Building brands.
Growing relationships.
Building brands.
Strengthening businesses.
Growing relationships.
Strengthening businesses.
Broadway House
Head Office
Trafford Wharf Road
Suite 1, Didsbury House
Trafford Park
748-754 Wilmslow Road
Manchester M17 1DD
Didsbury
Manchester
M20 2DW
The Pebble Group plc Annual Report 2023
1
Annual
Report
2023
The Pebble Group plc Annual Report 2023
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HeadlinePage TitleFINANCIAL STATEMENTS
“ Against a challenging macroeconomic
environment, the Group has continued
to invest in new technology to further
its market differentiation and
underpin its long-term growth.”
Richard Law
Chair
Stay up to date at
thepebblegroup.com
Strategic report
2
Introduction to the Promotional
Products Industry
4 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 Environmental Social and
Governance (ESG)
45 Key performance indicators
48 Chief Financial Officer’s review
52 Risk management
Corporate governance
58 Chair’s introduction to governance
60 Our governance structure
66 Nomination Committee report
69 Key governance policies
72 Corporate governance statement
80 Board of Directors
82 Audit Committee report
86 Remuneration report
96 Directors’ Report
99 Statement of Directors’ responsibilities
in respect of the financial statements
Financial statements
100 Independent auditors’ report
106 Consolidated income statement
107 Consolidated statement of other
comprehensive income
108 Consolidated statement of financial
position
109 Consolidated statement of changes in
equity
110 Consolidated cash flow statement
111 Notes to the Group financial statements
139 Company balance sheet
140 Company statement of changes in
equity
141 Notes to the Company financial
statements
147 Financial calendar and Company
information
The material used in this report has
been harvested in a responsible
manner from an FSC accredited mill.
Financial highlights.
REVENUE
OPERATING PROFIT
HIGHLIGHTS
• Group revenue £124.2m (FY 22: £134.0m)
7% behind prior year
• Gross margin increased 4.3 percentage
points as a result of improved pricing
at Brand Addition and the growing
proportion of Facilisgroup as a
percentage of overall Group sales
• Net cash increased to £15.9m after
payment of a maiden dividend
• Progressive dividend policy continues
with a proposed increase to 1.2 pence
per share for FY 23 (FY 22: 0.6 pence
per share)
£124.2m
-7.3%
£8.0m -21.6%
23
22
21
£124.2m
£134.0m
£115.1m
23
22
21
£8.0m
£10.2m
£9.9m
BASIC ADJUSTED EARNINGS
PER SHARE (EPS)*
4.60p
-20.4%
23
22
21
4.60p
5.78p
2.96p
GROSS PROFIT
£54.2m
+2.8%
23
22
21
£54.2m
£52.7m
£42.0m
NET CASH*
ADJUSTED EBITDA*
£15.9m
+5.3%
23
22
21
£15.9m
£15.1m
£21.1m
£16.0m
-11.1%
23
22
21
£16.0m
£18.0m
£15.4m
* Basic Adjusted Earnings Per Share (EPS), Net Cash and Adjusted EBITDA are each defined in the Chief Financial Officer’s review on page 48
Our values define our behaviour and decision-making, underpinning the delivery
of our long-term growth and securing our long-term future.
ONE TEAM, DIVERSE
AND UNITED
We are one team using
our diverse skills and
experience to support
each other’s successes
and challenges,
respecting our
differences.
ENJOYING THE JOURNEY
AMBITIOUS POSITIVITY
ALWAYS LEARNING
AND GROWING
CONNECTED TO OUR
STAKEHOLDERS
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.
The Pebble Group plc Annual Report 2023
1
STRATEGIC REPORT
Introduction to the Promotional Products industry
Industry growth and development.
The global promotional
products market is worth
c.$50bn., 50% of which is based
in North America.
Promotional products are often a key
component in a business’ marketing
strategy with the cost per impression or
the return on investment being highly
attractive. Businesses are increasingly
choosing to work with distributors who
can develop product strategies that
connect with their target audience both
locally and across the world.
Businesses have become more
considered in their approach, investing
in products to engage with employees
and customers that align with brand
values, are made from more sustainable
materials and are useful, helping to
generate as many brand impressions
as possible.
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2
Advertising Specialty Institute (ASI) reported industry sales revenue (North America).
Market Opportunity
c.$50bn
GLOBAL
INDUSTRY
$1.5bn
$1.4bn
$0.1bn
VISIBILITY OF SALES OF
PROMOTIONAL PRODUCTS
SALES THROUGH OUR
TECHNOLOGY
SALES OF PROMOTIONAL
PRODUCTS
2
The Pebble Group plc Annual Report 2023
STRATEGIC REPORT
Why are
promotional
products used?
Businesses of all sizes, sectors
and geographies use products
branded with their name or key
message. They are used to build
culture, brand awareness and
make meaningful connections
with stakeholders, be it existing
or potential customers,
employees or suppliers.
The right strategy can help businesses
make a long lasting positive emotional
connection with the recipient,
reminding them of an interaction with
a brand each time they use or wear
a product.
Developing an effective strategy
Benefits
t u r e d
c
u f a
nsibly m a n
o
p
s
e
R
• Aligned with social
and ethical standards
• Environmental
impact minimised
• Quality assured and
compliant
Gre
a
t p
r
o
d
u
• Desirable, useful, long
c
t
lasting, creative
• Engaging the target
audience
• Sustainable materials
prioritised
• Linked to brand
strategy and values
C
o
n
s
i
d
e
r
e
• Products suitably
packaged
• Using materials to
support a circular
economy
d
m
aterials
• Recognisable to
target audience
• Aligned globally
s
e
alu
d w ith brand v
e
n
i g
A l
Brand
loyalty
Stakeholder
engagement
Driving
brand sales
Creating
memorable
brand
connections
The Pebble Group plc Annual Report 2023
3
STRATEGIC REPORT
Our businesses
Two differentiated
businesses.
