TIDMMOGP
RNS Number : 7546J
Mountfield Group plc
17 June 2014
Mountfield Group Plc
("Mountfield", the "Group" or the "Company")
FINAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2013
Mountfield, the AIM listed construction company specializing in
building and refurbishing data centres, is pleased to announce its
final results for the year ended 31 December 2013.
Contacts:
Mountfield Group Plc 01268 561 516
Graham Read, Chief Executive Officer
WH Ireland Limited (Nominated adviser) 0207 220 1666
Chris Fielding, Head of Corporate
Finance
CHAIRMAN'S REPORT
Group Highlights
I am delighted to be able to report that, having returned to
profit in 2012, the Group's turnaround gathered real momentum in
2013 and the Board is optimistic that the improvement is
sustainable.
The Group's strong performance was reflected in the substantial
improvement in net profitability of GBP765,339 against GBP218,505
in 2012, an increase of 350%. That this was coupled with a
reduction in revenue from GBP13.6m in 2012 to GBP12.3m (9.6%)
reflected the ability of the Group to be more selective in the
contracts that it took on and also delayed starts on a few
contracts. As a result the Group achieved an operating margin of
6.9%, an improvement from the 1.4% achieved in 2012. Earnings per
share increased from 0.04p in 2012 to 0.22p in 2013.
Trade receivables rose by GBP1.02m, trade and other payables
increased by GBP1.11m. Cash generated from operations was GBP979k
and cash flow improved by GBP972k.
Although the Board has indicated that, as a medium term
objective, it wishes to begin paying dividends to shareholders, it
will not be recommending the payment of a dividend this year as it
is mindful of the demands on cash flow that will be made by an
increase in the Group's trading at this stage.
The Group's recovery is the result of the hard work and
expertise of the Group's Directors, senior management and staff. On
behalf of the Board I would like to record our thanks to all of
them.
The Board's confidence as to the Group's prospects is based upon
the extent to which demand for construction services has recovered
so strongly after the period during which the work that was
available was usually offered at low or even negative margins. It
is difficult to pinpoint the time when the change in demand became
noticeable but with the benefit of hindsight we can see that the
boost in business sentiment that accompanied the London Olympics in
2012 was transformed into a sense of confidence that has
re-invigorated the construction sector as well as many other areas
of business.
These increased levels of activity enabled the Group to produce
a trading profit in 2012 after three years of losses and those
profits were further increased in 2013 as investors and developers
decided that the recovery had a secure base. This has been further
evidenced during the first part of 2014 by a level of new business
enquiries and invitations to tender in both of our divisions that
has not been seen by the Board since the middle of 2008. The Board
regards this as being a longer lasting improvement in sentiment and
confidence.
CEO's REPORT
Summary of results for 2013
-- Turnover: GBP12.312m. (2012: GBP13.557m)
-- Operating profit: GBP844,512. (2012: 189,217)
-- Operating margin: 6.9% (2012: 1.4%)
-- PBT: GBP765,339. (2012: GBP218,505)
-- EBITDA: GBP862,554. (2012: GBP207,133)
-- Earnings per share: 0.22p (2012: 0.04p)
-- Net cashflow: GBP972,224. (2013 (GBP459,012))
In October 2008 the Directors of Mountfield arranged for the
Company's shares to be listed on AIM, at a time when demand for
construction services was high and prospects for future growth and
profitability were extremely good. Although the Group's revenue
exceeded GBP20m for that year with a net profit of GBP2m, the
recession began within weeks of the listing and the Board's
strategy for growth had to be abandoned.
Over the last 18 months and as a result of the substantial
recovery both in the Group's performance and in the wider economy
the Directors have revisited that strategy, have modified it to
take account of changes that have occurred in the construction
market and, as I describe below, have now begun to implement it for
the Group.
The Group Board is currently comprised of:
Peter Jay - Executive Chairman - in addition to being Group
Chairman Peter also manages Mountfield's relationships with its
nomad, brokers and professional advisers. Peter was formerly a
corporate lawyer and a partner in DAC Beachcroft.
Graham Read - Group Chief Executive - Graham founded the
business of Mountfield Building Group in 1986 and has had over 20
years experience in the design, project management and construction
of data centres.
Andrew Collins - Executive Operations Director - Andrew is
responsible for Connaught, a specialist supplier and installer of
raised access flooring for data centres and offices. Before joining
the Group, Andrew was a divisional finance director at ISG Plc.
Adrian Sainsbury - Non-Executive Director - Adrian (who joined
the Board on 17 April 2014) is CEO of the Commercial Division of
Close Brothers and prior to that worked for a number of leading
banks in various capacities.
The Board is supported by the Chief Financial Officer, Conor
O'Mahony, who has had extensive experience in the construction
industry. Conor is responsible for overseeing the accounting and
financial functions of the Group and attends all meetings of the
Board.
Mountfield Group Companies
The Group is comprised of three separate trading companies,
Mountfield Building Group Limited ("Mountfield"), MBG Construction
Limited ("Mountfield Construction") and Connaught Access Flooring
Limited ("Connaught")
Mountfield carries out work as a main contractor with end user
clients and has since 1996, specialised in the installation of data
centres on a nationwide basis. Over the past 18 years Mountfield
has successfully completed
more than forty data centres throughout the UK for clients
including Vodafone, Cable and Wireless, Energis, Planet Online, ARK
Continuity, DataCity Exchange, Level 3 Communications, Kingston
Telecom and Colt Communications.
In addition to performing data centre works Mountfield is also
active in both building fabric repair and maintenance works on a
nationwide basis for a large proportion of the property portfolio
of a leading telecoms operator.
Using the benefit of its experience, the Company has also
offered a specialist service in fitting out and refurbishment
projects for selected clients and also partner architects and
building consultants; this new emphasis has resulted in a
substantial increase in opportunities and contracts for Mountfield
in this area, and this has been a noticeable factor in the first
half of 2014.
Mountfield Construction undertakes trade contracting contracts
for the UK's leading fitting out and refurbishment contractors,
such as ISG, Balfour Beatty, Mansell and Bouygues. It also provides
its own management and labour resources and offers trade packages,
usually on a design and build basis, to meet demanding programmes
on complex buildings projects, such as those relating to the
alteration and refurbishment of office blocks,
pharmaceutical/industrial premises and the fast track installation
of schools during restricted close down periods.
Mountfield Construction also provides the labour and management
for data centre projects carried out by Mountfield and supplements
and supports it in its main contracting role.
Particular features of the year for the Mountfield companies
were the successful completion of two large data centre projects in
Birmingham and Farnborough and the winning of a large construction
contract on a high profile building in Central London.
The business of Connaught, a provider of access flooring
solutions to main contractors and corporate end users has, since it
was acquired by the Group in 2004, supplied and installed in excess
of 8 million square feet of flooring to commercial offices and data
centre installations. It specializes in and has developed a strong
reputation for providing and installing raised access flooring
solutions designed to accommodate varying depths of floor void and
finish specifications.
The increased confidence in the construction sector since 2012
has not only seen the rebirth of the fit out market, but also the
return of the two-stage tender process which plays to Connaught's
strengths as it enables the Company to present its professionalism
and credentials and compete on quality of service, expertise and
experience, rather than simply on price.
Efforts made to source work from new areas are proving
successful and new relationships, particularly in the transport and
leisure sectors are providing a regular stream of business, with
work being gained at both Heathrow and Gatwick Airports.
A particular feature of 2013 for Connaught, was the contract won
for the provision of raised access flooring at a substantial new
data centre that was being constructed in Scandinavia. As a result
of the success of this project for Connaught it is seeking similar
overseas based data centre flooring contracts.
In 2013 Connaught also successfully completed flooring
installations for two significant data centre installations for
Mace and ISG Plc, respectively.
In addition, Connaught has established itself as one of the few
recognised specialists for the flooring elements of fitting out
contracts in commercial office space for new build and
refurbishment projects for corporate end users such as BP, HP,
Linklaters, Merrill Lynch, Reed Smith, BBC, Standard Chartered
Bank, UBS, Henderson Global, Lockton, Multiplex and Unilever.
Currently Connaught in engaged on the installation of 40,000m2 of
Flooring in a major new headquarters that is being built in the
City of London.
Finance
The Group is financed from the cash it generates from its
operations, with the support of a bank overdraft facility of
GBP600,000. To help finance the rapid expansion of business
activity as the recession came to an end the Group raised
GBP450,000 in July 2013 through a share placing to EIS funds and
professional investors.
The construction market
The recession that began at the end of 2008 had an immediate and
dramatic impact on the Group's turnover and profitability and it
was not until late 2012 that the Group noticed the first signs of
recovery and an increase in construction demand.
The Group is now experiencing levels of activity in terms of
work in hand, enquiries and tenders last seen in the middle of
2008, and it is from this that the Directors have concluded that
the activity levels will be sustained and that their optimism for
the Group's future is well based. The Board believes that the time
spent marketing and developing new business during the recession
will result in the award of contracts in addition to those that are
currently being negotiated.
The data centre market
The data centre construction market in the UK has experienced
rapid growth in demand over the last 15 years. Although the
requirement for additional major data centres has lessened, that
has not reduced the overall demand for construction services for
the data center market as continued expansion has created and will
continue to create demand for enhancements and additions to
existing structures and for smaller centres.
However, an important recent development in the data centre
construction market has been the demand for new centres (often of a
substantial size) in the Scandinavian countries where climatic
conditions help reduce the otherwise significant costs of cooling
the centres. Following the construction of a large centre in
Finland (for which Connaught supplied and installed the raised
access flooring), further centres are now being planned in other
Scandinavian countries.
