RNS Number : 4263I
FIH Group PLC
07 August 2023
 

FIH group plc

("FIH" or the "Group")

Final Results

FIH, the AIM quoted international specialist services group with businesses in the Falkland Islands and the UK, is pleased to announce the Group's audited results for the year ended 31 March 2023 ("the period").

Highlights

·      Revenue up 31% to £52.7 million (2022: £40.3 million) and underlying pre-tax profit up 39% to £3.2 million (2022: £2.3 million), with improvements in all divisions.

·      Pre-tax profit of £4.0 million (2022: £2.7 million as restated*) including non-trading items.

·      Net cash flow from operating activities up 47% to £7.5 million (2022: £5.1 million).

·      Underlying earnings per share of 20.1p (2022: 9.5p).

·      Strong balance sheet at 31 March 2023 with cash up £3.2 million to £12.8 million (2022: £9.6 million) and net debt (cash and cash equivalents less bank loans) improving by £4.1 million to £0.5 million (2022: £4.6 million).

·      A final dividend of 5.3 pence per share will be proposed at the Annual General Meeting, taking the total dividend for the year to 6.5 pence per share (2022: 3.0 pence per share).

 

* As detailed in note 1 to the financial statements.

 

Board and Governance

·      Reuben Shamu appointed as Chief Financial Officer on 12 September 2022.

·      Jeremey Brade stepped down as a non-executive director on 21 September 2022.

·      Holger Schröder appointed as a non-executive director on 1 June 2023.

·      Robin Williams to step down as Chairman at the Company's AGM in September 2023.

 

Stuart Munro, Chief Executive, said:

"I'm delighted to be able to present a strong set of results which are underpinned by an equally strong cash performance, signalling a good recovery from the pandemic and resilience to the cost of living pressures which have impacted all sectors of the business."

Enquiries:

FIH group plc

Stuart Munro, Chief Executive

Reuben Shamu, Chief Financial Officer

 

 

Tel: 01279 461630

 

WH Ireland Ltd - NOMAD and Broker to FIH

Chris Fielding / James Bavister

 

 

Tel: 0207 220 1666

 

Novella Communications

Tim Robertson / Chris Marsh

 

 

Tel: 020 3151 7008

 


 

Market Abuse Regulation (MAR) Disclosure

This announcement contains inside information for the purposes of Article 7 of the UK version of Regulation (EU) No 596/2014 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

The person responsible for arranging the release of this announcement on behalf of the Company is Stuart Munro Chief Executive Officer of the Company.

Chairman's Statement

 

I am pleased to report a year of solid performance with record revenues for the Group and earnings growth in all three divisions, delivering an underlying pre-tax profit of £3.2 million.

 

This is due in no small part to the Group's employees and I would like to take this opportunity to thank each of them for their contribution to such a strong improvement in performance.

 

The balance sheet remains strong, with cash of £12.8 million at 31 March 2023 (2022 £9.6 million) and net debt (cash and cash equivalents less bank loans) improving by £4.1 million to £0.5 million (2022: £4.6 million). 

 

Dividend

 

Following the payment of an interim dividend of 1.2 pence per share paid in January 2023 and reflecting the continued improvement in trading since the half year, I am pleased to announce that a final dividend of 5.3 pence per share will be proposed at our forthcoming Annual General Meeting. This will take the total dividend paid for the year ended 31 March 2023 to 6.5 pence per share (2022: 3.0 pence per share).

 

Board and Governance

 

On 12 September 2022, Reuben Shamu was appointed as Chief Financial Officer and on 21 September 2022, Jeremy Brade stepped down from his position as non-executive director of the Group.

 

Holger Schröder was appointed as a non-executive director of the Group on 1 June 2023. Holger has over 28 years' experience gained in a variety of predominantly Swiss companies, most recently as the CFO and a board member of Janser Group which controls 12.6% of the Company's equity. His experience and business knowledge will be of great benefit and the strengthening of shareholder representation on the Board should add further support to the Group's strategic direction.

 

As announced on 24 February 2023, I will not be seeking re-election to the Board at the Company's AGM in September. The Board is considering options for its constituent members, including the recruitment of an additional independent non-executive director, and will make an announcement in due course.  

 

Outlook and Strategy

 

Despite difficult trading conditions, performance has continued to progress, giving confidence that the Group strategy, as detailed in the CEO's Strategic Review, is on course. Increased focus can now be brought to bear on opportunities to invest in further developing the Group's existing businesses and on potential complementary strategic acquisitions that either strengthen existing operations or provide improved growth opportunities.  

 

 

 

Robin Williams

Chairman

4 August 2023



 

Chief Executive's Strategic Review

Overview

 

The progress demonstrated in the Group's first half results continued in the traditionally stronger second half of the year.

 

Total revenue of £52.7million was a record for the Group and 31% ahead of the prior year. Trading in all three divisions and across all their business sectors continued to improve, resulting in an overall underlying profit before tax of £3.2 million, circa 39% ahead of the prior year and an underlying earnings per share of 20.1p (2022: 9.5p). Pre-tax profit was £4.0 million (2022: £2.7 million following restatement as detailed in note 1 to the financial statements).

 

The Group results were underpinned by a net cash flow from operating activities of £7.5 million, which included a £1.4 million improvement in working capital.

 

Group Trading Results for the Year Ended 31 March 2023

 

A summary of the trading performance of the Group is given in the table below.

 

Group revenue

2023

2022

Change

Year ended 31 March

£m

£m

%

Falkland Islands Company

29.4

21.6

36.6%

Momart

19.5

15.6

25.0%

Portsmouth Harbour Ferry

3.8

3.1

22.6%

Total revenue

52.7

40.3

31.0%





Group underlying pre-tax profit*

£m

£m

%

Falkland Islands Company**

1.9

1.8

5.6%

Momart**

1.0

0.6

66.7%

Portsmouth Harbour Ferry**

0.3

(0.1)

400%

Total underlying pre-tax profit *

3.2

2.3

39.1%

Non-trading items (see notes below)***

0.8

0.4

100.0%

Reported profit before tax

4.0

2.7

48.1%

 

* Underlying pre-tax profit is defined as profit before tax before non-trading items.

 

** As in prior years, the profits reported for each operating company are stated after the allocation of head office management and plc costs which have been applied to each subsidiary on a consistent basis.

 

*** Non-trading items were comprised of:

 

(i)   Favourable fair value movements on the non-effective portion of derivative financial instruments used to hedge interest rate fluctuations of £0.9 million (2022: £0.7 million).

 

(ii)   £0.1 million of employee redundancy costs in the current year and £0.3 million of people-related costs in the prior year, including employee redundancies and compensation payable to the former Chief Executive. Management consider that separate presentation of these items is appropriate to facilitate year on year comparison of performance of the Group.



 

Group Operating Company Performance

Falkland Islands Company ("FIC")

 

Total revenue increased by 36.6% to £29.4 million, with improvements across all sectors of the division. Falkland Business Services ("FBS") was the predominant growth area, driven by the £17.3 million housing contract to construct seventy houses for the Falkland Islands Government ("FIG") and the UK Ministry of Defence ("MOD") secured in November 2021.  

 

The ban on tourists entering the Falkland Islands was lifted in May 2022 and Stanley once again welcomed visitors arriving on cruise ships in the austral summer season. Over 59,000 tourists visited (2022: nil), despite some vessels cancelling their visits at short notice due to changeable weather conditions.

 

Whilst the retail environment continued to be challenging, the strong tourist season, combined with targeted price increases, resulted in a recovery in retail revenue compared to the year on year revenue reduction experienced in the first half of the year.

 

The overall underlying pre-tax profit for FIC of £1.9 million was 5.6% ahead of the prior year, albeit at a reduced level of profit margin, due largely to the mix and proportion of FBS activity.

 

 

FIC Operating Results 

 

 

 

Year ended 31 March

2023

2022

Change


£m

£m

%

Revenues

 


 

 

FBS (housing and construction)

12.1

5.8

112.1

Retail

9.9

9.7

2.1

Falklands 4x4

3.1

2.8

10.7

Support services

3.3

2.5

32.0

 Property rental

1.0

0.8

25.0

Total FIC revenue

29.4

21.6

36.6


 



FIC underlying operating profit

2.0

1.9

5.3

Net interest expense

(0.1)

(0.1)

-

FIC underlying profit before tax

1.9

1.8

5.6

FIC underlying operating profit margin

6.4%

8.3%

(23.0)

 

FIC Divisional Activity

FBS revenue increased by 112.1% driven mainly by the £17.3 million contract to build a total of 70 houses for FIG and the MOD. The first 10 houses were handed over at Bennetts Paddock in Stanley for FIG and 5 at Mount Pleasant Camp for the MOD. Circa £1.9 million of variation orders have been received on this contract, including the construction of a road providing easier access to the housing units under construction. Other orders included the construction of a wool storage warehouse for the Falkland Islands Development Corporation, which is due to be completed by the end of 2023. £1.4 million of the orders were received after the balance sheet date.

 

Retail was impacted by global inflationary pressures which drove increases in both product prices and freight costs, as well as having an adverse impact on the disposable income of Falklands Islands residents. A strong performance from tourist sales driven by an increase in visitors, offset shortfalls in locally-derived business, resulting in a small increase in revenue. 

At Falklands 4x4, the sale of new and used vehicles remained stable, albeit with a change in mix with a greater proportion of quad and motor bike sales. The increase in revenue came from an increase in vehicles rentals and the sale of spare parts. Falklands 4x4 has become an authorised distributor of the new Ineos Grenadier 4x4 vehicle and first deliveries are expected in 2023.

In Support Services, the revenue increase arose mainly in Penguin Travel, FIC's tourism business, where the arrival of tourists saw revenue increasing three-fold on the prior year. Cruise ship capacity for next summer season shows further potential growth opportunities, with circa 100,000 tourists expected between late September and mid-March 2024.

In Rental Properties, improving occupancy and a small increase in the number of units in the property portfolio resulted in revenue of £1 million, which was £0.2 million above the previous year. The market place remains buoyant, with potential new tenants waiting for units to become available.

FIC Key Performance Indicators and Operational Drivers 

 

Year ended 31 March

2019

2020

2021

2022

2023

Staff numbers (FTE 31 March)*

175

214

206

232

242






 

Capital expenditure £'000

2,348

2,685

1,060

2,434

1,206






 

Retail sales growth %

+5.7

+3.1

-3.0

-0.1

+2.1


 

 

 

 

 

Number of FIC rental properties**

54

65

75

83

85

Average occupancy during the year %

84

89

93

86

90






 

Number of vehicles sold

76

71

71

81

82






 

Number of 3rd party houses sold***

6

22

15

11

14






 

Illex squid catch in tonnes (000's)

57.4

57.6

106.1

123.8

66.8

 

Cruise ship passengers (000's)

62.5

72.1

Nil

Nil

73.4

 

* Restated to include FIC staff in the UK.

**Includes ten mobile homes rented to staff.

***Relates to kit home sales to third parties and excludes houses built under contract for FIG.

 

Momart

Revenue of £19.5 million was £3.9 million (25%) ahead of the prior year with improvements across all sectors of the business.   

 

The strong growth in Museum Exhibitions was pleasing given that the sector is still recovering from the impact of Covid-19, both in terms of exhibition funding and visitor numbers. It reflects a steady pattern of project winning and an increasing number of smaller un-tendered one-off projects.

 

Gallery Services also showed significant progress, assisted by a broadening and deepening of existing client relationships and new client wins.

 

The improvement in Storage revenue was driven by a combination of an improvement in fill rate and price increases.  Encouragingly, a number of long-standing clients have indicated their intention to continue and expand their use of Momart's storage facilities.

 

The improvements across all sectors resulted in an underlying pre-tax profit of £1.0 million (2022: £0.6 million) with margin improvements from a higher volume of work relative to the fixed cost base, combined with better utilisation of staff.

 



 

Momart Operating Results

 

 

 

 

 

 

 

Year ended 31 March

2023

2022

Change


£m

£m

%

Revenues

 



Museum Exhibitions

9.5

7.4

28.4

Gallery Services

7.3

5.8

25.9

Storage

2.7

2.4

12.5


 



Total Momart revenue

19.5

15.6

25.0


 



Momart underlying operating profit

1.4

1.0

40.0

Net Interest expense

(0.4)

(0.4)

-

Momart underlying profit / (loss) before tax

1.0

0.6

66.7

Momart underlying operating profit margin

5.1%

3.8%

33.3

 

 

Momart Key Performance Indicators

Year ended 31 March

2019

2020

2021

2022

2023

Staff numbers (FTE 31 March)

 

140

 

133

 

107

 

99

110







Capital expenditure £'000's

20,034

638

540

258

1,087







Warehouse % fill vs capacity

81.1%

86.9%

82.9%

84.0%

86.4%







Momart services charged out

£11.5m

£10.8m

£6.5m

£9.1m

£10.8m







Revenues from overseas clients

£7.5m

£6.2m

£2.7m

£5.5m

£6.7m







Exhibitions sales growth

-6.5%

-2.1%

-58.3%

64.4%

28.4%

Gallery Services sales growth

4.0%

-22.4%

-41.4%

70.6%

25.9%

Storage sales growth

-6.3%

5.8%

9.1%

0.0%

12.5%

Total sales growth

-2.9%

-8.7%

-45.5%

51.5%

25.0%

 



 

Portsmouth Harbour Ferry Company ("PHFC")

Passenger numbers at PHFC continued to recover, resulting in an overall passenger volume for the year of 80% of pre-COVID levels compared to 70% in the prior year. Along with careful management of costs and inflation-mitigating fare rises, this resulted in an underlying pre-tax profit for the first time since the pandemic.

 

PHFC Operating Results




 

Year ended 31 March

2023

2022


Change


£m

£m

%

Revenues




Ferry fares & other revenue

3.8

3.1

22.6

Total PHFC revenue

3.8

3.1

22.6

 

 



PHFC underlying operating profit / (loss)

0.6

0.2

200

Pontoon lease liability & Boat loan finance expense

(0.3)

(0.3)

-

PHFC underlying profit / (loss) before tax

0.3

(0.1)

400





                           

PHFC Key Performance Indicators and Operational Drivers

 

Year ended 31 March

2019

2020

2021

2022

2023







Staff numbers (FTE at 31 March)

37

36

25

26

26






 

Capital expenditure £'000's

50

65

-

52

218






 

Ferry reliability (on time departures)

99.8

99.8

99.9

99.9

99.8






 

Number of weekday passengers '000's

1,834

1,706

613

1,188

1,372

% change on prior year

-2.3

-7.0

-64.1

93.8

15.4






 

Number of weekend passengers '000's

722

659

195

500

576

% change on prior year

-1.6

-8.7

-70.4

156.4

15.2



 

 

 

 

Total number of passengers '000's

2,556

2,365

808

1,688

1,948

% change on prior year

-2.1

-7.5

-65.8

108.9

15.4






 

Revenue growth %

0.4

-5.5

-65.9

114.2

19%






 

Average yield per passenger journey*

£1.62

£1.69

£1.76

£1.76

£1.91

 

\* Total ferry fares divided by the total number of passengers

 



 

Trading Outlook

 

The overall trading outlook for the Group remains positive.

 

In FIC, the return of tourism to the Falkland Islands should continue to boost both direct and indirect revenues across a number of business sectors, which should help to mitigate the challenges of the current global economic crisis.  This, combined with a continued strong order book in FBS and the potential for new contracts with the MOD and FIG, bodes well for the future.  

 

At Momart, the market, continues to recover and a renewed focus on actively developing business with both existing and prospective clients should continue to yield growth opportunities for the business.

 

PHFC returned to profit, albeit passenger numbers are not yet back to pre-COVID levels, which is consistent with other analogous UK transport providers. Available capacity means that future passenger growth can be accommodated without a commensurate increase in cost, which would further improve profitability.  However, costs and fare pricing will continue to be carefully managed.

 

The challenge of the global economic crisis remains, but the progress delivered to date, an ongoing focus on pricing and cost control and the strength that the Group's geographical breadth and diversity of operations brings, gives confidence for the future.

 

Group Strategy

The aim of the Board is to build a Group of greater scale, providing consistent earnings growth and cash generation that will provide shareholders with both predictable capital growth and regular dividend income. To deliver this, the Group strategy has three key strands:

 

Build the profits of the existing businesses back to and beyond the pre-COVID position. As evidenced by the improved results delivered across all divisions, good progress was made during the year, but more remains to be done.

 

Invest in developing the existing businesses. The Board continues to be focussed on capitalising on potential opportunities for further work for FIG and the MOD, building on the £17.3 million housing contract awarded in November 2021. During the year, additional work was awarded under this contract, including the construction of a road adjacent to the houses being constructed at the Mount Pleasant Camp.  In addition, potential opportunities to maximise returns from existing FIC land assets are being explored. The potential for additional opportunities arising from the development of the Sea Lion oil field continues to be monitored closely. However, the Board does not rely in its planning on any such development due to the uncertain and lengthy timescales involved and the undefined nature of any benefit which might accrue to FIC.

 

Explore the potential for strategic acquisitions. This could provide a step change in the scale of FIH, but acquisitions will only be considered if they either add to existing activities or bring growth potential from other attractive sectors, can be secured at an appropriate price and are within the capacity of the senior executive team to integrate and optimise without negatively impacting the performance of the existing businesses. A number of opportunities were reviewed during the year, but none met the required criteria.

 



 

Risk Management, Principal Risks and Impact

The Board is ultimately responsible for setting the Group's risk appetite and for overseeing the effective management of risk. The Group faces a diverse range of risks and uncertainties which could have an adverse effect on results if not managed. The principal risks facing the Group have been identified by the Board and the mitigating actions agreed with senior management and are discussed in the following table:

 

OPERATIONAL RISKS


 

 

Risk

Comment

Overall Impact

PANDEMIC

Failure to respond in time to the impact of a future pandemic may result in disruption to the Group's operations through staff absenteeism, disruption to supply chains and the logistics the Group's businesses rely on to deliver products and services to customers.

Whilst the prevalence and severity of the impact of COVID continues to diminish, other similar future virus outbreaks cannot be discounted.

 

A watching brief will be maintained, utilising previous learning to assess the impact of potential virus outbreaks on operations should they arise, and to determine appropriate mitigating actions.

 

Low - decreased

CYBER RISK

A cyber security breach can result in unauthorised access to company information, potential misuse of information systems, technology or data.

 

There is a growing level of sophistication, scale and volume of targeted cyber incidents which could impact on group trading and potential loss of assets.

 

A full review of the IT security environment has been commissioned to modernise prevention measures across the Group.

 

Moderate - new

 

 

 

DATA PRIVACY

Failure to comply with legal or regulatory requirements relating to data privacy in the course of business activities potentially leading to adverse consequences, penalties or consequential litigation.

 

Governance and oversight protocols are regularly reviewed to maintain vigilance in protection of the Group's customer and staff data.

Low - new

 

HEALTH AND SAFETY

The Group is required to comply with laws and regulation governing occupational health and safety matters. Furthermore, accidents could happen which might result in injury to an individual, claims against the Group and damage to our reputation.

Health & Safety ("HSE") matters are considered a key priority for the Board of FIH and all its operating companies.

 

All staff receive relevant HSE training when joining the Group and receive refresher and additional training as is necessary. Training courses cover maritime safety, lifting and manual handling, asbestos awareness and fire extinguisher training. External HSE audits are conducted on a regular basis

 

Low - unchanged

 

COMPLIANCE

Failure to comply with the frequently changing regulatory environment could result in reputational damage or financial penalty.

The regulatory environment continues to become increasingly complex.

 

The Group uses specialist advisers to help evolve appropriate policies and practices.  Close monitoring of regulatory and legislation changes is maintained to ensure our policies and practices continue to comply with relevant legislation.

 

Staff training is provided where required.

Low - unchanged

 



 

Risk Management, Principal Risks and Impact

 

 

Risk

Comment

Potential Impact

POLITICAL RISKS



Historically, Argentina has maintained a claim to the Falkland Islands and this dispute has never been officially resolved.

Relations between the UK and Argentina continue to be strained.

 

However, the security afforded by the UK Government's commitment to the Islands upholds the freedom and livelihood of the people of the Falkland Islands and thereby of FIC.

 

Provided UK Government support is maintained the security of the people of the Falkland Islands is judged to at low risk.

 

Low - unchanged

 

 

 

 

 

 

 

 

 

ECONOMIC CONDITIONS

 

 

Inflationary pressures across all Group businesses impact the cost of wages, services and products.

 

Continued focus on cost efficiency.  Customer and supplier contracts structured to limit or pass on inflation risk. Cost inflation monitored closely and passed on to customers via price increases wherever possible.

High - unchanged

CREDIT RISK

 

 

Credit risk is the risk of financial loss if a customer fails to meet its contractual obligations.

Effective processes are in place to monitor and recover amounts due from customers.   

Low - unchanged

COMPETITION

 

 

FIC is considered by the senior management to be a market leader in a number of business activities, but faces competition from local entrepreneurs in many of the sectors in which it operates.

 

Momart sits in a highly competitive market, with both UK and International competitors investing for growth.

 

Local competition is healthy for FIC and stimulates continuing business improvement.

 

 

 

Largely unchanged.

Low - unchanged

 

 

 

 

 

Moderate - unchanged

Large capital infrastructure investment projects may entice larger overseas businesses to look at the opportunities available and reduce the ability of FIC to undertake the work.

FIC has been successful in winning work against overseas competitors and has built up strong links with FIG and MOD.

 

Being located in the Falkland Islands gives FIC a competitive advantage against overseas companies.

Moderate - unchanged

FOREIGN CURRENCY AND INTEREST RATE RISK

 

 

Momart is exposed to foreign currency risk arising from trading and other payables denominated in foreign currencies.

 

The Group is exposed to interest rate risks on large loans.

