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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Up Global Sourcing Holdings Plc | LSE:UPGS | London | Ordinary Share | GB00BYX7MG58 | ORDS 0.25P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 120.00 | 114.50 | 120.00 | 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
TIDMUPGS
RNS Number : 6189D
UP Global Sourcing Holdings PLC
28 April 2017
28 April 2017
UP Global Sourcing Holdings plc
"Ultimate Products" or the "Group"
INTERIM RESULTS FOR THE SIX MONTHSED 31 JANUARY 2017
A strong performance in a transformational period
Ultimate Products, the owner, manager, designer and developer of a range of value-focused consumer goods brands, announces its interim results for the six months ended 31 January 2017.
Financial Highlights
-- Total revenue increased 62.2% to GBP68.1m (H1 2016: GBP42.0m); -- Underlying(1) EBITDA increased 75.1% to GBP8.8 million (H1 2016: GBP5.0m); -- Underlying(1) profit before tax increased 77.9% to GBP8.4m (H1 2016: GBP4.7m); -- Net debt amounted to GBP10.2m, with a net debt / underlying EBITDA ratio of 0.9x; and -- Interim dividend of 1.62p per share declared (H1 2016: nil).
Operational Highlights
-- Successful IPO in March on the Main Market of the London Stock Exchange;
-- Board substantially strengthened, including the appointment as Chairman of James McCarthy, the former CEO of Poundland Group plc;
-- Refurbishment of Heron Mill in Oldham near completion: now the main warehouse facility carrying the majority of the Group's inventory.
Note:
1. Calculated after adding back the Shareholder Bonuses, a bonus scheme for certain senior executives which ceases at the end of FY 2017.
Commenting on the interim results, Simon Showman, Chief Executive said:
"This has been the most eventful and transformational period in Ultimate Products' 20 year history. Following on from the Group's successful IPO last month, we are delighted to be announcing strong revenue and profit growth for the first six months of the financial year. Our strategy of developing a portfolio of brands that are focused on mass market, value-led, consumer goods for the home has continued to deliver profitable growth.
We are pleased with the progress that we have made across our core customer base of UK and European discounters, and see significant potential for further growth both with UK supermarkets and online platforms, as well as through our own international expansion. This, combined with the proven viability of our strategy and the strength of our product range, means that we feel well placed to deliver further growth in the remainder of this year and continue to be confident in the long-term prospects of Ultimate Products."
For more information, please contact:
Hot Features
Premium
Ultimate Products +44 (0) 161 627 1400
Simon Showman, CEO
Andrew Gossage, Managing Director
Graham Screawn, Finance Director
Powerscourt +44 (0) 207 250 1446
Rob Greening
Nick Brown
Notes to Editors
Ultimate Products is an owner, manager, designer and developer of a series of well-known brands focused on the home, selling to over 300 retailers across 38 countries. It has six product categories: Audio; Heating and Cooling; Housewares; Laundry; Luggage; and Small Domestic Appliances. Its brands include Beldray (laundry, floor care, heating and cooling), intempo (audio), Salter (kitchenware), Constellation (luggage), and Progress (cookware and bakeware).
The Group's products are sold to a broad cross-section of both large national and international multi-channel retailers as well as smaller national retail chains, incorporating discount retailers, supermarkets, general retailers and online retailers. Major customers include Action, Aldi, Amazon, Argos, Asda, B&M, Matalan, Morrisons, Original Factory Shop, Robert Dyas, Sainsbury's, Tesco and The Range.
Founded in 1997, Ultimate Products is headquartered in Oldham, Greater Manchester, where it has design, sales, marketing, buying, quality assurance, support functions and warehouse facilities across two sites. Manor Mill, the Group's head office, includes a spectacular 20,000 sqft showroom that showcases each of its brands. In addition, the Group has an office and showroom in Guangzhou, China. In total, Ultimate Products now employs over 200 staff.
For further information, please visit www.upgs.com
Interim Statement
Ultimate Products' overarching strategy is to develop its portfolio of brands focused on mass market, value-led, consumer goods for the home. The Group has been able to achieve growth through:
(1) increased listings and the store expansion of UK and European discounters;
(2) increased penetration of UK supermarkets;
(3) growth in sales via online platforms; and
(4) international expansion.
The on-going focus on this strategy has delivered a strong performance in the first half of the financial year against a challenging retail backdrop, with revenue up 62.2%, underlying EBITDA(1) up 75.1%, and underlying profit before tax(1) up 77.9% against the prior year.
Trading
Revenue for the period was GBP68.1 million, an increase of GBP26.1 million or 62.2% on the same period last year (6 months to 31 January 2016 ("H1 2016"): GBP42.0 million). This was driven by three main factors:
(1) growth in sales to discounters both in the UK and in Europe (+GBP19.1 million);
(2) increased sales from the main UK supermarkets (+GBP5.0 million); and
(3) the emergence of online platforms as a new revenue channel for the business (+GBP1.3 million).
Gross margin came under pressure as imported price inflation from a weakened sterling took effect in the wake of the Brexit referendum. This led to a reduction in gross margin of 1.4% to 24.6% (H1 2016: 26.0%).