The increased emphasis that will be placed on expanding the
capacity of, and upgrading, existing centres means that the
prospects for the data centre sector in terms of demand for
specialist construction services (including raised access flooring)
remains extremely good for the medium to long term.
Group's strategy
The Board has worked over the last eighteen months to ensure
that the Group's profitability is not predominantly dependent on
the demand from the data centre sector, notwithstanding its long
established presence and reputation in it. It is for this reason
that it has sought to widen the scope of the Group's activities so
that, whilst working to increase the amount of income that it
obtains from the data centre market, the Board has been aiming to
ensure that the Group has a strong presence in other areas where
the services of a company that offers high quality construction
services and project management skills are likely to be in demand.
The Directors are pleased to report that the success of this aspect
of the strategy is demonstrated by the fact that around half of the
Group's revenue is now earned from non-data centre related
activities.
The Board intends to continue to grow the Group into a highly
profitable, mid-sized operation that provides specialised
construction services in a number of diverse but related areas. The
Group's reputation has been built on its ability to undertake and
to manage specialist construction services to a high level of
quality and to deliver the completed project to the client on time.
This will remain at the core of its strategy.
Although the Group was hit hard by the recession, it survived it
without lasting damage. It did however have to put the strategy
that it had developed at the time of its listing in October 2008 on
hold for four years. The Directors are now keen to see the Group's
revenue and profits increase through organic growth and through
carefully selected acquisitions.
Organic growth will come not only from the upturn in the
marketplace and from repeat business opportunities from existing
clients, but also from the strong relationships being made with
developers and construction professionals that will in turn create
further and new opportunities.
Growth by acquisition will come from incorporating into the
Group, companies that either can be integrated into it to help
provide a commercially attractive, broader contract solution or
which increase the Group's offering in areas which it currently has
a strong track record.
Future prospects
The Board is extremely optimistic about the Group's future. Its
excellent reputation in both data centre construction and in the
provision of specialist construction services (such as office
fitting out and refurbishment) has resulted in it being a favoured
choice on projects as a main contractor or as a trade contractor on
larger contracts. It is therefore well placed to benefit from the
evident upturn in the construction market.
The Directors believe that the demand that the Group is
experiencing in terms of enquiries, invitations to tender and, most
importantly, secured orders is not of a short term nature and they
are hopeful that the rates of growth of its business will, for the
reasons mentioned in this Report, increase substantially over the
next few years.
DIRECTORS' REPORT
The directors present their annual report and audited financial
statements for the year ended 31 December 2013.
Principal activities
The principal activities of the Group are the construction and
fit-out of Data Centres for the IT industry together with office
fit-out and refurbishment.
Review of business
A detailed review of the development of the business is
contained in the Chairman's and Chief Executive's Statement.
Results
The Group made a pre-tax operating profit from continuing
operations of GBP844,512 (2012: GBP189,217) for the year ended 31
December 2013 on turnover of GBP12,312,140 (2012:
GBP13,556,918).
At 31 December 2012 the Group had net assets of GBP5,853,656
(2012: GBP4,920,311).
Dividends
The Directors do not propose payment of any dividends for the
year ended 31 December 2013.
Principal risks
The principal risks and uncertainties facing the Group relate
to:
Attraction and retention of key employees
The Group's future success is substantially dependent on the
continued services and performance of its directors, senior
management and other key personnel and its ability to continue to
attract and retain highly skilled and qualified personnel.
The senior executive directors of the business all have
significant shareholdings in the parent company and are all
permanent employees. The other senior management and key personnel,
most of whom have been with the Company for a long time, are
participating in the Company's share option scheme which was
introduced in 2012.
Economic downturn and other macroeconomic factors
The Group's success is substantially dependent on the general
level of economic activity and economic conditions in the United
Kingdom.
Many of the Group's contracts, including renewals or extensions
of previous contracts, are awarded through competitive bidding
processes. Any downturn in the economy, or any other macroeconomic
factor, either in the UK or globally, may reduce the number of
contracts coming up for bidding.
The competitive bidding processes present a number of additional
risks, including the incurring of substantial cost and managerial
time to prepare bids and proposals for contracts that the Group may
not ultimately win. The Group may face additional competition in
the bidding process either from existing competitors or new market
entrants.
The Company is seeking to mitigate its exposure to the sectors
in which it currently operates by diversifying its client base and
in particular expanding into closely aligned areas of activity. It
is also seeking to diversify by modest investment in new businesses
in the same sector.
Reliance on key customers and clients
The business of the Group is dependent upon the continuing
contracts that it has, and relationships that it has developed,
with certain customers.
Whilst signed contracts are in place with key customers, the
successful completion and timing of contracted projects are not
guaranteed and are susceptible to external factors outside of the
control of the Group. Similarly, contracted projects may in some
circumstances be susceptible to delays or variation by customers or
be affected by unforeseen changes in circumstances relating to the
market, technology, legislation, economic or other business
factors. This may affect the cashflow and subsequent performance of
the Group.
Whilst continuing to work with a well established client base,
the Group is seeking to diversify through identifying other
potential clients for its core Data Centre work. It is also
attempting to exploit its core competencies by building links with
developers which require contractors with similar skills to work on
non Data Centre related projects.
Reliance on Subcontractors
The Group utilises subcontractors on a project-by-project basis
to meet contractual obligations. Such projects will rely on the
subcontractors performing their duties and obligations, not only in
terms of timely delivery but also in terms of their performance
obligations. Any such non-performance may result in time and cost
over-runs on the Group's projects and reduce the value of its
returns.
Subcontractors are vetted by senior management and normally
engaged to work on closely defined and managed aspects of
contracts. Most subcontractors have a long standing trading history
with the Group.
Health and safety
The Group undertakes Construction activities, often working
within difficult conditions and with heavy machinery which if
improperly used could result in personal injury or in extreme
cases, fatalities.
The Group takes the health and safety of its employees and
clients very seriously and employs Health and Safety advisors on
all significant contracts. It also has a firm of Health and Safety
Advisors with whom it consults on a regular basis.
Key performance indicators
The Directors use a number of performance indicators which are
used to manage the business but, as with most businesses the focus
in the Statement of Comprehensive Income at the top level is on
sales, margins, staff numbers and overheads compared to budget and
the prior year. In the Statement of Financial Position the focus is
on managing working capital.
Financial instruments
Details of the Group's financial risk management objectives and
policies are included in note 19 to the financial statements.
Directors
The Directors who served during the year were:
P H Jay
G J Read
A J Collins
T Spanner (resigned 1 August 2013)
Charitable Donations
During the year the Group made charitable donations totalling
GBP2,643 (2012: GBP1,642)
Substantial Shareholdings
So far as the Directors are aware the parties who are directly
or indirectly interested in 3% or more of the nominal value of the
company's share capital at 13 June 2014 are as follows:
Number of shares issued % Ordinary share
capital
Peter Jay 23,500,000 9.2%
Graham Read 84,203,031 33.2%
Andy Collins 32,300,000 12.7%
Commerzbank AG 15,964,019 6.28%
Creditor payment policy
The Group's current policy concerning the payment of trade
creditors is to:
a) settle the terms of payment with suppliers when agreeing the
terms of each transaction;
b) ensure that suppliers are made aware of the terms of payment
by inclusion of the relevant terms in contracts; and
c) pay in accordance with the Group's contractual and other
legal obligations.
At the year end trade creditors represented 108 days'
expenses.
Going Concern
The Directors have prepared and reviewed financial forecasts and
the cash flow requirements to meet the Group and the Company's
financial objectives. The Directors are satisfied that, taking into
account the current cash resources and facilities available to the
business and its future cash requirements, it is appropriate to
prepare accounts on a going concern basis.
Disclosure of information to auditors
Each of the Directors who are in office at the date when this
report is approved has confirmed that, as far as they are aware,
there is no relevant audit information of which the auditors are
unaware. Each of the Directors have confirmed that they have taken
all the steps that they ought to have taken as directors to make
themselves aware of any relevant audit information and to establish
that the auditors are aware of such information.
Auditors
During the year Adler Shine LLP were appointed as auditors to
the company. A resolution proposing the reappointment of Adler
Shine LLP as auditors will be put to the members at the next Annual
General Meeting.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2013
2013 2012
Note GBP GBP
Revenue 3 12,312,140 13,556,918
Cost of sales 4 (9,865,759) (11,797,502)
------------ -------------
Gross profit 2,446,381 1,759,416
Administrative expenses 5 (1,601,869) (1,570,199)
------------ -------------
Operating profit 844,512 189,217
Net finance (costs)/income 5 (79,173) 29,288
------------ -------------
Profit before income tax 765,339 218,505
Income tax expense 6 (262,579) (135,554)
Profit/(loss) for the year and
total comprehensive income 502,760 82,951
Earnings per share 7
Basic earnings per share 0.22p 0.04p
Diluted earnings per share 0.18p 0.03p
====== ======
There are no recognised gains and losses other than those
passing through the Statement of Comprehensive Income.
As permitted by Section 408 of the Companies Act 2006, no
separate Statement of Comprehensive Income is presented in respect
of Mountfield Group Plc. Its profit for the year ended 31 December
2013 was GBP313,577 (2012: loss - GBP 23,301).