 

FIC retail outlets accept foreign currency and are exposed to fluctuations in the value of the dollar and euro.

Forward exchange contracts are used to mitigate this risk, with the exchange rate fixed for all significant contracts.

 

Interest rate risk on large loans is mitigated by the use of interest rate swaps.

 

Low - unchanged

Risk Management, Principal Risks and Impact

Risk

Comment

Potential Impact

INVENTORY



Inventory risk relates to losses on realising the carrying value on ultimate sale. Losses include obsolescence, shrinkage or changes in market demand such that products are only saleable at prices that produce a loss.

 

FIC is the only Group business that holds significant inventories and faces this risk in the Falkland Islands, where it is very expensive to return excess or obsolete stock back to the UK.

Reviews of old and slow-moving stock in Stanley are regularly undertaken by senior management and appropriate action taken.  

Moderate- unchanged

 

PEOPLE


 

 

Loss of one or more key members of the senior management team or failure to attract and retain experienced and skilled people at all levels across the business could have an adverse impact on the business.

None of the Group's businesses is reliant on the skills of any one person. The wide spread of the Group's operations further dilutes the risk.

 

Low - unchanged

 

 

 

FIC has a reliance on being able to attract staff from overseas including many from St Helena. Development of those locations might reduce the pool of available staff.

The development of tourism on St Helena has been slow and the Falkland Islands remain an attractive location for St Helenian people to work.

 

Low - decreased

 

 

All Group companies are experiencing a shortage of skilled employees as the businesses grow and recover from the pandemic. In the UK, Momart has suffered from shortages in drivers and art technicians. 

This has driven wages costs up.

Moderate - unchanged

 

The Covid-19 related risks have been summarised into a more general pandemic risk in the current financial year due the  

 

Statement by the Directors in Performance of their Statutory Duties in Accordance with s172(1) Companies Act 2006

 

The statement by the directors in performance of their statutory duties in accordance with s172(1) Companies Act 2006 is included in the Directors' Report.

 



 

Chief Financial Officer's Review

Financial Review

 

Restatements

 

As detailed in note 1 to the financial statements, comparative numbers were restated to correct the accounting treatment of some right of use assets, the carrying value of certain investments in the Company and the application of hedge accounting. 

 

Revenue

 

Group revenue increased by £12.4 million (31%) to £52.7 million with double digit growth in all three divisions.

 

Operating Profit

 

Operating profit at £3.9 million was £1.1 million ahead of prior year. Underlying operating profit increased by £0.9 million (30%) to £4.0 million (2022: £3.1 million).

 

Net Financing Income

 

The Group's net financing income of £0.1 million was £0.2 million ahead of the prior year net financing expense due primarily to an increased movement in the fair value of the derivative financial instrument.

 

Reported Pre-tax Profit

 

The reported pre-tax profit for the year ended 31 March 2023 was £4.0 million (2022: £2.7 million - restated). Non-trading items in the current year included a favourable fair value movement of £0.9 million on a derivative financial instrument and £0.1 million of employee redundancy costs. The Group's underlying profit before tax before these non-trading items was £3.2 million (2022: £2.3 million). Non-trading items in the prior year included a favourable fair value movement of £0.7 million on a derivative financial instrument following a restatement of results as detailed in note 1 to the financial statements and £0.3 million of people related costs including employee redundancies and compensation payable to the former Chief Executive.

 

Taxation

 

Tax on current year profits has decreased by £0.3 million. This is mainly due to the prior year tax charge including a £0.5 million increase in deferred tax relating to the change in tax rates from 19% to 25% from 1 April 2023, which was partly offset by an increase in profits (£0.2 million).

 

Earnings per Share

Basic and Diluted Earnings per Share ("EPS") derived from reported profits was 24.9 pence (2022: 11.9 pence - restated). Basic and Diluted EPS derived from underlying profits was 20.1 pence (2022: 9.5 pence).

 



 

Balance Sheet

The Group's balance sheet remained strong, with total net assets growing to £44.0 million (2022: £40.8 million - restated) and retained earnings increasing by £3.2 million to £24.5 million (2022: £21.4 million - restated).

 

Net Debt




Year ended 31 March

2023

2022

Change


£m

£m

£m


 

 

 

Bank loans

(13.3)

(14.2)

0.9

Cash and cash equivalents

12.8

9.6

3.2

Net debt

(0.5)

(4.6)

4.1

Lease liabilities*

(6.4)

(6.5)

0.1

Net debt after lease liabilities

(6.9)

(11.1)

4.2

* As detailed in note 1 to the financial statements, lease liabilities have been restated, resulting in a reduction of £0.6 million at 31 March 2022.

 

Bank loans reduced to £13.3 million (2022: £14.2 million) as a result of scheduled loan repayments of £0.9 million. The Group's cash balances increased by £3.2 million to £12.8 million (2022: £9.6 million) reflecting improved trading and working capital position. Overall net debt improved by £4.1 million to £0.5 million (2022: £4.6 million).

The Group's outstanding lease liabilities totalled £6.4 million (2022: £6.5 million - restated) with £4.6 million of the balance (2022: £4.7 million) relating to the 50-year leases from Gosport Borough Council for the Gosport Pontoon and associated ground rent, which run until June 2061.

 

The carrying value of intangible assets increased to £4.4 million (2022 £4.2 million) with additional investment in the retail system in FIC.

 

The net book value of property, plant and equipment remained materially the same at £38.7 million (2022: £38.7 million - restated) with additions of £2.4 million being offset by depreciation charges of £2.4 million.

 

At 31 March 2023, the Group had 85 (2022: 83) completed investment properties, comprising commercial and residential properties in the Falkland Islands, which are held for rental. In addition, FIC held land in and around Stanley, including areas zoned for industrial development and prime mixed-use land. FIC also held undeveloped land outside Stanley.  

 

The net book value of the investment properties and undeveloped land of £7.9 million (2022: £8.2 million) had a fair value of £12.6 million (2022: £12.5 million).

 

Deferred tax assets relating to future pension liabilities stood at £0.5 million (2022: £0.7 million). This balance relates to the deferred tax benefit of expected future pension payments in the FIC unfunded scheme calculated by applying the 26% Falkland Islands' tax rate to the pension liability.

 

Inventories, which largely represent stock held for resale and raw materials increased by £0.2 million to £6.9 million at 31 March 2023 (2022: £6.7 million). A 12% increase in stock held for resale in FIC was partially offset by a decrease in work in progress with less private house building activity.

 

Trade and other receivables increased by £2.3 million to £10.2 million at 31 March 2023 (2022: £7.9 million) with increased construction business in the Falkland Islands and a high volume of exhibition sales activity in Momart.

 

Trade and other payables increased by £3.7 million to £13.7 million at 31 March 2022 (2022: £10.0 million) reflecting increased trading activity as detailed above and an increase in amounts received in advance of service delivery in FIC.

At 31 March 2023, the liability due in respect of the Group's only defined benefit pension scheme, in FIC, was £2.0 million (2022: £2.6 million). This pension scheme, which was closed to new entrants in 1988 and to further accrual in 2007, is unfunded and liabilities are met from operating cash flow. A decrease in the liability largely arose as a result of an increase in interest rates on relevant corporate bonds and has been fed through reserves in accordance with IAS 19. Eleven former employees receive a pension from the scheme at 31 March 2023 and there are three deferred members.

 

The Group's deferred tax liabilities, excluding the pension asset at 31 March 2023, were £4.2 million (2022: £3.8 million - restated) with the increase due largely to temporary differences on property, plant and equipment.

 

Cash Flows

Net cash inflow from operating activities of £7.5 million was £2.4 million more than the prior year. The increase was due to a combination of a £0.8 million increase in underlying EBITDA* and a £1.4 million improvement in working capital.

 

The Group's operating cash flow can be summarised as follows:

 

Year ended 31 March

2023

2022

Change


£m

£m

£m

Underlying profit before tax

3.2

2.3

0.9

Depreciation & amortisation

2.6

2.4

0.2

Gain on disposal of fixed asset

(0.3)

-

(0.3)

Net interest payable

0.8

0.8

-

Underlying EBITDA*

6.3

5.5

0.8


 



Non-trading, cash items

(0.1)

-

(0.1)

Decrease / (Increase) in finance lease receivables

0.2

(0.1)

0.3

Decrease / (increase) in working capital

1.4

-

1.4

Tax paid and other

(0.3)

(0.3)

-

Net cash inflow from operating activities

7.5

5.1

2.4


 



Financing and investing activities

 



Capital expenditure

(2.0)

(2.7)

0.7

Disposal of fixed assets

0.4

0.1

0.3

Net bank and lease liabilities interest paid

(0.8)

(0.8)

-

Bank and lease liability repayments

(1.5)

(6.6)

5.1

Dividends paid

(0.4)

(0.1)

(0.3)

Net cash outflow from financing and investing activities

(4.3)

(10.1)

5.8

Net cash inflow / (outflow)

3.2

(5.0)

8.2

Cash balance b/fwd.

9.6

14.6

(5.0)

Cash balance c/fwd.

12.8

9.6

3.2

 

*EBITDA is defined as earnings before interest and tax after adding being depreciation and amortisation costs

 

Financing and Investing Activities

 

During the year, the Group invested £2.0 million of capital expenditure, comprising £1.9 million of fixed asset property, plant and equipment and £0.1 million of computer software.

 

The bank and lease repayments of £6.6 million in the prior year included £5.0 million CBILS loans repaid in June 2021.

 

The Strategic Report comprises the Chief Executive's Strategic Review and the Chief Financial Officer's Review.

 

Approved by the Board of Directors and signed on behalf of the Board

 

Stuart Munro

Chief Executive

4 August 2023



 

Board of Directors and Secretary

Robin Williams, Non-executive Chairman

 

Robin joined the Board in September 2017. He has a wide breadth of corporate experience, gained at a range of quoted and private businesses as well as from an early career in investment banking. He is currently Chairman at Keystone Law Group plc and at Churchill China plc, and is also a non-executive director at Headlam plc and the Manufacturing Technology Centre Limited. Robin qualified as an accountant in 1982 after graduating in engineering science from the University of Oxford. He worked in corporate finance for ten years before leaving the City in 1992 to co-found the packaging business, Britton Group plc. In 1998, he moved to Hepworth plc, the building materials group, and since 2004 he has focused on non-executive work in public, private and private equity backed businesses. His financial background provides the experience required as Chairman of the Group to review and challenge decisions and opportunities. Robin is a member of the Audit and Remuneration Committees and is Chairman of the Nominations Committee.

 

Stuart Munro, Chief Executive

 

Stuart joined the Board on 28 April 2021 as Chief Financial Officer before taking over as Chief Executive on 14 April 2022. He qualified as a chartered accountant with Ernst & Young and worked as a divisional finance director in number of UK companies including Balfour Beatty, Alfred McAlpine Infrastructure Services and FirstGroup as well as Transport for London. From 2015 until joining FIH group, Stuart provided strategic, financial and operational consultancy to a number of medium sized Private Equity backed services companies across a variety of sectors.

 

Reuben Shamu, Chief Finance Officer

 

Reuben joined the Board on 12 September 2022 as Chief Financial Officer. He qualified as a chartered accountant with KPMG and worked in professional practice for 12 years before moving into industry in 2008. For the last 4 years he has been Commercial Director for the UK operations of privately-owned CP Holdings Group, which has interests in hotels and leisure, commercial office real estate, engineering and construction. His previous roles include Finance Director at Sturrock and Robson Group, Financial Planning and Analysis Director at Smiths Detection Group and Group Financial Controller at Veolia Water UK.

 

Robert Johnston, Non-executive Director

 

Robert joined the Board on 13 June 2017. He is an experienced non-executive director and investment professional and has served on the boards of several quoted companies in both North America and in UK, including Fyffes PLC and Supremex Inc. Robert has been the Chief Strategy Officer and Executive Vice President at The InterTech Group, Inc. and has over 20 years of experience in various financial and strategic roles. He is the principal representative of the Jerry Zucker Revocable Trust. Robert brings experience on many transactions at both the corporate and asset level, including debt and equity, and his experience in the banking sector will prove invaluable to developing the Group. Robert represents the Company's largest shareholder, "The Article 6 Marital Trust, created under the First Amended and Restated Jerry Zucker Revocable Trust dated 4-2-07", which has a beneficial holding of 3,596,553 ordinary Shares, representing 28.7% of the Company's issued share capital.

 

He is currently on the boards of Colabor Group Inc, Supremex Inc. (where he is Chairman), Swiss Water Decaffeinated Coffee Inc and RGC Resources Inc. Robert is a member of the Nominations and Audit Committees and is Chairman of the Remuneration Committee.

 

Dominic Lavelle, Non-executive Director

 

Dominic joined the Board on 1 December 2019.  He brings to FIH a wide breadth of corporate experience. Most recently, Dominic was Chief Financial Officer of SDL plc from 2013 to 2018. He has over 15 years' experience as a UK plc Main Board Director and has been Finance Director/Chief Financial Officer of seven UK publicly traded companies including Mothercare plc, Alfred McAlpine plc, Allders plc and Oasis plc. His experience, in both permanent roles and turnaround and restructuring projects across several business sectors is a great benefit to the Group, particularly with the various business streams operated by FIC.

 

After graduating in Civil and Structural Engineering from the University of Sheffield in 1984, Dominic trained with Arthur Andersen and qualified as a chartered accountant in 1989. He is currently senior independent non-executive director and Chair of the Audit Committee of the AIM quoted Fulcrum Utility Services Limited and a director of Steenbok Newco 10 SARL, a wholly owned subsidiary of the Steinhoff Group. Dominic is a member of the Nominations and Remuneration Committees and is Chair of the Audit Committee.

 



Holger Schröder, Non-executive Director

 

Holger joined the Board on 1 June 2023. He has over 28 years' experience gained in a variety of predominantly Swiss companies, most recently as the CFO and a board member of Janser Group, a family-owned real estate and investment business based in Switzerland, where he has been for the last six years. Janser Group controls 12.6% of the ordinary share capital of FIH (which comprises 1,451,998 shares in FIH held by Janser Group and a further 125,327 held personally by Martin Janser). Holger is a member of the Audit, Nominations and Remuneration Committees.

 

Company Secretary

 

AMBA Secretaries Limited

400 Thames Valley Park Drive

Reading

Berkshire

RG6 1PT

 

 



 

Corporate Governance Statement

Dear Shareholder,

As Chairman of the Company, I am responsible for leading the Board in applying good corporate governance and the Board is committed to appropriate governance across the business, both at an executive level and throughout its operations. The Board strives to ensure that the objectives of the business, the principles and risks are underpinned by values of good governance throughout the organisation.

The FIH group plc Board values include embedding a culture of ethics and integrity, and the adoption of higher governance standards, to maintain its reputation by fostering good relationships with employees, shareholders and other stakeholders to deliver long term business success.

In 2018 the AIM Rules for Companies were updated to acknowledge a change in investor expectations toward corporate governance for companies admitted to trading on AIM, and the Board, took the decision to adopt the revised Quoted Companies Alliance Corporate Governance Code 2018 (the "QCA Code") which they believe is the most appropriate recognised governance code for the Company.

The QCA Code has ten principles of corporate governance that the Company has complied with as set out on the Company's website in the Corporate Governance section.

The Board is aware of the need to protect the interests of minority shareholders, and balancing those interests with those of any more substantial shareholders, including those interests of the Jerry Zucker Revocable Trust, a major shareholder holding circa 29% of the issued share capital and voting rights, which are represented on the Board by the non-executive director, Robert Johnston.

Beyond the Annual General Meeting, the Chief Executive and the Chief Financial Officer offer to meet with all significant shareholders after the release of the half year and full year results and the Chairman is available throughout the year. The Chief Executive, Chief Financial Officer and the Chairman are the primary points of contact for the shareholders and are available to answer queries over the phone or via email from shareholders throughout the year.

Business Model and Strategy

The Group's strategy is to continue to develop the potential of its existing companies: to fill storage capacity and make further progress at Momart, to maintain the strong cash flow from PHFC and to invest in FIC to take full advantage of the longer-term growth opportunities in the Falkland Islands. While doing this, management are also alert to the benefits of a well-judged complementary acquisition that would give increased scale and growth potential for the Group and enhance the liquidity of FIH shares.

Risk Management

The Board has overall responsibility for the systems of risk management and internal control and for reviewing their effectiveness. The internal controls are designed to manage rather than eliminate risk and provide reasonable but not absolute assurance against material misstatement or loss. The key risks of the Group are presented in the Chief Executive's Strategic Report.

The Board has determined that an internal audit function is not justified due to the small size of the Group and its administrative function and the high level of director review and authorisation of transactions.

A Directors' and Officers' Liability Insurance policy is maintained for all directors and each director has the benefit of a Deed of Indemnity.

Director Independence

The Board considers itself sufficiently independent. The QCA Code suggests that a board should have at least two independent non-executive directors. The Board has considered each non-executive director's length of service and interests in the share capital of the Group and considers that Mr Williams, Mr  Schröder, Mr Johnston and Mr Lavelle are independent of the executive management and free from any undue extraneous influences which might otherwise affect their judgement. All Board members are fully aware of their fiduciary duty under company law and consequently seek at all times to act in the best interests of the Company as a whole. Whilst the Company is guided by the provisions of the QCA Code in respect of the independence of directors, it gives regard to the overall effectiveness and independence of the contribution made by directors to the Board in considering their independence, and does not consider a director's period of service in isolation to determine this independence.

The Board acknowledges that Robert Johnston, who joined the Board on 13 June 2017, represents the Company's largest shareholder, "The Article 6 Marital Trust, created under the First Amended and Restated Jerry Zucker Revocable Trust dated 4-2-07", (the "Zucker Trust"), which has a beneficial holding of 3,596,553 ordinary Shares, representing circa 29% of the Company's issued share capital. The Board has considered Mr Johnston's independence, given his representation of this shareholding and all Board members have satisfied themselves that they consider Mr Johnston to be independent. This is as a consequence of (i) the fact that Mr Johnston has considerable international investment expertise, and (ii) that the shareholding of his employer in FIH represents only a small part of its wider portfolio, but nonetheless aligns him with the interests of FIH shareholders generally.

The Board also acknowledges that Holger Schröder, who joined the Board on 1 June 2023, represents one of the Company's major shareholders, the Janser Group which controls 12.6% of the Company's equity. The Board has considered Mr Schröder's independence, given his representation of this shareholding and all Board members have satisfied themselves that they consider Mr Schröder to be independent. This is as a consequence of (i) Mr Schröder being employed by the operational side of the Janser Group and (ii) Janser Group having a division involved in the investor-side decision making process which is separate from its operational activities, where Mr Schröder is employed.

All directors retire by rotation and are subject to election by shareholders at least once every three years. Any non-executive directors who have served on the Board for at least nine years are subject to annual re-election.

Time Commitment of Directors

Stuart Munro, Chief Executive of the company and Reuben Shamu, Chief Financial Officer are the only executive directors. Robin Williams, Robert Johnston, Dominic Lavelle and Holger Schröder have all been appointed on service contracts for an initial term of three years. Overall, it is anticipated that non-executive directors spend 10-15 days a year on the Group's business after the initial induction, which includes a trip to the Group's subsidiary in the Falkland Islands. However, the non-executive directors and the Chairman in particular, spend significantly more time than this on the business of the Group.

All directors are expected to attend all Board meetings, the Annual General Meeting and any extraordinary general meetings. Non-executive directors are expected to devote additional time in respect of any ad hoc matters, such as significant investment opportunities, responding to market changes, consideration of any business acquisitions, and any significant recruitment or corporate governance changes.

Skills and Qualities of Each Director

The Board recognised the importance of having directors with a diverse range of skills, experience and attributes, which we have across our current Board. Each Board member contributes a different skill set based on their own experience, which is discussed in detail in the "Board of Directors and Secretary".

Board Meetings

The Board meets frequently throughout the year to consider strategy, corporate governance matters, and performance. Prior to each meeting, all directors receive appropriate and timely information. Since the last annual report was published on 5 July 2022 there have been six Board meetings. Robin Williams, Stuart Munro, Reuben Shamu, Robert Johnston and Dominic Lavelle have attended all meetings. Jeremy Brade ceased to be a director prior to the six meetings and Holger Schröder attended every meeting after his appointment.

The Remuneration committee has met once since 5 July 2022 to review executive base pay and bonus structure and all members of the committee were in attendance.  There have also been two Audit Committee meetings since 5 July 2022, which were attended by all members of the committee.  The Nominations Committee meets on an ad hoc basis to consider Board composition and succession and met a number of times during the year to consider the replacement of the Chairman, who is stepping down, and appointment of a non-executive director.

Board Directors

The Board comprises Robin Williams, the non-executive Chairman, Stuart Munro, the full time Chief Executive, Reuben Shamu, the full time Chief Financial Officer and three other non-executive directors, Robert Johnston, Dominic Lavelle and Holger Schröder.

Details of How Each Director Keeps Their Skill Set Up to Date

The Board as a whole is kept abreast by the Company's lawyers with developments of governance, and by WH Ireland, the Company's Nominated Adviser, of updates to AIM regulations. The Group's auditors, Grant Thornton, meet with the Board as a whole twice a year and keep the Board updated with any regulatory changes in finance and accounting.

 

Any External Advice Sought by the Board

 

RSM Tenon, the Group's tax advisors ensure compliance with taxation law and transfer pricing and the Company's lawyers advised on a number of areas.

 

Internal Advisory Responsibilities

 

The Chief Executive and the Chief Financial Officer help keep the Board up to date on areas of new governance and liaise with the Nominated Adviser on areas of AIM requirements, and with the Company's lawyers on areas such as Modern Slavery, Data Protection and other legal matters. They also liaise with the Company's tax advisers with regards to tax matters and with the Group's auditors with respect to the application of current and new accounting standards, and on the status on compliance generally around the Group. The Chief Executive has frequent communication with the Chairman and is available to other members of the Board as and when required.

