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Annual Report
& Accounts
2023
INTRODUCTION
INDUSTRY-LEADING SPECIALISTS IN
ENGINEERING AND AGRICULTURE
OUR PURPOSE
We are committed to
optimising the value of
our assets, capitalising on
increasing global demand,
and advancing our clean
energy initiatives.
“The disposal of our Agricultural Supplies division has enabled
Carr’s to focus on its Speciality Agriculture and Engineering
divisions and made available funding for strategic growth and
investment, thereby enabling us to build upon our industry-leading
positions in these two higher margin divisions.”
David White
Chief Executive Officer
CORPORATE GOVERNANCE
46 Corporate Governance Report
67 Nomination Committee Report
72 Audit Committee Report
78 Remuneration Committee Report
103 Directors’ Report
STRATEGIC REPORT
01 Highlights
02 At a Glance
04 Chair’s Statement
08 Market Overview
10 Business Model
12
14 Chief Executive’s Review
16
18 Key Performance Indicators
20 Principal Risks and Uncertainties
24 Viability Statement
25 Responsible and Sustainable
Financial Review
Strategy
Business Report
38 TCFD Disclosures
45 Non-Financial & Sustainability
Information Statement
Carr's Group plc
| Annual Report & Accounts 2023
FINANCIAL STATEMENTS
109 Independent Auditor’s Report
121 Consolidated Income Statement
122 Consolidated Statement of
Comprehensive Income
123 Consolidated and Company
Balance Sheets
125 Consolidated Statement of Changes
in Equity
126 Company Statement of Changes
in Equity
127 Consolidated and Company
Statements of Cash Flows
128 Principal Accounting Policies
137 Notes to the Financial Statements
192 Five-Year Statement
194 Alternative Performance Measures
Glossary
196 Directory of Operations
197 Dormant subsidiaries at
2 September 2023
198 Registered Office and Advisers
01
2023 HIGHLIGHTS
REVENUE GROWTH DEMONSTRATES
RESILIENCE IN CHALLENGING MARKETS
FINANCIAL (CONTINUING OPERATIONS)
The sale of the Group’s Agricultural Supplies division completed on 26 October 2022. All commentary
and figures in this 2023 Annual Report and Accounts relate solely to continuing operations, except where
otherwise stated.
Revenue
Adjusted Operating Profit
Reported Operating Profit
+15.3%
£143.2m
-33.2%
£8.0m
Year end Engineering
order book
Adjusted Profit
Before Tax
+47.0%
£59.8m
-33.2%
£7.5m
-76.3%
£2.0m
Reported Profit
Before Tax
-80.1%
£1.5m
Dividend
Per Share
No movement on
prior year figure
5.2p
Adjusted Earnings
Per Share
Basic Earnings
Per Share
-38.0%
6.2p
-93.8%
0.4p
Carr's Group plc
| Annual Report & Accounts 2023
OverviewStrategic ReportCorporate GovernanceFinancial Statements 02
AT A GLANCE
AT A GLANCE
INDUSTRY-LEADING SPECIALISTS
Carr’s is an international leader in manufacturing value added products and
solutions, with market-leading brands and robust market positions in Agriculture and
Engineering, supplying customers around the world. Carr’s operates a business model
that empowers its operating subsidiaries enabling them to be competitive, agile, and
effective in their individual markets whilst setting overall standards and goals.
The sale of the Group’s Agricultural Supplies division completed on 26 October 2022.
All commentary and figures in this 2023 Annual Report and Accounts relate solely to
continuing operations, except where otherwise stated.
The Group is managed in two divisions:
SPECIALITY AGRICULTURE
The Speciality Agriculture
division manufactures
and supplies feed blocks,
minerals and boluses
containing trace elements
and minerals for livestock.
• 10 manufacturing sites across the UK,
USA and Europe
• Patented products and manufacturing
processes
• Research proven to add value
• Globally respected brands
Revenue
£92.6m
Adjusted
Operating
Profit
£5.6m
Reported
Operating
Profit
£2.3m
Carr's Group plc
| Annual Report & Accounts 2023
Speciality Agriculture
Locations
6 3 1
USA
UK
Germany
03
Agriculture and Energy represent
two of the world’s most challenging
industries in terms of impact on the
environment. Carr’s delivers products
and solutions that enable these
sectors to maximise the benefits of
their business activities, to address
long-standing sustainability issues,
and to mitigate adverse environmental
impacts.
ENGINEERING
The Engineering division
manufactures vessels,
precision components and
remote handling systems,
and provides specialist
engineering services, for
the nuclear, defence, and
oil and gas industries.
• 7 sites across the UK, USA and Europe
• Patented processes and innovative
solutions
• Customer-focused delivery
• Industry-leading accreditation and
quality assurance
• Global customer base
Revenue
£50.6m
Adjusted
Operating
Profit
£5.3m
Reported
Operating
Profit
£3.0m
Engineering Locations
2 4 1
USA
UK
Germany
Carr's Group plc
| Annual Report & Accounts 2023
OverviewStrategic ReportCorporate GovernanceFinancial Statements 04
CHAIR’S STATEMENT
WE INTEND TO FOCUS, IMPROVE,
AND DELIVER OPTIMAL
SHAREHOLDER VALUE THROUGH
EFFECTIVE LEADERSHIP
Review of the year
Since I became Chair in February 2023, I have seen first
hand the professionalism, focus and dedication of the
teams working hard to achieve the Group’s aims. Though
I joined at a difficult time, the Company having recently
disposed of its Agricultural Supplies division and suffering
a delayed audit which had caused its shares to be
suspended and a delay in payment of the final dividend,
I have a sense of renewed optimism and purpose.
Carr's Group plc
| Annual Report & Accounts 2023
05
In order to reduce administrative costs
and bring the Company in-line with the
majority of the stock market, the Board
is proposing to move to a twice-yearly
dividend payment – an initial interim
dividend anticipated to be declared at
the time of the Group’s interim results,
typically in April and payable in June,
and then a final dividend anticipated
to be declared at the time of the
Group’s preliminary results, typically
in December and payable following
approval at the Company’s Annual
General Meeting.
Strategy
The order book value is an encouraging
sign of the Engineering division’s
success and our attention will remain
focused on contracts with key
customers, pipeline opportunities
and on optimising our production
capacity across all locations. Efficiency,
sustainability, speed, and resource
allocation will remain key considerations
as we capitalise on this strong business,
and drive profitability.
The agricultural landscape requires
specific focus to take advantage of
available markets, product applications,
opportunities to move up the value
chain and to optimise productivity gains.
We are operating in a number of mature
markets with established competitors,
which means maintaining our market
share demands astuteness in branding,
pricing, innovation and business
development.
Our position in the agricultural and the
engineering markets aligns with our
Environmental, Social, and Governance
commitments and enables the Group
to seize opportunities in areas like clean
energy, global demand for sustainable
protein and emissions reduction. These
imperatives guide our path forward.
The order book for the Engineering
division is at an all-time high – some
47% up on this time last year; and the
pipeline of opportunities across our
portfolio is inspiring, both in home
and in overseas markets. Meanwhile,
the Speciality Agriculture businesses,
though facing the headwinds of drought
impacts in pasture-fed USA markets,
alongside the economic downturn
particularly impacting UK markets, have
strong brands, compelling intellectual
property and opportunities to penetrate
new markets, to enhance productivity
and to move up the value chain.
The leadership team to drive the
division’s dynamism and delivery
across these opportunities is coming
together at pace.
I have been able to visit our Ayr site,
which has established a very successful
reach particularly into Scottish markets
for Scotmin Nutrition, and our Silloth site.
Our customers recognise the quality
and value they get from our products
and Carr’s is proud that so many of
these customers see our products as
a staple to supporting their agricultural
businesses. We are particularly pleased
with the progress in manufacturing our
bolus, Tracesure™, at our Animax site
outside Bury St Edmunds. Automation
has been implemented, productivity
gains are, therefore, significant, whilst
product licensing approval has been
won for EU markets. Marketing and
technical support is now being rolled
out to drive market take-up of this
exciting product across the Group’s
ruminant animal businesses.
I have also had the opportunity to visit
the Sellafield nuclear site, and have
seen our contributions to the operations
in action – specialised fluidics pumps
that deal with nuclear slurry, robotic
arms to move nuclear materials safely,
precision engineered containers to store
and transport nuclear waste – allowing
me to better understand the breadth
and scale of Carr’s applications at this
location. Similarly, I had the privilege of
being invited to see the division’s work
at BAE’s submarine construction site at
Barrrow in Furness and, though I cannot
be specific about all that we do there, I
was extraordinarily impressed. Across at
North Shields I saw the contribution the
division makes to keeping the country’s
North Sea assets safe – our high-speed
manufacturing site there produces the
emergency shut-off devices that deploy
in the event that a well head needs to
be urgently shut down.
There is much to be proud of across our
businesses – not least the Engineering
division’s acclaimed apprenticeship
initiatives, which drive the quality and
availability of upcoming talent not just
for the Carr’s businesses but more
widely too. This is local stakeholder
engagement of truly impactful meaning.
The complexities and diversities of
our businesses are as inspiring as
they are challenging and we intend
to focus, improve, and deliver optimal
shareholder value through effective
leadership at both operational and
Board level and we approach the next
chapter with adaptability and unity.
Sale of the Agricultural
Supplies division
The year saw the completion of the sale
of all of our holdings in the Agricultural
Supplies division to co-owners Edward
Billington & Son Ltd. 98% of the
shareholder votes at a General Meeting
of the Company on 19 September
2022 were in favour of the sale, which
completed on 26 October 2022, and
we received the final payment of
consideration in October 2023, bringing
the total received by the Company to
£29.9m, before the deduction of £0.8m
in respect of property rental terms
agreed with Billington Group.
FY22 year-end process
As noted in the 2022 Annual Report
and Accounts there were significant
challenges during the FY22 year-end
process that impacted the Carr’s team
and the external auditor, Grant Thornton
UK LLP. We have extensively reviewed
our internal and external processes and
real progress has been made in FY23.
Dividends
The Board is proposing a final dividend
of 2.85 pence per share which, together
with the two interim dividends, makes
a total dividend of 5.20 pence per share
for the full year, the same as the prior
year (2022: 5.20 pence).
Subject to approval by shareholders
at the Annual General Meeting of the
Company to take place in February
2024, the final dividend will be paid
on 1 March 2024, to shareholders on
the register at close of business on
26 January 2024 and the shares will
go ex-dividend on 25 January 2024.
Carr's Group plc
| Annual Report & Accounts 2023
OverviewStrategic ReportCorporate GovernanceFinancial Statements 06
CHAIR’S STATEMENT CONTINUED
Stakeholder engagement and
statement on Section 172 of the
Companies Act 2006
Stakeholder engagement is an
important aspect of our business.
Section 172 of the Companies Act 2006
requires the Directors to promote the
success of the Company for the benefit
of the members as a whole, having
regard to the interests of stakeholders
in their decision-making. Directors
understand the importance of taking
into account the views of stakeholders
and the impact of the Company’s
activities on local communities, the
environment, including climate change,
and the Group’s reputation. To find out
more about how stakeholders were
taken into account in decision-making,
please see below and pages 62 to 66
(inclusive) of the Corporate Governance
Report which includes our Section 172
statement on page 66.
General Meetings of the Company
provide an opportunity to engage with
shareholders in person. In FY23 we held
a General Meeting in relation to the
disposal of the Agricultural Supplies
division. On 27 February 2023 we held
our Annual General Meeting which was
well attended by shareholders, and
another General Meeting followed on
2 May 2023 to, amongst other matters,
approve the delayed 2022 Annual
Report and Accounts. Details of the
voting at the February Annual General
Meeting and the General Meeting held
in May can be found on our website
www.carrsgroup-ir.com/content/rns-
alerts/corporate_news/020523b.
Aside from these formal meetings,
during the past year we have engaged
with shareholders on matters such
as changes to long term incentive
plan performance measures and the
Remuneration Policy. We also consulted
on executive remuneration following
our General Meeting in May. Whilst our
Remuneration Report was approved by
a majority at the General Meeting, there
were several shareholders who voted
against approval.
The Chair of the Remuneration
Committee conducted an engagement
process from which useful feedback
was received and our response has
been published on our website. For
further details see pages 79 and 80. It
is important that the Chair and other
Directors are accessible to shareholders
so we can benefit from the dialogue,
challenge and exchange of views.
The Board is happy to engage with
shareholders at any time on a one-to-
one level and proactively engage with
shareholders to keep them up to date
when appropriate to do so.
During the year, the Non-Executive
Directors visited different sites around
the Group and met with members of the
senior leadership team. Peter Page also
spent significant time at the operational
sites during the year meeting with
employees, customers, and strategic
partners. This regular engagement with
current and prospective customers
ranged from farmers at UK and US trade
events and distributors at international
trade shows to site visits in the UK, USA
and Japan. We also maintain contact
with external research and development
organisations and educational
institutions, ranging from the UK Atomic
Energy Authority, agriculture faculties
of US and UK universities and local
colleges for skills training.
Environmental, Social and
Governance
We continue to make good progress
to capture our data to identify climate-
related risks and opportunities, as well
as initiatives at each of our sites to
reduce our impact on the environment.
The establishment of the Environmental
Steering Group, as well as the Green
Teams at each of our sites has
ensured that environmental and social
matters are given focus throughout
the organisation. Our governance
structure supports this approach and
we ensure that responsible policies and
practices underpin our business. Further
details can be found on pages 25 to 44
(inclusive).
Board
During FY23 new Executive and Non-
Executive Directors were appointed to
the Board, bringing fresh perspectives
and insights.
Shelagh Hancock and Stuart Lorimer
were appointed as Non-Executive
Directors from 1 September 2022.
I became Non-Executive Chair on
21 February 2023 and took over from
Peter Page who stepped down as
Executive Chair and, as announced on
5 August 2022, took the role of Chief
Executive Officer. Peter stepped down
from the Board and left the Group on
17 November 2023. We thank Peter for
his commitment to the Group over his
tenure and wish him all the best in his
future endeavours.
As announced on 13 November 2023,
David White was appointed by the
Board as Chief Executive Officer with
effect from 17 November 2023 having
completed an orderly handover from
Peter Page. David joined the Group in
January 2023 and became part of the
Board on 21 February 2023 as Chief
Financial Officer, taking over from Neil
Austin who left the Group in February
2023 to take up a new role. David has
been succeeded in the role of Chief
Financial Officer by Gavin Manson with
effect from 13 November 2023. Gavin
is not a member of the Board but will
attend Board meetings by invitation.
Martin Rowland, who was appointed to
the Board as Non-Executive Director
on 6 March 2023 as a representative of
Harwood Capital Management Limited
(“Harwood”) pursuant to a relationship
agreement between the Company and
Harwood, was appointed Executive
Director of Transformation with effect
from 13 November 2023.
We have also recently welcomed Gillian
Watson to the Board. Gillian joined as
Non-Executive Director on 9 October
2023 and has succeeded John Worby
as Senior Independent Director. John
retired from the Board on 31 October
2023 after almost nine years of diligent
service for which he is warmly thanked.
Company Secretary and Legal Director
Matthew Ratcliffe left the Group on 22
September 2023 to take up a new role
and is succeeded by Justin Richards
who joined us on 25 September 2023 as
our new Company Secretary and Legal
Director.
Further details of Board and Committee
membership during FY23 can be found
in the Nomination Committee Report on
pages 67 to 71 (inclusive).
Carr's Group plc
| Annual Report & Accounts 2023
07
Through our operations in different
sectors we positively contribute to
global efforts to reduce the impact
on the environment. Our involvement
in the nuclear industry contributes to
the global demand for sustainable
power businesses, and our Speciality
Agriculture product range complements
grass-based systems which play such a
crucial role in carbon sequestration.
People
As always, the business depends on
the goodwill and commitment of all
colleagues. The whole Board is very
grateful for everyone’s contribution
during a year of internal change
following the sale of the Agricultural
Supplies division, extraordinary
challenges in agricultural markets and
significant progress on several fronts in
the Engineering division.
Outlook
The Group’s capacity to address current
challenges and to harness the potential
of our brands is strong. We understand
the importance of resilience, patience,
and adaptability in navigating the
ebbs and flows of the market. We are
committed to optimising the value of
our assets, capitalising on increasing
global demand, and advancing our
clean energy initiatives.
Tim Jones
Chair
20 December 2023
Carr's Group plc
| Annual Report & Accounts 2023
OverviewStrategic ReportCorporate GovernanceFinancial Statements 08
MARKET OVERVIEW
MARKET OVERVIEW
FOCUS, IMPROVE, DELIVER THROUGH
SPECIALIST MARKET POSITIONS
ENGINEERING
The Engineering division is well placed to grow earnings with its strong reputation in the nuclear sector, supported by private and
public sector commitment to energy security. New opportunities include the emerging nuclear medicine sector and high-value
long-term research projects in subatomic particle physics and nuclear fusion technologies.
The Engineering businesses have a strong presence in international markets, particularly the USA, UK, EU, and Japan. Now at £59.8m, the
value of confirmed orders has grown by approximately 51% in the past two years, to exceed the current value of annual sales.
The following are important trends in the markets in which the Engineering division operates.
What is
happening?
What this
means for
Carr’s
Nuclear clean-up
Increased focus on
energy security
Use of robotics in nuclear
environments and medicine
Increased investment
in the defence sector
The UK’s nuclear clean-
up programme, centred
on Sellafield, Cumbria,
is one of the largest
engineering infrastructure
projects in Europe.
Disposal and storage of
nuclear waste is a priority
for the nuclear sector
worldwide.
With a growing emphasis
on energy security and
reducing dependence
on imported energy,
utility companies and
governments are
investing to extend the
operational lifespan of
existing nuclear facilities.
Robotics continues to play an
increasing role in engineering.
Debris removal from
inaccessible, high-radiation,
high-risk environments requires
specialised robotic equipment.
In the global nuclear medicine
market, specialist robotics
are designed to handle small
quantities of isotopes in the
growing applications of nuclear
medicine.
Significant defence
initiatives have been
announced recently,
including confirmation
that the first generation
of AUKUS nuclear
submarines will be built
in the UK and Australia.
The UK government has
confirmed that these will
be built by BAE Systems
and Rolls-Royce.
Our experience of
work and existing
accreditation in the
defence sector leaves
our UK businesses
well positioned to
support these critical
government-led
initiatives.
Our patented MSIP ®
technology has been
globally deployed
for over 30 years,
maintaining assets by
proactively preventing
stress cracking or
repairing existing cracks
in welds in situ, saving
operators downtime and
considerable cost.
Carr’s is well placed as
part of the Programme
and Project Partners
arrangement for
accredited local
businesses, which has
already delivered projects
for Sellafield. Bendall’s
Engineering is a founding
member of the Cumbria
Manufacturing Alliance, a
collaborative network of
local businesses working
together to support
Sellafield from the
surrounding area, while
Carr’s MSM continues
to supply master slave
manipulators on multiple
projects.
Our established, globally
recognised businesses in the
UK and Germany continue
to develop new products
capable of meeting the needs
of the nuclear industry across
the globe. Production is set
to commence next year at
Japan’s Reprocessing Center
Rokkasho, a facility which has
already placed orders with
Wälischmiller, building on our
reputation as a market-leading
supplier. Our newer products,
like the A150 (a versatile and
lightweight solution designed
for isotope handling) and the
Lirob® (the first fully remote-
controlled robot designed for
the nuclear medicine sector)
underline our commitment to
evolve as required to support
our customers.
Carr's Group plc
| Annual Report & Accounts 2023
09
SPECIALITY AGRICULTURE
The Speciality Agriculture division is expected to recover and grow earnings in the medium term as recent, temporary, but
significant adverse events in existing markets of the UK, Ireland, USA, Europe, and New Zealand recede.
Each business has a strong presence in these markets with brands that are recognised and trusted by customers. Growth will be
linked to broader trends in ruminant agriculture.
The following are important trends in the markets in which the Speciality Agriculture division operates.
Growth in pasture and
grass-based nutrition
Emissions
control
The reduction in antibiotic use
What is
happening?
What this
means for
Carr’s
Recent years have seen
significant increases in
energy costs, which,
when coupled with high
costs of compound
feeds, have seen a
tightening of margins in
intensive, confined cattle
management systems.
Grass-based nutrition
can be a low-input option
available for beef, lamb,
and dairy operations
worldwide, which helps
livestock managers
maximise returns from
their herds.
Our Speciality Agriculture
products complement
grass-based systems
by providing crucial
supplements, minerals
and trace elements that
ensure a balanced diet
to optimise livestock
metabolism.
Livestock agriculture is
addressing its carbon
footprint, including
methane gas emissions,
in various ways.
The UN and many other public
agencies discourage the use
of antibiotics to compensate
for poor hygiene or animal
management.
Balanced nutrition programmes
are required to ensure healthy
livestock and can help manage
symptoms of infections. Carr’s
feed blocks and boluses provide
crucial supplements, minerals,
and trace elements to ensure a
balanced diet.
The current ranges of
Speciality Agriculture
products help to limit
emissions by optimising
productivity and boosting
liveweight gain. Products
that reduce exhaled
methane offer further
opportunities in this
area, while our transition
to biodegradable tubs
in the US will reduce
plastics use and
emissions associated
with reusable containers.
Data management to
optimise productivity
Using low-cost grass
inputs to optimise
productivity in herds,
including liveweight
gain and carcase
quality, as well as
reproductive efficiency
in calving intervals and
lambing percentages,
is fundamental to
sustainable livestock
farming. Data monitoring
systems allow farmers
to accurately assess
performance of
inputs and optimise
productivity.
Feed blocks
and boluses are
management inputs
that can be used to
provide a balanced diet
for optimal livestock
performance.
Carr's Group plc
| Annual Report & Accounts 2023
OverviewStrategic ReportCorporate GovernanceFinancial Statements 10
BUSINESS MODEL
FOCUS ON VALUE FOR OUR
STAKEHOLDERS
Business strategy
Carr’s Group operates through
two divisions, Speciality
Agriculture and Engineering.
The Group invests in people
and assets to grow businesses
in both divisions, with the
focus on adding value through
innovative products and
solutions.
ENGINEERING
What we do
Our Engineering division provides customers predominantly in the nuclear power
and defence sectors with specialist fabrication and precision engineering, robotics,
and engineering solutions across seven sites in the UK, USA and Europe. This
multidisciplined expert division has a strong reputation across the engineering
market which is reflected in the strong order book currently in place.
By providing patented processes and innovative solutions alongside highly skilled
fabrication techniques our Engineering division has become a go-to for specialist
advice and support across the world. The engineering companies are especially well
regarded in the growing nuclear market as governments seek to improve energy
security and reduce the dependence on fossil fuels. The nuclear market, the defence
industry as well as the oil and gas industry, have confidence in our Engineering
division due to their industry accreditations and quality assurance awards.
The businesses strive for excellence in all aspects of the products and services
they deliver and remain focused on the continual improvement of their design and
production capabilities.
How we do it
The fabrication and precision engineering businesses operate through two facilities
across the north of England specialising in equipment to be supplied into regulated
markets including electro-mechanical machinery, process equipment packages,
pressure vessels and special purpose fabrications. We also supply a range of on-site
technical services through teams of highly qualified personnel.
With one facility in the UK and one in Germany the global robotics businesses
collectively design, manufacture and supply a broad range of complex robotic
and remote handling equipment. These highly innovative products are delivered
predominantly into nuclear markets and are designed to withstand radioactive and
other challenging environments. Through sustained investment in research and
development we ensure that our robotics business remains at the forefront of remote
handling technology and that our products continue to provide innovative solutions
for our global customer base.
From our site in the UK and our sites in the USA, we offer a range of engineering
applications and technical services which provide innovative solutions across
global nuclear industries. These services include our patent protected Mechanical
Stress Improvement Process (MSIP®), Power Fluidics™ technology and a range of
decontamination services which are supplied to utilities, OEMs and government
contractors worldwide.
Carr's Group plc
| Annual Report & Accounts 2023
Products:
Robotic manipulators and remote
handling equipment, life-of-plant
extension technologies, radiation
protection and decontamination
services, design and specialist
fabrication, and precision
machining.
Key brands:
• TELBOT® robotic manipulators
• MSIP® life-of-plant
extension technology
• Power Fluidics™ waste
mobilisation systems
Locations:
The division operates from four
sites in the UK, two in the USA and
one in Germany.
Customers:
Our specialised products and
services are supplied to customers
globally including government
bodies and some of the world’s
largest companies and nuclear
site operators.
Our global markets:
We supply into highly regulated
markets including:
Nuclear decommissioning
Nuclear power generation
Nuclear medicine
Defence
Oil and gas
11
SPECIALITY AGRICULTURE
What we do
Through its production of boluses and feed blocks, the Speciality Agriculture
division enables farmers to optimise forage and grass-based nutrition systems,
and by doing so, we support their ability to raise healthy animals in an efficient, high
welfare environment and in a responsible way. We provide this support by producing
nutritional supplements which release the appropriate quantities into the animal at
the correct time.
Despite difficult market conditions at the present time, Speciality Agriculture’s
products create value for all our stakeholders with tried and tested formulas which
continue to develop and improve.
We are a market leader with globally respected brands because our products are
developed by industry experts and trusted to deliver positive results within the
animals. Speciality Agriculture has developed several patented products and unique
manufacturing processes which cannot be replicated by our competitors. Every
product produced and sent to market by this division is underpinned by expert research
to ensure that the products deliver the very best quality and outcome to the customer.
How we do it
We manufacture and supply a broad range of innovative animal nutritional
supplements under well-respected brands. These include patent-protected
feed blocks and boluses which effectively release trace elements into livestock
consistently and over periods of up to six months. These products help to maintain
animal health and improve performance.
Our feed blocks are manufactured at a variety of wholly owned and joint-venture
facilities located across the UK, Germany and the USA. We manufacture boluses
from a wholly owned facility in the UK. These products are supplied through a large
distribution network across the UK, Europe, Australasia and North America.
Products:
Feed blocks, minerals and boluses
containing trace elements and
minerals for livestock.
Key brands:
• Crystalyx®, Horslyx® and
SmartLic® feed blocks
• Tracesure® boluses
• AminoMax® bypass
protein products
Locations:
Patented products are
manufactured from three
sites in the UK, six sites in the
USA and one site in Germany.
Customers:
Farmers across the UK, Europe,
North America and Australasia
supplied through an extensive
global distribution and support
network.
What makes it happen
Who we create value for
Talented people
Employees
With 660 people employed worldwide we are improving and
developing talent and skills across the globe.
Our employees benefit from our training and development
offering and enhanced engagement initiatives.
Culture and ethics
Environment
Our focus on continual improvement which values ethical
behaviours to deliver the best results remains strong, and we
are committed to ensuring that our businesses remain ethically
and sustainably managed.
Expert knowledge
Our businesses possess a globally recognised wealth of
specialist knowledge and their focus on delivering innovation
and technology underpins our products and solutions.
Global network
We remain committed to deliver quality products and services
to our existing customers, as we continue to focus on potential
for growth internationally.
Investment
We create and deliver quality and value through continued
investment in our existing businesses and people.
Long-term, trusted relationships
We remain focused on our longstanding and trusted
relationships which are founded upon the quality of our offering,
our organisational culture, and our levels of customer service.
We are taking steps to minimise our environmental impact
and improve our practices to become a net zero organisation
by 2050.
Communities
Across the Group we support charitable initiatives and the
communities in which we operate.
Partners
We build and maintain close relationships with a range of
trusted strategic partners across the UK, the USA and Europe.
Customers
We provide our well-established and expanding customer
base with leading product ranges and excellent service levels.
Investors
Our strategy is designed to deliver sustainable growth. During
the last five years, we have increased the dividends we pay to
investors by 16%.
Carr's Group plc
| Annual Report & Accounts 2023
OverviewStrategic ReportCorporate GovernanceFinancial Statements 12
STRATEGY
Our strategy is built upon our three core pillars:
FOCUS
IMPROVE
DELIVER
Carr's Group plc
| Annual Report & Accounts 2023
The Future – The
management team is
focussed on improving
the performance of the
Speciality Agriculture
division and optimising the
success of the Engineering
division. Having divested
the Agricultural Supplies
division and transitioned
all associated activities,
the Board is now confident
that shareholder value
will be created in both
divisions, through
capitalising on revenue
growth opportunities,
driving down costs and
delivering efficiencies
throughout the markets in
which we operate.
13
ENGINEERING
Focus:
The businesses that form the
Engineering division have strong
reputations in the nuclear, oil and gas
and defence sectors built on market-
leading capabilities, particularly in
robotics, high-specification fabrication
and bespoke engineering solutions. Our
facilities located in the UK, Germany and
the United States have allowed these
businesses to develop strong customer
relationships across the world.
Improve:
Deliver:
These capabilities provide a strong
foundation for the division to deliver
growth in both the immediate future
and in the long term. Global government
support for new nuclear assets remains
strong, while decommissioning of
existing facilities gathers pace. The
International Atomic Energy Authority
expects almost half of the 423 nuclear
power reactors the world relies on today
to enter the decommissioning process
by 2050. The services and products
our businesses deliver have become
superbly positioned as exemplars in
support of this activity through strong
customer relationships and ongoing
business development work.
With an order book of £59.8m at the end
of FY23, up almost 50% on the previous
year, the Engineering division is already
capitalising on the reputation for service
and delivery excellence earned over
many years. The experienced leadership
of the division is supported by strong
technical capability and excellent
customer relationships, to support a
substantial pipeline of opportunities.
Delivering on this will rely on optimising
our existing production capacities and
utilising the strong financial position
of the Group to allow businesses to
bid for larger contracts which are
becoming increasingly common. As
the businesses grow, so too does the
demand for skilled employees, which
makes schemes like our Skills Academy
in Carlisle so critical to developing
in-house capability to deliver these
projects in the medium and long term.
SPECIALITY AGRICULTURE
Focus:
Improve:
Deliver:
The Speciality Agriculture division
supplies nutritional supplements to
customers in the UK, Europe, North
America and New Zealand. Our
market-leading brands are supplied
to beef, dairy, sheep, deer and equine
customers, produced in facilities across
the UK, Germany and the United States.
While the current trading environment
is challenging, medium and longer-
term market dynamics will help to
support the increase in sales volumes,
through a combination of a recovery
and further penetration in existing
markets, together with the benefits
of enhanced product development,
supported by a new, strengthened
leadership team. Pasture-based farming
remains a key component of global
agricultural markets and our products
have long-term proven benefits to these
management systems, with our feed
blocks and boluses both supporting
improved performance in grass-
based nutrition programmes. Further
developing these market-leading
products will increase the resilience
of the division against future trading
conditions.
Our products are category leaders
in many of the markets in which we
operate. Delivering our existing products
cost-effectively, while developing
complementary solutions to meet
customers’ needs will be critical in
increasing our share in markets in
which we are already well-established.
We are making progress in this area,
with the automation of our bolus
manufacturing site in the UK delivering
increased production capacity while
removing inefficiencies through that
process. Delivering further supply chain
and production efficiencies will allow
the Speciality Agriculture division to
navigate current trading conditions
and be well-placed for future growth.
A new leadership team bringing
relevant external expertise will lead the
transformation of the division, enhancing
our capabilities, strengthening our
brands yet further and ensuring we
are able to meet the evolving needs of
farmers in all our key markets.
Carr's Group plc
| Annual Report & Accounts 2023
OverviewStrategic ReportCorporate GovernanceFinancial Statements 14
CHIEF EXECUTIVE’S REVIEW
During the financial year ended 2 September 2023
revenues increased 15.3% to £143.2m (FY22: £124.2m).
Adjusted operating profit for the Group of £8.0m (FY22:
£11.9m) was 33.2% down on the prior year. Adjusted profit
before tax reduced by 33.2% to £7.5m (FY22: £11.2m).
Adjusted earnings per share for continuing operations
decreased by 38.0% to 6.2p (FY22: 10.0p) for the year.
All figures and the commentary set out
on the following pages relate solely to
continuing operations, except where
otherwise stated.
Divisional Review: Engineering
The Engineering division comprises
specialist fabrication and precision
engineering businesses in the UK,
robotics businesses in the UK, Europe
and USA, and engineering solutions
businesses in the UK and USA.
Revenue performance in the division
was ahead of the prior year with a
particularly strong H2 performance
delivering a 24% increase in adjusted
operating profit, following a slower H1.
The order book strengthened during
the year, with £59.8m recorded at the
year end, significantly ahead of the
FY22 year-end position of £40.6m.
This improved position will support
performance in FY24 and FY25.
Fabrication and precision engineering
revenues were up 16% in the period,
supported by continued high activity
in the nuclear sector, including an
£8.4m contract to deliver instrument
cabinets and shielding blocks to
one of Sellafield’s new-build major
infrastructure projects, and strong order
intake from the oil and gas sector.
Revenues in the robotics business
were less than last year, a reflection
of temporary lower order intake in this
business during prior year, FY22. With a
significant uplift in order intake in FY23,
this part of the division’s order book
now stands at record levels, including a
£1.5m contract in the emerging nuclear
medicine sector and a prestigious £10m
contract for the UK’s National Nuclear
Laboratory, the largest single contract
ever signed by Wälischmiller, ensuring a
positive outlook for FY24.
Divisional Review: Engineering
Divisional Review: Speciality
Agriculture
The Speciality Agriculture division
manufactures livestock supplements
including branded feed blocks, essential
minerals, and precision dose trace
element boluses, sold to farmers in the
UK, Europe, North America, and New
Zealand through a long-established
distribution network.
The increase in revenue in the period
follows an increase of 21% in average
feed block selling prices to pass through
substantial raw material cost increases,
adversely impacting total volumes by
16% (excluding joint ventures) compared
to prior year.
Revenue (£m)
Adjusted operating profit (£m)
Adjusted operating margin (%)
Forward order book (£m)
2023
50.6
5.3
10.4
59.8
2022
46.2
5.4
11.6
40.6
% Change
+9.6
-1.5
-1.2ppts
+47.0
Carr's Group plc
| Annual Report & Accounts 2023
15
In the UK, costs of the principal
ingredient of feed blocks, sugar cane
molasses, have increased by 70%
over the past three years, which, with
increases in other ingredients along with
energy and labour, has necessitated a
45% increase in selling prices over the
past two years. When combined with
45% increases in other feed costs, a
180% uplift in fertiliser prices and 60% on
diesel, livestock customers limited their
expenditure, particularly impacting UK
sales volumes during a mild autumn in
2022 and winter 2022-23 that supported
continued grazing for longer than usual.
Feed block volumes sold in the UK
were down by 18% on FY22, a situation
consistent at all distributors.
In the USA, the year-on-year increase of
24% in the selling price of feed blocks
reflected continued high raw material
ingredient costs. At the same time, the
USA has been severely impacted by
three years of drought. In key market
areas for feed blocks, ranch-based cow
calf herd headcount has reduced by up
to 40%, in part reflecting the drought
impact, but also occurring as the US
beef industry reaches the expected low
point of the current production cycle.
As a result of all these factors, volumes
sold (excluding joint ventures) were 16%
down on last year, limiting scope to
recover fixed costs in the business.
At the UK animal health business,
revenues were down 16% compared
to the prior year, related to lower bolus
volumes and lower volumes of specialist
aquaculture products manufactured
under a long-standing contract.
Although current market conditions
remain challenging, management
maintains a positive longer-term outlook
for the Speciality Agriculture division. In
the UK and Ireland, farm input prices,
particularly for feed and fertiliser, have
declined from recent peaks. Farmgate
prices for beef and lamb are strong
when compared to 10-year historic
averages, whereas the outlook for dairy
customers is affected by a lower milk
price. In the USA, the area affected by
drought has reduced from 12 months
previously, whilst the cyclical outlook
for US beef will slowly improve as herds
rebuild over the next five years.
Each of the Speciality Agriculture
businesses is founded on respected
brands with a track record of quality,
innovation and service, that will support
sales as markets recover from recent
extraordinary conditions.
Divisional Review: Speciality Agriculture
Revenue (£m)
Adjusted operating profit (£m)
Adjusted operating margin (%)
Health and Safety
Health and safety continues to be
a priority for management teams.
Throughout FY23, all sites have been
engaged in a process of upgrading and
investment to meet the requirements of
an internal base level audit, introduced
in 2022. This audit ensures that basic
safety standards are in place and
understood at all locations. A second
round of audits has now commenced,
aiming for a higher level that relates to
developing and establishing habits of
instinctively safe behaviour, in terms of
both individual attitudes and measured
outcomes.
In the past 12 months there were two
reportable incidents, compared to nil
in the prior year. Whilst the incident
rate increased over the year, it is
encouraging to note a markedly higher
level of near misses and potential risks
being reported and addressed at a local
level, indicating confidence in reporting
issues and resolving them promptly.
Environment
There has been significant progress
in engagement in environmental
management issues. Every site now has
a Green Team, a group of colleagues
who meet regularly to bring forward
ideas and suggestions for reducing
the carbon footprint, reducing waste,
increasing participation in local
community initiatives and small-
scale local investments to reduce
consumption and impact.
At Group level, the quality and speed
of reporting statutory information has
improved, along with the capability to
address shareholder and regulatory
enquiries relating to environmental
matters. In 2024, there will be further
progress in this area as Scope 3
reporting develops.
2023
92.6
5.6
6.1
2022
78.1
9.2
11.8
% Change
+18.7
-38.5
-5.7ppts
Disposal of Agricultural
Supplies division
As the first stage of the Group’s review
of strategic options, the sale of the
Agricultural Supplies division was
completed on 26 October 2022, with initial
receipt of £24.7m in cash. During FY23,
trading continued in the division for a
short period, until the completion date,
for which the loss after tax was £1.2m. The
process to close the completion accounts
for the sale was finalised during August
2023 with a further £1.2m of cash received.
Deferred consideration of £4.0m was
received in October 2023, in line with the
sale and purchase agreement. Proceeds
included in the prior year loss on fair
value measurement before costs to sell
include a deduction of £0.8m in respect
of property rental terms agreed with
Billington Group.
Divisional Outlooks
Speciality Agriculture will continue to
manage historically high input costs
in 2024, whilst also facing depressed
demand for nutritional supplements as
customers limit outgoings in challenging
market conditions. Longer-term prospects
remain attractive, as drought recedes and
the beef cycle turns in the USA, whilst in
the UK and Europe the businesses will
promote the unique attributes of the full
range of Carr’s products that set them
apart from competitors.
Management is confident in the outlook
for the Engineering division beyond the
current financial year, with confirmed high
value contracts continuing into FY24 and
FY25, a well-balanced spread of current
orders across all the business units in
the division, and a stronger market for
precision engineering. The pipeline of
opportunities and prospects beyond
confirmed orders is very encouraging.
The division is increasingly focused on
the specific opportunities that match its
market-leading skills, technical strengths
and high-quality manufacturing assets.
David White
Chief Executive Officer
20 December 2023
Carr's Group plc
| Annual Report & Accounts 2023
OverviewStrategic ReportCorporate GovernanceFinancial Statements
16
FINANCIAL REVIEW
AN INCREASE IN REVENUE IN
A CHALLENGING ECONOMIC
ENVIRONMENT
CONTINUING OPERATIONS
Discontinued operations
Alternative performance
measures
This Financial Review and other parts
of the Strategic Report include both
statutory and alternative performance
measures (“APMs”). The principal APMs
measure profitability excluding items
regarded by the Directors as adjusting
items (note 5). These APMs, generally
referred to as ‘adjusted’ measures,
are used in the management and
measurement of business performance
on a day-to-day basis and are also
used in assessing performance under
the Group’s incentive plans. A glossary
and reconciliation of APMs is included
towards the end of the report and
accounts on pages 194 and 195.
Continuing operations
The Agricultural Supplies division was
treated as discontinued operations
in last year’s accounts, with trading
disclosed separately and the net
assets of the business categorised
as held for sale. This year’s accounts
contain the period of trading from 4
September 2022 to the disposal date of
26 October 2022, as well as finalisation
of the proceeds related to the disposal
of this business during the year. Full
details are included in note 9 to the
financial statements. All commentary in
this review relates solely to continuing
operations, except where otherwise
stated.
The results of discontinued operations
were a loss of £1.2m reflecting losses
after tax in the year of £1.2m (2022: profit
after tax of £4.0m). The cumulative loss
on the measurement to fair value, less
costs to sell is £10.3m of which £4.4m
is in respect of the non-controlling
interest’s share of the measurement
impairment. Full details can be found in
note 9.
During the process to complete the
accounting treatment of the disposal of
the Agricultural Supplies division, two
adjustments have been identified which
have resulted in a prior year restatement
of the measurement of fair value less
costs to sell. The first was an adjustment
to the book costs of the assets disposed
of, relating to the Group’s interest in the
joint venture, Bibby Agriculture Ltd, held
through the Group’s shareholding in
Carr's Billington Agriculture (Sales) Ltd,
together with consolidation adjustments
to the assets and liabilities included
in the overall Group net assets being
disposed of. This adjustment totalled
£2.9m, of which £2.7m was included in
the results published for the period to
4 March 2023. Of this £2.9m, £1.6m is
attributable to the Group and has no
impact on cash proceeds received to
date or in future.
Subsequent to the publication of the
interim statement, a further correction
was identified, which was required to
reflect property rental terms agreed
with the Billington Group as part of the
sale process. This increased the loss on
measurement of fair value less costs to
sell by £1.2m, with £0.8m of this being
attributable to the Group. Combined,
these corrections increase the loss on
measurement of fair value less costs to
sell by £4.1m, which included £1.8m in
respect of the non-controlling interests
share of the measurement impairment.
Carr's Group plc
| Annual Report & Accounts 2023
The results and financial position of the
Group’s discontinued operations for
the year ended 3 September 2022 have
been restated to reflect this, with full
details set out in note 39 to the financial
statements.
The process to close the completion
accounts for the sale is finished and
the deferred consideration of £4m was
paid in October 2023, meaning receipt
of gross cash proceeds of £29.9m,
in line with expectations. Proceeds
included in the prior year loss on fair
value measurement before costs to
sell include a deduction of £0.8m in
respect of property rental terms agreed
with Billington Group. Further details for
discontinued operations can be found
in note 9.
Operating profit
Adjusted Group operating profit of
£8.0m is down 33.2% on last year (2022:
£11.9m). As a percentage of revenues,
the Group’s adjusted operating margin
is 5.6% (2022: 9.6%). This decrease in
operating margin reflects the impact
of higher raw material prices in the
Speciality Agriculture segment which
has driven revenue up with minimal
margin improvement. Reported
operating profit was £2.0m (2022: £8.2m).
The Group’s share of the adjusted
post-tax result in its joint ventures
was £1.4m, up 71.5% (2022: £0.8m). The
Group’s share of the adjusted post-tax
result in its associate is included within
discontinued operations as part of the
disposal group.
17
Adjusted operating profit per division and as a percentage of divisional revenues are
as follows:
Adjusted* operating profit 2023
Adjusted operating profit
Speciality Agriculture
Engineering
Central
Total
2023
%
6.1
10.4
2023
£m
5.6
5.3
(3.0)
8.0
2022
£m
9.2
5.4
(2.6)
11.9
2022
%
11.8
11.6
* Segmental reported profit figures can be found in note 2 to the financial statements.
Adjusting items
The Group reported a charge for
adjusting items of £6.0m (2022: £3.7m).
This year’s charge includes impairment
of goodwill and intangible assets
of £3.8m, amortisation of acquired
intangibles of £0.9m, ERP system
implementation costs of £0.6m and
restructuring costs of £0.6m. Further
details are included in note 5.
Impairment of goodwill and
Intangibles
During the year end accounting and
statutory audit process, the Group
conducts impairment reviews of
goodwill associated with previous
acquisitions. These reviews use
projected cash flows for each business,
based on current management
forecasts, interest rates and associated
external market data, in accordance
with International Financial Reporting
Standards ("IFRS"). Economic conditions
at the year end required higher discount
rates than at the previous year end.
For FY23, this results in a non-cash
impairment charge of £1.7m against
goodwill paid for Animax Limited, an
animal health business which was
acquired in 2018. While action has been
taken to improve the performance of
the business, the challenging conditions
in agriculture mean that the Board
believes that the full remaining goodwill
in the business should be written off
based on the estimated recoverable
amount of the cash-generating unit. A
further £0.3m of other intangible assets
of Animax were also written down. In the
Engineering division, the valuation of
goodwill acquired on the acquisition of
NW Total Engineered Solutions Ltd has
been written down by £1.8m as a result
of changed discount rates and other
non-company specific assumptions,
despite the business’s prospects
improving from last year. As these
items do not relate to the underlying
trading performance of each business
the impairments have been treated as
adjusting items (note 5) consistent with
prior years.
Finance costs
Net finance costs of £0.4m were lower
than the prior year (2022: £0.7m). Interest
cover was 4.4 times based on reported
profit (17.9 times on an adjusted profit
basis) compared to 12.4 times in 2022.
Profit before tax
Adjusted profit before tax at £7.5m was
33.2% below the previous year (2022:
£11.2m). Reported profit before taxation
was £1.5m (2022: £7.6m).
Taxation
The Group’s effective tax charge on
adjusted profit from activities after net
finance costs and excluding results from
joint ventures, which are recorded after
tax was 27.5% (2022: 17.9%). The increase
is driven by deferred tax, including the
impact of unrecognised deferred tax on
trading losses.
Earnings per share
The profit attributable to the equity
holders of the Company in respect of
continuing operations amounted to
£0.4m (2022: £6.0m), and basic earnings
per share was 0.4p (2022: 6.4p).
Adjusted earnings per share of 6.2p
(2022: 10.0p) is calculated by dividing
the adjusted profit attributable to
equity holders for the year in respect of
continuing operations by the weighted
average number of shares in issue
during the year.
Cash flow and net cash/(debt)
Cash of £2.1m was generated from
operating activities for the year,
compared to cash generation of £2.9m
in the previous year. The working capital
outflow in the current year of £4.7m
(2022: £8.7m) was driven by a £3.2m
increase in receivables, predominantly
in the Engineering division. Following the
year-end, the Group’s net cash position
has been supplemented by the receipt
of £4.0m of deferred consideration in
October 2023, related to the disposal of
the Agricultural Supplies division. The
main banking facilities were extended
in December 2023, and now expire on
20 December 2026. The previously held
invoice discounting facility was solely for
the Agricultural Supplies division and is
no longer in place following the disposal
on 26 October 2022.
Pensions
The Group operates its current pension
arrangements on a defined benefit
and defined contribution basis. The
defined benefit scheme is closed to new
members and closed to future accrual.
The scheme currently has 61 deferred
members and 214 current pensioners.
The valuation on an IAS 19 accounting
basis showed a surplus before the
related deferred tax liability in the
scheme at 2 September 2023 of £5.3m
(2022: £6.8m). This is after an actuarial
loss of £2.1m (2022: £2.6m) which has
been recognised in the Consolidated
Statement of Comprehensive Income.
Following a review of the Scheme
rules the Directors believe there is an
unconditional right to a refund of surplus
from the defined benefit pension plan
in the event there are surplus assets
during the lifetime of the plan or when it
winds up. The Group and Company have
therefore recognised the surplus in full
on the balance sheet.
David White
Chief Executive Officer
20 December 2023
Carr's Group plc
| Annual Report & Accounts 2023
OverviewStrategic ReportCorporate GovernanceFinancial Statements 18
KEY PERFORMANCE INDICATORS
We monitor our growth and health
as a business, and our performance
against strategy, using the following
key performance indicators.
TRADING KPIs
Sales volumes
(Continuing operations)
86,177tns
FY23
FY22
FY21
86,177 tonnes
103,186 tonnes
108,718 tonnes
The nature of our businesses, particularly Speciality Agriculture, means
that revenue is not, in isolation, an indicator of performance. Speciality
Agriculture is a volume-driven business and subject to significant raw
material price variations, the majority of which are passed through to selling
prices. Increasing raw material prices therefore lead to higher revenues, but
not necessarily to increased profit. The revenue growth in the current year
is reflective of increased selling prices, complemented by growing revenue
in the Engineering division. To monitor sales performance the business
reviews feedblock volumes (tonnes sold by wholly-owned businesses).
Operating cash flow
(Continuing operations)
£2.1m
£2.1m
£2.9m
FY23
FY22
FY21
£16.0m
This KPI indicates how much cash is being generated by the Group’s
continuing operations, before being utilised for capital investment, paying
dividends, or repaying borrowings. The lower inflow in FY23 reflects the
lower operating profit for the year.
Number of UK apprentices
(Continuing operations)
52
FY23
FY22
FY21
52
39
30
We are committed to offering opportunities to young people in all the
communities in which we operate and we seek to provide relevant
apprenticeships in which they can develop skills that will support their
personal growth and provide skilled capacity to the business.
NON-FINANCIAL KPIs
Carr's Group plc
| Annual Report & Accounts 2023
19
Gross margin
(Continuing operations)
22.5%
FY23
FY22
FY21
Adjusted Group operating margin
(Continuing operations)
22.5%
23.8%
25.9%
5.6%
FY23
FY22
FY21
5.6%
9.6%
9.2%
The Group’s gross margin is impacted by increased revenues, specifically
what level of increased raw materials costs can be passed through to
selling prices. The extraordinary increase in raw materials in Speciality
Agriculture is the predominant factor in the decrease in gross margin in
the current year, while an increased level of material content in some of
our Engineering contracts is suppressing the margin in that division when
compared to last year.
The operating margin reflects the gross margin achieved, as well as the
distribution costs and administrative expenses required to support our
operations. The decrease against last year primarily reflects the reduction
in adjusted operating profit before tax, despite increased revenue, in the
Speciality Agriculture division.
Return on net assets
(Continuing operations)
Net (cash)/debt to adjusted EBITDA
(Continuing operations)
7.0%
FY23
FY22
FY21
7.0%
12.6%
12.3%
(0.38)
(0.38)
FY23
0.93
FY22
FY21
0.48
This calculation takes adjusted profit before taxation generated over the
assets used to deliver that profit. The decrease in the current year reflects
the lower adjusted profit before taxation in the year, with net assets (for
continuing operations only) remaining relatively flat beyond the improved
net debt position year on year.
This reflects the ability of the Group to service its debt, with the negative
measurement at the end of FY23 reflecting the net cash position of the
Group at the balance sheet date.
Reportable Incident rate
(Continuing operations)
Intensity metric (tCO2e per £m turnover)
(Continuing operations)
1.23
FY23
FY22*
FY21*
1.23
1.80
1.77
49
FY23
FY22**
FY21**
49
62
66
We ensure that information relating to all injuries and potential incidents,
no matter how serious, is properly captured and reported to enable us to
continually improve the health and safety of our people whilst at work. Two
RIDDOR injuries were reported in the year. Although severity of both injuries
was low, this has driven the worsening position in FY23.
We carefully monitor our carbon emissions and are developing a strategy
to ensure that these continue to reduce as we work towards achieving net
zero status in the long term.
** Prior year figures have been restated to reflect the continuing operations the Group controls.
* Prior year figures have been restated to reflect continuing operations only.
Carr's Group plc
| Annual Report & Accounts 2023
OverviewStrategic ReportCorporate GovernanceFinancial Statements 20
PRINCIPAL RISKS AND UNCERTAINTIES
OUR APPROACH IS TO MINIMISE SIGNIFICANT RISKS THAT MAY IMPACT THE
GROUP’S DELIVERY OF ITS STRATEGIC OBJECTIVES.
Our success as a Group depends upon our ability to
identify and maximise the opportunities generated by
our businesses and the markets in which we operate.
In doing so, we continue to develop an embedded
approach to risk management which puts risk and
opportunity assessment at the heart of our strategy.
Our approach to risk management
The Group has in place a structured
approach to risk management designed
to ensure a systematic and planned
approach to identifying, assessing,
mitigating, and monitoring risks.
The Board has overall responsibility
for the risk management framework.
The Board has established a clear
organisational structure with well-
defined accountabilities for the
principal risks the Group faces in
the short, medium, and long term,
across all divisions together with
emerging risks. This is overseen by the
Executive Directors, who have an active
responsibility for focusing on those
areas of risk.
Identifying risks is a continual process
and risk registers are in place at both
a Group and individual business level.
A risk scoring matrix is in place to ensure
that risks are evaluated on a consistent
basis across the Group, which considers
likelihood of occurrence and impact
based on a range of criteria, including
profit and reputational damage.
The Board regularly reviews these risks,
as well as the associated controls and
action plans.
Risk appetite
The Group will always be subject to a
variety of risks and uncertainties and
the Board believes that it is imperative
that the right balance is struck between
maintaining a control environment, to
manage these risks, and continuing to
encourage entrepreneurial behaviours
to develop businesses across both
operating divisions.
The Board’s approach is to minimise
significant risks that may impact
the Group’s delivery of its strategic
objectives. While the Executive
Directors have sufficient authority to
ensure the Group can operate efficiently
and effectively, those decisions that
could have a material impact on the
Group are reviewed as and when
required at Board meetings.
Board’s assessment of
compliance with the risk
management framework
The Board regularly carries out an
assessment of the principal risks
together with any emerging risks. This
is supported by the Audit Committee
which undertakes an annual review of
the risk management system. During
the year, the Group risk framework has
transitioned from the system previously
used to a more collaborative process,
designed to provide a complete view
of risks, across the Group, on a timelier
basis. The Board has reviewed the new
process as it has developed during
the year and has concluded that risks
have been adequately identified and
managed.
The Board also considers the internal
controls in place across the Group
and whether these provide assurance
over the Group’s risk management
framework. During the year, no
significant failings or weaknesses in
the system of internal control or risk
management framework were reported
Carr's Group plc
| Annual Report & Accounts 2023
by internal audit activities or during
reviews performed by other senior
members of the finance function. The
Audit Committee’s review concluded
that key internal controls were
appropriate (details contained in the
Audit Committee Report on page 76).
Principal risk factors
Our business operates across two
distinct sectors and serves a wide
variety of industries, making it subject to
a wide range of risks and uncertainties.
On the following pages we have
identified the risks we regard as most
significant to the Group as well as steps
being taken to mitigate these risks
where possible. We acknowledge that
we may not be successful in deploying
some or all of these mitigating actions.
In circumstances where these risks
occur or are not successfully mitigated,
our cash flow, operating results and
reputation could be materially adversely
affected.
Following the sale of the Agricultural
Supplies division, we re-evaluated
our principal risks and uncertainties,
taking into account the structure of the
continuing Group and the strategy for
those businesses. The risks identified
on the following pages are those
deemed most critical to the Group,
with the potential to impact either one
or both operating divisions. In most
cases, the likely impact and severity of
the risks will differ across the divisions,
with those deemed material to the
Group performance identified in the
table following.
21
Change in risk (increase/decrease/no change)
Risk
Description of the risk
What we are doing to manage the risk
Reliance on key
customers and
customer demand
The Speciality Agriculture division has reliance on
a specific range of products, geographic markets
and customers, making it more sensitive to the risk
of external factors causing an adverse change in
demand and impacting revenue and margins.
While the global sales reach of the Engineering
division makes it less susceptible to these external
factors, it is primarily focussed on delivering to the
nuclear and defence sectors.
Political and
external societal
factors
Supply Chain
and Operations
Changes caused by the political environment
impact the markets we operate in. Current risks
being tracked include farming policies incentivising
alternate land use and risks that free trade
agreements with non-UK countries present import
competitions.
The increasing importance of environmental
sustainability creates risks around the ingredients
of products we sell and/or increased regulation on
materials used in manufacture.
The operation of manufacturing plants and
engineering facilities involves risks that could cause
a temporary or permanent stoppage in production,
sufficiently significant to have a material adverse
effect on the Group.
The Group may be affected by the unavailability of
critical raw materials or components through failure
to supply, availability or quality of materials, or due to
an overreliance on an individual supplier.
The Group has strong brands and long-established
relationships with key customers to ensure that
demands and expectations are met.
The Group is continually working on identifying new
markets, products, and opportunities to expand the
customer base of its businesses in both divisions.
The Group operates in diverse worldwide markets
which provide resilience against difficulties faced by
any single market or economy. The businesses are
managed flexibly to react to changing demands in
their own sector.
We monitor changes to legislative requirements and
consider the impact these could have on the markets
in which we operate and our product portfolio.
Ongoing desire for decarbonisation leads to a
greater requirement for biofuels, putting more
pressure on molasses supply. To manage this risk
we continue to investigate potential substitutes for
molasses.
The Group has business continuity arrangements in
place to enable continuity of supply, as quickly as
practicable, of product to customers in the event of a
natural disaster or major equipment or plant failure.
A programme of insurance is also in place to protect
against the cost of major business interruptions.
The Group has mitigants in place to manage risk of
supplier dependencies. These include:
– strategic long-term relationships with suppliers;
– multiple-source suppliers for key ingredients or
components;
– raw material and forward energy purchasing
policies where possible to provide security of
supply and costs; and
– case monitoring of contract execution to ensure
supply is within agreed terms.
Legal, regulatory
and reputational
There is a risk that failures in our quality
management system could mean Speciality
Agriculture products do not meet legal and
regulatory requirements.
There is a robust process for product registrations
within Speciality Agriculture. Changes in the
regulatory environment are monitored and
responded to.
Engineering projects carry risks associated with
potential margin erosion and/or unfavourable
contractual terms.
The Engineering division has a well-established bid
review process, including protocol for Board review
of major bids.
The reputation of our Engineering businesses
is founded on the quality of their products and
services. These are often used in hazardous
environments, increasing the potential risk to
reputation caused by any product failure.
Engineering businesses have robust quality and
stakeholder management processes. There has also
been investment in training of staff and equipment
to recognise any potential problems through the
production process, all supported by experienced,
qualified personnel embedded within each business.
Carr's Group plc
| Annual Report & Accounts 2023
OverviewStrategic ReportCorporate GovernanceFinancial Statements 22
PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
Change in risk (increase/decrease/no change)
Risk
Description of the risk
What we are doing to manage the risk
The health and safety of people in the workplace
remains of paramount importance. The Board
considers health and safety performance a
priority and at each meeting reviews activities and
improvements as part of the Group’s health and
safety strategy.
Health and safety practices continue to improve
across the Group with the aim of establishing a
learning culture in this area. Hazard identification
and near miss reporting are actively encouraged,
supported by effective incident learning events and
communication of outputs.
This is supported by regular health and safety audits
at all sites and a wider competency programme for
all staff, based on accredited training and workplace
supervision. The Group also has an occupational
health programme in place for all employees.
The Group has remuneration policies designed to
attract and retain employees with the ability and
experience to execute the Group’s strategy.
Performance Management discipline has been
reintroduced to underpin a renewed focus on
developing a career with Carr’s, including on-
boarding plans, development plans for internal,
promoted candidates and a fresh approach to talent
and succession. The output of this will be available to
the Board during FY24.
The Group undertakes a range of employee
engagement initiatives with a view to maintaining
positive workplace cultures and good working
environments.
Development courses and programmes are in place,
and an e-Learning system is available with a suite of
modules on offer – some of which are mandatory.
We have introduced expiry dates for mandatory
courses to keep knowledge fresh and current.
Our Engineering businesses in the UK and Germany
offer apprenticeship schemes and placements
providing practical training alongside further
education. The Engineering business in the UK has
partnered with a local training provider to grow
the skills academy to support future recruitment
requirements, both at Carr’s and in this sector more
generally.
The Group has a comprehensive suite of IT security
solutions in place, which are reviewed and tested
by specialist third parties where appropriate. These
have been further updated and improved during the
year in response to potential new threats.
Major system development projects are subject to
appropriate project governance arrangements.
Health and safety
Health and safety hazards that could cause harm to
customers, employees or the general public.
People
The knowledge, experience and skills of our
employees are central to the success of the Group.
We must attract, integrate, and retain the talent
required to fulfil our strategic growth ambitions.
The inability to retain key knowledge and capability
as well as adequately plan for succession could have
a negative impact on the Group’s performance.
IT and
Cyber-Security
The Group, like most organisations, remains
susceptible to cyber-attacks with the risk of financial
loss and threat to the overall confidentiality of data
in systems.
The Group relies on information technology and key
systems to support the businesses. These systems
must be secure, reliable and efficient to support the
businesses achieving their objectives.
Carr's Group plc
| Annual Report & Accounts 2023
23
Risk
Description of the risk
What we are doing to manage the risk
Treasury
Climate Change*
Emerging Risks
Economic
We are exposed to a variety of financial risks in
relation to treasury. The Group must ensure that
it has an adequate level of facilities to provide
sufficient funding to operate its businesses and
develop growth opportunities.
Changes to the value of currencies can fluctuate
widely and could have a significant impact on
the division’s results. Furthermore, because the
Group has international businesses, it is subject to
exchange risks in the translation of the underlying
net assets and earnings of its foreign subsidiaries
and joint ventures.
The levels of facilities are regularly reviewed by the
CFO, and these are also regularly reported to the
Board.
The Group’s banking facilities have recently been
renewed and expire in December 2026. During the
year the Group maintained a mix of fixed rate debt,
primarily finance leases, and floating rate debt which
were used to fund operations and make returns to
shareholders.
The level of debt and of cash held is monitored and
assessed against forecast changes in interest rates
and forward guidance from interest rate setting
authorities.
Operating in the agriculture sector, climate change
(both physical and transitional) can have an impact
on the performance of the Group. Such impact can
include the cost of raw materials as well as the
sustainability of raw material supplies, farming and
manufacturing operations, and customer demand for
the Group’s products. Regulatory requirements and
sustainability targets can also impact demand.
The impact of climate change has also been
considered in our Engineering business where our
precision engineering business currently operates
in the oil and gas sector, a sector in which there are
short to medium-term societal pressures to transition
to green energy and longer-term transitional risk to
our product development and growth.
The Group is geographically and operationally
diverse and has a focus on international growth
markets. The Group carefully manages its
procurement of raw materials, utilising ethically
managed and sustainable sources (where possible),
and invests in the development of products which
are tailored to different farming conditions.
To address the longer-term transitional risk in the
oil and gas sector, we have taken steps to diversify
the sectors in which our precision engineering
business operates. These steps include employing
new business development resources and obtaining
appropriate certification to work in the aerospace,
defence and nuclear engineering sectors.
Continuing high inflation is impacting margins as
well as reducing the spending power of customers
in the agriculture sector. The division's, premium,
supplemental products are up against cheaper, less
effective products or the option of ‘do nothing’.
Our operationally diverse business model and ability
to monitor customer trends allows us to identify and
adapt to fluctuations in the economy that increase
or decrease demand for our products. This means
we are able to plan for and cope with recessionary
periods in key markets, as well as increases in the
general price levels of goods and services.
* Further details of climate related risks and opportunities can be found in our TCFD disclosures on pages 38 to 44 (inclusive).
Carr's Group plc
| Annual Report & Accounts 2023
OverviewStrategic ReportCorporate GovernanceFinancial Statements 24
VIABILITY STATEMENT
In accordance with provision 31 of the UK Corporate
Governance Code 2018, the Directors have assessed the
viability of the Group over a three-year period to August
2026, taking account of the current financial position,
future prospects and the principal risks, as detailed on
pages 20 to 23 (inclusive).
Following the disposal of the
Agricultural Supplies division, the
Group’s focus is on improving the
performance of the business units
within the Speciality Agriculture and
Engineering divisions. The differing
markets and business cycles for these
two divisions offers a diverse range of
opportunities, which are captured as
part of the Group’s strategic planning
process, led by the Chief Executive.
The Board has participated in strategic
reviews across both divisions, assessing
and challenging proposals and bringing
perspective on the external markets and
wider economic environment.
The output of this process includes a
strategic plan and detailed financial
forecasts, both of which consider the
three-year period to August 2026. The
first year of these plans is the Group’s
operating budget for the year to 31
August 2024, which is subject to review
and re-forecast (if necessary) on a
regular basis throughout the financial
year.
The Group has been in a net cash
position since the disposal of the
Agricultural Supplies division, although
it has retained bank facilities and leasing
arrangements to allow it to fund future
plans if required. The bank facilities have
a range of maturity and renewal dates,
some of which fall within the three-year
period covered by the viability review. In
undertaking this assessment, it has been
assumed that the facilities are renewed
as they fall due for review on the same
terms as the existing agreements.
The Board believes that a period of
three years to 31 August 2026 is the
most appropriate for the purpose of
a viability assessment, based on the
visibility provided by the order book and
opportunity pipeline in the Engineering
division, as well as the predictability that
historic herd cycles in the Speciality
Agriculture division provide in the
near term.
The Group’s principal risks are set
out on pages 20 to 23 (inclusive). The
principal risks table summarises those
matters that could prevent the Group
from delivering on its strategy. A number
of other aspects of the principal risks
– because of their nature or potential
impact – could also threaten the
Group’s ability to continue in business
in its current form if they were to occur.
Of the principal risks identified, the two
most important to the assessment of the
viability of the Group are:
1. Customer demand and reliance on
key customers
2. Supply chain constraints and delays
impacting operations
From the detailed modelling
undertaken, it was determined that
neither of these risks, either in isolation
or in aggregation, would compromise
the Group’s viability.
As part of our Task Force on Climate-
related Financial Disclosures (“TCFD”)
the Group has assessed potential
financial impacts from climate change
to the business. The TCFD disclosures
consider how financial performance
may be impacted by climate change
including supply chain disruption,
inflation in raw material costs and any
significant changes in climate-related
policy (as well as any associated
increase in regulatory costs). None of
the physical and transition risks which
are considered material to our business
would present a risk to viability over the
planning period. These risks are detailed
on pages 20 to 23 (inclusive) and 38 to
44 (inclusive).
Although the strategic plan reflects the
Directors’ best estimate of the future
prospects of the business, the potential
impact on the Group of a number
of scenarios over and above those
included in the plan has been tested,
by quantifying their financial impact and
overlaying this on the detailed financial
forecasts. These scenarios represent
severe but plausible circumstances that
the Group could experience.
Carr's Group plc
| Annual Report & Accounts 2023
The scenarios tested included
significant reductions in profitability and
associated cash flows associated with
the risks highlighted above. These were
tested individually and in aggregate,
with the results highlighting that the
Group would be able to withstand the
impact of these scenarios occurring
over the period of the financial forecasts.
Changes to operations to mitigate these
scenarios, and maintain cashflows, can
be further supported by reducing capital
expenditure and dividend payments to
help ensure the Group’s viability.
The Group’s main banking facilities were
renewed in December 2023 and fall
due for expiry in December 2026 which
is after the end of the viability period
under review.
Based on their assessment of prospects
and viability above, the Directors confirm
that they have a reasonable expectation
that the Group will be able to continue
in operation and meet its liabilities as
they fall due over the three-year period
ending 31 August 2026. The Directors
also considered it appropriate to
prepare the financial statements on the
going concern basis, as explained in the
Basis of accounting, and Going concern
paragraphs in the Principal Accounting
Policies on page 128 of the accounts.
