Notes to the Consolidated Condensed Financial Statements |
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1 |
General information |
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A.G. BARR p.l.c. ('the Company') and its subsidiaries (together 'the Group') manufacture, market, distribute and sell soft drinks and cocktail solutions. The Group has manufacturing sites in the UK and sells mainly to customers in the UK with some international sales. |
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The Company is a public limited company, which is listed on the London Stock Exchange and incorporated and domiciled in Scotland. The address of its registered office is A.G. BARR p.l.c., Westfield House, 4 Mollins Road, Cumbernauld, G68 9HD. |
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This consolidated condensed interim financial information does not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006. Statutory accounts for the year ended 26 January 2019 were approved by the Board of directors on 26 March 2019 and delivered to the Registrar of Companies. The comparative figures for the financial year ended 26 January 2019 are an extract of the Company's statutory accounts for that year. The report of the auditor on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under section 498 (2) or (3) of the Companies Act 2006. |
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This consolidated condensed interim financial information is unaudited but has been reviewed by the Company's Auditor. |
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2 |
Basis of preparation |
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This consolidated condensed interim financial information for the six months ended 27 July 2019 has been prepared in accordance with the Disclosure and Transparency Rules of the Financial Conduct Authority and with IAS 34, 'Interim Financial Reporting' as adopted by the European Union. The consolidated condensed interim financial information should be read in conjunction with the annual financial statements for the year ended 26 January 2019, which have been prepared in accordance with IFRSs as adopted by the European Union. |
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Going concern basis |
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The Group meets its day-to-day working capital requirements through its bank facilities. After making enquiries, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. The Group's forecasts and projections, taking account of reasonable sensitivities, shows that the Group should be able to operate within available facilities. The Group therefore continues to adopt the going concern basis in preparing its consolidated condensed interim financial statements. |
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3 |
Accounting policies |
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The accounting policies applied are consistent with those of the annual financial statements for the year ended 26 January 2019 and corresponding interim reporting period, except for the adoption of new amended standards and a new investment in associate policy as set out below. |
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(a) New and amended standards adopted by the Group |
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In the current year, the Group for the first time, has applied IFRS 16 Leases. The date of initial application of IFRS 16 for the Group is 27 January 2019. |
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IFRS 16 Leases replaces IAS 17 Leases along with three Interpretations (IFRIC 4 Determining whether an Arrangement Contains a Lease, SIC 5 Operating Leases-Incentives and SIC 27 Evaluating the Substance of Transactions in the Legal Form of a Lease). The new standard has been applied using the modified retrospective approach, with the cumulative effect of adopting IFRS 16 being recognised in equity as an adjustment to the opening balance of retained earnings. Prior periods have not been restated. |
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For contracts in place at the date of transition, the Group has elected to apply the definition of a lease from IAS 17 and IFRIC 4 and has not applied IFRS 16 to arrangements that were previously not identified as leases under IAS 17 and IFRIC 4. The Group has elected not to include initial direct costs in the measurement of the right-of-use asset for operating leases in existence at the date of transition. At this date, the Group has also elected to measure the right-of-use assets as if the Standard applied at lease commencement date, but discounted using the borrowing rate at the date of initial application. Instead of performing an impairment review on the right-of-use asset for operating leases in existence at the date of transition, the Group has relied on its historic assessment as to whether leases were onerous immediately before the date of initial application of IFRS 16. |
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On transition, for leases previously accounted for as operating leases with a remaining lease term of less than 12 months and for leases of low-value assets the Group has applied the optional exemptions to not recognise the right-of-use assets but to account for the lease expense on a straight line basis over the remaining lease term. |