 

Board Performance Evaluation

 

In view of the change in Chairman at the forthcoming AGM, no review of the effectiveness of the Board was carried out in the period. It is intended that one will be carried out in the first twelve months of the tenure of the new Chairman, once appointed.

 

Robin Williams

Chairman

4 August 2023

Audit Committee Report

 

The Audit Committee comprises the four non-executive directors: Robert Johnston, Dominic Lavelle, Holger Schröder and Robin Williams, and is chaired by Dominic Lavelle. The Audit Committee reviews the external audit activities, monitors compliance with statutory requirements for financial reporting and reviews the half year and annual financial statements before they are presented to the Board for approval. The Audit Committee also keeps under review the scope and results of the audit and its cost effectiveness and the independence and objectivity of the Auditor and the effectiveness of the Group's internal control systems.

 

The Committee meets twice a year to review both the year end and half year results and the Company's auditors attend both of these meetings in person. It is the Audit Committee's role to provide formal and transparent arrangements, to consider how to apply financial reporting under IFRS, the Companies Act 2006, and the requirements of the QCA Code and also to maintain an appropriate relationship with the independent auditor of the Group.

 

The current terms of reference of the Audit Committee were reviewed and updated in June 2023.

 

Effectiveness of the External Audit Process

 

The Audit Committee is committed to ensuring that the external audit process remains effective on a continuing basis as set out below:

 

·      Reviewing the independence of the incumbent auditor;

·      Considering if the audit engagement planning, including the team quality and numbers is sufcient and appropriate;

·      Ensuring that the quality and transparency of communications with the external auditors are timely, clear, concise and relevant and that any suggestions for improvements or changes are constructive;

·      Exercising professional scepticism, including but not limited to, looking at contrary evidence, the reliability of evidence, the appropriateness and accuracy of management responses to queries, considering potential fraud and the need for additional procedures and the willingness of the auditor to challenge management assumptions; and

·      Feedback is provided by the external auditor twice a year to the Audit Committee, after the full year audit and half year review, with one-to-one discussions held beforehand between the Chair of the Audit Committee and the audit rm partner.

 

External Auditor

 

The external audit service was put out to tender during the year and Grant Thornton UK LLP was appointed as the Company's external auditor during the year. It is therefore the audit engagement partner's first year on the assignment. The analysis of the auditor's remuneration is shown in note 6. Tax advisory services are provided by RSM UK Tax and Accounting Limited. 

 

Non-audit Services Provided by the External Auditor

 

The Audit Committee keeps the appointment of external auditors to perform non-audit services for the Group under continual review, receiving a report at each Audit Committee meeting. In the year ended 31 March 2023, there were no non-audit fees paid to either the outgoing auditors KPMG LLP or incoming auditors Grant Thornton UK LLP (2022: £nil).

 

Emerging Risks

 

The risk management approach is subject to continuous review and updates in order to reflect new and developing issues which might impact business strategy. Emerging or topical risks are examined to understand their signicance to the business. Risks are identied and monitored through risk registers at the Group level and discussed at each Board meeting to consider new threats.

 

Areas of Judgement and Estimation

 

In making its recommendation that the financial statements be approved by the Board, the Audit Committee has taken account of the following significant issues and judgements involving estimation:

 



 

Long term construction contracts

 

Significant estimation is involved in determining the revenue and profit to be recognised on long term contracts. This includes determining percentage completion at the balance sheet date by estimating the total expected costs to complete each contract along with their future profitability. These estimates directly influence the revenue and profit that can be recognised on such contracts.

 

Inventory Provisions

 

An inventory provision is booked when the realisable value from sale of the inventory is estimated to be lower than the inventory carrying value, or where the stock is slow-moving, obsolete or damaged, and is therefore unlikely to be sold. The quantification of the inventory provision requires the use of estimates and judgements and if actual future demand were to be lower or higher than estimated, the potential amendments to the provisions could have a material effect on the results of the Group.

 

Defined Benefit Pension Liabilities

 

A significant degree of estimation is involved in predicting the ultimate benefit payments to pensioners in the FIC defined benefit pension scheme. Actuarial assumptions have been used to value the defined benefit pension liability (see note 23). Management have selected these assumptions from a range of possible options following consultations with independent actuarial advisers. The actuarial valuation includes estimates about discount rates and mortality rates, and the long-term nature of these plans, make the estimates subject to significant uncertainties.

 

There are eleven pensioners currently receiving a monthly pension under the scheme and three deferred members.

 

 

 

Dominic Lavelle

Independent Non-executive Director

4 August 2023

Directors' Report

 

The directors present their annual report and the financial statements for the Company and for the Group for the year ended 31 March 2023.

 

Results and Dividend

 

As set out in the Consolidated Income Statement, the Group profit for the year after taxation amounted to £3,122,000 (2022:  £1,485,000). Basic earnings per share were 24.9 pence (2022: 11.9 pence).

 

With the Group's increase in profitability, the Board is pleased to announce that a final dividend of 5.3 pence per share will be recommended for approval at the Annual General Meeting.  Together with the interim dividend of 1.2 pence paid on 31 January 2023, the proposed dividend will take the total dividend for the year ended 31 March 2023 to 6.5 pence per share (2022: 3.0 pence).

 

Principal Activities

 

The business of the Group during the year ended 31 March 2023 was general trading in the Falkland Islands, the operation of a passenger ferry across Portsmouth Harbour and the provision of international arts logistics and storage services. The principal activities of the Group are discussed in more detail in the Chief Executive's Strategic Report and should be considered as part of the Directors' Report for the purposes of the requirements of the enhanced Directors' Report guidance.

 

The principal activity of the Company is that of a holding company.

 

Qualifying Indemnity Provisions

 

Qualifying indemnity provisions are detailed in the Corporate Governance Statement on page 17.

 

Future Developments

 

Details of future developments are presented within the Strategic Report on page 3 to 14.

 

Directors

 

Reuben Shamu was appointed as a director on 12 September 2022 and Holger Schröder was appointed as a director on 1 June 2023.

 

Directors' Interests

 

The interests of the directors in the issued shares and share options over the shares of the Company are set out below under the heading "Directors' interests in shares". During the year, no director had an interest in any significant contract relating to the business of the Company or its subsidiaries, other than their own service contract.

 

Health and Safety

 

The Group is committed to the health, safety and welfare of its employees and third parties who may be affected by the Group's operations. The focus of the Group's effort is to prevent accidents and incidents occurring by identifying risks and employing appropriate control strategies. This is supplemented by a policy of investigating and recording all incidents.

 

Employees

 

The Board is aware of the importance of good relationships and communication with employees. Where appropriate, employees are consulted about matters which affect the progress of the Group and which are of interest and concern to them as employees. Within this framework, emphasis is placed on developing greater awareness of the financial and economic factors which affect the performance of the Group. Employment policy and practices in the Group are based on non-discrimination and equal opportunity irrespective of age, race, religion, sex, gender identity, sexual orientation, colour and marital status. In particular, the Group recognises its responsibilities towards disabled persons and does not discriminate against them in terms of job offers, training or career development and prospects. If an existing employee were to become disabled during the course of employment, every practical effort would be made to retain the employee's services with whatever retraining is appropriate. The Group's pension arrangements for employees are summarised in note 23.

 

Payments to Suppliers

The policy of the Company and each of its trading subsidiaries, in relation to all its suppliers, is to settle the terms of payment when agreeing the terms of the transaction and to abide by those terms, provided that it is satisfied that the supplier has provided the goods or services in accordance with agreed terms and conditions. The Group does not follow any code or standard payment practice. As a holding company, the Company had £6,000 of trade creditors at 31 March 2023 (2022: £29,000).

 

Share Capital and Substantial Interests in Shares

 

During the year no shares were issued. Further information about the Company's share capital is given in note 25. Details of the Company's executive share option scheme can be found in note 24.

 

The Company has been notified of the following interests in 3% or more of the issued ordinary shares of the Company as at 4 August 2023:

 


Number of shares

Percentage of shares in issue

The Article 6 Marital Trust created under the First Amended and Restated Jerry Zucker Revocable Trust dated 2 April 2007

3,596,553

28.73

Janser Group

1,577,325

12.61

Quaero Capital Funds (Lux) - Argonaut

1,057,158

8.44

J.F.C. Watts

797,214

6.37

Christian Struck

380,000

3.04

 

Charitable and Political Donations

 

Charitable donations made by the Group during the year amounted to £15,802 (2022: £16,214), these were largely paid to local community charities in the Falkland Islands. There were no political donations in the year (2022: nil).

 

Disclosure of Information to the External Auditor

 

The directors who held office at the date of this Directors' Report confirm that, so far as they are each aware, there is no relevant audit information of which the Company's external auditor is unaware; and each director has taken all the steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the Company's external auditor is aware of that information.

 

External Auditor

 

A resolution to approve the appointment of Grant Thornton UK LLP will be put to shareholders at the Annual General Meeting.

 

Greenhouse Gas Emissions

 

The 2018 Regulations introduced requirements under Part 15 of the Companies Act 2006 for large unquoted companies to disclose their annual energy use and greenhouse gas emissions, and related information. However, the Group has applied the option permitted to exclude any energy and carbon information relating to its subsidiary which the subsidiary would not itself be obliged to include if reporting on its own account. This applies to all subsidiaries within the Group. FIH group plc itself consumes less than 40MWh and, as a low energy user, is not required to make the detailed disclosures of energy and carbon information but is required to state, in its relevant report, that its energy and carbon information is not disclosed for that reason. FIH group plc's annual energy use and greenhouse gas emissions, and related information has not been disclosed in this annual report as it is a low energy user.



Statement by the Directors in Performance of their Statutory Duties in Accordance with s172(1) Companies Act 2006

 

As an experienced Board, our intention is to behave responsibly and we consider that we, both as individuals and as a collective Board, as representatives of FIH group plc and the Group as a whole, during the year ended 31 March 2023, have acted in good faith, to promote the success of the Company for the benefit of its members as a whole, having regard to the wider stakeholders as set out in s172 of the Companies Act. In the Falkland Islands and in Gosport/Portsmouth (where PHFC provide the ferry service), the subsidiaries of the Group work closely with local government and local communities and Momart, is an active and founding member of several art communities and its employees give talks at conferences, sharing their experiences on the import and export of art work.

 

Stakeholder Engagement

 

The directors engage with the Group's stakeholders on material issues relating to their business, taking into consideration current and future events and principal decisions. The engagement supports the directors to understand the impact of their decisions and identify any material issues. This aligns with the Group's purpose and strategy. The details of the Group's interaction with its wider stakeholders is as follows:

 

 

Customers:

 

FIC demonstrates its customer focus through surveys and regular meetings with key customers to understand their requirements and to build long-term relationships. During the financial year ended 31 March 2023, Board members met with the Governor of the Falkland Islands and Chief Executive of FIG. They also met with the MoD.

 

PHFC maintains close contact with its customer base via social media and regularly tweets and posts information on Facebook about local pantomimes, football matches, and local events of interest to the local community and visiting tourists.  PHFC also maintains close links to the Navy based in Portsmouth.

 

Momart engage with industry working groups to propose and implement sustainability improvements in delivering fine art logistics services.

 

Colleagues:

 

We have an experienced, diverse and dedicated workforce which we recognise as a key asset of our businesses. Therefore, it is important that we continue to create the right environment to encourage and create opportunities for individuals and teams to realise their full potential.

 

We have an open, collaborative and inclusive management structure and engage regularly with our employees. We do this through an appraisal process, structured career conversations, employee surveys, company presentations and away days.

 

Suppliers:

 

Across the Group, we aim to build long-term relationships with our suppliers that help ensure the continued delivery of the high-quality services the Group provides. We are clear about our payment practices. We expect our suppliers to adopt similar practices throughout their supply chains to ensure fair and prompt treatment of all creditors.  All suppliers are vetted to ensure compliance with the Group's zero tolerance approach to modern slavery.

 

Communities:

 

We are committed to supporting the communities in which we operate, including local businesses, residents and the wider public.

 

We engage with the local communities in Gosport/Portsmouth and in the Falkland Islands through our community donations, and providing employment and work experience opportunities. Apprentices have been taken on at both Momart and PHFC, in areas including Customs and Excise and Engineering.

 

PHFC also work closely with local government to ensure representation in local transport developments.

 

 

 

Environment:

 

The Group is committed to doing its part to protect the local and global environment, minimising the environmental impacts of its activities, products and services, and to the continual improvement of its environmental performance. 

 

Steps already taken include:

 

FIC

·      Use of ground heat source systems on new housing developments and fitting solar panels.

·      Elimination of plastic bags from all retail outlets and use of paper cups, straws, and other recyclable packaging in the FIC cafes wherever possible.

·      LED lighting in offices, warehouses and retail outlets.

·      Utilisation of best practice insulation methods for building construction and renovation.

 

Momart

·      Member of the Gallery Climate Coalition, an industry wide body working on all impacts across the industry.

·      Conversion of vehicles to meet the Euro 6 emissions standard.

·      LED lighting and movement sensors across all warehouse units.

·      Renewable energy from solar panels installed at the Leyton warehouse unit 14.

·      Sourcing of materials for packing cases from sustainable sources wherever possible.

·      Wood waste repurposed or burnt for energy rather than going to landfill.

 

PHFC

·      Installation of new exhaust cleaners on the vessels reducing NOx and Co2 emissions.

·      Smart LED lighting across the estate.

·      Provision of coffee cup recycling.

·      Investigation of smart apps to promote environmentally friendly journey planning.

 

 

 

 

Governments and Regulatory Authorities

 

Our work brings us into regular contact with the MOD, FIG and local authorities, as we deliver construction projects, repairs and other work. We strive to be proactive and transparent, consulting with them to ensure that our planning reflects local sensitivities.

 

PHFC staff attend meetings with local government members and Gosport Borough Council.

 

The Momart Business Process and Compliance Manager attends industry forums, such as Logistics UK, discussing developments in the industry with the forum and any attending HMRC officers. The Momart Security Manager liaises with the Civil Aviation Authority to ensure that Momart's security procedures and staff training remain compliant.

 

Media

 

All businesses are active on social media, using Twitter, Instagram, LinkedIn and Facebook.

 

 

 



 

 

Non-governmental Organisations:

 

PHFC is a Heritage Committee member.

 

Momart representatives attend the UK Registrars' Group conference and the European Registrars' Group conference and speak on issues such as customs procedures, Brexit, or specialised Export licences, such as the "Convention on International Trade in Endangered Species of Wild Fauna and Flora", which requires permits for the export of ivory, rosewood and mahogany.

 

With over 40 years of experience and expertise in handling, transportation and storage of art, Momart has held a Royal Warrant for work with the Royal Collection since 1993.

 

Momart is a founding member of ARTIM, "the Art Transporter International Meeting" and attends the annual conference to discuss the best practices and the key business issues concerning the packing, transportation and movement of works of art.

 

Momart is also a member of the UK Registrars' Group, which is a non-profit association providing a forum for the exchange of ideas and expertise between registrars, collection managers and other museum professionals in the United Kingdom, Europe and worldwide.

 

 

Shareowners and Analysts:

 

Beyond the Annual General Meeting, the Chief Executive, Chief Financial Officer and the Chairman offer to meet with all significant shareholders after the release of the half year and full year results. The Chief Executive, Chief Financial Officer and the Chairman are the primary points of contact for the shareholders and are available to answer queries over the phone or via email from shareholders throughout the year.

 

The Annual General Meeting provides a chance for investors and analysts to meet the Board face-to-face.

 

 

Debt Providers:

 

The Group has several debt facilities provided by HSBC, who are kept fully informed on all relevant areas of the business, through regular meetings and presentations. The relationship with HSBC dates back to the Company's incorporation in 1997.

 



 

Annual General Meeting

 

The Company's Annual General Meeting will be held on 28 September 2023. The notice of the Annual General Meeting and a description of the special business to be put to the meeting are considered in a separate circular to Shareholders.

 

Details of Directors' Remuneration and Emoluments

 

The remuneration of non-executive directors consists only of annual fees for their services, both as members of the Board, and of Committees on which they serve.

 

An analysis of the remuneration and taxable benefits in kind (excluding share options) provided for and received by each director during the year to 31 March 2023 and in the preceding year is as follows:

 

 


 

Salary / Fees

£'000

Health insurance

£'000

Pension

Contributions

£'000

 

Bonus

£'000

2023

Total

£'000

2022

Total

£'000

John Foster*

8

-

-

-

8

522

Stuart Munro

258

1

-

100

359

271

Reuben Shamu**

89

1

9

17

116

-

Robin Williams

60

-

-

-

60

60

Jeremy Brade***

14

-

-

-

14

30

Robert Johnston

30

-

-

-

30

30

Dominic Lavelle

30

-

-

-

30

30

Holger Schröder****

-

-

-

-

-

-

Total

489

2

9

117

617

943

  

*     Resigned 14 April 2022

**   Appointed 12 September 2022

***  Resigned 20 September 2022

**** Appointed 1 June 2023

 

 

The Chief Executive, Stuart Munro, participates in an annual performance related bonus arrangement, with the potential during the year to earn up to 60% of his salary. The Chief Finance Officer, Reuben Shamu, participates in an annual performance related bonus arrangement, with the potential during the year to earn up to 30% of his salary. The bonuses are subject to the achievement of specified corporate and personal objectives and are payable in cash. 

 

Directors' Interests in Shares

 

Full details of historic awards of deferred shares to John Foster are provided in note 24 Employee benefits: share based payments. During the year ended 31 March 2023, no options were exercised by him and the remaining 3,591 nil cost share options have an expiry date of 17 June 2023.

 

At 31 March 2023, Stuart Munro had 55,814 LTIP share options with an exercise price of 10 pence, a 3-year vesting period and an expiry date of 3 December 2026. No other directors have any share options.  

 

The exercise of LTIP awards is subject to achieving share price performance and earnings targets which have been determined by the remuneration committee, after discussion with the Company's advisers. No LTIP share options were granted during the year.

In addition to the share options set out above, the interests of the directors, their immediate families and related trusts in the shares of the Company according to the register kept pursuant to the Companies Act 2006 were as shown below:

 


Ordinary shares as at

31 March 2023

Ordinary shares as at

31 March 2022

Robin Williams

5,625

5,625

Stuart Munro

4,400

4,400

John Foster

118,542

118,542

Jeremy Brade

15,022

15,022

Robert Johnston*

*3,656,553

*3,654,053

Dominic Lavelle

2,000

2,000

 

* Robert Johnston holds 60,000 shares in his own name, and as he is also the representative of the Company's largest shareholder, "The Article 6 Marital Trust, created under the First Amended and Restated Jerry Zucker Revocable Trust dated 4-2-07", which holds 3,596,553 Shares, Robert Johnston is interested in 3,656,553 Shares in total, representing 29.2 percent of the Company's 12,519,900 total voting rights.

 

Additional information and disclosures required in this Directors' Report by the Companies Act 2006 and AIM rules and regulations can be located as follows:

 

Disclosure

Location



Financial risk management

Note 26 of the financial statements

Matters of Strategic importance

Chief Executive's Strategic Review



 

 

Approved by the Board and signed on its behalf by:

 

 

AMBA Secretaries Limited

4 August 2023

 

Kenburgh Court

133-137 South Street

Bishop's Stortford

Hertfordshire

CM23 3HX



 

Statement of Directors' Responsibilities in Respect of the Annual Report and the Financial Statements

 

The directors are responsible for preparing the Annual Report, Strategic Report, Directors' Report, and the Group and Company financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare Group and parent Company financial statements for each financial year. Under the AIM Rules of the London Stock Exchange, they are required to prepare the Group financial statements in accordance with UK-adopted international accounting standards and applicable law and they have elected to prepare the parent Company financial statements on the same basis.

Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and parent Company and of the Group's profit or loss for that period.  In preparing each of the Group and parent Company financial statements, the directors are required to: 

·      select suitable accounting policies and then apply them consistently; 

·      make judgements and estimates that are reasonable, relevant and reliable; 

·      state whether they have been prepared in accordance with UK-adopted international accounting standards; 

·      assess the Group and parent Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and 

·      use the going concern basis of accounting unless they either intend to liquidate the Group or the parent Company or to cease operations, or have no realistic alternative but to do so. 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the parent Company's transactions and disclose with reasonable accuracy at any time the financial position of the parent Company and enable them to ensure that its financial statements comply with the Companies Act 2006.  They are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities. 

Under applicable law and regulations, the directors are also responsible for preparing a Strategic Report and a Directors' Report that complies with that law and those regulations.

 

The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

 



 

 

Consolidated Income Statement

FOR THE YEAR ENDED 31 MARCH 2023

 

 

Notes

 

Underlying

2023

£'000

Non-trading

Items

(Note 5)

2023

£'000

Total

2023

£'000

Underlying

2022

£'000

Non-trading

Items

(Note 5)

2022

£'000

Restated Total

2022

£'000

 









 

4

Revenue

52,712

-

52,712

40,319

-

40,319

 



 

 

 




 


Cost of sales

(31,588)

-

(31,588)

(23,405)

-

(23,405)

 

 

 

 

 

 




 

 

Gross profit

21,124

-

21,124

16,914

-

16,914

 

 

 

 

 

 




 


Operating expenses

(17,111)

(79)

(17,190)

(13,834)

(300)

(14,134)

 



 

 

 




 

6

Operating profit / (loss)

4,013

(79)

3,934

3,080

(300)

2,780

 

8

Net Finance income / (expense)

(795)

907

112

(796)

704

(92)

 

 


 

 

 




 

 

Profit before tax

3,218

828

4,046

2,284

404

2,688

 

 


 

 

 




 

9

Taxation

(705)

(219)

(924)

(1,094)

(109)

(1,203)

 

 


 

 

 




 

 

Profit for the year attributable to equity holders of the company 

2,513

609

3,122

1,190

295

1,485

 

 


 

 

 




 

10

Earnings per share

 

 

 




 



 

 

 




 


Basic

 

 

24.9p



11.9p

 



 

 

 




 


Diluted

 

 

24.9p



11.9p

 

 

 

The accompanying notes form part of these Financial Statements.



