TIDMBARK
RNS Number : 2605L
Barkby Group PLC
30 December 2022
30 December 2022
Barkby Group PLC
("Barkby", the "Group" or the "Company")
Final results for the year ended 2 July 2022
Barkby Group PLC, the diversified business group, announces its
audited results for the period to 2 July 2022.
Charles Dickson, Executive Chairman of Barkby, commented:
"We listed on AIM in January 2020, just before the start of the
COVID-19 pandemic and have had our first two years as a listed
business heavily disrupted by this.
"As we emerged from this period, we have refocused our resources
on scaling our existing and established real estate business, with
a particular focus on ESG compliant roadside developments in the
form of drive-thru's, trade counter, last mile logistics,
convenience food and light industrial commercial buildings. As
previously announced, we are in the process of exiting our non-core
assets and businesses over the coming months in order to focus on
the real estate and pubs businesses."
Operational Highlights
Real Estate
-- The focus of the Group is to build and scale a high-quality,
substantial portfolio of modern, ESG compliant Roadside real estate
investments.
-- Construction commenced at our commercial schemes at Wellingborough and Maldon.
-- Wellingborough is scheduled to complete in January 2023 and
it is our intention to hold the development on our balance sheet as
an investment as we grow a high-quality commercial property
portfolio. The total contracted rent is GBP234,000 per annum with
contracted tenants being Greggs Plc, Formula One Autocentres Ltd,
City Plumbing Supplies Holdings Ltd and C. Brewers & Sons
Ltd.
-- Maldon is scheduled to complete construction by April 2023,
we will also hold this development on our balance sheet. The total
expected rent is GBP268,000 per annum with contracted tenants being
Costa Coffee Ltd, Formula One Autocentres Ltd, Toolstation Ltd with
the remaining unit under offer.
-- Sold land at Saffron Waldon for GBP3.5m following a series of
successful planning applications since the land was acquired,
resulting in a profit of GBP2.3m.
Barkby Pub Company
-- During the year we increased our estate with the freehold
acquisition of The Coach & Horses and post year end we added
the tenancy of The Eliot Arms, bringing the estate to nine pubs
with 75 bedrooms.
-- Revenue increased by GBP3.3m to GBP6.0m, with an underlying
operating loss of GBP0.2m excluding depreciation, amortisation,
goodwill impairment and interest expense.
-- The year was partially disrupted by COVID-19, especially
during the important 2021 Christmas period, which was impacted by
the Omicron variant.
-- Underlying demand for Barkby's premium pub experience and
accommodation offer remains strong despite cost of living
pressures.
-- Majority of our energy contracts were fixed in December 2020
until December 2023, providing protection from the energy cost
pressures facing the industry.
Investments
-- Due to its focus on Real Estate and pubs, Barkby is in the
process of divesting of its portfolio of investment companies and
expects to dispose of Workshop Coffee, Centurian Automotive and
Cambridge Sleep sciences in 2023.
-- Workshop Coffee, Cambridge Sleep Sciences and Centurian
Automotive have been accounted for as discontinued operations
generating a loss of GBP3.9m during the financial year.
-- Barkby sold its interest in Verso Biosense for GBP2.6m during
the year, generating a small profit.
Outlook
-- Going forward, we intend to significantly scale our focused
Roadside commercial property business and we are in the process of
exploring potential financing solutions.
-- We are seeing a significant opportunity to scale our
pipeline, and are in negotiations on a number of new Roadside
developments and investments. We are targeting increasing our
ongoing pipeline to GBP200m.
-- Despite input cost pressures and lower customer disposable
income, we remain confident that we have a strong core portfolio to
grow our pub business.
-- The Group has improved liquidity following the increase in
the Tarncourt facility from GBP5m to GBP12m, as also announced
today.