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On transition to IFRS 16 the weighted average incremental borrowing rate applied to lease liabilities recognised under IFRS 16 was 1.48%. |
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The following is a reconciliation of total operating lease commitments at 26 January 2019 to the lease liabilities recognised at 27 January 2019: |
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£m |
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Total operating lease commitments disclosed at 26 January 2019 |
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6.6 |
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Discounted using the lessee's incremental borrowing rate at the date of initial application |
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(0.1) |
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Less: short term leases recognised on a straight line basis as expense |
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(0.1) |
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Add: adjustments as a result of a different treatment of extension and termination options |
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3.0 |
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Total lease liability recognised under IFRS 16 at 27 January 2019 |
9.4 |
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Leases - Accounting policy applicable from 27 January 2019 |
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The Group as lessee |
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For any new contracts entered into on or after 27 January 2019, the Group considered whether a contract is, or contains a lease. A lease is defined as a contract, or part of a contract, that conveys the right to use of an asset (the underlying asset) for a period of time in exchange for consideration. To apply this definition the Group assesses whether the contract meets three key evaluations which are whether: |
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- the contract contains an identified asset, which is either explicitly identified in the contact or implicitly specified by being identified at the time the asset is made available to the Group; |
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- the Group has the right to obtain substantially all of the economic benefits from use of the identified asset throughout the period of use, considering its rights within the defined scope of the contract; and |
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- the Group has the right to direct the use of the identified asset throughout the period of use. The Group assesses whether it has the right to direct the use of the identified assets throughout the period of use. The Group assesses whether it has the right to direct 'how and for what purpose' the asset is used throughout the period of use. |
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Measurement and recognition of leases as a lessee |
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At the lease commencement date, the Group recognises a right-of-use asset and a lease liability on the balance sheet. The right-of-use asset is measured at cost, which is made up of the initial measurement of the lease liability, any initial direct costs incurred by the Group, an estimate of any costs to dismantle and remove the asset at the end of the lease, and any lease payments made in advance of the lease commencement date (net of any incentives received). The Group depreciates the right-of-assets on a straight-line basis from the lease commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The Group also assesses the right-of-asset for impairment where such indicators exist. |
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Lease payments included in the measurement of the lease liability are made up of fixed payments, variable payments based on an index or rate, amounts expected to be payable under a residual guarantee and payments arising from options reasonably certain to be exercised. Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest. It is remeasured to reflect any reassessment or modification, or if there are changes in in-substance fixed payments. When the lease liability is remeasured, the corresponding adjustment is reflected in the right-of-use asset, or profit and loss if the right-of-use asset is already reduced to zero. |
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The Group has elected to account for short-term leases and leases of low-value assets using the practical expedients. Instead of recognising a right-of-use asset and lease liability, the payments in relation to these are recognised as an expense in profit or loss on a straight line basis over the lease term. |
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On the balance sheet, right-of-use assets have been included in property, plant and equipment and lease liabilities have been included in loans and borrowings. |
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Leases Accounting policy applicable before 27 January 2019 |
