29 March 2023
UP Global Sourcing Holdings plc
("Ultimate Products", the "Company" or the "Group")
INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 JANUARY 2023
FY23 outlook in line with current market expectations*
Ultimate Products, the owner of a number of leading homeware brands including Salter (the UK's oldest houseware brand, est.1760) and Beldray (est.1872), announces its interim results for the six months ended 31 January 2023.
Financial highlights
· Total revenue up 2% to £87.6m (H1 2022: £85.7m), achieved with no overall price inflation to keep our products at prices which are affordable to all consumers
o Online revenue up 78% to £22.9m (H1 2022: £12.8m), supported by continued normalisation of global supply chains
o Sales to retailers down 11% to £64.7m (H1 2022: £72.9m), hampered by caution in forward ordering arising from post-COVID overstocks amongst retailers
· Gross profit rose 3% to £21.6m (H1 2022: £20.9m), with gross margin increasing to 24.7% (H1 2022: 24.4%), driven by online sales growth
· Adjusted EBITDA** resilient at £11.2m (H1 2022: £11.2m)
· Statutory profit before tax down 5% to £9.3m (H1 2022: £9.8m), impacted by higher interest rates and the Group's Head Office investment increasing the depreciation charge
· Adjusted profit before tax** down 5% to £9.4m (H1 2022: £9.9m)
· Statutory EPS down 6% to 8.4p (H1 2022: 8.9p), with Adjusted EPS** down 5% to 8.6p (H1 2022: 9.1p)
· Interim dividend per share up 6% to 2.43p (H1 2022: 2.30p)
· Improved net bank debt/adjusted EBITDA** ratio of 1.0x (31 July 2022: 1.3x)
· Strong cash generation from operating activities of £12.8m (H1 2022: used cash of £5.0m), representing a 114% operating cash conversion
· Performance for FY23 anticipated to be in line with current market expectations
* Consensus market expectations for the financial year ending 31 July 2023 are revenues of £165.3m (actual FY22: £154.2m), adjusted EBITDA of £20.1m (actual FY22: £18.8m) and adjusted EPS of 14.8p (actual FY22: 14.3p)
**Adjusted measures are before share-based payment expense and non-recurring items.
Operational highlights
· Appointment of first dedicated Brand Director
· Successful relaunch of Petra, the German kitchen electrical brand, into the German market
· Renewal of the Group's Russell Hobbs licencing agreement on a rolling four-year basis
· Launch of the Group's inaugural ESG Strategy
· Investment in robotics yielding positive results, with hundreds of tasks now automated
· Highly productive attendance at Ambiente, the largest European Trade Fair, in Germany
· Beginning our journey to diversify our supply chain
Current trading and outlook
The Board anticipates full-year performance for FY23 will be in line with current market expectations, with H2 performance benefiting from significant growth in our online channel which is less seasonal. The Group is well placed to respond to the challenges of the current cost of living crisis given its relentless focus on delivering value and growth.
Commenting on the results, Simon Showman, Chief Executive of Ultimate Products, said:
"We have delivered a robust performance, with exceptional growth from online, amidst a tough trading environment. Our amazing team has built a resilient and scalable business, based on a strong portfolio of homeware brands with a wide range of products and channels to market.
The business has been tested by some of the toughest trading conditions and headwinds seen in recent times, but we are emerging stronger, more focused and more profitable than ever. This resilience puts us in a strong position to accelerate our growth as the macroeconomic uncertainty starts to clear. We therefore remain confident in the future prospects for Ultimate Products."
For more information, please contact:
Ultimate Products +44 (0) 161 627 1400
Simon Showman, CEO
Andrew Gossage, Managing Director
Chris Dent, Chief Financial Officer
Shore Capital +44 (0) 207 408 4090
Mark Percy
Malachy McEntyre
Powerscourt +44 (0) 207 250 1446
Rob Greening
Sam Austrums
Notes to Editors
Ultimate Products is the owner of a number of leading homeware brands including Salter (the UK's oldest houseware brand, established in 1760) and Beldray (a laundry, floor care, heating and cooling brand that was established in 1872). According to its market research, nearly 80% of UK households own at least one of the Group's products.
