Gusbourne PLC
Report and financial statements
for the year ended 31 December 2023
Company Number 08225727
Contents
Strategic report
4 Financial Summary
5 Highlights
6 Chairman’s statement
7 Chief Executive’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
23 Report of the Directors
Financial statements
31 Report of the independent auditors
41 Consolidated statement of comprehensive income
42 Consolidated statement of financial position
44 Consolidated statement of cash flows
45 Consolidated statement of changes in equity
46 Notes forming part of the financial statements
72 Parent company financial statements
79 Company information
Financial Summary
Robust net revenue growth, up 13% at £7.1m, gross profit up 30% at £4.8m and Adjusted
EBITDA loss narrowed to £0.7m, a 41% 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
2023
£’000
2022
£’000
Change
%
13%
30%
41%
13%
30%
7,052
4,808
(669)
68.2%
7,052
4,808
(46)
6,243
3,697
(1,131)
59.2%
6,243
3,697
(239)
(3,565)
(3,479)
(1,912)
(661)
(6,138)
(1,481)
(601)
(5,561)
Operating profit/(loss)
(1,376)
(2,103)
35%
Reconciliation of operating profit/(loss) to adjusted EBITDA
Operating profit/(loss)
(1,376)
(2,103)
Add back;
Depreciation
Aborted planning and capital expenditure write-off
Fair value movement in biological produce
Adjusted EBITDA(2)
661
-
46
601
132
239
(669)
(1,131)
(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 2023 Highlights
Highlights of 2023 include:
• UK wine sales growth up by 16.5% to £4.9m (2022: £4.2m), maintaining strong
double-digit sales growth across our direct to consumer (“DTC”) and UK Trade
sales channels, in spite of the challenging macroeconomic environment in the
second half of 2023.
• Net revenue* up by 13.0% to £7.1m (2022: £6.2m) with strong growth across the
Group’s three main distribution channels:
• UK Trade sales up by 13% (2022: 53%) to £3.5m (2022: £3.1m)
• Direct to consumer (“DTC”) net revenue which includes tours and related cellar
door operations in Kent, was up by 18% to £2.0m (2022: £1.7m)
•
International sales up by 7% (2022: 78%) to £1.5m (2022: £1.4m)
• A five-year CAGR (compound annual growth rate) in net revenue of 41% (2022:
44%)
• Gross profit up by 30% to £4.1m (2022: £3.7m) with margin significantly improved
at 68.2% (2022: 59.2%)
• Adjusted EBITDA** loss narrowed to £0.7m (2022: £1.1m)
• Ongoing success in international and UK wine competitions with an impressive
number of awards for its wines, including a record number of gold medals
• 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 2023 Chairman’s statement
The expansion of the global appetite for English fine wine has once again underpinned Gusbourne’s
robust revenue growth, with 2023 marking another year of good progress for the Group both at home and
abroad. Since our first vines were planted almost twenty years ago, Gusbourne has focused on building
strong foundations with a view to driving long-term value creation for stakeholders, striving from the
outset to establish and maintain a premium product and market position, whilst achieving international
brand recognition and pursuing multiple revenue streams. The world class quality of our products remains
of critical importance and the latest milestone in this journey was marked by the launch of the second
vintage of our prestige sparkling wine, Fifty One Degrees North, to notable critical acclaim worldwide.
All sales channels delivered growth during the year and our gross profit increased by a very pleasing 30%
on higher margins. Our DTC net revenue grew by 18% to £2.0m, driven by cellar door operations in Kent
as customers responded positively to an expanded product offering and increased Nest capacity, as well
as sales online and via new membership programmes. Our UK Trade revenue grew by 13% to £3.5m as the
industry continued to support wine produced in England and we opened many new accounts and listings.
Our international revenue grew by 7% to £1.5m as we increased our presence across 33 export markets,
with distribution in more new territories planned in 2024 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 products combined with related experiential services which will help to further cement the
brand’s luxury positioning. Delivering EBITDA breakeven is a key priority for 2024.
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. We appointed Jonathan White as Chief Executive Officer in
January 2024 after a rigorous search process. Jonathan has been at Gusbourne since 2018, most recently
as Marketing Director. Simon Bradbury also joined the Board, as Chief Commercial Officer, previously
our Global Sales Director. We said farewell to the retiring Paul Bentham and Andrew Weeber, to Matthew
Clapp who stood down, as well as our previous Chief Executive and Head Winemaker Charlie Holland. I
would like to thank them sincerely for their hard work and dedication in helping to establish Gusbourne as
the leading fine wine producer in England.
The Gusbourne Team
I remain extremely proud of the hard work and commitment shown by the entire Gusbourne team who
always show up with a winning attitude. It was rewarding for the Board to be able to make several internal
promotions over the year, including Mary Bridges as Head Winemaker and Alastair Benham as Head of
Wine Operations, alongside Jonathan and Simon being promoted to the Board.
Outlook
While the macro-economic outlook in the UK remains uncertain with consumer confidence still fragile, the
Board remains confident in the future success of Gusbourne, who are well positioned as a leading light in
the rapidly growing English fine wine market. We expect to continue to see good momentum in our D2C,
Corporate, Global Travel Retail and International channels, while trade sales in the UK are likely to remain
cautious in the short-term. We have all the key ingredients in place for long-term success with great
product, great distribution, and a great team. I very much look forward to another exciting year ahead
targeting further revenue growth and adjusted EBITDA breakeven.
Jim Ormonde
Chairman
6
Gusbourne PLC Report and Financial Statements 2023 Chief Executive’s review
2023 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 craft, detail and quality, an enhanced product
portfolio and carefully curated distribution – and have taken advantage of the long-term investments
made into land and plantings over the last 20 years. Combined with the ongoing global appetite for
English wine, the result has been another year of double digit revenue growth. The Group reported
£7.05m revenue, an increase of 13% compared to 2022, 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 market.
Gross profit was up by 30% and the gross margin improved significantly to 68.2% (2022: 59.2%). This
reflected an improvement in distribution channel and pricing mix (in part a result of lower growth in
International sales, a lower margin channel) along with the impact of our new and wider product mix
strategy. 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 £0.7m (2022: £1.1m EBITDA loss).
I was honoured to be appointed Chief Executive Officer of Gusbourne in January 2024 and am thrilled
to be leading England’s foremost fine wine brand. I have thoroughly enjoyed my five and half years
with Gusbourne and am excited by the prospect of driving this great business forward into the future,
implementing our vision and growth strategy.
The continued success of the Group is a testament to the diligent work of the entire Gusbourne team.
Their dynamism, enthusiasm and dedication are the foundation of our business and I thank them all for
their ongoing efforts and continued loyalty. I have been touched by the support and commitment the
team has shown me since my appointment. I would also like to take this opportunity to thank Charlie
Holland for preparing such a carefully thought out succession plan across the business. I also wish to
recognise the integral role Charlie performed in establishing the world class reputation Gusbourne wines
now command, as well as significantly growing our business, during his ten-year tenure with the Group.
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 will be achieved through our ongoing
dedication to excellence in all aspects, from vineyards to winemaking, customer service and support
to marketing, branding and the development of our team. It will be enhanced by our prudently chosen
commercial relationships and curated distribution channels.
Our growth strategy is based on three strategic pillars:
• Protect premium position. Gusbourne has a quality focus in everything we do, starting in the vineyard and
continuing into our winemaking, distribution product range strategy and beyond. Our focus on fine wine
quality has consistently been recognised by critics across the world, and resulted in a significant number of
awards for our products. We are fiercely protective of our premium positioning and by nurturing and
protecting it, we maintain our pricing and distribution power.
• Strengthen brand awareness. Closely associated with our premium position, is our increasing brand
awareness. The strength of our brand opens up distribution opportunities and makes Gusbourne an
attractive proposition for our international market partners. We have invested heavily in the Gusbourne
7
Gusbourne PLC Report and Financial Statements 2023 Chief Executive’s review continued
brand and will continue to do so, through a very considered and controlled approach. We do everything
we can to provide our guests at the Nest with a fantastic experience, so they become informal brand
advocates and spread positive word about Gusbourne among their friends, family and professional
networks. The strength of our brand, combined with the quality of our products, gives us pricing power,
the ability to expand our product range and pricing hierarchy. This has underpinned the increase in our
average selling price over time.
• Drive multiple revenue streams. Gusbourne has multiple levers to drive revenue growth both the UK and
overseas. The expansion of our vineyards over the last decade, and maturing of the vines, has improved
productivity of the estate. With significant investment in inventory, we are now well placed to service the
growing demand for our products and have expanded our international distributor network and direct
sales force in the UK accordingly. However, this is not just a volume growth story. We have consistently
demonstrated the ability to improve our pricing and product mix enhancements through the introduction
of limited edition and other new products to our range. We have a track record of driving Direct to
Consumer business, our highest gross margin channel, through our digital marketing and eCommerce
capabilities. Non-wine sales are also important, provided by the regular programme of tasting and tour
experiences and events offered at the Nest. During 2023, we expanded our capacity, and have driven
occupancy through the burgeoning corporate sales channel. We see further opportunities to expand the
Nest in Kent and to create a second world-class customer experience at our Sussex vineyard in the future.
