TIDMLIKE
RNS Number : 5067Z
Likewise Group PLC
16 May 2023
16 May 2023
Likewise Group plc
("Likewise" or the "Group")
Audited Final Results for the year ended 31 December 2022
104.4% sales growth and underlying profit increased 84.8%
Likewise Group plc (AIM:LIKE), the fast growing UK floor
coverings distributor, announces its audited Final Results for the
year ended 31 December 2022 ("FY22" or the "Period").
FY22 Summary Highlights
-- Sales increased 104.4% to GBP123.6 million (FY21: GBP60.5 million)
-- Underlying profit before tax increased 84.8% to GBP2.56 million (FY21: GBP1.38 million)
-- Proposed maiden final dividend of 0.2 pence per ordinary share
-- Net assets increased to GBP39.1 million (FY21: GBP22.4 million)
-- Net debt as at 31 December 2022 was GBP0.1 million (FY21: Net cash of GBP4.3 million)
-- Gross cash was GBP5.9 million as at 31 December 2022 (FY21: GBP8.4 million)
-- Distribution capability increased to c.15 million cubic feet (FY21: c.8 million cubic feet)
-- Continued investment into Sales and Marketing initiatives
Chairman and Chief Executive Statement
Likewise is pleased to announce that total Revenue for year
ending 31 December 2022 was GBP123.6 million, an increase of 104.4%
on the previous year.
This was a combination of organic growth of 25.7% and the
contribution of the two acquisitions during 2022, Valley Wholesale
Carpets Limited ("Valley") and Delta Carpets Limited ("Delta").
Total Revenue for the first four months of 2023 has shown a
further increase of 17.8% over the corresponding period last year,
reflecting strong performance against macro-economic headwinds.
Underlying Profit Before Tax for 2022 is GBP2.56 million an
increase of 84.8% on the previous year.
The Group has developed a strong Balance Sheet with Net Assets
of GBP39.1 million including Freehold Property of GBP22.3 million
as at 31 December 2022.
The Group is now clearly established as a leading company in the
UK floor covering industry and is well on target to achieve its
medium-term targets.
The organic growth of the Likewise Branded Businesses of 25.7%
in 2022, followed by a further 23.5% in the first four months of
2023, has been achieved through a significant increase in market
presence through substantial investment in Point of Sales Displays
and Sampling, combined with the ongoing development of Sales Teams
throughout the UK.
This has also culminated in the number of Active Customer
Accounts increasing by 27.1%. Furthermore, the Business to Business
Website is being utilised by customers placing orders at any
time.
The acquisition of Valley in January 2022 was a very important
step for the Group. Valley performed particularly well during the
year and is an important contributor to profitability and cash
flow. Ongoing investment in Erith, the extension to the Derby
Distribution Centre and commencing operations from the previously
unused Newport Distribution Centre, will all contribute to the
ongoing development of Valley as the geographical reach extends to
South Wales and the South West of England.
To support the Sales Development in the Likewise Branded
Businesses there has been significant investment over the last two
years in the distribution infrastructure. In January 2021, the
Distribution Hub in Leeds was established to provide logistics
support to all of Likewise Floors.
In January 2022, Likewise North East moved into larger premises
in Newcastle. During H2 2021 the Group took possession of the
Birmingham Distribution Hub which became fully operational,
creating Likewise Midlands during 2022. In July 2022 Likewise South
was established in Newbury.
Investment in the distribution infrastructure has continued into
the current year as Likewise London and Floors by Lewis Abbott
moved into a much improved facility in Sidcup in January 2023.
Additionally, Likewise Scotland is moving into a new High Bay
Distribution Hub during June 2023 which will significantly enlarge
the capacity for both Scotland and England.
Focus continues to be on relocating A&A in Manchester.
Whilst this has been ongoing for some time, we are optimistic of
finding a suitable location for the business to relocate to. This
is the final piece in this stage of the Group's logistics
development.
With the extensive investment above, the Group has created the
logistics capability to double its current cutting capacity for
Carpet, Residential Vinyl and Artificial Grass. This is consistent
with the Group's aspirations to create a business with Revenue well
in excess of GBP200 million.
As previously stated, Likewise has recently become a key funding
partner of Carpet Recycling UK, reflecting the Group's contribution
to the floor covering industry combined with the wider
environmental responsibilities. The Group is also investing in
initiatives to recycle Cardboard and Polythene in addition to 73%
of the Company's fleet of cars being Electric or Hybrid. The Group
will continue to examine opportunities to improve its ESG
credentials.
Dividend
The Board proposes a Final Dividend payment of 0.2 pence per
ordinary share. This is consistent with the previous 2022 Interim
Dividend, which as previously announced, was reflective of the
financial performance in 2021. Shareholders can also take advantage
of the Dividend Reinvestment Plan ("DRIP") by registering their
intentions with the Company's registrar by 16 June 2023.
The final dividend, if approved by shareholders at the AGM, will
be paid on 7 July 2023 to shareholders on the register at the close
of business on 2 June 2023, the ex-dividend date being 1 June
2023.
Outlook
The Group has established a comprehensive infrastructure over
the last two years and, with the ongoing investment in Sales and
Marketing, is well placed to continue to increase market share.
This has been clearly evident since 2020 and continues into
2023.
The first four months of 2023 have been positive and the Board
is confident that the experienced Management, combined with strong
Sales Teams and all our Staff, will contribute to the ongoing
development and success of the Group. Revenue for the first four
months of 2023 has shown a further increase of 17.8% over the
corresponding period last year, and the Group remains in line with
the current market consensus.
Tony Brewer, Chief Executive of Likewise Group plc, said:
"The Group has made a positive start to the first four months of
2023 and in market conditions which continue to be challenging, has
undoubtedly gained market share.
This has been achieved through continually increasing market
presence and the success of our experienced Sales Teams throughout
the UK, supported by the logistics infrastructure being
established.
We would like to thank all of our Suppliers, Customers,
Management, Staff and Shareholders for their ongoing support and
huge contribution to the ongoing development of Likewise.
We continue to be very optimistic in achieving our medium-term
objectives."
For further information, please contact:
Likewise Group plc Tel: 0121 817
Tony Brewer, Chief Executive 2900
Roy Povey, Chief Financial Officer
Zeus (Nominated Adviser & Joint Broker) Tel: 0203 829
Jordan Warburton / David Foreman / James Edis 5000
(Investment Banking)
Dominic King (Corporate Broking)
Ravenscroft Consultancy & Listing Services Limited Tel: 01481
(Joint Broker) 732746
Semelia Hamon (Corporate Finance)
Novella Communications (Financial PR) Tel: 0203 151
Claire de Groot / Tim Robertson 7008
CAUTIONARY STATEMENT
Certain statements included or incorporated by reference within
this announcement may constitute "forward-looking statements" in
respect of the Group's operations, performance, prospects and/or
financial condition. Forward-looking statements are sometimes, but
not always, identified by their use of a date in the future or such
words and words of similar meaning as "anticipates", "aims", "due",
"could", "may", "will", "should", "expects", "believes", "intends",
"plans", "potential", "targets", "goal" or "estimates". By their
nature, forward-looking statements involve a number of risks,
uncertainties and assumptions and actual results or events may
differ materially from those expressed or implied by those
statements. Accordingly, no assurance can be given that any
particular expectation will be met and reliance should not be
placed on any forward-looking statement. Additionally,
forward-looking statements regarding past trends or activities
should not be taken as a representation that such trends or
activities will continue in the future. No responsibility or
obligation is accepted to update or revise any forward-looking
statement resulting from new information, future events or
otherwise. Nothing in this announcement should be construed as a
profit forecast. This announcement does not constitute or form part
of any offer or invitation to sell, or any solicitation of any
offer to purchase any shares or other securities in the Group, nor
shall it or any part of it or the fact of its distribution form the
basis of, or be relied on in connection with, any contract or
commitment or investment decisions relating thereto, nor does it
constitute a recommendation regarding the shares or other
securities of the Group. Past performance cannot be relied upon as
a guide to future performance and persons needing advice should
consult an independent financial adviser. Statements in this
announcement reflect the knowledge and information available at the
time of its preparation.
STRATEGIC REPORT
Business Overview
Likewise Group Plc is a distributor of floorcoverings and
mattings and has the opportunity to become one of the UK's largest
distributors in this sector, utilising the expertise and industry
knowledge of the Board, Executive Board and Operational Management.
Management believe this can be achieved through a mixture of
organic growth, operational leverage and where appropriate,
acquisitions.
The Group has grown rapidly in 2022 with the addition of the
newly acquired Valley Wholesale Carpets completed in January 2022
and Delta Carpets in April 2022. The acquisition of Valley
Wholesale Carpets was a particularly important strategic step for
Likewise. Valley continues to operate from its sites in Erith,
Derby and Newport.
The acquisition of Delta Carpets in April 2022 confirmed the
Group's intention to bring bolt on opportunities into the
infrastructure being established. Having transferred to the Leeds
distribution hub, the Delta Carpets business is now fully
integrated and successfully operating as a division of Likewise
Floors.
The Group's Distribution Hubs in Glasgow, Leeds, Birmingham and
Sudbury, Manchester Distribution Centre, plus Facilities in
Newcastle, Newbury and Sidcup in addition to the Valley Network in
Erith, Derby and Newport totalling 15 million cubic feet, will
allow the Group to meet its medium-term objectives.
The Group will continue to make further investment in organic
growth through sales and marketing initiatives and development in
specific geographic locations. Acquisition opportunities will be
considered in the future if they are earnings enhancing and provide
the appropriate strategic rationale.
Trading performance
The Directors are pleased to report the Group's revenue
increased from GBP60.5m in 2021 to GBP123.6m for the year ended
December 2022.
Following the restructure of the Group at the start of 2022,
with the exception of Valley, all of the operating businesses trade
as divisions of Likewise Floors Limited. These businesses continue
to gain traction in their local markets.
Valley Wholesale Carpets Limited, acquired in January 2022, has
performed to original expectations in an undoubtedly challenging
market and we are therefore very pleased with the contribution from
Valley to sales and profitability. The Valley logistics network,
with its main distribution hub in Erith, is now enhanced by extra
storage and cutting capacity in Derby, in addition to the
previously unused centre in Newport commencing operations in
November 2022.
Likewise Floors which now trades from the national distribution
hub in Leeds is a critical part of the Group's logistics network
and continues to be a key component in supplying the wider Group.
Delta Carpets, acquired in April 2022 is now fully integrated into
the Leeds hub and is able to call upon the benefits that come with
being part of a larger business.
Likewise Midlands is now fully operational from the distribution
hub in Birmingham. From this location the Group is able to supply
both North and South, providing vital support to smaller logistics
centres. The sales team operating from Birmingham continue to
increase the Group's market presence by focusing on the key
strengths of the Group, developing strong customer relationships
and providing great products, service and value for our
customers.
Likewise South, which opened in Newbury in July 2022, continues
to grow its presence in the south of England with future
development already planned. Investment in initial start-up costs
for the business amounts to GBP0.497m in the period.
Likewise London and Floors by Lewis Abbott have now relocated to
a newly refurbished 12,000 square feet logistics centre in Sidcup.
This will enable the business to provide an improved service to
existing customers and to develop additional business with
customers in the South East of England.
A&A in Manchester continues to trade from its original
premises. The board is committed to sourcing a more suitable
distribution centre to fit with the Group's medium-term objectives
and to support the increased potential of the A&A brand.
The new facility in Glasgow for Likewise Scotland will enhance
the Group's presence in Scotland and with the committed capital
investment, the operational capacity of the Group will be greatly
enhanced. The business is expected to be fully operational from
this location from June 2023.
Overall, the Group continues to expand its presence in all
areas, both with product and geographically. The board now consider
that the logistics capability that has been created can support the
Group's medium-term aspirations to have a business with revenue in
excess of GBP200 million.
Business strategy
It is the belief of the board that value can be generated for
suppliers, customer and shareholders by creating a national
supplier and distributor of UK floorcoverings.
As with the acquisition of Valley and Delta in 2022, where the
board consider future acquisitions, they will focus around
increasing the scale and operational reach of the Group into new
regions and consolidate the Group's overall market position.
The Group has made significant progress in the last two years
through investment in the infrastructure, with new operations being
established in Leeds, Newcastle, Birmingham, Newbury and Sidcup.
The new site in Glasgow, having been completed in November 2022 is
currently being fitted out and is expected to be operational from
June 2023. Negotiations for a new development to relocate A&A
in Manchester are continuing and the board are hopeful of a
resolution in the next few months.
In conjunction with the investment in logistics capacity the
Group has also made significant progress in enlarging the sales
team and increased point of sale displays to expand and create a
much greater market presence. In addition to the normal level of
cost for sampling, the Group has recorded exceptional stand,
display and point of sale cost of GBP0.486 million in the year to
December 2022. As previously stated, the board and operational
management are very focused on delivering the appropriate return on
this investment to both secure additional profitability and
importantly further investment to accelerate future growth.
Market and competition
The floorcovering market is made up of manufacturers,
distributors, retailers and installers. It is the strategy of
Likewise to become a national distributor in this market. The UK
flooring market is worth c.GBP2 billion split between residential,
commercial, public and industrial markets. It is the strategy of
the Group to focus on the residential and commercial areas of the
market.
Key performance indicators
The Board consider the following as financial key performance
indicators (KPIs) for the Group: revenue, operating profit and
operating cash flow. The Board review these for each of the
businesses on a monthly basis. Individual subsidiaries have
additional key performance indicators specific to their operations.
Sales and margin are also monitored against budget on a daily basis
by the executive management team.
Key performance indicators were as follows:
Currency: GBPm Year ended 31 December 2022 Year ended 31 December 2021 (as restated**) Increase %
Revenue 123.6 60.5 104.4%
---------------------------- -------------------------------------------- -----------
Adjusted profit before tax 2.6 1.4** 84.8%
---------------------------- -------------------------------------------- -----------
Operating cash flow (1.3) (0.3) (342.3%)
---------------------------- -------------------------------------------- -----------
The above adjusted operating profit/(loss) before tax figure is
stated after adding back:
Currency: GBPm Year ended Year ended
31 December 2022 31 December 2021
Acquisition fees & related costs 2.3 -
------------------ ------------------
Loss from new operations* 0.5 0.7
------------------ ------------------
Exceptional investment in point of sale 0.5 -
------------------ ------------------
Amortisation of intangibles 0.4 0.3
------------------ ------------------
Share based payments 0.3 0.1
------------------ ------------------
AIM listing costs - 0.4
------------------ ------------------
Impact of IFRS 16** - 0.2
------------------ ------------------
Restructuring costs - 0.1
------------------ ------------------
*Losses from new operations relate to costs incurred in the
initial start-up phase of Likewise Midlands in 2021 and Likewise
South in 2022 whilst the business is in its initial development
phase to generate returns.
**In 2021, management considered the impact of the IFRS 16
reporting standard for leases as an adjustment required in
determining their adjusted profit before tax figure as a key
performance indicator of the business. Had the adjusted profit
before tax figure been shown consistent with the 2021 disclosure,
this would have led to a reported adjusted profit before tax of
GBP3.1m.
