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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 : 3115X
UP Global Sourcing Holdings PLC
29 April 2019
29 April 2019
UP Global Sourcing Holdings plc
"Ultimate Products" or the "Group"
INTERIM RESULTS FOR THE SIX MONTHSED 31 JANUARY 2019
Strong trading with normalised revenue increasing by 20.8%, driven by growth across all channels
Interim dividend increased by 39.8%
Ultimate Products, the owner, manager, designer and developer of an extensive range of value-focused consumer goods brands, announces its interim results for the six months ended 31 January 2019.
Financial and operational highlights
-- Revenue up 36.0% (or GBP17.4 million) to GBP65.8 million (H1 FY18: GBP48.4 million), driven by growth across all four of the Group's channels:
o UK and European discounters revenue up 34.6%
o UK supermarkets revenue up 32.1%
o Online revenue up 85.2%
o International retailers revenue up 173.0%
-- Normalised revenue growth of 20.8% after allowing for one-off factors
-- Europe continues to be largest contributor of international growth, reflecting the investment in the office and showroom in Cologne which opened in April 2018
-- Underlying EBITDA(1) up 48.4% to GBP6.6 million (H1 FY18: GBP4.5 million) -- Underlying profit before taxation(1) up 47.3% to GBP5.9 million (H1 FY18: GBP4.0 million) -- Profit before taxation up 48.5% to GBP5.9 million (H1 FY18: GBP3.9 million)
-- Gross margin stable at 22.4% (H1 FY18: 22.4%), despite a highly competitive market and price deflation for general merchandise
-- Net debt/underlying EBITDA ratio(1) at 31 January 2019 was 1.6x (31 July 2018: 2.0x; 31 January 2018: 0.9x)
-- Interim dividend of 1.16p per share, up 39.8% (H1 FY18: 0.83p), payable on 26 July 2019 to shareholders on the register on 5 July 2019
-- Current trading for FY 2019 is comfortably in line with expectations
Note:
1. Calculated after adding back share-based payment charges as referred to in Note 10 below.
Commenting on the results, Simon Showman, Chief Executive of Ultimate Products, said:
"We are delighted with the strong recovery in trading that the business has delivered in the first half of the year. These results should be taken as a clear sign of the adaptability and resilience of our business model, especially when viewed against the ongoing difficult trading conditions within the UK general merchandise market. The performance has been driven by consistent growth across each of our four strategic channels, and we are particularly pleased with the way in which our international and online businesses are developing.
Looking ahead, market conditions in the UK are likely to remain challenging for the foreseeable future. However, current trading is comfortably in line with expectations and we remain confident that a relentless focus on our tried and tested strategy will continue to deliver sustainable growth."
For more information, please contact:
Ultimate Products +44 (0) 161 627 1400
Simon Showman, CEO
Andrew Gossage, Managing Director
Graham Screawn, Chief Financial Officer
Shore Capital +44 (0) 20 7408 4090
Mark Percy
Edward Mansfield
Powerscourt +44 (0) 207 250 1446
Rob Greening
Sam Austrums
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 36 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. Its best-selling products include frying pans, mugs and speakers, selling approximately one million of each every year.
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 sq ft showroom that showcases each of its brands. In addition, the Group has an office and showroom in Guangzhou, China and in Cologne, Germany.
Ultimate Products' graduate development scheme was launched in 2012 and in 2018 it welcomed its one-hundredth graduate. In total, Ultimate Products now employs over 270 staff. For further information, please visit www.upgs.com
INTERIM STATEMENT
STRATEGY
Ultimate Products' strategy is to develop its portfolio of brands for mass-market, value-led, consumer goods for the home focused on the following channels:
1. UK and European discounters; 2. UK supermarkets; 3. Online platforms; and 4. International retailers.
This tried and tested approach has delivered a strong performance in the first half of the financial year despite a challenging market for general merchandise in the UK, the Group's main market, and the Board remains confident that this strategy will continue to deliver sustainable growth.
TRADING
Revenue for the six months ended 31 January 2019 ("H1 FY19") increased by 36.0% (GBP17.4 million) to GBP65.8 million (H1 2018: GBP48.4 million). This growth benefited from the below one-off factors, resulting in normalised revenue growth in the period of 20.8%:
-- As reported previously, revenue in H1 FY18 was reduced by approximately GBP4.5 million as a result of the one-off timing impact of a key European customer moving from Free on Board to Landed delivery arrangements; and
-- The earlier timing of Chinese New Year in 2019, which pulled forward approximately GBP1.9 million of revenue from H2 FY19 into H1 FY19.
UK and European Discounters
Sales to discounters grew by GBP8.4 million or 34.6%. This was characterised by strong growth internationally, predominantly in mainland Europe, offset by a modest decline in the UK. However, the order book for UK discounters is improving and we expect to see a return to growth for H2 FY19. As highlighted above, part of the international growth was the result of a one-off timing impact which reduced revenue by GBP4.5 million in H1 FY18.
UK supermarkets
Our brands continue to resonate well with the big four UK supermarket shopper and, as a result, revenue from those supermarkets experienced robust growth, increasing by GBP1.8 million or 32.1%.
Online platforms
The online segment showed continued and substantial growth, with revenue up GBP2.8 million or 85.2% in H1 FY19. However, this growth rate is expected to moderate in H2 FY19 against stronger prior year comparatives. Online accounted for 9.3% of overall revenue (H1 FY18: 6.8%) against a long-term target of 20%+.
International retailers
Our international business generated revenue growth of GBP16.6 million or 173.0% compared to H1 2018. International sales now represent 39.8% of total revenue (H1 FY18: 19.8%). While we are seeing growth across a number of international territories, Germany is the largest single contributor reflecting the investment in our office and showroom in Cologne. During H2 FY19 we have recruited several senior sales personnel to help drive future revenue growth. The Board continues to see the Group's international business as providing both a substantial growth opportunity and geographical diversification.