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 hectares in Kent during 2022, the majority of
which we plan to plant in the next few years. We also plan to plant additional vineyards on existing land in
Sussex and this would give a total of approximately 152 hectares of land under vine.
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 three years to transform those grapes into
Gusbourne’s premium sparkling wine.
2022 saw the launch of the inaugural vintage of our prestige sparkling wine, Fifty One 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 in 2023 we released
the second vintage, the 2016 during the year to further rave review.
Gusbourne also produce a growing range of premium vintage English still wines which continue to win
prestigious international awards and are so sought after, that they are only available to customers on strict
allocations. We anticipate further expanding the range and supply of our still wines, which along with
other comparable still fine wines produced around the world, are commercially released with less ageing
in our cellars.
8
Gusbourne PLC Report and Financial Statements 2023 Recent awards
Gusbourne has received a number of awards, gold medals and trophies for its wines. Pleasingly, the
breadth of awards extends across our range of still and sparkling wines, and across multiple vintages
too, highlighting the continued and consistent excellence of our winemaking over many years. Highlights
include:
• Five trophies including World Champion Classic Rose Brut at the 2023 Champagne and Sparkling Wine
World Championships
• A Best in Show award for Blanc de Blancs at the 2023 Decanter World Wine Awards
• Four trophies, including Top Still Wine as well as retaining Estate Winery of the Year, at the 2023 Wine GB
awards
• Six further medals, including gold, at the 2023 Decanter World Wine Awards
• Eleven further medals, including 5 gold, at the 2023 Wine GB Awards
• A Judges’ Selection, Platinum and Gold awards at the Texsom Awards 2023 in the USA
We were also thrilled that the Nest was recognised as UK Cellar Door of the year at the Decanter Retailer
Awards during 2023 and ‘ was awarded ‘Top Winery of the Year Great Britain by the Real Review.
In May 2024 Gusbourne was honoured with a King’s Award for Enterprise. Gusbourne was one of 252
organisations nationally to be recognised, with the prestigious award recognising Gusbourne’s excellence
in International Trade.
Distribution: Three sales channels
Gusbourne has three main sales channels, UK Trade, International and Direct to Consumer, which have all
delivered significant growth during the year.
• UK Trade
UK Trade continued its strong progress with net revenue up by 13% (2022: 53%). 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 were distributed to 33 countries around the world in 2023 as we grew the Gusbourne brand
globally, working with specialist distribution partners. International sales have continued to expand and
grew by 7% (2022: 78%). The brand has seen particularly strong momentum in the Nordics, Japan and
the USA. 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 2024 and beyond.
• 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 net revenue up 18% for 2023 compared to 2022.
DTC wine sales grew by 26% 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 digital and physical
9
Gusbourne PLC Report and Financial Statements 2023 Chief Executive’s review continued
presence. Tour and tasting events at Gusbourne’s successful cellar door facility in Kent (the Nest), are
now in their seventh 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.
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. During 2023
we also launched two new membership programmes which we expect to thrive in 2024 and beyond.
2023 Harvest
In 2023 we harvested our biggest yield to date. Following the warm growing season of 2022, the vines
emerged from winter in great health. Good weather during the flowering period led to an abundance of
fruit and the team’s careful management of the vines throughout the summer, which included a rigorous
quality-controlling green harvest, meant that the fruit quality and quantity was very good. Harvest was
completed under sunny skies and earlier than in typical years, before the wet weather of autumn arrived.
Chardonnay, Pinot Noir and Pinot Meunier grapes show fine expressiveness and are expected to produce
some outstanding wines, which will be bottled during the summer of 2024, 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 establishing
wines from 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.
Current trading and outlook
The macro-economic environment remains complex with consumer confidence still affected by
inflationary pressures and causing hesitancy 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 good 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, maturity of the vines and the ongoing expansion of its
international presence, with two new markets already opened in 2024. The planned increased revenue
base combined with anticipated improvement in gross margin and cost discipline is expected to deliver
EBITDA breakeven for the current financial year. Longer-term, increases in production from new vineyards
are expected to drive further revenue growth and margin improvement through scale.
Jonathan White
Chief Executive
10
Gusbourne PLC Report and Financial Statements 2023 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 %
2019
£’000
2020
£’000
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%
2023
£’000
7,052
(2,244)
4,808
(3,565)
(1,912)
(669)
-
(46)
(715)
13.0%
41.1%
68.2%
51%
27%
-9%
* 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 2023 Chief Financial Officer’s review continued
Net revenue by distribution channel - 5 year summary
2021
Years ended 31 December
£’000
2019
£’000
2020
£’000
2022
£’000
2023
£’000
2023
% Growth
2022
% Growth
Net revenue
Direct to Consumer (DTC)*
UK Trade
UK Wine Sales
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
299
934
1,233
292
1,525
71
57
586
721
1,307
634
1,941
90
78
1,653
2,109
22.4%
56.5%
17.7%
3.4%
32.1%
34.2%
30.1%
3.7%
1,016
1,997
3,013
781
3,795
309
87
4,191
31.6%
47.6%
18.6%
2.1%
1,185
3,058
4,243
1,391
5,634
525
84
1,489
3,454
4,943
1,494
6,437
525
90
6,243
7,052
27.4%
49.0%
22.3%
1.3%
28.6%
49.0%
21.2%
1.3%
100.0%
100.0%
100.0%
100.0%
100.0%
*DTC total net revenue £2,014,000 (2022: £1,710,000), 18% growth versus prior year (2022: 29%)
25.7
12.9
16.5
7.4
48.5
0.0
7.5
13.0
16.5
53.2
40.8
78.0
48.5
69.9
-3.4
49.0
Net revenue
Net revenue for the year was up by 13% (2022: 49%) to £7.1m (2022: £6.2m, 2021: £4.2m, 2020: £2.1m and
2019: £1.7m), reflecting continued robust sales growth across our three main distribution channels:
• UK Trade sales grew by 13% to £3.5m. UK Trade sales represent 49% (2022: 49%) of net revenue. The
Company continues to establish new trade accounts across premium hotels and restaurants and open new
business through the fast growing corporate and partnerships channel;
• Direct to consumer net revenue which includes tours and related cellar door operations in Kent grew by
18% to £2.0m DTC represents 29% (2022: 27%) of net revenue for the year. DTC wine sales grew by 26%,
the strong growth was driven by investment in digital marketing and direct wine sales arising from our tour
and experience; and
•
International sales grew by 7% (2022: 78%) to £1.5m (2022: £1.4m) and represented 21% of total net
revenue (2022: 22%).
Gross profit
The gross profit increased by 30% to £4.1m (2022: £3.7m), with gross profit margin on net revenue up to
68.2% (2022: 59.2%), 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;
12
Gusbourne PLC Report and Financial Statements 2023 • The sales distribution mix, with DTC generally at higher margins at gross profit level than the other two
main channels;
• 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 £0.7m (2022: £1.1m). This was after
charging sales and marketing expenses of £3.6m (2022: £3.5m) and administrative expenses of £1.9m
(2022: £1.3m).
Administrative expenses have increased by over £0.5m due to inflationary increases and planned
discretionary spend. Sales and marketing expenses have remained consistent with the previous 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 51% of net revenue for the year, down from 56% in 2022. It is expected that these costs will
continue to decline as a percentage of net revenue over the coming years.
Finance expenses
Finance expenses for the year amounted to £1.6m (2022: £0.5m) and reflect the interest expense on the
Group’s long-term secured debt from PNC of £1.1m (2022: £0.5m), together with the full amortisation of
bank transaction costs, £0.5m (2022 £0.0m), following the notice given to PNC to end the agreement.
Tax
The Group reported a tax credit of £38,000 (2022: £74,000) relating to research and development
tax credits. At 31 December 2023, the Group had tax loses available to carry forward of £23.2m (2022:
£20.7m).
Earnings per share
The Group reported a basic loss per share of 4.89 pence (2022: 4.17 pence).
13
Gusbourne PLC Report and Financial Statements 2023 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
2019
£’000
2020
£’000
2021
£’000
2022
£’000
2023
£’000
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
7,937
2,587
2,569
1,772
-
12,831
12,375
14,214
14,865
9,325
869
(769)
9,425
10,638
1,275
(1,118)
10,795
12,579
1,291
(1,500)
12,370
15,546
1,836
(1,880)
15,502
Total operating assets
20,739
22,256
23,170
26,584
30,367
1,009
1,007
262
1,007
3,128
1,007
269
1,007
71
1,007
22,755
23,525
27,305
27,860
31,445
2019
£’000
2020
£’000
2021
£’000
2022
£’000
2023
£’000
-
2,058
3,001
3,379
2,123
6,613
-
5,132
544
2,108
10,561
14,397
9,326
12,373
16,627
-
-
-
-
-
-
2,094
11,420
2,078
14,451
-
-
1,500
2,763
20,890
12,194
9,128
15,885
13,409
10,555
22,755
23,525
27,305
27,860
31,445
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 2023 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 2023 was £31.4m (2022: £27.9m) represented
by the following principle operating assets:
Fixed assets
•
196 hectares of Freehold land and buildings of £7.9m (2022: £7.8m) – with buildings at cost less
depreciation
• 93 hectares of mature vineyards of £2.6m (2022: £2.7m) – at cost less depreciation
• Plant, machinery and other equipment of £1.8m (2022: £1.7m) – at cost less depreciation
• Right of use assets (under IFRS 16) of £2.6m (2022: £1.9m)
Inventories
Inventories at 31 December 2023 at the lower of cost and net realisable value amounted to £15.5m (2022:
£12.6m). 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 from the time of harvest.