The Board additionally monitors the square footage of available
warehouse space as a non-financial KPI. The warehouse capacity as
at 31 December 2022 was 519,000 square feet(1) (2021 300,000 square
feet).
(1) Includes new facilities in Glasgow and Sidcup.
The following tables show a reconciliation of the adjusted
results.
Currency: GBPm 2022 2021*
Underlying Non-underlying** Total Underlying Non-underlying** Total
------------- ------------------ ------- ----------- ----------------- -------
Revenue 123.6 - 123.6 60.5 - 60.5
Cost of sales (86.7) (0.5) (87.2) (42.4) - (42.4)
Gross profit 37.0 (0.5) 36.5 18.1 - 18.1
Other operating income - - - 0.2 - 0.2
Admin costs (16.3) (2.7) (19.0) (9.5) (1.5) (11.1)
Distribution costs (17.0) - (17.0) (7.1) - (7.1)
Impairment loses on trade
receivables (0.2) - (0.2) (0.0) - (0.0)
Profit/(loss) from
operations 3.4 (2.7) 0.2 1.7 (1.5) 0.2
Finance income 0.0 - 0.0 0.0 - 0.0
Finance costs (0.8) - (0.8) (0.4) (0.1) (0.4)
Loss on revaluation - (0.8) (0.8)
------------- ------------------ ------- ----------- ----------------- -------
Profit/(loss) before tax 2.6 (3.9) (1.3) 1.4 (1.6) (0.2)
Taxation 0.6 - 0.6 0.1 - 0.1
Profit/(loss) for the year 3.1 (3.9) (0.8) 1.5 (1.6) (0.1)
------------------ -----------------
* As restated to align treatment with that of the year-end financial
statements.
**Non -- underlying values are exceptional items, which include share based payment transactions,
acquisition costs, amortisation of acquisition intangibles and strategic project costs. Adjusted
results are non -- GAAP metrics used by management and are not an IFRS disclosure. Details
of these charges can be seen in note 7 in the accounts below.
Financial Results and Dividend
The results of the Group are shown in the Consolidated Statement
of Profit or Loss and Other Comprehensive Income.
An interim dividend of 0.2 pence per ordinary share was paid on
8 July 2022 to shareholders on the register as at 6 June 2022.
Whilst this was an FY22 interim dividend, the payment reflected the
financial performance in FY21 but could not be paid as a final
dividend until the capital restructure had been completed.
The directors propose to pay a final dividend of 0.2 pence per
ordinary share in respect of the financial year ended 31 December
2022. This to be subject to shareholder approval at the forthcoming
AGM.
If approved, the total dividend payable for 2022 will be 0.4
pence per ordinary share, albeit noting the interim dividend
related to the financial performance in FY21.
Consolidated statement of profit or loss and other comprehensive
income for the year ended 31 December 2022
2022 2021
GBP GBP
Note
Revenue 5 123,642,673 60,490,559
Cost of sales (87,172,444) (42,350,337)
---------------- ----------------
Gross profit 36,470,229 18,140,222
Other operating income 6 - 212,183
Administrative expenses (18,969,610) (11,061,598)
Distribution expenses (17,038,557) (7,050,344)
Impairment losses on trade receivables (238,201) (42,241)
---------------- ----------------
Profit from operations 223,861 198,222
Finance income 5,043 173
Finance expense (796,843) (425,277)
Loss on revaluation of consideration
on acquisition (846,380) -
---------------- ----------------
Loss before tax (1,414,319) (226,882)
Taxation 11 578,015 81,459
---------------- ----------------
Loss for the year (836,304) (145,423)
Other comprehensive income:
Items that will not be reclassified
to profit or loss:
Revaluation of land and buildings 14 309,957 1,802,257
Actuarial loss on defined benefit schemes 33 (5,000) (20,000)
Deferred tax on revaluation 11 - (471,901)
304,957 1,310,356
Items that will or may be reclassified
to profit or loss:
Exchange gains/(losses) arising in relation
to translation of foreign operations 16,138 (17,222)
---------------- ----------------
Total comprehensive income (515,209) 1,147,711
================ ================
The total basic loss per share attributable to the ordinary
equity holders of the Company was 0.3p (2021 -- loss of 0.1p). The
total diluted loss per share attributable to the ordinary equity
holders of the Company was 0.3p (2021 -- loss of 0.1p).
Consolidated statement of financial position as at 31 December
2022
2022 2021
Note GBP GBP
Assets
Non--current assets
Property, plant and equipment 14 47,300,221 19,718,721
Other intangible assets 15 4,208,884 3,520,997
Goodwill 16 5,624,284 4,216,728
Trade and other receivables 19 - 136,848
------------ ------------
57,133,389 27,593,294
Current assets
Inventories 18 18,388,527 10,256,740
Trade and other receivables 19 15,573,303 9,775,075
Cash and cash equivalents 20 5,913,155 8,447,550
------------ ------------
39,874,985 28,479,365
------------ ------------
Total assets 97,008,374 56,072,659
Liabilities
Non--current liabilities
Trade and other liabilities 21 4,380,365 -
Loans and borrowings 22 20,222,050 12,129,444
Deferred tax liability 11 2,496,677 1,404,650
---------- ----------
27,099,092 13,534,094
Current liabilities
Trade and other liabilities 21 22,970,426 15,802,034
Loans and borrowings 22 7,777,512 4,179,892
Provisions 25 50,075 202,676
30,798,013 20,184,602
---------- ----------
Total liabilities 57,897,105 33,718,696
---------- ----------
Net assets 39,111,269 22,353,963
========== ==========
Share capital 28 2,438,360 1,923,742
Share premium 29 17,384,625 22,458,816
Share option reserve 34 628,454 308,776
Revaluation reserve 2,662,384 2,406,127
Foreign exchange reserve (40,487) (56,625)
Warrant reserve 128,170 128,170
Retained earnings 15,909,763 (4,815,043)
---------- -----------
Total equity 39,111,269 22,353,963
========== ===========
Consolidated statement of changes in equity for the year ended
31 December 2022
Total
attributable
Share Foreign to equity
Share Share option Revaluation exchange Warrant Retained holders
capital premium reserve reserve reserve reserve earnings of parent Total equity
GBP GBP GBP GBP GBP GBP GBP GBP GBP
At 1 January
2022 1,923,742 22,458,816 308,776 2,406,127 (56,625) 128,170 (4,815,043) 22,353,963 22,353,963
Loss for the
year - - - - - - (836,304) (836,304) (836,304)
Other
comprehensive
income
(see note 32) - - - 256,257 16,138 - 48,700 321,095 321,095
--------- ------------ ------- ----------- --------- ------- ----------- ------------ ------------
Total
comprehensive
income
for the year - - - 256,257 16,138 - (787,604) (515,209) (515,209)
--------- ------------ ------- ----------- --------- ------- ----------- ------------ ------------
Dividends - - - - - - (487,590) (487,590) (487,590)
Issue of share
capital 512,143 17,425,358 - - - - - 17,937,501 17,937,501
Shares options
exercised 2,475 22,550 - - - - - 25,025 25,025
Transfer to
retained
earnings - - - - - - 22,000,000 22,000,000 22,000,000
Reduction in
share premium - (22,000,000) - - - - - (22,000,000) (22,000,000)
Share issue
costs - (522,099) - - - - - (522,099) (522,099)
Share options - - 319,678 - - - - 319,678 319,678
--------- ------------ ------- ----------- --------- ------- ----------- ------------ ------------
Total
contributions
by
and
distributions
to owners 514,618 (5,074,191) 319,678 - - - 21,512,410 17,272,515 17,272,515
--------- ------------ ------- ----------- --------- ------- ----------- ------------ ------------
At 31 December
2022 2,438,360 17,384,625 628,454 2,662,384 (40,487) 128,170 15,909,763 39,111,269 39,111,269
========= ============ ======= =========== ========= ======= =========== ============ ============
Consolidated statement of changes in equity for the year ended
31 December 2021
Total
attributable
Share Share Foreign to equity
Share premium option Revaluation exchange Warrant Retained holders Total
capital account reserve reserve reserve reserve earnings of parent equity
GBP GBP GBP GBP GBP GBP GBP GBP GBP
At 1 January
2021 1,523,420 13,389,295 159,566 1,094,771 (39,403) 128,170 (4,668,620) 11,587,199 11,587,199
Loss for the
year - - - - - - (145,423) (145,423) (145,423)
Other
comprehensive
income (see
note 32) - - - 1,311,356 (17,222) - (1,000) 1,293,134 1,293,134
--------- ---------- ------- ----------- --------- ------- ------------ ------------ ----------
Total
comprehensive
income for
the year - - - 1,311,356 (17,222) - (146,423) 1,147,711 1,147,711
--------- ---------- ------- ----------- --------- ------- ------------ ------------ ----------
Issue of share
capital 400,000 9,600,000 - - - - - 10,000,000 10,000,000
Share options
exercised 322 2,898 - - - - - 3,220 3,220
Share issue
costs - (533,377) - - - - - (533,377) (533,377)
Share options - - 149,210 - - - - 149,210 149,210
--------- ---------- ------- ----------- --------- ------- ------------ ------------ ----------
Total
contributions
by and
distributions
to owners 400,322 9,069,521 149,210 - - - - 9,619,053 9,619,053
--------- ---------- ------- ----------- --------- ------- ------------ ------------ ----------
At 31 December
2021 1,923,742 22,458,816 308,776 2,406,127 (56,625) 128,170 (4,815,043) 22,353,963 22,353,963
========= ========== ======= =========== ========= ======= ============ ============ ==========
Consolidated statement of cash flows for the year ended 31
December 2022
2022 2021
GBP GBP
Cash flows from operating activities
Loss for the year (836,304) (145,423)
Adjustments for
Depreciation and amortisation 3,633,356 2,121,858
Impairment of property, plant and equipment - 147,988
Revaluation of consideration 846,380 -
Taxation (578,015) (81,459)
Finance income (5,043) (173)
Finance costs 796,843 425,277
Gain on sale of property, plant and equipment (35,193) (22,846)
Pension contributions (5,000) (20,000)
AIM listing costs - 352,142
Decrease in provisions (152,601) (180,046)
Share options issued 319,678 149,210
Net foreign exchange loss/(gain) 15,429 (15,575)
------------- -----------
3,999,530 2,730,953
Movements in working capital:
Increase in trade and other receivables (3,624,487) (2,132,041)
Increase in inventories (4,437,276) (2,700,934)
Increase in trade and other payables 3,249,449 1,802,049
------------- -----------
Cash used in operations (812,784) (299,973)
Corporation taxes paid (514,040) -
------------- -----------
Net cash used in operating activities (1,326,824) (299,973)
------------- -----------
Cash flows from investing activities
Acquisition of subsidiaries, net of cash acquired 37 (13,541,050) -
Purchases of property, plant and equipment (2,001,322) (1,593,269)
Proceeds from disposal of property, plant and
equipment 76,424 27,008
Deferred consideration paid - (1,480,000)
Interest received 5,043 173
------------- -----------
Net cash used in investing activities (15,460,905) (3,046,088)
------------- -----------
Cash flows from financing activities
Interest paid (225,834) (425,277)
Consideration for new shares 16,025,026 10,003,220
Costs of share issue and AIM listing (522,099) (885,519)
Repayment of lease liabilities (2,448,536) (886,625)
Increase in invoice discounting 2,029,473 1,266,279
Repayment of loans (117,106) (99,362)
Dividends paid to the holders of the parent 13 (487,590) -
Net cash from financing activities 14,253,334 8,972,716
Net cash (decrease)/increase in cash and cash
equivalents (2,534,395) 5,626,655
Cash and cash equivalents at the beginning
of year 8,447,550 2,820,895
------------- -----------
Cash and cash equivalents at the end of the
year 5,913,155 8,447,550
============= ===========
Cash and cash equivalents at 31 December 2022 of GBP5,913,155
(2021 -- GBP8,447,550) comprised of cash and cash equivalents of
GBP5,913,155 (2021 -- GBP8,447,550) less bank overdrafts of GBPNil
(2021 -- GBPNil).
Notes to the consolidated financial statements for the year
ended 31 December 2022
1. General information
The Company is a public company limited by shares, registered in
England and Wales and listed on the Alternative Investment Market
(AIM). The registered company number is 08010067 and the address of
the registered office is Unit 4 Radial Park, Radial Way, Birmingham
Business Park, Solihull, England, B37 7WN.
The principal activity of the Group is the wholesale
distribution of floorcoverings and associated products.
2. Basis of preparation
These financial statements consolidate those of the Company and
its subsidiaries (together referred to as the "Group"). The Parent
Company financial statements present information about the Company
as a separate entity.
The financial information is presented in pounds sterling, which
is the functional currency of the entity and rounded to the nearest
GBP. The financial statements are prepared on the historical cost
basis unless otherwise specified within these accounting
policies.
Both the Company and consolidated financial statements have been
prepared and approved by the Directors in accordance with UK
adopted International Accounting Standards. On publishing the
Company financial statements here together with the consolidated
financial statements, the Company is taking advantage of the
exemption in s408 of the Companies Act 2006 not to present its
individual income statement and statement of comprehensive income
and related notes.
The accounting policies set out below have been applied
consistently to all periods presented in these financial
statements.
3. Accounting policies
3.1 Going concern
The consolidated financial statements for the Group have been
prepared on a going concern basis.
In the prior year, the Company was admitted to the AIM stock
exchange. Listing on AIM provided the Group with further funding
with which to continue to invest in the organic growth of the
Likewise business whilst also identifying new acquisition targets
that would be earnings enhancing to the Group. The Company's
admission to the AIM stock exchange also provides further awareness
of the brand as well as accessibility to new institutional and
private investors alike.
The Group continues to utilise invoice financing arrangements in
some subsidiaries and has the option to draw on additional
authorised facilities to support working capital requirements. The
Group has operated within these facilities throughout the year and
continues to do so in 2023. The directors are confident that the
Group will be able to operate within the finance facilities
available to us.
The Board have also undertaken assessments of going concern by
building a cash flow model through to December 2024, based on 2022
actuals, 2023 budget and forecast performance for 2024. These
cashflows indicate that the business has adequate resources to
continue to operate for the foreseeable future and within the
current financing arrangements in place.
Overall, given the strength of the Group's balance sheet,
significant cash reserves on hand, availability of financing
arrangements and the strong forecast performance of the Group, this
provides the Directors with sufficient assurance on the Group's
ability to continue as a going concern, and therefore adopt the
going concern basis of accounting in preparing the financial
statements.
3.2 Basis of consolidation
Subsidiaries are entities controlled by the Group. Control
exists when the Group has the power to govern the financial and
operating policies of an investee so as to obtain benefits from its
activities, has exposure, or rights, to variable returns and can
use its power to affect those returns. In assessing control,
potential voting rights that are currently exercisable are taken
into account. The financial statements of subsidiaries are included
in the consolidated financial statements from the date that control
commences until the date that control ceases.
3.3 Impact of new international reporting standards
There were a number of narrow scope amendments to existing
standards which were effective from 1 January 2022. None of these
had an impact on the Group.