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The Group as lessee |
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Where fixed assets are financed by leasing agreements, which give rights approximating to ownership, the assets are treated as if they had been purchased and the capital element of the leasing commitments are shown as obligations under finance leases. Assets acquired under finance leases are initially recognised at the present value of the minimum lease payments. The rentals payable are apportioned between interest, which is charged to the income statement, and liability, which reduces the outstanding obligation so as to give a constant rate of charge on the outstanding lease obligations. Costs in respect of operating leases are charged on a straight line basis over the term of the lease in arriving at operating profit. |
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b) Other amendments |
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A number of amended standards became applicable for the current reporting period. The application of these amendments has not had any material impact on the disclosures, net assets or results of the Group. |
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New amendments and interpretations not yet adopted |
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Further narrow scope amendments have been issued which are mandatory for periods commencing on or after 1 January 2020, The application of these amendments will not have any material impact on the disclosures, net asset or results of the Group. |
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c) Investment in associates |
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An associate is an entity over which the Group has significant influence that is neither a subsidiary nor an interest in a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies. |
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The results and assets and liabilities of associates are incorporated in these financial statements using the equity method of accounting. The investment is recognised initially in the condensed consolidated statement of financial position at cost and is adjusted thereafter to recognise the Group's share of the profit or loss and other comprehensive income of the associate. On acquisition any excess of the cost of the investment over the Group's share of the net fair value of the identifiable assets and liabilities of the investee is recognised as goodwill, which is included within the carrying amount of the investment. Any excess of the Group's share of the net fair value of identifiable assets and liabilities over the cost of the investment, after reassessment, is recognised immediately in profit or loss in which the investment is acquired. |
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4 |
Principal risks and uncertainties |
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The directors consider that the principal risks and uncertainties which could have a material impact on the Group's performance in the remaining 26 weeks of the financial year remain substantially the same as those stated on pages 39 - 43 of the Group's annual financial statements as at 26 January 2019, which are available on our website, www.agbarr.co.uk. These are summarised below: |
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- Changes in consumer preferences, perception or purchasing behaviour |
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- Consumer rejection of reformulated products |
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- Loss of product integrity |
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- Loss of continuity of supply of major raw materials |
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- Adverse publicity in relation to the soft drinks industry, the Group or its brands |
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- Government intervention on packaging waste |
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- Failure to maintain customer relationships or take account of changing market dynamics |
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- Inability to protect the Group's intellectual property rights |
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- Failure of the Group's operational infrastructure |
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- Failure of critical IT systems or a breach of cyber security |
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- Financial risks |
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- Third party relationships |
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The volatile and uncertain economic environment created by the UK's decision to leave the European Union ('EU') has continued over the past six months Like many other businesses, we have continued to monitor developments in this area. Overseen by the Risk Committee, the Company Brexit working group has continued to monitor the potential impact of Brexit on the Group and to take appropriate actions to ensure that the business is as well prepared as possible for Brexit. The Brexit working group has prepared for a range of Brexit outcomes, including "no deal". Given the continuing uncertainty regarding the outcome of Brexit, it is challenging to quantify or determine the impact of Brexit on the Group. However, given that the Group is a UK-based Group whose sales are predominantly made in the UK, our ongoing assessment is that Brexit will not have a significant impact on the Group. |
