Consolidated statement of cash flows for the year ended 31 December 2021

					2021			2020
					£			£
Cash flows from operating activities
Loss for the year						(145,423)		(3,071,304)
Adjustments for
Depreciation and amortisation						2,121,858		1,733,339
Impairment of property, plant and equipment						147,988		91,733
Revaluation of consideration						-		217,540
Taxation						(81,459)		(203,677)
Finance income						(173)		(10)
Finance costs						425,277		227,969
(Gain)/loss on sale of property, plant and equipment						(22,846)		222,096
Pension contributions						(20,000)		(20,000)
AIM listing costs						352,142		-
Increase in provisions						(180,046)		382,722
Share options issued						149,210		68,992
Net foreign exchange gain						(15,575)		(41,378)
						2,730,953		(391,978)
Movements in working capital:
Increase in trade and other receivables						(2,132,041)		(98,740)
(Increase)/decrease in inventories						(2,700,934)		1,511,188
Increase in trade and other payables						1,802,049		3,855,487
Cash (used in)/generated from operations						(299,973)		4,875,957
Income taxes paid						-		114,814
Net cash (used in)/from operating activities						(299,973)		4,990,771
Cash flows from investing activities
Purchases of property, plant and equipment						(1,593,269)		(1,086,264)
Proceeds from disposal of property, plant and equipment						27,008		-
Acquisition of subsidiaries						-		(891,770)
Deferred consideration paid						(1,480,000)		(700,000)
Net cash acquired with subsidiaries						-		136,958
Interest received						173		10
Net cash used in investing activities						(3,046,088)		(2,541,066)
Cash flows from financing activities
Interest paid						(425,277)		(99,585)
Consideration for new shares						10,003,220		-
Costs of share issue and AIM listing						(885,519)		-
Repayment of lease liabilities						(886,625)		(863,841)
Increase in invoice discounting						1,266,279		740,562
Repayment of loans						(99,362)		(24,321)
Net cash from/(used in) financing activities						8,972,716		(247,185)
Net cash increase in cash and cash equivalents						5,626,655		2,202,520
Cash and cash equivalents at the beginning of year						2,820,895		618,375
Cash and cash equivalents at the end of the year						8,447,550		2,820,895

 

 

Cash and cash equivalents at 31 December 2021 of £8,447,550 (2020: £2,820,895) comprised of cash and cash equivalents of £8,447,550 (2020: £2,820,895) less bank overdrafts of £Nil (2020: £Nil).

Notes to the consolidated financial statements for the year ended 31 December 2021

1.   General information

The Company is a public company limited by shares, registered in England and Wales. On 18 August 2021, the Company listed on the AIM Market. The registered company number is 08010067 and the address of the registered office is Unit 4 Radial Park, Solihull Parkway, Birmingham Business Park, Solihull, England, B37 7YN.

The principal activity of the Group is the wholesale distribution of floorcoverings and associated products.

2.   Basis of preparation

These financial statements consolidate those of the Company and its subsidiaries (together referred to as the "Group"). The Parent Company financial statements present information about the Company as a separate entity.

The financial information is presented in pounds sterling, which is the functional currency of the entity and rounded to the nearest £. The financial statements are prepared on the historical cost basis unless otherwise specified within these accounting policies.

Both the Company and consolidated financial statements have been prepared and approved by the Directors in accordance with UK adopted International Accounting Standards. On publishing the Company financial statements here together with the consolidated financial statements, the Company is taking advantage of the exemption in s408 of the Companies Act 2006 not to present its individual income statement and statement of comprehensive income and related notes.

The accounting policies set out below have been applied consistently to all periods presented in these financial statements.

3.   Accounting policies

3.1       Going concern

The consolidated financial statements for the Group have been prepared on a going concern basis.

Whilst the impact of the COVID 19 pandemic was still prevalent at the beginning of 2021, the business continued to benefit from strong trading activity in the home improvement sector. Whilst levels of employee absence remained higher due to the requirement to isolate, the business' operations were able to successfully manage this absence whilst ensuring continuity of service for our customers.

