("McBride" or the "Group")
Preliminary Results Announcement
Strong operational and strategic progress delivering sales volume and profit growth
McBride, the leading European manufacturer and supplier of private label and contract manufactured products for the domestic household and professional cleaning/hygiene markets, announces its preliminary results for the year ended
Divisional and customer focus delivering improved results
· Overall market for private label household cleaning products continues to grow
· Total market sales volumes grew 5.7%, with private label volumes up 7.2%, reflecting our focus on customer partnerships
· Good performance in strategic focus areas of laundry and
· Strong second half recovery in contract manufacturing, with early start of a new long-term contract
· All divisions delivered profit growth, building on momentum of 2023
· Transformation programme progressing to plan and on track to deliver
· Sustainability commitment enhanced with appointment of a dedicated team; confirmation of Science Based Target initiative (SBTi) alignment with targets set for the coming years
Financial highlights
· Revenue of
· Adjusted operating profit(2) of
· Operating profit of
· Adjusted profit before tax(2) of
· Profit before tax of
· Net debt(2) at
Positive outlook for continued profitable growth
· Early months of new financial year seeing overall sales volumes in line with expectations
· Encouraging signs of continued contract manufacturing momentum, building on strong second half
· Healthy pipeline of new launches and business wins, as the Group prioritises growth initiatives
· Input costs for the main raw materials remain steady, with costs of recycled materials and natural-based chemicals increasing in line with our expectations
· Group full-year outlook is consistent with current market expectations*, targeting a third consecutive year of revenue growth, with profitability significantly ahead of the historical average
* Current market expectations refer to a Group compiled consensus of broker forecasts for FY25 of:
· Adjusted operating profit
· Net debt
"It has been an excellent financial and operational performance by the Group. While market dynamics have remained favourable, with a continued consumer trend towards private label across European household cleaning product markets, it is the effective execution of our strategy that has led McBride to capitalise on this environment. Our efforts to further develop our customer partnerships, together with improved consumer insights to support product range developments and innovation led by our specialist divisional teams, will continue to drive future growth.
Strong operational delivery, focused growth initiatives, and effective cost and margin management, have led each division to generate profitable growth for the year, resulting in the Group's significantly increased adjusted operating profit, slightly ahead of the upgraded market expectations. In addition, our commitment to reducing debt levels has led to a
The Transformation programme is progressing to plan, with a number of key projects moving from design to delivery phase in 2025. The Group has made an encouraging start to the new financial year and while there are signs of increased brander activity, private label demand remains robust with contract manufacturing maintaining the momentum of the fourth quarter. As such, we look forward to the future with confidence."
|
Year ended |
Year ended |
|
Constant |
|
30 June |
30 June |
Reported |
currency |
£m (unless otherwise stated) |
2024 |
2023 |
Change |
change(1) |
Revenue |
934.8 |
889.0 |
5.2% |
6.2% |
Adjusted operating profit |
67.1 |
13.5 |
53.6 |
53.8 |
Operating profit |
64.3 |
10.3 |
54.0 |
|
Adjusted profit before taxation |
53.1 |
0.3 |
52.8 |
52.9 |
Profit/(loss) before taxation |
46.5 |
(15.1) |
61.6 |
|
Adjusted diluted earnings per share(3) |
21.7p |
0.0p |
21.7p |
|
Diluted earnings/(loss) per share(3) |
18.8p |
(6.6)p |
25.4p |
|
Net debt |
131.5 |
166.5 |
(35.0) |
|
Adjusted return on capital employed(2) |
33.5% |
6.4% |
27.1ppts |
|
1Comparatives translated at financial year 2024 exchange rates.
2Refer to note 19 for definition.
3See note 8.
Analyst and investor presentation
A results presentation will be available on the
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0207 457 2020 |
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Forward-looking Statements
This announcement contains forward-looking statements about financial and operational matters. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They sometimes use words such as "may", "will", "could", "should", "aim", "expect", "plan", "intend", "anticipate", "believe", "achieve", "project", "predict", "seek", "estimate", "objective", "goal", "target" or other words of similar meaning. These statements are based on the current views, expectations, assumptions and intentions of management, and are based on information available to management as at the date of this announcement. Because they relate to future events and are subject to future circumstances, these forward-looking statements are subject to risks, uncertainties and other factors which may not have been in contemplation as at the date of the announcement and/or which are beyond
Any forward-looking statements contained in this announcement speak only as of the date they are made. Neither
This announcement does not constitute an offer or invitation to underwrite, subscribe for, or otherwise acquire or dispose of any
Overall business performance
It has been a year of significant growth and progress for McBride, with the Group delivering an excellent financial and operational performance. All five divisions maintained the positive momentum created in the second half of 2023, generating profit growth for the year, which is a testament to our specialist teams and their ability to execute our strategy. Whilst the consumer trend towards private label has presented a rising tide of potential growth opportunities, it is McBride's operational delivery that has ensured such a strong trading and financial performance.
It is also pleasing to report that the Group continued to make good progress against its strategic imperative of ensuring a safe working environment. The lost time incident frequency rate fell to 0.75 (2023: 0.88), with new tools and an online reporting system being introduced. At the year end, 11 of the Group's 15 manufacturing locations had been free of lost time incidents for over 100 days.
The Group continued to capitalise on higher demand for everyday value private label household cleaning products, with overall sales volumes up 5.7% and private label sales volumes up 7.2%. The strong demand for McBride's products was driven by a combination of new business wins and growth of existing private label products. Whilst contract manufacturing volumes were lower in the first half of the year and for the year overall, they increased by 13.4% in the second half, largely due to strong fourth quarter volumes from the commencement of a substantial new long-term contract. In the second half, there were some signs of increased promotional activity from manufacturers of branded products, but all divisions continued to see solid demand for private label products. Customer service levels (CSL) improved by 2.5ppts compared to last year, with the second half performance being over 3ppts higher than the first half, as issues on a small number of the Group's manufacturing lines were resolved.
The Group's strong sales volume performance resulted in revenue increasing by 5.2% to
Net debt reduction has remained a key area of focus for McBride. As presented at the Capital Markets Day (CMD) in
Inflationary environment
Over the course of the year, prices for consumers continued to rise and cost-of-living pressures resulted in continued strong demand for good value, high-quality private label products across the Group's markets. The challenge for McBride has been how to effectively and reliably serve the significantly increased demand. As such, the divisions have successfully focused on efficient supply chain and logistics management, with a key principle of the business being the ability to deliver an effective end-to-end supply chain solution.
The raw materials environment has been relatively benign, with generally weaker demand lowering input cost pressure, which has supported McBride's strong financial performance. However, as the Group exited the financial year, it has started to see upward pressure on certain materials, particularly recycled materials and natural alcohol-based products, as customer and consumer demand for these materials continued to increase.
Strategic progress
At the CMD, McBride presented the significant progress achieved in the implementation of its Compass strategy and outlined the key elements of its Transformation programme. Importantly, each division remains focused on delivery of its key objectives, with the strategies continuing to be as relevant today as they were when they were first implemented in 2021.
In terms of the Transformation programme, it is pleasing to report that the initiatives are progressing to plan, as the Group works towards its target of
One of McBride's key strengths is the depth to which its divisions are embedded in their sectors and markets. It is this focused specialism that provides exceptional product and technological knowledge, together with the ability to adapt to changing customer and consumer needs. Over the past two years, the Group has developed closer partnerships with its customers to enhance the value proposition provided to them. In addition to creating more dynamic pricing arrangements, the clear customer-centric approach means that the divisions can respond quickly and with agility to evolving consumer needs, as well as having a better platform to promote product innovations.
Innovation
The development of innovative products remains at the heart of McBride and is a driver of many of its new business wins. Throughout the year, the divisions have continued to create new solutions to meet changing consumer demands and ensure reliable delivery for their customers. A common theme across the whole business is the move to more compact or more concentrated products, reducing the weight of product to transport and the volume of required packaging. Additionally, during the year, Unit Dosing adapted product packaging formats from plastic to carton packs, Liquids introduced improved product formulations, Powders developed innovative solutions for greater compaction and Aerosols introduced lighter-weight packaging to mitigate the impact of input cost pressures.
Sustainability
A commitment to sustainability, relevant and tuned to the needs of our stakeholders and wider society, is core to the Group's strategy and corporate proposition. McBride continues to operate strong levels of governance, as would be expected of a listed company, and has made great strides in engaging with its workforce and local communities. During the year, McBride appointed a small, dedicated team to drive its environmental impact reduction plans. The Group signed up to the SBTi, the only major private label household supplier to have done so, setting goals for the coming years on all three carbon scopes. The divisions' research and development teams work to ensure that each new product launched is less carbon intense than the one it replaces.
Current trading and outlook
The first two months of the new financial year have seen overall volume levels in line with the Group's expectations. The overall market for household cleaning products is showing volume growth, and within that demand for private label products remains robust in the face of initiatives from branded manufacturers to recover market share. The divisions have a good pipeline of new product launches and business wins ahead and continue to prioritise growth initiatives. Input costs for the main raw materials remain steady overall, but with costs of recycled materials and natural-based chemicals increasing in line with expectations. The business will continue to manage its margins through informed and co-operative dialogue with its customers.
The next year is a crucial period for a number of the Group's transformation projects, especially the 'gold programmes', being the SAP S/4HANA ERP system upgrade, Commercial Excellence and Service Excellence. The Group remains confident in the quality of delivery and the benefits that will be delivered from these Transformation initiatives.
