MARWYN MANAGEMENT PARTNERS PLC Marwyn Management Partners plc ('MMP' or 'the Company')
Results for the year to 31 December 2015
The Board of MMP releases below the results for the year to 31 December 2015.
Highlights
· Total group revenue on continuing operations of £14.4 million (2014: £18.4 million)
· Adjusted EBITDA* on continuing operations of Le Chameau of £(5.9) million (2014: £(3.2) million)
· Loss from continuing operations before tax £(10.4) million (2014: £(5.8) million)
· Profit from discontinuing operations of £0.6 million (2014: loss £(2.7) million)
· Net cash of £8.5 million (2014: £1.3 million)
· Basic and diluted loss per share on continuing operations of (1.4) pence (2014: (2.4) pence)
· Placing to raise £11.65 million completed in March 2015 with the proceeds to be used to implement the Le Chameau growth strategy
· As announced on 27 April 2016, a further credit facility of £4.7 million from the Group's major shareholder, Marwyn Value Investors LP to fund the costs of closing the Le Chameau factory in France
· Le Chameau UK distributor agreement terminated and UK operations internalised
· Significant investment made in new ERP system
*Earnings Before Interest, Tax, Depreciation and Amortisation
Enquiries:
Mark Watts
Mark Kirkland
Marwyn Management Partners plc
Telephone +44 (0) 207 004 2700
Paul Shackleton
Mark Leonard
WH Ireland Limited
Telephone +44 (0) 207 220 1666
Chairman's Statement
I am pleased to present the final results for Marwyn Management Partners plc (the 'Company' or 'MMP') for the year ended 31 December 2015.
The Group raised £11.65 million in March 2015 to fund Le Chameau's 5 year growth plan and increase its holding in Le Chameau to 97.3% by buying out some minority interests.
Utilising the proceeds from this fundraise, MMP commenced an initial phase of investment into Le Chameau in line with the 5 Year Plan. The implementation of a new IT system remains on track for delivery in 2016, providing alignment between each key function of the business (sourcing, logistics, sales and finance) and is required in order for the business to achieve greater scale. The UK and German distributor agreements were terminated and direct sales teams in both of these territories recruited. Furthermore, investment continues in product development with boot products aimed at existing and new customers set to launch in 2016.
During 2015, discussions commenced regarding the closure of the Le Chameau factory in France. As announced on 27 April 2016, following an extensive consultation process with employees, a redundancy programme has been agreed. It is expected that this consolidation of the business's manufacturing operations will result in material efficiency benefits being achieved. In order to fund this process, a credit facility of £4.7 million has been obtained from the Company's major shareholder, Marwyn Value Investors LP. A £3.7 million exceptional charge for redundancy and other closure costs has been taken in 2015. Ongoing, production will continue at the business's existing Morocco factory which has been operational since 1949 and in 2015 accounted for over 85% of boot production. Furthermore, investment in the Moroccan factory has begun in order to increase the capacity of the site, which will enable the business to manage the additional production requirements resulting from anticipated future demand.
Revenue for 2015 was down on the prior year with challenging trading conditions in France a contributing factor. The revenue decline is accentuated however, as the business undertook a rationalisation of low margin accounts throughout the year in France and other markets. The future emphasis on sales will be to continue to accelerate development of more buoyant overseas markets such as the UK and Germany where management are already seeing interest in the wider range of Le Chameau boots now being offered.
OUTLOOK
In 2015, we embarked on several fundamental projects to transform Le Chameau and as such this has been a further year of transition for the business. In 2016, we are hopeful of seeing the benefits of Le Chameau operating with a single-site production facility in Morocco, an internalised distribution model, a fully aligned IT system, a compelling new product range and an e-commerce platform. There are already encouraging signs relating to these key items and the Directors are enthused about the future.
Robert Ware
Chairman
27 April 2016
STRATEGIC REPORT
BACKGROUND
The Company was established in 2010 to pursue acquisition-led growth strategies, targeting companies in fragmented sectors or sectors undergoing structural change, where the Company believes significant capital value can be created through operational improvements and new revenue opportunities.
The Group's focus is on the luxury goods business, Silvercloud, which made progress with its Le Chameau business during the year.
As at 31 December 2015, the Group had 303 employees (2014: 310).
GROUP STRUCTURE
MMP has established a Jersey-based company, Marwyn Management Partners Subsidiary Limited ('MMPSL'), which acts as a holding company for its operating subsidiaries. The Group's operating structure at 31 December 2015 is as follows:
MMP | |
MMPSL | |
| Silvercloud 97.3% | |
Le Chameau 100% | |
As part of the refinancing following the placing in March 2015, further minority interests in Silvercloud were acquired, increasing the Group's holding from 87.3% to 97.3%.
Silvercloud was established to pursue the acquisition of one or more operating companies within the luxury goods sector. Silvercloud completed the acquisition of Le Chameau in October 2012.
Le Chameau
Founded in 1927, Le Chameau is a French-based producer of high-end rubber boots, footwear and apparel. Le Chameau's rubber boots are historically manufactured by hand at its facilities in Normandy, France and Casablanca, Morocco.
Since acquiring Le Chameau it has been apparent that alongside the long term growth potential of the business in new markets, there are significant unaddressed opportunities for operational improvement in the business across distribution, manufacturing, marketing and product range where there is scope for rationalisation. Addressing these areas has the potential to drive greatly increased sales and higher production margins, as well as acting as a foundation for the development of the business in new markets.
In the year to 31 December 2015, Le Chameau generated revenue of £14.4 million (2014: £18.4 million) which was a decrease of £4.0 million on the prior year, driven by reduced sales in line with management's significant rationalisation of low margin products and a generally tough French market.
Strategy and progress
The Group's strategy is to develop Le Chameau into a premium goods brand, built upon its unique 89-year heritage and the quality of its hand-made products.
Since completion of the acquisition, the business has restructured a number of key elements of its strategy. In late 2015 discussions commenced with the French factory workforce regarding the intention to close the factory in Pont d'Ouilly, Normandy and transfer production of the boots manufactured there to the existing Casablanca, Morocco factory. These discussions were concluded in April 2016 as announced 27 April 2016. During 2016 the focus of the business will be to further consolidate its existing operations following the closure of the French factory and to begin to build new international distribution relationships that will provide the platform for growth in both existing and new markets from 2016. The core boot range is the foundation of the business and is genuinely best in class. Le Chameau remains well positioned to open new markets and increase its share of the European and global branded rubber boot market.
In 2013 the decision was made to exit the transport sector and the MET subsidiary was sold in 2014 for a nominal amount with the possibility of deferred consideration in the future, of which £0.2 million was received in 2015.
GROUP FINANCIAL REVIEW
Overview
2015 was a year of considerable change for the Group, with the further development of Le Chameau.
In the year to 31 December 2015, the Group generated reported revenue on continuing operations of £14.4 million (2014: £18.4 million). The reported loss from continuing activities before tax for the year was (£10.4) million (2014: £(5.8) million), including the cost of managing, developing and funding the Group's activities to date, although the loss for the year of £(9.9) million includes the net profit from discontinuing operations of £0.6 million. During the year the Group delivered losses on the Le Chameau continuing operations before interest, tax and depreciation and amortisation ('EBITDA') of (£8.0) million (2014: (£3.2) million). This included the net cost of £3.7 million of the redundancy and other closure costs of the French factory.
At 31 December 2015, the Group's consolidated net assets were £10.9 million (2014: £9.7 million), cash was £9.5 million (2014: £4.2 million) and net cash was £8.5 million (2014: £1.3 million).
Prior year figures include amounts in relation to the discontinued MET business that was sold in 2014.
Income Statement
Central costs
Central costs of £0.9 million (2014: £1.3 million) comprise head office and management costs of the Company and its immediate subsidiary company, MMPSL.
Interest and Tax
Net finance costs in the year totalled £0.2 million (2014: £0.7 million) and included interest charges on Central borrowing costs. A tax charge of £nil (2014: £0.4 million) was recognised in the year.
Loss per share
Loss per share ('LPS') on continuing operations for the year was (1.4) pence (2014: (2.4) pence).
`Statement of Financial PositionNet assets at 31 December 2015 were £10.9 million (2014: £9.7 million). The Group's net assets include cash of £9.5 million (2014: £4.2 million), net cash of £8.5 million (2014: £1.3 million) and property, plant and equipment held in its operating subsidiaries of £2.0 million (2014: £3.4 million). The Group has goodwill and intangible assets relating to acquisitions of £3.4 million (2014: £3.0 million).
The Group performs an annual impairment review for goodwill and other intangible assets with indefinite useful lives, by comparing the carrying amount of these assets with the recoverable amount. Testing is carried out by allocating the carrying value of these assets to groups of cash generating units. The results of the impairment reviews support the value of the assets in Le Chameau at the year end. Impairment testing requires an estimate of future cash flows and determination of a suitable discount rate. These calculations require the use of estimates which are inherently judgemental and susceptible to change because they require the Group to make assumptions about future supply and demand, economic and market conditions.
Group borrowings
At 31 December 2015, total Group cash, net of debt, was £8.5 million (2014: £1.3 million.) Le Chameau has access to an invoice discounting facility with Eurofactor, from which £0.7 million (2014: £1.5 million) was outstanding at the end of the year, and other on-demand facilities of £0.8 million.
Share capital
The Company had 755.7 million (2014: 473.2 million) Ordinary shares in issue at the end of the year.
Cashflow
During the year, the Company raised £11.65 million gross from the issue of Ordinary shares (2014: £5.4 million raised from the issue of Ordinary shares and a further £12.0 million of loan notes and accrued interest were converted to Ordinary shares).
Cash outflow from operations was £3.0 million (2014: £5.3 million) and the net cash outflow from investing activities and capital expenditure was £1.4 million (2014: £1.5 million). Repayment of borrowings and associated interest totalled £1.8 million (2014: £12.2 million). In total, this resulted in cash and cash equivalents at year end of £9.5 million (2014: £4.2 million).
Each division retains ownership for their respective cash management processes, although overall control remains at Group level.
Principal risks and uncertainties
Risk is an inherent and accepted element of doing business. The Board has identified the principal risks impacting the Group and maintains and develops a risk management system that is appropriate and commensurate to the business. Set out below are the key risks to the Group, together with the mitigating factors or action the Group has taken in respect of those risks.
Financial risk
The Group's assets, earnings and cash flows are exposed to a variety of financial risks. These risks include:
· Availability of funds to meet the Group's operating and financing requirements
· Fluctuations in interest and foreign exchange risks
· Pricing risk arising from the Group's investments in financial assets
The management of financial risks is further detailed in note 22 to the Group financial statements.
Performance risk
The Company's investment portfolio is exposed to external factors which may impact on directly on its performance. The performance of each of the operating companies is monitored to ensure that risks to the underlying performance of the businesses are addressed.
Dependence on shareholders
The Group is dependent on shareholders for the provision of equity finance and for permission to raise such finance.
Dependence on key personnel
The Group's strategy of working with operational management teams means that the loss of the service of key personnel may have an adverse effect on the business. The Group employs incentivisation schemes where appropriate, including rewards for long term sustainable increase in shareholder value, in order to retain and maximize the value of management employed by the Group. Details of the Group's incentive schemes are set out in note 30.
Changes to legislation and regulation
Le Chameau is subject to local regulation and regulatory change which may impact its future performance. Local management is responsible for ensuring compliance with regulations and, where appropriate, operational procedures are established to provide a compliance framework for each business. Management monitors regulatory and legal developments and at a local and national level participate in industry forums through membership of various trading bodies. Regulatory change in luxury goods industry occurs relatively slowly.
Operational risk
The Group has established an internal control and governance framework, however prior to acquisition, each operating division had its own internal governance, control and operational framework. Whilst the Group undertakes due diligence on investment opportunities, it cannot be guaranteed that all material weaknesses in a company's operating models are identified. In addition, the diversity of the Group's business activities and reliance on different systems, machinery and equipment, and people for its operating divisions increase its exposure to operational risks in the event of failure of any one element. Operational interruptions resulting from accidents, system interruptions or damage to plant, machinery and equipment may also adversely affect the Group's operations and financial performance. To mitigate these risks the Group has in place preventative maintenance programmes, regular monitoring of operational performance as well as comprehensive insurance. Health, safety and the environmental compliance are also considered key priorities in the Group's operations, more details on which are provided in the Directors' Report.
