Unaudited Full Year Results

About this update from Midwich Group Plc

[{"type":"text","content":"\n \n \n \n RNS Number : 5576R \n Midwich Group PLC \n 09 March 2021 \n   \n \n \n \n 9 March 2021 \n \n \n   \n \n \n   \n \n \n Midwich Group plc \n \n \n (\"Midwich\" or the \"Group\") \n \n \n   \n \n \n Unaudited Full Year Results \n \n \n   \n \n \n Demonstrating resilience through a robust and progressive revenue recovery \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 unaudited full year results for the year ended 31 December 2020. \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 Year to \n \n \n 31 December 2020 \n \n \n  m \n \n \n \n \n Year to \n \n \n 31 December 2019 \n \n \n  m \n \n \n \n \n Total growth % \n \n \n \n \n \n \n \n \n \n \n \n \n \n Revenue \n \n \n \n \n 711.8 \n \n \n \n \n 686.2 \n \n \n \n \n 3.7% \n \n \n \n \n \n \n \n \n \n \n \n \n \n Gross profit \n \n \n \n \n 101.8 \n \n \n \n \n 113.1 \n \n \n \n \n (10.0)% \n \n \n \n \n \n \n \n \n \n \n \n \n \n Operating profit \n \n \n \n \n 7.1 \n \n \n \n \n 24.9 \n \n \n \n \n (71.6)% \n \n \n \n \n \n \n \n \n \n \n \n \n \n Profit before tax \n \n \n \n \n (1.0) \n \n \n \n \n 23.8 \n \n \n \n \n (104.2)% \n \n \n \n \n \n \n \n \n \n \n \n \n \n Profit after tax \n \n \n \n \n (3.4) \n \n \n \n \n 18.2 \n \n \n \n \n (118.6)% \n \n \n \n \n \n \n \n \n \n \n \n \n \n Basic EPS - pence \n \n \n \n \n (4.32) \n \n \n \n \n 21.67 \n \n \n \n \n (119.9)% \n \n \n \n \n \n \n \n \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 \n \n \n 31 December 2020 \n \n \n  m \n \n \n \n \n Year to \n \n \n 31 December 2019 \n \n \n  m \n \n \n \n \n Total growth \n \n \n  % \n \n \n \n \n Growth at constant currency \n \n \n % \n \n \n \n \n \n \n Revenue \n \n \n \n \n 711.8 \n \n \n \n \n 686.2 \n \n \n \n \n 3.7% \n \n \n \n \n 3.3% \n \n \n \n \n \n \n Gross profit \n \n \n \n \n 101.8 \n \n \n \n \n 113.1 \n \n \n \n \n (10.0)% \n \n \n \n \n (10.2)% \n \n \n \n \n \n \n Gross profit margin % \n \n \n \n \n 14.3% \n \n \n \n \n 16.5% \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 16.5 \n \n \n \n \n 33.5 \n \n \n \n \n (50.6)% \n \n \n \n \n (50.8)% \n \n \n \n \n \n \n Adjusted profit before tax \n \n \n \n \n 14.2 \n \n \n \n \n 31.2 \n \n \n \n \n (54.6)% \n \n \n \n \n (54.7)% \n \n \n \n \n \n \n Adjusted profit after tax \n \n \n \n \n 10.3 \n \n \n \n \n 23.8 \n \n \n \n \n (56.7)% \n \n \n \n \n (56.8)% \n \n \n \n \n \n \n Adjusted EPS - pence \n \n \n \n \n 11.20 \n \n \n \n \n 28.49 \n \n \n \n \n (60.7)% \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n   \n \n \n \n \n 1 \n \n Definitions of the alternative performance measures are set out in note \n 1 \n \n \n   \n \n \n Financial highlights \n \n \n · \n A record revenue performance despite the challenges from the global pandemic, highlighting the resilience of the business \n \n \n · \n Revenue increased by 3.7% to £711.8 million (3.3% on a constant currency basis) (2019: £686.2m) \n \n \n · \n Group revenues improved consistently from April, such that the Group's organic revenue decline of 22% in the first half of the year reduced to a 7% decline in the second half of the year \n \n \n · \n Gross margin was impacted by COVID-19 disruption, but is expected to recover over time \n \n \n · \n Adjusted profit before tax reduced to £14.2 million (2019: £31.2 million) as a direct result of COVID-19 disruption \n \n \n · \n Adjusted EPS decreased to 11.2p (2019: 28.5p) \n \n \n · \n An exceptional year of operating cash conversion at 194.4% of adjusted EBITDA \n \n \n · \n Strong balance sheet, with year-end adjusted net debt to EBITDA of 0.9x (2019:1.4x), providing financial flexibility \n \n \n   \n \n \n   \n \n \n Operational highlights \n \n \n · \n Resilient operational performance - a robust recovery in the second half exceeded the Board's original expectations at the onset of the pandemic \n \n \n · \n Acquisitions made in 2019 and 2020 have been fully integrated and are delivering a positive contribution to the Group \n \n \n · \n Entry into the strategically important North American market through the acquisition of Starin Marketing Inc. (\"Starin\") \n \n \n · \n Established specialist unified communications capabilities, as well as the addition of numerous new vendors \n \n \n · \n Successful equity placing and refinancing to fund Starin acquisition investment \n \n \n · \n Continue to have a strong acquisition pipeline across a number of regions and technologies \n \n \n   \n \n \n Post-period end \n \n \n · \n Completed the acquisition of a majority stake in NMK Electronics ENT. (\"NMK Group\"), a value-added distributor of AV products based in the UAE and Qatar, marking Group's entry into the Middle East \n \n \n · \n Trading since the year end in line with management expectations \n \n \n   \n \n \n Stephen Fenby, Managing Director of Midwich Group plc, commented: \n \n \n   \n \n \n \"2020 was a challenging year for everyone and I would like to take this opportunity to thank all of our employees, partners and suppliers for their tireless hard work and continued support. We delivered a robust performance in the year, thanks to our proven business model and our position as a true value add distributor in the global AV market. \n \n \n   \n \n \n We announced our entry into the US, the world's largest AV market, in February 2020 and post period end, entered the Middle East, giving us true global scale. Whilst we have experienced a slowdown in some of our sectors, we have also witnessed improved performances in others and our results in the second half of the year exceeded the Board's expectations. We are well placed through our diversified geographical and multi-sector footprint, combined with long-term vendor relationships, to continue to deliver growth and take advantage of market opportunities, both organically and through acquisition.\" \n \n \n   \n \n \n There will be a webinar for sell-side analysts at 8:00am GMT today, 9 March 2021, the details of which can be obtained from FTI Consulting: \n \n \n [email protected] \n \n \n . \n \n \n   \n \n \n For further information: \n \n \n   \n \n \n \n \n \n Midwich Group plc \n \n \n Stephen Fenby, Managing Director \n \n \n Stephen Lamb, Finance Director \n \n \n   \n \n \n \n \n Tel: +44 (0) 13 7964 9200 \n \n \n \n \n \n \n \n Investec Bank plc \n \n (NOMAD and Joint Broker to Midwich) \n \n \n Carlton Nelson \n \n \n Ben Griffiths \n \n \n   \n \n \n \n \n Tel: +44 (0) 20 7597 5970 \n \n \n \n \n \n \n \n Berenberg \n \n (Joint Broker to Midwich) \n \n \n Ben Wright \n \n \n Mark Whitmore \n \n \n   \n \n \n \n \n Tel: +44 (0) 20 3207 7800 \n \n \n \n \n \n \n FTI Consulting \n \n \n Alex Beagley \n \n \n Tom Hufton \n \n \n Rafaella de Freitas \n \n \n \n \n Tel: +44 (0) 20 3727 1000 \n \n \n \n \n [email protected] \n \n \n \n \n \n \n \n \n \n \n   \n \n \n About Midwich Group \n \n \n Midwich is a global 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 500 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 20,000 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 1,000 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 www.midwichgroupplc.com \n \n \n \n   \n \n \n COVID-19 and its impact on our business \n \n \n   \n \n \n The coronavirus pandemic represents the biggest shock known to our business sector.  As the crisis unfolded, we took decisive action to protect our teams, preserve cash and support our customers and vendors.  These remain our key priorities as the pandemic continues. \n \n \n   \n \n \n Although the economic effect of COVID-19 has been significant across the world, our market strength, combined with the diversity of our Group in terms of geographical spread, vendor breadth, technology focus and end user markets have partially mitigated the negative impact on our business, highlighting the strength of our business model. \n \n \n   \n \n \n After the initial fall, the Group's revenue improved consistently from April, such that the Group's organic revenue decline of 22% in the first half of the year reduced to a 7% decline in the second half of the year. Including the impact of the Starin acquisition, we were pleased to be able to grow Group revenue by 3.7% to £711.8 million for 2020. Adjusted profit before tax for the year was reduced to £14.2 million (2019: £31.2 million) as a direct result of the disruption from COVID-19. \n \n \n   \n \n \n The impact on our strategy \n \n \n   \n \n \n The coronavirus pandemic has shocked the global economy and how we live our lives.  However, we believe that the AV industry is well placed for the future and see no overall change in long-term prospects for the market.  Although some segments of the market may be slower to recover, other trends have unsurprisingly accelerated, such as the increased adoption of unified communications technology, and our entry into this market through the acquisition of Starin positions the Group well for the future.  \n \n \n   \n \n \n Whilst the impact of COVID-19 continues to create short term uncertainty, the Group's strategy remains focused on markets and product areas where it can leverage its value-add end-to-end services, technical expertise, and sales and marketing skills.  