 

Consolidated Statement of Comprehensive Income

FOR THE YEAR ENDED 31 MARCH 2023



2023

Restated 2022

 



£'000

£'000

 



 


 


Profit for the year 

3,122

1,485

 



 


 


Cash flow hedges: effective portion of changes in fair value

-

172

 


Amortisation of hedge reserve

13

3

17

Deferred tax on share options and other financial liabilities

(3)

58

17

Deferred tax on effective portion of changes in fair value

-

(40)

 


Items that are or may be reclassified subsequently to profit or loss

10

193

 



 


 

23

Re-measurement of the FIC defined benefit pension scheme

553

237

 

17

Movement on deferred tax asset relating to the pension scheme

(176)

(62)

 


Items which will not ultimately be recycled to the income statement

377

175

 



 


 


Total other comprehensive income

387

368

 


Total comprehensive income

3,509

1,853

 

                                                                                                                                            

The accompanying notes form part of these Financial Statements.



 

Consolidated Balance Sheet

AT 31 MARCH 2023

 


 

Restated

Restated 1 April

 

 


2023

2022

2021

 

Notes

 

£'000

£'000

£'000

 

 

Non-current assets

 



 

11

Intangible assets

4,376

4,229

4,183

 

12

Property, plant and equipment

38,677

38,718

39,562

 

13

Investment properties

7,922

8,164

7,123

 

15

Investment in Joint venture

259

259

259

 

19

Trade and other receivables due in more than one year

-

44

88

 

16

Finance lease receivable

681

725

590

 

17

Deferred tax assets

482

666

739

 

26

Derivative financial instruments

1,559

644

-

 

           


 



 

 

Total non-current assets

53,956

53,449

52,544

 

 


 



 

 

Current assets

 



 

18

Inventories

6,876

6,740

5,871

 

19

Trade and other receivables

10,189

7,947

5,868

 

16

Finance lease receivable

397

511

558

 

20

Cash and cash equivalents

12,800

9,572

14.556

 

 


 



 

 

Total current assets

30,262

24,770

26,853

 

 


 



 

 

TOTAL ASSETS

84,243

78,219

79,397

 

 


 



 

 

Current liabilities

 



 

22

Trade and other payables

(13,718)

(9,970)

(6,775)

 

21

Interest-bearing loans and borrowings

(1,520)

(1,536)

(3,424)

 

 

Corporation tax payable

(599)

(363)

(113)

 

 


 



 

 

Total current liabilities

(15,837)

(11,869)

(10,312)

 

 


 



 

 

Non-current liabilities

 



 

21

Interest-bearing loans and borrowings

(18,214)

(19,183)

(23,832)

 

26

Derivative financial instruments

-

-

(234)

 

23

Employee benefits

(1,978)

(2,562)

(2,842)

 

17

Deferred tax liabilities

(4,215)

(3,780)

(3,113)

 

 


 



 

 

Total non-current liabilities

(24,407)

(25,525)

(30,021)

 

 


 



 

 

TOTAL LIABILITIES

(40,269)

(37,394)

(40,333)

 

 


 



 

 

Net assets

43,974

40,825

39,064

 

 


 



 

25

Capital and reserves

 



 

 

Equity share capital

1,251

1,251

1,251

 


Share premium account

17,590

17,590

17,590

 


Other reserves

703

703

703

 


Retained earnings

24,514

21,378

19,752

 


Hedging reserve

(84)

(97)

(232)

 

 

Total equity

43,974

40,825

39,064

 

 

These financial statements, of which the accompanying notes form part, were approved by the Board of directors on 4 August 2023 and were signed on its behalf by:

            S I Munro                                 R Shamu

            Director                                                Director                       

Company Balance Sheet

AT 31 MARCH 2023






 


 

 


 

Restated

Restated 1 April

 

 


2023

2022

2022

 

Notes

 

£'000

£'000

£'000

 

 

Non-current assets

 



 

13

Investment properties

18,751

18,956

19,164

 

14

Investment in subsidiaries

26,757

26,762

26,737

 

19

Loans to subsidiaries

10,257

10,057

10,207

 

26

Derivative financial instruments

1,559

644

-

 

17

Deferred tax

-

-

44

 

           

Total non-current assets

57,324

56,419

56,152

 

 


 



 

 

Current assets

 



 

19

Trade and other receivables

11

45

118

 

 

Corporation tax receivable

189

84

54

 

20

Cash and cash equivalents

3,307

4,376

5,462

 

 


 



 

 

Total current assets

3,507

4,505

5,634

 

 


 



 

 

TOTAL ASSETS

60,831

60,924

61,786

 

 


 



 

 

Current liabilities

 



 

22

Trade and other payables

(5,939)

(5,849)

(6,391)

 

21

Interest-bearing loans and borrowings

(529)

(529)

(520)

 

 

Total current liabilities

(6,468)

(6,378)

(6,911)

 

 

Non-current liabilities

 



 

21

Interest-bearing loans and borrowings

(11,617)

(12,139)

(12,668)

 

17

Deferred tax

(391)

(146)

-

 

 

Derivative financial instruments

-

-

(234)

 

 

Total non-current liabilities

(12,008)

(12,285)

(12,902)

 

 

TOTAL LIABILITIES

(18,476)

(18,663)

(19,813)

 

 

Net assets

42,355

42,261

41,973

 

 


 



 

25

Capital and reserves

 



 

 

Equity share capital

1,251

1,251

1,251

 


Share premium account

17,590

17,590

17,590

 


Other reserves

5,389

5,389

5,389

 


Retained earnings

18,209

18,128

17,975

 


Hedging reserve

(84)

(97)

(232)

 

 

Total equity

42,355

42,261

41,973

 

 

As permitted by Section 408 of the Companies Act 2006, a separate profit and loss account of the Parent Company has not been presented. The Parent Company's profit for the financial year is £440,000 (2022: £245,000).

These financial statements, of which the accompanying notes form part, were approved by the Board of directors on 4 August 2023 and were signed on its behalf by:

            S I Munro                                 R Shamu

            Director                                                Director

 

            Registered company number: 03416346

Consolidated Cash Flow Statement

FOR THE YEAR ENDED 31 MARCH 2023

 


2023

Restated 2022



£'000

£'000

Note

Cash flows from operating activities

 


 

Profit for the year after taxation

3,122

1,485

 

Adjusted for:

 


 

Non-cash items:

 


11

Amortisation

10

21

12

Depreciation: Property, plant and equipment

2,420

2,216

13

Depreciation: Investment properties

210

197

23

Interest cost on pension scheme liabilities

70

56

24

Equity-settled share-based payment expenses

41

45


Fair value movement in derivative financial instrument

(907)

(704)


Gain on disposal of fixed assets

(337)

(9)


Exchange losses

26

13


Bank interest payable

424

436


Lease liability finance expense

304

304


Decrease / (increase) in finance lease receivable

158

(88)


Corporation and deferred tax expense

924

1,203


Non-cash items

3,343

3,690


 

 



Operating cash flow before changes in working capital

6,465

5,175



 



Increase in trade and other receivables

(2,198)

(2,035)


Increase in inventories

(136)

(869)


Increase in trade and other payables

3,748

3,195


Changes in working capital

1,414

291



 



Cash generated from operations

7,879

5,466


Payments to pensioners

(101)

(99)


Corporation taxes paid

(243)

(256)


Net cash flow from operating activities

7,535

5,111


 

Cash flows from investing activities

 


12

Purchase of property, plant and equipment

(1,859)

(1,333)

11

Purchase of Intangibles

(115)

(67)

11

Purchase of investment properties

(10)

(1,238)


Proceeds from sale of property, plant and equipment

378

76


Net cash flow from investing activities

(1,606)

(2,562)


 

 


 

Cash flow from financing activities

 


 

 

Repayment of bank loans

(928)

(5,927)

 

 

Bank interest paid

(424)

(436)

 

 

Repayment of lease liabilities principal

(618)

(716)

 

 

Lease liabilities interest paid

(304)

(304)

 

 

Cash outflow on nil cost option exercise

-

(12)

 

 

Dividends paid

(401)

(125)

 

 

Net cash flow from financing activities

(2,675)

(7,520)

 

 

Net increase / (decrease)  in cash and cash equivalents

3,254

(4,971)

 

 

Cash and cash equivalents at start of year

9,572

14,556

 

 

Exchange losses on cash balances

(26)

(13)

 

 

Cash and cash equivalents at end of year

12,800

9,572

 

 

The accompanying notes form part of these Financial Statements.



 

Company Cash Flow Statement

FOR THE YEAR ENDED 31 MARCH 2023

 


2023

Restated 2022



£'000

£'000

Note

Cash flows from operating activities

 



Holding Company profit for the year

440

245


Adjusted for:

 



Bank interest payable

368

387


Fair value movement in financial instrument

(907)

(704)


Equity-settled share-based payment expenses

47

20

13

Depreciation: Investment properties

210

208


Corporation and deferred tax expense / (income)

250

135


Non-cash adjustment

(32)

46


 

 



Operating cash flow before changes in working capital

408

291



 



Decrease in trade and other receivables

34

73


(Decrease) / increase in trade and other payables

(95)

333


Changes in working capital and provisions

(61)

406



 



Cash generated from operations

347

697


Corporation taxes paid

(105)

(14)


Net cash flow from operating activities

242

683


 

 



Cash flow from investing activities

 



Purchase of property, plant and equipment

(5)

-


Cash outflows in inter-company borrowing

-

(150)


Cash inflows in inter-company borrowing

-

850


Net cash flow from investing activities

(5)

700


Cash flow from financing activities

 



Bank loan repaid

(522)

(520)


Interest paid

(368)

(387)


Cash inflows / (outflows) in inter-company borrowing

185

(1,875)


Cash (outflows) / inflows in inter-company borrowing

(200)

450


Cash outflow on nil cost option exercise

-

(12)


Dividends paid

(401)

(125)


Net cash flow from financing activities

(1,306)

(2,469)



 



Net decrease in cash and cash equivalents

(1,069)

(1,086)


Cash and cash equivalents at start of year

4,376

5,462



 


 

Cash and cash equivalents at end of year

3,307

4,376

                                                                                                                                                          

The accompanying notes form part of these Financial Statements.

 

 



 

Consolidated Statement of Changes in Shareholders' Equity

FOR THE YEAR ENDED 31 MARCH 2023


Equity share

capital

£'000

Share premium account £'000

Other reserves

£'000

 Retained earnings

£'000

Hedge reserve

£'000

Total equity

£'000

 

 






 

 

Balance 1 April 2021 - restated

1,251

17,590

703

19,752

(232)

39,064

 








 

Profit for the year

-

-

-

1,485

-

1,485

 

Cash flow hedges: effective portion

-

-

-

-

172

172

 

of changes in fair value







 

Amortisation of hedge reserve

-

-

-

-

3

3

 

Deferred tax on cash flow hedges

-

-

-

-

(40)

(40)

 

Deferred tax on other financial

-

-

-

58

-

58

 

liabilities







 

Re-measurement of the defined

-

-

-

175

-

175

 

benefit pension liability, net of tax







 

Total comprehensive income

-

-

-

1,718

135

1,853

 








 








 

Transactions with owners in their capacity as owners:






 

Share option exercise

-

-

-

(12)

-

(12)

 

Share based payments

-

-

-

45

-

45

 

Dividends paid

-

-

-

(125)

-

(125)

 

Total transactions with owners

-

-

-

(92)

-

(92)

 

Balance at 31 March 2022-restated

1,251

17,590

703

21,378

(97)

40,825

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

 

 

 

 

 

Profit for the year

-

-

-

3,122

-

3,122

 

Amortisation of hedge reserve

-

-

-

-

13

13

 

Deferred tax on share options

-

-

-

(3)

-

(3)

 

and other financial liabilities

 

 

 

 

 

 

 

Re-measurement of the defined

-

-

-

377

-

377

 

benefit pension liability, net of tax

 

 

 

 

 

 

 

Total comprehensive income

-

-

-

3,496

13

3,509

 


 

 

 

 

 

 

 

Transactions with owners in their capacity as owners:

 

 

 

 

 

 

 

Share based payments

-

-

-

41

-

41

 

Dividends paid

-

-

-

(401)

-

(401)

 

Total transactions with owners

-

-

-

(360)

-

(360)

 

Balance at 31 March 2023

1,251

17,590

703

24,514

(84)

43,974

 

 

The accompanying notes form part of these Financial Statements.



 

Company Statement of Changes in Shareholders' Equity

 

FOR THE YEAR ENDED 31 MARCH 2023


 


Equity share

capital

£'000

Share premium account £'000

Other reserves

£'000

 Retained earnings

£'000

Hedge Reserve

£'000

Total equity

£'000







 

Balance at 1 April 2021-restated

1,251

17,590

5,389

17,975

(232)

41,973








Profit for the year

-

-

-

245

-

245

Cash flow hedges: effective portion

-

-

-

-

172

172

of changes in fair value







Amortisation of hedge reserve

-

-

-

-

3

3

Deferred tax on cash flow hedges

-

-

-

-

(40)

(40)

Total comprehensive loss

-

-

-

245

135

380















Transactions with owners in their capacity as owners:







Share option exercise

-

-

-

(12)

-

(12)

Share based payments

-

-

-

45

-

45

Dividends paid

-

-

-

(125)

-

(125)

Total transactions with owners

-

-

-

(92)

-

(92)

Balance at 31 March 2022-restated

1,251

17,590

5,389

18,128

(97)

42,261


 

 

 

 

 

 

Profit for the year

-

-

-

440

-

440

Amortisation of hedge reserve

-

-

-

-

13

13


 

 

 

 

 

 

Total comprehensive income

-

-

-

440

13

453


 

 

 

 

 

 


 

 

 

 

 

 

Transactions with owners in their capacity as owners:

 

 

 

 

 

 

Share based payments

-

-

-

42

 

42

Dividends paid

-

-

-

(401)

-

(401)

Total transactions with owners

-

-

-

(359)

-

(359)

Balance at 31 March 2023

1,251

17,590

5,389

18,209

(84)

42,355

 

The accompanying notes form part of these Financial Statements.

 



 

Notes to the Financial Statements

1. Accounting policies

 

General information

 

FIH group plc (the "Company") is a public company limited by shares incorporated and domiciled in the UK.

 

Reporting entity

 

The Group 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 and not about its Group.  The consolidated financial statements of the Group for the year ended 31 March 2023 were authorised for issue in accordance with a resolution of the directors on 3 August 2023.

 

Basis of preparation

 

The financial information set out above does not constitute the Group's statutory accounts for the years ended 31 March 2023 or 2022 but is derived from those accounts. Statutory accounts for the year ended 31 March 2022 have been delivered to the registrar of companies, and those for the year ended 31 March 2023 will be delivered in due course. The auditor has reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006. These condensed preliminary financial statements have been prepared in accordance with the recognition and measurement requirements of UK-adopted international financial reporting standards in conformity with the requirements of the Companies Act 2006, in line with the Group's statutory accounts.

 

Both the Parent Company financial statements and the Group financial statements have been prepared in accordance with UK-adopted International Accounting Standards ("Adopted IFRS"). On publishing the Parent Company financial statements together with the Group 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 related notes that form a part of the approved financial statements.

 

The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in these consolidated financial statements.

 

Judgements made by the directors in the application of these accounting policies that have a significant effect on the financial statements and estimates with a significant risk of material adjustment next year are discussed in note 30.

 

The financial statements are presented in pounds sterling, rounded to the nearest thousand and are prepared on the historical cost basis, as modified by the revaluation of certain financial instruments held at fair value.

 

The cash flows between the parent Company and its subsidiaries have been classified as either financing or investing activities, depending on whether they relate to subsidiaries in a net payable or net receivable position respectively.

 

Going concern

 

The directors are responsible for preparing a going concern assessment covering a period of at least 12 months with the directors having assessed the period to 31st of March 2025 (the going concern period). The financial statements have been prepared on a going concern basis which the directors consider to be appropriate for the following reasons.

 

As at 31 March 2023 the Group had net current assets of £14.8 million, cash balances of £12.8 million and net debt of approximately £7.5 million.

 

 

 



 

1. Accounting policies (continued)

Cash flow forecasts for the Group have been prepared covering the going concern period and the directors have considered downside scenarios to the base case forecasts to reflect emerging risks and uncertainties as a result of global economic conditions. The base case and sensitised forecasts indicate that the business will be cash generative over this period and that the Group will comply with its covenants and have sufficient funds to meet its liabilities as they fall due throughout the going concern period.

 

Consequently, the directors are confident that the Group and Company will have sufficient funds to continue to meet its liabilities as they fall due for at least 12 months from the date of approval of the financial statements and the financial statements have therefore been prepared on a going concern basis.

 

Restatement 

 

The prior year financial information for the following areas was restated as set out below.

 

Right of use assets

The seabed lease in PHFC contains variable rental payments which are reset every five years based on the revenue of the ferry business. This lease was previously incorrectly accounted for as one 50-year lease with all future expected payments over the period of the lease reflected in the measurement of the liability.  The liability has been restated as an element of the future lease payments varies with the revenue of PHFC and should not have been reflected in the measurement of the liability. The lease liability will be remeasured in the future when variable payments become fixed. The impact of this was an increase in opening retained earnings at 1 April 2021 of £0.2 million and reductions in property, plant and equipment, and interest-bearing loans and borrowings of £0.8 million and £1.0 million respectively. The impact at 31 March 2022 was an increase in retained earnings of £0.2 million and reductions in property, plant and equipment and interest-bearing loans and borrowings of £0.4 million and £0.6 million respectively. There was no impact on profit for the year ended 31 March 2022.

 

Impairment of investment in Company

During the year, it was identified that the parent company's investment in Momart had been incorrectly impaired in the year ended 31 March 2020. As a result, the previously recorded impairment charge of £5.1m has been reversed at 31 March 2021. It was also noted that the parent Company's investment in Erebus Limited should have been fully impaired in a year prior to 1 April 2021. Consequently, an impairment of £2.4 million was recorded at 1 April 2021. The net impact of these adjustments was to increase investments and retained earnings by £2.7m at both 31 March 2021 and 31 March 2022. There was no impact on profit for the year ended 31 March 2022.

 

Hedge accounting

Following a reassessment of the criteria for applying hedge accounting after the benchmark change from LIBOR to SONIA, it was concluded that the hedging criteria were no longer met. Hedge accounting was therefore discontinued from 1 January 2022, resulting in a credit of £0.5 million to the prior year profit and loss (comprising a £0.7m credit to net finance income and a £0.2m charge to tax expense) which was previously incorrectly accounted for in the hedging reserve. The impact on both basic and diluted EPS in the year to 31 March 2022 was an increase of 4.3p.

 

Basis of consolidation

 

The consolidated financial statements comprise the financial statements of FIH group plc and its subsidiaries (the "Group"). A subsidiary is any entity FIH group plc has the power to control. Control is determined by FIH group plc's exposure or rights, to variable returns from its involvement with the subsidiary and the ability to affect those returns through its power over the subsidiary. The financial statements of subsidiaries are prepared for the same reporting period as the Parent Company. The accounting policies of subsidiaries have been changed when necessary, to align them with the policies adopted by the Group.

 

Subsidiaries are consolidated from the date on which control is transferred to the Group and cease to be consolidated from the date on which control is transferred out of the Group.

 

All intra-company balances and transactions, including unrealised profits arising from intra-group transactions, are eliminated in full in preparing the consolidated financial statements. Investments in subsidiaries within the Company balance sheet are stated at impaired cost.

 



 

1. Accounting policies (continued)

Presentation of income statement

 

Due to the non-prescriptive nature under IFRS as to the format of the income statement, the format used by the Group is explained below.

 

Operating profit is the pre-finance profit of continuing activities and acquisitions the Group, and in order to achieve consistency and comparability, is analysed to show separately the results of normal trading performance ("underlying profit"), individually significant charges and credits, changes in the fair value of financial instruments and non-trading items. Such items arise because of their size or nature.

 

In the year ended 31 March 2023, non-trading items were made up of £79,000 redundancy costs. In the year ended 31 March 2022, non-trading items were made up of £300,000 of people-related restructuring costs including employee redundancies and compensation payable to the former Chief Executive. Fair value movements on hedging items are included as a non-trading finance income/cost.

 

Foreign currencies

 

Transactions in foreign currencies are translated to the functional currencies of Group entities at exchange rates ruling at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are retranslated to the functional currency using the relevant rates of exchange ruling at the balance sheet date and the gains or losses thereon are included in the income statement.

 

Non-monetary assets and liabilities are translated using the exchange rate at the date of the initial transaction.

 

Property, plant and equipment

 

Property, plant and equipment are measured at cost less accumulated depreciation and impairment losses. Cost comprises purchase price and directly attributable expenses. Depreciation is charged to the income statement on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment. The estimated useful lives are as follows:

 

Right of use assets


5 - 50 years

 

Freehold buildings


20 - 50 years

Long leasehold land and buildings


50 years

Vehicles, plant and equipment


4 - 10 years

Ships


15 - 30 years

 

The carrying value of assets and their useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. If an indication of impairment exists, the assets are written down to their recoverable amount and the impairment is charged to the income statement in the period in which it arises. Freehold land and assets under construction are not depreciated.

 

Investment properties - Group

 

Investment properties are properties held either to earn rental income or for capital appreciation or for both. Investment properties are measured at cost less accumulated depreciation and impairment losses. Cost comprises purchase price and directly attributable expenses. Depreciation is charged to the income statement on a straight-line basis over the estimated useful lives of each property. The investment property portfolio in the Falkland Islands consists mainly of properties built by FIC, and these and the properties purchased are depreciated over an estimated useful life of 50 years.

