Logistics Development : LDG FINANCIAL STATEMENTS 2021

Annual Report & Financial Statements 2021

Table of contents

Strategic Report

Letter from Chairman 1

Business and Financial review 3

Risk management and principal risks 8

Governance

The Board of Directors

Chairman's governance statement

The Board

Audit Committee report

Remuneration Committee report

Directors' report

Statement of Directors' responsibilities in respect of the financial statements

Financial Statements

Independent Auditors' report

10

11

13

15

17

19 21

22

Company Statement of Comprehensive Income 28

Company Statement of Financial Position 29

Company Statement of Changes in Equity 30

Company Cash Flow Statement 31

Notes to the Company Financial Statements 32

Glossary 40

Advisors 41

Dear Shareholders

Strategic Report

Letter from Chairman

I am pleased to present the annual report and the audited financial statements for Logistics Development Group plc ("LDG", "the Company") for the year ended 30 November 2021.

It was an exciting year for the Company, which culminated in the successful disposal of Marcelos' investment in GreenWhiteStar Acquisitions Limited ("GWSA") and its subsidiaries Eddie Stobart, The Pallet Network, iForce, Eddie Stobart Europe and The Logistics People (together the "Eddie Stobart Businesses") to Culina Group Limited, one of the UK's leading logistics companies, which is owned by the German Müller family.

During the 17 months period under the control of DBAY Advisors Limited ("DBAY"), our investment manager, GWSA's profitability was increased from an EBITDA (pre IFRS 16) of £4.2m in 2019 to £47.8m by the end of the 2020 financial year, while net financial debt had been reduced from £221.7m to £144.5m. On the back of this outstanding performance, the disposal of our 49% shareholding in GWSA and the £6.0m PIK Loan note held by LDG generated a cash inflow of £125.2m, meaning the Company had a cash balance of £131.9m or approximately £0.19 per share at the year end. LDG's share price was £0.06 at the time when DBAY took control of GWSA, implying a money multiple of approximately 3x over the 17 month period during which DBAY controlled GWSA and its subsidiaries.

Driven by the disposal of GWSA, your Company reported strong results for the year ended November 2021, with anunderlying EBIT1 of £84.6m (2020: loss of £11.3m) before exceptional income of £0.1m (2020: exceptional income of £3.4m) and a profit before tax of £84.7m (2020: loss before tax of £7.9m).

Including income received from additional deferred consideration from the GWSA disposal, the Company now has no financial debt and a cash balance of £131.9m or approximately £0.19 per ordinary share. These results are discussed in detail in the Business and Financial Review and in the notes to the financial statements.

The proceeds from the disposal will be used twofold. Most of the funds will be deployed in investments identified by our investment manager, DBAY. As you might be aware, post period end during a general meeting held on 31 January 2022, shareholders approved a broadening of the investing policy. This will allow DBAY to invest in opportunities outside the logistics sector, broadening the opportunity set available to LDG. On 10 March 2022, the Company announced its first investment under the new investing policy, as amended after the General Meeting held on 31 January 2022 (the "General Meeting"), investing £6.3m in Caretech Holdings PLC for approximately 0.88% of Caretech's issued share capital. On 1 April 2022, the Company announced that it had acquired further shares in Caretech Holdings Plc for a further consideration of £6.8m. As a result the Company now owns 1.74% of Caretech's issued share capital.

I believe DBAY have found a good home for the Eddie Stobart Businesses in Culina Group. Culina's management has a deep understanding of the UK transport and logistics landscape, as well as the financial resources to allow the Eddie Stobart Businesses to continue its long-standing successful heritage.

Secondly, since LDG's share price has consistently been trading at a discount to the Company's cash per share, the Board decided to initiate a share buyback program to narrow the discount over time. This has also been approved by shareholders at the General Meeting and the Company has since commenced the buyback programme

Letter from Chairman continued

which should allow the Company to narrow the discount to net asset value at which LDG's ordinary shares currently trade.

Over the last year, we had the opportunity to welcome two new Directors to the Board of LDG. Peter Nixon is an experienced chartered accountant and was appointed to the Board from 9 December 2021, replacing Saki Riffner. David Facey, also an experienced chartered accountant and CFO of AIM-listed companies operating within the financial sector, was appointed to the Board and as chair of the Audit Committee from 1 April 2021.

now faces. The tragic events in the Ukraine, which are unfolding before our very eyes need little embellishment from me, excepting that I would never have thought I would be part of the pre-war generation! Following on from the well documented dysfunctional damage that the COVID outbreak has caused to the world, it has been a very grim start to the 21st century, but let us hope that we can move into sunnier times sometime soon.

Finally, I would like to thank shareholders, old and new, for their continued support.

The Company is now in the fortunate position that it has only made a small acquisition and as such has a clean canvas to work with and a broader investing policy. I have every confidence that DBAY as our investment manager will make good use of the funds to invest in companies which will reward all shareholders. In the 50 years I have been following stock markets I have never encountered such an extraordinary set of circumstances which the world

Adrian Collins Chairman

1

Underlying EBIT is an alternative performance measure (see Note 3) and is defined as profit/loss before interest and tax adding back exceptional items.

Review of the year

Transition to AIM Investing Company, appointment of DBAY as investment manager, and fund-raising

On 31 December 2020, following a successful fund-raising through a subscription, placing and open offer generating £16.2m (net £14.5m), the Company's shares were re-admitted to trading on AIM, completing its transition to an AIM-listed Investing Company. Initially, the investing policy was focused on the logistics sector and DBAY was appointed as the Company's investment manager.

DBAY is an asset management firm with offices in London and the Isle of Man. Its core team has been working together for over 20 years and combines a diversified set of skills from financial and operational backgrounds, with deep insight into a number of industry sectors. The team worked together on their first investment vehicle in 2008, and formed DBAY in 2011. Additional information on DBAY is set out on page 6 of this report.

New investments during the period

Following the fund-raising, in May 2021, LDG under the guidance of our investment manager DBAY, invested £6.0m to acquire an indirect 10.9% equity interest in an 18% PIK Loan note with indirect exposure to the performance of GWSA and its subsidiaries. This principal plus accrued interest was repaid upon the disposal of GWSA on 1 July 2021.

Turnaround and disposal of GWSA

On 30 March 2021, GWSA advised LDG of its audited consolidated results for the year ended 30 November 2020. After a year under the control of DBAY, GWSA and the Ed-die Stobart Businesses had delivered a strong turnaround, with EBITDA (excluding the impact of IFRS 16), increasing to £47.8m vs. £4.2m in the prior year. In addition, the net financial debt of GWSA reduced by £77m to £145m in the

2019

2020

Net financial debt (£m)

250.0

200.0

150.0

100.0

50.0

0.0

2019

2020

The turnaround was achieved with DBAY's active operational involvement and included a significant number of value creation activities.