Financial Highlights
2022 2021 Change
Revenue from continuing operations*
(GBPm) 15.1 2.8 +12.3
------ ------ -------
Operating profit from continuing
operations before impairment
of goodwill* (GBPm) 1.6 -2.0 +3.6
------ ------ -------
Loss after tax** (GBPm) -9.5 -4.4 -5.1
------ ------ -------
Net -decrease/increase in
cash (GBPm) -0.4 1.0 -1.4
------ ------ -------
Basic earnings per share
(pence) -6.68 -3.09 -3.59
------ ------ -------
Net assets/-liabilities per
share (pence) -5.37 0.60 -5.97
------ ------ -------
* Continuing operations include Real Estate and Barkby Pubs.
Barkby has resolved to sell Workshop Coffee, Cambridge Sleep
Sciences and Centurian Automotive, therefore these businesses have
been presented as discontinued operations.
** The loss after tax of GBP9.5m includes an impairment charge
of Intangible Goodwill of GBP6.3m and a loss from discontinued
operations of GBP3.9m.
Annual Report
In accordance with AIM Rule 20, the annual report is available
to view on the Company's website:
https://www.barkbygroup.com/investors/ .
Enquiries:
Barkby Group PLC
Charles Dickson, Executive Chairman
Douglas Benzie, Chief Financial Officer
+44 (0) 20 7220
finnCap Ltd (Nomad and Broker) 0500
Carl Holmes/Simon Hicks (corporate finance)
Tim Redfern (ECM)
+44 (0) 20 3757
Camarco (Financial PR) 4994
Jennifer Renwick/Phoebe Pugh
Notes to editors
Barkby Group PLC is focused on commercial property development
and investment, alongside its pubs business. Barkby is in the
process of disposing of its Investments (comprising of Workshop
Coffee, Centurian Automotive and Cambridge Sleep Sciences).
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the company's obligations under Article 17 of MAR.
Chairman's Statement
I am pleased to report that Barkby has enjoyed a record year in
terms of revenue and EBITDA, with the
Group benefitting from the easing of COVID restrictions and a
resulting swing back to EBITDA profitability.
Strategic Focus
We listed on AIM in January 2020, just before the start of the
COVID-19 pandemic and have had our first two years as a listed
business heavily disrupted by this.
As we emerged from this period, we refocused our resources on
scaling our existing and established real estate business, with a
particular focus on ESG compliant roadside developments in the form
of drive-thru's, trade counter, last mile logistics, convenience
food and light industrial commercial buildings. To streamline this
focus, we are in the process of exiting our non-core assets and
businesses over the coming months.
Our property development business has been active, with our
Wellingborough development nearing completion and construction
under way at Maldon. We have also exchanged contracts to acquire
land for a 30,000 sq ft development in Swindon. During the year we
sold a residential development site in Saffron Walden for GBP3.5m,
realising a profit of GBP2.3m.
Our pub business has now grown to nine sites, including the
acquisition of the freehold of The Coach & Horses in
Chiselhampton and the post period end acquisition of the tenancy of
The Eliot Arms. This pub has been sympathetically refurbished and
offers customers a high-class drinking, dining and sleeping
experience.
Due to wider macroeconomic factors, we have significantly
increased the cost of capital assumption used in our impairment
tests. This has resulted in the intangible goodwill that arose on
the acquisition of our pub business being written down, despite a
positive performance from the underlying business in the year.
Outlook
Despite further economic challenges, we believe there is a
strong opportunity to expand our commercial property expertise to
become a successful Roadside real estate asset manager. This
strategy would see Barkby retain its own commercial property
developments on balance sheet as well as identifying buying
opportunities in the changing UK property investment market.
Underlying demand for our traditional pub experience also
remains strong, despite cost of living and input cost pressures. We
believe there will be good opportunities to acquire further pubs
that are within our operating criteria, and are considering the
future strategy for Barkby Pubs.
Finally, I would once again like to recognise our most important
attribute, our people, who have demonstrated solidarity and
commitment across the group. Despite substantial changes within the
business, and the impact of events outside our control, I have been
hugely impressed and proud of the attitudes shown across all Barkby
teams. I have full belief and confidence in our teams and their
ability to deliver the group's potential for success.
Business and Financial Review
The commercial property development pipeline progressed
significantly during the year, with two schemes now under
construction and the completion of the sale of a residential site
for GBP3.5m.