Using its market knowledge and expertise, the Group provides its vendors with support to build and execute plans to grow market share. The Group supports its customers to deliver successful projects, from initial pitch to execution. \n \n \n   \n \n \n A core component of the Group's growth strategy remains further expansion of its international operations and footprint into strategically targeted jurisdictions both organically and through acquisition. After the initial disruption from the pandemic, we resumed our acquisition activity in the second half of the year. \n \n \n   \n \n \n The effect on our end markets \n \n \n Markets which are largely government funded (such as education, healthcare and defence) have remained relatively strong, impacted mostly by the ability of customers to access sites.  The corporate market has been more muted with end users mostly working from home and investment plans largely placed on hold. The most significant impact has been to the live events and hospitality markets. \n \n \n   \n \n \n While the Group's system integrator customers initially struggled to undertake typically complex projects due to limited ability to access sites, sales to customers selling on-line were comparatively strong. Over the second half of the year customers' site access improved and the increased market demand helped the Group improve revenue throughout the period. The disruption to more complex projects and the events market has had an adverse impact on Group margins, although these are anticipated to recover as markets return to normal.  \n \n \n   \n \n \n Certain product sets have been impacted in different ways depending on their use.  A strong performance was achieved from technologies used to facilitate working from home.  Such products include desktop monitors, printers and various associated accessories.  Certain broadcast products have also performed well throughout the period, as organisations have invested in technologies which enable better remote communication.  Unified communications solutions have performed well, and the Group has sought to  \n maximise the skills and relationships it acquired through the acquisition of Starin in the US in February 2020.  \n \n \n   \n \n \n The Board believes that current market conditions highlight more than ever the need for manufacturers to use a high-quality specialist distributor such as Midwich.  In 2020, the Group launched an encouraging number of new vendor relationships, such as with Sonos, Netgear, Poly and Huddly, and rolled out existing relationships, with Barco, Biamp, Shure, DTEN and Absen, into new technology areas (such as the Barco ClickShare range in the UK & Ireland and France) and geographical markets (such as launching Shure in France).  The launch of new vendors has continued during the lockdown period as the Group further positions its portfolio in exciting growth markets, such as unified communications. \n \n \n   \n \n \n How we are responding \n \n \n Whilst we continue to monitor the pandemic and remain cautious given the return to COVID-19 restrictions in early 2021, we have increasingly shifted our focus to the future.  We have launched new vendor relationships and further developed our expertise in the unified communications sector.  Our acquisition programme recommenced in the second half of 2020 and we subsequently completed the acquisition of NMK Group in early 2021. The Group has a number of exciting opportunities in the pipeline across various geographies.  \n \n \n   \n \n \n What the long-term future looks like \n \n \n The Board would like to thank our staff, customers and partners for their incredible support in recent months and looks forward to returning to our previous financial performance as quickly as possible thereby continuing our long-term growth trajectory. \n \n \n   \n \n \n Chairman's Statement \n \n \n   \n \n \n Overview \n \n \n In an unprecedented year, I am delighted that we achieved record revenue of £711.8 million, 3.7% ahead of the prior year. Against the backdrop of the global pandemic, we demonstrated resilience in achieving a robust and progressive recovery in revenue throughout the second half of the year. A strong close to the year saw the Group exceed the Board's expectations for full year revenue and adjusted profit while also delivering a significant reduction in net debt, maintaining the financial flexibility of the Group.  \n \n \n   \n \n \n At the start of the pandemic, we took early and decisive action to address the emerging risks posed by COVID-19, including protecting our teams, preparing all staff for remote working, supporting our customers and vendors and preserving cash and liquidity. Countries and economies were affected by lockdowns and other restrictions at different times during the year and the Group was able to respond quickly and adapt to the changes in market needs. Our strong AV market position, combined with the diversity of our Group in terms of geographical spread, vendor breadth, technology focus and end user markets have partially mitigated the negative impact of the crisis. \n \n \n Our response to the pandemic required the Board to make some difficult decisions during the year including the use of furlough schemes and part time working, salary reductions and a small number of headcount reductions. Given the use of government support to help retain jobs and a focus on the preservation of cash we also determined that the Group would not pay dividends in 2020. The Board is conscious of the impact of this decision on shareholders, including the majority of our staff who own shares in the Group, and is committed to reinstating dividend payments when appropriate. \n \n \n   \n \n \n Whilst the pandemic was a major focus in 2020, I am pleased that the Group was able to achieve further strategic milestones. \n \n \n   \n \n \n The Group's acquisition of Starin Marketing Inc. in February 2020 represented our entry into North America, the world's largest AV market. Starin is a value-added AV distributor with a reputation for technical excellence and a high level of customer support. Since the acquisition, Midwich has helped Starin to accelerate its development by strengthening its sales and business management capabilities, releasing significant cash invested in working capital and exiting lower margin activities to focus on high growth and higher margin market segments.  Starin has brought expert knowledge of the unified communications (\"UC\") market to the wider Group and supported the addition of multiple UC vendors to the Group's portfolio. \n \n \n   \n \n \n During 2020, we further expanded our vendor relationships in support of our long-term organic growth objectives. New brands added in the year included Barco ClickShare, Poly, DTEN and Huddly and the Group also launched a Hardware as a Service (\"HaaS\") solution to help channel partners to offer the latest UC technology to their customers, without the requirement for substantial upfront outlay. \n \n \n   \n \n \n After the period end, we completed the acquisition of a majority stake in NMK Electronics ENT. (\"NMK Group\"). Based in the UAE and Qatar, NMK Group is a value-added distributor of AV products and represents the Group's entry into the Middle Eastern market, one of the fastest growing AV markets in the world. The deal further expands the Group's geographical footprint, enabling it to extend the support it can provide to customers and vendors internationally. \n \n \n   \n \n \n The pandemic has caused significant disruption to our end user markets.  Although the business has seen the benefit of increased investment in remote working and teaching, we have been negatively impacted by the cancellation or postponement of live events and conferences in many countries. Both the AV industry and our customers have demonstrated agility in switching activity to the areas of demand during the pandemic, and industry data continues to show long-term growth in demand for AV products; exceeding GDP growth. \n \n \n   \n \n \n The Board attributes our robust performance through this challenging year to continued focus on service, looking after our teams and continuing to pursue our strategic goals.  We believe that the business is well positioned for the future. \n \n \n   \n \n \n Board \n \n \n   \n \n \n Board membership and composition has not changed in the year and we adapted to the use of unified communications for both our AGM and our board and committee meetings. Reflecting the challenging global backdrop, the Board met more frequently during the year and received regular updates from the Executive Leadership Team (\"ELT\"). \n \n \n   \n \n \n In line with prior years the Board completed a self-evaluation exercise during 2020, reinforcing our commitment to, and success in, establishing a strong corporate governance framework. We took the opportunity of this review to confirm 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. \n \n \n   \n \n \n For a number of years, the Group has acted to reduce its environmental impact. This year the Board has chosen to formalise its focus on sustainability by asking Hilary Wright to be the non-executive director with particular responsibility for environmental, social and governance (\"ESG\") matters and through the introduction of our first environmental targets for the Group. \n \n \n   \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. Over the last few years, we have enhanced our reporting by including a detailed Directors' Remuneration Report and environmental, social and governance information. We also chose to introduce an annual advisory vote on the Directors' Remuneration Report. \n \n \n   \n \n \n The Board recognises its duty to have regard to broader stakeholder interests and, in addition to including both a separate Section 172 Statement and additional carbon reporting in the annual report, we added further information about the Group to our website during the year and introduced a stakeholder newsletter from the start of 2021. \n \n \n   \n \n \n People \n \n \n The success of any company is down to the quality of its leadership and its people. The team at Midwich has demonstrated immense skill, commitment, drive and resilience over the last twelve months.  