewise Group PLC

20 May 2024

 

 

 

20 May 2024

 

Likewise Group plc

 

("Likewise" or the "Group")

 

Audited Final Results for the year ended 31 December 2023

 

Business on track for £ 200 million in sales achieving first £1 million order intake
 in a single day

 

Likewise Group plc (AIM:LIKE), the fast growing UK floor coverings distributor, is pleased to announce its audited Final Results for the year ended 31 December 2023 ("FY23").

Financial Highlights

·      Group Sales increased 12.9% to £139.5 million (FY22: £123.6 million)

·      Underlying EBITDA of £7.9 million (FY22: £6.6 million)

·    Following further investment in infrastructure, Underlying Profit Before Tax of £2.32 million (FY22: £2.56 million)

·   Proposed Final Dividend of 0.25 pence per Ordinary Share, an increase of 25% (FY22: 0.20 pence). (Assuming shareholders approve the total dividend relating to FY23 will be 0.35 pence per Ordinary Share, being an overall increase of 75% compared with FY22*)

·     Completion of All Deferred Consideration Payments of £4.3 million post year end

·     During April 2024 the Group processed its first £1 million order intake in a single day

·   Group Sales to the end of April 2024 increasing by 8.7% and Sales in Likewise Branded businesses increasing by 15.3% compared with the prior year

Operational Highlights as at April 2024

·      11 Distribution and Logistics Centres created with total capacity at c.15 million cubic feet

·      80 Suppliers across key flooring products

·      94 Customer focused Management and Sales Executives

·      139 Delivery trucks providing next day service

·      507 Employees, with a significant majority with long-standing flooring experience

·      100,000's of point of sale items creating market presence

·      Over 5,000 Customers, principally independent flooring retailers and contractors

Chairman and Chief Executive Statement

Likewise is pleased to announce that total Revenue has increased by 12.9% to £139.5 million. The Group has continued to invest during 2023 and also into 2024 to further strengthen the Sales Resource and Logistics Infrastructure. Establishing this overall structure to enable the Group to achieve its medium term objectives inevitably impacts on short term profitability with Underlying Profit Before Tax for FY23 being £2.32 million. Whilst the Group will continue to invest, particularly in Sales Resource, the significant infrastructure costs are largely complete in this phase of our development.

The Group has again made significant progress in 2023, which has continued into the first four months of 2024, with Group Sales to the end of April increasing by 8.7% and Sales in Likewise Branded businesses increasing by 15.3% compared with the prior year. The Group continues to trade in line with current market expectations.

Logistics Network

The Glasgow Distribution Hub, opened in the Spring of 2023, is now making a meaningful contribution with regard to Storage, Picking and Cutting into the Likewise Logistics Network. Furthermore, Likewise Scotland is progressively increasing market share in both Residential and Commercial Flooring.

Likewise North East, which moved into a new Logistics Centre at the beginning of 2022 is now very clearly established across all flooring sectors and is well placed to progress its geographical presence.

Likewise North, based in Leeds, is particularly active throughout the M62 Corridor and with enhanced service to North West England through the new Manchester Logistics Centre. Further investment in sales resource and Point of Sale will continue to increase their market share in Residential and Commercial Flooring.

A&A will move into their new Logistics Centre in June. A&A has made an important contribution to the Group since being acquired in February 2020 and the new facility will allow A&A to make its next progression in both Residential and now Commercial Flooring.

Based in Birmingham, the Likewise Midlands business has made tremendous progress over the last two years and is now very much established as a principal distributor of Residential and Commercial Flooring throughout the Midlands.

Likewise South is progressively taking market share of Residential Flooring in the South of England and will benefit from the expansion of the Floors by Lewis Abbott Premium Branded Carpet.

Likewise London moved into a new Logistics Centre in Sidcup during January 2023 providing a much improved geographical reach and enhanced transportation network. To further develop Likewise London, investment has been made in 2024 to strengthen the Management and Sales Team.

Similarly from its Distribution Centre in Sudbury, Likewise South East invested further in its Management and Sales Team. This allows both businesses to significantly increase their presence in the important London and South East Flooring markets and also particularly benefiting from the Floors by Lewis Abbott product range.

Likewise Wales became operational in January 2024 from the Newport Distribution Centre and with the support of the Likewise Network has every opportunity to build a meaningful business in both Residential and Commercial Flooring.

Valley Wholesale Carpets ("Valley") is a very important part of the Group. The profitability and positive cash flow of Valley has been particularly strong in the last two years. Valley has extended its geographical reach over the last year and there are further opportunities to expand from its key Distribution Centres in Erith, Derby and Newport. Furthermore, Valley will increase its product portfolio and develop additional point of sale displays to provide an enlarged offering to their customers, enabling Valley to have an exciting future whilst remaining autonomous in the Group structure.

The H&V Carpets, Delta Carpets, Likewise Rugs and Matting and Floors by Lewis Abbott Premium Brand have every opportunity to further establish themselves in their respective products segments to be an increasing part of the Group's activities.

Dividend

Whilst the Group will continue to invest, the significant initial phase is now largely complete and therefore the Board is confident in expanding on the progressive policy previously announced by proposing a Final Dividend payment of 0.25 pence per ordinary share (FY22: 0.20 pence per ordinary share).

This makes the total dividend paid in the year of 0.35 pence per ordinary share (2022: 0.20* pence per ordinary share). This is a 75% increase on the FY22 Total Dividend, an encouraging reflection of the financial performance in 2023. The final dividend, if approved by shareholders at the AGM, will be paid on 5 July 2024 to shareholders on the register at the close of business on 31 May 2024, the ex-dividend date being 30 May 2024.

Shareholders can also take advantage of the Dividend Reinvestment Plan ("DRIP") by registering their intentions with the Company's registrar by 14 June 2024.

Outlook

Developing the Group's market presence is fundamental to achieving its aspirations with the 94 Sales Management and Sales Executives absolutely focused on their daily visits to independent flooring retailers and contractors to maximise the various Brands and in store displays.

To support these numerous sales initiatives, the Logistics Network is now very well established in both the Likewise Floors and Valley Operations with capacity created to extend the Group through its medium term objectives.

The quality of the infrastructure developed over the last three years was clearly demonstrated in early April when the Group was able to process a record order intake of over £1 million of Sales in a single day.

With a continued focus on investment in Sales Resource and Point of Sale combined with the additional capacity in the Logistics Infrastructure, the Board is confident of achieving its ambitions in the coming years. Notwithstanding some cost inflation, Sales progression in the near future will be delivered at a lower than historic percentage cost resulting in Operational Gearing and the Return on Sales meeting the aspirations of the Group.

The quality of the Management and Sales Teams created by the Group over the last three years is particularly impressive and in our opinion, the strongest in the UK Flooring Industry, providing the foundations for the Likewise Group to reach and then surpass its medium term intentions.

Tony Brewer, Chief Executive of Likewise Group plc, said:

"The Group has made significant progress in the last three years. The Board thanks the Management, Sales Teams and all Staff for their tremendous contribution to developing the Group and what has been achieved in such a short time.

Despite challenging market conditions, 2024 has started positively and we have every confidence of a successful year and most importantly another major step towards our medium term objectives.

The Group would also like to thank all our Suppliers, Customers and Shareholders for their support over the last few years and look forward to further strengthen those relationships to our mutual benefit."

*The 2022 interim dividend of 0.20 pence per ordinary share was the maiden dividend paid by the Group on 8 July 2022. Whilst this was paid as an interim dividend in 2022, it was in reflection of the Group's performance in the year ending 31 December 2021 for which no final dividend was declared. The Capital Reduction at the beginning of 2022 enabled a payment of a maiden dividend in respect of the Group's performance in 2021. Therefore, the total dividend for 2023 of 0.35 pence per ordinary share represents a 75% increase on the total dividend paid in respect of the performance of the Group in FY22 of 0.20 pence per ordinary share.

For further information, please contact:
Likewise Group plc Tony Brewer, Chief Executive	Tel: [phone]
Zeus (Nominated Adviser and Joint Broker) Jordan Warburton / David Foreman / James Edis (Investment Banking) Dominic King (Corporate Broking)	Tel: [phone]
WH Ireland (Joint Broker) Hugh Morgan / Antonio Bossi (Corporate Finance) Fraser Marshall / Harry Ansell (Corporate Broking)	Tel: [phone]
Ravenscroft (Joint Broker) Semelia Hamon (Corporate Finance)	Tel: [phone]
Novella Communications (Financial PR) Claire de Groot / Tim Robertson	Tel: [phone]

 

 

CAUTIONARY STATEMENT

 

 

Certain statements included or incorporated by reference within this announcement may constitute "forward-looking statements" in respect of the Group's operations, performance, prospects and/or financial condition. Forward-looking statements are sometimes, but not always, identified by their use of a date in the future or such words and words of similar meaning as "anticipates", "aims", "due", "could", "may", "will", "should", "expects", "believes", "intends", "plans", "potential", "targets", "goal" or "estimates". By their nature, forward-looking statements involve a number of risks, uncertainties and assumptions and actual results or events may differ materially from those expressed or implied by those statements. Accordingly, no assurance can be given that any particular expectation will be met and reliance should not be placed on any forward-looking statement. Additionally, forward-looking statements regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. No responsibility or obligation is accepted to update or revise any forward-looking statement resulting from new information, future events or otherwise. Nothing in this announcement should be construed as a profit forecast. This announcement does not constitute or form part of any offer or invitation to sell, or any solicitation of any offer to purchase any shares or other securities in the Group, nor shall it or any part of it or the fact of its distribution form the basis of, or be relied on in connection with, any contract or commitment or investment decisions relating thereto, nor does it constitute a recommendation regarding the shares or other securities of the Group. Past performance cannot be relied upon as a guide to future performance and persons needing advice should consult an independent financial adviser. Statements in this announcement reflect the knowledge and information available at the time of its preparation.

 

 

STRATEGIC REPORT

 

Business overview

 

Likewise Group plc is a wholesale distributor of floorcoverings, rugs and matting products and strives to become one of the UK's largest distributors in this sector. Leveraging the many years' experience and knowledge of the Board and the collective Management Team, the Group have rapidly developed a significant distribution network with 11 operational sites delivering to customers across the UK. This has been achieved through accretive acquisitions and more notably through the establishment of new sites, leveraging the brand and network to create meaningful businesses within their respective territories. The Board consider the logistics capabilities created can support the Group's medium‑term aspirations achieving revenues in excess of £200m.                                                                                                                                                                 

The Group's Distribution Hubs in Glasgow, Leeds, Birmingham and Sudbury, plus Distribution Centres in Manchester, Newcastle, Newbury and Sidcup in addition to the Valley Network in Erith, Derby and Newport totaling 15 million cubic feet, will allow the Group to meet its medium‑term objectives.

The Group will continue to make further investment in organic growth through sales and marketing initiatives and development in specific geographic locations. Whilst the Group sees incremental value in leveraging the Group's brand, acquisition opportunities will be considered in the future if they are earnings enhancing and provide the appropriate strategic rationale.

Trading performance

The directors are pleased to report the Group's revenue increased from £123.6m in 2022 to £139.5m for the year ended December 2023.

Likewise London, and Floors by Lewis Abbott moved into its newly refurbished Logistics Centre at the beginning of 2023 providing improved geographical reach, enhanced logistics capability and a better working environment for the local team. Further investment has been made in 2024 to further strengthen the Management and Sales Team.

Likewise South in Newbury established in April 2022 is progressively taking market share of residential flooring in the South of England and is benefitting from the development of the Floors by Lewis Abbott premium branded ranges.

Likewise Midlands has made tremendous progress over the past two years, and is now a principal distributor of both residential and commercial flooring throughout the midlands. In addition, with further investment in cutting capacity, the facility has strengthened the wider logistics network of benefit to both the Northern and Southern businesses maximising the Group's ability to provide a next day service of key benefit to customers.

In line with the strategic plan for A&A, the business appointed its first contract sales representative in Q4 2023, providing opportunity to expand its offering in 2024. The business is set to relocate to its new Logistics Centre in June 2024, enhancing the wellbeing of employees and enabling the facility to leverage the wider Likewise network to provide opportunities for growth.

The new Glasgow Distribution Hub, opened in Spring 2023 and now makes a meaningful contribution to the wider Group creating additional storage, picking and cutting capacity into the Likewise logistics network whilst also supporting the growth of the Likewise Scotland business established in 2019.

 

Further investment has been made in establishing a new Likewise Wales facility which became operational at the beginning of 2024, with the business benefitting from operating from the shared Valley site in Newport. With the investment in key personnel, and the support of the wider Likewise network, 2024 should provide many opportunities to considerably develop the business.

Likewise North East has developed a significant trade counter business benefitting from the wider support of both the Leeds and Scotland Distribution Hubs to allow it to continue to develop its geographical presence in the region.

Likewise North, operating from the Leeds Distribution Hub continues to be particularly active in the M62 corridor and now benefits from the distribution abilities of A&A in the Northwest, gaining more effective distribution routes for customers, whilst realising synergies for the Group.

Further investment in the Likewise South East Sales and Management Team continues to allow the business to expand its geographical reach with similar investments in London, positioning the Group as a major distributor in key London and South East markets.

Development of the Group's market presence is fundamental in delivering the medium‑term objectives of the Group and with input from the Sales Team, further development of in‑store displays and Point‑of‑Sale initiatives are critical in realising gains in market share.