Despite this, underlying EBITDA margin(1) increased to 12.9% (H1 2016: 12.0%). This reflects:
(1) the economies of scale from higher revenue;
(2) the change in sales mix, with an increased proportion of Free on Board sales (which is less overhead intensive), offset to a partial extent by increased sales via online platforms (which is more overhead intensive); and
(3) a more efficient operating model as the focus on the Group's brand portfolio has led to more repeat sales and extended product life cycles. This is evidenced by a fall in fixed overheads as a percentage of revenue to 9.1% for the period (H1 2016: 11.5%).
As a result of increased revenue and higher operating margins, EBITDA for the period increased 69.5% to GBP7.1 million (H1 2016: GBP4.2 million). Underlying EBITDA was GBP8.8 million, an increase of GBP3.8 million or 75.1% on prior year (H1 2016: GBP5.0 million).
Profit before tax ("PBT") for the period was GBP6.7 million, an increase of GBP2.8 million or 72.5% on last year (H1 2016: GBP3.9 million). Underlying PBT increased 77.9% to GBP8.4 million (H1 2016: GBP4.7 million).
Balance Sheet
Shareholders' equity was GBP6.2 million at 31 January 2017, up from GBP6.1 million at 31 January 2016. This movement was the net result of an increase in retained earnings of GBP4.7 million - less repayment of GBP4.9 million of management loan notes included within equity as the capital reserve - plus an increase in the hedging reserve of GBP0.3 million.
Net working capital at 31 January 2017 was GBP15.9 million, up from GBP11.3 million at 31 January 2016 - an increase of GBP4.6 million or 41%. This was entirely driven by the increase in revenue in the period.
Net cash from operations for the period was GBP3.0 million, an increase of GBP0.1 million or 3.4% (H1 2016: GBP2.9 million) as a result of the higher EBITDA, partially offset by the increase in additional net working capital.
Net debt at 31 January 2017 was GBP10.2 million up from GBP3.1 million at 31 January 2016, an increase of GBP7.1 million. The main drivers of this were:
(1) higher net working capital (see above);
(2) repayment of GBP4.9 million of management loan notes (classified as equity);
(3) repayment of accrued interest on management loan notes of GBP2.0 million, offset by;
(4) an increase in retained profits.
The net debt / underlying EBITDA ratio at 31 January 2017 was 0.9x (31 January 2016: 0.4x) based on underlying EBITDA for the 12 months to 31 January 2017. The Group had headroom within its bank facilities of GBP9.7 million as at 31 January 2017.
Warehouse Refurbishment
In April 2016, the Group entered into a seven year lease for a warehouse at Heron Mill in Oldham, and since then has embarked on a refurbishment programme of the facility. This is now largely complete, and Heron Mill is now the main warehouse facility carrying the majority of the Group's inventory.
The full transition from Manor Mill, the Group's previous main warehouse facility, will take until July 2017 to complete but is progressing to plan. Once completed, Manor Mill will continue to be used as the Group Headquarters, customer showroom and warehouse facility for certain categories of stock.
The rent for Heron Mill is GBP285,000 per annum (subject to an initial 12 month rent-free period), which equates to GBP1.19 per square foot per year. Total refurbishment expenditure to 31 January 2017 was GBP0.7 million, with a further GBP0.4 million expected before the end of FY17.
Initial Public Offering
On 6 March 2017, UP Global Sourcing Holdings plc was admitted to the premium segment of the Official List of the Financial Conduct Authority and to trading on the Main Market of the London Stock Exchange plc.
Board Appointments
The Group's Board has been substantially strengthened through the appointments of James McCarthy as Chairman, Alan Rigby as Senior Independent Non-Executive Director, and Robbie Bell as Non-Executive Director.
James McCarthy has over 40 years' experience in the fast-moving retail industry, having previously held the position of Chief Executive Officer of Poundland Group plc. He stepped down in July 2016 after a decade long tenure during which the company's sales grew from GBP300 million to GBP1.3 billion per annum, while the number of stores increased from 150 to over 900. Prior to joining Poundland, James was Managing Director of Convenience at J Sainsbury plc and was a member of the company's operating, retail and investment boards.
Alan Rigby has spent the majority of his working career at HSBC plc, joining in 1975 and gaining broad experience through a range of management positions including credit and risk, retail, commercial, large corporate and global banking markets.
Robbie Bell has been the Chief Financial Officer of Screwfix Direct Limited, a subsidiary of Kingfisher Plc, since 2009. He was previously the UK Finance Director of Travelodge between 2006 and 2008, having started his career at Whitbread plc before moving to Tesco plc.
Dividend
The Board has declared an interim dividend of 1.62 pence per share, payable on 28 July 2017 to shareholders on the register on 7 July 2017.
Current Trading and Outlook
Performance since the period end and development of the order book for the balance of the financial year has been in line with the Group's expectations. The Board therefore believes that Ultimate Products remains well positioned to deliver on expectations for FY17.
The proven viability of Ultimate Products' strategy, as well as its strong portfolio of mass market brands and innovative, value for money product ranges, means that the Group feels well placed to deliver further growth in the remainder of this year and continues to be confident in its long-term prospects.
James McCarthy Simon Showman Chairman Chief Executive
(1) Underlying EBITDA, underlying EBITDA margin and underlying profit before tax exclude shareholder bonuses as referred to in notes 9 and 10 below.
