Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
John Lewis Of Hungerford Plc | LSE:JLH | London | Ordinary Share | GB0004773148 | ORD 0.1P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 1.35 | 1.00 | 1.70 | 0.00 | 00:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
TIDMJLH
RNS Number : 4571J
John Lewis Of Hungerford PLC
13 December 2022
The information contained within this announcement is deemed by the Group to constitute inside information as stipulated under the Regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations 2019/310 ("MAR"). With the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.
13 December 2022
JOHN LEWIS OF HUNGERFORD PLC
FINAL RESULTS
John Lewis of Hungerford plc ("John Lewis of Hungerford" or the "Company"), the specialist kitchen manufacturer and retailer, announces its final results for the year ended 30 June 2022.
Chief Executive's Business Review
We are pleased to report that John Lewis of Hungerford achieved sales for the year ended 30 June 2022 of GBP10.3 million (2021: GBP7.9 million), an increase of 30.9 per cent. The Company celebrated its 50th Anniversary in the Summer of 2022, and in this milestone year, has achieved sales in excess of GBP10 million for the first time. Profit Before Tax and non-recurring costs* was GBP166k (2021: Profit Before Tax GBP80k). Underlying EBITDA* (pre IFRS 16) was GBP500k (2021: EBITDA GBP424k).
Sales of GBP10.3 million do not fully reflect the strength of the trading performance of the Company throughout the reported year. The orders secured by our 12 stores were GBP12.3 million (FY21: GBP9.3 million). The final quarter of the year was impacted by disruption from Covid-19 within the factory in Wantage, with the highest level of interruption to production throughout the pandemic and a total of 81-man days lost. This included periods where sections of the factory had to close completely. Without this disruption, a still higher proportion of the GBP12.3 million orders would have been completed before 30 June 2022, and recognised as sales in the year, with the Gross Margin on these sales flowing through to profit. However, this disruption to the final quarter of FY22 has impacted positively the start of our new financial year to 30 June 2023, with a significantly stronger order book secured, of GBP5.3 million compared to GBP3.2 million at the same point last year.
Gross Margin for the year declined by -1.2% points in the year to 45.9%. The Company experienced some extreme increases in raw material prices in the year, with some increases more than 100%. The Company took action to pass these cost increases on, by raising the retail prices. However, there is a time lag between quoted business and completing the delivered sale and installation, which on average is 2-3 months later, whereby the impact of the price increases will not fully be seen in the year we report today. We are now seeing welcome signs of some level of stabilisation for raw material prices.
The year finished with a positive gross cash position of GBP1,473k. The Company has total loans of GBP1,116k, largely secured on its freehold properties. Net cash, excluding IFRS 16 lease liabilities, was therefore GBP357k (2021: net cash GBP165k). The Company was grateful for the Government support during the pandemic years FY20/FY21, which allowed for delayed phasing of VAT and PAYE payments. All of the agreed deferred payments were made promptly during the year ended 30 June 2022 and the Company is fully up to date, with no further outstanding deferred payments.
The Company owns the freeholds of its factory in Wantage, and its showroom in Hungerford. These freeholds have been revalued as at 30 June 2022, with the total valuation increased by GBP584k to GBP2,431k. The revaluation is reflected in the Accounts to 30 June 2022 as a movement in the revaluation reserve. The Company's Net Assets as at 30 June 2022 were GBP1.4 million (2021: GBP0.8 million).
The costs have been commensurate with the business reporting GBP10.3 million of turnover, combined with deposits secured against a further GBP2 million of sales. The Board are confident that developing the infrastructure throughout the FY22 year has secured a strong foundation for continued growth over the forthcoming period, in a structurally improved operating model, which was able to secure GBP12.3 million of orders within FY22.
* PBT before one-off, non-recurring costs of GBP166k /EBITDA of GBP500k is after adjusting for GBP152k of one-off non-recurring costs which occurred in the year to June 2022, and which are not expected to be repeated going forward. These non-recurring costs are related to project and one-off restructuring costs. Reported PBT for the year ended 30 June 2022 was GBP14k.
Marketing
The Company has continued to develop its digital capabilities, working with expert partners in the field. Fueled by compelling new photography from our successfully completed projects, the business has created a convincing portfolio to demonstrate its credentials to our discerning customer.