Our people have adapted incredibly well to each and every challenge without sacrificing quality of service or losing their enthusiasm. I recognise the sacrifices made by our teams in responding to the pandemic and strongly believe that we have the best team in the industry and are well positioned for future growth. \n \n \n   \n \n \n During 2020, the Board has welcomed the opportunity to interact with the Executive Leadership Team (\"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 operational response to COVID-19. This regional leadership model is working well and is fully aligned to the Group's long-term growth ambitions. \n \n \n   \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 \n \n Andrew Herbert \n \n \n Non-executive Chairman \n \n \n   \n \n \n Managing Director's Review \n \n \n   \n \n \n 2020 was a challenging year for everyone and I would like to take this opportunity to thank all of our employees, partners and suppliers for their tireless hard work and continued support. We delivered a robust performance in the year, thanks to our proven business model and our position as a true value add distributor in the global AV market. \n \n \n   \n \n \n We announced our entry into the US, the world's largest AV market, in February 2020 and post period end, entered the Middle East, giving us true global scale. Whilst we have experienced a slowdown in some of our sectors, we have also witnessed improved performances in others and our results in the second half of the year exceeded the Board's expectations. We are well placed through our diversified geographical and multi-sector footprint, combined with long-term vendor relationships, to continue to deliver growth and take advantage of market opportunities, both organically and through acquisition. \n \n \n   \n \n \n Overview \n \n \n In 2020 the world economy, the AV industry and our business faced unprecedented challenges. Changes to how people interact, work, travel and spend their leisure time have often been significant and sudden. Against this background, our people and business have responded brilliantly, adapting to how we work and communicate with each other, and how we continue to deliver a consistently excellent service. \n \n \n   \n \n \n Despite the negative financial impact of the pandemic, Midwich has had one of its most successful years - building on its market position and pursuing our long-term goals. \n \n \n   \n \n \n Revenue growth in a challenging market \n \n \n Group revenue increased by 3.7% in the year, with the contribution from Starin, since February 2020, more than compensating for challenges in other markets. The Group's comprehensive product offering, and geographical reach have enabled us to capitalise on those opportunities that were available to us in 2020. \n \n \n   \n \n \n We believe our market share has grown in each of our major territories, reflecting the strength of our offering and the support we have continued to give our customers and vendors in challenging times. \n \n \n   \n \n \n Impact on end-user markets \n \n \n The COVID-19 pandemic has impacted many of our end user markets, mostly negatively, but in some cases more positively.  Our two largest end user markets are education and corporate.  The education market was relatively robust in 2020, with government spend remaining strong.  We saw an increase in demand for technologies to enable combined remote and in-class teaching.  The corporate market was impacted in the year as businesses assessed their future office strategies.  Nonetheless, we remain comfortable that our broad technology portfolio will form an important part of future office strategies, enabling closer collaboration or remote communication, amongst other benefits. \n \n \n   \n \n \n End user markets such as events, leisure and hospitality have continued to be severely impacted, but are expected to recover once people are able to mix freely again. \n \n \n   \n \n \n Short term impact on gross margins \n \n \n Generally lower end user demand had an impact on our revenues, which in turn reduced the volume of purchases we made from vendors. Lower purchase levels can have an impact on our ability to hit rebate targets, to obtain special pricing support from manufacturers, and reduces volume discounts.  In addition, greater price competition can reduce selling prices, particularly in mainstream products.  These factors have all contributed to generally lower margins, however these should be reversed once volumes build back. \n \n \n   \n \n \n The mix of sales has also been impacted by the pandemic.  In particular, the depressed events, leisure and hospitality sectors often use more specialist (higher margin) products, particularly in the technical video, audio and lighting technology areas. During the year we reviewed our policy of applying fixed percentage write downs to our stock as it ages. Given the temporary disruption to end user markets many current and viable products would have become fully written down, which would not reflect their recoverable value.  To reflect this the time period to full write down was extended for some products to a maximum of two years (previously 12 months). At the end of the year the Group had a stock provision of £23.8 million (22% of cost) compared to £13.3 million at the end of the prior year (13%). Had the Group maintained the previous percentages, the inventory write down would have been £6.5m higher as at 31 December 2020. \n \n \n   \n \n \n Managing costs without damaging the business \n \n \n With lower revenues and gross profits, we took decisive actions at the onset of the pandemic to realign our cost base. Our focus was to reduce discretionary spend whilst seeking to maintain our market leading team. We reduced recruitment and most leavers have not been replaced. The Group took advantage of government job support funding where appropriate, receiving approximately £2.8 million in UK&I and about half this amount in other regions. \n \n \n   \n \n \n Profitability and cash generation \n \n \n The Group remained profitable in 2020, with adjusted profit before tax falling to just under half the level achieved in 2019. In its 41 year history, Midwich has never had a loss making year, at the adjusted operating profit level, and I am pleased that this still continues to be the case. \n \n \n   \n \n \n In addition to maximising profitability, we focused heavily on managing our cash flow. The rapid decline in trade in the spring of 2020 meant that we needed to give particular focus to managing inventory levels ,provisions, supplier payments and customer receipts. We made very good progress in working capital management, with the result that our net debt reduced significantly over the course of the year.  \n \n \n   \n \n \n Group strategy remains unchanged \n \n \n Since the start of the COVID-19 crisis we have kept our long-term strategy under constant review.  In particular, we have been seeking to identify areas of risk with our previous strategy, and whether we need to fundamentally refocus onto new product, end user or geographical market areas. We have taken note of industry research, including an Avixa report published in July 2020, which suggested that after a decline in 2020, the global AV market is expected to grow at a compound annual rate of 5.8% for the next five years. Overall, we concluded that the changes we have seen in the market were either an acceleration of changes that were already happening, fall within our current focus areas or appear to be short term in nature.  As such, we have not fundamentally changed our focus on increasing specialisation, expanding our geographical footprint and growing our scale. \n \n \n   \n \n \n Whilst dealing with short term challenges, we have continued to focus on our longer-term strategies and plans. For example, we have taken on an unprecedented number of new vendor relationships, and expanded our footprint through the acquisition of Starin in the US in February 2020 and NMK in the Middle East after the end of the year. \n \n \n   \n \n \n Technologies 1 \n \n \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 54% of Group revenue in 2020 (2019: 57%).  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 38% of total sales in 2020 (2019: 36%). \n \n \n   \n \n \n Our largest technology area is displays, a category which has been growing for a number of years but actually fell by 14% in 2020.  The fall was particularly pronounced in the UK&I, and was mitigated in part by a growth in display sales in EMEA. Displays represented 37% of Group revenue in 2020 (2019: 40%).  We believe that the fall in our displays business was less than that of the overall market in our key territories. \n \n \n   \n \n \n Revenue from projector sales fell 7% in 2020, with the UK&I reduction being the most significant amongst our territories. Whilst the overall projector market continues to be impacted by a shift towards displays, we believe that we gained market share in high-end projection and are well positioned for the expected recovery in demand in this area. \n \n \n   \n \n \n Mainstream product categories tend to see greater price competition, which was a factor in lower gross margins across displays and projection in the year. \n \n \n   \n \n \n Sales in our technical product categories were broadly flat across the year.  