The Group's outlook for the year is consistent with analyst expectations, which would represent a third consecutive year of revenue growth, with profitability levels significantly ahead of our historical average.
Divisional performance review
|
Year ended |
Year ended |
|
Constant |
|
30 June |
30 June |
Reported |
currency |
|
2024 |
2023 |
change |
change |
Revenue |
£m |
£m |
% |
% |
Liquids |
532.8 |
497.9 |
7.0% |
7.7% |
Unit Dosing |
233.6 |
234.2 |
(0.3)% |
0.7% |
Powders |
92.8 |
85.9 |
8.0% |
9.2% |
Aerosols |
50.9 |
46.2 |
10.2% |
11.6% |
|
24.7 |
24.8 |
(0.4)% |
8.3% |
Group |
934.8 |
889.0 |
5.2% |
6.2% |
|
Year ended |
Year ended |
|
Constant |
|
30 June |
30 June |
Reported |
currency |
|
2024 |
2023 |
change |
change |
Adjusted operating profit/(loss) |
£m |
£m |
£m |
£m |
Liquids |
45.6 |
10.5 |
35.1 |
35.0 |
Unit Dosing |
19.4 |
10.0 |
9.4 |
9.2 |
Powders |
6.0 |
(0.7) |
6.7 |
7.0 |
Aerosols |
2.1 |
0.3 |
1.8 |
1.8 |
|
1.4 |
1.1 |
0.3 |
0.4 |
Corporate |
(7.4) |
(7.7) |
0.3 |
0.4 |
Group |
67.1 |
13.5 |
53.6 |
53.8 |
Liquids performance review
Revenue grew to
Driven by sales volume growth of 6.6%, the strong performance was supported by efficient operational delivery and the effect of prior year pricing actions agreed with customers to offset significant input cost inflation. All major geographies saw sales volume and revenue growth, with a standout performance in
Private label revenue increased by 9.4%, driven principally by private label share growth and new contract wins, and was the result of a strategic focus on building customer partnerships. In the strategic focus areas of laundry, private label sales volumes grew by 17.9% on a constant currency basis, driven by contract wins and a focused approach. Sales volumes of private label products in the dishwash and cleaners categories grew broadly in line with the wider markets.
Contract manufacturing volumes decreased by 1.8%; however, volumes in the second half increased by 24.1%, driven by a major new customer contract, which is expected to generate further growth in 2025.
Liquids has made good progress with the Transformation programme, creating efficiencies and capacity through the continued rollout of Lean manufacturing methodology across the division and using innovation to improve sustainability. The development of more concentrated products, together with a move towards carton packaging, supports the Group's commitment to sustainability by reducing the use of water and plastic in the manufacturing process.
Unit Dosing performance review
On a constant currency basis, revenue increased by 0.7% to
While the number of customer units grew by 1.1%, the volume of individual doses sold grew by 6.2%, driven by a shift in sales mix towards larger consumer packs. Volume growth in doses was seen across all product categories and in both private label and contract manufacturing customer segments, despite certain operational challenges limiting laundry capsules output. Contract manufacturing sales volumes increased by 22.4% in the second half, mainly driven by new product launches, with this positive momentum expected to continue into 2025.
Despite the average sales price per dose reducing by 5.2% on a constant currency basis, driven by successful efforts to create more compact and increasingly sustainable products and certain price reductions, the division improved profitability through operating leverage from higher production volumes, strong margin management and tight cost controls.
As outlined at the CMD, product leadership remains at the heart of Unit Dosing's strategy. Expertise in designing and manufacturing compacted products and sustainable packaging solutions, providing its customers with affordable, easy-to-use, fit-for-purpose, sustainable products, led to multiple new business wins in 2024 and created a healthy pipeline of new product launches. Under the 'FleXellence' initiative also discussed at the CMD, the division made investments to improve the flexibility of operations and increase capacity for key product and packaging formats, while ensuring the right balance between output increases, cost to produce and the flexibility required to fully satisfy its customers' needs.
Powders performance review
Revenue grew to
This strong turnaround performance resulted from a combination of good operational delivery, business wins outpacing contract losses, and a strong recovery in demand from industrial and institutional customers. More broadly, underlying cost-of-living pressures supported the continued trend of consumers switching to private label laundry powder from branded products and other higher-cost laundry product formats.
The division's return to profitability was also underpinned by the proactive cost mitigation actions initiated in 2023 and, in part, by the easing of raw material cost inflation.
In the overall powders market, whilst volumes increased slightly by 0.9%, pricing increased in value by 5.5%, mainly due to branders increasing prices, widening the price gap between private label and brands. The Powders division gained market share versus higher-cost branded competition. Across the five major European markets, private label volume share in laundry rose to 29.8% (2023: 29.1%).
In line with the strategic priorities initially outlined in 2021, Powders continued to deliver award-winning products, led by research and development product compaction and sustainability actions. This is a key component of a wider programme to better tailor products to meet the needs of European consumers, with the aim of being the 'go-to' powder specialist. The focus on operational excellence resulted in efficiency improvements and improved customer service levels. Powders secured a number of new customer wins, gaining new contract manufacturing customers and expanding its private label presence into new geographic regions.
As outlined at the CMD, laundry powder remains a core part of the Group's product offering in the strategically important laundry category. Powders has developed a winning formula of being an efficient powder specialist, meeting its customers' needs by offering a wide portfolio of products, ranging from low-cost everyday value to premium award-winning products. Powders will continue on its journey to become the 'go to' powder specialist, by being the low-cost leader, driving efficiencies by improving asset utilisation, continuing to build on technical and R&D expertise and targeting growth opportunities in new geographies and channels.
Aerosols performance review
Revenue grew to
Delivering on its strategy to expand horizons beyond
As outlined at the CMD, Aerosols has developed strong relationships with customers, thanks to its proven track record of being fast, agile and reliable. From its established position as a leader in personal care and household aerosol products, Aerosols has a strong base from which to expand into new territories, driving further growth supported by significant capex investments to expand its manufacturing capacity and capabilities.
Revenue grew to
During the year, sales of personal care products grew strongly, particularly as the
As outlined at the CMD, with its well-invested and flexible manufacturing capacity, the division is well positioned to grow in the
Group operating results
Operating profit of
Adjusted EBITDA of
Exceptional items
Exceptional items of
·
·
Finance costs
The decrease in total finance costs from
Taxation
Reported profit before taxation was
The statutory effective tax rate for the year is 28% (2023: 24%).
The Group operates across a number of jurisdictions and tax risk can arise in relation to the pricing of cross‑border transactions. Associated provisions have reduced in the year mainly due to statute of limitation expiries.
Earnings/(loss) per share
On an adjusted basis, diluted earnings per share was
1Refer to note 19 for definition.
Payments to shareholders
Under the terms of the amended RCF announced on
Cash flow and balance sheet
|
Year ended 30 June 2024 |
Year ended 30 June 2023 |
|
£m |
£m |
Adjusted EBITDA |
87.1 |
34.1 |
Working capital excluding provisions and pensions |
(4.6) |
7.1 |
Share-based payments |
1.6 |
0.5 |
Loss on disposal of property, plant and equipment |
1.4 |
0.3 |
Impairment of property, plant and equipment |
0.2 |
- |
Pension deficit reduction contributions |
(4.0) |
(4.0) |
Free cash flow(1) |
81.7 |
38.0 |
Exceptional items |
(1.0) |
(1.4) |
Interest on borrowings and lease liabilities less interest receivable |
(10.9) |
(11.4) |
Refinancing costs paid |
(5.5) |
(12.3) |
Tax paid |
(5.1) |
(1.8) |
Net cash generated from operating activities |
59.2 |
11.1 |
Net capital expenditure(2) |
(19.6) |
(12.0) |
Repayment of lease liabilities |
(4.5) |
(4.3) |
Debt financing activities |
(25.9) |
2.6 |
Settlement of derivatives |
1.1 |
0.4 |
Free cash flow to equity(3) |
10.3 |
(2.2) |
Purchase of own shares |
(2.8) |
- |
Net increase/(decrease) in cash and cash equivalents |
7.5 |
(2.2) |
Free cash flow was
Refinancing costs paid of
During the year, net capital expenditure was
Strong levels of cash generation resulted in a net repayment of
The Group's net assets increased to
1Refer to note 19 for definition.
2Net capital expenditure is capital expenditure less proceeds from sale of fixed assets.
3Free cash flow to equity excludes cash flows relating to transactions with shareholders.
4Gearing represents net debt divided by the average of opening and closing capital.
Bank facilities and net debt
Net debt at
Throughout the year, the Group had a
At
At
The RCF, which is aligned with the
1. Renewable energy: McBride strives to reduce its environmental impact by increasing the percentage of energy from renewable sources from 5.9% in 2020 to 70.0% in 2026. During the year, 54.9% (2023: 42.1%) of the Group's energy came from renewable sources, surpassing the loan agreement target of 50.0% by
2. Recycled content: Plastics are a significant element in many of McBride's final products. During the year, 98.8% (2023: 98.2%) of polyethylene terephthalate (PET) plastic packaging sourced in manufacturing the Group's products had post‑consumer recycled (PCR) content, exceeding the loan agreement target of 84.0%. This also significantly exceeds the Company's own target of 94.0% PCR by 2026.