Purpose
Vision
Results
To provide
technology
solutions to the
promotional
products
industry.
Facilisgroup
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
promotional product
distributors to
professionalise and grow.
To provide the
largest
companies in
the world with
promotional
products and
related services.
Brand Addition
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.
p
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ADJUSTED EBITDA
£8.9 M
GROUP REVENUE
GROUP ADJUSTED
EBITDA*
14+
14%
N 48+
48%
*this excludes EBITDA from
central operations
ADJUSTED EBITDA
£9.5 M
GROUP REVENUE
GROUP ADJUSTED
EBITDA*
86+
86%
N 54+
52%
*this excludes EBITDA from
central operations
Our investment
case.
A large market
We occupy two differentiated, focused
positions with significant addressable
markets in a c.$50bn global industry.
Facilisgroup
Total Addressable
Market (TAM)
$25bn with
Brand Addition
TAM $5bn with
5.6%
Market share
2.6%
Market share
4
The Pebble Group plc Annual Report 2023
STRATEGIC REPORT
86
+
52
+
N
14
+
46
+
N
We provide digital commerce, products
and related services to the global c. $50bn
promotional products market.
Overview
Services
Model
Facilisgroup provides technology
solutions and a 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.
Software as a Service (SaaS)
technology to power efficiency and
growth
Ecommerce platform for online sales
and processing
SaaS Subscriptions for technology and
online stores
Fees for supply chain management
resulting in recurring annual revenues
Supply chain consolidation for supply
chain advantage
Read more on pages 8-9.
Community events and training
Design corporate ranges and bespoke
products
Margin on products and services
Source from ethical suppliers
Read more on pages 10-11.
Deliver across the globe
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.
Diversified risk
Facilisgroup has delivered growth
since acquisition in 2018.
Brand Addition working under contract
with blue chip clients, generating repeat
revenues on a flexible operating model.
Track record of growth over time
Facilisgroup had a 4-year revenue
CAGR of 17%, high visibility of earnings
and strong cash conversion.
Brand Addition – has repeat revenues
and enduring customer relationships.
Facilisgroup
EBITDA margins
~50%
50% Adjusted EBITDA margin
in FY 23
Facilisgroup
SAAS revenues
17%
4-year CAGR in FY 23
Capability and scale
Strong Balance Sheet to fund
ambitious organic growth plan.
The Group’s cash generation is funding
significant investment in Facilisgroup’s
market leading technology to access
full market opportunity.
Brand Addition centres of excellence
in Europe, the US and Asia support
many of the world’s best known brands
in engaging their stakeholders.
The Pebble Group plc Annual Report 2023
5
STRATEGIC REPORT
Our businesses
Our global
footprint.
EMPLOYEES
568
(Employees number refers to FTEs
as at 31 Dec 2023).
SITES
10
EUROPE
UNITED STATES
GROUP REVENUES
BY DESTINATION
17 %34+
34 % 32 %
17 %
UNITED KINGDOM
REST OF WORLD
6
The Pebble Group plc Annual Report 2023
STRATEGIC REPORT32
+
17
+
17
+
N
Key markets
The Pebble Group plc Annual Report 2023
7
Our businesses
8
The Pebble Group plc Annual Report 2023
Target market:
SME promotional product distributors in
North America
Revenue model:
Subscriptions for technology and online
stores, fees for supply chain
management
Technology processes:
$1.4bn sales (FY 22: $1.4bn) in the North
American promotional products sector
are processed through our technology
with 242 Partners at the end of 2023
(2022: 217)
Customers join and stay:
As a result of a combination of highly
regarded technology, consolidation of
buying power and community learning
and networking events
Revenue 2023:
Employees:
£17.9m
101
$1.42bn
$0.47bn
Gross Merchandise Value (GMV):
Spend with Preferred Suppliers:
STRATEGIC REPORT
Providing technology and services to support growth
and efficiencies in the promotional products market
Suppliers
Distributors
Brands
~100 Preferred
Suppliers
242 SME
Partners
~1,000,000
orders
Technology and
expertise delivering
growth
Visibility of business
performance leading to
better decision-making
Market network and
community brings
benefits beyond
technology
Long-term,
trusted Partner
Facilisgroup provides a digital
commerce platform to promotional
products businesses in North America.
Our technology enables those
businesses to benefit from significant
business efficiency and to gain
meaningful supply chain advantages
from quality suppliers under preferred
terms.
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
(Partners), and over 100 Preferred
Suppliers in North America.
Our recurring revenues, 95% of FY 23
total revenues (FY 22: 93%), are
derived from subscriptions for
technology and a proportion of spend
with our Preferred Suppliers flowing
through our platform.
Client journey
In the year ended 31 December 2023
the business processed over $1.4bn of
sales (2022: $1.4bn) for its Partners in
the promotional products sector. A
typical Facilisgroup Partner processes
between $2million and $20million of
annual sales through our technology.
Facilisgroup attracts and retains
Partners through its proprietary
Syncore software, consolidating the
buying power of its Partners and
developing its community of Partners
and Preferred Suppliers through
learning and networking events.
Supplementing the Syncore technology
is Facilisgroup’s Commercio product.