The substantial increase in orders secured has demonstrated the success of being selective in the choices of our marketing channels. From data driven digital campaigns to enhancing our presence in the social media arena, with an emphasis on Instagram, the Company continues to work closely with our PR advisory team, to secure the right traffic to our website, to convert into successful client relationships. With a focused approach on enhancing the customer journey through our website, we are seeing improvements in the level of appointments coming into the business.
The marketing of our 50th Birthday commenced in the Summer of 2022 and has seen the launch of our new Brochure, which has been extremely well received. It is a ground-breaking piece of work, providing both inspiration and learning for our customer, to support our dialogue during the sale. This has helped our customers to appreciate the difference in the unique customer experience offered by the John Lewis of Hungerford team. Our 50th Birthday in the summer coincided with the Jubilee celebrations for Her Late Majesty Queen Elizabeth II. We were given the opportunity to feature in the widely distributed official publication for the Platinum Jubilee, celebrating the Best of British Manufacturing. We were delighted have been invited to be a part of this highly respected publication and have seen benefits from the high value clientele it has attracted into the Company.
Ensuring we have been able to continue our work with professional intermediaries remains core to our success in attracting larger, multi-room projects. Whole-home renovations with a considerably higher spend are a more frequent occurrence, as our customers look to furnish their home with one, high-end, luxury cabinet maker. Working closely with their architect, developer or interior designer, has given the Company the opportunity to partner with some exciting new professionals in the home renovation space.
The finance proposition available to our customers through Novuna (formerly Hitachi) Consumer Finance has provided our customer with options to spread the cost of their new Kitchen. This has attracted new customers to the Company, now able to afford to buy their dream kitchen.
The impact of these initiatives has led to a record number of kitchens being sold in the year, with a shift towards more traditional options in cabinetry choices, reflecting a return to classic styles, which truly stand the test of time. Customers continue to use the versatile cabinetry options available through our bedrooms business to adapt their needs around the home.
Operations
The acquisition of our new storage facility on the Grove Business Park in Wantage has been integral to facilitating the growth we report today. With the increased throughput in our production facility, it has been vital to work with our highly committed and effective workforce to improve the operating model and make efficiency gains, as we plan for continued growth.
A review to introduce shift working and additional resource has been undertaken, to allow the Board to support the business in developing the right model, to ensure we continue to deliver a product with a consistently high standard of finish, for which our Brand is recognised. Challenges in the supply chain have led to the ongoing management of delayed product, mostly managed by procuring our white goods months ahead of any planned delivery schedule. As a result, we have been able to continually offer a competitive lead time, which has stood us in good stead over the period and continues to do so.
Raw materials have seen significant price increases, some in excess of 100%; as mentioned, we are now seeing signs of some stabilisation in this area, however this has undoubtedly impacted our margin for the year.
Work on our MRP system continues, to allow the business the visibility on improved capacity planning and also all key margin drivers within our supply chain. This work has commenced, with the system improvements due to be live later in our current year.
With increased demand, small improvements will produce incremental gains in our margin, with our new Production Manager working hard to lead the team in this regard.
To ensure our people are able to work as effectively as possible, we continue to put the welfare of our employees at the heart of our business. The introduction of a We Care Policy, which provides exceptional health benefits and support, together with more general advice on wellbeing and mental health services, ensures that our people feel looked after, during these stressful and turbulent economic times.
Trading Outlook
As stated earlier, we entered the new financial year with a robust order book, inclusive of the deferred orders from FY22. As a result, the level of orders confirmed in the first 23 weeks are ahead of the prior year. Dispatched sales, forward committed orders and future orders against which a first stage deposit has been taken, stood at GBP8.6 million (2021: GBP7.4 million). New business has remained consistent and with improvements driven by the digital marketing strategy, the quality of quoted business is strong and we remain confident of our ability to continue to convert at a high level moving forward.
Each carefully considered building block in our FY23 plan has been evaluated for its impact on our profits for this current year, as we continue to strengthen our capacity and our infrastructure to respond to sustainably higher demand, confident that our operating model can accommodate the growth we anticipate over the coming period. Our business has proved its resilience over the last 2 years and given the inherent expertise within the Company, we are well positioned to maintain our trend of market share gains.