Approved by the Board and signed on its behalf by:
Mark Kirkland
Chief Financial Officer
27April 2016
BOARD OF DIRECTORS
Robert Ware, Non-executive Chairman
Robert Ware was appointed as a Director and Chairman on 15 October 2010 and is also a member of the Audit and Risk Committee, Remuneration Committee and is Chairman of the Nomination Committee. Robert is not considered to be independent according to the provisions of the Corporate Governance Code. Robert is the chief executive of The Conygar Investment Company PLC, a property development and investment company. Robert is also the chairman of Terra Catalyst Fund and Marwyn Value Investors Limited, and a director of Chalkstream Investment Company Plc. He is also a non-executive director of Tarsus Group plc.
Ian Steer, Senior Non-executive Director
Ian was appointed to the Board on 12 January 2011 and became the Senior Independent Director on the same date. Ian became a member of the Audit and Risk Committee on 13 December 2011 and is also a member of the Nomination Committee and is Chairman of the Remuneration Committee. Ian Steer, MA (Oxon) served as a director of Samuel Montagu & Co Ltd from 1988 to 1993 where he ran the property/project and tax-based lending teams and worked closely with the Corporate Finance Division on a range of major acquisitions and buy-ins. Ian left to set up his own consultancy company and accepted a part time directorship at LCF Rothschild Securities Ltd where he introduced a major management buyout which led to a flotation. Ian teamed up with the property director of a management buy-in client to form a consultancy to the logistics industry and concluded several transactions for major car manufacturers and transporters that were sold on or partly retained and developed. Ian is currently a director of several property development and investment companies and is backing a number of energy from waste projects.
Stephen East, Non-executive Director
Stephen was appointed to the Board on 12 January 2011 and is the Chairman of the Audit and Risk Committee and is also a member of the Nomination and Remuneration Committees. Stephen joined Redland plc's treasury team in 1983 becoming Group Treasurer in 1987 with global responsibilities including tax, treasury, insurance and corporate finance. In 1996 he left to set up his own consultancy business before joining one of his clients, MEPC plc, at the end of 1997 as Director of Corporate Finance, becoming Group Finance Director in May 1999 until September 2003. From June 2005 until December 2008 he was Group Finance Director of Woolworths Group plc. He is non-executive chairman of Local Shopping REIT plc, a non-executive director of Snoozebox Holdings plc, and Genesis Housing Association Limited, a former President of the Association of Corporate Treasurers and a fellow of the Institute of Chartered Accountants in England and Wales. He was a non-executive director of Star Energy Group plc from 2004 to 2008, of Regus Group plc from 2005 to 2008 and CQS Diversified Fund Limited from 2010 to 2015.
James Corsellis, Executive Director
James Corsellis founded Marwyn, the asset management and corporate finance group, in 2002 with Mark Brangstrup Watts. James is joint managing partner of Marwyn Capital LLP, which provides corporate finance advice, and MIM LLP, which provides asset management solutions and investment advisory services, (both of which are regulated by the Financial Conduct Authority). James is a director of MAML, a regulated fund manager, and also a trustee of the Marwyn Trust, a charity focused on initiatives supporting education and entrepreneurship for young people in disadvantaged communities. Marwyn has launched 15 companies across a variety of sectors with James providing support to these companies, using his experience of working with a number of companies in various roles (currently as an Executive Director of Gloo Networks plc and a Non-Executive Director of BCA Marketplace plc, and past roles including Chairman of Entertainment One Limited and director of Breedon Aggregates Limited, Concateno plc and Catalina Holdings Limited) as well as his operating experience as the CEO and founder of technology business, iCollector plc and CM Interactive. James was educated at Oxford Brooks University, The Sorbonne, and London University.
Mark Brangstrup Watts, Executive Director
Mark Brangstrup Watts has a BA (Hons) from London University and since 1998 he has advised the boards of UK and other public companies. Mark worked for Matrix Strategic Research Ltd as a management consultant from 1995 to 1999 and as a freelance consultant from 1999 to 2000, during which time Mark provided financial analysis and was responsible for strategic development projects for several listed and unlisted companies. In 2000, Mark, alongside James Corsellis, founded Marwyn and is currently a managing partner of Marwyn Investment Management LLP and Marwyn Capital. Whilst at Marwyn, Mark has specialised in advising small-cap listed and unlisted companies on strategy and business planning and has overseen a number of transactions, raising an aggregate equity of close to £2.5 billion in acquisition funding. Mark is a director of BCA Marketplace plc and Zegona Communications plc which are admitted to trading on the Official List, and AIM-listed Gloo Networks plc and has been a director of several Official List and AIM-listed companies including Entertainment One Ltd., Advanced Computer Software Plc, Inspicio plc and Talarius plc.
Mark Kirkland, Chief Financial Officer
Mark joined as CFO in June 2012. He has extensive corporate and public company experience, having previously been CFO of Raven Mount Group Plc. Mark is a Chartered Accountant, having qualified with Price Waterhouse (London) and also worked extensively in corporate finance, predominantly with UBS Ltd.
DIRECTORS REPORT
The Directors present their report, together with the consolidated audited financial statements, for the year ended 31 December 2015.
Principal Activity and Business Review
MMP is a corporate vehicle launched to pursue acquisition led growth strategies. The Company identifies and works alongside management teams with proven sector expertise to deliver capital value through the execution of its 'buy and build' strategies.
The Board of Directors are required under section 417 of the United Kingdom Companies Act 2006 ('UKCA 2006') to present a fair review of the business of the Group during the financial year ended 31 December 2015 and its future developments, the position of the Group at the end of the financial year and a description of the principal risks and uncertainties facing the Group. The information that fulfils the requirements of section 417 can be found in the following sections of the Report which are incorporated in this review by reference:
· Highlights
· Chairman's Statement
· Strategic Report
• Directors' Report
Results and Dividends
For the year ended 31 December 2015, the Group's loss before tax on continuing operations was £10.4 million (2014: loss £5.8 million). Dividends will be paid to shareholders when there are sufficient distributable reserves and the Directors believe it is appropriate and prudent to do so. No dividends have been recommended for the year ended 31 December 2015 or the prior year.
Directors
The following Directors served during the year and up to the date of the signing of the financial statements:
Robert Ware | Chairman | |
Ian Steer | Senior Independent Director | |
Stephen East | Non-Executive Director | |
James Corsellis | Executive Director | |
Mark Brangstrup Watts | Executive Director | |
Mark Kirkland | Chief Financial Officer |
Biographies of the Directors at the date of this report are provided in the section entitled Board of Directors.
Directors' Interests
The Directors had the following interests in the issued share capital of the Company as at 31 December 2015:
At 31 December 2015 | At 31 December 2014 | ||
Director | Ordinary shares | Ordinary shares | |
Robert Ware | 150,000 | 150,000 | |
Ian Steer | 94,000 | 114,000 | |
Stephen East | 56,400 | 56,400 | |
Mark Brangstrup Watts | 25,000 | 25,000 | |
James Corsellis | 25,000 | 25,000 | |
Mark Kirkland | - | - | |
Subsequent to the year end, Ian Steer purchased an additional 40,000 shares, taking his holding to 134,000 shares. | |||
There were no contracts or share schemes existing during, or at the end of the year in which any Director is, or was, materially interested which are, or were, significant in relation to the business of the Group with the exception of the Founder Securities Agreement, and the options over 1,285,373 ordinary shares granted to Mark Kirkland, details of which are set out in note 30 to the Group financial statements.
The Executive Directors hold a number of non-executive positions which are referred to in their respective biographies. The Company has throughout the year and at the date of approval of the financial statements had third party indemnity and liability insurance for its Directors and Officers in place against any financial consequences of actions which may be brought against them by third parties for their acts or omissions in the course of the performance of their duties as Directors or Officers of the Company.
Major Interests in Ordinary Shares
As at 24 April 2016, the Company has been notified of the following shareholder holding 3% or more of the issued ordinary share capital of the Company:
Shareholder | Ordinary shares | % ownership |
Marwyn Value Investors LP | 680,782,681 | 90.1 |
Employees
The Group recognises the importance of employee involvement in the operation and development of its businesses, which are given autonomy within the Group structure to enable management to be fully accountable for their own actions and gain maximum benefit from local knowledge. The Group is committed to providing equal opportunities for individuals in all aspects of employment.
Employee Share Incentive Schemes
The Company and certain subsidiaries in the Group operate employee share incentive schemes which contain provisions whereby, upon a change of control, outstanding options and awards would vest and become exercisable, subject (in the case of certain schemes only) to the satisfaction of any performance conditions at that time and any time pro-rating of options and awards. Details of the Group's share incentive schemes are set out in note 30.
Payment of Creditors
The Company is a corporate investment vehicle and has no external trade suppliers. It is the policy of the Group's operating businesses to negotiate payments terms when agreeing the overall terms of the transaction with all their suppliers, and to abide by them provided that they are satisfied that the supplier has provided the goods or services in accordance with the agreed terms and conditions. The Group does not follow any standard or external code which deals specifically with the payment of suppliers.
Charitable Donations and Political Contributions
The Group made no charitable or political donations during the year (2014: £nil).
Contracts of Significance
Le Chameau has entered into a corporate finance advisory agreement with Marwyn Capital LLP ('Marwyn Capital'), a related party, pursuant to which Marwyn Capital will provide strategic and corporate advice and office services.
At no time during the year did any Director hold a material interest in any other contract of significance with the Company or any of its subsidiary undertakings other than the service contracts between each Executive Director and the Company and except as described in note 31 to the Group financial statements.
Change of Control
The Founder Securities are B ordinary shares in MMPSL. On satisfaction of the performance condition referred to below the holders of Founder Securities have the right to redeem the Founder Securities for an amount equal to 20 percent of the Adjusted Market Capitalisation of the Company (defined as the market capitalisation less the book value of assets held by the Company which the Operator has recommended be returned to shareholders) as at the date the performance condition is satisfied (subject to such further adjustment as the auditors may approve as a result of any share capital reorganisation).
Broadly, the performance condition will be satisfied when shareholders have received or are deemed to have received an IRR of 10 percent and a minimum return of 125 percent of the gross proceeds from all relevant issues of equity securities. The performance condition is also satisfied on a change of control of the Company.
Health Safety and Environment
The safety of our customers and staff is our highest priority. We focus on eradicating unsafe acts and practices and continually seek to develop ways to actively engage employees in ensuring best practice in all areas of health and safety across all of our businesses.
The Board of the Luxury Goods business monitors health and safety risks and has a health and safety committee that meets quarterly. Health and safety standards and benchmarks have been established and performance is closely monitoredthrough Safety Key Performance Indicators.
A strong Corporate Social Responsibility (CSR) culture is important to any business. It drives businesses to improve performance resulting in better employee engagement, improved customer service and higher business efficiency. CSR is also about ensuring the Group helps tackle some of the wider challenges we face as a society including congestion, resource use and climate change. The Group is fully committed to playing its part in meeting these challenges.
Employment policies
It is the policy of the Group to consider the health, welfare and well-being of employees by maintaining safe places and systems of work. The Group's employment policies are regularly reviewed by local management to ensure they remain effective. These policies promote a working environment which underpins the recruitment and retention of professional and conscientious employees, and which improves productivity in an atmosphere free of discrimination. The Group is committed to giving full and fair consideration to all applicants for employment who are disabled and for continuing the employment of those who become disabled while employed.
Training is also a priority and is a focus of considerable effort. Employees are consulted and involved in the development of the Group in a number of ways which include regular briefings, team updates, workers council and announcements.
Going concern
The Directors have reviewed the Group's budget, its liquid resources and its medium term plans, and undertook a placing in March 2015 to raise funds for the execution of the Le Chameau business plan. Based on these factors, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future and, accordingly, consider that it is appropriate to adopt the going concern basis in preparing these financial statements.
