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The Pebble Group plc
Annual Report 2021
Building brands.
Growing relationships.
Strengthening businesses.
Broadway House
Trafford Wharf Road
Trafford Park
Manchester M17 1DD
Stay up to date at
thepebblegroup.com
Building brands.
Growing relationships.
Strengthening businesses.
Our values shape our culture, define who we are, what we do and how we act.
We are one team
using our diverse skills
and experience to
support each other’s
successes and
challenges, respecting
our differences.
Enjoying the journey
in a culture of
integrity, transparency
and fairness, where
we are proud of our
past and excited by
our future.
Ambitious in our
commitment to
achieving positive
results with
sustainable impact.
Learning and growing
knowing there is always
progress to be made.
Connected to all
our stakeholders
developing long-term
relationships by
engaging to understand
needs and aspirations.
Our history
2012
2014
2016
2017
Management buy-out of
Brand Addition, supported
by H.I.G. Europe Capital
Partners LP and by
Beechbrook Capital LLP
Expanded operations into
Shanghai, established a
full-service office enabling
further development of
overseas capabilities
Acquisition of US-based
Gateway CDI (now Brand
Addition US), increasing
market share and providing
greater access to the largest
single regional market for
promotional products
Secondary management
buy-out supported by
Elysian Capital and
Beechbrook Capital LLP.
Formation of The Pebble
Group as parent company to
Brand Addition
Financial calendar
Financial year end
Preliminary announcement of full-year results
Publication of Annual Report and financial statements
Annual General Meeting
Preliminary announcement of half-year results
Financial year end
Company information
Nominated adviser
Grant Thornton UK LLP
30 Finsbury Square
London EC2A 1AG
Broker
Joh. Berenberg, Gossler & Co. KG, London Branch
60 Threadneedle Street
London EC2R 8HP
Auditors
PricewaterhouseCoopers LLP
1 Hardman Square
Manchester M2 3DE
Legal adviser
Addleshaw Goddard LLP
One St Peter’s Square
Manchester M2 3DE
Registrar
Equiniti
Aspect House
Spencer Road
Lancing
West Sussex BN99 6DA
Financial PR
Belvedere PR
25 Finsbury Circus
London EC2M 7EE
Registered office
The Pebble Group plc
Broadway House
Trafford Wharf Road
Trafford Park
Manchester M17 1DD
Company number: 12231361
31 December 2021
22 March 2022
22 April 2022
24 May 2022
Early September 2022
31 December 2022
The material used in this report has
been harvested in a responsible
manner from an FSC accredited mill.
Produced and printed by Perivan.
The Pebble Group plc Annual Report 2021
131
“ I am very pleased to report on the
Group’s strong performance in 2021,
which saw not only a full recovery
from the impact of the pandemic, but
an acceleration of strategic progress
and new customer wins at both
Facilisgroup, and Brand Addition.”
Richard Law
Chair
Strategic report
2 Highlights
At a glance
4
6 Our businesses
12 Chair’s report
14 Chief Executive Officer’s review
17 Our strategy in action
18 Our stakeholders
22 Section 172(1) statement
26 Sustainability - ESG
38 Key performance indicators
41 Chief Financial Officer’s review
45 Risk management
Corporate governance
50 Chair’s introduction to governance
52 Our Governance Structure
57 Corporate governance statement
64 Board of Directors
66 Senior Executives
67 Audit Committee report
71 Remuneration report
80 Directors’ report
84 Statement of Directors’ responsibilities
Financial statements
Independent Auditor’s report
85
90 Consolidated income statement
91 Consolidated statement of comprehensive income
92 Consolidated statement of financial position
93 Consolidated statement of changes in equity
94 Consolidated cash flow statement
95 Notes to the consolidated financial statements
125 Company balance sheet
126 Company statement of changes in equity
127 Notes to the Company financial statements
131 Company information
2018
2019
2020
2021
Admission to AIM
Acquisition of Facilisgroup in
North America saw the
establishment of The Pebble
Group brand and enabled it
to diversify and strengthen
its service offering
Acquisition of software
assets for Facilisgroup that
enable the provision of
further recurring revenue
services to existing and
potential Partners
Successful completion of
Round 1 beta testing for the
Commercio component of
Facilisgroup’s digital
commerce platform
Highlights
Highlights
Financial
REVENUE
ADJUSTED EBITDA1
BASIC ADJUSTED EPS2
NET CASH3
£115.1m
+39.7%
£15.4m
+57.1%
5.14p
+73.6%
£12.1m
+70.4%
m
1
.
5
1
1
£
m
4
.
2
8
£
m
4
.
5
1
£
m
8
.
9
£
p
4
1
.
5
p
6
9
.
2
m
1
.
2
1
£
m
1
.
7
£
FY 20 FY 21
FY 20 FY 21
FY 20 FY 21
FY 20 FY 21
1 Adjusted EBITDA is defined as operating profit adjusted to add back depreciation of property, plant and equipment, amortisation, share based payments charge and exceptional items
2 Basic adjusted EPS is calculated as profit after tax before amortisation of acquired intangibles, share-based payments charge, and exceptional items divided by the weighted average
number of shares in issue
3 Net cash is defined as cash and cash equivalents less borrowings (excluding lease liabilities)
Operational
• Strong recovery ahead of pre-pandemic performance levels with Group Revenue of £115.1m for the year to 31 December 2021
(“FY 21”) (FY 20: £82.4m, FY 19: £107.2m) 40% ahead of the prior year and Group EBITDA of £15.4m (FY 20: £9.8m, FY 19: £15.2m)
• At Facilisgroup, Annual Recurring Revenue (“ARR”) increased by 40% to USD16.7m (FY 20: USD11.9m) and delivered excellent
EBITDA returns of 60% (FY 20: 61%), demonstrating the business’s ability to both scale revenue and maintain strong margins
• At Brand Addition, FY 21 Revenue was 41% ahead of prior year and 5% ahead of pre-pandemic revenue at £102.4m (FY20: £72.6m)
• Balance sheet remains strong and cash was ahead of expectation at 31 December 2021, being £12.1m (FY 20: £7.1m)
• The new financial year has started well and in line with our expectations:
– At Facilisgroup, year to date at 18 March 2022, Gross Merchandise Value (“GMV”) was up 57% year on year with Partners
implemented or contracted awaiting implementation totalling 211
– At Brand Addition, year to date at 18 March 2022, the order intake has been positive and sales invoiced or received to be
invoiced was up 11% year on year. The supply chain continues to be well controlled
02
The Pebble Group plc Annual Report 2021
STRATEGIC REPORT Facilisgroup
FY 21
FY 20
FY 19
Brand Addition
FY 21
FY 20
FY 19
ARR
Other revenue
Total revenue
Adjusted EBITDA
£12.2m
£0.5m
£12.7m
£7.6m
£9.3m
£0.5m
£9.8m
£6.0m
£8.2m
£1.1m
£9.3m
Revenue
£5.1m
Adjusted EBITDA
£102.4m
£9.9m
£72.6m
£5.2m
£97.9m
£10.7m
Facilisgroup has a highly attractive business model. In FY 21,
the business’ uninterrupted revenue growth continued. In
USD (Facilisgroup home currency), ARR was USD16.7m
(£12.2m), representing 40% growth over the prior year, as
the business continued to attract new Partners (customers)
and create value for its Preferred Suppliers.
Brand Addition FY 21 revenue of £102.4m (FY 20: £72.6m)
was 41% ahead of the prior year, representing an immediate
recovery compared to pre-COVID-19 performance of FY 19,
where revenue was £97.9m. This revenue increase led to
EBITDA of £9.9m (FY 20: £5.2m) being 90% ahead of prior
year and moving significantly back towards FY 19 of £10.7m.
This ARR growth converts very strongly through to profit
with Adjusted EBITDA margins in FY 21 of 60% (FY 20: 61%).
Our FY 21 milestones were met on our internal aspiration to
be a USD50m ARR business by the end of 2024. Partners
implemented at 31 December 2021 were 200 (31 December
2020: 175) with a further six contracted and awaiting
implementation. GMV and spend with our Preferred
Suppliers was USD1.15bn (FY 20: USD1.02bn) and USD0.35bn
(FY 20: USD0.26bn) respectively.
In our Consumer Promotions division (45% FY 21 divisional
revenues), growth was achieved with our existing clients,
who, throughout the pandemic, have continued to use
promotional products as a strategic marketing tool to drive
sales across their retail outlets.
In our Corporate Programmes division (55% FY 21 divisional
revenues), growth was achieved through a full year
contribution of new contracts won in 2020, and the recovery
of sales through existing clients that were impacted in 2020.
Our goals in 2022 are to:
• grow GMV, spend with Preferred Suppliers and total
customer numbers with Syncore and Commercio in line
with our internal aspirations;
• successfully launch Commercio with both our existing
Partner base and into the wider market to materially grow
2023 ARR; and
• prepare to launch our order workflow product for
distributors with less than USD2m sales in mid 2023.
Our client retention has been high and new contracts won
in 2021 will positively impact 2022. Additional sales
opportunities also remain from those clients that have not
yet returned to pre-COVID-19 levels.
Our goals in 2022 are to:
• build upon the revenue growth of 2021 through the
continued retention of major clients and the successful
implementation of contracts won in 2021;
• attract new contracts with major international brands through
our credentials in ESG, technology and creativity; and
• move our gross margins back towards the 30% target
(FY 21: 28.6%).
The Pebble Group plc Annual Report 2021
03
STRATEGIC REPORT
At a glance
At a glance
We provide technology, services
and products to the global
promotional products industry.
Our Group provides
technology, services and
products to the global
promotional products industry
through two focused,
complementary and
differentiated businesses:
£7.6m Adjusted EBITDA
£9.9m Adjusted EBITDA
11% of Group revenue
89% of Group revenue
Facilisgroup provides technology
solutions and an digital commerce
platform to SME promotional product
distributors in the United States and
Canada, that enables them to benefit
from significant business efficiencies
and supply chain advantages.
Read more on page 8
Brand Addition is a leading provider of
promotional products and related
services that help the world’s most
recognisable global brands build culture,
awareness and meaningful connections.
It designs products and product ranges,
utilising its global network and
technology infrastructure to source and
deliver complex, sustainable, creative
promotional merchandise solutions.
Read more on page 10
Investment case
Differentiated positioning within the
$50bn global promotional products space
Facilisgroup - recurring revenue model,
technology and long-term deep-rooted
relationships with its Partners, driving
high quality scalable earnings
Brand Addition - established leading
market position, focus on sustainability
and strong relationships with a
diversified blue-chip client base
04
The Pebble Group plc Annual Report 2021
Our markets
The promotional products market is large
Suppliers
Manufacturers
and decorators
Distributors
Highly fragmented
Working
Capital
Working
Capital
Brand, End
customer
+$50bn global
market in FY19
Promotional products are used by
businesses of all sizes and sectors
and across geographies.
More than advertising brands, they
enable businesses to develop customer
relationships, create engagement,
build loyalty, and reward customers
and employees.
Strong track record of
historical financial growth
and proven resilience to
macro challenges
The Group model is well
positioned through the
economic cycle
Proven, experienced, high
calibre management team
Focus on governance, strong
risk management and a
bespoke ESG framework
The Pebble Group plc Annual Report 2021
05
Our businesses
Our Group comprises two
differentiated businesses,
focused on specific areas.
Our business model
The industry
c.$50bn promotional products market
Our Group
Providing technology products and services into the global promotional products industry
Building brands, growing relationships, strengthening businesses
Our focused
businesses
Facilisgroup
Technology and services
Brand Addition
Products and services
Target market
SME promotional product distributors
Large global brands
Services
Software as a Service (SaaS) technology
to power efficiency and growth
Ecommerce platform for online sales and processing
Supply chain consolidation for supply chain
advantage
Community events and training
Design corporate ranges and bespoke products
Source from ethical suppliers
Deliver across the globe
Revenue model
Subscriptions for technology and online stores
Fees for supply chain management resulting in
recurring annual revenues
Margin on products and services
Geographic hubs
US Canada
Europe Asia US
06
The Pebble Group plc Annual Report 2021
STRATEGIC REPORT Where we operate
The Pebble Group is
headquartered in the
UK, in a facility that also
houses the headquarters
of Brand Addition.
The Group has offices
in the UK, the Republic
of Ireland, Germany,
China, Canada and
the United States.
Our vision
Digital commerce, products
and related services to the
global promotional products
industry.
Europe
Manchester
Dublin
London
Hagen
North America
Ottawa
St. Louis
China
Guangzhou
Hong Kong
Shanghai
REVENUE BY GEOGRAPHY (%)
EBITDA BY GEOGRAPHY (%)
3%
10%
4%
7%
FY21
FY20
4%
1%
1%
FY21
FY20
35%
40%
29% 32%
57%
57%
55% 65%
Europe
North America
China
RoW
Europe
North America
China
RoW
Our vision is to be the industry leader in
digital commerce providing a combination
of integrated products that offer the full
suite of technology required for
entrepreneurial businesses to grow and
professionalise.
Our vision is to be the industry leader in
providing products and related services,
under contract, to the best-known brands in
the world that use promotional products as
a key engagement tool.
The Pebble Group plc Annual Report 2021
07
Our businesses
Our businesses
Facilisgroup provides a digital commerce platform
to mid-size promotional products businesses in
North America, which enables those businesses to
benefit from significant business efficiency through
its technology and to gain meaningful supply chain
advantage from the ability to purchase from quality
suppliers under preferred terms.
Our recurring revenues, 96% of FY 21 total revenues, are
derived from subscriptions for technology and a proportion
of the gross merchandise value flowing through the platform.
Established in 2004 and acquired by The Pebble Group plc in
December 2018, Facilisgroup provides a SaaS-based platform
to support the operations of SME promotional product
distributors based in the United States and Canada.
Facilisgroup has built a community of over 200 SME
promotional product distributors, over 80 Preferred Suppliers
in North America and in the year ended 31 December 2021
processed over $1.15bn of sales (2020: $1.02bn) in the
promotional products sector. A typical Facilisgroup Partner
generates between $2million and $20million of annual sales.
Facilisgroup attracts and retains Partners through its
proprietary Syncore software, consolidating the buying power
of its Partners and developing its community of Partners and
suppliers through learning and networking events. It
generates revenue through two main pillars: subscription
revenue from providing technology to its Partners and
income from its suppliers for coordinating the consolidation
of spend. In 2021, Facilisgroup carried out a beta launch of
Commercio, a new product that provides distributors with
the opportunity to deploy and operate online stores, a key
selling tool for Partners and many entrepreneurial businesses
in the sector. This accelerates Facilisgroup’s ability to market
in support of its vision to become the technology leader in
the promotional products industry.
Facilisgroup is headquartered in the US with offices in Canada.
Its aspiration is to be the technology leader in the North
American promotional products market, with a medium term
aspiration to become a $50m ARR business by the end of 2024.
Learn more at facilisgroup.com
Target market: SME promotional product distributors
Revenue model: Subscriptions for technology and online
stores, fees for supply chain management
Manages: Over $1.15bn sales (up from $1.02bn in 2020) in
the promotional products sector from 200 Partners (up
from 175 in 2020) in the US and Canada
Attracts and retains“Facilisgroup Partners” through a
combination of highly regarded technology, consolidation
of buying power and community learning and networking
events
PERCENTAGE OF GROUP
REVENUE (%)
PERCENTAGE OF ADJUSTED
EBITDA (%)
11%
12%
FY21
FY20
FY21
FY20
54% 43%
Facilisgroup’s business model
High visibility of recurring revenues with a growing customer base
Note: percentages for Adj. EBITDA exclude central costs
Facilisgroup
Technology and Services
Order Workflow
Ecommerce Stores
Marketing
Marketing
Support
Fund
(~20% FY20 Revenues)
(~40% FY 21 ARR)
Subscriptions for
Subscriptions for
Order Workflow
Order Workflow
(~80% FY20 Revenues)
(~60% FY 21 ARR)
Subscriptions for
Ecommerce
Online Stores
Stores
(New in FY21)
(New in 2022)
Preferred suppliers
North America
Partners
SME distributors
(Typically, $2m - $20m
revenues)
Working
Working
Capital
Capital
Working
Working
Capital
Capital
Brand, End customer
$25bn market in North
America, FY19
08
The Pebble Group plc Annual Report 2021
STRATEGIC REPORT The Pebble Group plc Annual Report 2021
09
Our businesses
Brand Addition provides promotional products
and related services that help the world’s most
recognisable brands build culture, awareness and
meaningful connections. We extend our client’s
values in thoughtful, sustainable, globally conscious
ways to create branded moments that people love.
Its largest contracts are valued in the millions of pounds, with
the products and services supplied being used for brand
building, customer engagement and employee incentives.
Working in close collaboration with its clients, Brand Addition
designs creative and sustainable products and product
ranges, hosts client-branded ecommerce platforms and
provides international sourcing and distribution solutions
throughout Europe, North America and Asia. It utilises its
global network to ethically source and deliver complex and
creative product solutions.
Headquartered in Manchester, it has locations in Europe, the
US and Asia. Revenues are categorised into two divisions:
Corporate Programmes that support clients’ general
marketing activities through B2B and B2C stakeholder
engagement and Consumer Promotions that support clients
in driving their own sales volumes across all retail channels.
Brand Addition’s business model
Win, grow, retain, repeat
Target market: Large global brands
Revenue model: Margin on products and services
Supporting clients: Globally and locally with offices in
Europe, the US and Asia
Excellent track record of attracting and retaining many of
the world’s leading brands through intelligent imagination,
ethical and bespoke sourcing, international distribution and
logistics and technology solutions
PERCENTAGE OF GROUP
REVENUE (%)
PERCENTAGE OF ADJUSTED
EBITDA (%)
FY21
FY20
FY21
FY20
88% 89%
46% 57%
Note: percentages for Adj. EBITDA exclude central costs
Suppliers
Europe, Asia, North America
Brand Addition
~$100m revenues
Creative Services
Ecommerce Platforms
Sourcing & Quality Control
International Logistics
Working
Capital
Global Account Management
Working
Capital
Supply Chain Compliance
Brand, End customer
Large corporates, under
contract, seeking >£’m pa
revenues per contract
Corporate Programmes,
brand support
(~55% FY21 revenues)
Consumer Promotions,
driving sales
(~45% FY21 revenues)
Learn more at brandaddition.com
10
The Pebble Group plc Annual Report 2021
STRATEGIC REPORT The Pebble Group plc Annual Report 2021
11
Chair’s report
I am very pleased to report on the
Group’s strong performance in 2021,
which saw not only a full recovery from
the impact of the pandemic, but an
acceleration of strategic progress and
new customer wins at both
Facilisgroup, and Brand Addition.
12
The Pebble Group plc Annual Report 2021
The performance highlights the strength of the Group’s
leading position in the promotional products industry, the
capability of its management, the quality of the technology
it continues to build and bring to market, and its
sustainability credentials.
The work of our team of talented people over the last year
has significantly increased the Group’s capability and
long-term future potential and the Group Board believes
that the prospects of The Pebble Group in the year ahead
and beyond are very good.
Strategy and Long-term Vision
The Pebble Group’s central tenet is that the global
promotional products industry (estimated value circa
USD50bn annually) is ripe for positive disruption, driven by
three principal factors:
• the requirement from users of promotional products and,
in particular, from leading global brands for confidence in
the sustainability and provenance of those products;
• the opportunity to deploy leading edge technology to
what is a mature market to make it operate more
sustainably and efficiently for large global corporations;
and
• the global market is very fragmented, the majority of
which is served by owner managed SMEs with a high
concentration in North America. As sustainability
standards rise and technology proliferates, SMEs will be
disadvantaged without a platform like Facilisgroup which
addresses both these issues.
The Pebble Group is disrupting this market through its two
complementary but non-competing business units,
Facilisgroup and Brand Addition.
Facilisgroup
Facilisgroup is a Software as a Service (SaaS) business
providing leading digital commerce technology to SME
businesses in North America, which enables them to
automate processes and workflow and will provide
ecommerce stores to their own customers, bringing
material efficiency in process to their businesses.
The growth and profitability of Facilisgroup illustrates the
efficacy of its technology with like-for-like growth in Annual
Recurring Revenue (ARR) in the Period of 40% and EBITDA
margins of 60%. Facilisgroup grew its total revenue in FY 21 to
£12.7m and the strategy of the executive team is to accelerate
this rate of growth through significant ongoing investment in
our technology, sales and marketing, and people.
STRATEGIC REPORT Team
The Group is led by a Board with a wide diversity of
experience, supported by highly engaged and motivated
teams across the business. It is this combination of
leadership that will enable us to scale the business
successfully and profitably.
To provide the opportunity for our teams to share in the
value of the Group they have helped to create, we launched
our first Group Sharesave Plan (SAYE) in September 2021,
which was taken up by 46% of eligible employees.
Summary and outlook
Facilisgroup and Brand Addition performed well in the year
under review, both financially and in building their
differentiation in the market. The strong financial
performances strengthened the Group’s balance sheet,
which, together with our ongoing cash generative
operations, gives us the ability to continue investing in, what
the Group Board believes to be, high quality strategic
opportunities, with the aim of further establishing its
leadership position in the very large but fragmented global
promotional products market.
The new financial year has started well and in line with our
expectations and the Group Board looks forward to the
year ahead and beyond with confidence.
Richard Law
Chair
22 March 2022
Brand Addition
Brand Addition, which was impacted by the pandemic in
2020, has fully recovered with its FY 21 revenue increasing
by 41% on the prior year and 5% ahead of pre-pandemic
revenue in FY 19. The business remains focused on its core
strategy to win, grow, and retain international contracts,
often valued in millions of pounds per year, with many of the
world’s leading brands. During the year under review, Brand
Addition increased its revenues through expanding its
business with existing key clients, implementing new
contracts won in FY 20, as well as winning major new
contracts in the year, which will benefit FY 22.
The business has a differentiated and, we believe, market
leading position. As a strategic level partner with long-term
contracts, it is able to meet both its own and its clients’
increasing sustainability and ESG targets, and it is able to
deploy differentiated services including technology, product
innovation, inventory control and logistics to maximise the
effectiveness of clients’ promotional products strategies.
Environmental, Social and Governance (ESG)
In October 2021, we published our first standalone ESG
report in which we set out our approach to ESG and
showcased how we are integrating ESG into the Group. Our
strong ESG credentials already set Brand Addition apart in
its markets and form an important element of its client
relationships. The 2021 report showed the four ESG
cornerstones, which underpin our bespoke ESG framework,
linked to the topics that most impact our business and are
of the greatest importance to our stakeholders. Updates
since the launch of our first report are set out in the Annual
Report 2021.
We are committed to a culture of strong corporate
governance and, where appropriate for our business, to go
beyond the required compliance level. We put our Directors’
Remuneration Report to a shareholder vote at our AGMs and
have taken initial steps to evolve our risk framework to align
with the Task Force on Climate-related Financial Disclosure
(TCFD). During the year, we reviewed succession planning and
talent pipeline development, and further enhanced the
reporting and flow of information from Facilisgroup and Brand
Addition to the Group Board. We have also worked internally,
and with external experts, to validate our risk register
approach and we are in the process of implementing the
recommendations made.
The Pebble Group plc Annual Report 2021
13
Chief Executive Officer’s review
Review of The Pebble Group businesses
Facilisgroup
ARR
Other revenue
Total revenue
Gross profit
Gross profit margin
Adjusted EBITDA
Operating profit/(loss)
FY 21
FY 20
FY 19
£12.2m
£0.5m
£12.7m
£12.7m
100%
£7.6m
£5.1m
£9.3m
£0.5m
£9.8m
£9.8m
100%
£6.0m
£4.6m
£8.2m
£1.1m
£9.3m
£9.3m
100%
£5.1m
£(9.5)m
Facilisgroup has a highly attractive business model. In FY 21,
the business’ uninterrupted revenue growth continued. In
USD (Facilisgroup home currency), ARR was USD16.7m
(£12.2m), representing 40% growth over the prior year, as the
business continued to attract new Partners (customers) and
create value for its Preferred Suppliers.
This ARR growth converts very strongly through to profit with
Adjusted EBITDA margins in FY 21 of 60% (FY 20: 61%).
Our FY 21 milestones were met on our internal aspiration to be
a USD50m ARR business by the end of 2024. Partners
implemented at 31 December 2021 were 200 (31 December
2020: 175) with a further six contracted and awaiting
implementation. Gross Merchandise Value (GMV) and spend
with our Preferred Suppliers was USD1.15bn (FY 20: USD1.02bn)
and USD0.35bn (FY 20: USD0.26bn) respectively. Growth
across these key indicators heavily influence the fee structures
within the business and result in a very robust and predictable
recurring revenue stream.
We believe the market opportunity for Facilisgroup is very
strong. In the highly fragmented market of the North
American promotional products industry, we have evolved
Facilisgroup to be a digital commerce platform, supporting
the growth and efficiency of distributors and suppliers.
Within this platform there are three components designed to
meet the full suite of technology requirements of
entrepreneurial distributors and suppliers across the
industry, as follows:
Syncore is our order workflow product on which we have
grown Facilisgroup to date. Focused on the distributors of
more than USD2m sales, more than 850,000 sales orders
were processed through this technology in FY21, smoothing
order friction and supporting the growth of both our
Partners and suppliers. At 98%, the retention rate of
Partners in the Period was very high.
We are pleased to report the Group’s full year
results for the year ended 31 December 2021
which demonstrate a strong performance and an
immediate and full recovery from the pandemic-
driven demand challenges experienced in 2020.
Group revenue increased by 40% on the prior
year to £115.1m (FY 20: £82.4m, FY 19: £107.2m)
and Adjusted EBITDA by 57% to £15.4m
(FY 20: £9.8m, FY 19: £15.2m).
14
The Pebble Group plc Annual Report 2021
STRATEGIC REPORT One of our values:
Enjoying the journey in a culture
of integrity, transparency and
fairness, where we are proud of
our past and excited by our
future.
Then, our order workflow product for the many thousands
of smaller distributors with less than USD2m sales is
currently in development. This will significantly increase our
addressable market and our expectation is to launch this
product in mid 2023.
Commercio is our ecommerce product that creates online
stores for our Partners and can either stand alone or will
integrate into our order workflow products. The market
opportunity for a sector specific ecommerce solution is
significant. We estimate that our existing Partners host circa
2,000 online stores with the wider North American market
many times more. Our Partner appetite for this service
through Facilisgroup is high. We expect to start contracting
with them from 1 June 2022 and exit the year with a growing
momentum of Partner uptake, as further enhancements are
delivered. The planned revenue model will be a monthly fee
based on the number of stores used, in effect increasing our
percentage fee per USD of GMV.
We are focused on a successful scaling of Facilisgroup and are
investing in our sales and marketing activities to support this.
Our goals in 2022 are to:
• grow GMV, spend with Preferred Suppliers and total
customer numbers with Syncore and Commercio in line
with our internal aspirations;
• successfully launch Commercio with both our existing
Partner base and into the wider market to materially grow
2023 ARR; and
• prepare to launch our order workflow product for
distributors with less than USD2m sales in mid 2023.
2022 has started well. Partners implemented, or contracted
awaiting implementation, total 211 at 18 March 2022, with
GMV and spend with Preferred Suppliers respectively being
57% and 66% ahead of same period last year. In addition, the
indication of appetite from Partners for Commercio has
been very positive.
Brand Addition
Revenue
Gross profit
Gross profit margin
Adjusted EBITDA
Operating profit
FY 21
FY 20
FY 19
£102.4m
£29.3m
28.6%
£9.9m
£7.1m
£72.6m
£21.2m
29.2%
£5.2m
£2.6m
£97.9m
£30.8m
31.5%
£10.7m
£9.1m
Brand Addition FY 21 revenue of £102.4m (FY 20: £72.6m) was
41% ahead of the prior year, representing an immediate
recovery compared to pre-COVID-19 performance of FY 19,
where revenue was £97.9m. This revenue increase led to
EBITDA of £9.9m (FY 20: £5.2m) being 90% ahead of prior
year and moving significantly back towards FY 19 of £10.7m.
Working in close collaboration with its clients, Brand
Addition designs products and product ranges, hosts
client-branded ecommerce platforms, and provides
international sourcing and distribution solutions.
We categorise our revenues into two divisions: Consumer
Promotions that supports our clients in driving their own
sales volumes; and Corporate Programmes that supports
our clients’ employee engagement and brand building
activities. Both divisions delivered strong growth during the
year.
In our Consumer Promotions division (45% FY 21 divisional
revenues), growth was achieved with our existing clients,
who, throughout the pandemic, have continued to use
promotional products as a strategic marketing tool to drive
sales across their retail outlets. Brand Addition has
increased its market share with these clients through
consistently meeting expectations regarding quality, and
creativity, alongside sourcing through a visible and
responsible supply chain that meets client ESG
expectations.
In our Corporate Programmes division (55% FY 21 divisional
revenues), growth was achieved through a full year
contribution of new contracts won in 2020, and the
recovery of sales through existing clients that were
impacted in 2020.
Our client retention has been high and new contracts won
in 2021 will positively impact 2022. Additional sales
opportunities also remain from those clients that have not
yet returned to pre-COVID-19 levels.
The impact of the global supply chain disruption, including
raw material price increases, freight capacity issues, freight
rate increases, and Brexit, affected the promotional
products industry like most others. The quality and
experience of the established teams across Brand Addition
together with our strong relationships with our suppliers and
clients ensured that the impact of these complexities on our
clients was controlled and minimised. Equally, our gross
margins were only slightly reduced to 28.6% (FY 20: 29.2%).
As we look forward, our ability to manage our supply chain
over the last two years, together with current activities,
leave us well-placed to continue to successfully navigate
these challenges, some of which, remain in 2022.
The Pebble Group plc Annual Report 2021
15
Outlook
2022 has started well and in line with our expectations.
At Facilisgroup, we expect to meet our 2022 internal
aspirations for GMV and spend with Preferred Suppliers, and
continue to target the total customer numbers using our
expanding digital commerce offering. To 18 March 2022,
GMV is 57% ahead of the prior year comparative. Partners
implemented or contracted awaiting implementation total
211, plus, the indication of appetite from Partners for
Commercio has been positive.
At Brand Addition, year to date at 18 March 2022, the order
intake has been positive and sales invoiced or received to
be invoiced was up 11% year on year. The supply chain
continues to be well-controlled by our teams.
We have a very motivated management team and remain
focused upon the delivery of our plans. We look forward to
further updating stakeholders on the progress of the Group
throughout the year.
Christopher Lee
Chief Executive Officer
22 March 2022
Chief Executive Officer’s review
Our goals in 2022 are to:
• build upon the revenue growth of 2021 through the
continued retention of major clients and the successful
implementation of contracts won in 2021;
• attract new contracts with major international brands
through our credentials in ESG, technology and creativity;
and
• move our gross margins back towards the 30% target (FY
21: 28.6%)
2022 has started well. Year to date at 18 March 2022, the
order intake has been positive and sales invoiced or
received to be invoiced was up 11% year on year. The supply
chain continues to be well-controlled by our teams.
People and Environmental, Social and Governance
Against an uncertain background, our people have
supported our businesses in achieving its results,
demonstrating great dedication and flexibility. The diversity
of our businesses, our people, and the geographies in which
we operate, brings great strength to the Group and I thank
everyone at Facilisgroup, Brand Addition, and The Pebble
Group for their support, thoughtfulness, and ability to
achieve positive outcomes over this very challenging period.
Our ESG strategy has continued to advance in 2021. We
have detailed our approach, targets, and activities within
our first stand-alone ESG report published in October 2021,
and then summarised our progress in our Annual Report
2021.
Our approach is guided by much of the published best
practice materials including the QCA Code and UN
Sustainable Development Goals as well as feedback from
our teams, clients, and investors. Then, we have identified
our priorities that balance what is most practical, and
makes the largest positive contribution, before our
dedicated ESG resource ensure we follow through on our
initiatives and embed them into our day-to-day operations.
We will continue to evolve and commit to this approach,
knowing its positive contribution to our long-term success.
16
The Pebble Group plc Annual Report 2021
STRATEGIC REPORT Our strategy in action
Becoming a
partner of choice.
One of our values:
Ambitious in our commitment
to achieving positive results with
sustainable impact.
The promotional products sector globally is estimated to be c.$50bn. We believe that the market is
evolving quickly and growing in importance in the world’s most sophisticated economies.
The market is highly fragmented. The Pebble Group is one of the
largest businesses in this industry, processing $1.3bn of sales orders
in 2021, but we, together with the other large operators, account for
less than 10% of the market, with the remainder accounted for by
small and mid-tier distributors.
The Group’s two businesses serve different parts of this market:
Facilisgroup provides technology to SME distributors in North
America and Brand Addition provides promotional products to large
global brands.
Facilisgroup’s aspiration is to be the technology leader in the North
American promotional products market with a medium term
aspiration to become a $50m ARR business by the end of 2024.
Brand Addition’s core strategy is to win, grow and retain multi-
country out-sourced contracts, often valued in millions of pounds
per year, with many of the world’s leading brands.
In 2021 we stated our intention to expand Facilisgroup’s technology
products and to reach a wider potential new client base by launching
an integrated digital commerce platform for existing Partners and an
order workflow technology platform for smaller distributors, below
US$2m, not serviced by our existing product. Together, Facilisgroup’s
three technology products will provide the spectrum of technology
that powers the efficiency and growth of entrepreneurial promotional
product distributors in North America and underpins the business’
annual recurring revenue ambitions.
Strategic objective
Progress made in the year
Priorities for 2022
Organic growth opportunities
Brand Addition: Win, Grow, Retain, Repeat
Win client contracts with major
brands
Grow with existing clients across
geographies and across brands
Retain major client contracts
The business has been successful in winning a number of significant global
contracts during the year. The majority of these client wins were implemented
in FY 21 and are expected to have a material impact to FY 22 revenues.
(For further commentary on revenue from new clients in FY 21, please refer
to the Key Performance Indicators section of this report on pages 38-40).
In our Consumer Promotions division we grew our market share within a
number of client relationships where our product was used to support
their product sales. In Corporate Programmes, where COVID-19 severely
disrupted client activities in FY 20, overall spend from existing clients grew
but some clients remain in recovery compared to FY 19.
(For further commentary on growth in revenue from existing clients in FY
21, please refer to the Key Performance Indicators section of this report
on pages 38-40).
Our Top 20 clients, historically representing between 60% and 70% of
annual revenues, remained clients at the end of FY 21.
(For further commentary on revenue by client concentration in FY 21,
please refer to the Key Performance Indicators section of this report on
pages 38-40).
Facilisgroup: Growth driven by an integrated digital commerce platform
Syncore
Order workflow, distributors
with sales of > $2m
Growth in Partner numbers is a key indicator of future performance and we
continued this acceleration with Partner numbers increasing from 175 to 200
in the year.
(For further commentary on the increase in Partner numbers in FY 21,
please refer to the Key Performance Indicators section of this report on
pages 38-40).
Continue to win significant new client
contracts.
Build upon the robust performance of our
Consumer Promotions division and seek the
return to growth from all clients in our
Corporate Programmes division.
Continue to evolve the services provided to
our existing Top 20 client relationships and
deliver long-term value to the business.
Continue to attract new Partners to
this product.
Commercio
Ecommerce platform,
all distributors
Order workflow product
Order workflow, distributors
with sales of < $2m
Investment continued into evolving technology to improve the services we offer to
our Partners and Preferred Suppliers.
We launched, in beta format, ecommerce stores under the brand
Commercio to increase new services to existing Partners and attract new
Partners to Facilisgroup.
Exit beta mode and launch to existing Partners as
a subscription service by the end of Q2 22.
Further develop this product to offer beyond
our existing Partners and into the wider
promotional products market in early 2023.
Investment started in the development of an order workflow product to
support small (<$2m GMV) distributors.
Accelerate the investment into this product,
aiming to be in a position to launch into the
market in 2023.
Selective consideration of acquisitions by the Group
The Pebble Group
Deploy capital on selective acquisitions
that accelerate the ability of the Group
to create long-term value through
additional technology products or the
ability to expand into additional sectors
or geographies.
The business did not proactively pursue any acquisition opportunities in
FY 21, focusing on significant organic growth plans.
Continue to create excellent value for
shareholders. Acquisition opportunities may
continue to help support organic growth in
the long-term development of the Group.
The Pebble Group plc Annual Report 2021
17
Our stakeholders
Our stakeholders
Listening to
our stakeholders.
Stakeholder engagement
Investing in, and developing, our stakeholder
relationships are central to our Group values.
We believe building, and maintaining, effective
stakeholder engagement makes people want to
work with, purchase from, sell to, and invest in us.
One of our values:
Connected to all our
stakeholders developing
long-term relationships by
engaging to understand needs
and aspirations.
This approach is cascaded down through our businesses in
pursuit of the success of the Group. Our stakeholders are key
to our decision-making and are considered by the Board of
Directors of the Group (the “Group Board”) and also by our
senior team as part of the decision-making process.
Our Key Stakeholders
The Company has identified the four key stakeholder groups set out below, the issues that are most relevant to each of them
and details how it has, and continues to, engage with each of them.
How we engage
Key topics of engagement
Impact of engagement
Our Teams
Why we engage
The sustainable success of
our business depends upon
our engagement with our
teams.
We engage to promote the
Group’s corporate culture
and cascade our ethical
values, behaviours and
expectations.
We aim to create a positive
and inclusive culture,
sensitive to the issues that
affect our people, so they
can thrive and grow.
We engage to ensure that
we continue to develop and
invest in our highly talented
and dedicated people in the
right way.
The promotional products sector globally is estimated to be
between $40m and $50m. We believe that the market is evolving
quickly and is growing in importance in the world’s most
sophisticated economies.
market with the remainder accounted for by small and
mid-tier operators. These small and mid-tier-market
operators are often unable to maximise their potential
because they cannot independently leverage the best
technology or buying power available in the industry.
Facilisgroup supports these businesses in North America by
providing a spectrum of technology that powers the
efficiency and growth of these entrepreneurial businesses.
• Encourage feedback,
including via team surveys,
employee forums and
one-to-one discussions
• Use of structured personal
development plans and
formal assessment tools
• Enhancing training
opportunities via Learning
Management Software
(LMS)
• Management development
programme
• Regular business
performance and strategy
updates directly from our
CEO, CFO and senior team
• Access to anonymous
whistleblowing service
• Operation of the Long
Term Incentive Plan (LTIP)
and Group Sharesave Plan
(SAYE)
One of our values:
We are one team using our
diverse skills and experience to
support each other’s successes
and challenges, respecting our
differences.
