Brickability Group PLC Annual Report 2020

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FY2020 Annual Report · Brickability Group PLC

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ANNUAL
REPORT
& ACCOUNTS
2020/21

Telephone
0870 143 3332

Email
investors@brickabilitygroupplc.com

Website
www.brickabilitygroupplc.com

Annual Report
& Accounts
for the year ended
31 March 2021

Contents

Strategic Report
Brickability at a Glance

Chairman’s Statement

Chief Executive’s Review

Business Model

The Complete Solution

Group Strategy and Delivery

Key Performance Indicators

Risk Management

Principal Risks and Uncertainties

Section 172(1) Statement

Chief Financial Officer’s Review

Going Concern and Outlook

Corporate and Social Responsibility

Corporate Governance
Board of Directors

Group Management Board

Corporate Governance Statement

Report of the Nomination Committee

Report of the Audit Committee

Report of the Remuneration Committee

Report of the Directors

Statement of Directors’ Responsibilities

Independent Auditor’s Report

Annual Report

& Accounts

for the year ended

31 March 2021

Financial Statements
Consolidated Statement of Profit of Loss and Other Comprehensive Income

Consolidated Balance Sheet

Company Balance Sheet

Consolidated Statement of Changes in Equity

Company Statement of Changes in Equity

Consolidated Statement of Cash Flows

Notes to the Financial Statements

Company Information and Financial Calendar

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I N T R O D U C T I O N 3
INTRODUCTION

Brickability at a Glance…
Brickability at a Glance…

£181.1m (2020: £187.1m)
£181.1m (2020: £187.1m)
Revenue
Revenue

£17.5m (2020: £19.5m)
£17.5m (2020: £19.5m)
Adjusted EBITDA*
Adjusted EBITDA*

£38.0m (2020: £37.7m)
£38.0m (2020: £37.7m)
Gross Profit
Gross Profit
Gross Profit % 21.0% (2020: 20.1%)
Gross Profit % 21.0% (2020: 20.1%)

£7.3m
£7.3m
(2020: £2.3m net cash)
(2020: £2.3m net cash)
Net Debt**
Net Debt**

£11.2m (2020: £12.2m)

Profit Before Tax

4.19p (2020: 4.79p)

EPS

5.56p (2020: 7.27p)

Adjusted EPS***

* Adjusted EBITDA is defined as earnings before interest, tax,

* Adjusted EBITDA is defined as earnings before interest, tax,
depreciation, amortisation, share option expenses, acquisition
costs and exceptional items.

depreciation, amortisation, share option expenses, acquisition
costs and exceptional items.

** Net debt is defined as cash less bank debt.

*** Adjusted EPS is calculated by dividing the adjusted profit
*** Adjusted EPS is calculated by dividing the adjusted profit
for the year by the weighted average number of ordinary
for the year by the weighted average number of ordinary
shares in issue.
shares in issue.

4
4

• Robust recovery following

COVID-19 restrictions.

• Two strategic acquisitions in the year

and a further acquisition post year end.

• Expansion of existing operations,

including investment in new

warehouse facility.

• Continued focus on delivering

stakeholder value in a safe and

sustainable manner.

G P R O D U CTS

• Acquisition pipeline remains strong.

O FI N

Y R O

BRICKABILITY KEY FACTS….

Three Core Divisions

Revenue

Bricks and Building Materials;

15 businesses operating from 27 sites.

by Division

Roofing Services;

3 businesses operating from 2 sites.

Heating, Plumbing and Joinery;

6 businesses operating from 4 sites.

UILDING MATERIA

D B

The Group currently employs in excess

of 325 skilled and experienced personnel.

£12.4

HEATING,

PLUMBING AND

JOINERY

ROOFING

SERVICES

BRICKS AND

BUILDING MATERIALS

Revenue by Division

S T R A T E G I C R E P O R T

The Group distributes, and in many

cases installs, superior quality and

strategically important building

materials from major UK and European

manufacturing partners, providing

product solutions to both private and

commercial specifiers, contractors,

developers and builders.

• Robust recovery following
• Robust recovery following
COVID-19 restrictions.
COVID-19 restrictions.

• Two strategic acquisitions in the year
• Two strategic acquisitions in the year
and a further acquisition post year end.
and a further acquisition post year end.

• Expansion of existing operations,
• Expansion of existing operations,
including investment in new
including investment in new
warehouse facility.
warehouse facility.

• Continued focus on delivering
• Continued focus on delivering
stakeholder value in a safe and
stakeholder value in a safe and
sustainable manner.
sustainable manner.
G P R O D U CTS
G P R O D U CTS
O FI N
O FI N

• Acquisition pipeline remains strong.
• Acquisition pipeline remains strong.

Y R O
Y R O

D
N
A

R
R
E
E
N
N
O
O

D
N
A

BRICKABILITY KEY FACTS….
BRICKABILITY KEY FACTS….
Three Core Divisions
Three Core Divisions
Revenue
Revenue
Bricks and Building Materials;
Bricks and Building Materials;
by Division
by Division
15 businesses operating from 27 sites.
15 businesses operating from 27 sites.
Roofing Services;
Roofing Services;
3 businesses operating from 2 sites.
3 businesses operating from 2 sites.
Heating, Plumbing and Joinery;
Heating, Plumbing and Joinery;
6 businesses operating from 4 sites.
6 businesses operating from 4 sites.
H
H

UILDING MATERIA
UILDING MATERIA

L
S
S

TI
A
A
E

B
B
R
R
C
C
K
K
S
S
A
A
N
N
D B
D B

The Group currently employs in excess
The Group currently employs in excess
of 325 skilled and experienced personnel.
of 325 skilled and experienced personnel.

£12.4
£12.4

m
m
5
5
.
.
4
4
2
2
£
£

£
£

ROOFING
ROOFING
SERVICES
SERVICES

HEATING,
PLUMBING AND
JOINERY

BRICKS AND
BUILDING MATERIALS

Revenue by Division
Revenue by Division

S T R A T E G I C R E P O R T

£11.2m (2020: £12.2m)
£11.2m (2020: £12.2m)
Profit Before Tax
Profit Before Tax
4.19p (2020: 4.79p)
4.19p (2020: 4.79p)
EPS
EPS
5.56p (2020: 7.27p)
5.56p (2020: 7.27p)
Adjusted EPS***
Adjusted EPS***

The Group distributes, and in many
The Group distributes, and in many
cases installs, superior quality and
cases installs, superior quality and
strategically important building
strategically important building
materials from major UK and European
materials from major UK and European
manufacturing partners, providing
manufacturing partners, providing
product solutions to both private and
product solutions to both private and
commercial specifiers, contractors,
commercial specifiers, contractors,
developers and builders.
developers and builders.

Chairman’s Statement
The response of the Group and everybody working within
it since the arrival of the COVID-19 pandemic in March
2020 has been outstanding. I am extremely pleased
of what has been achieved and, considering the very
significant challenges faced, the financial performance
of the Group is one of which we can be very proud.

As government guidelines changed and
our markets opened up, we adapted our
COVID-19 protocols accordingly. As
we stand today, we still have employees
working from home on rota along with
robust social distancing and hand
sanitising procedures in place amongst
other health and safety policies.

The Group has a flexible cost base which
enabled us to cut overheads quickly as
restrictions took hold and, as activity has
become stronger, we have continued to
focus robustly on our costs.

I am, therefore, pleased to confirm for the
year to 31 March 2021 revenue of £181.1
million and an adjusted EBITDA of £17.5
million. Considering the nature of market
conditions during the early months of this
financial year, we are very satisfied with the
Group’s performance.

COVID-19
At the start of the COVID-19 pandemic, we
immediately took actions to comply with
government legislation and guidelines to
protect the health and safety of our employees
and customers. Strict new protocols were
introduced and the vast majority of our
employees worked from home. This in itself
presented several technical challenges and I
am pleased to note that those challenges were
quickly overcome. April 2020 saw significant
reductions in homebuilding and construction
activity before rebounding in May 2020.
In June, sales returned to 83% of June 2019
volumes and in the subsequent months of the
year, performance was broadly at the levels of
the previous year.

John Richards
Chairman

FY2021 has been another strong year for
Brickability Group. In a challenging and uncertain
year for the economy at-large Brickability showed its
ability to adapt quickly and successfully as well as maintain
focus – a real testament to the strength and diversity of the
business, and the management team we have. This is underscored
by the two strategic acquisitions we made during the year.

Post year end the acquisition of Taylor Maxwell further underpinned our
strategic diversification, adding to the Group’s product offering and its ability to
provide timely customer service.

Against this backdrop we believe that the Group is well-positioned to take full advantage
of a robust and improving construction market and the order book is strong. The pipeline
going forward looks encouraging.

Stuart Overend
November proved to be a challenging month in a very unexpected way. The Group’s Chief
Financial Officer, Stuart Overend, passed away very suddenly at the age of 50. Stuart had
made an extremely important contribution to the Group and working with him during
our IPO and subsequent roadshows proved to be an absolute pleasure for Alan Simpson,
our Chief Executive, and I. Stuart was a tremendous colleague and friend and we are
all grateful to have had the opportunity to have known him and worked with him.
Our thoughts continue to be with his wife, Jennifer, and his three children.

Following an extensive executive search, Mike Gant was appointed Chief Financial Officer
in January 2021, initially on an interim basis, with his permanent appointment following in
April 2021. Mike has made a very positive contribution to the Group since joining and we
look forward to working with him in the years ahead.

Acquisitions
The Group’s strategy of bolt-on acquisitions funded by cash generation has continued
during the year. Details of these acquisitions and indeed our ceramic tile start-up business
can be found in the Chief Executive’s report, however, I would like to dwell briefly on the
acquisition of our haulage business, McCann Logistics. This business specialises in the
haulage of construction materials from Continental Europe to the UK. While such an
acquisition is outside of our normal focus, we viewed Brexit as a potential problem for
haulage and customs delays. The management believed the best way around this was to
bring such a business in-house. This has proved to be a strong decision with the haulage
delays experienced by some hardly affecting our Group. The business is performing at such
a strong pace that additional trailers have had to be ordered.

I must also mention the acquisition of Taylor Maxwell which has taken place since the year
end. This transformative deal significantly diversifies the Group’s product offering and
customer base. We now have a strong position in both timber and cladding distribution
and have access to many new customers, particularly in the contractor arena. The brand,
reputation and employees of Taylor Maxwell are very welcome and will no doubt add
significantly to the performance of the Group. Taylor Maxwell’s senior managers will be
represented on the Group’s Management Board.

The pipeline for further acquisitions continues to be strong.

Market
The construction market in general and the homebuilding market, in particular, were areas
that recovered quickly in 2020. This recovery is forecast to continue into 2021 and beyond. The
market is strongly supported by government initiatives including Help to Buy Version 2, the
Affordable Homes Programme and the Housing Accelerator Fund. Forecasts are also positive
for other parts of the construction market with the CPA Winter 2020/21 forecast showing:

• Construction output will rise 14.0% in 2021 and 4.9% in 2022;
• Private housing output will rise by 15.5% in 2021 and 6.0% in 2022;
• Public housing output will rise by 14.8% in 2021 and 10.0% in 2022;
• Private housing (RMI) will rise by 10.1% in 2021 and 3.0% in 2022;
• Public housing (RMI) will rise by 20.6% in 2021 and 2.0% in 2022; and
• Infrastructure output will rise by 32.1% in 2021 and 6.0% in 2022.

Shareholder Returns and Dividends
The Group paid an interim dividend of 0.8678p per share on 25 February 2021. This
was possible due to the recovery from a difficult start to the year, the Group’s rigorous
cost control and our strong cash conversion.

Board and Corporate
Governance
The Board remains committed to the highest
standards of Corporate Governance, not only
at Board level but throughout out Group. The
Group continues to comply in full with the
Quoted Companies Alliance’s Ten Principles
of Corporate Governance. Further details of
the activities of our Board and its Committees
during the year can be found in later sections of
the report.

2020 was unusual in all sorts of ways and the
Group’s Board and Committees had to quickly
adapt to meeting online. This proved successful
and, during the most demanding periods of
lockdown and market changes, meetings were
held on a fortnightly basis.

Sustainability
We take our obligations to protect the
environment seriously and are pleased to
include our Sustainability Report within this
Annual Report.

We are in the process of finalising our ESG
roadmap. This activity will increasingly be core
to all that we do, not least in identifying those
manufacturers with strong ESG credentials and
indeed those potential acquisitions who would
benefit from having them.

A group has been convened to drive our
efforts in this area which will be chaired by me.

Our People
I have already referenced the remarkable
performance, dedication and flexibility
displayed by the Group’s employees. They
have embraced the robust and regularly
changing health and safety protocols, while
helping to drive the business to a speedy
performance recovery. They and their Group
are well placed to take advantage of the
robust house building and construction
market and its encouraging outlook.

Our staff have driven the setting up of the
Brickability Group Foundation which will raise
funds to support charities close to the Group’s
areas of operation. It will have 3 Trustees;
Paul Hamilton and Andrew Wilson, 2 of our
Divisional Managing Directors, and myself.

Following the continued V-shaped recovery in our markets, the successful integration of
acquisitions and the success of our Brexit preparations, our performance enables the
Board to recommend the payment of a final dividend for the year ended 31 March 2021 of
1.0850p per share. Subject to shareholder approval at the Annual General Meeting, the
final dividend will be payable on 23 September 2021, with a record date of 27 August 2021
and an ex-dividend date of 26 August 2021.

John Richards
Chairman

4 August 2021

S T R A T E G I C R E P O R T

Divisional Performance

Bricks and Building Materials

With a turnover of £144.2 million, the Brick division managed to exceed

the full-year turnover of the year ended 31 March 2020 (£144.0 million).

Considering the lost turnover in April, and the much-reduced turnover

in May, this was a remarkable achievement. Our flexible cost base was

demonstrated by a c.£2 million reduction in cost of sales, giving an EBITDA

of £11.7 million versus £11.5 million in the previous year.

Heating, Plumbing and Joinery

Turnover was reduced in the year and stood at £24.5 million against the

previous £26.1 million. EBITDA fell to £5.8 million from the previous £6.2 million,

despite reductions in cost of sales. It was a relatively slow start to the year for

Towelrads which then gathered more sales strength as the year progressed

and indeed continues to do so. Towelrads operated from several warehouse

facilities and, during the year, the Group purchased a 63,000 square foot

warehouse in Southam, Warwickshire, which is ideally located for the business

and provides the scale for future growth. We also added Bathroom Barn to the

business in December to virtually double our scale of valves.

Health and Safety

The health and safety of our staff, suppliers, contractors, customers and

visitors is core to the values of our Group. Having worked with our external

partner, Safety Forward, in the year to 31 March 2020 to re-evaluate all of

our health and safety processes and procedures, along with the training

required to embed them into the business, the arrival of COVID-19 meant

a rapid re-evaluation and implementation of our health and safety

operations and standards.

New office/yard/warehouse/showroom procedures were agreed as were

risk assessments in line with government guidance at every location.

As restrictions began to be lifted, we reacted accordingly, however, we

maintain a high standard of health and safety discipline.

Our new warehouse in Southam, Warwickshire, is now fully operational.

As it moves towards optimum operational capacity, a facility of that scale

has demanded a thorough health and safety review and risk assessments.

It is fully up to speed in its health and safety protocols and we intend it to

be a standard-setter inside and outside of the Group.

A number of window suppliers experienced production/financial issues during

the year restricting our performance in that market. New suppliers have been

Outlook

identified and the right agreements to supply have been put in place.

The outlook for construction including house building is very positive.

Construction output is forecast to rise 14.0% in 2021 and 4.9% in 2022,

while the RIBA Future Trends workload index for May put confidence at

Our Spanish door supplier gradually improved their delivery performance

during the year, while our agreement to sell Deanta Doors fills our need

the highest level since 2009.

to have a mid-range, high volume door supplier. This is already proving

The fundamentals for house building remain strong in both the private

successful with the supplier holding excellent levels of inventory.

and public arenas with both benefitting from government support.

Roofing Services

With the roofing industry appearing to have been particularly hard hit by

COVID-19 driven workplace regulations, roofing turnover fell from £17.1

million to £12.4 million. Despite lower cost of sales which reduced by c.£3.3

Current demand is such that many building materials are on extended

availabilities and while this presents the Group with challenges, the

strength of our supplier relationships and supply chains enables us to

continue to provide reliable product supply.

million, EBITDA was still reduced to £2.6 million, down from £3.7 million in

The Group’s trading in the first quarter of the 2022 financial year was

the previous year. Notwithstanding subsequent improvements in the market,

encouraging and we continue to review and progress a number of

when the market finally began to improve, it was further impacted by supply

problems from manufacturers who had lengthy shutdowns. This shortage

of supply continues into the current year, however, the Group does have the

advantage of its plentiful supply of European-made roof tiles.

acquisition opportunities.

Alan Simpson

Chief Executive Officer

4 August 2021

Alan Simpson
Alan Simpson
Chief Executive Officer
Chief Executive Officer

Chief Executive’s Review
Chief Executive’s Review
The COVID-19 pandemic and the consequent lockdowns
The COVID-19 pandemic and the consequent lockdowns
and restrictions provided the Group with great challenges
and restrictions provided the Group with great challenges
during the year ended 31 March 2021. Despite those
during the year ended 31 March 2021. Despite those
challenges, we were still able to deliver revenues of £181.1
challenges, we were still able to deliver revenues of £181.1
million and EBITDA of £17.5 million. Bearing in mind the
million and EBITDA of £17.5 million. Bearing in mind the
virtual loss of 1.5 months of trading, we are delighted
virtual loss of 1.5 months of trading, we are delighted
with this result. We were also able to deliver against
with this result. We were also able to deliver against
our strategy of bolt-on acquisitions with two businesses
our strategy of bolt-on acquisitions with two businesses
joining the Group, on which I will elaborate later in my
joining the Group, on which I will elaborate later in my
review. Our strategy of supporting start-up businesses
review. Our strategy of supporting start-up businesses
also continued with Forum Tiles joining Alfiam and
also continued with Forum Tiles joining Alfiam and
Architectural Facades. These acquisitions and start-ups
Architectural Facades. These acquisitions and start-ups
became possible due to our strong balance sheet and
became possible due to our strong balance sheet and
cash conversion, and we expect more to come.
cash conversion, and we expect more to come.

Acquisition Strategy
Acquisition Strategy
Two further strategic acquisitions were made during the year. Bathroom Barn, a West Midlands
Two further strategic acquisitions were made during the year. Bathroom Barn, a West Midlands
based supplier of radiator valves, elements and traditional valves was acquired on 30 November
based supplier of radiator valves, elements and traditional valves was acquired on 30 November
2020 and immediately began its integration into the Towelrads business. McCann Limited
2020 and immediately began its integration into the Towelrads business. McCann Limited
(now McCann Logistics) was acquired in early December 2020 as the Group sought to protect
(now McCann Logistics) was acquired in early December 2020 as the Group sought to protect
the significant levels of imported bricks and roof tiles from any potential delays following Brexit.
the significant levels of imported bricks and roof tiles from any potential delays following Brexit.
Established in 1972, McCann specialises in transporting building materials from factories in
Established in 1972, McCann specialises in transporting building materials from factories in
Europe to the UK, with its acquisition giving the Group control in this critical area. McCann’s
Europe to the UK, with its acquisition giving the Group control in this critical area. McCann’s
ability to provide timely continuity of deliveries has been impressive to date.
ability to provide timely continuity of deliveries has been impressive to date.

As outlined in the Chairman’s Statement, the Group has completed the significant acquisition of
As outlined in the Chairman’s Statement, the Group has completed the significant acquisition of
Taylor Maxwell since the year end. The Group has also subsequently acquired Leadcraft Limited,
Taylor Maxwell since the year end. The Group has also subsequently acquired Leadcraft Limited,
which will expand the Group’s Roofing Services division. Leadcraft was founded in 1997 and
which will expand the Group’s Roofing Services division. Leadcraft was founded in 1997 and
provides a full range of roofing services including tiling, slate, zinc, copper, felt and lead works.
provides a full range of roofing services including tiling, slate, zinc, copper, felt and lead works.

Our acquisition pipeline continues to be strong and we are currently processing or evaluating
Our acquisition pipeline continues to be strong and we are currently processing or evaluating
several opportunities. Our demanding criteria, as outlined in last year’s Annual Report and
several opportunities. Our demanding criteria, as outlined in last year’s Annual Report and
Accounts, remains our guide and we have the financial headroom and cash conversion levels to
Accounts, remains our guide and we have the financial headroom and cash conversion levels to
press ahead with those that pass our stringent assessments.
press ahead with those that pass our stringent assessments.

Organic Development
Organic Development
Our cladding business, Architectural Facades, continues to make progress with the addition of
Our cladding business, Architectural Facades, continues to make progress with the addition of
a new showroom in the North West, additional sales staff and some very exciting and profitable
a new showroom in the North West, additional sales staff and some very exciting and profitable
contracts confirmed. Similarly, we are equally excited by the launch of our ceramic tile business,
contracts confirmed. Similarly, we are equally excited by the launch of our ceramic tile business,
Forum Tiles. We have recruited an expert sales team, with significant experience in their industry,
Forum Tiles. We have recruited an expert sales team, with significant experience in their industry,
and have established working relationships with many high-quality suppliers from Italy, Spain,
and have established working relationships with many high-quality suppliers from Italy, Spain,
India and other geographics which look to be extremely beneficial.
India and other geographics which look to be extremely beneficial.

8
8

S T R A T E G I C R E P O R T

Divisional Performance
Divisional Performance
Bricks and Building Materials
Bricks and Building Materials
With a turnover of £144.2 million, the Brick division managed to exceed
With a turnover of £144.2 million, the Brick division managed to exceed
the full-year turnover of the year ended 31 March 2020 (£144.0 million).
the full-year turnover of the year ended 31 March 2020 (£144.0 million).
Considering the lost turnover in April, and the much-reduced turnover
Considering the lost turnover in April, and the much-reduced turnover
in May, this was a remarkable achievement. Our flexible cost base was
in May, this was a remarkable achievement. Our flexible cost base was
demonstrated by a c.£2 million reduction in cost of sales, giving an EBITDA
demonstrated by a c.£2 million reduction in cost of sales, giving an EBITDA
of £11.7 million versus £11.5 million in the previous year.
of £11.7 million versus £11.5 million in the previous year.

Heating, Plumbing and Joinery
Heating, Plumbing and Joinery
Turnover was reduced in the year and stood at £24.5 million against the
Turnover was reduced in the year and stood at £24.5 million against the
previous £26.1 million. EBITDA fell to £5.8 million from the previous £6.2 million,
previous £26.1 million. EBITDA fell to £5.8 million from the previous £6.2 million,
despite reductions in cost of sales. It was a relatively slow start to the year for
despite reductions in cost of sales. It was a relatively slow start to the year for
Towelrads which then gathered more sales strength as the year progressed
Towelrads which then gathered more sales strength as the year progressed
and indeed continues to do so. Towelrads operated from several warehouse
and indeed continues to do so. Towelrads operated from several warehouse
facilities and, during the year, the Group purchased a 63,000 square foot
facilities and, during the year, the Group purchased a 63,000 square foot
warehouse in Southam, Warwickshire, which is ideally located for the business
warehouse in Southam, Warwickshire, which is ideally located for the business
and provides the scale for future growth. We also added Bathroom Barn to the
and provides the scale for future growth. We also added Bathroom Barn to the
business in December to virtually double our scale of valves.
business in December to virtually double our scale of valves.

A number of window suppliers experienced production/financial issues during
A number of window suppliers experienced production/financial issues during
the year restricting our performance in that market. New suppliers have been
the year restricting our performance in that market. New suppliers have been
identified and the right agreements to supply have been put in place.
identified and the right agreements to supply have been put in place.

Our Spanish door supplier gradually improved their delivery performance
Our Spanish door supplier gradually improved their delivery performance
during the year, while our agreement to sell Deanta Doors fills our need
during the year, while our agreement to sell Deanta Doors fills our need
to have a mid-range, high volume door supplier. This is already proving
to have a mid-range, high volume door supplier. This is already proving
successful with the supplier holding excellent levels of inventory.
successful with the supplier holding excellent levels of inventory.

Roofing Services
Roofing Services
With the roofing industry appearing to have been particularly hard hit by
With the roofing industry appearing to have been particularly hard hit by
COVID-19 driven workplace regulations, roofing turnover fell from £17.1
COVID-19 driven workplace regulations, roofing turnover fell from £17.1
million to £12.4 million. Despite lower cost of sales which reduced by c.£3.3
million to £12.4 million. Despite lower cost of sales which reduced by c.£3.3
million, EBITDA was still reduced to £2.6 million, down from £3.7 million in
million, EBITDA was still reduced to £2.6 million, down from £3.7 million in
the previous year. Notwithstanding subsequent improvements in the market,
the previous year. Notwithstanding subsequent improvements in the market,
when the market finally began to improve, it was further impacted by supply
when the market finally began to improve, it was further impacted by supply
problems from manufacturers who had lengthy shutdowns. This shortage
problems from manufacturers who had lengthy shutdowns. This shortage
of supply continues into the current year, however, the Group does have the
of supply continues into the current year, however, the Group does have the
advantage of its plentiful supply of European-made roof tiles.
advantage of its plentiful supply of European-made roof tiles.

Health and Safety
Health and Safety
The health and safety of our staff, suppliers, contractors, customers and
The health and safety of our staff, suppliers, contractors, customers and
visitors is core to the values of our Group. Having worked with our external
visitors is core to the values of our Group. Having worked with our external
partner, Safety Forward, in the year to 31 March 2020 to re-evaluate all of
partner, Safety Forward, in the year to 31 March 2020 to re-evaluate all of
our health and safety processes and procedures, along with the training
our health and safety processes and procedures, along with the training
required to embed them into the business, the arrival of COVID-19 meant
required to embed them into the business, the arrival of COVID-19 meant
a rapid re-evaluation and implementation of our health and safety
a rapid re-evaluation and implementation of our health and safety
operations and standards.
operations and standards.

New office/yard/warehouse/showroom procedures were agreed as were
New office/yard/warehouse/showroom procedures were agreed as were
risk assessments in line with government guidance at every location.
risk assessments in line with government guidance at every location.
As restrictions began to be lifted, we reacted accordingly, however, we
As restrictions began to be lifted, we reacted accordingly, however, we
maintain a high standard of health and safety discipline.
maintain a high standard of health and safety discipline.

Our new warehouse in Southam, Warwickshire, is now fully operational.
Our new warehouse in Southam, Warwickshire, is now fully operational.
As it moves towards optimum operational capacity, a facility of that scale
As it moves towards optimum operational capacity, a facility of that scale
has demanded a thorough health and safety review and risk assessments.
has demanded a thorough health and safety review and risk assessments.
It is fully up to speed in its health and safety protocols and we intend it to
It is fully up to speed in its health and safety protocols and we intend it to
be a standard-setter inside and outside of the Group.
be a standard-setter inside and outside of the Group.

Outlook
Outlook
The outlook for construction including house building is very positive.
The outlook for construction including house building is very positive.
Construction output is forecast to rise 14.0% in 2021 and 4.9% in 2022,
Construction output is forecast to rise 14.0% in 2021 and 4.9% in 2022,
while the RIBA Future Trends workload index for May put confidence at
while the RIBA Future Trends workload index for May put confidence at
the highest level since 2009.
the highest level since 2009.

The fundamentals for house building remain strong in both the private
The fundamentals for house building remain strong in both the private
and public arenas with both benefitting from government support.
and public arenas with both benefitting from government support.

Current demand is such that many building materials are on extended
Current demand is such that many building materials are on extended
availabilities and while this presents the Group with challenges, the
availabilities and while this presents the Group with challenges, the
strength of our supplier relationships and supply chains enables us to
strength of our supplier relationships and supply chains enables us to
continue to provide reliable product supply.
continue to provide reliable product supply.

The Group’s trading in the first quarter of the 2022 financial year was
The Group’s trading in the first quarter of the 2022 financial year was
encouraging and we continue to review and progress a number of
encouraging and we continue to review and progress a number of
acquisition opportunities.
acquisition opportunities.

Alan Simpson
Chief Executive Officer

4 August 2021

S T R A T E G I C R E P O R T

9
9

Our vision is to be the
leading specialist supplier
of products to house
builders and contractors.

Business Model

ROUTES TO MARKET
• Strong regional sales network
The Group has over 30 GB locations serving local,
regional and national customers.
• Established Brands
The Group has developed or acquired businesses that have
built local, regional or national brand strength while being
part of a business with strong buying power.
• National agreements with local delivery
The Group has central agreements with larger customers
which are delivered by the regional businesses.

OUR STRENGTHS
• Regional sales network
• National coverage
• Specialist knowledge
• Technical Expertise
• Access to high quality products and supplies in UK and abroad
• Scale / buying power
• Strong track record
• Integrating acquisitions
• Highly experienced management team
• Unrivalled customer relationships
• Exceptional customer service
• Cross selling

HOW WE CREATE VALUE
FOROUR STAKEHOLDERS?
• For shareholders
Share price growth with a focus on acquisitions.
A progressive dividend policy.

• For customers
Sourcing and supplying products that meet customer needs,
are priced competitively and are delivered on time.

• For suppliers
Suppliers are paid on time and we meet our commitments to the
distribution of products, prices and volumes.

• For employees and local communities
The Group has over 325 employees in GB. We provide growing
employment opportunities in our communities along with
long-term career development. The Brickability Group
Foundation supports charities local to our business locations.

Our Brands

BRICKS AND BUILDING MATERIALS

ROOFING SERVICES

HEATING, PLUMBING AND JOINERY

S T R A T E G I C R E P O R T

The Complete Solution
The Complete Solution
The Group has been formed to pool
The Group has been formed to pool
the combined success of individual
the combined success of individual
businesses into one cohesive structure
businesses into one cohesive structure
that will maximise revenue and growth.
that will maximise revenue and growth.

Together we are stronger and will take advantage of
Together we are stronger and will take advantage of
our individual specialisms to provide a supply hub of
our individual specialisms to provide a supply hub of
extraordinary efficiency and service.
extraordinary efficiency and service.

TRANSPORT
TRANSPORT

McCann Logistics
McCann Logistics

WINDOWS
WINDOWS

Frazer Simpson
Frazer Simpson

ROOFING
ROOFING

Crest Roofing
Crest Roofing
Crown Roofing
Crown Roofing
Excel Roofing
Excel Roofing
McCann Roofing Products
McCann Roofing Products

CLADDING
CLADDING

U Plastics
U Plastics

BRICK SUPPLY & SERVICES

FASCIAS, SOFFITS & GUTTERING

U Plastics

Brickability

Apex Brick Cutters

Matching Brick

Brick Services

CPG Building Supplies

Crest Brick Slate & Tile

The Bespoke Brick Co.

LBT Brick & Facades

Bricklink

Plansure

Brick Mongers Wessex

Alfiam Building Supplies

TOWEL RAILS & RADIATORS

FLOORING SERVICES

Towelrads

Radiators Online

Radiator Valves UK

DSH Flooring

Forum Tiles

EXTERNAL DOORS
EXTERNAL DOORS

Frazer Simpson
Frazer Simpson

INTERNAL DOORS

FSN Doors

UNDERFLOOR HEATING

Towelrads

S T R A T E G I C R E P O R T

12
12

BRICK SUPPLY & SERVICES
BRICK SUPPLY & SERVICES

FASCIAS, SOFFITS & GUTTERING
FASCIAS, SOFFITS & GUTTERING

Brickability
Brickability
Apex Brick Cutters
Apex Brick Cutters
Matching Brick
Matching Brick
The Bespoke Brick Co.
The Bespoke Brick Co.
Bricklink
Bricklink
Brick Mongers Wessex
Brick Mongers Wessex

Brick Services
Brick Services
CPG Building Supplies
CPG Building Supplies
Crest Brick Slate & Tile
Crest Brick Slate & Tile
LBT Brick & Facades
LBT Brick & Facades
Plansure
Plansure
Alfiam Building Supplies
Alfiam Building Supplies

U Plastics
U Plastics

TOWEL RAILS & RADIATORS
TOWEL RAILS & RADIATORS

FLOORING SERVICES
FLOORING SERVICES

Towelrads
Towelrads
Radiators Online
Radiators Online
Radiator Valves UK
Radiator Valves UK

DSH Flooring
DSH Flooring
Forum Tiles
Forum Tiles

INTERNAL DOORS
INTERNAL DOORS

FSN Doors
FSN Doors

UNDERFLOOR HEATING
UNDERFLOOR HEATING

Towelrads
Towelrads

S T R A T E G I C R E P O R T

13
13

Group Strategy
Group Strategy
and Delivery
and Delivery
The Group continues to follow its strategy for
The Group continues to follow its strategy for
growth, which is based around four key areas:
growth, which is based around four key areas:
Organic Growth, Geographic Expansion,
Organic Growth, Geographic Expansion,
Acquisitions and Product Expansion.
Acquisitions and Product Expansion.

Achievements Outlook

KPI’s

Risks

Governance

Organic
Organic
Growth
Growth

Geographical
Geographical
Expansion
Expansion

Acquisitions

Fast recovery
Fast recovery
from
from
COVID-19
COVID-19
market
market
restrictions.
restrictions.
Recruitment
Recruitment
of additional
of additional
sales team
sales team
members in
members in
all divisions.
all divisions.

New locations
New locations
have joined
have joined
the Group via
the Group via
acquisitions.
acquisitions.
U Plastics
U Plastics
have opened
have opened
a new
a new
depot in
depot in
Maidenhead.
Maidenhead.

2 acquisitions
2 acquisitions
during the
during the
year.
year.

Product
Product
Expansion
Expansion

Acquisitions
Acquisitions
have
have
expanded
expanded
the product
the product
portfolio as
portfolio as
has the Forum
has the Forum
Ceramics tile
Ceramics tile
start-up.
start-up.

- Continued
- Continued
cross selling
cross selling

- Growth with
- Growth with
additional
additional
customers
customers

- Revenue

- Cost of sales

- Gross profit

- EBITDA

- Economic
- Economic
environment
environment

- Extreme
- Extreme
Weather
Weather

- Major event

The Divisional
The Divisional
Managing
Managing
Directors
Directors
monitor
monitor
performance
performance
and take any
and take any
necessary
necessary
action.
action.
Divisional
Divisional
performance
performance
is reported to
is reported to
the Board.
the Board.

- Revenue

- Gross Profit

- EBITDA
- EBITDA
at new
at new
locations
locations

- Economic
- Economic
environment
environment

- Limited
- Limited
acquisitions
acquisitions

The Board
The Board
reviews
reviews
acquisition /
acquisition /
expansion
expansion
plans.
plans.

- Access
- Access
to new
to new
customers
customers

Further
Further
geographic
geographic
expansion is
expansion is
planned
planned
with existing
with existing
product
product
range.
range.

Further
Further
acquisitions
acquisitions
in pipeline
in pipeline
to expand
to expand
product
product
offering and
offering and
customer
customer
base.
base.

- Revenue

- Gross Profit

- EBITDA

- Past
- Past
acquisition
acquisition
audit
audit

- Failure to
- Failure to
integrate
integrate
acquisition.
acquisition.

- Retention of
- Retention of
talent
talent

The Board
The Board
reviews
reviews
acquisition
acquisition
strategy and
strategy and
plans.
plans.

Further
Further
acquisitions
acquisitions
and start ups
and start ups
are planned.
are planned.

- Revenue

- Gross Profit

- EBITDA

- 5 year start
- 5 year start
up plans
up plans

- Loss of a
- Loss of a
major
major
supplier
supplier

- Loss of key
- Loss of key
management
management

The Board
The Board
reviews
reviews
and approves
and approves
start-ups.
start-ups.

Case Study

Belle Vue / Bartrams

The Bespoke Brick Co., one of the Group’s

specialist brick importers and distributors, were

asked to work with Morris & Co Architects on a

beautiful scheme for Pegasus Life which consisted of

60 luxury apartments with landscaped courts and gardens

for over 60s in Hampstead, London. The concept featured a very

complex façade design, including steel framing systems which backed onto

hand-laid brick work in feature bonds. An intricate mechanically fixed brick

slip rain screen was created with pre cast panelling, pre cast sills and banding,

loggia balconies, composite punch windows and stick curtain walling.

The brief was to suggest a brick which could be produced in two different tones to create subtle

colour differences which highlighted some of the interesting features within the façade.

We opted to work with Floren, one of our

which displayed 90% slurry was used on the

production partners in Belgium, who adopt a

interesting, angled window recesses as well as

customised approach to brick making.

the shark fin detail which explored textures in

The architect favoured a more rustic

some areas of the scheme.

appearance in the brick to contrast some of

the very modular and sharp design within

the façades. We took a tumbled red brick

with some black engobe to create a historic

weathered effect. We then added 60%

calcium slurry to one type and 90% slurry

to another. This gave us two products with

very subtle differences. The lighter brick

Galostar were the appointed contractor and

IG lintels were the chosen pre cast manufacturer.

This was a challenging but rewarding scheme

which has received much acclaim. It was

shortlisted for the RIBA regional award 2020

for North London.

14
14

S T R A T E G I C R E P O R T

Case Study
Case Study
Belle Vue / Bartrams
Belle Vue / Bartrams
The Bespoke Brick Co., one of the Group’s
The Bespoke Brick Co., one of the Group’s
specialist brick importers and distributors, were
specialist brick importers and distributors, were
asked to work with Morris & Co Architects on a
asked to work with Morris & Co Architects on a
beautiful scheme for Pegasus Life which consisted of
beautiful scheme for Pegasus Life which consisted of
60 luxury apartments with landscaped courts and gardens
60 luxury apartments with landscaped courts and gardens
for over 60s in Hampstead, London. The concept featured a very
for over 60s in Hampstead, London. The concept featured a very
complex façade design, including steel framing systems which backed onto
complex façade design, including steel framing systems which backed onto
hand-laid brick work in feature bonds. An intricate mechanically fixed brick
hand-laid brick work in feature bonds. An intricate mechanically fixed brick
slip rain screen was created with pre cast panelling, pre cast sills and banding,
slip rain screen was created with pre cast panelling, pre cast sills and banding,
loggia balconies, composite punch windows and stick curtain walling.
loggia balconies, composite punch windows and stick curtain walling.

The brief was to suggest a brick which could be produced in two different tones to create subtle
The brief was to suggest a brick which could be produced in two different tones to create subtle
colour differences which highlighted some of the interesting features within the façade.
colour differences which highlighted some of the interesting features within the façade.

We opted to work with Floren, one of our
We opted to work with Floren, one of our
production partners in Belgium, who adopt a
production partners in Belgium, who adopt a
customised approach to brick making.
customised approach to brick making.
The architect favoured a more rustic
The architect favoured a more rustic
appearance in the brick to contrast some of
appearance in the brick to contrast some of
the very modular and sharp design within
the very modular and sharp design within
the façades. We took a tumbled red brick
the façades. We took a tumbled red brick
with some black engobe to create a historic
with some black engobe to create a historic
weathered effect. We then added 60%
weathered effect. We then added 60%
calcium slurry to one type and 90% slurry
calcium slurry to one type and 90% slurry
to another. This gave us two products with
to another. This gave us two products with
very subtle differences. The lighter brick
very subtle differences. The lighter brick

which displayed 90% slurry was used on the
which displayed 90% slurry was used on the
interesting, angled window recesses as well as
interesting, angled window recesses as well as
the shark fin detail which explored textures in
the shark fin detail which explored textures in
some areas of the scheme.
some areas of the scheme.

Galostar were the appointed contractor and
Galostar were the appointed contractor and
IG lintels were the chosen pre cast manufacturer.
IG lintels were the chosen pre cast manufacturer.

This was a challenging but rewarding scheme
This was a challenging but rewarding scheme
which has received much acclaim. It was
which has received much acclaim. It was
shortlisted for the RIBA regional award 2020
shortlisted for the RIBA regional award 2020
for North London.
for North London.

S T R A T E G I C R E P O R T

15
15

Key Performance
Key Performance
Indicators
Indicators

REVENUE
REVENUE

£181.1m
£181.1m

Revenue growth is a key driver of profit growth.

GROSS PROFIT
GROSS PROFIT

£38.0m
£38.0m

Gross Profit percentage acts as a cross check
Gross Profit percentage acts as a cross check
against Revenue growth to ensure new sales
against Revenue growth to ensure new sales
maintain margin.
maintain margin.

ADJUSTED EBITDA
ADJUSTED EBITDA

£17.5m
£17.5m

Earnings before Interest, Tax, Depreciation
Earnings before Interest, Tax, Depreciation
and Amortisation, share option expenses,
and Amortisation, share option expenses,
acquisition costs and exceptional items.
acquisition costs and exceptional items.

CASH GENERATED
CASH GENERATED
FROM OPERATIONS
FROM OPERATIONS

NET DEBT
NET DEBT

£13.1m
£13.1m
£7.3mThe net cash position after deducting the
£7.3mThe net cash position after deducting the

cash held from the amount of bank debt.

DIVIDEND
DIVIDEND

1.95p
1.95p

Annual dividend per share

The presented figures illustrate a

number of the key performance

indicators that the Group reviews on

a regular basis and by which overall

business performance is measured.

19/20

20/21

19/20
19/20
2018
2018

20/21
20/21
2019
2019

19/20

20/21

19/20

20/21

£187.1m

£181.1m

£37.7m (20.1%)

£38.0m (21.0%)

£19.5m

£17.5m

£20.9m

£13.1m

20/21

£7.3m Net debt

19/20

£2.3m Net cash

19/20

20/21

1.95p

16
16

S T R A T E G I C R E P O R T

The presented figures illustrate a
The presented figures illustrate a
number of the key performance
number of the key performance
indicators that the Group reviews on
indicators that the Group reviews on
a regular basis and by which overall
a regular basis and by which overall
business performance is measured.
business performance is measured.

S T R A T E G I C R E P O R T

17
17

Risk
management

MANAGING RISK
IN ORDER TO DELIVER
OUR STRATEGY
The Group is exposed to a number
of risks in the markets it serves.
The Board considers the risks to
the business and the adequacy of
internal controls with regard to the
risks identified at every scheduled
Board meeting. It formally reviews
and updates the risk register of the
business at least annually.

RISK MANAGEMENT STRUCTURE

01 02

IDENTIFY RISK

ASSESS RISK

The Board has overall responsibility
for monitoring the Group’s systems
of internal control, for identification
of risks and for taking appropriate
action to prevent, mitigate or
manage those risks. The Board
will continually assess and review
the business and operating
environment to identify any new
risks to be managed.

A detailed schedule of risks is
considered at each scheduled
Board meeting under the
following categories: Competitors,
Economic environment, Financial
Risk, People and Suppliers. These
risks are graded against the
criteria of likelihood and potential
impact in order to identify the key
risks impacting the Group (see
page 19).

05
Review and
evaluate
risks

01
Identify
risk

Board
of Directors

02
Assess
risk

04
Update
risk register

03
Mitigate
risk

Remuneration
Committee

Audit
Committee

Nomination
Committee

Group Management Board and
Subsidiary company boards

Divisional and
functional teams

03 04 05

UPDATE RISK REGISTER

MITIGATE RISK

REVIEW & EVALUATE RISKS

The Board seeks to ensure that
the Group’s activities do not
expose it to significant risk.
The Group’s aim is to diversify
sufficiently to ensure it is not
exposed to risk of concentration
in product, market or channel.

The risk register is updated
as appropriate at scheduled
Board meetings and in-between
as necessary.

The Board and Group Management
Board are all responsible for reviewing
and evaluating risk. The Group
Management Board meet at least
monthly to review ongoing trading
performance, discuss budgets and
forecasts and consider new risks
associated with ongoing trading.
Feedback from these meetings regarding
changes to existing risks or the emergence
of new risks is then provided to the Board.