Statement of Directors' responsibilities
The Directors are responsible for preparing the Strategic Report, Directors' Report and the Group financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the directors have prepared the Group financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union, and the parent company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group for that period. In preparing these financial statements, the Directors are required to:
· select suitable accounting policies and then apply them consistently;
· make judgements and accounting estimates that are reasonable and prudent;
· state whether IFRSs as adopted by the European Union and applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the Group and parent company financial statements respectively;
· prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and enable them to ensure that the financial statements comply with the Companies Act 2006 and, as regards the Group financial statements, Article 4 of the IAS Regulation. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Having taken all matters considered by the Board and brought to the attention of the Board during the year into account, the Directors are satisfied that the Report and Group Financial Statements, taken as a whole, is fair, balanced and understandable, and provides the information necessary for shareholders to assess the Company's performance.
Each of the Directors, whose names and functions are listed on page 8, confirms that, to the best of their knowledge:
· the Group financial statements, which have been prepared in accordance with IFRSs as adopted by the EU, give a true and fair view of the assets, liabilities, financial position and loss of the Group; and
· the Directors' report contained includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal risks and uncertainties that it faces.
Auditors and disclosure of information to auditors
In accordance with Companies Act 2006, all Directors in office as at the date of this report have confirmed:
· As far as the Director is aware, there is no relevant audit information of which the Company's auditors are unaware and;
· The Director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the Company's auditors are aware of that information.
The auditors, PricewaterhouseCoopers LLP, have indicated their willingness to continue in office, and a resolution that they be re-appointed will be proposed at the Annual General Meeting.
On behalf of the Board
Mark Kirkland
Director
27 April 2016
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MARWYN MANAGEMENT PARTNERS PLC
Report on the Group financial statements
Our opinion
In our opinion Marwyn Management Partners plc's group financial statements ('the financial statements'):
give a true and fair view of the state of the group's affairs as at 31 December 2015 and of its loss and cash flows for the year then ended;
have been properly prepared in accordance with International Financial Reporting Standards ('IFRSs') as adopted by the European Union; and
have been prepared in accordance with the requirements of the Companies Act 2006 and Article 4 of the IAS Regulation.
What we have audited
Marwyn Management Partners plc's financial statements comprise:
the Consolidated Statement of Financial Position as at 31 December 2015;
the consolidated Statement of Comprehensive Income for the year then ended;
the Consolidated Cash Flow Statement for the year then ended;
the Consolidated Statement of Changes in Equity for the year then ended; and
the notes to the consolidated financial statements, which include a summary of significant accounting policies and other explanatory information.
The financial reporting framework that has been applied in their preparation is applicable law and IFRSs as adopted by the European Union.
In applying the financial reporting framework, the directors have made a number of subjective judgements, for example in respect of significant accounting estimates. In making such estimates, they have made assumptions and considered future events.
Opinions on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements.
Other matters on which we are required to report by exception
Adequacy of information and explanations received
Under the Companies Act 2006 we are required to report to you if, in our opinion, we have not received all the information and explanations we require for our audit. We have no exceptions to report arising from this responsibility.
Directors' remuneration
Under the Companies Act 2006 we are required to report to you if, in our opinion, certain disclosures of directors' remuneration specified by law are not made. We have no exceptions to report arising from this responsibility.
Responsibilities for the financial statements and the audit
Our responsibilities and those of the directors
As explained more fully in the Statement of Directors' Responsibilities set out on page 12, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view.
Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK & Ireland) ('ISAs'). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.
This report, including the opinions, has been prepared for and only for the company's members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.
What an audit of financial statements involves
We conducted our audit in accordance with ISAs (UK & Ireland). An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of:
whether the accounting policies are appropriate to the group's circumstances and have been consistently applied and adequately disclosed;
the reasonableness of significant accounting estimates made by the directors; and
the overall presentation of the financial statements.
We primarily focus our work in these areas by assessing the directors' judgements against available evidence, forming our own judgments, and evaluating the disclosures in the financial statements.
We test and examine information, using sampling and other auditing techniques, to the extent we consider necessary to provide a reasonable basis for us to draw conclusions. We obtain audit evidence through testing the effectiveness of controls, substantive procedures or a combination of both.
In addition, we read all the financial and non-financial information in the Annual Report and Financial Statements to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.
Other matter
We have reported separately on the company financial statements of Marwyn Management Partners plc for the year ended 31 December 2015.
Darryl Phillips (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
27April 2016
Consolidated Statement of Comprehensive Income
For the year to 31 December 2015
For the year to 31 December 2015 | For the year to 31 December 2014 | ||||||
Note | £'000 | £'000 | |||||
Continuing operations | |||||||
Revenue | 14,398 | 18,442 | |||||
Cost of sales | (5,993) | (7,932) | |||||
Gross profit | 8,405 | 10,510 | |||||
Administrative expenses | (18,618) | (15,648) | |||||
Operating loss | 4 | (10,213) | (5,138) | ||||
Analysed as | |||||||
Loss from continuing operations before exceptional items | (6,526) | (5,138) | |||||
Exceptional items included in administrative expenses | 5 | (3,687) | - | ||||
Operating loss | (10,213) | (5,138) | |||||
Finance income | 12 | 8 | 4 | ||||
Finance costs | 12 | (244) | (664) | ||||
Loss before taxation | (10,449) | (5,798) | |||||
Taxation | 11 | - | (381) | ||||
Loss after taxation from continuing operations | (10,449) | (6,179) | |||||
Profit/(loss) from discontinuing operations (net of taxation) | 13 | 570 | (2,745) | ||||
Loss for the year | (9,879) | (8,924) | |||||
Loss for the year attributable to: | |||||||
- Equity holders of the Company | (9,408) | (8,200) | |||||
- Non-controlling interests | (471) | (724) | |||||
(9,879) | (8,924) | ||||||
Basic and diluted loss per share on continuing operations | 10 | (1.4p) | (2.4p) | ||||
Basic and diluted loss per share attributable to the owners of the parent | 10 | (1.3p) | (3.2p) | ||||
Total other comprehensive income which may be subsequently recycled to the income statement | |||||||
- Exchange differences on translation of foreign operations | 174 | 332 | |||||
- Actuarial gain/(loss) on pension scheme | 2 | (203) | |||||
- Fair value movement on fuel hedge | - | 50 | |||||
Total other comprehensive (loss)/gain | 176 | 179 | |||||
Total comprehensive loss for the year attributable: | |||||||
- Equity holders of the Company | (9,232) | (7,986) | |||||
- Non-controlling interests | (471) | (759) | |||||
(9,703) | (8,745) | ||||||
The notes form an integral part of these consolidated financial statements.
Consolidated Statement of Financial Position
For the year ended 31 December 2015
31 December 2015 | 31 December 2014 | ||||
Note | £'000 | £'000 | |||
ASSETS | |||||
Non-current assets | |||||
Goodwill | 14 | 985 | 1,046 | ||
Other intangible assets | 15 | 2,368 | 1,987 | ||
Property, plant and equipment | 16 | 2,049 | 2,984 | ||
Other non-current asset | 220 | 221 | |||
Total non-current assets | 5,622 | 6,238 | |||
Current assets | |||||
Inventories | 17 | 3,609 | 4,251 | ||
Trade and other receivables | 18 | 3,202 | 4,962 | ||
Cash and cash equivalents | 9,537 | 4,176 | |||
Total current assets | 16,348 | 13,389 | |||
Total assets | 21,970 | 19,627 | |||
EQUITY AND LIABILITIES | |||||
Equity | |||||
Share capital | 25 | 7,557 | 4,732 | ||
Share premium | 42,016 | 33,189 | |||
Other reserves | 26 | (846) | (562) | ||
Accumulated losses | (37,404) | (27,998) | |||
Equity attributable to holders of the parent | 11,323 | 9,361 | |||
Non-controlling interests | 24 | (422) | 315 | ||
Total equity | 10,901 | 9,676 | |||
Non-current liabilities | |||||
Loans and borrowings | 21 | 293 | 1,301 | ||
Deferred taxation | - | 19 | |||
Retirement benefit obligations | 20 | 342 | 1,406 | ||
Total non-current liabilities | 635 | 2,726 | |||
Current liabilities | |||||
Trade and other payables | 19 | 4,786 | 5,353 | ||
Loans and borrowings | 21 | 761 | 1,554 | ||
Provisions for other liabilities and charges | 29 | 4,887 | 318 | ||
Total current liabilities | 10,434 | 7,225 | |||
Total liabilities | 11,069 | 9,951 | |||
Total equity and liabilities | 21,970 | 19,627 |
The notes form an integral part of these consolidated financial statements. The financial statements were approved by the Board of Directors on 27 April 2016 and were signed on its behalf by:
Mark Kirkland Company number: 7409681
Chief Financial Officer
Consolidated Statement of Changes in Equity
For the year ended 31 December 2015
Year ended 31 December 2015 | Share Capital £'000 | Share Premium £'000 | Other reserves £'000 | Accumulated losses £'000 | Total amounts attributable to equity holders of the parent £'000 | Non-controlling interests £'000 | Total Equity £'000 | |||||
Loss for the year | - | - | - | (9,408) | (9,408) | (471) | (9,879) | |||||
Other comprehensive income: | ||||||||||||
Currency translation differences | - | - | 174 | - | 174 | - | 174 | |||||
Pension actuarial gain | - | - | - | 2 | 2 | - | 2 | |||||
Total comprehensive expense | - | - | 174 | (9,406) | (9,232) | (471) | (9,703) | |||||
Total equity at 1 January 2015 | 4,732 | 33,189 | (562) | (27,998) | 9,361 | 315 | 9,676 | |||||
Shares issued | 2,825 | 8,827 | - | - | 11,652 | - | 11,652 | |||||
Acquisition of minority | - | - | (458) | - | (458) | (266) | (724) | |||||
Total equity at 31 December 2015 | 7,557 | 42,016 | (846) | (37,404) | 11,323 | (422) | 10,901 | |||||
Year ended 31 December 2014 | Share Capital £'000 | Share Premium £'000 | Other reserves £'000 | Accumulated losses £'000 | Total amounts attributable to equity holders of the parent £'000 | Non-controlling interests £'000 | Total Equity £'000 | |||||
Loss for the year | - | - | - | (8,200) | (8,200) | (724) | (8,924) | |||||
Other comprehensive income: | ||||||||||||
Currency translation differences | - | - | 332 | - | 332 | - | 332 | |||||
Pension actuarial loss | - | - | - | (168) | (168) | (35) | (203) | |||||
Cash flow hedges, net of tax | - | - | 50 | - | 50 | - | 50 | |||||
Total comprehensive expense | - | - | 382 | (8,368) | (7,986) | (759) | (8,745) | |||||
Total equity at 1 January 2014 | 631 | 20,441 | (944) | (19,630) | 498 | 1,074 | 1,572 | |||||
Shares issued | 4,101 | 12,748 | - | - | 16,849 | - | 16,849 | |||||
Total equity at 31 December 2014 | 4,732 | 33,189 | (562) | (27,998) | 9,361 | 315 | 9,676 | |||||
Consolidated Cash Flow Statement For the year ended 31 December 2015 | ||||||||||||
Group Year ended 31 December 2015 | Group Year ended 31 December 2014 | |||||||||||
£'000 | £'000 | |||||||||||
Cash flows from operating activities | ||||||||||||
Operating loss (including profit/(loss) from discontinued activities) | (9,643) | (8,543) | ||||||||||
Adjustments for: | ||||||||||||
(Profit)/loss of discontinuing operations | (570) | 2,745 | ||||||||||
Depreciation | 1,132 | 541 | ||||||||||
Amortisation | 161 | 84 | ||||||||||
Profit on disposal of property, plant and equipment | - | 53 | ||||||||||
Write-down of intangibles assets | - | (211) | ||||||||||
Decrease in inventories | 642 | 419 | ||||||||||
Decrease in trade and other receivables | 1,760 | 632 | ||||||||||
(Decrease) in trade and other payables | (567) | (625) | ||||||||||
Increase in provisions | 4,352 | 203 | ||||||||||
Interest received | 8 | 4 | ||||||||||
Interest paid | (244) | (571) | ||||||||||
Tax paid | - | - | ||||||||||
Cash outflow from operations | (2,969) | (5,269) | ||||||||||
Cash flow from investing activities | ||||||||||||
Acquisition of subsidiaries | (856) | - | ||||||||||
Disposal of subsidiaries | - | (735) | ||||||||||
Deferred consideration and escrow releases received in respect of prior year disposals | 570 | - | ||||||||||
Purchase of intangible assets | (745) | (389) | ||||||||||
Purchase of property, plant and equipment | (362) | (388) | ||||||||||
Net cash inflow/(outflow) from investing activities | (1,393) | (1,512) | ||||||||||
Cash flow from financing activities | ||||||||||||
Repayment of borrowings | (793) | - | ||||||||||
Proceeds from bank loans | - | 888 | ||||||||||
Repayment of loan notes | (1,008) | (12,233) | ||||||||||
Issue of shares (net of costs) | 11,652 | 16,849 | ||||||||||
Net cash (outflow)/inflow from financing activities | 9,851 | 5,504 | ||||||||||
Effect of exchange rate on cash and cash equivalents | (128) | (140) | ||||||||||
Net increase/(decrease) in cash and cash equivalents | 5,361 | (1,417) | ||||||||||
Cash and cash equivalents at beginning of year | 4,176 | 5,593 | ||||||||||
Cash and cash equivalents at the end of the year | 9,537 | 4,176 | ||||||||||
The notes form an integral part of these consolidated financial statements.