Consolidated Condensed Income Statement
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
31 January 2017 31 January 31 July 2016
GBP'000 2016 GBP'000
Note GBP'000
----------------------------------------- ------- ------------------ ----------------- ---------------
Revenue 7 68,086 41,987 79,028
Cost of sale (51,343) (31,075) (58,364)
----------------------------------------- ------- ------------------ ----------------- ---------------
Gross profit 16,743 10,912 20,664
Distribution costs (1,038) (617) (1,194)
Administration expense (8,741) (6,232) (12,784)
Other income 12 7 14
----------------------------------------- ------- ------------------ ----------------- ---------------
Profit from operations 9 6,976 4,070 6,700
Finance income 21 - -
Finance costs (293) (184) (441)
----------------------------------------- ------- ------------------ ----------------- ---------------
Profit before taxation 10 6,704 3,886 6,259
Income tax 11 (1,398) (820) (1,361)
----------------------------------------- ------- ------------------ ----------------- ---------------
Profit for the period 5,306 3,066 4,898
========================================= ======= ================== ================= ===============
Pence Pence Pence
----------------------------------------- ------- ------------------ ----------------- ---------------
Earnings per share - basic 12 2,812 1,662 2,652
Earnings per share - adjusted 12 7.0 4.2 6.6
========================================= ======= ================== ================= ===============
Ex-div date: 6(th) July 2017
Record date: 7(th) July 2017
Consolidated Condensed Statement of Comprehensive Income
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
31 Jan 2017 31 Jan 2016 31 July 2016
GBP'000 GBP'000 GBP'000
---------------------------------------------------------- ----------------- ----------------- ---------------
Profit for the period 5,306 3,066 4,898
Other comprehensive (expense)/income
Items that may be reclassified subsequently to profit or
loss:
Fair value movements on cash flow hedging instruments (133) - 441
Foreign currency retranslation 8 9 19
----------------------------------------------------------- ----------------- ----------------- ---------------
Other comprehensive (expense)/income for the period (125) 9 460
----------------------------------------------------------- ----------------- ----------------- ---------------
Total comprehensive income for period attributable to the
equity holders of the company 5,181 3,075 5,358
=========================================================== =================
Consolidated Condensed Statement of Financial Position
Unaudited Unaudited Audited
As at As at As at
31 January 2017 31 January 2016 31 July 2016
GBP'000 GBP'000 GBP'000
Note
---------------------------------------------- ------- ------------------ ------------------ ---------------
Assets
Property, plant and equipment 14 1,382 680 970
Deferred tax 164 234 209
---------------------------------------------- ------- ------------------ ------------------ ---------------
Total non-current assets 1,546 914 1,179
Inventories 11,835 8,719 10,545
Trade and other receivables 15 20,576 12,714 16,231
Cash and cash equivalents 119 788 136
---------------------------------------------- ------- ------------------ ------------------ ---------------
Total current assets 32,530 22,221 26,912
---------------------------------------------- ------- ------------------ ------------------ ---------------
Total assets 34,076 23,135 28,091
---------------------------------------------- ------- ------------------ ------------------ ---------------
Liabilities
Trade and other payables 16 (16,295) (12,316) (16,403)
Current tax (1,248) (893) (478)
Borrowings 17 (6,194) (2,856) (7,132)
---------------------------------------------- ------- ------------------ ------------------ ---------------
Total current liabilities (23,737) (16,065) (24,013)
---------------------------------------------- ------- ------------------ ------------------ ---------------
Net current assets 8,793 6,156 2,899
Borrowings 17 (4,163) (1,000) (2,884)
---------------------------------------------- ------- ------------------ ------------------ ---------------
Total non-current liabilities (4,163) (1,000) (2,884)
---------------------------------------------- ------- ------------------ ------------------ ---------------
Total liabilities (27,900) (17,065) (26,897)
---------------------------------------------- ------- ------------------ ------------------ ---------------
Net assets 6,176 6,070 1,194
============================================== ======= ================== ================== ===============
Equity
Share capital 184 184 184
Share premium 2 2 2
Capital reserve - 4,909 -
Hedging reserve 308 - 441
Retained earnings 5,682 975 567
---------------------------------------------- ------- ------------------ ------------------ ---------------
Equity attributable to owners of the company 6,176 6,070 1,194
============================================== ======= ================== ================== ===============
Consolidated Condensed Statement of Changes in Equity
Share Capital Share Premium Capital reserve Hedging reserve Retained earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Equity
GBP'000
------------------- -------------- -------------- ---------------- ---------------- ------------------ ---------
As at 1 August
2016 184 2 - 441 567 1,194
Profit for the
period - - - - 5,306 5,306
Foreign currency
translation - - - - 8 8
Cash flow hedging
movement - - - (133) - (133)
------------------- -------------- -------------- ---------------- ---------------- ------------------ ---------
Total
comprehensive
income for the
year - - - (133) 5,314 5,181
------------------- -------------- -------------- ---------------- ---------------- ------------------ ---------
Transactions with
shareholders:
Dividends payable - - - - (199) (199)
As at 31 January
2017 184 2 - 308 5,682 6,176
=================== ============== ============== ================ ================ ================== =========
Share Capital Share Premium Capital reserve Hedging reserve Retained earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Equity
GBP'000
------------------- -------------- -------------- ---------------- ---------------- ------------------ ---------