Ultimate Products sells to over 300 retailers across more than 40 countries, and specialises in five product categories: Small Domestic Appliances; Housewares; Laundry; Audio; and Heating and Cooling. Other brands include Progress (cookware and bakeware), Kleeneze (laundry and floorcare), Petra (small domestic appliances) and Intempo (audio).
The Group's products are sold to a broad cross-section of both large national and international multi-channel retailers as well as smaller national retail chains, incorporating discount retailers, supermarkets, general retailers and online retailers.
Founded in 1997, Ultimate Products employs over 370 staff, a significant number of whom have joined via the Group's graduate development scheme, and is headquartered in Oldham, Greater Manchester, where it has design, sales, marketing, buying, quality assurance, support functions and warehouse facilities across two sites. Manor Mill, the Group's head office, includes a spectacular 20,000 sq ft showroom that showcases each of its brands. In addition, the Group has an office and showroom in Guangzhou, China and in Cologne, Germany.
Please note that Ultimate Products is not the owner of Russell Hobbs. The company currently has licence agreements in place granting it an exclusive licence to use the "Russell Hobbs" trademark for cookware (NB this does not include Russell Hobbs electrical appliances).
For further information, please visit www.upgs.com
BUSINESS REVIEW
We are pleased to present the Interim Report for the six months ended 31 January 2023, a period in which, against an uncertain and highly challenging macro-economic environment, we have continued to invest in our strategic plans.
Brand Development
Our purpose is to provide beautiful and more sustainable products for every home, and our vision is to be the Home of Brands. We have, over the past five years, developed our portfolio of consumer goods brands to become true leaders in their respective categories. We are privileged to own Salter, the UK's oldest housewares brand, established in 1760, and Beldray, established in 1872. We have seen the highly successful relaunch of Petra, the German kitchen electrical brand, with sales surpassing £2m during the period. As demonstrated by the recent successes of Beldray, Progress and Kleeneze, we have a tried and tested approach to reinvigorating and growing our heritage brands, of which Petra is just the latest, and most international, example.
In addition, we have renewed our trademark licence agreement with Spectrum Brands, which grants us an exclusive licence to use the "Russell Hobbs" trademark in the United Kingdom, Europe, Australia and New Zealand for non-electrical kitchen and laundry products. The new agreement is on a rolling four-year basis, rather than the previous fixed-term arrangement, which was due to end in March 2023. This change significantly reduces the licencing risk, as the licence will always have four years to run, rather than having a fixed end date. It also allows us to better focus on the long-term growth of the Russell Hobbs brand, which will increase the benefits of the partnership for both Spectrum Brands and Ultimate Products.
Finally, we were delighted to appoint Tracy Carroll to the newly created role of Brand Director. Tracy joined from Helen of Troy, an American designer and marketer of consumer brands, where she served as Associate Marketing Director, and was responsible for launching and growing the OXO homeware brand in the UK. This appointment will help us refine and focus the development of our portfolio of brands, and her previous experience is already proving invaluable as we expand our outstanding stable of homeware brands across new geographies and channels.
The brand journey that we have been on has seen us pivot from a licence holder to a brand owner, and this gives the business a resilient core from which we can expand and grow. Combined with our renewed focus on marketing, we will now be able to fully realise the sales potential of all of our brands in line with our purpose of providing beautiful and more sustainable products for every home.
Customer Diversification
As a business we continue to diversify our customer base to mitigate risk and increase the predictability of our sales. In the current period we have seen the benefits of this strategy in full effect. During a period of significant uncertainty around consumer sentiment, Group revenues increased 2% to £87.6m (H1 2022: £85.7m) achieved with no overall price inflation to keep our products at prices which are accessible to all consumers. Online channels were the main driver of revenue growth, supported by buoyant consumer demand for energy efficient and money saving products. In the first half of the prior year, amidst a period of significant supply constraints, we made the strategic decision to prioritise orders made by our retail partners, meaning that sales through our online channels were necessarily constrained. Pleasingly, the continued normalisation of global supply chains has now enabled us to fully service, and continue to grow, our online channels, which still represent a relatively nascent part of our diverse customer base.
