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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Crawshaw | LSE:CRAW | London | Ordinary Share | GB00B2PQMW21 | ORD 5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 2.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMCRAW
RNS Number : 8954R
Crawshaw Group PLC
27 September 2017
27 September 2017
Crawshaw Group Plc
DELIVERY AGAINST VALUE-LED STRATEGY DRIVING PROGRESS
Strategic plan strengthened by factory shop rollout and transformational deal with 2Sisters
Crawshaw Group Plc ("Crawshaw", the "Company" or the "Group"), the UK's leading value butcher, announces its results for the 26 weeks ended 30 July 2017.
H1 Financial Highlights:
-- Group revenue up 2.3% to GBP22.1m (2016: GBP21.6m) -- Gross margin of 42.9% (2016: 45.2%) -- EBITDA(1) (GBP0.2m) (2016: GBP0.3m) -- Adjusted EBITDA(2) GBP0.0m (2016: GBP1.1m) -- Underlying Operating Loss(3) of GBP0.8m (2016: loss of GBP0.4m) -- Loss Before Tax of GBP1.2m (2016: loss of GBP0.4m), including (GBP0.4m) exceptional costs -- Cash of GBP6.8m at 30 July 2017 (29 January 2017: GBP2.1m)
H1 Operational Highlights:
Progress made against strategy to position Crawshaws as Britain's leading value butcher, delivering great quality fresh meat at the lowest possible price:
-- Strong customer response to improved offer, enhanced value and broader product ranges;
o Group LFL(4) sales -4.2% (2016: -4.4%); momentum build in H1 (Q1: -5.1%; Q2 -3.2%)
o Customer numbers -3.5%; momentum build in H1 (Q1: -5.6%; Q2 -1.1%)
o Food to go sales back in growth post H2 FY17 recovery actions
o Fresh meat customer numbers improving with average transaction values lower as customers trade into re-based value
-- H1 profitability impacted by sterling weakness and shape of sales recovery;
o Sterling depreciation of 10% caused a 1.5% gross margin impact
o Strategic investment in value reduced margin as expected by 1%
o Customer and sales recovery trajectory robust. Work ongoing to increase fresh meat average transaction values
-- Transformative partnership with 2Sisters Food Group progressing (commenced 25 May 2017):
o Core supply routes now well established
o Over 20% of fresh meat product now sourced from 2Sisters and expected to increase
o Framework in place delivering continuous change in our selection of top quality product to our customers at a significant discount
-- Fresh meat factory shops are now proven with accelerated growth fully funded:
o Factory shops trading in the period delivered circa 20% of Group sales
o One new factory shop opened in H1 with four more planned by year end
o Customers attracted to new levels of progressive value, with the excellent site economics allowing us to offer best market value
o Cash of GBP6.8m to facilitate accelerated factory shop roll-out
H2 Current Trading:
The positive customer and sales momentum from Q1 into Q2 has continued post period end into Q3. Customer numbers for the first 6 weeks of H2 have returned to growth, up 5.4% on the prior year, while LFL sales for the same period are now tracking at -1.1%. Having made good progress on recovering customer numbers, our current marketing and promotional plans are targeting improvements in fresh meat average transaction value as we look to trade new and returning customers across the full breadth of our winter/seasonal range.
We are experiencing further margin pressure from the continued weakness in sterling. This has impacted our current margin performance as we consciously chose not to pass on the resulting price increases to protect our recovery momentum. Having re-established a strong and growing customer base, we will now revert as planned to managing price inflation on a 'business as usual' basis with the appropriate pricing and promotional changes being made to balance sales growth and margin.
Strategic Update:
Our strategy of investing in value is working, with our improved retail proposition attracting more customers to Crawshaws.
The Group's immediate focus is to accelerate the rollout of our successful factory shop format. These destination sites are particularly attractive as they allow us to offer even greater value to customers through larger pack sizes and value progression. Factory shops are a simpler model to implement and operate, have lower rents and require significantly lower CAPEX.
