CRAWSHAW GROUP PLC Interim Results 6 months to 31 July 2013 Company Number 04755803 Registered Office: Unit 16 Bradmarsh Business Park, Bow Bridge Close, Rotherham, S60 1BY 1
CHAIRMAN'S STATEMENT Highlights Like for Like (LFL) sales up 5% in the 6 months to the end of July (2012 : +4%). Overall sales have increased to 9.8m (2012 : 9.3m). Gross profit increased 6% to 4.3m (2012 : 4.1m). Gross margin up at 43.9% (2012 : 43.6%). EBITDA significantly improved at 0.5m (2012 : 0.3m). PBT up 3 fold at 0.3m (2012 : 0.1m) Earnings per share up to 0.473p (2012: 0.155p) The various measures being taken by management to improve our performance continue to have a positive impact on trading, helped by good BBQ weather in July. LFL sales are up 5% in the half year to 31 st July, 2013 as compared to the same period the previous year. In addition, total sales for the first half have increased to 9.8m (2012 : 9.3m). Gross Profit has increased by 6% to 4.3m (2012 : 4.1m) and I am encouraged that there have been further improvements in gross margin to 43.9% (2012 : 43.6%) in the 6 months to 31 st July. Overhead expenditure continues to be controlled well, remaining relatively flat in the period at 4.0m (2012 : 4.0m) with just a 1% increase in total costs as compared to the same period in the previous year. This change is wholly related to an increase in staff hours within our shops as the management team implement measures to further drive sales. In the 6 months to 31 st July 2013 EBITDA increased to 0.5m (2012 : 0.3m) and profit before tax rose 3 fold to 0.3m (2012 : 0.1m). Earnings per share rose to 0.473p (2012 : 0.155p). Cash generated from operating activities after movements in working capital in the period was 0.5m (2012 0.2m). This is wholly offset by the partial mortgage repayment of 0.3m, the payment of our maiden dividend ( 0.1m) and capital expenditure ( 0.1m). I am pleased to report that our balance sheet is now cash positive with the mortgage of 0.54m being more than offset by our cash balances of 0.88m and therefore net cash is 0.34m (31 st January 2013 : nil). Now our recovery in trading performance has become established we are giving consideration to re-starting our expansion program, albeit on a cautious basis, and will report further in due course. We are encouraged with current trading, like for like sales for the first 8 weeks of the second half are up 10% with gross margin in line with first half performance. 2
Following on from our maiden dividend announced in April of this year we are delighted to announce an interim dividend, of 0.09p per share, as a measure of our confidence in the business going forward. The dividend will be paid on 25 th October, 2013 to shareholders on the register on 4 th October, 2013. The ex-dividend date will be 2 nd October, 2013. Richard Rose Chairman 26 September, 2013 3
Consolidated Income Statement For the six months ended 31 July 2013 Unaudited Audited Unaudited 6 Months 12 Months 6 Months 31.7.13 31.1.13 31.7.12 Notes Revenue 2 9,806,342 18,778,427 9,315,600 Cost of sales (5,503,013) (10,576,493) (5,258,963) Gross profit 4,303,329 8,201,934 4,056,637 Other operating income 9,350 20,790 10,210 Administrative expenses (4,009,089) (7,970,906) (3,967,336) Operating Profit 303,590 251,818 99,511 Analysed as: EBITDA 488,776 652,544 291,018 Impairment,depreciation and amortisation (185,186) (400,726) (191,507) Operating profit 303,590 251,818 99,511 Finance income 293 2419 5 Finance expenses (8,362) (17,723) (9,134) Net Finance Expense (8,069) (15,304) (9,129) Share of profit/(loss)of equity accounted investees (net of tax) 3,750 14,350 6,350 Profit before income tax 299,271 250,864 96,732 Income tax credit/(expense) 3 (25,894) (72,388) (6,840) Total recognised income for the period 5 273,377 178,476 89,892 Attributable to: Equity holders of the Company 273,377 178,476 89,892 Basic earnings per ordinary share 4 0.473p 0.309p 0.155p Diluted earnings per ordinary share 4 0.473p 0.309p 0.155p 4
Consolidated Balance Sheet As at 31 July 2013 Unaudited Audited Unaudited 31.7.13 31.1.13 31.7.12 Notes Property, plant and equipment 4,172,763 4,280,137 4,411,886 Intangible assets - goodwill and related acquisition intangibles 7,504,024 7,521,364 7,538,704 Investment in equity accounted investees 98,100 94,350 101,195 Total Non Current Assets 11,774,887 11,895,851 12,051,785 Inventories 541,500 507,420 459,512 Trade and other receivables 226,604 289,738 265,491 Cash and cash equivalents 878,946 850,677 654,702 Total Current Assets 1,647,050 1,647,835 1,379,705 Total Assets 13,421,937 13,543,686 13,431,490 Share capital 6 2,890,940 2,890,940 2,890,940 Share premium 6,317,618 6,317,618 6,317,618 Reverse acquisition reserve 446,563 446,563 446,563 Retained earnings 624,215 466,476 377,892 Total Shareholders Equity 5 10,279,336 10,121,597 10,033,013 Other payables 239,475 259,212 278,948 Deferred tax liabilities 410,313 457,218 402,756 Interest bearing loans and borrowings 360,000 - - Total Non Current Liabilities 1,009,788 716,430 681,704 Trade and other payables 1,952,813 1,865,659 1,876,773 Interest bearing loans and borrowings 180,000 840,000 840,000 Total Current Liabilities 2,132,813 2,705,659 2,716,773 Total Liabilities 3,142,601 3,422,089 3,398,477 Total Equity and Liabilities 13,421,937 13,543,686 13,431,490 5
