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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Ssp Group Plc | LSE:SSPG | London | Ordinary Share | GB00BGBN7C04 | ORD 1 17/200P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 204.40 | 204.20 | 204.80 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Food Preparations, Nec | 3.02B | 8.1M | 0.0102 | 200.39 | 1.63B |
From Apr 2019 to Apr 2024
TIDMSSPG
RNS Number : 8127N
SSP Group PLC
22 January 2019
22 January 2019
LEI: 213800QGNIWTXFMENJ24
SSP Group plc
(the "Company")
Posting of 2018 Annual Report and Accounts and Publication of a Circular including the Notice of Annual General Meeting and details of the Special Dividend and Share Consolidation
On 21 November 2018 the Company published its preliminary results for the year ended 30 September 2018 and announced its intention to return c.GBP150 million to shareholders by way of a Special Dividend. The Company today announces that the Directors have approved the decision to recommend the Special Dividend, subject to Shareholder approval, and have posted to Shareholders a circular which includes the Notice of Annual General Meeting and further details of the proposed Special Dividend and Share Consolidation (the "Circular"), a Form of Proxy and a copy of its Annual Report and Accounts for the period ending 30 September 2018.
All definitions used in the Circular have the same meaning when used in this announcement. The summary set out in this announcement should be read in conjunction with the full text of the Circular.
Special Dividend
The amount of the Special Dividend is 32.1 pence per Existing Ordinary Share. Subject to Shareholder approval at the Annual General Meeting, the Board is proposing to pay the Special Dividend to Shareholders on the register of members of the Company at 6.00pm (London time) on 12 April 2019. The Special Dividend is expected to be paid to Shareholders on 26 April 2019.
Share Consolidation
It is proposed that the payment of the Special Dividend be accompanied by a consolidation of the Company's ordinary share capital. In line with market practice, the Share Consolidation is intended to maintain comparability, as far as possible, of the Company's share price before and after the Special Dividend, subject to normal market fluctuations. Under the proposed Share Consolidation, the Existing Ordinary Shares will be sub-divided and consolidated so that Shareholders will receive 20 New Ordinary Shares for every 21 Existing Ordinary Shares held at 6.00 p.m. on 12 April 2019. The nominal value of each New Ordinary Share will be 1 (17/200) pence. Unless a Shareholder elects otherwise, fractions of New Ordinary Shares arising from the Share Consolidation will be aggregated and sold in the market, with the proceeds being distributed to the SSP Foundation (a charitable organisation set up by SSP Group plc, with registered charity no. 1163717).
The ratio used for the Share Consolidation has been set by reference to the closing middle-market price of 689.4 pence per Existing Ordinary Share and the number of Existing Ordinary Shares in issue on 21 January 2019 (being the latest practicable date prior to the publication of the Circular).
Shareholders will own the same proportion of the Company as they did before the Share Consolidation so far as possible. Although the New Ordinary Shares will have a different nominal value, they will carry the same rights as currently attach to Existing Ordinary Shares under the Articles of Association.
The Special Dividend and Share Consolidation are conditional on Shareholder approval, which will be sought at the Annual General Meeting on 21 February 2019, and on Admission of the New Ordinary Shares to the Official List and to trading on the Main Market.
Applications will be made for (i) the Official List to be amended to reflect the New Ordinary Shares arising from the Share Consolidation, and (ii) the New Ordinary Shares to be admitted to trading on the Main Market. Trading on the London Stock Exchange for the Existing Ordinary Shares (under ISIN GB00BFWK4V16) is expected to close at 4.30 p.m. on 12 April 2019, and it is expected that Admission of the New Ordinary Shares will become effective and trading in the New Ordinary Shares (under new ISIN GB00BGBN7C04) will commence at 8.00 a.m. on 15 April 2019.