Notes to Consolidated Financial Statements
1. Reporting entity
MMP is a company incorporated and domiciled in the UK. The address of the registered office is 11 Buckingham Street, London, WC2N 6DF. Marwyn Management Partners plc is a corporate vehicle launched to pursue acquisition led growth strategies. The Company identifies and works alongside management teams with proven sector expertise to seek to deliver capital value through the execution of its 'buy and build' strategies. MMP offers its management teams the kind of support normally available only to much larger companies. The Company is listed on the AiM market of the London Stock Exchange.
2. Accounting policies
(a) Basis of preparation
The consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and the Companies Act 2006, as applied to companies reporting under IFRS. The consolidated financial statements for the year ended 31 December 2015 have been prepared using the measurement basis specified by IFRS for each type of asset, liability, income and expense. The significant accounting policies that have been used in the preparation of these financial statements are summarised below and have been applied consistently for both periods presented other than where new accounting policies have been adopted. The financial statements have been prepared in accordance with IFRS Interpretations Committee (IFRS IC) interpretations
It was decided to sell Metropolitan European Transport plc in November 2013, although the sale was not completed until June 2014. The results for 2014 and 2015 has been presented within Loss from discontinuing operations in the income statement. Further details are provided in note 13.
The Group financial statements have been prepared on a going concern basis under the historical cost convention, as modified by the revaluation of financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss.
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The areas involving a higher degree of judgementor complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in note 2 (c) below in use of estimates and judgments.
(b) Functional and presentation currency
The Group financial statements are presented to the nearest thousand in pounds sterling, which is the Company's functional and the Group's presentation currency.
Transactions in foreign currencies are translated to the respective functional currencies of Group entities at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate at that date. Foreign currency differences arising on retranslation are recognised in profit or loss.
Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Non-monetary items in a foreign currency that are measured in terms of historical cost are translated using the exchange rate at the date of the transaction.
The net investments in overseas subsidiary undertakings are translated from their functional currency into sterling at the rate of exchange ruling at the balance sheet date. The exchange differences arising on the retranslation of opening net assets are taken directly to the translation reserve.
(c) Use of estimates and judgements
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the year in which the estimates are revised and in any future years affected.
Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below.
Share-based payment transactions
The Group measures the cost of cash and equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. Estimating fair value for share-based payment transactions requires determining the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determining the most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield and making assumptions about them.
Impairment of goodwill and other non-current assets
The Group determines whether goodwill and indefinite life intangibles are impaired on an annual basis or more frequently if there are indicators of impairment. Other non-current assets are tested for impairment if there are indicators of impairment. Impairment testing requires an estimate of future cash flows and a suitable discount rate. These calculations require the use of estimates which are inherently judgemental and susceptible to change because they require the Group to make assumptions about future supply and demand, economic and market conditions. The carrying value of the Group's goodwill and intangible assets and sensitivity analysis of the key parameters for the assumptions used are disclosed in notes 14 and 15 respectively.
(d) Basis of consolidation
(i) Subsidiaries
The financial information comprises the financial information of the Group and its subsidiaries as at 31 December 2015. Subsidiaries are entities controlled by the Group. The financial information of subsidiaries is included in the Group's financial statements from the date that control commences until the date that control ceases. The trading results of companies acquired during the year are accounted for under the acquisition method of accounting. All intra-group transactions, balances, income and expenses are eliminated on consolidation. Subsidiaries are entities over which the Group has power to govern the financial and operating policies of the subsidiary. The cost of acquisition is measured as the fair value of assets given, equity instruments issued and liabilities incurred. The identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured at their fair values at the acquisition date, irrespective of the extent of any minority interest. The accounting policies of subsidiaries are changed when necessary to align them with the policies adopted by the Group.
(ii) Non-controlling interests
On an acquisition by acquisition basis, the Group recognises any non-controlling interest in the acquiree either at fair value or at the non-controlling interest's proportionate share of the acquiree's net assets.
The Group treats transactions with non-controlling interests as transactions with equity owners of the Group. For purchases from non-controlling interests, the difference between any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity.
(iii) Goodwill
Goodwill arising on the acquisition of subsidiary undertakings and businesses, representing the excess of the fair value of the consideration given over the fair value of the identifiable assets and liabilities acquired, is capitalised as an intangible asset. At the reporting date, where management's assessment and accounting of the business combination is in the process of being finalised, the carrying amount of the assets, liabilities and goodwill are stated as provisional. The provisional amounts will be finalised within 12 months from the date of acquisition, with appropriate adjustments made to the assets, liabilities and goodwill as prior year adjustments where necessary.
The carrying value of goodwill is tested for impairment at least annually, or more frequently if events or changes in circumstances indicate a potential impairment, by reference to the relevant cash generating unit (CGU) and is carried at cost less accumulated impairment losses. Any impairment is recognised immediately in the consolidated statement of comprehensive income and is not subsequently reversed.
(e) Revenue recognition
Revenue comprises the fair value of the consideration received or receivable for the sale of goods and services in the ordinary course of the Group's activities. Revenue is shown net of value-added tax, and after eliminating sales within
the Group. The Group recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and when specific criteria have been met for each of the Group's activities as described below:
Luxury goods division - Le Chameau SAS
Revenue represents sales to external customers excluding value added tax. Revenue is recognised on despatch of goods to customers.
(f) Exceptional expenses
The Directors regard as exceptional those items which are either material and non-recurring in nature, or are sufficiently material (in themselves or in aggregate) and of a non-operating nature that separate disclosure is necessary for users properly to understand the performance of the Group. Exceptional items therefore include:-
· Costs related to successful business combinations
· Costs related to aborted and ongoing potential business combinations
· Fund raising costs
· Set up costs
These categories form a framework for presentation going forward, and the Directors will continually assess whether other significant items that may arise in the future are exceptional or not. A breakdown of the Group's exceptional expenses is provided in note 5.
In addition, the Directors use certain non GAAP measures to assess business performance. These measures exclude certain items that, whilst not exceptional in nature, do not reflect the underlying performance of the Group's operating businesses and are not recurring in nature. These items include deal sourcing costs and share based payments. An analysis of those items is provided in notes 6 and 7.
(g) Segmental reporting
IFRS8 requires the Group to disclose information about its operating segments and the geographic areas in which it operates. It requires identification of operating segments on the basis of internal reports that are regularly reviewed by the entity's chief operating decision maker in order to allocate resources to the segment and assess its performance. An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group's other components. All operating segments' operating results are reviewed regularly by the Board to make decisions about resources to be allocated to the segment and to assess its performance, and for which discrete financial information is available. Segment results that are reported to the Board include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly head office expenses.
(h) Other intangible assets
Intangible assets purchased separately are capitalised at cost and those with finite lives are amortised on a straight line basis over their useful economic lives. Intangible assets acquired through a business combination are capitalised separately from goodwill at their fair values on initial recognition. After initial recognition intangible assets acquired as part of a business combination are carried at cost less accumulated amortisation, where relevant, and any impairment losses. Methods of amortisation, residual value and useful lives are reviewed and if necessary adjusted at each reporting date. Intangible assets with indefinite useful lives are tested annually for impairment either individually or at the CGU level.
Any charge arising is presented in the consolidated statement of comprehensive income within amortisation of intangible assets. Amortisation is provided on intangibles with finite lives, on a straight line basis over their expected useful life of ten years except as noted below:
· Premium on operating leases: over the term of the lease
· Brands over 20 years
Premium on operating leases represents the premiums paid by the businesses to obtain an operating lease.
(i) Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. Cost comprises the aggregate amount paid and the fair value of any other consideration given to acquire the asset and includes costs directly attributable to making the asset capable of operating as intended.
Depreciationis provided on all property, plant and equipment, on a straight line basis over its expected useful life as follows:
●Freehold land: not depreciated
●Freehold properties: between 2% and 3% per annum
●Short leasehold property: over the term of the lease
●Plant and equipment: between 5% and 33% per annum
●Fixtures and fittings: between 25% and 33% per annum
The carrying values of property, plant and equipment are reviewed for impairment if events or changes in circumstances indicate the carrying value may not be recoverable and are written down immediately to their recoverable amount. Useful lives and residual values are reviewed and adjusted if appropriate at each balance sheet date.
An item of property, plant and equipment is de-recognised upon disposal or when no future economic benefitsare expected to arise from the continued use of the asset. Any gain or loss arising on de-recognition of the asset is included in the consolidated statement of comprehensive income in the year of de-recognition.
(j) Inventories
Inventories in the Transport division are initially recognised at cost on a first in first out basis, and subsequently at the lower of cost and net realisable value. Inventories in the Luxury Goods division are recognised at standard cost of production. Cost comprises all costs of purchase and other costs incurred in bringing the inventories to their present location and condition. Provision is made as necessary for slow moving and defective stock.
(k) Interest payable
Interest payable is charged as it accrues using the effective interest rate basis.
(l) Leases
The Group has entered into lease agreements as the lessee. Leases where the third party lessor retains a significant portion of the risks and benefits of ownership of the asset are classified as operating leases and rentals payable are charged in the consolidated statement of comprehensive income on a straight line basis over the lease term. Benefits received and receivable as an incentive to sign an operating lease are charged in the consolidated income statement on a straight line basis over the lease term. Leases where the Group a significant portion of the risks and benefits of ownership of the asset are classified as finance leases and the assets are capitalised in the accounts and depreciated.
(m) Current and deferred taxation
The tax expense for the year comprises current and deferred tax. Tax is recognised in the income statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively. The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred income tax is recognised, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill; deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. Deferred income tax is provided on temporary differences arising on investments in subsidiaries, except for deferred income tax liability where the timing of the reversal of the temporary difference is controlled by the group and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.
(n) Financial instruments - initial recognition and subsequent measurement
i) Financial assets
Initial recognition and measurement
Financial assets within the scope of IAS 39 are classified as financial assets at fair value through profit or loss, loans and receivables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. The Group determines the classification of its financial assets at initial recognition.
The financial assets which the Group currently holds include cash and cash equivalents and receivables, which are initially recognised at fair value.
Subsequent measurement
The subsequent measurement of financial assets depends on their classification as follows:
Receivables
Receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate method (EIR), less impairment.
Derecognition
A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets)
is derecognised when:
· The rights to receive cash flows from the asset have expired; or
· The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a 'pass-through' arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
Impairment of financial assets
The Group assesses at each reporting date whether there is any objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset (an incurred 'loss event') and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. Evidence of impairment may include indications that the debtors or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation and where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.
(ii) Financial liabilities
Initial recognition and measurement
Financial liabilities within the scope of IAS 39 are classified as financial liabilities at fair value through profit or loss, loans and borrowings, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. The Group determines the classification of its financial liabilities at initial recognition.
The Group's financial liabilities include bank loans, loan notes, derivative instruments issued by the Group, other loans and trade and other payables.