RESPONSIBLE AND SUSTAINABLE BUSINESS REPORT
25
The key areas which we believe
are material to ensuring a
sustainable business are:
PEOPLE
Our people are the primary
consideration in everything we do
Read more on pages 26 and 27
HEALTH AND SAFETY
Safety culture is key to ensuring that
our sites are safe places to work
Read more on pages 28 and 29
RESPONSIBLE POLICIES
AND PRACTICES
We have an ethical approach
to doing business
Read more on pages 30 and 31
SOCIAL
RESPONSIBILITY
We recognise the importance of
working within and contributing to
local communities
Read more on page 32
GOVERNANCE
Good governance is essential
to ensure the Group is operated in a
responsible and sustainable manner
Read more on page 33
ENVIRONMENT
We are committed to minimising
the negative impact we make on the
environment
Read more on pages 34 to 44
(inclusive)
COMMITTED TO BEING
A RESPONSIBLE AND
SUSTAINABLE BUSINESS
In line with our Group strategy,
as a responsible business:
we FOCUS…
on key areas which are material
to our business and where we
can make a positive impact.
we continually seek to IMPROVE…
standards in everything that we do.
we DELIVER…
through our ability to inspire
trust and earn the confidence
of our stakeholders.
Carr's Group plc
| Annual Report & Accounts 2023
OverviewStrategic ReportCorporate GovernanceFinancial Statements 26
RESPONSIBLE AND SUSTAINABLE BUSINESS REPORT CONTINUED
PEOPLE
As at the end of FY23, there were 650 employees
across the Group with 420 located in the UK, and 230
overseas. Building and retaining a skilled and motivated
workforce is crucial for the Group and we understand the
importance of investing in our people and supporting
them, ensuring that we have the appropriate skills the
Group will need in the future.
Employee engagement
The Group has undergone some
significant changes in the past few years
and the need for clear communication
with employees has been key.
Immediately prior to the start of FY23,
a Communications Manager was
appointed and working closely with
HR and operational leadership, have
created and implemented an internal
communications strategy, reinforcing a
commitment to open dialogue and mutual
understanding throughout the Group.
Ensuring access to communications
has been a priority of this strategy with
ongoing efforts to ensure office-based
colleagues have access to the Group’s
intranet – CarrsConnect. It is where key
messages are posted, and employee
news is shared. During FY23, the
intranet platform has been expanded to
include news from across the divisions
and sites, an interactive health and
safety platform, environment updates,
facts and figures, a more accessible
approach to benefits and advice, events
and training schedules, a database of
policies and procedures, and a Carr’s
Week sharing platform (further details
can be found on page 32). CarrsConnect
is constantly adapting to provide easy
access to information for colleagues as
we explore more ways to communicate
across the businesses.
Across the Group, communication plans
are in place to ensure efficient sharing of
information on all work levels. Electronic
noticeboards were also introduced at
sites, ensuring consistent and up-to-
date messaging. Additionally, some
sites host pre-shift meetings to ensure
any new information is communicated
to colleagues; management are also
present at these meetings.
Communication with colleagues is
essential for the Board to empower
colleagues and foster inclusivity.
Members of the Board have visited
various sites during FY23 to meet the
teams and view the operations of the
Group. Board meetings are also held
at operational sites, giving the Board a
chance to spend time with colleagues.
Various members of the Board have also
attended events and training, including
former CEO Peter Page showing
support for the Carr’s apprentices at
the end of an Outward-Bound activity
course organised for the apprentices.
Further information on how the Board
has engaged with employees can be
found on pages 62 to 66 (inclusive).
Employee well-being
The Employee Assistance Programme
was launched in 2021 covering all
UK employees with alternative local
programmes available for Germany and
USA. The programme has continued to
support colleagues through FY23 with
a range of support for mental health,
broader financial issues, legal support,
and medical support. Colleagues have
access to a 24-hour helpline and an
online portal where information, advice
and newsletters are published.
Promotion of the Employee Assistance
Programme was increased during
FY23 to help support colleagues
through the various challenges they
have faced, including the cost-of-
living crisis. This programme provided
practical information on reducing costs,
and details of external contacts for
support and advice. Carr’s supported
colleagues with the cost of living where
need was identified and information
on government schemes and external
support services and advice articles
Carr's Group plc
| Annual Report & Accounts 2023
were also published on the intranet,
in emails and on printed news posts
displayed on site noticeboards.
Employee development
Carr’s is committed to promoting and
nurturing a thriving work environment,
with an emphasis on internal promotions
and recognising the talent within
existing teams. This is further supported
through flexible working practices that
allow colleagues to have a work life
balance.
One initiative is the Carr’s Engineering
Skills Academy, where we actively
support home-grown apprentices and
their professional development. By
investing in the growth of employees
and the community at large, we are
confident in the Group’s ability to
achieve sustainable success in the
years ahead.
Learning and development continue
to be focal points at all levels,
for new and existing colleagues.
Colleagues are required to complete
mandatory training modules upon
joining the Group and periodically
throughout their career with Carr’s.
We reviewed and made improvements
to the onboarding process for quicker
integration, including an interactive
booklet available to all colleagues at all
times via the intranet and a Microsoft
Teams™-based induction process to
increase accessibility in a multilocation
business. We have also introduced a
refreshed performance review system
by making the process more concise and
efficient. This will be further developed
in 2024. Additionally, we undertook a
thorough review of mandatory training in
FY23 to ensure its relevance to individual
27
By investing in the growth of employees and
the community at large, we are confident in the
Group’s ability to achieve sustainable success in
the years ahead.”
roles and effectiveness in meeting
evolving organisational needs, which
led to a more tailored approach for
our colleagues.
A range of external professional
qualifications were also supported,
including a Cambridge University course
in Business Sustainability Management.
The Group’s e-learning capability
continues to expand, including a new
environment awareness course, and
updates have been made in health and
safety modules to keep them up to date
with current legislation. There are now
ten mandatory training modules, which
are revisited by colleagues on either a
yearly or two-yearly basis.
Employee recruitment
and rewards
The Group’s approach to colleague
rewards is aligned with national
standards, and we regularly review
the rewards package to ensure they
remain competitive. In the UK we have a
comprehensive benefit package which
includes the Employee Assistance
Programme, Cycle Scheme, Tech
Scheme, Give-As-You-Earn, Carr’s
Go Green electronic vehicle scheme
and a choice of two pension options.
Internationally, there are localised
benefits which include coffee and
lunch allowance, subsidised gym
membership, cycle to work scheme
and flexitime.
Recruitment processes for leadership
and senior roles throughout the Group
are overseen by senior HR leadership.
Where possible both internal and
external candidates are encouraged
to apply for roles in the Group. In
certain cases, independent recruitment
consultants are brought in. Throughout
the year, the senior HR leadership
evaluates succession planning for
senior management and key personnel,
as well as leadership development
initiatives and training programmes
across the Group.
The Sharesave (SAYE) scheme, available
to all qualifying employees, including
Executives, offers a valuable opportunity
to participate in any success of the
Group. This HMRC-approved initiative is
based on a three-year savings contract,
which allows participants to purchase
shares at a discounted price after the
specified period. No performance
conditions are attached, offering a
straightforward path for participants to
exercise their options under the SAYE
scheme.
Diversity and inclusion
Carr’s is committed to fostering a
culture of inclusivity and embracing
the strength that comes from diverse
perspectives, which is reflected in
the Group’s approach to recruitment
and internal rewards and promotions.
We have clear policies in place to
ensure that all decisions relating to
employment practices will be objective,
free from bias, and based upon the
individual needs of the businesses
within the Group. The Group’s Equal
Opportunities Policy encompasses
existing colleagues as well as potential
colleagues in the recruitment process
and our interview and recruitment
training aligns with our policies and
focuses on ensuring that we select the
right person for every role.
There is a Board Diversity Policy which
supports the Group’s commitment
to ensuring diverse representation at
Board and Committee level. Details
on employee gender diversity can be
found on pages 31, 53 and 71 and details
on Board diversity and inclusion can be
found on page 53 and in the Nomination
Committee Report on pages 67 to 71
(inclusive).
We regularly monitor our gender
statistics to ensure that they are
reflective of the broader engineering
and agriculture industries, while
remaining mindful that these industries
currently contain a predominately male
workforce. The Group recognises the
benefits of attracting the broadest and
most diverse range of candidates for
all roles within our businesses, and
the benefit such wide-ranging skills,
expertise and experiences brings to
the Group.
Carr's Group plc
| Annual Report & Accounts 2023
OverviewStrategic ReportCorporate GovernanceFinancial Statements 28
RESPONSIBLE AND SUSTAINABLE BUSINESS REPORT CONTINUED
HEALTH AND SAFETY
Health and safety (“H&S”) remains a priority
for the Carr’s businesses. We operate a
learning culture to encourage employees
and contractors to share ideas and concerns.
In FY23, as part of our cultural safety
transformation, our H&S audit process
was reviewed and a multi-tier approach
adopted which would underpin our
“compliance to care” approach to H&S.
Care
TIER 3
Tier 3 - Tier 2 plus sustainable
H&S Performance (Develop an
organisation of H&S
Leaders at all levels)
Tier 2 - Tier 1 plus a focused
view on low probability/
high severity activities along
with psychological safety
transformation
Tier 1 - Core
Compliance
(Develop a system
for H&S Continuous
Improvement)
TIER 3
TIER 2
TIER 2
TIER 1
Co m pliance
Carr's Group plc
| Annual Report & Accounts 2023
29
H&S auditing and
continuous improvement
Our approach to H&S is rooted
in a consistent focus on human
performance. The aim is to improve
how the Group anticipates work will be
undertaken safely and how the work is
actually carried out.
During FY23 we have been focussed
on conducting Tier-1 compliance-
based assessments across the Group.
Through the focus on compliance and
continuous improvement we have seen
an increase in worker engagement,
on average from less than 5% of the
workforce to more than 30% with an aim
of reaching 80% during Tier 2 phase. Ten
planned Tier-1 audits were completed in
FY23 across the UK, Germany, and USA
operating businesses. In addition, three
non-operated joint ventures elected
to learn from the Group’s approach
and embed elements into their
improvement plans. We also work with
many contractors and suppliers, so they
understand Carr’s safety requirements.
As the business units now progress to
the next Tier of the audit programme,
we are focussing on activities which
have high potential of death or serious
injury, with low probability as well
as psychological safety, including
establishing safety mindsets and
behaviours, safety through leadership,
pre-work processes, and furthering our
work with third-party contractors and
clients.
In addition, safety culture assessments
were also completed during FY23 as
part of the Group’s development of
a culture of care. With the support of
an external business partner, who are
industry-leading experts on safety
culture, both the Engineering division
and the Speciality Agriculture division
were sampled, with two focused
consultations and training sessions
across the whole present workforce.
This has allowed us to understand
current perceptions of the level of
safety culture, benchmark against other
organisations, H&S cultures, understand
potential barriers to improvement of the
safety culture and develop action plans
both tactical and strategic. Ten focused
consultations and training sessions are
planned for FY24 to further entrench our
safety culture.
Health and Safety key metrics
Incidents
FY2023
FY2022
FY2021
Lost Time Incident Rate (LTIR)*100k
0.61
0.18
0.26
Total Reportable Incident Rate
(TRIR)/million hours
All injuries
RIDDOR
1.23
56
2
1.8
47
4
Injury Incident Frequency Rate
3.44
1.89
1.77
46
4
2.03
TRIR*1 million hours (fatalities; days away
from work; restricted work; medical treatment
beyond first aid, loss of consciousness or a
significant injury, illness or disease diagnosed
by a doctor or physician).
4.30
3.32
4.97
Performance Metric
Audit action close out
UOM
%
Target
100
Hazard Conditions/Acts (2 per worker/annum)
Number
2/worker
Safety Committee Meetings/Events
Training
Number
1
%
100
Leadership Safety Inspections (ASI) completed
Number
4
Incident investigation close out
%
100
* Prior year figures have been restated to reflect the continuing operations only.
H&S training and competence
H&S performance
Carr’s is dedicated to preventing
incidents by equipping individuals with
the necessary skills and maintaining
robust safety measures. We expect
colleagues to consider two aspects
when performing their tasks: the hazards
that could potentially cause harm, and
the effectiveness of the barriers in
place to avoid harm should something
go wrong. Mandatory H&S e-learning
training continues for all new joiners
and we have ongoing safety awareness
programmes across our businesses.
Each site is developing site-specific
training to enable focus on statutory
and specialist training for their specific
area of operation. One of our operational
sites undertakes an annual safety
standdown, where production is halted
to focus on safety training, education
and culture. This gives employees and
their management teams time to assess
and reflect on incident prevention
and working together to improve
performance.
We encourage colleagues to improve,
enhance individual capabilities, learn
from mistakes, errors, and successes,
and speak up without being punished.
This was underpinned during FY23
with a focus on learning events when
investigating incidents. This has created
greater interest and encouraged
better reporting of potential and minor
events, with the number of potential
incidents reported in FY23 being more
than double the FY22 period. This has
also meant a greater opportunity to
learn and prevent these events being
repeated and leading to more serious
incidents.
Whilst there was a significant increase
in reporting activity and desire to learn
as trust is built, the Group delivered a
Reportable Incident Rate/million hours
worked of 1.23 (see table above). Two
RIDDOR injuries were recorded during
FY23 for the continuing Group, but
fortunately severity was low. The trends
are shown in the table.
Carr's Group plc
| Annual Report & Accounts 2023
OverviewStrategic ReportCorporate GovernanceFinancial Statements 30
RESPONSIBLE AND SUSTAINABLE BUSINESS REPORT CONTINUED
RESPONSIBLE BUSINESS POLICIES & PRACTICES
As a Group, we have a long-standing commitment to high
standards and professional behaviour. This commitment
applies to our Group, but also extends to our suppliers, and
our partners. We firmly believe that our continued success
is dependent on our ability to inspire trust and earn the
confidence of our stakeholders and we align ourselves in the
best way possible to achieve this, with responsibility at the
forefront of our approach. We have clear standards on what is
expected, and we set these expectations out in the policies
that guide what we do and how we work with others ensuring
ethical business practice. On the next pages are further details
on the Group’s responsible policies and practices.
Risk management
Training
The Group’s policies and training
strengthen the risk management
framework that is embedded across
the businesses. In addition to the
corporate risk register governed by the
Board, business unit and functional risk
registers have been developed across
our teams, allowing a wide range of
employees to contribute to our risk
assessment and assurance processes.
Colleagues are encouraged to report all
risks. For more details see pages 20 to
23 (inclusive).
Policies
We have a series of well developed
policies which guide our everyday
operations and set clear standards
on what is expected. Employees are
introduced to these policies in our
induction programme and training
modules, and they can access these
policies during their employment via
our intranet service – CarrsConnect.
In addition to our policies, the Code
of Ethics, issued to all employees in
spring 2022 and updated during FY23
establishes a cohesive, consistent
framework for the way we behave and
engage with the various stakeholders.
For more details on the Code of Ethics,
see page opposite.
As part of their induction to the
Group, all employees undertake
mandatory training modules which are
revised and revisited annually. These
training modules focus on ensuring
that colleagues at all levels of our
businesses act safely, professionally,
fairly and with integrity. Employees
are required to complete mandatory
modules which are available to
colleagues online. For more details,
see pages 26, 27 and 29.
Data security and privacy
Our privacy statement outlines the
Group’s policy on managing the
personal data of all individuals sharing
their personal information with us. In the
year under review, through continuous
monitoring, we identified several
attempted cyber-attacks on Group
businesses, but no leaks, thefts, or
losses of customer data were identified
as a result of these attacks. In the same
period, no substantiated complaints
were received concerning breaches of
customer privacy.
Ethics
In 2022 the Group launched its Code of
Ethics across all sites globally. The Code
of Ethics brings together Group-wide
policies and best practice regarding a
range of circumstances which could
potentially be encountered in the
modern workplace.
The Code was launched alongside a
programme of training with the aim of
exploring the contents of the code and
to raise awareness of it within Group.
The Group is committed to applying
high standards and professional
behaviour to every decision it makes
at all levels of the organisation, and
the Code of Ethics provides us with a
framework for continuous improvement
in this area. The Code of Ethics was
updated in 2023 following the disposal
of the Agricultural Supplies division.
Anti-bribery
Carr’s operates and encourages
a culture of honesty and openness in
its businesses. The Group is strongly
opposed to unethical behaviours
including bribery and other corruption;
these behaviours are prevented
through a robust framework of controls,
including standardised policies and
transparent practices, which every
employee is made aware of. The
Group regularly reviews its policies
and practices to ensure that a positive
culture within the businesses remains a
priority for everyone.
Human rights
Carr’s is committed to the sustainable
development of its business and
to continual improvement in its
management of ethical issues, this
includes ensuring that its business and
supply chain remain free from modern
slavery and human trafficking.
Carr's Group plc
| Annual Report & Accounts 2023
31
Whilst the risk of modern slavery and
human trafficking within the Group and
its supply chain is assessed as low,
Carr’s remains vigilant to this issue
and is aware that the risk of modern
slavery appearing in supply chains
is ever changing and can increase,
particularly as the Group continues to
grow. Carr’s will not undertake business
with any third parties where concerns
arise and will accordingly report
such circumstances to appropriate
authorities.
The Group operates internal policies,
supported by training, on the issue of
modern slavery which both protect
against risks and promote awareness.
The Group’s Anti-slavery and Human
Trafficking Statement is published online
at www.carrsgroup-ir.com/content/
corporate/company-policies.
Tax transparency
The Group is committed to tax
transparency. Its aim is to comply fully
with all tax disclosure, payment, and
filing requirements in every country
in which it operates and to paying
appropriate amounts of tax. The
Group’s Tax Strategy and Tax Code
of Conduct is published online at
www.carrsgroup-ir.com/content/
corporate/company-policies.
Whistle blowing
In addition to the Group’s policies and
monitoring procedures, the Group also
has an independent whistleblowing
service, SeeHearSpeakUp, which is
made available to all personnel 24 hours
a day, 7 days a week. This enables
employees at any of the Group’s global
locations to report concerns easily,
anonymously, and in total confidence.
The Group provides training in respect
of whistleblowing and how to report any
concerns within our employee induction
programme.
Conflicts of interest
The Group’s policies require the regular
declaration of gifts and hospitality by
all personnel. Acceptance of gifts and
hospitality are subject to strict rules
underpinned by the policy, and any
matters which could give rise to a
conflict of interest must be considered
and approved before acceptance
can occur.
Charitable giving
The Group has a charitable donations
policy, which provides guidance when
using Company funds for financial
donations. The policy reflects the
interests of all stakeholders ensuring
an accountable and responsible use
of funds whilst aiming to be a reliable
partner to charities supporting good
causes.
Diversity and equal opportunities
The Company endeavours to
continuously improve our working
environment to ensure it is free
from discrimination, harassment,
or victimisation. The Group actively
promotes a working environment in
which everyone receives fair treatment
and equal opportunities regardless of
matters such as gender, race, colour,
nationality, religion, or belief, marital
or civil partnership status, family
status, pregnancy or maternity, sexual
orientation, gender reassignment,
disability, or age. Further information on
diversity and inclusion can be found on
pages 27, 53, 71 and in the Nomination
Committee Report on pages 67 to 71
(inclusive).
Health and safety
Health and safety is a key priority. It is
essential that a safe place to work is
provided for our employees and visitors
to sites. Mandatory training modules for
employees include Manual Handling,
Slips Trips and Falls, Working Safely
and Workplace Health & Safety. Each
site has also developed specific health
and safety training particular to their
operational areas. More information
on health and safety can be found on
pages 28 and 29.
The Group is committed to applying high
standards and professional behaviour to every
decision it makes at all levels of the organisation.”
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| Annual Report & Accounts 2023
OverviewStrategic ReportCorporate GovernanceFinancial Statements 32
RESPONSIBLE AND SUSTAINABLE BUSINESS REPORT CONTINUED
SOCIAL RESPONSIBILITY
As a responsible business, collaborating with our local
communities is crucial. We work with local communities
through a variety of forms, including charitable financial
contributions, fundraising, collaborative initiatives, and
voluntary efforts.
Local communities
Carr’s Week
In June 2023 the Group launched its
inaugural Carr’s Week, where the Carr’s
Group heritage and the remarkable
community work and philanthropy
of Jonathan Dodgson Carr, founder
of Carr’s Milling Industries plc (now
Carr’s Group plc), was honoured. Held
in June, this special event marked the
beginning of an annual tradition to pay
tribute to his commitment to making
a positive impact on the community
and the environment across the Group.
Throughout Carr’s Week, a series
of activities and initiatives including
voluntary work placements were held,
with monies raised by colleagues
donated towards various community
projects and charities. A key highlight of
Carr’s Week was the recruitment drive
for volunteers to join the Chapter One
initiative, an early years reading support
charity, reflecting our dedication to
empowering individuals to engage
in meaningful community service
activities.
Colleagues in the Group’s businesses
in the UK and internationally regularly
raise money for local, national and
international projects and charities
through organising food drives,
bake sales, and charity walks, and
volunteering their time with local
community initiatives. The Carr’s
Engineering Skills Academy, in
partnership with Lakes College,
is reflective of our dedication to
a sustainable future. By nurturing
apprenticeships within Carr’s
Engineering division and extending
support to local businesses, apprentices
benefit from extensive training, ensuring
they are equipped to excel in their
careers.
In FY23, Carr’s Group continued its
funding to Carlisle Youth Zone and to
the Cumbria Community Foundation,
which it has supported since 2014.
In the USA, Animal Feed Supplement,
Inc. donated monies to various local and
regional charities, including the Belle
Fourche volunteer fire department,
South Dakota Future Farmers of
America, Parents Who Care, Make-
A-Wish Foundation, and the local
elementary school.
Carr's Group plc
| Annual Report & Accounts 2023
Throughout Carr’s
Week, a series of
activities and initiatives
including voluntary
work placements
were held, with
monies raised donated
towards various
community projects
and charities.”
33
GOVERNANCE
Good governance is essential in helping to run the Group
responsibly. It is about making sure we live up to the high
standards we set as a Group – on health and safety, the
environment, climate change, and in our relationships
with our stakeholders.
We have clear governance structures and divisions of
responsibility. The Governance Report on pages 46 to
107 (inclusive) provides further information.
Board
Audit Committee
Nomination Committee
The Board has the highest level of
oversight for environmental and
social governance and manages this
responsibility through the governance
structure outlined on pages 50 to
52 (inclusive). Environmental and
governance matters, together with
health and safety reporting are standing
agenda items at all Board meetings
and discussions on related topics
are agenda items for the Board and
Committee meetings at relevant times
throughout the financial year. The Board
also carries out regular reviews of our
corporate risk register and principal
risks, including those related to climate
change. The Board has completed an
assessment of the Group’s risks relating
to climate change, details of which can
be found on pages 20 to 23 (inclusive).
The Board regularly receives updates
from the Environmental Steering Group
(see pages 34 to 44 (inclusive)).
The Board Committees also have
delegated responsibility for various
aspects of environmental and social
matters impacting the Group as
detailed on pages 38 and 39, and in the
Corporate Governance Report on pages
46 to 107 (inclusive).
The Audit Committee is responsible
for monitoring the Group’s compliance
with climate change reporting and
reviewing the TCFD disclosures and a
report which is prepared by the Group’s
Environment and Sustainability Manager
in collaboration with the Environmental
Steering Group and Green Teams (see
below). The Audit Committee is also
responsible for reviewing the Group’s
internal controls and risk management
systems, as well as the Group’s
corporate risk register, which includes
risks related to climate change. Any
feedback from the Audit Committee
in relation to climate-related risks and
TCFD disclosures is discussed with the
Group’s Environment and Sustainability
Manager who in turn reports back to the
Environmental Steering Group and the
Green Teams.
Remuneration Committee
The Remuneration Committee
determines targets and outcomes for
performance related pay schemes
of the Executive Directors and
senior management, which include
environmental and sustainability goals.
The Committee also has oversight for
assessing performance against these
targets. For example, environmental
performance measures are linked to
awards under the Group’s Executive
Director and senior management long-
term incentive plan. See pages 78 to 102
(inclusive) for further details.
Annual Board evaluations together
with skills assessments ensure that
the performance and effectiveness
of the Board and its Committees are
regularly reviewed, and that the Board
and Board Committees possess the
right balance of skills and experience to
provide oversight for matters including
strategy execution, health and safety,
the environment and stakeholder
engagement. For further information
see pages 58 to 60 (inclusive) and 67 to
71 (inclusive).
Environmental Steering Group
The Environmental Steering Group
brings together senior colleagues across
our businesses to develop and apply
best practice throughout the Group.
It is chaired by our CEO and reports
directly to the Board. The Environmental
Steering Group is supported by Green
Teams at each of our sites. Further
details on the work of the Environmental
Steering Group and the Green Teams
can be found on pages 34 to 44
(inclusive).
Board engagement with
stakeholders
The Board is mindful of its duties to
stakeholders, including its employees,
customers, strategic partners, investors
and its communities. More information
on how the Board discharges these
duties is set out in our Corporate
Governance Report on pages 62 to 66
(inclusive).
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| Annual Report & Accounts 2023
OverviewStrategic ReportCorporate GovernanceFinancial Statements 34
RESPONSIBLE AND SUSTAINABLE BUSINESS REPORT CONTINUED
ENVIRONMENT
Our operations in various sectors actively contribute to global environmental
conservation efforts. Our involvement in the nuclear industry supports the increasing
demand for sustainable energy solutions worldwide, and our specialised agriculture
product range complements grass-based systems, which play a crucial role in the
important process of carbon sequestration.
Developing our
environmental strategy
Sustainability is essential across our
businesses, and it is important that our
colleagues support our environmental
strategy. Our approach to environment
and sustainability as a whole is included
in the new starter induction process,
and where possible, the Environment
and Sustainability Manager attends
corporate induction sessions to
answer any questions colleagues
may have. This initiative ensures that
each new employee is equipped with
the knowledge and values needed to
contribute to our environmental goals.
The establishment of the Environmental
Steering Group in February 2023
has been an integral part of our
environmental strategy. Chaired by
our CEO, and reporting directly into
the Board, this group acts as a vital
link throughout our organisation by
monitoring our targets and facilitating
the alignment of our business practices
with those objectives, based on
internal assessments of materiality and
prioritisation of topics impacting the
business. These include embedding the
Environmental Steering Group within
the Group’s governance structure,
the development of an environmental
policy statement, introduction of
Green Teams at all Carr’s Group
sites, and environmental awareness
training throughout the Group. These
objectives are continually reviewed
and developed. The Environmental
Steering Group meets monthly and
assesses the Group’s performance
by reviewing progress against agreed
actions and providing advice to the
Board in support of the development
of strategy and management of risk.
The Environmental Steering Group
comprises managing directors, and
senior leaders from various departments
including HR, Procurement, Health &
Safety, Communications, Production,
Finance, and representatives from
the Green Teams. The Environmental
Steering Group is facilitated by the
Group Environment and Sustainability
Manager, and addresses micro and
macro factors that impact the Group
and help to develop strategy.
The Environmental Steering Group
is supported by Green Teams which
have been established at all the
Group’s operational sites. Our Green
Teams are responsible for considering
resource efficiencies together with the
environmental and social impacts of
our business at a local level. They have
been crucial in promoting sustainability
and advocating and implementing
sustainable practices across our
businesses. Their dedication and
voluntary efforts highlight the Group’s
collective commitment to environmental
stewardship. These teams meet monthly
to discuss and implement eco-friendly
initiatives, and produce newsletters
to keep colleagues informed about
the latest developments. Green
Team Manager meetings are held on
a quarterly basis to collaborate on
projects and celebrate success. The
individual site Green Teams also inform
and update the Environmental Steering
Group at the monthly meetings.
Carr's Group plc
| Annual Report & Accounts 2023
Progressing our
environmental strategy
There have been some significant
milestones across the Group on our
sustainability journey during FY23
in particular:
• One of our US subsidiaries, Animal
Feed Supplement, Inc. in collaboration
with Alltech, an animal health and
nutrition specialist company, have
established a purchasing agreement
for the Bio-tub® container. BioTub® is
a container made from a patented
blend of ground straw and wood
fibres, made to ensure strength and
durability. Over time, it will break down,
degrade, and disappear, eliminating
the need for manual collection.
This not only simplifies container
management but also reduces field
debris associated with plastic and
metal alternatives. (Read more at
https://www.carrsgroup.com/biotub/)
• At Animax, the Organic Soil
Association approved the TracesureTM
sheep and cattle boluses for use by
organic farmers certified to the Soil
Association standards within the EU
until 2023, when it then reverts to the
UK only. (Read more at https://www.
carrsgroup.com/trace-element-
nutrition-dispelling-the-myths/)
• Research conducted at Aberystwyth
University has also confirmed that the
improved animal performance when
Crystalyx™ is fed leads to a significant
reduction in methane output per
kilogram of liveweight gain of almost
20%. (Read more at https://www.
carrsgroup.com/over-20-plus-years-
of-research-and-development/)
• Bendalls Engineering won the 2023
“Empowering the Next Generation”
award at the British Energy Coast
Business Cluster Awards. (Read more
at https://www.carrsgroup.com/
award-winners-empowering-the-next-
generation/)
35
The Green Teams will be investigating
employee commuting patterns,
enabling us to quantify and analyse
the associated carbon emissions.
Through this initiative, we aim to
identify opportunities to reduce the
carbon footprint linked to colleague
commuting, contributing to our overall
sustainability objectives.
We will be continuing to explore
options to enhance our packaging
practices. This involves a thorough
examination of packaging alternatives
that can minimise our carbon
footprint. By adopting eco-friendly
packaging solutions, such as the
Biotub® containers, we aim to align
our operations with environmentally
conscious practices and reduce the
environmental impact of our products
and services.
We will be undertaking initiatives
to improve energy efficiency, as
highlighted in our participation in the
ESOS reporting. This includes exploring
measures such as Voltage Optimisation
and KVA analysis to optimise energy
usage and reduce our overall energy-
related emissions.
In addition, Green Teams initiatives
implemented at some of our sites
have included the adoption of Voltage
Optimisation and ESOS (Energy Savings
Opportunities Scheme) updates to
increase energy efficiency; transitioning
to more sustainable, and where
possible, biodegradable packaging and
increasing the use of reusable plastic
pallets to minimise waste.
Training has also been developed
during FY23. In addition to environment
and sustainability being included in
the new starter induction process
there has also been increased training
on environmental matters such as
environmental spill, waste management
and tracking of waste. 5S training has
also been implemented at two of
the Engineering sites, with a view to
expanding this across the remaining
sites to enhance workplace efficiency
and safety.
Our commitment to sustainability
and environmental responsibility
extends to regular site audits that
assess our performance against
established environmental standards.
These ongoing audits are undertaken
internally during site visits by the Group
Environment & Sustainability Manager
and include areas of audit such as the
management systems in place, waste
control, emergency spill preparedness,
energy and environmental training.
External audits are carried out primarily
within the Engineering division against
the environmental standard ISO14001,
the health and safety standard ISO45001
and various other engineering standards
along with ISO9001 (quality standard).
Both internal and external audits serve
as important tools for identifying areas
of improvement and maintaining
our compliance with environmental
regulations.
To assist in capturing data on the
progress of our environmental strategy
during FY23 we also:
• Introduced a carbon reporting
platform which enables us to
comprehensively understand
and manage our carbon footprint
across the entire Group, providing
valuable insights into our
emissions and allowing us to make
informed decisions about carbon
reduction strategies.
• Supplied environmental data to the
Carbon Disclosure Project (“CDP”)
which is important for organisations
aiming to achieve transparency,
accountability, and effective risk
management in their environmental
practices. This ensures compliance
with regulations and helps to build
investor confidence. This was the
first year of reporting for the Group
and demonstrates our commitment
to transparent reporting on climate-
related matters.
• Introduced a budget control platform
for energy which allows the Group
to optimise energy costs, fostering
responsible energy consumption and
a more sustainable future.
Measuring scope 3 emissions
In line with our commitment to reducing
our indirect impact on climate change,
Carr’s are collaborating with World
Kinect Energy Services™ in developing
a scope 3 indirect measuring function
on their supply chain monitoring system.
This system will enable us to track
emissions across the supply chain,
contributing to the Group’s overall
sustainability goals and is already in
place to record scope 1 and 2 emissions,
along with direct scope 3 emissions.
Looking forward
FY23 has seen significant progress
on the Carr’s Group environmental
journey. Through strategic initiatives,
the dedication of colleagues across
the Group, and the implementation of
reporting mechanisms, we have further
developed and strengthened the
Group’s strategy and will continue on
that path of sustainable improvement.
We have a target of 3.4% energy
reduction year on year which will result
in achieving Net Zero by 2050.
As mentioned above, in 2023 we
submitted questionnaires to the
CDP. We are already preparing
for our second-year submission,
which will also include the climate
change questionnaire. This ongoing
commitment to transparent
climate-related reporting reaffirms
our dedication to sustainability
and accountability.
In FY24 there will be a focus on
measuring Scope 3 emissions. This
involves evaluating various aspects of
our operations, including hotels, air travel,
and strategic suppliers. By expanding
our attention beyond direct emissions,
we aim to address the broader spectrum
of our carbon footprint and implement
sustainable practices.
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| Annual Report & Accounts 2023
OverviewStrategic ReportCorporate GovernanceFinancial Statements 36
RESPONSIBLE AND SUSTAINABLE BUSINESS REPORT CONTINUED
STREAMLINED ENERGY AND
CARBON REPORTING (“SECR”)
Energy1
Energy use across the Group in the
year totalled 34,734,015 kWh2. (2022:
38,077,011 kWh3) of which 8,789,192
kWh is attributed to UK operations. Solar
panels at our Animax site generated
237,790 kWh of which 39,904 kWh was
returned to the grid.
The primary source for gas and
electricity energy for consumption is
supplier invoices. Where supplies are
not directly billed the consumption,
data was provided by the landlord.
The primary source of data for all other
fuels was delivered quantities. Mileage
data was primarily used to calculate
transport usage. Where data was
unavailable consumption was estimated
based on historic mileage data.
Methodology
The methodology used followed the
2019 HM Government Environmental
Reporting Guidelines and GHG
Reporting Protocol - Corporate
Standard. The 2023 UK Government’s
Conversion Factors for Company
Reporting for all fuels with the exception
of electricity use outside of the UK
was also used. The 2023 United States
Environmental Protection Agency (“EPA”)
emissions factors have been used for
electricity consumed in the USA with
respect to regional relevance and 2022
Association of Issuing Bodies (“AIB”)
emissions factors have been used for
electricity used in Germany. We have
used an operational approach to define
our boundary and scopes.
The information used to compile the
SECR (Streamlined Energy Carbon
Reporting) data was collected and
reported in line with the methodology
set out in the UK Government’s
Environmental Reporting Guidelines
2019.
Scope 1 emissions are direct
greenhouse gas (“GHG”) emissions
that occur from sources that are
controlled or owned by the Group and
include LPG, mains gas, gas oil, and
company vehicles. Scope 2 emissions
are indirect energy emissions from
electricity purchased by the Group. We
report in terms of CO2e (Carbon Dioxide
Equivalent) which includes CO2 and
other greenhouse gases which enables
reporting based on their relative global
warming potential. Reporting in this way
provides a truer figure of the Group’s
impact on the environment.
Scope 3 emissions
As Scope 3 emissions are associated
with the operations of the business
that are not under our direct control,
collecting primary data from all our
sites is still underway to ensure that
we set an accurate benchmark of
our current position. Key to this is
understanding and engaging with our
supply chain, completing our review of
waste disposal, looking at the transport
of goods to and from our operations
and the production of our raw materials.
Business travel is also particularly
relevant, given the international nature
of our business and the location of our
sites in the US and Europe. There are
a wide variety of Scope 3 emissions
meaning that reporting will take time
and be progressed over the coming
years. This will enable us to establish
our full carbon footprint and impact on
our environment under Scopes 1, 2 & 3,
that will underpin our journey to net zero
by 2050. For further information on our
work towards scope 3 emissions, please
see page 35.
Throughout FY22 measuring emissions
evolved and this increased knowledge
provided the Group with an increased
understanding of energy usage. During
FY23 we have reviewed our energy
usage and within the Engineering
division moved from a biomass
electricity contract to a fully green
contract with an alternative supplier.
Various initiatives have been taken
during FY23 to drive energy efficiency
and are detailed on pages 34 and 35
and on pages 38 to 44 (inclusive).
1 Figures for FY23 and FY22 are for electricity, LPG, mains gas, gas oil, and company vehicles.
2
3
The figures represent Carr’s Group plc’s operationally controlled sites and do not include other sites such as joint ventures where Carr’s Group plc has no
operational control.
Prior year figures have been restated to exclude the Agricultural Supplies division and sites where Carr’s Group plc has no operational control such as joint
ventures. Prior year figure (not restated) 46,734,848 kWh.
Carr's Group plc
| Annual Report & Accounts 2023
37
Reduction/
Increase
FY21
baseline
FY23
848
4,033
206
51
18
FY222
FY21 baseline2
1,087
4,362
158
26
18
896
4,977
170
5
21
5,156
15%
5,651
6,069
330
978
276
308
27
Scope 1 & 2 emissions
Energy-efficient action
Carr's Group (tCO2e)1
Emissions (tCO2e)
Scope 1
Agriculture UK
Agriculture overseas
Engineering UK
Engineering overseas
Head Office
Total Scope 1 (tCO2e)
Scope 2
Agriculture UK
Agriculture overseas
Engineering UK
Engineering overseas
Head Office
Total Scope 2 (Location based) (tCO2e)
1,919
-4%
Agriculture UK3
Agriculture overseas
Engineering UK
Engineering overseas
Head Office
328
978
22
99
0
Total Scope 2 (Market based) (tCO2e)4
1,428
-28%
Total renewable energy (on-site generated), kWh
Renewable element of emissions (%)
Total Scope 1 kWh's
Total Scope 2 kWh's
Total Global kWh's
Total UK kWh's5
Total emissions scope 1 and 2 (tCO2e)
Agriculture UK
Agriculture overseas
Engineering UK
Engineering overseas
Head Office
Intensity metric (tCO2e per £m turnover)
£M Turnover
0
0
28,013,899
6,720,116
34,734,015
8,789,192
7,075
1,178
5,011
482
360
45
49
143
30,460,712
7,616,299
38,077,011
7,756
1,443
5,492
451
326
44
62
124
11%
11%
15%
-2%
-76%
13%
25%
-19%
356
1,130
293
300
26
2,105
37
782
0
141
0
960
0
1
431
885
302
199
30
1,847
33
885
0
199
0
1,117
7,916
1,327
5,862
472
204
51
66
120
1 The figures represent Carr’s Group plc’s operationally controlled sites and do not include other sites such as joint ventures where Carr’s Group plc has no operational
control. The table has been adjusted in line with the GHG protocol, SECR, TCFD and the data has been externally verified. Customer based emissions have been
removed from the table to reflect current reporting requirements, the customer-based emissions originally reported in 2022 are reflected under the market-based
emissions section. The table reflects our ongoing commitment to improve reporting. Figures contained in this table have been rounded to the nearest whole number,
therefore the sum of the numbers in a row or column may not conform exactly to the total figure given for that row or column.
2 Prior year figures have been restated to exclude the Agricultural Supplies division and sites where Carr’s Group plc has no operational control such as joint ventures.
3 Market based emissions: Agriculture UK includes AIB (Association of Issuing Bodies) factors for renewable energy generated and used at the Animax site for 2020/21,
2021/22, and 2022/23. AIB factors are used when procuring electricity from the grid that has no renewables evidence. AIB publishes the Residual Mixes and European
Attribute Mixes. These figures represent the part of electricity supply in Europe that is not tracked with guarantees of origin and therefore guaranteeing the accuracy
and reliability of the GO (Guarantee of Origin) system.
4 There is no comparative against baseline. Scope 2 (customer based) data for FY21 was not captured at that time.
5 Data for FY22 is also not available as it was not captured at that time.
Carr's Group plc
| Annual Report & Accounts 2023
OverviewStrategic ReportCorporate GovernanceFinancial Statements
38
TCFD DISCLOSURES
OUR APPROACH TO CLIMATE CHANGE
Introduction
In this section we set out our climate-related financial disclosures for FY23, in accordance with the Financial Conduct Authority
(FCA) Policy Statement 20/17 and listing rule LR 9.8.6R(8). Carr’s has made significant progress through FY23 regarding disclosure
quality and depth of disclosures, and overarching consistency with the Task Force on Climate-related Financial Disclosures
(“TCFD”) Recommendations.
We fully endorse the objectives outlined by the TCFD. Tackling the repercussions of climate change demands a forward-looking
strategy, and we are in the process of integrating TCFD’s recommendations into our operational framework and reporting
procedures.
We acknowledge the significance of climate change and sustainability to our investors, colleagues, partners, customers, and
communities, and we are dedicated to identifying and confronting these challenges. A significant milestone in our strategic journey
was reached with the divestment of our Agricultural Supplies division, fundamentally reshaping the Group’s profile, and affording us
a heightened focus on our core divisions of Speciality Agriculture and Engineering. We have made substantial headway in various
initiatives, through establishing protocols for assessing and evaluating climate-related risks and opportunities and implementation
of enhanced systems for the accurate collection and dissemination of data. The continuing Group has a materially different
footprint to the business before the divestment of Agricultural Supplies. There was a 47.01% reduction in personnel from 1,221 to
647 and a reduction in global operational sites from 57 to 17, 71.93%. In FY22 5,071 tCO²e were attributed to our supplies division for
scope 1 & 2 (this figure is not evidenced under the restated figures in the emissions reporting on page 37). Due to this significant
change, re-baselining of our data and reviewing assessments of risks and opportunities was needed. We have made headway in a
number of significant areas, details of which are included on the following pages.
A priority for the year ahead is a qualitative scenario analysis. This will build on the ongoing internal assessments upon which the
Strategy (a) and Strategy (b) disclosures are currently based (see the following paragraphs Strategy (1) and (2)), and therefore inform
our climate risk, physical and transitional, and opportunity reporting. Any scenario analysis will fulfil the TCFD Recommended
Approach and will take into account its Disclosure Considerations for Non-Financial Organisations.
Carr’s Group is in full support of TCFD reporting and the goal to tackle climate change through improving understanding for
investors and other stakeholders regarding both climate risk and opportunities for the Group.
Governance
1. Describe the Board’s oversight of climate-related risks and opportunities.
The Board is ultimately responsible for the Group’s strategy, risk appetite and risk management, which includes climate-related
risks and opportunities. The Board considers risk reports regularly and environmental matters are a standing agenda item at each
Board meeting.
Board Committees also oversee climate related matters. The Audit Committee is responsible for monitoring the Group’s
compliance with climate change reporting and reviewing the TCFD disclosures and a report which is prepared by the Group’s
Environment and Sustainability Manager in collaboration with the Environmental Steering Group and Green Teams (see pages
34 and 35 and the disclosures set out on pages 38 to 44 (inclusive)). The Audit Committee is also responsible for reviewing the
Group’s internal controls and risk management systems, as well as the Group’s corporate risk register, which includes risks related
to climate change.
The Remuneration Committee sets performance-related remuneration targets aligned with strategy, including the achievement
of environment and sustainability goals, and assesses performance against these targets. See page 33 and pages 84 and 85 for
further details.
The Environmental Steering Group, which members include management from Carr’s Group, the Engineering division and the
Speciality Agriculture division, the Group’s Environment and Sustainability Manager, and the Carr’s Group CEO, provides support
and guidance to the Board and its Committees. For more details on the Environmental Steering Group, please see pages 34 and 35
and the disclosures set out on pages 38 to 44 (inclusive).
Any changes outlined throughout the year are assessed by the Group’s Environment and Sustainability Manager against the risks
related to climate change identified in the Group’s corporate risk register. These are then shared with the Board via the CEO as and
when they arise.
The Board also receives an updated newsletter from the Environmental Steering Group monthly, outlining changes and
opportunities realised by the teams and their subsidiaries.
Carr's Group plc
| Annual Report & Accounts 2023
39
2. Describe management’s role in assessing and managing climate-related risks and opportunities.
Responsibility for the Group’s framework for assessing climate-related risks and opportunities rests with the Environmental
Steering Group which reports to the Board.
The CEO retains ultimate accountability for the execution of the Group’s climate-related risk agenda. The CEO chairs the
Environmental Steering Group which was established in February 2023, and comprises senior central and subsidiary management
from across the Group. The Environmental Steering Group meets monthly and is responsible for evaluating Carr’s Group
performance by reviewing data and assessing progress concerning established objectives. The Environmental Steering Group
also provides regular updates to the Board to support strategy and management of climate-related risk. For more details on the
Environmental Steering Group, please see pages 34 and 35 and the disclosures set out on pages 38 to 44 (inclusive).
All sites within the Group maintain their own Green Teams. These teams are responsible for considering the local environmental
and societal impacts of our operations and report into the Environmental Steering Group via monthly meeting updates.
The Group’s corporate risk register includes risks related to climate change. Climate-related risks are managed by the Group’s
Environment and Sustainability Manager working closely with the members of the Environmental Steering Group who actively
comment and review current risks and opportunities. Details of the Group’s key risks can be found on pages 20 to 23 (inclusive).
Strategy
3. Describe the climate-related risks and opportunities the organisation has identified over the short, medium,
and long term.
The sale of the Agricultural Supplies division has allowed us to begin a thorough assessment of risks and opportunities for the
Speciality Agriculture and Engineering divisions. These evaluations, spanning short, medium, and long-term perspectives were
developed by the Group’s Environment and Sustainability Manager, working in collaboration with the Environmental Steering Group
and Green Teams. Although well into its development, it is an ever-advancing project that will span into 2024 and beyond.
Generally, risks are considered on the following basis:
• “short-term” (one to three years) goals and objectives of the Group
• “medium-term”, being risks with a horizon of between three years and eight years
• “long-term”, being risks with a horizon of more than eight years
The time periods noted above are considered appropriate as they align with the Group’s planning cycle, which includes detailed
financial forecasts and consideration of all risks, including those that are climate-related, which may impact those forecasts. The
medium-term horizon is considered appropriate as there is some visibility of potential growth opportunities and risks across both
divisions, albeit these are less clear than in the near-term. Thereafter, our view of risk is considered in global, macro-economic terms
which provide less certainty than the nearer term views.
The assessments consider potential climate risks, including both physical (acute and chronic) risks such as drought, flooding, and
water stress, as well as transitionary risks associated with shifts towards a low-carbon economy. This encompasses factors such as
international climate policies, impacts of carbon pricing, and evolving market and technological trends. The analysis assesses how
these factors could affect our facilities, stakeholders, customers, and consumers. Our risk and opportunity analysis on climate-related
risks, and the potential impacts including financial considerations for the Group, are outlined in the tables which follow. In all instances
the risks are associated with our business units and separate climatic risk levels are reviewed internally by the Group Environment and
Sustainability Manager.
Carr's Group plc
| Annual Report & Accounts 2023
OverviewStrategic ReportCorporate GovernanceFinancial Statements 40
TCFD DISCLOSURES CONTINUED
Physical Risks
Risk
Severity
Timescale Risk Description
Potential Impact
Mitigation
Extreme
weather
events
Medium
Acute and
Chronic
Short,
Medium and
Long-Term
Events such as high winds,
flood, drought conditions,
increased seasonal
temperatures and heat
stress.
Exposure to physical risk
varies across regions and
the supply chain with
differing climatic conditions
across the geographies in
which we operate.
Long-term
Sustainability
Low –
Medium
Chronic
Short,
Medium and
Long-Term
Changes to climate that
reduces requirement for
products or services.
Supply chain disruptions
increased.
Dual suppliers from
different regions.
Downtime – Loss or
damage of infrastructure.
Can supply from different
regions.
Can store additional
product.
Production cost increase.
Reduced raw material
availability.
Severe drought can impact
cattle numbers in the USA.
We have considered our
site geographical locations
internally and the majority
are currently considered low
risk with the exceptions of
standard extreme weather
events seen in South Dakota
(US), and Silloth (Cumbria,
UK) whereby local road
networks are susceptible
to flooding during raised
sea levels, for example, the
site at Silloth is located on
or near a dockside with the
dock having the facility to
be isolated from any tidal
surges.
Transitional Risk – Technology
Risk
Severity
Timescale Risk Description
Potential Impact
Mitigation
Increased
costs of
changing
to lower
emission
technology
Low
Medium –
Long-Term
Risk of failing to hit net-
zero target due to lack of
investment.
Increased emissions.
Failure to follow legal
compliance.
Loss of customer
confidence.
Environmental knowledge
structure developed.
Legal register in place
reviewed and monitored
regularly.
Best Available Technique
(“BAT”) continually assessed
for renewable options.
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| Annual Report & Accounts 2023
41
Transitional Risk – Market
Risk
Severity
Timescale Risk Description
Potential Impact
Mitigation
High
Short
Short -
Medium
Short -
Medium
Loss of customers.
Shortage of ingredient
availability.
Loss of capital.
Lack of confidence in the
Group due to failure to
transition.
Increased raw material
costs and volatility in the
marketplace.
Innovative changes in crop
and livestock preferences
causing increased costs.
Difficulties in accessing
capital without increased
environmental and societal
reporting.
Absorb costs where
possible.
Dual suppliers available.
Continuous monitoring and
development.
Setting plans to transition
in a realistic timeframe to
renewables across both
business units.
Procured green electricity
contracts.
Short,
Medium
and Long
Changes in governmental
strategy bringing
challenges to current
engineering direction.
Increased
costs of raw
materials
Changing
agricultural
practices
Medium
Capital costs Medium
Low
Engineering
development
and
governmental
legislation
changes
Energy
demand
Medium –
High
Short,
Medium
and Long
Increased costs of energy
and cost of transition to a
renewable infrastructure.
Transitional Risk – Policy & Legislation
Risk
Severity
Timescale Risk Description
Potential Impact
Mitigation
Medium
Enhanced
obligations
for reporting
emissions
Climate
litigation
Low
Short,
Medium
and Long
Short,
Medium
and Long
Increased reporting
requirements challenges
and integration throughout
the Group.
Increased costs.
Increased resource
required to manage
obligations.
Legal compliance failure.
Increased risk of climate-
related litigation brought
by investors, insurers,
shareholders, and public
interest organisations.
Emissions
offsetting
Medium
Short,
Medium
and Long
Rising costs of carbon-
related offsetting to achieve
the 2050 net-zero target.
Team development in
place.
Succession planning in
place.
Voluntary environmental
teams set up at each site.
Sites working to 5S
standards to ensure high
efficiency standards across
climatic conditions and
expectations.
Offsetting to be reviewed
during projects and
procuring of energy
contracts.
Transitional Risk – Reputation
Risk
Severity
Timescale Risk Description
Potential Impact
Mitigation
Consumer
risk
Employee
risk
Low
Medium
Short -
Medium
Short,
Medium
and Long
Loss of consumers due to
lack of communication.
Loss of key talent.
Reduced investment.
Slow response to consumer
trends causing shift or loss
of consumers.
Breakdown of confidence
from employees due to
lack of opportunity, training,
and communication
development.
Investment
risk
Medium
Short,
Medium
and Long
Risk of loss of investment
due to failure to set and
achieve ESG targets.
Communication channels
in place ensuring customer
confidence.
Training and development
in place and cross
fertilisation of departments
allows our key talent to
understand the Group
and its businesses in their
entirety.
ESG targets set and
measured. See page 44.
Carr's Group plc
| Annual Report & Accounts 2023
OverviewStrategic ReportCorporate GovernanceFinancial Statements 42
TCFD DISCLOSURES CONTINUED
Opportunities
In the Speciality Agriculture division:
• Create products that adapt to various farming conditions, incorporating alternative ingredients where possible to reduce reliance
on imported soya derivatives for feed production.
• Offer customers nutrition solutions that reduce carbon impact. For more information see page 34.
The Engineering division:
• Support low carbon energy sources, particularly in the nuclear sector.
• Remain watchful of the medium and long-term risks in the oil and gas sector. For more information see page 23 (climate change).
Mitigating actions to reduce the risks of climate change to the Group
Extreme Weather Events
• Develop new grazing management systems to maximise gains and decrease the risk of soil damage and pathogen build-up.
Improve nutritional management to maximise the utilisation of new and novel feed sources.
• Review current supply chain for resilience and expected short, medium and long-term effects due to extreme weather events.
Availability of raw materials versus reusing waste materials within the processes.
Supply Chain
• Understanding the complete supply chain including areas of supplying sites/distance to sites in relation to chronic weather
events and supplier understanding of climatic risk including physical and transitional. Using service providers with carbon
management plans in place. Understand geographical supply chain in relation to short, medium and long-term effects.
• Develop supplementary protein products within local business areas to reduce import costs and volatility. Develop crop/forage
varieties/species for increased thermal/drought tolerance together with new forage varieties to increase water retention in the
soil so reducing flood risk during extreme weather events.
Societal and Legislative Changes
• A current, new, and emerging risk area, the pandemic has also added to the risk in this area of talent retention as personnel
review current lifestyles. Ensuring a strong strategic platform of social development will bring more stability in the medium and
long term. Ensuring operational locations are protected from climatic incidents will provide an ongoing safe and comfortable
work area. Legislative changes will add challenges and also opportunities to improve the business model.
Reputation
• The environmental concerns surrounding palm and soy oil derivatives create a substantial opportunity for innovation in the
realm of animal feed supplements. The increasing demand for sustainable alternatives in this sector is spurring research and
development.
Carr's Group plc
| Annual Report & Accounts 2023
43
4. Describe the impact of climate-related risks and opportunities on the organisation’s businesses, strategy,
and financial planning.
Following the sale of our Agricultural Supplies division, we have made significant strides in reducing the carbon footprint of Carr’s
Group. The assessment of climate-related risk remains low in the short term. Businesses within the Group carefully manage the
sourcing of raw materials, prioritising ethical and sustainable origins. Benchmarks are set to accelerate progress towards a 2050
net-zero carbon goal, and the Group is committed to achieving this.
Core business objectives now integrate climate and sustainability targets and are linked to remuneration of senior managers and
Executive Directors.
In the first year with the Green Teams on individual sites, the Group has begun to lay the foundation for localised and Group-wide
projects, demonstrating notable progress and establishing a strong foothold in our sustainability objectives. For more information
see pages 34 and 35 and the disclosures set out on pages 38 to 44 (inclusive).
The Group is currently integrating the progress of localised projects into next year’s scenario planning, which includes evaluation of
crucial financial metrics within established scenarios, covering a spectrum of physical and transition risks and opportunities.
5. Describe the resilience of the organisation’s strategy, taking into consideration different climate-related
scenarios including a 2°C or lower temperature scenario.
We currently perceive climate-related risk as being of low impact. Comprehensive climate scenario analysis was planned during
FY23 but was delayed as a result of the sale of the Agricultural Supplies division and the protracted year-end process. The Group
reduced its footprint as a result of the disposal; going from 1,221 colleagues down to 647 and reducing business site locations from
57 down to 17. In FY23 robust internal risk management measures were developed and associated procedural initiatives planned.
Further details can be found on pages 38 to 44 (inclusive).
Scenario analysis is a priority for 2024 to provide greater insight into potential impacts of physical climate risks and opportunities
for transitioning towards a low-carbon economy. To ensure the rigour and thoroughness of the approach, we will be engaging with
external specialists to assist with the execution and verification of the work.
Risk Management
6. Describe the organisation’s processes for identifying and assessing climate-related risks;
7. Describe the organisation’s processes for managing climate-related risks;
8. Describe how processes for identifying, assessing, and managing climate-related risks are integrated into
the organisation’s overall risk management.
The Group utilises a comprehensive risk-assessment methodology that combines both internal expertise and external data
sources and includes climate-related risks. Details of the Group’s key risks can be found on pages 20 to 23 (inclusive). Active
engagement with management teams across the Group’s operations allows for valuable insights to be integrated into the
Group’s corporate risk register with oversight by the Group’s Environment and Sustainability Manager. The identified risks
undergo evaluation, considering factors such as likelihood, severity, and potential financial implications. Collaborative efforts
with management lead to the formulation and endorsement of tailored mitigation strategies. The Group’s corporate risk register,
which includes those risks related to climate change, undergoes Board-level review to ensure alignment with sustainability goals
and the Group strategy. Feedback from the Board is communicated to the Group’s Environment and Sustainability Manager and
Environmental Steering Group via the CEO, who chairs the Environmental Steering Group. The Audit Committee is responsible for
monitoring the Group’s compliance with climate change reporting and reviewing the TCFD disclosures. The Audit Committee is
also responsible for reviewing the Group’s internal controls and risk management systems, as well as the Group’s corporate risk
register, which includes risks related to climate change.
As the organisation progresses through 2024, there is a commitment to continuous improvement, with enhancements being made
to the assessment process to further support its comprehensiveness and robustness. This evolution aims to strengthen the risk
management framework and ensure sustainable practices align with the sustainability strategy.
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OverviewStrategic ReportCorporate GovernanceFinancial Statements 44
TCFD DISCLOSURES CONTINUED
Metrics and Targets
9. Disclose the metrics used by the organisation to assess
climate-related risks and opportunities in line with its
strategy and risk management process.
10. Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse
gas (“GHG”) emissions and the related risks.
11. Describe the targets used by the organisation to manage climate-
related risks and opportunities and performance against targets.
The Group employs a comprehensive approach to monitor climate-related risks and
opportunities in alignment with our strategy and risk management process. Our focus
primarily revolves around carbon generation within our operations, encompassing
both Scope 1 and Scope 2 emissions. To support our monitoring efforts, we integrated
an online portal into our systems in late 2022, enhancing our data collection
capabilities worldwide. This innovation has granted us access to retrospective data,
offering invaluable insights into our historical emissions trends.
Looking ahead, we are committed to refining our methodology for gathering and
disclosing Scope 3 emissions, which is essential in evaluating potential risks and
opportunities. In 2024, we plan to expand our monitoring framework, with a specific
emphasis on incorporating Scope 3 direct emissions into our reporting structure.
This is a step towards achieving a more sustainable and environmentally conscious
operational footprint.
Green Team and Environmental Steering Group development were used to increase
environmental awareness, allowing our climate risks to be monitored and assessed.
The development of the Environmental Steering Group and Green Teams target
was to ensure future proofing and succession planning ensuring the opportunity to
achieve ongoing targets for Carr`s Group. Energy usage and contractual changes
allow reductions in reliance on fossil fuels and increasing costs. Detailed information
on our Scope 1 and Scope 2 GHG emissions, as well as our approach to Scope 3 GHG
emissions, can be found on pages 36 and 37.
Our primary objective is the ambitious goal of achieving net-zero carbon emissions for
both Scope 1 and Scope 2 by 2050. This commitment to climate action remains at the
forefront of our operational agenda as we refine our strategies within the refocused
Group. To achieve this, we have set a target of 3.4% reduction per annum. In the
current year, we have achieved a reduction of 8.8%.
In addition to this overarching goal, we have initiated the collection of Scope 3 direct
emissions data. The Environmental Steering Group oversees a range of targets
designed to support our sustainability efforts. These include the establishment of
Green Teams across our entire Group, the implementation of Environmental Training
initiatives, the pursuit of zero to landfill practices, the cultivation of knowledge in
environmental stewardship, and the transparent reporting of environmental data
to external bodies such as the Climate Disclosure Project (“CDP”). Details of our
performance against these targets is demonstrated on pages 34, 35 and 37 (inclusive).
These multifaceted initiatives demonstrate our dedication to a more sustainable and
biodiverse future.
24Green Team
meetings across
all facilities
9Environmental
Steering Group
meetings
406colleagues trained
in environmental
awareness, 62%
of the Group’s
employees
8.8%reduction in scope 1
& 2 emissions
Carr's Group plc
| Annual Report & Accounts 2023
NON-FINANCIAL & SUSTAINABILITY INFORMATION STATEMENT
45
In line with Sections 414CA and 414CB of the Companies Act 2006, we have set out below where relevant information we are
required to report on can be found.
Reporting Requirement
Group policies and standards
Location in Annual Report
Climate-related Financial Disclosures
Environmental Policy
Environmental Matters
Environmental Policy
Carr’s Group Intranet (CarrsConnect)
Employees
Employee Handbook
Health & Safety Policy
Code of Ethics
Speak-up/Whistleblowing
Modern Slavery
Carr’s Group Intranet (CarrsConnect)
Social Matters
Charitable Donations Policy
Carr’s Group Intranet (CarrsConnect)
Human Rights
Employee Handbook
Modern Slavery Statement and Policy
Carr’s Group Intranet (CarrsConnect)
Anti-Corruption & Anti-Bribery
Anti-bribary Policy
Gifts and Entertainment
Carr’s Group Intranet (CarrsConnect)
Policy Implementation and Due Diligence Employee Handbook
Business Model
Principal Risks
Non-Financial KPIs
Financial and Other Controls
Internal Due Diligence/Integration
processes
Carr’s Group Intranet (CarrsConnect)
–
–
Environmental Policy
Health & Safety Policy
Employee Handbook
Carr’s Group Intranet (CarrsConnect)
TCFD Disclosures (see pages 38 to 44
(inclusive))
Viability statement (page 24)
Responsible Business Report
(see pages 25 to 37 (inclusive))
TCFD Disclosures
(see pages 38 to 44 (inclusive))
Responsible Business Report
(see pages 25 to 37 (inclusive))
Responsible Business Report
(see pages 25 to 37 (inclusive)
Directors’ Report (see page 105)
Responsible Business Report
(see pages 30 to 31 (inclusive))
Responsible Business Report
(see pages 30 to 31 (inclusive))
Strategic Report
(see pages 01 to 45 (inclusive))
Business model
(see pages 10 and 11 (inclusive))
Principal Risks and Uncertainties
(see pages 20 to 23 (inclusive))
KPIs
(see pages 18 and 19)
Strategic Report Approval
The Strategic Report on pages 01 to 45 comprises the Highlights and At a Glance sections, the Chair’s Statement, the Market
Overview, the Business Model, Strategy, the Chief Executive’s Review, the Financial Review, Key Performance Indicators, Principal
Risks and Uncertainties, the Viability Statement, the Responsible and Sustainable Business Report (including SECR details on
pages 36 and 37), the TCFD Disclosures, and the Non-Financial & Sustainability Information Statement, as well as the s.172
Statement on pages 62 to 66 (inclusive).
The Strategic Report was approved by the Board on 20 December 2023.
By order of the Board
Justin Richards
Company Secretary
20 December 2023
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| Annual Report & Accounts 2023
OverviewStrategic ReportCorporate GovernanceFinancial Statements 46
CORPORATE GOVERNANCE REPORT
Tim Jones
Non-Executive Chair
CHAIR’S INTRODUCTION
I am pleased to present the Corporate
Governance Report for the year
ended 2 September 2023 on behalf
of the Board.
This report sets out our approach to
governance and describes how Carr’s
Group plc adopts the UK Corporate
Governance Code 2018 (the “Code”). In
preparation, the Board considered each
principle of the Code to review how it
is applied and how it relates directly to
the Group. Information about the Board
and Board Committees and how we
engage with our stakeholders can be
found on the following pages.
BOARD MEMBERS*
Tim Jones
Non-Executive Chair
David White
Chief Executive Officer
Martin Rowland
Executive Director of Transformation
Ian Wood
Non-Executive Director and
Employee Engagement
Representative
Shelagh Hancock
Non-Executive Director
Stuart Lorimer
Non-Executive Director
Gillian Watson
Non-Executive Director and Senior
Independent Director
*As at the date of this report
Carr's Group plc
| Annual Report & Accounts 2023
47
FY23 Overview
This has been a busy year for the Group.
There have been changes to the Board
and the composition of Committees.
We have engaged with shareholders
on a number of topics, and have faced
the challenges of an audit delay to
the completion of the FY22 year-end
process.
During periods of change, it is key
that the Board remains committed
to maintaining good governance. It
is central to the integrity, reputation
and performance of the Group and
we will continue to operate in an open
and transparent manner with all of our
stakeholders.
Board changes
Changes in the Board composition
are detailed in full in the Nomination
Committee Report on pages 67 to 71
(inclusive).
My appointment as Non-Executive
Chair took effect on 21 February 2023
and, following the Company’s General
Meeting on 2 May 2023, I took over
as Nomination Committee Chair and
became a member of the Remuneration
Committee. Upon my appointment,
Peter Page stepped down as Executive
Chair and took the role of Chief
Executive Officer. As announced on 13
November 2023, Peter stepped down
from the Board and left the Group on
17 November 2023. On behalf of the
Board, we thank Peter for his significant
contribution and wish him every
success.
David White joined the Board as Chief
Financial Officer from 21 February 2023,
taking over from Neil Austin who left the
Group in February 2023 to take up a new
role. As announced on 13 November
2023, David White was appointed by the
Board as Chief Executive Officer with
effect from 17 November 2023. David
has been succeeded in the role of Chief
Financial Officer by Gavin Manson with
effect from 13 November 2023. Gavin
is not a member of the Board but will
attend Board meetings by invitation.
In line with the Board’s Non-Executive
Director succession plan, Shelagh
Hancock and Stuart Lorimer were
appointed as Non-Executive Directors
from 1 September 2022. Shelagh and
Stuart are also members of each of the
Audit, Remuneration and Nomination
Committees, with Stuart also acting
as Audit Committee Chair, taking over
from John Worby following the General
Meeting of the Company on 2 May 2023.
John Worby stood down from the Board
on 31 October 2023, and leaves with our
grateful thanks for all the support and
wisdom he has provided during almost
nine years at Carr’s.
Martin Rowland was appointed as a
Non-Executive Director of the Company
on 6 March 2023. Martin is appointed
as a representative of Harwood Capital
Management Limited (“Harwood’)
pursuant to a relationship agreement
between the Company and Harwood.
Martin was appointed Executive Director
of Transformation with effect from 13
November 2023.
We start the new financial year
welcoming Gillian Watson to the
Board. Gillian joined as Non-Executive
Director on 9 October 2023 and is a
member of the Nomination, Audit and
Remuneration Committees. Gillian
has also taken over the role of Senior
Independent Director from John Worby.
After seven years at Carr’s, Company
Secretary and Legal Director, Matthew
Ratcliffe left the Group to take up a new
role. Matthew has been central to the
Group’s governance and has provided
expert support and guidance to the
Board and Board Committees. I am
pleased to welcome Justin Richards
as our Company Secretary and Legal
Director. We thank Matthew and wish him
all the very best of luck in his new role.
FY22 year-end process
In November 2022 a delay was
announced to the completion of the
year end process that had several
consequences including a temporary
suspension of trading in the Company’s
Ordinary Shares and the delayed
release of the audited results and FY22
Annual Report, along with payment of
the final dividend later than usual.