Whilst we believe that the demand is in line with our plans for growth in FY23, the uncertainty in the financial markets has created a degree of hesitancy for customers to complete on their orders. The Board continues to track the economic indicators, together with the supply chain challenges and the ongoing impact on pricing. There are a range of plans prepared to respond appropriately to changing market conditions, based on whether the Board considers the external changes to be for the short or long term.
The unprecedented growth experienced in the year that we are reporting today, is a milestone for the Company in its 50th Birthday year. It has been both demanding and exciting, for our teams across the business. We thank them for their hard work and resilience, to ensure that we have been able to capitalise on this demand to the benefit of all of our stakeholders, as we continue to build a Company with increased capacity and capability over the coming period.
On behalf of the Board, I would like to thank our Employees, our Shareholders and our Supplier Partners, for their ongoing support and counsel throughout the period.
As we move through FY23, we continue to celebrate 50 years of John Lewis of Hungerford, with confidence that the Company can achieve sustained profitability.
Kiran Noonan
Chief Executive Officer
12 December 2022
Enquiries:
John Lewis of Hungerford plc 01235 774300
Kiran Noonan - Chief Executive Officer / Acting Chairman
Allenby Capital Limited (Nominated Adviser and Broker) 020 3328 5656
David Worlidge / Nick Naylor / George Payne (Corporate Finance)
Matt Butlin (Sales and Corporate Broking)
Income Statement for the year ended 30 June 2022 2022 2021 Notes GBP GBP Revenue 10,325,129 7,877,130 Cost of sales (5,580,045) (4,165,462) ------------ ------------ Gross profit 4,745,084 3,711,668 Selling and distribution costs (545,813) (408,863) Administrative expenses (3,968,667) (3,160,325) Other operating income 2,520 165,012 ------------ ------------ Total (3,966,147) (2,995,313) Profit from operations 2 233,124 307,492 Finance income 59 297 Finance expenses (219,624) (227,255) ------------ ------------ Profit before tax 13,559 80,534 Tax Credit 3 - 124,549 ------------ ------------ Profit for the year 13,559 205,083 ============ ============ Earnings per share 4 Basic 0.01p 0.11p Fully diluted 0.01p 0.10p Statement of Financial Position as at 30 June 2022 30 June 30 June 2022 2021 Notes GBP GBP Non-current assets Intangible assets 148,147 140,470 Property, plant and equipment 5 3,125,339 2,629,053 Right of use assets 1,579,524 1,372,434 Trade and other receivables 31,500 31,500 ------------ ------------ 4,884,510 4,173,457 Current assets Inventories 251,580 193,133 Trade and other receivables 1,864,437 868,878 Deferred tax asset 82,000 82,000 Cash and cash equivalents 1,472,771 1,301,612 ------------ ------------ 3,670,788 2,445,623 Total assets 8,555,298 6,619,080 ------------ ------------ Current liabilities Trade and other payables (2,429,751) (2,052,345) Customer deposits (1,734,596) (944,000) Lease liabilities (279,798) (264,168) Provisions 7 (23,423) (29,998) (4,467,568) (3,290,511) Non-current liabilities Borrowings 6 (1,115,761) (1,137,146) Lease liabilities (1,518,875) (1,335,874) Provisions 7 (52,632) (52,632) ------------ ------------ (2,687,268) (2,525,652) Total liabilities (7,154,836) (5,816,163) ------------ ------------ Net assets 1,400,462 802,917 ============ ============ Equity Share Capital 193,945 193,945 Share Premium 1,222,433 1,222,433 Other Reserves 1,421 1,421 Revaluation reserve 1,102,343 518,357 Retained Earnings (1,119,680) (1,133,239) ------------ ------------ Total equity 1,400,462 802,917 ============ ============
Statement of Changes in Equity for the year ended 30 June 2022