On 18 August 2021, the Company was admitted to trading on the AIM Market, issuing 40,000,000 new shares and raising gross proceeds of £10.0m. An additional £2.0m was also raised in January 2022 as a result of an extended offer to existing shareholders. Listing on AIM provided the Group with further funding with which to continue to invest in the organic growth of the Likewise business whilst also identifying new acquisition targets that would be earnings enhancing to the Group. The Company's admission to AIM also provides further awareness of the brand as well as accessibility to new institutional and private investors alike.

The Group continues to utilise invoice financing arrangements in some subsidiaries and has the option to draw on additional authorised facilities to support working capital requirements. The Group has operated within these facilities throughout the year and continues to do so in 2022. The directors are confident that the Group will be able to operate within the finance facilities available to us.

The Board have also undertaken assessments of going concern by building a cash flow model through to December 2023, based on 2021 actuals, 2022 budget and forecast performance for 2023. These cashflows indicate that the business has adequate resources to continue to operate for the foreseeable future and within the current financing arrangements in place. Furthermore, following the acquisition of Valley Wholesale Carpets (2004) Limited and Delta Carpets (Holdings) Limited and their subsidiaries there are further performance enhancing results not factored into the original cash flow forecasts.

Overall, given the strength of the Group's balance sheet, significant cash reserves on hand, availability of financing arrangements and the strong forecast performance of the Group, this provides the Directors with sufficient assurance on the Group's ability to continue as a going concern, and therefore adopt the going concern basis of accounting in preparing the financial statements.

3.2       Basis of consolidation

Subsidiaries are entities controlled by the Group. Control exists when the Group has the power to govern the financial and operating policies of an investee so as to obtain benefits from its activities, has exposure, or rights, to variable returns and can use its power to affect those returns.  In assessing control, potential voting rights that are currently exercisable are taken into account. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.

3.3       Impact of new international reporting standards

There were a number of narrow scope amendments to existing standards which were effective from 1 January 2021. None of these had an impact on the Group.

Certain new accounting standards, amendments to accounting standards and interpretations have been published that are not mandatory for 31 December 2021 reporting periods and have not been early adopted by the Group. These standards, amendments or interpretations are not expected to have a material impact on the Group in the current or future reporting periods and on foreseeable future transactions.

3.4       Revenue

Revenue comprises sales of goods to customers outside the Group, less an appropriate deduction for discounts, and is stated at the fair value of the consideration net of value added tax and other sales taxes.

Revenue and receivables are recognised when performance obligations are satisfied and the goods are delivered to customers as this is the point in time that the consideration is unconditional, control of goods has passed and only the passage of time is required before the payment is due.

3.5       Finance and income costs

Interest income and expense is recognised using the effective interest method which calculates the amortised cost of a financial asset or liability and allocates the interest income or expense over the relevant period.

3.6       Property, plant and equipment

Property, plant and equipment under the cost model are stated at historical cost less depreciation less any recognised impairment losses. Cost includes expenditure that is directly attributable to the acquisition or construction of these items. Subsequent costs are included in the asset's carrying amount only when it is probable that future economic benefits associated with the item will flow to the company and the costs can be measured reliably. All other costs, including repairs and maintenance costs, are charged to the Income Statement in the period in which they are incurred.

Depreciation is provided on all property, plant and equipment and is calculated as follows:

Freehold property ‑ 2% straight line

Leasehold improvements ‑ straight line over the term of the lease

Plant and machinery ‑ 12.5% ‑ 15% straight line

Motor vehicles ‑ 25% ‑ 33% straight line

Fixtures, fittings and computer equipment ‑ 20% ‑ 33% straight line

Depreciation is provided on cost less residual value. The residual value, depreciation methods and useful lives are annually reassessed.

Each asset's estimated useful life has been assessed with regard to its own physical life limitations and to possible future variations in those assessments. Estimates of remaining useful lives are made on a regular basis for all machinery and equipment, with annual reassessments for major items. Changes in estimates are accounted for prospectively.

The gain or loss arising on disposal or scrapping of an asset is determined as the difference between the sales proceeds, net of selling costs, and the carrying amount of the asset and is recognised in the Income Statement.

3.7       Revaluation of property

Individual freehold properties are carried at current year value at fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are undertaken with sufficient regularity to ensure the carrying amount does not differ materially from that which would be determined using fair value at the Consolidated Statement of Financial Position date.

Fair values are determined from market based evidence normally undertaken by professionally qualified valuers.