Including the three new shops opened in the year, we now have eight standalone factory shop units which are trading above expectation and above our base model. The learnings of our latest openings have allowed us to reduce CAPEX requirements by up to 25% which underpins a circa one-year cash payback on investment. At our target rate of ten new shops per year, we expect our factory shops to account for well over half of Group revenue by the end of FY 2020.
We are confident that our value-led strategy and factory shop rollout, underpinned by our unique supply agreement with 2Sisters, will leave us well placed to achieve a step-change in long term profitability.
Noel Collett, CEO, commented:
"These results demonstrate progress in ensuring we have high quality products at the lowest possible prices. The improvements to the breadth, depth and price of our ranges are driving the significantly improving trend in customer numbers, which is a key metric of loyalty and success in preparation for the important winter and festive season ahead.
"As part of our focus on achieving unbeatable value, we are prioritising and accelerating the rollout of our proven factory shop format. The economics of these sites are hugely attractive, and they allow us to offer a wider range of fresh meat and associated products at a price not possible in our high street shops.
"We remain excited by our 2Sisters supply agreement and believe this partnership will be transformational for the long-term growth of the Group. Market conditions remain challenging, but we are confident that our focus on value leaves us well placed for the long-term."
Jim McCarthy, Chairman, said:
"Since joining Crawshaws earlier this year, I have been impressed by the progress that Noel and the team are making. The accelerated roll out of the successful factory shop format is strengthening the business's reputation for delivering amazing value, which is underpinned by the transformational supply agreement with 2Sisters. Crawshaws is one of the most exciting businesses in the value sector and the Board is confident that all the work done this year means the business is well set to create value for investors."
1. EBITDA is defined by the Group as profit/loss before tax, exceptional items, depreciation, amortisation, profit/(loss) on disposal of assets, net finance costs and shared based payment charge attributable to the LTIP Growth Share Scheme.
2. Adjusted EBITDA is defined by Group as profit/loss before tax, exceptional items, depreciation, amortisation, profit/(loss) on disposal of assets, net finance costs, share based payment charges attributable to the LTIP Growth Share Scheme and Accelerated Opening Costs. Accelerated opening costs are defined by the Group as the overhead investment in people, processes, systems and new store pre-opening costs i.e. costs directly associated with our accelerated store opening programme. In the period these costs amounted to GBP0.2m (2016: GBP0.7m) resulting in an adjusted EBITDA of GBP0.0m (2016: GBP1.1m).
3. Underlying Operating Loss is defined by the Group as Operating Profit before exceptional items and share based payment charges attributable to the LTIP Growth Share Scheme.
4. LFL stores are defined as stores which have been trading for 2 full years at the start of the financial year under review
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations.