As at 1 August
2015 185 12,322 4,909 - (14,422) 2,994
Profit for the
period - - - - 3,066 3,066
Foreign currency
translation - - - - 9 9
Total
comprehensive
income for the
year - - - - 3,075 3,075
------------------- -------------- -------------- ---------------- ---------------- ------------------ ---------
Transactions with
shareholders:
Capital reduction (1) (12,320) - - 12,322 1
Repayment of loan - - - - - -
notes
As at 31 January
2016 184 2 4,909 - 975 6,070
=================== ============== ============== ================ ================ ================== =========
Share Capital Share Premium Capital Hedging Retained Total
GBP'000 GBP'000 reserve reserve earnings Equity
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------ ------------------------- -------------- ------------- ------------- ------------- ---------
As at 1 August 2015 185 12,322 4,909 - (14,422) 2,994
Profit for the year - - - - 4,898 4,898
Foreign currency translation - - - - 19 19
Cash flow hedging movement - - - 441 - 441
Total comprehensive income
for the year - - - 441 4,917 5,358
------------------------------ ------------------------- -------------- ------------- ------------- ------------- ---------
Transactions with
shareholders:
Dividends payable - - - - (2,250) (2,250)
Capital reduction (1) (12,320) - - 12,322 1
Repayment of loan notes - - (4,909) - - (4,909)
As at 31 July 2016 184 2 - 441 567 1,194
============================== ========================= ============== ============= ============= ============= =========
Consolidated Condensed Cash Flow Statement
Unaudited Unaudited Audited
6 months 6 months Year ended
ended ended 31 July 2016
31 January 31 January GBP'000
2017 2016
GBP'000 GBP'000
--------------------------------------------------------- -------------- ------------- ------------- --------------------------
Net cash flow from operating activities
Profit for the period
Adjustments for: 5,306 3,066 4,898
Finance income (21) - -
Finance costs 293 184 441
Loss on disposal of non-current assets 2 - -
Income tax expense 1,398 820 1,361
Depreciation and impairment 143 131 280
Income taxes paid (582) (397) (1,309)
Working capital adjustments
(Increase) in inventories (1,290) (989) (2,815)
(Increase) in trade and other receivables (4,497) (1,678) (4,740)
Decrease in trade and other payables 2,224 1,741 5,545
--------------------------------------------------------- -------------- ------------- ------------- --------------------------
Net cash from operations 2,976 2,878 3,661
--------------------------------------------------------- -------------- ------------- ------------- --------------------------
Cash flows used in investing activities
Purchase of property, plant and equipment (557) (212) (652)
Net cash used in investing activities (557) (212) (652)
--------------------------------------------------------- -------------- ------------- ------------- --------------------------
Cash flows (used in)/from financing activities
Purchase of own shares - (12) (18)
Proceeds from borrowings 2,137 1,225 8,891
Repayment of borrowings (1,821) (1,857) (3,294)
Repayment of loan notes - (1,150) (6,059)
Debt issue costs paid - - (142)
Dividends paid (2,449) - -
Interest paid (309) (146) (2,316)
Net cash (used in) finance activities (2,442) (1,940) (2,938)
--------------------------------------------------------- -------------- ------------- ------------- --------------------------
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents brought forward (23) 726 71
Exchange gains on cash and cash equivalents 136 58 58
6 4 7
--------------------------------------------------------- --------------
Cash and cash equivalents carried forward 119 788 136
========================================================= ============== ============= ============= ==========================
Notes to the Interim Results
1. General information
UP Global Sourcing Holdings plc ('the Company') and its subsidiaries (together 'the Group')
is a supplier of branded, value for money household products to global markets.
The Company is a public limited company, which is listed on the London Stock Exchange and
incorporated and domiciled in the UK. The address of its registered office is UP Global Sourcing
Holdings plc, Manor Mill, Victoria Street, Chadderton, Oldham, OL9 0DD.
This consolidated condensed interim financial information does not comprise statutory accounts
within the meaning of section 434 of the Companies Act 2006. On 6 March 2017, the Company
was admitted to the premium segment of the Official List of the Financial Conduct Authority
and to trading on the main market of the London Stock Exchange. The Prospectus for the Initial
Public Offering contains the audited Historical Financial Information of the Company on pages
84 to 124 (the "Historical Financial Information") presented under International Financial
Reporting Standards ("IFRS"). The comparative figures for the financial year ended 31 July
2016 are an extract of the Company's Historical Financial Information for that year. Statutory
accounts for the year ended 31 July 2016, prepared under Financial Reporting Standard 102,
were approved by the board of directors on 31 October 2016 and delivered to the Registrar
of Companies. The report of the auditor on those accounts was unqualified, did not contain
an emphasis of matter paragraph and did not contain any statement under section 498 (2) or
(3) of the Companies Act 2006. Note 31 of the Historical Financial Information refers to the
transition to IFRS from 1 August 2013 and sets out the main items contributing to the change
in financial information compared with that reported under UK GAAP as at the transition date.
2. Basis of preparation
This consolidated condensed interim financial information for the six months ended 31 January
2017 has been prepared in accordance with the Disclosure and Transparency Rules of the Financial
Conduct Authority (previously the Financial Services Authority) and with IAS 34, 'Interim
Financial Reporting' as adopted by the European Union. The consolidated condensed interim
financial information should be read in conjunction with the Historical Financial Information
for the year ended 31 July 2016, which has been prepared in accordance with IFRSs as adopted
by the European Union.
