TIDMJLH
RNS Number : 4571J
John Lewis Of Hungerford PLC
13 December 2022
The information contained within this announcement is deemed by
the Group to constitute inside information as stipulated under the
Regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations
2019/310 ("MAR"). With the publication of this announcement via a
Regulatory Information Service, this inside information is now
considered to be in the public domain.
13 December 2022
JOHN LEWIS OF HUNGERFORD PLC
FINAL RESULTS
John Lewis of Hungerford plc ("John Lewis of Hungerford" or the
"Company"), the specialist kitchen manufacturer and retailer,
announces its final results for the year ended 30 June 2022.
Chief Executive's Business Review
We are pleased to report that John Lewis of Hungerford achieved
sales for the year ended 30 June 2022 of GBP10.3 million (2021:
GBP7.9 million), an increase of 30.9 per cent. The Company
celebrated its 50th Anniversary in the Summer of 2022, and in this
milestone year, has achieved sales in excess of GBP10 million for
the first time. Profit Before Tax and non-recurring costs* was
GBP166k (2021: Profit Before Tax GBP80k). Underlying EBITDA* (pre
IFRS 16) was GBP500k (2021: EBITDA GBP424k).
Sales of GBP10.3 million do not fully reflect the strength of
the trading performance of the Company throughout the reported
year. The orders secured by our 12 stores were GBP12.3 million
(FY21: GBP9.3 million). The final quarter of the year was impacted
by disruption from Covid-19 within the factory in Wantage, with the
highest level of interruption to production throughout the pandemic
and a total of 81-man days lost. This included periods where
sections of the factory had to close completely. Without this
disruption, a still higher proportion of the GBP12.3 million orders
would have been completed before 30 June 2022, and recognised as
sales in the year, with the Gross Margin on these sales flowing
through to profit. However, this disruption to the final quarter of
FY22 has impacted positively the start of our new financial year to
30 June 2023, with a significantly stronger order book secured, of
GBP5.3 million compared to GBP3.2 million at the same point last
year.
Gross Margin for the year declined by -1.2% points in the year
to 45.9%. The Company experienced some extreme increases in raw
material prices in the year, with some increases more than 100%.
The Company took action to pass these cost increases on, by raising
the retail prices. However, there is a time lag between quoted
business and completing the delivered sale and installation, which
on average is 2-3 months later, whereby the impact of the price
increases will not fully be seen in the year we report today. We
are now seeing welcome signs of some level of stabilisation for raw
material prices.
The year finished with a positive gross cash position of
GBP1,473k. The Company has total loans of GBP1,116k, largely
secured on its freehold properties. Net cash, excluding IFRS 16
lease liabilities, was therefore GBP357k (2021: net cash GBP165k).
The Company was grateful for the Government support during the
pandemic years FY20/FY21, which allowed for delayed phasing of VAT
and PAYE payments. All of the agreed deferred payments were made
promptly during the year ended 30 June 2022 and the Company is
fully up to date, with no further outstanding deferred
payments.
The Company owns the freeholds of its factory in Wantage, and
its showroom in Hungerford. These freeholds have been revalued as
at 30 June 2022, with the total valuation increased by GBP584k to
GBP2,431k. The revaluation is reflected in the Accounts to 30 June
2022 as a movement in the revaluation reserve. The Company's Net
Assets as at 30 June 2022 were GBP1.4 million (2021: GBP0.8
million).
The costs have been commensurate with the business reporting
GBP10.3 million of turnover, combined with deposits secured against
a further GBP2 million of sales. The Board are confident that
developing the infrastructure throughout the FY22 year has secured
a strong foundation for continued growth over the forthcoming
period, in a structurally improved operating model, which was able
to secure GBP12.3 million of orders within FY22.
* PBT before one-off, non-recurring costs of GBP166k /EBITDA of
GBP500k is after adjusting for GBP152k of one-off non-recurring
costs which occurred in the year to June 2022, and which are not
expected to be repeated going forward. These non-recurring costs
are related to project and one-off restructuring costs. Reported
PBT for the year ended 30 June 2022 was GBP14k.
Marketing
The Company has continued to develop its digital capabilities,
working with expert partners in the field. Fueled by compelling new
photography from our successfully completed projects, the business
has created a convincing portfolio to demonstrate its credentials
to our discerning customer.