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2013
2013 2012
Note GBP GBP
ASSETS
Non-current assets
Intangible assets 8 10,788,521 10,788,521
Property plant and equipment 9 114,384 116,432
Deferred income tax assets 16 428,756 599,986
------------ ---------------
11,331,661 11,504,939
------------ ---------------
Current assets
Inventories 10 80,489 82,005
Trade and other receivables 11 3,243,910 2,228,480
Cash and cash equivalents 12 313,675 223,337
------------ ---------------
3,638,074 2,533,822
------------ ---------------
TOTAL ASSETS 14,969,735 14,038,761
============ ===============
EQUITY AND LIABILITIES
Issued share capital 13 254,244 216,744
Share premium 1,490,682 1,120,432
Share based payments reserve 329,781 320,961
Capital redemption reserve 7,500 -
Merger reserve 12,951,180 12,951,180
Reverse acquisition reserve (2,856,756) (2,856,756)
Retained earnings (6,322,975) (6,832,250)
------------ ---------------
TOTAL EQUITY 5,853,656 4,920,311
------------ ---------------
Current liabilities
Trade and other payables 14 4,557,389 3,442,863
Short-term borrowings 15 1,087,665 1,934,147
Finance lease liabilities 15 6,917 8,496
Income tax 91,350 6,691
------------ ---------------
5,743,321 5,392,197
Non-current liabilities
Loan notes 15 3,363,029 3,718,921
Finance lease liabilities 15 9,729 7,332
Provision for deferred taxation 16 -
------------ ---------------
9,116,079 9,118,450
------------ ---------------
TOTAL EQUITY AND LIABILITIES 14,969,735 14,038,761
============ ===============
The financial statements were approved by the board on 16 June
2014
Graham Read
Director
COMPANY REGISTRATION NO. 06374598
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2013
2013 2012
Note GBP GBP
Cash flows from operating activities
Operating profit 844,512 189,217
Adjusted for:
Depreciation 18,042 17,916
Loss on disposal of property,
plant and equipment - 3,606
Share-based payment charge 15,335 26,939
Decrease/(increase) in inventories 1,517 (6,438)
(Increase)/decrease in trade and
other receivables (1,015,430) 64,144
Increase/(decrease) in trade and
other payables 1,114,529 (218,465)
------------ ------------------
Cash generated in operations 978,505 76,919
Finance costs (86,393) 25,407
Finance income 7,220 3,881
Taxation paid (6,692) -
------------ ------------------
Net cash inflow from operating
activities 892,640 106,207
------------ ------------------
Cash flows from investing activities
Purchases of property, plant and
equipment (15,994) (12,864)
Proceeds from sale of fixed assets - 2,500
------------ ------------------
Net cash used in investing activities (15,994) (10,364)
------------ ------------------
Cash flows from financing activities
Proceeds from issue of shares 450,000 -
Costs of shares issued (34,750) -
Finance lease rentals 816 (7,963)
Repayment of non-convertible loan
notes (351,392) (346,892)
Proceeds/(repayment) from short-term
loans 30,904 (200,000)
------------ ------------------
Net cash flows generated from/(used
in) financing activities 95,578 (554,855)
------------ ------------------
Net cash increase/(decrease) in
cash and cash equivalents 972,224 (459,012)
Cash and cash equivalents brought
forward (758,218) (299,206)
------------ ------------------
Cash and cash equivalents carried
forward 12 214,006 (758,218)
============ ==================
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2013
Share
based Capital Reverse
Share Share payment redemption Merger acquisition Retained
capital premium reserve reserve reserve reserve earnings Total
GBP GBP GBP GBP GBP GBP GBP GBP
At 1 January
2012 216,744 1,120,432 294,022 - 12,951,180 (2,856,756) (6,915,201) 4,810,421
Total
comprehensive
income for
the year - - - - - - 82,951 82,951
Movement
in year - - 26,939 - - - - 26,939
--------------------- --------------------- --------------------------- --------------------- --------------------- --------------------- ------------------------- --------------
At 31 December
2012 216,744 1,120,432 320,961 - 12,951,180 (2,856,756) (6,832,250) 4,920,311
Total
comprehensive
income for
the year - - - - - - 502,760 502,760
Shares issued
in period 45,000 405,000 - - - - - 450,000
Cost of shares
issued - (34,750) - - - - - (34,750)
Shares
cancelled
in period (7,500) - - 7,500 - - - -
Share based
payment
charge - - 15,335 - - - - 15,335
Cancelled
share options - - (6,515) - - - 6,515 -
--------------------- --------------------- --------------------------- --------------------- --------------------- --------------------- ------------------------- --------------
At 31 December
2013 254,244 1,490,682 329,781 7,500 12,951,180 (2,856,756) (6,322,975) 5,853,656
===================== ===================== =========================== ===================== ===================== ===================== ========================= ==============
Merger Reserve
The merger reserve exists as a result of the acquisitions of
Mountfield Building Group Limited, MBG Construction Limited,
Connaught Access Flooring Holdings Limited and Mountfield Land
Limited where the consideration included the issue of new shares by
the Company, thereby attracting merger relief under the Companies
Act 2006. The merger reserve represents the difference between the
nominal value of the share capital issued by the Company and the
fair value of those shares at the date of acquisition.
Reverse Acquisition Reserve
The reverse acquisition reserve exists as a result of the method
of accounting for the acquisition of Mountfield Building Group
Limited and MBG Construction Ltd (note 1.4).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2013
1 Accounting policies
The principal accounting policies adopted in the preparation of
these consolidated financial statements are set out below.
1.1 General information
Mountfield Group plc is a company incorporated in England and
Wales. The registered number of the Company is 06374598. The
address of its registered office is 3C Sopwith Crescent, Wickford
Business Park, Wickford, Essex SS11 8YU.
1.2 IFRS compliance and adoption
Statement of compliance with IFRS
These financial statements have been prepared in accordance with
International Financial Reporting Standards as adopted by the
European Union (IFRSs), IFRIC Interpretations and with those parts
of the Companies Act 2006 applicable to companies reporting under
IFRS.
The adoption of these standards has not resulted in any changes
to the Group's accounting policies and has not affected amounts
reported in prior years.
The financial statements have been prepared under the historical
cost.
Sources of estimation uncertainty
The preparation of financial statements under IFRS requires
management to make judgements, estimates and assumptions that
affect the application of accounting policies and reported amounts
of assets, liabilities, income and expenses. The estimates and
associated assumptions are based on historical experience and
factors that are believed to be reasonable under the circumstances,
the results of which form the basis of making judgements about
carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from these
estimates. Estimates and assumptions are reviewed on an ongoing
basis and any revision to estimates or assumptions are recognised
in the period in which they are revised and in future periods
affected.
Significant judgements
The material areas in which estimates and judgements are applied
are as follows:
Goodwill
Determining whether goodwill is impaired requires an estimation
of the value in use of the cash-generating units to which the
goodwill has been allocated. The value in use calculation requires
the Company to estimate future cashflows expected to arise from the
cash-generating unit and a suitable discount rate in order to
calculate present value. The carrying amount of goodwill at the
balance sheet date was GBP10.8 million. Details regarding the
goodwill carrying value and assumptions used in carrying out the
impairment reviews are provided in note 8.
Receivables
The Group reviews the net recoverable value of its accounts
receivables on a periodic basis to provide assurance that recorded
accounts receivables are stated net of any required provision for
impairment. Factors that could impact recoverability include the
financial propriety of customers and related economic trends.
Changes in these factors that differ from managements estimates can
result in an adjustment to the carrying value and amounts charged
to income in specific periods. More details on gross balances and
provisions made are included in note 11.
Accounting for construction contracts
In accordance with IAS 11 "Construction Contracts", management
is required to estimate total expected contract costs and the
percentage of contract completion in determining the appropriate
revenue and profit to recognise in the period. The Group uses the
work of expert professional Chartered Surveyors to determine
accurately the level of work that has been completed by the
year-end. The Group also has appropriate control procedures to
ensure that all estimates are determined on a consistent basis and
are subject to appropriate review and authorisation.
Share-based payments
The estimates of share-based payments costs require that
management selects an appropriate valuation model and makes
decisions on various inputs into the model, including the
volatility of its own share price, the probable life of the options
before exercise and behavioural consideration of employees.
Deferred taxation
The Group provides for deferred taxation using the liability
method. Deferred tax assets are recognised in respect of tax losses
where the Directors believe that it is probable that future profits
will be relieved by the benefit of tax losses brought forward. The
Board considers the likely utilisation of such losses by reviewing
budgets and medium term plans for each taxable entity within the
Group. If the actual profits earned by the Group's taxable entities
differ from the budgets and forecasts used then the value of such
deferred tax assets may differ from that shown in these financial
statements.
Presentation and functional currency
The financial statements are presented in pounds sterling, which
is the Group's functional currency.