Enquiries:
Tulchan Communications LLP
Susanna Voyle, Will Smith 0207 353 4200
Crawshaw Group plc
Noel Collett, Alan Richardson 01709 369 600
Peel Hunt LLP
Adrian Trimmings, George Sellar 020 7418 8900
Hot Features
Premium
Condensed Consolidated Statement of Comprehensive
Income For the 26 weeks ended 30 July 2017
Unaudited Audited Unaudited
26 Weeks 52 Weeks 26 Weeks
30.7.17 29.1.17 31.7.16
Notes GBP'000 GBP'000 GBP'000
Revenue 2 22,056 44,228 21,591
Cost of sales (12,595) (24,983) (11,839)
------------------------------- ------ ---------- --------- ----------
Gross profit 9,461 19,245 9,752
Other operating income 15 57 15
Administrative expenses (10,723) (20,715) (10,185)
------------------------------- ------ ---------- --------- ----------
Operating Loss (1,247) (1,413) (418)
Finance income 8 23 23
Finance expenses (2) (4) (3)
Net Finance Income/(Expense) 6 19 20
Share of profit of
equity accounted investees
(net of tax) - 12 -
------------------------------- ------ ---------- --------- ----------
Loss before income
tax (1,241) (1,382) (398)
Income tax credit/(charge) 4 176 167 4
Total recognised loss
for the period (1,065) (1,215) (394)
------------------------------- ------ ---------- --------- ----------
Attributable to:
Equity holders of the
Company (1,065) (1,215) (394)
Operating loss analysed
as:
EBITDA(1) (172) 104 348
Exceptional Costs 3 (388) (63) -
Share Based Payment
Charge 8 (92) (217) (168)
Depreciation and amortization (596) (1,237) (587)
Profit/(loss) on disposal
of fixed assets 1 - (11)
Operating loss (1,247) (1,413) (418)
------------------------------- ------ ---------- --------- ----------
Basic loss per ordinary
share 5 (1.163)p (1.535)p (0.50)p
Diluted loss per ordinary
share 5 (1.163)p (1.535)p (0.50)p
1. EBITDA is defined by the Group as profit/loss
before tax, exceptional items, depreciation, amortisation,
profit/(loss) on disposal of assets, net finance
costs and shared based payment charge attributable
to the LTIP Growth Share Scheme.
Condensed Consolidated Balance Sheet
As at 30 July 2017
Unaudited Audited Unaudited
30.7.17 29.1.17 31.7.16
Notes GBP000 GBP000 GBP000
Property, plant and
equipment 8,717 8,847 9,095
Intangible assets
- goodwill and
related
acquisition
intangibles 10,926 10,969 10,986
Investment in equity
accounted investees 125 125 106
---------------------- ---------- ------------------ ------------ -------------
Total Non-Current
Assets 19,768 19,941 20,187
Inventories 1,343 1,469 1,128
Trade and other
receivables 1,351 787 1,458
Cash and cash
equivalents 6,788 2,147 4,016
---------------------- ---------- ------------------ ------------ -------------
Total Current Assets 9,482 4,403 6,602
---------------------- ---------- ------------------ ------------ -------------
Total Assets 29,250 24,344 26,789
---------------------- ---------- ------------------ ------------ -------------
Share capital 6 5,651 3,962 3,962
Share premium 17,498 14,051 14,051
Reverse acquisition
reserve 447 447 447
Retained earnings (1,054) (81) 1,101
---------------------- ---------- ------------------ ------------ -------------
Total Shareholders'
Equity 22,542 18,379 19,561
Other payables 619 559 531
Deferred tax
liabilities 297 472 613
Interest bearing
loans
and borrowings 54 58 93
---------------------- ---------- ------------------ ------------ -------------
Total Non-Current
Liabilities 970 1,089 1,237
Trade and other
payables 5,699 4,812 5,935
Interest bearing
loans
and borrowings 39 64 56
---------------------- ---------- ------------------ ------------ -------------
Total Current
Liabilities 5,738 4,876 5,991
Total Liabilities 6,708 5,965 7,228
---------------------- ---------- ------------------ ------------ -------------
Total Equity and
Liabilities 29,250 24,344 26,789
---------------------- ---------- ------------------ ------------ -------------
Condensed Consolidated statement of changes in
shareholders' equity
For the 26 weeks ended 30 July 2017
Rev
Share Share Acq Retained Total
Capital Premium Reserve Earnings Equity
GBP000 GBP000 GBP000 GBP000 GBP000
---------------------- ---------- ------------------ ------------ ------------- ---------------
Balance at 31
January 2016 3,947 13,941 447 1,327 19,662
---------------------- ---------- ------------------ ------------ ------------- ---------------
Loss for the
Period - - - (394) (394)
Share Based Payment
Charge - - - 168 168
Share Options
241,470 shares 15 110 - - 125
---------------------- ---------- ------------------ ------------ ------------- ---------------