18
The Pebble Group plc Annual Report 2021
• Company vision: one,
three, and five-year
strategic plans including
opportunities for
departmental growth and
advancement
• Pandemic impact: how the
Company has responded,
what this means for our
teams, and changes to our
way of working
• Return to office strategy:
need for a flexible working
environment with support
for team health and
well-being
• Opportunities for growth
and development and
support in reaching full
personal potential
• Embracing diversity, equity
and inclusion (DEI)
• Environmental impact of
our organisation: our work
on ESG and commitments
to sustainability
• Social impact of our
organisation and
community initiatives
• Teams are informed and
therefore engaged
• Increased and improved
flexibility in working
patterns
• Improved transparency of
individual styles at all levels
across Facilisgroup and
better informed decision-
making on team structure
and recruitment
• Formal adoption of Group
DEI policy (See ESG
pages 26-37)
• Improved focus on talent
pipeline and development
of succession planning
aligned with DEI (See
Nomination Committee
activity on pages 54-55)
• Promotion of leaders from
within our businesses,
alongside new talent
sourced externally
• Implementation of ESG
initiatives and successful
social and community
engagement (See ESG
pages 26-37)
• Incentivisation of teams is
aligned with the Group’s
long-term performance
and shareholder value
STRATEGIC REPORT
Clients and Partners
Why we engage
How we engage
Key topics of engagement
Impact of engagement
• Pandemic impact: our
response and client
support
• Ongoing development and
improvement of our
technology, services and
client support
• Collaboration on growth
strategies
• Training to enhance the
benefits of using our
technology with a focus on
ensuring engagement
• ESG and sustainability: how
we can support and deliver
on clients’ and Partners’
ESG commitments, whilst
also achieving our own
• Client retention: Clients
and Partners have shown
they value long-term
relationships. Through the
pandemic, Brand Addition
secured new business and
retained contracts with all
key clients and Facilisgroup
Partner retention rates
were near 100%
• Facilisgroup’s community
supports Partner
collaboration and growth
• Brand Addition continues
to place sustainability at
the centre of its five-year
strategic development plan
‘ba.ONE sustainability and
growth’
• Recruitment of a
‘sustainability manager’
in Brand Addition
Effective engagement is key
to attracting, and retaining,
a quality client and Partner
base from which we can
nurture strong and long-
term relationships.
Our clients’ and Partners’
success is driven by the
quality of our products and
services. We ensure
continued investment in the
right technology, services
and teams to enhance our
relationships and create
long-term value on both
sides.
• Via regular one-to-one
feedback discussions
across multiple client
touch points
• In person and virtual
meetings/events to update
on business objectives and
provide opportunities for
shared learning
• Dedicated ‘Partner
Success Managers’ in
Facilisgroup whose key
role is to maintain regular
ongoing contact with
Partners
• Hosting regular in person
small group events
(7-10 Partners) at
Facilisgroup HQ
• Facilisgroup weekly
newsletter called ‘411’
• Monthly virtual education
sessions on key topics for
Facilisgroup Partners
• Quarterly Business
Reviews with key Brand
Addition clients
• Client questionnaires at
Brand Addition, including
Net Promoter Scores
which allow us to measure
client satisfaction
The Pebble Group plc Annual Report 2021
19
Our stakeholders
Strategic suppliers
Why we engage
The quality of our products
and services is heavily
influenced by the careful
management of our
relationships with our
strategic suppliers.
Facilisgroup’s suppliers are
trusted partners delivering
to a shared customer base.
Supplier engagement is a
key part of the Facilisgroup
business model. Developing
the community between
Preferred Suppliers and
Partners creates additional
opportunities for all.
Ensuring we retain, and
develop, our diverse and
robust supply base is more
important than ever to
manage global supply chain
challenges. Brand Addition’s
collaboration with key
suppliers in Asia, Europe,
and North America develops
and ensures robust
long-term trusted
partnerships with suppliers
that conform to clients’
and Group’s expectations
on ethical values, ESG, and
sustainability standards.
How we engage
Key topics of engagement
Impact of engagement
• Through use of formal
• Supply chain impact and
written contracts,
negotiated transparently
and openly to set clear
expectations
• Via regular face-to-face
and virtual meetings to
discuss performance and
provide feedback
• Ongoing two-way
evaluation processes to
facilitate business
improvement and address
ultimate client demands
• Supplier networking events
providing efficient, easy
access to growth and
development
opportunities
• Formal audit processes
providing feedback and
opportunities for
development
risk mitigation from
product sourcing to
logistics and delivery. This
relates to both direct and
indirect production,
Brexit, shipping and their
impact on lead times and
costs
• Changing industry trends
and future relationships
• Efficiency strategies,
growth opportunities
• Supporting the Group’s
ESG and sustainability
commitments and goals,
specifically: environmental
impact of product being
supplied, packaging, supply
chain
• How the Group can assist,
influence, and develop its
suppliers’ own ESG and
sustainability plans
• Suppliers value mutually
supportive relationships
and in both Facilisgroup
and Brand Addition, spend
with Preferred Suppliers
grew in FY 21 vs FY 20
• Long term relationships
with our suppliers enabled
us to continue to secure
products while supply
chains were challenged
• Successful navigation of
supply chain pressures
allowed Brand Addition to
deliver to agreed
schedules for its clients at
volumes ahead of FY 19
20
The Pebble Group plc Annual Report 2021
STRATEGIC REPORT
Shareholders and the wider investment community
How we engage
Why we engage
Key topics of engagement
• Supply chain and logistics
disruption and Company
capabilities to manage and
mitigate risk
• Business recovery post
pandemic
• Changes to our industry as
a result of the pandemic
• Group approach to ESG
and corporate governance
(see ESG pages 26-37)
• Group approach to
diversity, equity and
inclusion (see Nomination
Committee activity on
pages 54-55)
We seek shareholders who
are aligned with our
long-term objectives for the
Group. Access to long-term
capital supports our
strategy. We therefore strive
to develop our investors’
understanding of our
business model, strategic
objectives and culture.
Through open and
transparent engagement
with the investor
community, we aim to
ensure the Group’s
operations and financial
performance are clear and
understood, and to provide
the necessary information
to ensure investors can
make informed judgements
about the Group.
Investors and analysts
require our engagement on
ESG to guide their
investment stewardship
activities.
• Publication of Annual
Report and Accounts and
Annual ESG report
• Regular and detailed
trading updates to the
market
• Open access investor
presentation by CEO and
CFO including live Q&A via
a live webcast. (FY 20 and
HY 21 webcasts available
on the Company’s website)
• Participation in formal
Broker-hosted events
including live Q&A to
extend reach our senior
executives
• Availability of CEO and CFO
to answer questions
around trading updates
throughout the year
• One-to-one investor
meetings or calls with the
CEO/CFO at the full year
and interim results
• Detailed ‘Investor’ section
on the Company’s website
• Annual General Meetings
and availability of Chair of
the Group Board and Chair
of each Board Committee
to answer questions
• Ad-hoc meetings or
written responses as
requested by existing and
potential shareholders and
analysts
Impact of engagement
• Improved investor
knowledge and
understanding of the
Group, its operations and
activities, with extended
reach to senior executives
• Investor relations activity
and feedback discussed
regularly at Board
meetings and factored into
decision-making by the
Group Board
• Improved transparency of
Group information with
open access Investor
Relations content available
on the Company’s website
• Group Senior ESG Officer
increased active support
to the Group Board and
Operating Boards to
ensure the highest
standards and delivery on
ESG commitments
• Formal adoption of Group
DEI policy (See ESG
pages 26-37) linked to
succession planning
• Steps taken to ensure early
alignment to TCFD
reporting requirements
The Pebble Group plc Annual Report 2021
21
Section 172(1) statement
We strive to maintain our
reputation for high standards of
business conduct. At The
Pebble Group our emphasis is
on making decisions with
regard to acting equitably and
for the long-term.
One of our values:
Connected to all our
stakeholders developing
long-term relationships by
engaging to understand needs
and aspirations.
This section describes how the
Directors had regard to the matters in
Section 172(1) (a) to (f) of the
Companies Act 2006 in Board
discussions and actions, behaviours
and decision-making, when performing
their duty to promote the success of
the Company for the benefit of
shareholders as a whole during 2021.
The Group Board and senior team
know that considering all our
stakeholder relationships, having
proper regard to our stakeholders’
interests and being aware of the
external impact of our activities on the
communities and environments in
which we operate, will ultimately drive
value to our shareholders and secure
our long-term success.
Our Group Board reporting template
includes Section 172(1) guidance and
prompts to ensure each paper explains
which stakeholders are relevant to a
decision, what long-term factors must
be considered in all decision-making,
and that appropriate time is allotted
for open and in-depth discussion.
The table below depicts three
examples of key decisions made during
2021 which focussed on issues that are
important to the Company’s long-term
success. It describes each stakeholder
group that was relevant to the decision
and how they, and other matters set
out in Section 172(1), were considered:
22
The Pebble Group plc Annual Report 2021
STRATEGIC REPORT Significant investment in
Facilisgroup technology products.
How Directors had regard to
stakeholders’ interests and
engagement output
How Directors had regard to
other Section 172(1) matters
The results of engagement with our
clients and Partners outlined on
page 19 informed the Group Board
that development of an integrated
digital commerce platform to support
online sales was key for their business
efficiency and evolution. The Group
Board therefore understood the
implications for client retention.
Feedback from prospective clients
informed the Group Board that our
ability to offer this integrated solution
was key to their decision-making.
The Group Board used this information
to conclude that accelerating
investment in this platform was critical
to both Partner retention and
acquisition.
The Group Board’s communication
with investors on plans to scale
Facilisgroup as a key strategic initiative
meant that the decision to accelerate
investment in this platform was critical
to meeting shareholder expectations
in the medium-term.
Culture
The Group Board considered the
positive impact on the Company’s
culture of reinforcing the importance
of creativity, innovation, continuous
progression, optimisation and business
transformation through the
introduction of and investment in new
technology products.
Reputation
The Group Board had regard to how
remaining at the forefront of the
transformation and growth of the
promotional products industry with
leading technology products was
important to maintaining the
Company’s reputation.
Long-term impact
The decision was concluded to be of
long-term benefit and likely to
promote the success of the Company
for the benefit of its shareholders as a
whole.
The Group Board carefully
considered the impact of the
decision to increase levels of
capital expenditure to
accelerate the investment
into Facilisgroup’s digital
commerce products.
Key stakeholder groups
Our clients and Partners
Investment in the continued
development of existing technology
and introduction of new technology
products is a key strategic objective.
This investment will ensure the
technology utilised by our Partners and
clients continues to evolve, supporting
retention and attracting new clients and
Partners to the Group. The introduction
of new products will enable us to reach
new clients and Partners, supporting
the delivery of our ambition for
Facilisgroup to be a $50m ARR business
by the end of 2024.
Shareholders and the wider
investment community
Our medium-term ambition for
Facilisgroup was shared with investors
in March 2021 as part of our FY 20
results presentation. Driving scale in
Facilisgroup to deliver $50m ARR by
the end of 2024 will deliver significant
value to our shareholders.
The Pebble Group plc Annual Report 2021
23
Section 172(1) statement
Launch of Group
Sharesave Plan (SAYE).
The Group Board strongly
supported the launch of our
SAYE to all eligible employees
after previous postponement
due to COVID-19 disruption.
Key stakeholder groups
Our teams
Directly impacted by opportunity of
share ownership in the Group.
Our shareholders and the wider
investment community
There is significant interest in the
extent of employee engagement and
retention across our businesses; and
the alignment of our employees with
the creation of long-term shareholder
value.
How Directors had regard to
stakeholders’ interests and
engagement output
How Directors had regard to
other Section 172(1) matters
The results of engagement with our
teams outlined on page 18 informed
the Group Board that the introduction
of the SAYE was considered an
opportunity for employees and would
be received positively. As a result, the
Group Board decided to maximise
employee participation by (i)
implementing a sub-scheme for US and
Canada employees on as similar terms
as possible; and (ii) ensuring maximum
flexibility in option terms for example
no minimum length of service
condition for participation.
The shareholder advisory vote in
favour of our Remuneration
Committee Report (which noted our
expectation to implement the SAYE) in
the 2021 Annual General Meeting
(AGM), and investor meetings
discussions informed the Group Board
that our shareholders and the wider
investment community supported
plans that encourage long-term
employee engagement and align the
objectives of the workforce with those
of investors.
Culture
Providing an opportunity for
employees to participate in long-term
value creation in the form of the SAYE
was considered by the Group Board to
be a positive team engagement and
motivation tool which would align
personal and team objectives with the
Company’s long-term goals, and
positively impact the Group’s culture.
Reputation
The Group Board considered that
attracting and retaining a high
performing team whose long-term
objectives were aligned with the
Company’s overall goal of creating
long-term shareholder value had a
positive impact on reputation.
Long-term impact
The Group Board discussed how this
was a key decision due to the potential
positive impact on the long-term
success of the Company.
24
The Pebble Group plc Annual Report 2021
STRATEGIC REPORT Publication of
ESG report.
The Group Board agreed to
publish a separate annual
ESG report to communicate its
ESG commitment and vision in
a clear and transparent manner.
In September 2021, the Group
Board approved a formal Group
ESG Policy and its first ESG
report for publication, which
is available on the Company’s
website.
Key stakeholder groups
Our teams
It is important that our employees
know they work for a business that
embraces positive and progressive
governance and is taking proactive
steps to address the impacts of
climate change and to consider DEI.
We expect the ESG demands from our
employees to increase as we
encourage active participation from a
diverse and increasingly engaged
workforce.
Our clients and Partners
Our clients and Partners, and their own
customers, increasingly demand
responsible, sustainable and ethical
products and solutions. Again, we
expect this trend to continue to grow.
Our ESG strategy is a key differentiator
for our Group’s businesses and will
help us win, grow and retain clients
and Partners. It is crucial that it is
effectively represented by, and
communicated to, our client base.
Our strategic suppliers
The impact of transition to a low
carbon economy and the continued
focus on ESG means we must ensure
our existing and future suppliers
understand our ESG strategy. It is
important that our suppliers aim to
align with our ESG goals and
commitments, that they prioritise and
develop sustainable practices within
their business and throughout their
supply chain.
Our shareholders and the wider
investment community
There is significant increased focus on
ESG in the investment community,
driven largely by demand for sustainable
options for investments to align with
individuals’ ESG principles. Investors
and analysts consistently and actively
engage and score companies on
corporate governance to guide their
own stewardship activities. There is an
intensified focus on reporting on
sustainability, driven by social equality
and climate risk with a need for detailed
information on policies around climate
risk and decarbonisation plans, ESG
metrics and DEI.
How Directors had regard to
stakeholders’ interests and
engagement output
The results of engagement with all of
our key stakeholder groups outlined on
pages 18-21 informed the Group Board
that this was an important step worthy
of investment of time and resource,
including at Board level, to ensure and
demonstrate the commitment and
engagement of the Group.
The Directors communicated the launch
of the ESG report via the London Stock
Exchange’s Reach service.
How Directors had regard to
other Section 172(1) matters
Environment and Community
The Group Board considered that a
separate ESG report would clarify, and
increase, the Group’s internal focus on
its ESG agenda and drive its strategy
with direct involvement of senior
executives. This was considered likely
to have a positive impact on the
environment and our communities
which was the fundamental underlying
aim of our ESG agenda.
Reputation
This tangible illustration of how the
Company is building and looking to
maintain a reputation for high
standards of business conduct was
considered to be a positive and
accurate reflection of the Company’s
culture. This would positively impact
the Company’s reputation as an
employer, with all other stakeholders
and in our wider business community.
Long-term impact
The decision was concluded to be of
long-term benefit and likely to promote
the success of the Company for the
benefit of its shareholders as a whole.
The Pebble Group plc Annual Report 2021
25
Sustainability
Environmental, Social
and Governance (ESG).
ESG is fundamental to The Pebble Group. Our operations aim to
build on a foundation of integrity, transparency and fairness.
One of our values:
Ambitious in our
commitment to achieving
positive results with
sustainable impact.
The Group employs a Senior ESG Officer who reports to the CEO
and is responsible for the implementation of the Group ESG
strategy set and approved by the Group Board. Progress is
assessed every six months at the Board’s strategy review meeting.
Across the Group we aim to act responsibly through effective
governance, managing our social and environmental impacts
and risks throughout our operations and across our supply
chains. We strive to use our influence to drive positive change
by adopting sustainable materials and working with suppliers
to ensure our responsibility extends across our supply chain.
To report against our strategy, we have developed our own
bespoke ESG framework based upon four cornerstones that
were identified as being important and relevant to our
business and stakeholders. The framework defines the areas
of priority and allows us to meaningfully report against the
Group’s ESG performance.
Our ESG Roadmap
Action
1. Define ESG for The Pebble Group
• Four ESG cornerstones developed.
2. Create a reporting framework based on a materiality
assessment
• A framework based around 13 material issues, subdivided into
a further 74 topics and aligned to relevant UN Sustainable
Development Goals.
3.
Identify initiatives to facilitate the achievement of
targets over the next five years
• Initiatives to reduce energy consumption, carbon emissions,
waste and plastic usage and to enhance social responsibility
and ethical business practices identified.
4. Produce first ESG report
• Report launched in October 2021.
5. Report regularly on ESG achievements against
framework and initiatives using RNS Reach or our
website
6. Develop a framework to facilitate the collection and
reporting of environmental performance data across
the Group
7. Regular assessment of framework, initiatives and
targets based on stakeholder feedback and changes in
the macro environment
Status
Defining and sharing
our approach
The journey ahead
During 2021 we realigned and evolved our framework to reflect the areas identified from our Group-wide materiality
analysis, linking each of these to the most relevant United Nations Sustainable Development Goals (UNSDGs).
26
The Pebble Group plc Annual Report 2021
STRATEGIC REPORT Our four ESG cornerstones.
Impact of our
business on the
environment and our
communities
Environmental Social Governance
Our aim is to make a positive
long-term difference to our
people and the communities
in which we work,
while minimising our impact
on the environment.
Diversity, health,
well‑being and
engagement
Environmental Social Governance
Our aim is to expand,
celebrate and embrace
individuality and diversity,
providing a safe environment
where we promote well-
being and a healthy work-
life balance.
Board independence,
ethics and leadership
Social Governance
Environmental
Responsible
business practices
Environmental Social Governance
Our aim is to promote a
culture based upon values
and behaviours which
stakeholders are
comfortable to associate
themselves with, developing
long-term relationships
between the Group and its
stakeholders.
Our aim is to protect the
interests of our
stakeholders by adhering to
responsible business
practices and embedding
robust processes,
procedures and safeguards
which are effectively
managed in our
organisation, reducing or
mitigating risks that the
business faces.
ESG is incorporated into our Group’s governance framework to ensure that it is always at the centre of what we do. For
further detail, please see the ‘ESG governance’ section on page 52 of this report.
The Pebble Group plc Annual Report 2021
27
Sustainability
Materiality assessment.
▲ Impact of our business on the environment and our communities
▲ Board independence, ethics and leadership
▲ Diversity, health, well-being and engagement
▲ Responsible business practices
▲ Human rights
s
r
e
d
l
o
h
e
k
a
t
s
o
t
e
c
n
a
t
r
o
p
m
I
High
▲
Packaging and waste
▲
Energy and
climate change
Product integrity
and transparency
▲
▲
Responsible
sourcing
▲
Business ethics
and integrity
▲
Economic
performance
Data security
and privacy
▲
▲
Governance, accountability
and business culture
▲
Diversity, equity
and inclusion
▲Employee health, safety and well-being
▲
Employee recruitment,
retention and development
Very high
▲ Risk management
Impact on The Pebble Group’s success (over next five years)
In May 2021 we conducted our first materiality assessment to
identify the topics that were relevant and important to our
stakeholders and which had the largest potential to impact
the business over the next five years. The assessment was
internal, drawing from our teams at different levels of the
business, and incorporating feedback from past and current
dialogue with key stakeholders (our teams, clients and
Partners, strategic suppliers, shareholders and the wider
investment community).
The process consisted of a brainstorming session within the
Group’s senior executives to identify all of the economic,
social and environmental topics that were relevant and
important to our business and our stakeholders. The
assessment identified 74 relevant ESG related topics which
were grouped into 13 different categories and aligned to one
or more of our four ESG cornerstones. A scoring matrix was
then developed and a cross functional management team
scored each of the categories to rank them in terms of
importance and impact.
28
The Pebble Group plc Annual Report 2021
STRATEGIC REPORT
Alignment with the UN
Sustainable Development Goals.
Impact of our business on the environment and our communities
1.1
1.2
1.3
Energy and climate change
Packaging and waste
Responsible sourcing
Diversity, health, well-being and engagement
2.1
Diversity, equity and inclusion
2.2
2.3
Employee health, safety and
well-being
Employee recruitment,
retention and development
Board independence, ethics and leadership
3.1
Governance, accountability and
business culture
3.2
Economic performance
Responsible business practices
4.1
Business ethics and integrity
4.2
Human rights
4.3
Product integrity and
transparency
4.4
Data security and privacy
4.5
Risk management
The materiality assessment allowed us to identify and align
each of our key material issue categories with the most
appropriate UN sustainable development goal, demonstrating
how we aim to contribute to the fight against inequality and
climate change, addressing some of the world’s most pressing
social and environmental issues.
The Pebble Group plc Annual Report 2021
29
Sustainability
Our commitments to each of the relevant UN SDGs
Goal
Details
Our commitment
Good Health and Well-
being.
Ensure healthy lives and
promote well-being for all at
all ages.
Gender Equality.
Achieve gender equality and
empower all women and girls.
Decent Work and
Economic Growth.
Promote inclusive and
sustainable economic growth,
employment and decent work
for all.
Reduced Inequalities.
Reduce inequality within and
among countries.
Responsible Consumption
and Production.
Ensure sustainable
consumption and production
patterns.
Climate Action.
Take urgent action to combat
climate change and its
impacts.
Life Below Water.
Conserve and sustainably use
the oceans, sea and marine
resources for sustainable
development.
Life on Land.
Sustainably manage forests,
combat desertification, halt
and reverse land degradation,
halt biodiversity loss.
Peace, Justice and Strong
Institutions.
Promote just, peaceful and
inclusive societies.
To promote a positive work–life balance and support the health
and well-being of all employees.
To actively work to ensure that we have an inclusive culture across
the Group providing equal opportunities regardless of gender.
To ensure all our employees feel safe, valued and engaged, and are
paid at least a living wage. Ensure the same responsible business
practices are upheld across our supply chains.
To ensure all employees feel respected and are treated fairly and
equally regardless of ethnicity, religious beliefs, gender, age,
disability, sexual orientation, education and socio-economic
background. We will also work to uphold these values throughout
our supply chains, operating a zero tolerance approach to any form
of intimidation, bullying, harassment, discrimination or victimisation.
Aim to ensure all the products we source, or the vendors we
employ to source, prioritise the use of sustainable materials and
processes.
To reduce our impact on the environment through carbon
reduction initiatives and the employment of sustainable materials
and optimised logistics.
To reduce and minimise plastic and marine pollution by aiming to
remove single use plastic packaging from our bespoke
manufactured products.
To develop and promote products that have a reduced impact on
the environment by identifying the origin of raw materials and
giving priority to organic, recycled, recyclable or biodegradable
options.
To have in place robust policies and procedures to ensure
responsible business practices and respect for fundamental human
rights.
30
The Pebble Group plc Annual Report 2021
STRATEGIC REPORT Publication of our
first ESG report.
In October 2021 we published our first standalone ESG report providing
a detailed look at our ESG framework articulating our activity to date
and our aspirations and targets over the next five years, with some goals
extending to 2030. We intend to continue to produce a standalone ESG
Report annually to demonstrate our progress in this area. Our ESG
Report is available in the ‘About Us’ section of the Company’s website.
Diversity, equity and inclusion (DEI)
DEI is an important part of our long-term focus on shareholder value. We recognise how important our people are to our
long-term success and our aim is to expand, celebrate and embrace individuality and diversity across our team. We know that
building a diverse and inclusive culture which promotes our diverse backgrounds, skill sets and experiences will lead to a
better business, a better place to work and, ultimately, will make the Group more valuable and effective overall. More
information on how we are measuring and enhancing DEI throughout our Group can be found in the Group’s ESG report, and
the report from the Nomination Committee on page 54 of the governance report.
Task Force on Climate Related Disclosure (TCFD)
Across our Group we recognise the need to improve transparency around the climate-related risks that our organisation faces
to help stakeholders and investors make informed decisions about our business. We have embraced the TCFD reporting
framework and see this as an important tool in helping us understand the climate related risks and opportunities that we face
and how we ensure these are fully integrated into our overall business strategy. In October 2021 we conducted a readiness
review, evaluating our current practices against the 11 TCFD recommendations to ensure that any gaps were understood and
actions are taken to allow all of the recommendations to be implemented in FY 22.
In November 2021 we conducted our first climate related risks and opportunities assessment utilising our current risk
assessment framework to determine our resilience, considering different climate related scenarios. The results of the
assessment are currently being reviewed but initial findings did not identify any of the risks to have a high likelihood of
impacting the financial performance of the business over the different climate related scenarios. Future assessments will be
fully integrated into our risk assessment process (see page 49) and mitigating actions implemented for any risks identified even
if not considered to have a material impact on the financial performance of the Group.
Roadmap for The Pebble Group’s introduction of TCFD reporting
Area
2021 Progress
2022 Priority
Governance
Development of a TCFD governance
framework and reporting structure.
Review, refine and implement TCFD
governance structure.
Strategy
Development of climate related
scenarios and identification of climate
related risks over the short, medium
and long-term.
Ensure that any newly identified risks
are considered against the Group’s
strategy and integrated into the ESG
framework.
Risk management
Conducted a climate related risks and
opportunities assessment, considering
the identified climate related scenarios.
To fully integrate the climate related
risks and opportunities assessment
into the risk management framework.
Metrics and targets
Initiatives and targets identified as part
of the ESG framework and detailed in
our ESG report.
Review and refine to ensure that any
identified climate related risks are
included in updated initiatives, metrics
and targets.
The Pebble Group plc Annual Report 2021
31
Sustainability
Our ESG progress in 2021
Our ESG progress in 2021.
Priority areas where good progress has been made:
Implementation of an energy
reporting framework which
allows data to be collected
across the Group on its full
Scope 1 and 2 emissions
with a Scope 3 assessment
planned in FY 22
Conducted our first gender
pay review, which identified
gaps and provided a
benchmark for future annual
reviews. Details of the
review can be found in the
ESG report
The Facilis Cares initiative
supported two community
projects
Implementation of carbon
neutral distribution options
for the delivery of goods to
European clients
Continued developing
products made from
sustainable materials and
giving back through
community support projects
Approval of Group ESG
policy
Formalised our Group DEI
policy, building DEI principles
into our Group Board
appointment and succession
planning processes. For
further information please
see the Nomination
Committee update at
page 54 of this report
Conducted DEI training
through a third party to
raise awareness and
promote an inclusive
environment for all team
members
Full details of all of our 2021 projects and our progress can be found in our ESG report,
which is available in the ‘About Us’ section of the Company’s website.
32
The Pebble Group plc Annual Report 2021
STRATEGIC REPORT Priority
Our aim
UN Sustainable Development Goals
Reducing our
environmental impact
To reduce our impact on the
environment through carbon reduction
initiatives and the use of sustainable
materials, alongside optimised
logistics.
Our direct impact on the environment is relatively low, but
we take responsibility for monitoring and reducing energy use
and emissions. Indirectly we are responsible for a larger
amount of greenhouse gas emissions as a result of the goods
and services provided, predominantly through our Brand
Addition business.
To address our direct impact, we have set some ambitious
internal targets of a 50% reduction in our Scope 1 and 2 emissions
by 2030. Our efforts in 2021 focused on expanding our reporting
framework to cover all the Group’s global sites, enabling us
to establish a base year calculation for the Group and more
accurately measure our Scope 1 and 2 carbon emissions.
To meet our reduction targets, we aim to procure all our
electricity from renewable sources where we are in direct
control of where our energy supply originates. In 2021 we
switched two of our sites to renewable electricity. We will
continue making other site-specific changes, investing in LED
lighting, replacing old equipment with more energy efficient
alternatives, and utilising carbon neutral distribution options.
We will also invest in carbon compensation schemes, as
appropriate, to ensure that we achieve our reduction targets.
To address our indirect impact, and as part of our roadmap,
we have committed to undertake a full Scope 3 evaluation in
2022, which we feel is an important step in understanding
our indirect environmental impact. The findings from the
evaluation will be reviewed and integrated into our Green
House Gas (GHG) reporting, with additional targets being
developed to monitor progress.
In 2021, our UK energy usage was similar to 2020, with a small
reduction of 2% in our overall carbon emissions. Our full UK
SECR disclosure can be found on page 83 of this report.
Our climate change journey and future plans
• ISO14001 Certification
(Brand Addition
Manchester)
• First Ecovadis
assessment completed
• ISO50001 certification
(Brand Addition EU)
• Brand Addition EU Base
year defined
• 1% YOY energy
reduction target
• Energy data reporting
framework established
• 20% of sites switched
to renewable electricity.
• Scope 3 emissions
evaluation.
• Expand the number of
sites souring renewable
energy
• Aim to launch carbon
compensation scheme
2004 - 2010
2016 - 2019
2021
2022
2012 - 2013
2020
2021
The Future
• Energy monitoring and
target setting (Brand
Addition EU)
• First CDP Disclosure
• 27% reduction in energy
usage compared to EU
base year
• Defined Group
emissions reduction
target of 50% reduction
of Scope 1 and Scope 2
emissions by 2030.
• Annual energy and
carbon reporting
disclosures
• Expand the use of
carbon neutral
distribution options
The Pebble Group plc Annual Report 2021
33
Sustainability
Priority
Our aim
UN Sustainable Development Goals
Responsible sourcing
and business practices
Strive to ensure that the products we
source or the vendors we use prioritise
the use of sustainable materials and
have in place responsible business
practices, respecting fundamental
human rights.
Ocean Bottle
In 2021 Brand Addition worked with
‘Ocean Bottle’. A company wholly
focused on ocean plastic collection.
Every Ocean Bottle sold actively funds
the collection of 11.4kg of plastic,
equivalent to 1,000 plastic bottles
through supporting collectors in coastal
communities who are able to exchange
the plastic for things they need.
Brand Addition introduced ‘Ocean
Bottle’ into a number of its client stock
ranges, helping to fund the collection of
over 8.3 million plastic bottles, or
94,620 kg of ocean bound plastic.
Projects using sustainable
materials, supporting local workers
Understanding where the materials used
in products come from is an important
part of the buying process. When
sourcing goods our teams are always
looking to partner with suppliers who can
provide transparency, and are aligned
with our responsible sourcing strategy.
In 2021, Brand Addition collaborated
with a client on a project to source
48,000 t-shirts. By having a sustainable
supply chain in place, the team was able
to ensure that the product was
manufactured using fair trade certified
organic cotton, thereby supporting the
circular economy and directly improving
the livelihoods of 45 farming families
in India.
Across our Group we work with a large
array of clients, Partners and suppliers
to fulfil their requirements for
promotional products. With
Facilisgroup we are connecting Partners
with Preferred Suppliers, and through
Brand Addition working with clients to
design, source, and deliver, millions of
products to support consumer and
corporate promotions .
Our Group has an opportunity not only
to support our client base and ensure
the goods they use in their promotional
activities are sourced responsibly, but
also to influence Preferred Suppliers to
make changes in the way they source
goods, helping them reduce their
environmental impact and provide
support for local communities.
By identifying innovative products and
working with a responsible supply chain,
we will see a positive impact on both
the environment and local communities.
We expect high standards from the
suppliers we work with and we continue
to evolve, and improve, our vendor
assessment process. We also aim to
develop and implement a Group
framework on conduct, ethics and
compliance, to align our approach.
34
The Pebble Group plc Annual Report 2021
STRATEGIC REPORT Priority
Our aim
UN Sustainable Development Goals
Community support
To engage locally and make a positive
impact, supporting our communities.
BizDash 5K
Brand Addition participated in the ‘St.
Louis BizDash 5k’, a charity run through
downtown St Louis. The BizDash
provides an opportunity to celebrate
our community while living a healthy,
active lifestyle with the proceeds of the
event donated to the St. Louis sports
foundation, which promotes
sportsmanship in the community and
fosters a culture of kindness, respect,
civility, and selflessness.
Pride 2021
Supporting PRIDE month, showing our
support to the diverse LGBTQ+
community. The Brand Addition Europe
and U.S. teams created and sold
t-shirts with the proceeds of $750
benefiting Stonewall in the UK, and the
Trevor Project in the U.S.
Faciliscares
‘Facilis Cares’ is Facilisgroup’s initiative to
support community projects. Its mission
is to give back to communities through
services and donations. The initiative is
supported by Preferred Suppliers and
Partners and captures the collective
spirit of the Facilisgroup community.
In July 2021, Facilisgroup hosted its
Partner summit in Nashville, Tennessee.
One of the commitments of the Facilis
Cares initiative is to make a positive
impact on any community they visit.
Through the recommendations of two
Nashville distributor Partners, Facilis
Cares donated $12,320 to two
organisations dedicated to helping
youth projects. ‘Gabe’s Chemo Duck’
programme, which supports children
and families living with cancer, and the
‘Stuff the Bus’ programme which
provides essential school supplies to
students in need.
The Pebble Group plc Annual Report 2021
35
Sustainability
Priority
Our aim
UN Sustainable Development Goals
Training, development
and engagement
To support ongoing development
through training and industry
engagement with our employees and
stakeholders.
Ensuring our teams receive the correct
training is important to our long-term
success. Our employees are key to our
success and we must ensure they have
the skills to perform their roles to the
best of their abilities. All new team
members undergo an intensive
induction process introducing them to
the promotional products industry to
ensure they have a sound understanding
of how the business operates. The
induction process not only serves as
training for the role but to engage new
team members in our culture so they
can quickly feel part of the wider team.
Ongoing training and development
needs are highlighted through the
appraisal process to support employee
growth and development.
Building and strengthening the
Facilisgroup community
In May 2021, twelve new employees
underwent a three-week training
programme to provide an in depth look
at the world of promotional products,
distributors, suppliers, and technology,
allowing them to have a heightened
understanding of services and value
provided to our Facilisgroup Partners.
The programme consisted of a
combination of on-site visits, classroom
activities and virtual learning, which
resulted in the employees receiving the
PPAI Trained Advertising Specialist (TAS)
certification, and beneficial knowledge
of the promotional products industry.
Stakeholder engagement
Engaging with clients, Partners and
Preferred Suppliers to understand their
needs is important to the long-term
growth and success of our business. It
allows us to build trust, forge long lasting
relationships and take a pro-active
approach to understanding their needs.
How we engage with shareholders is
detailed in the Stakeholder Engagement
section on pages 18-21.
In June, over 200 industry professionals
met in Nashville, Tennessee, for the first
Facilisgroup Partner Summit in two
years dedicated to industry education,
innovation, collaboration, and
engagement.
The summit provided an opportunity
for industry professionals to engage and
share how challenges during the
pandemic were faced, and overcome.
The summit was themed ‘Change
purposefully’ providing a positive
reminder that change can be good and
transformative. Education sessions
focused on customer journey,
profitability, expanded services, and
supply chain. The Summit provided
Partners with an opportunity to renew
old relationships and forge new ones.
36
The Pebble Group plc Annual Report 2021
STRATEGIC REPORT Priority
Our aim
UN Sustainable Development Goals
Health, safety and
well-being
To provide a safe and inclusive place to
work, promoting a positive attitude
towards mental health and well-being.
Our Group is focused on providing a
safe working environment for all our
employees that promotes a healthy
work–life balance, and supports a
positive attitude towards mental health
and well-being. We strongly believe that
supporting our employees, and helping
to ensure they are in good health,
enables everyone to perform better.
Each site has its own health and safety
team who meet regularly to discuss any
local actions or findings from risk
assessments and health and safety
walkarounds. In FY 21, there were no
reportable health and safety incidents.
Health and safety is a standing agenda
item at each Group Board meeting
where reports for each business are
tabled and noted.
In 2021, as part of our strategic
development plan ‘ba.ONE sustainability
and growth, individuals were recruited
across the Brand Addition business to
become well-being champions. Their
role was to support colleagues with
initiatives to promote a healthy body
and mind and to implement new
well-being programmes.
The ‘ba.Well-being programme’
launched in mid-2021, offering nine
subsidised benefits aimed at improving
mental health and well-being. Since
launching, the scheme has been very
successful with great feedback from our
teams. ‘ba.Support’ was also launched in
2021 and comprises a small group of
volunteers across the business who have
offered to help colleagues who may
benefit from additional support.
Aligning our approach and following recognised standards
Carbon Disclosure
Project (CDP)
Brand Addition makes
an annual submission to the Carbon
Disclosure Project (CDP) declaring its
annual carbon emissions progress
against its reduction targets. Its
declaration also supports the Scope 3
emission tracking for clients linked to
CDP. In the most recent assessment
Brand Addition received a ‘C’ rating.
CDP runs the global environmental
disclosure system. CDP supports
thousands of companies, to measure
and manage their risks and
opportunities on climate change, water
security, and deforestation.
Ecovadis
Our Brand Addition
business retained its
Platinum status and
improved the overall
score from its annual EcoVadis
assessment, which positions the
business within the top 1% of similar
companies in their approach to
sustainability. The assessment reviewed
the approach of four key areas
(Environment, Labour & Human Rights,
Ethics & Sustainable Procurement) and
how the business addresses these areas
including any actions to minimise their
overall impact on the environment.
EcoVadis provides an independent,
trusted, common platform for
evaluating and rating more than 65,000
groups and companies across 200
industries in 160 countries using CSR
assessment criteria based on
recognised sustainability standards.
ISO management systems
Across the Group we have effective
management systems in place that are
annually audited by SGS to ensure
continued certification against globally
recognised standards. Our Brand
Addition business holds ISO9001 across
its UK sites, ISO14001 at its Manchester
site and ISO50001 across its
Manchester, London, and Hagen sites.
The Pebble Group plc Annual Report 2021
37
Key performance indicators
Measuring our
performance.
Group
One of our values:
Ambitious in our commitment to
achieving positive results with
sustainable impact.
REVENUE
ADJUSTED EBITDA1
RETURN ON REVENUE
BASIC ADJUSTED EPS2
ADJUSTED OPERATING
CASH FLOW CONVERSION
£115.1m
+39.7%
£15.4m
+57.1%
13.40%
+1.6%
5.14p
+73.6%
38.3%
+27.1%
m
1
.
5
1
1
£
m
4
.
2
8
£
m
4
.
5
1
£
m
8
.
9
£
%
0
4
.
3
1
%
8
.
1
1
p
4
1
.
5
p
6
9
.
2
%
0
3
.
8
3
%
0
2
.
1
1
FY20 FY21
FY20 FY21
FY20 FY21
FY20 FY21
2020 2021
Why we measure it
Year-on-year growth in
revenue indicates
progress against both
short-term plans and
long-term strategy.
Comment
The increase in revenue
in FY 21 reflects the
growth in Facilisgroup
ARR and the recovery of
Brand Addition.
Why we measure it
Year-on-year growth in
Adjusted EBITDA indicates
progress against both
short-term plans and
long-term strategy.
Management believes this
adjusted measure is more
appropriate in
understanding the
underlying trading
performance of the
business.
Comment
The increase in Adjusted
EBITDA in 2021 reflects
the revenue growth and
the return of a normalized
cost base.
Why we measure it
Return on revenue,
calculated as Adjusted
EBITDA as a percentage of
revenue, is an important
measure for the Group in
illustrating its ability to
grow revenue profitably
whilst maintaining control
over its margins and
costs.
Comment
The Group increase of
1.6% reflects the
recovery of the Brand
Addition division in FY 21.
Why we measure it
This metric measures the
Group’s ability to turn
profit into cash. It is
monitored to ensure it
remains strong, whilst
maintaining the level of
investment in capital
expenditure required to
support the Group’s
medium-term growth
plans.
Comment
The improvement in the
year is due to increased
Group profitability with
some investment in
working capital to
support sales growth in
Brand Addition.
Why we measure it
This measure illustrates the
profitability of the Group in
relation to the number of
shares in issue and is
therefore an important
metric in demonstrating
the delivery of value for
our shareholders.
Comment
Adjusted earnings per
share is profit after tax
before amortisation of
acquired intangibles,
share-based payments
charge, and exceptional
items divided by the
weighted average number
of shares in issue.
Adjusted Basic earnings per
share were 5.14p against
2.96p in 2020, reflecting
the increased profitability
of the Group.