Completion of the disposal of the
Agricultural Supplies division
On 26 October 2022, we completed
the disposal of all interests in the
Agricultural Supplies division through
a sale to Edward Billington and Son
Limited, the division’s joint owner.
The disposal has meant that the
Board has focussed on the organic
growth opportunities for the Speciality
Agriculture division and optimising
opportunities for the Engineering
division through focusing on the unique
strengths and qualities of the current
businesses.
Employee engagement
Ian Wood continues as the Board’s
Employee Engagement representative,
with responsibility for reporting on
employee-related matters to the Board
and ensuring that employee interests
are properly considered in Board
decision-making. Details of employee
engagement throughout FY23 can be
found on pages 26 and 27 and on pages
62 to 66 (inclusive).
Sustainability
Focus on sustainability has been
important during the year. We have a
new Environmental Steering Group,
chaired by our CEO and reporting into
the Board, and newly formed Green
Teams at each of our sites, ensuring
that sustainability is considered at all
levels throughout the Group. Details can
be found in the Responsible Business
Report and the TCFD Disclosures on
pages 25 to 44 (inclusive).
Board evaluation
Board effectiveness reviews take place
annually, with every third review being
facilitated by an external provider.
Internal reviews facilitated by the
Company Secretary on behalf of
the Chair are carried out in between
external reviews.
In August 2023 we undertook an internal
effectiveness review. The findings were
presented to the Board and were the
subject of detailed and constructive
discussion. Details of that process
and its outcomes are set out in this
Corporate Governance Report on
pages 58 to 60 (inclusive). An external
effectiveness review was completed
in 2021, and we intend to externally
facilitate next year’s Board review.
Tim Jones
Non-Executive Chair
20 December 2023
Carr's Group plc
| Annual Report & Accounts 2023
OverviewStrategic ReportCorporate GovernanceFinancial Statements 48
THE BOARD
Tim
Jones
Non-Executive Chair
David
White
Chief Executive Officer
Tim is an FCA approved
person, a member of the
Chartered Institute of
Securities and Investments
and an Associate of the
Chartered Insurance Institute.
Term of Office
Tim Jones was appointed to
the Board as Non-Executive
Chair on 21 February 2023.
External Appointments
Tim served as Non-
Executive Chair of Treatt plc
between 2012 and January
2023, and remains Chair of
Allia Charitable Group,
SP-Logistics Holdings
Limited, Chair of Allia C&C
Impact and ESG Capital and
a Non-Executive Director of
RCB Bonds plc.
David is a Chartered
Accountant having qualified
in London in 1997 and spent
time at Ernst & Young. David
joined the Company from
Aggreko plc where he held a
variety of senior roles, most
recently as Finance Director
of the Global Products and
Technology division.
Term of Office
David White was appointed
to the Board as an Executive
Director in the role of Chief
Financial Officer on 21
February 2023, and was
appointed as Chief Executive
Officer with effect from
17 November 2023.
External Appointments
None.
Committee Memberships
Committee Memberships
• Nomination
Committee – Chair
• Remuneration Committee
None.
Martin
Rowland
Executive Director of
Transformation
Martin is a representative
of Harwood Capital
Management Limited
(“Harwood”) and was
appointed to the Board on
6 March 2023 as a Non-
Executive Director pursuant
to a relationship agreement
between the Company
and Harwood. Martin was
appointed as Executive
Director of Transformation
with effect from 13
November 2023. Martin
has spent the last 14 years
in a variety of investment
roles and prior to this held
operational and strategic
roles in mid and large-scale
corporates. He has been a
director of companies in an
executive and non-executive
capacity, helping businesses
to scale organically and
through acquisition.
Term of Office
Martin was appointed a Non-
Executive Director on 6 March
2023, and was appointed
as Executive Director of
Transformation with effect
from 13 November 2023.
External Appointments
Martin is currently Non-
Executive Chair of AIM-listed
Smoove plc
Committee Memberships
None.
Carr's Group plc
| Annual Report & Accounts 2023
49
Ian
Wood
Non-Executive Director
Shelagh
Hancock
Non-Executive Director
Stuart
Lorimer
Non-Executive Director
Gillian
Watson
Non-Executive Director
Employee Engagement
Representative
Ian retired as the
Commercial Director,
International Business
Development for Centrica
(previously British Gas) in
January 2016 having held
several positions with the
company, covering various
aspects of the business
including engineering,
customer services, industrial
and commercial marketing,
and energy trading within the
UK, Continental Europe and
North America.
Term of Office
Ian was appointed to the
Board in October 2015.
External Appointments
In addition to his work for
the Group, Ian is currently
a Director of Talkin Energy
Ltd and a Non-Executive
Director of Cumbria County
Holdings Ltd.
Committee Memberships
Shelagh brings to this role
over 30 years’ experience
in the food and agricultural
supply sectors and, prior to
her current role with First
Milk, Shelagh held several
executive positions across
the UK dairy industry,
including at Milk Link
(formerly Glanbia Foods) and
Medina Dairy, having trained
as an animal nutritionist.
Term of Office
Shelagh was appointed
to the Board as a Non-
Executive Director on
1 September 2022.
External Appointments
Shelagh is currently Chief
Executive Officer at First Milk,
the British farmer-owned
dairy co-operative, where
she is highly respected for
delivering significant growth
in member returns since
being appointed in 2017.
• Remuneration Committee
Committee Memberships
– Chair
• Audit Committee
• Remuneration Committee
• Nomination Committee
• Audit Committee
Stuart is a qualified
accountant and began his
career at KPMG. Prior to his
current role with AG Barr plc,
Stuart was with Diageo plc
for 22 years in various senior
roles working across Europe,
the USA and Asia, ultimately
as Finance Director for
Diageo’s Global Supply
Operation. Stuart brings
strong finance expertise
together with a wealth of
experience in supply chain
operations, logistics and
business optimisation.
Term of Office
Stuart was appointed a
Non-Executive Director
and joined the Board on
1 September 2022.
External Appointments
He is currently Finance
Director at AG Barr plc, the
FTSE-listed soft drinks brand
owner, a role which he has
held since 2015.
Committee Memberships
• Audit Committee – Chair
• Remuneration Committee
• Nomination Committee
Senior Independent
Director
Gillian has more than 30
years’ executive and non-
executive experience across
a range of sectors and
geographies. Previously,
Gillian’s executive career was
spent in corporate finance
advisory, business strategy
and energy.
Term of Office
Gillian was appointed a
Non-Executive Director on
9 October 2023.
External Appointments
Gillian is an Independent
Non-Executive Director at
Vidrala, S.A. and Scottish
Friendly Mutual Insurance as
well as Non-Executive Chair
of Statera Energy, char.gy
and DC 25 investment Fund.
She is also a Trustee for The
Boswell Trust.
Committee Memberships
• Remuneration Committee
• Nomination Committee
• Audit Committee
Carr's Group plc
| Annual Report & Accounts 2023
OverviewStrategic ReportCorporate GovernanceFinancial Statements 50
CORPORATE GOVERNANCE REPORT CONTINUED
CORPORATE GOVERNANCE
The Group’s corporate governance measures are designed to ensure that good
governance is embedded and exercised at all times and at all levels across the Group.
A structured framework, together with accountable leadership, internal controls, risk
management and stakeholder engagement, enables and ensures good decision-making,
which in turn promotes the direction, effectiveness and accountability of the Group.
STRUCTURED FRAMEWORK
Remuneration Committee
THE BOARD
The Board is responsible for promoting the long-term
sustainable success of the Group for the benefit of its
shareholders and supporting all stakeholders. The Board
establishes the Group’s purpose and sets its strategic direction,
ensuring that they remain aligned with the Group’s ethics and
culture. The Board consists of Executive Directors together
with experienced Non-Executive Directors. Details of the Board
members can be found on pages 48 and 49.
BOARD COMMITTEES
The Board Committees ensure that there is independent
oversight of the matters within their respective remit and
assist the Board in fulfilling its responsibilities. Each Board
Committee is chaired by a Non-Executive Director. The Chair of
each Committee reports regularly to the Board as to how that
Committee has discharged its responsibilities. Written Terms
of Reference govern the responsibilities of the Committees,
which are reviewed regularly by the relevant Committee and
made available on the Group’s website (www.carrsgroup-ir.com).
Nomination Committee
The role of the Nomination Committee is to ensure that an
appropriate balance of skills, experiences and backgrounds
is achieved across the Board, and that the Group is properly
prepared for the succession of members of the Board and
senior management. Details of the work, responsibilities and
governance of the Nomination Committee are set out in the
Nomination Committee Report on pages 67 to 71 (inclusive).
Audit Committee
The Audit Committee’s key responsibilities are to review
the effectiveness of the Company’s financial reporting, the
performance of the external auditor and the Group’s systems
of risk management and internal control. Details of the work,
responsibilities and governance of the Audit Committee are
set out in the Audit Committee Report on pages 72 to 77
(inclusive).
The Remuneration Committee’s primary role is to review
and set the reward structures for Executive Directors and
oversee reward structures for other senior management to
ensure that these promote the correct behaviours and are
appropriate when considered in conjunction with the levels
of pay and benefits offered across the Group. Details of the
work, responsibilities and governance of the Remuneration
Committee are set out in the Remuneration Committee Report
on pages 78 to 102 (inclusive).
EXECUTIVE DIRECTORS
The Executive Directors are responsible for implementing
the strategy agreed by the Board and reviewing strategic
opportunities and initiatives; ensuring alignment on business
priorities, investments and actions; management of the
operational divisions and central functions on a day-to-day
basis; and the management of matters relating to the Group’s
workforce.
SUBSIDIARY & JOINT VENTURE BOARDS
The Subsidiary and Joint Venture Operating Boards monitor
performance and commercial developments.
These boards include subsidiary management, Executive
Directors, leaders of Group functions and, where appropriate,
managing directors and executives from joint venture partners.
Meetings take place regularly and feedback on business
performance and key developments is shared with the Board.
ENVIRONMENTAL STEERING GROUP
The Environmental Steering Group was established in early
2023 and is responsible for developing the Group’s framework
for assessing climate-related risks and opportunities and
assessing the Group’s performance by reviewing data,
reviewing progress against agreed actions and providing
advice to the Board in support of the development of strategy
and management of risk. It meets on a quarterly basis, is
chaired by the CEO and includes senior management from
across the Group. The Environmental Steering Group is
supported by Green Teams, which have been established at
each site. For further details please see pages 34 and 35.
Carr's Group plc
| Annual Report & Accounts 2023
51
SENIOR LEADERSHIP
ALL EMPLOYEES
The senior leadership team is responsible for implementing
policies, the operational delivery of the Group’s strategies and
monitoring performance and commercial developments.
The senior leadership team consists of the Executive Directors,
senior management, managing directors of individual
businesses, and Group functional leaders for Finance, Health
& Safety, HR, Legal and IT. Members of the senior leadership
team regularly engage with Board members.
Regular meetings are held in each of the Group’s businesses,
and also in each of the Group’s central functions. These
meetings are designed to manage and monitor day-to-day
operations, improving the speed and efficiency of decision
making. Each site also has a Green Team, which is responsible
for considering resource efficiencies together with the
environmental and social impacts of the Group businesses
at a local level.
Ian Wood is the Board’s Non-Executive Director for Employee
Engagement, providing a link between the Board and the
employees of the Group.
ACCOUNTABLE LEADERSHIP
The Board
Details of the Board can be found on pages 48 and 49.
Division of responsibilities
The UK Corporate Governance Code 2018 requires there to be a clear division of responsibilities between the
leadership of the Board and the operation of the Group’s businesses by the executive leaders1. The roles of the
Executive Directors, the Chair, the Senior Independent Director and the Non-Executive Directors are reviewed
regularly by the Board, most recently in April 2023, with details set out on the Group’s website, and referenced below:
1 As noted in the 2022 Annual Report and Accounts, Peter Page acted as Executive Chair on an interim basis for the period from 11 October 2021 to 21 February 2023,
during which time in addition to the responsibilities of the Chair set out above, Peter Page took on some of the key responsibilities of the Chief Executive Officer with
the Chief Financial Officer taking on the remainder of the key responsibilities. Additional arrangements were put in place, including the delegation of certain of the
Chief Financial Officer’s responsibilities to senior finance personnel, to ensure that the Group continued to be managed effectively, governance remained robust and
to enable the Group’s strategy to be delivered during the interim period. On 5 August 2022 it was announced that Peter Page was to be appointed as Chief Executive
Officer, but that the interim arrangements would continue with Peter remaining as Executive Chair until the new Non-Executive Chair is in place. Tim Jones joined the
Board on 21 February 2023 as Non-Executive Chair and the division of responsibilities was reviewed and updated in April 2023.
NON-EXECUTIVE CHAIR
The Chair leads the Board, ensuring its effectiveness while taking account of the interests of the Group’s various stakeholders,
promoting high standards of corporate governance. Key responsibilities include:
• Chairing the Board, its Nomination Committee, and General
• Ensuring the effective oversight of risk management by the
Meetings including the AGM.
Board.
• Ensuring the Board Committees are properly constituted
• Leading the performance evaluation of the Board and each
and effectively chaired.
of its members.
• Ensuring that appropriate arrangements exist for
the delegation of the Board’s authority to Executive
management and Board Committees.
• Providing a sounding board for the CEO on key business
decisions, challenging proposals where appropriate.
• Promoting the profile and perception of the Group publicly
• Ensuring the effective running of the Board, demonstrating
and amongst its stakeholders.
objective judgement and the highest standards of
corporate governance, ensuring that sufficient time is
afforded for the proper consideration of key matters.
• Promoting openness and debate on the Board.
• Ensuring the timely flow of information to the Board
and ensuring members are well-informed to enable
constructive discussion and sound decision-making.
• Setting the Board’s agenda in conjunction with the
CEO and Company Secretary, focusing on strategy,
performance, culture, stakeholders and accountability, and
ensuring that it takes full account of the important issues
facing the Group.
• Ensuring effective communication and engagement with
shareholders and other stakeholders on key matters and
that members of the Board understand the views of such
shareholders and other stakeholders.
• Ensuring the effective oversight of Board membership and
succession planning in conjunction with the Nomination
Committee, taking into account the skills, experience,
knowledge, and diversity of Board members.
• Ensuring, with the support of the CEO and Company
Secretary, that effective induction programmes exist for
onboarding new Board members.
• Encouraging the continued development of the Directors
and the Board as a whole.
Carr's Group plc
| Annual Report & Accounts 2023
OverviewStrategic ReportCorporate GovernanceFinancial Statements 52
CORPORATE GOVERNANCE REPORT CONTINUED
CHIEF EXECUTIVE OFFICER
The Chief Executive leads in the development and implementation of strategy and has overall responsibility for the
management and performance of the Group and its businesses. Other key responsibilities include:
• Developing and implementing the Group’s strategy and
• Establishing an annual budget consistent with the agreed
commercial objectives.
strategy.
• Promoting the Group’s culture and behaviours and adhering
• Providing input into the Board’s agenda.
to the highest standards of integrity and governance.
• Ensuring that dialogue is maintained with the Chair on
• Managing risk and risk mitigation strategies to safeguard the
important issues facing the Group.
reputation of the Group and its businesses.
• Ensuring open and regular communication and
• Effecting the decisions of the Board and its Committees.
engagement with shareholders and other stakeholders.
• Developing and overseeing the Group’s Environmental,
Social and Governance work, and sustainability strategy.
SENIOR INDEPENDENT DIRECTOR (“THE SID”)
Key responsibilities include:
• Acting as a sounding board for the Chair.
• Leading in the performance evaluation of the Chair.
• Serving as an intermediary for other Directors, where
• Ensuring an orderly succession process for the Chair.
necessary.
• Being available to shareholders to deal with concerns which
cannot otherwise be resolved through ordinary channels.
NON-EXECUTIVE DIRECTORS (INCLUDING THE CHAIR AND THE SID)
The Non-Executive Directors bring skills, knowledge and experience to the Board. Key responsibilities include:
• Providing independent and constructive challenge to the
• Serving on Board Committees.
Executive Directors.
• Helping to develop Group strategy with an independent
outlook.
• Satisfying themselves as to the accuracy of the Group’s
financial results and the effectiveness of controls and
systems of risk management.
• Devoting time to develop and refresh knowledge and skills,
• Determining appropriate levels of remuneration for
and being well-informed about the Group.
Executive Directors.
• Having a key role in succession planning.
The Board is supported by the Company Secretary, who assists the Chair and the rest of the Board to uphold corporate
governance standards. The Company Secretary ensures compliance with Board procedures and provides support to the Chair. He
advises the Board on corporate governance developments and ensures that the Board receives information in a timely manner.
The Company Secretary is able to access appropriate resources, services and advice to support the Directors as required. The
Company Secretary also arranges and considers Board effectiveness reviews in conjunction with the Chair, facilitates Directors’
induction programmes for new members and assists with ensuring that the Board has appropriate training.
Composition
As at the date of this Annual Report, the Board comprises two Executive Directors1 and five Non-Executive Directors2, including
the Chair. There is also a Company Secretary to the Board3. Biographies of Board members are set out on pages 48 and 49. The
appointment and removal of Directors is governed by the Company’s Articles of Association and the Companies Act 2006. In
accordance with the Corporate Governance Code, all Directors stand for election or re-election annually at the Annual General
Meeting of the Company.
1 David White as Chief Executive Officer; and Martin Rowland as Executive Director of Transformation. Peter Page stood down from the Board and left the Group on
17 November 2023.
2 Tim Jones as Non-Executive Chair, Ian Wood, Shelagh Hancock, Stuart Lorimer and Gillian Watson. John Worby stood down from the Board on 31 October 2023.
3 Matthew Ratcliffe left the Group on 22 September 2023, and Justin Richards was appointed Company Secretary on 25 September 2023.
Carr's Group plc
| Annual Report & Accounts 2023
53
Diversity and inclusion
We believe that a truly diverse Board will include and make good use of differences in social and ethnic background, race, gender
and other distinctions between Directors, such as cognitive and personal strengths. The Board has in place a Board Diversity Policy
which extends to the Board Committees and sets out the Board’s diversity objectives. A copy of the Board Diversity Policy can be
found on our investor website (www.carrsgroup-ir.com/). Further details on diversity and inclusion can be found on page 27 and in
the Nomination Committee Report on pages 67 to 71 (inclusive).
For the financial year ended 2 September 2023, members of the Board and the senior management team were asked to complete
a diversity disclosure questionnaire to confirm which of the categories set out in the table below they identify with and to provide
data on wider diversity aspects.
In accordance with Listing Rule 9.8.6R(10) below is the numerical diversity data as at 2 September 2023 in the format set out in LR 9
Annex 2.1.
Gender identity
Gender identity
Men
Women
Non-binary
Prefer not to say
Ethnic background
Number of
Board members
% of the Board
Number of senior
positions on the
Board (CEO, CFO,
SID and Chair)
Number in
executive
management
(senior
management
team)
Percentage
of executive
management
(senior
management
team)
7
1
0
0
87.5%
12.5%
0%
0%
4
0
0
0
9
1
0
0
90%
10%
0%
0%
Ethnic background
Board members
% of the Board
Number of
White British or other White
(including minority-White groups)
Mixed/Multiple Ethnic Groups
Asian/Asian British
Black/African/Caribbean/Black British
Other ethnic group, including Arab
Not specified/prefer not to say
FCA Listing Rules Targets
8
0
0
0
0
0
100%
0%
0%
0%
0%
0%
Number of senior
positions on the
Board (CEO, CFO,
SID and Chair)
4
0
0
0
0
0
Number in
executive
management
(senior
management
team)
10
Percentage
of executive
management
(senior
management
team)
100%
0
0
0
0
0
0%
0%
0%
0%
0%
During the financial year ended 2 September 2023, less than 40% of the individuals on the Board were women and no senior
position (Chair, CEO, CFO, SID) was held by a woman. No member of the Board was from a minority ethnic background. Historically,
the geographical location of the Group, together with the industries in which the Group operates have impacted the ability of the
Board to attract persons who not only possess the appropriate skills and experience, but also meet diversity targets. The Board has
taken positive steps in this regard, with the publication of the Board Diversity Policy applicable to the Board and Committees, which
sets out diversity objectives for Executive and Non-Executive Directors, and the continuation of flexible working arrangements
where appropriate which support diversity not only at Board level but also across the wider workforce. For details of diversity and
inclusion across the wider workforce, see page 27. Since the end of the financial year ended 2 September 2023, positive steps have
been taken – 28.57% of the Board as at the date of this report are women, and the role of Senior Independent Director is held by
a woman. Details of Board succession planning during FY23 and candidate diversity can be found in the Nomination Committee
Report on pages 67 to 71 (inclusive).
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| Annual Report & Accounts 2023
OverviewStrategic ReportCorporate GovernanceFinancial Statements 54
CORPORATE GOVERNANCE REPORT CONTINUED
Skills and experiences
The Board recognises the importance of having an appropriate mix of skills, qualities and industry experience in order to deliver
the strategic objectives of the Company for the benefit of its shareholders as a whole. The aim is to ensure that the skills and
backgrounds collectively represented on the Board reflect the diverse nature of the business environment in which the Group
operates. The biographical details of the current Directors, including their relevant experience, are set out on pages 48 and 49.
During the year, the Board undertook a review to assess the range of skills, attributes and experience on the Board, to ensure that
it remains effective, balanced and suited to the Group’s strategic priorities. The outcome of the review has been used to inform
Non-Executive Director succession planning and will continue to be considered and revisited as the strategy progresses.
Powers and responsibilities
The powers of the Directors are set out in the Company’s Articles of Association. In addition, the Directors have responsibilities and
duties under legislation, in particular those arising under s.172 of the Companies Act 2006.
Non-Executive Director independence
The Board reviews the independence of its Non-Executive Directors regularly. Taking into account all circumstances, including
those factors set out in the Corporate Governance Code, the Board considers Non-Executive Directors Ian Wood, Shelagh
Hancock, Stuart Lorimer and Gillian Watson to be independent. Tim Jones joined the Group as Non-Executive Chair on 21 February
2023. The Board considers Tim to be independent. Martin Rowland was appointed as a Non-Executive Director of the Company
on 6 March 2023. Martin is appointed as a representative of Harwood Capital Management Limited (“Harwood”) pursuant to a
relationship agreement between the Company and Harwood. As a representative of Harwood, the Board does not consider Martin
Rowland to be independent. Martin ceased to be a Non-Executive Director on becoming Executive Director of Transformation on
13 November 2023.
Directors’ conflicts of interest
The Companies Act 2006 and the Company’s Articles of Association require the Board to consider any actual or potential conflicts
of interest. The Board has a policy for managing and, where appropriate, authorising actual or potential conflicts of interest, or
related party transactions. Directors are required to declare any interests they or close family members have in any organisations
that are not part of the Group, as well as other circumstances which could give rise to a conflict of interest. Registers of related
parties and third-party interests are regularly reviewed by the Board. Directors are required to seek clearance from the Chair
before taking on any new appointments to ensure that any potential conflicts of interest can be identified and addressed
appropriately. Any potential conflicts of interest in relation to proposed Directors are considered by the Board prior to an individual’s
appointment. In the financial year ended 2 September 2023, there were no declared conflicts of interest, and there have been no
declared conflicts of interest in the period from 2 September 2023 to the date of this Annual Report.
At the outset of every Board and Committee meeting, Directors are required to declare any actual or potential conflicts in relation
to matters on the agenda. In respect of discussions relating CEO succession during FY23 and into FY24, where Peter Page and
David White were directly interested in the matters discussed, neither Peter Page nor David White voted in connection with matters
in which they had an interest. In respect of discussions relating to the CFO succession during the first half of FY23, Board minutes
reflect that Neil Austin was directly interested in discussions relating to CFO succession and accordingly note that Neil Austin
would not vote in connection with such matters.
In the first half of FY24, in relation to discussions concerning CFO succession, Board minutes reflect that David White was directly
interested and accordingly note that David White would not vote in connection with such matters. In addition, in relation to
discussions concerning the appointment of an Executive Director of Transformation, Board minutes reflect that Martin Rowland
was directly interested and therefore would not vote in connection with such matters.
Director induction and development
Upon joining the Group, each Director completes an induction which ensures each new Director is fully informed and has
the necessary support. Once appointed, each Director is provided with information on the Group’s corporate governance
arrangements, together with key policies and procedures and access to Board and relevant Committee papers. New Director
inductions also typically include meeting with the CEO, CFO, Company Secretary and members of the senior management team
and visits to several of the Company’s operational sites.
The Chair is responsible for ensuring that all Directors receive comprehensive information on a regular basis to enable them to
perform their duties properly. Briefings are provided to the Board where necessary on areas including regulatory updates, Listing
Rules requirements and updates and Market Abuse Regulations requirements. Information on upcoming legal and regulatory
changes is also provided to the Board as and when appropriate.
Support and advice
All Directors have access to the advice and the services of the Company Secretary and access to senior management across the
Group where required.
Directors can obtain independent professional advice at the Group’s expense in performance of their duties as Directors. None of
the Directors obtained independent professional advice at the Company’s expense in the financial year ended 2 September 2023.
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The Board and the Board Committees are also supported by external advisers on a regular basis in respect of matters such as
remuneration, pensions, property, governance and compliance. PricewaterhouseCoopers LLP continued to act as professional
advisers to the Remuneration Committee during the year. Further details can be found in the Remuneration Committee Report on
pages 78 to 102 (inclusive).
Attendance at meetings
The Board met on seven scheduled occasions during the financial year ended 2 September 2023. Meetings are scheduled around
events in the corporate calendar, such as finalisation of the full and half year accounts, year-end and the AGM. In addition to regular
scheduled meetings, a number of additional meetings took place during the year in order to deal with specific business arising
from time to time.
Details of Director attendance at scheduled Board and Board Committee meetings during the year ended 2 September 2023,
against the number of scheduled meetings they were eligible to attend, are shown below:
Total no. of scheduled meetings
Directors in post during FY23
Peter Page1
David White2
Neil Austin3
Tim Jones4
John Worby
Ian Wood
Shelagh Hancock
Stuart Lorimer
Martin Rowland5
Notes:
Board
7
7 (out of 7)
4 (out of 4)
3 (out of 3)
4 (out of 4)
7 (out of 7)
7 (out of 7)
7 (out of 7)
7 (out of 7)
3 (out of 3)
Nom-Com
Audit Com
Rem-Com
2
2 (out of 2)
N/A
N/A
2 (out of 2)
2 (out of 2)
2 (out of 2)
2 (out of 2)
2 (out of 2)
N/A
5
N/A
N/A
N/A
N/A
5 (out of 5)
5 (out of 5)
5 (out of 5)
5 (out of 5)
N/A
5
N/A
N/A
N/A
2 (out of 2)
5 (out of 5)
5 (out of 5)
5 (out of 5)
5 (out of 5)
N/A
• N/A – Not applicable (where a Director is not a member of a Committee).
• Executive Directors may attend Committee meetings (or parts of such meetings) by invitation where required.
• Several unscheduled Board and Audit Committee meetings were held during the financial year ended 2 September 2023 in
relation to the delayed announcement of year end results and subsequent suspension of share trading.
• Several unscheduled Board and Nomination Committee meetings were held during the financial year ended 2 September 2023
in relation to Board member changes.
• Several unscheduled Board and Remuneration Committee meetings were held during the financial year ended 2 September
2023 in relation to Board member changes and changes in senior management.
• Gillian Watson joined the Board on 9 October 2023 and was therefore not on the Board during FY23.
• John Worby was a member of the Board throughout FY23 and stood down from the Board on 31 October 2023.
1 Peter Page was a member of the Nomination Committee but stood down as Chair of the Committee on 2 May 2023, and stood down from the Board and left the Group
on 17 November 2023.
2 David White joined the Board on 21 February 2023.
3 Neil Austin stood down from the Board on 21 February 2023.
4 Tim Jones joined the Board on 21 February 2023.
5 Martin Rowland joined the Board on 6 March 2023.
All Directors are expected to attend scheduled Board meetings and relevant Committee meetings in addition to the Annual
General Meeting unless they are prevented from doing so by prior work or extenuating personal commitments. In advance of all
Board meetings the Directors are supplied papers covering the matters to be considered. Members of the senior management
team and other third parties may also attend meetings, or parts of meetings, by invitation. Were a Director unable to attend a
particular meeting, he/she would receive relevant briefing papers and be given the opportunity to discuss matters with the Chair
or other Directors. This did not occur in the financial year ended 2 September 2023.
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OverviewStrategic ReportCorporate GovernanceFinancial Statements 56
CORPORATE GOVERNANCE REPORT CONTINUED
Meeting activities
Board agendas are set by the Chair in consultation with the Executive Directors with the assistance of the Company Secretary.
Each includes a balance of the Board’s principal responsibilities which can be grouped into eight areas as outlined below:
Role of the Board
Board Activity
Strategy
To set strategic aims and
objectives, including those relating
to Environmental, Social and
Governance considerations.
Financial
Performance
To assess financial performance,
track capital investment and
financial planning.
• Reviewing progress against strategic aims and objectives
throughout the year.
• Reviewing new business developments and opportunities
including potential acquisitions and investments in research
and technology.
• Refining strategic priorities in line with market developments.
• Monitoring financial performance.
• Overseeing preparation and management of the financial
statements.
• Approving budgets.
• Ensuring adequate cash and external finance.
• Approving major capital projects, acquisitions or materially
significant contracts.
• Determining dividend policy.
• Determining pensions strategy.
Health & Safety
To approve the Health & Safety
strategy, monitor performance and
drive a culture of safety and care.
• Focus on performance through Health & Safety metrics and
target reports from management at the start of each meeting.
• Providing support where appropriate to drive continuous
Risk
Environment
People and
Culture
Stakeholder
Engagement
To set the approach to risk
management and oversee the
Group’s risk and internal control
framework.
To set sustainability priorities and
oversee climate-related risks and
opportunities. To ensure decisions
are sustainable in the long term and
the approach to climate change
is addressed through work on
strategy, operations and risk.
To understand employee views and
set the cultural tone underpinning a
fair workplace and ethical business
practice.
To ensure that effective
engagement with employees,
shareholders and other
stakeholders is carried out,
and feedback considered.
improvement.
• Considering feedback from external and internal audit.
• Reviewing financial forecasts and other considerations in
support of the viability statement.
• Considering environmental and climate-related impacts on the
Group and wider stakeholders.
• Setting climate-related and sustainability goals and Executive
Director and senior management remuneration structures
linked to environmental objectives.
• Reviewing progress against the Group’s sustainability strategy.
• Promoting the Group’s culture and behaviours.
• Monitoring and assessing feedback from employees and
ensuring employee interests are considered.
• Succession planning for Board Members and senior
management.
• Approving strategy for stakeholder engagement.
• Approval of public announcements.
• Considering feedback from investor meetings and roadshows.
Governance
To promote responsible leadership
based on transparency.
• Ensuring compliance with legal, regulatory and disclosure
requirements.
• Determining Group delegations of authority, including matters
reserved for the Board, and Terms of Reference for Board
Committees.
• Reviewing potential conflicts of interest.
• Overseeing Board and Committee performance evaluation.
• Succession planning and Board appointments.
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Activities in FY23
In addition to the regular items, during the financial year ended 2 September 2023, specific areas of focus for the Board included:
Area of focus
Progress
Scrutiny of financial control and reporting processes,
specifically where accounting judgements are required,
including revenue recognition in the Engineering division.
Continued development of the strategy to grow shareholder
value.
Development of the Speciality Agriculture division through
organic growth opportunities and carefully targeted
acquisitions.
The Audit Committee, on behalf of the Board, has received
regular updates on improvements being made to the Group’s
control environment. Revenue recognition documentation has
been refreshed to ensure consistency of application across the
Engineering division.
The first stage of the Group’s review of strategic options, the
sale of the Agricultural Supplies division, was completed on
26 October 2022 with the process to close the completion
accounts finalised during August 2023. The Board is continuing
to develop the strategy to increase shareholder value.
In UK Speciality Agriculture the focus has been to achieve
a co-ordinated market presence and to be as effective as
possible. Changes in personnel have been made to co-
ordinate and consolidate areas of commonality between the
Speciality Agriculture businesses such as commercial, finance,
HR, operational improvements and sales and marketing to
ensure we have the resources and capability to address the
current market challenges.
Development of opportunities for growth in the Engineering
division through focusing on the unique strengths and
qualities of the current businesses to realise their potential.
The Engineering division has had high activity levels during
FY23 and has strengthened its order book with a number of
significant contract wins.
Onboarding new Board members.
Stronger emphasis on climate-related risks and opportunities
including the establishment of an Environmental Steering
Group and supporting activities to ensure it is effective in
setting the direction for the Group.
Implementation of a new ERP system in the US feed
blocks business.
During FY23, three new Board members joined the Board:
Tim Jones as Non-Executive Chair, David White as Chief
Financial Officer (appointed as Chief Executive Officer from
17 November 2023), and Martin Rowland, as Non-Executive
Director (appointed as Executive Director of Transformation
on 13 November 2023). New Board members completed an
induction, met with other Board members and members of
the Senior Leadership Team and completed visits to several
of the Group’s operational sites.
The Environmental Steering Group was established in February
2023, and is chaired by our CEO and includes colleagues from
across all our businesses. The Environmental Steering Group
is supported by the Green Teams which were launched at
the start of FY23. There is a Green Team at each of our sites
responsible for considering resource efficiencies together
with the environmental and social impacts of our business at a
local level. The Environmental Steering Group and the Green
Teams publish regular newsletters on the Group’s intranet
(CarrsConnect), and ESG is a standing agenda item at Board
meetings. For further information please see pages 34 and 35.
Successful activities on the ERP implementation in the US feed
blocks business were undertaken during FY23. Work on this
project was scaled back to ensure the successful decoupling
of the Agricultural Supplies division IT systems. Work will
continue into FY24 with implementation expected in June 2024.
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CORPORATE GOVERNANCE REPORT CONTINUED
FY22 year-end process
In addition to the activities detailed on the previous page, the Board, working alongside the Audit Committee and Chief Financial
Officer, also dealt with challenges in finalising the Group’s year-end accounting and audit process for FY22. In November 2022
a delay was announced to the completion of the year end process that had several consequences, including a temporary
suspension of trading in the Company’s ordinary shares, delayed release of the Annual Report and audited results and payment of
the final dividend later than usual. The Company, overseen by the Audit Committee, worked closely with its external auditor, Grant
Thornton UK LLP (“Grant Thornton”) to ensure that the FY22 results were not delayed any longer than necessary.
The Board’s focus during that period was to ensure that the Company complied with its legal and regulatory obligations and
stakeholders were kept informed. Under the Financial Conduct Authority’s (“FCA”) Disclosure Guidance and Transparency Rules,
the Company was required to publish its audited FY22 results by 3 January 2023. The Board requested, and the FCA confirmed, that
the listing of the Company’s ordinary shares of 2.5 pence each (the “Ordinary Shares”) be temporarily suspended with effect from
7.30 a.m. on 4 January 2023. During the period of delay, the Company made five announcements via the regulatory news service
(“RNS”), and held a number of calls with major shareholders to update on progress. The Company’s audited FY22 results were
published on 23 March 2023, with the Company’s Ordinary Shares being restored four working days later following confirmation
from the FCA.
Once the year-end accounting and audit process for FY22 was complete, the Chief Financial Officer undertook a detailed review to
understand the shortcomings, and where improvements could be made to ensure that similar issues are not encountered in future
years. Areas identified for improvement were agreed with Grant Thornton and included in the audit plan for the FY23 year end.
These included an earlier review of revenue recognition in the Engineering division, obtaining specialist input into key judgement
areas and remediation of control concerns raised by Grant Thornton during its FY22 audit work. Group resources have also been
used to support business unit teams through the year end reporting process.
Focus for FY24
At the date of writing this Annual Report, it is anticipated that the following areas will receive focus by the Board during the year
ending 31 August 2024:
• Development of the strategy across both divisions to increase shareholder value
• Embedding new Speciality Agriculture divisional leadership, supporting them to develop commercial opportunities and drive
operational efficiencies
• Assessment of opportunities to invest in the Engineering division, to optimise production capacity and maximise growth potential
• Strengthening the role of the Environmental Steering Group in setting the direction of the Group’s response to climate-related
risks and opportunities
• Driving further improvements in the Group’s financial reporting processes to improve performance management and
forecast accuracy
• Implementation of ERP system in US feed blocks business
Board evaluation
The Board reflects on its performance and effectiveness annually. In 2023, the Board review was facilitated internally by the Chair
with support from the Company Secretary. The 2023 internal review took the form of two questionnaires: one focussed on Board
Governance and structure around the Corporate Governance Code 2018, and the other focussed on self-assessment.
The last externally facilitated Board review took place in 2021. In accordance with the principles of the UK Corporate Governance
Code, we intend to externally facilitate next year’s Board review.
The feedback was the subject of review and discussion by the Board. Overall, there was a positive response to the functioning of
the Board and Committees. As there had been a number of changes at Board and Committee level during the year, the evaluation
provided a timely and valuable perspective on Board Governance. The recommendations which the Board plan to take forward for
FY24 are set out on the following pages. An update will be provided in the Company’s 2024 Annual Report and Accounts.
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Recommendation
Progress to date
Future plans
Recommendations from internal evaluation during 2023:
Focus on Group purpose and values.
Focus for FY24
Stakeholder engagement.
Focus for FY24
Ongoing review of Board performance,
composition and skills throughout the
year.
Focus for FY24
Board focus.
Focus for FY24
Review of the Group’s purpose and
values to ensure these are reflective of
the strategy and Group.
More structured engagement
programme for the Board with all
stakeholder groups together with
informal engagement opportunities to
be reviewed to enable the Board to be
closer to stakeholders.
Regular review of skills and experience
to ensure the Board is well positioned to
continue reviewing strategic options for
the Group.
Review of Board agenda topics,
updates and focus to ensure Board
and Committee meetings are effective
and continue to have an in-depth
understanding of the market in which the
businesses operate.
The recommendations agreed following the internal review in 2022 and the 2021 external review were a focus for the Board
throughout the year. A summary of the recommendations together with actions taken and future plans are set out below and on
the following page:
Recommendation
Progress to date
Future plans
Recommendations from internal evaluation during 2022:
Develop reporting on targets/
performance objectives.
Increase focus on employee
engagement.
Board training.
All business areas submitted a three-
year plan during FY23, with senior
manager performance objectives and
bonuses being linked to the plan
and budgets.
Reducing the internal reporting cycle
duration through better use of existing
systems is a priority. This will support an
improvement in forecast accuracy by
utilising management information more
timeously.
The Group’s intranet (CarrsConnect) has
played a key role during FY23 ensuring
that colleagues are kept informed.
The Board has met with members of
the senior leadership team and also
undertaken site visits to meet with
colleagues across the Group.
Employee engagement will continue
to be developed as we explore
communication strategies to ensure
that our businesses in the UK and
internationally are consulted and kept
informed. For more information see
pages 62 to 66 (inclusive).
Board training has been provided
throughout the year, from business-
specific topics and site visits, to training
provided by external providers on specific
governance and regulatory matters.
Following on from the FY23 Board
Evaluation, a programme of Board
training events is being developed to
take place throughout the year.
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CORPORATE GOVERNANCE REPORT CONTINUED
Recommendation
Progress to date
Future plans
Recommendations from external evaluation during 2021:
Increase focus on strategy
development.
Determine risk appetite of Board.
Having taken the first steps in the
ongoing process of strategic change for
the Group, the Board has continued to
develop Group strategy.
Good progress has been made
on enterprise risk with a base line
framework established to enable risk
appetite to be assessed.
Reduce level of operational detail.
Board effectiveness review has been
undertaken and the results discussed
at the Nomination Committee.
Embed ESG considerations.
Considerable progress has been made
on ESG considerations. The Group’s
Environmental Steering Group is
chaired by the CEO, and Green Teams
ensure that environmental and social
matters are considered at all levels
across all Group businesses. The Board
continues to promote high standards of
governance.
The Board will continue to review
strategic options including review of
market insights and Group competencies.
Training and guidance on risk for the
Group is to be developed to embed a
risk culture within the Group. The Audit
Committee will continue to monitor risk
reporting and the maturing of the risk
framework. The Board will assess and
review risk appetite against strategic
developments.
Following the Board effectiveness review,
the Chair and the Company Secretary
are reviewing the Board calendar and
agenda, to better align with strategy,
performance and governance. The CEO,
CFO and senior management will provide
input on agreed key business objectives
which will ensure focus and support
optimisation of the Board’s effectiveness.
Details of future sustainability initiatives
are set out on pages 34 to 44 (inclusive).
INTERNAL CONTROLS
The organisational structure of the Group has been established to ensure effective implementation and monitoring of the Group’s
objectives. The Group’s processes have been designed to ensure that robust controls are effectively embedded in operational
activities. The Board provides oversight of those controls and reviews their effectiveness, together with processes for risk
management which are designed to safeguard the assets of the Group. Our systems are designed to manage any risk of failure
to achieve business objectives and to provide a reasonable level of assurance against material misstatement or loss. The FY22
report of our external auditor identified a number of process and control concerns, which, given the extended year end close
process, impacted the first half of the current financial year. Actions have been taken across the Group to close these concerns
or, if required, to mitigate any associated risks identified. The Audit Committee supports the Board in considering the control
environment and the report on pages 72 to 77 (inclusive) provides further information.
The Group’s financial reporting processes are a critical part of the Group’s internal controls framework. Monthly reports are received
from all of the Group’s subsidiaries and joint ventures. Submitted information is consolidated in the Group’s financial reporting
system and subject to validation checks by the central Group finance team, before being reviewed by the Chief Financial Officer.
Information on performance is presented to the Board on a monthly basis and subject to review at every Board meeting. All
monthly reporting is prepared in line with Group accounting policies, which are reviewed annually and are also subject to review by
the Group’s external auditor, Grant Thornton. The Group’s internal risk-based control systems have been fully operative throughout
the year and up to the date of this Annual Report and Accounts.
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61
RISK MANAGEMENT
Initial identification of risks, and the actions required to mitigate these, arises through reviews held with managing directors of each
business unit. These are subsequently discussed with the Executive Directors to consider the potential implications of these risks
and to consider which pose the greatest threat to Group performance. The effectiveness of mitigating actions is also considered
and appropriate steps taken.
The Audit Committee reviews the effectiveness of risk management and internal control systems. Reports on risk are delivered to
the Board which, together with direct involvement in strategy, investment appraisal and budgeting, enable the Board to report on
the overall effectiveness of internal control.
A summary of the risk management framework and key risks to the Group are set out on pages 20 to 23 (inclusive).
COMPLIANCE STATEMENT
The Board confirms that the Company has, throughout the year ended 2 September 2023, applied the principles, both in spirit and
in form, and complied with the requirements of the UK Corporate Governance Code issued by the Financial Reporting Council
(“FRC”) in July 2018 (the “Code”), with the exception of provisions 9 and 41 noted below.
Code Provision 9:
Interim arrangements
Code Provision 41:
Workforce engagement on Executive remuneration
The interim Executive arrangements first
announced on 12 October 2021 included
the Chair acting in an Executive
capacity, at which time he ceased to be
independent. Peter Page stood down
as Chair upon the appointment of Tim
Jones as the new Non-Executive Chair
for the Group, which took effect on 21
February 2023. Peter stood down from
the Board and left the Group on 17
November 2023.
The Remuneration Committee evaluates
remuneration across the Group such as
basic pay increases, bonuses and share
awards, when determining remuneration
levels for Executive Directors and
senior management. Whilst specific
feedback on the alignment of Executive
remuneration with the broader Group
remuneration policy has not been
sought, workforce engagement has
been ongoing throughout the year.
Further details on the considerations
of the Remuneration Committee
can be found on pages 78 to 102
(inclusive). Whilst the Group’s employee
engagement survey in October
2021 sought feedback in relation to
remuneration and benefits, this was not
directly in relation to the alignment of
Executive remuneration with broader
Group remuneration policy.
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CORPORATE GOVERNANCE REPORT CONTINUED
STAKEHOLDER ENGAGEMENT AND
OUR SECTION 172 RESPONSIBILITIES
We are dedicated to full and proper consideration
of the interests and views of our broader stakeholders.
We believe that this produces better outcomes and
enhances the sustainability of our businesses. Effective
engagement enables us to focus on what matters,
improve business and operations, and create long-term
value for all our stakeholders.
ENVIRONMENT
EMPLOYEES
COMMUNITIES
CUSTOMERS
AND SUPPLIERS
PARTNERS
INVESTORS
We have a broad range of
stakeholders and as a result we adapt
our approach to specific stakeholders,
which enables increased understanding
of their priorities and perspectives.
We recognise that full and involved
engagement is fundamental to
informing Board and Committee
discussions and subsequent decision
making. We ensure that a regular
dialogue is maintained with our
stakeholders, that the Board
is involved in direct engagement
with our stakeholders, and that
engagement is built into day-to-day
management across the Group. On
the following pages, we highlight our
key stakeholders and explain why
and how we engage with them, and
detail outcomes achieved in the year.
These disclosures demonstrate our
recognition of, and regard for, the
matters set out in section 172(1) of
the Companies Act 2006.
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EMPLOYEES
Why we need their engagement
Our people are vital to the success of our business
and remain a primary consideration in everything
we do. We focus on inclusivity and strive to ensure
that our people remain an active part of our
businesses to help us shape the future of the Group.
We continually work to create a safe environment
where employees have the space and opportunities
to develop their skills, potential, and experiences.
We want our people to feel properly valued and
rewarded for their contributions to the business.
We listened
Engagement during FY23 took place through a
variety of methods designed to ensure that our
people remain fully engaged with us, for example:
• Regular briefings, announcements, and
vlogs available through CarrsConnect and on
noticeboards.
•
Informal meetings with Directors, utilising our
‘open-door’ policy.
• Non-Executive Director briefings and site visits
designed to better understand the views of our
people together with the issues and opportunities
for them and their businesses.
•
Interactions with the Board’s Employee
Engagement representative, responsible for
reporting on employee-related matters to the
Board with the aim of ensuring that employee
interests are properly considered in Board
decision making.
• Board members, regular updates and meetings
with senior managers.
For more information, see from page 26 to 31
(inclusive).
We took action
– Improved Employee communications.
The appointment of a Communications Manager in August 2022 has led to
significant upgrades to our intranet, CarrsConnect and communications across
the Group. e-notice boards have been introduced at most of our sites, alongside
static noticeboards, with colleagues encouraged to share their news stories
via CarrsConnect. This ensures that our people remain informed about key
developments in an engaging and interactive way.
– Well-being and mutual respect.
We continue to make progress on feedback from previous employee
engagement surveys. The focus remains on our commitment to colleague well-
being and mutual respect (see pages 26 to 31 (inclusive)).
– Training and development.
We continually offer broad training and development opportunities, as well
as internal training delivered throughout the year (see pages 28 to 30). In
particular the corporate induction was updated to make it more reflective of the
Group and the Code of Ethics was also updated following the disposal of the
Agricultural Supplies division. Updated training and development opportunities
within the Group have been promoted, and our engineering apprentice training
school continues to grow and benefit our home-grown talent.
– Green Teams.
We established Green Teams in every operational site during FY23. The teams
meet regularly to discuss and report on issues. Representatives from the
different Green Teams hold meetings at regular intervals to ensure all Green
Teams are working towards the same goals and targets.
– Access to Board members.
Members of the Board have attended site visits and Board meetings have been
held at operational sites whenever possible.
– Executive Director activity.
The CEO and CFO have spent time at various operational sites, including USA and
Germany which provided an opportunity for face-to-face meetings. Throughout
FY23, Peter Page held regular briefings in person and via Teams to ensure
colleagues were kept informed of developments across the Group, including
personnel changes and updates on Board recruitment and succession.
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CORPORATE GOVERNANCE REPORT CONTINUED
CUSTOMERS AND SUPPLIERS
Why we need their engagement
Regular engagement with our customers and
suppliers is important to our business and the
ongoing development of our business model. It
allows us to better understand their needs and
priorities and helps shape our strategy. We recognise
that customers want to work with businesses who
can consistently meet demands, put their interests
first, and deliver on promises.
We listened
Engagement with current and potential customers,
distributors and suppliers takes the form of:
• Regular and open dialogue between our
management teams and with those with whom
we do business which helps build long-lasting
and trusted relationships.
• Reporting to the Board regularly, both formally
through presentations and business plans,
and also informally to ensure that customer
perspectives are properly understood as part of
the Board’s decision-making process.
• Attendance at UK and international trade events and shows.
• Site visits to customers and distributors in the UK and internationally.
• A focus on delivering quality and continual improvement of our products
and practices when required.
We took action
– Understanding their needs now and in the future.
Understanding our customers helps us to develop our strategy in a way which
ensures future growth for the benefit of all our stakeholders. Throughout
FY23 we maintained a constant dialogue with our customers and suppliers
to understand their developing needs. This engagement on a day-to-day
basis has enabled us to add value to our customers’ businesses, through
contingency planning and risk reduction on the large-scale projects being
delivered by our Engineering division, to providing support and expertise to
our customers and suppliers across our Speciality Agriculture division (see
website https://www.carrsgroup.com/news/).
– Ongoing relationships.
During FY23 we have continued to engage with our customers through our
news and social media channels. Further information can be found on our
website (https://www.carrsgroup.com/news/)
– Engagement.
Our agricultural brands continue to offer customers access to competitions and
promotions to engage with them in a new way and encourage interest in, and
dialogue about, our products.
We took action
– Proactive investor relations.
In the year, the Chair engaged directly with different shareholders
on a number of topics to better understand their views more
broadly. In addition to our regular investor engagement, during
FY23 we liaised with key investors on a number of specific matters.
Further details can be found on pages 79 and 80.
– Engagement with the Board.
We ensure that the Board agenda includes a specific item for
the consideration of shareholders views, and we do this with the
involvement of the Group’s brokers as required.
– Investor website.
During FY23 we took steps to upgrade our digital connectivity with
our investors. We have a refreshed website which will provide key
information.
– Announcements.
Our stock exchange announcements, press releases and update
broadcasts are always publicised internally and externally, so
that our investors and colleagues can keep up to date with any
changes.
– Meetings.
This financial year involved an Annual General Meeting and two
General Meetings which enabled the Board and colleagues to
engage with shareholders. In addition to the formal part of the
meetings, shareholders also had the opportunity to speak with
Board members informally.
INVESTORS
Why we need their engagement
Performing well for our investors is our priority as investor trust
and confidence in the Group is essential. All investors, whether
private individuals, employee shareholders or institutional
investors, need to be able to trust us to manage their assets
and execute the Group’s strategy. We recognise that in so
doing, we must act ethically, in a sustainable manner, and in
accordance with good governance and acting fairly as between
members of the Company. Our investors expect open channels
of communication about the Group’s current and expected
performance so that they can properly assess risks and
opportunities when making investment decisions.
We listened
We communicate with investors using a variety of different
mediums:
• Shareholders have access to the Company’s website at www.
carrsgroup-ir.com.
• We maintain a regular calendar of announcements and events
for investors and host accessible online presentations on the
full year and interim results.
• Significant matters relating to trading or development of the
Group are disseminated to the market by way of Stock Exchange
announcements, and are uploaded to the Company’s website.
• The Chair, Non-Executives and Company Secretary regularly
engage with investors on governance issues and other
matters concerning the Board.
• The Chief Executive Officer and the Chief Financial Officer
meet with investors following half year and year end results
announcements, and as requested at other times.
• All reports and updates are made available on the Company’s
website. The Group maintains dialogue with substantial and
institutional shareholders a nd analysts.
• Enquiries from individual shareholders are welcomed and
should be addressed through the Company Secretary’s office.
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| Annual Report & Accounts 2023
65
PARTNERS
Why we need their engagement
The Group includes several businesses with strategic partners
with whom we maintain an active dialogue. We are proud
that our partnerships are founded upon mutual trust and
strategic alignment to ensure the most beneficial outcome for
everyone. Our partners value long-term commitment, open
communication, and diligence so that we can effectively pursue
jointly developed strategic goals.
We took action
– We meet and we talk.
These longstanding and trusted relationships are a consequence
of our regular engagement and are a foundation for the success
of those businesses. On this foundation we build strength and
resilience into our business model, to our mutual benefit. Having
strong relationships underpinned with mutual respect enables us to
work collaboratively and understand our partners’ key drivers.
We listened
We maintain an active dialogue with our strategic partners
through:
• Executive meetings and management team meetings
ensuring that the businesses work very closely to understand
risk and opportunities, and in the development of business
strategy.
• Regular formal and informal meetings with our partners
involving both Board members and senior management
covering strategic, operational and industry issues.
• Regular reporting to the Board to ensure that it remains fully
appraised and informed of matters impacting our partners.
– Input.
The CEO and CFO make every effort to meet with our partners
in person. This in-person engagement has been very useful in
producing an honest and open dialogue which leads to better
relationships and business improvements.
COMMUNITIES
Why we need their engagement
Our operation spans 17 sites with colleagues based
in various countries. We recognise the importance
and value of working within and contributing to
these local communities. Our various community
stakeholders have broad interests ranging from the
provision of jobs and investment in local economies,
to supporting vulnerable people and charitable
initiatives in their locality.
We listened
We engage with our local communities by:
• Encouraging active participation in community
initiatives.
• Continuing to support a range of selected
charitable causes.
• Supporting and developing our own employment
and apprenticeship schemes.
• Reporting to the Board on significant community
issues and sustainability programmes.
We took action
– Community action.
We recognise that the Group is a big part of the local business community and
understand our responsibilities to give back. We do this through supporting
and donating to local causes where appropriate. For more information see our
Responsible Business Report on page 32.
– More than financial support.
In addition to the financial support, we also provide practical support to local
communities. We provide apprenticeship schemes and training opportunities
and through our involvement with the Cumbrian Manufacturing Alliance we
have contributed to the local community. We are proud that across the Group,
our people devote considerable time and resources to good causes and
community initiatives including supporting local food banks, local charities
and sponsoring local events near to our sites. For more information see our
Responsible Business Report on pages 25 to 35 (inclusive).
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CORPORATE GOVERNANCE REPORT CONTINUED
We took action – Group-wide action.
The Group ensures that environmental considerations feature prominently
across the Group. Initiatives such as the Carr’s Go Green vehicle scheme, the
establishment of Green Teams at our sites, and changes in the way we source
and use electricity at our sites all contribute to our sustainability goals. For more
information see our Responsible Business Report on pages 34 to 44 (inclusive).
ENVIRONMENT
Why we need their engagement
We recognise that sustainable business and
environmental impact are key areas of focus
and integral to the growth of the Group. We
are committed to proactively improving the
sustainability of our business and minimising
our environmental impact.
We listened
• We ensure that we practise responsible
behaviours at all times within the Group.
• We are party to raw material sustainability
programmes.
• Supporting colleagues making more
environmentally friendly choices.
• Encouraging ownership of local initiatives aimed
at addressing the environmental and social
impacts of our business at local level.
• Reporting to the Board on sustainability
programmes.
Section 172 Statement
Engagement with stakeholders is an essential element in Board and Committee discussions and decision making and supports
the principles of Section 172 of the Companies Act 2006. Section 172 requires directors of a company to act in the way which they
consider, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and
in doing so have regard (amongst other matters) to:
• the likely consequences of any decisions in the long term;
• the interests of the company’s employees;
• the need to foster the company’s business relationships with suppliers, customers and others;
• the impact of the company’s operations on the community and environment;
• the desirability to maintain a reputation for high standards of business conduct; and
• the need to act fairly as between members of the company.
At Carr’s these factors are carefully considered in the Board’s key decisions and strategic discussions. The Board receives regular
updates and reports from business areas which include matters concerning our stakeholders. Directors are also provided with
details of our strategic progress, financial performance and risk management and matters such as health and safety, ESG and
corporate governance are also included. The information received is considered in the Board’s discussions, with the Board seeking
further information and assurances where appropriate. Board minutes detail the Board decisions and the relevant factors which
have been taken into account when reaching those decisions. Maintaining good governance and high standards of conduct is
central to the Directors who receive regular training on Directors’ duties and obligations under Section 172.
In FY23 we completed the disposal of our Agricultural Supplies division. The sale of the Agricultural Supplies division was a
significant step in shaping the Group’s future, and one of the most important decisions made by the Board in recent years. Given
the magnitude of the decision, stakeholder considerations were firmly at the heart of the process. The internal review process
which took place during 2022 considered our various stakeholder groups, details of which can be found on page 44 of the 2022
Annual Report and Accounts. The consequences of the decision to dispose of the Agricultural Supplies division were considered
by the Board, which ultimately decided that proceeding with the transaction would achieve growth in shareholder value in the
long term. Following the announcement of the proposed sale on 31 August 2022, the Group’s shareholders voted in favour of the
Board’s recommendation at a General Meeting on 19 September 2022, with 98.7% of votes being cast in favour and representing an
absolute majority of all shareholders. Following shareholder approval, the sale was ultimately completed on 26 October 2022.
Further details on how the Board discharges its duties under s.172 are set out in pages 62 to 66 (inclusive) and throughout the
Strategic Report on pages 01 to 45 (inclusive) and in the Corporate Governance Report on pages 46 to 107 (inclusive). Specific
details relating to the matters set out in Section 172(1) (a-f) can be found as follows: (a) the likely consequences of any decisions
in the long term (see above details of the sale of the Agricultural Supplies division, and pages 4 to 7 (inclusive), pages 12 and
13, pages 18 and 19, pages 20 to 23 (inclusive), pages 36 to 44 (inclusive) and pages 50 to 61 (inclusive); (b) the interests of the
company’s employees (see pages 25 to 35 (inclusive) and pages 62 to 66 (inclusive); (c) the need to foster the company’s business
relationships with suppliers, customers and others (see above on pages 62 to 66 (inclusive); (d) the impact of the company’s
operations on the community and environment (see page 32 and pages 34 to 44 (inclusive)) and pages 62 to 66 (inclusive); (e) the
desirability to maintain a reputation for high standards of business conduct (see pages 25 to 35 (inclusive) and (f) the need to act
fairly as between members of the company (see pages 62 to 66 (inclusive)).
Carr's Group plc
| Annual Report & Accounts 2023
NOMINATION COMMITTEE REPORT
67
Tim Jones
Nomination Committee Chair
NOMINATION COMMITTEE MEMBERS*
Tim Jones (Chair)
Non-Executive Director
Ian Wood
Non-Executive Director
Shelagh Hancock
Non-Executive Director
Stuart Lorimer
Non-Executive Director
Gillian Watson
Non-Executive Director
*As at the date of this report
INTRODUCTION
The Nomination Committee reviews the structure, size
and composition of the Board and considers the optimal
level of independence, diversity of skills, knowledge and
experience required for the Board to operate effectively
and deliver Group strategy. It oversees Board succession
planning and is responsible for considering and making
recommendations on the appointment of Executive and
Non-Executive Directors.
The Committee also evaluates succession planning
for the Board and the senior managers to anticipate
future vacancies arising due to promotion or retirement
along with developments in the Group. In performing its
responsibilities, the Committee gives full consideration to
the requirements of good governance and to the benefits
of diversity (whether cultural, ethnic, gender or otherwise)
both within the Board and across the Group’s leadership
teams.
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OverviewStrategic ReportCorporate GovernanceFinancial Statements 68
NOMINATION COMMITTEE REPORT CONTINUED
Committee membership
The Committee currently comprises the
Chair, Tim Jones and four independent
Non-Executive Directors: Ian Wood,
Shelagh Hancock, Stuart Lorimer and
Gillian Watson. Peter Page chaired
the Nomination Committee for part of
the year, handing over to Tim Jones
following the General Meeting of the
Company on 2 May 2023. Peter stood
down from the Board on 17 November
2023. John Worby was a member of the
Committee throughout FY23 and stood
down from the Board on 31 October
2023. Gillian Watson joined the Board
on 9 October 2023, also becoming a
member of the Committee.
Meetings in the year
The Committee met on two scheduled
occasions during the financial year.
Details of meetings of the Committee
and attendance can be found on page
55. Several unscheduled Nomination
Committee meetings were also
held during the financial year ended
2 September 2023 in relation to
Board changes.
Responsibilities and activities of
the Committee
The key areas of activity over the
financial year ended 2 September 2023
are shown opposite alongside the key
responsibilities of the Committee. In
some instances, the activities noted
spanned more than one financial year.
Further details of the responsibilities
of the Committee can be found in the
Nomination Committee’s Terms of
Reference located at www.carrsgroup.
com/corporate-governance/.
Key Responsibilities of the Committee
Activities during the year
Reviewing the structure, size
and composition of the Board
and monitoring the range
of skills, knowledge and
experience required for the
Board to operate effectively
and to deliver the Group’s
strategy.
Overseeing Board and senior
management succession
planning, including setting
objective selection criteria
and transparent recruitment
processes, and making
recommendations to the Board
in relation to the appointment
of Executive and Non-
Executive Directors.
Setting the Group’s policy on
diversity and inclusion and
overseeing its implementation
in succession planning across
the Group.
Reviewing the leadership
needs of the Group, both
Executive and Non-Executive,
to ensure the businesses
operate effectively in their
particular markets.
Reviewing the Committee’s
Terms of Reference to ensure
it is operating effectively and
reflects the Committee’s remit
and recommend any changes
it considers necessary to the
Board for approval.
• Review of Director skills to assess the range of
skills, attributes and experience on the Board,
to ensure that it remains effective, balanced
and suited to the Group’s strategic priorities.
• Undertook an internal Board effectiveness
review.
• General review of the structure, size,
composition and diversity of the Board, its
Committees and senior management across
the Group.
• Non-Executive Chair succession, with Tim
Jones being appointed as Non-Executive
Chair Designate for the Group.
• CEO succession with Peter Page appointed
as CEO following the appointment of Tim
Jones as Non-Executive Chair.
• CFO succession with the appointment of David
White announced on 15 December 2022.
• Appointment of Martin Rowland to the Board
on 6 March 2023.
• Non-Executive Director succession planning,
with Gillian Watson being appointed to the
Board on 9 October 2023, and appointed
Senior Independent Director on 31 October
2023.
• Senior management succession planning.
• Further CEO succession, with David White
appointed as CEO with effect from 17
November 2023 following Peter Page stepping
down from the Board and leaving the Group.
• CFO succession with the appointment of
Gavin Manson as a senior manager and CFO
with effect from 13 November 2023.
• Appointment of Martin Rowland as Executive
Director of Transformation with effect from
13 November 2023.
• Implementation of the Board’s policy on
diversity and inclusion through succession
planning and recruitment of Board members.
• Publication of the Board Diversity Policy on
the Group’s investor website www.carrsgroup.
com/corporate-governance/.
• Training and development programmes
expanded.
• Review and update the Committee’s Terms
of Reference – published on the Group’s
investor website www.carrsgroup.com/
corporate-governance/.
Further information on the above activities is set out on the pages which follow.
Carr's Group plc
| Annual Report & Accounts 2023
69
Chief Executive Officer
In August 2022, following an extensive
search by the Nomination Committee,
Peter Page was asked to take on the
Chief Executive Officer (“CEO”) role
once a new Non-Executive Chair was
appointed and in place. Peter had been
working in the Group since October 2021
full-time as Executive Chair, following
agreement with the incumbent CEO,
Hugh Pelham, that he would leave the
Group and step down from the Board.
Details of the recruitment process for
the CEO role which took place during
FY22 can be found in the Nomination
Committee Report which is contained
in the 2022 Annual Report and Accounts
https://www.carrsgroup-ir.com/
content/financial/reports. Peter Page
became CEO upon the appointment
of Tim Jones as Non-Executive Chair,
which took effect on 21 February 2023.
As announced in August 2023 and later
updated on 13 November 2023, Peter
Page stepped down from the Board and
left the Group on 17 November 2023.
The process to identify a successor to
Peter Page was led by Tim Jones as
Chair of the Nomination Committee.
David White, who had joined the
Board as Chief Financial Officer on
21 February 2023 and was considered
by the Committee at that time to be
a potential successor to the CEO role,
was identified as a candidate for CEO.
Following discussion and consideration
of the scope and size of the Group
following the disposal of the Agricultural
Supplies division, the strategic plan and
the need for an efficient and orderly
handover of responsibilities, as well as
previous experience in international
senior leadership, operations and
finance roles, the Nomination
Committee recommended David as
the new CEO. The recommendation
was approved by the Board and as
announced on 13 November 2023, David
was appointed as CEO with effect from
17 November 2023.
Board composition
As part of the Group’s succession
planning and to ensure that the Board
had the experience and skills to take the
Group forward following the disposal of
the Agricultural Supplies division, new
Executive and Non-Executive Directors
were welcomed to the Board during FY23.
Non-Executive Chair
During the financial year ended 2
September 2023, the Committee
undertook a search for a Non-Executive
Chair. The search was led by Senior
Independent Director John Worby and
the recruitment process was supported
by recruitment consultants, Warren
Partners. Details of the search process
were outlined in the Nomination
Committee Report in the 2022 Annual
Report and Accounts (www.carrsgroup-
ir.com/docs/librariesprovider17/
archive/annual-interim-reports/2022-
annual-report-and-account-xhtml-
format.html) and are reproduced
here for completeness. The search
identified potential candidates based
on experience and skills. A pool
of 128 was identified, 76 of whom
were approached, of which 43 were
female. Of the 43 females who were
approached, 39 either did not reply
to the enquiry or did not pursue the
role, principally due to timing of the
opportunity. Three candidates were
shortlisted, one being female. In
November 2022 it was announced that
Tim Jones was to be appointed as Non-
Executive Chair. Tim joined the Board
and become Non-Executive Chair on 21
February 2023. Following the General
Meeting of the Company on 2 May 2023,
Tim became Nomination Committee
Chair taking over from Peter Page,
and also became a member of the
Remuneration Committee.
Non-Executive Directors
John Worby stood down as Audit
Committee Chair following the General
Meeting of the Company held on
2 May 2023 and, after nearly nine years
at Carr’s, retired from the Board on
31 October 2023 following a period of
handover and support to new Non-
Executive Directors. During his time at
Carr’s, the Board benefitted greatly from
John’s wisdom and experience and we
wish him all the best for the future.
Following the Annual General Meeting
on 21 February 2023, the Nomination
Committee commenced a search for
an additional Non-Executive Director to
join the Group. The recruitment process
was led by the Committee supported by
Pure Executive. In selecting candidates
for the role, a detailed profile matrix
was developed that also included the
position of Senior Independent Director,
a role which had been fulfilled by John
Worby. The Committee considered
experience of public companies of
similar scale to Carr’s, sector experience
as well as board committee experience.