Revaluation gains and losses are recognised in the Consolidated Statement of Comprehensive Income unless losses exceed the previously recognised gains or reflect a clear consumption of economic benefits, in which case the excess losses are recognised in the Income Statement.

The difference between depreciation based on the revalued carrying amount of the asset and depreciation based on the asset's original cost is transferred from revaluation surplus to retained earnings at the end of each reporting period. Any remaining revaluation surplus included in equity is transferred directly to retained earnings when the asset is disposed of.

3.8       Impairment of non-financial assets (excluding Goodwill)

At each reporting date, the directors review the carrying amounts of the company's non current assets, to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss, if any. Where the asset does not generate cash flows that are independent from other assets, the directors estimate the recoverable amount of the cash generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset or cash generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash generating unit is reduced to its recoverable amount. The impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata based on the carrying amount of each asset in the unit.

An impairment loss is recognised as an expense immediately.

Where an impairment loss on non financial assets subsequently reverses, the carrying amount of the asset or cash generating unit is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset or cash generating unit in prior periods. A reversal of an impairment loss is recognised in the Income Statement immediately.

3.9       Inventories

Inventory is valued at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.

At each reporting date, inventories are assessed for impairment. If inventories are impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in the Income Statement.

3.10     Cash at bank

Cash at bank comprise cash on hand, deposits held at call with banks and other short term highly liquid investments with original maturities of three months or less from inception.

3.11     Financial instruments

Financial assets and financial liabilities are recognised when the company becomes a party to the contractual provisions of the financial instrument.

Financial assets and financial liabilities are measured initially at fair value plus transactions costs. Financial assets and financial liabilities are measured subsequently as described below.

Cash equivalents comprise short term, highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value. An investment with a maturity of three months or less is normally classified as being short term.

Derivatives, including forward foreign exchange contracts, are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re measured at their fair value. Changes in the fair value of derivatives are recognised in the Income Statement in finance costs or income as appropriate.

3.12     Financial assets

Trade and other receivables are recorded initially at transaction price and subsequently measured at amortised cost. This results in their recognition at nominal value less an allowance for any doubtful debts. This allowance for expected credit losses (ECL) may be established where evidence of credit deterioration is observed. In order to assess credit deterioration, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on its historical experience and informed credit assessment, that includes forward looking information. An additional reserve is established, where required, when a loss is both probable and the amount is known.

ECLs are a probability weighted estimate of lifetime credit losses. Under the ECL model, the Group calculates the allowance for credit losses by considering on a discounted basis the cash shortfalls it would incur in various default scenarios for prescribed future periods and multiplying the shortfalls by the probability of each scenario occurring. The allowance is the sum of these probability weighted outcomes. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the entity in accordance with the contract and the cash flows that Group expects to receive) with a discount factor applied to such overdue amounts. The discount matrix ("ECL Matrix") below is applied to derive an ECL for overdue amounts:

Past due (days)	31-60	61-90	90-120	120-250
Discounts to Amounts Overdue	0%	0%	5%	50%

The Group exercises its discretion in the application of discounts outside of the ECL Matrix based on extenuating circumstances that may apply from time to time to the Group's trade receivables (see note 18). An example of such an extenuating circumstance may occur when it is known that an overdue amount will be collected post a reporting or measurement date.

3.13     Financial liabilities

The Group's financial liabilities include trade and other payables and borrowings.

Interest bearing bank loans and overdrafts are initially recorded at fair value, which equals the proceeds received, net of direct interest costs. They are subsequently held at amortised cost. Finance charges, including premiums payable on settlement or redemption are accounted for using an effective interest rate method and are added to or deducted from the carrying amount of the instrument to the extent that they are not settled in the period in which they arise.

Trade and other payables are recognised initially at fair value and subsequently measured at amortised cost. Generally, this results in their recognition at their nominal value.

3.14     Foreign currency

The presentation currency for the Group's historical financial information is pounds sterling.

Transactions in foreign currencies are recorded using the rate of exchange ruling at the date of the transaction. Any gain or loss on translation of monetary foreign currency assets and liabilities arising from a movement in exchange rates subsequent to initial measurement is included as an exchange gain or loss in the Consolidated Statement of Profit or Loss.