3. Responsible sourcing: McBride aims to source all paper and card components responsibly via FSC®-approved suppliers, with the percentage of virgin carton sourced from FSC®-approved suppliers increasing from 50.0% in 2020 to 100.0% in 2026. By
Successful achievement of all three annual targets results in a reduction of 0.05% of the margin of the facility.
At
1Refer to note 19 for definition.
Pensions
In the
A cash flow driven investment (CDI) strategy was implemented during the first half of the financial year to
At
Following the triennial valuation at
The Directors acknowledge the appeal judgement dated
The Group has other post-employment benefit obligations outside the
Principal risks and uncertainties
The Group is subject to both internal and external risk factors to its business and has a well-established set of risk management procedures. The following risks and uncertainties are those that the Directors believe could have the most significant impact on the Group's business:
· Changing market, customer and consumer dynamics;
· Disruption to systems and processes;
· Financing risks;
· Supply chain resilience;
· Safe and high-quality products;
· Health and safety;
· Climate change and environmental concerns;
· Challenges in attracting and retaining talent;
· Increased regulation;
· Economic, political and macro environment instability; and
· Business transformation challenges.
Consolidated Income Statement
Year ended
|
|
2024 |
2023 |
|||||
|
|
Adjusted |
Adjusting items |
Total |
Adjusted |
Adjusting items |
Total |
|
|
Note |
£m |
£m |
£m |
£m |
£m |
£m |
|
Revenue |
3 |
934.8 |
- |
934.8 |
889.0 |
- |
889.0 |
|
Cost of sales |
|
(586.9) |
- |
(586.9) |
(625.4) |
- |
(625.4) |
|
Gross profit |
|
347.9 |
- |
347.9 |
263.6 |
- |
263.6 |
|
Distribution costs |
|
(81.3) |
- |
(81.3) |
(77.9) |
- |
(77.9) |
|
Administrative costs |
|
(196.3) |
(2.8) |
(199.1) |
(168.4) |
(3.2) |
(171.6) |
|
Impairment of trade receivables |
|
(1.6) |
- |
(1.6) |
(3.5) |
- |
(3.5) |
|
Loss on disposal of property, plant and equipment |
|
(1.4) |
- |
(1.4) |
(0.3) |
- |
(0.3) |
|
Impairment of property, plant and equipment |
|
(0.2) |
- |
(0.2) |
- |
- |
- |
|
Operating profit/(loss) |
|
67.1 |
(2.8) |
64.3 |
13.5 |
(3.2) |
10.3 |
|
Finance costs |
6 |
(14.0) |
(3.8) |
(17.8) |
(13.2) |
(12.2) |
(25.4) |
|
Profit/(loss) before taxation |
|
53.1 |
(6.6) |
46.5 |
0.3 |
(15.4) |
(15.1) |
|
Taxation |
7 |
(14.8) |
1.6 |
(13.2) |
(0.3) |
3.9 |
3.6 |
|
Profit/(loss) for the year |
|
38.3 |
(5.0) |
33.3 |
- |
(11.5) |
(11.5) |
|
Earnings/(loss) per ordinary share attributable to the owners of the parent during the year |
8 |
|
|
|
|
|
|
|
Basic earnings/(loss) per share |
|
|
|
19.3p |
|
|
(6.6)p |
|
Diluted earnings/(loss) per share |
|
|
|
18.8p |
|
|
(6.6)p |
|
Consolidated Statement of Comprehensive Income
Year ended
|
|
2024 |
2023 |
|
|
£m |
£m |
Profit/(loss) for the year |
|
33.3 |
(11.5) |
Other comprehensive income/(expense) |
|
|
|
Items that may be reclassified to profit or loss: |
|
|
|
Currency translation differences of foreign subsidiaries |
|
0.1 |
(0.6) |
Gain on net investment hedges |
|
0.8 |
0.4 |
(Loss)/gain on cash flow hedges in the year |
|
(1.3) |
3.7 |
Cash flow hedges transferred to profit or loss |
|
(1.6) |
(1.4) |
Taxation relating to the items above |
|
(0.6) |
(0.4) |
|
|
(2.6) |
1.7 |
Items that will not be reclassified to profit or loss: |
|
|
|
Net actuarial loss on post‑employment benefits |
|
(5.6) |
(14.1) |
Taxation relating to the items above |
|
1.3 |
3.5 |
|
|
(4.3) |
(10.6) |
Total other comprehensive expense |
|
(6.9) |
(8.9) |
Total comprehensive income/(expense) |
|
26.4 |
(20.4) |
Consolidated Balance Sheet
At 30 June 2024
|
|
2024 |
2023 |
|
Note |
£m |
£m |
Non-current assets |
|
|
|
|
10 |
19.7 |
19.7 |
Other intangible assets |
10 |
9.8 |
6.5 |
Property, plant and equipment |
10 |
114.4 |
117.8 |
Derivative financial instruments |
11 |
1.7 |
4.5 |
Right-of-use assets |
10 |
8.1 |
8.5 |
Deferred tax assets |
|
42.8 |
41.6 |
|
|
196.5 |
198.6 |
Current assets |
|
|
|
Inventories |
|
119.6 |
121.5 |
Trade and other receivables |
|
148.8 |
145.7 |
Current tax assets |
|
2.1 |
2.3 |
Derivative financial instruments |
11 |
0.3 |
0.6 |
Cash and cash equivalents |
12 |
9.3 |
1.6 |
|
|
280.1 |
271.7 |
Total assets |
|
476.6 |
470.3 |
|
|
|
|
Current liabilities |
|
|
|
Trade and other payables |
|
220.1 |
219.6 |
Borrowings |
11 |
67.4 |
49.3 |
Lease liabilities |
11 |
3.1 |
3.5 |
Derivative financial instruments |
11 |
0.4 |
1.8 |
Current tax liabilities |
|
12.9 |
6.7 |
Provisions |
14 |
2.2 |
2.7 |
|
|
306.1 |
283.6 |
Non-current liabilities |
|
|
|
Borrowings |
11 |
65.0 |
109.8 |
Lease liabilities |
11 |
5.3 |
5.5 |
Pensions and other post-employment benefits |
13 |
29.4 |
26.6 |
Provisions |
14 |
1.4 |
2.6 |
Deferred tax liabilities |
|
6.0 |
5.1 |
|
|
107.1 |
149.6 |
Total liabilities |
|
413.2 |
433.2 |
Net assets |
|
63.4 |
37.1 |
|
|
|
|
Equity |
|
|
|
Issued share capital |
16 |
17.4 |
17.4 |
Share premium account |
|
68.6 |
68.6 |
Other reserves |
|
76.3 |
78.9 |
Accumulated losses |
|
(98.9) |
(127.8) |
Total equity |
|
63.4 |
37.1 |
Consolidated Cash Flow Statement
Year ended 30 June 2024
|
|
|
|
|
|
2024 |
2023 |
|
Note |
£m |
£m |
Operating activities |
|
|
|
Profit/(loss) before tax |
|
46.5 |
(15.1) |
Finance costs |
|
17.8 |
25.4 |
Exceptional items excluding finance costs |
4 |
0.8 |
0.8 |
Share-based payments charge |
|
1.6 |
0.5 |
Depreciation of property, plant and equipment |
10 |
16.3 |
16.8 |
Depreciation of right-of-use assets |
10 |
3.7 |
3.8 |
Loss on disposal of property, plant and equipment |
|
1.4 |
0.3 |
Amortisation of intangible assets |
10 |
2.0 |
2.4 |
Impairment of property, plant and equipment |
|
0.2 |
- |
Operating cash flow before changes in working capital and exceptional items |
|
90.3 |
34.9 |
Increase in receivables |
|
(5.2) |
(1.3) |
Decrease/(increase) in inventories |
|
0.6 |
(2.7) |
Increase in payables |
|
- |
11.1 |
Operating cash flow after changes in working capital before exceptional items |
|
85.7 |
42.0 |
Additional cash funding of pension scheme |
|
(4.0) |
(4.0) |
Cash generated from operations before exceptional items |
|
81.7 |
38.0 |
Cash outflow in respect of exceptional items |
|
(1.0) |
(1.4) |
Cash generated from operations |
|
80.7 |
36.6 |
Interest paid |
|
(10.9) |
(11.4) |
Refinancing costs paid |
|
(5.5) |
(12.3) |
Taxation paid |
|
(5.1) |
(1.8) |
Net cash generated from operating activities |
|
59.2 |
11.1 |
Investing activities |
|
|
|
Purchase of property, plant and equipment |
|
(14.3) |
(10.3) |
Purchase of intangible assets |
|
(5.3) |
(1.7) |
Settlement of derivatives used in net investment hedges |
|
1.1 |
0.4 |
Net cash used in investing activities |
|
(18.5) |
(11.6) |
Financing activities |
|
|
|
Drawdown/(repayment) of overdrafts |
12 |
11.2 |
(6.2) |
Drawdown/(repayment) of other loans |
12 |
7.4 |
(4.9) |
(Repayment)/drawdown of bank loans |
12 |
(44.5) |
13.7 |
Repayment of IFRS 16 lease obligations |
12 |
(4.5) |
(4.3) |
Purchase of own shares |
|
(2.8) |
- |
Net cash used in financing activities |
|
(33.2) |
(1.7) |
|
|
|
|
Increase/(decrease) in net cash and cash equivalents |
|
7.5 |
(2.2) |
Net cash and cash equivalents at the start of the year |
|
1.6 |
4.5 |
Currency translation differences |
|
0.2 |
(0.7) |
Net cash and cash equivalents at the end of the year |
|
9.3 |
1.6 |
Consolidated Statement of Changes in Equity
Year ended 30 June 2024
|
|
|
Other reserves |
|
|
||||||
|
Issued share capital £m |
Share premium account £m |
Cash flow hedge reserve £m |
Currency translation reserve £m |
Capital redemption reserve £m |
Accumulated losses £m |
Total equity £m |
||||
At 1 July 2023 |
17.4 |
68.6 |
3.7 |
(2.0) |
77.2 |
(127.8) |
37.1 |
||||
Profit for the year |
- |
- |
- |
- |
- |
33.3 |
33.3 |
||||
Other comprehensive income/(expense) |
|
|
|
|
|
|
|
||||
Items that may be reclassified to profit or loss: |
|
|
|
|
|
|
|
||||
Currency translation differences of foreign subsidiaries |
- |
- |
- |
0.1 |
- |
- |
0.1 |
||||
Gain on net investment hedges |
- |
- |
- |
0.8 |
- |
- |
0.8 |
||||
Loss on cash flow hedges in the year |
- |
- |
(1.3) |
- |
- |
- |
(1.3) |
||||