1.3 Standards and interpretations
At the date of authorisation of these financial statements the
following Standards and Interpretations which have not been applied
in these financial statements were in issue but not yet
effective:
Effective date
(period beginning
on or after)
IFRS 2,3,8, Amendments resulting from Annual 1 July 2014
IAS 16,24,36 Improvements 2010-2012 Cycle
IFRS 3,13, Amendments resulting from Annual 1 July 2014
IAS 40 Improvements 2011-2013 Cycle
IFRS 7 Deferral of mandatory effective date 1 January 2015
of IFRS 9 and amendments to transition
disclosures
IFRS 9 Deferral of mandatory effective date 1 January 2015
of IFRS 9 and amendments to transition
disclosures
IFRS 10 Amendments for investment entities 1 January 2014
IFRS 11 Amendments regarding the accounting
of acquisition of an interest in January 2016
a joint operation
IFRS 12 Amendments for investment entities 1 January 2014
IAS 16,36 Amendments regarding the classification
of acceptable methods of depreciation 1 January 2016
and amortisation
IAS 19 Employee Benefits - Amended to clarify 1 July 2014
the requirements that relate to how
contributions from employees or third
parties that re linked to service
should be attributed to periods of
service
IAS 27 Amendments for investment entities 1 January 2014
IAS 32 Financial Instruments: Presentation 1 January 2014
- Amendments to application guidance
on the offsetting of financial assets
and financial liabilities
IAS 36 Amendments arising from recoverable
amount disclosures for non-financial 1 January 2014
assets
IAS 39 Financial Instruments: Recognition 1 January 2014
and Measurement- Amendments for novation
of derivatives
IFRIC 21 Levies 1 January 2014
The Directors anticipate that the adoption of these Standards
and Interpretations in future periods will have no material impact
on the Group's financial statements.
1.4 Basis of consolidation
Subsidiaries
The Group financial statements consolidate the financial
statements of the Company and all its subsidiaries. Subsidiaries
include all entities over which the Group has the power to govern
financial and operating policies. The existence and effect of
potential voting rights that are currently exercisable or
convertible are considered when assessing whether the Group
controls another entity. Subsidiaries are consolidated from the
date on which control commences until the date that control ceases.
Intra-group transactions are eliminated in preparing the
Consolidated Financial Statements.
A list of the significant investments in subsidiaries, including
the name, country of incorporation and proportion of ownership
interest is given in note 2 to the Company's separate financial
statements.
Business combinations and goodwill
On 16 October 2008, Mountfield Group plc ("the Company")
acquired the entire issued share capital of Mountfield Building
Group Limited, which has one wholly owned subsidiary, MBG
Construction Limited (the "MBG Group") acquired in August 2008. The
consideration of GBP7,622,000 was satisfied by the issue of
51,220,000 Ordinary Shares of 0.1p each at a price of 10p per share
and by the issue of GBP2,500,000 unsecured non-convertible loan
notes.
As a result of these transactions, the former shareholders of
MBG Group became the majority shareholders in the Company.
Accordingly, the substance of the transaction was that MBG Group
acquired the Company in a reverse acquisition.
Under IFRS 3 'Business Combinations', the acquisition of MBG
Group has been accounted for as a reverse acquisition.
The acquisitions of Connaught Access Flooring Limited, MBG
Construction Limited and Mountfield Land Limited are accounted for
using the purchase method. The cost of the acquisition is measured
at the aggregate of the fair values, at the date of exchange, of
assets given, liabilities incurred or assumed, and equity
instruments issued by the Group in exchange for control of the
acquiree plus any costs directly attributable to the business
combination.
Goodwill
Goodwill on acquisition of subsidiaries represents the excess of
the cost of acquisition over the fair value of the Group's share of
the net identifiable assets and contingent liabilities acquired.
Identifiable assets are those which can be sold separately or which
arise from legal rights regardless of whether those rights are
separable. Goodwill on acquisition of subsidiaries is included in
intangible assets. Goodwill is not amortised but tested annually
for impairment or when trigger events occur, and is carried at cost
less accumulated impairment losses.
1.5 Revenue recognition
Revenue is stated exclusive of VAT and consists of sales of
services to third parties.
Revenue is recognised to the extent that it is probable that the
economic benefits will flow to the Group and the revenue can be
reliably measured. Retentions are recognised throughout the life of
a contract and are deducted from the sales invoice.
Revenue relating to contracts includes the amount initially
agreed in the contract plus any variations in contract work to the
extent that it is probable they will result in revenue and can be
reliably measured. As soon as the outcome of the contract can be
measured reliably, revenue and expense is recognised in the
statement of comprehensive income on a stage of completion basis.
The stage of completion is determined by reference to a survey of
work performed. Any losses are recognised immediately in the
statement of comprehensive income as soon as they are foreseen.
1.6 Contract work in progress
Revenue from fixed price construction contracts is recognised on
the percentage of completion method, measured by reference to the
percentage of contract costs incurred for work performed to date to
the estimated total contract costs or the proportion of the value
of work done to the total value of work under the contract, except
where these would not be representative of the stage of completion.
Full provision is made for all known or expected losses on
individual contracts immediately once such losses are foreseen.
1.7 Amounts recoverable on long term contracts
Profit on long term contracts is taken as the work is carried
out if the final outcome can be assessed with reasonable certainty.
The profit included is calculated on a prudent basis to reflect the
proportion of the work carried out at the year end, by recording
turnover and related costs as contract activity progresses.
Turnover is calculated as that proportion of total contract value
which costs incurred to date bear to total expected costs for that
contract. Revenues derived from variations on contracts are
recognised only when they have been accepted by the customer. Full
provision is made for losses on all contracts in the year in which
they are first foreseen. Amounts which are recoverable on long-term
contracts are shown within debtors under the heading 'Amounts
Recoverable on Contracts' which have not yet been invoiced and are
stated net of discounts allowed.
1.8 Share-based payments
The Group makes equity-settled share-based payments to its
employees and directors. The fair value of options and warrants
granted is recognised as an employee expense with a corresponding
increase in equity. The fair value is measured at grant date and
spread over the period during which the employees become
unconditionally entitled to the options. The fair value of the
options and warrants granted is measured based on the Black-Scholes
framework, taking into account the terms and conditions upon which
the instruments were granted. At each balance sheet date, the
Company revises its estimate of the number of options and warrants
that are expected to become exercisable.
1.9 Retirement benefits: Defined contribution schemes
Contributions to defined contribution pension schemes are
charged to the statement of comprehensive income in the year to
which they relate.
1.10 Impairment
The Group assesses at each reporting date whether there is an
indication that an asset may be impaired. Assets that have an
indefinite useful life, for example goodwill, are not subject to
amortisation and are tested annually for impairment. Assets that
are subject to amortisation or depreciation are reviewed for
impairment whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable.
An impairment loss is recognised for the amount by which the
asset's carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of an asset's fair value less
costs to sell and value in use. For the purposes of assessing
impairment, assets are grouped at the lowest levels for which there
are separately identifiable cash flows (cash-generating units).
Non-financial assets that suffered impairment are reviewed for
possible reversal of the impairment at each reporting date.
1.11 Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated
depreciation.
Property, plant and equipment is depreciated over the estimated
useful life of the asset, as follows:
Freehold land Not depreciated
Freehold buildings 2% per annum straight line
Leasehold improvements Over the period of the lease
Fixtures, fittings and equipment 10% per annum reducing balance
Plant and equipment 20% - 25% per annum straight line
Motor vehicles 20% - 25% per annum straight line
1.12 Leasing
A lease is classified as a finance lease if it transfers
substantially all the risks and rewards of ownership. All other
leases are classified as operating leases. Classification is made
at the inception of the lease.
Assets obtained under finance leases are capitalised as
property, plant and equipment and depreciated over the shorter of
the lease term and their useful lives. Obligations under such
arrangements are included in payables net of the finance charge
allocated to future periods. The finance element of the rental
payment is charged to the statement of comprehensive income so as
to produce constant periodic rates of charge on the net obligations
outstanding in each period.
Rentals paid under operating leases are charged to the statement
of comprehensive income as incurred on a straight line basis over
the lease term.
1.13 Inventories
Inventories are valued at the lower of cost and net realisable
value after making due allowance for obsolete and slow-moving
items. Cost includes direct materials, direct labour and those
overheads that have been incurred in bringing the inventory to its
present location and condition.
1.14 Financial instruments
Financial assets and financial liabilities are recognised on the
consolidated statement of financial position when the Group becomes
a party to the contractual provisions of the instrument.
The financial instruments, which excludes current receivables
and payables, comprise cash or overdraft and unsecured
non-convertible loan notes. The Directors consider the fair value
not to be materially different to the carrying value for the
financial instruments. During the years under review, the Group did
not enter into derivative transactions and did not undertake
trading in any financial instruments.
1.15 Trade and other receivables
Trade receivables are recognised at fair value less any
provision for impairment. A provision for impairment is made when
collection of the full amount is no longer probable. Bad debts are
written off when identified. The fair value of trade and other
receivables are equivalent to their book values as set out in the
financial information.
1.16 Cash and cash equivalents
Cash and cash equivalents in the balance sheet comprise cash at
bank and in hand, demand deposits and other short-term highly
liquid investments that is readily convertible to a known amount of
cash and is subject to an insignificant risk of change in
value.
For the purpose of the cash flow statement, cash and cash
equivalents consist of cash and cash equivalents net of outstanding
bank overdrafts.
1.17 Financial liabilities and equity
Financial liabilities and equity instruments issued by the Group
are classified according to the substance of the contractual
arrangements entered into and the definitions of a financial
liability and equity instrument. An equity instrument is any
contract that evidences a residual interest in the assets of the
Group after deducting all of its liabilities.
1.18 Share capital
The Company has one class of ordinary share, which carries no
rights to fixed income. All ordinary shares are entitled to receive
dividends as declared from time to time and are entitled to one
vote per share at meetings of the Company. All shares rank equally
with regard to the Company's residual assets.
Ordinary shares issued by the Company are classified as equity
and recorded at fair value on initial recognition received, net of
direct issue costs.
1.19 Trade and other payables
Trade payables are initially recognised at fair value and
subsequently at amortised cost. The fair value of the trade and
other payables are equivalent to their book values as set out in
the financial information.
1.20 Taxation
The taxation charge represents the sum of current tax and
deferred tax.