1 Adjusted EBITDA is defined as operating profit adjusted to add back depreciation of property, plant and equipment, amortisation, share based payments charge and exceptional items
2 Basic adjusted EPS is calculated as profit after tax before amortisation of acquired intangibles, share-based payments charge, and exceptional items divided by the weighted average
number of shares in issue
38
The Pebble Group plc Annual Report 2021
STRATEGIC REPORT 15
12
9
6
3
0
1200
1000
800
600
400
200
0
Group companies
Facilisgroup
Recurring revenues – High visibility of recurring revenues with a growing customer base
REVENUES £’m
PARTNER NUMBERS
PARTNER BRIDGE
1.1
8.2
0.5
9.3
1.0
6.4
0.9
5.4
0.5
12.2
200
150
200
175
149
100
119
127
50
0
FY 17
FY 18
FY 19
FY 20
FY 21
2017
2018
2019
2020
2021
50
40
30
20
10
0
175
2020
+31
-3
-1
+6
-2
200
w
e
N
d
e
r
i
u
q
c
A
G
F
n
i
h
t
i
w
d
e
r
i
u
q
c
A
2021
n
r
u
h
C
d
e
t
c
a
r
t
n
o
C
ARR
Other
Why we measure it
Tracking recurring revenues provides
excellent visibility of future revenue
performance.
Comment
Recurring revenues increased by 30% GBP
(40% in home currency of USD) in FY 21,
driven by the increase in Partner numbers
and GMV growth. Recurring revenues
comprise 96% of Facilisgroup revenues in
FY 21, which is consistent with FY 20.
Why we measure it
Responsibly increasing Partner numbers whilst
maintaining Partner quality is key to delivery of
the Facilisgroup strategy. The engagement of
existing Partners and the pipeline of potential
new Partners are tracked on a monthly basis to
demonstrate progress against this target.
Comment
Partners implemented, increased to 200, plus
six awaiting implementation. This is compared
to our milestone target of 205 Partners at the
end of 2021.
Why we measure it
Understanding Partner attrition and the
underlying reasons for it, is key to our
Partner growth strategy. Alongside our
ambitious targets for winning new Partners,
we focus on minimising attrition.
Comment
Retention rates have been impacted this year
by higher levels of M&A activity within the
Partner group. Despite this, retention rates
remain strong at 98%.
Partner activity – High quality Partners under long-term relationships
GROSS MERCHANDISE VALUE $’m
PREFERRED SUPPLIER PURCHASES $’m
PERCENTAGE OF PARTNERS BY GMV
GROWTH %
1,150
821
249
768
730
638
350
261
257
227
193
350
300
250
200
150
100
50
0
FY 17
FY 18
FY 19
FY 20
FY 21
FY 17
FY 18
FY 19
FY 20
FY 21
Estimated PPE
Why we measure it
Tracking the value of sales processed
through our technology sets the pricing of
our services to our Partners and allows the
Group to monitor both the growth in
like-for-like Partner sales, and also overall
growth in total distributor sales.
Comment
The sales activity of our Partners resulted
in $1,150m GMV, an increase of $133m on
FY 20, and ahead of our $1.100m milestone
target.
Why we measure it
Consolidating Partner spend through a
high-quality supply base that provides
excellent service, favourable pricing and
rebates for our Partners also generates
revenue for Facilisgroup. The level of spend
with our Preferred Suppliers is tracked
monthly to demonstrate progress against
this target.
Comment
Spend through Preferred Suppliers increased
in FY 21. As a percentage of GMV this was
consistent with FY 20, lower than historically,
driven by the swing towards PPE orders
through non-Preferred Suppliers in Q2.
2018
2019
2020
2021
70%
60%
50%
40%
30%
20%
10%
0%
>-30% -11% to
-30%
-10% to
+10%
+11% to
+30%
>+30%
Why we measure it
Understanding the sales performance of our
Partners is an indication of our Partner’s
strength.
Comment
The impact of the pandemic on Partner GMV
growth was evident in FY 20 and subsequent
recovery in FY 21, is evident in the unusual
spreads seen across those years.
The Pebble Group plc Annual Report 2021
39
Key performance indicators
Group companies
Brand Addition
Revenue analysis – Win, Grow, Retain, Repeat
REVENUE BY SERVICE TO
CLIENTS £’m
67
69
44
25
29
29
56
46
120
100
80
60
40
20
0
120
100
80
60
40
20
0
REVENUE BY EXISTING AND
NEW CLIENTS £’m
3
95
12
80
11
91
5
68
REVENUE BY CLIENT
CONCENTRATION £’m
32
14
46
33
14
51
20
10
43
17
12
73
120
100
80
60
40
20
0
FY 18
FY 19
FY 20
FY 21
FY 18
FY 19
FY 20
FY 21
FY 18
FY 19
FY 20
FY 21
Consumer Promotions
Corporate Programmes
Existing clients
New clients (in year and 1st full year contribution)
Top 10 clients
11-20 clients
21+ clients
Why we measure it
Brand Addition revenues can be
categorised into two distinct divisions;
Consumer Promotions that support our
clients in driving their own sales targets, and
Corporate Programmes that support our
clients’ general marketing activities. These
divisions can respond differently to market
conditions and therefore analysing the
revenue split is important.
Comment
Revenue increased during FY 21 across both
divisions. Consumer Promotions increase
driven by incremental activity across key
clients. Corporate Programmes growth
reflects some post pandemic recovery of
existing clients combined with new client wins.
Why we measure it
Brand Addition has excellent levels of client
retention providing the business with good
visibility of revenues and informs the view
of future performance. Retaining and
growing existing clients, while successfully
implementing new business is fundamental
to its growth strategy.
Comment
Growth in revenue from existing clients
represents recovery in underlying Corporate
Programme clients combined with the
incremental Consumer Promotions activity.
FY 21 was also a strong year for new business,
including significant new corporate clients
contracted in FY 20 and fully implemented
through FY 21.
Why we measure it
Brand Addition tracks revenue by client
concentration as continued success of these
larger clients is central to delivering on our
strategy of Win, Grow, Retain, Repeat.
Comment
The top 10 clients contributed 71.6% of
total revenue in FY 21 (58.9% in FY 20). Our
focus on attracting and growing global
contracts, combined with slower post
pandemic recovery in some of our smaller
clients, has led to our top 10 clients growing
as a percentage of overall revenues.
Revenue diversity – Strong sectors across multiple geographies
REVENUE BY CLIENT SECTOR %
REVENUE BY DESTINATION %
4%
8%
8%
11%
9%
11%
22%
20%
FY21
FY20
15%
15%
35%
42%
Engineering
Financial Services
Health, Beauty, FMCG
Technology
Transport
Other
16%
12%
20% 23%
FY21
FY20
26%
31%
34%
38%
UK
Europe
US
RoW
Why we measure it
Brand Addition works with clients across a wide range of sectors.
This level of diversity provides protection against economic or
regulatory factors which may impact specific sectors.
Comment
Clients in the health and beauty sector contributed 42% of revenue
in FY 21 (35% in FY 20). These clients operate in the Consumer
Promotions division and have contributed significantly to the growth
of this division. There was strong diversity across other sectors.
Why we measure it
Brand Addition has a global client base and is well diversified across
the world, providing resilience to market conditions that could
affect specific geographies.
Comment
Sales into Europe increased relative to FY 20, driven by recovery of
Corporate Programme clients and significant new clients operating
predominantly in Europe.
40
The Pebble Group plc Annual Report 2021
STRATEGIC REPORT Chief Financial Officer’s review
£’m
Revenue
Adjusted EBITDA
Adjusted operating cash flow
Net cash
FY 21
FY 20
Variance
115.1
15.4
5.9
12.1
82.4
9.8
1.1
7.1
32.7
5.6
4.8
5.0
2.18p
Adjusted Earnings Per Share
5.14p
2.96p
Overview
The results reflect a successful year for the Group where
the objectives set at the outset for both our businesses
have been met. Revenue of £115.1m (FY 20: £82.4m) was
40% ahead of FY 20 and Adjusted EBITDA of £15.4m
(FY 20: £9.8m) was 57% ahead.
Taking each of the businesses in turn:
In March 2021, Facilisgroup set out a medium-term aspiration
targeting USD50m of ARR by the end of 2024. This plan included
short-term milestones signposting the route to delivering this
aspiration, which it successfully met in FY 21. In the year it
continued to grow both revenue and EBITDA, increased Partner
numbers to 200 (FY 20: 175), and, through providing additional
services to preferred suppliers, increased the level of supplier
contributions. In the year, total revenue increased 30% in GBP,
40% in Facilisgroup’s home currency of USD.
Brand Addition’s revenue was 41% ahead of the prior year, and
importantly 5% ahead of FY 19, representing a full and
complete recovery ahead of pre-pandemic levels. Sales in our
Consumer Promotions division grew strongly in the year up
62% over FY 20, supported by improving momentum, and a
positive contribution from new business in the Corporate
Programmes division, where sales increased 28% over FY 20.
We expect this momentum to continue in FY 22 with a further
positive contribution from additional new business wins
converted during FY 21.
The Group’s balance sheet remains strong and its liquidity
position is robust with cash balances of £8.5m at 21 March
2022 with no amounts drawn down on the Company’s £10m
committed revolving credit facility.
Review of the business
The Group chooses to use adjusted measures as key
performance indicators in addition to those reported under
IFRS, as they reflect the underlying performance of the
business. These adjusted measures exclude certain
non-operational and exceptional items, which have been
consistently applied in all years presented. The information
presented below should also be considered in conjunction
with the segmental analysis in the Chief Executive’s Review and
note 4, which provide further detail on the performance of
the separate businesses within the Group.
The Pebble Group plc Annual Report 2021
41
Chief Financial Officer’s review
Gross profit
Gross profit as a percentage of turnover reduced during the
year by 1.1 p.p.t from 37.6% to 36.5%. This largely reflects
the impact of the increased weighting of Brand Addition
sales as a proportion of the total Group, as revenue
recovered from the sales impact of FY 20. In Brand
Addition, there was also a 0.7 p.p.t reduction in margin as
the business navigated a period of increased costs
associated with Brexit, freight rate pricing, and freight
capacity challenges combined with the impact, in the short
term, of new business, which has lower than average initial
margins.
Adjusted EBITDA
Adjusted EBITDA was £15.4m (FY 20: £9.8m). The increase of
£5.6m from FY 20 is made up as follows:
• Facilisgroup £1.6m as incremental revenues were delivered
at excellent EBITDA returns of 60% (FY 20: 61%)
demonstrating the business’ ability to retain strong margins
and scale revenue.
• Brand Addition delivered a £4.7m increase being the
incremental profit from sales growth less increased costs
as contributions from the UK Job Retention Scheme, and
support from our teams through temporary salary
reductions, were not repeated in 2021.
• Central costs increased by £0.7m in the year. £0.2m from
temporary salary savings in FY 20, the balance being
incremental costs through the growth of the team and the
Group’s investment in ESG.
The Adjusted EBITDA margin increased by 1.5 p.p.t to 13.4%
as revenues in Brand Addition recovered from the demand
challenges of 2020.
Depreciation and amortisation
The total charge in the year was £4.8m (FY 20: £3.5m), of
which £2.8m (FY 20: £2.0m) related to the amortisation of
intangible assets. In accordance with IAS 38, the Group
capitalises the costs incurred in the development of its
software, and the increase in the year is a result of the
Group’s continued investment in its proprietary technology,
and specifically in new product development for
Facilisgroup. It is the Group’s intention to continue this
investment and it is expected that this charge will increase
further in FY 22.
£’m
Revenue
Gross profit
Gross profit margin
Adjusted EBITDA
2021
115.1
42.0
36.5%
15.4
Adjusted EBITDA margin
13.4%
2020
82.4
31.0
37.6%
9.8
11.9%
(3.5)
-
(0.6)
5.7
(0.7)
5.0
(0.9)
4.1
(4.8)
(0.7)
-
9.9
(0.6)
9.3
(2.0)
7.3
167,450,893 167,450,893
2.96p
5.14p
4.39p
2.44p
Variance
32.7
11.0
(1.1%)
5.6
1.5%
(1.3)
(0.7)
0.6
4.2
0.1
4.3
(1.1)
3.2
-
2.18p
1.95p
Depreciation and
amortisation
Share-based
payment charge
Exceptional items
Operating profit
Net finance costs
Profit before tax
Tax
Profit for the year
Weighted average
number of shares
Adjusted Basic EPS
Basic EPS
Revenue
Revenue for FY 21 was £115.1m (FY 20: £82.4m), growth of
40%. Facilisgroup total revenue increased by £2.9m or 30%
(FY 20: £0.5m or 5%). ARR from partner subscriptions for
our technology and supplier contributions made up £2.9m
of this increase. The growth arose from a combination of
incremental partner numbers, and additional contributions
from suppliers, both from increased volumes as purchasing
patterns normalised, and increased percentage
contributions as suppliers paid more for the additional
efficiencies delivered to them by Facilisgroup. Revenue in
Brand Addition increased by £29.8m. A combination of
strong growth with key customers in the Consumer
Promotions division of £17.7m, incremental new business
delivering £8.0m, and the balance being the recovery of the
underlying Corporate Programs business that was affected
by demand challenges in 2020.
42
The Pebble Group plc Annual Report 2021
STRATEGIC REPORT Exceptional items
Exceptional costs in the year were £nil (FY 20: £0.6m).
Costs in FY 20 comprised £0.4m reorganisation and
restructuring in Brand Addition, as changes were made to
headcount to align people numbers with anticipated sales
volumes following the impact of the pandemic, and £0.2m
transaction costs relating to the acquisition of software
assets in Facilisgroup.
Share based payments
The total charge for the Period under IFRS 2 “Share-based
payments” was £0.7m (FY 20: nil). This charge related to the
2020 and 2021 awards made under the 2019 Long Term
Incentive Plan and Group Sharesave Plan (SAYE).
Operating profit
Operating profit for the year was £9.9m (FY 20: £5.7m).
Finance costs
Finance costs of £0.6m in the year (FY 20: £0.7m) include
interest on the utilisation of the Group’s committed RCF
facility during the year of £0.2m (FY 20: £0.3m) and interest
costs on leases capitalised in accordance with IFRS 16 of
£0.4m (FY 20: £0.4m).
Taxation
The total taxation charge was £2.0m (FY 20: £0.9m) giving
rise to an effective rate of tax of 21.5% (FY 20: 18.0%). The
effective rate of tax was higher than the UK standard rate of
taxation as the proportion of profit earned by the Group in
overseas jurisdictions where corporation tax rates are
higher than those in the UK increased during the year.
Basic Earnings per share
The earnings per share analysis in note 6 covers both adjusted
earnings per share (profit after tax before amortisation of
acquired intangibles, share-based payments charge and
exceptional items divided by the weighted average number of
shares in issue during the year), and statutory earnings per
share (profit attributable to equity holders divided by the
weighted average number of shares in issue during the year).
Adjusted earnings was £8.6m (FY 20: £5.0m) an increase in
adjusted basic earnings per share of 2.18 pence. Basic earnings
per share was 4.39 pence per share (FY 20: 2.44 pence per
share) an increase of 1.95 pence.
Dividends
On admission to AIM in December 2019, the Group’s stated
intention was to make dividend payments of c.30% of profit
after tax. This policy remains in place. However, as we
believe the opportunities ahead of us are significant,
particularly investment in Facilisgroup, we have taken the
decision to retain cash in the business and not to pay a
dividend in respect of 2021. The timing of implementing our
stated dividend policy will be considered again during 2022,
and an update provided in the Group’s half year results,
scheduled for announcement in September 2022.
Cash flow
The Group had a cash balance of £12.1m at 31 December
2021 (FY 20: £7.1m).
Cash flow for the year is set out below.
£’m
Adjusted EBITDA
Movement in working capital
Capital expenditure
Leases
Adjusted operating cash flow
Tax paid
Net finance cash flows
Exceptional items
Exchange loss
Net cash flow
2021
15.4
(2.8)
(5.3)
(1.4)
5.9
(0.5)
(0.6)
-
0.2
5.0
2020
Variance
9.8
(1.8)
(5.7)
(1.2)
1.1
(1.3)
(0.7)
(0.5)
(0.4)
(1.8)
5.6
(1.0)
0.4
(0.2)
4.8
0.8
0.1
0.5
0.6
6.8
Adjusted operating cash flow
Adjusted operating cash flow before tax payments and net
finance costs increased by £4.8m in the year to £5.9m. This
is an important metric for the Group that is monitored
consistently to ensure it remains strong whilst maintaining
the necessary level of investment in capital expenditure
required to support the Group’s medium-term growth
plans. The improvement in the year is due to increased
Group profitability with some investment in working capital
to support sales growth in Brand Addition.
Balance Sheet and shareholders’ funds
Net assets increased in the year by £8.3m, the balance
sheet is summarised below:
£’m
Non-current assets
Working capital
Cash
Lease liabilities
Other net liabilities
Net assets
2021
63.9
9.5
12.1
(7.8)
(3.1)
74.6
2020
63.6
6.4
7.1
(9.0)
(1.8)
66.3
Variance
0.3
3.1
5.0
1.2
(1.3)
8.3
The Pebble Group plc Annual Report 2021
43
Chief Financial Officer’s review
Alternative Performance Measures “APM’s”
Throughout the Annual Report and Accounts the Group has
used a number of APM’s. These are used to provide
additional clarity to the Group’s financial performance and
are used internally by management to monitor business
performance, in its budgeting and forecasting and also for
determination of Directors’ and senior management
remuneration. These APM’s are not defined under IFRS and,
therefore, may not be directly comparable with adjusted
measures presented by other companies. The non-GAAP
measures are not intended to be a substitute for or
superior to any IFRS measures of performance. However,
they are considered by management to be important
measures used in the business for assessing performance.
The following are key non-GAAP measures identified by the
Group and used in the Strategic Review and Financial
Statements:
Adjusted EBITDA which means operating profit before
depreciation, amortisation, share-based payments charge
and exceptional items.
Adjusted operating profit which means operating profit
before amortisation of acquired intangible assets, share-
based payments charge and exceptional items.
Adjusted profit before tax which means profit before tax,
amortisation of acquired intangible assets, share-based
payments charge and exceptional items.
Adjusted Earnings which means profit after tax before
amortisation of acquired intangible assets, share-based
payments charge and exceptional items.
Adjusted earnings per share which means Adjusted Earnings
divided by a weighted average number of shares in issue.
Adjusted operating cash flow which is calculated as
Adjusted EBITDA less movements in working capital, capital
expenditure and lease payments.
Claire Thomson
Chief Financial Officer
22 March 2022
Non-current assets
Non-current assets are the most significant balance sheet
category of which £35.8m (FY 20: £35.8m) is goodwill arising
on previous acquisitions. Non-current assets also include
£8.6m (FY 20: £9.0m) of customer relationship intangible
assets, £11.3m (FY 20: £9.2m) of software development costs,
including £3.3m investment in the year into Facilisgroup
technology products and £7.9m (FY 20: £9.1m) of Property,
Plant and Equipment. Software development costs arise from
ongoing investment in Group proprietary software and in
particular investment into Facilisgroup products to ensure
that existing technology services remain market leading and
differentiated from our competitors alongside the
development of new products that will deliver our medium-
term growth plans. The costs are capitalised in accordance
with IAS 38 and amortised over the period which the Group
expects to generate benefit from the development. As the
Group continues to accelerate investment into its digital
commerce platform for Facilisgroup, we expect this level of
investment to continue in the short term.
Working capital
Working capital of £9.5m is £3.1m higher than FY 20. This
increase is due to sales growth, and incremental volume in
Brand Addition where trade receivables have increased over
FY 20. The quality of these receivables remains excellent and
our working capital metrics remain consistent with FY 20 with
amounts outstanding being collected to terms in Q1 22.
Cash
Cash balances at 31 December 2021 were £12.1m an increase
of £5.0m on 2020.
Lease liabilities
Lease liabilities of £7.8m (2019: £9.0m) relate to Group
properties capitalised in accordance with IFRS 16. The
reduction in the year is lease payments of £1.4m offset by
£0.5m additions arising on lease extensions for existing
offices and the relocation of Brand Addition Shanghai.
Other net liabilities
Other net liabilities of £3.1m (FY 20: £1.8m) are net tax
liabilities of which £3.0m (FY 20: £2.6m) is deferred tax in
respect of the intangible assets of Facilisgroup. £1.6m
(FY 20: £1.7m) relates to acquired customer relationships,
the balance and increase in the year arising as a result of
accelerated investments into technology products. These
liabilities will reverse over the period that the assets are
amortised. In FY 20 the balance also included £0.8m of
recoverable tax payments on account.
44
The Pebble Group plc Annual Report 2021
STRATEGIC REPORT Risk Management
Managing our key
risks and uncertainties.
One of our values:
Enjoying the journey in a culture
of integrity, transparency and
fairness, where we are proud of
our past and excited by our
future.
The Group Board is ultimately responsible for
setting and approving risk appetite and ensuring
that the Group maintains a sound risk
management and internal control framework.
Risk management and internal control
framework
The Audit Committee
The Group Board delegates responsibility to the Audit
Committee to discuss and review the Group’s risk profile
and risk register twice per year. The Committee looks at the
nature and extent of principal risks and uncertainties faced
by the Group in the context of achieving its strategic
objectives and ensures that all have been appropriately
identified. The Committee also reviews the mitigating
actions and controls in place in respect of these risks and
any related opportunities. At these meetings, the Audit
Committee also carries out a review of internal controls and
receives reports from the Group’s management on the
effectiveness and integrity of the Group’s internal control
and risk management systems. The Audit Committee is also
kept up to date by the Group CFO and the Group Financial
Controller on progress against the Group’s internal audit
and risk plan and, on an annual basis, it considers whether
there is a need for a separate internal audit function. When
satisfied, the Audit Committee approves the Group’s risk
register and internal controls and recommends to the
Group Board for approval.
Group Executive Committee and Operating Boards
Risk monitoring and identification is an ongoing iterative
process to facilitate the early identification and escalation
of risks and the Group has strong governance and
communication structures in place which ensure risks are
actively managed and mitigated.
The Group Executive Committee includes ‘Risk Management
and Compliance’ as a monthly standing agenda item for
discussion between the Executive Directors, the Divisional
Leads of each of Facilisgroup and Brand Addition and the
other senior executives on the Committee. This includes
escalation by the Divisional Leads of any risks or potential
risks that have occurred since the previous meeting and
discussion and review of any required amendments to
internal controls. Risk and compliance related policies and
procedures are also reviewed and discussed in that forum
prior to presentation to the Audit Committee and/or Group
Board for annual approval.
The Operating Boards of Facilisgroup and Brand Addition
meet monthly and maintain their own risk registers which
are reviewed and reconciled against the Group’s risk
register twice per year in advance of review by the Audit
Committee, as described above. Risk management has
always formed part of Operating Board meetings, however
in 2022 ‘Risk Management’ has become a formal standing
agenda item at each Operating Board meeting, where the
lead for each key function addresses the significant risks
relevant to their areas, including potential horizon risks and
those identified below.
Through this risk management framework, the Group Board
drives effective risk management practices and processes
that in turn drive effective decision-making at all levels of
the Group:
Risk Management Framework
Group Board
Audit
Committee
Group Executive Committee
Operating Board
FacilisGroup
Operating Board
Brand Addition
Risk and Compliance
Operating Risk Register
Group Risk Register
The Pebble Group plc Annual Report 2021
45
Risk Management
Evolution of the risk management framework
Across the Group we continue to review and evolve our risk
management framework to ensure it reflects best practice.
In Q1 22, we sought external support and advice to validate
the Group’s risk register approach and we have taken steps
to implement the recommendations made, which include
making a clearer distinction between controls and action
plans in our risk mitigation reporting and the introduction of
formal risk horizon scanning.
We have also taken initial steps to evolve our framework to
align with the Task Force on Climate-related Financial
Disclosure (TCFD) reporting requirements and we plan to
incorporate the TCFD recommendations during 2022.
These include the evaluation of physical and transitional
climate related risks over the short, medium and long-term,
considering different climate related scenarios. Further
information can be found on page 31 in the ESG section of
this report.
Key risks
The items referred to below are regarded as the key risks
for the Group. These are not the only risks that could affect
Group performance but, in the opinion of the Group Board,
are those which are currently the most significant and
specific to the Group’s business.
Market risks
Risk and potential impacts
Mitigating activities
Pandemic related disruption
Due to a variety of external factors including a
successful global vaccine rollout, easing of
Government restrictions, improved customer
confidence and improved wider trading conditions,
the impact of the COVID-19 pandemic on the Brand
Addition business was reduced in 2021.
Nevertheless, in the longer term, the Group must
continue to be prepared for the potential impact of
any new pandemic outbreaks. These factors pose a
risk to demand for the Group’s products and
services, which could impact its ability to meet
revenue and Adjusted EBITDA targets.
The Group took swift action during 2020 in response to the
pandemic, managing its flexible cost base to remain profitable and
cash generative.
In 2021, the Group’s differentiated positions in the industry and
established client and Partner relationships enabled it to deliver an
immediate return to growth post the impact of pandemic disruption.
The strength and robustness of the growing Facilisgroup
subscription based technology platform continued during the year.
Added to this, at Brand Addition there was a full and immediate
return to 2019 sales levels from its strong client base that is
diverse, both geographically and from a sector perspective.
The Group has a strong balance sheet, effective working capital
disciplines, is cash generative and has access to a £10m revolving
credit facility. Having successfully navigated through this difficult
period, the Group Board is confident in the Group’s ability to deal
with any continued disruptions from COVID-19 and in the
long-term prospects for the business.
Change to risk
No change
Macroeconomic environment
The ongoing impact of the pandemic on the
macroeconomic environment, including demand and
supply chain disruption, continues to pose a risk of a
global economic downturn. Such downturn could
impact on demand for the Group’s products and
services and on Brand Addition’s gross margins,
thereby affecting the Group’s ability to meet its
revenue and EBITDA targets.
However, in assessing this risk, we must consider the
current conflict in Ukraine and the resulting sanctions
imposed on Russia by governments worldwide. These
circumstances heighten the risk of a global economic
downturn and we have increased our assessment of
this risk accordingly.
The Group has proved its ability to maintain profitability and cash
generation from reduced demand caused by the COVID-19 pandemic.
In the event of an economic downturn, the subscription-based
technology platform in Facilisgroup insulates this business from any
initial shock, and revenues in the year of impact would be largely
unaffected. The diversification of Brand Addition revenues across
geographies and sectors provides some protection against the impact
of a reduction in demand and the flexibility of the operating model
below gross margin gives the business the ability to protect profits.
Both businesses are highly cash generative with the underlying client
base in Brand Addition resulting in a high-quality balance sheet.
Change to risk
Increased
46
The Pebble Group plc Annual Report 2021
STRATEGIC REPORT Strategic
Risk and potential impacts
Mitigating activities
Concentrated client base
Brand Addition’s core strategy is to win, grow, and retain
multi-country out-sourced contracts, as further detailed in
on page 17 of this report.
However, Brand Addition has a relatively small number of key
clients and in FY 21 generated 71.6% of Group revenue from the
top 10 clients. A loss, or significant reduction, in activity from
one of our major clients could materially affect the Group’s
ability to meet its revenue and Adjusted EBITDA targets.
Acquisition risk
As further detailed in page 17 of this report, the Group’s core
strategy is to selectively pursue acquisition opportunities to
create excellent shareholder value and to support its organic
growth and development in the long-term.
The Group has a track record of achieving growth through
acquisition. However, any future acquisition could give rise
to unforeseen risks for the Group, such as loss of key clients
or key personnel, complex and extended integration
processes absorbing significant amounts of senior
management time or unforeseen liabilities. A poorly
implemented acquisition could have a damaging impact on
the Group’s financial position and reputation.
The acquisition of Facilisgroup in December 2018, which
has a diversified customer base and in FY 21 represented
57% of Group Adjusted EBITDA, means that the impact of
the loss of a key Brand Addition client on Group Adjusted
EBITDA is much reduced.
In addition, delivering on the strategic objective of the Brand
Addition business to grow through new client acquisition
means the Group Adjusted EBITDA impact of any one client
would be further diluted.
Change to risk
No change
The Group takes great care in identifying potential
acquisition targets, which are typically businesses with
whom senior management have an existing relationship.
All proposed acquisition targets are subject to robust
due diligence using internal teams with extensive industry
experience, supported by external advisors where the
Group does not have the specialist in-house skills.
Change to risk
No change
Financial
Risk and potential impacts
Mitigating activities
Currency and foreign exchange
Facilisgroup provides its technology to SME distributors in
North America and Brand Addition services multi-country
out-sourced contracts with leading brands.
A proportion of the Group’s revenue is therefore
denominated in foreign currency, principally US Dollar and
Euro, while the Group’s reporting currency is pound sterling.
The Group is, therefore, exposed to the risk that adverse
exchange rate movements could cause its costs to increase
(relative to its reporting currency) and could result in
reduced profitability.
Where it is considered appropriate, the Group uses
hedges to reduce exposure to currency risk, however
these may not always be effective and there may be
some residual currency risk.
Change to risk
No change
The Pebble Group plc Annual Report 2021
47
Risk Management
Operational
Risk and potential impacts
Mitigating activities
Retaining and attracting key personnel
Attracting and retaining experienced and appropriately skilled
personnel is critical to achieving our organic growth plans (set
out on page 17 of this report).
Not having the right people and skills within the business
could impact on the Group’s ability to service our clients and
grow the business.
We value our people highly, invest across our Group in their
development and support them in achieving their potential.
We continually develop and invest in our highly talented
and dedicated people in order to maintain an engaged
workforce, as explained further in the Stakeholder
Engagement section of this report on pages 18-21.
Inflationary pressures on salaries across the globe, combined
with a shortage of skilled personnel in the labour market,
means higher wage expectations amongst existing and
future personnel.
We offer competitive compensation packages that are
reviewed regularly and we routinely survey our
employees to monitor employee engagement levels
and identify opportunities for further improvement.
Attrition rates across sites and geographies are
monitored monthly to enable mitigating actions to be
taken quickly if necessary.
Change to risk
Increased
Reliance on IT systems
The Group’s activities are reliant on the effective operation
of its IT platforms and infrastructure. In the event of an
incident, the Group would initiate its business continuity
and disaster recovery procedures. However, prolonged
disruption could impact the Group’s ability to hit revenue
and EBITDA targets.
The Group has an experienced and dedicated IT team
with support from external consultants where necessary.
Disaster recovery and business continuity procedures are
monitored and updated regularly by both the IT and
operations teams.
Change to risk
No change
Breach of IT security or cyber-attack
IT Security breaches, computer malware and other
cyber-attacks could result in a loss of business for the Group.
Such incidents may give rise to a potential liability through
litigation and damage the Group’s reputation with clients,
resulting in a loss of goodwill.
Generally, reported incidences of cyber-attacks targeted at
businesses are becoming more frequent and of greater scale
and sophistication.
The Group implements a robust testing process on
systems and software that includes external penetration
testing by software consultants. Disaster recovery plans
have been developed to respond to such incidents to
ensure the business is able to recover with limited
interruption should an incident arise.
The Group has crisis management procedures in place to
help us deal with any IT security incident efficiently.
Change to risk
Increased
48
The Pebble Group plc Annual Report 2021
STRATEGIC REPORT Operational
Risk and potential impacts
Mitigating activities
Climate change
Climate change presents a range of risks to the
business.
Risks of extreme weather events such as floods,
droughts and storms could potentially affect the
Group’s infrastructure and operations and also that
of its supply chain. The transition to a low-carbon
economy could also impact the Group’s supply chain
and it may be exposed to increased operational and
distribution costs related to mitigation efforts,
increased regulatory compliance and carbon taxes.
It may also face increased product costs from
suppliers due to higher input costs and regulatory
compliance.
Customer preferences and concerns will increase
demand for wider ranges of low-carbon, sustainable
products, services and delivery options that may be
difficult to identify, source and arrange. This could
negatively impact customer demand, retention and
the Group’s revenues. In addition, the increasing
demand of all stakeholders to undertake meaningful
activity to address climate change is likely to result in
increased exposure to the risk of reputational
damage, and client and employee retention issues, if
the Group is not perceived to be engaging effectively
with this challenge.
These risks are further analysed in our annual ESG
report, which is on the Company’s website.
The Group is committed to addressing meaningfully the challenges
we all face in tackling climate change.
One of our four ESG pillars specifically focuses on minimising our
impact on the environment and supporting the fight to tackle climate
change. Our actions and commitments are set out in the ESG section
of this report on pages 26-37 and also in our annual ESG report,
which is on the Company’s website.
Whilst climate change does not pose a significant risk to our
business, we recognise our duty to minimise our impact and the
importance of climate change to our key stakeholder groups (as
referred in our Section 172(1) statement on pages 22-25).
Clients supported by Brand Addition in particular have been demanding
sustainable products for a number of years. The business has embraced
and welcomed this change, using its creative team, established and
emerging supply chains to source products that meet the high standards
expected by our clients and their own commitments to ESG. This is a key
area of differentiation for the business and we are actively developing our
offering and services to meet increasing ESG standards.
The risk of supply chain disruption is minimised through the Group’s
diverse supply chain so that it can quickly adapt. The Group also
maintains alternative supplier relationships for each key product
category. In addition, through the Brand Addition direct supply
chain, where the supplier evaluation process identifies a heightened
risk of disruption due to natural disasters and/or political or social
unrest, then an alternative supplier would be identified where the
level of risk was considered more acceptable.
Addressing the challenge of reducing our carbon emissions, the
Group has developed a framework for energy and carbon reporting
to provide visibility of our direct Scope 1 and 2 emissions globally, and
is embarking on an exercise in 2022 to calculate its indirect (Scope 3)
emissions. Targets have been set and further reduction plans are
currently being developed, along with utilising carbon compensation
schemes, to reduce carbon emissions. One of the projects already
underway has seen our Brand Addition logistics team working with key
logistics partners to identify carbon neutral distribution opportunities
to provide our clients with these alternatives when selecting delivery
options for their goods.
Change to risk
No change
The Strategic Report, which includes the Chair’s report, the CEO’s review, the business model and strategy, the Group
financial review and the principal risks and uncertainties, was approved by the Group Board and signed on its behalf by:
Christopher Lee
CEO
22 March 2022
The Pebble Group plc Annual Report 2021
49
Chair’s Introduction to Governance
Committed to effective
corporate governance.
The Group Board is committed to effective
corporate governance. We see the principles of
good governance not just as a set of guidelines,
but as a real basis for making us a better business
with strong internal controls that deliver long-
term value and meets stakeholder expectations
around leadership and oversight. As Chair of the
Group Board, I am responsible for corporate
governance within the Group, and I work with
our Board and Group General Counsel &
Company Secretary to build upon and enhance
our sound corporate governance grounding.
This involves reviewing the continued effective operation of
the Group Board and its Committees and their oversight of
the Group’s businesses, updating our governance framework
and our approach where necessary or desirable in response
to: (i) changes in our businesses as we grow; (ii) changes in
official standards; (iii) developments in best practice
guidance; and (iv) our stakeholders’ expectations.
In doing this, we are focused on ensuring that the new
policies or practices we introduce are not only aligned with
best practice but are designed in a meaningful way to fit
with our culture and way of working. During 2021, this
included Board time dedicated to: developing or formalising
Group policies and Board processes; reviewing the quality
of contribution, debate and decision-making at Board and
Committee meetings; developing or formalising the
Company’s approach to, and processes around, specific
governance initiatives (for example DEI, succession planning
and talent pipeline development); reviewing Board and
Committee terms of reference; and, enhancing the
reporting and flow of information from Facilisgroup and
Brand Addition up to the Group Board through the
appropriate forums.
Governance Highlights
• Further development of Group policies
• Introduction of formal DEI policy and
initiatives
• Strengthening of formal succession
planning, Board appointment process and
talent pipeline management
• Enhanced reporting and flow of
governance information
• External validation of approach to risk
monitoring and assessment
• Preliminary alignment with TCFD
One of our values:
Learning and growing knowing
there is always progress to be
made.
50
CORPORATE GOVERNANCEThe Pebble Group plc Annual Report 2021 Our Group Board members have extensive experience and
are professionally active in roles other than at The Pebble
Group. They are provided with a monthly ‘Boardroom
Briefing’ covering a range of corporate governance issues,
such as: reports on corporate culture; recent cases on
directors and their responsibilities; and updates on
executive remuneration, ESG or climate related issues and
disclosure requirements. The Group Board is also given the
opportunity to keep in touch with relevant developments
through appropriate seminars and formal external training
courses to ensure the continued development of
knowledge, skill and capability. Fostering a culture of
continuous improvement is important to me and I will lead
in personal development though my own participation in
training and continued professional development.
In the year, the Group formalised and published its values,
included in which is our corporate governance strategy
centred around ensuring that our operations are conducted
with integrity, transparency and fairness.
We are proud of the work we have done to enhance our
governance and risk management processes and our
commitment to continuing to evolve these brings
excitement for our future. You can find more about our
values on the inside front cover.
As a Board we aim to lead by example, be authentic,
embrace our values and create an open and honest
environment, because we believe this establishes and
evolves effective risk management and effective decision-
making at all levels of our organisation. The Group Board
sees this as a key differentiator and has observed how this
serves to build trust with our clients and suppliers and
allows us to retain high-performing staff.
In adhering to these principles, the Company has applied
the Corporate Governance Code for Small and Mid-Size
Quoted Companies 2018 published by the Quoted
Companies Alliance (the ‘QCA Code’) and I believe that we
are in full compliance with this, which serves to mitigate and
minimise risk and add value to our businesses.
One of our values:
Enjoying the journey in a culture
of integrity, transparency and
fairness, where we are proud of
our past and excited by our
future.
This section of the Annual Report and Accounts outlines
how we have applied the principles of the QCA code during
the year and we take the opportunity to share with you the
many initiatives and activities that took place during 2021 to
ensure a strong and open dialogue with our shareholders,
particularly around how the Company is performing, to
ensure that the Group Board remains a well-functioning and
balanced team, and to enhance our governance structures
to ensure that they remain fit for purpose and support good
decision-making by the Group Board and its Committees.
We will continue to review and update our governance
framework and our approach as the Company continues to
grow and will update the Corporate Governance statement
in the AIM rule 26 section of the Company’s website.
Additional information is contained in our Section 172(1)
statement on pages 22-25.
Richard Law
Chair
22 March 2022
51
The Pebble Group plc Annual Report 2021 Our Governance Structure
Group Board structure and composition
My role as Chair of the Group Board is to be separate to,
and independent of, the Chief Executive and each of us has
clearly defined responsibilities. These, along with the terms
of reference for all the Committees of the Group Board,
can be found on the Investors section of the
Company’s website.
The Group Board comprises five Directors, two Executive
Directors being Christopher Lee and Claire Thomson and
three independent Non-executive Directors being myself,
Yvonne Monaghan and Stuart Warriner. The Group Board
believes that this combination ensures a clear balance of
responsibilities between the executive and the non-
executive functions, and that no individual (or small
group of individuals) can dominate the Group Board’s
decision- making.
GROUP BOARD COMPOSITION
2
1
2
Executive
Non-executive
Chair
Operating Boards and Group Executive Committee
structure and composition
The Group is organised so that each business has an
established Operating Board which meets monthly with its
own standing agenda, which includes business updates from
the heads of all key functions. Each Operating Board has a
‘Divisional Lead’ which is Ashley McCune (President,
Facilisgroup) and Karl Whiteside (Group MD, Brand
Addition), further details of whom can be found in the
senior executives’ biographies on page 66. Each Divisional
Lead, together with other key members of their Operating
Boards, report to the CEO on trading and performance
through Executive Monthly Meetings, and also through the
Divisional Lead’s membership of the Group Executive
Committee.