 



 

1. Accounting policies (continued)

Investment properties - Company

 

The investment property in the Company consists of the Leyton site purchased in December 2018, with five warehouses which are rented to Momart. The purchase price allocated to land has not been depreciated, and the purchase price allocated to each property has been depreciated on a straight-line basis over an estimated useful life of 40 years, after consideration of the age and condition of each property, down to an estimated residual value of nil.

 

The carrying value of assets and their useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. If an indication of impairment exists, the assets are written down to their recoverable amount and the impairment is charged to the income statement in the period in which it arises. Freehold land is not depreciated.

 

Joint Ventures

 

Jointly controlled entities are those entities over whose activities the Group has joint control, established by contractual agreement and requiring the joint venture partners' unanimous consent for strategic financial and operating decisions. FIH group plc has joint control over an investee when it has exposure or rights to variable returns from its involvement with the joint venture and has the ability to affect those returns through its joint power over the entity.

 

Jointly controlled entities are accounted for using the equity method (equity accounted investees) and are initially recognised at cost. The consolidated financial statements include the Group's share of the total comprehensive income and equity movements of equity accounted investees, from the date that significant influence or joint control commences until the date that significant influence or joint control ceases. When the Group's share of losses exceeds its interest in an equity accounted investee, the Group's carrying amount is reduced to nil and recognition of further losses is discontinued except to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of an investee.

 

Intangible assets

 

Goodwill

 

Goodwill arises on the acquisition of subsidiaries and businesses.

 

Acquisitions prior to 1 April 2006

 

In respect of acquisitions prior to transition to IFRS, goodwill is recorded on the basis of deemed cost, which represents the amount recorded under previous Generally Accepted Accounting Principles ("GAAP") as at the date of transition. Goodwill is not amortised but reviewed for impairment annually, or more frequently, if events or changes in circumstances indicate that the carrying value may be impaired.  At 31 March 2023, all goodwill arising on acquisitions prior to 1 April 2006 has either been offset against other reserves on acquisition, or written off through the income statement as an impairment in prior years.

 

Acquisitions on or after 1 April 2006

 

Goodwill on acquisition is initially measured at cost, being the excess of the cost of the business combination over the acquirer's interest in the fair value of the identifiable assets, liabilities and contingent liabilities of the acquired business. Following initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is not amortised but reviewed for impairment annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. Amortisation is charged to the income statement on a straight-line basis over the estimated useful lives of intangible assets unless such lives are indefinite. Other intangible assets are amortised from the date they are available for use. In the year ended 31 March 2014, the directors reviewed the life of the brand name at Momart and after considerations of its strong reputation in a niche market and its history of stable earnings and cash flow, which is expected to continue into the foreseeable future, determined that its useful life is indefinite, and amortisation ceased from 1 October 2013.

 

 

 



 

1. Accounting policies (continued)

Computer software

 

Acquired computer software is capitalised as an intangible asset on the basis of the cost incurred to acquire and bring the specific software into use. Amortisation is charged to the income statement on a straight-line basis over the estimated useful lives of intangible assets from the date that they are available for use. The estimated useful life of computer software is seven years.

 

Impairment of non-financial assets

 

At each reporting date the Group assesses whether there is any indication that an asset may be impaired. Goodwill and intangible assets with indefinite lives are tested for impairment, at least annually. Where an indicator of impairment exists or the asset requires annual impairment testing, the Group makes a formal estimate of the recoverable amount. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. Impairment losses are recognised in the income statement.

 

Recoverable amount is the greater of an asset's or cash-generating unit's fair value, less cost to sell or value in use. It is determined for an individual asset, unless the asset's value in use cannot be estimated and it does not generate cash inflows that are largely independent of those from other assets or groups of assets, in which case the recoverable amount is determined for the cash-generating unit to which the asset belongs. In assessing value in use, the estimated future cash flows are discounted to their present value using a discount rate that reflects current market assessments of the time value of money and risks specific to the asset.

 

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses are reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

 

Finance income and expense

 

Net financing costs comprise interest payable and interest receivable which are recognised in the income statement. Interest income and interest payable are recognised as a profit or loss as they accrue, using the effective interest method.

 

Employee share awards

 

The Group provides benefits to certain employees (including directors) in the form of share-based payment transactions, whereby the recipient renders service in return for shares or rights over future shares ("equity settled transactions"). The cost of these equity settled transactions with employees is measured by reference to an estimate of their fair value at the date on which they were granted using an option input pricing model taking into account the terms and conditions upon which the options were granted. The amount recognised as an expense is adjusted to reflect the actual number of share options for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of share options that meet the related service and non-market performance conditions at the vesting date. For share-based payment awards with market performance vesting conditions, the grant date fair value of the share-based payments is measured to reflect such conditions and there is no true up for differences between expected and actual outcomes.

 

The cost of equity settled transactions is recognised, together with a corresponding increase in reserves, over the period in which the performance conditions are fulfilled, ending on the date that the option vests. Where the Company grants options over its own shares to the employees of subsidiaries, it recognises, in its individual financial statements, an increase in the cost of investment in its subsidiaries equal to the equity settled share-based payment charge recognised in its consolidated financial statements with the corresponding credit being recognised directly in equity.

 



 

1. Accounting policies (continued)

Inventories

 

Inventories are stated at the lower of cost and net realisable value. Cost includes all costs incurred in bringing each product to its present location and condition. The cost of raw materials, consumables and goods for resale comprises purchase cost, on a weighted average basis and where applicable includes expenditure incurred in transportation to the Falkland Islands. Work-in-progress and finished goods cost includes direct materials and labour plus attributable overheads based on a normal level of activity. Construction-in-progress is stated at the lower of cost and net realisable value. Net realisable value is estimated at selling price in the ordinary course of business less costs of disposal.

 

Pensions

 

Defined contribution pension schemes

 

The Group operates defined contribution schemes at PHFC and Momart, and at FIC employees are enrolled in the Falkland Islands Pension Scheme ("FIPS"). The assets of all these schemes are held separately from those of the Group in independently administered funds. The amount charged to the income statement represents the contributions payable to the schemes in respect to the accounting period.

 

Defined benefit pension schemes

 

The Group has one pension scheme providing benefits based on final pensionable pay, which is unfunded and closed to further accrual. The Group's net obligation in respect of the defined benefit pension plan is calculated by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to its present value. The liability discount rate is the yield at the balance sheet date on AA credit-rated bonds that have maturity dates approximating the terms of the Group's obligations. The calculation is performed by a qualified actuary using the projected unit credit method.

 

The current service cost and costs from settlements and curtailments are charged against operating profit. Past service costs are recognised immediately within profit and loss. The net interest cost on the defined benefit liability for the period is determined by applying the discount rate used to measure the defined benefit obligation at the end of the period to the net defined benefit liability at the beginning of the period. It takes into account any changes in the net defined benefit liability during the period. Re-measurements of the defined benefit pension liability are recognised in full in the period in which they arise in the statement of comprehensive income.

 

Trade and other receivables

 

Trade receivables are initially recorded at transaction price and are subsequently carried at amortised cost, less provision for impairment. Any change in their value through impairment or reversal of impairment is recognised in the income statement.

 

Trade and other payables

 

Trade and other payables are stated at their cost less payments made.

 

Dividends

 

Dividends unpaid at the balance sheet date are only recognised as liabilities at that date to the extent that they are appropriately authorised and are no longer at the discretion of the Company.

 

Cash and cash equivalents

 

Cash and cash equivalents in the balance sheet comprise cash balances and call deposits with an original maturity of three months or less.

 

Interest-bearing borrowings

 

Interest-bearing borrowings are recognised initially at fair value less directly attributable transaction costs. Subsequent to initial recognition, interest-bearing borrowings are stated at amortised cost with any difference between cost and redemption value being recognised in the income statement over the period of the borrowings on an effective interest basis.

 

1. Accounting policies (continued)

Taxation

 

Taxation on the profit or loss for the year comprises current and deferred tax. Current tax is recognised in the income statement, except to the extent that it relates to items recognised directly in equity, in which case it is recognised directly in equity or in other comprehensive income. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted, or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.

 

Deferred tax is provided using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following temporary timing differences are not recognised:

 

·      Goodwill not deductible for tax purposes; and

·      Initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profits.

·      Temporary differences related to investments in subsidiaries, to the extent that it is probable that they will not reverse in the foreseeable future.

 

A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised. Deferred tax is recognised at the tax rates that are expected to be applied to the temporary differences when they reverse, based on rates that have been enacted or substantially enacted by the reporting date.

 

Cash-flow hedges

 

The effective portions of changes in the fair values of derivatives that are designated and qualify as cash-flow hedges are recognised in equity. The gain or loss to any ineffective portion is recognised immediately in the income statement. Amounts accumulated in the hedging reserve are recycled to the income statement in the periods when the hedged items will affect profit or loss.

 

Revenue recognition

 

IFRS 15 Revenue, requires revenue to be recognised under a 'five-step' approach when a customer obtains control of goods or services in line with the performance obligations identified on the contract. Under IFRS 15, revenue recognition must reflect the standard's five-step approach which requires the following:

 

·      Identification of the contract with the customer;

·      Identification of the performance obligations in the contract;

·      Determination of the transaction price;

·      Allocation of the transaction price to the performance obligations;

·      Recognition of the revenue when (or as) each performance obligation is satisfied.

 

In accordance with the standard, revenue is recognised, net of discounts, VAT, Insurance Premium Tax and other sales related taxes, either at the point in time a performance obligation has been satisfied or over time as control of the asset associated with the performance obligation is transferred to the customer.

 

For all contracts identified, the Group determines if the arrangement with the customer creates enforceable rights and obligations. For contracts with multiple components to be delivered, such as the inbound and outbound leg of moving art exhibitions as well as delivering, handling and administration services, management applies judgement to consider whether those promised goods and services are:

 

·      distinct - to be accounted for as separate performance obligations;

·      not distinct - to be combined with other promised goods or services until a bundle is identified that is distinct; or

·      part of a series of distinct goods and services that are substantially the same and have the same pattern of transfer to the customer.

 



 

1. Accounting policies (continued)

At contract inception the total transaction price is identified, being the amount to which the Group expects to be entitled and to which it has present enforceable rights under the contract. Once the total transaction price is determined, the Group allocates this to the identified performance obligations in proportion to their relative standalone selling prices and revenue is then recognised when (or as) those performance obligations are satisfied.

Discounts are allocated proportionally across all performance obligations in the contract unless directly observable evidence exists that the discount relates to one or more, but not all, performance obligations.

 

For each performance obligation, the Group determines if revenue will be recognised over time or at a point in time. For each performance obligation to be recognised over time, the Group applies a revenue recognition method that faithfully depicts the Group's performance in transferring control of the goods or services to the customer. This decision requires assessment of the nature of the goods or services that the Group has promised to transfer to the customer.

 

Revenue streams of the Group

 

The revenues streams of the Group have been analysed and considered in turn.

 

Retail revenues arising from the sale of goods and recognised at the point of sale

 

The retail revenues in the Falkland Islands arise from the sale of goods in the retail outlets and the sale of vehicles and parts at Falklands 4x4, are recognised at the point of sale, which is usually at the till, when the goods are paid for by cash or credit or debit card. A finance lease receivable arises on the sale of goods when the Group provides finance for the purchases as the Group is considered under IFRS 16, to be a dealer lessor.

 

Housing revenue is generally recognised on completion of the single performance obligation of supplying a house, once the keys are handed over on legal completion. However, larger contracts such as the construction of houses for FIG are treated as long term construction contracts as detailed below. 

 

Transportation of art

 

In the UK, Momart earns revenue from fine art logistical services (transport, installations or de-installations) and storage services. Revenue is recognised for logistical services completed. Momart classifies this income into either Museum Exhibitions revenue, which includes the income from UK and International museums, or Gallery Services revenue, which includes revenue earned from art galleries and auction houses. Inbound and outbound installations are treated as separate obligations. Revenue is recognised when the service is completed.

 

Revenues arising from the rendering of services and recognised over a period of time

Storage of art

 

Storage revenue is recognised according to the time in storage, as reflected in storage agreements.

 

Long term construction contracts

 

Revenue from long term construction contracts is recognised under IFRS 15 by the application of the input method on the basis that the nature of the construction contracts which the Group typically enters into is such that work performed creates or enhances an asset which the customer controls.  Construction contract revenue is measured using the direct measurement of the goods or services provided to date, including materials and labour. Un-invoiced amounts are presented as contract assets and amounts invoiced in advance of delivery are presented as contract liabilities.

 

Where a modification is required, the Group assesses the nature of the modification and whether it represents a separate performance obligation required to be satisfied by the Group or whether it is a modification to the existing performance obligation.

 



 

1. Accounting policies (continued)

 

Other revenues recognised over time

 

Other revenues recognised over time, include rental income from the rental property portfolio at FIC, which is recognised monthly as the properties are occupied, and car hire income which is recognised over the hire period.

The majority of revenues recognised immediately from the rendering of services arise from the PHFC fare income, which is taken on a daily basis for daily tickets. Season tickets are available, however the revenue earned from these is negligible as most passengers purchase daily tickets. Quarterly and monthly season tickets are recognised over the life of the ticket with a balance held in deferred income.

Other revenues arising from the rendering of services and recognised immediately include:

·      Agency services provided to cruise or fishing vessels for supplying provisions, trips to and from the airport and medical evacuations;

·      Third party port services;

·      Car maintenance revenue, which generally arises on short term jobs;

·      Penguin travel income earned from tourist tours and airport trips, which is recognised on the day of the tour or airport trip;

·      Third party freight revenue, which is recognised when the ship arrives in the Falkland Islands;

·      Insurance commission earned by FIC for providing insurance services in the Falkland Islands under the terms of an agency agreement with Caribbean Alliance. The insurance commission is recognised in full on inception of each policy, offset by a refund liability held within accruals, for the expected refunds over the next year calculated from a review of the historic refunded premiums.

 

IFRS 9 Financial instruments

 

Impairment

 

Financial assets, which include trade debtors and finance lease receivables, are held initially at cost. IFRS 9 mandates the use of an expected credit loss model to calculate impairment losses rather than an incurred loss model, and therefore it is not necessary for a credit event to have occurred before credit losses are recognised.

 

The Group has elected to measure loss allowances utilising probability-weighted estimates of credit losses for trade receivables at an amount equal to lifetime expected credit losses.

 

IFRS 9 Financial instruments

 

Hedging

 

The Group has one open hedging relationship at 31 March 2023, which has two elements; an interest rate swap and an embedded 0% interest rate floor. This contract commenced on 9th December 2021, as a result of the banking industry moving from LIBOR to SONIA as the basis for determining interest rates. This contract replaced the previous interest swap taken out in July 2019 to hedge the £13,875,000 mortgage. This swap had an initial notional value of £13,875,000, with interest payable at the difference between 1.1766% and the LIBOR rate up until December 2021 when the LIBOR reference rate was replaced with a SONIA based equivalent. This interest rate swap notional value decreases at £125,000 per quarter over ten years until June 2029 when it will expire. The notional value of the swap at 31 March 2023 was £12,000,000 (2022: £12,500,000). The asset held in respect of this swap at the year-end was £1,559,000 (2022:  £644,000). The movement in the year reflects anticipated interest rate rises over the remaining period of the swap.

 

IFRS 9 introduces three hedge effectiveness requirements:

 

IFRS 9 requires the existence of an economic relationship between the hedged item and the hedging instrument. There must be an expectation that the value of the hedging instrument and the value of the hedged item would move in the opposite direction as a result of the common underlying or hedged risk. As the LIBOR, SONIA and base rates increase, the interest payable on the loans will increase, and the interest payable on the swaps will fall.

 

The hedge accounting model is based on a general notion of there being an offset between the changes of the swap as the hedging instrument and those of the hedged bank loan, both of these balances will be affected by the base rate movements, so it has been concluded the offset is justifiable. The size of the hedging instrument and the hedged items must be similar for the hedge to be effective.



 

1. Accounting policies (continued)

IFRS 16 Leases

 

The Group has applied IFRS 16 in accounting for leases as follows. 

At inception of a contract, the Group assesses whether it is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group uses the definition of a lease in IFRS 16.

IFRS 16 determines whether a contract contains a lease on the basis of whether the customer has the right to control the use of an identified asset for a period of time in exchange for consideration. This is in contrast to the focus on 'risks and rewards' in IAS 17. The Group applies the definition of a lease and related guidance set out in IFRS 16 to all lease contracts entered into or changed on or after 1 January 2019 (whether it is a lessor or a lessee in the lease contract).

(a) As a lessee

The Group:

a)  Recognises right-of-use assets and lease liabilities in the consolidated statement of financial position, initially measured at the present value of the future lease payments;

b)  Recognises depreciation of right-of-use assets and interest on lease liabilities in the consolidated statement of profit or loss;

c)  Separates the total amount of cash paid into a principal portion (presented within financing activities) and interest (presented within financing activities) in the consolidated statement of cash flows.

Lease incentives (e.g. rent-free periods) are recognised as part of the measurement of the right-of-use assets and lease liabilities.

For short-term leases (lease term of 12 months or less) and leases of low-value assets (which includes tablets and personal computers, small items of office furniture and telephones), the Group has opted to recognise a lease expense on a straight-line basis as permitted by IFRS 16. This expense is presented within 'other expenses' in profit or loss.

Right-of-use assets are tested for impairment in accordance with IAS 36 as specified by IFRS16.

(b) As a lessor

 

In accordance with IFRS 16, leases where the Group is a lessor continue to be classified as either finance leases or operating leases and are accounted for differently.

 

When goods are purchased on finance, a finance lease receivable is recorded in FIC and the goods are removed from the balance sheet when the finance lease agreements are signed and instead, a receivable due from the customer is recorded, as the title of the vehicle, or other goods, such as furniture, white goods or other electrical items, are deemed to have passed to the customer at that point.

 

Finance lease receivables are shown in the balance sheet under current assets to the extent they are due within one year, and under non-current assets to the extent that they are due after more than one year, and are stated at the value of the net investment in the agreements. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the Group's net investment outstanding in respect of the leases.

 

The FIC rental property agreements which are only ever for a maximum of 12 months, and with titles that will never pass to the customer, continue to be classified as operating leases. Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight-line basis over the lease term. The rental property portfolio, which is held for leasing out under operating leases is included in investment property at cost less accumulated depreciation and impairment losses.

 

Standards and revisions not yet adopted in the year to 31 March 2023

 

No standards not yet adopted are expected to have any significant impact on the financial statements of the Group or Company.

 

2. Segmental Information Analysis

 

The Group is organised into three operating segments, and information on these segments is reported to the chief operating decision maker ('CODM') for the purposes of resource allocation and assessment of performance. The CODM has been identified as the executive directors.

 

The operating segments offer different products and services and are determined by business type: goods and essential services in the Falkland Islands, the provision of ferry services and art logistics and storage. Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Segment capital expenditure is the total cost incurred during the period to acquire property, plant and equipment and intangible assets other than goodwill and any other assets purchased through the acquisition of a business.

 

2023


General

Ferry

Art Logistics

Unallocated

Total

 


Trading

Services

and Storage



 


(Falkland Islands)

(Portsmouth)

(UK)



 


£'000

£'000

£'000

£'000

£'000

 







 

Revenue

29,383

3,817

19,512

-

52,712

 







 

Segment operating profit before non-trading items

1,955

608

1,450

-

4,013

 

 

Non-trading items

-

-

(79)

-

(79)

 







 

Profit before net financing costs

1,955

608

1,371

-

3,934

 

Finance income

3

907 

910 

 

Finance expense

(70)

(287)

(441)

-

(798)

 

 

Segment profit before tax

1,885

321

933

907

4,046

 







 

Assets and liabilities






 

Segment assets

35,933

9,519

33,889

4,877

84,218

 

Segment liabilities

(12,954)

(7,341)

(19,364)

(585)

(40,244)

 

Segment net assets

22,979

2,178

14,525

4,292

43,974

 







 

Other segment information






 

Capital expenditure:






 

  Property, plant and equipment

1,115

205

539

-

1,859

 

  Investment properties

10

-

-

-

10

 

  Computer software

81

-

34

-

115

 

Total Capital expenditure

1,206

205

573

-

1,984

 

 

Depreciation and amortisation:






 

  Property, plant and equipment

1,192

317

256

-

1,765

 

  Investment properties

210

-

-

-

210

 

  Computer software

-

-

10

-

10

 

  Right of use assets

39

101

515

-

655

 

Total Depreciation and Amortisation

1,441

418

781

-

2,640

 







 

Underlying profit






 







 

Segment operating profit before non-trading items

1,955

608

1,450

-

4,013

 

Interest income

-

-

3

-

3

 

Interest expense

(70)

(287)

(441)

-

(798)

 

Underlying profit before tax

1,885

321

1,012

-

3,218

 

 

2. Segmental Information Analysis (continued)

 

2022


General

Ferry

Art Logistics

Unallocated

Total

 


Trading

Services

and Storage



 


(Falkland Islands)

(Portsmouth)

(UK)



 


£'000

£'000

£'000

£'000

£'000

 







 

Revenue

21,655

3,066

15,598

-

40,319

 







 

Segment operating profit before non-trading items

1,835

155

1,090

-

3,080

 

 

Non-trading items

-

-

(41)

(259)

(300)

 







 

Profit / (loss) before net financing costs

1,835

155

1,049

(259)

2,780

 







 

Finance expense

(56)

(276)

(464)

704

(92)

 

 

Segment profit / (loss) before tax

1,779

(121)

585

445

1,984

 







 

Assets and liabilities






 

Segment assets

31,401

9,478

32,275

5,065

78,219

 

Segment liabilities

(9,582)

(7,788)

(19,045)

(979)

(37,394)

 

Segment net assets

21,819

1,690

13,230

4,086

40,825

 







 

Other segment information






 

Capital expenditure:






 

  Property, plant and equipment

1,129

52

258

-

1,439

 

  Investment properties

1,238

-

-

-

1,238

 

  Computer software

67

-

-

-

67

 

Total Capital expenditure

2,434

52

258

-

2,744

 

  Capital expenditure: cash

2,434

52

152

-

2,638

 

  Capital expenditure: non-cash

-

-

106

-

106

 

Total Capital expenditure

2,434

52

258

-

2,744

 

 

Depreciation and amortisation:






 

  Property, plant and equipment

834

316

423

-

1,573

 

  Investment properties

197

-

-

-

197

 

  Computer software

-

-

21

-

21

 

  Right of use assets

8

256

505

-

769

 

Total Depreciation and Amortisation

1,039

572

949

-

2,560

 







 

Underlying profit / (loss)

 






 

Segment operating profit before non-trading items

1,835

155

1,090

-

3,080

 

Interest expense

(56)

(276)

(464)

-

(796)

 

Underlying profit / (loss) before tax

1,779

(121)

626

-

2,284

 

 



 

2. Segmental Information Analysis (continued)

 

The £4,877,000 (2022: £5,065,000) unallocated assets above include £3,307,000 (2022: £4,376,000) of cash and £1,559,000 (2022: £644,000) of derivative financial instruments and £11,000 (2022: £45,000) of trade and other receivables held in FIH group plc. (Note 19)

The £585,000 (2022: £979,000) unallocated liabilities above consist of accruals and tax balances held within FIH group plc.

