Gusbourne PLC
Report and financial statements
for the year ended 31 December 2022
Company Number 08225727
Contents
Strategic report
4 Financial Summary
5 Highlights
6 Chairman’s statement
7 Chief Executive Officer’s review
11 Chief Financial Officer’s review
17 Principal risks and uncertainties
19 Section 172 statement
Directors and report of the directors
21 Board of Directors
24 Report of the Directors
Financial statements
32 Report of the independent auditors
39 Consolidated statement of comprehensive income
40 Consolidated statement of financial position
42 Consolidated statement of cash flows
43 Consolidated statement of changes in equity
44 Notes forming part of the financial statements
69 Parent company financial statements
76 Company information
Financial Summary
Continuing strong growth in net revenue, with net revenue up 49% at £6,243,000, and
Adjusted EBITDA loss narrowed to £1,131,000, a 22% reduction from the prior period.
Net revenue & adjusted EBITDA
Net revenue (1)
Gross profit
Adjusted EBITDA (2)
Gross profit %
Statutory results
Net revenue(1)
Gross profit
Fair value movement in biological produce
Sales and marketing expenses
Administrative expenses
Depreciation
Total Administrative expenses
Operating profit/(loss)
2022
£’000
2021
£’000
Change
%
49%
58%
22%
49%
58%
6,243
3,697
(1,131)
59.2%
6,243
3,697
(239)
4,191
2,344
(1,452)
55.9%
4,191
2,344
(704)
(3,479)
(2,460)
(1,481)
(601)
(5,561)
(1,336)
(600)
(4,396)
(2,103)
(2,756)
Reconciliation of operating profit/(loss) to adjusted EBITDA
Operating profit/(loss)
(2,103)
(2,756)
Add back;
Depreciation
Aborted planning and capital expenditure write-off
Fair value movement in biological produce
Adjusted EBITDA(2)
601
132
239
600
-
704
(1,131)
(1,452)
(1) Net revenue is revenue reported by the Group after excise duties payable
(2) Adjusted EBITDA means profit/(loss)from operations before aborted planning and capital expenditure write-off, fair
value movement in biological produce, interest, tax, depreciation and amortisation.
4
Gusbourne PLC Report and Financial Statements 2022 Highlights
Highlights of 2022 include:
• Net revenue* up by 49% to £6.24m (2021: £4.19m) with strong growth across the
Group’s three main distribution channels:
• UK Trade sales up by 53% (2021: 177%) to £3.06m (2021: £2.00m)
• Direct to consumer (“DTC”) net revenue which includes tours and related cellar
door operations in Kent, was up by 29% (2021: 96%)to £1.71m (2021: £1.32m)
•
International sales up by 78% (2021: 23%) to £1.39m (2021: £0.78m)
• A five-year CAGR (compound annual growth rate) in net revenue of 44% (2021:
46%)
• Gross profit margin at 59.2% (2021: 55.9%)
• Adjusted EBITDA** loss narrowed to £1.13m (2021: £1.45m)
• Acquisition of a further 55 hectares of freehold land for £1.7m, contiguous with the
Group’s existing Kent vineyards. The Group is planning to plant most of this new
land with new vineyards in 2024
• £6.0m increase of long term asset backed financing facility from PNC from £10.5m
to £16.5m
• Ongoing success in international and UK wine competitions with a record number
of awards for its wines, including a record number of gold medals
* Net revenue represents Revenue after deducting excise duties
** Adjusted EBITDA means profit/(loss)from operations before aborted planning and capital expenditure write-off,
fair value movement in biological produce, interest, tax, depreciation and amortisation.
5
Gusbourne PLC Report and Financial Statements 2022 Chairman’s statement
The burgeoning global appetite for English fine wine continues to underpin Gusbourne’s significant
revenue growth as 2022 marked another year of strong progress for the Group both at home and abroad.
Since our first vines were planted almost twenty years ago, Gusbourne has focused on building long-term
assets to drive value creation for all our stakeholders, striving from the outset to achieve international
brand recognition. The world class quality of our products remains of critical importance and the latest
milestone in this journey was marked with the launch of our luxury cuvee, Fifty One Degrees North, to
notable critical acclaim worldwide.
All sales channels delivered excellent growth during the year. Our Direct to Consumer (“DTC”) net revenue
grew by 29% to £1.7m, driven by online sales and cellar door operations in Kent, as customers responded
positively to an expanded product offering. Our UK Trade revenue grew by 53% to £3.1m as the industry
continued its recovery from COVID-19 and returned to normalised hospitality market conditions. Our
international revenue grew by 78% to £1.4m as we expanded into 30 export markets, with distribution in
more new territories planned in 2023 and beyond.
Our strategy is firmly on track to deliver against previously announced scale and profitability ambitions.
We remain fully committed to driving increasing revenue across a growing range of premium sparkling
and still wine product ranges combined with related experiential services which will help to further cement
the brand’s luxury positioning. Moving towards EBITDA breakeven is also a key priority for 2023.
The Board
We made several changes to our Board during the year to support Gusbourne’s ongoing growth and
execution of our detailed corporate strategy. I am extremely pleased to welcome Katharine Berry, who
was appointed as Chief Financial Officer (“CFO”) in August 2022 and joined the Board on 21 March 2023.
Two of our Non-Executive Directors retired, and I would like to thank Andrew Weeber, Gusbourne’s
founder, and Paul Bentham for all their dedication, hard work and contributions to the success of
Gusbourne. Finally, Jon Pollard, Chief Operating Officer, stood down from the Board but continues in his
Executive role.
The Gusbourne Team
I remain extremely proud of the hard work and dedication shown by the entire Gusbourne team who
always show up with a winning attitude. No-one reflects this more prominently than Charlie Holland, our
CEO, who has overseen another year of excellent strategic progress and remains one of the most talented
and respected winemakers on the world stage.
Outlook
Although the macro-economic outlook remains uncertain with consumer confidence still fragile, the Board
remains confident in the future success of Gusbourne as a leading light in the rapidly growing English
fine wine market. We have all the key ingredients in place for long-term success with great product, great
distribution, and a great team, and very much look forward to another exciting year ahead.
Jim Ormonde
Chairman
6
Gusbourne PLC Report and Financial Statements 2022 Chief Executive Officer’s review
2022 was another year of significant financial, operational and strategic progress for Gusbourne. Since
our foundation in 2004, Gusbourne has strived to create England’s finest and most celebrated wines, by
leveraging our core assets – an unrelenting focus on quality; excellent and carefully curated distribution,
our enhanced product portfolio and have taken advantage of the long-term investments made into land
and planting over the last 20 years. Combined with the ongoing global appetite for English wine, the
result has been another year of strong revenue growth. The Group reported £6.2m revenue, an increase
of 49% compared to 2021, with all three distribution channels expanding the customer base both in the
UK and overseas, reinforcing Gusbourne’s brand as a leading light in the dynamic and fast growing English
fine wine sector.
Gross profit margin improved to 59.2% (2021: 55.9%) due to an improvement in distribution channel and
pricing mix. Our new and wider product mix strategy helped deliver this improved margin. Operating
costs, especially administration expenses, remain carefully managed. We continue to invest in the
Gusbourne brand, with discretionary marketing investment to help support brand awareness and future
sales growth. The combination of good cost discipline and significant top-line growth meant the Group
achieved a material improvement in our cost to sales ratio. The Group narrowed its adjusted EBITDA loss
for the year to £1.1m (2021: £1.5m EBITDA loss).
The continued success of the Group is a testament to the hard work of the Gusbourne team. Their
dynamism, enthusiasm and dedication are the foundation of our business and, as always, greatly
appreciated and I thank them all for their ongoing efforts that are driving Gusbourne forward.
Group vision and growth strategy
The Group’s vision is to continue to produce premium quality vintage wines from grapes grown in our
own vineyards and to promote Gusbourne as a luxury brand. This is achieved through our ongoing
dedication to excellence in all aspects of our vineyard, winemaking, branding and enhanced by our chosen
commercial relationships and curated distribution channels.
The Group’s growth strategy is based on three strategic pillars:
• Growth and development of Gusbourne’s luxury brand status: Maintain and further develop Gusbourne’s
luxury brand status, ensuring that the Group’s premium quality and market positioning of its products are
maintained, through our ongoing product portfolio development, distribution choices and pricing strategy.
• Developing strong direct relationships with our customers: Support the continuing strong growth in
DTC sales with online sales and marketing investment, and offline with planned further investment in
Gusbourne’s cellar door operations. These operations enable us to meet our customers in person and
provide an immersive brand experience, thus creating a more direct relationship with our customers.
• Careful expansion of our international trade footprint: Invest in the continued growth of UK Trade and
International sales to deliver further market penetration in the UK and overseas.
Land
The Gusbourne business was founded in 2004 by Andrew Weeber with the first vineyard plantings at
Appledore in Kent. The first wines were released in 2010 to critical acclaim. In 2013 and 2015, additional
vineyards were planted in both Kent and West Sussex. At the end of 2022, the group had 93 hectares of
mature planted vineyards. The Group acquired a further 55 of hectares in Kent during 2022, the majority
of which we plan to plant in 2024. We also plan to plant additional vineyards on land in Sussex and by
2025 we plan to have a total of approximately 152 hectares of land under vine. The Group will continue to
look to acquire appropriate land to support our long-term growth ambitions.
7
Gusbourne PLC Report and Financial Statements 2022 Chief Executive Officer’s review continued
Products
Right from its beginning, Gusbourne’s intention has always been to produce the finest English sparkling
wines. Starting with carefully chosen sites, we use best practice in establishing and maintaining the
vineyards and conduct green harvests to ensure we achieve the highest quality grapes for each vintage. A
quest for excellence is at the heart of everything we do. For our sparkling wine, we blind taste hundreds of
components before finalising our blends and even after the wines are bottled, they spend extended time
on their lees to add depth and flavour. Once disgorged, extra cork ageing further enhances complexity.
Our winemaking process remains traditional, but one that is open to innovation where appropriate. It takes
four years to bring a vineyard into full production and a further four years to transform those grapes into
Gusbourne’s premium sparkling wine.
2022 saw the launch of our luxury cuvee, 51 Degree’s North, a wine that represents the pinnacle of the
Gusbourne range and is positioned alongside the world’s finest sparkling wines. The response from the
wine critics has been extremely positive and we are excited about the next vintage release of this wine.
Gusbourne also produce a growing range of premium vintage English still wines which continue to win
prestigious international awards and regularly sellout. We anticipate further expanding the range of our
still wines, which in line with other comparable still fine wines are commercially released with less ageing
in our cellars.
Recent awards
We have continued our success in major wine competitions, with 2022 proving our most successful year
ever, winning over 40 medals at national and international competitions, including 21 gold and platinum
medals, where we are judged against some of the finest wines from around the world. Particular highlights
include:
•
•
•
•
•
four trophies, including retaining Estate Winery of the Year at the WineGB award, the Vintage Sparkling
Wine trophy at the 2022 International Wine Challenge (along with eleven other medals)
thirteen medals (including two golds) at the Decanter World Wine Awards
five gold medals and Best in Class at the Champagne and Sparkling Wine World Championships
the Judges Selection Medal in the prestigious Texsom awards in the United States in May, and
two editor’s Choice listings in Wine Enthusiast
Distribution: Three sales channels
Gusbourne has three main sales channels, UK Trade, International and Direct to Consumer, which all have
delivered significant growth during the year.
• UK Trade
UK Trade continued its strong progress, net revenue up by 53% (2021: 177%). The Group has
established new trade accounts across premium hotels and restaurants, further strengthening its
already high penetration to Michelin star restaurants and 5-star hotels.
International
Our wines are now distributed to 30 countries around the world as we grow the Gusbourne brand
globally, working with specialist distribution partners. International sales have continued to thrive
growing by 78% (2021: 23%). The brand has seen particularly strong momentum in the Nordics, Japan
•
8
Gusbourne PLC Report and Financial Statements 2022 and the US. Continued investment in sales and marketing has enabled us to develop and grow existing
markets and expand into exciting new territories with significant growth potential. The Group expects
to add further countries in 2023.
• Direct to Consumer
Both wine sales and tour and tasting events based on our cellar door operations in Kent have
continued to deliver strong growth, with sales up 29% for 2022 compared to 2021.
DTC wine sales grew by 17% reflecting our ongoing investment in digital marketing through the
creation of rich and engaging content, compelling wine offers and new and exciting product releases.
DTC remains a key strategic direction for Gusbourne as we continue to develop our online and digital
presence. Tour and tasting events at Gusbourne’s successful cellar door facility in Kent (the Nest),
are now in their sixth full year of operation. Situated amongst our vineyards and winery operations
in Kent, this facility offers an immersive experience allowing us to fully engage with our customers,
encouraging them to enjoy the vineyards, visit the winery and taste our wines in a beautiful setting.
Tour and tasting events income based on our cellar door operations has been particularly robust, with
a growth of 70% to £0.53m from £0.31m. We continue to improve and expand these services, having
carried out reconfiguration of space at the Nest, providing capacity for more visitors to have a unique
and unforgettable experience.
2022 Harvest
We anticipate the wines from the 2022 harvest to be among some of the best we have produced, ranking
alongside the excellent 2014, 2016, 2018 and 2020. We harvested one of our biggest yields to date, which
is crucially important, but it is the high quality of the fruit which particularly excites us.
The 2022 growing season was nearly perfect, dominated by warm, dry weather in which the vineyards
thrived. The team’s careful management of the vines throughout the summer, which included two heatwaves
and a rigorous quality-controlling green harvest, meant that the fruit quality and quantity was superb.
The resulting sparkling wines will be bottled during the summer of 2023, further adding to our inventory
levels for sale in future years.
The English wine market
The English wine market remains highly dynamic and has continued to see significant growth, in terms of
supply, demand by UK consumers and demand in international markets. This is an exciting time for English
wines, with brands like Gusbourne at the forefront of the creation of a fine wine market and putting the
UK on the global stage.
Data from WineGB, the industry body for the English wine trade, reports plantings have increased by
70% over the last five years, with Chardonnay, Pinot Noir and Pinot Meunier the most significant varietals.
Sparkling wines account for approximately 70% of total production and still wines 30%.
Sales of UK wine in the UK market are over nine million bottles, with a growing presence of UK wines in the
exports markets. Key exports markets for the industry are Norway, USA, Sweden, Japan and Hong Kong.
Gusbourne has a strong presence in all of these markets, with significant further growth potential ahead.
9
Gusbourne PLC Report and Financial Statements 2022 Chief Executive Officer’s review continued
Current trading and outlook
The macro-economic environment remains complex, including the effect of the Russia–Ukraine war, with
consumer confidence affected by inflationary pressures in many markets. At the same time, consumer
interest in Gusbourne wine and English wine generally continues to grow across the globe. Against this
backdrop, we remain confident about Gusbourne’s future prospects and expect to deliver another year
of strong growth across all our distribution channels. Gusbourne has the benefit of increased supply
and inventories from the expansion of the land planted in recent years and the ongoing expansion of its
international presence. The increased revenue base combined with anticipated improvement in gross
margin and cost discipline is expected to see the Group move towards EBITDA breakeven for the current
financial year. Longer-term, increases in production from new vineyards are anticipated to drive further
revenue growth and margin improvement through scale.