Certain new accounting standards, amendments to accounting
standards and interpretations have been published that are not
mandatory for 31 December 2022 reporting periods and have not been
early adopted by the Group. These standards, amendments or
interpretations are not expected to have a material impact on the
Group in the current or future reporting periods and on foreseeable
future transactions.
3.4 Revenue
Revenue comprises sales of goods to customers outside the Group,
less an appropriate deduction for discounts, and is stated at the
fair value of the consideration net of value added tax and other
sales taxes.
Revenue and receivables are recognised when performance
obligations are satisfied and the goods are delivered to customers
as this is the point in time that the consideration is
unconditional, control of goods has passed and only the passage of
time is required before the payment is due.
3.5 Finance income and costs
Interest income and expense is recognised using the effective
interest method which calculates the amortised cost of a financial
asset or liability and allocates the interest income or expense
over the relevant period.
3.6 Property, plant and equipment
Property, plant and equipment under the cost model are stated at
historical cost less depreciation less any recognised impairment
losses. Cost includes expenditure that is directly attributable to
the acquisition or construction of these items. Subsequent costs
are included in the asset's carrying amount only when it is
probable that future economic benefits associated with the item
will flow to the company and the costs can be measured reliably.
All other costs, including repairs and maintenance costs, are
charged to the Income Statement in the period in which they are
incurred.
Depreciation is provided on all property, plant and equipment
and is calculated as follows:
Freehold property -- 2% straight line
Leasehold improvements -- straight line over the term of the
lease
Plant and machinery -- 10% -- 15% straight line
Motor vehicles -- 20% -- 50% straight line
Fixtures, fittings and computer equipment -- 10% -- 33% straight
line
Depreciation is provided on cost less residual value. The
residual value, depreciation methods and useful lives are annually
reassessed.
Each asset's estimated useful life has been assessed with regard
to its own physical life limitations and to possible future
variations in those assessments. Estimates of remaining useful
lives are made on a regular basis for all machinery and equipment,
with annual reassessments for major items. Changes in estimates are
accounted for prospectively.
The gain or loss arising on disposal or scrapping of an asset is
determined as the difference between the sales proceeds, net of
selling costs, and the carrying amount of the asset and is
recognised in the Income Statement.
3.7 Revaluation of property
Individual properties are carried at current year value at fair
value at the date of revaluation less any subsequent accumulated
depreciation and subsequent accumulated impairment losses.
Revaluations are undertaken with sufficient regularity to ensure
the carrying amount does not differ materially from that which
would be determined using fair value at the Consolidated Statement
of Financial Position date.
Fair values are determined from market based evidence normally
undertaken by professionally qualified valuers.
Revaluation gains and losses are recognised in Other
Comprehensive Income unless losses exceed the previously recognised
gains or reflect a clear consumption of economic benefits, in which
case the excess losses are recognised in the Income Statement.
The difference between depreciation based on the revalued
carrying amount of the asset and depreciation based on the asset's
original cost is transferred from revaluation reserve to retained
earnings at the end of each reporting period. Any remaining
revaluation surplus included in equity is transferred directly to
retained earnings when the asset is disposed of.
3.8 Impairment of non--financial assets (excluding Goodwill)
At each reporting date, the directors review the carrying
amounts of the Group's non current assets, to determine whether
there is any indication that those assets have suffered an
impairment loss. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the extent
of the impairment loss, if any. Where the asset does not generate
cash flows that are independent from other assets, the directors
estimate the recoverable amount of the cash generating unit to
which the asset belongs.
Recoverable amount is the higher of fair value less costs of
disposal and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a pre
tax discount rate that reflects current market assessments of the
time value of money and the risks specific to the asset for which
the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset or cash generating unit is
estimated to be less than its carrying amount, the carrying amount
of the asset or cash generating unit is reduced to its recoverable
amount. The impairment loss is allocated first to reduce the
carrying amount of any goodwill allocated to the unit and then to
the other assets of the unit pro rata based on the carrying amount
of each asset in the unit.
An impairment loss is recognised as an expense immediately.
Where an impairment loss on non financial assets subsequently
reverses, the carrying amount of the asset or cash generating unit
is increased to the revised estimate of its recoverable amount, but
so that the increased carrying amount does not exceed the carrying
amount that would have been determined had no impairment loss been
recognised for the asset or cash generating unit in prior periods.
A reversal of an impairment loss is recognised in the Income
Statement immediately.
3.9 Inventories
Inventory is valued at the lower of cost and net realisable
value, being the estimated selling price less costs to complete and
sell. Cost is based on the cost of purchase on a first in, first
out basis. Work in progress and finished goods include labour and
attributable overheads.
At each reporting date, inventories are assessed for impairment.
If inventories are impaired, the carrying amount is reduced to its
selling price less costs to complete and sell. The impairment loss
is recognised immediately in the Income Statement.
3.10 Cash at bank
Cash at bank comprise cash on hand, deposits held at call with
banks and other short term highly liquid investments with original
maturities of three months or less from inception.
3.11 Financial instruments
Financial assets and financial liabilities are recognised when
the Group becomes a party to the contractual provisions of the
financial instrument.
Financial assets and financial liabilities are measured
initially at fair value plus transactions costs. Financial assets
and financial liabilities are measured subsequently as described
below.
Cash equivalents comprise short--term, highly liquid investments
that are readily convertible into known amounts of cash and which
are subject to an insignificant risk of changes in value. An
investment with a maturity of three months or less is normally
classified as being short--term.
Derivatives, including forward foreign exchange contracts, are
initially recognised at fair value on the date a derivative
contract is entered into and are subsequently re--measured at their
fair value. Changes in the fair value of derivatives are recognised
in the Income Statement in finance costs or income as
appropriate.
3.12 Financial assets
Trade and other receivables are recorded initially at
transaction price and subsequently measured at amortised cost. This
results in their recognition at nominal value less an allowance for
any doubtful debts. This allowance for expected credit losses (ECL)
may be established where evidence of credit deterioration is
observed. In order to assess credit deterioration, the Group
considers reasonable and supportable information that is relevant
and available without undue cost or effort. This includes both
quantitative and qualitative information and analysis, based on its
historical experience and informed credit assessment, that includes
forward--looking information. An additional reserve is established,
where required, when a loss is both probable and the amount is
known.
ECLs are a probability--weighted estimate of lifetime credit
losses. Under the ECL model, the Group calculates the allowance for
credit losses by considering on a discounted basis the cash
shortfalls it would incur in various default scenarios for
prescribed future periods and multiplying the shortfalls by the
probability of each scenario occurring. The allowance is the sum of
these probability weighted outcomes. Credit losses are measured as
the present value of all cash shortfalls (i.e. the difference
between the cash flows due to the entity in accordance with the
contract and the cash flows that Group expects to receive) with a
discount factor applied to such overdue amounts. The discount
matrix ("ECL Matrix") below is applied to derive an ECL for overdue
amounts:
Past due (days) 31--60 61--90 90--120 120--250 Over 250
Discount to Amounts Overdue 0% 0% 5% 50% 100%
The Group exercises its discretion in the application of
discounts outside of the ECL Matrix based on extenuating
circumstances that may apply from time to time to the Group's trade
receivables (see note 19). An example of such an extenuating
circumstance may occur when it is known that an overdue amount will
be collected post a reporting or measurement date.
3.13 Financial liabilities
The Group's financial liabilities include trade and other
payables and borrowings.
Interest bearing bank loans and overdrafts are initially
recorded at fair value, which equals the proceeds received, net of
direct interest costs. They are subsequently held at amortised
cost. Finance charges, including premiums payable on settlement or
redemption are accounted for using an effective interest rate
method and are added to or deducted from the carrying amount of the
instrument to the extent that they are not settled in the period in
which they arise.
Trade and other payables are recognised initially at fair value
and subsequently measured at amortised cost. Generally, this
results in their recognition at their nominal value.
3.14 Foreign currency
The presentation currency for the Group's historical financial
information is pounds sterling.
Transactions in foreign currencies are recorded using the rate
of exchange ruling at the date of the transaction. Any gain or loss
on translation of monetary foreign currency assets and liabilities
arising from a movement in exchange rates subsequent to initial
measurement is included as an exchange gain or loss in the
Consolidated Statement of Profit or Loss.
The assets and liabilities of overseas subsidiary undertakings
are translated at the closing exchange rate. Income Statements and
cash flows of such subsidiaries are translated into Sterling at the
average rates of exchange. The adjustments to period end rates are
taken to foreign exchange reserve in equity and reported in the
Other Comprehensive Income.
3.15 Taxation
Current taxation
Current taxation is based on the local taxable income at the
local statutory tax rate enacted or substantively enacted at the
reporting date and includes adjustments to tax payable or
recoverable in respect of previous periods.
Deferred taxation
Deferred taxation is calculated using the liability method, on
temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the historical financial
information. However, if the deferred tax arises from the initial
recognition of an asset or liability in a transaction other than a
business combination that at the time of the transaction affects
neither accounting nor taxable profit or loss, it is not accounted
for. No deferred tax is recognised on initial recognition of
goodwill or on investment in subsidiaries. Deferred tax is
determined using tax rates and laws that have been enacted or
substantively enacted by the year end date and are expected to
apply when the related deferred tax asset is realised or the
deferred tax liability is settled.
Deferred tax liabilities are provided in full, and are not
discounted.
Deferred tax assets are recognised to the extent that it is
probable that future taxable profits will be available against
which the temporary differences can be utilised.
Changes in deferred tax assets or liabilities are recognised as
a component of tax expense in the Income Statement, except where
they relate to items that are charged or credited directly to
equity in which case the related deferred tax is also charged or
credited directly to equity.
Deferred income tax assets and liabilities are offset when there
is a legally enforceable right to offset current tax assets against
current tax liabilities and when the deferred income tax assets and
liabilities relate to income taxes levied by the same taxation
authority where there is an intention to settle the balances on a
net basis.
3.16 Business combinations
The acquisition method of accounting is used to account for all
business combinations, regardless of whether equity instruments or
other assets are acquired. The consideration transferred for the
acquisition of a subsidiary comprises the:
-- fair values of the assets transferred
-- liabilities incurred to the former owners of the acquired
business
-- equity interests issued by the Group
-- fair value of any asset or liability resulting from a
contingent consideration arrangement, and
-- fair value of any pre--existing equity interest in the
subsidiary.
Identifiable assets acquired and liabilities and contingent
liabilities assumed in a business combination are, with limited
exceptions, measured initially at their fair values at the
acquisition date.
Acquisition related costs are expensed as incurred.
The excess of the consideration transferred and acquisition date
fair value of any previous equity interest in the acquired entity
over the fair value of the net identifiable assets acquired is
recorded as goodwill. If those amounts are less than the fair value
of the net identifiable assets of the business acquired, the
difference is recognised directly in the Income Statement as a
bargain purchase.
Where settlement of any part of cash consideration is deferred,
the amounts payable in the future are discounted to their present
value as at the date of exchange. The discount rate used is the
entity's incremental borrowing rate, being the rate at which a
similar borrowing could be obtained from an independent financier
under comparable terms and conditions.
Contingent consideration is classified either as equity or a
financial liability. Amounts classified as a financial liability
are subsequently remeasured to fair value with changes in fair
value recognised in the Income Statement.
3.17 Goodwill
Goodwill is initially recognised and measured as set out
above.
Goodwill not attributed to a specific intangible asset is not
amortised but is reviewed for impairment at least annually. For the
purpose of impairment testing, goodwill is allocated to each of the
Group's cash generating units expected to benefit from the
synergies of the combination. If the recoverable value of the cash
generating unit is less than the carrying amount of goodwill, the
impairment loss is recognised. An impairment loss recognised for
goodwill is not reversed in a subsequent period.
On disposal of a cash generating unit, the attributable amount
of goodwill is included in the determination of the profit or loss
on disposal.
3.18 Intangible assets
Other intangible assets
Goodwill attributable to the brand name of acquired subsidiaries
or customer base is initially recognised
and measured as set out above. Licences are initially recognised
at cost.
Amortisation is provided on all other intangible assets and is
calculated as follows:
Brand name 10 -- 15 years straight line
Customer base 10 -- 15 years straight line
The useful lives of intangible assets are annually reassessed
and all assets are reviewed for impairment at least annually. On
disposal of a subsidiary, the attributable amount of intangible
assets is included in the determination of the profit or loss on
disposal.
3.19 Employment benefits
Provision is made in the financial statements for all employee
benefits. Liabilities for wages and salaries, including non
monetary benefits and annual leave obliged to be settled within 12
months of the reporting date, are recognised in accruals.
Contributions to defined contribution pension plans are charged
to the Income Statement in the year to which the contributions
relate.
Likewise Floors Limited, a subsidiary of the Group operates a
defined benefit pension plan for certain employees.
The amount recognised in the Consolidated Statement of Financial
Position in respect of the defined benefit plan is the present
value of the defined benefit obligation at the end of the reporting
date less the fair value of plan assets at the reporting date (if
any) out of which the obligations are to be settled.
The defined benefit obligation is calculated using the projected
unit credit method. Annually the Group engages independent
actuaries to calculate the obligation. The present value is
determined by discounting the estimated future payments using
market yields on high quality corporate bonds that are denominated
in sterling and that have terms approximating to the estimated
period of the future payments ('discount rate').
Where the calculation results in a benefit to the Group, the
asset recognised is limited to the present value of any future
refunds from the plan or reductions in future contributions to the
plan.
3.20 Leases
The Group assesses whether a contract is or contains a lease, at
inception of the contract. The Group recognises a right--of--use
asset and a corresponding lease liability with respect to all lease
arrangements in which it is the lessee, except for short--term
leases (defined as leases with a lease term of 12 months or less)
and leases of low value assets. For these leases, the Group
recognises the lease payments as an operating expense on a straight
line basis over the term of the lease unless another systematic
basis is more representative of the time pattern in which economic
benefits from the leased assets are consumed.
The lease liability is initially measured at the present value
of the lease payments that are not paid at the commencement date,
discounted by using the rate implicit in the lease. If this rate
cannot be readily determined, the Group uses its incremental
borrowing rate.
The lease liability is subsequently measured by increasing the
carrying amount to reflect interest on the lease liability (using
the effective interest method) and by reducing the carrying amount
to reflect the lease payments made.
Right--of--use assets are depreciated over the shorter period of
lease term and useful life of the underlying asset.
3.21 Borrowing costs
Borrowing costs are recognised in the Income Statement in the
year in which they are incurred.
3.22 Share based payments
The fair value of equity instruments granted to employees is
charged to the Statement of Comprehensive Income, with a
corresponding increase in equity. The fair value of share options
is measured at grant date using the Black--Scholes pricing model
and spread over the period during which the employee becomes
unconditionally entitled to the award. The charge is adjusted to
reflect the number of shares or options that vest.
3.23 Invoice discounting
The Group has an invoice discounting arrangement. The amount
owed by customers to the Group are included within trade
receivables and the amount owed to the invoice discounting company
is included within borrowings. The amount owed to the invoice
discounting company represents the difference between the amounts
advanced by the invoice discounting company and the invoices
discounted. The interest element of the invoice discounting charges
and other related costs are recognised as they accrue and are
included in the Income Statement with other finance costs.