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 at least 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 £3.5m (2022: £2.9m) This represented an
Adjusted EBITDA loss of £0.7m (2022: £1.1m loss) and net working capital outflows (mostly an increase in
wine inventories) of £2.9m (2022: £1.8m).
Capital expenditure was £1.5m for 2023 (2022: £2.5m) and included the additional lease in the right to use
asset (£0.8m) purchase of plant and machinery (£0.4m) and building improvements (£0.3m). 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 2023
Chief Financial Officer’s review continued
Financing and net debt
At 31 December 2023 the Group’s total assets of £31.4m (2022: £27.9m) were financed by:
• Shareholder’s equity of £10.6m (2022: £13.4m)
• Secured debt from PNC of £16.6m (2022: £12.4m). 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 over Bank of England Base Rate). Further details are shown in Notes. The Group gave
notice to terminate the agreement in 2023 and therefore the £16.6m creditor is £16.3m debt and £0.3m
accelerated loan cost amortisation.
• Short term unsecured debt of £1.5m (2022: £0.0m).
• Lease liabilities under IFRS 16 of £2.7m (2022: £2.1m).
At 31 December 2023, the Group’s net debt (PNC facility less Cash, excluding IFRS16 lease liabilities)
amounted to £18.1m (2022: £12.1m)
In January 2024 the Group subsequently issued a Deep Discount Bond for £20.0m, repaid the PNC facility
and the short-term loan of £1.5m.
Katharine Berry
Chief Financial Officer
16
Gusbourne PLC Report and Financial Statements 2023
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 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 2023 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 pages 46 to 47.
18
Gusbourne PLC Report and Financial Statements 2023 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 impact of the Group’s operations on the community and the environment;
• The need to foster the Group’s business relationships with suppliers, customers and others;
• 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 24 to 28 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 24.
19
Gusbourne PLC Report and Financial Statements 2023 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 2023 financial year.
The strategic report on pages 4 to 20 has been approved by the Board and signed on its behalf by:
Jonathan White
Chief Executive Officer
20
Gusbourne PLC Report and Financial Statements 2023 Board of Directors
As at 31 December 2023
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.
Jonathan White, Chief Executive Officer – appointed 19 January 2024
Jonathan is a strategically focussed business leader with a strong background in marketing and
commerce. Over the past 15 years, he has worked within the wine industry, gaining considerable
knowledge and experience. Prior to joining Gusbourne in October 2018, Jonathan held senior Marketing
positions with prominent wine distributor Armit Wines, and world-renowned wine & spirits merchant,
Berry Bros. & Rudd. During his tenure at Gusbourne, Jonathan has been instrumental in the careful
development and global expansion of the Gusbourne brand and establishment of a market-leading cellar
door and direct to consumer sales channel. He assumed the role of Chief Executive Officer in January
2024.
Katharine Berry, Chief Financial Officer & Chief Operating Officer
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 a 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 2023 Board of Directors continued
Simon Bradbury, Chief Commercial Officer – appointed 19 January 2024
With over 30 years of experience in the wine industry Simon has a wealth of commercial knowledge
acquired from several senior positions within the drinks trade. Notably as Sales & Marketing Director at
Amathus Drinks and Managing Director (UK & Ireland) at Codorníu Raventós. Simon’s early sales career
includes senior positions at Enotria and Guy Anderson Wines as well as various roles across Scottish &
Newcastle, where he managed portfolios of national and international accounts and was responsible for
sales performance of wine category.
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.
Mark Hallas, Non-Executive Director – appointed 29 November 2023
A member of the Audit, Remuneration and Nomination Committees.
Following a full 30-year Army career in intelligence and security, Mark took on the role of Chief Executive
of the independent charity, Crimestoppers in 2013. He has recently revamped the charity’s strategy
focussing on providing wider support to all beneficiaries, across the UK, with an emphasis on financial
sustainability. Mark works closely with Directors, Trustees and Volunteers to ensure Crimestoppers
is as effective a service as possible. This includes fostering key relationships with Police and Crime
Commissioners, Chief Constables, Home Office Ministers and Senior Civil Servants, as well as partners in
the Commercial and Third Sector. He is also a Non-Executive Director of Carlisle Support Services and
Shutdown Maintenance Services Limited providing input on a wide range of issues.
Ian Robinson BA FCA, Non–Executive Director
A member of the Audit (Chairman), Remuneration and Nomination Committees.
Ian is currently a non-executive on the Board 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 2023 Report of the Directors
for the year ended 31 December 2023
The Directors present their report together with the audited financial statements for the year ended 31
December 2023.
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 42 and shows the result for the
year. No dividend was declared (December 2022: £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), resigned 6 September 2023
Jonathan White (Chief Executive Officer), appointed 19 January 2024
Katharine Berry (Chief Financial Officer and Chief Operating Officer), appointed 21 March 2023
Simon Bradbury (Chief Commercial Officer), appointed 19 January 2024
Jon Pollard (Chief Operating Officer), resigned 21 March 2023
Lord Arbuthnot PC (Non-Executive Director)
Ian Robinson (Non-Executive Director)
Mark Hallas (Non-Executive Director), appointed 29 November 2023
Matthew Clapp (Non-Executive Director), resigned 29 November 2023
Paul Bentham (Non-Executive Director), resigned 21 March 2023
Andrew Weeber (Non-Executive Director), resigned 21 March 2023
23
Gusbourne PLC Report and Financial Statements 2023 Report of the Directors continued
The beneficial interest of Directors who held office at 31 December 2023 in the share capital of the
Company is shown below:
Ian Robinson
Jim Ormonde
Mike Paul
Lord Arbuthnot PC
Mark Hallas
Katharine Berry
Ordinary shares of 1 pence each
December 2023
Number Percentage
December 2022
Number
Percentage
562,753
319,788
171,413
118,705
-
-
0.92%
0.53%
0.28%
0.20%
-
-
542,753
300,000
160,806
111,360
-
-
0.89%
0.49%
0.26%
0.18%
-
-
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 Company 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.
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 and 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.
24
Gusbourne PLC Report and Financial Statements 2023 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 (one at 31 December 2023, three from 19 January
2024) Executive Directors and four Non-Executive Directors. The Board maintains a suitable balance
between independence and knowledge of the Company 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 Company 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 (prior to resignation) are associated with the Company’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 Company 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 22.
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 Company 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 Company faces.
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 they are committed:
• 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 Company’s senior leadership team, as well as through other stakeholder engagement.
25
Gusbourne PLC Report and Financial Statements 2023 Report of the Directors continued
The make-up of the Board and succession planning is reviewed periodically to ensure the Company 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 Company. 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 Company.
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 Company’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 Company 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 Company’s management.
• Roles of the Board, Chairman and Chief Executive Officer
The Board is responsible for the long-term success of the Company. 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 subsidiaries, their annual budgets and their performance in relation
to those budgets. There is a clear division of responsibility at the head of the Company. 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 Company 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.
26
Gusbourne PLC Report and Financial Statements 2023 • Executive Team
The Executive Team consists of Jonathan White (Chief Executive Officer), Katharine Berry (Chief
Financial Officer), Simon Bradbury (Chief Commercial 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 Company, 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, 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, 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.
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, Mark Hallas, 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.
27
Gusbourne PLC Report and Financial Statements 2023 Report of the Directors continued
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 Company 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
Number
Percentage
Lord Ashcroft KCMG PC
40,328,009
66.26 %
Andrew Weeber
Paul Bentham
2,722,221
1,835,630
4.47 %
3.02 %
At 31 December 2023 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 2022: £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.
Financial risk management
The Group’s objectives and policies relating to financial risk management are fully explained in Note 3 on
pages 55 to 57.
28
Gusbourne PLC Report and Financial Statements 2023 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 Company’s transactions and disclose with reasonable accuracy at any time the financial
position of the Company and enable them to ensure that the financial statements comply with the
requirements of the Companies Act 2006. They are also responsible for safeguarding the assets of the
Company and hence for taking reasonable steps for the prevention and detection of fraud and other
irregularities.
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.
29
Gusbourne PLC Report and Financial Statements 2023 Report of the Directors continued
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 Kreston Reeves LLP as auditors will be proposed at the next annual general
meeting.
By order of the Board
Katharine Berry
Secretary and Director
Date: 22 May 2024
30
Gusbourne PLC Report and Financial Statements 2023
Report of the independent auditors
for the year ended 31 December 2023
Opinion
We have audited the financial statements of Gusbourne PLC (the ‘parent company’) and its subsidiaries
(the ‘Group’) for the year ended 31 December 2023 which comprise the Consolidated statement of
comprehensive income, Consolidated and Company statements of financial position, Consolidated
statement of cash flows, Consolidated and Company statements of changes in equity and notes to the
financial statements, including a summary of significant Group accounting policies. The financial reporting
framework that has been applied in their 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 FRS 101 Reduced Disclosure Framework (United Kingdom
Generally Accepted Accounting Practice).