However, this was a combination of significant growth in the broadcast business (particularly in streaming and pro video solutions), in technical AV products (including unified communications products) and significant falls in audio and lighting (caused by lower demand in the events and hospitality markets). \n \n \n   \n \n \n \n 1 \n \n This analysis excludes revenue from the fulfilment activity that Starin exited from at the end of 2020. \n \n \n   \n \n \n UK and Ireland \n \n \n The UK is the Group's single largest territory by revenue, profit and headcount, and addresses multiple markets with many different product sets.  As such, general economic conditions tend to have a more significant impact on the UK business than in other countries where the Group has a relatively smaller market share. Like other regions, the impact of COVID-19 on the UK business was initially significant but trading steadily improved as the year progressed. \n \n \n   \n \n \n We achieved revenue of £224.4 million in the region (2019: £314.6 million) whilst margins declined to 14.0% (2019: 17.6%). The change in margin reflects both a change in mix, as higher margin value added projects and our rental business were most affected by the COVID-19 restrictions, and a reduction in vendor rebates, as the level of purchasing activity was reduced in the year. The Board expects gross margins to recover as normal economic activity resumes. \n \n \n   \n \n \n In response to the pandemic we acted to reduce costs, including reductions in salaries, bonuses and discretionary expenditure. In addition, the UK&I received £2.8 million from government schemes towards enhanced furlough payments and offered flexible working to its team members. These actions allowed it to limit headcount reductions to a relatively small number and ensure that the business is well positioned for the anticipated recovery. \n \n \n   \n \n \n The overall revenue reduction of around 30% was experienced across most product categories, reflecting a general drop in the market.  Professional audio and lighting was impacted to a greater degree due to the virtual cessation of the events and entertainment markets in the region during 2020.  Strong performance was seen in the smaller categories of document solutions (as consumers set themselves up to work from home) and also consumer audio sold through online retailers. \n \n \n   \n \n \n EMEA \n \n \n The EMEA region comprises our businesses in France, Germany, Switzerland, Benelux, Norway, Italy and Iberia and will include activities in the Middle East from 2021. \n \n \n   \n \n \n Despite the adverse impact from COVID-19 we improved revenue by 3.2% to £331.1 million (2019: +44.6% to £321.0 million). Whilst all territories in the region were affected by the pandemic, the initial reduction in revenue and pace of recovery has varied by both country and product area. Germany and France recovered strongly during the second half of the year helped by strong demand for education, remote working, broadcast and streaming solutions. The more specialist audio and lighting focused businesses in Southern Europe have seen a greater impact on demand, but they have performed well, maintained or increased market share, and are well positioned for future growth. Underlying revenue (excluding the effects of acquisitions and currency changes) was in line with the prior year (2019: +15.2%). \n \n \n   \n \n \n In line with other territories, gross margin was impacted by COVID-19, reducing to 13.8% (2019: 15.2%) manly due to a negative mix effect. Operating profit in EMEA, at £9.4 million (2019: £14.1 million), was impacted by the change in gross margin. Whilst certain countries benefited from government support to retain jobs this was at a much lower level (£0.8 million) than that received in UK&I. \n \n \n   \n \n \n In the mainstream product categories, revenue from displays increased by 9% but from projectors declined by 5%, reflecting a long-term trend as part of the projector market switches to displays. Our broadcast product sales increased significantly, driven by stronger sales of live streaming, prosumer and corporate products, particularly in the German market.  Pro audio and lighting showed revenue declines of around 25%, being somewhat less impacted than the UK&I market. \n \n \n   \n \n \n Asia Pacific \n \n \n Our Asia Pacific region sales declined by 12.1% to £44.5 million in 2020 (2019: +41.2% to £50.6 million). Across the region the response to the pandemic saw some very strict lockdowns and periods of business closure particularly in New Zealand. Against this backdrop our businesses have performed well, especially broadcast and streaming solutions. In prior years, APAC margins have benefitted from high value add, complex projects. These were adversely affected by COVID-19 in 2020 and the resulting change in mix resulted in a gross margin of 15.3% (2019: 17.7%). \n \n \n APAC received £0.4 million of government support, and due to the reduction in gross profit, adjusted operating profit declined by £1.9 million to £0.8 million (2019: £2.7 million). \n \n \n   \n \n \n North America \n \n \n Starin became part of the Group on 6 February 2020 and contributed £111.8 million to Group revenue in the year. \n \n \n Despite the COVID-19 pandemic, the integration of Starin has progressed ahead of our initial plans with significant achievements including restructuring and investing in both sales and business management capabilities, overhead reductions, exiting low margin fulfilment activity and a significant reduction in net debt through focus on working capital management. \n \n \n   \n \n \n Gross margins at 16.1% and adjusted PBT at £4.9 million were ahead of our expectations and included the benefits of the accelerated integration activity. \n \n \n   \n \n \n The Group has also been able to leverage Starin's strong relationships with unified communications vendors to expand its capabilities and strengthen its UC offering across all regions. \n \n \n   \n \n \n Environmental, Social and Governance (\"ESG\") \n \n \n We continue to take our commitment to environmental and social responsibility seriously and in 2020 we further progressed the work that we started in the last two years. The Group's approach to ESG is aligned to four key pillars: our local communities; supporting charities close to our hearts; reducing our environmental impact and supporting our people. These focus areas continue to be relevant and are at the heart of what matters to our people. \n \n \n   \n \n \n During 2020, work continued within the four pillars and despite the pandemic we've adapted our approach and continued to make a difference in each area. For 2021, we have set Group wide targets for each of the pillars and we have appointed Hilary Wright to be the non-executive director with responsibility and overview for ESG matters. \n \n \n   \n \n \n Outlook \n \n \n Despite the short-term impact of the pandemic, we have continued to pursue our long-term strategic goals with the result that I believe the business is in a stronger market position at the end of 2020 than it was at the beginning. \n \n \n The global AV market was believed by Avixa to be worth $239bn in 2020 and will grow at 5.8% per annum for the next five years to reach $315 billion in 2025. Midwich is a major player in the market, with a focused, skilled and experienced team. With revenue representing under 1% of the world market and operations in just 20 countries we are well placed to capitalise on the long-term growth prospects of the market. \n \n \n In the short term, we expect that severe COVID lockdowns in many key markets will suppress our recovery in at least the first half of 2021. Trading in the first two months of 2021 was in line with our expectations. Should vaccination programmes develop as hoped, and general economic conditions improve, we expect to see a return towards normal levels of trade in the second half of 2021. \n \n \n   \n \n \n Finance Director's Review \n \n \n   \n \n \n We achieved further revenue growth in 2020 and generated exceptionally strong cash flows which leaves the Group well positioned for the post COVID-19 recovery. \n \n \n   \n \n \n Despite the pandemic, we achieved further growth in 2020 with revenue increasing by 3.7% to £711.8 million (2019: £686.2 million). Excluding the impact of acquisitions and currency movements, organic revenue declined by 14.1% (2019: +6.0%). Gross profit margin was down on the prior year at 14.3% (2019: 16.5%). \n \n \n   \n \n \n Adjusted operating profit of £16.5 million (2019: £33.5 million) reduced by 50.8% at constant currency (2019: +11.0%). Operating profit before adjustments was £7.1 million (2019: £24.9 million). \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 Year to 31 \n \n \n  December 2020 \n \n \n \n \n Year to 31 December 2019 \n \n \n \n \n Total growth \n \n \n   \n \n \n \n \n \n \n Revenue \n \n \n \n \n £711.8m \n \n \n \n \n £686.2m \n \n \n \n \n 3.7% \n \n \n \n \n \n \n Gross profit \n \n \n \n \n £101.8m \n \n \n \n \n £113.1m \n \n \n \n \n (10.0)% \n \n \n \n \n \n \n Operating profit \n \n \n \n \n £7.1m \n \n \n \n \n £24.9m \n \n \n \n \n  (71.6)% \n \n \n \n \n \n \n Profit before tax \n \n \n \n \n £(1.0)m \n \n \n \n \n £23.8m \n \n \n \n \n (104.2)% \n \n \n \n \n \n \n Profit after tax \n \n \n \n \n £(3.4)m \n \n \n \n \n £18.2m \n \n \n \n \n (118.6)% \n \n \n \n \n \n \n Basic EPS - pence \n \n \n \n \n (4.32)p \n \n \n \n \n 21.67p \n \n \n \n \n (119.9)% \n \n \n \n \n \n   \n \n \n \n Adjusted financial