Important skills and characteristics
as well as the balance of skills,
experience and knowledge present
across the Board, the culture of the
Group and the benefits of diversity
were also considered. 369 people
were identified as potential candidates,
of which eight were interviewed. The
short-list comprised six individuals, all
female and one from a diverse ethnic
background. Following the Committee’s
recommendation, Gillian Watson was
appointed to the Board on 9 October
2023 as an independent Non-Executive
Director. Gillian was also appointed
to the Nomination Committee, Audit
Committee and Remuneration
Committee and has the position of
Senior Independent Director following
John Worby’s retirement from the Board
on 31 October 2023.
On 6 March 2023, the Board was
joined by Martin Rowland, who was
appointed as a Non-Executive Director
as a representative of Harwood Capital
Management Limited (“Harwood”)
pursuant to a relationship agreement
between the Company and Harwood.
Martin has brought operational and
strategic experience to the Board, as
well as insights from executive and non-
executive roles. On 13 November 2023,
it was announced that Martin would
be appointed as Executive Director of
Transformation (see page 70).
Shelagh Hancock and Stuart Lorimer
were appointed as Non-Executive
Directors on 1 September 2022. In
May 2023 Stuart was appointed Audit
Committee Chair as successor to John
Worby. Details of the recruitment
process in relation to Shelagh and Stuart
which took place during FY22 can be
found in the Nomination Committee
Report which is contained in the 2022
Annual Report and Accounts www.
carrsgroup-ir.com/content/financial/
reports.
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OverviewStrategic ReportCorporate GovernanceFinancial Statements 70
NOMINATION COMMITTEE REPORT CONTINUED
Committee succession
Changes in Committee membership
reflect the Company’s Non-Executive
succession planning. Following the
General Meeting of the Company on 2
May 2023, Tim Jones succeeded Peter
Page as Nomination Committee Chair
and also became a member of the
Remuneration Committee, and Stuart
Lorimer succeeded John Worby as
Audit Committee Chair. In October 2023,
Gillian Watson joined the Nomination
Committee, the Audit Committee and
the Remuneration Committee on 9
October 2023 and John Worby stepped
down from the Board and its three
Committees on 31 October 2023. Peter
Page stepped down from the Board and
the Nomination Committee and left the
Group on 17 November 2023.
Chief Financial Officer
During the financial year ended 2
September 2023 the Committee
undertook a search for a new Chief
Financial Officer (“CFO”). David White
joined the Group on 3 January 2023
and became CFO in succession to Neil
Austin, who stood down as CFO and
from the Board on 21 February 2023.
Details of the search process were
outlined in the Nomination Committee
Report which is contained in the 2022
Annual Report and Accounts https://
www.carrsgroup-ir.com/content/
financial/reports and are reproduced
here for completeness. The recruitment
process was led by the Committee and
supported by recruitment consultants,
Russell Reynolds. Russell Reynolds
searched a large pool of potential
candidates aimed at producing a
diverse selection. Of a candidate pool
of 135, 21 were female. The Committee
considered experience and skills, as
well as sector experience and culture
of the Group. David joined the Board
on 21 February 2023 as CFO. On 13
November 2023, it was announced
that following the Committee’s
recommendation, David White would
be appointed Chief Executive Officer
with effect from 17 November 2023.
Following a recruitment process
supported by recruitment consultants
Eton Bridge, and in accordance with
the Committee’s Terms of Reference1,
the Committee recommended to the
Board the appointment of Gavin Manson
as the new CFO taking effect from
13 November 2023. Gavin has not been
appointed to the Board but, as the CFO,
attends Board meetings by invitation.
Executive Director of
Transformation
It was announced on 13 November
2023 that Non-Executive Director
Martin Rowland would be appointed
Executive Director of Transformation
with effect from 13 November 2023. The
appointment of an Executive Director of
Transformation was led by Nomination
Committee Chair, Tim Jones. The
Committee considered the role
complimentary to the existing Executive
Director positions and considered the
skills and experience the role would
require to effectively implement the
Group’s strategic plan. The Committee
recommended to the Board that, given
his experience in operational and
strategic positions in mid-size and large
corporates as well as his executive
and non-executive board experience,
Martin Rowland be appointed as
Executive Director of Transformation.
The recommendation was approved by
the Board.
As at the date of this report, Board Committee membership is as following:
Nomination Committee
Audit Committee
Remuneration Committee
Tim Jones (Chair)
Ian Wood
Shelagh Hancock
Stuart Lorimer
Gillian Watson
Stuart Lorimer (Chair)
Ian Wood
Shelagh Hancock
Gillian Watson
Ian Wood (Chair)
Shelagh Hancock
Stuart Lorimer
Gillian Watson
Tim Jones
1 The Committee’s Terms of Reference state that the Nomination Committee is required to make recommendations to the Board concerning suitable candidates as
successors for existing Directors.
Carr's Group plc
| Annual Report & Accounts 2023
71
Group succession planning and
development
The Group’s succession planning
focuses upon ensuring that sufficient
appropriately qualified and experienced
employees are recruited or developed
internally to meet the future
management and leadership needs of
the Group. Recruitment processes for
leadership and senior positions across
the Group are managed under the
supervision of the Senior HR leadership,
inviting both internal and external
candidates. Independent recruitment
consultants are also appointed where
appropriate.
Across the Group, our career pathway
and employee development initiatives
continue to evolve and are designed
to attract, retain and develop the
best talent. Further details of those
initiatives are described from pages 26
and 27. During the year, the Senior HR
leadership met with the Committee to
review succession planning for senior
management and key personnel,
together with leadership development
initiatives and training programmes
across the Group.
Diversity and inclusion
As at the date of this report, employee
numbers were 660 across five countries.
The table below shows the gender
breakdown across the Group.
The Group’s principal concern when
making employment decisions is
ensuring that candidates possess the
skills, knowledge and experience, or
the potential to develop the required
skills, knowledge and experience, to
meet the requirements of the Group.
Gender breakdown
Group Employees
Senior Managers*
Direct Reports to Senior Managers
*
Includes Executive Director with direct reports.
All appointments, whether external
recruitments or internal promotions,
are based on merit, and are not
influenced or affected by race, colour,
nationality, religion or belief, gender,
marital status or civil partnership, family
status, pregnancy or maternity, sexual
orientation, gender reassignment,
disability, or age. There are no
differences in pay structures for persons
of different genders performing similar
roles.
The Nomination Committee recognises
that diversity strengthens the Board,
and that it is important to ensure that it
is not solely comprised of like-minded
individuals with similar backgrounds.
The Group is committed to extending
diversity throughout the organisation.
Successful delivery of the Group’s
strategy depends on the recruitment
and retention of a motivated and
skilled workforce in an increasingly
competitive labour market. The Board
recognises that steps taken to improve
diversity in the workplace increase
the attractiveness of the Group to
prospective employees and enhance
the available talent pool. Details of
Board diversity, including the Board
Diversity Policy, can be found on pages
53, and details on diversity and inclusion
for all employees including senior
managers can be found on pages 26
and 27, and page 53.
Director independence
Details relating to Director
independence can be found in the
Corporate Governance Report on
page 54.
Board evaluation
In August 2023 an internal Board
effectiveness review was undertaken.
Details of the process and its outcomes
are set out in the Corporate Governance
Report on pages 58 to 60 (inclusive).
Committee effectiveness
The effectiveness of the Committee
was considered as part of the Board’s
internal effectiveness evaluation
described on pages 58 to 60 (inclusive).
The feedback was that the structure of
the Committee worked well and was in
line with good practice including with
respect to the number and roles of the
independent Non-Executive Directors.
Director re-election
In accordance with best practice under
the Corporate Governance Code, at the
forthcoming Annual General Meeting to
take place in February 2024, Tim Jones,
Ian Wood, Shelagh Hancock, Stuart
Lorimer and David White will each stand
for re-election to the Board. Martin
Rowland and Gillian Watson will each
stand for election to the Board.
The Board will set out in the Notice of
Annual General Meeting its reasons for
supporting the re-election or election of
each Director. Their biographical details
on pages 48 and 49 demonstrate the
range of experience which each brings
to the benefit of the Group.
The Nomination Committee Chair will
attend the Annual General Meeting to
respond to any shareholder questions
that might be raised on the Committee’s
activities.
Total
660
11
63
Male
Female
512
10
45
148
1
18
Tim Jones
Nomination Committee Chair
20 December 2023
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| Annual Report & Accounts 2023
OverviewStrategic ReportCorporate GovernanceFinancial Statements 72
AUDIT COMMITTEE REPORT
Stuart Lorimer
Audit Committee Chair
AUDIT COMMITTEE MEMBERS*
Stuart Lorimer (Chair)
(Non-Executive Director)
Ian Wood
(Non-Executive Director)
Shelagh Hancock
(Non-Executive Director)
Gillian Watson
(Non-Executive Director)
*As at the date of this report
INTRODUCTION
The Audit Committee focuses on effective governance
and financial reporting. It assists the Board in discharging
its responsibilities for the integrity of the financial
statements and narrative reporting, the effectiveness of
internal controls, the identification and management of
risks, and the external and internal audit processes.
The report on the pages which follow details the principal
activities of the Committee during the year, together with
information on its governance.
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| Annual Report & Accounts 2023
73
Committee membership
Responsibilities of the Committee
The primary role of the Committee is to assist the Board in fulfilling its oversight
responsibilities. This includes providing effective governance over the integrity of the
Group’s financial reporting and the effectiveness of its systems of internal control and
risk management. These responsibilities drive the main activities of the Committee
as noted below. In some instances, the activities noted spanned more than one
financial year.
Responsibilities of the Committee
Activities during the year
• Reviewed and challenged key financial
reporting judgements and estimates.
• Reviewed the Group’s going concern and
viability statement disclosures.
• Reviewed and approved the Alternative
Performance Measures used by the Group,
including Adjusting Items.
Financial Reporting
• Reviewing and monitoring
the integrity of the Group’s
financial statements
and related narrative
reporting including the
appropriateness of the
Group’s accounting policies.
• Considering the process
for assessing the Group’s
prospects and the
disclosures made in the
Viability Statement in the
Annual Report and Accounts.
• Where requested by the
• Reviewed the Group’s disclosures in respect
Board, providing advice on
whether the Annual Report
and Accounts, taken as
a whole is fair, balanced
and understandable and
provides the information
necessary for shareholders
to assess the Group’s
position and performance,
business model and strategy.
of the Task Force on Climate-related Financial
Disclosures.
• Reviewed the Group’s financial statements and
narrative to ensure that this is fair, balanced
and understandable.
• Reviewed the three-year time horizon for the
Group’s Viability Statement.
• Reviewed the Group’s budget, forecasts and
sensitivity analysis, and concluded that the
Group is viable over the three-year time horizon.
During the year the Committee
comprised four independent Non-
Executive Directors: John Worby,
Stuart Lorimer, Shelagh Hancock and
Ian Wood. John Worby stood down as
Chair of the Committee following the
General Meeting on 2 May 2023 and was
succeeded by Stuart Lorimer, who is a
qualified accountant with recent and
relevant financial experience (see page
49). Since being appointed as a Non-
Executive Director on 9 October 2023,
Gillian Watson has joined the Committee
and is the Senior Independent Director.
The Committee acts independently of
management, and the Board is satisfied
the Committee taken as a whole has
the appropriate skills, knowledge,
experience, and understanding
of the Group’s undertakings to
effectively discharge the Committee’s
responsibilities.
Meetings in the year
The Committee met on five scheduled
occasions during the financial year
(details of attendance can be found
on page 55) and has an agenda
linked to the Group financial calendar.
The meetings are attended by the
Committee members and, by invitation,
the Executive Directors, representatives
from the external auditor and other
senior finance personnel. During the
year, the Committee regularly met
privately with the external auditor.
Several additional, previously
unscheduled, Board and Audit
Committee meetings were held during
the financial year ended 2 September
2023 in relation to the delayed
announcement of FY22 year-end results
and subsequent suspension of share
trading.
Carr's Group plc
| Annual Report & Accounts 2023
OverviewStrategic ReportCorporate GovernanceFinancial Statements Members of the Committee were also
involved in the selection process for
the incoming Chief Financial Officer
(David White) who became a member
of the Board on 21 February 2023.
Details of this process are contained
in the Nomination Committee Report
on page 70. The Committee reviews its
Terms of Reference regularly and makes
recommendations to the Board for any
appropriate changes (the Committee’s
Terms of Reference can be found on
the Group’s website at www.carrsgroup.
com/corporate-governance/). The most
recent update to the Terms of Reference
was made following the October 2023
Committee meeting. The Committee
regularly reports to the Board on how it
discharges its responsibilities.
Details on specific work undertaken
during the year are set out below:
Review of key judgements and
estimates
An important responsibility of the
Committee is to review and agree
significant estimates and judgements
made by management. To satisfy this
responsibility, the Committee reviewed
detailed written reports from the Chief
Financial Officer and the external
auditor at its meetings, to review the
half-year and year end results. The
Committee carefully considered the
content of these reports in evaluating
the significant issues and areas of
judgement across the Group.
74
AUDIT COMMITTEE REPORT CONTINUED
Responsibilities of the Committee continued
Responsibilities of the Committee
Activities during the year
External audit
• Reviewing and monitoring
• Reviewed the audit strategy and plan.
the scope and effectiveness
of the external audit, taking
into consideration relevant
professional and regulatory
requirements.
• Considering the
independence and
objectivity of the external
auditor, and the Group’s
policy on the engagement of
the external auditor to supply
non-audit services.
Internal control and risk management
• Reviewing the effectiveness
of the Group’s internal
financial controls, and other
systems of internal control
and risk management.
• Agreed the terms of engagement and
remuneration of the external auditor.
• Reviewed the Group’s policy for non-audit
work and monitored the independence of the
external auditor.
• Discussed and agreed on external auditor
recommendations to improve year end
reporting and audit process following
difficulties experienced in the FY22 year-end
close process.
• Discussed with the external auditor those
issues requiring judgement and estimation,
including significant debate on the accounting
treatment related to the disposal of the
Agricultural Supplies division.
• Reviewed the Group’s internal controls and risk
management systems, as well as the Group
Risk Register.
• Discussed the risk from cyber attacks
and challenged adequacy of preventative
measures in place.
• Considered key areas of risk identified by
the external auditor, including management
override of controls and revenue recognition
on contracts in the Engineering division.
• Assessed progress made in addressing control
concerns raised by the external auditor during
FY22 in those subsidiaries affected.
• Considered and agreed re-prioritising of ERP
implementation to enable decoupling of
Agricultural Supplies IT systems.
Internal audit
• Reviewing the scope and
• Reviewed and challenged the work of the
effectiveness of the internal
audit function.
Whistle blowing and anti-bribery
• Review of the Group’s
whistleblowing and
anti-bribery policies and
arrangements.
Group’s internal auditor.
• Reviewed the internal audit work plan for the
year and the effectiveness of the internal audit
function.
• Agreed terms of reference and supplier
selection for outsourcing the internal audit
function in the coming year.
• Reviewed the Group’s whistleblowing policy.
• Reviewed the Group’s anti-bribery policy.
• Reviewed on behalf of the Board any
whistleblowing or similar reports together with
their resolution.
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75
measurement impairment. Details
of the prior year restatements are
contained in note 39 to the Accounts.
The Committee also agreed that a
correction to the expected proceeds
from the disposal was required, to
accurately reflect the final completion
accounts produced during the current
financial year.
Going concern and viability
statement
The Committee reviewed
management’s reports regarding the
going concern assumption and the
Viability Statement disclosures. Specific
focus was given to the assumptions
used in cash flow forecasts, given
historic forecasting accuracy, while
the sensitised scenario analyses and
analysis of financing headroom were
also scrutinised. The Committee also
reviewed reports from the external
auditor in relation to the appropriateness
of the period of viability considered
by management and the risks and
scenarios applied. Considering all
available information, including ongoing
inflationary pressures, divisional trading
sensitivities and challenging the
assumptions adopted by management,
the Committee was satisfied that the
going concern assumption remained
appropriate, and that disclosures in
the Annual Report in relation to going
concern and the Viability Statement
were appropriate.
TCFD Disclosures
The Committee reviewed the TCFD
disclosures and a report prepared
by the Group’s Environment and
Sustainability Manager which
considered the accuracy of reported
Scope 1 and Scope 2 emissions. The
Committee was satisfied with the
reasonableness of the disclosures and
acknowledged that, while the TCFD
disclosures were an improvement on
the prior year, further work to enhance
these is underway. The quality of these
disclosures will also benefit from the
significant activities that are ongoing in
this area.
The key areas of judgement in the
year were as follows:
• Revenue recognition in relation to
Engineering: ISA (UK) 240 presumes
a risk of revenue misstatement due
to improper recognition. The key risk
to revenue recognition is judged to
be in relation to the recognition of
revenue and profit on engineering
contracts, the completion or final
agreement of which extend beyond
the year end. To assess the risk to
the Group, the Committee reviewed
reports from management and the
external auditor on the application
of revenue recognition policies by
management to major contracts
not completed or finalised at the
year end. The Committee reviewed
whether the change in approach to
revenue recognition, related to the
identification of specific performance
obligations on Mechanical Stress
Improvement Projects (“MSIP”),
made during the prior year had been
consistently applied across all new
contracts won during the current
year. The issues which had been
raised in the prior year, including
the separation of performance
obligations and consideration on
enforceable rights to payment were
also considered by the Committee.
In relation to FY23, judgement
was made regarding variable
consideration on a single contract,
on which work was completed but
goods were not delivered. In light
of a financial settlement with this
customer, the Committee accepted
management’s recommendations to
recognise revenue to the value of that
settlement. No material adjustments
have been deemed necessary during
the FY23 year-end close process.
• Potential goodwill impairment:
The Committee challenged the
reasonableness of the future business
performance assumptions adopted
by management for those businesses
that had underperformed against
expectations in light of historical
performance and market trends.
The Committee also reviewed
the assumptions underlying the
discount rates used in the evaluation.
The Committee concurred with
management’s view that goodwill
of £1.7m held in Animax Limited
required impairment in full, together
with an impairment of £0.3m against
Animax’s other intangible assets,
and goodwill held in NW Total
Engineered Solutions Ltd required a
partial impairment of £1.8m but that
no further goodwill impairment was
required across the Group. Details of
the goodwill impairment review are
contained in note 12.
• Defined benefit pension scheme:
The Committee considered valuations
of the scheme’s investments, and
the key actuarial assumptions used
to value the scheme obligations. The
assumptions made were reviewed
against market data in conjunction
with independent actuarial specialists
to assess their appropriateness, and
the disclosures on the sensitivity of
the obligations to changes in such
assumptions were reviewed. The
Committee was satisfied that the
scheme’s assets were appropriately
valued, that the assumptions adopted
in relation to the scheme’s liabilities
were appropriate, and that disclosures
made in relation to the scheme were
appropriate.
• Disposal of the Agricultural Supplies
division: The Committee reviewed
the accounting treatment related
to the sale of the Agricultural
Supplies business and agreed with
management’s assessment that
the measurement to fair value less
costs to sell of this division was
misstated in the prior year financial
statements. Two specific errors were
identified. Firstly, the prior year loss
recognised had been calculated on
the difference between estimated
proceeds receivable and net assets of
the two businesses where the direct
shareholding was being sold. This has
been corrected to also include the
Group’s interest in the joint venture,
Bibby Agriculture Ltd, indirectly
held by the Company through
its ownership of Carr’s Billington
Agriculture (Sales) Ltd, together
with consolidation adjustments to
the assets and liabilities included in
the overall Group net assets being
disposed of. This adjustment totalled
£2.9m, of which £2.7m was included
in the results published for the
period to 4 March 2023, meaning a
restatement of H1 FY23 comparatives
will be required in the next interim
statement. Secondly, new information
was identified during the second half
of FY23 which requires a correction to
FY22 to reflect property rental terms
agreed with the Billington Group as
part of the sale negotiations. This
increased the loss on measurement
of fair value less costs to sell by £1.2m.
The combined impact of these is an
increase in the loss on measurement
to fair value less costs to sell of £4.1m,
£2.4m of which is attributable to the
Group, with the remainder being the
non-controlling interest’s share in the
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OverviewStrategic ReportCorporate GovernanceFinancial Statements 76
AUDIT COMMITTEE REPORT CONTINUED
External audit
The reappointment of Grant Thornton
as the Group’s external auditor was
recommended by the Board and
approved by shareholders at the
General Meeting held on 2 May 2023.
The Audit Committee assessed
the expertise and independence of
Grant Thornton during the year, as
well as consideration of the terms of
engagement and remuneration. Grant
Thornton’s audit partner is Michael
Frankish, and this is his second year in
that role.
The Committee reviewed Grant
Thornton’s detailed audit plan
presented by it in June 2023 as well as
an updated audit plan and progress
report presented in October 2023, with
the aim of a timelier audit completion
than in the prior year. The prolonged
prior year end process meant that no
formal assessment, by questionnaire,
of the effectiveness of the external
auditor was completed. Its performance
was assessed by the Committee, with
the decision made to recommend the
reappointment of Grant Thornton as
auditor for the financial year to
2 September 2023.
Fair, balanced and
understandable
The Committee, further to the Board’s
request, reviewed the Annual Report,
and provided advice to the Board in
relation to whether the Annual Report,
taken as a whole, is considered fair,
balanced, and understandable, and
provides the information necessary
for shareholders to assess the Group’s
position, performance, business model
and strategy. To make this assessment,
the Committee reviewed a report
prepared by the Chief Financial Officer
outlining key matters and circumstances
affecting the Group. The Committee
was satisfied that such matters were
adequately referenced or reflected
within the Annual Report.
Internal control and risk
management
During the year the Committee
monitored the effectiveness of the
Group’s internal control and risk
management systems. Specifically,
the Committee considered whether
concerns raised by the external auditor
during the FY22 year-end process had
been addressed and any issues raised
had been satisfactorily closed. The
Committee also reviewed the FY23
report prepared by the external auditor
to assess whether improvements in the
control environment had been made.
The Committee reported to the Board
that it was satisfied with the overall
effectiveness of the Group’s internal
control and risk management systems.
External auditor independence
The Committee regularly reviews
the objectivity and independence
of the external auditor. The external
auditor confirms compliance with its
own internal policies and procedures
designed to ensure that it complies
with UK regulatory and professional
standards, including ethical standards,
and to ensure that its objectivity is not
compromised.
The Committee also annually reviews
the Group’s non-audit services policy,
updating and approving the policy
where appropriate. The objective of the
policy is to ensure that the provision of
any such services does not impair, or
is not perceived to impair, the external
auditor’s independence or objectivity.
The policy imposes guidance on the
areas of work that the external auditor
may be asked to undertake and those
assignments where the external auditor
should not be involved. The policy can
be viewed on the Group’s website
www.carrsgroup-ir.com.
To ensure that the policy is effective,
and the level of non-audit fees is kept
under review, all non-audit services
must be approved by the Chief Financial
Officer and reported to the Committee.
Prior approval of the Committee is also
required before the external auditor is
engaged to provide non-audit services
costing over £25,000 in aggregate.
During the year, no non-audit services
were provided to the Group by Grant
Thornton.
The Committee considers Grant
Thornton to remain independent and
recommended to the Board that Grant
Thornton be reappointed as the Group’s
external auditor.
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77
Internal audit
Committee effectiveness
The effectiveness of the Committee was
considered as part of the Board’s internal
effectiveness evaluation described on
pages 58 to 60 (inclusive). Feedback
from the evaluation confirmed that
the Committee continues to operate
effectively and fulfil its responsibilities.
Stuart Lorimer will be available at the
forthcoming Annual General Meeting to
be held in February 2024 to respond to
any shareholder questions that might be
raised on the Committee’s activities.
Stuart Lorimer
Audit Committee Chair
20 December 2023
The Committee is responsible for
monitoring the performance and
effectiveness of the Group’s internal
audit activities.
At the beginning of the financial year,
the Committee was presented with
an internal audit plan, which had been
devised from assessments of the
Group’s operations and risk framework.
As a result of the concerns raised by the
external auditor and from internal control
reviews, this plan was amended to focus
on business-specific risks identified by
senior management. Financial reviews
were performed by the Head of Internal
Audit, as well as other senior members
of the Group finance team, to ensure
control concerns had been addressed
and to maintain consistency of reporting
processes.
On an annual basis, the Committee
also reviews and approves the Group’s
internal audit charter which describes
the role and mandate of the internal
audit function.
The Committee keeps the performance
and effectiveness of the internal audit
function under review, assessing the
capacity, experience and expertise
within the internal audit function against
the existing and emerging risks in
the Group. While the Committee was
satisfied that the internal audit function
operated effectively, it agrees with the
recommendation from management
that outsourcing internal audit services
will provide more comprehensive
coverage of identified risks. A provider
has been identified, and engaged, and
a plan of activities agreed with the
Committee. This plan will be regularly
reviewed to respond to any emerging
risks or challenges.
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OverviewStrategic ReportCorporate GovernanceFinancial Statements 78
REMUNERATION COMMITTEE REPORT
Ian Wood
Remuneration Committee Chair
REMUNERATION COMMITTEE MEMBERS*
Ian Wood (Chair)
Non-Executive Director
Shelagh Hancock
Non-Executive Director
Stuart Lorimer
Non-Executive Director
Gillian Watson
Non-Executive Director
Tim Jones
Non-Executive Director
*As at the date of this report
INTRODUCTION
The Committee’s report is presented in the following sections:
1. This Annual Statement, which highlights some of the key
considerations for the Committee during the year and forms part of
the Annual Report on Remuneration.
2. The Annual Report on Remuneration. The Report sets out how
the Directors’ Remuneration Policy was applied in FY23; provides
details of the remuneration received by Directors relating to the
financial year ended 2 September 2023; and outlines how the policy
will be applied during FY24. The Annual Report on Remuneration
will be subject to an advisory shareholder vote at the forthcoming
Annual General Meeting to take place in February 2024.
3. The Directors’ Remuneration Policy. The Directors’ Remuneration
Policy sets out the Policy for the Executive Directors, the Chair and
Non-Executive Directors. The Directors’ Remuneration Policy will be
put to shareholders at the forthcoming Annual General Meeting to
take place in February 2024. A copy of the policy can be found on
pages 93 to 101 (inclusive). Changes to the previous policy, which
was approved by shareholders at the Annual General Meeting on
12 January 2021, are summarised in the Notice of Annual General
Meeting.
Note: Certain figures contained in the Committee’s report have been rounded to the
nearest whole number or nearest decimal place. Therefore the sum of the numbers in a
row or column may not conform exactly to the total figure give for that row or column.
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79
1. ANNUAL STATEMENT
FROM THE CHAIR OF THE
REMUNERATION COMMITTEE
Performance and remuneration
in FY23
Performance outcomes are reflected in
the remuneration received by Executive
Directors, based on financial and non-
financial targets. The financial and non-
financial targets set by the Committee,
together with the resulting remuneration
payable to the Executive Directors,
are detailed in the Remuneration
Committee’s Report which follows.
As described in the Strategic Report,
adjusted profit before tax for the full
Group was £7.5m, 33.2% below the prior
year (2022: £11.2m). Adjusted earnings
per share decreased from 10.0p in 2022
to 6.2p.
Full year performance fell short of the
original budget set by the Board with
the result that no annual bonus relating
to financial targets was payable to the
Executive Directors. Notwithstanding
this financial performance, good
progress was made towards achieving
non-financial targets (see pages 84
and 85 for details) and in positioning
the business well for future growth.
Non-financial targets were achieved, in
part, during the year. It was determined
that an annual bonus would be payable
to David White (see pages 84 and 85).
It was agreed that no bonus relating
to FY23 non-financial targets would be
paid to Peter Page. Peter stood down
from the Board and left the Group on
17 November 2023. No bonus relating
to FY23 was payable to Neil Austin who
stood down from the Board and left the
Group on 21 February 2023.
The performance period of the 2020
Long Term Incentive Plan (“LTIP“)
awards ended at the end of FY22 but,
because average adjusted EPS growth
was below the threshold set by the
Committee upon granting the awards,
no long-term awards vested.
The Committee is satisfied that the
Remuneration Policy operated as
intended in the financial year ended 2
September 2023, and that remuneration
outcomes for Executive Directors
aligned with Group strategy and
shareholders’ interests.
Full details of the remuneration targets
set by the Committee, together with
performance against those targets and
the remuneration outcomes for FY23,
are contained within the Annual Report
on Remuneration which follows from
page 81.
Key matters considered in FY23
Remuneration Policy
During the year, the Committee
undertook a review of its existing
Directors’ Remuneration Policy. The
proposed policy, which will be put
to shareholders at the forthcoming
Annual General Meeting to take place in
February 2024, includes certain changes
designed to ensure that it remains
in line with corporate governance
best practice and ensures that the
Committee have sufficient flexibility to
align remuneration with strategy. The
Group’s current Policy was approved
at the Annual General Meeting which
took place on 12 January 2021, with the
support of 99.7% of proxy votes. The
current policy can be found on pages
67 to 73 (inclusive) of the 2022 Annual
Report and Accounts which is available
to view online at www.carrsgroup-ir.
com/content/financial/reports. Details
of the proposed policy can be found at
pages 93 to 101 (inclusive) of this report.
General Meeting on 2 May 2023
At the General Meeting which took
place on 2 May 2023, whilst the
resolution to approve the Group’s
Remuneration Report was approved
by the requisite majority, 23.3% of
shareholder votes were cast against.
The Remuneration Committee
Chair subsequently undertook an
engagement exercise with shareholders
to discuss this voting outcome. Our
eight largest shareholders, representing
just over 50% of the shares on our
shareholder register were contacted.
This dialogue was not limited to
discussion on the relevant vote, with
feedback also being invited on the
proposed Remuneration Policy which
is being put to shareholders at the
Annual General Meeting to take place
in February 2024.
The feedback received regarding the
forthcoming Remuneration Policy,
largely focused on shareholders
seeking confirmation that the proposed
Remuneration Policy fully aligned
Executive remuneration with the
agreed strategy of the Company. The
Committee has reflected on this, and
is confident that the proposals support
the strategy going forward, noting the
increased flexibility on performance
conditions under the new Policy. The
perspectives of our major shareholders
are valued and we welcome input
into the Committee’s deliberations.
We would like to thank shareholders
for engaging with us over this matter.
Review of performance measures
under the Long-Term Incentive
Plan (“LTIP“)
On 26 October 2022, the Group
completed the disposal of its interests
in the Agricultural Supplies division
following approval at a General Meeting
on 19 September 2022. The Board
considered the disposal to significantly
enhance the Group’s prospects and
ability to deliver the Group’s strategy of
achieving growth in shareholder value.
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OverviewStrategic ReportCorporate GovernanceFinancial Statements 80
REMUNERATION COMMITTEE REPORT CONTINUED
The Committee also consulted PwC, as
well as law firm Ashurst LLP in relation
to the remuneration arrangements for
Martin Rowland as he moved from a
Non-Executive Director to an Executive
Director. Details of the remuneration
arrangements for David White and
Martin Rowland can be found on the
pages which follow. In accordance with
the Committee Terms of Reference,
the Committee also considered the
remuneration arrangements for Gavin
Manson as CFO. As the role is not a
Board position, the details of the terms
of Gavin’s appointment are not included
in this report.
Remuneration in FY24
For FY24, the maximum annual bonus
for the Executive Directors will remain
100% of salary, with 25% of any amount
awarded being deferred for two years
in the form of shares. The weighting
between financial and non-financial
targets will be linked to the specific role
and duties of each Executive Director,
with performance targets under each
element also reflecting specific roles.
Further details can be found on pages
91 and 92. Inflationary salary increases
of 5% were awarded effective from
1 September 2023, which is consistent
with the broader UK workforce.
I hope that shareholders are able to
support the Remuneration Committee’s
Report and revised Remuneration Policy
at the forthcoming Annual General
Meeting of the Company.
Ian Wood
Remuneration Committee Chair
20 December 2023
Following the disposal, the
Remuneration Committee undertook
a review of the Group’s long-term
incentive arrangements for Executive
Directors, with support from advisers at
PricewaterhouseCoopers LLP to ensure
that these remain closely aligned with
Group strategy.
In prior years, long-term incentive
awards were made subject to a
single adjusted Earnings Per Share
performance measure. Following its
review, the Committee considered
that the introduction of a second
performance measure, based upon
Total Shareholder Return (“TSR”), would
more closely align long-term incentives
with shareholders’ interests and Group
strategy. The Committee proposed
to make 25% of long-term incentive
awards subject to stretching targets
based upon TSR (with the balance
remaining subject to growth in adjusted
EPS). Given the scale of the Group
and the nature of its operations, it was
considered appropriate to measure TSR
relative to the performance of the FTSE
Small Cap index (excluding investment
trusts), ensuring that performance
targets remain stretching.
The Remuneration Committee Chair
sought the views of certain major
shareholders and, following responses
from the shareholders consulted, the
Committee implemented the above
change in performance measures under
the LTIP for Executive Directors.
New LTIP and renewal of DBSP
During the financial year ended 2
September 2023, the Committee
approved a new long-term incentive
plan and renewal of the deferred bonus
share plan. As described on page 66 of
the 2022 Annual Report and Accounts
which is available to view online at www.
carrsgroup-ir.com/content/financial/
reports, the Committee reviewed the
Group’s discretionary share plans during
FY22. The Committee considered the
Carr’s Milling Industries Long-Term
Incentive Plan 2013 (“2013 LTIP”), noting
that awards under the 2013 LTIP could
be made for up to ten years from the
date of its approval, meaning that a
replacement plan was required to
enable long-term incentive awards to
continue to be made.
The Committee thought it to be
appropriate to replace the 2013 LTIP
with a scheme designed on similar
terms to those existing (updated where
required). The Committee also decided
to review and update the Carr’s Group
plc 2018 Deferred Bonus Share Plan
(“2018 DBSP”) at the same time and
seek shareholder approval in relation to
the two new updated plans. The plans
were approved at the Remuneration
Committee Meeting on 6 December
2022 and approved by shareholders
at the Annual General Meeting on
27 February 2023.
CEO arrangements FY22/FY23
As previously reported in the 2022
Annual Report and Accounts, Peter
Page had been acting as Executive
Chair from 11 October 2021 until the
appointment of a permanent CEO. In
August 2022, following an extensive
search by the Nomination Committee,
it was announced that Peter Page
would be appointed as the new CEO for
the Group. New permanent executive
remuneration arrangements were
considered by the Committee and
agreed with Peter Page details of which
can be found in the Company’s 2022
Annual Report and Accounts.
Board changes FY23/FY24
On 13 November 2023, changes to the
Board were announced. Peter Page
stepped down from the Board and
left the Group on 17 November 2023,
with David White who had been Chief
Financial Officer appointed CEO. Martin
Rowland, who was appointed to the
Board as Non-Executive Director in
March 2023, was appointed Executive
Director of Transformation with effect
from 13 November 2023. Gavin Manson
also joined the Group as Chief Financial
Officer, a non-Board position with effect
from 13 November 2023.
Details of Peter Page’s remuneration
on departure which was agreed by
the Committee can be found on
page 88. The Committee, having
consulted with external advisers
PricewaterhouseCoopers LLP (“PwC”)
agreed the remuneration arrangements
for David White as the new CEO, which
other than a change in salary, extension
of notice period and the introduction
of a car allowance, the terms of
David’s existing service contract
remain the same.
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81
2. ANNUAL REPORT ON
REMUNERATION
This part of the Directors’ Remuneration
Report outlines the key considerations
of the Committee during the year
and sets out a summary of how the
Directors’ Remuneration Policy was
applied for the financial year ended 2
September 2023.
REMUNERATION COMMITTEE
The role of the Committee
The primary role of the
Remuneration Committee is to make
recommendations to the Board on the
Group’s policy for Director remuneration.
The Committee also has delegated
responsibility for setting remuneration
for the Company’s Chair and Executive
Directors and senior management,
including the Company Secretary,
in accordance with the principles
and provisions of the UK Corporate
Governance Code (published July 2018)
(the “Code”).
Committee membership
During the financial year ended 2
September 2023, the Remuneration
Committee comprised four independent
Non-Executive Directors together with
Tim Jones, who joined the Committee
following the General Meeting of the
Company held on 2 May 2023. The
Committee members as at the date of
this report are detailed on page 70. John
Worby stood down from the Board on 31
October 2023, and Gillian Watson joined
the Board on 9 October 2023, also
becoming a member of the Committee.
The Executive Directors may attend
meetings of the Remuneration
Committee by invitation and in an
advisory capacity only. No person
attends any part of a meeting at
which his or her own remuneration is
discussed. The Chair and the Executive
Directors determine the remuneration of
the other Non-Executive Directors.
Meetings in the year
The Committee met on five scheduled
occasions during the financial year.
Details of attendance can be found
on page 55. Several unscheduled
Remuneration Committee meetings
were also held during the financial year
ended 2 September 2023 in relation to
Board changes.
Responsibilities and activities of the Committee
The key areas of activity over the financial year ended 2 September 2023 are shown below alongside the key responsibilities of the
Committee. In some instances, the activities noted spanned more than one financial year.
Key responsibilities of the Committee
Activities during the year
Determining the Directors’ Remuneration Policy to ensure that
it aligns with Group culture and strategy and market practice
and to ensure that the Group rewards fairly and responsibly.
• This year the Remuneration Committee has
undertaken a full review of the Remuneration Policy
considering developments in Group strategy and
emerging best practice, supported by advisers at
PricewaterhouseCoopers LLP. Further to its review, the
Committee has developed a new Directors’ Remuneration
Policy which will be put to shareholders at the forthcoming
Annual General Meeting to take place in February 2024.
Determining the broad policy on Executive remuneration, and
setting remuneration for the Chair, Executive Directors and
senior management.
• Reviewing levels of basic pay and remuneration structures
for Executive Directors, the Chair and senior management.
• Determining new terms of appointment and remuneration
arrangements for Peter Page as CEO.
• Determining remuneration arrangements for Tim Jones as
incoming Non-Executive Chair.
• Determining remuneration arrangements for David White
as incoming CFO.
• Determining remuneration arrangements for Martin
Rowland as incoming Non-Executive Director.
• Determining exit arrangements for Neil Austin as outgoing
CFO.
• Determining remuneration arrangements for Gillian Watson
as incoming Non-Executive Director.
• Determining exit arrangements for Peter Page as outgoing
CEO.
• Determining remuneration arrangements for David White
as incoming CEO.
• Determining remuneration arrangements for Martin
Rowland as Executive Director of Transformation.
• Determining remuneration arrangements for incoming
CFO, Gavin Manson as successor to an existing director.
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| Annual Report & Accounts 2023
OverviewStrategic ReportCorporate GovernanceFinancial Statements 82
REMUNERATION COMMITTEE REPORT CONTINUED
Key responsibilities of the Committee
Activities during the year
Determining targets and outcomes for performance-
related pay schemes of the Executive Directors and senior
management.
Reviewing the design of any share incentive plans for approval
by the Board and/or shareholders.
• Developing and agreeing performance-related targets
(both financial and non-financial) for Executive Directors
and oversight of targets and performance for senior
management in line with strategy. Determining outcomes
against previously agreed targets for Executive Directors
and senior management.
• Approving new and updated discretionary share plans for
the Group on 6 December 2022, as put to shareholders
and approved at the AGM on 27 February 2023.
• Reviewing LTIP performance measures for Executive
Directors.
• Reviewing the senior management incentive plan under
the LTIP*
Reviewing remuneration trends, employment conditions and
policies across the Group.
• Overseeing wider workforce remuneration in the context of
fairness and wider economic factors.
• Considering pay and benefits structures across the Group
(including gender pay gap reporting and CEO pay ratios).
Engaging with stakeholders on matters within its remit.
• Engaging with shareholders on:
Arranging for periodic reviews of its own performance
and its Terms of Reference to ensure it is operating at
maximum effectiveness.
− New Remuneration Policy
− LTIP performance measures
− 2022 Remuneration Report
• Considering outcomes from the Board’s review of the
Committee’s effectiveness.
• Review and update the Committee’s Terms of Reference –
published on the Group’s investor website
https://www.carrsgroup-ir.com/.
• Considering the Code and developing remuneration
trends, and their impacts on the activities of the Committee
and the Remuneration Policy.
* When reviewing the incentive structure for senior management, the Committee considers and ensures that any ESG risk is not raised by inadvertently motivating
irresponsible behaviour.
Further details of the responsibilities of the Committee can be found in the Remuneration Committee’s Terms of Reference located
at https://www.carrsgroup.com/corporate-governance/.
Further information on each of the above activities is set out on the pages which follow.
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| Annual Report & Accounts 2023
83
FY23 Remuneration (audited information)
In this section we summarise the pay packages awarded to our Executive Directors and Non-Executive Directors for performance
in FY23 versus FY22. The table below shows all remuneration that was earned by each individual during the year and includes a
single total remuneration figure for the year.
Salary/Fees
Benefits
Pension
Total fixed pay
Bonus
LTIP
Total variable pay
Total
remuneration
£’000
FY23
FY22
FY23
FY22
FY23
FY22
FY23
FY22
FY23
FY22
FY23
FY22
FY23
FY22
FY23
FY22
Executive Directors
Peter Page1
368*
297
David White2
142
–
Neil Austin3
136*
256
Non-Executive Directors4
Peter Page1
John Worby
Ian Wood
Shelagh
Hancock
Stuart
Lorimer
Tim Jones5
Martin
Rowland6
–
43
43
43
43
50
21
15
41
41
–
–
–
–
–
1
1
–
–
–
–
–
–
–
–
–
2
–
–
–
–
–
–
–
–
10
2
–
–
–
–
–
–
–
–
–
368
297
153
–
–
22
–
–
10
139
268
–
108
–
–
–
–
–
–
–
–
43
43
43
43
50
21
15
41
41
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
22
–
–
368
297
175
–
–
108
139
376
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
43
43
43
43
50
21
15
41
41
–
–
–
–
* Salary for FY23 includes cash in lieu of pension contribution.
1 Figures for FY22 reflect services as Non-Executive Chair until 11 October 2021 and services as Executive Chair under interim arrangements from 11 October 2021.
Figures for FY23 reflect services as Chief Executive Officer from 1 September 2023.
2 Figures for FY23 are reflective of eight months’ service in FY23. The value in the table above in relation to the FY23 bonus includes 25% deferred in line with the
Group’s Remuneration Policy.
3 Figures for FY23 are reflective of six months’ service in FY23. The value in the table above in relation to the FY22 bonus includes 25% deferred in line with the Group’s
Remuneration Policy.
4 Gillian Watson joined the Board on 9 October 2023 and is therefore not included in the table above.
5 Figures for FY23 are reflective of six months’ service in FY23.
6 Figures for FY23 are reflective of six months’ service in FY23.
Carr's Group plc
| Annual Report & Accounts 2023
OverviewStrategic ReportCorporate GovernanceFinancial Statements 84
REMUNERATION COMMITTEE REPORT CONTINUED
2023 Annual bonus pay-out
The annual bonus is calculated using a combination of financial and non-financial performance targets which are set with regard to
Group budget, historic performance, market outlook and future strategy.
Financial targets
80% of the bonus was based on Group adjusted profit before tax (“PBT”). Adjusted PBT is calculated as reported PBT after adding
back or deducting any one-off items outside of normal trading that were not anticipated at the time the performance targets were
set, such as acquisition-related costs. The Group is committed to disclosing its performance targets retrospectively, other than
where prevented due to commercial sensitivities. For the year ended 2 September 2023, the PBT targets were set in accordance
with the table below.
Measure
Adjusted PBT
Bonus (% of base salary)
Threshold
10,368
0
Target
10,913
40
Maximum
11,458
80
Payments are adjusted on a straight-line basis between the targets set out above, although the Committee determined that no
annual bonus would be payable in the event of performance below FY22 outturn adjusted PBT for the continuing Group (£11.2m).
For the year ended 2 September 2023, adjusted profit before tax for the Group was £7.5m. As this performance was below the
threshold target, no bonus was payable to the Executive Directors in connection with the Group’s financial targets.
Non-financial targets
Non-financial targets, which accounted for 20% of the bonus in the year, are assessed independently of financial performance.
Details of certain key non-financial targets set by the Committee together with the performance against those targets are provided
in the table below.
CFO targets FY23 (David White)
David White joined the Board as Chief Financial Officer from 21 February 2023. The following targets were set by the Committee
and performance measured against the targets set.
Performance
Measure
Target
Attainment
Commentary
Establish Task-
Force on Climate
Related Financial
Disclosures
(“TCFD”)
reporting
• Complete climate scenario
45%
analysis “in 2023” to be undertaken
with external expertise by
31 August 2023.
• Identify climate-related risks to be
included in Group Risk Register and
support action plans developed to
mitigate these.
• Establish methodology for
reporting Scope 3 emissions by
31 August 2023.
• Climate-related risks have
been reviewed, updated and
included in the Group risk
register. The associated action
plans are being developed
across the business.
Successfully
complete
CBAL transition
activities during
current financial
year
• Transfer and discontinue provision
90%
• Critical IT services, including
of IT services to Billington Group by
30 September 2023.
• Complete transfer of CBAL defined
benefit pension scheme information
and support by 31 August 2023.
• Transfer of all finance-related
activities including completion
accounts, taxation and statutory
reporting by 31 August 2023.
the separation of the previously
shared ERP system have been
handed over to the Billington
Group, while support on other
matters has been transferred,
subject to both businesses
providing support to each other
through the FY23 year-end
process.
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| Annual Report & Accounts 2023
85
Performance
Measure
Improve the
financial
accounting
environment
Target
Attainment
Commentary
• Deliver a clean audit in accordance
90%
with listed company reporting
requirements (at latest).
• Closure of FY22 audit findings and
control concerns raised by Grant
Thornton by 31 July 2023.
• Roll out updated accounting
manual throughout the Group by
31 July 2023.
• Assess effectiveness of financial
controls by 31 August 2023 and
create improvement plan by
31 October 2023.
• Annual Report and Accounts
will be published before the
end of December 2023, with
the Annual General Meeting
scheduled for early 2024.
• Many of the control concerns
raised in last year’s audit have
been closed, with a small
number remaining open
but being managed by the
businesses impacted.
Following the year-end, the Committee considered outcomes against the non-financial targets. The table on the previous page and
above summarises the Committee’s assessment of performance against the targets together with the resulting bonus assessed as
payable for David White as the only eligible Executive Director.
Overall, the Committee determined that it would award a bonus attributable to non-financial targets equal to 75% of the available
opportunity (being 15% of the total available bonus).
The total annual bonus payable to David White was therefore 15% of salary or £22,0001. In accordance with the Directors’
Remuneration Policy, 25% of the bonus payable will be deferred in the form of shares for two years.
As noted on the previous page, no bonus was payable in connection with the financial targets.
In addition to the financial and non-financial performance indicators, the Committee retains full discretion when assessing
performance outcomes to consider other factors, which may include environmental, social and governance considerations, in order
to avoid formulaic outcomes where these would not be appropriate. In relation to the bonus awarded to David White for FY23, no
discretions were applied. Other than the specific targets noted above, there were no other relevant ESG matters to be taken into
account by the Committee when determining performance outcomes.
CEO targets FY23 (Peter Page)
Due to the performance of the Group falling short of the original budget for FY23, no annual bonus was payable relating to financial
targets. It was agreed that Peter Page would not receive a bonus for FY23, therefore non-financial targets set for Peter Page as
CEO were not assessed. Peter Page stood down from the Board and left the Group on 17 November 2023.
CFO targets FY23 (Neil Austin)
In August 2022, former CFO Neil Austin indicated his intention to leave Carr’s Group to take up a new role. Neil Austin left the Group
on 21 February 2023. Accordingly, he was not eligible for a bonus in FY23.
1 Reflective of 8 months service in FY23.
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OverviewStrategic ReportCorporate GovernanceFinancial Statements 86
REMUNERATION COMMITTEE REPORT CONTINUED
Long Term Incentive Plan determinations
The awards made to Executive Directors in 2020 were subject to average annual adjusted EPS growth targets over the three-year
period ending on 2 September 2023 and from a base adjusted EPS of 11.9p. Details of the awards are in the table below:
Date of issue:
Participant:
23 November 2020
Base EPS (p):
Neil Austin*
Number of Ordinary Shares
subject to the award:
Assessment Criteria:
Target
Threshold
Maximum
3% average annual growth
10% average annual growth
11.9p
200,800
Vesting
25%
100%
An award will vest on a straight-line basis once the minimum threshold of 3% average annual
growth is achieved.
Calculation of award:
Year
2020
2021
2022
2023
Average:
Award:
EPS
11.9
13.2
13.7 (rebased to 10.0 – continuing
operations only)
Growth
+10.9%
+3.8%
6.4 (continuing operations only)
-36%
-5.9%
0
* Neil Austin stood down from the Board and left the Group on 21 February 2023. In relation to LTIP awards, the Committee decided to extend “good leaver” status to
Neil in recognition of his role in the completion of the sale of the Agricultural Supplies division during the performance periods of the LTIP awards and on the basis
that any preserved LTIP awards would be pro-rated to time served, and that the remaining amount of the LTIP preserved is linked to performance conditions of the
Company in the future (based an adjusted Earnings Per Share performance measure). In relation to the award granted in FY21, no award vested (see above). In relation
to the award granted in FY22, the performance conditions of the Company are yet to be tested but the award will be subject to a pro-rata adjustment to time served.
No LTIP award was granted to Neil in FY23.
The average EPS growth over the three-year period from the base adjusted EPS was below the threshold target and, accordingly,
none of the shares under the long-term awards made to Executive Directors in 2020 vested. No part of the vesting was linked to
share price appreciation and no discretion was applied by the Committee. The Committee always takes into consideration matters
impacting performance of shares in the Company which are not as a consequence of the operations of the Group (windfall gains)
however no circumstances existed in the three-year performance period ended 2 September 2023. Therefore no part of the
vesting was linked to share price appreciation and no discretion was applied by the Committee.
Total pension entitlements (audited)
The table below provides details of the Executive Directors’ pension benefits:
Executive Directors in post during FY23
Normal retirement age
Peter Page1
David White2
Neil Austin3
67
67
67
Total contributions to
DC-type pension plan
Cash in lieu of contributions to
DC-type pension plan
£’000
–
10
2
£’000
14
–
5
1 Peter Page stepped down from the Board and left the Group on 17 November 2023.
2 David White joined the Group on 3 January 2023 and became Chief Financial Officer on 21 February 2023.
3 Neil Austin stepped down from the Board and left the Group on 21 February 2023.
Each Executive Director has the right to participate in the Carr’s Group defined contribution pension plan or to elect to be paid
some or all of their contribution in cash. During the year, pension contributions and/or cash allowances in the year were 4% of
salary for existing Executive Directors. This reflects a change made from January 2021 to align with the majority of the Group’s
UK workforce.
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87
Long Term Incentive Plan awards granted during the year (audited)
Long-term awards were made to the Executive Directors during FY23 in line with the Directors’ Remuneration Policy as follows:
Number of shares
Basis on which the
award was made1
Face value of the award
End of
(£’000)
Threshold vesting
performance period
Peter Page
David White
438,347
182,573
150%2
100%3
530,400
220,000
25%
25%
August 2025
August 2025
1 Awarded 4 May 2023 using a share price of £1.21.
2 The Committee granted an LTIP award of 150% to Peter Page as incoming CEO. Awards exceeding 100% of base salary can be made only in exceptional circumstances.
The Committee considered that the disposal of the Agricultural Supplies division in October 2022, and the development of Group strategy to deliver growth in
shareholder value focusing on the Speciality Agriculture and Engineering divisions, were significant events creating exceptional circumstances and justifying an
increased level of share-based incentivisation for Peter Page on this occasion to align more closely with shareholder interests. Peter stepped down from the Board
and left the Group on 17 November 2023. In relation to LTIP awards, the Committee decided to extend “good leaver” status to Peter as part of the agreed terms of
his departure and on the basis that any preserved LTIP awards would be pro-rated to time served, and that the remaining amount of the LTIP preserved is linked to
performance conditions of the Company in the future (based an adjusted Earnings Per Share performance measure and Total Shareholder Return). Other than the award
in FY23, no LTIP awards have been granted to Peter. In relation to the award granted in FY23, the performance conditions of the Company are yet to be tested but the
award will be subject to a pro-rata adjustment to time served.
3 The Committee granted an LTIP award of 100% to David White as incoming CFO.
The Committee regularly reviews the performance measures it adopts in relation to incentivise long-term incentives. In prior years,
long-term incentive awards have been made subject to a single adjusted Earnings Per Share performance measure. In March 2023
the Committee undertook a review of the Group’s long-term incentive arrangements for Executive Directors, with support from
advisers at PricewaterhouseCoopers LLP to ensure that these remain closely aligned with Group strategy. Further details of the
review can be found on pages 79 and 80.
Following its review, and after consultation with certain major shareholders, the Committee considered that the introduction
of a second performance measure based upon Total Shareholder Return would more closely align long-term incentives with
shareholder interests and Group strategy. Vesting of the options is therefore subject to performance targets based upon the
Company’s adjusted Earnings Per Share (“EPS”) and Total Shareholder Return (“TSR”) over a three-year performance period
covering the financial years 2022/23, 2023/24 and 2024/25 (“Performance Period”) as follows:
Adjusted EPS (75% weighting)
Target
Vesting
TSR (25% weighting)
Target
Vesting
5% average annual growth in adjusted EPS
14% average annual growth in adjusted EPS
Threshold
Maximum
25%
100%
7% compound annual growth in TSR
16% compound annual growth in TSR
Threshold
Maximum
25%
100%
An award will vest on a straight-line basis once the Threshold target is achieved (25% vesting), up to achievement of the maximum
target (100% vesting). For performance exceeding the maximum target, award vesting will be 100%. The Committee retains overall
discretion when determining vesting based on the assessment of performance.
All-employee share plans
The Executive Directors are also eligible to participate in the UK all-employee plans. The Carr’s Group Sharesave Scheme 2016
is an HM Revenue & Customs approved scheme open to all staff permanently employed in a UK Group company at the eligibility
date. Options under the plan are granted at a 20% discount to market value. Executive Directors’ participation is included in the
option table later in this report.
Payments to past Directors (audited)
Neil Austin stood down from the Board on 21 February 2023. Payments made to Neil Austin during FY23 were:
Neil Austin
Salary
(£000)
131
Cash in lieu of
pension contribution
(£000)
5
Bonus
(£000)
108*
Total
(£000)
244**
* The bonus paid to Neil Austin during FY23 related to the prior year. The value in the table above includes 25% deferred in line with the Group’s Remuneration Policy.
** Payments do not include pension contributions nor benefits (see page 83 for details).
Carr's Group plc
| Annual Report & Accounts 2023
OverviewStrategic ReportCorporate GovernanceFinancial Statements 88
REMUNERATION COMMITTEE REPORT CONTINUED
Payments to past Directors (audited) continued
Peter Page stood down from the Board and left the Group on 17 November 2023.
Payments made to Peter Page during FY23 are detailed on page 83. No other payments to past Directors have been made during
FY23.
Payments made to Peter Page during FY24 are detailed in the table below:
Peter Page
Salary
(£000)
99*
Cash in lieu of
pension contribution
(£000)
3
Bonus
(£000)
–
Total
(£000)
103
* Figure includes unused holiday entitlement.
Payments for loss of office (audited)
No payments for loss of office have been made to Directors during the during the financial year ended 2 September 2023.
In relation to the Financial year ending 31 August 2024, Peter Page stood down from the Board and left the Group on 17 November
2023, receiving contractually entitled payments of £353,600 in lieu of notice and a sum of £18,004 as payment for loss of benefits
over his notice period. In relation to LTIP awards, the Committee decided to extend “good leaver” status to Peter as part of the
agreed terms of his departure and on the basis that any preserved LTIP awards would be pro-rated to time served, and that the
remaining amount of the LTIP preserved is linked to performance conditions of the Company in the future (based an adjusted
Earnings Per Share performance measure and Total Shareholder Return). Other than the award in FY23, no LTIP awards have been
granted to Peter. In relation to the award granted in FY23, the performance conditions of the Company are yet to be tested but the
award will be subject to a pro-rata adjustment to time served.
Directors’ interests in the shares of the Company (audited information)
A summary of interests in shares and scheme interests of the Directors (as at the date of this report) is given below. The Company
has a share dealing policy and a share dealing code. The requirements of such policy and code were met in respect of the shares
detailed below.
Total
number of
interests in
shares
27,000
0
148,206
50,000
0
4,000
0
SAYE
(unvested
without
performance
conditions)
Unvested
deferred
bonus
shares
% of salary
held in
shares1
Vested
LTIP
Unvested
LTIP
N/A
N/A
N/A
N/A
N/A
N/A
N/A
182,573
N/A
15,384
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
25.59%
N/A
N/A
N/A
N/A
N/A
N/A
Executive Directors2
David White
Martin Rowland3
Non-Executive Directors4
Tim Jones
Ian Wood
Shelagh Hancock
Stuart Lorimer
Gillian Watson5
1 Based upon salary as at 2 September 2023 and the average share price over the three months of the year ended 2 September 2023.
2 Neil Austin stood down from the Board on 21 February 2023. Peter Page stood down from the Board and left the Group on 17 November 2023.
3 Martin Rowland joined the Board on 6 March 2023 as a Non-Executive Director and became Executive Director of Transformation on 13 November 2023 and has
no interest in any Ordinary Shares in the capital of the Company. At the date of this report, Harwood Capital Management Limited (of whom Martin Rowland is a
representative), holds an interest in 13.82% of the Company’s share capital.
4 John Worby stood down from the Board on 31 October 2023.
5 Gillian Watson was appointed to the Board on 9 October 2023.
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| Annual Report & Accounts 2023
89
Performance shares (audited information)
The maximum number of outstanding shares that have been awarded to Directors under the LTIP are currently as follows:
Current Executive Directors (as at the date of this report)
FY21 award
FY22 award
David White
Martin Rowland
N/A
N/A
Former Executive Directors (prior three financial years)
Peter Page
Neil Austin
Tim Davies
Hugh Pelham
FY21 award
N/A
200,8002
N/A
N/A3
N/A
N/A
FY22 award
N/A
169,5502
N/A
N/A
FY23 award
182,573
N/A
FY23 award
438,3471
N/A
N/A
N/A
1 Peter Page stood down from the Board and left the Group on 17 November 2023. In relation to LTIP awards, the Committee decided to extend “good leaver” status to
Peter as part of the agreed terms of his departure and on the basis that any preserved LTIP awards would be pro-rated to time served, and that the remaining amount
of the LTIP preserved is linked to performance conditions of the Company in the future (based an adjusted Earnings Per Share performance measure and Total
Shareholder Return). Other than the award in FY23, no LTIP awards have been granted to Peter. In relation to the award granted in FY23, the performance conditions
of the Company are yet to be tested but the award will be subject to a pro-rata adjustment to time served.
2 Neil Austin stood down from the Board and left the Group on 21 February 2023. In relation to LTIP awards, the Committee decided to extend “good leaver” status to
Neil in recognition of his role in the completion of the sale of the Agricultural Supplies division during the performance periods of the LTIP awards and on the basis
that any preserved LTIP awards would be pro-rated to time served, and that the remaining amount of the LTIP preserved is linked to performance conditions of the
Company in the future (based an adjusted Earnings Per Share performance measure). In relation to the award granted in FY21, no award vested (see above). In relation
to the award granted in FY22, the performance conditions of the Company are yet to be tested but the award will be subject to a pro-rata adjustment to time served.
No LTIP award was granted to Neil in FY23.
3
It was determined that the award to Hugh Pelham made in FY21 would lapse without vesting upon him standing down from the Board on 11 October 2021.
Assessing pay and performance
The table below summarises the Chief Executive’s single remuneration figure over the past ten years, as well as how variable pay
plans have paid out in relation to the maximum opportunity.
FY14
Tim
Davies
FY15
Tim
Davies
FY16
Tim
Davies
FY17
Tim
Davies
FY18
Tim
Davies
FY19
Tim
Davies
FY20
Tim
Davies
FY21
Tim
Davies
FY21
Hugh
Pelham1
FY22
Hugh
Pelham2
FY22
Peter
Page3
FY23
Peter
Page4
559
911
531
308
861
764
508
259
244
210
312
368
100% 100%
55%
0% 100% 60.41%
15% 100%
0%
N/A
0%
0%
N/A
100% 37.45%
0% 100% 100% 51.64%
N/A
0%
N/A
0%
0%
Single figure of total
remuneration (£’000)
Annual variable element
(actual award versus
maximum opportunity)
Long-term incentive
(vesting versus maximum
opportunity)
1 Reflective of an eight-month period. In relation to FY21, it was determined that the award relating to 272,324 shares under the Long-Term Incentive Plan would lapse
without vesting upon Hugh Pelham standing down from the Board on 11 October 2021.
2 Reflective of remuneration to 11 October 2021, including £170,000 paid in lieu of notice. In relation to FY22, no award under the Long-Term Incentive Plan was made to
Hugh Pelham in the period to 11 October 2021.
3 Reflective of services as Non-Executive Chair until 11 October 2021 and services as Executive Chair under interim arrangements from 11 October 2021.
4 Reflective of services as Chief Executive Officer from 1 September 2022.
Ten-year historical TSR performance
Carr’s Group plc
FTSE All-Share Price Index
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Carr's Group plc
| Annual Report & Accounts 2023
OverviewStrategic ReportCorporate GovernanceFinancial Statements 90
REMUNERATION COMMITTEE REPORT CONTINUED
Change in Directors’ remuneration
The table below shows the percentage change in the Directors’ remuneration between FY22 and FY23 compared to the other
employees.
Current Directors (in post as at the date of this report)
Base pay/fees
Benefits
Annual bonus
David White1
Tim Jones2
Ian Wood3
Shelagh Hancock3
Stuart Lorimer3
Martin Rowland4
Former Directors
Peter Page5
Neil Austin6
John Worby7
Other UK employees
-14%
3%
4%
4%
4%
4%
4%
4%
4%
6%
0%
N/A
N/A
N/A
N/A
N/A
N/A
0%
N/A
0%
-100%
N/A
N/A
N/A
N/A
N/A
N/A
-100%
N/A
-9%
1 When compared to CFO pay FY22. David joined the Board on 21 February 2023 (figures are on an annualised basis).
2 When compared to Chair pay FY22. Tim Jones joined the Board on 21 February 2023 (figures are on an annualised basis).
3 When compared to NED pay FY22.
4 When compared to NED pay FY22. Martin Rowland joined the Board on 6 March 2023 (figures are on an annualised basis).
5 When compared to CEO pay FY22. Peter Page stood down from the Board on 17 November 2023.
6 When compared to CFO pay FY22. Neil Austin stood down from the Board on 21 February 2023 (figures are on an annualised basis).
7 When compared to NED pay FY22. John Worby stood down from the Board on 31 October 2023.
Other UK employees
The Remuneration Committee considers pay across the entire Group when setting Executive Director remuneration. Annual
consultations take place across the Group between the Executive Directors and senior management, including HR, in relation to
employee pay. The outcome of that exercise, and any changes to employee pay levels, are considered when determining the
appropriateness of any changes in Executive Director pay.
Chief Executive Officer pay ratio (unaudited)
The table below shows the pay ratio based on the total remuneration of the Chief Executive Officer to the 25th, 50th and 75th
percentile of all permanent UK employees of the Group.
CEO pay
25th percentile
Median
75th percentile
Total pay (£’000)
Pay ratio
2023
368
2022
3401
2023
23
16
2022
22
15
2023
32
11
2022
29
12
2023
43
9
2022
38
9
1 Annualised figure based upon Peter Page’s fees as Executive Director.
The Group adopted Option A as defined in The Companies (Miscellaneous Reporting) Regulations 2018, as the calculation
methodology for the above ratios. The 25th, median and 75th percentile pay ratios were calculated using the full-time equivalent
remuneration for all UK employees as at 2 September 2023.
Gender pay gap
The Group’s gender pay gap reporting information was as follows for the snapshot period ending 5th April 2023, being the most
recent data available. For information on the Group’s approach to equal opportunities and diversity, please see our Responsible
Business Report on page 25 and 27, the Corporate Governance Report on page 53 and the Nomination Committee Report on
pages 67 to 71 (inclusive).
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91
Difference between men and women
Mean
Median
Hourly pay
Bonus
2023
14%
22%
2022
25%
72%
2021
28%
73%
Proportion of people awarded a bonus
Male
Female
Percentage of men/women in each pay quartile
2023
17%
87%
2023
22%
30%
2022
22%
0%
2022
36%
41%
2021
25%
90%
2021
40%
36%
Lowest
2022
59%
41%
2023
67%
33%
2021
2023
54%
46%
72%
28%
Q2
2022
51%
49%
Q3
Highest
2021
2023
2022
2021
2023
2022
2021
63%
37%
83%
17%
84%
16%
83%
17%
82%
18%
84%
16%
84%
16%
Men
Women
Relative spend on pay
The table shows the relative importance of spend on pay compared to distributions to shareholders.
Employee costs* (excluding share-based payments)
Dividends paid to shareholders
* Continuing operations only.
External appointments
2023
£’000
37,777
4,889
2022
£’000
33,641
4,687
% change
12.3%
4.3%
The Executive Directors did not receive any remuneration from the Group in respect of any external appointments in FY23.
Implementation of the policy in FY24
Salaries/Fees
Inflationary increases of 5% were awarded effective 1 September 2023, which is consistent with the broader UK workforce.
Executive Director Salaries
With effect from 17 November 2023, David White became CEO. On 13 November 2023, Martin Rowland became Executive Director
of Transformation. Salaries per annum for each are:
David White (CEO): £306,000 plus £12,000 car allowance1
Martin Rowland (Executive Director of Transformation): £250,000 plus £12,000 car allowance2
For FY24 the maximum annual bonus for the Executive Directors will remain 100% of salary. 25% of any bonus will be deferred for
two years in the form of shares. Performance will be assessed against stretching targets. The weighting between financial and
non-financial targets will be linked to the specific role and duties of each Executive Director, with performance targets under each
element also reflecting specific roles.
60% of David White’s annual bonus will be based upon adjusted PBT for the Group only and will not have any divisional splits. The
remaining 40% of annual bonus will be linked to non-financial targets. All annual bonus targets will vest at 0%, and vesting for target
performance is 50% of maximum. Due to commercial sensitivity, targets will be disclosed retrospectively in next year’s report.
1 Subject to a pro-rata adjustment for the period as CEO from 17 November 2023. As CFO, David White’s salary was £231,000 per annum (subject to a pro-rata
adjustment for the period 1 September 2023 to 17 November 2023).
2 Subject to a pro-rata adjustment for the period as Executive Director of Transformation commencing 13 November 2023. As a Non-Executive Director, Martin
Rowland’s salary was £44,796 per annum (subject to a pro-rata adjustment for the period 1 September 2023 to 12 November 2023).