Valley Wholesale Carpets (Valley) continues to be a key member of the Group, providing strong profitability and positive cash flows over the past two years since acquisition. Further investment has been made to Sales Teams to expand the business' Geographical reach, as well as investment in its previously unutilised Newport facility to bring this into operation to benefit customers in the South West and South Wales regions. Management are also increasing the current product range and developing new in‑store displays which will be of significant benefit to customers. This enables Valley to have an exciting future whilst remaining autonomous in the Group structure.

With a continued focus on investment in the development of the Group's market presence and Sales Resource, combined with the additional capacity forged in the Group's extensive distribution network, the Board is confident in achieving its medium‑term objectives in the coming years. Notwithstanding some cost inflation, the Board acknowledges with the significant establishment investment now made, the future development of the Group will result in improvements to operational gearing with return on sales meeting the aspirations of the Group.

Business strategy

It is the belief of the Board that value can be generated for suppliers, customers and shareholders by creating a national supplier and distributor of floorcoverings in the UK.

The investments made over the past few years in scaling the business have created a recognised trade brand within the sector. The leveraging of the Group's brand and logistics network have underpinned the success of many start‑up sites across the UK, and whilst acquisitions have provided opportunities to rapidly grow, the organic growth of the business is key to the long‑term strategy of the Group. Whilst acquisitions will always be considered where the Board believe they offer value for shareholders, and accretive growth to the Group, the ability to leverage the Group's brand and network will be key to achieving the medium‑term objectives.

Whilst there will be a level of investment required to continue the development of the Group's Sales initiatives, the significant investment in establishing the network needed to deliver the Group's medium‑term objectives has been made and as such there are now significant opportunities to improve operational gearing and thus increase return on sales in line with the aspirations of the Group.

Market and competition

The floorcovering market is made up of manufacturers, distributors, retailers and installers. It is the strategy of the Group to become a national distributor in the market. The UK flooring market is worth c. £2 billion split between residential, commercial, public and industrial markets. It is the strategy of the Group to focus on the residential and commercial areas of the market.

 

Key performance indicators

 

The Board consider the following as financial key performance indicators (KPIs) for the Group: revenue, adjusted profit before tax and operating cash flow. The Board members review these for each of the businesses on a monthly basis. Individual subsidiaries have additional key performance indicators specific to their operations. Sales and margin are also monitored against budget on a daily basis by the executive management team. Key performance indicators were as follows:

 

Currency: £m	Year ended 31 December 2023 £	Year ended 31 December 2022  £	Increase %
Revenue	139.5	123.6	12.9%
Adjusted profit before tax	2.3	2.6	(9.0%)
Operating cash flow	6.1	(1.3)	556.5%

The above adjusted profit before tax figure is stated after adding back:

 

Currency: £m	Year ended 31 December 2023 £	Year ended 31 December 2022 £
Acquisition fees & related costs	‑	2.3
Loss from new operations*	0.1	0.5
Exceptional investment in point of sale	0.3	0.5
Amortisation of intangibles	0.4	0.4
Share based payments	0.3	0.3
Strategic relocation and establishment costs	1.2	‑

*Losses from new operations relate to costs incurred in the initial start‑up phase whilst the business is in its initial development phase and therefore not generating significant returns.

Exceptional investment in point of sale relate to accelerated expenses incurred in increasing the Group's market presence from providing heavily discounted in‑store displays to retailers in order to accelerate the growth in market share. This amount relates to specific strategic stand placements over and above what is incurred in the ordinary course of business recognised in the Consolidated Statement of Profit or Loss.

Strategic relocation and establishment costs relate to costs incurred in the relocation and establishment of the new 47,000 sq. ft. high bay Distribution Hub in Glasgow for Likewise Scotland, the relocation and establishment of the Likewise London business to new facilities in Sidcup, the commencement of costs incurred in the forthcoming closure of the A&A Manchester facility as this looks forward to moving to brand new facilities in June 2024 and closure costs incurred for H&V's small warehouse facility in Muelebeke, Belgium.

The Board additionally monitors the square footage of available warehouse space as a non financial KPI. The warehouse capacity as at 31 December 2023 was 499,250 square feet (2022 ‑ 519,000 square feet). This has slightly reduced since 2022 following the closure of the underutilised H&V Muelebeke site.

 

The following tables show a reconciliation of the adjusted results.

Currency: £m		2023				2022*
		Underlying	Non-underlying**	Total		Underlying	Non-underlying**	Total
Revenue		139.5	-	139.5		123.6	-	123.6
Cost of sales		(97.3)		(97.3)		(86.3)	-	(86.3)
Gross profit		42.2		42.2		37.3	-	37.3
Other operating income		-	-	-		-	-	-
Admin costs		(20.6)	(1.9)	(22.5)		(16.8)	(3.1)	(19.9)
Distribution costs		(17.8)	(0.2)	(18.0)		(17.0)	-	(17.0)
Impairment loses on trade receivables		(0.3)	-	(0.3)		(0.2)	-	(0.2)
Profit/(loss) from operations		3.5	(2.0)	1.5		3.4	(3.1)	0.2
Finance income		0.1	-	0.1		0.0	-	0.0
Finance costs		(1.3)	(0.2)	(1.5)		(0.8)	-	(0.8)
Gain/(Loss) on revaluation		-	0.1	0.1		-	(0.8)	(0.8)
Profit/(loss) before tax		2.3	(2.1)	0.2		2.6	(3.9)	(1.4)
Taxation		0.7	-	0.7		0.6	-	0.6
Profit/(loss) for the year		3.1	(3.9)	0.8		3.1	(3.9)	(0.8)

 

* As restated to align treatment with that of the year-end financial statements.

 

**Non‐underlying values are exceptional items, which include share based payment transactions, acquisition costs, amortisation of acquisition intangibles and strategic project costs. Adjusted results are non‐GAAP metrics used by management and are not an IFRS disclosure. Details of these charges can be seen in note 7 in the accounts below.

 

 

Financial Results and Ordinary Dividend

The results of the Group are shown in the Consolidated Statement of Profit or Loss and Other Comprehensive Income.

An interim dividend of 0.10p per ordinary share was paid on 17 November 2023 to shareholders on the register as at 13 October 2023.

A final dividend, in relation to the year ended 31 December 2022, of 0.20p per share was paid on 7th July 2023 to shareholders on the register at the close of business on 2nd June 2023, the ex‑dividend date being 1st June 2023.

The directors propose to pay a final dividend of 0.25p per ordinary share in respect of the financial year ended 31 December 2023. This to be subject to shareholder approval at the forthcoming AGM.

If approved, the total dividend payable for 2023 will be 0.35p per ordinary share.

The final dividend, if approved by shareholders at the AGM will be paid on 5 July 2024 to shareholders on the register at the close of business on 31 May 2024, the ex‑dividend date being 30 May 2024.

The last day for investors to elect for the Dividend Re‑Investment Plan (DRIP) will be 14 June 2024.

 

Consolidated statement of profit and loss and other comprehensive income for the year ended 31 December 2023

							As restated
						2023	2022
					Note	£	£
Revenue				6		139,538,014	123,642,673
Cost of sales						(97,306,471)	(86,309,299)
Gross profit						42,231,543	37,333,374
Administrative expenses						(22,481,980)	(19,914,378)
Distribution expenses						(17,989,409)	(16,956,934)
Impairment losses on trade receivables						(266,087)	(238,201)
Profit from operations						1,494,067	223,861
Finance income				10		52,330	5,043
Finance expense				10		(1,487,716)	(796,843)
Gain/(loss) on revaluation of consideration on acquisition						129,750	(846,380)
Profit/(loss) before tax						188,431	(1,414,319)
Taxation				11		655,594	578,015
Profit/(loss) for the year						844,025	(836,304)
Other comprehensive income:
Items that will not be reclassified to profit or loss:
Revaluation of land and buildings				14		24,389	309,957
Actuarial loss on defined benefit schemes				33		-	(5,000)
Tax relating to revaluation of land and buildings				11		(6,097)	-
						18,292	304,957
Items that will or may be reclassified to profit or loss:
Exchange (losses)/gains arising on translation on foreign operations						(7,015)	16,138
Total comprehensive income						855,302	(515,209)

 

The total basic profit per share attributable to the ordinary equity holders of the Company was 0.3p (2022 ‑ loss of 0.3p). The total diluted profit per share attributable to the ordinary equity holders of the Company was 0.3p (2022 ‑ loss of 0.3p). The restatement of the 2022 comparative figures has no impact to the loss reported for the year ended 31 December 2022. Please see note two for further information.

 

 

 

Consolidated statement of financial position as at 31 December 2023

 

		2023	2022
Note		£	£
Assets
Non‑current assets
Property, plant and equipment	14	48,385,689	47,300,221
Other intangible assets	15	3,938,497	4,208,884
Goodwill	16	5,624,284	5,624,284
		57,948,470	57,133,389
Current assets
Inventories	18	20,253,799	18,388,527
Trade and other receivables	19	17,679,986	15,573,303
Cash and cash equivalents	20	5,709,229	5,913,155
		43,643,014	39,874,985
Total assets		101,591,484	97,008,374
Liabilities
Non‑current liabilities
Trade and other liabilities	21	-	4,380,365
Loans and borrowings	22	20,743,819	20,222,050
Deferred tax liability	11	1,866,950	2,496,677
		22,610,769	27,099,092
Current liabilities
Trade and other liabilities	21	29,765,971	22,970,426
Loans and borrowings	22	9,647,060	7,777,512
Provisions	25	45,103	50,075
		39,458,134	30,798,013
Total liabilities		62,068,903	57,897,105
Net assets		39,522,581	39,111,269

 

Share capital	28	2,439,645	2,438,360
Share premium	29	17,396,190	17,384,625
Share option reserve	34	903,295	628,454
Revaluation reserve		2,626,976	2,662,384
Foreign exchange reserve		(47,502)	(40,487)
Warrant reserve		128,170	128,170
Retained earnings		16,075,807	15,909,763
Total equity		39,522,581	39,111,269

 

 

 

Consolidated statement of changes in equity for the year ended 31 December 2023

 

 

	Share capital	Share premium	Share option reserve	Revaluation reserve	Foreign exchange reserve	Warrant reserve	Retained earnings	Total attributable to equity holders of parent	Total equity
	£	£	£	£	£	£	£	£	£
At 1 January 2023	2,438,360	17,384,625	628,454	2,662,384	(40,487)	128,170	15,909,763	39,111,269	39,111,269
Profit for the year	-	-	-	-	-	-	844,025	844,025	844,025
Other comprehensive income (see note 32)	-	-	-	(35,408)	(7,015)	-	53,700	11,277	11,277
Total comprehensive income for the year	-	-	-	(35,408)	(7,015)	-	897,725	855,302	855,302
Dividends	-	-	-	-	-	-	(731,681)	(731,681)	(731,681)
Shares options exercised	1,285	11,565	-	-	-	-	-	12,850	12,850
Share options and warrants issued	-	-	274,841	-	-	-	-	274,841	274,841
Total contributions by and distributions to owners	1,285	11,565	274,841	-	-	-	(731,681)	(443,990)	(443,990)
At 31 December 2023	2,439,645	17,396,190	903,295	2,626,976	(47,502)	128,170	16,075,807	39,522,581	39,522,581

 

 

 

 

Consolidated statement of changes in equity for the year ended 31 December 2022

 

 

	Share capital	Share premium	Share option reserve	Revaluation reserve	Foreign exchange reserve	Warrant reserve	Retained earnings	Total attributable to equity holders of parent	Total equity
	£	£	£	£	£	£	£	£	£
At 1 January 2022	1,923,742	22,458,816	308,776	2,406,127	(56,625)	128,170	(4,815,043)	22,353,963	22,353,963
Loss for the year	-	-	-	-	-	-	(836,304)	(836,304)	(836,304)
Other comprehensive income (see note 32)	-	-	-	256,257	16,138	-	48,700	321,095	321,095
Total comprehensive income for the year	-	-	-	256,257	16,138	-	(787,604)	(515,209)	(515,209)
Dividends	-	-	-	-	-	-	(487,590)	(487,590)	(487,590)
Issue of share capital	512,143	17,425,358	-	-	-	-	-	17,937,501	17,937,501
Share options exercised	2,475	22,550	-	-	-	-	-	25,025	25,025
Transfer to retained earnings	-	-	-	-	-	-	22,000,000	22,000,000	22,000,000
Reduction in share premium	-	(22,000,000)	-	-	-	-	-	(22,000,000)	(22,000,000)
Share issue costs	-	(522,099)	-	-	-	-	-	(522,099)	(522,099)
Share options	-	-	319,678	-	-	-	-	319,678	319,678
Total contributions by and distributions to owners	514,618	(5,074,191)	319,678	-	-	-	21,512,410	17,272,515	17,272,515
At 31 December 2022	2,438,360	17,384,625	628,454	2,662,384	(40,487)	128,170	15,909,763	39,111,269	39,111,269

 

 

 

Consolidated statement of cash flows for the year ended 31 December 2023

 