Balance at 31
July 2016 3,962 14,051 447 1,101 19,561
---------------------- ---------- ------------------ ------------ ------------- ---------------
Loss for the
period - - - (821) (821)
Share Based Payment
Charge - - - 49 49
Dividend on Equity
Shares - - - (372) (372)
Long term incentive
plan options
exercised - - - (38) (38)
Balance at 29
January 2017 3,962 14,051 447 (81) 18,379
---------------------- ---------- ------------------ ------------ ------------- ---------------
Loss for the
period - - - (1,065) (1,065)
Share Based Payment
Charge - - - 92 92
Share Placing
33,794,490 shares 1,689 3,447 - - 5,137
Balance at 30
July 2017 5,651 17,498 447 (1,054) 22,542
---------------------- ---------- ------------------ ------------ ------------- ---------------
Condensed Consolidated statement of cash flows
For the 26 weeks ended 30 July 2017
Unaudited Audited Unaudited
26 Weeks 52 Weeks 26 Weeks
30.7.17 29.1.17 31.7.16
Cash flows from operating GBP000 GBP000 GBP000
activities
(Loss)/Profit for the period (1,065) (1,215) (394)
Adjustments for:
Depreciation and amortization 596 1,211 587
Share Based Payment Charge 92 217 168
Loss / (Profit) on sale of
property, plant and equipment (1) 37 11
Net finance (income)/charges (6) (19) (20)
Share of (profit) of equity
accounted investees - (12) -
Taxation (176) (167) (4)
----------------------------------- ----------------------- ----------------------- ------------------
Operating cash flow before
movements in working capital (560) 52 348
----------------------------------- ----------------------- ----------------------- ------------------
Movement in trade and other
receivables (563) (196) (641)
Movement in trade and other
payables 1,010 749 1,657
Movement in inventories 127 (455) (114)
Tax Paid/(received) (64) 168 168
----------------------------------- ----------------------- ----------------------- ------------------
Net cash generated from operating
activities (50) 318 1,418
----------------------------------- ----------------------- ----------------------- ------------------
Cash flows from investing
activities
Purchase of property, plant
and equipment (435) (2,947) (2,551)
Proceeds from sale of property,
plant & equipment 11 63 22 Interest Received 8 23 23 Interest paid (2) (4) (3) Equity Investees - 12 19 Dividend paid - (372) - ----------------------------------- ----------------------- ----------------------- ------------------ Net cash (used in) investing activities (418) (3,225) (2,490) ----------------------------------- ----------------------- ----------------------- ------------------ Cash flows from financing activities HP Financing (28) 49 83 Share Capital Raised 5,137 125 125 Net cash generated from financing activities 5,109 174 208 ----------------------------------- ----------------------- ----------------------- ------------------ Net change in cash and cash equivalents 4,641 (2,733) (864) Cash and cash equivalents at start of period 2,147 4,880 4,880 ----------------------------------- ----------------------- ----------------------- ------------------ Cash and cash equivalents at end of period 6,788 2,147 4,016 ----------------------------------- ----------------------- ----------------------- ------------------
Notes to the condensed consolidated financial statements
1. BASIS OF PREPARATION
Reporting Entity
Crawshaw Group Plc (the "Company") is a company incorporated and domiciled in the UK.
The condensed consolidated interim financial statements of the Company as at and for the 26 weeks ended 30 July 2017 comprise the Company and its subsidiaries (together referred to as the "Group") and equity account the Group's interest in jointly controlled entities.
Basis of Preparation
These condensed consolidated interim financial statements have been prepared in accordance with IAS 34 'Interim Financial Reporting', as adopted by the EU and do not include all of the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of the Group as at and for the year ended 29 January 2017. The annual financial statements of the Group are available upon request from the Company's registered office.
The comparative figures for the financial year ended 29 January 2017 are not the Company's statutory accounts for that financial year. Those accounts have been reported on by the Company's auditors and delivered to the registrar of companies. The report of the auditors was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498(2) or (3) of the Companies Act 2006.