Charlie Holland
Chief Executive
10
Gusbourne PLC Report and Financial Statements 2022 Chief Financial Officer’s review
Key performance indicators
Net revenue and adjusted EBITDA - 5 year summary
Years ended 31 December
Net revenue*
Cost of sales
Gross profit
Sales and marketing expenses
Administration expenses **
Adjusted EBITDA (loss)/profit***
Aborted planning and capital expenditure write-off
Fair value movement in biological produce
EBITDA****
Net revenue annual growth %
Net revenue 5 year CAGR
Gross profit %
Sales and marketing %
Administration expenses %
Adjusted EBITDA (loss)/profit %
2018
£’000
2019
£’000
2020
£’000
1,261
(560)
701
(914)
(694)
(907)
-
125
(782)
26.4%
55.6%
72%
55%
-72%
1,653
(735)
918
(1,389)
(814)
(1,285)
-
(172)
(1,457)
31.1%
30.7%
55.5%
84%
49%
-78%
2,109
(879)
1,230
(1,478)
(1,073)
(1,321)
-
(221)
(1,542)
27.6%
34.8%
58.3%
70%
51%
-63%
2021
£’000
4,191
(1,847)
2,344
(2,460)
(1,336)
(1,452)
-
(704)
(2,156)
98.7%
45.6%
55.9%
59%
32%
-35%
2022
£’000
6,243
(2,546)
3,697
(3,479)
(1,349)
(1,131)
(132)
(239)
(1,502)
49.0%
44.3%
59.2%
56%
22%
-18%
* Net revenue represents revenue after deducting excise duties
** Excluding depreciation
**
Adjusted EBITDA means profit/(loss)from operations before aborted planning and capital expenditure write-off, fair value
movement in biological produce, interest, tax, depreciation and amortisation.
**** EBITDA means profit from operations/(loss from operations) before interest, tax, depreciation and amortisation.
11
Gusbourne PLC Report and Financial Statements 2022 Chief Financial Officer’s review continued
Net revenue by distribution channel - 5 year summary
2020
Years ended 31 December
£’000
2018
£’000
2019
£’000
2021
£’000
2022
£’000
2022
% Growth
2021
% Growth
Net revenue
Direct to Consumer (DTC)*
UK Trade
International
Net wine sales
Tour and related income (DTC)*
Other Income
Total net revenue
Percentages of total net revenue
Direct to Consumer (DTC)
UK Trade
International
Other Income
Total
144
827
179
299
934
292
1,150
1,525
43
68
71
57
586
721
634
1,941
90
78
1,261
1,653
2,109
14.8%
65.6%
14.2%
5.4%
22.4%
56.5%
17.7%
3.4%
32.1%
34.2%
30.1%
3.7%
1,016
1,997
781
3,795
309
87
4,191
31.6%
47.6%
18.6%
2.1%
1,185
3,058
1,391
5,634
525
84
6,243
27.4%
49.0%
22.3%
1.3%
100.0%
100.0%
100.0%
100.0%
100.0%
*DTC total net revenue £1,710,000 (2021: £1,325,000), 29% growth versus prior year (2021: 96%)
16.5
53.2
78.0
48.5
69.9
-3.4
49.0
73.4
177.0
23.2
95.5
242.3
11.5
98.7
Net revenue
Net revenue for the year was up by 49% (2021: 99%) to £6.24m (2021: £4.19m, 2020: £2.11m and 2019 :
£1.65m), reflecting continued robust sales growth across our three main distribution channels:
• UK Trade sales grew by 53% to £3.06m. UK Trade sales represent 49% (2021: 48%) of net revenue.
The Group has established new trade accounts across premium hotels and restaurants to support the
Gusbourne brand;
• Direct to consumer net revenue which includes tours and related cellar door operations in Kent grew
by 29% to £1.71m. DTC represents 27% (2021: 32%) of net revenue for the year. Revenues from tours and
experiences have increased by 70% compared to 2021 and our Gusbourne Reserved customer base
increased by over 45%; and
•
International sales grew by 78% (2021: 23%) to £1.39m (2021: £0.78m) and represented 22% of total net
revenue (2021: 19%).
Gross profit
The gross profit margin on net revenue increased to 59.2% (2021: 55.9%), largely due to distribution
channel and pricing mix factors. Gross profit margin is one of the main KPI’s of the Group which it aims to
maintain and enhance, and which derives from a number of key variables:
• The historic cost of wine inventories, based on production costs up to four years prior to sale;
• The sales distribution mix, with DTC generally at higher margins at gross profit level than the other two
main channels;
12
Gusbourne PLC Report and Financial Statements 2022 • The product distribution mix with more premium product offerings now being introduced and further
enhancing overall gross margins;
• Selected inflationary price adjustments to recover the Group’s own increasing costs, where and when
appropriate; and
• Direct distribution costs
These variables are monitored and optimized as part of the Group’s forward planning to maintain and
enhance its gross profit margins.
Adjusted EBITDA loss
The Group narrowed its adjusted EBITDA operating loss for the year to £1.1m (2021: £1.5m). This was after
charging sales and marketing expenses of £3.5m (2021: £2.5m) and administrative expenses of £1.3m
(2021: £1.3m).
Administrative expenses have remained relatively unchanged over the year. Sales and marketing expenses
have increased by £1.0m over the year and continue to include key planned elements of discretionary
investment spend to support the ongoing brand development and the potential longer-term sales growth
of the Group.
Sales and marketing costs as a percentage of net revenue has continued to decline in recent years and
represented 56% of net revenue for the year, down from 59% in 2021. It is expected that these costs will
continue to decline as a percentage of net revenue over the coming years.
£132,000 costs were written-off in relation to planning and capital expenditure pre-pandemic which has
been aborted.
Finance expenses
Finance expenses for the year amounted to £0.5m (2021: £0.8m) and reflect the interest expense on
the Group’s long-term secured debt from PNC together with the amortisation of bank transaction costs.
The prior year charge included the discount expense of short-term deep discount bonds which were
converted into equity or repaid in that year.
Tax
The Group reported a tax credit of £74,000 (2021: nil) relating to research and development tax credits. At
31 December 2022, the Group had tax loses available to carry forward of £20.7m (2021: £17.7m).
Earnings per share
The Group reported a basic loss per share of 4.17 pence (2021: 7.29 pence).
13
Gusbourne PLC Report and Financial Statements 2022 Chief Financial Officer’s review continued
Balance Sheet assets* - 5 year summary
Years ended 31 December
Assets
Freehold land and buildings
Right of use assets
Vineyards
Plant, machinery and other equipment
Other receivables
Total non current assets
Inventories
Trade and other receivables
Trade and other payables
Working capital
2018
£’000
2019
£’000
2020
£’000
2021
£’000
2022
£’000
6,488
-
3,289
1,757
97
11,631
5,282
496
(483)
5,295
6,383
2,068
3,144
1,636
90
13,321
7,463
707
(752)
7,418
6,263
2,022
3,004
1,504
38
6,134
1,976
2,858
1,375
32
7,830
1,930
2,712
1,726
16
12,831
12,375
14,214
9,325
869
(769)
9,425
10,638
1,275
(1,118)
10,795
12,579
1,291
(1,500)
12,370
Total operating assets
16,926
20,739
22,256
23,170
26,584
1,311
1,007
1,009
1,007
262
1,007
3,128
1,007
269
1,007
19,244
22,755
23,525
27,305
27,860
2018
£’000
2019
£’000
2020
£’000
2021
£’000
2022
£’000
-
2,173
2,761
-
-
-
2,058
3,001
3,379
2,123
6,613
-
5,132
544
2,108
4,934
10,561
14,397
9,326
12,373
-
-
-
-
-
-
2,094
11,420
2,078
14,451
14,310
12,194
9,128
15,885
13,409
19,244
22,755
23,525
27,305
27,860
Cash
Goodwill
Total assets
* Net of trade and other payables
Balance Sheet liabilities and equity*
Years ended 31 December
Debt
PNC Business Credit (Asset finance facilities)
Other bank debt
Deep discount bonds
Short term debt
Lease liabilities
Total debt
Equity
Total liabilities
* Excluding trade and other payables
14
Gusbourne PLC Report and Financial Statements 2022 Balance Sheet
The Group’s balance sheet reflects the long-term nature of the sparkling wine industry and the important
investments that have already been made to support the long-term growth ambitions of the Group.
The production of premium quality wine from new vineyards is, by its very nature, a long-term project
of at least ten years. It takes around two years to select and prepare optimal vineyard sites and order
the appropriate vines for planting. It takes a further four years from planting to bring a vineyard into
full production and a further four years to transform these grapes into Gusbourne’s premium sparkling
wine. This requires capital expenditure on vineyards and related property, plant and equipment as well as
significant working capital to support inventories over the long production cycle.
The total assets employed in the business at 31 December 2022 was £27.9m (2021: £27.3m) represented by
the following principle operating assets:
Fixed assets
•
196 hectares of Freehold land and buildings of £7.8m (2021: £6.1m) – with buildings at cost less
depreciation
• 93 hectares of mature vineyards of £2.7m (2021: £2.9m) – at cost less depreciation
• Plant, machinery and other equipment of £1.7m (2021: £1.4m) – at cost less depreciation
• Right of use assets (under IFRS 16) of £1.9m (2021: £2.0m)
Inventories
Inventories at 31 December 2022 at the lower of cost and net realisable value amounted to £12.6m (2021:
£10.6m). These inventories represent wine in its various stages of production from wine in tank from the
last harvest to the finished products which take around four years to produce. These additional four years
reflect the time it takes to transform our high-quality grapes into Gusbourne’s premium sparkling wine.
An important point to note is that these wine inventories already include the wine (at its various stages
of production) to support sales planned for the next four years. The anticipated underlying surplus of
net realisable value over the cost of these wine inventories, which is not reflected in these accounts, will
become an increasingly significant factor of the Group’s asset base as these inventories continue to grow.
Cash flow
The Group’s operating cash outflow flow for the year was £2.9m (2021: £3.3m). This represented an
Adjusted EBITDA loss of £1.1m (2021: £1.5m loss) and net working capital outflows (mostly an increase in
wine inventories) of £1.8m (2021: £1.8m).
Capital expenditure was £2.5m for 2022 (2021: £0.2m) and included the purchase of an additional 55
hectares of freehold land in Kent (£1.7m), plant and machinery (£0.7m) and building improvements
(£0.1m).
The capital expenditure was financed by the Group’s own cash resources and the working capital was
financed by additional drawings from the PNC facility.
15
Gusbourne PLC Report and Financial Statements 2022 Chief Financial Officer’s review continued
Financing and net debt
At 31 December 2022 the Group’s total assets of £27.9m (2021: £27.3m) were financed by:
• Shareholder’s equity of £13.4m (2021: £15.9m).
• Long term secured debt from PNC of £12.4m (2021: £9.3m). The PNC facilities are provided on a revolving
basis over a minimum period of 5 years to 12 August 2027 and allow flexible drawdown and repayments in
line with the Group’s working capital requirements. On 15 August 2022 these asset-based lending facilities
were extended by an additional £6.0m from the existing £10.5m to £16.5m. The interest rate is at the annual
rate of 2.50% per cent (2021: 2.75 per cent) over Sterling Overnight Index Average (“SONIA”), (2021: Bank
of England Base Rate). Further details are shown in note 17.
• Lease liabilities under IFRS 16 of £2.1m (2021: £2.1m).
At 31 December 2022, the Group’s net debt (PNC facility less Cash, excluding IFRS16 lease liabilities)
amounted to £12.1m (2021:£6.2m).
Katharine Berry
Chief Financial Officer
16
Gusbourne PLC Report and Financial Statements 2022 Principal risks and uncertainties
Financing
The Group plans to raise further equity and/or debt funds in the future to fund the Group’s growth strategy
over the coming years, through the issue of Gusbourne PLC shares and/or the raising of debt finance. Such
funding may not be achieved, and additional shares may have a dilutive effect on existing shareholders.
Mitigation: The Group’s senior management team has carefully developed its long-term business planning
processes in support of any such new investment and the Group benefits from a loyal and supportive
shareholder base.
Climate change
The Directors believe that climatic conditions in the South of England in recent years have generally been
favourable to the growing of grapes used in sparkling wine production. However grape yields can be
affected by certain adverse weather patterns such as late frosts and lack of sunshine during the flowering
period. These climatic impacts can be quite localised. Please also refer to the paragraph (“Crop disease”)
below.
Mitigation: The Group’s strategy to mitigate this risk is to monitor the micro climate in its existing
vineyards through the use of temperature loggers and weather stations, with particular regard to late
frosts, so that appropriate action can be promptly taken with the use of specialist frost prevention
equipment. The Group’s has also mitigated this risk by planting vines on carefully selected sites in both
West Sussex and Kent which are each subject to separate climatic conditions.
Crop disease
Commercial viticulture is a farming system prone to disease pressures. The relatively cool climate of the
UK can exacerbate these pressures. While there is no significant pressure from fatal diseases threatening
vine growing in the UK at present, there are certain diseases which may reduce yield under adverse
climatic circumstances.
Mitigation: These risks can be mitigated through good husbandry and management practices. Please also
refer to the paragraph “Climate change” above.
Competition
With the anticipated continuing growth in vineyard plantings in the South of England, the supply of
English sparkling wine is likely to continue to increase and provide increased competition from other
suppliers. This may adversely affect retail prices of English sparkling wine and the assumed levels of
pricing in the Group’s growth strategy may not be achieved. The English sparkling wine industry may also
face stronger competition from similar overseas products, which could also adversely affect the retail
prices of the Gusbourne wines.
Mitigation: The Group’s strategy remains to produce the highest quality products and develop the
Gusbourne brand with related support to attract and retain customer loyalty. The Group’s strategy to
develop International sales as a significant contribution to sales will also mitigate this competitive risk in
the UK market.
17
Gusbourne PLC Report and Financial Statements 2022 Principal risks and uncertainties continued
Political and economic environment
There continues to be political and economic uncertainty arising from the Ukrainian conflict, rising
inflationary pressures and cost of living issues which may impact demand for the Group’s products and
services and also increase the cost of producing the Group’s products.
Mitigation: The Group is mindful of the inflationary pressures that are being seen across all areas of the
business but believe it is in a position to mitigate these pressures through its sales and product strategies
and increased business efficiencies through scale and careful cost management. The Group has set
out its mitigation plans associated with worsening economic conditions as part of its Going Concern
consideration shown on page 44.
18
Gusbourne PLC Report and Financial Statements 2022 Section 172 statement
This section serves as our s172 statement and should be read in conjunction with the whole Strategic
Report. The Directors are required by the Companies Act 2006 to act in the way they consider, in good
faith, would be most likely to promote success of the Group for the benefit of its shareholders as a whole
and in doing so are required to have regard for the following:
• The likely long term consequences of any decision;
• The interests of the Group’s employees;
• The need to foster the Group’s business relationships with supplies, customers and others;
• The impact of the Group’s operations on the community and environment;
• The desirability of the Group maintaining a reputation for high standards of business conduct; and
• The need to act fairly as between shareholders of the Group.
In 2019 the Group adopted the Corporate Governance Code for Small and Mid-Size Quoted Companies
from the Quoted Companies Alliance (the “QCA Code”). The Board’s view is that the QCA Code is an
appropriate code of conduct for the Group. There are details of how the Group applies the ten principles
of the QCA Code on pages 25 to 29 of the Director’s report.
The Chairman’s, Chief Executive Officer’s and Chief Financial Officer’s statements describe the Group’s
activities, strategy and future prospects, including the considerations for long term decision making on
pages 6 to 16.
The Board considers that its major stakeholders are its employees, customers, lenders and shareholders.
When making decisions, the interests of these stakeholders is considered informally as part of the Board’s
group discussions.
The Board maintains a good relationship with the Group’s employees. The Board has constructive dialogue
with employees through the Executive Directors. Appropriate remuneration and incentive schemes
including bonuses and commissions are implemented to align employees’ objectives with those of the
Group.
The Board ensures that the Group maintains good relationships with its suppliers by contracting on their
standard business terms and paying them promptly, within agreed and reasonable terms.
Major customers are engaged with regularly. The Board receives regular reports on progress with
customer relationships to ensure that their decision making takes into account the needs of the customer
base.
The Board does not believe that the Group has a significant impact on the environments within which
it operates. The Board recognises that the Group has a duty to be responsible and is conscious that its
business processes minimise harm to the environment, and that it contributes as far as is practicable to
the local communities in which it operates.
The Board recognises the importance of maintaining high standards of business conduct. The Group
operates appropriate policies on business ethics and provides mechanisms for whistle blowing and
complaints which all employees are aware of.
The Board aims to maintain good relationships with its shareholders and treats them equally. Further
details of the how the Board communicates with its shareholders are shown on page 25.
19
Gusbourne PLC Report and Financial Statements 2022 Section 172 statement continued
As required by section 414CZA(1) of The Companies Act 2006 (Miscellaneous Reporting Regulations) we
include below how the Directors have had regard to the matters set out in section 172(1) on the principal
decisions taken in the 2022 financial year.