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 2023 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.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK))
and applicable law. Our responsibilities under those standards are further described in the Auditor’s
responsibilities for the audit of the financial statements section of our report. We are independent of
the Group 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. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
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 Parent company’s ability to continue to
adopt the going concern basis of accounting including the following:
• Gained an understanding of the systems and controls around managements’ going concern assessment,
including for the preparation and review process for forecasts and budgets.
• Gained an understanding of the systems and controls around managements’ going concern assessment,
including for the preparation and review process for forecasts and budgets.
31
Gusbourne PLC Report and Financial Statements 2023 Report of the independent auditors
for the year ended 31 December 2023 continued
• Analysed the financial strength of the business at the year end date and considered key trends in balance
sheet strength and business performance over the last three years.
• Testing the mechanical integrity of forecast model by checking the accuracy and completeness of the
model, including challenging the appropriateness of estimates and assumptions with reference to empirical
data and external evidence.
• Based on our above assessment we performed our own sensitivity analysis in respect of the key
assumptions underpinning the forecasts.
• We performed stress-testing analysis on the core cash generating units of the business to confirm cash
inflow levels needed to maintain minimal liquidity required to meet liabilities as they fall due.
• We considered post year end performance of the business, comparing this to budget.
• The group’s banking facility documentation was reviewed to ensure sufficient resource was available.
• We reviewed the adequacy and completeness of the disclosure included within the financial statements in
respect of going concern.
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 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. However, because not all future events or conditions can be predicted,
this statement is not a guarantee as to the Group’s or Parent company’s ability to continue as a going
concern.
An overview of the scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement
in the financial statements. In particular, we looked at where the directors made subjective judgements,
for example in respect of significant accounting estimates that involved making assumptions and
considering future events that are inherently uncertain. As in all of our audits we also addressed the risk of
management override of internal controls, including evaluating whether there was evidence of bias by the
directors that represented a risk of material misstatement due to fraud.
32
Gusbourne PLC Report and Financial Statements 2023 Our application of materiality
Group financial statements
Parent company financial statements
Materiality
£505,000 (2022: £300,000)
£435,900 (2022: £153,000)
Basis for determining
materiality
~1.5% of gross assets (2022: ~ 1% of
gross assets)
~1.5% of gross assets (2022: ~ 1% of gross
assets)
Rationale for
benchmark applied
Performance
materiality
Basis for determining
performance
materiality
Rationale for
performance
materiality applied
The group's principal activity is that
of growing and selling wine. Whilst
currently in a development phase,
trade is still in its infancy. Therefore,
a benchmark for materiality based
on the gross assets of the group,
predominantly inventory and
tangible fixed assets, is considered
to be appropriate.
The company’s principal activity is that
of a holding company for the group
and as such has no direct trade. It
does hold investments balances with
subsidiaries. Therefore, a benchmark for
materiality based on the gross assets
of the company is considered to be
appropriate.
£354,000 (2022: £225,000)
£305,000 (2022: £115,000)
70% of materiality (2022: 75% of
materiality)
70% of materiality (2022: 75% of
materiality)
On the basis of our risk
assessments, together with our
assessment of the Group’s overall
control environment and the
business being listed on the AIM
market our judgement was that
performance materiality was 70% of
our planning materiality. In assessing
the appropriate level, we consider
the nature, the number and impact
of the audit differences identified in
the previous year’s audit.
On the basis of our risk assessments,
together with our assessment of the
company’s overall control environment
and the group being listed on the
AIM market, our judgement was that
performance materiality was 70% of
our planning materiality. In assessing
the appropriate level, we consider
the nature, the number and impact of
the audit differences identified in the
previous year’s audit.
Triviality threshold
£25,300 (2022: £15,000)
£21,800 (2022: £7,650)
Basis for determining
triviality threshold
5% of materiality
5% of materiality
We reported all audit differences found in excess of our triviality threshold to the directors and the
management board.
For each Group company within the scope of our Group audit, we allocated a materiality that is less than
our overall Group materiality. The range of materiality allocated across each Group company was between
£501,000 and £435,900. The scope of our audit was influenced by our application of materiality as we set
certain quantitative thresholds for performance materiality and use these thresholds as a consideration
tool to help to determine the scope of our audit and the nature, timing and extent of our audit
procedures on the individual financial statement line items and disclosures and in evaluating the effect of
misstatements, both individually and in aggregate on the financial statements as a whole.
33
Gusbourne PLC Report and Financial Statements 2023 Report of the independent auditors
for the year ended 31 December 2023 continued
Coverage overview
Totals at 31 December 2023:
£7,052,000
£3,003,000
£10,555,000
Group revenue
Group loss before tax
Group net assets
Full statutory audit (Kreston
Reeves)
£7,052,000 (100%)
£3,003,000 (100%)
£10,555,000 (100%)
We tailored the scope of our audit to ensure that we performed sufficient work to be able to give an
opinion on the financial statements as a whole, taking into account the structure of the Group and the
parent company, the accounting processes and controls, and the industry in which they operate.
Our scoping considerations for the Group audit were based both on financial information and risk. The
below table summarises for the parent company, and its subsidiaries, in terms of the level of assurance
gained:
Group component
Gusbourne PLC
Gusbourne Estate Limited
Level of assurance
Full statutory audit (Kreston Reeves)
Full statutory audit (Kreston Reeves)
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the financial statements of the current period and include the most significant assessed risks of
material misstatement (whether or not due to fraud) that we identified, including those which had the
greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the
efforts of the engagement team. These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters. This is not a complete list of all risks identified by our audit.
34
Gusbourne PLC Report and Financial Statements 2023 Revenue recognition:
Significance and nature of key
risk
Revenue recognition gives rise to
a risk of material misstatement
due to fraud.
How our audit addressed the key risk
Sales of wine in the period were tested from the trigger point of
the sale to the point of recognition in the financial statements,
corroborating this to contract sales where applicable and the
recognition stages detailed in IFRS 15.
Revenue streams were further analytically reviewed via comparison to
our expectations.
Cut-off of revenue was reviewed by analysing sales recorded
during the period just before and after the financial year end and
determining if the recognition applied was appropriate.
Walkthrough testing was performed to ensure that key systems and
controls in place around the revenue cycle operated as designed.
The accuracy of revenue disclosures in the accounts were confirmed
to be consistent with the revenue cycle observed and audited. The
completeness of these disclosures was confirmed by reference to the
full disclosure requirements as detailed in IFRS 15.
Key observations communicated to the Audit Committee
We have no concerns over the material accuracy of revenue recognised in the financial statements.
Valuation / impairment of investment:
Significance and nature of key
risk
The parent company has a
significant investment in its
subsidiary. Given the trading
infancy of the subsidiary and the
relative uncertainty surrounding
its future activities, there is the
risk that this investment could
require significant impairment.
How our audit addressed the key risk
We reviewed the supporting documentation associated with the
investment to ensure that an accurate costing was originally included
within the financial statements.
The market cap of the group was obtained directly from third party
investment exchanges and recalibrated to present a reasonable fair
value of the underlying trading subsidiary.
Both present and future financial data was obtained and considered
for potential indicators of impairment. The key assumptions
made within these reports were reviewed and considered for
reasonableness, including sensitivity analysis. We have further
performed our own impairment considerations to consider if events/
factors in place at year end present material impairment indicators.
Key observations communicated to the Audit Committee
We have no concerns over the material accuracy of investment in subsidiary values recognised in the
financial statements.
35
Gusbourne PLC Report and Financial Statements 2023 Report of the independent auditors
for the year ended 31 December 2023 continued
Going concern:
Significance and nature of key
risk
The Group has reported an
operating loss from continued
operations in the year to 31
December 2023 of £1,376k
(2022: loss of £2,103k).
The Consolidated statement of
financial position shows a net
asset position of £10,555k (2022:
£13,409k) with cash at bank of
£71k (2022: £269k).
In light of the historic loss-
making position of the Group,
the uncertain economic climate
and the dependence on
financing facilities to support the
potential liquidity issues facing
the Group, going concern was
considered to be a key audit risk
area.
How our audit addressed the key risk
We reviewed the Group’s results and financial position and assessed
the ability of the Group to meet its future financial obligations based
upon its available resources.
We obtained the Directors’ trading and cash flow forecasts which
covered the periods to 31 December 2025, and which support their
assessment of the Group’s ability to continue as a going concern.
Our audit work on the forecasts included checking their mathematical
accuracy, assessing the reasonableness of assumptions used and
carrying out sensitivity analysis primarily on differing levels of revenue
to assess the impact on the forecasts and considering the accuracy of
previously prepared forecasts to actual results achieved.
We reviewed the post balance sheet date financial information
associated with the entity to ensure that there are sufficient plans
in place to support the budgeted future operational activity. As
disclosed within the Post Balance Sheet Events, the new financing
arrangements are considered to have a key part in securing the future
success of the Group.
Key observations communicated to the Audit Committee
We have no concerns over the material accuracy of the going concern disclosures in the financial
statements.
Other information
The other information comprises the information included in the annual report other than the financial
statements and our auditor’s report thereon. The directors are responsible for the other information
contained within the annual report. Our opinion on the financial statements does not cover the other
information and, except to the extent otherwise explicitly stated in our report, we do not express any
form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial statements, or our
knowledge obtained in the 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.