SEVERE

T
C
A
P
M

MINOR

RISK HEAT MAP
The risk heat map summarises the potential impact of a range of
risks and uncertainties identified by the management team. They are
logged on the ‘Risk Matrix’ and reported on and reviewed regularly.

Competitors
This includes:
• Margin management
• Environmental and
social responsibility

Economic environment
This includes:
• Ongoing COVID-19 impact
• Extreme weather events
• Product supply shortages

LOW

LIKELIHOOD

HIGH

Financial risk
This includes:
• Margin management
• Change in employment status
of Group subcontractors
• Failure to integrate key
acquisitions
• Cyber security

People
This includes:
• Retention of talent
• Failure to integrate key
acquisitions

Suppliers
This includes:
• Loss of key trading partner
• Modern methods of
construction

S T R A T E G I C R E P O R T

Principal Risks and
Principal Risks and
Uncertainties
Uncertainties
The Board has overall responsibility for monitoring
The Board has overall responsibility for monitoring
internal and external risks to which the Group
internal and external risks to which the Group
and its businesses may be subject. The Group has
and its businesses may be subject. The Group has
established internal controls and systems to identify
established internal controls and systems to identify
and assess such risks. The Board reviews these risks
and assess such risks. The Board reviews these risks
and our ability to effectively monitor them at each
and our ability to effectively monitor them at each
scheduled Board meeting. Where appropriate specific
scheduled Board meeting. Where appropriate specific
updates and reports are circulated to Board members
updates and reports are circulated to Board members
in between such meetings.
in between such meetings.

A report, the ‘risk matrix’ is maintained on a rolling
A report, the ‘risk matrix’ is maintained on a rolling
basis by our Chief Financial Officer and is the subject
basis by our Chief Financial Officer and is the subject
of regular review by the Group’s Management Board
of regular review by the Group’s Management Board
team, with each senior manager responsible for
team, with each senior manager responsible for
underlying operating group companies reporting
underlying operating group companies reporting
into the operating board’s review. The Group’s
into the operating board’s review. The Group’s
Management Board meets monthly, is attended
Management Board meets monthly, is attended
by each executive director and is chaired by John
by each executive director and is chaired by John
Richards, chairman of the Board. As part of these
Richards, chairman of the Board. As part of these
meetings the Management Board meet to review on-
meetings the Management Board meet to review on-
going trading, budgets and forecasts and consider
going trading, budgets and forecasts and consider
new and on-going risks and uncertainties to the
new and on-going risks and uncertainties to the
Group’s operating businesses. Where appropriate
Group’s operating businesses. Where appropriate
additional, separate analyses or follow-up is
additional, separate analyses or follow-up is
undertaken of particular risks and issues identified.
undertaken of particular risks and issues identified.

Throughout the year, the COVID-19 pandemic
Throughout the year, the COVID-19 pandemic
has given rise to significant additional risks and
has given rise to significant additional risks and
uncertainties. These have been the subject of
uncertainties. These have been the subject of
specific contingency planning and risk mitigation.
specific contingency planning and risk mitigation.
As our customers’ and suppliers’ businesses have
As our customers’ and suppliers’ businesses have
resumed trading so have we and we have recovered
resumed trading so have we and we have recovered
well from the initial lockdown in March and April
well from the initial lockdown in March and April
2020. Our priority throughout the year has been
2020. Our priority throughout the year has been
the health and wellbeing of all of our stakeholders,
the health and wellbeing of all of our stakeholders,
including colleagues, clients, our contractors and
including colleagues, clients, our contractors and
the communities within which we work, as well as the
the communities within which we work, as well as the
commercial and financial health of our businesses
commercial and financial health of our businesses
and the preservation of shareholder value. Board
and the preservation of shareholder value. Board
meetings have increased in frequency as we continue
meetings have increased in frequency as we continue
to monitor the ongoing situation.
to monitor the ongoing situation.

20
20

Principal risks and uncertainties facing the Group are set out below.

Risk

Key controls

Ongoing action

Economic environment

The UK is recovering from the COVID-19 pandemic,

which has impacted operations and results during the

year. While the Group has returned to a strong trading

position following significant downturns at the start of

the year, ongoing uncertainty around new variants

continues to pose a risk.

The pandemic’s impact on the national economy has

also put pressure on the Group’s supply chain, resulting

in challenges from reduced product availability.

The Brexit process was monitored during the year and

appropriate measures put in place to accommodate

changes following the end of the transition period.

There has not been an adverse impact on the Group’s

ability to trade since leaving the EU and thus Brexit is

no longer considered a principal risk.

We monitor our core markets closely and maintain close relationships

with our principle customers, suppliers and manufacturers. Our key

customers within the housebuilding market are financially robust but we

monitor credit risk and debtors continuously.

Where opportunity presents itself, we

will continue to prudently expand our

geographical presence and the diversity of our

business in order to better serve our clients and

The Group’s supply lines have remained resilient but are monitored

closely and our risk mitigation plans are regularly reviewed.

Working capital is monitored on a daily basis, with robust and active

debtor control. Budgets and financial performance against KPIs are

regularly reviewed.

Health and safety remains a priority, both at our sites and in interacting

with clients and contacts. Compliance is tightly managed.

Retention of talent

The success of the Group depends to a significant

degree upon our senior management team. Failure to

attract and retain individuals with the right skills, drive

and capability may impact our ability to meet

performance expectations.

The recruitment and training of talent from within is actively promoted,

when appropriate, with a focus on internal succession management.

We also endeavour to ensure that talent acquired through acquisitions

is retained. We continue to review our remuneration policies to facilitate

the recruitment and retention of talent at the highest calibre, in addition to

maintaining entrepreneurial drive through the use of responsible incentives.

Margin management

Prices may not remain at levels which are both

competitive and achieve adequate margins. There

is a risk that not all inflationary price increases can

be passed on, resulting in lower margins. Rebate

income may also not be adequately monitored and

accounted for. Both or either may adversely impact

financial performance.

We continuously review and monitor margins and pricing within the

market by customer, supplier and product.

Where possible we seek to secure fixed pricing over a longer period with

key trading partners so as to maintain pricing continuity.

We regularly review and audit our rebate debtors and income. Monthly

performance is reviewed against rebate reports from suppliers and

internal rebate assumptions are closely monitored.

Volume arrangements with UK manufacturers are carefully maintained.

Arrangements with key trading partners, including rebates and

relationships with other key trading partners are an important

consideration when reviewing potential acquisitions.

Loss of a key trading partner

The loss of a key customer or supplier could adversely

impact business performance.

Relationships with key trading partners are valued and kept under

continuous review. We monitor our markets and ensure that all key

trading partners remain up to date with our unique selling propositions.

The impact of potential acquisitions on our key trading relationships are

carefully assessed as part of our due diligence process.

managers.

Change in employment status of

Group subcontractors

HMRC may reconsider their view on labour only

‘subcontractors’ employment status. This may have a

significantadverse impact on overheads, for those

members of our Group using such contractors in

their business.

Such a change, if made, would in our view be industry-wide. As

adversely affected contractual obligations are completed, we would

expect new pricing in the market to reflect increased overheads.

The Group reviews the employment status of its subcontractors to

ensure compliance with the latest legislation.

Modern Methods of Construction (MMC)

MMC, or the factory construction of modular units

for subsequent on-site assembly, have increased

and attracted significant investment from several

We continue to monitor the scale and use of MMC and the approach

of Local Authority planners to their use and how members of the Group

might be affected were their products, for example roof coverings, to fall

into the factory build stage of such units.

We seek to ensure that the Group has close

relationships with builders using MMC.

The Group’s geographical diversity across the UK reduces the impact of

extreme regional weather events.

We continue to seek to increase our

geographical reach through strategic

acquisitions and organic growth.

diversify risk.

Our ongoing strategy of developing through

acquisitions and organic growth maintains

a high level of buying power within both the

UK and EU markets, ensuring the Group can

source sufficient products to meet demand.

Health and safety procedures are the subject

of regular review and external review by health

and safety consultants, Safety First. COVID-19

safe procedures continue to be applied.

The Group has employee incentive schemes in

place and continues to review the key aspects

of its incentive arrangements and rewarding

of staff.

We continue to monitor and improve the

accuracy of ordering, scheduling and

forecasting. Core relationships are maintained

with key trading partners and, where possible,

we seek to agree prices on an annual basis.

We also seek to diversify the products

and services offered by the Group, to mitigate

the impact of margin pressures

in specific areas.

The active development of new trading

partners and the maintenance of sustainable

long-term relations with our existing partners

are key performance metrics for senior

Group businesses potentially affected will

endeavour to maintain robust margins so as to

mitigate any impact on overheads.

market participants.

Extreme weather

Extreme weather events, whether in the form of

excessive rain and flooding or snow, can have a

material impact on clients’ construction sites and

adversely affect turnover.

Failure to integrate key acquisitions

Given the Group’s acquisitive nature, there is a risk

that the Group fails to integrate an acquisition.

Cyber security

The COVID-19 pandemic led to an increase in

remote working. There is also a growing risk of

fraudulent attacks on businesses. Such an attack

could have the potential to significantly disrupt the

Group’s operations and result in loss to the business.

Environmental and social responsibility

Increasing requirements in respect of environmental

and social reporting and practices, increase the risk

of an adverse impact on the Group’s reputation,

should expectations not be met or regulations

adhered to.

The Group completes both financial and legal due diligence, prior to

acquisition, to mitigate this risk.

The Group Management Board executives also meet with the senior

management of the company being acquired to ensure they will fit in

with the Group.

Following acquisition, the Group ensures compliance with its

systems and reporting, while also undertaking regular business and

performance reviews.

The Group has recovery plans in place, and ensures systems are up

to date with the latest cyber protection.

Ongoing updates to legislation and social expectations are discussed

at regular senior management meetings to ensure the Group is aware

of any key changes.

We continue to monitor existing acquisitions

and maintain the due diligence discipline.

Group policies and practices also undergo

continuous review, to work towards a Group

wide approach as quickly as possible.

We continuously monitor IT systems in place

to ensure they are up to date and regularly

updated with the latest security protection.

Ongoing training is also provided so staff

maintain awareness of the risks and appropriate

action to take should an issue arise.

We monitor the impact that the Group’s

operations have on the environment and its

stakeholders to ensure compliance with all

appropriate regulations.

We also carry out checks on suppliers to

ensure that they are also maintaining the

high standards expected.

S T R A T E G I C R E P O R T

Principal risks and uncertainties facing the Group are set out below.
Principal risks and uncertainties facing the Group are set out below.

Risk

Key controls

Ongoing action

Economic environment
Economic environment
The UK is recovering from the COVID-19 pandemic,
The UK is recovering from the COVID-19 pandemic,
which has impacted operations and results during the
which has impacted operations and results during the
year. While the Group has returned to a strong trading
year. While the Group has returned to a strong trading
position following significant downturns at the start of
position following significant downturns at the start of
the year, ongoing uncertainty around new variants
the year, ongoing uncertainty around new variants
continues to pose a risk.
continues to pose a risk.
The pandemic’s impact on the national economy has
The pandemic’s impact on the national economy has
also put pressure on the Group’s supply chain, resulting
also put pressure on the Group’s supply chain, resulting
in challenges from reduced product availability.
in challenges from reduced product availability.
The Brexit process was monitored during the year and
The Brexit process was monitored during the year and
appropriate measures put in place to accommodate
appropriate measures put in place to accommodate
changes following the end of the transition period.
changes following the end of the transition period.
There has not been an adverse impact on the Group’s
There has not been an adverse impact on the Group’s
ability to trade since leaving the EU and thus Brexit is
ability to trade since leaving the EU and thus Brexit is
no longer considered a principal risk.
no longer considered a principal risk.

We monitor our core markets closely and maintain close relationships
We monitor our core markets closely and maintain close relationships
with our principle customers, suppliers and manufacturers. Our key
with our principle customers, suppliers and manufacturers. Our key
customers within the housebuilding market are financially robust but we
customers within the housebuilding market are financially robust but we
monitor credit risk and debtors continuously.
monitor credit risk and debtors continuously.
The Group’s supply lines have remained resilient but are monitored
The Group’s supply lines have remained resilient but are monitored
closely and our risk mitigation plans are regularly reviewed.
closely and our risk mitigation plans are regularly reviewed.
Working capital is monitored on a daily basis, with robust and active
Working capital is monitored on a daily basis, with robust and active
debtor control. Budgets and financial performance against KPIs are
debtor control. Budgets and financial performance against KPIs are
regularly reviewed.
regularly reviewed.
Health and safety remains a priority, both at our sites and in interacting
Health and safety remains a priority, both at our sites and in interacting
with clients and contacts. Compliance is tightly managed.
with clients and contacts. Compliance is tightly managed.

Where opportunity presents itself, we
Where opportunity presents itself, we
will continue to prudently expand our
will continue to prudently expand our
geographical presence and the diversity of our
geographical presence and the diversity of our
business in order to better serve our clients and
business in order to better serve our clients and
diversify risk.
diversify risk.
Our ongoing strategy of developing through
Our ongoing strategy of developing through
acquisitions and organic growth maintains
acquisitions and organic growth maintains
a high level of buying power within both the
a high level of buying power within both the
UK and EU markets, ensuring the Group can
UK and EU markets, ensuring the Group can
source sufficient products to meet demand.
source sufficient products to meet demand.
Health and safety procedures are the subject
Health and safety procedures are the subject
of regular review and external review by health
of regular review and external review by health
and safety consultants, Safety First. COVID-19
and safety consultants, Safety First. COVID-19
safe procedures continue to be applied.
safe procedures continue to be applied.

Retention of talent
Retention of talent
The success of the Group depends to a significant
The success of the Group depends to a significant
degree upon our senior management team. Failure to
degree upon our senior management team. Failure to
attract and retain individuals with the right skills, drive
attract and retain individuals with the right skills, drive
and capability may impact our ability to meet
and capability may impact our ability to meet
performance expectations.
performance expectations.

The recruitment and training of talent from within is actively promoted,
The recruitment and training of talent from within is actively promoted,
when appropriate, with a focus on internal succession management.
when appropriate, with a focus on internal succession management.
We also endeavour to ensure that talent acquired through acquisitions
We also endeavour to ensure that talent acquired through acquisitions
is retained. We continue to review our remuneration policies to facilitate
is retained. We continue to review our remuneration policies to facilitate
the recruitment and retention of talent at the highest calibre, in addition to
the recruitment and retention of talent at the highest calibre, in addition to
maintaining entrepreneurial drive through the use of responsible incentives.
maintaining entrepreneurial drive through the use of responsible incentives.

The Group has employee incentive schemes in
The Group has employee incentive schemes in
place and continues to review the key aspects
place and continues to review the key aspects
of its incentive arrangements and rewarding
of its incentive arrangements and rewarding
of staff.
of staff.

Margin management
Margin management
Prices may not remain at levels which are both
Prices may not remain at levels which are both
competitive and achieve adequate margins. There
competitive and achieve adequate margins. There
is a risk that not all inflationary price increases can
is a risk that not all inflationary price increases can
be passed on, resulting in lower margins. Rebate
be passed on, resulting in lower margins. Rebate
income may also not be adequately monitored and
income may also not be adequately monitored and
accounted for. Both or either may adversely impact
accounted for. Both or either may adversely impact
financial performance.
financial performance.

We continuously review and monitor margins and pricing within the
We continuously review and monitor margins and pricing within the
market by customer, supplier and product.
market by customer, supplier and product.
Where possible we seek to secure fixed pricing over a longer period with
Where possible we seek to secure fixed pricing over a longer period with
key trading partners so as to maintain pricing continuity.
key trading partners so as to maintain pricing continuity.
We regularly review and audit our rebate debtors and income. Monthly
We regularly review and audit our rebate debtors and income. Monthly
performance is reviewed against rebate reports from suppliers and
performance is reviewed against rebate reports from suppliers and
internal rebate assumptions are closely monitored.
internal rebate assumptions are closely monitored.
Volume arrangements with UK manufacturers are carefully maintained.
Volume arrangements with UK manufacturers are carefully maintained.
Arrangements with key trading partners, including rebates and
Arrangements with key trading partners, including rebates and
relationships with other key trading partners are an important
relationships with other key trading partners are an important
consideration when reviewing potential acquisitions.
consideration when reviewing potential acquisitions.

We continue to monitor and improve the
We continue to monitor and improve the
accuracy of ordering, scheduling and
accuracy of ordering, scheduling and
forecasting. Core relationships are maintained
forecasting. Core relationships are maintained
with key trading partners and, where possible,
with key trading partners and, where possible,
we seek to agree prices on an annual basis.
we seek to agree prices on an annual basis.
We also seek to diversify the products
We also seek to diversify the products
and services offered by the Group, to mitigate
and services offered by the Group, to mitigate
the impact of margin pressures
the impact of margin pressures
in specific areas.
in specific areas.

Loss of a key trading partner
The loss of a key customer or supplier could adversely
impact business performance.

Relationships with key trading partners are valued and kept under
Relationships with key trading partners are valued and kept under
continuous review. We monitor our markets and ensure that all key
continuous review. We monitor our markets and ensure that all key
trading partners remain up to date with our unique selling propositions.
trading partners remain up to date with our unique selling propositions.
The impact of potential acquisitions on our key trading relationships are
The impact of potential acquisitions on our key trading relationships are
carefully assessed as part of our due diligence process.
carefully assessed as part of our due diligence process.

The active development of new trading
The active development of new trading
partners and the maintenance of sustainable
partners and the maintenance of sustainable
long-term relations with our existing partners
long-term relations with our existing partners
are key performance metrics for senior
are key performance metrics for senior
managers.
managers.

Change in employment status of
Change in employment status of
Group subcontractors
Group subcontractors
HMRC may reconsider their view on labour only
HMRC may reconsider their view on labour only
‘subcontractors’ employment status. This may have a
‘subcontractors’ employment status. This may have a
significantadverse impact on overheads, for those
significantadverse impact on overheads, for those
members of our Group using such contractors in
members of our Group using such contractors in
their business.
their business.

Modern Methods of Construction (MMC)
Modern Methods of Construction (MMC)
MMC, or the factory construction of modular units
MMC, or the factory construction of modular units
for subsequent on-site assembly, have increased
for subsequent on-site assembly, have increased
and attracted significant investment from several
and attracted significant investment from several
market participants.
market participants.

Extreme weather
Extreme weather
Extreme weather events, whether in the form of
Extreme weather events, whether in the form of
excessive rain and flooding or snow, can have a
excessive rain and flooding or snow, can have a
material impact on clients’ construction sites and
material impact on clients’ construction sites and
adversely affect turnover.
adversely affect turnover.

Failure to integrate key acquisitions
Failure to integrate key acquisitions
Given the Group’s acquisitive nature, there is a risk
Given the Group’s acquisitive nature, there is a risk
that the Group fails to integrate an acquisition.
that the Group fails to integrate an acquisition.

Cyber security
Cyber security
The COVID-19 pandemic led to an increase in
The COVID-19 pandemic led to an increase in
remote working. There is also a growing risk of
remote working. There is also a growing risk of
fraudulent attacks on businesses. Such an attack
fraudulent attacks on businesses. Such an attack
could have the potential to significantly disrupt the
could have the potential to significantly disrupt the
Group’s operations and result in loss to the business.
Group’s operations and result in loss to the business.

Environmental and social responsibility
Environmental and social responsibility
Increasing requirements in respect of environmental
Increasing requirements in respect of environmental
and social reporting and practices, increase the risk
and social reporting and practices, increase the risk
of an adverse impact on the Group’s reputation,
of an adverse impact on the Group’s reputation,
should expectations not be met or regulations
should expectations not be met or regulations
adhered to.
adhered to.

Such a change, if made, would in our view be industry-wide. As
Such a change, if made, would in our view be industry-wide. As
adversely affected contractual obligations are completed, we would
adversely affected contractual obligations are completed, we would
expect new pricing in the market to reflect increased overheads.
expect new pricing in the market to reflect increased overheads.
The Group reviews the employment status of its subcontractors to
The Group reviews the employment status of its subcontractors to
ensure compliance with the latest legislation.
ensure compliance with the latest legislation.

Group businesses potentially affected will
Group businesses potentially affected will
endeavour to maintain robust margins so as to
endeavour to maintain robust margins so as to
mitigate any impact on overheads.
mitigate any impact on overheads.

We continue to monitor the scale and use of MMC and the approach
We continue to monitor the scale and use of MMC and the approach
of Local Authority planners to their use and how members of the Group
of Local Authority planners to their use and how members of the Group
might be affected were their products, for example roof coverings, to fall
might be affected were their products, for example roof coverings, to fall
into the factory build stage of such units.
into the factory build stage of such units.

We seek to ensure that the Group has close
We seek to ensure that the Group has close
relationships with builders using MMC.
relationships with builders using MMC.

The Group’s geographical diversity across the UK reduces the impact of
extreme regional weather events.

We continue to seek to increase our
We continue to seek to increase our
geographical reach through strategic
geographical reach through strategic
acquisitions and organic growth.
acquisitions and organic growth.

The Group completes both financial and legal due diligence, prior to
The Group completes both financial and legal due diligence, prior to
acquisition, to mitigate this risk.
acquisition, to mitigate this risk.
The Group Management Board executives also meet with the senior
The Group Management Board executives also meet with the senior
management of the company being acquired to ensure they will fit in
management of the company being acquired to ensure they will fit in
with the Group.
with the Group.
Following acquisition, the Group ensures compliance with its
Following acquisition, the Group ensures compliance with its
systems and reporting, while also undertaking regular business and
systems and reporting, while also undertaking regular business and
performance reviews.
performance reviews.

The Group has recovery plans in place, and ensures systems are up
to date with the latest cyber protection.

Ongoing updates to legislation and social expectations are discussed
at regular senior management meetings to ensure the Group is aware
of any key changes.

We continue to monitor existing acquisitions
We continue to monitor existing acquisitions
and maintain the due diligence discipline.
and maintain the due diligence discipline.
Group policies and practices also undergo
Group policies and practices also undergo
continuous review, to work towards a Group
continuous review, to work towards a Group
wide approach as quickly as possible.
wide approach as quickly as possible.

We continuously monitor IT systems in place
We continuously monitor IT systems in place
to ensure they are up to date and regularly
to ensure they are up to date and regularly
updated with the latest security protection.
updated with the latest security protection.
Ongoing training is also provided so staff
Ongoing training is also provided so staff
maintain awareness of the risks and appropriate
maintain awareness of the risks and appropriate
action to take should an issue arise.
action to take should an issue arise.

We monitor the impact that the Group’s
We monitor the impact that the Group’s
operations have on the environment and its
operations have on the environment and its
stakeholders to ensure compliance with all
stakeholders to ensure compliance with all
appropriate regulations.
appropriate regulations.
We also carry out checks on suppliers to
We also carry out checks on suppliers to
ensure that they are also maintaining the
ensure that they are also maintaining the
high standards expected.
high standards expected.

S T R A T E G I C R E P O R T

21
21

Section 172(1) statement
Section 172(1) statement
In compliance with the Companies Act 2006, the Board of Directors are
In compliance with the Companies Act 2006, the Board of Directors are
required to act in accordance with a set of general duties. During the year to
required to act in accordance with a set of general duties. During the year to
31 March 2021, the Board of Directors consider that they have, individually
31 March 2021, the Board of Directors consider that they have, individually
and collectively, acted in a way they consider, in good faith, would be most
and collectively, acted in a way they consider, in good faith, would be most
likely to promote the success of the Company for the benefit of its shareholders
likely to promote the success of the Company for the benefit of its shareholders
as a whole, having regard to a number of broader matters including the
as a whole, having regard to a number of broader matters including the
likely consequence of decisions for the long-term and the Company’s wider
likely consequence of decisions for the long-term and the Company’s wider
relationships. In doing so, the Board has had regard to the matters contained
relationships. In doing so, the Board has had regard to the matters contained
in section 172(1) (a)-(f) of the Companies Act 2006.
in section 172(1) (a)-(f) of the Companies Act 2006.

The Directors have regard, amongst other matters, to the:
The Directors have regard, amongst other matters, to the:
• likely consequences of any decisions in the long-term;
• likely consequences of any decisions in the long-term;

• interests of the Company’s employees;
• interests of the Company’s employees;

• need to foster the Company’s business relationships with
• need to foster the Company’s business relationships with
suppliers, customers and others;
suppliers, customers and others;

• impact of the Company’s operations on the community
• impact of the Company’s operations on the community
and environment;
and environment;

• desirability of the Company maintaining a reputation for
• desirability of the Company maintaining a reputation for
high standards of business conduct; and
high standards of business conduct; and

• need to act fairly between members of the Company.
• need to act fairly between members of the Company.

This statement focuses on matters material to shareholders.
This statement focuses on matters material to shareholders.
The Group’s key resources and relationships are detailed in
The Group’s key resources and relationships are detailed in
the Business Model on page 10. The Board recognises the
the Business Model on page 10. The Board recognises the
importance of building and maintaining relationships with its
importance of building and maintaining relationships with its
key stakeholders, and considering the external impact of the
key stakeholders, and considering the external impact of the
Group’s operations, in order to achieve long-term success.
Group’s operations, in order to achieve long-term success.
The Board’s understanding of the interests of the Group’s
The Board’s understanding of the interests of the Group’s
stakeholders is informed by the Board’s programme
stakeholders is informed by the Board’s programme
of stakeholder engagement.
of stakeholder engagement.

Matters that have impacted key decisions and strategies
Matters that have impacted key decisions and strategies
during the year ended 31 March 2021 are set out in the
during the year ended 31 March 2021 are set out in the
following paragraphs.
following paragraphs.

Strategy

The Directors also take into account the views and interests of a wider

set of stakeholders when making decisions. During the year, the Board

received information to enable them to consider the impact of the

Company’s decisions on its key stakeholders. This information was

distributed in a range of different formats, including through reports

and presentations on our financial and operational performance,

non financial KPIs and risk. We acknowledge that every decision we

make will not necessarily result in a positive outcome for all of our

stakeholders and the Board frequently has to make difficult decisions

based on competing priorities. By considering the Company’s purpose

and values, together with its strategic priorities and having a process

in place for decision making, we do, however, aim to balance those

different perspectives.

22
22

Acquisitions

During the year, the Group acquired two

companies. The acquisitions provided the

Group with additional scale, geographical

diversity and additional product ranges.

The acquisitions provided enhanced sales

opportunities and revenue generation,

providing returns to shareholders in the

longer term and enhanced employment

opportunities as part of a wider Group.

Prior to the acquisitions, the Board

considered the effects they would have

on the Group’s gearing and creditors but

reached the conclusion that creditors’

interests would not be impacted

significantly and any impact would

be offset by the positive effects of the

acquisition on the Group.

Link to strategy: Acquisitions, Geographical

Expansion and Product Expansion

Retention of Staff

Promoting the success of our business for

the benefit of our shareholders, whether

large institutions or small retail investors,

is fundamental and has to be aligned

with employees. The Board believes

that the issue of CSOP shares to all staff

that had been with the Group over 2

years at the time of the Company’s IPO,

and the issue of LTIP awards during

the year, ensures alignment of interest

between the shareholders and employees.

Remuneration packages for all employees

are also reviewed regularly.

Link to strategy: Organic Growth

Impact on the Environment

and the Community

The Group is committed to reducing the

environmental impact of its operations

and to making a positive impact in the

community. Further information on the

steps taken to reduce the environmental

impact of the Group’s operations, and

its charitable activities, are set out on in

the Corporate and Social Responsibility

statement on pages 28 and 29.

S T R A T E G I C R E P O R T

Acquisitions
Acquisitions
During the year, the Group acquired two
During the year, the Group acquired two
companies. The acquisitions provided the
companies. The acquisitions provided the
Group with additional scale, geographical
Group with additional scale, geographical
diversity and additional product ranges.
diversity and additional product ranges.
The acquisitions provided enhanced sales
The acquisitions provided enhanced sales
opportunities and revenue generation,
opportunities and revenue generation,
providing returns to shareholders in the
providing returns to shareholders in the
longer term and enhanced employment
longer term and enhanced employment
opportunities as part of a wider Group.
opportunities as part of a wider Group.
Prior to the acquisitions, the Board
Prior to the acquisitions, the Board
considered the effects they would have
considered the effects they would have
on the Group’s gearing and creditors but
on the Group’s gearing and creditors but
reached the conclusion that creditors’
reached the conclusion that creditors’
interests would not be impacted
interests would not be impacted
significantly and any impact would
significantly and any impact would
be offset by the positive effects of the
be offset by the positive effects of the
acquisition on the Group.
acquisition on the Group.

Link to strategy: Acquisitions, Geographical
Link to strategy: Acquisitions, Geographical
Expansion and Product Expansion
Expansion and Product Expansion

Retention of Staff
Retention of Staff
Promoting the success of our business for
Promoting the success of our business for
the benefit of our shareholders, whether
the benefit of our shareholders, whether
large institutions or small retail investors,
large institutions or small retail investors,
is fundamental and has to be aligned
is fundamental and has to be aligned
with employees. The Board believes
with employees. The Board believes
that the issue of CSOP shares to all staff
that the issue of CSOP shares to all staff
that had been with the Group over 2
that had been with the Group over 2
years at the time of the Company’s IPO,
years at the time of the Company’s IPO,
and the issue of LTIP awards during
and the issue of LTIP awards during
the year, ensures alignment of interest
the year, ensures alignment of interest
between the shareholders and employees.
between the shareholders and employees.
Remuneration packages for all employees
Remuneration packages for all employees
are also reviewed regularly.
are also reviewed regularly.

Link to strategy: Organic Growth
Link to strategy: Organic Growth

Impact on the Environment
Impact on the Environment
and the Community
and the Community
The Group is committed to reducing the
The Group is committed to reducing the
environmental impact of its operations
environmental impact of its operations
and to making a positive impact in the
and to making a positive impact in the
community. Further information on the
community. Further information on the
steps taken to reduce the environmental
steps taken to reduce the environmental
impact of the Group’s operations, and
impact of the Group’s operations, and
its charitable activities, are set out on in
its charitable activities, are set out on in
the Corporate and Social Responsibility
the Corporate and Social Responsibility
statement on pages 28 and 29.
statement on pages 28 and 29.

S T R A T E G I C R E P O R T

23
23

Strategy
Strategy
The Directors also take into account the views and interests of a wider
The Directors also take into account the views and interests of a wider
set of stakeholders when making decisions. During the year, the Board
set of stakeholders when making decisions. During the year, the Board
received information to enable them to consider the impact of the
received information to enable them to consider the impact of the
Company’s decisions on its key stakeholders. This information was
Company’s decisions on its key stakeholders. This information was
distributed in a range of different formats, including through reports
distributed in a range of different formats, including through reports
and presentations on our financial and operational performance,
and presentations on our financial and operational performance,
non financial KPIs and risk. We acknowledge that every decision we
non financial KPIs and risk. We acknowledge that every decision we
make will not necessarily result in a positive outcome for all of our
make will not necessarily result in a positive outcome for all of our
stakeholders and the Board frequently has to make difficult decisions
stakeholders and the Board frequently has to make difficult decisions
based on competing priorities. By considering the Company’s purpose
based on competing priorities. By considering the Company’s purpose
and values, together with its strategic priorities and having a process
and values, together with its strategic priorities and having a process
in place for decision making, we do, however, aim to balance those
in place for decision making, we do, however, aim to balance those
different perspectives.
different perspectives.

Chief Financial Officer’s Review

£181.1m £38.0m

£17.5m

£11.2m

Revenue decline of 3.2% to
£181.1 million, with like-for-like
decline of 13.2%

Gross Profit increased by
0.8% to £38.0m.

Adjusted EBITDA decreased
by 10.1% to £17.5m

Profit Before Tax
decreased by 8.4%
from 2020

The financial results for the year ended 31 March 2021 reflect the impact of COVID-19 on the business. This impact was
mitigated by careful cost control and the utilisation of around £1.3 million of the Government’s Coronavirus Job Retention
Scheme (CJRS).

Overall business performance is shown in our key performance indicators on page 16.

Revenue
Revenue totalled £181.1 million for the year ended 31 March 2021. This represented a decrease of 3.2% compared to the previous
year (2020: £187.1 million).

Division

Bricks and Building Materials

Roofing Services

Heating, Plumbing and Joinery

Total

2021
£m

144.2

12.4

24.5

181.1

2020
£m

144.0

17.1

26.1

187.1

% Change

0.1

(27.5)

(6.1)

(3.2)

Sales performance was very different in the two halves of the year, following recovery from the initial COVID-19 related lockdown, as
shown in the table below, on a like-for-like basis, as a % change from the equivalent period in the prior year.

Bricks and Building
Materials
% Change

Roofing Services
% Change

Heating, Plumbing
and Joinery
% Change

Total
% Change

Full year

(30.4)

8.9

(12.2)

(49.3)

(1.3)

(28.3)

(24.3)

5.2

(9.6)

(31.3)

7.6

(13.2)

Gross Profit
Gross profit for the year increased to £38.0 million from £37.7
million, with a slight improvement in gross margin of 0.8% to
21.0% (2020: 20.1%)

Adjusted Profit and Adjusted EBITDA
Statutory profit before tax of £11.2 million (2020: £12.2 million)
includes other items of £3.8 million (2020: £4.8 million) which are
not considered to be part of the Group’s underlying operations.

These are analysed as follows:

Statutory profit before tax

Acquisition costs

Share based payment expense

2021
£’000

2020
£’000

11,165

12,184

105

338

Amortisation of intangible assets

3,619

3,059

Impairment of goodwill

Unwinding of discount on
contingent consideration

Interest payable on loan notes

Interest payable on deferred consideration

Share of post-tax losses of equity
accounted associates

Fair value (gains)/ losses on
contingent consideration

Exceptional income

Exceptional expenses

Total other items before tax

Adjusted profit before tax

127

227

977

(360)

(2,000)

2,407

3,835

4,832

15,000 17,016

Further details regarding the above other items are disclosed in
note 14 to the financial statements.

Adjusted EBITDA is the adjusted profit before tax prior to the
addition of finance income and deduction of depreciation,
amortisation and finance expenses.

Adjusted EBITDA decreased by 10.1% to £17.5 million for the year
ended 31 March 2021. Detailed segmental analysis is per note 6
of the financial statements. The COVID-19 pandemic has resulted
in a decrease across all divisions on a like for like basis. However,
as reported, the Bricks and Building Materials division adjusted
EBITDA has increased from £11.5 million to £11.7 million, following
acquisitions that were made during the current year and part way
through the previous year.

Taxation
The charge for taxation was £1.5 million (2020: £2.9 million), an
effective rate of taxation (Tax expense divided by Profit Before
Tax) of 13.5% (2020: 23.7%). The effective rate for the year falls
below the main rate of corporation tax (19%), due to research and
development tax credits being claimed during the year in relation to
prior years. The 2020 effective tax rate was higher than the main
rate of tax following the remeasurement of deferred tax after the
announcement of a change in tax rate from 17% to 19%.

Earnings Per Share
Basic EPS for the year was 4.19p (2020: 4.79p). The Group also
reports an adjusted underlying EPS which adjusts for the impact of
the other items analysed in the table above. Adjusted EPS has fallen
from 7.27p to 5.56p per share.

Dividends
In light of the strength of the Group’s trading performance since the
easing of the initial COVID-19 related lockdown measures for the
construction industry and also in recognition of the strength of the
balance sheet at the year end, the Board is recommending a final
dividend of 1.0850p per share.
Subject to approval by shareholders, the final dividend will be paid
on 23 September 2021, with a record date of 27 August 2021 and an
ex-dividend date of 26 August 2021.

Cash Flow and Net Debt
Operating cash flows before movements in working capital decreased
to £17.4 million from £21.0 million in 2020. Cash generated from
operations decreased to £13.1 million from £20.9 million.
Inventories increased primarily as a result of the Group’s
preparations for Brexit. The initial COVID-19 lockdown hampered
sales in the final month of the 2020 financial year whilst in comparison
the Group was fully trading in March 2021, resulting in a higher
receivables balance as at 31 March 2021. Creditor payments were
also normalised following the staggered payments at 31 March 2020
during lockdown. Additional working capital requirements are also
included for the new acquisitions, since their addition to the Group.
At 31 March 2021, net debt (borrowings less cash) was
£7.3 million which compares to net cash of £2.3 million at the
prior year end. This is after additional investment in property, plant
and equipment of £5.7 million (2020: £0.9 million), tax paid of
£2.4 million (2020: £4.7 million), the initial payments for two new
subsidiaries of £2.5 million (2020: £11.4 million) and the payment
of deferred consideration, in relation to prior year acquisitions, of
£7.9 million (2020: £5.9 million). Dividends of £4.5 million (2020:
£2 million) were also paid in the year. We continue to expect that the
Brickability Group will remain a business that is cash generative.

Bank Facilities
At the year end, the Group had debt facilities with HSBC, totalling
£30 million. This consists of a £25 million revolving credit facility
repayable in full in March 2023 (with the option of two one-year
extensions) and a £5 million overdraft facility until March 2023.
Since the year end, the Group has re-financed into a £60 million
revolving credit facility, on a club basis with HSBC and Barclays, that
runs for 3 years (with the option of two one-year extensions). The
Group also has access to an additional £25 million accordion.

Subsequent Events
The Group completed the acquisition of Taylor Maxwell (2017)
Limited in June 2021, for consideration of up to £63 million.
Leadcraft Limited was also acquired in July 2021, for consideration
initially expected to be up to £5.5 million. Further investment has
also been made in opening a new branch, within the U Plastics
business, with a new property purchased for £2.4 million. Full details
of events occurring since the year end are disclosed in note 39 to the
financial statements.

Going Concern
The directors are confident, having made appropriate enquiries,
that the Company and the Group have adequate resources
to continue in operational existence for the foreseeable future.
Accordingly, they continue to adopt the going concern basis in
preparing the financial statements. Further details concerning the
assessment of going concern are outlined within the Going Concern
and Outlook section on pages 26 and 27.

Mike Gant
Chief Financial Officer
4 August 2021

S T R A T E G I C R E P O R T

Going Concern and Outlook
Going Concern and Outlook
The business activities of the Group, its current operations and factors likely
The business activities of the Group, its current operations and factors likely
to affect its future development, performance and position are set out in the Chief
to affect its future development, performance and position are set out in the Chief
Executive’s Review on pages 8 and 9 and in the Chief Financial Officer’s Review on
Executive’s Review on pages 8 and 9 and in the Chief Financial Officer’s Review on
pages 24 and 25. In addition, note 33 of the financial statements includes an analysis of
pages 24 and 25. In addition, note 33 of the financial statements includes an analysis of
the Group’s financial risk management objectives, details of its financial instruments and hedging
the Group’s financial risk management objectives, details of its financial instruments and hedging
activities and its exposures to credit and liquidity risk.
activities and its exposures to credit and liquidity risk.

The Group has a formalised process of monthly reporting and review, and information is provided to the Board
The Group has a formalised process of monthly reporting and review, and information is provided to the Board
of Directors in order to allow sufficient review to be performed to enable the Board to ensure the adequacy
of Directors in order to allow sufficient review to be performed to enable the Board to ensure the adequacy
of resources available for the Group to achieve its business objectives and in particular the impact of COVID-19.
of resources available for the Group to achieve its business objectives and in particular the impact of COVID-19.

Budget scenarios have been prepared
Budget scenarios have been prepared
comparing a number of outcomes,
comparing a number of outcomes,
however, the Board focussed on three
however, the Board focussed on three
cases to determine how COVID-19 could
cases to determine how COVID-19 could
continue to impact the Group over the 12
continue to impact the Group over the 12
months following approval of the financial
months following approval of the financial
statements. The three scenarios assessed
statements. The three scenarios assessed
a percentage drop in sales compared to
a percentage drop in sales compared to
the Group’s trading forecasts as follows:
the Group’s trading forecasts as follows:
a) 40%; b) 50% and c) 60%. The three
a) 40%; b) 50% and c) 60%. The three
scenarios represent various levels of
scenarios represent various levels of
reducing trading in response to local
reducing trading in response to local
lockdowns and periods of total lockdown
lockdowns and periods of total lockdown
enforced by the Government in response to
enforced by the Government in response to
rising cases of COVID-19. In determining
rising cases of COVID-19. In determining
these the Group considered macro-
these the Group considered macro-
economic and industry wide projections as
economic and industry wide projections as
well as matters specific to the Group.
well as matters specific to the Group.

The models demonstrated that annual
The models demonstrated that annual
turnover would have to fall by 50% before
turnover would have to fall by 50% before
the Group would breach bank covenants.
the Group would breach bank covenants.
If turnover reduced evenly over the period,
If turnover reduced evenly over the period,
bank covenants would be in breach by
bank covenants would be in breach by
31 December 2021. However, given the
31 December 2021. However, given the
Group’s experience of trading through
Group’s experience of trading through
various restrictions, strong post year end
various restrictions, strong post year end
trading results and the current market
trading results and the current market
expectations, this is considered extremely
expectations, this is considered extremely
unlikely. If the situation arose whereby
unlikely. If the situation arose whereby
turnover was sustained at this low level,
turnover was sustained at this low level,
significant cost cutting measures would
significant cost cutting measures would

26
26

also be undertaken to accommodate the
also be undertaken to accommodate the
reduced level of turnover thereby increasing
reduced level of turnover thereby increasing
EBITDA. The above assessment was also
EBITDA. The above assessment was also
carried out based on the facilities in place
carried out based on the facilities in place
at the year end. As noted later in this report,
at the year end. As noted later in this report,
the position has been re-assessed following
the position has been re-assessed following
an acquisition and increased bank facility
an acquisition and increased bank facility
secured post year end.
secured post year end.

As a result of the COVID-19 Pandemic on
As a result of the COVID-19 Pandemic on
the national economy, the Group’s supply
the national economy, the Group’s supply
chain has become challenged in terms
chain has become challenged in terms
of product availability. Through bolt on
of product availability. Through bolt on
acquisitions in recent years the Group has
acquisitions in recent years the Group has
maintained very strong buying power with
maintained very strong buying power with
European factories who are able to bridge
European factories who are able to bridge
the supply gap to satisfy the demands of the
the supply gap to satisfy the demands of the
UK housing market.
UK housing market.

Due to the supply chain issues the Group
Due to the supply chain issues the Group
is also experiencing increased costs from
is also experiencing increased costs from
suppliers. The board monitors price
suppliers. The board monitors price
increases carefully and ensures that steps
increases carefully and ensures that steps
are taken to preserve the operating margins
are taken to preserve the operating margins
returned by the Group.
returned by the Group.

The Group sells throughout the UK and
The Group sells throughout the UK and
has a spread of customers, with credit
has a spread of customers, with credit
insurance covering the main brick business.
insurance covering the main brick business.
The Group sources a range of products
The Group sources a range of products
from third-party suppliers both in UK and
from third-party suppliers both in UK and
Europe. During the year, the Group had
Europe. During the year, the Group had
average net debt of £5 million and, at the
average net debt of £5 million and, at the

year end, had unutilised bank facilities with
year end, had unutilised bank facilities with
available funding of £14 million.
available funding of £14 million.