Cash flow hedges transferred to profit or loss |
- |
- |
(1.6) |
- |
- |
- |
(1.6) |
||||
Taxation relating to the items above |
- |
- |
(0.6) |
- |
- |
- |
(0.6) |
||||
|
- |
- |
(3.5) |
0.9 |
- |
- |
(2.6) |
||||
Items that will not be reclassified to profit or loss: |
|
|
|
|
|
|
|
||||
Net actuarial loss on post‑employment benefits |
- |
- |
- |
- |
- |
(5.6) |
(5.6) |
||||
Taxation relating to the items above |
- |
- |
- |
- |
- |
1.3 |
1.3 |
||||
|
- |
- |
- |
- |
- |
(4.3) |
(4.3) |
||||
Total other comprehensive (expense)/income |
- |
- |
(3.5) |
0.9 |
- |
(4.3) |
(6.9) |
||||
Total comprehensive (expense)/income |
- |
- |
(3.5) |
0.9 |
- |
29.0 |
26.4 |
||||
Transactions with owners of the parent |
|
|
|
|
|
|
|
||||
Purchase of own shares |
- |
- |
- |
- |
- |
(2.8) |
(2.8) |
||||
Share-based payments |
- |
- |
- |
- |
- |
1.6 |
1.6 |
||||
Taxation relating to the items above |
- |
- |
- |
- |
- |
1.1 |
1.1 |
||||
At 30 June 2024 |
17.4 |
68.6 |
0.2 |
(1.1) |
77.2 |
(98.9) |
63.4 |
||||
|
|
|
Other reserves |
|
|
||||||
|
Issued share capital £m |
Share premium account £m |
Cash flow hedge reserve £m |
Currency translation reserve £m |
Capital redemption reserve £m |
Accumulated losses £m |
Total equity £m |
||||
At 1 July 2022 |
17.4 |
68.6 |
1.8 |
(1.8) |
77.2 |
(106.2) |
57.0 |
||||
Loss for the year |
- |
- |
- |
- |
- |
(11.5) |
(11.5) |
||||
Other comprehensive income/(expense) |
|
|
|
|
|
|
|
||||
Items that may be reclassified to profit or loss: |
|
|
|
|
|
|
|
||||
Currency translation differences of foreign subsidiaries |
- |
- |
- |
(0.6) |
- |
- |
(0.6) |
||||
Gain on net investment hedges |
- |
- |
- |
0.4 |
- |
- |
0.4 |
||||
Gain on cash flow hedges in the year |
- |
- |
3.7 |
- |
- |
- |
3.7 |
||||
Cash flow hedges transferred to profit or loss |
- |
- |
(1.4) |
- |
- |
- |
(1.4) |
||||
Taxation relating to the items above |
- |
- |
(0.4) |
- |
- |
- |
(0.4) |
||||
|
- |
- |
1.9 |
(0.2) |
- |
- |
1.7 |
||||
Items that will not be reclassified to profit or loss: |
|
|
|
|
|
|
|
||||
Net actuarial loss on post‑employment benefits |
- |
- |
- |
- |
- |
(14.1) |
(14.1) |
||||
Taxation relating to the items above |
- |
- |
- |
- |
- |
3.5 |
3.5 |
||||
|
- |
- |
- |
- |
- |
(10.6) |
(10.6) |
||||
Total other comprehensive income/(expense) |
- |
- |
1.9 |
(0.2) |
- |
(10.6) |
(8.9) |
||||
Total comprehensive income/(expense) |
- |
- |
1.9 |
(0.2) |
- |
(22.1) |
(20.4) |
||||
Transactions with owners of the parent |
|
|
|
|
|
|
|
||||
Share-based payments |
- |
- |
- |
- |
- |
0.5 |
0.5 |
||||
At 30 June 2023 |
17.4 |
68.6 |
3.7 |
(2.0) |
77.2 |
(127.8) |
37.1 |
||||
At 30 June 2024, the accumulated losses include a deduction of £3.2 million (2023: £0.4m) for the cost of own shares held in relation to employee share schemes.
Notes to the Consolidated Financial Information
1. Corporate information
The Company and its subsidiaries (together, 'the Group') is
2. Accounting policies
Basis of preparation
The financial information does not constitute statutory accounts of the Group for the years ended 30 June 2024 and 2023 within the meaning of sections 434(3) and 435(3) of the Companies Act 2006 or contain sufficient information to comply with the disclosure requirements of IFRS. The financial information for 2023 is derived from the statutory accounts for 2023 which have been delivered to the Registrar of Companies.
The statutory accounts for the year ended 30 June 2024 have been reported on by the Company's auditors,
The financial information has been prepared on the going concern basis in accordance with
Going concern
The Group's base case forecasts are based on the Board-approved budget and three-year plan. They indicate sufficient liquidity, debt cover and interest cover throughout the going concern review period to ensure compliance with current banking covenants. The Group's base case scenario assumes:
· revenue growth of c.4% per annum, driven predominantly by volume increases;
· raw material prices stabilising after the exceptional levels of input cost inflation seen in the previous two years;
· interest rates reducing in line with current market expectations; and
· a Sterling to Euro exchange rate of £1:€1.15.
The Directors have considered the Group's principal risks with the highest likelihood of occurrence or the severest impact, and the adverse effect this would have on the Group's financial forecasts. Changing market, customer and consumer dynamics could adversely impact revenue growth. Lack of supply chain resilience influences raw material and packaging input costs. Economic, political and macro environment instability potentially affects both revenue growth and input costs, in addition to market interest rates and foreign exchange rates. Considering these risks, together with the risk that the Group's revolving credit facility is reduced as part of the upcoming refinancing project, a severe but plausible downside scenario to stress test the Group's financial forecasts has been modelled, with the following assumptions:
· no revenue growth in 2025;
· revenue growth reducing to 1% in 2026, being half of the Group's long-term target of 2%;
· an increase in raw material and packaging input costs compared to latest forecasts;
· interest rates increasing by 100 basis points;
· Sterling appreciating significantly against the Euro to £1:€1.25; and
· revolving credit facility reducing from €175 million to €150 million.
In the event that such a severe but plausible downside risk scenario occurs, the Group would remain compliant with current banking covenants.
After reviewing the current liquidity position and financial forecasts, stress testing for potential risks and considering the uncertainties described above, and based on the currently committed funding facilities, the Directors have a reasonable expectation that the Group has sufficient resources to continue in operational existence and without significant curtailment of operations for the foreseeable future. For these reasons, the Directors continue to adopt the going concern basis of accounting in preparing the Group financial statements.
Viability statement
In accordance with the requirements of the
The Group has a €175 million multi‑currency, sustainability-linked RCF, with a tenor to May 2026, as well as a number of facilities whereby it could borrow against certain of its trade receivables: in the
In assessing the Group's viability, the Directors have considered the current financial position of the Group and its principal risks and uncertainties. The analysis considers a severe but plausible downside scenario, featuring the principal risks from a financial and operational perspective, with the resulting impact on key metrics, such as liquidity headroom and covenants. The downside risk scenario assumes sensitivity around exchange rates and interest rates, along with significant reductions in revenue and cash flow over the three-year period. The Group's geographic footprint, product diversification and access to external financing all provide resilience against these factors and the other principal risks to which the Group is exposed.
Whilst the Group ends the year with net current liabilities of £26.0 million (2023: £11.9m), the Directors conclude that the Group has access to sufficient financing facilities in order to support this position.
After conducting their viability review, the Directors confirm that they have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the three-year period of their assessment to 30 June 2027.
Critical accounting judgements and key sources of estimation uncertainty
The preparation of the consolidated financial statements from which this preliminary announcement is derived requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported assets, liabilities, income and expenses. Actual results may differ from these estimates. The significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those applied to the consolidated financial statements for the year ended 30 June 2023.
Alternative performance measures (APMs)
The performance of the Group is assessed using a variety of adjusted measures that are not defined under IFRS and are therefore termed non-GAAP measures.