Going concern basis
The Group meets its day-to-day working capital requirements through its bank facilities. After
making enquiries, the directors have a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable future. The Group's forecasts
and projections, taking account of reasonable sensitivities, show that the Group should be
able to operate within available facilities. The Group therefore continues to adopt the going
concern basis in preparing its consolidated condensed interim financial statements.
3. Accounting policies
The accounting policies applied are consistent with those of the Historical Financial Information
for the year ended 31 July 2016.
4. Operating segments
Operating segments are reported in a manner consistent with the internal reporting provided
to the chief operating decision-maker. The chief operating decision-maker is responsible for
allocating resources and assessing performance of operating segments.
The directors consider that there are no identifiable business segments that are subject to
risks and returns different to the core business. The information reported to the directors,
for the purposes of resource allocation and assessment of performance is based wholly on the
overall activities of the Group. The Group has therefore determined that it has only one reportable
segment under IFRS 8.
The results and assets for this segment can be determined by reference to the statement of
comprehensive income and statement of financial position.
5. Principal risks and uncertainties
The directors consider that the principal risks and uncertainties which could have a material
impact on the Group's performance in the remaining 6 months of the financial year remain substantially
the same as those stated within the Group's Historical Financial Information on pages 96-97
and pages 111-113 of the Prospectus for the Initial Public Offering, which is available on
our website, www.upgs.com.
We do note that the result of the referendum in favour of the UK leaving the European Union
and the triggering of Article 50 may have an impact on the Group. We are closely following
developments in this area, but we believe that it is still too early to quantify or determine
with certainty the impact on the Group of the UK leaving the European Union. We will continue
to monitor developments and adapt our strategy as the impact of the UK exit from the European
Union becomes clear. The Group has an exposure to US Dollars for the purchase of goods and
this is partially hedged by virtue of invoicing a proportion of its turnover in US Dollars.
In addition, the Group invoices a proportion of its turnover in Euros and Canadian Dollars
and where necessary, the group uses forward currency contracts to further mitigate its foreign
currency exposure.
6. Financial instruments
The Group's activities expose it to a variety of financial risks: market risk (including foreign
exchange risk, cash flow and fair value interest rate risk and price risk), credit risk and
liquidity risk.
The condensed interim financial statements should be read in conjunction with the Group's
Historical Financial Information as they do not include all financial risk management information
and disclosures contained within the Historical Financial Information. There have been no
changes in the risk management policies since the year end.
7. Revenue
Geographical split by location: Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
31 Jan 2017 31 Jan 2016 31 July 2016
GBP'000 GBP'000 GBP'000
-------------------- ---------------- ---------------- --------------
United Kingdom 50,073 32,492 58,504
Europe 16,163 7,437 17,259
USA 422 279 628
Rest of the world 1,428 1,779 2,637
Total 68,086 41,987 79,028
==================== ================ ================ ==============
8. Seasonality of operations
Overall the Group's product range is not significantly seasonal, however, retail demand is
higher in the Christmas trading period. As a result, it is anticipated that the operating
profits for the second half of the year ending 31 July 2017 will be lower than those for the
six months ended 31 January 2017.
9. Operating profit
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
31 Jan 31 Jan 31 July
2017 2016 2016
GBP'000 GBP'000 GBP'000
---------------------------------------------------------- ---------- ---------- --------
The profit is stated after charging expenses as follows:
Depreciation of owned property, plant and equipment 143 131 280
Loss on disposal of property, plant and equipment 2 - -
Shareholder bonuses 1,693 833 1,246
========================================================== ========== ========== ========
EBITDA represents profit from operations before depreciation and amortisation. Underlying
EBITDA represents EBITDA, as defined above, adjusted for shareholder bonuses which will cease
to accrue on conclusion of the current year ending 31 July 2017. The directors use EBITDA
and underlying EBITDA as key performance indicators of the Group's business. Shareholder bonuses
consist of bonus payments based on achievement of certain Group EBITDA performance targets.
The following table sets forth a reconciliation of EBITDA and Underlying EBITDA to profits
from operations for the periods indicated.
Unaudited Unaudited Audited
6 months 6 months Year ended
ended ended 31 July
31 Jan 31 Jan 2016
2017 2016 GBP'000
GBP'000 GBP'000
--------------------------------------------------- ---------- ---------- -----------
Profit from operations 6,976 4,070 6,700
Depreciation 143 131 280
Loss on disposal of property plant and equipment 2 - -
--------------------------------------------------- ---------- ---------- -----------
EBITDA 7,121 4,201 6,980
Shareholder bonuses 1,693 833 1,246
--------------------------------------------------- ---------- ---------- -----------
Underlying EBITDA 8,814 5,034 8,226
=================================================== ========== ========== ===========
Underlying EBITDA margin 12.9% 12.0% 10.4%
=================================================== ========== ========== ===========
10. Profit before taxation
As referred to above in note 9, shareholder bonuses will cease to accrue on conclusion of
the current year ending 31 July 2017. The directors also monitor the Group's performance with
respect to profit before taxation and underlying profit before taxation.
The following table sets forth a reconciliation of profit before taxation and underlying profit
before taxation for the periods indicated. Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
31 Jan 2017 31 Jan 2016 31 July 2016
GBP'000 GBP'000 GBP'000
----------------------------------- ---------------- ---------------- --------------
Profit before taxation 6,704 3,886 6,259
Shareholder bonuses 1,693 833 1,246
Underlying profit before taxation 8,397 4,719 7,505
=================================== ================ ================ ==============
11. Taxation
The interim period tax charge is accrued based on the estimated average annual effective income
tax rate of 20.9% (six months ended 31 January 2016: 21.1%; year ended 31 July 2016: 21.7%).