Commercio generates revenue
through two main pillars: subscription
revenue from providing an ecommerce
solution, ‘Stores’, and income from
suppliers for providing a technology
solution to small entrepreneurial
businesses. In FY 23, the majority of
revenues continued to be generated
through Syncore.
Learn more at facilisgroup.com
Best practice
processes required to
drive sales and profit
growth
Discovery of
possibilities –
technology, Preferred
Supplier network,
community
Implementation of
Facilisgroup technology
and integration with
Preferred Suppliers and
community
Business benefits
received through best
practice processes and
expertise
Long-term, trusted
Partner
The Pebble Group plc Annual Report 2023
9
Our businesses
10
The Pebble Group plc Annual Report 2023
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
Revenue 2023:
£106.3m
Employees:
458
STRATEGIC REPORT An end-to-end creative branded merchandise solutions
Suppliers
Distributors
Brands
Build Brands with
Creative Merchandise
Product Desirability
and Sustainability
Brand Control and
Consistency via Global
Reach
Long-term,
trusted partner
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 clients’ values in thoughtful,
sustainable, 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 generated by selling
product through: 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.
Learn more at brandaddition.com
Client journey
Outsource
merchandise to
protect brand
equity
Tender process to
appoint a trusted,
long-term partner
Expectations
formalised through a
contract
Deliver creativity
and control with
chosen partner
Long-term, trusted
partner
The Pebble Group plc Annual Report 2023
11
Chair’s report
Continuing to invest in
our differentiation.
Richard Law
Chair and Independent Non-executive Director
Against a challenging macroeconomic environment, the Group
has continued to invest in new technology to further its market
differentiation and underpin its long-term growth.
Overview
The Group continued to make good progress against its
long-term strategy to be a key influencer in the
promotional products industry globally through the
provision of its digital commerce technology to
independent promotional products distributors and the
sourcing and supply of high quality, sustainable and
innovative products to many of the world’s leading brands.
The Group achieved revenue in the year of £124.2m
(FY 22: £134.0m) and adjusted EBITDA of £16.0m
(FY 22: £18.0m) which was in line with the guidance given in
our trading update issued on 22 November 2023.
The Group balance sheet remains strong with Group net cash
at 31 December 2023 of £15.9m, up from £15.1m a year earlier.
The strong cash position enabled the business to pay a maiden
dividend of 0.6 pence per share for FY 22 and we propose to
increase this to 1.2 pence per share for FY 23.
The Group’s divisions, Facilisgroup and Brand Addition,
continue to invest in new technology, with the objective of
creating market leading differentiation to win new clients
and underpin the Group’s long-term growth.
Our market and strategy
Facilisgroup and Brand Addition, together process
transactions either directly or indirectly which accounts for
approximately 3% of all promotional products sold globally
and approximately 6% of promotional product transactions
in our strategically important North American market.
This gives the Group a good level of insight into the trends
and development of the promotional products market and
enables us to plan our future strategy accordingly.
Our market insight shows that:
• the global market for promotional products is very
fragmented. The majority of the market is being served by
owner managed SMEs with a high concentration in North
America. As technology proliferates, SME distributors have
a need for digital commerce platform technology to
support their efficiency and growth; and
12
The Pebble Group plc Annual Report 2023
• high quality, sustainable promotional products continue to
be a key strategic component of the brand building,
employee engagement and customer reward strategies of
the majority of large businesses and major brands around
the world.
The Group addresses these market needs through its
Facilisgroup and Brand Addition divisions, respectively.
Our businesses
Facilisgroup
Facilisgroup revenue grew by 9% over the year on a
constant currency basis to $22.2m (FY 22: $20.4m) which
equated in Sterling terms to £17.9 (FY 22: £16.6). EBITDA
margin performance remained robust at circa 50%.
The strong profitability and cash generated by Facilisgroup
is enabling the business to invest into new technology
aimed at making Facilisgroup the leading provider of digital
commerce software and services to the large number of
independent promotional products distributors across
North America. The vision of the Facilisgroup team is a
clear and compelling one, which represents a significant
strategic opportunity for the Group.
Brand Addition
Brand Addition sells promotional products to many of the
world’s largest brands with a focus on quality, sustainability
and innovative design. Sales in the year to 31 December
2023 were £106.3m down from £117.4m in the previous
year. The business retained all major clients during the year
and, through its positive differentiation, was able to
increase its gross margins by 3.4 percentage points.
However, the mix of business across Brand Addition was
skewed more towards underperforming rather than
overperforming sectors, particularly in the second half of
the year. This resulted in a shortfall against the revenue
expectations at the start of the year.
STRATEGIC REPORT Outlook
Trading in 2024 is progressing in line with management
expectations. In light of the Board’s confidence in the return
to growth and to enhance shareholder returns, the Board
intends in the near-term to implement a share buy-back
programme in the Company’s Ordinary Shares up to a
maximum aggregate consideration of £5.0m. A further
announcement will be made in due course.
We look forward to providing a further update on progress
at our Annual General Meeting on 30 April.
Richard Law
Chair
18 March 2024
Dividend
Last year the Group announced the payment of its first
dividend since the IPO and said it was the intention of the
Board for this to be progressive, moving in the medium-term
to our stated position at IPO of making dividend payments
each year of circa 30% of profit after tax. In line with that
policy, the Group is proposing an increase in the final
dividend to 1.2 pence per share for the financial year ended
31 December 2023.
Environmental, Social and Governance
Investing in achieving our strategy with a sustainable impact
is central to the Group’s values and our ESG priorities
remain high on the Group Board’s agenda. We publish our
third ESG report in March 2024 to provide a comprehensive
review of the meaningful action we are taking, which we
believe, is an opportunity to differentiate the Group by
sharing the progress we have made against our
commitments.
