Company Announcements

Half-year Report

Source: RNS
RNS Number : 2191D
CEPS PLC
06 September 2024
 

 

06 September 2024

 

 

CEPS PLC

("CEPS", "CEPS Group" "Group" or "Company")

 

HALF-YEARLY REPORT

 

The Board is pleased to announce its unaudited half-yearly report for the six months ended 30 June 2024.

 

CHAIRMAN'S STATEMENT

 

The first six months of the year was dominated by the build-up to, and then the actual General Election.  Labour was rewarded for not being the Conservatives such that, with some 20% of the electorate voting for them, they managed to achieve the third largest majority in the modern era.  It is to be hoped that, with such a large majority, the Government feels able to address some of the major issues which have plagued the country for the past 20 years.  Rachel Reeves, as Chancellor, has picked up some of the rhetoric last articulated by Liz Truss with respect to developing policy aimed at moving the United Kingdom onto a higher growth trajectory.  Let us hope that this growth narrative ends rather better for her!

The new Government, whilst not receiving a shiny golden chalice as Tony Blair and Gordon Brown did in 1997, is taking over an economy in much better shape than when Rishi Sunak and Jeremy Hunt took over approximately 24 months ago.  In fact, as the weeks pass, it is clear from various announcements that the economy appears to be improving by rather more than was expected.  CPI inflation has returned to the Bank of England's arbitrary target of 2%, down from 6.7% a year ago and from a peak of 11.1% in October 2022.  There has since been a small uptick to 2.2%, and this may surprise readers because gas and oil prices a year ago were marginally lower than the latest depressed levels.  However, it is worth noting that long-term gas prices are in the lower part of their 25-year range.  This inflation level was as we expected in the comparable statement 12 months ago.  Employment has remained high at 74.4% with unemployment barely changing over the past 12 months at 4.4% and below the forecast of 4.5%.  It is interesting to note that the peak of the employment rate was achieved at 76.2% in February 2020.  Vacancies currently stand at 889,000, which is higher than pre-pandemic levels.  The big challenge for the Government is to turn around the rising trend of the economically inactive which currently stands at 9.2m.  If this could be reduced by 1m, then the pressure to "import" labour would reduce.

Wage increases have been consistently above inflation, currently running at some 5.4% and, therefore, well ahead of CPI. With the likelihood of reducing mortgage rates, real disposable income is set to continue to rise.      

It is with some relief to all that the Bank of England has finally decided to cut interest rates, albeit only by 0.25%, to 5%.  It was late to increase rates in 2021 as, in my opinion, it was wrongly concerned about the 1m people still on furlough in September 2021.  It looks like it may also be late in commencing the reductions.  The European Central Bank has rates currently standing at 4.25%, having peaked at 4.5%.  It is to be hoped that we see one or more further reductions this year and for this trend to continue next year, taking rates to a sensible and sustainable level of 3.5% - 4.0%.

Lower interest rates help foster greater economic activity and boost consumer confidence.  A happy by-product is that the Government will, in time, pay less interest on its mountain of debt, thereby assisting its finances. 

As we also pointed out last year, the performance of the UK economy has continued to consistently outperform the "experts" at the Bank of England and the IMF.  It is interesting to note that the Bank of England, recognising its poor record of forecasting, brought in Dr Ben Bernanke, previously Chairman of the United States Federal Reserve, to review its forecasting processes. His cutting report on the quality of the Bank of England's forecasts will hopefully lead to a better performance going forward, given that so many major policy decisions are made based on these forecasts.    

It is to be hoped that with political stability and a consistent strategy for economic growth, the period ahead is one of low inflation and steady economic growth. 

Review of the period   

 

We remain pleased with the ongoing progress being made by the component members of the CEPS Group.  Whilst our companies continue to make progress, the outlook for the future is obviously made uncertain by the Ukraine war and heightened tensions across the Middle East.

 

Operational review

 

Aford Awards

Aford Awards has continued its development by broadening its product range through innovation and using its increased production capability.  Whilst last year focussed on the integration of the business and assets of Impact Promotional Merchandise, this year has been one of managing the various business streams to be more efficient and operationally effective. 