Share Share Other Revaluation Retained Capital Premium Reserves Reserve Earnings Total GBP GBP GBP GBP GBP GBP --------------- -------- ---------- --------- ------------ ------------ ---------- At 30 June 2020 186,745 1,188,021 1,421 560,906 (1,342,373) 594,720 Profit for the year - - - - 205,083 205,083 Share issue 7,200 34,412 - - - 41,612 Revaluation of freeholds - - - - - - Deferred tax on Revaluation of freeholds - - - (42,549) - (42,549) Share based payments - - - - 4,051 4,051 ---------------- -------- ---------- --------- ------------ ------------ ---------- At 30 June 2021 193,945 1,222,433 1,421 518,357 (1,133,239) 802,917 Profit for the year - - - - 13,559 13,559 Share issue - - - - - - Revaluation of freeholds - - - 583,986 - 583,986 Deferred tax on Revaluation of freeholds - - - - - - Share based payments - - - - - - ---------------- -------- At 30 June 2022 193,945 1,222,433 1,421 1,102,343 (1,119,680) 1,400,462 ---------------- -------- ---------- --------- ------------ ------------ ----------
Statement of Cash Flows for the year ended 30 June 2022
2022 2021 GBP GBP Cash flows from operating activities Profit from operations after tax 233,124 432,041 Amortisation of intangible assets 33,104 32,970 Depreciation and impairment of property, plant and equipment 174,338 188,403 Depreciation of right of use assets 258,731 256,990 Share based payments - 4,051 Loss on disposal of property, plant and equipment 2,160 3,237 (Increase) in inventories (58,447) (40,603) (Increase) in receivables (995,559) (315,102) Increase in payables 377,406 598,114 Increase in Customer Deposits 790,596 362,942 (Decrease) in provisions (6,575) (34,423) ---------- ---------- Cash generated from operations 808,878 1,488,620 Tax (Credit) on Operations - (124,549) Net cash from operating activities 808,878 1,364,071 ---------- ---------- Cash flows from investing activities Purchase of intangible assets (40,781) (16,250) Purchase of property, plant and equipment (92,407) (27,317) Net proceeds from sale of property, plant and equipment - (2,487) Interest received 59 297 Net cash used in investing activities (133,129) (45,757) ---------- ---------- Cash flows from financing activities Interest paid (126,769) (125,970) Allotment of shares - 41,608 Repayment of borrowings - finance leases (21,385) (18,887) Repayment of borrowings - bank loans - (111,701) Repayment of IFRS 16 lease liabilities (356,436) (360,517) Net cash used in financing activities (504,590) (575,467) ---------- ---------- Net increase in cash and cash equivalents 171,159 742,847 ---------- ---------- Net cash and cash equivalents at the start of the period 1,301,612 558,765 Net cash and cash equivalents at the end of the year 1,472,771 1,301,612 ========== ========== Net cash and cash equivalents comprise: Cash at bank and in hand 1,472,771 1,301,612 Bank overdrafts - - 1,472,771 1,301,612 ========== ==========
The table below sets out an analysis of net debt and the movements in net debt for each of the periods presented.
Reconciliation of Net debt Liabilities from financing Other activities assets Lease Borrowings liabilities Sub-total Cash balances Net debt as at 1 July 2020 1,267,734 1,674,316 2,942,050 558,765 Cash Flows (130,588) (239,363) (369,951) 742,847 New leases - 165,089 165,089 - Net debt as at 30 June 2021 1,137,146 1,600,042 2,737,188 1,301,612 ----------- ------------- ---------- -------------- Cash Flows (21,385) 198,631 177,246 171,159 Net debt as at 30 June 2022 1,115,761 1,798,673 2,914,434 1,472,771 =========== ============= ========== ============== Notes to the Financial Statements 1. General information
While the financial information included in this preliminary announcement has been prepared in accordance with International Financial Reporting Standards (IFRSs), this announcement does not itself contain sufficient information to comply with IFRSs. The Group will publish full financial statements that comply with IFRSs which will shortly be available on its website and are to be posted to shareholders shortly.
The financial information set out in the announcement does not constitute the Company's statutory accounts for the years ended 30 June 2022 or 2021. The financial information for the year ended 30 June 2021 is derived from the statutory accounts for that year, which were prepared under IFRSs, and which have been delivered to the Registrar of Companies. The auditor's report on those accounts was unqualified and did not contain a statement under either Section 498(2) or Section 498(3) of the Companies Act 2006 and did not include references to any matters to which the auditors drew attention by way of emphasis.
