Brickability Group PLC Annual Report 2022

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FY2022 Annual Report · Brickability Group PLC

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ANNUAL
REPORT
& ACCOUNTS
2021/22

Telephone
0870 143 3332

Email
investors@brickabilitygroupplc.com

Website
www.brickabilitygroupplc.com

Annual Report
& Accounts
for the year ended
31 March 2022

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

Chief Financial Officer’s Review

Going Concern and Outlook

Section 172(1) Statement

Environmental, Social and Governance (ESG)

Corporate Governance
Board of Directors

Group Management Board

Corporate Governance Statement

Report of the Nomination Committee

Report of the Audit and Risk Committee

Report of the Remuneration Committee

Report of the Directors

Statement of Directors’ Responsibilities

Independent Auditor’s Report

Financial Statements
Consolidated Statement of Profit or 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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Brickability at a Glance…

£520.2m (2021: £181.1m)
Revenue

£39.5m (2021: £17.5m)
Adjusted EBITDA*

£86.8m (2021: £38.0m)
Gross Profit
Gross Profit % 16.7% (2021: 21.0%)

£0.4m
(2021: £7.3m net debt**)
Net cash

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

** Net cash/(debt) is defined as cash less bank debt.

*** Adjusted EPS is calculated by dividing the adjusted

profit for the year by the weighted average number of
ordinary shares in issue.

• Significant growth through organic
performance alongside the
transformational acquisition of Taylor
Maxwell.

• Four strategic acquisitions in the year and

a further acquisition post year end.
• Further expansion of the Bricks and
Building Materials division, with property
purchased to facilitate new branch
openings within the U Plastics business.

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

O FI N

Y R O

R
E
N
O

D
N
A

BRICKABILITY KEY FACTS….
Three Core Divisions
Revenue
Bricks and Building Materials;
by Division
17 businesses operating from 49 sites.
Roofing Services;
5 businesses operating from 4 sites.
Heating, Plumbing and Joinery;
H
7 businesses operating from 5 sites.

UILDING MATERIA

B
R
C
K
S
A
N
D B

The Group currently employs in excess
of 600 skilled and experienced personnel.

£ 3 6 . 7 m £ 2 1 .2m

HEATING,
PLUMBING AND
JOINERY

ROOFING
SERVICES

3
m

BRICKS AND
BUILDING MATERIALS

Revenue by Division

£34.7m (2021: £15.0m)
Adjusted Profit Before Tax
4.40p (2021: 4.19p)
EPS
10.06p (2021: 5.56p)
Adjusted EPS***

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.

STRATEGIC REPORT

Chairman’s Statement

I am delighted to report that we have delivered a strong
performance over the last year across all of our business
divisions. Following a positive start to 2021, the Group
maintained momentum, delivering a robust financial
performance for the year ended 31 March 2022 with
revenue of £520.2 million up 187.2% from the prior year
and an adjusted EBITDA of £39.5 million up 125.7%.

Overview
FY2022 has been a transformational year
as we continued to focus on strategically
developing the Group both organically
and acquisitively. The year saw the Group
move into new segments within the market,
increase our import and distribution
capacity, expand our customer and client
base and build upon our existing product
portfolio, all of which has enabled us
to capitalise and respond to the strong
demand across the housebuilding sector
and achieve our key operational and
financial objectives.

I am pleased to say that the challenges we
had previously faced due to COVID-19 are
now behind us, and whilst the wider market
has today been impacted by new pressures
caused by macro-economic conditions and
the geo-political backdrop, the fundamentals
of the housebuilding market remain strong.
This has been another successful year for the
Group and yet again the results achieved
are thanks to the Group’s adaptability,
diversity, strength and ability to work together
to meet demands, manage pressures and
seize opportunities. We remain positive with
regards to the market outlook and the Board
is confident in the Group’s ability to continue
delivering on its strategy.

John Richards
Chairman

FY2022 has been a transformational year
as we focused on strategically developing
the Group both organically and acquisitively. The
year saw the Group move into new segments within
the market, increase our import and distribution capacity,
expand our customer and client base and build upon our
existing product portfolio, all of which has enabled us to capitalise
and respond to the strong demand across the housebuilding sector
and achieve our key operational and financial objectives.

This has been another successful year for the Group and yet again the results
achieved are thanks to the Group’s adaptability, diversity, strength and ability to
work together to meet demands, manage pressures and seize opportunities. We remain
positive with regards to the market outlook and the Board is confident in the Group’s ability to
continue delivering on its strategy.”

Acquisitions
Our strategy to date has focused on
diversifying and growing the Group in order to
create maximum shareholder returns. During
the year we announced a series of acquisitions
which have proved transformational, adding
both scale to the business and significantly
increasing our presence within the construction
and housebuilding industry.
In June 2021 we completed the significant
acquisition of Taylor Maxwell. This acquisition
has brought significant scale and diversity
to the Group through its product offering
by adding timber, cladding materials and
increasing our presence in brick distribution,
while also expanding the customer base, with
the business predominantly focusing activities
on the merchanting and specification markets.
Furthermore, we were honoured to have been
awarded the ‘AIM Transaction of the Year
Award’, at the AIM awards in October 2021 in
recognition of this acquisition.
Following the acquisition of Taylor Maxwell,
we were pleased to report the acquisitions of
Leadcraft Limited, HBS NE Limited, Beacon
Roofing Limited and the Schermbecker Building
Products GmbH joint venture. Each one of
these strategic acquisitions and partnerships
has enabled us to further diversify and
expand our proposition and meet the evolving
demands of the market, whether that be
emerging trends or in response to legislative
changes.
The acquisitions have now been integrated
within the wider Group and I’m pleased to say
they are all performing strongly. Post period in
May 2022, we were very pleased to announce
a further acquisition, Modular Clay Products
Ltd, which will significantly increase the Group’s
presence in the specification sector and bring
access to a range of new European clay facing
brick manufacturers. As we move forward,
whilst we remain focused on organic growth
and taking advantage of synergies across
the Group, we continue to look for strategic
opportunities for expansion and our pipeline of
acquisitions remains healthy.

People
The success of the Group is thanks to the
commitment and hard work of all our
colleagues within the Brickability Group
businesses.
As previously mentioned, the Group has
significantly grown over the last year, and we
recognise the need to continue to invest in
and support employees as we integrate new
businesses and continue to expand.

As part of the process of adapting to the
new scale of the Group post acquisitions, we
appointed Paul Hamilton, Managing Director
of the Heating, Plumbing and Joinery Division,
into the newly created role of Chief Operating
Officer (“COO”). In his role as COO, reporting
to Alan Simpson, CEO, Paul has driven
the integration process of the acquisitions,
standardising reporting and IT functions across
the Group, and also holds responsibility for
driving the Group’s ESG strategy.
With a growing portfolio of businesses and
product services and offerings, the Board also
took the decision to appoint a new Group
Marketing Director, Robbie Thompson.

Board and Environmental, Social
and Governance
We were delighted to announce the
appointment of Susan McErlain to the Board as
Independent Non-Executive Director with effect
from 9 May 2022. As part of her appointment
Susan has now also replaced me on both the
Audit and Remuneration Committees. I speak
on behalf of the entire Board when I say that
with her wealth of experience and successful
track record Susan is an excellent addition to
the Board and we look forward to continuing to
work with her.
As the Group continues to grow, we recognise
our role and responsibility in tackling ESG
priorities. At the end of 2021 we established
a Group ESG Committee comprised of
Board members and key members of Group
management, of which I am leading. One of
the first priorities of the ESG Committee was to
develop Brickability Group’s 2030 sustainability
strategy which I’m pleased to announce has
launched as of this month, July 2022, full details
of which are included in our ESG Report within
the Annual Report.
The strategy sets out plans to minimise the
Group’s negative impact and increase positive
impact on people, planet and partners, fully
integrating sustainability into our businesses
and exploring our ambition to be carbon net
zero in our sales businesses by 2030. The initial
focus has been on measurement, insight and
developing the ESG team and oversight.
We understand that in order to achieve
meaningful change we will need to work in
partnership with our employees, customers,
partners and suppliers. As a first step towards
this, we have been carrying out sustainability
workshops, with all employees, which are nearing
completion. Furthermore, this year we introduced
a new Group wide EV policy which will see the
transition of all company cars to Electric Vehicles
and the installation of EV chargers at Group sites.

The Board is committed to improving the
Group’s focus on diversity and inclusion, and
this year we have worked to eliminate any
bias in our pay and employment policies
and practices. We have completed our DEI
(diversity, equity, inclusion) data collection and
are now using the data to inform our DEI and
broader people strategy. We have a robust
recruitment policy that the Group will recruit,
train and reward based on merit and provide
opportunities for all our employees.
To maximise our ability to make a positive
impact on communities and the environment,
we were exceedingly proud to have launched
the Brickability Foundation Trust in February
2022. The Foundation will not only support
good causes but will also inspire and
enable our employees to make a difference
personally. Under the Foundation’s charter,
the Group will donate 0.5% of its Adjusted
EBITDA in each financial year to the
Foundation. £200,000 has been donated
during the 2021/22 financial year, with
£55,000 donated from the Foundation. The
major charity chosen for 2022 is Maggie’s
cancer charity.
The Board is pleased with the work that
has been carried out so far and remains
committed to continuing to build upon it.
We are especially proud of the enthusiasm
and entrepreneurial spirit with which our
employees have met the challenge of
transforming the business for the future.

Shareholder Returns and
Dividends
The Group paid an interim dividend of 0.96
pence per share on 24 February 2022 which
reflected the performance of the business and
the Board’s confidence in the longer-term
outlook.
With the continued growth on the back
of strong demand and positive market
fundamentals, the robust performance of the
Group enables the Board to recommend the
payment of a final dividend for the year ended
31 March 2022 of 2.04 pence per share.
Subject to shareholder approval at the Annual
General Meeting, the final dividend will be
payable on 22 September 2022, with a record
date of 26 August 2022 and an ex-dividend
date of 25 August 2022.

John Richards
Chairman
22 July 2022

STRATEGIC REPORT
Chief Executive’s Review

Positive ongoing momentum and demand for the Group’s
diverse multi business product offering resulted in the
Group delivering a set of strong results.

The results achieved are testament, not only to
the strategic positioning of Brickability within
the market, but also the Group’s ability to
successfully identify opportunities for growth
and expansion as well as being able to adapt to
changing market conditions.
As a growing, diversified, construction materials
distribution business, we seek to continuously
develop and strengthen our offering, improving
our services, expanding our product lines and
increasing our geographical footprint. Our
expertise in procurement, from both the UK
and overseas, sets us apart and is key to our
success, enabling us more recently to navigate
supply chain pressures, that include materials
shortages, price increases and HGV shortages,
efficiently and effectively, limiting the impact to
our businesses and customers.
As announced at the FY2022 interim results,
Group margins throughout the second half
of the year were expected to reduce slightly
reflecting the impact of Taylor Maxwell, which
operates on lower margins than the Brickability
Group was operating on prior to the acquisition.
The diversity of our business has helped us to
mitigate the overall impact of materials price
inflation with margins remaining resilient and we
expect this to be the case going forward.

Bricks and Building Materials Division
The Bricks and Building Materials Division
has performed strongly, with like-for-like*
revenue up 32% on prior year and up 45% vs
FY20 (pre-pandemic) through the inclusion of
Taylor Maxwell, business unit growth and price
inflation. Revenue of £462.3 million for the year
ended 31 March 2022 was up £318.1 million on
the prior year (2021: £144.2 million). EBITDA at
£33.1 million for the year ended 31 March 2022
was up £21.4 million on the prior year (2021:
£11.7 million).
The Group’s bricks and building materials
businesses performed very strongly over the
period and the division has continued to scale.
The division’s unique offering, sourcing and
supplying to both private and commercial
specifiers, contractors, developers, builders
and the retail sector has resulted in robust sales
throughout the period with demand from these
sectors remaining strong. Furthermore, with
experienced management teams in place the
brick and building materials businesses have
been able to successfully respond and adapt
to market needs. This has been achieved by
offering a large product range, securing large
allocations and by taking advantage of the
businesses’ import capabilities to develop ranges
of products in Europe to meet increased UK

demand, helping to drive margins.
Following the acquisition of Taylor Maxwell in June
2021, the Group has benefited from the significant
increase in scale, range of solutions and expansion
of client base in the specification sector. Whilst
recent geo-political events have and will likely
continue to impact the supply chain, it has been a
record year for Taylor Maxwell. Market demand
has seen order enquiry levels remain high and
robust order books. Taylor Maxwell has benefitted
from cross company synergies notably through
importing capabilities, expansion of the wider team
and working across the Group on the sourcing
of bricks and supply of masonry and cladding.
Cladding in particular has been identified as
a key area of focus, offering opportunities for
organic growth through the development of the
portfolio and working in conjunction with other
Group businesses such as Architectural Facades.
Taylor Maxwell recently announced the opening
of a new showroom in Edinburgh to support
this expansion into the specification market.
During the year, Taylor Maxwell also announced
the closure of its brick yard in Edinburgh and in
March 2022, acquired a new timber treatment
plant in Cumbernauld, forming a collaboration
between the timber and brick divisions. The new
plant has enabled Taylor Maxwell to expand its
national footprint and distribution into Scotland
and Northern England and will not only allow it to
double the volume of timber it can treat per year
but also build stock capacity across the 6-acre site
for both timber and brick.
Brickability, Matching Brick, Brickmongers Wessex
and Brick Services performed particularly well
during the year, due to their ability to service
both locally as well as to national housebuilders,
strong stock levels and extensive brick lines. In
addition to brick sales, sales of other products
including paving, cladding materials and the
extensive range of building supplies offered by
Alfiam Building Supplies, have been strong and
continue to increase. The success of these other
product lines has led to further geographical
expansion and increased capacity through the
addition of stocking facilities, including the new
yard in Glasgow that will stock a mix of products,
better servicing and supplying customers, and
the opening of two new branches in Maidenhead
and Enfield by U Plastics, the Group’s specialist
merchant for facia, soffits and guttering, external
cladding and ancillary products.
McCann Roofing had a good year, despite
the challenging market environment and Crest
Brick, Slate and Tile, despite being impacted by
limitations in supply, still sets itself apart in the
market thanks to its strength in identifying market
requirements and designing exclusive products

Alan Simpson
Chief Executive Officer

* like-for-like revenue is a measure of performance, adjusted for the impact of acquisitions

to suit markets in different regions of the UK. We
believe that both the Schermbecker joint venture
and the post period acquisition of Modular Clay
Products Ltd will provide the division with an
advantage in terms of access to a reliable supply
of tiles and bricks and help to strengthen its
footprint and product range.
As previously mentioned, the specification market
has experienced significant growth and demand
during the period. Bespoke Brick reported its
most successful year to date with demand for
bespoke bricks continuing to grow. Working
with production partners in the Europe, able to
cater for custom requirements, Bespoke Brick
remains well equipped in terms of detailing and
encouraging innovation regarding the use of
bricks, which has resulted in very strong levels of
enquiries from specifiers and architects, as well
as large housing schemes and social housing.
The acquisition of Modular Clay Products Ltd will
add to the Group’s ability to service this growing
sector of the market, bringing new collaborations
with new partners around the world as well as the
import of innovative types of cladding systems
and brick slip systems into the UK.
McCann Logistics has proven to be a timely
acquisition and now gives the Group greater
control over the logistics of its imports. The
establishment of the in-house customs clearance
agency has helped the Group manage costs
and speed up imports across all its businesses.
We are pleased to announce that we have
almost doubled the fleet of trailers to 200 and
intend to increase this by a further 25% to cater
for the requirements of both the Brickability
Group businesses as well as third parties. We see
significant room for expansion within McCann
Logistics with the business now operating services
from the Netherlands, Germany, France, Spain,
Belgium and Portugal. The strategic addition
of McCann Logistics to Brickability’s portfolio of
companies has been key in helping the Group
mitigate recent supply chain issues concerning
transportation shortages and we remain
very positive and expect to see performance
continuing to improve.

Heating, Plumbing and Joinery
Division
Revenue of £36.7 million for the year ended
31 March 2022 was up £12.2 million on the prior
year (2021: £24.5m) . The Heating, Plumbing
and Joinery Division has performed well, with
like-for-like revenue up 31% on prior year and up
20% vs FY20 (pre-pandemic), reflecting growth
across the business units. EBITDA at £7.2 million
for the year ended 31 March 2022 was up £1.4
million on the prior year (2021: £5.8 million).
The heating, plumbing and joinery businesses
have performed well. Towelrads has been able
to further scale thanks to the purchase of a
new warehouse in 2020, enabling it to add
commercial, and designer radiators to its product
range, complementing its towel radiators. Through

existing relationships with national and regional
housebuilders, commercial sales have increased
and we see further scope for growth given the size
of the market. During the period we were pleased
to see strong sales of towel radiators and have
launched our products with a new large retail
distributor, which has given us further exposure to
online retailing. Retail sales have remained strong,
highlighting the strength of the retail market and
importantly, consumer confidence. Radiator Valves
UK, incorporated into Towelrads at acquisition,
has seen good growth since being brought into the
Group and despite some challenges with shipping
from China and the impact of container costs, the
business has not been adversely impacted given
its ability to buy in volume. This in turn has led to
new opportunities, new customers and positive
on-going momentum.
FSN Doors had a positive year driven by its focus
on the mid-range bracket of the market which
has not been a traditional target of the larger
manufacturers. Having ceased business with
its previous supplier, Frazer Simpson has now
identified new factories to work with and is back
on track to deliver thanks to its focus on higher
margin products including timber windows and
composite front doors. The groundwork has now
been laid for Forum Tiles, the startup business set
up in January 2021. We remain pleased with its
performance to date and the range of stock that
it has available on the ground has enabled it to
focus on servicing local and regional developers,
offering guarantees in terms of product numbers,
specification and speed of delivery.
We were excited to announce the acquisition
of HBS NE Limited (trading as UPOWA) in
November 2021. With the introduction of new
renewable energy legislation Part L and Part S,
housebuilders are now having to adhere to new
guidelines for new builds which has dramatically
increased the market opportunity for UPOWA.
Offering a suite of renewable energy product
solutions and installation, UPOWA’s sales into
the new build sector have, for the first time,
outperformed commercial sales. We are very
positive regarding the outlook for UPOWA.
The business remains in discussion with every
leading housebuilder in the UK, is exploring
further opportunities to scale up and import
new products as well as looking to add further
stocking and distribution facilities. Since acquisition
the business has been developing a number of
new strategic products, including a new EV car
charger an airsource heat pump and cylinder to
service and supply to regional developers. The
strategic acquisition of UPOWA, on the back of
the drive towards the use of renewable energy
and technology across the housebuilding sector,
has enabled us to explore and identify multiple
synergies across our businesses where UPOWA
can partner with existing Brickability businesses to
service customers an example being through the
supply and installation of solar PV panels through
our roofing business.

Roofing Services Division
Revenue of £21.2 million for the year ended
31 March 2022 was up £8.8 million on the
prior year (2021: £12.4 million). The Roofing
Services Division has delivered growth, despite
an unprecedented inflationary price and material
supply environment, with like-for-like revenue up
32% on prior year and up 5% vs FY20 (pre-
pandemic). EBITDA at £3.0 million for the year
ended 31 March 2022 was up £0.4 million on the
prior year (2021: £2.6 million).
Our roofing business has remained the most
impacted by the challenging market conditions.
Whilst the order books are healthy, enquiry levels
are strong and order intake is good across all
the roofing businesses, pricing and availability
has impacted the division which operates in a
predominantly fixed price environment.
The division has benefitted from the strategic
acquisitions of Leadcraft and Beacon Roofing
during the year. Leadcraft has enabled the
division to gain greater exposure to smaller
developers and developments where fixed
price contracts are less prevalent whilst Beacon
Roofing has created greater geographical
exposure. The acquisition of UPOWA will also
have a positive impact adding a renewable
energy product supplier to the Group which the
roofing business can take good advantage of.
The roofing services division is currently
experiencing a temporary state of margin
impact, however, we expect that thanks to the
strength of its offering and the recent strategic
acquisitions, margins will come back.

Outlook
The environment in which we are currently
operating has highlighted the strategic
importance of importing capabilities,
relationships, scale and ability to service clients
and source quality products. With a wide range of
businesses with multiple global suppliers we have
been able to continue to successfully meet the
demands and requirements of our customers.
Our priority remains unchanged, we aim to
secure strong order intakes with clear and
sustainable margins. Overall, whilst we remain
vigilant of market pressures, the housebuilding
market remains strong, benefitting from
sustained and increased demand in both
the private and public sectors. The Board
therefore believes our diversified multi business
strategy places us in a strong position to meet
requirements moving forward.
The Group’s trading in the first quarter of the
2023 financial year has been very encouraging
and the Group remains well positioned to meet
current full year market expectations.

Alan Simpson
Chief Executive Officer
22 July 2022

STRATEGIC REPORT“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 55 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
FOR OUR 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 600 employees in the Group. 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

STRATEGIC REPORT1

BALCONIES
Architectural Facades

BRICK SUPPLY
& SERVICES
Apex Brick Cutters
Brickability Ltd
Bricklink
Brick Mongers Wessex
Brick Services
CPG Building Supplies
Crest Brick Slate & Tile
LBT Brick & Facades
Matching Brick
Modular Clay Products
Taylor Maxwell
The Bespoke Brick Co.

CLADDING
Architectural Facades
SBS Cladding
Taylor Maxwell

EXTERNAL DOORS
& WINDOWS
Frazer Simpson

FLOORING SERVICES
DSH Flooring

FLOOR & WALL TILES
Forum Tiles

GRP PRODUCTS
Frazer Simpson

GUTTERING
& DRAINAGE
UP Building Products

INTERNAL DOORS &
WARDROBE SYSTEMS
FSN Doors

The
Complete
Solution

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

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

TRANSPORTATION

McCann Logistics

UNDERFLOOR HEATING

Towelrads

RENEWABLE

TECHNOLOGIES

UPOWA

ROOFING

CONTRACTING

Beacon Roofing

Crest Roofing

Crown Roofing

Excel Roofing

Leadcraft

ROOFING SUPPLIES

Crest Brick Slate & Tile

McCann Roofing Products

Schermbecker

STONE SUPPLY

& SERVICES

Frazer Simpson

Vobster Cast Stone

TIMBER &

LANDSCAPING

Alfiam Building Supplies

Taylor Maxwell Timber

UP Building Products

TOWEL RAILS

& RADIATORS

RadiatorsOnline.com

Radiator Valves UK

Towelrads

The Group has been formed

to pool the combined success

of individual businesses into

one cohesive structure that will

maximise revenue and growth.

Together we are stronger and will take advantage of

our individual specialisms to provide a supply hub of

extraordinary efficiency and service.

BALCONIES

Architectural Facades

BRICK SUPPLY

& SERVICES

Apex Brick Cutters

Brickability Ltd

Bricklink

Brick Mongers Wessex

Brick Services

CPG Building Supplies

Crest Brick Slate & Tile

LBT Brick & Facades

Matching Brick

Modular Clay Products

Taylor Maxwell

The Bespoke Brick Co.