					2023	2022
					£	£
Cash flows from operating activities
Profit/(loss) for the year					844,025	(836,304)
Adjustments for
Depreciation and amortisation				14/15	4,924,947	3,633,356
Revaluation of consideration					(129,750)	846,380
Taxation				11	(655,594)	(578,015)
Finance income				10	(52,330)	(5,043)
Finance costs				10	1,487,716	796,843
Amendments to property, plant and equipment					(107,072)	-
Gain on sale of property, plant and equipment					(110,898)	(35,193)
Defined benefit pension contributions				33	-	(5,000)
Decrease in provisions				25	(4,972)	(152,601)
Share options issued				34	274,841	319,678
Net foreign exchange (gain)/loss					(7,015)	15,429
					6,463,898	3,999,530
Movements in working capital:
Increase in trade and other receivables					(2,106,683)	(3,624,487)
Increase in inventories					(1,865,272)	(4,437,276)
Increase in trade and other payables					3,544,930	3,249,449
Cash generated from operations					6,036,873	(812,784)
Corporation taxes received/(paid)					19,770	(514,040)
Net cash from/(used in) operating activities					6,056,643	(1,326,824)
Cash flows from investing activities
Acquisition of subsidiary, net of cash acquired					-	(13,541,050)
Purchases of property, plant and equipment					(1,895,323)	(2,001,322)
Proceeds from disposal of property, plant and equipment					206,965	76,424
Purchase of intangibles				15	(133,983)	-
Deferred consideration paid					(1,000,000)	-
Interest received				10	52,330	5,043
Net cash used in investing activities					(2,770,011)	(15,460,905)
Cash flows from financing activities
Interest paid				10	(449,168)	(225,834)
Consideration for new shares					12,850	16,025,026
Costs of share issue					-	(522,099)
Repayment of lease liabilities					(3,886,917)	(2,448,536)
Increase in invoice discounting					766,116	2,029,473
Repayment of loans					(1,696,758)	(117,106)
New bank loans					2,495,000	-
Dividends paid to the holders of the parent				13	(731,681)	(487,590)
Net cash (used in)/from financing activities					(3,490,558)	14,253,334
Net decrease in cash and cash equivalents					(203,926)	(2,534,395)
Cash and cash equivalents at the beginning of year					5,913,155	8,447,550
Cash and cash equivalents at the end of the year					5,709,229	5,913,155

 

 

Cash and cash equivalents at 31 December 2023 of £5,709,229 (2022 ‑ £5,913,155) comprised of cash and cash equivalents of £5,709,229 (2022 ‑ £5,913,155) less bank overdrafts of £Nil (2022 ‑ £Nil).

 

 

Notes to the consolidated financial statements for the year ended 31 December 2023

 

 

1.

General information

The Company is a public company limited by shares, registered in England and Wales and listed on the Alternative Investment Market (AIM). The registered company number is 08010067 and the address of the registered office is Unit 4 Radial Park, Radial Way, Birmingham Business Park, Solihull, England, B37 7WN.

The principal activity of the Group is the wholesale distribution of floorcoverings and associated products.

 

2.	Restatement of prior period

Management have restated the prior period comparatives within the subsidiary companies Valley Wholesale Carpets Limited and Likewise Floors Limited to ensure that classification of cost of sales, distribution expenses and administrative expenses are in line with the classifications of Likewise Group Plc.

The impact of this has been to:

‑ decrease cost of sales by £863,145 from £87,172,444 to £86,309,299
‑ increase administrative expenses by £944,768 from £18,969,610 to £19,914,378
‑ decrease distribution expenses by £81,623 from £17,038,557 to £16,956,934

There have been no amendments to the prior period Statement of Financial Position as a result of these reclassifications.

 

3.	Basis of preparation

These financial statements consolidate those of the Company and its subsidiaries (together referred to as the "Group"). The Parent Company financial statements present information about the Company as a separate entity.

The financial information is presented in pounds sterling, which is the functional currency of the entity and rounded to the nearest £. The financial statements are prepared on the historical cost basis unless otherwise specified within these accounting policies.

Both the Company and consolidated financial statements have been prepared and approved by the directors in accordance with UK adopted International Accounting Standards. On publishing the Company financial statements here together with the consolidated financial statements, the Company is taking advantage of the exemption in s408 of the Companies Act 2006 not to present its individual income statement and statement of comprehensive income and related notes.

The accounting policies set out below have been applied consistently to all periods presented in these financial statements.

 

 

4.       Accounting policies

 

4.1

Going concern

The consolidated financial statements for the Group have been prepared on a going concern basis.

The Group continues to utilise invoice financing arrangements in some subsidiaries and has the option to draw on additional authorised facilities to support working capital requirements. The Group has operated within these facilities throughout the year and continues to do so in 2024. The directors are confident that the Group will be able to operate within the finance facilities available to us.

The Board have also undertaken assessments of going concern by building a cash flow model through to December 2025, based on 2023 actuals, 2024 budget and forecast performance for 2025. These cashflows indicate that the business has adequate resources to continue to operate for the foreseeable future and within the current financing arrangements in place.

Overall, given the strength of the Group's balance sheet, significant cash reserves on hand, availability of financing arrangements and the strong forecast performance of the Group, this provides the directors with sufficient assurance on the Group's ability to continue as a going concern, and therefore adopt the going concern basis of accounting in preparing the financial statements.

 

4.2

Basis of consolidation

Subsidiaries are entities controlled by the Group. Control exists when the Group has the power to govern the financial and operating policies of an investee so as to obtain benefits from its activities, has exposure, or rights, to variable returns and can use its power to affect those returns. In assessing control, potential voting rights that are currently exercisable are taken into account. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.

 

4.3

Impact of new international reporting standards

There were a number of narrow scope amendments to existing standards which were effective from 1 January 2023. None of these had an impact on the Group.

Certain new accounting standards, amendments to accounting standards and interpretations have been published that are not mandatory for 31 December 2023 reporting periods and have not been early adopted by the Group. These standards, amendments or interpretations are not expected to have a material impact on the Group in the current or future reporting periods and on foreseeable future transactions.

 

4.4

Revenue

Revenue comprises sales of goods to customers outside the Group, less an appropriate deduction for discounts, and is stated at the fair value of the consideration net of value added tax and other sales taxes.

Revenue and receivables are recognised when performance obligations are satisfied and the goods are delivered to customers as this is the point in time that the consideration is unconditional, control of goods has passed and only the passage of time is required before the payment is due.

 

4.5

Finance income and costs

Interest income and expense is recognised using the effective interest method which calculates the amortised cost of a financial asset or liability and allocates the interest income or expense over the relevant period.

 

4.6

Property, plant and equipment

Property, plant and equipment under the cost model are stated at historical cost less depreciation less any recognised impairment losses. Cost includes expenditure that is directly attributable to the acquisition or construction of these items. Subsequent costs are included in the asset's carrying amount only when it is probable that future economic benefits associated with the item will flow to the company and the costs can be measured reliably. All other costs, including repairs and maintenance costs, are charged to the Income Statement in the period in which they are incurred.

Depreciation is provided on all property, plant and equipment and is calculated as follows:

Freehold property ‑ 2% straight line
Leasehold improvements ‑ straight line over the term of the lease
Plant and machinery ‑ 10% ‑ 33% straight line
Motor vehicles ‑ 20% ‑ 50% straight line
Fixtures, fittings and computer equipment ‑ 10% ‑ 33% straight line

 

Depreciation is provided on cost less residual value. The residual value, depreciation methods and useful lives are annually reassessed.

Each asset's estimated useful life has been assessed with regard to its own physical life limitations and to possible future variations in those assessments. Estimates of remaining useful lives are made on a regular basis for all machinery and equipment, with annual reassessments for major items. Changes in estimates are accounted for prospectively.

The gain or loss arising on disposal or scrapping of an asset is determined as the difference between the sales proceeds, net of selling costs, and the carrying amount of the asset and is recognised in the Income Statement.

 

4.7

Revaluation of property

Individual properties are carried at current year value at fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are undertaken with sufficient regularity to ensure the carrying amount does not differ materially from that which would be determined using fair value at the Consolidated Statement of Financial Position date.

Fair values are determined from market based evidence normally undertaken by professionally qualified valuers.

Revaluation gains and losses are recognised in Other Comprehensive Income unless losses exceed the previously recognised gains or reflect a clear consumption of economic benefits, in which case the excess losses are recognised in the Income Statement.

The difference between depreciation based on the revalued carrying amount of the asset and depreciation based on the asset's original cost is transferred from revaluation reserve to retained earnings at the end of each reporting period. Any remaining revaluation surplus included in equity is transferred directly to retained earnings when the asset is disposed of.

 

4.8

Impairment of non‑financial assets (excluding Goodwill)

At each reporting date, the directors review the carrying amounts of the Group's non current assets, to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss, if any. Where the asset does not generate cash flows that are independent from other assets, the directors estimate the recoverable amount of the cash generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset or cash generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash generating unit is reduced to its recoverable amount. The impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata based on the carrying amount of each asset in the unit.

An impairment loss is recognised as an expense immediately.

 

Where an impairment loss on non financial assets subsequently reverses, the carrying amount of the asset or cash generating unit is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset or cash generating unit in prior periods. A reversal of an impairment loss is recognised in the Income Statement immediately.

 

4.9

Inventories

Inventory is valued at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.

At each reporting date, inventories are assessed for impairment. If inventories are impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in the Income Statement.

 

4.10

Cash and cash equivalents

Cash at bank comprise cash on hand, deposits held at call with banks and other short term highly liquid investments with original maturities of three months or less from inception.

 

4.11

Financial instruments

Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the financial instrument.

Financial assets and financial liabilities are measured initially at fair value plus transactions costs. Financial assets and financial liabilities are measured subsequently as described below.

Cash equivalents comprise short‑term, highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value. An investment with a maturity of three months or less is normally classified as being short‑term.

Derivatives, including forward foreign exchange contracts, are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re‑measured at their fair value. Changes in the fair value of derivatives are recognised in the Income Statement in finance costs or income as appropriate.

 

4.12

Financial assets

Trade and other receivables are recorded initially at transaction price and subsequently measured at amortised cost. This results in their recognition at nominal value less an allowance for any doubtful debts. This allowance for expected credit losses (ECL) may be established where evidence of credit deterioration is observed. In order to assess credit deterioration, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on its historical experience and informed credit assessment, that includes forward‑looking information. An additional reserve is established, where required, when a loss is both probable and the amount is known.

ECLs are a probability‑weighted estimate of lifetime credit losses. Under the ECL model, the Group calculates the allowance for credit losses by considering on a discounted basis the cash shortfalls it would incur in various default scenarios for prescribed future periods and multiplying the shortfalls by the probability of each scenario occurring. The allowance is the sum of these probability weighted outcomes. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the entity in accordance with the contract and the cash flows that Group expects to receive) with a discount factor applied to such overdue amounts. The discount matrix ("ECL Matrix") below is applied to derive an ECL for overdue amounts:

Past due (days)                         31‑60           61‑90           90‑120          120‑250     Over 250
Discount to Amounts Overdue   0%               0%               5%               50%           100%

 

The Group exercises its discretion in the application of discounts outside of the ECL Matrix based on extenuating circumstances that may apply from time to time to the Group's trade receivables (see note 19). An example of such an extenuating circumstance may occur when it is known that an overdue amount will be collected post a reporting or measurement date.

 

4.13

Financial liabilities

The Group's financial liabilities include trade and other payables and borrowings.

Interest bearing bank loans and overdrafts are initially recorded at fair value, which equals the proceeds received, net of direct interest costs. They are subsequently held at amortised cost. Finance charges, including premiums payable on settlement or redemption are accounted for using an effective interest rate method and are added to or deducted from the carrying amount of the instrument to the extent that they are not settled in the period in which they arise.

Trade and other payables are recognised initially at fair value and subsequently measured at amortised cost. Generally, this results in their recognition at their nominal value.

 

4.14

Foreign currency

The presentation currency for the Group's financial information is pounds sterling.

Transactions in foreign currencies are recorded using the rate of exchange ruling at the date of the transaction. Any gain or loss on translation of monetary foreign currency assets and liabilities arising from a movement in exchange rates subsequent to initial measurement is included as an exchange gain or loss in the Consolidated Statement of Profit or Loss.

The assets and liabilities of overseas subsidiary undertakings are translated at the closing exchange rate. Income Statements and cash flows of such subsidiaries are translated into Sterling at the average rates of exchange. The adjustments to period end rates are taken to foreign exchange reserve in equity and reported in the Other Comprehensive Income.

 

4.15

Taxation

Current taxation
Current taxation is based on the local taxable income at the local statutory tax rate enacted or substantively enacted at the reporting date and includes adjustments to tax payable or recoverable in respect of previous periods.                                                                                          

 

Deferred taxation
Deferred taxation is calculated using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the historical financial information. However, if the deferred tax arises from the initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss and does not give rise to equal taxable and deductible temporary differences, it is not accounted for. No deferred tax is recognised on initial recognition of goodwill or on investment in subsidiaries. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the year end date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.

Deferred tax liabilities are provided in full, and are not discounted.

Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilised.

Changes in deferred tax assets or liabilities are recognised as a component of tax expense in the Income Statement, except where they relate to items that are charged or credited directly to equity in which case the related deferred tax is also charged or credited directly to equity.

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income tax assets and liabilities relate to income taxes levied by the same taxation authority where there is an intention to settle the balances on a net basis.

 

4.16

Business combination

The acquisition method of accounting is used to account for all business combinations, regardless of whether equity instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the:

‑ fair values of the assets transferred
‑ liabilities incurred to the former owners of the acquired business
‑ equity interests issued by the Group
‑ fair value of any asset or liability resulting from a contingent consideration arrangement, and
‑ fair value of any pre‑existing equity interest in the subsidiary.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date.

Acquisition related costs are expensed as incurred.