The substantial increase in orders secured has demonstrated the
success of being selective in the choices of our marketing
channels. From data driven digital campaigns to enhancing our
presence in the social media arena, with an emphasis on Instagram,
the Company continues to work closely with our PR advisory team, to
secure the right traffic to our website, to convert into successful
client relationships. With a focused approach on enhancing the
customer journey through our website, we are seeing improvements in
the level of appointments coming into the business.
The marketing of our 50th Birthday commenced in the Summer of
2022 and has seen the launch of our new Brochure, which has been
extremely well received. It is a ground-breaking piece of work,
providing both inspiration and learning for our customer, to
support our dialogue during the sale. This has helped our customers
to appreciate the difference in the unique customer experience
offered by the John Lewis of Hungerford team. Our 50th Birthday in
the summer coincided with the Jubilee celebrations for Her Late
Majesty Queen Elizabeth II. We were given the opportunity to
feature in the widely distributed official publication for the
Platinum Jubilee, celebrating the Best of British Manufacturing. We
were delighted have been invited to be a part of this highly
respected publication and have seen benefits from the high value
clientele it has attracted into the Company.
Ensuring we have been able to continue our work with
professional intermediaries remains core to our success in
attracting larger, multi-room projects. Whole-home renovations with
a considerably higher spend are a more frequent occurrence, as our
customers look to furnish their home with one, high-end, luxury
cabinet maker. Working closely with their architect, developer or
interior designer, has given the Company the opportunity to partner
with some exciting new professionals in the home renovation
space.
The finance proposition available to our customers through
Novuna (formerly Hitachi) Consumer Finance has provided our
customer with options to spread the cost of their new Kitchen. This
has attracted new customers to the Company, now able to afford to
buy their dream kitchen.
The impact of these initiatives has led to a record number of
kitchens being sold in the year, with a shift towards more
traditional options in cabinetry choices, reflecting a return to
classic styles, which truly stand the test of time. Customers
continue to use the versatile cabinetry options available through
our bedrooms business to adapt their needs around the home.
Operations
The acquisition of our new storage facility on the Grove
Business Park in Wantage has been integral to facilitating the
growth we report today. With the increased throughput in our
production facility, it has been vital to work with our highly
committed and effective workforce to improve the operating model
and make efficiency gains, as we plan for continued growth.
A review to introduce shift working and additional resource has
been undertaken, to allow the Board to support the business in
developing the right model, to ensure we continue to deliver a
product with a consistently high standard of finish, for which our
Brand is recognised. Challenges in the supply chain have led to the
ongoing management of delayed product, mostly managed by procuring
our white goods months ahead of any planned delivery schedule. As a
result, we have been able to continually offer a competitive lead
time, which has stood us in good stead over the period and
continues to do so.
Raw materials have seen significant price increases, some in
excess of 100%; as mentioned, we are now seeing signs of some
stabilisation in this area, however this has undoubtedly impacted
our margin for the year.
Work on our MRP system continues, to allow the business the
visibility on improved capacity planning and also all key margin
drivers within our supply chain. This work has commenced, with the
system improvements due to be live later in our current year.
With increased demand, small improvements will produce
incremental gains in our margin, with our new Production Manager
working hard to lead the team in this regard.
To ensure our people are able to work as effectively as
possible, we continue to put the welfare of our employees at the
heart of our business. The introduction of a We Care Policy, which
provides exceptional health benefits and support, together with
more general advice on wellbeing and mental health services,
ensures that our people feel looked after, during these stressful
and turbulent economic times.
Trading Outlook
As stated earlier, we entered the new financial year with a
robust order book, inclusive of the deferred orders from FY22. As a
result, the level of orders confirmed in the first 23 weeks are
ahead of the prior year. Dispatched sales, forward committed orders
and future orders against which a first stage deposit has been
taken, stood at GBP8.6 million (2021: GBP7.4 million). New business
has remained consistent and with improvements driven by the digital
marketing strategy, the quality of quoted business is strong and we
remain confident of our ability to continue to convert at a high
level moving forward.
Each carefully considered building block in our FY23 plan has
been evaluated for its impact on our profits for this current year,
as we continue to strengthen our capacity and our infrastructure to
respond to sustainably higher demand, confident that our operating
model can accommodate the growth we anticipate over the coming
period. Our business has proved its resilience over the last 2
years and given the inherent expertise within the Company, we are
well positioned to maintain our trend of market share gains.