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5 |
Financial risk management and financial instruments |
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The Group's activities expose it to a variety of financial risks: market risk (including foreign exchange risk, cash flow and fair value interest rate risk and price risk), credit risk and liquidity risk. |
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The condensed interim financial statements should be read in conjunction with the Group's annual financial statements as at 26 January 2019 as they do not include all financial risk management information and disclosures contained within the annual financial statements. There have been no changes in the risk management policies since the year end. |
6 |
Segment reporting |
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The Group's management committee has been identified as the chief operating decision-maker. The management committee reviews the Group's internal reporting in order to assess performance and allocate resources. The management committee has determined the operating segments based on these reports. |
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The management committee considers the business from a product perspective. This led to the operating segments identified in the table below: there has been no change to the segments during the period (after aggregation). |
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The performance of the operating segments is assessed by reference to their gross profit. |
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6 months ended 27 July 2019 |
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Carbonates |
Still drinks and water |
Other |
Total |
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£m |
£m |
£m |
£m |
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Total revenue |
90.9 |
21.7 |
9.9 |
122.5 |
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Gross profit |
40.6 |
5.3 |
4.8 |
50.7 |
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6 months ended 28 July 2018 |
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Carbonates |
Still drinks and water |
Other |
Total |
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£m |
£m |
£m |
£m |
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Total revenue |
102.3 |
25.7 |
8.9 |
136.9 |
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Gross profit |
47.0 |
7.4 |
4.2 |
58.6 |
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Year ended 26 January 2019 |
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Carbonates |
Still drinks and water |
Other |
Total |
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£m |
£m |
£m |
£m |
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Total revenue |
213.6 |
49.0 |
16.4 |
279.0 |
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Gross profit |
100.1 |
14.7 |
7.7 |
122.5 |
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There are no material intersegment sales. All revenue is in relation to product sales, which is recognised at point in time, upon delivery to the customer. |
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"Other" segments represent the sale of Funkin cocktail solutions and other soft drink related items. |
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The gross profit from the segment reporting is reconciled to the total profit before income tax as shown in the consolidated condensed income statement. |
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All of the assets of the Group are managed by the management committee on a central basis rather than at a segment level. As a result no reconciliations of segment assets and liabilities to the consolidated condensed statement of financial position has been disclosed for any of the periods presented. |
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Included in revenues arising from Carbonates, Still drinks and water and Other are revenues of approximately £20m which arose from sales to the Group's largest customer. In the year ended 26 January 2019, revenue of approximately £47m arose from sales to the Group's largest customer. No other single customers contributed 10 per cent or more to the Group's revenue in the comparative period to July 2018 or January 2019. |
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All of the segments included within "Carbonates" and "Still drinks and water" meet the aggregation criteria set out in IFRS 8 Operating Segments. |
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7 |
Seasonality of operations |
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Revenues and operating profits are affected by weather conditions, the timing of marketing investment and execution of promotional activity. As a result it is anticipated than the operating profits for the second half of the year to 25 January 2020 will be higher than those for the six months ended 27 July 2019. |