Financing - August 2022
Details of the financing arrangements entered into by the Group in August 2022 are shown on page 16.
The strategic report on pages 4 to 20 has been approved by the Board and signed on its behalf by:
Charlie Holland
Chief Executive Officer
20
Gusbourne PLC Report and Financial Statements 2022 Board of Directors
As at 31 December 2022
James ‘Jim’ Ormonde, Non-Executive Chairman
A member of the Audit, Remuneration and Nomination Committees.
Jim is a former newspaper and BBC journalist who left broadcasting to build Cardsave, one of the UK’s
largest independent card payment companies, now owned by WorldPay/FIS. Since selling Cardsave,
he has served on several private and public boards whilst providing strategic advice to numerous large
corporates and private equity firms. He recently founded a multi-family office in New York and London.
Mike Paul, Non-Executive Deputy Chairman
A member of the Audit, Remuneration and Nomination Committees.
Mike has worked in the wine industry for over thirty years. Having received a postgraduate Diploma in
Business Studies, he became the Managing Director of the premium wine agency Percy Fox, representing
a number of luxury wine brands. In 1990 Mike became European Director responsible for the development
of Southcorp’s business in Europe. He led Southcorp to become a major player in the UK wine market
with brands such as Penfolds and Lindemans. In 2002 Mike was appointed Managing Director of Western
Wines (UK), a leading importer of South African, Chilean and Italian wines, and owner of the leading South
African brand, Kumala. He is closely involved with Wine GB, the organisation that represents UK wine
producers.
Charlie Holland, Chief Winemaker and Chief Executive Officer (“CEO”)
Charlie, who has been head of wine making at Gusbourne for over ten years, joined the board in October
2016 as Chief Winemaker and Chief Executive Officer. He is responsible for winemaking at Gusbourne
but also represents the Group as its Chief Executive Officer and manages the day to day running of the
business in conjunction with Katharine Berry, Jon Pollard and other members of the executive team in
what remains a highly collaborative and relatively flat organisation.
Charlie holds a degree in marketing and a BSc in Viticulture and Oenology from Plumpton College. He has
held a number of overseas wine making positions including in France, Germany, Australia, New Zealand
and California. Prior to joining Gusbourne Charlie was winemaker for four years at Ridgeview, a well-known
English sparkling wine producer.
Katharine Berry, Chief Financial Officer (“CFO”)- appointed 21 March 2023
Katharine joined Gusbourne in September 2023. She is responsible for Finance and Human Resources,
working with Charlie Holland, Jon Pollard and other members of the executive team in running the
business.
Katharine is a fellow of the Institute for Chartered Accountants of England and Wales and holds an
honours degree in Biology from the University of Manchester. She has held a number of senior positions
as a Finance Director, with her previous role being in a fast growth Drinks business, prior to joining
Gusbourne.
21
Gusbourne PLC Report and Financial Statements 2022 Board of Directors continued
Jon Pollard, Chief Vineyard Manager and Chief Operating Officer - resigned 21 March 2023
Jon has been the vineyard manager at the Gusbourne Estate since the first vines were planted eighteen
years ago in 2004. He joined the board on 26 October 2016 as Chief Vineyard Manager and Chief
Operating Officer. Following his resignation from the board in March 2023, he continues to be responsible
for Gusbourne’s vineyards and works closely with Charlie Holland and Katharine Berry on the day to day
operations of the business.
Jon holds an honours degree in general agriculture from the University of Aberdeen and is also a graduate
in wine studies from Plumpton College. He has worked closely with Andrew Weeber over the past twelve
years to establish the vineyards which are widely regarded as some of the best in the country in terms of
both grape quality and yield. Jon supervises the vineyard operations in both Kent and West Sussex and
works closely with the Chief Winemaker to ensure the quality and consistency of the final product.
Lord Arbuthnot PC, Non-Executive Director
A member of the Audit, Remuneration (Chairman) and Nomination (Chairman) Committees.
James Arbuthnot was a Conservative MP for 28 years and served as Minister for Defence Procurement,
Chief Whip and Chairman of the Defence Select Committee. He was appointed to the House of Lords in
2015.
James is the Chairman of the Nuffield Trust for the Forces of the Crown, and of the Airey Neave Trust,
and a member of the Advisory Board of the Royal United Services Institution (RUSI) and of Montrose
Associates.
He is chairman of the Advisory Panel of the defence company Thales (UK) and Chairman of Electricity
Resilience Ltd.
Matthew David Clapp, Non-Executive Director
A member of the Audit, Remuneration and Nomination Committees.
Matthew is a non-executive Chairman of Shutdown Maintenance Services Ltd, a director of MDC
Consulting Limited and a director of Joseridan Family Office. Matthew also consults for Levendi
Investment Management, an investment advisory firm that advises on the use of structured investments
and derivatives with over £800 million of assets under advice.
Matthew has spent over 15 years working in the markets for high end real estate developments, private
members clubs and financial services. Matthew holds an MBA and is a Freeman of the City of London.
Ian George Robinson BA FCA, Non–Executive Director
A member of the Audit (Chairman), Remuneration and Nomination Committees.
Ian is currently Non-Executive Chairman of Jaywing Plc, an AIM listed agency and consulting business
specialising in data science. He is also a director of a number of privately-owned businesses.
He has held other senior financial appointments both in the UK and overseas. He is a Fellow of the
Institute of Chartered Accountants in England & Wales and holds an honours degree in economics from
The University of Nottingham.
22
Gusbourne PLC Report and Financial Statements 2022 Andrew Weeber BSc, MB ChB, FCS, Non-Executive Director - resigned 21 March 2023
A member of the Audit, Remuneration and Nomination Committees.
After graduating from the University of Stellenbosch in 1968 with a BSC in Biochemistry & Physiology,
Andrew continued to a Bachelor of Medicine and Surgery. He specialised at the University of Cape Town,
and was awarded his FCS in Trauma and Orthopaedic Surgery in 1984.
Andrew went on to pursue a career spanning more than 20 years practising as a consultant orthopaedic
surgeon in South Africa and the United Kingdom, whilst simultaneously pursuing his entrepreneurial
interests. In 1986 he co-founded, and successfully exited, the 247-bed private Vergelegen Mediclinic
Hospital, near Cape Town. In 1988 Andrew’s interest in wine and biochemistry led him to acquire a 50%
stake in a Robertson wine estate. He sold the estate in 1991 and moved to the United Kingdom in 1992.
In the United Kingdom, he developed an orthopaedic unit within the Friarage Hospital in North Yorkshire.
He oversaw its growth to a regional specialisation centre, employing 21 surgeons. During this time,
Andrew was appointed to the Medical Committee of the Football Association of England. Andrew retired
from medicine in 2004 and focused on his personal business interests, primarily the development of the
Gusbourne Estate; a project which he had established a year earlier on his 500 acre Estate in Kent. The
first vintage was released in 2010 to critical acclaim and received numerous awards. This firmly established
Gusbourne Estate’s position at the forefront of premium English wine.
Andrew has held several board memberships, including 6 years at the 15,000 acre Alpheus Williams &
Son Timber Corporation, until its successful acquisition by the SAPP 1 Group. A member of the Audit,
Remuneration and Nomination Committees.
Paul Gerald Bentham, Non-Executive Director - resigned 21 March 2023
A member of the Audit, Remuneration and Nomination Committees.
Paul is the founder and until recently a Non-Executive Director of Retail Merchant Group Ltd. With a
background in card payment services and retail banking projects he was the founder and previously
the Executive Chairman of Cardsave UK Ltd. He is also engaged in various commercial and residential
property projects, including investment-grade office and warehouse sites and purpose built student
accommodation projects throughout the UK.
23
Gusbourne PLC Report and Financial Statements 2022 Report of the Directors
for the year ended 31 December 2022
The Directors present their report together with the audited financial statements for the year ended 31
December 2022.
As a Company whose shares are traded on the AIM market of the London Stock Exchange, the Company
complies with the Quoted Companies Alliance (‘QCA’) Corporate Governance Code (‘the Code’) and its
Statement of Compliance with the same can be found on the Company website www.gusbourne.com/
investors.
Results and dividends
The consolidated statement of comprehensive income is set out on page 39 and shows the result for the
year. No dividend was declared (December 2021: £Nil).
Principal activities
The principal activities of Gusbourne PLC (“the Company”) and its subsidiaries (“the Group”) comprise the
production, sale and distribution of premium vintage English sparkling wine.
Review of the business and future developments
A review of the business together with an indication of future developments is given in the Chairman’s
statement on page 6, in the Chief Executive’s review on pages 7 to 10 and in the Chief Financial Officer’s
review on pages 11 to 16. Principal risks and uncertainties are shown on pages 17 and 18.
Subsequent events
Details of post balance sheet events are shown in note 24 to the financial statements.
Directors
The Directors of the Company during the year were as follows:
James Ormonde (Non-Executive Chairman)
Mike Paul (Non-Executive Deputy Chairman)
Charlie Holland (Chief Executive Officer)
Katharine Berry (Chief Financial Officer), appointed 21 March 2023
Jon Pollard (Chief Operating Officer), resigned 21 March 2023
Lord Arbuthnot PC (Non-Executive Director)
Paul Bentham (Non-Executive Director), resigned 21 March 2023
Matthew Clapp (Non-Executive Director)
Ian Robinson (Non-Executive Director)
Andrew Weeber (Non-Executive Director), resigned 21 March 2023
24
Gusbourne PLC Report and Financial Statements 2022 The beneficial interest of Directors who held office at 31 December 2022 in the share capital of the
Company is shown below:
Andrew Weeber
Paul Bentham
Ian Robinson
Jim Ormonde
Mike Paul
Lord Arbuthnot PC
Matthew Clapp
Jon Pollard
Charlie Holland
Katharine Berry
Ordinary shares of 1 pence each
December 2022
Number Percentage
December 2021
Number
Percentage
2,722,221
1,835,630
542,753
300,000
160,806
111,360
73,027
48,394
42,000
-
4.48%
3.02%
0.89%
0.49%
0.26%
0.18%
0.12%
0.08%
0.07%
-
2,722,221
1,835,630
542,753
300,000
160,806
111,360
73,027
48,394
42,000
-
4.48%
3.02%
0.89%
0.49%
0.26%
0.18%
0.12%
0.08%
0.07%
-
Corporate governance statement
The Board of Gusbourne plc have adopted the Quoted Companies Alliance (QCA) Corporate Governance
Code in line with the London Stock Exchange’s recent changes to the AIM Rules requiring all AIM-listed
companies to adopt and comply with a recognised corporate governance code from 28 September 2018.
Our report sets out in broad terms how we presently comply with this code. We will also provide annual
updates on our compliance with the code.
Principle 1: Establish a strategy and business model which promote long-term value for shareholders
Please refer to the Chief Executive’s review on pages 7 to 10.
Principle 2: Seek to understand and meet shareholder needs and expectations
The Group remains committed to listening and communicating openly with its shareholders to ensure that
its strategy, business model and performance are clearly understood.
The AGM is the main forum for dialogue with retail shareholders and the Board. The Notice of Meeting
is sent to shareholders at least 21 days before the meeting. The chairs of the Board and all committees,
together with all other Directors, routinely attend the AGM and are available to answer questions raised by
shareholders. For each vote, the number of proxy votes received for, against and withheld is announced at
the meeting. The results of the AGM are subsequently published via RNS.
The Board as a whole is kept informed of the views and concerns of major shareholders. Members of the
Board are available to meet with major shareholders if required to discuss issues of importance to them.
25
Gusbourne PLC Report and Financial Statements 2022 Report of the Directors continued
Principle 3: Take into account wider stakeholder and social responsibilities and their implications for
long-term success
Engaging with our stakeholders, including shareholders, suppliers, customers and employees, strengthens
our relationships helps the Board to understand the issues that matter most to them and our business and
enables us to make better business decisions and deliver on our commitments.
Feedback from our stakeholders is continually monitored and reviewed by the Board with appropriate
actions taken as necessary.
Principle 4: Embed effective risk management, considering both opportunities and threats, throughout
the organisation
The principal risks and uncertainties facing the Group are set out on pages 17 and 18. This section also
details how these risks are mitigated. They are also subject to regular review by the Audit Committee.
Principle 5: Maintaining the Board as a well-functioning, balanced team led by the Chair
The Board comprises the Non-Executive Chairman, two Executive Directors and four Non-Executive
Directors. The Board maintains a suitable balance between independence and knowledge of the Group
and its market, to enable it to discharge its duties and responsibilities effectively. All Directors are
encouraged to use their independent judgement and to challenge all matters, both operational and
strategic. The Group believes stability of the Board is essential to the execution of long-term strategic
plans.
The Board considers the Non-Executive Director’s of the Group to be independent. The Board notes that
Ian Robinson and Matthew Clapp are associated with the Group’s major shareholder which could appear
to impair their independence for the purposes of the Code. However, the Board considers that both Ian
Robinson and Matthew Clapp are able to bring an independent view to bear on all matters dealt with by
the Board and its various Committees. Independence is a board judgement.
The Group has effective procedures in place to monitor and deal with conflicts of interest. The Board is
aware of the other commitments and interests of its Directors, and changes to these commitments and
interests are reported to and, where appropriate, agreed with the rest of the Board.
Further information on the board’s skill set, including biographies of each director and their relevant
expertise can be found on pages 21 to 23.
Principle 6: Ensure that between them the Directors have the necessary up-to-date experience, skills
and capabilities
The Board is satisfied that, between the Directors, it has an effective and appropriate balance of skills
and experience for the market in which the Group operates together with the financial and general
management skills, including accounting practices and broader plc governance experience, to deliver the
necessary input to and oversight of the different opportunities and threats the Group faces.
26
Gusbourne PLC Report and Financial Statements 2022 Principle 7: Evaluate Board performance based on clear and relevant objectives, seeking continuous
improvement
Both the Chairman, James Ormonde and the Deputy Chairman, Mike Paul assess the individual
contributions of each of the members of the team to ensure that:
• Their contribution is relevant and effective
• That they are committed
• Where relevant, they have maintained their independence
Over the next 12 months we intend to review the performance of the team as a unit to ensure that the
members of the board collectively function in an efficient and productive manner. This will be done by
surveying the Group’s senior leadership team, as well as through other stakeholder engagement.
The make-up of the Board and succession planning is reviewed periodically to ensure the Group is not
unduly exposed to either the loss of members of the Board or poor performance. Board members are re-
elected every three years.
Principle 8: Promote a culture that is based on ethical values and behaviours
The Board aims to lead by example and do what is in the best interests of the Group. Our culture is highly
collaborative in what remains a relatively flat organisation, with employees from across the business
encouraged to work closely together, value the contribution that each person makes and always act in the
best interests of the customer.
Principle 9: Maintain governance structures and processes that are fit for purpose and support good
decision-making by the Board
Board programme
The Board meets at least four times each year where it sets direction for the Group.
A schedule of dates is compiled before the beginning of each financial year for that year’s six Board
meetings, aligned as optimally as possible with the Group’s financial and trading calendars, while also
ensuring an appropriate spread of meetings across the financial year. This may be supplemented by
additional meetings as and when required.
Before each meeting, a formal agenda is produced, and the Board and its Committees receive relevant
papers several days before meetings take place. Each matter is discussed, and any Director may challenge
Group proposals, after which decisions are taken democratically. Should any Director have any concern
that remains unresolved, they may ask for that concern to be noted in the minutes of the meeting, which
are then circulated to all Directors. The Board or relevant Committee may agree actions, which are then
followed up by the Group’s management.
Roles of the Board, Chairman and Chief Executive Officer
The Board is responsible for the long-term success of the Group. There is a formal schedule of matters
reserved to the Board. It is responsible for overall Group strategy; approval of major investments (whether
Capex or Opex); approval of the annual and interim results; annual budgets; dividend policy; and Board
structure. It monitors the exposure to key business risks and reviews the strategic direction of all trading
27
Gusbourne PLC Report and Financial Statements 2022 Report of the Directors continued
subsidiaries, their annual budgets and their performance in relation to those budgets. There is a clear
division of responsibility at the head of the Group. The Chairman is responsible for running the business
of the Board and for ensuring appropriate strategic focus and direction. The Chief Executive Officer is
responsible for proposing the strategic focus to the Board, implementing it once it has been approved and
overseeing the management of the Group through the Executive Team.