Whilst we believe that the demand is in line with our plans for
growth in FY23, the uncertainty in the financial markets has
created a degree of hesitancy for customers to complete on their
orders. The Board continues to track the economic indicators,
together with the supply chain challenges and the ongoing impact on
pricing. There are a range of plans prepared to respond
appropriately to changing market conditions, based on whether the
Board considers the external changes to be for the short or long
term.
The unprecedented growth experienced in the year that we are
reporting today, is a milestone for the Company in its 50th
Birthday year. It has been both demanding and exciting, for our
teams across the business. We thank them for their hard work and
resilience, to ensure that we have been able to capitalise on this
demand to the benefit of all of our stakeholders, as we continue to
build a Company with increased capacity and capability over the
coming period.
On behalf of the Board, I would like to thank our Employees, our
Shareholders and our Supplier Partners, for their ongoing support
and counsel throughout the period.
As we move through FY23, we continue to celebrate 50 years of
John Lewis of Hungerford, with confidence that the Company can
achieve sustained profitability.
Kiran Noonan
Chief Executive Officer
12 December 2022
Enquiries:
John Lewis of Hungerford plc 01235 774300
Kiran Noonan - Chief Executive Officer / Acting Chairman
Allenby Capital Limited (Nominated Adviser and Broker) 020 3328 5656
David Worlidge / Nick Naylor / George Payne (Corporate
Finance)
Matt Butlin (Sales and Corporate Broking)
Income Statement for the year
ended 30 June 2022
2022 2021
Notes GBP GBP
Revenue 10,325,129 7,877,130
Cost of sales (5,580,045) (4,165,462)
------------ ------------
Gross profit 4,745,084 3,711,668
Selling and distribution
costs (545,813) (408,863)
Administrative
expenses (3,968,667) (3,160,325)
Other operating
income 2,520 165,012
------------ ------------
Total (3,966,147) (2,995,313)
Profit from operations 2 233,124 307,492
Finance income 59 297
Finance expenses (219,624) (227,255)
------------ ------------
Profit before
tax 13,559 80,534
Tax Credit 3 - 124,549
------------ ------------
Profit for
the year 13,559 205,083
============ ============
Earnings per
share 4
Basic 0.01p 0.11p
Fully diluted 0.01p 0.10p
Statement of Financial Position
as at 30 June 2022
30 June 30 June
2022 2021
Notes GBP GBP
Non-current assets
Intangible assets 148,147 140,470
Property, plant and equipment 5 3,125,339 2,629,053
Right of use assets 1,579,524 1,372,434
Trade and other receivables 31,500 31,500
------------ ------------
4,884,510 4,173,457
Current assets
Inventories 251,580 193,133
Trade and other receivables 1,864,437 868,878
Deferred tax asset 82,000 82,000
Cash and cash equivalents 1,472,771 1,301,612
------------ ------------
3,670,788 2,445,623
Total assets 8,555,298 6,619,080
------------ ------------
Current liabilities
Trade and other payables (2,429,751) (2,052,345)
Customer deposits (1,734,596) (944,000)
Lease liabilities (279,798) (264,168)
Provisions 7 (23,423) (29,998)
(4,467,568) (3,290,511)
Non-current liabilities
Borrowings 6 (1,115,761) (1,137,146)
Lease liabilities (1,518,875) (1,335,874)
Provisions 7 (52,632) (52,632)
------------ ------------
(2,687,268) (2,525,652)
Total liabilities (7,154,836) (5,816,163)
------------ ------------
Net assets 1,400,462 802,917
============ ============
Equity
Share Capital 193,945 193,945
Share Premium 1,222,433 1,222,433
Other Reserves 1,421 1,421
Revaluation reserve 1,102,343 518,357
Retained Earnings (1,119,680) (1,133,239)
------------ ------------
Total equity 1,400,462 802,917
============ ============
Statement of Changes in Equity for the year ended 30 June
2022
Share Share Other Revaluation Retained
Capital Premium Reserves Reserve Earnings Total
GBP GBP GBP GBP GBP GBP
--------------- -------- ---------- --------- ------------ ------------ ----------
At 30 June
2020 186,745 1,188,021 1,421 560,906 (1,342,373) 594,720
Profit
for the
year - - - - 205,083 205,083
Share issue 7,200 34,412 - - - 41,612
Revaluation
of freeholds - - - - - -
Deferred
tax on
Revaluation
of freeholds - - - (42,549) - (42,549)