In the ESG section of our 2023 Report and Accounts, we
update on the continued progress the Group is making in
reducing its environmental impact and in engaging with
suppliers to encourage the reduction in their Greenhouse
Gas emissions. In October 2023, the Group was awarded The
Race Equality Code Quality Mark which recognises our
efforts and future commitments to Diversity, Equity and
Inclusion (DEI) in the workplace. From a governance
perspective, the appointment of David Moss as our new
Non-executive Director to enhance the Group Board’s
technology experience and skillset was a particular highlight.
David was a co-founder and CTO of Blue Prism which was
an AIM listed company for 6 years before being bought by
SS&C Technologies Holdings, Inc. in 2022.
Team and Board
At The Pebble Group, the Group Board and the Executive
Leadership Team believe that the businesses’
accomplishments are achieved because of its talented and
diverse teams. The Group is led by a Board with a wide
diversity of skills and experience, supported by highly
engaged and motivated teams across the businesses. We
encourage diversity, actively engage with our teams on an
ongoing basis, and are focussed on investing in and
developing our people.
“Our accomplishments
are achieved as a result of
the talent and diversity of
our teams.”
The Pebble Group plc Annual Report 2023
The Pebble Group plc Annual Report 2021
13
13
Chief Executive Officer’s review
Focussed on the
opportunities ahead.
Christopher (Chris) Lee
Chief Executive Officer (CEO)
Against the disappointment of reporting
FY 23 numbers below FY 22, we remain
focussed on the intrinsic strengths of our
businesses and the attractive strategic
opportunities they present.
Introduction
The Group’s results for the year ended 31 December 2023
are in line with the revised expectations as set out in our
trading update of 22 November 2023.
Group revenue was £124.2m, a decrease of 7% on the prior
year (FY 22: £134.0m), being the net effect of the continued
growth in Facilisgroup and reduced sales with a particular
cohort of clients at Brand Addition. We describe the
nuances of this in the Business Review below.
Group Adjusted EBITDA was £16.0m, a decrease of 11%
(FY 22: £18.0m). Net cash after a dividend payment of £1.0m
in June 2023 remains strong, being £15.9m at 31 December
2023 (31 December 2022: £15.1m).
Acknowledging the disappointment of reporting FY 23
results lower than FY 22, it is important to reiterate that
there has been no change to the underlying opportunities
for our businesses. In the Business Review, I set out why I
believe the intrinsic strength and growth prospects for both
Facilisgroup and Brand Addition remain compelling.
Business Review
Facilisgroup: providing a digital commerce platform for
promotional products businesses in North America
£’m
ARR
Other revenue
Total revenue
Gross profit
Gross profit margin
Adjusted EBITDA
Operating profit
FY 23
FY 22
£17.0m
£0.9m
£17.9m
£17.9m
100%
£8.9m
£4.4m
£15.5m
£1.1m
£16.6m
£16.6m
100%
£9.0m
£5.0m
FY 23 revenue of £17.9m (FY 22: £16.6m) was 8% ahead of the
prior year with Annual Recurring Revenue (ARR) in USD
(Facilisgroup home currency) of USD21.2m (FY 22: USD19.0m),
representing 12% growth over the prior year. The vast
majority of revenue is derived from our market leading
Syncore technology product. The activities that underpinned
the FY 23 revenue and heavily influence the future recurring
revenue stream are:
• Partner numbers: 7.6% increase to 242 at 31 December
2023 (31 December 2022: 225);
14
The Pebble Group plc Annual Report 2023
STRATEGIC REPORT • Gross Merchandise Value (GMV): FY 23 USD1.42bn (FY 22:
USD1.40bn). This breaks down as a 9% growth in H1 23 and
a 5% decline in H2 23 as the trading environment of our
Partners toughened; and
• Spend with our Preferred Suppliers: FY 23 USD0.47bn
(FY 22: USD0.46bn). Moving in line with the dynamics of
Partner GMV, it is the reduction of these transactions in
H2 23 that slowed the rate of revenue growth of
Facilisgroup in FY 23.
A major strength of Facilisgroup is its revenue to profit
conversion. This continued in 2023 with Adjusted EBITDA
margins of 50% (FY 22: 54%) achieved while investing in our
team, including product sales and marketing, to support
Partner retention and bringing our new technology to
market.
Our current go to market strategy is through:
• Syncore: our established order workflow product focused
on high quality, growing SME distributors in North America
with sales of greater than USD2m. We estimate there is a
total addressable market of circa 1,600 businesses against
the 242 contracted at 31 December 2023 (31 December
2022: 225);
• Commercio Stores: built specifically to support the needs
of the promotional products industry, Commercio Stores
allows distributors of all sizes to create stores for their
customers that can either stand alone or integrate into our
order workflow technology. At 31 December 2023 there
were 56 paying customers using this technology
(31 December 2022: 130 non-paying); and
• Orders: our order workflow product for the many
Operating profit was £4.4m (FY 22: £5.0m), reflecting the
amortisation charge on our investment in new technology as
we expense a proportion of the products that are yet to
make a material impact on our revenues.
thousands of smaller distributors with less than USD2m
sales is in development. At 31 December 2023 there were
45 non-paying Beta customers using this technology
(31 December 2022: Nil).
Facilisgroup has a highly attractive business model. Building
on the financial results described above, the business has
consistently produced strong SaaS metrics. To illustrate this,
at the end of FY 23, there was:
• 17%, Four-year Revenue Compound Annual Growth Rate;
Trading in 2024 has started in line with management
expectations. Partner numbers at 18 March 2023 were 236 as
a result of 5 Partners being acquired and the exit of 3 Partners
with a lower than average value of GMV. The key metrics of
GMV transactions and spend through Preferred Suppliers, to
date, are both ahead of the same period in 2023.