Despite a highly competitive market and price deflation for general merchandise, gross margin was maintained at 22.4% (H1 FY18: 22.4%) as a result of changes in customer mix and as the business continues to adapt to a weaker Sterling.
Administrative expenses before share-based payment charges ("Overheads") were GBP1.8 million higher than last year. This reflected increased activity and investment in the international business, although mix also played a part with a more varied customer base and higher online sales coming with its increased cost to serve. In the UK, we are also experiencing increased salary inflation as a result of high employment, increased demand for graduates, lower availability of EU staff and above inflation increases in the National Living Wage.
To offset these overhead increases, the business continues to invest in its systems and its colleagues and has seen significant productivity improvements as a result. Because of these initiatives, Overheads for the period were down as a percentage of revenue at 12.9% (H1 FY18: 13.7%), and the underlying EBITDA margin* increased from 9.2% last year to 10.0% for H1 FY19.
As a result of the increased revenue and higher operating margin, underlying EBITDA(1) for the period increased by 48.4% to GBP6.6 million (H1 FY18: GBP4.5 million), and underlying profit before taxation(1) increased 47.3% to GBP5.9 million (H1 FY18: GBP4.0 million).
BALANCE SHEET
Shareholders' equity increased to GBP10.5 million at 31 January 2019, up from GBP6.8 million at 31 January 2018, an increase of GBP3.7 million. The main movements in shareholders' equity were:
1. An increase in retained earnings of GBP3.6 million; 2. A movement in the hedging reserve of GBP0.8 million; offset by
3. The creation of a treasury reserve of GBP0.9 million, relating to the purchase of the Group's shares by the UP Global Sourcing Employee Benefit Trust ("UPGS EBT") during the period.
Net working capital at 31 January 2019 was GBP23.3 million, up from GBP12.3 million at 31 January 2018 - an increase of GBP11.0 million or 88.9%. This was caused by the strong trading performance during H1 FY19 (particularly towards the end of the period) which led to higher trade receivables, and by higher inventories needed to service the stronger order book for H2 FY19 and the major European customer's switch from FOB to Landed delivery.
Net cash from operations for the period was GBP1.7 million, a reduction of GBP0.9 million or 34.2% (H1 FY18: GBP2.6 million) as a result of the additional working capital offset by the higher EBITDA.
Net debt at 31 January 2019 was GBP14.0 million, up from GBP6.7 million at 31 January 2018, an increase of GBP7.3 million or 107.7% primarily as a result of the additional working capital of GBP11.0 million offset by retained earnings for the 12 month period of GBP3.6 million.
The net debt/underlying EBITDA ratio at 31 January 2019 was 1.6x (31 July 2018: 2.0x; 31 January 2018: 0.9x) based on underlying EBITDA for the 12 months to 31 January 2019. The Group maintains comfortable headroom within its bank facilities, with headroom of GBP10.5 million at 31 January 2019 (31 July 2018: GBP9.1 million; 31 January 2018: GBP8.0 million) and is operating well within its banking covenants.
BREXIT
The Board continues to assess the implications of a 'no deal' Brexit and the potential impact on volumes and margins if it led to a material devaluation in Sterling. However, over the longer term, the Board is confident in the adaptability and resilience of the Group's business model, as evidenced by the strong recovery in trading in H1 FY19 despite the background of a challenging UK consumer and retail market.
EMPLOYEE SHARE PARTICIPATION
The Group launched a Save As You Earn share option scheme ("SAYE Scheme") in the period for all UK staff with more than 12 months of service. The participation rate was high, with 95 out of 138 eligible staff (68.8%) opting to join the scheme with an average savings rate of GBP142 per month. As a result, a grant of options over 1,268,914 ordinary shares was made equating to 1.54% of the current issued share capital of the Group.
Also on 11 March, a grant of options over 1,120,000 ordinary shares was made under the Group's Performance Share Plan ("PSP") equating to 1.36% of the current issued share capital of the Group. These options were granted to 21 key managers across the business. Simon Showman, Chief Executive, and Andrew Gossage, Managing Director, did not participate in the PSP as they are already substantial shareholders in the Group.
It is intended that any future exercise of the above options will be fully satisfied through the 2,526,807 ordinary shares currently held in trust by the UPGS EBT with no dilution to existing shareholders.
The above share option awards represent a significant step-up in equity participation by managers and employees at all levels of the business, with the goal of achieving increased incentivisation and retention of key talent.
DIVID
In line with the Group's dividend policy of 50% of adjusted profits after tax, the Board has declared an interim dividend of 1.16p per share, up from 0.83p last year, an increase of 39.8%. The interim dividend is payable on 26 July 2019 to shareholders on the register on 5 July 2019 with an ex-dividend date of 4 July 2019.
CURRENT TRADING AND OUTLOOK
The market conditions for general merchandise remain challenging in the UK and Ultimate Products, like many others, is faced with an uncertain environment for consumers, retailers and suppliers. Despite these challenges, the Group has delivered strong growth and a good set of results for H1 FY19 through a relentless focus on its tried and tested strategy.
The Group is well invested, retains a strong balance sheet and maintains comfortable levels of funding headroom within its bank facilities.
Current trading is comfortably in line with expectations and, while the conditions in the UK look set to remain challenging for the foreseeable future, the Board remains confident about the Group's future prospects.