highlights \n \n \n \n 1 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n Year to 31 December 2020 \n \n \n \n \n Year to 31 December 2019 \n \n \n \n \n Total growth \n \n \n   \n \n \n \n \n Growth at constant currency \n \n \n \n \n \n \n Revenue \n \n \n \n \n £711.8m \n \n \n \n \n £686.2m \n \n \n \n \n 3.7% \n \n \n \n \n 3.3% \n \n \n \n \n \n \n Gross profit \n \n \n \n \n £101.8m \n \n \n \n \n £113.1m \n \n \n \n \n (10.0)% \n \n \n \n \n (10.2)% \n \n \n \n \n \n \n Gross profit margin % \n \n \n \n \n 14.3% \n \n \n \n \n 16.5% \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 £16.5m \n \n \n \n \n £33.5m \n \n \n \n \n (50.6)% \n \n \n \n \n (50.8)% \n \n \n \n \n \n \n Adjusted profit before tax \n \n \n \n \n £14.2m \n \n \n \n \n £31.2m \n \n \n \n \n (54.6)% \n \n \n \n \n (54.7)% \n \n \n \n \n \n \n Adjusted profit after tax \n \n \n \n \n £10.3m \n \n \n \n \n £23.8m \n \n \n \n \n (56.7)% \n \n \n \n \n (56 \n . \n 8)% \n \n \n \n \n \n \n Adjusted EPS - pence \n \n \n \n \n 11.20p \n \n \n \n \n 28.49p \n \n \n \n \n (60.7)% \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n 1 \n \n Definitions of the alternative performance measures are set out on page 31. \n \n \n   \n \n \n Currency movements had a limited impact across the Group in both 2020 and 2019. \n \n \n   \n \n \n On a constant currency basis, growth in revenue was 3.3% (2019: 20.1%) and adjusted profit after tax reduced by 56.8% (2019: +7.7%). \n \n \n   \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 \n \n Regional highlights \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n Year to 31 December 2020 \n \n \n  m \n \n \n \n \n Year to 31 December 2019 \n \n \n  m \n \n \n \n \n Total growth \n \n \n   \n \n \n % \n \n \n \n \n Growth at constant currency \n \n \n % \n \n \n \n \n Organic growth \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 \n \n \n \n \n \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 224.4 \n \n \n \n \n 314.6 \n \n \n \n \n (28.7) \n \n \n \n \n (28.7) \n \n \n \n \n (28.7) \n \n \n \n \n \n \n EMEA \n \n \n \n \n 331.1 \n \n \n \n \n 321.0 \n \n \n \n \n 3.2 \n \n \n \n \n 2.2 \n \n \n \n \n (0.1) \n \n \n \n \n \n \n Asia Pacific \n \n \n \n \n 44.5 \n \n \n \n \n 50.6 \n \n \n \n \n (12.1) \n \n \n \n \n (10.7) \n \n \n \n \n (11.8) \n \n \n \n \n \n \n North America \n \n \n \n \n 111.8 \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 Total Global \n \n \n \n \n 711.8 \n \n \n \n \n 686.2 \n \n \n \n \n 3.7 \n \n \n \n \n 3.3 \n \n \n \n \n (14.1) \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 \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 UK & Ireland \n \n \n \n \n 14.0% \n \n \n \n \n 17.6% \n \n \n \n \n (3.6) ppts \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 13.8% \n \n \n \n \n 15.2% \n \n \n \n \n (1.4) ppts \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 15.3% \n \n \n \n \n 17.7% \n \n \n \n \n (2.4) ppts \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 16.1% \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 Total Global \n \n \n \n \n 14.3% \n \n \n \n \n 16.5% \n \n \n \n \n (2.2) ppts \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \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 UK & Ireland \n \n \n \n \n 3.9 \n \n \n \n \n 19.9 \n \n \n \n \n (80.3) \n \n \n \n \n (80.3) \n \n \n \n \n \n \n \n \n \n \n \n \n \n EMEA \n \n \n \n \n 9.4 \n \n \n \n \n 14.1 \n \n \n \n \n (33.4) \n \n \n \n \n (33.9) \n \n \n \n \n \n \n \n \n \n \n \n \n \n Asia Pacific \n \n \n \n \n 0.8 \n \n \n \n \n 2.7 \n \n \n \n \n (69.8) \n \n \n \n \n (69.6) \n \n \n \n \n \n \n \n \n \n \n \n \n \n North America \n \n \n \n \n 4.9 \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 Group costs \n \n \n \n \n (2.5) \n \n \n \n \n (3.2) \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 Total Global \n \n \n \n \n 16.5 \n \n \n \n \n 33.5 \n \n \n \n \n (50.6) \n \n \n \n \n (50.8) \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 \n \n \n \n \n \n \n \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 (2.3) \n \n \n \n \n (2.3) \n \n \n \n \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 profit before tax 1 \n \n \n \n \n 14.2 \n \n \n \n \n 31.2 \n \n \n \n \n (54.6) \n \n \n \n \n (54.7) \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n 1 \n \n \n Definitions of the alternative performance measures are set out in note \n 1 \n to the consolidated financial statements. \n \n \n The financial performance of each segment during the year was: \n \n \n UK and Ireland \n \n \n The UK and Ireland segment revenue reduced by 28.7% (2019: -0.4%) to £224.4 million (2019: £314.6 million) generating gross profit of £31.3 million (2019: £55.3 million) at a gross profit margin of 14.0% (2019: 17.6%). This resulted in an adjusted operating profit of £3.9 million (2019: £19.9 million), a decrease of 80.3% (2019: +1.6%).  \n \n \n   \n \n \n EMEA \n \n \n The EMEA segment revenue grew 3.2% (2019: +44.6%) to £331.1 million (2019: £321.0 million). Gross profit reduced to £45.6 million (2019: £48.8 million) at a gross profit margin of 13.8% (2019: 15.2%) leading to an adjusted operating profit of £9.4 million (2019: £14.1 million) that reduced 33.4% (2019: +37.3%). In constant currency, revenue grew 2.2% (2019: +45.2%) and adjusted operating profit fell 33.9% (2019: +37.9%). Organic revenue growth, excluding the effects of acquisitions in the current and prior period, decreased by 0.1% (2019: +15.2%). \n \n \n   \n \n \n Asia Pacific \n \n \n The Asia Pacific segment revenue declined 12.1% to £44.5 million (2019: +41.2% to £50.6 million) generating gross profit of £6.8 million (2019: £9.0 million) at a gross profit margin of 15.3% (2019: 17.7%). Adjusted operating profit was £0.8 million (2019: £2.7 million). On constant currency basis, revenue reduced by 10.7% (2019: +44.1%) and adjusted operating profit fell 69.6% (2019: -5.2%). Organic revenue growth, excluding the effects of acquisitions in the current and prior period, decreased by 11.8% (2019: +4.4%). \n \n \n   \n \n \n North America \n \n \n The North America segment was new for 2020 following the acquisition of Starin in February 2020. Revenue from North America was £111.8 million, of which approximately half was attributable to fulfilment activity for a vendor relationship which will not continue into 2021. Gross margin at 16.1% was above the Group average due to the benefit of integration activity, including better working capital management and the exit of low margin vendor relationships. Adjusted operating profit was £4.9 million. \n \n \n   \n \n \n Group costs \n \n \n Group costs for the year were £2.5 million (2019: £3.2 million). The decline in cost was largely due to savings in staff costs attributable to the impact of COVID-19, including temporary salary cuts, lower bonus costs and a small number of headcount reductions. \n \n \n   \n \n \n Adjusted finance costs \n \n \n Adjusted finance costs at £2.3 million (2019: £2.3 million) reflect the interest costs on borrowings for historic acquisition investments and working capital. Reported finance costs of £8.3 million (2019: £1.2 million) include interest costs on Group borrowings, the change in valuation of both deferred consideration and put and call options and the currency revaluation of loans and financial instruments. \n \n \n   \n \n \n Profit before tax \n \n \n The Group reported a loss before taxation of £1.0 million (2019: £23.8 million profit), while adjusted profit before tax reduced by 54.7% (2019: +8.5%), at constant currency, to £14.2 million (2019: £31.2 million). \n \n \n   \n \n \n Tax \n \n \n The adjusted effective tax rate was 27.3% in 2020 (2019: 23.7%) which reflects an increase in the mix of profits arising in higher tax jurisdictions. Note, COVID-19 had a significant impact on mix in 2020. \n \n \n   \n \n \n Earnings per share \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 -4.32p (2019: 21.67p). Diluted EPS was -4.32p (2019: 21.31p). Adjusted EPS reduced by 60.7% (2019: +4.7%) to 11.20p (2019: 28.49p). \n \n \n   \n \n \n Dividend \n \n \n The Board took the appropriate decision to suspend dividend payments as part of its response to COVID-19. Disruption from the pandemic has continued into 2021 and, as such, the Board is not proposing a final dividend for 2020. \n \n \n   \n \n \n Cash flow \n \n \n \n \n \n \n \n \n \n \n \n \n Year to 31 December 2020 \n \n \n £m \n \n \n \n \n Year to 31 December 2019 \n \n \n £m \n \n \n \n \n \n \n Adjusted operating profit \n \n \n \n \n 16.5 \n \n \n \n \n 33.5 \n \n \n \n \n \n \n Add back depreciation and unadjusted amortisation \n \n \n \n \n 6.2 \n \n \n \n \n 5.5 \n \n \n \n \n \n \n Adjusted EBITDA \n \n \n \n \n 22.7 \n \n \n \n \n 39.0 \n \n \n \n \n \n \n Decrease/(Increase) in stocks \n \n \n \n \n 34.9 \n \n \n \n \n (5.1) \n \n \n \n \n \n \n Decrease/(Increase) in debtors \n \n \n \n \n 18.1 \n \n \n \n \n (7.7) \n \n \n \n \n \n \n (Decrease)/Increase in creditors 1 \n \n \n \n \n (31.6) \n \n \n \n \n 0.9 \n \n \n \n \n \n \n Adjusted cash flow from operations \n \n \n \n \n 44.1 \n \n \n \n \n 27.1 \n \n \n \n \n \n \n Adjusted EBITDA cash conversion \n \n \n \n \n 194.4% \n \n \n \n \n 69.5% \n \n \n \n \n \n \n 1 \n \n Excluding the movement in accruals for employer taxes on share based payments. \n \n \n The Group's adjusted operating cash flow conversion, calculated comparing adjusted cash flow from operations with adjusted EBITDA, was 194.4% compared to 69.5% for the prior year. The exceptional performance for the current year reflects a focus on cash and