Barkby has traditionally maintained a development pipeline of at
least GBP30m gross development value. We are now looking to
significantly scale our focused Roadside commercial property
business and aim to increase our pipeline to GBP200m over the next
12 months.
As we are in the process of restructuring the Group, including
the disposal of Centurian Automotive, Workshop Coffee and Cambridge
Sleep sciences, we have also reviewed our support functions to
ensure they are appropriate for the group going forward.
Our pub business acquired one new site during the year and has
subsequently signed a tenancy agreement for the Eliot Arms in South
Cerney. This brings the total number of pubs operated to nine.
Transaction levels have remained in line with expectations; however
we have had to balance rising input costs, labour market shortages
and selling prices against a delicate background of consumer
confidence.
Property Development
Barkby Real Estate sources and develops commercial property
schemes predominantly based in the South-East of England. Barkby
specialises in roadside developments including mixed-use trade and
retail parks with retail warehouses, logistics, storage,
industrial, leisure and quick food service.
COVID-19 caused delays to the commencement of some planned
developments, with tenants taking longer than normal to agree
commercial terms. More recently, land acquisition and development
deals
have now been impacted by macroeconomic conditions, including an
increase in interest rates, inflation and concerns that the UK will
experience a short recession. However, this has created some
excellent acquisition opportunities and there remains a strong
interest in the Group's upcoming schemes from tenants.
The Government has published proposals for reform of the land
use planning system. The most significant changes aim to improve
the slow and complex system of local development plans. We believe
that future legislation has the potential to reduce development
timeframe and associated costs.
COVID-19 accelerated some of the existing underlying real estate
trends, such as increased online delivery and working from home.
Demand for logistics space has also been significant. Whilst this
has generated changes in tenant demand in some sectors, others have
remained relatively insulated or seen growth.
Due to our flexible, tenant-led approach, Barkby can focus its
activity to match tenant demand. We have
seen a shift away from traditional retail parks, however demand
from trade and quick service food tenants has been robust.
We have particularly strong experience in roadside retail
developments, which has been the focus of recent developments and
we believe provides a strong pipeline of opportunities.
Each development project takes approximately 18-24 months to
complete, therefore many tenants adopt long-term views in their
expansion strategies.
Barkby follows a capex light business model to de-risk the
development process and ensure clear financial visibility over the
lifecycle of each scheme. Barkby does not purchase land
speculatively, it acquires land under purchase agreements that are
subject to obtaining the required planning consents for the
scheme.
Our tenant-led approach built on established relationships with
a broad range of national occupiers and other key tenants. This
gives clear visibility of potential tenant's geographical growth
strategies and allows Barkby to confirm tenant interest in a
proposed scheme at an early stage.
A pre-let threshold of 70 per cent is targeted before commencing
construction. By way of example, typical tenants of Barkby schemes
include Aldi Stores Limited, Greggs Plc, Costa Limited, MKM
Building Supplies Limited, Travis Perkins plc, Halfords Group
Plc.
In line with its tenant-led approach, Barkby adopts a pro-active
approach to land acquisitions. This approach can require a
land-assembly of multiple parcels of land and often includes
off-market purchases.
Once a contracted development site has been obtained, planning
applications are submitted and prospective tenants execute
'agreement to lease' documentation. After planning has been granted
and the future tenants are legally committed to the scheme
developments are often forward funded with institutional buyers,
who fund costs incurred to date and commit to fully fund
construction through to completion via monthly payments. The scheme
is then built on a fixed price contract. In some instances,
development finance is used before selling the completed
scheme.
The completed scheme is then delivered to the tenant to fit out
at practical completion. Previously, Barkby would sell the scheme
to an institutional buyer at this point. However, Barkby is now
focusing on retaining its developments and building a portfolio of
high quality roadside retail investments. Barkby's projects target
a gross development value of between GBP3.0m and GBP20.0m and a
minimum EBITDA margin of 20 per cent on each project. Barkby has
traditionally maintained a development pipeline totalling at least
GBP30m gross development value. We are now looking to significantly
scale our focused Roadside commercial property business and will
aim to increase our pipeline to GBP200m over the next 12
months.