The assets and liabilities of overseas subsidiary undertakings are translated at the closing exchange rate. Income Statements and cash flows of such subsidiaries are translated into Sterling at the average rates of exchange. The adjustments to period end rates are taken to foreign exchange reserve in equity and reported in the Other Comprehensive Income.

3.15     Taxation

Current taxation

Current taxation is based on the local taxable income at the local statutory tax rate enacted or substantively enacted at the reporting date and includes adjustments to tax payable or recoverable in respect of previous periods.                                                                 

Deferred taxation

Deferred taxation is calculated using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the historical financial information. However, if the deferred tax arises from the 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, it is not accounted for. No deferred tax is recognised on initial recognition of goodwill or on investment in subsidiaries. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the year end date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.

Deferred tax liabilities are provided in full, and are not discounted.

Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilised.

Changes in deferred tax assets or liabilities are recognised as a component of tax expense in the Income Statement, except where they relate to items that are charged or credited directly to equity in which case the related deferred tax is also charged or credited directly to equity.

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 tax assets and liabilities relate to income taxes levied by the same taxation authority where there is an intention to settle the balances on a net basis.

3.16     Business combinations

The acquisition method of accounting is used to account for all business combinations, regardless of whether equity instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the:

−      fair values of the assets transferred

−      liabilities incurred to the former owners of the acquired business

−      equity interests issued by the Group

−      fair value of any asset or liability resulting from a contingent consideration arrangement, and

−      fair value of any pre existing equity interest in the subsidiary.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date.

Acquisition related costs are expensed as incurred.

The excess of the consideration transferred and acquisition date fair value of any previous equity interest in the acquired entity over the fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the business acquired, the difference is recognised directly in the Income Statement as a bargain purchase.

Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the entity's incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions.

Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are subsequently remeasured to fair value with changes in fair value recognised in the Income Statement.

If the business combination is achieved in stages, the acquisition date carrying value of the acquirer's previously held equity interest in the acquiree is remeasured to fair value at the acquisition date. Any gains or losses arising from such remeasurement are recognised in the Income Statement.

3.17     Goodwill

Goodwill is initially recognised and measured as set out above.

Goodwill not attributed to a specific intangible asset is not amortised but is reviewed for impairment at least annually. For the purpose of impairment testing, goodwill is allocated to each of the Group's subsidiaries expected to benefit from the synergies of the combination. If the recoverable value of the subsidiary is less than the carrying amount of goodwill, the impairment loss is recognised. An impairment loss recognised for goodwill is not reversed in a subsequent period.

On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.

3.18     Intangible assets

Other intangible assets

Goodwill attributable to the brand name of acquired subsidiaries or customer base is initially recognised and measured as set out above.  Licences are initially recognised at cost.

Amortisation is provided on all other intangible assets and is calculated as follows:

 

		Brand name	15 years straight line
		Customer base	15 years straight line
		Licenses	10 years straight line

 

The useful lives of intangible assets are annually reassessed and all assets are reviewed for impairment at least annually. On disposal of a subsidiary, the attributable amount of intangible assets is included in the determination of the profit or loss on disposal.

3.19     Employment benefits

Provision is made in the financial statements for all employee benefits. Liabilities for wages and salaries, including non monetary benefits and annual leave obliged to be settled within 12 months of the reporting date, are recognised in accruals.

Contributions to defined contribution pension plans are charged to the Income Statement in the year to which the contributions relate.

William Armes Limited, a subsidiary of the Group operates a defined benefit pension plan for certain employees.

The liability recognised in the Consolidated Statement of Financial Position in respect of the defined benefit plan is the present value of the defined benefit obligation at the end of the reporting date less the fair value of plan assets at the reporting date (if any) out of which the obligations are to be settled.

The defined benefit obligation is calculated using the projected unit credit method. Annually the Group engages independent actuaries to calculate the obligation. The present value is determined by discounting the estimated future payments using market yields on high quality corporate bonds that are denominated in sterling and that have terms approximating to the estimated period of the future payments ('discount rate').

Where the calculation results in a benefit to the Group, the asset recognised is limited to the present value of any future refunds from the plan or reductions in future contributions to the plan.

3.20     Leases

The Group assesses whether a contract is or contains a lease, at inception of the contract. The Group recognises a right of use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets. For these leases, the Group recognises the lease payments as an operating expense on a straight line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Group uses its incremental borrowing rate.