working capital management during the pandemic. Our expectation of long-term cash conversion remains between 70 and 80%. \n \n \n   \n \n \n Gross capital spend on tangible assets was £1.9 million (2019: £5.8 million). The reduction on prior year reflected a cautious approach to capital expenditure during the pandemic together with an exceptional investment of £1.5 million on our new UK facility in 2019. Intangible asset additions in 2020 include £1.1 million (2019: £1.8m) in relation to the Group's new ERP solution. \n \n \n   \n \n \n Net debt \n \n \n Reported net debt reduced from £70.0 million at 31 December 2019 to £39.3 million at 31 December 2020. The Group's reported net debt continues to be impacted by the adoption of IFRS 16 in 2019 which resulted in approximately £17 million of lease liabilities 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   \n \n \n Adjusted net debt at 31 December 2020 was £21.0m (2019: £53.3 million). The strong working capital performance together with the Group's response to the pandemic which focused on preserving cash, liquidity and headroom resulted in a significant reduction in net debt during the year. Adjusted net debt was also favourably impacted by the excess net proceeds from the placing undertaken in February 2020. This resulted in a net debt reduction of £5.3 million being the net placing proceeds of £38.9 million less Starin purchase price of £21.0 million, associated transaction costs of £0.3 million and net debt acquired of £12.3 million. \n \n \n   \n \n \n In January 2020, the Group increased its revolving credit facility to £50 million (£20 million at 31 December 2019) to support its acquisition strategy. This facility has an adjusted net debt to adjusted EBITDA covenant ratio of 2.75 times calculated on a historic 12-month basis. \n \n \n   \n \n \n Most of the Group's other borrowing facilities are to provide working capital financing. During the period, the Group arranged further flexibility in working capital financing including the addition of flexible term loans, inventory backed facilities and extended overdrafts in several countries. Whilst the use of such facilities has been limited, the additional headroom has enhanced the Group's access to liquidity. As at 31 December 2020, the Group has access to total facilities of over £170 million (2019: £115 million).  \n \n \n   \n \n \n The Group has a strong balance sheet with a closing adjusted net debt/adjusted EBITDA ratio of 0.9x (2019: 1.4x). This, combined with the Group's underlying cash generation, equips the Group well to fund short-term swings in working capital as the Group delivers organic growth as well as continue to pursue accretive acquisitions. The Group targets a long-term adjusted net debt to adjusted EBITDA range of 1.5x-2.0x. \n \n \n   \n \n \n Goodwill and intangible assets \n \n \n The Group's goodwill and intangible assets of £59.0 million (2019: £45.3 million) arise from the various acquisitions undertaken. Each year the Board reviews goodwill for impairment and, as at 31 December 2020, 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 \n \n Working capital \n \n \n Working capital management is a core part of the Group's performance and there was considerable focus on this during the year. At 31 December 2020, the Group had working capital (Trade and other receivables plus inventories less trade and other payables) of £79.3 million (2019: £85.8 million). This represented 11.1% of current year revenue (2019: 12.5%). \n 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 purchase date. In 2020 the Group reviewed and revised these percentages to reflect both the delays to market demand from COVID-19 and the Board's view that, as the Group mix has moved towards more specialist value added products, the average period for which inventory can be sold at above cost has increased. At 31 December 2020 the Group's inventory provision was £23.8 million (22% of cost) (2019: £13.3 million; 13% of cost). Had the Group maintained the previous percentages the inventory write down would have been £6.5m higher as at 31 December 2020. \n \n \n   \n \n \n Adjustments to reported results \n \n \n \n \n \n \n \n \n \n \n \n \n 2020 \n \n \n \n \n 2019 \n \n \n \n \n \n \n \n \n \n \n \n \n \n £000 \n \n \n \n \n £000 \n \n \n \n \n \n \n Operating profit \n \n \n \n \n 7,090 \n \n \n \n \n 24,934 \n \n \n \n \n \n \n Acquisition costs \n \n \n \n \n 526 \n \n \n \n \n 356 \n \n \n \n \n \n \n Share based payments \n \n \n \n \n 2,562 \n \n \n \n \n 2,874 \n \n \n \n \n \n \n Employer taxes on share based payments \n \n \n \n \n 130 \n \n \n \n \n 427 \n \n \n \n \n \n \n Amortisation of brands, customer and supplier relationships \n \n \n \n \n 6,224 \n \n \n \n \n 4,871 \n \n \n \n \n \n \n Adjusted operating profit \n \n \n \n \n \n 16,532 \n \n \n \n \n \n \n 33,462 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (Loss)/profit before tax \n \n \n \n \n (995) \n \n \n \n \n 23,781 \n \n \n \n \n \n \n Acquisition costs \n \n \n \n \n 526 \n \n \n \n \n 356 \n \n \n \n \n \n \n Share based payments \n \n \n \n \n 2,562 \n \n \n \n \n 2,874 \n \n \n \n \n \n \n Employer taxes on share based payments \n \n \n \n \n 130 \n \n \n \n \n 427 \n \n \n \n \n \n \n Amortisation of brands, customer and supplier relationships \n \n \n \n \n 6,224 \n \n \n \n \n 4,871 \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 2,282 \n \n \n \n \n (104) \n \n \n \n \n \n \n Finance costs - deferred and contingent consideration \n \n \n \n \n 3,275 \n \n \n \n \n (949) \n \n \n \n \n \n \n Finance costs - put option \n \n \n \n \n 154 \n \n \n \n \n (48) \n \n \n \n \n \n \n Adjusted profit before tax \n \n \n \n \n \n 14,158 \n \n \n \n \n \n \n 31,208 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (Loss)/profit after tax \n \n \n \n \n (3,387) \n \n \n \n \n 18,200 \n \n \n \n \n \n \n Acquisition costs \n \n \n \n \n 526 \n \n \n \n \n 356 \n \n \n \n \n \n \n Share based payments \n \n \n \n \n 2,562 \n \n \n \n \n 2,874 \n \n \n \n \n \n \n Employer taxes on share based payments \n \n \n \n \n 130 \n \n \n \n \n 427 \n \n \n \n \n \n \n Amortisation of brands, customer and supplier relationships \n \n \n \n \n 6,224 \n \n \n \n \n 4,871 \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 2,282 \n \n \n \n \n (104) \n \n \n \n \n \n \n Finance costs - deferred and contingent consideration \n \n \n \n \n 3,275 \n \n \n \n \n (949) \n \n \n \n \n \n \n Finance costs - put option \n \n \n \n \n 154 \n \n \n \n \n (48) \n \n \n \n \n \n \n Tax impact \n \n \n \n \n (1,472) \n \n \n \n \n (1,840) \n \n \n \n \n \n \n Adjusted profit after tax \n \n \n \n \n \n 10,294 \n \n \n \n \n \n \n 23,787 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (Loss)/profit after tax \n \n \n \n \n (3,387) \n \n \n \n \n 18,200 \n \n \n \n \n \n \n Non-controlling interest \n \n \n \n \n (364) \n \n \n \n \n (1,018) \n \n \n \n \n \n \n (Loss)/profit after tax attributable to owners of the Parent Company \n \n \n \n \n \n (3,751) \n \n \n \n \n \n \n 17,182 \n \n \n \n \n \n \n \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 86,893,508 \n \n \n \n \n 79,275,480 \n \n \n \n \n \n \n Reported EPS - pence \n \n \n \n \n (4.32) \n \n \n \n \n 21.67 \n \n \n \n \n \n \n Adjusted EPS - pence \n \n \n \n \n 11.20 \n \n \n \n \n 28.49 \n \n \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 later in this document. \n \n \n Consolidated income statement for the year ended 31 December 2020 \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n Notes \n \n \n \n \n 2020 \n \n \n \n \n \n \n \n \n \n \n \n 2019 \n \n \n \n \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 £'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 Revenue \n \n \n \n \n \n \n \n \n \n \n \n 711,754 \n \n \n \n \n \n \n \n \n \n \n \n 686,240 \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 (609,961) \n \n \n \n \n \n \n \n \n \n \n \n \n \n (573,133) \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 101,793 \n \n \n \n \n \n \n \n \n \n \n \n 113,107 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \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 (68,488) \n \n \n \n \n \n \n \n \n \n \n \n (68,624) \n \n \n \n \n \n \n \n \n \n \n \n \n \n Total administrative expenses \n \n \n \n \n \n \n \n \n \n \n \n (28,225) \n \n \n \n \n \n \n \n \n \n \n \n (23,132) \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 2,010 \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 Operating profit \n \n \n \n \n \n \n \n \n \n \n \n \n 7,090 \n \n \n \n \n \n \n \n \n \n \n \n \n \n 24,934 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \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 Adjusted operating profit \n \n \n \n \n \n \n \n \n \n \n \n 16,532 \n \n \n \n \n \n \n \n \n \n \n \n 33,462 \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 (526) \n \n \n \n \n \n \n \n \n \n \n \n (356) \n \n \n \n \n \n \n \n \n \n \n \n \n \n Share based payments \n \n \n \n \n 9 \n \n \n \n \n (2,562) \n \n \n \n \n \n \n \n \n \n \n \n (2,874) \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 (130) \n \n \n \n \n \n \n \n \n \n \n \n (427) \n \n \n \n \n \n \n \n \n \n \n \n \n \n Amortisation and impairments of brands, customer and supplier relationships \n \n \n \n \n \n \n \n \n \n \n \n (6,224) \n \n \n \n \n \n \n \n \n \n \n \n (4,871) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 7,090 \n \n \n \n \n \n \n \n \n \n \n \n 24,934 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \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 172 \n \n \n \n \n \n \n \n \n \n \n \n 66 \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 (8,257) \n \n \n \n \n \n \n \n \n \n \n \n \n \n (1,219) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (Loss)/profit before taxation \n \n \n \n \n \n \n \n \n \n \n \n (995) \n \n \n \n \n \n \n \n \n \n \n \n 23,781 \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 (2,392) \n \n \n \n \n \n \n \n \n \n \n \n \n \n (5,581) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (Loss)/profit after taxation \n \n \n \n \n \n \n \n \n \n \n \n \n (3,387) \n \n \n \n \n \n \n \n \n \n \n \n \n \n 18,200 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (Loss)/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 The Company's equity shareholders \n \n \n \n \n \n \n \n \n \n \n \n (3,751) \n \n \n \n \n \n \n \n \n \n \n \n 17,182 \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 364 \n \n \n \n \n \n \n \n \n \n \n \n 1,018 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (3,387) \n \n \n \n \n \n \n \n \n \n \n \n \n \n 18,200 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \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 (4.32)p \n \n \n \n \n \n \n \n \n \n \n \n 21.67p \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \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 (4.32)p \n \n \n \n \n \n \n \n \n \n \n \n 21.31p \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \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 2020 \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 2020 \n \n \n \n \n \n \n \n \n \n \n \n 2019 \n \n \n \n \n \n \n \n \n \n \n \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 £'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 (Loss)/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 (3,387) \n \n \n \n \n \n \n \n \n \n \n \n 18,200 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \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 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 (4) \n \n \n \n \n \n \n \n \n \n \n \n (386) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \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 Net (loss)/gain on net investment hedge \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (194) \n \n \n \n \n \n \n \n \n \n \n \n 194 \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 3,542 \n \n \n \n \n \n \n \n \n \n \n \n \n \n (3,115) \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 3,344 \n \n \n \n \n \n \n \n \n \n \n \n (3,307) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \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 (43) \n \n \n \n \n \n \n \n \n \n \n \n \n \n 14,893 \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 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 (878) \n \n \n \n \n \n \n \n \n \n \n \n 14,171 \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 835 \n \n \n \n \n \n \n \n \n \n \n \n 722 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (43) \n \n \n \n \n \n \n \n \n \n \n \n \n \n 14,893 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \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 2020 \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 2020 \n \n \n \n \n \n \n \n \n \n \n \n 2019 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \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 £'000 \n \n \n \n \n \n \n \n \n \n \n \n £'000 \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 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 15,350 \n \n \n \n \n \n \n \n \n \n \n \n 13,326 \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 43,631 \n \n \n \n \n \n \n \n \n \n \n \n 31,974 \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 17,102 \n \n \n \n \n \n \n \n \n \n \n \n 15,949 \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 11,206 \n \n \n \n \n \n \n \n \n \n \n \n 12,086 \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 2,386 \n \n \n \n \n \n \n \n \n \n \n \n \n \n 2,169 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 89,675 \n \n \n \n \n \n \n \n \n \n \n \n 75,504 \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 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 83,995 \n \n \n \n \n \n \n \n \n \n \n \n 88,691 \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 107,082 \n \n \n \n \n \n \n \n \n \n \n \n 104,100 \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 24 \n \n \n \n \n \n \n \n \n \n \n \n - \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 25,485 \n \n \n \n \n \n \n \n \n \n \n \n \n \n 13,015 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 216,586 \n \n \n \n \n \n \n \n \n \n \n \n 205,806 \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 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 (110,136) \n \n \n \n \n \n \n \n \n \n \n \n (106,342) \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 (1,094) \n \n \n \n \n \n \n \n \n \n \n \n (132) \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 (1,306) \n \n \n \n \n \n \n \n \n \n \n \n (3,490) \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 (7,012) \n \n \n \n \n \n \n \n \n \n \n \n (4,133) \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 (30,045) \n \n \n \n \n \n \n \n \n \n \n \n (46,529) \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 (638) \n \n \n \n \n \n \n \n \n \n \n \n \n \n (2,331) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (150,231) \n \n \n \n \n \n \n \n \n \n \n \n (162,957) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \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 66,355 \n \n \n \n \n \n \n \n \n \n \n \n 42,849 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \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 156,030 \n \n \n \n \n \n \n \n \n \n \n \n 118,353 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \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 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 (1,708) \n \n \n \n \n \n \n \n \n \n \n \n (665) \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 (3,337) \n \n \n \n \n \n \n \n \n \n \n \n (3,799) \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 (465) \n \n \n \n \n \n \n \n \n \n \n \n (2,796) \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 (34,719) \n \n \n \n \n \n \n \n \n \n \n \n (36,466) \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 (7,011) \n \n \n \n \n \n \n \n \n \n \n \n (6,850) \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 (2,303) \n \n \n \n \n \n \n \n \n \n \n \n \n \n (2,484) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (49,543) \n \n \n \n \n \n \n \n \n \n \n \n (53,060) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \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 106,487 \n \n \n \n \n \n \n \n \n \n \n \n \n \n 65,293 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \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 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 886 \n \n \n \n \n \n \n \n \n \n \n \n 799 \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 28,225 \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 4,472 \n \n \n \n \n \n \n \n \n \n \n \n 3,998 \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 (6) \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 30,436 \n \n \n \n \n \n \n \n \n \n \n \n 31,867 \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 2,117 \n \n \n \n \n \n \n \n \n \n \n \n (954) \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 194 \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 (4,813) \n \n \n \n \n \n \n \n \n \n \n \n (6,329) \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 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 100,339 \n \n \n \n \n \n \n \n \n \n \n \n 57,995 \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 6,148 \n \n \n \n \n \n \n \n \n \n \n \n \n \n 7,298 \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 106,487 \n \n \n \n \n \n \n \n \n \n \n \n \n \n 65,293 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \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 changes in equity for the year ended 31 December 2020 \n \n \n \n \n \n \n \n \n \n \n \n \n Share \ncapital \n \n \n \n \n Share premium \n \n \n \n \n Investment in own shares \n \n \n \n \n Retained \nearnings \n \n \n \n \n   \n \n \n Other reserves \n \n \n \n \n Equity attributable to owners of the Parent \n \n \n \n \n Non-controlling interests \n \n \n \n \n Total \n \n \n \n \n \n \n \n \n \n \n \n \n \n £'000 \n \n \n \n \n £'000 \n \n \n \n \n £'000 \n \n \n \n \n £'000 \n \n \n \n \n £'000 \n \n \n \n \n £'000 \n \n \n \n \n £'000 \n \n \n \n \n £'000 \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 Balance at 1 January 2020 \n \n \n \n \n 799 \n \n \n \n \n 28,225 \n \n \n \n \n (5) \n \n \n \n \n 31,867 \n \n \n \n \n (2,891) \n \n \n \n \n 57,995 \n \n \n \n \n 7,298 \n \n \n \n \n 65,293 \n \n \n \n \n \n \n (Loss)/profit for the year \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n (3,751) \n \n \n \n \n - \n \n \n \n \n (3,751) \n \n \n \n \n 364 \n \n \n \n \n (3,387) \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 (4) \n \n \n \n \n 2,877 \n \n \n \n \n 2,873 \n \n \n \n \n 471 \n \n \n \n \n 3,344 \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 (3,755) \n \n \n \n \n 2,877 \n \n \n \n \n (878) \n \n \n \n \n 835 \n \n \n \n \n (43) \n \n \n \n \n \n \n Shares issued (note \n 8 \n ) \n \n \n \n \n 87 \n \n \n \n \n 38,822 \n \n \n \n \n (7) \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n 38,902 \n \n \n \n \n - \n \n \n \n \n 38,902 \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 