Revenue and costs are recognised across the life of each scheme
and can often span multiple financial
periods. Following the acquisition of land, successful planning
applications and contractual engagement
with tenants during the financial year we recognised an uplift
in the value of our development investment properties by
GBP1.2m.
We also sold land at Saffron Waldon following a series of
successful planning applications since the land was acquired. The
sale was completed for GBP3.5m, resulting in a profit of
GBP2.3m.
Barkby Pubs
Barkby operates premium pubs with rooms located in the
Cotswolds, Oxfordshire and West Sussex. This segment of the market
maintains a traditional commitment and passion for high quality pub
experiences, therefore our customer transaction levels and gross
spend has remained robust, alongside the demand for stays in
attractive properties that are located in areas of natural
beauty.
Barkby Pubs' proposition is led by excellence in food and
service, showcasing the best of English produce, alongside a
passion for creating memories and delivering incredible
hospitality. Barkby Pubs seeks to create premium individual pubs
with accommodation to address the trend away from branded pubs and
large hotels. Barkby offers market-leading pub food and exemplary
service, providing classic and sophisticated modern British cuisine
with seasonal and artisan ingredients alongside local produce.
Our focus is to maintain the individual character and uniqueness
of each location, whilst implementing operational best practice. In
the next 12 months, we are focused on improving labour planning and
efficiency as well stock control processes and reporting systems.
These activities are expected to increase the underlying
profitability across the estate.
Following the opening of the Coach & Horses during the year
and the Eliot Arms since year end, Barkby
Pubs now operates nine premises, with a total of 75 rooms. Each
pub has its own website to take bookings, display menus, advertise
upcoming events and promote their unique atmosphere. Marketing is
managed centrally with regular newsletters and local media as well
as increased social media presence and digital storytelling to
create an authentic connection with our customers.
COVID-19 continued to impact this financial year, with the
Omicron variant having a significant impact on the key Christmas
trade period. However, there have not been any further lockdowns or
enforced closure for some time and therefore trade is returning to
more normalised levels. The rural location of our pubs has provided
some insulation from the industrial action and train strikes that
have impacted city-centre venues.
Geopolitical and macroeconomic factors have had a significant
impact on input costs, with increases in food and utility costs,
alongside a shortage of hospitality workers, especially in relation
to skilled back of house roles. At the same time, cost of living
pressures have limited the extent to which consumer prices can be
increased, and we have maintained our commitment to quality and
value in our menu and pricing decisions.
Revenue increased by GBP3.3m to GBP6.0m in 2022, with an
underlying operating loss of GBP0.2m excluding depreciation,
amortisation, goodwill impairment and interest expense (2021: loss
of GBP0.1m). This is predominantly due to the impact of new site
openings, which take a period of time to reach maturity and
generate target operating profits. The results have also been
impacted by spikes in input costs and disruption in labour,
resulting in the temporary employment of agency workers. There is a
clear plan to achieve target operating margins in the coming
period.
We continue to look for premium pubs with rooms in our target
geographies. It is our intention to grow the portfolio to 20 pubs
by the end of the 2025 financial year.
Investments
Barkby's diversification has provided elements of value across
the Group, especially during the disruption caused by COVID-19.
However, the Board believes that there are improved immediate
opportunities in the property development business and has
therefore intends to focus Group resources to maximise these
opportunities.
Due to its focus on Real Estate and pubs, Barkby is in the
process of divesting of its portfolio of investment companies. Its
investment in Verso Biosense was disposed of during the financial
year, and it expects to dispose of Workshop Coffee, Centurian
Automotive and Cambridge Sleep Sciences in 2023.
As a result of this decision, Workshop Coffee, Cambridge Sleep
Sciences and Centurian Automotive have been accounted for as a
disposal group and their financial result has been presented as
discontinued operations in the Profit & Loss account. The
disposal group generated a loss of GBP3.9m during the financial
year.