As disclosed in note 39, since the year end
As disclosed in note 39, since the year end
the Group acquired the entire share capital
the Group acquired the entire share capital
of Taylor Maxwell (2017) Limited. The
of Taylor Maxwell (2017) Limited. The
Group raised equity finance of £55 million
Group raised equity finance of £55 million
to fund the acquisition and replaced the
to fund the acquisition and replaced the
existing bank debt facility of £30 million
existing bank debt facility of £30 million
with a new facility of £60 million. The initial
with a new facility of £60 million. The initial
cash consideration of £40 million for the
cash consideration of £40 million for the
acquisition has been settled (aside from
acquisition has been settled (aside from
an agreed retention) and the Group has
an agreed retention) and the Group has
significant headroom within the available
significant headroom within the available
banking facilities. Budget scenarios,
banking facilities. Budget scenarios,
incorporating this acquisition, have been
incorporating this acquisition, have been
prepared based on expected trading to
prepared based on expected trading to
assess the impact on banking covenants
assess the impact on banking covenants
in the period covering 12 months from
in the period covering 12 months from
approval of the financial statements. Due
approval of the financial statements. Due
to the available headroom in the facility,
to the available headroom in the facility,
no breaches of banking covenants are
no breaches of banking covenants are
expected during the period.
expected during the period.

After making enquiries and reviewing
After making enquiries and reviewing
budgets and forecasts for the Group, the
budgets and forecasts for the Group, the
Directors have a reasonable expectation
Directors have a reasonable expectation
that the Company and the Group have
that the Company and the Group have
adequate resources to continue in
adequate resources to continue in
operational existence for the foreseeable
operational existence for the foreseeable
future. Accordingly, they continue to adopt
future. Accordingly, they continue to adopt
the going concern basis in preparing the
the going concern basis in preparing the
Annual Report and Accounts.
Annual Report and Accounts.

Outlook

The Group has successfully traded through a year of a global pandemic. We look forward to the financial year ended 31 March

2022 with cautious optimism and, at this very early stage of the year, anticipate trading will be in line with expectations.

Our strategy and core values remain unchanged. We are focused on driving profitable sales growth organically and through

acquisitions and enhancing our operational capabilities and efficiency.

As such, we remain confident in our ability to create shareholder value in the short, medium and long-term.

S T R A T E G I C R E P O R T

Outlook
Outlook
The Group has successfully traded through a year of a global pandemic. We look forward to the financial year ended 31 March
The Group has successfully traded through a year of a global pandemic. We look forward to the financial year ended 31 March
2022 with cautious optimism and, at this very early stage of the year, anticipate trading will be in line with expectations.
2022 with cautious optimism and, at this very early stage of the year, anticipate trading will be in line with expectations.

Our strategy and core values remain unchanged. We are focused on driving profitable sales growth organically and through
Our strategy and core values remain unchanged. We are focused on driving profitable sales growth organically and through
acquisitions and enhancing our operational capabilities and efficiency.
acquisitions and enhancing our operational capabilities and efficiency.

As such, we remain confident in our ability to create shareholder value in the short, medium and long-term.
As such, we remain confident in our ability to create shareholder value in the short, medium and long-term.

S T R A T E G I C R E P O R T

27
27

Corporate and Social Responsibility

We are committed to fairness, integrity and doing the right thing. We believe in treating our people well and giving back to the
communities where our people work.

Safety and Well-being
The safety and well-being of colleagues is the Group’s first
priority. During the COVID-19 pandemic, we have taken all
extra precautions to keep our sites clean and sanitised and
have put in procedures to keep our workforce safe. Some sites
were initially closed and then gradually reopened under secure
and socially distanced conditions. Those employees who could
work from home did so.

The Group promotes a positive health and safety culture
throughout the business to ensure that all our people consider
health, safety and welfare issues while at work. A workforce that
is safe and physically & mentally healthy is key to the success
of the Group. All new employees receive in-house health and
safety training with further training undertaken as the employee
role or need requires. All our processes and procedures are
reviewed regularly by an external agency.

Diversity and Gender
Building a diverse workforce and maintaining an inclusive
workplace is vitally important to the Group. This ensures
everyone feels welcome and valued. As a Group we strive to
eliminate any gender bias in our pay and employment policies
and practices. We have a robust recruitment policy that
the Group will recruit, train and reward based on merit and
provide opportunities for our employees to fulfil their ambitions
regardless of gender.

Our People
Growing our business generates opportunities for our
employees and creates value for our shareholders and
stakeholders. Our focus is to create a high-performance
entrepreneurial culture through effective employee engagement,
people development plans and effective resource management.
Our people are our key asset. The Group’s performance
and its success within our marketplace are directly related to
the effectiveness of our people, who deliver the high-quality
products and provide exceptional services. The Group aims to
attract, retain and motivate the highest calibre of employees.

We recognise highly competent and engaged staff is key for
customers. Our customers are central to our success and the
day to day relationships staff have with customers is key. Many
of these relationships have been built over many years so it is
important that we maintain a high employee retention rate.

A variety of methods are used to engage with employees.
Under normal circumstances, this includes office and team
meetings and an annual in-house conference. During the
COVID-19 pandemic, we have primarily engaged through
online communications and virtual meetings. We use one or
more of these channels to brief employees about our business
performance and financial and economic factors affecting us.

The Group has policies for dealing with gifts, hospitality, bribery,
corruption, modern slavery, whistle-blowing and inside information.

Training and Development
Developing talent and supporting diversity across our Group
helps to ensure that we have the best teams motivated to
deliver our goals. In an industry that is keen to attract young
talent, development schemes allow the Group to retain and
nurture new staff. The Group has need-focused on recruiting
younger staff to ensure the skills are transferred but also to help
with succession planning. A number of the acquisitions recently
made have had young management teams who we hope will
develop over time to provide the talent the Group needs as
growth continues.

Reward and Recognition
Key to the retention of our employees is recognising and
rewarding their hard work. Our reward strategy aims to align
the interests of the employees and the Company. As a sales
organisation, the rewards are based on bonus/commission
based on sales achieved for our sales representatives. As part
of the IPO, staff that had been with the Group for more than 2
years received options over shares to ensure staff interests are
aligned with the Group. LTIP awards were also granted during
the year.

Community and Social
The communities where our offices and premises are based
are important to us and we try to encourage our employees
to make a difference within our local communities by being
involved in local charities. Most of our financial contributions to
charities come from the efforts and personal involvement of our
employees. During the year ended 31 March 2021 the Company
made donations of £4,899 to charities (2020: £14,283). In
addition, we have set up the Brickability Group Foundation
which will raise funds to support charities close to the Group’s
areas of operation.

Ethics and Relationships
Our vision to be a leading specialist supplier in the house-
building sector will only be maintained through a culture of
honesty, integrity and openness and by respecting human rights
and the interests of our employees, customers and third parties.

Relations with Customers
The Group is committed to putting its customers at the heart of
everything it does by providing high quality products and service.
All employees are expected to behave respectfully and honestly
in all their dealings with customers and the general public.

Relations with Suppliers
The Group expects its suppliers to adhere to business principles
consistent with the Group’s own. Suppliers are expected
to adopt and implement acceptable health and safety,
environmental, product quality, labour, human rights, social and
legal standards. Conformance to these standards is assessed
by on-site supplier visits on a regular basis.

Environmental
The Group is dedicated to being environmentally responsible through our commitment to eliminate waste and wasteful practices.
We strive for operational excellence whilst reducing environmental impact. Policies are designed and implemented to reduce
damage that might be caused by the Group’s activities. Initiatives to reduce the Group’s impact on the environment include the
recycling of waste, reducing carbon emissions and utilisation of recyclable packaging materials.

Carbon Dioxide Equivalent (CO2e) Tonnes

2021

2020

Scope 1

Scope 2

94.8

22.3

25.8

29.6

Intensity
Tonnes of CO2e from scope 1 and 2 sources per £m of turnover

2.00

0.79

Brick-ability Limited, being the largest subsidiary, has reported
on all the emissions’ sources required under the Companies Act
2006 (Strategic Report and Directors Reports) Regulation 2013.
Other parts of the Group are outside the reporting requirement.
Scope 1 and 2 emissions are calculated using the UK Government
Conversion Factors for Company Reporting 2021 on an operational
control basis. 35% (2020: 86%) of Scope 1 and 2 data is from
measured sources, with the remainder extrapolated from distance
travelled. The increase in Scope 1 in 2021 follows the addition of two
lorries used for distribution from the Alfiam warehouse.

The Strategic Report on pages 4 to 29 was reviewed and approved by the Board on 4 August 2021.

Alan Simpson
Chief Executive Officer

S T R A T E G I C R E P O R T

Board of Directors
Board of Directors

JOHN RICHARDS
JOHN RICHARDS
Non-Executive Chairman
Non-Executive Chairman

ALAN SIMPSON
ALAN SIMPSON
Chief Executive Officer
Chief Executive Officer

MIKE GANT
MIKE GANT
Chief Financial Officer
Chief Financial Officer

CLIVE NORMAN

Non-Executive Director

DAVID SIMPSON

Non-Executive Director

GILES BEALE

Non-Executive Director

John Richards joined the building
John Richards joined the building
materials industry after serving
materials industry after serving
a graduate traineeship with the
a graduate traineeship with the
Delta Engineering Group. He
Delta Engineering Group. He
served at Ibstock Brick for 31 years
served at Ibstock Brick for 31 years
as Sales and Marketing Director,
as Sales and Marketing Director,
Director and General Manager
Director and General Manager
and as Managing Director of
and as Managing Director of
several of the group’s subsidiaries.
several of the group’s subsidiaries.
He now serves as Chairman of
He now serves as Chairman of
ADF, a leading supplier of trailers
ADF, a leading supplier of trailers
and logistics to the TV and film
and logistics to the TV and film
industry, Chairman of JR and M
industry, Chairman of JR and M
Investments, a supplier of finance
Investments, a supplier of finance
to contractors, and is a Director of
to contractors, and is a Director of
Birmingham Moseley Rugby Club.
Birmingham Moseley Rugby Club.
John joined the Board in March
John joined the Board in March
2018 as Chairman.
2018 as Chairman.

Alan Simpson joined Building
Alan Simpson joined Building
Materials Distribution with Taylor
Materials Distribution with Taylor
Maxwell in 1983 and five years
Maxwell in 1983 and five years
later moved to Brick-ability. He
later moved to Brick-ability. He
became Sales Director and a
became Sales Director and a
shareholder, graduating to the
shareholder, graduating to the
position of Managing Director.
position of Managing Director.
He founded Towelrads, Frazer
He founded Towelrads, Frazer
Simpson and FSN Doors, all of
Simpson and FSN Doors, all of
which are now part of the Group.
which are now part of the Group.
Alan became a Director in
Alan became a Director in
1996 before stepping up to
1996 before stepping up to
Chief Executive Officer of the
Chief Executive Officer of the
Group following the successful
Group following the successful
management buyout of
management buyout of
Peter Milton, the founder of
Peter Milton, the founder of
the Brickability business, in
the Brickability business, in
September 2016.
September 2016.

Mike is a Chartered
Mike is a Chartered
Management Accountant with
Management Accountant with
an MBA from Nottingham
an MBA from Nottingham
Business School. Prior to joining,
Business School. Prior to joining,
he served as Group CFO at
he served as Group CFO at
Walker Greenbank PLC. Mike is
Walker Greenbank PLC. Mike is
a highly experienced CFO and
a highly experienced CFO and
brings a breadth of financial,
brings a breadth of financial,
strategic and M&A experience
strategic and M&A experience
to the Group from his previous
to the Group from his previous
roles at Bass plc, Marstons plc,
roles at Bass plc, Marstons plc,
Geest plc, Constellation Brands
Geest plc, Constellation Brands
Inc, Britvic plc and Walker
Inc, Britvic plc and Walker
Greenbank plc. Mike joined the
Greenbank plc. Mike joined the
Board in April 2021.
Board in April 2021.

Our Board of Directors has exceptional
Our Board of Directors has exceptional
experience within the supply and manufacture
experience within the supply and manufacture
of building materials for the construction industry.
of building materials for the construction industry.
Within the Group businesses there is a large pool
Within the Group businesses there is a large pool
of talented people who bring dynamism and
of talented people who bring dynamism and
growth to our operations.
growth to our operations.

Clive Norman has over 30 years’

experience in the radiator import

and service business throughout

both Europe and the UK. As

the Vice-President of Delonghi

Heating and CEO of Ferroli, a

commercial producer of boilers,

radiators, towelrails and air

conditioning, he oversaw sales

growth to substantial numbers.

Clive joined the Board in

March 2018.

David Simpson, an Accountant

by profession, has significant

experience in the housebuilding

sector, having worked with

luxury home developer, Millgate

for over 17 years, including as

Managing Director for nine

years. He was appointed to the

Executive Committee Board

of Countryside Properties plc

from 2014 to 2018, following

its merger with Millgate. David

joined the Board in July 2019.

Giles Beale, a Solicitor by

profession, has over 30 years’

experience of working with listed

and quoted companies and

their corporate governance. As

a Corporate Lawyer he also has

significant experience of mergers

and acquisitions and related

matters both domestically and

internationally. He is a Director

and Trustee of the Kairos

Community Trust and a Freeman

of the City of London. Giles joined

the Board in August 2019.

Number of Meetings Held

J Richards (Chairman)

A Simpson (CEO)

M Gant (CFO)*

G Beale (Non-Executive)

C Norman (Non-Executive)

D Simpson (Non-Executive)**

Board

N/A

Audit

Committee

Remuneration

Committee

Nomination

Committee

N/A

* Mike Gant joined the Board in April 2021 and therefore attended meetings prior to that date as a guest.

** David Simpson was unable to make one meeting due to a diary conflict.

30
30

C O R P O R A T E G O V E R N A N C E

CLIVE NORMAN
CLIVE NORMAN
Non-Executive Director
Non-Executive Director

DAVID SIMPSON
DAVID SIMPSON
Non-Executive Director
Non-Executive Director

GILES BEALE
GILES BEALE
Non-Executive Director
Non-Executive Director

Clive Norman has over 30 years’
Clive Norman has over 30 years’
experience in the radiator import
experience in the radiator import
and service business throughout
and service business throughout
both Europe and the UK. As
both Europe and the UK. As
the Vice-President of Delonghi
the Vice-President of Delonghi
Heating and CEO of Ferroli, a
Heating and CEO of Ferroli, a
commercial producer of boilers,
commercial producer of boilers,
radiators, towelrails and air
radiators, towelrails and air
conditioning, he oversaw sales
conditioning, he oversaw sales
growth to substantial numbers.
growth to substantial numbers.
Clive joined the Board in
Clive joined the Board in
March 2018.
March 2018.

David Simpson, an Accountant
David Simpson, an Accountant
by profession, has significant
by profession, has significant
experience in the housebuilding
experience in the housebuilding
sector, having worked with
sector, having worked with
luxury home developer, Millgate
luxury home developer, Millgate
for over 17 years, including as
for over 17 years, including as
Managing Director for nine
Managing Director for nine
years. He was appointed to the
years. He was appointed to the
Executive Committee Board
Executive Committee Board
of Countryside Properties plc
of Countryside Properties plc
from 2014 to 2018, following
from 2014 to 2018, following
its merger with Millgate. David
its merger with Millgate. David
joined the Board in July 2019.
joined the Board in July 2019.

Giles Beale, a Solicitor by
Giles Beale, a Solicitor by
profession, has over 30 years’
profession, has over 30 years’
experience of working with listed
experience of working with listed
and quoted companies and
and quoted companies and
their corporate governance. As
their corporate governance. As
a Corporate Lawyer he also has
a Corporate Lawyer he also has
significant experience of mergers
significant experience of mergers
and acquisitions and related
and acquisitions and related
matters both domestically and
matters both domestically and
internationally. He is a Director
internationally. He is a Director
and Trustee of the Kairos
and Trustee of the Kairos
Community Trust and a Freeman
Community Trust and a Freeman
of the City of London. Giles joined
of the City of London. Giles joined
the Board in August 2019.
the Board in August 2019.

Number of Meetings Held

J Richards (Chairman)

A Simpson (CEO)

M Gant (CFO)*

G Beale (Non-Executive)

C Norman (Non-Executive)

D Simpson (Non-Executive)**

Board

N/A

Audit
Audit
Committee
Committee

Remuneration
Remuneration
Committee
Committee

Nomination
Nomination
Committee
Committee

N/A

* Mike Gant joined the Board in April 2021 and therefore attended meetings prior to that date as a guest.
** David Simpson was unable to make one meeting due to a diary conflict.

C O R P O R A T E G O V E R N A N C E

31
31

Group Management Board

JOHN RICHARDS
Non-Executive Chairman

ALAN SIMPSON
Chief Executive Officer

MIKE GANT
Chief Financial Officer

John Richards joined the building
materials industry after serving
a graduate traineeship with the
Delta Engineering Group. He
served at Ibstock Brick for 31 years
as Sales and Marketing Director,
Director and General Manager
and as Managing Director of
several of the group’s subsidiaries.
He now serves as Chairman of
ADF, a leading supplier of trailers
and logistics to the TV and film
industry, Chairman of JR and M
Investments, a supplier of finance
to contractors, and is a Director of
Birmingham Moseley Rugby Club.
John joined the Board in March
2018 as Chairman.

Alan Simpson joined Building
Materials Distribution with Taylor
Maxwell in 1983 and five years
later moved to Brick-ability. He
became Sales Director and a
shareholder, graduating to the
position of Managing Director.
He founded Towelrads, Frazer
Simpson and FSN Doors, all of
which are now part of the Group.
Alan became a Director in
1996 before stepping up to
Chief Executive Officer of the
Group following the successful
management buyout of
Peter Milton, the founder of
the Brickability business, in
September 2016.

Mike is a Chartered Management
Accountant with an MBA from
Nottingham Business School. Prior
to joining, he served as Group
CFO at Walker Greenbank PLC.
Mike is a highly experienced CFO
and brings a breadth of financial,
strategic and M&A experience to
the Group from his previous roles at
Bass plc, Marstons plc, Geest plc,
Constellation Brands Inc, Britvic plc
and Walker Greenbank plc. Mike
joined the Board in April 2021.

SIMON MELLOR
Managing Director
within Bricks and
Building Materials
Division

Simon Mellor has over 30 years’
experience in the brick market
having joined the industry in
1985. He first gained experience
in brick manufacturing at
Steetley Brick & Redland Brick as
a Regional Sales Manager. He
joined Brickability in 1995 as
Wales Sales Manager and was
appointed Managing Director of
The Matching Brick Company in
2007 and of Brickability Limited
in 2009. During his career with
Brickability, Simon has been
responsible for overseeing a
number of acquisitions and
developing relationships and
trading agreements with
European suppliers including
ongoing product development
to satisfy opportunities and
product shortages in the UK.

Simon Pearson has over 35
years of construction and
roofing sector experience,
having first joining the
industry in 1981 and setting
up his first roofing business
in 1984. He formed Crest
Building Products in 1989 and
Crest Roofing in 1993, which
became part of the Group in
2018 and has been Managing
Director of the Roofing
Division since.

PAUL HAMILTON
Managing Director
of Heating, Plumbing
and Joinery Division

SIMON PEARSON
Managing Director of
Roofing Services Division

ARNOLD VAN HUET
Managing Director
of Crest Group

The Management Board
is responsible for the
day to day operations
of the Group. The
members are drawn from
key managers within
individual Brickability
Group businesses.

ANDY WILSON
Managing Director of
The Bespoke Brick Co.

Paul Hamilton has 17 years’
experience in the heating
and building supplier market.
He joined the Towelrads
business in 2004 and became
a shareholder and Director
in 2008. Paul has overseen
the growth of the Towelrads
business from sales of less
than £1 million to over £18
million a year. He led a
management buyout of the
Towelrads business in 2016
and was a founder of DSH
Flooring. Paul is currently
Divisional Managing Director
of the Heating Plumbing and
Joinery Group which includes
Towelrads, DSH Flooring,
Frazer Simpson, FSN Doors,
Forum Tiles, Radiators Valves
UK and Radiators Online.

Arnold Van Huet has over 35
years’ experience in the brick
and tile market across Europe,
having been heavily involved in
import and export markets and
the development of many brick
and roofing products in Europe.
He was the founder of the Crest
Group of companies over 30
years ago which became part
of the Group in 2018. He has
also held senior and board
positions in Desimpel Brick plc,
Hanson Brick and Enhobel plc.

Andy joined the brick industry
in 2004 after graduating with
2:1 BA Hons from Nottingham
Trent University. Andy served
as Regional Sales Manager for
Traditional Brick & Stone Ltd
before joining Wienerberger
as Southern Specification
Manager. In 2014 Andy
founded The Bespoke Brick
Company Limited, followed by
The Brick Slip Business Limited
in 2016. He later co- founded
William Wilson Properties
Ltd in April 2019. Andy joined
the Management Board of
Brickability Group in May 2019.

C O R P O R A T E G O V E R N A N C E

Corporate Governance

QCA CODE OF CORPORATE GOVERNANCE AND AIM RULE 26
The Board recognises the importance of good corporate governance and since our
flotation on AIM in August 2019 we have chosen to adopt the Quoted Companies
Alliance Corporate Governance Code (QCA Code) which we believe is the
appropriate recognised corporate governance code for the Company, consistent with
the majority of AIM companies, given its size, structure and stage of development.

DELIVER GROWTH
1. Establish a strategy and business model which
promote long-term value for shareholders.
2. Seek to understand and meet shareholder

needs and expectations.

We have ensured that presentations have
been made to both shareholders and
potential investors. Both have been able
to make comment to and question the
directors. We also regularly get questions
from private shareholders by email, all of
which are dealt with.

3. Take into account wider stakeholder and social
responsibilities and their implications for long-
term success.

4. Embed effective risk management, considering
both opportunities and threats, throughout
the organisation.

MAINTAIN A DYNAMIC
MANAGEMENT FRAMEWORK
5. Maintain the Board as a well-functioning,
balanced team led by the Chairman.

6. Ensure that between them the Directors have
the necessary up-to-date experience, skills
and capabilities.

All our Directors have expertise in the relevant
areas and we use our professional advisers to
ensure that their knowledge and skill sets are
kept up to date.

7. Evaluate Board performance based on clear and

relevant objectives, seeking continuous improvement.
We evaluate the Board’s performance against

the Company’s objectives laid out at the
time of IPO. This evaluation also extends
to performance in areas of compliance,
risk management, remuneration and
communication amongst others.

8. Promote a corporate culture that is based on

ethical values and behaviours.

The Board’s assessment is that the corporate
culture is consistent with ethical values
and behaviours.

9. Maintain governance structures and processes

that are fit for purpose and support good decision-
making by the Board.

BUILD TRUST
10. Communicate how the
Company is governed
and is performing by
maintaining a dialogue
with shareholders and other
relevant stakeholders.

The Group’s corporate governance culture will be
measured against the QCA Code fundamentals and
regularly reviewed with developments and changes
communicated to shareholders. The QCA Code is
built on the three fundamentals of delivering growth,
maintaining a dynamic management framework and
building trust. The Group’s Board is committed to
each one of the fundamentals, as it believes these will
support the Company’s medium to long-term success.

C O R P O R A T E G O V E R N A N C E

COMMITTEE CHAIRMAN
John Richards

OTHER MEMBERS
Giles Beale
Clive Norman
David Simpson

All members of the
Committee are non-executive
Directors of the Company
whose biographies are set out
on pages 30 to 31.

Report of the Nomination Committee
As Chairman of the Nomination Committee
(“the Committee”) and on behalf of the Board
I am pleased to present the report of the Committee
for the year ended 31 March 2021.

Meetings and Attendance

Member

John Richards (Chairman)

Giles Beale

Clive Norman

David Simpson

Meetings
Attended

1/1

The Committee meets as and
when required, but at least once a
year. The Chief Executive attends
as invited.

Duties
The Duties of the Committee are set out in terms of reference which are available
for inspection on the Company’s website at www.brickabilitygroupplc.com.
The terms of reference will be subject to an annual review by the Committee.

As well as considering succession planning for the Board, the Committee also
considers succession planning for senior executive positions. The Committee
is aware of gender and diversity issues and these are considered, amongst
other factors, when reviewing potential candidates for Board and other senior
management positions and determining their suitability for such positions.

Committee Activity During the Year
Following the sudden death of Stuart Overend in November 2020, the Committee
appointed an external search agency to identify suitable candidates for the
Chief Financial Officer’s role (CFO). A short list of candidates was prepared for
consideration and, following interviews, the Committee recommended to the
Board that Mike Gant should be appointed as interim CFO with the possibility of
this appointment becoming permanent in due course. The recommendation of the
Committee was approved by the Board in December 2020 with the appointment
being effective as from January 2021. An appropriate induction programme was
prepared by myself as Chairman in consultation with Mike Gant. Following a
recommendation made by the Committee, at a meeting in April 2021, Mike Gant
was appointed to the role permanently.

By order of the Board

John Richards
Chairman of the Nomination Committee

4 August 2021

Report of the Audit Committee
On behalf of the Board, I am pleased to present my report to you as Chair of the Audit
Committee for the financial year to 31 March 2021. This report provides shareholders
with an overview of the activities carried out by the Committee during the year.

Current Committee Members
David Simpson and Giles Beale are considered independent by the Board within the
meaning of the QCA Code. John Richards, Chairman and the Chairman of the Group
Management Board, is regarded by the Board as independent for the purposes of
membership of the Committee; his experience and role in liaising with shareholders
assists the Committee as his membership is considered both appropriate and beneficial.
Duties
The Duties of the Committee are set out in terms of reference which are available for
inspection on the Company’s website at www.brickabilitygroupplc.com. The terms of
reference will be subject to an annual review by the Committee.
Areas of focus for the year:
• Review of the interim results
• Consideration of key audit matters and
how they are addressed
• Reviewing significant accounting and
reporting judgements
• Going concern review
• Monitoring and reviewing the effectiveness
of the Group’s external audit
• Monitoring Auditor independence
• Meeting the external Auditor without
management present
• Considering the external audit report
• Reviewing the financial statements and
Annual Report

• Developing and implementing policy
on non-audit services provided by the
external Auditor
• Review of risk management and internal
control systems
• Reviewing the Group’s procedures for
detecting and preventing fraud, bribery
and the governance of anti-money
laundering systems and controls
• Financial Calendar/Audit timetable
• Review of ESG policies
• Delegated Authority Schedule
• Related Party Transactions Register

Risk Management and Internal Controls
The Board, assisted by the Audit Committee, is responsible for regularly reviewing the
operation and effectiveness of the Group’s internal controls. The internal control system is
designed to manage, rather than eliminate, the risk of failure to achieve business objectives.
The Group’s key internal control procedures include a review of the Group’s strategy and the
performance of subsidiaries. This involves a comprehensive system of reporting based on
variances to annual budgets, key performance indicators and regular forecasting.
The Audit Committee in partnership with the Board is responsible for reviewing the risk
management and internal control framework and ensuring that it operates effectively. The
Committee is satisfied that the internal control systems in place were operating effectively
during the period.
External Auditor
The Audit Committee monitors the relationship with the external Auditor, BDO LLP, to
ensure that Auditor independence and objectivity is maintained. As part of its review,
the Committee monitors the provision of non-audit services by the external Auditor. The
breakdown of fees between audit and non-audit services is provided on page 80 in note 9
to the financial statements. The non-audit fees for the year were £6,500 (2020: £333,649)
which was in relation to a review of the Company’s interim financial statements.
Management and the Chair of the Audit Committee liaise with the Auditor throughout the
year to ensure that if there are areas of significant risk, or other matters of audit relevance,
they are regularly communicated. The external Auditor prepares a plan for its audit of the
financial statements. The audit plan sets out the scope of the audit, areas to be targeted
and the audit timetable. The plan is reviewed and by the Committee. Following the audit, the
Auditor presents their findings to Audit Committee for discussion. No major areas of concern
were highlighted by the Auditor during the year.
BDO LLP has been the Group Auditor since the Company’s IPO on 20 August 2019; the
Company is not proposing to tender for external audit services in the near future. Having
reviewed the Auditor’s independence and performance to date, the Committee has
recommended to the Board that BDO LLP be re-appointed as the Group’s Auditor and a
resolution to this effect will be proposed at the forthcoming Annual General Meeting.

COMMITTEE CHAIRMAN
David Simpson

OTHER MEMBERS
Giles Beale
John Richards

Meetings and Attendance

Member

David Simpson (Chairman)

Giles Beale

John Richards

Meetings
Attended

4/4

The Committee meets at least twice a
year and during the year met four times.
The Chief Executive, Chief Financial
Officer and external Auditor attend
meetings as invited.

Going Concern
The Group is required to assess its
ability to trade as a going concern for a
period of 12 months from the period of
signing the annual financial statements.
The Committee reviewed the Board’s
assessment on pages 26 and 27 and
concluded that it remained appropriate to
continue to adopt the going concern basis
in preparing the financial statements.

Whistleblowing
The Group has in place a whistleblowing
policy which sets out the formal process
by which an employee of the Group
may, in confidence raise concerns about
possible improprieties in financial
reporting or other matters. No concerns
were raised during the period.

Anti-Bribery
The Group has in place an anti-bribery
and corruption policy which sets out a
zero-tolerance position and provides
information and guidance to those
working for the Group on how to
recognise and deal with bribery and
corruption matters. The Committee
relies upon assurances from senior
management in satisfying itself that the
current policy is operating effectively.
The Committee is satisfied that the policy
in place has been operating effectively
during the period.

By order of the Board

David Simpson
Chair of Audit Committee
4 August 2021

C O R P O R A T E G O V E R N A N C E

This image of our wonderful, Bespoke Brick
This image of our wonderful, Bespoke Brick
showroom gives some indication of the
showroom gives some indication of the
breadth of brick product range that we are
breadth of brick product range that we are
able to offer our customers. Product selection,
able to offer our customers. Product selection,
technical assistance and the start of the
technical assistance and the start of the
service delivery journey all take place here.
service delivery journey all take place here.

Report of the Remuneration Committee

On behalf of the Board, I am pleased to present my

report to you as Chair of the Remuneration Committee

for the financial year to 31 March 2021. The purpose

of this report is to provide shareholders with the

information necessary to understand our remuneration

policy, its linkage to the Group’s performance, strategy

and core values as well as providing a clear explanation

of how our Directors have been rewarded over the period.

Remuneration for executive and other

senior management include, where

Mergers, details of which are set out in the

Company’s admission document (available

appropriate, pensions, bonuses, incentive

at www.brickabilitygroupplc.com).

arrangements, share options and other

share-based awards. The Remuneration

Committee’s focus is to reward fairly and

responsibly with a remuneration policy that

supports and encourages senior managers

and Group employees generally with a

clear link to individual performance as well

as the financial health of the Company and

the interests of its shareholders as a whole.

The Group has historically grown

by acquisition through which it has

inherited several differing remuneration

arrangements often embedded by

contract. Growth by acquisition remains an

important part of the Company’s strategy.

The Committee considers it important,

subject to legal constraints, to establish a

consistent remuneration policy throughout

the Group.

The Directors believe that the success of the

Group depends to a significant degree on the

future performance of its senior management

team. The Board and the Committee also

recognise the importance of ensuring that

all Group employees remain well motivated

and identify closely with its success. The

Committee reviews information regarding

the remuneration and reward levels of other

Group employees to provide context when

considering remuneration policy and the

remuneration of the executive directors.

The Board has adopted the Quoted

Companies Alliance Corporate Governance

Code (QCA Code) and consider that the

QCA Code is most appropriate for the size,

scale and complexity of the Company. Where

the Board believes that a departure from the

QCA Code is warranted, an explanation

A member of the Group’s senior

is provided.

management team is party to an on-going

earn-out arrangement. A number are also

significant shareholders of the Company

and some are party to a concert party

identified by the Panel on Takeovers and

We recognise the importance of shareholder

views and their feedback on remuneration

policy and we welcome feedback from our

shareholders on the content of this report.

38
38

C O R P O R A T E G O V E R N A N C E

Report of the Remuneration Committee
Report of the Remuneration Committee
On behalf of the Board, I am pleased to present my
On behalf of the Board, I am pleased to present my
report to you as Chair of the Remuneration Committee
report to you as Chair of the Remuneration Committee
for the financial year to 31 March 2021. The purpose
for the financial year to 31 March 2021. The purpose
of this report is to provide shareholders with the
of this report is to provide shareholders with the
information necessary to understand our remuneration
information necessary to understand our remuneration
policy, its linkage to the Group’s performance, strategy
policy, its linkage to the Group’s performance, strategy
and core values as well as providing a clear explanation
and core values as well as providing a clear explanation
of how our Directors have been rewarded over the period.
of how our Directors have been rewarded over the period.

Remuneration for executive and other
Remuneration for executive and other
senior management include, where
senior management include, where
appropriate, pensions, bonuses, incentive
appropriate, pensions, bonuses, incentive
arrangements, share options and other
arrangements, share options and other
share-based awards. The Remuneration
share-based awards. The Remuneration
Committee’s focus is to reward fairly and
Committee’s focus is to reward fairly and
responsibly with a remuneration policy that
responsibly with a remuneration policy that
supports and encourages senior managers
supports and encourages senior managers
and Group employees generally with a
and Group employees generally with a
clear link to individual performance as well
clear link to individual performance as well
as the financial health of the Company and
as the financial health of the Company and
the interests of its shareholders as a whole.
the interests of its shareholders as a whole.

The Group has historically grown
The Group has historically grown
by acquisition through which it has
by acquisition through which it has
inherited several differing remuneration
inherited several differing remuneration
arrangements often embedded by
arrangements often embedded by
contract. Growth by acquisition remains an
contract. Growth by acquisition remains an
important part of the Company’s strategy.
important part of the Company’s strategy.
The Committee considers it important,
The Committee considers it important,
subject to legal constraints, to establish a
subject to legal constraints, to establish a
consistent remuneration policy throughout
consistent remuneration policy throughout
the Group.
the Group.

A member of the Group’s senior
A member of the Group’s senior
management team is party to an on-going
management team is party to an on-going
earn-out arrangement. A number are also
earn-out arrangement. A number are also
significant shareholders of the Company
significant shareholders of the Company
and some are party to a concert party
and some are party to a concert party
identified by the Panel on Takeovers and
identified by the Panel on Takeovers and

Mergers, details of which are set out in the
Mergers, details of which are set out in the
Company’s admission document (available
Company’s admission document (available
at www.brickabilitygroupplc.com).
at www.brickabilitygroupplc.com).

The Directors believe that the success of the
The Directors believe that the success of the
Group depends to a significant degree on the
Group depends to a significant degree on the
future performance of its senior management
future performance of its senior management
team. The Board and the Committee also
team. The Board and the Committee also
recognise the importance of ensuring that
recognise the importance of ensuring that
all Group employees remain well motivated
all Group employees remain well motivated
and identify closely with its success. The
and identify closely with its success. The
Committee reviews information regarding
Committee reviews information regarding
the remuneration and reward levels of other
the remuneration and reward levels of other
Group employees to provide context when
Group employees to provide context when
considering remuneration policy and the
considering remuneration policy and the
remuneration of the executive directors.
remuneration of the executive directors.

The Board has adopted the Quoted
The Board has adopted the Quoted
Companies Alliance Corporate Governance
Companies Alliance Corporate Governance
Code (QCA Code) and consider that the
Code (QCA Code) and consider that the
QCA Code is most appropriate for the size,
QCA Code is most appropriate for the size,
scale and complexity of the Company. Where
scale and complexity of the Company. Where
the Board believes that a departure from the
the Board believes that a departure from the
QCA Code is warranted, an explanation
QCA Code is warranted, an explanation
is provided.
is provided.

We recognise the importance of shareholder
We recognise the importance of shareholder
views and their feedback on remuneration
views and their feedback on remuneration
policy and we welcome feedback from our
policy and we welcome feedback from our
shareholders on the content of this report.
shareholders on the content of this report.

C O R P O R A T E G O V E R N A N C E

39
39

Report of the
Report of the
Remuneration
Remuneration
Committee
Committee

COMMITTEE CHAIRMAN
COMMITTEE CHAIRMAN
Giles Beale
Giles Beale

OTHER MEMBERS
OTHER MEMBERS
David Simpson
David Simpson
John Richards
John Richards

Giles Beale and David Simpson are
Giles Beale and David Simpson are
considered independent by the Board
considered independent by the Board
within the meaning of the QCA Code.
within the meaning of the QCA Code.
John Richards, Chairman and the
John Richards, Chairman and the
Chairman of the Group Management
Chairman of the Group Management
Board, is regarded by the Board as
Board, is regarded by the Board as
independent for the purposes of
independent for the purposes of
membership of the Committee; his
membership of the Committee; his
experience and role in liaising with
experience and role in liaising with
shareholders assists the Committee
shareholders assists the Committee
as his membership is considered both
as his membership is considered both
appropriate and beneficial. Giles Beale
appropriate and beneficial. Giles Beale
has chaired the Committee since
has chaired the Committee since
its establishment.
its establishment.

Meetings and Attendance
Meetings and Attendance

Member

Meetings
Meetings
Attended
Attended

Giles Beale (Chairman)

4/4

David Simpson

John Richards

4/4

The Committee meets at least twice a year
The Committee meets at least twice a year
and further as necessary to fulfil its role.
and further as necessary to fulfil its role.
Over the reporting period the Committee
Over the reporting period the Committee
met four times. Additional decisions were
met four times. Additional decisions were
taken by common consent following a due
taken by common consent following a due
exchange of information and views. Where
exchange of information and views. Where
required, the Chief Executive and Chief
required, the Chief Executive and Chief
Financial Officer attended or contributed
Financial Officer attended or contributed
to the Committee’s deliberations, in each
to the Committee’s deliberations, in each
case by invitation.
case by invitation.

40
40

Duties
Duties
The duties of the Committee are set out in its terms of
The duties of the Committee are set out in its terms of
reference which are available on the Company’s website at
reference which are available on the Company’s website at
www.brickabilitygroupplc.com. The terms of reference are reviewed annually.
www.brickabilitygroupplc.com. The terms of reference are reviewed annually.

The Committee’s principal role is to assist the Board in ensuring that the Group’s
The Committee’s principal role is to assist the Board in ensuring that the Group’s
remuneration policy rewards fairly and responsibly with a clear link to individual and
remuneration policy rewards fairly and responsibly with a clear link to individual and
corporate performance.
corporate performance.

Key items of business considered by the
Key items of business considered by the
Committee during the year include:
Committee during the year include:
• determining the remuneration of
• determining the remuneration of
executive Directors;
executive Directors;
• monitoring and recommending, where
• monitoring and recommending, where
relevant, the remuneration of the Group’s
relevant, the remuneration of the Group’s
wider senior management team; and
wider senior management team; and
• the oversight and administration of the
• the oversight and administration of the
Group’s share plans.
Group’s share plans.

No member of the Committee has a
No member of the Committee has a
personal interest (save as a shareholder
personal interest (save as a shareholder
of the Company) in the outcome of its
of the Company) in the outcome of its
decisions and no Director is party to a
decisions and no Director is party to a
decision or recommendation regarding their
decision or recommendation regarding their
own remuneration. The Committee gives
own remuneration. The Committee gives
due regard to the interest of shareholders
due regard to the interest of shareholders
and the financial and commercial health
and the financial and commercial health
of the Company. Addleshaw Goddard LLP
of the Company. Addleshaw Goddard LLP
provided advice during the period.
provided advice during the period.

The determination of executive Directors’
The determination of executive Directors’
annual remuneration, including bonus and
annual remuneration, including bonus and
related performance criteria, is undertaken by
related performance criteria, is undertaken by
the Committee. The remuneration packages
the Committee. The remuneration packages
of our senior management team are designed
of our senior management team are designed
to attract, motivate and retain executives of
to attract, motivate and retain executives of
the highest calibre and to reward them for
the highest calibre and to reward them for
enhancing shareholder value.
enhancing shareholder value.

In each case these include some or all of
the following elements:

• basic salary and benefits;
• basic salary and benefits;
• annual bonus and/or commission
• annual bonus and/or commission
arrangements;
arrangements;
• share plans including awards under the
• share plans including awards under the
Group’s LTIP; and
Group’s LTIP; and
• pension arrangements (all of which are
• pension arrangements (all of which are
defined contribution or cash in lieu).
defined contribution or cash in lieu).

We consider it important that a significant
We consider it important that a significant
proportion of the executive and senior
proportion of the executive and senior
management teams’ remuneration
management teams’ remuneration
should be performance related with
should be performance related with
the objective of enhancing shareholder
the objective of enhancing shareholder
returns as well as the long-term financial
returns as well as the long-term financial
health and stability of the Company. This
health and stability of the Company. This
includes, as appropriate, the exploitation
includes, as appropriate, the exploitation
of Group synergies, the development and
of Group synergies, the development and
enhancement of our potential and existing
enhancement of our potential and existing
senior management team, specific unit
senior management team, specific unit
performance and the upholding of our
performance and the upholding of our
values and culture. Objectives for individuals
values and culture. Objectives for individuals
will vary depending upon their role within
will vary depending upon their role within
the Group but we consider that a consistent,
the Group but we consider that a consistent,
transparent remuneration program based
transparent remuneration program based
upon common principles is important to
upon common principles is important to
ensure that overall Group performance and
ensure that overall Group performance and
shareholder value is enhanced.
shareholder value is enhanced.

Share Plans

The Committee is responsible for the administration of the

Company’s share plans, being the Company’s employee share

option plan (CSOP) and a long-term incentive plan (LTIP). Where

appropriate grants under the CSOP might also be utilised although none

have been made since the Committee’s establishment and none are currently

envisaged. Policy regarding the administration of grants under these plans may develop

to accommodate changing needs of the Group.

Bonus

Pensions

During the period an annual bonus plan was adopted which recognises the emphasis on rewarding key Group employees with competitive

performance related remuneration. A maximum of 125% of base salary can be paid as a bonus. The implementation of this plan remains under

review and participation is by invitation only, reflecting both the inherited contractual terms of employees where relevant and our emphasis on

performance. Its purpose is to enable the senior management team to attract and retain key employees to the Group in a competitive market for

talent whilst ensuring that participants are subject to demanding criteria that best reflect the interests of the Group and the Company’s shareholders.

Members of the Group operate several defined contribution pension schemes. In addition, there is an auto enrolment Group wide defined

contribution pension scheme. Under these schemes contributions are based upon base salary with a contribution of 5% per employee and

3% by the employer. In certain cases, the employer’s proportion (or cash in lieu where applicable) rise to 7.5% or 10%.

C O R P O R A T E G O V E R N A N C E

Share Plans
Share Plans
The Committee is responsible for the administration of the
The Committee is responsible for the administration of the
Company’s share plans, being the Company’s employee share
Company’s share plans, being the Company’s employee share
option plan (CSOP) and a long-term incentive plan (LTIP). Where
option plan (CSOP) and a long-term incentive plan (LTIP). Where
appropriate grants under the CSOP might also be utilised although none
appropriate grants under the CSOP might also be utilised although none
have been made since the Committee’s establishment and none are currently
have been made since the Committee’s establishment and none are currently
envisaged. Policy regarding the administration of grants under these plans may develop
envisaged. Policy regarding the administration of grants under these plans may develop
to accommodate changing needs of the Group.
to accommodate changing needs of the Group.

Bonus
Bonus
During the period an annual bonus plan was adopted which recognises the emphasis on rewarding key Group employees with competitive
During the period an annual bonus plan was adopted which recognises the emphasis on rewarding key Group employees with competitive
performance related remuneration. A maximum of 125% of base salary can be paid as a bonus. The implementation of this plan remains under
performance related remuneration. A maximum of 125% of base salary can be paid as a bonus. The implementation of this plan remains under
review and participation is by invitation only, reflecting both the inherited contractual terms of employees where relevant and our emphasis on
review and participation is by invitation only, reflecting both the inherited contractual terms of employees where relevant and our emphasis on
performance. Its purpose is to enable the senior management team to attract and retain key employees to the Group in a competitive market for
performance. Its purpose is to enable the senior management team to attract and retain key employees to the Group in a competitive market for
talent whilst ensuring that participants are subject to demanding criteria that best reflect the interests of the Group and the Company’s shareholders.
talent whilst ensuring that participants are subject to demanding criteria that best reflect the interests of the Group and the Company’s shareholders.