Expected Timetable
Hot Features
Premium
Latest time and date for receipt 11.00 a.m. on 19 February 2019
of Forms of Proxy and CREST
proxy instructions for the Annual
General Meeting
Annual General Meeting 11.00 a.m. on 21 February 2019
Ex-dividend date for the Final 28 February 2019
Dividend
Record date for Final Dividend 6.00 p.m. on 1 March 2019
Payment date for Final Dividend 29 March 2019
Latest time of dealings in Existing 4.30 p.m. on 12 April 2019
Ordinary Shares
Record Time for Special Dividend 6.00 p.m. on 12 April 2019
and Share Consolidation
Cancellation of Existing Ordinary 6.00 p.m. on 12 April 2019
Shares
Effective time and date of the 8.00 a.m. on 15 April 2019
Share Consolidation
Admission of New Ordinary Shares 8.00 a.m. on 15 April 2019
to the Official List and to
trading on the Main Market and
commencement of dealings in
New Ordinary Shares
CREST accounts credited with By or as soon as practicable
New Ordinary Shares after 8.00 a.m. on 15 April
2019
Dispatch (where applicable) 25 April 2019
of share certificates in respect
of New Ordinary Shares
Payment date for Special Dividend 26 April 2019
Notes
1. All time references in this announcement are to London, UK time.
2. These dates are given on the basis of the Board's current expectations and are subject to change. If any of the above times and/or dates change, the revised times and/or dates will be notified to Shareholders by announcement through a Regulatory Information Service and will be available on the Company's website at www.foodtravelexperts.com.
3. All events in the above timetable scheduled to take place after the Annual General Meeting in respect of the Final Dividend, the Special Dividend and the Share Consolidation respectively are conditional on the approval by Shareholders of the Final Dividend, the Special Dividend and the Share Consolidation respectively as proposed. All events in the timetable from Admission of the New Ordinary Shares are also conditional upon Admission occurring.
Copies of the 2018 Annual Report and Accounts, the Circular and Form of Proxy have been submitted to the National Storage Mechanism and will shortly be available for inspection at: www.Morningstar.co.uk/uk/nsm. Copies of the 2018 Annual Report and Accounts and the Circular are also available on the Company's website at www.foodtravelexperts.com.
Annual General Meeting
The Company's Annual General Meeting will be held at 11.00am on 21 February 2019 at the offices of Travers Smith LLP, 10 Snow Hill, London, EC1A 2AL.
Regulated Information
The information set out in the Appendix, which is extracted from the 2018 Annual Report and Accounts, is included for the purposes of complying with DTR 6.3.5 and its requirements on how to make public annual financial reports. The information in the Appendix should be read in conjunction with the Company's preliminary results for the year ended 30 September 2018 released on 21 November 2018 which can be viewed at www.foodtravelexperts.com. Together, these constitute the material required by DTR 6.3.5 to be communicated in unedited full text through a Regulatory Information Service.
For further information contact:
SSP Group plc
Helen Byrne
Company Secretary & General Counsel
0207 543 3300
Investor and analyst enquiries
Sarah John
Director of Investor Relations
+44 (0) 203 714 5251
E-mail: sarah.john@ssp-intl.com
Appendix
This material should also be read in conjunction with, and is not a substitute for reading, the full 2018 Annual Report and Accounts.
Note and page references in the text of this Appendix refer to note numbers and page numbers in the 2018 Annual Report and Accounts that can be viewed on the Company's website.
1. Directors' Responsibility statement
The following responsibility statement is repeated here to comply with DTR 6.3.5. This statement relates to, and is extracted from, page 60 of the 2018 Annual Report and Accounts. Responsibility is for the full 2018 Annual Report and Accounts, not the extracted information presented in this announcement and the full year results announcement.
The Directors are responsible for preparing the annual report and the Group and parent company financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare Group and parent company financial statements for each financial year. Under that law they are required to prepare the Group financial statements in accordance with International Financial Reporting Standards as adopted by the European Union (IFRSs as adopted by the EU) and applicable law, and have elected to prepare the parent company financial statements on the same basis.
Under company law, the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and parent company, and of their profit or loss for that period. In preparing each of the Group and parent company financial statements, the Directors are required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and estimates that are reasonable, relevant and reliable;
-- state whether they have been prepared in accordance with IFRSs as adopted by the EU;
-- assess the Group and parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and
-- use the going concern basis of accounting unless they either intend to liquidate the Group or the parent company, or to cease operations, or have no realistic alternative but to do so.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the parent company's transactions and disclose with reasonable accuracy at any time the financial position of the parent company, and enable them to ensure that its financial statements comply with the Companies Act 2006. They are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group, and to prevent and detect fraud and other irregularities.