• 50%, Adjusted EBITDA margin;
• 25%, Operating profit margin;
• 102%, Net Retention Rate on Syncore technology
subscription to Partners; and
• 97%, Partner Retention Rate.
Approach to the market
Facilisgroup Partners are attracted to the business through
its provision of a combination of technology, supply chain
network and community belonging. The GMV being managed
through our platform in 2023 was USD1.4bn representing
circa 6% of the USD25bn North American Promotional
Products industry, giving the business great market insight.
Our strategy is to scale Facilisgroup revenues firstly, via the
continued development and responsible growth in market
share of our established Syncore product. Our expectation
is that the ongoing capital investment relating to Syncore
will continue at its current amount of circa £2.5m per
annum, being approximately 15% of FY 23 revenue.
Secondly, we have chosen to allocate a further proportion
of the business’s own cash generation into developing new
technology products. These are aimed at both widening the
opportunity to provide existing Partners with other
services, plus expanding our addressable market. This
capital investment was approximately £3.0m in FY 23.
Looking forward, the level of the investment into these new
products will be entirely based upon our assessment of the
market, customer feedback and the revenues these
investments will generate.
Brand Addition: providing promotional products and
related services under contract to many of the world’s most
recognisable brands
£’m
Revenue
Gross profit
Gross profit margin
Adjusted EBITDA
Operating profit
FY 23
FY 22
£106.3m
£36.3m
34.1%
£9.5m
£6.2m
£117.4m
£36.1m
30.7%
£11.5m
£8.0m
FY 23 revenue of £106.3m (FY 22: £117.4m) was 9% lower
than the prior year. The revenue decrease in the year was
concentrated on our clients that operate in the Technology
and Consumer sectors. Importantly, client retention remains
strong. Technology sector client budgets were affected as
they reduced their employee numbers and Consumer
sector clients spend has reduced in the last two years
following a peak in 2021. These clients all remain contracted
with Brand Addition, are amongst the best-known brands in
the world, and continue to deliver a repeatable revenue
stream over the medium-term.
Reviewing the business beyond a single set of results, Brand
Addition has built close, long-term client and supplier
relationships. As brand control, product efficacy and
international consistency becomes even more important to
large global brands, Brand Addition has provided additional
services such as multi-country service delivery, global
distribution management and sustainable product initiatives.
The value placed by clients on these additional services is
demonstrated by the increase in its gross margins to 34.1 %
(FY 22: 30.7%). We therefore revise up our gross margins
long-term average to circa 33% from the previously
guided 30%.
The Pebble Group plc Annual Report 2023
15
Chief Executive Officer’s review
Despite the recent contraction in demand in the Technology
and Consumer client sectors in the year, the underlying
strengths and growth prospects of Brand Addition remain
highly attractive. To illustrate this, at the end of FY 23,
there was:
• a large total addressable market of circa $4 billion;
• circa 800 global opportunities on Brand Addition’s target list;
• excellent client retention rates to well-known global
brands;
• highly repeatable revenues over the medium-term; and
• a 3.4%, increase in margins reflecting the widening of
services delivered to clients.
Approach to the market
There is a large addressable market for the specialist
services offered by Brand Addition. International corporates
use promotional products to engage with their employees,
customers, and wider stakeholders. This includes Consumer
Promotions to support businesses in driving their own sales
volumes and Corporate Programmes to support employee
engagement and brand building activities.
These categories of marketing spend are outsourced under
contract because brands wish to have control over:
• thoughtful and creative bespoke products to carry their
brand and engage their stakeholders;
• product quality and supply chain assurances to protect
their brand integrity; and
• a consistent international strategy.
Trading in 2024 has started in line with management
expectations with the sector specific sales challenges
experienced in H2 23 currently following anticipated order
intake trends.
People and Environmental, Social and Governance
Our Group comprises of approximately 560 people based
across multiple geographies. Our team’s talent and
dedication in developing long-term relationships with our
Partners, clients and suppliers is the foundation of our
businesses’ success. Our people are a consistent strength
and my thanks go to everyone at Facilisgroup, Brand
Addition and The Pebble Group.
16
The Pebble Group plc Annual Report 2023
The Group Board also sends its appreciation to Ashley
McCune who left Facilisgroup in October 2023 after
16 years with the business, culminating as Facilisgroup
President from 2020 until her departure. This change led to
me taking a larger role in the day-to-day activities within
Facilisgroup. I have enjoyed deepening my operational
involvement there and building close relationships with
Partners, Preferred Suppliers and the team. As a result, I am
even more drawn to the opportunities ahead for
Facilisgroup and have plans to further strengthen the team
in 2024.
We remain firmly committed to being a leader in the way we
manage our businesses for the long-term and continue to
embed our ESG strategy across our Group. In 2023, we
have made good progress against a wide number of topics.
Our Chair focusses on some of those highlights in his report
and we will publish our third ESG report in March 2024.
Outlook
Trading in 2024 has started in line with management
expectations at both of our businesses. We are
concentrating on progressing our stated strategies.
Chris Lee
Chief Executive Officer
18 March 2024
STRATEGIC REPORT
Our strategy in action
Making progress
against our goals.
Transforming the promotional products industry through the provision of digital commerce.
Strategic
Objective
Order workflow, targeted at promotional
product distributors with > $2m sales in
North America.
Ecommerce platform for use by all
promotional product distributors in North
America.