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8 |
Operating profit |
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The following items have been charged to operating profit during the period: |
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6 months ended 27 July 2019 |
6 months ended 28 July 2018 |
Year ended 26 January 2019 |
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£m |
£m |
£m |
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Inventory write down |
0.2 |
0.3 |
1.0 |
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Foreign exchange (gains)/losses recognised |
(0.1) |
0.1 |
(0.1) |
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Inventories are stated at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completing production and selling expenses. |
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The items discussed below have been classified as exceptional. The Group identifies items as exceptional where the nature or scale of the items requires to be separately presented in order to better understand trading performance. |
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The items that have been included in exceptional items have been analysed in the table below: |
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6 months ended 27 July 2019 |
6 months ended 28 July 2018 |
Year ended 26 January 2019 |
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£m |
£m |
£m |
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GMP pension equalisation |
- |
- |
0.7 |
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Redundancy costs for business reorganisation |
0.4 |
- |
- |
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Net exceptional charge |
0.4 |
- |
0.7 |
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During the six months ended 27 July 2019 costs of £0.4m were incurred relating to the initial costs of the ongoing reorganisation within the business. Due to their nature management believes that these are required to be separately presented in trading performance so as not mislead the users of the financial statements. |
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In the year to 26 January 2019 a charge of £0.7m has been included for the past service cost in respect of the equalisation of guaranteed minimum pensions ("GMP") benefits. On 26 October 2018, the High Court handed down a judgement involving Lloyds Banking Group's defined benefit pension schemes. The judgement concluded that the schemes should equalise pension benefits for men and women in relation to GMP benefits. The judgement has implications for many pension schemes, including the AG Barr defined benefit schemes. The £0.7m expense reflects the best estimate of the effect on our reported pension liabilities. Management believe that the nature of this expense, a non-routine pension cost relating to a significant legal ruling, makes it appropriate to be classified as exceptional. |
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9 |
Tax on profit |
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The interim period tax charge is accrued based on the estimated average annual effective income tax rate of 20.0% (six months ended 28 July 2018: 20.32%; year ended 26 January 2019: 19.5%). |
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As announced in the Autumn Budget on 23 November 2016, the main rate of corporation tax was reduced to 19% from 1 April 2017 and will be further reduced to 17% from 1 April 2020, therefore future charges will reduce accordingly. Finance No.2 Bill 2017 was enacted on 16 November 2017. The deferred tax liability at 27 July 2019 has therefore been calculated having regard to the rate of 17% enacted at the balance sheet date. |
10 |
Earnings per share |
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Basic earnings per share has been calculated by dividing the earnings attributable to equity holders of the parent by the weighted average number of shares in issue during the year, excluding shares held by the employee share scheme trusts. |
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6 months ended 27 July 2019 |
6 months ended 28 July 2018 |
Year ended 26 January 2019 |
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Profit attributable to equity holders of the Company (£m) |
10.8 |
14.5 |
35.8 |
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Weighted average number of ordinary shares in issue |
112,895,598 |
113,793,127 |
113,626,941 |
|
Basic earnings per share (pence) |
9.57 |
12.74 |
31.51 |
|
|
|
|
|
|
|
|
|
|
|
For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all potentially dilutive ordinary shares. These represent share options granted to employees where the exercise price is less than the average market price of the Company's ordinary shares during the period. The number of shares calculated as above is compared with the number of shares that would have been issued assuming the exercise of the share options. |
|
|
|
|
|
|
|
|
|
|
|
|
6 months ended 27 July 2019 |
6 months ended 28 July 2018 |
Year ended 26 January 2019 |
|