CLADDING

Architectural Facades

SBS Cladding

Taylor Maxwell

EXTERNAL DOORS

& WINDOWS

Frazer Simpson

FLOORING SERVICES

DSH Flooring

FLOOR & WALL TILES

Forum Tiles

GRP PRODUCTS

Frazer Simpson

GUTTERING

& DRAINAGE

UP Building Products

INTERNAL DOORS &

WARDROBE SYSTEMS

FSN Doors

RENEWABLE
TECHNOLOGIES
UPOWA

ROOFING
CONTRACTING
Beacon Roofing
Crest Roofing
Crown Roofing
Excel Roofing
Leadcraft

ROOFING SUPPLIES
Crest Brick Slate & Tile
McCann Roofing Products
Schermbecker

STONE SUPPLY
& SERVICES
Frazer Simpson
Vobster Cast Stone

TIMBER &
LANDSCAPING
Alfiam Building Supplies
Taylor Maxwell Timber
UP Building Products

TOWEL RAILS
& RADIATORS
RadiatorsOnline.com
Radiator Valves UK
Towelrads

TRANSPORTATION
McCann Logistics

UNDERFLOOR HEATING
Towelrads

STRATEGIC REPORT

Group Strategy
and Delivery

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

Achievements

Outlook

KPI’s

Risks

Governance

Organic
Growth

Growth in all
divisions through
the year with
consistent strong
demand.

• Continued
cross selling

• Growth with
additional
customers

• Access to new
customers

• Revenue

• Cost of sales

• Gross profit

• Adjusted
EBITDA

• Economic

environment

• Extreme
weather

• Major event

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

Geographical
Expansion

New locations
have joined
the Group via
acquisitions.

Further
geographic
expansion is
planned with
existing product
range.

• Revenue

• Gross profit

• Adjusted

EBITDA at
new locations

• Economic

environment

• Limited

acquisitions

The Board
reviews
acquisition/
expansion plans.

Acquisitions

4 acquisitions
during the year.

Product
Expansion

Acquisitions
have continued
to expand the
product portfolio
together with
new product
development
across a number
of existing
businesses.

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

• Revenue

• Gross profit

• Adjusted
EBITDA

• Past acquisition

audit

• Failure to
integrate
acquisition

• Retention of

talent

The Board
reviews
acquisition
strategy and
plans.

Further
acquisitions and
start-ups are
planned.

• Revenue

• Loss of a major

supplier

• Loss of key

management

• Gross profit

• Adjusted
EBITDA

• 5 year start-up

plans

The Board
reviews and
approves start-
ups.

Case Study
UPOWA partners with Zestec
and Octopus Renewables to deliver
commercial rooftop solar for major
online retailer.

Key project facts

Annual on-site solar power generation
1.75 GWh

That’s enough electricity to power
463 homes every year*

Annual carbon savings
370.3 tonnes

*(Based on the average UK household consumes 3,760 kWh per year)

The solar PV array will offset the equivalent
annual carbon emissions of
236 family cars
(based on 12,000 miles annually)

The commercial rooftop solar array will generate
17.5% of the building's annual
electricity consumption

S
T
R
A
T
E
G

R
E
P
O
R
T

UPOWA, the Group’s renewable energy experts,
partnered with Zestec Asset Management (Zestec) and
Octopus Renewables to design, develop and deliver a
fully-funded commercial solar rooftop solution for a major
online retail business.

UPOWA’s fully-accredited installation teams managed all
aspects of the project in conjunction with Zestec and client
project teams. This included design, project management
and health and safety to procurement, construction, and
commissioning.

Under a Power Purchase Agreement (PPA) the online
retail giant will purchase the solar electricity generated by
a 2.01 MWp solar PV system installed by UPOWA at their
new distribution site in the North West of England. The
360,000 ft² building features 5,292 solar panels – which
will generate the equivalent amount of electricity required
to power 463 homes for one year and offset annual
carbon emissions by 370 tonnes.

By unlocking unused roof space at this distribution
facility, the commercial solar array delivered by UPOWA
will generate 17.5% of the building’s onsite energy
consumption. Through the PPA arrangement, the client
will buy solar generated electricity at a reduced rate
compared to grid supplied electricity. This will provide
energy security as energy prices continue to surge, whilst
significantly reducing energy costs and carbon emissions.

Zestec tasked the UPOWA team with developing a
bespoke rooftop solar system to meet strict planning
conditions, DNO agreement and the building roof
manufacturers specification.

Due to the structural limitations, UPOWA engineered a
2.01 MWp south-facing, ballasted PV system. This proved
to be the most cost-effective solution to overcome the
project challenges and deliver the most efficient energy
production for the large distribution centre.

This project is the first to be delivered under an innovative
new partnership between UPOWA, Zestec and Octopus
Renewables. Further PPA-funded large-scale commercial
solar projects are currently in development and will be
rolled out across the UK this summer.

Together with the team at Zestec and Octopus
Renewables, UPOWA is proud to play a key role in
supporting the well-known client to increase on-site
renewable generation and help them take a step closer to
powering their infrastructure with 100% renewable energy.

Key Performance
Indicators

REVENUE

£520.2m

Revenue growth is a key driver of profit growth

GROSS PROFIT

£86.8m

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

ADJUSTED EBITDA

£39.5m

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

CASH GENERATED
FROM OPERATIONS

£27.5m
£0.4mThe net cash position after deducting the

NET CASH/(DEBT)

amount of bank debt from cash held.
DIVIDEND

3.00p

Annual dividend per share

21/22

20/21

19/20

21/22

20/21

19/20

21/22

20/21

19/20

21/22

20/21

19/20

21/22

20/21

19/20

21/22

20/21

19/20

£520.2m

£181.1m

£187.1m

£86.8m (16.7%)

£38.0m (21.0%)

£37.7m (20.1%)

£39.5m

£17.5m

£19.5m

£13.1m

£27.5m

£20.9m

Net cash

£0.4m

£7.3m Net debt

Net cash

£2.3m

3.00p

1.95p

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.

STRATEGIC REPORTRisk
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 & Risk
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:
• Consumer recession.
• Adverse inflationary
environment.
• 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.

STRATEGIC REPORT
Principal Risks and
Uncertainties

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

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

Our priority throughout the year has continued
to be the health and wellbeing of all of our
stakeholders, including colleagues, clients, our
contractors and the communities within which
we work, as well as the commercial and financial
health of our businesses and the preservation of
shareholder value.

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

Risk

Key controls

Ongoing action

Economic environment
The Group has experienced a strong trading performance
through the year. Uncertainty around inflationary pressures
pose a future risk.

The legacy of the pandemic’s impact on the national economy
has also put pressure on the Group’s supply chain, resulting in
some challenges from reduced product availability.

We monitor our core markets closely and maintain close relationships with our
principal 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 diversify risk.

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.

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.

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.

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.

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.

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.

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.

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.

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 managers.

Change in employment status of
Group subcontractors
HMRC may reconsider their view on labour only ‘subcontractors’
employment status. This may have a significant adverse impact
on cost of sales, 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 cost of sales.

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

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 market participants.

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.

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.

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.

The Group completes both financial and legal due diligence, prior to
acquisition, to mitigate this risk.

We continue to monitor existing acquisitions and
maintain the due diligence discipline.

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.

Group policies and practices also undergo continuous
review, to work towards a Group wide approach as
quickly as possible.

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.

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.

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.

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 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.

STRATEGIC REPORTChief Financial Officer’s Review

£520.2m £86.8m

£39.5m

Revenue increase of 187.2% to
£520.2 million, with like-for-like*
increase of 31.9%.

Gross Profit increased
by 128.4% to £86.8 million.

Adjusted EBITDA increased
by 125.7% to £39.5 million.

£34.7m

Adjusted Profit Before Tax
increased by 131.3% from
£15.0 million to £34.7 million.

* like-for-like revenue is a measure of performance, adjusted for the impact of acquisitions

The Chairman’s Statement and the Chief
Executive Officer’s Strategic and Operating
Review provide an analysis of the key factors
contributing to our financial results for the year
ended 31 March 2022.

The financial results reflect a combination of
good organic growth alongside acquisitions,
notably the significant acquisition of Taylor
Maxwell in June 2021.

Overall business performance is shown in our key performance
indicators on page 14.

Revenue
Revenue totalled £520.2 million for the year ended 31 March
2022. This represented an increase of 187.2% compared to the
previous year (2021: £181.1 million). Group like-for-like revenue
growth was 31.9% versus 2021 and 40.5% versus 2020.

Division

2022
£m

2021
£m

%
Change

Bricks and Building Materials

462.3

144.2

Roofing Services

Heating, Plumbing and Joinery

21.2

36.7

12.4

24.5

221%

70%

50%

Gross Profit
Gross profit for the year increased to £86.8 million from £38.0
million. Gross margin has decreased by 4.3 basis points to 16.7%
due to the inclusion of lower margin timber within the Group
stemming from the Taylor Maxwell acquisition. (2021: 21.0%)
which is as anticipated.

Adjusted Profit and Adjusted EBITDA
Statutory profit before tax of £18.4 million (2021: £11.2 million)
includes other items of £16.3 million (2021: £3.8 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

Re-financing costs

Earn-out consideration classified as
remuneration under IFRS 3

Share based payment expense

Amortisation of intangible assets

Impairment of goodwill

Unwinding of discount on contingent
consideration

Share of post-tax (profit)/losses of equity
accounted associates

Fair value losses/(gains) on contingent
consideration

Total other items before tax

Adjusted profit before tax

Share of post-tax losses of joint ventures

Finance income

Finance expenses

Adjusted EBITDA

2022
£’000

18,406

1,139

4,333

1,597

6,333

938

(55)

2021
£’000

11,165

105

338

3,619

127

1,916

(360)

16,314

3,835

34,720

15,000

149

3,342

(54)

1,311

1,837

(13)

718

39,468

17,542

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.

Total

520.2

181.1

187%

Depreciation and amortisation

Adjusted EBITDA increased by 125.7% to £39.5 million (2021: £17.5
million) for the year ended 31 March 2022. Detailed segmental
analysis is per note 6 of the financial statements. Growth occurred
in all divisions, notably Bricks and Building Materials following the
transformational acquisition of Taylor Maxwell in June 2021.

Cash Flow and Net Debt
Operating cash flows before movements in working capital
increased to £35.2 million from £17.4 million in 2021. Cash
generated from operations increased to £27.5 million from £13.1
million.

Taxation
The statutory charge for taxation was £6.1 million (2021: £1.5 million),
an effective rate of taxation (Tax expense divided by Profit Before
Tax) of 33.2% (2021: 13.5%). The effective rate for the year is higher
than the statutory rate of corporation tax of 19% mainly due to the
effect of expenses not deductible for tax purposes and impact on
deferred tax with the liability remeasured at 25% having originally
being recognised at 19%. The 2021 effective tax rate was lower than
the main rate of tax following the research and development tax
credits claimed in relation to prior years.

Earnings Per Share
Basic EPS for the year was 4.40p (2021: 4.19p). 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
increased from 5.56p to 10.06p per share.

Dividends
As a result of the Group's trading performance and also in
recognition of the strength of the balance sheet at the year end, the
Board is recommending a final dividend of 2.04 per share, bringing
the full year dividend to 3.00p.

Subject to approval by shareholders, the final dividend will be
paid on 22 September 2022, with a record date of 26 August
2022 and an ex-dividend date of 25 August 2022.

Balance sheet review
Inventories at £28.1 million (2021: £12.1 million) increased primarily
due to the impact of acquisitions, the increase in U Plastics
inventory due to business expansion and the higher value of
inventory following price increases in the trade. Debtors and
creditors working capital flows were in line with expectations
following a normal trading year. Additional working capital
requirements are also included for the new acquisitions, since their
addition to the Group.

At 31 March 2022, net cash (cash less borrowings) was £0.4 million
which compares to net debt (borrowings less cash) of £7.3 million
at the prior year end. This is after additional investment in property,
plant and equipment of £6.3 million (2021: £5.7 million), tax paid
of £7.3 million (2021: £2.4 million), net proceeds from the issue of
new shares £52.7m (2021: £nil), the initial payments for four new
subsidiaries of £50.3 million (2021: £2.5 million) and the payment of
deferred consideration, in relation to prior year acquisitions, of £1.4
million (2021: £7.9 million). Dividends of £6.1 million (2021: £4.5
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
The Group has revolving credit facilities with HSBC and Barclays
of £60 million, which includes an ancillary facility carve out of a
£5 million overdraft. The facilities agreement also provides for
an accordion facility to increase the commitment under revolving
facilities by up to a further £25 million. As at the year end, the
Group had utilised £24.6 million of the facilities.
Subsequent Events
The Group completed the acquisition of Modular Clay Products Limited
in May 2022 for consideration of £6.8 million. Full details of events
occurring since the year end are disclosed in note 40 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 page 22.

Mike Gant
Chief Financial Officer

22 July 2022

STRATEGIC REPORTGoing Concern and Outlook

The period covered by the Going Concern
review is the 18 month period from the year end to
30 September 2023. After reviewing the Group’s forecasts
and risk assessments and making other enquiries, the Board
has come to the conclusion that for the period of review there is a
reasonable expectation that the Group has adequate resources to continue
in operational existence.

The key uncertainly faced by the Group is the demand
for its products and how these are impacted by
economic factors.

Budget scenarios have been prepared comparing a
number of outcomes where there is a significant and
prolonged drop in demand in the industry.

For each scenario, cash flow and covenant compliance
forecasts have been prepared. A drop in revenue of
50% did not lead to any breach of covenants. A drop of
75% revenue would be required with no corresponding
adjustment to the cost base of the business to breach
covenants within the period of review.

The Directors consider this to be a highly unlikely
scenario, and in the event of it occurring would take
steps to reduce the cost base by at least 15% which
would mean covenants would not be breached.

Having taken into account the scenarios modelled,
the Directors are satisfied that the Group has sufficient
resources to continue to operate for a period of not
less than 12 months from the date of this report.
Accordingly, the consolidated financial information has
been prepared on a going concern basis.

Taylor Maxwell have recently opened three new city centre showrooms
in Birmingham, Glasgow and Edinburgh to facilitate digital discussions
or host face to face design team meetings. The showrooms offer the
opportunity to access an unrivalled selection of bricks, cladding and
masonry samples in one convenient place. Large wall installations of
facade systems are also on display, showcasing not just the external
skin, but also the supporting system.
https://www.taylormaxwell.co.uk/locations

STRATEGIC REPORTSection 172(1)
Statement

Section 172 of the Companies Act 2006 (“S172”) requires Brickability’s Directors to
act in good faith and in the way that they consider to be most likely to promote the
success of the Company for the benefit of its members as a whole and, in doing so, to
have regard to the interests of other stakeholders. The Directors should also consider
the desirability of maintaining high standards of business conduct and the likely long-
term consequences of their decisions.

In the table below, we set out our key stakeholder groups and how we engage with each of them. Each type of
engagement is designed to foster effective and mutually beneficial relationships so that we continue to work
effectively with our stakeholders.

Stakeholder Group

How We Engage

Shareholders
The Company is in regular contact with its
shareholders and listens to them when they
express concerns and takes action to rectify
those concerns.

Shareholders
The Company takes into account how
shareholders might be affected when it makes
investment decisions to grow the business via
acquisitions, a key part of the Group strategy.

The Chairman and Executive Directors hold investor roadshows twice a year based around the half
and full-year results. Feedback from investors is received at this time, as well as during the year.
The Board listened to those shareholders who expressed concerns over the Chairman being a
member of the Audit & Risk and Remuneration Committees. A new independent non-executive
director, Susan McErlain, was recruited and has replaced him on those Committees. The
memberships of those Committees are now comprised of independent non-executive directors.
In addition, the Chairman and Executive Directors meet with investors on an adhoc basis including
site visits where investors are able to meet local management.

The Company made four acquisitions during the year, including the transformational acquisition of
Taylor Maxwell. Shareholders have been advised of the rationale for the acquisitions and have been
very supportive of the Company. Integration of these acquisitions into the wider Group is key and
shareholders are regularly kept informed of the progress made in doing so.
How issuing new shares, or increasing debt, might have an effect on the Company’s share price
is taken into consideration when making decisions to fund acquisitions. A fund-raising exercise
took place as part of the process to acquire Taylor Maxwell and, in order to not dilute existing
shareholders too much, senior management, and Directors, who had acquired shares at the IPO
sold shares to help satisfy the demand from new, prospective, shareholders.

Stakeholder Group

How We Engage

Employees
As at 31 March 2022, we employed over 600
people in the Group, across three divisions
based in the UK and the Netherlands
Our employees bring a broad range of
experience, expertise and perspective to
Brickability that contributes to the delivery of
our strategic objectives. The Board recognises
that employees are the cornerstone of the
business.

Suppliers
The Group recognises and actively develops
its relationships with its suppliers and
works closely with them to ensure that the
relationships are productive for all parties.

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.

Customers
The Group will take decisions to meet its
customers’ needs, and to meet its strategic
objective of product expansion, even if it means
venturing into uncharted waters.

Communities

For details on how we engage with our employees, please see page 28 of the Environment,
Social and Governance report.

The Group expects its suppliers to adhere to business principles consistent with the Group’s own.
Suppliers are expected to adopt and implement acceptable healthy 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.
The Group’s policy is to pay suppliers in line with its standard terms except where alternative
arrangements have been agreed in advance with individual suppliers.
The Group does not follow any external procurement or payment code.
During the year, there have been a number of supply chain issues which have led to delays in
deliveries. This has been challenging to the Group and the procurement teams have worked
closely with the Group’s various suppliers to manage those delays and to mitigate them where
possible by utilising existing product stores. Customers were kept fully informed of the delays and
the process was managed throughout to the satisfaction of all parties.

The Group has good relationships with its customers. The supply chain issues encountered by the
businesses have had an effect on the delivery of projects to some of our customers. In those cases,
we work closely with the customers to inform them of the delays and agree revised delivery timelines.
This has resulted in the need, at times, for discussions to be held at senior levels between the Group
and customer to ensure that both parties are aware of the reasons for, and effects of, these delays
and whether any contract penalty clauses are invoked.

At the beginning of April 2022, after the Board had discussed in great depth the benefits and risks
involved in taking such an action, the Group entered into a joint venture (JV), based in Germany,
to produce its own clay tiles. This is the first time the Group has done this and it is anticipated to
consume extra management time while the JV becomes fully operational.
This was a strategic decision taken by the Board to help mitigate the delay to, and to satisfy the
demand from, its customers for clay tiles. In the long-term, by taking production into its own control,
the Group can determine the production time and, using McCann Logistics, can manage the
delivery of clay tiles into the UK and on to its customers, which is beneficial to all parties.
Any clay tiles produced which are not sold to its existing customers in the UK can be sold to
customers in Europe thereby widening the Group’s customer base.
The Board will receive regular updates on the JVs progress.

The Board approved the launch of the Brickability Foundation Trust with its purpose to make a
positive impact on communities. Please see page 29 of the Environment, Social and Governance
report for further information on how we engage with the communities in which we work

STRATEGIC REPORTEnvironmental, Social and
Governance (ESG)

OUR PURPOSE AND MISSION

The Group supplies building materials to contractors, developers,
merchants and builders across the UK. As a major business in
the construction supply chain we have a role to play in tackling
environmental challenges. Our stakeholders – namely our people,
shareholders, customers, suppliers and our local communities rightly
expect us to rise to the challenge of sustainability and act across
all the businesses in the Group. The Board takes this responsibility
seriously and has started to create a sustainable business fit for
the future, developing a clear mission integrated with our ESG
(environmental, social and governance) priorities.

It is our mission to support our customers to design
and build sustainable developments where people
thrive. We will do this by driving positive change in
the construction industry through our approach to
planet, people and partners.

Planet: to be Carbon Net Zero by 2030

People: by empowering people to
be the best that they can be

Partners: to be one of the most trusted
partners for suppliers and customers

Achieving our Mission
John Richards, Chairman, heads up the ESG team and Paul
Hamilton, Chief Operating Officer, oversees the development
of strategy and implementation of the initiatives. The team
appointed a senior sustainability consultant, Georgina McLeod,
Director of EthicallyBe, to work across the Group supporting the
development of our strategy whilst building action plans and
internal expertise to manage ESG moving forward.

The ESG focus has been to measure and understand our impact;
build our knowledge, design and embed processes and engage
with all our businesses.

The Group’s success so far is built on our entrepreneurial spirit
and drive. We know how to make things happen. This drive
is now fully focused on transforming our Group into one with
sustainability at its heart.

Planet (Environmental)
Our Mission is to be Carbon Net Zero by 2030

Our first priority has been to measure and understand our direct impact and emissions, completing
a retrospective count of our Scope 1 and 2 emissions of our sales businesses (excluding McCann
Logistics and our recent joint venture with Schermbecker which we are working on).
To get a realistic picture of our impact we began with a count
of our 2019/20 carbon emissions. The data gave us a view of a
normal year pre-pandemic to build our strategy on and shows
2,717 tonnes of Scope 1 and 2 emissions, with almost half of this
coming from our car fleet.

Carbon Dioxide Equivalent (CO2e) Tonnes

2022*

2021**

Scope 1

Scope 2

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

* Brickability Group PLC data

** Brickability Ltd data

1,762.0

65.9

94.8

22.3

3.52

2.00

For 2021 Brick-ability Ltd the then largest subsidiary reported on the emissions sources
as required under the Companies Act 2006 (Strategic Report and Directors Reports)
Regulation 2013.
In December of 2021, as we began developing our ESG strategy,
we put in place administrative processes to measure carbon
emissions across all businesses in the Brickability Group. This
measurement began on 1 January 2022 and is now collected
quarterly and is now providing detailed and accurate data
to measure our decarbonisation journey. We also carried out
retrospective measurement of the emissions of all businesses in
2019/20 - the last pre-pandemic ‘business as usual’ year in order
to be able to build a carbon reduction strategy based on data
representative of the shape of our future business.
This data has allowed us to move towards a Group wide carbon
data submission for the first time. In 2022 Group wide Scope 1
emissions were lower than business as usual, with many sales
teams being home based and our car fleet less active. We
have conservatively estimated this to be a 25% reduction of
fleet emissions on 2019/20 but including an uplift from new
acquisitions.
The Group’s total energy consumption for the year, in respect of
electricity and natural gas, was 1,417,671 kWh. This is based on
the Greenhouse Gas Emissions Protocol: Corporate Standard
methodology. For Brick-ability Ltd in the prior year, the energy
consumption was 209,283 kWh, using the UK Government
Conversion Factors for Company Reporting 2021 on an
operational control basis.
Scope 3 emissions. .We’ve started to measure some of our
Scope 3 emissions, including water, waste, private car mileage
and some procured freight across our manufacturing businesses.
We are currently building internal understanding and expertise to
support the challenges ahead in measuring Scope 3 emissions.
Decarbonisation (transition planning)
Decarbonisation of the construction supply chain is key to
both mitigation of and adaptation to climate change. We are
developing our strategy with a goal of being carbon net zero in
our sales businesses by 2030 and carbon or climate positive
across our own operations by 2035.