The excess of the consideration transferred and acquisition date fair value of any previous equity interest in the acquired entity over the fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the business acquired, the difference is recognised directly in the Income Statement as a bargain purchase.

Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the entity's incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions.

Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are subsequently remeasured to fair value with changes in fair value recognised in the Income Statement.

 

4.17

Goodwill

Goodwill is initially recognised and measured as set out above.

Goodwill not attributed to a specific intangible asset is not amortised but is reviewed for impairment at least annually. For the purpose of impairment testing, goodwill is allocated to each of the Group's cash generating units expected to benefit from the synergies of the combination. If the recoverable value of the cash generating unit is less than the carrying amount of goodwill, the impairment loss is recognised. An impairment loss recognised for goodwill is not reversed in a subsequent period.

On disposal of a cash generating unit, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.

 

		4.18	Intangible assets
	Other intangible assets

Goodwill attributable to the brand name of acquired subsidiaries or customer base is initially recognised
and measured as set out above. Licences are initially recognised at cost.

Amortisation is provided on all other intangible assets and is calculated as follows:

 

		Brand name	10 ‑ 15 years straight line
		Customer base	10 ‑ 15 years straight line
		Software	10 years straight line

 

The useful lives of intangible assets are annually reassessed and all assets are reviewed for impairment at least annually. On disposal of a subsidiary, the attributable amount of intangible assets is included in the determination of the profit or loss on disposal.

 

4.19

Employment benefits

Provision is made in the financial statements for all employee benefits. Liabilities for wages and salaries, including non monetary benefits and annual leave obliged to be settled within 12 months of the reporting date, are recognised in accruals.

Contributions to defined contribution pension plans are charged to the Statement of Profit or Loss in the year to which the contributions relate.

Likewise Floors Limited, a subsidiary of the Group operates a defined benefit pension plan for certain employees.

The amount recognised in the Consolidated Statement of Financial Position in respect of the defined benefit plan is the present value of the defined benefit obligation at the end of the reporting date less the fair value of plan assets at the reporting date (if any) out of which the obligations are to be settled.

The defined benefit obligation is calculated using the projected unit credit method. Annually the Group engages independent actuaries to calculate the obligation. The present value is determined by discounting the estimated future payments using market yields on high quality corporate bonds that are denominated in sterling and that have terms approximating to the estimated period of the future payments ('discount rate').

Where the calculation results in a benefit to the Group, the asset recognised is limited to the present value of any future refunds from the plan or reductions in future contributions to the plan.

 

4.20

Leases

The Group assesses whether a contract is or contains a lease, at inception of the contract. The Group recognises a right‑of‑use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short‑term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets. For these leases, the Group recognises the lease payments as an operating expense on a straight line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Group uses its incremental borrowing rate.

The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.

Right‑of‑use assets are depreciated over the shorter period of lease term and useful life of the underlying asset.

 

4.21

Borrowing costs

Borrowing costs are recognised in the Statement of Profit or Loss in the year in which they are incurred.

 

4.22

Share based payments

The fair value of equity instruments granted to employees is charged to the Statement of Comprehensive Income, with a corresponding increase in equity. The fair value of share options is measured at grant date using the Black‑Scholes pricing model and spread over the period during which the employee becomes unconditionally entitled to the award. The charge is adjusted to reflect the number of shares or options that vest.

 

4.23

Invoice discounting

The Group has an invoice discounting arrangement. The amount owed by customers to the Group are included within trade receivables and the amount owed to the invoice discounting company is included within borrowings. The amount owed to the invoice discounting company represents the difference between the amounts advanced by the invoice discounting company and the invoices discounted. The interest element of the invoice discounting charges and other related costs are recognised as they accrue and are included in the Income Statement with other finance costs.

 

4.24

Segment reporting

An operating segment is a component of an entity that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses related to transactions with other components of the same entity), whose operating results are regularly reviewed by the entity's Chief Operating Decision Maker to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available. The Chief Operating Decision Maker has been identified as the board of executive directors, at which level strategic decisions are made.

Details of the Group's reporting segments are provided in note 6.

 

4.25

Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

 

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).

 

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

 

5.	Judgements and key sources of estimation uncertainty

         

The preparation of the financial statements, in conformity with adopted IFRSs requires management to make judgements, estimates and assumptions that affect the carrying amounts of assets and liabilities at the date of these financial statements and the reported amount of revenues and expenses during the period. These judgements, estimates and assumptions are continually evaluated by management and are based upon historical experiences and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The key assumptions concerning the future and other key sources of estimation uncertainty at the statement of financial position date, that have a risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial period are as follows:

 

          Contingent consideration

 

Contingent consideration may be payable in respect of acquisitions and is calculated with reference to the Likewise Group Plc share price at a future determination date. The fair value of contingent consideration at the date of acquisition and subsequent remeasurement dates requires significant judgements and estimates and is sensitive to share price changes.

 

          Intangible assets

 

The Group recognises identifiable intangible assets, such as brands and customer relationships, at fair value on acquisition of the relevant subsidiaries. Any excess paid over the value of net assets acquired is recognised as Goodwill in the Consolidated Statement of Financial Position and is allocated to the appropriate business.

The annual amortisation charge and useful life is based on the period over which management expects to benefit from the intangible assets, based on past experience and knowledge of the business acquired.

 

          Goodwill

 

Goodwill is recognised on acquisition of subsidiaries. This value is the excess paid over the net assets acquired which cannot be separately identified as an intangible asset. Goodwill is not amortised but is subject to an annual impairment review.

The impairment assessment compares the carrying value of Goodwill with its recoverable amount. The recoverable amount is determined by performing a discounted cash flow (DCF) analysis of the Cash Generating Unit (CGU) with reference to divisional budgets prepared by management. To prepare the DCF, management are required to use estimates and judgement for the parameters applied to the model of growth and termination growth rate percentages along with the discount factor. The percentages used to calculate the growth rates are based on prior performance along with budgets for the coming year. The discount factor is based on the proportion of the company's cost of capital weighted between the use of debt and equity finance.

 

          Impairment of trade receivables

 

Trade and other receivables are recognised at nominal value less an allowance for doubtful debts. This allowance for expected credit losses (ECL) may be established where evidence of credit deterioration is observed. In order to assess credit deterioration, the directors use reasonable and supportable information that is relevant and available without undue cost or effort. This includes the directors assessment of both quantitative and qualitative information and analysis, based on its historical experience and informed credit assessment, that includes forward‑looking information. An additional reserve is established, where required, when the directors consider that a loss is both probable and the amount is known. See notes 4.12 and 19 for further information.

 

          Inventory valuation

 

Inventories are stated at the lower of cost and the estimated selling price less costs to complete and sell.

Inventory provisions are recognised to provide for short length stock dependant on its length and using the directors judgement of likely future sale to calculate it's likely realisable value. In addition, a provision is recognised for any aged stock, on an increasing basis, once it's been held in inventory for at least one year.

A significant shift in consumer market or customer demand may result in the directors inclusion of an additional specific provision based on their assessment of likely future sale.

 

          Valuation of land and buildings

 

The Group carries its land and buildings at fair value, with changes in fair value being recognised in Other Comprehensive Income unless losses exceed the previously recognised gains or reflect a clear consumption of economic benefits, in which case the excess losses are recognised in the Income Statement. The Group engaged independent valuation specialists to determine fair value. Significant changes in the commercial property market may impact the valuation of the Group's property. See note 14 for further information.

 

6.	Segmental reporting
	For the purposes of segmental reporting, the Group's Chief Operating Decision Maker (CODM) is considered to be the executive board of directors. The board has not identified any separate operating segments within the business. The board reviews revenue and expenses for the business as a whole and makes decisions about resources and assesses performance based on this information. Revenue arises entirely through the wholesale of goods. Segmental analysis is therefore not presented. The Group is not reliant on any one customer and no customer exceeds 10% of total annual turnover.
	The following is an analysis of the Group's revenue for the year from continuing operations:
					2023	2022
					£	£
	Sale of goods				139,538,014	123,642,673
					139,538,014	123,642,673

 

	The Group generates revenue from both the UK and overseas as detailed below:
					2023	2022
					£	£
	United Kingdom				139,297,993	123,432,273
	Rest of Europe				229,533	182,417
	Rest of the world				10,488	27,983
					139,538,014	123,642,673

 

7.	Operating profit
	Operating profit is stated after charging:
					2023	2022
					£	£
	Depreciation of property, plant and equipment				1,496,198	1,217,258
	Depreciation of right‑of‑use assets				3,024,379	2,049,591
	(Profit)/loss on foreign exchange				(331)	31,229
	Short term lease expense:
	‑ plant				172,446	174,539
	‑ property				188,500	150,000
	Amortisation of intangible assets				404,370	366,507
	Share based payments				274,841	319,678
	Loss from new operations				95,466	497,968
	Exceptional investment in point of sale				283,933	486,536
	Strategic location and establishment costs				852,200	-
	Acquisition fees and related costs				-	1,455,992

 

Losses from new operations relate to costs incurred in the initial start‑up phase whilst the business is in its initial development phase and therefore not generating significant returns. Exceptional investment in point of sale relate to accelerated expenses incurred in increasing the Group's market presence from providing heavily discounted in‑store displays to retailers in order to accelerate the growth in market share. This amount relates to specific strategic stand placements over and above what is incurred in the ordinary course of business recognised in the Consolidated Statement of Profit or Loss. Strategic relocation and establishment costs relate to costs incurred in the relocation and establishment of the new 47,000 sq. ft. high bay Distribution Hub in Glasgow for Likewise Scotland, the relocation and establishment of the Likewise London business to new facilities in Sidcup, the commencement of costs incurred in the forthcoming closure of the A&A Manchester facility as this looks forward to moving to brand new facilities in June 2024 and closure costs incurred for H&V's small warehouse facility in Muelebeke, Belgium. Additionally, extra depreciation costs of £144,845 and extra interest costs of £213,005 were incurred bringing total strategic relocation and establishment costs to £1,210,050 as noted in the Strategic Report. Acquisition costs related to the acquisition of Valley Wholesale Carpets and Delta Carpets in the prior year.

 

8.	Auditors' remuneration
					2023	2022
					£	£
	Fees payable to the Group's auditors for the audit of the Group's financial statements				150,000	150,000
	Fees payable to the Group's auditors:
	‑ taxation advisory services				-	500
	‑ work in respect of acquisition due diligence				-	62,000
9.	Directors and employees
	Group
					2023	2022
					£	£
	Employee benefit expenses (including directors) comprise:
	Wages and salaries				18,215,855	16,289,890
	National insurance				1,946,475	1,722,647
	Defined contribution pension cost				513,550	500,267
	Compensation for loss of office				-	15,541
	Share based payment expenses				274,841	319,678
					20,950,721	18,848,023

 

	Key management personnel compensation   Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Group, including the directors of the Company listed on page 1, and other senior management.
					2023	2022
					£	£
	Salary				1,159,356	1,703,375
	Social security costs				147,521	214,322
	Group pension contribution to defined contribution schemes				61,350	61,350
	Share based payments				68,462	82,468
					1,436,689	2,061,515

 

	As at 31 December 2023, 1,285,714 share options remained active under the Group's SAYE scheme (2022 ‑ 1,285,714). During the year no options were granted to key management personnel, no options lapsed and no options were exercised. These options may be exercised between March and October 2024. Post year end, 300,000 of these options were exercised during March 2024. As at 31 December 2023, 5,900,000 share options remained active under the Group's EMI scheme (2022 ‑ 5,900,000). During the year no options were granted to key management personnel, no options lapsed and no options were exercised. These options may be exercised from January 2024. No options have yet been exercised up to the date of this publication.
	Group
	The monthly average number of persons, including the directors, employed by the Group during the year was as follows:
					2023	2022
					No.	No.
	Directors				5	5
	Other employees				462	450
					467	455

 

	The monthly average number of persons, including the Directors, employed by the Company during the year was 8 (2022 - 12).
					2023	2022
					£	£
	Remuneration of directors
	Remuneration				649,972	939,327
	Social security costs				79,465	107,188
	Group pension contribution to defined contribution schemes				25,600	25,600
	Share based payments				12,869	14,418
					767,906	1,086,533

 

	In addition, fees of £Nil (2022 ‑ £Nil) were paid to non‑executive directors in the year. The highest paid director received remuneration in the year of £292,368 (2022 ‑ £488,780) and pension contributions were made of £Nil (2022 ‑ £Nil).
					2023	2022
					No.	No.
	Directors accruing benefits under money purchase pension schemes				1	1
					1	1

 

2,700,000 share options were granted to directors during 2019 at an exercise price of £0.10 per share. There have been no options exercised or additional options granted since this time. These options may be exercised between January and March 2024.

