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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Barr (a.g.) Plc | LSE:BAG | London | Ordinary Share | GB00B6XZKY75 | ORD 4 1/6P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 558.00 | 555.00 | 558.00 | 7,030 | 08:00:21 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Btld & Can Soft Drinks,water | 317.6M | 33.9M | 0.3046 | 18.32 | 620.99M |
From Apr 2019 to Apr 2024
TIDMBAG
RNS Number : 4784W
Barr(A.G.) PLC
17 April 2019
A.G. BARR p.l.c. (the "Company")
17 April 2019
Annual Report and Accounts and Notice of Annual General Meeting
Following the release on 26 March 2019 of the Company's financial results for the year ended 26 January 2019 (the "Final Results Announcement"), the Company announces it has today published its annual report and accounts for the year ended 26 January 2019 (the "Annual Report and Accounts").
The Annual Report and Accounts contains the notice convening the Company's one hundred and fifteenth annual general meeting (the "AGM") (the "Notice of AGM"). The AGM will be held at the offices of Ernst and Young LLP, 5 George Square, Glasgow, G2 1DY on Friday, 31 May 2019 at 11.00 a.m.
A copy of the Annual Report and Accounts, which includes the Notice of AGM, is available to view on the Company's website: www.agbarr.co.uk
In accordance with Disclosure and Transparency Rule 6.3.5(2)(b), additional information is set out in the appendices to this announcement.
The Final Results Announcement included a set of condensed financial statements and a fair view of the development and performance of the business and the position of the Company.
A copy of the Annual Report and Accounts, including the Notice of AGM, together with a copy of the proxy form in relation to the AGM will be submitted to the National Storage Mechanism and will shortly be available for inspection at www.morningstar.co.uk/uk/nsm
Appendices
Where used in the following appendices, the term "Group" means the Company together with its subsidiaries.
Appendix A: Directors' responsibility statement
The following directors' responsibility statement is extracted from the Annual Report and Accounts (page 87):
Directors' statement pursuant to the disclosure and transparency rules
Each of the directors, whose names and functions are set out on pages 44 to 45 of this report, confirm that, to the best of their knowledge:
-- the financial statements, prepared in accordance with IFRSs as adopted by the EU, give a true and fair view of the assets, liabilities and financial position of the Group and parent Company and of the consolidated profit;
-- the Annual Report and Accounts includes a fair review of the development and performance of the business and the position of the Group and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties faced by the Group; and
-- they consider the Annual Report and Accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's performance, business model and strategy.
Appendix B: A description of the principal risks and uncertainties that the Company faces
The following description of the principal risks and uncertainties that the Company faces is extracted from the Annual Report and Accounts (pages 38 - 43):
Risk management approach
The Board is responsible for the Group's risk management and internal control systems and for reviewing their effectiveness, supported by the Audit Committee and the Risk Committee. A risk management framework is in place which sets out the ongoing processes for the identification, assessment and management of risks, and for their ongoing monitoring and review. The Board has defined its risk appetite in a number of key areas for the business - this sets out the relative level of risk that the Group is prepared to seek or accept in the pursuit of its strategic objectives. The aim is to ensure that the risks taken by the Group fall within its defined risk appetite.
Effective risk management is essential to enable us to achieve our operational and strategic objectives and deliver long-term value creation. During the reporting period we have continued to focus on embedding a culture of risk management throughout the organisation which will contribute towards the successful execution of the Group's strategy.
Robust risk assessment
The risk management framework sets out a systematic approach to risk management which is designed to identify risks to the business, regardless of source. Once identified, risks are assessed according to the likelihood and impact of the risk occurring and an appropriate risk response is determined in line with the Group's risk appetite. Risks are re-assessed based on the strength of the mitigating controls implemented. The implementation of risk mitigation plans is subject to ongoing monitoring and review. A risk scoring matrix is used to ensure that a consistent approach is taken across the business at both a corporate and functional level. This risk assessment and review process is documented in the appropriate risk register. Risks are reviewed on an ongoing basis; the Group's risk register is formally reviewed by the Risk Committee every two months and by the Board and the Audit Committee twice each year.