All Directors regularly receive relevant and timely information on the Group’s operational and financial
performance in advance of meetings. The business reports monthly on its headline performance against
its agreed budget, and prior year performance and the Board reviews the monthly update on performance
with any significant variances reviewed at each meeting. Where appropriate, senior executives below
Board level may attend Board meetings to present business updates.
Executive Team
The Executive Team consists of Charlie Holland (Chief Executive Officer), Katharine Berry (Chief Financial
Officer) and three non-directors, with input from the divisional managers and teams. They are responsible
for formulation of the proposed strategic focus for submission to the Board, the day-to-day management
of the Group’s businesses and its overall trading, operational and financial performance in fulfilment of that
strategy, as well as plans and budgets approved by the Board of Directors. It also manages and oversees
key risks, management development and corporate responsibility programmes. The Chief Executive
Officer reports to the plc Board on issues, progress and recommendations for change.
Board committees
The Board is supported by the Audit, Remuneration and Nomination committees. Each committee has
access to any resources, information and advice it deems necessary, at the cost of the Group, to enable
the committee to discharge its duties. The terms of reference of each committee are available on the
Gusbourne plc investors’ website.
The Remuneration Committee comprises Lord Arbuthnot PC (Chairman), James Ormonde, Matthew
Clapp, Ian Robinson and Mike Paul and meets at least twice a year and at such other times as the
Chairman of the Committee requires. The Committee considers all material elements of the remuneration
policy to ensure that remuneration is sufficient to attract, retain and motivate Executive Directors and
senior management of the quality required to manage the Group successfully. This is performed with
reference to independent remuneration research and professional advice. The Committee recommends to
the Board the framework for the remuneration packages of the individual Executive Directors. The Board
is then responsible for implementing the recommendations although no Director is involved in deciding
his own remuneration. The Directors are not permitted to vote on their own terms and conditions of
remuneration.
The Audit Committee comprises Ian Robinson (Chairman), James Ormonde, Lord Arbuthnot PC,
Matthew Clapp and Mike Paul and meets at least twice a year and at such other times as the Chairman
of the Committee requires. The external auditors attend for part or all of each meeting. The Committee
is responsible for reviewing a wide range of matters, including half-year and annual results before
their submission to the Board, and for monitoring the controls that are in force to ensure the integrity
of information reported to shareholders. The Committee advises the Board on the appointment of
external auditors and on their remuneration for both audit and non-audit work, and discusses the nature,
scope and results of the audit with the external auditors. The Committee keeps under review the cost
effectiveness and the independence and objectivity of the external auditors. The Audit Committee is
further responsible for ensuring that the ethical and compliance commitments of management and
employees are understood throughout the Group.
28
Gusbourne PLC Report and Financial Statements 2022 The Committee has considered that in light of the present size of the Group that a separate internal audit
function is not currently required. The Committee’s position on the internal audit function is reviewed
regularly, at least once a year.
The Nomination Committee comprises Lord Arbuthnot (Chairman), James Ormonde, Matthew Clapp,
Ian Robinson and Mike Paul and meets at least twice a year. The Committee is responsible for reviewing
the composition and structure of the Board and for making recommendations to the Board for its
consideration and approval.
Principle 10: Communicate how the Company is governed and is performing by maintaining a dialogue
with shareholders and other relevant stakeholders
The Company communicates with shareholders through the Annual Report and Accounts, full-year and
half-year announcements, RNS and RNS Reach for significant developments, the Annual General Meeting
(AGM) and one-to-one meetings with large existing or potential new shareholders. A range of corporate
information, including all Company announcements, is also available to shareholders, investors and the
public on the Company’s investor website, www.gusbourneplc.com.
The Board receives regular updates on the views of shareholders through briefings and reports from other
members of the Board and the Company’s brokers. The Group regularly seeks feedback from employees
through a number of mechanisms. This information is used to improve service in general as well as
addressing any specific concerns.
Substantial shareholdings
Current shareholdings in excess of 3%:
Shareholder
Shareholding
Lord Ashcroft KCMG PC 66.35 %
Andrew Weeber
Paul Bentham
4.48 %
3.02 %
At 31 December 2022 the ultimate controlling party of the Company is Lord Ashcroft KCMG PC by virtue
of his shareholding in the Company.
Charitable and political donations
During the year, the Group made charitable and political donations of £Nil (December 2021: £Nil).
Directors’ third party indemnity provisions
The Group maintains appropriate insurance to cover Directors’ and Officers’ liability. The Group provides
an indemnity in respect of all the Group’s Directors. Neither the insurance nor the indemnity provides
cover where the Director has acted fraudulently or dishonestly.
29
Gusbourne PLC Report and Financial Statements 2022 Report of the Directors continued
Financial risk management
The Group’s objectives and policies relating to financial risk management are fully explained in Note 3 on
pages 52 to 54.
Directors’ responsibilities
The Directors are responsible for preparing the strategic report, director’s report and the financial
statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that
law the Directors have elected to prepare the Group financial statements and the Company financial
statements in accordance with United Kingdom adopted International Accounting Standards (IAS).
Under company law the Directors must not approve the financial statements unless they are satisfied that
they give a true and fair view of the state of affairs of the Group and Company and of the profit or loss of
the Group for that year.
The Directors are also required to prepare financial statements in accordance with the rules of the London
Stock Exchange for companies trading securities on the Alternative Investment Market.
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;
•
state whether the Group and the Company financial statements have been prepared in accordance with
UK adopted IAS, subject to any material departures disclosed and explained in the financial statements;
and
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the
company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and
explain the Group’s transactions and disclose with reasonable accuracy at any time the financial position
of the Group and enable them to ensure that the financial statements comply with the requirements of the
Companies Act 2006. They are also responsible for safeguarding the assets of the Group and hence for
taking reasonable steps for the prevention and detection of fraud and other irregularities.
Website publication
The Directors are responsible for ensuring the annual report and the financial statements are made
available on a website. Financial statements are published on the Company’s website in accordance with
legislation in the United Kingdom governing the preparation and dissemination of financial statements,
which may vary from legislation in other jurisdictions. The maintenance and integrity of the Company’s
website is the responsibility of the Directors. The Directors’ responsibility also extends to the ongoing
integrity of the financial statements contained therein.
30
Gusbourne PLC Report and Financial Statements 2022 Auditors
All of the current Directors have taken all the steps that they ought to have taken to make themselves
aware of any information needed by the Company’s auditors for the purpose of their audit and to
establish that the auditors are aware of that information. The Directors are not aware of any relevant audit
information of which the auditors are unaware.
A resolution to reappoint BDO LLP as auditors will be proposed at the next annual general meeting.
By order of the Board
Katharine Berry
Secretary and Director
Date: 6 June 2023
31
Gusbourne PLC Report and Financial Statements 2022 Report of the independent auditors
for the year ended 31 December 2022
Opinion on the financial statements
In our opinion:
•
•
•
•
the financial statements give a true and fair view of the state of the Group’s and of the Parent Company’s
affairs as at 31 December 2022 and of the Group’s loss for the year then ended;
the Group financial statements have been properly prepared in accordance with UK adopted international
accounting standards;
the Parent Company financial statements have been properly prepared in accordance with United
Kingdom Generally Accepted Accounting Practice; and
the financial statements have been prepared in accordance with the requirements of the Companies Act
2006.
We have audited the financial statements of Gusbourne Plc (the ‘Parent Company’) and its subsidiaries
(the ‘Group’) for the year ended 31 December 2022 which comprise the consolidated statement of
comprehensive income, the consolidated statement of financial position, the consolidated statement of
cash flows, the consolidated statement of changes in equity, the company balance sheet, the company
statement of changes in equity and notes to the financial statements, including a summary of significant
accounting policies.
The financial reporting framework that has been applied in the preparation of the Group financial
statements is applicable law and UK adopted international accounting standards. The financial reporting
framework that has been applied in the preparation of the Parent Company financial statements is
applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 101
Reduced Disclosure Framework (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK))
and applicable law. Our responsibilities under those standards are further described in the Auditor’s
responsibilities for the audit of the financial statements section of our report. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We remain independent of the Group and the Parent Company in accordance with the ethical
requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s
Ethical Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in
accordance with these requirements.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis
of accounting in the preparation of the financial statements is appropriate. Our evaluation of the Directors’
assessment of the Group and the Parent Company’s ability to continue to adopt the going concern basis
of accounting have been detailed further in our assessment of key audit matters.
32
Gusbourne PLC Report and Financial Statements 2022 Based on the work we have performed, we have not identified any material uncertainties relating to events
or conditions that, individually or collectively, may cast significant doubt on the Group and the Parent
Company’s ability to continue as a going concern for a period of at least twelve months from when the
financial statements are authorised for issue.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in
the relevant sections of this report.
Overview
Coverage
100% (2021: 100%) of Group loss before tax
100% (2021: 100%) of Group revenue
100% (2021: 100%) of Group total assets
Key audit matters
Going concern
Materiality
Group financial statements as a whole
2022
7
2021
7
£300,000 (2021:£199,000) based on 1% (2021: 0.7%) of Total Assets
An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of the Group and its environment, including
the Group’s system of internal control, and assessing the risks of material misstatement in the financial
statements. We also addressed the risk of management override of internal controls, including assessing
whether there was evidence of bias by the Directors that may have represented a risk of material
misstatement.
The Group consists of the Parent company and its sole subsidiary. The engagement team performed full
scope audits on both components.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial statements of the current period and include the most significant assessed risks of
material misstatement (whether or not due to fraud) that we identified, including those which had the
greatest effect on: the overall audit strategy, the allocation of resources in the audit, and directing the
efforts of the engagement team. This matter was 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
this matter.
33
Gusbourne PLC Report and Financial Statements 2022
Report of the independent auditors
for the year ended 31 December 2022 continued
Key audit matter
Going
concern
Note 1 on
page 44
The Directors are required
to consider whether the
Group has adequate working
capital and long-term funding
facilities to operate for the
foreseeable future, which is
considered to be a period of at
least 12 months from the date
of approval of the financial
statements (the “going concern
period”).
The Group forecasts assume
continued support from
existing lenders with increased
facilities being made available
to support the Group’s 3-year
plan. If additional facilities are
not given, the Directors, based
on their sensitivities, consider
that the Group can operate
with existing financing over the
going concern period.
The disclosures may not
appropriately reflect the
process undertaken by the
Directors and the conclusions
reached.
Given the judgements made in
the forecasts, this is considered
to be the key area of focus for
the audit and hence a key audit
matter given the business is
in the development stage and
continues to make a loss.
How the scope of our audit addressed the key audit
matter
We reviewed and challenged the Directors’ forecasts to
assess the Group and Parent Company’s ability to meet
their financial obligations as they fall due and to continue
as a going concern within the period of twelve months
from the date of approval of the financial statements.
This included reviewing the assumptions and inputs in the
cash flow forecast to assess whether these were in line
with our understanding of the Group’s operations and
other information obtained by us during the course of the
audit. The forecasts included multiple sensitized scenarios
as discussed in Note 1, including the scenario where
additional financing is not obtained.
We performed a mechanical check on the Directors’ cash
flow forecasts. We have challenged the assumptions
within the forecast including comparing forecast revenue
between scenarios to the audited figures for the current
financial year and to trading since the year end.
We performed sensitivity analysis on the cash flow
forecasts and assessed the available headroom under
sensitivity scenarios. We considered whether the
reductions in operating cost and capital expenditure as
part of Directors’ scenario testing were committed or are
discretionary.
We held discussions with management and relevant
Directors to understand their sensitivities, areas of
uncertainty and recent discussions over additional
financing and reviewed evidence to support these.
We also assessed the compliance of the forecast with
loan covenants to ensure compliance with financing
requirements through the going concern period.
We have reviewed and challenged the adequacy of the
disclosures being made by the Directors to assess if they
reflected the analysis performed by the Directors and that
all material factors were considered.
Key observations:
Our observations are set out in the Conclusions relating
to going concern section above.
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the
effect of misstatements. We consider materiality to be the magnitude by which misstatements, including
34
Gusbourne PLC Report and Financial Statements 2022 omissions, could influence the economic decisions of reasonable users that are taken on the basis of the
financial statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality,
we use a lower materiality level, performance materiality, to determine the extent of testing needed.
Importantly, misstatements below these levels will not necessarily be evaluated as immaterial as we
also take account of the nature of identified misstatements, and the particular circumstances of their
occurrence, when evaluating their effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole
and performance materiality as follows:
Group financial
statements
Parent company financial
statements
2022
£
2021
£
2022
£
2021
£
Materiality
300,000
199,000
153,000
179,000
Basis for determining materiality
1% of Total
Assets
0.7% of Total
Assets
1% of total
assets
90% of Group
materiality
Rationale for the benchmark applied
The Group is at its development stage and continues to
make losses. We have also increased the percentage applied
because as the Group exits from it’s development stage, we
expect to consider an alternative benchmark. This increase
will ensure we do not experience a sharp change in the year
we reassess the benchmark used.
Performance materiality
225,000
149,000
115,000
134,000
Basis for determining performance
materiality
Rationale for the percentage applied for
performance materiality
On the basis of our risk assessment, together with our
assessment of the Group’s overall control environment, our
judgement was that performance materiality should be 75%
(2021: 75%) of materiality
On the basis of our understanding of the Group and the risk
that the financial statements may contain misstatements.
There was no change to the percentage applied from the
prior year.
Component materiality
We set materiality for the only significant component of the Group, based on a percentage of 1% of
total assets, being £297,000 (2021: £179,000 based on 90% of Group materiality). In the audit of this
component, we further applied performance materiality levels of 75% of the component materiality to our
testing to ensure that the risk of errors exceeding component materiality was appropriately mitigated.
Reporting threshold
We agreed with the Audit Committee that we would report to them all individual audit differences in
excess of £15,000 (2021: £9,950). We also agreed to report differences below this threshold that, in our
view, warranted reporting on qualitative grounds.
35
Gusbourne PLC Report and Financial Statements 2022
Report of the independent auditors
for the year ended 31 December 2022 continued
Other information
The Directors are responsible for the other information. The other information comprises the information
included in the annual report other than the financial statements and our auditor’s report thereon. Our
opinion on the financial statements does not cover the other information and, except to the extent
otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our
responsibility is to read the other information and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our knowledge obtained in the course of the audit,
or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent
material misstatements, we are required to determine whether this gives rise to a material misstatement in
the financial statements themselves. If, based on the work we have performed, we conclude that there is a
material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Other Companies Act 2006 reporting
Based on the responsibilities described below and our work performed during the course of the audit,
we are required by the Companies Act 2006 and ISAs (UK) to report on certain opinions and matters as
described below.
Strategic report and
Directors’ report
Matters on which we
are required to report
by exception
In our opinion, based on the work undertaken in the course of the audit:
•
the information given in the Strategic report and the Directors’ report for the financial
year for which the financial statements are prepared is consistent with the financial
statements; and
•
the Strategic report and the Directors’ report have been prepared in accordance with
applicable legal requirements.
In the light of the knowledge and understanding of the Group and Parent Company
and its environment obtained in the course of the audit, we have not identified material
misstatements in the strategic report or the Directors’ report.
We have nothing to report in respect of the following matters in relation to which the
Companies Act 2006 requires us to report to you if, in our opinion:
•
•
adequate accounting records have not been kept by the Parent Company, or returns
adequate for our audit have not been received from branches not visited by us; or
the Parent Company financial statements are not in agreement with the accounting
records and returns; or
•
certain disclosures of Directors’ remuneration specified by law are not made; or
•
we have not received all the information and explanations we require for our audit.
Responsibilities of Directors
As explained more fully in the Directors’ responsibilities statement, 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.