Pensions
Pensions
Members of the Group operate several defined contribution pension schemes. In addition, there is an auto enrolment Group wide defined
Members of the Group operate several defined contribution pension schemes. In addition, there is an auto enrolment Group wide defined
contribution pension scheme. Under these schemes contributions are based upon base salary with a contribution of 5% per employee and
contribution pension scheme. Under these schemes contributions are based upon base salary with a contribution of 5% per employee and
3% by the employer. In certain cases, the employer’s proportion (or cash in lieu where applicable) rise to 7.5% or 10%.
3% by the employer. In certain cases, the employer’s proportion (or cash in lieu where applicable) rise to 7.5% or 10%.

C O R P O R A T E G O V E R N A N C E

41
41

Report of the
Report of the
Remuneration
Remuneration
Committee
Committee

Annual Remuneration Report
Annual Remuneration Report
The information on pages 42 and 43 has been audited.
The information on pages 42 and 43 has been audited.

Directors’ Total Remuneration
Directors’ Total Remuneration

Executive Directors’ Remuneration
Executive Directors’ Remuneration
Each individual executive Directors’ total remuneration paid over the
Each individual executive Directors’ total remuneration paid over the
period by Group members is summarised below together with a total
period by Group members is summarised below together with a total
comparison for the financial year ended 31 March 2020.
comparison for the financial year ended 31 March 2020.

* Stuart Overend passed away in November 2020.

Non-executive Directors’ Remuneration
Non-executive Directors’ Remuneration
Each individual non-executive Directors’ total remuneration paid over the period by Group members is summarised below together with a
Each individual non-executive Directors’ total remuneration paid over the period by Group members is summarised below together with a
total comparison for the financial year ended 31 March 2020. No such change occurred in the period save that Mr John Richards’ annual
total comparison for the financial year ended 31 March 2020. No such change occurred in the period save that Mr John Richards’ annual
fee was increased during the year to £100,000 from £75,000 in recognition of his significant on-going time contribution to the Group.
fee was increased during the year to £100,000 from £75,000 in recognition of his significant on-going time contribution to the Group.

Directors’ Loans
Directors’ Loans
Prior to the Company’s IPO, a Group company provided a loan to Mr Overend of £838,584 and to Mr Richards of £139,764 to
Prior to the Company’s IPO, a Group company provided a loan to Mr Overend of £838,584 and to Mr Richards of £139,764 to
purchase shares in the Group as disclosed in the Company’s admission document. Each loan is unsecured and interest free and
purchase shares in the Group as disclosed in the Company’s admission document. Each loan is unsecured and interest free and
repayable on the sale of the relevant shares in the Company.
repayable on the sale of the relevant shares in the Company.

Directors’ Interest in Shares
Directors’ Interest in Shares
The beneficial interests of Directors, and persons connected with them, as at 31 March 2021 in the ordinary shares of the Company
The beneficial interests of Directors, and persons connected with them, as at 31 March 2021 in the ordinary shares of the Company
(excluding share options) were are follows:
(excluding share options) were are follows:

Held at 31 March 2020

Acquired in the year

Held at 31 March 2021

Alan Simpson

John Richards

Clive Norman

David Simpson

50,453,504

5,919,733

5,567,871

151,500

50,453,504

5,919,733

5,567,871

151,500

Since 31 March 2021, the following directors, and persons connected with them, have sold shares in the recent oversubscribed

fundraise and share placement. Their holdings as at 4 August 2021 are as follows:

Held at 31 March 2021

Sold

Held at 4 August 2021

50,453,504

5,919,733

5,567,871

17,007,146

1,872,048

1,760,775

33,446,358

4,047,685

3,807,096

Alan Simpson

John Richards

Clive Norman

Share Plans - LTIP

Date of Award

Number of Shares

(£000)

% of salary

Face value at grant

End of three-year

performance period

Stuart Overend

16/11/20

747,283

560

125

01/10/23

Face value of awards at the date of grant is calculated based on the closing share price of 75p per ordinary share.

The options are exercisable at the nominal price of £0.01 and have vesting conditions tied to adjusted EBITDA and total shareholder

return, with each award split equally between the two performance conditions. Vesting will occur on a straight-line basis on

achieving 18% (equivalent to 6% annually) to 30% (equivalent to 10% annually) of the relevant performance condition over the

performance period. There is no vesting if the relevant target is not met but a 50% vesting if the initial 18% hurdle is met with a

proportionate additional vesting up to 100% at the 30% threshold being met.

Following Mr Overend’s death in November 2020, the Committee agreed that up to a third of his shares would vest, should the

performance conditions be met over a 12 month performance period to 1 October 2021.

Grants under the LTIP are the subject of discretionary good/bad leaver provisions and malus and clawback arrangements.

Share Plans - CSOP

Date of Award

Number of Shares

the year

Exercised

Forfeited during

Balance at

31 March 2021

Stuart Overend*

02/08/19

72,443

(41,283)

31,160

*Stuart Overend passed away in November 2020 and his awards were pro-rated accordingly during the year.

The CSOP was adopted on 2 August 2019. Options are exercisable at an exercise

price of 41p between the third and tenth anniversary of the grant subject to the

participant remaining an employee but are not subject to performance

conditions. Under the terms of the scheme, Mr Overend’s

pro-rated options are exercisable for a period of up to

12 months following his death.

42
42

C O R P O R A T E G O V E R N A N C E

Executive DirectorSalary or fee£’000Taxable benefits£’000Bonus£’000Pension contributions£’000Total Year ended 31 March 2021£’000Total Year ended 31 March 2020£’000Alan Simpson4324200-636463Stuart Overend*201--21222341Non-executive DirectorSalary or fee£’000Taxable benefits£’000Bonus£’000Pension contributions£’000Total Year ended 31 March 2021£’000Total Year ended 31 March 2020£’000John Richards83---8359David Simpson55 ---5532Giles Beale55---5532Clive Norman50---5029Executive DirectorSalary or fee£’000Taxable benefits£’000Bonus£’000Pension contributions£’000Total Year ended 31 March 2021£’000Total Year ended 31 March 2020£’000Alan Simpson4324200-636463Stuart Overend*201--21222341Non-executive DirectorSalary or fee£’000Taxable benefits£’000Bonus£’000Pension contributions£’000Total Year ended 31 March 2021£’000Total Year ended 31 March 2020£’000John Richards83---8359David Simpson55 ---5532Giles Beale55---5532Clive Norman50---5029
Since 31 March 2021, the following directors, and persons connected with them, have sold shares in the recent oversubscribed
Since 31 March 2021, the following directors, and persons connected with them, have sold shares in the recent oversubscribed
fundraise and share placement. Their holdings as at 4 August 2021 are as follows:
fundraise and share placement. Their holdings as at 4 August 2021 are as follows:

Held at 31 March 2021

Sold

Held at 4 August 2021

50,453,504

5,919,733

5,567,871

17,007,146

1,872,048

1,760,775

33,446,358

4,047,685

3,807,096

Alan Simpson

John Richards

Clive Norman

Share Plans - LTIP
Share Plans - LTIP

Date of Award

Number of Shares

Face value at grant
(£000)

% of salary

End of three-year
End of three-year
performance period
performance period

Stuart Overend

16/11/20

747,283

560

125

01/10/23

Face value of awards at the date of grant is calculated based on the closing share price of 75p per ordinary share.
Face value of awards at the date of grant is calculated based on the closing share price of 75p per ordinary share.

The options are exercisable at the nominal price of £0.01 and have vesting conditions tied to adjusted EBITDA and total shareholder
The options are exercisable at the nominal price of £0.01 and have vesting conditions tied to adjusted EBITDA and total shareholder
return, with each award split equally between the two performance conditions. Vesting will occur on a straight-line basis on
return, with each award split equally between the two performance conditions. Vesting will occur on a straight-line basis on
achieving 18% (equivalent to 6% annually) to 30% (equivalent to 10% annually) of the relevant performance condition over the
achieving 18% (equivalent to 6% annually) to 30% (equivalent to 10% annually) of the relevant performance condition over the
performance period. There is no vesting if the relevant target is not met but a 50% vesting if the initial 18% hurdle is met with a
performance period. There is no vesting if the relevant target is not met but a 50% vesting if the initial 18% hurdle is met with a
proportionate additional vesting up to 100% at the 30% threshold being met.
proportionate additional vesting up to 100% at the 30% threshold being met.

Following Mr Overend’s death in November 2020, the Committee agreed that up to a third of his shares would vest, should the
Following Mr Overend’s death in November 2020, the Committee agreed that up to a third of his shares would vest, should the
performance conditions be met over a 12 month performance period to 1 October 2021.
performance conditions be met over a 12 month performance period to 1 October 2021.
Grants under the LTIP are the subject of discretionary good/bad leaver provisions and malus and clawback arrangements.
Grants under the LTIP are the subject of discretionary good/bad leaver provisions and malus and clawback arrangements.

Share Plans - CSOP
Share Plans - CSOP

Date of Award

Number of Shares

Forfeited during
the year

Exercised

Balance at
Balance at
31 March 2021
31 March 2021

Stuart Overend*

02/08/19

72,443

(41,283)

31,160

*Stuart Overend passed away in November 2020 and his awards were pro-rated accordingly during the year.
*Stuart Overend passed away in November 2020 and his awards were pro-rated accordingly during the year.

The CSOP was adopted on 2 August 2019. Options are exercisable at an exercise
The CSOP was adopted on 2 August 2019. Options are exercisable at an exercise
price of 41p between the third and tenth anniversary of the grant subject to the
price of 41p between the third and tenth anniversary of the grant subject to the
participant remaining an employee but are not subject to performance
participant remaining an employee but are not subject to performance
conditions. Under the terms of the scheme, Mr Overend’s
conditions. Under the terms of the scheme, Mr Overend’s
pro-rated options are exercisable for a period of up to
pro-rated options are exercisable for a period of up to
12 months following his death.
12 months following his death.

C O R P O R A T E G O V E R N A N C E

43
43

Remuneration Policy
The Remuneration Policy was created and approved at the Company’s IPO in August 2019 and has been carried through
to this financial year. The tables below summarise the key elements of the policy.

Purpose and link to
strategy

Operation

Maximum potential value

Performance conditions

To be reviewed on an annual basis having
regard to our competitors, industry and needs
as well as pay levels elsewhere within the
Group, its size and complexity.

Total salaries paid during the
period are set out on page
42. Changes in the scope
of responsibilities or role may
require an adjustment to
salary levels.

Assessment of personal and
corporate performance.

A car allowance, private medical insurance,
death in service insurance and reimbursement
for reasonable business expenses. Other
benefits may be offered in line with market
practice if it is considered appropriate to do so.

Our policy is to provide a contribution (or cash
allowance in lieu) to a personal pension plan
as a capped proportion of basic salary if it is
considered appropriate to do so.

The current performance targets were
adopted during the period but the current
financial year will be the first year of the current
plan’s implementation.

Grants may not normally exceed 200% of the
grantee’s base salary.

Grants are the subject of discretionary good
leaver/bad leaver provisions and, in the case of
the LTIP, malus and clawback provisions.

Further details of the share plans and their
operation are set out on page 43 and in note 36
of the financial statements.

The maximum potential value
is the cost to the Company in
providing these benefits.

Not applicable.

The Chief Executive Officer
does not receive a pension
contribution or allowance.
The Chief Financial Officer
receives a cash allowance
in lieu equal to 7.5% of his
basic salary.

Each executive Director is
entitled to receive a cash
bonus of up to 125% of basic
salary on the attainment of
performance objectives.

Subject to exercise or vesting,
the market value of the shares
that are the subject of the
grant less any cost payable
by the grantee on exercise
or vesting. Under the LTIP,
a grantee maybe entitled to
a dividend equivalent to the
value of dividends paid on
a vested share had it been
in issue from the date of
the grant.

Not applicable.

The Remuneration Committee
reviews performance
measures annually.

Options granted under the Company
share plans may be subject to
performance conditions. Options
granted under the LTIP during the
period are all subject to performance
conditions detailed below. No options
under the CSOP were granted during
the period.

Our policy for grants under the
LTIP is that they are the subject
of performance conditions which
will be measured over a three-year
period. Performance conditions are
divided equally between two metrics;
compound annual growth in adjusted
EBITDA and compound annual
growth in total shareholder return.

Base salary
The provision of a
competitive, fixed salary
that attracts and retains
key individuals reflecting
their experience and role.

Benefits
To provide market benefits
on a cost-effective basis.

Pension
To assist executive
Directors in providing
for retirement where this
is considered an aid in
attracting and retaining
the individual.

Annual bonus
To recognise an executive’s
achievement of annual
objectives that support
the Group’s strategy and
financial well-being.

Share plans
To encourage value
creation by way of share
price growth through the
delivery of shares.
The purpose of the LTIP
is to provide meaningful
awards based upon
demanding performance
criteria that provide a
significant incentive to
grantees that is aligned
with our shareholders’
interests.

Non-executive Directors’ Remuneration
The table below summarises the key elements for the period of our non-executive Directors’ remuneration.

Purpose and link to strategy

Operation

Maximum potential
value

Performance
conditions

Non-executive fees are reviewed on a periodic basis. Fees
payable to non-executives are a matter for the Chairman
(save in respect of his own fee) and executive members of
the Board.

Fees paid during the
period are set out on
page 42.

Assessment of
personal and
corporate
performance.

Base fee
To provide competitive fixed fees
so as to (a) procure and retain the
appropriate skills and experience
required and (b) expected time
commitment. Additional fees are
incorporated for those performing
duties in a Committee Chair role.

Benefits and incentives
The provision of market benefits
on a cost-effective basis.

Reimbursement for reasonable business expenses.

John Richards and Giles Beale are covered under the
Group’s death in service insurance plan.

Not applicable.

The maximum potential
value is the cost to the
Company in providing
these benefits.

Save as noted above, non-executives do not receive any
benefits provided to Group employees or otherwise. No
non-executive Director participates in any bonus, incentive
or share plan provided by the Group.

By order of the Board

Giles Beale
Chair of the Remuneration Committee
4 August 2021

C O R P O R A T E G O V E R N A N C E

Directors

The current Directors of the Company are listed on pages 30 and 31

together with their biographical and Committee membership details.

All of the Directors served throughout the year ended 31 March 2021

with the exception of Mike Gant who was appointed to the Board after

the year end on 30 April 2021. Stuart Overend served as a Director of

the Company from 1 April 2020 until his death on 16 November 2020.

Directors’ remuneration, share options, long-term executive plans,

pension contributions, benefits and interests are set out in the

Directors’ remuneration report on pages 39 to 45.

In accordance with our commitment to good corporate

governance practice that is relevant to our business, the Board

has voluntarily adopted the policy that all continuing Directors will

stand for re-election on an annual basis in line with best practice

recommendations.

Review of the Business

The Strategic report on pages 4 to 29 provides an

operating and financial review of the business and the

Group’s trading for the year ended 31 March 2021 as

well as risk management.

Dividends

The Directors recommend a final dividend for the year

of 1.0850p per share payable on 23 September 2021

(2020: 1.0850p). An interim dividend of 0.8678p per shares

was paid during on 25 February 2021 (2020: 0.8678p).

The Company’s articles of association allow the indemnification of

Directors out of the assets of the Company to the extent permitted by

law. These indemnities came into force on 29 August 2019 and remain

in force as at the date of this Annual Report and Accounts.

The Company maintains liability insurance for its Directors and Officers.

Share Capital and Substantial Shareholdings

Full details of the issued share capital of the Company are set out in note 34 to the financial statements on page 105. At 27 July 2021,

the latest practicable date prior to the approval of this report, the Company had been notified of the following interests amounting

to 3% or more of the voting rights attaching to the Company’s issued share capital:

9.96%

29.694,391

8.04%

30,798,898

6.71%

20,007,298

4.22%

12,602,900

Liontrust Asset Management

Alan Jonathan Simpson

Paul Michael Hamilton

Otus Capital Management

4.11%

12,261,560

Octopus Investments

Nominees

3.35%

10,000,000

Arnold Bernard

Geradus van Huet

3.18%

9,475,902

Sarah Simpson

Report of the Directors
Report of the Directors
The Directors have pleasure in presenting their Annual Report, together with the audited financial statements of the Company, for the
The Directors have pleasure in presenting their Annual Report, together with the audited financial statements of the Company, for the
year ended 31 March 2021. The Corporate Governance Statement set out on pages 34 and 35 forms part of this report.
year ended 31 March 2021. The Corporate Governance Statement set out on pages 34 and 35 forms part of this report.

The Company is a public limited company, registered in England and Wales, with registered number 11123804 and is listed on the
The Company is a public limited company, registered in England and Wales, with registered number 11123804 and is listed on the
Alternate Investment Market segment of the London Stock Exchange. The Company has been permanently domiciled in the UK since
Alternate Investment Market segment of the London Stock Exchange. The Company has been permanently domiciled in the UK since
incorporation and is the ultimate parent company of the Brickability Group.
incorporation and is the ultimate parent company of the Brickability Group.

The Directors’ Report comprises pages 46 to 49 and the following cross-referenced material is incorporated into this Directors’ Report:
The Directors’ Report comprises pages 46 to 49 and the following cross-referenced material is incorporated into this Directors’ Report:

Future Development of the Business – pages 6 to 15
Future Development of the Business – pages 6 to 15
Going Concern Statement – pages 26 and 27
Going Concern Statement – pages 26 and 27
People, culture, and employee engagement – pages 28 and 29
People, culture, and employee engagement – pages 28 and 29
Health and Safety – pages 9 and 28
Health and Safety – pages 9 and 28

Environmental policy, including Greenhouse Gas
Environmental policy, including Greenhouse Gas
Emissions – page 29
Emissions – page 29
Stakeholder Engagement – pages 22, 23 and 29
Stakeholder Engagement – pages 22, 23 and 29
Governance Report – pages 34 and 35
Governance Report – pages 34 and 35
Statement of Directors’ Responsibilities – page 50
Statement of Directors’ Responsibilities – page 50

46
46

C O R P O R A T E G O V E R N A N C E

Directors
Directors
The current Directors of the Company are listed on pages 30 and 31
The current Directors of the Company are listed on pages 30 and 31
together with their biographical and Committee membership details.
together with their biographical and Committee membership details.
All of the Directors served throughout the year ended 31 March 2021
All of the Directors served throughout the year ended 31 March 2021
with the exception of Mike Gant who was appointed to the Board after
with the exception of Mike Gant who was appointed to the Board after
the year end on 30 April 2021. Stuart Overend served as a Director of
the year end on 30 April 2021. Stuart Overend served as a Director of
the Company from 1 April 2020 until his death on 16 November 2020.
the Company from 1 April 2020 until his death on 16 November 2020.
Directors’ remuneration, share options, long-term executive plans,
Directors’ remuneration, share options, long-term executive plans,
pension contributions, benefits and interests are set out in the
pension contributions, benefits and interests are set out in the
Directors’ remuneration report on pages 39 to 45.
Directors’ remuneration report on pages 39 to 45.
In accordance with our commitment to good corporate
In accordance with our commitment to good corporate
governance practice that is relevant to our business, the Board
governance practice that is relevant to our business, the Board
has voluntarily adopted the policy that all continuing Directors will
has voluntarily adopted the policy that all continuing Directors will
stand for re-election on an annual basis in line with best practice
stand for re-election on an annual basis in line with best practice
recommendations.
recommendations.
The Company’s articles of association allow the indemnification of
The Company’s articles of association allow the indemnification of
Directors out of the assets of the Company to the extent permitted by
Directors out of the assets of the Company to the extent permitted by
law. These indemnities came into force on 29 August 2019 and remain
law. These indemnities came into force on 29 August 2019 and remain
in force as at the date of this Annual Report and Accounts.
in force as at the date of this Annual Report and Accounts.
The Company maintains liability insurance for its Directors and Officers.
The Company maintains liability insurance for its Directors and Officers.

Review of the Business
Review of the Business
The Strategic report on pages 4 to 29 provides an
The Strategic report on pages 4 to 29 provides an
operating and financial review of the business and the
operating and financial review of the business and the
Group’s trading for the year ended 31 March 2021 as
Group’s trading for the year ended 31 March 2021 as
well as risk management.
well as risk management.

Dividends
Dividends
The Directors recommend a final dividend for the year
The Directors recommend a final dividend for the year
of 1.0850p per share payable on 23 September 2021
of 1.0850p per share payable on 23 September 2021
(2020: 1.0850p). An interim dividend of 0.8678p per shares
(2020: 1.0850p). An interim dividend of 0.8678p per shares
was paid during on 25 February 2021 (2020: 0.8678p).
was paid during on 25 February 2021 (2020: 0.8678p).

Share Capital and Substantial Shareholdings
Share Capital and Substantial Shareholdings
Full details of the issued share capital of the Company are set out in note 34 to the financial statements on page 105. At 27 July 2021,
Full details of the issued share capital of the Company are set out in note 34 to the financial statements on page 105. At 27 July 2021,
the latest practicable date prior to the approval of this report, the Company had been notified of the following interests amounting
the latest practicable date prior to the approval of this report, the Company had been notified of the following interests amounting
to 3% or more of the voting rights attaching to the Company’s issued share capital:
to 3% or more of the voting rights attaching to the Company’s issued share capital:

9.96%
9.96%

29.694,391
29.694,391
Liontrust Asset Management
Liontrust Asset Management

8.04%
8.04%

30,798,898
30,798,898
Alan Jonathan Simpson
Alan Jonathan Simpson

6.71%
6.71%

20,007,298
20,007,298
Paul Michael Hamilton
Paul Michael Hamilton

4.22%
4.22%

12,602,900
12,602,900
Otus Capital Management
Otus Capital Management

4.11%
4.11%

12,261,560
12,261,560
Octopus Investments
Octopus Investments
Nominees
Nominees

3.35%
3.35%

10,000,000
10,000,000
Arnold Bernard
Arnold Bernard
Geradus van Huet
Geradus van Huet

3.18%
3.18%

9,475,902
9,475,902
Sarah Simpson
Sarah Simpson

C O R P O R A T E G O V E R N A N C E

47
47

Significant Agreements
Significant Agreements
(Change of Control)
(Change of Control)
The Company is required to disclose any
The Company is required to disclose any
significant agreements that take effect, alter or
significant agreements that take effect, alter or
terminate on a change of control of the Company
terminate on a change of control of the Company
following a takeover bid.
following a takeover bid.

The Company has committed debt facilities all of
The Company has committed debt facilities all of
which are directly or indirectly subject to change
which are directly or indirectly subject to change
of control provisions, albeit that the facilities do
of control provisions, albeit that the facilities do
not necessarily require mandatory repayment on
not necessarily require mandatory repayment on
a change of control. In the event of a takeover or
a change of control. In the event of a takeover or
other change of control outstanding awards under
other change of control outstanding awards under
the Group share plans will become exercisable.
the Group share plans will become exercisable.

Equal Opportunities
Equal Opportunities
The Group is committed to eliminating
The Group is committed to eliminating
discrimination and encouraging diversity. Its
discrimination and encouraging diversity. Its
aim is that each employee is able to perform to
aim is that each employee is able to perform to
the best of their ability. The Group will not make
the best of their ability. The Group will not make
assumptions about a person’s ability to carry
assumptions about a person’s ability to carry
out their work, for example on their ethnic origin,
out their work, for example on their ethnic origin,
gender, sexual orientation, marital status, religion
gender, sexual orientation, marital status, religion
or beliefs, age or disability.
or beliefs, age or disability.

Disabled Employees
Disabled Employees
In the event of an employee becoming disabled,
In the event of an employee becoming disabled,
every effort is made to retain them in order that
every effort is made to retain them in order that
their employment with the Group may continue.
their employment with the Group may continue.
It is the policy of the Group that training, career
It is the policy of the Group that training, career
development and promotion opportunities should
development and promotion opportunities should
be available to all employees.
be available to all employees.

Political and Charitable Donations
Political and Charitable Donations
Donations of £4,899 were made by the
Donations of £4,899 were made by the
Group for charitable purposes during the year
Group for charitable purposes during the year
(2020: £14,283). The Group does not make
(2020: £14,283). The Group does not make
political donations. Further details on our
political donations. Further details on our
charitable initiatives are given on page 29.
charitable initiatives are given on page 29.

Research and Development
Research and Development
The Group carries out research and development
The Group carries out research and development
in relation to the design and development of
in relation to the design and development of
technologies and processes in connection with
technologies and processes in connection with
its products and services.
its products and services.

Financial Risk Management

Information in respect of the financial risk management of the Group,

is contained on page 95 in note 28 on borrowings and on pages 100 to

105 in note 33 on financial instruments of the financial statements.

Related Party Transactions

Any related party transactions required to be disclosed under the

AIM rules are disclosed on pages 109 to 111 in note 38 to the

Financial Statements.

Modern Slavery Act

Our anti-slavery policy, which sets out our commitment to

preventing modern slavery and human trafficking from occurring within

any part of our business and supply chain, is available on our website

www.brickabilitygroupplc.com.

Statement, as to Disclosure of Information to Auditors

The Directors in office on 4 August 2021 have confirmed that, as far as

they are aware, there is no relevant audit information of which the auditor

is unaware. Each of the Directors have confirmed that they have taken

all steps that they ought to have taken as Directors in order to make

themselves aware of any relevant audit information and to establish

that it has been communicated to the auditor.

Post Balance Sheet Events

Particulars of events after the reporting period are detailed in

note 39 to the financial statements.

Annual General Meeting

The AGM will be held on 7 September 2021 at 11am at Queensgate

House, Cookham Road, Bracknell, Berkshire, RG12 1RB. The 2021

Notice of AGM will be available on the Company’s website,

www.brickabilitygroupplc.com.

This Directors’ report was approved by the Board of Directors on

4 August 2021.

By order of the Board

Prism Cosec Limited

Company Secretary

4 August 2021

48
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C O R P O R A T E G O V E R N A N C E

Financial Risk Management
Financial Risk Management
Information in respect of the financial risk management of the Group,
Information in respect of the financial risk management of the Group,
is contained on page 95 in note 28 on borrowings and on pages 100 to
is contained on page 95 in note 28 on borrowings and on pages 100 to
105 in note 33 on financial instruments of the financial statements.
105 in note 33 on financial instruments of the financial statements.

Related Party Transactions
Related Party Transactions
Any related party transactions required to be disclosed under the
Any related party transactions required to be disclosed under the
AIM rules are disclosed on pages 109 to 111 in note 38 to the
AIM rules are disclosed on pages 109 to 111 in note 38 to the
Financial Statements.
Financial Statements.

Modern Slavery Act
Modern Slavery Act
Our anti-slavery policy, which sets out our commitment to
Our anti-slavery policy, which sets out our commitment to
preventing modern slavery and human trafficking from occurring within
preventing modern slavery and human trafficking from occurring within
any part of our business and supply chain, is available on our website
any part of our business and supply chain, is available on our website
www.brickabilitygroupplc.com.
www.brickabilitygroupplc.com.

Statement, as to Disclosure of Information to Auditors
Statement, as to Disclosure of Information to Auditors
The Directors in office on 4 August 2021 have confirmed that, as far as
The Directors in office on 4 August 2021 have confirmed that, as far as
they are aware, there is no relevant audit information of which the auditor
they are aware, there is no relevant audit information of which the auditor
is unaware. Each of the Directors have confirmed that they have taken
is unaware. Each of the Directors have confirmed that they have taken
all steps that they ought to have taken as Directors in order to make
all steps that they ought to have taken as Directors in order to make
themselves aware of any relevant audit information and to establish
themselves aware of any relevant audit information and to establish
that it has been communicated to the auditor.
that it has been communicated to the auditor.

Post Balance Sheet Events
Post Balance Sheet Events
Particulars of events after the reporting period are detailed in
Particulars of events after the reporting period are detailed in
note 39 to the financial statements.
note 39 to the financial statements.

Annual General Meeting
Annual General Meeting
The AGM will be held on 7 September 2021 at 11am at Queensgate
The AGM will be held on 7 September 2021 at 11am at Queensgate
House, Cookham Road, Bracknell, Berkshire, RG12 1RB. The 2021
House, Cookham Road, Bracknell, Berkshire, RG12 1RB. The 2021
Notice of AGM will be available on the Company’s website,
Notice of AGM will be available on the Company’s website,
www.brickabilitygroupplc.com.
www.brickabilitygroupplc.com.

This Directors’ report was approved by the Board of Directors on
This Directors’ report was approved by the Board of Directors on
4 August 2021.
4 August 2021.

By order of the Board
By order of the Board

Prism Cosec Limited
Prism Cosec Limited
Company Secretary
Company Secretary
4 August 2021
4 August 2021

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Statement of Directors’ Responsibilities
Statement of Directors’ Responsibilities
The Directors are responsible for preparing the Annual Report and the
The Directors are responsible for preparing the Annual Report and the
Group and Parent Company financial statements in accordance with
Group and Parent Company financial statements in accordance with
applicable law and regulations.
applicable law and regulations.

Company law requires the Directors to prepare Group and
Company law requires the Directors to prepare Group and
Parent Company financial statements for each financial year.
Parent Company financial statements for each financial year.
As required by the AIM Rules of the London Stock Exchange,
As required by the AIM Rules of the London Stock Exchange,
they are required to prepare the Group financial statements
they are required to prepare the Group financial statements
in accordance with international accounting standards in
in accordance with international accounting standards in

conformity with the requirements of the Companies Act 2006
conformity with the requirements of the Companies Act 2006
and applicable law. The Directors have elected to prepare
and applicable law. The Directors have elected to prepare
the Parent Company financial statements under the FRS 101
the Parent Company financial statements under the FRS 101
Reduced Disclosure Framework.
Reduced Disclosure Framework.

Under Company law, the Directors must not approve the financial statements unless they are satisfied that they give a true
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 Parent Company and of their profit or loss for that period.
and fair view of the state of affairs of the Group and Parent Company and of their profit or loss for that period.
In preparing each of the Group and Parent Company financial statements, the Directors are required to:
In preparing each of the Group and Parent Company financial statements, the Directors are required to:

• select suitable accounting policies and then apply them consistently;
• select suitable accounting policies and then apply them consistently;

• make judgements and estimates that are reasonable, relevant and reliable;
• make judgements and estimates that are reasonable, relevant and reliable;

• state whether they have been prepared in accordance with international and UK accounting standards;
• state whether they have been prepared in accordance with international and UK accounting standards;

• assess the Group and Parent Company’s ability to continue as a going concern, disclosing, as applicable,
• assess the Group and Parent Company’s ability to continue as a going concern, disclosing, as applicable,
matters related to going concern; and
matters related to going concern; and

• use the going concern basis of accounting unless they either intend to liquidate the Group or the Parent
• use the going concern basis of accounting unless they either intend to liquidate the Group or the Parent
Company or to cease operations or have no realistic alternative but to do so.
Company or to cease operations or have no realistic alternative but to do so.

The Directors are responsible for keeping adequate accounting
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Parent
records that are sufficient to show and explain the Parent
Company’s transactions and disclose with reasonable accuracy
Company’s transactions and disclose with reasonable accuracy
at any time the financial position of the Parent Company and
at any time the financial position of the Parent Company and
enable them to ensure that its financial statements comply with
enable them to ensure that its financial statements comply with
the Companies Act 2006. They are responsible for such internal
the Companies Act 2006. They are responsible for such internal
control as they determine is necessary to enable the preparation
control as they determine is necessary to enable the preparation
of financial statements that are free from material misstatement,
of financial statements that are free from material misstatement,
whether due to fraud or error, and have general responsibility for
whether due to fraud or error, and have general responsibility for
taking such steps as are reasonably open to them to safeguard
taking such steps as are reasonably open to them to safeguard

the assets of the Group and to prevent and detect fraud and
the assets of the Group and to prevent and detect fraud and
other irregularities.
other irregularities.

Under applicable law and regulations, the Directors are also
Under applicable law and regulations, the Directors are also
responsible for preparing a Strategic Report and a Directors’
responsible for preparing a Strategic Report and a Directors’
Report that complies with that law and those regulations.
Report that complies with that law and those regulations.

The Directors are responsible for the maintenance and integrity
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
of the corporate and financial information included on the
Company’s website. Legislation in the UK governing the
Company’s website. Legislation in the UK governing the
preparation and dissemination of financial statements may differ
preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
from legislation in other jurisdictions.

By order of the Board
By order of the Board

Alan Simpson
Alan Simpson
Chief Executive
Chief Executive

4 August 2021
4 August 2021

Mike Gant
Chief Financial Officer

Independent Auditor’s Report

to the members of Brickability Group PLC

Opinion on the financial statements

In our opinion:

• the financial statements give a true and fair view of the state

• the Parent Company financial statements have been

of the Group’s and of the Parent Company’s affairs as at 31

properly prepared in accordance with United Kingdom

March 2021 and of the Group’s profit for the year then ended;

Generally Accepted Accounting Practice; and

• the Group financial statements have been properly

• the financial statements have been prepared in accordance

with the requirements of the Companies Act 2006.

prepared in accordance with international accounting

standards in conformity with the requirements of the

Companies Act 2006;

We have audited the financial statements of Brickability Group Plc (the ‘Parent Company’) and its subsidiaries (the ‘Group’) for

the year ended 31 March 2021 which comprise the Consolidated Statement of Profit or Loss and Other Comprehensive Income,

the Consolidated Balance Sheet, the Company Balance Sheet, the Consolidated Statement of Changes in Equity, the Company

Statement of Changes in Equity, the Consolidated Statement of Cash Flows and notes to the financial statements, including a

summary of significant accounting policies.

The financial reporting framework that has been applied in the preparation of the Group financial statements is applicable law

and international accounting standards in conformity with the requirements of the Companies Act 2006. The financial reporting

framework that has been applied in the preparation of the Parent Company financial statements is applicable law and United

Kingdom Accounting Standards, including Financial Reporting Standard 101 Reduced Disclosure Framework (United Kingdom

Generally Accepted Accounting Practice).

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our

responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section

of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We remain independent of the Group and the Parent Company in accordance

with the ethical requirements that are relevant to our audit of the financial

statements in the UK, including the FRC’s Ethical Standard as

applied to listed entities, and we have fulfilled our other ethical

responsibilities in accordance with these requirements.

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Independent Auditor’s Report
Independent Auditor’s Report
to the members of Brickability Group PLC
to the members of Brickability Group PLC

Opinion on the financial statements
Opinion on the financial statements

In our opinion:
In our opinion:
• the financial statements give a true and fair view of the state
• the financial statements give a true and fair view of the state
of the Group’s and of the Parent Company’s affairs as at 31
of the Group’s and of the Parent Company’s affairs as at 31
March 2021 and of the Group’s profit for the year then ended;
March 2021 and of the Group’s profit for the year then ended;

• the Group financial statements have been properly
• the Group financial statements have been properly
prepared in accordance with international accounting
prepared in accordance with international accounting
standards in conformity with the requirements of the
standards in conformity with the requirements of the
Companies Act 2006;
Companies Act 2006;

• the Parent Company financial statements have been
• the Parent Company financial statements have been
properly prepared in accordance with United Kingdom
properly prepared in accordance with United Kingdom
Generally Accepted Accounting Practice; and
Generally Accepted Accounting Practice; and

• the financial statements have been prepared in accordance
• the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
with the requirements of the Companies Act 2006.

We have audited the financial statements of Brickability Group Plc (the ‘Parent Company’) and its subsidiaries (the ‘Group’) for
We have audited the financial statements of Brickability Group Plc (the ‘Parent Company’) and its subsidiaries (the ‘Group’) for
the year ended 31 March 2021 which comprise the Consolidated Statement of Profit or Loss and Other Comprehensive Income,
the year ended 31 March 2021 which comprise the Consolidated Statement of Profit or Loss and Other Comprehensive Income,
the Consolidated Balance Sheet, the Company Balance Sheet, the Consolidated Statement of Changes in Equity, the Company
the Consolidated Balance Sheet, the Company Balance Sheet, the Consolidated Statement of Changes in Equity, the Company
Statement of Changes in Equity, the Consolidated Statement of Cash Flows and notes to the financial statements, including a
Statement of Changes in Equity, the Consolidated Statement of Cash Flows and notes to the financial statements, including a
summary of significant accounting policies.
summary of significant accounting policies.

The financial reporting framework that has been applied in the preparation of the Group financial statements is applicable law
The financial reporting framework that has been applied in the preparation of the Group financial statements is applicable law
and international accounting standards in conformity with the requirements of the Companies Act 2006. The financial reporting
and international accounting standards in conformity with the requirements of the Companies Act 2006. The financial reporting
framework that has been applied in the preparation of the Parent Company financial statements is applicable law and United
framework that has been applied in the preparation of the Parent Company financial statements is applicable law and United
Kingdom Accounting Standards, including Financial Reporting Standard 101 Reduced Disclosure Framework (United Kingdom
Kingdom Accounting Standards, including Financial Reporting Standard 101 Reduced Disclosure Framework (United Kingdom
Generally Accepted Accounting Practice).
Generally Accepted Accounting Practice).

Basis for opinion
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section
of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence
Independence
We remain independent of the Group and the Parent Company in accordance
We remain independent of the Group and the Parent Company in accordance
with the ethical requirements that are relevant to our audit of the financial
with the ethical requirements that are relevant to our audit of the financial
statements in the UK, including the FRC’s Ethical Standard as
statements in the UK, including the FRC’s Ethical Standard as
applied to listed entities, and we have fulfilled our other ethical
applied to listed entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
responsibilities in accordance with these requirements.

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Independent Auditor’s Report
Independent Auditor’s Report
to the members of Brickability Group PLC
to the members of Brickability Group PLC

Conclusions relating to going concern
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our evaluation of the Directors’ assessment of the Group and the Parent
preparation of the financial statements is appropriate. Our evaluation of the Directors’ assessment of the Group and the Parent
Company’s ability to continue to adopt the going concern basis of accounting included:
Company’s ability to continue to adopt the going concern basis of accounting included:

sections of this report.

Overview

We assessed the appropriateness of sensitivity analyses
We assessed the appropriateness of sensitivity analyses
prepared by management over the Group’s cash flow
prepared by management over the Group’s cash flow
forecasts including the effects of adverse movements in
forecasts including the effects of adverse movements in
revenue to determine the sufficiency of available cash
revenue to determine the sufficiency of available cash
resources to settle short term liabilities as they fall due over the
resources to settle short term liabilities as they fall due over the
next 12 months.
next 12 months.

We reviewed the reverse stress testing and challenged the
We reviewed the reverse stress testing and challenged the
Directors’ assessment of the quantification of the revenue
Directors’ assessment of the quantification of the revenue
shortfall required for covenants to be breached in the forecast
shortfall required for covenants to be breached in the forecast
period. We considered the likelihood and reasonableness of
period. We considered the likelihood and reasonableness of
the shortfall with reference to the Directors’ historical data of
the shortfall with reference to the Directors’ historical data of
revenue and EBITDA during the Coronavirus pandemic and
revenue and EBITDA during the Coronavirus pandemic and
lockdowns, and recent management accounts.
lockdowns, and recent management accounts.

We reviewed the adequacy of disclosures in note 2 to the
We reviewed the adequacy of disclosures in note 2 to the
financial statements regarding going concern.
financial statements regarding going concern.

Based on the work we have performed, we have not identified
Based on the work we have performed, we have not identified
any material uncertainties relating to events or conditions
any material uncertainties relating to events or conditions
that, individually or collectively, may cast significant doubt
that, individually or collectively, may cast significant doubt
on the Group and parent company’s ability to continue as
on the Group and parent company’s ability to continue as
a going concern for a period of at least twelve months from
a going concern for a period of at least twelve months from
when the financial statements are authorised for issue.
when the financial statements are authorised for issue.

We obtained the going concern assessment, approved by
We obtained the going concern assessment, approved by
the Directors, including detailed cash flow forecasts up to
the Directors, including detailed cash flow forecasts up to
at least 12 months after the date of approval of these
at least 12 months after the date of approval of these
financial statements.
financial statements.

We assessed the Directors’ assumptions in the going concern
We assessed the Directors’ assumptions in the going concern
forecast including revenue and growth profiles, profit
forecast including revenue and growth profiles, profit
margin, Coronavirus risk assessment and funding headroom
margin, Coronavirus risk assessment and funding headroom
availability. We performed this with reference to available
availability. We performed this with reference to available
market data, reviewed the forecasts for any anomalies and
market data, reviewed the forecasts for any anomalies and
investigated unusual large cash payments that would affect
investigated unusual large cash payments that would affect
profit margins and assessed actual trading performance
profit margins and assessed actual trading performance
during the Coronavirus pandemic and how this was
during the Coronavirus pandemic and how this was
incorporated into future projections.
incorporated into future projections.

We assessed the historical accuracy of the Directors forecasts,
We assessed the historical accuracy of the Directors forecasts,
including comparing the current forecasts against post year
including comparing the current forecasts against post year
end actual results.
end actual results.

We inspected the Group’s signed revolving facility agreements
We inspected the Group’s signed revolving facility agreements
to check that the Group has sufficient funds to: settle
to check that the Group has sufficient funds to: settle
the deferred consideration due of £4.5m (note 27) for
the deferred consideration due of £4.5m (note 27) for
acquisitions made in the prior year as well as the two new
acquisitions made in the prior year as well as the two new
acquisitions in the current year and two new acquisitions post
acquisitions in the current year and two new acquisitions post
year end; and maintain sufficient working capital to continue
year end; and maintain sufficient working capital to continue
daily operations as normal.
daily operations as normal.

We obtained the documentation covering the availability of a
We obtained the documentation covering the availability of a
3 year extension to the facility from 3 March 2023.
3 year extension to the facility from 3 March 2023.

We assessed the impact on banking covenants to determine
We assessed the impact on banking covenants to determine
if they would be breached if the drawn down of all
if they would be breached if the drawn down of all
facilities were to occur.
facilities were to occur.

Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant

Coverage: from

Significant components

and specific procedures

91% (2020: 74%) of Group profit before tax

89% (2020: 81%) of Group revenue

94% (2020: 64%) of Group total net assets

Key audit matters

2021

2020

KAM 1 – Revenue cut-off of direct sales

KAM 2 - Existence of Inventory

KAM 3 – Acquisition accounting

KAM 4 – Carrying value of goodwill and intangibles

KAM 5 – Going concern

KAM 1 for the current year we have focussed our audit work on the cut-off of direct sales. Our assessment of

manual adjustments to revenue in the prior year did not bear significance in the current year.

KAM 2 is no longer considered to be a key audit matter because in the current year we were able to attend

stock counts without any restrictions as a result of Covid 19 and as a result existence of inventory has not been

deemed a risk by the audit team in the current year.

KAM 3 is no longer considered to be a key audit matter because the current year there were only 2 immaterial

acquisitions and in consideration of the scope of our audit we have not considered this as a KAM for the

current year.

KAM 5 is no longer considered to be a key audit matter because of the limited impact of the Coronavirus on

the Group and the resulting impact on our risk assessment.

Materiality

Group financial statements as a whole

£720,000 (2020: £600,000) based on 5% (2020: 4.9%) of adjusted profit before tax (2020: profit before tax).

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Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant
sections of this report.
sections of this report.

Overview
Overview

Coverage: from
Coverage: from
Significant components
Significant components
and specific procedures
and specific procedures

91% (2020: 74%) of Group profit before tax
89% (2020: 81%) of Group revenue
94% (2020: 64%) of Group total net assets

Key audit matters

2021

2020

KAM 1 – Revenue cut-off of direct sales

KAM 2 - Existence of Inventory

KAM 3 – Acquisition accounting

KAM 4 – Carrying value of goodwill and intangibles

KAM 5 – Going concern

KAM 1 for the current year we have focussed our audit work on the cut-off of direct sales. Our assessment of
manual adjustments to revenue in the prior year did not bear significance in the current year.