APM |
Definition |
Source |
|
|
Adjusted operating profit |
Operating profit before amortisation of intangible assets and exceptional items |
Consolidated Income Statement |
||
Adjusted EBITDA |
Adjusted operating profit before depreciation |
Consolidated Income Statement |
||
Adjusted profit before tax |
Adjusted profit before tax is based on adjusted operating profit less adjusted finance costs |
Consolidated Income Statement |
||
Adjusted profit for the year |
Adjusted profit for the year is based on adjusted profit before tax less taxation relating to non-adjusting items |
Consolidated Income Statement |
||
Adjusted earnings per share |
Adjusted earnings per share is based on the Group's profit/(loss) for the year adjusted for the items excluded from operating profit in arriving at adjusted operating profit, and the tax relating to those items |
Note 8 Consolidated Income Statement |
||
Free cash flow |
Free cash flow is defined as cash generated before exceptional items |
Consolidated Cash Flow Statement |
||
Cash conversion % |
Cash conversion % is defined as free cash flow as a percentage of adjusted EBITDA (applicable only when adjusting EBITDA is positive) |
Consolidated Income Statement Consolidated Cash Flow Statement |
||
Adjusted return on capital employed (ROCE) |
Adjusted ROCE is defined as adjusted operating profit divided by the average of opening and closing capital employed. Capital employed is defined as the total of goodwill and other intangible assets, property, plant and equipment, right-of-use assets, inventories, trade and other receivables less trade and other payables. |
Consolidated Income Statement Consolidated Balance Sheet |
||
Liquidity |
Liquidity means, at any time, without double counting, the aggregate of: (a) cash; (b) cash equivalents; (c) the available facility at that time, which comprises the headroom available in the RCF and other committed facilities; and (d) the aggregate amount available for drawing under uncommitted facilities. |
Consolidated Cash Flow Statement Note 19 |
||
Net debt |
Net debt consists of cash and cash equivalents, overdrafts, bank and other loans and lease liabilities. |
Consolidated Balance Sheet |
||
The APMs we use may not be directly comparable with similarly titled measures used by other companies.
Adjusted measures
Adjusted measures exclude specific items that are considered to hinder comparison of the trading performance of the Group's businesses either year on year or with other businesses. This presentation is consistent with the way that financial performance is measured by management and reported to the Board and Executive Committee, and is used for internal performance analysis and in relation to employee incentive arrangements. The Directors present these adjusted measures in the financial statements in order to assist investors in their assessment of the trading performance of the Group. Directors do not regard these measures as a substitute for, or superior to, the equivalent measures calculated and presented in accordance with IFRS.
During the years under review, the items excluded from operating profit in arriving at adjusted operating profit were the amortisation of intangible assets and exceptional items. Exceptional items and amortisation are excluded from adjusted operating profit because they are not considered to be representative of the trading performance of the Group's businesses during the year.
See note 19 'Additional information' for further information on alternative performance measures.
3. Segment information
Segmental reporting
Financial information is presented to the Board by business division for the purposes of allocating resources within the Group and assessing the performance of the Group. There are five separately managed and accountable business divisions. The European business is managed as four divisions based on product technology and the
· Liquids;
· Unit Dosing;
· Powders;
· Aerosols; and
·
Intra-group revenue from the sale of products is agreed between the relevant customer-facing units and eliminated in the segmental presentation that is presented to the Board, and therefore excluded from the reported figures. Most overhead costs are directly attributed within the respective divisions' income statements. Central overheads are allocated to a reportable segment proportionally using an appropriate cost driver. Corporate costs, which include the costs associated with the Board and the Executive Leadership Team, governance and listed company costs. The costs of certain Group functions (mostly associated with financial disciplines such as treasury) are reported separately. Exceptional items are detailed in note 4 and are not allocated to the reportable segments as this reflects how they are reported to the Board. Finance expense and income are not allocated to the reportable segments, as the Group Treasury function manages this activity, together with the overall net debt position of the Group.
The Board uses adjusted operating profit to measure the profitability of the Group's businesses. Adjusted operating profit is, therefore, the measure of segment profit presented in the Group's segment disclosures. Adjusted operating profit represents operating profit before specific items that are considered to hinder comparison of the trading performance of the Group's businesses either year on year or with other businesses. During the years under review, the items excluded from operating profit in arriving at adjusted operating profit were the amortisation of intangible assets and exceptional items.
|
Liquids |
Unit Dosing |
Powders |
Aerosols |
|
Corporate |
Group |
Year ended 30 June 2024 |
|
|
|
|
|
|
|
Segment revenue |
532.8 |
233.6 |
92.8 |
50.9 |
24.7 |
- |
934.8 |
Adjusted operating profit/(loss) |
45.6 |
19.4 |
6.0 |
2.1 |
1.4 |
(7.4) |
67.1 |
Amortisation of intangible assets |
|
|
|
|
|
|
(2.0) |
Exceptional items (note 4) |
|
|
|
|
|
|
(0.8) |
Operating profit |
|
|
|
|
|
|
64.3 |
Finance costs (note 6) |
|
|
|
|
|
|
(17.8) |
Profit before taxation |
|
|
|
|
|
|
46.5 |
|
|
|
|
|
|
|
|
Inventories |
61.2 |
31.3 |
14.1 |
10.3 |
2.7 |
- |
119.6 |
Capital expenditure |
10.3 |
7.7 |
2.0 |
0.6 |
0.3 |
- |
20.9 |
Amortisation and depreciation |
12.8 |
5.8 |
1.4 |
0.6 |
1.4 |
- |
22.0 |
|
Liquids |
Unit Dosing |
Powders |
Aerosols |
|
Corporate |
Group |
Year ended 30 June 2023 |
|
|
|
|
|
|
|
Segment revenue |
497.9 |
234.2 |
85.9 |
46.2 |
24.8 |
- |
889.0 |
Adjusted operating profit/(loss) |
10.5 |
10.0 |
(0.7) |
0.3 |
1.1 |
(7.7) |
13.5 |
Amortisation of intangible assets |
|
|
|
|
|
|
(2.4) |
Exceptional items (note 4) |
|
|
|
|
|
|
(0.8) |
Operating profit |
|
|
|
|
|
|
10.3 |
Finance costs (note 6) |
|
|
|
|
|
|
(25.4) |
Loss before taxation |
|
|
|
|
|
|
(15.1) |
|
|
|
|
|
|
|
|
Inventories |
59.4 |
33.8 |
15.8 |
9.6 |
2.9 |
- |
121.5 |
Capital expenditure |
5.9 |
4.9 |
1.7 |
0.4 |
0.3 |
- |
13.2 |
Amortisation and depreciation |
13.2 |
6.3 |
1.4 |
0.6 |
1.5 |
- |
23.0 |
Geographical information
|
Revenue |
|
Non-current assets |
|
|||||
|
2024 |
2023 |
|
2024 |
2023 |
|
|||
|
£m |
£m |
|
£m |
£m |
|
|||
|
194.4 |
187.8 |
|
36.8 |
34.5 |
|
|||
|
212.4 |
205.8 |
|
- |
- |
|
|||
|
201.5 |
188.0 |
|
9.8 |
9.1 |
|
|||
|
78.4 |
73.9 |
|
14.4 |
14.3 |
|
|||
|
41.2 |
35.1 |
|
9.5 |
9.6 |
|
|||
Other |
177.5 |
169.5 |
|
77.6 |
80.2 |
|
|||
|
25.4 |
25.7 |
|
3.9 |
4.8 |
|
|||
Rest of the World |
4.0 |
3.2 |
|
- |
- |
|
|||
Total |
934.8 |
889.0 |
|
152.0 |
152.5 |
|
|||
The geographical revenue information above is based on the location of the customer.
Non-current assets for this purpose consist of goodwill, other intangible assets, property, plant and equipment and right-of-use assets.
Revenue by major customer
In 2024 and 2023, no individual customer provided more than 10% of the Group's revenue. During 2024, the top ten customers accounted for 52% of total Group revenue (2023: 53%).
4. Exceptional items
Analysis of exceptional items
|
2024 |
2023 |
|
£m |
£m |
Environmental remediation |
0.8 |
0.8 |
Total charged to operating profit |
0.8 |
0.8 |
Group refinancing: |
|
|
Independent business review and refinancing costs |
3.8 |
12.2 |
Total charged to finance costs |
3.8 |
12.2 |
Total exceptional items before tax |
4.6 |
13.0 |
Total exceptional items of £4.6 million were recorded during the year (2023: £13.0m). The charge comprised the following:
· £0.8 million costs relating to the re-evaluation of the environmental remediation provision (2023: £0.8m); and
· £3.8 million charged to finance costs (2023: £12.2m). The charge primarily related to the termination of the upside sharing fee. As announced on 25 October 2023, the Group agreed to make a one-off payment of £5.0 million to its lender group in respect of the upside sharing fee. As £1.5 million had already been recognised at 30 June 2023, a further £3.5 million cost was recognised in the year. Costs of £12.2 million incurred in the prior year related to the independent business review and amended RCF.
5. Operating profit
Operating profit is stated after charging:
|
2024 |
2023 |
|
£m |
£m |
Cost of inventories (included in cost of sales)* |
519.9 |
573.2 |
Employee costs |
157.2 |
142.0 |
Amortisation of intangible assets (note 10) |
2.0 |
2.4 |
Depreciation of property, plant and equipment (note 10) |
16.3 |
16.8 |
Depreciation of right-of-use assets (note 10) |
3.7 |
3.8 |
Impairment: |
|
|
Property, plant and equipment (note 10) |
0.2 |
- |
Inventories |
8.9 |
3.0 |
Trade receivables |
1.6 |
2.6 |
Expense relating to short-term leases |
0.2 |
0.3 |
Expense relating to low-value leases |
0.1 |
0.1 |
Research and development costs not capitalised |
10.0 |
7.3 |
Net foreign exchange loss |
0.5 |
0.4 |
*Direct material costs only.
