Final Results

About this update from Midwich Group Plc

[{"type":"text","content":"\n \n \n \n 14 March 2023 \n \n \n \n \n   \n \n \n \n \n   \n \n \n \n \n Midwich Group plc \n \n \n \n (\"Midwich\" or the \"Group\") \n \n \n   \n \n \n \n Final Results \n \n \n \n \n   \n \n \n \n \n Record financial performance achieved with significant market share gains and a confident outlook for 2023 \n \n \n \n   \n \n \n Midwich Group (AIM: MIDW), a global specialist audio visual (\"AV\") distributor to the trade market \n , today announces its final results for the year ended 31 December 2022. \n \n \n   \n \n \n \n Statutory financial highlights \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Year to \n \n \n \n \n 31 December 2022 \n \n \n \n \n  m \n \n \n \n \n \n \n Year to \n \n \n \n \n 31 December 2021 \n \n \n \n \n  m \n \n \n \n \n \n \n Total growth % \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Revenue \n \n \n \n \n 1,204.1 \n \n \n \n \n 856.0 \n \n \n \n \n 40.7% \n \n \n \n \n \n \n \n \n \n \n \n \n \n Gross profit \n \n \n \n \n 183.7 \n \n \n \n \n 131.3 \n \n \n \n \n 40.0% \n \n \n \n \n \n \n \n \n \n \n \n \n \n Operating profit \n \n \n \n \n 35.1 \n \n \n \n \n 21.0 \n \n \n \n \n 67.1% \n \n \n \n \n \n \n \n \n \n \n \n \n \n Profit before tax \n \n \n \n \n 24.9 \n \n \n \n \n 18.9 \n \n \n \n \n 31.9% \n \n \n \n \n \n \n \n \n \n \n \n \n \n Profit after tax \n \n \n \n \n 16.9 \n \n \n \n \n 13.5 \n \n \n \n \n 25.1% \n \n \n \n \n \n \n \n \n \n \n \n \n \n Basic EPS - pence \n \n \n \n \n 17.32 \n \n \n \n \n 14.11 \n \n \n \n \n 22.7% \n \n \n \n \n \n \n \n \n \n \n \n \n \n Dividend - pence per share 1 \n \n \n \n \n 15.0 \n \n \n \n \n 11.1 \n \n \n \n \n 35.1% \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n Adjusted financial highlights 2 \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Year to \n \n \n \n \n 31 December 2022 \n \n \n \n \n £m \n \n \n \n \n \n \n Year to \n \n \n \n \n 31 December 2021 \n \n \n \n \n  m \n \n \n \n \n \n \n Total growth \n \n \n \n \n  % \n \n \n \n \n \n \n Growth at constant currency \n \n \n \n \n % \n \n \n \n \n \n \n \n Revenue \n \n \n \n \n 1,204.1 \n \n \n \n \n 856.0 \n \n \n \n \n 40.7% \n \n \n \n \n 38.6% \n \n \n \n \n \n \n Gross profit \n \n \n \n \n 183.7 \n \n \n \n \n 131.3 \n \n \n \n \n 40.0% \n \n \n \n \n 37.5% \n \n \n \n \n \n \n Gross profit margin % \n \n \n \n \n 15.3% \n \n \n \n \n 15.3% \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Adjusted operating profit \n \n \n \n \n 51.1 \n \n \n \n \n 34.0 \n \n \n \n \n 50.3% \n \n \n \n \n 46.2% \n \n \n \n \n \n \n Adjusted profit before tax \n \n \n \n \n 45.2 \n \n \n \n \n 31.9 \n \n \n \n \n 41.5% \n \n \n \n \n 37.5% \n \n \n \n \n \n \n Adjusted profit after tax \n \n \n \n \n 34.1 \n \n \n \n \n 23.9 \n \n \n \n \n 42.3% \n \n \n \n \n 39.0% \n \n \n \n \n \n \n Adjusted EPS - pence \n \n \n \n \n 36.08 \n \n \n \n \n 25.63 \n \n \n \n \n 40.8% \n \n \n \n \n \n \n \n \n \n \n \n \n \n Adjusted net debt ratio \n \n \n \n \n 1.6x \n \n \n \n \n 1.4x \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n   \n \n \n \n \n 1 \n \n Total of interim and final dividends. 2021 excludes the special dividend of 3.0p per share \n \n \n \n 2 \n \n Definitions of the alternative performance measures are set out in note \n 1 \n \n \n   \n \n \n \n Financial highlights \n \n \n \n ·   \n Record financial performance and further market share gains achieved \n \n \n ·   \n Revenue increased 40.7% to £1,204.1m (2021: £856.0m), performance reflects strong organic growth globally and the performance of the acquisitions of DVS and Nimans \n \n \n ·   \n Revenue growth of 38.6% at constant exchange rates, including 20.7% organic growth \n \n \n ·   \n Adjusted profit before tax growth of 41.5% to £45.2m (37.5% on a constant currency basis) \n \n \n ·   \n Net debt to Adjusted EBITDA at the period end reduced to 1.6 times from the interim period, well within the Board's comfort range \n \n \n ·   \n Proposed final dividend of 10.5p bringing the full year dividend to 15.0p (2021: 11.1p excluding the special dividend of 3.0p per share) \n \n \n \n   \n \n \n \n \n Operational highlights \n \n \n \n ·   \n Two UK acquisitions, DVS and Nimans, strengthen our unified communications offering and bring video security capabilities \n \n \n ·   \n Acquisitions have been fully integrated and are delivering a positive net contribution to the Group \n \n \n ·   \n Gross profit margins remained stable at 15.3%, \n in line with the prior year (2021: 15.3%) \n \n \n ·   \n Compound annual growth in revenue and adjusted operating profit since IPO in 2016 of 22% and 19% respectively, testament to the strength of our long-term strategy and the quality of our teams \n \n \n ·   \n Management continues to see a strong future acquisition pipeline across a number of regions and technologies \n \n \n ·   \n Good recovery in \n live events, hospitality and corporate markets \n \n \n ·   \n Post-period end increase in the Group's revolving bank facilities from £80m to £175m to support future delivery of our acquisition pipeline \n \n \n \n   \n \n \n \n \n Stephen Fenby, Managing Director of Midwich Group plc, commented: \n \n \n \n   \n \n \n \"We have delivered an outstanding performance this year, with revenues increasing 40.7% to over £1.2bn, a record level, made significant market share gains and entered new markets. 2022 saw the strongest annual growth in the Group's history and I would like to take this opportunity to thank our employees for their continued hard work, dedication and delivery of our value-added proposition. Our organic growth of 20.7% (2021: 18.9%) was supplemented by a significant contribution from the two UK businesses acquired early in the year. EPS in 2022 was 26.6% higher than in 2019 - the last full pre-pandemic year. \n \n \n   \n \n \n The impact of the pandemic reduced somewhat in the period, with product shortages easing (but not completely) and the cost of shipping containers reducing significantly during the year. We saw the resumption of a significant part of the live events and hospitality markets, and the corporate market strengthened during the year. \n \n \n   \n \n \n Although still early into the new financial year and mindful of the slower general economic conditions and higher interest rate environment, we remain confident that 2023 will see yet another year of growth in excess of the overall market.\" \n \n \n   \n \n \n \n Analyst meeting/webinar \n \n \n \n There will be a meeting and webinar for sell-side analysts at 10.00am GMT today, 14 March 2023, the details of which can be obtained from FTI Consulting: \n \n \n [email protected] \n \n \n . \n \n \n   \n \n \n \n   \n \n For further information: \n \n \n   \n \n \n \n \n \n \n \n Midwich Group plc \n \n \n \n \n Stephen Fenby, Managing Director \n \n \n \n Stephen Lamb, Finance Director \n \n \n \n \n \n +44 (0) \n \n \n 1379 649200 \n \n \n \n \n \n \n \n \n Investec Bank plc \n \n   \n (NOMAD and Joint Broker to Midwich) \n \n \n Carlton Nelson \n / \n Ben Griffiths \n \n \n \n \n \n +44 (0) 20 7597 5970 \n \n \n \n \n \n \n \n \n Berenberg \n \n   \n (Joint Broker to Midwich) \n \n \n \n Ben Wright \n / Richard Andrews / Arnav Kapoor \n \n \n \n \n \n +44 (0) 20 3207 7800 \n \n \n \n \n \n \n \n \n FTI Consulting \n \n \n \n \n Alex Beagley \n / \n Tom Hufton \n /  \n Rafaella de Freitas \n \n \n \n \n \n       +44 (0) 20 3727 1000 \n \n \n \n \n \n [email protected] \n \n \n \n \n \n \n \n \n   \n \n \n \n About Midwich Group \n \n \n \n   \n \n \n Midwich is a specialist AV distributor to the trade market, with operations in the UK and Ireland, EMEA, Asia Pacific and North America. The Group's long-standing relationships with over 600 vendors, including blue-chip organisations, support a comprehensive product portfolio across major audio visual categories such as large format displays, projectors, digital signage and professional audio. The Group operates as the sole or largest in-country distributor for a number of its vendors in their respective product sets. \n \n \n   \n \n \n The Directors attribute this position to the Group's technical expertise, extensive product knowledge and strong customer service offering built up over a number of years. The Group has a large and diverse base of over 22,000 customers, most of which are professional AV integrators and IT resellers serving sectors such as corporate, education, retail, residential and hospitality. Although the Group does not sell directly to end users, it believes that the majority of its products are used by commercial and educational establishments rather than consumers. \n \n \n   \n \n \n Initially a UK only distributor, the Group now has around 1,500 employees across the UK and Ireland, EMEA, Asia Pacific and North America. A core component of the Group's growth strategy is further expansion of its international operations and footprint into strategically targeted jurisdictions. \n \n \n   \n \n \n For further information, please visit  \n \n \n www.midwichgroupplc.com \n \n \n \n \n   \n \n \n \n   \n \n \n   \n \n \n \n \n Chairman's Statement \n \n \n \n   \n \n \n I am delighted that the Group once again achieved record results in 2022. This was a milestone year, with exceptional profit growth and sales exceeding £1bn for the first time. The Pro AV market can be characterised by the breadth of product offering to a wide spectrum of end users in a market that has consistently grown above GDP for over twenty years. The overall market continues to demonstrate robust levels of demand, exceeding pre-pandemic levels^ in 2022 despite the impact of product shortages during the year. \n \n \n Midwich Group once again made significant market share gains in the year, with revenue growth of 40.7% (organic revenue growth of 20.7%) to £1.2bn against an estimated market growth of 10.5%^. The Group has achieved compound annual growth in revenue and adjusted operating profit since our IPO in 2016 of 22% and 19% respectively, which is testament to the strength of our long-term strategy and the quality of our teams. \n \n \n Looking to the future, the Pro AV market is forecast to grow by an average of 5.9%^ per annum for the next five years and the Group is well placed to benefit from this. Despite the scale of the Group's revenue in 2022, it represented less than 1% of the global Pro AV market which provides significant opportunity for future growth. \n \n \n On a macroeconomic level, 2022 was characterised by change and uncertainty, but, after two years of significant disruption from issues such as computer chip and product shortages, post-Brexit customs arrangements and labour shortages in logistics, the AV market largely returned to normal. In the second half of the year supply chains, for all but the most specialist products, were stable, global shipping costs reduced and inflationary