Profit attributable to equity holders of the Company (£m) |
10.8 |
14.5 |
35.8 |
|
Weighted average number of ordinary shares in issue |
112,895,598 |
113,793,127 |
113,626,941 |
|
Adjustment for dilutive effect of share options |
141,506 |
- |
138,729 |
|
Diluted weighted average number of ordinary shares in issue |
113,037,104 |
113,793,127 |
113,765,670 |
|
Diluted earnings per share (pence) |
9.55 |
12.74 |
31.47 |
|
|
|
|
|
|
|
|
|
|
|
The adjusted EPS figure is calculated by using profit attributable to equity holders before exceptional items: |
|
|
|
|
|
|
|
6 months ended 27 July 2019 |
6 months ended 28 July 2018 |
Year ended 26 January 2019 |
|
Profit attributable to equity holders of the Company before exceptional items (£m) |
11.1 |
14.5 |
36.4 |
|
Weighted average number of ordinary shares in issue |
112,895,598 |
113,793,127 |
113,626,941 |
|
Earnings per share before exceptional items (pence) |
9.83 |
12.74 |
32.03 |
|
|
|
|
|
|
This measure has been included in the financial statements as it provides a closer guide to the underlying financial performance as the calculation excludes the effect of exceptional items. |
|
|
11 |
Dividends paid and proposed |
|
|
6 months ended 27 July 2019 |
6 months ended 28 July 2018 |
Year ended 26 January 2019 |
6 months ended 27 July 2019 |
6 months ended 28 July 2018 |
Year ended 26 January 2019 |
|
|
per
share (p) |
per share (p) |
per
share
(p) |
£m |
£m |
£m |
|
Paid final dividend |
12.74 |
11.84 |
11.84 |
14.4 |
13.5 |
13.5 |
|
Paid interim dividend |
- |
- |
3.90 |
- |
- |
4.4 |
|
|
12.74 |
11.84 |
15.74 |
14.4 |
13.5 |
17.9 |
|
|
|
|
|
|
|
|
|
An interim dividend of 4.00p (an increase of 2.5% on last year) per share was approved by the Board on 24 September 2019 and will be paid on 25 October 2019 to shareholders on record as at 4 October 2019. |
|
|
|
|
|
|
|
|
12 |
Investment in associate |
|
|
|
|
|
|
In June 2019 the Group made a 20% investment in Elegantly Spirited at a cost of £1m. |
|
|
|
|
|
|
|
|
The following entities have been included in the consolidated condensed financial statements using the equity method: |
|
|
|
|
|
|
|
|
|
|
|
Proportion of ownership interest held as at |
|
Name |
Country of incorporation and principal place of business |
27 July 2019 |
26 January 2019 |
28 July 2018 |
|
|
|
|
|
|
|
|
Elegantly Spirited Limited |
United Kingdom |
20% |
- |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The primary business of Elegantly Spirited Limited is as a brand builder, marketing and selling a range of zero proof distilled spirits. This investment is consistent with our strategy of building a branded portfolio of products across both alcohol and non-alcohol beverages. The investment is not considered a material associate and therefore disclosures are limited to the section below. |
|
|
|
|
|
|
|
|
Aggregate information of associates that are not individually material |
|
|
|
|
|
|
|
|
27 July 2019 |
26 January 2019 |
28 July 2018 |
|
|
|
|
£m |
£m |
£m |
|
Profit from continuing operations |
|
|
(0.1) |
- |
- |
|
|
|
|
|
|
|
|
Total comprehensive income |
|
|
(0.1) |
- |
- |
|
|
|
|
|
|
|
13 |
Financial instruments |
|
Current assets of £0.1m (at 28 July 2018: £0.1m; 26 January 2019: £nil) relate to forward foreign currency contracts with a maturity of less than 12 months and are recognised at fair value through the cash flow hedge reserve, included within other reserves. |
|
|
|
|
|
|
|
|
Current liabilities of £nil (at 28 July 2018: £0.1m; 26 January 2019: £0.4m) relate to forward foreign currency contracts with a maturity of less than 12 months and are recognised as fair value through the cash flow hedge reserves, included within other reserves. |
|
|
|
|
|
|
|
|
Fair value hierarchy |
|
Fair value hierarchies 1 to 3 are based on the degree to which fair value is observable: |
|
|
|
|
|
|
|
|
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities |
|
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices) |
|
Level 3: inputs for the asset or liability that are not based on observable market data |
|
|
|
|
|
|
|
|
The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity specific estimates. The fair value of the forward foreign exchange contracts is determined using forward exchange rates at the date of the consolidated condensed statement of financial position, with the resulting value discounted accordingly as relevant. |
|
|
|
|
|
|
|
|
All financial instruments carried at fair value are Level 2. |
|
|
|
|
|
|
|
|
Fair values of financial assets and financial liabilities |
|
The following table shows the carrying amounts and fair values of financial assets and financial liabilities. It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value. |
|
|
|
|
|
|
|
|
|
Carrying amount |
|
|
|
Fair value - hedging instruments |
Loans and receivables at amortised cost |
Other financial liabilities at amortised cost |
Total |
|
|
As at 27 July 2019 |
£m |
£m |
£m |
£m |
|
|
Financial assets not measured at fair value |
|
Foreign exchange contracts used for hedging |
0.1 |
- |
- |
0.1 |
|
|
Trade receivables |
- |
52.9 |
- |
52.9 |
|
|
Cash and cash equivalents |
- |
9.0 |
- |
9.0 |
|
|
|
0.1 |
61.9 |
- |
62.0 |
|
|
|
|
|
|
|
|
|
Financial liabilities not measured at fair value |
|