36
Gusbourne PLC Report and Financial Statements 2023 Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
•
•
the information given in the strategic report and the directors’ report for the financial year for which the
financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors’ report have been prepared in accordance with applicable legal
requirements.
Matters on which we are required to report by exception
In the light of our 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 (set out on page 29), the directors are
responsible for the preparation of the financial statements and for being satisfied that they give a true and
fair view, and for such internal control as the directors determine is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group’s and 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 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.
37
Gusbourne PLC Report and Financial Statements 2023 Report of the independent auditors
for the year ended 31 December 2023 continued
Capability of the audit in detecting irregularities, including fraud
Based on our understanding of the group and industry, and through discussion with the directors and
other management (as required by auditing standards), we identified that the principal risks of non-
compliance with laws and regulations related to health and safety, anti-bribery and employment law. We
considered the extent to which non-compliance might have a material effect on the financial statements.
We also considered those laws and regulations that have a direct impact on the preparation of the
financial statements such as the Companies Act 2006. We communicated identified laws and regulations
throughout our team and remained alert to any indications of non-compliance throughout the audit.
We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial
statements (including the risk of override of controls), and determined that the principal risks were related
to the posting of inappropriate journals to increase revenue, reduce expenditure or overstate the true and
fair value of the balance sheet. Audit procedures performed by the group engagement team included:
• Discussions with management and assessment of known or suspected instances of fraud, review of the
reports made by management, and review of reports made by external parties to the Group; and
• Assessment of identified fraud risk factors; and
• Challenging assumptions and judgements made by management in its significant accounting estimates;
and
• Performing analytical procedures to identify any unusual or unexpected relationships, including related
party transactions, that may indicate risks of material misstatement due to fraud; and
• Confirmation of related parties with management, and review of transactions throughout the period to
identify any previously undisclosed transactions with related parties outside the normal course of business;
and
• Performing analytical procedures with automated data analytics tools to identify any unusual or
unexpected relationships, including related party transactions, that may indicate risks of material
misstatement due to fraud; and
• Reading minutes of meetings of those charged with governance; and
• Performing integrity testing to verify the legitimacy of banking records obtained from management; and
• Physical inspection of tangible assets and inventories susceptible to fraud or irregularity; and
•
Identifying and testing journal entries, in particular any manual entries made at the year-end for financial
statement preparation.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities,
including those leading to a material misstatement in the financial statements or non-compliance with
regulation. This risk increases the more that compliance with a law or regulation is removed from the
events and transactions reflected in the financial statements, as we will be less likely to become aware of
instances of non-compliance.
38
Gusbourne PLC Report and Financial Statements 2023 As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain
professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness
of the Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by the directors.
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that
may cast significant doubt on the Group’s or the parent company’s ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report
to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Group or the parent company to cease to continue as
a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events in a
manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the consolidated financial statements. We
are responsible for the direction, supervision and performance of the Group audit. We remain solely
responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
Other matters which we are required to address
We were appointed by the audit committee in the year to audit the financial statements. Our total
uninterrupted period of engagement is 1 year, covering the year ended 31 December 2023.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the group or the
parent company and we remain independent of the group and the parent company in conducting our
audit.
Our audit opinion is consistent with the additional report to the audit committee.
39
Gusbourne PLC Report and Financial Statements 2023 Report of the independent auditors
for the year ended 31 December 2023 continued
Use of our Report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16
of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s
members those matters we are required to state to them in an auditor report and for no other purpose.
To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the
company and the company’s members as a body, for our audit work, for this report, or for the opinions we
have formed.
Stephen Tanner BSc(Econ) FCA
(Senior Statutory Auditor)
For and on behalf of
Kreston Reeves LLP
Chartered Accountants
Statutory Auditor
London
Date: 22 May 2024
40
Gusbourne PLC Report and Financial Statements 2023
Consolidated statement of
comprehensive income
for the year ended 31 December 2023
Revenue
Excise duties
Net revenue
Cost of sales
Gross profit
Year ended
31 December
2023
£’000
Year ended
31 December
2022
£’000
7,665
(613)
7,052
6,858
(615)
6,243
Note
4
4
4
(2,244)
(2,546)
4,808
3,697
Fair value movement in biological produce
13
(46)
(239)
Administrative expenses
Loss from operations
Finance expenses
Loss before tax
Tax credit
(6,138)
(5,561)
(1,376)
(1,627)
(2,103)
(496)
(3,003)
(2,599)
38
74
5
8
9
Loss and total comprehensive loss for the year attributable to owners of the parent
(2,965)
(2,525)
Loss per share attributable to the ordinary equity holders of the parent:
Basic (pence)
Diluted (pence)
10
10
(4.89)
(4.88)
(4.17)
(4.15)
The notes on pages 46 to 71 form part of these financial statements
41
Gusbourne PLC Report and Financial Statements 2023 Consolidated statement of
financial position
at 31 December 2023
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
Loans and borrowings
Non-current liabilities
Loans and borrowings
Lease liabilities
Total liabilities
Net assets
Company Number 08225727
42
31 December
2023
£’000
31 December
2022
£’000
Note
11
12
15
13
14
15
19
16
18
17
17
18
1,007
14,865
-
15,872
-
15,546
1,836
71
17,453
33,325
1,007
14,198
16
15,221
-
12,579
1,291
269
14,139
29,360
(1,880)
(251)
(18,127)
(1,500)
(84)
-
(20,258)
(1,584)
-
(2,512)
(2,512)
(22,770)
(12,373)
(1,994)
(14,367)
(15,951)
10,555
13,409
Gusbourne PLC Report and Financial Statements 2023 Issued capital and reserves attributable to owners of the parent
Share capital
Share premium
Merger reserve
Share option reserve
Retained earnings
Total equity
Company Number 08225727
31 December
2023
£’000
31 December
2022
£’000
Note
20
21
21
21
21
12,192
21,190
(13)
71
12,191
21,144
(13)
7
(22,885)
(19,920)
10,555
13,409
The financial statements were approved and authorised for issue by the Board of Directors on 22 May
2024 and were signed on its behalf by:
James Ormonde
Non-Executive Chairman
Jonathan White
Chief Executive Officer
The notes on pages 46 to 71 form part of these financial statements
43
Gusbourne PLC Report and Financial Statements 2023 Consolidated statement of
cash flows
for the year ended 31 December 2023
31 December
2023
£’000
31 December
2022
£’000
Note
(3,003)
(2,599)
12
12
8
13
12
12
20
19
19
661
(14)
1,627
46
64
(491)
(2,742)
380
(3,472)
601
(28)
496
239
7
74
(2,049)
385
(2,874)
(1,485)
(2,502)
16
28
(1,469)
(2,474)
(4,829)
8,570
(4,547)
7,620
792
-
(223)
1,500
(1,114)
52
(5)
-
(66)
(101)
-
(456)
46
(7)
4,743
2,489
(198)
(2,859)
269
3,128
71
269
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
(Decrease)/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 used in investing activities
Financing activities
Revolving facility repayments
Revolving facility drawdowns
Financing Agreements entered into
Loan issue costs
Repayment of lease liabilities
Issue of short term loan facility
Interest paid
Issue of ordinary shares
Share issue expense
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 46 to 71 form part of these financial statements
44
Gusbourne PLC Report and Financial Statements 2023
Consolidated statement of
changes in equity
for the year ended 31 December 2023
Share
capital
£’000
12,190
Share
premium
£’000
21,103
Merger
reserve
£’000
(13)
1 January 2022
Comprehensive loss for the year
Share issue
Share issue expenses
Equity share options issued
-
1
-
-
-
48
(7)
-
31 December 2022
12,191
21,144
1 January 2023
12,191
21,144
Comprehensive loss for the year
Share issue
Share issue expenses
Equity share options issued
-
1
-
-
-
51
(5)
-
-
-
-
-
(13)
(13)
-
-
-
-
31 December 2023
12,192
21,190
(13)
The notes on pages 46 to 71 form part of these financial statements
Total
attributable
to equity
holders of
parent
£’000
15,885
(2,525)
49
(7)
7
Retained
earnings
£’000
(17,395)
(2,525)
-
-
-
(19,920)
13,409
(19,920)
(2,965)
13,409
(2,965)
-
-
-
52
(5)
64
(22,885)
10,555
Share
option
reserve
£’000
-
-
-
-
7
7
7
-
-
-
64
71
45
Gusbourne PLC Report and Financial Statements 2023 Notes forming part of the financial
statements
for the year ended 31 December 2023
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 2023 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 72 to 78.
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 loss
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 were approved.
The Group’s major shareholder proposed in 2023, to replace the existing
PNC borrowing facility with a new and enlarged facility on very similar terms
and conditions to the PNC borrowing facility. The Group gave notice to close
down the PNC facility in December 2023. In January 2024 the Group issued
a Deep Discount Bond for £20.0m, repaid the PNC facility and the short-term
loan of £1.5m.
The Directors have considered a scenario in which the only cash available
is from the new agreed facility and planned but not yet committed capital
expenditure is deferred. As at 31 December 2023 £18.0m was available to
the Group, of which £0.3m was unutilised; represented by cash in hand and
at bank of £0.1m and undrawn funds from the Group’s asset-based lending
facility of £0.2m. In January 2024 the PNC debt and short-term loan were
replaced with a Deep Discount Bond for £20.0m. Under this scenario the
available lending facilities and cash held at bank, cover working capital
requirements without the need for an increased lending facility.