The Group Executive Committee is made up of the
Executive Directors of the Company, the Divisional Lead for
each of Facilisgroup and Brand Addition, the Group
Financial Controller, the Group Senior ESG Officer and the
Group General Counsel & Company Secretary. It meets
monthly, has its own terms of reference in place and
facilitates business updates, reporting, ESG, risk and
compliance matters, and the flow of information throughout
the Group to ensure the alignment of culture, business
ethics and standards and consistent good governance
across divisions.
The Operating Boards typically meet prior to the Group
Executive Committee meetings, which is before the Group
Board meetings and enables the Executive Directors to
provide the most up to date information possible to the
members of the Group Board.
ESG governance
The Group Board sets and approves Group ESG strategy
and reviews and approves the Group’s ESG report on an
annual basis, following consultation with the Group Senior
ESG Officer and Group General Counsel & Company
Secretary. The Group Board reviews progress against ESG
strategy every six months as part of the Group Board’s
strategy review meeting.
The Group Executive Committee includes an ESG update as
a monthly standing agenda item and ensures regular
communication and discussion of ESG strategy and progress
with the Divisional Leads and other members of the
Committee.
Facilisgroup and Brand Addition each have their own ESG
Committee or senior leader in place with responsibility for
implementing the Group’s strategy and approach to ESG.
They meet with the Group Senior ESG Officer on at least a
quarterly basis for guidance, to provide updates and to
ensure alignment with, and progress against, Group ESG
strategy.
ESG governance will be reviewed as part of the Group’s
alignment with TCFD reporting requirements during 2022.
For information on this, please see page 31 of the ESG
section of this report.
Through this governance structure, the Group Board
perpetuates an open, honest environment and its view of
the right ethical culture, to drive effective risk management,
governance practices and processes and effective decision-
making at all levels of the Group:
52
CORPORATE GOVERNANCEThe Pebble Group plc Annual Report 2021 Our Governance Structure
Chair of Group Board - Richard Law
Group Board - The Pebble Group plc
Audit
Committee
Remuneration
Committee
Nomination
Committee
CEO
Chris Lee
Facilisgroup
Executive Monthly
Meeting
Group Executive
Committee
Brand Addition
Executive Monthly
Meeting
Divisional Lead
Ashley McCune
Divisional Lead
Karl Whiteside
Operating Board
Facilisgroup
Operating Board
Brand Addition
Environmental, Social, and Governance
Risk and Compliance
Diversity, Equity & Inclusion
Group Board Committees
The Audit Committee
The Audit Committee, chaired by Yvonne Monaghan, has
primary responsibility for monitoring the integrity of the
financial statements of the Group and the scope, adequacy
and effectiveness of the Group’s internal financial controls
and internal control and risk management systems, to
ensure that the financial performance and prospects of the
Group are properly measured and reported on. The Audit
Committee receives reports from the Group’s management
and external auditor, PricewaterhouseCoopers LLP (PwC),
relating to the annual accounts and the accounting and
internal control environment in operation throughout the
Group. The Audit Committee determines and reviews the
Group’s risk profile, including the nature and extent of
significant risks that the Group is willing to take in achieving
its strategic objectives. Additional information on risk profile
can be found on page 45-49 . The Audit Committee also
provides channels of communication between the external
auditor and the Non-executive Directors. It reviews the
performance of the external auditor and makes
recommendations to the Group Board in relation to their
re¬appointment. The Audit Committee reports to the
Group Board on all these matters and typically meets three
times in each financial year. It met three times during 2021.
Richard Law and Stuart Warriner are the other members of
the Audit Committee. Further information can be found in
the Audit Committee Report on pages 67-70.
The Remuneration Committee
The Remuneration Committee, chaired by Stuart Warriner,
has primary responsibility to review the performance of the
Executive Directors and determine their total individual
remuneration packages (including on the granting of share
options) to ensure that they are, in a fair and responsible
manner, rewarded for their individual contributions to the
Group’s overall performance. The Remuneration Committee
also reviews the performance of other senior executives and
monitors and makes recommendations to the Group Board
on the level and structure of their remuneration. The
Remuneration Committee will retain, as necessary, external
remuneration consultants in support of its responsibilities.
The Remuneration Committee reports to the Group Board
on all these matters and will meet as and when necessary,
but typically four times in each financial year. It met four
times in 2021. In exercising this role, the members of the
Remuneration Committee have regard to QCA Code
53
The Pebble Group plc Annual Report 2021 Our Governance Structure
recommendations and, where appropriate, the QCA
Remuneration Committee Guide. The remuneration of
Non-executive Directors is a matter for the Chair and the
Executive Directors and no director shall be involved in any
decisions as to his or her own remuneration. Richard Law and
Yvonne Monaghan are the other members of the
Remuneration Committee. Further information can be found
in the Remuneration Committee Report on pages 71-79.
The Nomination Committee
As the Nomination Committee does not produce a separate
report, the significant matters considered since the 2020
Annual Report and Accounts are summarised here:
(i)
We discussed and introduced a formal Group policy on
Diversity, Equity and Inclusion (DEI) which the Committee
recommended to the Group Board for approval in
October 2021. The DEI policy promotes diversity of
ethnicity, gender, age, disability, education and socio-
economic backgrounds and sexual orientation. It also
recognises diversity of personal attributes as having
equal importance and aims to build teams that consists
of individuals who have a range of cognitive and personal
strengths. The DEI policy commitments include the
appointment of an Executive Sponsor for all DEI issues in
each business to ensure that DEI remains a firm priority
on the agenda and is taken account of in all appropriate
situations and decision-making. As Chair of the
Nomination Committee, I am taking an active role in
setting and meeting diversity objectives and strategies in
each business by including a commitment in the DEI
policy to meet annually with Executive Sponsors to
discuss DEI initiatives, ensure we have clear objectives
and to monitor DEI progress. Further the Group Board
will each year take a retrospective look back over the
preceding 12 months and ask itself the question, “How
has our commitment to DEI advanced over the year?”
The DEI policy was approved by the Group Board in
November 2021. An aim for the Nomination Committee
during 2022 is to develop and encourage reporting on the
policy, its objectives and linkage to Group strategy, then
work on how to formally monitor how the policy is being
implemented and progress on achieving its objectives.
Enhancement of the Group Board appointment process
for the recruitment of new Directors into a formal,
rigorous and transparent six steps process that is
designed to work hand-in-hand with the DEI policy.
It involves identification of business needs, profile
(ii)
54
establishment, search, selection and nomination,
followed by appointment and formal induction. The
Committee recommended the Group Board
appointment process to the Group Board and it was
approved in November 2021.
(iii) Introduction of a formal approach to succession planning,
designed to work hand-in-hand with the DEI policy and to
establish a process for ensuring that succession plans for
orderly succession to both the Group Board and senior
management positions are in place, developed and
maintained, via action through the Group Executive
Committee and activities within the businesses. The
Committee recommended the succession planning
approach and process, to be overseen by the Nomination
Committee, to the Group Board and it was approved in
November 2021. This includes:
a.
b.
c.
completion of succession matrix to include a risk
assessment for the risk of immediate loss of
Executive Directors, senior executives, members of
the Operating Boards and other key personnel;
internal talent identification amongst personnel by
including ‘Potential to Progress’ ratings in annual
appraisals for all mid-level management in the
businesses;
working with HR teams to support and encourage
training and development, to actively manage a
pipeline of diverse internal talent when identified;
d.
the introduction of a skills matrix tool for
Non-executive role evaluation and succession
planning to help identify skills gaps and to map the
existing skillset against possible requirements to
execute strategy and meet future challenges.
One aim for the Nomination Committee during 2022 is to
begin to build an active link to the DEI policy and start to
develop a diverse pipeline for succession. Each business
has been tasked with establishing a methodology on
activity to ensure a practical impact. Progress will be
reported to the Nomination Committee on an annual
basis. The aim is to ensure that succession to the Group
Board and senior management positions is based on
merit and objective criteria and promotes diversity of
ethnicity, gender, age, disability, education and socio-
economic backgrounds and sexual orientation.
(iv) In October 2021, the Committee reviewed the process
and assessment criteria for the annual Group Board and
Committee effectiveness review in advance of the
Group Board conducting the review in November 2021
to assess how it could be developed or improved.
On process, the Committee considered:
CORPORATE GOVERNANCEThe Pebble Group plc Annual Report 2021 a.
b.
trends of using digital board evaluation platforms/
soft ware/tools;
interviews outside of the Group Board meeting
itself; and
c. external review/third party facilitator.
On the assessment, the Committee considered:
a. sufficient linkage with the Group’s objectives;
b. development of individual director reviews;
c.
d.
development of a separate process to evaluate the
Chair; and
whether evaluation topics/criteria reflect
priorities, are fit-for-purpose and cover areas our
stakeholders really care about.
The Committee concluded that the process is fit for
purpose given the size, nature and complexity of the
Group Board and its Committees, the current stability
of the composition and the Group Board’s maturity.
However, the Committee updated the assessment
criteria to enhance the following areas to reflect the
QCAs list of characteristics of an ‘effective board’:
Group Board mix of skills, experience and knowledge;
Group Board independence; Group Board
understanding of the business; risk appetite and risk
management; demonstrating Group Board stewardship;
and role of Chair. A new section on Group Board
diversity was also introduced.
On Group Board structure, size and composition, in
November 2021 the Nomination Committee introduced
a process to consider Group Board requirements over
the next five years vs. current, using a director skills
matrix as a tool to assist in planning for future Group
Board needs in the context of the Group’s likely
expansion. This identified that potential future
opportunities were likely to be created as the Group
expands and the Group Board’s strategic plan was
updated to explore this further.
(v)
(vi) In November 2021, the Committee considered and
reviewed Group Board Committee membership and time
requirements of Non-executive Directors. It also
conducted a review of its own performance and
effectiveness as a committee over 2021. No changes were
recommended to the Group Board as a result, and the
Committee’s terms of reference were recommended to
the Group Board for re-approval without amendment.
(vii) During Q1 22 the Nomination Committee conducted a
performance evaluation, which considered the
independence of each Director and their knowledge,
skills and experience. It concluded that each Director
continued to make an effective and valuable
contribution to the Group Board, and that each
Director demonstrated a strong commitment to their
role and to the long-term success of the Group. The
Committee recommended to the Group Board that all
Directors should seek re-election by the Group’s
shareholders at the 2022 AGM.
Key governance policies
The Group has conducted a review of its key governance
policies during 2021, firstly to ensure that they remain up to
date and continue to reflect best practice, but also to
ensure that the Group’s aims, values and objectives are
cascaded and applied consistently through our businesses.
Certain new policies were also developed and implemented
to align with our ESG strategy.
The following key governance policies and processes are in
place across the Group:
• anti-bribery and corruption policy
• anti-slavery and human trafficking policy
• environmental, social and governance policy
• diversity, equity and inclusion policy
• data protection policy
• whistleblowing policy
Further information on the anti-slavery and human
trafficking policy, anti-bribery and corruption policy and
whistleblowing policy can be found in the Audit Committee
Report on pages 67-70.
During the year, the Group has also been focusing on the
development and enhancement of its governance polices
and processes. It will continue with the development, then
implementation, of the following in 2022:
• an overall Framework on Conduct, Ethics and Compliance
to overarch all policies and bring them together in a
coherent way;
• climate change policy;
• health, safety and well-being policy; and
• human rights policy.
Our Group General Counsel & Company Secretary and/or
our Group Senior ESG Officer are working on these policies
closely with the CEO and the Divisional Leads of
Facilisgroup and Brand Addition.
55
The Pebble Group plc Annual Report 2021 Our Governance Structure
Group Board and senior team diversity
We believe that a diverse and inclusive culture at the top of our organisation will
lead to better decision-making and ultimately to a better business and place to
work for our global workforce. Our approach to diversity, equity and inclusion is
explained on page 31 in the ESG section of this report.
The Group Board also believes that it has a desirable range of different skills,
experiences and backgrounds, further details of which can be found in the Group
Board biographies on pages 64-65. This diversity of experience has continued to
develop our businesses during the year, overseeing and ensuring focus on two key
objectives: the continued investment in our medium-term growth plan for
Facilisgroup with the delivery of our FY 21 milestones; and the execution of an
immediate and full recovery over FY 19 revenue levels in FY 21 for Brand Addition.
Details of progress against these objectives has been provided throughout the
Strategic Report on pages 2 -49.
GROUP BOARD MEMBERS
GROUP EXECUTIVE COMMITTEE MEMBERS
OPERATING BOARDS (AND THEIR DIRECT
REPORTS) AND GROUP EXECUTIVE
COMMITTEE
60%
Female
Male
40%
43%
57%
45%
55%
Female
Male
Female
Male
The Group Board has a good gender
balance as it comprises three male and
two female Directors.
We also have good gender
balance throughout the senior
teams within our businesses. Our
Group Executive Committee
consists of four female and three
male senior executives.
Collectively, our Operating Board
members and their direct reports,
together with our Group Executive
Committee, consist of 28 female and
23 male senior managers.
56
CORPORATE GOVERNANCEThe Pebble Group plc Annual Report 2021 Corporate governance statement
Delivering long-term growth.
The Directors believe that the QCA Code which sets out best practice corporate
governance arrangements for small and mid-sized quoted companies, particularly
those on AIM, remains most appropriate for the Company.
This section of the Annual Report and Accounts outlines how we have applied the ten principles of the
QCA Code during the year.
Principle 1:
Establish a strategy and
business model which
promotes long-term value
for shareholders.
Commentary
The Group Board has a clear strategy for delivering long-
term shareholder value. The Chair and CEO work closely to
ensure the message and direction is strong and understood.
The Group Board held its annual strategy event over two
days in October 2021 to discuss its ongoing vision for the
Group, its direction and strategic priorities. The output
focussed on:
• driving increased scale;
• our people and team structures;
• accelerating our long-term growth aspirations.
Cross-reference
to detail
The Company’s
business model and
strategy are
detailed in the following
sections of this Report:
• at a glance on page 4
• the Chair’s report on
page 12
• the CEO’s review on
page 14
• throughout the
Strategic Report on
pages 2-49
• strategy in action on
page 17
Principle 2:
Seek to understand and
meet shareholder needs
and expectations.
The Executive Directors have primary responsibility for
contact with shareholders and enjoy maintaining an active
and frequent dialogue. They provide regular Group Board
updates on shareholder meetings and provide the
Non-executive Directors with all reports and feedback
issued by analysts to support their understanding of the
view of the Group by the investment community.
The Directors met with shareholders during the year as part
of a planned programme of investor relations and when
requested made themselves available for meetings.
Shareholder engagement sessions in 2021 were well
attended and received positively.
The Group Executive Committee discusses shareholder
needs and expectations in the context of upcoming market
announcements and other touchpoints at every monthly
meeting and reviews investor feedback received following
each of those touchpoints.
The 2022 AGM will repeat the arrangements established in
2021 to ensure maximum opportunity for shareholder
engagement in that forum by enabling shareholders to view
the meeting via a live webcast and participate via live Q&A
functionality. With the future needs and expectations of our
shareholders in mind, the Company amended its Articles of
Association in 2021 to permit ‘hybrid’ general meetings.
Should you wish to request a meeting or submit a question,
please contact investors@thepebblegroup.com.
How we engage
with shareholders is
detailed in the
Stakeholder Engagement
section on page 21.
Investor
presentations can
be found on the
Company’s website.
Information on
‘hybrid’ meeting
provisions in the Articles
of Association can be
found on the Company’s
website.
57
The Pebble Group plc Annual Report 2021 CORPORATE GOVERNANCE
Corporate governance statement
Principle 3:
Take into account wider
stakeholder and social
responsibilities and
their implications for
long-term success.
Our values identify the importance of all our stakeholders
and our commitment to social responsibilities,
demonstrating how integral these matters are to the
Group’s culture.
The Group works consistently to strengthen the
relationships it has with all of its stakeholders.
Principle 4:
Embed effective risk
management, considering
both opportunities and
threats, throughout the
organisation.
The Group Board uses a considered approach to risk
management and acknowledges the need to accept a
certain level of strategic risk to achieve capital growth
for shareholders.
Risk management is embedded from the Group Board to the
Audit Committee, to the Group Executive Committee, to the
Operating Boards. There is an effective process for identifying,
assessing and managing risks in this framework. The Audit
Committee provides the assurance that the risk management
and related control systems in place are effective.
Our values are on
the inside front
cover.
Information on how
our business model
identifies key resources
and relationships is
contained on page 6.
How the Company
obtains stakeholder
feedback and the output
of that is in the
Stakeholder Engagement
section on pages 18-21.
Approach to wider
stakeholder and
social responsibilities is
set out in our Section
172(1) statement on
pages 22 - 25.
The risk
management
framework is explained,
together with details of
the key risks and
opportunities facing the
Group and related
mitigating actions to
manage these risks, on
pages 45-49.
The Audit
Committee report
on page 67 explains how
it oversees the
effectiveness and
integrity of the internal
control systems.
58
The Pebble Group plc Annual Report 2021 Principle 5:
Maintain the Board as a
well-functioning,
balanced team led by the
Chair.
The Group Board has strong independent representation, a
good balance between the Executive and the Non-executive
Directors and a good gender balance.
Executive Directors dedicate a full-time commitment to the
Company. Non-executive Directors provided a strong time
commitment in 2021, allocating sufficient time to effectively
discharge their responsibilities. This included the
preparation for, attendance at, and dealing with actions
arising from all Group Board and Committee meetings,
which had full attendance.
The Chair and Company Secretary keep Group Board
processes under review to develop and formalise, including
conducting detailed annual planning and agenda setting.
This results in the Group Board and its Committees
receiving high quality, accurate and timely information
on a regular basis.
The Company is satisfied that the current Group Board is
sufficiently resourced to discharge its governance
obligations on behalf of all stakeholders and will consider
the requirement for additional Non-executive Directors as
the Company fulfils its growth objectives.
The 2021 Annual Group Board Effectiveness review
highlighted the role of the Chair, the relationship between
the Chair and CEO, the effective functioning of the Group
Board and its strengths as a balanced team as particular
strong points.
Group Board
structure and
composition details are
on page 52.
Detailed
information on
Group Board and
Committee meeting
frequency and
attendance can be found
in the Group Board of
Directors section on
pages 64-65.
Information on how
the Nomination
Committee actively
reviewed Group Board
structure, size and
composition in 2021, is
on pages 54-55.
Details of the
Nomination
Committee update
to its Group Board
effectiveness review
criteria in 2021 (to ensure
it remained fit-for-
purpose) is on
pages 54-55.
For full details of
the Annual Group
Board Effectiveness
review 2021 results, see
Principle 7 below.
59
The Pebble Group plc Annual Report 2021 Corporate governance statement
Principle 6:
Ensure that between
them the Directors have
the necessary up-to-date
experience, skills and
capabilities.
Director’s skills and
experience are
detailed on pages 64 and
65 and also on the
Company’s website.
For full details of
the results of the
2021 Annual Group Board
Effectiveness review, see
Principle 7 below.
For full details of
the Director
performance evaluation
conducted by the
Nomination Committee in
Q1 22, see pages 54-55.
The use of
professional adviser
services has been
set out in the reports of
each of the Group
Board’s Committees
contained in this Report,
where applicable.
All Directors are professionally active. Each has
demonstrated that they possess the appropriate skills,
capabilities and experience for the roles they perform at
the Company, including as members of the Group Board
and its Committees. Group Board experience is extensive
and varied, and the mix of personal qualities (including
gender balance) contributes to the Group Board’s ability as
a whole to deliver the Company’s strategic objectives.
The 2021 Group Board effectiveness review assessed the
performance of the individual Directors and found no
issues. Further, all Directors were re-elected at the 2021
AGM. It is the Company’s intention to continue to subject all
Directors to re-election annually.
A Director performance evaluation by the Nomination
Committee in Q1 22 concluded that each Director
continued to make an effective and valuable contribution to
the Group Board, and that each Director demonstrated a
strong commitment to their role and to the long-term
success of the Company.
The Company Secretary acts as adviser to the Chair and the
Group Board, with responsibility for ensuring effective
Group Board processes are followed. Monthly ‘Boardroom
Briefings’ are circulated to update Directors on topical
issues, such as: corporate culture; Directors and their
responsibilities; executive remuneration, ESG or climate
related issues and disclosure requirements.
The Company’s external auditor, PwC, provides regulatory
updates and briefings to the Group Board three times per
year on relevant corporate reporting developments or
similar ‘hot topics’ for the year under review.
The Company’s NOMAD provides annual Group Board
training and a briefing pack on the AIM Rules, Market Abuse
Regulation, managing price sensitive information and other
regulatory updates.
The Group Board is given the opportunity to keep in touch
with relevant developments through appropriate seminars
and formal external training courses facilitated by the
Company Secretary to ensure continued development of
knowledge, skill and capability.
Fostering a culture of continuous improvement is important
to the Chair, who will lead in personal development by
participating in training and continued professional
development.
The Group Board and Committees have access to
professional advisors at the Company’s expense, if
necessary.
60
CORPORATE GOVERNANCEThe Pebble Group plc Annual Report 2021 Principle 7:
Evaluate Board
performance based on
clear and relevant
objectives, seeking
continuous improvement.
The Group Board, led by the Chair,
fosters a culture of continuous
improvement to maximise the
effectiveness of board practices. It
performs an annual formal assessment
of the effectiveness of the Group
Board and its performance as a unit as
well as that of its Committees and the
individual Directors.
The process is conducted internally by
the Group Board and not on an
anonymous basis, to reflect the open
culture and nature of the Group
Board:
• The Chair of the Group Board is
responsible for and leads the process
with assistance from the Company
Secretary to ensure that all Directors
are actively engaged.
• Completion of a written
questionnaire by all Directors, covers
‘Composition and Process’ and
‘Behaviours and Activities’.
• A written report from the Chair on
the results is tabled for full Board
discussion.
• Directors’ evaluation of the results is
facilitated by the Company Secretary.
• Actions are included and followed-up
as part of standard Group Board
process.
The Nomination Committee reviews
the Group Board effectiveness
process annually to enhance and
improve the exercise. The process
followed in 2021 was as per the above,
which was considered to remain
fit-for-purpose given the size, nature
and complexity of the Group Board
and its Committees, current stability of
composition and governance maturity.
However, the questionnaire was
enhanced to reflect the QCA’s list of
characteristics of an ‘effective board’.
Details of the Nomination Committee
update to its Group Board effectiveness
review criteria in 2021 (to ensure it remained
fit-for-purpose) is on page 54.
Detailed information on how the
Nomination Committee actively reviewed
Group Board structure, size and composition
in 2021 can be found on page 55.
Results and recommendations of
November 2021 Review
Particular strengths highlighted:
• tone from the top, the role of the
Chair and strong positive relationship
with CEO
• Group Board independence,
knowledge and experience,
attendance and active contribution at
meetings, Group Board operation as
a team in an accountable, open and
transparent environment and time
commitment of Non-executive
Directors
• Group Board access to, and good use
of, appropriate data to monitor the
Company’s performance
• Group Board creation of a
performance culture that drives value
creation without excessive risk
exposure
• DEI policy
• crisis response capabilities and crisis
management plans
Recommendations:
• Group Board to consider attendance
of the Chair at a selection of investor
meetings for shareholder availability
and visibility
• CEO to explore enhanced ESG
resource within our operations to
shape ESG priorities and further
develop ESG strategy in preparation
for possible future formal evaluation
of ESG/Sustainability governance as
part of the evolving Group Board
Effectiveness review process
Progress against previous
recommendations
The Group Board has addressed the
areas for development identified in the
first performance review as outlined in
the Company’s 2020 Annual Report
and Accounts. In particular:
• The Nomination Committee has
introduced a process to consider
Group Board requirements over the
next five years vs. current using a
director skills matrix as a tool to
assist in planning for future Group
Board needs in the context of the
Company’s likely expansion.
Detailed information on how the
Nomination Committee has introduced a
formal approach to succession planning is set
out on page 54.
• The Nomination Committee has
introduced a formal approach to
succession planning and established a
process for ensuring that succession
plans are in place for orderly
succession to both the Group Board
and senior management positions.
• There is formal annual focus and
oversight on crisis management and
disaster recovery at Group Board
level, particularly in the areas of IT
and cyber security and data security
risks due to detailed board planning
by the Chair and Company Secretary.
Divisional leads of Facilisgroup and
Brand Addition and IT senior
management presented to the Group
Board in September 2021 on disaster
recovery and business continuity
plans. As a result, crisis response
capabilities and crisis management
plans were highlighted as a particular
strength in the 2021 Group Board
effectiveness review.
• The Remuneration Committee takes
into account periodic external
comparisons to examine current
market trends and practices at
equivalent roles in similar companies.
The Remuneration Committee also
appoints external consultants where
appropriate, to provide advice.
During Q4 21 such a periodic review
took place.
61
The Pebble Group plc Annual Report 2021 Corporate governance statement
responsible for ensuring the
implementation and communication of
policies and ensuring that any Group
policies are reflected in Brand
Addition’s and Facilisgroup’s respective
equivalent local policies.
Any non-compliance with policies is
reported by the Divisional Lead of
Facilisgroup and Brand Addition via the
Group Executive Committee to the
relevant Group Board Committee and
ultimately the Group Board for
monitoring on an ongoing basis.
In October 2021, the Company
published its first ESG report in which
it set out its ESG strategy and the
framework which underpins its
approach to ESG.
During 2021, the Group has also been
focusing on the development and
enhancement of its governance polices
and processes and will continue with
its development, then implementation
of the same in 2022.
For details on the upcoming policies
under development for introduction in
2022, please see page 55.
Principle 8:
Promote a corporate
culture that is based on
ethical values and
behaviours.
During 2021, the Group formally
adopted its values. They shape our
culture, define who we are, what we
do and how we act. We believe they
demonstrate our commitment to
ethical behaviour.
The policies assist in embedding a
culture of ethical behaviour for all
employees. In addition, we seek to
work with agents, contractors,
business partners and other third
parties who work with us or on our
behalf, who share our zero-tolerance
approach to certain activities e.g.,
bribery and corruption, and we expect
them to behave consistently with the
provisions of certain of our policies.
For details of the key governance policies
in place across the Group, please see
page 55.
For details of our values please see inside
front cover.
Information on monitoring compliance
with certain policies can be found in the
Audit Committee Report on pages 67-70.
The Group Board also monitors the
state of culture and employee
satisfaction at present by including
minutes of the Brand Addition
employee forum for noting at each
Group Board meeting.
The CEO in conjunction with the
Company Secretary or the Group
Senior ESG Officer is responsible for
reviewing the suitability, adequacy and
effectiveness of the policies and for
making improvements as appropriate.
The HR Department in each business is
For information on how the Company’s
culture is consistent with its objectives,
strategy and business model, please see the
Strategic Report pages 2-49.
The Group Board monitors and
promotes an ethical corporate culture
by having documented key governance
policies in place which are reviewed
and re-approved annually to ensure
that they remain up to date and
continue to reflect best practice. It is
extremely important to the Group
Board that policies or practices not
only align with best practice but are
designed in a meaningful way and fit
with our culture and way of working.
Our assessment of our principle risks and
uncertainties reflects our ethical culture
and balanced risk appetite. For details, please
see pages 45-49.
62
CORPORATE GOVERNANCEThe Pebble Group plc Annual Report 2021 Principle 9:
Maintain governance
structures and processes
that are fit for purpose
and support good
decision-making by the
Board.
The Group’s governance structures have evolved and
developed since IPO, so that they fit naturally with our
culture and way of working. They will remain under review
during 2022 and will evolve where required in line with the
Company’s planned growth.
The role of each member of the Group Board is clearly
defined. The Chair is responsible for the operation of the
Group Board and for corporate governance within the
Group. The CEO is responsible for proposing the strategic
direction of the Group Board and implementing the strategy
once approved. The CFO is responsible for all financial
matters and engagement with shareholders.
The Group’s
governance
structures are explained
on pages 52-56.
More detail on the
Group Board roles
and responsibilities can
be found on the
corporate governance
section of the
Company’s website.
The Group Board reviews its formal schedule of matters
reserved for the Group Board and each Committee reviews
its terms of reference on an annual basis to ensure they
remain fit for purpose and support good decision-making.
The roles of the
Group Board’s
Committees are
described in detail on
pages 53-55.
The Group Board and its Committees operate within formal
processes and timetables facilitated by the Company
Secretary. Each meeting has an agenda, a Group Board
reporting template (with Section 172 guidance), appropriate
and timely information is circulated in good time prior to
each meeting, and meetings are planned to ensure that
appropriate time is allotted for open and in-depth
discussion. All actions arising are formally tracked, followed
up by the Company’s management and reported. The Chair
and Company Secretary keep Group Board processes under
review to develop and formalise, including conducting
detailed annual planning and agenda setting which aligns
with the terms of reference. This results in the Group Board
and its Committees receiving high quality, accurate and
timely information on a regular basis which supports good
decision-making by the Directors.
The detailed responses to the principles of the QCA Code in
this section of the Report, in conjunction with the related
information throughout this Report, communicates to
shareholders and other relevant stakeholders how the
Company is governed.
In October 2021, the Company published its first ESG
Report in which it set out its ESG strategy and the
framework which underpins its approach to ESG.
The schedule of
matters reserved
for the Group Board
and each Committee’s
terms of reference can
be found on the
Company’s website
See the details
included at
Principle 2 above as to
how the Company
maintains an active
dialogue with its
shareholders on
Company performance
through a planned
programme of investor
relations.
A range of
Company
information is included
on the Company’s
website.
Further
information can be
requested from
investors@
thepebblegroup.com
63
Principle 10:
Communicate how the
Company is governed
and is performing by
maintaining a dialogue
with shareholders and
other relevant stakeholders.
The Pebble Group plc Annual Report 2021 Board of Directors
Leading with experience.
KEY TO COMMITTEE MEMBERSHIP
A Audit Committee
R Remuneration Committee
N Nomination Committee
Committee Chair
64
Richard Law
Chair
Tenure
2 years 4 months
Experience
Richard has broad senior management and
Board experience of business, engineering,
corporate finance, technology and
governance spanning 40 years. Richard
retired as Chief Executive Officer of
AIM-quoted GB Group plc in 2017, having led
the company from a market capitalisation of
£5 million to £500 million, and took up a
portfolio role investing in and chairing both
public and private companies. As well as
chairing The Pebble Group plc, Richard is
currently the Chairman of Vypr (a product
intelligence and performance accelerator)
and Chairman designate of SmartSearch
(a provider of online compliance solutions).
Skills brought to the Group Board
• Extensive financial expertise
• Extensive and diverse leadership experience
• Sound practical understanding of
corporate governance
• Deep appreciation of investor sentiment
• Strong understanding of ecommerce and
data solutions
External appointments
• Non-executive Director and Chairman at
Vypr Validation Technologies Limited
• Non-executive Director at Gudtouch Limited
• Chairman designate Smart Credit Limited
(t/a SmartSearch) – part time
Committee membership
A R N
Meetings attended in 2021
Board meetings
Audit Committee meetings
Remuneration Committee meetings
Nomination Committee meetings
11/11
3/3
4/4
3/3
Christopher (Chris) Lee
Chief Executive Officer (CEO)
Tenure
22 years
Experience
Chris led the private equity backed
management buyout of Brand Addition in
2012 and 2017 and the acquisitions of
Gateway CDI and Facilisgroup in 2016 and
2018 and the listing of The Pebble Group plc
onto AIM in 2019.
Skills brought to the Group Board
• Sound, proven leadership skills and a
considered strategic approach, developing
the Group’s capabilities for sustainable
growth
• Detailed understanding of the market and
sector with significant knowledge of
commercial, client and operational
matters
• Successful transaction and M&A
experience
• Client and supplier relationship
management, contracting and negotiations
• A thorough understanding of stakeholder
priorities including the development of the
senior executives and ESG issues
Committee Membership
• Group Executive Committee
Meetings attended in 2021
Board meetings
11/11
Group Executive Committee meetings 9/9
CORPORATE GOVERNANCEThe Pebble Group plc Annual Report 2021 Claire Thomson
Chief Financial Officer (CFO)
Tenure
14 years
Experience
Claire has led the finance, banking, legal and
compliance aspects of the businesses which
now comprise the Group for over 13 years,
taking the role of Chief Financial Officer
following the management buyout in 2012.
Claire is a qualified Chartered Accountant and
prior to joining the Group, spent 11 years in
audit at PricewaterhouseCoopers, having
joined in 1997. Claire has a BA Hons degree in
English and American Literature from the
University of Manchester.
Skills brought to the Group Board
• Extensive finance, financial reporting and
financial management expertise
• Sound, proven leadership skills
• Wide in-depth knowledge of each
business area
• Successful transaction and M&A
experience
• Significant experience of effective risk
management and internal controls
• Investor relations
External appointments
• Director at Cheadle Hulme School
Committee Membership
• Group Executive Committee
Yvonne Monaghan
Independent Non-executive
Director and Senior Independent
Director
Tenure
2 years 4 months
Experience
Yvonne has been the Chief Financial Officer
of Johnson Service Group PLC since 2007 and
played an important role in returning the
company to a growth strategy, managing a
number of acquisitions and disposals. She was
a Non-executive Director of NWF Group plc
from 2013 until she stepped down from this
role in September 2020.
Yvonne is a qualified Chartered Accountant
and spent five years in audit at Deloitte
Haskins & Sells, before joining Johnson Service
Group PLC in 1984. Yvonne has a BSc Honours
degree in Pharmacology and Physiology from
the University of Manchester.
Skills brought to the Group Board
• Extensive financial and financial reporting
expertise
• Sound practical understanding of
corporate governance
• Significant understanding of audit
processes, risk management and controls
• Deep appreciation of investor sentiment
External appointments
• Chief Financial Officer of Johnson Service
Group PLC
• Elected to the CBI North West Regional
Council with effect from 1 January 2021
Stuart Warriner
Independent Non-executive
Director
Tenure
2 years 4 months
Experience
Stuart has extensive corporate finance
experience across a range of sectors,
having spent over 30 years at
PricewaterhouseCoopers where he was a
partner in its corporate finance business.
Stuart has an MA in Economics from the
University of Cambridge and is a qualified
Chartered Accountant.
Skills brought to the Group Board
• Expertise in M&A
• Track record in advising Boards including
on strategy and shareholder value
• Sound practical understanding of
corporate governance
External appointments
• Senior Advisor at Houlihan Lokey
• Non-executive Director of strategy and
communications agency Lodestone
Oxford Limited
Committee membership
A R N
Committee membership
A R N
Meetings attended in 2021
Group Board meetings
Meetings attended in 2021
Group Board meetings
11/11
Group Executive Committee meetings 9/9
Audit Committee meetings
Remuneration Committee meetings
Nomination Committee meetings
Meetings attended in 2021
Group Board meetings
Audit Committee meetings
Remuneration Committee meetings
Nomination Committee meetings
11/11
3/3
4/4
3/3
11/11
3/3
4/4
3/3
65
The Pebble Group plc Annual Report 2021
Senior Executives
Divisional Leads
Lucy Penfold
Group General Counsel &
Company Secretary
Tenure
1 year, 3 months
Experience
Prior to joining The Pebble Group, Lucy had
13 years’ experience as in-house legal counsel
at AXA UK plc where she specialised in
corporate and commercial law and acted for
the group’s various UK subsidiaries, including
advising on a number of acquisitions, disposals,
re-organisations and corporate integrations.
Whilst at AXA UK, Lucy also gained experience
of company secretarial support, corporate
governance and risk management whilst in her
role as Assistant Company Secretary. Prior to
that, Lucy spent two years practicing
corporate law as an associate at Olswang LLP,
where she also trained for two years and
qualified as a solicitor in 2005. Lucy has a BA
Hons degree in Accountancy & Law from the
University of Manchester.
Skills
• M&A, corporate law and group
re-organisation
• Commercial contract drafting and
negotiation
• Corporate governance
• Risk management
Committee membership
• Group Executive Committee
Meetings attended in 2021
Group Executive Committee meetings 8/9
Ashley McCune
President, Facilisgroup
Karl Whiteside
Group MD, Brand Addition
Tenure
15 years
Tenure
4 years
Experience
Ashley oversaw the finance, operations and
marketing aspects of Facilisgroup as a
senior leader for over 10 years. She was
appointed President of Facilisgroup in
2020, following the acquisition by The
Pebble Group in 2019 and departure of the
legacy owners. Ashley has 18 years of
experience in the promotional products
industry with experience in both the
distributor and technology arenas. She has
a BS degree in Business from Southern
Illinois University.
Skills
• Strong and extensive industry and sector
knowledge
• Business and senior team leadership
• Strategy development
• Operational management
• Partner relationship management
• Negotiations
• Organisational development
• Experience of organic growth
Board and Committee membership
• Group Executive Committee
Meetings attended in 2021
Group Executive Committee meetings 8/9
Experience
Karl has led the US division of Brand
Addition since 2017. Prior to joining Brand
Addition, Karl led supply chain and logistics
teams throughout North America as well as
inside sales, sourcing, and billing teams for
Staples Promotional Products for 10 years.
Before joining the creative merchandise
industry, Karl spent time in National
Account Sales roles with Newell Brands and
Samsonite. Karl has a BS degree in
marketing from Truman State University.
Skills
• Business strategy planning and execution
• Operational and efficiency management
• Extensive industry and sector knowledge
• Executive leadership and mentoring
• Management of global teams
• Risk management and supply chain
strategy planning
Board and Committee membership
• Group Executive Committee
Meetings attended in 2021
Group Executive Committee meetings 9/9
66
CORPORATE GOVERNANCEThe Pebble Group plc Annual Report 2021 CORPORATE GOVERNANCE
Audit Committee report
Monitoring the quality
of internal controls.
Dear shareholder,
I am pleased to present the Audit Committee Report for
the year ended 31 December 2021.
Composition and experience of the Audit Committee
I am Chair of the Committee which consists of all three
independent Non-executive Directors (Stuart Warriner,
Richard Law and myself) and is supported by Lucy Penfold
as Company Secretary. All three Non-executive Directors
are qualified chartered accountants, with considerable
business experience in senior financial and operational
roles, including knowledge of financial markets, as detailed
in the Group Board biographies on pages 64-65. All
members of the Committee are regarded as having recent
and relevant experience.
The Committee meets three times per year, including once
at the planning stage before the external audit and once
after the external audit at the reporting stage, to facilitate
discussions relating to the financial statements and internal
controls of the Group. The meetings are attended by the
CEO and CFO, as well as the external auditor, PwC. In 2021
all three meetings had full attendance. Additionally, the
Committee meets the external auditor at least once per
year without executive management present, to discuss the
auditor’s remit and any issues arising.
Responsibilities of the Audit Committee
Throughout the year, the Committee continued to fulfil its
duties on behalf of the Group Board. It has an established,
structured agenda closely aligned to the Group’s reporting
cycle.