Subsequent measurement
The measurement of financial liabilities depends on their classification as follows:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss.
Loans and borrowings
After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognised in the income statement when the liabilities are derecognised as well as through the effective interest rate method (EIR) amortisation process.
Derivatives financial instruments and hedging activity
Derivatives are recognised at fair value on the date a derivative contract is entered into or acquired and are subsequently re-measured at their fair value. The method of recognising the resulting gain or loss depends on whether the derivative is designed as a hedging instrument, and if so, the nature of the item being hedged.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in the consolidated statement of comprehensive income.
(iii) Share capital
Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity, net of any tax effects.
(o) Employee benefits
The Company and its subsidiaries issue share based payments to certain employees as consideration for services received. These are outlined below:-
Subsidiary level schemes
The Group operates a number of equity settled share based compensation plans within its subsidiaries. Under these schemes, equity instruments in the subsidiaries are issued to the management team as consideration for certain services provided. The fair value of the employee's service is recognised as an expense (within administration expenses) on a straight-line basis over the vesting period, based upon the Group's estimate of the awards which will ultimately vest. The total amount to be expensed is determined by reference to the fair value of the award granted:-
- Including any market performance conditions;
- Excluding the impact of any service and non-market performance vesting conditions; and
- Including the impact of any non-vesting conditions.
The corresponding entry is a credit to equity (Other Reserves) of the Group. The fair value of employees' services is determined in reference to the valuation of the instrument, by using a suitable valuation model. Non-market performance and service conditions are included in assumptions about the number of awards that are expected to vest. The total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. In addition, in some circumstances employees may provide services in advance of the grant date and therefore the grant date fair value is estimated for the purposes of recognising the expense during the period between service commencement period and grant date. At the end of each reporting period, the Group revises its estimates of the number of awards that are expected to vest based on the non-market vesting conditions. It recognises the impact of the revision to original estimates, if any, in the income statement, with a corresponding adjustment to equity.
Once the awards are exercised, the subsidiary will issue new shares and an increase in the non-controlling interest is recognised in the Group financial statements. The amount of the non-controlling interest recognised is calculated by reference to the percentage ownership of the subsidiary as applied to the net assets of the subsidiary. Details of the schemes in operation are shown in note 31 to the financial statements.
Founder Securities
Marwyn Management Partners Subsidiary Limited ('MMPSL'), a Jersey holding company within the Group, operates an equity settled share-based compensation plan. Under this plan, the entity has issued A class ordinary shares for cash and in lieu of services the Group receives from related parties, of which the James Corsellis and Mark Brangstrup Watts are limited partners.
Broadly, when certain performance conditions are met, the B class ordinary shares provide the holder the right to redeem the Founder Securities for an amount equal to 20 percent of the Adjusted Market Capitalisation of the Company (defined as the market capitalisation less the book value of assets held by the Company which the Operator has recommended be returned to shareholders). More details of the scheme are provided in note 31.The award is treated as an equity settled scheme. The cash consideration received for the shares is recognised as a non-controlling interest, and any excess in the fair value of the services received in exchange for the securities, is recognised as an expense.
(p) Pensions
Subsidiaries of the Group operate a defined contribution pension scheme for certain employees. The costs of the pension funding are charged to the consolidated statement of comprehensive income as an expense as they fall due.
In France, employees receive a lump sum payment on retirement in accordance with contractual commitments. The full liability of such an obligation is calculated annually by a specialist local actuary incorporating assumptions including discount factor and future salary increases. All costs in relation to this benefit are included in the consolidated statement of comprehensive income in employee benefit expense, comprising the current service cost and unwinding of the discount. This liability and cost covers the Group's subsidiary, Le Chameau SAS.
(q) Cash and cash equivalents
Cash and cash equivalents in the consolidated statement of financial position comprise cash at bank and in hand.
(r) Assets held for sale
Assets are classified as assets held for sale when their carrying amount is to be recovered principally through a sale transaction and a sale is considered highly probable. They are stated at the lower of carrying amount and fair value less costs to sell.
(s) Changes in accounting policies
The consolidated financial statements are for the year ended 31 December 2015. New standards effective for periods beginning 1 January 2016 are not applicable.
The accounting policies adopted are consistent with those of the previous financial year, except that the Group has adopted the following new and amended IFRS and IFRIC interpretations as of 1 January 2015:
New and amended standards
The following standards, amendments and interpretations endorsed by the EU were effective for the first time for the Group's 31 December 2015 year end and had no material impact on the financial statements:
Annual Improvements to IFRSs (2011 - 2013 Cycle).
These had no material impact on the financial statements disclosure.
Standards and interpretations in issue but not yet effective
The following standards, amendments and interpretations were in issue at the date of approval of these financial statements but were not yet effective for the current accounting year and have not been adopted early. Based on the Group's current circumstances the Directors do not anticipate that their adoption in future periods will have a material impact on the financial statements of the Group.
IFRS 9 Financial Instruments;
IFRS 10 (amended) - Consolidated Financial Statements;
IFRS 11 (amended) - Joint Arrangements;
IFRS 14 Regulatory Deferral Accounts;
IFRS 16 Leases;
IAS 1 (amended) - Presentation of Financial Statements;
IAS 16 (amended) - Property Plant and Equipment;
IAS 19 (amended) - Employee Benefits;
IAS 27 (amended) - Separate Financial Statements;
IAS 28 (amended) - Investments in Associates and Joint Ventures;
IAS 38 (amended) - Intangible Assets;
IAS 41 (amended) - Agriculture;
Annual Improvements to IFRSs (2010 - 2012 Cycle); and
Annual Improvements to IFRSs (2014).
In addition to the above, IFRS 15 Revenue from Contracts with Customers was in issue at the date of approval of these financial statements but was not yet effective for the current accounting year and has not been adopted early.
3. Segment information
The determination of operating segments is based on the business units for which information is reported to the Board. The Group has one reportable segment: Le Chameau. The Chief Operating Decision Maker is Mark Brangstrup Watts, an Executive Director of the Company, who is responsible for determining the business units for which information is reported to the Board of MMP. The Group purchased the Le Chameau business in October 2012 and derives its turnover principally within Europe. The Transport segment previously disclosed is classified as a discontinued activity.
Information regarding the operations of each reportable segment is included in the following tables. Performance is measured based on EBITDA. Segment profit/loss from operations is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries.
Year to 31 December 2015 | Luxury Goods | Central | Discontinued activities | Total |
£'000 | £'000 | £'000 | £'000 | |
Revenue from external customers | 14,398 | - | - | 14,398 |
EBITDA* | (7,971) | (949) | - | (8,931) |
Depreciation and amortisation | (1,293) | - | - | (1,293) |
Profit on disposal | - | - | 570 | 570 |
(Loss)/profit from operations | (9,264) | (949) | 570 | (9,643) |
Net finance (expense)/income | (223) | (13) | - | (236) |
Loss before tax | (9,487) | (962) | 570 | (9,879) |
Taxation | - | - | - | - |
Loss for the year | (9,487) | (962) | 570 | (9,879) |
Total assets | 19,505 | 2,465 | - | 21,970 |
Total assets include: | ||||
- Cash and cash equivalents | 7,179 | 2,358 | - | 9,537 |
Total liabilities | (10,897) | (172) | - | (11,069) |
Year to 31 December 2014 | Luxury Goods | Central | Discontinuing activities | Total |
£'000 | £'000 | £'000 | £'000 | |
Revenue from external customers | 18,442 | - | 10,516 | 28,958 |
EBITDA* | (3,174) | (1,339) | (587) | (5,100) |
Depreciation and amortisation | (625) | - | (705) | (1,330) |
Loss on disposal | - | - | (1,308) | (1,308) |
Loss from operations | (3,799) | (1,339) | (2,600) | (7,738) |
Net finance expense | (96) | (564) | (145) | (805) |
Loss before tax | (3,895) | (1,903) | (2,745) | (8,543) |
Taxation | (381) | - | - | (381) |
Loss for the year | (4,276) | (1,903) | (2,745) | (8,924) |
Total assets | 17,242 | 2,385 | - | 19,627 |
Total assets include: | ||||
- Cash and cash equivalents | 1,977 | 2,199 | - | 4,176 |
Total liabilities | (9,540) | (411) | - | (9,951) |
* A reconciliation of Adjusted EBITDA and EBITDA is set out in note 4 of the Group Financial Statements.
Geographical segments
The UK is the Group's country of domicile. However, following the disposal of the Transport division, the Group generates all of its revenue from Le Chameau, principally from external customers in Europe.
4. EBITDA
Pre-exceptional earnings before interest, tax, depreciation and amortisation ('EBITDA') and adjusted EBITDA comprises:
Year ended 31 December 2015 £'000 | Year ended 31 December 2014 £'000 | ||
Adjusted EBITDA | (5,915) | (4,513) | |
Less: Exceptional expenses | (3,687) | - | |
(9,602) | (4,513) | ||
Less: depreciation and amortisation (non-exceptional) | (847) | (625) | |
Loss from continuing operations before tax | (10,449) | (5,138) | |
Profit/(loss) from discontinuing operations before tax | 570 | (2,745) | |
(9,879) | (7,883) | ||
The Directors believe that the separate recording of the operating exceptional items and non-underlying items provides helpful information about the Group's underlying business performance. Details of exceptional costs are set out in note 5 to the Group financial statements. | |||
5. Exceptional expenses - continuing activities
Year ended 31 December 2015 £'000 | Year ended 31 December 2014 £'000 | ||
Redundancy and other salary costs relating to factory closure | 3,779 | - | |
Long term service provision release in respect of redundancies | (802) | - | |
Additional fixed asset and stock write downs due to factory closure | 523 | - | |
Other closure costs | 187 | - | |
Total continuing operations | 3,687 | - |
The exceptional expenses relate to the closure of the French Le Chameau factory.
6. Expenses by nature
Year ended 31 December 2015 | Year ended 31 December 2014 | ||
£'000 | £'000 | ||
Staff costs (note 7) | 11,305 | 8,490 | |
Rent, rates and utilities | 401 | 425 | |
Depreciation and amortisation | 1,293 | 625 | |
Marketing | 473 | 1,075 | |
Corporate finance and office services fees | 240 | 240 | |
Purchases and packaging | 4,457 | 6,793 | |
Fuel and maintenance costs | 535 | 292 | |
Logistics and travel costs | 2,140 | 1,971 | |
Auditor remuneration (note 9) | 100 | 101 | |
Other costs | 3,667 | 3,655 | |
Total continuing operations | 24,611 | 23,580 |
7. Staff costs
Year ended 31 December 2015 | Year ended 31 December 2014 | ||
£'000 | £'000 | ||
Staff costs (including Directors) comprise: | |||
Wages and salaries | 4,888 | 5,693 | |
Directors' fees | 320 | 320 | |
Social security costs | 2,166 | 2,204 | |
Other pension costs | (259) | 181 | |
Redundancy provision | 3,779 | - | |
Other staff costs | 411 | 92 | |
11,305 | 8,490 |
The average monthly number of employees, including Directors, during the year was as follows:
Year ended 31 December 2015 | Year ended 31 December 2014 | ||
No | No | ||
Management and administrative | 72 | 82 | |
Direct | 241 | 228 | |
313 | 310 | ||
Discontinuing activities - MET | - | 214 | |
313 | 524 |
8. Directors' and key management personnel remuneration
Year ended 31 December 2015 | Year ended 31 December 2014 | ||
Directors: | £'000 | £'000 | |
Salaries | 320 | 320 | |
Pension contributions | 27 | 27 | |
347 | 347 |
The Directors' remuneration was as follows:
Year ended 31 December 2015 | Year ended 31 December 2014 | ||||||||||
Salary £'000 | Pensions £'000 | Benefits £'000 | Share based payment expense £'000 | Total £'000 | Salary £'000 | Pensions £'000 | Benefits £'000 | Share based payment expense £'000 | Total £'000 | ||
Executive | |||||||||||
Mark Kirkland | 225 | 27 | 4 | - | 256 | 225 | 27 | 4 | - | 256 | |
Mark Brangstrup Watts | - | - | - | - | - | - | - | - | - | - | |
James Corsellis | - | - | - | - | - | - | - | - | - | - | |
Benjamin Shaw | - | - | - | - | - | - | - | - | - | - | |
Non-Executive | |||||||||||
Robert Ware | 35 | - | - | - | 35 | 35 | - | - | - | 35 | |
Ian Steer | 30 | - | - | - | 30 | 30 | - | - | - | 30 | |
Stephen East | 30 | - | - | - | 30 | 30 | - | - | - | 30 | |
320 | 27 | 4 | - | 351 | 320 | 27 | 4 | - | 351 | ||
The Board considers the Directors of the Company to be the key management personnel of the Group. The Group has reviewed the structure of how the Le Chameau business is operated and concluded that the overall plan and strategy is set by the MMP Board. Le Chameau operating team members do not attend the MMP Board, and reporting to the MMP Board is by the MMP team, not directly by Le Chameau. All major decisions regarding Le Chameau are taken by the Board, which has a majority of MMP members.