Under applicable law and regulations, the Directors are also responsible for preparing a Strategic report, Directors' report, Directors' remuneration report and Corporate Governance statement that complies with that law and those regulations.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Responsibility statement of the Directors in respect of the annual financial report
We confirm that to the best of our knowledge:
-- the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole; and
-- the Strategic report/Directors' report includes a fair review of the development and performance of the business and the position of the issuer and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.
We consider the Annual Report and Accounts, taken as a whole, to be fair, balanced and understandable, and provides the information necessary for shareholders to assess the Group's position and performance, business model and strategy.
Kate Swann
Chief Executive Officer
20 November 2018
Jonathan Davies
Chief Financial Officer
20 November 2018
2. Principal Risks
The description below of the principal risks and uncertainties that the Company faces is extracted from pages 19 to 22 of the 2018 Annual Report and Accounts.
The following table summarises the principal risks and uncertainties to which the Group is exposed, and the actions taken to mitigate those risks and uncertainties. Risks are identified as principal based on the likelihood of occurrence and the potential impact on the Group and are listed in order of priority.
Strategic Priorities: 1: Optimising our offer to benefit from the positive trends in our markets; 2: Growing profitable new space; 3: Optimising gross margins and leveraging scale benefits; 4: Running an efficient and effective business; and 5: Optimising investment using best practice and shared resource.
The principal risks discussed in the table below are listed in order of priority. No new principal risks have been identified since last year.
Risk increasing Risk decreasing No risk movement
Risk/Risk Priority Risk Description Mitigating Factors
1 Business environment The Group operates The Group monitors
in the travel environment the performance
income, weather, changing of individual business
demographics and travel units and markets
patterns could all regularly. The Executive
impact both passenger Directors review
numbers and consumer detailed weekly
spending. There is and monthly information
a risk that the Group covering a range
is unable, or poorly of KPIs, and monitors
placed, to respond progress on key
to these external strategic projects
Strategic priorities events. with local senior
1,2 management. Specific
The travel environment short and medium
is vulnerable to acts term actions are
of terrorism or war, taken to address
an outbreak of pandemic any trading performance
disease, or a major issues which are
and extreme weather monitored on an
event or natural disaster on-going basis.
which could reduce
the number of passengers The Group also conducts
in travel locations. extensive research
to understand current
Increased protectionist levels of customer
trade policy and tariffs satisfaction and
in the US could result gathers feedback
in US cost inflation. on changing requirements.
Business uncertainty
in the US could have The Group has business
an impact on international continuity plans
travel and the wider in place including
economic environment. liaison with authorities
and clients in key
locations to ensure
that contingency
plans are comprehensive
and complete.
--------------------------- ------------------------------------------------------- ---------------------------
2 Retention of existing The Group's operations The Group's local
client relationships are dependent on the management structures
terms of airport and in all its major
railway station concession geographies allow
agreements. Growth it to maintain strong
is dependent on the relationships with
Group's ability to its clients and
retain existing concession to monitor performance
contracts and win in close partnership
new contracts from with its clients'
either new or existing management teams.
clients.
The Group has an
The Group's clients established contact
may turn to alternative strategy with key
operators, cease operations, clients to establish
Strategic priorities terminate contracts and/or maintain
1,2 with the Group or on-going relationships.
increase cost pressure These are discussed
on the Group. between Group and
local management
on a regular basis.
The Group conducts
regular online and
interview-based
client surveys to
ensure any concerns
are being addressed.
Furthermore, the
Group proactively
seeks to invest
in, extend and enhance
its offers in key
locations, working
in conjunction with
clients.
--------------------------- ------------------------------------------------------- ---------------------------
3 Brexit Brexit may The Group carefully
have an monitors the on-going
adverse negotiations of
impact on the UK's exit from
the wider the EU, which are
economic discussed between
environment Group and local
in the management on a
UK and regular basis.
across the
EU, The Group maintains
resulting in a global portfolio
weaker and regularly monitors
consumer the impact of foreign
spending exchange fluctuations
in the on its cash flows,
travel food mitigating the impact
and beverage from foreign exchange
markets. risk.