36
Gusbourne PLC Report and Financial Statements 2022 In preparing the financial statements, the Directors are responsible for assessing the Group’s and the
Parent Company’s ability to continue as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting unless the Directors either intend to
liquidate the Group or the Parent Company or to cease operations, or have no realistic alternative but to
do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of
these financial statements.
Extent to which the audit was capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of
irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities,
including fraud is detailed below:
We gained an understanding of the legal and regulatory framework applicable to the Group and the
industry in which it operates and considered the risk of acts by the Company that were contrary to
applicable laws and regulations, including fraud. We focused on laws and regulations that could give rise
to a material misstatement in the financial statements, including, but not limited to, financial reporting
legislation, the Companies Act 2006, and tax legislation. Our procedures included:
• We assessed the extent of compliance with these laws and regulations as part of our audit procedures on
the related financial statement items.
• Agreeing the financial statement disclosures to underlying supporting documentation
• Review of minutes of board meeting to identify any known or suspected irregularities including non-
compliance with laws and regulations and fraud
• Enquiries with management and Directors about known or suspected non-compliance with laws and
regulations and fraud.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement
team members who were all deemed to have appropriate competence and capabilities and remained alert
to any indications of fraud or non-compliance with laws and regulations throughout the audit.
Fraud
We assessed the susceptibility of the financial statements to material misstatement, including fraud. Our
risk assessment procedures included:
• Enquiry with management and those charged with governance regarding any known or suspected
instances of fraud;
37
Gusbourne PLC Report and Financial Statements 2022 Report of the independent auditors
for the year ended 31 December 2022 continued
• Review of minutes of meeting of those charged with governance to identify any known or suspected
instances of fraud;
• Obtaining an understanding of the Group’s policies and procedures relating to:
• Detecting and responding to the risks of fraud; and
•
Internal controls established to mitigate risks related to fraud.
• Performing analytical procedures to identify any unusual or unexpected relationships that may indicate
risks of material misstatement due to fraud;
• Considering remuneration incentive schemes and performance targets and the related financial statement
areas impacted by these.
Based on our risk assessment, we considered the areas most susceptible to fraud to be in the recording of
journal entries.
Our procedures in respect of the above included:
• We addressed the risk of management override of internal controls through testing journals, considering
the rationale behind them and obtaining supporting documentation;
• We evaluated whether there was evidence of management bias by the Directors in accounting estimates
that represented a risk of material misstatement due to fraud. In respect of the fair value of biological
assets and the impairment of goodwill and intangibles, we challenged the assumptions and judgements
made by the Directors in their significant accounting estimates by obtaining corroborative evidence and
forming our own expectations where appropriate;
Our audit procedures were designed to respond to risks of material misstatement in the financial
statements, recognising that the risk of not detecting a material misstatement due to fraud is higher
than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by,
for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit
procedures performed and the further removed non-compliance with laws and regulations is from the
events and transactions reflected in the financial statements, the less likely we are to become aware of it.
A further description of our responsibilities is available on the Financial Reporting Council’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of our report
This report is made solely to the Parent Company’s members, as a body, in accordance with Chapter 3 of
Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the
Parent Company’s members those matters we are required to state to them in an auditor’s report and for
no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to
anyone other than the Parent Company and the Parent Company’s members as a body, for our audit work,
for this report, or for the opinions we have formed.
6 June 2023
BDO LLP is a limited liability partnership registered in England and Wales (with registered number
OC305127).
Hannah Pop
(Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
London, UK
38
Gusbourne PLC Report and Financial Statements 2022 Consolidated statement of
comprehensive income
for the year ended 31 December 2022
Revenue
Excise duties
Net revenue
Cost of sales
Gross profit
Year ended
31 December
2022
£’000
Year ended
31 December
2021
£’000
6,858
(615)
6,243
4,613
(422)
4,191
Note
4
4
4
(2,546)
(1,847)
3,697
2,344
Fair value movement in biological produce
13
(239)
(704)
Administrative expenses
(5,561)
(4,396)
Loss from operations
Finance expenses
Loss before tax
Tax credit
5
8
9
(2,103)
(496)
(2,756)
(817)
(2,599)
(3,573)
74
-
Loss and total comprehensive loss for the year attributable to owners of the parent
(2,525)
(3,573)
Loss per share attributable to the ordinary equity holders of the parent:
Basic (pence)
Diluted (pence)
10
10
(4.17)
(4.17)
(7.29)
(7.29)
The notes on pages 44 to 68 form part of these financial statements
39
Gusbourne PLC Report and Financial Statements 2022 Consolidated statement of
financial position
at 31 December 2022
Assets
Non-current assets
Intangibles
Property, plant and equipment
Other receivables
Current assets
Biological Produce
Inventories
Trade and other receivables
Cash and cash equivalents
Total assets
Liabilities
Current liabilities
Trade and other payables
Lease liabilities
Non-current liabilities
Loans and borrowings
Lease liabilities
Total liabilities
Net assets
40
31 December
2022
£’000
31 December
2021
£’000
Note
11
12
15
13
14
15
19
16
18
17
18
1,007
14,198
16
15,221
1,007
12,343
32
13,382
-
-
12,579
10,638
1,291
269
14,139
29,360
1,275
3,128
15,041
28,423
(1,500)
(84)
(1,584)
(12,373)
(1,994)
(14,367)
(15,951)
(1,118)
(89)
(1,207)
(9,326)
(2,005)
(11,331)
(12,538)
13,409
15,885
Gusbourne PLC Report and Financial Statements 2022 Issued capital and reserves attributable to owners of the parent
Share capital
Share premium
Merger reserve
Share option reserve
Retained earnings
Total equity
31 December
2022
£’000
31 December
2021
£’000
Note
20
21
21
21
21
12,191
21,144
(13)
7
(19,920)
13,409
12,190
21,103
(13)
-
(17,395)
15,885
The financial statements were approved and authorised for issue by the Board of Directors on 6 June
2023 and were signed on its behalf by:
James Ormonde
Non-Executive Chairman
Charlie Holland
Chief Executive Officer
The notes on pages 44 to 68 form part of these financial statements
41
Gusbourne PLC Report and Financial Statements 2022 Consolidated statement of
cash flows
for the year ended 31 December 2022
31 December
2022
£’000
31 December
2021
£’000
Note
(2,599)
(3,573)
12
12
8
13
12
12
20
19
19
601
(28)
496
239
7
74
(2,049)
385
599
-
817
704
-
(318)
(1,886)
349
(2,874)
(3,308)
(2,502)
28
(2,474)
(195)
-
(195)
(4,547)
(2,944)
7,620
(101)
(456)
(66)
46
(7)
-
2,489
5,584
(99)
(289)
(20)
5,715
(359)
(1,219)
6,369
(2,859)
2,866
3,128
262
269
3,128
Cash flows from operating activities
Loss for the year before tax
Adjustments for:
Depreciation of property, plant and equipment
Sale of property, plant and equipment
Finance expense
Fair value movement in biological produce
Equity share options issued
Increase in trade and other receivables
Increase in inventories
Increase in trade and other payables
Cash outflow from operations
Investing activities
Purchases of property, plant and equipment, excluding vineyard establishment
Sale of property, plant and equipment
Net cash from investing activities
Financing activities
Revolving facility repayments
Revolving facility drawdowns
Repayment of lease liabilities
Interest paid
Loan issue costs
Issue of ordinary shares
Share issue expense
Repayment of deep discount bonds
Net cash from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
The notes on pages 44 to 68 form part of these financial statements
42
Gusbourne PLC Report and Financial Statements 2022
Consolidated statement of
changes in equity
for the year ended 31 December 2022
1 January 2021
Comprehensive loss for the year
Share issue
Share issue expenses
31 December 2021
Share
capital
£’000
12,048
-
142
-
12,190
Share
premium
£’000
10,915
-
10,547
(359)
21,103
1 January 2022
12,190
21,103
Comprehensive loss for the year
Share issue
Share issue expenses
Equity share options issued
-
1
-
-
-
48
(7)
-
Merger
reserve
£’000
(13)
-
-
-
(13)
(13)
-
-
-
-
31 December 2022
12,191
21,144
(13)
The notes on pages 44 to 68 form part of these financial statements
Total
attributable
to equity
holders of
parent
£’000
9,128
(3,573)
10,689
(359)
15,885
15,885
(2,525)
49
(7)
7
Retained
earnings
£’000
(13,822)
(3,573)
-
-
(17,395)
(17,395)
(2,525)
-
-
-
(19,920)
13,409
Share
option
reserve
£’000
-
-
-
-
-
-
-
-
-
7
7
43
Gusbourne PLC Report and Financial Statements 2022 Notes forming part of the financial
statements
for the year ended 31 December 2022
Gusbourne PLC (the “Company”) is a company incorporated and domiciled
in the United Kingdom and quoted on the London Stock Exchange’s AIM
market. The consolidated financial statements of the Group for the year
ended 31 December 2022 comprise the Company and its subsidiaries
(together referred to as the “Group”).
Basis of preparation
The Group’s consolidated financial statements and the Company’s financial
statements have been prepared in accordance with UK adopted international
accounting standards. The Company’s financial statements are presented on
pages 69 to 75.
The following accounting policies have been applied consistently in dealing
with items which are considered material in relation to the Group’s financial
statements.
The financial statements are presented in pounds sterling. They have been
prepared on the historical cost basis except that biological produce is stated
at fair value.
Going concern
The consolidated financial statements have been prepared on a going
concern basis in accordance with UK adopted international accounting
standards.
In coming to their conclusion the Directors have considered the Group’s
profit and cash flow based on the Group’s approved 3 year plans for the
period of at least 12 months from the date these financial statements.
The Directors have considered a scenario in which the only cash available
is from existing resources and committed facilities and planned but not yet
committed capital expenditure is deferred. As at 31 December 2022 £16.5m
was available to the Group, of which £4.2m was unutilised; represented by
cash in hand and at bank of £0.3m and undrawn funds from the Group’s
asset-based lending facility of £3.9m. Under this scenario the available
lending facilities and cash held at bank, cover working capital requirements
without the need for an increased lending facility.
In coming to their going concern conclusion, and in the light of the
uncertainty due to current economic conditions, the Directors have also
run various downside “stress test” scenarios. These scenarios assess the
impact of potential worsening economic conditions on the Group over the
next 12 months and in particular a reduction of 20% of gross sales from that
included within the Group 3-year plan. These stress tests indicate the Group
can withstand this ongoing adverse impact on revenues and cashflow for at
least the next 12 months. Under this scenario the directors have modelled
the impact of certain additional cost mitigation actions, in relation to variable
and discretionary costs. The directors believe that sufficient cost savings
could be achieved from reducing sales and marketing and administrative
costs and reducing capital expenditure to enable the Group to continue as a
going concern for the next 12 months without any reduction in the forecasted
spend on the winery and vineyard production costs. Under this scenario, the
Group could continue to operate within the available lending facilities and
cash held at bank without the need for an increased lending facility.
1
Accounting policies
44
Gusbourne PLC Report and Financial Statements 2022 1
Accounting policies
(continued)
FRS 16 Leases
The Group has entered into a number of long term leases in respect of land
and buildings in West Sussex on which the Group has planted vineyards. The
leases have a remaining life of 42 and 47 years.
Lease liabilities are measured at the present value of the contractual
payments due to the lessor over the lease term, with the discount rate
determined by reference to the rate inherent in the lease unless this is not
readily determinable, in which case The Group’s incremental borrowing rate
on commencement of the lease is used. Variable lease payments are only
included in the measurement of the lease liability if they depend on an index
or rate. In such cases, the initial measurement of the lease liability assumes
the variable element will remain unchanged throughout the lease term. Other
variable lease payments are expensed in the period to which they relate.
Right-of-use assets are initially measured at the amount of the lease liability.
Subsequent to initial measurement lease liabilities increase as a result of
interest charged at a constant rate on the balance outstanding and are
reduced for lease payments made. Right-of-use assets are amortised on a
straight-line basis over the remaining term of the leases. When the Group
revises its estimate of the term of any lease (because, for example, it
reassesses the probability of a lessee extension or termination option being
exercised), it adjusts the carrying amount of the lease liability to reflect the
payments to make over the revised term, which are discounted at the same
discount rate that applied on lease commencement. The carrying value
of lease liabilities is similarly revised when the variable element of future
lease payments dependent on a rate or index is revised. In both cases an
equivalent adjustment is made to the carrying value of the right-of-use
asset, with the revised carrying amount being amortised over the remaining
(revised) lease term.
Basis of consolidation
The Group’s financial statements consolidate the financial statements of the
Company and its subsidiary undertakings. Subsidiaries are entities controlled
by the Company. Control exists when the Company has the power, directly
or indirectly, to govern the financial and operating policies of an entity so as
to obtain benefits from its activities and the ability to use its power over the
investee to affect the amounts of the Group’s returns and which generally
accompanies interest of more than one half of the voting rights. In assessing
control, potential voting rights that presently are exercisable or convertible
are taken into account. The results of any subsidiaries sold or acquired are
included in the Group income statement up to, or from, the date control
passes. Intra-Group sales and profits are eliminated fully on consolidation.
On acquisition of a subsidiary, all of the subsidiary’s separable, identifiable
assets and liabilities existing at the date of acquisition are recorded at their
fair values reflecting their condition at that date. On disposal of a subsidiary,
the consideration received is compared with the carrying cost at the date
of disposal and the gain or loss is recognised in the income statement. The
excess of the cost of acquisition over the fair value of the Group’s share of
the identifiable net assets is recorded as goodwill. Intercompany transactions,
balances and unrealised gains on transactions between group companies
are eliminated. Subsidiaries’ results are amended where necessary to ensure
consistency with the policies adopted by the Group.
45
Gusbourne PLC Report and Financial Statements 2022 Notes forming part of the financial
statements continued
1
Accounting policies
(continued)
46
Revenue
The majority of the group’s revenue is derived from selling goods with
revenue recognised at a point in time when control of the goods has
transferred to the customer. This is generally when the goods are delivered
to the customer. However, for export sales, control might also be transferred
when the goods are dispatched by the Group or delivered either to the port
of departure or port of arrival, depending on specific terms of the contract
with a customer. There is limited judgement needed in identifying the point
control passes: once physical delivery of the products to the agreed location
has occurred, the group no longer has physical possession, usually will have
a present right to payment and retains none of the significant risks and
rewards of the goods in question.
All of the Group’s revenue is derived from fixed price contracts and therefore
the amount of revenue to be earned from each contract is determined by
reference to those fixed prices.
For all contracts there is a fixed unit price for each product sold. Therefore,
there is no judgement involved allocating the contract price to each unit
ordered in such contracts (it is the number of units multiplied by the fixed
unit price for each product sold). Where a customer orders more than one
product line, the Group is able to determine the split of the total contract
price between each product line by reference to each product’s standalone
selling prices (all product lines are capable of being, and are, sold separately).
Revenue from vineyard tours and tastings is recognised on the date on which
the tour or tasting takes place.
Net revenue is revenue less excise duties. The Group incurs excise duties
in the United Kingdom and is a production tax which becomes payable
once the Group’s products are removed from bonded premises and are
not directly related to the value of revenue. It is not included as a separate
item on invoices issued to customers. Where a customer fails to pay for
the Group’s products the Group cannot reclaim the excise duty. The Group
therefore recognises excise duty as a cost of the Group.
Financial assets
Debt instruments at amortised cost
These assets are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market. They arise principally
through the provision of goods to customers (e.g. trade receivables), but
also incorporate other types of contractual monetary asset. They are initially
recognised at fair value plus transaction costs that are directly attributable
to their acquisition or issue, and are subsequently carried at amortised cost
using the effective interest rate method, less provision for impairment. The
financial assets meet the SPPI test and are held in a ‘hold to collect’ business
model and therefore classified at amortised cost.
Impairment provisions for current and non-current trade receivables are
recognised based on the simplified approach within IFRS 9 using a provision
matrix in the determination of the lifetime expected credit losses. During
this process the probability of the non-payment of the trade receivables is
assessed. This probability is then multiplied by the amount of the expected
loss arising from default to determine the lifetime expected credit loss
for trade receivables. The historical loss rates are adjusted for current and
forward looking information relevant to the Group’s customers.