9. Auditors' remuneration
Year ended 31 December 2015 £'000 | Year ended 31 December 2014 £'000 | ||||||
Fees payable to the Company's auditors and its associates for the audit of the parent company and consolidated financial statements | 70 | 69 | |||||
Fees payable to the Company's auditors and its associates for other services: | |||||||
The audit of the Company's subsidiaries pursuant to legislation | 30 | 32 | |||||
100 | 101 | ||||||
10. Loss per Ordinary share | |||||||
Basic and diluted loss per share on continuing operations | Loss £'000 | Weighted average number of shares | Loss per share | ||||
Year ended 31 December 2015 | (9,879) | 706,927,880 | (1.4p) | ||||
Year ended 31 December 2014 | (6,179) | 253,991,687 | (2.4p) | ||||
Basic and diluted loss per share attributable to the owners | |||||||
Year ended 31 December 2015 | (9,408) | 706,927,880 | (1.3p) | ||||
Year ended 31 December 2014 | (8,200) | 253,991,687 | (3.2p) | ||||
The loss per Ordinary share has been calculated using the weighted average number of Ordinary shares of the Company. The warrants which were potentially dilutive expired in January 2014.
11. Taxation
Tax charged to income statement: | Year ended 31 December 2015 | Year ended 31 December 2014 | ||
£'000 | £'000 | |||
Current tax | ||||
- Overseas tax charge for the year | - | 41 | ||
Total current tax | - | 41 | ||
Deferred tax (note 27) | ||||
- Overseas deferred tax | - | 340 | ||
Total deferred tax | - | 340 | ||
Taxation (credit)/charge | - | 381 | ||
Discontinuing operations | - | |||
Total | - | 381 |
Loss on continuing operations before tax | (10,449) | (5,798) | |
Tax calculated at UK standard rate of corporation tax 20.25% (2014: 21.5%) | (2,116) | (1,246) | |
Tax effects of: | |||
- Impact of overseas tax rates | (1,049) | (533) | |
- Unutilised current year expenses carried forward | 3,165 | 1,820 | |
- Write off of deferred tax asset | - | 340 | |
Tax charge | - | 381 |
The main rate of corporation tax reduced from 21% to 20% from April 2015. In 2015, the government announced a reduction in the rate from 20% to 19% for the year beginning 1 April 2017, with a further reduction from 19% to 18% for the year beginning 1 April 2020.
12. Net finance costs
Year ended 31 December 2015 £'000 | Year ended 31 December 2014 £'000 | ||
Interest receivable on bank deposits | 8 | 4 | |
Bank borrowings, overdraft and loan note interest | (244) | (664) | |
(236) | (660) |
13. Profit/(loss) for discontinued operations
The Group sold its investment in Metropolitan European Transport plc, its Transport division, in June 2014. The division was classified as a discontinuing activity held for sale and the investment written down to £nil in 2013.
During the year the Group received deferred consideration and part repayment of a fully provided for loan from the purchasers of MET amounting to £0.2 million. The Group also received £0.4 million released from Escrow in relation to the 2012 sale of Praesepe.
Year to 31 December 2015 £'000 | Year to 31 December 2014 £'000 | |||||
Revenues | - | 10,516 | ||||
Expenses | - | (11,954) | ||||
Loss before tax | - | (1,438) | ||||
Taxation | - | 1 | ||||
Loss after tax | - | (1,437) | ||||
Profit/(loss) on disposal | 570 | (1,308) | ||||
Profit/(loss) for the year | 570 | (2,745) | ||||
Profit/(loss) per Ordinary share - basic and diluted | 0.1p | (1.1p) | ||||
14. Goodwill
2015 | 2014 | ||
£'000 | £'000 | ||
Cost or valuation | |||
At 1 January | 1,046 | 4,964 | |
Derecognised on disposal | - | (3,848) | |
Exchange differences | (61) | (70) | |
At 31 December | 985 | 1,046 | |
Accumulated impairment losses | |||
At 1 January | - | (3,848) | |
Utilised on disposal | - | 3,848 | |
At 31 December | - | - | |
Carrying amount at 31 December | 985 | 1,046 |
Tax deductible goodwill is £nil (2014 £nil)
Impairment review of intangible assets with indefinite useful lives
The Group performs an annual impairment review for goodwill and other intangible assets with indefinite useful lives, by comparing the carrying amount of these assets with the recoverable amount. Testing is carried out by allocating the carrying value of these assets to groups of cash generating units. Prior to the impairment review, the carrying value of the Group's goodwill was £1.0 million (2014: £1.0 million). For impairment testing, the Group recognises only one cash generating unit:
Goodwill | 2015 | 2014 | |||
£'000 | £'000 | ||||
Le Chameau | 985 | 1,046 | |||
985 | 1,046 |
Le Chameau was purchased in 2012 and goodwill was recognised at the date of purchase. The Group considers the carrying value of goodwill to be supported by its value in use calculations, as well as its fair value less costs of sale based on the future value of the business once the 5 year growth plan is complete.
The Group prepares cash flow forecasts based upon the budget for the following years for the single cash generating unit. The budgets used have been approved by management and reflect the past performance of the cash generating unit, adjusted for the forecast cost base and revenue growth.
The key assumptions for the value in use calculations are the discount rate of 10%, an average growth rate of 25% over the next 5 years and EBITDA sales multiple of 8.
Management have identified no reasonable possible change in a key assumption which would give rise to an impairment.
15. Other intangible assets
Technology £'000 | Brands £'000 | Premiums on operating leases £'000 | Total £'000 | |
Cost | ||||
At 1 January 2014 | 297 | 1,951 | 302 | 2,550 |
Additions | 171 | - | - | 171 |
Disposals | - | - | (224) | (224) |
Exchange differences | (63) | (242) | - | (305) |
At 31 December 2014 | 405 | 1,709 | 78 | 2,192 |
Additions | 745 | - | - | 745 |
Disposals | - | - | - | - |
Exchange differences | (65) | (133) | (5) | (203) |
At 31 December 2015 | 1,085 | 1,576 | 73 | 2,734 |
Accumulated amortisation | ||||
At 1 January 2014 | - | 113 | 8 | 121 |
Charge for the year | - | 84 | - | 84 |
At 31 December 2014 | - | 197 | 8 | 205 |
Charge for the year | 61 | 64 | 36 | 161 |
At 31 December 2015 | 61 | 261 | 44 | 366 |
Net book value | ||||
At 31 December 2015 | 1,024 | 1,315 | 29 | 2,368 |
At 31 December 2014 | 405 | 1,512 | 70 | 1,987 |
16. Property, plant and equipment
Land and buildings | Plant and equipment | Fixtures and fittings | Total | |||
£'000 | £'000 | £'000 | £'000 | |||
Cost | ||||||
At 1 January 2014 | 2,280 | 1,338 | 221 | 3,839 | ||
Additions | 31 | 318 | 9 | 358 | ||
Disposals | - | (151) | - | (151) | ||
Exchange differences | (19) | (28) | (5) | (52) | ||
At 1 January 2015 | 2,292 | 1,477 | 225 | 3,994 | ||
Additions | 9 | 120 | 25 | 154 | ||
Disposals | - | (10) | (18) | (28) | ||
Exchange differences | 37 | 62 | 2 | 101 | ||
At 31 December 2015 | 2,338 | 1,649 | 234 | 4,221 | ||
Depreciation | ||||||
At 1 January 2014 | 233 | 204 | 73 | 510 | ||
Depreciation charge for the year | 221 | 253 | 67 | 541 | ||
Disposals | - | (16) | - | (16) | ||
Exchange differences | (10) | (14) | (1) | (25) | ||
At 1 January 2015 | 444 | 427 | 139 | 1,010 | ||
Depreciation charge for the year | 570 | 513 | 49 | 1,132 | ||
Disposals | - | (10) | (16) | (26) | ||
Exchange differences | 10 | 45 | 1 | 56 | ||
At 31 December 2015 | 1,024 | 975 | 173 | 2,172 | ||
Net book value | ||||||
At 31 December 2015 | 1,314 | 674 | 60 | 2,049 | ||
At 31 December 2014 | 2,047 | 1,134 | 148 | 3,329 | ||
17. Inventories
2015 | 2014 | ||
£'000 | £'000 | ||
Finished goods | 2,847 | 3,237 | |
Raw materials and work in progress | 762 | 1,014 | |
3,609 | 4,251 |
Stocks all relate to the Luxury Goods business. During the year an amount of £0.9 million was written off inventory value in respect of old and slow-moving items and recognised as an expense.
18. Trade and other receivables
2015 | 2014 | ||||||||||
£'000 | £'000 | ||||||||||
Trade receivables | 1,157 | 2,919 | |||||||||
Prepayments and accrued income | 404 | 171 | |||||||||
VAT recoverable | 1,400 | 1,602 | |||||||||
Other debtors | 241 | 270 | |||||||||
3,202 | 4,962 | ||||||||||
Not past due | Between 0-6 months past due | Between 7-12 months past due | Over 12 months past due | Total | |||||||
Trade receivables | £'000 | £'000 | £'000 | £'000 | £'000 | ||||||
31 December 2015 | 1,157 | - | - | - | 1,157 | ||||||
31 December 2014 | 2,919 | - | - | - | 2,919 | ||||||
None of the trade receivables are impaired.
19. Trade and other payables
2015 | 2014 | ||
£'000 | £'000 | ||
Trade creditors | 1,940 | 3,207 | |
Accruals | 576 | 548 | |
VAT liability | 195 | 157 | |
Other payables | 2,075 | 1,441 | |
4,786 | 5,353 |
20. Retirement benefit obligations
2015 | 2014 | ||
£'000 | £'000 | ||
Le Chameau SAS | 342 | 1,406 | |
342 | 1,406 |
Le Chameau SAS
In France, employees receive a lump sum payment on retirement in accordance with contractual commitments.
2015 | 2014 | ||||
Reconciliation of actuarial liability - Le Chameau SAS | £'000 | £'000 | |||
Liability at 1 January | 1,406 | 1,171 | |||
Cost of service | (262) | 54 | |||
Financial cost | 65 | 51 | |||
Released on exceptional redundancies due to factory closure | (802) | - | |||
Actuarial (gain)/losses | (2) | 203 | |||
Effects of currency movements | (63) | (73) | |||
Liability at 31 December | 342 | 1,406 | |||
Principal actuarial assumptions at the balance sheet date are as follows:
2015 | 2014 | ||
Discount rate | 2.03% | 1.49% | |
Salary increase | |||
Executives | 2.00% | 2.00% | |
Technical and factory staff | 2.00% | 2.00% |
21. Loans and borrowings
2015 | 2014 | ||
£'000 | £'000 | ||
Bank loans | 761 | 1,554 | |
Loan notes | 293 | 1,301 | |
1,054 | 2,855 |
2015 | 2014 | ||
£'000 | £'000 | ||
Current | 761 | 1,554 | |
Non-current | 293 | 1,301 | |
1,054 | 2,855 |
Loan notes
At the beginning of the year, the Group had in issue £1.3 million of Loan Notes in a subsidiary, Silvercloud Investments Limited. During the year £1.0 million of the notes were purchased by the Group, leaving £0.3 million outstanding at the end of the year.