Note:
1 Calculated after adding back share-based payment charges as referred to in note 10.
Consolidated Condensed Income Statement
Hot Features
Premium
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
31 Jan 31 Jan 31 Jul
Note 2019 2018 2018
GBP'000 GBP'000 GBP'000
-------------------------------------------- ------- ------------ ------------ ----------
Revenue 7 65,823 48,408 87,571
Cost of sales (51,064) (37,543) (67,979)
-------------------------------------------- ------- ------------ ------------ ----------
Gross profit 14,759 10,865 19,592
Administration expenses before share-based
payment charges (8,467) (6,647) (13,647)
-------------------------------------------- ------- ------------ ------------ ----------
Profit from operations before share-based
payment charges 6,292 4,218 5,945
-------------------------------------------- ------- ------------ ------------ ----------
Share-based payment charges 9 (96) (96) (192)
-------------------------------------------- ------- ------------ ------------ ----------
Administration expenses (8,563) (6,743) (13,839)
-------------------------------------------- ------- ------------ ------------ ----------
Profit from operations 10 6,196 4,122 5,753
Finance income - - 53
Finance costs (344) (180) (383)
-------------------------------------------- ------- ------------ ------------ ----------
Profit before taxation 11 5,852 3,942 5,423
Income tax 12 (1,201) (818) (1,141)
-------------------------------------------- ------- ------------ ------------ ----------
Profit for the period 4,651 3,124 4,282
============================================ ======= ============ ============ ==========
Pence Pence Pence
-------------------------------------------- ------- ------------ ------------ ----------
Earnings per share - basic 13 5.7 3.8 5.2
Earnings per share - diluted 13 5.7 3.8 5.2
============================================ ======= ============ ============ ==========
Ex-div date: 4 July 2019
Record date: 5 July 2019
Consolidated Condensed Statement of Comprehensive Income
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
31 Jan 31 Jan 31 Jul
2019 2018 2018
GBP'000 GBP'000 GBP'000
--------------------------------------------- ---------- ---------- ---------
Profit for the period 4,651 3,124 4,282
Other comprehensive (expense)/income
Items that may be subsequently reclassified
to income statement:
Fair value movements on cash flow hedging
instruments
Hedging instruments recycled through the
income statement at the end of hedging
relationships (35) (505) 846
(563) 121 193
Foreign currency retranslation
- (7) (4)
--------------------------------------------- ---------- ---------- ---------
Other comprehensive (expense)/ income
for the period (598) (391) 1,035
--------------------------------------------- ---------- ---------- ---------
Total comprehensive income for period
attributable to the equity holders of
the company 4,053 2,733 5,317
============================================= ========== ========== =========
Consolidated Condensed Statement of Financial Position
Unaudited Unaudited Audited
As at As at As at
31 Jan 2019 31 Jan 2018 31 Jul 2018
GBP'000 GBP'000 GBP'000
Note
---------------------------------------------- ------- ------------- -------------- -------------
Assets
Intangible assets 103 - 100
Property, plant and equipment 15 1,909 1,890 2,018
Deferred tax 101 144 107
---------------------------------------------- ------- ------------- -------------- -------------
Total non-current assets 2,113 2,034 2,225
Inventories 18,410 11,796 16,466 Trade and other receivables 16 19,697 11,528 14,791 Derivative financial instruments 19 361 29 985 Current tax - 17 - Cash and cash equivalents 157 122 95 ---------------------------------------------- ------- ------------- -------------- ------------- Total current assets 38,625 23,492 32,337 ---------------------------------------------- ------- ------------- -------------- ------------- Total assets 40,738 25,526 34,562 ---------------------------------------------- ------- ------------- -------------- ------------- Liabilities Trade and other payables 17 (14,960) (11,156) (12,531) Derivative financial instruments 19 (6) (589) - Current tax (1,164) (242) (427) Borrowings 18 (12,269) (4,132) (10,992) ---------------------------------------------- ------- ------------- -------------- ------------- Total current liabilities (28,399) (16,119) (23,950) ---------------------------------------------- ------- ------------- -------------- ------------- Net current assets 10,226 7,373 8,387 Borrowings 18 (1,847) (2,657) (1,864) ---------------------------------------------- ------- ------------- -------------- ------------- Total non-current liabilities (1,847) (2,657) (1,864) ---------------------------------------------- ------- ------------- -------------- ------------- Total liabilities (30,246) (18,776) (25,814) ---------------------------------------------- ------- ------------- -------------- ------------- Net assets 10,492 6,750 8,748 ============================================== ======= ============= ============== ============= Equity Share capital 205 205 205 Share premium 2 2 2 Treasury reserve (897) - - Share-based payment reserve 368 176 272 Hedging reserve 248 (577) 846 Retained earnings 10,566 6,944 7,423 ---------------------------------------------- ------- ------------- -------------- ------------- Equity attributable to owners of the company 10,492 6,750 8,748 ============================================== ======= ============= ============== =============
Consolidated Condensed Statement of Changes in Equity
Share Share Treasury Share-based Hedging Retained Total
capital premium reserve payment reserve earnings equity
reserve
GBP'000
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------- --------- --------- --------- ------------ --------- ---------- ---------
As at 1 August 2018 205 2 - 272 846 7,423 8,748
Profit for the period - - - - - 4,651 4,651
Cash flow hedging movement - - - - (598) - (598)
--------------------------------- --------- --------- --------- ------------ --------- ---------- ---------
Total comprehensive income
for the period - - - - (598) 4,651 4,053
--------------------------------- --------- --------- --------- ------------ --------- ---------- ---------
Transactions with shareholders:
Dividends payable - - - - - (1,508) (1,508)
Share-based payments - - - 96 - - 96
Purchase of own shares - - (897) - - - (897)
--------------------------------- --------- --------- --------- ------------ --------- ---------- ---------
As at 31 January 2019 205 2 (897) 368 248 10,566 10,492
================================= ========= ========= ========= ============ ========= ========== =========
Share Share Treasury Share-based Hedging Retained Total