Risk control assurance
Internal audit work is undertaken by an independent organisation which develops an annual internal audit plan having reviewed the Group's risk register and following discussions with the external auditors, management and members of the Audit Committee.
During the year the Audit Committee has reviewed reports covering the internal audit work. This has included assessment of the general control environment, identification of any control weaknesses and quantification of any associated risk, together with a review of the status of mitigating actions. The Audit Committee has also received reports from management in relation to specific risk items, together with reports from the external auditors, who consider controls to the extent necessary to form an opinion as to the truth and fairness of the financial statements.
The Group's internal control and risk management systems are designed to manage rather than eliminate the risk of failure to achieve business objectives and can provide only reasonable but not absolute assurance against material misstatement or loss.
The report of the Audit Committee can be found on page 52.
Principal risks and uncertainties
The Board has carried out a robust, systematic assessment of the principal risks facing the Group during the period, including those which would threaten its business model, future performance, solvency or liquidity. The table below sets out the Group's principal risks as determined by the Board, the gross risk movement from the prior year and examples of corresponding controls and mitigating actions. This represents the Group's current risk profile and is not intended to be an exhaustive list of all risks and uncertainties that may arise.
The volatile and uncertain economic environment created by the UK's decision to leave the European Union ('EU') has continued over the past twelve months. Like many other businesses, we have continued to monitor developments in this area. Overseen by the Risk Committee, the Company's Brexit working group has continued to monitor the potential impact of Brexit on the Group and to take appropriate actions to ensure that the business is as well prepared as possible for Brexit. The Brexit working group has prepared for a range of Brexit outcomes, including "no deal". Given the continuing uncertainty regarding the outcome of Brexit, it is challenging to quantify or determine the impact of Brexit on the Group. However, given that the Group is a UK-based Group whose sales are predominantly made in the UK, our ongoing assessment is that Brexit will not have a significant impact on the Group. We do not therefore consider Brexit to be a principal risk. Key potential Brexit-related impacts on the business and mitigating actions taken are as follows:
-- Brexit's impact on foreign exchange rates to which the Group is exposed through the purchase of certain commodities - this risk is closely monitored and managed by the Treasury and Commodity Committee, which has a hedging strategy in place to manage the Group's exposure to foreign currency fluctuations.
-- Border disruption, which could impact the supply of certain raw materials and finished products - we are working closely with relevant suppliers to understand their Brexit plans and have increased our stock levels of key raw materials and finished products in preparation for Brexit.
-- The introduction of trade tariffs for imports to the UK from the EU could impact the Group - we have assessed the Group's potential exposure to trade tariffs and expect this impact to be manageable.
-- Brexit's impact on the free movement of people - working with our key third party logistics supplier, Eddie Stobart Limited, we have undertaken a detailed risk assessment of EU nationals at our key sites and do not expect this impact to be significant.
-- Brexit's impact on regulation - the extent to which the UK may diverge from EU regulations post-Brexit remains unclear. We will monitor the situation ongoing and determine the likely impact on the Group in the event of specific regulatory divergence. We do not expect any related impact to be significant.
We will continue to monitor developments and adapt our strategy as the impact of Brexit becomes clear.
The gross risk movement from the prior year for each principal risk is presented as follows:
Hot Features
Premium
Movement
No change Increased Decreased New risk
Principal risks and uncertainties
Risks relating to the Group
Risk Impact Controls and mitigating actions Movement
======================= ========================= ========================================= ===========
Changes in consumer Consumers may The Group offers a broad range No Change
preferences, decide to purchase of branded products across a
perception or and consume alternative range of flavours, subcategories
purchasing behaviour brands or spend and markets which offer choice
less on soft to the end consumer.
drinks.
Changing consumer attitudes and
behaviours are monitored on an
ongoing basis and inform our
brand plans and new product development.