The current tax charge is based on the taxable profit/loss for
the period using the tax rates that have been enacted or
substantially enacted by the balance sheet date. Taxable profit
differs from the net profit as reported in the statement of
comprehensive income because it excludes items of income or expense
that are taxable or deductible in other years and it further
excludes items that are never taxable or deductible.
Deferred tax is provided using the liability method, in respect
of temporary differences between the carrying amount of the assets
and liabilities and their tax base. Deferred tax is recognised in
the statement of comprehensive income, except when the tax relates
to items charged or credited directly in equity, in which case the
tax is also recognised in equity.
Deferred tax assets are recognised only when it can be regarded
as probable that there will be suitable taxable profits in the
foreseeable future against which the deductible temporary
difference can be utilised. Deferred tax is determined using tax
rates that are expected to apply in the periods in which the asset
is realised or liability settled, based on tax rates and laws that
have been enacted or substantially enacted by the balance sheet
date.
2 Segmental reporting
Segment information is presented in respect of the Group's
business segments, which are based on the Group's management and
internal reporting structure as at 31 December 2013.
The chief operating decision-maker has been identified as the
Board of Directors (the Board). The Board reviews the Group's
internal reporting in order to assess performance and allocate
resources. Management has determined the operating segments based
on these reports and on the internal report's structure.
Segment performance is evaluated by the Board based on revenue
and profit before tax (PBT). Segment results include items directly
attributable to a segment as well as those that can be allocated on
a reasonable basis, such as centrally managed costs relating to
individual segments and costs relating to land used in more than
one individual segment.
Given that income taxes and certain corporate costs are managed
on a centralized basis, these items are not allocated between
operating segments for the purposes of the information presented to
the Board and are accordingly omitted from the analysis below.
The Group comprises the following segments:
Construction
Direct contracting and trade contracting services to both main
contractors and corporate end users.
Fit-out
Providing raised flooring systems to both main contractors and
corporate end users.
Segmental operating performance
2013 2012
-------------------- -----------------------------------
Profit Profit
/(loss) /(loss)
before before
Revenue tax Revenue tax
GBP'000 GBP'000 GBP'000 GBP'000
Construction 6,681 (15) 9,916 (8)
Fit-out 5,791 365 3,736 198
--------- --------- ----------------- ----------------
12,472 350 13,652 190
Inter-segmental revenue and
unallocated (160) 415 (95) 29
--------- --------- ----------------- ----------------
12,312 765 13,557 219
========= ========= ================= ================
Business segments assets and liabilities
2013 2012
----------------------- ------------------------
Assets Liabilities Assets Liabilities
GBP'000 GBP'000 GBP'000 GBP'000
Construction 2,388 4,195 2,078 4,337
Fit-out 1,764 1,059 1,072 632
4,152 5,254 3,150 4,969
Goodwill - Construction 5,914 - 5,914 -
Goodwill - Fit-out 4,874 - 4,874 -
Other unallocated assets &
liabilities 30 3,862 101 4,149
-------- ------------- --------- -------------
14,970 9,116 14,039 9,118
======== ============= ========= =============
Unallocated assets consist of deferred tax, trade and other
receivables and cash held by the Parent Company. Unallocated
liabilities consist of trade and other payables and interest
bearing loans owed by the Parent Company.
Other segment information
2013 2012
GBP'000 GBP'000
Depreciation included in segment results
Construction 8 10
Fit-out 10 8
-------- --------
18 18
======== ========
Revenue by geographical destination
Revenue is attributable to the United Kingdom and other EU
markets.
Total assets including property, plant and equipment and
intangible assets are all held in the United Kingdom.
3 Construction contracts
2013 2012
GBP GBP
Contract revenue recognised in
relation to construction contracts
in the year and retentions 12,312,140 13,556,918
=========== ===========
For contracts in progress at the
balance sheet date:
Aggregate cost incurred to date 7,405,951 4,570,953
Recognised profit to date 2,397,783 763,417
Retentions due 310,427 165,661
=========== ===========
Major customers
Total group revenue to four customers all relating to
construction and fit-out, totalled GBP8,358,158, split as
follows:
Construction 2013 2012
GBP GBP
Customer 1 2,916,021 5,115,977
Customer 2 1,140,600 1,210,000
---------- ----------
4,056,620 6,325,977
========== ==========
Fit-out 2013 2012
GBP GBP
Customer 1 3,608,997 2,186,586
Customer 2 692,541 151,459
---------- ----------
4,301,538 2,338,045
========== ==========
4 Cost of sales 2013 2012
GBP GBP
Direct costs 9,865,759 11,797,502
Adjustment to amount receivable on long term contracts - -
---------- -----------
Total cost of sales 9,865,759 11,797,502
========== ===========
5 Other income and expenses
2013 2012
GBP GBP
Finance income/(expense)
Loan interest (16,000) (114,662)
Interest on finance leases (1,888) (527)
Loan note interest (interest waived by loan
note holders) - 189,774
Other interest (21,381) (20,598)
Bank interest (47,124) (28,580)
------------- ------------------
Interest paid (86,393) 25,407
Finance income
Bank interest received - -
Other interest received 7,220 3,881
------------- ------------------
Net finance (costs)/income (79,173) 29,288
============= ==================
Administrative expenses include:
2013 2012
GBP GBP
Depreciation of property, plant and
equipment
- owned by the Group 13,474 11,146
- held under finance leases 4,568 6,770
Operating lease rentals - other 48,997 56,605
Auditors remuneration
Fees payable to the company's auditor
for the audits of the parent company,
consolidated financial statements and
the subsidiaries 35,000 40,000
======= =======
Average number of employees
The average number of employees (including executive Directors)
was:
2013 2012
No. No.
Administration 8 8
Cost of sales 22 23
Management 11 11
----- -----
41 42
===== =====
Wages and salaries
2013 2012
GBP GBP
Wages and salaries 1,561,007 1,661,404
Social security costs 177,666 184,529
Post employment benefits 53,100 53,100
---------- ----------
1,791,773 1,899,033
========== ==========
Key management personnel compensation
2013 2012
GBP GBP
Short-term employee benefits 16,437 16,165
Post-employment benefits 53,100 53,100
------- -------
69,537 69,265
======= =======
Directors' remuneration
2013 2012
Salaries and fees Benefits in kind Post employment benefit Total Total
GBP GBP GBP GBP GBP
G Read - 2,233 53,100 55,333 55,415
A Collins 6,475 7,729 - 14,204 13,850
P Jay 30,500 - - 30,500 24,000
T Spanner - - - - 22,500
------------------- ------------------ ------------------------ -------- -----------
36,975 9,962 53,100 100,037 115,765
=================== ================== ======================== ======== ===========
The remuneration as disclosed for G Read includes GBP17,400
(2012: GBP17,400) of pension contributions paid for his wife, J
Read. The number of Directors for whom retirement benefits are
accruing under money purchase pension schemes was 1 (2012:1)
6 Income tax expense
2013 2012
GBP GBP
Current tax
UK corporation tax 91,350 6,691
---------- --------------
Total current tax 91,350 6,691
Deferred tax
Deferred tax debit/(credit) - continuing
operations 171,229 128,863
---------- --------------
Income tax expense/(credit) 262,579 135,554
========== ==============
Factors affecting tax charge
Profit before income tax -continuing
operations 765,339 218,505
---------- --------------
Profit before income tax multiplied
by effective rate of UK corporation
tax of 23.25% (2012: 24.5%) 177,963 53,533
Effects of:
Expenses not deductible for tax
purposes 24,991 25,347
Depreciation for period in excess
of capital allowances (597) 457
Tax losses not utilised and carried
forward (111,007) (76,492)
Other adjustments - 3,846
Current tax charge 91,350 6,691
========== ==============
It has been announced that the UK tax rate will reduce by 1% per
annum for each of the next 3 years to 20% for the tax year
commencing 1(st) April 2015. The impact of these reductions will be
reflected if the relevant legislation is enacted.
7 Earnings per share
The basic earnings per share is calculated by dividing the
earnings attributable to equity shareholders by the weighted
average number of shares in issue. The diluted earnings per share
is calculated by dividing the earnings attributable to equity
shareholders by the weighted average number of shares in issue plus
the number of warrants and share options.
2013 2012
Basic earnings per share GBP GBP
Profit for the financial year 502,760 82,951
Weighted average number of shares 231,169,112 216,744,454
=============== ==============
2013 2012
Diluted earnings per share GBP GBP
Profit for the financial year 502,760 82,951
Number of shares 272,669,106 260,694,447
=============== ==============
8 Intangible assets
The carrying amount of goodwill relates to the construction and
fit-out segments of the business.
Goodwill
GBP
Cost
At 1 January 2012 10,788,521
Additions -
-----------------
At 31 December 2012 10,788,521
Additions -
-----------------
At 31 December 2013 10,788,521
-----------------
Impairment of goodwill
Goodwill has been allocated for impairment testing to two groups
of cash - generating units ('CGU') identified according to
operating segments being Construction and Fit-out as disclosed in
Note 2.
For the purposes of impairment testing of goodwill the carrying
value of the CGUs (including goodwill) are compared to the
recoverable amount of the CGUs and any deficits are provided. The
carrying value of the CGUs includes only those assets that can be
attributed directly, or allocated on a reasonable and consistent
basis.
The recoverable amount of a CGU is determined based on
value-in-use calculations. These calculations use pre-tax cash flow
projections based on three year financial budgets approved by
management. Cash flows beyond the three year period are
extrapolated using the estimated growth rates stated below.