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REMUNERATION COMMITTEE REPORT CONTINUED
Implementation of the policy in FY24 continued
Martin Rowland’s annual bonus will be entirely based on financial metrics linked to executing the transformation strategy. Martin
Rowland has been appointed as the Executive Director of Transformation with specific goals spanning two financial years. The
intention is to evaluate performance across his full tenure and accordingly pay a bonus which reflects the period of working.
The bonus earned will not exceed 100% of the salary accrued over the 12 month fixed contractual term.
Long-Term Incentive Plan
The Committee intends to grant an LTIP award of 100% to David White as CEO. LTIP awards are made subject to stretching
performance targets and currently use (a) adjusted EPS (75% weighting) with threshold vesting (25% of awards) being achieved
where average growth in adjusted EPS is at least 5% over the performance period, and maximum vesting (100% of awards) being
achieved where average growth is at least 14%; and (b) TSR (25% weighting) with threshold vesting (25% of awards) being achieved
where compound growth in TSR is at least 7% over the performance period, and maximum vesting (100% of awards) being
achieved where compound growth is at least 16%.
Given Martin Rowland’s role is for a contractual term of 12 months commencing 13 November 2023, the Committee does not intend
to grant an LTIP to him during the year.
Non-Executive Director fees
Gillian Watson joined the Board on 9 October 2023 as a Non-Executive Director and Senior Independent Director and will be paid a
single fee of £44,796 per annum (gross).
Fees to Non-Executive Directors for FY24 will be as follows:
Position
Chair
Non-Executive Director (including Committee Chairs and the SID)
External advisers
Fees per annum (£)
99,750
44,796
During the year, external adviser PricewaterhouseCoopers LLP (“PwC”) was engaged to advise the Committee on remuneration
issues, most notably in connection with the Remuneration Policy, the preparation of the Directors’ Remuneration Report, reviewing
the senior management incentive plan and in connection with the review of the LTIP performance measures for Executive
Directors. PwC is a signatory to the Remuneration Consultants’ Code of Conduct, which requires that its advice be objective and
impartial. Total fees incurred for the services provided amounted to £47,000 (exclusive of VAT). PwC provides other services to
the Company, in relation to accounting services. The Committee is satisfied that no conflicts of interest exist in relation to advice
provided to the Committee. It is also satisfied that the members of PwC teams do not have connections with the Company which
might impair their independence.
Committee effectiveness
The effectiveness of the Committee was considered as part of the Board’s internal effectiveness evaluation described on pages 58
to 60 (inclusive). Feedback indicated that the structure of the Committee worked well and was in line with good practice, including
with respect to the number and roles of the independent Non-Executive Directors and that the procedure for developing policy on
Executive remuneration and determining Director and senior management remuneration was transparent.
By order of the Board
Ian Wood
Remuneration Committee Chair
20 December 2023
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3. REMUNERATION POLICY
Introduction
This part of the report sets out the Remuneration Policy for the Group and has been prepared in accordance with The Large and
Medium-Sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013 (as amended).
The current policy was approved by the shareholders at the AGM which took place on 12 January 2021, receiving a 99.7% proxy
vote in favour. This new policy builds upon the previous policy, with minor amendments made to ensure that the Committee
has sufficient flexibility to align remuneration with our evolving strategy. Furthermore, changes have been made to increase
transparency and align our approach to corporate governance best practice, such as greater clarity on our leaver provisions.
Further information on the changes is set out in the remuneration policy table on the pages which follow.
The new policy will be put to shareholders for consideration and approval at the forthcoming Annual General Meeting of the
Company to take place in February 2024.
Role of the Committee
The primary role of the Committee is to make recommendations to the Board of the Group’s policy for Executive Remuneration.
The Committee also has delegated responsibility for determining the remuneration and benefits of the Chair, Executive Directors
and senior management including the Company Secretary. Further details can be found on pages 81 and 82.
Overview of policy
When setting the policy for Directors’ remuneration, the Committee takes into account the overall business strategy, considering
the long-term interests of the Group, with the aim of incentivising the delivery of rewards to the Group’s shareholders, workforce
and broader stakeholders.
The Group’s policy is that the overall remuneration packages offered should be sufficiently competitive to attract, retain and
motivate high-quality executives and to align the rewards of the Executive Directors with the progress of the Group, whilst giving
consideration to salary levels in similar size quoted companies in similar industry sectors and views of shareholders.
The remuneration package is split into two parts:
• a non-performance element represented by basic salary, benefits and pension; and
• a performance-related element in the form of an annual bonus and a Long Term Incentive Plan.
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REMUNERATION COMMITTEE REPORT CONTINUED
Remuneration Policy table
Element
Purpose and link to strategy
Policy and approach
Maximum opportunity
EXECUTIVE DIRECTORS
Base salary
To attract and retain
the best talent.
Reflects an individual’s
experience,
performance and
responsibilities within
the Group.
Salary levels (and subsequent salary increases)
are set taking into consideration a number of
factors, including:
• level of skill, experience and scope of
responsibilities of individual;
• business performance, economic climate
and market conditions;
• increases elsewhere in the Group; and
• external comparator groups (used for
reference purposes only).
Salaries are normally reviewed annually, with
any increase effective 1 September each year.
Pension
Provides a competitive
and appropriate
pension package
that is aligned with
arrangements across
the Group.
Benefits
To aid retention and
remain competitive in
the marketplace.
Executive Directors are entitled to participate
in a defined contribution pension arrangement
or to receive a cash alternative to those
contributions.
Subject to as provided below, Company
contributions for all Executive Directors are at
a rate which does not exceed the contribution
rate available to the majority of the UK
workforce (currently 4%).
To the extent that pension contributions
exceed annual tax-free allowances, Executive
Directors will be entitled to receive payment
through ordinary payroll in lieu of pension
contributions.
Benefits provided include permanent health
insurance, private medical insurance and life
assurance. Relocation benefits may also be
provided in the case of recruitment of a new
Executive Director. The benefits provided may
be subject to minor amendment from time to
time by the Committee within this policy.
The Company may reimburse any reasonable
business-related expenses incurred in
connection with their role (including tax
thereon if these are determined to be taxable
benefits).
There is no formal
maximum; however,
increases will normally
not exceed the
general increase for
the broader employee
population of the
Group.
More significant
increases may be
awarded from time to
time to recognise, for
example, development
in role and change
in position or
responsibility.
Current salary levels
are disclosed in the
Annual Report on
Remuneration.
Up to a maximum rate
not exceeding that
available to the majority
of the UK workforce
(currently 4%).
Market rate
determines value.
There is no prescribed
maximum level but
the Remuneration
Committee monitors
the overall cost of
benefits to ensure that
it remains appropriate.
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Maximum opportunity
Maximum of 100% of
base salary.
The schemes are
subject to the limits set
by HMRC from time to
time.
Element
Purpose and link to strategy
Policy and approach
Bonus levels and appropriateness of
performance measures and weighting are
reviewed annually to ensure they continue
to support our strategy. Bonuses are capped
at 100% of base salary. At least 25% of any
bonus earned will be deferred into awards over
shares, with awards normally vesting after a
two-year period.
Performance is measured against stretching
targets. These may include financial and non-
financial measures, with at least half linked to
stretching financial metrics. Noting commercial
sensitivity, performance targets will typically
be disclosed retrospectively each year.
The threshold level of bonus vesting under
each measure is 0%, and vesting for target
performance is 50% of maximum.
The cash element of the bonus is usually paid
in November each year for performance in the
previous financial year.
Dividends will accrue on deferral awards over
the vesting period and be paid out either as
cash or as shares on vesting and in respect of
the number of shares that have vested.
An HMRC approved SAYE scheme is available
to eligible staff, including Executive Directors.
Annual bonus
Designed to reward
delivery of key
strategic priorities
during the year.
Save As You Earn (“SAYE”) To encourage
Long Term Incentive
Plan (“LTIP”)
employee involvement
and encourage greater
shareholder alignment.
To motivate and
incentivise delivery
of sustained
performance over
the longer term,
and to support and
encourage greater
shareholder alignment.
Annual awards of performance shares which
normally vest after three years subject to
performance conditions.
Maximum of 100% of
base salary for annual
awards.
Exceptional awards can
be made of up to 200%
of base salary.
Award levels and performance conditions
required for vesting are reviewed annually to
ensure they continue to support the Group’s
strategy. Annual awards are capped at the
equivalent of 100% of base salary at the date
of award.
In accordance with the rules of the LTIP,
which were approved by shareholders at the
AGM on 27 February 2023, in circumstances
considered by the Committee to be
exceptional, single awards in excess of 100% of
base salary can be made, up to a maximum of
200% of base salary at the date of the award.
Awards are currently based upon an EPS
growth measure and Total Shareholder Return
(“TSR”), although the Committee reserves the
right to amend performance measures where
considered appropriate in line with strategy.
25% vests at threshold performance. There is
straight-line vesting between threshold and
maximum.
A two-year post-vesting holding period applies
to the net of tax shares.
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REMUNERATION COMMITTEE REPORT CONTINUED
Element
Purpose and link to strategy
Policy and approach
Maximum opportunity
Shareholding guidelines
To provide alignment
with shareholder
interests.
Executive Directors are required to build up
a shareholding equivalent to 200% of base
salary over a five-year period.
Post-cessation
shareholding
To provide alignment
with shareholder
interests in the long
term.
Executive Directors are required to retain
all shares acquired on vesting under the
Company’s LTIP, up to a value equal to 200%
of their basic salary, for a period of two years
following the cessation of their employment
with the Company for any reason.
This requirement will apply to all shares which
vest after the Policy takes effect, regardless
of when awards were made under the
Company’s LTIP.
N/A
N/A
NON-EXECUTIVE DIRECTORS
Non-Executive
Director fees
To attract and retain
a high-calibre Chair
and Non-Executive
Directors by offering
market competitive fee
levels.
Remuneration reflects:
• the time commitment and responsibility of
their roles;
• consideration of increases made elsewhere
in the Group;
• market rate; and
Levels of fee are
reviewed annually
with any increases
normally aligning with
general increases for
the broader employee
population of the Group.
• that they do not participate in any bonus,
pension or share-based scheme.
Our policy is for the Executive Directors to
review the remuneration of Non-Executive
Directors annually following consultation
with the Chair. The Chair’s remuneration is
reviewed annually by the Remuneration
Committee.
Remuneration comprises a single base fee
for services to the Company. Non-Executive
Directors, other than the Chair, may receive
additional fees in relation to carrying out
additional duties such as acting as the Senior
Independent Director or chairing a Board
Committee.
The Chair and the Non-Executive Directors
are entitled to reimbursement of reasonable
expenses. They may also receive reasonable
travel or accommodation-related benefits in
connection with their role as a Director.
The Non-Executive Directors will not
participate in the Group’s share, bonus or
pension schemes.
Non-Executive Directors are engaged for
terms of one year, subject to appointment and
reappointment at the Company’s AGM.
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Remuneration Committee discretions
The Committee will operate the annual bonus plan and LTIP according to their respective rules. To ensure the efficient operation
and administration of these plans, the Committee retains discretion in relation to a number of areas. This is consistent with market
practice and these include (but are not limited to) the following:
• the participants;
• the timing of grant and/or payment;
• the size of grants and/or payments (within the limits set out in the Policy table);
• the determination of vesting based on the assessment of performance;
• the determination of a ‘good leaver’ and, where relevant, the extent of vesting in the case of the share-based plans;
• whether or not to make payment of a bonus to a leaver, taking into account all circumstances, and whether or to pro-rate such
an award;
• treatment in exceptional circumstances, such as a change of control;
• making the appropriate adjustments required in certain circumstances (e.g. rights issues, corporate restructuring events, variation
of capital and special dividends);
• cash settling awards; and
• the annual review of performance measures, weightings and setting targets for the discretionary incentive plans from year to year.
The Committee also retains the ability to adjust existing performance conditions for exceptional events so that the plans can still
fulfil their original purpose. Any varied performance condition would not be materially less difficult to satisfy in the circumstances.
Malus and clawback
In line with UK corporate governance best practice, a malus and clawback mechanism applies as follows:
• Annual bonus – cash awards: malus will apply up to the bonus payment and clawback will apply for a period of two years after
the bonus payment.
• Annual bonus – deferred share awards: clawback will apply during the period of two years following the payment of the cash
bonus to which the deferred share award relates.
• LTIP awards: malus will apply during the vesting period and clawback will apply for a period of two years post vesting.
The malus and clawback provisions may be applied in specific circumstances including in the event of a material misstatement
of the Group’s accounts and also for other defined reasons including material financial misstatement, reputational damage, gross
misconduct, fraud, error in the assessment of performance measures and corporate failure.
Performance measures and targets
Our Group strategy and business objectives are the primary consideration when we are selecting performance measures for
incentive plans. The annual bonus is based on performance against a stretching combination of financial and non-financial
measures. Adjusted profit before tax reflects the Group’s strategic objective to increase profit. In addition, Executive Directors are
assessed on strategic objectives as agreed by the Committee at the beginning of the year. The LTIP is assessed against growth
in adjusted earnings per share as it rewards improvement in the Group’s underlying financial performance and is a measure of
the Group’s overall financial success and is visible to shareholders; as well as total shareholder return (“TSR”) in order to focus
management on delivering shareholder returns, noting that a number of our shareholders prefer absolute TSR rather than relative
in order to increase visibility and ensure direct alignment with the shareholder experience.
Targets within incentive plans that are related to internal financial measures, such as profit, are typically determined based on the
Group’s budgets. The threshold and maximum levels of performance are set to reflect minimum acceptable levels at threshold
and very stretching, but achievable, levels at maximum. At the end of each performance period we review performance against
the targets, using judgement to account for items such as foreign exchange rate movements, changes in accounting treatment,
and significant one-off transactions. The application of judgement is important to ensure that final assessments of performance are
fair and appropriate. In addition, the Remuneration Committee reviews the bonus and incentive plan results before any payments
are made to Executive Directors or any shares vest and has full discretion to adjust the final payment or vesting downwards if they
believe the circumstances warrant it.
Approach to recruitment remuneration
The remuneration package for a new Executive Director would be set in accordance with the terms of the Group’s approved
remuneration policy in force at the time of appointment. When existing employees are promoted to the Board, the Policy will apply
from the point where they are appointed to the Board and not retrospectively. In addition, any existing awards will be honoured and
form part of ongoing remuneration arrangements.
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REMUNERATION COMMITTEE REPORT CONTINUED
Buy-out awards
In addition, the Committee may offer additional cash and/or share-based elements (on a one-time basis or ongoing) when it
considers these to be in the best interests of the Group (and therefore shareholders). Any such payments would be limited to a
reasonable estimate of value of remuneration lost when leaving the former employer and would reflect the delivery mechanism
(i.e. cash and/or share-based) time horizons and whether performance requirements are attached to that remuneration. For
avoidance of doubt, any buy-out awards are not subject to a formal maximum.
Maximum level of variable pay
The maximum initial level of long-term incentives which may be awarded to a new Executive Director will ordinarily be limited to
200% of base salary (i.e. 100% annual bonus plus 100% Long Term Incentive Plan). This can be increased to 300% in exceptional
circumstances (i.e. 100% annual bonus plus 200% Long Term Incentive Plan). These limits are in addition to the value of any buy-out
arrangements which are governed by the policy above.
In the case of an internal appointment, any variable pay element awarded in respect of the prior role would be allowed to pay
out according to its terms, adjusted as relevant to take into account the appointment. In addition, any other previously awarded
entitlements would continue, and be disclosed in the next Annual Report on Remuneration.
Base salary and relocation expenses
The Committee has the flexibility to set the salary of a new appointee at a discount to the market level initially, with a series of
planned increases implemented over the following few years to bring the salary to the appropriate market position, subject to
individual performance in the role.
For external and internal appointments, the Committee may agree that the Group will meet certain relocation expenses as
appropriate.
Appointment of Non-Executive Directors
For the appointment of a new Chair or Non Executive Director, the fee arrangement would be set in accordance with the approved
remuneration policy in force at that time.
Directors’ terms of employment
The Group’s current policy is not to enter into employment contracts with any element of notice period in excess of one year.
All Non-Executives are appointed for terms of 12 months and stand for re-election annually at the Company’s AGM. Copies of
Executive Directors’ service contracts and Non-Executive Directors’ letters of appointment are available for inspection at the
Company’s registered office during normal hours of business.
An Executive Director’s service contract may be terminated summarily without notice and without any further payment or
compensation, except for sums accrued up to the date of termination, if they are deemed to be guilty of gross misconduct or for
any other material breach of the obligations under their employment contract.
Policy on payment on loss of office
When determining any loss of office payment for a departing Executive Director, the Committee will always seek to minimise
the cost to the Group, while complying with contractual terms and seeking to reflect the circumstances in place at the time. The
Committee reserves the right to make additional payments where such payments are made in good faith in discharge of an
existing legal obligation (or by way of damages for breach of such an obligation) or by way of settlement or compromise of any
claim arising in connection with the termination of an Executive Director’s office or employment.
On termination of an Executive Director’s service contract, the Committee will take into account the departing Director’s duty to
mitigate their loss when determining the amount of compensation. When terminating an Executive Director’s contract, the Group
has the right to make a payment in lieu of notice. Any such payment will typically reflect the individual’s salary, benefits and
pension entitlements. The Group has the ability to mitigate costs and phase payments if alternative employment is obtained. The
Committee’s Policy is described below and will be implemented taking into account the contractual entitlements, the specific
circumstances for the departure and the interests of shareholders.
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Pay element
Good leaver
Other leaver
Base pay,
pension, benefits
Up to 12 months’ normally payable monthly and
subject to mitigation.
May be required to work during notice period.
Annual
bonus – cash
Annual bonus –
deferred into
shares
LTIP Awards
There will be no automatic entitlement to a
bonus if an Executive Director has ceased
employment or is under notice. The Committee
may, at its discretion, pay a bonus. This
would normally be prorated in respect of the
proportion of the financial year worked but in
circumstances it considers it appropriate, the
Committee may use discretion to not prorate.
Use of discretion will be explained in full to
shareholders. Such payment could be payable
in cash and not subject to deferral. Payment
would usually be made on the normal payment
date, although the Committee has discretion to
accelerate payment on a case-by-case basis in
its discretion, for example on change of control
of the Group or death of an Executive Director.
Unvested awards will usually vest in full upon
cessation, unless the Committee determines
otherwise.
Outstanding awards will vest at the original
vesting date to the extent that the performance
condition has been satisfied and reduced on
a pro rata basis to reflect the period of time
which has elapsed between the grant date
and the date on which the participant ceased
to be employed by the Group, unless the
Committee determines otherwise in its absolute
discretion. Holding periods will apply, unless the
Committee determines otherwise.
Up to 12 months’ normally payable, subject to
mitigation. The Committee has the discretion to
terminate contracts without notice and without
further compensation (except for sums earned
to the date of termination for certain events
such as gross misconduct).
Awards lapse on cessation of employment.
Unvested awards lapse on the termination date.
Awards lapse on termination date.
All-employee
share plans
Treatment of awards under any all-employee share plan including the SAYE plan would be in line
with HMRC rules.
Buy-out awards
Treatment of the buy-out award would be in line with the terms of the buy-out award agreed.
Definition of a good leaver
The Committee has ultimate discretion on whether an employee is considered to be a good leaver. In determining whether a
departing Executive Director should be treated as a ‘good leaver’, the Committee will take into account the performance of the
individual and Group over the whole period of employment and the reasons for the individual’s departure. If employment ceases
because of any of the following circumstances, the Executive Director would normally be treated as a ‘good leaver’:
• death;
• ill-health;
• injury;
• disability;
• redundancy; and
• retirement with the consent of the Committee.
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REMUNERATION COMMITTEE REPORT CONTINUED
In the event of: (i) a takeover of the Company; (ii) a scheme of arrangement (not being an internal corporate reorganisation);
(iii) a winding-up of the Company; or (iv) (at the discretion of the Committee) a demerger, Executive Directors are entitled to up
to 12 months’ base salary, pension and benefits. Unvested bonus and LTIP Awards shall vest immediately and on the same basis
as described above in the case of a ‘good leaver’. Alternatively, on the occurrence of a takeover or a scheme of arrangement, the
Committee may specify that bonus and/or LTIP Awards shall not vest on the occurrence of such event and instead participants
shall be required to ‘roll-over’ their awards into equivalent new awards over shares in a new holding company. Bonus and LTIP
Awards will be automatically ‘rolled-over’ on the occurrence of an internal reorganisation.
The Non-Executive Directors are not entitled to any compensation for loss of office.
Statement of consideration of shareholder views
The Committee engaged with shareholders during 2023 as part of the Remuneration Policy development process and welcomes
continued dialogue with the Company’s shareholders. Proposed changes to the policy were communicated to major shareholders
prior to its formation, and all feedback taken into consideration. Please see pages 79 and 80 for details of the consultation with
shareholders. Advice was also taken on best practice from appropriately qualified remuneration advisers PricewaterhouseCoopers
LLP. The views offered to the Committee have been taken into account in the policy.
Considerations of conditions elsewhere in the Group
In determining the remuneration of the Group’s Directors, the Committee takes into account the pay arrangements and terms and
conditions across the Group as a whole. The Committee seeks to ensure that the underlying principles which form the basis for
decisions on Directors’ pay are consistent with those on which pay decisions for the rest of the workforce are taken. For example,
the Committee takes into account the general salary increase for the broader employee population when conducting the salary
review for the Executive Directors.
However, there are some differences in the Executive Directors’ Remuneration Policy compared to the approach adopted for the
wider workforce, which the Committee believes are necessary to reflect the differing levels of seniority and scope of responsibility.
A greater weight is placed on performance-based pay through the quantum and participation levels in incentive schemes to
ensure the remuneration of the Executive Directors is aligned with the performance of the Group and the interests of shareholders.
Alignment with Provision 40 of the UK Corporate Governance Code
As part of its review of the Policy, the Committee has considered the factors set out in provision 40 of the Code. In the Committee’s
view, the Policy addresses those factors as set out below:
Provision 40
Clarity
Remuneration arrangements should be
transparent and promote effective engagement
with shareholders and the workforce and link to
strategy
How the Policy aligns
The Committee has clearly outlined the performance conditions relating
to the annual bonus and long-term incentive plans, which are linked to our
strategy and shareholder interests. We have set out the maximum potential
value of the elements of remuneration, and the areas in which discretion
can be applied throughout the Policy.
The Policy is in line with UK corporate governance best practice, and so
aims to be well understood by participants, shareholders and the wider
workforce.
Simplicity
Remuneration structures should avoid
complexity and their rationale and operation
should be easy to understand
The Policy is designed to be simple, easily understood and communicated.
The remuneration structure uses market-standard incentive structures. The
performance conditions for variable elements are clearly communicated to,
and understood by, participants, as well as being aligned with the Group’s
strategy.
Risk
Remuneration arrangements should ensure
reputational and other risks from excessive
rewards, and behavioural risks that can arise
from target-based incentive plans, are identified
and mitigated
A significant portion of the Executive Directors’ total remuneration
opportunity is weighted to the longer term, and delivered in shares via the
long-term incentive plan and the deferred bonus mechanism. Furthermore,
a shareholding requirement is in place (both in-employment and post-
cessation). These features ensure robust shareholder alignment and
discourage unnecessary risk taking.
The Committee retains discretion to override formulaic outcomes for
incentive plans. Malus and clawback provisions are in place, which mitigate
behavioural risks by enabling payments to be reduced or reclaimed in
specific circumstances. No Executive Director is present when their own
remuneration is under discussion.
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101
Provision 40
Predictability
The range of possible values of rewards to
individual directors and any other limits or
discretions should be identified and explained at
the time of approving the Policy
Proportionality
The link between individual awards, the delivery
of strategy and the long-term performance of
the company should be clear. Outcomes should
not reward poor performance
How the Policy aligns
The Policy sets out the maximum potential value for each element of
remuneration. Potential outcomes are easily quantifiable and are set out in
the scenario charts.
The Committee has set out to balance appropriately remuneration between
fixed and variable pay. The annual bonus and long-term incentive plan
are designed to reward the successful implementation of the Company’s
strategy and are aligned with long-term value creation for shareholders via
stretching targets linked to strong corporate performance and shareholder
return. The Committee will have discretion to override formulaic outcomes
to ensure that remuneration appropriately reflects overall performance.
Alignment to culture
Incentive schemes should drive behaviours
consistent with the company’s purpose, values
and strategy
The incentive plans are measured against key performance measures
aligned to our culture and strategy. The emphasis on shareholding is a core
part of our culture throughout the Group via our SAYE plan. The Committee
takes into account fairness and the wider workforce when determining
Executive Director remuneration outcomes.
FY23 Directors
Dates of service contracts and appointment to the Board for all Directors in post during FY23 are given below:
Executive Directors
Peter Page*
David White**
Neil Austin
Martin Rowland***
Non-Executive Directors
Tim Jones
John Worby
Ian Wood
Shelagh Hancock
Stuart Lorimer
Martin Rowland***
Gillian Watson
Peter Page*
Date of service
contract/letter of appointment/
renewal of appointment
Date of first appointment
to the Board
Date stood/standing down
4 August 2022
1 November 2019
17 November 2023
14 December 2022 (as
amended on 14 November
2023 (CEO appointment))
21 February 2023
1 January 2013
1 May 2013
21 February 2023
13 November 2023
6 March 2023
31 August 2023
21 February 2023
22 August 2023
22 August 2023
1 April 2015
31 October 2023
1 October 2015
22 August 2023
1 September 2022
22 August 2023
1 September 2022
22 August 2023
3 October 2023
20 September 2021
(as amended on
3 December 2021)
6 March 2023
12 November 2023
9 October 2023
1 November 2019
21 February 2023
* Reflecting Executive Chair appointment under interim arrangements from 11 October 2021 and appointment as CEO in August 2022 (CEO appointment taking effect on
the appointment of a Non-Executive Chair).
** Reflecting appointment as CFO and appointment as CEO.
*** Reflecting appointment as Non-Executive Director and as Executive Director of Transformation.
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REMUNERATION COMMITTEE REPORT CONTINUED
Estimates of total future potential remuneration from FY23 pay packages
The tables below provide estimates of the potential future remuneration of each Executive Director based on the remuneration
opportunity granted in FY23. Potential outcomes based on different scenarios are provided for each Executive Director.
The assumptions underlying each scenario are described below.
Fixed
Consists of base salary, pension and other benefits.
Save as otherwise stated, base salaries are as at 1 September 2023.
Benefits are valued using the figures in the total remuneration for the FY23 table, adjusted for any new
benefits or benefits that will not be provided during FY24.
Pensions are valued by applying the appropriate percentage to the base salary.
David White*
Martin Rowland**
Base
£’000
241
200
Benefits
£’000
Pension
£’000
11
11
10
8
Total
£’000
261
219
On target
Maximum
Maximum with
50% share price
appreciation
Based on what a Director would receive if performance was in line with plan, and the threshold level was
achieved under the LTIP.
Assumes that the full stretch target for the LTIP is achieved, and maximum performance is obtained
under both the financial and non-financial targets set for the annual bonus scheme.
Assumes maximum remuneration outcomes are achieved and a 50% increase in the value of share-
based remuneration.
* Chief Executive Officer from 17 November 2023. Reflecting the total remuneration in respect of the financial year comprising basic salary, pension and other benefits
for the period from 17 November 2023.
** Executive Director of Transformation commencing on 13 November 2023. Reflecting the total remuneration in respect of the financial year comprising basic salary,
pension and other benefits for the period commencing on 13 November 2023.
Remuneration estimates based upon outcomes
David White1
Total
Martin Rowland2
30%
28%
28%
14%
£862,298
47%
Maximum with share price appreciation
Maximum with share price appreciation
Total
53%
6%
£468,729
53%
£468,729
£343,729
£218,729
47%
64%
100%
36%
100
200
300
400
500
Maximum
On Target
Fixed
0
36%
32%
32%
59% 27%
14%
100%
£741,994
£441,234
£260,778
200
400
600
800
1000
Maximum
On Target
Fixed
0
1 Reflecting appointment as Chief Executive Officer from 17 November 2023.
2 Reflecting appointment as Executive Director of Transformation on 13 November 2023.
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| Annual Report & Accounts 2023
DIRECTORS’ REPORT
103
INTRODUCTION
The Directors present their report and the audited accounts for the Group for the financial year ended 2 September 2023. The
Corporate Governance Report, which can be found on pages 46 to 102 (inclusive), and details of the Board on pages 48 and 49 also
form part of this Directors’ Report.
Corporate Governance Statement
The Corporate Governance Statement, prepared in accordance with Rule 7.2 of the Financial Conduct Authority’s Disclosure
Guidance and Transparency Rules, comprises the following sections of the Annual Report: the ‘Strategic Report’; the ‘Corporate
Governance Report’; the ‘Audit Committee Report’; the ‘Nomination Committee Report’; the ‘Remuneration Committee Report’;
together with this Directors’ Report. As permitted by legislation, some of the matters required to be included in the Directors’
Report have been included in the Strategic Report by cross-reference, including details of the Group’s financial risk management
objectives and policies, business review, future prospects, stakeholder engagement, Section 172 Statement and environmental
policy. The 2018 UK Corporate Governance Code is available from the Financial Reporting Council’s website (www.frc.org.uk).
OPERATIONS AND PERFORMANCE
Activities and business overview
Carr’s Group plc is a public limited company incorporated in England and Wales and whose shares are listed and traded on
the London Stock Exchange’s Main Market. Its registered office is at Old Croft, Stanwix, Carlisle, CA3 9BA. Details of subsidiary
companies and joint ventures can be found at note 18 and note 19 of the Financial Statements and on page 197. The principal
activities and business overview of the Group are set out within the Strategic Report on pages 02 to 47 (inclusive).
Results and dividends
A review of the results can be found on pages 16 and 17.
The Group profit from continuing operations before taxation was £1.5m (2022 continuing operations: £7.6m). After taxation charge
of £1.1m (2022 continuing operations: £1.5m), the profit for the year from continuing operations is £0.4m (2022 continuing operations
restated: £6.0m).
Aggregate interim dividends
Final dividend per share proposed
2023
2.35p
2.85p
2022
2.35p
2.85p
Subject to approval at the forthcoming Annual General Meeting of the Company, the final dividend will be paid on 1 March 2024 to
members on the register at the close of business on 26 January 2024. Shares will become ex-dividend on 25 January 2024
Post balance sheet events
In December 2023, prior to the signing of the financial statements, the Group renewed its main banking facility with Clydesdale
Bank plc (trading as Virgin Money). Please see note 38 for details.
SHARES AND SHARE CAPITAL
Share capital
The Company has a single class of share capital which is divided into Ordinary Shares of £0.025 each. The movement in the share
capital during the year is detailed in note 30 to the financial statements.
At the Annual General Meeting held on 27 February 2023, the Directors received authority from the shareholders to:
• Allot shares – this gave Directors the authority to allot shares thus maintaining flexibility in respect of the Company’s financing
arrangements. The nominal value of Ordinary Shares which the Directors could allot in the period up to the next Annual General
Meeting to be held in February 2024, is limited to £775,677.63 which represented approximately 33% of the nominal value of the
issued share capital on 31 January 2023. The Directors do not have any present intention of exercising this authority other than in
connection with the issue of Ordinary Shares in respect of the Company’s share option plans. This authority will expire at the end
of the Annual General Meeting to be held in February 2024.
• Disapplication of rights of pre-emption – this disapplies rights of pre-emption on the allotment of shares by the Company and
the sale by the Company of treasury shares. The authority allows the Directors to allot equity securities for cash pursuant to the
authority to allot shares mentioned above, and to sell treasury shares for cash without a pre-emptive offer to existing shareholders:
– for general purposes, up to an aggregate nominal amount of £117,526.90, which represented approximately 5% of the
Company’s issued share capital on 31 January 2023; and
– in connection with acquisitions or other capital development, up to a further aggregate nominal amount of £117,526.90, which
represented approximately 5% of the Company’s issued share capital on 31 January 2023.
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DIRECTORS’ REPORT CONTINUED
This authority will expire at the end of the Annual General Meeting expected to be held in February 2024.
• Buy own shares – this authority allows the Company to buy its own shares in the market, as permitted under the Articles of
Association of the Company, up to a limit of 9,402,153 Ordinary Shares which represented approximately 10% of the Company’s
issued share capital on 31 January 2023. The price to be paid for any share could not be less than £0.025, being the nominal
value of a share, and could not exceed 105% of the average middle market quotations for the Ordinary Shares of the Company
as derived from the London Stock Exchange Daily Official List for the five business days immediately preceding the day on which
the Ordinary Shares were purchased.
The Directors have no immediate plans to exercise the powers of the Company to purchase its own shares and undertake that
the authority would only be exercised if the Directors were satisfied that a purchase would result in an increase in expected
earnings per share and was in the best interests of the Company at the time. The Directors would consider holding any of the
Company’s own shares that it purchased pursuant to this authority as treasury shares. This authority will expire at the end of the
Annual General Meeting to be held in February 2024.
Rights and obligations attaching to shares
In a general meeting of the Company, subject to the provisions of the Articles of Association and to any special rights or restrictions
as to voting attached to any class of shares in the Company (of which there are none), the holders of the Ordinary Shares are
entitled to one vote in a poll for every Ordinary Share held. No member shall be entitled to vote at any general meeting or class
meeting in respect of any shares held if any call or other sum then payable in respect of that share remains unpaid. Currently, all
issued shares are fully paid.
Full details of the deadlines for exercising voting rights in respect of the resolutions to be considered at the forthcoming Annual
General Meeting will be set out in the Notice of Annual General Meeting.
Subject to the provisions of the Companies Act 2006, the Company may, by ordinary resolution, declare a dividend to be paid to
the members, but no dividend shall exceed the amount recommended by the Board. The Board may pay interim dividends, and
also any fixed rate dividend, whenever the financial position of the Company, in the opinion of the Board, justifies their payment. All
dividends shall be apportioned and paid pro rata according to the amounts paid up on the shares.
Directors’ shareholdings
The interests of the Directors, as defined by the Companies Act 2006, in the Ordinary Shares of the Company, other than in respect
of options to acquire Ordinary Shares under the Company’s share option plans (which are detailed in the analysis of options
included in the Directors’ Remuneration Report on pages 78 to 102), are as follows:
Directors in office as at the date of this report
David White
Chief Executive Officer
Martin Rowland
Executive Director of Transformation
Tim Jones
Ian Wood
Chair
Non-Executive Director
Shelagh Hancock
Non-Executive Director
Stuart Lorimer
Non-Executive Director
Gillian Watson
Non-Executive Director
At 2 September 2023
Ordinary Shares
At 3 September 2022
Ordinary Shares
27,000
0
148,206
50,000
0
4,000
0
0
0
0
30,000
0
0
0
All the above interests are beneficial. There have been no other changes to the above interests in the period from 2 September
2023 to the date of this report. At the date of this report, Harwood Capital Management Limited (of whom Martin Rowland is a
representative), holds an interest in 13.82% of the Company’s share capital.
Directors in office at end of FY23
Peter Page
John Worby
Chief Executive Officer
Non-Executive Director
At 2 September 2023
Ordinary Shares
At 3 September 2022
Ordinary Shares
153,722
32,500
124,500
32,500
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| Annual Report & Accounts 2023
105
Major shareholders
The Company has been informed that the following interests in the 94,150,362 Ordinary Shares of the Company, as required by the
Companies Act 2006.
Latest available data prior to the date of this
Annual Report and Accounts
Latest available data prior to end of FY23
Shareholder
30-Nov-23
Mr Robert Heygate (UK)
13,025,120
Harwood Capital (London)
13,000,000
Fidelity Investments (Boston)
9,486,168
Jupiter Asset Mgt (London)
4,750,000
Interactive Investor
(Manchester)
Hargreaves Lansdown Asset
Mgt (Bristol)
Charles Stanley (London)
Wesleyan Assurance Society
(Birmingham (UK))
Artemis Investment Mgt
(London)
Mr Thomas W G Charlton
(Regional (England))
3,490,408
3,336,015
2,788,147
2,552,936
2,306,432
1,980,000
% Issued
Ordinary Share
Capital
13.84
13.82
10.08
5.05
3.71
3.55
2.96
2.71
2.45
2.10
Shareholder
31-Aug-23
Mr Robert Heygate (UK)
13,025,120
Harwood Capital (London)
9,900,000
Fidelity Investments (Boston)
9,410,847
Jupiter Asset Mgt (London)
4,750,000
Interactive Investor
(Manchester)
Hargreaves Lansdown Asset
Mgt (Bristol)
3,521,282
3,365,276
Gresham House (London)
2,983,000
Charles Stanley (London)
2,810,452
Wesleyan Assurance Society
(Birmingham (UK))
Artemis Investment Mgt
(London)
2,552,936
2,306,432
% Issued
Ordinary Share
Capital
13.83
10.52
10.00
5.05
3.74
3.57
3.17
2.99
2.71
2.45
TOTAL
56,715,226
60.28
TOTAL
54,625,345
58.02
CORPORATE GOVERNANCE
Annual General Meeting
The Annual General Meeting of the Company will be held in February 2024 at The Halston Hotel Carlisle, 20-34 Warwick Road,
Carlisle CA1 1AB.
Articles of Association
The powers of the Directors are conferred on them by UK legislation and the Articles of Association. Changes to the Articles must
be approved by shareholders passing a special resolution at a General Meeting.
Directors
Details of the Directors of the Company as at the date of this report are shown on pages 48 and 49, and details of Directors who
were in post during FY23 can be found on in the Nomination Committee Report on pages 67 to 71 (inclusive). Details relating to
Director re-election, Directors’ powers and Directors’ conflicts of interest can be found in the Corporate Governance Report on
page 54.
Directors’ and officers’ liability insurance
The Group maintains Directors’ and Officers’ liability insurance, which is reviewed annually.
Significant agreements
There are a number of significant agreements across the Group with provisions that take effect, alter or terminate upon a change of
control of the Company, such as bank facility agreements, agreements with strategic partners, employee share scheme rules and
certain project contracts within the Engineering division. The Directors are not aware of any agreements between the Company
and its Directors or employees that provide for compensation for loss of office or employment occurring solely because of a
change of control.
Political and charitable donations
During the year ended 2 September 2023 the Group contributed £50,496 (2022: £22,750) in the UK for charitable purposes. Further
details have been included within the Responsible Business Report on page 32. There were no political donations during the
financial year (2022: £nil). For details of work with local communities, please see page 32, and pages 62-66 (inclusive).
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OverviewStrategic ReportCorporate GovernanceFinancial Statements 106
DIRECTORS’ REPORT CONTINUED
ADDITIONAL INFORMATION
Employee share schemes
Awards under employee share schemes do not confer any shareholder rights, such as the right to vote the shares or to receive any
dividend, until a participant has received the shares after vesting or exercise (as applicable).
Employment policies and employees
The Company is committed to its employees and further details on the Company’s policies and commitment can be found in the
Responsible Business Report on pages 25 to 37 (inclusive).
Confidential reporting of concerns
The Group maintains various channels through which people can report concerns or suspicions of wrongdoing within the
workplace, including anonymous reporting via an independent whistleblowing service operated by SeeHearSpeakUp. The
Board regularly reviews the Group’s Whistleblowing Policy which is implemented by the Company Secretary as the Group’s
Whistleblowing Officer.
Pensions
Estimates of the amount and timing of future funding obligations for the Group’s pension plans are based on various assumptions
including, among other things, the actual and projected market performance of the pension plan assets, future long-term
corporate bond yields, longevity of members and statutory requirements. The Group continually reviews this risk and takes action
to mitigate where possible.
In addition, while the Group is consulted by the trustees on the investment strategies of the Group’s pension plans, the Group has
no direct control over these matters as the trustees are directly responsible for the strategy. Details of the Group’s pension plans
are in note 29 of the financial statements.
Environment
The Company’s report on sustainability and the environment, including its carbon footprint, and approach to GHG as well as climate
related risk and governance processes can be found on pages 33 to 44 (inclusive).
External auditor
A resolution to reappoint Grant Thornton UK LLP as external auditor will be proposed at the forthcoming Annual General Meeting of
the Company to be held in February 2024.
More information about the external audit can be found on pages 72 to 77 (inclusive) of the Audit Committee Report.
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| Annual Report & Accounts 2023
107
Other information incorporated by reference
Other information relevant to this Directors’ Report, and which is incorporated by reference, including:
Subject matter
Financial risk management
Principal Risks and Uncertainties
Corporate Governance Report
Audit Committee Report
Exposure to price risk, credit risk,
liquidity risk and cash flow risk
Notes to the Financial Statements (Derivatives and other financial
instruments) (note 28)
Going concern
Principal Accounting Policies
Page(s)
20 to 23
46 to 107
72 to 77
170 to 174
128 to 136
Notes to the Financial Statements (Post balance sheet events) (note 38)
190
Important events since the financial
year end
Likely future developments in the
business
Strategic Report
Research and development
Strategic Report
Employment of disabled persons
Responsible Business Report
Non-Financial & Sustainability Information Statement
Stakeholder engagement
Corporate Governance Report
s.172 Statement
SECR energy and carbon reporting
Responsible Business Report
Board diversity
Nomination Committee Report
Corporate Governance Report
The information required to be disclosed by Listing Rule 9.8.4R can be located as set out below:
Listing Rule 9.8.4R Information Required
Interest capitalised
Publication of unaudited financial information
N/A
Details of Long Term Incentive Schemes
Waiver of Director emoluments
Non-pre-emption issues of equity for cash
Parent participation in a placing by a listed subsidiary
(1)
(2)
(3)
(4)
(5-6)
(7-8)
(9)
(10)
(11)
Provision of services by a controlling shareholder
(12-13)
Dividend waivers
(14)
Agreements with a controlling shareholder
* For information on the disposal of the Agricultural Supplies division please see note 9 to the financial statements.
02 to 44
02 to 44
26 to 27
43
46 to 66
62 to 66
36 to 37
67 to 71
46 to 66
Page
N/A
N/A*
N/A
N/A
N/A
N/A
N/A
N/A
104
N/A
Significant contracts involving a Director or shareholder
188 to 189 (note 37)
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| Annual Report & Accounts 2023
OverviewStrategic ReportCorporate GovernanceFinancial Statements 108
DIRECTORS’ REPORT CONTINUED
DIRECTORS’ RESPONSIBILITIES STATEMENT
The Directors are responsible for preparing the Strategic Report, Directors’ 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. The Directors have elected to prepare
the financial statements in accordance with UK-adopted international accounting standards. 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 Company and Group 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 accounting estimates that are reasonable and prudent; and
• state whether applicable UK-adopted international accounting standards have been followed, subject to any material departures
disclosed and explained in the financial statements.
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 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 confirm that:
• so far as each Director is aware, there is no relevant audit information of which the Company’s auditor is unaware; and
• the Directors have taken all the steps that they ought to have taken as Directors in order to make themselves aware of any
relevant audit information and to establish that the Company’s auditor is aware of that information.
The Directors are responsible for preparing the Annual Report in accordance with applicable law and regulations. Having taken
advice from the Audit Committee, the Directors consider the Annual Report and the financial statements, taken as a whole,
provides the information necessary to assess the Company’s performance, business model and strategy and is fair, balanced and
understandable.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the
Company’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may
differ from legislation in other jurisdictions.
To the best of our knowledge:
• the Group financial statements, prepared in accordance with UK-adopted international accounting standards, give a true and
fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the
consolidation taken as a whole; and
• the Strategic Report and Directors’ Report include a fair review of the development and performance of the business and the
position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the
principal risks and uncertainties that they face.
By order of the Board
Justin Richards
Company Secretary
20 December 2023
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| Annual Report & Accounts 2023
INDEPENDENT AUDITOR’S REPORT
to the members of Carr’s Group plc
109
Opinion
Our opinion on the financial statements is unmodified
We have audited the financial statements of Carr’s Group plc (the "parent Company") and its subsidiaries (the "Group") for the
period from 4 September 2022 to 2 September 2023, which comprise the Consolidated Income Statement, Consolidated
Statement of Comprehensive Income, Consolidated and Company Balance Sheets, Consolidated Statement of Changes
in Equity, Company Statement of Changes in Equity, Consolidated and Company Statements 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 UK-adopted international accounting standards as applied in accordance with the provisions of the Companies
Act 2006.
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
2 September 2023 and of the Group’s loss for the period 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 UK-adopted international
accounting standards as applied in accordance with the provisions of the Companies Act 2006; and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
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 are 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 public
interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
We are responsible for concluding on the appropriateness of the Directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Group’s and the parent Company’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our report to the related disclosures in the financial statements or, if such
disclosures are inadequate, to modify the auditor’s opinion. Our conclusions are based on the audit evidence obtained up to the
date of our report. However, future events or conditions may cause the Group or the parent Company to cease to continue as a
going concern.
A description of our evaluation of management’s assessment of the ability to continue to adopt the going concern basis of
accounting, and the key observations arising with respect to that evaluation is included in the key audit matters section of
our report.
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.
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’s and the parent Company’s ability to continue as a going
concern for a period of at least 12 months from when the financial statements are authorised for issue.
In relation to the Group’s reporting on how it has applied the UK Corporate Governance Code, we have nothing material to add
or draw attention to in relation to the Directors’ statement in the financial statements about whether the Directors considered it
appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of
this report.
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OverviewStrategic ReportCorporate GovernanceFinancial Statements 110
INDEPENDENT AUDITOR’S REPORT CONTINUED
to the members of Carr’s Group plc
Our approach to the audit
Overview of our audit approach
Overall materiality:
Group: £739k, which represents 0.5% of the Group’s revenues from continuing operations.
Parent Company: £443k, which represents 0.5% of the parent Company’s net assets.
Key audit matters were identified as:
• Revenue recognition in components in the Engineering division where revenue is
recognised over time (long-term contracts) (same as previous period);
Materiality
Key audit
matters
• Carrying value of goodwill (same as previous period);
• Going concern (same as previous period); and
• Loss for the year from discontinued operations (new).
Scoping
Our auditor’s report for the period ended 3 September 2022 included one key audit matter
that has not been reported as a key audit matter in our current period’s report. This relates
to implementation of a new IT system and sufficiency of reconciliation procedures within
the component Carrs Billington Agriculture (Sales) Ltd; this entity is part of the discontinued
operations that were disposed of during the period, and thus the risk has been addressed
within this new key audit matter relating to loss for the year from discontinued operations.
The Group engagement team performed an audit of the parent Company financial
statements, full-scope audit procedures on the financial information of two components
and specified procedures on two components.
Component auditors performed full-scope audit procedures on the financial information of
two components and specified audit procedures on a further three components.
The Group engagement team performed analytical procedures on the financial information
of the remaining 17 components.
Key changes in the scope of the audit from the prior year is disposal of the Agricultural
Supplies division which removed seven components from the overall Group, two of which
the Group auditors performed full-scope audits on in the prior period.
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. These matters included those that 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.
In the graph on the next page, we have presented the key audit
matters and significant risks relevant to the audit. This is not a
complete list of all risks identified by our audit.
Description
Audit response
KAM
Disclosures
Key observations
/Our results
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High
Potential
financial
statement
impact
Carrying value
of goodwill
Revenue recognition in components in
the Engineering division where revenue is
recognised over time (Long term contracts)
Management
override of controls
Going
concern
Loss for the year
from discontinued
operations
Fraud in revenue
recognition
Pension surplus
Low
Low
Extent of management judgement
High
Key Audit Matter – Group
How our scope addressed the matter – Group
Key audit matter
Significant risk
Revenue recognition in components in
the Engineering division where revenue is
recognised over time (long-term contracts)
We identified revenue recognition in components
in the Engineering division (NW Total Engineered
Solutions Ltd., NuVision Engineering, Inc.,
Wälischmiller Engineering GmbH and Carr’s
Engineering Ltd – Bendalls) where revenue is
recognised over time (long-term contracts) as one
of the most significant assessed risks of material
misstatement due to fraud and error.
Such revenue totalled £29,050k in the period. We
pinpointed the significant risk to contracts which
exhibited certain qualitative and quantitative
risk criteria.
For a significant portion of contracts within the
Group’s Engineering division, revenue is recognised
based on stage of completion measured in
reference to either costs incurred as a proportion
of total costs ("input method") or delivery towards
complete satisfaction of performance obligations
with reference to certified or valued contract
works ("output method"). Measured stage of
completion is therefore based on either actual
costs incurred to date over estimated costs to
complete or on units delivered/produced against
performance obligations.
The estimation process is inherently complex and
significant management judgement is required.
In responding to the key audit matter, we performed the following audit
procedures:
• obtained an understanding of and evaluated the design and
implementation of relevant controls over the revenue cycle;
• assessed the revenue recognition accounting policy for compliance with
accounting standards, including appropriateness and disclosure within
the financial statements;
• obtained and inspected contract documents and challenged the
identification of performance obligations, contract clauses and assessing
whether the method of revenue recognition is in accordance with IFRS 15
‘Revenue from contracts with customers’;
• confirmed contract terms directly with customers for a sample of contracts;
• recalculated the revenue recognition on a sample of contracts based on
either percentage completion in relation to estimated costs to complete
or through progress towards satisfaction of performance obligations and
compared to amounts recorded by the Group;
• made inquiries of project managers to obtain an understanding of the
performance of the contract throughout the period and at period end;
• obtained and assessed management’s forecast estimated costs to
completion and challenged the Group’s estimates in respect of costs
to complete via agreement to third-party certifications, confirmations
and other external documentation, challenge of senior operational and
financial management, and with reference to our own expertise. We also
performed corroborative inquiries of the Group’s in-house legal counsel;
• sensitised the estimated costs to complete to determine how sensitive
management’s forecasts are to changes in inputs, by applying sensitivities
for inflation and labour cost increases;
• obtained post-period end updates from project managers to understand
subsequent performance of projects and assessed whether the updated
costs to complete forecasts indicate completeness of estimated costs to
complete at the period end;
• assessed the Group’s historical forecasting accuracy by comparing prior
estimated costs to complete to actual costs incurred and actual margin
achieved when the contracts were completed during the current period; and
• assessed the adequacy of disclosures of the key judgments and estimates
involved in long-term contract accounting.
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INDEPENDENT AUDITOR’S REPORT CONTINUED
to the members of Carr’s Group plc
Key Audit Matter – Group
How our scope addressed the matter – Group
Relevant disclosures in the Annual Report and
Accounts 2023
• Financial statements: Principal accounting
policies, Revenue recognition; and Note 3,
Revenue
• Audit Committee Report: Revenue recognition in
relation to Engineering as set out on page 75
Carrying value of goodwill
We identified the carrying value of goodwill as one
of the most significant assessed risks of material
misstatement due to error. We pinpointed the
significant risk to the carrying value of goodwill in
the following Cash Generating Units ("CGUs"), which
relate to the valuation and allocation assertion
(pre-impairment carrying value):
• NuVision Engineering, Inc. £8,654k;
Our results
Based on our audit work we did not identify any material misstatements
in revenue recognition in components in the Engineering division where
revenue is recognised over time (long-term contracts).
In responding to the key audit matter, we performed the following audit
procedures:
• obtained an understanding of and evaluated the design and
implementation of relevant controls relating to the impairment model;
• obtained management’s Board-approved assessment over carrying value
and value in use, understood and challenged sensitivities performed;
• assessed the mathematical accuracy of the impairment model and
methodology applied by management for consistency with the
requirements of IAS 36, including the associated sensitivities performed;
• Wälischmiller Engineering GmbH £4,009k;
• tested the accuracy of management’s forecasting through a comparison
• NW Total Engineered Solutions Ltd £6,234k; and
of current period budget to actual data;
• Animax £1,742k.
Under International Accounting Standard (IAS) 36
‘Impairment of Assets’, management are required
to perform an annual assessment of whether there
is any indication that an asset may be impaired and
to perform an annual assessment of whether the
Group's goodwill within a CGU is impaired.
The process for assessing whether impairment
of goodwill exists under IAS 36 is complex.
Management prepared an impairment model to
assess the value in use. Calculating value in use,
through forecasting cash flows relating to each
individual CGU, and the determination of CGUs,
appropriate discount rates and other assumptions
to be applied can be highly judgemental and
subject to management bias or error. The selection
of certain inputs into the cash flow forecasts
can also significantly impact the results of the
impairment assessment.
Relevant disclosures in the Annual Report and
Accounts 2023
• Financial statements: Principal accounting
policies, Goodwill; and Note 12, Goodwill and
other intangible assets
• Audit Committee Report: Potential goodwill
impairment as set out on page 75
• assessed the appropriateness of management’s assumptions and
sensitivities relating to the calculations of the value in use of CGUs and
estimated future cash flows, including growth rates and discount rates
used to assess the level of headroom;
• used our internal valuation specialists to inform our challenge of
management, that the assumptions used within the calculation of
weighted average cost of capital are reasonable; and
• assessed the accuracy and sufficiency of financial statements disclosures
with respect to the carrying value of Group goodwill.
Our results
Our audit testing and challenge of management resulted in revision of their
forecasts and the following impairment charges recognised:
• NW Total Engineered Solutions Ltd £1,824k.
• Animax £2,019k: (£1,742k recorded against goodwill and £277k against
other intangibles).
Based on our audit work, we are satisfied that the assumptions used in
management’s revised impairment model were appropriate and we did not
identify any material misstatements in the carrying value of goodwill. We
consider the disclosures with respect to the carrying value of the Group’s
goodwill to be in accordance with IAS 36.
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Key Audit Matter – Group
How our scope addressed the matter – Group
Going concern
We identified going concern as one of the most
significant assessed risks of material misstatement
due to fraud and error as a result of the judgement
required to conclude whether there is a material
uncertainty related to going concern.
In our evaluation, we considered the inherent
risks associated with the Group’s business model
including the effects arising from macro-economic
uncertainties such as the unprecedented increases
in energy prices, interest rates and inflation.
The Group will be impacted going forward and
these unprecedented levels of uncertainty could
adversely impact the future trading performance
of the Group, leading to increased judgement in
respect of the forward-looking assessment.
In undertaking their assessment of going concern
for the Group, management considered the impact
of increasing energy costs, interest rates and
inflation in their forecast future performance of the
Group, compliance with covenants and anticipated
cash flows.
As a result, there is significant judgement applied
in developing forecasted revenue and profits for
the Group.
Relevant disclosures in the Annual Report and
Accounts 2023
• Financial statements: Principal accounting
policies, Going concern
• Audit Committee Report: Going concern and
viability statement as set out on page 75
In responding to the key audit matter, we performed the following audit
procedures:
• obtained an understanding of relevant controls relating to the assessment
of the going concern model;
• assessed the reasonableness of the inputs and assumptions used in the
model;
• obtained and assessed management’s paper and assessment of going
concern, including forecasts covering the period up to December 2024
and tested the mathematical accuracy of the forecasts, as approved by
the Board;
• tested the accuracy of management’s forecasting through a comparison
of budget to actual data;
• assessed the forecasts prepared to ensure consistency with other areas of
the audit such as forecasts used in management’s impairment review of
goodwill;
• used industry data and other external information such as forecasted
interest rates to challenge the reasonableness of management’s
assumptions regarding future costs and revenue, built into the forecast
cashflow;
• corroborated the existence of the Group’s loan facilities and relevant
covenant requirements to loan agreements for the period covered by
management’s forecasts;
• assessed scenario sensitivities and reverse stress tests performed by
management, and determined if they are plausible;
• performed our own scenario sensitivities over and above the sensitivities
of management and considered the available headroom and compliance
with covenants;
• tested the adequacy of the supporting evidence for cash flow forecasts,
and considered the headroom available to the Group;
• assessed the appropriateness of assumptions regarding mitigating actions
to reduce costs or manage cashflows in downside scenarios; and
• assessed the adequacy of related disclosures within the annual report.
Our results
We have nothing to report in addition to that stated in the "Conclusions
relating to going concern" section of our report.
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INDEPENDENT AUDITOR’S REPORT CONTINUED
to the members of Carr’s Group plc
Key Audit Matter – Group
How our scope addressed the matter – Group
Loss for the year from discontinued operations
We identified the Loss for the year from
discontinued operations as one of the most
significant assessed risks of material misstatement
due to error.
The disposal of the Agricultural Supplies division
on 26 October 2022 was a significant transaction
for the Group, giving rise to a net profit on disposal
after disposal costs of £3k (with trading results for
the period of £1,160k loss). In order to calculate
the profit on disposal, the net assets at the date of
disposal have been determined, which included
the consideration of judgments and estimates
in respect of key areas such as provisions and
pensions. We therefore identified the profit on sale
of discontinued operations as a significant risk,
specifically in relation to cut off. This represents a
significant risk because the disposal is material and
unusual in nature.
Relevant disclosures in the Annual Report and
Accounts 2023
• Financial statements: Principal accounting
policies, Goodwill; and Note 9, Discontinued
operations and non-current assets held for sale
• Audit Committee Report: Disposal of the
Agricultural Supplies division as set out
on page 75
In responding to the key audit matter, we performed the following audit
procedures:
• obtained an understanding of the procedures adopted by management to
ensure appropriate cut-off in preparing the balance sheet at the disposal
date for the calculation of the gain on disposal;
• performed procedures over the two months' trading activity and closing
balances;
• assessed whether there should be any significant changes in key
assumptions and estimates at the date of disposal, compared to those as
at 3 September 2022, in recognising revenue and judgements in respect of
provisions for liabilities;
• reperformed the calculation of the gain on disposal to gain assurance over
the arithmetical accuracy;
• confirmed the key terms and conditions to the disposal and associated
agreements, and considered how these are reflected by management in
accordance with accounting standards;
• tested the value of consideration recorded on the disposal by confirming
cash received to bank utilising open banking;
• confirmed the net assets disposed of, including goodwill, are correctly
removed and any provisions required on disposal are correctly accounted
for;
• tested the accuracy and completeness of the prior period errors
by reperforming the calculations, agreeing the terms of the rental
agreements to signed agreements, and obtaining direct confirmation from
the purchaser of the final position;
• tested disposal costs on a sample basis to supporting documentation; and
• assessed whether disclosures made in the financial statements relating to
the gain on sale of discontinued operations are appropriate.
Our results
We have concluded that the gain of £3k recognised from discontinued
operations is appropriate and that the disclosures made is in accordance
with IFRS 5.
We did not identify any key audit matters relating to the audit of the financial statements of the parent Company only.
Our application of materiality
We apply the concept of materiality both in planning and performing the audit, and in evaluating the effect of identified
misstatements on the audit and of uncorrected misstatements, if any, on the financial statements and in forming the opinion in the
auditor’s report.
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Materiality was determined as follows:
Materiality measure
Group
Parent Company
Materiality for
financial statements
as a whole
We define materiality as the magnitude of misstatement in the financial statements that, individually or in
the aggregate, could reasonably be expected to influence the economic decisions of the users of these
financial statements. We use materiality in determining the nature, timing and extent of our audit work.
Materiality threshold
£739k, which represents 0.5% of the Group’s revenues
from continuing operations.
£443k, which is 0.5% of the parent Company’s
net assets.
Significant judgements
made by auditor in
determining materiality
In determining materiality, we made the following
significant judgements:
In determining materiality, we made the following
significant judgement:
Net assets is considered the most appropriate
benchmark for the parent Company because the
principal activity is that of a holding company that
does not trade.
Materiality for the current year is lower than the
level that we determined for the period ended 3
September 2022.
Revenue is determined to be the most appropriate
benchmark due to its importance in both external
financial reporting and internal management reporting.
The Group engagement team compared
the determined amount against the range of
materialities that would have been calculated had
different benchmarks (adjusted operating profit
and adjusted PBT) been used, recognising that a
number of measures are relevant to the users of the
financial statements.
Materiality for the current year is lower than the level
that we determined for the period ended 3 September
2022 to reflect the reduced size of the Group following
the disposal of the Agricultural Supplies division.
Performance
materiality used to
drive the extent of our
testing
Performance
materiality threshold
Significant judgements
made by auditor
in determining
performance
materiality
We set performance materiality at an amount less than materiality for the financial statements as a whole
to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected
misstatements exceeds materiality for the financial statements as a whole.
£480k, which is 65% of financial statement materiality.
£288k, which is 65% of financial statement
materiality.
In determining performance materiality, we made the
following significant judgements:
In determining performance materiality we
considered:
• our performance materiality remained at the same
percentage level as determined in the previous
period as we considered:
• the number and magnitude of unadjusted
misstatements to the parent Company’s
financial statements in prior period;
– the number and magnitude of unadjusted
misstatements to the Group’s financial statements
in prior period;
– the nature and impact of significant control
deficiencies identified in the prior period;
• the nature and impact of significant control
deficiencies identified in the prior period; and
• our risk assessment procedures did not identify
any significant changes in business objectives
and strategy of the parent.
• our risk assessment procedures did not identify
any significant changes in business objectives and
strategy of the Group.
Specific materiality We determine specific materiality for one or more particular classes of transactions, account balances or
disclosures for which misstatements of lesser amounts than materiality for the financial statements as a
whole could reasonably be expected to influence the economic decisions of users taken on the basis of
the financial statements.
Specific materiality We determined a lower level of specific materiality for
the following areas:
We determined a lower level of specific
materiality for the following areas:
• related party transactions; and
• related party transactions; and
• Directors’ remuneration.
• Directors’ remuneration.
We determine a threshold for reporting unadjusted differences to the Audit Committee.
Communication of
misstatements to the
Audit Committee
Threshold for
communication
£37k and misstatements below that threshold that, in
our view, warrant reporting on qualitative grounds.
£22k and misstatements below that threshold
that, in our view, warrant reporting on qualitative
grounds.
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OverviewStrategic ReportCorporate GovernanceFinancial Statements 116
INDEPENDENT AUDITOR’S REPORT CONTINUED
to the members of Carr’s Group plc
The graph below illustrates how performance materiality interacts with our overall materiality and the tolerance for potential
uncorrected misstatements.
Overall materiality – Group
Overall materiality – Parent Company
Continuing revenues
£143,214k
PM
£480k,
65%
FSM
£739k,
0.5%
Net assets
£87,158k
PM
£288k,
65%
FSM
£443k,
0.5%
TFPUM
£259k, 35%
TFPUM
£155k, 35%
FSM: Financial statements materiality, PM: Performance materiality, TFPUM: Tolerance for potential uncorrected misstatements
An overview of the scope of our audit
We performed a risk-based audit that requires an understanding of the Group’s and the parent Company’s business and in
particular matters related to:
Understanding the Group, its components, and their environments, including Group-wide controls
• our Group audit was scoped by obtaining an understanding of the Group and its environment, including Group-wide controls,
and assessing the risks of material misstatement at the Group level;
• the Group engagement team noted that due to the historical acquisitive nature of the Group, there are many components,
spread primarily across the UK, USA and Germany, with different finance teams and control processes in place;
• the Group underwent a disposal of the Agricultural Supplies division during the year, leading to a significantly smaller Group, with
existing components now contributing larger percentages of the key benchmarks we consider; revenue, profit before tax and net
assets; and
• in establishing the overall approach to the Group audit, we determined the type of work that needed to be performed on the
components by us, as the Group engagement team, or component auditors which included other engagement teams within
Grant Thornton UK LLP and engagement teams from member firms of the Grant Thornton International network.
Identifying significant components
The Group's components vary in size and nature of operations. The Group engagement team identified certain components as
significant based on a variety of both qualitative and quantitative factors. The quantitative factors used in determining significance
were based on a combination of the Group's continuing revenues, total assets and Group profit before taxation. The qualitative
factors used in determining significance were whether any components were likely to include significant risks of material
misstatement due to their specific nature or circumstances.
Type of work to be performed on financial information of parent and other components (including how it addressed the
key audit matters)
For those components which were scoped as significant, full-scope audit procedures were performed based on
component materiality.
Significant components identified were Carrs Agriculture Ltd, Animal Feed Supplement, Inc., Wälischmiller Engineering GmbH,
NuVision Engineering, Inc., and the parent Company. Significant components Wälischmiller Engineering GmbH and NuVision
Engineering, Inc. were audited by component auditors based on instructions issued by the Group engagement team. The parent
Company, Carrs Agriculture Ltd and Animal Feed Supplement, Inc. were audited by the Group engagement team.
Furthermore, there were five components which were not deemed to be significant, on which specified procedures
were performed either by the Group engagement team (for two such components) or by component auditors (for three
such components).
For the remaining 17 components, analytical procedures were performed by the Group engagement team at Group level
commensurate with their significance to the Group’s results and financial position.
Where components within the Engineering division were not scoped as significant, we performed target procedures particularly
over revenue from contracts to address the key audit matter 'Revenue recognition in components in the Engineering division where
revenue is recognised over time (long-term contracts)' included above.
Key changes in the scope of the audit from the prior year is the disposal of the Agricultural Supplies division which removed 7
components from the overall Group, two of which the Group auditors performed full-scope audits on in the prior period. We also
performed procedures on the loss from discontinued operations, further detail is set out in the key audit matter above.
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Performance of our audit
In order to gain sufficient appropriate audit evidence to address the risks described above, an audit of financial information
was carried out at each individually significant reporting component: audits for Group reporting purposes were carried out at
five significant components located in the following countries: United Kingdom (two components), USA (two components) and
Germany (one component). In addition, specified audit procedures for Group reporting purposes were performed at a further
five components.
The components within the scope of our work accounted for the percentages illustrated below.
Audit approach
Full-scope audit
Specified audit procedures
Analytical procedures
No. of components
% coverage total
assets
% coverage
continuing revenue
% coverage profit
before tax
5*
5**
17
61%
13%
26%
63%
22%
15%
92%
0%
8%
* Of components where full-scope audits were performed, two were performed by component auditors, the remaining three were performed by the
Group audit team.
** Of components where specified audit procedures were performed, three were performed by component auditors, two were performed by the Group
audit team.
Communications with component auditors
Where the work was performed by component auditors, we determined the level of involvement we needed to have in the audit
work at those components to be able to conclude whether sufficient appropriate audit evidence had been obtained as a basis
for our opinion on the Group financial statements as a whole. This involved issuing instructions to component auditors and having
regular communication throughout the audit.
During the planning stages of the Group audit, the Group engagement team sent detailed instructions to the component auditors
that detailed the scope of the work, component materiality and planned audit approach on significant risk areas. The Group
engagement team also held planning meetings with component auditors to discuss these instructions and provide direction to the
component auditor.
During the fieldwork stage, the Group engagement team was in communication with the component auditors and performed
detailed reviews of a selection of working papers that cover the significant risks at Group level as well as working papers to ensure
that the Group engagement team have sufficient appropriate audit evidence to support the Group opinion.
During the completion stage, the Group engagement team was in communication with the component auditors to enquire of any
subsequent events.
Changes in approach from previous period
Following the disposal of the Agricultural Supplies division, the following components, Carrs Billington Agriculture (Sales) Ltd
and Carrs Billington Agriculture (Operations) Ltd have been removed from the full-scope audit owing to them no longer being
components of the Group.