Barkby also sold its interest in Verso Biosense for GBP2.6m
during the year, generating a small profit.
Liquidity and Going Concern
Following the impact of COVID-19 and a re-assessment of
strategic focus and opportunities, Barkby Group's strategy is now
focused on the opportunities that it believes are the most cash
generative in the long term, Real Estate and Barkby Pubs. This
significantly reduces the cash investment previously required by
the early-stage growth business Cambridge Sleep Sciences, and the
cash outflows of Centurian Automotive and Workshop Coffee.
Accordingly, Cambridge Sleep Sciences, Centurian Automotive and
Workshop Coffee have been presented as discontinued operations. The
continuing operations of Real Estate and Barkby Pubs generated
positive Profit After Tax of GBP690,000 during the period excluding
a one-off charge for impairment of goodwill.
The Board has managed cash tightly despite the disruption caused
by COVID-19 over the last two accounting periods. Cash headroom has
been increased by refinancing the GBP5m Tarncourt facility into a
new GBP12m facility with an extended expiry date of 30 June 2024,
as also announced today.
The Group has net cash available of c. GBP7m, including the
revised Tarncourt facility, as of December 2022. In addition, the
Board have taken the steps of consulting with major shareholders
regarding a potential equity raise and our major shareholders have
confirmed their continued support should this become necessary.
Going forward, it is our intention to retain our property
developments. This will strengthen the Group's Balance Sheet with
high quality investment property assets and provide a reliable and
recurring cash flow going forward. This also gives Barkby the
opportunity to sell these assets to generate positive cash flow if
required.
Despite significant progress being made, the disposal of the
discontinued operations has not yet completed, therefore the board
has prepared a profitability and cash flow forecast to December
2023 that includes all Group companies and reflects a severe but
plausible downturn scenario. We expect all discontinued operations
to be fully disposed of by the end of the current financial
year.
A key feature of Barkby's businesses is that they have a low
fixed cost base. Our Real Estate Business and Group function is
predominantly flexible costs with no central premises and limited
fixed overheads. Our pub workforce is predominantly comprised of
employees on flexible contracts.
Barkby is in the process of a strategic restructuring, which
will result in its focus being solely on its most cash generative
business units. In addition, Barkby will hold its commercial
property developments going forward, providing a reliable source of
recurring income and cash flow, as well as high quality investment
property assets with equity value that can be unlocked via sale if
needed. Despite the disruption of the last few years and the
current macro-economic uncertainty, management considers that
Barkby's pub business is well positioned for a return to
profitability and that the Group is in a strong position to benefit
from long term customer loyalty and demand. Based on its
profitability and cash flow forecasts that incorporate assumptions
that reflect a severe but plausible downturn scenario the directors
consider going concern basis of preparation to be an appropriate
basis for the preparation of these financial statements.
Group statement of profit or loss and other
comprehensive income
For the year ended 2 July 2022
Year Year ended
ended 1 July
2 July 2021
2022
GBP'000s GBP'000s
Continuing operations
Revenue 10,298 2,824
Cost of sales -5,846 -2,210
=========== =============
Gross profit 4,452 614
Other operating income 83 289
Administrative expenses -4,182 -2,865
Movement in fair values 1,250 -
=========== =============
Profit/(loss) from continuing operations
before impairment of goodwill 1,603 -1,962
Impairment of goodwill -6,296 -
=========== =============
Loss from continuing operations -4,693 -1,962
Finance expense -989 -599
Finance income 55 40
=========== =============
Loss from continuing operations before tax -5,627 -2,521
Income tax credit 21 -
=========== =============
Loss for the year from continuing operations -5,606 -2,521
Discontinued operations
Loss for the year from discontinued operations -3,908 -1,857
Loss and total comprehensive income for the
period -9,514 -4,378