Consolidated statement of changes in shareholders equity For the six months ended 31 July 2013 Share Capital Share Premium Rev Acq Reserve Retained Earnings Total Equity Balance at 1 February 2012 2,890,940 6,317,618 446,563 288,000 9,943,121 Profit for the Period - - - 89,892 89,892 Balance at 31 July 2012 2,890,940 6,317,618 446,563 377,892 10,033,013 Profit for the period - - - 88,584 88,584 Balance at 31 January 2013 2,890,940 6,317,618 446,563 466,476 10,121,597 Profit for the period - - - 273,377 273,377 Dividend on Equity Shares - - - (115,638) (115,638) Balance at 31 July 2013 2,890,940 6,317,618 446,563 624,215 10,279,336 6
Consolidated statement of cash flows For the six months ended 31 July 2013 Unaudited Audited Unaudited 6 Months 12 Months 6 Months 31.7.13 31.1.13 31.7.12 Cash flows from operating activities Profit for the period 299,271 178,476 89,892 Adjustments for: Depreciation and amortization 185,186 390,913 191,507 Loss on sale of property, plant and equipment 1,012 9,813 5,295 Net financial charges 8,087 15,304 9,129 Share of (profit) of equity accounted investees (net of tax) (3,750) (14,350) (6,350) Taxation - 72,388 6,840 Operating cash flow before movements in working capital 489,806 652,544 296,313 Movement in trade and other receivables 63,134 16,806 41,053 Movement in trade and other payables (5,378) (205,033) (208,095) Movement in inventories (34,080) 3,088 50,996 Tax Paid - (45,000) - Net cash (used in)/ generated from operating activities 513,483 422,405 180,267 Cash flows from investing activities Purchase of property, plant and equipment (65,656) (186,572) (130,281) Proceeds from sale of property, plant & equipment 4,167 12,208 10,750 Received from equity accounted investees - 14,845 - Interest received 274 2,419 - Interest paid (8,361) (17,723) (9,129) Net cash (used in)/ generated by investing activities (69,576) (174,823) (128,660) 7
Cash flows from financing activities Mortgage Loan Repaid (300,000) - - Dividends Paid (115,638) - - Net cash (used in)/ generated from financing activities (415,638)) - - Net change in cash and cash equivalents 28,269 247,582 51,607 Cash and cash equivalents at start of period 850,677 603,095 603,095 Cash and cash equivalents at end of period 878,946 850,677 654,702 8
Notes to the consolidated financial statements 1. BASIS OF PREPARATION Reporting Entity Crawshaw Group Plc (the Company ) is a company incorporated and domiciled in the UK. The condensed consolidated interim financial statements of the Company as at and for the six months ended 31 July 2013 comprise the Company and its subsidiaries (together referred to as the Group ) and equity account the Group s interest in jointly controlled entities. Basis of Preparation These condensed consolidated interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting, as adopted by the EU and do not include all of the information required for full annual financial statements. The comparative figures for the financial year ended 31 January 2013 are not the Company's statutory accounts for that financial year. Those accounts have been reported on by the Company's auditors and delivered to the registrar of companies. The report of the auditors was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498(2) or (3) of the Companies Act 2006. The condensed consolidated interim financial statements have not been audited but have been reviewed by the Company s auditors. Their review report for the 6 month period ended 31 July 2013 is set out on page 12. These condensed consolidated interim financial statements were approved by the Board of Directors on 26th September, 2013. Significant Accounting Policies The accounting policies applied are consistent with those of the annual financial statements for the year ended 31 January 2013, as described in those annual financial statements, which were prepared in accordance with IFRS as adopted by the EU. Significant Judgements, Key Assumptions and Estimation Uncertainty The preparation of the condensed consolidated interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and other factors that are believed to be reasonable at the time the estimate is made. Actual results may differ from these estimates. 9
In preparing these condensed consolidated interim financial statements, 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 as at and for the year ended 31 January 2013. Going Concern The Group has in place borrowing facilities up to a maximum of 790,000. They consist of a mortgage of 540,000 and a working capital overdraft facility of 250,000. These facilities are not subject to financial performance covenants, however, overdraft facilities can be withdrawn by the bank at any time. The overdraft facility is open ended but renegotiated on an annual basis, the next review being due in April 2014. The mortgage was renewed in May 2013. The Directors have reviewed the banking facilities available to the Group plus the profit and cash forecasts of the Group with appropriate sensitivities around operational performance. The Directors have concluded that the Group will have sufficient cash to meet its obligations and to pursue its existing strategy. Accordingly the Directors consider that these statements should be prepared on a going concern basis. Basis of Consolidation The consolidated financial information includes the financial information of the Company and its subsidiary undertakings made up to 31 July 2013 (together referred to as the Group ). 