capital premium reserve payment reserve earnings equity
reserve
GBP'000
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------- --------- --------- --------- ------------ --------- ---------- ---------
As at 1 August 2017 205 2 - - (193) 6,779 6,793
Profit for the period - - - - - 3,124 3,124
Foreign currency translation - - - - - (7) (7)
Cash flow hedging movement - - - - (384) - (384)
--------------------------------- --------- --------- --------- ------------ --------- ---------- ---------
Total comprehensive income
for the period - - - - (384) 3,117 2,733
--------------------------------- --------- --------- --------- ------------ --------- ---------- ---------
Transactions with shareholders:
Dividends payable - - - - - (2,872) (2,872)
Transfer - - - 80 - (80) -
Share-based payments - - - 96 - - 96
--------------------------------- --------- --------- --------- ------------ --------- ---------- ---------
As at 31 January 2018 205 2 - 176 (577) 6,944 6,750
================================= ========= ========= ========= ============ ========= ========== =========
Share Share Treasury Share-based Hedging Retained Total
capital premium reserve payment reserve earnings equity
reserve
GBP'000
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------- --------- --------- --------- ------------ --------- ---------- ---------
As at 1 August 2017 205 2 - - (193) 6,779 6,793
Profit for the period - - - - - 4,282 4,282
Foreign currency translation - - - - - (4) (4)
Cash flow hedging movement - - - - 1,039 - 1,039
--------------------------------- --------- --------- --------- ------------ --------- ---------- ---------
Total comprehensive income
for the period - - - - 1,039 4,278 5,317
--------------------------------- --------- --------- --------- ------------ --------- ---------- ---------
Transactions with shareholders:
Dividends payable - - - - - (3,554) (3,554)
Transfer - - - 80 - (80) -
Share-based payments - - - 192 - - 192
--------------------------------- --------- --------- --------- ------------ --------- ---------- ---------
As at 31 July 2018 205 2 - 272 846 7,423 8,748
================================= ========= ========= ========= ============ ========= ========== =========
Consolidated Condensed Cash Flow Statement
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
31 Jan 31 Jan 31 Jul
2019 2018 2018
GBP'000 GBP'000 GBP'000
------------------------------------------------ ---- ---------- ---------- ----------
Net cash flow from operating activities
Profit for the period
Adjustments for: 4,651 3,124 4,282
Finance income - - (53)
Finance costs 344 180 383
Income tax expense 1,201 818 1,141
Depreciation and impairment 311 237 525
Amortisation 6 - 2
Derivative financial instruments 27 (3) (99)
Share-based payments 96 96 192
Income taxes paid (458) (95) (178)
Working capital adjustments
(Increase) in inventories (1,944) (732) (5,402)
(Increase)/ decrease in trade and
other receivables (4,906) 200 (3,063)
Increase/ (decrease) in trade and
other payables 2,415 (1,176) 215
------------------------------------------------------ ---------- ---------- ----------
Net cash from/ (used in) operations 1,743 2,649 (2,055)
------------------------------------------------------ ---------- ---------- ----------
Cash flows used in investing activities
Purchase of intangible assets (9) - (102)
Purchase of property, plant and equipment (202) (412) (829)
Finance income - - 53
Net cash used in investing activities (211) (412) (878)
------------------------------------------------------ ---------- ---------- ----------
Cash flows (used in)/ from financing
activities
Purchase of own shares (897) - -
Proceeds from borrowings 1,226 811 9,052
Repayment of borrowings - - (2,175)
Debt issue costs paid - - (31)
Dividends paid (1,508) (2,872) (3,554)
Interest paid (291) (139) (355)
Net cash used in finance activities (1,470) (2,200) 2,937
------------------------------------------------------ ---------- ---------- ----------
Net increase in cash and cash equivalents 62 37 4
Cash and cash equivalents brought
forward 95 91 91
Exchange losses on cash and cash equivalents - (6) -
------------------------------------------------------
Cash and cash equivalents carried
forward 157 122 95
====================================================== ========== ========== ==========
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. Statutory accounts for the year
ended 31 July 2018 were approved by the Board of Directors on
5 November 2018 and delivered to the Registrar of Companies. The
comparative figures for the financial year ended 31 July 2018
are an extract of the Company's statutory accounts for that year.
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.
This consolidated condensed interim financial information is unaudited
but has been reviewed by the Company's Auditor.
2. Basis of preparation
This consolidated condensed interim financial information for
the six months ended 31 January 2019 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 audited financial statements
for the year ended 31 July 2018, which have 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
annual financial statements for the year ended 31 July 2018, except
for the following:
IFRS 9, Financial Instruments
IFRS 9 was effective for accounting periods beginning on or after
1 January 2018. The adoption of this standard has not had any
material impact on the financial statements.
IFRS 15, Revenue from Contracts with Customers
IFRS 15 was effective for accounting periods beginning on or after
1 January 2018. The adoption of this standard has not had a material
impact on the Group's income statement but does require the disclosure
of the disaggregation of revenue in both the year-end and interim
financial statements.
Treasury shares
Consideration paid for the purchase of treasury shares is recognised
directly in equity. The cost of treasury shares held is presented
as a separate reserve ("the treasury reserve"). Any excess of
the consideration received on the sale of treasury share over
the weighted average cost of the shares sold is credited to retained
earnings.
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 on pages 19-23 of the Group's Annual
Report for the year ended 31 July 2018, which is available on
the Group's website, www.upgs.com.
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 Annual Report for the year ended 31 July 2018,
as they do not include all financial risk management information
and disclosures contained within the Annual Report. There have
been no changes in the risk management policies since the year
end.
7. Revenue
The Group has disaggregated revenue into various categories in
the following tables which are intended to depict the nature of
the Group's revenue.