The condensed consolidated interim financial statements have not been audited but have been reviewed by the Company's auditors.
Significant Accounting Policies
The accounting policies applied are consistent with those of the annual financial statements for the 52 weeks ended 29 January 2017, as described in those annual financial statements, which were prepared in accordance with IFRS as adopted by the EU.
Significant Judgements, Key Assumptions and Estimation Uncertainty
The preparation of the condensed consolidated interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and other factors that are believed to be reasonable at the time the estimate is made. Actual results may differ from these estimates.
In preparing these condensed consolidated interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those applied to the consolidated financial statements as at and for the 52 weeks ended 29 January 2017.
Going Concern
The Group meets its day to day working capital requirements through cash on hand and cash generated from operations. Current cash balance is GBP6.8m with HP commitments of GBP0.1m. The Group has cancelled its GBP4m, 5 year Revolving Credit Facility.
The Directors have reviewed the profit and cash forecasts of the Group with appropriate sensitivities around operational performance. The Directors have concluded that the Group will have sufficient cash to meet its obligations and to pursue its existing strategy. Accordingly, the Directors consider that these statements should be prepared on a going concern basis.
Basis of Consolidation
The consolidated financial information includes the financial information of the Company and its subsidiary undertakings made up to 30 July 2017 (together referred to as the 'Group').
2. REVENUE
The Directors have undertaken a review of the Group's continuing operations and their associated business risks. The Directors consider that the continuing operations represent one product offering with similar risks and rewards and should be reported as a single business segment in line with the Group's internal reporting framework. All revenue received during the period was received from customers within the United Kingdom.
Unaudited Audited Unaudited
26 Weeks 52 Weeks 26 Weeks
3. EXCEPTIONAL ITEMS 30.7.17 29.1.17 31.07.16
GBP000 GBP000 GBP000
Exceptional costs in the period relate to:
Supply chain partnership and subscription agreement 380 - -
Bank facility arrangement fees and non-utilisation
Charges 8 40 -
Other costs - 23 -
Total exceptional items 388 63 -
Unaudited Audited Unaudited
26 Weeks 52 Weeks 26 Weeks
4. INCOME TAX EXPENSE 30.7.17 29.1.17 31.7.16
GBP000 GBP000 GBP000
Recognised in the Income
Statement
The income tax expense
is based on the estimated
effective rate of taxation
on trading for the period
and represents:
- 24 -
Current tax
- (22) -
Adjustments for prior year
--------------- --------- -----------
- 2 -
Deferred tax:
Origination and reversal
of timing differences (176) (168) (4)
Adjustments for prior year - (1) -
(176) (169) (4)
Income Tax (Credit) (176) (167) (4)
Reconciliation of effective
tax rate
Loss for the period (1,065) (1,215) (394)
Total Tax Expense (176) (167) (4)
--------------- --------- -----------
Loss excluding taxation (1,241) (1,382) (398)
Tax using UK Corporation
tax rate of 19.325% (240) (276) (80)
Non-Deductible Expenses 40 78 37
Adjustment in respect of
prior years - (23) 35
Tax not at standard rate 24 30 4
Group relief - 24 -
--------------- --------- -----------
Total tax credit (176) (167) (4)
5. EARNINGS PER ORDINARY SHARE
Basic earnings per ordinary share is calculated by dividing the earnings attributable to the ordinary shareholders by the weighted average number of ordinary shares outstanding during the period of 91,553,412 (31/01/17: 79,140,309) (31/07/16: 79,043,100). There were no dilutive potential ordinary shares. In the period under review the share options were anti-dilutive as the Group reported a loss. There is an outstanding warrant which, if executed, would result in a further 45,436,069 shares being issued (note 6) which would dilute earnings per ordinary share.