Our online growth has more than offset the current comparative weakness we have seen in other areas. Retail customers have been understandably cautious in the size of forward orders, given the current macroeconomic environment and high stock levels carried over from the pandemic. Although sales to retail customers fell by 11% during the period, we see reason to be optimistic in the medium term, with the levels of overstocking that retailers experienced following the COVID-19 pandemic showing signs of subsiding.
ESG Strategy Launch
Doing the right thing has always been at the core of everything that we do. As Ultimate Products continues to grow, we are acutely aware that our efforts and ambitions should be underpinned by a clear sense of responsibility and purpose. We have therefore developed a comprehensive ESG strategy which covers everything from our purpose of developing products for the home, educating consumers, investing in our colleagues, and supporting those that need it most within our local communities. This strategy will be at the heart of everything that we do, and ensures that our efforts and ambitions have a clear sense of direction to unite our colleagues and supply partners across the globe. We are cognisant of the impact that our business has on the world in which we operate, and we know that, to ensure long-term success, we must play our part in becoming a more sustainable business.
We also recognise that our retail partners need our help to achieve their own ESG ambitions, particularly within the environmental pillar, where actions often involve immense scale and complexity. We have always had to manage supply chain intricacy seamlessly and efficiently. We are therefore working to ensure that the necessary infrastructure is in place to support our retail partners in going that extra mile, while continuing to provide them with an outstanding service. Being an ESG front runner is not only the right thing to do, but will also enhance our competitive and commercial position.
Finally, we also recognise that an integral part of our long-term sustainability is the diversification of our supply chain. Over the next phase of our business development, we will look to diversify our supply lines away from their relatively narrow geographical concentration in China. As part of this journey we have appointed a member of our Operating Board to head up the inevitably painstaking task of sourcing new factories around the world which can meet the high standards of both the Group and its customers, but also support our key purpose of providing beautiful and more sustainable products for every home.
Robotics Process Automation
While our purpose is to provide beautiful and more sustainable products for every home, a key contributor to our success has been consistently providing the best service to our customers. Whether this is through mitigating supply chain disruption by ensuring that their orders are prioritised, or through helping them achieve their ESG ambitions, we insist on going the extra mile for our retail customers. Owing to the level of complexity involved, our position in the supply chain is not easily replicated, and this represents a significant barrier to entry. We are relentless in developing our systems and, in recent years, have established an intense company focus on driving productivity through automation. During the current year we have embarked on the automation of hundreds of tasks within the business. This is best characterised as a bottom-up approach by which our teams will come to us with problems, which our process development team will then solve. This demand-driven approach has allowed us to concentrate our efforts on the tasks that cause the most friction within our business. Solving them with automation increases productivity and improves accuracy, resulting in enhanced operating margins, an even better customer experience, and an engaged workforce.
Performance
| H1 2023 | H1 2022 | Change | Change |
| £'000 | £'000 | £'000 | % |
Revenue | 87,606 | 85,746 | 1,860 | 2% |
Cost of sales | (65,976) | (64,845) | (1,131) | 2% |
Gross profit | 21,630 | 20,901 | 729 | 3% |
Administrative expenses | (10,397) | (9,669) | (728) | 8% |
Adjusted EBITDA | 11,233 | 11,232 | 1 | 0% |
Depreciation & amortisation | (1,136) | (957) | (179) | 19% |
Finance expense | (711) | (361) | (350) | 97% |
Adjusted profit before tax | 9,386 | 9,914 | (528) | -5% |
Tax expense | (2,007) | (2,177) | 170 | -8% |
Adjusted profit after tax | 7,379 | 7,737 | (358) | -5% |
Share-based payment expense | (128) | (144) | 16 | -11% |
Tax on adjusting items | 29 | 27 | 2 | 7% |
Statutory profit after tax | 7,280 | 7,620 | (340) | -4% |
*Adjusted measures are before share-based payment expense and non-recurring items.
Revenue
Group revenue has increased by 2% to £87.6m in the period (H1 2022: £85.7m). Due to our ongoing focus on sourcing the best products at the best price for our customers and consumers, prices have followed their long-term trend with no price inflation contributing to our top line growth. Online channels were the main driver of this growth, supported by the continued normalisation of global supply chains. In addition, consumer demand for energy efficient and money saving products has remained buoyant across all channels throughout the period. This has meant that Salter products, alongside our overall small domestic appliance offering (which includes air fryers), have proved especially popular in the period.