 

The company is looking again at several "bolt-on" acquisitions and has with recent experience, developed a process and structure to facilitate the integration of future investments to maximise return on investment. 

 

Further interim deferred acquisition payments were made, including the £60,000 paid to the vendor of Impact Promotional Merchandise in March 2024.  A further two payments will be made in respect of Impact Promotional Merchandise amounting to £120,000 over the next 12 months.    

 

Friedman's including Milano International

Friedman's and Milano have seen a modest decline in sales with profits to match. 

 

As anticipated, the performance of the two companies remained relatively flat as the continued effects of the cost-of-living crisis and inflationary pressures impacted expected sales. In addition, some of the regular orders in June were delayed into July this year, after the period of this report

 

Hickton Group

The Hickton Group has had another positive first six months with sales, gross profit and EBITDA all being ahead of budget.  

 

Financial review

 

It is pleasing that sales for the Group for the first six months of 2024 at £15.89m were solidly up on the comparable period in 2023 of £15.05m, an increase of 5.6%.

 

Aford Awards generated revenue of £2.06m for the first six months of 2024 compared to £1.99m for the same period in 2023.  The segmental result, presented as EBITDA, was £450,000 in H1 2024 compared to £393,000 in the same period in the previous year.  As highlighted above in the operational review, more overhead has been put in place and it is expected that the benefit of this will be seen over future reporting periods.  

 

Revenue from Friedman's and Milano International was £3.46m in H1 2024 compared to £3.52m in H1 2023.  EBITDA was down marginally from £545,000 in H1 2023 to £479,000 in H1 2024.  Part of the plan to boost sales across both businesses in the second half of the year and beyond is the strengthening of the marketing team.  Recruitment is on-going and it is hoped that the team will be at full force by the start of Q4 2024. 

 

Hickton Group's revenue in H1 2024 increased to £10.37m from £9.55m in the same period of 2023.  The CEPS Board is very pleased with the continued progress at Hickton.  The associated EBITDA has increased from £1.01m in the first six months of 2023 to £1.33m in H1 of 2024. 

 

The operating profit for CEPS Group increased by 15.3% from £1.37m in H1 2023 to £1.58m in H1 2024.  Included within operating profit are CEPS Group costs which have increased to £221,000 (excluding the £37,000 exceptional cost explained in note 2) for the six months (2023: £188,000).  This can be explained by higher legal and professional costs predominantly in relation to the recent balance sheet reconstruction. 

 

Shareholders will be aware that the Board has appointed new auditors, Saffery LLP (formally known as Saffery Champness LLP) to replace Cooper Parry Group Limited.  This will lead to savings on the audit fees for the current year.

 

Net finance costs have declined period-on-period from £393,000 in H1 2023 to £354,000 in H1 2024.  Much of the debt is on fixed rate terms and, as cash generation increases, overall debt is expected to decline and, consequently, the finance charge is expected to reduce.

 

The corporation tax charge of £274,000 (H1 2023: £184,000), representing an increase of 48.9% from 2023, is primarily a provisional charge on the profit generated by the Hickton Group.  In addition, the tax payable is now being computed at 25% rather than the previous rate of 19%.

 

Profit after tax for the period was £952,000 compared to £793,000 for the first six months of 2023.  This has resulted in an improved earnings per share attributable to owners of the parent of 2.29p (H1 2023: 1.93p).  

 

The Group saw strong net cash generated from operating activities.  This amounted to £1.98m in H1 2024 and £2.01m in H1 2023.  Net debt has also fallen from £5.67m at 30 June 2023 to £4.89m at 30 June 2024.  Both these factors explain the improvement in the gearing ratio from 107% at 30 June 2023 to 75% at 30 June 2024 (see note 5).

 

Dividend

 

The Board remains keen to recommence the payment of dividends after a very long period of non-payment.  As a first step towards achieving this, the balance sheet reconstruction was completed on 15 May 2024.  The corporate entity of CEPS PLC now needs to build its revenue reserves to enable the Board to consider either buying back shares and cancelling them, or alternatively paying dividends.  At this time the favoured option, when we are able to do so, is to buy back shares and to cancel them for the benefit of all shareholders.  