The financial information for the year ended 30 June 2022 is derived from the audited statutory accounts for the year ended 30 June 2022 on which the auditors have given an unqualified report, that did not contain a statement under section 498(2) or 498(3) of the Companies Act 2006. The statutory accounts will be delivered to the Registrar of Companies following the Company's annual general meeting.
Going concern
The financial statements are prepared on a going concern basis, which the directors believe to be appropriate for the following reasons: The results show that the Company made a profit before tax and one-off, non-recurring expenditure, of GBP166k and a reported profit of GBP14k (2021: profit before tax of GBP80k) and had net current liabilities of GBP895k (2021: GBP844k) as at 30 June 2022. The one-off non-recurring costs were related to project and restructuring costs. The year finished with a positive gross cash position of GBP1,473k. The Company has total loans of GBP1,116k, largely secured on its freehold properties. Net cash, excluding IFRS 16 lease liabilities, was therefore GBP357k (2021: net cash GBP165k). Customer deposits are GBP790k higher than last year, reflecting the strength of the order book at year end. The Company owns the Freeholds of its factory in Wantage, and also its showroom in Hungerford. These Freeholds have been revalued as at June 2022, with the total valuation increased by GBP584k to GBP2,431k. The revaluation is reflected in the Accounts to 30 June 2022 as a movement in the revaluation reserve. The Company's closing Net Assets were GBP1.4 million (2021: GBP0.8 million). The Directors have had preliminary contact with lenders to re-finance the loan, based on our return to profitability, asset backing and stronger cash generation. It is the intention of the Directors to refinance the loan within the new financial year to 30 June 2023. The Trading Outlook within the Chief Executive's Business review shows that we entered the new financial year with a robust order book, inclusive of the deferred orders from FY22. As a result, the level of orders confirmed in the first 21 weeks are ahead of the prior year. Dispatched sales, forward committed orders and future orders against which a first stage deposit has been taken, stood at GBP8.6 million (2021: GBP7.4 million). New business has remained consistent and with improvements driven by the digital marketing strategy, the quality of quoted business is strong and we remain confident of our ability to continue to convert at a high level moving forward. Each carefully considered building block in our FY23 plan has been evaluated for its impact on our profits for this current year, as we continue to strengthen our capacity and our infrastructure to respond to sustainably higher demand, confident that our operating model can accommodate the growth we anticipate over the coming period. Cash flows have been prepared for a period of at least twelve months from the date of signing these financial statements. For additional prudence, the Directors have modelled a severe, but plausible, sensitivity up to a 15% reduction in sales against this plan and for a period of twelve months from the date of signing, to be assured that the Company can withstand any economic instability and the insecurity around energy markets arising from the current war in Ukraine. As the Company operates a made-to-order, negative working capital model, it is reliant on the cash flows from customer deposits and completion of sales to be able to meet its liabilities as they fall due. The Directors have considered all of the factors noted above, including the strength in the Company's current trading and forward order book, together with the high levels of quoted business moving forwards and are confident that the Company has adequate resources to continue to meet all liabilities, as and when they fall due, for the foreseeable future and, at least for the period of twelve months from the date of approval of these financial statements. PROFIT FROM OPERATIONS 2 2022 2021 GBP GBP Profit from operations is stated after charging: Auditors remuneration - Company audit 26,900 26,900 Auditors remuneration - taxation services 3,600 3,600 Amortisation of intangible fixed assets 33,104 32,970