Geographical split by location: Unaudited Unaudited Audited
6 months ended 6 months Year ended
31 Jan 2019 ended 31 Jul
GBP'000 31 Jan 2018
2018 GBP'000
GBP'000
-------------------- ---------------- ---------- ------------
United Kingdom 39,621 38,810 63,535
Germany 6,634 1,036 3,550
Rest of Europe 18,141 7,432 18,546
USA 576 377 818
Rest of the world 851 753 1,122
Total 65,823 48,408 87,571
==================== ================ ========== ============
International sales 26,202 9,598 24,036
Percentage of total 39.8% 19.8% 27.4%
====================== ======= ======= =======
Analysis of Revenue by Brand: Unaudited Unaudited Audited
6 months ended 6 months Year ended
31 Jan 2019 ended 31 Jul
GBP'000 31 Jan 2018
2018 GBP'000
GBP'000
---------------------------- ---------------- ---------- ------------
Beldray 15,193 11,541 21,459
Salter 12,934 8,018 13,849
Intempo 5,356 6,395 8,457
Russell Hobbs 5,141 4,079 6,914
Progress 2,852 2,079 3,210
---------------------------- ---------------- ---------- ------------
Premier brands 41,476 32,112 53,889
Other key brands 12,495 5,240 12,554
---------------------------- ---------------- ---------- ------------
Key brands total 53,971 37,352 66,443
Other brands and own label 11,852 11,056 21,128
---------------------------- ---------------- ---------- ------------
Total 65,823 48,408 87,571
============================ ================ ========== ============
Analysis of Revenue by Major Products: Unaudited Unaudited Audited
6 months ended 6 months Year ended
31 Jan 2019 ended 31 Jul
GBP'000 31 Jan 2018
2018 GBP'000
GBP'000
--------------------------- ---------------- ---------- ------------
Small domestic appliances 18,921 11,392 21,413
Housewares 15,218 11,881 20,771
Audio 14,701 8,383 15,022
Laundry 5,080 5,683 10,735
Heating and cooling 3,894 2,660 5,089
Luggage 2,616 2,069 3,718
Others 5,393 6,340 10,823
--------------------------- ---------------- ---------- ------------
Total 65,823 48,408 87,571
=========================== ================ ========== ============
Analysis of Revenue by Strategic Pillar: Unaudited Unaudited Audited
6 months ended 6 months Year ended
31 Jan 2019 ended 31 Jul
GBP'000 31 Jan 2018
2018 GBP'000
GBP'000
-------------------- ---------------- ---------- ------------
Discount retailers 32,890 24,442 45,250
UK supermarkets 7,475 5,659 9,662
Online platforms 6,118 3,303 6,959
-------------------- ---------------- ---------- ------------
46,483 33,404 61,871
Other 19,340 15,004 25,700
Total 65,823 48,408 87,571
==================== ================ ========== ============
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 2019 will be lower
than those for the six months ended 31 January 2019.
9. Share-based payment charges Unaudited Unaudited Audited
6 months ended 6 months Year ended
31 Jan 2019 ended 31 Jul
GBP'000 31 Jan 2018
2018 GBP'000
GBP'000
----------------------------- ---------------- ---------- ------------
Share-based payment expense 96 96 192
Total 96 96 192
============================= ================ ========== ============
The share-based payment expense relates to the non-cash charge
arising on a share option management incentive plan adopted immediately
prior to the IPO. The options have been valued using the Monte
Carlo option pricing model and are granted with a three-year vesting
period and can be exercised up to seven years following the vesting
date.
The above items have been shown separately in the Income Statement
to better reflect the performance of the underlying business.
10. Operating profit Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
31 Jan 31 Jan 31 Jul
2019 2018 2018
GBP'000 GBP'000 GBP'000
---------------------------------------------------------- ---------- ---------- --------
The profit is stated after charging expenses as follows:
Share-based payment charges - note 9 96 96 192
Depreciation of owned property, plant and equipment 311 237 525
Amortisation 6 - 2
========================================================== ========== ========== ========
EBITDA represents profit from operations before depreciation and
amortisation. Underlying EBITDA represents EBITDA, as defined
above, adjusted for the share-based payment charges set out in
note 9 above. The Directors use EBITDA and underlying EBITDA as
key performance indicators of the Group's business.
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 ended 6 months Year ended
31 Jan 2019 ended 31 Jul
GBP'000 31 Jan 2018
2018 GBP'000
GBP'000
--------------------------------------- ---------------- ---------- ------------
Profit from operations 6,196 4,122 5,753
Depreciation 311 237 525
Amortisation 6 - 2
--------------------------------------- ---------------- ---------- ------------
EBITDA 6,513 4,359 6,280
Share-based payment charges - note 9 96 96 192
--------------------------------------- ---------------- ---------- ------------
Underlying EBITDA 6,609 4,455 6,472
======================================= ================ ========== ============
Underlying EBITDA margin 10.0% 9.2% 7.4%
======================================= ================ ========== ============
11. Profit before taxation
The Directors also monitor the Group's performance with respect
to profit before taxation and underlying profit before taxation.
Underlying profit before taxation represents profit before taxation
adjusted for the share-based payment charges set out in note 9
above.
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 Year ended
31 Jan 2019 ended 31 Jul
GBP'000 31 Jan 2018
2018 GBP'000
GBP'000
--------------------------------------- ---------------- ---------- ------------
Profit before taxation 5,852 3,942 5,423
Share-based payment charges - note 9 96 96 192
Underlying profit before taxation 5,948 4,038 5,615
======================================= ================ ========== ============
12. Taxation Unaudited Unaudited Audited
6 months ended 6 months Year ended
31 Jan 2019 ended 31 Jul
GBP'000 31 Jan 2018
2018 GBP'000
GBP'000
-------------------------------------------- ---------------- ---------- ------------
Total tax expense 1,201 818 1,141
Tax on share-based payment charges - - -
Tax expense on underlying profit before
taxation 1,201 818 1,141
============================================ ================ ========== ============
The interim period tax charge is accrued based on the estimated
average annual effective income tax rate of 20.4% (six months
ended 31 January 2018: 20.8%; year ended 31 July 2018: 21.0%).