 

Employee Share Option Trust

        

It is the Board's intention to establish an Employee Share Option Trust ("ESOT") which will, from time to time and within prescribed price levels, buy ordinary shares in the market.  These shares will be available to match against future share options as they vest.  CEPS will lend the ESOT the funds to finance these modest purchases.

 

Reporting on the progress of the business drivers

 

I set out in the Annual Report 2023 the six profit/value drivers which I believe will increase the value of CEPS in the future:

 

1.       Expected increase in the profits of the three subsidiaries

Aford Awards and Hickton have grown their profits.  At the interim stage, Friedman's and Milano are marginally down.  Overall earnings per share are up 18.7%.

 

2.       Self-funded "bolt-on deals" in each of the three subsidiaries in the manner that has occurred over the past five years

As mentioned above, Aford Awards is reviewing several opportunities which may or may not happen.

 

3.       Repayment of loan stocks from the subsidiaries, absent any acquisitions, leading firstly to the repayment of the £2m third party loan in 2025 and then, finally, the Chelverton Asset Management loan of £2.95m

Hickton has commenced the repayment of its loan stock, which as at 30 June 2024 totals £3,930,000, and CEPS is receiving its due share.

 

Signature Fabrics Limited, the holding company of Friedman's and Milano, has commenced repayment of the CEPS loan. As at 30 June 2024 a total of £220,000 had been repaid leaving £780,000 outstanding.

 

4.       Increase in CEPS' shareholdings in its subsidiary companies 

No change in this period.

 

5.       Share buy backs and cancellation

CEPS is not yet in a position where this can be commenced. 

 

6.       Offer to buy a subsidiary

At this time, we would have little interest in selling a subsidiary, preferring them to continue to grow their profits and repay the loan stock due to CEPS.

 

Prospects

 

The Board is pleased to see the progress for the first six months evidenced in these interim accounts during a period of relative trading normality, as compared to recent years.  The macro position is uncertain but it appears to be improving.  The CEPS Group of companies has clear objectives and is set up to continue to improve its performance. 

 

David Horner

Chairman

05 September 2024

 

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014 (which forms part of domestic UK law pursuant to the European Union (Withdrawal) Act 2018).

The directors of the Company accept responsibility for the content of this announcement.

Enquiries

 

CEPS PLC

David Horner, Chairman

 

+44 1225 483030

 

Cairn Financial Advisers LLP

James Caithie / Sandy Jamieson / Emily Staples

 

+44 20 7213 0880

 

 

Caution Regarding Forward Looking Statements

 

Certain statements in this announcement, are, or may be deemed to be, forward looking statements. Forward looking statements are identified by their use of terms and phrases such as ''believe'', ''could'', "should" ''envisage'', ''estimate'', ''intend'', ''may'', ''plan'', ''potentially'', "expect", ''will'' or the negative of those, variations or comparable expressions, including references to assumptions. These forward-looking statements are not based on historical facts but rather on the directors' current expectations and assumptions regarding the Company's future growth, results of operations, performance, future capital and other expenditures (including the amount, nature and sources of funding thereof), competitive advantages, business prospects and opportunities. Such forward looking statements reflect the directors' current beliefs and assumptions and are based on information currently available to the directors.



 

CEPS PLC

Consolidated Statement of Comprehensive Income

Six months ended 30 June 2024


Note

 

 

Audited


 

Unaudited

Unaudited

12 months


 

6 months
to 30 June

 

6 months
to 30 June

 

to 31

December

 


 

2024

2023

2023


 

£'000

£'000

£'000


 




Revenue

3

15,892

15,054

29,675

Cost of sales

 

(9,041)

(8,867)

(17,187)

Gross profit

 

6,851

6,187

12,488

Other operating income

 

-

20

7

Exceptional income and expenses

 

(37)

-

137

Administration expenses

 

(5,234)

(4,837)

(10,086)

Operating profit

3

1,580

1,370

2,546


 




Analysis of operating profit

 




Trading

 

1,838

1,538

2,868

Other operating income

 

-

20

7

Exceptional items

2

(37)