Depreciation of owned property plant and equipment 161,895 175,959 Depreciation of plant and equipment held on finance leases 12,444 12,444 Depreciation of Right of Use Assets 258,731 256,990 Government Grant - CJRS - Direct Factory Labour - (20,571) - Other Salaries - (62,564) Other Operating Income - 'Government Grant for Retail Businesses' - (165,012) Profit / (Loss) on disposal of property, plant and equipment (2,160) 3,237 Operating lease rentals - Plant and machinery 11,894 11,610 Cost of inventories recognised as an expense 3,706,358 2,806,385 TAX ON PROFIT FROM OPERATIONS 3 2022 2021 GBP GBP Current period taxation UK Corporation tax charge for the period - - Total current tax - - Origination and reversal of temporary timing differences - - Current year deferred tax asset recognised / (not recognised) - - Reversal of previously recognised Deferred Tax asset - 82,000 Deferred tax credit on losses - - Adjustment in respect of previous years - - Research and Development tax credit Changes in tax rates being 6% impact on the deferred tax asset/liabilities recognised on losses/revaluations in prior year - 42,549 - 124,549 ======== ========== The tax assessed for the period differs from the standard rate of corporation tax in the UK. The differences are explained below: 2022 2021 GBP GBP Profit on ordinary activities before tax 13,559 80,534 -------- ---------- Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% 2,576 15,301 Effect of: Expenses not deductible for tax purposes - - Depreciation on assets not qualifying for tax allowances - 2,197 Other permanent differences (2,576) 32,992 Adjustment in respect of previous years - - Research and Development tax credit Prior year adjustment on IFRS16 adoption - - Effect of change in local corporation tax rate - (104,867) Deferred tax asset not recognised - (27,623) Deferred tax credit on losses - - Change of tax rate for DT Asset on Revaluation reserve recognised in OCI - (42,549) Total tax credit / (charge) in income statement - 124,549 ======== ========== The main rate of corporation tax will rise from 19% to 25% from 1 April 2023. On this basis deferred tax is provided at the future rate of 25%. EARNINGS PER SHARE 4 2022 2021 Earnings per ordinary share is calculated as follows: Basic Profit attributable to ordinary shareholders (GBP) 13,559 205,083 Weighted average number of ordinary shares in issue 193,945,190 189,388,807 Earnings per ordinary share 0.01 p 0.11 p --------------- --------------- Fully diluted Profit attributable to ordinary shareholders (GBP) 13,559 205,083 Weighted average number of ordinary shares in issue 193,945,190 189,388,807 Weighted average number of ordinary shares under option 17,478,866 17,478,866 Earnings per ordinary share 0.01 p 0.10 p =============== =============== Basic earnings per share amounts are calculated by dividing the profit for the year attributable to ordinary equity holders of the Company by the weighted average number of Ordinary shares outstanding during the year. Diluted earnings per share is calculated by dividing the profit attributable to ordinary equity holders of the Company by the weighted average number of Ordinary shares outstanding during the year plus the weighted average number of Ordinary shares that would have been issued on the conversion of all dilutive potential Ordinary shares into Ordinary shares. PROPERTY, PLANT AND EQUIPMENT 5 Office Showroom Plant & fixtures, Freehold display machinery fittings land and & shop and loose & IT buildings fittings tools equipment Total Cost or Revaluation GBP GBP GBP GBP GBP At 1 July 2020 2,685,886 2,236,772 563,899 307,266 5,793,823 Additions - 8,644 703 17,970 27,317 Disposals - (4,147) (33,974) (1,104) (39,225) Utilise Oxford Dilapidations (3,423) - - - (3,423) Revaluation - - - - - At 30 June 2021 2,682,463 2,241,269 530,628 324,132 5,778,492 ---------- ----------- ---------- ---------- ---------- Additions - 35,507 17,873 39,027 92,407 Disposals - (8,005) (2,916) - (10,921) Utilise Oxford Dilapidations (2,679) - - - (2,679) Revaluation 834,888 - - - 834,888 At 30 June 2022 3,514,672 2,268,771 545,585 363,159 6,692,187 ---------- ----------- ---------- ---------- ---------- Depreciation and impairment At 1 July 2020 789,682 1,639,632 327,942 245,692 3,002,948 Charge for the year 23,273 97,239 46,529 20,506 187,547 Revaluation - - - - - Disposals (2,567) (472) (36,913) (1,104) (41,056) At 30 June 2021 810,388 1,736,399 337,558 265,094 3,149,439 ---------- ----------- ---------- ---------- ---------- Charge for the year 23,273 83,266 43,031 24,769 174,339 Revaluation 250,902 - - - 250,902 Disposals (1,342) (6,055) (435) - (7,832) At 30 June