Foreign exchange contracts used for hedging |
- |
- |
- |
- |
|
|
Lease liabilities |
- |
- |
8.1 |
8.1 |
|
|
Unsecured bank borrowings |
- |
- |
4.4 |
4.4 |
|
|
Trade payables |
- |
23.9 |
- |
23.9 |
|
|
|
- |
23.9 |
12.5 |
36.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying amount |
|
|
Fair value - hedging instruments |
Loans and receivables at amortised cost |
Other financial liabilities at amortised cost |
Total |
|
As at 28 July 2018 |
£m |
£m |
£m |
£m |
|
Financial assets not measured at fair value |
|
Foreign exchange contracts used for hedging |
0.1 |
- |
- |
0.1 |
|
Trade receivables |
- |
66.9 |
- |
66.9 |
|
Cash and cash equivalents |
- |
16.9 |
- |
16.9 |
|
|
0.1 |
83.8 |
- |
83.9 |
|
|
|
|
|
|
|
Financial liabilities not measured at fair value |
|
|
|
Foreign exchange contracts used for hedging |
0.1 |
- |
- |
0.1 |
|
Unsecured bank borrowings |
- |
- |
12.7 |
12.7 |
|
Trade payables |
- |
- |
26.0 |
26.0 |
|
|
0.1 |
- |
38.7 |
38.8 |
|
|
|
|
|
|
|
|
Carrying amount |
|
|
Fair value - hedging instruments |
Loans and receivables at amortised cost |
Other financial liabilities at amortised cost |
Total |
|
As at 26 January 2019 |
£m |
£m |
£m |
£m |
|
Financial assets not measured at fair value |
|
|
|
Trade receivables |
- |
54.5 |
- |
54.5 |
|
Cash and cash equivalents |
- |
21.8 |
- |
21.8 |
|
|
- |
76.3 |
- |
76.3 |
|
|
|
|
|
|
|
Financial liabilities not measured at fair value |
|
|
|
Foreign exchange contracts used for hedging |
0.4 |
- |
- |
0.4 |
|
Trade payables |
- |
- |
20.2 |
20.2 |
|
|
0.4 |
- |
20.2 |
20.6 |
|
|
|
|
|
|
14 |
Borrowings and loans |
|
Movements in borrowings are analysed as follows: |
|
|
|
|
|
|
|
6 months ended 27 July 2019 |
6 months ended 28 July 2018 |
Year ended 26 January 2019 |
|
|
£m |
£m |
£m |
|
Opening borrowings balance |
- |
- |
- |
|
Adjustment on transition to IFRS 16 |
9.4 |
- |
- |
|
Net lease payments |
(1.3) |
- |
- |
|
Borrowings made |
12.0 |
17.0 |
21.0 |
|
Repayments of borrowings |
(12.0) |
(4.5) |
(21.0) |
|
Bank overdrafts drawn |
4.4 |
0.2 |
- |
|
Closing borrowings balance |
12.5 |
12.7 |
- |
|
|
|
|
|
|
The reconciliation of the above closing borrowings balance to the figures on the face of the consolidated condensed statement of financial position is as follows: |
|
|
As at 27 July 2019 |
As at 28 July 2018 |
As at 26 January 2019 |
|
|
£m |
£m |
£m |
|
Overdraft |
4.4 |
0.2 |
- |
|
Closing loan balance |
- |
12.5 |
- |
|
Lease liabilities |
8.1 |
|
- |
|
Total borrowings and loans |
12.5 |
12.7 |
- |
|
Disclosed as |
|
|
|
|
Current liabilities |
7.4 |
0.2 |
- |
|
Non-current liabilities |
5.1 |
12.5 |
- |
|
|
|
|
|
|
The reconciliation to net debt is as follows: |
|
|
As at 27 July 2019 |
As at 28 July 2018 |
As at 26 January 2019 |
|
|
£m |
£m |
£m |
|
Closing borrowings balance |
(12.5) |
(12.7) |
- |
|
Cash and cash equivalents |
9.0 |
16.9 |
21.8 |
|
Net (deficit)/funds |
(3.5) |
4.2 |
21.8 |
|
|
|
|
|
|
The undrawn facilities at 27 July 2019 are as follows: |
|
|
Total facility |
Drawn |
Undrawn |
|
|
£m |
£m |
£m |
|
Revolving credit facilities |
60.0 |
- |
60.0 |
|
Overdraft |
5.0 |
4.4 |
0.6 |
|
|
65.0 |
4.4 |
60.6 |
|
|
|
|
|
|
During the year to 27 January 2018 the Group entered into three revolving credit facilities of periods of 3 - 5 years with Royal Bank of Scotland plc, Bank of Scotland plc and HSBC plc. These facilities provided £60m of sterling debt facilities to February 2020, reducing to £20m from February 2020 to February 2022. On 18 March 2019 the Group extended its facilities due to expire in 2020 and 2022, to 2022 and 2024. |
|
|
|
|
|
|
A total arrangement fee of £0.2m was incurred and is being amortised over the life of the loan facilities. |
|
|
|
|
|
15 |
Leases |
|
|
|
|
|
The Group leases many assets including land and buildings, vehicles, machinery and IT equipment. Information about the leases for which the Group is a lessee is presented below. |
|
|
|
|
|
|
|
Right-of-use assets |
|
|
Carrying amount |
|
|
Land and buildings |
Plant, equipment and vehicles |
|
Total |
|
|
£m |
£m |
|
£m |
|
Balance at 26 January 2019 |
- |
- |
|
- |
|
Adjustment on transition to IFRS 16 |
0.8 |
8.3 |
|
9.1 |
|
Balance at 27 January 2019 after adoption of IFRS 16 |
0.8 |
8.3 |
|
9.1 |
|
Additions |
- |
0.3 |
|
0.3 |
|
Depreciation charge |
(0.1) |
(1.4) |
|
(1.5) |
|
Balance at 27 July 2019 |
0.7 |
7.2 |
|
7.9 |
|
|
|
|
|
|
|
The right-of-use assets are disclosed as a non-current asset and are part of the property, plant and equipment balance of £106.4m at 27 July 2019. |
|
|
|
|
|
|
|
Lease liabilities |
|
|
|
|
|
Lease liabilities are presented in the balance sheet within borrowings as follows: |
|
|
|
|
|
|
|
|
|
27 July 2019 |
28 July 2018 |
26 January 2019 |
|
|
|
£m |
£m |
£m |
|
|
|
|
|
|
|
Lease liabilities (current) |
|
3.0 |
- |
- |
|
Lease liabilities (non-current) |
|
5.1 |
- |
- |
|
|
|
8.1 |
- |
- |
|
|
|
|
|
|
|
Maturity analysis - contractual undiscounted cash flows: |
|
|
|
|
|
|
|
|
|
27 July 2019 |
28 July 2018 |
26 January 2019 |
|
|
|
£m |
£m |
£m |
|
|
|
|
|
|
|
Less than one year |
|
3.2 |
- |
- |
|
One to two years |
|
5.1 |
- |
- |
|
Total undiscounted lease liabilities |
|
8.3 |
- |
- |
|
|
|
|
|
|
|
Amounts recognised in profit and loss |
|