The key assumptions used in the value-in-use calculations for
each CGU are as follows:
-- Terminal value based on between 2% future growth in cash flows
-- Discount rate of 7.37%
Revenue was based upon actual amounts measured in prior periods
which were projected forward in accordance with expected
trends.
A provision has been made against the Goodwill of Fit-out CGU.
Although, the business continues to deliver significant profits,
forecast growth has been reduced to reflect current market
conditions, thereby reducing projected future cash flows.
9 Property, plant and equipment
Freehold and Plant
leasehold Fixtures and fittings and equipment Motor vehicles Total
GBP GBP GBP GBP GBP
Cost
At 1 January
2012 183,418 44,540 61,896 90,271 380,125
Additions - 1,249 6,620 4,995 12,864
Disposals - - (25,056) (28,999) (54,055)
---------------- -------------------------------- ------------------------ -------------------- ----------------
At 31
December
2012 183,418 45,789 43,460 66,267 338,934
Additions - 1,916 468 13,610 15,994
Written back
on disposals - - - (16,312) (16,312)
---------------- -------------------------------- ------------------------ -------------------- ----------------
At 31
December
2013 183,418 47,705 43,928 63,565 338,616
---------------- -------------------------------- ------------------------ -------------------- ----------------
Depreciation
At 1 January
2012 123,356 30,513 36,897 61,769 252,535
Charge for
the year 1,657 6,176 2,459 7,624 17,916
Written back
on disposals - - (18,950) (28,999) (47,949)
---------------- -------------------------------- ------------------------ -------------------- ----------------
At 31
December
2012 125,013 36,689 20,406 40,394 222,502
Charge for
the year 1,657 4,984 2,337 9,064 18,042
Written back
on disposals - - - (16,312) (16,312)
---------------- -------------------------------- ------------------------ -------------------- ----------------
At 31
December
2013 126,670 41,673 22,743 33,146 224,232
---------------- -------------------------------- ------------------------ -------------------- ----------------
Net book
value
At 31
December
2013 56,748 6,032 21,185 30,419 114,384
================ ================================ ======================== ==================== ================
At 31
December
2012 58,406 9,099 23,055 25,872 116,432
================ ================================ ======================== ==================== ================
The net book value of property, plant and equipment includes an
amount of GBP16,425 (2012: GBP20,309) in respect of assets held
under finance leases.
The net book value of freehold and leasehold property includes
an amount of GBP5,749 (2012: GBP6,806) in respect of leasehold
improvements to a property leased by Connaught Access Flooring
Limited.
10 Inventories
2013 2012
GBP GBP
Materials and finished goods 80,489 82,005
======= ==============
The amount of inventories recognised as expense during the year
was GBP82,005 (2012 - GBP75,567).
11 Trade and other receivables
2013 2012
GBP GBP
Trade receivables 622,159 595,993
Less: Provision for impairment of
trade receivable (12,000) (12,000)
---------- --------------
610,159 583,993
Contract retentions 569,235 320,589
Other receivables 140,464 138,947
Prepayments 51,064 82,655
Amounts recoverable on long term contracts 1,872,988 1,102,296
Total trade and other receivables 3,243,910 2,228,480
========== ==============
Based on prior experience and an assessment of the current
economic environment, management believes there is no further
credit risk provision required in excess of the normal provision
for impairment of trade receivables.
The average credit period taken on sales is 20 days. No interest
is charged on overdue receivables. There is no material difference
between the fair value of receivables and their book value.
Amounts recoverable on long-term contracts are stated net of
discounts allowed of GBP9,567 (2012: GBP6,741).
The movement in the provision for impairment of trade
receivables is as follows:
2013 2012
GBP GBP
Balance at 1 January 12,000 8,000
Charge/(credit) to the statement of comprehensive
income - 4,000
------- -------------
Balance at 31 December 12,000 12,000
======= =============
The Group's trade and other receivables that were past due date
but not impaired relate to a number of individual customers for
whom there is no reason to believe that the debt is not
recoverable. The ageing of these trade receivables and contract
retentions is as follows:
2013 2012
GBP GBP
Trade receivables
Three to six months 3,870 582
Six to nine months 2,443 -
Nine to twelve months 330 -
More than twelve months 15,582 15,000
-------- -------
22,225 15,582
======== =======
Contract retentions
Three to six months 22,726 10,380
Six to nine months 4,383 21,935
Nine to twelve months 5,046 28,159
More than twelve months 94,150 22,606
-------- -------
126,305 83,080
======== =======
12 Cash and cash equivalents
2013 2012
GBP GBP
Cash at bank and in hand 313,675 223,337
======== ========
Cash at bank and in hand earns interest at floating rates based
on daily bank deposit rates.
At the balance sheet date the Group had a bank overdraft
facility of GBP600,000 with Barclays Bank Plc, secured by a fixed
charge over the book debts and property of the Group and a floating
charge over all other assets of the Group and directors' limited
guarantees for up to GBP600,000.
For the purpose of the cash flow statement, cash and cash
equivalents comprise the following at 31 December 2013:
2013 2012
GBP GBP
Cash at bank and in hand 313,675 223,337
Bank overdraft (99,669) (981,555)
--------- -----------
214,006 (758,218)
========= ===========
13 Share capital
2013 2012
---------------------- ----------------------------
Number GBP Number GBP
Allotted, called up and
fully paid
Ordinary shares of 0.1p
each 254,244,454 254,244 216,744,454 216,744
============ ======== ============= =============
On 29 July 2013 the company issued 45,000,000 ordinary shares of
0.1p each at 1p per share. On 5 July 2013 the company cancelled
7,500,000 ordinary shares at 0.1p.
Warrants
Details of the warrants outstanding during the period are as
follows:
Weighted average Weighted
remaining average
contractual exercise
life (years) Number price
GBP
At 1 January 2012 10,000,000 0.07
Granted - - -
Lapsed - - -
----------------- ----------------- -----------------
At 31 December
2012 2.8 10,000,000 0.07
Granted - - -
Lapsed - - -
----------------- ----------------- -----------------
At 31 December
2013 1.8 10,000,000 0.07
================= ================= =================
As at 31 December 2013 the warrants outstanding were exercisable
as follows:
Date of grant Exercise date Number Price
GBP
27 October 30 October 2009 and 29
2008 October 2014 4,000,000 0.10
27 October 30 October 2009 and 29
2008 October 2014 6,000,000 0.15
----------------- =========================
10,000,000
=================
At the date of issue, the warrants were valued using the
Black-Scholes option pricing model. The fair value per option
granted and the assumptions used in the calculation were as
follows:
Exercise Exercise
price 10p price 5p
Expected volatility 50.6% 50.6%
Expected life 3.5 years 3.5 years
Risk free interest rate 2.93% 2.93%
Expected dividend yield - -
Possibility of ceasing employment
before vesting - -
Fair value per option 3.0p 4.0p
=========== ==========
The charge to the statement of comprehensive income for share
based payments during the year ended 31 December 2013 was GBPnil
(2012: GBPnil).
Share Options
At 31 December 2013, outstanding awards to subscribe for
ordinary shares of 0.10p each in the Company granted in accordance
with the rules of the Mountfield EMI share option scheme were as
follows:
Number Weighted Weighted
average remaining average
contractual exercise
life (years) price (pence)
Brought forward 33,949,993 3.43 2.96
Granted 4,000,000
Cancelled (6,449,999)
Carried forward 31,499,994 2.61 3.00
============ =================== ===============
The fair value of the remaining share options has been
calculated using the Black-Scholes model. The assumptions used in
the calculation of the fair value of the share options outstanding
during the year are as follows:
Grant Date 22 May 2012 11 June 10 Dec 2013 17 Dec 2013
2012
Exercise period May 2013 June 2013 Dec 2014- Dec 2014
- May 2016 - June 2016 Dec 2017 - Dec 2017
Share price at date of
grant 1.5p 1.5p 2.7p 2.5p
Exercise price 3.0p 3.0p 3.0p 3.0p
Shares under option 16,666,663 10,833,331 2,000,000 2,000,000
Expected volatility 57% 57% 70% 70%
Expected life (years) 2.5 2.5 2.5 2.5
Risk free rate 1.02% 1.02% 1.02% 1.02%
Expected dividend yield 0% 0% 0% 0%
Fair value per option 0.13p 0.13p 0.65p 0.56p
Volatility was determined by reference to the standard deviation
of expected share price returns based on a statistical analysis of
monthly share prices over a 3 year period to grant date. All of the
above options are equity settled and the charge for the year is
GBP15,335 (2012: GBP26,939).
14 Trade and other payables (current)
2013 2012
GBP GBP
Trade payables 3,059,705 2,225,176
Other payables 43,704 44,415
Accruals 927,721 523,529
Other taxes and social security
costs 526,259 649,743
---------- ----------
4,557,389 3,442,863
========== ==========
The average credit taken for trade purchases is 108 days. The
directors consider that the carrying amount of trade payables
approximate their fair value.
15 Borrowings
2013 2012
GBP GBP
Current
Bank overdrafts 99,669 981,555
Net obligations under finance leases 6,917 8,496
Short-term unsecured loan - 175,000
Short-term unsecured loan from
Director 636,604 430,700
Unsecured non-convertible loan
notes 351,392 346,892
---------- ----------
1,094,582 1,942,643
---------- ----------
Non - current
Unsecured non-convertible loan
notes 3,363,029 3,718,921
Net obligations under finance leases 9,729 7,332
---------- ----------
3,372,758 3,726,253
---------- ----------
Total borrowings 4,467,340 5,668,896
========== ==========
On 16 October 2008 the Company issued GBP2,500,000 unsecured
non-convertible loan notes to the vendors of Mountfield Building
Group Limited and GBP3,000,000 unsecured non-convertible loan notes
to the vendors of Connaught Access Flooring Holdings Limited as
part of the consideration for the acquisition of the entire share
capital of each company. Repayments of GBP351,392 (2012:
GBP346,892) were made against the loan notes in the period.