Order workflow, targeted at promotional
product distributors with < $2m sales in
North America.
Stores
Orders
Growing Annual Recurring Revenues (ARR)
through high Partner (customer) retention,
growth in existing Partner Gross
Merchandise Value (GMV) and adding new
Partners.
We continued to maintain our excellent
retention levels which, combined with new
Partner acquisition, resulted in Partner
numbers increasing from 217 to 242 as at
31 December 2023.
Provide online stores solution for the North
American promotional products industry.
Product development continues.
The number of customers as at
31 December 2023 was 56.
Launch an order workflow product to
smooth order friction between suppliers
and the many thousands of smaller
promotional product distributors in
North America.
Product in beta testing moving towards full
launch in late FY 24.
242 Partners
+11.5%
56 Customers
Maintain focus on our Partner retention and
new Partner acquisition.
Make progress in establishing Commercio as
a market leading ecommerce solution in
North America.
Launch to market in FY 24.
CONNECTED TO OUR
STAKEHOLDERS
Facilisgroup’s technology products transform connections between promotional product
suppliers and distributors across the industry.
Progress
in Year
Goals for
2024
Alignment
to Key Value
Providing products to support global brands, build culture, awareness and meaningful connections
with their stakeholders.
Strategic
Objective
Progress
in Year
WIN client contracts with major brands.
GROW with existing clients across
geographies and brands.
RETAIN major client contracts.
The business continued its success in the
acquisition of global contracts.
The reduction in revenue in the year was
concentrated in our Technology and
Consumer clients. Our Engineering and
Transport sectors showed resilience and
delivered growth.
Client retention remains strong with top 20
clients from FY 22 continuing to contribute
~ 70% revenues in FY 23.
For further detail on the impact on revenue from new client wins, revenue from existing clients, and the impact on the business of
revenue by client category, refer to the Key Performance Indicators on page 45.
Goals for
2024
Continue to attract new contracts with
major international brands through our
credentials in ESG, technology and
creativity, delivered to clients across
multiple geographies.
Continue to develop our relationships with
existing clients, return our Technology and
Consumer sectors to growth and
successfully build on new client
implementations from 2023.
Retain our major client contracts by
continuing to engage their stakeholders and
evolve the service we provide them.
Alignment
to Key Value
AMBITIOUS
POSITIVITY
Brand Addition is ambitious in its continued growth as a trusted promotional product
supplier to new and existing global brands.
The Pebble Group plc Annual Report 2023
17
Our Stakeholders
Listening to
our stakeholders.
Stakeholder engagement
Investing in and developing our stakeholder relationships is central to our Group values.
We know that the Group’s ability to foster effective
business relationships with all of our stakeholders is
critical to our success. The Group Board is committed to
ensuring that strong, positive relationships are built and
maintained with stakeholders to allow for open
engagement and to ensure a good understanding of their
interests throughout our businesses.
To reflect our Group structure, the Group Board has
developed reporting arrangements to ensure relevant and
active engagement takes place between the Group Board
and the Divisional Leads. The output of this engagement
informs Divisional decision-making, with an overview of all
material developments and relevant feedback being
reported to the Group Board to inform its Group level
decision-making.
This section of the Report identifies the Group’s key
stakeholders and why they are important to our businesses.
It contains a summary of how the Group Board and our
businesses systematically engage with those stakeholders,
the matters they engaged with them on in 2023 and the
outcome of that engagement. The Employees section also
explains how employees were regularly consulted and
provided with information on matters of concern to them.
Our key stakeholders
Employees
Why we engage
How we engage
Key topics of engagement
Impact of engagement
The Group employs
people globally whose
skills, expertise, loyalty and
dedication will enable our
businesses to achieve
their vision, strategy and
goals. Our people are
therefore fundamental to
our medium to long-term
success.
We engage with
employees to ensure that
we can continue to
develop and invest in our
people in the right way
and ensure they are fully
engaged with our
businesses and effective in
their roles.
We also engage to create
a positive and inclusive
culture that is sensitive to
the issues that affect our
people, so they can thrive
and grow within our
Group.
• See ‘Group Board Engagement with our
businesses and employees’ on page 60
for details of how the Group Board and
Divisional Leads engage
• The Group Board ensures access to an
anonymous whistleblowing portal and
the Audit Committee oversees any
follow-up action from reports
• Arrangements via Divisional Leads
and/or HR Leads are in place for:
– global and local update meetings on
key topics;
– global and local newsletters and
emails;
– a regular employee forum and
health and safety committee;
– annual employee surveys with
employee engagement score
reported to Group Board;
– a feedback tool on employees’
desktops;
– training platforms used to
disseminate key information,
promote Group culture and cascade
values/expectations;
– communication of new policies and
updates to control register in real
time; and
– ensuring annual Performance
Development Reviews (PDRs) are
conducted
• Business sales and profitability
• Opportunity for US team to invest in
the Company
• Group trading performance, share
price and liquidity
• Group Long Term Incentive Plan (LTIP)
performance and arrangements for
share ownership following 2020 LTIP
vesting
• Leadership changes and Divisional
strategy
• Embracing Diversity, Equity and
Inclusion (DEI) in a meaningful way
• Sustainability and ESG developments:
our work and commitments
• Decision made to have the Group’s
Ordinary Shares traded in the US on
the OTC Market’s OTCQX platform
• A Group funded LTIP platform and
International Share Trust Account (ISTA)
set up and a successful vesting process
facilitated with Q&A and helpline
• A second Group Sharesave Plan (SAYE)
rolled-out to all employees in the
Group
• Group Race Equality Code Quality Mark
accreditation achieved and new DEI
Strategy approved by the Group Board
with further plans in development (see
Nomination Committee report on
pages 66-68)
• Opportunities for personal growth and
• HR updates provided on how to
development
maximise PDRs
• Quality of leadership and culture
• Social impact of our organisation: our
volunteering opportunities and
community initiatives
• HR benefits updates
• Conduct, Ethics and Compliance and
Group expectations
• Job performance and goal
accomplishments
• Workplace environment
• Introduction of a new mentoring
programme in Brand Addition
• Investigation into running a
management development programme
and conducting 360 degree appraisals
in Brand Addition
• Continued Board level focus on talent
identification and development (see
Nomination Committee report on
pages 66-68)
• Capital expenditure projects approved
to improve workplace environment
18
The Pebble Group plc Annual Report 2023
STRATEGIC REPORT Our Values in action:
Connected To Our
Stakeholders
Connected to all our stakeholders
developing long-term relationships
by engaging to understand needs
and aspirations.