KAM 2 is no longer considered to be a key audit matter because in the current year we were able to attend
KAM 2 is no longer considered to be a key audit matter because in the current year we were able to attend
stock counts without any restrictions as a result of Covid 19 and as a result existence of inventory has not been
stock counts without any restrictions as a result of Covid 19 and as a result existence of inventory has not been
deemed a risk by the audit team in the current year.
deemed a risk by the audit team in the current year.

KAM 3 is no longer considered to be a key audit matter because the current year there were only 2 immaterial
KAM 3 is no longer considered to be a key audit matter because the current year there were only 2 immaterial
acquisitions and in consideration of the scope of our audit we have not considered this as a KAM for the
acquisitions and in consideration of the scope of our audit we have not considered this as a KAM for the
current year.
current year.

KAM 5 is no longer considered to be a key audit matter because of the limited impact of the Coronavirus on
the Group and the resulting impact on our risk assessment.

Materiality

Group financial statements as a whole

£720,000 (2020: £600,000) based on 5% (2020: 4.9%) of adjusted profit before tax (2020: profit before tax).

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From our testing performed we consider the cut –off of revenue to be appropriate.

As a consequence of the Group’s growth

strategy a significant value of goodwill

and intangible assets has arisen from

For all intangible assets where an indicator for impairment exist and for

goodwill on an annual basis, we reviewed management’s methodology and

assumptions used in their impairment assessment. Our detailed procedures

acquisitions.

included the following:

Key audit matter

Revenue cut-off

of direct sales

See note 3.4 to the

financial statements

for the Directors’

disclosures of the

related revenue

recognition

accounting policies.

Key observations:

Carrying value

of goodwill and

intangibles

Refer to note

3.11 and 4 to the

financial statements

for the

Directors’ disclosures

on the critical

accounting

estimates and

judgements related

to impairment.

Trade in the Bricks division predominantly

comprises direct sales where goods are

delivered directly from the supplier to the

customer. Transfer of risk and rewards

are at a point in time when the goods are

delivered at the client site for all direct sales.

We considered that there is a risk of

inappropriate revenue recognition arising

from cut-off of direct sales, where revenue

is incorrectly recorded and risk and

rewards transfer is incorrectly applied

to goods delivered around year end.

This could lead to the overstatement of

revenue as a result of the recognition of

revenue in the incorrect period.

The carrying amounts of the Group’s

goodwill, which is assessed annually

and other acquired intangible assets,

for which there are an indicator for

impairment, are assessed against

potential future cash flows. There is a

risk that the year end values assigned

to goodwill and intangible assets are

materially misstated. As this is subjective

and judgemental, this increases the risk

of misstatement.

This risk has been heightened by

uncertainty over future trading

prospects and cash flows caused by the

Covid-19 pandemic, Brexit and other

macro-economic factors affecting the

construction industry which may lead to

an impairment charge that has not been

recognised by management.

How the scope of our audit addressed the key audit matter

We challenged management on the application of the accounting policies with

reference to the cut-off of direct sales and the application of the timing of the

transfer of risk and rewards in accordance with the accounting standards and

terms and conditions of the direct sales.

We agreed a sample of sales invoices recognised covering a risk period

before and after the year end through to supporting third party delivery

documentation and customer confirmation, to confirm that the Group has

satisfied its performance obligations and revenue was appropriately recorded

in the correct period.

We compared the assessment of the indicators identified by the Directors

against our own expectation of the market.

We challenged management’s models for assessing the valuation of

significant goodwill and intangible balances to understand the composition

of management’s future cash flow forecasts, and the process undertaken

to prepare them to conclude on the appropriateness of the models and

assumptions used by management.

We confirmed the underlying cash flows were consistent with the Board approved

budgets, which reflected the forecasted impact of COVID-19, Brexit and other

macro-economic factors on the construction industry and the business.

We assessed the reasonableness of the key assumptions, including growth rate,

discount rate used, and other key assumptions by testing this to supporting

documentation which include historical information, budget verses actual

results, recent acquisitions and industry published information and trends.

We checked the mathematical integrity of the model.

For all cash generating unit (“CGUs”), we scrutinised the Directors’ assessment

of the degree to which the key assumptions would need to fluctuate before an

impairment was triggered. This includes testing sensitivities to ensure sufficient

headroom exist for each CGU.

In respect of the CGUs identified as having impairment indicators or lower

levels of headroom we performed detailed testing with support from our

internal BDO valuations experts to critically assess and corroborate the key

inputs of the forecast cash flows including:

An assessment of the discount rate used by obtaining the underlying data used

in the calculation and benchmarking it against comparable organisations and

market data;

A consideration of the length of the period for which cash flows were modelled

and the growth rates assumed in the cash flows as well as the terminal value,

by comparing them to economic and industry forecasts; and

An analysis of the historical accuracy of budgets to actual results for previously

acquired components, to determine whether forecast cash flows are reliable

based on past experience and checking that sensitivities applied to the models

are in excess of any forecasting inaccuracy identified our assessment of

budgets vs actual results.

Key observations:

Based on our procedures performed we consider managements judgements and estimates to be appropriate.

Independent Auditor’s Report
Independent Auditor’s Report
to the members of Brickability Group PLC
to the members of Brickability Group PLC

An overview of the scope of our audit
An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of
Our Group audit was scoped by obtaining an understanding of
the Group and its environment, including the Group’s system of
the Group and its environment, including the Group’s system of
internal control, and assessing the risks of material misstatement
internal control, and assessing the risks of material misstatement
in the financial statements. We also addressed the risk of
in the financial statements. We also addressed the risk of
management override of internal controls, including assessing
management override of internal controls, including assessing
whether there was evidence of bias by the Directors that may
whether there was evidence of bias by the Directors that may
have represented a risk of material misstatement.
have represented a risk of material misstatement.

In determining the scope of our audit we considered the size and
In determining the scope of our audit we considered the size and
nature of each component within the Group to determine the
nature of each component within the Group to determine the
level of work to be performed at each in order to ensure sufficient
level of work to be performed at each in order to ensure sufficient
assurance was gained to allow us to express an opinion on the
assurance was gained to allow us to express an opinion on the
financial statements as a whole.
financial statements as a whole.

We have identified 12 components to be significant to the
We have identified 12 components to be significant to the
Group (Brick-ability Ltd, Brick Services Limited, Bespoke Brick
Group (Brick-ability Ltd, Brick Services Limited, Bespoke Brick
Company Limited, Brick-link Limited, LBT Brick & Facades
Company Limited, Brick-link Limited, LBT Brick & Facades
Limited, Crest Brick Slate & Tile Limited, Crest Roofing Limited,
Limited, Crest Brick Slate & Tile Limited, Crest Roofing Limited,
U Plastics Limited, Excel Roofing Services Limited, Crown
U Plastics Limited, Excel Roofing Services Limited, Crown
Roofing (Centres) Limited, McCann Roofing Products Limited,
Roofing (Centres) Limited, McCann Roofing Products Limited,

Towelrads.com Limited). Full scope audits were undertaken by
Towelrads.com Limited). Full scope audits were undertaken by
the Group audit team.
the Group audit team.

There are 16 other components within the Group that
There are 16 other components within the Group that
were not considered to be significant components. For
were not considered to be significant components. For
these components, the Group audit team performed other
these components, the Group audit team performed other
procedures, including analytical review where we corroborated
procedures, including analytical review where we corroborated
any unusual trends and material movements by further testing
any unusual trends and material movements by further testing
a sample of those material items to supporting documentation
a sample of those material items to supporting documentation
with reference to the Group materiality threshold. These specific
with reference to the Group materiality threshold. These specific
audit procedures performed increased the level of coverage
audit procedures performed increased the level of coverage
obtained from our audit over revenue, profit before taxation and
obtained from our audit over revenue, profit before taxation and
net assets.
net assets.

We obtained an understanding of the internal control
We obtained an understanding of the internal control
environment related to the financial reporting process and
environment related to the financial reporting process and
assessed the appropriateness, completeness and accuracy
assessed the appropriateness, completeness and accuracy
of the Group journals and other adjustments performed on
of the Group journals and other adjustments performed on
consolidation. All procedures were undertaken by the Group
consolidation. All procedures were undertaken by the Group
audit team.
audit team.

Key audit matters
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to
fraud) that we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the
fraud) that we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the
audit, and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial
audit, and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

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Key audit matter

Revenue cut-off
Revenue cut-off
of direct sales
of direct sales

See note 3.4 to the
See note 3.4 to the
financial statements
financial statements
for the Directors’
for the Directors’
disclosures of the
disclosures of the
related revenue
related revenue
recognition
recognition
accounting policies.
accounting policies.

Trade in the Bricks division predominantly
Trade in the Bricks division predominantly
comprises direct sales where goods are
comprises direct sales where goods are
delivered directly from the supplier to the
delivered directly from the supplier to the
customer. Transfer of risk and rewards
customer. Transfer of risk and rewards
are at a point in time when the goods are
are at a point in time when the goods are
delivered at the client site for all direct sales.
delivered at the client site for all direct sales.
We considered that there is a risk of
We considered that there is a risk of
inappropriate revenue recognition arising
inappropriate revenue recognition arising
from cut-off of direct sales, where revenue
from cut-off of direct sales, where revenue
is incorrectly recorded and risk and
is incorrectly recorded and risk and
rewards transfer is incorrectly applied
rewards transfer is incorrectly applied
to goods delivered around year end.
to goods delivered around year end.
This could lead to the overstatement of
This could lead to the overstatement of
revenue as a result of the recognition of
revenue as a result of the recognition of
revenue in the incorrect period.
revenue in the incorrect period.

How the scope of our audit addressed the key audit matter

We challenged management on the application of the accounting policies with
We challenged management on the application of the accounting policies with
reference to the cut-off of direct sales and the application of the timing of the
reference to the cut-off of direct sales and the application of the timing of the
transfer of risk and rewards in accordance with the accounting standards and
transfer of risk and rewards in accordance with the accounting standards and
terms and conditions of the direct sales.
terms and conditions of the direct sales.
We agreed a sample of sales invoices recognised covering a risk period
We agreed a sample of sales invoices recognised covering a risk period
before and after the year end through to supporting third party delivery
before and after the year end through to supporting third party delivery
documentation and customer confirmation, to confirm that the Group has
documentation and customer confirmation, to confirm that the Group has
satisfied its performance obligations and revenue was appropriately recorded
satisfied its performance obligations and revenue was appropriately recorded
in the correct period.
in the correct period.

Key observations:
From our testing performed we consider the cut –off of revenue to be appropriate.

Carrying value
Carrying value
of goodwill and
of goodwill and
intangibles
intangibles

Refer to note
Refer to note
3.11 and 4 to the
3.11 and 4 to the
financial statements
financial statements
for the
for the
Directors’ disclosures
Directors’ disclosures
on the critical
on the critical
accounting
accounting
estimates and
estimates and
judgements related
judgements related
to impairment.
to impairment.

As a consequence of the Group’s growth
As a consequence of the Group’s growth
strategy a significant value of goodwill
strategy a significant value of goodwill
and intangible assets has arisen from
and intangible assets has arisen from
acquisitions.
acquisitions.
The carrying amounts of the Group’s
The carrying amounts of the Group’s
goodwill, which is assessed annually
goodwill, which is assessed annually
and other acquired intangible assets,
and other acquired intangible assets,
for which there are an indicator for
for which there are an indicator for
impairment, are assessed against
impairment, are assessed against
potential future cash flows. There is a
potential future cash flows. There is a
risk that the year end values assigned
risk that the year end values assigned
to goodwill and intangible assets are
to goodwill and intangible assets are
materially misstated. As this is subjective
materially misstated. As this is subjective
and judgemental, this increases the risk
and judgemental, this increases the risk
of misstatement.
of misstatement.
This risk has been heightened by
This risk has been heightened by
uncertainty over future trading
uncertainty over future trading
prospects and cash flows caused by the
prospects and cash flows caused by the
Covid-19 pandemic, Brexit and other
Covid-19 pandemic, Brexit and other
macro-economic factors affecting the
macro-economic factors affecting the
construction industry which may lead to
construction industry which may lead to
an impairment charge that has not been
an impairment charge that has not been
recognised by management.
recognised by management.

For all intangible assets where an indicator for impairment exist and for
For all intangible assets where an indicator for impairment exist and for
goodwill on an annual basis, we reviewed management’s methodology and
goodwill on an annual basis, we reviewed management’s methodology and
assumptions used in their impairment assessment. Our detailed procedures
assumptions used in their impairment assessment. Our detailed procedures
included the following:
included the following:
We compared the assessment of the indicators identified by the Directors
We compared the assessment of the indicators identified by the Directors
against our own expectation of the market.
against our own expectation of the market.
We challenged management’s models for assessing the valuation of
We challenged management’s models for assessing the valuation of
significant goodwill and intangible balances to understand the composition
significant goodwill and intangible balances to understand the composition
of management’s future cash flow forecasts, and the process undertaken
of management’s future cash flow forecasts, and the process undertaken
to prepare them to conclude on the appropriateness of the models and
to prepare them to conclude on the appropriateness of the models and
assumptions used by management.
assumptions used by management.
We confirmed the underlying cash flows were consistent with the Board approved
We confirmed the underlying cash flows were consistent with the Board approved
budgets, which reflected the forecasted impact of COVID-19, Brexit and other
budgets, which reflected the forecasted impact of COVID-19, Brexit and other
macro-economic factors on the construction industry and the business.
macro-economic factors on the construction industry and the business.
We assessed the reasonableness of the key assumptions, including growth rate,
We assessed the reasonableness of the key assumptions, including growth rate,
discount rate used, and other key assumptions by testing this to supporting
discount rate used, and other key assumptions by testing this to supporting
documentation which include historical information, budget verses actual
documentation which include historical information, budget verses actual
results, recent acquisitions and industry published information and trends.
results, recent acquisitions and industry published information and trends.
We checked the mathematical integrity of the model.
We checked the mathematical integrity of the model.
For all cash generating unit (“CGUs”), we scrutinised the Directors’ assessment
For all cash generating unit (“CGUs”), we scrutinised the Directors’ assessment
of the degree to which the key assumptions would need to fluctuate before an
of the degree to which the key assumptions would need to fluctuate before an
impairment was triggered. This includes testing sensitivities to ensure sufficient
impairment was triggered. This includes testing sensitivities to ensure sufficient
headroom exist for each CGU.
headroom exist for each CGU.
In respect of the CGUs identified as having impairment indicators or lower
In respect of the CGUs identified as having impairment indicators or lower
levels of headroom we performed detailed testing with support from our
levels of headroom we performed detailed testing with support from our
internal BDO valuations experts to critically assess and corroborate the key
internal BDO valuations experts to critically assess and corroborate the key
inputs of the forecast cash flows including:
inputs of the forecast cash flows including:
An assessment of the discount rate used by obtaining the underlying data used
An assessment of the discount rate used by obtaining the underlying data used
in the calculation and benchmarking it against comparable organisations and
in the calculation and benchmarking it against comparable organisations and
market data;
market data;
A consideration of the length of the period for which cash flows were modelled
A consideration of the length of the period for which cash flows were modelled
and the growth rates assumed in the cash flows as well as the terminal value,
and the growth rates assumed in the cash flows as well as the terminal value,
by comparing them to economic and industry forecasts; and
by comparing them to economic and industry forecasts; and
An analysis of the historical accuracy of budgets to actual results for previously
An analysis of the historical accuracy of budgets to actual results for previously
acquired components, to determine whether forecast cash flows are reliable
acquired components, to determine whether forecast cash flows are reliable
based on past experience and checking that sensitivities applied to the models
based on past experience and checking that sensitivities applied to the models
are in excess of any forecasting inaccuracy identified our assessment of
are in excess of any forecasting inaccuracy identified our assessment of
budgets vs actual results.
budgets vs actual results.

Key observations:
Based on our procedures performed we consider managements judgements and estimates to be appropriate.

C O R P O R A T E G O V E R N A N C E

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Independent Auditor’s Report
Independent Auditor’s Report
to the members of Brickability Group PLC
to the members of Brickability Group PLC

Our application of materiality
Our application of materiality
We apply the concept of materiality both in planning
We apply the concept of materiality both in planning
and performing our audit, and in evaluating the effect
and performing our audit, and in evaluating the effect
of misstatements. We consider materiality to be the
of misstatements. We consider materiality to be the
magnitude by which misstatements, including omissions,
magnitude by which misstatements, including omissions,
could influence the economic decisions of reasonable
could influence the economic decisions of reasonable
users that are taken on the basis of the financial statements.
users that are taken on the basis of the financial statements.

to determine the extent of testing needed. Importantly,
to determine the extent of testing needed. Importantly,
misstatements below these levels will not necessarily be
misstatements below these levels will not necessarily be
evaluated as immaterial as we also take account of the
evaluated as immaterial as we also take account of the
nature of identified misstatements, and the particular
nature of identified misstatements, and the particular
circumstances of their occurrence, when evaluating their
circumstances of their occurrence, when evaluating their
effect on the financial statements as a whole.
effect on the financial statements as a whole.

In order to reduce to an appropriately low level the
In order to reduce to an appropriately low level the
probability that any misstatements exceed materiality,
probability that any misstatements exceed materiality,
we use a lower materiality level, performance materiality,
we use a lower materiality level, performance materiality,

Based on our professional judgement, we determined
Based on our professional judgement, we determined
materiality for the financial statements as a whole and
materiality for the financial statements as a whole and
performance materiality as follows:
performance materiality as follows:

Group financial statements
Group financial statements

Parent company financial statements
Parent company financial statements

2021
2021
£
£

2020
2020
£
£

2021
2021
£
£

2020
2020
£
£

Materiality

720,000

600,000

472,000

495,000

Basis for
Basis for
determining
determining
materiality
materiality

Rationale for
Rationale for
the benchmark
the benchmark
applied
applied

5% of Adjusted Profit
5% of Adjusted Profit
before Taxation
before Taxation

4.9% of Profit
4.9% of Profit
before Taxation
before Taxation

66% of Group
66% of Group
materiality
materiality

82.5% of group
82.5% of group
materiality
materiality

Capped at 66% of Group materiality
Capped at 66% of Group materiality
(2020: 82.5% of Group materiality)
(2020: 82.5% of Group materiality)
given the assessment of the significant
given the assessment of the significant
components aggregation risk.
components aggregation risk.

We considered
We considered
that profit before
that profit before
tax is a key
tax is a key
performance
performance
measure to the
measure to the
stakeholders of
stakeholders of
the entity and
the entity and
therefore an
therefore an
appropriate
appropriate
benchmark.
benchmark.

We considered that
We considered that
adjusted profit before
adjusted profit before
tax is a key performance
tax is a key performance
measure to the
measure to the
stakeholders of the
stakeholders of the
entity and therefore an
entity and therefore an
appropriate benchmark.
appropriate benchmark.
This has been changed
This has been changed
on the basis that the
on the basis that the
Group is acquisitive, with
Group is acquisitive, with
large intangible asset
large intangible asset
balances and the entity’s
balances and the entity’s
performance is more
performance is more
accurately reflected when
accurately reflected when
adjusted for amortisation,
adjusted for amortisation,
fair value changes in
fair value changes in
contingent consideration,
contingent consideration,
and acquisition and other
and acquisition and other
exceptional costs.
exceptional costs.

Performance
Performance
materiality
materiality

Basis for
Basis for
determining
determining
performance
performance
materiality
materiality

508,000

400,000

354,000

326,000

70% (65%) of Group materiality taking into
70% (65%) of Group materiality taking into
consideration of the overall risk assessment, including
consideration of the overall risk assessment, including
factors such as areas of estimation within the financial
factors such as areas of estimation within the financial
statements, the type of audit testing to be completed
statements, the type of audit testing to be completed
and history of misstatement.
and history of misstatement.

70% (65%) of Parent Company materiality
70% (65%) of Parent Company materiality
taking into consideration factors such as
taking into consideration factors such as
areas of estimation within the financial
areas of estimation within the financial
statements and the type of audit testing to
statements and the type of audit testing to
be completed.
be completed.

Component materiality
Component materiality
We set materiality for each component of the Group based on a percentage of between 3% and 66% of Group
We set materiality for each component of the Group based on a percentage of between 3% and 66% of Group
materiality dependent on the size and our assessment of the risk of material misstatement of that component.
materiality dependent on the size and our assessment of the risk of material misstatement of that component.
Component materiality ranged from £20,700 to £472,000. In the audit of each component, we further applied
Component materiality ranged from £20,700 to £472,000. In the audit of each component, we further applied
performance materiality levels of 75% of the component materiality to our testing to ensure that the risk of errors
performance materiality levels of 75% of the component materiality to our testing to ensure that the risk of errors
exceeding component materiality was appropriately mitigated. Because each of these components were also subject
exceeding component materiality was appropriately mitigated. Because each of these components were also subject
to standalone statutory audits, we used the materiality applicable to those audits for Group purposes.
to standalone statutory audits, we used the materiality applicable to those audits for Group purposes.

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C O R P O R A T E G O V E R N A N C E

57
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Independent Auditor’s Report
to the members of Brickability Group PLC

Reporting threshold
We agreed with the Audit Committee that we would report to them all individual audit differences in excess of £14,500 (2020:
£14,000). We also agreed to report differences below this threshold that, in our view, warranted reporting on qualitative grounds.

Other information
The Directors are responsible for the other information. The
other information comprises the information included in the
annual report and accounts other than the financial statements
and our auditor’s report thereon. Our opinion on the financial
statements does not cover the other information and, except
to the extent otherwise explicitly stated in our report, we do
not express any form of assurance conclusion thereon. Our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent

with the financial statements or our knowledge obtained in
the course of the audit, or otherwise appears to be materially
misstated. If we identify such material inconsistencies or
apparent material misstatements, we are required to determine
whether this gives rise to a material misstatement in the financial
statements themselves. If, based on the work we have performed,
we conclude that there is a material misstatement of this other
information, we are required to report that fact.

We have nothing to report in this regard.

Other Companies Act 2006 reporting
Based on the responsibilities described below and our work performed during the course of the audit, we are required by the
Companies Act 2006 and ISAs (UK) to report on certain opinions and matters as described below.

Strategic report and
Directors’ report

In our opinion, based on the work undertaken in the course of the audit:

• 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; and

• the Strategic report and the Directors’ report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and Parent Company and its environment obtained in
the course of the audit, we have not identified material misstatements in the strategic report or the Directors’ report.

Matters on which we
are required to report
by exception

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006
requires us to report to you if, in our opinion:
• adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have
not been received from branches not visited by us; or

• the Parent Company financial statements are not in agreement with the accounting records and returns; or

• certain disclosures of Directors’ remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit.

Responsibilities of Directors
As explained more fully in the Statement of Directors’ responsibilities, the Directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors
determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to
fraud or error.

In preparing the financial statements, the Directors are responsible for assessing the Group’s and the Parent Company’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the Directors either intend to liquidate the Group or the Parent Company or to cease operations, or have no
realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a
high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Extent to which the audit was capable of detecting
irregularities, including fraud
Irregularities, including fraud, are instances of non-
compliance with laws and regulations. We design procedures
in line with our responsibilities, outlined above, to detect
material misstatements in respect of irregularities, including
fraud. The extent to which our procedures are capable of
detecting irregularities, including fraud is detailed below:

We obtained an understanding of the legal and regulatory
frameworks that are applicable to the Group and
determined that the most significant are the companies
Act 2006, accounting standards, AIM Rules and the
Corporation Tax Act 2010. We identified these areas of laws
and regulations as those that could reasonably be expected
to have a material effect on the financial statements from
sector experience and through discussion with the Directors
and other management.

We assessed compliance with the these laws and
regulations through enquiry with management and the
Audit Committee, review of reporting to Directors with
respect to compliance with laws and regulations, review of
board meeting minutes and review of legal correspondence.

We assessed the susceptibility of the Group’s financial
statements to material misstatement, including how fraud
might occur. In addressing the risk of fraud including
management override of controls, we have performed
journals testing based on a set of fraud risk criteria and
tested to supporting documentation also verifying the
business rationale. This criteria included round sum
posted journals, material journals, unexpected account
combinations, unusual journal descriptions and authorised
users testing. Other procedures in response to management
override included checking discretionary bonus payments
to approval from the remuneration committee, challenging
management on the rationale for the defects provision and
potential senior management influence on adequacy of
the provision by corroborating management’s assumptions
and further challenging retention provisions on similar
projects. We also incorporated unpredictability procedures
as part of our response to the risk of management override
of controls. We addressed the risk of fraud in revenue
recognition through testing of manual entries impacting
reported revenue as well as cut-off. We analysed the journal
entries made to revenue account codes across the Group
and investigated the reason for journal entries made that

appeared unusual and not in line with our expected transaction
flows. We agreed management’s explanations back through to
supporting documentation. For cut-off, please refer to the key audit
matter section above.

We also communicated relevant identified laws and regulations
and potential fraud risks to all engagement team members and
remained alert to any indications of fraud or non-compliance with
laws and regulations throughout the audit.

Our audit procedures were designed to respond to risks of material
misstatement in the financial statements, recognising that the risk
of not detecting a material misstatement due to fraud is higher
than the risk of not detecting one resulting from error, as fraud
may involve deliberate concealment by, for example, forgery,
misrepresentations or through collusion. There are inherent
limitations in the audit procedures performed and the further
removed non-compliance with laws and regulations is from the
events and transactions reflected in the financial statements, the
less likely we are to become aware of it.

A further description of our responsibilities is available on
the Financial Reporting Council’s website at: www.frc.org.uk/
auditorsresponsibilities. This description forms part of our
auditor’s report.

Use of our report
This report is made solely to the Parent Company’s members, as a
body, in accordance with Chapter 3 of Part 16 of the Companies
Act 2006. Our audit work has been undertaken so that we might
state to the Parent Company’s members those matters we are
required to state to them in an auditor’s report and for no other
purpose. To the fullest extent permitted by law, we do not accept
or assume responsibility to anyone other than the Parent Company
and the Parent Company’s members as a body, for our audit work,
for this report, or for the opinions we have formed.

Sarah Applegate (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
Bristol, UK
4 August 2021

BDO LLP is a limited liability partnership registered in England and
Wales (with registered number OC305127).

C O R P O R A T E G O V E R N A N C E

Financial Statements

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2021

All results relate to continuing operations.

2021 Other items2020 Other items NotesAdjusted £’000(Note 14) £’000Total £’000Adjusted£’000(Note 14)£’000Total£’000Revenue5181,084-181,084187,126-187,126Cost of sales (143,112)-(143,112)(149,442)-(149,442)Gross profit 37,972-37,97237,684-37,684Other operating income792-9226-26Administrative expenses(20,181)(443)(20,624)(17,710)(56)(17,766)Impairment losses on financial assets25(341)-(341)(433)-(433)Depreciation and amortisation(1,837)(3,619)(5,456)(1,312)(3,075)(4,387)Finance income1113-1371-71Finance expense12(718)(127)(845)(1,310)(1,217)(2,527)Share of post-tax loss of equity accounted associates22-(6)(6)-(32)(32)Fair value gains/ (losses)13-360360-(45)(45)Exceptional income14----2,0002,000Exceptional expenses14----(2,407)(2,407)Profit before tax 815,000(3,835)11,16517,016(4,832)12,184Tax expense15(2,193)687(1,506)(2,905)12(2,893)Profit for the year and total comprehensive income12,807(3,148)9,65914,111(4,820)9,291Attributable to:Equity holders of the parent12,813(3,148)9,66514,111(4,820)9,291Non-controlling interests(6)-(6)---12,807(3,148)9,65914,111(4,820)9,291Earnings per shareBasic earnings per share17 4.19 p 4.79 pDiluted earnings per share174.18 p4.77 pAdjusted basic earnings per share175.56 p7.27 pAdjusted diluted earnings per share175.54 p7.25 pCONSOLIDATED BALANCE SHEET
AS AT 31 MARCH 2021

These financial statements were approved by the Board of Directors and authorised for issue on 4 August 2021. They are signed on behalf of
the Board by:

Alan Simpson Director

Mike Gant Director

Company registration number: 11123804

F I N A N C I A L S T A T E M E N T S

Notes2021£’0002020£’000Non-current assets Property, plant and equipment 189,1254,173Right of use assets 297,9456,375Intangible assets 1976,84878,050Investments in equity accounted associates 22221352Investments in financial assets23125-Deferred tax assets 3198205Trade and other receivables 25460391Total non-current assets 94,82289,546Current assetsInventories2412,1279,791Trade and other receivables2542,83236,560Cash and cash equivalents268,59227,269Total current assets63,55173,620Total assets158,373163,166Current liabilitiesTrade and other payables27(38,769)(41,912)Current income tax liabilities(426)(277)Lease liabilities29(1,497)(776)Total current liabilities(40,692)(42,965)Non-current liabilitiesTrade and other payables27(3,153)(2,402)Loans and borrowings28(15,750)(24,912)Lease liabilities29(6,796)(5,802)Provisions30(1,247)(1,389)Deferred tax liabilities31(5,301)(5,631)Total non-current liabilities(32,247)(40,136)Total liabilities(72,939)(83,101)Net assets85,43480,065EquityCalled up share capital342,3052,305Share premium account 3549,99949,999Capital redemption reserve3522Share-based payment reserve3526656Merger reserve351,2451,245Retained earnings3531,62326,458Equity attributable to equity holders of the parent85,44080,065Non-controlling interests(6)-Total equity85,43480,065

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 MARCH 2021

Notes

2021
2021
£’000
£’000

2020
2020
£’000
£’000

6,542

9,343

6,542

9,343

15,885

75,482

79,819

75,504

79,819

91,389

95,704

(10,084)

(166)

(15)

(181)

(15,750)

(24,912)

(15,750)

(24,912)

(25,834)

(25,093)

65,555

70,611

2,305

49,999

266

6,506

6,477

65,555

6,506

11,743

70,611

COMPANY BALANCE SHEET
COMPANY BALANCE SHEET
AS AT 31 MARCH 2021
AS AT 31 MARCH 2021

Non-current assets

Investment in subsidiaries

Trade and other receivables

Total non-current assets

Current assets

Trade and other receivables

Cash and cash equivalents

Total current assets

Total assets

Current liabilities

Trade and other payables

Current income tax liabilities

Total current liabilities

Non-current liabilities

Loans and borrowings

Total non-current liabilities

Total liabilities

Net assets

Equity

Called up share capital

Share premium account

Capital redemption reserve

Share-based payment reserve

Merger reserve

Retained earnings

Total equity

The loss of the Company for the financial year was £766,000 (2020: £175,000 profit).

These financial statements were approved by the Board of Directors and authorised for
issue on 4 August 2021. They are signed on behalf of the board by:

Alan Simpson Director
Alan Simpson Director

Mike Gant Director

Company registration number: 11123804

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F I N A N C I A L S T A T E M E N T S

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2021
FOR THE YEAR ENDED 31 MARCH 2021

F I N A N C I A L S T A T E M E N T S

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Share capital£’000Share premium account £’000Capital redemption£’000Share-based payments£’000Merger reserve£’000RetainedEarnings£’000Total attributable to equity holders of the parent£’000Non- controlling interest£’000Total£’000At 1 April 201948,970--1,2456,16716,386-16,386Profit for the year-----9,2919,291-9,291Total comprehensive income for the year-----9,2919,291-9,291Dividends paid-----(2,000)(2,000)-(2,000)Issue of paid shares (note 37)67844,223----44,901-44,901Bonus issue of shares1,429(1,429)-------Conversion of debt to equity (note 37)19613,736----13,932-13,932Purchase of own shares(2)-2------Increase in share-based payment reserve---56--56-56Share issue costs-(2,501)----(2,501)-(2,501)Share premium reduction-(13,000)---13,000---Total contributions by and distributions to owners2,30141,029256-11,00054,388-54,388At 31 March 20202,30549,9992561,24526,45880,065-80,065Profit or (loss) for the year-----9,6659,665(6)9,659Total comprehensive income for the year-----9,6659,665(6)9,659Dividends paid-----(4,500)(4,500)-(4,500)Increase in share-based payment reserve---210--210-210Total contributions by and distributions to owners ---210-(4,500)(4,290)-(4,290)At 31 March 20212,30549,99922661,24531,62385,440(6)85,434Share capital£’000Share premium account £’000Capital redemption£’000Share-based payments£’000Merger reserve£’000RetainedEarnings£’000Total attributable to equity holders of the parent£’000Non- controlling interest£’000Total£’000At 1 April 201948,970--1,2456,16716,386-16,386Profit for the year-----9,2919,291-9,291Total comprehensive income for the year-----9,2919,291-9,291Dividends paid-----(2,000)(2,000)-(2,000)Issue of paid shares (note 37)67844,223----44,901-44,901Bonus issue of shares1,429(1,429)-------Conversion of debt to equity (note 37)19613,736----13,932-13,932Purchase of own shares(2)-2------Increase in share-based payment reserve---56--56-56Share issue costs-(2,501)----(2,501)-(2,501)Share premium reduction-(13,000)---13,000---Total contributions by and distributions to owners2,30141,029256-11,00054,388-54,388At 31 March 20202,30549,9992561,24526,45880,065-80,065Profit or (loss) for the year-----9,6659,665(6)9,659Total comprehensive income for the year-----9,6659,665(6)9,659Dividends paid-----(4,500)(4,500)-(4,500)Increase in share-based payment reserve---210--210-210Total contributions by and distributions to owners ---210-(4,500)(4,290)-(4,290)At 31 March 20212,30549,99922661,24531,62385,440(6)85,434

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 MARCH 2021

COMPANY STATEMENT OF
COMPANY STATEMENT OF
CHANGES IN EQUITY FOR THE
CHANGES IN EQUITY FOR THE
YEAR ENDED 31 MARCH 2021
YEAR ENDED 31 MARCH 2021

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F I N A N C I A L S T A T E M E N T S

The Consolidated Statement of Cash Flows continues on the following page.

Share capital£’000Share premium account £’000Capital redemption£’000Share based payments£’000Merger Reserve£’000RetainedEarnings£’000Total£’000At 1 April 201948,970--6,50656816,048Profit for the year-----175175Total comprehensive income for the year-----175175Dividends paid-----(2,000)(2,000)Issue of paid shares (note 37)67844,223----44,901Bonus issue of shares1,429(1,429)-----Conversion of debt to equity (note 37)19613,736----13,932Purchase of own shares(2)-2----Increase in share-based payment reserve---56--56Share issue costs-(2,501)----(2,501)Share premium reduction-(13,000)---13,000-Total contributions by and distributions to owners2,30141,029256-11,00054,388At 31 March 20202,30549,9992566,50611,74370,611Loss for the year-----(766)(766)Total comprehensive income for the year-----(766)(766)Dividends paid-----(4,500)(4,500)Increase in share-based payment reserve---210--210Total contributions by and distributions to owners ---210-(4,500)(4,290)At 31 March 20212,30549,99922666,5066,47765,555Share capital£’000Share premium account £’000Capital redemption£’000Share based payments£’000Merger Reserve£’000RetainedEarnings£’000Total£’000At 1 April 201948,970--6,50656816,048Profit for the year-----175175Total comprehensive income for the year-----175175Dividends paid-----(2,000)(2,000)Issue of paid shares (note 37)67844,223----44,901Bonus issue of shares1,429(1,429)-----Conversion of debt to equity (note 37)19613,736----13,932Purchase of own shares(2)-2----Increase in share-based payment reserve---56--56Share issue costs-(2,501)----(2,501)Share premium reduction-(13,000)---13,000-Total contributions by and distributions to owners2,30141,029256-11,00054,388At 31 March 20202,30549,9992566,50611,74370,611Loss for the year-----(766)(766)Total comprehensive income for the year-----(766)(766)Dividends paid-----(4,500)(4,500)Increase in share-based payment reserve---210--210Total contributions by and distributions to owners ---210-(4,500)(4,290)At 31 March 20212,30549,99922666,5066,47765,555Notes2021£’0002020£’000Operating activities Profit for the year9,6599,291Adjustments for: Depreciation of property, plant and equipment18726595 Depreciation of right of use assets291,111717 Amortisation of intangible assetss193,6193,059 Loss/ (Gain) on disposal of property, plant & equipment and right of use assets84(8) Foreign exchange (gains)/ losses(19)4 Share-based payments expense3633856 Share of post-tax loss in equity accounted associates22632 Impairment of goodwill19-16 Fair value changes in contingent consideration13(360)45 Movements in provisions30(142)(586) Finance income11(13)(71) Finance expense128452,527 Acquisition/ exceptional expenses141052,407 Income tax expense151,5062,893 Amortisation of loan note issue costs -2Operating cash flows before movements in working capital17,38520,979Changes in working capital: Increase in inventories(2,011)(1,890) (Increase)/ Decrease in trade and other receivables(4,077)6,862 Increase/ (Decrease) in trade and other payables1,792(5,024)Cash generated from operations13,08920,927Payment of exceptional acquisition expenses (105)(320)Interest received 1370Interest paid(367)(6,049)Income taxes paid(2,435)(4,710)Net cash generated from operating activities10,1959,918Investing activitiesPurchase of property, plant and equipment 18(5,669)(941)Proceeds from sale of property, plant and equipment5925Purchase of right of use assets 29-(32)Proceeds from sale of right of use assets9-Acquisition of subsidiaries 21(2,548)(11,426)Net cash acquired with subsidiary undertakings 212,2745,146Dividends received from associates22-33Net cash used in investing activities(5,875)(7,195)CONSOLIDATED STATEMENT OF CASH FLOWS
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2021
FOR THE YEAR ENDED 31 MARCH 2021

The Consolidated Statement of Cash Flows continues on the following page.

F I N A N C I A L S T A T E M E N T S

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65

Notes2021£’0002020£’000Operating activities Profit for the year9,6599,291Adjustments for: Depreciation of property, plant and equipment18726595 Depreciation of right of use assets291,111717 Amortisation of intangible assetss193,6193,059 Loss/ (Gain) on disposal of property, plant & equipment and right of use assets84(8) Foreign exchange (gains)/ losses(19)4 Share-based payments expense3633856 Share of post-tax loss in equity accounted associates22632 Impairment of goodwill19-16 Fair value changes in contingent consideration13(360)45 Movements in provisions30(142)(586) Finance income11(13)(71) Finance expense128452,527 Acquisition/ exceptional expenses141052,407 Income tax expense151,5062,893 Amortisation of loan note issue costs -2Operating cash flows before movements in working capital17,38520,979Changes in working capital: Increase in inventories(2,011)(1,890) (Increase)/ Decrease in trade and other receivables(4,077)6,862 Increase/ (Decrease) in trade and other payables1,792(5,024)Cash generated from operations13,08920,927Payment of exceptional acquisition expenses (105)(320)Interest received 1370Interest paid(367)(6,049)Income taxes paid(2,435)(4,710)Net cash generated from operating activities10,1959,918Investing activitiesPurchase of property, plant and equipment 18(5,669)(941)Proceeds from sale of property, plant and equipment5925Purchase of right of use assets 29-(32)Proceeds from sale of right of use assets9-Acquisition of subsidiaries 21(2,548)(11,426)Net cash acquired with subsidiary undertakings 212,2745,146Dividends received from associates22-33Net cash used in investing activities(5,875)(7,195)Notes2021£’0002020£’000Operating activities Profit for the year9,6599,291Adjustments for: Depreciation of property, plant and equipment18726595 Depreciation of right of use assets291,111717 Amortisation of intangible assetss193,6193,059 Loss/ (Gain) on disposal of property, plant & equipment and right of use assets84(8) Foreign exchange (gains)/ losses(19)4 Share-based payments expense3633856 Share of post-tax loss in equity accounted associates22632 Impairment of goodwill19-16 Fair value changes in contingent consideration13(360)45 Movements in provisions30(142)(586) Finance income11(13)(71) Finance expense128452,527 Acquisition/ exceptional expenses141052,407 Income tax expense151,5062,893 Amortisation of loan note issue costs -2Operating cash flows before movements in working capital17,38520,979Changes in working capital: Increase in inventories(2,011)(1,890) (Increase)/ Decrease in trade and other receivables(4,077)6,862 Increase/ (Decrease) in trade and other payables1,792(5,024)Cash generated from operations13,08920,927Payment of exceptional acquisition expenses (105)(320)Interest received 1370Interest paid(367)(6,049)Income taxes paid(2,435)(4,710)Net cash generated from operating activities10,1959,918Investing activitiesPurchase of property, plant and equipment 18(5,669)(941)Proceeds from sale of property, plant and equipment5925Purchase of right of use assets 29-(32)Proceeds from sale of right of use assets9-Acquisition of subsidiaries 21(2,548)(11,426)Net cash acquired with subsidiary undertakings 212,2745,146Dividends received from associates22-33Net cash used in investing activities(5,875)(7,195)CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021

The notes on pages 66 to 113 form part of these financial statements.

NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 MARCH 2021
1. General information
Brickability Group plc is a company incorporated in England and
Wales. The address of the registered office is shown on page 114.
The nature of the Group’s operations and its principal activities are
set out in the Strategic Report on pages 4 to 29.

2. Basis of preparation
The consolidated financial statements have been prepared in
accordance with international accounting standards in conformity
with the requirements of the Companies Act 2006.
The Company, as the ultimate parent of the Group, has elected
prepare its individual financial statements in accordance with FRS 101
Reduced Disclosure Framework. The Company’s individual financial
statements are presented within these Group financial statements.
The Company has adopted the following disclosure exemptions:
i. the requirements of IFRS 7 Financial Instruments: Disclosures;
ii. the requirement to present a cash flow statement under IAS 7

Statement of Cash Flows;

iii. the requirement to disclose key management personnel

compensation; and

iv. the requirement to disclose related party transactions with wholly

owned members of the Group.

The financial statements are presented in pounds sterling, which is
the functional currency of the Group. Amounts are rounded to the
nearest thousand, unless otherwise stated.

The financial statements are prepared on the historical cost basis,
with the exception of certain financial assets and liabilities (including
derivative financial instruments) which are stated at fair value.
After making appropriate enquiries, the Directors have a reasonable
expectation that the Company and Group have adequate resources
to continue in operational existence for the foreseeable future and
for at least twelve months from the date of signing these financial
statements. For this reason, they continue to adopt the going
concern basis in preparing the financial statements. The Group’s
going concern basis has been considered further on pages 26 and
27 of the Strategic Report.

New standards, interpretations and amendments effective
from 1 January 2020
The following new standards and amendments have been
adopted by the Group for the first time in the annual financial
statements for the year ended 31 March 2021:
• Definition of material (amendments to IAS 1 and IAS 8);
• Definition of a business (amendments to IFRS 3);
• Interest rate benchmark reform (amendments to IFRS 9, IAS 39

and IFRS 7);

• COVID-19 related rent concessions (amendments to IFRS 16); and
• Revised conceptual framework for financial reporting.
The amendments listed above did not have any impact on the
amounts recognised in prior periods and are not expected to
significantly affect the current or future periods.