Renewable Energy (procurement and generation).
We are negotiating with our energy suppliers to transition to fully
renewable energy procurement. Using our 2021 acquisition of HBS
New Energies/ UPOWA – a major supplier of solar and EV chargers
– we plan to install electric vehicle charging points at all our offices. We
are also developing plans to fit solar panels across our owned estate.
Car fleet. We have launched a new Group car policy with all new
cars being electric where practical. The fleet will be 100% electric
by 2030 - or other low emission vehicles if the technology develops.
We are also launching a green travel guide for employees.
Net Zero Supply Chain. Working closely with our suppliers to
achieve a net-zero supply chain will be a key part of our strategy. We
are communicating with our customers and suppliers on this and
have started to develop our staff understanding and expertise.
Use and manage resources responsibly
Environmental policies and changes. Using staff feedback we
are launching a series of new environmental policies and action
plans to make changes to the way we operate our premises and
travel to reduce the environmental impact.
Waste. We are measuring our waste and its journey after our disposal.
We are working with our contractors to have full transparency of our
waste disposal to minimise waste to landfill. We have provided new
recycling facilities in all offices, warehouses and factories.
Single use plastic. We’ve removed single use plastic bottles
and take-away coffee cups from our sites, providing staff with
recycled reusable alternatives. We are working to replace plastic
wrappings across all businesses in partnership with suppliers and
customers, with a focus on bricks and timber in the first instance.
Behaviour change
We held a series of face-to face sustainability workshops across
all our sites in the UK with over 600 employees to share our new
business mission and to educate, inspire and generate ideas and
action for our ESG programme. From this we have appointed a
team of employee sustainability champions, representing each
business, who will be taking a lead on environmental and ‘giving
back’ ideas for each Group business.

Case Study

REMOVING
SINGLE USE
PLASTIC
Inspired by the Group’s new approach to sustainability, James
Gordon, Bespoke Brick Depot Manager took the initiative to
make change happen. The company used bubble wrap to
send brick samples to customers. James significantly reduced
this single use plastic literally overnight by purchasing
a cardboard shredder. Now the waste cardboard, from
the business and employees homes, has a second life as
wrapping before going for recycling itself.

STRATEGIC REPORTPeople (Social)
Our mission is to empower people to be the best that they can be or help
people realise their potential through empowerment and opportunity

Growing our business generates opportunities for our employees
and creates value for our shareholders and stakeholders.
Our focus is to create a diverse and inclusive, high-performance
entrepreneurial culture by having a highly engaged team and
supporting them to reach their full potential through learning
and development and creating opportunity.

People are our key asset. The Group aims
to attract, retain and motivate the highest
calibre of employees. Our performance
and success within our marketplace are
directly related to the effectiveness of our
people, who deliver high-quality products
and provide exceptional services. We
know that highly competent and engaged
staff who make great partners is key
for customers, with several of these
relationships built over many years.

Following the acquisition of Taylor
Maxwell, we have accelerated the roll
out of systems and processes to support
our people and improve opportunities
throughout the Group.

Diversity and inclusion
Building a diverse workforce and
maintaining an inclusive workplace is
vitally important to the Group. This
ensures everyone feels welcome, is able to
contribute and that their unique skills are
valued.

The Group is committed to encouraging
diversity and ensuring discrimination does
not occur. We are working to eliminate
any bias in our pay and employment
policies and practices. We have a robust
recruitment policy where the Group
will recruit, train and reward based on
merit and provide opportunities for
our employees to fulfil their ambitions
regardless of gender, ethnic origin,
sexual orientation, marital status, religion
or beliefs, age or disability. We have
completed our DEI (diversity, equity,
inclusion) data collection and are now
using the data to inform our DEI and
broader people strategy.

Health and Safety
The safety and well-being of colleagues
is the Group’s first priority. The Group
promotes a positive health and safety
culture throughout the business to ensure
that all our people consider health, safety
and welfare issues. Employees receive
in-house health and safety training
with further training undertaken as the
employee need requires. All our processes
and procedures are reviewed regularly by
an external agency.

Engagement
We believe our people perform better if
engaged and feel fairly rewarded. We
engage with our employees in a number of
ways including office and team meetings.
Improvements in internal communication
are part of our developing ESG strategy.

Reward and Recognition
Key to employee retention is recognising
and rewarding their hard work. As a sales
organisation, the rewards are mostly based
on sales performance against targets,
aligning the interest of both the employee
and the Group. A review of all the reward
and recognition policies has started with
the aim to use the best policies and roll
them out Group wide.

Communities
We are now aiming to build a strategy of
community engagement delivering social
impact. Our new Foundation will support
this and through our ESG staff workshops
we have begun to explore volunteering,
donation of goods and potentially business
support around our own areas of expertise.
Some businesses have already launched
a monthly food bank collection. We sent
Christmas hampers to Single Parents
Support and Advice Services.

Partners
Our mission is to be one of the most trusted partners
for suppliers and customers

The Brickability
Group Foundation
Giving back to planet and people

The Brickability Group has actively supported many charities
over the years through sponsorship and donations and so
it was with great pleasure that we launched the Brickability
Group Foundation during the year. The Foundation is a UK
Registered Charity (number 1197182) dedicated to ‘building the
future, supporting communities, initiatives and individuals in
the UK and abroad’. This offers us a great opportunity to drive
forward our ESG priorities through giving back.

The Group established the Foundation with initial funding of
£200,000 during the 2021/22 financial year and under the
Foundation’s charter going forward the Group will donate 0.5% of
Adjusted EBITDA to the Foundation.

The Foundation aims to enable employees to make a difference
personally. Of this initial funding £55,000 has been donated from the
Foundation. Employees will receive match funding for any fundraising
efforts. Donations so far include £25,903 to Hope for Children and
£25,000 to the Disasters Emergency Committee to support Ukrainian
refugee. The Group does not make any political donations. The major
charity chosen for 2022 is Maggie’s cancer charity.

HOPE FOR CHILDREN
Paul Hamilton, the Brickability COO, ran the 2021 London Marathon
raising £25,903. This was matched by the Foundation resulting
in a fantastic donation of £51,806 to Hope for Children, a global
charity which supports brighter futures for children in poverty through
education, community strengthening and healthcare. Paul was
awarded the Team Hope Award by the charity in honour of his efforts.

STRATEGIC REPORTGovernance

We recognise that good governance is not only
crucial for our performance and relationship
with shareholders but is also important for
society and the environment.

Our mission will only be delivered through a culture of openness,
honesty, integrity and by creating a fair, diverse and inclusive
business, which respects the rights and interests of our employees,
customers and all of our partners.

The Group has policies for dealing with gifts, hospitality, bribery,
corruption, whistleblowing and inside information. Our modern
slavery policy is available on our website www.brickabilitygroupplc.com.

Board and leadership gender diversity has improved with the
appointment of one female independent non-executive Board
Director.

Preparation for TCFD reporting
(for the financial period beginning April 2022)
The ESG team have begun to embed the ESG Governance
framework through all of our financial, management and
operational processes. We will complete this over the coming
year. Work has started on developing a strategic approach to
the recommended disclosures in the TCFD (Taskforce on Climate
Related Financial Disclosures) framework and addressing our
gaps. Including:

•

Governance: governance around climate related risks and
opportunities.

Strategy and scenario analysis: to look at actual and
potential impacts of climate related risks and opportunities on our
businesses, strategy, and financial planning.

Risk management: identifying, assessing and managing
climate related risks.

•

Metrics and targets: what KPIs do we use to assess and
manage relevant climate related risk and opportunities.
The Strategic Report on pages 2 to 30 was reviewed and
approved by the Board on 22 July 2022.

Alan Simpson
Chief Executive Officer

Case Study

STRATEGIC ACQUISITION

In November 2021 the Group acquired renewable energy
specialist HBS New Energies/UPOWA, experts in solar
PV, battery storage and EV charging. This positions the
Group in an area of significant business growth, which
will also help us and our partners to meet our carbon
reduction target.

ESG IN NUMBERS FOR 2021
652t

1.57MWp
SOLAR INSTALLED
FOR COMMERCIAL
BUSINESSES

CO2 OFFSET IN
FIRST YEAR

119

NEW HOMES
EV CHARGERS
INSTALLED

SEALS OF EXCELLENCE

1,410

NEW HOMES
SOLAR PV SYSTEMS
COMMISSIONED

PRIDE IN

THE JOB

AWARDS

NHBC PRIDE IN JOB
AWARDS

100

BUSINESS HELPED TO
MEET SUSTAINABILITY
TARGETS

Corporate Governance

C
O
R
P
O
R
A
T
E

G
O
V
E
R
N
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C
E

CORPORATE GOVERNANCE
Board of Directors

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 Facilities by ADF plc, 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 who
joined the Board in 2021. 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.

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

CLIVE NORMAN
Non-Executive Director

DAVID SIMPSON
Independent Non-Executive
Director

GILES BEALE
Independent Non-Executive
Director

SUSAN MCERLAIN
Independent Non-Executive
Director

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
Freeman of the City of London.
Giles joined the Board in
August 2019.

Susan McErlain's executive
career spans 30 years as a
communications and strategic
adviser, notably for listed
industrial companies. She
founded, grew and sold Square
Mile Communications Limited, a
successful communications and
investor relations business.
Susan acted as a Corporate
Affairs Director for Ultra
Electronics plc until 2019. She
holds two further non-executive
director roles with AIM listed
companies: Trackwise Designs plc
and Dewhurst Group plc.
Susan joined the Board in
May 2022.

CORPORATE GOVERNANCEGroup Management Board

JOHN RICHARDS
Non-Executive Chairman

ALAN SIMPSON
Chief Executive Officer

MIKE GANT
Chief Financial Officer

See bio in previous section.

SIMON MELLOR
Managing Director within the
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, overseeing a number
of acquisitions and developing
relationships with European
suppliers.

KENNY HIRST-SEWELL
Managing Director of
Taylor Maxwell

ALEX MOFFAT
Managing Director of
Taylor Maxwell Timber

Beginning his career in the
construction industry in 2011,
Kenny has a wealth of experience
in the sourcing, specification
and supply of brick and masonry
materials.
Joining Taylor Maxwell as a
Senior Sales Executive in 2016,
Kenny has quickly progressed
through to Regional Business
Manager, Sales Director and
more recently, Managing Director
of Taylor, Maxwell & Co Limited
in April of 2022.

Starting as a Sales Trainee for the
Taylor Maxwell Timber Division
in 2003, Alex has been with the
business for almost 20 years.
Quickly working his way up to
Sales Executive and Regional
Director, Alex joined the Board of
Directors in 2017.
Based in Taylor Maxwell’s Stirling
office, Alex is now Managing
Director for Taylor Maxwell
Timber, bringing with him many
years of experience in the timber
industry and an unrivalled
knowledge of timber products.

PAUL HAMILTON
Group Chief Operating
Officer & Managing Director
of Heating, Plumbing and
Joinery Division

Paul Hamilton has over 18 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 £23 million a year. He led
a management buyout of the
Towelrads business in 2016 and
was a founder of DSH Flooring.
Paul was appointed Chief
Operating Officer of Brickability
Group in November 2021 whilst
remaining Managing Director
for the Heating, Plumbing and
Joinery Division.

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.

SIMON PEARSON
Managing Director of
Roofing Services Division

ARNOLD VAN HUET
Managing Director of Crest
Group

ANDY WILSON
Managing Director of
The Bespoke Brick Co.

Simon Pearson has over 35
years of construction and roofing
sector experience, 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 Services Division
since.

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 is
Managing Director of the Crest
Group of companies within the
Group. 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 and is
currently Managing Director of the
Bespoke Brick Co. Limited.

CORPORATE GOVERNANCECorporate Governance Statement

As Chairman of the Company, I have pleasure in presenting the corporate governance
statement for 2022.

The QCA Corporate Governance Code 2018 (“QCA Code”)

The Board is collectively responsible to shareholders of the Company
for the effective oversight and long-term success of the Company.
The Board believes that sound governance is fundamental to this and
has chosen to follow the QCA Corporate Governance Code since
2019. However, the Board recognises that corporate governance is
not a static process and that there is a need to ensure that policies
and practices are kept under review to ensure that we do meet the
required standards and that this area develops in line with the growth

and overall strategic plans for the Group. The Board considers
that the policies, procedures and relevant systems which have
been implemented to date have given us a firm foundation for our
governance structure.

During the financial year ended 31 March 2022, the Company believes that it has complied with 9 of the 10 principles
set out within the QCA Code as follows:

Principles of the QCA Code

How the Company has complied

Establish a strategy and business model which promote long-
term value for shareholders.
Seek to understand and meet shareholder needs and
expectations.

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 the Board as a well-functioning, balanced team led
by the Chairman.

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

Evaluate Board performance based on clear and relevant
objectives, seeking continuous improvement.

Promote a corporate culture that is based on ethical values
and behaviours.

Maintain governance structures and processes that are fit for
purpose and support good decision-making by the Board.

10. Communicate how the Company is governed and is

performing by maintaining a dialogue with shareholders and
other relevant stakeholders.

The Board has collective responsibility for setting the strategic aims and objectives of the
Group. Our strategy is articulated on page 12 and on our website.
In the course of implementing our strategic aims, the Board takes into account
expectations of the Company’s shareholders and also its wider stakeholders and social
responsibilities.
The Board also has responsibility for the Group’s internal control and risk management
systems. The Board reviews the risks faced and ensures the mitigation strategies in place
are the most effective and appropriate to the Group’s operations.

As Chairman, I regularly consider the operation of the Board as a whole and the
performance of the Directors individually.
The Directors have the necessary up-to-date experience, skills and capabilities required for
the Board and to oversee the management of the Company.
The Board has taken time to bed in as the Board was formed in August 2019 and then
the pandemic occurred and the CFO suddenly passed away. As such it has not felt
appropriate to undertake a formal evaluation of the Board during that period. However, a
formal evaluation will take place during the 2023 financial year.
All appointments to the Board will be on merit, but with due consideration to the need
for diversity on the Board. Such appointments will be made to complement the existing
balance of skills and experience on the Board, as illustrated with the appointment of Susan
McErlain.
The Company operates an open and inclusive culture and this is reflected in the way that
the Board conducts itself.

The Board will continue to monitor its application of the QCA Code and revise its
governance framework as appropriate as the Group evolves.
The Board recognises the importance of maintaining regular dialogue with institutional
(both existing and potential) and retail shareholders to ensure that the Group’s strategy is
communicated and to understand the expectations of our shareholders.

Composition and independence of the Board
During the year, the Board consisted of six Directors: The Non-Executive
Chairman, two Executive Directors, one Non-Executive Director and two
independent Non-Executive Directors.
Details of each Director’s experience and background are given in their
biographies on pages 32 and 33. Their skills and experience are relevant
and cover areas including building materials, financial management and
control, corporate governance, legal and mergers and acquisitions.

Appointments to the Board and re-election
The Board has delegated the tasks of reviewing Board composition,
searching for appropriate candidates and making recommendations to
the Board on candidates to be appointed as Directors to the Nomination
Committee. Further details on the role of the Nomination Committee,
together with details of the recruitment process for Susan McErlain, may
be found on page 39.
All Directors will offer themselves for annual re-election, in accordance
with best practice in corporate governance.
The Board considers all Directors to be effective and committed to
their roles.

How the Board works
The Board has overall responsibility for the Company’s purpose, strategy,
business model, performance, capital structure, approval of key contracts
and major capital investment plans, the framework for risk management
and internal controls, governance matters and engagement with
shareholders and other key stakeholders.
The Board remains committed to understanding the needs of our
shareholders and the wider stakeholders and it always considers how the
Board’s decisions impact them in the longer term. In the Section 172(1)
Statement on pages 24 and 25 we explain who the key stakeholders are
and how the Directors engage with them. The Board’s full responsibilities
are set out in a formal schedule of matters reserved for its decision.

Board meetings
The Board has an established schedule of meetings throughout the year,
with additional meetings convened when required. The Board addresses
several recurring items at each Board meeting, including operational and
financial performance updates and acquisitions. The Directors maintain a
dialogue between Board meetings on a variety of matters.
The table below sets out the attendance record of individual Directors at
the Board meetings held during the financial year:

Director
John Richards
Alan Simpson
Mike Gant
Giles Beale
Clive Norman
David Simpson*

Board Meetings
10/10
10/10
9/9
10/10
10/10
9/10

Mike Gant joined the Board in April 2021.

*David Simpson was unable to attend one meeting due to it being convened at very short notice and
a resultant clash in diaries.

Division of responsibilities
The Chairman and Chief Executive have separate, clearly defined
roles. The Chairman leads the Board and is responsible for its overall
effectiveness in directing the Company, and the Chief Executive is
responsible for implementing the Group’s strategy and for its operational
performance. The Executive Directors are full-time employees of the
Company and have entered into service agreements with the Company.

Non-Executive Directors
Each of the Non-Executive Directors has entered into a letter of
appointment with the Company which set out the duties of the Director
and commitment expected. They are expected to commit at least 20 days
per annum to their role and are specifically tasked with:
•
•

bringing independent judgement to bear on issues put to the Board;
applying their knowledge and experience in considering matters such
as strategy, company performance, use of resources and standards of
conduct; and
ensuring high standards of financial probity and corporate
governance.

•

How the Board operates
The Board is responsible for:
•

•
•

•

developing Group strategy, business planning, budgeting and risk
management;
monitoring performance against budget and other agreed objectives;
setting the Group’s values and standards, including policies on
employment, health and safety, environment and ethics;
relationships with shareholders and other major stakeholders;
determining the financial and corporate structure of the Group
(including financing and dividend policy);
major investment and divestment decisions, including acquisitions, and
approving material contracts; and
Group compliance with relevant laws and regulations.

•
The Board retains control of certain key decisions through the schedule
of matters reserved for the Board. It has delegated other matters,
responsibilities and authorities to its Board Committees, details of which
are stated later in this report. Anything falling outside of the schedule of
matters reserved or the Committees Terms of Reference falls within the
responsibility and authority of the Chief Executive, including all executive
management matters.
The Board meets at regular intervals and met ten times during the
year. Directors also have contact on a variety of issues between formal
meetings. An agenda and accompanying detailed papers, covering key
business and governance issues are circulated to the Board in advance of
each Board meeting.
At each meeting, the Board reviews comprehensive financial and trading
information produced by the management team and considers the
trends in the Company’s business and its performance against strategic
objectives and plans. It also regularly reviews the work of its formally
constituted standing Committees as described below and compliance
with the Group’s policies and obligations.

CORPORATE GOVERNANCECORPORATE GOVERNANCE STATEMENT (CONTINUED)

All Directors are expected to attend all meetings of the Board and any
Committees of which they are members, and to devote sufficient time to
the Company’s affairs to fulfil their duties as Directors. Where Directors
are unable to attend a meeting, they are encouraged to submit any
comments to be considered at the meeting to the Chairman in advance
to ensure that their views are recorded and taken into account during
the meeting.
Directors are encouraged to question and voice any concerns they may
have on any topic put to the Board for debate. The Board is supported in
its work by Board Committees, which are responsible for a variety of tasks
delegated by the Board. There is also a Management Board composed
of the Chairman, Chief Executive Officer, Chief Financial Officer, Chief
Operating Officer and representatives from senior management whose
responsibilities are to implement the decisions of the Board and review the
key business objectives and status of projects.

approval of annual and half-year report and financial statements;

review and approval of budget;
review against strategy;
implementation of strategy;

The main activities of the Board during the year
There are a number of standing and routine items included for review on
each Board agenda. These include operational reports, financial reports,
governance and investor relations updates. In addition, key areas put to
the Board for consideration and review included:
•
• dividends;
•
•
•
• consideration of banking arrangements;
•
• acquisitions and integration;
review of AGM business;
•
• briefings and review of conflicts of interest; and
• COVID-19 updates.
During the year, the majority of the meetings were hybrid meetings
due to the COVID-19 pandemic. This did not impact the Directors
from undertaking their duties and all Directors participated fully in the
meetings.

investor relations;

Board Committees
The Board delegates certain responsibilities to its Committees, so that
it can operate efficiently and give an appropriate level of attention and
consideration to relevant matters. The Company has an Audit & Risk
Committee, a Remuneration Committee, and a Nomination Committee,
all of which operate within a scope and remit defined by specific terms
of reference determined by the Board. Details of the operation of the
Board Committees are set out in their respective reports. All of the
Board Committees are authorised to obtain, at the Company’s expense,
professional advice on any matter within their Terms of Reference and to
have access to sufficient resources in order to carry out their duties.

External advisers
The Board seeks advice on various matters from its nominated adviser
Cenkos Securities plc and other advisers as appropriate. The Board also
sought remuneration advice from h2glenfern during the year.

3838

Development, information and support
Directors keep their skillset up to date with a combination of attendance
at industry events, individual reading and study, and experience gained
from other Board roles. The Company Secretary ensures the Board
is aware of any applicable regulatory and governance changes and
developments and updates the Board as and when relevant. Directors
are able to take independent professional advice in the furtherance of
their duties, if necessary, at the Company’s expense. Directors also have
direct access to the advice and services of the Company Secretary. The
Company Secretary supports the Chairman in ensuring that the Board
receives the information and support it needs to carry out its roles.

Conflicts of interest
Under the Company’s Articles, the Directors may authorise any actual
or potential conflict of interest a Director may have and may impose any
conditions on the Director that are felt to be appropriate. Directors are
not able to vote in respect of any contract, arrangement or transaction
in which they have a material interest and they are not counted in the
quorum. A process is in place to identify any of the Directors’ potential or
actual conflicts of interest.

Accountability
The Company has in place a system of internal financial controls
commensurate with its current size and activities, which is designed to
ensure that the possibility of misstatement or loss is kept to a minimum.
These procedures include the preparation of management accounts,
forecast variance analysis and other ad-hoc reports. There are clearly
defined authority limits throughout the Group, including matters reserved
specifically for the Board.

Risk management and internal control
Risks throughout the Group are considered and reviewed on a regular
basis. Risks are identified and mitigating actions put into place as
appropriate. Principal risks identified are set out in the Strategic report
on page 19. Internal control and risk management procedures can
only provide reasonable and not absolute assurance against material
misstatement. The internal control procedures were in place throughout
the financial year and up to the date of approval of this report.

Financial and business reporting
The Board seeks to present a fair, balanced and understandable
assessment of the Group’s position and prospects in all half-year, final and
any other ad-hoc reports, and other information as may be required from
time to time. The Board receives a number of reports, including those
from the Audit and Risk Committee, to enable it to monitor and clearly
understand the Group’s financial position.

Annual General Meeting (AGM)
This year’s AGM will be held on Tuesday 6 September 2022. The Notice
of Annual General Meeting is available on the Company’s website at
www.brickabilitygroupplc.com. Separate resolutions are provided on each
issue so that they can be given proper consideration and all shareholders
are encouraged to submit their votes.

John Richards
Chairman
22 July 2022

Report of the
Nomination Committee

Committee Chairman
John Richards

As Chairman of the Nomination Committee (“the Committee”) I am pleased
to present the report of the Committee for the year ended 31 March 2022.