Gusbourne PLC Report and Financial Statements 2022 1
Accounting policies
(continued)
For trade receivables, which are reported net, such expected credit losses
are recognised within administrative expenses in the consolidated statement
of comprehensive income. On confirmation that the trade receivable will not
be collectable, the gross carrying value of the asset is written off against the
associated provision.
Cash and cash equivalents
Cash and cash equivalents includes cash in hand, deposits held at call with
banks, other short term highly liquid investments with original maturities of
three months or less.
Financial liabilities
Borrowings
Borrowings are initially recognised at fair value net of any transaction
costs directly attributable to the loan. They are subsequently measured at
amortised cost with interest charged to the statement of comprehensive
income based on the effective interest rate of the borrowings.
Warrants
Warrants issued to shareholders as part of an equity fund raise are accounted
for as equity instruments. Details of Warrants are shown in note 20.
Trade and other payables
Comprises trade payables and other short-term monetary liabilities, which
are initially recognised at fair value and subsequently carried at amortised
cost using the effective interest method.
Share capital
Financial instruments issued by the Group are classified as equity only to the
extent that they do not meet the definition of a financial liability. The Group’s
ordinary shares are classified as equity instruments.
Deferred taxation
Deferred tax assets and liabilities are recognised where the carrying amount
of an asset or liability in the consolidated statement of financial position
differs from its tax base, except for differences arising on:
•
•
•
the initial recognition of goodwill;
the initial recognition of an asset or liability in a transaction which is not
a business combination and at the time of the transaction affects neither
accounting or taxable profit; and
investments in subsidiaries and jointly controlled entities where the
Group is able to control the timing of the reversal of the difference and it
is probable that the difference will not reverse in the foreseeable future.
Recognition of deferred tax assets is restricted to those instances where it is
probable that taxable profit will be available against which the difference can
be utilised.
The amount of the asset or liability is determined using tax rates that have
been enacted or substantively enacted by the reporting date and are
expected to apply when the deferred tax liabilities/(assets) are settled/
(recovered).
47
Gusbourne PLC Report and Financial Statements 2022 Notes forming part of the financial
statements continued
Deferred tax assets and liabilities are offset when the Group has a legally
enforceable right to offset current tax assets and liabilities and the deferred
tax assets and liabilities relate to taxes levied by the same tax authority on
either:
•
the same taxable group company; or
• different group entities which intend either to settle current tax assets
and liabilities on a net basis, or to realise the assets and settle the
liabilities simultaneously, in each future period in which significant
amounts of deferred tax assets or liabilities are expected to be settled or
recovered.
Intangible Assets
Goodwill
Goodwill arises where a business is acquired and a higher amount is paid
for that business than the fair value of the assets and liabilities acquired.
Transaction costs attributable to acquisitions are expensed to the income
statement.
Goodwill is recognised as an asset in the statement of financial position and
is not amortised but is subject to an annual impairment review. Impairment
occurs when the carrying value of goodwill is greater than the recoverable
amount which is the higher of the value in use and fair value less disposal
costs. The present value of the estimated future cash flows from the
separately identifiable assets, termed a ‘cash generating unit’ is used to
determine the fair value less cost of disposal to calculate the recoverable
amount. The Group prepares and approves formal long term business plans
for its operations which are used in these calculations.
Brand
Brand names acquired as part of acquisitions of businesses are capitalised
separately from goodwill as intangible assets if their value can be measured
reliably on initial recognition and it is probable that the expected future
economic benefits that are attributable to the asset will flow to the Group.
Brand names have been assessed as having an indefinite life and are not
amortised but are subject to an annual impairment review. Impairment occurs
when the carrying value of the brand name is greater than the present value
of the estimated future cash flows.
Property, plant and equipment
Items of property, plant and equipment are initially recognised at cost. As
well as the purchase price, cost includes directly attributable costs.
Freehold land is not depreciated.
Vineyard establishment represents the expenditure incurred to plant and
maintain new vineyards until the vines reach productivity. Once the vineyards
are productive the accumulated cost is transferred to mature vineyards and
depreciated over the expected useful economic life of the vineyard. Vineyard
establishment is not depreciated.
1
Accounting policies
(continued)
48
Gusbourne PLC Report and Financial Statements 2022 1
Accounting policies
(continued)
Depreciation is provided on all other items of property, plant and equipment
so as to write off their carrying value over their expected useful economic
lives. It is provided at the following rates:
Freehold buildings
Plant, machinery and motor vehicles
Computer equipment
Mature vineyards
4% per annum straight line
5-25% per annum straight line
33% per annum straight line
4% per annum straight line
The carrying value of property, plant and equipment is reviewed for
impairment when events or changes in circumstances indicate that the
carrying value may not be recoverable.
Biological assets and produce
Agricultural produce is accounted for under IAS 41 Agriculture. Harvesting of
the grape crop is ordinarily carried out in October. The grapes are therefore
measured at fair value less costs to sell in accordance with IAS 41 with any
fair value gain or loss shown in the consolidated statement of comprehensive
income. The fair value of grapes is determined by reference to estimated
market prices at the time of harvest. Generally there is no readily obtainable
market price for the Group’s grapes because they are not sold on the open
market, therefore management set the values based on their experience
and knowledge of the sector including past purchase transactions. This
measurement of fair value less costs to sell is the deemed cost of the grapes
that is transferred into inventory upon harvest.
Under IAS 41, the agricultural produce is also valued at the end of each
reporting period, with any fair value gain or loss shown in the consolidated
statement of comprehensive income. Bearer plants are accounted for under
IAS 16 and are held at cost.
Inventories
Inventories are initially recognised at cost, and subsequently at the lower of
cost and net realisable value. Cost comprises all costs of purchase, costs of
conversion and other costs, including depreciation on right of use assets and
interest on lease liabilities, incurred in bringing the inventories to their present
location and condition. Grapes grown in the Group’s vineyards are included
in inventory at fair value less costs to sell at the point of harvest which is the
deemed cost for the grapes.
Weighted average cost is used to determine the cost of ordinarily
interchangeable items.
Leased assets
All leases are accounted for by recognising a right-of-use asset and a lease
liability except for leases of low value assets and leases with an expected full
term of 12 months or less.
Lease liabilities are measured at the present value of the unpaid contractual
payments over the expected lease term, with the discount rate determined
by reference to the rate inherent in the lease unless (as is typically the case)
this is not readily determinable, in which case the Group’s incremental
49
Gusbourne PLC Report and Financial Statements 2022 Notes forming part of the financial
statements continued
borrowing rate on commencement of the lease is used. On initial recognition,
the carrying value of the lease liability also includes amounts expected to
be payable under any residual value guarantee; the exercise price of any
purchase option granted in favour of the Group if it is reasonably certain to
exercise that option; and any penalties payable for terminating the lease, if
the term of the lease has been estimated on the basis of termination option
being exercised.
Right-of-use assets are initially measured at the amount of the lease liability,
reduced for any lease incentives received, and increased for lease payments
made at or before commencement of the lease and initial direct costs
incurred.
Subsequent to initial measurement, lease liabilities increase as a result of
interest charged at a constant rate on the balance outstanding and are
reduced for lease payments made. Right-of-use assets are amortised on a
straight-line basis over the remaining term of the lease or over the remaining
economic life of the asset if this is judged to be shorter than the lease term.
When the Group revises its estimate of the term of any lease, it adjusts
the carrying amount of the lease liability to reflect the payments to make
over the revised term, which are discounted at a revised discount rate that
is implicit in the lease for the remainder of the lease term. The carrying
value of lease liabilities is similarly revised if any variable element of future
lease payments dependent on a rate or index is revised. In both cases, an
equivalent adjustment is made to the carrying value of the right-of-use asset,
with the revised carrying amount being amortised over the remaining lease
term.
Right-of-use assets are reviewed regularly to ensure that the useful economic
life of the asset is still appropriate based on the usage of the asset. Where
the asset has reduced in value the Group considers the situation on an
asset-by-asset basis and either treats the reduction as an acceleration of
depreciation or as an impairment under IAS 36 ‘Impairment of Assets’.
An acceleration of depreciation occurs in those cases where there is no
opportunity or intention to utilise the asset before the end of the lease.
Exceptional items
Exceptional items are those which, by virtue of their nature, size or incidence,
either individually or in aggregate, need to be disclosed separately to allow
full understanding of the underlying performance of the Group.
Share based payments
The Group has issued share options to certain employees, in return for which
the Group receives services from employees. The fair value of the employee
services received in exchange for the grant of the options is recognised as an
expense, the Group recognise the options at their fair value at the grant date
to establish the relevant fair values for PSP & CSOP options.
The total amount to be expensed is determined by reference to the fair value
of the options granted including any market performance conditions (for
example the Group’s share price) but excluding the impact of any service or
non-market performance vesting conditions (for example the requirement of
the grantee to remain an employee of the Group).
1
Accounting policies
(continued)
50
Gusbourne PLC Report and Financial Statements 2022 1
Accounting policies
(continued)
Non-market vesting conditions are included in the assumptions regarding the
number of options that are expected to vest. The total expense is recognised
over the vesting period. At the end of each period the Group revises its
estimates of the number of options expected to vest based on the non-
market vesting conditions. It recognises the impact of any revision in the
income statement with a corresponding adjustment to equity.
2
Critical accounting policies
Estimates and judgements
The Group makes certain estimates and judgements regarding the future.
Estimates and judgements are continually evaluated based on historical
experience and other factors, including expectations of future events that
are believed to be reasonable under the circumstances. In the future, actual
experience may differ from these estimates. The estimates and judgements
that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year relate are set
out below.
There were no areas of judgement in the year. Where estimates and
assumptions have been used these are outlined below.
Fair value of biological produce
The Group’s biological produce is measured at fair value less costs to sell
at the point of harvest. The fair value of grapes is determined by reference
to estimated market prices at the time of harvest. Generally there is no
readily obtainable market price for the Group’s grapes because they are
not sold on the open market, therefore management set the values based
on their experience and knowledge of the sector including past purchase
transactions. Refer to note 13 which provides information on sensitivity
analysis around this.
Impairment reviews
The Group is required to test annually whether goodwill and brand names
have suffered any impairment. The recoverable amount is determined
based on fair value less costs of disposal calculations, which requires the
estimation of the value and timing of future cash flows and the determination
of a discount rate to calculate the present value of the cash flows. Further
information is set out in note 11. Management does not believe that any
reasonably possible change in a key assumption would result in impairment.
Fair value measurement
A number of assets and liabilities included in the Group’s financial statements
require measurement at, and/or disclosure of, fair value.
The fair value measurement of the Group’s financial and non-financial assets
and liabilities utilises market observable inputs and data as far as possible.
Inputs used in determining fair value measurements are categorised into
different levels based on how observable the inputs used in the valuation
technique utilised are (the ‘fair value hierarchy’):
51
Gusbourne PLC Report and Financial Statements 2022 Notes forming part of the financial
statements continued
2
Critical accounting policies
(continued)
• Level 1: Quoted prices in active markets for identical items (unadjusted)
• Level 2: Observable direct or indirect inputs other than Level 1 inputs
• Level 3: Unobservable inputs (i.e. not derived from market data).
The classification of an item into the above levels is based on the lowest level
of the inputs used that has a significant effect on the fair value measurement
of the item. Transfers of items between levels are recognised in the period
they occur.
• Biological Produce (Note 13)
For more detailed information in relation to the fair value measurement of the
items above, please refer to the applicable notes.
The Group is exposed to risks that arise from its use of financial instruments.
This note describes the Group’s objectives, policies and processes for
managing those risks and the methods used to measure them. Further
quantitative information in respect of these risks is presented throughout
these financial statements.
There have been no substantive changes in the Group’s exposure to financial
instrument risks, its objectives, policies and processes for managing those
risks or the methods used to measure them from previous periods unless
otherwise stated in this note.
Principal financial instruments
The principal financial instruments used by the Group, from which financial
instrument risk arises, are as follows:
Bank loans
Trade receivables
Cash and cash equivalents
Finance leases
Trade and other payables
In addition, at the Company level:
Intercompany loans.
The carrying amounts are a reasonable estimate of fair values because of the
short maturity of such instruments or their interest bearing nature.
Liquidity risk
Liquidity risk arises from the Group’s management of working capital and the
finance charges and principal repayments on its debt instruments. It is the
risk that the Group will encounter difficulty in meeting its financial obligations
as they fall due.
The Group’s policy is to ensure that it will always have sufficient cash to allow
it to meet its liabilities when they become due. The liquidity risk of the Group
is managed centrally by the group treasury function. Budgets are set and
agreed by the board in advance, enabling the Group’s cash requirements to
be anticipated.
3
Financial instruments -
risk management
52
Gusbourne PLC Report and Financial Statements 2022 3
Financial instruments -
risk management
(continued)
The following table sets out the contractual maturities (representing
undiscounted contractual cash flows) of financial liabilities:
Up to 3
months
£’000
Between
3 and 12
months
£’000
Between
1 and 2
years
£’000
Between
2 and 5
years
£’000
Over 5
years
£’000
Total
£’000
788
330
-
-
284
10,154
-
-
1,118
10,722
71
25
884
213
75
618
99
297
3,987
4,483
383
10,451
3,987
16,323
Up to 3
months
£’000
Between
3 and 12
months
£’000
Between
1 and 2
years
£’000
Between
2 and 5
years
£’000
Over 5
years
£’000
Total
£’000
1,146
201
25
354
603
74
-
-
804
14,317
-
-
1,500
15,925
99
298
3,887
4,383
1,372
1,031
903
14,615
3,887 22,808
At 31 December 2021
Trade and other
payables
Loans and borrowings
Lease liabilities
Total
At 31 December 2022
Trade and other
payables
Loans and borrowings
Lease liabilities
Total
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 optimal
capital structure to reduce 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 and increase or
decrease debt.
Credit risk
Credit risk arises from cash and cash equivalents and deposits with banks
and financial institutions and the risk of default by these institutions. The
Group reviews the creditworthiness of such financial institutions on a regular
basis to satisfy itself that such risks are mitigated. The Group’s exposure to
credit risk arises from default of the counterparty, with a maximum exposure
equal to the carrying amount of the cash and cash equivalents as shown in
the consolidated statement of financial position.
Credit risk also arises from credit exposure to trade customers included in
trade and other receivables.
The Group applies the IFRS 9 simplified approach to measuring expected
credit losses using a lifetime expected credit loss provision for trade
receivables. The expected loss rates are based on the Group’s historical
credit losses experienced over the three-year period to the period end. Trade
receivable balances are monitored on an ongoing basis to ensure that the
53
Gusbourne PLC Report and Financial Statements 2022 Notes forming part of the financial
statements continued
3
Financial instruments -
risk management
(continued)
4
Revenue and segmental
information
Group’s bad debts are kept to a minimum. The maximum trade credit risk
exposure at 31 December 2022 in respect of trade receivables is £957,000
(2021: £563,000) and due to the prompt payment cycle of these trade
receivables, the expected credit loss is negligible at £8,000 (2021: £31,000).
Further disclosures regarding trade and other receivables are provided in
note 15.
Interest rate risk
The Group’s main debt is exposed to interest rate fluctuations. The Group
considers that the risk is not significant in the context of its business plans.
Should there be a 0.5% increase in the bank’s lending rate, the finance charge
in the statement of comprehensive income would increase by £61,000 (2021:
£47,000).
Wine Sales
Other income
Net revenue
Excise duties
Revenue
Year ended
31 December
2022
£’000
Year ended
31 December
2021
£’000
5,634
609
6,243
615
6,858
3,795
396
4,191
422
4,613
The Directors consider the Group to have only one operating segment. Details
of the sole operating segment are shown in the consolidated statement of
comprehensive income, consolidated statement of financial position and
consolidated statement of cash flows.
The analysis by geographical area of the Group’s revenue is set out as below:
UK
USA
Other
Net revenue
Year ended
31 December
2022
£’000
Year ended
31 December
2021
£’000
4,852
231
1,160
6,243
3,410
158
623
4,191
The Directors do not consider the Group places reliance on any major
customers.