Notes2021£’0002020£’000Financing activitiesEquity dividends paid16(4,500)(2,000)Proceeds from issue of ordinary shares-43,923Payment of share issue costs-(414)Payment of exceptional financing costs-(490)Proceeds from bank borrowings3,40013,015Repayment of bank borrowings(12,500)(25,000)Repayment of loan notes-(14,562)Payment of lease liabilities29(1,398)(871)Payment of deferred and contingent consideration37(7,883)(5,885)Payment of transaction costs relating to loans and borrowings(90)(70)Settlement of derivative financial instruments37-(105)Net cash (used in)/ generated from financing activities(22,971)7,541Net increase in cash and cash equivalents(18,651)10,264Cash and cash equivalents at beginning of year27,26917,001Effect of changes in foreign exchange rates(26)4Cash and cash equivalents at end of year268,59227,269
Amendments to IFRS 16: COVID-19 Related Rent Concessions
Effective 1 June 2020, IFRS 16 was amended to provide a
practical expedient for lessees accounting for rent concessions
that arise as a direct consequence of the COVID-19 pandemic
and satisfy the following criteria:
i. The change in lease payments results in revised consideration
for the lease that is substantially the same as, or less than, the
consideration for the lease immediately preceding the change;
ii. The reduction in lease payments affects only payments originally

due on or before 30 June 2021; and

iii. There is no substantive change to other terms and conditions of

the lease.

Rent concessions that satisfy the above criteria may be accounted for
in accordance with the practical expedient, which means lessees do
not need to assess whether the rent concession meets the definition of
a lease modification. Lessees apply other requirements in IFRS 16 in
accounting for the concession.
The Group has elected to utilise the practical expedient for all eligible
rent concessions. The practical expedient has also been applied
retrospectively to those rent concessions meeting the criteria from 1
April 2020 to 31 May 2020.
Accounting for the rent concessions as lease modifications would
have resulted in the Group remeasuring the lease liability to reflect the
revised consideration using a revised discount rate, with the effect of
the change in the lease liability being recorded against the right of use
asset. By applying the practical expedient, the Group is not required
to determine a revised discount rate and the effect of the change in
the lease liability is reflected in profit or loss in the period in which the
event or condition that triggers the concession occurs. The impact of
applying the practical expedient is disclosed in note 29.
New standards, interpretations and amendments not yet effective
Certain new standards and amendments have been issued by
the IASB and will be effective in future accounting periods. The
standards and amendments that are not yet effective, are likely
to impact the Group and have not been adopted early by the
Group include:
• References to the Conceptual Framework (amendments to IFRS 3);
• Proceeds before intended use (amendments to IAS 16);
• Onerous contracts – cost of fulfilling a contract (amendments to IAS 37);
• Annual improvements to IFRS standards 2018-2020 cycle
(amendments to IFRS 1, IFRS 9, IFRS 16 and IAS 41); and
• Classification of liabilities as current or non-current
(amendments to IAS 1).
The above amendments are not expected to have a significant impact
on the period of initial application or in subsequent reporting periods.

3. Significant accounting policies
The accounting policies which follow set out those policies which
were applied in preparing the financial statements for the year
ended 31 March 2021.

3.1 Basis of consolidation
The consolidated financial statements comprise the financial
statements of Brickability Group plc and its subsidiary
undertakings. Control is achieved when the Group:
• has power over the investee;
• is exposed or has rights to variable returns from its involvement
with the investee; and
• has the ability to use its power to affect those variable returns.
The results of subsidiaries acquired or disposed of during the year
are included from or to the date that control passes.

Intra-group transactions and balances are eliminated fully on
consolidation and the consolidated financial statements reflect
external transactions only. Subsidiaries’ accounting policies are
amended where necessary to ensure consistency with the policies
adopted by the Group.
All accounts for subsidiary undertakings have been prepared
for the year ended 31 March 2021, except Forum Tiles Limited
which was incorporated in January 2021. Its first set of financial
statements will be prepared for the period ending 31 March
2022. The Group accounts therefore include interim financial
information to 31 March 2021 for this entity.
In the prior year, all subsidiary undertakings prepared accounts
for the year ended 31 March 2020, except for McCann Roofing
Products Limited and U Plastics Limited, which both had a year
end of 31 December 2019. The comparative figures therefore
include interim financial information to 31 March 2020 for each of
these entities, following their acquisition.
The Company has applied the exemption under section 408 of the
Companies Act 2006 and not presented its individual income statement.

3.2 Investments
Non-current asset investments by the Company in subsidiaries
and associates are initially recorded at cost and subsequently
stated at cost less any accumulated provision for impairment.

3.3 Investment in associates
An associate is an entity over which the Group has significant
influence. Significant influence is the power to participate in the
financial and operating policy decisions of the investee but is not
control or joint control over those policies.
Investments in associates are accounted for using the equity
method of accounting. Under the equity method, investments are
initially recognised at cost and subsequently adjusted to reflect
changes in the Group’s share of the net assets of the associate or
joint venture since the acquisition date.
Where a Group company transacts with an associate of the
Group, unrealised profits and losses are eliminated to the extent
of the Group’s interest in the relevant entity.
3.4 Revenue recognition
Revenue is recognised when the Group has satisfied its performance
obligations to the customer. Revenue is measured at the fair value
of the consideration received or receivable and represents amounts
receivable for goods and services provided in the normal course of
business, net of discounts and Value Added Tax.
The Group generates revenue primarily through the
following activities:
• the sale of superior quality building materials to all sectors of
the construction industry including national house builders,
developers, contractors, general builders and retail to members
of the public;
• the transportation and distribution of building materials from
Europe to the UK;
• the supply of roofing construction services, primarily within the
residential construction sector; and
• the sale of high-performance joinery materials and the
distribution of radiators and associated parts and accessories.
The Group considers itself to be the principal in its revenue
arrangements as it typically controls the goods or services
before transferring them to the customer; the Group is primarily
responsible for fulfilling its promise to provide the goods or services
and for those goods or services meeting customer specifications,
it assumes the inventory risk prior to delivery to the customer and it
has complete discretion in setting its prices for the required goods
or services.

F I N A N C I A L S T A T E M E N T S

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
YEAR ENDED 31 MARCH 2021

3.4 Revenue recognition (continued) Revenue from the sale of goods is recognised when control of the goods has transferred to the buyer. This is usually when the goods are delivered to the customer. Revenue from the provision of transportation and distribution services is also recognised on delivery of the materials being transported as this is the point at which the service is complete. There is limited judgement required in identifying the point at which the service is complete or control passes as, once physical delivery has taken place, the Group no longer has possession of the goods, does not retain the significant risks and rewards of those goods and has an unconditional right to consideration. A receivable is therefore recognised on delivery and payment expected according to the specific credit terms agreed with each customer.Revenue from contracts for the provision of services, in relation to roof installations, is recognised over time by reference to the stage of completion. Jobs in progress are reviewed and invoiced at the end of each month to reflect the value of work carried out in the period. This is considered an appropriate measure of the progress towards complete satisfaction of the Group’s performance obligations and reflects the Group’s right to consideration for services performed to date. Payment is due throughout the duration of the contract, based on the amounts invoiced and according to the credit terms agreed.Certain roofing products and services provided by the Group are subject to warranty, requiring the Group to rectify defects during the warranty period should those goods and services not comply with agreed-upon specifications. Such warranties cannot be purchased separately and are therefore accounted for in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets. Further details are disclosed in notes 3.17 and 30.The majority of the Group’s revenue is derived from fixed price contracts with stand-alone selling prices. There is therefore no judgement involved in allocating the contract price to the goods or services provided.The Group has applied the practical expedients within IFRS 15 in respect of the following:• not accounting for significant financing components where the time difference between receiving consideration and transferring control of the goods or services to its customers is one year or less; and• expensing the incremental costs of obtaining a contract when the amortisation period of the asset otherwise recognised is one year or less.Customer rebates The Group offers customer rebates in respect of volume discounts. These customer rebates give rise to variable consideration. Where the consideration in a contract includes a variable amount, the Group estimates the amount of consideration to which it will be entitled in exchange for transferring its goods to the customer. The Group applies the most likely amount method to estimate the variable consideration in the contract.Where the Group has rebate agreements with its customers, rebates payable are deducted from revenue in the period that the associated revenue is recognised. The value of rebates payable is based on the terms of the individual contracts in place, to the extent that it is highly probable that the variable consideration estimated will not result in a significant reversal in the amount of cumulative revenue recognised when the uncertainty associated with the variable contract is subsequently resolved.3.5 Foreign currencies The individual financial statements of each Group company are presented in the currency of the primary economic environment in which it operates (its functional currency). The results and financial position of each Group company are expressed in pounds sterling, which is also the functional currency of the Company and the presentation currency for the consolidated financial statements.Transactions in foreign currencies are initially recorded in the functional currency by applying the spot exchange rate on the dates of the transactions. Monetary assets and liabilities, that are denominated in foreign currencies, are retranslated at the exchange rates ruling at the reporting date. Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are included in profit or loss for the year.Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction and not retranslated at the reporting date. Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rate at the date at which the fair value is determined.3.6 Group pension schemes Payments to defined contribution retirement benefit schemes are recognised as an expense in the period in which the related service is provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund.3.7 Government grants Government grants are recognised where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. Grants relating to expense items are recognised as income on a systemic basis over the period that the related costs, for which the grant is intended to compensate, are expensed. Grants relating to assets are recognised as deferred income and transferred to income in the profit or loss on a systemic basis over the expected useful life of the related assets. Further details regarding grants received during the year are outlined in note 8.3.8 Taxation The tax expense represents the sum of the tax currently payable and deferred tax. Tax is recognised in the Statement of Profit or Loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is recognised in other comprehensive income or directly in equity, respectively.Current tax Current tax is the expected tax payable or recoverable based on taxable profit for the year and any adjustment to tax payable in respect of prior years. Current tax is calculated using tax rates and laws that have been enacted or substantively enacted at the reporting date.Deferred tax Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. It is accounted for using the liability method.Deferred tax assets and liabilities are recognised where the
carrying value of an asset or liability in the Consolidated Balance
Sheet differs from its tax base, except for differences arising on:
• the initial recognition of goodwill;
• the initial recognition of an asset or liability in a transaction
which is not a business combination and at the time of the
transaction affects neither accounting or taxable profit; and
• investments in subsidiaries and joint arrangements where
the Group is able to control the timing of the reversal of the
difference and it is probable that the difference will not reverse in
the foreseeable future.

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

The carrying amount of deferred tax assets is reviewed at each
reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow
all or part of the asset to be recovered. Unrecognised deferred
tax assets are also re-assessed at each reporting date and
recognised to the extent that it has become probable that future
taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates
that are expected to apply in the year when the asset is realised
or the liability is settled, based on the tax rates and laws that have
been enacted or substantively enacted at the reporting date.

Deferred tax assets and liabilities are offset when there is a legally
enforceable right to set off current tax assets against current tax
liabilities and when the deferred tax assets and liabilities relate
to income taxes levied by the same taxation authority on either
the same taxable group company or different taxable group
companies which intend either to settle current tax assets and
liabilities on a net basis, or to realise the assets and settle the
liabilities simultaneously, in each future period in which significant
amounts of deferred tax assets or liabilities are expected to be
recovered or settled.

3.9 Property, plant and equipment
Property, plant and equipment is initially recorded at cost and
subsequently stated at cost less any accumulated depreciation
and impairment losses.
Depreciation is charged so as to write off the cost or valuation
of an asset, less its residual value, over the estimated useful
life of that asset, using the straight-line or reducing balance
method, as follows:

Freehold land is not depreciated.

3.10 Leases
The Group assesses, at the inception of a contract, whether a
contract is, or contains, a lease. A contract is, or contains, a lease
if it conveys the right to control the use of an identified asset for a
period of time in exchange for consideration. Control is conveyed
when the Group has both the right to direct the identified asset’s use
and to obtain substantially all the economic benefits from that use.
For contracts that both convey a right to the Group to use an
identified asset and require services to be provided to the Group
by the lessor, the Group has elected not to separate non-lease
components and thus account for the entire contract as a lease.
Lessee accounting
All leases are accounted for by recognising a right of use asset
and a lease liability except for:
• leases of low value assets; and
• leases with a term of 12 months or less.
Lease payments for short-term (those with a term of 12 months
or less) and low value asset leases are recognised as an expense,
in the Statement of Profit or Loss, on a straight-line basis over the
lease term.
Right of use assets
At the lease commencement date, right of use assets are
measured at the amount of the corresponding lease liability, less
any lease incentives received, plus the following:
• lease payments made at or before the lease commencement date;
• initial direct costs incurred; and
• the amount of any provision recognised where the Group is
contractually obliged to dismantle, remove or restore the leased
asset or site on which the leased asset is located.
Right of use assets are presented as a separate line in the
Consolidated Balance Sheet.
Right of use assets are subsequently measured at cost less
accumulated depreciation and impairment losses.
Right of use assets are depreciated, on a straight-line basis,
over the shorter period of the lease term and useful life of the
underlying asset. If a lease transfers ownership of the underlying
asset, or the cost reflects that the Group expects to exercise a
purchase option, the related right of use asset is depreciated over
the useful life of the asset.
Lease liabilities
At the lease commencement date, lease liabilities are measured
at the present value of the lease payments due to the lessor over
the lease term, discounted at the rate implicit in the lease, where
this can be readily determined. Where the rate cannot be readily
determined, the Group uses its incremental borrowing rate.
Lease payments included in the measurement of the lease liability
include:
• fixed lease payments (including in-substance fixed payments),
less any lease incentives receivable;
• variable lease payments that depend on an index or rate;
• amounts expected to be paid under residual value guarantees;
• the exercise price of any purchase option, if it is reasonably
certain to be exercised by the Group; and
• any penalties payable for terminating the lease, if the lease term
reflects the Group exercising the option to terminate.
Variable lease payments that do not depend on an index or a rate
are recognised as an expense, in the Statement of Profit or Loss,
in the period to which they relate.

F I N A N C I A L S T A T E M E N T S

Freehold property2% – 25% per annumLeasehold propertyOver the term of the leasePlant and machinery20% to 33% per annumFixtures, fittings and equipment10% to 33% per annumMotor vehicles10% to 25% per annumNOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
YEAR ENDED 31 MARCH 2021

3.10 Leases (continued)
Lease liabilities are presented as a separate line in the Consolidated
Balance Sheet.
Lease liabilities are subsequently increased to reflect interest
charged on the lease liability, using the effective interest method,
and reduced for lease payments made.
Lease liabilities are remeasured if there is a modification (and the
lease modification is not accounted for as a separate lease), a
change in the lease term, a change in the lease payments due to
changes in an index or rate, a change in the expected payment
under a guaranteed residual value or a change in the assessment
to exercise a purchase option.
In the event of a lease modification, change in lease term or
change in the assessment of a purchase option, the lease liability
is remeasured by discounting the revised lease payments using a
revised discount rate.
In the event of a change in the lease payments, the lease liability
is remeasured by discounting the revised lease payments using
an unchanged discount rate, unless the lease payment change is
due to a change in a floating interest rate, in which case a revised
discount rate is used.
When a lease liability is remeasured, a corresponding adjustment is
made to the carrying value of the right of use asset, with the revised
asset value being depreciated over the remaining lease term.

Lessor accounting
The Group enters into lease agreements as a lessor in respect of
sub-leasing some of its leasehold property. Where the Group is an
intermediate lessor, it accounts for the head lease and the sub-
lease as two separate contracts. The sub-lease is classified as an
operating lease by reference to the right of use asset arising from
the head lease.
Rental income from operating leases is recognised on a straight-
line basis over the term of the lease. Initial direct costs incurred in
negotiating and arranging an operating lease are added to the
carrying amount of the underlying asset and recognised on a
straight-line basis over the lease term.

3.11 Intangible assets
Intangible assets acquired separately are initially recognised at
cost. The cost of intangible assets acquired as part of a business
combination is their fair value at the acquisition date. Intangible
assets are subsequently stated at cost less any accumulated
amortisation and impairment losses.
Amortisation is charged so as to write off the cost of the asset, less
its residual value, over the estimated useful life of that asset, using
the straight-line method, as follows:

If there is an indication that there has been a change in the
amortisation rate, useful life or residual value of an intangible
asset, the amortisation charge is revised prospectively to reflect
the new estimates.

3.12 Research and development
Expenditure on research activities is recognised as an expense
in the period in which it is incurred. Development costs are only
recognised as an intangible asset if, and only if, the Group can
demonstrate all of the following:
• the technical feasibility to complete the development so that
the asset will be available for use or sale;
• its intention to complete the intangible asset and use or sell it;
• its ability to use or sell the intangible asset;
• how the intangible asset will generate probable economic
benefits;
• the availability of adequate technical, financial and other
resources to complete the development and to use or sell the
asset; and
• its ability to measure reliably the expenditure attributable to
the intangible asset during its development.

3.13 Business combinations and goodwill
Business combinations are accounted for using the acquisition
method. The cost of an acquisition is measured as the
aggregate of the consideration transferred, measured at
acquisition date fair value, and the amount of any non-
controlling interests in the acquiree. For each business
combination, the Group elects whether to measure the
non-controlling interests in the acquiree at fair value or the
proportionate share of the acquiree’s identifiable net assets.
Acquisition related costs are expensed as incurred and
included in profit or loss.
When the Group acquires a business, it assesses the financial
assets and liabilities assumed for appropriate classification
and designation in accordance with the contractual terms,
economic circumstances and pertinent conditions as at the
acquisition date. This includes the separation of embedded
derivatives in host contracts by the acquiree.
If the business combination is achieved in stages, any
previously held equity interest is remeasured at its acquisition
date fair value and any resulting gain or loss is recognised in
profit or loss.

Brands10% – 12% per annumCustomer and supplier relationships and other intangibles 10% – 25% per annumContingent consideration is recognised at fair value at the
acquisition date. Contingent consideration classified as equity
is not remeasured and its subsequent settlement is accounted
for within equity. Contingent consideration classified as an
asset or liability that is a financial instrument, and within
the scope of IFRS 9 Financial Instruments, is measured at
fair value at the reporting date with changes in fair value
recognised in the Statement of Profit or Loss in accordance
with IFRS 9. Other contingent consideration, that is not within
the scope of IFRS 9, is measured at fair value at each reporting
date, with changes in fair value recognised in profit or loss.
Goodwill is initially measured at cost, being the excess of the
aggregate of the consideration transferred and the amount
recognised for non-controlling interests, and any previous
interest held, over the net identifiable assets acquired and
liabilities assumed. If the fair value of the net assets acquired
is in excess of the aggregate consideration transferred, the
Group reassesses whether it has correctly identified all of
the assets acquired and all of the liabilities assumed and
reviews the procedures used to measure the amounts to be
recognised at the acquisition date. If the reassessment still
results in an excess of the fair value of net assets acquired
over the aggregate consideration transferred, then the gain is
recognised in profit or loss.
After initial recognition, goodwill is measured at cost less
any accumulated impairment losses. For the purpose
of impairment testing, goodwill acquired in a business
combination is, from the acquisition date, allocated to each of
the Group’s cash-generating units that are expected to benefit
from the combination, irrespective of whether other assets or
liabilities of the acquiree are assigned to those units.
Where goodwill has been allocated to a cash-generating unit
and part of the operation within that unit is disposed of, the
goodwill associated with the disposed operation is included
in the carrying amount of the operation when determining
the gain or loss on disposal. Goodwill disposed of in these
circumstances is remeasured based on the relative values of
the disposed operation and the portion of the cash-generating
unit retained.

3.14 Impairment of non-financial assets
The Group assesses, at each reporting date, whether there is
an indication that an asset may be impaired. If any indication
exists, or when annual impairment testing for an asset is
required, the Group estimates the recoverable amount of the
asset. The recoverable amount is the higher of the value in use
and the fair value less costs of disposal.
The recoverable amount is determined for an individual
asset, unless the asset does not generate cash inflows that
are largely independent of those from other assets or groups

of assets, in which case the recoverable amount is estimated
for the smallest group of assets to which it belongs and for
which there are separately identifiable cash flows (its cash
generating unit (CGU)).
When the carrying value of an asset or CGU exceeds its
recoverable amount, the asset is considered impaired and is
written down to its recoverable amount. Impairment losses
are recognised as an expense in the Statement of Profit or
Loss, except to the extent that they reverse gains previously
recognised in other comprehensive income, in which case the
impairment loss is also recognised in other comprehensive
income up to the amount of any previous gain.
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.
In determining fair value less costs of disposal, recent market
transactions are taken into account. If no such transactions
can be identified, an appropriate valuation model is used.
For assets, excluding goodwill, an assessment is made at each
reporting date to determine whether there is an indication that
previously recognised impairment losses no longer exist or
have decreased. If such indication exists, the Group estimates
the recoverable amount of the asset or CGU. When an
impairment loss subsequently reverses, the carrying amount
of the asset is increased to the revised recoverable amount
but only to the extent that the carrying value does not exceed
the carrying amount that would have been determined, net
of amortisation or depreciation, had no impairment loss been
recognised for the asset in prior years. The reversal of an
impairment loss is recognised in the Statement of Profit or Loss.
Goodwill is not amortised but is reviewed for impairment at
least annually. CGUs, to which goodwill has been allocated,
are tested for impairment annually, or more frequently when
there is an indication that the unit may be impaired. If the
recoverable amount of the CGU is less than its carrying value,
an impairment loss is recognised. It 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 on the basis of the
carrying amount of each asset of the unit. An impairment loss
recognised for goodwill is not reversed in a subsequent period.

3.15 Inventories
Inventories are stated at the lower of cost and net realisable
value. Cost comprises direct materials and costs that have
been incurred in bringing the inventories to their present
location and condition. Net realisable value represents the
estimated selling price less all estimated costs of completion
and sale.

F I N A N C I A L S T A T E M E N T S

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
YEAR ENDED 31 MARCH 2021

3.16 Financial instruments
A financial instrument is any contract that gives rise to a
financial asset of one entity and a financial liability or equity
instrument of another entity. Financial assets and liabilities
are recognised in the Group’s Balance Sheet when the Group
becomes party to the contractual provisions of the instrument.

Financial assets
Financial assets, on initial recognition, are classified as those
to be subsequently measured at amortised cost or those
to be subsequently measured at fair value (either through
profit or loss or through other comprehensive income). The
classification depends on the financial asset’s contractual
cash flow characteristics and the Group’s business model for
managing them.

Financial assets held at amortised cost comprise trade and
other receivables and cash and cash equivalents in the
Balance Sheet. They are assets held for the collection of
contractual cash flows where those cash flows represent solely
payments of the principal and interest.

They are initially recognised at fair value plus transaction
costs that are directly attributable to their acquisition. They
are subsequently stated at amortised cost, using the effective
interest rate method, less provision for impairment.

Impairment provisions for trade receivables are recognised
based on the simplified approach within IFRS 9, using lifetime
expected credit losses. During this process, the probability
of the non-payment of the trade receivables is assessed and
multiplied by the amount of the expected loss arising from
default to determine the lifetime expected credit loss for the
trade receivables. For trade receivables that are reported net,
such provisions are recorded in a separate provision account
with the loss being recognised within in the Statement of Profit
or Loss. The gross carrying amount of a financial asset is
reduced when the Group has no reasonable expectation of
recovering the financial asset in its entirety or a portion thereof.

Assets measured at fair value through profit or loss are
subsequently remeasured at fair value, with gains and losses
being recognised in profit or loss. Transaction costs of financial
assets carried at fair value through profit or loss are expensed
in profit or loss.

For investments in equity instruments that are not held for
trading and fall within the scope of IFRS 9, the Group may (on
an instrument-by-instrument basis) irrevocably elect to present
subsequent changes in fair value within other comprehensive

income. Where this election is made, there is no subsequent
re-classification of fair value gains and losses to profit or
loss following derecognition of the investment. Dividends
from such investments are recognised in profit or loss as
other income when the Group’s right to receive payment is
established.

Financial liabilities
Financial liabilities, on initial recognition, are classified as those
to be subsequently measured at amortised cost or those to be
subsequently measured at fair value through profit or loss.

All financial liabilities are initially recognised at fair value and,
in the case of loans and borrowings and payables, net of
directly attributable transaction costs.

Financial liabilities measured at amortised cost include trade
and other payables and loans and other borrowings, including
bank overdrafts. These are subsequently stated at amortised
cost, using the effective interest rate method. The interest
expense includes initial transaction costs and any premium
payable on redemption, as well as any interest or coupon
payable while the liability is outstanding.

Financial liabilities measured at fair value are subsequently
remeasured at fair value, with gains and losses recognised in
profit or loss.

Derivative financial instruments
The Group uses derivative financial instruments, such as
forward currency contracts and interest rate swaps, to hedge
its exposure to foreign currency exchange risk and interest
risk. The Group does not enter into speculative financial
instruments.

Such derivative financial instruments are initially recognised
at fair value on the date on which the derivative contract is
entered into and subsequently remeasured at fair value, with
gains and losses recognised in profit or loss.

Derivatives are held as financial assets when their fair value
is positive and as financial liabilities when the fair value is
negative.

Equity instruments
An equity instrument is any contract that evidences a residual
interest in the assets of an entity after deducting all of its liabilities.

Repurchase of the Company’s own equity instruments is
recognised and deducted directly in equity. No gain or loss
is recognised in profit or loss on the purchase, sale, issue or
cancellation of the Company’s own equity instruments.

Warranties
The Group provides for the expected cost of warranty
obligations for defects that existed at the time of sale, as
required by law. Provision is based on historical experience
and management’s best estimate of the amount required to
settle the Group’s obligation. Further details are outlined in
note 30.

Dilapidations
The Group provides for the expected cost of restoring its
operating premises to their original state in accordance with
its lease terms. Provision is based on management’s best
estimate of the work and cost involved in completing this
restoration. The cost is recognised as part of the right of use
asset and is depreciated over the remaining term of the lease.

3.18 Share-based payments
Equity-settled share option schemes and long-term incentive
plans are measured at the fair value of the equity instruments
at the grant date. The fair value excludes the effect of non-
market-based vesting conditions. Details regarding the
determination of the fair value of equity-settled share-based
transactions are set out in note 36.

The fair value, determined at the grant date of the equity-
settled share-based payments, is expensed on a straight-line
basis over the vesting period, based on the Group’s estimate
of equity instruments that will eventually vest. At each
reporting date, the Group revises its estimate of the number
of equity instruments expected to vest as a result of the effect
of non-market-based vesting conditions. The impact of the
revision of the original estimates, if any, is recognised in profit
or loss such that the cumulative expense reflects the revised
estimate, with a corresponding adjustment to equity reserves.

Fair value measurement
All assets and liabilities for which fair value is measured or
disclosed in the financial statements are categorised within
the fair value hierarchy, based on the degree to which the fair
value is observable, as follows:

• Level 1 fair value measurements are those derived from
quoted prices (unadjusted) in active markets for identical
assets or liabilities;

• Level 2 fair value measurements are those derived from
inputs other than quoted prices included within level 1 that
are observable for the asset or liability, either directly (i.e. as
prices) or indirectly (i.e. derived from prices); and

• Level 3 fair value measurements are those derived from
valuation techniques that include inputs for the asset or
liability that are not based on observable market data
(unobservable inputs). Details of significant unobservable
inputs used in determining fair values within level 3 are
disclosed in note 33.

3.17 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 transfer
economic benefits to settle that obligation and a reliable
estimate can be made of the amount of the obligation.
Provisions are recognised as a liability in the Balance Sheet
with a corresponding expense recognised in profit or loss.
The amount recognised as a provision is the best estimate
of the consideration required to settle the present obligation
at the reporting date, taking into account the risks and
uncertainties surrounding the obligation. When the effect of
the time value of money is material, provisions are discounted
using a pre-tax rate that reflects, where appropriate, the risks
specific to the liability. When discounting is used, the increase
in the provision due to the passage of time is recognised as a
finance expense.
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
receivable can be measured reliably.

F I N A N C I A L S T A T E M E N T S

NOTES TO THE FINANCIAL
STATEMENTS (CONTINUED)
YEAR ENDED 31 MARCH 2021

3.19 Statement of cash flows
Deferred and contingent consideration arrangements
contain an implicit financing element. As such, the Group’s
policy is to include the payment of deferred and contingent
consideration within cash flows from financing activities.
The cash outflow is presented on a gross basis and thus
the associated interest is also included in the total paid
within cash flows from financing activities.
Cash flows in respect of the payment of lease liabilities
are also presented on a gross basis, with both the
interest and principal amounts included within cash
flows from financing activities.
Payments in respect of short-term or low value leases that are
not included within the measurement of the lease liabilities
are presented within cash flows from operating activities.

3.20 Alternative performance measures
Alternative performance measures (APMs) are
disclosed within the 2021 Annual Report and Accounts
where management believes it is necessary to do
so to provide further understanding of the financial
performance of the Group.
Underlying results are used in the day to day management
of the Group. They represent statutory measures adjusted
for items which could distort the understanding of
performance and comparability year on year.

Adjusted EBITDA
Adjusted EBITDA is the primary non-statutory measure
used by the Group. This is represented by earnings
before interest, tax, depreciation, amortisation and
other items considered non-operational in nature,
including acquisition and share based payment related
expenses. A reconciliation between adjusted EBITDA
and statutory IFRS measures is included in note 6.
Exceptional items are those which the Group considers
to be significant in nature and quantum but not in the
normal course of business. Details of exceptional items
are disclosed in note 14.

Adjusted basic EPS
Adjusted basic EPS is defined as the adjusted profit
after tax divided by the weighted average number of
shares outstanding during the year.
Adjusted diluted EPS is defined as the adjusted profit
after tax divided by the weighted average number of
shares outstanding during the year plus the weighted
average number of shares that would be issued on
conversion of all the dilutive potential ordinary shares
into ordinary shares.
An adjusted basic and diluted EPS is also determined
by dividing the profit after tax for the year by the total
number of shares in issue at the year end and following
the Initial Public Offering (IPO).
Adjusted basic and diluted EPS are outlined in note 17.

Net debt/ cash
Net debt is defined as bank borrowings (excluding
the impact of arrangement fees) less cash and cash
equivalents. Net cash arises when the cash and cash
equivalents exceed bank borrowings and is defined as
cash and cash equivalents less bank borrowings.

4. Critical accounting judgements and key
sources of estimation uncertainty
In the application of the Group’s accounting policies, which are
described in note 3, the Directors are required to make judgements,
estimates and assumptions about the carrying amounts of assets
and liabilities that are not readily apparent from other sources.
The estimates and associated assumptions are based on historical
experience and other factors that are considered to be relevant.
Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised
in the year in which the estimate is revised if the revision affects
only that year, or in the year of the revision and future years if the
revision affects both current and future years.
Critical judgements in applying the Group’s
accounting policies
The following are the critical judgements that the Directors
have made in the process of applying the Group’s accounting
policies and that have the most significant effect on the amounts
recognised in the financial statements.
Associates
Investments in associates are accounted for using the equity
method of accounting, whereby the investment is initially
recognised at the transaction price and subsequently
adjusted to reflect the Group’s share of the profit or loss, other
comprehensive income and equity of the associate. Judgements
are made as to whether the Group has significant influence (but
not control or joint control), being the power to participate in the
financial and operating policy decisions of the associate or not.

Provisions
Provisions are a key area of the financial statements and are
subject to both judgement and estimation uncertainty. Provisions
are recognised on product defect warranties when claims are
made in relation to the products and services supplied. This
requires judgement as to whether a claim would likely give rise
to a provision based on the Group’s knowledge of its products,
services and customers. The provision would then need to be
estimated based on management’s assessment of the likely work
and cost required to rectify any defect. This estimate is subjective
and based on management’s knowledge of the products,
services and past customer experience (see note 30).

Lease term
Judgement is required in determining the lease term where
a lease includes periods covered by an option to extend the
lease or an option to terminate the lease. The Directors apply
judgement in evaluating whether it is reasonably certain or not
that an option will be exercised. When recognising the lease, all
relevant factors are taken into account, including the Group’s
intentions and any factors that create an economic incentive
to exercise an option. After the commencement date, the lease
term will be re-assessed if there is a significant event or change
in circumstances that is within the Group’s control and affects its
ability to exercise an option.

Key sources of estimation uncertainty
The key assumptions concerning the future and other key
sources of estimation uncertainty at the reporting date, that
may 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.

Intangible assets are amortised over their expected useful
life. The annual amortisation charge and carrying value of
the asset is therefore sensitive to the estimated useful life. The
useful life is based on the period over which management
expects to benefit from the intangible assets, based on past
experience and knowledge of the business acquired.

Impairment of non-financial assets
The Group acquires intangible assets and goodwill during
a business combination. These assets are primarily the
assets subject to an impairment review. They are initially
recorded at fair value and subsequently at cost less
any amortisation (in the case of intangible assets) and
impairment losses. Goodwill is reviewed for impairment
annually while other assets are assessed when an indication
of impairment is identified. In assessing whether an asset
is impaired, the asset’s or CGU’s value in use is calculated
based on a discounting cash flow model. The cash flows are
derived from forecasts covering the next three years. The
recoverable amount is therefore sensitive to the assumptions
and estimates used in determining the amount and timing
of future cash flows, the discount factor applied and the
growth rate used for extrapolation purposes. Details of the
key assumptions, including consideration of sensitivity, are
disclosed further in note 19.

Intangible assets
The Group recognises identifiable intangible assets acquired
through business combinations, such as brands and customer
and supplier relationships, at fair value on acquisition. Any
excess paid over the value of net assets acquired is included
as goodwill. Estimates are required to determine the purchase
price allocation (PPA) between intangible assets and
goodwill, with the fair value of intangibles sensitive to these
estimates. The key estimates involved in establishing the fair
values are the future cash flows forecast for the acquired
entity, inputs into appropriate valuation models and the
expected useful life of the assets.

Projected cash flows underpin the valuation of all identifiable
intangible assets. These are based on management’s best
estimate of the expected levels of trade and profits following
acquisition, taking into account actual results around the time
of acquisition. Forecasts are prepared for a three year period,
with an inflationary 2% growth rate applied thereafter.

The fair value of brands is based on a relief from royalty
method. The royalty rates applied in this model are based on
other business to business operations in the market, reflecting
the size of the entities acquired and that their reach is limited
given the business to business nature. The brand value is
sensitive to the royalty rate incorporated into the model. For
acquisitions during the year, the Group applied a royalty rate
of 1% based upon other business to business brands in the
sector and analysis of the underlying profit margin.

Provision for expected credit losses (ECLs)
The Group uses a provision matrix to calculate the ECLs
for trade receivables. The provision rates are based on
days past due for groupings of customers with similar credit
risk characteristics. The provision matrix is initially based
on the Group’s historical observed default rates. However,
the historical rate is adjusted to consider forward looking
information, which may lead to a change in the expected
number of defaults. The assessment of correlation between
the historically observed default rates and forecast economic
conditions is therefore a significant estimate. The ECLs
calculated are sensitive to changes in circumstances and
forecast economic conditions as the historical experience and
forecasts may not be representative of a customer’s actual
default in the future. Details of the ECLs on the Group’s trade
receivables and contract assets, are disclosed in note 25.

Share-based payments
Key estimates are used in determining the fair value of share-
based payment transactions, including selecting the most
appropriate valuation model and related inputs into that
model. The Group operates a Company Share Option Plan
(CSOP) and Long-term Incentive Plan (LTIP) with equity
settled transactions. Fair value of the CSOP options was
measured using a binomial model at the grant date. Monte
Carlo and Black-Scholes models were used to determine the
fair value of the LTIP awards at the grant date. Estimates
are also required, at each reporting date, in determining the
number of options that are expected to vest. Details of the
assumptions and models used are disclosed in note 36.

Fair value measurement of financial instruments
When fair values cannot be measured based on quoted
prices in an active market, the fair value is measured using
valuation techniques, including the discounted cash flow
model. Inputs into this model are taken from observable
markets where possible but a degree of judgement is required
where this is not possible. Expert valuers are engaged by the
Group where appropriate.

Contingent consideration, resulting from business
combinations, is valued at fair value at the acquisition date
as part of the business combination. When contingent
consideration meets the definition of a financial asset or
liability, it is subsequently remeasured to fair value at each
reporting date. The fair value is determined using discounted
cash flows. The key estimates are therefore the probability of
the performance target being met and the discount rate used.
Further details are disclosed in note 33.

F I N A N C I A L S T A T E M E N T S

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
YEAR ENDED 31 MARCH 2021

4. Critical accounting judgements and key sources of estimation uncertainty (continued)

Lease incremental borrowing rate
Where the interest rate in a lease cannot be readily determined,
the Group uses its incremental borrowing rate to measure the
lease liability. The incremental borrowing rate is that which the
Group would have to pay to borrow over a similar term, and
with a similar security, the funds necessary to obtain an asset
of a similar value to the right of use asset in a similar economic
environment. This rate therefore requires estimation when no
observable rates are available. The Group estimates the rate
by assessing the rates implied in similar agreements and using
observable inputs, such as market interest rates, when available.

COVID-19
The outbreak of the COVID-19 pandemic in March 2020 has led
to economic uncertainty over the past 15 months, with significant
government interventions on daily life in the UK. While the
Group has recovered strongly from the initial lockdown in March
and April 2020, that prevented trade, the ongoing impact of
COVID-19 on the consolidated financial statements still requires
judgement and affects certain estimates. The primary estimates
affected are those concerning the testing for impairment of assets
(see note 19), including adjustments made for forward looking
information in determining the Group’s expected ECL (note 25).

5. Revenue

All of the Group’s revenue is derived from contracts with customers.
Revenue in relation to the sale of goods comprises amounts
receivable from the sale of building and joinery materials. Revenue
in connection with the rendering of services relates to amounts
receivable from the provision of roofing construction and
installation services and the transportation and distribution of
building materials. Revenue by segment is included in note 6.

Trade receivables and contract assets arising are disclosed in note
25. The Group does not have a significant level of contract assets.

These arise where bespoke goods are prepared specifically for a
customer, for which the Group has a right to consideration but the
goods have not yet been transferred to the customer.

Included within other payables is an amount of £336,000 (2020:
£202,000) in relation to contract liabilities in respect of amounts
paid or invoiced in advance of goods being transferred to the
customer. Due to the nature of the business and short turnaround
between orders being placed and goods being delivered, liabilities at
the reporting date are recognised within revenue in the following year.

6. Segmental analysis
For management purposes, the Group is organised into
segments based on its products and services. The Group
generates revenue through three main activities and thus has
three reportable segments, as follows:
• Bricks and Building Materials, which incorporates the sale of
superior quality building materials to all sectors of the construction
industry including national house builders, developers, contractors,
general builders and retail to members of the public;
• Roofing Services, which incorporates the supply of roofing
construction services, primarily within the residential construction
sector; and
• Heating, Plumbing and Joinery, which incorporates the sale
of high-performance joinery materials and the distribution of
radiators and associated parts and accessories.

The Group’s segments are strategic business units that offer
different products and services. Operating segments are reported
in a manner consistent with the internal reporting provided to the
chief operating decision-maker (CODM). The CODM, who is

responsible for allocating resources and assessing performance
of the operating segments, has been identified as the steering
committee that makes strategic decisions.

The accounting policies of the reportable segments are the same
as the Group’s accounting policies as described in note 3. Segment
performance is evaluated based on adjusted EBITDA, without
allocation of depreciation and amortisation, finance expenses
and income, impairment losses, fair value movements or the
share of results of associates. This is the measure reported to the
CODM for the purpose of resource allocation and assessment of
segment performance.

The Group’s revenue is primarily generated in the United Kingdom.
An analysis by geographic location is included within note 5. All of
the revenue generated in Europe is included within revenue from
the rendering of services within the Bricks and Building Materials
segment below. Right of use assets, in respect of trailers, with a
carrying value of £1,251,000, are either held in the United Kingdom
or Europe at the year end, depending on the timing and location
of goods being transported. All other non-current assets are solely
held within the United Kingdom.

An analysis of the Group’s revenue, by type, is as follows:2021 £’0002020 £’000Sale of goods165,471170,022Rendering of services15,61317,104 181,084187,126An analysis of the Group’s revenue, by geographic location, is as follows:2021 £’0002020 £’000United Kingdom180,122187,126Europe962- 181,084187,126
Included within revenue is a total of £19,910,000 (2020: £31,282,000) in respect of a customer accounting for more than 10% of the
Group’s total revenue. Revenue from this customer is included within all three reportable segments.
Inter-segment sales are eliminated from the results reported to the CODM and from the consolidated financial statements.

F I N A N C I A L S T A T E M E N T S

2021Bricks and BuildingMaterials £’000Roofing Services £’000Heating, Plumbing and Joinery £’000 Consolidated £’000Revenue from sale of goods141,019-24,452165,471Revenue from rendering of services3,18712,426-15,613Total revenue144,20612,42624,452181,084EBITDA11,6622,5715,76619,999Centralised costs (2,453)(Loss)/ profit on disposal of assets(4)Group adjusted EBITDA17,542Depreciation(1,837)Amortisation(3,619)Acquisition costs(105)Share-based payment expense(338)Finance income13Finance expense(845)Share of results of associates(6)Fair value gains and losses360Group profit before tax11,1652020Bricks and BuildingMaterials £’000Roofing Services £’000Heating, Plumbing and Joinery £’000 Consolidated £’000Revenue from sale of goods143,954-26,068170,022Revenue from rendering of services-17,104-17,104Total revenue143,95417,10426,068187,126EBITDA11,4693,6836,15621,308Centralised costs (1,805)(Loss)/ profit on disposal of assets8Group adjusted EBITDA19,511Impairment of goodwill(16)Depreciation(1,312)Amortisation(3,059)Finance income71Finance expense(2,527)Share of results of associates(32)Fair value gains and losses(45)Exceptional income2,000Exceptional expenses(2,407)Group profit before tax12,184
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
YEAR ENDED 31 MARCH 2021
YEAR ENDED 31 MARCH 2021

6. Segmental analysis (continued)
6. Segmental analysis (continued)

For the purposes of monitoring segment performance and allocating resources between segments, the CODM monitors the total
For the purposes of monitoring segment performance and allocating resources between segments, the CODM monitors the total
non-current and current assets attributable to each segment. All assets are allocated to reportable segments with the exception of
non-current and current assets attributable to each segment. All assets are allocated to reportable segments with the exception of
those used primarily for corporate purposes (head office), investments in associates and financial assets and deferred tax assets.
those used primarily for corporate purposes (head office), investments in associates and financial assets and deferred tax assets.
Goodwill has been allocated to reportable segments as detailed in note 19. No other assets are used jointly by reportable segments.
Goodwill has been allocated to reportable segments as detailed in note 19. No other assets are used jointly by reportable segments.

7. Other operating income

8. Profit before tax

Profit before tax is stated after charging/ (crediting):

78
78

F I N A N C I A L S T A T E M E N T S

During the year, the Group received government grants in response to the global COVID-19 pandemic. The Group has elected to deduct the grant income from

the associated expenses. The grant income is included within administrative expenses, with £30,000 relating to business rates support, while the remainder

relates to support in respect of payroll costs of the Group’s employees. The Group does not have any unfulfilled obligations or other contingencies relating to the

support schemes.