Other Members
Giles Beale
Clive Norman
David Simpson

Meetings and Attendance
The Committee meets as and when
required with the Chief Executive
invited to attend meetings as and
when appropriate. The members of
the Committee along with details
of the number of meetings held and
attendance at these meetings is
detailed in the table below:

Member

John Richards, Chairman

Giles Beale

Clive Norman

David Simpson

Meetings
Attended

4/4

All members of the Committee
are non-executive directors of the
Company whose biographies are
contained pages 32 and 33.

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 are 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.

Search for a new Non-Executive
Director
At the Company’s 2021 Annual General Meeting
(AGM), it was noted that some shareholders had
questioned the composition of the Audit & Risk
Committee and the Remuneration Committee
which both had me as a member of the Committees.
The shareholders concerned did not think I was
independent enough as I am also Chairman of the
Company. The other members of those Committees
are David Simpson and Giles Beale, both of whom
are deemed to be independent.
As an AIM listed company, we do comply
with the required independence tests for those
Committees, and I can assure shareholders that I
do act independently and challenge the executive
Directors, and the other non-executive directors,
when necessary. However, I and the Committee
as whole understand, and acknowledge, the
independence concerns raised. Accordingly a
search for a new independent non-executive
director was commenced after the AGM was
held. We did not use an external recruitment
agent to assist in the process. Instead we used the
existing network of our advisers and Directors. I,
together with other Directors, met with a number
of potential candidates who would add expertise
and experience to the Board and its Committees.
I am pleased to announce that Susan McErlain
was appointed as a non-executive director
and as a member of both the Audit & Risk and

Remuneration Committees on 9 May 2022.
Susan brings significant experience of investor and
City financial relations, having been the founder
of City PR firm Square Mile Communications, as
well as extensive listed company experience as a
non-executive director. Susan’s biography can be
found on page 33 and I have welcomed Susan to
the Board in my Chairman’s statement on page 5.
As a result of Susan’s appointment, I have now
stood down as a member of both the Audit &
Risk and Remuneration Committees which means
that each of these Committees have independent
directors as their members. As Chairman of the
Company, it is best practice that I also chair the
Nomination Committee so I will not be standing
down as a member of this Committee.

Committee activity during the year
During the year, the Committee also undertook
the following activities:
•

recommended the appointment of Mike Gant
as the new Chief Financial Officer;
considered and approved the Nomination
Committee Report for inclusion in the Annual
Report and Accounts for the year ended
31 March 2022;
reviewed the terms of reference for the Committee;
conducted a review of Board composition and
diversity and considered matters relating to
succession planning;
recommended that Paul Hamilton be
appointed as Chief Operating Officer with
the appointment being effective as from 1
December 2021; and
recommended the appointment of Susan
McErlain as a new non-executive director.

•

•
•

•

By order of the Board

John Richards
Chairman of the Nomination Committee
22 July 2022

CORPORATE GOVERNANCEReport of the Audit & Risk Committee

As Chairman of the Audit & Risk Committee (“the Committee”)
I am pleased to present the report of the Committee for the year
ended 31 March 2022.

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

Committee Members, Attendance, and Independence
David Simpson and Giles Beale are both 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 assisted
the Committee during the year and his membership was considered both appropriate
and beneficial. However, following the appointment of Susan McErlain as an additional
independent non-executive director in May 2022, she was appointed as a member of the
Committee and Mr Richards stood down as a member. The Committee is composed of
independent non-executive directors.

Duties

Financial Reporting

The Committee must monitor the integrity of the
financial statements of the Group.

The Committee shall review all significant financial
reporting issues and all judgements which they contain.

Risk Management and Internal Controls

The Committee determines and reviews the Group’s
risk profile, including the nature and extent of significant
risks that the Group is willing to take in achieving its
strategic objectives.

The Committee shall keep under review the scope,
adequacy and effectiveness of the Group’s internal
financial controls, internal control and risk management
systems.

Whistleblowing & Anti-Bribery

The Committee shall review the scope, adequacy
and effectiveness of the Group’s arrangements for its
employees and, if appropriate, contractors to raise
concerns about possible wrongdoing in financial
reporting or other matters.

The Committee shall review the Group’s systems and
controls for the prevention of bribery and corruption and
receive reports of non-compliance

How performed during the year

The Committee reviewed the interim and full-year financial statements, together with
the full year Annual Report, recommending their approval to the Board. The Committee
reviewed and approved the Going Concern statement.

The Committee reviewed the key audit matters raised by the external auditor, together
with the significant judgements raised by the management team. These were discussed in
depth by the Committee, together with management and BDO. The Committee agreed
that the audit matters and significant adjustments were appropriate. The agreed key
audit matters are included within the independent auditor’s report on pages 52 to 57.

The risk management report, together with the principal risks and uncertainties can be
found on pages 18 to 19.
The Committee reviewed these on behalf of the Board at the interim and full-year stages
to ensure that they were still appropriate and that the risk profile was still right for the
growing business.

The Group does not have an internal audit department. The Committee keeps this under
review but at present believes that the need for such a department is not yet warranted.
The Committee reviewed the findings of the Audit Completion Report and discussed the
internal controls with the financial management team. The Committee is satisfied that the
procedures and controls are adequate and effective for a Group of Brickability’s size and
complexity.

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
year.

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 mattes.
The Group also maintains a gifts and hospitality register whereby employees must register
any gifts or any hospitality events that they have attended, which have been given by
suppliers or customers.
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 year.

Other matters reviewed during the year
• Renewal of banking facilities.
• Review of the accounting integration and implementation of key accounting policies resulting from the Taylor Maxwell acquisition.
• Update on ESG matters.

CORPORATE GOVERNANCEREPORT OF THE AUDIT & RISK COMMITTEE (CONTINUED)

Significant Issues Considered by the Committee
The Committee reviews accounting papers prepared by management that provide details of significant financial reporting issues, together with
reports from the external Auditor prepared in conjunction with the half and full-year results.
The significant issues considered by the Audit and Risk Committee in respect of the financial year ended 31 March 2022 are set out in the
following table:

Significant issue/accounting judgement identified

How it was dealt with

Intangible Assets
Identifiable intangible assets (such as brands and
customer and supplier relationships) are recognised
at fair value on acquisition. Any excess paid over the
value of net assets acquired is included as goodwill.

Impairment
Goodwill is not amortised but instead reviewed for
impairment annually.

Contingent Consideration
Contingent consideration is recognised for those
acquisitions where future consideration may be
payable depending on certain results being met, such
as meeting an EBITDA target.

Leases
Under IFRS, a lease liability and right of use asset is
recognised, over the term of the lease, for all lease
agreements (except for those deemed as short-term of
low value).

Provisions
Provisions are included in the accounts in respect of
the following: expected credit losses; inventory; defects
and warranties.

Defined Benefit Pension Contributions
When Taylor Maxwell was acquired, it operated a
defined benefit pension scheme.

Joint Arrangements
During the financial year, the Group invested in, and
now holds, a 50% share in Schermbecker Building
Products GmbH.

External advisors are engaged to assist with determining this fair value and the Purchase
Price Allocation (PPA) between intangibles and goodwill. PPA Valuations have been
carried out for the acquisitions of Taylor Maxwell, Leadcraft and HBS NE that took place
during the financial year. Due to the timing of the acquisition, the PPA Valuation for
Beacon Roofing will be completed within the measurement period following acquisition.

Where indicators of impairment exist, such as an economic downturn, the potential
impairment of other non-financial assets, such as intangibles and investments, is also
considered. Key assumptions included within the impairment reviews are around cash
flows and discount rates.

The amount payable is calculated based on the terms of the contract and future
forecast results. Judgement is therefore required in order to prepare appropriate
forecasts, based on management’s knowledge of the market and industry, for the
assessment of how much consideration may be payable.

The lease term includes periods covered by options to extend or terminate the lease,
depending on whether it is reasonably certain that those options will be exercised or not.
Judgement is required in evaluating whether it is reasonably certain or not that an
option will be exercised, in order to determine the lease term. The Group’s incremental
borrowing rate is used in determining the lease liability, where an interest rate in the lease
cannot be readily determined.

Provisions by nature are estimates and, whilst historical data and trends can be used to
quantify the values to be provided, management judgement will also be exercised.

A buy-out process commenced in July 2021 to transfer the risk and liability to an insurer.
However, as this process was not completed before the end of the financial year, an
external pension consultant has been engaged to prepare the valuation report and
guidance for disclosure in the financial statements for the year ended 31 March 2022.

The accounting of a joint arrangement depends on the substance of the agreement and
whether the Group is considered to have control. Where it is considered to be a joint
venture (JV), the Group will account for the investment using the equity method, with a
share of the JV’s profit or loss recognised in the Group’s accounts.
The Committee agreed with management’s view that the agreement should be
considered a JV based on the existence of joint control and the requirement of
unanimous consent as defined by IFRS 11.

External Auditor
The Audit and Risk 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 78 in note 9 to the financial statements. The non-audit fees for
the year were £8,000 (2021: £6,500) which was in relation to a review
of the Group’s half-year results.
Both management and the Committee Chair 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 and Risk Committee for discussion. No major areas of concern
were highlighted by the Auditor during the year.
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.

By order of the Board
David Simpson
Chairman of the Audit and Risk Committee

22 July 2022

CORPORATE GOVERNANCEReport of the Remuneration
Committee

Committee Chairman
Giles Beale

Other Members
John Richards
David Simpson
Meetings and Attendance

Member

Giles Beale, Chairman

John Richards

David Simpson

Meetings
Attended

6/6

As Chairman of the Remuneration Committee (“the Committee”) I am pleased
to present the report of the Committee for the year ended 31 March 2022.
Committee Members, Attendance, and Independence
David Simpson and Giles Beale are both 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 assisted the Committee during the year and his
membership was considered both appropriate and beneficial. However, following her appointment as
an additional independent non-executive director in May 2022, Susan McErlain was appointed as a
member of the Committee and Mr Richards stood down as a member. The Committee is composed
of independent non-executive directors. On behalf of the current members, I would like to thank Mr
Richards for his contribution to the Committee and its business.

Duties

Remuneration

The Committee shall be responsible for
setting the remuneration policy of the
Company and reviewing the ongoing
appropriateness and relevance of the policy.

The Group operates two share incentive
plans, a company share option plan and a
long-term incentive plan. The Committee is
responsible for the administration of these
plans including whether awards will be
made under the share incentive plans and, if
so, the overall amount of such awards and,
where appropriate, the performance targets
to be used.

The Committee shall determine the total
individual remuneration package for each
executive Director.

How performed during the year

The remuneration policy has been in place since the
Company listed back in 2019. The Committee started to
review it during the year and has now engaged an external
consultant to assist in updating the policy to ensure that it is
relevant, appropriate and meets best practice.

Details of awards made under the Long-Term Incentive Plan
are shown on page 46. The Committee has kept the plan
and its use, including the terms and conditions attaching to
any grants, under review. Awards may be made under the
plan on an annual basis.

The first awards were made under the Company Share
Option Plan in 2019 when the Company listed. These awards
will vest in August 2022. Additional awards were made
during the year following the Company’s acquisition of Taylor
Maxwell. Details of those awards are shown on page 47.

The Committee reviewed and approved the bonus payments
for each executive Director and reviewed and approved their
salary increases for 2022. When considering the payments
and increases, the Committee considered the performance of
the Group during the year; whether the payment would be in
the best interest of all stakeholders within the Group; and the
Group wide remuneration of all employees.

Details of the remuneration for the executive Directors can be
found on page 45.

Other matters reviewed during the year:
• Review of the Taylor Maxwell bonus scheme.
• Appointment of external remuneration consultant.

ANNUAL REMUNERATION REPORTThe information on pages 45 to 47 has been audited.Executive Directors’ RemunerationEach individual executive Director’s total remuneration paid over the year is summarised below.Executive DirectorBase Salary£’000Taxable benefits1£’000Bonus2£’000Pension contributions3£’000Total Remuneration 2022£’000Total Remuneration 2021£’000Alan Simpson4004500-904636Mike Gant*2751237521683-* Figures for Mike Gant represent the period from when he was appointed as a Director on 30 April 2022.1 Taxable benefits comprise of private medical insurance benefits and car allowance payments. 2 An annual bonus plan is in place 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. Participation in the plan is by invitation only, reflecting the inherited contractual terms of employees where relevant and our emphasis on performance. The purpose of the bonus plan is to enable the senior management team to attract and retain key employees to the Group in a competitive market for talent, while ensuring that participants are subject to demanding criteria that best reflect the interests of the Group and its stakeholders.3 Members of the Group operate several defined contribution, and one defined benefit, 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%. Mr Gant receives a cash allowance equal to 7.5% of base salary in lieu of pension. Mr Simpson does not receive a pension contribution.After the year-end, base salaries for Mr Simpson and Mr Gant have been increased to £485,000 and £325,000 respectively. This takes into account the fact that the Group has doubled in size and the additional responsibilities and work as a result.Non-Executive Directors’ RemunerationEach individual non-executive director’s total remuneration paid over the year is summarised below.Non-executive DirectorSalary or fee£’000Taxable benefits£’000Bonus£’000Pension contributions£’000Total Remuneration 2022£’000Total Remuneration 2021£’000John Richards100---10083Giles Beale55---5555Clive Norman50---5050David Simpson55---5555Directors’ LoansPrior to the Company’s IPO, a Group company provided a loan to Mr Richards of £139,764 to purchase shares in the Group as disclosed in the Company’s admission document. The loan was unsecured and interest free. The loan was repaid in full during the year.Directors’ Interests in SharesThe beneficial interests of Directors’, and persons connected with them, as at 31 March 2022 in the ordinary shares of the Company (excluding share options) were as follows:Held at 31 March 2021Sold in the year1Acquired in the yearHeld at 31 March 2022Alan Simpson250,453,50417,007,146-33,446,358John Richards5,919,7331,872,048-4,047,685Clive Norman5,567,8711,760,775-3,807,096David Simpson151,500--151,5001 The shares were sold as part of the oversubscribed fundraise and share placement to acquire Taylor Maxwell in 2021.2 Total for Alan and Sarah Simpson.CORPORATE GOVERNANCEREPORT OF THE REMUNERATION COMMITTEE (CONTINUED)

LONG TERM INCENTIVE PLAN (LTIP)The table below details the LTIP awards granted to the executive Directors during the year, together with those which were unvested at 31 March 2022. Mr Simpson does not receive awards under the LTIP due to his substantial shareholding in the Company.MAXIMUM AWARDSHARES VESTINGAward and Vesting dateNumber of options awarded% of salaryFace value at grant £’000Market price at grant1 (pence)ThresholdMaximumEnd of Performance PeriodMike Gant21/10/21 – 01/04/24214,2867522510525%100%01/04/241 The weighted average share price calculated over the 10 working days prior to 21 October 2021.Performance Conditions50% adjusted EBITDA and 50% Total Shareholder Return. 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 25% vesting if the initial 18% hurdle is met with a proportionate additional vesting up to 100% at the 30% threshold being met. MAXIMUM AWARDSHARES VESTINGAward and Vesting dateNumber of options awarded% of salaryFace value at grant £’000Market price at grant1 (pence)ThresholdMaximumEnd of Performance PeriodMike Gant04/06/21 – 01/04/24506,82512537573.9950%100%01/04/241 The weighted average share price calculated over the 10 working days prior to 1 April 2021.Performance Conditions50% adjusted EBITDA and 50% Total Shareholder Return. 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 50% vesting if the initial 18% hurdle is met with a proportionate additional vesting up to 100% at the 30% threshold being met. Holding PeriodThe LTIP options are exercisable at a nominal purchase price of £0.01 per share and, subject to sufficient shares being sold to meet the purchase price and any tax liabilities, the balance of shares must be held for a further period of two years.Dividend Equivalent SharesThe LTIP options are eligible for dividend equivalent shares during the vesting period.Malus & ClawbackAll awards made under the LTIP are subject to malus & clawback within five years from the grant date in the following circumstances:(a) if any of the audited financial results for the Company are materially mis-stated;(b) if the Company, any Group Company and/or a relevant business unit has suffered serious reputational damage as a result of the relevant Participant's misconduct or otherwise; (c) there has been serious misconduct on the part of the relevant Participant; or(d) such other circumstances as the Committee determines. 47

COMPANY SHARE OPTION PLAN (CSOP)The CSOP is a plan under which selected employees (including executive Directors) may be granted rights to acquire ordinary shares in the form of tax favoured options or non-tax favoured options with a market value exercise price. Under the current policy all employees below the management board are eligible to participate in the CSOP. An award of up to £30,000 of tax favoured options can be made to each participant in total. There are no tax liabilities on the exercise of tax favoured options subject to the exercise price being paid. Options can be exercised between the third and tenth anniversary of the date of award.Date of AwardVesting DateExercise Price (pence)Number of SharesForfeitedLapsedExercisedBalance at 31/03/2202/08/1902/08/22413,681,311(615,827)(4,010)(31,160)3,030,31421/10/2121/10/24105352,346---352,346External Remuneration AdviserThe Committee has access to external advice as required. The renumeration adviser to the Committee is h2glenfern Remuneration Advisory, who were appointed following a tender process in 2021. h2glenfern Remuneration Advisory is a member of the UK Remuneration Consultants Group and as such voluntarily adheres to its code of conduct.h2glenfern has provided advice and support around the following key areas:• advising on the ongoing drafting of a revised remuneration policy;• advising on the LTIP and CSOP plans and levels and frequency of awards under those plans; and• informing the Committee on market practice and governance issues. The total fees paid to h2glenfern in relation to advice to the Committee in the year were £6,250.The Committee considers the advice that it receives from h2glenfern to be independent.CORPORATE GOVERNANCEREPORT OF THE REMUNERATION COMMITTEE (CONTINUED)

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 strategyOperationMaximum potential valuePerformance conditionsBase salaryThe provision of a competitive, fixed salary that attracts and retains key individuals reflecting their experience and role.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 45. Changes in the scope of responsibilities or role may require an adjustment to salary levels.Assessment of personal and corporate performance.BenefitsTo provide market benefits on a cost-effective basis.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.The maximum potential value is the cost to the Company in providing these benefits.Not applicable.PensionTo assist executive Directors in providing for retirement where this is considered an aid in attracting and retaining the individual.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 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.Not applicable.Annual bonusTo recognise an executive’s achievement of annual objectives that support the Group’s strategy and financial well-being.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.Each executive Director is entitled to receive a cash bonus of up to 125% of basic salary on the attainment of performance objectives.The Remuneration Committee reviews performance measures annually.Share plansTo 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.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 together with a two-year holding period post vesting.Further details of the share plans and their operation are set out on pages 106 and 107 in note 37 of the Financial Statements.Subject to exercise or vesting, the market value of the shares the subject of the grant less any cost payable by the grantee on exercise or vesting. Under the LTIP, a grantee may be 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.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. 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.Non-executive Directors’ remuneration The table below summarises the key elements for the period of our non-executive directors’ remuneration. Purpose and link to strategyOperationMaximum potential valuePerformance conditionsBase feeTo provide competitive fixed fees so as to (a) procure and retain the appropriate skills and experience required and (b) expected time commitment.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 45.Not applicable.Benefits and incentivesThe provision of market benefits on a cost-effective basis.Reimbursement for reasonable business expenses.During the year, John Richards and Giles Beale were covered under the Group’s death in service insurance plan but following the year end each renounced this benefit.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.The maximum potential value is the cost to the Company in providing these benefits.Not applicable.By order of the BoardGiles Beale, Chair of the Remuneration Committee22 July 2022Report of the Directors

The Directors have pleasure in presenting their Annual Report together with the
audited financial statements of the Company for the year ended 31 March 2022.
The following information is provided in other sections as noted below and is incorporated by reference into this report:

Strategic Report
ESG Report
Corporate Governance Report
Statement of Directors Responsibilities
Directors Remuneration Report
Going Concern Statement
Future development and events
occurring after the balance sheet date

Pages 2 to 30
Pages 26 to 29
Pages 36 to 38
Page 51
Pages 44 to 48
Page 22
Details can be found in the strategic report on
Pages 2 to 30

C
O
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P
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A
T
E

G
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N
A
N
C
E

The Company is a public limited company, registered in England and
Wales, with registered number 11123804 and is listed on the AIM 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 of companies. Detail of the companies
in the Brickability Group are included in note 20 to the audited financial
statements on pages 86 to 88.

Review of the Business
The Strategic report on pages 2 to 30 provides an operating and
financial review of the business and the Group’s trading for the year
ended 31 March 2022 as well as risk management.

Dividends
The Directors recommend a final dividend for the year of 2.04 pence
per share payable on 22 September 2022 (2021: 1.0850 pence). An
interim dividend of 0.96 pence per share was paid on 24 February
2022 (2021: 0.8678 pence).

Directors
Biographical details of the Directors currently serving on the Board and
their dates of appointment along with details of their membership of
Board Committees are set out on pages 32 to 33.

The Directors who served during the year are as follows:

Executive Directors

Non-Executive Directors

Alan Simpson

Mike Gant

John Richards

Giles Beale

Clive Norman

David Simpson

Susan McErlain joined the Board as an independent non-executive
director on 9 May 2022.
Directors’ remuneration, share options, long-term executive plans,
pension contributions, benefits and interests are set out in the Directors’
remuneration report on pages 44 to 48.
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.
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.

REPORT OF THE DIRECTORS (CONTINUED)

Share Capital and Substantial Shareholders
Full details of the issued share capital of the Company are set out in note
35 to the Financial Statements on page 105. At 13 July 2022, 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:

15.01%

44,806,438
Octopus Investments
Nominees Limited

5.38%

16,049,707
FIL Limited

8.04%

23,970,456
Alan Simpson

3.35%

10,000,000
Arnold van Huet

9.96%

29,694,391
Liontrust Asset
Management

4.22%

12,602,900
Otus Capital
Management

6.71%

20,007,298
Paul Hamilton

3.18%

9,475,902
Sarah Simpson

Significant Agreements (Change of Control)
The Company is required to disclose any significant agreements that
take effect, alter or terminate on a change of control of the Company
following a takeover bid.
The Company has committed debt facilities all of which are directly or
indirectly subject to change of control provisions.
In the event of a takeover or other change of control outstanding
awards under the Group share plans will become exercisable.

Financial Risk Management
Information in respect of the financial risk management of the Group, is
contained on page 94 in note 29 on borrowings and on pages 102 to
105 in note 34 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 110 in note 39 to the Financial
Statements.

Disclosure of Information to the Auditor
The Directors in office on 22 July 2022 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.

Auditor
BDO LLP has indicated its willingness to continue in office as
auditor and a resolution to re-appoint them will be proposed at the
forthcoming Annual General Meeting.

Annual General Meeting (AGM)
The AGM will be held on Tuesday 6 September 2022 at 12.00 p.m. at
Queensgate House, Cookham Road, Bracknell, Berkshire, RG12 1RB.
The 2022 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
22 July 2022.