6. Finance costs
|
2024 |
2023 |
|
£m |
£m |
Finance costs |
|
|
Interest on bank loans and overdrafts |
10.5 |
11.1 |
Interest on lease liabilities |
0.3 |
0.3 |
Net foreign exchange loss/(gain) |
0.7 |
(0.2) |
Amortisation of facility fees |
0.5 |
0.5 |
Non-utilisation and other fees |
0.8 |
1.0 |
|
12.8 |
12.7 |
Post-employment benefits: |
|
|
Net interest cost on defined benefit obligation (note 13) |
1.2 |
0.5 |
Adjusted finance costs |
14.0 |
13.2 |
Costs associated with independent business review and refinancing (note 4) |
3.8 |
12.2 |
Total finance costs |
17.8 |
25.4 |
Interest rate caps are used to manage the interest rate profile of the Group's borrowings. Accordingly, interest income from interest rate caps of £1.6 million (2023: £0.5m) is included in interest on bank loans and overdrafts.
No interest costs were capitalised in the current year (2023: £nil).
7. Taxation
Income tax expense/(credit)
|
2024 |
2023 |
||||
Total attributable to ordinary |
|
Overseas |
Total |
|
Overseas |
Total |
shareholders |
£m |
£m |
£m |
£m |
£m |
£m |
Current tax expense/(credit) |
|
|
|
|
|
|
Current year |
0.4 |
12.0 |
12.4 |
- |
5.0 |
5.0 |
Adjustment for prior years |
- |
(0.8) |
(0.8) |
- |
(0.2) |
(0.2) |
|
0.4 |
11.2 |
11.6 |
- |
4.8 |
4.8 |
Deferred tax expense/(credit) |
|
|
|
|
|
|
Origination and reversal of temporary differences |
1.0 |
(0.3) |
0.7 |
(8.8) |
0.9 |
(7.9) |
Adjustment for prior years |
0.7 |
0.2 |
0.9 |
(0.2) |
(0.3) |
(0.5) |
|
1.7 |
(0.1) |
1.6 |
(9.0) |
0.6 |
(8.4) |
|
|
|
|
|
|
|
Income tax expense/(credit) |
2.1 |
11.1 |
13.2 |
(9.0) |
5.4 |
(3.6) |
The current tax adjustment for the prior year was £0.5 million charge (2023: £nil) and £0.2 million credit (2023: £0.2m credit) relating to the release of provisions for uncertain tax treatments due to the expiry of statutes of limitation.
Reconciliation to
The total tax charge/(credit) on the Group's profit/(loss) before tax for the year is higher (2023: higher) than the amount that would be charged at the
|
2024 |
2023 |
Total attributable to ordinary shareholders |
£m |
£m |
Profit/(loss) before tax |
46.5 |
(15.1) |
Profit/(loss) before tax multiplied by the |
11.6 |
(3.1) |
Effect of tax rates in foreign jurisdictions |
0.3 |
1.1 |
Non-deductible expenses |
0.5 |
0.4 |
Change in tax rate |
- |
(1.6) |
Other differences |
0.7 |
0.3 |
Adjustment for prior years |
0.1 |
(0.7) |
Total tax charge/(credit) in profit or loss |
13.2 |
(3.6) |
Exclude adjusting items |
1.6 |
3.9 |
Total tax charge in profit or loss before adjusting items |
14.8 |
0.3 |
The taxation is provided at current rates on the profits earned for the year. There have been no changes in applicable tax rates that have impacted the current year tax charge.
The main rate of
8. Earnings/(loss) per ordinary share
Basic earnings/(loss) per ordinary share is calculated by dividing the profit/(loss) for the year attributable to owners of the Company by the weighted average number of the Company's ordinary shares in issue during the financial year. The weighted average number of the Company's ordinary shares in issue excludes 1,372,779 shares (2023: 623,968 shares), being the weighted average number of own shares held during the year in relation to employee share schemes.
|
Reference |
2024 |
2023 |
Weighted average number of ordinary shares in issue (million) |
a |
172.7 |
173.4 |
Effect of dilutive share options (million) |
|
4.2 |
2.5 |
Weighted average number of ordinary shares for calculating diluted earnings/(loss) per share (million) |
b |
176.9 |
175.9 |
Diluted earnings/(loss) per share is calculated by adjusting the weighted average number of ordinary shares in issue assuming the conversion of all potentially dilutive ordinary shares. Where potentially dilutive ordinary shares would cause an increase in earnings per share, or a decrease in loss per share, the diluted loss per share is considered equal to the basic loss per share.
During the year, the Company had equity-settled awards with a nil exercise price that are potentially dilutive ordinary shares.
Adjusted earnings per share measures are calculated based on profit/(loss) for the year attributable to owners of the Company before adjusting items as follows:
|
|
2024 |
2023 |
|
Reference |
£m |
£m |
Profit/(loss) for calculating basic and diluted earnings/(loss) per share |
c |
33.3 |
(11.5) |
Adjusted for: |
|
|
|
Amortisation of intangible assets (note 10) |
|
2.0 |
2.4 |
Exceptional items (note 4) |
|
4.6 |
13.0 |
Taxation relating to the items above |
|
(1.6) |
(3.9) |
Profit for calculating adjusted earnings per share |
d |
38.3 |
- |
|
|
2024 |
2023 |
|
Reference |
pence |
pence |
Basic earning/(loss) per share |
c/a |
19.3 |
(6.6) |
Diluted earnings/(loss) per share |
c/b(1) |
18.8 |
(6.6) |
Adjusted basic earnings per share |
d/a |
22.2 |
0.0 |
Adjusted diluted earnings per share |
d/b(1) |
21.7 |
0.0 |
1Diluted loss per share is considered equal to the basic loss per share as potentially dilutive ordinary shares cause a decrease in the loss per share.
9. Payments to shareholders
Dividends paid and received are included in the Company financial statements in the year in which the related dividends are actually paid or received or, in respect of the Company's final dividend for the year, approved by shareholders.
Under the terms of the amended RCF announced on 29 September 2022, the Company may not, except with the consent of its lender group, declare, make or pay any dividend or distribution to its shareholders prior to an 'exit event', being a change of control, refinancing of the RCF in full, prepayment and cancellation of the RCF in full, or upon the termination date of the RCF, being May 2026. Hence, the Board is not recommending a final dividend for the financial year ended 30 June 2024.
No payments to ordinary shareholders were made or proposed in respect of this year or the prior year.
Furthermore, under the RCF the Company may not, except with the consent of its lender group, redeem or repay any of its share capital prior to an exit event. Therefore, the redemption of B Shares that would normally take place in November each year will not take place. B Shares issued but not redeemed are classified as current liabilities.
Movements in the number of B Shares outstanding were as follows:
|
|
Nominal |
|
Number |
value |
|
000 |
£'000 |
Issued and fully paid |
|
|
At 1 July 2022, 30 June 2023 and 30 June 2024 |
665,888 |
666 |
B Shares carry no rights to attend, speak or vote at Company meetings, except on a resolution relating to the winding up of the Company.
10. Intangible assets, property, plant and equipment and right-of-use assets
|
|
|
|
|
and other |
Property, |
|
|
intangible |
plant and |
Right-of-use |
|
assets |
equipment |
assets |
|
£m |
£m |
£m |
Net book value at 1 July 2023 |
26.2 |
117.8 |
8.5 |
Currency translation differences |
- |
(1.1) |
(0.1) |
Additions |
5.3 |
15.6 |
3.4 |
Disposal of assets |
- |
(1.4) |
- |
Impairment |
- |
(0.2) |
- |
Depreciation charge |
- |
(16.3) |
(3.7) |
Amortisation charge |
(2.0) |
- |
- |
Net book value at 30 June 2024 |
29.5 |
114.4 |
8.1 |
Included within goodwill and other intangible assets is goodwill of £19.7 million (2023: £19.7m), computer software of £5.0 million (2023: £5.6m) and customer relationships of £0.2 million (2023: £0.6m).
Capital commitments at 30 June 2024 amounted to £5.7 million (2023: £5.5m). At 30 June 2024, the Group was committed to future minimum lease payments of £0.3 million (2023: £2.1m) in respect of leases which have not yet commenced and for which no lease liability has been recognised.
11. Financial risk management
The Group's activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk.
There have been no material changes in the Group's risk management policies in either the 30 June 2024 or 30 June 2023 financial years.
The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows:
· Level 1 - unadjusted quoted prices in active markets for identical assets or liabilities
· Level 2 - inputs other than Level 1 that are observable for the asset or liability, either directly (prices) or indirectly (derived from prices)
· Level 3 - inputs that are not based on observable market data (unobservable inputs).
|
|
|
|
At |
At |
|
30 June |
30 June |
|
2024 |
2023 |
|
£m |
£m |
Level 2 assets |
|
|
Derivative financial instruments |
|
|
Forward currency contracts |
- |
0.2 |
Interest rate caps |
2.0 |
4.9 |
Total financial assets |
2.0 |
5.1 |
Level 2 liabilities |
|
|
Derivative financial instruments |
|
|
Forward currency contracts |
(0.4) |
- |
Interest rate caps |
- |
(0.3) |
Upside sharing fee |
- |
(1.5) |
Total financial liabilities |
(0.4) |
(1.8) |
Derivative financial instruments
Derivative financial instruments comprise the foreign currency derivatives and interest rate derivatives that are held by the Group in designated hedging relationships.