The Chancellor announced in his Budget on 16 March 2016 that the main rate of corporation
tax will be reduced to 19% from 1 April 2017 and 17% from 1 April 2020 and the future current
tax charges will reduce accordingly.
12. Earnings per share
Basic earnings per share is calculated by dividing the net income for the period attributable
to ordinary equity holders by the weighted average number of ordinary shares outstanding during
the period.
The calculations of earnings per share and adjusted earnings per share are based on the following
with the adjusted weighted average number of shares and profit per share reflecting the subdivision
described in note 19:
Unaudited Unaudited Audited
6 months 6 months Year ended
ended ended 31 July
31 Jan 2017 31 Jan 2016 2016
GBP'000 GBP'000 GBP'000
------------------------------------------------ ------------ ------------ ------------
Profit for the period 5,306 3,066 4,898
Number Number Number
Weighted average number of shares - basic 184,267 185,044 184,658
Weighted average number of shares - adjusted 73,706,800 74,017,670 73,863,084
pence pence pence
Profit per share - basic and diluted 2,812 1,662 2,652
Profit per share - adjusted 7.0 4.2 6.6
================================================ ============ ============ ============
13. Dividends
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
31 Jan 2017 31 Jan 2016 31 July 2016
GBP'000 GBP'000 GBP'000
------------------------------------ ---------------- ---------------- --------------
Interim declared - - 2,250
Final dividend paid 199 - -
------------------------------------ ---------------- ---------------- --------------
199 - 2,250
==================================== ================ ================ ==============
Per share - (unadjusted) pence pence pence
------------------------------------ ---------------- ---------------- --------------
Interim dividend declared - - 1,221.1
Final dividend paid 108.0 - -
------------------------------------ ---------------- ---------------- --------------
108.0 - 1,221.1
==================================== ================ ================ ==============
Per share (adjusted to reflect the pence pence pence
subdivision described in note 19)
------------------------------------ ---------------- ---------------- --------------
Interim dividend declared - - 3.05
Final dividend paid 0.27 - -
------------------------------------ ---------------- ---------------- --------------
0.27 - 3.05
==================================== ================ ================ ==============
The interim dividend declared in the year ended 31 July 2016 was paid in the 6 months ended
31 January 2017.
An interim dividend of 1.62p per share was approved by the board on 27(th) April 2017 and
will be paid on 28(th) July 2017 to shareholders on record as at 7(th) July 2017.
14. Property, plant and equipment
Unaudited Unaudited Audited
as at as at as at
31 January 2017 31 January 2016 31 July 2016
GBP'000 GBP'000 GBP'000
------------------------ ----------------- ----------------- --------------
Opening net book value 970 598 598
Additions 557 212 652
Disposals (2) - -
Depreciation (143) (130) (280)
------------------------ ----------------- ----------------- --------------
Closing net book value 1,382 680 970
======================== ================= ================= ==============
Additions to property, plant and equipment in the 6 months to 31 January 2017 substantially
relate to the refurbishment of Heron Mill, the Group's new warehousing facility.
15. Trade and other receivables
Unaudited Unaudited Audited
as at as at as at
31 January 2017 31 January 2016 31 July 2016
GBP'000 GBP'000 GBP'000
------------------------------------ ---------------- ---------------- --------------
Trade receivables 18,994 11,828 14,686
Other receivables and prepayments 1,582 886 1,545
20,576 12,714 16,231
==================================== ================ ================ ==============
The directors believe that the carrying value of trade and other receivables represent their
fair value. Trade and other receivables are denominated in Sterling, US Dollars, Euros and
Canadian Dollars. In determining the recoverability of trade receivables, the Group considers
any change in the credit quality of the receivable from the date credit was granted up to
the reporting date.
16. Trade and other payables
Unaudited Unaudited Audited
as at as at as at
31 January 2017 31 January 2016 31 July 2016
GBP'000 GBP'000 GBP'000
----------------------------------- ---------------- ----------------- --------------
Trade payables 8,273 3,909 7,420
Accruals and deferred income 7,533 7,790 5,670
Employee tax and social security 489 611 1,063
Other payables - 6 2,250
16,295 12,316 16,403
=================================== ================ ================= ==============
Trade payables principally consist of amounts outstanding for trade payables and ongoing costs.
They are non-interest bearing and are normally settled on 30 to 60 days terms.
The directors consider that the carrying value of trade and other payables approximates their
fair value. Trade and other payables are denominated in both Sterling and US Dollars. UP Global
Sourcing Holdings plc has financial risk management policies in place to ensure that all payables
are paid within the credit timeframe and no interest has been charged by any suppliers as
a result of late payment of invoices during the period.