International
International revenue decreased in the period to £25.0m (H1 2022: £29.0m), as a result of continued overstocking by discounters, and the demand for energy efficient and money saving products being weighted towards the UK. This performance reverses some of the strong growth we have seen, especially in Germany, which remains our largest overseas market. However, the period has seen the successful relaunch of Petra, with sales surpassing £2m in the period. We continue to see the European market as a key area for long-term growth for the business, as was shown by our investment in attending Ambiente, Europe's largest housewares show, where we exhibited our high-quality, branded homeware products to some of Europe's biggest retailers. Our products were very well received, and the event remains an important part of growing brand awareness in the strategically important European market.
Supermarkets
Although supermarkets continue to be our largest sales channel, and account for 32% of Group revenue (FY22: 33%), sales from this channel decreased in the period to £28.1m (H1 2022: £31.8m). Our supermarket customers have been more cautious in their forward ordering during the cost-of-living crisis as consumers have allocated a greater proportion of their basket spend on food which has seen significant price inflation, rather than general merchandise. Many supermarkets were also overstocked, a trend that occurred following the COVID-19 pandemic and which is now showing signs of subsiding.
Online Platforms
Online sales have grown rapidly in the period. Revenue grew by 78% to £22.9m (H1 2022: £12.8m). As previously noted, our online business was adversely affected in H1 2022 by the tighter stock availability caused by the disruption to shipping, which led to a decline in revenue of 13%. This temporary setback was reversed when availability recovered. Strong online momentum, driven by consumer demand for energy-efficient and money-saving products, has seen our online channel make up 26% of revenue in the period (H1 2022: 15%). This represents a significant step towards our target of 30% of overall revenue coming from online over the medium term. While most of our online revenue will always come from transactions made through third party platforms such as Amazon, our Salter.com and Beldray.com websites contributed a respectable £0.8m of revenue during the period. In addition to providing an additional avenue for growth, our websites help to facilitate a more direct relationship between our brands and their consumers, giving us more direct insights into their behaviour.
Discounters
Sales to discounters fell by 16% to £21.1m (H1 2022: £25.1m). The performance of this channel has been driven by general post-COVID overstocking, which caused some discounters to moderate their ordering as they attempted to clear down their stocks. In the UK, the situation has begun to correct, and more normal patterns of order placing have now recommenced. As the cost-of-living crisis continues to affect consumers, we expect that there will be increased opportunities with discounters.
Operating Margins
Gross margin increased to 24.7% (H1 2022: 24.4%) as our sales growth was driven by higher-margin online sales. At the end of the period, we began to benefit from the fall in freight rates, which has helped to mitigate the weakness that we have seen in the value of Sterling. The increase in gross margin means that gross profit rose 3% to £21.6m (H1 2022: £20.9m).
Administrative expenses rose 8% to £10.4m (H1 2022: £9.7m). Although we have seen relatively low levels of inflationary pressure on our cost of sales, and hence on revenues, we have seen cost pressure in our operating costs. Our wage bill, which makes up 70% of our administrative expenses, rose by 6% in the period, as we increased salaries for our people to help mitigate the effects of the cost-of-living crisis. This is consistent with our intention to always do the right thing and to invest in our people.
For the first time in three years, we have also been able to invest in attendance at Ambiente, Europe's largest housewares show, which enabled us to exhibit our range of quality branded houseware products to new customers, consumers and suppliers, as we continue to grow brand awareness in the strategically important European market.
The combination of robust revenues, improved gross margin, and slightly higher overheads has led to a stable adjusted EBITDA at £11.2m (H1 2022: £11.2m).
Seasonality
The Group has a seasonality towards H1, with retail demand being higher in the peak Christmas trading period. However, in the current year, this pattern is expected to be less pronounced, with sales growth weighted towards the less seasonal online channels. As a result, it is anticipated that the operating profits for the second half of the year to 31 July 2023 will be only marginally lower than for the six months ended 31 January 2023.