-

137

Group costs

 

(221)

(188)

(466)


 

1,580

1,370

2,546


 




Net finance costs

 

(354)

(393)

(755)

Profit before tax

 

1,226

977

1,791

Taxation

 

(274)

(184)

(567)

 

952

793

1,224


 




Other comprehensive income

 


 

 

Items that will not be reclassified to profit or loss

 

-

-

 

 

 

13

Actuarial gain on defined benefit pension plans

 

Other comprehensive income for the period, net of tax

 

-

-

13

Total comprehensive income for the period

 

952

793

1,237

 

 


 

 

Income attributable to:

 


 

 

Owners of the parent

 

481

405

556

Non-controlling interest

 

471

388

668

 

952

793

1,224

Total comprehensive income attributable to:

 


 

 

Owners of the parent

 

481

405

569

Non-controlling interest

 

471

388

668


 

952

793

1,237

Earnings per share attributable to owners of the parent during the period

 




basic and diluted

4

2.29p

1.93p

2.65p

 



 

CEPS PLC

Consolidated Statement of Financial Position

As at 30 June 2024


Note

Unaudited

Unaudited

Audited


 

as at

as at

as at


 

30 June

30 June

31 December


 

2024

2023

2023


 

£'000

£'000

£'000

Assets

 




Non-current assets

 




Property, plant and equipment

 

1,031

1,098

974

Right-of-use assets

 

1,794

1,857

2,025

Intangible assets

 

11,513

11,649

11,605


 

14,338

14,604

14,604

Current assets

 




Inventories

 

2,406

2,296

2,388

Trade and other receivables

 

5,244

4,840

4,837

Cash and cash equivalents

(excluding bank overdrafts)

 

1,713

1,488

916


 

9,363

8,624

8,141


 




Total assets

3

23,701

23,228

22,745


 




Equity

 




Capital and reserves attributable to owners of the parent

 




Called up share capital

6

63

2,100

2,100

Share premium

6

-

7,017

7,017

Retained earnings

 

2,604

(7,121)

(6,931)


 

2,667

1,996

2,186

Non-controlling interest in equity

 

3,878

3,312

3,407

Total equity

3

6,545

5,308

5,593


 




Liabilities

 




Non-current liabilities

 




Borrowings

 

4,484

7,648

6,889

Lease liabilities

 

1,514

1,636

1,721

Trade and other payables

 

-

120

60

Provisions

 

395

-

400

Deferred tax liability

 

357

338

372


 

6,750

9,742

9,442

Current liabilities

 




Borrowings

 

4,120

1,822

2,178

Lease liabilities

 

449

373

449

Trade and other payables

 

4,242

4,263

3,683

Current tax liabilities

 

1,595

1,720

1,400


 

10,406

8,178

7,710


 




Total liabilities

3

17,156

17,920

17,152


 




Total equity and liabilities

 

23,701

23,228

22,745

 

CEPS PLC

Consolidated Statement of Cash Flows

Six months ended 30 June 2024


 

Unaudited

Unaudited

Audited


 

6 months to

6 months to

12 months to


 

30 June

30 June

31 December


 

2024

2023

2023


 

£'000

£'000

£'000

Cash flows from operating activities

 




Profit for the financial period

 

952

793

1,224

Adjustments for:

 




Depreciation and amortisation

 

425

390

821

Loss on disposal of fixed assets

 

4

2

21

Pension contributions less than administrative charge

 


-

50

Net finance costs

 

354

393

755

Taxation charge

 

274

184

567

Changes in working capital

 




Movement in inventories

 

(18)

(158)

(250)

Movement in trade and other receivables

 

(407)

(834)

(965)

Movement in trade and other payables

 

519

1,347

652

Movement in provisions

 

(5)

-

400

Cash generated from operations

 

2,098

2,117

3,275

Corporation tax paid

 

(122)

(111)

(450)

Net cash generated from operating activities

 

1,976

2,006

2,825


 




Cash flows from investing activities

 




Interest received

 

-

6

1

Deferred consideration paid in respect of the acquisition of subsidiaries and businesses in prior periods

 

(64)

(223)

(320)