The effective income tax rates on the underlying profit before
taxation was 20.1% (six months ended 31 January 2018: 20.3%; year
ended 31 July 2017: 20.3%).
The Chancellor announced in his Budget on 16 March 2016 that the
main rate of corporation tax will be reduced to 17% from 1 April
2020 and the future current tax charges will reduce accordingly.
13. 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.
Diluted earnings per share amounts are calculated by dividing
the profit attributable to owners of the parent by the weighted
average number of ordinary shares in issue during the financial
year, adjusted for the effects of potentially dilutive options.
The dilutive effect is calculated on the full exercise of all
potentially dilutive ordinary share options granted by the Group,
including performance-based options which the Group considers
to have been earned.
The calculations of earnings per share are based on the following:
Unaudited Unaudited Audited
6 months ended 6 months Year ended
31 Jan 2019 ended 31 Jul
GBP'000 31 Jan 2018
2018 GBP'000
GBP'000
------------------------------------------- ---------------- ----------- ------------
Profit for the period 4,651 3,124 4,282
Number Number Number
Weighted average number of shares - basic 82,169,600 82,169,600 82,169,600
Share options - - -
------------------------------------------- ---------------- ----------- ------------
Weighted average number of shares -
diluted 82,169,600 82,169,600 82,169,600
Pence pence pence
Profit per share - basic 5.7 3.8 5.2
Profit per share - diluted 5.7 3.8 5.2
=========================================== ================ =========== ============
No dilution arises in the 6 months ended 31 January 2019 as the
hurdle for the MIP Option Scheme (explained further in note 26
of the financial statements for the year ended 31 July 2018) was
not achieved based upon the interim measurement of the criteria
as at 31 January 2019.
The underlying earnings per share referred to below is based on
the underlying profit for the period, which reflects the profit
for the period after adding back the share-based payment charges
set out in note 9 above and the tax effects as set out in note
12 above.
Unaudited Unaudited Audited
6 months ended 6 months Year ended
31 Jan 2019 ended 31 Jul
GBP'000 31 Jan 2018
2018 GBP'000
GBP'000
------------------------------------------- ---------------- ----------- ------------
Underlying profit before taxation - note
11 5,948 4,038 5,615
Taxation on underlying profit before
taxation - note 12 (1,201) (818) (1,141)
------------------------------------------- ---------------- ----------- ------------
Underlying profit for the period 4,747 3,220 4,474
Number Number Number
Weighted average number of shares - basic 82,169,600 82,169,600 82,169,600
pence pence pence
Underlying profit per share - basic 5.8 3.9 5.4
=========================================== ================ =========== ============
14. Dividends Unaudited Unaudited Audited
6 months ended 6 months Year ended
31 Jan 2019 ended 31 Jul
GBP'000 31 Jan 2018
2018 GBP'000
GBP'000
---------------------------- ---------------- ---------- ------------
Final dividend paid 1,508 2,872 2,872
Interim declared and paid - - 682
---------------------------- ---------------- ---------- ------------
1,508 2,872 3,554
============================ ================ ========== ============
Per share - adjusted pence pence pence
---------------------------- ---------------- ---------- ------------
Final dividend paid 1.890 3.495 3.495
Interim declared and paid - - 0.830
---------------------------- ---------------- ---------- ------------
1.890 3.495 4.325
============================ ================ ========== ============
The final dividend declared in respect of the year ended 31 July
2018 was paid in the 6 months ended 31 January 2019.
An interim dividend of 1.16 p per share was approved by the Board
on 26 April 2019 and will be paid on 26 July 2019 to shareholders
on record as at 5 July 2019.
15. Property, plant and equipment Unaudited Unaudited Audited
as at as at as at
31 Jan 2019 31 Jan 31 Jul
GBP'000 2018 2018
GBP'000 GBP'000
------------------------ ------------- ---------- ---------
Opening net book value 2,018 1,715 1,715
Additions 202 412 829
Disposals - - (1)
Depreciation (311) (237) (525)
------------------------ ------------- ---------- ---------
Closing net book value 1,909 1,890 2,018
======================== ============= ========== =========
16. Trade and other receivables Unaudited Unaudited Audited
as at as at as at
31 Jan 2019 31 Jan 31 Jul
GBP'000 2018 2018
GBP'000 GBP'000
------------------------------------ ------------- ---------- ---------
Trade receivables 18,339 10,348 13,510
Other receivables and prepayments 1,358 1,180 1,281
19,697 11,528 14,791
==================================== ============= ========== =========
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.
17. Trade and other payables Unaudited Unaudited Audited
as at as at as at
31 Jan 2019 31 Jan 31 Jul
GBP'000 2018 2018
GBP'000 GBP'000
---------------------------------- ------------- ---------- ---------
Trade payables 9,134 5,640 8,610
Accruals 4,952 4,468 3,723
Other taxes and social security 874 1,048 198
14,960 11,156 12,531
================================== ============= ========== =========
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.