By Order of the Board

Prism Cosec Limited
Company Secretary
22 July 2022

Statement of Directors’ Responsibilities

The Directors are responsible for preparing the Annual Report and the
financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements
for each financial year. Under that law the Directors have prepared
the Group financial statements in accordance with UK-adopted
international accounting standards. The Directors have elected to
prepare the Parent Company financial statements in accordance with
United Kingdom Generally Accepted Accounting Practice (United
Kingdom Accounting Standards, comprising FRS 101 Reduced
Disclosure Framework, and applicable law).

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 and profit or loss of the Group and the Company
for that period. In preparing these financial statements, the directors are
required to:

•

select suitable accounting policies and then apply them consistently;

• make judgements and estimates that are reasonable and prudent;

•

for the Group financial statements state whether they have been
prepared in accordance with UK-adopted international accounting
standards, subject to any material departures disclosed and
explained in the financial statements;

for the Parent Company financial statements, state whether
applicable UK accounting standards have been followed, subject
to any material departures disclosed and explained in the financial
statements; and

prepare the financial statements on the going concern basis unless
it is inappropriate to presume that the Group and the Company will
continue in business.

comply with the Companies Act 2006. They are also responsible
for safeguarding the assets of the Company and hence for taking
reasonable steps for the prevention and detection of fraud and other
irregularities.

The Directors are responsible for ensuring the annual report and
the financial statements are made available on a website. Financial
statements are published on the Company’s website in accordance with
the legislation in the UK governing the preparation and dissemination
of financial statements, which may differ from legislation in other
jurisdictions. The maintenance and integrity of the Company’s website
is the responsibility of the directors. The directors’ responsibility also
extends to the ongoing integrity of the financial statements contained
therein.

In the case of each Director in office at the date the Directors’ report is
approved:

•

so far as the Director is aware, there is no relevant audit information
of which the Group’s and parent Company’s auditors are unaware;
and

they have taken all the steps that they ought to have taken as a
Director in order to make themselves aware of any relevant audit
information and to establish that the Group’s and parent Company’s
auditors are aware of that information.

This Responsibility Statement was approved by the Board on
22 July 2022 and is signed on its behalf by:

The Directors are responsible for keeping adequate accounting records
that are sufficient to show and explain the Company's transactions and
disclose with reasonable accuracy at any time the financial position of
the Company and enable them to ensure that the financial statements

Alan Simpson
Chief Executive

22 July 2022

Mike Gant
Chief Financial Officer

CORPORATE GOVERNANCEIndependent 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 of the Group’s and of the Parent Company’s affairs
as at 31 March 2022 and of the Group’s profit for the year
then ended;

the Group financial statements have been properly
prepared in accordance with UK adopted international
accounting standards;

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

the financial statements have been prepared in
accordance 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 2022 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 UK adopted international accounting standards. 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

•

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
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:
•

We obtained the going concern assessment, approved by the
Directors, including detailed cash flow forecasts covering 14
months to 30 September 2023.
We assessed the Directors’ assumptions in the going concern
forecast including revenue and growth profiles, profit margin,
funding headroom availability. We performed this with reference
to available market data and reviewed the forecasts for any
anomalies. We assessed actual historical trading performance
and how this was incorporated into future projections.
We assessed the historical accuracy of the Directors’ forecasts,
including comparing the current forecasts against post year end
actual results.
We inspected the Group’s signed revolving facility agreements to
check that the Group has sufficient funds to: settle the deferred and
contingent consideration due of £31.5m (Note 21) for acquisitions
made in the prior year as well as the four new acquisitions in the
current year and one new acquisition post year end amounting
to £1.4m (Note 40); and maintain sufficient working capital to
continue daily operations as normal.
We obtained the documentation of the available revolving facility,
that the Group is using for its acquisitions and working capital, to
check that the facility has been amended to be available until 29
June 2024.
We assessed the debt covenants of the drawn facilities to
determine if they would be breached within the forecast period.
We assessed the appropriateness of sensitivity analyses prepared
by the Directors over the Group’s cash flow forecasts including
the effects of adverse movements in revenue to determine the
sufficiency of available cash resources to settle short term liabilities
as they fall due over the next 18 months.
We reviewed the reverse stress testing and challenged the
Directors’ assessment of the quantification of the revenue shortfall
required for covenants to be breached in the forecast period. We
considered the likelihood and reasonableness of the shortfall with
reference to the Directors’ historical data of revenue and earnings
before interests, taxes, depreciation and amortisation.
We reviewed the adequacy and consistency of disclosures in Note
2 to the financial statements regarding going concern against the
forecast and reverse stress test assessment that the Directors have
considered in performing their going concern assessment.
Based on the work we have performed, we have not identified any
material uncertainties relating to events or conditions that, individually
or collectively, may cast significant doubt on the Group and the
Parent Company’s ability to continue as a going concern for a period
of at least twelve months from when the financial statements are
authorised for issue.
Our responsibilities and the responsibilities of the Directors with
respect to going concern are described in the relevant sections of this
report.

•

Overview

Coverage

Key audit matters

92% (2021: 91%) of Group profit before tax
93% (2021: 89%) of Group revenue
94% (2021: 94%) of Group total assets

2022
✓
✗
✓

2021
✗
✓
✗

Pricing of revenue
Revenue cut-off of direct sales
IFRS 3 Business Combinations and Acquisition Accounting
for acquisitions made during the year
Carrying value of goodwill and intangibles
Revenue cut-off of direct sales is no longer considered to be a key audit matter because procedures over cut-off of
direct sales have been established and no significant issues were noted in our cut-off testing.
Carrying value of goodwill and intangibles is no longer considered to be a key audit matter as the risk associated
with impairment has decreased as the Group’s trading performance and outlook have improved.

✗

✓

Materiality

Group financial statements as a whole
£1,430,000 (2021: £720,000) based on 4.5% (2021: 5%) of Adjusted Profit Before Taxation.

An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of the Group and its environment, including the Group’s system of internal control,
and assessing the risks of material misstatement in the financial statements. We also addressed the risk of management override of internal
controls, including assessing whether there was evidence of bias by the Directors that may have represented a risk of material misstatement.
In determining the scope of our audit, we considered the size and nature of each component within the Group based on revenue to determine
the 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 financial
statements as a whole.
We have identified six components to be significant to the Group. All significant components were subject to full scope audits. We assessed
the appropriateness, completeness and accuracy of the Group journals and other adjustments performed on consolidation Non-significant
components were subject to either specified audit procedures and/or desktop review procedures. All full scope audits, specified audit procedures
and desktop review procedures were undertaken by the Group audit team.
Key audit matters
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 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 statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.

CORPORATE GOVERNANCE

INDEPENDENT AUDITOR’S REPORT (CONTINUED)

Key audit matter

Accuracy of revenue
pricing

See Note 3.4 to the
financial statements for
the Director’s disclosures
on the significant
accounting policies
regarding revenue
recognition and Note 5 for
the detailed disclosures on
revenue.

We identified a fraud risk in respect of the
pricing of revenue transactions. This was due
to the fact that the process for generating
sales invoices allows for the manual override
of prices. Further to that bonus incentives are
linked to financial results, thereby creating
both the opportunity and incentive for
employees and management to manipulate
the prices to achieve target results.
We considered this to be an area of most
significance in our audit, and therefore a key
audit matter.

How the scope of our audit addressed the key audit matter

•

We have performed the following procedures to address this key audit matter:
We obtained a more detailed understanding and tested the operating
•
effectiveness of key controls by the finance and sales team to mitigate the
risk identified over pricing of revenue, including how management investigate
and resolve any pricing differences in prior to delivery.
We performed procedures to test the operating effectiveness of the relevant
control. We rechecked the control that prices per the sales invoice agree to
appropriate documentation for the revenue stream and entity. This includes
agreed price list, signed customer purchase order or correspondences as
appropriate.
We reviewed a sample of credit notes raised throughout the year and post
year-end and checked for any credit notes issued for pricing changes that
may indicate customer complaints or pricing anomalies.
We vouched a sample of invoices in the trade receivables balance at year
end to cash receipts post year-end to validate that there are no customer
complaints relating to pricing.

•

Key observations:
Based on the results of from the procedures performed, we concluded that the pricing of revenue transactions is appropriate.

IFRS 3, Business
Combinations and
Acquisition Accounting
for acquisitions made
during the year

See Note 3.13 to the
financial statements for
the Directors’ disclosures
for significant accounting
policies regarding
business combinations
and goodwill and Note 21
for the detailed business
combination disclosures

In June 2021, the Group acquired the Taylor
Maxwell Group for a total consideration
of £49.3m funded through a combination
of cash resources, shares issued, deferred
consideration and contingent consideration.
The determination of the contingent
consideration involves significant judgment
about whether the financial forecasts will be
met and the continued employee service,
which creates a risk that the resulting
valuation and accounting treatment is
inaccurate.
The Group has recorded assets and
liabilities acquired at fair value including
the recognition intangible assets (customer
relationships, brands, and goodwill on
acquisition). As part of the purchase price
allocation, an independent specialist was
involved in the valuation of intangible
assets acquired which requires the use of
assumptions and estimates.
Due to the complexity of the acquisition
accounting involving significant judgment
and estimates by management, as well
as the use of valuation techniques, there
is a risk that the fair value of the acquired
assets and liabilities is not appropriate or
not accounted for in accordance with IFRS 3
Business Combinations.
Due to above, we identified that the business
combination and acquisition accounting of
Taylor Maxwell as a key audit matter.

We have performed the following procedures to address this key audit matter:
•
We obtained management’s calculation of the total consideration and:
agreed the cash consideration to bank statements; agreed the deferred
consideration to the purchase agreement; and agreed the consideration
settled through shares to the actual shares issued and the price on issuance
date.
In respect of the contingent consideration, we have:
o

Reviewed management’s cash flow forecasts and estimates used in
determining the value of any contingent consideration.
Tested, by reference to the terms of the purchase agreement and the
requirements of IFRS 3, whether the contingent consideration linked to
continued employee service has been appropriately accounted for.

•

We tested the completeness and appropriateness of management’s
identification of intangible assets acquired through a review of due
diligence reports, financial statements of Taylor Maxwell and enquiries with
management.
We obtained the valuation report from managements specialist and with the
support of our internal valuation experts, we reviewed the appropriateness
of the valuation methods used by benchmarking with the valuations used in
the industry for comparable assets (multi-period excess earnings method for
the customer relationships and valuation & relief from royalty method for the
brands). We evaluated the reasonableness of the significant assumptions
and judgment applied by management in the valuation of the identifiable
intangibles at acquisition by comparing with publicly-available industry data
and historical financial information of the Taylor Maxwell.
We have considered the competence, capabilities, and objectivity of both our
internal specialists and managements specialists.
We tested the existence, measurement and completeness of the acquired
assets and liabilities at the date of acquisition and considered whether any
fair value adjustment were required.
With the assistance of our internal tax specialists, we tested the accuracy and
completeness of the current and deferred tax assets and liabilities acquired
by reviewing the corporate and deferred tax calculations including the impact
on the tax balances of the fair value adjustments applied in the acquisition
accounting.

Key observations:
We considered that business combination and acquisition accounting of Taylor Maxwell, including the treatment of contingent
consideration, to be in accordance with IFRS 3 and that the judgements and estimates applied by management in the identification
and measurement of the assets and liabilities were appropriate.

Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. We consider
materiality to be the magnitude by which misstatements, including omissions, could influence the economic decisions of reasonable users that are
taken on the basis of the financial statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower materiality level,
performance materiality, to determine the extent of testing needed. Importantly, misstatements below these levels will not necessarily be evaluated
as immaterial as we also take account of the nature of identified misstatements, and the particular circumstances of their occurrence, when
evaluating their effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole and performance materiality as follows:

Group financial statements

Parent company financial statements

2022
£m

2021
£m

2022
£m

2021
£

Materiality

1,430,000

720,000

929,000

472,000

Basis for
determining
materiality

Rationale for
the benchmark
applied

Performance
materiality

Basis for
determining
performance
materiality

4.5% of Adjusted Profit before
Taxation

5% of Adjusted Profit before
Taxation

65% of Group materiality

66% of Group materiality

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

Capped at 65% of Group materiality (2021: 66% of Group
materiality) given the assessment of the significant components’
aggregation risk.

1,005,000

508,000

650,000

354,000

70% (2021: 70%) of Group materiality taking into consideration
of the overall risk assessment, including factors such as areas
of estimation within the financial statements, the type of audit
testing to be completed and history of misstatement.

70% (2021: 70%) of Parent Company materiality taking into
consideration of the overall risk assessment, including factors
such as areas of estimation within the financial statements
and the type of audit testing to be completed and history of
misstatement.

Component materiality
We set materiality for each component of the Group based on a percentage of between 3% and 65% of Group materiality dependent on the size
and our assessment of the risk of material misstatement of that component. Component materiality ranged from £44,000 to £929,000. 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 exceeding component materiality was appropriately mitigated.
Reporting threshold
We agreed with the Audit Committee that we would report to them all individual audit differences in excess of £28,600 (2021: £14,500). We
also agreed to report differences below this threshold that, in our view, warranted reporting on qualitative grounds.

CORPORATE GOVERNANCEINDEPENDENT AUDITOR’S REPORT (CONTINUED)

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 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. We believed
the areas in which fraud might occur were in the management
override of controls, bias in accounting estimates and inappropriate
revenue recognition, specifically in respect of pricing and the
recording of revenue in the appropriate period. In addressing the risk
of fraud:
•

We have performed journals testing based on a set of fraud risk
criteria and agreed to supporting documentation also verifying
the business rationale. These criteria included round sum posted
journals, material journals, unexpected account combinations,
unusual journal descriptions and authorised users testing.
We made enquiries with management and the Audit Committee
about their knowledge of any known or suspected instances of
non-compliance with laws and regulations and fraud.
We checked the discretionary bonus payments to approval from
the remuneration committee.
We challenged 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 incorporated unpredictability into our 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 testing that revenue was recognised in the correct period by
agreeing a sample of sales entries to proof of delivery notes or
other supporting documentation. Our response to the risk in
respect of the pricing of revenue risk is discussed in our key audit
matter section above.
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.

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
22 July 2022

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

CORPORATE GOVERNANCEFinancial Statements

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2022

All results relate to continuing operations.

20222021NoteAdjusted £’000Other (note 14) £’000Total £’000Adjusted£’000Other (note 14)£’000Total£’000Revenue5520,169-520,169181,084-181,084 Cost of sales(433,366)-(433,366)(143,112)-(143,112)Gross profit86,803-86,80337,972-37,972 Other operating income7354-35492-92 Administrative expenses(50,581)(13,515)(64,096)(22,018)(4,062)(26,080) Comprising: Depreciation and amortisation(3,342)(6,349)(9,691)(1,837)(3,619)(5,456) Other administrative expenses(47,239)(7,166)(54,405)(20,181)(443)(20,624)Impairment losses on financial assets26(450)-(450)(341)-(341)Finance income1154-5413-13 Finance expense12(1,311)(938)(2,249)(718)(127)(845)Share of post-tax profit/ (loss) of equity accounted associates22-5555-(6)(6)Share of post-tax loss of equity accounted joint ventures23(149)-(149)--- Fair value (losses)/ gains13-(1,916)(1,916)-360360 Profit/ (loss) before tax834,720(16,314)18,40615,000(3,835)11,165 Tax (expense)/ credit15(6,494)391(6,103)(2,193)687(1,506)Profit/ (loss) for the year28,226(15,923)12,30312,807(3,148)9,659 Other comprehensive income - - - Items that will not be reclassified to profit or loss: - - - Remeasurements of defined benefit pension schemes33-(1,970)(1,970)--- Deferred tax on remeasurement of defined benefit pension schemes32-374374--- Fair value gain on investments in equity instruments designated as FVTOCI24-5353--- Other comprehensive income for the year-(1,543)(1,543)--- Total comprehensive income/ (loss)28,226(17,466)10,76012,807(3,148)9,659 Profit/ (loss) for the year attributable to:Equity holders of the parent28,310(15,923)12,38712,813(3,148)9,665 Non-controlling interests(84)-(84)(6)-(6)28,226(15,923)12,30312,807(3,148)9,659 Total comprehensive income/ (loss) attributable to:Equity holders of the parent28,310(17,466)10,84412,813(3,148)9,665 Non-controlling interests(84)-(84)(6)-(6)28,226(17,466)10,76012,807(3,148)9,659Earnings per shareBasic earnings per share17 4.40 p 4.19 pDiluted earnings per share174.32 p 4.18 pAdjusted basic earnings per share1710.06 p 5.56 pAdjusted diluted earnings per share179.86 p 5.54pFINANCIAL STATEMENTSCONSOLIDATED BALANCE SHEET
AS AT 31 MARCH 2022

Note2022£’0002021£’000Non-current assetsProperty, plant and equipment1818,5559,125 Right of use assets3012,1627,945 Intangible assets19150,58576,848 Investments in equity accounted associates22261221 Investments in equity accounted joint ventures23279- Investments in financial assets24178125 Deferred tax assets32-98 Trade and other receivables261,023460 Total non-current assets183,04394,822 Current assetsInventories2528,12012,127 Trade and other receivables26131,20242,832 Employee benefit assets33781- Current income tax assets101- Cash and cash equivalents2725,0288,592 Total current assets185,23263,551 Total assets368,275158,373 Current liabilitiesTrade and other payables28(140,046)(38,769)Current income tax liabilities-(426)Lease liabilities30(2,216)(1,497)Total current liabilities(142,262)(40,692)Non-current liabilitiesTrade and other payables28(17,717)(3,153)Loans and borrowings29(24,240)(15,750)Lease liabilities30(10,417)(6,796)Provisions31(1,728)(1,247)Deferred tax liabilities32(17,427)(5,301)Total non-current liabilities(71,529)(32,247)Total liabilities(213,791)(72,939)Net assets154,48485,434 EquityCalled up share capital352,9852,305 Share premium account36102,14649,999 Capital redemption reserve3622 Share-based payment reserve361,930266 Merger reserve3611,1461,245 Retained earnings3636,36531,623 Equity attributable to owners of the Company154,57485,440 Non-controlling interests(90)(6)Total equity154,48485,434 These financial statements were approved by the Board of Directors and authorised for issue on 22 July 2022. They are signed on behalf of the Board by:Alan Simpson Director Mike Gant DirectorCompany registration number: 11123804COMPANY BALANCE SHEET
AS AT 31 MARCH 2022

Non-current assets

Property, plant and equipment

Investment in subsidiaries

Deferred tax assets

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

Total current liabilities

Non-current liabilities

Trade and other payables

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

Note

2022
£’000

2021
(Restated)
£’000

531

57,572

186

116,883

175,172

3,171

372

3,543

178,715

6,542

81,951

88,493

2,874

2,896

91,389

(17,950)

(10,084)

(108)

(24,240)

(24,348)

(15,750)

(42,298)

(25,834)

136,417

65,555

2,985

102,146

1,524

16,407

13,353

136,417

2,305

49,999

266

6,506

6,477

65,555

The profit of the Company for the financial year was £12,978,000 (2021: loss of £766,000).

These financial statements were approved by the Board of Directors and authorised for issue on 22 July 2022. They are signed on behalf of the
board by:

Alan Simpson Director

Mike Gant Director

Company registration number: 11123804

FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2022

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 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)85,434Profit or (loss) for the year-----12,38712,387(84)12,303Other comprehensive income for the year-----(1,543)(1,543)-(1,543)Total comprehensive income for the year-----10,84410,844(84)10,760Dividends paid-----(6,102)(6,102)-(6,102)Issue of paid shares57854,422----55,000-55,000Issue of consideration shares99---9,901-10,000-10,000Issue of shares on exercise of share options312----15-15Equity settled share-based payments---1,173--1,173-1,173Deferred tax on share-based payment transactions---491--491-491Share issue costs-(2,287)----(2,287)-(2,287)Total contributions by and distributions to owners68052,147-1,6649,901(6,102)58,290-58,290At 31 March 20222,985102,14621,93011,14636,365154,574(90)154,484COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2022

Share capital£’000Share premium account £’000Capital redemption£’000Share-based payments£’000Merger reserve£’000Retainedearnings£’000Total£’000At 1 April 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 20212,30549,99922666,5066,47765,555Profit for the year----12,97812,978Total comprehensive income for the year-----12,97812,978Dividends paid-----(6,102)(6,102)Issue of paid shares57854,422----55,000Issue of consideration shares99---9,901-10,000Issue of shares on exercise of share options312----15Equity settled share-based payments---1,173--1,173Deferred tax on share-based payment transactions---85--85Share issue costs-(2,287)----(2,287)Total contributions by and distributions to owners68052,147-1,2589,901(6,102)57,884At 31 March 20222,985102,14621,52416,40713,353136,417FINANCIAL STATEMENTSCONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2022

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

Note2022£’0002021£’000Operating activitiesProfit for the year12,3039,659Adjustments for:Depreciation of property, plant and equipment181,143726Depreciation of right of use assets302,1361,111Amortisation of intangible assets196,3963,619(Gain)/loss on disposal of property, plant and equipment and right of use assets8(75)4Foreign exchange (gains)/ losses(27)(19)Share-based payment expense371,597338Other operating income(27)-Share of post-tax loss/ (profit) in equity accounted associates22(55)6Share of post-tax loss/ (profit) in joint ventures23149-Impairment of goodwill1916-Fair value changes in contingent consideration131,916(360)Movements in provisions3112(142)Finance income11(54)(13)Finance expense122,249845Acquisition costs141,236105Income tax expense156,1031,506Pension charge in excess of contributions paid140-Operating cash flows before movements in working capital35,15817,385Changes in working capital:Increase in inventories(6,700)(2,011)Increase in trade and other receivables(22,194)(4,077)Increase in trade and other payables21,2341,792Cash generated from operations27,49813,089Payment of acquisition expenses(1,139)(105)Interest received1813Interest paid-(367)Income taxes paid(7,256)(2,435)Net cash from operating activities19,12110,195Investing activitiesPurchase of property, plant and equipment18(6,317)(5,669)Proceeds from sale of property, plant and equipment18759Proceeds from sale of right of use assets-9Purchase of intangible assets19(488)-Acquisition of subsidiaries21(50,292)(2,548)Net cash acquired with subsidiary undertakings213,4222,274Acquisition of interests in joint ventures(428)-Proceeds from repayment of directors' loans978-Dividends received from associates15-Net cash used in investing activities(52,923)(5,875)CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022

The notes on pages 66 to 111 form an integral part of these financial statements

Note2022£’0002021£’000Financing activitiesEquity dividends paid16(6,102)(4,500)Proceeds from issue of ordinary shares net of share issue costs52,728-Payment of financing costs(97)-Proceeds from bank borrowings52,1003,400Repayment of bank borrowings(43,400)(12,500)Payment of lease liabilities30(2,103)(1,398)Payment of deferred and contingent consideration38(1,358)(7,883)Interest paid(1,139)-Payment of transaction costs relating to loans and borrowings(375)(90)Net cash flows from/ (used in) financing activities50,254(22,971)Net increase in cash and cash equivalents16,452(18,651)Cash and cash equivalents at beginning of period8,59227,269Effect of changes in foreign exchange rates(16)(26)Cash and cash equivalents at end of year27 25,028 8,592 FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 MARCH 2022

1. General information
Brickability Group PLC is a public company, limited by shares,
incorporated in England and Wales. The address of the registered
office is shown on page 113. The nature of the Group’s operations and
its principal activities are set out in the Strategic Report on pages
2 to30.