Purchase of property, plant and equipment

 

(145)

(525)

(610)

Proceeds from sale of assets

 

-

-

70

Purchase of intangible fixed assets

 

(8)

(23)

(80)

Purchase of loan notes in subsidiary from holder

 

-

-

(57)

Net cash used in investing activities

 

(217)

(765)

(996)


 




Cash flows from financing activities

 




Purchase of subsidiary shares from minority holders

 

-

-

(2)

Proceeds from borrowings

 

127

-

502

Repayment of borrowings

 

(590)

(405)

(1,253)

Dividends paid to minority shareholders in a subsidiary

 

-

-

(157)

Interest paid

 

(282)

(451)

(889)

Lease liability payments

 

(217)

(181)

(398)

Net cash flow used in financing activities

 

(962)

(1,037)

(2,197)

Net increase/(decrease) in cash and cash equivalents

 

797

204

(368)

Cash and cash equivalents at the beginning of the period

 

916

1,284

1,284

Cash and cash equivalents at the end of the period

 

1,713

1,488

916

 

Cash and cash equivalents

 




Cash at bank and in hand

 

1,713

1,488

916

 

 

 

 

 

 

 

 

 

 

CEPS PLC

Consolidated Statement of Changes in Equity

Six months ended 30 June 2024

 

 

Share capital

Share premium

Retained earnings

Attributable to owners of the parent

Non-controlling interest

Total equity

 

£'000

£'000

£'000

£'000

£'000

£'000

At 1 January 2023

(audited)

2,100

7,017

(7,526)

1,591

2,924

4,515

Profit and total comprehensive income for the financial period

-

-

405

405

388

793

At 30 June 2023 (unaudited)

2,100

7,017

(7,121)

1,996

3,312

5,308

Actuarial gain

-

-

13

13

-

13

Profit for the year

-

-

151

151

280

431

Total comprehensive income for the financial year

-

-

164

164

280

444

Changes in ownership in interest in subsidiaries

-

-

26

26

(27)

(1)

Dividends paid in respect of non-controlling interests

-

-

-

-

(158)

(158)

At 31 December 2023 (audited)

2,100

7,017

(6,931)

2,186

3,407

5,593

Profit and total comprehensive income for the financial period

-

-

481

481

471

952

Capital reduction (note 6)

(2,037)

(7,017)

9,054

-

-

-

At 30 June 2024 (unaudited)

63

-

2,604

2,667

3,878

6,545

           

 



 

Notes to the financial information

1.    General information

CEPS PLC (the "Company") is a company incorporated and domiciled in England and Wales.  The Company is a public company limited by shares, which is admitted to trading on the AIM market of the London Stock Exchange.  The address of the registered office is 11 Laura Place, Bath BA2 4BL.

The registered number of the Company is 00507461.

This condensed consolidated half-yearly financial information was approved by the directors for issue on 5       September 2024.

This condensed consolidated half-yearly financial information does not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006.  Statutory accounts for the year ended 31 December 2023 were approved by the Board of directors on 2 May 2024 and delivered to the Registrar of Companies.  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 of the Companies Act 2006.

This condensed consolidated half-yearly financial information has not been reviewed or audited.

Basis of preparation

This condensed consolidated half-yearly financial information for the six months ended 30 June 2024 has been prepared in accordance with IAS 34, 'Interim Financial Reporting'.  The condensed consolidated half-yearly financial information should be read in conjunction with the annual financial statements for the year ended 31 December 2023, which have been prepared in accordance with IFRS as adopted by the United Kingdom.

Accounting policies

The accounting policies applied are consistent with those of the annual financial statements for the year ended 31 December 2023 and with those to be applied for the year ending 31 December 2024, as described in the 2023 annual financial statements. There are no new standards or interpretations expected to be adopted in 2024 that would have a significant impact on the financial statements.

2.    Exceptional items

There have been no new material exceptional items in the period ended 30 June 2024 (2023: none). The expected surplus of £537,000 from the pension scheme was included as a credit in exceptional items in the year ended 31 December 2023 together with a related tax charge of £134,000. After the final professional fees, the surplus was £37,000 lower and £28,000 less after tax. This has been presented as an exceptional cost of £37,000 and tax credit of £9,000.