pressures in the AV industry were generally below those in the wider economy. Whilst the industry is not immune from recession, the Board feels that the structural increase in the use of AV solutions combined with post-pandemic changes in behaviour will result in robust AV demand in the years ahead. \n \n \n Alongside record organic growth, I am pleased that the Group was also able to achieve further strategic milestones, which included: \n \n \n The Group's acquisition of a controlling stake in Cooper Projects Limited, the UK-based parent company of DVS Limited (\"DVS\"), in January 2022 marked its entry into the distribution of video security products. This is a significant segment of the AV market in which the Group had little presence. The knowledge and support of the experienced DVS team bring opportunities for our customers in an increasingly converging technology market. \n \n \n In February 2022, the Group acquired Nimans Limited (\"Nimans\") which is a UK based specialist distributor of unified communications, telecoms, collaboration and audio visual technologies. Based near Manchester, Nimans was founded in 1981 and has built a strong presence and reputation in the UK telephony hardware market. In recent years the business has expanded successfully into new market areas such as unified communications, VOIP solutions, security and networking. Key brand relationships include Yealink, Jabra and BT. The acquisition brought 2,500 telephony, IT and retail customers to the Group. \n \n \n The integration of both businesses is progressing well, delivering some exciting revenue synergies in the first year, and we have thoroughly enjoyed welcoming the DVS and Nimans teams to the Group. \n \n \n We anticipate a continuation of our expansion strategy through both organic growth and acquisition of complementary businesses and with that in mind, early in 2023, we increased our revolving credit facility to £175m. \n \n \n ^ Source: AVIXA \n \n \n   \n \n Dividend \n \n \n \n The Board understands the importance of dividends for many of our investors and is pleased to recommend a final dividend of 10.5p per share which, if approved, will be paid on 16 June 2023 to all shareholders on the register as on 5 May 2023. The last day to elect for dividend reinvestment (\"DRIP\") is 26 May 2023. With the already announced interim dividend of 4.5p per share, this represents a total dividend for the year of 15.0p per share. The combined value of the interim and proposed final dividends is covered 2.4 times by adjusted earnings. \n \n \n The Board continues to support a progressive dividend policy to reflect the Group's strong growth and cash flow. While there is no hard or fixed target, in order to allow for continued investment in targeted acquisitions, the Board anticipates that future dividends will continue to be covered in the range of 2.0 to 2.5 times adjusted earnings per share. \n \n \n   \n \n Board \n \n \n \n Membership of the Board has remained stable throughout the year, and we have moved to a hybrid approach to our meetings, mixing in person with unified communications solutions for our meetings. The Board met ten times during the year and received regular updates from the Executive Leadership Team (\"ELT\"). \n \n \n In line with prior years, the Board completed a self-evaluation exercise during 2022, reinforcing our commitment to, and success in, establishing a strong corporate governance framework. We took the opportunity of this review to confirm our strong and effective governance and reaffirmed the role of the Board and its individual members in ensuring compliance with the QCA code. There were no major issues or concerns raised about the effectiveness of the Board or its individual members. The Nominations Committee has reviewed the skills and experience of Board members individually and collectively and concluded that the size and composition of the Board remain appropriate at this stage of the Group's development. \n \n \n The Group has a broad international footprint with the majority of its revenue coming from outside the UK & Ireland and the Board welcomes the cultural diversity that this brings. The Midwich culture is an open and welcoming one and we have been recognised for this. In 2022, we were named \"Distributor of the Year\" at the AV Awards whilst in 2021 we were named the \"Best place to work\" at the Inavation Awards. The Board understands the importance of diversity of gender and ethnicity and is committed to ensuring that diversity will a be key consideration in the appointment of future directors and senior leaders. \n \n \n The Group is committed to doing the right thing for the wider society; community engagement is embedded in our DNA. This year we have stepped up our work on formalising our approach to Environmental, Social and Governance (\"ESG\") matters by engaging a third party to support us in developing our Midwich Sustainability strategy which we have set out in this year's annual report. \n \n \n The process for establishing our baseline CO2 emissions was completed in 2022 and we are making good progress on finalising our plans and metrics to reduce our carbon emissions. Although the absolute value of CO2 emissions is important, given the historical and planned growth of the Group, the Board considers that emissions divided by revenue is a more relevant KPI. \n \n \n As an AIM listed company, the Mandatory Climate-related Financial Disclosures are not yet applicable to the Group, but as a Board we are on track to report Group wide data for the 2023 financial year. \n \n \n The Group continues to apply the QCA code as its governance framework. The Board has reviewed all aspects of compliance and continues to believe that it meets or exceeds the requirements of the code. We go beyond the QCA code requirements through the inclusion of a comprehensive directors' remuneration report and an annual advisory vote on this at the AGM. We continue to engage with our largest shareholders including seeking input into our sustainability strategy and inviting them to join us at our capital markets day and AV trade show in October 2022. \n \n \n The Board recognises its duty to have regard to broader stakeholder interests and, in addition to developing our sustainability strategy this year, our teams shared industry-leading ideas with a wide audience through our Midwich Live social media broadcasts. \n \n \n \n People \n \n \n \n The success of any company is down to the quality of its leadership and its people. I believe that we have the best teams in the industry, and they have once again delivered exceptional service to vendors, customers and end users alike. The Board has a strong belief in rewarding success and ensuring that engagement levels are high. Share ownership by our people is a core part of our engagement strategy and I believe that our employee share plans have incentivised the exceptional business performance. In 2022, I was also delighted to see how our country managing directors responded to the cost-of-living pressures. Our business leaders acted to support our people through a mix of accelerated pay reviews, a step up in staff benefits and a focus on wellbeing. After the disruption from Covid-19, I was extremely pleased to see our offices buzzing once again in 2022. Our teams address every challenge with commitment and determination, and it is this positive approach that is the main driver of our market share gains and continued growth. \n \n \n The Board has regular interaction with the ELT, which comprises the executive directors together with the managing directors of our key operating units. We have been delighted with the ELT's success in delivering strategic goals at the same time as leading the Group's record performance. This regional leadership model is working well and is fully aligned to the Group's long-term growth ambitions. \n \n \n On behalf of the Board, I would like to thank all employees and our partners for their commitment and hard work and congratulate them on achieving an impressive performance in an exceptionally challenging year. \n \n \n \n Andrew Herbert \n \n \n \n \n Non-executive Chairman \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n Managing Director's review \n \n \n \n \n   \n \n \n \n \n Overview \n \n \n \n The performance of the Group in 2022 was outstanding, with revenues increasing 40.7% to over £1.2bn and adjusted profit before tax of £45.2m being 41.5% up on 2021. Our organic revenue growth of 20.7% (2021: 18.9%) was supplemented by a significant contribution from the two UK businesses we acquired early in the year. \n \n \n On a constant currency basis, organic growth was between 14% and 18% in all regions except for North America where we grew at 60%. \n \n \n The impact of the pandemic reduced somewhat in the period, with product shortages easing (but not completely) and the cost of shipping containers reducing significantly during the year. We saw the resumption of a significant part of the live events and hospitality markets, and the corporate market strengthened during the year. Although only a small part of the business, demand for consumer products was suppressed during the year, and lower consumer demand generally appears to have had a negative impact on investment by high street retailers. \n \n \n Our team worked very well in dealing with sporadic product supplies, particularly in the earlier part of the year where it was important to ensure that we had sufficient product for our customers' needs. Subsequently, in some parts of the market (such as displays), manufacturers accelerated production very rapidly which led to the oversupply of product which required careful inventory management. \n \n \n Cash flow was good, particularly given the strong organic growth in the business. Adjusted net debt to adjusted EBITDA of 1.6 times at the year-end (2021 1.4 times) was comfortably within the Board's target range and demonstrates the Group's ability to deleverage post the two acquisitions completed this year. \n \n \n \n Strong organic revenue growth outperforms the market significantly \n \n \n \n Group organic revenue growth was 20.7% on a constant currency basis. This compares with Avixa's estimated growth in the global AV market of 10.5% in 2022. \n \n \n   \n \n \n \n Steady improvement in most end user markets \n \n \n \n We saw a steady improvement in a number of end user markets that have been quieter since the start of the pandemic. The corporate market was stronger for us, with demand for our offering of unified communication and collaboration products showing the greatest improvement. The live events, hospitality and entertainment markets also improved during the year as in-person activity resumed. \n \n \n The retail market has remained relatively subdued - a reflection of relatively tough trading conditions. Avixa anticipates that this market may not return to 2019 