 

10.	Finance income and expense
	Recognised in profit or loss
					2023	2022
					£	£
Finance income
	Interest on:
	Bank deposits				52,330	-
	Other interest receivable				-	5,043
	Total finance income				52,330	5,043
	Finance expense
	Bank interest payable				164,269	74,575
	Interest on lease liabilities				1,038,548	571,009
	Other interest payable				304	22,283
	Invoice discounting facility interest payable				284,595	128,976
	Total finance expense				1,487,716	796,843
	Net finance expense recognised in profit or loss				(1,435,386)	(791,800)

 

11.	Taxation on ordinary activities
	11.1 Income tax recognised in profit or loss
					2023	2022
					£	£
	Current tax
	Adjustments in respect of prior years				(19,770)	(70,812)
	Total current tax				(19,770)	(70,812)
	Deferred tax expense
	Origination and reversal of timing differences				(635,824)	(699,135)
	Effect of change in tax rates				-	191,932
	Total deferred tax				(635,824)	(507,203)
	Total tax credit				(655,594)	(578,015)

 

	The reasons for the difference between the actual tax charge for the year and the standard rate of corporation tax in the United Kingdom applied to profits for the year are as follows:
					2023	2022
					£	£
	Profit/(loss) for the year				844,025	(836,304)
	Income tax expense/(credit)				(655,594)	(578,015)
	Profit/(loss) before income taxes				188,431	(1,414,319)
	Tax using the Company's domestic tax rate of 23.5% (2022:19%)				44,281	(268,721)
	Fixed asset differences				86,308	391,971
	(Income)/expenses not deductible for tax purposes				(19,092)	345,325
	Adjustments to tax charge in respect of prior periods				(19,770)	(70,812)
	Non‑taxable consolidation adjustments				3,774	(2,619)
	Remeasurement of deferred tax				12,383	(30,975)
	Movement in deferred tax not recognised				(767,116)	(932,774)
	Chargeable losses				(18,245)	-
	Other differences leading to an increase/(decrease) in the tax charge				21,883	(9,410)
	Total tax credit				(655,594)	(578,015)

 

 

          Changes in tax rates and factors affecting the future tax charges

 

At 31 December 2023, the Group has tax losses of £13,955,031 (2022 ‑ £11,539,175) which are available for offset against future taxable profits.

The main rate of corporation tax changed on 1 April 2023 from 19% to 25% (with marginal rate relief available for companies with small profits). As the current financial year includes periods before and after the change in tax rate, the effective rate applicable to profits generated in the year ended 31 December 2023 is 23.5%.

 

	11.2 Deferred tax balances
	The following is the analysis of deferred tax assets/(liabilities) presented in the consolidated statement of financial position:
					2023	2022
					£	£
	Deferred tax liabilities				(1,866,950)	(2,496,677)

 

	A deferred tax asset of £1,318,295 (2022 ‑ £1,577,985) has not been recognised in the financial statements in relation to tax losses. In addition a deferred tax asset of £162,970 (2022 ‑ £Nil) has not been recognised in the financial statements in relation to the future tax benefit on the future exercise of employee share options. A deferred tax asset has not been recognised in the year where it is uncertain that the asset will crystallise in the foreseeable future. A deferred tax asset of £903,116 (2022 ‑ £348,793) has been recognised for the Company. This primarily related to losses carried forward which are expected to be utilised in future periods.
		Opening balance		Recognised in profit or loss		Recognised in other comprehensive income	Closing balance
		£		£		£	£
2023
	Fixed asset timing differences	(1,303,975)		(267,323)		-	(1,571,298)
	Arising from business combinations	(1,052,221)		98,217		-	(954,004)
	Capital gains	(1,569,838)		25,489		(6,097)	(1,550,446)
	Short term timing differences	122,548		(84,213)		-	38,335
	Losses and other deductions	1,306,809		863,654		-	2,170,463
		(2,496,677)		635,824		(6,097)	(1,866,950)
		Opening balance		Recognised in profit or loss		Acquisition/ disposals	Closing balance
		£		£		£	£
2022
	Fixed asset timing differences		(653,904)	(381,332)	(268,739)		(1,303,975)
	Arising from business combinations		(880,249)	91,627	(263,599)		(1,052,221)
	Capital gains		(502,946)	-	(1,066,892)		(1,569,838)
	Short term timing differences		19,366	103,182	-		122,548
	Losses and other deductions		613,083	693,726	-		1,306,809
			(1,404,650)	507,203	(1,599,230)		(2,496,677)

 

12.	Earnings per share
	(i) Basic and diluted loss per share
	The total basic profit per share attributable to the ordinary equity holders of the Company was £0.003 (2022 ‑ loss of £0.003). The total diluted profit per share attributable to the ordinary equity holders of the Company was £0.003 (2022 ‑ loss of £0.003).
					2023		2022
					Pence		Pence
	From continuing operations attributable to the ordinary equity holders of the Company					0.3		(0.3)
	Total basic earnings per share attributable to the ordinary equity holders of the Company					0.3		(0.3)

 

	(ii) Reconciliation of earnings used in calculating earnings per share
					2023	2022
					£	£
	Profit/(loss) attributable to the ordinary equity holders of the Company used in calculating basic earnings per share:
	Used in calculating basic and diluted earnings per share				844,025	(836,304)

 

	(iii) Weighted average number of shares used as the denominator
					2023	2022
					Number	Number
	Weighted average number of ordinary shares used as the denominator in calculating basic earnings per share				243,884,066	241,979,322
	Adjustments for calculation of diluted earnings per share:
	Options				4,413,734	23,640,830
	Warrants				2,900,000	2,800,000
	Weighted average number of ordinary shares and potential ordinary shares used as the denominator in calculating diluted earnings per share				251,197,800	268,420,152

 

13.	Dividends
					2023	2022
					£	£
	Final dividend of £0.002 paid per Ordinary Share in the year (2022 ‑ £Nil) in relation to the prior year results				487,717	-
	Interim dividend of £0.001 paid per Ordinary Share in the year (2022 ‑ £0.002).				243,964	487,590
					731,681	487,590

 

The directors are proposing a final dividend of £0.0025 per share (2022 ‑ £0.002). The dividend has not been accrued in the consolidated statement of financial position.

 

 

14.	Property, plant and equipment
	Group
		Land and buildings - freehold and long leasehold	Right of use assets ‑ leasehold property	Leasehold improvements	Plant and machinery	Motor vehicles	Fixtures, fittings & computer equipment	Right of use assets ‑ other	Total
		£	£	£	£	£	£	£	£
Cost or valuation
At 1 January 2022		5,785,000	8,976,689	298,719	1,928,736	657,796	1,161,407	3,870,997	22,679,344
Additions		517,757	8,172,355	18,692	1,543,168	202,306	983,331	2,577,922	14,015,531
Acquisition of subsidiary		15,966,907	-	-	102,981	810,247	42,071	-	16,922,206
Disposals		-	(434,574)	(10,219)	-	(105,735)	(40,469)	(301,273)	(892,270)
Foreign exchange movements		-	-	-	-	836	-	-	836
At 31 December 2022		22,269,664	16,714,470	307,192	3,574,885	1,565,450	2,146,340	6,147,646	52,725,647
Additions		38,208	-	-	1,339,637	1,119,665	500,083	2,702,800	5,700,393
Disposals		-	(324,440)	(1,502)	(48,319)	(293,093)	(3,034)	(148,766)	(819,154)
Transfers between classes		-	-	-	7,739	-	(7,739)	-	-
Revaluations		(183,043)	-	-	-	-	-	-	(183,043)
At 31 December 2023		22,124,829	16,390,030	305,690	4,873,942	2,392,022	2,635,650	8,701,680	57,423,843
		Land and buildings - freehold and long leasehold	Right of use assets ‑ leasehold property	Leasehold improvements	Plant and machinery	Motor vehicles	Fixtures, fittings & computer equipment	Right of use assets ‑ other	Total
		£	£	£	£	£	£	£	£
Accumulated depreciation and impairment
At 1 January 2022		-	997,305	30,719	248,735	410,439	327,114	946,311	2,960,623
Charge for the year		309,957	-	30,096	297,108	341,492	238,605	-	1,217,258
Charge for right‑of‑use assets		-	962,408	-	-	-	-	1,087,183	2,049,591
Transfer intra group		-	-	-	5,636	-	(5,636)	-	-
Disposals		-	(145,960)	(10,219)	-	(53,089)	(1,405)	(281,543)	(492,216)
On revalued assets		(309,957)	-	-	-	-	-	-	(309,957)
Exchange adjustments		-	-	-	(612)	836	(97)	-	127
At 31 December 2022		-	1,813,753	50,596	550,867	699,678	558,581	1,751,951	5,425,426
Charge for the year		309,389	-	30,719	438,768	402,058	315,264	-	1,496,198
Charge for right‑of‑use assets		-	1,224,103	-	-	-	-	1,800,276	3,024,379
Disposals		-	(324,440)	-	(40,158)	(206,689)	(11,515)	(117,615)	(700,417)
On revalued assets		(207,432)	-	-	-	-	-	-	(207,432)
At 31 December 2023		101,957	2,713,416	81,315	949,477	895,047	862,330	3,434,612	9,038,154
Net book value
At 1 January 2022		5,785,000	7,979,384	268,000	1,680,001	247,357	834,293	2,924,686	19,718,721
At 31 December 2022		22,269,664	14,900,717	256,596	3,024,018	865,772	1,587,759	4,395,695	47,300,221
At 31 December 2023		22,022,872	13,676,614	224,375	3,924,465	1,496,975	1,773,320	5,267,068	48,385,689

 

If the freehold and long leasehold property had not been included at valuation, it would have been included under the historical cost convention as follows:

 

Cost of £19,622,872 (2022  £19,584,664)

Depreciation of £704,974 (2022  £449,285)

Net book value of £18,917,898 (2022  £19,135,379)

 

 

	14.1. Assets held under leases
	The net book value of owned and leased assets included as "Property, plant and equipment" in the Consolidated Statement of Financial Position is as follows:
		31 December 2023	31 December 2022
		£	£
	Property, plant and equipment owned	29,442,007	28,003,809
	Right‑of‑use assets	18,943,682	19,296,412
		48,385,689	47,300,221

 

	Information about right‑of‑use assets is summarised below:   Net book value
				31 December 2023	31 December 2022
				£	£
	Property			13,676,614	14,900,717
	Motor vehicles & plant and machinery			5,267,068	4,395,695
				18,943,682	19,296,412

 

	Depreciation charge for the year ended
				31 December 2023	31 December 2022
				£	£
	Property			1,224,103	962,408
	Motor vehicles & plant and machinery			1,800,276	1,087,183
				3,024,379	2,049,591

 

14.2 Fair value measurement and Impairment

Fair value measurement

Included in land and buildings is land with a cost of £6,254,057 (2022 ‑ £6,254,057) which is not depreciated.

The Group's freehold and long leasehold land and buildings are stated at their revalued amounts, being the fair value at the date of revaluation, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The Group acquired £4,872,179 freehold and £11,094,728 long leasehold land and buildings as part of the acquisition of the Valley Wholesale Carpets. These were valued at a total of £15,966,907 by the directors at the date of acquisition based on valuations obtained on 13 July 2022 by BNP Paribas Real Estate, independent valuers not related to the Group.

The Group obtained valuations on these freehold and leasehold properties at the reporting date from Gerald Eve LLP.

As the valuations obtained from Gerald Eve were not materially different to the original valuation, the directors have decided to revalue both the freehold and leasehold properties back to the original valuation plus improvements made in the current financial year.

In addition, the Group holds freehold property in its subsidiary William Armes Holdings Limited which was valued at £5,500,000 as at 8 February 2024 by Gerald Eve LLP, independent valuers not related to the Group. The directors do not believe that this valuation is materially different to the valuation at the year end for this property.

Gerald Eve LLP and BNP Paribas Real Estate are chartered surveyors and property consultants that have appropriate qualifications and recent experience in the fair value measurement of properties in the relevant locations. The valuation reports have been prepared in accordance with Royal Institution of Chartered Surveyors ("RICS") Valuation ‑ Global Standards (incorporating the IVSC International Valuation Standards) issued November 2021 and effective from 31 January 2022 together, where applicable, with the UK National Supplement effective from 14 January 2019, together the "Red Book".

Property valuations are complex, require a degree of judgement and are based on data that may or may not be publicly available. Valuation of investment property and the respective inputs have been classified as level 3 inputs as defined by IFRS 13 Fair Value Measurement. Level 3 means that the valuation model cannot rely on inputs that are directly available from an active market; however there are related inputs from recent property sales that can be used as a basis.

The freehold property in Sudbury has been valued using the traditional "all risks" yield method of valuation, having regard to comparable evidence and current market sentiment. In establishing fair value, the most significant unobservable input is considered to be the appropriate yield to apply to the rental income. This is based on a number of factors including financial covenant strength of the tenant, location, marketability of the unit if it were to become vacant, quality of the property and its scope for potential alternative uses.

The yield applied in the valuation is 6.6%. Assuming all else stayed the same; a decrease of 1% in the yield would result in an increase in fair value of £1,032,000. An increase of 1% in the yield would result in a decrease in fair value of £760,000.

The properties acquired as part of the acquisition of Valley Wholesale Carpets, consisting of two freehold units and a long‑leasehold site have been valued using the market (comparative) method of valuation, multiplying the capital value per square foot by the size of the respective buildings. In determining the capital value, the valuers have utilised observable capital values from recent sales in similar locations, condition and size to the respective sites.

The revaluation gain on land and buildings for 2023 of £24,389 (2022 ‑ gain of £309,957) has been recognised within Other Comprehensive Income.

Capital commitments

As at 31 December 2023, the Group had capital commitments totalling £Nil (2022 ‑ £1,090,204).

 

14.3 Assets pledged as security

There is a floating charge against the assets of the subsidiary Likewise Floors Limited, from NatWest Bank PLC.

There is a fixed charge over the freehold land and buildings held by the Group in respect of the bank loans in place for the Group.