The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.

Right of use assets are depreciated over the shorter period of lease term and useful life of the underlying asset.

3.21     Borrowing costs

Borrowing costs are recognised in the Income Statement in the year in which they are incurred.

3.22     Share based payments

The fair value of equity instruments granted to employees is charged to the Statement of Comprehensive Income, with a corresponding increase in equity. The fair value of share options is measured at grant date using the Black Scholes pricing model and spread over the period during which the employee becomes unconditionally entitled to the award. The charge is adjusted to reflect the number of shares or options that vest.

3.23     Invoice discounting

The Group has an invoice discounting arrangement. The amount owed by customers to the Group are included within trade receivables and the amount owed to the invoice discounting company is included within borrowings. The amount owed to the invoice discounting company represents the difference between the amounts advanced by the invoice discounting company and the invoices discounted. The interest element of the invoice discounting charges and other related costs are recognised as they accrue and are included in the Income Statement with other finance costs.

3.24     Segment reporting

An operating segment is a component of an entity that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses related to transactions with other components of the same entity), whose operating results are regularly reviewed by the entity's Chief Operating Decision Maker to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available. The Chief Operating Decision Maker has been identified as the Board of Executive Directors, at which level strategic decisions are made.

Details of the Group's reporting segments are provided in note 5.

3.25     Government grants

Government grants are not recognised until there is reasonable assurance that the Group will comply with the conditions attaching to them and that the grants will be received.

Government grants are recognised in profit or loss on a systematic basis over the periods in which the Group recognises as expenses the related costs for which the grants are intended to compensate.

Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Group with no future related costs are recognised in profit or loss in the period in which they become receivable.

Government grants receivable from central government under the Coronavirus Job Retention Scheme are included within other operating income in the Consolidated Statement of Profit or Loss and are not offset against the related expenses.

3.26     Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

4.   Judgements and key sources of estimation uncertainty

The preparation of the financial statements, in conformity with adopted IFRSs requires management to make judgements, estimates and assumptions that affect the carrying amounts of assets and liabilities at the date of these financial statements and the reported amount of revenues and expenses during the period. These judgements, estimates and assumptions are continually evaluated by management and are based upon historical experiences and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The key assumptions concerning the future and other key sources of estimation uncertainty at the statement of financial position date, that have a risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial period are as follows:

Impairment of trade receivables

Trade and other receivables are recognised at nominal value less an allowance for doubtful debts. This allowance for expected credit losses (ECL) may be established where evidence of credit deterioration is observed. In order to assess credit deterioration, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on its historical experience and informed credit assessment, that includes forward looking information. An additional reserve is established, where required, when a loss is both probable and the amount is known. See notes 3.12 and 18 for further information.

Defined benefit pension scheme

Assumptions for future inflation linked pension increases (where applicable) are based on the appropriate headline index, adjusted where necessary to reflect any caps or collars, bearing in mind the proximity of the future inflation assumption to those caps and collars and the expected variability of future inflation increases. All other assumptions have been set in accordance with the statement of funding principals. No allowances have been made for members transferring benefits out of the scheme in future. The assumptions selected and associated sensitivity analysis are disclosed in note 31.

Inventory valuation

This is provided for on the basis of the age of the items and dependent on the frequency of component use.  The Group makes appropriate provision for slow moving and discontinued inventory items although a significant shift in consumer market or customer demand may result in additional provision. 

Valuation of land and buildings

The Group carries its land and buildings at fair value, with changes in fair value being recognised in Other Comprehensive Income. The Group engaged independent valuation specialists to determine fair value at 31 December 2021.  Significant changes in the commercial property market may impact the valuation of the Group's property.  See note 13 for further information.

5.   Segmental reporting

For the purposes of segmental reporting, the Group's Chief Operating Decision Maker (CODM) is considered to be the Executive Board of Directors. The Board has not identified any separate operating segments within the business. The Board reviews revenue and expenses for the business as a whole and makes decisions about resources and assesses performance based on this information.

Revenue arises entirely through the wholesale of goods. Segmental analysis is therefore not presented.

The Group is not reliant on any one customer and no customer exceeds 10% of total annual turnover.