18. Borrowings Unaudited Unaudited Audited
as at as at as at
31 Jan 2019 31 Jan 31 Jul
GBP'000 2018 2018
GBP'000 GBP'000
Current
-------------------------------------------------- ------------- ---------- ---------
Bank overdraft and invoice discounting 4,365 1,321 4,503
Import loans 7,924 2,841 6,530
-------------------------------------------------- ------------- ---------- ---------
12,289 4,162 11,033
Less: Unamortised debt issue cost (20) (30) (41)
-------------------------------------------------- ------------- ---------- ---------
12,269 4,132 10,992
================================================== ============= ========== =========
Non-current
Revolving credit facility 1,864 2,698 1,893
-------------------------------------------------- ------------- ---------- ---------
1,864 2,698 1,893
Less: Unamortised debt issue cost (17) (41) (29)
-------------------------------------------------- ------------- ---------- ---------
1,847 2,657 1,864
================================================== ============= ========== =========
Total borrowings 14,116 6,789 12,856
================================================== ============= ========== =========
The earliest that lenders of the above borrowings
require repayment is
as follows:
In less than one year 12,289 4,162 11,033
Between one and two years 1,864 - 1,893
Between two and five years - 2,698 -
Less: Unamortised debt issue cost (37) (71) (70)
-------------------------------------------------- ------------- ---------- ---------
14,116 6,789 12,856
================================================== ============= ========== =========
The Group is funded by external bank facilities provided by HSBC.
The facilities provide the ongoing funding of the Group and comprise
a revolving credit facility of GBP6.2 m, an import loan facility
of GBP8.7 m and an invoice discounting facility of GBP17 m. The
revolving credit facility runs to July 2020, the invoice discounting
facility to June 2020 and the import loan facility, which is repayable
on demand, is subject to annual renewal.
19. 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 Jan 2019 31 Jan 31 Jul
GBP'000 2018 2018
GBP'000 GBP'000
------------------------------------------------ ------------- ---------- ---------
Trade and other receivables 18,339 10,348 13,510
Derivative financial instruments - assets 361 29 985
Trade and other payables 14,086 10,108 12,333
Derivative financial instruments - liabilities 6 589 -
Borrowings 14,116 6,789 12,856
Cash and cash equivalents 157 122 95
================================================ ============= ========== =========
b) Financial assets
The Group held the following financial assets at amortised cost:
Unaudited Unaudited Audited
as at as at as at
31 Jan 2019 31 Jan 31 Jul
GBP'000 2018 2018
GBP'000 GBP'000
--------------------------- ------------- ---------- ---------
Cash and cash equivalents 157 122 95
Trade receivables 18,339 10,348 13,510
18,496 10,470 13,605
=========================== ============= ========== =========
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 Jan 2019 31 Jan 31 Jul
GBP'000 2018 2018
GBP'000 GBP'000
----------------- ------------- ---------- ---------
Trade payables 9,134 5,640 8,610
Loans 14,116 6,789 12,856
Other payables 4,952 4,468 3,723
28,202 16,897 25,189
================= ============= ========== =========
d) Derivative financial instruments
The Group held the following derivative financial instruments,
classified as fair value through profit and loss on initial recognition:
Unaudited Unaudited Audited
as at as at as at
31 Jan 2019 31 Jan 31 Jul
GBP'000 2018 2018
GBP'000 GBP'000
---------------------------- ------------- ---------- ---------
Forward currency contracts 318 (589) 935
Interest rate caps 39 17 42
Interest rate swaps (2) 12 8
355 (560) 985
============================ ============= ========== =========
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 Jan 31 Jan 31 Jul
2019 2018 2018
GBP'000 GBP'000 GBP'000
---------------------------------------------------------------------------- ---------- ---------- --------
Trade receivables 18,339 10,348 13,510
Prepayments and other receivables not classified as financial instruments 1,358 1,180 1,281
Trade and other receivables (note 16) 19,697 11,528 14,791
============================================================================ ========== ========== ========
Unaudited Unaudited Audited
as at as at as at
31 Jan 2019 31 Jan 31 Jul
GBP'000 2018 2018
GBP'000 GBP'000
------------------------------------------------- ------------- ---------- ---------
Trade and other payables held at amortised cost 14,086 10,108 12,333
Social security and other taxes 874 1,048 198
------------------------------------------------- -------------
Trade and other payables (note 17) 14,960 11,156 12,531
================================================= ============= ========== =========
Derivative financial instruments - Forward 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 2019, the outstanding contracts
all mature within 12 months of the period end (31 January 2018:
12 months; 31 July 2018: 12 months). At 31 January 2019, the Group
was committed to buy US$33,000,000, to sell EUR15,250,000 and
to sell CA$175,000, paying and receiving respectively a fixed
sterling amount (31 January 2018: to buy US$15,750,000, to sell
EUR8,950,000 and to sell CA$90,000; 31 July 2018: to buy US$28,750,000,
to sell EUR12,400,000 and to sell CA$100,000). The forward currency
contracts are measured at fair value using the relevant exchange
rates for GBP:USD, GBP:EUR and GBP:CAD. The fair value of the
contracts at 31 January 2019 is an asset of GBP318,000 (31 January
2018: GBP589,000 liability; 31 July 2018: GBP935,000 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.
All of the forward contracts to buy US Dollars and some of those
to sell Euros meet the conditions for hedge accounting, as set
out in the accounting policies of the financial statements for
the year ended 31 July 2018.
Derivative financial instruments - Interest rate swaps and interest
rate caps
The Group has entered into interest rate swaps and interest rate
caps to protect the exposure to interest rate movements on the
various elements of the Group's banking facility. As at 31 January
2019, protection was in place over an aggregate principal of GBP17,659,000
(31 January 2018: GBP11,702,000, 31 July 2018: GBP11,600,000).
All interest rate swaps meet the conditions for hedge accounting,
as set out in the accounting policies of the financial statements
for the year ended 31 July 2018.
Interest rate swaps and caps are valued using level 2 inputs.
The valuations are based on the notional value of the swaps and
caps, the current available market borrowing rate and the swapped
or capped interest rate respectively. The valuations are based
on the current valuation of the present saving or cost of the
future cash flow differences, based on the difference between
the swapped and capped interest rates contracts and the expected
interest rate as per the lending agreement.