3.24 Segment reporting
An operating segment is a component of an entity that engages in
business activities from which it may earn revenues and incur
expenses (including revenues and expenses related to transactions
with other components of the same entity), whose operating results
are regularly reviewed by the entity's Chief Operating Decision
Maker to make decisions about resources to be allocated to the
segment and assess its performance, and for which discrete
financial information is available. The Chief Operating Decision
Maker has been identified as the Board of Executive Directors, at
which level strategic decisions are made.
Details of the Group's reporting segments are provided in note
5.
3.25 Government grants
Government grants are not recognised until there is reasonable
assurance that the Group will comply with the conditions attaching
to them and that the grants will be received.
Government grants are recognised in profit or loss on a
systematic basis over the periods in which the Group recognises as
expenses the related costs for which the grants are intended to
compensate.
Government grants that are receivable as compensation for
expenses or losses already incurred or for the purpose of giving
immediate financial support to the Group with no future related
costs are recognised in profit or loss in the period in which they
become receivable.
Government grants receivable from central government under the
Coronavirus Job Retention Scheme are included within other
operating income in the Consolidated Statement of Profit or Loss
and are not offset against the related expenses.
3.26 Provisions
Provisions are recognised when the Group has a present
obligation (legal or constructive) as a result of a past event, it
is probable that the Group will be required to settle the
obligation, and a reliable estimate can be made of the amount of
the obligation.
The amount recognised as a provision is the best estimate of the
consideration required to settle the present obligation at the end
of the reporting period, taking into account the risks and
uncertainties surrounding the obligation. When a provision is
measured using the cash flows estimated to settle the present
obligation, its carrying amount is the present value of those cash
flows (when the effect of the time value of money is material).
When some or all of the economic benefits required to settle a
provision are expected to be recovered from a third party, a
receivable is recognised as an asset if it is virtually certain
that reimbursement will be received and the amount of the
receivable can be measured reliably.
4. Judgements and key sources of estimation uncertainty
The preparation of the financial statements, in conformity with
adopted IFRSs requires management to make judgements, estimates and
assumptions that affect the carrying amounts of assets and
liabilities at the date of these financial statements and the
reported amount of revenues and expenses during the period. These
judgements, estimates and assumptions are continually evaluated by
management and are based upon historical experiences and other
factors, including expectations of future events that are believed
to be reasonable under the circumstances.
The key assumptions concerning the future and other key sources
of estimation uncertainty at the statement of financial position
date, that have a risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next
financial period are as follows:
Acquisition accounting balances
Assets and liabilities must be recognised at their fair value on
acquisition. The identification and measurement of contingent
liabilities and intangible assets are key areas of judgement. The
Group's acquisition in the year along with any assumptions applied
is detailed in note 37. As part of the acquisition the Group
performed a purchase price allocation review and has assessed the
fair value of the assets and liabilities acquired.
Contingent consideration was payable in respect of the
acquisitions in the year and is calculated by reference to the
Likewise Group Plc share price at the future determination date.
The fair value of contingent consideration at the date of
acquisition and subsequent remeasurement dates requires significant
judgements and estimates and is sensitive to share price
changes.
The Group recognises identifiable intangible assets acquired
through business combinations, such as brands and customer
relationships, at fair value on acquisition. Any excess paid over
the value of net assets acquired is included as Goodwill in the
balance sheet and is allocated to an appropriate business segment.
Estimates are required to determine the purchase price allocation
(PPA) between intangible assets and goodwill, with the fair value
of intangibles sensitive to these estimates. The key estimates
involved in establishing the fair vales are the future cash flows
forecast for the acquired entity, inputs into appropriate valuation
models and expected useful life of the assets.
Forecast cash flows are based on management's best estimate of
the expected levels of trade and profits following acquisition
taking into account actual results around the time of acquisition
with an inflationary 1--2% growth rate applied thereafter.
The fair value of brands is based on a relief from royalty
method. The brand value is sensitive to royalty rate incorporated
into the model. In the absence of accessible market data regarding
similar acquisitions in the market the Group have assessed the
royalty rate by analysis of the linear relationships between
underlying profitability and royalty rates to determine an
appropriate royalty rate for each acquisition. For acquisitions
during the year, the Group applied a royalty rate of 1.8% based on
this analysis.
Intangible assets are amortised over their expected useful life.
The annual amortisation charge and carrying value of the asset is
therefore sensitive to the estimated useful life. The useful life
is based on the period over which management expects to benefit
from the intangible assets, based on part experience and knowledge
of the business acquired.
Defined benefit pension scheme
Assumptions for future inflation linked pension increases (where
applicable) are based on the appropriate headline index, adjusted
where necessary to reflect any caps or collars, bearing in mind the
proximity of the future inflation assumption to those caps and
collars and the expected variability of future inflation increases.
All other assumptions have been set in accordance with the
statement of funding principals. No allowances have been made for
members transferring benefits out of the scheme in future. The
assumptions selected and associated sensitivity analysis are
disclosed in note 33.
Inventory valuation
This is provided for on the basis of the age of the items and
dependent on the frequency of component use. The Group makes
appropriate provision for slow--moving and discontinued inventory
items although a significant shift in consumer market or customer
demand may result in additional provision.
Valuation of land and buildings
The Group carries its land and buildings at fair value, with
changes in fair value being recognised in Other Comprehensive
Income unless losses exceed the previously recognised gains or
reflect a clear consumption of economic benefits, in which case the
excess losses are recognised in the Income Statement. The Group
engaged independent valuation specialists to determine fair value.
Significant changes in the commercial property market may impact
the valuation of the Group's property. See note 14 for further
information.
Impairment of trade receivables
Trade and other receivables are recognised at nominal value less
an allowance for doubtful debts. This allowance for expected credit
losses (ECL) may be established where evidence of credit
deterioration is observed. In order to assess credit deterioration,
the Group considers reasonable and supportable information that is
relevant and available without undue cost or effort. This includes
both quantitative and qualitative information and analysis, based
on its historical experience and informed credit assessment, that
includes forward--looking information. An additional reserve is
established, where required, when a loss is both probable and the
amount is known. See notes 3.12 and 19 for further information.
5. Segmental reporting
For the purposes of segmental reporting, the Group's Chief
Operating Decision Maker (CODM) is considered to be the Executive
Board of Directors. The Board has not identified any separate
operating segments within the business. The Board reviews revenue
and expenses for the business as a whole and makes decisions about
resources and assesses performance based on this information.
Revenue arises entirely through the wholesale of goods.
Segmental analysis is therefore not presented.
The Group is not reliant on any one customer and no customer
exceeds 10% of total annual turnover.
The following is an analysis of the Group's revenue for the year
from continuing operations:
2022 2021
GBP GBP
Sale of goods 123,642,673 60,490,559
------------ -------------
123,642,673 60,490,559
============ =============
The Group generates revenue from both the UK and overseas as
detailed below:
2022 2021
GBP GBP
United Kingdom 123,432,273 60,254,713
Rest of Europe 182,417 225,771
Rest of the world 27,983 10,075
----------- ----------
123,642,673 60,490,559
=========== ==========
6. Other operating income
2022 2021
GBP GBP
Government grants receivable - 212,183
---- -------
- 212,183
==== =======
Government grants represent income receivable from central
government under the Coronavirus Job Retention Scheme to cover some
of the costs of employing certain members of staff placed on
furlough leave in response to the COVID 19 pandemic.
7. Operating profit
Operating profit is stated after charging:
2022 2021
GBP GBP
Depreciation of property, plant and equipment 1,217,258 551,124
Depreciation of right--of--use assets 2,049,591 1,283,306
Loss/(gain) on foreign exchange 31,229 (38,701)
Short term lease expense:
-- plant 174,539 127,620
-- property 150,000 150,000
Amortisation of intangible assets 366,507 287,428
Share based payments 319,678 149,210
AIM listing costs - 352,142
Restructuring costs - 98,253
Impact of IFRS 16 - 213,765
Loss from new operations (Likewise Midlands) - 724,474
Loss from new operations (Likewise South) 497,968 -
Exceptional investment in point of sale 486,536 -
--------- ---------
Acquisition fees and related costs 1,455,992 -
========= =========
In order to maximise the Group's presence in the market,
accelerate further sales growth and increase market share, Likewise
Floors, a subsidiary company, have accelerated investment and the
roll out of various new point of sale initiatives including sample
stands and lecterns including the design, development and launch of
a new Likewise wall stand rolled out to customers in 2022. This
development and launch cost is over and above the general marketing
spend incurred and recognised within the statement of profit or
loss, with this additional one off spend recognised in 2022. The
Group have incurred one off costs of GBP486,536 in relation to this
matter in the year and therefore in management's view, this
warrants separate disclosure in order to provide a true and fair
view of these financial statements for the reader.
Acquisition costs related to the acquisition of Valley Wholesale
Carpets and Delta Carpets in the year.
8. Auditors' renumeration
2022 2021
GBP GBP
Fees payable to the Group's auditors for the
audit of the Group's financial statements 150,000 105,000
Fees payable to the Group's auditors:
-- work in respect of AIM listing -- through
profit and loss - 95,050
-- work in respect of AIM listing -- through
equity - 24,950
-- taxation advisory services 500 -
-- work in respect of acquisition due diligence 62,000 -
======= =======
9. Directors and employees
Group
2022 2021
GBP GBP
Employee benefit expenses (including Directors)
comprise:
Wages and salaries 16,289,890 8,197,734
Social security costs 1,722,647 852,302
Pension costs 500,267 318,167
Compensation for loss of office 15,541 8,361
Share based payments 319,678 149,210
---------- ---------
18,848,023 9,525,774
========== =========
Key management personnel compensation
Key management personnel are those persons having authority and
responsibility for planning, directing and controlling the
activities of the Group, including the Directors of the Company
listed on page 2, and other senior management.
2022 2021
GBP GBP
Remuneration 1,703,375 731,028
Social security costs 214,322 98,675
Group pension contribution to defined contribution
schemes 61,350 61,347
Share based payments 82,468 77,367
--------- -------
2,061,515 968,417
========= =======
As at 31 December 2022, 1,285,714 share options remained active
under the Group's SAYE scheme. During the year no options were
granted to key management personnel, no options lapsed and no
options were exercised. These options are due to exercise between
March and October 2024.
As at 31 December 2022, 5,900,000 share options remained active
under the Group's EMI scheme. During the year no options were
granted to key management personnel, no options lapsed and no
options were exercised. These options are due to exercise in
January 2024.
Group
The monthly average number of persons, including the Directors,
employed by the Group during the year was as follows:
2022 2021
No. No.
Directors 5 4
Other employees 450 254
---- ----
455 258
==== ====
2022 2021
GBP GBP
Remuneration of directors
Remuneration 939,327 298,732
Social security costs 107,188 40,037
Group pension contribution to defined contribution
schemes 25,600 25,600
Share based payments 14,418 14,418
--------- -------
1,086,533 378,787
========= =======
In addition, fees of GBPNil (2021 GBP83,000) were paid to non executive Directors in the year.
The highest paid director received remuneration in the year of
GBP488,780 (2021 GBP145,338) and pension
contributions were made of GBPNil (2021 GBP25,600).
2022 2021
No. No.
Directors accruing benefits under money purchase
pension schemes 1 1
------------------ ----
1 1
================== ====
2,700,000 share options were granted to directors during 2019 at
an exercise price of GBP0.10 per share. There have been no options
exercised or additional options granted since this time. These
options are due to exercise between January and March 2024.
10. Finance income and expense
Recognised in profit or loss
2022 2021
GBP GBP
Finance income
Interest on:
Bank deposits - 4
Other interest receivable 5,043 169
----------- -----------------
Total finance income 5,043 173
=========== =================
Finance expense
Bank loan interest payable 74,575 84,473
Interest on lease liabilities 571,009 317,913
Other interest payable 22,283 -
Invoice discounting facility interest payable 128,976 22,891
Total finance expense 796,843 425,277
----------- -----------------
Net finance expense recognised in profit or
loss (791,800) (425,104)
=========== =================
11. Taxation on ordinary activities
11.1 Income tax recognised in profit or loss
2022 2021
GBP GBP
Current tax
Adjustments in respect of prior years (70,812) (313,724)
--------- ---------
Total current tax (70,812) (313,724)
Deferred tax
Origination and reversal of timing differences (699,135) 232,265
Effect of change in tax rates 191,932 -
--------- ---------
Total deferred tax (507,203) 232,265
========= =========
Total tax credit (578,015) (81,459)
========= =========
The reasons for the difference between the actual tax credit for
the year and the standard rate of corporation tax in the United
Kingdom applied to losses for the year are as follows:
2022 2021
GBP GBP
Loss for the year (836,304) (145,423)
Income tax credit (578,015) (81,459)
----------- ---------
Loss before income taxes (1,414,319) (226,882)
Tax using the Company's domestic tax rate of
19% (2021:19%) (268,721) (43,108)
Fixed asset differences 391,971 (80,051)
Expenses not deductible for tax purposes 345,325 76,135
Adjustments to tax charge in respect of prior
periods (70,812) (313,724)
Non--taxable consolidation adjustments (2,619) (132,366)
Remeasurement of deferred tax (30,975) 221,009
Movement in deferred tax not recognised (932,774) 208,715
Other differences leading to a decrease in the
tax charge (9,410) (18,069)
----------- ---------
Total tax credit (578,015) (81,459)
=========== =========
Changes in tax rates and factors affecting the future tax
charges
At 31 December 2022, the Group has tax losses of GBP11,539,175
(2021: GBP9,703,320) which are available for offset against future
taxable profits.
11.2 Deferred tax balances
The following is the analysis of deferred tax liabilities
presented in the consolidated statement of financial position:
2022 2021
GBP GBP
Deferred tax liabilities (2,496,677) (1,404,650)
----------- -----------
(2,496,677) (1,404,650)
=========== ===========
A deferred tax asset of GBP1,577,985 (2021: GBP1,812,747) has
not been recognised in the financial statements in relation to tax
losses. In addition, a deferred tax asset of GBPNil (2021:
GBP517,406) has not been recognised in the financial statements in
relation to the future tax benefit on the future exercise of
employee share options.
A deferred tax asset has not been recognised in the year where
it is uncertain that the asset will crystallise in the foreseeable
future.
2022
Recognised
Opening in profit Acquisitions/ Closing
balance or loss disposals balance
GBP GBP GBP GBP
Fixed asset timing differences (653,904) (381,332) (268,739) (1,303,975)
Arising from business combinations (880,249) 91,627 (263,599) (1,052,221)
Capital gains (502,946) - (1,066,892) (1,569,838)
Short term timing differences 19,366 103,182 - 122,548
Losses and other deductions 613,083 693,726 - 1,306,809
----------- ---------- ------------- -----------
(1,404,650) 507,203 (1,599,230) (2,496,677)
=========== ========== ============= ===========
2021
Recognised
Recognised in other
Opening in profit comprehensive Closing
balance or loss income balance
GBP GBP GBP GBP
Fixed asset timing differences (218,940) (434,964) - (653,904)
Arising from business combinations (723,601) (156,648) - (880,249)
Capital gains (31,045) - (471,901) (502,946)
Short term timing differences 15,851 3,515 - 19,366
Losses and other deductions 257,251 355,832 - 613,083
---------- ---------- -------------- -----------
(700,484) (232,265) (471,901) (1,404,650)
========== ========== ============== ===========
12. Earnings per share
(i) Basic and diluted loss per share
The total basic loss per share attributable to the ordinary
equity holders of the Company was GBP0.003 (2021: loss of
GBP0.001). The total diluted loss per share attributable to the
ordinary equity holders of the Company was GBP0.003 (2021: loss of
GBP0.001).