Loss for the year is attributable to:
Non-controlling interest included in discontinued
operations -190 -164
Owners of Barkby Group Plc -9,324 -4,214
=========== =============
-9,514 -4,378
Pence Pence
Loss per share for profit attributable to
the owners of Barkby Group Plc
Basic loss per share from continuing operations -4.02 -1.85
Basic loss per share from discontinued operations -2.66 -1.24
-6.68 -3.09
All of the loss of the year is from continuing
operations
Group consolidated statement of financial
position
As at 2 July 2022
As at As at
2 July 1 July
2022 2021
GBP'000s GBP'000s
Assets
Non-current assets
Property, plant and equipment 2,454 1,480
Intangible assets 31 8,503
Right-of-use assets 2,539 2,977
Investment property 4,652 -
Investments - 2,542
Other non-current assets 83 219
Total non-current assets 9,759 15,721
============= ===========
Current assets
Inventory 1,883 6,096
Trade and other receivables 648 220
Contract assets 13 -
Prepayments 262 380
Other current assets 39 84
Cash and cash equivalents 33 84
Total current assets 2,878 6,864
============= ===========
Assets of disposal groups held for sale 5,060 -
Total current assets 7,938 6,864
============= ===========
Total assets 17,697 22,585
============= ===========
Liabilities
Current liabilities
Trade payables -2,136 -1,826
Borrowings -4,016 -7,395
Lease liabilities -491 -531
Income tax - -25
Other current liabilities -5,350 -4,347
Total current liabilities -11,993 -14,124
============= ===========
Liabilities of disposal groups held for -7,077 -
sale
Total current liabilities -19,070 -14,124
============= ===========
Non-current liabilities
Borrowings -3,708 -4,652
Lease liabilities -2,571 -2,938
Provisions -48 -48
Total non-current liabilities -6,327 -7,638
============= ===========
Total liabilities -25,397 -21,762
============= ===========
Net assets/(liabilities) -7,700 823
============= ===========
Equity
Share capital 1,233 1,179
Share premium 5,430 4,493
Merger reserve -422 -422
------------- -----------
Issued equity 6,241 5,250
Retained losses -14,655 -4,219
Fair value reserve 1,250 -
Equity attributable to the owners of
Barkby Group Plc -7,164 1,031
Non-controlling interest -536 -208
Total equity -7,700 823
============= ===========
Group statement of cash flows
For the year ended 2 July 2022
Year ended Year ended
2 July 1 July
2022 2021
GBP'000s GBP'000s
Cash flows from operating activities
Loss before tax from continuing operations -5,627 -2,521
Loss before tax from discontinued operations -3,991 -1,857
----------- -----------
Loss before tax -9,618 -4,378
Adjustments to reconcile loss before tax
to net cash flows
Depreciation of property, plant and equipment
and right-of-use assets 789 774
Amortisation of intangible assets 169 137
Impairment of goodwill 8,037 -
Loss on disposal of property, plant and equipment 166 -
Fair value movement in investment property -1,250 -
Finance income -55 -40
Finance expense 1551 978
Working capital changes
(Increase)/decrease in trade receivables,
contract assets and prepayments 91 5,630
Decrease/(Increase) in inventories 694 -1,870
Increase in trade and other payables 3,374 2,517
----------- -----------
Total working capital changes 4,159 6,277
Interest paid -514 -720
Interest received 55 24
Income tax paid -25 -82
----------- -----------
-484 -778
Net cash flow from operating activities 3,464 2,970
----------- -----------
Cash flows from investing activities
Acquisition of subsidiaries, net of cash acquired - -55
Purchase of investments - -500
Disposal of investments 1,920 -
Purchase of investment property -3,402 -
Purchase of property, plant and equipment -1,628 -264
Purchase of intangible assets -38 -285
----------- -----------
Net cash used in investing activities -3,148 -1,104
=========== -----------
Cash flows from financing activities
Proceeds from issue of shares 100 125
Proceeds from borrowings 9,424 14,472
Repayment of borrowings -9,666 -15,200
Repayment of lease liabilities -581 -310
Net cash used in financing activities -723 -913
=========== ===========
Net increase/(decrease) in cash and cash equivalents -407 953
Cash and cash equivalents at the beginning
of the financial year -221 -1,174
===========
Cash and cash equivalents at the end of the
financial year -628 -221
=========== ===========
Cash and cash equivalents of continuing operations
at the end of the financial year -617 -221
Cash and cash equivalents of discontinued -