levels until 2025. We believe that this market has historically accounted for around 5% of Group revenue. \n \n \n \n Operating margin improvement \n \n \n \n The Group's adjusted operating margin improved from 4.0% in 2021 to 4.2% in 2022. Gross margins were in line with the prior year whilst better operating leverage led to an improvement in net margins. \n \n \n The gross margin was positively impacted by strong growth in our higher margin professional audio business and relatively strong margins from businesses acquired in the year. However, these were offset by a negative swing in the provision for aged stock. In 2021, the gross margin was positively impacted by an aged stock provision release, whereas a charge was seen in 2022. Excluding these provision movements, the gross margin would have been 0.5% higher in 2022 than in 2021. \n \n \n \n Strong contribution from acquisitions \n \n \n \n The Group acquired two significant businesses early in the year, Cooper Projects (trading as DVS) and Nimans. Combined, these two businesses contributed total revenue of £154m at a gross profit level marginally ahead of the Group average and with a strong contribution to net profit, after funding costs. The acquired businesses are based in the UK and either strengthen our existing technical capabilities (such as in unified communications in the case of Nimans) or move the Group into new market areas (CCTV and access control in the case of DVS). \n \n \n   \n \n Profitability and cash generation \n \n \n \n Adjusted profit before tax increased by 41.5% to reach £45.2m - a new record for the Group. In addition to maximising profitability, we continued to focus on managing our cash flow. The significant organic growth experienced in 2022, plus the cash outflow from acquisitions, meant that adjusted net debt increased from around £58m to £96m. At 31 December 2022, the ratio of adjusted net debt to adjusted EBITDA was 1.6 times - well within the Board's target range. The Board considers that cash conversion of 54.3% is satisfactory given the strong organic growth of the business. Our expectation of long-term cash conversion remains between 70% and 80%. \n \n \n \n Group strategy remains unchanged \n \n \n \n Our Group strategy focuses on long-term profit growth driven by increasing specialisation, expanding our geographical \n \n \n footprint and growing the scale of the business. The Board reviews the validity of this strategy on a regular basis and \n \n \n believes that it continues to provide a sound basis for the future development of the business. \n \n \n \n Technologies \n \n \n \n In broad terms, we categorise our products into mainstream and specialist categories. Mainstream products cover displays and projectors, which comprised an aggregate of 40.4% of Group revenue in 2022 (2021: 50%). Specialist categories cover technologies which require greater pre and post-sales support and hence tend to carry higher margins. This group covers categories such as audio, technical video and broadcast and represented 54% of total sales compared with 43% in 2021. A core part of the Group's long term strategic focus is to become more specialist. \n \n \n Our largest technology area is displays, a category which grew by 16% in 2022 and is now 30% larger than it was in the pre Covid year of 2019. Growth was strong across all geographical regions. LED displays experienced very strong growth, in excess of 60% in the year, and we believe we have established a strong market position in this category.  These products require a higher level of expertise to distribute effectively, and hence tend to carry a higher overall gross margin. \n \n \n Revenue from projector sales increased by 8% in 2022 (2021: 6%), with the UK&I once again achieving the most significant growth due to its focus on high-end projection. Whilst the overall projector market continues to be impacted by a shift towards displays, we believe that we gained market share in this category through our focus on high-end projection. \n \n \n Growing our technical product categories has been a particular focus of the business for many years and in 2022 revenues in this category increased by over 76% (2021: 50%). As expected, after two particularly strong years, revenues in the broadcast segment declined in 2022. However, we saw strong growth in professional audio, particularly in EMEA. Revenues from lighting products increased by 60% as live events returned in 2022. Other technical product categories grew, with the two acquisitions contributing to a new category of security products and also expanding our unified communications revenues. \n \n \n \n Outlook \n \n \n \n The Group has a proven capability to grow ahead of its markets both organically and through acquisition. I believe that our standing with customers and vendors alike continues to go from strength to strength. However, our team is not complacent - we recognise that we operate in a competitive market where both vendors and customers have a choice of which partners to work with. Our focus is to ensure that we provide the best service possible and continue to develop our service offering. We have a strong pipeline of acquisition opportunities which will enable us to enter new geographical markets and expand our range of products. \n \n \n With the global AV market expected by Avixa to grow at 5.9% per annum over the five years to 2027, I believe our Group is very well positioned for the future. \n \n \n Although still early into the new financial year and mindful of the slower general economic conditions and higher interest rate environment, we remain confident that 2023 will see yet another year of growth in excess of the overall market. \n \n \n \n NORTH AMERICA \n \n \n \n Starin, our North American business, performed well in the year, with revenues increasing by 78.2% to £123.1m (60.0% on a constant currency basis). The gross margin of 14% achieved in the year was below the 2021 level, but we believe it is still strong for a business in the US market. Our 2021 profitability in this region was particularly positively impacted by aged stock provision movements. \n \n \n Our focus in North America has been to expand our sales and business management teams, to gain market share through high service levels and to win strong new brands. In each of these respects the business performed well in 2022. \n \n \n Adjusted operating profit was £6.4m - a 41.3% increase on 2021 (27.1% in constant currency) and 5.2% of revenue in the year. \n \n \n \n UK & IRELAND \n \n \n \n Revenues in the UK&I grew by 72.1% to £492m. This included organic revenue growth of 18.4%. Technical product categories, such as audio and lighting, were particularly strong, as were high-end projector sales. The gross margin percentage in this division increased from 15.8% to 16.1% despite an increase in the aged stock provision. \n \n \n Adjusted operating profit more than doubled from £12.7m to £26.5m due to strong contributions from both organic growth and the acquired companies. \n \n \n \n EMEA \n \n \n \n The EMEA region comprises our businesses in France, Germany, Switzerland, Benelux, Norway, Italy, Iberia and the Middle East. Revenues, on a constant currency basis, increased by 16.8% to £535.0m, with organic growth also being 16.8%. \n \n \n Our audio-focused higher margin businesses in Iberia, Italy and the Middle East performed particularly well in the year with the return of in-person activities and improved availability of product. We saw high single digit revenue growth in the main territories of Germany and France. Gross margins remained flat in France but declined marginally in Germany due to a change in product mix. \n \n \n Gross margins in EMEA decreased by 0.1% to 14.6%. \n \n \n Adjusted operating profit in EMEA increased by 6.4% (3.2% on a constant currency basis). \n \n \n \n ASIA PACIFIC \n \n \n \n After a slow start, due to extended pandemic restrictions, our Asia Pacific business improved in the latter part of the year and finished with revenue growth of 18.5% to £53.8m (14.3% growth on a constant currency basis). The overall gross margin percentage dropped slightly due to a relatively strong performance in the lower margin displays product category. \n \n \n Adjusted operating profit of £1.4m was 48.8% higher in 2021 (42.3% on a constant currency basis). \n \n \n \n Financial Review \n \n \n \n   \n \n \n 2022 was an exceptional year for Midwich Group; we achieved record revenue growth and made further significant market share gains which resulted in revenue of £1.2bn (2021: £856m). \n \n \n Excluding the impact of acquisitions and currency movements, organic revenue increased by 20.7% (2021: 18.9%) whilst gross profit margin was in line with the prior year at 15.3% (2021: 15.3%). \n \n \n Adjusted operating profit of £51.1m (2021: £34.0m) was a Group record and up by 46% at constant currency (2021: 110%). Statutory operating profit (before adjustments) was £35.1m (2021: £21.0m). \n \n \n Our adjusted net debt to adjusted EBITDA ratio at 1.6x (2021 1.4x) positions us well for future acquisitions and in January 2023 we increased our revolving credit facility to £175m which gives us funding capacity to support our growth strategy. \n \n \n \n Statutory financial highlights \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Year to 31 \n \n \n \n \n December \n \n \n \n \n 2022 \n \n \n \n \n \n Year to 31 \n \n \n December \n \n \n 2021 \n \n \n \n \n Total \n \n \n growth \n \n \n \n \n \n \n Revenue \n \n \n \n \n \n £1,204.1m \n \n \n \n \n \n £856.0m \n \n \n \n \n 41% \n \n \n \n \n \n \n Gross profit \n \n \n \n \n \n £183.7m \n \n \n \n \n \n £131.3m \n \n \n \n \n 40% \n \n \n \n \n \n \n Operating profit \n \n \n \n \n \n £35.1m \n \n \n \n \n \n £21.0m \n \n \n \n \n 67% \n \n \n \n \n \n \n Profit before tax \n \n \n \n \n \n £24.9m \n \n \n \n \n \n £18.9m \n \n \n \n \n 32% \n \n \n \n \n \n \n Profit after tax \n \n \n \n \n \n £16.9m \n \n \n \n \n \n £13.5m \n \n \n \n \n 25% \n \n \n \n \n \n \n Basic EPS - pence \n \n \n \n \n \n 17.32p \n \n \n \n \n \n 14.11p \n \n \n \n \n 23% \n \n \n \n \n \n \n \n Adjusted financial highlights 1 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Year to 31 \n \n \n \n \n December \n \n \n \n \n 2022 \n \n \n \n \n \n Year to 31 \n \n \n December \n \n \n 2021 \n \n \n \n \n Total \n \n \n growth \n \n \n \n \n Growth at \n \n \n constant \n \n \n currency \n \n \n \n \n \n \n Revenue \n \n \n \n \n \n £1,204.1m \n \n \n \n \n \n £856.0m \n \n \n \n \n 41% \n \n \n \n \n 39% \n \n \n \n \n \n \n Gross profit \n \n \n \n \n \n £183.7m \n \n \n \n \n \n £131.3m \n \n \n \n \n 40% \n \n \n \n \n 38% \n \n \n \n \n \n \n Gross profit margin % \n \n \n \n \n \n 15.3% \n \n \n \n \n \n 15.3% \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Adjusted operating profit \n \n \n \n \n \n £51.1m \n \n \n \n \n \n £34.0m \n \n \n \n \n 50% \n \n \n \n \n 46% \n \n \n \n \n \n \n Adjusted profit before tax \n \n \n \n \n \n £45.2m \n \n \n \n \n \n £31.9m \n \n \n \n \n 41% \n \n \n \n \n 38% \n \n \n \n \n \n \n Adjusted profit after tax \n \n \n \n \n \n £34.1m \n \n \n \n \n \n £23.9m \n \n \n \n \n 42% \n \n \n \n \n 39% \n \n \n \n \n \n \n Adjusted EPS - pence \n \n \n \n \n \n 36.08p \n \n \n \n \n \n 25.63p \n \n \n \n \n 41% \n \n \n \n \n \n \n \n \n \n \n \n \n \n 1      Definitions of the alternative performance measures are set out in note 1 to the consolidated financial statements \n \n \n   \n \n \n Currency movements increased Group revenue and adjusted operating profit in the year by 2.1% and 4.1% respectively. The currency impact in the prior year reduced revenue by 2.6% and adjusted operating profit by 4.7%. \n \n \n Organic growth in revenue was 20.7% (2021: 18.9%). \n \n \n The Group's operating segments are the UK and Ireland, EMEA, Asia Pacific and North America. The Group is supported by a central team. \n \n \n \n Regional highlights \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Year to 31 \n \n \n \n \n December \n \n \n \n \n 2022 \n \n \n \n \n £m \n \n \n \n \n \n Year to 31 \n \n \n December \n \n \n 2021 \n \n \n £m \n \n \n \n \n Total \n \n \n growth \n \n \n % \n \n \n \n \n Growth at \n \n \n constant \n \n \n currency \n \n \n % \n \n \n \n \n Organic growth \n \n \n % \n \n \n \n \n \n \n \n Revenue \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n UK & Ireland \n \n \n \n \n \n 492.2 \n \n \n \n \n \n 286.1 \n \n \n \n \n \n 72.1% \n \n \n \n \n \n \n 72.1% \n \n \n \n \n \n \n 18.4% \n \n \n \n \n \n \n \n EMEA \n \n \n \n \n \n 535.0 \n \n \n \n \n \n 455.4 \n \n \n \n \n \n 17.5% \n \n \n \n \n \n \n 16.8% \n \n \n \n \n \n \n 16.8% \n \n \n \n \n \n \n \n Asia Pacific \n \n \n \n \n \n 53.8 \n \n \n \n \n \n 45.4 \n \n \n \n \n \n 18.5% \n \n \n \n \n \n \n 14.3% \n \n \n \n \n \n \n 14.3% \n \n \n \n \n \n \n \n North America \n \n \n \n \n \n 123.1 \n \n \n \n \n \n 69.1 \n \n \n \n \n \n 78.2% \n \n \n \n \n \n \n 60.0% \n \n \n \n \n \n \n 60.0% \n \n \n \n \n \n \n \n \n Total Global \n \n \n \n \n \n \n 1,204.1 \n \n \n \n \n \n 856.0 \n \n \n \n \n \n 40.7% \n \n \n \n \n \n \n 38.6% \n \n \n \n \n \n \n 20.7% \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Gross profit margin \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n UK & Ireland \n \n \n \n \n \n 16.1% \n \n \n \n \n \n 15.8% \n \n \n \n \n \n 0.3ppts \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n EMEA \n \n \n \n \n \n 14.6% \n \n \n \n \n \n 14.7% \n \n \n \n \n \n (0.1)ppts \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Asia Pacific \n \n \n \n \n \n 17.3% \n \n \n \n \n \n 17.5% \n \n \n \n \n \n (0.2)ppts \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n North America \n \n \n \n \n \n 14.0% \n \n \n \n \n \n 15.9% \n \n \n \n \n \n (1.9)ppts \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Total Global \n \n \n \n \n \n \n 15.3% \n \n \n \n \n \n 15.3% \n \n \n \n \n \n 0.0ppts \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Adjusted operating profit 1 \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n UK & Ireland \n \n \n \n \n \n 26.5 \n \n \n \n \n \n 12.7 \n \n \n \n \n \n 108.3% \n \n \n \n \n \n \n 108.5% \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n EMEA \n \n \n \n \n \n 22.7 \n \n \n \n \n \n 21.4 \n \n \n \n \n \n 6.4% \n \n \n \n \n \n \n 3.2% \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Asia Pacific \n \n \n \n \n \n 1.4 \n \n \n \n \n \n 0.9 \n \n \n \n \n \n 48.8% \n \n \n \n \n \n \n 42.3% \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n North America \n \n \n \n \n \n 6.4 \n \n \n \n \n \n 4.6 \n \n \n \n \n \n 41.3% \n \n \n \n \n \n \n 27.1% \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Group costs \n \n \n \n \n \n (5.9) \n \n \n \n \n \n (5.5) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Total Global \n \n \n \n \n \n \n 51.1 \n \n \n \n \n \n 34.0 \n \n \n \n \n \n 50.3% \n \n \n \n \n \n \n 46.2% \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Adjusted finance costs \n \n \n \n \n \n (5.9) \n \n \n \n \n \n (2.1) \n \n \n \n \n \n 183.5% \n \n \n \n \n \n \n 178.4% \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Adjusted profit before tax 1 \n \n \n \n \n \n \n 45.2 \n \n \n \n \n \n 31.9 \n \n \n \n \n \n 41.5% \n \n \n \n \n \n \n 37.5% \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 1. Definitions of the alternative performance measures are set out in note 1 to the consolidated financial statements. \n \n \n   \n \n \n The financial performance of each segment during the year was: \n \n \n \n UK & IRELAND \n \n \n \n The UK and Ireland segment revenue increased by 72.1% (2021: 27.5%) to £492.2m (2021: £286.1m). The revenue growth included the contribution from the DVS and Nimans acquisitions at the start of the year. Organic revenue growth was 18.4% (2021: 27.7%). The UK&I generated gross profit of £79.1m (2021: £45.3m) at a gross profit margin of 16.1% (2021: 15.8%). This resulted in an adjusted operating profit of £26.5m (2021: £12.7m), an increase of 108.3% (2021: 224.8%). \n \n \n \n EMEA \n \n \n \n The EMEA segment revenue grew 17.5% (2021: 37.5%) to £535.0m (2021: £455.4m). Gross profit increased to £78.0m (2021: £67.0m) at a gross profit margin of 14.6% (2021: 14.7%), with the slight erosion in margin attributable to a £1.4m increase in the aged inventory provision (2021: £1.2m gain). The region produced an adjusted operating profit of £22.7m (2021: £21.4m), an increase of 6.4% (2021: 127.4%). In constant currency, revenue grew 16.8% (2021: 41.8%) and adjusted operating profit increased 3.2% (2021: 132.8%). \n \n \n \n ASIA PACIFIC \n \n \n \n The Asia Pacific segment revenue grew by 18.5% to £53.8m (2021: £45.4m), generating gross profit of £9.3m (2021: £8.0m) at a gross profit margin of 17.3% (2021: 17.5%). Adjusted operating profit was £1.4m (2021: £0.9m). On a constant currency basis, revenue increased by 14.3% (2021: 1.4%) and adjusted operating profit grew 42.3% (2021: 9.3%). \n \n \n \n NORTH AMERICA \n \n \n \n The North America segment achieved very strong growth of 78.2% (2021: (38.1%) due to the exit of fulfilment activity in 2020) to £123.1m (2021: £69.1m). Gross margins were 14.0% (2021: 15.9%) with adjusted operating profit up by 41.3% (2021: (7.2%) to £6.4m (2021: £4.6m). On constant currency basis, excluding the impact of the stronger US$, revenue increased by 60.0% (2021: (34.3%)) and adjusted operating profit grew 27.1% (2021: (2.2%)). \n \n \n \n Group costs \n \n \n \n Group costs for the year were £5.9m (2021: £5.5m). Group costs include central support for acquisitions, sales, finance, compliance, human resources, information technology and executive management. \n \n \n \n Adjusted finance costs \n \n \n \n Adjusted finance costs at £5.9m (2021: £2.1m) reflect the interest costs on borrowings for historical acquisition investments and working capital together with the costs associated with hedging instruments for the purchase of goods in non-domestic currencies. Finance costs increased during the year mainly because of interest rate increases during the period. Reported finance costs of £10.2m (2021: £2.1m) include interest costs on Group borrowings, the change in valuation of both deferred consideration and put and call options and the revaluation of loans and financial instruments. \n \n \n \n Profit before tax \n \n \n \n The Group reported a profit before taxation of £24.9m (2021: £18.9m) and adjusted profit before tax of £45.2m (2021: £31.9m), the increase using constant currency rates was 37.5% (2021: 130.3%). \n \n \n \n Tax \n \n \n \n The adjusted effective tax rate was 24.5% in 2022 (2021: 25.0%) which reflects the mix of tax rates in the geographies where the Group operates. \n \n \n \n Earnings per share \n \n \n \n Basic earnings per share is calculated on the total profit of the Group attributable to shareholders. Basic EPS for the year was 17.32p (2021: 14.11p). Adjusted EPS increased by 41% (2021: 129%) to 36.08p (2021: 25.63p). \n \n \n \n Dividend \n \n \n \n The Board has recommended a final dividend of 10.5p per share which, together with the interim dividend of 4.5p per share, gives a total dividend for 2022 of 15.0p per share (2021: 14.1p including a special dividend of 3.0p per share). If approved by shareholders at the AGM the final dividend will be paid on 16 June 2023 to shareholders on the register on 5 May 2023. The last day to elect for dividend reinvestment (\"DRIP\") is 26 May 2023. \n \n \n \n   \n \n \n \n \n Cash flow \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Year to 31 \n \n \n \n \n December \n \n \n \n \n 2022 \n \n \n \n \n £m \n \n \n \n \n \n Year to 31 \n \n \n December \n \n \n 2021 \n \n \n £m \n \n \n \n \n \n \n Adjusted operating profit \n \n \n \n \n \n 51.1 \n \n \n \n \n \n 34.0 \n \n \n \n \n \n \n Add back depreciation and unadjusted amortisation \n \n \n \n \n \n 7.4 \n \n \n \n \n \n 6.1 \n \n \n \n \n \n \n Adjusted EBITDA \n \n \n \n \n \n 58.5 \n \n \n \n \n \n 40.1 \n \n \n \n \n \n \n Decrease/(Increase) in stocks \n \n \n \n \n \n (15.7) \n \n \n \n \n \n (36.5) \n \n \n \n \n \n \n Decrease/(Increase) in debtors \n \n \n \n \n \n (70.7) \n \n \n \n \n \n (12.5) \n \n \n \n \n \n \n (Decrease)/Increase in creditors 1 \n \n \n \n \n \n 59.6 \n \n \n \n \n \n 27.0 \n \n \n \n \n \n \n Adjusted cash flow from operations \n \n \n \n \n \n 31.7 \n \n \n \n \n \n 18.1 \n \n \n \n \n \n \n Adjusted EBITDA cash conversion \n \n \n \n \n \n 54.3% \n \n \n \n \n \n 45.2% \n \n \n \n \n \n \n 1. Excluding the movement in accruals for employer taxes on share based payments. \n \n \n   \n \n \n The Group's adjusted operating cash flow conversion, calculated comparing adjusted cash flow from operations with adjusted EBITDA, was 54.3% (2021: 45.2%). The exceptional revenue growth rate led to a step up in the absolute value of working capital in 2022 which resulted in cash conversion below the long-term average for the Group. Our expectation of long-term cash conversion remains between 70% and 80%. \n \n \n Gross capital spend on tangible assets was £5.3m (2021: £3.6m) and included investment in new offices in Germany and Australia and the fit-out of experience centres in the Middle East, Germany and Spain together with rental asset purchases in UK&I. An investment of £5.8m in intangible fixed assets included £5.3m (2021: £1.6m) in relation to the Group's new ERP solution. \n \n \n \n Net debt \n \n \n \n Reported net debt increased from £79.0m at 31 December 2021 to £119.4m at 31 December 2022. The Group's reported net debt continues to be impacted by the adoption of IFRS 16 in 2019 which results in approximately £23.4m of lease liabilities (2021: £21m) being added to net debt. As noted in the prior year, the Group's focus is net debt excluding leases (\"Adjusted net