Strategic Report
Te Group’s debt facility with HSBC Bank Plc totals £32.0m, the key features of the facility are as follows:
• Overdraft (£3.0m) • Confidential invoice discounting facility (£15.0m) • Mortgage facility (£4.0m) • Rolling asset finance facility (£2.0m) • Revolving credit facility (£8.0m).
Note 20 gives details of the drawn amounts and maturity dates.
Te Group is able to offer strong asset backing to secure its borrowings. Te Group owns freehold sites at Memory Lane in Cardiff and Lightbody and Campbells in Scotland. In addition, the Group has a strong trade debtor book to support the invoice discounting facility, made up primarily of UK’s major multiple retailers. Tis debtor book stood at £22.4 million (2013: £21.9 million) at the period end date.
Te Group recognises the inherent risk from interest rate rises. To mitigate these risks, the Group has three interest rate swaps in place with a total coverage of £14.0 million (2013: £18.0 million) equivalent to 159% (2013: 250%) of year end net bank at a weighted average rate of 2.5% (2013: 4.0%).
Te effective interest rate for the Group at the year end, taking account of the interest rate swaps in place and deferred consideration with base rate at 0.5% and LIBOR at 0.69%, was 4.27% (2013: 5.97%).
Financial Covenants Te Board reviews the Group’s cash flow forecasts and key covenants on a regular basis to ensure that it has adequate facilities to cover its trading and banking requirements with an appropriate level of headroom. Te forecasts are based on management’s best estimates of future trading. Tere has been no breach of covenants during the year.
Interest cover (based on adjusted EBITDA) for the 52 weeks to 28 June 2014 was 8.6 (2013: 6.3). Net bank debt to EBITDA (based on adjusted EBITDA) for the year to 28 June 2014 was 0.8 (2013: 0.6).
Taxation Te Group taxation charge on continuing operations for the year was £1.7 million (2013: £1.3 million). Tis represents an effective rate of 25.1% (2013: 21.4%). Te current year contains a revaluation of net opening deferred tax asset balances from 23% to 20% amounting to a charge in the year of £197,000. Te effective rate excluding this revaluation would be 22.1%.
Further details on the tax charge can be found in Note 9 to the Group’s Financial Statements.
Environmental Matters Te Group continues to focus on packaging reduction through innovation and has delivered further reductions across the business. Te Group continues to take the key learning and successes from the Cake Category and applying them across other areas of the business to deliver category leading innovative solutions.
Mandatory participation in the CRC Energy Efficiency Scheme (formerly known as the Carbon Reduction Commitment) focuses the Group to reduce its carbon emissions. New production capability, which is in the process of being commissioned in Hamilton, will further reduce the consumption of cardboard and reduce food waste. Work with local universities on shelf life of product will lead to waste reduction of the coming years. We are also presently formulating our Environmental Sustainability Strategy within Cake.
Nicholas & Harris remains a ‘landfill-free’ site and all waste materials are recycled.
18
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78