2022 2021
Pence Pence
From continuing operations attributable
to the ordinary equity holders of the Company (0.3) (0.1)
--------- ----------
Total basic earnings per share attributable
to the ordinary equity holders of the Company (0.3) (0.1)
========= ==========
(ii) Reconciliation of earnings used in calculating earnings per share
2022 2021
GBP GBP
Loss attributable to the ordinary equity holders
of the Company:
--------- ---------
Used in calculating basic and diluted earnings
per share (836,304) (145,423)
(iii) Weighted average number of shares used as the denominator
2022 2021
Number Number
Weighted average number of ordinary shares used
as the denominator in calculating basic earnings
per share 241,979,322 167,273,981
Adjustments for calculation of diluted earnings
per share:
Options 23,640,830 18,945,648
Warrants 2,800,000 2,800,000
----------- -----------
Weighted average number of ordinary shares and
potential ordinary shares used as the denominator
in calculating diluted earnings per share 268,420,152 189,019,629
----------- -----------
13. Dividends
2022 2021
GBP GBP
Interim dividend of GBP0.002 paid per Ordinary
Share in the year (2021 -- GBPNil). 487,590 -
-------- ----------
487,590 -
-------- ----------
The directors are proposing a final dividend of GBP0.002 per
share (2021 -- GBPNil). The dividend has not been accrued in the
consolidated statement of financial position.
14. Property, plant and equipment
Land and Right of
buildings use assets Fixtures, Right of
-- freehold - fittings use assets
and long leasehold Leasehold Plant and Motor & computer -
leasehold property improvements machinery vehicles equipment other Total
GBP GBP GBP GBP GBP GBP GBP GBP
Cost or valuation
At 1 January 2021 4,050,000 4,680,269 114,498 612,130 613,334 1,128,456 1,781,612 12,980,299
Additions - 4,888,501 184,221 876,927 49,545 482,576 2,390,834 8,872,604
Disposals - (451,832) - - (3,943) (2,250) (301,449) (759,474)
Transfers between classes - - - 444,955 - (444,955) - -
Revaluation / (impairment) 1,735,000 (140,249) - - - - - 1,594,751
Foreign exchange movements - - - (5,276) (1,140) (2,420) - (8,836)
-------------- --------------- ----------------- ------------- ------------ ---------------- ------------ ----------
At 31 December 2021 5,785,000 8,976,689 298,719 1,928,736 657,796 1,161,407 3,870,997 22,679,344
Additions 517,757 8,172,355 18,692 1,543,168 202,306 983,331 2,577,922 14,015,531
Acquisition of subsidiary 15,966,907 - - 102,981 810,247 42,071 - 16,922,206
Disposals - (434,574) (10,219) - (105,735) (40,469) (301,273) (892,270)
Foreign exchange movements - - - - 836 - - 836
-------------- --------------- ----------------- ------------- ------------ ---------------- ------------ ----------
At 31 December 2022 22,269,664 16,714,470 307,192 3,574,885 1,565,450 2,146,340 6,147,646 52,725,647
============== =============== ================= ============= ============ ================ ============ ==========
Land and
buildings Right of
- use assets Fixtures, Right of
freehold - fittings use assets
and long leasehold Leasehold Plant and & computer -
leasehold property improvements machinery Motor vehicles equipment other Total
GBP GBP GBP GBP GBP GBP GBP GBP
Accumulated
depreciation
and impairment
At 1 January 2021 - 781,258 1,458 110,409 256,098 166,656 407,821 1,723,700
Charge for the year 67,257 - 21,522 142,324 157,249 162,772 - 551,124
Charge for
right--of--use
assets - 667,879 - - - - 615,427 1,283,306
Disposals - (451,832) - - (1,768) (263) (76,937) (530,800)
Impairment charge - - 7,739 - - - - 7,739
On revalued assets (67,257) - - - - - - (67,257)
Exchange adjustments - - - (3,998) (1,140) (2,051) - (7,189)
------------ ---------------- ------------------ -------------- -------------- ------------- ------------------- ----------
At 31 December 2021 - 997,305 30,719 248,735 410,439 327,114 946,311 2,960,623
Charge for the year 309,957 - 30,096 297,108 341,492 238,605 - 1,217,258
Charge for
right--of--use
assets - 962,408 - - - - 1,087,183 2,049,591
Transfers intra group - - - 5,636 - (5,636) - -
Disposals - (145,960) (10,219) - (53,089) (1,405) (281,543) (492,216)
On revalued assets (309,957) - - - - - - (309,957)
Exchange adjustments - - - (612) 836 (97) - 127
------------ ---------------- ------------------ -------------- -------------- ------------- ------------------- ----------
At 31 December 2022 - 1,813,753 50,596 550,867 699,678 558,581 1,751,951 5,425,426
============ ================ ================== ============== ============== ============= =================== ==========
If the freehold and long leasehold property had not been
included at valuation, it would have been included under the
historical cost convention as follows:
Cost of GBP18,742,757 (2021 -- GBP3,100,000)
Depreciation of GBP449,285 (2021 -- GBP193,028)
Net book value of GBP18,293,472 (2021 -- GBP2,906,972)
14.1. Assets held under leases
The net book value of owned and leased assets included as
"Property, plant and equipment" in the Consolidated Statement of
Financial Position is as follows:
31 December 31 December
2022 2021
GBP GBP
Property, plant and equipment owned 28,003,809 8,814,651
Right--of--use assets 19,296,412 10,904,070
----------- -----------
47,300,221 19,718,721
=========== ===========
Information about right of use assets is summarised below:
Net book value
31 December 31 December
2022 2021
GBP GBP
Property 14,900,717 7,979,384
Motor vehicles & plant and machinery 4,395,695 2,924,686
----------- -----------
19,296,412 10,904,070
=========== ===========
Depreciation charge for the year ended
31 December 31 December
2022 2021
GBP GBP
Property 962,408 667,879
Motor vehicles & plant and machinery 1,087,183 615,427
----------- -----------
2,049,591 1,283,306
=========== ===========
14.2 Fair value measurement and Impairment
Fair value measurement
Included in land and buildings is land with a cost of
GBP6,254,057 (2021: GBP687,167) which is not depreciated.
The Group's freehold and long leasehold land and buildings are
stated at their revalued amounts, being the fair value at the date
of revaluation, less any subsequent accumulated depreciation and
subsequent accumulated impairment losses.
The Group acquired GBP4,872,179 freehold and GBP11,094,728 long
leasehold land and buildings as part of the acquisition of the
Valley Wholesale Carpets. These were valued at a total of
GBP15,125,000 as at 29 October 2021 by Gerald Eve LLP, independent
valuers not related to the Group. These were then revalued to a
total of GBP15,966,907 by the directors at the date of acquisition
based on further valuations obtained on 13 July 2022 by BNP Paribas
Real Estate, independent valuers not related to the Group. The
directors do not believe that this valuation is materially
different to the valuation at the year end for this property.
In addition, the Group holds freehold property in its subsidiary
William Armes Holdings Limited which was valued at GBP5,785,000 as
at 30 March 2022 by Savills (UK) Limited, independent valuers not
related to the Group. The directors do not believe that this
valuation is materially different to the valuation at the year end
for this property.
Gerald Eve, Savills (UK) Limited, BNP Paribas Real Estate are
chartered surveyors and property consultants that have appropriate
qualifications and recent experience in the fair value measurement
of properties in the relevant locations. The valuation reports have
been prepared in accordance with Royal Institution of Chartered
Surveyors ("RICS") Valuation -- Global Standards (incorporating the
IVSC International Valuation Standards) issued November 2021 and
effective from 31 January 2022 together, where applicable, with the
UK National Supplement effective from 14 January 2019, together the
"Red Book".
Property valuations are complex, require a degree of judgement
and are based on data that may or may not be publicly available.
Valuation of investment property and the respective inputs have
been classified as level 3 inputs as defined by IFRS 13 Fair Value
Measurement. Level 3 means that the valuation model cannot rely on
inputs that are directly available from an active market; however
there are related inputs from recent property sales that can be
used as a basis.
The freehold property in Sudbury has been valued using the
traditional "all risks" yield method of valuation, having regard to
comparable evidence and current market sentiment. In establishing
fair value, the most significant unobservable input is considered
to be the appropriate yield to apply to the rental income. This is
based on a number of factors including financial covenant strength
of the tenant, location, marketability of the unit if it were to
become vacant, quality of the property and its scope for potential
alternative uses.
The yield applied in the valuation is 6.6%. Assuming all else
stayed the same; a decrease of 1% in the yield would result in an
increase in fair value of GBP1,032,000. An increase of 1% in the
yield would result in a decrease in fair value of GBP760,000.
The properties acquired as part of the acquisition of Valley
Wholesale Carpets, consisting of two freehold units and a long
leasehold site have been valued using the market (comparative)
method of valuation, multiplying the capital value per square foot
by the size of the respective buildings. In determining the capital
value, the valuers have utilised observable capital values from
recent sales in similar locations, condition and size to the
respective sites.
The revaluation of land and buildings for 2022 of GBP309,957
(2021: GBP1,802,257) has been recognised within Other Comprehensive
Income.
Impairment losses recognised in the year
During the prior year the Company moved the location of its head
office to a new site. This resulted in an impairment of the
leasehold right of use asset of GBP140,249.
Capital commitments
As at 31 December 2022, the Group had capital commitments
totalling GBP1,090,204.
14.3 Assets pledged as security
There is a floating charge against the assets of the subsidiary
Likewise Floors Limited, from NatWest Bank PLC.
There is a fixed charge over the freehold land and buildings
held by the Group in respect of the bank loans in place for the
Group.
Floating charges previously held against assets of William Armes
Limited have been supported by cross guarantees from Likewise Group
Plc following the transfer of trade and assets from William Armes
Limited to Likewise Floors Limited. These charges are in respect of
bank loans and invoice financing arrangements of the Group.
Company
Right of Fixtures,
use assets fittings Right of
- & use assets
leasehold Leasehold computer -
property improvements Motor vehicles equipment other Total
GBP GBP GBP GBP GBP GBP
Cost or valuation
At 1 January 2021 206,671 10,219 - 25,610 - 242,500
Additions - - - 16,689 - 16,689
Revaluation / (impairment) (140,249) - - - - (140,249)
------------- ------------ ---------------- --------- ---------- ----------
At 31 December 2021 66,422 10,219 - 42,299 - 118,940
Additions 5,513,875 - 112,000 8,095 39,248 5,673,218
Disposals (66,422) (10,219) (112,000) - - (188,641)
------------- ------------ ---------------- --------- ---------- ----------
At 31 December 2022 5,513,875 - - 50,394 39,248 5,603,517
============= ============ ================ ========= ========== ==========
Right of
use assets Fixtures, Right of
- fittings use assets
leasehold Leasehold & computer -
property improvements Motor vehicles equipment other Total
GBP GBP GBP GBP GBP GBP
Accumulated
depreciation
and impairment
At 1 January
2021 40,922 1,458 - 6,935 - 49,315
Charge for the
year - 1,022 - 6,560 - 7,582
Charge for
right--of--use
assets 25,500 - - - - 25,500
Impairment
charge - 7,739 - - - 7,739
----------- ------------- ----------------- ----------------- ----------------- ----------------
At 31
December 2021 66,422 10,219 - 13,495 - 90,136
Charge for the
year - - 5,600 9,920 - 15,520
Charge for
right--of--use
assets 90,531 - - - 2,186 92,717
Disposals (66,422) (10,219) (5,600) - - (82,241)
----------- ------------- ----------------- ----------------- ----------------- ----------------
At 31
December 2022 90,531 - - 23,415 2,186 116,132
=========== ============= ================= ================= ================= ================
Net book value
At 1 January
2021 165,749 8,761 - 18,675 - 193,185
At 31 December
2021 - - - 28,804 - 28,804
At 31 December
2022 5,423,344 - - 26,979 37,062 5,487,385
=========== ============= ================= ================= ================= ================
14.4 Assets held under leases
The net book value of owned and leased assets included as
"Property, plant and equipment" in the Company Statement of
Financial Position is as follows:
31 December 31 December
2022 2021
GBP GBP
Property, plant and equipment owned 26,979 28,804
Right--of--use assets 5,460,406 -
----------- -----------
5,487,385 28,804
=========== ===========
Information about right of use assets is summarised below:
Net book value
31 December 31 December
2022 2021
GBP GBP
Property 5,423,344 -
Motor vehicles & plant and machinery 37,062 -
--------------- -----------
5,460,406 -
=============== ===========
During the prior year the Company moved the location of its head
office to a new site. This resulted in an impairment of the
leasehold right of use asset of GBP140,249 in the year ended 31
December 2021.
15. Intangible assets
Group
Delta Carpets Likewise
Customer Floors Customer Delta Carpets Likewise
base base Brandname Floors Brandname Total
GBP GBP GBP GBP GBP
Cost
At 1 January 2021 - 2,122,349 - 2,189,075 4,311,424
------------- ---------------- ------------- ----------------- ---------
At 31 December 2021 - 2,122,349 - 2,189,075 4,311,424
Additions on acquisition
of subsidiary 513,684 - 540,710 - 1,054,394
------------- ---------------- ------------- ----------------- ---------
At 31 December 2022 513,684 2,122,349 540,710 2,189,075 5,365,818
============= ================ ============= ================= =========
Delta Carpets Likewise
Customer Floors Customer Delta Carpets Likewise
base base Brandname Floors Brandname Total
GBP GBP GBP GBP GBP
Accumulated amortisation
and impairment
At 1 January 2021 - 247,607 - 255,392 502,999
Charge for the year - 141,490 - 145,938 287,428
------------------------- ------------- ---------------- ------------- ----------------- ---------
At 31 December 2021 - 389,097 - 401,330 790,427
Charge for the year 38,526 141,490 40,553 145,938 366,507
------------------------- ------------- ---------------- ------------- ----------------- ---------
At 31 December 2022 38,526 530,587 40,553 547,268 1,156,934
========================= ============= ================ ============= ================= =========
Net book value
At 1 January 2021 - 1,874,742 - 1,933,683 3,808,425
At 31 December 2021 - 1,733,252 - 1,787,745 3,520,997
------------------------- ------------- ---------------- ------------- ----------------- ---------
At 31 December 2022 475,158 1,591,762 500,157 1,641,807 4,208,884
The company held no other intangible assets in any period.