debt\"). The impact of leases on net debt is excluded from the Group's main banking covenants. \n \n \n Adjusted net debt at 31 December 2022 was £96.0m (2021: £58.0m). The increase was largely driven by the investment in working capital together with payments for acquisitions and deferred consideration. \n \n \n In January 2023, the Group increased its revolving credit facility to £175m (£80m at 31 December 2021) to finance future acquisitions. This facility is supported by six banks, is for a 4½ year term, and has an adjusted net debt to adjusted EBITDA covenant ratio of 3 times and an adjusted interest cover covenant of 4 times adjusted EBITDA. The EBITDA covenant is calculated on a historical twelve-month basis and includes the full benefit of the prior year's earnings of any businesses acquired. \n \n \n Most of the Group's other borrowing facilities are to provide working capital financing. Whilst the use of such facilities is typically linked to trading activity in the borrowing company these facilities provide liquidity, flexibility and headroom to support the Group's organic growth. As at 31 December 2022, the Group has access to total facilities of over £200m (2021: £185m) with an additional £95m added to the RCF post year end. \n \n \n The Group has a strong balance sheet with a closing adjusted net debt/adjusted EBITDA ratio of 1.6x (2021: 1.4x). This, combined with the Group's underlying cash generation, equips it well to fund short-term swings in working capital as well as to continue to pursue accretive acquisitions. The Group targets a long-term adjusted net debt to adjusted EBITDA (including proforma acquisition earnings) range of 1.5x-2.0x, although we may go above this in the short-term following acquisition investments. \n \n \n \n Goodwill and intangible assets \n \n \n \n The Group's goodwill and intangible assets of £111.8m (2021: £73.1m) arise from the various acquisitions undertaken. Each year the Board reviews goodwill for impairment and, as at 31 December 2022, the Board believes there are no indications of impairment. The intangible assets arising from business combinations, for exclusive supplier contracts, customer relationships and brands, are amortised over an appropriate period. \n \n \n \n Working capital \n \n \n \n Working capital management is a core part of the Group's performance. Growth in working capital in the year was driven by organic growth and the impact of acquisitions. As at 31 December 2022, the Group had working capital (trade and other receivables plus inventories less trade and other payables) of £150.7m (2021: £106.1m). This represented 12.5% of current year revenue (2021: 12.4%). The Group uses a range of different techniques to write down inventory to the lower of cost and net realisable value, including a formulaic methodology based on the age of inventory. The aged inventory methodology writes down inventory by a specific percentage based on time elapsed from the purchase date. There was no change in this methodology in the year. As at 31 December 2022 the Group's inventory provision was £18.8m (10.5% of cost) (2021: £15.2m: 11% of cost). \n \n \n \n Adjustments to reported results \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 2022 \n£000 \n \n \n \n \n \n 2021 \n \n \n £000 \n \n \n \n \n \n \n \n Operating profit \n \n \n \n \n \n \n 35,053 \n \n \n \n \n \n 20,980 \n \n \n \n \n \n \n Acquisition costs \n \n \n \n \n \n 435 \n \n \n \n \n \n 486 \n \n \n \n \n \n \n Share based payments \n \n \n \n \n \n 6,031 \n \n \n \n \n \n 4,416 \n \n \n \n \n \n \n Employer taxes on share based payments \n \n \n \n \n \n 176 \n \n \n \n \n \n 904 \n \n \n \n \n \n \n Amortisation of brands, customer and supplier relationships \n \n \n \n \n \n 9,413 \n \n \n \n \n \n 7,226 \n \n \n \n \n \n \n \n Adjusted operating profit \n \n \n \n \n \n \n 51,108 \n \n \n \n \n \n 34,012 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Profit before tax \n \n \n \n \n \n \n 24,916 \n \n \n \n \n \n 18,895 \n \n \n \n \n \n \n Acquisition costs \n \n \n \n \n \n 435 \n \n \n \n \n \n 486 \n \n \n \n \n \n \n Share based payments \n \n \n \n \n \n 6,031 \n \n \n \n \n \n 4,416 \n \n \n \n \n \n \n Employer taxes on share based payments \n \n \n \n \n \n 176 \n \n \n \n \n \n 904 \n \n \n \n \n \n \n Amortisation of brands, customer and supplier relationships \n \n \n \n \n \n 9,413 \n \n \n \n \n \n 7,226 \n \n \n \n \n \n \n Derivative fair value movements and foreign exchange gains and losses on borrowings for acquisitions \n \n \n \n \n \n (1,194) \n \n \n \n \n \n (2,058) \n \n \n \n \n \n \n Finance costs - deferred and contingent consideration \n \n \n \n \n \n 508 \n \n \n \n \n \n 347 \n \n \n \n \n \n \n Finance costs - put option \n \n \n \n \n \n 4,866 \n \n \n \n \n \n 1,696 \n \n \n \n \n \n \n \n Adjusted profit before tax \n \n \n \n \n \n \n 45,151 \n \n \n \n \n \n 31,912 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Profit after tax \n \n \n \n \n \n \n 16,855 \n \n \n \n \n \n 13,473 \n \n \n \n \n \n \n Acquisition costs \n \n \n \n \n \n 435 \n \n \n \n \n \n 486 \n \n \n \n \n \n \n Share based payments \n \n \n \n \n \n 6,031 \n \n \n \n \n \n 4,416 \n \n \n \n \n \n \n Employer taxes on share based payments \n \n \n \n \n \n 176 \n \n \n \n \n \n 904 \n \n \n \n \n \n \n Amortisation of brands, customer and supplier relationships \n \n \n \n \n \n 9,413 \n \n \n \n \n \n 7,226 \n \n \n \n \n \n \n Derivative fair value movements and foreign exchange gains and losses on borrowings for acquisitions \n \n \n \n \n \n (1,194) \n \n \n \n \n \n (2,058) \n \n \n \n \n \n \n Finance costs - deferred and contingent consideration \n \n \n \n \n \n 508 \n \n \n \n \n \n 347 \n \n \n \n \n \n \n Finance costs - put option \n \n \n \n \n \n 4,866 \n \n \n \n \n \n 1,696 \n \n \n \n \n \n \n Tax impact \n \n \n \n \n \n (3,018) \n \n \n \n \n \n (2,545) \n \n \n \n \n \n \n \n Adjusted profit after tax \n \n \n \n \n \n \n 34,072 \n \n \n \n \n \n 23,945 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Profit after tax \n \n \n \n \n \n \n 16,855 \n \n \n \n \n \n 13,473 \n \n \n \n \n \n \n Non-controlling interest \n \n \n \n \n \n 1,562 \n \n \n \n \n \n 1,044 \n \n \n \n \n \n \n \n Profit after tax attributable to owners of the Parent Company \n \n \n \n \n \n \n 15,293 \n \n \n \n \n \n 12,429 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Number of shares for EPS \n \n \n \n \n \n 88,299,098 \n \n \n \n \n \n 88,101,300 \n \n \n \n \n \n \n \n Reported EPS - pence \n \n \n \n \n \n \n 17.32 \n \n \n \n \n \n 14.11 \n \n \n \n \n \n \n \n Adjusted EPS - pence \n \n \n \n \n \n \n 36.08 \n \n \n \n \n \n 25.63 \n \n \n \n \n \n \n The directors present adjusted operating profit, adjusted profit before tax, and adjusted profit after tax as alternative performance measures in order to provide relevant information relating to the performance of the Group. Adjusted profits are a reflection of the underlying trading profit and are important measures used by directors for assessing Group performance. The definitions of the alternative performance measures are set out in note 1 of the notes to the financial statements. \n \n \n \n   \n \n \n \n \n Consolidated income statement for the year ended 31 December 2022 \n \n \n \n \n   \n \n \n \n   \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n Notes \n \n \n \n \n \n \n 2022 \n \n \n \n \n \n \n   \n \n \n \n \n \n \n 2021 \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n   \n \n \n \n \n \n \n £'000 \n \n \n \n \n \n \n   \n \n \n \n \n \n \n £'000 \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Revenue \n \n \n \n \n \n \n \n \n \n \n \n \n 1,204,049 \n \n \n \n \n \n \n \n \n \n \n \n 855,973 \n \n \n \n \n \n \n \n \n \n \n \n \n \n Cost of sales \n \n \n \n \n \n \n \n \n \n \n \n \n (1,020,335) \n \n \n \n \n \n \n \n \n \n \n \n \n \n (724,712) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Gross profit \n \n \n \n \n \n \n \n \n \n \n \n \n 183,714 \n \n \n \n \n \n \n \n \n \n \n \n 131,261 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Distribution costs \n \n \n \n \n \n \n \n \n \n \n \n (109,042) \n \n \n \n \n \n \n \n \n \n \n \n (80,585) \n \n \n \n \n \n \n \n \n \n \n \n \n \n Administrative expenses \n \n \n \n \n \n \n \n \n \n \n \n (45,592) \n \n \n \n \n \n \n \n \n \n \n \n (34,871) \n \n \n \n \n \n \n \n \n \n \n \n \n \n Other operating income \n \n \n \n \n \n \n \n \n \n \n \n 5,973 \n \n \n \n \n \n \n \n \n \n \n \n 5,175 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Operating profit \n \n \n \n \n \n \n \n \n \n \n \n \n \n 35,053 \n \n \n \n \n \n \n \n \n \n \n \n \n \n 20,980 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Comprising \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Adjusted operating profit \n \n \n \n \n \n \n \n \n \n \n \n \n 51,108 \n \n \n \n \n \n \n \n \n \n \n \n 34,012 \n \n \n \n \n \n \n \n \n \n \n \n \n \n Costs of acquisitions \n \n \n \n \n 3 \n \n \n \n \n (435) \n \n \n \n \n \n \n \n \n \n \n \n (486) \n \n \n \n \n \n \n \n \n \n \n \n \n \n Share based payments \n \n \n \n \n \n \n \n \n \n \n \n (6,031) \n \n \n \n \n \n \n \n \n \n \n \n (4,416) \n \n \n \n \n \n \n \n \n \n \n \n \n \n Employer taxes on share based payments \n \n \n \n \n \n \n \n \n \n \n \n (176) \n \n \n \n \n \n \n \n \n \n \n \n (904) \n \n \n \n \n \n \n \n \n \n \n \n \n \n Amortisation of brands, customer relationships, and supplier relationships \n \n \n \n \n \n \n \n \n \n \n \n (9,413) \n \n \n \n \n \n \n \n \n \n \n \n (7,226) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 35,053 \n \n \n \n \n \n \n \n \n \n \n \n 20,980 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Finance income \n \n \n \n \n \n \n \n \n \n \n \n 95 \n \n \n \n \n \n \n \n \n \n \n \n 108 \n \n \n \n \n \n \n \n \n \n \n \n \n \n Finance costs \n \n \n \n \n 4 \n \n \n \n \n \n (10,232) \n \n \n \n \n \n \n \n \n \n \n \n \n \n (2,193) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Profit before taxation \n \n \n \n \n \n \n \n \n \n \n \n \n 24,916 \n \n \n \n \n \n \n \n \n \n \n \n 18,895 \n \n \n \n \n \n \n \n \n \n \n \n \n \n Taxation \n \n \n \n \n \n \n \n \n \n \n \n \n (8,061) \n \n \n \n \n \n \n \n \n \n \n \n \n \n (5,422) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Profit after taxation \n \n \n \n \n \n \n \n \n \n \n \n \n \n 16,855 \n \n \n \n \n \n \n \n \n \n \n \n \n \n 13,473 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Profit for the financial year attributable to: \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n The Company's equity shareholders \n \n \n \n \n \n \n \n \n \n \n \n 15,293 \n \n \n \n \n \n \n \n \n \n \n \n 12,429 \n \n \n \n \n \n \n \n \n \n \n \n \n \n Non-controlling interest \n \n \n \n \n \n \n \n \n \n \n \n 1,562 \n \n \n \n \n \n \n \n \n \n \n \n 1,044 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n   \n \n \n \n \n \n \n 16,855 \n \n \n \n \n \n \n   \n \n \n \n \n \n \n 13,473 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Basic earnings per share \n \n \n \n \n 5 \n \n \n \n \n 17.32p \n \n \n \n \n \n \n \n \n \n \n \n 14.11p \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Diluted earnings per share \n \n \n \n \n 5 \n \n \n \n \n 16.74p \n \n \n \n \n \n \n \n \n \n \n \n 13.76p \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n Consolidated statement of comprehensive income for the year ended 31 December 2022 \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n   \n \n \n \n \n \n \n   \n \n \n \n \n \n \n 2022 \n \n \n \n \n \n \n   \n \n \n \n \n \n \n 2021 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n   \n \n \n \n \n \n \n £'000 \n \n \n \n \n \n \n   \n \n \n \n \n \n \n £'000 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Profit for the financial year \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 16,855 \n \n \n \n \n \n \n \n \n \n \n \n 13,473 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Other comprehensive income \n \n \n \n Items that will not be reclassified subsequently to profit or loss: \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Actuarial gains and (losses) on retirement benefit obligations \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 588 \n \n \n \n \n \n \n \n \n \n \n \n 254 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Items that will be reclassified subsequently to profit or loss: \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Foreign exchange gains and (losses) on consolidation \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 8,282 \n \n \n \n \n \n \n \n \n \n \n \n \n \n (4,710) \n \n \n \n \n \n \n \n \n Other comprehensive income for the financial year, net of tax \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 8,870 \n \n \n \n \n \n \n \n \n \n \n \n (4,456) \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Total comprehensive income for the year \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 25,725 \n \n \n \n \n \n \n \n \n \n \n \n \n \n 9,017 \n \n \n \n \n \n \n \n \n   \n \n \n \n \n Attributable to: \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Owners of the Parent Company \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 23,419 \n \n \n \n \n \n \n \n \n \n \n \n 8,384 \n \n \n \n \n \n \n Non-controlling interests \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 2,306 \n \n \n \n \n \n \n \n \n \n \n \n 633 \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 25,725 \n \n \n \n \n \n \n \n \n \n \n \n \n \n 9,017 \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n \n Consolidated statement of financial position as at 31 December 2022 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n   \n \n \n \n \n \n \n Notes \n \n \n \n \n \n \n \n \n \n \n \n \n \n 2022 \n \n \n \n \n \n \n \n \n \n \n \n \n \n 2021 \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n   \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n Assets \n \n \n \n \n \n \n   \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n £'000 \n \n \n \n \n \n \n \n \n \n \n \n \n \n £'000 \n \n \n \n \n \n \n \n \n Non-current assets \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Goodwill \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 35,765 \n \n \n \n \n \n \n \n \n \n \n \n 21,163 \n \n \n \n \n \n \n Intangible assets \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 76,002 \n \n \n \n \n \n \n \n \n \n \n \n 51,972 \n \n \n \n \n \n \n Right of use assets \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 21,559 \n \n \n \n \n \n \n \n \n \n \n \n 19,826 \n \n \n \n \n \n \n Property, plant and equipment \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 14,961 \n \n \n \n \n \n \n \n \n \n \n \n 11,792 \n \n \n \n \n \n \n Deferred tax assets \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 2,567 \n \n \n \n \n \n \n \n \n \n \n \n \n \n 2,725 \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 150,854 \n \n \n \n \n \n \n \n \n \n \n \n 107,478 \n \n \n \n \n \n \n \n Current assets \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Inventories \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 159,823 \n \n \n \n \n \n \n \n \n \n \n \n 125,825 \n \n \n \n \n \n \n Trade and other receivables \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 218,612 \n \n \n \n \n \n \n \n \n \n \n \n 124,256 \n \n \n \n \n \n \n Derivative financial instruments \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 4,630 \n \n \n \n \n \n \n \n \n \n \n \n 492 \n \n \n \n \n \n \n Cash and cash equivalents \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 25,855 \n \n \n \n \n \n \n \n \n \n \n \n \n \n 15,476 \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 408,920 \n \n \n \n \n \n \n \n \n \n \n \n 266,049 \n \n \n \n \n \n \n \n Current liabilities \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Trade and other payables \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (225,899) \n \n \n \n \n \n \n \n \n \n \n \n (142,546) \n \n \n \n \n \n \n Derivative financial instruments \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (1,483) \n \n \n \n \n \n \n \n \n \n \n \n - \n \n \n \n \n \n \n Put option liabilities over non-controlling interests \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n - \n \n \n \n \n \n \n \n \n \n \n \n (3,863) \n \n \n \n \n \n \n Deferred and contingent considerations \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (9,275) \n \n \n \n \n \n \n \n \n \n \n \n (466) \n \n \n \n \n \n \n Borrowings and financial liabilities \n \n \n \n \n \n \n \n \n \n \n \n 6 \n \n \n \n \n \n \n \n \n \n \n \n (44,955) \n \n \n \n \n \n \n \n \n \n \n \n (34,053) \n \n \n \n \n \n \n Current tax \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (3,541) \n \n \n \n \n \n \n \n \n \n \n \n \n \n (2,869) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (285,153) \n \n \n \n \n \n \n \n \n \n \n \n (183,797) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n Net current assets \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 123,767 \n \n \n \n \n \n \n \n \n \n \n \n 82,252 \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n Total assets less current liabilities \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 274,621 \n \n \n \n \n \n \n \n \n \n \n \n 189,730 \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Non-current liabilities \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Trade and other payables \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (1,872) \n \n \n \n \n \n \n \n \n \n \n \n (1,418) \n \n \n \n \n \n \n Put option liabilities over non-controlling interests \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (15,975) \n \n \n \n \n \n \n \n \n \n \n \n (4,287) \n \n \n \n \n \n \n Deferred and contingent considerations \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (8,157) \n \n \n \n \n \n \n \n \n \n \n \n (1,468) \n \n \n \n \n \n \n Borrowings and financial liabilities \n \n \n \n \n \n \n \n \n \n \n \n 6 \n \n \n \n \n \n \n \n \n \n \n \n (100,324) \n \n \n \n \n \n \n \n \n \n \n \n (60,399) \n \n \n \n \n \n \n Deferred tax liabilities \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (10,576) \n \n \n \n \n \n \n \n \n \n \n \n (5,066) \n \n \n \n \n \n \n Other provisions \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (3,583) \n \n \n \n \n \n \n \n \n \n \n \n \n \n (2,696) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (140,487) \n \n \n \n \n \n \n \n \n \n \n \n (75,334) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Net assets \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 134,134 \n \n \n \n \n \n \n \n \n \n \n \n \n \n 114,396 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Equity \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Share capital \n \n \n \n \n \n \n \n \n \n \n \n 8 \n \n \n \n \n \n \n \n \n \n \n \n 889 \n \n \n \n \n \n \n \n \n \n \n \n 887 \n \n \n \n \n \n \n Share premium \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 67,047 \n \n \n \n \n \n \n \n \n \n \n \n 67,047 \n \n \n \n \n \n \n Share based payment reserve \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 12,025 \n \n \n \n \n \n \n \n \n \n \n \n 7,879 \n \n \n \n \n \n \n Investment in own shares \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (5) \n \n \n \n \n \n \n \n \n \n \n \n (5) \n \n \n \n \n \n \n Retained earnings \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 46,023 \n \n \n \n \n \n \n \n \n \n \n \n 39,078 \n \n \n \n \n \n \n Translation reserve \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 5,356 \n \n \n \n \n \n \n \n \n \n \n \n (2,182) \n \n \n \n \n \n \n Hedging reserve \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n - \n \n \n \n \n \n \n \n \n \n \n \n - \n \n \n \n \n \n \n Put option reserve \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (10,799) \n \n \n \n \n \n \n \n \n \n \n \n (7,784) \n \n \n \n \n \n \n Capital redemption reserve \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 50 \n \n \n \n \n \n \n \n \n \n \n \n 50 \n \n \n \n \n \n \n Other reserve \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 150 \n \n \n \n \n \n \n \n \n \n \n \n \n \n 150 \n \n \n \n \n \n \n \n \n Equity attributable to owners of the Parent Company \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 120,736 \n \n \n \n \n \n \n \n \n \n \n \n 105,120 \n \n \n \n \n \n \n Non-controlling interests \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 13,398 \n \n \n \n \n \n \n \n \n \n \n \n \n \n 9,276 \n \n \n \n \n \n \n \n \n Total equity \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 134,134 \n \n \n \n \n \n \n \n \n \n \n \n \n \n 114,396 \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n The financial statements were approved by the Board of Directors and authorised for issue on 13 March 2023 and were signed on its behalf by: \n \n \n   \n   \n \n \n Mr S B Fenby \n \n \n Director                                                                                                                                             Company registration number: 08793266 \n \n \n \n \n \n \n   \n \n \n \n Consolidated statement of changes in equity for the year ended 31 December 2022 \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n Share \ncapital \n \n \n \n \n \n \n Share premium \n \n \n \n \n \n \n Investment in own shares \n \n \n \n \n \n \n Retained \nearnings \n \n \n \n \n \n \n   \n \n \n \n \n Other reserves \n \n \n \n \n \n \n Equity attributable to owners of the Parent \n \n \n \n \n \n \n Non-controlling interests \n \n \n \n \n \n \n Total \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n £'000 \n \n \n \n \n \n \n £'000 \n \n \n \n \n \n \n £'000 \n \n \n \n \n \n \n £'000 \n \n \n \n \n \n \n £'000 \n \n \n \n \n \n \n £'000 \n \n \n \n \n \n \n £'000 \n \n \n \n \n \n \n £'000 \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n (note \n 8 \n ) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (Note \n 9 \n ) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Balance at 1 January 2022 \n \n \n \n \n \n 887 \n \n \n \n \n 67,047 \n \n \n \n \n (5) \n \n \n \n \n 39,078 \n \n \n \n \n (1,887) \n \n \n \n \n 105,120 \n \n \n \n \n 9,276 \n \n \n \n \n 114,396 \n \n \n \n \n \n \n Profit for the year \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n 15,293 \n \n \n \n \n - \n \n \n \n \n 15,293 \n \n \n \n \n 1,562 \n \n \n \n \n 16,855 \n \n \n \n \n \n \n Other comprehensive income \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n 588 \n \n \n \n \n 7,538 \n \n \n \n \n 8,126 \n \n \n \n \n 744 \n \n \n \n \n 8,870 \n \n \n \n \n \n \n \n Total comprehensive income for the year \n \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n 15,881 \n \n \n \n \n 7,538 \n \n \n \n \n 23,419 \n \n \n \n \n 2,306 \n \n \n \n \n 25,725 \n \n \n \n \n \n \n Shares issued (note \n 8 \n ) \n \n \n \n \n 2 \n \n \n \n \n - \n \n \n \n \n (2) \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n \n \n Share based payments \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n 6,006 \n \n \n \n \n 6,006 \n \n \n \n \n - \n \n \n \n \n 6,006 \n \n \n \n \n \n \n Deferred tax on share based payments \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n (1,093) \n \n \n \n \n (1,093) \n \n \n \n \n - \n \n \n \n \n (1,093) \n \n \n \n \n \n \n Share options exercised \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n 2 \n \n \n \n \n 766 \n \n \n \n \n (767) \n \n \n \n \n 1 \n \n \n \n \n - \n \n \n \n \n 1 \n \n \n \n \n \n \n Acquisition of subsidiaries \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n (6,933) \n \n \n \n \n (6,933) \n \n \n \n \n 6,933 \n \n \n \n \n - \n \n \n \n \n \n \n Dividends paid (note \n 12 \n ) \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n (10,901) \n \n \n \n \n - \n \n \n \n \n (10,901) \n \n \n \n \n - \n \n \n \n \n (10,901) \n \n \n \n \n \n \n Acquisition of non-controlling interest (note \n 10 \n ) \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n 1,199 \n \n \n \n \n 3,918 \n \n \n \n \n 5,117 \n \n \n \n \n (5,117) \n \n \n \n \n - \n \n \n \n \n \n \n \n Balance at 31 December 2022 \n \n \n \n \n \n 889 \n \n \n \n \n 67,047 \n \n \n \n \n (5) \n \n \n \n \n 46,023 \n \n \n \n \n 6,782 \n \n \n \n \n 120,736 \n \n \n \n \n 13,398 \n \n \n \n \n 134,134 \n \n \n \n \n \n \n \n   \n \n \n \n \n For the year ended 31 December 2021 \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n Share \ncapital \n \n \n \n \n \n \n Share premium \n \n \n \n \n \n \n Investment in own shares \n \n \n \n \n \n \n Retained \nearnings \n \n \n \n \n \n \n   \n \n \n \n \n Other reserves \n \n \n \n \n \n \n Equity attributable to owners of the Parent \n \n \n \n \n \n \n Non-controlling interests \n \n \n \n \n \n \n Total \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n £'000 \n \n \n \n \n \n \n £'000 \n \n \n \n \n \n \n £'000 \n \n \n \n \n \n \n £'000 \n \n \n \n \n \n \n £'000 \n \n \n \n \n \n \n £'000 \n \n \n \n \n \n \n £'000 \n \n \n \n \n \n \n £'000 \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n (note \n 8 \n ) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (Note \n 9 \n ) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Balance at 1 January 2021 \n \n \n \n \n \n 886 \n \n \n \n \n 67,047 \n \n \n \n \n (6) \n \n \n \n \n 30,436 \n \n \n \n \n 1,976 \n \n \n \n \n 100,339 \n \n \n \n \n 6,148 \n \n \n \n \n 106,487 \n \n \n \n \n \n \n Profit for the year \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n 12,429 \n \n \n \n \n - \n \n \n \n \n 12,429 \n \n \n \n \n 1,044 \n \n \n \n \n 13,473 \n \n \n \n \n \n \n Other comprehensive income \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n 254 \n \n \n \n \n (4,299) \n \n \n \n \n (4,045) \n \n \n \n \n (411) \n \n \n \n \n (4,456) \n \n \n \n \n \n \n \n Total comprehensive income for the year \n \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n 12,683 \n \n \n \n \n (4,299) \n \n \n \n \n 8,384 \n \n \n \n \n 633 \n \n \n \n \n 9,017 \n \n \n \n \n \n \n Shares issued (note \n 8 \n ) \n \n \n \n \n 1 \n \n \n \n \n - \n \n \n \n \n (1) \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n \n \n Share based payments \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n 4,398 \n \n \n \n \n 4,398 \n \n \n \n \n - \n \n \n \n \n 4,398 \n \n \n \n \n \n \n Deferred tax on share based payments \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n 61 \n \n \n \n \n 61 \n \n \n \n \n - \n \n \n \n \n 61 \n \n \n \n \n \n \n Share options exercised \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n 2 \n \n \n \n \n 1,051 \n \n \n \n \n (1,052) \n \n \n \n \n 1 \n \n \n \n \n - \n \n \n \n \n 1 \n \n \n \n \n \n \n Acquisition of subsidiaries \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n (3,866) \n \n \n \n \n (3,866) \n \n \n \n \n 3,866 \n \n \n \n \n - \n \n \n \n \n \n \n Dividends paid (note \n 12 \n ) \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n (5,568) \n \n \n \n \n - \n \n \n \n \n (5,568) \n \n \n \n \n - \n \n \n \n \n (5,568) \n \n \n \n \n \n \n Acquisition of non-controlling interest (note \n 10 \n ) \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n 476 \n \n \n \n \n 895 \n \n \n \n \n 1,371 \n \n \n \n \n (1,371) \n \n \n \n \n - \n \n \n \n \n \n \n \n Balance at 31 December 2021 \n \n \n \n \n \n 887 \n \n \n \n \n 67,047 \n \n \n \n \n (5) \n \n \n \n \n 39,078 \n \n \n \n \n (1,887) \n \n \n \n \n 105,120 \n \n \n \n \n 9,276 \n \n \n \n \n 114,396 \n \n \n \n \n \n \n \n   \n \n \n \n   \n \n \n \n Consolidated statement of cash flows for the year ended 31 December 2022 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n 2022 \n \n \n \n \n \n \n   \n \n \n \n \n \n \n 2021 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n £'000 \n \n \n \n \n \n \n   \n \n \n \n \n \n \n £'000 \n \n \n \n \n \n \n \n \n Cash flows from operating activities \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Profit before tax \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 24,916 \n \n \n \n \n \n \n \n \n \n \n \n 18,895 \n \n \n \n \n \n \n Depreciation \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 7,039 \n \n \n \n \n \n \n \n \n \n \n \n 5,793 \n \n \n \n \n \n \n Amortisation \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 9,807 \n \n \n \n \n \n \n \n \n \n \n \n 7,502 \n \n \n \n \n \n \n Loss on disposal of assets \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 141 \n \n \n \n \n \n \n \n \n \n \n \n 25 \n \n \n \n \n \n \n Share based payments \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 6,006 \n \n \n \n \n \n \n \n \n \n \n \n 4,398 \n \n \n \n \n \n \n Foreign exchange losses \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 3,827 \n \n \n \n \n \n \n \n \n \n \n \n (1,026) \n \n \n \n \n \n \n Finance income \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (95) \n \n \n \n \n \n \n \n \n \n \n \n (108) \n \n \n \n \n \n \n Finance costs \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 10,232 \n \n \n \n \n \n \n \n \n \n \n \n \n \n 2,193 \n \n \n \n \n \n \n \n Profit from operations before changes in working capital \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 61,873 \n \n \n \n \n \n \n \n \n \n \n \n 37,672 \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Increase in inventories \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (15,670) \n \n \n \n \n \n \n \n \n \n \n \n (36,496) \n \n \n \n \n \n \n Increase in trade and other receivables \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (70,654) \n \n \n \n \n \n \n \n \n \n \n \n (12,473) \n \n \n \n \n \n \n Increase in trade and other payables \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 59,779 \n \n \n \n \n \n \n \n \n \n \n \n \n \n 27,943 \n \n \n \n \n \n \n \n \n Cash inflow from operations \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 35,328 \n \n \n \n \n \n \n \n \n \n \n \n 16,646 \n \n \n \n \n \n \n Income tax paid \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (9,142) \n \n \n \n \n \n \n \n \n \n \n \n \n \n (5,151) \n \n \n \n \n \n \n \n \n Net cash inflow from operating activities \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 26,186 \n \n \n \n \n \n \n \n \n \n \n \n 11,495 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Cash flows from investing activities \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Acquisition of businesses net of cash acquired \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (22,372) \n \n \n \n \n \n \n \n \n \n \n \n (16,836) \n \n \n \n \n \n \n Purchase of intangible assets \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (5,760) \n \n \n \n \n \n \n \n \n \n \n \n (2,401) \n \n \n \n \n \n \n Purchase of plant and equipment \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (5,328) \n \n \n \n \n \n \n \n \n \n \n \n (3,558) \n \n \n \n \n \n \n Proceeds on disposal of plant and equipment \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 140 \n \n \n \n \n \n \n \n \n \n \n \n 253 \n \n \n \n \n \n \n Interest received \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 95 \n \n \n \n \n \n \n \n \n \n \n \n \n \n 108 \n \n \n \n \n \n \n \n \n Net cash used in investing activities \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (33,225) \n \n \n \n \n \n \n \n \n \n \n \n (22,434) \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Net cash flows from financing activities \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Proceeds on exercise of share options \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 1 \n \n \n \n \n \n \n \n \n \n \n \n 1 \n \n \n \n \n \n \n Deferred consideration paid \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (198) \n \n \n \n \n \n \n \n \n \n \n \n (11,265) \n \n \n \n \n \n \n Acquisition of non-controlling interest \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (3,974) \n \n \n \n \n \n \n \n \n \n \n \n (2,055) \n \n \n \n \n \n \n Dividends paid \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (10,901) \n \n \n \n \n \n \n \n \n \n \n \n (5,568) \n \n \n \n \n \n \n Invoice financing inflows/(outflows) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 14,282 \n \n \n \n \n \n \n \n \n \n \n \n 6,261 \n \n \n \n \n \n \n Proceeds from borrowings \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 31,304 \n \n \n \n \n \n \n \n \n \n \n \n 23,222 \n \n \n \n \n \n \n Repayment of loans \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (4,947) \n \n \n \n \n \n \n \n \n \n \n \n (4,660) \n \n \n \n \n \n \n Interest paid \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (5,217) \n \n \n \n \n \n \n \n \n \n \n \n (2,087) \n \n \n \n \n \n \n