Other information
The other information comprises the information included in the Annual Report, other than the financial statements and our
auditor’s report thereon. The Directors are responsible for the other information contained within the Annual Report. 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 audit or otherwise appears to be materially misstated. If we identify
such material inconsistencies or apparent material misstatements, we are required to determine whether there is 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.
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INDEPENDENT AUDITOR’S REPORT CONTINUED
to the members of Carr’s Group plc
Our opinions on other matters prescribed by the Companies Act 2006 are unmodified
In our opinion, the part of the Directors’ remuneration report to be audited has been properly prepared in accordance with the
Companies Act 2006.
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 those reports have been prepared in accordance with applicable
legal requirements;
• the information about internal control and risk management systems in relation to financial reporting processes and about
share capital structures, given in compliance with rules 7.2.5 and 7.2.6 in the Disclosure Rules and Transparency Rules
sourcebook made by the Financial Conduct Authority (the FCA Rules), is consistent with the financial statements and has
been prepared in accordance with applicable legal requirements; and
• the information about the Company’s Corporate Governance Code and practices and about its administrative, management
and supervisory bodies and their committees complies with rules 7.2.2, 7.2.3 and 7.2.7 of the FCA Rules.
Matter on which we are required to report under the Companies Act 2006
In the light of the knowledge and understanding of the Group and the parent Company and their environment obtained in the
course of the audit, we have not identified material misstatements in:
• the Strategic Report or the Directors’ Report; or
• the information about internal control and risk management systems in relation to financial reporting processes and about share
capital structures, given in compliance with rules 7.2.5 and 7.2.6 of the FCA Rules.
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 and the part of the Directors’ remuneration report to be audited 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; or
• a corporate governance statement has not been prepared by the parent Company.
Corporate Governance Statement
We have reviewed the Directors’ statement in relation to going concern, longer-term viability and that part of the Corporate
Governance Statement relating to the Group’s compliance with the provisions of the UK Corporate Governance Code specified for
our review by the Listing Rules.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial statements or our knowledge obtained during the audit:
• the Directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any material
uncertainties identified set out on page 24;
• the Directors’ explanation as to their assessment of the Group’s prospects, the period this assessment covers and why the period
is appropriate as set out on page 24;
• the Directors' statement on whether they have a reasonable expectation that the Group will be able to continue in operation and
meet its liabilities set out on page 24;
• the Directors’ statement on fair, balanced and understandable set out on page 108;
• the Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on page 20;
• the section of the Annual Report that describes the review of the effectiveness of risk management and internal control systems
set out on pages 60 and 61; and
• the section describing the work of the Audit Committee set out on page 73.
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| Annual Report and Accounts 2023
119
Responsibilities of Directors
As explained more fully in the Directors’ Responsibilities Statement set out on page 108, 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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. 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 applicable to the parent Company and the Group and
the industry in which they operate. We determined that the most significant laws and regulations are: UK-adopted international
accounting standards, the UK Corporate Governance Code and tax legislation in the jurisdictions in which the Group operates,
including the application of local and overseas sales taxes;
• We enquired of management, the finance team, legal counsel and the Board of Directors about the Group and parent
Company’s policies and procedures relating to:
– the identification, evaluation and compliance with laws and regulations;
– the detection and response to the risks of fraud; and
– the establishment of internal controls to mitigate risks related to fraud or non-compliance with laws and regulations.
• We inquired of management, the finance team, legal counsel and the Board whether they were aware of any instances of
non-compliance with laws and regulations or whether they had any knowledge of actual, suspected or alleged fraud. We
corroborated our inquiries through our review of Board minutes and papers provided to the Audit Committee;
• We assessed the susceptibility of the parent Company’s and Group’s financial statements to material misstatement, including
how fraud might occur. Audit procedures performed by the Group engagement team included:
– assessing the design and implementation of controls management has in place to prevent and detect fraud;
– obtaining an understanding of how those charged with governance considered and addressed the potential for override of
controls or other inappropriate influence over the financial reporting process;
– challenging assumptions and judgements made by management in significant accounting estimates;
– identifying and testing journal entries, in particular any journals with unusual characteristics, and increasing our testing in areas
of higher risk as identified during our audit;
– engaging with our internal tax specialists to address the risk of non-compliance with taxation legislation;
– designing audit procedures to incorporate unpredictability around the nature, timing or extent of our testing; performing
additional procedures over information provided by the entity during the course of our audit; and
– assessing the extent of compliance with the relevant laws and regulations as part of our procedures on the related financial
statement item.
• These audit procedures were designed to provide reasonable assurance that the financial statements were free from fraud or
error. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from
error, and detecting irregularities that result from fraud is inherently more difficult than detecting those that result from error,
as fraud may involve collusion, deliberate concealment, forgery or intentional misrepresentations. Also, the further removed
non-compliance with laws and regulations is from events and transactions reflected in the financial statements, the less likely we
would become aware of it;
• The engagement partner’s assessment of the appropriateness of the collective competence and capabilities of the Group
engagement team included consideration of the Group engagement team’s knowledge of the industry in which the Group
operates, and the understanding of, and practical experience with, audit engagements of a similar nature and complexity
through appropriate training and participation;
• We communicated relevant laws and regulations and potential fraud risks to all engagement team members, including internal
specialists, and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit;
Carr's Group plc
| Annual Report and Accounts 2023
OverviewStrategic ReportCorporate GovernanceFinancial Statements 120
INDEPENDENT AUDITOR’S REPORT CONTINUED
to the members of Carr’s Group plc
• In assessing the potential risks of material misstatement, we obtained an understanding of:
– the parent Company’s and Group’s operations, including the nature of its revenue sources, products and services and of
its objectives and strategies to understand the classes of transactions, account balances, expected financial statement
disclosures and business risks that may result in risks of material misstatement;
– the applicable statutory provisions;
– the rules and interpretative guidance issued by the Financial Conduct Authority;
– the parent Company’s and Group’s control environment, including the policies and procedures implemented to comply with
the requirements of its regulator, including the adequacy of the training to inform staff of the relevant legislation, rules and
other regulations of the regulator, the adequacy of procedures for authorisation of transactions, internal review procedures
over the entity's compliance with regulatory requirements, the authority of, and resources available to the compliance officer
and procedures to ensure that possible breaches of requirements are appropriately investigated and reported; and
• For components at which audit procedures were performed, we requested component auditors to report to us instances of non-
compliance with laws and regulations that gave rise to risk of material misstatement of the Group financial statements. No such
matters were identified by the component auditors.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s
website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Other matters which we are required to address
We were appointed by the Audit Committee on 27 February 2023 to audit the financial statements for the period from 4 September
2022 to 2 September 2023. Our total uninterrupted period of engagement is two years, covering the periods ended 3 September
2022 and 2 September 2023.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Group or the parent Company and we
remain independent of the Group and the parent Company in conducting our audit.
Our audit opinion is consistent with the additional report to the Audit Committee.
Use of our report
This report is made solely to the 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 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 Company and the Company’s members as a body, for our audit work, for this report, or for
the opinions we have formed.
Michael Frankish
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
Manchester
20 December 2023
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121
CONSOLIDATED INCOME STATEMENT
For the year ended 2 September 2023
Continuing operations
Revenue
Cost of sales
Gross profit
Other operating income
Distribution costs
Administrative expenses
Share of post-tax results of joint ventures
Adjusted1 operating profit
Adjusting items
Operating profit
Finance income
Finance costs
Adjusted1 profit before taxation
Adjusting items
Profit before taxation
Taxation
Adjusted1 profit for the year from continuing operations
Adjusting items
Profit for the year from continuing operations
Discontinued operations
Loss for the year from discontinued operations (including held for sale)
Loss for the year
(Loss)/profit attributable to:
Equity shareholders
Non-controlling interests3
Earnings per ordinary share (pence)
Basic
Profit from continuing operations
Loss from discontinued operations
Diluted
Profit from continuing operations
Loss from discontinued operations
Notes
2,3
2
5
2,4
7
7
2
5
2
8
5
9
11
11
11
11
11
11
2023
£’000
143,214
(110,924)
32,290
–
(7,507)
(24,273)
1,441
7,950
(5,999)
1,951
876
(1,320)
7,506
(5,999)
1,507
(1,111)
5,836
(5,440)
396
(1,157)
(761)
(226)
(535)
(761)
0.4
(0.7)
(0.3)
0.4
(0.7)
(0.3)
2022
(restated)2
£’000
124,240
(94,632)
29,608
1,731
(5,338)
(18,609)
840
11,906
(3,674)
8,232
351
(1,017)
11,240
(3,674)
7,566
(1,524)
9,374
(3,332)
6,042
(6,335)
(293)
2,710
(3,003)
(293)
6.4
(3.5)
2.9
6.4
(3.5)
2.9
1 Adjusted results are consistent with how business performance is measured internally and is presented to aid comparability of performance. Adjusting
items are disclosed in note 5. An alternative performance measures glossary can be found on pages 194 to 195.
2 See note 39 for an explanation of the prior year restatements in relation to the loss recognised on the measurement to fair value less costs to sell in
respect of discontinued operations.
3 Non-controlling interests relate to businesses included in the disposal group.
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122
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 2 September 2023
Loss for the year
Other comprehensive (expense)/income
Items that may be reclassified subsequently to profit or loss:
2023
£’000
(761)
2022
(restated)2
£’000
(293)
Foreign exchange translation (losses)/gains arising on translation of overseas subsidiaries
(3,141)
4,288
Net investment hedges
Taxation charge on net investment hedges
Items that will not be reclassified subsequently to profit or loss:
Actuarial losses on retirement benefit asset:
– Group
– Share of associate (included within disposal group)
Taxation credit on actuarial losses on retirement benefit asset:
– Group
20
– Share of associate (included within disposal group)
Other comprehensive (expense)/income for the year, net of tax
Total comprehensive (expense)/income for the year
Total comprehensive (expense)/income attributable to:
Equity shareholders
Non-controlling interests1
Total comprehensive (expense)/income attributable to:
Continuing operations
Discontinued operations
29
(2,058)
–
–
60
(11)
(717)
515
179
(5,222)
(5,983)
(5,448)
(535)
(5,983)
(4,288)
(1,695)
(5,983)
(2,576)
(287)
644
72
2,190
1,897
4,900
(3,003)
1,897
8,447
(6,550)
1,897
1 Non-controlling interests relate to businesses included in the disposal group.
2 See note 39 for an explanation of the prior year restatements in relation to the loss recognised on the measurement to fair value less costs to sell in
respect of discontinued operations.
Carr's Group plc
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Financial Statements
123
CONSOLIDATED AND COMPANY BALANCE SHEETS
As at 2 September 2023
(Company Number 00098221)
Assets
Non-current assets
Goodwill
Other intangible assets
Property, plant and equipment
Right-of-use assets
Investment property
Investment in subsidiary undertakings
Interest in joint ventures
Other investments
Contract assets
Financial assets
– Non-current receivables
Retirement benefit asset
Deferred tax asset
Current assets
Inventories
Contract assets
Trade and other receivables
Current tax assets
Financial assets
– Cash and cash equivalents
Assets included in disposal group classified as held for sale
Total assets
Group
Company
Notes
2023
£’000
2022
(restated)1
£’000
2023
£’000
2022
£’000
12
12
13
14
15
16,19
16,18
16
22
23
29
20
21
22
23
24
25
9
19,161
3,318
29,950
7,323
2,640
–
6,101
27
–
21
5,316
26
23,609
4,635
33,204
8,223
74
–
6,065
32
316
23
6,828
213
–
–
86
281
–
34,757
172
–
–
32,797
5,316
–
–
–
88
336
–
34,143
172
–
–
34,208
6,828
–
73,883
83,222
73,409
75,775
26,613
7,915
24,592
3,895
26,990
7,564
19,015
3,866
–
–
8,966
2,702
23,123
22,515
13,443
–
144,389
86,138
224,339
160,021
307,561
–
25,111
98,520
–
–
3,128
2,550
12,726
582
18,986
94,761
1 See note 39 for an explanation of the prior year restatements in relation to the loss recognised on the measurement to fair value less costs to sell in
respect of discontinued operations.
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124
CONSOLIDATED AND COMPANY BALANCE SHEETS CONTINUED
As at 2 September 2023
(Company Number 00098221)
Liabilities
Current liabilities
Financial liabilities
– Borrowings
– Leases
– Derivative financial instruments
Contract liabilities
Trade and other payables
Current tax liabilities
Liabilities included in disposal group classified as held for sale
Non-current liabilities
Financial liabilities
– Borrowings
– Leases
Deferred tax liabilities
Other non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Share capital
Share premium
Other reserves
Retained earnings:
At the beginning of the year
(Loss)/profit attributable to equity shareholders
Other changes in retained earnings
Total shareholders’ equity
Non-controlling interests
Total equity
Group
Company
Notes
2023
£’000
2022
(restated)1
£’000
2023
£’000
2022
£’000
27
14
28
22
26
9
27
14
20
26
30
(13,714)
(1,264)
(4)
(5,194)
(12,734)
(1,416)
(62)
(2,426)
(2,125)
(126)
–
–
(1,413)
(113)
–
–
(16,556)
(21,000)
(3,392)
(4,193)
(131)
(711)
–
(101,566)
–
–
(119)
–
(36,863)
(139,915)
(5,643)
(5,838)
(5,206)
(23,805)
(4,697)
(22,757)
(5,559)
(4,447)
(71)
(6,128)
(5,048)
(336)
(167)
(855)
–
(231)
(1,181)
–
(15,283)
(35,317)
(5,719)
(24,169)
(52,146)
(175,232)
(11,362)
(30,007)
107,875
132,329
87,158
64,754
2,354
10,664
3,581
2,350
10,500
6,988
98,295
102,295
(226)
(6,793)
91,276
107,875
–
2,710
(6,710)
98,295
118,133
14,196
2,354
10,664
264
51,296
28,972
(6,392)
73,876
87,158
–
2,350
10,500
608
49,877
7,987
(6,568)
51,296
64,754
–
107,875
132,329
87,158
64,754
1 See note 39 for an explanation of the prior year restatements in relation to the loss recognised on the measurement to fair value less costs to sell in
respect of discontinued operations.
The financial statements set out on pages 121 to 191 were approved by the Board on 20 December 2023 and signed on its behalf by:
Tim Jones
David White
Carr's Group plc
| Annual Report and Accounts 2023
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Financial Statements
125
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 2 September 2023
Share
Capital
£’000
Share
Premium
£’000
Equity
Compensation
Reserve
£’000
Foreign
Exchange
Reserve
£’000
Other
Reserve
£’000
Retained
Earnings
£’000
Total
Shareholders’
Equity
£’000
Non-
controlling
Interests
£’000
Total
Equity
£’000
At 29 August 2021
2,343
10,155
480
1,931
195 102,295
117,399
17,152
134,551
Profit/(loss) for the year (restated)1
Other comprehensive
income/(expense)
Total comprehensive
income/(expense) (restated)1
Dividends paid
Equity-settled share-based
payment transactions
Excess deferred taxation
on share-based payments
Allotment of shares
Transfer
–
–
–
–
–
–
7
–
–
–
–
–
–
–
345
–
At 3 September 2022 (restated)1
2,350 10,500
–
–
–
–
199
–
–
(151)
528
–
4,337
4,337
–
–
–
–
–
–
–
–
–
–
–
–
(3)
2,710
2,710
(3,003)
(293)
(2,147)
2,190
–
2,190
563
4,900
(3,003)
1,897
(4,687)
(4,687)
–
(4,687)
–
199
50
249
(30)
–
154
(30)
352
–
(3)
–
–
(33)
352
–
6,268
192
98,295
118,133
14,196
132,329
As previously reported at
3 September 2022
Prior year adjustment1
2,350 10,500
528
6,268
192 100,657
120,495
15,976
136,471
–
–
–
–
–
(2,362)
(2,362)
(1,780)
(4,142)
At 4 September 2022 (restated)1
2,350 10,500
528
6,268
192
98,295
118,133
14,196
132,329
Loss for the year
Other comprehensive expense
Total comprehensive expense
Dividends paid
Equity-settled share-based
payment transactions
Excess deferred taxation
on share-based payments
Allotment of shares
Sale of disposal group
Transfer
–
–
–
–
–
–
4
–
–
–
–
–
–
–
–
164
–
–
At 2 September 2023
2,354 10,664
–
–
–
–
(85)
–
–
–
(179)
264
–
(3,141)
(3,141)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(226)
(2,081)
(2,307)
(4,889)
(226)
(535)
(761)
(5,222)
(5,448)
(4,889)
–
(5,222)
(535)
(5,983)
–
(4,889)
–
(4)
–
–
(85)
(7)
(92)
(4)
168
–
–
–
–
(4)
168
(13,654)
(13,654)
–
–
–
107,875
(2)
181
3,127
190
91,276
107,875
1 See note 39 for an explanation of the prior year restatements in relation to the loss recognised on the measurement to fair value less costs to sell in
respect of discontinued operations.
The equity compensation reserve reflects the cumulative accounting impact, at the balance sheet date, of the fair value of the
share schemes over the vesting periods. The movement on the equity compensation reserve is taken through the consolidated
income statement. During the year £179,000 (2022: £151,000) was transferred from the equity compensation reserve to retained
earnings in respect of options vested in the year.
The Group has opted to use previous revaluations of property made under UK GAAP as deemed cost. On adoption of IFRS the
revaluation reserve was reclassified to other reserves.
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| Annual Report and Accounts 2023
126
COMPANY STATEMENT OF CHANGES IN EQUITY
For the year ended 2 September 2023
At 29 August 2021
Profit for the year
Other comprehensive expense
Total comprehensive income
Dividends paid
Equity-settled share-based payment transactions
Excess deferred taxation on share-based payments
Allotment of shares
Transfer
At 3 September 2022
At 4 September 2022
Profit for the year
Other comprehensive expense
Total comprehensive income
Dividends paid
Equity-settled share-based payment transactions
Excess deferred taxation on share-based payments
Allotment of shares
Transfer
At 2 September 2023
Share
Capital
£’000
2,343
Share
Premium
£’000
10,155
Equity
Compensation
Reserve
£’000
536
–
–
–
–
–
–
7
–
2,350
2,350
–
–
–
–
–
–
4
–
–
–
–
–
–
–
345
–
10,500
10,500
–
–
–
–
–
–
164
–
2,354
10,664
–
–
–
–
146
–
–
(74)
608
608
–
–
–
–
(300)
–
–
(44)
264
Retained
Earnings
£’000
49,877
7,987
(1,932)
6,055
(4,687)
–
(23)
–
74
51,296
51,296
28,972
(1,543)
27,429
(4,889)
–
(4)
–
44
Total
Equity
£’000
62,911
7,987
(1,932)
6,055
(4,687)
146
(23)
352
–
64,754
64,754
28,972
(1,543)
27,429
(4,889)
(300)
(4)
168
–
73,876
87,158
The equity compensation reserve reflects the cumulative accounting impact, at the balance sheet date, of the fair value of
the share schemes over the vesting periods. The movement on the equity compensation reserve is taken through the income
statement where it relates to employees of the Company and to investment in subsidiaries where it relates to employees of the
subsidiaries. During the year £44,000 (2022: £74,000) was transferred from the equity compensation reserve to retained earnings
and £207,000 (2022: £103,000) was transferred from the equity compensation reserve to investment in subsidiaries in respect of
options vested in the year.
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| Annual Report and Accounts 2023
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CONSOLIDATED AND COMPANY STATEMENTS OF CASH FLOWS
For the year ended 2 September 2023
Cash flows from operating activities
Cash generated from/(used in) continuing operations
Notes
33
Interest received
Interest paid
Tax (paid)/received
Net cash generated from/(used in) operating activities in
continuing operations
Net cash used in operating activities in discontinued operations
Net cash used in operating activities
Cash flows from investing activities
Group
Company
2023
£’000
2022
£’000
2023
£’000
2022
£’000
3,155
564
(1,320)
(278)
2,121
(3,040)
(919)
4,473
179
(986)
(805)
2,861
(6,901)
(4,040)
(6,868)
1,991
(474)
522
(3,685)
1,548
(486)
(58)
(4,829)
(2,681)
–
–
(4,829)
(2,681)
Sale of disposal group (net of cash disposed and costs to sell)
25,619
–
25,046
Acquisition of subsidiaries (net of cash acquired)
Dividends received from subsidiaries
New loans to subsidiaries
Repayment of loans to subsidiaries
Investment in subsidiaries
Dividends received from joint ventures
Purchase of intangible assets
Proceeds from sale of property, plant and equipment
Purchase of property, plant and equipment
Proceeds from sale of investment property
Net cash generated from/(used in) investing activities in
continuing operations
Net cash used in investing activities in discontinued operations
Net cash generated from/(used in) investing activities
Cash flows from financing activities
Proceeds from issue of ordinary share capital
30
New financing and drawdowns on RCF
Repayment of RCF drawdowns
Lease principal repayments
Repayment of borrowings
Receipt of loans from subsidiaries
Repayment of loans from subsidiaries
Dividends paid to shareholders
10
Net cash used in financing activities in continuing operations
Net cash (used in)/generated from financing activities in
discontinued operations
Net cash (used in)/generated from financing activities
Effects of exchange rate changes
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at end of the year
25
–
–
–
–
–
(426)
–
–
–
–
1,390
2,250
(193)
48
(342)
31
(3,194)
(3,696)
–
149
23,670
(487)
23,183
167
5,574
(21,741)
(1,545)
(4,263)
–
–
(4,889)
(26,697)
(9,599)
(36,296)
(54)
(14,086)
24,855
10,769
(2,034)
(2,749)
(4,783)
352
10,051
(8,000)
(1,550)
(2,840)
–
–
(4,687)
(6,674)
20,324
13,650
332
5,159
19,696
24,855
–
3,957
(3,675)
2,176
–
481
–
–
(28)
–
27,957
–
27,957
167
4,741
–
–
6,195
(941)
2,165
(1,020)
1,656
–
–
(30)
–
8,025
–
8,025
352
9,963
(21,741)
(8,000)
(123)
(105)
(2,400)
(2,400)
2,500
(600)
(4,889)
(22,345)
1,125
–
(4,687)
(3,752)
–
–
(22,345)
(3,752)
(66)
717
12,726
13,443
71
1,663
11,063
12,726
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PRINCIPAL ACCOUNTING POLICIES
Basis of accounting
The consolidated and Company financial statements are prepared on a going concern basis in accordance with UK-adopted
International Accounting Standards and with the requirements of the Companies Act 2006 applicable to companies reporting
under those standards.
The Company is a public limited company incorporated and domiciled in England and Wales whose shares are listed and traded
on the London Stock Exchange. The address of its registered office is Old Croft, Stanwix, Carlisle, Cumbria CA3 9BA.
The preparation of financial statements in conformity with generally accepted accounting principles requires the use of estimates
and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting year. Although these estimates are based on management’s best
knowledge of the amount, event or actions, actual results ultimately may differ materially from the estimates.
The Group has recognised prior year restatements in relation to discontinued operations. Further details of these restatements can
be found in note 39.
Accounting policies have been applied consistently, other than where new policies have been adopted.
The consolidated and Company financial statements are prepared under the historic cost convention as modified by the
revaluation of certain financial assets and financial liabilities (including derivative financial instruments) at fair value through profit
or loss.
The accounting policies for the Group and Company are detailed below.
Going concern
The financial statements have been prepared on a going concern basis which the Directors consider to be appropriate for the
following reasons.
The Directors have reviewed the Group’s operational forecasts and projections for the three years to 31 August 2026 as used
for the viability assessment, taking account of reasonably possible changes in trading performance, together with the planned
capital investment over that same period. The Group is expected to have a sufficient level of financial resources available through
operating cash flows and existing bank facilities for the period to 20 December 2024 (“the going concern period”). The Group
has operated within all its banking covenants throughout the year. In addition, the Group’s main banking facility is in place until
December 2026.
For the purpose of assessing the appropriateness of the preparation of the Group’s accounts on a going concern basis, the
Directors have prepared financial forecasts for the Group, comprising profit before and after taxation, balance sheets and cash
flows covering the period to 20 December 2024. The forecasts consider the current cash position, the availability of banking
facilities and an assessment of the principal areas of risk and uncertainty. These forecasts have been sensitised on a combined
basis for severe but plausible downside scenarios. The scenarios tested included significant reductions in profitability and
associated cashflows linked to the two principal risks highlighted in the Viability Statement on page 24. The results of this stress-
testing showed that, due to the stability of the core business, the Group would be able to withstand the impact of these severe but
plausible downside scenarios occurring over the period of the financial forecasts. In addition to testing these severe but plausible
downside scenarios, reverse stress testing was also applied to the sensitised forecasts, to understand what level of downside
scenario the Group would not be able to withstand. The scenarios which created going concern uncertainty were deemed extreme
and implausible.
Several other mitigating measures remain available and within the control of the Directors that were not included in the scenarios.
These include withholding discretionary capital expenditure and reducing or cancelling future dividend payments.
In all the scenarios, the Group complies with its financial bank covenants, operates within its renewed bank facilities, and meets its
liabilities as they fall due.
Consequently, the Directors are confident that the Group and the Company will have sufficient funds to continue to meet their
liabilities as they fall due until 20 December 2024 and therefore have prepared the financial statements on a going concern basis.
Basis of consolidation
The consolidated financial statements comprise Carr’s Group plc and all its subsidiaries, together with the Group’s share of the
results of its associate and joint ventures. The financial information of the subsidiaries, associate and joint ventures is prepared as of
the same reporting date and consolidated using consistent accounting policies. Group inter-company balances and transactions,
including any unrealised profits arising from Group inter-company transactions, are eliminated in full.
Results of subsidiary undertakings acquired or disposed of during the current and prior financial year were included in the financial
statements from the effective date of control or up to the date of cessation of control. The separable net assets, both tangible and
intangible, of the acquired subsidiary undertakings were incorporated into the financial statements on the basis of the fair value as
at the effective date of the Group acquiring control.
An investor controls an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has
the ability to affect those returns through its power over the investee. Control requires power over the investee, exposure, or rights,
to variable returns and the ability to use power to affect returns. Subsidiaries are entities that meet this definition of control.
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Basis of consolidation continued
Associates are entities over which the Group has significant influence but not control, generally accompanied by a share of
between 20% and 50% of the voting rights. Joint ventures are entities over which the Group has joint control, established by
contractual agreement. Investments in associates and joint ventures are accounted for using the equity method. The Group’s share
of its associate’s and joint ventures’ post-tax results, together with impairment losses, are recognised in the income statement, and
its share of movement in reserves is recognised in reserves. The cumulative movements are adjusted against the carrying amount
of the investment. The Group’s investment in associate and joint ventures includes any goodwill arising on acquisition. If the Group’s
share of losses in an associate or joint venture equals or exceeds its investment in the associate or joint venture, the Group does
not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate or joint venture.
All subsidiaries are accounted for by applying the purchase method. The cost of a business combination is measured as the
aggregate of the fair values, at the acquisition date, of the assets given, liabilities incurred or assumed, and equity instruments
issued by the Group. The identifiable assets, liabilities and contingent liabilities of the acquiree are measured initially at fair value at
the acquisition date, irrespective of the extent of any non-controlling interest. The excess of the cost of the business combination
over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities is recognised as goodwill.
Contingent consideration is measured initially at fair value and is revalued to fair value at each subsequent period end until the
period in which it is settled.
Acquisition-related costs are expensed to the consolidated income statement in the year they are incurred.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated income statement,
statement of comprehensive income, balance sheet and statement of changes in equity respectively. The Group applies a policy of
treating transactions with non-controlling interests as transactions with parties external to the Group.
In accordance with IFRS 5 ‘Non-current assets held for sale and discontinued operations’, non-current assets and disposal groups
are classified as held for sale only if available for immediate sale in their present condition and a sale is highly probable and
expected to be completed within one year from the date of classification. Such assets are measured at the lower of carrying value
and fair value less costs to sell and are not depreciated or amortised. Fair value is the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In both the current and
prior year the net results of the Carr’s Billington Agricultural business are presented as discontinued operations in the consolidated
income statement, with restated comparatives. In the current year the net assets of the Group are in respect of continuing
operations only, having disposed of the Carr's Billington Agricultural business on 26 October 2022. At the prior year end the assets
and liabilities associated with this business are presented separately in the consolidated balance sheet as assets and liabilities
included in disposal group classified as held for sale. Further details of the disposal in the year and assets and liabilities held for
sale at the prior year end can be found in note 9.
Employee share trust
IFRS 10 requires that the Group consolidates a structured entity where the substance of the relationship between the parties
indicates that the Group controls the entity. The employee share trust sponsored by the Group falls within this category of
structured entity and has been accounted for as if it were, in substance, a subsidiary.
Currency translation
The financial statements for the Group’s subsidiaries, associate and joint ventures are prepared using their functional currency. The
functional currency is the currency of the primary economic environment in which an entity operates. The presentation currency of
the Group and Company is Sterling.
Foreign currency transactions are translated into the functional currency using exchange rates prevailing at the dates of the
transactions. Exchange differences resulting from the settlement of such transactions and from the translation, at exchange rates
ruling at the balance sheet date, of monetary assets and liabilities denominated in currencies other than the functional currency,
are recognised in the consolidated income statement.
The balance sheets of foreign operations are translated into Sterling using the exchange rate at the balance sheet date and
the income statements are translated into Sterling using the average exchange rate for the year. Where this average is not
a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, the exchange rate on
the transaction date is used. Exchange differences arising are recognised as a separate component of shareholders’ equity.
On disposal of a foreign operation any cumulative exchange differences held in shareholders’ equity are transferred to the
consolidated income statement.
Revenue recognition
Revenue is recognised when the Group transfers control over a product or service to its customer. Revenue is measured based
on the consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties. Inter-
segmental transactions are on an arm’s length basis.
The Group recognises revenue both at a point in time and over time. Revenues generated by the Group’s Speciality Agriculture
division and Agricultural Supplies (now classified as discontinued operations) division are recognised at a point in time. Revenues
generated by the Group’s Engineering division are recognised over time where either the contract with the customer does not
create an asset with an alternative use and where there is an enforceable right to payment for performance completed to date
or where the Group’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced.
Where this is not the case revenue is recognised at a point in time.
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PRINCIPAL ACCOUNTING POLICIES CONTINUED
Revenue recognition continued
In respect of contracts that meet the criteria to be recognised over time, revenue is calculated on the basis of the stage of
completion of each contract. The Group applies a single method of measuring progress for each performance obligation satisfied
over time and applies this method consistently to similar performance obligations and in similar circumstances. Depending on the
nature and circumstances of the performance obligation, the stage of completion is determined with reference to either:
• The proportion that contract costs incurred for work performed to date bear to the total estimated contract costs; or
• The proportion that contract output is delivered towards complete satisfaction of the performance obligation with reference to
certified or valued contract works.
Revenue is recognised for a performance obligation satisfied over time only if the Group can reasonably measure its progress
towards complete satisfaction of the performance obligation. In circumstances when it cannot reasonably measure the
outcome, but expects to recover the costs incurred in satisfying the performance obligation, the Group recognises revenue
only to the extent of the costs incurred. The Group would not be able to reasonably measure its progress towards complete
satisfaction of a performance obligation if it lacks reliable information that would be required to apply an appropriate method of
measuring progress.
Where it is probable that contract costs will exceed total contract revenue the expected loss is recognised immediately as an
expense in the consolidated income statement.
Contract modifications such as variations to the original order are not accounted for until they are approved by the customer.
Where a modification to an existing contract occurs, the nature of the modification is assessed to determine whether it
represents a separate performance obligation required to be satisfied by the Group or whether it is a modification to the existing
performance obligation.
Variable consideration arises where revenue is recognised on a time and materials basis, as is the case under certain of the Group's
contracts, although not the majority. Revenue is estimated using the most likely amount method and is recognised as the time and
materials are billed onto the customer. Where contracts include this arrangement invoices are raised monthly to the customer. As a
practical expedient, where the Group has the right to invoice a customer based on performance to date, such as in the case where
they are invoiced based on time and materials, the Group will recognise revenue on that basis.
The Group does not expect to have any material contracts where the period between the transfer of the promised goods or
services to the customer and payment by the customer exceeds one year. As a consequence, the Group does not apply the time-
value of money to its transaction prices.
Incremental costs of obtaining a contract with a customer are only recognised when it is expected that these costs will be
recovered. Costs to obtain a contract that would have been incurred regardless of whether the contract was obtained are
recognised as an expense when incurred, unless those costs are explicitly chargeable to the customer regardless of whether the
contract is obtained. Where the amortisation period of an asset that would otherwise have been recognised is one year or less, the
incremental costs of obtaining a contract are expensed when incurred.
Contract assets exist when the Group has a right to consideration in exchange for goods or services transferred to a customer
when that right is conditional on something other than the passage of time (e.g. future performance). Contract liabilities exist when
the Group has an obligation to transfer goods or services to a customer for which the Group has already received consideration.
Where the Group acts in the capacity of agent rather than principal under a contract, revenue is recognised when the commission
has been earned from the vendor.
Retirement benefit asset/obligation
The Group offers various pension schemes to employees including a defined benefit pension scheme and several defined
contribution schemes.
The assets of the Group’s pension schemes are held separately from those of the Group and are invested with independent
investment managers.
Contributions to defined contribution schemes are charged to the consolidated income statement in the year to which they relate.
Carr’s Group Pension Scheme
The asset recognised in the consolidated and Company balance sheet at the year end is the fair value of scheme assets at
the balance sheet date less the present value of the defined benefit obligation. Independent actuaries calculate the defined
benefit asset annually using the projected unit credit method. The present value of the defined benefit obligation is determined
by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are denominated
in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related
pension liability.
The service costs, including pension scheme administrative costs, are included in operating profit in the consolidated
income statement.
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Retirement benefit asset/obligation continued
A credit is made within interest which represents a net interest amount that is calculated by applying the discount rate at the
beginning of the year to the net defined benefit asset at the beginning of the year. The net interest amount also takes into account
changes to the net asset during the year.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the
consolidated and Company statement of comprehensive income. The pension scheme deficit or surplus, to the extent considered
recoverable, is recognised in full on the consolidated balance sheet.
IFRIC 14 confirms that where a company has an unconditional right to a refund of surplus from a defined benefit pension plan
during the lifetime of that plan or when it winds it up, and where there is expected to be surplus assets, there is no limit on the
asset the company can show on its balance sheet. Following a review of the Scheme’s Trust deed, the Directors believe that there
is a right to recognise, and that there is no restriction on the recognition of, the IAS 19 pension surplus. At 2 September 2023 and
3 September 2022, the consolidated and Company balance sheet recognises the full surplus on the Carr’s Group defined benefit
pension scheme. The Company does not intend to recover the surplus through a refund.
Carr’s Billington Agriculture Pension Scheme
One of the Group’s subsidiaries, Carrs Billington Agriculture (Sales) Ltd, which was disposed of on 26 October 2022, is a
participating employer in the Carr’s Billington Agriculture Pension Scheme, which is a multi-employer defined benefit pension
scheme. Note 29 provides further information on this scheme and how it has been accounted for in the consolidated accounts up
to the date of disposal.
Share-based payments
The Group issues equity-settled share-based payments to certain employees. Equity-settled share-based payments are measured
at fair value at the date of the grant. 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 shares that will eventually vest.
Fair value is measured by use of a valuation model. The expected life used in the model has been adjusted, based on
management’s best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.
At each balance sheet date the Group revises its estimate of the number of options that are expected to vest. Changes to the
fair value recognised as a result of this are charged or credited to the consolidated income statement with a corresponding
adjustment to the equity compensation reserve.
Interest
Interest is recognised in the consolidated income statement on an accruals basis using the effective interest method.
Borrowing costs
Borrowing costs are recognised in the consolidated income statement in the year in which they are incurred.
Operating segments
IFRS 8 requires operating segments to be identified on the basis of internal financial information about components of the Group
that are regularly reviewed by the Chief Operating Decision Maker (“CODM”) to allocate resources to the segments and to assess
their performance. The CODM has been identified as the Executive Directors.
The CODM considers the business from a product/services perspective. Reportable operating segments have been identified as
Speciality Agriculture and Engineering. The previously reported operating segment of Agricultural Supplies has been disposed of
in the year and is disclosed as a discontinued operation in the segmental reporting.
Adjusting items
Adjusting items that are material by size and/or by nature are presented within their relevant income statement category, but
highlighted separately on the face of the income statement. Further details of items that management consider fall into this
category are disclosed within note 5 to the financial statements. The separate disclosure of profit before adjusting items is
consistent with how business performance is measured internally and is presented to aid comparability of performance.
Goodwill
Goodwill arises on the acquisition of subsidiaries and represents the excess of the consideration transferred over the Group’s
interest in the net fair value of the net identifiable assets, liabilities and contingent liabilities of the acquiree and the fair value of the
non-controlling interest in the acquiree.
For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the CGUs, or groups
of CGUs, that is expected to benefit from the synergies of the combination. Each unit or group of units to which the goodwill is
allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes.
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PRINCIPAL ACCOUNTING POLICIES CONTINUED
Goodwill continued
Goodwill impairment reviews are undertaken annually or more frequently if events or changes in circumstances indicate a potential
impairment. The carrying value of goodwill is compared to the recoverable amount, which is the higher of value in use and the fair
value less costs of disposal. Any impairment is recognised immediately as an expense and cannot subsequently be reversed.
Goodwill written off to reserves under UK GAAP prior to 31 August 1998 has not been reinstated and would not form part of the
gain or loss on the disposal of a business.
Other intangible assets
Other intangible assets are carried at cost less accumulated amortisation and accumulated impairment losses. Amortisation
commences when assets are available for use. The expected useful lives, over which the assets are amortised, are generally as
follows:
Customer relationships
1 – 10 years
Brands
Know-how
6 – 25 years
15 years
Proprietary technology
5 – 13 years
Development costs
5 – 15 years
Patents and trademarks
contractual life
Contract backlog
3 years
Software
3 – 10 years
Software costs incurred as part of a service agreement are only capitalised when it can be evidenced that the Group has control
over the resources defined in the agreement. Software customisation and configuration costs relating to software not controlled by
the Group are expensed as incurred.
The cost of intangible assets acquired in a business combination is the fair value at the acquisition date. The cost of separately
acquired intangible assets comprises the purchase price and any directly attributable costs of preparing the assets for use.
Intangible assets are amortised on a straight-line basis.
Research and development costs
All research costs are recognised in the consolidated income statement as incurred. Development costs are recognised as an
asset only to the extent that specific recognition criteria, as set out in IAS 38 ‘Intangible assets’, relevant to the proposed application
are met and the amount recognised is recoverable through future economic benefits.
Property, plant and equipment
Property, plant and equipment is carried at cost less accumulated depreciation and accumulated impairment losses. Cost
comprises purchase price and directly attributable costs.
Freehold land and assets in the course of construction are not depreciated. For all other property, plant and equipment,
depreciation is calculated on a straight-line basis to allocate cost less residual values of the assets over their estimated useful lives
as follows:
Freehold buildings
up to 50 years
Leasehold improvements
shorter of 50 years or lease term
Plant and equipment
3 to 20 years
Residual values and useful lives are reviewed, and adjusted if appropriate, at each financial year end.
Assets not fully constructed at the balance sheet date are classified as assets in the course of construction. When construction is
complete these assets are reclassified to the appropriate heading within property, plant and equipment. Depreciation commences
when the asset is ready for use.
The cost of maintenance, repairs and minor equipment is charged to the consolidated income statement as incurred; the cost of
major renovations and improvements is capitalised.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within the
consolidated income statement.
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Investment property
Investment properties are properties held for long-term rental yields. Investment properties are carried in the balance sheet at cost
less accumulated depreciation. Freehold land is not depreciated. For all other investment property, depreciation is calculated on a
straight-line basis to allocate cost less residual values of the assets over their estimated useful lives as follows:
Freehold buildings
up to 50 years
The cost of maintenance, repairs and minor equipment is charged to the consolidated income statement as incurred; the cost of
major renovations and improvements is capitalised.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within the
consolidated income statement.
Impairment of non-financial assets
Non-financial assets are reviewed for impairment where there are any events or changes in circumstances that would indicate
potential impairment. In addition, at each reporting date, the Group assesses whether there is any indication that goodwill may
be impaired. Where an indicator of impairment exists, the Group makes an estimate of recoverable amount. Where the carrying
amount of an asset exceeds its recoverable amount the asset is written down to its recoverable amount. Recoverable amount is
the higher of fair value less costs to sell and value-in-use and is deemed for an individual asset. If the asset does not generate cash
inflows that are largely independent of those from other assets or groups of assets, the recoverable amount of the cash-generating
unit to which the asset belongs is determined. Discount rates reflecting the asset-specific risks and the time-value of money are
used for the value-in-use calculation.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials and, where applicable, direct
labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. Where
appropriate, cost is calculated on a specific identification basis. Otherwise inventories are valued using the first-in first-out method.
Net realisable value represents the estimated selling price less all estimated costs to completion and costs to be incurred in
marketing, selling and distribution.
Provision has been made, where necessary, for slow-moving, obsolete and defective inventories.
Cash and cash equivalents
Cash and cash equivalents for the purposes of the consolidated and Company statement of cash flows comprise cash at bank and
in hand, money market deposits and other short-term highly liquid investments with original maturities of three months or less and
bank overdrafts, which are repayable on demand. Although bank overdrafts are presented elsewhere in borrowings within current
liabilities in the consolidated and Company balance sheets, they are considered to be cash and cash equivalents as they are part
of a Group banking facility where bank balances in credit and overdrawn balances have a legal right of offset. They are therefore
used to manage the Group’s cash position on a net basis.
Grants
Grants received on capital expenditure are recorded as deferred income and taken to the consolidated income statement in equal
annual instalments over the expected useful lives of the assets concerned.
Revenue grants and contributions are taken to the consolidated income statement in the year to which they apply.
Leases
The Group leases properties, motor vehicles, plant and machinery and other equipment. Lease terms are negotiated on an
individual basis and contain a wide range of terms and conditions.
Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for
use by the Group. Each lease payment is allocated between the repayment of the lease liability and finance cost. The finance cost
is charged to the income statement over the lease period so as to produce a constant periodic rate of interest on the remaining
balance of the liability for each period. The right-of-use asset is depreciated over the shorter of the asset’s useful life and the lease
term on a straight-line basis and is also subject to regular impairment reviews.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present
value of the following lease payments:
• Fixed payments (including in-substance fixed payments), less any lease incentives receivable;
• Variable lease payments that are based on an index or rate;
• Amounts expected to be payable by the lessee under residual value guarantees;
• The exercise price of a purchase option if the lessee is reasonably certain to exercise that option; and
• Payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.
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PRINCIPAL ACCOUNTING POLICIES CONTINUED
Leases continued
The lease payments are discounted using the interest rate implicit in the lease. Where this cannot be determined, the lessee’s
incremental borrowing rate is used, being the rate that the lessee would have to pay to borrow the funds necessary to obtain an
asset of similar value in a similar economic environment with similar terms and conditions.
After initial measurement the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term
or a change in the fixed lease payments. Right-of-use assets are adjusted for any remeasurement of lease liabilities.
Right-of-use assets are measured at cost comprising the following:
• The amount of the initial measurement of the lease liability;
• Any lease payments made at or before the commencement date less any lease incentives received;
• Any initial direct costs incurred by the lessee; and
• Restoration costs required by the terms and conditions of the lease.
At the commencement date of property leases the Group normally determines the lease term to be the full term of the lease,
assuming that any option to break or extend the lease is unlikely to be exercised and it is not reasonably certain that the Group
will continue in occupation for any period beyond the lease term. Leases are regularly reviewed and will be revalued if it becomes
likely that a break clause or option to extend the lease is exercised.
Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis as an expense
in the income statement. Short-term leases are leases with a lease term of 12 months or less. Low-value assets generally comprise
minor office and IT equipment.
The Group acts as lessor in certain operating lease arrangements. Rental income is recognised on a straight-line basis in the
income statement. The Group is not a lessor in any finance lease arrangements.
Tax
The tax charge comprises current tax and deferred tax.
The current tax charge represents an estimate of the amounts payable to tax authorities in respect of the Group’s taxable profits.
Deferred tax is provided on temporary differences arising between the tax base of assets and liabilities and their carrying amounts
in the consolidated and Company financial statements. Deferred tax arising from initial recognition of an asset or liability in a
transaction, other than a business combination, that at the time of the transaction affects neither accounting nor taxable profit or
loss, is not recognised. Deferred tax is measured using tax rates that have been enacted or substantively enacted by the balance
sheet date and are expected to apply when the asset is realised or the liability is settled.
Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the
temporary differences can be utilised.
Deferred tax is provided on temporary differences arising on investments in subsidiaries, associates and joint ventures, except
where the Group is able to control the timing of the reversal of the temporary difference and it is probable that the temporary
difference will not reverse in the foreseeable future.
Tax is recognised in the consolidated income statement or consolidated statement of comprehensive income, unless the tax
relates to items recognised directly in shareholders’ equity, in which case the tax is recognised directly in shareholders’ equity.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax
liabilities and when the deferred tax assets and liabilities relate to income taxes levied by the same tax authority on either the same
taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.
Dividends
Final equity dividends to the shareholders of the Company are recognised in the year that they are approved by the shareholders.
Interim equity dividends are recognised in the year that they are paid.
Dividends receivable are recognised in the period in which they are received.
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Classification of financial instruments issued by the Group and Company
Financial instruments issued by the Group and Company are treated as equity only to the extent that they meet the following
two conditions:
(a) they include no contractual obligations upon the Group or Company to deliver cash or other financial assets or to exchange
financial assets or financial liabilities with another party under conditions that are potentially unfavourable to the Group or
Company; and
(b) where the instrument will or may be settled in the Company’s own equity instruments, it is either a non-derivative that includes
no obligation to deliver a variable number of the Company’s own equity instruments or is a derivative that will be settled by the
Company’s exchanging a fixed amount of cash or other financial assets for a fixed number of its own equity instruments.
To the extent that this definition is not met, the proceeds of issue are classified as a financial liability. Where the instrument so
classified takes the legal form of the Company’s own shares, the amounts presented in these financial statements for called-up
share capital and share premium account exclude amounts in relation to those shares.
Financial instruments
Financial assets and liabilities are recognised on the consolidated and Company balance sheet when the Group and Company
becomes a party to the contractual provisions of the instrument.
The Group and Company classifies its financial assets under the measurement categories of amortised cost, for non-derivative
financial assets, or measured subsequently at fair value through either profit or loss or comprehensive income.
Non-derivative financial assets
Non-derivative financial assets include contract assets, trade and other receivables and non-current receivables. As these
categories of financial assets do not carry a significant financing element, expected credit losses are measured using the simplified
impairment approach. This requires expected lifetime losses to be recognised upon the initial recognition of the asset.
Non-derivative financial assets, other than trade receivables, are recognised initially at fair value and subsequently measured at
amortised cost using the effective interest method. Trade receivables are measured initially at the IFRS 15 transaction price.
Derivative financial instruments and hedging activities
The Group primarily uses forward foreign currency contracts, options and currency swaps to manage its exposures to fluctuating
foreign exchange rates. These instruments are initially recognised at fair value and are subsequently remeasured at their fair value
at each balance sheet date.
The Group has previously hedged its international assets and, in the prior year, designated foreign currency loans as a hedge
against net investment in foreign operations. The portion of the gain or loss on an instrument used to hedge a net investment in
a foreign operation that is determined as an effective hedge was recognised directly in equity. The gain or loss on any ineffective
portion of the hedge was recognised immediately in the consolidated income statement. The Group applied IAS 39 for the
purposes of hedge accounting as permitted by IFRS 9.
New standards and interpretations
From 4 September 2022 the following became effective and were adopted by the Group and Company:
• Annual improvements to IFRS Standards 2018-2020 (effective 1 January 2022)
• Amendments to IAS 16 – Property, Plant and Equipment: Proceeds before intended use (effective 1 January 2022)
• Amendments to IAS 37 – Onerous Contracts – Cost of Fulfilling a Contract (effective 1 January 2022)
• Amendments to IFRS 3 – Reference to the Conceptual Framework (effective 1 January 2022)
Their adoption did not have a material effect on the Group or Company’s profit for the year or equity.
New standards, amendments and interpretations issued but not yet effective and not early adopted
• Amendments to IAS 1 and IFRS Practice Statement 2 – Disclosure of Accounting Policies (effective 1 January 2023)
• Amendments to IAS 8 – Definition of Accounting Estimates (effective 1 January 2023)
• Amendments to IAS 12 – Deferred Tax related to Assets and Liabilities arising from a Single Transaction (effective 1 January 2023)
• Amendments to IAS 12 – International tax reform - pillar two model rules (effective 1 January 2023)
• IFRS 17 – Insurance Contracts, as amended in December 2021 (effective 1 January 2023)
• Amendments to IAS 1 – Classification of Liabilities as Current or Non-current (effective 1 January 2024)
• Amendments to IAS 1 – Non-current Liabilities with Covenants (effective 1 January 2024)
• Amendments to IFRS 16 – Lease Liability in a Sale and Leaseback (effective 1 January 2024)
It is not considered that the above standards and amendments will have a significant effect on the results or net assets of the
Group or Company.
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PRINCIPAL ACCOUNTING POLICIES CONTINUED
Significant judgements, key assumptions and estimates
Application of certain Group accounting policies requires management to make judgements, assumptions and estimates
concerning the future as detailed below.
The following are considered to be accounting estimates:
Valuation of pension obligations
The valuation of the Group’s defined benefit pension scheme is determined each year following advice from a qualified
independent actuary and can fluctuate based on a number of external factors. Such factors include the major assumptions as
shown in the table in note 29 and actual returns on scheme assets compared to those predicted in the previous scheme valuation.
It is reasonably possible, on the basis of existing knowledge, that outcomes within the next financial year that are different from the
assumption could require a material adjustment to the carrying amount of the assets affected. The carrying value of the defined
benefit pension scheme surplus at 2 September 2023 is £5.3m (2022: £6.8m). More information on the pension scheme is given in
note 29.
Impairment of goodwill and non-financial assets
Non-financial assets are reviewed for impairment where there are any events or changes in circumstances that would indicate
potential impairment. In addition the carrying value of goodwill must be assessed for impairment annually, or more frequently if
there are indications that goodwill might be impaired. This requires an estimation of the value in use of the cash-generating units to
which goodwill is allocated. Value-in-use is dependent on estimations of future cash flows from the cash-generating unit and the
use of an appropriate discount rate to discount those cash flows to their present value.
Impairment to goodwill of £3.6m was identified in the current year (2022: £4.2m). The carrying value of goodwill at 2 September
2023 is £19.2m (2022: £23.6m). Additionally an impairment of £0.3m (2022: £nil) has been recognised against the carrying value of
other intangible assets. Further details of cash-generating units and stress testing performed on the carrying values can be found
in note 12.
Revenue recognition on contracts
For contracts recognised over time the Group recognises revenue and profits based on the stage of completion. This requires
management to make an assessment of performance obligations under each contract, the ability to reasonably estimate the
outcome, and the point at which those obligations have been fulfilled. Management uses estimates and judgements when
assessing the total expected costs on a contract and when estimating variable consideration.
Year end balances affected by these estimates are contract assets which include the estimates above to determine the value of
the goods and services transferred to customers at the year end for which the Group is due consideration, and contract liabilities
which include estimates over the amounts of consideration received from customers that are in excess of the value of the work
performed at the year end date. It is reasonably possible that the unconditional right to consideration receivable in the next
financial year may materially differ to that assumed in the contract assets and liabilities included in the consolidated balance sheet.
The Group has controls in place to review and monitor the estimates used to ensure they are appropriate. Disclosures relating to
revenue recognition can be found in note 3 and further details on contract assets and liabilities at the year end can be found in
note 22.
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NOTES TO THE FINANCIAL STATEMENTS
1 The Company has taken advantage of the exemption, under section 408 of the Companies Act 2006, from presenting its
own income statement of comprehensive income and related notes. Total comprehensive income for the year dealt with in the
accounts of the Company was £27,429,000 (2022: £6,055,000) of which £28,972,000 (2022: £7,987,000) relates to profit after tax for
the year.
2 Segmental information
The chief operating decision maker (“CODM”) has been identified as the Executive Directors. Management has identified the
operating segments based on internal financial information reviewed by the CODM. The CODM considers the business from a
product/services perspective. Operating segments of continuing operations have been identified as Speciality Agriculture and
Engineering. The previously reported operating segment of Agricultural Supplies was classified as a disposal group at the prior
year end, with subsequent disposal on 26 October 2022, and is therefore disclosed as a discontinued operation in the segmental
reporting tables below. Central comprises the central business activities of the Group’s head office, which earns no external
revenues. Operating segments have not been aggregated for the purpose of determining reportable segments. Prior year
disclosures have been restated in respect of discontinued operations. Further details of the prior year restatements can be found
in note 39.
Speciality Agriculture derives its revenue from the sale of animal feed blocks and animal health products.
Engineering derives its revenue from the provision of engineering services and the design and manufacture of bespoke equipment
for use in the nuclear, naval defence, and oil and gas industries. Products include manipulators, robotics, specialist fabrication and
precision machining.
Discontinued operations derives its revenue from the manufacture and sale of animal feed together with retail sales of farm
equipment, fuels and farm consumables through its network of rural stores.
Performance is assessed using adjusted operating profit. For internal purposes the CODM assesses operating profit before material
adjusting items (note 5) consistent with the presentation in the financial statements.
Inter-segmental transactions are all undertaken on an arm’s length basis.
The Group has operations in the UK and overseas. In accordance with IFRS 8, entity-wide disclosures based on the geography of
operations is also presented. The geographical analysis of revenue is presented by revenue origin.
The segmental information for the year ended 2 September 2023 is as follows:
Total segment revenue
Inter-segment revenue
Revenue from external customers
Speciality
Agriculture
£’000
Engineering
£’000
Central
£’000
93,960
50,609
(1,320)
(35)
92,640
50,574
–
–
–
Continuing
Group
£’000
Discontinued
operations
£’000
144,569
53,212
(1,355)
(1)
143,214
53,211
Adjusted1 EBITDA2
6,117
7,678
(2,850)
10,945
(1,821)
Depreciation, amortisation and profit/(loss) on disposal of
non-current assets
Share of post-tax results of associate and joint ventures
Adjusted1 operating profit/(loss)
Adjusting items (note 5)
Operating profit/(loss)
Finance income
Finance costs
Adjusted1 profit/(loss) before taxation
Adjusting items (note 5)
Profit/(loss) before taxation
Taxation of discontinued operations
Loss for the year from discontinued operations (note 9)
(1,916)
(2,394)
(126)
(4,436)
1,441
5,642
(3,315)
2,327
–
5,284
(2,283)
3,001
–
(2,976)
(401)
(3,377)
1,441
7,950
(5,999)
1,951
876
(1,320)
7,506
(5,999)
1,507
–
466
(1,355)
3
(1,352)
–
(186)
(1,541)
3
(1,538)
381
(1,157)
1 Adjusted results are consistent with how business performance is measured internally and is presented to aid comparability of performance. Adjusting
items are disclosed in note 5.
2 Earnings before interest, tax, depreciation, amortisation, profit/(loss) on the disposal of non-current assets and before share of post-tax results of
associate and joint ventures.
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138
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
2 Segmental information continued
Assets and liabilities
Gross assets
Gross liabilities
Intangible asset additions (note 12)
Property, plant and equipment additions (note 13)
Right-of-use asset additions (note 14)
Speciality
Agriculture
£’000
Engineering
£’000
Central
£’000
Continuing
Group
£’000
53,490
77,190
29,341
160,021
(13,702)
(29,393)
(9,051)
(52,146)
2
2,218
184
187
906
303
–
28
72
189
3,152
559
The segmental information for the year ended 3 September 2022 is as follows. Prior year disclosures have been restated in respect
of discontinued operations. Further details of the prior year restatements of discontinued operations can be found in note 39.
Total segment revenue
Inter-segment revenue
Revenue from external customers
Speciality
Agriculture
£’000
84,321
(6,244)
78,077
Engineering
£’000
Central
£’000
46,347
(184)
46,163
–
–
–
Continuing
Group
£’000
Discontinued
operations
(restated)
£’000
130,668
343,844
(6,428)
(6)
124,240
343,838
Adjusted1 EBITDA2
9,869
7,693
(2,487)
15,075
7,586
Depreciation, amortisation and profit/(loss) on disposal of
non-current assets
Share of post-tax results of associate (adjusted1) and joint
ventures
Adjusted1 operating profit/(loss)
Adjusting items (note 5)
Operating profit/(loss)
Finance income
Finance costs
Adjusted1 profit before taxation
Adjusting items (note 5)
Profit/(loss) before taxation
Taxation of discontinued operations
Loss for the year from discontinued operations (note 9)
(1,532)
(2,326)
(151)
(4,009)
(2,693)
840
9,177
131
9,308
–
5,367
(3,351)
2,016
–
(2,638)
(454)
(3,092)
840
11,906
(3,674)
8,232
351
(1,017)
11,240
(3,674)
7,566
2,016
6,909
(11,877)
(4,968)
–
(756)
6,153
(11,877)
(5,724)
(611)
(6,335)
1 Adjusted results are consistent with how business performance is measured internally and is presented to aid comparability of performance. Adjusting
items are disclosed in note 5.
2 Earnings before interest, tax, depreciation, amortisation, profit/(loss) on the disposal of non-current assets and before share of post-tax results of
associate and joint ventures.
Assets and liabilities
Gross assets
Gross liabilities
Speciality
Agriculture
£’000
Engineering
£’000
Central
£’000
Continuing
Group
£’000
Discontinued
operations
(restated)
£’000
Total
Group
(restated)
£’000
58,972
79,821
24,379
163,172
144,389
307,561
(15,739)
(28,383)
(29,544)
(73,666)
(101,566)
(175,232)
Intangible asset additions (note 12)
5
337
Property, plant and equipment additions
(note 13)
Right-of-use asset additions (note 14)
2,303
116
1,436
733
–
29
109
342
3,768
958
–
342
1,910
1,770
5,678
2,728
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2 Segmental information continued
Goodwill and other intangible assets impairment
During the year the Group recognised an impairment of goodwill of £1.7m in respect of the Speciality Agriculture reportable
segment and £1.8m in respect of the Engineering reportable segment. In addition, an impairment of £0.3m was recognised against
other intangible assets in respect of the Speciality Agriculture reportable segment. Further details can be found in note 12. In the
prior year the Group recognised an impairment of goodwill of £4.2m in respect of the Engineering reportable segment.
Entity-wide disclosures
Revenues from external customers are derived from the sale of products/services by individual business segment. The breakdown
of revenue by business segment is provided above. Revenues from external customers:
UK
USA
Germany
Republic of Ireland
New Zealand
Other
Non-current assets
2023
2022
Continuing
operations
£’000
60,298
67,328
9,664
4,162
1,762
–
Discontinued
operations
£’000
53,211
–
–
–
–
–
Continuing
operations
£’000
52,325
56,098
9,511
4,359
1,946
1
Discontinued
operations
£’000
343,828
–
–
–
–
–
143,214
53,211
124,240
343,838
2023
2022
UK
£’000
USA
£’000
Germany
£’000
Republic
of Ireland
£’000
New
Zealand
£’000
Goodwill
6,478
8,674
4,009
Total
£’000
UK
£’000
USA
£’000
Germany
£’000
19,161
10,044
9,516
4,049
3,318
2,958
888
789
–
–
45 29,950 14,253
11,302
7,613
Republic
of Ireland
£’000
New
Zealand
£’000
Total
£’000
–
–
–
– 23,609
–
4,635
36 33,204
–
–
–
1,870
703
745
12,520 10,230
7,155
Other intangible
assets
Property, plant
and equipment
Right-of-use
assets
Investment
property
Interest in joint
ventures
Other investments
Contract assets
Non-current
receivables
6,476
241
580
26
2,640
–
–
53
3,851
2,197
5
–
–
22
–
21
–
–
–
–
–
–
–
–
–
–
–
–
–
–
7,323
7,447
326
407
43
2,640
6,101
27
–
21
74
97
6
316
–
–
–
4,160
1,808
26
–
23
–
–
–
–
–
–
–
–
–
–
–
–
–
–
8,223
74
6,065
32
316
23
30,042 23,742 14,686
26
45 68,541
35,195
26,241
14,666
43
36
76,181
Major customers
Included within Group revenue from continuing operations is £16.7m (2022: £17.2m) in respect of a customer in the Speciality
Agriculture segment. This revenue accounts for more than 10% of the continuing Group revenue in both years presented.
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
3 Revenue
Disaggregation of revenue
In accordance with IFRS 15 ‘Revenue from Contracts with Customers’ the following table presents the Group’s reported revenue
disaggregated based on the timing of revenue recognition.
Timing of revenue recognition
Over time
At a point in time
2023
2022
Continuing
operations
£’000
29,050
114,164
143,214
Discontinued
operations
£’000
–
53,211
53,211
Continuing
operations
£’000
28,919
95,321
124,240
Discontinued
operations
£’000
–
343,838
343,838
Transaction price allocated to the remaining performance obligations
As at 2 September 2023:
Total transaction price allocated to the remaining
performance obligations
As at 3 September 2022:
2024
£’000
2025
£’000
2026
onwards
£’000
Total
£’000
43,711
11,523
4,520
59,754
2023
£’000
2024
£’000
2025
onwards
£’000
Total
£’000
Total transaction price allocated to the remaining
performance obligations
31,528
5,758
3,356
40,642
The total transaction price allocated to the remaining performance obligations represents the contracted revenue to be earned by
the Group for distinct goods and services which the Group has promised to deliver to its customers. These include promises which
are partially satisfied at the period end or those which are unsatisfied but which the Group has committed to providing.
The transaction price above does not include any estimated revenue to be earned on framework contracts for which a firm order
or instruction has not been received from the customer. It also excludes secured orders at the year end where the Group acts in
the capacity of agent rather than principal under the contract.
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4 Operating profit
Group operating profit is stated after (crediting)/charging:
Amortisation of grants
Profit on disposal of property, plant and equipment
Loss/(profit) on disposal of right-of-use leases
Profit on disposal of investment property
Depreciation of property, plant and equipment
Depreciation of right-of-use assets
Depreciation of owned investment property
Amortisation of intangible assets
Goodwill and other intangible assets impairment
Foreign exchange losses/(gains)
Derivative financial instruments (gains)/losses
Research and development expense
Auditors’ remuneration:
Audit services (Company £19,000; 2022: £17,830)
Audit services – additional fees from previous auditors for 2021
The auditing of accounts of subsidiaries of the Company
pursuant to legislation (including overseas)
Total audit services
Reporting accountant services
Total non-audit services
Included within Group operating profit is the following in respect
of investment property leased to, and occupied by, external parties:
Rental income
Operating expenses/(income)
2023
2022
Continuing
operations
£’000
Discontinued
operations
£’000
Continuing
operations
£’000
Discontinued
operations
£’000
(5)
(23)
4
–
3,023
1,308
67
1,004
3,843
252
(58)
695
100
–
658
758
–
–
(365)
371
6
–
–
–
–
–
–
–
–
–
–
–
–
–
–
200
200
–
–
–
–
–
(32)
(17)
(5)
(76)
2,778
1,276
5
988
4,219
(171)
60
–
(9)
(15)
–
1,067
1,632
–
18
–
–
–
6,783
1,461
91
85
710
886
–
–
(42)
(35)
(77)
–
35
480
515
355
355
–
–
–
The amounts presented for research and development expense in the prior year included significant additional spend identified
following an exercise undertaken in the prior year to determine qualifying spend for UK tax purposes.
The auditors’ remuneration in the prior year includes a £120,000 additional fee raised in the prior year by the Group's previous
auditors, KPMG, in respect of the audit of the year ended 28 August 2021.
In the prior year reporting accountant services of £355,000 in respect of discontinued operations relate to services associated with
the disposal of the Carr's Billington Agricultural business.
Rental income and operating expenses from investment properties in the current year includes rental income from properties
leased to the Carr's Billington Agricultural business following its disposal on 26 October 2022.
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
5 Adjusting items
In reporting financial information, the Group presents alternative performance measures (“APMs”), which are not defined or
specified under the requirements of IFRS. These APMs are consistent with how business performance is measured internally and
therefore the Group believes that these APMs provide stakeholders with additional useful information on the performance of the
business. The following adjusting items have been added back to reported profit measures.
Amortisation of acquired intangible assets (i)
Adjustments to contingent consideration (ii)
Restructuring/closure costs (iii)
Strategic review costs (iv)
Acquisition-related costs (v)
Gain on acquisition of Afgritech (vi)
(Profit)/loss on fair value measurement less costs to sell (vii)
Cloud configuration and customisation costs – Group (viii)
Cloud configuration and customisation costs – share of associate (viii)
Goodwill and other intangible assets impairment (ix)
Included in profit before taxation
Taxation effect of the above adjusting items
Included in profit/(loss) for the year
2023
2022
Continuing
operations
£’000
Discontinued
operations
£’000
947
–
607
–
–
–
–
602
–
3,843
5,999
(559)
5,440
–
–
–
–
–
–
(3)
–
–
–
(3)
–
(3)
Continuing
operations
£’000
940
(1,320)
–
455
–
(733)
–
113
–
4,219
3,674
(342)
3,332
Discontinued
operations
(restated)
£’000
–
–
–
–
20
–
10,518
974
365
–
11,877
(186)
11,691
(i) Amortisation of acquired intangible assets which do not relate to the underlying profitability of the Group but rather relate to costs arising on acquisition
of businesses.
(ii) Adjustments to contingent consideration arose from the revaluation of contingent consideration in respect of acquisitions to fair value at the prior
year end.
(iii) Restructuring/closure costs include redundancy costs.
(iv) Strategic review costs include external adviser fees incurred in the development of the Group’s strategy.
(v) Acquisition-related costs relate to legal fees incurred in respect of an aborted acquisition.
(vi)
In the prior year the Group acquired the remaining 50% shareholding in Afgritech Ltd and the financial position and performance of the business,
together with that of its 100% owned subsidiary Afgritech LLC, was fully consolidated from the date of acquisition. The Group’s joint venture interest
was effectively disposed of at this acquisition date with a gain of £197,000, being the difference between the carrying value and the fair value of the joint
venture interest, recognised. Also included in the amount in the table above are foreign exchange gains of £559,000 that were recycled from the foreign
exchange reserve to the income statement on disposal, acquisition-related costs of £27,000 and negative goodwill of £4,000 (note 32).
(vii) The Group disposed of its interest in the Carr's Billington Agricultural business on 26 October 2022. The (profit)/loss on fair value measurement less
costs to sell in this year arises from the structure of the sale and offsets the retained earnings from discontinued operations between 3 September 2022
and completion date.