16. Goodwill
Group
2022 2021
GBP GBP
Cost 5,624,284 4,216,728
--------- ---------
5,624,284 4,216,728
2022 2021
GBP GBP
Cost
At 1 January 4,216,728 4,216,728
Additions on acquisition of subsidiaries (see
note 37) 1,407,556 -
--------- ---------
At 31 December 5,624,284 4,216,728
Accumulated impairment
--------- ---------
At 31 December - -
========= =========
16.1 Allocation of goodwill to cash generating units
The carrying amount of goodwill has all been allocated to the
Group's primary activity of wholesale distribution and has been
allocated to trading brands as follows:
2022 2021
GBP GBP
Likewise Floors Limited 3,253,210 3,253,210
Lewis Abbott Limited 467,847 467,847
H&V Carpets BVBA 307,230 307,230
A. & A. Carpets Limited 188,441 188,441
Valley Wholesale Carpets Limited 234,864 -
Delta Carpets Limited 1,172,692 -
--------- ---------
5,624,284 4,216,728
========= =========
The Group tests goodwill annually for impairment, or more
frequently if there are indications that goodwill might be
impaired.
The goodwill is a reflection of the benefit the acquisitions of
subsidiaries will have on the Group by offering greater geographic
coverage and providing the opportunity to expand this further than
is currently the case. The acquisitions will benefit from the
collective marketing and the enhanced product range available to
all Group companies. Ultimately this will enable the acquired
businesses and the existing Group members to provide an improved
customer service, across a wider geographic area, with a greater
product portfolio designed to help the Group to continue its
development.
The Group has conducted an analysis of the sensitivity of the
impairment test to changes in the key assumptions used being a
discount rate of 10% and original growth rate of 1%.
Likewise Floors Limited
The break even point of goodwill for Likewise Floors Limited is
at a growth level of 1.90% with terminal growth factor of 2%.
Lewis Abbott Limited
The break even point of goodwill for Lewis Abbott Limited is at
a growth level of 20% with terminal growth factor of 2%.
H&V Carpets BVBA
The break even point of goodwill for H&V Carpets BVBA is at
a growth level of 26% with terminal growth factor of 2%.
A. & A. Carpets Limited
The break even point of goodwill for A. & A. Carpets Limited
is at a growth level of 63% with terminal growth factor of 2%.
Valley Wholesale Carpets Limited
The break even point of goodwill for Valley Wholesale Carpets
Limited is at a growth level of 84.92% with terminal growth factor
of 1%.
Delta Carpets Limited
The break even point of goodwill for Delta Carpets Limited is at
a growth level of 39.68% with terminal growth factor of 2%.
17. Subsidiaries
Details of the Group's subsidiaries at the end of the reporting
period are as follows:
Name of subsidiary Principal activity Place of Proportion of ownership
incorporation interest and voting
and operation power held by the
Group (%)
2022 2021
Wholesale distribution
1) Likewise Floors of floor coverings
Limited and associated products Great Britain 100 100
Wholesale distribution
of floor coverings
2) H&V Carpets BVBA and associated products Belgium 100 100
3) Valley Wholesale
Carpets (2004) Limited Holding company Great Britain 100 -
4) Valley Wholesale
Carpets Limited (100%
subsidiary of Valley Wholesale distribution
Wholesale Carpets of floor coverings
(2004) Limited) and associated products Great Britain 100 -
5) Delta Carpets (Holdings)
Limited (100% subsidiary
of Likewise Floors
Limited) Holding company Great Britain 100 -
6) Delta Carpets Limited Dormant following
(100% subsidiary of transfer of trade
Delta Carpets (Holdings) and assets to Likewise
Limited) Floors Limited Great Britain 100 -
7) William Armes Holdings
Limited Holding company Great Britain 100 100
8) William Armes Limited
(100% subsidiary of
William Armes Holdings
Limited) Dormant company Great Britain 100 100
9) A&A Carpets Limited Dormant company Great Britain 100 100
10) Likewise Trading
Limited Holding company Great Britain 100 100
11) Lewis Abbott Limited
(100% subsidiary of
Likewise Trading Limited) Dormant company Great Britain 100 100
12) Factory Flooring
Outlet Ltd (100% subsidiary
of Likewise Floors
Limited) Dormant company Great Britain 100 100
13) Likewise Limited Dormant company Great Britain 100 100
Following acquisition, on 1 April 2022, the trade and assets of
Delta Carpets Limited were transferred to Likewise Floors
Limited.
The registered offices of H&V Carpets BVBA are
Nijverheidsstraat 26, 8760 Meulebeke, Belgium. The registered
offices of all other companies within the Group are Unit 4 Radial
Park, Radial Way, Birmingham Business Park, Solihull, England, B37
7WN.
Company - Shares in Group undertakings
2022 2021
Note GBP GBP
At 1 January 11,738,831 12,555,774
Additions 37 30,158,850 -
Impairment following transfer of trade
of subsidiaries - (891,770)
Share options 221,589 74,827
---------- ----------
42,119,270 11,738,831
========== ==========
On 14 January 2022, the Company acquired the entire issued share
capital of Valley Wholesale Carpets (2004) Limited and its wholly
owned subsidiary for consideration of GBP29,971,350 see note 37 for
further details.
On 1 April 2022, Likewise Floors Limited, a subsidiary of the
Company, acquired the entire issued share capital of Delta Carpets
(Holdings) Limited and its wholly owned subsidiary for
consideration of GBP3,000,135. This consideration included 500,000
new GBP0.01 shares in Likewise Group Plc valued at GBP187,500 at
the date of acquisition. This has been included in the additions
figure above as a further investment in Likewise Floors
Limited.
The Group considers impairment of its subsidiaries annually,
this is assessed in the context of the Group's structure, and if
appropriate an impairment provision is made.
18. Inventories
Group
2022 2021
GBP GBP
Finished goods and goods for resale 18,388,527 10,256,740
---------- ------------
18,388,527 10,256,740
2022 2021
GBP GBP
Amounts of inventories recognised as an expense
during the year 87,172,444 42,350,337
---------- -------------
Amounts of inventories impaired during the year 395,225 128,875
========== =============
The Company did not hold any inventories in either the current
or prior year.
19. Trade and other receivables
Group
2022 2021
GBP GBP
Trade receivables 12,007,770 7,639,636
Less: provision for impairment of trade receivables (302,989) (117,799)
Trade receivables -- net 11,704,781 7,521,837
Prepayments and accrued income 1,586,490 893,103
Other receivables 2,282,032 1,496,983
------------------- -----------
Total trade and other receivables 15,573,303 9,911,923
Less: current portion -- trade receivables (11,704,781) (7,521,837)
Less: current portion -- prepayments and accrued
income (1,586,490) (893,103)
Less: current portion -- other receivables (2,282,032) (1,360,135)
------------------- -----------
Total current portion (15,573,303) (9,775,075)
------------------- -----------
Total non--current portion - 136,848
=================== ===========
Company
2022 2021
GBP GBP
Receivables from group undertakings 8,265,009 6,230,742
----------- ----------------
Total financial assets other than cash and cash
equivalents classified as loans and receivables 8,265,009 6,230,742
Prepayments and accrued income 72,722 102,376
Other receivables 31,205 11,475
----------- ----------------
Total trade and other receivables 8,368,936 6,344,593
Less: current portion -- prepayments and accrued
income (72,722) (102,376)
Less: current portion -- other receivables (31,205) (11,475)
Less: current portion -- receivables from related
parties (8,265,009) (6,230,742)
----------- ----------------
Total current portion (8,368,936) (6,344,593)
----------- ----------------
Total non--current portion - -
=========== ================
All of the above amounts are financial assets of the Group and
Parent Company except certain prepayments.
The Directors consider the carrying value of Group trade and
other receivables is approximate to its fair value, after
incorporating an impairment provision of GBP302,989 (2021:
GBP117,799).
Trade receivables comprise amounts due from customers for goods
sold. The Group's normal trade credit terms range from 30 to 60
days and therefore all are classified as current. There are a
limited number of customers who are granted extended credit terms
but these are not considered material to the financial statements.
Trade receivables are recognised initially at the amount of
consideration that is unconditional. The Group holds the trade
receivables with the objective to collect the contractual cash
flows and therefore measures them subsequently at amortised
cost.
The Group's credit risk is primarily attributable to its trade
receivables. The amounts presented in the Consolidated Statement of
Financial Position are net of allowances for doubtful receivables.
An allowance for impairment is made where there is an identified
loss event which, based on previous experience, is evidence of a
reduction in the recoverability of the cash flows. The Group has no
significant concentration of credit risk, with exposure spread over
a large number of customers.
Group Group
2022 2021
GBP GBP
Not more than 30 days 6,360,941 4,118,045
More than 30 days but not more than 60 days 3,638,050 2,323,728
More than 60 days but not more than 90 days 986,714 560,072
More than 90 days but not more than 120 days 135,723 176,091
More than 120 days 886,342 461,700
Loss allowance (302,989) (117,799)
---------- ----------
11,704,781 7,521,837
========== ==========
The expected credit loss allowance is calculated using a
weighted probability of loss based on age of the receivable:
2022 ECL
GBP
More than 90 days but not more than 120 days
-- 5% (adjusted -- see below) 135,723 6,786
More than 120 days -- 50% (adjusted for payment
plans -- see below) 539,632 269,816
Additional loss allowance - 26,387
------- -------
675,355 302,989
======= =======
The debtors balance to which the ECL has been applied has been
adjusted where there are specific payment plans in place.
2021
GBP
Reconciliation of ECL allowance balance
Balance at 1 January 117,799
ECL allowance charged to profit or loss 238,201
Other movements (53,011)
--------
302,989
========
The carrying amounts of the trade receivables include
receivables which are subject to a factoring agreement. Under this
arrangement, the subsidiary trading companies have transferred the
relevant receivables to the factor in exchange for cash and are
prevented from selling or pledging the receivables. However, the
subsidiaries retain the late payment and credit risk. The Group
therefore continues to recognise the transferred assets in their
entirety in its Consolidated Statement of Financial Position. The
amount repayable under the factoring agreement is presented as
secured borrowing. The Group considers the held to collect business
model to remain appropriate for these receivables and hence
continues measuring them at amortised cost.
The relevant carrying amounts are:
2022 2021
GBP GBP
Factored receivables 5,851,797 4,295,893
----------- -----------
Associated secured borrowings (4,389,016) (2,359,543)
20. Cash and cash equivalents
Group Group Company Company
2022 2021 2022 2021
GBP GBP GBP GBP
Cash at bank and in hand 5,913,155 8,447,550 689,259 7,077,876
--------- --------- ------- ---------
5,913,155 8,447,550 689,259 7,077,876
========= ========= ======= =========
21. Trade and other payables
Group
2022 2021
GBP GBP
Trade payables 18,106,217 13,315,768
Other payables 429,321 238,210
Accruals 1,727,216 1,398,933
------------- ----------------
Total financial liabilities, excluding loans
and borrowings, classified as financial liabilities
measured at amortised cost 20,262,754 14,952,911
Other payables -- tax and social security payments 1,707,672 849,123
Deferred consideration on acquisition of subsidiaries 5,380,365 -
------------- ----------------
Total trade and other payables 27,350,791 15,802,034
Less: current portion -- trade payables (18,106,217) (13,315,768)
Less: current portion -- other payables (2,136,993) (1,087,333)
Less: current portion -- accruals (1,727,216) (1,398,933)
Less: current portion -- deferred consideration (1,000,000) -
------------- ----------------
Total current portion (22,970,426) (15,802,034)
------------- ----------------
Total non--current position 4,380,365 -
============= ================
Company
2022 2021
GBP GBP
Trade payables 27,657 126,363
Payables to group undertakings 9,569,537 1,699,865
Other payables 1,350 7,875
Accruals 480,257 140,456
------------ -----------
Total financial liabilities, excluding loans
and borrowings, classified as financial liabilities
measured at amortised cost 10,078,801 1,974,559
Other payables -- tax and social security payments 116,772 58,005
Deferred consideration on acquisition of subsidiaries 4,984,750 -
------------ -----------
Total trade and other payables 15,180,323 2,032,564
Less: current portion -- trade payables (27,657) (126,363)
Less: current portion -- payables to related
parties (9,569,537) (1,699,865)
Less: current portion -- other payables (118,122) (65,880)
Less: current portion -- accruals (480,257) (140,456)
Less: current portion -- deferred consideration (1,000,000) -
------------ -----------
Total current portion (11,195,573) (2,032,564)
------------ -----------
Total non--current position 3,984,750 -
============ ===========
Trade payables and accruals principally comprise amounts
outstanding in relation to trade purchases and ongoing costs. Trade
payables are unsecured and the Group has financial risk management
procedures in place to ensure that all payables are paid within
pre--agreed credit terms.
The Directors consider the carrying value of trade and other
receivables is approximate to its fair value due to their short
term nature.
Included within tax and social security payments for the Group
is GBPNil (2021 -- GBP71,749) relating to VAT deferred under the
government's COVID--19 VAT payment deferral scheme.
All of the above amounts are financial liabilities of the Group
and Parent Company except social security and other taxes.
22. Loans and borrowings
Group
2022 2021
GBP GBP
Non--current
Bank loans -- secured 1,456,025 1,640,563
Lease liabilities 18,766,025 10,488,881
---------- ----------
20,222,050 12,129,444
Current
Bank loans and invoice discounting facility 4,595,139 2,498,234
Lease liabilities 3,182,373 1,681,658
---------- ----------
7,777,512 4,179,892
---------- ----------
Total loans and borrowings 27,999,562 16,309,336
========== ==========
Company
2022 2021
GBP GBP
Non--current
Bank loans -- secured 1,456,025 1,640,563
Lease liabilities 5,226,397 -
--------- ---------
6,682,422 1,640,563
Current
Bank loans -- secured 206,123 138,691
Lease liabilities 320,191 -
--------- ---------
526,314 138,691
--------- ---------
Total loans and borrowings 7,208,736 1,779,254
========= =========
The Directors consider that the carrying amount of the invoice
discounting facility and bank loan approximates their fair
value.
The invoice discounting facility is secured against the related
trade debtor balances and by a floating charge over the assets of
the Group. The invoice discounting facility is denominated in
Sterling and Euro.
The invoice discounting facility is held for Likewise Floors
Limited and has a fixed service charge of GBP18,000 per annum.
2022 2021
GBP GBP
Amounts repayable under bank loans -- Group
and Company
Within one year 206,123 138,691
In the second to fifth year inclusive 706,822 597,494
Beyond five years 749,203 1,043,069
--------- ---------
1,662,148 1,779,254
========= =========
During 2018 the Company obtained a bank loan of GBP2,280,000.
Repayments commenced on 5th August 2018 and will continue until 5th
January 2033. The loan is secured by a fixed and floating charge
over the Group's assets. The loan carries interest at on a floating
rate basis with interest at Bank of England rate plus a margin of
2.95%.
This loan is at a floating interest rate and exposes the Group
to fair value interest rate risk.
23. Leases
Group
(i) Leases as a lease
The Group's leases include leases for buildings, plant and motor
vehicles. The average lease term is 12 years for buildings and 4
years for other fixed assets.