operations at the end of the financial year -11
Statement of changes
in equity
For the year ended
2 July 2022
Share Share Merger Fair Profit Non-controlling Total
capital premium Reserve value and loss interest equity
reserve reserve
GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s
Balance at 1 July
2021 1,179 4,493 -422 - -4,219 -208 823
Loss after income
tax and total comprehensive
income for the period - - - - -9,324 -190 -9,514
Transfer to fair value
reserve - - - 1,250 -1,250 - -
Transactions with
owners in their capacity
as owners:
Shares issued to settle
deferred and contingent
consideration 18 283 - - - - 301
Shares issued to settle
liabilities 9 148 - - - - 157
Restricted shares
issued 7 126 - - - - 133
Increase in non-controlling
interest - - - - 138 -138 -
Shares issued for
cash proceeds 5 95 - - - - 100
Shares issued to cancel
interest and debt 15 285 - - - - 300
Balance at 2 July
2022 1,233 5,430 -422 1,250 -14,655 -536 -7,700
========= ========= ========= ========= ========== ================ =========
Notes to the financial statements
Note 1. Company information
The consolidated financial statements of Barkby Group Plc for
the year ended 2 July 2022 were authorised for issue in accordance
with a resolution of the directors on 29 December 2022. Barkby
Group Plc is a public limited company incorporated and domiciled in
the UK. The company's number is 07139678 and the registered office
is located at 115b Innovation Drive, Milton, Abingdon, Oxfordshire
OX14 4RZ.
The Group's principal continuing activities consist of real
estate investment and development and Barkby Pubs. During the year
ended 2 July 2022, the Group decided to dispose of its Investments
businesses consisting of Workshop Coffee (a speciality coffee
roaster), Centurian Automotive (a premium used car dealership) and
Cambridge Sleep Sciences, (manufacturer of SleepHub) which are
therefore shown as discontinued activities in these financial
statements consumer and hospitality businesses and life
sciences.
Note 2. Significant accounting policies
The principal accounting policies adopted in the preparation of
the financial statements are set out below. These policies have
been consistently applied to all the periods presented, unless
otherwise stated.
New or amended Accounting Standards and Interpretations
adopted
The Group has adopted all of the new or amended Accounting
Standards and Interpretations issued by the International
Accounting Standards Board ('IASB') that are mandatory for the
current reporting period.
Any new or amended Accounting Standards or Interpretations that
are not yet mandatory have not been early adopted.
Basis of preparation
These consolidated financial statements of Barkby Group Plc (or
"the Group") have been prepared in
accordance with UK adopted International Accounting Standards in
conformity with the requirements of the Companies Act 2006.
Accounting periods
The financial statements have been prepared covering the
financial year ended 2 July 2022, in accordance with the Group's
new policy of drawing up financial statements to the nearest
Saturday to the Group's accounting reference date of 30 June.
Previously, the Group drew up financial statements to the nearest
Thursday to 30 June. As a result the financial year consists of a
52 week and 2 day period (prior year: 52 weeks). The change to a
Saturday was as a result of outsourcing the accounting for the Pub
business, aligning the operational week with the outsourcer's
existing process.
Therefore, the Group's consolidated financial statements cover
the financial year from 2 July 2021 to 2 July 2022, with
comparative financial information covering the financial year (52
weeks) 3 July 2020 to 1 July 2021.
Historical cost convention
The financial statements have been prepared under the historical
cost convention, except for certain assets and liabilities that are
held at fair value and are detailed in the Group 's accounting
policies. The consolidated financial statements are presented in
Pounds Sterling, which is Barkby Group Plc's functional and
presentation currency and all values are rounded to the nearest
thousand (GBP'000s) unless otherwise stated.
Critical accounting estimates
The preparation of the financial statements requires the use of
certain critical accounting estimates. It also requires management
to exercise its judgement in the process of applying the Group's
accounting policies.