1
Accounting policies
46
Gusbourne PLC Report and Financial Statements 2023 1
Accounting policies
(continued)
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 10% 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; no
expansion of winery and vineyard costs and reducing capital expenditure
to enable the Group to continue as a going concern for the next 12 months.
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.
IFRS 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 41 and 46 years. In 2023 the Group entered
into a long term lease agreement on a storage building, the lease has a
remaining life of 5 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.
47
Gusbourne PLC Report and Financial Statements 2023 Notes forming part of the financial
statements continued
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.
The financial statements are presented in pounds sterling, rounded to the
nearest thousand.
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.
1
Accounting policies
(continued)
48
Gusbourne PLC Report and Financial Statements 2023 1
Accounting policies
(continued)
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.
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.
49
Gusbourne PLC Report and Financial Statements 2023 Notes forming part of the financial
statements continued
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).
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.
1
Accounting policies
(continued)
50
Gusbourne PLC Report and Financial Statements 2023 1
Accounting policies
(continued)
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.
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
5-33% 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.
51
Gusbourne PLC Report and Financial Statements 2023 Notes forming part of the financial
statements continued
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
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.
1
Accounting policies
(continued)
52
Gusbourne PLC Report and Financial Statements 2023 1
Accounting policies
(continued)
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).
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.
53
Gusbourne PLC Report and Financial Statements 2023 Notes forming part of the financial
statements continued
1
Accounting policies
(continued)
Changes to International Financial Reporting Standards
The following standards have been amended and adoption is mandatory for
periods beginning on or after 1 January 2023, with early adoption permitted,
none of these standards would materially affect the Annual Report and
Accounts: IFRS 17 Insurance Contracts; Amendments to IFRS 17 – Initial
Application of IFRS 17 & IFRS 9 - Comparative Information; Amendments
to IAS 1 and IFRS Practice Statement 2 – Making Materiality Judgements
- Disclosure of Accounting Policies; Amendments to IAS 8 – Accounting
Policies, Changes in Accounting Estimates and Errors - Definition of
Accounting Estimates; Amendments to IAS 12 – Income Taxes - Deferred
Tax related to Assets and Liabilities arising from a Single Transaction;
Amendments to IAS 12 – Income Taxes - International Tax Reform – Pillar Two
Model Rules.
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.
54
Gusbourne PLC Report and Financial Statements 2023 2
Critical accounting policies
(continued)
3
Financial instruments -
risk management
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’):
• 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.
55
Gusbourne PLC Report and Financial Statements 2023 Notes forming part of the financial
statements continued
3
Financial instruments -
risk management
(continued)
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.
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
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
21,808
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
At 31 December 2022
Trade and other
payables
Loans and borrowings
Lease liabilities
Total
At 31 December 2023
Trade and other
payables
1,413
467
Loans and borrowings
16,627
1,500
Lease liabilities
Total
71
18,111
214
2,181
-
-
285
285
-
-
-
-
1,880
18,127
733
733
3,787
5,090
3,787 25,097
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 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.
56
Gusbourne PLC Report and Financial Statements 2023 3
Financial instruments -
risk management
(continued)
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
Group’s bad debts are kept to a minimum. The maximum trade credit risk
exposure at 31 December 2023 in respect of trade receivables is £1,167,000
(2022: £957,000) and due to the prompt payment cycle of these trade
receivables, the expected credit loss is negligible at £13,000 (2022: £8,000).
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.
The Group moved to a fixed interest rate with the issue of the Deep Discount
Bond in January 2024.
4
Revenue and segmental
information
Wine Sales
Other income
Net revenue
Excise duties
Revenue
Year ended
31 December
2023
£’000
Year ended
31 December
2022
£’000
6,437
615
7,052
613
7,665
5,634
609
6,243
615
6,858
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
2023
£’000
Year ended
31 December
2022
£’000
5,558
117
1,377
7,052
4,852
231
1,160
6,243
The Directors do not consider the Group places reliance on any major
customers.
57
Gusbourne PLC Report and Financial Statements 2023
Notes forming part of the financial
statements continued
5
Loss from operations
Loss from operations has been arrived at after charging:
Year ended
31 December
2023
£’000
Year ended
31 December
2022
£’000
Depreciation of owned property, plant and
equipment
Loss/(profit) on disposal of fixed assets
Staff costs expensed to consolidated statement of
income
661
14
601
(28)
2,610
1,770
6
Auditor’s remuneration
7
Staff costs
Auditor’s remuneration
- Audit: consolidation and parent
- Audit: subsidiaries
Staff costs (including Directors) comprise:
Wages and salaries
Social security contributions and similar taxes
Pension contributions
Share based payment
Year ended
31 December
2023
£’000
Year ended
31 December
2022
£’000
40
20
60
65
20
85
Year ended
31 December
2023
£’000
Year ended
31 December
2022
£’000
3,571
338
136
65
4,110
2,492
261
106
7
2,866
£1,435,000 (2022: £1,089,000) 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 112 (2022: 96). The average monthly number of employees,
including the directors, during the period was as follows:
Directors
Production
Administration
Year ended
31 December
2023
No.
Year ended
31 December
2022
No.
7
45
60
112
7
39
49
95
58
Gusbourne PLC Report and Financial Statements 2023
7
Staff costs (continued)
Directors’ remuneration was as follows:
Year ended
31 December
2023
£’000
Year ended
31 December
2022
£’000
The total emoluments of all Directors during the
year was:
Emoluments (including benefits)
Contributions to defined contribution pension plans
Total
451
17
468
312
13
325
Total emoluments for all directors excluding
pension contributions:
J Ormonde
A Weeber
M Paul
K Berry
J Pollard
C Holland
Lord Arbuthnot PC
M Clapp
I Robinson
Total
Pension contributions:
K Berry
J Pollard
C Holland
Total
Year ended
31 December
2023
£’000
Year ended
31 December
2022
£’000
61
-
44
132
86
128
-
-
-
451
59
-
48
-
77
116
-
12
-
312
Year ended
31 December
2023
£’000
Year ended
31 December
2022
£’000
6
6
5
17
-
6
7
13
The emoluments of the highest paid Director
during the year were:
138
123
The total emoluments for K Berry, J Pollard and C Holland include benefits
to the value of £nil (2022: £nil), £1,000 (2022: £1,000) and £2,000 (2022:
£1,000) respectively.
59
Gusbourne PLC Report and Financial Statements 2023 Notes forming part of the financial
statements continued
7
Staff costs (continued)
The Directors are considered to be key management
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
2023
£’000
Year ended
31 December
2022
£’000
451
41
17
509
312
26
13
351
Year ended
31 December
2023
£’000
Year ended
31 December
2022
£’000
1,114
513
-
1,627
456
40
-
496
9
Taxation
There is no current or deferred tax charge for the year (2022: £nil).
Year ended
31 December
2023
£’000
Year ended
31 December
2022
£’000
Loss on ordinary activities before tax
(3,003)
(2,599)
Loss on ordinary activities at the standard rate of
corporation tax in the UK for the year of 23.52%
(December 2022: 19%)
(706)
(493)
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
(45)
54
697
(38)
(38)
134
(158)
517
(74)
(74)
60
Gusbourne PLC Report and Financial Statements 2023
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 £23,245,000 (December 2022: £20,654,000).
Tax credit of £38,000 (2022: £74,000) relating to research and development
tax credits for the years ended 31 December 2023 (2022: years ended 31
December 2020 and 2021).
10 Loss per share
Basic earnings per ordinary share are based on a loss of £2,965,000
(December 2022: £2,525,000) and ordinary shares 60,637,465 (December
2022: 60,595,919) of 1 pence each, being the weighted average number of
shares in issue during the year.
11
Intangibles
Weighted
average
number of
shares
Loss per
Ordinary
share pence
Loss
£’000
Year ended 31 December 2023
(2,965)
60,637,465
Year ended 31 December 2022
(2,525)
60,595,919
(4.89)
(4.17)
Diluted earnings per share are based on a loss of £2,965,000 and ordinary
shares of 60,637,465 and no dilutive warrant options.