Foreign currency forward contracts are measured by reference to prevailing forward exchange rates. Foreign currency options are measured using a variant of the
In the prior year, an upside sharing fee was identified as an embedded derivative. The amended RCF that the Group agreed with its lender group on 29 September 2022 included an upside sharing mechanism whereby a fee would become payable by the Group to members of the lender group upon the occurrence of an 'exit event'. Such a fee was to be determined as the percentage of any increase in the market capitalisation of the Group from 29 September 2022 to the date of the exit event. At 30 June 2023, a valuation was performed using a conventional Black-Scholes pricing model. As announced on 25 October 2023, the Group agreed to make a one-off payment of £5.0 million to its lender group in respect of the upside sharing fee, therefore the derivative was not recognised in the current financial year.
Valuation levels and techniques
There were no transfers between levels during the year and no changes in valuation techniques.
Financial assets and liabilities measured at amortised cost
The fair value of borrowings (including overdrafts and lease liabilities) are as follows:
|
|
|
|
|
|
At |
At |
|
|
30 June |
30 June |
|
|
2024 |
2023 |
|
|
£m |
£m |
Current |
|
70.5 |
52.8 |
Non-current |
|
70.3 |
115.3 |
Total borrowings |
|
140.8 |
168.1 |
The fair value of the following financial assets and liabilities approximate to their carrying amount:
· trade and other receivables;
· other current financial assets;
· cash and cash equivalents; and
· trade and other payables.
12. Net debt
Movements in net debt were as follows:
|
|
IFRS 16 |
|
Currency |
|
|
At 1 July |
non-cash |
Cash |
translation |
At 30 June |
|
2023 |
movements(1) |
flows |
differences |
2024 |
|
£m |
£m |
£m |
£m |
£m |
Overdrafts |
(0.6) |
- |
(11.2) |
- |
(11.8) |
Bank loans |
(109.8) |
- |
44.5 |
0.3 |
(65.0) |
Other loans |
(48.7) |
- |
(7.4) |
0.5 |
(55.6) |
Lease liabilities |
(9.0) |
(3.7) |
4.5 |
(0.2) |
(8.4) |
Financial liabilities |
(168.1) |
(3.7) |
30.4 |
0.6 |
(140.8) |
Cash and cash equivalents |
1.6 |
- |
7.5 |
0.2 |
9.3 |
Net debt |
(166.5) |
(3.7) |
37.9 |
0.8 |
(131.5) |
1IFRS 16 non-cash movements includes additions £3.4 million, disposals of £nil and interest charged of £0.3 million.
13. Pensions and post-employment benefits
The Group provides a number of post-employment benefit arrangements. In the
At 30 June 2024, the Group recognised a deficit on its
Non-governmental collected post-employment benefits had the following effect on the Group's results and financial position:
|
|
|
|
|
2024 |
2023 |
|
|
£m |
£m |
|
Profit or loss Operating profit Defined benefit schemes |
|
|
|
Service cost and administration expenses (net of employee contribution) |
(0.6) |
(1.0) |
|
Net charge to operating profit |
(0.6) |
(1.0) |
|
Finance costs Net interest cost on defined benefit obligation |
(1.2) |
(0.5) |
|
Charge to profit/(loss) before taxation |
(1.8) |
(1.5) |
|
Other comprehensive income/(expense) |
|
|
|
Net actuarial loss |
(5.6) |
(14.1) |
|
|
|
|
|
|
|
2024 |
2023 |
|
|
£m |
£m |
Balance sheet |
|
|
|
Defined benefit obligations |
|
|
|
|
|
(101.6) |
(98.1) |
Other - unfunded |
|
(12.0) |
(12.4) |
|
|
(113.6) |
(110.5) |
Fair value of scheme assets |
|
|
|
|
|
74.1 |
73.4 |
Other - unfunded |
|
10.1 |
10.5 |
Deficit on the schemes |
|
(29.4) |
(26.6) |
For accounting purposes, the
Impact of NTL vs Virgin Media case, 25 July 2024
In June 2023, the High Court judged that amendments made to the Virgin Media scheme were invalid because the scheme's actuary did not provide the associated Section 37 certificate. The High Court's decision has wide-ranging implications, affecting other schemes that were contracted out on a salary-related basis and made amendments between April 1997 and April 2016. The Fund was contracted out until 29 February 2016 and amendments were made during the relevant period. As such, the ruling could have implications for the Company. Following the Court of Appeal upholding the 2023 High Court ruling on 25 July 2024, the Trustees initiated the process of investigating any potential impact for the Fund.
As the detailed investigation is in progress, the Company considers that the amount of any potential impact on the defined benefit obligation cannot be confirmed and/or measured with sufficient reliability at the 2024 year end. We are therefore disclosing this issue as a potential contingent liability at 30 June 2024 and will review again in 2025 based on the findings of the detailed investigation.
14. Provisions
|
Reorganisation |
|
|
Independent |
|
|
|
and |
Leasehold |
Environmental |
business |
|
|
|
restructuring |
dilapidations |
remediation |
review |
Other |
Total |
|
£m |
£m |
£m |
£m |
£m |
£m |
At 1 July 2022 |
0.8 |
1.5 |
2.7 |
1.7 |
0.5 |
7.2 |
(Released)/charged to profit or loss |
(0.1) |
0.2 |
0.7 |
1.0 |
- |
1.8 |
Currency translation differences |
- |
- |
0.1 |
- |
- |
0.1 |
Utilisation |
(0.4) |
- |
(0.5) |
(2.6) |
(0.3) |
(3.8) |
At 30 June 2023 |
0.3 |
1.7 |
3.0 |
0.1 |
0.2 |
5.3 |
(Released)/charged to profit or loss |
- |
(0.1) |
0.8 |
3.8 |
- |
4.5 |
Currency translation differences |
- |
- |
(0.2) |
- |
- |
(0.2) |
Utilisation |
- |
(1.3) |
(0.8) |
(3.9) |
- |
(6.0) |
At 30 June 2024 |
0.3 |
0.3 |
2.8 |
- |
0.2 |
3.6 |
Analysis of provisions:
|
2024 |
2023 |
|
£m |
£m |
Current |
2.2 |
2.7 |
Non-current |
1.4 |
2.6 |
Total |
3.6 |
5.3 |
The closing provision for reorganisation and restructuring relates to the Group's logistics transformation programme only. The provision is expected to be fully utilised within twelve months of the balance sheet date.
The leasehold dilapidations provision relates to costs expected to be incurred to restore leased properties to their original condition at the end of the respective lease terms. A provision has been recognised for the present value of the estimated expenditure required to undertake restoration works. Amounts will be utilised as the respective leases end and restoration works are carried out, within a period of approximately twelve months.
The environmental remediation provision relates to historical environmental contamination at a site in
The independent business review provision related to the amendment of the Group's revolving credit facility and banking covenants. The provision for consultancy support for the independent business review programme was utilised in the year.
Other provisions of £0.2 million are expected to be settled within a period of approximately three years.
The amount and timing of all cash flows related to the provisions are reasonably certain.
15. Exchange rates
The principal exchange rates used to translate the results, assets and liabilities and cash flows of the Group's foreign operations into Sterling were as follows:
|
Average rate |
Closing rate |
||
|
2024 |
2023 |
2024 |
2023 |
Euro |
1.16 |
1.15 |
1.18 |
1.17 |
US Dollar |
1.26 |
1.20 |
1.26 |
1.27 |
|
8.68 |
8.56 |
8.81 |
8.68 |
Polish Zloty |
5.11 |
5.38 |
5.09 |
5.17 |
Czech Koruna |
28.72 |
27.72 |
29.57 |
27.66 |
Hungarian Forint |
449.75 |
453.41 |
466.81 |
433.34 |
Malaysian Ringgit |
5.91 |
5.41 |
5.97 |
5.91 |
Australian Dollar |
1.92 |
1.79 |
1.90 |
1.91 |
16. Share capital
|
Authorised, allotted and fully paid |
|
|
Number |
£m |
Ordinary shares of 10 pence each |
|
|
At 1 July 2022, 30 June 2023 and 30 June 2024 |
174,057,328 |
17.4 |
Ordinary shares carry full voting rights and ordinary shareholders are entitled to attend Company meetings and to receive payments to shareholders.
17. Related party transactions
Transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and therefore are not required to be disclosed in these financial statements. Details of transactions between the Group and other related parties are disclosed below.
Post-employment benefit plans
Contributions amounting to £7.0 million (2023: £6.5m) were payable by the Group to pension schemes established for the benefit of its employees. At 30 June 2024, £0.5 million (2023: £0.6m) in respect of contributions due was included in other payables.
Compensation of key management personnel
For the purposes of these disclosures, the Group regards its key management personnel as the Directors and certain members of the senior executive team.
Compensation relating to key management personnel in respect of their services to the Group was as follows:
|
2024 |
2023 |
|
£m |
£m |
Short-term employee benefits |
3.8 |
2.5 |
Post-employment benefits |
0.1 |
0.1 |
Share-based payments |
1.2 |
0.3 |
Total |
5.1 |
2.9 |
18. Key performance indicators (KPIs)
Management uses a number of KPIs to measure the Group's performance and progress against its strategic objectives. The most important of these are noted and defined below:
Financial:
· Revenue: Revenue from contracts with customers from the sale of goods is measured at the invoiced amount, net of sales rebates, discounts, value added tax and other sales taxes.