2022 1,083,221 1,813,610 380,154 289,863 3,566,848 ---------- ----------- ---------- ---------- ---------- - Net book value At 30 June 2022 2,431,451 455,161 165,431 73,296 3,125,339 ========== =========== ========== ========== ========== At 30 June 2021 1,872,075 504,870 193,070 59,038 2,629,053 ========== =========== ========== ========== ========== The freehold land element of freehold land and buildings which was not depreciated was GBP503,624 (2021 - GBP503,624). The net book value of items held under finance leases was GBP81,068 (30 June 2021: GBP93,512). The depreciation charge for items held under finance leases is shown in note 4 of the financial statements. Land and buildings classified as property, plant and equipment were valued as at 30 June 2022 using the market approach carried out by external independent qualified valuers. The valuation techniques are consistent with the principles in IFRS 13 and the fair value measurement of each property has been classified as Level 2 in the fair value hierarchy. There were no changes to the valuation techniques during the period. The fair value measurement is based on the above items' highest and best use, which does not differ from their actual use. Had the revalued properties been measured on a historical cost basis, their net book value would have been 2022: GBP1,165,527 (2021: GBP1,190,549). The revaluation surplus (gross of tax) amounted to GBP1,276,463 (2021: GBP692,477). BORROWINGS 6 2022 2021 GBP GBP Loans 1,079,000 1,079,000 Finance lease liabilities 36,761 58,146 ---------- ------------ 1,115,761 1,137,146 ========== ============ Presented in the balance sheet as: Lease liabilities - current 279,798 264,168 Borrowings - current - - Borrowings - non-current 1,115,761 1,137,146 ---------- ------------ 1,395,559 1,401,314 ========== ============ (a) Bank & other borrowings Analysis of bank loan repayments: In one year or less - - In more than one year but not more than two years - - In more than two years but not more than five years - - In more than five years 1,079,000 1,079,000 1,079,000 1,079,000 ========== ============ The loan is secured by a legal charge over the Company's freehold properties at Park Street, Hungerford, Berkshire and Grove Business Park, Downsview Road, Wantage, Oxfordshire. The interest only loan facility has an interest rate of 10.55% above base rate with a minimum rate of 10.8% per annum, payable monthly on drawn down funds. In case of default, an additional 7.2% interest would be payable under the loan. 2022 2021 GBP GBP (b) Finance lease liabilities Gross nance lease liabilities - minimum lease payments: In one year or less 23,883 21,385 Between one and five years 12,878 36,761 More than five years - - 36,761 58,146 ---------- ---------------------- Future finance charges on finance lease liabilities (2,966) (8,065) Present value of finance lease liabilities 33,795 50,081 ========== ====================== Future finance charges on finance lease liabilities are analysed as follows: 2022 2021 GBP GBP In one year or less (2,601) (5,099) Between one and five years (365) (2,966) (2,966) (8,065) ========== ====================== Finance lease liabilities are effectively secured as the rights to the leased asset revert to the lessor in the event of default. PROVISIONS 7 Warranty Dilapidations Total provision provision GBP GBP At 1 July 2020 57,575 59,478 117,053 Arising during the year - - - Utilised during the year (31,000) (3,423) (34,423) At 30 June 2021 26,575 56,055 82,630 ----------- -------------- ---------- ----------- Arising during the period 5,000 - 5,000 Utilised during the period (11,575) - (11,575) At 30 June 2022 20,000 56,055 76,055 =========== ============== ========== =========== 2022 2021 GBP GBP Current 23,423 29,998 Non-Current 52,632 52,632 76,055 82,630 ============== =========== Warranty provision The Company makes provision for potential future warranty claims on kitchens & bedrooms sold. This provision is reviewed and adjusted annually based on the levels of turnover achieved and the claims recorded in the same period. Dilapidations provision The Company makes such provision for dilapidations relating to its leasehold showroom estate as it considers necessary based on the length of the remaining term for each showroom & the future plans for each showroom. Based on this, experience of exiting previous showrooms and industry averages, Management have estimated that a provision of GBP5 per square foot will give a reasonable estimate of any futures costs. On exit from a showroom, once the costs have been finalised and the showroom exited, the provision would be released. SHARE BASED PAYMENTS 8