Share based
payments - - - - 4,051 4,051
---------------- -------- ---------- --------- ------------ ------------ ----------
At 30 June
2021 193,945 1,222,433 1,421 518,357 (1,133,239) 802,917
Profit
for the
year - - - - 13,559 13,559
Share issue - - - - - -
Revaluation
of freeholds - - - 583,986 - 583,986
Deferred
tax on
Revaluation
of freeholds - - - - - -
Share based
payments - - - - - -
---------------- --------
At 30
June 2022 193,945 1,222,433 1,421 1,102,343 (1,119,680) 1,400,462
---------------- -------- ---------- --------- ------------ ------------ ----------
Statement of Cash Flows for the year ended 30 June 2022
2022 2021
GBP GBP
Cash flows from operating
activities
Profit from operations
after tax 233,124 432,041
Amortisation of intangible
assets 33,104 32,970
Depreciation and impairment
of property, plant and
equipment 174,338 188,403
Depreciation of right
of use assets 258,731 256,990
Share based payments - 4,051
Loss on disposal of property,
plant and equipment 2,160 3,237
(Increase) in inventories (58,447) (40,603)
(Increase) in receivables (995,559) (315,102)
Increase in payables 377,406 598,114
Increase in Customer
Deposits 790,596 362,942
(Decrease) in provisions (6,575) (34,423)
---------- ----------
Cash generated from
operations 808,878 1,488,620
Tax (Credit) on Operations - (124,549)
Net cash from operating
activities 808,878 1,364,071
---------- ----------
Cash flows from investing
activities
Purchase of intangible
assets (40,781) (16,250)
Purchase of property,
plant and equipment (92,407) (27,317)
Net proceeds from sale
of property, plant and
equipment - (2,487)
Interest received 59 297
Net cash used in investing
activities (133,129) (45,757)
---------- ----------
Cash flows from financing
activities
Interest
paid (126,769) (125,970)
Allotment
of shares - 41,608
Repayment of borrowings
- finance leases (21,385) (18,887)
Repayment of borrowings
- bank loans - (111,701)
Repayment of IFRS 16
lease liabilities (356,436) (360,517)
Net cash used in financing
activities (504,590) (575,467)
---------- ----------
Net increase in cash
and cash equivalents 171,159 742,847
---------- ----------
Net cash and cash equivalents
at the start of the period 1,301,612 558,765
Net cash and cash equivalents
at the end of the year 1,472,771 1,301,612
========== ==========
Net cash and cash equivalents
comprise:
Cash at bank and in hand 1,472,771 1,301,612
Bank overdrafts - -
1,472,771 1,301,612
========== ==========
The table below sets out an analysis of net debt and the
movements in net debt for each of the periods presented.
Reconciliation
of Net debt
Liabilities from financing Other
activities assets
Lease
Borrowings liabilities Sub-total Cash balances
Net debt as at
1 July 2020 1,267,734 1,674,316 2,942,050 558,765
Cash Flows (130,588) (239,363) (369,951) 742,847
New leases - 165,089 165,089 -
Net debt as at
30 June 2021 1,137,146 1,600,042 2,737,188 1,301,612
----------- ------------- ---------- --------------
Cash Flows (21,385) 198,631 177,246 171,159
Net debt as at
30 June 2022 1,115,761 1,798,673 2,914,434 1,472,771
=========== ============= ========== ==============
Notes to the Financial Statements
1. General information
While the financial information included in this preliminary
announcement has been prepared in accordance with International
Financial Reporting Standards (IFRSs), this announcement does not
itself contain sufficient information to comply with IFRSs. The
Group will publish full financial statements that comply with IFRSs
which will shortly be available on its website and are to be posted
to shareholders shortly.
The financial information set out in the announcement does not
constitute the Company's statutory accounts for the years ended 30
June 2022 or 2021. The financial information for the year ended 30
June 2021 is derived from the statutory accounts for that year,
which were prepared under IFRSs, and which have been delivered to
the Registrar of Companies. The auditor's report on those accounts
was unqualified and did not contain a statement under either
Section 498(2) or Section 498(3) of the Companies Act 2006 and did
not include references to any matters to which the auditors drew
attention by way of emphasis.