The responsibilities of the Committee are defined by the
Terms of Reference which can be viewed on the Company’s
website. These include primary responsibility for:
• reviewing the effectiveness of the Group’s internal
controls, including review of the scope and adequacy of
the Company’s processes and controls in respect of
whistleblowing and anti-bribery;
67
The Pebble Group plc Annual Report 2021 CORPORATE GOVERNANCE
Audit Committee report
• monitoring and reviewing the effectiveness of the Group’s
• appropriateness of the carrying value of goodwill,
internal audit function;
• considering the review of material business risks and
reviewing internal control processes to identify and
monitor risks;
• monitoring the integrity of the Group’s financial statements
and the external announcements of the Group’s results,
including reviewing, and challenging where necessary,
significant financial reporting issues and judgements which
they contain;
• advising on the clarity of disclosures and information
contained in the Annual Report and Accounts and giving an
opinion to the Group Board on whether the Annual Report
and Accounts are fair, balanced and understandable;
• ensuring consistency in application of and compliance with
applicable accounting standards; and
• overseeing the relationship with the external auditor
including recommending approval of their appointment
and approving their remuneration, reviewing their reports
and ensuring their independence is maintained.
The Audit Committee reports to the Group Board on all
these matters.
Evaluation of the effectiveness of the Audit
Committee
To ensure that it is operating at maximum effectiveness, the
Committee used output of the formal Group Board
Effectiveness review detailed on page 61 to review and
evaluate its own performance, constitution and Terms of
Reference during Q4 21. It concluded that the Committee
was operating effectively, and no action or changes were
required to be recommended to the Group Board. No
issues arose from the Terms of Reference which were
re-approved by the Group Board without amendment.
Significant matters considered in relation to the
financial statements
At the request of the Group Board, the Audit Committee
considered whether the 2021 Annual Report and Accounts
were fair, balanced and understandable and whether they
provided the necessary information for Shareholders to
assess the Group’s performance, business model and
strategy. The Committee were satisfied that, taken as a
whole, the 2021 Annual Report and Accounts are fair,
balanced and understandable.
The Audit Committee assesses whether suitable accounting
policies have been adopted and whether appropriate
estimates and judgements have been made by
management. The Committee also reviews accounting
papers prepared by management, and reviews reports by
the external auditor. The specific areas reviewed by the
Committee during the year were:
• review of the capitalisation of software development
costs;
68
intangibles and investments;
• accounting for supplier contributions;
• Alternative Performance Measures; and
• going concern assessment.
Alternative Performance Measures (APM’s)
Throughout the Annual Report and Accounts we refer to a
number of APM’s. These are used by the Group to provide
additional clarity to the Group’s financial performance and
are used internally by management to monitor business
performance, in its budgeting and forecasting and also for
determination of Directors’ and senior team remuneration.
The Committee is aware that APM’s are non-IFRS measures.
APM’s used by the Group are as follows:
• Adjusted EBITDA which means operating profit before
depreciation, amortisation, share-based payments charge
and exceptional items
• Adjusted operating profit which means operating profit
before amortisation of acquired intangible assets,
share-based payments charge and exceptional items
• Adjusted profit before tax which means profit before tax,
amortisation of acquired intangible assets, share-based
payments charge and exceptional items
• Adjusted Earnings which means profit after tax before
amortisation of acquired intangible assets, share-based
payments charge and exceptional items
• Adjusted earnings per share which means Adjusted
Earnings divided by a weighted average number of shares
in issue
• Adjusted operating cash flow which is calculated as
Adjusted EBITDA less movements in working capital, capital
expenditure and lease payments
The Committee considers the APM’s, all of which exclude
the effect of non-recurring items or non-operating events,
provide useful information for Shareholders on the
underlying performance of the Group. The Committee is
satisfied that where APM’s are used, they are presented
with equal prominence to the statutory figures.
External audit
The Audit Committee has responsibility for the
recommendation for re-appointment and deciding the
remuneration of the Group’s external auditor and satisfying
itself that they maintain their independence regardless of
any non-audit work performed by them.
During the year, the Group adopted a policy on the supply
of non-audit services by its external auditor, which ensures
the Group is compliant with the Financial Reporting
Council’s (FRC) Ethical Standards. The Group has adopted
the FRC’s “Whitelist” of permitted non-audit services, and
in relation to the provision of such services, the Audit
Committee is responsible for approving all non-audit
services that are not deemed trivial. The Audit Committee
The Pebble Group plc Annual Report 2021 will apply judgement in making such decisions, specifically in
relation to threats to independence and objectivity resulting
from the provision of such services and any safeguards in
place to eliminate or reduce these threats.
The total fees payable to the Group’s external auditor in
respect of the year under review amount to £210,500
(FY 20: £233,0001). No non-audit services were provided in
FY 21 (FY 20: £nil).
One of the principal duties of the Audit Committee is to
make recommendations to the Group Board in relation to
the appointment of the external auditor. PwC has been the
Company’s external auditor for many years and in line with
best practice guidance as a listed plc is required to rotate
the Senior Statutory Auditor (audit engagement partner)
responsible for the Group and subsidiary audits every five
years. The Group’s current Senior Statutory Auditor was
identified as such in October 2020.
The respective responsibilities of the Directors and external
auditor in connection with the Group financial statements are
explained in the Statement of Directors’ Responsibilities on
page 84 and the Auditor’s Reports on pages 85-89.
Review of external auditor’s effectiveness
The Committee reviewed the external auditor’s
performance and independence, by considering the
qualifications, expertise and resources of PwC and its
objectivity on an ongoing basis throughout the year. This
was done by considering the following:
-
the views of the Executive Directors;
- responses from PwC to questions from the Committee;
-
-
the audit findings reported to the Committee, including
PwC’s report on internal quality procedures; and
the relationship with PwC as a whole, to confirm there
are no relationships between the external auditor and
the Company other than in the ordinary course of
business which could adversely affect independence and
objectivity.
Furthermore, during the year, the Group formally adopted a
policy for the appointment of former employees of the
external auditor, which requires written approval from the
Chair, CFO and Head of the Audit Committee, should the
Group wish to hire any employee who has been involved in
the audit within the last two years. No such appointments
have been made during the year.
Based on the reviews performed, the Committee is satisfied
that the external audit process has operated effectively,
and PwC continued to bring independence and prove
effective in its role as external auditor.
Internal control and risk management
As explained in more detail in the Risk Management section
of the Strategic report on page 45, the Committee
supports the Group Board in reviewing the Group’s risk
management methodology and the effectiveness and
integrity of the Company’s internal control and risk
management systems. Regular internal control updates are
provided to the Committee, which include reviewing and
updating the nature and extent of principal risks and
uncertainties faced by the Group contained in the Group’s
risk register and assessing the mitigating actions in place
and updates to action plans agreed in previous meetings.
The Committee discussed and reviewed the Group’s risk
register twice in FY 21, focusing on climate change, the
pandemic, cyber security and the corporate criminal
offence. On each occasion it concluded that all risks and
opportunities had been appropriately identified and
recommended the Group’s risk register to the Group Board
for approval.
Internal audit
On an annual basis, the Committee considers and approves
the proposed annual internal audit and risk plan for the full
year. The Committee is kept up to date by the CFO and the
Group Financial Controller on progress against the Group’s
internal audit and risk plan.
The Committee considers annually whether there is a need
for a separate internal audit and risk function and makes a
recommendation to the Group Board accordingly. The
Group does not currently have a formal internal audit
function. Targeted reviews and visits to operations are
performed by the Head Office Finance team, which is
independent of the business operations and which
comprises wholly of qualified accountants. The team is
responsible for reviewing and reporting on the effectiveness
of internal controls and risk management systems. This
approach is considered appropriate and proportionate for
the size of the Group’s operations and does not affect the
work of the external auditor.
Risk and compliance policies
In line with the theme of trust, ethics, transparency and
delivery of good corporate governance, the responsibility of
the Audit Committee in the management and
communication of risks and internal controls extends
beyond matters of financial, operational and strategic risk.
As such, the Audit Committee considers the Company’s
attitude towards areas such as ethics, anti-bribery,
corruption, modern slavery, market abuse prevention and
whistleblowing.
1 Audit related services in FY 20 included £50,000 of over-runs agreed by the Committee in respect of the FY 19 audit. This was explained in the Annual Report and Accounts
2020.
69
The Pebble Group plc Annual Report 2021 Audit Committee report
During Q4 21, the Committee conducted a review of the
following Group level risk and compliance polices adopted
at IPO to ensure that they were up to date and remained fit
for purpose. Where required, these were updated to
reflect best practice and all were recommended to the
Group Board for approval:
• Anti-bribery and corruption policy - the zero-tolerance
approach to bribery and corruption outlined in this policy
reflects the Group’s commitment to act honestly,
professionally, fairly and with integrity in all business
dealings and relationships. This policy is designed to
ensure adherence to the provisions of the Bribery Act
2010 and to take account of “Business Principles for
Countering Bribery” published by Transparency
International. This also covers corporate gifts and
hospitality, and appropriate business ethics. Compliance
with this policy is confirmed annually by the Group’s
management teams.
• Whistleblowing policy – the support and encouragement
provided to employees and stakeholders to raise issues or
concerns in respect of conduct within the organisation
that could fall below expected standards without fear of
recrimination, victimisation or suffering a disadvantage of
any kind as outlined in this policy reflects the Group’s
commitment to high standards of honesty, openness,
integrity and accountability. This policy promotes a culture
of openness and ensures that everyone knows how to
raise a concern. Any matters raised through the
whistleblowing process are reported to the Committee.
Where a matter is raised, a proportionate investigation is
undertaken by independent management with support and
guidance from the Committee as necessary. The Group is
pleased to report that no incidents were reported during
the year.
• Anti-slavery and human trafficking policy – the
responsibilities of our businesses to implement and
enforce effective systems and controls to ensure that
modern slavery is not taking place anywhere in our own
businesses or in any of our businesses’ supply chains as
outlined in this policy reflects the Group’s zero-tolerance
approach to modern slavery, exploitation and violation of
fundamental human rights. Adherence to these principles
is addressed through staff induction, ongoing training and
communications. Suppliers are required to comply with
our policies on these matters with compliance enforced
through robust vendor audits, supplier visits and ongoing
training.
• Group wide dealing policy and share dealing code –
these policies are designed to ensure that Directors and
employees do not misuse, or place themselves under
suspicion of misusing, information about the Group which
is not public and they support compliance with the
applicable regulatory framework on market abuse.
Additionally, in the wake of the pandemic, Brexit and
resulting changes to operations, together with an evolving
financial crime environment, the Audit Committee initiated
a project to review the Group’s approach to the corporate
offence of failure to prevent facilitation of tax evasion,
introduced by the Criminal Finances Act 2017. The Group
Executive Committee developed a project plan to refresh
the Group’s risk assessment on this and to ensure that
‘prevention procedures’ remained up to date and fit for
purpose. External advisers were engaged in Q1 22 to
support this work and the output was reported back to the
Audit Committee.
Yvonne Monaghan
Chair of the Audit Committee
22 March 2022
70
CORPORATE GOVERNANCEThe Pebble Group plc Annual Report 2021 Remuneration report
Ensuring key personnel deliver
the Company’s objectives.
This report is for the year ended 31 December
2021. It sets out the remuneration policy and the
detailed remuneration for the Executive and
Non-executive Directors of the Company. As an
AIM-quoted company, the information is
disclosed to fulfil the requirements of AIM Rule
19. The Pebble Group plc is not required to
comply with the Large and Medium-sized
Companies and Groups (Accounts and Reports)
(Amendment) Regulations 2013. The information
is unaudited except where stated.
Dear shareholder,
I am pleased to introduce the Directors’ Remuneration
Report for the 2021 financial year. This letter introduces the
report, outlines the major decisions on Directors’
remuneration during the year and explains the context in
which these decisions have been taken.
The Pebble Group plc is committed to high standards of
corporate governance and our policy and disclosures on
Directors’ remuneration are intended to reflect this
approach. Through this report, we aim to provide
shareholders with the necessary information to understand
our remuneration strategy and how it links with Group
performance and we welcome shareholder feedback on
these matters. To reflect our positive approach to good
corporate governance and to promote engagement
between the Remuneration Committee and our
shareholders, we will put this Directors’ Remuneration
Report to an advisory vote at the 2022 AGM, as we did at
the 2021 AGM. At our 2021 AGM, this resolution was
supported by 99.5% of votes cast (no votes withheld).
71
The Pebble Group plc Annual Report 2021 Remuneration report
Remuneration policy
The Company’s approach to remuneration is that the overall
package should be sufficiently attractive to recruit,
motivate and retain individuals of a high calibre with
significant technical and strategic expertise. The
remuneration policy ensures that key personnel are
incentivised and rewarded in a way that is aligned to
delivery of the Company’s long-term growth objectives
which in turn achieves a Group culture that will support our
strategic goals. I believe the interests of key personnel are
resultingly aligned with those of our shareholders.
The remuneration policy adopted by the Company has four
main elements, base salary, benefits, annual performance
related bonuses and long-term share incentives. Policy in
each area is detailed in this report.
I believe that there is a clear link between variable pay and
operational and financial performance and I consider all
performance metrics used to be stretching and aligned with
our strategy and business model. During the year, the
Committee considered inclusion of ESG-related criteria to
determine variable pay, however this has not been adopted
to date. I intend to keep this under review noting that such
criteria, if introduced, must be as rigorous as other financial
or operational targets and meaningful to our businesses.
Performance and decisions on remuneration taken
during 2021
Company performance during the year was focused on
meeting two objectives:
• continuing to invest in, and show progress against, the
medium-term growth plan for Facilisgroup, targeting
$50 million of Annual Recurring Revenue by the end of
2024; and
• demonstrating the ability of Brand Addition to make an
immediate recovery to FY 19 revenue levels following the
impact of the COVID 19 pandemic on the business during
FY 20.
Details of progress against these objectives have been
provided throughout the Strategic Report on pages 2-49.
In the context of these objectives and against the backdrop
of 2020 where Company performance was impacted by
COVID 19, the following remuneration decisions were made
by the Remuneration Committee:
• the base salary for each of the CEO and CFO, of £270,000
and £200,000 respectively, was not changed and
remained at the level set at IPO in 2019;
• the fees for the Chair and other Non-executive Directors
were not changed and remained at the level set at IPO in
2019;
• an Annual Bonus Plan for Executive Directors was
approved in 2021. The plan was subject to performance
targets based solely on the Group’s financial results, using
the Adjusted EBITDA performance. (Details of the level
achieved against target are summarised later in this
report);
• the recurring annual award under the Long Term Incentive
Plan (LTIP) was made on 8 June 2021; and
• the first implementation of the Group Sharesave Plan
(SAYE) was approved and options were granted on
6 October 2021.
Information on how remuneration will be operated in 2022
is set out at the end of this report.
I hope that you find the report helpful and informative, and
I look forward to receiving feedback from you on the
information presented.
Stuart Warriner
Remuneration Committee Chair
22 March 2022
72
CORPORATE GOVERNANCEThe Pebble Group plc Annual Report 2021 Composition of Committee
The Committee comprises all three independent Non-
executive Directors, Stuart Warriner (Chair), Yvonne Monaghan
and Richard Law and is supported by Lucy Penfold as Company
Secretary. The Committee will normally meet four times a year
to review the remuneration of the Executive Directors and
other Executive Team members. The views of the Chief
Executive are sought in respect of awards to the other
Executive Director and Executive Team members.
Evaluation of the effectiveness of the
Remuneration Committee
To ensure that it is operating at maximum effectiveness, the
Committee used output of the formal Group Board
Effectiveness review detailed on page 61 to review and
evaluate its own performance, constitution and Terms of
Reference during Q4 21. It concluded that the Committee
was operating effectively, and no action or changes were
required to be recommended to the Group Board. No
issues arose from the Terms of Reference which were
re-approved by the Group Board without amendment.
Remuneration policy
The Committee’s overall approach is focused on ensuring
the Company’s remuneration policy is aligned with
shareholders’ interests whilst also enabling the Company to
attract, retain and motivate high quality executive
management. It is intended that this policy conforms with
best practice standards.
The key objectives of the Company’s remuneration policy
are to:
• align Executive and shareholder interests;
• underpin an effective pay-for-performance culture;
• support retention, motivation and recruitment of talented
people; and
• be clear, consistent and easy to understand.
The Committee aims to achieve an appropriate balance
between fixed and variable remuneration, and between
variable remuneration based on short-term and longer-term
performance. Fixed remuneration includes base salary and
benefits. Variable remuneration includes annual bonus and
awards made under the Long Term Incentive Plan. In addition
to this, the Executive Directors are required to build and
maintain a minimum shareholding in The Pebble Group plc
shares, details of which are provided in the table below.
The structure of executive remuneration is in line with that of
many established UK quoted companies balancing fixed
remuneration, annual bonus and long-term performance share
awards. Approximately 57% of the potential remuneration of
the Executive Directors is subject to the achievement of
performance targets. The link of remuneration outcomes to
long-term performance is primarily through the Long Term
Incentive Plan which has stretching targets based on basic
adjusted earnings per share (EPS) and total shareholder return
(TSR), and a two-year post-vesting holding period is applied.
The Committee recognises the risk of target-based plans and
addresses this risk through careful consideration in the choice
and pitching of performance targets, the ability to exercise
discretion, the attachment of malus and clawback provisions to
Long Term Incentive Plan awards and the application of a
shareholding guideline. In the light of this remuneration
structure and the substantial shareholdings of both the CEO
and CFO, the Committee is satisfied that the Executive
Directors are well aligned with the long-term performance of
the Company.
The Committee will take into account periodic external
comparisons to examine current market trends and
practices at equivalent roles in similar companies.
Additionally, in making its decisions in 2021 the Committee
also consulted external consultants h2glenfern
Remuneration Advisory Limited (H2glenfern), where
appropriate, to provide advice on best practice and market
trends. H2glenfern is a member of the UK Remuneration
Consultants Group (RCG) and has confirmed that it
complies with the RCG Code. H2glenfern has no other
relationship with the Company and the Committee is
satisfied that the advice it receives is independent and
objective. The Committee instructed h2glenfern to carry
out benchmarking for executive and non-executive
remuneration during Q4 21.
This part of the report sets out the remuneration policy
with regard to the Executive Directors. The policy on each
element of remuneration and how it operates is detailed in
the table:
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The Pebble Group plc Annual Report 2021 Remuneration report
Elements of Remuneration
Element
Base Salary
Benefits
Link to remuneration
policy/strategy
To help recruit and
retain high
performing Executive
Directors.
Reflects the
individual’s
experience, role and
importance to the
business.
To help recruit and
retain high
performing Executive
Directors.
To provide market
competitive benefits.
Pension
Annual
Bonus
To help recruit and
retain high
performing Executive
Directors.
To provide market
competitive pensions.
To incentivise and
reward performance.
To align the interests
of the Executives and
shareholders in the
short and medium
term.
74
Operation
Maximum opportunity
Performance metric
Base salary is reviewed
annually as at 1 January with
reference to each Executive
Director’s performance and
contribution during the year,
company performance, the
scope of the Executive
Directors’ responsibilities and
consideration of competitive
pressures.
There is no prescribed
maximum annual base
salary or salary increase.
The Committee is
guided by the general
increase for the broader
employee population
but has discretion to
decide on a lower or a
higher increase.
The Committee considers
individual and Company
performance when setting
base salary.
Benefits are in line with those
offered to other senior
management employees and
may include medical expenses
cover and life insurance cover.
The CEO and CFO also receive
permanent health insurance
cover and a Company car, the
value of which is equivalent to
5% of base salary per annum.
The Company car is provided
to Executive Directors as an
alternative to an employer’s
pension contribution.
Employer’s pension
contribution or a cash
supplement.
The CEO and CFO have opted
to take a Company car
contribution as an alternative
to an employer’s pension
contribution.
The Annual Bonus is earned by
the achievement of one-year
performance targets set by the
Remuneration Committee. The
parameters, performance
criteria, weightings and targets
are ordinarily set at the start of
each financial year.
Payments are made in cash
following completion of the
year subject to the
Committee’s assessment of
performance against targets
and other matters it deems
relevant.
Awards are subject to malus
and clawback provisions.
None
No maximum potential
value other than
Company car, the value
of which is capped at
5% of base salary per
annum where provided
as an alternative to an
employer’s pension
contribution.
None
5% of base salary, which
is aligned with the
pension contribution
made by the Company
to its UK workforce.
The maximum bonus
opportunity for the CEO
and CFO is 100% of base
salary.
Performance measures may
include financial, non-
financial, personal and
strategic objectives.
Performance criteria and
weightings may be changed
from year to year.
At present, the
performance targets are
based on Adjusted EBITDA
which is considered by the
committee to be the
Group’s key financial
performance indicator.
CORPORATE GOVERNANCEThe Pebble Group plc Annual Report 2021 Element
Long Term
Incentive
Plan
Link to remuneration
policy/strategy
To incentivise and
reward long-term
performance and
value creation.
To align the interests
of Executive
Directors and
shareholders in the
long-term.
All employee
share plan
Shareholding
requirement
To encourage all
employees to make a
long-term investment
in the Company’s
shares in a tax
efficient way
Encourages Executive
Directors to achieve
the Company’s
long- term strategy
and create
sustainable
stakeholder value
Aligns with
shareholder interests
Operation
Maximum opportunity
Performance metric
The annual award to the
CEO and CFO is normally
100% of base salary.
Performance measures may
include financial and total
shareholder return
(TSR)-based targets.
Performance criteria and
weightings may be changed
from year to year.
For awards made in FY 20
and FY 21, 70% of the award
was subject to a cumulative
basic earnings per share
(EPS) target and 30% was
subject to an absolute TSR
target.
Details are set out later in
this report.
The maximum
participation level will be
aligned to HMRC limits.
None
Executive Directors are
eligible to receive awards
under the Long Term Incentive
Plan at the discretion of the
Committee.
Awards are granted as nil-cost
options or conditional awards
which vest after three years
subject to the meeting of
objective performance
conditions specified at award.
Awards are subject to malus
and clawback provisions.
An additional holding period
of two years post vesting is
applied to awards made to the
Executive Directors.
Dividend equivalents may be
added to awards.
The Executive Directors may
participate in the Group
Sharesave Plan (SAYE) on the
same terms as other eligible
employees.
200% of salary.
The shareholdings of the CEO
and CFO are currently well in
excess of this guideline.
Non-
executive
Director
remuneration
To provide fees
appropriate to time
commitments and
responsibilities of
each role.
Non-executive Directors are
paid a base fee in cash. Fees
are reviewed periodically. In
addition, reasonable business
expenses maybe reimbursed.
The Group Board is
guided by the general
increase for the broader
employee population
and takes into account
relevant market
movements.
75
The Pebble Group plc Annual Report 2021 Remuneration report
Malus and clawback
Both Annual Bonus and Long Term Incentive Plan awards are
subject to malus and clawback provisions covering two
years. Reasons for malus and clawback being applied would
include material misstatement in audited results, discovery
of errors or inaccuracies in the assessment of any
performance condition, fraud or gross misconduct, events
or behaviour which lead to the censure of the Group by a
regulatory authority or have a significant detrimental impact
on the reputation of the Group.
Remuneration of employees below the Group Board
Employees below the Group Board receive base salary,
benefits, annual bonus, and senior staff are invited to
participate in the Long Term Incentive plan.
Pay and conditions throughout the Group are taken into
consideration when setting remuneration policy. The
Committee does not consult other employees when setting
executive remuneration.
Shareholder consultation
The Committee’s policy is to consult with major
shareholders in respect of significant decisions on executive
remuneration.
The Chair of the Remuneration Committee is available for
contact with investors concerning the Company’s approach
to remuneration. The annual report on remuneration will be
put to an advisory vote at the upcoming AGM in 2022.
Executive Directors’ service contracts and
payments for loss of office
Our Executive Directors have rolling service contracts dated
28 November 2019 with an indefinite term, but a fixed
period of 12 months’ notice of termination. Our approach
to remuneration in each of the circumstances in which an
Executive Director may leave is determined by the
Remuneration Committee in accordance with the rules of
any applicable scheme.
Non-executive Directors’ letters of appointment
The Non-executive Directors do not have service contracts
but instead have letters of appointment dated 28
November 2019 which contain a three-month notice period.
Consideration of new Executive Directors or senior
executives
When recruiting or promoting any senior executive, we seek
to apply consistent policies on fixed and variable
remuneration components in line with the remuneration
policy set out above. This helps to ensure that any new
Executive Directors or senior executive is on the same
remuneration footing as existing Executive Directors or
senior executives respectively, while still taking into account
the skill and experience of the individual, the market rate
for a candidate of that experience and the importance of
securing the relevant individual.
Annual report on remuneration
This section sets out details of remuneration in 2021.
2021 Summary of Directors’ total remuneration (audited)*
Name
Executive
Christopher Lee
Claire Thomson
Non-executive
Richard Law
Yvonne Monaghan
Stuart Warriner
Salary/Fee
Bonus
Pension
Benefits**
Total
£270,000
£114,750
£200,000
£85,000
£100,000
£45,000
£45,000
-
-
-
-
-
-
-
-
£14,687
£399,437
£11,579
£296,579
-
-
-
£100,000
£45,000
£45,000
* Executive Directors’ salary and Non-executive Directors’ fees in 2021 were unchanged from 2020. The difference in total remuneration
paid is due to the 40% reduction that was agreed in 2020, as noted in the table below.
** Car lease and private medical insurance.
76
CORPORATE GOVERNANCEThe Pebble Group plc Annual Report 2021 2020 Summary of Directors’ total remuneration (audited)*
Name
Executive
Christopher Lee
Claire Thomson
Non-executive
Richard Law
Yvonne Monaghan
Stuart Warriner
Salary/fee
Bonus
Pension
Benefits**
Total
£222,252
£165,246
£80,777
£36,350
£36,350
£0
£0
-
-
-
£4,499
£5,345
£11,590
£238,341
£9,174
£179,765
-
-
-
-
-
-
£80,777
£36,350
£36,350
* In response to the COVID-19 pandemic, Executive Directors and Non-executive Directors agreed to a 40% reduction in base salary and
fees, respectively. This reduction was in place for the 6-month period from 1 April to 30 September 2020.
2021 annual bonus awards
No annual bonus plan operated in respect of 2020. For 2021, the maximum potential bonus was 100% of base salary. The
awards were subject to performance targets based solely on the Group’s financial results, using the Adjusted EBITDA
performance, which is considered by the Remuneration Committee to be the Group’s key performance measure. No bonus
is payable for below threshold performance but increases on a straight-line basis from 25% pay-out at threshold, to 60%
pay-out at target performance, to 100% pay-out at maximum.
The Company achieved adjusted EBITDA of £15.4m in FY 21 which corresponded to a pay out at 42.5% of maximum for
each Executive Director, as shown in the table above.
Long Term Incentive Plan (LTIP)
Long term incentive awards were granted to the CEO and CFO on 8 June 2021. The table below summarises the awards
made to the Executive Directors under the plan.
Name and award date
Christopher Lee
21 December 2020
8 June 2021
Claire Thomson
21 December 2020
8 June 2021
Interest at
31 December
2020
Granted
in year*
Vested
Exercised
Lapsed
Interest at
31 December
2021
Performance
period ending
242,152
179,372
176,471
130,719
-
-
-
-
-
-
242,152
30 June 2023
176,471
31 December 2023
179,372
30 June 2023
130,719
31 December 2023
Nil cost awards with performance conditions as at 31 December 2021.
* The value at Grant Date was calculated based on the closing share price on 8 June 2021 of 1.529p per share. Each of the awards
represents an LTIP award over shares worth 100% of annual salary as at the Grant Date.
Performance conditions
2021 award 70% cumulative adjusted
basic EPS and 30% TSR
2020 award 70% cumulative adjusted
basic EPS and 30% TSR
Cumulative basic adjusted EPS
Basic adjusted EPS as defined in
the LTIP rules, excludes share
based payment costs, exceptional
items and amortisation from
acquired intangibles
Cumulative basic adjusted EPS for the three
years ended 31 December 2023
Threshold (25% of maximum vesting) 15.4p
Mid-range (60% of maximum vesting) 16.3p
Maximum (100% of maximum vesting) 17.3p
Cumulative basic adjusted EPS for the three
years ended 30 June 2023
Threshold (25% of maximum vesting) 13.4p
Mid-range (60% of maximum vesting) 14.3p
Maximum (100% of maximum vesting) 15.1p
Annualised TSR
Annualised growth in total
shareholder returns
Threshold 8% pa (25% maximum vesting
Mid-range 11.3% pa (60% maximum vesting)
Maximum 15% pa (100% maximum vesting)
Threshold 8% pa (25% maximum vesting)
Mid-range 11.3% pa (60% maximum vesting)
Maximum 15% pa (100% maximum vesting)
Performance between these levels is determined on a straight-line basis.
77
The Pebble Group plc Annual Report 2021 Remuneration report
The performance period for the 2020 awards (being the three years ending 30 June 2023) was chosen as the timing of the
2020 awards was deferred to December 2020.
The performance period for the 2021 awards (being the three years ending 31 December 2023) was chosen to align back
with the financial year.
The charge for share based payments is detailed in note 24 to the accounts.
Group Sharesave Plan (SAYE) participation
Christopher Lee and Claire Thomson elected to participate in the 2021 Sharesave plan launched in September 2021 to the
maximum amount offered to staff under the plan. As such, they were awarded options as detailed below. The exercise
price for these awards is 122 pence per Share, representing a 20% discount to the closing market price of 152.50 pence
per Share on 13 September 2021, being the trading day before the invitation for eligible employees to participate was
made.
Name
Christopher Lee
Claire Thomson
Award date
6 Oct 2021
6 Oct 2021
Granted
in year
Exercise
price
Contract
start date
14,754
14,754
122p 1 Dec 2021
122p 1 Dec 2021
Option
exercisable
1 Dec 2024
1 Dec 2024
Annual General Meeting
The Committee was pleased that at the Company’s AGM held on 3 June 2021, 99.5% of votes cast were in favour of the
resolution to approve the Directors’ Remuneration Report (no votes withheld).
Director’s interests in shares
The interests of the Directors as at 31 December 2021 and 2020 in the shares of the Company were:
Name
Richard Law
Christopher Lee
Claire Thomson
Yvonne Monaghan
Stuart Warriner*
31 December 2021
31 December 2020
Number
370,041
6,091,515
2,907,243
55,000
50,000
% of issued
shares
0.22%
3.64%
1.74%
0.03%
0.03%
Number
239,963
6,091,515
2,907,243
35,000
50,000
% of issued
shares
0.14%
3.64%
1.74%
0.02%
0.03%
* Stuart Warriner increased his shareholding to 95,000 shares on 19 January 2022, which increased his percentage of issued shares held
to 0.06%.
78
CORPORATE GOVERNANCEThe Pebble Group plc Annual Report 2021 Directors remuneration for the year commencing 1 January 2022
Executive Directors
At IPO in December 2019, the salaries of the CEO and CFO were set using the median level of pay determined by an
independent remuneration expert, based on a cohort of peer companies by market capitalisation and sector. The
Committee regards that considering median remains a reasonable approach for the Group to attract and retain
appropriately qualified and high calibre individuals to set and implement the Group’s strategy. In Q4 21 executive salaries
were reviewed for the first time since IPO and the benchmarking exercise carried out by h2glenfern (noted above)
indicated that both CEO and CFO base salaries were below market median levels. The Committee considered addressing
this to align 2022 base salary, again focusing on paying at a median level. However, given wider stakeholder considerations
in the context of the Group’s stage on its growth journey, the Committee determined to limit the increase in the salaries of
our CEO and CFO to 5.5% and 5.0% of salary respectively, aligned with the approach adopted across the wider Group. In
making this decision, the Committee was cognisant of the need to ensure that executive remuneration remains fair and
competitive, and the Committee agreed that it may be appropriate for future base salary increases to include a greater
percentage uplift, if both the Company and individual performance merited that.
Name
Christopher Lee
Claire Thomson
Role
CEO
CFO
2022 annual bonus awards
The annual bonus plan for 2022 will operate in a similar way to 2021.
Base salary
2022
Base salary
2021
285 000
210,000
270,000
200,000
Long Term Incentive Plan for 2022
Long-term incentive awards are planned for March 2022 and will operate as set out in the policy table above. Awards will be
subject to three-year performance conditions and a two year holding period for vested awards.
Non-executive Directors
Name
Role
Committee Chair
Richard Law
Chair of the Group Board
Nomination
Yvonne Monaghan
Non-executive Director
Audit
Stuart Warriner
Non-executive Director
Remuneration
Annual Fee
2022
Annual Fee
2021
£100,000
£100,000
£45,000
£45,000
£45,000
£45,000
79
The Pebble Group plc Annual Report 2021 Directors’ report
For the year ended 31 December 2021
The Directors present their report together with the
audited Group Financial Statements of The Pebble Group
plc (the “Company”) for the year ended 31 December 2021.
Principal Activities and Business Overview
The Company is incorporated and domiciled in the UK with
company number 12231361 and with its registered office
address at Broadway House, Trafford Wharf Road, Trafford
Park, Manchester, United Kingdom M17 1DD. The Company is
a public limited company admitted to trading on the AIM
market of the London Stock Exchange.
The principal activities and business overview of the Group
are set out on pages 4-11 within the Strategic Report which
is incorporated by reference and forms part of this
Directors’ Report.
Business review and future developments
A review of the performance of the Company during the year,
including principal risks and uncertainties, key performance
indicators and comments on future developments is given in
the Strategic Report on pages 38-40.
Results and dividends
The Group recorded revenue in the year of £115.1m (FY 20:
£82.4m) and profit after tax of £7.3m (FY 20: £4.1m). No
interim dividend has been paid in the year (FY 20: £nil).
The Group’s previously stated dividend policy is to make
dividend payments of c.30% of profit after tax. This policy
remains in place. However, as we continue to believe the
opportunities ahead of us remain significant, in particular
planned investment into Facilisgroup, we have taken the
decision to retain cash in the business and the Directors do
not recommend the payment of a final dividend (FY20: nil).
The timing of implementing our stated dividend policy will
be considered again against the Group’s half year 2022
progress and an update provided at that time.
Financial risk management
Information relating to the principal risks and uncertainties
of the Group has been included within the Strategic Report
on pages 45-49. Further information relating to the financial
risk of the Group has been included within note 23, financial
risk management.
Going concern
In assessing the appropriateness of adopting the going
concern basis in the preparation of these financial
statements, the Directors have prepared cash flow
forecasts and projections for the two years ending
31 December 2023. Following careful consideration of the
base case forecasts and the application of severe but
plausible downside scenarios to these forecasts, the
Directors have a reasonable expectation that the Group has
adequate resources to continue to operate within the level
of its current facilities for a period of at least 12 months
from the date of this Report. Therefore, the Directors
continue to adopt the going concern basis of accounting in
preparing the Group and Company financial statements.
Further details on going concern are provided in note 2 of
the Group financial statements which is incorporated by
reference and forms part of this Directors’ Report.
Directors and their interests
The Directors of the Company who were in office during the
year and up to the date of signing the Group financial
statements were:
Richard Law
Christopher Lee
Claire Thomson
Yvonne Monaghan
Stuart Warriner
In accordance with the Articles of Association, a third of the
Group Board are required to stand for re-election at the
forthcoming AGM; and any Director who has not been
re-elected at one of the two previous AGMs is to be
proposed for re-election. However, in line with the decision
made in advance of the 2021 AGM, the Group Board has
again decided that all Directors would retire and seek
re-election by the Company’s shareholders at the 2022
AGM. The Directors confirm that having conducted a
performance evaluation, each Director continues to
contribute and demonstrate commitment to their role.
The Directors who held office during the year and as at 31
December 2021 had the following interests in the Ordinary
shares of the Company:
Name of Director
Richard Law
Christopher Lee
Claire Thomson
Yvonne Monaghan
Stuart Warriner*
Number
370,041
6,091,515
2,907,243
55,000
50,000
* Stuart Warriner increased his shareholding to 95,000 shares on 19
January 2022, which increased his percentage of issued shares
held to 0.06%.
In addition to the interest in Ordinary shares shown above,
the Group operates a Long Term Incentive Plan (LTIP) for
senior executives, under which awards may be granted over
shares in the Company. The maximum number of Ordinary
shares which could be issued to Directors in the future
under such awards as at 31 December 2021 is shown below:
Name of Director
Christopher Lee
Claire Thomson
Number
418,623
310,091
80
CORPORATE GOVERNANCEThe Pebble Group plc Annual Report 2021
The Group also operates a Group Sharesave Plan (SAYE) for
all employees which Executive Directors may elect to
participate in. The maximum number of Ordinary shares
which could be issued to Directors in the future under such
awards as at 31 December 2021 is shown below:
Name of Director
Christopher Lee
Claire Thomson
Number
14,754
14,754
The market price of the Company’s shares at the end of the
financial year was 132.50p (31 December 2020: 130.0p) and
the range of market prices during the year ended 31
December 2021 was between 120.0p and 160.0p.
Further details on related party transactions with Directors
are provided in note 26 of the Group financial statements.
Directors’ insurance
The Company maintains Directors’ and Officers’ liability
insurance for the Directors, which was in force during the
full year 2021 and remains in force as at the date of this
report.
Significant shareholdings
As at 21 March 2022, the Company has been advised, in
accordance with the Disclosure and Transparency Rules of
the Financial Conduct Authority of the following notifiable
interests in 3% or more of its voting rights.
Name of Shareholder
Number Percentage
Liontrust Asset Management
33,229,313
19.8%
BlackRock Investment Management
22,285,903
13.3%
FIL Investments International
Capital International, UK
Amati Global Investors
Aegon N.V.
16,405,563
13,469,171
10,712,614
8,270,615
River and Mercantile Asset Management
6,907,300
Christopher Lee
Janus Henderson Investors
Chelverton Asset Management
6,091,515
5,305,924
5,227,500
9.8%
8.0%
6.4%
4.9%
4.1%
3.6%
3.2%
3.1%
Employees
The Group regularly provides employees with information
on matters of concern to them, consulting them or their
representatives regularly so that their views can be taken
into account when making decisions that are likely to affect
their interests. Employee involvement in the Group is
encouraged, as common goals and awareness of the
Group’s strategy play a major role in delivering its strategic
objectives (see listening to our stakeholders pages 18-21.
Second awards under the Group’s Long Term Incentive Plan
were made on 8 June 2021 in which 57 senior staff across
the Group participated. In addition to this, the first
implementation of the Group Sharesave Plan (SAYE) was
approved and options were granted to 127 employees under
the main plan and to 48 employees under the international
plan on 6 October 2021, with an option price of £1.22.
The Group recognises its responsibility to employ disabled
persons in suitable employment and gives full and fair
consideration to such persons, including any employee who
becomes disabled, having regard to their particular
aptitudes and abilities. Where practicable, disabled
employees are treated equally with all other employees in
respect of their eligibility for training, career development
and promotion. For further information on the Group’s DEI
policy please see page 31.
Further details on how the Company communicates with its
teams as a key stakeholder group and has regard to their
interests can be found within the Strategic Report on
pages 18-25.
Statement on Engagement with Stakeholders
Investing in and developing our stakeholder relationships is
central to our Group values. We believe the success of our
strategy depends on our ability to foster effective business
relationships with all of our stakeholders. Their interests are
important to us and we are committed to maintaining
strong, positive relationships with them, built on a
foundation of mutual respect, trust and understanding.
Further information on our stakeholder engagement can be
found within our Strategic Report on pages 18-21 and also in
our Section 172(1) statement on pages 22-25 where we
provide a high-level overview of how we engage with our
stakeholders.
Political donations
It is the Company’s policy not to make political donations.
The Directors confirm that no donations for political
purposes were made during the year (2020: nil).
Share capital and voting
The Company has one class of equity share, 1p Ordinary
shares, with full voting, dividend and capital distribution
rights, including on winding up. They are non-redeemable.
The rights and obligations attaching to these shares are
governed by the Companies Act 2006 and the Company’s
Articles.
As at 31 December 2021, the Company’s issued share capital
comprised: 167,450,893 Ordinary shares of 1p.