2021Bricks and BuildingMaterials £’000Roofing Services £’000Heating, Plumbing and Joinery £’000Consolidated £’000Non-current segment assets46,27618,23529,86794,378Current segment assets45,6353,79912,58262,016Total segment assets91,91122,03442,449156,394Investment in associates221Investments in financial assets125Deferred tax assets98Head office1,535Group assets158,373Total segment liabilities(37,570)(2,815)(7,040)(47,425)Loans and borrowings (excluding leases and overdrafts)(15,750)Deferred tax liabilities(5,301)Other unallocated central liabilities(4,463)Group liabilities(72,939)2020Bricks and BuildingMaterials £’000Roofing Services £’000Heating, Plumbing and Joinery £’000Consolidated £’000Non-current segment assets42,16619,68427,13488,984Current segment assets51,8563,79810,83766,491Total segment assets94,02223,48237,971155,475Investment in associates352Deferred tax assets205Head office7,134Group assets163,166Total segment liabilities(34,205)(2,265)(4,744)(41,214)Loans and borrowings (excluding leases and overdrafts)(24,912)Deferred tax liabilities(5,631)Other unallocated central liabilities(11,344)Group liabilities(83,101)2021Bricks and BuildingMaterials £’000Roofing Services £’000Heating, Plumbing and Joinery £’000Consolidated £’000Non-current segment assets46,27618,23529,86794,378Current segment assets45,6353,79912,58262,016Total segment assets91,91122,03442,449156,394Investment in associates221Investments in financial assets125Deferred tax assets98Head office1,535Group assets158,373Total segment liabilities(37,570)(2,815)(7,040)(47,425)Loans and borrowings (excluding leases and overdrafts)(15,750)Deferred tax liabilities(5,301)Other unallocated central liabilities(4,463)Group liabilities(72,939)2020Bricks and BuildingMaterials £’000Roofing Services £’000Heating, Plumbing and Joinery £’000Consolidated £’000Non-current segment assets42,16619,68427,13488,984Current segment assets51,8563,79810,83766,491Total segment assets94,02223,48237,971155,475Investment in associates352Deferred tax assets205Head office7,134Group assets163,166Total segment liabilities(34,205)(2,265)(4,744)(41,214)Loans and borrowings (excluding leases and overdrafts)(24,912)Deferred tax liabilities(5,631)Other unallocated central liabilities(11,344)Group liabilities(83,101)2021£’0002020£’000Rental income469Other461792262021£’0002020£’000Amortisation of intangible assets3,6193,059Impairment of goodwill-16Depreciation of property, plant and equipment726595Depreciation of right of use assets1,111717Loss/ (Gain) on disposal of property, plant and equipment and right of use assets4(8)Cost of inventories recognised as an expense32,12925,424Impairment of trade receivables341433Net foreign exchange gains(173)(170)Government grant income(1,360)-
7. Other operating income
7. Other operating income

8. Profit before tax
8. Profit before tax

Profit before tax is stated after charging/ (crediting):
Profit before tax is stated after charging/ (crediting):

During the year, the Group received government grants in response to the global COVID-19 pandemic. The Group has elected to deduct the grant income from
During the year, the Group received government grants in response to the global COVID-19 pandemic. The Group has elected to deduct the grant income from
the associated expenses. The grant income is included within administrative expenses, with £30,000 relating to business rates support, while the remainder
the associated expenses. The grant income is included within administrative expenses, with £30,000 relating to business rates support, while the remainder
relates to support in respect of payroll costs of the Group’s employees. The Group does not have any unfulfilled obligations or other contingencies relating to the
relates to support in respect of payroll costs of the Group’s employees. The Group does not have any unfulfilled obligations or other contingencies relating to the
support schemes.
support schemes.

F I N A N C I A L S T A T E M E N T S

79
79

2021£’0002020£’000Rental income469Other461792262021£’0002020£’000Amortisation of intangible assets3,6193,059Impairment of goodwill-16Depreciation of property, plant and equipment726595Depreciation of right of use assets1,111717Loss/ (Gain) on disposal of property, plant and equipment and right of use assets4(8)Cost of inventories recognised as an expense32,12925,424Impairment of trade receivables341433Net foreign exchange gains(173)(170)Government grant income(1,360)-2021£’0002020£’000Rental income469Other461792262021£’0002020£’000Amortisation of intangible assets3,6193,059Impairment of goodwill-16Depreciation of property, plant and equipment726595Depreciation of right of use assets1,111717Loss/ (Gain) on disposal of property, plant and equipment and right of use assets4(8)Cost of inventories recognised as an expense32,12925,424Impairment of trade receivables341433Net foreign exchange gains(173)(170)Government grant income(1,360)-

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
YEAR ENDED 31 MARCH 2021

9. Auditor’s remuneration
During the year, the Group incurred the following costs for services provided by the Company’s Auditor:

10. Staff numbers and costs
The average number of persons employed by the Group during the year, including the Directors, amounted to:

The aggregate remuneration costs incurred during the year, and included within administration expenses, were:

2021£’0002020£’000Fees payable for audit services:Audit of the company annual financial statements3713Audit of the company’s subsidiaries159169Total audit related fees196182Fees payable for other services:Reporting accountant-292Other services 641Total non-audit fees6333Total auditors’ remuneration2025152021Number2020NumberProduction staff69Distribution staff4924Administrative staff6451Management staff4432Sales and sales support staff1651693282852020£’0002020£’000Staff costs:Wages and salaries14,51110,757Social security costs1,6421,198Other pension costs (note 32)586463Share-based payments expense (note 36)3385617,07712,474

The Directors’ aggregate remuneration in respect of qualifying services was:

The number of Directors who accrued benefits under company pension plans was as follows:

Remuneration of the highest paid Director in respect of qualifying services was:

Full details of Directors’ remuneration is included within the Report of the Remuneration Committee on pages 39 to 45.

13. Fair value gains and losses

Gain/ (loss) on re-measurement of contingent consideration (notes 21 & 33)

2021
£’000

360

2020
£’000

(45)

F I N A N C I A L S T A T E M E N T S

2021£’0002020£’000Directors’ emoluments:Remuneration1,0811,248Pension contributions21421,1021,2902021Number2020NumberDefined contribution pension plans112021£’0002020£’000Remuneration636463Pension contributions--63646311. Finance income2021£’0002020£’000Interest on cash and cash equivalents1370Gain on fair value adjustment of financial liabilities at fair value through profit or loss-1137112. Finance expense2021£’0002020£’000Interest on bank loans and overdrafts3601,013Interest on lease liabilities354280Interest payable on loan notes-977Interest payable on deferred consideration-13Unwinding of discount on contingent consideration127227Other interest payable4178452,527
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
YEAR ENDED 31 MARCH 2021

14. Other items
In order to assist with the understanding of the Group’s performance, items that management consider to not be directly attributable
to the Group’s underlying trade are presented separately, on the face of the Consolidated Statement of Profit or Loss and Other
Comprehensive Income. This presentation has been adopted for the first time in the current year and thus the prior year figures have
been re-presented on a comparable basis. No changes have been made to the individual line item totals reported in the prior year.

Other items represent those costs that are considered non-operational in nature and are as follows:

Acquisition costs
Share based payment expense
Total administrative expenses
Amortisation of intangible assets (note 19)
Impairment of goodwill (note 19)
Total depreciation and amortisation
Interest payable on loan notes (note 12)
Interest payable on deferred consideration (note 12)
Unwinding of discount on contingent consideration (note 12)
Total finance expense
Share of post-tax loss of equity accounted associates (note 22)
Fair value gains/ (losses) (note 13)
Exceptional income
Exceptional expenses
Total other items before tax
Tax on other items
Total other items after tax

2021
£’000
(105)
(338)
(443)
(3,619)
-
(3,619)
-
-
(127)
(127)
(6)
360
-
-
(3,835)
687
(3,148)

2020
£’000
-
(56)
(56)
(3,059)
(16)
(3,075)
(977)
(13)
(227)
(1,217)
(32)
(45)
2,000
(2,407)
(4,832)
12
(4,820)

Acquisition costs comprise of transaction costs of £22,000, in relation to stamp duty, plus a further £83,000 in respect of legal
and professional fees directly associated with the acquisitions in the year. Acquisition costs in the prior year were included within the
exceptional expenses line (below).
The share-based payment expense represents the share-based payment charge for the year, including associated accrued employer taxes.
Exceptional items were included in the prior year, in respect of those costs that the Group considered to be significant, one-off items
that are not incurred as part of the Group’s normal operations.

Exceptional income

Insurance proceeds in respect of keyman policies

Total exceptional income

2021
£’000

2020
£’000

2,000

The exceptional income in the prior year relates to a recovery under keyman insurance policies, following a medical diagnosis, in
connection with a member of key management.

Exceptional expenses

IPO costs

Re-financing costs

Acquisition costs

Impairment of investments in associates (note 22)

Total exceptional expenses

2021
£’000

2020
£’000

(522)

(585)

(425)

(875)

(2,407)

During the prior year, the Company completed an initial
public offering (IPO). Exceptional legal and professional fees
of £522,000 are included within the 2020 profit or loss in
connection with the IPO. Transactions costs of £2,501,000,
directly attributable to the issue of shares, were included as a
reduction in the share premium account.

The Group also undertook a re-financing exercise in the prior year,
incurring exceptional costs of £585,000 in respect of the release of
loan arrangement fees, following repayment of the previous term
loan on listing, and legal fees associated with the re-financing.

During the prior year, the Group acquired seven subsidiaries,
incurring costs of £425,000. This comprised transaction
costs on acquisition of £103,000, in relation to stamp duty,
and £322,000 in respect of legal and professional fees
directly associated with these acquisitions.

Further details regarding the impairment of investments
in associates is disclosed in note 22.

The tax credit arising on the other items is presented on
the same basis as the cost to which it relates.

15. Tax on profit
The major components of the income tax expense are:

Current tax

UK current tax expense

Adjustments in respect of prior periods

Total current tax

Deferred tax

Origination and reversal of temporary differences

Total tax on profit

2021
£’000

2020
£’000

2,851

(720)

2,131

(625)

1,506

2,885

(618)

2,267

626

2,893

Reconciliation of tax expense
The standard rate of corporation tax in the UK is 19% (2020: 19%). The charge for the year can be reconciled, to the standard
rate applied to the profit before tax, as follows:

On 11 March 2021, the UK Government announced that the main rate of corporation tax in the United Kingdom would increase to
25%, with effect from April 2023. This change was not substantively enacted at the year end and thus there has been no impact on
the tax liabilities at the reporting date. However, once this rate has been substantively enacted, deferred tax assets and liabilities,
currently recognised at 19%, will be remeasured at 25%. This change is expected to result in an increase of £1,384,000 in the
deferred tax liability recognised at 31 March 2022.

F I N A N C I A L S T A T E M E N T S

2021£’0002020£’000Profit on ordinary activities before taxation11,16512,184Tax on profit on ordinary activities at standard rate2,1212,315Adjustments to current tax charge in respect of prior periods(720)(618)Adjustments to deferred tax charge in respect of prior periods35509Effect of expenses not deductible for tax purposes 5094Effect of capital allowances and depreciation3526Effect of changes in UK tax rates -549Effect of utilisation of tax losses(15)2Changes in unrecognised deferred tax assets-(1)Other tax adjustments-17Tax on profit1,5062,893NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
YEAR ENDED 31 MARCH 2021
YEAR ENDED 31 MARCH 2021

The Directors recommend that a final dividend for 2021 of 1.0850p (2020: 1.0850p) per ordinary share be paid.
The Directors recommend that a final dividend for 2021 of 1.0850p (2020: 1.0850p) per ordinary share be paid.
The final dividend will be paid, subject to shareholders’ approval at the Annual General Meeting, to shareholders on the register at
The final dividend will be paid, subject to shareholders’ approval at the Annual General Meeting, to shareholders on the register at
the close of business on 27 August 2021. This dividend has not been included as a liability in these financial statements.
the close of business on 27 August 2021. This dividend has not been included as a liability in these financial statements.

17. Earnings per share
17. Earnings per share
Earnings per share (EPS) is calculated by dividing the profit for the year, attributable to ordinary equity holders of the parent, by the
Earnings per share (EPS) is calculated by dividing the profit for the year, attributable to ordinary equity holders of the parent, by the
weighted average number of ordinary shares outstanding during the year.
weighted average number of ordinary shares outstanding during the year.

Diluted EPS is calculated by dividing the profit for the year, attributable to ordinary equity holders, by the weighted average number
Diluted EPS is calculated by dividing the profit for the year, attributable to ordinary equity holders, by the weighted average number
of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on
of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on
conversion of all the dilutive potential ordinary shares into ordinary shares.
conversion of all the dilutive potential ordinary shares into ordinary shares.
The calculation of basic and diluted earnings per share is based on the following data:
The calculation of basic and diluted earnings per share is based on the following data:

2021
2021

Weighted
Weighted
average
average
number of
number of
shares
shares

Earnings
Earnings
£’000
£’000

Earnings
Earnings
per share
per share
(p)
(p)

Earnings
Earnings
£’000
£’000

2020
2020

Weighted
Weighted
average
average
number of
number of
shares
shares

Earnings
Earnings
per share
per share
(p)
(p)

Basic earnings per share

9,665

230,458,821

4.19

9,291

194,093,236

4.79

Effect of dilutive securities
Effect of dilutive securities
Employee share options
Employee share options
Diluted earnings per share
Diluted earnings per share

629,983

582,220

9,665

231,088,804

4.18

9,291

194,675,456

4.77

Based on the full number of shares in issue at the year end, and following the IPO in the prior year, the adjusted basic and diluted EPS would be as follows:

Adjusted basic earnings per share

Adjusted diluted earnings per share

9,665

230,458,821

231,088,804

4.19

4.18

9,291

230,458,821

231,041,041

4.03

4.02

Adjusted earnings per share and adjusted diluted earnings per share based on the adjusted profit attributable to the equity holders
Adjusted earnings per share and adjusted diluted earnings per share based on the adjusted profit attributable to the equity holders
of the parent, as shown in the Adjusted column of the Consolidated Statement of Profit or Loss and Other Comprehensive Income.
of the parent, as shown in the Adjusted column of the Consolidated Statement of Profit or Loss and Other Comprehensive Income.
Details of the Other items after tax, forming the difference between the statutory earnings above and adjusted earnings below, are
Details of the Other items after tax, forming the difference between the statutory earnings above and adjusted earnings below, are
outlined in note 14 of the financial statements.
outlined in note 14 of the financial statements.

2021
2021

Weighted
Weighted
average
average
number of
number of
shares
shares

Earnings
Earnings
£’000
£’000

Earnings
Earnings
per share
per share
(p)
(p)

Earnings
Earnings
£’000
£’000

2020
2020

Weighted
Weighted
average
average
number of
number of
shares
shares

Adjusted basic earnings per share

12,813

230,458,821

5.56

14,111

194,093,236

Effect of dilutive securities
Effect of dilutive securities
Employee share options
Employee share options
Adjusted diluted earnings per share
Adjusted diluted earnings per share

629,983

582,220

12,813

231,088,804

5.54

14,111

194,675,456

Earnings
Earnings
per share
per share
(p)
(p)

7.27

7.25

18. Property, plant and equipment

Land and

buildings

£’000

Plant and

machinery

£’000

Fixtures,

fittings and

equipment

£’000

Motor

vehicles

£’000

Acquisition through business combinations

Transferred from right of use assets

Cost

At 1 April 2019

Additions

Disposals

At 31 March 2020

Additions

Disposals

At 31 March 2021

Depreciation

At 1 April 2019

Charge for the year

On disposals

At 31 March 2020

Charge for the year

On disposals

At 31 March 2021

Net book value

At 31 March 2021

At 31 March 2020

Transferred from right of use assets

3,025

398

3,483

5,060

8,543

213

247

460

305

765

7,778

3,023

336

299

(1)

697

102

(14)

789

123

141

264

135

(4)

396

393

433

242

371

309

689

174

267

422

197

466

187

144

(43)

754

198

127

(115)

964

126

(18)

234

193

(55)

432

532

520

Total

£’000

4,069

951

329

(44)

5,305

5,669

127

(129)

10,985

555

595

(18)

1,132

726

(59)

1,860

9,125

4,173

The Company has no property, plant and equipment.

Included within land and buildings is freehold land amounting to £1,113,000 (2020: £348,000) which is not depreciated.

Property, plant and equipment with a carrying value of £7,920,000 (2020: £2,983,000) is pledged as security for the Group’s bank loan.

84
84

F I N A N C I A L S T A T E M E N T S

16. Dividends2021£’0002020£’000Amounts recognised as distributions to equity holders in the year: Final dividend for the year ended 31 March 2020 of 1.0850p per share(2020: for the year ended 31 March 2019 of nil p per share)2,500-Interim dividend for the year ended 31 March 2021 of 0.8678p per share(2020: for the year ended 31 March 2020 of 0.8678 p per share)2,0002,000Total dividends paid in the year4,5002,00016. Dividends2021£’0002020£’000Amounts recognised as distributions to equity holders in the year: Final dividend for the year ended 31 March 2020 of 1.0850p per share(2020: for the year ended 31 March 2019 of nil p per share)2,500-Interim dividend for the year ended 31 March 2021 of 0.8678p per share(2020: for the year ended 31 March 2020 of 0.8678 p per share)2,0002,000Total dividends paid in the year4,5002,000

18. Property, plant and equipment
18. Property, plant and equipment

Cost
Cost
At 1 April 2019
At 1 April 2019
Additions
Additions
Acquisition through business combinations
Acquisition through business combinations
Disposals
Disposals
At 31 March 2020
At 31 March 2020
Additions
Additions
Acquisition through business combinations
Acquisition through business combinations
Transferred from right of use assets
Transferred from right of use assets
Disposals
Disposals
At 31 March 2021
At 31 March 2021
Depreciation
Depreciation

At 1 April 2019
At 1 April 2019
Charge for the year
Charge for the year
On disposals
On disposals
At 31 March 2020
At 31 March 2020
Charge for the year
Charge for the year
Transferred from right of use assets
Transferred from right of use assets
On disposals
On disposals

At 31 March 2021
At 31 March 2021
Net book value
Net book value

At 31 March 2021
At 31 March 2021
At 31 March 2020
At 31 March 2020

Land and
Land and
buildings
buildings
£’000
£’000

Plant and
Plant and
machinery
machinery
£’000
£’000

Fixtures,
Fixtures,
fittings and
fittings and
equipment
equipment
£’000
£’000

Motor
Motor
vehicles
vehicles
£’000
£’000

3,025
3,025
398
398
60
60
-
-
3,483
3,483
5,060
5,060
-
-
-
-
-
-
8,543
8,543

213
213
247
247
-
-
460
460
305
305
-
-
-
-

765

7,778
3,023

336
336
299
299
63
63
(1)
(1)
697
697
102
102
4
4
-
-
(14)
(14)
789
789

123
123
141
141
-
-
264
264
135
135
-
-
(4)
(4)

396

393
433

242
242
67
67
62
62
-
-
371
371
309
309
9
9
-
-
-
-
689
689

93
93
81
81
-
-
174
174
93
93
-
-
-
-
267
267

422
422
197
197

466
466
187
187
144
144
(43)
(43)
754
754
198
198
-
-
127
127
(115)
(115)
964
964

126
126
126
126
(18)
(18)
234
234
193
193
60
60
(55)
(55)

432

532
520

Total
Total
£’000
£’000

4,069
4,069
951
951
329
329
(44)
(44)
5,305
5,305
5,669
5,669
13
13
127
127
(129)
(129)
10,985
10,985

555
555
595
595
(18)
(18)
1,132
1,132
726
726
60
60
(59)
(59)

1,860

9,125
9,125
4,173
4,173

The Company has no property, plant and equipment.
The Company has no property, plant and equipment.
Included within land and buildings is freehold land amounting to £1,113,000 (2020: £348,000) which is not depreciated.
Included within land and buildings is freehold land amounting to £1,113,000 (2020: £348,000) which is not depreciated.
Property, plant and equipment with a carrying value of £7,920,000 (2020: £2,983,000) is pledged as security for the Group’s bank loan.
Property, plant and equipment with a carrying value of £7,920,000 (2020: £2,983,000) is pledged as security for the Group’s bank loan.

F I N A N C I A L S T A T E M E N T S

85
85

Brick-ability trading group

PVH trading group

HHG trading group

Other CGUs

Total

2021

£’000

12,845

16,399

12,690

8,019

49,953

2020

£’000

12,845

16,399

12,690

7,512

49,446

The goodwill allocated to the Brick-ability trading group, PVH

the average long-term growth rate for the relevant markets. The

trading group and HHG trading group CGUs is considered

rates used to discount the forecast cash flows are 10.00% – 12.60%

significant in comparison with the Group’s total carrying amount

(2020: 10.00%) derived from the CGU’s weighted average cost of

of goodwill. CGUs within the Other CGU category represent

capital (WACC).

between 0.03% and 6.15% of the total goodwill and relate to the

business operations of entities acquired during the current and

previous years.

The impairment loss of £nil (2020: £16,000) in the period relates

to goodwill held in a subsidiary and is included within the Other

CGU total above. This goodwill arose following incorporation of

The Group estimates the recoverable amount of each CGU using

that subsidiary and acquisition of the business previously operating

a value in use model by projecting cash flows for the next three

as a partnership. Given the age of the goodwill asset, management

years together with a terminal value using a growth rate. The key

no longer considered that economic benefits generated by that

assumptions underpinning the recoverable amounts of the CGUs

subsidiary were attributable to this asset. Its carrying amount was

tested for impairment are forecast revenues and EBITDA and the

therefore written down to £nil, based on its value in use.

discount rate applied.

Revenue and EBITDA forecast in the impairment models are

The total recoverable amount in respect of goodwill arising on

consolidation, other intangibles and other non-financial assets,

based on management’s past experience and future expectations

as assessed by management using the above assumptions, is

of performance. The projections also consider the ongoing

greater than the carrying amount. No further impairment loss has

impact of the COVID-19 pandemic, with assumptions for future

therefore been recorded, in either the current or previous year.

trade supported by actual trends and performance during the

The projections used in the impairment reviews have also been

pandemic. For each CGU, a growth rate of 2% (2020: 2%) is used

sensitised. Given the level of headroom, management currently

to extrapolate cash flow projections beyond the three year period

consider that it is not reasonably possible for the assumptions to

covered by the most recent forecasts. This rate does not exceed

change so significantly as to eliminate the excess.

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
YEAR ENDED 31 MARCH 2021
YEAR ENDED 31 MARCH 2021

The carrying amount of goodwill is allocated to CGUs as follows:

19. Intangible assets
19. Intangible assets

Cost
Cost
At 1 April 2019
At 1 April 2019
Additions
Additions
Acquisition through business combinations
Acquisition through business combinations
At 31 March 2020
At 31 March 2020
Additions
Additions
Acquisition through business combinations
Acquisition through business combinations
Disposals
Disposals
At 31 March 2021
At 31 March 2021
Amortisation and impairment
Amortisation and impairment
At 1 April 2019
At 1 April 2019
Charge for the year
Charge for the year
Impairment
Impairment
At 31 March 2020
At 31 March 2020
Charge for the year
Charge for the year
Impairment
Impairment
On disposals
On disposals
At 31 March 2021
At 31 March 2021
Net book value
Net book value
At 31 March 2021
At 31 March 2021
At 31 March 2020
At 31 March 2020

Customer & supplier
Customer & supplier
relationships and
relationships and
other intangibles
other intangibles
£’000
£’000

Goodwill
Goodwill
£’000
£’000

20,801
20,801
-
-
5,734
5,734
26,535
26,535
-
-
1,489
1,489
-
-
28,024
28,024

2,221
2,221
2,420
2,420
-
-
4,641
4,641
2,813
2,813
-
-
-
-
7,454
7,454

43,388
43,388
-
-
6,074
6,074
49,462
49,462
-
-
507
507
-
-
49,969
49,969

-
-
16
16
-
-
-
16

Total
Total
£’000
£’000

69,540
69,540
-
-
14,372
14,372
83,912
83,912
-
-
2,417
2,417
-
-
86,329
86,329

2,787
2,787
3,059
3,059
16
16
5,862
5,862
3,619
3,619
-
-
-
-
9,481
9,481

20,570
20,570
21,894
21,894

49,953
49,953
49,446
49,446

76,848
76,848
78,050
78,050

Brands
£’000

5,351
5,351
-
-
2,564
2,564
7,915
7,915
-
-
421
421
-
-
8,336
8,336

566
566
639
639
-
-
1,205
1,205
806
806
-
-
-
-
2,011
2,011

6,325
6,325
6,710
6,710

The Company has no intangible assets.
The Company has no intangible assets.
Goodwill is reviewed annually for impairment. As outlined within the key sources of estimation uncertainty, in note 4 of the financial
Goodwill is reviewed annually for impairment. As outlined within the key sources of estimation uncertainty, in note 4 of the financial
statements, the ongoing COVID-19 pandemic led to significant changes in the market in which the Group operates. This has given
statements, the ongoing COVID-19 pandemic led to significant changes in the market in which the Group operates. This has given
rise to an indication of potential impairment. As such, impairment reviews have also been carried out in respect of other intangible
rise to an indication of potential impairment. As such, impairment reviews have also been carried out in respect of other intangible
assets and other non financial assets, including property, plant and equipment and right of use assets.
assets and other non financial assets, including property, plant and equipment and right of use assets.
Impairments of investments in associates are disclosed in note 22.
Impairments of investments in associates are disclosed in note 22.
The carrying amount of goodwill and impairment losses by segment are as follows:
The carrying amount of goodwill and impairment losses by segment are as follows:

20. Subsidiaries

At 1 April 2019
Recognised on acquisitions
Impairment
At 31 March 2020
Recognised on acquisitions
Impairment
At 31 March 2021

Bricks and Building
Bricks and Building
Materials
Materials
£’000
£’000

Roofing Services
Roofing Services
£’000
£’000

Heating, Plumbing
Heating, Plumbing
and Joinery
and Joinery
£’000
£’000

Consolidated
£’000

18,399
18,399
5,940
5,940
(16)
(16)
24,323
24,323
388
388
-
-
24,711
24,711

12,299
12,299
-
-
-
-
12,299
12,299
-
-
-
-
12,299
12,299

12,690
12,690
134
134
-
-
12,824
12,824
119
119
-
-
12,943
12,943

43,388
43,388
6,074
6,074
(16)
(16)
49,446
49,446
507
507
-
-
49,953
49,953

Impairment losses regarding goodwill are included within the depreciation and amortisation expense in the Statement of Profit or Loss.
Impairment losses regarding goodwill are included within the depreciation and amortisation expense in the Statement of Profit or Loss.

86
86

F I N A N C I A L S T A T E M E N T S

Company2021 £’0002020 £’000Shares in group undertakings Cost and carrying value6,5426,542

The carrying amount of goodwill is allocated to CGUs as follows:
The carrying amount of goodwill is allocated to CGUs as follows:

Brick-ability trading group

PVH trading group

HHG trading group

Other CGUs

Total

2021
2021
£’000
£’000

12,845

16,399

12,690

8,019

49,953

2020
2020
£’000
£’000

12,845

16,399

12,690

7,512

49,446

The goodwill allocated to the Brick-ability trading group, PVH
The goodwill allocated to the Brick-ability trading group, PVH
trading group and HHG trading group CGUs is considered
trading group and HHG trading group CGUs is considered
significant in comparison with the Group’s total carrying amount
significant in comparison with the Group’s total carrying amount
of goodwill. CGUs within the Other CGU category represent
of goodwill. CGUs within the Other CGU category represent
between 0.03% and 6.15% of the total goodwill and relate to the
between 0.03% and 6.15% of the total goodwill and relate to the
business operations of entities acquired during the current and
business operations of entities acquired during the current and
previous years.
previous years.
The Group estimates the recoverable amount of each CGU using
The Group estimates the recoverable amount of each CGU using
a value in use model by projecting cash flows for the next three
a value in use model by projecting cash flows for the next three
years together with a terminal value using a growth rate. The key
years together with a terminal value using a growth rate. The key
assumptions underpinning the recoverable amounts of the CGUs
assumptions underpinning the recoverable amounts of the CGUs
tested for impairment are forecast revenues and EBITDA and the
tested for impairment are forecast revenues and EBITDA and the
discount rate applied.
discount rate applied.
Revenue and EBITDA forecast in the impairment models are
Revenue and EBITDA forecast in the impairment models are
based on management’s past experience and future expectations
based on management’s past experience and future expectations
of performance. The projections also consider the ongoing
of performance. The projections also consider the ongoing
impact of the COVID-19 pandemic, with assumptions for future
impact of the COVID-19 pandemic, with assumptions for future
trade supported by actual trends and performance during the
trade supported by actual trends and performance during the
pandemic. For each CGU, a growth rate of 2% (2020: 2%) is used
pandemic. For each CGU, a growth rate of 2% (2020: 2%) is used
to extrapolate cash flow projections beyond the three year period
to extrapolate cash flow projections beyond the three year period
covered by the most recent forecasts. This rate does not exceed
covered by the most recent forecasts. This rate does not exceed

the average long-term growth rate for the relevant markets. The
the average long-term growth rate for the relevant markets. The
rates used to discount the forecast cash flows are 10.00% – 12.60%
rates used to discount the forecast cash flows are 10.00% – 12.60%
(2020: 10.00%) derived from the CGU’s weighted average cost of
(2020: 10.00%) derived from the CGU’s weighted average cost of
capital (WACC).
capital (WACC).
The impairment loss of £nil (2020: £16,000) in the period relates
The impairment loss of £nil (2020: £16,000) in the period relates
to goodwill held in a subsidiary and is included within the Other
to goodwill held in a subsidiary and is included within the Other
CGU total above. This goodwill arose following incorporation of
CGU total above. This goodwill arose following incorporation of
that subsidiary and acquisition of the business previously operating
that subsidiary and acquisition of the business previously operating
as a partnership. Given the age of the goodwill asset, management
as a partnership. Given the age of the goodwill asset, management
no longer considered that economic benefits generated by that
no longer considered that economic benefits generated by that
subsidiary were attributable to this asset. Its carrying amount was
subsidiary were attributable to this asset. Its carrying amount was
therefore written down to £nil, based on its value in use.
therefore written down to £nil, based on its value in use.
The total recoverable amount in respect of goodwill arising on
The total recoverable amount in respect of goodwill arising on
consolidation, other intangibles and other non-financial assets,
consolidation, other intangibles and other non-financial assets,
as assessed by management using the above assumptions, is
as assessed by management using the above assumptions, is
greater than the carrying amount. No further impairment loss has
greater than the carrying amount. No further impairment loss has
therefore been recorded, in either the current or previous year.
therefore been recorded, in either the current or previous year.
The projections used in the impairment reviews have also been
The projections used in the impairment reviews have also been
sensitised. Given the level of headroom, management currently
sensitised. Given the level of headroom, management currently
consider that it is not reasonably possible for the assumptions to
consider that it is not reasonably possible for the assumptions to
change so significantly as to eliminate the excess.
change so significantly as to eliminate the excess.

20. Subsidiaries
20. Subsidiaries

F I N A N C I A L S T A T E M E N T S

87
87

Company2021 £’0002020 £’000Shares in group undertakings Cost and carrying value6,5426,542Company2021 £’0002020 £’000Shares in group undertakings Cost and carrying value6,5426,542NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
YEAR ENDED 31 MARCH 2021

20. Subsidiaries (continued)
At the reporting date, the Company had the following subsidiary undertakings, all of which are included in these consolidated financial statements:
Proportion of shares
held 2020

Proportion of shares
held 2021

Country of operation
and incorporation

Class of
share held

Subsidiary

Brickability Enterprises Holding Limited
Brickability Enterprises Investments Limited
Brickability UK Holdings Limited (1)
Brick-ability Ltd. (2)
Brick Services Limited (2)
The Matching Brick Company Limited (2)
Brick-Link Limited (2)
Plansure Building Products Limited (2)
P V H Holdings Limited (1)
Crest Brick Slate & Tile Limited (3)
Crest Roofing Limited (3)
Crown Roofing (Centres) Limited (5)
Excel Roofing Services Limited (5)
Hamilton Heating Group Limited (1)
Towelrads.com Limited (6)
Radiatorsonline.com Ltd (6)
Frazer Simpson Limited (1)
FSN Doors Limited (1)
DSH Flooring Limited (6)
CPG Building Supplies Limited (1)
Brickwise Ltd (1)
The Bespoke Brick Company Limited (1)
The Brick Slip Business Limited (1)
Brickmongers (Wessex) Ltd (2)
LBT Brick & Facades Limited (2)
McCann Roofing Products Limited (4)
U Plastics Limited (1)
Bathroom Barn Limited (7)
McCann Logistics Ltd (3)
Forum Tiles Limited (8)

England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales

Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary

100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
-
100%
100%
100%
100%
100%
100%
100%
100%
75%

100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
-
-
-

(1) Wholly owned by Brickability Enterprises Investments Limited.
(2) Wholly owned by Brickability UK Holdings Limited.
(3) Wholly owned by P V H Holdings Limited.

(4) Wholly owned by Crest Brick Slate & Tile Limited.
(5) Wholly owned by Crest Roofing Limited.
(6) Wholly owned by Hamilton Heating Group Limited.

(7) Wholly owned by Towelrads.com Limited.
(8) 75% owned by Towelrads.com Limited.

Brickwise Ltd was a non-trading, dormant subsidiary that was dissolved via voluntary strike-off during the year.

Forum Tiles Limited was incorporated on 14 January 2021, with the Group owning 75% of the issued share capital. The non-controlling interest
is not material to the Group and thus no further disclosure is included in respect of the profit or loss allocated to non-controlling interests.

By virtue of section 479A of the Companies Act 2006, the following subsidiaries are exempt from the requirements relating to the audit of
individual accounts, with the ultimate parent company, Brickability Group plc, providing a guarantee for these companies under section 479C:

Subsidiary

Company number

Subsidiary

Company number

Brickability Enterprises Holding Limited
Brickability Enterprises Investments Limited

Brickability UK Holdings Limited

P V H Holdings Limited

Hamilton Heating Group Limited

The Matching Brick Company Limited

Plansure Building Products Limited

CPG Building Supplies Limited

10332050
10332505

07805178

02484708

09921801

02530773

06016447

02937329

The Brick Slip Business Limited
Brickmongers (Wessex) Ltd

Radiatorsonline.com Ltd

Frazer Simpson Limited

FSN Doors Limited

DSH Flooring Limited

McCann Logistics Ltd

09707800
06944174

10757797

06838234

07304174

08209834

01403830

The Directors believe that the likelihood of the guarantee being called upon is remote, based on the above subsidiaries either being
intermediate parents within the Group, with primarily just Group debt balances, or considered low risk.

21. Business combinations
The Group acquired the entire share capital and 100% of the voting rights in the following companies during the year:

Company acquired

Bathroom Barn Limited

*Formerly McCann Limited

Acquisition date

Company acquired

30 November 2020

McCann Logistics Ltd*

Acquisition date

4 December 2020

The fair value of the assets acquired and liabilities assumed on acquisition are as follows:

Property plant and equipment
Right of use assets
Identifiable intangible assets
Inventory
Trade and other receivables
Cash and cash equivalents
Trade and other payables
Lease liabilities
Deferred tax
Total identifiable net assets
Goodwill
Total consideration
Satisfied by:

Cash paid
Deferred cash consideration
Contingent consideration (note 33)
Total consideration

Bathroom Barn Limited
£’000

McCann Logistics Ltd
£’000

2
-
427
309
264
1,499
(180)
-
(81)
2,240
119
2,359

1,323
805
231
2,359

11
287
1,482
16
1,678
775
(1,657)
(287)
(320)
1,985
405
2,390

1,225
276
889
2,390

Included in the consolidated financial statements are the following amounts of revenue and profit in respect of the subsidiaries acquired:

Revenue

Net profit

Bathroom Barn Limited
£’000

McCann Logistics Ltd
£’000

361

2,312

144

Had the current year business combinations taken place at the beginning of the financial year, the Group’s revenue for the year
would have been £185,840,000 (2020: £206,278,000) and Group profit would have been £10,006,000 (2020: £11,215,000).

F I N A N C I A L S T A T E M E N T S

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
YEAR ENDED 31 MARCH 2021

21. Business combinations (continued)

Acquisition related costs, included in administrative expenses (note 14), amounted to £105,000, made up as follows:

Acquisition costs

The Group acquired each of the above subsidiaries in order
to expand its network within the UK and increase the range of
products that can be offered to its customers.

Contingent consideration
The Group has entered into contingent consideration
arrangements during the purchase of several subsidiaries. Final
amounts payable under these agreements are all subject to future
performance and the acquired business achieving pre-determined
EBITDA targets, over the three years following acquisition.

The fair value of all contingent consideration is based on a
discounting cash flow model, applying a discount rate of between
1.7% and 4.9% to the expected future cash flows.

Bathroom Barn Limited
£’000

McCann Logistics Ltd
£’000

Goodwill principally comprises the value of expected synergies arising
from the acquisitions and the value of the assembled workforce.

None of the goodwill is expected to be deductible for tax purposes.

Summarised below are the fair values of the contingent
consideration at both acquisition and reporting date, the potential
undiscounted amount payable and the discount rates applied
within the discounting cash flow models, for each acquisition
where contingent consideration arrangements remain in place.

Company
acquired

Discount
rate

Fair value at
acquisition
£’000

Fair value at
reporting date
2021
£’000

Fair value at
reporting date
2020
£’000

Undiscounted
amount payable
2021
£’000

Undiscounted
amount payable
2020
£’000

The Bespoke Brick Com-
pany Limited

Brickmongers (Wessex)
Ltd

CPG Building Supplies
Limited

U Plastics Limited

Bathroom Barn Limited

McCann Logistics Ltd

4.9%

4.8%

4.0%

3.5%

1.7%

138

(201)

2,208

231

889

2,270

241

931

143

2,214

2,400

248

958

155

2,400

The total potential undiscounted amount payable in respect of U Plastics ranges from £246,000 to £2,400,000 (2020: £nil to
£2,400,000). It is not possible to determine a range of outcomes for the other companies acquired as the arrangements do not
contain a maximum payable.

A sensitivity in respect of the inputs into the discounted cash flow model, determining the contingent consideration, is outlined in note 33.

22. Associates
At the reporting date, the Group had the following associated undertaking, which is included in the consolidated financial
statements using the equity method:

Associate

Apex Brickcutters Limited

Country of operation
and incorporation

England and Wales

Class of
share held

Ordinary

Proportion of shares held

50%

During the year, the Group reduced its share in Financewell
Limited to a level where the Group is no longer considered to have
significant influence. The investment in associate has therefore
been disposed of and the investment is now classified as an
investment in a financial asset (see note 23).

Investments in associates are not attributed to the Group’s
reportable segments. Impairment losses in the prior year,
in respect of investments in associates, are included within
exceptional expenses within the Statement of Profit or Loss (note
14). No impairment loss has been recognised in the current year.

During the prior year, an impairment loss of £509,000 was
recognised in relation to the investment in Financewell Limited, as
the company was not trading profitably and further losses were
anticipated. The investment was written down to its recoverable
amount of £125,000, based on fair value less costs of disposal.
Costs of disposal were expected to be minimal. The fair value was

based on an agreement in principal to sell the investment.
As the fair value was based on the price agreed in an active
market, but not quoted, it was considered to be at level 2 of the
fair value hierarchy.

During the year, an impairment loss of £nil (2020: £366,000)
was recognised in relation to Apex Brickcutters Limited as the
company had not been trading as profitably as it had been
historically and the carrying value had included an element
of goodwill. The investment in Apex Brickcutters Limited was
written down to its recoverable amount of £227,000, based
on its fair value less costs of disposal. The fair value was based
on an amount equal to the Group’s share of the net assets of
the associate, based on its latest financial statements. As the
associate is unquoted but its net asset value is observable, with its
carrying value of assets and liabilities not expected to be subject
to significant adjustments to reflect fair value, it is considered to
be at level 2 of the fair value hierarchy.

23. Investments
Investments in equity instruments at fair value through other comprehensive income

2021
£’000

2020
£’000

Non-current

At 1 April

Additions

Change in fair value recognised in OCI

At 31 March

125

During the year, a group re-organisation took place which
resulted in the Group’s 25% share in Financewell Limited being
exchanged for a 12.5% share of Lendwell Holdings Limited, a new
parent company of Financewell Limited.

The Group’s investment is therefore no longer accounted for
as an investment in associate, under the equity method, but
classified as an investment, measured at fair value through other
comprehensive income.

The equity investments are not held for trading and thus the
Group has made an irrevocable election to classify the equity

instruments at fair value through other comprehensive income as
it is considered more appropriate for this nature of investment.

There has been no significant change in the fair value of the
investment since recognition. The fair value is based on the
Group’s share of the net assets of the entity in which it has the
investment, under a cost approach. The investment is in an
unquoted entity but the fair value of the assets and liabilities are
not expected to be significantly different to the carrying value.
As the net asset value is observable, it is considered to be at level
2 of the fair value hierarchy.

F I N A N C I A L S T A T E M E N T S

Interest in associates2021£’0002020£’000At 1 April 3521,292Dividends received from associates-(33)Share of profit or loss(6)(32)Disposals(125)-Impairment of investments (note 14)-(875)At 31 March221352Aggregate information of associates that are not individually material2021£’0002020£’000Group’s share of profit or loss from continuing operations(6)(32)Group’s share of other comprehensive income--Group’s share of total comprehensive income(6)(32)

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
YEAR ENDED 31 MARCH 2021

24. Inventories

Goods for resale

25. Trade and other receivables

Current

Trade receivables

Less allowance for expected credit loss

Contract assets

Amounts owed by group undertakings

Prepayments and accrued income

Directors’ loan accounts

Other receivables

Non-current

Trade receivables

Other receivables

Group

Company

2021
£’000

12,127

2020
£’000

9,791

2021
£’000

2020
£’000

Group

Company

2021
£’000

38,553

(358)

38,195

2,651

978

1,008

2020
£’000

33,696

(592)

33,104

1,911

978

530

2021
£’000

2020
£’000

75,482

79,819

42,832

36,560

75,482

79,819

460

-
460

391

9,343

43,292

36,951

84,825

9,343

89,162

Other receivables for the Company relate to loan notes receivable.
The balance is due on the 10th anniversary of the loan note
instrument and is receivable from 6 March 2028. Interest, accrued
at 9.5% per annum up until IPO, is receivable when the loan notes
are repaid.

Trade receivables are non-interest bearing. The allowance for credit
losses has been determined by reference to past default experience
and a review of specific customers’ debts at the year end. The
Group considers a financial asset to be in default when contractual
payments are 90 days past due. However, the Group may also
consider a financial asset to be in default when internal or external
information indicates that the Group is unlikely to receive the
outstanding contractual amounts in full before taking into account
any credit enhancements held by the Group. Trade receivables are

written off when there is no reasonable expectation of recovering the
amounts due, for example when a customer has entered liquidation.

In determining the recoverability of a trade receivable, the Group
considers any change in the credit quality of the trade receivable
from the date credit was initially granted up to the reporting date.
The concentration of credit risk is limited due to the customer base
being large and unrelated.

An impairment analysis is performed at each reporting date using
a provision matrix to measure expected credit losses. The provision
rates are based on days past due for groupings of various customer
segments that have similar credit risk and loss patterns, for example
by customer type, size or credit rating.

The provision matrix is initially based on the Group’s historical
observed default rates over the previous 2 years. The Group will
then adjust the historical loss rate to take into account forward
looking information, for example when forecast economic
conditions, such as gross domestic product or unemployment
rates, are expected to deteriorate. At each reporting date, the
historical default rates are updated and forward looking estimates
re-assessed.

The Group has primarily experienced an increase in the ECL
rate among older debts due to some customers struggling
amid the COVID-19 pandemic. The forward looking estimates
applied have considered the ongoing impact of the pandemic

and potential future risk of loss, given the significant impact the
pandemic has had on the UK economy.

The Group maintains credit insurance for its main customers
within the Bricks and Building Materials segment, which will
mitigate some of this risk. Market recovery following the initial lock
down period has also been considered. Details of the Group’s
credit exposure is included in note 33.

Set out below is the risk profile of trade receivables and contract
assets based on the Group’s provision matrix. Any reasonable
change in rates applied would not result in a material adjustment
to the expected credit loss recognised.