Clients and Partners
Why we engage
How we engage
Key topics of engagement
Impact of engagement
Effective engagement is
key to attracting, and
retaining, a quality client
and Partner base from
which our businesses can
nurture strong, long-term
relationships.
Our clients’ and Partners’
success is supported by
the quality of our
products and services.
The Group Board ensures
continued investment in
the right technology,
services and teams to
enhance the Group’s
relationships and create
long-term value on both
sides.
• See ‘Group Board Engagement with our
businesses and employees’ on page 60
for details of how the Group Board
engages
• Group Board maintains arrangements
that foster business relationships with
clients and Partners via its Divisional
Leads in the form of:
– dedicated ‘Partner Success
Managers’ in Facilisgroup;
– Facilisgroup weekly client newsletter
the ‘411’;
– monthly virtual education sessions
on key topics for Facilisgroup
Partners;
– Quarterly Business Reviews (QBR)
with key clients at Brand Addition;
– Brand Addition team presentations
to clients on key topics;
– Client and Partner questionnaires
including Net Promoter Scores (NPS)
to measure client satisfaction;
– ongoing schedule of Partner site
visits to better understand
Facilisgroup Partners and how they
utilise our technology and services;
– hosting all-Partner Facilisgroup
webinars, updating Partners on
major changes and developments to
support their understanding of our
business strategies;
– hosting Facilisgroup Partner ‘Owner
and Key Manager’ events to further
build relationships, and support our
priority setting in the business;
– biannual Facilisgroup supplier survey
and on-demand feedback survey for
Partners; and
– hosting our major in-person
Facilisgroup Partner Summit
• Supply chain management principles
and sourcing strategies
• Feedback on key suppliers
• Ongoing development and
improvement of our technology,
services and client support
• Collaboration on growth strategies
• How to enhance the benefits of using
our technology and the benefits of
engagement
• Creative Product Merchandising and
sustainability
• ESG and sustainability: how we can
support and deliver on clients’ and
Partners’ ESG commitments, whilst also
achieving our own
• NPS continues to be used as a KPI to
indicate the value clients place on us
and assists with maintaining strong
retention
• Brand Addition continues to place
sustainability at the centre of its
five-year strategic development plan
‘ba.ONE sustainability and growth’
• Brand Addition provides targeted
products to meet client’s brand
engagement requirements and
sustainability product needs
• Brand Addition engaged quickly with
clients to minimise the impact of
disruption caused by piracy in the Red
Sea and worked closely with them to
mitigate the impact of not using the
Suez Canal
• The Brand Addition technology
roadmap was driven by feedback from
customers NPS & QBR results, leading
to introduction of a Warehouse
Management System, a new returns
process and payment upfront solutions
being included in technology plans
• Brand Addition developed and
launched its Sustainable Product
Standards for customers and suppliers
• Facilisgroup adapted its events
schedule and content to better fit with
Partner priorities
• Facilisgroup raising the profile of its
leadership team within the business to
support Partner communication
• A Partner elected ‘Partner Advisory
Committee’ was formed, chaired by
Facilisgroup and its senior
management, to include a cross
section of Partners of differing GMV
sizes, longevity and location
The Pebble Group plc Annual Report 2023
19
Our Stakeholders
Strategic suppliers
Why we engage
How we engage
Key topics of engagement
Impact of engagement
The quality of our
products and services is
heavily influenced by the
careful management of
our relationships with
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.
• See ‘Group Board Engagement with our
businesses and employees’ on page 60
for details of how the Group Board
engages
• Group Board maintains arrangements
that foster business relationships with
suppliers via its Divisional Leads in the
form of:
• Supply chain impact and risk mitigation
from product sourcing to logistics and
delivery. This relates to both direct and
indirect production, shipping and
impact on lead times and costs
• Changing industry trends and future
relationships
• Efficiency strategies, growth
– use of formal written contracts,
opportunities
• Taking informed steps to maintain
secure product sourcing throughout
supply chain challenges and mitigate
the impact of macroeconomic supply
chain issues on our customers,
suppliers and team
• Ability to demonstrate compliance and
share with Brand Addition team and
customers
• Supporting the Group’s ESG and
sustainability commitments and goals,
specifically: environmental impact,
quality and sustainability of product,
packaging and supply chain
• How the Group can assist, influence,
and develop its suppliers’ own ESG and
sustainability plans
• Matters of trade compliance and
sustainability
• Adoption and roll out of a Brand
Addition Product Sustainability
Standard (a packaging standard for
suppliers) with the aim of reducing
overall carbon emissions across the
supply chain
• Brand Addition decision to beta test
Scope 3 carbon emissions data
collection principles with key suppliers
to further understand product impact
on Scope 3 emissions across the supply
chain
• Provision of data to Facilisgroup
Preferred Suppliers to support them in
growing its sales to our Partners
• Decision to increase the involvement of
our Preferred Suppliers in the
Facilisgroup Partner Summit events
negotiated transparently to set clear
expectations;
– regular face-to-face and virtual
meetings to discuss performance
and provide feedback;
– two-way evaluation processes to
facilitate business improvement;
– conducting annual ESG surveys;
– use of an annual supplier scorecard
in Facilisgroup to give feedback and
identify areas of opportunity;
– our Facilisgroup Supplier Showcase,
which is a dedicated trade show for
strategic collaboration;
– formal audit processes to provide
feedback and opportunities for
development; and
– supplier training webinars hosted for
Brand Addition suppliers in Asia,
Europe and North America
• Executive Directors participate in
supplier networking events, providing
efficient, easy access to growth and
development opportunities
“The quality of our
products and services
are heavily influenced
by our long-term
strategic partnerships
with trusted suppliers.”