The financial information for the year ended 30 June 2022 is
derived from the audited statutory accounts for the year ended 30
June 2022 on which the auditors have given an unqualified report,
that did not contain a statement under section 498(2) or 498(3) of
the Companies Act 2006. The statutory accounts will be delivered to
the Registrar of Companies following the Company's annual general
meeting.
Going concern
The financial statements are prepared on a going concern basis, which the directors believe to be appropriate
for the following reasons:
The results show that the Company made a profit before tax and one-off, non-recurring expenditure, of GBP166k
and a reported profit of GBP14k (2021: profit before tax of GBP80k) and had net current liabilities of GBP895k
(2021: GBP844k) as at 30 June 2022. The one-off non-recurring costs were related to project and restructuring
costs.
The year finished with a positive gross cash position of GBP1,473k. The Company has total loans of GBP1,116k,
largely secured on its freehold properties. Net cash, excluding IFRS 16 lease liabilities, was therefore GBP357k
(2021: net cash GBP165k). Customer deposits are GBP790k higher than last year, reflecting the strength of the
order book at year end.
The Company owns the Freeholds of its factory in Wantage, and also its showroom in Hungerford. These Freeholds
have been revalued as at June 2022, with the total valuation increased by GBP584k to GBP2,431k. The revaluation
is reflected in the Accounts to 30 June 2022 as a movement in the revaluation reserve. The Company's closing
Net Assets were GBP1.4 million (2021: GBP0.8 million).
The Directors have had preliminary contact with lenders to re-finance the loan, based on our return to profitability,
asset backing and stronger cash generation. It is the intention of the Directors to refinance the loan within
the new financial year to 30 June 2023.
The Trading Outlook within the Chief Executive's Business review shows that we entered the new financial year
with a robust order book, inclusive of the deferred orders from FY22. As a result, the level of orders confirmed
in the first 21 weeks are ahead of the prior year. Dispatched sales, forward committed orders and future orders
against which a first stage deposit has been taken, stood at GBP8.6 million (2021: GBP7.4 million). New business
has remained consistent and with improvements driven by the digital marketing strategy, the quality of quoted
business is strong and we remain confident of our ability to continue to convert at a high level moving forward.
Each carefully considered building block in our FY23 plan has been evaluated for its impact on our profits for
this current year, as we continue to strengthen our capacity and our infrastructure to respond to sustainably
higher demand, confident that our operating model can accommodate the growth we anticipate over the coming period.
Cash flows have been prepared for a period of at least twelve months from the date of signing these financial
statements. For additional prudence, the Directors have modelled a severe, but plausible, sensitivity up to a
15% reduction in sales against this plan and for a period of twelve months from the date of signing, to be assured
that the Company can withstand any economic instability and the insecurity around energy markets arising from
the current war in Ukraine.
As the Company operates a made-to-order, negative working capital model, it is reliant on the cash flows from
customer deposits and completion of sales to be able to meet its liabilities as they fall due. The Directors
have considered all of the factors noted above, including the strength in the Company's current trading and forward
order book, together with the high levels of quoted business moving forwards and are confident that the Company
has adequate resources to continue to meet all liabilities, as and when they fall due, for the foreseeable future
and, at least for the period of twelve months from the date of approval of these financial statements.