3. Geographical analysis

The tables below analyse revenue and other information by geography:

 

2023


United

Kingdom

Falkland Islands

Total


£'000

£'000

£'000

 




Revenue (by source)

23,329

29,383

52,712





Assets and Liabilities:




Non-current segment assets, excluding deferred tax

36,518

16,956

53,474

Capital expenditure: cash

778

1,206

1,984

 

 

2022


United

Kingdom

Falkland Islands

Total

 


£'000

£'000

£'000

 

 




 

Revenue (by source)

18,664

21,655

40,319

 





 

Assets and Liabilities:




 

Non-current segment assets, excluding deferred tax*

35,709

17,074

52,783

 

Capital expenditure: cash

204

2,434

2,638

 

* The amounts disclosed in relation to segment assets have been restated as detailed in note 1 to the financial statements, resulting in a reduction of £0.4 million in carrying values.

 



 

4. Revenue

2023

 

 

 

Sale of goods recognised at a point in time

Rendering of services recognised at a point in time

Rendering of services provided over a period of time

Total

Revenue

 

£'000

£'000

£'000

£'000

Falkland Islands





Retail sales

9,937

-

-

9,937

Falklands 4x4 sales

2,275

294

485

3,054

FBS (housing and construction)

1,943

-

10,204

12,147

Support Services

-

2,423

827

3,250

Rental property income

-

-

995

995






FIC (Falkland Islands)

14,155

2,717

12,511

29,383

PHFC (Portsmouth)

-

3,817

3,817

Art logistics and storage

-

16,794

2,718

19,512

Total Revenue

14,155

23,328

15,229

52,712

 

 

2022

 

 

 

Sale of goods recognised at a point in time

Rendering of services recognised at a point in time

Rendering of services provided over a period of time

Total

Revenue

 

£'000

£'000

£'000

£'000

Falkland Islands





Retail sales

9,666

-

-

9,666

Falklands 4x4 sales

2,034

372

364

2,770

FBS (housing and construction)

1,499

-

4,298

5,797

Support Services

-

1,677

868

2,545

Rental property income

-

-

877

877






FIC (Falkland Islands)

13,199

2,049

6,407

21,655

PHFC (Portsmouth)

-

3,066

-

3,066

Art logistics and storage*

-

13,225

2,373

15,598

Total Revenue

13,199

18,340

8,780

40,319

* The amount disclosed for rendering of services recognised over a period of time relating to the prior year for the Art and Logistics Business has been restated to exclude £13.2 million which should have been included within rendering of services recognised at a point in time. The total recognised for the year has not changed.

5. Non-trading items



2023

2022



£'000

£'000





Profit before tax as reported

 

4,046

2,688





Non-trading items:




Restructuring costs

79

300

Movement in fair value of non-effective portion of derivative financial instruments

(907)

(704)

Underlying profit before tax

 

3,218

2,284

 

Restructuring costs comprise employee redundancy costs in the current year and people-related costs, including employee redundancies and compensation payable to the former Chief Executive, in the prior year.

 

6. Expenses and auditor's remuneration

The following expenses / (income) have been included in the profit and loss






2023

2022




£'000

£'000






Direct operating expenses of rental properties



463

465

Depreciation



2,627

2,413

Amortisation of computer software



10

21

Foreign currency loss



26

13

Expected credit loss on trade and other receivables



13

114

Cost of inventories recognised as an expense



14,392

9,868

COVID-19 and other government funding



-

(500)

 

Auditor's remuneration

2023

2022


£'000

£'000




Audit of these financial statements

195

66

Audit of subsidiaries' financial statements pursuant to legislation

102

179

Other assurance services

-

5

Total auditor's remuneration

297

250

 

Additional items of expenditure not covered above or within staff costs (note 7) which are recognised within operating profit for the year include legal and professional fees, insurance and recruitment costs.



 

7. Staff numbers and cost

The average number of persons employed by the Group (including directors) during the year, analysed by category, was as follows:



Number of employees

Group

Number of employees

Company



2023

2022

2023

2022



 




PHFC


27

27

-

-

Falkland Islands:

in Stanley

227

208

-

-


in UK

6

6

-

-

Art logistics & storage

114

102


-

Head office


6

7

8

7

Total average staff numbers

380

350

8

7

 

The aggregate payroll cost of these persons was as follows:


Group

Company


2023

2022

2023

2022


£'000

£'000

£'000

£'000






Wages and salaries

13,929

12,682

780

769

Share-based payments (see note 24)

41

45

46

45

Social security costs

986

821

86

90

Contributions to defined contribution plans (see note 23)

535

505

14

5

Furlough income

-

(210)

-

-

Total employment costs

   15,491

13,843

926

909

 

In the previous year, the Group made use of support schemes from the UK Government to partially mitigate the loss of profit caused by the impact of COVID-19.  The Coronavirus Job Retention Scheme ("CJRS"), the UK Government's support measure relating to employment, provided grants to cover the cost of employees who were furloughed. Amounts received under this scheme are classified as government grants and are accounted for in accordance with IAS 20 Government Grants. There were no grants in the year ended 31 March 2023. Such grants totalling £210,000 for the year ended 31 March 2022 were recognised in the Income Statement in the period in which the associated costs for which the grants are intended to compensate were incurred, and are presented as an offset against those associated costs.

Details of audited directors' remuneration are provided in the Directors' Report, which forms part of these audited financial statements, under the heading 'Details of Directors' Remuneration and Emoluments'.

8. Finance income and expense




2023

2022




£'000

£'000






Movement in non-effective portion of fair value of derivative financial instruments

907

704

Bank interest receivable



3

-

Total finance income

 

 

910

704






Interest payable on bank loans



(424)

(436)

Net interest cost on the FIC defined benefit pension scheme liability



(70)

(56)

Lease liabilities finance charge



(304)

(304)

Total finance expense

 

 

(798)

(796)

Net finance income / (expense)

 

 

112

(92)

 

9. Taxation

Recognised in the income statement




2023

2022




£'000

£'000

Current tax expense





Current year



579

532

Adjustments for prior years



(99)

(25)

Current tax expense*



480

507






Deferred tax expense





Origination and reversal of temporary differences*



413

123

Change in UK tax rate to 25%



-

523

Adjustments for prior years



31

50

Deferred tax expense (see note 17)*

 

 

444

696

Total tax expense*

 

 

924

1,203

 

Reconciliation of the effective tax rate




2023

2022




£'000

£'000

 





Profit on ordinary activities before tax



4,046

2,688

Tax using the UK corporation tax rate of 19% (2021: 19%)



769

511






Expenses not deductible for tax purposes



85

84

Additional capital allowances - super deduction



(37)

(7)

Effect of increase in rate of deferred tax



155

555

Effect of higher tax rate overseas



20

35

Adjustments to tax charge in respect of previous periods



(68)

25

Total tax expense*

 

 

924

1,203

* Prior year amounts relating to deferred tax have been restated to align the tax impact with the changes made to fair value movements of the derivative financial instrument as detailed in note 1 to the financial statements.

 

Tax recognised directly in other comprehensive income




2023

2022




£'000

£'000






Deferred tax on effective portion of changes in fair value



-

40

Movement on deferred tax asset relating to the pension scheme



176

62

Deferred tax on share options and other financial liabilities



3

(58)

Deferred tax expense  recognised directly in other comprehensive income

179

44

 

In the UK, deferred tax has been calculated at 25% (2022: 25%).

The deferred tax assets and liabilities in FIC have been calculated at the Falkland Islands' tax rate of 26% (2022: 26%).



 

10. Earnings per share

The calculation of basic earnings per share is based on profits on ordinary activities after taxation, and the weighted average number of shares in issue in the period.

The calculation of diluted earnings per share is based on profits on ordinary activities after taxation and the weighted average number of shares in issue in the period, adjusted to assume the full issue of share options outstanding, to the extent that they are dilutive.


2023

2022


£'000

£'000




Profit on ordinary activities after taxation

3,122

1,485

 

 


2023

2022


Number

Number




Average number of shares in issue

12,519,900

12,519,900

Effect of share options

-

-

Diluted weighted average number of shares

12,519,900

12,519,900

 

 

 

2023

2022




Basic earnings per share

24.9p

11.9p

Diluted earnings per share

24.9p

11.9p

 

 

To provide a comparison of earnings per share on underlying performance, the calculation below sets out basic and diluted earnings per share based on underlying profits.

Earnings per share on underlying profit

2023

2022


£'000

£'000




Underlying profit before tax (see note 5)

3,218

2,284

Underlying taxation

(705)

(1,094)

Underlying profit 

2,513

1,190




Effective tax rate

21.9%

47.9%




Weighted average number of shares in issue (from above)

12,519,900

12,519,900

Diluted weighted average number of shares (from above)

12,519,900

12,519,900




Basic earnings per share on underlying profit

20.1p

9.5p

Diluted earnings per share on underlying profit

20.1p

9.5p

 

 

 



 

11. Intangible assets




Computer

Software

Brand name

Goodwill

Total




£'000

£'000

£'000

£'000

Cost:

At 1 Apr 2021 and 31 March 2022



631

2,823

11,576

15,030

Additions



115

-

-

115

Transfer from investment property



42

-

-

42

At 31 March 2023


 

788

2,823

11,576

15,187








Accumulated amortisation and impairment:







At 1 Apr 2021



533

785

9,462

10,780

Amortisation



21

-

-

21

 

At 31 March 2022



554

785

9,462

10,801

Amortisation



10

-

-

10

At 31 March 2023


 

564

785

9,462

10,811








Net book value:







At 1 April 2021



31

2,038

2,114

4,183

At 31 March 2022



77

2,038

2,114

4,229

At 31 March 2023

 

 

224

2,038

2,114

4,376

 

Amortisation and impairment charges are recognised in operating expenses in the income statement. The Momart brand name has a carrying value of £2,038,000 and is considered to be of future economic value to the Group with an estimated indefinite useful economic life. It is reviewed annually for impairment as part of the Art Logistics and Storage review.

Goodwill

Goodwill is allocated to the Group's Cash Generating Units (CGUs) which principally comprise its business segments. A segment level summary of goodwill for each cash-generating-unit is shown below:




Art Logistics and Storage

Falkland

Islands

Total




£'000

£'000

£'000

 

Goodwill at 1 April 2021



2,077

37

2,114

 

Goodwill at 31 March 2022



2,077

37

2,114

 

Goodwill at 31 March 2023

 

 

2,077

37

2,114







Impairment

The Group tests material goodwill and indefinite lived intangible assets annually for impairment or more frequently if there are indications that goodwill and/or indefinite life assets might be impaired. An impairment test is a comparison of the carrying value of the assets of a CGU to their recoverable amounts based on the higher of a value-in-use calculation and fair value less costs to sell. Goodwill is impaired when the recoverable amount is less than the carrying value.



 

11. Intangible assets (continued)

The Art Logistics and Storage CGU is tested for impairment annually because the only material goodwill and indefinite life assets relate to this CGU. An impairment review of the Art Logistics and Storage CGU was performed and no impairment charge was deemed necessary. The recoverable amount for this assessment was determined using the fair value less costs to sell for the Art Logistics and Storage CGU. This was underpinned by an independent valuation of the art storage warehouses in East London, which indicates a fair value well in excess of the £24.7 million carrying value of the Art Logistics and Storage CGU.

12. Property, plant and equipment



Group


Right

 of use

assets

Freehold

land & buildings

Long leasehold

land and buildings

Ships

Vehicles, plant and equipment

Total


£'000

£'000

£'000

£'000

£'000

£'000

Cost:







At 1 April 2021

9,633

29,554

1,009

6,877

9,586

56,659

Additions in year

232

109

53

3

1,168

1,565

Disposals

(82)

-

(3)

-

(396)

(481)








At 31 March 2022*

9,783

29,663

1,059

6,880

10,358

57,743








Additions in year

-

113

57

150

1,539

1,859

Additions (non-cash)

561

-

-

-

-

561

Disposals

-

(54)

(49)

-

(585)

(688)

Disposals (non-cash)

(120)

-

-

-

-

(120)








At 31 March 2023

10,224

29,722

1,067

7,030

11,312

59,355








Accumulated depreciation:






At 1 April 2021

3,084

4,403

370

2,790

6,450

17,097

Charge for the year

 

769

371

160

243

799

2,342

Disposals

(75)

-

(3)

-

(336)

(414)








At 31 March 2022

3,778

4,774

527

3,033

6,913

19,025

Charge for the year

 

655

512

24

246

983

2,420

Disposals

-

(43)

(49)


(570)

(662)

Disposals(non-cash)

(105)

-

-

-

-

(105)








At 31 March 2023

4,328

5,243

502

3,279

7,326

20,678

Net book value:







At 1 April 2021

6,549

23,928

1,862

4,087

3,136

39,562

At 31 March 2022*

6,005

24,889

532

3,847

3,445

38,718

At 31 March 2023

5,896

24,479

565

3,751

3,986

38,677

* As detailed in note 1 to the financial statements, comparative numbers for right of use assets have been restated, resulting in a reduction in net book value of £0.4 million at 31 March 2022. Certain assets previously disclosed within long leasehold land and buildings have been reclassified to freehold land and buildings to more accurately reflect the nature of the assets. As a result, the cost and accumulated depreciation of freehold land and buildings at 31 March 2022 increased by 1.9 million and £0.7 million respectively, with a corresponding reduction in long leasehold land and buildings. There was no impact on total cost, cumulative depreciation or net book value.

 

12. Property, plant and equipment (continued)

Right of use assets



Group

 








 



Short leasehold

lease

Long leasehold

Pontoon lease

Momart Trucks

Office

Equipment

Total

 



£'000

£'000

£'000

£'000

£'000

 

Cost:







 

At 1 April 2021*


3,136

5,090

1,389

18

9,633

 

Additions in year


105

126

1

-

232

 

Disposals


-

-

(82)

-

(82)

 








 

At 31 March 2022*


3,241

5,216

1,308

18

9,783

 

Additions in year


548

13

                  -  

-

561

Disposals (non-cash)


-

(120)

-

-

(120)

 

At 31 March 2023

 

3,789

5,109

1,308

18

10,224

 

 

Accumulated depreciation:







 

At 1 April 2021


1,669

971

429

15

3,084

 

Charge for the year


303

256

209

1

769

 

Disposals


-

-

(75)

-

(75)

 








 

At 31 March 2022*


1,972

1,227

563

16

3,778

 

Charge for the year

 

 

60

75

519

1

655

 

Disposals (non-cash)


(40)

(65)

-

-

(105)

 

At 31 March 2023

 

1,992

1,237

519

17

4,328

 

Net book value:







 

At 1 April 2021


1,467

4,119

960

3

 6,549

 

At 31 March 2022*


1,269

3,989

745

2

6,005

 

At 31 March 2023

 

1,797

3,872

226

1

5,896

 

*  As detailed in note 1 to the financial statements, comparative numbers for right of use assets have been restated, resulting in a reduction in net book value of £0.4 million at 31 March 2022.

 

No property, plant or equipment was financed by hire purchase loans in the year to 31 March 2023.

 

The Company has no tangible fixed assets, other than the investment property purchased in December 2018, which is included within Investment Property (note 13).

 



13. Investment properties




Group




Residential and commercial property

Freehold land

Total




£'000

£'000

£'000

Cost:






At 1 April 2021



7,328

831

8,159

Additions in year



1,238

-

1,238

At 31 March 2022



8,566

831

9,397

Additions in year



10

-

10

Transfer to intangibles



(42)

-

(42)

At 31 March 2023

 

 

8,534

831

9,365







Accumulated depreciation:






At 1 April 2021



1,036

-

1,036

Charge for the year



197

-

197

At 31 March 2022



1,233

-

1,233

Charge for the year



210

-

210

At 31 March 2023

 

 

1,443

-

1,443

Net book value:






At 1 April 2021



6,292

831

7,123

At 31 March 2022



7,333

831

8,164

At 31 March 2023

 

 

7,091

831

7,922

 

The investment properties, held at cost, comprise land, plus residential and commercial property held for rental in the Falkland Islands.

 

Estimated Fair Value





Group





2023

2022

 





£'000

£'000

 

Estimated fair value:






 

Freehold land




2,177

2,177

 

Properties available for rent




10,420

10,139

 

Properties under construction




43

173

 

At 31 March

 

 

 

12,640

12,489

 







 

Uplift on net book value:






 

Freehold land




1,346

1,346

 

Properties available for rent




3,286

2,979

 

At 31 March

 

 

 

4,632

4,325

 







 

Number of rental properties






 

 Available for rent




85

83

 

 Under construction




-

2

 


 

 

 

 

 

 

 

 

 

13. Investment properties (continued)

A level 3 valuation technique has been applied, using a market approach to value these properties; the properties have been valued based on their expected market value by the directors.

Assets under construction

At 31 March 2023, improvements to the FIC jetty in Stanley were included in investment property assets under construction (2022: 2 housing units) with a total cost to date of £43,000 (2022: £173,000).

Company





Commercial property






£'000

Cost:






31 March 2021, 31 March 2022 and 1 April 2023

 

 

 

 

19,642







Accumulated depreciation:






At 31 March 2021





478

Charge for the year





208

At 31 March 2022

 

 

 

 

686

Charge for the year





205

At 31 March 2023

 

 

 

 

891

Net book value:






At 1 April 2021





19,164

At 31 March 2022





18,956

At 31 March 2023

 

 

 

 

18,751

 

The investment property in the Company consists of the five warehouses leased to Momart, the Group's art handling subsidiary, which were purchased in December 2018.

The directors have reviewed the market value of the Leyton warehouses and have used valuation reports prepared by Colliers International Property Consultants Limited.  The directors consider that the market value of the property is significantly higher than book value. Further detail is given in note 11.

14. Investment in subsidiaries


Country of

incorporation

Class of shares held

Ownership at

31 March 2022

Ownership at

31 March 2021






The Falkland Islands Company Limited (1)

UK

Ordinary shares of £1

100%

100%



Preference shares of £10

100%

100%






The Falkland Islands Trading Company Limited (1)

UK

Ordinary shares of £1

100%

100%






Falkland Islands Shipping Limited (2) (6)

Falkland Islands

Ordinary shares of £1

100%

100%






Erebus Limited(2) (6) (7)

Falkland Islands

Ordinary shares of £1

100%

100%



Preference shares of £1

100%

100%






South Atlantic Support Services Limited(3) (6) (7)

Falkland Islands

Ordinary shares of £1

100%

100%






 

Paget Limited(2) (6) (7)

Falkland Islands

Ordinary shares of £1

100%

100%






The Portsmouth Harbour Ferry Company Limited(4)

UK

Ordinary shares of £1

100%

100%






Portsea Harbour Company Limited(4) (6)

UK

Ordinary shares of £1

100%

100%






Clarence Marine Engineering Limited(4) (6)

UK

Ordinary shares of £1

100%

100%






Gosport Ferry Limited(4) (6)

UK

Ordinary shares of £1

100%

100%






Portsmouth Harbour Waterbus Company Limited(4) (6) (7)

UK

Ordinary shares of £1

100%

100%






Momart International Limited(5) (7)

UK

Ordinary shares of £1

100%

100%






Momart Limited(5) (6)

UK

Ordinary shares of £1

100%

100%






Dadart Limited(5) (6) (7)

UK

Ordinary shares of £1

100%

100%

 

(1) The registered office for these companies is Kenburgh Court, 133-137 South Street, Bishop's Stortford, Hertfordshire CM23 3HX.

(2) The registered office for these companies is 5 Crozier Place, Stanley, Falkland Islands FIQQ 1ZZ.

(3) South Atlantic Support Services Limited's registered office is 56 John Street, Stanley, Falkland Islands FIQQ 1ZZ

(4) The registered office for these companies is South Street, Gosport, Hampshire, PO12 1EP.

(5) The registered office for these companies is Exchange Tower, 6th Floor, 2 Harbour Exchange Square, London E14 9GE.

(6) These investments are not held by the Company but are indirect investments held through a subsidiary of the Company.

(7) These investments have all been dormant for the current and prior year.