It would
also impact The Group's pricing
Strategic priorities the travel and range initiatives
1,3 sector are driven by continuous
directly if monitoring of consumer
any spending benchmarks.
restrictions
in the Various gross margin
freedom of initiatives, including
industrial recipe re-engineering
air travel and procurement
between the rationalisation
UK and continue to be pursued,
EU countries in order to mitigate
come the impact of cost
into force. inflation.
The The Group continues
potential to develop its UK
depreciation recruitment strategy
of the pound to
could ensure SSP is positioned
lead to cost as an attractive
inflation employer in the
pressures, UK.
particularly
in the food
commodity
markets.
Potential
restrictions
on mobility
of EU
nationals
post-Brexit
may limit
the
availability
of labour
resource
in the UK
--------------------------- ------------------------------------------------------- ---------------------------
4 Labour laws and unions Approximately half The Group works
of the Group's employees proactively with
are subject to collective all of its unions
bargaining agreements. to ensure that the
These are principally various collective
in France, Germany, bargaining agreements
Spain, Denmark, Finland, are appropriate
Norway, Sweden and for the Group and
the United States. therefore minimise
commercial risks.
The Group is also
subject to minimum The Group is continually
wage requirements reviewing the impact
and mandatory healthcare of changes in remuneration
subsidisation in some structures in developing
of the jurisdictions mitigating strategies
Strategic priorities in which it operates, across the Group.
4 notably North America, The reviews include
the United Kingdom the on-going impact
and China. of the National
Living Wage and
the Apprenticeship
Levy in the United
Kingdom, and the
impact of healthcare
legislation in the
United States.
Various labour
productivity
initiatives continue
to be pursued by
the Group, in order
to mitigate the
impact of cost inflation.
--------------------------- ------------------------------------------------------- ---------------------------
5 Implementation of The Group is continuously The Group has completed
efficiency programmes seeking new programmes a detailed evaluation,
to improve efficiency. planning and partial
There is a risk that implementation of
these programmes may its major change
not be feasible to programmes, and
implement in certain adapts and responds
jurisdictions, and to feedback on an
furthermore, they on-going basis.
could fail to deliver
the desired benefits, To aid these programmes,
e.g. labour efficiency the Group continues
and minimising waste to utilise specialist
and loss. expertise in the
business where required,
both at a Group
and at a country
level.
The Group provides
central support
through its regional
Strategic priorities CEOs and CFOs, to
3, 4, 5 facilitate appropriate
country actions
based on key performance
indicators linked
to margin management.
Group IT also provides
support for project
management and
implementation,
using agreed standard
business processes
and controls.
--------------------------- ------------------------------------------------------- ---------------------------
6 Changing client Changing client requirements, The Group has in
behaviours such as splitting place a clear 'SSP
tenders across two Value Proposition'
or more providers, that it presents
partnering with operators to the client to
in joint ventures, address this risk.
developing third party
purchasing models The Group Director
and favouring local of Strategic Partnerships
brand operators or and the Group Chief
partnering directly Commercial Officer
with brand owners, work closely with
may adversely affect country management
Strategic priorities the Group's business. teams to enhance
1,2 and clarify the
Group's proposition
to its clients.
The Group's contact
strategy with key
stakeholders and
clients helps to
mitigate this risk.
This is informed
by its annual client
survey, which is
carried out by an
independent party.