 

 

	Company
		Right of use assets ‑ leasehold property		Leasehold improvements		Motor vehicles	Fixtures, fittings & computer equipment	Right of use assets ‑ other	Total
		£		£		£	£	£	£
Cost or valuation
At 1 January 2022		66,422		10,219		-	42,299	-	118,940
Additions		5,513,875		-		112,000	8,095	39,248	5,673,218
Disposals		(66,422)		(10,219)		(112,000)	-	-	(188,641)
At 31 December 2022		5,513,875		-		-	50,394	39,248	5,603,517
Additions		-		-		96,995	14,887	-	111,882
At 31 December 2023		5,513,875		-		96,995	65,281	39,248	5,715,399
		Right of use assets ‑ leasehold property   £		Leasehold improvements   £		Motor vehicles   £	Fixtures, fittings & computer equipment   £	Right of use assets - other   £	Total   £
Accumulated depreciation and impairment
At 1 January 2022		66,422		10,219		-	13,495	-	90,136
Charge for the year		-		-		5,600	9,920	-	15,520
Charge for right‑of‑use assets		90,531		-		-	-	2,186	92,717
Disposals		(66,422)		(10,219)		(5,600)	-	-	(82,241)
At 31 December 2022		90,531		-		-	23,415	2,186	116,132
Charge for the year		-		-		6,466	11,255	-	17,721
Charge for right‑of‑use assets		319,400		-		-	-	13,083	332,483
At 31 December 2023		409,931		-		6,466	34,670	15,269	466,336
Net book value
At 1 January 2022		-		-		-	28,804	-	28,804
At 31 December 2022		5,423,344		-		-	26,979	37,062	5,487,385
At 31 December 2023		5,103,944		-		90,529	30,611	23,979	5,249,063

 

 

 

	14.4. Assets held under leases
	The net book value of owned and leased assets included as "Property, plant and equipment" in the Company Statement of Financial Position is as follows:
		31 December 2023	31 December 2022
		£	£
	Property, plant and equipment owned	121,140	26,979
	Right‑of‑use assets	5,127,923	5,460,406
		5,249,063	5,487,385

 

	Information about right‑of‑use assets is summarised below:   Net book value
							31 December 2023		31 December 2022
							£		£
	Property						5,103,944		5,423,344
	Motor vehicles & plant and machinery						23,979		37,062
							5,127,923		5,460,406
15.	Intangible assets
	Group
			Delta Carpets Customer base	Likewise Floors Customer base	Delta Carpets Brandname		Software	Likewise Floors Brandname		Total
			£	£	£		£	£		£
	Cost
	At 1 January 2022		-	2,122,349	-		-	2,189,075		4,311,424
	Additions on acquisition of subsidiary		513,684	-	540,710		-	-		1,054,394
	At 31 December 2022		513,684	2,122,349	540,710		-	2,189,075		5,365,818
	Additions		-	-	-		133,983	-		133,983
	At 31 December 2023		513,684	2,122,349	540,710		133,983	2,189,075		5,499,801
			Delta Carpets Customer base	Likewise Floors Customer base	Delta Carpets Brandname		Software	Likewise Floors Brandname		Total
			£	£	£		£	£		£
	Accumulated amortisation and impairment
	At 1 January 2022		-	389,097	-		-	401,330		790,427
	Charge for the year		38,526	141,490	40,553		-	145,938		366,507
	At 31 December 2022		38,526	530,587	40,553		-	547,268		1,156,934
	Charge for the year		51,368	141,490	54,071		11,503	145,938		404,370
	At 31 December 2023		89,894	672,077	94,624		11,503	693,206		1,561,304
	Net book value
	At 1 January 2022		-	1,733,252	-		-	1,787,745		3,520,997
	At 31 December 2022		475,158	1,591,762	500,157		-	1,641,807		4,208,884
	At 31 December 2023		423,790	1,450,272	446,086		122,480	1,495,869		3,938,497

 

	Company
						Software £
	Cost
	Additions					133,983
	At 31 December 2023					133,983
						Software £
	Accumulated amortisation and impairment
	Charge for the year					11,503
	At 31 December 2023					11,503
	Net book value
	At 31 December 2023					122,480

 

16.	Goodwill
	Group
					2023	2022
					£	£
	Cost				5,624,284	5,624,284
					5,624,284	5,624,284

 

					2023	2022
					£	£
	Cost
	At 1 January				5,624,284	4,216,728
	Additions on acquisition of subsidiaries				-	1,407,556
	At 31 December				5,624,284	5,624,284
	Accumulated impairment
	At 31 December				-	-

 

	16.1 Allocation of goodwill to cash generating units
	The carrying amount of goodwill has all been allocated to the Group's primary activity of wholesale distribution and has been allocated to trading brands as follows:
					2023	2022
					£	£
	Likewise Floors Limited				3,253,210	3,253,210
	Lewis Abbott Limited				467,847	467,847
	H&V Carpets BVBA				307,230	307,230
	A. & A. Carpets Limited				188,441	188,441
	Valley Wholesale Carpets Limited				234,864	234,864
	Delta Carpets Limited				1,172,692	1,172,692
					5,624,284	5,624,284

 

The Group tests goodwill annually for impairment, or more frequently if there are indications that goodwill might be impaired. The goodwill is a reflection of the benefit the acquisitions of subsidiaries will have on the Group by offering greater geographic coverage and providing the opportunity to expand this further than is currently the case. The acquisitions will benefit from the collective marketing and the enhanced product range available to all Group companies. Ultimately this will enable the acquired businesses and the existing Group members to provide an improved customer service, across a wider geographic area, with a greater product portfolio designed to help the Group to continue its development. The Group has conducted an analysis of the sensitivity of the impairment test to changes in the key assumptions used in the supporting five year forecasts being a discount rate of 12% and growth rates ranging from 3 ‑ 11% dependent on the specific CGU.

          Likewise Floors Limited

 

The break even point of goodwill for Likewise Floors Limited is at a growth level of ‑10.4% with terminal growth factor of 2%.

 

          Lewis Abbott Limited

 

The break even point of goodwill for Lewis Abbott Limited is at a growth level of ‑62.1% with terminal growth factor of 2%.

 

          H&V Carpets BVBA

 

The break even point of goodwill for H&V Carpets BVBA is at a growth level of ‑1.1% with terminal growth factor of 1%.

 

          A. & A. Carpets Limited

 

The break even point of goodwill for A. & A. Carpets Limited is at a growth level of ‑1.7% with terminal growth factor of 1%.

 

          Valley Wholesale Carpets Limited

 

The break even point of goodwill for Valley Wholesale Carpets Limited is at a growth level of ‑18.4% with terminal growth factor of 1%.

 

          Delta Carpets Limited

 

The break even point of goodwill for Delta Carpets Limited is at a growth level of ‑8.0% with terminal growth factor of 1%.

 

 

17.	Subsidiaries
	Details of the Group's material subsidiaries at the end of the reporting period are as follows:
	Name of subsidiary		Principal activity			Place of incorporation and operation	Proportion of ownership interest and voting power held by the Group (%)
							2023	2022
	1) Likewise Floors Limited			Wholesale distribution of floor coverings and associated products		England & Wales	100	100
	2) H&V Carpets BVBA			Wholesale distribution of floor coverings and associated products		Belgium	100	100
	3) Valley Wholesale Carpets (2004) Limited			Holding company		England & Wales	100	100
	4) Valley Wholesale Carpets Limited (100% subsidiary of Valley Wholesale Carpets (2004) Limited)			Wholesale distribution of floor coverings and associated products		England & Wales	100	100
	5) Delta Carpets (Holdings) Limited (100% subsidiary of Likewise Floors Limited)			Holding company		England & Wales	100	100
	6) Delta Carpets Limited (100% subsidiary of Delta Carpets (Holdings) Limited)			Dormant company		England & Wales	100	100
	7) Likewise Holdings Limited (formerly William Armes Holdings Limited)			Holding company		England & Wales	100	100
	8) William Armes Limited (100% subsidiary of William Armes Holdings Limited)			Dormant company		England & Wales	100	100
	9) A. & A. Carpets Limited			Dormant company		England & Wales	100	100
	10) Likewise Trading Limited			Holding company		England & Wales	100	100
	11) Lewis Abbott Limited (100% subsidiary of Likewise Trading Limited)			Dormant company		England & Wales	100	100
	12) Factory Flooring Outlet Ltd (100% subsidiary of Likewise Floors Limited)			Dormant company		England & Wales	100	100
	13) Likewise Limited			Dormant company		England & Wales	100	100

 

	The registered offices of H&V Carpets BVBA are Nijverheidsstraat 26, 8760 Meulebeke, Belgium. The registered offices of all other companies within the Group are Unit 4 Radial Park, Radial Way, Birmingham Business Park, Solihull, England, B37 7WN.
	Company ‑ Shares in Group undertakings
					2023	2022
					£	£
	At 1 January				42,119,270	11,738,831
	Additions				-	30,158,850
	Share options				190,115	221,589
					42,309,385	42,119,270

 

	The Group considers impairment of its subsidiaries annually, this is assessed in the context of the Group's structure, and if appropriate an impairment provision is made.
18.	Inventories
	Group
					2023	2022
					£	£

 

	Finished goods and goods for resale	20,253,799	18,388,527
		20,253,799	18,388,527

 

					2023	2022
					£	£
	Amounts of inventories recognised as an expense during the year				97,306,471	87,172,444
	Amounts of inventories impaired during the year				1,123,021	395,225

 

	The Company did not hold any inventories in either the current or prior year.
19.	Trade and other receivables
	Group
		2023	2022
		£	£
	Trade receivables	12,802,078	12,007,770
	Less: provision for impairment of trade receivables	(369,399)	(302,989)
	Trade receivables ‑ net	12,432,679	11,704,781
	Prepayments	2,309,125	1,586,490
	Other receivables	2,938,182	2,282,032
	Total trade and other receivables	17,679,986	15,573,303
	Total current portion	(17,679,986)	(15,573,303)

 

	Company
		2023	2022
		£	£
	Receivables from related parties	6,543,832	8,265,009
	Total financial assets other than cash and cash equivalents classified as loans and receivables	6,543,832	8,265,009
	Prepayments	355,900	72,722
	Other receivables	50,121	31,205
	Total trade and other receivables	6,949,853	8,368,936
	Less: current portion ‑ prepayments and accrued income	(355,900)	(72,722)
	Less: current portion ‑ other receivables	(50,121)	(31,205)
	Less: current portion ‑ receivables from related parties	(6,543,832)	(8,265,009)
	Total current portion	(6,949,853)	(8,368,936)
	Total non‑current portion	-	-

 

	All of the above amounts are financial assets of the Group and Parent Company except certain prepayments. The directors consider the carrying value of Group trade and other receivables is approximate to its fair value, after incorporating an impairment provision of £369,399 (2022 ‑ £302,989). Trade receivables comprise amounts due from customers for goods sold. The Group's normal trade credit terms range from 30 to 60 days and therefore all are classified as current. There are a limited number of customers who are granted extended credit terms but these are not considered material to the financial statements. Trade receivables are recognised initially at the amount of consideration that is unconditional. The Group holds the trade receivables with the objective to collect the contractual cash flows and therefore measures them subsequently at amortised cost. The Group's credit risk is primarily attributable to its trade receivables. The amounts presented in the Consolidated Statement of Financial Position are net of allowances for doubtful receivables. An allowance for impairment is made where there is an identified loss event which, based on previous experience, is evidence of a reduction in the recoverability of the cash flows. The Group has no significant concentration of credit risk, with exposure spread over a large number of customers.
		Group	Group
		2023	2022
		£	£
	Not more than 30 days	7,060,259	6,360,941
	More than 30 days but not more than 60 days	3,957,155	3,638,050
	More than 60 days but not more than 90 days	773,893	986,714
	More than 90 days but not more than 120 days	126,006	135,723
	More than 120 days	884,765	886,342
	Loss allowance	(369,399)	(302,989)
		12,432,679	11,704,781

 

	The expected credit loss allowance is calculated using a weighted probability of loss based on age of the receivable:
					2023	ECL
					£
	More than 90 days but not more than 120 days ‑ 5% (adjusted ‑ see below)				114,420	5,721
	More than 120 days ‑ 50% (adjusted for payment plans ‑ see below)				591,765	295,883
	Additional loss allowance				-	67,795
					706,185	369,399

 

	The debtors balance to which the ECL has been applied has been adjusted where there are specific payment plans in place.
					2023
					£
	Reconciliation of ECL allowance balance
	Balance at 1 January				302,989
	ECL allowance charged to profit or loss				266,087
	Other movements				(199,677)
					369,399

 

	The carrying amounts of the trade receivables include receivables which are subject to a factoring agreement. Under this arrangement, the subsidiary trading companies have transferred the relevant receivables to the factor in exchange for cash and are prevented from selling or pledging the receivables. However, the subsidiaries retain the late payment and credit risk. The Group therefore continues to recognise the transferred assets in their entirety in its Consolidated Statement of Financial Position. The amount repayable under the factoring agreement is presented as secured borrowing. The Group considers the held to collect business model to remain appropriate for these receivables and hence continues measuring them at amortised cost.
	The relevant carrying amounts are:
					2023	2022
					£	£
	Factored receivables				6,873,509	5,851,797
	Associated secured borrowings				(5,155,132)	(4,389,016)

 

20.	Cash and cash equivalents
		Group	Group	Company	Company
		2023	2022	2023	2022
		£	£	£	£
	Cash at bank and in hand	5,709,229	5,913,155	182,420	689,259
		5,709,229	5,913,155	182,420	689,259

 