6. SHARE CAPITAL Unaudited Audited Unaudited
30.7.17 29.1.17 31.7.16
Allotted, called up and fully GBP000 GBP000 GBP000
paid
113,025,049 ordinary shares
of 5p each 5,651 3,962 3,962
In May 2017, Invest Co 1 Limited and a concert party acquired an aggregate of 33,794,490 new shares in the Group for GBP5.1m. These investments reflect a price per ordinary share of 15.2p being the market price of the Company as the share purchase was being structured. A warrant is in place for a further 45,436,069 shares to be issued to Invest Co 1 Limited, subject to certain conditions being met. Should the conditions be met and the warrant executed, Invest Co 1 Limited and the concert party would hold 50% of the Group's issued share capital.
7. RELATED PARTY TRANSACTIONS
Crawshaw Butchers Limited, a subsidiary of Crawshaw Group Plc, holds a 50% share in a partnership which trades under the name of RGV Refrigeration. The operations of the partnership comprise of the maintenance and repair of refrigeration machinery for a variety of customers.
In May 2017 Crawshaw Group Plc entered into a supply chain partnership with the 2 Sisters Food Group. Crawshaw Group Plc subsequently entered into a subscription agreement with Invest Co 1 in which they acquired 29.72% of the issued share capital of Crawshaw Group Plc. 2 Sisters Food Group and Invest Co 1 are controlled by Ranjit and Baljinder Boparan. 2 Sisters Food Group are therefore considered to be a related party of Crawshaw Group Plc. Since the start of the agreement, the value of purchases from 2 Sister Food Group to 30 July 2017 was GBP442k and a balance of GBP233k was owed by Crawshaws Group Plc to 2 Sisters Food Group at the end of the period. There were no sales made by Crawshaw Group Plc to 2 Sisters Food Group from the start of the agreement.
8. SHARE BASED PAYMENTS
Shares were granted under the Crawshaw Group plc Long-Term Incentive Plan on 24(th) April, 2015. The shares are 'growth shares' in a subsidiary, Crawshaw Butchers Ltd, but have value linked to the market capitalisation of Crawshaw Group plc. Shareholders are entitled to a maximum pool of 10% of the growth in value of the market capitalisation of Crawshaw Group plc over the hurdle rate, where the hurdle rate is set as a premium of 15% to market capitalisation immediately prior to the award of the shares.
Shareholders have the option to "put" their Eligible Put Shares on the occurrence of the following events:
-- The First and Second Put Dates: Shareholders can put 1/6th of their Shares from the first anniversary of the date of grant and a further 1/6th of their Shares from the second anniversary of the date of grant.
-- The achievement of the Performance Conditions: Shareholders can put 1/3rd of their Shares once the market capitalisation of Crawshaw Butchers has increased by 50% since the date of grant. In addition, shareholders can put a further 1/3rd of their Shares once the market capitalisation of Crawshaw Butchers has increased by 100% since the date of grant.
-- On a voluntary winding up or change of control of Crawshaw Group plc.
The fair value of the awards is determined by using the Monte Carlo model and allowance has been made for the following assumptions: Expected exercise date, expected volatility of total shareholder return, expected future dividends and the risk free rate of interest. 100,000 simulations were used in the Monte Carlo model and set out below is a summary of the key data.
Date of Grant 24 April 2015
---------------------------- --------------------------
Ave Share price in
period prior to grant 53.1p
---------------------------- --------------------------
Volatility of TSR for 60% pa
the Company
---------------------------- --------------------------
Dividend Yield 1% pa
---------------------------- --------------------------
Risk Free rate of Interest 1.75% pa
---------------------------- --------------------------
Exercise pattern Expected exercise between
0 and 10 years
---------------------------- --------------------------
The expected Volatility is wholly based on the historic volatility simulated over differing time periods to the date of grant.
The fair value of the liability is re-measured at each balance sheet date to take into account non-market related changes. The total expense for the period between 30 January and 30 July 2017 is GBP92,000 (31/07/2016: GBP168,000).
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR LLFERADIRFID
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September 27, 2017 02:00 ET (06:00 GMT)
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