--------------------------- ------------------------------------------------------- ---------------------------
7 Regulatory compliance The laws and regulations The Group has procedures
governing the Group's and processes in
industry have become place to ensure
increasingly complex compliance with
across a number of local laws and
jurisdictions and regulations.
a wide variety of The Group may obtain
areas, including, external advice
among others, food to supplement the
safety, labour, employment, in-house legal and
immigration, security compliance team.
and safety, health
and safety, modern The Group has a
slavery, plastic waste, Code of Conduct,
competition and antitrust, and Anti-Bribery
consumer protection and Anti-Corruption
(including data protection), Policy, and training
environment, licensing has been rolled
requirements and related out internationally.
compliance. With a This is continually
UK parent company, being reviewed and
the Group is required updated to improve
to comply with the controls and monitoring.
provisions of the
UK Bribery Act and The Group's procedures
the legislation aimed under the policy
at preventing the include regular
facilitation of tax reporting by the
evasion, as well as businesses to the
the local equivalent Risk Committee.
laws in the territories Compliance is monitored
in which the Group by Internal Audit
operates. There is and the Risk Committee
a risk that the Group on an on-going basis,
fails to comply with and all alleged
such laws and regulations. breaches of the
Code of Conduct
The Group is required and policy are
to comply with data investigated.
privacy laws in many
of the jurisdictions The Group has conducted
in which it operates. a risk assessment
In the EU, the Company regarding the new
has been subject to UK legislation on
the new General Data failure to prevent
Protection Regulation the facilitation
(GDPR) since May 2018. of tax evasion,
This requires the and is updating
adoption of stricter its policies and
data management processes procedures in this
in order to address regard.
greater rights for
individuals, mandatory The Group has established
breach reporting and a GDPR working group
more rigorous compliance with representatives
Strategic priorities obligations. There from each key division
1,2 is a risk that the to ensure the Group
Group fails to comply is able to manage
with the new rules GDPR compliance
or to implement adequate risk. Local champions
processes to safeguard are in place to
personal data. This ensure local compliance,
could give rise to and the Group is
larger fines, penalties making progress
and civil action from to ensure it is
individuals. compliant with the
new rules. Furthermore,
The preparation of our supplier contracts
food and maintenance are being updated
of the Group's supply to ensure that suppliers
chain require a base are GDPR compliant.
level of hygiene,
temperature maintenance The Group has food
and traceability, safety controls
which expose the Group and procedures in
to possible food safety place that are embedded
liability claims and in the Group's operations.
issues. These are monitored
by the country management
teams on a regular
basis and appropriate
action is taken
if any issues are
identified. Training
sessions are also
held at a country
level to ensure
compliance with
these procedures.
--------------------------- ------------------------------------------------------- ---------------------------
8 Execution and There is a risk that The Group, as well
mobilisation the Group may not as regional and
of new contracts be successful in mobilising country senior management
new contracts and teams, reviews
operating them successfully. mobilisation
plans to ensure
that new openings
are delivered on
time and in line
with the specific
agreement or contract.
The Group has strengthened
the management teams,
including the business
development and
Strategic priorities property teams in
3,4,5 the high-growth
regions of Asia
Pacific, India and
the US, especially
in finance, operations
and construction.
The Group also teams
up with its joint
venture partners
in new territories
to provide local
infrastructure and
mobilisation support.
--------------------------- ------------------------------------------------------- ---------------------------
9 Expansion into new The Group's strategy The Group has strengthened
markets involves expanding the management teams
its business in developing in Asia Pacific
markets, including and India, especially
Asia Pacific, India, in finance and operations
Eastern Europe and where this risk
the Middle East. is high and the
Group is growing.
Political, economic
and legal systems In addition, the
and conditions in Group adopts a joint
these countries are venture model in
generally less predictable certain new territories
than in countries to provide access
with more developed to existing local
institutional structures, infrastructure and
subjecting the Group expertise, as well
to additional commercial, as to help mitigate
reputational, legal the risk inherent
and compliance risks. on entering new
territories.
The Group has clearly
defined authorisation
procedures for all
contract investments,
to ensure that they
are consistent with
the objectives set
by the Board and
that they fully
consider and evaluate
the risks inherent
in expansion into
Strategic priorities new locations and
1,2 territories.
The Group works
with in-house and
external advisors
to ensure the risks
of doing business
in developing markets
are identified and
where possible,
mitigated before
entering those markets.
This includes appropriate
due diligence of
potential joint
venture and other
local partners.
The Group legal
team works closely
with country legal
and operational
teams to support
business development
activities and to
ensure compliance
with local requirements.
The risk of working
in developing markets
is also monitored
by the Risk Committee
and the Audit Committee.