17. Borrowings
Unaudited Unaudited Audited
as at as at as at
31 January 31 January 31 July 2016
2017 2016 GBP'000
GBP'000 GBP'000
Current
---------------------------------------- -------------- -------------- --------------
Bank overdraft and invoice discounting 4,067 - 3,198
Import loans 2,155 2,154 3,976
Bank term loan - 750 -
---------------------------------------- -------------- -------------- --------------
6,222 2,904 7,174
Less: Unamortised debt issue cost (28) (48) (42)
---------------------------------------- -------------- -------------- --------------
6,194 2,856 7,132
======================================== ============== ============== ==============
Non-current
Bank term loan - 1,000 -
Revolving credit facility 4,227 - 2,959
---------------------------------------- -------------- -------------- --------------
4,227 1,000 2,959
Less: Unamortised debt issue cost (64) - (75)
---------------------------------------- -------------- -------------- --------------
4,163 1,000 2,884
======================================== ============== ============== ==============
Total borrowings 10,357 3,856 10,016
======================================== ============== ============== ==============
The earliest that lenders of the above
borrowings require repayment is
as follows:
In less than one year 6,222 2,904 7,174
Between two and five years 4,227 1,000 2,959
Less: Unamortised debt issue cost (92) (48) (117)
---------------------------------------- -------------- -------------- --------------
10,357 3,856 10,016
======================================== ============== ============== ==============
The Group is funded by external bank facilities provided by HSBC. On 22 July 2016, the Group
refinanced and entered into a new banking facility with HSBC. The new facilities run to July
2020 providing the on-going funding of the Group and comprise a revolving credit facility
of GBP6.2m, an import loan facility of GBP4.75m and an invoice discounting facility, the limit
of which was increased by GBP2m on 27 January 2017 to GBP17m.
18. Financial instruments
a) Principal financial Instruments
The principal financial instruments used by the Group, from which financial instrument risk
arises are as follows:
Unaudited Unaudited Audited
as at as at as at
31 January 2017 31 January 2016 31 July 2016
GBP'000 GBP'000 GBP'000
----------------------------- ----------------- ----------------- --------------
Trade and other receivables 19,349 11,887 15,159
Trade and other payables 15,806 11,705 15,340
Borrowings 10,357 3,856 10,016
Cash and cash equivalents 119 788 136
============================= ================= ================= ==============
b) Financial assets
The Group held the following financial assets at amortised cost:
Unaudited Unaudited Audited
as at as at as at
31 January 2017 31 January 2016 31 July 2016
GBP'000 GBP'000 GBP'000
--------------------------- ----------------- ----------------- --------------
Cash and cash equivalents 119 788 136
Trade receivables 18,994 11,828 14,686
19,113 12,616 14,822
=========================== ================= ================= ==============
c) Financial liabilities
The Group held the following financial liabilities, classified as other financial liabilities
at amortised cost:
Unaudited Unaudited Audited
as at as at as at
31 January 2017 31 January 2016 31 July 2016
GBP'000 GBP'000 GBP'000
----------------- ----------------- ----------------- --------------
Trade payables 8,273 3,909 7,420
Loans 10,357 3,856 10,016
Other payables 7,533 7,796 7,870
26,163 15,561 25,306
================= ================= ================= ==============
d) Financial assets /(liabilities)
The Group held the following financial liabilities, classified as fair value through profit
and loss:
Unaudited Unaudited Audited
as at as at as at
31 January 2017 31 January 2016 31 July 2016
GBP'000 GBP'000 GBP'000
---------------------------- ----------------- ----------------- --------------
Forward currency contracts 309 57 417
Interest rate caps 40 2 19
Interest rate swaps 6 - (13)
355 59 423
============================ ================= ================= ==============
The following is a reconciliation of the financial instruments to the statement of financial
position:
Unaudited Unaudited Audited
as at as at as at
31 31 31 July
January January 2016
2017 2016 GBP'000
GBP'000 GBP'000
---------------------------------------------------------------------------- ---------- ---------- --------
Trade receivables 18,994 11,828 14,686
Forward currency contracts 309 57 454
Interest rate caps 40 2 19
Interest rate swaps 6 - -
Prepayments and other receivables not classified as financial instruments
1,227 827 1,072
Trade and other receivables (note 15) 20,576 12,714 16,231
============================================================================ ========== ========== ========
Unaudited Unaudited Audited
as at as at as at
31 January 31 January 31 July
2017 2016 2016
GBP'000 GBP'000 GBP'000
------------------------------------------------- ----------- ----------- -----------
Trade and other payables held at amortised cost 15,806 11,705 15,290
Forward currency contracts - - 37
Interest rate swaps - - 13
Employee tax and social security 489 611 1,063
Trade and other payables (note 16) 16,295 12,316 16,403
================================================= =========== =========== ===========
Derivative financial instruments - Forward currency contracts
The Group mitigates the exchange rate risk for certain foreign currency trade debtors and
creditors by entering into forward currency contracts. At 31 January 2017, the outstanding
contracts all mature within 7 months of the period end (31 January 2016: 7 months; 31 July
2016: 10 months). At 31 January 2017, the Group was committed to buy US$4,000,000, to sell
EUR1,700,000 and to sell CA$225,000, paying and receiving respectively a fixed sterling amount
(31 January 2016: to buy $6,100,000, to sell EUR2,250,000 and to sell CA$80,000; 31 July 2016:
to buy US$10,000,000, to sell EUR850,000 and to sell CA$85,000). The forward currency contracts
are measured at fair value using the relevant exchange rates for GBP:USD, GBP:EUR and GBP:CA$.
The fair value of the contracts at 31 January 2017 is an asset of GBP309,000 (31 January 2016:
GBP57,000 asset; 31 July 2016: GBP417,000 asset).