At the prior year end the carrying value of the assets and liabilities included in the disposal group classified as held for sale exceeded the fair value less
costs to sell. As a result the net assets of the disposal group were reduced to the fair value less costs to sell resulting in a loss of £10,518,000 (restated)
being recognised. This included a loss attributable to the non-controlling interests of £4,383,000 (restated) together with costs to sell of £175,000
recognised within the accounts of Carrs Billington Agriculture (Sales) Ltd. Further details of the prior year restatements can be found in note 39.
(viii) Costs relating to material spend in relation to the implementation of the Group’s, and associate’s, ERP system that have now been expensed following
the adoption of the IFRIC agenda decision.
(ix)
Impairment of goodwill and other intangible assets in respect of the Animax Ltd cash-generating unit and impairment of goodwill in respect of the NW
Total Engineered Solutions Ltd cash-generating unit. Further details of the impairment charges can be found in note 12. In the prior year the impairment
of goodwill was in respect of the Chirton profit centre and Wälischmiller Engineering GmbH cash-generating units.
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6 Staff costs
The tables below include Executive and Non-Executive Directors.
Wages and salaries
Social security costs
Pension costs
Staff costs before share-based payments
Share-based payments
2023
2022
Continuing
operations
£’000
Discontinued
operations
£’000
Continuing
operations
£’000
Discontinued
operations
£’000
32,491
3,470
1,816
37,777
(78)
2,527
266
168
2,961
(14)
28,737
3,253
1,651
33,641
148
15,286
1,708
1,123
18,117
101
37,699
2,947
33,789
18,218
Included within pension costs is a charge of £166,000 (2022: £126,000) in respect of the defined benefit pension scheme.
The average monthly number of employees during the year was made up as follows:
Sales, office and management
Manufacture and distribution
2023
2022
Continuing
operations
Number
Discontinued
operations
Number
Continuing
operations
Number
Discontinued
operations
Number
238
418
656
441
112
553
233
417
650
411
111
522
The average monthly number of employees for discontinued operations in the current year is for the period up to disposal on 26
October 2022.
Key management is considered to be the Directors of the Group.
The following amounts are disclosed in accordance with Schedule 5 of the Large and Medium-Sized Companies and Groups
(Accounts and Reports) Regulations 2008.
Aggregate Directors’ remuneration1
Aggregate social security costs
Aggregate pension contributions2
Aggregate amount of gains on exercise of share options3
2023
£’000
913
114
12
–
1,039
2022
£’000
1,035
145
1
35
1,216
1 Salary (after salary sacrifice of pension), fees, bonuses, pay in lieu of pension, pay in lieu of notice and benefits in kind. Includes bonuses based on
amounts accrued at the year end.
2 Cash contributions paid in the year into the defined contribution pension scheme.
3 Gains realised in the year in respect of the LTIP, deferred bonus plan and share save scheme.
The number of Directors in the defined contribution pension scheme during the year was two (2022: one).
Further details of the Directors’ emoluments, pension benefits and share options are given in the Remuneration Committee Report
on pages 78 to 102 (inclusive).
Carr's Group plc
| Annual Report and Accounts 2023
144
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
7 Finance income and finance costs
Finance income
Bank interest
Net interest on the net defined benefit retirement asset
(note 29)
Other interest
Total finance income
Finance costs
Interest payable on bank overdrafts
Interest payable on bank loans and other borrowings
Interest payable on leases
Other interest
Total finance costs
8 Taxation
(a) Analysis of the charge/(credit) in the year
Current tax:
UK corporation tax
Current year
Adjustment in respect of prior years
Foreign tax
Current year
Adjustment in respect of prior years
Group current tax
Deferred tax:
Origination and reversal of timing differences
Current year
Adjustment in respect of prior years
Group deferred tax (note 20)
Tax charge/(credit) for the year
Deferred tax recognised in equity is disclosed in note 20.
2023
2022
Continuing
operations
£’000
Discontinued
operations
£’000
Continuing
operations
£’000
Discontinued
operations
£’000
552
312
12
876
(549)
(515)
(223)
(33)
(1,320)
–
–
–
–
–
(129)
(32)
(25)
(186)
176
159
16
351
(183)
(569)
(240)
(25)
(1,017)
–
–
–
–
–
(420)
(243)
(93)
(756)
2023
2022
Continuing
operations
£’000
Discontinued
operations
£’000
Continuing
operations
£’000
Discontinued
operations
£’000
–
(42)
784
(331)
411
228
472
700
1,111
(343)
58
–
–
(285)
(57)
(39)
(96)
(381)
119
164
1,607
(1)
1,889
10
(375)
(365)
1,524
316
51
–
–
367
224
20
244
611
Carr's Group plc
| Annual Report and Accounts 2023
Overview
Strategic Report
Corporate Governance
Financial Statements
145
8 Taxation continued
(b) Factors affecting tax charge/(credit) for the year
The tax assessed for the year from continuing operations is higher (2022: higher) than the rate of corporation tax in the UK of 21.5%
(2022: 19%). The differences are explained below:
Profit/(loss) before taxation
Tax at 21.5% (2022: 19%)
Effects of:
2023
2022
Continuing
operations
£’000
1,507
324
Discontinued
operations
£’000
(1,538)
(331)
Continuing
operations
£’000
7,566
1,438
Discontinued
operations
(restated)
£’000
(5,724)
(1,088)
Tax effect of share of results of associate and joint ventures
(310)
(100)
(160)
(314)
Tax effect of expenses that are not allowable in determining
taxable profit
Tax effect of non-taxable income
Effects of different tax rates of foreign subsidiaries
Effects of deferred tax rates
Unrecognised deferred tax on losses
Withholding taxes suffered
Adjustment in respect of prior years
Total tax charge/(credit) for the year
1,114
(407)
7
(20)
304
–
99
1,111
56
(11)
–
(14)
–
–
19
(381)
1,213
(1,183)
149
68
99
112
(212)
1,524
2,033
(143)
–
52
–
–
71
611
The tax effect of expenses that are not allowable in determining taxable profit includes share-based payments, depreciation of
non-qualifying assets, disregarded foreign exchange net loss movements, other expenses disallowable for UK corporation tax,
goodwill impairment (notes 5 and 12) and, in respect of discontinued operations in the prior year, it includes the loss recognised on
the measurement to fair value less costs to sell of the disposal group (notes 5 and 9).
The tax effect of non-taxable income includes adjustments to contingent consideration (note 5), the effect of income within the
patent box regime, disregarded foreign exchange net gain movements, adjustments to profit before taxation for research and
development expenditure credits in respect of prior years, and the 30% benefit of the super deduction for capital allowances.
Carr's Group plc
| Annual Report and Accounts 2023
146
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
9 Discontinued operations and non-current assets held for sale
On 31 August 2022, the Group entered into a conditional agreement to dispose of its interests in the Carr’s Billington Agricultural
business to Edward Billington & Son Limited. In accordance with IFRS 5 ‘Non-current assets held for sale and discontinued
operations’, the assets and liabilities related to the business were classified as a disposal group held for sale at 3 September 2022.
The sale was conditional on approval by the Group’s shareholders which was given at a General Meeting held on 19 September
2022. The disposal completed on 26 October 2022.
On completion, the Company received £24.7m initial cash proceeds (before costs to sell) following certain working capital
adjustments since the announcement on 31 August 2022. Following the finalisation of the completion accounts mechanism the
Company has received a further £1.2m cash proceeds. On 26 October 2023 the Company received £4.0m of deferred consideration.
Total cash consideration was £29.9m, of which £4.0m was received post year end 2023. The proceeds included in the calculation
of loss on the measurement to fair value less costs to sell have been reduced by £0.8m to reflect rent free periods on properties
leased by the Group to the Billington group post-disposal. This has been reflected in the prior year adjustment (note 39) within
total comprehensive income attributable to equity shareholders in respect of property rental terms. Costs of disposal of £0.3m
have been deducted from disposal proceeds in the current year. The net assets of the disposal group at the date of disposal were
£42.4m, including £(0.6)m cash and cash equivalents. Included in other comprehensive income in the year is £0.5m (2022: £0.2m)
of actuarial losses net of tax in respect of the disposal group. The net assets of the disposal group at 3 September 2022, when they
were classified as held for sale, reflected consolidation adjustments of £1.3m.
The tables below show the results of the discontinued operations and the profit/(loss) recognised on the remeasurement to fair
value less costs to sell, together with the classes of assets and liabilities comprising the operations held for sale in the Group
balance sheet as at 3 September 2022.
Revenue
Expenses
Share of post-tax results of associate
Share of post-tax results of joint venture
(Loss)/profit before taxation of discontinued operations
Taxation (note 8)
(Loss)/profit after taxation of discontinued operations
Pre-taxation gain/(loss) recognised on the measurement to fair value less costs to sell
Taxation
After taxation gain/(loss) recognised on the measurement to fair value less costs to sell
Loss for the year from discontinued operations
2023
£’000
53,211
(55,218)
(2,007)
378
88
(1,541)
381
(1,160)
3
–
3
(1,157)
2022
(restated)
£’000
343,838
(340,870)
2,968
1,165
486
4,619
(611)
4,008
(10,343)
–
(10,343)
(6,335)
In the prior year the pre-taxation loss recognised on the measurement to fair value less costs to sell included £4,383,000 (restated)
in respect of the non-controlling interest's share of the measurement impairment.
The prior year loss recognised on the measurement to fair value less costs to sell had previously been determined based on the
difference between estimated proceeds receivable and net assets of the two businesses where the direct shareholding was being
sold. This has been corrected, by a prior year restatement, to also include the Group's interest in the joint venture, Bibby Agriculture
Ltd, indirectly held by the Company through its ownership of Carrs Billington Agriculture (Sales) Ltd. A further correction has
been made to reflect property rental terms agreed with the Billington Group as part of the sale process. Further details of these
restatements can be found in note 39.
Carr's Group plc
| Annual Report and Accounts 2023
Overview
Strategic Report
Corporate Governance
Financial Statements
147
9 Discontinued operations and non-current assets held for sale continued
The net assets relating to the disposal group that were classified as held for sale at 3 September 2022 in the Group and Company
balance sheets are shown below:
Assets of the disposal group
Goodwill
Property, plant and equipment
Right-of-use assets
Investment in subsidiary undertakings
Investment in associate
Interest in joint ventures
Other investments
Deferred tax asset
Inventories
Trade and other receivables
Current tax assets
Cash and cash equivalents
Loss on fair value measurement before costs to sell
Total assets
Liabilities of the disposal group
Borrowings
Leases
Trade and other payables
Total liabilities
Net assets
Group
(restated)
£’000
5,285
8,539
8,267
–
15,218
2,870
45
177
34,442
65,946
101
12,074
(8,575)
Company
£’000
–
–
–
337
245
–
–
–
–
–
–
–
–
144,389
582
(24,415)
(8,196)
(68,955)
(101,566)
42,823
–
–
–
–
582
Costs to sell of £1,768,000 were incurred by the parent Company in the prior year and were therefore excluded from the loss on
fair value measurement shown above. The loss on fair value measurement before costs to sell included £4,383,000 (restated) in
respect of the non-controlling interest's share of the measurement impairment.
The Company classified its investment in Ordinary Shares of Carr’s Billington Agriculture (Sales) Limited and Carr’s Billington
Agriculture (Operations) Limited as assets held for sale.
10 Dividends
Equity
Second interim paid for the year ended 3 September 2022 of 1.175p per 2.5p share (2021: 1.175p)
Final dividend for the year ended 3 September 2022 of 2.85p per 2.5p share (2021: 2.65p)
First interim paid for the year ended 2 September 2023 of 1.175p per 2.5p share (2022: £1.175p)
2023
£’000
1,104
2,680
1,105
4,889
2022
£’000
1,100
2,483
1,104
4,687
Since the year end an interim dividend of £1,105,740 being 1.175p per share, has been paid. The financial statements do not reflect
the dividend payable.
The proposed final dividend for the year ended 2 September 2023 to be considered by shareholders at the Annual General
Meeting is £2,683,285 being 2.85p per share, making a total for the year of 5.2p (2022: 5.2p). Shares held in treasury do not carry
entitlement to a dividend. The financial statements do not reflect this proposed final dividend as payable.
Carr's Group plc
| Annual Report and Accounts 2023
148
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
11 Earnings per ordinary share
Earnings per share are calculated by reference to a weighted average of 94,058,319 shares (2022: 93,873,465) in issue during
the year.
Adjusting items disclosed in note 5 that are charged or credited to profit do not relate to the underlying profitability of the Group.
The Board believes adjusted profit before these items provides a useful measure of business performance. Therefore an adjusted
earnings per share is presented as follows:
2023
2022 (restated)1
Continuing operations
Earnings per share – basic
Adjusting items:
Amortisation of acquired intangible assets
Adjustments to contingent consideration
Restructuring/closure costs
Strategic review costs
Gain on acquisition of Afgritech
Cloud configuration and customisation costs – Group
Goodwill and other intangible assets impairment
Taxation effect of the above
Earnings per share – adjusted
Discontinued operations
Earnings per share – basic
Adjusting items:
Acquisition-related costs
(Profit)/loss on fair value measurement less costs to sell
Cloud configuration and customisation costs – Group
Cloud configuration and customisation costs – share of
associate
Taxation effect of the above
Non-controlling interest in the above
Earnings per share – adjusted
Total (basic)
Total (adjusted)
Earnings
£’000
Earnings
per share
pence
396
947
–
607
–
–
602
3,843
(559)
5,836
0.4
1.0
–
0.6
–
–
0.6
4.1
(0.5)
6.2
Earnings
£’000
6,042
940
(1,320)
–
455
(733)
113
4,219
(342)
9,374
(622)
(0.7)
(3,332)
–
(3)
–
–
–
–
(625)
(226)
5,211
–
–
–
–
–
–
(0.7)
(0.3)
5.5
20
10,518
974
365
(186)
(4,865)
3,494
2,710
12,868
Earnings
per share
pence
6.4
1.0
(1.4)
–
0.5
(0.8)
0.1
4.5
(0.3)
10.0
(3.5)
–
11.2
1.0
0.4
(0.2)
(5.2)
3.7
2.9
13.7
1 See note 39 for an explanation of the prior year restatements in relation to the loss recognised on the measurement to fair value less costs to sell in
respect of discontinued operations.
Carr's Group plc
| Annual Report and Accounts 2023
Overview
Strategic Report
Corporate Governance
Financial Statements
149
11 Earnings per ordinary share continued
For diluted earnings per share, the weighted average number of Ordinary Shares in issue is adjusted to assume conversion of all
dilutive potential Ordinary Shares. The potentially dilutive Ordinary Shares, where the exercise price is less than the average market
price of the Company’s Ordinary Shares during the year, are disclosed in note 31.
2023
Earnings
£’000
Weighted
average number
of shares
Earnings
per share
pence
Earnings
£’000
2022 (restated)1
Weighted
average number
of shares
Earnings
per share
pence
Continuing operations
Earnings per share
Effect of dilutive securities:
Share Save Scheme
Long Term Incentive Plan
396
94,058,319
–
–
669,321
45,643
Diluted earnings per share
396
94,773,283
Discontinued operations
0.4
–
–
0.4
6,042
93,873,465
–
–
933,331
326,866
6,042
95,133,662
Earnings per share
(622)
94,058,319
(0.7)
(3,332)
93,873,465
Effect of dilutive securities:
Share Save Scheme
Long Term Incentive Plan
–
–
669,321
45,643
Diluted earnings per share
(622)
94,773,283
Total (diluted)
(226)
94,773,283
–
–
(0.7)
(0.3)
–
–
933,331
326,866
(3,332)
95,133,662
2,710
95,133,662
6.4
–
–
6.4
(3.5)
–
–
(3.5)
2.9
2023
2022
Adjusted
earnings
£’000
Weighted
average number
of shares
Earnings
per share
pence
Adjusted
earnings
£’000
Weighted
average number
of shares
Earnings
per share
pence
5,836
94,773,283
6.2
9,374
95,133,662
9.9
Continuing operations
Diluted adjusted earnings
per share
Discontinued operations
Diluted adjusted earnings
per share
Total (diluted adjusted)
5,211
94,773,283
(625)
94,773,283
(0.7)
5.5
3,494
95,133,662
12,868
95,133,662
3.7
13.6
1 See note 39 for an explanation of the prior year restatements in relation to the loss recognised on the measurement to fair value less costs to sell in
respect of discontinued operations.
Carr's Group plc
| Annual Report and Accounts 2023
150
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
12 Goodwill and other intangible assets
Know-how,
technology and
development
costs
£’000
Group
Brands,
patents and
trademarks
£’000
Goodwill
£’000
Customer
relationships
£’000
Contract
backlog
£’000
Software
£’000
Total
£’000
Cost
At 29 August 2021
Exchange differences
Additions
34,101
1,553
–
3,392
2,716
–
–
16
334
(143)
Transferred to assets held for sale
(5,610)
(156)
At 3 September 2022
Exchange differences
Additions
Transferred to contract assets
30,044
3,236
2,923
(901)
–
–
–
–
–
(15)
164
(145)
2,928
260
5
–
3,193
(147)
2
–
222
42
–
–
264
(23)
–
–
837
44,196
7
3
–
1,878
342
(5,909)
847
40,507
(9)
23
–
(1,095)
189
(145)
At 2 September 2023
29,143
3,236
2,927
3,048
241
861
39,456
Accumulated amortisation and
impairment
At 29 August 2021
Exchange differences
Charge for the year
Impairment
Transferred to assets held for sale
At 3 September 2022
Exchange differences
Charge for the year
Impairment
At 2 September 2023
Net book amount
At 28 August 2021
At 3 September 2022
At 2 September 2023
2,541
1,410
1,466
1,095
–
–
4,219
(325)
6,435
(19)
–
3,566
9,982
–
295
–
(156)
1,549
–
295
–
6
456
–
(143)
1,785
(5)
440
–
121
235
–
–
1,451
(77)
242
277
222
42
–
–
–
264
(23)
–
–
751
8
20
–
–
7,485
177
1,006
4,219
(624)
779
12,263
(9)
27
–
(133)
1,004
3,843
1,844
2,220
1,893
241
797
16,977
31,560
23,609
19,161
1,982
1,687
1,392
1,250
1,138
707
1,833
1,742
1,155
–
–
–
86
68
64
36,711
28,244
22,479
For the purpose of impairment testing, goodwill acquired in a business combination is allocated to cash-generating units that are
expected to benefit from the synergies of the combination.
The carrying value of goodwill has been allocated to the following cash-generating units:
Carrs Agriculture Ltd – UK feed blocks
Animal Feed Supplement, Inc.
Wälischmiller Engineering GmbH
NuVision Engineering, Inc.
Animax Ltd
NW Total Engineered Solutions Ltd
Carr's Group plc
| Annual Report and Accounts 2023
2023
£’000
2,068
20
4,009
8,654
–
4,410
19,161
2022
£’000
2,068
22
4,049
9,494
1,742
6,234
23,609
Overview
Strategic Report
Corporate Governance
Financial Statements
151
12 Goodwill and other intangible assets continued
Goodwill arising on the acquisition of overseas subsidiaries has been retranslated at the balance sheet date. Goodwill in respect of
Carrs Billington Agriculture (Sales) Ltd was transferred at 3 September 2022 to assets included in disposal group classified as held
for sale (note 9).
Goodwill is tested annually for impairment, or more frequently if there are indications that goodwill might be impaired. Goodwill is
tested for impairment by estimating future cash flows from the cash-generating units to which goodwill has been allocated and
discounting those cash flows to their present value. Each unit or group of units to which goodwill is allocated represents the lowest
level within the entity at which the goodwill is monitored for internal management purposes. The key assumptions in this calculation
are the levels of future cash flows, particularly in the perpetuity period, and the discount rate. Management estimates discount rates
using pre-tax rates that reflect current market assessments of the time-value of money and the risks specific to the cash-generating
units. Cash flows are estimated using the most recent performance information for the year to August 2024 and forecast information
for the four years to August 2028 based on medium-term business plans. Assumptions for long-term growth and pre-tax discount
rates used to discount the forecast cash flows for each specific cash-generating unit in both the current year and the prior year can be
found in the tables on the following page for significant cash-generating units. These assumptions range between 1.0% – 2.0% (2022:
0% – 3.3%) for long-term growth and pre-tax discount rates are in the range 14.14% – 15.59% (2022: 11.76% – 14.34%).
The Directors consider the assumptions adopted in calculating the cash flows to be consistent with historical performance and to
be reasonable given current market conditions.
Other than for the cash-generating units noted below, significant headroom exists and, based on the stress testing performed,
reasonable possible changes in the assumptions would not cause the carrying amount of the cash-generating units to equal or to
exceed their recoverable amount.
The performance of the Animax Ltd cash-generating unit has been below Board expectations in the year, and, in addition, a key
contract within the business is coming to its end and will not be renewed. While action has been taken to improve the performance
of the business, the challenging conditions in agriculture mean that the Board believes that the full remaining goodwill of £1.7m
in the business should be written off, together with £0.3m against the carrying value of other intangible assets, based on the
estimated recoverable amount of the cash-generating unit, which is below the carrying value of the assets. Given the recognition
of a full impairment against goodwill, and to gain comfort that no further impairment was required in addition to the £0.3m to other
non-current assets, sensitivity analysis over the pre-tax discount rate and short-term growth rate of earnings was performed. If
the pre-tax discount rate increased by 1 percentage point (“pp”) and, independently a reduction of 5pp was applied to short-term
annual growth in earnings before interest and tax, the carrying value would exceed the estimated recoverable amount of the cash-
generating unit by a further £0.4m and £nil respectively, indicating a potential further impairment to other non-current assets.
For NW Total Engineered Solutions Ltd cash-generating unit, the estimated recoverable amount of the cash-generating unit was
below the carrying value of assets by £1.8m and goodwill has been impaired by this value. The Directors have concluded that the
long-term prospects of the business are sufficient to hold the remaining goodwill of £4.4m. As the goodwill carrying value has
not been fully impaired, additional sensitivity analysis over the pre-tax discount rate and short-term growth rate of earnings was
performed. If the pre-tax discount rate increased by 1pp there would be an additional impairment of £0.7m and, independently, if
the short-term annual growth in earnings before interest and tax was reduced by 5pp there would be an additional impairment of
£0.1m.
For both the NuVision Engineering, Inc. and Wälischmiller Engineering GmbH cash-generating units, the estimated recoverable
amount of the cash-generating units exceeded their carrying value by £0.5m and £0.2m respectively and therefore the Directors
concluded that no impairment was required to either cash-generating unit; however the calculations are sensitive to changes
in key assumptions such as reasonably possible changes to the pre-tax discount rate and long-term growth rate. If the pre-
tax discount rate assumption was increased from 14.44% to 14.99% for NuVision Engineering, Inc. and from 14.66% to 14.81% for
Wälischmiller Engineering GmbH the recoverable amount for the cash-generating units would be reduced to a level equal to their
carrying value. If this higher pre-tax discount rate assumption was combined with a 1pp decrease in the long-term growth rate,
which although not management’s current expectation is considered to be reasonably possible, this would lead to an impairment
charge of £0.5m for NuVision Engineering, Inc. and £0.8m for Wälischmiller Engineering GmbH. Additionally, if a reduction of 5pp
was independently applied to short-term annual growth in earnings before interest and tax, this would lead to an impairment
charge of £0.1m and £0.2m respectively for the cash-generating units.
In all instances above, the short-term annual growth in earnings before interest and tax is the annual forecast growth over a three-
year period. The sensitivity of a 5pp reduction has been applied to each year’s growth rate and the sensitised earnings have been
included in the impairment model to determine the effect on headroom.
In the prior year an impairment was recognised against the carrying value of the goodwill in the Chirton profit centre (£2.5m) and
Wälischmiller Engineering GmbH (£1.7m) cash-generating units. In both cases the estimated recoverable amount of the cash-
generating units was below the carrying value of the assets. Details of headroom and sensitivity testing performed in the current
year on the remaining goodwill in the Wälischmiller Engineering GmbH cash-generating unit are shown above.
Amortisation and impairment charges are recognised within administrative expenses and have been highlighted separately within
adjusting items (note 5) where they relate to acquired intangible assets.
There is no goodwill or other intangible assets in the Company (2022: none).
Carr's Group plc
| Annual Report and Accounts 2023
152
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
12 Goodwill and other intangible assets continued
Significant cash-generating units
The table below shows the key assumptions and inputs that have been used in the impairment testing for goodwill with a
significant carrying value together with sensitised assumptions required to eliminate the headroom.
The change in long-term growth rates considered in the current year when compared to those used in the prior year reflects
expected growth rates in the developed economies in which our businesses operate. This generally results in a lower long-term
growth rate in the engineering sector and an increase in rates used in the agriculture cash-generating units.
Year ended 2 September 2023
Cash-generating unit
NuVision Engineering, Inc.
NW Total Engineered Solutions Ltd
Wälischmiller Engineering GmbH
Carrs Agriculture Ltd – UK feed blocks
Animax Ltd
Headroom
£m
Annual
growth in
EBIT1
%
Pre-tax
discount rate
%
Pre-tax
discount rate
(sensitised)2
%
Long-term
growth rate
%
Long-term
growth rate
(sensitised)2
%
Cash flows
(sensitised)3
%
0.5
–
0.3
14.1
–
10.2
23.9
34.5
4.8
–
14.44
15.59
14.66
14.94
14.14
14.99
N/A4
14.81
26.09
N/A5
2.0
2.0
2.0
2.0
1.0
1.3
N/A4
1.8
(16.9)
N/A5
(4.5)
N/A4
(1.1)
(48.4)
N/A5
1
Earnings before interest and tax. Annual growth in EBIT is calculated as the compounded annual growth rate over a period of three years commencing
from the year ended 2 September 2023. For the Animax Ltd cash-generating unit this calculation excludes the initial loss-making periods.
2 Rate required to eliminate headroom.
3 Percentage reduction required to cash flows to eliminate headroom.
4 For the NW Total Engineered Solutions Ltd CGU this sensitivity is not applicable because an impairment charge has already been recognised against
this CGU. Further details of sensitivities applied including potential further impairment can be found on page 151.
5 For the Animax Ltd CGU this sensitivity is not applicable because an impairment charge has already been recognised against this CGU. Further details
of sensitivities applied including potential further impairment can be found on page 151.
The table below shows the key assumptions and inputs that were used in the impairment testing for goodwill undertaken at the
prior year end. This table is presented for information purposes only and does not reflect current year assumptions or inputs.
Year ended 3 September 2022
Cash-generating unit
NuVision Engineering, Inc.
NW Total Engineered Solutions Ltd
Wälischmiller Engineering GmbH
Carr’s Engineering Ltd – Chirton profit
centre
Carrs Agriculture Ltd – UK feed blocks
Animax Ltd
Headroom
£m
Annual
growth in
EBIT6
%
Pre-tax
discount rate
%
Pre-tax
discount rate
(sensitised)7
%
Long-term
growth rate
%
Long-term
growth rate
(sensitised)7
%
Cash flows
(sensitised)8
%
8.0
5.9
–
–
13.0
2.3
(1.7)
63.2
9.8
62.7
(6.1)
45.5
11.89
12.35
14.34
13.33
12.24
11.76
17.53
17.98
N/A9
N/A9
19.71
15.70
3.3
3.1
2.9
0.0
0.2
0.2
(4.5)
(4.4)
N/A9
N/A9
(11.4)
(5.8)
(37.0)
(33.8)
N/A9
N/A9
(35.7)
(23.8)
6 Earnings before interest and tax. Annual growth in EBIT was calculated as the compounded annual growth rate over a period of three years commencing
from the year ended 3 September 2022. For the NW Total Engineered Solutions Ltd cash-generating unit this calculation excluded the initial loss-
making period.
7 Rate required to eliminate headroom.
8 Percentage reduction required to cash flows to eliminate headroom.
9 For the Wälischmiller Engineering GmbH CGU and the Chirton profit centre CGU this sensitivity is not applicable because an impairment charge has
already been recognised against these CGUs.
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13 Property, plant and equipment
Cost
At 29 August 2021
Exchange differences
Subsidiaries acquired
Additions
Transfers to right-of-use assets
Transfers from right-of-use assets
Transfers from inventories
Disposals
Reclassifications
Transferred to assets held for sale
At 3 September 2022
Exchange differences
Additions
Transfers to investment property
Transfers from right-of-use assets
Disposals
Reclassifications
At 2 September 2023
Accumulated depreciation and impairment
At 29 August 2021
Exchange differences
Charge for the year
Transfers to right-of-use assets
Transfers from right-of-use assets
Disposals
Transferred to assets held for sale
At 3 September 2022
Exchange differences
Charge for the year
Transfers to investment property
Transfers from right-of-use assets
Disposals
Reclassifications
At 2 September 2023
Net book amount
At 28 August 2021
At 3 September 2022
At 2 September 2023
Group
Company
Land and
buildings
£’000
Plant and
equipment
£’000
Assets in the
course of
construction
£’000
Total
£’000
Plant and
equipment
£’000
34,730
39,315
1,388
75,433
1,245
304
424
–
–
–
(1)
264
(7,164)
29,802
(775)
876
(4,080)
–
(1)
144
2,361
1,002
2,555
(99)
1,312
109
(610)
407
(10,384)
35,968
(1,471)
1,633
–
524
(308)
1,707
25,966
38,053
10,172
409
1,073
–
–
–
(2,017)
9,637
(261)
878
(1,447)
–
(1)
–
29,063
1,728
2,772
(5)
402
(541)
(8,245)
25,174
(1,057)
2,145
–
111
(169)
557
8,806
26,761
82
–
2,699
–
–
–
–
(671)
(1,253)
2,245
(96)
643
–
–
–
(1,294)
1,498
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
3,688
1,306
5,678
(99)
1,312
109
(611)
–
(18,801)
68,015
(2,342)
3,152
(4,080)
524
(309)
557
274
–
–
30
–
–
–
–
–
–
304
–
28
–
–
–
–
65,517
332
39,235
2,137
3,845
(5)
402
(541)
(10,262)
34,811
(1,318)
3,023
(1,447)
111
(170)
557
189
–
27
–
–
–
–
216
–
30
–
–
–
–
35,567
246
24,558
20,165
17,160
10,252
10,794
11,292
1,388
2,245
1,498
36,198
33,204
29,950
85
88
86
Transfers to investment property relate to properties leased by companies in the continuing Group to Carrs Billington Agriculture
(Sales) Ltd which have been reclassified as investment properties when the company was sold on 26 October 2022.
Transfers from right-of-use assets represent finance leased assets that became owned assets on maturity of the lease term.
Carr's Group plc
| Annual Report and Accounts 2023
154
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
13 Property, plant and equipment continued
Freehold land amounting to £1.4m (2022 continuing operations: £2.3m) has not been depreciated.
Depreciation is recognised within the consolidated income statement as shown below:
Cost of sales
Distribution costs
Administrative expenses
Discontinued operations
Group
Company
2023
£’000
2,180
–
843
–
3,023
2022
£’000
1,913
3
862
1,067
3,845
2023
£’000
2022
£’000
–
–
30
–
30
–
–
27
–
27
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14 Right-of-use assets and lease liabilities
Amounts recognised in the balance sheet
The balance sheet shows the following amounts relating to leases:
Lease assets
Cost
At 29 August 2021
Exchange differences
Additions
Modifications
Transfers to property, plant and equipment
Transfers from property, plant and equipment
Disposals
Transferred to assets held for sale
At 3 September 2022
Exchange differences
Additions
Modifications
Transfers to property, plant and equipment
Disposals
At 2 September 2023
Accumulated depreciation
At 29 August 2021
Exchange differences
Charge for the year
Transfers to property, plant and equipment
Transfers from property, plant and equipment
Disposals
Transferred to assets held for sale
At 3 September 2022
Exchange differences
Charge for the year
Transfers to property, plant and equipment
Disposals
At 2 September 2023
Net book amount
At 28 August 2021
At 3 September 2022
At 2 September 2023
Group
Company
Land and
buildings
£’000
Plant, equipment
and vehicles
£’000
Total
£’000
Plant, equipment
and vehicles
£’000
10,452
11,644
22,096
189
315
911
–
–
(304)
(4,701)
6,862
(106)
–
294
–
(157)
6,893
2,157
125
1,192
–
–
(113)
(1,222)
2,139
(91)
703
–
(149)
7
2,413
2
(1,312)
99
(167)
(7,929)
4,757
(9)
559
1
(524)
(203)
4,581
3,162
5
1,716
(402)
5
(88)
(3,141)
1,257
(4)
605
(111)
(198)
2,602
1,549
8,295
4,723
4,291
8,482
3,500
3,032
196
2,728
913
(1,312)
99
(471)
(12,630)
11,619
(115)
559
295
(524)
(360)
11,474
5,319
130
2,908
(402)
5
(201)
(4,363)
3,396
(95)
1,308
(111)
(347)
4,151
16,777
8,223
7,323
478
–
109
–
–
–
(11)
–
576
–
72
–
–
(38)
610
132
–
114
–
–
(6)
–
240
–
127
–
(38)
329
346
336
281
Transfers to property, plant and equipment represent finance leased assets that became owned assets on maturity of the
lease term.
Carr's Group plc
| Annual Report and Accounts 2023
156
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
14 Right-of-use assets and lease liabilities continued
Lease liabilities
Current liabilities
Non-current liabilities
Group
Company
2023
£’000
1,264
5,559
6,823
2022
£’000
1,416
6,128
7,544
2023
£’000
126
167
293
The remaining contractual maturities of the lease liabilities, which are gross and undiscounted, are as follows:
Lease liabilities
Less than one year
One to two years
Two to three years
Three to four years
Four to five years
More than five years
Amounts recognised in the income statement
The income statement shows the following amounts relating to leases:
Depreciation
Loss/(profit) on disposal
Interest expense
Group
Company
2023
£’000
1,446
1,344
848
577
509
4,235
8,959
2022
£’000
1,611
1,230
1,117
720
515
4,636
9,829
2023
£’000
139
126
29
7
–
–
301
Continuing Group
Company
2023
£’000
1,308
4
223
1,535
2022
£’000
1,276
(5)
240
1,511
2023
£’000
127
–
8
135
2022
£’000
113
231
344
2022
£’000
120
112
111
12
–
–
355
2022
£’000
114
(3)
8
119
Amounts in respect of short-term leases and low-value assets are immaterial and have therefore not been included in the table
above. There is no expense recognised in the income statement in respect of variable lease payments that are not included in the
measurement of the lease liabilities.
The total continuing Group cash outflow for leases was £1,768,000 (2022: continuing Group £1,790,000). The total Company cash
outflow for leases was £131,000 (2022: £113,000).
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15 Investment property
Group
Cost
At 29 August 2021
Disposals
At 3 September 2022
Transfers from property, plant and equipment
At 2 September 2023
Accumulated depreciation
At 29 August 2021
Charge for the year
Disposals
At 3 September 2022
Charge for the year
Transfers from property, plant and equipment
At 2 September 2023
Net book amount
At 28 August 2021
At 3 September 2022
At 2 September 2023
Total
£’000
299
(144)
155
4,080
4,235
147
5
(71)
81
67
1,447
1,595
152
74
2,640
Transfers from property, plant and equipment of £4,080,000 (cost) and £1,447,000 (accumulated depreciation) relate to properties
leased by companies in the continuing Group to Carrs Billington Agriculture (Sales) Ltd which have been reclassified as investment
properties when the company was sold on 26 October 2022.
The fair value of investment properties at 2 September 2023 is £5,645,000 (2022: £250,000). The fair value of properties transferred
from property, plant and equipment during the year is £4,795,000 which were valued by independent professionally qualified
valuers in April 2022 and June 2022. Existing investment properties were valued by independent professionally qualified valuers in
either 2022 or October 2016. The Directors are satisfied that there has been no significant change in fair value since that date.
There is no investment property in the Company (2022: none).
Details of income and expenses included within Group operating profit in respect of investment property can be found in note 4.
Carr's Group plc
| Annual Report and Accounts 2023
158
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
16 Investments
Group
Cost
At 29 August 2021
Exchange difference
Share of post-tax result – continuing operations
Share of post-tax result – discontinued operations
Share of (losses)/gains recognised within other comprehensive income
Dividend paid by joint ventures
Disposals
Transferred to assets held for sale
At 3 September 2022
Exchange difference
Share of post-tax result – continuing operations
Dividend paid by joint ventures
Disposals
At 2 September 2023
Accumulated provision for impairment
At 29 August 2021
Transfer of impairment to loan receivables due from joint ventures
Disposals
At 3 September 2022 and at 2 September 2023
Net book amount
At 28 August 2021
At 3 September 2022
At 2 September 2023
Associate
£’000
Joint ventures
£’000
Other
investments
£’000
Total
£’000
14,268
10,796
81
25,145
–
–
1,165
(215)
–
–
(15,218)
–
–
–
–
–
–
–
–
–
–
14,268
–
–
758
840
486
153
(2,854)
(1,244)
(2,870)
6,065
(498)
1,441
(907)
–
6,101
1,314
(70)
(1,244)
–
9,482
6,065
6,101
5
–
–
–
–
–
(45)
41
(3)
–
–
(2)
36
9
–
–
9
72
32
27
763
840
1,651
(62)
(2,854)
(1,244)
(18,133)
6,106
(501)
1,441
(907)
(2)
6,137
1,323
(70)
(1,244)
9
23,822
6,097
6,128
Other investments comprise shares in several private limited companies.
In the prior year the Group acquired the remaining 50% interest in Afgritech Ltd (note 32) and the financial position and
performance of the business together with its 100% owned subsidiary Afgritech LLC was fully consolidated from the date of
acquisition. The Group’s joint venture interest was effectively disposed of at this acquisition date with an exceptional gain of
£197,000, being the difference between the carrying value and fair value of the joint venture interest, recognised. This gain was
included as an adjusting item (note 5) together with foreign exchange gains of £559,000 that were recycled from the foreign
exchange reserve to the income statement on disposal, acquisition-related costs of £27,000 and negative goodwill of £4,000.
In the prior year £70,000 was transferred from the provision for impairment to the provision for impairment against the loan
receivable from Afgritech Ltd prior to acquisition of the remaining 50% shareholding.
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16 Investments continued
Company
Cost
At 29 August 2021
Subsidiary acquired
Recapitalisation
Transfer from joint venture to subsidiary
Transferred to assets held for sale
Share-based payment charge in respect of employees of subsidiary
undertakings
At 3 September 2022
Capital contribution
Share-based payment credit in respect of employees of subsidiary
undertakings
At 2 September 2023
Accumulated provision for impairment
At 29 August 2021
Transfer from loan receivables on recapitalisation
Transfer from joint venture to subsidiary
At 3 September 2022 and at 2 September 2023
Net book amount
At 28 August 2021
At 3 September 2022
At 2 September 2023
Shares in
subsidiaries
£’000
Associate
£’000
Joint
ventures
£’000
36,454
1,020
–
1,774
(337)
101
39,012
817
(203)
39,626
3,993
–
876
4,869
32,461
34,143
34,757
245
–
–
–
(245)
–
–
–
–
–
–
–
–
–
245
–
–
Total
£’000
36,971
1,020
1,674
–
(582)
101
272
–
1,674
(1,774)
–
–
172
39,184
–
–
817
(203)
172
39,798
100
776
(876)
–
172
172
172
4,093
776
–
4,869
32,878
34,315
34,929
The capital contribution in the year relates to the difference between the face value of an interest free loan provided to a subsidiary
and the amount initially recognised in accordance with IFRS 9.
In the prior year the subsidiary acquired of £1,020,000 was the cash paid to acquire the remaining 50% shareholding in Afgritech
Ltd (note 32) and the recapitalisation of £1,674,000 was the capitalisation of the loan receivable due from Afgritech Ltd prior to
the acquisition of the additional 50% shareholding. The provision for impairment of £776,000 against the loan receivable due from
Afgritech Ltd was transferred to investments on recapitalisation.
Amounts transferred to assets held for sale in the prior year was the Company’s cost of investment in Carrs Billington Agriculture
(Sales) Ltd and Carrs Billington Agriculture (Operations) Ltd.
Carr's Group plc
| Annual Report and Accounts 2023
160
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
17 Investment in associate
The associated undertaking Carrs Billington Agriculture (Operations) Ltd was disposed of on 26 October 2022. Prior to this date the
investment in associate was:
Group and Company
Name
Proportion of
shares held
Ordinary
%
Country of
incorporation
Country of
operation
Activity
Carrs Billington Agriculture (Operations) Ltd
49
England
UK
Manufacture of animal feed
The investment in Carrs Billington Agriculture (Operations) Ltd was held directly by the Company. The registered office of Carrs
Billington Agriculture (Operations) Ltd is Cunard Building, Water Street, Liverpool L3 1EL.
The Group did not have the ability to control the financial and operating policies of the associate. The Group had a 49%
shareholding and a 33% representation on the Board of Directors of Carrs Billington Agriculture (Operations) Ltd prior to disposal on
26 October 2022.
The associate is accounted for using the equity method.
At the prior year end Carrs Billington Agriculture (Operations) Ltd had capital commitments of £2,100,000 and no contingent liabilities.
At the prior year end the investment in associate was included within assets of disposal group held for sale (note 9). The Group’s
share of its post-tax results are included within profit for the year from discontinued operations (note 9). The aggregate amounts
relating to the associate, of which the Group recognises 49%, are:
Total assets
Total liabilities
Revenues
Profit after tax
18 Interest in joint ventures
The joint ventures at 2 September 2023 are:
2023
£’000
–
–
23,869
772
2022
£’000
57,893
(26,836)
167,177
2,378
Group
Name
Equity interest held
%
Country of
incorporation
Country of
operation
Activity
Crystalyx Products GmbH
Gold-Bar Feed Supplements LLC
ACC Feed Supplement LLC
Silloth Storage Company Ltd
50
50
50
50
Germany1
Germany
Manufacture of animal feed blocks
USA2
USA3
England4
USA
USA
UK
Manufacture of animal feed blocks
Manufacture of animal feed blocks
Storage of molasses
1 Registered Office address: Industrieweg 110, 48155 Munster, Germany.
2 Registered Office address: 783 Eagle Boulevard, Shelbyville, Tennessee 37160, USA.
3 Registered Office address: 5101 Harbor Drive, Sioux City, Iowa 51111, USA.
4 Registered Office address: 5c Business Park, 1 Concorde Drive, Clevedon, Bristol BS21 6UH.
Crystalyx Products GmbH and Silloth Storage Company Ltd have a 31 December accounting year end.
The Company directly holds the interest in Crystalyx Products GmbH. Animal Feed Supplement, Inc. directly holds the interest
in Gold-Bar Feed Supplements LLC and ACC Feed Supplement LLC. Carrs Agriculture Ltd directly holds the interest in Silloth
Storage Company Ltd.
The joint venture Bibby Agriculture Ltd was disposed of on 26 October 2022 and is therefore not included in the table above. Its
principal activity was that of the sale of agricultural products. The 50% equity shareholding was held directly by Carrs Billington
Agriculture (Sales) Ltd, which was also disposed of on 26 October 2022. Bibby Agriculture Ltd is incorporated in England and its
registered office address is 16 Montgomery Way, Rosehill Industrial Estate, Carlisle, Cumbria CA1 2UY. At the prior year end the
investment in Bibby Agriculture Ltd was included within assets of disposal group held for sale (note 9). The Group’s share of its
post-tax results are included within profit for the year from discontinued operations (note 9).
Joint ventures are accounted for using the equity method.
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18 Interest in joint ventures continued
At the year end the joint ventures had capital commitments of £252,000 (2022: £107,000). No contingent liabilities exist within the
joint ventures.
The aggregate amounts included in the financial statements relating to the Group’s share of joint ventures are:
Non-current assets (2022: including £705k classified as held for sale)
Current assets (2022: including £4,181k classified as held for sale)
Current liabilities (2022: including £(1,990)k classified as held for sale)
Non-current liabilities (2022: including £(26)k classified as held for sale)
Income
Expenses
Net finance cost
2023
£’000
4,607
4,372
(2,756)
(139)
32,319
(30,494)
(107)
2022
£’000
5,826
8,164
(5,046)
(26)
46,640
(45,052)
(53)
Goodwill of £17,000 arose on the investment in Silloth Storage Company Ltd. This is included in the carrying amount of the Group’s
interest in joint ventures and is not shown as a separate asset.
19 Investment in subsidiary undertakings
Name
Company
registration
number9
Ordinary
Shares held
%
Country of
incorporation
Country of
operation
Activity
Carrs Agriculture Ltd9
00480342
100
England1
UK Manufacture of animal feed/mineral
blocks and ingredients of animal
feed
Animal Feed Supplement, Inc.
Carr’s Supplements (NZ) Ltd
Carr’s Engineering Ltd
Wälischmiller Engineering GmbH
Carr’s Engineering (US), Inc.
NuVision Engineering, Inc.
Carrs Properties Ltd9
Carr’s International Finance Ltd9
Animax Ltd9
Carr’s Supplements (ROI) Ltd
Afgritech Ltd9
Afgritech LLC
00088157
10888476
01604213
05259304
100
100
100
100
100
100
100
100
100
100
100
100
USA2
USA
Manufacture of animal feed blocks
New Zealand3
New Zealand
Distributor of animal feed blocks
England1
Germany4
USA5
USA5
England1
England1
England6
UK
Germany
USA
USA
UK
UK
UK
Engineering
Engineering
Holding company
Engineering
Property holding
Finance company
Manufacture of animal health
products
Ireland7
Ireland
Distributor of animal feed blocks
England1
USA8
and health products
Holding company
Producers of ingredients of animal
feed
Engineering
UK
USA
UK
NW Total Engineered Solutions Ltd9 02953309
100
England1
1 Registered Office address: Old Croft, Stanwix, Carlisle, Cumbria CA3 9BA.
2 Registered Office address: 101 Roanoke Avenue, Poteau, Oklahoma 74953, USA.
3 Registered Office address: 123 Burnett Street, Ashburton, 7700, New Zealand.
4 Registered Office address: Schießstattweg 16, 88677 Markdorf, Germany.
5 Registered Office address: 2403 Sidney Street, Suite 700, Pittsburgh, Pennsylvania 15203, USA.
6 Registered Office address: Shepherds Grove West, Stanton, Bury St Edmunds, Suffolk IP31 2AR.
7 Registered Office address: Trinity House, Charleston Road, Ranelagh, Dublin 6, Ireland.
8 Registered Office address: 810 Waterman Drive, Watertown, New York 13601, USA.
9 UK subsidiaries that have taken advantage of the audit exemption set out within section 479A of the Companies Act 2006 for the year ended
2 September 2023. The Company will guarantee the debts and liabilities of the above UK subsidiary undertakings at the balance sheet date in
accordance with section 479C of the Companies Act 2006. The Company has assessed the probability of loss under the guarantee as remote.
Carr's Group plc
| Annual Report and Accounts 2023
162
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
19 Investment in subsidiary undertakings continued
Dormant subsidiaries are listed on page 197 of this Annual Report and Accounts.
Investments in the subsidiaries listed above are held directly by the Company with the following exceptions: Carr’s Engineering Ltd
holds 100% of the investment in Wälischmiller Engineering GmbH and NW Total Engineered Solutions Ltd; Carrs Agriculture Ltd
holds 100% of the investment in Carr’s Supplements (NZ) Ltd and Animax Ltd; Carr’s Engineering (US), Inc. holds 100% of the
investment in NuVision Engineering, Inc.; and Afgritech Ltd holds 100% of the investment in Afgritech LLC.
The subsidiary company Carrs Billington Agriculture (Sales) Ltd was disposed of on 26 October 2022 and is therefore not included
in the table above. The parent Company held 51% of the ordinary shares in the company and its principal activity was that of an
agricultural retailer. The company is incorporated in England and its registered office address is 16 Montgomery Way, Rosehill
Industrial Estate, Carlisle, Cumbria CA1 2UY. At the prior year end the assets and liabilities of Carrs Billington Agriculture (Sales)
Ltd were included within net assets of disposal group held for sale (note 9). Results are included within profit for the year from
discontinued operations (note 9).
Non-controlling interests in subsidiary undertakings
The following tables summarise the information relating to Carrs Billington Agriculture (Sales) Ltd, where there is a material non-
controlling interest. The amounts presented are before inter-company eliminations with other companies within the Group. The
non-controlling interest in the subsidiary was 49% in both the current and prior year.
Balance sheet
Non-current assets
Current assets
Non-current liabilities
Current liabilities
Net assets
Net assets attributable to non-controlling interest
Income statement and statement of comprehensive income
Revenue
(Loss)/profit after tax
(Loss)/profit after tax allocated to non-controlling interest
There is no other comprehensive income in the current or prior year.
Statement of cash flows
Cash flows from operating activities
Cash flows from investment activities
Cash flows from financing activities
Net (decrease)/increase in cash and cash equivalents
During the year dividends of £nil (2022: £nil) were paid to the non-controlling interest.
2023
£’000
–
–
–
–
–
–
2023
£’000
54,270
(1,180)
(578)
2023
£’000
(2,492)
(487)
(9,669)
(12,648)
2022
£’000
24,145
113,687
(8,008)
(95,621)
34,203
16,759
2022
£’000
343,844
2,330
1,142
2022
£’000
(7,323)
(1,845)
19,436
10,268
Carr's Group plc
| Annual Report and Accounts 2023
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Corporate Governance
Financial Statements
163
20 Deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:
Group
Accelerated tax depreciation
Employee benefits
Other
Net deferred tax
Included in:
Deferred tax assets
Deferred tax liabilities
Net deferred tax
2023
£’000
(3,266)
(1,329)
174
2022
£’000
(3,676)
(1,707)
548
(4,421)
(4,835)
26
(4,447)
(4,421)
213
(5,048)
(4,835)
Deferred tax net liabilities are expected to reverse after more than one year from the balance sheet date. Tax of £41,968 (2022:
£63,542) in respect of tax losses has not been recognised as a deferred tax asset in the Group balance sheet.
Other deferred tax assets and liabilities includes deferred tax on short-term timing differences, leases, rolled over capital gains,
trading losses, capital losses, business combinations and overseas deferred tax.
Movement in deferred tax during the year
Accelerated tax depreciation
Employee benefits
Other
At 4 September
2022
£’000
Exchange
differences
£’000
Recognised
in income
statement
£’000
Recognised
in other
comprehensive
income
£’000
Recognised in
equity
£’000
Included in
discontinued
operations
£'000
At 2 September
2023
£’000
(3,676)
(1,707)
548
(4,835)
80
–
(70)
10
330
(137)
(893)
(700)
–
515
341
856
–
–
(4)
(4)
–
–
252
252
(3,266)
(1,329)
174
(4,421)
Amounts recognised in equity comprise deferred tax related to share-based payments.
Movement in deferred tax during the prior year
At 29 August
2021
£’000
Exchange
differences
£’000
Recognised
in income
statement
£’000
Recognised
in other
comprehensive
income
£’000
Recognised in
equity
£’000
Transferred to
disposal group
£’000
At 3 September
2022
£’000
Accelerated tax depreciation
Employee benefits
Other
(3,201)
(2,343)
223
(5,321)
(146)
–
77
(69)
(563)
(8)
692
121
–
644
–
644
–
–
(33)
(33)
Company
Accelerated tax depreciation
Employee benefits
Other
Net deferred tax
Included in:
Deferred tax liabilities
234
–
(411)
(177)
2023
£’000
17
(1,329)
457
(855)
(3,676)
(1,707)
548
(4,835)
2022
£’000
20
(1,707)
506
(1,181)
(855)
(1,181)
Other deferred tax assets and liabilities includes deferred tax on short-term timing differences, leases and trading losses.
The Company has no unrecognised tax losses (2022: none).
Carr's Group plc
| Annual Report and Accounts 2023
164
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
20 Deferred tax assets and liabilities continued
Movement in deferred tax during the year
Accelerated tax depreciation
Employee benefits
Other
At 4 September
2022
£’000
Recognised
in income
statement
£’000
Recognised
in other
comprehensive
income
£’000
20
(1,707)
506
(1,181)
(3)
(137)
(45)
(185)
–
515
–
515
Recognised
in equity
£’000
At 2 September
2023
£’000
–
–
(4)
(4)
17
(1,329)
457
(855)
Amounts recognised in equity comprise deferred tax related to share-based payments.
Movement in deferred tax during the prior year
Accelerated tax depreciation
Employee benefits
Other
21 Inventories
Group
Raw materials and consumables
Work in progress
Finished goods and goods for resale
At 29 August
2021
£’000
28
(2,343)
114
(2,201)
Recognised
in income
statement
£’000
Recognised
in other
comprehensive
income
£’000
(8)
(8)
415
399
–
644
–
644
Recognised
in equity
£’000
At 3 September
2022
£’000
–
–
(23)
(23)
2023
£’000
16,664
2,055
7,894
26,613
20
(1,707)
506
(1,181)
2022
£’000
15,352
3,074
8,564
26,990
Inventories are stated after a provision for impairment of £646,000 (2022: £833,000). The amount recognised as an expense in the
year in respect of the write-down of inventories is £321,000 (2022 continuing operations: £294,000). The amount recognised as a
credit in the year in respect of reversals of write-downs of inventories is £427,000 (2022 continuing operations: £117,000) and the
amount utilised in the year was £80,000 (2022 continuing operations: £49,000).
The cost of inventories recognised as an expense and included in cost of sales is £110,399,000 (2022 continuing operations:
£94,392,000).
The Company has no inventories (2022: none).
Carr's Group plc
| Annual Report and Accounts 2023
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Corporate Governance
Financial Statements
165
22 Contract balances
The timing of revenue recognition, billings and cash collection results in trade receivables (billed amounts), contract assets
(unbilled amounts) and customer advances and deposits (contract liabilities) on the Group’s balance sheet. For services in
which revenue is earned over time, amounts are billed in accordance with contractual terms, either at periodic intervals or upon
achievement of contractual milestones. The timing of revenue recognition is measured in accordance with the progress of delivery
on a contract which could either be in advance or in arrears of billing, resulting in either a contract asset or a contract liability.
Contract assets
At the beginning of the year
Exchange differences
Transfers from contract assets recognised at the beginning of the year to receivables
Increase related to services provided in the year
At the end of the year
Included within:
Current assets
Non-current assets
Contract liabilities
At the beginning of the year
Exchange differences
Revenue recognised against contract liabilities at the beginning of the year
Increase due to cash received, excluding any amounts recognised as revenue during the year
At the end of the year
2023
£’000
7,880
(138)
(6,335)
6,508
7,915
7,915
–
7,915
2023
£’000
2,426
(95)
(2,372)
5,235
5,194
2022
£’000
7,514
227
(6,358)
6,497
7,880
7,564
316
7,880
2022
£’000
3,312
215
(2,889)
1,788
2,426
The Group has assessed expected credit losses and the loss allowance for contract balances as immaterial. The Company has no
contract assets or contract liabilities (2022: none).
Contact liabilities at the end of the current year are significantly higher than at the prior year end. The Engineering division has seen
a significant uplift in order uptake during the year, including a £1.5m contract in the emerging nuclear medicine sector and a £10m
contract for the UK’s National Nuclear Laboratory, the largest single contract signed by Wälischmiller Engineering GmbH. As a
result of the significant increase in orders, and work commencing on those orders, customer advances received in the year have
also increased as the contracts move through their life cycle and satisfy milestone targets.
Carr's Group plc
| Annual Report and Accounts 2023
166
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
23 Trade and other receivables
Current:
Trade receivables
Less: provision for impairment of trade receivables
Trade receivables – net
Amounts owed by Group undertakings (note 37)
Amounts owed by other related parties (note 37)
Other taxes and social security receivable
Other receivables
Prepayments
Non-current:
Amounts owed by Group undertakings (note 37)
Other receivables
Group
Company
2023
£’000
2022
£’000
17,385
(290)
14,397
(817)
17,095
13,580
2023
£’000
895
–
895
2022
£’000
–
–
–
–
15
741
4,538
2,203
24,592
–
21
21
–
194
1,071
2,708
1,462
19,015
–
23
23
3,320
1,336
2
–
4,355
394
8,966
51
481
863
397
3,128
32,797
34,208
–
–
32,797
34,208
Other receivables for both the Group and the parent Company includes £4.0m deferred consideration in respect of the disposal of
the Carr's Billington Agricultural business, which was deferred until the first anniversary of the disposal date.
The movement in the provision for impaired trade receivables consists of increases for additional provisions offset by receivables
written off and unused provision released back to the consolidated income statement. The provision is utilised when there is no
expectation of recovering additional cash.
During the year, for continuing operations, a charge of £114,000 (2022: a credit of £136,000) has been recognised within
administrative expenses in the consolidated income statement and £630,000 (2022: £21,000) has been utilised in respect of the
movement in provision for impairment of trade receivables.
For all other receivables presented above, the Group has assessed expected credit losses and the loss allowance as immaterial.
There are no interest-bearing, non-trading amounts owed by Group undertakings within current trade and other receivables in
either the current or prior period.
Interest-bearing, non-trading amounts owed by Group undertakings within non-current receivables carry interest at 4.50%, 6.25%
or Bank of England base rate + 2.50%. There is one non-interest bearing loan with a face value of £7.4m which is recognised at
fair value based on a market rate of interest. These interest-bearing and non-interest bearing amounts are unsecured and have
remaining terms of 1.3 – 1.5 years.
Group
The ageing of trade receivables is as follows:
Not past due
Past due 1 – 30 days
Past due 31 – 60 days
Past due 61 – 90 days
Past due 91 – 120 days
Past 121 days
2023
2022
Gross
£’000
Impairment
£’000
Gross
£’000
Impairment
£’000
13,249
2,065
677
324
522
548
17,385
(57)
11,799
–
–
(15)
(8)
(210)
(290)
839
390
185
146
1,038
14,397
(9)
–
(13)
(12)
(26)
(757)
(817)
Carr's Group plc
| Annual Report and Accounts 2023
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Strategic Report
Corporate Governance
Financial Statements
167
23 Trade and other receivables continued
Company
The ageing of trade receivables is as follows:
Not past due
Past due 1 – 30 days
Past due 31 – 60 days
Past due 61 – 90 days
Past due 91 – 120 days
2023
2022
Gross
£’000
Impairment
£’000
Gross
£’000
Impairment
£’000
317
67
52
75
384
895
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
In relation to trade receivables, the major source of estimation uncertainty is the recoverable value of those receivables. The
judgements applied to this include the credit quality of customers, taking into account their financial positions, past experiences
and other relevant factors. Individual customer credit limits are imposed based on these factors, and provisions for impairment are
made using those judgements. Provisions for impairment are reviewed monthly by divisional management.
Trade receivables are assessed by management for credit risk and are considered past due when a counterparty has failed to
make a payment when that payment was contractually due. Management assesses trade receivables that are past the contracted
due date by the ageing periods as presented in the tables above, consistent with how it views the credit risk of trade receivables.
A default is determined to have occurred if the Group becomes aware of evidence that it will not receive all contractual cash flows
that are due.
The maximum exposure to credit risk at the year end is the carrying value, net of provision for impairment, of each receivable. The
Group and Company do not hold any significant collateral as security (2022: none).
The carrying value of trade receivables is denominated in
the following currencies:
Sterling
US Dollar
Euro
New Zealand Dollar
24 Current tax assets
Corporation tax recoverable
Group taxation relief
Group
Company
2023
£’000
2022
£’000
2023
£’000
2022
£’000
12,329
2,303
1,669
794
7,857
2,556
2,369
798
895
–
–
–
17,095
13,580
895
–
–
–
–
–
Group
Company
2023
£’000
3,895
–
2022
£’000
3,866
–
3,895
3,866
2023
£’000
2,063
639
2,702
2022
£’000
2,550
–
2,550
Carr's Group plc
| Annual Report and Accounts 2023
168
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
25 Cash and cash equivalents and bank overdrafts
Cash and cash equivalents per the balance sheet
23,123
22,515
13,443
12,726
Cash and cash equivalents of disposal group classified as assets held for
sale (note 9)
Bank overdrafts (note 27)
Cash and cash equivalents per the statement of cash flows
–
(12,354)
10,769
12,074
(9,734)
24,855
–
–
–
–
13,443
12,726
Group
Company
2023
£’000
2022
£’000
2023
£’000
2022
£’000
26 Trade and other payables
Current:
Trade payables
Amounts owed to Group undertakings (note 37)
Amounts owed to other related parties (note 37)
Other taxes and social security payable
Other payables
Accruals
Deferred income
Non-current:
Other payables
Deferred income
Group
Company
2023
£’000
2022
£’000
2023
£’000
8,232
10,886
–
44
2,036
1,090
4,802
352
–
105
1,019
1,393
7,592
5
588
809
–
877
170
948
–
16,556
21,000
3,392
–
71
71
313
23
336
–
–
–
2022
£’000
778
393
–
538
47
2,437
–
4,193
–
–
–
Amounts owed to Group undertakings and other related parties are interest free, unsecured and repayable on demand.
Deferred income includes deferred rental income of £400,000 (current: £347,000; non-current: £53,000) which was agreed with
the Billington Group as part of the sale process of the Carr's Billington Agricultural business. It also includes government grants
as follows:
At the beginning of the year
Amortisation in the year
At the end of the year
Included within:
Current liabilities
Non-current liabilities
Group
Company
2023
£’000
28
(5)
23
5
18
23
2022
£’000
60
(32)
28
5
23
28
2023
£’000
2022
£’000
–
–
–
–
–
–
–
–
–
–
–
–
Carr's Group plc
| Annual Report and Accounts 2023
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Strategic Report
Corporate Governance
Financial Statements
169
27 Borrowings
Current:
Bank overdrafts
Bank loans and other borrowings
Loans from Group undertakings (note 37)
Non-current:
Bank loans
Borrowings are repayable as follows:
On demand or within one year
In the second year
In the third to fifth years inclusive
Group
Company
2023
£’000
2022
£’000
12,354
1,360
–
9,734
3,000
–
13,714
12,734
5,206
5,206
13,714
5,206
–
23,805
23,805
12,734
1,704
22,101
2023
£’000
–
–
2,125
2,125
4,697
4,697
2,125
4,697
–
18,920
36,539
6,822
2022
£’000
–
1,153
260
1,413
22,757
22,757
1,413
1,154
21,603
24,170
Group and Company borrowings are shown in the balance sheet net of arrangement fees of £44,000 (2022: £100,000) of which £nil
(2022: £60,000) is deducted from current liabilities and £44,000 (2022: £52,000) is deducted from non-current liabilities.
The net borrowings are:
Borrowings as above
Cash and cash equivalents
Net (cash)/borrowings
Group
Company
2023
£’000
2022
£’000
2023
£’000
2022
£’000
18,920
36,539
6,822
24,170
(23,123)
(22,515)
(13,443)
(12,726)
(4,203)
14,024
(6,621)
11,444
The Company, together with certain subsidiaries, acts as guarantor on the bank loans.
Interest-bearing loans from Group undertakings within current borrowings carry interest at 4.50%.
The bank loans are repayable by instalments and the overdraft is repayable on demand.
Non-current bank loans includes a drawn down revolving credit facility of £4.7m (2022: £21.6m) which, following the extension of
the facility as noted below, is repayable in December 2026. At the year end the Group had £21.9m of undrawn revolving credit
facilities (2022 continuing operations: £5.0m).
Subsequent to the year end, and before the date of signing these financial statements, the Group extended its main borrowing
facility with its bankers. Further details of this post balance sheet event can be found in note 38.
Carr's Group plc
| Annual Report and Accounts 2023
170
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
28 Derivatives and other financial instruments
The Group’s activities expose it to a variety of financial risks. The Board reviews and agrees policies for managing its risk. These
policies have remained unchanged throughout the year.
Currency rate risk – financial instruments by currency
The Group is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the US dollar and
the Euro. Foreign exchange risk arises when future commercial transactions, or recognised assets or liabilities, are denominated in
a currency that is not the entity's functional currency.
The table below discloses balances across the Group that are denominated in a currency other than that entity's functional
currency. Inter-company balances have been excluded from the table.
Group
Assets
Current trade and other
receivables
Cash and cash equivalents
Liabilities
Current derivatives
Current trade and other
payables
Non-current borrowings
Sterling
£’000
US
Dollar
£’000
2023
Euro
£’000
NZ
Dollar
£’000
Total
£’000
Sterling
£’000
2022
Euro
£’000
US
Dollar
£’000
NZ
Dollar
£’000
Total
£’000
33
601
634
1
1,110
1,111
–
1
–
1
4
(11)
–
(7)
20
798
818
–
55
–
55
–
3
3
–
17
–
17
54
2,512
2,566
30
584
614
4
62
–
66
–
–
–
–
57
445
502
62
–
–
62
87
554
641
–
21
4,609
4,630
–
3
3
–
9
–
9
174
1,586
1,760
62
30
4,609
4,701
The table below discloses balances in the Company's balance sheet that are denominated in a currency other than the Company's
functional currency.
Company
Assets
Non-current receivables
Current trade and other receivables
Cash and cash equivalents
Liabilities
Current borrowings
Non-current borrowings
US Dollar
£’000
2023
Euro
£’000
Total
£’000
US Dollar
£’000
2022
Euro
£’000
Total
£’000
15,776
6,009
21,785
17,308
5,708
23,016
1,160
740
9
535
1,169
1,275
736
374
–
234
736
608
17,676
6,553
24,229
18,418
5,942
24,360
237
1,889
2,126
–
–
–
237
1,889
2,126
260
–
260
–
4,609
4,609
260
4,609
4,869
Other taxes and social security receivable and prepayments are excluded from trade and other receivables in the tables above as
they are not financial instruments. For this same reason, other taxes and social security payable is excluded from trade and other
payables. Deferred income is excluded as it is not a financial liability.
Carr's Group plc
| Annual Report and Accounts 2023
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Corporate Governance
Financial Statements
171
28 Derivatives and other financial instruments continued
Sensitivity analysis
The impact of a 10% weakening or strengthening in Sterling against balances across the Group that are denominated in a currency
other than that entity's functional currency is shown in the table below.
Impact on profit after taxation
Impact on total equity
2023
2022
10%
weakening
£’000
10%
strengthening
£’000
10%
weakening
£’000
10%
strengthening
£’000
(211)
(211)
178
178
218
218
(221)
(221)
This sensitivity analysis is not an indication of actual results, which may materially differ. For the purposes of this sensitivity analysis
all other variables have been held constant.
Interest rate risk
The Group finances its operations through a mixture of retained earnings and bank borrowings. The Group borrows in the desired
currencies at fixed and floating rates of interest.