54
Gusbourne PLC Report and Financial Statements 2022
5
Loss from operations
Loss from operations has been arrived at after charging:
Year ended
31 December
2022
£’000
Year ended
31 December
2021
£’000
Depreciation of property, plant and equipment
Profit on disposal of fixed assets
Staff costs expensed to consolidated statement of
income
Furlough grant income
601
28
1,770
-
600
-
1,310
(45)
6
Auditor’s remuneration
7
Staff costs
Auditor’s remuneration
- Audit: consolidation and parent
- Audit: subsidiaries
Year ended
31 December
2022
£’000
Year ended
31 December
2021
£’000
65
20
85
65
20
85
Year ended
31 December
2022
£’000
Year ended
31 December
2021
£’000
Staff costs (including Directors) comprise:
Wages and salaries
2,492
1,894
Social security contributions and similar taxes
Pension contributions
Share based payment
261
106
7
187
85
-
2,866
2,166
£1,089,000 (2021: £811,000) of the staff costs shown in the table above have
been included in crop growing costs for the year as shown in note 13.
The average number of employees of the Group, including Directors, during
the year was 96 (December 2021: 68).
55
Gusbourne PLC Report and Financial Statements 2022
Notes forming part of the financial
statements continued
7
Staff costs (continued)
Directors’ remuneration was as follows:
Year ended
31 December
2022
£’000
Year ended
31 December
2021
£’000
The total emoluments of all Directors during the
year was:
Emoluments (including benefits)
Contributions to defined contribution pension plans
Total
312
312
13
325
342
342
11
353
Total emoluments for all directors excluding
pension contributions:
J Ormonde
A Weeber
M Paul
C Holland
J Pollard
Lord Arbuthnot PC
P Bentham
M Clapp
I Robinson
Total
Pension contributions:
J Pollard
C Holland
Year ended
31 December
2022
£’000
Year ended
31 December
2021
£’000
59
-
48
116
77
-
-
12
-
312
55
-
48
117
86
-
-
36
-
342
Year ended
31 December
2022
£’000
Year ended
31 December
2021
£’000
6
7
6
5
The emoluments of the highest paid Director
during the year were:
123
122
The total emoluments for C Holland and J Pollard include benefits to the
value of £1,000 (2021: £2,000) and £1,000 (2021: £1,000) respectively.
The Directors are considered to be key management
56
Gusbourne PLC Report and Financial Statements 2022 7
Staff costs (continued)
8
Finance expenses
Key management personnel costs were as follows:
Short term employment benefits
Social security contributions
Contributions to defined contribution pension plans
Finance expenses
Interest payable on borrowings
Amortisation of bank transaction costs
Discount expense on deep discount bond
Total finance expenses
Year ended
31 December
2022
£’000
Year ended
31 December
2021
£’000
312
26
13
351
342
25
11
378
Year ended
31 December
2022
£’000
Year ended
31 December
2021
£’000
456
40
-
496
325
42
450
817
9
Taxation
There is no current or deferred tax charge for the year (2021: £nil).
Year ended
31 December
2022
£’000
Year ended
31 December
2021
£’000
Loss on ordinary activities before tax
(2,599)
(3,573)
Loss on ordinary activities at the standard rate
of corporation tax in the UK for the year of 19%
(December 2021: 19%)
(493)
(679)
Effects of:
Expenses not deductible for tax purposes
Unprovided deferred tax movements on short term
temporary differences
Unrecognised losses carried forward
Research & development
Tax charge/(credit) for the year
134
(158)
517
(74)
(74)
121
(91)
649
-
-
57
Gusbourne PLC Report and Financial Statements 2022
Notes forming part of the financial
statements continued
9
Taxation (continued)
No deferred tax asset has been recognised on unutilised taxable losses due
to the lack of certainty over the taxable profits being available against which
deductible temporary differences can be utilised. The unutilised tax losses
carried forward are £20,654,000 (December 2021: £17,739,000).
Tax credit of £74,000 (2021: nil) relating to research and development tax
credits for the years ended 31 December 2020 and 2021.
10 Loss per share
Basic earnings per ordinary share are based on a loss of £2,525,000
(December 2021: £3,573,000) and ordinary shares 60,595,919 (December
2021: 48,989,920) of 1 pence each, being the weighted average number of
shares in issue during the year.
Weighted
average
number of
shares
Loss per
Ordinary
share pence
Loss
£’000
Year ended 31 December 2022
(2,525)
60,595,919
Year ended 31 December 2021
(3,573)
48,989,920
(4.17)
(7.29)
Diluted earnings per share are based on a loss of £2,525,000 and ordinary
shares of 60,595,919 and no dilutive warrant options.
Loss
£’000
Diluted
number of
shares
Loss per
Ordinary
share pence
Year ended 31 December 2022
(2,525)
60,595,919
Year ended 31 December 2021
(3,573)
48,989,920
(4.17)
(7.29)
Cost
At 1 January 2022 and 31 December 2022
777
230
1,007
Goodwill
£’000
Brand
£’000
Total
£’000
Impairment losses
At 1 January 2022 and 31 December 2022
-
-
-
Net book value
At 31 December 2021 and
31 December 2022
777
230
1,007
The carrying value of goodwill and the brand is allocated to the following
cash-generating units:
Gusbourne Estate
December
2020
£’000
December
2019
£’000
1,007
1,007
11
Intangibles
58
Gusbourne PLC Report and Financial Statements 2022
11
Intangibles (continued)
12
Property, plant and
equipment
The brand value is the fair value of the brand name acquired as part of the
acquisition of Gusbourne Estate in September 2013, and separately identified
as an intangible.
Goodwill is the premium paid to acquire the Gusbourne Estate business over
the fair value of its net assets.
Given the long term nature of vineyard establishment and wine production
the Group’s management prepare long term cash flow forecasts for up to 5
years, and then apply a discount rate to determine the present value of the
future cash flows of the cash-generating unit to arrive at the fair value less
costs of disposal. Where this amount is lower than the carrying value of the
brand and goodwill allocated to the cash-generating unit an impairment
charge is made. The discount rate used is 12.6% (December 2021: 12.8%)
based on the Group’s estimated weighted cost of capital. A growth rate of
2.5% has been applied over the term of the long term cash flow forecasts. The
growth rate used is based on the long term average growth rate of the UK
economy.
The discount rate would need to increase to 21.7% to result in an impairment
of the Goodwill.
The fair value of intangibles is categorised as a level 3 recurring fair value
measurement.
Freehold
Land and
Buildings
£’000
Plant,
machinery
and motor
vehicles
£’000
Right of
use asset
£’000
Mature
Vineyards
£’000
Computer
equipment
£’000
Total
£’000
Cost
At 1 January 2021
6,896
3,432
2,114
3,637
102
16,181
Additions
Disposals
-
-
179
-
-
-
-
-
16
-
195
-
At 31 December 2021
6,896
3,611
2,114
3,637
118
16,376
At 1 January 2022
Additions
Disposals
6,896
1,824
-
At 31 December 2022
8,720
3,611
645
(65)
4,191
2,114
3,637
-
-
-
-
2,114
3,637
118
33
-
151
16,376
2,502
(65)
18,813
59
Gusbourne PLC Report and Financial Statements 2022
Notes forming part of the financial
statements continued
12
Property, plant and
equipment (continued)
Freehold
Land and
Buildings
£’000
Plant,
machinery
and motor
vehicles
£’000
Right of
use asset
£’000
Mature
Vineyards
£’000
Computer
equipment
£’000
Total
£’000
633
129
-
762
762
128
-
890
1,956
313
-
2,269
2,269
311
(65)
2,515
92
46
-
138
138
46
-
184
633
146
-
779
779
146
-
925
74
3,388
11
-
645
-
85
4,033
85
4,033
16
647
-
101
(65)
4,615
6,134
7,830
1,342
1,676
1,976
1,930
2,858
2,712
33
50
12,343
14,198
Accumulated
depreciation
At 1 January 2021
Depreciation charge for
the year
Depreciation on
disposals
At 31 December 2021
At 1 January 2022
Depreciation charge for
the year
Depreciation on
disposals
At 31 December 2022
Net book value
At 31 December 2021
At 31 December 2022
Right of use assets comprise land leases on which vines have been planted
and property leases from which vineyard operations are carried out. These
assets have been created under IFRS 16 – Leases.
Depreciation on right of use assets is included in the cost of inventory,
therefore £46,000 (2021: £46,000) transferred into stock in the year.
13 Biological produce
The fair value of biological produce was:
At 1 January
Crop growing costs
Fair value of grapes harvested and transferred to
inventory
Fair value movement in biological produce
At 31 December
December
2022
£’000
December
2021
£’000
-
1,830
(1,591)
(239)
-
-
1,609
(905)
(704)
-
The fair value of grapes harvested is determined by reference to estimated
market prices less cost to sell at the time of harvest. The estimated market
price for grapes used in respect of the 2022 harvest is £3,000 per tonne
(2021: £2,500 per tonne).
60
Gusbourne PLC Report and Financial Statements 2022
13
Biological produce
(continued)
14
Inventories
15 Trade and other receivables
A 10% increase in the estimated market price of grapes to £3,300 per tonne
would result in an increase of £159,000 (2021: £90,000) in the fair value of
the grapes harvested in the year. A 10% decrease in the estimated market
price of grapes to £2,700 per tonne would result in a decrease of £159,000
(2021: £90,000) in the fair value of the grapes harvested in the year.
A fair value loss of £239,000 (2021: £704,000 loss) was recorded during
the year and included within the consolidated statement of comprehensive
income. This measurement of fair value less costs to sell is the deemed cost
of the grapes that is transferred into inventory upon harvest.
Finished goods
Work in progress
Total inventories
December
2022
£’000
December
2021
£’000
1,249
11,330
12,579
985
9,653
10,638
During the year £1,858,000 (December 2021: £1,261,000) was transferred to
cost of sales.
Non current assets
Other receivables
Current assets
Trade receivables
Prepayments
Other receivables
Tax Debtor
Total trade and other receivables
December
2022
£’000
December
2021
£’000
16
16
957
113
147
74
1,291
32
32
563
691
21
-
1,275
Trade and other receivables are due within 1 year apart from £16,000
(December 2021: £32,000) included within other receivables which is due in
more than 1 year.
The Group undertakes a credit check on any new customers and also
monitors the credit worthiness of existing customers. If a customer fails the
credit checking process then they are required to make payment up front
for any goods or services. At 31 December 2022 the lifetime expected loss
provision for trade receivables is 0.75%, £8,000 (2021: 5%, £31,000). This is
based on expected credit losses from previous losses incurred by the Group.
61
Gusbourne PLC Report and Financial Statements 2022
Notes forming part of the financial
statements continued
16 Trade and other payables
17 Loans and borrowings
62
December
2022
£’000
December
2021
£’000
Trade payables
Accruals
Other payables
Total financial liabilities, excluding loans and
borrowings classified as financial liabilities
measured at amortised cost
833
501
68
1,402
Other payables - tax and social security payments
98
Total trade and other payables
1,500
Book values are approximate to fair value at 31 December 2022 and
31 December 2021.
611
337
39
987
131
1,118
Non current liabilities
Bank loans
Unamortised bank transaction costs
Total non current loans and borrowings
December
2022
£’000
December
2021
£’000
12,541
(168)
12,373
9,468
(142)
9,326
The bank loan of £12,373,000 with PNC Business Credit shown above is net
of transaction costs of £168,000 which are being amortised over the life of
the loan.
In August 2022 the Group entered into an amended and restated agreement
with PNC Financial Services UK Limited to increase its existing £10.5 million
5-year asset-based lending facilities by an additional £6.0 million to provide
the Group with a total £16.5 million asset-based lending facilities. The New
PNC facilities have been made available to the Group for a minimum period
of 5 years to 12 August 2027. The interest rate is at the annual rate of 2.50%
(2021: 2.75%) over Sterling Overnight Index Average (“SONIA”), (2021: Bank
of England Base Rate).
The facilities are secured by way of first priority charges over the Group’s
inventory, receivables and freehold property as well as an all assets
debenture.
An analysis of the maturity of loans and borrowings is given below:
Bank and other loans:
Within 1 year
1-2 years
2-5 years
December
2022
£’000
December
2021
£’000
-
-
-
-
12,373
9,326
Gusbourne PLC Report and Financial Statements 2022
18
Lease liability
During the period the Group accounted for six leases under IFRS 16. The
lease contracts provide for payments to increase each year by inflation or
at a fixed rate and on others to be reset periodically to market rental rates.
The leases also have provisions for early termination. The weighted average
Incremental Borrowing Rate used to calculate the lease liability was 4.25%.
Net carrying value – 1 January 2022
Interest
Payments
Net carrying value – 31 December 2022
The lease payments under long term leases
liabilities fall due as follows:
Current lease liabilities
Non current lease liabilities
Total liabilities
Land
£’000
2,094
85
(101)
2,078
December
2022
£’000
December
2021
£’000
84
1,994
2,078
89
2,005
2,094
During the period an interest charge of £85,000 (2021: £86,000) arose on
the lease liability in respect of land leases. This interest cost has been added
to growing crop costs on the basis that the lease liability solely relates to the
production of grapes.
The Groups leases include break clauses. On a case-by-case basis, the Group
will consider whether the absence of a break clause exposes the Group to
excessive risk. Typically factors considered in deciding to negotiate a break
clause include:
• The length of the lease term;
• The economic stability of the environment in which the property is
located; and
• Whether the location represents a new area of operations for the Group.
At both 31 December 2022 and 2021 the carrying amounts of lease liabilities
are not reduced by the amount of payments that would be avoided from
exercising break clauses because on both dates it was considered reasonably
certain that the Group would not exercise its right to exercise any right to
break the lease.
63
Gusbourne PLC Report and Financial Statements 2022
Notes forming part of the financial
statements continued
19
Note supporting statement
of cash flows
Cash and cash equivalents for purposes of the statement of cash flows
comprises:
Cash at bank available
Cash on hand
December
2022
£’000
December
2021
£’000
267
2
269
3,127
1
3,128
Changes in financing activities are shown in the reconciliation of liabilities
from financing transactions below:
Current
loans and
borrowings
£’000
(Note 17)
Non-current
loans and
borrowings
£’000
(Note 17)
Current
lease
liabilities
£’000
(Note 18)
Non-current
lease
liabilities
£’000
(Note 18)
At 1 January 2021
Cash flows
Non cash flows
- Interest accruing in
period
- Loan refinanced as
deep discount bond
- Loans and
borrowings classified
as non-current at
31 December 2020
becoming current
during 2021
- Amortisation of bank
transaction costs
At 31 December 2021
5,676
(1,219)
6,613
2,640
517
(4,974)
31
-
-
-
-
-
42
9,326
92
-
-
-
(3)
-
89
2,016
(99)
85
-
3
-
2,005
64
Gusbourne PLC Report and Financial Statements 2022
19
Note supporting statement
of cash flows (continued)
Current
loans and
borrowings
£’000
(Note 17)
Non-current
loans and
borrowings
£’000
(Note 17)
Current
lease
liabilities
£’000
(Note 18)
Non-current
lease
liabilities
£’000
(Note 18)
20
Share capital
At 1 January 2022
Cash flows
Non cash flows
- Interest accruing in
period
- Debt converted to
equity in period
- Loans and
borrowings classified
as non-current at
31 December 2021
becoming current
during 2022
- Amortisation of bank
transaction costs
At 31 December 2022
Issued and fully paid
At 1 January 2021
Issued in the year
-
-
-
-
-
-
-
9,326
2,551
456
-
-
40
12,373
89
-
-
-
(5)
-
84
Deferred
shares of
49p each
Number
Ordinary
shares of
1p each
Number
23,639,762
46,478,619
-
14,253,086
At 31 December 2021
23,639,762
60,731,705
Issued in the year
-
42,282
At 31 December 2022
23,639,762
60,773,987
2,005
(101)
85
-
5
-
1,994
£’000
12,048
142
12,190
1
12,191
The Deferred shares of 49 pence each have no rights attached to them.