2. Basis of preparation
The consolidated financial statements have been prepared in
accordance with UK adopted international accounting standards in
conformity with the requirements of the Companies Act 2006. There
has been no impact on the financial statements as a result of the
transition from applying International Financial Reporting Standards
(IFRS) adopted for use in the European Union to the UK adopted
international accounting standards.
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 which are
stated at fair value.

Going concern
The key uncertainly faced by the Group is the demand for its products
and how these are impacted by economic factors.
Budget scenarios have been prepared comparing a number of
outcomes where there is a significant and prolonged drop in demand
in the industry. The Group has focused on the 18 month period from
the year end to 30 September 2023 in its going concern review.
For each scenario, cash flow and covenant compliance forecasts have
been prepared. A drop in revenue of 50% did not lead to any breach
of covenants. A drop of 75% revenue would be required with no
corresponding adjustment to the cost base of the business to breach
covenants within the period of review.
The Directors consider this to be a highly unlikely scenario, and in the
event of it occurring would take steps to reduce the cost base by at
least 15% which would mean covenants would not be breached.
After making appropriate enquiries, considering the scenarios
modelled and reviewing the Group’s risk assessments, the Directors
have a reasonable expectation that the Company and the 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.

New standards, interpretations and amendments not yet
effective from 1 January 2021
The following standards and amendments became effective for the
current financial year:
•

Interest rate benchmark reform – IBOR ‘phase 2' (amendments to
IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16; and
COVID-19 related rent concessions beyond 30 June 2021
(amendments to IFRS 16)).

•

The amendments above did not have any impact on the amounts
recognised in prior periods or the current year. They are also not
expected to significantly affect future periods.

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:
Amendments effective from 1 January 2022:
•

onerous contracts – cost of fulfilling a contract (amendments
to IAS 37);
property, plant and equipment – Proceeds before intended use
(amendments to IAS 16));
annual improvements to IFRS standards 2018-2020 (amendments
to IFRS 1, IFRS 9, IFRS 16 and IAS 41); and
references to the Conceptual Framework (amendments to IFRS 3).

•

•
Amendments effective from 1 January 2023:
•

disclosure of accounting policies (amendments to IAS 1 and IFRS
Practice Statement 2));
definition of accounting estimates (amendments to IAS 8); and
deferred tax related to assets and liabilities arising from a single
transaction (amendments to IAS 12).

•
•

The Group is currently assessing the potential impact of the new
standards. The amendments to IAS 12 will likely result in the Group
recognising additional deferred tax assets and liabilities in respect
of right of use assets accounted for under IFRS 16. The other
amendments listed above are not expected to have any impact on
the amounts recognised in prior periods and are not expected to
significantly affect the current or future 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 2022.

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 2022. In the prior year, all subsidiary
undertakings prepared accounts 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.
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,
associates and joint ventures are initially recorded at cost and
subsequently stated at cost less any accumulated provision for
impairment.

3.3 Investment in associates and joint ventures
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.
A joint venture is a joint arrangement whereby the parties that
have control of the arrangement have rights to the net assets of the
arrangement. Joint control is the contractually agreed sharing of control
of an arrangement, which exists only when decisions about the relevant
activities require unanimous consent from those sharing the control.
Investments in associates and joint ventures 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 profit or loss and other comprehensive
income of the associate or joint venture since the acquisition date.
Where a Group company transacts with an associate or joint venture of
the Group, unrealised profits and losses are eliminated to the extent of
the Group’s interest in the relevant entity.
Dividends received from associates and joint ventures are recognised
as a reduction in the carrying amount of the investment.

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.
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.
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.
Revenue from the provision of transportation and distribution
services is also recognised over time, by reference to the stage of
completion of the Group’s performance obligations, as the customer
simultaneously receives and consumes the benefits from the delivery
service provided. The revenue is recognised in the consolidated profit
or loss in the period in which the services are rendered.
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 3.19 and 31.
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.

•

FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
YEAR ENDED 31 MARCH 2022

3. Significant accounting policies (continued)

3.4 Revenue recognition (continued)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 Supplier rebatesThe Group receives volume rebates from its suppliers. Amounts receivable are recognised as a reduction to cost of sales in the period in which the associated purchase is recorded. The Group estimates the amount receivable based on the terms of the agreements in place, to the extent that it is probable that the rebates will be received and the amounts can be reliably estimated.3.6 Foreign currenciesThe 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.3.7 Group pension schemesDefined contribution schemesPayments 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.Defined benefit schemesDuring the year, the Group acquired a defined benefit pension scheme when it acquired Taylor Maxwell Group (2017) Limited. The scheme is closed to further accrual and an insurance policy was incepted shortly afterwards. Where the Group retains a legal or constructive obligation in respect of insured benefits, the plan is treated as a defined benefit plan.The retirement benefit obligation recognised in the Consolidated Balance Sheet represents the surplus or deficit in the Group’s defined benefit plans. A surplus is recognised to the extent that it will lead to a refund or reduction in future payments.Actuarial valuations are carried out at the reporting date to determine the cost of providing benefits using the projected unit credit method. Remeasurements, including the effect of actuarial gains and losses, the effect of the asset ceiling (if applicable) and the return on plan assets (excluding interest) are recognised immediately in the statement of financial position, with a charge or credit recognised in other comprehensive income in the period in which it occurs. Remeasurements recognised in other comprehensive income are not re-classified. Past service cost is recognised in profit or loss when a plan amendment or curtailment occurs, or when the Group recognises related restructuring costs or termination benefits, if earlier. Gains or losses on settlement of a defined benefit plan are recognised when the settlement occurs. Net interest is calculated by applying a discount rate to the net defined benefit obligation or asset. Defined benefit costs are split into three categories:• service costs, including current service cost, past service cost and gains and losses on curtailments and settlements;• net interest expense or income; and • remeasurements.The Group recognises service costs within administrative expenses in profit or loss. The net interest expense or income is recognised in finance costs or income. 3.8 Short-term employee benefitsA liability is recognised for benefits accruing to employees in respect of wages and salaries and annual leave in the period that the related service is rendered and in which the benefit is earned. Liabilities in respect of short-term employee benefits are recognised at the undiscounted amount of the benefits expected to be paid in exchange for the related service.3.9 Government grantsGovernment 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 systematic 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 8.3.10 TaxationThe 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 taxCurrent 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.

3.11 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.

3.12 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:
•
•
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.

leases of low value assets; and
leases with a term of 12 months or less.

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.

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 annumFINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
YEAR ENDED 31 MARCH 2022

3. Significant accounting policies (continued)
3.12 Leases (continued)
Lease liabilities (continued)
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.
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.

3.13 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 useful life
or residual value of an intangible asset, the amortisation charge is
revised prospectively to reflect the new estimates.

3.14 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.

•
•
•
•

•

3.15 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.
Contingent 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

Brands7% – 12% per annumCustomer and supplier relationships and other intangibles 7% – 25% per annumunits 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.

3.16 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.

3.17 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.

3.18 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 STATEMENTSNOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
YEAR ENDED 31 MARCH 2022

3. Significant accounting policies (continued)
3.18 Financial instruments (continued)
Financial liabilities (continued)
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.
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.
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.

•

3.19 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.
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 31.
72

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.

3.20 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. Market conditions are taken into account when estimating
the fair value. Details regarding the determination of the fair value of
equity-settled share-based transactions are set out in note 37.
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
probability of market conditions being met are not subsequently
adjusted for. 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.

3.21 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.
Cash flows in respect of the payment of lease liabilities are also
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.
The Group’s finance expenses include interest payable and
commitment fees on the unutilised portion of the Group’s finance facility.
Interest payable on loans and borrowings is therefore considered to be
in connection with obtaining financial resources and is presented within
cash flows from financing activities.
Interest on loans and borrowings , lease liabilities and deferred and
contingent consideration is presented on a separate line in financing
activities, within the Statement of Cash Flows. In the prior year, the
interest on lease liabilities and deferred and consideration was included
within the lease and deferred and contingent consideration payment
totals.

3.22 Alternative performance measures
Alternative performance measures (APMs) are disclosed within the
2022 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 Profit
Adjusted profit is defined as statutory profit adjusted for other items
that management does not consider to relate to its underlying
trading operations or for which separate disclosure would assist in
understanding the Group’s performance in the period. Further details
are provided in note 14.
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 or that do not directly relate to the Group’s
underlying trade. Such other items include acquisition and share
based payment related expenses. A reconciliation between adjusted
EBITDA and statutory profit before tax is included in note 6.
Adjusted basic and diluted 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.
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.
Joint ventures
Investments in joint ventures 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 joint venture. Judgement is required when assessing the substance
of the joint arrangement to determine whether it should be classified
as a joint venture or joint operation. This includes consideration
of whether the Group has the rights to the joint arrangement’s net
assets and whether decisions concerning the entity’s activities require
unanimous consent from those sharing the control.

Provisions
Provisions are a key area of the financial statements and are subject
to both judgement and estimation uncertainty. Defect provisions
are recognised for the potential rectification cost or claims made
in respect of products and services sold under warranty. Provision
is based on the potential claims that could be 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 31).
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.
Defined benefit pension
The Group acquired a defined benefit pension scheme during the
year and an insurance backed buy-in policy was incepted on 7 July
2021. Any defined benefit asset is recognised to the extent that
the asset will result in a refund or reduction in future payments.
Judgement is therefore required in determining whether the Group
has an unconditional right to a refund. Upon the winding up of the
pension scheme, any residual value would be payable to the Group.
The right to obtain a refund is not affected by future costs that could
change the amount of the surplus ultimately recovered. Therefore,
while the trustees could, at their discretion, enhance members'
benefits and reduce the surplus payable to the Group, this event is
not anticipated and would not remove the Group’s unconditional
right to the surplus. The Group therefore considers that is has an
unconditional right to a refund or reduction in future payments and
has recognised the defined benefit pension asset. Upon completion
of the buy-out process that was in progress at the reporting date,
the Group expects to receive any residual surplus and this will be
payable to the sellers of Taylor Maxwell Group (2017) Limited as
part of the consideration. Details of the defined benefit pension
scheme are disclosed in note 33.

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.
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

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

FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
YEAR ENDED 31 MARCH 2022

4. Critical accounting judgements and key sources of estimation uncertainty (continued)
Key sources of estimation uncertainty (continued)
Impairment of non-financial assets (continued)
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.
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.
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 26.
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 34.
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, for new leases acquired in the year. The Group estimates the rate by assessing the rates implied in similar
agreements and using observable inputs, such as market interest rates, when available.
Defined benefit pension
The determination of the Group’s defined benefit obligations depends on certain key assumptions, including the discount rate, inflation rate and life
expectancy of the members. The Group engages an experienced pension consultant to establish the value of its defined benefit obligations. The key
estimates and a sensitivity of the rates used are disclosed in note 33.

5. Revenue

The Group’s revenue is primarily 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, installation services and the transportation and distribution of building materials. Revenue by segment is included in note 6. Trade
receivables are disclosed in note 26.
Included within other payables is an amount of £1,314,000 (2021: £336,000) in relation to contract liabilities in respect of amounts paid 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 Group considers the CODM to be the senior
management team, including the Board of Directors, who are responsible for allocating resources and assessing performance of the operating
segments.
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 and joint ventures. This is the measure reported to the Board 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 within the Bricks and Building Materials segment below. £66,000 is included within revenue from
the sale of goods, with the balance arising from the rendering of services. All of the revenue generated in Other geographic locations is included
within revenue from the sale of goods within the Bricks and Building Materials segment.
Revenue from the rendering of services within the Bricks and Building Materials segment relates to the provision of transportation and distribution
services. Revenue from the rendering of services within the Heating, Plumbing and Joinery segment relates to the provision of flooring and solar panel
installation services.
Right of use assets, in respect of trailers, with a carrying value of £3,207,000 (2021: £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.
Included within revenue is a total of £nil (2021: £19,910,000) 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.

An analysis of the Group’s revenue, by type, is as follows:2022 £’0002021 £’000Sale of goods 482,669 165,471 Rendering of services 37,500 15,613 520,169 181,084 An analysis of the Group’s revenue, by geographic location, is as follows:2022 £’0002021 £’000UK 517,351 180,122 Europe 2,808 962 Other 10 - 520,169181,084FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
YEAR ENDED 31 MARCH 2022

6. Segmental analysis (continued)

2022

2021

Bricks and
Building
Materials
£’000

Roofing
Services
£’000

Heating,
Plumbing
and Joinery
£’000

Consoli-
dated
£’000

Bricks and
Building
Materials
£’000

Roofing
Services
£’000

Heating,
Plumbing
and Joinery
£’000

Consoli-
dated
£’000

Revenue from sale of goods

452,084

30,585

482,669

141,019

24,452

165,471

Revenue from rendering of services

Total revenue

EBITDA

Centralised costs

Profit/ (loss) on disposal of assets

Group adjusted EBITDA

Impairment of goodwill

Depreciation

Amortisation

Acquisition and re-financing expenses
Earn-out consideration classified as
remuneration under IFRS 3
Share based payment expense

Finance income

Finance expense

Share of results of associates

Share of results of joint ventures

Fair value gains and losses

Group profit before tax

10,180

462,264

33,083

21,179

3,022

6,141

37,500

3,187

36,726

520,169

144,206

7,203

43,308

11,662

12,426

2,571

(3,915)

39,468

(16)

(3,279)

(6,396)

(1,236)

(4,333)

(1,597)

(2,249)

(149)

(1,916)

18,406

15,613

24,452

181,084

5,766

19,999

(2,453)

(4)

17,542

(1,837)

(3,619)

(105)

(338)

(845)

(6)

360

11,165

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 those used primarily for corporate
purposes (head office), investments in associates, joint ventures 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. All liabilities are allocated to reportable
segments with the exception of those used primarily for corporate purposes (head office), bank borrowings and deferred tax liabilities.

2022

2021

Bricks and
Building
Materials
£’000

Roofing
Services
£’000

Heating,
Plumbing
and Joinery
£’000

Consoli-
dated
£’000

Non-current segment assets

108,897

30,221

42,678

181,796

155,844

8,626

19,740

184,210

Bricks and
Building
Materials
£’000

46,276

45,635

Roofing
Services
£’000

18,235

3,799

Heating,
Plumbing
and Joinery
£’000

29,867

12,582

Consoli-
dated
£’000

94,378

62,016

Current segment assets

Total segment assets

Investment in associates

Investment in joint ventures

Investments in financial assets

Deferred tax assets

Head office

Group assets

264,741

38,847

62,418

366,006

91,911

22,034

42,449

156,394

261

279

178

1,551

368,275

221

125

1,535

158,373

Total segment liabilities

(120,036)

6,571

(10,403)

(123,868)

(37,570)

(2,815)

(7,040)

(47,425)

Loans and borrowings (excluding
leases and overdrafts)
Deferred tax liabilities

Other unallocated central liabilities

Group liabilities

7. Other operating income

Rental income

Other

(24,240)

(17,427)

(48,256)

(213,791)

8. Profit before tax
Profit before tax is stated after charging/(crediting):

Amortisation of intangible assets

Impairment of goodwill

Depreciation of property, plant and equipment

Depreciation of right of use assets

(Gain)/ loss on disposal of property, plant and equipment and right of use assets

Cost of inventories recognised as an expense

Subcontractor costs

Impairment of trade receivables

Net foreign exchange gains

Government grant income

(15,750)

(5,301)

(4,463)

(72,939)

2021
£’000

3,619

726

1,111

134,691*

4,139

341

(173)

(1,360)

2022
£’000

127

227

354

2022
£’000

6,396

1,143

2,136

(75)

418,698

9,436

450

(32)

*Restated to include all inventory expenses as previously incorrectly excluded inventories delivered direct to site.
During the prior year, the Group received government grants in response to the global COVID-19 pandemic. The Group 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 related 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.

FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
YEAR ENDED 31 MARCH 2022

9. Auditor’s remuneration
During the year, the Group incurred the following costs for services provided by the Company’s Auditor:

Fees payable for audit services:

Audit of the company annual financial statements

Audit of the company’s subsidiaries

Total audit related fees

Fees payable for other services:

Other services

Total non-audit fees

Total auditors’ remuneration

2022
£’000

123

427

550

558

10. Staff numbers and costs
The average number of persons employed by the Company during the year amounted to nil (2021: nil).
The average number of persons employed by the Group during the year, including the Directors, amounted to:

2022
Number

180

260

604

2022
£’000

31,633

3,793

1,024

1,597

38,047

2022
£’000

1,847

Production staff

Distribution staff

Administrative staff

Management staff

Sales staff

Staff costs:

Wages and salaries

Social security costs

Other pension costs (note 33)

Share-based payments expense including NI (note 37)

Directors’ emoluments:

Remuneration

Pension contributions

The number of Directors who accrued benefits under company pension plans was a follows:

2021
£’000

159

196

202

2021
Number

165

328

2021
£’000

14,511

1,642

586

338

17,077

2021
£’000

1,081

1,102

2022Number2021NumberDefined contribution pension plans - 1 Remuneration of the highest paid Director in respect of qualifying services was:

Remuneration

Pension contributions

2022
£’000

904

Full details of Directors’ remuneration is included within the Report of the Remuneration Committee on pages 44 to 48.

11. Finance income

Interest on cash and cash equivalents

Other interest receivable

12. Finance expense

Interest on bank loans and overdrafts
Interest on lease liabilities
Unwinding of discount on contingent consideration
Other interest payable

13. Fair value gains and losses

(Loss)/ Gain on re-measurement of contingent consideration (notes 21 & 34)

2022
£’000

779
532
938
-
2,249

2022
£’000

(1,916)

2021
£’000

636

2021
£’000

360
354
127
4
845

2021
£’000

360

FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
YEAR ENDED 31 MARCH 2022

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.
Other items represent those costs that are considered non-operational in nature and are as follows:

Amortisation of intangible assets (note 19)

Impairment of goodwill (note 19)

Total depreciation and amortisation

Acquisition costs

Re-financing costs

Earn-out consideration classified as remuneration under IFRS 3

Share-based payment expense (including employer NI)

Total other administrative expenses

Unwinding of discount on contingent consideration (note 12)

Total finance expense

Share of post-tax profit/ (loss) of equity accounted associates (note 22)

Fair value (losses)/gains (note 13)

Total other items before tax

Tax on other items

Total other items after tax

Other comprehensive income

Remeasurements of defined benefit pension schemes

Deferred tax on remeasurement of defined benefit pension schemes

Fair value gain on investments in equity instruments designated as FVTOCI

Total other comprehensive income

Total other items in comprehensive income

2022
£’000

(6,333)

(16)

(6,349)

(1,139)

(97)

(4,333)

(1,597)

(7,166)

(938)

(1,916)

(16,314)

391

(15,923)

(1,970)

374

(1,543)

(17,466)

2021
£’000
(3,619)

(3,619)

(105)

(338)

(443)

(127)

(6)

360

(3,835)

687

(3,148)

The amortisation of intangibles within other items is the element associated with those intangibles recognised on acquisition as part of the fair value
assessment. Significant changes in the fair value and discounting of contingent consideration also does not necessarily directly reflect the underlying
trade of the Group. Inclusion within other items is consistent with the presentation of other acquisition related costs.
Acquisition costs comprise of transaction costs of £383,000, in relation to stamp duty, plus a further £756,000 in respect of legal and professional
fees. £1,060,000 was directly associated with the acquisitions in the year (note 21), while the remainder related to aborted acquisitions.
To facilitate the acquisition of Taylor Maxwell Group (2017) Limited in the year, the Group re-financed and agreed an increase in its available
banking facilities, The re-financing costs directly associated with this are therefore considered to be connected with the acquisition and outside the
normal course of business.
The agreement to purchase Taylor Maxwell Group (2017) Limited includes earn-out consideration, payable if certain performance-based targets
are met over the following three years. The share purchase agreement also includes a ‘bad leaver’ clause, under which the earn-out consideration
payment to such a leaver is forfeited. The clause was included with the intention of protecting the value of the business over the first few years
following acquisition. However, as a result of the earn-out consideration effectively being contingent on the continued employment or ‘good leaver’
status of the individual, the amount payable has been treated as remuneration in accordance with current IFRS interpretation guidance of IFRS 3.
As such, the amount payable is considered significant in nature and not reflective of the underlying trade of the Group.
The share-based payment expense represents the share-based payment charge for the year, including associated accrued employer taxes. The
accounting charge is not considered to be directly linked to the Group’s trading operations and thus separate disclosure is deemed appropriate to
assist with the understanding of the Group’s performance in the year.
The Group is not directly involved in the day to day operations of its associate and thus considers it appropriate to separate its share of this entity’s’
results from the Group’s adjusted results.
The tax credit arising on the other items is presented on the same basis as the cost to which it relates.
Other comprehensive income relates to the remeasurement of defined pension schemes, the associated deferred tax movement and the fair value
gain on investments in equity instruments designated as fair value through other comprehensive income.
In respect of the defined benefit pension scheme acquired in the year, the Group has entered into a buy-in insurance policy and intends to complete
a buy-out process, whereby the defined benefit pension liability is transferred to an insurer. As such, the scheme related remeasurement and
deferred tax movements are not considered to be part of the Group’s underlying operations and have been reported separately from the Group’s
adjusted results. Further details of the scheme are disclosed in note 33.
The fair value change in investments in equity instruments designated as fair value through other comprehensive income is also not reflective of the
Group’s underlying trading performance and thus is not included in the Group’s adjusted comprehensive income.

FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
YEAR ENDED 31 MARCH 2022

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

2022
£’000

6,730

(286)

6,444

(341)

6,103

2021
£’000

2,851

(720)

2,131

(625)

1,506

Reconciliation of tax expense
The standard rate of corporation tax in the UK is 19% (2021: 19%). The charge for the year can be reconciled, to the standard rate applied to
the profit before tax, as follows:

Profit on ordinary activities before taxation

Tax on profit on ordinary activities at standard rate

Adjustments to current tax charge in respect of prior periods

Adjustments to deferred tax charge in respect of prior periods

Effect of expenses not deductible for tax purposes

Effect of capital allowances and depreciation

Effect of changes in UK tax rates

Effect of utilisation of tax losses

Tax on profit

2022
£’000

18,406

3,497

(286)

1,676

(64)

1,211

6,103

2021
£’000

11,165

2,121

(720)

(15)

1,506

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 substantively enacted during the year. Deferred tax assets and liabilities, previously recognised at 19%, have been
remeasured at 25%. This change resulted in an increase of £1,211,000 in the deferred tax liability recognised at 31 March 2022.