Adjusted & statutory profit
Depreciation and amortisation increased 19% to £1.1m (H1 2022: £1.0m) as a result of the increase in the depreciation charge following from our investment in solar panels at our Manor Mill head office during the summer of 2022.
The finance charge has increased £0.3m to £0.7m (H1 2022: £0.4m) due to the higher level of interest rates. The Group has benefitted from the hedging instruments it entered into when interest rates were at historically low levels. These instruments cover an aggregate principle of £18.3m, and are a mix of swaps and caps. These instruments have successfully limited the effect of higher interest rates.
The tax charge for the period at 21% (H1 2022: 22%) was higher than the statutory rate of 19% due to the higher statutory rate of tax paid on our European foreign branches in Germany and Poland.
As a result, the statutory profit after tax decreased by 4% to £7.3m (H1 2022: £7.6m).
Earnings per share
Although we have not issued any new shares within the year, the number of shares held in our Employee Benefit Trust has reduced following the successful vesting of employee share options schemes. This has resulted in the weighted average number of shares increasing 1% to 86,234,633 (31 January 2022: 85,333,766).
| H1 2023 | EPS | H1 2022 | EPS |
| £'000 | p | £'000 | p |
Adjusted profit after tax / Adjusted EPS | 7,379 | 8.56 | 7,737 | 9.07 |
Share-based payment expense | (128) | (0.15) | (144) | (0.17) |
Tax on adjusting items | 29 | 0.03 | 27 | 0.03 |
Statutory profit after tax / Basic EPS | 7,280 | 8.44 | 7,620 | 8.93 |
As a result, whilst adjusted profit after tax decreased by 5% to £7.4m (H1 2022: £7.7m), adjusted earnings per share decreased by 6% to 8.56p (H1 2022: 9.07p).
Financing and cash flow
The Group generated cash from operating activities of £12.8m (H1 2022: used cash of £5.0m), being a 114% operating cash conversion. This was significantly stronger than the previous period when the Group needed to invest in working capital due to the supply chain crisis during CY 2021. This meant that at the period end the Group had a net bank debt/adjusted EBITDA ratio of 1.0x (31 July 2022: 1.3x), which represents net bank debt of £19.4m (31 July 2022: £24.3m). The Group maintains comfortable levels of headroom within its bank facilities, with headroom at 31 January 2023 of £22.4m (31 July 2022: £17.8m). The Group makes use of term loans for longer term funding, such as acquisitions, whereas our invoice discounting and import loan facilities are designed to fund our working capital, and automatically increase in relation to our levels of trading.
| 31 January 2023 | 31 January 2022 | Change | Change |
| £'000 | £'000 | £'000 | % |
Cash | 5,004 | 257 | 4,747 | 1847% |
RCF/Overdraft | (7,097) | (3,343) | (3,754) | 112% |
Invoice Discounting | (3,465) | (11,053) | 7,588 | -69% |
Import Loans | (6,970) | (7,128) | 158 | -2% |
Term loan | (7,000) | (9,000) | 2,000 | -22% |
Debt Issue Costs | 140 | 194 | (54) | -28% |
Net bank debt | (19,388) | (30,073) | 10,685 | -36% |
Dividend
In line with our established dividend policy of distributing 50% of the Group's adjusted profit after tax, an interim dividend of 2.43 pence per share (H1 2022: 2.30 pence per share) was approved by the Board on 28 March 2023 and will be paid on 30 June 2023 to shareholders on record as at 2 June 2023 (ex-dividend date being 1 June 2023).