2,562 \n \n \n \n \n 2,562 \n \n \n \n \n - \n \n \n \n \n 2,562 \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 (232) \n \n \n \n \n (232) \n \n \n \n \n - \n \n \n \n \n (232) \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 6 \n \n \n \n \n 1,855 \n \n \n \n \n (1,856) \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n 5 \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 469 \n \n \n \n \n 1,516 \n \n \n \n \n 1,985 \n \n \n \n \n (1,985) \n \n \n \n \n - \n \n \n \n \n \n \n Balance at 31 December 2020 \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 \n \n For the year ended 31 December 2019 \n \n \n \n \n \n \n \n \n \n \n \n \n Share \ncapital \n \n \n \n \n Share premium \n \n \n \n \n Investment in own shares \n \n \n \n \n Retained \nearnings \n \n \n \n \n   \n \n \n Other reserves \n \n \n \n \n Equity attributable to owners of the Parent \n \n \n \n \n Non-controlling interests \n \n \n \n \n Total \n \n \n \n \n \n \n \n \n \n \n \n \n \n £'000 \n \n \n \n \n £'000 \n \n \n \n \n £'000 \n \n \n \n \n £'000 \n \n \n \n \n £'000 \n \n \n \n \n £'000 \n \n \n \n \n £'000 \n \n \n \n \n £'000 \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 Balance at 1 January 2019 \n \n \n \n \n 794 \n \n \n \n \n 25,855 \n \n \n \n \n (5) \n \n \n \n \n 27,535 \n \n \n \n \n (630) \n \n \n \n \n 53,549 \n \n \n \n \n 4,570 \n \n \n \n \n 58,119 \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 17,182 \n \n \n \n \n - \n \n \n \n \n 17,182 \n \n \n \n \n 1,018 \n \n \n \n \n 18,200 \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 (386) \n \n \n \n \n (2,625) \n \n \n \n \n (3,011) \n \n \n \n \n (296) \n \n \n \n \n (3,307) \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 16,796 \n \n \n \n \n (2,625) \n \n \n \n \n 14,171 \n \n \n \n \n 722 \n \n \n \n \n 14,893 \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 2,874 \n \n \n \n \n 2,874 \n \n \n \n \n - \n \n \n \n \n 2,874 \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 (128) \n \n \n \n \n (128) \n \n \n \n \n - \n \n \n \n \n (128) \n \n \n \n \n \n \n Share options exercised \n \n \n \n \n - \n \n \n \n \n 497 \n \n \n \n \n 2 \n \n \n \n \n 86 \n \n \n \n \n (585) \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n \n \n Acquisition of subsidiary (note \n 11 \n ) \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n (2,886) \n \n \n \n \n (2,886) \n \n \n \n \n 2,884 \n \n \n \n \n (2) \n \n \n \n \n \n \n Acquisition of non-controlling interest (note \n 10 \n ) \n \n \n \n \n 3 \n \n \n \n \n 1,873 \n \n \n \n \n - \n \n \n \n \n (245) \n \n \n \n \n 1,089 \n \n \n \n \n 2,720 \n \n \n \n \n (843) \n \n \n \n \n 1,877 \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 (12,305) \n \n \n \n \n - \n \n \n \n \n (12,305) \n \n \n \n \n (35) \n \n \n \n \n (12,340) \n \n \n \n \n \n \n Balance at 31 December 2019 \n \n \n \n \n 799 \n \n \n \n \n 28,225 \n \n \n \n \n (5) \n \n \n \n \n 31,867 \n \n \n \n \n (2,891) \n \n \n \n \n 57,995 \n \n \n \n \n 7,298 \n \n \n \n \n 65,293 \n \n \n \n \n \n   \n \n \n Consolidated statement of cash flows for the year ended 31 December 2020 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 2020 \n \n \n \n \n \n \n \n \n \n \n \n 2019 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \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 £'000 \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 (Loss)/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 (995) \n \n \n \n \n \n \n \n \n \n \n \n 23,781 \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 5,991 \n \n \n \n \n \n \n \n \n \n \n \n 5,425 \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 6,429 \n \n \n \n \n \n \n \n \n \n \n \n 5,023 \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 1,122 \n \n \n \n \n \n \n \n \n \n \n \n 50 \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 2,562 \n \n \n \n \n \n \n \n \n \n \n \n 2,874 \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 (295) \n \n \n \n \n \n \n \n \n \n \n \n (583) \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 (172) \n \n \n \n \n \n \n \n \n \n \n \n (66) \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 8,257 \n \n \n \n \n \n \n \n \n \n \n \n \n \n 1,219 \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 22,899 \n \n \n \n \n \n \n \n \n \n \n \n 37,723 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Decrease/(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 34,939 \n \n \n \n \n \n \n \n \n \n \n \n (5,110) \n \n \n \n \n \n \n Decrease/(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 18,097 \n \n \n \n \n \n \n \n \n \n \n \n (7,686) \n \n \n \n \n \n \n (Decrease)/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 (31,442) \n \n \n \n \n \n \n \n \n \n \n \n \n \n 1,293 \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 44,493 \n \n \n \n \n \n \n \n \n \n \n \n 26,220 \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 (4,372) \n \n \n \n \n \n \n \n \n \n \n \n \n \n (8,844) \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 40,121 \n \n \n \n \n \n \n \n \n \n \n \n 17,376 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \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 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 (18,393) \n \n \n \n \n \n \n \n \n \n \n \n (10,091) \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 (1,730) \n \n \n \n \n \n \n \n \n \n \n \n (1,977) \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 (1,860) \n \n \n \n \n \n \n \n \n \n \n \n (5,793) \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 306 \n \n \n \n \n \n \n \n \n \n \n \n 417 \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 172 \n \n \n \n \n \n \n \n \n \n \n \n \n \n 66 \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 (21,505) \n \n \n \n \n \n \n \n \n \n \n \n (17,378) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \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 Gross proceeds on issue of 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 \n \n \n \n \n \n \n 39,724 \n \n \n \n \n \n \n \n \n \n \n \n - \n \n \n \n \n \n \n Costs associated with shares issued \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (822) \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 5 \n \n \n \n \n \n \n \n \n \n \n \n - \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 (5,238) \n \n \n \n \n \n \n \n \n \n \n \n (5,517) \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 (2,875) \n \n \n \n \n \n \n \n \n \n \n \n - \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 - \n \n \n \n \n \n \n \n \n \n \n \n (12,340) \n \n \n \n \n \n \n Invoice financing (outflows)/inflows \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (32,191) \n \n \n \n \n \n \n \n \n \n \n \n 6,785 \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 4,796 \n \n \n \n \n \n \n \n \n \n \n \n 13,099 \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 (4,445) \n \n \n \n \n \n \n \n \n \n \n \n (1,053) \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 (2,438) \n \n \n \n \n \n \n \n \n \n \n \n (1,679) \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 (362) \n \n \n \n \n \n \n \n \n \n \n \n (379) \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 (4,226) \n \n \n \n \n \n \n \n \n \n \n \n \n \n (2,627) \n \n \n \n \n \n \n \n Net cash 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 (8,072) \n \n \n \n \n \n \n \n \n \n \n \n (3,711) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \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 10,544 \n \n \n \n \n \n \n \n \n \n \n \n (3,713) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \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 11,497 \n \n \n \n \n \n \n \n \n \n \n \n 16,357 \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 1,754 \n \n \n \n \n \n \n \n \n \n \n \n \n \n (1,147) \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 23,795 \n \n \n \n \n \n \n \n \n \n \n \n \n \n 11,497 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \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 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 25,485 \n \n \n \n \n \n \n \n \n \n \n \n 13,015 \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 (1,690) \n \n \n \n \n \n \n \n \n \n \n \n \n \n (1,518) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 23,795 \n \n \n \n \n \n \n \n \n \n \n \n \n \n 11,497 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \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 1.  Accounting policies \n \n \n   \n \n \n General information and nature of operations \n \n \n The principal activity of Midwich Group plc, a public limited liability company, and its subsidiary companies is the distribution of Audio Visual Solutions to trade customers. It is registered in England and Wales. Midwich Group plc's shares are listed on the London Stock Exchange's Alternative Investment Market (AIM). \n \n \n Basis of preparation \n \n \n The consolidated financial statements of Midwich Group plc (\"the Group\") have been prepared in accordance with International Accounting Standards (\"IAS\") in conformity with the requirements of the Companies Act 2006. \n \n \n These accounting policies comply with each IAS that is mandatory for accounting periods ending on 31 December 2020. \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 Basis of consolidation \n \n \n The Consolidated Financial Statements incorporate the results of Midwich Group plc (\"the Company\") 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...

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