The following is an analysis of the Group's revenue for the year from continuing operations:

				2021			2020
				£			£
Sale of goods					60,490,559		47,322,673
					60,490,559		47,322,673

The Group generates revenue from both the UK and overseas as detailed below:

 

				2021		2020
				£		£
United Kingdom				60,254,713		46,983,834
Rest of Europe				225,771		338,839
Rest of the world				10,075		-
				60,490,559		47,322,673

6.   Other operating income

				2021		2020
				£		£
Government grants receivable				212,183		852,448
				212,183		852,448

Government grants represent income receivable from central government under the Coronavirus Job Retention Scheme to cover some of the costs of employing certain members of staff placed on furlough leave in response to the COVID 19 pandemic.

7.   Operating profit/(loss)

Operating profit/(loss) is stated after charging:

						2021			2020
						£			£
Underlying expenses
Depreciation of property, plant and equipment					551,124			490,533
Depreciation of right‑of‑use assets					1,283,306			955,378
Gain on foreign exchange					(38,701)			(28,758)
Auditor's remuneration: ‑ audit services					105,000			100,000
‑ work in respect of AIM listing					95,050			-
Short term lease expense: ‑ plant					127,620			112,755
‑ property					150,000			137,500
Amortisation of intangible assets					287,428			287,428
Share based payments					149,210			68,992
AIM listing costs					352,142			-
Acquisition related costs					-			237,185
Restructuring costs					98,253			821,709
Impact of IFRS 16					213,765			339,404
Loss from new operations (Likewise Midlands)					724,474			-

 

Acquisition related costs in the prior year related to the costs of acquisition of A&A Carpets Limited.

8.   Auditors' remuneration

 

				2021	2020
				£	£
Fees payable to the Group's auditors for the audit of the Group's financial statements				105,000	100,000
Fees payable to the Group's auditors:
‑ work in respect of AIM listing ‑ through profit and loss				95,050	-
‑ work in respect of AIM listing ‑ through equity				24,950	-

9.   Directors and employees

 

Group					2021	2020
					£	£
Employee benefit expenses (including Directors) comprise:
Wages and salaries					8,197,734	6,586,038
Social security costs					852,302	639,743
Pension costs					318,167	283,550
Compensation for loss of office					8,361	41,842
Share based payments					149,210	68,992
					9,525,774	7,620,165

 

Key management personnel compensation

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Group, including the Directors of the Company, and other senior management.

				2021	2020
				£	£
Remuneration				731,028	610,976
Social security costs				98,675	77,302
Group pension contribution to defined contribution schemes				61,347	61,347
Share based payments				77,367	17,140
				968,417	766,765

During 2019, key management personnel were granted 1,200,000 options under the Group SAYE scheme at an option price of £0.10 per share and 3,900,000 options under the Group EMI scheme at an option price of £0.10 per share. During 2020, 2,000,000 options were granted to key management personnel under the Group EMI scheme at an option price of £0.10 per share.

During 2021, 85,714 options were granted to key management personnel under the Group SAYE scheme at an option price of £0.21.

Group
The monthly average number of persons, including the Directors, employed by the Group during the year was as follows:
							2021		2020
							No.		No.
Directors							4		4
Other employees							254		229
							258		233
								2021		2020
								£		£
Remuneration of directors
Remuneration								298,732		230,388
Social security costs								40,037		25,922
Group pension contribution to defined contribution schemes								25,600		25,600
Share based payments								14,418		14,418
								378,787		296,328

 

In addition, fees of £83,000 (2020: £Nil) were paid to non‑executive Directors in the year. All executive team members, including the two Directors of Likewise Group Plc, were placed on reduced pay since the start of the COVID‑19 pandemic. This is subject to review by the Remuneration Committee. The highest paid director received remuneration in the year of £145,338 (2020: £146,421) and pension contributions were made of £25,600 (2020: £25,600).
				2021	2020
				No.	No.
Directors accruing benefits under money purchase pension schemes				1	1
				1	1

2,700,000 share options were granted to directors during 2019 at an exercise price of £0.10 per share. There have been no options exercised or additional options granted in either the prior or current year.