PROFIT FROM OPERATIONS
2
2022 2021
GBP GBP
Profit from operations
is stated after charging:
Auditors remuneration
- Company audit 26,900 26,900
Auditors remuneration
- taxation services 3,600 3,600
Amortisation of intangible
fixed assets 33,104 32,970
Depreciation of owned property
plant and equipment 161,895 175,959
Depreciation of plant and equipment
held
on finance leases 12,444 12,444
Depreciation of
Right of Use Assets 258,731 256,990
Government
Grant - CJRS
- Direct Factory
Labour - (20,571)
- Other
Salaries - (62,564)
Other Operating Income - 'Government
Grant for Retail Businesses' - (165,012)
Profit / (Loss) on disposal of
property, plant and equipment (2,160) 3,237
Operating lease
rentals
- Plant and
machinery 11,894 11,610
Cost of inventories recognised
as an expense 3,706,358 2,806,385
TAX ON PROFIT FROM OPERATIONS
3
2022 2021
GBP GBP
Current period
taxation
UK Corporation tax charge for
the period - -
Total current
tax - -
Origination and reversal of temporary
timing differences - -
Current year deferred tax asset recognised
/ (not recognised) - -
Reversal of previously recognised
Deferred Tax asset - 82,000
Deferred tax credit on losses - -
Adjustment in respect of previous years - -
Research and Development tax credit
Changes in tax rates being 6% impact
on the deferred tax asset/liabilities
recognised on losses/revaluations in
prior year - 42,549
- 124,549
======== ==========
The tax assessed for the period differs from the standard rate
of corporation tax in the UK. The differences are explained
below:
2022 2021
GBP GBP
Profit on ordinary activities
before tax 13,559 80,534
-------- ----------
Profit on ordinary activities multiplied
by standard rate of corporation tax
in the UK of 19% 2,576 15,301
Effect of:
Expenses not deductible for tax purposes - -
Depreciation on assets not qualifying
for tax allowances - 2,197
Other permanent differences (2,576) 32,992
Adjustment in respect of previous years - -
Research and Development tax credit
Prior year adjustment on IFRS16
adoption - -
Effect of change in local corporation
tax rate - (104,867)
Deferred tax asset
not recognised - (27,623)
Deferred tax credit on losses - -
Change of tax rate for DT Asset on
Revaluation reserve recognised in OCI - (42,549)
Total tax credit / (charge)
in income statement - 124,549
======== ==========
The main rate of corporation tax will rise from 19% to 25% from
1 April 2023. On this basis deferred tax is provided at the
future rate of 25%.
EARNINGS PER SHARE
4
2022 2021
Earnings per ordinary
share is calculated as
follows:
Basic
Profit attributable to
ordinary shareholders
(GBP) 13,559 205,083
Weighted average number
of ordinary
shares
in issue 193,945,190 189,388,807
Earnings per
ordinary share 0.01 p 0.11 p
--------------- ---------------
Fully
diluted
Profit attributable to
ordinary shareholders
(GBP) 13,559 205,083
Weighted average number
of ordinary
shares
in issue 193,945,190 189,388,807
Weighted average number
of ordinary
shares
under option 17,478,866 17,478,866
Earnings per
ordinary share 0.01 p 0.10 p
=============== ===============
Basic earnings per share amounts are calculated by dividing
the profit for the year attributable to ordinary equity
holders of the Company by the weighted average number of
Ordinary shares outstanding during the year.
Diluted earnings per share is calculated by dividing the
profit attributable to ordinary equity holders of the Company
by the weighted average number of Ordinary shares outstanding
during the year plus the weighted average number of Ordinary
shares that would have been issued on the conversion of
all dilutive potential Ordinary shares into Ordinary shares.
PROPERTY, PLANT AND EQUIPMENT
5
Office
Showroom Plant & fixtures,
Freehold display machinery fittings
land and & shop and loose & IT
buildings fittings tools equipment Total
Cost or Revaluation GBP GBP GBP GBP GBP
At 1 July 2020 2,685,886 2,236,772 563,899 307,266 5,793,823
Additions - 8,644 703 17,970 27,317
Disposals - (4,147) (33,974) (1,104) (39,225)
Utilise Oxford
Dilapidations (3,423) - - - (3,423)
Revaluation - - - - -
At 30 June 2021 2,682,463 2,241,269 530,628 324,132 5,778,492
---------- ----------- ---------- ---------- ----------
Additions - 35,507 17,873 39,027 92,407
Disposals - (8,005) (2,916) - (10,921)
Utilise Oxford
Dilapidations (2,679) - - - (2,679)
Revaluation 834,888 - - - 834,888
At 30 June
2022 3,514,672 2,268,771 545,585 363,159 6,692,187
---------- ----------- ---------- ---------- ----------
Depreciation and
impairment
At 1 July 2020 789,682 1,639,632 327,942 245,692 3,002,948
Charge for
the
year 23,273 97,239 46,529 20,506 187,547
Revaluation - - - - -
Disposals (2,567) (472) (36,913) (1,104) (41,056)
At 30 June 2021 810,388 1,736,399 337,558 265,094 3,149,439
---------- ----------- ---------- ---------- ----------
Charge for
the
year 23,273 83,266 43,031 24,769 174,339
Revaluation 250,902 - - - 250,902
Disposals (1,342) (6,055) (435) - (7,832)
At 30 June
2022 1,083,221 1,813,610 380,154 289,863 3,566,848
---------- ----------- ---------- ---------- ----------
-
Net book value
At 30 June
2022 2,431,451 455,161 165,431 73,296 3,125,339
========== =========== ========== ========== ==========
At 30 June 2021 1,872,075 504,870 193,070 59,038 2,629,053
========== =========== ========== ========== ==========
The freehold land element of freehold land and buildings
which was not depreciated was GBP503,624 (2021 - GBP503,624).