Off-market purchase of Deferred shares by the
Company
The Company had a second class of share, 1p Deferred
shares, which had arisen from the operation at the time of
the Company’s IPO of a share ratchet which appeared in
the Company’s articles of association in force during the
period immediately prior to IPO. The Deferred shares
carried very limited rights (no voting, dividend or other
distribution rights). As the stated intention from their
creation upon IPO was that they would be purchased in
their entirety by the Company, on 3 June 2021 a special
resolution was passed by shareholders at the 2021 AGM, to
81
The Pebble Group plc Annual Report 2021 Directors’ report
For the year ended 31 December 2021
approve the off-market purchase of 12,564,501 Deferred
shares of 1p each in the capital of the Company (being all of
the shares of that class in issue at that time) by the
Company from the eight holders of those shares, in
consideration of the payment of £1 to each of such holders,
being £8 in aggregate. Completion of that purchase took
place immediately after the conclusion of the AGM, at
which time the 12,564,501 Deferred shares of 1p each in the
capital of the Company were cancelled.
Shareholders’ Authority for the Purchase by the
Company of its own Shares
At the 2021 AGM, Shareholders authorised the Company to
make market purchases of up to a maximum number of
Ordinary shares of 16,745,000, which represented
approximately 10% of the Company’s issued Ordinary share
capital on the latest practicable date prior to publication of
the 2021 Notice of Annual General Meeting. The minimum
price allowed for such purchases is nominal value and the
maximum is 5% above the average of the middle market
quotations for such shares for the five business days
immediately preceding the day of purchase. The Directors
intend to seek renewal of this authority, which is due to
expire at the conclusion of the 2022 AGM. Further details
are given in the 2022 Notice of Annual General Meeting.
Appointment and replacement of Directors and
changes to constitution
New Articles of Association were adopted by special
resolution passed by shareholders at the 2021 AGM on
3 June 2021. The principal changes were:
(i)
removal of all references to Deferred shares, given the
purchase and cancellation of those shares, as described
above;
inclusion of express provisions allowing the Company to
hold “hybrid” general meetings (including annual
general meetings), enabling shareholders to attend the
meeting either at a physical location or virtually by
means of an electronic facility. Voting at any hybrid
general meeting will, unless the Chair of the meeting
directs otherwise, be decided on a poll. The new
Articles of Association provide that a hybrid general
meeting may be adjourned in the event of a
technological failure. Consistent with views expressed
by the Investment Association and Institutional
Shareholder Services, the new Articles of Association
do not permit general meetings to be held exclusively
on the basis of electronic participation, so a “physical”
meeting will still be required in all cases. The provisions
regarding hybrid general meetings are intended to
provide the board with flexibility to reflect
technological advances and changing shareholder
sentiment and market practice, in particular in light of
the COVID 19 pandemic; and
(ii)
82
(iii) more extensive provisions in relation to the possibility
of “satellite” general meetings (including annual general
meetings), held at more than one location.
The Articles of Association are available on the Company’s
website.
Rules governing the appointment and replacement of
Directors and those relating to the amendments of the
Company’s Articles of Association are contained within the
Articles of Association.
Notice of Annual General Meeting
Details of business to be conducted at this year’s AGM, are
contained in the Notice of the Annual General Meeting
which will be communicated to shareholders separately. It
is the opinion of the Directors that the passing of these
resolutions is in the best interest of the shareholders.
Corporate governance
Our governance structure and the Group’s statement on
corporate governance can be found in the Corporate
Governance section of this report on pages 50-84 which is
incorporated by reference and forms part of this Directors’
Report. It can also be found on the Company’s website.
Forward-looking statements
This Annual Report contains forward-looking statements
that involve risk and uncertainties. The Group’s actual
results could differ materially from those estimated or
anticipated in the forward-looking statements as a result of
many factors. Information contained in this Annual Report
and Accounts relating to the Company should not be relied
upon as a guide to future performance.
Events after the end of financial year
There were no events occurring after the balance sheet
date that require disclosing in accordance with IAS10,
‘Events after the reporting period’.
Directors’ statement as to disclosure of
information to external auditor
The Directors of the Company at the date of the approval of
this report confirm that:
• so far as each Director is aware, there is no relevant audit
information of which the Company’s external auditor is
unaware; and
• each Director has taken all the steps that they ought to
have taken as a Director to make themselves aware of any
relevant audit information and to establish that the
Company’s external auditor is aware of that information.
CORPORATE GOVERNANCEThe Pebble Group plc Annual Report 2021 UK greenhouse gas emissions and energy use
Under the Companies (Directors’ Report) and Limited Liabilities Partnerships (Energy & Carbon Report) Regulations 2019, we
are mandated to disclose our UK energy use and associated greenhouse gas (GHG) emissions. Specifically, and as a minimum,
we are required to report those GHG emissions relating to natural gas, electricity and transport fuel as well as an intensity
ratio, under the Streamlined Energy & Carbon Reporting (SECR) Regulations. The Greenhouse gas emissions and energy usage
reported below relates to the Group’s UK based business operations (Brand Addition Manchester and London):
Emission data
Direct (Scope 1) – Natural gas
Indirect (Scope 2) – Purchased electricity (Location based)
Other (Scope 3)
– Business travel in employee-owned vehicles
Total energy consumption
Total emissions
Intensity ratio kgCO2 per £m of revenue
Unit of measure
2021
2020
Variance
kgCO2e
kgCO2e
kgCO2e
kWh
kgCO2e
62,389
58,696
50,645
60,297
3,399
571,689
124,484
1,724
15,875
571,235
126,817
2,741
23%
-3%
-79%
0%
-2%
-37%
Energy Improvements
Despite being unable to make any significant savings in 2021, we remain committed to reducing carbon emissions to meet
our long-term goals. In 2021 Brand Addition, Manchester installed five new air conditioning units to replace old aging units
with more energy efficient models. Old lighting continued to be replaced with LED alternatives as part of ongoing
maintenance, but no other large-scale projects were undertaken in 2021. Employees continue to be educated in the
importance of being energy conscious when in the office to minimise energy usage. In 2022 we expect to transition the
electricity sourced at the Brand Addition London site over to renewable electricity and use renewable gas at our Brand
Addition Manchester office and warehouse, which will result in a significant reduction in our UK emissions. With the
introduction of our groupwide energy reporting framework and the Scope 3 evaluation which will begin during Q1 22, we
expect to be able to publish our full Group greenhouse gas emissions in future reports. For further details on energy
reduction see ESG page 33.
Methodology
Brand Addition has followed the 2019 HM reporting Government guidelines and its own internal ISO50001 framework for
energy and carbon reporting. The calculation methods have used the 2020 Defra (Department for Environment, Food &
Rural Affairs)/BEIS (Department for Business, Energy & Industrial Strategy) conversion factors for company reporting.
Intensity measures
The chosen intensity measurement ratio is the total gross emissions in kg CO2e per £m revenue (kgCO2e/£m) to allow for
emissions normalisation.
Independent auditor
The Group’s external auditor, PwC, has indicated their willingness to continue in office and in accordance with the
recommendation of the Audit Committee, a resolution to reappoint PwC as the external auditor will be proposed at the
upcoming AGM.
By order of the Group Board
Lucy Penfold
Group General Counsel & Company Secretary
22 March 2022
The Pebble Group plc
Broadway House
Trafford Wharf Road
Manchester
M17 1DD
Registered in England and Wales with company number: 12231361
83
The Pebble Group plc Annual Report 2021 Statement of Directors’ responsibilities
Statement of Directors’ responsibilities in respect of the financial statements
The Directors are also responsible for keeping adequate
accounting records that are sufficient to show and explain
the Group’s and Company’s transactions and disclose with
reasonable accuracy at any time the financial position of the
Group and Company and enable them to ensure that the
financial statements comply with the Companies Act 2006.
The Directors are responsible for the maintenance and
integrity of the Company’s website. Legislation in the United
Kingdom governing the preparation and dissemination of
financial statements may differ from legislation in other
jurisdictions.
Directors’ confirmation
The Directors consider that the Annual Report and
Accounts, taken as a whole, is fair, balanced and
understandable and provides the information necessary for
shareholders to assess the Group and Company’s position
and performance, business model and strategy.
Claire Thomson
CFO
22 March 2022
The Directors are responsible for preparing the Annual
Report and the financial statements in accordance with
applicable law and regulation.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the
Directors have prepared the Group financial statements in
accordance with UK-adopted international accounting
standards and the company financial statements in
accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting Standards,
comprising FRS 102 “The Financial Reporting Standard
applicable in the UK and Republic of Ireland”, and applicable
law).
Under company law, 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
period. In preparing the financial statements, the Directors
are required to:
• select suitable accounting policies and then apply them
consistently;
• state whether applicable UK-adopted international
accounting standards have been followed for the Group
financial statements and United Kingdom Accounting
Standards, comprising FRS 102 have been followed for the
Company financial statements, subject to any material
departures disclosed and explained in the financial
statements;
• make judgements and accounting estimates that are
reasonable and prudent; and
• prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the Group
and Company will continue in business.
The Directors are responsible for safeguarding the assets of
the Group and Company and hence for taking reasonable
steps for the prevention and detection of fraud and other
irregularities.
84
CORPORATE GOVERNANCEThe Pebble Group plc Annual Report 2021 Independent auditors’ report to the members of The Pebble Group plc
Report on the audit of the financial statements
Opinion
In our opinion:
• The Pebble Group plc’s Group financial statements and company financial statements (the “financial statements”) give a
true and fair view of the state of the Group’s and of the company’s affairs as at 31 December 2021 and of the Group’s
profit and the Group’s cash flows for the year then ended;
• the Group financial statements have been properly prepared in accordance with UK-adopted international accounting
standards;
• the company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting Standards, comprising FRS 102 “The Financial Reporting Standard
applicable in the UK and Republic of Ireland”, and applicable law); and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements, included within the Annual Report, which comprise: the consolidated statement
of financial position and company balance sheet as at 31 December 2021; the consolidated income statement, consolidated
statement of other comprehensive income, consolidated and company statement of changes in equity and consolidated
cash flow statement for the year then ended; and the notes to the financial statements, which include a description of the
significant accounting policies.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our
responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial
statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Independence
We remained independent of the Group in accordance with the ethical requirements that are relevant to our audit of the
financial statements in the UK, which includes the FRC’s Ethical Standard, as applicable to other listed entities of public
interest, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical Standard were
not provided.
We have provided no non-audit services to the company in the period under audit.
Our audit approach
Overview
Audit scope
• The Group consists of two operating segments, Brand Addition and Facilisgroup, which are further split into nine reporting
components of varying size, in the UK, US and other countries around the world. The Group financial statements are a
consolidation of these components.
• We identified four components which required an audit of their complete financial information, being The Pebble
Group plc, Brand Addition UK, Brand Addition US and Facilisgroup US.
• Four further components were also subject to audit procedures over specific balances due to their contribution to the
Group; this included revenue and cash in Brand Addition China, intangible assets and associated amortisation expense in
Facilisgroup Canada, accrued expenses and VAT liability in Brand Addition Hagen, and payroll expense and accrued
expenses in Project Amber Bidco Limited.
• As a result of this scoping we obtained coverage over 94% of Group revenue, 84% of Group profit before tax and 86% of
Group Adjusted EBITDA.
Key audit matters
• Accuracy of capitalised development costs (Group)
Materiality
• Overall Group materiality: £384,000 (2020: £291,000) based on 2.5% of Adjusted EBITDA.
• Overall company materiality: £345,600 (2020: £261,900) based on 1% of total assets, restricted to 90% of Group financial
statement materiality.
• Performance materiality: £288,000 (2020: £218,000) (Group) and £259,200 (2020: £196,400) (company).
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.
85
The Pebble Group plc Annual Report 2021 Independent auditors’ report to the members of The Pebble Group plc
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the 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) identified by the auditors, 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, and any
comments we make on the results of our procedures thereon, 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.
Impact of Covid-19, which was a key audit matter last year, is no longer included because of the reduced impact of
Covid-19 on the Group's operations and results. Otherwise, the key audit matters below are consistent with last year.
Key audit matter
How our audit addressed the key audit matter
Accuracy of capitalised development costs (Group)
Refer to Note 2k, Note 3b and Note 12 of the Notes to the
Group financial statements
The Group capitalised costs of £4.3 million during the year
ended 31 December 2021, of which £3.7m relates to
internally generated costs.
There is a risk that capitalised development costs additions
are incorrectly valued in the closing balance sheet. This can
arise where internally generated costs (such as wages and
salaries) are incorrectly capitalised or inaccurately
recorded.
We focused on this area due to the inherent level of
judgement involved in assessing whether costs capitalised in
the year meet the recognition criteria of IAS 38 'Intangible
assets'.
We assessed and challenged whether the development
costs capitalised met the criteria set within IAS 38
'Intangible assets'. We did not identify any material issues
in our work in this area.
We corroborated a sample of capitalised development
costs to source documentation and traced through
hours to the taskpoint system, including invoices and
contracts of employment, and determined that they had
been recorded accurately and met the criteria for
capitalisation.
We agreed, on a sample basis, that the proportion of
internal employee costs capitalised was appropriate
based upon their roles and responsibilities and contracts
of employment.
We assessed management’s determination of the date at
which certain assets were deemed to be ready for use
during the year, and therefore amortisation commenced,
and agreed that appropriate judgements were made.
We assessed the useful economic lives of the intangible
assets as applied by management in determining the
amortisation charge and agreed that these lives are
appropriate for the assets to which they relate, and have
been accurately applied.
We evaluated the disclosures included within the
financial statements relating to capitalised development
costs and found them to be appropriate and complete.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough 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 company, the accounting processes and
controls, and the industry in which they operate.
The Group is split into two main operating segments, being Brand Addition and Facilisgroup. These are further split into
nine reporting components, which vary in size, and represent smaller operations in other countries around the world. The
Group financial statements are a consolidation of these reporting components, as well as central operations.
We identified four full scope components based on their Adjusted EBITDA contribution: The Pebble Group plc, Brand
Addition UK, Brand Addition US and Facilisgroup US.
To obtain sufficient coverage over each financial statement line item in the consolidated financial statements, we also
scoped in specific line items in four other, smaller components.
We also audited material consolidation journals. All audit work was performed by the Group audit team.
As a result of this scoping we obtained coverage over 94% of Group revenue, 84% of Group profit before tax and 86% of
Group Adjusted EBITDA.
86
FINANCIAL STATEMENTSThe Pebble Group plc Annual Report 2021 Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for
materiality. These, together with qualitative considerations, helped us 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.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Overall materiality
How we determined it
Rationale for benchmark applied
Financial statements - Group
Financial statements - company
£384,000 (2020: £291,000).
£345,600 (2020: £261,900).
2.5% of Adjusted EBITDA
Based on the benchmarks used in the
Annual Report, Adjusted EBITDA is the
primary measure used by the
shareholders in assessing the
performance of the Group, and is a
generally accepted auditing benchmark.
Due to the Group's continuing recovery
from the impact of Covid-19, we have
returned to using a single-year figure,
whereas for the 2020 audit we used a
3-year average of the Group's Adjusted
EBITDA from the period 2018 - 2020.
1% of total assets, restricted to 90% of
Group financial statement materiality
The Company is a non-trading holding
Company. The entity's assets relate
solely to their ownership of the
subsidiary trading companies and thus
reflect the Company's purpose.
Company materiality has been restricted
to ensure it is not greater than 90% of
the Group's financial statement
materiality.
For each component in the scope of our Group audit, we allocated a materiality that is less than our overall Group
materiality. The range of materiality allocated across components was between £235,000 and £360,000. Certain
components were audited to a local statutory audit materiality that was also less than our overall Group materiality.
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected
and undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the
scope of our audit and the nature and extent of our testing of account balances, classes of transactions and disclosures, for
example in determining sample sizes. Our performance materiality was 75% (2020: 75%) of overall materiality, amounting to
£288,000 (2020: £218,000) for the Group financial statements and £259,200 (2020: £196,400) for the company financial
statements.
In determining the performance materiality, we considered a number of factors - the history of misstatements, risk
assessment and aggregation risk and the effectiveness of controls - and concluded that an amount at the upper end of our
normal range was appropriate.
We agreed with those charged with governance that we would report to them misstatements identified during our audit
above £19,200 (Group audit) (2020: £14,550) and £17,280 (company audit) (2020: £13,095) as well as misstatements below
those amounts that, in our view, warranted reporting for qualitative reasons.
Conclusions relating to going concern
Our evaluation of the directors’ assessment of the Group's and the company’s ability to continue to adopt the going
concern basis of accounting included:
• obtaining management’s forecasts and information for the period to December 2023;
• evaluating and assessing the process by which the Group’s future cash flow forecasts were prepared;
• agreeing the opening position of the Group’s cash flow forecasts to the 2021 audited financial statements;
• reviewing the arithmetical accuracy of management’s forecasts;
• assessing and challenging management’s key assumptions in the going concern model, including the forecast sales,
margins, capital expenditure and other costs assumptions over the period to December 2023;
• evaluating the appropriateness of the severe but plausible cash flow forecast used in management’s determination of the
going concern basis of preparation, which included an assessment and sensitivity analysis and challenge of the key
assumptions underpinning the cash flows throughout the going concern period;
• obtaining the terms of the Group’s financing facility and the covenants in place in relation to this facility, and determining
that the Group’s base case and severe but plausible forecasts show compliance with all covenant conditions for at least
12 months from the date of the approval of financial statements;
• gaining an understanding of the potential mitigating actions that the Directors could implement to meet the requirements
of the covenants; and
87
The Pebble Group plc Annual Report 2021 Independent auditors’ report to the members of The Pebble Group plc
• reviewing management’s disclosures in the financial statements. We are satisfied that they are consistent with the
assessment performed. We also read the disclosures made in the other information and did not identify any
inconsistencies with the financial statements.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions
that, individually or collectively, may cast significant doubt on the Group's and the 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.
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.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the Group's
and the company's ability to continue as a going concern.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant
sections of this report.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements and our
auditors’ report thereon. The directors are responsible for the other information. Our opinion on the financial statements
does not cover the other information and, accordingly, we do not express an audit opinion or, except to the extent
otherwise explicitly stated in this report, any form of assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained
in the audit, or otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material
misstatement, we are required to perform procedures to conclude whether there is a material misstatement of the
financial statements or a material misstatement of the other information. 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 based on these responsibilities.
With respect to the Strategic report and Directors' Report, we also considered whether the disclosures required by the
UK Companies Act 2006 have been included.
Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain
opinions and matters as described below.
Strategic report and Directors' Report
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic report and
Directors' Report for the year ended 31 December 2021 is consistent with the financial statements and has been prepared
in accordance with applicable legal requirements.
In light of the knowledge and understanding of the Group and company and their environment obtained in the course of
the audit, we did not identify any material misstatements in the Strategic report and Directors' Report.
Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial statements
As explained more fully in the Statement of Directors' responsibilities in respect of the financial statements, the directors
are responsible for the preparation of the financial statements in accordance with the applicable framework and for being
satisfied that they give a true and fair view. The directors are also responsible for such internal control as they determine is
necessary to enable the preparation of financial statements that are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group’s and the company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the Group or the company or to cease operations, or have no
realistic alternative but to do so.
Auditors’ 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 auditors’ report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with
our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The
extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
88
FINANCIAL STATEMENTSThe Pebble Group plc Annual Report 2021 Based on our understanding of the Group and industry, we identified that the principal risks of non-compliance with laws
and regulations related to employment legislation and health and safety laws, and 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 financial statements such as the Companies Act 2006, AIM listing rules and tax legislation.
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 inappropriate journal entries to
increase revenue or Adjusted EBITDA, and management bias in accounting estimates. Audit procedures performed by the
engagement team included:
• obtaining an understanding of the legal and regulatory framework applicable to the Group and how the Group is
complying with that framework;
• discussions with management and the Audit Committee, including consideration of known or suspected instances of
non-compliance with laws and regulation and fraud;
• reviewing minutes of meetings of those charged with governance, where available;
• reading any key correspondence with regulatory authorities that has taken place in the year;
• incorporating an element of unpredictability into our audit procedures;
• identifying and testing journal entries, including those with unusual account combinations relating to the principal fraud
risks set out above; and
• challenging assumptions and judgements made by management in their significant accounting estimates.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of
non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial
statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting
one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional
misrepresentations, or through collusion.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data
auditing techniques. However, it typically involves selecting a limited number of items for testing, rather than testing
complete populations. We will often seek to target particular items for testing based on their size or risk characteristics.
In other cases, we will use audit sampling to enable us to draw a conclusion about the population from which the sample is
selected.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the company’s members as a body in accordance
with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept
or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it
may come save where expressly agreed by our prior consent in writing.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
• we have not obtained all the information and explanations we require for our audit; or
• adequate accounting records have not been kept by the company, or returns adequate for our audit have not been
received from branches not visited by us; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• the company financial statements are not in agreement with the accounting records and returns.
We have no exceptions to report arising from this responsibility.
Jonathan Studholme (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Manchester
22 March 2022
89
The Pebble Group plc Annual Report 2021 Consolidated income statement
For the year ended 31 December 2021
Revenue
Cost of goods sold
Gross profit
Operating expenses
Operating expenses – exceptional
Total operating expenses
Operating profit
Analysed as:
Adjusted EBITDA1
Depreciation
Amortisation
Share-based payment charge
Exceptional items
Total operating profit
Finance expense
Profit before taxation
Income tax expense
Profit for the year
Basic earnings per share
Diluted earnings per share
Year ended
31 December
2021
£’000
Year ended
31 December
2020
£’000
115,101
(73,128)
41,973
(32,107)
82,374
(51,382)
30,992
(24,781)
-
(542)
(32,107)
(25,323)
9,866
5,669
15,378
(1,986)
(2,811)
(715)
-
9,866
(549)
9,317
(1,970)
7,347
4.39p
4.38p
9,755
(1,567)
(1,963)
(14)
(542)
5,669
(700)
4,969
(889)
4,080
2.44p
2.44p
Note
4
5
5
7
13
12
24
7
8
10
11
11
Note 1: Adjusted EBITDA, which is defined as operating profit before depreciation, amortisation, exceptional items, and share-based payment charge is a non-GAAP metric used by
management and is not an IFRS disclosure.
All results derive from continuing operations.
90
FINANCIAL STATEMENTSThe Pebble Group plc Annual Report 2021 Consolidated statement of other comprehensive income
For the year ended 31 December 2021
Items that may be subsequently reclassified to profit and loss
Foreign operations – foreign currency translation differences
Other comprehensive income/(expense) for the year
Profit for the year
Total comprehensive income for the year
Year ended
31 December
2021
£’000
Year ended
31 December
2020
£’000
277
277
7,347
7,624
(708)
(708)
4,080
3,372
91
The Pebble Group plc Annual Report 2021 Consolidated statement of financial position
As at 31 December 2021
ASSETS
Non-current assets
Intangible assets
Property, plant and equipment
Deferred tax asset
Total non-current assets
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Current tax asset
Total current assets
TOTAL ASSETS
LIABILITIES
Non-current liabilities
Lease liability
Trade and other payables
Deferred tax liability
Total non-current liabilities
Current liabilities
Lease liability
Trade and other payables
Current tax liability
Total current liabilities
TOTAL LIABILITIES
NET ASSETS
Equity and reserves
Share capital
Share premium
Capital reserve
Merger reserve
Translation reserve
Share-based payments reserve
Retained earnings
TOTAL EQUITY
As at
31 December
2021
£’000
As at
31 December
2020
£’000
Note
12
13
14
15
16
17
18
18
14
19
21
21
55,674
7,927
300
63,901
10,093
29,422
12,051
-
51,566
54,017
9,102
493
63,612
12,109
20,988
7,066
829
40,992
115,467
104,604
6,388
-
3,035
9,423
1,384
30,065
20
31,469
40,892
74,575
1,675
78,451
125
7,645
930
2,637
11,212
1,334
25,775
-
27,109
38,321
66,283
1,800
78,451
-
(103,581)
(103,581)
(1,327)
681
98,551
74,575
(1,604)
13
91,204
66,283
The notes on pages 95 to 124 are an integral part of these financial statements.
The financial statements on pages 90 to 124 were approved by the Board of Directors and authorised for issue on 22 March
2022, and were signed on its behalf by:
C Thomson
Director
22 March 2022
92
FINANCIAL STATEMENTSThe Pebble Group plc Annual Report 2021 Consolidated statement of changes in equity
For the year ended 31 December 2021
Share
capital
£’000
Share
premium
£’000
Capital
reserve
£’000
Merger
reserve
£’000
Translation
reserve
£’000
Share-based
payments
reserve
£’000
At 1 January 2020
1,800
78,451
Profit for the year
Other comprehensive
expense for the year
Total comprehensive
income/(expense)
Employee share schemes
– value of employee
services (note 24)
Total transactions with
owners recognised in
equity
-
-
-
-
-
-
-
-
-
-
At 31 December 2020
1,800
78,451
Profit for the year
Other comprehensive
income for the year
Total comprehensive
income
Purchase of deferred
shares
Employee share schemes
– value of employee
services (note 24)
Deferred tax on employee
share schemes
Total transactions with
owners recognised in
equity
-
-
-
(125)
-
-
(125)
-
-
-
-
-
-
-
At 31 December 2021
1,675
78,451
-
-
-
-
-
-
-
-
-
-
125
-
-
125
125
(103,581)
(896)
-
-
-
-
-
-
(708)
(708)
-
-
(103,581)
(1,604)
-
-
-
-
-
-
-
-
277
277
-
-
-
-
(103,581)
(1,327)
-
-
-
-
13
13
13
-
-
-
-
601
67
668
681
The notes on pages 95 to 124 are an integral part of these financial statements.
Retained
earnings
£’000
Total
equity
£’000
87,124
62,898
4,080
4,080
-
(708)
4,080
3,372
-
-
13
13
91,204
66,283
7,347
7,347
-
277
7,347
7,624
-
-
-
-
-
601
67
668
98,551
74,575
93
The Pebble Group plc Annual Report 2021 Consolidated cash flow statement
For the year ended 31 December 2021
Operating profit
Adjustments for:
– Depreciation
– Amortisation
– Share-based payments charge
– Profit on disposal of fixed assets
Cash flows from operating activities before changes in working capital
– Change in inventories
– Change in trade receivables
– Change in trade payables
Cash flows from operating activities
– Income taxes paid
Net cash flows from operating activities
Cash flows from investing activities
– Purchase of property, plant and equipment
– Purchase of intangible assets
Net cash flows used in investing activities
Cash flows from financing activities
– Lease payments
– Interest paid
Net cash flows used in financing activities
NET CASH FLOWS
Cash and cash equivalents at beginning of year
Effect of exchange rate fluctuations on cash held
Cash and cash equivalents at end of year
The notes on pages 95 to 124 are an integral part of these financial statements.
Year ended
31 December
2021
£’000
Year ended
31 December
2020
£’000
Note
9,866
5,669
13
12
24
15
16
19
13
12
8
17
17
1,986
2,811
715
(13)
15,365
2,016
(8,433)
3,556
12,504
(521)
11,983
(680)
(4,602)
(5,282)
(1,360)
(549)
(1,909)
4,792
7,066
193
12,051
1,567
1,963
13
-
9,212
(4,157)
4,556
(2,146)
7,465
(1,313)
6,152
(806)
(4,871)
(5,677)
(1,141)
(700)
(1,841)
(1,366)
8,861
(429)
7,066
94
FINANCIAL STATEMENTSThe Pebble Group plc Annual Report 2021 Notes to the Group financial statements
1. General information
The principal activity of The Pebble Group plc (the
“Company”) is that of a holding company and the principal
activity of the Company and its subsidiaries (the “Group”) is
the sale of products, services and technology to the
promotional merchandise industry. The Group has two
segments, Brand Addition and Facilisgroup. For Brand
Addition this is the sale of promotional products
internationally, to many of the world’s best-known brands,
and for Facilisgroup the provision of technology,
consolidated buying power and community learning and
networking events to SME promotional product distributors
in North America, its Partners, through subscription-based
services.
The Company was incorporated on 27 September 2019 in
the United Kingdom and is a public company limited by
shares registered in England and Wales. The registered
office of the Company is Broadway House, Trafford Wharf
Road, Trafford Park, Manchester, England M17 1DD. The
Company registration number is 12231361.
2. Accounting policies
(a) Basis of preparation
The Group financial statements have been prepared in
accordance with UK-adopted International Accounting
Standards and with the requirements of the Companies
Act 2006 as applicable to companies reporting under those
standards. The Company financial statements have been
prepared under FRS 102. Both financial statements have
been prepared on the historical cost basis with the
exception of certain items which are measured at fair value
as disclosed in the principal accounting policies set out
below. These policies have been consistently applied to all
years presented unless otherwise stated.
The financial information is presented in Sterling and has
been rounded to the nearest thousand (£’000).
(b) Going concern
The Group meets its day-to-day working capital
requirements through its own cash balances and committed
banking facilities. In assessing the appropriateness of
adopting the going concern basis in the preparation of
these financial statements, the Directors have prepared
cash flow forecasts and projections for the two years
ending 31 December 2023.
The forecasts and projections, which the Directors consider
to be prudent, have been further sensitised by applying
reductions to revenue growth and margin, to consider a
severe but plausible downside. Under both the base and
sensitised case the Group is expected to have headroom
against covenants, which are based on interest cover and
net leverage, and a sufficient level of financial resources
available through existing facilities when the future funding
requirements of the Group are compared with the level of
committed available facilities. Based on this, the Directors
are satisfied that the Group has adequate resources to
continue in operational existence for the foreseeable
future. For this reason, they continue to adopt the going
concern basis in preparing the Group and Company financial
statements.
(c) Forward-looking statements
Certain statements in this Annual Report are forward
looking with respect to the operations, strategy,
performance, financial condition and growth opportunities
of the Group. The terms “expect”, “anticipate”, “should
be”, “will be”, “is likely to” and similar expressions identify
forward-looking statements. Although the Board believes
that the expectations reflected in these forward-looking
statements are reasonable, by their nature these
statements are based on assumptions and are subject to a
number of risks and uncertainties. Actual events could differ
materially from those expressed or implied by these
forward-looking statements. Factors which may cause
future outcomes to differ from those foreseen in forward-
looking statements include, without limitation: general
economic conditions and business conditions in the Group’s
markets; customers’ expectations and behaviours; supply
chain developments; technology changes; the actions of
competitors; exchange rate fluctuations; and legislative,
fiscal and regulatory developments. Information contained
in these financial statements relating to the Group should
not be relied upon as a guide to future performance.
(d) New standards, amendments and
interpretations
New and amended standards adopted by the Group
The Group has applied the following standards and
amendments for the first time for their annual reporting
period commencing 1 January 2021:
• Amendments to IFRS 7, IFRS 4 and IFRS 16 Interest rate
benchmark reform – Phase 2
The amendment listed above did not have any impact on
the amounts recognised in prior periods and is not
expected to significantly affect the current or future
periods.
New standards and interpretations not yet adopted
Certain new accounting standards and interpretations have
been published that are not mandatory for 31 December
2021 reporting periods and have not been early adopted by
the Group. These standards are not expected to have a
material impact on the Group in the current or future
reporting periods and on foreseeable future transactions.
Judgements made by the Directors in the application of
these accounting policies that have a significant effect on
these financial statements together with estimates with a
significant risk of material adjustment in the next year are
discussed in note 3.
(e) Basis of consolidation
Subsidiaries are all entities over which the Group has
control. The Group controls an entity when the Group is
exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect
those returns through its power over the entity. Subsidiaries
are fully consolidated from the date on which control is
transferred to the Group and are deconsolidated from the
date control ceases.
Inter-company transactions, balances and unrealised gains
and losses on transactions between Group companies are
eliminated. Accounting policies of subsidiaries have been
changed where necessary to ensure consistency with the
policies adopted by the Group.
95
The Pebble Group plc Annual Report 2021 Notes to the Group financial statements
(continued)
2. Accounting policies (continued)
(f) Revenue
Revenue arises from the provision of services through
technology and a global infrastructure that enables the
efficient sale and distribution of products to support
corporate marketing activity and consumer promotions of
businesses in Europe, North America and Asia.
To determine whether to recognise revenue, the Group
follows the 5-step process as set out within IFRS 15:
1. Identifying the contract with a customer
2. Identifying the performance obligations
3. Determining the transaction price
4. Allocating the transaction price to the performance
obligations
5. Recognising revenue when/as performance obligation(s)
are satisfied
Revenue is measured at transaction price, stated net of VAT,
rebates and other sales related taxes.
Revenue is recognised either at a point in time, or over-
time as the Group satisfies performance obligations by
transferring the promised goods and services to its
customers as described below. Variable consideration, in
the form of rebates, is recognised at a point in time.
Brand Addition sale of promotional product
Contracts with customers take the form of customer orders
under a framework agreement. There is one distinct
performance obligation, being the design, sourcing and
distribution of products to the customer, for which the
transaction price is clearly identified. Revenue is recognised
at a point in time when the Group satisfies performance
obligations by transferring the promised goods to its
customers, i.e. when control has passed from the Group to
the customer. This tends to be on receipt of the product by
the customer.
Customer invoices tend to be raised when the goods are
delivered and the performance obligation is satisfied. These
invoices are shown within trade receivables and payment is
usually made within 60 days (being the common payment
terms). In cases where the goods have been delivered and
an invoice cannot be raised at that time, the income is
accrued and presented within contract assets on the
statement of financial position. A small number of
customers are invoiced in advance and these amounts are
deferred and presented within contract liabilities.
Facilisgroup provision of technology, consolidated
buying power and community learning through
subscription-based services
Services are provided through signed annual partner
agreements. There is one distinct performance obligation,
being the provision of access to the Facilisgroup network.
The transaction price is set on 1 January each year by
reference to the previous year sales volumes and is fixed for
the financial year. For new partners, the transaction price is
calculated by reference to forecasted sales for the year the
partner joins. Revenue is recognised over time on a monthly
96
basis as the partners receive the benefits of being part of
the network. Payments are received on a monthly basis as
the performance obligations are satisfied over time.
(g) EBITDA and Adjusted EBITDA
Earnings before Interest, Taxation, Depreciation and
Amortisation (“EBITDA”) and Adjusted EBITDA are non-GAAP
measures used by management to assess the operating
performance of the Group. EBITDA is defined as operating
profit before depreciation and amortisation. Exceptional
items and share-based payment charge are excluded from
EBITDA to calculate Adjusted EBITDA.
The Directors primarily use the Adjusted EBITDA measure
when making decisions about the Group’s activities. As
these are non-GAAP measures, EBITDA and Adjusted
EBITDA measures used by other entities may not be
calculated in the same way and hence are not directly
comparable.
(h) Exceptional items
The Group’s income statement separately identifies
exceptional items. Such items are those that in the
Directors’ judgement are one-off in nature or non-
operating and need to be disclosed separately by virtue of
their size or incidence and may include, but are not limited
to, restructuring costs, professional fees and other costs
directly related to the purchase of businesses, and the
raising of capital. In determining whether an item should be
disclosed as an exceptional item, the Directors consider
quantitative and qualitative factors such as the frequency,
predictability of occurrence and significance. This is
consistent with the way financial performance is measured
by management and reported to the Board.
(i) Taxation
Current tax is provided at amounts expected to be paid (or
recovered) using the tax rates and laws that have been
enacted or substantively enacted by the balance sheet
date.
Deferred tax is recognised in respect of all timing
differences that have originated but not reversed at the
balance sheet date where events or transactions that result
in an obligation to pay more tax in the future, or a right to
pay less tax in future, have occurred at the balance sheet
date. Timing differences are differences between the
Group’s taxable profits and its results as stated in the
financial statements that arise from the inclusion of gains
and losses in tax assessments in periods different from
those in which they are recognised in the financial
statements. Deferred income tax assets and liabilities are
offset when there is a legally enforceable right to offset
current tax assets against current tax liabilities and when the
deferred income taxes relate to the same fiscal authority.
A net deferred tax asset is regarded as recoverable and
therefore recognised only to the extent that, on the basis of
all available evidence, it can be regarded as more likely than
not that there will be suitable taxable profits from which the
future reversal of the underlying timing differences can be
deducted.
The Pebble Group plc Annual Report 2021FINANCIAL STATEMENTS 2. Accounting policies (continued)
Deferred tax is measured at the average tax rates that are
expected to apply in the periods in which the timing
differences are expected to reverse based on tax rates and
laws that have been enacted or substantively enacted by
the balance sheet date. Deferred tax is measured on a
non-discounted basis.
Current and deferred tax is recognised in profit or loss,
except to the extent that it relates to items recognised in
other comprehensive income or directly in equity. In this
case, the tax is also recognised in other comprehensive
income or directly in equity, respectively.
(j) Finance costs
Finance costs of financial liabilities are recognised in the
income statement over the term of such instruments at a
constant rate on the carrying amount. Issue costs relating to
financial instruments are recognised in the income
statement over the term of the debt at a constant rate over
the instrument’s life. Foreign exchange differences on
revaluation of foreign currency borrowings are also
presented within finance costs.
(k) Intangible assets
All business combinations are accounted for by applying the
purchase method. Goodwill represents the difference
between the cost of the acquisition and the fair value of the
net identifiable assets acquired. Identifiable intangibles are
those which can be sold separately, or which arise from
legal or contractual rights regardless of whether those
rights are separable and are initially recognised at fair value.
In cases where the vendors of an acquired business are
required to remain employed by the Group post-
acquisition, the deferred payments are treated as post-
acquisition remuneration and charged to profit and loss.
Goodwill is stated at cost less any accumulated impairment
losses. Goodwill is allocated to cash-generating units and is
not amortised but is tested annually for impairment. Other
intangibles are stated at cost less accumulated amortisation
and accumulated impairment losses.
All intangible assets are denominated in the functional
currency of the relevant subsidiary company and
retranslated into Sterling at each period end date. Exchange
differences are dealt with through the Consolidated
statement of other comprehensive income. Intangible
assets are presented in note 12.
Customer relationships
Customer relationships acquired in a business combination
are recognised at fair value at the date of acquisition.
Customer relationships have a finite life and are
subsequently carried at cost less accumulated amortisation.
Amortisation is calculated using the straight-line method to
allocate the cost of these assets over their estimated useful
lives of 20 years.
Development costs
Research costs are charged to the income statement in the
year in which they are incurred and are presented within
operating expenses. Internal development costs that are
incurred during the development of significant and
separately identifiable new technology are capitalised when
the following criteria are met:
• it is technically feasible to complete the technological
development so that it will be available for use;
• management intends to complete the technological
development and use or sell it;
• it can be demonstrated how the technological
development will develop probable future economic
benefits;
• adequate technical, financial and other resources to
complete the development and to use or sell the product
are available; and
• expenditure attributable to the technological product
during its development can be reliably measured.
Capitalised development costs include costs of materials
and direct labour costs. Internal costs that are capitalised
are limited to incremental costs specific to the project.
Other development expenditures that do not meet these
criteria are recognised as an expense as incurred and
presented within operating expenses, together with any
amortisation which is charged to the income statement on
a straight-line basis over the estimated useful lives of
development intangible assets.
Assets classified as “work in progress” are not amortised as
such assets are not currently available for (or in) use. Once
available for use, assets will be recategorised and amortised
at the rate appropriate to their classification.
Computer software
Computer software purchased separately, that does not
form an integral part of related hardware, is capitalised at
cost.