· Transformation benefits: Net profit benefit achieved from the implementation of the Transformation programmes.
· Adjusted EBITDA margin: The calculation of adjusted EBITDA, which when divided by revenue gives this EBITDA margin, is defined in note 19.
· Free cash flow increase: Free cash flow is defined as cash generated before exceptional items.
· Adjusted ROCE: Total adjusted operating profit divided by the average of opening and closing capital employed. Capital employed is defined as the total of goodwill and other intangible assets, property, plant and equipment, right-of-use assets, inventories, and trade and other receivables, less trade and other payables.
Non-financial:
· Lost time incident frequency rate: The number of lost time incidents x 100,000 divided by total number of person-hours worked.
· Customer service level: The volume of products delivered in the correct volumes and within requested timescales, as a percentage of total volumes ordered by customers.
19. Additional information
Alternative performance measures
The performance of the Group is assessed using a variety of adjusted measures that are not defined under IFRS and are therefore termed non-GAAP measures. A reconciliation for each non-GAAP measure to the most directly comparable IFRS measure is set out below.
Adjusted operating profit and adjusted EBITDA
Adjusted EBITDA means adjusted operating profit before depreciation. A reconciliation between adjusted operating profit, adjusted EBITDA and the Group's reported statutory operating profit is shown below:
|
2024 |
2023 |
|
£m |
£m |
Operating profit |
64.3 |
10.3 |
Exceptional items in operating profit (note 4) |
0.8 |
0.8 |
Amortisation of intangibles (note 10) |
2.0 |
2.4 |
Adjusted operating profit |
67.1 |
13.5 |
Depreciation of property, plant and equipment (note 10) |
16.3 |
16.8 |
Depreciation of right-of-use assets (note 10) |
3.7 |
3.8 |
Adjusted EBITDA |
87.1 |
34.1 |
Adjusted profit before tax and adjusted profit for the year
Adjusted profit before tax is based on adjusted operating profit less adjusted finance costs. Adjusted profit for the year is based on adjusted profit before tax less taxation relating to non-adjusting items. The table below reconciles adjusted profit before tax to the Group's reported profit/(loss) before tax.
|
2024 |
2023 |
|
£m |
£m |
Profit/(loss) before tax |
46.5 |
(15.1) |
Exceptional items (note 4) |
4.6 |
13.0 |
Amortisation of intangibles (note 10) |
2.0 |
2.4 |
Adjusted profit before tax |
53.1 |
0.3 |
Taxation (note 7) |
(14.8) |
(0.3) |
Adjusted profit for the year |
38.3 |
- |
Adjusted earnings/(loss) per share
Adjusted earning/(loss) per share is based on the Group's profit/(loss) for the year adjusted for the items excluded from operating profit in arriving at adjusted operating profit, and the tax relating to those items.
Free cash flow and cash conversion %
Free cash flow is one of the Group's KPIs by which our financial performance is measured. It is primarily a liquidity measure; however free cash flow and cash conversion % are also important indicators of overall operational performance as they reflect the cash generated from operations. Free cash flow is defined as cash generated before exceptional items. Cash conversion % is defined as free cash flow as a percentage of adjusted EBITDA (applicable only when adjusted EBITDA is positive). A reconciliation from net cash generated from operating activities, the most directly comparable IFRS measure to free cash flow, is set out as follows:
|
2024 |
2023 |
|
£m |
£m |
Net cash generated from operating activities |
59.2 |
11.1 |
Add back: |
|
|
Taxation paid |
5.1 |
1.8 |
Interest paid |
10.9 |
11.4 |
Refinancing costs paid |
3.8 |
12.3 |
Cash outflow in respect of exceptional items |
2.7 |
1.4 |
Free cash flow |
81.7 |
38.0 |
|
|
|
Adjusted EBITDA |
87.1 |
34.1 |
|
|
|
Cash conversion % |
94% |
111% |
Adjusted return on capital employed (ROCE)
Adjusted ROCE serves as an indicator of how efficiently we generate returns from the capital invested in the business. It is a Group KPI that allows management to evaluate the outcome of investment decisions. Adjusted ROCE is defined as total adjusted operating profit divided by the average of opening and closing capital employed. Capital employed is defined as the total of goodwill and other intangible assets, property, plant and equipment, right-of-use assets, inventories, trade and other receivables less trade and other payables. There is no equivalent statutory measure within IFRS. Adjusted ROCE is calculated as follows:
|
2024 |
2023 |
2022 |
|
£m |
£m |
£m |
|
19.7 |
19.7 |
19.7 |
Other intangible assets (note 10) |
9.8 |
6.5 |
7.3 |
Property, plant and equipment (note 10) |
114.4 |
117.8 |
122.9 |
Right-of-use assets (note 10) |
8.1 |
8.5 |
11.3 |
Inventories |
119.6 |
121.5 |
118.9 |
Trade and other receivables |
148.8 |
145.7 |
145.4 |
Trade and other payables |
(220.1) |
(219.6) |
(206.9) |
Capital employed |
200.3 |
200.1 |
218.6 |
Average of opening and closing capital employed |
200.2 |
209.4 |
214.0 |
Adjusted operating profit/(loss) |
67.1 |
13.5 |
(24.5) |
Adjusted ROCE % |
33.5% |
6.4% |
(11.4)% |
Liquidity
Liquidity means, at any time, without double counting, the aggregate of:
(a) cash;
(b) cash equivalents;
(c) the available facility at that time, which comprises the headroom available in the RCF and other committed facilities; and
(d) the aggregate amount available for drawing under uncommitted facilities.
The Company uses this measure to manage cash flow and ensure that financial covenants are adhered to.
|
|
2024 |
2023 |
|
|
£m |
£m |
Cash and cash equivalents |
|
9.3 |
1.6 |
RCF headroom |
|
82.9 |
40.0 |
Other committed facilities headroom |
|
- |
17.5 |
Uncommitted facilities |
|
6.1 |
0.2 |
Liquidity |
|
98.3 |
59.3 |
Net debt
Net debt consists of cash and cash equivalents, overdrafts, bank and other loans and lease liabilities.
Net debt is a key indicator used by management to assess the Group's indebtedness and overall balance sheet strength.
Net debt is an alternative performance measure as it is not defined in IFRS. A reconciliation from loans and other borrowings, lease liabilities and cash and cash equivalents, the most directly comparable IFRS measures to net debt is set out below:
|
2024 |
2023 |
|
£m |
£m |
Current assets |
|
|
Cash and cash equivalents |
9.3 |
1.6 |
Current liabilities |
|
|
Borrowings |
(67.4) |
(49.3) |
Lease liabilities |
(3.1) |
(3.5) |
|
(70.5) |
(52.8) |
Non-current liabilities |
|
|
Borrowings |
(65.0) |
(109.8) |
Lease liabilities |
(5.3) |
(5.5) |
|
(70.3) |
(115.3) |
|
|
|
Net debt |
(131.5) |
(166.5) |
Net debt cover ratio (banking basis)
The net debt cover ratio (banking basis) is an indicator of the Company's ability to repay its debts. Under the RCF it is calculated as net debt (as defined in the RCF agreement) divided by EBITDA (as defined in the RCF agreement). The Company uses the ratio to ensure compliance with the RCF financial covenants that will be tested quarterly from 30 September 2024.
|
2024 |
2023 |
|
£m |
£m |
Net debt (as defined above) |
(131.5) |
(166.5) |
Invoice discounting facilities |
55.6 |
48.7 |
B Shares (note 9) |
(0.7) |
(0.7) |
Lease liabilities |
8.4 |
9.0 |
Adjustment for average exchange rates |
(0.9) |
(0.7) |
Net debt banking basis (as defined in the RCF agreement) |
(69.1) |
(110.2) |
Adjusted EBITDA |
87.1 |
34.1 |
Net interest cost on defined benefit obligation (note 6) |
(1.2) |
(0.5) |
Loss on disposal of property, plant and equipment (note 10) |
1.4 |
0.3 |
Lease payments |
4.5 |
4.3 |
EBITDA banking basis (as defined in the RCF agreement) |
91.8 |
38.2 |
Net debt cover ratio (banking basis) |
0.8x |
2.9x |
Interest cover ratio (banking basis)
The interest cover ratio (banking basis) is a measure of the Company's ability to pay the interest on its outstanding debts. Under the RCF it is calculated as EBITDA (as defined in the RCF agreement) divided by adjusted finance costs (excluding net interest cost on defined benefit obligation). The Company uses the ratio to ensure compliance with the RCF financial covenants that will be tested quarterly from 30 September 2024.
|
2024 |
2023 |
|
£m |
£m |
EBITDA banking basis (as defined in the RCF agreement) |
91.8 |
38.2 |
Lease payments |
(4.5) |
(4.3) |
EBITDA banking basis (as defined in the RCF agreement) |
87.3 |
33.9 |
|
|
|
Adjusted finance costs excluding net interest cost on defined benefit obligation (note 6) |
12.8 |
12.7 |
|
|
|
Interest cover ratio (banking basis) |
6.8x |
2.7x |
Annual General Meeting
The Annual General Meeting will be held on 12 November 2024.
Annual Report and Accounts
The Annual Report and Accounts will be published on the