22. Financial instruments and risk management
The Group's principal financial instruments comprise cash, bank and other loans, and other payables that directly arise for its operations.
The Group has the following categories of financial instruments at year end:
2015 | 2014 | ||
Financial assets | £'000 | £'000 | |
Cash and cash equivalents | 9,537 | 4,176 | |
Trade receivables | 1,157 | 2,919 | |
10,694 | 7,095 |
2015 | 2014 | ||
Financial liabilities | £'000 | £'000 | |
Loans at amortised cost | 1,054 | 2,855 | |
Trade and other payables | 4,786 | 5,353 | |
Provisions | 4,887 | 318 | |
10,727 | 8,526 |
Risk management
The Group has exposure to the following risks from its use of financial instruments:
· Credit risk
· Liquidity risk
· Market risk
· Capital risk
This note presents information about the Group's exposure to each of the above risks, the Group's objectives, policies and processes for measuring and managing risk, and the Group's management of capital. Further quantitative disclosures are included throughout these financial statements.
The Board has overall responsibility for the establishment and oversight of the Group's risk management framework. The Board is responsible for developing and monitoring the Group's risk management policies.
The Group's risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed to reflect changes in market conditions and the Group's activities. The Group, through its management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.
(i) Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations. Credit risk arises from cash and cash equivalents, derivative financial instruments and deposits with banks and financial institutions, as well as credit exposures to customers, including outstanding receivables.
The maximum credit risk exposure of the Group's financial assets at the balance sheet date is as follows:
2015 | 2014 | ||
£'000 | £'000 | ||
Trade and other receivables | 3,202 | 2,919 | |
Cash and cash equivalents | 9,537 | 4,176 | |
12,739 | 7,095 |
Cash
Before placing cash with any bank, the Group gives due consideration to both investment return and credit risk. The Company may place funds on deposit with up to 5 banks and where funds are held in a minimum of two instruments available from sterling denominated money markets with a minimum AA rating though the Board must approve proposed credit limits for placing of deposits with individual financial institutions. At year end the Company had no funds on deposit.
The Board also monitors the counterparty risk of cash held with banks within the Group. At year end the Group had cash held with 9 different counterparties. The largest exposure to one counterparty is £2.0 million held with Barclays Bank plc. The credit quality and credit concentration of cash equivalents is detailed in the table below:Unrated | BBB | AA- | A- | A | Total | |
Cash equivalents | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
2015 | 348 | 125 | 3 | 237 | 8,824 | 9,537 |
2014 | 255 | 96 | 3 | 252 | 3,570 | 4,176 |
The unrated amount includes cash held by invoice factors.
Receivables
The Group's exposure to credit risk is influenced mainly by the individual characteristics of each counterparty. Counterparties are assessed individually for creditworthiness before the Group enters into any business relationship.
Trade and other receivables past due but not impaired are set out in note 18.
(ii) Liquidity risk
Liquidity risk is the risk that the Group is unable to meet its payment obligations associated with its liabilities as they fall due. The Group's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group's reputation. The Group determines its liquidity requirements by the use of cash flow forecasts. On at least an annual basis, the Board reviews and approves the funding requirements of the Group and on an ongoing basis reviews and monitors the requirements.
The contractual maturity of the financial liabilities, representing the gross amount payable under the terms of the contract, at 31 December 2015 is presented below:
On demand | Within one year | Between one and five years | After five years | Total | |||
£'000 | £'000 | £'000 | £'000 | £'000 | |||
Non-derivative financial liabilities | |||||||
Trade and other payables | - | 4,786 | - | - | 4,786 | ||
Loans and other borrowings | - | 761 | - | 293 | 1,054 | ||
Provisions | - | 4,887 | - | - | 4,887 | ||
Total financial liabilities | - | 10,434 | - | 293 | 10,727 |
(iii) Market risk
a. Foreign exchange risk
The Group is exposed to foreign exchange risk, primarily with respect to the Euro. Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities and net investments in foreign operations. Those Group companies operating in foreign denominated currencies maintain local currency bank accounts thereby limiting transaction foreign currency exposure. The Group may hedge foreign exchange exposure through the use of spot and forward exchange contracts.
Sensitivities
With all other factors remaining constant and based on the composition of assets and liabilities at the balance sheet date, the Group's exposure to foreign exchange volatility in the statement of comprehensive income from a 10% movement in Sterling against the Euro would result in a credit/charge of £0.6 million.
Capital management
The Group's primary objectives when managing capital are:
· to safeguard the business as a going concern
· to maintain an efficient capital structure in order to provide a high degree of financial flexibility
· to maximise returns for shareholders
In pursuing its strategy, the Group seeks to maintain a capital structure that is aligned with the needs of its operating subsidiaries. This involves the use of debt to fund acquisitions and capital investment where appropriate. The Group currently considers a mix of debt and equity funding to be the most appropriate form of capital for the Group but keeps this mixture under review and notes the maturity profile of its debt.
The Group capital structure consists of net debt and shareholders' equity. Net debt consists of loans and other borrowings less cash and cash equivalents. Loans and other borrowings are measured at the net proceeds raised and currency-denominated balances are translated to Sterling at the year-end rate. In managing its capital, the Group's primary objective is to ensure its continued ability to provide a consistent return for its equity shareholders through capital growth. Capital at the end of reporting year under review is as follows:
2015 | 2014 | ||
£'000 | £'000 | ||
Net cash | 8,483 | 1,321 | |
Total parents shareholders' equity | 11,323 | 9,361 | |
19,806 | 10,682 |
23. Non-controlling interests
Marwyn Management Partners Subsidiary Limited issued 1,000,000 Ordinary B shares (Founder Securities) of £0.01 each on 24 November 2010 at £0.015 per share to related parties of the Group.
2015 | 2014 | ||
£'000 | £'000 | ||
At 1 January | 315 | 1,074 | |
Purchase of minority | (266) | - | |
Share of losses | (471) | (759) | |
At 31 December | (422) | 315 |
MET issued no additional shares in 2015 and the investment in MET was sold in June 2015.
24. Share capital and reserves
The Company's Ordinary shares have a nominal value of £0.01 each. The number of issued and allotted shares is as follows:
2015 | 2015 | 2014 | 2014 | ||||||
Number | Nominal value | Number | Nominal value | ||||||
Ordinary shares | £ | £ | |||||||
At 1 January | 473,220,658 | 4,732,207 | 63,077,077 | 630,770 | |||||
Issued during the year | 282,460,715 | 2,824,607 | 410,143,581 | 4,101,436 | |||||
At 31 December | 755,681,373 | 7,556,814 | 473,220,658 | 4,732,206 | |||||
Rights of Ordinary shares
The holders of Ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share.
25. Other reserves
Own shares held by EBT £'000 | Share reserve £'000 | Translation reserve £'000 | Fuel hedge reserve £'000 | Purchase of minority £'000 | Total other reserves £'000 | |
At 1 January 2014 | (372) | (190) | (332) | (50) | - | (944) |
Foreign exchange reserve realised on disposal | - | - | 332 | - | - | 332 |
Fuel hedge realised on disposal | - | - | - | 50 | - | 50 |
At 31 December 2014 | (372) | (190) | - | - | - | (562) |
Purchase of minority | - | - | - | - | (458) | (458) |
Foreign exchange reserve arising in year | - | - | 174 | - | - | 174 |
At 31 December 2015 | (372) | (190) | 174 | - | (458) | (846) |
26. Warrants
The Company issued 21,225,000 warrants with a nominal value of £21,225,000. 21,223,500 warrants remained in issue at the beginning of 2014. The warrants expired in January 2014 and were cancelled.
27. Deferred taxation
The analysis of deferred tax assets and liabilities is as follows:
2015 | 2014 | ||||||
£'000 | £'000 | ||||||
Deferred tax assets: | |||||||
- Deferred tax assets/(liabilities) to be recovered after more than 12 months | - | (19) | |||||
- Deferred tax assets/(liabilities) to be recovered within 12 months | - | - | |||||
Deferred tax asset/(liability) (net) | - | (19) | |||||
The gross movement on the deferred tax asset/(liability) is as follows: | |||||||
At 1 January | (19) | 387 | |||||
Exchange and other movements | 19 | (66) | |||||
Income statement charge | - | (340) | |||||
At 31 December | - | (19) | |||||
No deferred tax assets have been recognised as the timing of future recovery is uncertain.
The main rate of UK corporation tax reduced to 20% from April 2015. At the Summer Budget 2015, the government announced a reduction in the rate from 20% to 19% for the year beginning 1 April 2017, with a further reduction from 19% to 18% for the year beginning 1 April 2020.
28. Obligations under operating leases
Operating leases
Subsidiaries have entered into commercial leases on certain property. These leases have durations between one and ten years. Future minimal rentals payable under non-cancellable operating leases are as follows:
2015 | 2014 | ||
Expiry date: | £'000 | £'000 | |
Within one year | 68 | 72 | |
After one year but not more than five years | 65 | 126 | |
133 | 198 |
29. Provisions and contingent liabilities
2015 | 2014 | |||
Provisions: | £'000 | £'000 | ||
At 1 January | 318 | 350 | ||
Charged to the income statement | 4,887 | - | ||
Utilised | (318) | (32) | ||
At 31 December | 4,887 | 318 |
2015 | 2014 | |||
Provisions: | £'000 | £'000 | ||
Current | 4,887 | 318 | ||
Non-current | - | - | ||
4,887 | 318 |
Amounts provided at 31 December 2015 comprise a provision for the redundancy and closure costs of the Le Chameau factory in France. The majority of this comprises the redundancy costs which will be paid in 2016.
Contingent liabilities
In 2011, the Company acquired Baleday Limited. There are a number of claims against Baleday Limited (one of the Agora entities) relating to the acquisition of its assets from the administrators in 2010. In accordance with the terms of the Sale and Purchase Agreement, the Company is indemnified against both these claims and other known claims against the company.
In 2012, the Company sold its gaming division to Gauselmann. Under the Sale and Purchase Agreement, warranties have been given to the purchaser and amounts placed into Escrow to satisfy potential claims. No claims under these warranties have been received and during the year releases to MMP from the Escrows of £0.4 million were made.
Contingent assets
There is currently a dispute between the gaming industry and HMRC on the principle of fiscal neutrality. The basis of the dispute is that some similar forms of gambling were treated differently for VAT purposes and a test case was pursued by Rank plc. Based on this test case, the Group submitted VAT repayment claims in relation to the Group's ownership period of its former subsidiary Praesepe plc. These claims pertain (in the main) to VAT overpaid on amusement machine income. HMRC won the case at The Court of Appeal in 2015 but further cases may be forthcoming. The Group estimates that these claims total more than £12 million including interest but repayment is currently being refused by HMRC.
Until the outcome of future cases is known, the Group will not be in a position to seek the determination of these claims. It is not expected that there will be any resolution to the Group's claims for several years, and it may be delayed further. Should any repayment be made to the Group it will be subject to professional fees and Corporation Tax. Whilst this amount is material in relation to the Group it is by no means certain that anything will be recovered and no contingent asset has been recognised.
30. Share-based payment arrangements
The Founder Securities
The Founder Securities are B ordinary shares in MMPSL. On satisfaction of the performance condition referred to below, the holders of Founder Securities have the right to redeem the Founder Securities for an amount equal to 20 percent of the Adjusted Market Capitalisation of the Company (defined as the market capitalisation less the book value of assets held by the Company which the Operator has recommended be returned to shareholders) as at the date the performance condition is satisfied (subject to such further adjustment as the auditors may approve as a result of any share capital reorganisation).
Broadly, the performance condition will be satisfied when shareholders have received or are deemed to have received an IRR of 10 percent and a minimum return of 125 percent of the gross proceeds from all relevant issues of equity securities. The performance condition is also satisfied on a change of control of the Company or a breach by the Company of the operator agreement.
In the event that the performance condition has not been satisfied by the date falling 10 years from the date of the acquisition, the Company will be able to acquire all of the founder securities for nil consideration.
The Founder Securities are not exchangeable for a fixed number of ordinary equity shares. The number of ordinary shares issued in respect of these instruments is governed by various factors including the share price at the date of conversion. The founder securities are measured at fair value upon recognition.