21.	Trade and other payables
	Group
		2023	2022
		£	£
	Trade payables	21,638,744	18,106,217
	Other payables	533,997	429,321
	Accruals	1,462,027	1,727,216
	Total financial liabilities, excluding loans and borrowings, classified as financial liabilities measured at amortised cost	23,634,768	20,262,754
	Other payables ‑ tax and social security payments	1,880,688	1,707,672
	Deferred consideration	4,250,515	5,380,365
	Total trade and other payables	29,765,971	27,350,791
	Less: current portion ‑ trade payables	(21,638,744)	(18,106,217)
	Less: current portion ‑ other payables	(2,414,685)	(2,136,993)
	Less: current portion ‑ accruals	(1,462,027)	(1,727,216)
	Less: current portion ‑ deferred consideration	(4,250,515)	(1,000,000)
	Total current portion	(29,765,971)	(22,970,426)
	Total non‑current position	-	4,380,365

 

	Company
		2023	2022
		£	£
	Trade payables	258,578	27,657
	Payables to related parties	10,564,144	9,569,537
	Other payables	1,350	1,350
	Accruals	254,491	480,257
	Total financial liabilities, excluding loans and borrowings, classified as financial liabilities measured at amortised cost	11,078,563	10,078,801
	Other payables ‑ tax and social security payments	110,700	116,772
	Deferred consideration	3,855,000	4,984,750
	Total trade and other payables	15,044,263	15,180,323
	Less: current portion ‑ trade payables	(258,578)	(27,657)
	Less: current portion ‑ payables to related parties	(10,564,144)	(9,569,537)
	Less: current portion ‑ other payables	(112,050)	(118,122)
	Less: current portion ‑ accruals	(254,491)	(480,257)
	Less: current portion ‑ deferred income	(3,855,000)	(1,000,000)
	Total current portion	(15,044,263)	(11,195,573)
	Total non‑current position	-	3,984,750

 

	Trade payables and accruals principally comprise amounts outstanding in relation to trade purchases and ongoing costs. Trade payables are unsecured and the Group has financial risk management procedures in place to ensure that all payables are paid within pre‑agreed credit terms. The directors consider the carrying value of trade and other receivables is approximate to its fair value due to their short term nature. All of the above amounts are financial liabilities of the Group and Parent Company except social security and other taxes.
22.	Loans and borrowings
	Group
		2023	2022
		£	£
	Non‑current
	Bank loans ‑ secured	2,342,222	1,456,025
	Lease liabilities	18,401,597	18,766,025
		20,743,819	20,222,050
	Current
	Bank loans and invoice discounting facility	5,273,300	4,595,139
	Lease liabilities	4,373,760	3,182,373
		9,647,060	7,777,512
	Total loans and borrowings	30,390,879	27,999,562

 

	Company
		2023	2022
		£	£
	Non‑current
	Bank loans ‑ secured	2,342,222	1,456,025
	Lease liabilities	5,187,733	5,226,397
		7,529,955	6,682,422
	Current
	Bank loans ‑ secured	118,168	206,123
	Lease liabilities	376,067	320,191
		494,235	526,314
	Total loans and borrowings	8,024,190	7,208,736

 

	The directors consider that the carrying amount of the invoice discounting facility and bank loan approximates their fair value. The invoice discounting facility is secured against the related trade debtor balances and by a floating charge over the assets of the Group. The invoice discounting facility is denominated in Sterling and Euro. The invoice discounting facility is held for Likewise Floors Limited and has a fixed service charge of £18,000 per annum.
					2023	2022
					£	£
	Amounts repayable under bank loans ‑ Group and Company
	Within one year				118,168	206,123
	In the second to fifth year inclusive				462,401	706,822
	Beyond five years				1,879,821	749,203
					2,460,390	1,662,148

 

	During the year the Company restructured their bank loans resulting in a principal loan value of £2,495,000 drawn down in July 2023. Repayments commenced in September 2023 and will continue until July 2038. The loan is secured by a fixed and floating charge over the Group's assets. The loan carries interest at on a floating rate basis with interest at Bank of England rate plus a margin of 2.35%. This loan is at a floating interest rate and exposes the Group to fair value interest rate risk. On 8 December 2023, the subsidiary company Valley Wholesale Carpets Limited entered a trade loan facility agreement with Barclays Bank Plc. This agreement provides the company with the facility to drawdown up to a maximum limit of £2,500,000 available at their request. No funds were drawn down at 31 December 2023.
23.	Leases
	Group
	(i) Leases as a lessee
	The Group's leases include leases for buildings, plant and motor vehicles. The average lease term is 13 years for buildings and 4 years for other fixed assets. Various lease incentives of rent‑free or reduced rent periods are included in the measurement of the right‑of‑use asset and lease liability at inception of the lease. These predominantly relate to the Group's property lease portfolio.
	Lease liabilities are due as follows:
					2023	2022
					£	£
	Contractual undiscounted cash flows due
	Not later than one year				4,613,991	3,357,091
	Between one year and five years				11,812,221	11,018,626
	Later than five years				13,109,026	15,073,388
					29,535,238	29,449,105
	Lease liabilities included in the Consolidated Statement of Financial Position at 31 December				22,775,357	21,948,398
	Non‑current				18,401,597	18,766,025
	Current				4,373,760	3,182,373

 

	The following amounts in respect of leases have been recognised in profit or loss:
				2023	2022
				£	£
	Interest expense on lease liabilities			1,038,548	571,009
	Depreciation on lease liabilities			3,024,379	2,049,591
	Profit on termination of lease liabilities			(18,358)	(34,535)
	Expense relating to short‑term leases			360,946	324,539

 

	Company
	(ii) Leases as a lessee
	The Company's leases include leases for buildings and other assets. The average lease term is 15 years for buildings and 3 years for other fixed assets.
	Lease liabilities are due as follows:
					2023	2022
					£	£
	Contractual undiscounted cash flows due
	Not later than one year				376,406	328,506
	Between one year and five years				2,295,234	2,100,777
	Later than five years				6,709,897	7,280,760
					9,381,537	9,710,043
	Lease liabilities included in the Company Statement of Financial Position at 31 December				5,563,800	5,546,588
	Non‑current				5,187,733	5,226,397
	Current				376,067	320,191

 

	The following amounts in respect of leases have been recognised in profit or loss:
				2023	2022
				£	£
	Interest expense on lease liabilities			347,292	42,148
	Depreciation on lease liabilities			332,483	92,717
	Expense relating to short‑term leases			45,754	25,704

 

24.

Financial instruments

Classification of financial instruments The fair value hierarchy groups financial assets and liabilities into three levels based on the significance of inputs used in measuring the fair value of the financial assets and liabilities. The fair value hierarchy has the following levels: • Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities; • Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and • Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs). The level within which the financial asset or liability is classified is determined based on the lowest level of significant input to the fair value measurement. The only financial instruments the Group holds which are measured at fair value through the Income Statement (as level 2 above) are forward currency contracts (see note 26) and deferred consideration in relation to shares issued on acquisition of subsidiaries. The deferred consideration liability held at fair value at 31 December 2023 totalled £4,250,515 (2022 ‑ £4,380,365). All other financial assets and liabilities are held at amortised cost. The tables below set out the Group's accounting classification of each class of its financial assets and liabilities.

 

		Group	Group	Company	Company
		2023	2022	2023	2022
		£	£	£	£
	Financial assets at amortised cost
	Trade receivables	12,432,679	11,704,781	-	-
	Amounts owed by Group undertakings	-	-	6,543,832	8,265,009
	Other receivables	2,938,182	2,282,032	50,121	31,205
	Cash and cash equivalents	5,709,229	5,913,155	182,420	689,259
		21,080,090	19,899,968	6,776,373	8,985,473

 

	All of the above financial assets' carrying values are approximate to their fair values, as at each reporting date disclosed.
		Group	Group	Company	Company
		2023	2022	2023	2022
		£	£	£	£
	Non current financial liabilities
	Bank loans ‑ amortised cost	2,342,222	1,456,025	2,342,222	1,456,025
	Deferred consideration ‑ held at fair value	-	4,380,365	-	3,984,750
		2,342,222	5,836,390	2,342,222	5,440,775

 

		Group	Group	Company	Company
		2023	2022	2023	2022
		£	£	£	£
	Current financial liabilities at amortised cost unless otherwise stated
	Trade payables	21,638,744	18,106,217	258,578	27,657
	Amounts owed to Group undertakings	-	-	10,564,144	9,569,537
	Deferred consideration ‑ held at fair value	4,250,515	-	3,855,000	-
	Deferred consideration ‑ amortised cost	-	1,000,000	-	1,000,000
	Other payables	533,997	429,321	1,350	1,350
	Accruals	1,462,027	1,727,216	254,491	480,257
	Invoice discounting facility	5,155,132	4,389,016	-	-
	Bank loans ‑ current	118,168	206,123	118,168	206,123
		33,158,583	25,857,893	15,051,731	11,284,924

 

	All of the above financial liabilities' carrying values are considered by management to be approximate to their fair values, as at each reporting date disclosed.
25.	Provisions
	Group
			Dilapidation provision £
	At 1 January 2023		50,075
	Utilised during the year		(4,972)
	At 31 December 2023		45,103
	Due within one year or less		45,103
			45,103

 

26.	Financial instrument risk exposure and management
	26.1 Financial risk management objectives

The Group's operations expose it to degrees of financial risk that include liquidity risk, credit risk, interest rate risk, and foreign currency risk.

This note describes the Group's objectives, policies and process for managing those risks and the methods used to measure them. Further quantitative information in respect of these risks is presented in the notes above.

 

	26.2 Foreign currency risk
	Most of the Group's transactions are carried out in GBP. Exposures to foreign currency exchange rates arise from the Group's overseas sales and purchases, which are denominated in a number of currencies, primarily EUR and USD.
	The Group assesses exposure and takes out forward currency contracts to mitigate this foreign exchange risk. As at the 31 December 2023, the value of forward contracts held by the subsidiary companies were as follows:   Likewise Floors Limited held forward Euro contracts totalling €615,576 (2022 ‑ €1,191,033) and forward USD contracts totalling $3,975,491 (2022 ‑ $299,300). These contracts crystallise between January and May 2024.

 

26.3 Interest rate risk

The Group has secured debt consisting of an invoice discounting facility and bank loan.

The interest on the bank loan and discounting facility are at floating rates. Interest rate risk is high due to the volatility experienced during 2023 and the current economic climate of both the UK and worldwide economy.

Bank loan

The directors have performed a sensitivity analysis which shows the impact on the loan for the coming year should the base rates rise a further 5% from 5.25% to 10.25% after the year end. This would result in a negative impact to the cash‑flow over the coming 12 months of £0.1m. In this unlikely scenario, management would look at the options available for refinancing.

Invoice discounting

The directors have performed a sensitivity analysis which shows the impact on the invoice financing for the coming year should the base rates rise a further 5% from 5.25% to 10.25% after the year end. This would result in a negative impact to cash‑flow over the coming 12 months of £0.3m. In this unlikely scenario, management would look at reducing the amount of debtors financed or other alternative methods of finance.

Forecasts are currently showing that interest rates should remain stable or potentially fall as we move into Q2 of 2024.

The directors do not deem this to be a significant risk.

 

26.4 Credit risk

The Group's credit risk is primarily attributable to its cash balances and trade receivables.

In respect of trade and other receivables, the Group is not exposed to any significant credit risk exposure to any single counter party or any group of counterparties having similar characteristics. Trade receivables consist of a large number of customers in various industries and geographical areas. Based on historical information about customer default rates management consider the credit quality of trade receivables that are not past due or impaired to be good.

The ageing profile of the trade receivables balance can be seen in note 19 above.

The Group's total credit risk amounts to the total of the sum of the receivables and cash and cash equivalents. At the 2023 reporting date this amounts to £21,080,090 (2022 ‑ £19,899,968).