16. Dividends

Amounts recognised as distributions to equity holders in the year:

Final dividend for the year ended 31 March 2021 of 1.0850p per share
(2021: for the year ended 31 March 2020 of 1.0850p per share)
Interim dividend for the year ended 31 March 2022 of 0.9600p per share
(2021: for the year ended 31 March 2021 of 0.8678p per share)
Total dividends paid in the year

2022
£’000

3,236

2,866

6,102

2021
£’000

2,500

2,000

4,500

The Directors recommend that a final dividend for 2022 of 2.04p (2021: 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 close of
business on 26 August 2022. This dividend has not been included as a liability in these financial statements.

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 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 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.
The calculation of basic and diluted earnings per share is based on the following data:

2022

Weighted
average
number of
shares

Earnings
£’000

Earnings
per share
(p)

Earnings
£’000

2021

Weighted
average
number of
shares

Earnings
per share
(p)

12,387

281,474,903

4.40

9,665

230,458,821

4.19

5,512,650

12,387

286,987,553

4.32

9,665

629,983

231,088,804

4.18

Basic earnings per share

Effect of dilutive securities

Employee share options

Diluted earnings per share

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. 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.

2022

Weighted
average
number of
shares

Earnings
per share
(p)

Earnings
£’000

Adjusted basic earnings per share

28,310

281,474,903

10.06

2021

Weighted
average
number of
shares

Earnings
per share
(p)

230,458,821

5.56

Earnings
£’000

12,813

Effect of dilutive securities

Employee share options

5,512,650

Adjusted diluted earnings per share

28,310

286,987,553

9.86

12,813

629,983

231,088,804

5.54

FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
YEAR ENDED 31 MARCH 2022

18. Property, plant and equipmentGroupLand and buildings£’000Plant and machinery£’000Fixtures, fittings and equipment£’000Motor vehicles£’000Total£’000CostAt 1 April 20203,4836973717545,305Additions5,0601023091985,669Acquisition through business combinations - 49 - 13Transferred from right of use assets - - - 127127Disposals - (14) - (115) (129) At 31 March 20218,54378968996410,985Additions 5,086 329 229 673 6,317 Acquisition through business combinations 3,156 425 278 513 4,372 Disposals - (9) (2) (290) (301) At 31 March 202216,7851,5341,1941,86021,373DepreciationAt 1 April 2020460264174234 1,132 Charge for the year30513593193 726 Transferred from right of use assets - - - 60 60 On disposals - (4) - (55) (59) At 31 March 20217653962674321,860Charge for the year 422 200 248 273 1,143 On disposals - (9) - (175) (184) At 31 March 20221,1875865155302,818Net book valueAt 31 March 202215,5989486791,33018,555At 31 March 20217,7783934225329,125Included within land and buildings is freehold land amounting to £1,113,000 (2021: £1,113,000) which is not depreciated.Property, plant and equipment with a carrying value of £17,715,000 (2021: £7,920,000) is pledged as security for the Group’s bank loan.CompanyLand and buildings£’000CostAt 1 April 2020 and 31 March 2021 - Additions531At 31 March 2022531DepreciationAt 1 April 2020 and 31 March 2021 - Charge for the year - At 31 March 2022 - Net book valueAt 31 March 2022531At 31 March 2021 - The Company’s properties within land and buildings were purchased at the end of the year and have therefore not incurred a depreciation charge in the current financial year.19. Intangible assets

Cost or valuation
At 1 April 2020
Additions
Acquisition through business combinations
Disposals
At 31 March 2021
Additions
Acquisition through business combinations
Disposals
At 31 March 2022
Amortisation and impairment
At 1 April 2020
Charge for the year
Impairment
At 31 March 2021
Charge for the year
Impairment
On disposals
At 31 March 2022
Net book value
At 31 March 2022
At 31 March 2021

The Company has no intangible assets.

Customer & supplier
relationships and
other intangibles
£’000

26,535
-
1,489
-
28,024
488
35,510
-
64,022

4,641
2,813
-
7,454
4,837
-
-
12,291

51,731
20,570

Goodwill
£’000

49,462
-
507
-
49,969
-
29,468
-
79,437

16
-
-
16
-
16
-
32

79,405
49,953

Brands
£’000

7,915
-
421
-
8,336
-
14,683
-
23,019

1,205
806
-
2,011
1,559
-
-
3,570

19,449
6,325

Total
£’000

83,912
-
2,417
-
86,329
488
79,661
-
166,478

5,862
3,619
-
9,481
6,396
16
-
15,893

150,585
76,848

Goodwill is reviewed annually for impairment. While the residual risk to the Group from the COVID-19 pandemic is considered minimal, the market
is still volatile, which could give rise to an indication of potential impairment as outlined within the key sources of estimation uncertainty in note 4 of
the financial statements. 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.

The carrying amount of goodwill and impairment losses by segment are as follows:

At 1 April 2020
Recognised on acquisitions
At 31 March 2021
Recognised on acquisitions
Impairment
At 31 March 2022

Bricks and Building
Materials
£’000

Roofing Services
£’000

Heating, Plumbing
and Joinery
£’000

24,323
388
24,711
11,437
(16)
36,132

12,299
-
12,299
9,497
-
21,796

12,824
119
12,943
8,534
-
21,477

Total
£’000

49,446
507
49,953
29,468
(16)
79,405

Impairment losses regarding goodwill are included within the depreciation and amortisation expense in the Statement of Profit or Loss.

FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
YEAR ENDED 31 MARCH 2022

19. Intangible assets (continued)
The carrying amount of goodwill is allocated to CGUs as follows:

Brick-ability trading group

PVH trading group

HHG trading group

Taylor Maxwell trading group

HBS NE

Other CGUs

Total

2022
£’000

12,845

16,399

12,690

11,437

8,534

17,500

79,405

2021
£’000

12,845

16,399

12,690
-
-

8,019

49,953

The goodwill allocated to the Brick-ability trading group, PVH trading group, HHG trading group, Taylor Maxwell trading group and HBS NE
CGUs is considered significant in comparison with the Group’s total carrying amount of goodwill. CGUs within the Other CGU category represent
between 0.02% and 7.51% of the total goodwill and relate to the business operations of entities acquired during the current and previous years.
The Group estimates the recoverable amount of each CGU using 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 assumptions underpinning the recoverable amounts of the CGUs tested for impairment are
forecast revenues and EBITDA and the discount rate applied.
Revenue and EBITDA forecast in the impairment models are based on management’s past experience and future expectations of performance.
The projections also consider the ongoing uncertainty in the market, with assumptions for future trade supported by actual trends and previous
performance. For each CGU, a growth rate of 2% (2021: 2%) is used to extrapolate cash flow projections beyond the three year period covered
by the most recent forecasts. This rate does not exceed the average long-term growth rate for the relevant markets. The rates used to discount the
forecast cash flows are 11.75% – 23.60% (2021: 10.00-12.60%) derived from the CGU’s weighted average cost of capital (WACC).
The impairment loss of £16,000 (2021: £nil) 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 that subsidiary and acquisition of the business previously operating as a partnership. Given the
age of the goodwill asset, management no longer consider that economic benefits generated by that subsidiary are attributable to this asset. Its
carrying amount has therefore been written down to £nil, based on its value in use.
The total recoverable amount in respect of goodwill arising on consolidation, other intangibles and other non-financial assets, as assessed by
management using the above assumptions, is greater than the carrying amount. No further impairment loss has therefore been recorded, in either
the current or previous year. The projections used in the impairment reviews have also been sensitised. Given the level of headroom, management
currently consider that it is not reasonably possible for the assumptions to change so significantly as to eliminate the excess.

20. Subsidiaries
Company

Shares in group undertakings

Cost and carrying value

At 1 April

Additions

At 31 March

2022
£’000

6,542

51,030

57,572

2021
£’000

6,542

During the year, the company acquired 100% of the share capital and voting rights of Taylor Maxwell Group (2017) Limited and its subsidiaries.
An addition of £956,000 (2021: £nil) was also recognised in respect of the company issuing share options to employees of its subsidiaries, which
are the receiving entities of the associated employee services.

At the reporting date, the Company had the following subsidiary undertakings, all of which are included in these consolidated financial statements:

Country of operation
and incorporation

Class of
share held

Proportion of shares
held 2022

Proportion of shares
held 2021

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)

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)

Taylor Maxwell Group (2017) Limited (9)

Taylor Maxwell Group Limited (10)

Taylor Maxwell Holdings Limited (11)

Taylor, Maxwell & Co Limited (12)

Taylor Maxwell Timber Limited (13)

England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales

England and Wales

The Vobster Cast Stone Company Limited (12)

England and Wales

SBS Cladding Ltd (13)

Pacific Lumber Services (UK) Limited (14)

Timber Marketing Corporation Limited (14)

Taymax Independent Plywood Limited (14)

Michael Douglas & Co Limited (12)

England and Wales

Taylor Maxwell Timber Consolidated Limited (12)

England and Wales

Proctor & Lavender Brick Distributors Limited (13)

England and Wales

Taylor Maxwell Hardwoods Limited (12)

England and Wales

Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary

Ordinary

100%
100%
100%
100%
100%
100%

100%

75%

100%

100%
100%
100%
100%
100%
100%

100%

75%

FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
YEAR ENDED 31 MARCH 2022

Country of operation
and incorporation

Class of
share held

Proportion of shares
held 2022

Proportion of shares
held 2021

England and Wales

Ordinary

100%

20. Subsidiaries (continued)

Subsidiary

Taylor Maxwell (International) Limited (14)

Taymax Forest Products Limited (14)

Added Value Timber Products Limited (14)

Leadcraft Limited (1)

Rangeley Holdings Limited (1)

HBS NE Limited (1)

Whiffen Holdings Limited (1)

Beacon Roofing Limited (1)

(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.

(9) Wholly owned by Brickability Group PLC.

(10) Wholly owned by Taylor Maxwell Group (2017) Limited.

(11) Wholly owned by Taylor Maxwell Group Limited.

(12) Wholly owned by Taylor Maxwell Holdings Limited.

(13) Wholly owned by Taylor, Maxwell & Co Limited.

(14) Wholly owned by Taylor Maxwell Timber Limited.

Forum Tiles Limited was incorporated in the prior year, 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
Plansure Building Products Limited
CPG Building Supplies Limited
The Brick Slip Business Limited
Brickmongers (Wessex) Ltd
Radiatorsonline.com Ltd
Frazer Simpson Limited
FSN Doors Limited
DSH Flooring Limited

10332050
10332505
07805178
02484708
09921801
06016447
02937329
09707800
06944174
10757797
06838234
07304174
08209834

Forum Tiles Limited
Crown Roofing (Centres) Limited
Taylor Maxwell Group (2017) Limited
Taylor Maxwell Group Limited
Taylor Maxwell Holdings Limited
The Vobster Cast Stone Company Limited
SBS Cladding Ltd
Leadcraft Limited
Rangeley Holdings Limited
HBS NE Limited
Whiffen Holdings Limited
Beacon Roofing Limited

13134891
02828966
10596770
05726000
01913316
00843928
07607128
03839874
10476725
13451727
07804032
02830038

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

Acquisition date

Company acquired

Taylor Maxwell Group (2017) Limited

Rangeley Holdings Limited and Leadcraft
Limited

30 June 2021

31 July 2021

HBS NE Limited

Whiffen Holdings Limited and
Beacon Roofing Limited

Acquisition date

23 November 2021

31 March 2022

The fair value of the assets acquired and liabilities assumed on acquisition are as follows:

Taylor Maxwell
Group
£’000

Rangeley Holdings
Group
£’000

HBS NE
Limited
£’000

Whiffen Holdings
Group
£’000

Property, plant and equipment
Right of use assets
Identifiable intangible assets
Inventory
Trade and other receivables
Employee benefit assets
Cash and cash equivalents
Trade and other payables
Current income tax
Lease liabilities
Provisions
Deferred tax
Total identifiable net assets
Goodwill
Total consideration
Satisfied by:
Cash paid
Shares issued as consideration
Deferred cash consideration
Contingent consideration (note 34)
Total consideration

3,519
2,977
42,099
9,126
63,940
2,855
2,586
(74,167)
(119)
(3,122)
(469)
(11,407)
37,818
11,437
49,255

38,114
10,000
1,141
-
49,255

128
133
1,782
13
778
-
94
(247)
(138)
(133)
-
(442)
1,968
3,529
5,497

3,532
-
1,243
722
5,497

16
-
6,312
109
853
-
1
(928)
(10)
-
-
(1,508)
4,845
8,534
13,379

3,276
-
34
10,069
13,379

709
-
-
45
2,476
-
741
(1,206)
(365)
-
(76)
(73)
2,251
5,968
8,219

5,371
-
1,676
1,172
8,219

Due to the timing of the acquisitions of Whiffen Holdings Limited and Beacon Roofing Limited, the initial accounting for these business
combinations is incomplete. A detailed assessment of the fair value of the contingent consideration and all identifiable net assets, and the value
of any uncollectible contractual cash flows, has not yet been completed at the date of these financial statements. The values reported above for
the Whiffen Holdings Group are therefore subject to change. The amounts included are based on management’s best estimate based on the
information available at the time of preparing these financial statements.
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.
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
Included in the consolidated financial statements are the following amounts of revenue and profit in respect of the subsidiaries acquired:

Revenue
Net profit

Taylor Maxwell
Group
£’000

Rangeley Holdings
Group
£’000

235,503
7,401

3,340
575

HBS NE
Limited
£’000

2,819
47

Whiffen Holdings
Group
£’000

-
-

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
£617,122,000 (2021: £185,840,000) and Group profit would have been £15,507,000 (2021: £10,006,000).

FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
YEAR ENDED 31 MARCH 2022

21. Business combinations (continued)

Acquisition related costs, included in administrative expenses (note 14), amounted to £1,060,000 in respect of the above acquisitions, as follows:

Acquisition costs

Taylor Maxwell
Group
£’000

Rangeley Holdings
Group
£’000

819

HBS NE
Limited
£’000

Whiffen Holdings
Group
£’000

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, with the exception of HBS NE Limited which is over five years.
The fair value of all contingent consideration is based on a discounting cash flow model, applying a discount rate of between 1.7% and 23.60% to
the expected future cash flows.
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.

Discount
rate

Fair value at
acquisition
£’000

Fair value at
reporting date
2022
£’000

Fair value at
reporting date 2021
£’000

Undiscounted
amount payable
2022
£’000

Undiscounted
amount payable
2021
£’000

Company
acquired

The Bespoke Brick
Company Limited

Brickmongers (Wessex)
Ltd

CPG Building Supplies
Limited

U Plastics Limited

Bathroom Barn Limited

McCann Logistics Ltd

Taylor Maxwell Group
(2017) Limited

SBS Cladding Limited

Leadcraft Limited

HBS NE Limited

4.9%

4.8%

4.0%

3.5%

1.7%

4.1%

10.4%

138

(201)

2,208

231

889

1,845

722

16.1% - 23.6%

10,069

Beacon Roofing Limited

4.1%

1,172

675

2,092

166

1,597

422

1,804

795

10,770

1,172

2,270

241

931

686

2,164

170

1,628

435

1,900

1,028

22,188

1,295

2,400

248

958

The total potential undiscounted amount payable in respect of U Plastics Limited ranges from £246,000 to £2,400,000 (2021: £246,000 to
£2,400,000). The amount payable for SBS Cladding Limited ranges from £nil to £2,000,000. It is not possible to determine a range of outcomes for
the other companies acquired as the arrangements do not contain a maximum payable.
The acquisition of Taylor Maxwell Group (2017) Limited is also subject to further payments depending on future performance, ranging from £nil to
£13,000,000, over the three years following acquisition. Based on current interpretation guidance concerning contingent payments to employees
under IFRS 3, the earn-out amounts payable are recognised in profit or loss over the earn-out period as remuneration costs. This is due to the
inclusion of a ‘bad leaver’ clause in the share purchase agreement, under which the earn-out consideration payment is forfeited. The earn-out
consideration is therefore deemed to effectively be contingent on the continued employment of the seller and the seller not being considered a
‘bad leaver’. The anticipated total amount payable, however, is not expected to change due to other clauses and payment terms within the share
purchase agreement. As outlined in note 14, a charge of £4,333,000 has been recognised in the year in respect of this earn-out consideration,
presented within other administrative expenses.
A sensitivity in respect of the inputs into the discounted cash flow model, determining the contingent consideration, is outlined in note 34.

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

Interest in associates

At 1 April

Dividends received from associates

Share of profit or (loss)

Disposals

At 31 March

Country of operation
and incorporation

England and Wales

Class of
share held

Ordinary

Proportion of shares held

50%

2022
£’000

221

(15)

-
261

2022
£’000

-
55

2021
£’000

352

(6)

(125)
221

2021
£’000

(6)

-
(6)

Aggregate information of associates that are not individually material

Group’s share of profit or (loss) from continuing operations

Group’s share of other comprehensive income

Group’s share of total comprehensive income

During the prior 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 was therefore disposed of and the investment is now classified as an investment in a financial asset (see note 24).
Investments in associates are not attributed to the Group’s reportable segments. No impairment loss has been recognised in either the current or
prior year.

23. Joint Ventures

At the reporting date, the Group had the following associated undertaking, which is included in the consolidated financial statements using the
equity method:

Associate

Schermbecker Building Products GmbH

Country of operation
and incorporation

Germany

Class of
share held

Ordinary

Proportion of shares held

50%

During the year, the Group acquired 50% of the share capital in Schermbecker Building Products GmbH, a tile manufacturer in Germany. The
joint venture company was not fully trading at the reporting date and has incurred only a nominal level of set up costs thus far. It is not currently
considered material to the group.

Interest in joint ventures

At 1 April

Additions

Share of loss

At 31 March

Aggregate information of joint ventures are not individually material

Group’s share of loss from continuing operations

Group’s share of other comprehensive income

Group’s share of total comprehensive income

2022
£’000

428

(149)

279

2022
£’000

(149)

-
(149)

2021
£’000

-
-

FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
YEAR ENDED 31 MARCH 2022

24. Investments

Investments in equity instruments at fair value through other comprehensive income

Non-current

At 1 April

Additions

Change in fair value recognised in OCI

At 31 March

2022
£’000

125

178

2021
£’000

125

During the prior 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 was therefore re-classified as an investment, measured at fair value through other comprehensive income.
The equity investments are not held for trading and thus the Group 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.
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.

25. Inventories

Goods for resale

26. Trade and other receivables

Current

Trade receivables

Less allowance for expected credit loss

Amounts owed by group undertakings

Prepayments and accrued income

Directors’ loan accounts

Other receivables

Non-current

Trade receivables

Amounts owed by group undertakings

Other receivables

Group

Company

2022
£’000

28,120

2021
£’000

12,127

2022
£’000

2021
£’000

Group

Company

2022
£’000

123,263

(854)

122,409

6,242

2,551

131,202

1,023

2021
£’000

38,553

(358)

38,195

2,651

978

1,008

42,832

460

2022
£’000

3,066

105

3,171

116,883

2021
(Restated)
£’000

2,874

72,608

9,343

81,951

132,225
Non-current trade receivables for the Group relate to retentions payable after one year, in connection with contracting services.
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.

120,054

84,825

43,292

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’s ECL rate has fallen following a strong recovery after the COVID-19 pandemic. The forward looking estimates applied have considered
the ongoing impact of economic challenges and the potential future risk of loss.
The Group maintains credit insurance for its main customers within the Bricks and Building Materials segment, which will mitigate some of this risk.
Details of the Group’s credit exposure is included in note 34.
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.

31-Mar-22

Expected credit loss rate

Gross carrying amount

Expected credit loss

31-Mar-21

Expected credit loss rate

Gross carrying amount

Expected credit loss

Trade Receivables
Days past due

< 30 days
£’000

30-60 days
£’000

61-90 days
£’000

0.10%

39,465
38

0.92%

6,077
56

8.26%

2,204
182

>91 days
£’000

15.69%

3,371
529

Trade Receivables
Days past due

< 30 days
£’000

30-60 days
£’000

61-90 days
£’000

>91 days
£’000

0.27%

10,370
28

1.43%

1,888
27

9.20%

718
66

16.18%

1,214
197

Current
£’000

0.07%

73,169
49

Current
£’000

0.16%

24,823
40

Movement in the allowance for expected credit losses

Balance at the beginning of the year

Increase in loss allowance arising from acquisitions

Impairment losses recognised

Amounts written off as uncollectible

2022
£’000

358

402

450

(356)

854

Total
£’000

124,286
854

Total
£’000

39,013
358

2021
£’000

592

341

(575)

358

Company
In the prior year, other receivables for the Company related to loan notes receivable. The balance was due on the 10th anniversary of the loan note
instrument and was receivable from 6 March 2028. However, these were settled during the year. Interest, accrued at 9.5% per annum up until IPO,
was receivable when the loan notes were repaid.
Restatement of Company balances
An adjustment has been made to the presentation of non-current and current trade and other receivables in the prior year. All receivables due
from group undertakings were classified as current as they were repayable on demand. While the balances remain repayable on demand, the
expectation is that they would be realised more than 12 months from the reporting date. Consequently, a proportion of the balance should have
been classified as non-current, in accordance with IAS 1.66. This proportion has therefore been restated and presented as non-current in the
comparative figures.
The impact of the restatement has been to increase non-current trade and other receivables by £72,608,000, with a corresponding decrease in
current trade and other receivables. There has been no impact on the reported profit or total equity for the Company.

FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
YEAR ENDED 31 MARCH 2022

27. Cash and cash equivalents

Cash and cash equivalents

Group

Company

2022
£’000

25,028

2021
£’000

8,592

2022
£’000

372

2021
£’000

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.

28. 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

Accruals and deferred income

Deferred and contingent consideration

Group

Company

2022
£’000

92,839

24,378

9,810

6,544

6,475

140,046

342

17,375

17,717

157,763

2021
£’000

27,481

5,869

3,388

1,372

659

38,769

3,153

41,922

2022
£’000

10,926

1,122

1,563

4,333

17,950

108

2021
£’000

9,925

159

10,084

18,058

10,084

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 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.

29. Loans and borrowings

Non-current

Bank loans

Group

Company

2022
£’000

24,240

2021
£’000

15,750

2022
£’000

24,240

2021
£’000

15,750

The Directors consider that the carrying amount of loans and borrowings approximates to their fair value.
The Group has a revolving credit facility of £60,000,000, including an ancillary carve out of a £5,000,000 overdraft. The facility runs for three
years to June 2024, with the option of two one-year extensions. The revolving facility bears interest at a variable rate based on the SONIA. At the
reporting date, interest was charged at a rate of 1.9% above the adjusted SONIA interest rate benchmark.
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 by certain trading subsidiaries.