Loss
£’000
Diluted
number of
shares
Loss per
Ordinary
share pence
Year ended 31 December 2023
(2,965)
60,637,465
Year ended 31 December 2022
(2,525)
60,595,919
(4.89)
(4.17)
Cost
At 1 January 2023 and 31 December 2023
777
230
1,007
Goodwill
£’000
Brand
£’000
Total
£’000
Impairment losses
At 1 January 2023 and 31 December 2023
-
-
-
Net book value
At 31 December 2022 and
31 December 2023
777
230
1,007
61
Gusbourne PLC Report and Financial Statements 2023
Notes forming part of the financial
statements continued
11
Intangibles (continued)
The carrying value of goodwill and the brand is allocated to the following
cash-generating units:
Gusbourne Estate
December
2023
£’000
December
2022
£’000
1,007
1,007
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 12.4% (December 2022: 12.6%)
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 24.9% (December 2022: 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
Cost
At 1 January 2022
Additions
Disposals
6,896
1,824
-
At 31 December 2022
8,720
At 1 January 2023
Additions
Disposals
8,720
249
-
3,611
645
(65)
4,191
4,191
370
(26)
2,114
3,637
-
-
-
-
2,114
3,637
2,114
812
-
3,637
5
-
118
33
-
151
151
49
(2)
Total
£’000
16,376
2,502
(65)
18,813
18,813
1,485
(28)
At 31 December 2023
8,969
4,535
2,926
3,642
198
20,270
12
Property, plant and
equipment
62
Gusbourne PLC Report and Financial Statements 2023
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
Accumulated
depreciation
At 1 January 2022
Depreciation charge for
the year
Depreciation on
disposals
At 31 December 2022
762
128
-
890
2,269
311
(65)
2,515
At 1 January 2023
890
2,515
Depreciation charge for
the year
Depreciation on
disposals
At 31 December 2023
142
353
-
1,032
(26)
2,842
138
46
-
184
184
155
-
339
779
146
-
925
925
148
-
1,073
85
4,033
16
647
-
101
(65)
4,615
101
4,615
18
-
119
816
(26)
5,405
Net book value
At 31 December 2022
At 31 December 2023
7,830
7,937
1,676
1,693
1,930
2,587
2,712
2,569
50
79
14,198
14,865
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 £155,000 (2022: £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
2023
£’000
December
2022
£’000
-
1,934
(1,888)
(46)
-
-
1,830
(1,591)
(239)
-
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 2023 harvest is £2,800 per tonne
(2022: £3,000 per tonne).
63
Gusbourne PLC Report and Financial Statements 2023
Notes forming part of the financial
statements continued
13
Biological produce
(continued)
14
Inventories
15 Trade and other receivables
A 10% increase in the estimated market price of grapes to £3,080 per tonne
would result in an increase of £199,000 (2022: £159,000) in the fair value of
the grapes harvested in the year. A 10% decrease in the estimated market
price of grapes to £2,520 per tonne would result in a decrease of £199,000
(2022: £159,000) in the fair value of the grapes harvested in the year.
A fair value loss of £46,000 (2022: £239,000 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
2023
£’000
December
2022
£’000
925
14,621
15,546
1,249
11,330
12,579
During the year £1,678,000 (December 2022: £1,858,000) was transferred to
cost of sales.
Non current assets
Other receivables
Current assets
Trade receivables
Prepayments
Other receivables
Total trade and other receivables
December
2023
£’000
December
2022
£’000
-
-
1,167
595
74
1,836
16
16
957
113
147
1,291
Trade and other receivables are due within 1 year apart from £nil (December
2022: £16,000) 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 2023 the lifetime expected loss
provision for trade receivables is 1.14%, £13,000 (2022: 0.75%, £8,000). This is
based on expected credit losses from previous losses incurred by the Group.
64
Gusbourne PLC Report and Financial Statements 2023
16 Trade and other payables
17 Loans and borrowings
Trade payables
Accruals
Other payables
Other payables - tax and social security payments
December
2023
£’000
December
2022
£’000
956
723
40
161
833
501
68
98
Total trade and other payables
1,880
1,500
Book values are approximate to fair value at 31 December 2023 and 31
December 2022.
Current liabilities
Bank loans
Short-term Loan
Total current liabilities
Non current liabilities
Bank loans
Unamortised bank transaction costs
Total non current loans and borrowings
December
2023
£’000
December
2022
£’000
16,627
1,500
18,127
-
-
-
-
-
-
12,541
(168)
12,373
The bank loan of £16,627,000 with PNC Business Credit shown above
includes early repayment fees and associated costs of £336,000.
In August 2022 the Group entered into an amended and restated agreement
with PNC Financial Services UK Limited with a total £16.5 million asset-based
lending facilities. These 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% (2022: 2.50%) over Bank of England Base Rate. In
December 2023 the Group gave notice to PNC Financial Services UK Limited
to repay the balance in January 2024. The PNC 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.
The Group decided to replace the existing PNC borrowing facility with a
new and enlarged facility on very similar terms and conditions to the PNC
borrowing facility. The Group gave notice to close down the PNC facility in
December 2023.
In November 2023 the Group entered into a short-term unsecured loan
facility of £1.5m with Moongate Holdings Group Limited. The term of the loan
was one year and the interest rate is at the annual rate of 2.50% over Bank of
England Base Rate.
In January 2024 the Group subsequently issued a Deep Discount Bond for
£20.0m, repaid the PNC facility and the short-term loan of £1.5m.
65
Gusbourne PLC Report and Financial Statements 2023
Notes forming part of the financial
statements continued
17
Loans and borrowings
(continued)
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
2023
£’000
December
2022
£’000
18,127
-
-
-
-
12,373
18
Lease liability
During the period the Group accounted for seven (2022: 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% and for new 2023 lease 6.68%.
Net carrying value – 1 January 2023
New Lease
Interest
Payments
Net carrying value – 31 December 2023
The lease payments under long term leases
liabilities fall due as follows:
Current lease liabilities
Non current lease liabilities
Total liabilities
Land &
Buildings
£’000
2,078
792
116
(223)
2,763
December
2023
£’000
December
2022
£’000
251
2,512
2,763
84
1,994
2,078
During the period an interest charge of £116,000 (2022: £85,000) arose on
the lease liability in respect of land and property leases (2022: only land
leases). This interest cost has been added to growing crop costs and wine
stocks on the basis that the lease liability solely relates to the production of
grapes and wine.
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:
66
Gusbourne PLC Report and Financial Statements 2023
18
Lease liability (continued)
• 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 2023 and 2022 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.
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
2023
£’000
December
2022
£’000
70
1
71
267
2
269
Changes in financing activities are shown in the reconciliation of liabilities
from financing transactions below:
At 1 January 2022
Cash flows
Non cash flows
- Interest accruing in
period
- Loans and
borrowings classified
as non-current at
31 December 2021
becoming current
during 2022
- Amortisation of bank
transaction costs
Cash
£’000
3,128
(2,859)
-
-
-
At 31 December 2022
269
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)
-
-
-
-
-
-
9,326
2,551
456
89
2,005
-
-
(101)
85
-
40
12,373
(5)
-
84
5
-
1,994
67
Gusbourne PLC Report and Financial Statements 2023
Notes forming part of the financial
statements continued
19
Note supporting statement
of cash flows (continued)
At 1 January 2023
Cash flows
Non cash flows
- Interest accruing in
period
- Loans and
borrowings classified
as non-current at
31 December 2022
becoming current
during 2023
- Amortisation of bank
transaction costs
Cash
£’000
269
(198)
-
-
-
Current
loans and
borrowings
£’000
(Note 17)
Non-current
loans and
borrowings
£’000
(Note 17)
Current
lease
liabilities
£’000
(Note 18)
-
1,500
12,373
2,627
Non-
current
lease
liabilities
£’000
(Note 18)
1,994
569
116
84
-
-
1,114
-
-
-
-
167
(167)
513
16,627
-
251
-
2,512
At 31 December 2023
71
1,500
Issued and fully paid
At 1 January 2022
Issued in the year
Deferred
shares of
49p each
Number
Ordinary
shares of
1p each
Number
23,639,762
60,731,705
-
42,282
At 31 December 2022
23,639,762
60,773,987
£’000
12,190
1
12,191
Issued in the year
-
71,306
1
At 31 December 2023
23,639,762
60,845,293
12,192
The Deferred shares of 49 pence each have no rights attached to them.
On 16 January 2023 the Company issued 2,174 new ordinary shares of 1p each
pursuant to an exercise of Warrants. All Warrants were exercised at 75p per
share.
On 1 September 2023 the Company issued 7,838 new ordinary shares of 1p
each pursuant to an exercise of Warrants. All Warrants were exercised at 75p
per share.
On 3 November 2023 the Company issued 61,294 new ordinary shares of 1p
each pursuant to an exercise of Warrants. All Warrants were exercised at 75p
per share.
20
Share capital
68
Gusbourne PLC Report and Financial Statements 2023
20
Share capital (continued)
Unexercised Warrants at 31 December 2023 amounted to 3,888,671 (2022:
3,959,977) Ordinary Shares of 1 pence each. The warrants have a final
exercise date of 16 December 2024 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:
22 Related party transactions
Reserve
Share premium
Merger reserve
Share Option
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 share option reserve represents the cumulative
amounts charged in respect of employee share
option arrangements where the scheme has not yet
been settled by means of an award of shares to an
individual.
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
£35,000 (December 2022 - £70,000) in relation to management services.
There was £40,000 due to Deacon Street Partners Limited as at 31 December
2023 (December 2022 - £44,000).
Jaywing PLC is considered a related party by virtue of the fact that Ian
Robinson, a director of Gusbourne PLC is also a Non-Executive Director of
Jaywing PLC. During the year Jaywing PLC charged the Company £103,000
(December 2022: £108,000) in relation to marketing services and £359,000
in relation to third party digital advertising (December 2022: £352,000).
There was £76,000 due to Jaywing PLC as at 31 December 2023 (December
2022: £36,000).
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 was repaid in
September 2023. The balance due from the director as at 31 December 2023
was £nil (December 2022 - £22,000).
69
Gusbourne PLC Report and Financial Statements 2023 Notes forming part of the financial
statements continued
22
Related party transactions
(continued)
Details of related parties who subscribed for the warrants are shown in the
table below:
Warrants exercisable at 75 pence each
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
2023
Number
Held as at
31 December
2022
Number
2,660,158
2,660,158
179,566
121,083
15,801
-
-
-
4,816
3,171
2,770
179,566
121,083
35,801
19,788
10,607
7,345
4,816
3,171
2,770
2,987,365
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.