 



 

14. Investment in subsidiaries (continued)





Company





2023

2022





£'000

£'000







At 1 April




26,762

26,737

Share based payments charge capitalised into subsidiaries




(5)

25

At 31 March*

 

 

 

26,757

26,762

*  As detailed in note 1 to the financial statements, the carrying value of investments have been restated, resulting in an increase of £2.7 million at 31 March 2022.

The amounts disclosed are net of a provision for impairment of £18 million (2022: £18 million).

 

15. Investment in Joint Ventures

The Group has one joint venture (South Atlantic Construction Company Limited, "SAtCO"), which was set up in June 2012 in the Falkland Islands, with Trant Construction to bid for the larger infrastructure contracts which were expected to be generated by oil activity. Both Trant Construction and the FIC contributed £50,000 of ordinary share capital. SAtCO is registered and operates in the Falkland Islands. The net assets of SAtCO are shown below:

Joint Venture's balance sheet




2023

2022





£'000

£'000







Current assets




519

519

Liabilities due in less than one year




(1)

(1)

Net assets of SAtCO




518

518







Group share of net assets

 

 

 

259

259

 

There were no recognised gains or losses for the years ended 31 March 2023 (2022: none).

The current assets balances above include £16,000 of cash (2022: £16,000), £5,000 of other debtors (2022: £5,000) and £498,000 (2022: £498,000) of loans due from SAtCO's parent companies.

SAtCO had no contingent liabilities or capital commitments as at 31 March 2023 or 31 March 2022 and the Group had no contingent liabilities or commitments in respect of its joint venture at 31 March 2023 or 31 March 2022.

SATCO's registered office is 56 John Street, Stanley, Falkland Islands FIQQ 1ZZ

16. Finance leases receivable

As lessor, FIC has sold assets to customers on finance lease agreements. The present value of the lease payments, together with any unguaranteed residual value, is recognised as a receivable, net of allowances for expected bad debt losses.

The difference between the gross receivable and the present value of future lease payments, is recognised as unearned lease income. Lease income is recognised in revenue over the term of the lease using the sum of digits method so as to give a constant rate of return on the net investment in the leases. Lease receivables are reviewed regularly to identify any impairment.

Lease receivables arise on the sale of vehicles and consumer goods, such as furniture and electrical items, by FIC. No contingent rents have been recognised as income in the period. No residual values accrue to the benefit of the lessor.



 

16. Finance leases receivable (continued)

 




Group

 





2023

2022





£'000

£'000







Non-Current:

Lease debtors due after more than one year

681

725

Current:

Lease debtors due within one year

397

511

Total lease debtors

 

 

 

1,078

1,236

 

The difference between the gross investment in the finance lease receivables and the present value of future lease payments due represents unearned lease income of £375,000 (2022: £310,000). The cost of assets acquired for the purpose of renting out under hire purchase agreements by the Group during the year amounted to £629,000 (2022: £960,000).

The total cash received during the year in respect of hire purchase agreements was £923,000 (2022: £985,000).

 




Group





2023

2022





£'000

£'000







Gross investment in finance lease receivables




1,484

1,571

Unearned lease income




(375)

(310)

Bad debt provision against hire purchase leases




(31)

(25)

Present value of future lease receipts




1,078

1,236

 

17. Deferred tax assets and liabilities

Recognised deferred tax assets and (liabilities)




Group





2023

2022





£'000

£'000







Property, plant & equipment




(3,874)

(3,537)

Intangible assets




(509)

(509)

Inventories (unrealised intragroup profits)




90

81

Other financial liabilities




54

104

Derivative financial instruments




(44)

(27)

Share-based payments




68

108

Total net deferred tax liabilities




(4,215)

(3,780)

Deferred tax asset arising on the defined benefit pension liabilities




482

666

Net tax liabilities

 

 

 

(3,733)

(3,114)

 

The deferred tax asset on the defined benefit pension scheme (see note 23) arises under the Falkland Islands tax regime and has been presented on the face of the consolidated balance sheet as a non-current asset as it is expected to be realised over a relatively long period of time. All other deferred tax assets are shown net against the non-current deferred tax liability shown in the balance sheet.

 




Company





2023

2022





£'000

£'000

Derivative financial liabilities




(44)

(27)

Other temporary differences




(41)

15

Net tax asset / (liability)

 

 

 

(85)

(12)



 

17. Deferred tax assets and liabilities (continued)

 

Movement in deferred tax assets / (liabilities) in the year:


 

Group


1 April 2022

Recognised in income

Recognised in equity

31 March 2023


£'000

£'000

£'000

£'000

Property, plant & equipment

(3,537)

(337)

-

(3,874)

Intangible assets

(509)


-

(509)

Inventories (unrealised intragroup profits)

81

9

-

90

Other financial liabilities

104

(47)

(3)

54

Derivative financial instruments

(27)

(61)

44

(44)

Share-based payments

108

-

(40)

68

Pension

666

(8)

(176)

482

Deferred tax movements

(3,114)

(444)

(175)

(3,733)

 

Unrecognised deferred tax assets

 

Deferred tax assets of £141,000 (2022: £44,000) in respect of capital losses have not been recognised as it is not considered probable that there will be suitable chargeable gains in the foreseeable future from which the underlying capital losses will reverse.

 

Movement in deferred tax assets / (liabilities) in the year:

Company


1 April 2022

Recognised in income

Recognised in equity

31 March 2023


£'000

£'000

£'000

£'000

Derivative financial liabilities instruments

(27)

(61)

44

(44)

Other temporary differences

15

(16)

(40)

(41)

Deferred tax asset movements

(12)

(77)

(4)

(85)

 


Movement in deferred tax assets / (liabilities) in the prior year:


 

Group


1 April 2021

Recognised in income

Recognised in equity

31 March 2022


£'000

£'000

£'000

£'000

Property, plant & equipment

(2,938)

(599)

-

(3,537)

Intangible assets

(387)

(122)

-

(509)

Inventories

62

19

-

81

Other financial liabilities

66

31

7

104

Derivative financial instruments

44

(31)

(40)

(27)

Share-based payments

40

17

51

108

Pension

739

(11)

(62)

666

Deferred tax movements

(2,374)

(696)

(44)

(3,114)

 

Movement in deferred tax asset in the prior year:

Company


1 April 2021

Recognised in income

Recognised in equity

31 March 2022

 


£'000

£'000

£'000

£'000

 

Derivative financial instruments

44

(31)

(40)

(27)

 

Other temporary differences

-

15

-

15

 

Deferred tax asset movements

44

(16)

(40)

(12)

 

 

 

17. Deferred tax assets and liabilities  (continued)

An increase in the UK corporation rate from 19% to 25% (effective 1 April 2023) was substantively enacted on 24 May 2021. It has been assumed that all material UK deferred tax elements will reverse in 2023 or later and hence all elements are calculated at 25%.  Deferred tax assets and liabilities relating to the Falkland Islands have been recognised at a rate of 26%.

 

18. Inventories

 




Group





2023

2022





£'000

£'000







Work in progress




225

1,033

Goods in transit




605

284

Goods held for resale and raw materials




6,046

5,423

Total Inventories

 

 

 

6,876

6,740

 

The Company has no inventories.

19. Trade and other receivables

 



Group

Company




2023

2022

2023

2022




£'000

£'000

£'000

£'000

Non-Current







Rental deposits



-

44

-

-

Amount owed by subsidiary undertakings



-

-

10,257

10,057

Total trade and other receivables

 

 

-

44

10,257

10,057

 

 



Group

Company




2023

2022

2023

2022




£'000

£'000

£'000

£'000

Current







Trade and other receivables



7,203

5,362

-

-

Rental deposits



116

88

-

-

Prepayments



1,533

1,515

11

45

Accrued income



433

982

-

-

Contract asset



904

-

-

-

Total trade and other receivables

 

 

10,189

7,947

11

45

 

Amounts owed by subsidiary undertakings to the Company are not secured and interest free with no fixed repayment date.

The accrued income relates to contracts where the work has been completed but had not been billed at the balance sheet date.  No allowance for expected credit losses was recognised in respect of accrued income as the impact was assessed as being immaterial. The only significant changes in the accrued income balance during the year related to the recognition of revenue for work performed and the transfer of billed amounts to trade receivables.



 

20. Cash and cash equivalents

Group


2022

£'000

Cash

Flows


Other non-cash

Changes

2023

£'000


Interest

 








Cash and cash equivalents



9,572

3,254

-

(26)

12,800

Bank loans



(14,183)

1,352

(424)

-

(13,255)

Net debt



(4,611)

4,606

(424)

(26)

(455)








 

Interest rate swap



644

-


915

1,559

Lease liabilities*



(6,536)

922

(304)

(561)

(6,479)

Derivatives and lease liabilities

 

 

(5,892)

922

(304)

354

(4,920)

Net debt after derivatives and lease liabilities at 31 March

 

 

(10,503)

5,528

 

(728)

328

(5,375)

Movement in financial liabilities* above

 

 

 

 

Financing liabilities**

 

 

(20,075)

2,274

(728)

354

(18,175)

.

Company



2022

Cash


Other non-cash

2023




£'000

Flows

Interest

Changes

£'000

 








Cash and cash equivalents



4,376

(1,069)


-

3,307

Bank loans



(12,668)

890

(368)

-

(12,146)

Net debt



(8,292)

(179)

(368)

-

(8,839)








 

Interest rate swap



644

-

-

915

1,559

 

 

 





 

Net debt after derivatives at 31 March

 

 

(7,648)

(179)

 

(368)

915

(7,280)

Movement in financial liabilities above

 

 

 

 

 

 

 

Financing liabilities**

 

 

(12,024)

890

(368)

915

(10,587)

*  As detailed in note 1 to the financial statements, lease liabilities have been restated, resulting in a reduction of £0.6 million at 31 March 2022.

*\* The total for financing liabilities was not presented in the 2022 annual report and accounts as required by IAS 7 and the derivative instrument was also omitted from the disclosure. This has been corrected by disclosing the total for financing liabilities and including the opening balance of the derivative of £644,000, being the interest rate swap as at 31 March 2022. Other non-cash changes comprise, foreign exchange movements, fair value movements and new lease liabilities.



 

21. Interest-bearing loans and borrowings

This note provides information about the contractual terms of the interest-bearing loans and borrowings owed by the Group, which are stated at amortised cost. Information on the maturity of interest-bearing loans and lease liabilities and exposure to interest rate and foreign currency risk is disclosed in note 26.

 



Group

Company




2023

2022

2023

2022




£'000

£'000

£'000

£'000

Non-current liabilities





Secured bank loans

12,316

13,235

11,617

12,139

Lease liabilities*

5,898

5,948

-

-

Total non-current interest-bearing loans and lease liabilities

18,214

19,183

11,617

12,139

 

Current liabilities





Secured bank loans

939

948

529

529

Lease liabilities*

581

588

-

-

1,520

1,536

529

529

Total liabilities





Secured bank loans

13,255

14,183

12,146

12,668

Lease liabilities*

6,479

6,536

-

-

Total interest-bearing loans and lease liabilities

19,734

20,719

12,146

12,668

Lease liabilities


Future minimum lease                           payments

Interest

Present value of    minimum lease payments

 


2023

2022

2023

2022

2023

2022


£'000

£'000

£'000

£'000

£'000

£'000








Less than one year

868

874

(287)

(287)

581

587

Between one and two years

779

709

(269)

(269)

510

440

Between two and five years

1,689

1,616

(725)

(733)

964

883

More than five years

9,053

9,564

(4,629)

(4,938)

4,424

4,626

Total*

12,389

12,763

(5,910)

(6,227)

6,479

6,536

*  As detailed in note 1 to the financial statements, lease liabilities have been restated, resulting in a reduction of £0.6 million at 31 March 2022.

22. Trade and other payables

 



Group

Company




2023

2022

2023

2022




£'000

£'000

£'000

£'000

Current







Trade payables



6,322

4,111

6

29

Contract liability



-

254

-

-

Amounts owed to subsidiary undertakings



-

-

5,269

5,085

Loan from joint venture



249

249

-

-

Other creditors, including taxation and social security



2,835

2,080

116

120

Accruals



3,950

2,962

548

615

Deferred income



362

314

-

-

Total trade and other payables

 

 

13,718

9,970

5,939

5,849

 

Amounts owed to subsidiary undertakings by the company are not secured, interest free and repayable on demand.



 

23. Employee benefits: pension plans

Defined contribution schemes

The Group operates defined contribution schemes at PHFC and Momart and current FIC employees are enrolled in the Falkland Islands Pension Scheme ("FIPS"). The assets of all these schemes are held separately from those of the Group in independently administered funds.

The pension cost charge for the year represents contributions payable by the Group to the schemes and amounted to £535,000 (2022: £505,000). The Group anticipates paying contributions amounting to £567,000 during the year ending 31 March 2024. There were outstanding contributions of £44,000 (2022: £11,000) due to pension schemes at 31 March 2023.

The Falkland Islands Company Limited Scheme

FIC operates a defined benefit pension scheme for certain former employees. This scheme was closed to new members in 1988 and to further accrual on 31 March 2007. The scheme has no assets and payments to pensioners are made out of operating cash flows. The expected contributions for the year ended 31 March 2024 are £102,010. During the year ended 31 March 2023, 10 pensioners (2022: 11) received benefits from this scheme, and there are three deferred members at 31 March 2023 (2022: three). Benefits are payable on retirement at the normal retirement age. The weighted average duration of the expected benefit payments from the Scheme is around 12 years (2022: 14 years).

 

An actuarial report for IAS 19 purposes as at 31 March 2023 was prepared by a qualified independent actuary, Lane Clark and Peacock LLP. The major assumptions used in the valuation were:


2023

2022

Rate of increase in pensions in payment and deferred pensions

2.5%

2.7%

Discount rate applied to scheme liabilities

4.8%

2.8%

Inflation assumption


3.9%

Average longevity at age 65 for male current and deferred pensioners

22.0

22.0

(years) at accounting date



Average longevity at age 65 for male current and deferred pensioners

24.4

23.4

(years) 20 years after accounting date



 

The assumptions used by the actuary are chosen from a range of possible actuarial assumptions which, due to the timescale covered, may not necessarily be borne out in practice. Assumptions relating to life expectancy have been based on UK mortality data on the basis that this is the best available data for the Falkland Islands.

Sensitivity Analysis

The calculation of the defined benefit liability is sensitive to the assumptions set out above. The following table summarises how the impact of the defined benefit liability at 31 March 2023 would have increased / (decreased) as a result of a change in the respective assumptions by 1.0%.




Effect on Obligation




2023




-1% pa

+1% pa




£'000

£'000

Discount rate



240

(200)

Inflation assumption



(10)

10









-1 year

+1 year




£'000

£'000

Life expectancy



(80)

80

 

These sensitivities have been calculated to show the movement in the defined benefit obligation in isolation, and assume no other changes in market conditions at the accounting date.

 

 

 

23. Employee benefits: pension plans (continued)

Scheme liabilities

The present values of the scheme's liabilities, which are derived from cash flow projections over long periods and thus inherently uncertain, were:


Value at


2019

2020

2021

2022

2023


£'000

£'000

£'000

£'000

£'000







Present value of scheme liabilities

(2,772)

(2,604)

(2,842)

(2,562)

(1,978)

Related deferred tax assets

721

677

677

666

482

Net pension liability

(2,051)

(1,927)

(2,165)

(1,896)

(1,496)

 

Movement in deficit during the year:




2023

2022





£'000

£'000

 

Deficit in scheme at beginning of the year




(2,562)

(2,842)

Pensions paid




101

99

Other finance cost




(70)

(56)

Re-measurement of the defined benefit pension liability




553

237

Deficit in scheme at the end of the year

 

 

 

(1,978)

(2,562)

 

Analysis of amounts included in other finance costs:




2023

2022





£'000

£'000

Interest on pension scheme liabilities

 

 

 

70

56

 

 

 

Analysis of amounts recognised in statement of comprehensive income:

2023

2022


£'000

£'000




Experience gains arising on scheme liabilities

(1)

(43)

Changes in assumptions underlying the present value of scheme liabilities

554

280

Re-measurement of the defined benefit pension liability

553

237

 

24. Employee benefits: share based payments

The total number of options outstanding at 31 March 2023 is 310,654 comprising (i) 3,591 nil cost options (2022: 3,591), (ii) 302,063 options (2022: 431,243) granted under the Long-Term Incentive Plan and (iii) 5,000 (2022: 5,000) share options granted with an exercise price equal to the market price on the date of grant.

(i)   Nil cost options granted to John Foster:

 

Date of Issue

 

Number

Share price at grant date

Fair value per share

Total fair value

Earliest Exercise

Latest Exercise



pence

pence

£

Date

date

17 Jun 19

 

3,591

 

316.0

 

301.0

 

10,809

17 Jun 22

 

17 Jun 23

Total

3,591

 

 

10,809

 

 



 

24. Employee benefits: share based payments (continued)

 

Reconciliation of nil cost options:

Number of options

Number of options


2023

2022




Outstanding at the beginning of the year

3,591

12,864

Options exercised during the year

-

(9,273)

Outstanding at the year end

3,591

3,591

 

(ii)  Incentive Plan grants at an exercise price of ten pence to directors of subsidiaries and executives:

255,304 Long-term Incentive Plan grants were issued on 3 December 2021 at an exercise price of ten pence to directors of subsidiaries and executives, and expire in five years on 3 December 2026. During the year, 52,953 of these options were forfeited (2022: 34,535) and 167,816 of these options remain outstanding at 31 March 2023. None of these grants are exercisable at 31 March 2023.

133,052 Long-term Incentive Plan grants were issued on 14 July 2020 at an exercise price of ten pence to directors of subsidiaries and executives, and expire in five years on 14 July 2025. During the year, 51,434 of these options were forfeited (2022: nil) and 71,618 of these options remain outstanding at 31 March 2023. None of these grants are exercisable at 31 March 2023.

135,535 Long-term Incentive Plan grants were issued on 4 July 2019 at an exercise price of ten pence to directors of subsidiaries and executives, and expire in five years on 4 July 2024. During the year, 24,793 of these options were forfeited (2022: nil) and 62,629 options remain outstanding at 31 March 2023. None of these grants are exercisable at 31 March 2023.

There are various performance conditions attached to the Long-term Incentive Plan grants. All have a primary performance condition of the Group share price exceeding a target threshold at the vesting date, and secondary financial performance conditions specific to the relevant operating segment.  All the options have a three-year vesting period.

 

Date of Issue

 

Number

 

Exercise Price

Share price at grant date

Fair value per share

Total fair value

Earliest Exercise

Latest Exercise



pence

Pence

pence

£

Date

date









4 Jul 19

62,629

10.0

314.0

96.8

60,616

4 Jul 22

3 Jul 24

14 Jul 20

71,618

10.0

315.0

75.0

53,714

15 Jul 23

13 Jul 25

3 Dec 21

167,816

10.0

215.0

88.0

147,678

3 Dec 24

2 Dec 26

Total

302,063

 

 

 

262,008

 

 

 

Reconciliation of LTIPs:

Number of options


Number of options






2023


2022





Outstanding at the beginning of the year

431,243


210,474

Options granted during the year

-


255,304

Options forfeited during the year

(129,180)


(34,535)

Outstanding at the year end

302,063

 

431,243





 

 

Vested options exercisable at the year end

-


-





Weighted average life of outstanding options (years)

3.4


4.4

 



 

24. Employee benefits: share based payments (continued)

(iii) Share options with an exercise price equal to the market price on the date of grant

 

Date of Issue

 

Number

 

Exercise Price

Share price at grant date

Fair value per share

Total fair value

Earliest Exercise

Latest Exercise



pence

Pence

pence

£

Date

date









19 Jan 15

5,000

272.5

272.5

63.0

3,150

19 Jan 18

18 Jan 25

Total

5,000

 

 

 

3,150

 

 

 

The exercise price of outstanding options at 31 March 2023 is £2.725.

 

Reconciliation of options with an exercise price equal to the market price on the date of grant, including the number and weighted average exercise price:


Weighted average exercise price (£)

Number of options


Weighted average exercise price (£)

Number of options


2023

2023


2022

2022







Outstanding at the beginning of the year

2.73

5,000


2.68

58,152

Lapsed during the year

-

-


2.68

(53,152)

Outstanding at the year end

2.73

5,000

 

2.73

5,000

Vested options exercisable at the year end

2.73

5,000


2.73

5,000

Weighted average life of outstanding options (years)

1.8



2.8


 

The fair values of the options are estimated at the date of grant using appropriate option pricing models and are charged to the profit and loss account over the vesting period of the options. All options, other than certain nil cost options, are granted with the condition that the employee remains in employment for three years.

All share options are equity settled. Share options issued without share price conditions attached have been valued using the Black-Scholes model. Share price options issued with share price conditions attached have been valued using a Monte Carlo simulation model making explicit allowance for share price targets. Inputs into the valuation models include the estimated time to maturity, the risk-free rate, expected volatility, and dividend yield.  During the year ending 31 March 2023 no nil cost options were exercised over ordinary shares (2022: 9,273 at a gain of £23,183).





2023

2022





£'000

£'000

Total share-based payment expense recognised in the year




41

45

 



 

25. Capital and reserves

Share capital




 Ordinary Shares

 





2023

2022

 







 

In issue at the start of the year




12,519,900

12,514,985

 

Share capital issued during the year




-

4,915

 

In issue at the end of the year

 

 

 

12,519,900

12,519,900

 







 





2023

2022

 





£'000

£'000

 

Allotted, called up and fully paid Ordinary shares of 10p each

1,251

1,251

 

By special resolution at an Annual General Meeting on 9 September 2010 the Company adopted new articles of association, principally to take account of the various changes in company law brought in by the Companies Act 2006. As a consequence, the Company no longer has an authorised share capital. The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company.

During the year no shares (2022: 4,915) were issued following the exercise of share options.