Through increased focus and investment
in both reformulation and innovation
across the year we have adapted
our portfolio to align with these
changing consumer needs.
======================= ========================= ========================================= =========
Consumer rejection Consumers may Over a number of years we have No Change
of reformulated decide to purchase implemented our extensive innovation
products and consume alternative and reformulation programme,
brands or spend which was completed prior to
less on soft the introduction of the Soft
drinks. Drinks Industry Levy in April
2018. We reached the position
of 99% of our Barr Soft Drinks
portfolio produced by volume
containing less than 5g of total
sugars per 100ml. As disclosed
last year, we recognised the
risk of consumer rejection of
our reformulated products. We
continue to closely monitor consumer
acceptance levels and brand performance
across our total portfolio and
consumer rejection of our reformulated
products therefore remains a
principal risk.
The risk of further government
intervention on sugar remains,
however we do not currently consider
this to be a principal risk.
======================= ========================= ========================================= =========
Loss of product A loss of product Appropriate risk assessments No Change
integrity integrity in are carried out on a regular
the manufacturing basis and robust quality controls
supply chain and processes are in place to
could lead to maintain the high quality of
a product withdrawal our products. Product recall
or recall. procedures are tested regularly.
======================= ========================= ========================================= =========
Loss of continuity The loss of continuity There is a robust supplier selection No Change
of supply of of supply of process in place. Supplier performance
major raw materials major raw material is monitored on an ongoing basis
ingredients and/or and audits are undertaken for
packaging materials major suppliers. Multiple sources
could impact of supply are sourced wherever
our ability to possible. Last year a second
manufacture, supplier of carbon dioxide was
with an adverse appointed and additional carbon
impact on the dioxide tanks were placed at
Group's sales Milton Keynes and Bellshill.
and operating
profits. Commodity risks are managed by
the procurement team and reviewed
by the Treasury and Commodity
Committee. Contingency measures
are in place and are tested regularly.
Brexit's potential impact on
the supply of certain raw materials
is referred to above.
======================= ========================= ========================================= =========
Adverse publicity Adverse publicity Our risk management process is No Change
in relation in relation to designed to identify and monitor
to the soft the soft drinks events that may impact the Group
drinks industry, industry, the as a result of adverse publicity
the Group or Group or its and to ensure that controls are
its brands brands could in place to manage these risks.
have an adverse
impact on the Processes are in place to ensure
Group's reputation, compliance with health and safety
consumer consumption legislation and ethical working
patterns, sales standards and these are regularly
and operating reviewed by the Board and Management
profits. Committee. Quality standards
are well defined, implemented
and monitored. Corporate Social
Responsibility champions are
in place and we have clearly
defined sustainability commitments.
The Group maintains and develops
ISO 9001 and 14001 systems and
BRC standards which are subject
to annual external audits, with
any non-conformances addressed
in a timely manner.
Nutritional information is shown
on all of our products and we
have signed up to the UK Government's
voluntary front-of-pack nutritional
labelling scheme.
======================= ========================= ========================================= =========
Government intervention Government intervention This risk has been introduced New Risk
on packaging on packaging as a new principal risk this
waste waste, e.g. the year, given the increased pace
introduction of change and level of environmental
of a Deposit lobbying in relation to packaging
Return Scheme waste during the year, particularly
or a plastics in relation to single use plastic
tax, could have bottles. We are working constructively
an adverse impact with the British Soft Drinks
on consumer consumption Industry, the UK and Scottish
patterns, sales governments, and other key stakeholders
and operating in relation to potential interventions,
profits. such as the planned introduction
of a Deposit Return Scheme ('DRS')
in Scotland, the possible introduction
of a DRS in England and Wales,
and the possible introduction
of a single use plastics tax.
We have created a working group
to proactively manage packaging
related risks in a holistic manner
ongoing, overseen by the Risk
Committee.