A new leasehold distribution centre was established in July 2022
in Newbury in which the newly formed Likewise South division
operates. The addition of this site led to an increase in lease
liabilities of GBP0.9m at inception of the lease. Furthermore, new
leases were entered into in Q4 2022, in relation to two new sites
for Likewise Scotland and Likewise London respectively. Whilst
leases were agreed in 2022, these new sites are to become
operational in 2023. The new site in Scotland in particular
significantly increases the footprint of the facility from the
previous site to help improve logistics capacity in the North of
England as well as fulfil further growth of this division. These
new leases contributed additional lease liabilities of GBP5.5m at
inception.
Various lease incentives of rent free or reduced rent periods
are included in the measurement of the right of use asset and lease
liability at inception of the lease. These predominantly relate to
the Group's property lease portfolio.
Lease liabilities are due as follows:
2022 2021
GBP GBP
Contractual undiscounted cash flows due
Not later than one year 3,357,091 1,814,829
Between one year and five years 11,018,626 5,947,403
Later than five years 15,073,388 6,067,895
---------- ----------
29,449,105 13,830,127
========== ==========
Lease liabilities included in the Consolidated
Statement of Financial Position at 31 December 21,948,398 12,170,539
========== ==========
Non--current 18,766,025 10,488,881
Current 3,182,373 1,681,658
========== ==========
The following amounts in respect of leases have been recognised
in profit or loss:
2022 2021
GBP GBP
Interest expense on lease liabilities 571,009 317,913
Depreciation on lease liabilities 2,049,591 1,283,306
Impairment on lease liabilities - 140,249
Profit on termination of lease liabilities (34,535) (80,847)
Expense relating to short--term leases 324,539 277,620
========= =========
Company
(ii) Leases as a lessee
The Company's leases include leases for buildings and other
assets. The average lease term is 15 years for buildings and 3
years for other fixed assets.
Lease liabilities are due as follows:
2022 2021
GBP GBP
Contractual undiscounted cash flows due
Not later than one year 328,506 -
Between one year and five years 2,100,777 -
Later than five years 7,280,760 -
9,710,043 -
=========== ====
Lease liabilities included in the Company Statement
of Financial Position at 31 December 5,546,588 -
=========== ====
Non--current 5,226,397 -
Current 320,191 -
=========== ====
The following amounts in respect of leases have been recognised
in profit or loss:
2022 2021
GBP GBP
Interest expense on lease liabilities 42,148 2,661
Depreciation on lease liabilities 92,717 25,500
Impairment of lease liabilities - 140,249
Expense relating to short--term leases 25,704 -
====== =======
24. Financial instruments
Classification of financial instruments
The fair value hierarchy groups financial assets and liabilities
into three levels based on the significance of inputs used in
measuring the fair value of the financial assets and
liabilities.
The fair value hierarchy has the following levels:
-- Level 1: quoted prices (unadjusted) in active markets for
identical assets or liabilities;
-- Level 2: inputs other than quoted prices included within
Level 1 that are observable for the asset or liability, either
directly (i.e. as prices) or indirectly (i.e. derived from prices);
and
-- Level 3: inputs for the asset or liability that are not based
on observable market data (unobservable inputs).
The level within which the financial asset or liability is
classified is determined based on the lowest level of significant
input to the fair value measurement.
The only financial instruments the Group holds which are
measured at fair value through the Income Statement (as level 2
above) are forward currency contracts (see note 26) and deferred
consideration in relation to shares issued on acquisition of
subsidiaries (see note 37). The deferred consideration liability
held at fair value at 31 December 2022 totalled GBP4,380,365. All
other financial assets and liabilities are held at amortised
cost.
The tables below set out the Group's accounting classification
of each class of its financial assets and liabilities.
Group Group Company Company
2022 2021 2022 2021
GBP GBP GBP GBP
Financial assets at amortised
cost
Trade receivables 11,704,781 7,521,837 - -
Amounts owed by Group undertakings - - 8,265,009 6,230,742
Other receivables 2,282,032 1,496,983 31,205 11,475
Cash and cash equivalents 5,913,155 8,447,550 689,259 7,077,876
19,899,968 17,466,370 8,985,473 13,320,093
============ ========== ========= ==========
All of the above financial assets' carrying values are
approximate to their fair values, as at each reporting date
disclosed.
Group Group Company Company
2022 2021 2022 2021
GBP GBP GBP GBP
Non current financial liabilities
Bank loans -- amortised cost 1,456,025 1,640,563 1,456,025 1,640,563
Deferred consideration -- held
at fair value 4,380,365 - 3,553,950 -
5,836,390 1,640,563 5,009,975 1,640,563
=========== ========= ========= =========
Group Group Company Company
2022 2021 2022 2021
GBP GBP GBP GBP
Current financial liabilities
at amortised cost
Trade payables 18,106,217 13,315,768 27,657 126,363
Amounts owed to Group undertakings - - 9,569,537 1,699,865
Deferred consideration on acquisition
of subsidiaries 1,000,000 - 1,000,000 -
Other payables 429,321 238,210 1,350 7,875
Accruals 1,727,216 1,398,933 480,257 140,456
Invoice discounting facility 4,389,016 2,359,543 - -
Bank loans -- current 206,123 138,691 206,123 138,691
25,857,893 17,451,145 11,284,924 2,113,250
============ ========== ========== =========
All of the above financial liabilities' carrying values are
considered by management to be approximate to their fair values, as
at each reporting date disclosed.
25. Provisions
Group
Dilapidation Onerous
provision lease provision Total
GBP GBP GBP
At 1 January 2022 114,676 88,000 202,676
Utilised during the year (64,601) (88,000) (152,601)
At 31 December 2022 50,075 - 50,075
============ ================ =========
Due within one year or less 50,075 -50,075
50,075 -50,075
====== ======
Company
Onerous
lease provision
GBP
At 1 January 2022 88,000
Utilised during the year (88,000)
At 31 December 2022 -
================
26. Financial instrument risk exposure and management
26.1 Financial risk management objectives
The Group's operations expose it to degrees of financial risk
that include liquidity risk, credit risk, interest rate risk, and
foreign currency risk.
This note describes the Group's objectives, policies and process
for managing those risks and the methods used to measure them.
Further quantitative information in respect of these risks is
presented in the notes above.
26.2 Foreign currency risk
Most of the Group's transactions are carried out in GBP.
Exposures to foreign currency exchange rates arise from the Group's
overseas sales and purchases, which are denominated in a number of
currencies, primarily EUR.
The Group assesses exposure and takes out forward currency
contracts to mitigate this foreign exchange risk. As at the 31
December 2022, the value of forward contracts held by the
subsidiary companies were as follows:
Likewise Floors Limited held forward Euro contracts totalling
1,191,033 Euros (2021 618,000 Euros) and forward
USD contracts totalling $299,300 (2021 $1,182,000).
These contracts crystallise between January and May 2023.
26.3 Interest rate risk
The Group has secured debt consisting of an invoice discounting
facility and bank loan.
The interest on the bank loan and discounting facility are at
floating rates, however interest rate risk is considered to be
limited due to the low current interest rates and economic climate.
The Directors have performed sensitivity analysis which shows the
impact on cash flows for the coming year would be less than GBP0.4m
even if interest rates were to rise by 5% which is considered by
the Directors to be highly unlikely.
The Group's only other exposure to interest rate risk is the
interest received on the cash held on deposit, which is
immaterial.
26.4 Credit risk
The Group's credit risk is primarily attributable to its cash
balances and trade receivables.
In respect of trade and other receivables, the Group is not
exposed to any significant credit risk exposure to any single
counter party or any group of counterparties having similar
characteristics. Trade receivables consist of a large number of
customers in various industries and geographical areas. Based on
historical information about customer default rates management
consider the credit quality of trade receivables that are not past
due or impaired to be good.
The ageing profile of the trade receivables balance can be seen
in note 19 above.
The Group's total credit risk amounts to the total of the sum of
the receivables and cash and cash equivalents. At the 2022
reporting date this amounts to GBP19,899,968 (2021:
GBP17,466,370).
26.5 Liquidity risk
Liquidity and interest risk tables
Prudent liquidity risk management includes maintaining
sufficient cash balances to ensure the Group can meet liabilities
as they fall due, and ensuring adequate working capital using
invoice discounting arrangements.
In managing liquidity risk, the main objective of the Group is
therefore to ensure that it has the ability to pay all of its
liabilities as they fall due. The Group monitors its levels of
working capital to ensure that it can meet its debt repayments as
they fall due.
The tables below show the undiscounted cash flows on the Group's
financial liabilities on the basis of their earliest possible
contractual maturity.
Carrying 3 -- 12 More than
amount Total 1 -- 3 months months 1 -- 2 years 2 -- 5 years 5 years
GBP GBP GBP GBP GBP GBP GBP
31 December 2022
Trade payables 18,106,217 18,106,217 18,106,217 - - - -
Other taxation and
social security 1,707,672 1,707,672 1,707,672 - - - -
Other payables 429,321 429,321 429,321 - - - -
Accruals 1,727,216 1,727,216 1,727,216 - - - -
Lease liabilities 21,948,398 29,449,105 855,576 2,501,515 3,490,139 7,528,487 15,073,388
Invoice discounting
facility 4,389,016 4,389,016 4,389,016 - - - -
Bank loans 1,662,148 2,293,057 53,013 159,037 212,050 636,150 1,232,807
Deferred consideration 5,380,365 5,380,565 1,000,000 - 4,380,565 - -
55,350,353 63,482,169 28,268,031 2,660,552 8,082,754 8,164,637 16,306,195
========== ========== ============= ========== ============ ============ ==========
Carrying 3 -- 12 More than
amount Total 1 -- 3 months months 1 -- 2 years 2 -- 5 years 5 years
GBP GBP GBP GBP GBP GBP GBP
31 December 2021
Trade payables 13,315,768 13,315,768 13,315,768 - - - -
Other taxation and
social security 849,123 849,123 849,123 - - - -
Other payables 238,210 238,210 238,210 - - - -
Accruals 1,398,933 1,398,933 1,398,933 - - - -
Lease liabilities 12,170,539 13,830,127 453,707 1,361,122 1,315,791 4,631,612 6,067,895
Invoice discounting
facility 2,359,543 2,359,543 2,359,543 - - - -
Bank loans 1,779,254 2,086,831 47,332 141,994 189,326 567,978 1,140,201
32,111,370 34,078,535 18,662,616 1,503,116 1,505,117 5,199,590 7,208,096
========== ========== ============= ========== ============ ============ ==========
27. Capital management
The Group's capital management objectives are:
-- To ensure the Group's ability to continue as a going concern; and
-- To provide long term returns to shareholders.
The Group defines and monitors capital on the basis of the
carrying amount of equity plus its outstanding borrowings, less
cash and cash equivalents as presented on the face of the
Consolidated Statement of Financial Position as detailed below:
2022 2021
GBP GBP
Equity 39,111,269 22,353,963
Borrowings 27,999,562 16,309,336
Cash and cash equivalents (5,913,155) (8,447,550)
61,197,676 30,215,749
============ ===========
28. Share capital
Consolidated and Company
Authorised
2022 2022
Number GBP
Shares treated as equity
Ordinary shares of GBP0.01 each 243,835,980 2,438,360
243,835,980 2,438,360
============= =========
Issued and fully paid
2022 2022
Number GBP
Ordinary shares of GBP0.01 each
At 1 January 192,374,194 1,923,742
Shares issued 51,461,786 514,618
At 31 December 243,835,980 2,438,360
=========== =========
The Company has one class of ordinary share which carry no right
to fixed income.
On 11 January 2022, the Company allotted 40,000,000 new GBP0.01
Ordinary Shares for consideration of GBP0.35 per share, totalling
GBP14,000,000.
On 11 January 2022, the Company also allotted a further
5,000,000 new GBP0.01 Ordinary Shares at par as part of the
consideration for the acquisition of Valley Wholesale Carpets
(2004) Limited for more detail see note 37.
On 28 January 2022, the Company allotted 5,714,286 new GBP0.01
Ordinary Shares for consideration of GBP0.35 per share, totalling
GBP2,000,000.
On 23 March 2022, the Company allotted 204,000 new GBP0.01
Ordinary Shares for consideration of GBP0.10 per share, totalling
GBP20,400 and allotted a further 2,500 new GBP0.01 Ordinary Shares
for consideration of GBP0.21 per share, totalling GBP525. These
shares were issued under the Company's SAYE scheme.
On 4 April 2022, the Company allotted 500,000 new GBP0.01
Ordinary Shares where the share price was GBP0.375 per share as
part of the consideration for the acquisition of Delta Carpets
(Holdings) Limited by Likewise Floors
Limited, a subsidiary company for more detail see note 37.
On 6 September 2022, the Company allotted 41,000 new GBP0.01
Ordinary Shares for consideration of GBP0.10 per share totalling
GBP4,100. These shares were issued under the Company's SAYE
scheme.
29. Share premium
2022 2021
GBP GBP
Share premium at 1 January 22,458,816 13,389,295
Premium on shares issued in the year 17,447,908 9,602,898
Share issue costs (522,099) (533,377)
Reduction of share premium (22,000,000) -
Share premium at 31 December 17,384,625 22,458,816
============ ==========
On 22 February 2022, the Company reduced the share premium
account by GBP22,000,000 and this balance was transferred to the
distributable retained earnings of the Company.
See note 28 for details of shares issued in the year.
30. Reserves
Share capital
This represents the nominal value of shares that have been
issued.
Share premium
This reflects proceeds generated on issue of shares in excess of
their nominal value and is a non distributable reserve.
Revaluation reserve
This is used to record increases in the fair value of fixed
assets and decreases to the extent that the decrease relates to a
previous increase on the same asset. The revaluation reserve is a
non distributable reserve. The excess depreciation on revalued
assets in comparison to historical cost depreciation is transferred
from the revaluation reserve to retained earnings.
Foreign exchange reserve
This reflects the exchange differences on the translation of the
foreign subsidiary.
Retained earnings
This includes all current and prior period gains and losses.
Share option reserve
This represents the cumulative fair value of options
granted.
Warrant reserve
This represents the cumulative fair value of warrants
granted.
31. Warrants over ordinary shares
On 9 January 2019, the Company issued warrants over 1,800,000
shares as part of the IPO at a price of GBP0.10 per share.
On 1 May 2019, the Company issued warrants over 1,000,000 shares
as part of the acquisition of H&V Carpets BVBA at a price of
GBP0.30 per share. The fair value of the warrants at the date of
grant was considered to be GBP128,170.
Warrants are exercisable at any date in the ten years following
the date of grant and none had been exercised as at 31 December
2022.