Other reserves

The other reserves in the Group of £703,000 at 31 March 2023 comprise £5,389,000 of merger relief which arose on the 1998 Scheme of Arrangement, when the Company issued 1 share for every 300 shares that shareholders had previously held in Anglo United plc. Immediately following this Scheme of Arrangement, the Company acquired the Falkland Islands' businesses for £8.0 million and the £4,686,000 of goodwill on this acquisition was written off against the merger relief.

Share premium

 

Hedging reserve

 

Dividends

The following dividends were recognised and paid in the period:





2023

£'000

2022

£'000







Interim 2022: 1.0 pence per qualifying ordinary share




-

125

Final 2022: 2.0 pence per qualifying ordinary share




251

-

Interim 2023: 1.2 pence per qualifying ordinary share




150

-

Total dividends recognised in the period

 

 

 

401

125







 

 

 

 

 

 

26. Financial instruments

(i) Fair values of financial instruments

Trade and other receivables

The fair value of trade and other receivables is estimated as the present value of future cash flows, discounted at the market rate of interest at the balance sheet date if the effect is material.

Trade and other payables

The fair value of trade and other payables is estimated as the present value of future cash flows, discounted at the market rate of interest at the balance sheet date if the effect is material.

Cash and cash equivalents

The fair value of cash and cash equivalents is estimated as its carrying amount where the cash is repayable on demand. Where it is not repayable on demand then the fair value is estimated at the present value of future cash flows, discounted at the market rate of interest at the balance sheet date.

Interest-bearing borrowings

The fair value of interest-bearing borrowings, which after initial recognition is determined for disclosure purposes only, is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the balance sheet date.

Financial Instruments categories and fair values

The fair values of financial assets and financial liabilities are not materially different to the carrying values shown in the consolidated balance sheet and Company balance sheet.

The following table shows the carrying value, which management consider to be materially equal to fair value for each category of financial instrument:

 



Group

Company




2023

2022

2023

2022




£'000

£'000

£'000

£'000








Cash and cash equivalents



12,800

9,572

3,307

4,376

Finance lease debtors



1,078

1,236

-

-

Interest rate swap asset



1,559

644

1,559

644

Trade and other receivables



7,203

5,362

-

-

Rental deposits



116

132

-

-

Total assets exposed to credit risk

 

 

22,756

16,946

4,866

5,020








Interest rate swap liability



-

-

-

-

Total trade and other payables



(12,508)

(9,119)

(5,939)

(5,849)

Interest-bearing borrowings at amortised cost



(19,734)

(21,249)

(12,146)

(12,668)

 

The interest rate swaps have been valued using a level 2 methodology.

(ii) Credit Risk

Financial risk management

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group's receivables from customers.

Group

The Group's credit risk is primarily attributable to its trade receivables. The maximum credit exposure of the Group comprises the amounts presented in the balance sheet, which are stated net of provisions for expected credit losses. Expected credit loss provisions are based on previous experience and other evidence, including forward-

26. Financial instruments (continued)

looking macroeconomic information, indicative of the recoverability of future cash flows.  There have been no significant changes in the estimation techniques or significant assumptions made during the reporting period. Management has credit policies in place to manage risk on an on-going basis. These include the use of customer specific credit limits.

Company

The majority of the Company's receivables are with subsidiaries. The Company does not consider these counter-parties to be a significant credit risk.

Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure. Therefore, the maximum exposure to credit risk at the balance sheet date was £22,085,000 (2022: £16,946,000) being the total trade receivables, finance lease debtors, interest swap, rental deposits and cash and cash equivalents in the balance sheet. The credit risk on cash balances and the interest rate swap is limited because the counterparties are banks with high credit ratings assigned by international credit-rating agencies.

The maximum exposure to credit risk for trade receivables at the balance sheet date by geographic region was:





Group





2023

2022





£'000

£'000







Falkland Islands




3,167

1,773

Europe




617

775

North America




526

254

United Kingdom




2,492

2,365

Other




401

195

Total trade receivables

 

 

 

7,203

5,362

 

The Company has no trade debtors.

Credit quality of financial assets and expected credit losses

Group

Gross

Impairment

Net

Gross

Impairment

Net


2023

2023

2023

2022

2022

2022


£'000

£'000

£'000

£'000

£'000

£'000








Not past due

5,722

-

5,747

3,736

-

3,736

Past due 0-30 days

1,013

(7)

1,006

1,020

(2)

1,018

Past due 31-120 days

204

(10)

194

491

(58)

433

More than 120 days

429

(148)

281

328

(153)

175

Total trade receivables

7,368

(165)

7,203

5,575

(213)

5,362

Finance lease debtors

1,078

(31)

1,047

1,261

(25)

1,236

 

The amount of finance lease receivable that is past due is immaterial and secured on asset financed.

 

 

 

 

26. Financial instruments (continued)

The movement in the allowances for impairment in respect of trade receivables and finance lease receivables during the year was:





Group





2022





£'000







Balance at 1 April




127

Impairment loss recognised




114

Utilisation of provision (debts written off)




(69)

(3)

Balance at 31 March

 

 

 

196

238







Provided against finance lease receivables




31

25

Provided against trade and other receivables




165

213

Balance at 31 March

 

 

 

196

238

 

The allowance account for trade receivables is used to record impairment losses unless the Group is satisfied that no recovery of the amount owing is possible. At that point, the amounts considered irrecoverable are written off against the trade receivables directly.

No further analysis has been provided for cash and cash equivalents, trade receivables from Group companies, other receivables and other financial assets, as there is limited exposure to credit risk and expected credit losses are assessed as immaterial.

(iii) Liquidity risk

Financial risk management

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. At the beginning of the year the Group had outstanding bank loans of £14.2 million (2022 £20.1 million). All payments due during the year with respect to these agreements were met as they fell due.

At the start of the year, the Company had one bank loan of £12.7 million (2022 £13.2 million). All payments due during the year with respect to these agreements were met as they fell due.

The Group manages its cash balances centrally at head office and prepares rolling cash flow forecasts to ensure availability of funds.

Liquidity risk - Group

The following are the contractual maturities of financial liabilities, including estimated interest:



 

Contractual cash flows


2023

Carrying amount

Total

1 year or less

1 to 2 years

2 to 5 years

5 years and over


£'000

£'000

£'000

£'000

£'000

£'000

Financial liabilities







Secured bank loans

13,255

15,274

1,348

1,404

3,047

9,475

Lease liabilities

6,479

12,977

839

779

1,688

9,671

Trade payables

6,322

6,322

6,322

-

-

-

Other creditors

1,696

1,696

1,696

-

-

-

Loan from Joint Venture

249

249

249

-

-

-

Accruals

3,950

3,950

3,950

-

-

-

Total financial liabilities

31,951

40,468

14,404

2,183

4,735

19,146

 

 

26. Financial instruments (continued)



 

Contractual cash flows


2022

Carrying amount

Total

1 year or less

1 to 2 years

2 to 5 years

5 years and over


£'000

£'000

£'000

£'000

£'000

£'000

Financial liabilities







Secured bank loans

14,183

16,410

1,346

1,332

3,486

10,246

Lease liabilities

7,066

13,293

874

709

1,616

10,094

Trade payables

4,111

4,111

4,111

-

-

-

Other creditors

1,797

1,797

1,797

-

-

-

Loan from joint venture

249

249

249

-

-

-

Accruals

2,962

2,962

2,962

-

-

-

Total financial liabilities

30,368

38,822

11,339

2,041

5,102

20,340

 

Liquidity risk - Company

The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the effects of netting agreements:



 

Contractual cash flows


2023

Carrying amount

Total

1 year or less

1 to 2 years

2 to 5 years

5 years and over


£'000

£'000

£'000

£'000

£'000

£'000

Financial liabilities







Secured bank loans

12,146

14,098

891

947

2,785

9,475

Trade payables

6

6

6

-

-

-

Amounts owed to subsidiary undertakings

5,269

5,269

5,269

-

-

-

Other creditors

89

89

89

-

-

-

Accruals

548

548

548

-

-

-

Total financial liabilities

18,058

20,010

6,803

947

2,785

9,475

 

 


 

 




 

 




 

Contractual cash flows


2022

Carrying amount

Total

1 year or less

1 to 2 years

2 to 5 years

5 years and over


£'000

£'000

£'000

£'000

£'000

£'000

Financial liabilities







Secured bank loans

12,668

14,825

893

879

2,807

10,246

Amounts owed to subsidiary undertakings

29

29

29

-

-

-

Interest rate swap liability

5,085

5,085

5,085

-

-

-

Other creditors

89

89

89

-

-

-

Accruals

615

615

615

-

-

-

Total financial liabilities

18,486

20,643

6,711

879

2,807

10,246

 

 

 

 

 

 

 

 

26. Financial instruments (continued)

(iv) Market Risk

Financial risk management

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Group's income or the value of its holdings of financial instruments.

Market risk - Foreign currency risk

The Group has exposure to foreign currency risk arising from trade and other payables which are denominated in foreign currencies. The Group is not, however, exposed to any significant transactional foreign currency risk. The Group's exposure to foreign currency risk is as follows and is based on carrying amounts for monetary financial instruments.

Group

2023

EUR

USD

Other

Total Balance sheet exposure

GBP

Total


£'000

£'000

£'000

£'000

£'000

£'000








Cash and cash equivalents

107

219

15

341

12,459

12,800

Trade payables and other payables

(485)

(645)

(661)

(1,791)

(11,927)

(13,718)

Balance sheet exposure

(378)

(426)

(646)

(1,450)

532

(918)

 

2022

EUR

USD

Other

Total Balance sheet exposure

GBP

Total


£'000

£'000

£'000

£'000

£'000

£'000








Cash and cash equivalents

126

117

40

283

9,289

9,572

Trade payables and other payables

(635)

(479)

(312)

(1,426)

(8,544)

(9,970)

Balance sheet exposure

(509)

(362)

(272)

(1,143)

745

(398)

 

The Company has no exposure to foreign currency risk.

 

Sensitivity analysis

Group

A 10% weakening of the following currencies against pound sterling at 31 March 2023 would have increased/(decreased) equity and profit or loss by the amounts shown below. This calculation assumes that the change occurred at the balance sheet date and had been applied to risk exposures existing at that date. This analysis assumes that all other variables, in particular other exchange rates and interest rates remain constant and is performed on the same basis for year ended 31 March 2022.




Equity

Profit or Loss




2023

2022

2023

2022




£'000

£'000

£'000

£'000








EUR



38

51

38

51

USD



43

36

43

36

 

A 10% strengthening of the above currencies against pound sterling at 31 March 2023 would have the equal but opposite effect on the above currencies to the amounts shown above, on the basis that all other variables remain constant.

 

 

 

 

 

26. Financial instruments (continued)

Market risk - interest rate risk

At the balance sheet date, the interest rate profile for the Group's interest-bearing financial instruments was:




Group

Company




2023

2022

2023

2022




£'000

£'000

£'000

£'000

Fixed rate financial instruments







Leases receivable



1,078

1,236

-

-

Bank loans



(407)

(508)

-

-

Lease liabilities



(6,479)

(7,066)

-

-

Total fixed rate financial instruments

 

 

(5,808)

(6,338)

-

-

Variable rate financial instruments







Effect of Interest rate swap



1,559

-

-

-

Bank loans



(12,848)

(13,675)

(12,146)

(12,668)

Total variable rate financial instruments

 

 

(11,289)

(13,675)

(12,146)

(12,668)

 

At 31 March 2023, the Group had four bank loans:

(i)         £12.1 million (2022: £12.7 million) ten-year loan, which was drawn down on 28 June 2019, with interest charged at the compounded daily SONIA rate plus 1.8693%;

(ii)         £0.6 million (2022: £0.8 million) repayable over ten years until May 2025, secured against the newest vessel in PHFC, with interest charged at 2.6% above the bank of England base rate;

(iii)        £0.1 million (2022: £0.2 million) repayable over ten years until May 2025, secured against freehold property held in PHFC, with interest charged at 1.75% above the Bank of England base rate;

(iv)        £0.4 million (2022: £0.5 million) drawn down by Momart, interest has been fixed on this loan at 2.73% for the full ten years until December 2026.

The interest payable on the £12.1 million ten-year loan has been hedged by one interest swap, taken out on 30 December 2021 with an initial notional value of £12.625 million, with interest payable at the difference between 1.1766% and the compounded daily SONIA rate plus 0.1193%. This interest rate swap notional value decreases at £125,000 per quarter over five years until June 2024, and then at £150,000 per quarter for a further five years until June 2029 when the outstanding bullet payment of £8,525,000 is likely to be refinanced. The notional value of the swap at 31 March 2023 is £12.0 million (2022: £12.5 million).

Lease liabilities

At 31 March 2023, the Group had the following lease liabilities:

(i)         £5.1 million lease liabilities payable to Gosport Borough Council; £4.5 million for the Gosport pontoon and £0.6 million for the ground rent on the pontoon. Both of these leases run until June 2061 and finance charges accrue on these liabilities at a weighted average rate of 4.51%. 

(ii)         £1.4 million of property rental leases, including two warehouses rented by Momart and the Momart and Bishops Stortford head offices, which run for between 3 to 6 years as at 31 March 2023. The weighted average interest rate of these rental liabilities is 3.25%.

(iii)        £0.5 million of lease liabilities taken out to finance trucks by hire purchase leases at Momart. The weighted average interest rate of these truck liabilities is 3.08%.

The total blended average interest rate on the Group's lease liabilities is 4.2 % per annum.



 

26. Financial instruments (continued)

Interest rate sensitivity analysis

An increase of 100 basis points in interest rates at the balance sheet date would have increased / (decreased) equity and profit or loss by the amounts shown below. This calculation assumes that the change occurred at the balance sheet date and has been applied to risk exposures existing at that date.

This analysis assumes that all other variables, in particular foreign currency rates, remain constant and considers the effect of financial instruments with variable interest rates and financial instruments at fair value through profit or loss or available-for-sale with fixed interest rates. The analysis is performed on the same basis for 31 March 2022.




Group

Company




2023

2022

2023

2022




£'000

£'000

£'000

£'000

Equity







Interest rate swap liability



121

127

121

127

Variable rate financial liabilities



(128)

(137)

(121)

(127)








Profit or Loss







Interest rate swap liability



121

127

121

127

Variable rate financial liabilities



(128)

(137)

(121)

(127)

 

 

(v) Capital Management

The Group's objectives when managing capital, which comprises equity and reserves at 31 March 2023 of £43,806,000 (2022: £40,657,000) are to safeguard its ability to continue as a going concern, so that it can continue to provide returns to shareholders and benefits to our other stakeholders.

27. Operating leases

Leases as lessor

The Group leases out its investment properties, which consist of 75 houses and flats and ten mobile homes in the Falkland Islands, these are leased to staff, fishing agency representatives and other short-term visitors to the Islands. These lease agreements generally have an initial notice period of six months, and beyond the six months initial tenancy, one month's notice can be given by either party, therefore future minimum lease payments under non-cancellable leases receivable are not material.

The Company had no operating lease commitments. However, as a result of the purchase of the five warehouses at Leyton, the Company had the following non-cancellable operating lease rentals receivable:





Company





2023

2022





£'000

£'000







Less than one year




1,097

974

Between one and five years




4,389

3,897

More than five years




17,831

16,805

 

 

 

 

23,317

21,676

 



 

28. Capital commitments

At 31 March 2023, the Group had entered into the following contractual commitments:

-     £427,000 in Momart comprising £292,000 for enhancements to existing vehicles, £111,000 for two new vehicles, and £23,000 for IT upgrades.

-     £92,000 in PHFC for infrastructure replacement.

-     £42,000 in FIC for the new retail sales system.

At 31 March 2022, the Group had entered into the following contractual commitments:

-     £385,000 at Momart comprising £272,000 for two new vehicles, £79,000 for an HGV trailer and other enhancements to existing vehicles and £34,000 for climate control systems.

-     £270,000 in FIC comprising £190,000 for a new retail sales system and £80,000 for a warehouse office.

29. Related parties

The Group has a related party relationship with its subsidiaries (see note 14) and with its directors and executive officers.

Directors of the Company and their immediate relatives controlled 30.3% (2022: 30.3%) of the voting shares of the Company at 31 March 2023.

The compensation of key management personnel, which includes the FIH group plc directors and the managing directors of the subsidiaries, is as follows:


Group

Company


2023

2022

2023

2022

 

£'000

£'000

£'000

£'000

 





Key management emoluments including social security costs

1,010

1,317

600

943

Company contributions to defined contribution pension plans

47

41

9

-

Share-related awards

41

45

46

20

Total key management personnel compensation

1,098

1,403

655

963

 

At 31 March 2023, the Group's joint venture, SAtCO, has debtors of £498,000 due from its parent companies.

On 2 May 2017, KJ Ironside, the Managing Director of FIC, purchased a property which had been built on approximately 510 square metres of land owned by FIC. FIC provided a loan of £65,000 to Mr Ironside to purchase the freehold of this land. The loan is to be repaid in full in the event of the sale of the property, Mr Ironside ceasing to hold any permits or licenses required by law in respect of his ownership or occupation of the property, him ceasing to be employed by FIC at any time before his 65th birthday (unless due to ill health) or his death. £650 of interest is payable each year by Mr Ironside to FIC in respect of this loan.

FIH group plc key transactions with subsidiary entities:

 









2023

2022





£'000

£'000

FIC






Loan from subsidiary




10,257

10,057

Management fees charged annually




635

635







Momart






Loan to subsidiary




(1,815)

(1,630)

Management fees charged annually




120

120







PHFC






Loan to subsidiary




(2,555)

(2,555)

Management fees charged annually




240

240



 

30. Accounting estimates

The preparation of financial statements in conformity with adopted IFRS requires management to make judgements, estimates and assumptions that effect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based upon historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of the judgements as to asset and liability carrying values which are not readily apparent from other sources. Actual results may vary from these estimates, and are taken into account in periodic reviews of the application of such estimates and assumptions. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of revision and future periods if the revision affects both current and future periods.

Defined benefit pension liabilities

At 31 March 2023, 11 pensioners were receiving payments from the FIC defined benefit pension scheme, and there are three deferred members. A significant degree of estimation is involved in predicting the ultimate benefits payment to these pensioners using actuarial assumptions to value the defined benefit pension liability (see note 23). Management have selected these assumptions from a range of possible options following consultations with independent actuarial advisers. There is a range of assumptions that may be appropriate, particularly when considering the projection of life expectancy post-retirement, which is a key demographic assumption, and has been based on UK mortality data, if the life expectancy assumption was one more year than the assumptions used, this would result in an increase of £80,000 in the liability. Selecting a different assumption could significantly increase or decrease the IAS19 value of the Scheme's liabilities. The projections of life expectancy make no explicit allowance for specific individual risks, such as the possible impact of climate change or a major medical breakthrough, the projections used reflect the aggregate impact of the many possible factors driving changes in future mortality rates.

The figures are prepared on the basis that both the FIC pension scheme and FIC are ongoing. If the scheme were to be wound up, the position would differ, and would almost certainly indicate a much larger deficit.

 

Inventory provisions

The Group makes provisions in relation to inventory value, where the net realisable value of an item is expected to be lower than its cost, due to obsolescence. Historically, the calculation of inventory provisions has entailed the use of estimates and judgements combined with mechanistic calculations and extrapolations reflecting inventory ageing and stock turn. During the year ended 31 March 2023, inventory provisions increased to £1,100,000 (2022: £1,089,000). Inventory greater than 12 months old and with no sales in the twelve months before 31 March 2023 is provided against in full. If this provision was reduced to 50% of the gross inventory value, the provision would reduce by circa £174,000 2022: £169,000).  If this provision was extended to cover all inventory greater than six months old with no sales in the twelve months before 31 March 2023, the provision would increase by £117,000 (2022: £94,000).

Long term construction contracts

Significant estimation is involved in determining the revenue and profit to be recognised on long term contracts. This includes determining percentage of completion at the balance sheet date by estimating the total expected costs to complete each contract along with their future profitability. These estimates directly influence the revenue and profit that can be recognised on such contracts.



 

Company Information

 

 

Directors

 

Registered Office

Robin Williams

Non-executive Chairman

Kenburgh Court

 

Stuart Munro

Chief Executive Officer

133-137 South Street

 

Reuben Shamu

Chief Financial Officer

Bishop's Stortford

 

Robert Johnston

Non-executive Director

Hertfordshire CM23 3HX

 

Dominic Lavelle

Non-executive Director

T: 01279 461630

 

Holger Schröder

Non-executive Director

E: admin@fihplc.com

 


 

W: www.fihplc.com

 


 

Registered number 03416346

 

Company Secretary

 


 

AMBA Secretaries Limited

 

 

 

 

 

Stockbroker and Nominated Adviser

W.H. Ireland Limited

24 Martin Lane,

London EC4R 0DR

 

 

 

 

 

 

Solicitors

Shoosmiths LLP

1 Bow Churchyard

London EC4M 9DQ

 

 

 

 

 

 

Auditor

Grant Thornton UK LLP

103 Colmore Row,

Birmingham B3 3AG

 

 

 

 

 

 

Registrar

Link Group

10th Floor Central Square,

29 Wellington Street,

Leeds LS1 4DL

 

 

 

 

 

Financial PR

Novella Communications,

South Wing, Somerset House,

London WC2R 1LA

 

 

 

 

 

 

 

The Falkland Islands Company

 

Kevin Ironside, Director

T: 00 500 27600

E: info@fic.co.fk

W:www.falklandislandscompany.com

 

The Portsmouth Harbour Ferry Company

Adam Brown, Director

T: 02392 524551

E: admin@gosportferry.co.uk

W: www.gosportferry.co.uk

 

Momart Limited

 

Alison Jordan, Director

T: 020 7426 3000

E: enquiries@momart.com

W: www.momart.com

 

 

 

 

 

www.fihplc.com

           

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