--------------------------- ------------------------------------------------------- ---------------------------
10 Senior management The performance of The Group continues
capability and retention the Group depends to review key roles
on its ability to and succession plans
attract, motivate at a country and
and retain key employees. at a Group level.
The skills developed Senior resources
in our business are have been strengthened
highly attractive in a number of
to other companies, strategically
which regularly target important and growing
our staff for recruitment. businesses.
The Group may not The Remuneration
Strategic priorities have sufficient management Committee monitors
4 capability at a senior the levels of remuneration
level, such as country for senior management
leadership in both and seeks to ensure
existing and new territories, that they are designed
to execute the planned to attract, retain
operational efficiency and motivate the
programmes and to key personnel required
support the growth to run the Group
and development of effectively.
the business.
The Group carries
The Group may not out an annual talent
have sufficient resources, mapping exercise
such as resources to identify candidates
in legal, finance for future roles
and IT, to meet the and continues to
changing and complex invest in additional
needs of an international resources to support
and growing business. change initiatives
and business development
programmes.
--------------------------- ------------------------------------------------------- ---------------------------
11 Competitive Competition intensifies The Group has developed
intensity as the Group's competitors high-quality
become more sophisticated, 'business-to-business'
diversified, direct marketing collateral
more resources to to clearly lay out
the preparation of the benefits of
tenders, and take working with SSP,
a more aggressive which it shares
position on commercial with the clients
terms when tendering to help them better
for contracts. This understand the Group's
could put pressure proposition, from
on the Group's profitability both a quantitative
and reduce the availability and a qualitative
Strategic priorities and attractiveness perspective.
1,2 of contracts.
The Group's strengthened
business development
team utilises the
feedback from regular
client satisfaction
surveys when developing
new tenders, to
ensure they remain
competitive to clients.
The Group has clear
internal benchmarking
and investment appraisal
processes to evaluate
tender proposals
and to ensure that
the Group is able
to make a competitive
offer, as well as
meet its investment
criteria.
The Group continues
to extend its brand
portfolio, including
via partnerships
with celebrity chefs,
to provide breadth
and depth as part
of a tender process.
--------------------------- ------------------------------------------------------- ---------------------------
12 Outsourcing programmes The Group fails to The Group continues
execute outsourcing to utilise specialist
projects effectively, resources in the
which results in a business to manage
disruption of the implementation and
business as usual transition projects,
and the introduction and it continues
of new third party to use external
risks. advisors to provide
input into the management
Strategic priorities Furthermore, any benefits of risks in such
4 expected from the projects. Performance
outsourcing programme feedback is reported
may not be realised. to the Executive
Committee on a regular
basis and the Risk
Committee periodically.
Furthermore, the
Group has included
the outsourcing
centres in its Internal
Audit review scope.
The outsourcing
partners are highly
reputable and were
selected after a
rigorous tender
process and extensive
due diligence.
--------------------------- ------------------------------------------------------- ---------------------------
13 Cyber security The Group becomes The Group continually
exposed to information reviews its business
security and cyber continuity plans
threats, e.g. threats for its supply chain,
detailed in the Payment IT disaster recovery,
Card Industry Data and information
Security Standards security policies
(PCIDSS). and practices, to
ensure that these
Strategic priorities The risk of ransomware meet the changing
4,5 attacks has increased landscape.
due to a general increase
in the prevalence The Group has also
of ransomware attacks rolled out cyber
and their increasing security training
sophistication. across the business
to reinforce data
protection
responsibilities
and cyber risks.
The Group's segmental
business model and
IT systems structure
help to ensure that
potential cyber
attacks are likely
to remain isolated
locally rather than
impact the entire
Group.
--------------------------- ------------------------------------------------------- ---------------------------
14 Maintenance/ The Group's success The Group continues
development is largely dependent to strengthen its
of brand portfolio upon its ability to dedicated brands
maintain its portfolio and marketing teams,
of proprietary brands to work closely
and the brands of with its partner
its franchisors, as brands and to enable
well as the appeal greater capacity
of those brands to to attract and manage
Strategic priorities clients and customers. a broader portfolio
1,2 of external brands.