The Group has elected not to recognise a lease liability for short term leases (leases with an expected term of 12 months or less) or for leases of low value assets. Payments made under such leases are expensed on a straight line basis. During the six months to 27 July 2019, in relation to leases under IFRS 16 the Group recognised the following amounts in the consolidated income statement: |
|
|
|
|
|
27 July 2019 |
|
|
|
|
|
£m |
|
|
|
|
|
|
|
Depreciation charge |
|
|
|
1.5 |
|
Interest expense |
|
|
|
0.1 |
|
Short term lease expense |
|
|
|
0.2 |
|
|
|
|
|
1.8 |
|
|
|
|
|
|
|
Amounts recognised in the statement of cash flows: |
|
|
|
|
|
27 July 2019 |
|
|
|
|
|
£m |
|
Short term lease expense |
|
|
|
0.2 |
|
Repayment of lease liabilities |
|
|
|
1.6 |
|
Total cash outflow for leases |
|
|
|
1.8 |
|
|
|
|
|
|
16 |
Retirement benefit obligations |
|
|
|
|
|
|
On 1 May 2016 the A.G. BARR p.l.c (2008) Pension and Life Assurance Scheme was closed to future accrual following a negotiated agreement between the Company and the board of trustees. |
|
|
|
|
|
|
The defined retirement benefit scheme had a deficit of £10.7m as at 27 July 2019 (as at 28 July 2018: £8.0m, 26 January 2019: £13.5m). The reconciliation of the closing deficit is as follows: |
|
|
|
|
|
|
|
6 months ended 27 July 2019 |
6 months ended 28 July 2018 |
Year ended 26 January 2019 |
|
|
£m |
£m |
£m |
|
Opening present value of obligation |
(115.1) |
(120.5) |
(120.5) |
|
Current service cost |
- |
- |
(0.1) |
|
Past service cost |
- |
- |
(0.7) |
|
Interest cost |
(1.5) |
(1.6) |
(3.1) |
|
Remeasurement - changes in financial assumptions |
(12.5) |
3.8 |
3.0 |
|
Benefits paid |
2.3 |
4.2 |
6.3 |
|
Closing position |
(126.8) |
(114.1) |
(115.1) |
|
|
|
|
|
|
Opening fair value of plan assets |
101.6 |
105.3 |
105.3 |
|
Interest income |
1.4 |
1.4 |
2.7 |
|
Remeasurement - actuarial return on assets |
13.8 |
2.0 |
(2.4) |
|
Employer contributions |
1.6 |
1.6 |
2.3 |
|
Benefits paid |
(2.3) |
(4.2) |
(6.3) |
|
Closing fair value of plan assets |
116.1 |
106.1 |
101.6 |
|
|
|
|
|
|
|
As at 27 July 2019 |
As at 28 July 2018 |
As at 26 January 2019 |
|
|
£m |
£m |
£m |
|
Closing present value of obligation |
(126.8) |
(114.1) |
(115.1) |
|
Closing fair value of plan assets |
116.1 |
106.1 |
101.6 |
|
Closing net deficit |
(10.7) |
(8.0) |
(13.5) |
|
|
|
|
|
|
|
|
|
|
|
The key financial assumptions used to value the liabilities were as follows: |
|
|
|
|
|
|
|
As at 27 July 2019 |
As at 28 July 2018 |
As at 26 January 2019 |
|
|
% |
% |
% |
|
Discount rate |
2.1 |
2.8 |
2.7 |
|
Inflation assumption |
3.4 |
3.4 |
3.4 |
|
|
|
|
|
17 |
Movements in own shares held by employee benefit trusts |
|
During the six months to 27 July 2019 the employee benefit trusts of the Group acquired 132,659 (six months to 28 July 2018: 61,051; year to 26 January 2019: 81,774) of the Company's shares. The total amount paid to acquire the shares has been deducted from shareholders' equity and is included within retained earnings. At 27 July 2019 the shares held by the Company's employee benefit trusts represented 799,725 (28 July 2018: 804,843; 26 January 2019: 798,476) shares at a purchased cost of £4.9m (28 July 2018: £4.8m; 26 January 2019: £4.8m). |
|
|
|
|
|
|
|
131,410 (six months to 28 July 2018: 75,239; year to 26 January 2019: 102,329) shares were utilised in satisfying share options from the Company's employee share schemes during the same period. |
|
|
|
|
|
|
|
The related weighted average share price at the time of exercise for the six months to 27 July 2019 was £8.13 (six months to 28 July 2018: £6.49; year to 26 January 2019: £7.13) per share. |
|
|
|
|
|
|
|
|
|
|
|
|
18 |
Contingencies and commitments |
|
|
As at 27 July 2019 |
As at 28 July 2018 |
As at 26 January 2019 |
|
|
|
£m |
£m |
£m |
|
|
Commitments for the acquisition of property, plant and equipment |
5.0 |
3.8 |
8.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
19 |
Repurchase of own shares |
|
During the year ended 27 January 2018 the Group commenced a share repurchase programme of up to £30m, which is expected to complete within 24 months of initiation. |
|
|
|
|
|
|
|
A total of 3,194,135 shares have been repurchased and cancelled to date (six months to 28 July 2018: 2,270,635; year to 26 January 2019: 2,824,135), at a cost of £21m (six months to 28 July 2018: £14.4m; year to 26 January 2019: £18.5m). The permanent capital has been placed through the creation of a Capital Redemption Reserve, which is included in other reserves. The nominal value of the share repurchased at 27 July 2019 is £133,089 (28 July 2018: £96,410; 26 January 2019: £117,672). |
|
|
|
|
|
|
20 |
Events occurring after the reporting period |
|
Repurchase of shares |
|
Subsequent to the period end a total of 690,000 shares have been repurchased and cancelled at a cost of £4.3m. |
|
|
|
|
|
|
|
Interim dividend As disclosed in Note 11, an interim dividend of 4.00p per share will be paid to shareholders on 25 October 2019. |
|
|
|
|
|
|
|
21 |
Related party transactions |
|
There have been no related party transactions in the first 26 weeks of the current financial year which have materially affected the financial position or performance of the Group. |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|