Dilapidation provisions were also assessed in 2023 and the non-recurring cost shown in exceptional items. There has been no change to this estimate as at 30 June 2024.

3.    Segmental analysis

The chief operating decision maker of the Group is its Board.  Each operating segment regularly reports its performance to the Board which, based on those reports, allocates resources to and assesses the performance of those operating segments.

Operating segments and their principal activities are as follows:

 

-     Aford Awards, including Impact Promotional Merchandise, a sports trophy, engraving and promotional merchandising company;

-     Friedman's, a convertor and distributor of specialist lycra, including Milano International (trading as Milano Pro-Sport), a designer and manufacturer of leotards; and

-     Hickton Group, comprising Hickton Quality Control, Cook Brown Building Control, Cook Brown Energy, Morgan Lambert and Qualitas Compliance, providers of services in the construction industry.

 

The United Kingdom is the main country of operation from which the Group derives its revenue and operating profit and is the principal location of the assets of the Group.  The Group information provided below, therefore, also represents the geographical segmental analysis. Of the £15,892,000
(2023: £15,054,000) of revenue, £15,089,000 (2023: £14,188,000) is derived from UK customers.

The Board assesses the performance of each operating segment by a measure of adjusted earnings before interest, tax, depreciation and amortisation and Group costs.  Other information provided to the Board is measured in a manner consistent with that in the financial statements.

i)     Results by segment

 

Unaudited 6 months to 30 June 2024


Aford
Awards

Friedman's

 

Hickton

 Group

 

Total
Group


£'000

£'000

£'000

£'000

Revenue

2,057

3,461

10,374

15,892

Segmental result (EBITDA)

450

479

1,332

2,261

Right-of-use depreciation charge

(38)

(84)

(66)

(188)

Depreciation and amortisation charge

(74)

(100)

(61)

(235)

Group costs (including exceptional cost)




(258)

Net finance costs




(354)

Profit before taxation




1,226

Taxation




(274)

Profit for the period




952

 

Unaudited 6 months to 30 June 2023


Aford
Awards

Friedman's

 

Hickton

 Group

 

Total
Group


£'000

£'000

£'000

£'000

Revenue

1,985

3,520

9,549

15,054

Segmental result (EBITDA)

393

545

1,010

1,948

Right-of-use depreciation charge

(37)

(84)

(47)

(168)

Depreciation and amortisation charge

(69)

(113)

(40)

(222)

Group costs




(188)

Net finance costs




(393)

Profit before taxation




977

Taxation




(184)

Profit for the period




793

 

 Audited 12 months to 31 December 2023


Aford
Awards

Friedman's

 

Hickton

   Group

 

Total
Group


£'000

£'000

£'000

£'000

Revenue

3,476

6,826

19,373

29,675

Expenses

(2,920)

(5,759)

(17,304)

(25,983)

Segmental result (EBITDA)

556

1,067

2,069

3,692

Depreciation and amortisation charge

(142)

(208)

(125)

(475)

IFRS 16 depreciation

(75)

(168)

(99)

(342)

Group costs (net of exceptional credit)




(329)

Net finance costs (including IFRS 16)




(755)

Profit before taxation




1,791

Taxation




(567)

Profit for the year




1,224

ii)     Assets and liabilities by segment

Unaudited as at 30 June

Segment assets

Segment liabilities

Segment net (liabilities)/assets


2024

2023

2024

2023

2024

2023


£'000

£'000

£'000

£'000

£'000

£'000

Continuing operations:







CEPS Group

458

192

(5,526)

(5,455)

(5,068)

(5,263)

Aford Awards

4,117

4,099

(1,806)

(2,028)

2,311

2,071

Friedman's

8,201

8,377

(2,911)

(2,884)

5,290

5,493

Hickton Group

10,925

10,560

(6,913)

(7,553)

4,012

3,007

Total - Group

23,701

23,228

(17,156)

(17,920)

6,545

5,308

 

 

 

 

 

 

 

Audited as at 31 December 2023

Segment assets

Segment liabilities

 Segment net (liabilities)/assets


£'000

£'000

£'000

Continuing operations:




CEPS Group

626

(5,729)

(5,103)

Aford Awards

3,828

(1,769)

2,059

Friedman's

7,872

(2,709)

5,163

Hickton Group

10,419

(6,945)

3,474

Total - Group

22,745

(17,152)

5,593

 

4.    Earnings per share

 

Basic earnings per share is calculated on the profit after taxation for the period attributable to owners of the Company of £481,000 (2023: £405,000) and on 21,000,000 (2023: 21,000,000) ordinary shares, being the weighted number in issue during the period. 