30. Leases
Group as lessee
Right of use assets

Cost

At 1 April 2020

Additions

Acquisition through business combinations

Transferred to property, plant and equipment

Disposals

At 31 March 2021

Additions

Acquisition through business combinations

Disposals

At 31 March 2022

Depreciation

At 1 April 2020

Charge for the year

Transferred to property, plant and equipment

Depreciation on disposals

At 31 March 2021

Charge for the year

Depreciation on disposals

At 31 March 2022

Carrying value

At 31 March 2022

At 31 March 2021

Lease liabilities

At 1 April 2020

Additions

Acquisition through business combinations

Interest expense

Lease payments

Foreign exchange losses

At 31 March 2021

Additions

Acquisition through business combinations

Interest expense

Lease payments

Foreign exchange losses

Disposals

At 31 March 2022

Land and buildings
£’000

Plant and vehicles
£’000

Equipment
£’000

6,371

534

287

7,192

387

3,031

(94)

10,516

829

631

1,460

1,024

(5)

2,479

8,037

5,732

996

125

1,765

(127)

(122)

2,637

2,939

(83)

5,572

262

452

(60)

(121)

533

1,080

(83)

1,530

4,042

2,104

143

181

187

104

109

Land and buildings
£’000

Plant and vehicles
£’000

Equipment
£’000

5,850

543

287

296

(871)

6,105

387

3,175

375

(1,395)

(94)

8,553

628

125

1,765

(494)

2,077

2,939

151

(1,204)

(50)

3,993

100

(33)

111

(36)

Total
£’000

7,510

693

2,056

(127)

(122)

10,010

3,332

3,110

(177)

16,275

1,135

1,111

(60)

(121)

2,065

2,136

(88)

4,113

12,162

7,945

Total
£’000

6,578

702

2,056

354

(1,398)

8,293

3,332

3,255

532

(2,635)

(50)

(94)

12,633

FINANCIAL STATEMENTS30. Leases (continued)
Maturity analysis

Due within 1 year

Due between 1 and 5 years

Due after 5 years

2022
£’000

2,216

5,512

4,905

12,633

2021
£’000

1,497

2,688

4,108

8,293

The undiscounted maturity analysis in respect of lease payments is disclosed in note 34.
Included within administration expenses within the Consolidated Statement of Profit or Loss is an amount of £167,000 (2021: £117,000) in respect
of short-term leases and an amount of £8,000 (2021: £6,000) in respect of low value asset leases.
During the prior 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

2022
£’000

127

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.

2022
£’000

109

252

361

2021
£’000

119

351

470

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)YEAR ENDED 31 MARCH 202297

31. ProvisionsGroupDefect provisions£’000Dilapidation provisions£’000Total£’000At 1 April 20201,389 - 1,389Additions209 - 209Utilised in the year(62) - (62) Unused amounts reversed(289) - (289) At 31 March 20211,247 - 1,247Additions 75 - 75 Acquired through business combinations 76 469 545 Utilised in the year(20) - (20) Unused amounts reversed(119) - (119) At 31 March 20221,2594691,728The Company does not have any provisions.Defect provisionsA 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. 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 provisionsProvision is 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 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 lease32. Deferred taxGroupThe 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£’000Total£’000At 1 April 2020(209) (5,217) (5,426) Credited to profit or loss 65 560 625 Acquired through business combinations(1) (401) (402) At 31 March 2021(145) (5,058) (5,203) (Charged)/ credited to profit or loss(195) 536 341 Credited to other comprehensive income - 374 374 Credited directly to equity - 491 491 Acquired through business combinations(214) (13,216) (13,430) At 31 March 2022(554)(16,873)(17,427)FINANCIAL STATEMENTS32. Deferred tax (continued)
The credit to the consolidated profit or loss account in the year, of £341,000, includes a charge of £1,211,000 following the announcement that
the main rate of corporation tax in the United Kingdom would increase from 19% to 25%, with effect from April 2023. As the rate change was
substantively enacted at the reporting date, deferred tax assets and liabilities, previously recognised at 19%, have been remeasured at 25%.

Company

At 1 April 2020 and 31 March 2021

Credited to profit or loss

Credited directly to equity

At 31 March 2022

Other temporary
differences
£’000

101

186

Deferred tax assets and liabilities are presented in the Consolidated Balance Sheet and Company Balance Sheet as follows:

Deferred tax assets

Deferred tax liabilities

Group

Company

2022
£’000

(17,427)

2021
£’000

(5,301)

(5,203)

2022
£’000

186

Total
£’000

101

186

2021
£’000

At the reporting date, the Group had no unused tax losses (2021: £nil), available for offset against future profits, where deferred tax assets have not
been provided.

33. Pensions
Defined contribution plans
The total expense recognised in profit or loss in relation to contributions payable under defined contribution pension plans is £1,020,000 (2021:
£586,000).
At the reporting date, contributions of £104,000 (2021: £75,000) due in respect of the reporting period had not yet been paid over to the pension
provider.

Defined benefit plans
On 30 June 2021, the Group acquired Taylor Maxwell Group (2017) Limited, which operated a defined benefit pension scheme. The Group
therefore also acquired the Taylor Maxwell Group Limited Pension and Assurance Scheme which is funded by the payment of contributions to a
separately administered trust fund. The defined benefit pension scheme is closed to future accrual. Pension benefits are related to the members’
final salary at retirement (or earlier date of leaving or death) and their length of service.
The scheme is a registered scheme under UK legislation and is subject to scheme funding requirements. It was established under trust and is
governed by the scheme’s Third Definitive Trust Deed and Rules, dated 20 September 2016. The trustees are responsible for the operation and
governance of the scheme, including making decisions regarding the scheme’s funding and investment strategy, in conjunction with the Group.
During the year, the Group made contributions of £nil (2021 - £nil) to the scheme. Contributions in the next year are also expected to be £nil.
The most recent actuarial valuation was conducted as at 31 March 2018.
The Group commenced a buy-out process to transfer the risk associated with the scheme to an insurer. As part of this process, a buy-in contract
was incepted on 7 July 2021 to meet the future benefits payable and reduce the risk of additional funding being required from the Group. The full
process is expected to reach the buy-out stage by September 2022.
A full actuarial valuation has been carried out at 31 March 2022, based on scheme membership data as at 28 February 2021, by a qualified
independent actuary. Scheme assets are stated at their current bid price at 31 March 2022.

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)YEAR ENDED 31 MARCH 2022The principal assumptions used for the purposes of the actuarial valuations, on acquisition and at the reporting date, were as follows:

31 March 2022

30 June 2021

Discount rate

Inflation rate (CPI)

Pension increases (Post 1988 GMP)

Pension increases (Post 1997 pension)

Longevity at retirement age for current pensioners
Male

Female

Longevity at retirement age for future pensioners
Male

Female

Amounts recognised in profit or loss in respect of the defined benefit plan are as follows:

Service cost

Net interest expense

Included in profit or loss

2.60%

3.60%

2.80%

3.60%

22.0 years

24.3 years

23.4 years

25.8 years

2022
£’000

140

(36)

104

1.70%

2.90%

2.50%

2.90%

21.9 years

24.3 years

23.3 years

25.7 years

2021
£’000

The service cost has been included in profit or loss within administrative expenses and the net interest expense within other interest receivable
(note 11). The re-measurement of the net defined benefit asset is included in other comprehensive income.
Amounts recognised in other comprehensive income, in respect of the defined benefit plan, are as follows:

Re-measurement (gain)/ loss arising from:

Financial assumptions

Experience assumptions

Return on assets, excluding interest income

Included in other comprehensive income

Reconciliation of defined benefit obligation and fair value of scheme assets

2022
£’000

(637)

2,545

1,970

2021
£’000

At 1 April 2020 and 31 March 2021

Acquired through business combinations

Interest cost

Net re-measurement gains/(losses) – financial

Net re-measurement gains/(losses) – experience

Return on assets, excluding interest income

Benefits paid

Scheme administrative cost

At 31 March 2022

Defined benefit
obligation
£’000

Fair value of
scheme assets
£’000

Net defined
scheme asset
£’000

(10,210)

(127)

637

(62)

417

(9,345)

13,065

163

(2,545)

(417)

(140)

10,126

2,855

637

(62)

(2,545)

(140)

781

FINANCIAL STATEMENTS33. Pensions (continued)
Defined benefit plans (continued)
The weighted average duration of the scheme is 11.3 years.
Disaggregation of defined benefit scheme assets
The fair value of the scheme assets is analysed as follows:

Liability driven investments

Cash fund and net current assets

Insured annuities

Fair value of scheme assets

31 March 2022
£’000

30 June 2021
£’000

980

9,146

10,126

11,522

1,543

13,065

The scheme assets do not include any of the Group’s own financial instruments or any property occupied by the Group.

Risks
The scheme exposes the Group to actuarial risk, such as market (investment) risk, interest rate risk, inflation risk, currency risk and longevity risk.
The key risks are considered to be life expectancy and inflation risk. The scheme’s obligation is to provide a pension for the life of the member, As the
life expectancy increases, the value of the scheme’s liabilities would also increase. The benefit obligations are also linked to inflation. Higher inflation
would therefore result in an increase in the scheme’s liabilities.
However, following the purchase of a buy-in insurance policy, many of the risks associated with future pension obligations are transferred to the
insurer under the policy. The scheme does not expose the Group to any unusual scheme specific or group specific risks.
The value of the insured annuity policy is expected to equal the value of the liabilities, excluding any additional liability that may arise from
amending benefits for the impact of the recent Lloyds Banking Group high court ruling on GMP equalisation. The insured annuity policy therefore
provides a high level of protection against interest, inflation and mortality risks associated with the benefits. The cash holding is expected to be
sufficient to meet any additional GMP equalisation liabilities and future expenses of running the scheme.

Sensitivity
A sensitivity analysis has been determined based on reasonably possible changes the discount rate and, rate of inflation (CPI) and life expectancy, ,
with all other variables held constant. Increases in pension payments are derived from the assumed inflation rate.
If the discount rate were to decrease by 0.25%, the defined benefit scheme obligation would increase by £266,000. If the rate of inflation (CPI)
were to increase by 0.25%, the defined benefit scheme obligation would increase by £111,000. If the life expectancy were to increase by 1 year, the
defined benefit scheme obligation would increase by £437,000.

34. Financial instruments
The Group has the following financial assets and liabilities:

Financial assets

Financial assets measured at amortised cost

Cash and cash equivalents

Trade and other receivables

Total financial assets

2022
£’000

25,028

125,983

151,011

2021
£’000

8,592

40,642

49,234

100

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)YEAR ENDED 31 MARCH 2022Financial liabilities

Financial liabilities measured at amortised cost

Trade and other payables

Loans and borrowings

Lease liabilities

Financial liabilities measured at fair value through profit or loss

Contingent consideration

Total financial liabilities

2022
£’000

128,372

24,240

12,633

165,245

19,581

184,826

2021
£’000

35,092

15,750

8,293

59,135

3,442

62,577

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, deferred consideration 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 29.

The 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 2022 and 31 March 2021 are shown below:

Financial
instrument

Contingent
Consideration
in a business
combination
(note 21)

Valuation
technique

Significant
Unobservable inputs

Range/
estimate

Sensitivity of the input to fair value

Present value
of future cash
flows

Assumed
probability-adjusted
EBITDA of acquired
entities.

2022:
£485,000 –
£55,468,000
2021:
£1,142,000 –
£3,852,000

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 £1,982,000. A 10% decrease in EBITDA would result in a
decrease in the liability of £2,282,000.
(2021: increase of £140,000 and decrease of £424,000)

Discount rate

2022: 1.7% - 23.6%

2021: 1.7% - 4.9%

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 £794,000. A 2% decrease in the rate would result
in an increase in the liability of £730,000.
(2021: decrease of £110,000 and increase of £108,000)

101

FINANCIAL STATEMENTS34. Financial instruments (continued)
Reconciliation of level 3 fair value measurements of financial instruments

At 1 April 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

Additions through business combinations

Finance expense charged to profit or loss

Settlement

Fair value losses recognised in profit or loss

At 31 March 2022

Contingent
consideration
£’000

(2,357)

(1,120)

(89)

(236)

360

(3,442)

(13,808)

(900)

485

(1,916)

(19,581)

Additions through business combinations include a balance of £1,845,000 in respect of an existing contingent consideration liability within Taylor
Maxwell Group (2017) Limited which was acquired during the year. This is included within the trade and other payable balance, of the net assets
acquired, for the Taylor Maxwell Group on acquisition in note 21.

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.
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.

Sterling

2022

2021

Change in rate

+1.0%

-1.0%

Effect on profit
before tax
£’000

(246)

246

Change
in rate

+0.25%

-0.25%

Effect on profit
before tax
£’000

(40)

The change in interest rate is based on the observable market environment.

102

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)YEAR ENDED 31 MARCH 2022Foreign currency risk
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 manage 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:

Euro

USD

Total

Assets

Liabilities

2022
£’000

740

100

840

2021
£’000

928

2022
£’000

7,767

7,770

2021
£’000

4,370

4,373

Foreign currency sensitivity analysis
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 and USD 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, 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.

Euro

USD

2022

2021

Effect on profit
and equity
before tax
£’000

639

(781)

(11)

Change in rate

10%

-10%

10%

-10%

Change in rate

10%

-10%

10%

-10%

Effect on profit
and equity
before tax
£’000

313

(382)

The change in exchange rate is based on management’s assessment of the reasonably possible change in foreign exchange rates.
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.

103

FINANCIAL STATEMENTS34. Financial instruments (continued)
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.

31-Mar-22

Non-derivative financial liabilities

Trade and other payables

Lease liabilities

Bank loans

Total financial liabilities

31-Mar-21

Non-derivative financial liabilities

Trade and other payables

Lease liabilities

Bank loans

Total financial liabilities

< 1 year
£’000

130,380

2,787

133,167

< 1 year
£’000

35,384

1,737

37,121

1 – 5 years
£’000

> 5 years
£’000

29,623

6,981

24,240

60,844

6,225

1 – 5 years
£’000

> 5 years
£’000

3,323

3,856

15,900

23,079

5,532

Total
£’000

160,003

15,993

24,240

200,236

Total
£’000

38,707

11,125

15,900

65,732

Capital risk management
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 ’Equity’ in the Balance Sheet. Debt comprises loans and borrowings and
lease liabilities.
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;
• 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.

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 Group’s gearing ratio at the reporting date is as follows:

Debt

Cash and cash equivalents

Net debt

Equity

Net debt to equity ratio

2022
£’000

36,873

(25,028)

11,845

2021
£’000

24,043

(8,592)

15,451

154,484

85,434

18%

Debt is defined as short and long-term loans and borrowings and lease liabilities, as detailed in notes 29 and 30. Equity includes all capital and reserves.
Credit risk and impairment
Credit risk refers to the risk that a counterparty will default on its contractual obligations, resulting in a financial loss to the Group. In order to minimise the
risk, the Group endeavours to only deal with companies which are demonstrably creditworthy. This, together with the aggregate financial exposure, is
continuously monitored; Credit approval processes are in place for new customers and regular reviews of credit limits carried out. Credit insurance is also
taken out where appropriate. Policies in place primarily cover customers within the Bricks and Building Materials segment.
The maximum exposure to credit risk is the carrying value of the Group’s financial assets, including trade and other receivables and cash and cash
equivalents. The Group does not consider 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 26.

104

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)YEAR ENDED 31 MARCH 2022

Credit risk on cash and cash equivalents is considered to be very low as the counterparties are all substantial banks with high credit ratings.
The Group does not hold any collateral or other credit enhancements to cover its credit risks associated with its financial assets.

35. Share capital

Issued and fully paid

Ordinary shares of £0.01 each

Group and Company

2022

2021

Number

£’000

Number

£’000

298,534,802

2,985

230,458,821

2,305

On 30 June 2021, the Company 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 £55,000,000 before the deduction of fees.
9,900,990 shares were also issued on 30 June 2021, as consideration equal to £10,000,000, for the acquisition of Taylor Maxwell Group (2017)
Limited.
On 22 October 2021,a further 280,254 ordinary shares of £0.01 each were issued upon the exercising of share options, for consideration of
£15,000.
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 37.

36. 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 37.

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 at 31 March 2021 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, the merger
reserve at 31 March 2021 represents the merger relief arising on a share for share exchange in which the Company previously acquired a subsidiary.

During the year, the Company acquired Taylor Maxwell Group (2017) Limited, for which an element of the consideration was settled in shares. Under
section 612 of the Companies Act 2006, merger relief applies when shares are issued, in exchange for obtaining the shareholding of another entity,
at a premium. The excess above the par value is allocated to a separate merger reserve. As such, £9,901,000 has been added to the Company and
Consolidated Merger Reserve during the year.

105

FINANCIAL STATEMENTS37. 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 CSOP share options outstanding during the year are as follows:

Outstanding at 1 April

Granted during the year

Forfeited during the year

Exercised during the year

Lapsed during the year

Outstanding at 31 March

Exercisable at 31 March

2022

2021

Number of share
options

Weighted average
exercise price
£

Number of share
options

Weighted average
exercise price
£

3,115,629

352,346

(50,145)

(31,160)

(4,010)

3,382,660

90,524

0.41

1.05

0.41

0.48

0.41

3,635,422

(519,793)

3,115,629

106,203

0.41

The options outstanding at the reporting date have an exercise price ranging between £0.41 and £1.05. The options have a remaining weighted
average contractual life of 7.58 years (2021: 8.33 years).
Options were granted under the CSOP scheme on 21 October 2021. These options have an exercise price of £1.05 and are subject to 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% per
annum) of the relevant performance period (3 years ending 31 March 2024). There is no vesting is the relevant target is not met but a 25% vesting
if the initial 18% hurdle is met, with a proportionate additional vesting of up to 100% at the 30% threshold being met.
The aggregate of the estimated fair value of the options granted, under the CSOP scheme, during the year is £79,000 (2021: £nil). For options
granted during the year, the fair value in connection with the TSR awards was determined using a Monte Carlo model. The fair value of the EBITDA
awards was determined using a Black-Scholes model. The inputs to these models are as follows:

Weighted average share price

Weighted average exercise price

Expected volatility

Option life

Expected dividend yield

Risk free interest rate

2022

£1.05

38.5%

10 years

3.5%

1.2%

2021

Long Term Investment Plan (LTIP)
Options granted under the LTIP scheme 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% or 25% 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’.

106

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)YEAR ENDED 31 MARCH 2022Details of the share options outstanding during the year are as follows:

2022

2021

Number of share
options

Weighted average
exercise price
£

4,862,015

2,599,248

(367,114)

(249,095)

6,845,054

0.01

Number
of share
options

5,621,074

(498,189)

(260,870)

4,862,015

Weighted
average
exercise price
£

0.01

Outstanding at 1 April

Granted during the year

Forfeited during the year

Exercised during the year

Lapsed during the year

Outstanding at 31 March

Exercisable at 31 March

The options outstanding at the reporting date have an exercise price of £0.01 and a remaining weighted average contractual life of 8.87 years
(2021: 9.63 years).
Options were granted under the LTIP scheme on 4 June 2021 and 21 October 2021. In addition to the performance criteria outlined above,
these options are also subject to a two year holding period. The aggregate of the estimated fair value of the options granted during the year is
£1,705,000 (2021: £2,315,000). For options granted during the year, the fair value in connection with the TSR awards was determined using a
Monte Carlo model. The fair value of the EBITDA awards was determined using a Black-Scholes model. The weighted average inputs to these
models are as follows:

Weighted average share price

Weighted average exercise price

Expected volatility

Option life

Expected dividend yield

Risk free interest rate

Adjustment for holding period

2022

£1.04

£0.01

39.1%

10 years

3.5%

1.1%

10.0%

2021

£0.53

£0.01

25%

10 years

3.50%

0.39%

107

FINANCIAL STATEMENTS38. 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 2021
£’000

Financing
cash flows (1)
£’000

New leases
£’000

Acquisition of
subsidiaries
£’000

Changes in
fair value
£’000

Other
changes (2)
£’000

Non-cash changes

Bank borrowings (note 29)

Lease liabilities (note 30)

Deferred and contingent
consideration
Total liabilities from
financing activities

15,750

8,293

4,524

8,325

(2,103)

(1,358)

3,332

3,255

17,902

28,567

4,864

3,332

21,157

1,916

(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 foreign currency movements and right of use lease re-measurements.

Non-cash changes

31 March
2022
£’000

24,240

12,633

23,919

165

(144)

935

956

60,792

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

24,912

6,578

10,422

(9,190)

(1,398)

(7,883)

2,471

287

2,217

(360)

41,912

(18,471)

2,471

2,504

(360)

355

128

511

15,750

8,293

4,524

28,567

Bank borrowings (note 29)

Lease liabilities (note 30)

Deferred and contingent
consideration
Total liabilities from
financing activities

(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
During the year, the Company issued new shares for consideration of £55,000,000. Share issue costs of £2,287,000 were incurred in connection
with the placing of these new shares, with the fees deducted from the proceeds received by the Company.
The proceeds of £52,728,000 from the issue of ordinary shares, presented in the Consolidated Statement of Cash Flows is net of the share issue
costs. The full share proceeds and share issue costs are reported separately in the Consolidated and Company Statement of Changes in Equity.

108

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)YEAR ENDED 31 MARCH 202239. 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

2022
£’000

2021
£’000

978

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 repaid

Closing balance

£’000

978

(978)

The amounts previously 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 were unsecured, interest free and were 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 during the year.
Key management personnel

Key management personnel compensation

Short-term employee benefits

Post-employment benefits

Share-based payment expense

Termination benefits

2022
£’000

6,355

417

409

7,237

2021
£’000

3,219

3,390

Key management personnel consists of members on the Board of Directors and Group’s Management Board.
A finance expense of £nil (2021: £16,000) 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 £12,000 (2021: £13,000) to members of key management. A balance of nil (2021: £7,000)
was included within trade receivables at the reporting date, in respect of these sales.
A balance of £24,000 (2021: £nil) is included in other payables in respect of a deposit paid by a member of key management.
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

2022
£’000

2021
£’000

2022
£’000

104

2021
£’000

112

109

FINANCIAL STATEMENTS
39. Related party transactions (continued)
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

2022
£’000

2021
£’000

2022
£’000

512

219

731

2021
£’000

474

199

673

Other related parties comprise of entities owned by Directors or key management. Purchases relate to rent and administrative expenses.
A finance expense of £nil (2021: £21,000) was recognised in respect of the unwinding of the discount applied to deferred consideration due to close
relatives of key management.
Company
In accordance with the exemption under FRS 101, transactions and balances with wholly owned Group members and key management personnel
are not disclosed.
40. Post balance sheet events
On 29 April 2022, the Group and Company completed the purchase of a property for £980,000. A deposit of £94,000 was paid before the year
end and is included within land and building additions, in respect of this property.
On 31 May 2022, the Group completed the acquisition of the entire share capital and 100% of the voting rights in Modular Clay Products 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 presence in the specification market and further broaden the Group’s access to
manufacturers in the European market.
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

Cash and cash equivalents

Trade and other payables

Total identifiable net assets

£’000

164

2,894

4,205

(2,615)

4,664

Due to the timing of the acquisition, a detailed assessment of the fair value of the identifiable net assets, and value of any uncollectible 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

Contingent consideration

Total consideration

The above consideration is subject to post completion adjustments.

£’000

5,375

1,425

6,800

110

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)YEAR ENDED 31 MARCH 2022The 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 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 £100,000, 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.
On 7 July 2022, the Group and Company purchased a property for £2,521,000.

111

FINANCIAL STATEMENTSNOTES

112