In the absence of quoted prices in an active market and the absence of observable inputs the Board fair valued the securities based upon a valuation methodology which incorporated the conditions attaching to the instrument and the marketability as at initial recognition. Based upon this method, the amount paid was deemed to be fair value, being the nominal value of the Founder securities of £150,000 in 2011.
Marwyn Management Partners plc
Share options have been granted to a director of the Company at a fixed exercise price of 33.75p. The options are exercisable starting three years from the grant date and are conditional on a growth condition being met:
· the average middle market quotation for the shares for the three months preceding the date of the exercise is equal to or exceeds a 20% increase in the exercise price, and
· the market value on the date of exercise of the shares is equal to or exceeds a 30% increase in the exercise price.
The options were issued on 30 October 2012 and have the following vesting dates:
Vesting date | Number of shares | Exercise price |
30 October 2013 | 428,457 | 33.75p |
30 October 2014 | 428,457 | 33.75p |
30 October 2015 | 428,457 | 33.75p |
The fair value of the options granted during 2012, determined using the Black Scholes valuation model, was 1p per option. The significant inputs into the model were the share price at grant date of 31.0p, the growth condition exercise price of 43.75p, volatility of 20%, an annual risk free rate of 0.31% and an expected option life of three years.
An Employee Benefit Trust was established to hold shares to satisfy any future option exercise and 1,285,373 Ordinary shares were issued to it.
31. Related parties
The Board is responsible for the Company's objective and business strategy and its overall supervision (including the approval of any acquisitions).
During the year, Marwyn Capital LLP charged Silvercloud and its subsidiaries, (subsidiaries of the Group), £240,000 for corporate finance and office services. The members of Marwyn Capital LLP are the Founders.
The Founder Securities in Marwyn Management Partners Subsidiary Limited are owned by Marwyn Capital Growth LP (a limited partnership of which, inter alia, James Corsellis and Mark Brangstrup Watts are limited partners) and Marwyn Management Partners LLP (a limited partnership of which, inter alia, James Corsellis, Mark Brangstrup Watts and Robert Ware are limited partners).
During the year, Directors and key management have purchased goods at the Group's usual prices less a 25%
discount. This discount is available to all staff employed directly by the Group in the UK.
The Company's ultimate controlling party is Marwyn Value Investors LP.
In April 2016, MMP and its subsidiary Marwyn Management Partners Subsidiary Limited ('MMPSL') have entered into a new £4.7 million credit facility with Marwyn Value Investors LP ('MVI'). The Facility has a two year term, is repayable in full at maturity and will be secured by way of a charge over the shares held by MMPSL in Silvercloud Management Holdings plc, a UK domiciled subsidiary of MMP. A commitment fee of 1.5% per annum is payable on undrawn amounts under the Facility. Interest is payable on amounts drawn down under the Facility at 8% per annum.
Independent auditors' report to the members of Marwyn Management Partners plc
Report on the company financial statements
Our opinion
In our opinion Marwyn Management Partners plc's financial statements:
give a true and fair view of the state of the Company's affairs as at 31 December 2015;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
What we have audited
Marwyn Management Partners plc's financial statements comprise:
the Company Balance Sheet as at 31 December 2015; and
the notes to the financial statements, which include a summary of significant accounting policies and other explanatory information.
The financial reporting framework that has been applied in the preparation of the financial statements is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
In applying the financial reporting framework, the directors have made a number of subjective judgements, for example in respect of significant accounting estimates. In making such estimates, they have made assumptions and considered future events.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements.
Other matters on which we are required to report by exception
Adequacy of accounting records and information and explanations received
Under the Companies Act 2006 we are required to report to you if, in our opinion:
we have not received all the information and explanations we require for our audit; or
adequate accounting records have not been kept by the Company, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns.
We have no exceptions to report arising from this responsibility.
Directors' remuneration
Under the Companies Act 2006 we are required to report to you if, in our opinion, certain disclosures of directors' remuneration specified by law are not made. We have no exceptions to report arising from this responsibility.
Responsibilities for the financial statements and the audit
Our responsibilities and those of the Directors
As explained more fully in the Statement of Directors' Responsibilities set out above, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view.
Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standard on Auditing (UK & Ireland) ('ISAs (UK & Ireland)'). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.
This report, including the opinions, has been prepared for and only for the Company's members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.
What an audit of financial statements involves
We conducted our audit in accordance with ISAs (UK & Ireland). An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of:
whether the accounting policies are appropriate to the parent company's circumstances and have been consistently applied and adequately disclosed;
the reasonableness of significant accounting estimates made by the directors; and
the overall presentation of the financial statements.
We primarily focus our work in these areas by assessing the directors' judgements against available evidence, forming our own judgements, and evaluating the disclosures in the financial statements.
We test and examine information, using sampling and other auditing techniques, to the extent we consider necessary to provide a reasonable basis for us to draw conclusions. We obtain evidence through testing the effectiveness of controls, substantive procedures or a combination of both.
In addition, we read all the financial and non-financial information in the Report and Consolidated Financial Statements to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.
Other matter
We have reported separately on the group financial statements of Marwyn Management Partners plc for the year ended 31 December 2015.
Darryl Phillips (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
27April 2016
COMPANY BALANCE SHEET
Company 2015 | Company 2014 | ||||
Note | £'000 | £'000 | |||
Fixed Assets | |||||
Investments in subsidiaries Current assets | 2 | - | - | ||
Trade and other receivables | 3 | 27,433 | 16,652 | ||
Cash and cash equivalents | 22 | 89 | |||
Total current assets | 27,455 | 16,741 | |||
Creditors: Amounts falling due within one year | 4 | (158) | (275) | ||
Net current assets | 27,297 | 16,466 | |||
Total assets less current liabilities | 27,297 | 16,466 | |||
Creditors: Amounts falling due after more than one year | - | - | |||
Net assets | 27,297 | 16,466 | |||
Equity | |||||
Ordinary shares | 5 | 7,557 | 4,732 | ||
Share premium | 5 | 42,015 | 33,189 | ||
Retained earnings | (22,275) | (21,455) | |||
Total shareholders' funds | 27,297 | 16,466 |
The notes form an integral part of the financial information. The Company has elected to take the exemption under section 408 of the Companies Act 2006 not to present the parent company profit and loss account. The loss for the parent company for the year was £0.8 million (2014 loss £1.5 million). The Company has taken advantage of the disclosure exemptions permitted by FRS 101 in relation to presentation of a cash-flow statement. The financial statements were approved by the Board of Directors on 27 April 2016 and were signed on its behalf by:
Mark Kirkland
Chief Financial Officer Marwyn Management Partners plc Company number: 7409681Notes to the Company Financial Statements
1 Accounting policies
(a) Accounting basis
As used in these financial statements and associated notes, the term 'Company' refers to Marwyn Management Partners plc ('MMP'). These separate financial statements of the Company are presented as required by the Companies Act 2006. The financial statements of New UK GAAP Ltd have been prepared in accordance with Financial Reporting Standard 101, 'Reduced Disclosure Framework' (FRS 101). The financial statements have been prepared under the historical cost convention, as modified by the revaluation of derivative financial assets and financial liabilities measured at fair value through profit or loss, and in accordance with the Companies Act 2006. The financial statements are prepared on a going concern basis. The MMP Group consolidated financial statements for the year ended 31 December 2015 contain a consolidated statement of cash flows. The accounting policies have been applied consistently for both years presented, other than where new accounting policies have been adopted.
(b) Investments in subsidiaries
Investments held as fixed assets are stated at cost less any provision for permanent diminution in value. Where the investments are acquired through share for share exchange they are recorded at the fair value of the consideration on the date of acquisition.
(c) Dividends
Dividend distributions are recognised as a liability in the year in which the dividends are approved by the Company's shareholders. Interim dividends are recognised when they are paid and final dividends when they are authorised in general meetings by shareholders.
(d) Cash
Cash includes cash in hand and bank deposits repayable on demand.
Other information
(a) Dividends
No dividend has been recommended by the Board for the year ended 31 December 2015.
(b) Employees
The Company Executive Directors and 2 finance staff were the only employees of the Company during 2015.
(c) Audit fees
The audit fee in respect of the parent company was £60,000 (2014 £60,000). Fees payable to PricewaterhouseCoopers LLP for non-audit services to the company are not required to be disclosed as they are included within note 9 to the Group Financial Statements of MMP.
(d) Directors remuneration.
The remuneration of the Directors is disclosed in the Group Financial Statements of MMP.
(e) Deferred tax
The Company has tax losses carried forward of £4.9 million (2014: £4.4 million). No deferred tax asset has been created in respect of these losses as it is unlikely that they will be utilised in the future.
2. Investments in subsidiaries
Subsidiary undertakings | ||||
2015 | 2014 | |||
£'000 | £'000 | |||
Cost At 1 January | - | - | ||
Impairment | - | - | ||
At 31 December | - | - | ||
The Directors believe that the carrying amount of the investments is supported by their underlying net assets. The investments are of ordinary shares. The investments were written down in 2013 to reflect the MET sales process and the investment in MET was sold during 2014. Subsequent to that investment in subsidiaries has been made via loans.
The undertakings in which the Group has an interest at the year end are as follows:
Company | Country of incorporation | Proportion of ownership interest | Nature of business |
Marwyn Management Partners Subsidiary Limited | Jersey | 100% | Investment holding company |
Silvercloud Management Holdings plc* | England and Wales | 97.3% | Luxury goods holding company |
Silvercloud Investments Limited* | Jersey | 97.3% | Luxury goods holding company |
Le Chameau Holdings Limited* | England and Wales | 97.3% | Luxury goods holding company |
Le Chameau Holdings SAS* | France | 97.3% | Luxury goods holding company |
Le Chameau SAS* | France | 97.3% | Luxury goods manufacturer and seller |
Sté Caoutchoutiere des Zenatas* | Morocco | 97.3% | Luxury goods manufacturer |
Le Chameau SRL* | Italy | 97.3% | Luxury goods seller |
Le Chameau Inc.* | US | 97.3% | Luxury goods seller |
Le Chameau UK Limited* | England and Wales | 97.3% | Luxury goods seller |
*Indirectly owned
3. Trade and other receivables
2015 | 2014 | |||
£'000 | £'000 | |||
Amounts owed by group undertakings | 27,327 | 16,387 | ||
Other debtors | 106 | 265 | ||
27,433 | 16,652 |
4. Creditors: amounts falling due within one year
2015 | 2014 | ||
£'000 | £'000 | ||
Trade creditors | 60 | 105 | |
Accruals and deferred income | 98 | 170 | |
158 | 275 |
5. Ordinary shares
The share capital of the Company comprises Ordinary shares of £0.01 each, the number of issued and allotted shares is as follows:
Ordinary shares | Number | Nominal Value | |||||
£ | |||||||
At 1 January 2015 | 473,220,658 | 4,732,207 | |||||
Issued during the year | 282,460,715 | 2,824,607 | |||||
At 31 December 2015 | 755,681,373 | 7,556,814 |
Rights of Ordinary shares
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share.
6. Reconciliation of movements in shareholders' funds
Ordinary shares £'000 | Share premium £'000 | Retained earnings £'000 | Total shareholders funds £'000 | |
At 1 January 2014 | 631 | 20,441 | (19,935) | 1,137 |
Loss for the financial year | - | - | (1,520) | (1,520) |
Proceeds from shares issued | 4,101 | 12,748 | - | 16,849 |
At 31 December 2014 | 4,732 | 33,189 | (21,455) | 16,466 |
Loss for the financial year | - | - | (820) | (820) |
Proceeds from shares issued | 2,825 | 8,826 | - | 11,651 |
At 31 December 2015 | 7,557 | 42,015 | (22,275) | 27,297 |
7. Transition to FRS 101
This is the first year that the Company has presented financial statements under FRS 101. There are no changes in accounting policies and hence no restatement of prior year figures required. The last financial statements under UK GAAP were for the year ended 31 December 2014 and the date of transition to FRS 101 was therefore 1 January 2015.
Marwyn Management Partners plc published this content on 28 April 2016 and is solely responsible for the information contained herein.
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