Amortisation is charged to profit or loss on a straight-line
basis over the estimated useful lives of intangible assets
unless such lives are indefinite and is presented within
operating expenses. All intangible assets are amortised from
the date they are available for use. The estimated useful
lives are as follows:
• Customer relationships – 20 years;
• Computer software – 3-5 years;
• Development costs – 3 years.
(l) Impairment losses
The carrying amounts of the Group’s assets are tested for
impairment. Assets with an indefinite useful life are not
depreciated or amortised but are tested for impairment at
each reporting date. Assets subject to amortisation/
depreciation and impairment losses are tested for
impairment every time events or circumstances indicate
that they may be impaired.
97
The Pebble Group plc Annual Report 2021 Notes to the Group financial statements
(continued)
2. Accounting policies (continued)
Impairment losses are recognised in the income statement
based on the difference between the carrying amount and
the recoverable amount.
An impairment loss is recognised for the amount by which
the asset’s carrying amount exceeds its recoverable
amount, which is the higher of fair value less costs of
disposal and value in use. To determine the value in use,
management estimates expected future cash flows and
determines a suitable discount rate in order to calculate the
present value of those cash flows. The data used for
impairment testing procedures are directly linked to the
Group’s latest approved budget, adjusted as necessary to
exclude the effects of future reorganisations and asset
enhancements. Discount factors are determined individually
for each asset and reflect current market assessments of
the time value of money and asset-specific risk.
The Group makes use of a simplified approach in accounting
for trade and other receivables as well as contract assets
and records the loss allowance as lifetime expected credit
losses. These are the expected shortfalls in contractual
cash flows, considering the potential for default at any point
during the life of the financial instrument. In calculating, the
Group uses its historical experience, external indicators and
forward-looking information to calculate the expected
credit losses.
The Group assesses impairment of trade receivables on a
collective basis as they possess shared credit risk
characteristics; they have been grouped based on the days
past due.
(m) Financial instruments
The Group’s policy is to recognise transfers into and out of
fair value hierarchy levels as at the end of the reporting
period.
Level 1: The fair value of financial instruments traded in
active markets (such as publicly traded derivatives, and
equity securities) is based on quoted market prices at the
end of the reporting period. The quoted market price used
for financial assets held by the Group is the current bid
price. These instruments are included in level 1.
Level 2: The fair value of financial instruments that are not
traded in an active market (for example, over-the-counter
derivatives) is determined using valuation techniques which
maximise the use of observable market data and rely as
little as possible on entity-specific estimates. If all significant
inputs required to fair value an instrument are observable,
the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based
on observable market data, the instrument is included in
level 3. This is the case for unlisted equity securities.
Financial assets
Non-derivative financial assets are classified as either
financial assets at amortised cost, fair value through profit
or loss or fair value through other comprehensive income.
The Group derecognises a financial asset when the
contractual rights to the cash flows from the asset expire,
or it transfers the rights to receive the contractual cash
flows in a transaction in which substantially all of the risks
98
and rewards of ownership of the financial asset are
transferred. The basis of classification depends on the
Group’s business model and the contractual cash flow
characteristics of the financial asset. The majority of
financial assets of the Group are held at amortised cost.
Financial assets include trade and other receivables and
cash and cash equivalents. Trade and other receivables are
amounts due from customers for services performed in the
ordinary course of business. If collection is expected in one
year or less, they are classified as current assets. If not, they
are presented as non-current assets. Cash and cash
equivalents comprise cash balances held in banks.
Trade receivables are recognised initially at fair value and
subsequently measured at amortised cost using the
effective interest method, less provision for impairment.
Under IFRS 9, the Group elected to use the simplified
approach to measure the loss allowance at an amount equal
to lifetime expected credit losses for trade receivables. A
provision for impairment of trade receivables is established
when there is objective evidence that the Group will not be
able to collect all amounts due according to the original
terms of the receivables. Significant financial difficulties of
the counterparty, probability that the counterparty will
enter bankruptcy or financial reorganisation, and default or
delinquency in payments are considered indicators that the
trade receivable is impaired. In addition, IFRS 9 requires the
Group to consider forward-looking information and the
probability of default when calculating expected credit
losses. The measurement of expected credit losses reflects
an unbiased and probability weighted amount that is
determined by evaluating the range of possible outcomes as
well as incorporating the time value of money. The expected
loss rates are based on the payment profiles of sales over
the year and the corresponding historical credit losses
experienced within this period. The historical loss rates are
adjusted to reflect current and forward-looking information
on factors affecting the ability of the customers to settle
the receivables.
The Group considers reasonable and supportable
customer-specific and market information about past
events, current conditions and forecasts of future economic
conditions when measuring expected credit losses. The
amount of the provision is the difference between the
carrying amount and the present value of estimated future
cash flows of the asset, discounted, where material, at the
original effective interest rate. The carrying amount of the
asset is reduced through the use of an allowance account,
and the amount of the loss is recognised in the income
statement within operating expenses.
When a trade receivable is uncollectable, it is written off
against the allowance account for trade receivables.
Subsequent recoveries of amounts previously written off
are credited against operating expenses in the income
statement. Only when amounts are confirmed irrecoverable,
are they written off to the income statement.
The Pebble Group plc Annual Report 2021FINANCIAL STATEMENTS 2. Accounting policies (continued)
Financial liabilities
Non-derivative financial liabilities are initially recognised at
fair value less any directly attributable transaction costs.
Subsequent to initial recognition, these liabilities are
measured at amortised cost using the effective interest
method. The Group’s borrowings, finance leases, trade and
most other payables fall into this category of financial
instruments.
The Group derecognises a financial liability when its
contractual obligations are discharged, cancelled or expire.
Financial derivatives
The Group uses derivative financial instruments to hedge its
exposure to risks arising from operational activities,
principally foreign exchange risk. In accordance with
treasury policy, the Group does not hold or issue derivative
financial instruments for trading purposes. The Group does
not hedge account for these items. Any gain or loss arising
from derivative financial instruments is based on changes in
fair value, which is determined by direct reference to active
market transactions or using a valuation technique where no
active market exists. At certain times the Group has foreign
currency forward contracts that fall into this category.
(n) Foreign currencies
Items included in the financial statements are measured
using the currency of the primary economic environment in
which the Group operates (“the functional currency”).
The functional and presentational currency is Pounds
Sterling.
The functional currency of a subsidiary is determined based
on specific primary and secondary factors including the
principal currency of the cash flows and the primary
economic environment in which the subsidiary operates.
Once determined, the functional currency is used and
translated for consolidation purposes.
Foreign currency items are translated using the transaction
date exchange rate. Monetary assets and liabilities
denominated in foreign currencies are translated at the
closing rate. Foreign currency differences are taken to the
income statement. Non-monetary assets and liabilities that
are measured based on historical cost in a foreign currency
are translated at the transaction date exchange rate.
The assets and liabilities of foreign operations, including
goodwill and fair value adjustments arising on consolidation,
are translated at closing rates. The income and expenses of
foreign operations are translated at the average exchange
rate of the year which approximates to the transaction date
exchange rates. Exchange differences arising on
consolidation are presented within other comprehensive
income.
(o) Tangible assets and depreciation
Tangible fixed assets are stated at historical purchase cost
less accumulated depreciation. Cost includes the original
purchase price of the asset and the costs attributable to
bringing the asset to its working condition for its intended
use.
Depreciation is calculated so as to write off the cost of an
asset, less its estimated residual value, over the useful
economic life of that asset as follows:
• Fixtures and fittings – 3 - 15 years;
• Computer hardware – 5 years.
(p) Cash and cash equivalents
Cash and cash equivalents comprise cash balances. Bank
borrowings that are repayable on demand and form an
integral part of the Group’s cash management are included
as a component of cash and cash equivalents for the
purpose only of the statement of cash flows.
(q) Inventories
Inventories are valued at the lower of cost and net realisable
value on a FIFO basis. Cost comprises purchase price plus
associated freight and duty costs for imported goods.
Inventories are regularly assessed for evidence of
impairment. Where such evidence is identified, a provision
is recognised to reduce the value of stock to its selling price
after incurring any future costs to sell.
(r) Leases
The Group applies IFRS 16 to account for leases.
At inception of a contract, the Group assesses whether a
contract is, or contains, a lease. A contract is, or contains,
a lease if the contract conveys the right to control the use
of an identified asset for a period of time in exchange for
consideration.
The Group recognises a right-of-use asset and a lease
liability at the lease commencement date. The right-of-use
asset is initially measured at cost, which comprises the
initial amount of the lease liability adjusted for any lease
payments made at or before the commencement date, plus
any initial direct costs incurred and an estimate of costs to
restore the underlying asset, less any lease incentives
received. Extension and termination options are included in
a number of property and equipment leases across the
Group and so lease payments to be made under reasonably
certain extension options are also included in the
measurement of the liability.
The right-of-use asset is subsequently depreciated using
the straight-line method from the commencement date to
the earlier of the end of the useful life of the right-of-use
asset or the end of the lease term. In addition, the
right-of-use asset is periodically reduced by impairment
losses, if any, and adjusted for certain remeasurements of
the lease liabilities.
The lease liability is initially measured at the present value of
lease payments that were not paid at the commencement
date, discounted using the Group’s incremental borrowing
rate, which is based on the Group’s financing facilities, and
adjusted where necessary for the specific terms of the
lease.
The lease liability is measured at amortised cost using the
effective interest method. If there is a remeasurement of
the lease liability, a corresponding adjustment is made to
the carrying amount of the right-of-use asset, or is
recorded directly in profit or loss if the carrying amount of
the right-of-use asset is zero.
99
The Pebble Group plc Annual Report 2021 Notes to the Group financial statements
(continued)
2. Accounting policies (continued)
The Group presents right-of-use assets within property,
plant and equipment in note 13.
Short-term leases and low value assets
The Group has elected not to recognise right-of-use assets
and lease liabilities for short-term lease of machinery that
have a lease term of 12 months or less or leases of low value
assets. These lease payments are expensed on a straight-
line basis over the lease term.
(s) Segmental reporting
The Group reports its business activities in two areas being:
• Brand Addition - sale of promotional product through
services provided under framework contracts on an
international basis; and
• Facilisgroup - provision of technology, consolidated buying
power and community learning and networking events to
SME promotional product distributors in North America
through subscription-based services.
This is reported in a manner consistent with the internal
reporting to the Executive Directors, which has been
identified as the Chief Operating Decision Maker.
(t) Employee benefits
The Group provides a range of benefits to employees,
including annual bonus arrangements, paid holiday
arrangements and defined contribution pension plans.
(i) Short-term benefits
Short-term benefits, including holiday pay and other similar
non-monetary benefits, are recognised as an expense in the
period in which the service is received.
(ii) Defined contribution pension plans
The Group operates a number of country-specific defined
contribution plans for its employees. A defined contribution
plan is a pension plan under which the Group pays fixed
contributions into a separate entity. Once the contributions
have been paid, the Group has no further payment
obligations. The contributions are recognised as an expense
when they are due. Amounts not paid are included in
accruals within trade and other payables in the statement
of financial position. The assets of the plans are held
separately from the Group in independently administered
funds.
(iii) Share-based payments
Equity-settled awards are valued at the grant date, and the
fair value is charged as an expense in the income statement
spread over the vesting period. Fair value of the awards are
measured using an adjusted form of the Black-Scholes
model which includes a Monte Carlo simulation model. The
fair value of the options, appraised at the grant date,
includes the impact of market-based vesting conditions if
applicable.
Share-based remuneration is recognised as an expense in
profit or loss with the credit side of the entry being
recorded in equity.
Non-market vesting conditions are included in assumptions
about the number of options that are expected to become
exercisable. Estimates are subsequently revised if there is
100
any indication that the number of share options expected
to vest differs from previous estimates. Any adjustment to
cumulative share-based compensation resulting from a
revision is recognised in the current period. The number of
vested options ultimately exercised by holders does not
impact the expense recorded in any period.
(u) Government grants
In preparing the financial statements, IAS 20, ’Accounting for
Government Grants and Disclosure of Government
Assistance’ has been applied such that grants have been
recognised in profit or loss on a systematic basis over the
periods in which we have recognised the expense for the
related costs for which the grants are intended to
compensate. In Germany, a benefit of £0.5m has been
received and credited to the income statement in 2021.
This relates to Bridging Assistance for companies that have
suffered a decline in revenue as a result of the pandemic.
There are no unfulfilled conditions or other contingencies
attached to this grant.
In 2020, as part of the Coronavirus Job Retention Scheme,
a benefit of £1.0 million was credited to the income
statement. A further benefit of $0.9 million had been
received in the US and credited to the income statement
against costs incurred, along with a further £0.3m taken in
other countries.
(v) Equity, reserves and dividend payments
Share capital
Share capital represents the nominal (par) value of shares
that have been issued.
Share premium
Share premium represents the difference between the
nominal value of shares issued and the fair value of
consideration received. Any transaction costs associated
with the issuing of shares are deducted from share
premium, net of any related income tax benefits.
Capital reserve
The capital reserve was created in 2021 as a result of the
purchase by the Company of all deferred shares in issue.
Merger reserve
The merger reserve was created as a result of the share for
share exchange under which The Pebble Group plc became
the parent undertaking prior to the Initial Public Offering
(“IPO”). Under merger accounting principles, the assets and
liabilities of the subsidiaries were consolidated at book
value in the Group financial statements and the
consolidated reserves of the Group were adjusted to
reflect the statutory share capital, share premium and
other reserves of the Company as if it had always existed,
with the difference presented as the merger reserve.
Translation reserve
The translation reserve includes foreign currency translation
differences arising from the translation of financial
statements of the Group’s foreign entities.
The Pebble Group plc Annual Report 2021FINANCIAL STATEMENTS 2. Accounting policies (continued)
Retained earnings
Retained earnings includes all current and prior period
retained profits and losses.
All transactions with owners of the parent are recorded
separately within equity.
Dividends are recognised when approved by the Group’s
shareholders or, in the case of interim dividends, when the
dividend has been paid. No interim dividend has been paid
in the year (2020: £nil). The Directors do not recommend
the payment of a final dividend (2020: £nil).
3. Judgements in applying accounting policies
and key sources of estimation uncertainty
In the preparation of the Group financial statements, the
Directors, in applying the accounting policies of the Group,
make some judgements and estimates that affect the
reported amounts in the financial statements. The following
are the areas requiring the use of judgement and estimates
that may significantly impact the financial statements:
(a) Accounting estimates
Information about estimates and assumptions that may have
the most significant effect on recognition and measurement
of assets, liabilities, income and expenses is provided below.
Actual results may be substantially different.
Goodwill impairment
The Group tests goodwill for impairment every year in
accordance with the relevant accounting policies. The
recoverable amounts of cash-generating units are
determined by calculating value in use. These calculations
require the use of estimates.
Goodwill relates to the various acquisitions made and
amounts to £35,805,000 as at 31 December 2021. The
estimates used in the impairment calculation are set out in
note 12. There is no significant risk of material adjustment to
the carrying amount of the goodwill within the next
twelve months.
Valuation of acquired intangibles
IFRS 3 requires separately identifiable intangible assets to
be recognised on acquisitions. The principal estimates used
in valuing the acquired intangible assets are the future cash
flows estimated to be generated from these contracts,
expected customer attrition, growth in revenues and the
selection of appropriate discount rates to apply to the cash
flows. The Directors’ assessment of these estimates is
based on up-to-date information and evidence available at
the time of finalising the valuation. There is no significant
risk of material adjustment to the carrying amount of the
intangible assets within the next twelve months.
Useful economic lives of intangible assets
The Directors have estimated the useful economic lives of
the acquired customer intangible assets to be 20 years
based upon attrition rates and the Directors’ judgement.
These lives are reviewed and updated annually. There is no
significant risk of material adjustment to the carrying
amount of the intangible assets within the next
twelve months.
Useful economic lives of property, plant and
equipment
Property, plant and equipment is depreciated over the
useful lives of the assets. Useful lives are based on
management’s estimates of the period that the assets will
generate revenue, which are reviewed annually for
continued appropriateness. The carrying values are tested
for impairment when there is an indication that the value of
the assets might be impaired. When carrying out
impairment tests these would be based upon future cash
flow forecasts and these forecasts would be based upon
management judgement. Future events could cause the
assumptions to change, therefore, this could have an
adverse effect on the future results of the Group. There is
no significant risk of material adjustment to the carrying
amount of the property, plant and equipment within the
next twelve months.
The useful economic lives applied are set out in the
accounting policies and are reviewed annually.
(b) Accounting judgements
The following are the areas requiring the use of judgement
that may significantly impact the Group financial statements:
Capitalisation of internal development costs
Distinguishing the research and development phases of a
new customised project and determining whether the
recognition requirements for the capitalisation of
development costs are met requires judgement. After
capitalisation, management monitors whether the
recognition requirements continue to be met and at what
point amortisation should commence, in addition to
whether there are any indicators that capitalised costs may
be impaired.
Capitalised development expenditure is analysed further in
note 12.
4. Segmental analysis
The Chief Operating Decision Maker (“CODM”) has been
identified as the Executive Directors. The Directors have
determined that the operating segments, based on these
reports, are:
• Brand Addition - sale of promotional product through
complex services provided under framework contracts on
an international basis; and
• Facilisgroup - provision of technology, consolidated buying
power and community learning and networking events to
SME promotional product distributors in North America
through subscription-based services.
Segment information about the above businesses is
presented on the following page.
The Executive Directors assess the performance of the
operating segments based on Adjusted EBITDA. Other
information provided to the Directors is measured in a
manner consistent with that in the financial statements.
Inter-segment transactions are entered into under the
normal commercial terms and conditions that would also be
available to unrelated third parties. Segment assets exclude
centrally held cash at bank and in hand.
101
The Pebble Group plc Annual Report 2021 Notes to the Group financial statements
(continued)
4. Segmental analysis (continued)
Major customers
In 2021 there were two major customers that individually accounted for at least 10% of total revenues (2020: two
customers). The revenues relating to these customers in 2021 were £33,215,000 (2020: £21,079,000) and both related to
the Brand Addition segment.
Analysis of revenue by geographical destination
United Kingdom
Continental Europe
US
Rest of World
Total revenue
Year ended
31 December
2021
£’000
Year ended
31 December
2020
£’000
26,961
38,914
31,675
17,551
115,101
22,274
24,741
25,332
10,027
82,374
The geographical revenue information above is based on the location of the customer.
Included within Rest of World is £11,638,000 of revenue from China.
All the above revenues are generated from contracts with customers and are recognised at a point in time or over time as
follows:
At a point in time
Over time
Total revenue
Year ended
31 December
2021
£’000
Year ended
31 December
2020
£’000
102,916
12,185
115,101
73,135
9,239
82,374
All non-current assets of the Group reside in the UK, with the exception of non-current assets with a net book value of
£27,111,000 (2020: £26,396,000) which were located in North America and £711,000 (2020: £760,000) located in other
foreign countries.
102
The Pebble Group plc Annual Report 2021FINANCIAL STATEMENTS 4. Segmental analysis (continued)
Income statement for the year ended 31 December 2021
Revenue
Cost of goods sold
Gross profit
Operating expenses
Total operating expenses
Operating profit/(loss)
Analysed as:
Adjusted EBITDA
Depreciation
Amortisation
Share-based payment charge
Total operating profit/(loss)
Finance expense
Profit/(loss) before taxation
Income tax (expense)/income
Profit/(loss) for the year
Brand
Addition
£’000
102,383
(73,128)
29,255
(22,133)
Facilisgroup
£’000
12,718
-
12,718
(7,577)
Central
operations
£’000
Year ended
31 December
2021
£’000
-
-
-
115,101
(73,128)
41,973
(2,397)
(32,107)
(22,133)
(7,577)
(2,397)
(32,107)
7,122
5,141
(2,397)
9,866
9,932
(1,410)
(1,136)
(264)
7,122
(378)
6,744
(865)
5,879
7,581
(533)
(1,675)
(232)
(2,135)
(43)
-
(219)
5,141
(2,397)
(26)
5,115
(1,131)
3,984
(145)
(2,542)
26
(2,516)
15,378
(1,986)
(2,811)
(715)
9,866
(549)
9,317
(1,970)
7,347
103
The Pebble Group plc Annual Report 2021 Brand
Addition
£’000
Facilisgroup
£’000
Central
operations
£’000
As at
31 December
2021
£’000
37,728
4,766
146
17,946
3,083
58
42,640
21,087
10,093
25,415
10,335
45,843
88,483
4,018
-
4,018
985
26,500
28
27,513
31,531
56,952
-
3,930
1,230
5,160
26,247
2,349
3,035
5,384
328
2,752
36
3,116
8,500
17,747
-
78
96
174
-
77
486
563
737
21
-
21
71
813
(44)
840
861
(124)
55,674
7,927
300
63,901
10,093
29,422
12,051
51,566
115,467
6,388
3,035
9,423
1,384
30,065
20
31,469
40,892
74,575
Notes to the Group financial statements
(continued)
4. Segmental analysis (continued)
Statement of financial position as at 31 December 2021
ASSETS
Non-current assets
Intangible assets
Property, plant and equipment
Deferred tax asset
Total non-current assets
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Total current assets
TOTAL ASSETS
LIABILITIES
Non-current liabilities
Lease liability
Deferred tax liability
Total non-current liabilities
Current liabilities
Lease liability
Trade and other payables
Current tax liability/(asset)
Total current liabilities
TOTAL LIABILITIES
NET ASSETS/(LIABILITIES)
104
The Pebble Group plc Annual Report 2021FINANCIAL STATEMENTS 4. Segmental analysis (continued)
Income statement for the year ended 31 December 2020
Revenue
Cost of goods sold
Gross profit
Operating expenses
Operating expenses – exceptional
Total operating expenses
Operating profit/(loss)
Analysed as:
Adjusted EBITDA
Depreciation
Amortisation
Share-based payment charge
Exceptional items
Total operating profit/(loss)
Finance expense
Profit/(loss) before taxation
Income tax (expense)/income
Profit/(loss) for the year
Brand
Addition
£’000
72,608
(51,382)
21,226
(18,233)
(429)
Facilisgroup
£’000
Central
operations
£’000
Year ended
31 December
2021
£’000
9,766
-
9,766
(5,077)
(42)
-
-
-
82,374
(51,382)
30,992
(1,471)
(24,781)
(71)
(542)
(18,662)
(5,119)
(1,542)
(25,323)
2,564
4,647
(1,542)
5,669
5,209
(1,316)
(900)
-
(429)
2,564
(433)
2,131
(176)
1,955
5,994
(242)
(1,063)
-
(42)
(1,448)
(9)
-
(14)
(71)
4,647
(1,542)
(29)
4,618
(1,182)
3,436
(238)
(1,780)
469
(1,311)
9,755
(1,567)
(1,963)
(14)
(542)
5,669
(700)
4,969
(889)
4,080
105
The Pebble Group plc Annual Report 2021 Brand
Addition
£’000
Facilisgroup
£’000
Central
operations
£’000
As at
31 December
2020
£’000
37,839
5,558
23
16,178
3,424
-
43,420
19,602
12,109
19,353
5,677
310
37,449
-
1,571
538
474
2,583
-
120
470
590
-
64
851
45
960
54,017
9,102
493
63,612
12,109
20,988
7,066
829
40,992
80,869
22,185
1,550
104,604
4,893
-
-
4,893
1,096
22,995
24,091
28,984
51,885
2,661
930
2,637
6,228
218
2,181
2,399
8,627
13,558
91
-
-
91
20
599
619
710
840
7,645
930
2,637
11,212
1,334
25,775
27,109
38,321
66,283
Notes to the Group financial statements
(continued)
4. Segmental analysis (continued)
Statement of financial position as at 31 December 2020
ASSETS
Non-current assets
Intangible assets
Property, plant and equipment
Deferred tax asset
Total non-current assets
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Current tax asset
Total current assets
TOTAL ASSETS
LIABILITIES
Non-current liabilities
Lease liability
Trade and other payables
Deferred tax liability
Total non-current liabilities
Current liabilities
Lease liability
Trade and other payables
Total current liabilities
TOTAL LIABILITIES
NET ASSETS
106
The Pebble Group plc Annual Report 2021FINANCIAL STATEMENTS 5. Expenses by nature
Inventory recognised as an expense
Other cost of sales
Total cost of sales
Staff costs (note 6)
Exceptional items (note 7)
Depreciation of property, plant and equipment (note 13)
Amortisation of intangible assets (note 12)
Auditors’ remuneration (note 9)
Share-based payment charge (note 24)
Foreign exchange loss/(gain) and movement in foreign exchange derivative contracts
Increase in provision for expected credit losses
Other external charges
Total operating expenses
Total cost of sales and operating expenses
Year ended
31 December
2021
£’000
Year ended
31 December
2020
£’000
60,881
12,247
73,128
20,239
-
1,986
2,811
211
715
4
13
6,128
32,107
105,235
45,686
5,696
51,382
15,832
542
1,567
1,963
233
14
(47)
12
5,207
25,323
76,705
Depreciation and amortisation are charged to operating expenses in the income statement.
Other external charges include a credit of £500,000 (2020: £nil) from the use of Government schemes.
6. Staff costs
Personnel costs are analysed below:
Staff costs (including Directors) consist of:
Wages and salaries
Social security costs
Other pension costs
Total staff costs
Year ended
31 December
2021
£’000
Year ended
31 December
2020
£’000
17,676
2,001
562
20,239
13,861
1,540
431
15,832
Additional staff costs of £3,667,000 (2020: £1,688,000) have been capitalised as intangible assets (see note 12).
Wages and salaries
Social security costs
Other pension costs
Total staff costs
Year ended
31 December
2021
£’000
Year ended
31 December
2020
£’000
3,615
1,660
32
20
18
10
3,667
1,688
In 2020, savings of £2,000,000 from the use of Government furlough or equivalent schemes were credited to wages and
salaries in the year.
107
The Pebble Group plc Annual Report 2021 Notes to the Group financial statements
(continued)
6. Staff costs (continued)
Defined contribution scheme
The amount recognised in the income statement as an expense in relation to the Group’s defined contribution schemes is
£562,000 (2020: £431,000). Included within accruals and other creditors is £23,000 (2020: £15,000) for outstanding
contributions to the defined contribution schemes.
During the year, the monthly average number of the Group’s employees (including Executive Directors and temporary
employees) was as follows:
By function:
Management
Sales and distribution
Administration
Total employees
Year ended
31 December
2021
No.
Year ended
31 December
2020
No.
17
226
218
461
13
221
200
434
Key management compensation
Key management of the Group is considered to be the Board of Directors. Details of Directors’ remuneration is disclosed in
the Report of the Remuneration Committee on page 76. Remuneration paid to these individuals on an aggregated basis is
as follows:
Salaries including bonuses and social security costs
Pension contributions
Short term benefits
Total remuneration
7. Operating expenses - exceptional
Reorganisation and restructuring
Transaction costs
Total exceptional
Year ended
31 December
2021
£’000
Year ended
31 December
2020
£’000
860
-
26
886
541
10
-
551
Year ended
31 December
2021
£’000
Year ended
31 December
2020
£’000
-
-
-
430
112
542
Exceptional items relate to the following:
• reorganisation and restructuring – in 2020, costs were incurred in Brand Addition as a result of changes made to
headcount to align people costs with anticipated ongoing sales volumes; and
• transaction costs - incremental external costs related to the acquisition of software assets and a license in 2020.
108
The Pebble Group plc Annual Report 2021FINANCIAL STATEMENTS 8. Finance expense
An analysis is set out below:
Other interest
Unwind of discount finance costs on lease liabilities
Total finance expense
9. Auditors’ remuneration
Fees payable to the Company’s auditors for the audit of The Pebble Group plc
Fees payable to the Company’s auditors in respect of:
Audit of the Company’s subsidiaries
Total auditors’ remuneration
10. Income tax expense
Current income tax
- UK corporation tax charge for the year
- Adjustments in respect of prior years
- Foreign tax
Total current income tax
Deferred tax
- Deferred tax
- Adjustments in respect of prior years
- Impact of rate change
Total deferred tax
Total income tax expense
Year ended
31 December
2021
£’000
Year ended
31 December
2020
£’000
168
381
549
267
433
700
Year ended
31 December
2021
£’000
Year ended
31 December
2020
£’000
75
136
211
104
129
233
Year ended
31 December
2021
£’000
Year ended
31 December
2020
£’000
217
(40)
1,173
1,350
755
(173)
38
620
1,970
-
(112)
445
333
522
48
(14)
556
889
Current taxes comprise the income taxes of the Group companies which posted a taxable profit for the year, while
deferred taxes show changes in deferred tax assets and liabilities which were recognised by the Group on the temporary
differences between the carrying amount of assets and liabilities and their amount calculated for tax purposes, and on
consolidation adjustments, calculated using the rates that are expected to apply in the year these differences will reverse.
109
The Pebble Group plc Annual Report 2021 Notes to the Group financial statements
(continued)
10. Income tax expense (continued)
Analysis of charge in year
Reconciliation of total tax charge:
Profit before taxes
Profit before taxes multiplied by the rate of corporation tax in the UK of 19% (2020: 19%)
Effects of:
Adjustments in respect of prior years
Impact of UK rate change
Non-deductible (income)/expenses
Differences in tax rates in overseas jurisdictions
Unrecognised for deferred tax
Utilisation of unrecognised deferred tax brought forward
Total income tax expense
Year ended
31 December
2021
£’000
Year ended
31 December
2020
£’000
9,317
1,770
(213)
38
(24)
382
32
(15)
1,970
4,969
944
(64)
(14)
90
183
503
(753)
889
Factors that may affect future tax charges
The Government made a number of budget announcements on 3 March 2021. These include confirming that the rate of
corporation tax will increase to 25% from 1 April 2023. This new law was substantively enacted on 24 May 2021. Deferred
taxes at the balance sheet date have been measured using these enacted tax rates and reflected in these financial
statements.
Amounts recognised directly in equity
Aggregate deferred tax arising in the reporting period and not recognised in net profit or loss or other comprehensive
income but directly credited to equity:
Deferred tax: credit relating to employee share schemes – value of employee services
Year ended
31 December
2021
£’000
Year ended
31 December
2020
£’000
67
2
11. Earnings per share
Basic earnings per share are calculated by dividing the earnings attributable to equity shareholders by the weighted
average number of ordinary shares in issue during the year.
For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion
of all potentially dilutive ordinary shares. The Company has potentially dilutive ordinary shares arising from share options
granted to employees. Options are dilutive under the Group Sharesave Plan (SAYE), where the exercise price together with
the future IFRS 2 charge of the option is less than the average market price of the Company’s ordinary shares during the
year. Options under the LTIP schemes, as defined by IFRS 2, are contingently issuable shares and are therefore only
included within the calculation of diluted EPS if the performance conditions, as set out in note 24, are satisfied at the end
of the reporting period, irrespective of whether this is the end of the vesting period or not.
Until 3 June 2021, the Company had 12,564,501 non-redeemable deferred shares of £0.01 in issue with no voting, dividend
or other distribution rights. The stated intention from their creation upon Admission was that they would be purchased in
their entirety by the Company. As no rights of conversion nor pre-arranged formula to convert deferred shares into
ordinary shares were included in the Articles of Association, they have never been considered ’convertible securities’.
Accordingly, deferred shares have not been included in the calculation of diluted earnings per share. The off-market
buy-back of the deferred shares completed on 3 June 2021 when the deferred shares were immediately cancelled.
The impact of the potentially dilutive share options issued under The Pebble Group Plc Long Term Incentive Plan on
21 December 2020 and 8 June 2021 and Group Sharesave Plan (SAYE) on 6 October 2021 as detailed in note 24 is 0.01p
for the year ended 31 December 2021. There is no impact on the basic earnings per share for the year ended
31 December 2020.
110
The Pebble Group plc Annual Report 2021FINANCIAL STATEMENTS 11. Earnings per share (continued)
The calculation of basic earnings per share is based on the following data:
Statutory EPS
Earnings (£’000)
Earnings for the purposes of basic and diluted earnings per
share being profit for the year attributable to equity shareholders
Number of shares
Weighted average number of shares for the purposes of basic earnings per share
Weighted average dilutive effects of conditional share awards
Weighted average number of shares for the purposes of diluted earnings per share
Earnings per ordinary share (pence)
Basic earnings per ordinary share (pence)
Diluted earnings per ordinary share (pence)
Year ended
31 December
2021
Year ended
31 December
2020
7,347
4,080
167,450,893 167,450,893
-
167,804,498 167,450,893
353,605
4.39
4.38
2.44
2.44
Adjusted EPS
The calculation of adjusted earnings per share is based on the after-tax adjusted operating profit after adding back certain
costs as detailed in the table below. Adjusted earnings per share figures are given to exclude the effects of amortisation of
acquired intangible assets, share-based payment charge and exceptional items, all net of taxation, and are considered to
show the underlying performance of the Group.
Earnings (£’000)
Earnings for the purposes of basic and diluted earnings per share being adjusted earnings
Number of shares
Weighted average number of shares for the purposes of adjusted earnings per share
Weighted average dilutive effects of conditional share awards
Weighted average number of shares for the purposes of diluted earnings per share
Adjusted earnings per ordinary share (pence)
Basic adjusted earnings per ordinary share (pence)
Diluted adjusted earnings per ordinary share (pence)
The calculation of adjusted earnings per share is based on the following data:
Profit for the year attributable to equity shareholders
Add back/(deduct):
Amortisation charge on acquired intangible assets
Share-based payment charge
Exceptional items
Tax effect of the above
Adjusted earnings
Year ended
31 December
2021
Year ended
31 December
2020
8,599
4,965
167,450,893 167,450,893
-
167,804,498 167,450,893
353,605
5.14
5.12
2.96
2.96
Year ended
31 December
2021
£’000
Year ended
31 December
2020
£’000
7,347
4,080
894
715
-
(357)
8,599
537
14
542
(208)
4,965
111
The Pebble Group plc Annual Report 2021 Notes to the Group financial statements
(continued)
12. Intangible assets
Cost
Balance at 1 January 2020
Additions
Disposals
Reclassifications
Balance at 31 December 2020
Impact of foreign exchange translation
Additions
Reclassifications
Goodwill
£’000
Customer
relationships
£’000
Software and
development
costs
£’000
Work in
progress
£’000
35,882
10,437
11,156
-
-
-
-
-
-
(21)
5,860
(272)
407
35,802
10,144
17,130
3
-
-
97
-
-
100
3,553
538
Impact of foreign exchange translation
(80)
(293)
Balance at 31 December 2021
35,805
10,241
21,321
Accumulated amortisation
Balance at 1 January 2020
Impact of foreign exchange translation
Charge for year
Disposals
Balance at 31 December 2020
Impact of foreign exchange translation
Charge for year
Balance at 31 December 2021
Net book value
At 31 December 2019
At 31 December 2020
At 31 December 2021
-
-
-
-
-
-
-
-
635
(15)
537
-
1,157
(13)
503
7,009
(39)
1,426
(272)
8,124
37
2,308
1,647
10,469
35,882
35,802
35,805
9,802
8,987
8,594
4,147
9,006
10,852
Total
£’000
57,811
(394)
6,153
(272)
-
63,298
200
4,292
-
67,790
7,644
(54)
1,963
(272)
9,281
24
2,811
12,116
50,167
54,017
55,674
336
-
293
-
(407)
222
-
739
(538)
423
-
-
-
-
-
-
-
-
336
222
423
Staff costs of £3,667,000 (2020: £1,688,000) have been capitalised as intangible assets.
On 18 December 2020, Facilisgroup acquired software assets and a license from a US-based software developer, for a total
cash consideration of $5.3m (£3.8m), included in Software and development costs.
The remaining amortisation periods for customer relationships are between 15 and 17 years (2020: 16 and 18 years) and for
software and development costs are between 1 and 5 years.
Goodwill has been tested for impairment. The method, key assumptions and results of the impairment review are detailed
below.
Goodwill is attributed to the respective cash-generating units (“CGUs”) within the Group (Brand Addition and Facilisgroup).
Goodwill has been tested for impairment by assessing the value in use of each CGU. The value in use calculations were
based on projected cash flows in perpetuity. For both CGUs, budgeted cash flows for 2022 to 2026 were used. For Brand
Addition, these were based on a forecast for 2022 with growth rates of 6% applied to EBITDA. For Facilis, these were
based on forecasts for 2022 to 2024, with 20% growth rates applied to EBITDA in 2025 and 2026. Subsequent years were
based on a reduced rate of growth of 2.0% (2020: 2.0%) into perpetuity. Appropriate adjustments were also made for
changes in working capital and other cash flows to both CGUs.
These growth rates are based on past experience and market conditions and discount rates are consistent with external
information. The growth rates shown are the average applied to the cash flows of the individual CGUs and do not form a
basis for estimating the consolidated profits of the Group in the future.
The Directors used an estimated market weighted average cost of capital (“WACC”) of 8.9% for Brand Addition and 9.3%
for Facilisgroup (2020: 9.0% for Brand Addition and 9.4% for Facilisgroup) to discount the cash flows used for the CGUs.
The value in use calculations described above, together with sensitivity analysis using reasonably possible changes in the key
assumptions as set out above, indicate the Group has significant headroom and therefore do not give rise to impairment
concerns.
112
The Pebble Group plc Annual Report 2021FINANCIAL STATEMENTS 12. Intangible assets (continued)
Having completed the impairment reviews at the date of transition and at each subsequent balance sheet date, no
impairments were identified.
Goodwill is attributable to the following segments:
Brand Addition
Facilisgroup
The value in use, calculated as described on the previous page and attributable to each CGU is:
Brand Addition
Facilisgroup
As at
31 December
2021
£’000
As at
31 December
2020
£’000
33,057
2,748
35,805
33,057
2,745
35,802
As at
31 December
2021
£’000
As at
31 December
2020
£’000
171,111
215,961
153,100
63,200
387,072
216,300
Management considers that no reasonably possible changes would reduce either CGU’s headroom to nil.
113
The Pebble Group plc Annual Report 2021 Fixtures and
fittings
£’000
Computer
hardware
£’000
Right-of-use
assets
£’000
Total
£’000
3,854
2,275
10,506
16,635
(33)
241
(349)
(13)
565
(119)
(27)
3,853
(1,537)
(73)
4,659
(2,005)
3,713
2,708
12,795
19,216
19
160
-
(2)
520
-
45
461
(517)
62
1,141
(517)
3,892
3,226
12,784
19,902
3,144
1,865
5,545
10,554
(23)
163
(349)
(9)
240
(119)
2,935
1,977
16
182
-
10
336
-
30
1,164
(1,537)
5,202
20
1,468
(171)
(2)
1,567
(2,005)
10,114
46
1,986
(171)
3,133
2,323
6,519
11,975
710
778
759
410
731
903
4,961
7,593
6,265
6,081
9,102
7,927
As at
31 December
2021
£’000
As at
31 December
2020
£’000
6,069
140
56
6,265
7,267
227
99
7,593
Notes to the Group financial statements
(continued)
13. Property, plant and equipment
Cost
Balance at 1 January 2020
Impact of foreign exchange translation
Additions
Disposals
Balance at 31 December 2020
Impact of foreign exchange translation
Additions
Disposals
Balance at 31 December 2021
Accumulated depreciation
Balance at 1 January 2020
Impact of foreign exchange translation
Charge for the year
Disposals
Balance at 31 December 2020
Impact of foreign exchange translation
Charge for the year
Disposals
Balance at 31 December 2021
Net book value
Balance at 31 December 2019
Balance at 31 December 2020
Balance at 31 December 2021
Right-of-use assets – net book value
Leasehold property
Fixtures and fittings
Computer hardware
Total Right-of-use assets – net book value
114
The Pebble Group plc Annual Report 2021FINANCIAL STATEMENTS 14. Deferred tax assets and liabilities
Deferred tax assets and liabilities are analysed as follows:
Accelerated capital allowances
Other short-term timing differences
On losses
Total deferred tax asset
On intangible assets
Total deferred tax liability
As at
31 December
2021
£’000
As at
31 December
2020
£’000
64
236
-
300
15
11
467
493
(3,035)
(3,035)
(2,637)
(2,637)
The above amounts reflect the differences between the carrying and tax amounts as at each year end.