2022 2021 GBP GBP Share based payments expense - 4,051 -------------- ---------- -------------- The charge relates entirely to equity-settled share based payment transactions. On 25 March 2019 the Company granted options over 26,215,931 ordinary shares of 0.1 pence each in the Company ("Ordinary Shares") at an exercise price of 1 pence per Ordinary Share to all employees and Directors of the Company under the Company's Unapproved and EMI Share Option Plan ("Option Plan"). Performance conditions apply to the vesting of options under the Option Plan that are linked to the Company's future profit and share price performance. In addition, the Option Plan includes a hurdle criteria which stipulates that no Ordinary Shares under the share price performance criteria will vest until the share price of an Ordinary Share reaches 3 pence. The Option Plan was approved by shareholders at the 2018 Annual General Meeting and the principal terms of the Option Plan were summarised in Appendix 1 to the 2018 Notice of AGM available on the Company's website www.john-lewis.co.uk . The Option Plan was approved by shareholders at the Company's Annual General Meeting on 11 December 2018 . The Company has calculated charges for the share option awards using Monte Carlo and Binomial models. Volatility and risk free rates have been calculated for each share option award based on expected volatility over the vesting period and current risk free rates at the time of each award. Volatility assumptions are based on historic volatility for the Company's share price over 4 years. Assumptions for future profitability have been based on management estimates. The performance conditions attached to the share options are as follows: AIM listed share price (per Ordinary Percentage of the Award Share) which vests --------------------------------------- > GBP0.03 9.375% > GBP0.04 9.375% > GBP0.05 9.375% > GBP0.06 9.375% > GBP0.07 9.375% > GBP0.08 9.375% > GBP0.09 9.375% > GBP0.10 9.375% --------------------------------------------------------------- --------------------------------------- If the AIM listed share price has reached GBP0.03 or higher -------------------------------------------------------------------------------------------------------- Profit before Tax (in any 12-month Percentage of the Award statutory accounting period) which vests --------------------------------------------------------------- --------------------------------------- > GBP200k 5.00% > GBP400k 5.00% > GBP500k 5.00% > GBP600k 5.00% > GBP700k 5.00% --------------------------------------------------------------- --------------------------------------- Assumptions used in the valuation of share option awards during the year were as follows: IFRS2 Share price fair value at date of Risk Option per share Award award / exercise Expected free Expected life in option date price (pence) volatility rate dividends years (pence) 25 March 0.125 2019 0.6 / 1.0 50% 1.02% - 10 - 0.229 Share and share option awards outstanding The share options awarded during the year under the Option Plan were as follows: Scheme Exercise B / Fwd Number Number Number C / Fwd and price 1 July granted forfeited exercised 30 June date 2021 2022 of award ------------- ------------------ ----------- -------------- ---------- Option Plan 25 March 2019 Vesting date is variable but no less then 2 years 1 pence 17,112,673 - 3,529,768 - 13,582,905 ---------------- ------------ --- ------------- ----------- -------------- ---------- ----------- RELATED PARTY TRANSACTIONS 9 Ultimate Controlling Party Shareholders with a substantial interest in the Company are outlined on over 3% of the current share capital are outlined on page 12 of the financial statements. Transactions During the year the Company entered into transactions, in the ordinary course of business, with other related parties. The transactions with Directors of the Company are disclosed in notes 5 and 24 of the financial statements. Transactions with key management personnel (comprising the Directors and key members of management) are disclosed below: Transaction with Directors On 30 December 2021 Alan Charlton purchased 2,500,000 shares on the open market. Compensation of key management personnel (including Directors) 2022 2021 GBP GBP Short term employee benefits 202,236 167,350 Share-based payments - 4,051 202,236 171,401 ========== ========== PUBLICATION OF ACCOUNTS AND ANNUAL GENERAL MEETING 10 The Annual Report and Accounts for the year ended 30 June 2022 will be sent to shareholders shortly and will be made available on the Company's website. The Annual General Meeting of the Company will take place at the offices of John Lewis of Hungerford plc, Grove Business Park, Downsview Road, Wantage, Oxfordshire OX12 9FA at 2.00pm on Wednesday 18 January 2023.
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December 13, 2022 02:00 ET (07:00 GMT)
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