32. Analysis of amounts recognised in other comprehensive income
Foreign
Revaluation exchange Retained
Note reserve reserve earnings
GBP GBP GBP
Year to 31 December 2022
Property revaluation 309,957 - -
Actuarial losses on pension 33 - - (5,000)
Translation in relation to foreign subsidiary - 16,138 -
Transfer to/from retained earnings (53,700) - 53,700
256,257 16,138 48,700
=========== ========= =========
Foreign
Revaluation exchange Retained
Note reserve reserve earnings
GBP GBP GBP
Year to 31 December 2021
Property revaluation 1,330,356 - -
Actuarial losses on pension 33 - - (20,000)
Translation in relation to foreign subsidiary - (17,222) -
Transfer to/from retained earnings (19,000) - 19,000
1,311,356 (17,222) (1,000)
=========== ========= =========
33. Retirement plans
Defined contribution scheme
The Group operates a defined contribution pension scheme, the
assets of which are held separately from those of the Group in an
independently administered fund. Contributions made by the Group to
the scheme during the year amounted to GBP500,267 (2021
GBP298,167). The amount outstanding at the reporting date in
respect of
contributions to the scheme were GBP114,241 (2021 GBP45,543).
(i) Defined benefit scheme characteristics and funding
Likewise Floors Limited, a subsidiary of the Group, operates a
pension scheme providing benefits based on final pensionable pay.
The Scheme is closed to new members and is closed to future
accrual. For pensions earned after 5 April 1997 and for Guaranteed
Minimum Pensions earned between 6 April 1998 and 5 April 1997,
increases in payment will be in line with CPI rather than RPI.
Revaluations of pensions in deferment are linked to RPI.
The assets of the Scheme are held separately from those of the
Group in trustee administered funds. The level of contributions is
determined by a qualified actuary on the basis of triennial
valuations. The latest full valuation was completed by an
independent actuary on 28 March 2022.
The contribution paid for the year ended 31 December 2022 was
GBP5,000 (2021 GBP20,000). The Group expects to contribute GBPNil
to the scheme in the coming financial year.
Given that the defined benefit pension scheme is in surplus at
31 December 2022, there is expected to be no material impact on the
Group's future cash flows.
(ii) Reconciliation of defined benefit obligation and fair value
of scheme assets
All defined benefit schemes are exposed to materially the same
risks and therefore the reconciliation below is presented in
aggregate.
Defined benefit obligation Fair value of scheme Effect of asset Net defined scheme
assets ceiling liability
2022 2021 2022 2021 2022 2021 2022 2021
GBP GBP GBP GBP GBP GBP GBP GBP
Balance at 1 January 1,731,000 1,804,000 (1,928,000) (1,846,000) 197,000 42,000 - -
Interest cost 32,000 23,000 (32,000) (23,000) - - - -
Included in profit or
loss 1,763,000 1,827,000 (1,960,000) (1,869,000) 197,000 42,000 - -
=========== =========== ============= ============= ========= ======== ========= ===========
Remeasurement loss
Actuarial loss from:
-- Demographic
assumptions (402,000) (4,000) - - - - (402,000) (4,000)
-- Limited by asset
ceiling - - - - 114,000 155,000 114,000 155,000
Return on plan assets
(excluding
interest) - - 293,000 (131,000) - - 293,000 (131,000)
Included in other
comprehensive
income (402,000) (4,000) 293,000 (131,000) 114,000 155,000 5,000 20,000
=========== =========== ============= ============= ========= ======== ========= ===========
Employer contributions - - (5,000) (20,000) - - (5,000) (20,000)
Benefits paid (95,000) (92,000) 95,000 92,000 - - - -
Other movements (95,000) (92,000) 90,000 72,000 - - (5,000) (20,000)
Balance at 31 December 1,266,000 1,731,000 (1,577,000) (1,928,000) 311,000 197,000 - -
=========== =========== ============= ============= ========= ======== ========= ===========
Composition of plan assets:
GBP GBP
Equities / Property 861,000 1,301,000
Cash 76,000 111,000
Bonds 640,000 516,000
Total plan assets 1,577,000 1,928,000
========= =========
Actuarial assumption
The principal actuarial assumptions used in the determining
calculating the present value of the defined benefit obligation
(weighted average) include:
2022 2021
Discount rate 4.80 % 1.90 %
Future salary increases 2.50 % 2.40 %
Inflation assumption (RPI) 3.30 % 3.20 %
Mortality rates -- for male
aged 65 now 1.00 % 1.00 %
Mortality rates -- for female
aged 65 now 1.00 % 1.00 %
Longevity at retirement age
(current pensioners)
-- Males 86.2 years 86.1 years
-- Females 88.5 years 88.5 years
Longevity at retirement age
(future pensioners)
-- Males 87.2 years 87.1 years
-- Females 89.7 years 89.6 years
Sensitivity analysis
Analysis of the sensitivity to the principal assumptions of the
present value of the defined benefit obligation was performed:
-- A decrease in the interest rates of 0.5% would increase
liabilities by 6.3%;
-- A decrease in inflation of 0.5% would decrease the
liabilities by 5.0%; and
-- An increase in the long term rate of mortality improvement of
0.5% would increase the liabilities by 1.5%.
34. Share based payments
Equity settled share option plan
The Company has a Savings Related Share Option Plan ("SAYE") for
all employees of the Group. In accordance with the terms of the
plan, as approved by shareholders, employees of the Group may be
granted options to purchase ordinary shares. There are no
performance criteria for the SAYE and options are issued to
participants in accordance with HMRC rules. Vesting is conditional
on continuity of service.
As at 31 December 2021, 7,245,648 share options remained active.
During the current year 2,279,995 new options were issued and
1,137,313 options lapsed on employees leaving the Group. During the
current year 247,500 options were exercised with an weighted
average option price of GBP0.10 per share. The remaining
contractual life of the remaining 8,140,830 options is
approximately 2.25 years.
In addition, as at 31 December 2020, 11,700,000 share options
remained active which were issued under Enterprise Management
Incentives (EMIs). During the current year no new options were
issued or exercised and 350,000 options lapsed on employees leaving
the Group. The remaining contractual life of the remaining
11,350,000 options is approximately 2 years.
During the year, 4,250,000 new options were issued to management
under a Company Share Option Plan (CSOP). 100,000 options lapsed in
the year on employees leaving the Group. The remaining contractual
life of the remaining 4,150,000 options is approximately 3.5
years.
Share options are valued using the Black Scholes model. The
inputs to the model are the option price and share price at date of
grant, expected volatility (20%), expected dividend rate (0%) and
risk free rate of return (4%). The model has been adjusted for
expected behavioural considerations.
The cost of options is amortised to the Statement of
Comprehensive Income over the service life of the option
resulting in a charge of GBP319,678 for the year (2021 GBP149,210).
35. Related party transactions
Balances and transactions between the Company and its
subsidiaries, which are related parties of the Company, have been
eliminated on consolidation and are not disclosed in this note.
A rent charge and early termination settlement of GBP78,179
(2021 rent charge of GBP28,000) was paid in the year for leased
office premises from a subsidiary of REI plc, a Company controlled
by the Group's Non Executive Chairman. Following the move of the
Group's head office to the Radial Park facility, no further fees
are payable in respect of the Group's previous head office.
36. Changes in liabilities arising from financing activities
Borrowing Borrowing
Cash and due within due after
cash equivalents one year one year Total
GBP GBP GBP GBP
Net debt at 31 December 2020 2,820,895 (2,224,566) (6,749,655) (6,153,326)
Cash flows 5,626,655 - - 5,626,655
Repayment of bank loans - (39,743) 139,105 99,362
Increase in invoice discounting
facility - (1,266,279) - (1,266,279)
New lease liabilities - (1,535,929) (5,518,894) (7,054,823)
Repayment of lease liabilities - 886,625 - 886,625
Net debt at 31 December 2021 8,447,550 (4,179,892) (12,129,444) (7,861,786)
================= =========== ============ ============
Net debt at 31 December 2021 8,447,550 (4,179,892) (12,129,444) (7,861,786)
Cash flows (2,534,395) - - (2,534,395)
Repayment of bank loans - (67,432) 184,538 117,106
Increase in invoice discounting
facility - (2,029,473) - (2,029,473)
New / amended lease liabilities - (1,500,715) (10,725,680) (12,226,395)
Repayment of lease liabilities - - 2,448,536 2,448,536
Net debt at 31 December 2022 5,913,155 (7,777,512) (20,222,050) (22,086,407)
================= =========== ============ ============
37. Business combinations during the year
37.1 Subsidiaries acquired
On 14 January 2022, the Company acquired the entire issued share
capital of Valley Wholesale Carpets (2004) Limited and its wholly
owned subsidiary Valley Wholesale Carpets Limited. Consideration of
GBP29,971,350 for the purchase was in the form of GBP14,000,000
cash, GBP10,000,000 cash extracted from the acquired company,
GBP1,000,000 deferred cash consideration and the issue of 5,000,000
new shares of GBP0.01 each in Likewise Group Plc valued at
GBP1,750,000 at the date of acquisition and which includes a
guaranteed cash payment of the difference between GBP1 per share
and the share price at 14 January 2024. The fair value of this
arrangement as at the grant date, being GBP3,221,350, has been
reflected in the purchase consideration outlined below as
contingent consideration.
On 1 April 2022, Likewise Floors Limited, a subsidiary of the
Company, acquired the entire issued share capital of Delta Carpets
(Holdings) Limited and its wholly owned subsidiary Delta Carpets
Limited. Consideration of GBP3,000,135 was paid in the form of
GBP1,500,000 cash, GBP1,000,000 cash extracted from the acquired
companies and 500,000 new GBP0.01 shares in Likewise Group Plc
valued at GBP187,500 at the date of acquisition which includes a
guaranteed cash payment of the difference between GBP1 per share
and the share price at 1 April 2024. The fair value of this
arrangement as at the grant date, being GBP312,635, has been
reflected in the purchase consideration outlined below as
contingent consideration.
Proportion
of voting
Date of equity interests Consideration
Name Principal activity acquisition acquired transferred
% GBP
Wholesale distribution
of floor coverings
Valley Wholesale and associated
Carpets products 14/01/22 100 29,971,350
Wholesale distribution
of floor coverings
and associated
Delta Carpets products 01/04/22 100 3,000,135
32,971,485
=============
37.2 Consideration transferred
Valley Wholesale
Carpets Delta Carpets
GBP GBP
Cash 24,000,000 2,500,000
Deferred consideration 1,000,000 -
Issue of shares in Likewise Group Plc 1,750,000 187,500
Contingent consideration arrangement 3,221,350 312,635
29,971,350 3,000,135
================ =============
37.3 Assets acquired and liabilities recognised at the date of
acquisition
Valley Wholesale
Carpets Delta Carpets Total
GBP GBP GBP
Non--current assets
Property, plant and
equipment 16,792,652 129,554 16,922,206
Intangible assets - 1,054,394 1,054,394
16,792,652 1,183,948 17,976,600
============================== ============================= ==============================
Current assets
Cash and cash
equivalents 11,806,785 1,152,165 12,958,950
Trade and other
receivables 1,608,512 492,986 2,101,498
Inventories 3,026,381 668,130 3,694,511
33,234,330 3,497,229 36,731,559
============================== ============================= ==============================
Non--current
liabilities
Deferred tax
liabilities (1,318,590) (280,640) (1,599,230)
31,915,740 3,216,589 35,132,329
============================== ============================= ==============================
Current liabilities
Trade and other
liabilities (2,179,254) (1,389,146) (3,568,400)
29,736,486 1,827,443 31,563,929
============================== ============================= ==============================
37.4 Goodwill arising on acquisition
Valley Wholesale
Carpets Delta Carpets Total
GBP GBP GBP
Consideration transferred 29,971,350 3,000,135 32,971,485
Fair value of identifiable net assets
acquired (29,736,486) (1,827,443) (31,563,929)
Goodwill arising on acquisition 234,864 1,172,692 1,407,556
============================= =============================== ===============================
37.5 Net cash outflow on acquisition
2022
GBP
Consideration paid in cash 26,500,000
Less: cash and cash equivalent balances acquired (12,958,950)
13,541,050
============
37.6 Impact of acquisition on the results of the Group
Likewise Group plc completed its acquisition of the entire share
capital and 100% of the voting rights of Valley Wholesale Carpets
(2004) Limited and it's wholly owned subsidiary Valley Wholesale
Carpets Limited on 14th January 2022.
Likewise Floors Limited, a wholly owned subsidiary of the Group,
acquired the entire share capital and 100% of the voting rights of
Delta Carpets Holdings Limited, and it's wholly owned subsidiary
Delta Carpets Limited on 1st April 2022.
The acquisition of Valley, increases the Group's overall market
share whilst also increasing the Group's presence in the southeast
of England, and the Midlands, offering many logistical advantages.
The acquisition of Delta Carpets further develops the geographical
presence and customer base of Likewise. Following the acquisition,
the business was integrated into Likewise' nearby Distribution in
Leeds utilising the Group's logistics network whilst enhancing the
service to customers.
Valley Wholesale Carpets contributed GBP41.2m revenue and
operating profit of GBP2.5m in the Group's annual financial
statements in 2022. This acquisition took place on 14 January 2022
and in the absence of any financial statements being produced to
this date, the year end accounts are considered sufficiently close
to not have a material impact on the profit on operations.
Delta Carpets contributed GBP3.6m revenue and operating profit
of GBP0.15m to the Group following acquisition on 1st April 2022.
Had the acquisition taken place at the beginning of the financial
year, it would have contributed GBP5.1m and GBP0.19m to revenue and
operating profit respectively. Profitability is forecast to
increase once synergies are realised following integration of the
business into Likewise post acquisition.
The contingent consideration payable in respect of the Valley
and Delta acquisitions is calculated by reference to the Likewise
share price at the future determination date. The fair value of
contingent consideration at the date of acquisition and subsequent
remeasurement dates requires significant judgements and estimates
and is sensitive to share price changes.
Contingent consideration fair value is calculated using the
Black Scholes model. The inputs to the model are the strike price
and share price at date of valuation and the date of expected
payment, expected volatility (61%), expected dividend rate (0%) and
risk free rate of return (1.7% at acquisition).
An increase or decrease in the share price by 5 pence would
result in an increase or decrease in the contingent consideration
liability of approximately GBP275,000.
38. Post balance sheet events
On 2 May 2023, the Company allotted 22,500 new GBP0.01 Ordinary
Shares for consideration of GBP0.10 per share, totalling GBP2,250
These shares were issued under the Company's SAYE scheme.
On 8 July 2022, Likewise Group Plc declared an interim dividend
of 0.2p per share. After the reporting date the Directors became
aware that aggregate dividends totalling GBP487,590 paid in the
period had been made otherwise than in accordance with the
Companies Act 2006 as unaudited interim accounts had not been filed
at Companies House prior to the dividend payment. A resolution has
been proposed at the General Meeting to be held on 27 June 2023 to
authorise the appropriation of distributable profits to the payment
of the relevant dividends and waive the entitlement of the Company
to pursue shareholders and Directors for repayment. This will
constitute a related party transaction under IAS24 'Related party
disclosures', the effect of which will be to return all parties, so
far as possible, to the position they would have been in had the
relevant dividends been made in full compliance with the Companies
Act 2006.
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END
FR UNSAROUUVARR
(END) Dow Jones Newswires
May 16, 2023 02:00 ET (06:00 GMT)
Likewise (LSE:LIKE)
過去 株価チャート
から 4 2024 まで 5 2024
Likewise (LSE:LIKE)
過去 株価チャート
から 5 2023 まで 5 2024