Of the deferred tax balances at year end, £41,000 (2020: £493,000) of the deferred tax asset and £660,000
(2020: £347,000) of the deferred tax liability are expected to be utilised within one year.
Changes during each year are as follows:
Balance at 1 January 2020
Tax credit /(charge) in respect of current year
Foreign exchange translation
Balance at 31 December 2020
Tax charge in respect of current year
Tax credit directly credited to equity
Foreign exchange translation
Balance at 31 December 2021
Asset
£’000
167
326
-
493
(260)
67
-
Liability
£’000
(1,816)
(882)
61
(2,637)
(360)
-
(38)
300
(3,035)
There are unrecognised deferred tax assets relating to capital losses of £9,900,000 (2020: £9,900,000) and in respect of
trading losses of £535,000 (2020: £503,000). The Directors have assessed that there will not be sufficient taxable profits
available in future periods, for the companies in the Group in which these losses reside, in order to utilise these losses.
15. Inventories
Finished goods for resale
Total closing inventories
Stocks are stated after provisions for impairment of £209,000 (2020: £205,000).
There is no difference between the replacement cost of stocks and carrying value.
As at
31 December
2021
£’000
As at
31 December
2020
£’000
10,093
10,093
12,109
12,109
115
The Pebble Group plc Annual Report 2021 Notes to the Group financial statements
(continued)
16. Trade and other receivables
Amounts falling due within one year:
Trade receivables not past due
Trade receivables past due
Provision for trade receivables
Trade receivables net
Contract assets
Other debtors
FX derivative
Prepayments
As at
31 December
2021
£’000
As at
31 December
2020
£’000
19,461
4,030
(57)
14,256
2,254
(57)
23,434
16,453
780
1,342
266
3,600
29,422
675
892
22
2,946
20,988
We have identified £2,008,000 included in trade receivables not past due in 2020 that should have been classified as
prepayments and so have amended the above note by £2,008,000 to reclassify those balances between trade receivables
not past due and prepayments. The overall trade and other receivables balance has not changed.
Currency analysis
Sterling
Euro
US Dollar
Chinese Renminbi
Other
Total trade and other receivables
As at
31 December
2021
£’000
As at
31 December
2020
£’000
4,922
10,579
11,007
2,079
835
29,422
3,391
8,728
7,387
932
550
20,988
Any fair value difference on trade and other receivables is not material. Trade and other receivables are considered past
due once they have passed their contracted due date. Trade and other receivables are assessed for impairment based
upon the expected credit losses model.
The Group’s customer base is predominantly made up of high-quality organisations with a high credit rating. In order to
manage credit risk, the Directors set limits for customers based on a combination of payment history and third-party
credit references. Credit limits are reviewed on a regular basis in conjunction with debt ageing and collection history. The
maturity analysis of financial assets (which comprise trade receivables, other debtors, and contract assets) is analysed
below.
Trade receivables, other receivables and
contract assets:
– Not yet due
– Up to 3 months overdue
– 3 to 6 months past due
– Over 6 months past due
Gross
£’000
Provision
£’000
21,583
3,092
700
238
25,613
-
-
-
(57)
(57)
2021
net
£’000
21,583
3,092
700
181
Gross
£’000
Provision
£’000
15,823
1,778
347
129
-
-
-
(57)
(57)
2020
net
£’000
15,823
1,778
347
72
18,020
25,556
18,077
The Group uses objective evidence as well as considering forward-looking information and the probability of default when
calculating expected credit losses. The maturity of financial assets is therefore used as an indicator as to the probability of
default. The maximum amount of exposure to credit risk is the total value of unprovided trade and other receivables as set
out above. There are no amounts outstanding on financial assets that were written off during the reporting period and
which are still subject to enforcement activity.
116
The Pebble Group plc Annual Report 2021FINANCIAL STATEMENTS 16. Trade and other receivables (continued)
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective
interest method, less provision for impairment. The Group uses the simplified approach to measure the loss allowance at
an amount equal to lifetime expected credit losses for trade receivables. There is limited concentration of credit risk with
respect to trade receivables due to the diverse and unrelated nature of the Group’s customers. Accordingly, the Directors
believe that no further credit provision is required in excess of the provision for impairment of receivables.
17. Cash and cash equivalents
Cash and cash equivalents
Currency analysis
Sterling
Euro
US Dollar
Other
Total cash and cash equivalents
18. Non-current liabilities
IFRS 16 lease liability (note 20)
Deferred consideration
Total non-current liabilities
As at
31 December
2021
£’000
As at
31 December
2020
£’000
12,051
7,066
As at
31 December
2021
£’000
As at
31 December
2020
£’000
1,293
5,030
4,310
1,418
12,051
1,232
2,481
2,103
1,250
7,066
As at
31 December
2021
£’000
As at
31 December
2020
£’000
6,388
-
6,388
7,645
930
8,575
Deferred consideration relates to the software asset and license acquisition from a US-based developer in
December 2020.
Currency analysis
Sterling
Euro
US Dollar
Chinese Renminbi
Other
As at
31 December
2021
£’000
As at
31 December
2020
£’000
2,167
102
3,911
119
89
6,388
2,739
323
5,225
132
156
8,575
117
The Pebble Group plc Annual Report 2021 Notes to the Group financial statements
(continued)
19. Current liabilities
IFRS 16 lease liability (note 20)
Lease liabilities
Corporation tax
Current tax liabilities
Trade payables
Other taxation and social security
Other payables
Accruals
Contract liabilities
Deferred consideration
Trade and other payables
Total current liabilities
As at
31 December
2021
£’000
As at
31 December
2020
£’000
1,384
1,384
20
20
1,334
1,334
-
-
14,955
15,521
989
533
6,934
5,682
972
30,065
31,469
445
255
5,611
3,591
352
25,775
27,109
Revenues totalling £2,920,000 were recognised in the year ended 31 December 2021 that were included in the contract
liabilities balance as at 31 December 2020 (£1,198,000 recognised in the year ended 31 December 2020 that were included
in the contract liabilities balance as at 31 December 2019).
Deferred consideration relates to the software asset and license acquisition from a US-based developer in
December 2020.
We have identified £1,113,000 included in trade payables and £1,875,000 included in other payables in 2020 that should
have been classified as contract liabilities and so have amended the above note by £2,988,000 to reclassify those balances
between trade payables, other payables and contract liabilities. The overall current liabilities balance has not changed.
Currency analysis
Sterling
Euro
US Dollar
Chinese Renminbi
Other
Total current liabilities
The fair value of financial liabilities approximates to their carrying value due to short maturities.
As at
31 December
2021
£’000
As at
31 December
2020
£’000
9,836
11,285
8,600
1,135
613
31,469
9,877
10,112
6,121
625
374
27,109
118
The Pebble Group plc Annual Report 2021FINANCIAL STATEMENTS 20. Leases
Amounts recognised in the Consolidated statement of financial position
The Consolidated statement of financial position shows the following amounts relating to leases:
Right-of-use assets
Balance at 1 January 2020
Impact of foreign exchange translation
New leases recognised in the year
Depreciation charge for the year
Balance at 31 December 2020
Impact of foreign exchange translation
New leases recognised in the year
Disposals
Depreciation charge for the year
Balance at 31 December 2021
£’000
4,961
(57)
3,853
(1,164)
7,593
25
461
(346)
(1,468)
6,265
These are included within “Property, plant and equipment” in the Consolidated statement of financial position.
Lease liabilities
Maturity analysis – contractual undiscounted cash flows:
Less than one year
More than one year, less than two years
More than two years, less than three years
More than three years, less than four years
More than four years, less than five years
More than five years
Total undiscounted lease liabilities at year end
Finance costs
Total discounted lease liabilities at year end
Lease liabilities included in the statement of financial position:
Current
Non-current
Amounts recognised in the Consolidated income statement
The Consolidated income statement shows the following amounts relating to leases:
Depreciation charge – fixtures and fittings
Depreciation charge – computer hardware
Interest expense (within finance expense)
As at
31 December
2021
£’000
As at
31 December
2020
£’000
1,716
1,440
1,273
1,200
1,202
2,338
9,169
(1,397)
7,772
1,384
6,388
7,772
1,761
1,703
1,403
1,204
1,185
3,513
10,769
(1,790)
8,979
1,334
7,645
8,979
Year ended
31 December
2021
£’000
Year ended
31 December
2020
£’000
1,424
44
1,468
381
1,120
44
1,164
433
The above leases relate to office space, computer equipment and motor vehicles. The net book value by category is set
out in note 13.
Any expense for short-term and low-value leases is not material and has not been presented.
119
The Pebble Group plc Annual Report 2021 Notes to the Group financial statements
(continued)
21. Share capital
The authorised, issued and fully paid number of shares are set out below:
Ordinary shares of 1p each:
At 1 January 2021
Purchase of deferred shares
At 31 December 2021
Ordinary
shares
Number
Deferred
shares
Number
Total share
capital
£
Share
premium
£
167,450,893 12,564,501
1,800,154
78,451,312
- (12,564,501)
(125,645)
-
167,450,893
-
1,674,509
78,451,312
The ordinary shares have full voting, dividend and capital distribution rights, including on winding up. They are
non-redeemable.
The Company purchased all of the deferred shares on the date of the Company’s Annual General Meeting in 2021.
Until 3 June 2021, the Company had 12,564,501 non-redeemable deferred shares of £0.01 in issue with no voting, dividend
or other distribution rights. The stated intention from their creation upon Admission was that they would be purchased in
their entirety by the Company. As no rights of conversion nor pre-arranged formula to convert deferred shares into
ordinary shares were included in the Articles of Association, they have never been considered ’convertible securities’.
Accordingly, deferred shares have not been included in the calculation of diluted earnings per share. The off-market
buy-back of the deferred shares completed on 3 June 2021 when the deferred shares were immediately cancelled.
22. Analysis and reconciliation of net cash/(debt)
Cash at bank and in hand
Lease liabilities
Net cash/(debt)
Cash at bank and in hand
Lease liabilities
Net (debt)/cash
1 January
2020
£’000
8,861
(6,340)
2,521
New leases
£’000
Cash flow
£’000
-
(3,853)
(3,853)
(1,366)
1,141
(225)
New leases
£’000
Lease disposals
£’000
Cash flow
£’000
Foreign
exchange
adjustments
£’000
31 December
2020
£’000
(429)
73
(356)
7,066
(8,979)
(1,913)
Foreign
exchange
adjustments
£’000
31 December
2021
£’000
-
(461)
(461)
-
360
360
4,792
1,360
6,152
193
(52)
141
12,051
(7,772)
4,279
1 January
2021
£’000
7,066
(8,979)
(1,913)
120
The Pebble Group plc Annual Report 2021FINANCIAL STATEMENTS Credit risk
The Group’s principal financial assets are cash, trade
receivables, other receivables and contract assets.
Contract assets, when invoiced, are recognised in trade
receivables. The credit risk associated with cash is limited,
as the counterparties have high credit ratings assigned by
international credit rating agencies. The principal credit risk
arises therefore from the Group’s trade receivables.
In order to manage credit risk; the Directors set limits for
customers based on a combination of payment history and
third-party credit references. Credit limits are reviewed on
a regular basis in conjunction with debt ageing and
collection history. The credit losses historically incurred by
the Group have been negligible as referred in note 16.
Liquidity risk
The Group seeks to manage financial risk by ensuring
sufficient liquidity is available to meet foreseeable needs by
closely managing the cash balance.
The Group policy throughout the year has been to ensure
continuity of funding. Short-term flexibility is achieved by
revolving working capital facilities.
The Company is party to a Group cross-guarantee banking
arrangement, which is a revolving credit facility of
£10,000,000 expiring in November 2023. Interest was
charged at a rate of LIBOR + 1.9% up to November 2021.
From this point, interest is charged at a rate of SONIA +
1.9% and no significant impact is expected from this change.
As at year end the balance on the facility was £nil. There is
also an overdraft facility of 10,000,000 RMB for Brand
Addition (Shanghai) Trading Co. Limited, which is guaranteed
by the Company. At year end, the balance on the facility
was £nil.
23. Financial risk management and financial
instruments by category
The Group uses various financial instruments. These include
cash, issued equity instruments and various items, such as
trade receivables and trade payables that arise directly
from its operations. The main purpose of these financial
instruments is to raise finance for the Group’s operations.
The existence of these financial instruments exposes the
Group to a number of financial risks, which are described in
more detail below.
The main risks arising from the Group’s financial instruments
are market risk, credit risk and liquidity risk. The Directors
review and agree policies for managing each of these risks
and they are summarised below.
Market risk
Market risk encompasses three types of risk, being currency
risk, interest rate risk and price risk. In this instance, price
risk has been ignored as it is not considered a material risk
to the business. The Group’s policies for managing interest
rate risk are set out in the subsection entitled “Interest rate
risk” below.
Currency risk
The Group contracts with certain customers and suppliers
in Euros and Dollars and manages this foreign currency risk
using forward foreign exchange contracts. Hedge
accounting is not applied. The Group’s exposure to foreign
currency risk at the end of the reporting period is set out in
notes 16, 17, 18 and 19.
As the Group derives an amount of its earnings from
overseas operations, the Group is affected by movements
in exchange rates. This would affect both the statement of
financial position and the income statement. For a 10%
strengthening in the Sterling exchange rate, operating profit
would reduce by £513,000 (2020: £866,000) and net assets
would decrease by £2,452,000 (2020: £2,131,000). A 10%
weakening of the Sterling against the individual functional
currencies would have the equal and opposite effect on
operating profit and net assets as shown above on the basis
that all other variables remain constant.
Interest rate risk, including cash flow interest
rate risk
The Group finances its operations through retained profits.
The Group is therefore not susceptible to interest rate risk.
121
The Pebble Group plc Annual Report 2021 Notes to the Group financial statements
(continued)
23. Financial risk management and financial instruments by category (continued)
Summary of financial assets and liabilities by category
The carrying amount of financial assets and liabilities recognised may also be categorised as follows:
Financial assets
Financial assets measured at amortised cost
Trade and other receivables
Contract assets
Cash and cash equivalents
Financial assets measured at fair value through profit or loss
FX derivative asset
Financial liabilities
Financial liabilities measured at amortised cost
Non-current:
Lease liability
Deferred consideration
Current:
Lease liability
Trade and other payables
Accruals
Contract liabilities
Deferred consideration
Net financial assets and liabilities
Non-financial assets and liabilities
Plant, property and equipment
Goodwill
Other intangible assets
Inventory
Prepayments
Deferred tax asset
Deferred tax liability
Other taxation and social security
Current tax (liability)/asset
Total equity
As at
31 December
2021
£’000
As at
31 December
2020
£’000
24,776
780
12,051
37,607
266
37,873
(6,388)
-
(1,384)
(15,488)
(6,934)
(5,682)
(972)
17,345
675
7,066
25,086
22
25,108
(7,645)
(930)
(1,334)
(15,776)
(5,611)
(3,591)
(352)
(36,848)
(35,239)
1,025
(10,131)
7,927
35,805
19,869
10,093
3,600
300
9,102
35,802
18,215
12,109
2,946
493
(3,035)
(2,637)
(989)
(20)
73,550
74,575
(445)
829
76,414
66,283
The maturity analysis for lease liabilities is presented in note 18. All other financial liabilities have a maturity of less than
12 months (i.e., are all current).
122
The Pebble Group plc Annual Report 2021FINANCIAL STATEMENTS 23. Financial risk management and financial instruments by category (continued)
Capital management policies and procedures
The Group’s capital management objectives are:
• to ensure the Group’s ability to continue as a going concern; and
• to provide an adequate return to shareholders by pricing products and services commensurately with the level of risk.
This is achieved through close management of working capital and regular reviews of pricing. Decisions on whether to raise
funding using debt or equity are made by the Board based on the requirements of the business.
Capital for the reporting period under review is shown in the table on the previous page.
The only derivative financial instrument assets used by the Group are foreign currency forward contracts that are disclosed
in the table on the previous page. These derivatives are only used for economic hedging purposes and not as speculative
investments. They are classified as “held for trading” for accounting purposes and are accounted for at fair value through
profit or loss. They are presented as current assets or liabilities to the extent they are expected to be settled within
12 months after the end of the reporting period.
The gross value of foreign currency forward contracts held at the end of the reporting period was €16,435,000.
The contracts mature within one to twelve months of the year end.
24. Share-based payments
In the year ended 31 December 2021 the Group operated equity-settled share-based payment plans as described below.
The Group recognised total expenses of £715,000 (2020: £13,569) in respect of equity-settled share-based payment
transactions in the year ended 31 December 2021.
The Pebble Group Plc Long Term Incentive Plan (the ’LTIP’)
Certain employees of the Company, along with other Group employees, have been granted share options on 21 December
2020 and 8 June 2021 under the LTIP.
Under the LTIP, the Group has made awards over 2,208,570 (2020: 1,248,060) conditional shares to certain Directors and
employees.
The vesting of most of these awards is subject to the Group achieving certain performance targets under the LTIP,
measured over a three-year period, as set out in the Remuneration Report. The options are split into two parts with the
amount of Part 1 options that will vest depending on achievement of the Group’s Basic Adjusted EPS (“AEPS”) whilst Part 2
depends on absolute total shareholder return (“TSR”) that will vest depending on performance of the Company’s
Absolute TSR:
Part 1 options - Basic AEPS
Part 2 options - TSR
Proportion
of award
70%
30%
Details of the maximum total number of ordinary shares which may be issued in future periods in respect of LTIP awards
outstanding at 31 December 2021 are shown below:
At 1 January 2021
Granted in the year
Lapsed in the year
At 31 December 2021
Number of
shares
1,248,060
960,510
(134,324)
2,074,246
123
The Pebble Group plc Annual Report 2021 Notes to the Group financial statements
(continued)
24. Share-based payments (continued)
The fair value at grant date is independently determined using an adjusted form of the Black-Scholes model which includes
a Monte Carlo simulation model that takes into account the exercise price, the term of the option, the share price at grant
date and expected price volatility of the underlying share based on the AIM Price Index over the past 3 years, and the
risk-free interest rate for the term of the option as shown below.
Share price at grant date
Exercise price
Expected volatility
Expected life
Expected dividend yield
Risk-free interest rate
Fair value per option
Performance conditions
2020 award
TSR condition
2020 award
AEPS condition
2021 award
TSR condition
2021 award
AEPS condition
105.0p
£nil
17.2%
3 years
0%
0.53%
22.3p
105.0p
130.0p
130.0p
£nil
-
3 years
-
-
110.5p
£nil
17.5%
3 years
0%
0.53%
28.2p
£nil
-
3 years
-
-
153.0p
2020 award
3 years ended
30 June
2023
2021 award
3 years ended
31 December
2023
13.4p
14.3p
15.1p
15.4p
16.3p
17.3p
70% Cumulative adjusted EPS
Basic adjusted EPS as defined in the LTIP rules,
excludes share-based payment charge, exceptional
items and amortisation from acquired intangibles
Threshold (25% of maximum vesting)
Mid-range (60% of maximum vesting)
Maximum (100% of maximum vesting)
30% Annualised TSR
Annualised growth in total
shareholder returns
Threshold (25% maximum vesting)
Mid-range (60% maximum vesting)
Maximum (100% maximum vesting)
8.0% pa
11.3% pa
15.0% pa
8.0% pa
11.3% pa
15.0% pa
The Pebble Group Plc Group Sharesave Plan (the ’SAYE’)
Certain eligible employees of the Company, along with other Group employees, have been granted share options on
6 October 2021 under its Sharesave Plan and its sub-plan, the International Sharesave Plan.
The SAYE provides for an exercise price equal to the quoted mid-market price of the Company shares on the business day
immediately preceding the date of grant, less a discount of twenty per cent, of £1.22. The vesting period under the scheme
is three years and no performance conditions, other than remaining a Group employee, are attached to the options.
Under the SAYE, the Group has made awards of 937,223 conditional shares to certain Directors and employees.
Details of the maximum total number of ordinary shares which may be issued in future periods in respect of SAYE awards
outstanding at 31 December 2021 are shown below:
At 1 January 2021
Granted in the year
Lapsed in the year
At 31 December 2021
Number of
shares
-
937,223
(13,513)
923,710
25. Related party transactions
The Directors consider there to be no ultimate controlling party. During the current and prior year, related parties include
representatives of major shareholders and parent and intermediate parent entities ultimately owned by the same
shareholders.
Details of key management compensation are given in note 6. There are no other related party transactions to be disclosed
for the current and prior year.
124
The Pebble Group plc Annual Report 2021FINANCIAL STATEMENTS Company balance sheet
As at 31 December 2021
Fixed assets
Investments
Current assets
Trade and other receivables (including £80,684,000 (2020: £3,000) falling due after
more than one year)
Creditors: amounts falling due within one year
Net current assets
Total assets less current liabilities
Net assets
Capital and reserves
Called up share capital
Share premium
Capital reserve
Merger relief reserve
Share-based payment reserve
Retained earnings
Total shareholders’ funds
Note
2021
£’000
2020
£’000
5
6
7
8
9
112,291
126,106
81,012
81,012
60,203
60,203
(324)
(198)
80,688
192,979
192,979
1,675
78,451
125
713
681
60,005
186,111
186,111
1,800
78,451
–
713
13
111,334
192,979
105,134
186,111
The Company has taken advantage of the exemption permitted by Section 408 of the Companies Act 2006 not to produce
its own profit and loss account. The profit for the year dealt within the financial statements of the Company was
£6,200,000 (2020: £2,365,000).
The Company financial statements on pages 125 to 130 were approved by the Board of Directors on 22 March 2022 and
were signed on its behalf by:
C Thomson
Director
22 March 2022
The notes on pages 127 to 130 form part of these Company financial statements.
125
The Pebble Group plc Annual Report 2021
Company statement of changes in equity
for the year ended 31 December 2021
At 1 January 2020
Profit for the year
Total comprehensive income for
the year
Employee share schemes – value
of employee services (note 9)
Total transactions with owners,
recognised in equity
Share
capital
£’000
1,800
Share
premium
£’000
78,451
–
–
–
–
–
–
–
–
Balance at 31 December 2020
1,800
78,451
Profit for the year
Total comprehensive income for
the year
–
–
Purchase of deferred shares
(125)
Employee share schemes – value
of employee services (note 9)
Deferred tax on employee share
schemes
Total transactions with owners,
recognised in equity
–
–
(125)
–
–
–
–
–
–
Balance at 31 December 2021
1,675
78,451
Capital
reserve
£’000
–
–
–
–
–
–
–
–
125
–
–
125
125
Merger
relief
reserve
£’000
713
–
–
–
–
713
–
–
–
–
–
–
713
Share-based
payment
reserve
£’000
–
–
–
13
13
13
–
–
–
601
67
668
681
Retained
earnings
£’000
Total
equity
£’000
102,769
183,733
2,365
2,365
2,365
2,365
–
–
13
13
105,134
186,111
6,200
6,200
6,200
6,200
–
–
–
–
–
601
67
668
111,334
192,979
The notes on pages 127 to 130 form part of these Company financial statements.
126
The Pebble Group plc Annual Report 2021FINANCIAL STATEMENTS Notes to the Company financial statements
1. General information
The Pebble Group plc (the “Company”) was incorporated in
the United Kingdom on 27 September 2019 and is a public
company limited by shares, registered and domiciled in
England and Wales. The registered office of the Company is
Broadway House, Trafford Wharf Road, Trafford Park,
Manchester, England M17 1DD. The company registration
number is 12231361. The Company’s principal activity is that
of a holding company.
2. Accounting policies
(a) Reporting framework
The separate financial statements of the Company have
been prepared in accordance with Financial Reporting
Standard 102, the Financial Reporting Standard applicable in
the UK and Republic of Ireland (“FRS 102”), on the going
concern basis under the historical cost convention, and in
accordance with the Companies Act 2006.
The financial information is presented in Sterling and has
been rounded to the nearest thousand (£’000).
The principal accounting policies, which have been applied
consistently to all the years presented, are set out below.
(b) Financial Reporting Standard 102 – reduced
disclosure exemptions
The following exemptions from the requirements in FRS 102
have been applied in the preparation of these financial
statements:
• the requirements of section 7 Statement of Cash Flows;
• the requirements of section 3 Financial Statement
Presentation, paragraph 3.17(d);
• the requirements of section 11 Financial Instruments,
paragraphs 11.41(b), 11.41(c), 11.41(e). 11.41(f), 11.42, 11.44 to
11.45, 11.48(a)(iii), 11.48(a)(iv),11.48(b) and 11.48(c);
• the requirements of section 12 Other Financial
Instruments, paragraphs 12.26 to 12.27, 12.29(a), 12.29(b)
and 12.w9A; and
• the requirements of section 33 Related Party Disclosures,
paragraph 33.7.
This information is included in the Group financial
statements found earlier in this report.
(c) Company profit and loss account
The Company has not presented its own profit and loss
account as permitted by Section 408 of the Companies
Act 2006. The Company’s profit for the year was
£6,200,000 (2020: £2,365,000). There are no material
differences between the profit in the current year and its
historical cost equivalent. Accordingly, no note of historical
cost profits and losses has been presented.
(d) Going concern
The Company meets its day-to-day working capital
requirements through cash generated from the Group in
which it holds its investment and utilising its overdraft
facility to fund peak seasonal demands. The Directors have
prepared cash flow forecasts and projections for the two
years ending 31 December 2023 for the Group; see the
going concern disclosure within the Group financial
statements. Based on this, the Directors are satisfied that
the Company has adequate resources to continue in
operational existence for the foreseeable future. For this
reason, they continue to adopt the going concern basis in
preparing the Company financial statements.
(e) Dividend distribution
The distribution of a dividend to the Company’s
shareholders is recognised as a liability in the Company’s
financial statements in the year in which it is approved by
the Company’s shareholders.
(f) Investment in subsidiary undertakings
Investments in subsidiaries are stated at cost less
accumulated impairment.
(g) Taxation
Current tax is provided at amounts expected to be paid
(or recovered) using the tax rates and laws that have been
enacted or substantively enacted by the balance
sheet date.
Deferred tax is recognised in respect of all timing
differences that have originated but not reversed at the
balance sheet date where events or transactions that result
in an obligation to pay more tax in the future, or a right to
pay less tax in future, have occurred at the balance sheet
date. Timing differences are differences between the
Company’s taxable profits and its results as stated in the
financial statements that arise from the inclusion of gains
and losses in tax assessments in periods different from
those in which they are recognised in the
financial statements.
A net deferred tax asset is regarded as recoverable and
therefore recognised only to the extent that, on the basis of
all available evidence, it can be regarded as more likely than
not that there will be suitable taxable profits from which the
future reversal of the underlying timing differences can be
deducted. Deferred tax is measured at the average tax
rates that are expected to apply in the periods in which the
timing differences are expected to reverse based on tax
rates and laws that have been enacted or substantively
enacted by the balance sheet date. Deferred tax is
measured on a non-discounted basis.
(h) Share-based payments
Equity-settled awards are valued at the grant date, and the
fair value is charged as an expense in the income statement
spread over the vesting period. Fair value of the awards are
measured using an adjusted form of the Black-Scholes
model which includes a Monte Carlo simulation model. The
fair value of the options, appraised at the grant date,
includes the impact of market-based vesting conditions
if applicable.
Share-based remuneration is recognised as an expense in
profit or loss with the credit side of the entry being
recorded in equity.
Non-market vesting conditions are included in assumptions
about the number of options that are expected to become
exercisable. Estimates are subsequently revised if there is
any indication that the number of share options expected
to vest differs from previous estimates. Any adjustment to
cumulative share-based compensation resulting from a
revision is recognised in the current period. The number of
vested options ultimately exercised by holders does not
impact the expense recorded in any period.
127
The Pebble Group plc Annual Report 2021 Notes to the Company financial statements
(continued)
Financial assets are derecognised when (a) the contractual
rights to the cash flows from the asset expire or are settled,
or (b) substantially all the risks and rewards of the ownership
of the asset are transferred to another party or (c) despite
having retained some significant risks and rewards of
ownership, control of the asset has been transferred to
another party who has the practical ability to unilaterally sell
the asset to an unrelated third party without imposing
additional restrictions.
Financial liabilities
Basic financial liabilities, including trade and other payables,
are initially recognised at transaction price.
Trade payables are obligations to pay for goods or services
that have been acquired in the ordinary course of business
from suppliers. Accounts payable are classified as current
liabilities if payment is due within one year or less. If not,
they are presented as non-current liabilities. Trade payables
are recognised initially at transaction price and
subsequently measured at amortised cost using the
effective interest method.
3. Critical accounting estimates and
judgements
In the preparation of the Company financial statements, the
Directors, in applying the accounting policies of the
Company, make some judgements and estimates that affect
the reported amounts in the financial statements. The
following are the areas requiring the use of judgement and
estimates that may significantly impact the financial
statements.
Non-current asset impairment
The Directors are required to assess whether there are any
indicators of impairment at each reporting date. All relevant
potential indicators are considered, including the
performance of the underlying trading Group and the
results of the Group’s impairment reviews performed as at
the same date. The Directors exercise their judgement in
determining whether any such indicators exist. Where an
indicator of impairment is identified in relation to the
Company’s investments or intercompany receivable
balances, a full impairment review is performed.
The Directors performed their assessment and concluded
that no impairment indicators existed at 31 December 2021
and, as such, a full impairment review over the Company’s
investments in subsidiaries and intercompany receivables
was not performed.
4. Remuneration of directors and auditor
Details of Directors’ remuneration are shown in the
Directors’ Remuneration Report on page 76 of the Group
financial statements. Details of auditor’s remuneration are
shown in note 9 of the Group financial statements. The
Company has no employees (2020: none).
2. Accounting policies (continued)
(i) Share capital
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of new shares are shown in
equity as a deduction, net of tax, from the proceeds of
issue.
(j) Share premium
Share premium represents the difference between the
nominal value of shares issued and the fair value of
consideration received. Any transaction costs associated
with the issuing of shares are deducted from share
premium, net of any related income tax benefits.
(k) Capital reserve
The capital reserve was created in 2021 as a result of the
purchase by the Company of all deferred shares in issue.
(l) Merger relief reserve
The merger relief reserve was created during 2019 as a
result of the share-for-share exchange under which The
Pebble Group plc became the parent undertaking prior to
the Initial Public Offering (“IPO”). The merger relief reserve
includes the premium received on the issue of share capital
in the share-for-share exchange.
(m) Retained earnings
Retained earnings includes all current and prior period
retained profits and losses.
All transactions with owners of the parent are recorded
separately within equity.
(n) Cash and cash equivalents
Cash and cash equivalents comprise cash balances.
(o) Financial instruments
The Company has chosen to adopt Sections 11 and 12 of FRS
102 in respect of financial instruments.
Financial assets
Basic financial assets, including trade and other receivables,
cash and bank balances and investments, are initially
recognised at transaction price, unless the arrangement
constitutes a financing transaction, where the transaction is
measured at the present value of the future receipts
discounted at a market rate of interest. Such assets are
subsequently carried at amortised cost using the effective
interest method.
At the end of each reporting period, financial assets
measured at amortised cost are assessed for objective
evidence of impairment. If an asset is impaired the
impairment loss is the difference between the carrying
amount and the present value of the estimated cash flows
discounted at the asset's original effective interest rate. The
impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an
event occurring after the impairment was recognised, the
impairment is reversed. The reversal is such that the
current carrying amount does not exceed what the carrying
amount would have been had the impairment not previously
been recognised. The impairment reversal is recognised in
profit or loss.
128
The Pebble Group plc Annual Report 2021FINANCIAL STATEMENTS 5. Investments
Cost and carrying amount
At 1 January 2021
Movement relating to share options
Redemption of preference shares
At 31 December 2021
£’000
126,106
496
(14,311)
112,291
The Company held 13,711,749 A preference shares of £0.00001 each and 599,417 B preference shares of £0.00001 in The
Pebble Group (Holdings) Limited which were issued at a total price of £14,311,166. Dividends accrued on the preference
shares at a 10% compounding rate which was non-discretionary, and they were mandatorily redeemable at a fixed future
date. On 7 December 2021 the Company and The Pebble Group (Holdings) Limited agreed to an early redemption of the
preference shares and therefore the investment value has been reduced by £14,311,166. This amount plus the accrued
dividends of £3,146,203 have been set off against an intercompany payable to The Pebble Group (Holdings) Limited.
The Directors believe that the carrying value of the investments is supported by their underlying net assets.
The Company directly owns the whole of the issued ordinary shares of the following subsidiary undertakings:
Name
Registered address
Principal activity
Class of share
Percentage holding
The Pebble Group (Holdings) Limited Broadway
Project Amber Bidco Limited
Trafford Wharf Road
Manchester
M17 1DD
H.I.G Milan UK Topco Limited
H.I.G Milan UK Midco Limited
H.I.G Milan UK Bidco Limited
Brand Addition Limited
Product Plus International Limited
Gearworks Limited
Brand Addition Asia Limited
Brand Addition Ireland Limited
Brand Addition Reklam Urunleri
Dagitim ve Ticaret Limited Sirketi
Brand Addition (Shanghai) Trading
Co., Limited
Unit 1605
16th Floor
Tower 3 Enterprise
Square
No. 9 Sheung Yuet Road
Kowloon, Hong Kong
Unit G2
Calmount Business Park
Ballymount, Dublin 12
Buyukdere Caddesi
Meydan Sokak Spring
Giz Plaza Kat:13
Sisli-Istanbul, Turkey
Unit 903-905
T2 Building, VIPARK
500 Xinlong Road
Minhang District
Shanghai, China
Holding company
Holding company
Holding company
Holding company
Holding company
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Promotional merchandise Ordinary
Non-trading
Non-trading
Ordinary
Ordinary
Promotional merchandise
Ordinary
100%
100%
100%
100%
100%
100%
100%
100%
100%
Promotional merchandise
Ordinary
100%
Promotional merchandise
Ordinary
100%
Promotional merchandise
Ordinary
100%
H.I.G. Milan Germany Bidco GmbH
Brand Addition GmbH
Heydastrasse 13-15
58093 Hagen, Germany
Holding company
Ordinary
Promotional merchandise
Ordinary
The Pebble Group US Bidco Inc.
Gateway CDI Inc.
Facilisgroup LLP
909 North 20th Street
Saint Louis, MO 63103
Holding company
Ordinary
Promotional merchandise
Ordinary
1600 S Brentwood Blvd.,
Ste 800, Brentwood,
MO 63144
Promotional merchandise
service provider
Ordinary
100%
100%
100%
100%
100%
Facilisgroup Canada Inc.
5320 Canotek Road
Gloucester, ON K1J 9C1
Promotional merchandise
service provider
Ordinary
100%
Other than The Pebble Group (Holdings) Limited and Project Amber Bidco Limited, which are directly held by the parent,
all subsidiaries are indirectly held.
129
The Pebble Group plc Annual Report 2021 Notes to the Company financial statements
(continued)
6. Trade and other receivables
Amounts falling due within one year:
Amounts owed by Group undertakings
Prepayments
Amounts falling due after more than one year:
Amounts owed by Group undertakings
Deferred tax asset
2021
£’000
270
58
328
80,588
96
80,684
2020
£’000
60,135
65
60,200
-
3
3
81,012
60,203
Amounts owed by group undertakings due within one year are unsecured, have no fixed date of repayment and are
repayable on demand.
Amounts owed by group undertakings due after more than one year are unsecured, repayable in greater than one year and
bear interest at market rates.
The deferred tax asset recognised relates to share-based payments.
7. Creditors: amounts falling due within one year
Accruals
2021
£’000
324
324
2020
£’000
198
198
The Company is party to a Group cross-guarantee banking arrangement, which is a revolving credit facility of £10,000,000
expiring in November 2023. Interest was charged at a rate of LIBOR + 1.9% up to November 2021. From this point, interest
is charged at a rate of SONIA + 1.9% and no significant impact is expected from this change. As at year end the balance on
the facility was £nil. There is also an overdraft facility of 10,000,000 RMB for Brand Addition (Shanghai) Trading Co. Limited,
which is guaranteed by the Company. At year end, the balance on the facility was £nil.
8. Called up share capital
Details of movements in shares are set out in note 21 to the Group financial statements.
9. Share-based payments
Details of share-based payments are set out in note 24 to the Group financial statements.
10. Related party transactions
The Company has taken advantage of the exemption included in Section 33 of FRS 102 “Related Party Disclosures” to not
disclose details of transactions with Group undertakings, on the grounds that it is the parent company of a Group whose
financial statements are publicly available.
Directors’ transactions
Details of the Directors’ interests in the ordinary share capital of the Company are provided in the Directors’ Report.
130
The Pebble Group plc Annual Report 2021FINANCIAL STATEMENTS Stay up to date at
thepebblegroup.com
Building brands.
Growing relationships.
Strengthening businesses.
Our values shape our culture, define who we are, what we do and how we act.
We are one team
using our diverse skills
and experience to
support each other’s
successes and
challenges, respecting
our differences.
Enjoying the journey
in a culture of
integrity, transparency
and fairness, where
we are proud of our
past and excited by
our future.
Ambitious in our
commitment to
achieving positive
results with
sustainable impact.
Learning and growing
knowing there is always
progress to be made.
Connected to all
our stakeholders
developing long-term
relationships by
engaging to understand
needs and aspirations.
Our history
2012
2014
2016
2017
Management buy-out of
Brand Addition, supported
by H.I.G. Europe Capital
Partners LP and by
Beechbrook Capital LLP
Expanded operations into
Shanghai, established a
full-service office enabling
further development of
overseas capabilities
Acquisition of US-based
Gateway CDI (now Brand
Addition US), increasing
market share and providing
greater access to the largest
single regional market for
promotional products
Secondary management
buy-out supported by
Elysian Capital and
Beechbrook Capital LLP.
Formation of The Pebble
Group as parent company to
Brand Addition
Financial calendar
Financial year end
Preliminary announcement of full-year results
Publication of Annual Report and financial statements
Annual General Meeting
Preliminary announcement of half-year results
Financial year end
Company information
Nominated adviser
Grant Thornton UK LLP
30 Finsbury Square
London EC2A 1AG
Broker
Joh. Berenberg, Gossler & Co. KG, London Branch
60 Threadneedle Street
London EC2R 8HP
Auditors
PricewaterhouseCoopers LLP
1 Hardman Square
Manchester M2 3DE
Legal adviser
Addleshaw Goddard LLP
One St Peter’s Square
Manchester M2 3DE
Registrar
Equiniti
Aspect House
Spencer Road
Lancing
West Sussex BN99 6DA
Financial PR
Belvedere PR
25 Finsbury Circus
London EC2M 7EE
Registered office
The Pebble Group plc
Broadway House
Trafford Wharf Road
Trafford Park
Manchester M17 1DD
Company number: 12231361
31 December 2021
22 March 2022
22 April 2022
24 May 2022
Early September 2022
31 December 2022
The material used in this report has
been harvested in a responsible
manner from an FSC accredited mill.
Produced and printed by Perivan.
The Pebble Group plc Annual Report 2021
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The Pebble Group plc
Annual Report 2021
Building brands.
Growing relationships.
Strengthening businesses.
Broadway House
Trafford Wharf Road
Trafford Park
Manchester M17 1DD