======================= ========================= ========================================= =========
Failure to maintain Failure to maintain The Group offers a broad range Increased
customer relationships appropriate customer of brands that it manufactures
or take account relationships and distributes through a variety
of changing or a reduction of trade channels and customers.
market dynamics in the customer Performance is monitored closely
base could have by the Board and Management Committee
an adverse impact by trade channel and customer
on the Group's as appropriate. This includes
sales and operating monitoring of metrics which review
profits. brand equity strength, financial
and operational performance.
The Group focuses on delivering
high quality products and invests
heavily in building brand equity.
We work closely in partnership
with our customers on an ongoing
basis. Members of the senior
management team meet with key
customers throughout the year.
The ongoing consolidation in
the retail grocery market has
increased the level of gross
risk in this area. A project
commenced last year to determine
the potential impact of this
consolidation in the retail grocery
market on the Group and to take
appropriate actions; this has
continued to be a focus area
during the year.
======================= ========================= ========================================= =========
Inability to Failure to protect The Group invests considerable No Change
protect the the Group's intellectual effort in proactively protecting
Group's intellectual property rights its intellectual property rights,
property rights could result for example through trademark
in a loss of and design registrations and
brand value. vigorous legal enforcement as
and when required.
======================= ========================= ========================================= =========
Failure of the A catastrophic Assets within the Group are proactively No Change
Group's operational failure of the managed and maintained. Risk
infrastructure Group's major assessments are carried out on
production or a regular basis and appropriate
distribution actions taken. Robust business
facilities could continuity plans are in place
lead to a sustained and are regularly tested.
loss in capacity
or capability.
======================= ========================= ========================================= =========
Failure of critical A failure of IT assets within the Group are Increased
IT systems or critical IT systems proactively managed and procedures
a breach of could result exist that support rapid and
cyber security in a loss of clean recovery. Robust business
key systems, continuity plans and contingency
business interruption, measures are in place and are
lost sales or regularly tested.
lost production.
A cyber security The risk of cyber attacks increases
breach could on an ongoing basis. A cyber
lead to operational security maturity assessment
disruption, financial was completed during the year
loss and reputational by our internal auditor, who
damage. concluded that our approach is
generally in line with industry
practice. We have continued to
improve our cyber security controls
and have upweighted our internal
cyber security resource. Employee
awareness campaigns and training
continued during the year to
increase employee cyber risk
awareness. A new Digital Governance
Group was created during the
year, overseen by the Risk Committee,
the purpose of which is to manage
the risks related to the Group's
externally facing digital properties.
======================= ========================= ========================================= =========
Financial risks The Group's activities Our underlying objective is to No Change
expose it to reduce foreign currency related
a variety of volatility through our cost of
financial risks goods. Financial risks are reviewed
which include and managed by the Treasury and
market risk (including Commodity Committee, which seeks
medium term movements to minimise adverse effects on
in exchange rates, the Group's financial performance
interest rate through hedging known currency
risk and commodity exposures throughout the year.
price risk), Brexit's potential impact on
credit risk and foreign exchange rates to which
liquidity risk. the Group is exposed through
the purchase of certain commodities
is referred to above.
The Group's finance team reviews
cash flow forecasts throughout
the year, with headroom against
banking covenants assessed regularly.
The finance team uses external
tools to assess credit limits
offered to customers, manages
trade receivable balances vigilantly
and takes prompt action on overdue
accounts. The Group's financial
control environment is subject
to review by both internal and
external audit. Internal audit's
focus is to work with and challenge
management to ensure an appropriate
control environment is maintained.
======================= ========================= ========================================= =========
Third party Termination of We have robust strong relationships No Change
relationships existing partnerships with our various partners and
or renewal on proactively manage the effective
less favourable building of our partners' brands.
terms could result
in lost brand
contribution
and under-recovery
of supply chain
infrastructure
costs.
======================= ========================= ========================================= =========
Viability statement
In accordance with provision C.2.2 of the UK Corporate Governance Code 2016, the directors have assessed the viability of the Company over a three year period to January 2022, taking account of the Group's current financial and market position, future prospects and the Group's principal risks, as detailed in the Strategic Report.