Interest on leases \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (602) \n \n \n \n \n \n \n \n \n \n \n \n (439) \n \n \n \n \n \n \n Capital element of lease payments \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (4,126) \n \n \n \n \n \n \n \n \n \n \n \n \n \n (3,072) \n \n \n \n \n \n \n \n \n Net cash inflow/(outflow) from financing activities \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 15,622 \n \n \n \n \n \n \n \n \n \n \n \n 338 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Net increase/(decrease) in cash and cash equivalents \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 8,583 \n \n \n \n \n \n \n \n \n \n \n \n (10,601) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Cash and cash equivalents at beginning of financial year \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 11,639 \n \n \n \n \n \n \n \n \n \n \n \n 23,795 \n \n \n \n \n \n \n Effects of exchange rate changes \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 716 \n \n \n \n \n \n \n \n \n \n \n \n \n \n (1,555) \n \n \n \n \n \n \n \n \n Cash and cash equivalents at end of financial year \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 20,938 \n \n \n \n \n \n \n \n \n \n \n \n \n \n 11,639 \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Comprising: \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Cash at bank \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 25,855 \n \n \n \n \n \n \n \n \n \n \n \n 15,476 \n \n \n \n \n \n \n Bank overdrafts \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (4,917) \n \n \n \n \n \n \n \n \n \n \n \n \n \n (3,837) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 20,938 \n \n \n \n \n \n \n \n \n \n \n \n \n \n 11,639 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n Notes to the consolidated financial statements \n \n \n \n \n   \n \n \n \n \n 1.      Accounting policies \n \n \n \n \n   \n \n \n \n \n General information and nature of operations \n \n \n \n Midwich Group plc \n (\"the Company\") is a public limited company incorporated in England and Wales and listed on the London Stock Exchange's Alternative Investment Market (AIM). The principal activity of Midwich Group plc and its subsidiary companies (\"the Group\") is the distribution of Audio Visual Solutions to trade customers. \n \n \n \n Basis of preparation \n \n \n \n The consolidated financial statements of Midwich Group plc have been prepared in accordance with UK adopted International Accounting Standards (\"IAS\") in conformity with the requirements of the Companies Act 2006. \n \n \n The financial statements have been prepared under the historical cost convention as modified for financial instruments at fair value and in accordance with applicable accounting standards. \n \n \n The directors have adopted the going concern basis in preparing the financial information. In assessing whether the going concern assumption is appropriate, the directors have taken into account all relevant available information about the foreseeable future.  \n \n \n \n Basis of consolidation \n \n \n \n The Consolidated Financial Statements incorporate the results of Midwich Group plc and entities controlled by the Company (its subsidiaries). A subsidiary is a company controlled directly by the Group. Control is achieved where the Group has the power over the investee, rights to variable returns and the ability to use the power to affect the investee's returns. Income and expenses of subsidiaries acquired during the year are included in the consolidated income statement from the effective date of control. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the Parent Company. \n \n \n The Group applies the acquisition method of accounting to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred, and the equity interests issued by the Group. Identifiable assets acquired, and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The Group recognises identifiable assets acquired and liabilities assumed in a business combination regardless of whether they have been previously recognised in the acquiree's financial statements prior to the acquisition. Goodwill is stated after separate recognition of identifiable intangible assets. It is calculated as the excess of the sum of a) fair value of consideration transferred, b) the recognised amount of any non-controlling interest in the acquiree and c) acquisition-date fair value of any existing equity interest in the acquiree, over the acquisition-date fair values of identifiable net assets. If the fair values of identifiable net assets exceed the sum calculated above, the excess amount (i.e. gain on a bargain purchase) is recognised in profit or loss immediately. \n \n \n Non-controlling interests in the net assets of consolidated subsidiaries are identified separately within the Group's equity. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the non-controlling shareholders' share of changes in equity since the date of the combination. Non-controlling interests are measured initially at fair value. \n \n \n Acquisition-related costs are expensed as incurred and all intra-group transactions, balances, income and expenses are eliminated in full on consolidation. \n \n \n \n Acquisition of interests from non-controlling shareholders \n \n \n \n Acquisitions of non-controlling interests in subsidiaries are accounted for as transactions between shareholders. There is no remeasurement to fair value of net assets acquired that were previously attributable to non-controlling shareholders. \n \n \n \n Going concern \n \n \n \n In considering the going concern basis for preparing the financial statements, the Board considers the Group's objectives and strategy, its principal risks and uncertainties in achieving its goals and objectives which are set out in the Strategic Report. The Board has undertaken a review of going concern under three scenarios: 1) our base plan, 2) a downside scenario and 3) a reverse stress test for the period to 31 December 2024. The sensitivity stress test is based on a model that allows the Group to assess its liquidity, solvency and compliance with banking covenants based on inputs for future trading performance. Varying the inputs into the model allows the Group to assess the impact of potential adverse trading conditions. \n \n \n The directors consider the working capital and finance facilities of the business to be adequate to fund its operations and growth strategy. The Group has a variety of finance facilities available to it including a revolving credit facility which expires in 2027 and secured invoice discounting facilities which require renewal in the forecast period. The directors are confident that they will be able to renew the secured invoice discounting facilities given the secured nature of the facility and state of the business. Notwithstanding, this represents an uncertainty and further models (base plan and reverse stress test) have been prepared to assess going concern without the use of on demand facilities. The base case continues to demonstrate the Group's ability to continue as a going concern. The reverse stress test demonstrates that the Group can withstand severe adverse trading conditions. In assessing the ability to withstand severe adverse trading conditions, the directors have also considered mitigating actions available to them. \n \n \n There are no material uncertainties that cast significant doubt on the Group's ability to continue as a going concern and the Group continues to adopt the going concern basis in preparing consolidated financial statements. The Group's strategy remains unchanged, and we will continue to focus on profitable organic growth complemented by targeted acquisitions. \n \n \n \n Revenue \n \n \n \n Revenue arises from the sale of goods, provision of ancillary services, and the rental of products. \n \n \n Revenue from the sale of goods is recognised on despatch when control of the products is transferred to the customer. All performance obligations are met on despatch when the customer obtains control to direct the goods within the sales channel and incurs the risk of obsolescence. \n \n \n Ancillary services include support services, managed services, licences, transport, installations, removals, warranties, and repairs. Where contracts for ancillary services include multiple performance obligations the transaction price is allocated to each separate performance obligation within the contact based on estimated cost-plus margin. Revenues from support services, managed services, and warranties are recognised over time as the services are performed. Revenues from all other ancillary services including licences, transport, installations, removals, and repairs are recognised at a point in time upon delivery of the service. Revenues from licences comprise the services to arrange for the provision of the licence. \n \n \n Revenue from the rental of products via an operating lease is recognised on a straight-line basis over the lease term. Changes in the price or duration of a lease that were not part of the original terms and conditions are accounted for as a lease modification and recognised as a new lease from the effective date of the modification. \n \n \n Proceeds from the sale of rental assets are recognised as sales of goods. Revenue for the sale of rental assets is recognised at the point in time when the control is transferred, at which point the customer obtains the ability to direct the goods in the channel and incurs the risk of obsolescence. \n \n \n \n Finance income and costs \n \n \n \n Interest income and expense is recognised using the effective interest method which calculates the amortised cost of a financial asset or liability and allocates the interest income or expense over the relevant period.  The effective interest rate is the rate that exactly discounts estimated future cash receipts or payments through the expected life of the financial asset or liability to the net carrying amount of the financial asset or liability. Other finance costs include the changes in fair value of derivatives and other financial instruments measured at fair value through profit or loss. \n \n \n \n Goodwill \n \n \n \n Goodwill represents the future economic benefits arising from business combinations which are not individually identified and separately recognised. Goodwill is carried at cost as established at the date of acquisition of the business less any accumulated impairment losses. \n \n \n \n Intangible assets other than goodwill \n \n \n \n Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value as at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses. The useful lives of other intangible assets are assessed as finite. Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for by changing the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amo...

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