The net book value of items held under finance leases was
GBP81,068 (30 June 2021: GBP93,512). The depreciation charge
for items held under finance leases is shown in note 4 of
the financial statements.
Land and buildings classified as property, plant and equipment
were valued as at 30 June 2022 using the market approach
carried out by external independent qualified valuers.
The valuation techniques are consistent with the principles
in IFRS 13 and the fair value measurement of each property
has been classified as Level 2 in the fair value hierarchy.
There were no changes to the valuation techniques during
the period. The fair value measurement is based on the above
items' highest and best use, which does not differ from their
actual use. Had the revalued properties been measured on
a historical cost basis, their net book value would have
been 2022: GBP1,165,527 (2021: GBP1,190,549). The revaluation
surplus (gross of tax) amounted to GBP1,276,463 (2021: GBP692,477).
BORROWINGS
6
2022 2021
GBP GBP
Loans 1,079,000 1,079,000
Finance lease
liabilities 36,761 58,146
---------- ------------
1,115,761 1,137,146
========== ============
Presented in the
balance sheet as:
Lease liabilities
- current 279,798 264,168
Borrowings -
current - -
Borrowings -
non-current 1,115,761 1,137,146
---------- ------------
1,395,559 1,401,314
========== ============
(a) Bank & other
borrowings
Analysis of bank
loan repayments:
In one year
or less - -
In more than one
year but not
more than
two years - -
In more than two
years but not
more than
five years - -
In more than
five years 1,079,000 1,079,000
1,079,000 1,079,000
========== ============
The loan is secured by a legal charge over the Company's freehold
properties at Park Street, Hungerford, Berkshire and Grove
Business Park, Downsview Road, Wantage, Oxfordshire. The interest
only loan facility has an interest rate of 10.55% above base
rate with a minimum rate of 10.8% per annum, payable monthly
on drawn down funds. In case of default, an additional 7.2%
interest would be payable under the loan.
2022 2021
GBP GBP
(b) Finance lease
liabilities
Gross nance lease liabilities
-
minimum lease payments:
In one year
or less 23,883 21,385
Between one and five years 12,878 36,761
More than five years - -
36,761 58,146
---------- ----------------------
Future finance charges
on finance lease liabilities (2,966) (8,065)
Present value of finance
lease liabilities 33,795 50,081
========== ======================
Future finance charges on finance lease liabilities are analysed
as follows:
2022 2021
GBP GBP
In one year or less (2,601) (5,099)
Between one and five years (365) (2,966)
(2,966) (8,065)
========== ======================
Finance lease liabilities are effectively secured as the
rights to the leased asset revert to the lessor in the event
of default.
PROVISIONS
7
Warranty Dilapidations Total
provision provision
GBP GBP
At 1 July
2020 57,575 59,478 117,053
Arising during the
year - - -
Utilised during the
year (31,000) (3,423) (34,423)
At 30 June 2021 26,575 56,055 82,630
----------- -------------- ---------- -----------
Arising during the
period 5,000 - 5,000
Utilised during the
period (11,575) - (11,575)
At 30 June 2022 20,000 56,055 76,055
=========== ============== ========== ===========
2022 2021
GBP GBP
Current 23,423 29,998
Non-Current 52,632 52,632
76,055 82,630
============== ===========
Warranty provision
The Company makes provision for potential future warranty
claims on kitchens & bedrooms sold. This provision is reviewed
and adjusted annually based on the levels of turnover achieved
and the claims recorded in the same period.
Dilapidations provision
The Company makes such provision for dilapidations relating
to its leasehold showroom estate as it considers necessary
based on the length of the remaining term for each showroom
& the future plans for each showroom. Based on this, experience
of exiting previous showrooms and industry averages, Management
have estimated that a provision of GBP5 per square foot will
give a reasonable estimate of any futures costs. On exit
from a showroom, once the costs have been finalised and the
showroom exited, the provision would be released.
SHARE BASED PAYMENTS
8
2022 2021
GBP GBP
Share based payments
expense - 4,051
-------------- ---------- --------------
The charge relates entirely to equity-settled share based
payment transactions.