Simon Showman | James McCarthy |
Chief Executive Officer | Chairman |
Consolidated Income Statement
| Unaudited 6 months ended 31 January 2023 | Unaudited 6 months ended 31 January 2022 | Audited year ended 31 July 2022 |
| £'000 | £'000 | £'000 |
Revenue | 87,606 | 85,746 | 154,191 |
Cost of sales | (65,976) | (64,845) | (115,837) |
Gross profit | 21,630 | 20,901 | 38,354 |
Adjusted earnings before interest, tax, depreciation, amortisation, share-based payments & non‑recurring items | 11,233 | 11,232 | 18,750 |
Depreciation | (1,125) | (946) | (2,044) |
Amortisation of intangibles | (11) | (11) | (22) |
Share-based payment expense | (128) | (144) | (403) |
Total administrative expenses | (11,661) | (10,770) | (22,073) |
Operating profit | 9,969 | 10,131 | 16,281 |
Finance expense | (711) | (361) | (842) |
Profit before tax | 9,258 | 9,770 | 15,439 |
Tax expense | (1,978) | (2,150) | (3,069) |
Profit for the year attributable to equity holders of the Company | 7,280 | 7,620 | 12,370 |
All amounts relate to continuing operations | | |
|
Earnings per share | | |
|
Basic | 8.4 | 8.9 | 14.3 |
Diluted | 8.3 | 8.5 | 13.9 |
Consolidated Statement of Comprehensive Income
| Unaudited 6 months ended 31 January 2023 | Unaudited 6 months ended 31 January 2022 | Audited year ended 31 July 2022 |
| £'000 | £'000 | £'000 |
Profit for the period | 7,280 | 7,620 | 12,370 |
| | | |
Items that may subsequently be reclassified to the income statement | | | |
Fair value movements on cash flow hedging instruments | (1,645) | 1,011 | 3,239 |
Hedging instruments recycled through the income statement at the end of hedging relationships | (1,572) | 118 | 162 |
Items that will not subsequently be reclassified to the income statement | | | |
Foreign current translation | - | 2 | 11 |
Other comprehensive income | (3,217) | 1,131 | 3,412 |
Total comprehensive income for the period attributable to the equity holders of the Company | 4,063 | 8,751 | 15,782 |
Consolidated Statement of Financial Position
| Unaudited As at 31 January 2023 | Unaudited As at 31 January 2022 | Audited As at 31 July 2022 |
| £'000 | £'000 | £'000 |
Assets | | | |
Intangible assets | 37,014 | 36,918 | 37,025 |
Property, plant and equipment | 5,606 | 5,663 | 6,369 |
Total non-current assets | 42,620 | 42,581 | 43,394 |
| | | |
Inventories | 27,290 | 27,093 | 29,162 |
Trade and other receivables | 34,323 | 37,753 | 32,194 |
Derivative financial instruments | 913 | 1,327 | 4,142 |
Cash and cash equivalents | 5,004 | 257 | 6,202 |
Total current assets | 67,530 | 66,430 | 71,700 |
Total assets | 110,150 | 109,011 | 115,094 |
| | | |
Liabilities | | | |
Trade and other payables | (31,376) | (29,686) | (29,644) |
Derivative financial instruments | (673) | - | - |
Current tax | (705) | (648) | (170) |
Borrowings | (12,934) | (20,091) | (22,314) |
Lease liabilities | (636) | (849) | (817) |
Deferred consideration | (494) | (987) | (987) |
Total current liabilities | (46,818) | (52,261) | (53,932) |
Net current assets | 20,712 | 14,169 | 17,768 |
| | | |
Borrowings | (11,458) | (10,239) | (8,144) |
Deferred tax | (6,928) | (6,055) | (7,585) |
Deferred consideration | - | (494) | - |
Lease liabilities | (1,717) | (1,758) | (1,940) |
Total non-current liabilities | (20,103) | (18,546) | (17,669) |
Total liabilities | (66,921) | (70,807) | (71,601) |
Net assets | 43,229 | 38,204 | 43,493 |
| | | |
Equity | | | |
Share capital | 223 | 223 | 223 |
Share premium | 14,334 | 14,334 | 14,334 |
Employee Benefit Trust reserve | (1,815) | (2,072) | (1,571) |
Share-based payment reserve | 1,197 | 1,099 | 1,166 |
Hedging reserve | 22 | 967 | 3,239 |
Retained earnings | 29,268 | 23,653 | 26,102 |
Equity attributable to owners of the Group | 43,229 | 38,204 | 43,493 |
Consolidated Statement of Changes in Equity
For the period ended 31 January