The loan notes are non-transferrable and carry interest at a
rate of 2 per cent above the base rate of Barclays Bank plc per
annum. The non-current portion of the unsecured loan notes is
redeemable on 30 June 2016. The current portion of the unsecured
loan notes is due for repayment during 2014.
During the year, interest of GBP97,010 on the loan notes was
waived.
The short-term unsecured loan from a Director accrues interest
at 6% pa but all interest to 31 December 2013 was waived.
2013 2012
GBP GBP
Non-current borrowings
Analysis
Repayable between one and two years 351,392 346,892
Repayable between two and five
years 3,011,637 3,372,029
3,363,029 3,718,921
========== ==========
2013 2012
GBP GBP
Net obligations under finance leases
Analysis
Repayable within one year 6,917 8,496
Repayable between one and five
years 9,729 7,332
16,646 15,828
Included in current liabilities (6,917) (8,496)
-------- ----------
9,729 7,332
======== ==========
16 Deferred taxation
2013 2012
GBP GBP
Deferred tax analysis:
Deferred tax losses (428,756) (599,986)
Deferred tax expense relating to
origination and reversal of temporary
differences - -
(428,756) (599,986)
========== ==========
2013 2012
GBP GBP
Movement in deferred tax during
the year
At 1 January 2012 (599,986) (728,849)
Debit for the year 171,230 128,863
---------- --------------
At 31 December 2012 (428,756) (599,986)
========== ==============
Deferred income tax assets are recognised for tax losses carried
forward to the extent that the realisation of the tax benefit
through future taxable profits is probable.
17 Capital commitments
There were no capital commitments at the year-end date.
18 Operating lease commitments
Commitments under non-cancellable operating leases in respect of
property expiring:
2013 2012
GBP GBP
Less than one year 4,400 4,400
Between two and five years 36,159 37,568
------- -------
40,559 41,968
======= =======
19 Financial instruments
Capital risk management
The Group manages its capital to ensure its ability to continue
as a going concern and to maintain an optimal capital structure to
reduce cost of capital. The capital structure of the Group
comprises equity attributable to equity holders of the Company
consisting of issued ordinary share capital, reserves and retained
earnings as disclosed in Consolidated Statement of Changes in
Equity and cash and cash equivalents as disclosed in Note 12.
The Group maintains or adjusts its capital structure through the
payment of dividends to shareholders, issue of new shares and
buy-back of existing shares.
Categories of financial instruments
2013 2012
GBP GBP
Financial assets
Loans and receivables at amortised
cost including cash and cash equivalents:
Cash and cash equivalents 313,675 223,337
Trade and other receivables 3,243,910 2,228,480
------------ -------------
Total 3,557,585 2,451,817
------------ -------------
Financial liabilities
Trade and other payables 5,285,343 4,055,254
Unsecured non-convertible loan
notes 3,714,421 4,065,813
Secured borrowings 116,315 997,383
------------ -------------
9,116,079 9,118,450
------------ -------------
Net (5,558,494) (6,666,634)
============ =============
Cash and cash equivalents
This comprises cash and short-term deposits held by the Group.
The carrying amount of these assets approximates their fair
value.
General risk management principles
The Group's activities expose it to a variety of risks including
market risk (interest rate risk), credit risk and liquidity risk.
The Group manages these risks through an effective risk management
programme and through this programme, the Board seeks to minimise
potential adverse effects on the Group's financial performance. The
Directors have an overall responsibility for the establishment of
the Group's risk management framework. A formal risk assessment and
management framework for assessing, monitoring and managing the
strategic operational and financial risks of the Group is in place
to ensure appropriate risk management of its operations.
The following represent the key financial risks that the Group
faces:
Market risk
The Group's activities expose it primarily to the financial risk
of interest rates.
Interest rate risk
The Group's interest rate exposure arises mainly from its
interest bearing borrowings. Contractual agreements entered into at
floating rates expose the entity to cash flow risk. Interest rate
risk also arises on the Group's cash and cash equivalents. The
Group does not enter into derivative transactions in order to hedge
against its exposure to interest rate fluctuations.
Credit risk
The Group's principal financial assets are trade and other
receivables and bank balances and cash.
The credit risk on liquid funds is limited because the
counterparties are banks with high credit-ratings assigned by
international credit-rating agencies.
The Group's credit risk is primarily attributable to trade
receivables. The Group has a policy of assessing credit worthiness
of potential and existing customers before entering into
transactions. There is ongoing credit evaluation on the financial
condition of accounts receivable using independent ratings where
available or by assessment of the customer's credit quality based
on its financial position, past experience and other factors. The
Group manages the collection of its receivables through its post
completion project monitoring procedures and ongoing contract with
customers so as to ensure that any potential issues that could
result in non-payment of the amounts due are addressed as soon as
identified.
The maximum exposure to credit risk in respect of the above at
31 December 2013 is the carrying value of financial assets recorded
in the financial statements.
Liquidity risk
The Group closely monitors its access to bank and other credit
facilities in comparison to its outstanding commitments on a
regular basis to ensure that it has sufficient funds to meet the
obligations of the Group as they fall due.
The Board receives regular forecasts which estimate cash flows
over the next eighteen months, so that management can ensure that
sufficient funding is in place as it is required.
Fair value of financial assets and liabilities
The Directors consider that there is no significant difference
between the book value and fair value of the Group's financial
assets and liabilities.
20 Pension costs
The Group operates a defined contribution pension scheme in
respect of the directors and employees. The assets of the scheme
are held separately from those of the company in an independently
administered fund. The pension cost charge represents contributions
payable by the Group to the fund and amounted to GBP53,100 (2012:
GBP53,100).
21 Directors' guarantees
Andrew Collins and Graham Read have given a guarantee limited to
GBP100,000 in respect of the overdraft facility for Connaught
Access Flooring Limited. Graham Read, Peter Jay and Andrew Collins
have given a guarantee limited to GBP600,000 in respect of the
overdraft facility of Mountfield Building Group Limited.
22 Related party transactions
The Company made a loan of GBP395,227 (2012: GBP11,969) to
Mountfield Building Group Limited, a subsidiary undertaking. The
Company made sales of GBP273,655 (2012: GBP120,639) to Mountfield
Building Group Limited. At 31 December 2013, GBP1,398,001 (2012:
GBP1,743,655) was owed to Mountfield Building Group Limited in
respect of these transactions and expenses of GBP323,228 (2012;
GBP331,419) paid on behalf of the Company by Mountfield
Building
Group Limited, net of GBPnil (2012: GBPnil) in respect of
liabilities discharged by the Company on behalf of Mountfield
Building Group Ltd.
During the year Connaught Access Flooring Limited, a subsidiary
undertaking, paid expenses of GBP247,841 (2012: GBP291,001) on
behalf of the Company. The Company made sales of GBP428,988 (2012:
GBP98,705) to Connaught Access Flooring Limited. At 31 December
2013, GBP1,154,808 (2012: GBP1,335,955) was owed to Connaught
Access Flooring Limited in respect of these transactions.
During the year the Company received advances totalling GBP450
(2012: GBP2,100) from MBG Construction Limited, a subsidiary
undertaking. At 31 December 2013, the Company owed GBP34,200 (2012:
GBP33,750) in respect of these transactions
As at 31 December 2013, balances remaining unpaid on the
unsecured non-convertible loan notes to Graham Read and Andrew
Collins amounted to GBP2,893,872 (2012: GBP3,083,372) and
GBP820,549 (2012: GBP982,441) respectively. Interest for the year
of GBP74,650 and GBP22,360 respectively has been waived and
interest in respect of prior periods has also been waived.
During the year, Zeme Limited invoiced GBP30,500 (2012:
GBP24,000) for the services of Peter Jay as a director of
Mountfield Group Plc. As at 31 December 2013 GBP12,917, GBP (2012:
GBP4,000) was due to Zeme Limited.
During the year, the Group was invoiced GBP33,276 (2012:
GBP33,275) for accountancy and bookkeeping services by Read &
Co, a Chartered accountancy practice controlled by Graham Read's
brother. The group made sales of GBP5,670 (2012: GBPnil) to them
during the year. As at 31 December 2013 the balance owed by Read
& Co was GBP3,678 (2012: GBP2,412 owed to them).
During the year the Group was advanced GBP205,904 by Graham Read
(2012: GBP150,000). The balance outstanding at 31 December was
GBP636,604 (2012: GBP430,700). Interest is chargeable at 6% per
annum on this loan but has been waived for 2013.
During the year the Group repaid GBP175,000 to Seabrook Limited,
a company controlled by a shareholder of the Company. Interest
charged to the Consolidated Statement of Comprehensive Income was
GBP16,000.
23 Control
In the opinion of the directors, Graham Read, director and
shareholder, is the ultimate controlling party.