Forward currency contracts are valued using level 2 inputs. The valuations are calculated
using the period end exchange rates for the relevant currencies which are observable quoted
values at the period end dates. Valuations are determined using the hypothetical derivative
method which values the contracts based on the changes in the future cash flows based on the
change in value of the underlying derivative.
Derivative financial instruments - Interest rate swaps
The Group has entered into an interest rate swap to hedge the exposure to interest rate movements
on the Group's revolving credit facility. The swap is based on a principal amount of GBP2,000,000
until 31 July 2018 and exchanges the exposure to a LIBOR interest rate to a fixed rate of
0.39%. The fair value of the swap at 31 January 2017 is GBPnil, (31 January 2016: GBPnil,
31 July 2016: GBP7,000 liability).
In addition, the Group has entered into an interest rate swap to hedge the Group's exposure
to interest rate movements on the Group's invoice discounting facility. The swap is based
on a principal amount of GBP1,000,000 until 31 December 2019 and exchanges the exposure to
Base Rate interest charges to a fixed rate of 0.31%. The fair value of the swap at 31 January
2017 is an asset of GBP6,000 (31 January 2016: GBPnil, 31 July 2016: GBP6,000 liability).
Interest rate swaps are valued using level 2 inputs. The valuations are based on the notional
value of the swaps, the current available market borrowing rate and the swapped interest rate.
The valuation is based on the current valuation of the present saving or cost of the future
cash flow differences based on the difference between the swapped interest rate and the expected
interest rate as per the lending agreement.
Derivative financial instruments - Interest rate caps
Along with the interest rate swaps referred to above, the Group has entered into interest
rate cap agreements to protect the exposure to interest rate movements on the Group's banking
facilities. The interest rate caps are measured at fair value, being the market value of the
cap at the balance sheet date. At 31 January 2017, the Group had entered into an agreement
to cap LIBOR interest rates at 1% until 31 December 2019 on a principal amount of GBP2,000,000.
The fair value of the interest rate cap at 31 January 2017 was an asset of GBP10,000 (31 January
2016: GBPnil, 31 July 2016: GBP6,000 asset).
In addition, at 31 January 2017, the Group has entered into further agreements to cap LIBOR
interest rates at 1% until 31 December 2019 on a principal amount of GBP2,000,000 and to cap
LIBOR interest rates at 2% on a principal amount of GBP5,065,000, reducing to GBP4,045,000
by 31 December 2019. The fair value of the interest rate caps at 31 January 2017 was an asset
of GBP30,000, (31 January 2016: GBP2,000 asset, 31 July 2016: GBP13,000 asset).
Interest rate caps are valued using level 2 inputs. The valuations are based on the notional
value of the caps, the current available market borrowing rate and the capped interest rate.
The valuation is based on the current valuation of the present saving or cost of the future
cash flow differences based on the difference between the capped interest rate and the expected
interest rate as per the lending agreement.
19. Events occurring after the reporting period
Initial Public Offering
On 6 March 2017, UP Global Sourcing Holdings plc was admitted to the premium segment of the
Official List of the Financial Conduct Authority and to trading on the Main Market of the
London Stock Exchange plc. Of the 82,169,600 Ordinary shares in issue immediately prior to
the above, 41,084,800 shares were issued to the new shareholders.
In advance of and in connection with the admission noted above, on 28 February 2017:-
a) 21,157 options in the UP Global Sourcing Holdings EMI Share Option Plan were exercised
and the Company allotted 21,157 B Ordinary shares of GBP1 each;
b) The Company converted its 184,267 A Ordinary shares of GBP1 each and its 21,157 B Ordinary
shares of GBP1 each to 205,424 GBP1 Ordinary shares; and
c) The Company sub-divided its 205,424 GBP1 Ordinary shares into 82,169,600 shares with a
nominal value of 0.25p.
On conclusion of the above the Company's share capital now comprises 82,169,600 Ordinary shares
of 0.25p each.
Interim dividend
As disclosed in note 13, an interim dividend of 1.62p per share will be paid on 28(th) July
2017.
20. Related party transactions
Unaudited Unaudited Audited
6 months 6 months Year ended
ended ended 31 July
31 Jan 31 Jan 2016
2017 2016 GBP'000
GBP'000 GBP'000
Transactions with related companies and
businesses
Rent paid to Ultimate Apartments pension scheme 90 70 160
Rent paid to Heron Mill Limited 121 - 75
------------------------------------------------- ----------- ----------- -----------
211 70 235
================================================= =========== =========== ===========
Statement of Directors' Responsibilities
The directors' confirm that these consolidated condensed interim financial statements have
been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting,
as adopted by the European Union. The interim management report includes a fair review of
the information required by DTR 4.2.7 and DTR 4.2.8, namely:
* an indication of important events that have occurred
during the first six months and their impact on the
condensed set of financial statements, and a
description of the principal risks and uncertainties
for the remaining six months of the financial year;
and
* material related party transactions in the first six
months and any material changes in the related party
transactions described in the last annual report.
The directors of UP Global Sourcing Holdings plc are listed on page 54 of the Prospectus for
the Initial Public Offering, which is available on our website, www.upgs.com.
For and on behalf of the board of directors
Andrew Gossage Graham Screawn
Managing Director Finance Director
27(th) April 2017 27(th) April 2017
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR LLFSRSRIDFID
(END) Dow Jones Newswires
April 28, 2017 02:00 ET (06:00 GMT)
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