 

	26.5 Liquidity risk   Liquidity and interest risk tables   The following tables detail the Group's remaining contractual maturity for its non‑derivative financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required to pay. The tables include both interest and principal cash flows. To the extent that interest flows are floating rate, the undiscounted amount is derived from interest rate curves at the end of the reporting period. The contractual maturity is based on the earliest date on which the Group may be required to pay.
		Carrying amount	Total	1 ‑ 3 months	3 ‑ 12 months	1 ‑ 2 years	2 ‑ 5 years	More than 5 years
		£	£	£	£	£	£	£
	31 December 2023
	Trade payables	21,638,744	21,638,744	21,638,744	-	-	-	-
	Other taxation and social security	1,880,688	1,880,688	1,880,688	-	-	-	-
	Other payables	533,997	533,997	533,997	-	-	-	-
	Accruals	1,462,027	1,462,027	1,462,027	-	-	-	-
	Lease liabilities	22,775,357	29,535,238	1,141,830	3,472,161	4,263,852	7,548,369	13,109,026
	Invoice discounting facility	5,155,132	5,155,132	5,155,132	-	-	-	-
	Bank loans	2,460,390	4,076,204	92,641	208,442	277,923	833,769	2,663,429
	Deferred consideration	4,250,515	4,250,515	4,250,515	-	-	-	-
		60,156,850	68,532,545	36,155,574	3,680,603	4,541,775	8,382,138	15,772,455
	31 December 2022
	Trade payables	18,106,217	18,106,217	18,106,217	-	-	-	-
	Other taxation and social security	1,707,672	1,707,672	1,707,672	-	-	-	-
	Other payables	429,321	429,321	429,321	-	-	-	-
	Accruals	1,727,216	1,727,216	1,727,216	-	-	-	-
	Lease liabilities	21,948,398	29,449,105	855,576	2,501,515	3,490,139	7,528,487	15,073,388
	Invoice discounting facility	4,389,016	4,389,016	4,389,016	-	-	-	-
	Bank loans	1,662,148	2,293,057	53,013	159,037	212,050	636,150	1,232,807
	Deferred consideration	5,380,365	5,380,565	1,000,000	-	4,380,565	-	-
		55,350,353	63,482,169	28,268,031	2,660,552	8,082,754	8,164,637	16,306,195

 

27.	Capital management
	The Group's capital management objectives are: • To ensure the Group's ability to continue as a going concern; and • To provide long term returns to shareholders. The Group defines and monitors capital on the basis of the carrying amount of equity plus its outstanding borrowings, less cash and cash equivalents as presented on the face of the Consolidated Statement of Financial Position as detailed below:
					2023	2022
					£	£
	Equity				39,522,581	39,111,269
	Borrowings				30,390,879	27,999,562
	Cash and cash equivalents				(5,709,229)	(5,913,155)
					64,204,231	61,197,676

 

	The board of directors monitors the level of capital as compared to the Group's commitments and adjusts the level of capital as is determined to be necessary by issuing new shares or adjusting the level of debt. The Group is not subject to any externally imposed capital requirements.
28.	Share capital
	Consolidated and Company
	Authorised
		2023	2023
		Number	£
	Shares treated as equity
	Ordinary shares of £0.01 each	243,964,480	2,439,645
		243,964,480	2,439,645

 

	Issued and fully paid
		2023	2023
		Number	£
	Ordinary shares of £0.01 each
	At 1 January	243,835,980	2,438,360
	Shares issued	128,500	1,285
	At 31 December	243,964,480	2,439,645

 

	The Company has one class of ordinary share which carry no right to fixed income. On 2 May 2023, the Company allotted 22,500 new £0.01 Ordinary Shares for consideration of £0.10 per share, totalling £2,250. These shares were issued under the Company's SAYE scheme. On 8 September 2023, the Company allotted 106,000 new £0.01 Ordinary Shares for consideration of £0.10 per share, totalling £10,600. These shares were issued under the Company's SAYE scheme.
29.	Share premium
					2023	2022
					£	£
	Share premium at 1 January				17,384,625	22,458,816
	Premium on shares issued in the year				11,565	17,447,908
	Share issue costs				-	(522,099)
	Reduction of share premium				-	(22,000,000)
	Share premium at 31 December				17,396,190	17,384,625

 

See note 28 for details of shares issued in the year.

 

30.

Reserves

 

Share capital

This represents the nominal value of shares that have been issued.

 

Share premium

 

This reflects proceeds generated on issue of shares in excess of their nominal value and is a non‑distributable reserve.

 

Revaluation reserve

 

This is used to record increases in the fair value of fixed assets and decreases to the extent that the decrease relates to a previous increase on the same asset. The revaluation reserve is a non‑distributable reserve. The excess depreciation on revalued assets in comparison to historical cost depreciation is transferred from the revaluation reserve to retained earnings.

 

Foreign exchange reserve

 

This reflects the exchange differences on the translation of the foreign subsidiary.

 

Retained earnings

 

This includes all current and prior period gains and losses.

 

Share option reserve

This represents the cumulative fair value of options granted.

Warrant reserve

This represents the cumulative fair value of warrants granted.

 

31.	Warrants over ordinary shares

On 9 January 2019, the Company issued warrants over 1,800,000 shares as part of the IPO at a price of £0.10 per share.

On 1 May 2019, the Company issued warrants over 1,000,000 shares as part of the acquisition of H&V Carpets BVBA at a price of £0.30 per share. The fair value of the warrants at the date of grant was considered to be £128,170.

Warrants are exercisable at any date in the ten years following the date of grant and none had been exercised as at 31 December 2023.

On 25 October 2023, the Company issued warrants over 100,000 shares to WH Ireland Limited following their appointment as joint broker to the Group. Warrants were issued at a price of £0.05 per warrant share and are exercisable from 2 April 2024, up to the fifth anniversary from the date of the warrant instrument agreement.

 

32.	Analysis of amounts recognised in other comprehensive income
		Note	Revaluation reserve	Foreign exchange reserve	Retained earnings
			£	£	£
	Year to 31 December 2023
	Property revaluation	14	24,389	-	-
	Deferred tax on property revaluation	11	(6,097)	-	-
	Translation in relation to foreign subsidiary		-	(7,015)	-
	Transfer to/from retained earnings		(53,700)	-	53,700
			(35,408)	(7,015)	53,700
		Note	Revaluation reserve	Foreign exchange reserve	Retained earnings
			£	£	£
	Year to 31 December 2022
	Property revaluation	14	309,957	-	-
	Actuarial losses on pension	33	-	-	(5,000)
	Translation in relation to foreign subsidiary		-	16,138	-
	Transfer to/from retained earnings		(53,700)	-	53,700
			256,257	16,138	48,700

 

33.	Retirement plans
	Defined contribution scheme The Group operates a defined contribution pension scheme, the assets of which are held separately from those of the Group in an independently administered fund. Contributions made by the Group to the scheme during the year amounted to £513,550 (2022 ‑ £500,267). The amount outstanding at the reporting date in respect of contributions to the scheme were £98,970 (2022 ‑ £114,241).
	(i) Defined benefit scheme characteristics and funding

Likewise Floors Limited, a subsidiary of the Group, operates a pension scheme providing benefits based on final pensionable pay. The Scheme is closed to new members and is closed to future accrual. For pensions earned after 5 April 1997 and for Guaranteed Minimum Pensions earned between 6 April 1998 and 5 April 1997, increases in payment will be in line with CPI rather than RPI. Revaluations of pensions in deferment are linked to RPI.

The assets of the Scheme are held separately from those of the Group in trustee‑administered funds. The level of contributions is determined by a qualified actuary on the basis of triennial valuations. The liabilities have been rolled forward based on data at 31 December 2020.

The contribution paid for the year ended 31 December 2023 was £Nil (2022 ‑ £5,000). The Group expects to contribute £Nil to the scheme in the coming financial year.

Given that the defined benefit pension scheme is in surplus at 31 December 2023, there is expected to be no material impact on the Group's future cash flows.

 

	(ii) Reconciliation of defined benefit obligation and fair value of scheme assets
	All defined benefit schemes are exposed to materially the same risks and therefore the reconciliation below is presented in aggregate.
		Defined benefit obligation		Fair value of scheme assets		Effect of asset ceiling		Net defined scheme liability
		2023	2022	2023	2022	2023	2022	2023		2022
		£	£	£	£	£	£	£		£
	Balance at 1 January	1,266,000	1,731,000	(1,577,000)	(1,928,000)	311,000	197,000		-	-
	Interest cost	58,000	32,000	(58,000)	(32,000)	-	-		-	-
	Included in profit or loss	1,324,000	1,763,000	(1,635,000)	(1,960,000)	311,000	197,000		-	-
	Actuarial loss from:
	‑ Demographic assumptions	5,000	(402,000)	-	-	-	-		5,000	(402,000)
	‑ Limited by asset ceiling	-	-	-	-	13,000	114,000		13,000	114,000
	Return on plan assets (excluding interest)	-	-	(18,000)	293,000	-	-		(18,000)	293,000
	Included in other comprehensive income	5,000	(402,000)	(18,000)	293,000	13,000	114,000		-	5,000
	Employer contributions	-	-	-	(5,000)	-	-		-	(5,000)
	Benefits paid	(98,000)	(95,000)	98,000	95,000	-	-		-	-
	Other movements	(98,000)	(95,000)	98,000	90,000	-	-		-	(5,000)
	Balance at 31 December	1,231,000	1,266,000	(1,555,000)	(1,577,000)	324,000	311,000		-	-

 

	Composition of plan assets:
					2023	2022
					£	£
	Equities / Property				613,000	861,000
	Cash				191,000	76,000
	Bonds				751,000	640,000
	Total plan assets				1,555,000	1,577,000

 

	Actuarial assumption
	The principal actuarial assumptions used in the determining calculating the present value of the defined benefit obligation (weighted average) include:
			2023	2022
	Discount rate		4.50 %	4.80 %
	Future salary increases		2.30 %	2.50 %
	Inflation assumption (RPI)		3.00 %	3.30 %
	Mortality rates ‑ for male aged 65 now		1.00 %	1.00 %
	Mortality rates ‑ for female aged 65 now		1.00 %	1.00 %
	‑ Males		86.2 years	86.2                          years
	‑ Females		88.6 years	88.5                          years
	Longevity at retirement age (future pensioners)
	‑ Males		87.3 years	87.2                          years
	‑ Females		89.7 years	89.7                          years

 

Sensitivity analysis Analysis of the sensitivity to the principal assumptions of the present value of the defined benefit obligation was performed: ‑ A decrease in the interest rates of 0.5% would increase liabilities by 6.3%; ‑ A decrease in inflation of 0.5% would decrease the liabilities by 5.0%; and ‑ An increase in the long term rate of mortality improvement of 0.5% would increase the liabilities by 1.5%.

 

34.	Share‑based payments

Equity settled share option plan

The Company has a Savings‑Related Share Option Plan ("SAYE") for all employees of the Group. In accordance with the terms of the plan, as approved by shareholders, employees of the Group may be granted options to purchase ordinary shares. There are no performance criteria for the SAYE and options are issued to participants in accordance with HMRC rules. Vesting is conditional on continuity of service.

As at 31 December 2022, 8,140,830 share options remained active. During the current year 4,462,181 new options were issued and 2,890,177 options lapsed on employees leaving the Group. During the current year 128,500 options were exercised with a weighted average option price of £0.10 per share. The remaining contractual life of the remaining 9,584,334 options is approximately 2 years.

As at 31 December 2022, 11,350,000 share options remained active which were issued under Enterprise Management Incentives (EMIs). During the current year no new options were issued or exercised and 550,000 options lapsed on employees leaving the Group. The remaining contractual life of the remaining 10,800,000 options is approximately 0.75 years.

As at 31 December 2022, 4,150,000 share options remained active which were issued to management under a Company Share Option Plan (CSOP). During the current year 1,100,000 new options were issued, no options were exercised and 350,000 options lapsed on employees leaving the Group. The remaining contractual life of the remaining 4,900,000 options is approximately 2.75 years.

Share options are valued using the Black‑Scholes model. The inputs to the model are the option price and share price at date of grant, expected volatility (20%), expected dividend rate (0%) and risk free rate of return (4%). The model has been adjusted for expected behavioural considerations.

The cost of options is amortised to the Statement of Comprehensive Income over the service life of the option resulting in a charge of £274,841 for the year (2022 ‑ £319,678).

 

35.	Related party transactions

Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and are not disclosed in this note. Details of transactions between the Group and other related parties are disclosed below.

 

A rent charge and early termination settlement of £78,179 was paid in the prior year for leased office premises from a subsidiary of REI plc, a Company controlled by the Group's non‑executive Chairman. Following the move of the Group's head office to the Radial Park facility, no further fees are payable in respect of the Group's previous head office.

 

36.	Changes in liabilities arising from financing activities
		Cash and cash equivalents	Borrowing due within one year	Borrowing due after one year	Lease liabilities	Total
		£	£	£	£	£
	At 31 December 2021	8,447,550	(2,498,234)	(1,640,563)	(12,170,539)	(7,861,786)
	Cash flows	(2,534,395)	-	-	-	(2,534,395)
	Repayment of bank loans	-	(67,432)	184,538	-	117,106
	Increase in invoice discounting facility	-	(2,029,473)	-	-	(2,029,473)
	New /amended lease liabilities	-	-	-	(12,226,395)	(12,226,395)
	Repayment of lease liabilities	-	-	-	2,448,536	2,448,536
	At 31 December 2022	5,913,155	(4,595,139)	(1,456,025)	(21,948,398)	(22,086,407)
	At 31 December 2022	5,913,155	(4,595,139)	(1,456,025)	(21,948,398)	(22,086,407)
	Cash flows	(203,925)	-	-	-	(203,925)
	Repayment of bank loans	-	206,123	1,620,678	-	1,826,801
	New bank loan	-	(118,168)	(2,376,832)	-	(2,495,000)
	Interest accrued in period	-	-	(130,043)	(1,017,499)	(1,147,542)
	Increase in invoice discounting facility	-	(766,116)	-	-	(766,116)
	New / amended lease liabilities	-	-	-	(3,696,377)	(3,696,377)
	Repayment of lease liabilities	-	-	-	3,886,917	3,886,917
	At 31 December 2023	5,709,230	(5,273,300)	(2,342,222)	(22,775,357)	(24,681,649)

 

37.	Post balance sheet events

During January 2024, the Company paid deferred consideration of £3,855,000 to the former shareholders of Valley Wholesale Carpets (2004) Limited in satisfaction of the acquisition agreement.

On 18 March 2024, the Company allotted 1,044,000 new £0.01 Ordinary Shares for consideration of £0.10 per share, totalling £104,400. These shares were issued under the Company's SAYE scheme.

On 3 April 2024, the Group paid deferred consideration of £414,500 to the former shareholders of Delta Carpets (Holdings) Limited in satisfaction of the acquisition agreement.

On 10 May 2024, the Company allotted 275,000 new £0.01 Ordinary Shares for consideration of £0.10 per share, totalling £27,500. These shares were issued under the Company's SAYE scheme.

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FR FLFEAEDIALIS