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2013
Company no. 06374598
2013 2012
Note GBP GBP
ASSETS
Non-current assets
Investments 2 13,021,629 13,021,629
Deferred income tax assets 8 17,383 119,075
------------ -------------
13,039,012 13,140,704
------------ -------------
Current assets
Other receivables 3 13,038 55,593
Cash and cash equivalents 4 - -
------------ -------------
13,038 55,593
------------ -------------
TOTAL ASSETS 13,052,050 13,196,297
============ =============
EQUITY AND LIABILITIES
Issued share capital 5 254,244 216,744
Share premium 1,490,682 1,120,432
Share based payments reserve 329,781 320,961
Capital redemption reserve 7,500 -
Merger reserve 12,951,180 12,951,180
Retained losses (8,411,299) (8,731,391)
------------ -------------
TOTAL EQUITY 6,622,088 5,877,926
------------ -------------
Current liabilities
Trade and other payables 6 2,711,966 3,250,454
Short-term borrowings 7 3,576 2,104
Loan notes 7 351,392 346,892
Income tax - -
------------ -------------
3,066,934 3,599,450
Non-current liabilities
Loan notes 7 3,363,029 3,718,921
6,429,963 7,318,371
------------ -------------
TOTAL EQUITY AND LIABILITIES 13,052,050 13,196,297
============ =============
The financial statements were approved by the board on 16 June
2014
Graham Read
Director
COMPANY CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2013
Notes 2013 2012
GBP GBP
Cash flows from operating activities
Operating profit 415,269 28,609
Adjusted for:
Share-based payment charge 15,335 26,939
Decrease in trade and other receivables 42,553 50,930
Increase in trade and other payables (12,136) (146,684)
------------ ---------------
Net cash inflow/(outflow) from
operating activities 461,021 (40,206)
------------ ---------------
Cash flows from financing activities
Proceeds from issue of shares 450,000 -
Cost of shares issued (34,750) -
Loans (repaid)/received from subsidiary
undertakings (526,351) 393,207
Repayment of non-convertible loan
notes (351,392) (346,892)
Net cash flows (used in)/generated
from financing activities (462,493) 46,315
------------ ---------------
Net cash (decrease)/increase in
cash and cash equivalents (1,472) 6,109
Cash and cash equivalents brought
forward (2,104) (8,213)
------------ ---------------
Cash and cash equivalents carried
forward 4 (3,576) (2,104)
============ ===============
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2013
Share
based Capital
Share Share payment redemption Merger Retained
capital premium reserve reserve reserve earnings Total
GBP GBP GBP GBP GBP GBP GBP
At 1 January
2012 216,744 1,120,432 294,022 - 12,951,180 (8,708,090) 5,874,288
Total
comprehensive
income for
the year - - - - - (23,301) (23,301)
Shares issued
in period - - - - - - -
Cost of shares
issued - - 26,939 - - - 26,939
---------------------- ----------------------------- ----------------------------- ----------------------- ----------------------- ------------------------- ---------------
At 31 December
2012 216,744 1,120,432 320,961 - 12,951,180 (8,731,391) 5,877,926
Total
comprehensive
income for
the year - - - - - 313,577 313,577
Shares issued
in period 45,000 405,000 - - - - 450,000
Shares
cancelled
in period (7,500) - - 7,500 - - -
Cost of shares
issued - (34,750) - - - - (34,750)
Share based
payment
charge - - 15,335 - - - 15,335
Cancelled
share options - - (6,515) - - 6,515 -
---------------------- ----------------------------- ----------------------------- ----------------------- ----------------------- ------------------------- ---------------
At 31 December
2013 254,244 1,490,682 329,781 7,500 12,951,180 (8,411,299) 6,622,088
====================== ============================= ============================= ======================= ======================= ========================= ===============
Merger reserve
The merger reserve exists as a result of the acquisitions of
Mountfield Building Group Limited, MBG Construction Limited,
Connaught Access Flooring Holdings Limited and Mountfield Land
Limited where the consideration included the issue of new shares by
the Company, thereby attracting merger relief under the Companies
Act 2006. The merger reserve represents the difference between the
nominal value of the share capital issued by the Company and the
fair value of those shares at the date of acquisition.
NOTES TO THE COMPANY FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2013
1 ACCOUNTING POLICIES
The accounting policies of the Company are shown in the
Consolidated Financial Statements.
1.1 Investment in subsidiaries
Investments in subsidiaries are stated at cost less any
provision for impairment.
2 Investment in subsidiary undertakings
Shares in
subsidiary
undertakings
Cost GBP
At 1 January 2012 19,365,817
Additions -
-----------------
At 31 December 2012 19,365,817
Additions -
-----------------
At 31 December 2013 19,365,817
-----------------
Accumulated Impairment provisions
At 1 January 2012 6,344,188
Impairment provision -
-----------------
At 31 December 2012 6,344,188
Impairment provision -
-----------------
Balance at 31 December 2013 6,344,188
-----------------
Net book value
At 31 December 2013 13,021,629
=================
At 31 December 2012 13,021,629
-----------------
The following companies are the principal subsidiary
undertakings at 31 December 2013 and are all consolidated:
Country of Class Percentage
Subsidiary undertakings incorporation of share of shares held
England and
Mountfield Building Group Limited Wales Ordinary 100%
England and
MBG Construction Limited * Wales Ordinary 100%
Connaught Access Flooring Holdings England and
Limited Wales Ordinary 100%
Connaught Access Flooring Limited England and
** Wales Ordinary 100%
England and
Mountfield Land Limited Wales Ordinary 100%
* Interest held indirectly by Mountfield Building Group
Limited.
** Interest held indirectly by Connaught Access Flooring
Holdings Limited.
The principal activity of these undertakings for the last
relevant financial year was as follows:
Subsidiary undertakings Principal activity
Refurbishment and fitting out contracting
Mountfield Building Group Limited services
MBG Construction Limited Construction and refurbishment contractors
Connaught Access Flooring Holdings
Limited Intermediate holding company
Connaught Access Flooring Limited Specialist flooring contractor
Mountfield Land Limited Dormant
The following was an associate of the group at the year end and
its results for the year ended 31 May 2013 are shown below.
Country of Class Percentage
Associates incorporation of share of shares held
England and
Hub (UK) Limited Wales Ordinary 20%
The principal activity of Hub (UK) Limited is general
construction consultant and contractor.
Associates
Aggregate
of capitalised Loss for
reserves the Year
GBP GBP
Hub (UK) Limited (27,086) (15,377)
================ ===========
3 Trade and other receivables
2013 2012
GBP GBP
Prepayments 13,088 55,593
======= =======
4 Cash and cash equivalents
2013 2012
GBP GBP
Cash at bank - -
================= ==================
Cash at bank and in hand earns interest at floating rates based
on daily bank deposit rates. The fair value of cash and cash
equivalents is GBPnil (2012: GBPnil).
For the purpose of the cash flow statement, cash and cash
equivalents comprise the following at 31 December 2013:
2013 2012
GBP GBP
Bank overdraft (3,576) (2,104)
======== ========
5 Share capital
2013 2012
----------------------------- ----------------------------
Number GBP Number GBP
Allotted, called up and fully paid
Ordinary shares of 0.1p each 254,244,454 254,244 216,744,354 216,744
============ =============== ============= =============
Details of changes in share capital are included at note 13 to
the Consolidated Financial Statements.
6 Trade and other payables
2013 2012
GBP GBP
Trade payables 78,400 96,260
Amounts owed to subsidiary
undertakings 2,587,010 3,113,360 0,153
Other payables 48,373 39,137
Other tax and social security
costs (1,817) 1,697
---------- ---------------
2,711,966 3,250,454
========== ===============
7 Borrowings
2013 2012
GBP GBP
Current liabilities
Bank overdraft 3,576 2,104
Unsecured non-convertible
loan notes 351,392 346,892
---------- --------------
354,968 348,996
---------- --------------
Non-current liabilities
Unsecured non-convertible
loan notes 3,363,029 3,718,921
---------- --------------
3,717,997 4,067,917
========== ==============
Details of the loan notes are included at Note 15 to the
Consolidated Financial Statements.
8 Deferred taxation
2013 2012
GBP GBP
Deferred tax analysis:
Deferred tax losses (17,383) (119,075)
========== ==========
Movement in deferred tax during
the year:
At 1 January 2013 (119,075) (170,985)
Charge for the year 101,692 51,910
---------- ----------
At 31 December 2013 (17,383) (119,075)
========== ==========
9 Capital Commitments
There were no capital commitments at the year end.
10 Contingent liabilities
Under the terms of the Group's banking facilities, the Company
has provided a cross guarantee to the Group's bankers. At the year
end, the net balance in the Group's bank accounts in respect of the
guarantee was GBP214,006 (2012: -GBP758,218).
11 Key management personnel compensation
Key management personnel expenses are disclosed in Note 5 to the
Consolidated Financial Statements.
12 Directors' guarantees
Directors' benefits - advances, credits and guarantees are
disclosed at Note 21 to the Consolidated Financial Statements.
13 Related party disclosures
Related party disclosures are detailed at Note 22 to the
Consolidated Financial Statement.
14 Financial instruments
Details of key risks are included at Note 19 to the Consolidated
Financial Statements.
Categories of financial instruments
2013 2012
GBP GBP
Financial assets
Loans and receivables at amortised
cost 13,038 55,593
13,038 55,593
------------ ---------------
Financial liabilities
Trade and other payables 2,711,966 3,250,454
Bank overdraft 3,576 2,104
Unsecured non-convertible
loan notes 3,714,421 4,065,813
------------ ---------------
6,429,963 7,318,371
------------ ---------------
(6,416,925) (7,262,778)
============ ===============
This information is provided by RNS
The company news service from the London Stock Exchange
END
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