20. Events occurring after the reporting period
Interim dividend
As disclosed in note 14, an interim dividend of 1.16 p per share
will be paid on 26 July 2019.
Save As You Earn Scheme
On 13 February 2019, the Company launched a Save As You Earn Scheme
(the "SAYE Scheme"), offering all eligible employees the opportunity
to participate in the future growth of the Company through the
granting of share options. Eligible employees were invited to
subscribe for options over ordinary shares of 0.25 pence each
with an exercise price of 39.5 pence per Ordinary Share, representing
a 20% discount to the average closing mid-market price between
15 January 2019 and 17 January 2019, being the three business
days prior to opening of the SAYE scheme for application. The
options have a savings contract start date of 1 March 2019 and
are exercisable between 1 March 2022 and 30 September 2022 for
the three-year contracts and between 1 March 2024 and 30 September
2024 for the five year contracts.
Out of 138 eligible employees, 95 elected to participate in the
SAYE Scheme and, pursuant to this, a grant of 1,268,914 options
over ordinary shares was made on 13 February 2019, equating to
1.54% of the current issued share capital of 82,169,600 ordinary
shares. It is currently intended that any future exercise of these
options will be satisfied through the ordinary shares currently
held in trust by the UP Global Sourcing Employee Benefit Trust
("EBT") (see below), with no dilution to existing shareholders.
Purchase of own shares
On 15 February 2019 the "EBT" acquired a further 155,807 shares
in the Company for a total cost of GBP101,995, including the associated
acquisition costs. Following this transaction, the EBT holds 2,526,807
shares, representing 3.1% of the Company's issued share capital
with voting rights.
Awards under the Company's Performance Share Plan
On 11 March 2019, options over 1,120,000 ordinary shares in the
Company were granted, at nominal value, to certain employees,
under the rules of the Company's Performance Share Plan (the "PSP"),
to retain and incentivise certain members of senior management.
Following a three-year performance period, commencing on 1 August
2019 and ending on 31 July 2022, the options may then vest over
a two-year period commencing on the assessment by the Remuneration
Committee of the performance conditions, and lapse on the tenth
anniversary of the date of grant. The options are subject to rigorous
financial performance conditions and continued employment within
the Group. It is currently intended that any future exercise of
these options will be satisfied through the ordinary shares currently
held in trust by the "EBT" (see above), with no dilution to existing
shareholders
21. Related party transactions Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
31 Jan 31 Jan 31 Jul
2019 2018 2018
GBP'000 GBP'000 GBP'000
----------------------------------------------------- ---------- ---------- ---------
Transactions with related companies and businesses:
Rent paid to Heron Mill Limited 143 120 285
Rent paid to Berbar Properties Limited 90 90 180
===================================================== ========== ========== =========
22. Future significant accounting changes: IFRS 16, Leases
The new standard recognises a leased asset and a lease liability
for almost all leases and requires them to be accounted for in
a consistent manner. This introduces a single lessee accounting
model and eliminates the previous distinction between an operating
lease and a finance lease.
IFRS 16 will be first adopted in the Group's report and accounts
for the year ending 31 July 2020, with adoption being on a full
retrospective basis, including the restatement of the balance
sheet at 31 July 2018 and restatement of the income statement
for the year ending 31 July 2019.
Current significant operating leases include the Group's four
principal properties (Manor Mill, Heron Mill, Guangzhou and Cologne)
along with certain other plant and equipment.
The Group is finalising its assessment of IFRS 16 with some further
work still required to determine the final impact however current
indications of the impact on the income statement for the six
months ended 31 January 2019 are as follows:
IFRS 16 impacts
Pre IFRS16 Rental Depn charge Finance Post IFRS16
charges increased(2) costs increased
GBP'm removed GBP'm (3) GBP'm
(1) GBP'm
GBP'm
---------------- ----------- --------- -------------- ---------------- ------------
EBITDA 6.5 0.4 - - 6.9
Depreciation
and
amortisation (0.3) - (0.4) - (0.7)
---------------- ----------- --------- -------------- ---------------- ------------
Profit from
operations 6.2 0.4 (0.4) - 6.2
Finance costs (0.3) - - - (0.3)
Profit before
tax 5.9 0.4 (0.4) - 5.9
Income tax (1.2) - - - (1.2)
----------- --------- -------------- ---------------- ------------
Profit after
tax 4.7 0.4 (0.4) - 4.7
================ =========== ========= ============== ================ ============
(1) EBITDA will increase as operating lease rental charges are
removed.
(2) Depreciation will increase with the additional charge on the
right of use assets.
(3) Finance charges will increase due to the interest on the finance
leases.
The more significant impact from the introduction of IFRS 16 will
be on the balance sheet, where, including some estimation, current
indications of the cumulative impact from the restatement on the
prior periods' income statements and from the recognition of assets
and liabilities as at 31 January 2019, are as follows:
IFRS 16 impacts
Pre IFRS16 Right of Lease liability Other Post IFRS16
use asset brought
brought on balance
on balance sheet
GBP'm sheet GBP'm GBP'm
GBP'm GBP'm
-------------------- ----------- ------------ ---------------- ------- ------------
Property, plant and
equipment 1.9 3.4 - - 5.3
Lease liabilities - - (3.7) - (3.7)
Other receivables
and
payables 8.6 - - 0.1 8.7
-----------
Net assets 10.5 3.4 (3.7) 0.1 10.3
==================== =========== ============ ================ ======= ============
There will be no impact on net cash flow.
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
pages 32 to 35 of the Group's Annual Report for the year ended
31 July 2018, which is available on the Group's website, www.upgs.com.
For and on behalf of the board of directors
Andrew Gossage Graham Screawn
Managing Director Chief Financial Officer
26 April 2019 26 April 2019
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
IR SESFMMFUSELL
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