Strategic Review
82 Finsbury Food Group Annual Report & Accounts 2018
Notes to the Consolidated Financial Statements
Corporate Governance
Financial Statements
21. Financial Risk Management (continued)
e) Debt and Capital Management The Group’s objective is to maximise the return on net invested capital while maintaining its ongoing ability to operate and guaranteeing adequate returns for shareholders and benefits for other stakeholders, within a sustainable financial structure. An interim dividend for the six months to 30 December 2017 of 1.1p per share was paid on 22 April 2017 to shareholders on the register at the close of business on 3 April 2017. Subject to shareholder approval at the Company’s AGM on 21 November 2018, the final dividend of 2.2p per share will be paid on 21 December 2018 to all shareholders on the register at 23 November 2018. It is the Company’s intention to pay dividends at an affordable rate so that the Company can continue to invest in the business in order to grow profits.
The Group manages its capital by monitoring its gearing ratio on a regular basis, there are also covenant tests which are monitored regularly and presented to the Group’s banks every six months. There have been no breaches of covenant tests during the year and the gearing ratio stands at 0.1 (2016: 0.2). The gearing ratio is calculated taking the total net debt including deferred consideration over net assets.
The Group considers its capital to include share capital, share premium and capital redemption reserve. The Group does not have any externally imposed capital requirements.
22. Capital and Reserves The reconciliation of movement in capital and reserves is shown as a primary statement: Consolidated Statement of Changes in Equity on page 55.
Equity comprises the following:
• Share capital representing the nominal value of equity shares; • Share premium representing the excess of the fair value of consideration received for the equity shares; (net of expenses of the share issue) over nominal value of the equity shares;
• Capital redemption reserve representing the buyback and cancellation of shares at nominal value; • Employee share reserve representing ordinary shares held in an employee benefit trust (EBT) to satisfy awards made to employees; • Retained earnings representing retained profits
23. Share Capital
2018 000’s
In issue at beginning of the financial year Shares issued
In issue at end of the financial year – fully paid
130,383 -
130,383 £000
Allotted, called up and fully paid Ordinary shares of 1p each
2017 000’s
130,383 -
130,383 £000
1,304
1,304
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. Shares are held in an Employee Benefit Trust, which is intended to be used to satisfy awards made to employees (2,704,030 shares were held at the year end). All shares are the same class with equal rights.
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