 

 

5.    Net debt and gearing

Gearing ratios at 30 June 2024, 30 June 2023 and 31 December 2023 are as follows:

 

 

Group

unaudited

 30 June 2024

Group

unaudited

 30 June 2023

Group audited

31 December 2023

 

£'000

£'000

£'000





Total borrowings

8,604

9,470

9,067

Less: acquisition loan notes

(1,997)

(2,309)

(2,125)

Less: cash and cash equivalents

(1,713)

(1,488)

(916)

Net debt

4,894

5,673

6,026

Total equity

6,545

5,308

5,593

Gearing ratio

75%

107%

108%

 

In order to provide a more meaningful gearing ratio, total borrowings are the sum of bank borrowings and third-party debt, excluding loan notes used to finance the Group's acquisitions.

 

As stated in the Annual Report 2023, the loan from a third party of £2,000,000 is repayable by 30 June 2025.  For this reason, it is now shown as a current liability in these financial statements and gives rise to a net current liability position of £1,043,000.  It is the Board's intention to refinance this loan by the end of the 2024 financial year.

 

6.       Share capital and premium

 

Number of shares

Share capital
£'000

Share premium
£'000

Total
£'000

 

 

 

 

 

At 1 January 2024

21,000,000

2,100

7,017

9,117

Capital reduction

-

(2,037)

(7,017)

(9,054)

At 30 June 2024

21,000,000

63

-

63

 

A General Meeting was held on 20 March 2024 regarding a proposed share capital reduction in the Company and the cancellation of the share premium account which was approved by special resolution.  On 30 April 2024 an order of the High Court of Justice, Chancery Division, confirmed the reduction of the share capital in the Company and the cancellation of its share premium account.  As a result, the nominal amount of each ordinary share in issue in the Company of £0.10 was reduced by £0.097 to £0.003 with an amount of £2,037,000 transferred to the profit and loss reserve together with £7,017,000 from the cancellation of the share premium account.   

7.       Related-party transactions

During the period the Company entered into the following transactions with its subsidiary groups:

 

Aford Awards Group Holdings Limited

£'000

 

 

Signature Fabrics Limited

£'000

 

 

Hickton Group Limited

£'000

Loan note interest receivable

 

 

 

- 6 months to 30 June 2024

38

24

97

- 6 months to 30 June 2023

38

29

95

- For the year to 31 December 2023 (audited)

76

56

193

Management charge income receivable

 

 

 

- 6 months to 30 June 2024

10

18

12

- 6 months to 30 June 2023

10

18

6

- For the year to 31 December 2023 (audited)

20

35

25

Dividends received




- 6 months to 30 June 2024

-

-

-

- 6 months to 30 June 2023

-

-

-

- For the year to 31 December 2023 (audited)

-

193

-

Amount owed to the Company




- 30 June 2024

1,235

789

2,248

- 30 June 2023

1,310

969

2,453

- For the year to 31 December 2023 (audited)

1,254

816

2,439

 

The Company is under the control of its shareholders and not any one individual party.

Statement of directors' responsibility

The directors confirm that, to the best of their knowledge, these condensed consolidated half‑yearly financial statements have been prepared in accordance with IAS 34 as adopted by the United Kingdom.  The interim management report includes a fair review of the information required by DTR 4.2.7R and DTR 4.2.8R, namely:

 

·           an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and

 

·           material related-party transactions in the first six months of the financial year and any material changes in the related-party transactions described in the last Annual Report.

 

A list of current directors is maintained on the CEPS PLC website: www.cepsplc.com

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