2. REVENUE The Directors have undertaken a review of the Group's continuing operations and their associated business risks. The Directors consider that the continuing operations represent one product offering with similar risks and rewards and should be reported as a single business segment in line with the Group s internal reporting framework. All revenue received during the period was received from customers within the United Kingdom. Unaudited Audited Unaudited 6 Months 12 Months 6 Months 3. INCOME TAX (CREDIT)/EXPENSE 31.7.13 31.1.13 31.7.12 The income tax expense is based on the estimated effective rate of taxation on trading for the period and represents: Current tax 72,799 94,456 39,068 Adjustments for prior year - (44,303) - Sub Total 72,799 50,153 39,068 Deferred tax: Origination and reversal of timing differences 12,735 (5,514) 2,571 Adjustments for prior year - 44,000 - Effect of rate change (59,640) (16,251) (34,799) Sub Total (46,905) 22,235 (32,228) Total tax (credit)/expense 25,894 72,388 6,840 10
4. EARNINGS PER ORDINARY SHARE Basic earnings per ordinary share is calculated by dividing the earnings attributable to the ordinary shareholders by the weighted average number of ordinary shares outstanding during the period of 57,818,801 (31/1/13: 57,818,801) (31/07/12: 57,818,801). Diluted EPS is calculated by dividing the profit for the year attributable to the ordinary shareholders by the weighted average number of ordinary shares in issue adjusted to assume conversion of all potentially dilutive ordinary shares from the start of the year,giving a figure of 57,818,801 (31/1/13:57,818,801) (31/7/12: 57,818,801). 5. CAPITAL AND RESERVES Share Share Rev. Acq. Retained Total Capital Premium Reserve Earnings Equity Balance at 1 February 2012 2,890,940 6,317,618 446,563 288,000 9,943,121 Profit for the period - - - 178,476 178,476 Balance at 31 January 2013 2,890,940 6,317,618 446,563 466,476 10,121,597 Profit for the period - - - 273,377 273,377 Dividend on Equity Shares - - - (115,638) (115,638) Balance at 31 July 2013 2,890,940 6,317,618 446,563 624,215 10,279,336 6. SHARE CAPITAL 31.7.13 31.1.13 31.7.12 Authorised 96,678,257 ordinary shares of 5p each 4,833,913 4,833,913 4,833,913 Allotted, called up and fully paid 57,818,801 ordinary shares of 5p each 2,890,940 2,890,940 2,890,940 7. RELATED PARTY TRANSACTIONS Crawshaw Butchers Limited, a subsidiary of Crawshaw Group Plc, holds a 50% share in a partnership which trades under the name of RGV Refrigeration. The operations of the partnership comprise of the maintenance and repair of refrigeration machinery for a variety of customers. 11
INDEPENDENT REVIEW REPORT TO CRAWSHAW GROUP PLC Introduction We have been engaged by the company to review the condensed set of financial statements in the halfyearly report for the six months ended 31 July 2013 which comprises the Condensed Consolidated Statement of Comprehensive Income, Condensed Consolidated Balance Sheet, Condensed Consolidated Statement of Changes in Shareholders Equity, Condensed Consolidated Cash Flow Statement and the related explanatory notes. We have read the other information contained in the half-yearly report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements. This report is made solely to the company in accordance with the terms of our engagement. Our review has been undertaken so that we might state to the company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company for our review work, for this report, or for the conclusions we have reached. Directors' responsibilities The half-yearly report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly report in accordance with the AIM Rules. As disclosed in note 1, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the EU. The condensed set of financial statements included in this half-yearly report has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU. Our responsibility Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly report based on our review. Scope of review We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for use in the UK. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. 12
Conclusion Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly report for the six months ended 31 July 2013 is not prepared, in all material respects, in accordance with IAS 34 as adopted by the EU and the AIM Rules. Jeremy Gledhill for and on behalf of KPMG Audit Plc Chartered Accountants 1 The Embankment Neville Street Leeds LS1 4DW 26th September, 2013 13
Directors and Advisors Directors R S Rose K P Boyd L J Sherratt C B Crawshaw M Naughton-Rumbo Company Secretary L J Sherratt Company Number 04755803 Registered Office Unit 16 Bradmarsh Business Park Bow Bridge Close Rotherham South Yorkshire S60 1BY Auditors KPMG Audit Plc 1 The Embankment Neville Street Leeds LS1 4DW Bankers Royal Bank of Scotland plc Yorkshire Corporate Banking 3rd Floor 2 Whitehall Quay Leeds LS1 4HR Nominated Adviser and Broker W H Ireland Limited 11 St James Square Manchester M2 6WH Registrars and Receiving Agents Capita Registrars The Registry 34 Beckenham Road Beckenham Kent BR3 4TU Solicitors Atticus Legal Castlefield House Liverpool Road Castlefield Manchester M3 4SB 14