The loss of any significant
partner brands, the The Group also carries
inability to obtain out extensive customer
rights to new brands research into passengers'
over time or the diminution needs and continually
in appeal of partner analyses market
brands or the Group's trends in order
proprietary brands, to enhance its brand
could impair the Group's and concept portfolio
ability to compete on an on-going basis.
effectively in tender
processes and ultimately Finally, the Group
have a material adverse continuously looks
effect on the Group's to strengthen the
business. depth and breadth
of its brand partners.
--------------------------- ------------------------------------------------------- ---------------------------
15 Business development The Group may not The Group prioritises
capability and investment have the capabilities its investment in
in key markets to new contracts as
maximise business part of the on-going
development opportunities, review of its global
in order to win profitable pipeline, and the
Strategic priorities business in new markets. prioritisation of
1,2 its capital investment
and resources.
The Group has also
strengthened the
management team
in Asia Pacific
and India, especially
in finance and operations.
Furthermore, the
Group works with
local joint venture
partners in new
markets to access
support and advice
on business development
activities.
--------------------------- ------------------------------------------------------- ---------------------------
16 Tax strategy The Group suffers The Group has a
reputational damage tax management policy
if customers, clients which is based on
and/or suppliers believe the Board's guidance
that the Group is to adopt a low risk
Strategic priorities engaged in aggressive tax strategy.
1,2 or abusive tax avoidance.
The Group also regularly
There is a risk that reviews its tax
the Group may not priorities and has
be tax compliant due strengthened the
to complicated local tax team at the
tax laws across different centre.
geographical territories.
--------------------------- ------------------------------------------------------- ---------------------------
3. Related Parties
The following is extracted from note 27 to the Group's consolidated financial statements (on pages 98 to 99).
Related party relationships exist with the Group's subsidiaries, associates (note 12), key management personnel, pension schemes (note 19) and employee benefit trust (note 21).
Subsidiaries
Transactions between the Company and its subsidiaries, and transactions between subsidiaries, have been eliminated on consolidation and are not disclosed in this note. Where the Group does not own 100% of its subsidiary, significant transactions with the other investors in the non-wholly owned subsidiary ('investor'), other than those listed in note 21, are disclosed within this note (in the table on page 99) Sales and Purchases with related parties are made at normal market prices.
Associates
Significant transactions with associated undertakings during the year, other than those included in note 12, are included in the table below.
Related party transactions
2018 2017
GBPm GBPm
======================================= ====== =============
Purchases from related parties1 (5.9) (5.4)
Management fee income 2.1 2.5
Other income 1.7 1.5
Other expenses2 (11.5) (6.5)
Amounts owed by related parties at the
end of the year 2.2 4.2
Amounts owed to related parties at the
end of the year (0.5) (0.8)
Operating lease commitments (20.3) -
======================================= ====== =============
(1) The majority of purchases from related parties relates to purchases from The Minor Food Group PLC (GBP5.2m; 2017: GBP4.8m) which owns 51% of Select Service Partner Co. Limited.
2 The majority of other costs relate to GBP8.9m concession fees (2017: GBP5.3m).
The Group has provided a number of guarantees to third parties and has given guarantees to partners of consolidated non-wholly owned subsidiaries in respect of obligations of its associates, relating to, for example, concession agreements, franchise agreements and financing facilities. In addition, certain subsidiaries benefit from guarantees provided by the Group's non-controlling interest partners to similar third parties (in respect of obligations of the subsidiaries). These guarantees are consistent with those provided in the normal course of business in the Group's wholly owned subsidiaries.
Remuneration of key management personnel
The remuneration of key management personnel of the Group is set out below in aggregate for each of the categories specified in IAS 24 'Related Party Disclosures'. The Group considers key management personnel to be the Chief Executive Officer, Chief Financial Officer and Non-Executive Directors.
2018 2017
GBPm GBPm
----------------------------- ----- -------------
Short-term employee benefits (5.1) (4.1)
Post-employment benefits (0.4) (0.4)
Share-based payments (2.4) (2.3)
----------------------------- ----- -------------
(7.9) (6.8)
----------------------------- ----- -------------
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
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January 22, 2019 13:24 ET (18:24 GMT)
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