10. Finance income and expense

 

Recognised in profit or loss
				2021	2020
				£	£
Interest on:
Bank deposits				4	10
Other interest receivable				169	-
Total finance income				173	10
Finance expense
Bank loan interest payable				84,473	81,299
Interest on lease liabilities				317,913	121,288
Other interest payable				-	13,558
Invoice discounting facility interest payable				22,891	11,824
Total finance expense				425,277	227,969
Net finance expense recognised in profit or loss				(425,104)	(227,959)

 

11. Taxation on ordinary activities

11.1 Income tax recognised in profit or loss

				2021	2020
				£	£
Current tax
Current tax on losses for the year				-	(7,981)
Adjustments in respect of prior years				(313,724)	(106,833)
Total current tax				(313,724)	(114,814)
Deferred tax expense
Origination and reversal of timing differences				232,265	(88,863)
Total deferred tax				232,265	(88,863)
Total tax credit				(81,459)	(203,677)

 

Total tax credit
Total tax credit	(81,459)	(203,677)
	(81,459)	(203,677)

 

The reasons for the difference between the actual tax credit for the year and the standard rate of corporation tax in the United Kingdom applied to losses for the year are as follows:
				2021		2020
				£		£
Loss for the year					(145,423)	(3,071,304)
Income tax credit					(81,459)	(203,677)
Loss before income taxes					(226,882)	(3,274,981)
Tax using the Company's domestic tax rate of 19% (2020:19%)					(43,108)	(622,246)
Fixed asset differences					(80,051)	(2,552)
Expenses not deductible for tax purposes					76,135	101,999
Adjustments to tax charge in respect of prior periods					(313,724)	(106,833)
Non‑taxable consolidation adjustments					(132,366)	66,048
Remeasurement of deferred tax					221,009	7,235
Deferred tax not recognised					208,715	408,279
Other tax adjustments, reliefs and transfers					-	(43,395)
Other differences leading to a decrease in the tax charge					(18,069)	(12,212)
Total tax credit					(81,459)	(203,677)

 

11.2 Deferred tax balances
The following is the analysis of deferred tax liabilities presented in the consolidated statement of financial position:
				2021	2020
				£	£
Deferred tax liabilities				(1,404,650)	(700,484)
				(1,404,650)	(700,484)

 

 

A deferred tax asset of £1,812,747 (2020: £1,682,996) has not been recognised in the financial statements in relation to these losses. In addition, a deferred tax asset of £517,406 has not been recognised in the financial statements in relation to the future tax benefit on the future exercise of employee share options. A deferred tax asset has not been recognised in the year as it is uncertain that the asset will crystallise in the foreseeable future.
				Opening balance		Recognised in profit or loss	Recognised in other comprehensive income	Closing balance
				£		£	£	£
Fixed asset timing differences				218,940		434,964	-	653,904
Arising from business combinations				723,601		156,648	-	880,249
Capital gains				31,045		-	471,901	502,946
Short term timing differences				(15,851)		(3,515)	-	(19,366)
Losses and other deductions				(257,251)		(355,832)	-	(613,083)
				700,484		232,265	471,901	1,404,650

 

				Opening balance		Recognised in profit or loss	Acquisitions/ disposals	Closing balance
				£		`£	£	£
Fixed asset timing differences				159,815		95,691	(36,566)	218,940
Arising on business combinations				732,942		(9,341)	-	723,601
Capital gains				-		31,045	-	31,045
Short term timing differences				(4,580)		(18,087)	6,816	(15,851)
Losses and other deductions				(69,080)		(188,171)	-	(257,251)
				819,097		88,863)	(29,750)	700,484

 

12. Earnings per share

(i) Basic and diluted loss per share

The total basic loss per share attributable to the ordinary equity holders of the Company was £0.001 (2020: loss of £0.020). The total diluted loss per share attributable to the ordinary equity holders of the Company was £0.001 (2020: loss of £0.018).     (ii) Reconciliation of earnings used in calculating earnings per share   Loss attributable to the ordinary equity holders of the Group:   Used in calculating basic and diluted earnings per share (145,423) (3,071,304)   (iii) Weighted average number of shares used as the denominator   2021 2020 Number Number   Weighted average number of ordinary shares used as the denominator in calculating basic earnings per share 167,273,981 152,341,994   Adjustments for calculation of diluted earnings per share:   Options 16,498,538 14,122,729 Warrants 2,800,000 2,800,000 Weighted average number of ordinary shares and potential ordinary shares used as the denominator in calculating diluted earnings per share 186,572,519 169,264,723