On 2 March 2022 the Company issued 23,970 new ordinary shares of 1p each
pursuant to an exercise of Warrants. All Warrants were exercised at 75p per
share.
On 29 March 2022 the Company issued 226 new ordinary shares of 1p each
pursuant to an exercise of Warrants. All Warrants were exercised at 75p per
share.
On 3 May 2022 the Company issued 419 new ordinary shares of 1p each
pursuant to an exercise of Warrants. All Warrants were exercised at 75p per
share.
65
Gusbourne PLC Report and Financial Statements 2022
Notes forming part of the financial
statements continued
20
Share capital (continued)
On 4 October 2022 the Company issued 4,580 new ordinary shares of 1p
each pursuant to an exercise of Warrants. All Warrants were exercised at 75p
per share.
On 16 December 2022 the Company issued 13,087 new ordinary shares of 1p
each pursuant to an exercise of Warrants. All Warrants were exercised at 75p
per share.
Unexercised Warrants at 31 December 2022 amounted to 3,959,977 (2021:
4,002,259) Ordinary Shares of 1 pence each. The warrants have a final
exercise date of 16 December 2023 at 75p per Ordinary Share.The warrants
are accounted for as a derivative financial liability measured on inception
at fair value through the profit or loss. On inception, the fair value of the
warrants was deemed to be £nil and thus no fair value was recognised.
21 Reserves
The following describes the nature and purpose of each reserve within
equity:
Reserve
Share premium
Merger reserve
Retained earnings
Description and purpose
The share premium account arose on the issue of
shares by the Company at a premium to their nominal
value. Expenses of share issues are charged to this
account.
The merger reserve arose on the business
combination and is the difference between the
nominal value of the shares issued and the market
value of the shares acquired.
The retained earnings represent cumulative net gains
and losses recognised in the Group’s statement of
consolidated income.
Deacon Street Partners Limited is considered a related party by virtue of
the fact that Lord Ashcroft KCMG PC, the Company’s ultimate controlling
party, is also the ultimate controlling party of Deacon Street Partners Limited.
During the year Deacon Street Partners Limited charged the Company
£70,000 (December 2021: £70,000) in relation to management services.
There was £44,000 due to Deacon Street Partners Limited as at 31 December
2022 (December 2021: £22,000).
Jaywing PLC is considered a related party by virtue of the fact that Ian
Robinson, a director of Gusbourne PLC is also Non-Executive Chairman of
Jaywing PLC. During the year Jaywing PLC charged the Company £108,000
(December 2021: £102,000) in relation to marketing services and £352,000 in
relation to third party digital advertising. There was £36,000 due to Jaywing
PLC as at 31 December 2022 (December 2021: £8,400).
On 18 June 2018, the company lent £50,000 to a director as an interest free
loan, repayable by instalments from July 2019. The loan will be repaid in full
by May 2024. The balance due from the director as at 31 December 2022 was
£22,000 (December 2021: £38,000).
22 Related party transactions
66
Gusbourne PLC Report and Financial Statements 2022 22
Related party transactions
(continued)
On the 24 August 2022 the Group purchased 55 hectares of freehold
agricultural land located in Appledore, Ashford in Kent (the “Land Purchase”)
from Andrew Weeber, Non-Executive Director and a shareholder of the
Company, and his spouse. The property is adjacent to and contiguous with
the Company’s existing freehold estate in Kent, where the majority of the
Company’s existing mature vineyards are planted. The purchase price for the
Land Purchase was £1.6 million plus related acquisition costs.
Details of related parties who subscribed for the warrants are shown in the
table below:
Warrants exercisable at 75 pence each
23 Share based payments
Name
Lord Ashcroft KCMG PC*
Andrew Weeber
Paul Bentham**
Ian Robinson
Jim Ormonde
Mike Paul
Lord Arbuthnot PC
Matthew Clapp
Jon Pollard
Charlie Holland
Held as at
31 December
2021
Number
Held as at
31 December
2022
Number
2,660,158
2,660,158
179,566
121,083
35,801
19,788
10,607
7,345
4,816
3,171
2,770
179,566
121,083
35,801
19,788
10,607
7,345
4,816
3,171
2,770
3,045,105
3,045,105
* via Belize Finance Limited, a related party of Lord Ashcroft KCMG PC
**via Franove Holdings Limited, a related party of Paul Bentham
The Company operates two equity-settled share based remuneration
schemes for employees: a company share option scheme (CSOP) and a
performance share plan (PSP) for executive directors and certain senior
management. Under the PSP and CSOP, options over ordinary shares
of 1 pence each in the Company may be granted at the discretion of the
remuneration committee.
Vesting of the PSP Options is subject to the following performance criterion:
the volume-weighted average mid-market closing price of a Share as derived
from the AIM Appendix to the Daily Official List (“VWAP”) over a period of
forty five business days is equal to or greater than the agreed vesting price.
The performance period for PSP Options granted under the PSP will typically
be four years commencing from the date of grant of the relevant PSP
Options. Except in the event of a change of control of the Company and in
certain ‘good leaver’ scenarios, no PSP Options may be exercised prior to
the expiry of the performance period and unless the relevant performance
criterion is met. PSP Options shall be granted under the PSP with an exercise
price of 1 pence per Share (being equal to the nominal value of a Share).
Shares acquired on exercise of PSP Options shall be subject to a two-year
holding period.
67
Gusbourne PLC Report and Financial Statements 2022 Notes forming part of the financial
statements continued
23
Share based payments
(continued)
Vesting of the CSOP Option is subject to the following performance criterion:
the VWAP over a period of forty five business days is equal to or greater
than 100 pence. The performance period of the CSOP Options shall be three
years from the date of grant. Except in the event of a change of control
of the Company and in certain ‘good leaver’ scenarios, no CSOP Options
may be exercised prior to the expiry of the performance period and unless
the performance criterion is met. Shares acquired on exercise of the CSOP
Options shall be subject to a holding period of one year.
Details of the share options granted are shown in the table below:
Grant date
Scheme
Number of options granted
Share price at grant date
Exercise price
Expense for year ended 31 December 2022
20 December
2022
20 December
2022
PSP
CSOP
734,483
209,790
71.50p
1.00p
£5,233
71.50p
71.50p
£1,505
24 Post balance sheet events
On 16 January 2023, the Group issued 2,174 new ordinary shares of 1 pence
each in the capital of the Company (“Ordinary Shares”) pursuant to an
exercise of warrants by certain investors in the Company.
68
Gusbourne PLC Report and Financial Statements 2022 Company financial statements
69
Gusbourne PLC Report and Financial Statements 2022 Company balance sheet
at 31 December 2022
Assets
Non-current assets
Investments
Other receivables
Current assets
Trade and other receivables
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
Total liabilities
Net assets
Issued capital and reserves attributable to owners
Share capital
Share premium
Share option reserve
Retained earnings
Total equity
December
2022
£’000
December
2021
£’000
Note
3
4
4
5
6
7
7
7
21,600
6,040
21,600
3,584
159
116
27,915
122
3,013
28,319
(228)
(228)
(262)
(262)
27,687
28,057
12,191
21,144
7
(5,655)
27,687
12,191
21,105
-
(5,239)
28,057
In accordance with Section 408 of the Companies Act 2006, the Company has not presented its own income
statement in these financial statements. The Company results for the year include a loss after tax and before dividends
payable of £416,000 (2021: £845,000) which is dealt with in the consolidated financial statements of the Group.
The financial statements were approved and authorised for issue by the Board on 6 June 2023 and were signed on its
behalf by Katharine Berry.
Katharine Berry
Secretary and Director
The notes on pages 72 to 75 form part of these financial statements
70
Gusbourne PLC Report and Financial Statements 2022
Company statement of changes in equity
for the year ended 31 December 2022
1 January 2021
Comprehensive loss for the year
Contributions by and distributions to owners:
Share issue
Share issue expenses
31 December 2021
1 January 2022
Comprehensive loss for the year
Contributions by and distributions to owners:
Share issue
Share issue expenses
Equity share options issued
31 December 2022
Share
capital
£’000
12,048
-
143
-
12,191
Share
premium
£’000
10,915
-
10,549
(359)
21,105
12,191
21,105
-
-
-
-
-
46
(7)
-
12,191
21,144
Share
option
reserve
£’000
-
-
-
-
-
-
-
-
-
7
7
Total
attributable
to equity
holders
£’000
18,569
(845)
10,692
(359)
28,057
28,057
(416)
46
(7)
7
Retained
earnings
£’000
(4,394)
(845)
-
-
(5,239)
(5,239)
(416)
-
-
-
(5,655)
27,687
The notes on pages 72 to 75 form part of these financial statements.
71
Gusbourne PLC Report and Financial Statements 2022
Notes forming part of the company
financial statements
for the year 31 December 2022
1
Accounting policies
72
Gusbourne PLC (the “Company”) is a company limited by shares and
registered in England and Wales with the registered number 08225727. The
Company’s registered office is Gusbourne, Kenardington Road, Appledore,
Ashford, Kent, TN26 2BE.
The following principal accounting policies have been applied:
Basis of preparation
The separate financial statements of the Company are presented as required
by the Companies Act 2006. The Company meets the definition of a
qualifying entity under Financial Reporting Standard 101 (“FRS 101”) issued
by the Financial Reporting Council. The financial statements have therefore
been prepared in accordance with FRS 101 “Reduced Disclosure Framework”
as issued by the Financial Reporting Council.
Disclosure exemptions adopted In preparing these financial statements
The company has taken advantage of certain disclosure exemptions
conferred by FRS 101 and has not provided:
• Additional comparative information as per IAS 1 Presentation of Financial
Statements paragraph 38 in respect of a reconciliation of the number of
shares outstanding at the start and end of the prior period.
• A Statement of Cash Flows and related disclosures.
• A statement of compliance with IFRS (a statement of compliance with
FRS 101 is provided instead).
• Additional comparative information for narrative disclosures and
information, beyond IFRS requirements.
• Disclosures in relation to the objectives, policies and process for
managing capital.
• Disclosure of the effect of future accounting standards not yet adopted.
• The remuneration of key management personnel.
• Related party transactions with two or more wholly owned members of
the group.
In addition, and in accordance with FRS 101, further disclosure exemptions
have been applied because equivalent disclosures are included in the
consolidated financial statements. These financial statements do not include
certain disclosures in respect of:
Share based payments – details of the number and weighted average exercise
prices of share options, and how the fair value of goods or services received
was determined as per paragraphs 45(b) and 46 to 52 of IFRS 2 Share-
Based Payment. The Company’s accounting policies are aligned with the
Group’s accounting policies as described in note 1 of the Group’s consolidated
financial statements. Additional accounting policies are noted below.
The financial statements have been prepared on a going concern basis in
accordance with UK adopted international accounting standards.
Investment in subsidiaries
The company has an investment in two subsidiaries. Investments are valued
at cost, less allowances for impairment. Impairment reviews are performed
annually.
Gusbourne PLC Report and Financial Statements 2022 2 Directors and employees
The average number of staff employed by the Company during the year
(comprising solely of Directors) was 9 (2021 - 9).
Details of the emoluments of the Directors can be found in note 7 of the
consolidated financial statements.
3
Investments
The following were the subsidiary undertakings at the end of the year:
4
Trade and other receivables
Name
Country of incorporation
Gusbourne Estate Limited
England and Wales
Gusbourne Wines Limited
England and Wales
Proportion of
ownership interest at
31 December 2022
100%
100%
Gusbourne Estate Limited is involved in the production, sale and distribution
of English sparkling wine. Gusbourne Wines Limited is dormant.
The registered address of Gusbourne Estate Limited and Gusbourne Wines
Limited is Kenardington Road, Appledore, Kent TN26 2BE.
Non-current assets
Trade and other receivables
Amounts due from group undertakings
Total non current assets
Current assets
Trade and other receivables
Prepayments and accrued income
Total current assets
December
2022
£’000
December
2021
£’000
16
6,024
6,040
117
42
159
32
3,552
3,584
71
51
122
6,199
3,706
Included in trade and receivables is an amount due from a director of
£22,000 (2021: £38,000). £6,000 is due within one year and £16,000 is due
for repayment by July 2024. Further details are shown in note 9.
73
Gusbourne PLC Report and Financial Statements 2022
Notes forming part of the company
financial statements continued
5
Trade and other payables
Current liabilities
Trade payables
Accruals and deferred income
December
2022
£’000
December
2021
£’000
69
159
228
136
126
262
6
Share Capital
Details of the share capital of the Company are included in note 20 to the
Group’s financial statements.
7 Reserves
Details of the nature and purpose of each reserve within equity are shown in
note 21 to the Group’s financial statements.
8 Ultimate controlling party
In the opinion of the Directors the ultimate controlling party at 31 December
2022 is Lord Ashcroft KCMG PC.
9 Related party transactions
10 Share based payments
74
Deacon Street Partners Limited is considered a related party by virtue of the
fact that Lord Ashcroft KCMG PC, the Company’s ultimate controlling party, is
also the ultimate controlling party of Deacon Street Partners Limited. During
the year Deacon Street Partners Limited charged the Company £70,000
(December 2021 - £70,000) in relation to management services. There was
£44,000 due to Deacon Street Partners Limited as at 31 December 2022
(December 2021 - £22,000).
On 18 June 2018, the company lent £50,000 to a director as an interest free
loan, repayable by instalments from July 2019. The loan will be repaid in full
by July 2024. The balance due from the director as at 31 December 2022 was
£22,000 (December 2021 - £38,000).
Details of related parties who subscribed for warrants are included in note 22
to the Group’s financial statements.
The Company operates two equity-settled share based remuneration
schemes for employees: a company share option scheme (CSOP) and a
performance share plan (PSP) for executive directors and certain senior
management. Under the PSP and CSOP, options over ordinary shares
of 1 pence each in the Company may be granted at the discretion of the
remuneration committee.
Details of the share options granted are shown in the table below:
Grant date
Scheme
Number of options granted
Share price at grant date
Exercise price
Expense for year ended 31 December 2022
20 December
2022
20 December
2022
PSP
CSOP
734,483
209,790
71.50p
1.00p
£5,233
71.50p
71.50p
£1,505
Gusbourne PLC Report and Financial Statements 2022 11 Post balance sheet events
On 16 January 2023, the Company issued 2,174 new ordinary shares of 1
pence each in the capital of the Company (“Ordinary Shares”) pursuant to an
exercise of warrants by certain investors in the Company.
75
Gusbourne PLC Report and Financial Statements 2022
Company information
Country of incorporation of parent company
Nominated adviser and Joint Broker
Panmure Gordon (UK) Limited
One New Change
London
EC4M 9AF
Solicitors
Fieldfisher LLP
Free Trade Exchange Level 5
37 Peter Street
Manchester
M2 5GB
Bankers
Barclays Bank PLC
30 Tower View
Kings Hill
Kent
ME19 4UY
PNC Financial Services UK Ltd
34-36 Perrymount Road
Haywards Heath
RH16 3DN
Registrars
Link Market Services Limited
10th Floor, Central Square
29 Wellington Street
Leeds
LS1 4DL
England and Wales
Legal form
Public limited company
Directors
J Ormonde (Non-Executive Chairman)
M A K Paul (Non-Executive Deputy Chairman)
C E Holland (Chief Executive Officer)
K D Berry (Chief Financial Officer), appointed 21 March
2023
Lord Arbuthnot PC (Non-Executive Director)
M D Clapp (Non-Executive Director)
I G Robinson (Non-Executive Director)
J Pollard (Chief Operating Officer), resigned 21 March
2023
P Bentham (Non-Executive Director), resigned 21 March
2023
A Weeber (Non-Executive Director), resigned 21 March
2023
Secretary and registered office
K D Berry
Gusbourne
Kenardington Road
Appledore
Ashford
Kent
TN26 2BE
Company number
08225727
Auditors
BDO LLP
55 Baker Street
London
W1U 3EU
76
Gusbourne PLC Report and Financial Statements 2022 77
Gusbourne PLC Report and Financial Statements 2022 78
Gusbourne PLC Report and Financial Statements 2022 Laura Rhys (Global Ambassador)
NP0523-3807