On 25 March 2019 the Company granted options over 26,215,931
ordinary shares of 0.1 pence each in the Company ("Ordinary
Shares") at an exercise price of 1 pence per Ordinary Share
to all employees and Directors of the Company under the Company's
Unapproved and EMI Share Option Plan ("Option Plan").
Performance conditions apply to the vesting of options under
the Option Plan that are linked to the Company's future profit
and share price performance. In addition, the Option Plan
includes a hurdle criteria which stipulates that no Ordinary
Shares under the share price performance criteria will vest
until the share price of an Ordinary Share reaches 3 pence.
The Option Plan was approved by shareholders at the 2018
Annual General Meeting and the principal terms of the Option
Plan were summarised in Appendix 1 to the 2018 Notice of AGM
available on the Company's website www.john-lewis.co.uk .
The Option Plan was approved by shareholders at the Company's
Annual General Meeting on 11 December 2018 . The Company has
calculated charges for the share option awards using Monte
Carlo and Binomial models. Volatility and risk free rates
have been calculated for each share option award based on
expected volatility over the vesting period and current risk
free rates at the time of each award. Volatility assumptions
are based on historic volatility for the Company's share price
over 4 years. Assumptions for future profitability have been
based on management estimates.
The performance conditions attached to the share options are
as follows:
AIM listed share price (per Ordinary Percentage of the Award
Share) which vests
---------------------------------------
> GBP0.03 9.375%
> GBP0.04 9.375%
> GBP0.05 9.375%
> GBP0.06 9.375%
> GBP0.07 9.375%
> GBP0.08 9.375%
> GBP0.09 9.375%
> GBP0.10 9.375%
--------------------------------------------------------------- ---------------------------------------
If the AIM listed share price has reached GBP0.03 or higher
--------------------------------------------------------------------------------------------------------
Profit before Tax (in any 12-month Percentage of the Award
statutory accounting period) which vests
--------------------------------------------------------------- ---------------------------------------
> GBP200k 5.00%
> GBP400k 5.00%
> GBP500k 5.00%
> GBP600k 5.00%
> GBP700k 5.00%
--------------------------------------------------------------- ---------------------------------------
Assumptions used in the valuation of share option awards
during the year were as follows:
IFRS2
Share price fair value
at date of Risk Option per share
Award award / exercise Expected free Expected life in option
date price (pence) volatility rate dividends years (pence)
25 March 0.125
2019 0.6 / 1.0 50% 1.02% - 10 - 0.229
Share and share option awards outstanding
The share options awarded during the year under the Option
Plan were as follows:
Scheme Exercise B / Fwd Number Number Number C / Fwd
and price 1 July granted forfeited exercised 30 June
date 2021 2022
of award
------------- ------------------ ----------- -------------- ----------
Option
Plan
25 March
2019
Vesting
date is
variable
but no
less then
2 years 1 pence 17,112,673 - 3,529,768 - 13,582,905
---------------- ------------ --- ------------- ----------- -------------- ---------- -----------
RELATED PARTY TRANSACTIONS
9
Ultimate Controlling
Party
Shareholders with a substantial interest in the Company
are outlined on over 3% of the current share capital are
outlined on page 12 of the financial statements.
Transactions
During the year the Company entered into transactions,
in the ordinary course of business, with other related
parties. The transactions with Directors of the Company
are disclosed in notes 5 and 24 of the financial statements.
Transactions with key management personnel (comprising
the Directors and key members of management) are disclosed
below:
Transaction with Directors
On 30 December 2021 Alan Charlton purchased 2,500,000
shares on the open market.
Compensation of key management
personnel (including Directors)
2022 2021
GBP GBP
Short term employee
benefits 202,236 167,350
Share-based payments - 4,051
202,236 171,401
========== ==========
PUBLICATION OF ACCOUNTS AND ANNUAL GENERAL MEETING
10
The Annual Report and Accounts for the year ended 30 June
2022 will be sent to shareholders shortly and will be
made available on the Company's website. The Annual General
Meeting of the Company will take place at the offices
of John Lewis of Hungerford plc, Grove Business Park,
Downsview Road, Wantage, Oxfordshire OX12 9FA at 2.00pm
on Wednesday 18 January 2023.
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END
FR FFUEEEEESESE
(END) Dow Jones Newswires
December 13, 2022 02:00 ET (07:00 GMT)
John Lewis Of Hungerford (LSE:JLH)
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