The directors have determined that a three year period is an appropriate timeframe for the assessment given the dynamic nature of the FMCG sector and given that this is in line with the Group's strategic planning period. The starting point for the viability assessment is the strategic and financial plan which makes assumptions relating to the economic climate, market growth, input cost inflation and growth from the Group's performance drivers. The prospects of the Group have been taken into account, including the size of the current market, the strength of the Group's brands and past production capacity investment. The model was then subject to a series of theoretical "stress test" scenarios based on the materialisation of principal risks.
The directors have considered the impact of a number of severe but plausible scenarios associated with the principal risks, including significant changes in consumer preferences and governmental impact in relation to sugar and plastics, as well as the financial impact from a significant supply chain disruption (Brexit, technology or material supply). Within our Brexit scenario our considerations have included Supply Chain disruption and macroeconomic assumptions like FX. In addition, the directors measured the impact of a number of scenarios occurring together. These tests were then reviewed against the Group's current and projected future net cash/debt and liquidity position. Subsequent to the end of the financial year, the Group reached agreement on 18 March 2019 with its lenders to extend its current facilities, which expire in 2020 and 2022, by a further two years. This ensures the Group's facilities remain at the current level throughout the viability period. In each of the Group's downside scenarios, there is no indication that the Group will be required to obtain additional facilities above those recently extended. In addition, there is no breach of any covenants.
Finally a reverse "stress test" was performed, allowing the Board to assess scenarios and circumstances that would render its business model unviable.
The results of these tests were reviewed, taking into account the Group's current position, the Group's experience of managing adverse conditions in the past and mitigating actions available to the Group. Based on this assessment, the directors have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the three year period to January 2022.
Appendix C: Related party transactions
The following related party transactions are extracted from the Annual Report and Accounts (pages 142 - 143):
Related party transactions
Transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation. Details of transactions between the Company and related parties are as follows:
Sales of goods Purchase of goods
and services and services
================ ===================
2019 2018 2019 2018
GBPm GBPm GBPm GBPm
======================= ======= ======= ========= ========
Rubicon Drinks Limited - 44.3 4.9 57.6
Funkin Limited - 0.9 - -
======================= ======= ======= ========= ========
The amounts disclosed in the table below are the amounts owed to and due from subsidiary companies that are trading subsidiaries. In the year to 26 January 2019 new trade terms were agreed between the Company and Rubicon Drinks Limited ('RDL'). The purchase and sale of goods and services with RDL has now been replaced with a royalty agreement for the use of the RDL trademarks.
The balances are unsecured and are due on demand. The difference between the total of these balances and the amounts disclosed as amounts due by (Note 17) and to subsidiary companies (Note 19) are balances due by and due to dormant subsidiary companies.
Amounts owed by Amounts due to
related parties related parties
================== ==================
2019 2018 2019 2018
GBPm GBPm GBPm GBPm
======================= ======== ======== ======== ========
Rubicon Drinks Limited - - 2.4 82.8
Funkin Limited 0.4 0.2 - -
======================= ======== ======== ======== ========
Compensation of key management personnel
The remuneration of the executive directors and other members of key management (the Management Committee) during the year was as follows:
2019 2018
GBPm GBPm
================================= ===== =====
Salaries and short term benefits 5.3 4.2
Post employment benefits 0.5 0.6
Share-based payments - 0.1
================================= ===== =====
5.8 4.9
================================= ===== =====
The Directors' Remuneration Report can be found on pages 56 to 81.
Retirement benefit plans
The Group's retirement benefit plans are administered by an independent third party service provider. During the year the service provider charged the Group GBP0.4m (2018: GBP0.4m) for administration services in respect of the retirement benefit plans. At the year end GBPnil (2018: GBPnil) was outstanding to the service provider on behalf of the retirement benefit plans.
END.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
ACSGGUMGCUPBURM
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