| Share capital | Share premium | Employee Benefit Trust reserve | Share-based payment reserve | Hedging reserve | Retained earnings | Total equity |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
As at 1 August 2021 | 223 | 14,334 | (2,152) | 1,024 | (162) | 18,788 | 32,055 |
Profit for the year | - | - | - | - | - | 7,620 | 7,620 |
Foreign currency retranslation | - | - | - | - | - | 2 | 2 |
Cash flow hedging movement | - | - | - | - | 1,129 | - | 1,129 |
Total comprehensive income for the year | - | - | - | - | 1,129 | 7,622 | 8,751 |
Transactions with shareholders: | | | | | | | |
Dividends paid | - | - | - | - | - | (2,844) | (2,844) |
Share-based payments charge | - | - | - | 144 | | | 144 |
Deferred tax on share-based payments | - | - | - | - | - | 98 | 98 |
Purchase/sale of shares by the EBT | - | - | 80 | (69) | - | (11) | - |
As at 31 January 2022 | 223 | 14,334 | (2,072) | 1,099 | 967 | 23,653 | 38,204 |
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| Share capital | Share premium | Employee Benefit Trust reserve | Share-based payment reserve | Hedging reserve | Retained earnings | Total equity |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
As at 1 August 2022 | 223 | 14,334 | (1,571) | 1,166 | 3,239 | 26,102 | 43,493 |
Profit for the period | - | - | - | - | - | 7,280 | 7,280 |
Foreign currency translation | - | - | - | - | - | - | - |
Cash flow hedging movement | - | - | - | - | (3,217) | - | (3,217) |
Total comprehensive income for the period | - | - | - | - | (3,217) | 7,280 | 4,063 |
Transactions with shareholders: | | | | | | | |
Dividends paid | - | - | - | - | - | (4,157) | (4,157) |
Share-based payments charge | - | - | - | 128 | - | - | 128 |
Purchase/sale of shares by the EBT | - | - | (244) | (97) | - | 43 | (298) |
As at 31 January 2023 | 223 | 14,334 | (1,815) | 1,197 | 22 | 29,268 | 43,229 |
Consolidated Statement of Cash Flows
For the period ended 31 January
| Unaudited 31 January 2023 | Unaudited 31 January 2022 | Audited 31 July 2022 |
| £'000 | £'000 | £'000 |
Net cash flow from operating activities |
| | |
Profit for the year | 7,280 | 7,620 | 12,370 |
Adjustments for: |
| | |
Finance costs | 711 | 361 | 842 |
Income tax expense | 1,978 | 2,150 | 3,069 |
Depreciation | 1,125 | 977 | 2,044 |
Amortisation | 11 | 11 | 22 |
Derivative financial instruments | (4) | 118 | 274 |
Share-based payments | 128 | 144 | 403 |
Working capital adjustments |
| | |
Decrease/(increase) in inventories | 1,872 | (5,419) | (7,721) |
(Increase) in trade and other receivables | (2,129) | (11,208) | (5,649) |
Increase in trade and other payables | 1,834 | 201 | 1,221 |
Net cash from operating activities | 12,806 | (5,045) | 6,875 |
Income taxes paid | (1,446) | (1,435) | (2,345) |
Net cash from operations | 11,360 | (6,480) | 4,530 |
Cash flows used in investing activities |
| | |
Acquisition of subsidiary | (493) | (493) | (1,960) |
Purchase of property, plant and equipment | (362) | (636) | (1,843) |
Net cash used in investing activities | (855) | (1,129) | (3,803) |
Cash flows used in financing activities |
| | |
(Purchase)/sale of own shares | (298) | - | 373 |
Proceeds from borrowings | 8,344 | 12,493 | 14,347 |
Repayment of borrowings | (14,426) | (1,000) | (2,766) |
Principal paid on lease obligations | (424) | (497) | (936) |
Debt issue costs paid | (93) | - | - |
Dividends paid | (4,157) | (2,844) | (4,830) |
Interest paid | (649) | (420) | (850) |
Net cash generated by finance activities | (11,703) | 7,732 | 5,338 |
Net (decrease)/increase in cash and cash equivalents | (1,198) | 123 | 6,065 |
Exchange gains on cash and cash equivalents | - | 1 | 4 |
Cash and cash equivalents brought forward | 6,202 | 133 | 133 |
Cash and cash equivalents carried forward | 5,004 | 257 | 6,202 |
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