78


Finsbury Food Group Annual Report and Accounts 2020


Notes to the Consolidated Financial Statements/Continued


8. Taxation Recognised in the Consolidated Statement of Comprehensive Income


2020 £000


Current tax Current year


Adjustments for prior years Total current tax


Deferred tax Origination and reversal of temporary differences Rate change


Adjustments for prior years Total deferred tax Total tax expense


2019 £000


2,762 6


2,768 130


(222) 85


(7) 2,761


2,969 194


3,163


136 -


(16) 120 3,283


Reconciliation of Effective Tax Rate The weighted average hybrid rate of UK, Polish and French tax is 22.6% (2019: 21.4%). The tax assessed for the period is higher (2019: higher) than the hybrid rate of UK and French tax. The UK corporation tax rate for the period is 19.0% (2019: 19.0 %). The differences are explained below:


2020 £000


Profit before taxation Non-deductible intangible impairment Tax using the UK corporation tax rate of 19.00%, (2019: 19.00%)


Overseas profits charged at different taxation rate Non-deductible expenses and timing differences


Restatement of opening net deferred tax due to rate change and differences in rates R&D uplift current year


Adjustments to tax charge in respect of prior periods Total tax expense


2,868 7,500


10,368 1,970


439 479


(218) -


91 2,761


The UK corporation tax rate reductions from 20% to 19% from 1 April 2017 and 18% from 1 April 2020 were substantively enacted on 26 October 2015. An additional reduction to 17% from 1 April 2020 was substantively enacted on 6 September 2016. This was reversed in March 2020 with the UK corporation tax remaining at 19%. The deferred tax assets and liabilities at 27 June 2020 have been calculated based on a rate of 19%.


The adjustment of £91,000 for prior year includes ineligible capital spends offset and disallowable expenses being different to the assumed levels at the time of preparation of the Annual Report.


The Company has an unrecognised deferred tax asset of £182,000 (2019: £163,000) relating to capital losses carried forward. This asset has not been recognised in the Financial Statements as it is not expected that suitable gains will arise in the future in order to utilise the underlying capital losses.


9. Earnings Per Ordinary Share


Basic earnings per share for the period is calculated on the basis of profit for the year after tax, divided by the weighted average number of shares in issue being 127,128,000 (2019: 127,511,000).


Basic diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares in issue to assume conversion of all potential dilutive ordinary shares. At 27 June 2020, the diluted weighted average number of shares in issue was 130,820,000, (2019: 131,889,000). An adjusted earnings per share has been calculated to show the trading performance of the Group. These adjusted earnings per share exclude:


• Reorganisation and other significant non-recurring items; • IFRS 9 ‘Financial Instruments: Recognition and Measurement’ fair value adjustment relating to the Group’s interest rate swaps and foreign exchange contracts;


• IAS 19 (revised) ‘Accounting for retirement benefits’ relating to net income; • The taxation effect at the appropriate rate on adjustments ; and • Amortisation of intangible assets.


2019 £000


13,576 -


13,576 2,579


481 195


(60) (90)


178 3,283


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