The areas involving a higher degree of judgement or complexity,
or areas where assumptions and estimates are significant to the
financial statements, are disclosed in note 3.
Principles of consolidation
The consolidated financial statements incorporate the assets and
liabilities of all subsidiaries of Barkby Group Plc ('company' or
'parent entity') as at 2 July 2022 and the results of all
subsidiaries for the period then ended. Barkby Group Plc and its
subsidiaries together are referred to in these financial statements
as the 'Group'.
Subsidiaries are all those entities over which the Group has
control. The Group controls an entity when the Group is exposed to,
or has rights to, variable returns from its involvement with the
entity and has the ability to affect those returns through its
power to direct the activities of the entity. Subsidiaries are
fully consolidated from the date on which control is transferred to
the Group. They are de-consolidated from the date that control
ceases.
Intercompany transactions, balances and unrealised gains on
transactions between entities in the Group are eliminated.
Unrealised losses are also eliminated unless the transaction
provides evidence of the impairment of the asset transferred.
Accounting policies of subsidiaries have been changed where
necessary to ensure consistency with the policies adopted by the
Group.
The acquisition of subsidiaries is accounted for using the
acquisition method of accounting. A change in ownership interest,
without the loss of control, is accounted for as an equity
transaction, where the difference between the consideration
transferred and the book value of the share of the non-controlling
interest acquired is recognised directly in equity attributable to
the parent.
Non-controlling interest in the results and equity of
subsidiaries are shown separately in the statement of profit or
loss and other comprehensive income, statement of financial
position and statement of changes in equity of the Group. Losses
incurred by the Group are only attributed to the non-controlling
interest to the extent to which they can be recovered from those
parties.
Discontinued operations
The Group classifies disposal group as held for sale if their
carrying values will be recovered principally through a sale
transaction rather than through their continuing use. Disposal
groups classified as held for sale are measured at the lower of
their carrying amount and fair value less costs to sell. Costs to
sell are the incremental costs directly attributable to the
disposal of a disposal group, excluding finance costs and income
tax expense.
The criteria for classifying a disposal group as held for sale
is regarding as having been met only when a sale is highly probably
and the disposal group is available for immediate sale in its
present condition. Actions required to complete the sale should
indicate that it is unlikely that significant changes to the sale
will be made or that the decision to sell will be reversed.
Management must be committed to the plan to sell the asset and the
sale is expected to be completed within one year from the date of
classification.
A disposal group qualifies as discontinued operations of it is a
component of an entity that either has been disposed of, or is
classified as held for sale and:
-- Represents a separate major line of business
-- Is part of a single co-ordinated plan to dispose of a
separate major line of business.
Discontinued operations are excluded from the results of
continuing operations and are presented as a single amount as
profit or loss after tax from discontinued operations in the
statement of profit or loss and comprehensive income. All other
notes to the financial statements include amounts for continuing
operations unless otherwise stated.
Following decisions of the Board in June 2022, the Group issued
a Trading and Strategy update announcing that the Board had
resolved to sell the Workshop Coffee, Cambridge Sleep Sciences and
Centurian Automotive businesses. The Group has therefore committed
to a plan to sell these businesses, which are available for
immediate sale and programmes to locate buyers for each business
have been initiated. The directors expect to sell the businesses
within the next financial year (ended 30 June 2023).
As a result of this announcement the financial results of the
businesses being disposed of our presented as discontinued
operations in the statement of profit or loss and total
comprehensive income, with their assets and liabilities being
presented as assets of disposal groups held for sale and
liabilities of disposal groups held for sale in the consolidated
statement of financial position.
In addition, the comparative information in the statement of
profit or loss and total comprehensive income has been re-stated to
show these businesses as discontinued for the year ended 1 July
2021.
Note 3. Post Balance Sheet Events
Tarncourt Facility
As also announced today, the Group agreed to re-finance the
existing Tarncourt Facility from GBP5m to GBP12m with expiry being
extended from 30 June 2023 to 30 June 2024.
The Board considers that no other material post balance sheet
events occurred between the end of the period and the date of
publication of this report.
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END
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