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.
23 Share based payments
70
Gusbourne PLC Report and Financial Statements 2023 23
Share based payments
(continued)
Details of the share options granted are shown in the table below:
Scheme
Number of options at 1 January 2022
Number of options granted (20 December 2022)
Number of options at 31 December 2022
Share price at grant date
Minimum vesting price
Expense for year ended 31 December 2022
PSP
-
734,483
734,483
71.50p
CSOP
-
209,790
209,790
71.50p
150.00p
100.00p
£5,233
£1,505
Number of options at 1 January 2023
Number of options granted (24 October 2023)
734,483
-
Number of options cancelled (19 September 2023)
(475,862)
Number of options at 31 December 2023
258,621
Share price at grant date
Minimum vesting price
Expense for year ended 31 December 2023
150.00p
£42,356
209,790
120,805
(41,958)
288,637
74.50p
100.00p
£22,199
On 19 January 2024, the Group entered into an agreement with a company
associated with Lord Ashcroft (Moongate Holdings Group Limited) for the
issue of a new £20.0m long-term secured deep discount bond (“DDB”) to
support the Company’s working capital and ongoing growth.
The subscription price of the DDB was £20m. The subscription proceeds of
£20.0m were used to repay the existing PNC Facility amounting to £16.3m,
repay the short-term unsecured Loan of £1.5m, related fees and expenses of
£0.6m and the remaining proceeds will be used for working capital and to
support the ongoing growth strategy of the Company.
The DDB was issued at a discount of 7.75% per annum on quarterly rests. The
nominal amount is £26.3m which is payable on the final redemption date of
12 August 2027. The DDB is secured over land, properties and stock, with
a full fixed and floating security over the assets of both the Company and
Gusbourne Estate Limited.
24 Post balance sheet events
71
Gusbourne PLC Report and Financial Statements 2023 Company financial statements
72
Gusbourne PLC Report and Financial Statements 2023 Company balance sheet
at 31 December 2023
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
Loans and borrowings
Total liabilities
Net assets
Issued capital and reserves attributable to owners
Share capital
Share premium
Share option reserve
Retained earnings
Total equity
December
2023
£’000
December
2022
£’000
Note
3
4
4
5
6
7
8
8
8
21,600
7,447
21,600
6,040
50
4
159
116
29,101
27,915
(267)
(1,500)
(1,767)
(228)
-
(228)
27,334
27,687
12,192
21,190
71
(6,119)
27,334
12,191
21,144
7
(5,655)
27,687
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 £464,000 (2022: £416,000) 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 22 May 2024 and were signed on its
behalf by Katharine Berry.
Katharine Berry
Secretary and Director
The notes on pages 75 to 78 form part of these financial statements
73
Gusbourne PLC Report and Financial Statements 2023
Company statement of changes in equity
for the year ended 31 December 2023
1 January 2021
Comprehensive loss for the year
Contributions by and distributions to owners:
Share issue
Share issue expenses
Equity share options issued
31 December 2022
1 January 2023
Comprehensive loss for the year
Contributions by and distributions to owners:
Share issue
Share issue expenses
Equity share options issued
31 December 2023
Share
capital
£’000
Share
premium
£’000
12,191
21,105
-
-
-
-
-
46
(7)
-
12,191
21,144
12,191
21,144
-
1
-
-
-
51
(5)
-
12,192
21,190
Share
option
reserve
£’000
-
-
-
-
7
7
7
-
-
-
64
71
Total
attributable
to equity
holders
£’000
28,057
(416)
Retained
earnings
£’000
(5,239)
(416)
-
-
-
46
(7)
7
(5,655)
27,687
(5,655)
(464)
27,687
(464)
-
-
-
52
(5)
64
(6,119)
27,334
The notes on pages 75 to 78 form part of these financial statements.
74
Gusbourne PLC Report and Financial Statements 2023
Notes forming part of the company
financial statements
for the year 31 December 2023
1
Accounting policies
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.
•
the requirements of IAS 7 Statement of Cash Flows;
• 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.
•
the requirements in IAS 24 Related Party Disclosures to disclose related
party transactions entered into between two or more members of a
group, provided that any subsidiary which is a party to the transaction is
wholly owned by such a member.
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.
75
Gusbourne PLC Report and Financial Statements 2023 Notes forming part of the company
financial statements continued
2 Directors and employees
The average number of staff employed by the Company during the year
(comprising solely of Directors) was 7 (2022 - 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:
Name
Country of incorporation
Gusbourne Estate Limited
England and Wales
Gusbourne Wines Limited
England and Wales
Proportion of
ownership interest at
31 December 2023
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
2023
£’000
December
2022
£’000
-
7,447
7,447
8
42
50
16
6,024
6,040
117
42
159
7,497
6,199
Included in trade and receivables is an amount due from a director of £nil
(2022: £22,000).
4
Trade and other receivables
76
Gusbourne PLC Report and Financial Statements 2023
5
Trade and other payables
6
Loans & Borrowings
Current liabilities
Trade payables
Accruals and deferred income
Current liabilities
Trade payables
December
2023
£’000
December
2022
£’000
117
150
267
69
159
228
December
2023
£’000
December
2022
£’000
1,500
-
In November 2023 the Group entered into a short-term unsecured loan
facility of £1.5m with Moongate Holdings Group Limited. The term of the loan
was one year and the interest rate is at the annual rate of 2.50% over Bank of
England Base Rate.
7
Share Capital
Details of the share capital of the Company are included in note 20 to the
Group’s financial statements.
8 Reserves
Details of the nature and purpose of each reserve within equity are shown in
note 21 to the Group’s financial statements.
9 Ultimate controlling party
In the opinion of the Directors the ultimate controlling party at 31 December
2023 is Lord Ashcroft KCMG PC.
10 Related party transactions
11 Share based payments
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 £35,000
(December 2022 - £70,000) in relation to management services. There was
£40,000 due to Deacon Street Partners Limited as at 31 December 2023
(December 2022 - £44,000).
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 was repaid in
September 2023. The balance due from the director as at 31 December 2023
was £nil (December 2022 - £22,000).
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.
77
Gusbourne PLC Report and Financial Statements 2023 Notes forming part of the company
financial statements continued
11
Share based payments
(continued)
Details of the share options granted are shown in the table below:
Scheme
Number of options at 1 January 2022
Number of options granted (20 December 2022)
Number of options at 31 December 2022
Share price at grant date
Minimum vesting price
Expense for year ended 31 December 2022
PSP
-
734,483
734,483
71.50p
CSOP
-
209,790
209,790
71.50p
150.00p
100.00p
£5,233
£1,505
Number of options at 1 January 2023
734,483
209,790
Number of options granted (24 October 2023)
-
Number of options cancelled (19 September 2023)
(475,862)
Number of options at 31 December 2023
258,621
Share price at grant date
Minimum vesting price
Expense for year ended 31 December 2023
150.00p
£42,356
120,805
(41,958)
288,637
74.50p
100.00p
£22,199
On 4 January 2024, the Company issued 14,048 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.
On 19 January 2024, the Group entered into an agreement with a company
associated with Lord Ashcroft (Moongate Holdings Group Limited) for the
issue of a new £20.0m long-term secured deep discount bond (“DDB”) to
support the Company’s working capital and ongoing growth.
The subscription price of the DDB was £20m. The subscription proceeds of
£20.0m were used to repay the existing PNC Facility amounting to £16.3m,
repay the short-term unsecured Loan of £1.5m, related fees and expenses of
£0.6m and the remaining proceeds will be used for working capital and to
support the ongoing growth strategy of the Company.
The DDB was issued at a discount of 7.75% per annum on quarterly rests.
The nominal amount is £26.3m which is payable on the final redemption date
of 12 August 2027. The DDB is secured over land, properties and stock, with
a full fixed and floating security over the assets of both the Company and
Gusbourne Estate Limited.
12 Post balance sheet events
78
Gusbourne PLC Report and Financial Statements 2023
Company information
Country of incorporation of parent company
Auditors
Kreston Reeves LLP
2nd Floor, 168 Shoreditch High Street,
London
E1 6RA
Nominated adviser and Joint Broker
Panmure Gordon (UK) Limited
40 Gracechurch Street
London
EC3V 0BT
Solicitors
Fieldfisher LLP
17th Floor
No 1 Spinningfields,
1 Hardman Square,
Manchester M3 3EB
Bankers
Barclays Bank PLC
30 Tower View
Kings Hill
Kent
ME19 4WA
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), resigned 6
September 2023
J White (Chief Executive Officer), appointed 19 January
2024
K D Berry (Chief Financial Officer & Chief Operating
Officer), appointed 21 March 2023
S Bradbury (Chief Commercial Officer), appointed 19
January 2024
J Pollard (Chief Operating Officer), resigned 21 March
2023
Lord Arbuthnot PC (Non-Executive Director)
I G Robinson (Non-Executive Director)
M Hallas (Non-Executive Director), appointed 29
November 2023
M D Clapp (Non-Executive Director), resigned 29
November 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
79
Gusbourne PLC Report and Financial Statements 2023 NP0524-4022