Trade Receivables and Contract Assets
Days past due

31 March 2021

Expected credit loss rate

Gross carrying amount

Expected credit loss

Current
£’000

0.16%

24,823

< 30 days
£’000

30-60 days
£’000

61-90 days
£’000

0.27%

10,370

1.43%

1,888

9.2%

718

>91 days
£’000

16.18%

1,214

197

Total
£’000

39,013

358

Trade Receivables and Contract Assets
Days past due

31 March 2020

Expected credit loss rate

Gross carrying amount

Expected credit loss

Current
£’000

0.19%

16,899

< 30 days
£’000

30-60 days
£’000

61-90 days
£’000

>91 days
£’000

Total
£’000

0.29%

12,444

9.31%

2,990

278

4.24%

307

15.69%

1,484

233

34,124

592

F I N A N C I A L S T A T E M E N T S

Movement in the allowance for expected credit losses2021£’0002020£’000Balance at the beginning of the year 592710Impairment losses recognised341433Amounts written off as uncollectable(575)(551)358592NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
YEAR ENDED 31 MARCH 2021
YEAR ENDED 31 MARCH 2021

26. Cash and cash equivalents
26. Cash and cash equivalents

28. Loans and borrowings

Cash and cash equivalents

Group

Company
Company

2021
2021
£’000
£’000

8,592

2020
2020
£’000
£’000

27,269

2021
2021
£’000
£’000

2020
2020
£’000
£’000

Non-current

Bank loans

Cash and cash equivalents comprise cash and short-term bank deposits with an original maturity of three months or less.
Cash and cash equivalents comprise cash and short-term bank deposits with an original maturity of three months or less.
The carrying amount of these assets approximates to their fair value.
The carrying amount of these assets approximates to their fair value.

by certain trading subsidiaries.

Group

Company

2021

£’000

2020

£’000

2021

£’000

2020

£’000

15,750

24,912

15,750

24,912

The Directors consider that the carrying amount of loans and borrowings approximates to their fair value.

The bank loans are secured by a fixed charge over the Group’s properties and floating charges over the remaining assets of the

Group, including all property, investments and assets of the Company’s subsidiary undertakings. A guarantee has also been provided

27. Trade and other payables
27. Trade and other payables

Current

Trade payables

Amounts owed to group undertakings

Accruals and deferred income

Other taxation and social security

Deferred and contingent consideration

Other payables

Non-current

Deferred and contingent consideration

Group

Company
Company

2021
2021
£’000
£’000

2020
2020
£’000
£’000

2021
2021
£’000
£’000

2020
2020
£’000
£’000

27,481

27,159

5,869

3,388

1,372

659

38,769

3,289

3,070

8,020

374

41,912

9,925

159

120

10,084

166

3,153

41,922

2,402

44,314

10,084

166

Trade payables are non-interest bearing and principally comprise amounts outstanding for trade
Trade payables are non-interest bearing and principally comprise amounts outstanding for trade
purchases and ongoing costs. The Group’s policy is to pay all payables within its pre-agreed
purchases and ongoing costs. The Group’s policy is to pay all payables within its pre-agreed
credit terms, which, for the majority of suppliers, is a period of 30 days. The Directors
credit terms, which, for the majority of suppliers, is a period of 30 days. The Directors
consider that the carrying amount of trade payables approximates to their fair value.
consider that the carrying amount of trade payables approximates to their fair value.

94
94

F I N A N C I A L S T A T E M E N T S

28. Loans and borrowings
28. Loans and borrowings

Non-current

Bank loans

Group

Company
Company

2021
2021
£’000
£’000

2020
2020
£’000
£’000

2021
2021
£’000
£’000

2020
2020
£’000
£’000

15,750

24,912

15,750

24,912

The Directors consider that the carrying amount of loans and borrowings approximates to their fair value.
The Directors consider that the carrying amount of loans and borrowings approximates to their fair value.

The bank loans are secured by a fixed charge over the Group’s properties and floating charges over the remaining assets of the
The bank loans are secured by a fixed charge over the Group’s properties and floating charges over the remaining assets of the
Group, including all property, investments and assets of the Company’s subsidiary undertakings. A guarantee has also been provided
Group, including all property, investments and assets of the Company’s subsidiary undertakings. A guarantee has also been provided
by certain trading subsidiaries.
by certain trading subsidiaries.

F I N A N C I A L S T A T E M E N T S
F I N A N C I A L S T A T E M E N T S
F I N A N C I A L S T A T E M E N T S

95
95

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
YEAR ENDED 31 MARCH 2021

Land and buildings
£’000

Plant and vehicles
£’000

Equipment
£’000

2,135

3,364

891

(19)

6,371

534

287

7,192

326

522

(19)

829

631

1,460

5,732

5,542

406

563

(31)

996

125

1,765

(127)

(122)

2,637

124

169

(31)

262

452

(60)

(121)

533

2,104

734

100

143

181

109

Total
£’000

2,641

3,970

949

(50)

7,510

693

2,056

(127)

(122)

10,010

468

717

(50)

1,135

1,111

(60)

(121)

2,065

7,945

6,375

29. Leases

Group as lessee
Right of use assets

Cost

At 1 April 2019

Additions

Acquisition through business combinations

Disposals

At 31 March 2020

Additions

Acquisition through business combinations

Transferred to property, plant and equipment

Disposals

At 31 March 2021

Depreciation

At 1 April 2019

Charge for the year

Depreciation on disposals

At 31 March 2020

Charge for the year

Transferred to property, plant and equipment

Depreciation on disposals

At 31 March 2021

Carrying value

At 31 March 2021

At 31 March 2020

Lease liabilities

At 1 April 2019

Additions

Acquisition through business combinations

Interest expense

Lease payments

At 31 March 2020

Additions

Acquisition through business combinations

Interest expense

Lease payments

Foreign exchange losses

At 31 March 2021

Maturity analysis

Due within 1 year

Due between 1 and 5 years

Due after 5 years

Land and buildings
£’000

Plant and vehicles
£’000

Equipment
£’000

1,814

3,477

926

257

(624)

5,850

543

287

296

(871)

6,105

238

532

(219)

628

125

1,765

(494)

2,077

(28)

100

(33)

111

2021
£’000

1,497

2,688

4,108

8,293

Total
£’000

2,133

4,052

984

280

(871)

6,578

702

2,056

354

(1,398)

8,293

2020
£’000

776

2,034

3,768

6,578

The undiscounted maturity analysis in respect of lease payments is disclosed in note 33.

Included within administration expenses within the Consolidated Statement of Profit or Loss is an amount of £117,000 (2020:
£69,000) in respect of short-term leases and an amount of £6,000 (2020: £3,000) in respect of low value asset leases.

During the year, the Group received COVID-19 related rent concessions of £15,000, which is recognised as a credit within
administrative expenses within the profit or loss.

The lease liabilities are secured over the assets to which they relate. The Group is not permitted to pledge these assets as security for
any other borrowings or to sell them to another entity.

The Company does not have any right of use assets or lease liabilities.

Group as lessor
The Group does not have significant leasing activities acting as a lessor. Operating leases, in which the Group is the lessor relate to
the sub-let of part of its freehold and leasehold property.

Rental income on operating leases recognised in the Statement of Profit or Loss is as follows:

Rental income

2021
£’000

2020
£’000

F I N A N C I A L S T A T E M E N T S

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
YEAR ENDED 31 MARCH 2021

29. Leases (continued)
Future minimum rentals receivable under non-cancellable operating leases at the reporting date are as follows:

Maturity analysis

Due within 1 year

Due between 1 and 5 years

The Company does not have any operating lease arrangements.

30. Provisions

Group

At 1 April 2019

Additions

Utilised in the year

Unused amounts reversed

At 31 March 2020

Additions

Utilised in the year

Unused amounts reversed

At 31 March 2021

2020
£’000

119

351

470

Defect provisions
£’000

Dilapidation
provisions
£’000

1,962

(650)

1,389

209

(62)

(289)

1,247

(13)

2019
£’000

Total
£’000

1,975

(13)

(650)

1,389

209

(62)

(289)

1,247

The Company does not have any provisions.
Defect provisions
A 10 year warranty is offered in connection with roofing services.
These warranties are offered in the normal course of business
and are in line with industry standards. Provision is therefore
recognised for expected defect claims on goods and services
sold during the last 10 years. The provision is based on the
estimated cost to rectify potential claims as a proportion of
sales, applied to sales in the previous 10 years. The rectification
cost is based on management’s best estimate of the Group’s
liability under the warranties granted, based on past experience.
The main uncertainty relates to estimating the value and
number of claims expected to be made.

Management consider their estimate on a case by case basis,
following a specific review of jobs carried out during the year.
This is considered to be the most appropriate method for
determining the provision due to the individual nature of the
materials used in construction, the size and geography of
the site and other external factors. The cost and number of

historical claims forms the basis of the estimated costs that
could potentially arise from future claims over the 10 year
warranty period. The cost of any warranty claim is charged
against the associated provision as those costs become payable.
Once the 10 year warranty period has expired, any unutilised
provision is released back to profit or loss. Due to the long-term
nature of the liabilities and uncertainty surrounding the potential
timing of the claims, the provision is inherently subjective. The
potential impact of discounting is considered immaterial.

Dilapidation provisions
Provision was recognised for expected repairs on the Group’s
operating premises. Leasehold dilapidations relate to the
estimated cost of returning a leasehold property to its original
state at the end of the lease in accordance with the lease terms.
The cost is now recognised as part of the right of use asset and
is depreciated over the remaining term of the lease. The main
uncertainty relates to estimating the cost that will be incurred at
the end of the lease.

31. Deferred tax

Group
The following are the major deferred tax liabilities and assets recognised by the Group and movements thereon during the current and
prior reporting period:

Accelerated tax
depreciation
£’000

Other temporary
differences
£’000

At 1 April 2019

Charged to profit or loss

Acquired through business combinations

At 31 March 2020

Charged to profit or loss

Acquired through business combinations

At 31 March 2021

662

(843)

(28)

(209)

(1)

(145)

Deferred tax assets and liabilities are presented in the Consolidated Balance Sheet as follows:

(4,010)

217

(1,424)

(5,217)

560

(401)

Total
£’000

(3,348)

(626)

(1,452)

(5,426)

625

(402)

(5,058)

(5,203)

The Company has no deferred tax assets or liabilities.

At the reporting date, the Group had no unused tax losses (2020: £nil), available for offset against future profits, where deferred tax
assets have not been provided.

32. Pensions

Defined contribution plans
The total expense recognised in profit or loss in relation to contributions payable under defined contribution pension plans is
£586,000 (2020: £463,000).

At the reporting date, contributions of £ 75,000 (2020: £72,000) due in respect of the reporting period had not yet been
paid over to the pension provider.

F I N A N C I A L S T A T E M E N T S

2021£’0002020£’000Deferred tax assets98205Deferred tax liabilities(5,301)(5,631)(5,203)(5,426)NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
YEAR ENDED 31 MARCH 2021

33. Financial instruments

The Group has the following financial assets and liabilities:

Fair values
Financial instruments not measured at fair value include cash and cash equivalents, trade and other receivables,
trade and other payables, loans and borrowings and lease liabilities.

Due to their short-term nature, the carrying value of cash and cash equivalents, trade and other receivables and
trade and other payables approximates their fair value.

For details of the fair value of loans and borrowings, refer to note 28.

100

Financial assets2021£’0002020 £’000Financial assets measured at amortised costCash and cash equivalents8,59227,269Trade and other receivables40,64235,040Total financial assets49,23462,309Financial liabilities2021£’0002020£’000Financial liabilities measured at amortised costTrade and other payables35,09238,887Loans and borrowings15,75024,912Lease liabilities8,2936,57859,13570,377Financial liabilities measured at fair value through profit or lossContingent consideration3,4422,3573,4422,357Total financial liabilities62,57772,734The significant unobservable inputs used in the fair value measurements categorised within level 3 of the fair value hierarchy,
together with a quantitative sensitivity analysis at 31 March 2021 and 31 March 2020 are shown below:

Valuation
technique

Significant
Unobservable
inputs

Present value
of future cash
flows

Assumed probability
-adjusted EBITDA of
acquired entities.

Financial
instrument

Contingent
Consideration
in a business
combination
(note 21)

Range/
estimate

2021:
£1,142,000 –
£3,852,000

2020:
£1,231,000 –
£3,750,000

Discount rate

2021: 1.7% - 4.9%

2020: 3.5% - 4.8%

Reconciliation of level 3 fair value measurements of financial instruments.

Sensitivity of the input to fair value

The higher the adjusted EBITDA, the higher the fair value. If forecast
EBITDA was 10% higher, while all other variables remained constant,
the fair value of the overall contingent consideration liability would
increase by £140,000. A 10% decrease in EBITDA would result in a
decrease in the liability of £424,000.
(2020: increase of £67,000 and decrease of £404,000)

The higher the discount rate, the lower the fair value. If the discount
rate applied was 2% higher, while all other variables remained
constant, the fair value of the overall contingent consideration liability
would decrease by £110,000. A 2% decrease in the rate would result
in an increase in the liability of £108,000.
(2020: decrease of £103,000 and increase of £109,000)

Contingent consideration
£’000

At 1 April 2019

Additions through business combinations

Finance expense charged to profit or loss

Settlement

Fair value losses recognised in profit or loss

At 31 March 2020

Additions through business combinations

Finance expense charged to profit or loss

Settlement

Fair value gains recognised in profit or loss

At 31 March 2021

Financial risk management objectives
The Group’s activities expose it to a variety of financial risks:
market risk (including cash flow, interest rate and currency risk),
investment risk, liquidity risk and credit risk. Risk management is
carried out by the directors. The Group finances its operations
through a mixture of debt finance, cash and liquid resources and
various items such as trade receivables and payables which arise
directly from the Group’s operations.

Interest rate risk
Interest rate risk is the risk that the fair value of future cash flows
associated with an instrument will fluctuate due to changes in
market interest rates. Interest bearing assets, including cash and
cash equivalents, are considered to the short-term liquid assets. It
is the Group’s policy to settle trade payables within the credit terms
allowed and thus the Group does not incur interest on overdue
balances. The Group’s exposure to interest rate risk is therefore
primarily in respect of its long-term floating rate borrowings.

(566)

(2,345)

(28)

627

(45)

(2,357)

(1,120)

(89)

(236)

360

(3,442)

In the prior year, the Group had a mix of fixed and floating rate
borrowings and used an interest rate swap to manage interest
rate risk volatility and hedge against interest exposure on future
firm commitments. The fair values of the assets and liabilities
held at fair value through profit or loss at the reporting date are
determined using quoted prices. Where quoted prices are not
available for derivatives, the fair value of derivatives has been
calculated by discounting the expected future cash flows at
prevailing interest rates.

The Group also has the facility to offset cash and cash equivalents
against its bank borrowings in order to minimise its interest charge.

Interest rate sensitivity analysis
The following table demonstrates the impact on the Group’s profit
before tax and equity based on the sensitivity of a reasonably
possible change in interest rates on the Group’s floating rate
borrowings, with all other variables held constant. The analysis is
prepared assuming the liability outstanding at the reporting date
was outstanding for the whole year.

F I N A N C I A L S T A T E M E N T S

101

Liquidity risk

The Group manages liquidity risk by maintaining sufficient cash balances and reserves and by ensuring it has adequate banking

and borrowing facilities available. Management reviews cash flow forecasts on a regular basis to determine whether the Group has

sufficient cash reserves to meet future working capital requirements and to take advantage of business opportunities.

Liquidity and inherent risk tables

The following tables detail the Group’s remaining contractual maturity for its financial liabilities, based on the undiscounted cash flows.

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
YEAR ENDED 31 MARCH 2021
YEAR ENDED 31 MARCH 2021

33. Financial instruments (continued)
33. Financial instruments (continued)

Sterling

2021

2020
2020

Change in rate

+ 0.25%

-0.25%

Effect on profit
Effect on profit
before tax
before tax
£’000
£’000

(40)

Change
Change
in rate
in rate

+0.25%

-0.25%

Effect on profit
Effect on profit
before tax
before tax
£’000
£’000

(63)

The change in interest rate is based on the observable market environment.
The change in interest rate is based on the observable market environment.

Foreign currency risk
Foreign currency risk
The Group undertakes transactions denominated in foreign currencies and thus there is the risk of exposure to changes in foreign currency
The Group undertakes transactions denominated in foreign currencies and thus there is the risk of exposure to changes in foreign currency
exchange rates. The Group enters into forward foreign exchange contracts in order to hedge against fluctuations in exchange rates.
exchange rates. The Group enters into forward foreign exchange contracts in order to hedge against fluctuations in exchange rates.

The carrying amounts of the Group’s foreign currency denominated monetary assets and liabilities at the reporting date are as follows:
The carrying amounts of the Group’s foreign currency denominated monetary assets and liabilities at the reporting date are as follows:

Assets

Liabilities
Liabilities

2021
2021
£’000
£’000

2020
2020
£’000
£’000

928

132

144

2021
2021
£’000
£’000

4,370

4,373

2020
2020
£’000
£’000

2,190

Euro

USD

Total
Total

Foreign currency sensitivity analysis
Foreign currency sensitivity analysis

The Group is mainly exposed to the Euro currency.
The Group is mainly exposed to the Euro currency.

The following table demonstrates the Group’s sensitivity to a reasonably possible change in the Euro exchange rates, with all other
The following table demonstrates the Group’s sensitivity to a reasonably possible change in the Euro exchange rates, with all other
variables held constant. The impact on the Group’s profit before tax is due to changes in the fair value of monetary assets and liabilities,
variables held constant. The impact on the Group’s profit before tax is due to changes in the fair value of monetary assets and liabilities,
including non-designated foreign currency derivatives. The impact on equity is due to changes in the fair value of forward contracts
including non-designated foreign currency derivatives. The impact on equity is due to changes in the fair value of forward contracts
and changes as a result of translating outstanding foreign currency denominated monetary items at the revised exchange rates.
and changes as a result of translating outstanding foreign currency denominated monetary items at the revised exchange rates.

Euro

USD

2021

2020
2020

Effect on profit
Effect on profit
and equity
and equity
before tax
before tax
£’000
£’000

Change in rate

+ 10%

- 10%

+ 10%

- 10%

313

(382)

Change
Change
in rate
in rate

+ 10%

- 10%

+ 10%

- 10%

Effect on profit
Effect on profit
and equity
and equity
before tax
before tax
£’000
£’000

187

(229)

(1)

The change in exchange rate is based on management’s assessment of the reasonably possible change in foreign exchange rates.
The change in exchange rate is based on management’s assessment of the reasonably possible change in foreign exchange rates.

102
102

F I N A N C I A L S T A T E M E N T S

103

31 March 2021 < 1 year £’0001 – 5 years £’000> 5 years £’000Total £’000Non-derivative financial liabilitiesTrade and other payables35,3843,323-38,707Lease liabilities1,7373,8565,53211,125Bank loans-15,900-15,900Total financial liabilities37,12123,0795,53265,73231 March 2020< 1 year £’0001 – 5 years £’000> 5 years £’000Total £’000Non-derivative financial liabilitiesTrade and other payables39,0232,515-41,538Lease liabilities1,0782,9334,9368,947Bank loans-25,000-25,000Total financial liabilities40,10130,4484,93675,485
Liquidity risk
Liquidity risk
The Group manages liquidity risk by maintaining sufficient cash balances and reserves and by ensuring it has adequate banking
The Group manages liquidity risk by maintaining sufficient cash balances and reserves and by ensuring it has adequate banking
and borrowing facilities available. Management reviews cash flow forecasts on a regular basis to determine whether the Group has
and borrowing facilities available. Management reviews cash flow forecasts on a regular basis to determine whether the Group has
sufficient cash reserves to meet future working capital requirements and to take advantage of business opportunities.
sufficient cash reserves to meet future working capital requirements and to take advantage of business opportunities.

Liquidity and inherent risk tables
Liquidity and inherent risk tables
The following tables detail the Group’s remaining contractual maturity for its financial liabilities, based on the undiscounted cash flows.
The following tables detail the Group’s remaining contractual maturity for its financial liabilities, based on the undiscounted cash flows.

F I N A N C I A L S T A T E M E N T S

103
103

31 March 2021 < 1 year £’0001 – 5 years £’000> 5 years £’000Total £’000Non-derivative financial liabilitiesTrade and other payables35,3843,323-38,707Lease liabilities1,7373,8565,53211,125Bank loans-15,900-15,900Total financial liabilities37,12123,0795,53265,73231 March 2020< 1 year £’0001 – 5 years £’000> 5 years £’000Total £’000Non-derivative financial liabilitiesTrade and other payables39,0232,515-41,538Lease liabilities1,0782,9334,9368,947Bank loans-25,000-25,000Total financial liabilities40,10130,4484,93675,48531 March 2021 < 1 year £’0001 – 5 years £’000> 5 years £’000Total £’000Non-derivative financial liabilitiesTrade and other payables35,3843,323-38,707Lease liabilities1,7373,8565,53211,125Bank loans-15,900-15,900Total financial liabilities37,12123,0795,53265,73231 March 2020< 1 year £’0001 – 5 years £’000> 5 years £’000Total £’000Non-derivative financial liabilitiesTrade and other payables39,0232,515-41,538Lease liabilities1,0782,9334,9368,947Bank loans-25,000-25,000Total financial liabilities40,10130,4484,93675,485

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
YEAR ENDED 31 MARCH 2021
YEAR ENDED 31 MARCH 2021

33. Financial instruments (continued)
33. Financial instruments (continued)

Capital risk management
Capital risk management
The capital structure of the Group consists of cash and cash equivalents, debt and equity. Equity comprises
The capital structure of the Group consists of cash and cash equivalents, debt and equity. Equity comprises
share capital, share premium, retained earnings and the merger reserve which is equal to the amount shown as
share capital, share premium, retained earnings and the merger reserve which is equal to the amount shown as
‘Equity’ in the Balance Sheet. Debt comprises loans and borrowings and lease liabilities.
‘Equity’ in the Balance Sheet. Debt comprises loans and borrowings and lease liabilities.

The Group’s objectives when maintaining capital are to:
The Group’s objectives when maintaining capital are to:
• Safeguard the Group’s ability to remain a going concern so that it can continue to pursue its growth plans;
• Safeguard the Group’s ability to remain a going concern so that it can continue to pursue its growth plans;
• Provide a reasonable expectation of future returns to shareholders; and
• Provide a reasonable expectation of future returns to shareholders; and
• Maintain adequate financial flexibility to preserve its ability to meet financial obligations, both current and long term.
• Maintain adequate financial flexibility to preserve its ability to meet financial obligations, both current and long term.

The Group is not subject to any externally imposed capital requirements.
The Group is not subject to any externally imposed capital requirements.

The Board reviews the capital structure annually, considering the cost of capital and the risks associated with each class of capital.
The Board reviews the capital structure annually, considering the cost of capital and the risks associated with each class of capital.

The Group’s gearing ratio at the reporting date is as follows:
The Group’s gearing ratio at the reporting date is as follows:

Debt

Cash and cash equivalents

Net debt

Equity

2021
2021
£’000
£’000

24,043

(8,592)

15,451

2020
2020
£’000
£’000

31,490

(27,269)

4,221

85,434

80,065

Net debt to equity ratio

18%

Debt is defined as short and long-term loans and borrowings and lease liabilities as detailed in notes 28 and 29. Equity includes all
Debt is defined as short and long-term loans and borrowings and lease liabilities as detailed in notes 28 and 29. Equity includes all
capital and reserves.
capital and reserves.

Credit risk and impairment
Credit risk and impairment
Credit risk refers to the risk that a counterparty will default on its
Credit risk refers to the risk that a counterparty will default on its
contractual obligations, resulting in a financial loss to the Group.
contractual obligations, resulting in a financial loss to the Group.
In order to minimise the risk, the Group endeavours to only deal
In order to minimise the risk, the Group endeavours to only deal
with companies which are demonstrably creditworthy. This,
with companies which are demonstrably creditworthy. This,
together with the aggregate financial exposure, is continuously
together with the aggregate financial exposure, is continuously

monitored; Credit approval processes are in place for new
monitored; Credit approval processes are in place for new
customers and regular reviews of credit limits carried out.
customers and regular reviews of credit limits carried out.
Credit insurance is also taken out where appropriate. Policies in
Credit insurance is also taken out where appropriate. Policies in
place primarily cover customers within the Bricks and Building
place primarily cover customers within the Bricks and Building
Materials segment.
Materials segment.

The maximum exposure to credit risk is the carrying value of the

Credit risk on cash and cash equivalents is considered to be very

Group’s financial assets, including trade and other receivables

low as the counterparties are all substantial banks with high

and cash and cash equivalents. The Group does not consider

credit ratings.

The Group does not hold any collateral or other credit enhancements

to cover its credit risks associated with its financial assets.

that there is any concentration of risk within either trade or other

receivables. The age of receivables is analysed and evaluated

on a regular basis for potential credit losses, considering historic,

current and forward-looking information. Details regarding the

credit risk exposure on trade receivables is outlined in note 25.

34. Share capital

Issued and fully paid

Ordinary shares of £0.01 each

Group and Company

2021

2020

Number

£’000

Number

£’000

230,458,821

2,305

230,458,821

2,305

Any profits distributed shall be applied pari passu amongst the holders of the ordinary shares. In the event of a liquidation, the surplus

assets shall be applied pari passu amongst the holders of the ordinary shares.

The Company has share option schemes under which options have been granted to certain employees to acquire ordinary shares.

Further details are included in note 36.

104
104

F I N A N C I A L S T A T E M E N T S

105

The maximum exposure to credit risk is the carrying value of the
The maximum exposure to credit risk is the carrying value of the
Group’s financial assets, including trade and other receivables
Group’s financial assets, including trade and other receivables
and cash and cash equivalents. The Group does not consider
and cash and cash equivalents. The Group does not consider
that there is any concentration of risk within either trade or other
that there is any concentration of risk within either trade or other
receivables. The age of receivables is analysed and evaluated
receivables. The age of receivables is analysed and evaluated
on a regular basis for potential credit losses, considering historic,
on a regular basis for potential credit losses, considering historic,
current and forward-looking information. Details regarding the
current and forward-looking information. Details regarding the
credit risk exposure on trade receivables is outlined in note 25.
credit risk exposure on trade receivables is outlined in note 25.

Credit risk on cash and cash equivalents is considered to be very
Credit risk on cash and cash equivalents is considered to be very
low as the counterparties are all substantial banks with high
low as the counterparties are all substantial banks with high
credit ratings.
credit ratings.

The Group does not hold any collateral or other credit enhancements
The Group does not hold any collateral or other credit enhancements
to cover its credit risks associated with its financial assets.
to cover its credit risks associated with its financial assets.

34. Share capital
34. Share capital

Issued and fully paid

Ordinary shares of £0.01 each

Group and Company

2021

2020

Number

£’000

Number

£’000

230,458,821

2,305

230,458,821

2,305

Any profits distributed shall be applied pari passu amongst the holders of the ordinary shares. In the event of a liquidation, the surplus
Any profits distributed shall be applied pari passu amongst the holders of the ordinary shares. In the event of a liquidation, the surplus
assets shall be applied pari passu amongst the holders of the ordinary shares.
assets shall be applied pari passu amongst the holders of the ordinary shares.

The Company has share option schemes under which options have been granted to certain employees to acquire ordinary shares.
The Company has share option schemes under which options have been granted to certain employees to acquire ordinary shares.
Further details are included in note 36.
Further details are included in note 36.

F I N A N C I A L S T A T E M E N T S

105
105

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
YEAR ENDED 31 MARCH 2021

35. Reserves
The share capital reserve represents the nominal value received
for shares issued.
The share premium reserve represents the amount received, for
shares issued, in excess of the nominal value, less transaction costs.
The capital redemption reserve represents the par value of shares
purchased back by the Company and subsequently cancelled.
The share-based payment reserve represents the value of equity
settled share-based payments provided to employees, including

key management personnel, as part of their remuneration.
See note 36.
The retained earnings reserve represents the total of all current
and prior period retained profits and losses.
The merger reserve in the Consolidated Balance Sheet represents
the difference between the carrying value of the assets and
liabilities acquired and the value of consideration transferred on
a previous group re-organisation. Within the Company Balance
Sheet, it represents the merger relief arising on a share for share
exchange in which the Company acquired a subsidiary.

36. Share-based payments
Equity settled share option plans
The Company operates a Company Share Option Plan (CSOP) and Long-term Incentive Plan (LTIP) for certain employees,
including senior management and Directors.

Company Share Option Plan (CSOP)
Options are exercisable at a price equal to the market value per ordinary share at the grant date. Options have a vesting period
of three years and a contractual life of ten years. Options are forfeited if the employee leaves employment before the options vest,
unless considered a ‘good leaver’.

Details of the share options outstanding during the year are as follows:

Outstanding at 1 April

Granted during the year

Forfeited during the year

Outstanding at 31 March

Exercisable at 31 March

2021

2020

Number of share
options

Weighted average
exercise price
£

Number of share
options

Weighted average
exercise price
£

3,635,422

(519,793)

3,115,629

106,203

0.41

3,681,311

(45,889)

3,635,422

0.41

No share options were exercised during the year.
The options outstanding at the reporting date have an exercise price of £0.41 and a remaining contractual life of 8.33 years (2020 9.33 years).
The aggregate of the estimated fair value of the options granted during the year is £nil (2020: £257,692).
No options have been granted under the CSOP during the year. For options granted during the prior year, the fair value was
determined using the binomial option pricing model. The inputs into this model are as follows:

Weighted average share price

Weighted average exercise price

Expected volatility

Option life

Expected dividend yield

Risk free interest rate

Sub-optimal exercise multiple

106

2021

2020

£0.41

23%

10 years

2.6%

0.34%

4.5x

The sub-optimal exercise multiple builds into the binomial option pricing model the assumption that once a vested option’s intrinsic
value reaches a certain multiple of the exercise price, the option-holder will choose to ‘cash in’ and exercise the option before it
reaches the end of its contractual life.

Expected volatility was determined using the average volatility of listed companies in the Building Materials FTSE ICB Subsector
weighted by market cap, as obtained from the LBS Risk Measurement Service’s report for the relevant period.

Long Term Investment Plan (LTIP)
On 16 November 2020, the Group granted options under
the LTIP scheme. The options are exercisable at the nominal
price of £0.01 and have performance based vesting conditions
dependent on total shareholder return (TSR) and adjusted
EBITDA, with each award split equally between the two
performance conditions. Vesting occurs on a straight-line basis
on achieving 18% (equivalent to 6% per annum) to 30%
(equivalent to 10% annually) of the relevant performance

condition over the performance period (3 years ending 1
October 2023). There is no vesting if the relevant target is
not met but a 50% vesting if the initial 18% hurdle is met with
a proportionate additional vesting of up to 100% at the 30%
threshold being met.

Options are forfeited if the employee leaves employment before
the options vest, unless considered a ‘good leaver’.

Details of the share options outstanding during the year are as follows:

2021

2020

Number of share
options

Weighted average
exercise price
£

Number
of share
options

Weighted
average
exercise price
£

5,621,074

(260,870)

(498,189)

4,862,015

0.01

Outstanding at 1 April

Granted during the year

Lapsed during the year

Forfeited during the year

Outstanding at 31 March

Exercisable at 31 March

No share options were exercised during the year.

The options outstanding at the reporting date have an exercise price of £0.01 and a remaining contractual life of 9.63 years.

The aggregate of the estimated fair value of the options granted during the year is £2,315,000.

For options granted during the year, the fair value in connection with the TSR awards was determined using a Monte Carlo
simulation model, while the fair value of the EBITDA awards was determined using a Black-Scholes model. The inputs into these
models are as follows:

Weighted average share price

Weighted average exercise price

Expected volatility

Option life

Expected dividend yield

Risk free interest rate

2021

£0.53

£0.01

25%

10 years

3.5%

0.39%

2020

F I N A N C I A L S T A T E M E N T S

107

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
YEAR ENDED 31 MARCH 2021

37. Notes to the statement of cash flows

Changes in liabilities arising from financing activities
The table below outlines the changes in the Group’s liabilities arising from financing activities, including both cash and non-cash changes.

1 April 2020
£’000

Financing
cash flows (1)
£’000

New leases
£’000

Acquisition of
subsidiaries
£’000

Changes In
fair value
£’000

Other
changes (2)
£’000

31 March
2021
£’000

Non-cash changes

Bank borrowings (note 28)

24,912

6,578

10,422

(9,190)

(1,398)

(7,883)

2,471

287

2,217

(360)

Lease liabilities (note 29)

Deferred and contingent
consideration

Total liabilities from
financing activities

41,912

(18,471)

2,471

2,504

(360)

355

128

511

15,750

8,293

4,524

28,567

(1) The cash flows make up the net amount of proceeds and repayments of loans and borrowings in the cash flow statement.
(2) Other changes include interest and fee accruals and payments.

1 April 2019
£’000

Financing
cash flows (1)
£’000

New leases
£’000

Acquisition of
subsidiaries
£’000

Conversion
to equity
£’000

Changes In
fair value
£’000

Other
changes (2)
£’000

31 March
2020
£’000

Non-cash changes

Bank borrowings (note 28)

36,422

Loan notes

Lease liabilities (note 29)

Deferred and contingent
consideration

Derivative financial
instruments

Total liabilities from
financing activities

(12,055)

(14,562)

(871)

(5,885)

28,966

2,133

8,449

106

(105)

5,036

1,514

8,266

(11,845)

(167)

(1)

545

(4,073)

280

(241)

24,912

6,578

10,422

76,076

(33,478)

5,036

9,780

(11,845)

(168)

(3,489)

41,912

(1) The cash flows make up the net amount of proceeds and repayments of loans and borrowings in the cash flow statement.
(2) Other changes include interest and fee accruals and payments.

Non cash changes in equity arising from financing activities
Shares issued in the prior year for consideration of £978,000 were funded by Directors’ loans (note 38). The cash inflow of £43,923,000
as proceeds from the issue of ordinary shares is therefore £978,000 less than the total reported in the Consolidated and Company
Statement of Changes in Equity, for the issue of paid shares, in the year ended 31 March 2020.

In addition to the conversion of loan notes into equity, amounting
to £nil (2020: £11,845,000), fees of £nil (2020: £2,087,000), in
connection with the IPO, were settled by the issue of shares in the
Company. Total debt converted to equity was therefore £nil
(2020: £13,932,000).

For the year ended 31 March 2020, the above mentioned fees of
£2,087,000 and the £414,000 of share issue costs paid, form
the total share issue costs of £2,501,000, as presented in the
Consolidated and Company Statement of Changes in Equity.

108

38. Related party transactions

Group
Transactions and balances between the Company and its subsidiaries, which are related parties, have been eliminated
on consolidation and are not disclosed in this note.

Transactions with Directors
Included within receivables are the following balances due from a Director and former Director:

Directors’ loan accounts

There has been no movement in the balance during the year.
In respect of Directors who had an overdrawn loan account
during the year, the following transactions took place
between the Directors and the Group:

Opening balance

Amounts advanced

Amounts repaid

Closing balance

£’000

978

2021
£’000

978

2020
£’000

978

The amounts advanced were for the purpose of paying up the
subscription price for ordinary D shares of £0.01 each, during the
financial year ended 31 March 2020. The loans are unsecured and
interest free and are repayable on the sale of any of the shares held
in the Company by the Director and former Director. The balance
has been repaid in full since the year end.

During the year, interest of £nil (2020: £317,000) was charged at
a rate of 9.5% per annum, to profit or loss in respect of loan notes
payable to Directors.

During the year, loan notes payable to Directors amounting to £nil
(2020: £5,883,000) were exchanged for shares in the Company.
Loan notes and accrued interest amounting to £nil (2020:
£3,818,000) were paid to Directors.

Key management personnel

Key management personnel compensation

Short-term employee benefits

Post-employment benefits

Share-based payment expense

2021
£’000

3,219

3,390

2020
£’000

2,033

2,101

During the year, interest of £nil (2020: £279,000) was charged at
a rate of 9.5% per annum, to profit or loss in respect of loan notes
payable to key management personnel. Loan notes payable to key
management personnel amounting to £nil (2020: £3,850,000)
were exchanged for shares in the Company. Loan notes and
accrued interest amounting to £nil (2020: £4,403,000) were paid
to key management personnel.
Included within the deferred consideration liabilities is an amount
of £nil (2020: £1,001,000) in respect of deferred consideration
payable to key management personnel, in connection with

acquisitions made by the Group on 6 March 2018. A finance
expense of £16,000 (2020: £85,000) was recognised in respect
of the unwinding of the discount applied to deferred consideration
due to key management.
During the year, the Group made sales amounting to £13,000
(2020: £68,000) to members of key management. A balance of
£7,000 (2020: £33,000) was included within trade receivables
at the reporting date, in respect of these sales. The Group also
purchased a motor vehicle from a member of key management
personnel for £nil (2020: £35,000).

F I N A N C I A L S T A T E M E N T S

109

110

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
YEAR ENDED 31 MARCH 2021

38. Related party transactions (continued)
Other related parties
Included within trade receivables/ payables are the following amounts due from/ to other related parties, at the reporting date:

Associates

Other related parties

Amounts owed by related parties

Amounts owed to related parties

2021
£’000

2020
£’000

120

2021
£’000

112

2020
£’000

Transactions undertaken between the Group and its related parties during the year were as follows:

Associates

Other related parties

Sales to related parties

Purchases from related parties

2021
£’000

2020
£’000

100

2021
£’000

474

199

673

2020
£’000

565

178

743

Other related parties comprise of entities owned by Directors
or key management. Purchases relate to rent and
administrative expenses.

During the year, the Group was charged £nil (2020: £50,000),
in respect of monitoring fees, by an entity in which members of
that entity previously had significant influence over the Group.

Interest of £nil (2020: £71,000) was accrued during the year in
respect of loan notes due to a close relative of a Director, at a
rate of 9.5% per annum. In the year, £nil (2020: £2,048,000)
was paid to this close relative, in respect of these loan notes.

Included within the deferred consideration liability is an amount
of £nil (2020: £1,363,000) in respect of deferred consideration
payable to close relatives of key management, in connection
with acquisitions made by the Group on 6 March 2018. A
finance expense of £21,000 (2020: £116,000) was recognised
in respect of the unwinding of the discount applied to deferred
consideration due to these close relatives.

Interest of £nil (2020: £211,000) was accrued during the year
in respect of loan notes issued to an entity in which members of
that entity previously had significant influence over the Group.
The loan notes were secured with interest payable, at 9.5% per
annum, on redemption. The loan notes were redeemable on 13
September 2026 but were settled during the prior year, with a
total of £6,978,000 paid on settlement.

Company
In accordance with the exemption under FRS 101, transactions
and balances with wholly owned Group members and key
management personnel are not disclosed.

F I N A N C I A L S T A T E M E N T S

111

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
YEAR ENDED 31 MARCH 2021

39. Post balance sheet events

On 20 May 2021, the Group purchased a property for £2,425,000.

On 7 June 2021, the Group granted 506,825 options under its LTIP scheme to a Director. The options were granted on the same
terms as previous awards, as disclosed in note 36.

On 30 June 2021, the Group completed the acquisition of the entire share capital and 100% of the voting rights in Taylor Maxwell
(2017) Limited, one of the UK’s leading suppliers of timber and non-combustible cladding to the construction industry.

The acquisition was made in order to expand the Group’s position in the UK market and further broaden the Group’s product
offering, whilst developing enhancement opportunities within the acquired business.

The book value of the separable assets acquired and liabilities assumed on acquisition are estimated as follows:

Property plant and equipment

Inventory

Trade and other receivables

Trade and other payables

Deferred tax

Total identifiable net assets

£’000

3,321

6,538

46,913

(47,797)

(363)

8,612

Due to the timing of the acquisition, a detailed assessment of the fair value of the identifiable net assets, and value of any
uncollectable contractual cash flows, has not yet been completed at the date of approving these financial statements.

The total consideration expected to be payable is:

Cash

Issue of shares

Contingent consideration

Total consideration

£’000

40,000

10,000

13,000

63,000

The above consideration is subject to post completion
adjustments and the initial cash consideration of £40 million
is subject to a retention in respect of certain indemnities given
under the share purchase agreement.

It is expected that goodwill will arise on the acquisition and this
will primarily comprise the value of expected synergies arising
from the acquisition and value of the assembled workforce. This
goodwill is not expected to be deductible for tax purposes.

The £10 million consideration through the issue of shares has
resulted in 9,900,990 new ordinary shares being issued.

The contingent consideration is subject to future performance
of the acquired business, measured against agreed adjusted
EBITDA targets, over the three years following acquisition. Due
to the timing of the acquisition, the above value represents the
undiscounted estimate of contingent consideration payable.
The total potential undiscounted contingent consideration
payable ranges from £nil to £13 million.

To fund the above acquisition and future bolt-on acquisitions,
the Company has placed 57,894,737 new ordinary shares
of £0.01 each, at an issue price of £0.95 per share with new
and existing institutional investors, raising £55 million before
fees and expenses. Shareholders involved in the management
of businesses within the Group, including Directors, key
management and persons connected with them, also sold 40
million existing ordinary shares, at the issue price of £0.95.

112

The above transactions have resulted in an increase of
67,795,727 ordinary shares, giving a total number of shares
of 298,254,548 and a revised share capital balance of
£2,983,000.

Total costs of £3,048,000 comprising stamp duty, legal and
professional fees and transaction costs, directly attributable
to the issue of new shares, are estimated to be incurred in
connection with the acquisition. Of this total, share transaction
costs of £2,280,000 are expected to be recognised as a
reduction in the share premium account, while the remaining
£768,000 will be recognised as an expense in profit or loss.
Again, due to the timing of the acquisition, not all costs have
been invoiced or finalised at the time of approving these
financial statements.

The Company has also entered into an agreement to extend its
borrowing facilities, increasing its facility limit from £30 million
to £60 million. Arrangement fees and legal and professional
fees associated with this re-financing are expected to amount
to £325,000.

On 30 July 2021, the Group completed the acquisition of the entire
share capital and 100% of the voting rights in Leadcraft Limited,
a UK provider of energy efficient roofing solutions.

The acquisition was carried out to expand the Group’s customer
base and further enhance its offering of environmentally
sustainable and efficient roofing products and services.

The book value of the separable assets acquired and liabilities
assumed on acquisition are estimated as follows:

Property plant and equipment

Inventory

Trade and other receivables

Trade and other payables

Deferred tax

Total identifiable net assets

£’000

123

681

(371)

(18)

428

The total consideration expected to be payable is:

Cash

Deferred cash consideration

Contingent consideration

Total consideration

£’000

3,300

1,320

390

5,010

The above consideration is subject to post completion adjustments.

The contingent consideration is subject to future performance of the acquired business, measured against agreed adjusted EBITDA
targets, over the three years following acquisition. Due to the timing of the acquisition, the above value represents the undiscounted
estimate of contingent consideration payable. It is not possible to determine a range of outcomes for the contingent consideration
payable as the arrangement does not contain a maximum payable.

It is expected that goodwill will arise on the acquisition and this will primarily comprise the value of expected synergies arising from
the acquisition and value of the assembled workforce. This goodwill is not expected to be deductible for tax purposes.

Acquisition costs of £78,000, in relation to stamp duty and legal and professional fees, are estimated to be incurred in connection
with this acquisition and will be recognised in profit or loss. Due to the timing of the acquisition, not all costs have been invoiced or
finalised at the time of approving these financial statements.

F I N A N C I A L S T A T E M E N T S

113

Financial
Calendar

Annual General Meeting
7 September 2021

Interim Report
November 2021

Dividends
Final announced August 2021
Paid September 2021

Interim announced November 2021
Paid February 2022

Registrars
Link Group
10th Floor
Central Square
29 Wellington Street
Leeds
LS1 4DL

Solicitors
Addleshaw Goddard LLP
Cornerstone
107 West Regent Street
Glasgow
G2 2BA

Nominated Adviser and Broker
Cenkos Securities plc
Tel: +44 (0) 20 7397 8900

Financial PR Advisers
Monfort Communications
Tel: +44 (0) 20 3770 7916

Financial Statements