Group borrowings
Bank overdrafts
Bank loans and other borrowings
Fixed rate
Floating rate
2023
2022
Weighted
average
effective
interest rate
%
6.98
6.56
Weighted
average
effective
interest rate
%
3.55
3.12
£’000
12,354
6,566
18,920
834
18,086
18,920
£’000
9,734
26,805
36,539
1,265
35,274
36,539
The Group’s floating rate financial liabilities bear interest determined as follows:
Bank overdrafts
US prime rate + 1.0% margin; US prime rate + 0.25% margin; Bank of England base rate
+ 1.7% margin
Bank loans and other borrowings
Bank of England base rate + 1.67%; Wall Street Journal prime rate – 1%
Company borrowings
Bank loans
Loans from Group undertakings
Floating rate
Interest free
2023
2022
Weighted
average
effective
interest rate
%
6.92
4.00
Weighted
average
effective
interest rate
%
3.25
–
£’000
4,697
2,125
6,822
6,585
237
6,822
£’000
23,910
260
24,170
23,910
260
24,170
The Company’s floating rate financial liabilities bear interest determined as follows:
Bank loans
Bank of England base rate + 1.67%
Carr's Group plc
| Annual Report and Accounts 2023
172
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
28 Derivatives and other financial instruments continued
Sensitivity analysis
The impact of a 1% decrease or increase in interest rates during the year is shown in the table below.
Impact on profit after taxation
Impact on total equity
2023
2022
1% decrease
£’000
1% increase
£’000
1% decrease
£’000
1% increase
£’000
124
124
(124)
(124)
228
228
(228)
(228)
This sensitivity analysis is not an indication of actual results, which may materially differ. For the purposes of this sensitivity analysis
all other variables have been held constant.
Liquidity risk
The Group’s policy throughout the year has been to maintain a mix of short and medium-term borrowings. Short-term flexibility
is achieved by overdraft facilities. In addition, it is the Group’s policy to maintain committed undrawn facilities in order to provide
flexibility in the management of the Group’s liquidity. The Group monitors daily cash balances and forecasts, together with net debt,
to ensure adequate headroom exists under its committed facilities.
The tables below analyse the Group and Company’s financial liabilities which will be settled on a net basis into relevant maturity
groupings based on the remaining period at the balance sheet date to the contractual maturity date. The amounts disclosed in the
tables are the contractual undiscounted cash flows which have been calculated using spot rates at the relevant balance sheet date.
Group
Bank overdrafts
Bank loans and other
borrowings
Derivatives
2023
Within
one year
£’000
12,354
One to
two years
£’000
–
Total
£’000
12,354
7,070
1,719
5,351
4
4
Two to
five years
£’000
–
–
–
–
–
–
2022
Within
one year
£’000
9,734
3,825
62
Total
£’000
9,734
28,655
62
19,976
19,976
313
–
One to
two years
£’000
Two to
five years
£’000
–
–
2,477
22,353
–
–
313
–
–
–
58,740
33,597
2,790
22,353
–
–
–
Trade and other payables
14,168
14,168
Other non-current liabilities
–
–
33,596
28,245
5,351
Company
Bank loans
Loans from Group
undertakings
Trade and other payables
2023
2022
Total
£’000
5,179
2,125
2,515
9,819
Within
one year
£’000
One to
two years
£’000
Two to
five years
£’000
328
4,851
2,125
2,515
4,968
–
–
4,851
–
–
–
–
Total
£’000
25,710
260
3,655
29,625
Within
one year
£’000
1,956
260
3,655
5,871
One to
two years
£’000
Two to
five years
£’000
1,913
21,841
–
–
–
–
1,913
21,841
The above tables exclude leases accounted for under IFRS 16. Details of the contractual undiscounted cash flows for leases under
IFRS 16 can be found in note 14.
Trade and other payables in the tables above exclude other taxes and social security which do not meet the definition of financial
liabilities under IFRS 7. Deferred income has also been excluded as it does not give rise to a contractual obligation to pay cash.
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28 Derivatives and other financial instruments continued
Borrowing facilities
The Group has various undrawn facilities. The undrawn facilities available at 2 September 2023, in respect of which all conditions
precedent had been met, were as follows:
Expiring in one year or less
Expiring within two and five years inclusive
2023
Floating rate
£’000
6,993
20,259
27,252
2022
Floating rate
£’000
20,720
5,391
26,111
Included in the table above for facilities expiring in one year or less is £nil (2022: £13,051,000) in respect of discontinued operations and
included within facilities expiring within two and five years inclusive is £nil (2022: £2,000,000) in respect of discontinued operations.
Undrawn facilities include overdraft facilities of £2.5m (2022: £2.5m) that are renewable on an annual basis.
The Company’s overdraft is within a Group facility and it is therefore not possible to determine the Company’s undrawn facilities at
the balance sheet date.
Capital risk management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to
provide returns for shareholders and benefits for other stakeholders and to maintain an efficient capital structure to optimise
the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
The Group monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt, excluding leases, divided by total
equity. Net debt is calculated as total borrowings (including current and non-current borrowings) as shown in the consolidated
balance sheet less cash and cash equivalents. Total equity is as shown in the consolidated balance sheet. At 2 September 2023,
the Group had net cash of £4.2m (2022: net debt of £14.0m). Gearing was 15.7% at the prior year end based on net debt (note 34) and
excluding net assets within the disposal group.
The Group monitors cash balances and net debt on a daily basis to ensure adequate headroom exists on banking facilities and that
it is compliant with banking covenants.
Fair value hierarchy
IFRS 13 requires financial instruments that are measured at fair value to be classified according to the valuation technique used:
• Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities
• Level 2 – inputs, other than level 1 inputs, that are observable for the asset or liability, either directly (i.e., as prices) or indirectly
(i.e., derived from prices)
• Level 3 – unobservable inputs
Transfers between levels are deemed to have occurred at the end of the reporting period. There were no transfers between levels
in the above hierarchy in the period.
All derivative financial instruments are measured at fair value using level 2 inputs. The Group’s bankers provide the valuations for
the derivative financial instruments at each reporting period end based on mark-to-market valuation techniques.
Contingent consideration is measured at fair value using level 3 inputs. Fair value is determined considering the expected payment,
which is discounted to present value. The expected payment is determined separately in respect of each individual earn-out
agreement taking into consideration the expected level of profitability of each acquisition. During the prior year all of the fair value
recognised at the year ended 28 August 2021 (£1,320,000) was released to the income statement and was included in note 5 as an
adjusting item.
Fair values of financial assets and liabilities
The fair values of Group and Company financial assets and liabilities are not materially different to book value.
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
28 Derivatives and other financial instruments continued
Derivative financial instruments
Hedge of net investment in foreign subsidiaries
In the prior year the Group hedged foreign denominated loans against its investment in foreign subsidiaries. A foreign exchange
pre-tax gain of £101,000 was recognised in equity in the prior year on translation of US Dollar denominated loans with a carrying
value of $1,608,000 to Sterling and a foreign exchange pre-tax loss of £41,000 was recognised in equity in the prior year on
translation of Euro denominated loans with a carrying value of €5,330,000 to Sterling. The Group’s net investment hedge was fully
effective in the prior year and therefore no gain or loss was recognised in the consolidated income statement.
Currency derivatives
The Group and Company use forward foreign currency contracts to manage exchange risk exposure. At the balance sheet date,
the fair value of outstanding forward foreign currency contracts are as below:
Group
At the beginning of the year
Exchange differences
Gains/(losses) during the year
At the end of the year – included within current liabilities
The Company has no forward foreign currency contracts (2022: none).
2023
2022
Fair
value
£’000
Contractual or
notional amount
£’000
(62)
–
58
(4)
(557)
50
304
(203)
Fair
value
£’000
–
(2)
(60)
(62)
Contractual or
notional amount
£’000
–
–
(557)
(557)
Fair value has been determined by reference to the value of equivalent forward foreign currency contracts at the balance
sheet date.
Gains and losses on currency-related derivatives are included within administrative expenses
29 Retirement benefits
The Group participates in the Carr's Group Pension Scheme which is a defined benefit pension scheme. Prior to the disposal,
on 26 October 2022, of the Carr's Billington Agricultural business it also participated in the Carrs Billington Agriculture Pension
Scheme, a defined benefit pension scheme.
Carr’s Group Pension Scheme (Group and Company)
The Company sponsors the Carr’s Group Pension Scheme and offered a defined contribution and a defined benefit section. The
assets of the scheme are held separately from those of the Group and are invested with independent investment managers.
From 1 September 2015 the defined contribution section was closed. Members of that section were enrolled in a new defined
contribution scheme, the Carr’s Group Retirement Savings Scheme (“Carr’s Group RSS”), set up under a Master Trust arrangement.
The defined benefit section of the scheme was previously closed to new members, and has closed to future accrual with effect
from 31 December 2015. Members of this section became entitled to become members of the Carr’s Group RSS from 1 January
2016. Following the disposal of the Carr's Billington Agricultural business the Company made a contribution of £0.4m into the
defined benefit section of the scheme (2022: £nil).
The following disclosures relate to the defined benefit section of the Carr’s Group Pension Scheme. The last full actuarial valuation
of this scheme was carried out by a qualified independent actuary as at 31 December 2020 and updated on an approximate basis
to 2 September 2023 by a qualified independent actuary.
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29 Retirement benefits continued
Major assumptions:
Inflation (RPI)
Inflation (CPI)
Rate of discount
Pension in payment increases:
RPI or 5.0% per annum if less
RPI or 5.0% per annum if less, minimum 3.0% per annum
2023
%
3.30
2.80
5.50
3.00
3.70
2022
%
3.50
2.80
4.50
3.20
3.80
The assumption for CPI has been derived by making an adjustment for the expected long-term gap between RPI and CPI. This has
generally been viewed as more credible than fixing the assumption based on the Bank of England CPI inflation target. This may
change going forward, especially from 2030, when RPI will be aligned with CPIH.
The assumed RPI/CPI gap as at 2 September 2023 is 0.5% (2022: 0.7%). This broadly reflects retention of a 0.9% p.a. assumed gap
before 2030 and 0% p.a. gap thereafter, suitably weighted to reflect the scheme’s exposure to CPI liabilities in the period before
non-pensioner members’ retirement and, given the maturity of the population, is significantly weighted to the period before 2030.
The mortality tables used in the valuation as at 2 September 2023 are 100% of 2019 Vita Curves for males and females with
allowance for mortality improvements using CMI_2021 with a 1.25% p.a. underpin. The mortality assumptions adopted imply the
following life expectancies at age 65 as at 2 September 2023:
Males currently age 45
Females currently age 45
Males currently age 65
Females currently age 65
At
2 September
2023
At
3 September
2022
23.3 years
23.2 years
25.7 years
25.6 years
21.9 years
21.9 years
24.3 years
24.2 years
No adjustments have been made to mortality assumptions at the year end to reflect the potential effects of COVID-19 as the actual
plan experience is not yet available and it is too soon to make a judgement on the impact of the pandemic on future mortality
improvements. The mortality experience analysis for the scheme will be carried out in the future as part of the 31 December 2023
funding valuation for the Carr’s Group Pension Scheme.
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| Annual Report and Accounts 2023
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
29 Retirement benefits continued
Amounts recognised in the Income Statement in respect of defined benefit schemes:
Administrative expenses
Net interest on the net defined benefit asset
Total income
The (income)/expense is recognised within the Income Statement as shown below:
Within operating profit:
Administrative expenses
Within interest:
Finance income
Total income
2023
£’000
166
(312)
(146)
2023
£’000
166
(312)
(146)
Remeasurements of the net defined benefit asset to be shown in the Statement of Comprehensive Income:
Actual gains and losses arising from changes in:
Financial assumptions
Demographic assumptions
Experience adjustments
Return on assets, excluding interest income
Total remeasurement of the net defined benefit asset
Amounts included in the Balance Sheet:
Present value of funded defined benefit obligations
Fair value of scheme assets
Surplus in funded scheme
2023
£’000
5,440
–
(760)
(6,738)
(2,058)
2023
£’000
(42,505)
47,821
5,316
Reconciliation of opening and closing balances of the present value of the defined benefit obligation:
Benefit obligation at the beginning of the year
Interest cost
Net measurement gains – financial
Net measurement losses – demographic
Net measurement losses – experience
Benefits paid
Benefit obligation at the end of the year
2023
£’000
48,578
2,120
(5,440)
–
760
(3,513)
42,505
2022
£’000
126
(159)
(33)
2022
£’000
126
(159)
(33)
2022
£’000
18,433
(467)
(2,120)
(18,422)
(2,576)
2022
£’000
(48,578)
55,406
6,828
2022
£’000
66,254
1,101
(18,433)
467
2,120
(2,931)
48,578
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29 Retirement benefits continued
Benefit obligation by participant status:
Vested deferred
Retirees
Reconciliation of opening and closing balances of the fair value of scheme assets:
Fair value of scheme assets at the beginning of the year
Interest income on scheme assets
Employer contributions
Return on assets, excluding interest income
Benefits paid
Scheme administrative cost
Fair value of scheme assets at the end of the year
Analysis of the scheme assets and actual return:
Equity instruments
Property
Bonds
Cash
Other
Actual return on scheme assets
2023
£’000
10,088
32,417
42,505
2023
£’000
55,406
2,432
400
(6,738)
(3,513)
(166)
47,821
Fair value of assets
2023
£’000
3,262
–
39,944
3,315
1,300
47,821
(4,306)
2022
£’000
12,450
36,128
48,578
2022
£’000
75,625
1,260
–
(18,422)
(2,931)
(126)
55,406
2022
£’000
5,723
3,109
43,578
1,014
1,982
55,406
(17,162)
Equity instruments, bonds and ‘other’ assets are held in unquoted Mercer fund portfolios and are not held directly by the Pension
Scheme. These Mercer portfolios in turn invest in a mix of quoted and unquoted underlying assets. Prior to the sale of the property
assets on 31 August 2023 they were held by Legal & General Investment Management. ‘Other’ assets relate to assets held in the
Mercer’s Alternative Strategies funds within the Scheme’s growth portfolio. Cash includes investments in UK Cash Funds within the
Mercer fund portfolios.
In accordance with IAS 19, Scheme assets must be valued at the fair value at the balance sheet date. The following applies to the
assets in the Scheme:
Asset
Equity instruments
Property
Bonds
Other
Valuation
Fair value being the net asset value provided by the investment manager
Closing bid price for unit holdings in managed property fund
Fair value being the net asset value provided by the investment manager
Fair value being the net asset value provided by the investment manager
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| Annual Report and Accounts 2023
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
29 Retirement benefits continued
Sensitivity analysis
A sensitivity analysis of the principal assumptions used to measure the scheme liabilities:
Discount rate
Price inflation rate
Post-retirement mortality assumption
Change in assumption
-50 basis points
+50 basis points
-25 basis points
+25 basis points
-1 year age rating
+1 year age rating
Present value of defined
benefit obligation
£’000
44,858
40,331
41,555
43,491
44,133
40,898
The sensitivity analysis is based on a change in an assumption while holding all other assumptions constant. It is not an indication
of actual results which may materially differ; for example, changes in some assumptions may actually be correlated. When
calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions, the same method (present value of
the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied
as when calculating the defined benefit liability recognised in the balance sheet.
The methodology and principal assumptions used in preparing the sensitivity analysis did not change compared to the prior year.
The weighted average duration of the defined benefit obligation is approximately 11 years (2022: 12 years).
Expected cash flows for the following year:
Expected employer contributions
Expected contributions to reimbursement rights
Expected total benefit payments by the scheme:
Year 1
Year 2
Year 3
Year 4
Year 5
Next 5 years
£’000
–
–
3,619
3,728
3,841
3,957
4,076
22,303
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29 Retirement benefits continued
Characteristics and the risks associated with the Scheme
Information about the characteristics of the Scheme:
The Scheme provides pensions in retirement and death benefits to members. Pension benefits are linked to a member’s final
salary at 31 December 2015 (or date of leaving, if earlier) and their length of service. Since 31 December 2015 the Scheme has been
closed to future accrual.
The Scheme is a registered scheme under UK legislation.
The Scheme is subject to the scheme funding requirements outlined in UK legislation. As at 31 December 2020, being the date of
the most recent finalised actuarial valuation, the scheme funding valuation of the Scheme revealed a surplus of £2.3m equating to
a funding level of 103%. On a solvency basis the scheme had a deficit of £10.0m, equating to a funding level of 88%. The purpose of
the scheme funding valuation is to monitor the progress towards achieving the Trustees’ funding objectives and to determine the
past service contributions and future service contributions that may be required. The solvency valuation provides an indication of
the financial impact on members were the scheme to wind up with no money recoverable from the employer. The Trustees agreed
that deficit contributions were not required and therefore contributions to the Scheme by the Group and Company in the year
ending August 2024 are expected to be £nil. The next full triennial actuarial valuation will be as at 31 December 2023, at which point
the funding requirements will be revisited.
The Scheme was established under trust and is governed by the Scheme’s trust deed and rules dated June 2008. The Trustees are
responsible for the operation and the governance of the Scheme, including making decisions regarding the Scheme’s funding and
investment strategy in conjunction with the Company.
Risk exposure and investment strategy
The Scheme’s investment strategy is to invest in return-seeking assets and lower-risk assets, such as bonds. This strategy reflects
the Scheme’s liability profile and the Trustees’ attitude to risk. The objective is to achieve a 110% funding level on a gilts +0.25%
p.a. basis by 2024–2028. The Trustees have a fiduciary management arrangement with Mercer who have certain delegated
responsibilities over investment decisions within parameters set by the Trustees. These parameters are reviewed on a regular
basis to ensure they are still appropriate. Assets are invested in Mercer portfolios and in respect of property assets, up to the date
of their disposal on 31 August 2023, Legal & General Investment Management. The Scheme aims to reduce risks such as market
(investment) risk, interest rate risk, inflation risk, currency risk and longevity risk through liability hedging, diversification and de-
risking triggers. Where de-risking triggers are met, assets are transferred from growth asset portfolios to matching asset portfolios.
The objective of the matching asset portfolio is to manage the impact on the funding level of interest rate risk and inflation risk
such that the majority of the Scheme’s risk is allocated to the growth portfolio.
Carr’s Group Retirement Savings Scheme ("RSS")
The Company offers membership in a Master Trust arrangement, Carr’s Group RSS, following the closure of both sections of the
Carr’s Group Pension Scheme. The pension expense for this scheme for the year for continuing operations was £1,021,000 (2022
continuing operations: £901,000).
Carrs Billington Agriculture Pension Scheme
Carrs Billington Agriculture (Sales) Ltd, a subsidiary of the Group until its disposal on 26 October 2022, is a participating employer
in the Carrs Billington Agriculture Pension Scheme, which is a multi-employer defined benefit pension scheme. For the reasons
explained below this scheme is accounted for as a defined contribution scheme.
The scheme is closed to new entrants and has been closed to future accrual since 1 December 2007. The Group has recognised,
at the date of disposal of the Carr's Billington Agricultural business, a surplus of £4.2m, calculated in accordance with IAS 19
(2022: £5.6m).
Under the rules of the scheme, any employer wishing to exit the scheme would trigger a partial wind-up of the scheme and would
therefore be responsible for their s75 debt. A full wind-up of the plan would also trigger s75 debts for each participating employer.
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| Annual Report and Accounts 2023
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
29 Retirement benefits continued
Carrs Billington Agriculture Pension Scheme continued
The history of the scheme is that it was brought together from many other pension schemes and employers following multiple
acquisitions over several years. Many of those acquisitions had little or no records of employee histories. Because of this,
approximately 85% of the scheme liabilities are ‘orphan liabilities’. For the purposes of estimating an allocation of these orphan
liabilities over the current participating employers, they have been split in the same proportion as their calculated share of non-
orphan liabilities. At the last finalised actuarial valuation, the buy-out deficit was £5.3m and the Group’s estimated liability on the
wind-up of the scheme was £2.6m. In the actual event of a wind-up of the scheme the Trustees, with assistance from the actuary
and legal counsel, would need to determine how the orphan liabilities should be allocated.
Because of the scheme history described above, it is not possible to calculate the Group’s share of the assets and liabilities of the
scheme, and consequently despite it being a defined benefit pension scheme, the Group treats it as a defined contribution pension
scheme for accounting purposes. As the Group has disposed of its shareholding in the Carr's Billington Agricultural business it will
not be paying any contributions to the scheme in the next reporting period (2022: £nil). Previously the deficit repair contributions
have been funded solely by the sponsoring employer. The last finalised triennial valuation of the scheme as at 31 December 2021
showed that the scheme had a surplus of £4.1m on a technical provisions basis. As the scheme is in surplus, a recovery plan is not
required. The sponsoring employer will meet the cost of administrative expenses up to an allowance of £100k per annum.
The Group’s level of participation in the scheme was estimated at 48.5%, which was based on its estimated share of the total
buy-out liabilities. The Group had a 49% shareholding in its associate company which is the sponsoring company of the pension
scheme. As a result of equity accounting for its share of the net assets of the associate, the Group recognised 49% of the surplus
calculated on an IAS 19 accounting basis. At the prior year end the investment in associate was included within assets of a disposal
group held for sale (note 9).
Other pension schemes
The pension expense in respect of defined contribution pension arrangements in foreign subsidiaries during the year was £579,000
(2022: £551,000).
Pension contributions into NEST during the year amounted to £35,000 (2022 continuing operations: £36,000).
Other pension-related expenses
During the year the Group's continuing operations incurred expenses associated with pension schemes, including death-in-service
insurance policy premiums, of £15,000 (2022 continuing operations: £37,000).
30 Share capital
Group and Company
Shares
£’000
Shares
£’000
2023
2022
Allotted and fully paid Ordinary Shares of 2.5p each:
At the beginning of the year
Allotment of shares
At the end of the year
93,999,596
2,350
93,720,125
150,766
4
279,471
94,150,362
2,354
93,999,596
2,343
7
2,350
The table above includes no (2022: nil) shares held in Treasury.
The consideration received on the allotment of shares during the year was £167,283 (2022: £352,071).
For details of share-based payment schemes see note 31.
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| Annual Report and Accounts 2023
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Financial Statements
181
31 Share-based payments
Group
The Group operates three active share-based payment schemes at 2 September 2023.
The Executive Directors participate in a deferred bonus share plan under which 25% of any bonus earned will be deferred into
awards over shares in the Company, with awards subject to a two-year post-vesting holding period.
Previously, under the Long Term Incentive Plan ("LTIP"), shares will be awarded to eligible individuals subject to an earnings per
share (“EPS”) target measured against average annual increases over a three-year period. For the awards granted in November
2020 and December 2021 an average annual growth of EPS must exceed 3.0% for 25% of the awards to vest and 100% vest at
10.0%, with a straight-line calculation between 25% and 100% of the award.
LTIP awards granted to Executive Directors in May 2023 are subject to an adjusted earnings per share ("EPS") target measured
against average annual increase over a three-year performance period (75% weighting) and total shareholder return ("TSR") over
a three-year performance period (25% weighting). The average annual growth of adjusted EPS must exceed 5.0% for 25% of the
weighted awards to vest and 100% vest at 14%. The compound annual growth in TSR must exceed 7% for 25% of the weighted
awards to vest and 100% vest at 16%. LTIP awards granted in August 2023 to eligible senior management are subject to non-market
related performance measures with awards being at the discretion of the Remuneration Committee.
All employees, subject to eligibility criteria, may participate in the Share Save Scheme. Under this scheme, employees are offered
savings contracts for three-year vesting period plans. The exercise period is six months from the vesting date.
The fair value per option granted and the assumptions used in the calculation of fair values for Long Term Incentive Plans and
Share Save Schemes are as follows:
Long Term
Incentive Plan
(Executive Directors)
May 2023
EPS
weighting
TSR
weighting
Long Term
Incentive Plan
Long Term
Incentive Plan
December 2021
November 2020
Share Save
Scheme
(3-Year Plan
2023)
Share Save
Scheme
(3-Year Plan
2022)
Share Save
Scheme
(3-Year Plan
2021)
Grant date
04/05/23
10/12/21
23/11/20
03/07/23
06/06/22
21/12/20
Share price at grant date
(weighted average)
Exercise price (weighted
average)
Fair value per option
at grant
Number of employees
at grant
Shares under option
at grant
£1.21
£0.00
£1.51
£1.25
£0.00
£0.00
£1.47
£1.17
£1.15
£1.355
£1.275
£0.87
£0.36
£1.368
£1.102
£0.51
£0.38
2
10
7
72
150
£1.02
£0.37
216
620,920
529,766
721,437
292,723
492,231
1,176,886
Vesting period (years)
3
3
3
3
3
3
Model used for valuation Market
value*
Monte
Carlo
Expected volatility
Option life (years)
Expected life (years)
–
34.3%
10
6.5
Risk-free rate
–
3.8%
Expected dividends
expressed
as a dividend yield
Expectations of vesting
3.1%
0%
4.2%
95%
Market value* Market value* Black-Scholes Black-Scholes Black-Scholes
–
10
6.5
–
3.6%
0%
–
10
6.5
–
6.0%
0%
39.7%
3.55
3.3
5.1%
3.50%
95%
40.0%
3.55
3.3
1.78%
3.80%
95%
41.3%
3.65
3.4
-0.07%
3.73%
95%
* Discounted for dividends forgone over the three-year vesting period.
The fair value of the deferred bonus plan offered to the Executive Directors is calculated with reference to the market value of the
shares under award discounted to reflect illiquidity during the post-vesting two-year period.
The fair value of the LTIP granted to eligible senior management in August 2023 is calculated with reference to the market value of
the shares under award.
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| Annual Report and Accounts 2023
182
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
31 Share-based payments continued
The expected volatility has been calculated using historical daily data over a term commensurate with the expected life of each
option. The expected life is the midpoint of the exercise period. The risk-free rate of return is the implied yield of zero-coupon UK
Government bonds with a remaining term equal to the expected term of the award being valued.
Number of options (LTIP and Share Save)
Long Term
Incentive Plan
May/August 2023
Number
Long Term
Incentive Plan
December 2021
Number
Long Term
Incentive Plan
November 2020
Number
Long Term
Incentive Plan
November 2019
Number
’000
’000
’000
’000
Share Save
Scheme (3-Year
Plan 2023)
Number
’000
Share Save
Scheme (3-Year
Plan 2022)
Number
’000
Share Save
Scheme (3-Year
Plan 2021)
Number
’000
Share Save
Scheme (3-Year
Plan 2020)
Number
’000
Outstanding:
At 29 August 2021
Granted in the year
Exercised in the
year
Forfeited in the
year
At 3 September
2022
–
–
–
–
–
Granted in the year
737
Exercised in the
year
Forfeited in the
year
At 2 September
2023
Exercisable:
At 3 September
2022
At 2 September
2023
Weighted average
(years):
Remaining
contractual life
Remaining
expected life
721
555
–
530
–
–
–
(28)
(272)
–
–
–
502
449
555
–
–
–
–
–
–
–
(343)
(247)
(182)
(555)
394
255
267
–
–
9.7/9.9
–
–
8
–
–
7
–
–
–
6
–
–
–
–
–
293
–
–
–
492
–
(9)
1,082
–
(5)
(160)
483
917
–
–
–
–
355
–
(10)
(62)
283
–
(116)
(263)
(541)
(152)
293
220
376
–
–
–
–
–
–
15
–
15
3.38
2.3
1.07
0.07
6.2/6.4
4.50
3.50
2.50
3.13
2.05
0.82
–
The total (credit)/charge recognised for the year arising from share-based payments are as follows:
Deferred Bonus Share Plan 2022
Deferred Bonus Share Plan 2021
Long Term Incentive Plan May/August 2023
Long Term Incentive Plan December 2021
Long Term Incentive Plan November 2020
Share Save Scheme (3-Year Plan 2023)
Share Save Scheme (3-Year Plan 2022)
Share Save Scheme (3-Year Plan 2021)
Share Save Scheme (3-Year Plan 2020)
Share Save Scheme (3-Year Plan 2019)
Carr's Group plc
| Annual Report and Accounts 2023
2023
£’000
1
–
14
(120)
(79)
4
32
46
10
–
(92)
2022
£’000
26
(44)
–
120
(27)
–
10
114
37
13
249
Overview
Strategic Report
Corporate Governance
Financial Statements
183
31 Share-based payments continued
Company
The movement in the number of outstanding options under the share schemes for the Company is shown below.
Number of options (LTIP and Share Save)
Long Term
Incentive Plan
May/August 2023
Number
Long Term
Incentive Plan
December 2021
Number
Long Term
Incentive Plan
November 2020
Number
Long Term
Incentive Plan
November
2019
Number
Share Save
Scheme (3-Year
Plan 2023)
Number
Share Save
Scheme (3-Year
Plan 2022)
Number
Share Save
Scheme (3-Year
Plan 2021)
Number
Share Save
Scheme (3-Year
Plan 2020)
Number
’000
’000
’000
’000
’000
’000
’000
’000
Outstanding:
At 29 August 2021
Granted in the year
Exercised in the
year
Forfeited in the
year
At 3 September
2022
Granted in the year
Exercised in the
year
Forfeited in the
year
At 2 September
2023
Exercisable:
At 3 September
2022
At 2 September
2023
Weighted average
(years):
588
443
–
326
–
–
–
(28)
(272)
298
316
443
–
–
–
–
–
–
(343)
(187)
(117)
(443)
227
111
199
–
–
–
–
–
570
–
–
–
–
–
8
–
–
7
–
–
–
–
–
–
6
–
–
–
–
–
87
–
–
87
–
–
–
31
–
–
31
–
–
157
–
–
(17)
140
–
–
(10)
(29)
21
111
–
–
–
–
3.38
3.13
2.3
2.05
1.07
0.82
Remaining contractual life 9.7/9.9
Remaining expected life
6.2/6.4
4.50
3.50
2.50
The total (credit)/charge recognised for the year arising from share-based payments are as follows:
Deferred Bonus Share Plan 2022
Deferred Bonus Share Plan 2021
Long Term Incentive Plan May/August 2023
Long Term Incentive Plan December 2021
Long Term Incentive Plan November 2020
Share Save Scheme (3-Year Plan 2023)
Share Save Scheme (3-Year Plan 2022)
Share Save Scheme (3-Year Plan 2021)
Share Save Scheme (3-Year Plan 2020)
Share Save Scheme (3-Year Plan 2019)
2023
£’000
1
–
8
(68)
(53)
1
3
10
2
–
(96)
34
–
–
–
34
–
(31)
(3)
–
–
–
0.07
–
2022
£’000
26
(44)
–
68
(30)
–
1
19
3
2
45
Carr's Group plc
| Annual Report and Accounts 2023
184
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
31 Share-based payments continued
Share-based payments awarded to employees of subsidiary undertakings and recognised as an investment in subsidiary
undertakings in the Company are as follows:
Long Term Incentive Plan August 2023
Long Term Incentive Plan December 2021
Long Term Incentive Plan November 2020
Share Save Scheme (3-Year Plan 2023)
Share Save Scheme (3-Year Plan 2022)
Share Save Scheme (3-Year Plan 2021)
Share Save Scheme (3-Year Plan 2020)
Total carrying amount of investments
32 Prior year acquisition
2023
£’000
6
–
–
3
28
80
–
117
2022
£’000
–
52
25
–
9
138
96
320
There were no acquisitions during the current year. To provide users of these financial statements with an understanding of the
effect of the prior year acquisition to the income statement and balance sheet the following disclosures are presented, all of which
relate to the year ended 3 September 2022.
Afgritech Ltd
On 6 June 2022 Carr’s Group plc acquired the remaining 50% of Afgritech Ltd taking its interest from 50% to 100%. Afgritech Ltd
is a holding company with a 100% owned subsidiary Afgritech LLC. Afgritech LLC is a manufacturer of an animal feed ingredient.
Cash consideration paid was £1.0m.
The following amounts were recognised within the consolidated income statement for the year ended 3 September 2022 in
respect of the acquisition made in that year:
Revenue
Profit before taxation
Total
£’000
2,349
133
There were no other recognised gains and losses other than the results shown above.
Total acquisition-related costs amounted to £27,000, which were recognised within administrative expenses in the consolidated
income statement for the year ended 3 September 2023 and were included in the gain on acquisition of Afgritech within adjusting
items (note 5).
The assets and liabilities recognised in the acquisition accounting are set out below.
Property, plant and equipment
Inventories
Receivables
Cash at bank
Payables
Bank loans
Taxation
Net assets acquired
Fair value of existing interest held in joint venture
Negative goodwill
Satisfied by:
Cash consideration
Carr's Group plc
| Annual Report and Accounts 2023
Fair value
£’000
1,306
441
817
594
(814)
(331)
35
2,048
(1,024)
(4)
1,020
1,020
Overview
Strategic Report
Corporate Governance
Financial Statements
185
32 Prior year acquisition continued
Pro forma full-year information (year ended 3 September 2022)
IFRS 3 (revised) requires disclosure of information as to the impact on the financial statements if the acquisition had occurred at the
beginning of the accounting year.
The pro forma summary below presents the Group as if the acquisition had been acquired on 29 August 2021.
The pro forma amounts include the results of the acquisition and the interest expense on the increase in net debt as a result of
the acquisition. The pro forma amounts do not include any possible synergies from the acquisition. The pro forma information
is provided for comparative purposes only and does not necessarily reflect the actual results that would have occurred, nor is it
necessarily indicative of future results.
Continuing operations - year ended 3 September 2022
Revenue
Profit before taxation
33 Cash generated from/(used in) continuing operations
Profit for the year from continuing operations
Adjustments for:
Tax
Tax credit in respect of R&D
Dividends received from subsidiaries
Dividends received from joint ventures
Depreciation of property, plant and equipment
Depreciation of right-of-use assets
Depreciation of investment property
Intangible asset amortisation
Goodwill and other intangible assets impairment
Profit on disposal of property, plant and equipment
Loss/(profit) on disposal of right-of-use assets
Profit on disposal of investment property
Gain on acquisition of Afgritech
Gain on disposal of subsidiary and associate
Adjustments to contingent consideration
Net fair value (credit)/charge on share-based payments
Other non-cash adjustments
Finance costs:
Interest income
Interest expense and borrowing costs
Share of results of joint ventures
IAS 19 income statement credit in respect of employer contributions
IAS 19 income statement charge (excluding interest):
£’000
132,884
7,027
2022
£’000
7,987
(144)
–
(7,090)
(2,250)
27
114
–
–
–
–
(3)
–
–
–
–
45
(2,818)
(1,723)
580
–
–
Group
Company
2023
£’000
396
1,111
(695)
–
–
3,023
1,308
67
1,004
3,843
(23)
4
–
–
–
–
(78)
(894)
(876)
1,376
(1,441)
(400)
2022
£’000
6,042
1,524
(1,553)
–
–
2,778
1,276
5
988
4,219
(17)
(5)
(76)
(764)
2023
£’000
28,972
(504)
–
(3,958)
–
30
127
–
–
–
–
–
–
–
–
(28,638)
(1,320)
148
(119)
(351)
1,077
(840)
–
–
(96)
1,777
(2,840)
530
–
(400)
Administrative expenses (note 29)
166
126
166
126
Changes in working capital (excluding the effects of acquisitions):
Increase in inventories
Increase in receivables
(Decrease)/increase in payables
Cash generated from/(used in) continuing operations
(481)
(3,173)
(1,082)
3,155
(6,153)
(218)
(2,294)
4,473
–
(1,289)
(745)
(6,868)
–
(297)
1,761
(3,685)
Carr's Group plc
| Annual Report and Accounts 2023
186
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
34 Analysis of net cash/(debt) and leases
Group
Cash and cash equivalents
Bank overdrafts
Loans and other borrowings:
– Current
– Non-current
Net (debt)/cash
Leases:
– Current
– Non-current
Leases
At 4 September
2022
£’000
22,515
(9,734)
12,781
(3,000)
(23,805)
(14,024)
(1,416)
(6,128)
(7,544)
Cash flow
£’000
662
(2,620)
(1,958)
1,698
18,732
18,472
–
1,545
1,545
Net (debt)/cash and leases
(21,568)
20,017
Other
non-cash
changes
£’000
Exchange
movements
£’000
At 2 September
2023
£’000
–
–
–
(48)
(8)
(56)
152
(1,006)
(854)
(910)
(54)
–
(54)
(10)
(125)
(189)
–
30
30
23,123
(12,354)
10,769
(1,360)
(5,206)
4,203
(1,264)
(5,559)
(6,823)
(159)
(2,620)
Other
non-cash
changes
£'000
Acquired with
subsidiaries
£’000
Exchange
movements
£'000
Transferred
to liabilities of
disposal group
£’000
At 3 September
2022
£'000
Group
Cash and cash equivalents
Bank overdrafts
Loans and other borrowings:
– Current
– Non-current
Net debt
Leases:
– Current
– Non-current
Leases
At 29 August
2021
£'000
24,309
(4,613)
19,696
Cash flow
£'000
9,354
(5,121)
4,233
(6,500)
(20,849)
(23,159)
(322)
(9,963)
(16,938)
(2,967)
(12,458)
(15,425)
–
3,186
3,186
Net debt and leases
(25,388)
(13,752)
Company
Cash and cash equivalents
Loans and other borrowings:
– Current
– Non-current
Net (debt)/cash
Leases:
– Current
– Non-current
Leases
–
–
–
77
(48)
29
(181)
(3,212)
(3,393)
(3,364)
At 4 September
2022
£’000
12,726
(1,413)
(22,757)
(11,444)
(113)
(231)
(344)
594
–
594
(117)
(214)
263
–
–
–
263
Cash flow
£’000
783
(700)
18,200
18,283
–
123
123
Net (debt)/cash and leases
(11,788)
18,406
Carr's Group plc
| Annual Report and Accounts 2023
332
–
332
(26)
(62)
244
–
(108)
(108)
136
(12,074)
22,515
–
(12,074)
(9,734)
12,781
24,415
(3,000)
–
(23,805)
12,341
(14,024)
1,732
6,464
8,196
(1,416)
(6,128)
(7,544)
20,537
(21,568)
Other
non-cash
changes
£’000
Exchange
movements
£’000
At 2 September
2023
£’000
–
(66)
13,443
(48)
(8)
(56)
(13)
(59)
(72)
(128)
36
(132)
(162)
–
–
–
(2,125)
(4,697)
6,621
(126)
(167)
(293)
(162)
6,328
Overview
Strategic Report
Corporate Governance
Financial Statements
187
34 Analysis of net cash/(debt) and leases continued
Company
Cash and cash equivalents
Loans and other borrowings:
– Current
– Non-current
Net debt
Leases:
– Current
– Non-current
Leases
Net debt and leases
At 29 August
2021
£'000
Cash flow
£'000
11,063
1,592
Other
non-cash
changes
£'000
–
Exchange
movements
£'000
At 3 September
2022
£'000
71
12,726
(2,341)
(21,906)
(13,184)
(98)
(250)
(348)
75
(763)
904
–
105
105
(13,532)
1,009
853
(48)
805
(15)
(86)
(101)
704
–
(40)
31
–
–
–
31
(1,413)
(22,757)
(11,444)
(113)
(231)
(344)
(11,788)
Other non-cash changes in net cash/(debt) for both the Group and Company relate to the release of deferred borrowing costs to
the income statement. For leases, these relate to new leases entered into during the year net of liabilities extinguished on exit of
leases. In respect of the Company, the prior year amounts also include the settlement of a loan from a subsidiary with a non-cash
dividend from the subsidiary.
The table below shows a reconciliation of cash flows shown in the tables above to the consolidated and Company statements of
cash flows.
Group
Company
Net (decrease)/increase in cash and cash equivalents per cash flow
statement (2023 Group excludes £12,074k discontinued operations)
Cash acquired with subsidiaries
Effects of exchange rate differences
Cash flows from cash and cash equivalents less bank overdrafts
in tables above
New financing and drawdowns on RCF
Repayment of RCF drawdowns
Lease principal repayments
Repayment of borrowings
Receipt of loans from subsidiaries
Repayment of loans from subsidiaries
Cash from financing activities in discontinued operations (2022 only)
2023
£’000
(2,012)
–
54
(1,958)
(5,574)
21,741
1,545
4,263
–
–
–
Cash flows from net debt/cash and leases per tables above
20,017
2022
£’000
5,159
(594)
(332)
4,233
(10,051)
8,000
1,550
2,840
–
–
(20,324)
(13,752)
35 Capital commitments
Group
Capital expenditure that has been contracted for but has not been provided for in the accounts:
Property, plant and equipment
Right-of-use assets
The Company has no capital commitments (2022: none).
2023
£’000
717
–
66
783
(4,741)
21,741
123
2,400
(2,500)
600
–
2022
£’000
1,663
–
(71)
1,592
(9,963)
8,000
105
2,400
(1,125)
–
–
18,406
1,009
2023
£’000
1,636
–
1,636
2022
£’000
521
301
822
Carr's Group plc
| Annual Report and Accounts 2023
188
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
36 Financial guarantees and contingent liabilities
The Company, together with certain subsidiary undertakings, has entered into a guarantee with Clydesdale Bank PLC (trading as
Virgin Money) in respect of the Group loans, overdraft, asset finance and guarantee facilities with that bank, which at 2 September
2023 amounted to £9,552,000 (2022: £8,474,000).
Certain subsidiary undertakings utilise guarantee facilities with financial institutions which include their own bankers. These
financial institutions in the normal course of business enter into certain specific guarantees with some of the subsidiaries’
customers. All these guarantees allow the financial institutions to have recourse to the subsidiaries if a guarantee is enforced.
The total outstanding of such guarantees at 2 September 2023 was £5,717,000 (2022: £2,963,000).
The Company has provided specific guarantees to certain customers of subsidiaries. These are in place to guarantee the
completion of the contract in any event. The contracts under these guarantees had a total contract value of £46,389,000 (2022:
£33,447,000) and as at 2 September 2023 £21,840,000 (2022: £17,766,000) remained uncompleted.
The Company has provided a guarantee over the lease of a premises occupied by a subsidiary. The guarantee is in respect of
prompt and full payment of rents due throughout the term of the lease. As at 2 September 2023, the cumulative rent payable over
the remaining term of the lease is £316,000 (2022: £520,000).
Certain UK subsidiaries have taken advantage of the audit exemption set out within section 479A of the Companies Act 2006 for
the year ended 2 September 2023. The Company will guarantee the debts and liabilities of these subsidiaries at the balance sheet
date in accordance with section 479C of the Companies Act 2006. Details of the subsidiaries taking audit exemption are included in
note 19. The Company has assessed the probability of loss under the guarantee as remote.
The Group and Company do not expect any of the above to be called in.
37 Related parties
Group and Company
Identity of related parties
The Group has a related party relationship with its subsidiaries, associate, up to the date of its disposal, and joint ventures and with
its Directors.
Transactions with key management personnel
Key management personnel are considered to be the Directors and their remuneration is disclosed within the Remuneration
Committee Report and note 6.
Other than remuneration, there are no transactions between the continuing Group and the Directors. At both the current year end
and prior year end there are no balances receivable or payable with Directors.
Transactions with subsidiaries
Balances reported in the Balance Sheet
Amounts owed by subsidiary undertakings:
Non-current loans receivable
Other receivables
Amounts owed to subsidiary undertakings:
Current loans payable
Other payables
Transactions reported in the Income Statement
Management charges receivable
Dividends receivable
Interest receivable
Company
2023
£’000
2022
£’000
32,797
3,320
36,117
(2,125)
(809)
(2,934)
2,708
3,957
2,067
34,208
1,336
35,544
(260)
(393)
(653)
2,824
7,090
1,428
Non-current loans receivable includes one non-interest bearing loan with a face value of £7.4m which is recognised at fair value
based on a market rate of interest. Included within other receivables is £1,865,000 (2022: £848,000) in respect of loans owed by
subsidiary undertakings.
Carr's Group plc
| Annual Report and Accounts 2023
Overview
Strategic Report
Corporate Governance
Financial Statements
189
37 Related parties continued
Transactions with associate
Balances reported in the Balance Sheet
Amounts owed by associate:
Trade and other receivables
Assets included in disposal group classified as held for sale
Amounts owed to associate:
Trade and other payables
Liabilities included in disposal group classified as held for sale
Transactions reported in the Income Statement (continuing operations)
Revenue
Rental income
Management charges receivable
Group
Company
2023
£’000
2022
£’000
2023
£’000
2022
£’000
–
–
–
–
–
–
37
3
18
94
922
1,016
(67)
(33,486)
(33,553)
604
20
110
–
–
–
–
–
–
–
–
41
–
41
–
–
–
–
–
18
110
Amounts presented for transactions reported in the income statement are in respect of continuing operations only. Transactions
between Carrs Billington Agriculture (Sales) Ltd and the associate are excluded as they are both within the disposal group.
Transactions with joint ventures
Balances reported in the Balance Sheet
Amounts owed by joint ventures:
Trade and other receivables
Assets included in disposal group classified as held for sale
Amounts owed to joint ventures:
Trade and other payables
Liabilities included in disposal group classified as held for sale
Transactions reported in the Income Statement (continuing operations)
Revenue
Management charges receivable
Dividends receivable
Purchases
Group
Company
2023
£’000
2022
£’000
2023
£’000
2022
£’000
15
–
15
(44)
–
(44)
337
67
–
(465)
100
6
106
(38)
(20)
(58)
208
94
–
(804)
2
–
2
–
–
–
–
–
–
–
10
–
10
–
–
–
–
–
2,250
–
Carr's Group plc
| Annual Report and Accounts 2023
190
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
37 Related parties continued
Amounts presented for transactions reported in the income statement are in respect of continuing operations only. Transactions
between Carrs Billington Agriculture (Sales) Ltd and Bibby Agriculture Ltd are excluded as they are both within the disposal group.
Other related parties
NW Total Engineered Solutions Ltd occupies its premises under a 15-year lease with Ironworks Properties LLP. The owners of
Ironworks Properties LLP were employed by NW Total Engineered Solutions Ltd until 31 March 2022. This lease is accounted for
under IFRS 16 and at the year end the lease liability included in the consolidated balance sheet was £908,000 (2022: £979,000).
Lease payments made in the year were £98,000 (2022: £98,000).
38 Post balance sheet event
In December 2023, prior to the signing of these financial statements, the Group extended its main banking facility with Clydesdale
Bank plc (Trading as Virgin Money) to 20 December 2026. Other than the extended termination date all other borrowing terms
remain unchanged.
39 Prior year restatements
During the process to complete the accounting treatment of the disposal of the Agricultural Supplies division, two adjustments
have been identified which have resulted in a prior year restatement of the measurement of fair value less costs to sell. The first
was an adjustment to the book costs of the assets disposed of relating to the Group's interest in the joint venture, Bibby Agriculture
Ltd, held through the Group's shareholding in Carrs Billington Agriculture (Sales) Ltd, together with consolidation adjustments to
the assets and liabilities included in the overall Group net assets being disposed of. This adjustment totalled £2.9m, of which £2.7m
was included in the results published for the period to 4 March 2023. Of this £2.9m, £1.6m is attributable to the Group and has no
impact on cash proceeds received to date or in future.
Subsequent to the publication of the interim statement, a further correction was identified, which was required to reflect property
rental terms agreed with the Billington group as part of the sale process. This increased the loss on measurement of fair value
less costs to sell by £1.2m, with £0.8m of this being attributable to the Group. Combined, these corrections increase the loss on
measurement of fair value less costs to sell by £4.1m, which includes £1.8m in respect of the non-controlling interest's share of the
measurement impairment.
The results and financial position of the Group’s discontinued operations for the year ended 3 September 2022 have been restated
to reflect this.
This restatement of the prior year has resulted in shareholders’ equity at 3 September 2022 being reduced by £2.4m and increases
the loss for the period from discontinued operations (£4.1m) in the year to 3 September 2022.
The prior year restatements to discontinued operations are reflected in note 9.
The affected financial statement line items are as follows:
Income Statement
Loss for the year from discontinued operations (including held
for sale)
Profit/(loss) for the year
Profit attributable to:
Equity shareholders
Non-controlling interests
Basic EPS (pence):
Loss from discontinued operations
Diluted EPS (pence):
Loss from discontinued operations
3 September
2022 (previously
reported)
£’000
Restatement in
respect of net
assets disposed
£’000
Restatement in
respect of property
rental terms
£’000
3 September 2022
(restated)
£’000
(2,193)
3,849
5,072
(1,223)
(1.0)
(1.0)
(2,944)
(2,944)
(1,553)
(1,391)
(1.6)
(1.6)
(1,198)
(1,198)
(809)
(389)
(0.9)
(0.9)
(6,335)
(293)
2,710
(3,003)
(3.5)
(3.5)
Carr's Group plc
| Annual Report and Accounts 2023
Overview
Strategic Report
Corporate Governance
Financial Statements
191
39 Prior year restatements continued
Statement of Comprehensive Income
Profit/(loss) for the year
Total comprehensive (expense)/income for the year
Total comprehensive income attributable to:
Equity shareholders
Non-controlling interests
Total comprehensive income attributable to:
3 September
2022 (previously
reported)
£’000
Restatement in
respect of net
assets disposed
£’000
Restatement in
respect of property
rental terms
£’000
3 September 2022
(restated)
£’000
3,849
6,039
7,262
(1,223)
(2,944)
(2,944)
(1,553)
(1,391)
(1,198)
(1,198)
(809)
(389)
(293)
1,897
4,900
(3,003)
Discontinued operations
(2,408)
(2,944)
(1,198)
(6,550)
Balance Sheet
Assets included in disposal group classified as held for sale
Total current assets
Total assets
Net assets
Retained earnings
Total shareholders’ equity
Non-controlling interests
Total equity
3 September
2022 (previously
reported)
£’000
Restatement in
respect of net
assets disposed
£’000
Restatement in
respect of property
rental terms
£’000
3 September 2022
(restated)
£’000
148,531
228,481
311,703
136,471
100,657
120,495
15,976
136,471
(2,944)
(2,944)
(2,944)
(2,944)
(1,553)
(1,553)
(1,391)
(2,944)
(1,198)
(1,198)
(1,198)
(1,198)
(809)
(809)
(389)
(1,198)
144,389
224,339
307,561
132,329
98,295
118,133
14,196
132,329
As there is no impact to the opening balance sheet for the prior year a third balance sheet has not been presented.
Carr's Group plc
| Annual Report and Accounts 2023
192
FIVE-YEAR STATEMENT
Continuing operations
Revenue and results
Revenue
Operating profit
Analysed as:
Adjusted operating profit
Adjusting items
Operating profit
Finance income
Finance costs
Profit before taxation
Analysed as:
Adjusted profit before taxation
Adjusting items
Profit before taxation
Taxation
Profit for the year from continuing operations
Discontinued operations
Profit/(loss) for the year from discontinued operations
Profit/(loss) for the year
Earnings per share – basic (continuing operations)
Earnings per share – adjusted (continuing operations)
Dividends per ordinary share
(Restated)1,2
2019
£’000
(Restated)1,2
2020
£’000
(Restated)2
2021
£’000
(Restated)3
2022
£’000
2023
£’000
107,607
10,801
113,493
120,319
124,240
143,214
7,160
8,200
8,232
1,951
13,152
(2,351)
10,801
463
(841)
10,423
12,774
(2,351)
10,423
(1,767)
8,656
3,994
12,650
9.4p
11.4p
4.75p
9,794
(2,634)
7,160
311
(1,184)
6,287
8,921
(2,634)
6,287
(581)
5,706
3,299
9,005
6.2p
8.3p
4.75p
11,077
(2,877)
8,200
260
(925)
7,535
10,412
(2,877)
7,535
(1,788)
5,747
3,849
9,596
6.2p
10.1p
5.0p
11,906
(3,674)
8,232
351
(1,017)
7,566
11,240
(3,674)
7,566
(1,524)
6,042
(6,335)
(293)
6.4p
10.0p
5.2p
7,950
(5,999)
1,951
876
(1,320)
1,507
7,506
(5,999)
1,507
(1,111)
396
(1,157)
(761)
0.4p
6.2p
5.2p
Revenue and results included in the table above have been restated to reflect the separate disclosure of continuing operations
and discontinued operations following the disposal of the Carr’s Billington Agricultural businesses.
1 Restated for the change in accounting policy for configuration and customisation costs incurred in implementing Software-as-a-Service ("SaaS").
2 Restated in relation to the recognition of revenue from customer contracts within the Engineering division.
3 Restated in relation to discontinued operations (note 39).
Carr's Group plc
| Annual Report and Accounts 2023
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Financial Statements
193
FIVE-YEAR STATEMENT CONTINUED
Net assets employed
Non-current assets
Goodwill
Other intangible assets
Property, plant and equipment
Right-of-use assets
Investment property
Investments
Contract assets
Financial assets
– Non-current receivables
Retirement benefit asset
Deferred tax assets
Current assets
Inventories
Contract assets
Trade and other receivables
Current tax assets
Financial assets
– Derivative financial instruments
– Cash and cash equivalents
Assets included in disposal group classified as held for sale
Total assets
Current liabilities
Financial liabilities
– Borrowings
– Leases
– Derivative financial instruments
Contract liabilities
Trade and other payables
Current tax liabilities
(Restated)1,2,3
2019
£’000
(Restated)1,3
2020
£’000
(Restated)3
2021
£’000
(Restated)4
2022
£’000
32,877
7,878
37,325
16,086
164
23,076
–
22
7,769
410
32,041
6,365
38,259
14,856
158
31,560
5,151
36,198
16,777
152
24,666
23,822
–
312
20
8,037
–
20
9,371
182
23,609
4,635
33,204
8,223
74
6,097
316
23
6,828
213
2023
£’000
19,161
3,318
29,950
7,323
2,640
6,128
–
21
5,316
26
125,607
124,402
123,545
83,222
73,883
46,270
9,466
55,573
–
–
42,197
7,416
51,686
2,068
43,226
7,202
61,735
2,669
3
–
28,649
17,571
24,309
–
139,958
265,565
–
120,941
245,343
–
139,141
262,686
26,990
7,564
19,015
3,866
–
22,515
144,389
224,339
307,561
(22,673)
(2,801)
–
(1,334)
(62,424)
(736)
(11,420)
(2,778)
–
(3,297)
(55,522)
(33)
(11,113)
(2,967)
–
(3,312)
(12,734)
(1,416)
(62)
(2,426)
(69,526)
(21,000)
(711)
(42)
–
(89,968)
(73,050)
(86,960)
(101,566)
(139,915)
–
(36,863)
26,613
7,915
24,592
3,895
–
23,123
–
86,138
160,021
(13,714)
(1,264)
(4)
(5,194)
(16,556)
(131)
Liabilities included in disposal group classified as held for
sale
–
–
Non-current liabilities
Financial liabilities
– Borrowings
– Leases
Deferred tax liabilities
Other non-current liabilities
Total liabilities
Net assets
(26,846)
(12,777)
(4,707)
(2,999)
(47,329)
(25,021)
(11,171)
(4,377)
(1,385)
(23,159)
(12,458)
(5,503)
(55)
(23,805)
(6,128)
(5,048)
(336)
(41,954)
(41,175)
(35,317)
(137,297)
(115,004)
(128,135)
(175,232)
(5,206)
(5,559)
(4,447)
(71)
(15,283)
(52,146)
128,268
130,339
134,551
132,329
107,875
1 Restated for the change in accounting policy for configuration and customisation costs incurred in implementing Software-as-a-Service ("SaaS").
2 Restated for the adoption of IFRS 16 ‘Leases’.
3 Restated in relation to the recognition of revenue from customer contracts within the Engineering division.
4 Restated in relation to discontinued operations (note 39).
Carr's Group plc
| Annual Report and Accounts 2023
194
ALTERNATIVE PERFORMANCE MEASURES GLOSSARY
The Annual Report and Accounts includes alternative performance measures (“APMs”), which are not defined or specified under
the requirements of IFRS. These APMs are consistent with how business performance is measured internally and are also used in
assessing performance under the Group’s incentive plans. Therefore the Directors believe that these APMs provide stakeholders
with additional useful information on the Group’s performance.
Alternative performance measure
Definition and comments
EBITDA
Adjusted EBITDA
Adjusted operating profit
Adjusted profit before
taxation
Adjusted profit for the year
Adjusted earnings per share
Adjusted diluted earnings
per share
Net cash/(debt)
Operating cash flow
Gross margin
Adjusted Group
operating margin
Return on net assets
Earnings before interest, tax, depreciation, amortisation, profit/(loss) on the disposal of non-
current assets and before share of post-tax results of the associate and joint ventures. EBITDA
allows the user to assess the profitability of the Group's core operations before the impact of
capital structure, debt financing and non-cash items such as depreciation and amortisation.
Earnings before interest, tax, depreciation, amortisation, profit/(loss) on the disposal of non-
current assets, before share of post-tax results of the associate and joint ventures and excluding
items regarded by the Directors as adjusting items. This measure is reconciled to statutory
operating profit and statutory profit before taxation in note 2. EBITDA allows the user to assess the
profitability of the Group's core operations before the impact of capital structure, debt financing
and non-cash items such as depreciation and amortisation.
Operating profit after adding back items regarded by the Directors as adjusting items. This
measure is reconciled to statutory operating profit in the income statement and note 2. Adjusted
results are presented because if included, these adjusting items could distort the understanding
of the Group's performance for the year and the comparability between the years presented.
Profit before taxation after adding back items regarded by the Directors as adjusting items.
This measure is reconciled to statutory profit before taxation in the income statement and note
2. Adjusted results are presented because if included, these adjusting items could distort the
understanding of the Group's performance for the year and the comparability between the
years presented.
Profit after taxation after adding back items regarded by the Directors as adjusting items. This
measure is reconciled to statutory profit after taxation in the income statement. Adjusted results
are presented because if included, these adjusting items could distort the understanding of the
Group's performance for the year and the comparability between the years presented.
Profit attributable to the equity holders of the Company after adding back items regarded by the
Directors as adjusting items after tax divided by the weighted average number of Ordinary Shares
in issue during the year. This is reconciled to basic earnings per share in note 11.
Profit attributable to the equity holders of the Company after adding back items regarded by
the Directors as adjusting items after tax divided by the weighted average number of Ordinary
Shares in issue during the year adjusted for the effects of any potentially dilutive options. Diluted
earnings per share is shown in note 11.
The net position of the Group's and Company’s cash at bank and borrowings as per the balance
sheet. Details of the movement in net cash/(debt) is shown in note 34.
Cash generated from operating activities. This measure is shown on the face of the consolidated
statement of cash flows and is shown below. Operating cash flow demonstrates how much
cash is available for the Group to utilise for capital investment, paying dividends, or financing/
repaying borrowings.
Reported gross profit as a percentage of reported revenue. Gross margin is a reflection of how
successfully the Group manages raw material price volatility and production costs as well as its
selling prices in competitive markets. A calculation of gross margin is shown below.
Operating profit after adding back items regarded by the Directors as adjusting items as a
percentage of revenue. Adjusted Group operating margin excluding adjusting items is presented
because if included, these items could distort the understanding of the Group’s performance for
the year and the comparability between the years presented. The calculation of adjusted Group
operating margin to the statutory equivalent is shown below.
Profit before tax after adding back items regarded by the Directors as adjusting items as a
percentage of net assets. This financial performance metric allows users to understand how
effectively and efficiently the Group is using its assets to generate earnings. The calculation of
return on net assets is shown below.
Ratio of net cash/(debt) to
EBITDA
The ratio of net cash/(debt) to EBITDA is a measurement of leverage and reflects the Group’s
ability to service its debt. The calculation of net cash/(debt) to EBITDA is shown below.
Carr's Group plc
| Annual Report and Accounts 2023
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Strategic Report
Corporate Governance
Financial Statements
195
The following tables show reconciliations and calculations that are not presented elsewhere in this Annual Report and Accounts.
Operating cash flow
Cash generated from operating activities per the consolidated statement of cash flows
Gross margin
Reported revenue
Reported gross profit
Gross profit as a percentage of revenue
Adjusted Group operating margin
Reported operating profit
Adjusting items (note 5)
Adjusted operating profit
Reported revenue
Adjusted operating profit as a percentage of reported revenue
Return on net assets
Reported profit before taxation (continuing operations only)
Adjusting items (continuing operations only) (note 5)
Adjusted profit before taxation (continuing operations only)
Net assets per the consolidated balance sheet
Net assets of disposal group classified as held for sale (note 9)
Adjusted net assets (continuing operations only)
Adjusted profit before taxation as a percentage of adjusted net assets
Ratio of net cash/(debt) to EBITDA
Adjusted EBITDA (continuing operations only) (note 2)
Net cash/(debt) (note 34)
Ratio of net cash/(debt) to adjusted EBITDA
Continuing operations
2023
£’000
2,121
2022
£’000
2,861
Change
-25.9%
Continuing operations
2023
£’000
143,214
32,290
22.5%
2022
£’000
124,240
29,608
23.8%
Change
+15.3%
Continuing operations
2023
£’000
1,951
5,999
7,950
2022
£’000
8,232
3,674
Change
-76.3%
11,906
-33.2%
143,214
124,240
5.6%
9.6%
2023
£’000
1,507
5,999
7,506
2022
(restated)
£’000
7,566
3,674
11,240
107,875
132,329
–
107,875
7.0%
(42,823)
89,506
12.6%
2023
£’000
10,945
4,203
(0.38)
2022
£’000
15,075
(14,024)
0.93
Carr's Group plc
| Annual Report and Accounts 2023
196
DIRECTORY OF OPERATIONS
Carr’s Group plc
Old Croft, Stanwix, Carlisle,
Cumbria
CA3 9BA
Tel: 01228 554600
Web: www.carrsgroup.com
SPECIALITY
AGRICULTURE
ACC Feed Supplement
LLC*
5101 Harbor Drive,
Sioux City, Iowa 51111 USA
Tel: 001 712 255 6927
Afgritech LLC
810 Waterman Drive,
Watertown,
New York 13601 USA
Tel: 001 315 785 3625
AminoMax
Lansil Way, Lancaster
LA1 3QY
Tel: 01524 597 200
Animal Feed Supplement,
Inc
East Highway 212,
PO Box 188, Belle Fourche,
South Dakota 57717 USA
Tel: 001 605 892 3421
Animal Feed Supplement,
Inc
PO Box 105, 101 Roanoke
Avenue, Poteau, Oklahoma
74953 USA
Tel: 001 918 647 8133
Animal Feed Supplement,
Inc
PO Box 569, 1700 US, 50
East, Silver Springs, Nevada
89429 USA
Tel: 001 775 577 2002
Animax Limited
Shepherds Grove West,
Stanton,
Bury St Edmund’s, Suffolk
IP31 2AR
Tel: 01359 252 181
Caltech
Solway Mills, Silloth,
Wigton, Cumbria
CA7 4AJ
Tel: 016973 32592
Carr’s Supplements (NZ)
Limited
c/o Mathiesons Chartered
Accountants,
123 Burnett Street,
Ashburton 7700,
New Zealand
Tel: 0064 3 307 6455
Carr’s Supplements (ROI)
Limited
Unit 1, Old Creamery
Enterprise Centre, Creamery
Road, Piltown, County
Kilkenny,
E32 FK57, Ireland
Tel: 00 353 87 063 5950
Crystalyx Products GmbH*
Am Stau 199-203, 26122,
Oldenburg, Germany
Tel: 00 49 441 2188 9218
Gold-Bar Feed
Supplements LLC*
783 Eagle Boulevard,
Shelbyville TN 37160, USA
Tel: 001 877 618 6455
Scotmin
13 Whitfield Drive,
Heathfield Industrial Estate,
Ayr KA8 9RX
Tel: 01292 280 909
Silloth Storage Company*
Station Road, Silloth,
Wigton, Cumbria
CA7 4JQ
ENGINEERING
Bendalls Engineering
Brunthill Road, Kingstown
Industrial Estate, Carlisle
CA3 0EH
Tel: 01228 815 350
Carr’s MSM
Unit 1, Oak Tree Business
Centre,
Spitfire Way, Hunts Rise,
South Marston Park,
Swindon, Wiltshire
SN3 4TX
Tel: 01793 824 891
Chirton Engineering
Unit 4A, Tyne Tunnel Trading
Estate, High Flatworth,
North Shields, Tyne and Wear
NE29 7SW
Tel: 0191 296 2020
NuVision Engineering, Inc.
2403 Sidney Street,
Suite 700,
Pittsburgh,
Pennsylvania 15203, USA
Tel: 001 888 748 8232
NuVision Engineering, Inc.
184 B Rolling Hill Road,
Mooresville,
North Carolina 28117, USA
Tel: 001 704 799 2707
NW Total Engineered
Solutions Limited
Unit 2 Andrews Way, Barrow
in Furness, Cumbria
LA14 2UE
Tel: 01229 811000
Wälischmiller
Engineering GmbH
Schießstattweg 16, 88677
Markdorf, Germany
Tel: 0049 7544 95140
*
joint venture company
Carr's Group plc
| Annual Report and Accounts 2023
Overview
Strategic Report
Corporate Governance
Financial Statements
197
DORMANT SUBSIDIARIES AT 2 SEPTEMBER 2023
Company Name
Carr’s Group Corporate Trustee Ltd
Chirton Engineering Ltd
Conegar S.A.
Animax NZ Ltd
Registered and Located
England and Wales1
England and Wales1
Uruguay2
New Zealand3
Ownership
100%
100%
100%
100%
1 Registered Office address: Old Croft, Stanwix, Carlisle, Cumbria CA3 9BA.
2 Registered Office address: Juncal 1305, Piso 18, Montevideo, Uruguay.
3 Registered Office address: RSM New Zealand (Auckland), Level 2, 62 Highbrook Drive, East Tamaki, Auckland 2013, New Zealand.
Carr's Group plc
| Annual Report and Accounts 2023
198
REGISTERED OFFICE AND ADVISERS
Registered Office
Carr’s Group plc
Old Croft, Stanwix,
Carlisle
CA3 9BA
Registered No. 98221
Chartered Accountants and Statutory Auditors
Grant Thornton UK LLP
Landmark,
St Peter’s Square,
1 Oxford Street,
Manchester
M1 4PB
Bankers
Clydesdale Bank (Trading as Virgin Money)
82 English Street,
Carlisle
CA3 8HP
Financial Adviser and Broker
Investec Bank plc
30 Gresham Street,
London
EC2V 7QP
Financial Advisers
Lazard & Co Limited
50 Stratton Street
London
W1J 8LL
Financial and Corporate PR Advisers
FTI Consulting
200 Aldersgate,
Aldersgate Street,
London
EC1A 4HD
Solicitors
Ashurst LLP
London Fruit & Wool Exchange,
1 Duval Square,
London
E1 6PW
Registrar
Link Group
10th Floor,
Central Square,
29 Wellington Street,
Leeds
LS1 4DL
Carr's Group plc
| Annual Report and Accounts 2023
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Carr's Group plc
Old Croft
Stanwix
Carlisle CA3 9BA
United Kingdom