20
The Pebble Group plc Annual Report 2023
STRATEGIC REPORT Shareholders and the wider investment community
Why we engage
How we engage
Key topics of engagement
Impact of engagement
The Group Board seeks
shareholders who are
aligned with its long-term
objectives. Access to
long-term capital supports
our Group’s strategy and
enables our businesses to
invest and grow.
The Group Board engages
with the investment
community with the aim of
continually developing an
understanding of the
Group’s business model,
strategic objectives and
culture.
Regular engagement helps
investors understand the
Group’s operations,
financial performance and
governance, with the aim
of providing the necessary
information to ensure that
all investors can make
informed judgements.
Finally, the Group Board
reports on ESG because
investors and analysts
require detailed
information to guide their
investment stewardship
activities.
• Through detailed content and
• Management, leadership, skills
presentation of the Annual Report and
related investor presentations
coverage and ability
• Group structure and creating
• Publication of a standalone ESG
shareholder value
• Share liquidity and valuation
• Business performance and speed to
scale
• Technology product expansion plans
within Facilisgroup
• Business performance over the
medium to long-term and exposure of
the Group’s businesses to the
economic cycle
• The global nature of the Group
reducing our businesses’ exposure to
the UK economy
• The continued value and use of
promotional products in businesses
with sustainability strategies
• Group approach to ESG, climate
change and corporate governance (see
ESG pages 26-44)
• Group approach to DEI (see
Nomination Committee report on
pages 66-68)
Report, demonstrating the depth of
thought and emphasis placed on this
topic by the Group Board
• Regular and detailed trading updates to
the market
• Commissioning paid for publicly
available research
• Open access investor presentation by
CEO and CFO including Q&A via a live
webcast (FY 22 and HY 23 webcasts
available on the Company’s website)
• Availability of CEO and CFO to answer
questions around trading updates
throughout the year
• One-to-one investor meetings (in
person and virtual) with the CEO and
CFO on markets, strategy and progress
– circa. 100 took place in 2023
• One-to-one investor virtual meetings
with the Chair of Group Board on
approach, values and principles in
relation to governance – two took place
in 2023
• Annual General Meeting that investors
can follow live virtually and submit Q&A,
with advisory vote on Directors’
Remuneration report and all Directors
subject to annual re-election
• Availability of Chair of the Group Board
and Chair of each Committee at AGM
to answer questions
• Detailed ‘Investor’ section on the
Company’s website
• Decision to appoint new Non-executive
Director with significant technology
skillset
• Introduction of standing agenda item at
each Group Board meeting dedicated
to the principle of ‘Unlocking
Shareholder Value’
• Decision made to have the Group’s
Ordinary Shares traded in the US on
the OTC Market’s OTCQX platform
• Building of relationships and initiation
with two new brokers to provide
research on the Group and trading
performance and to increase breadth
of exposure to potential new
shareholders
• Dedicated ‘Analysts’ page on the
Company’s website with feed from
paid-for research to aid accessibility
for all investors
• Investor relations activity and feedback
discussed regularly at Group Board
meetings and factored into decision-
making
• Continued investment to progress DEI
strategy and approach with the
successful achievement of RACE
Equality Code Quality Mark
Accreditation (see page 34)
• Positive feedback taken onboard by
100% approval by those that voted in
2023 AGM for Directors’ Remuneration
report and re-election of each
Director
• Alignment of ESG Report publication
timing with Annual Report
The Pebble Group plc Annual Report 2023
21
Section 172(1) statement
Our Values in action:
Always learning
and growing
Learning and growing knowing there is
always progress to be made
At The Pebble Group
we strive to maintain a
reputation for high
standards of business
conduct.
The emphasis of our
Group Board is on
making decisions with
regard to acting
equitably and for the
long-term.
The Group Board and senior team
understand 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 report template
includes Section 172(1) guidance and
prompts, to ensure that each paper
containing a key proposal explains which
stakeholders are relevant to a decision
and what long-term factors must be
considered in the decision-making
process. Our Company Secretary
ensures that appropriate time is allotted
for appropriate discussion of those.
The Group Board recognises that each
decision made will not always result in a
positive outcome for each of our
stakeholders. However, by having good
governance procedures in place for
decision-making, we aim to ensure that
all decisions maintain a high standard of
business conduct.
This section describes three principal
decisions taken during 2023 and the
effect of stakeholder engagement on
those decisions.
These illustrate how the Directors
have had regard to the matters in
Section 172(1) (a) to (f) of the Companies
Act 2006 in Group Board discussions,
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 2023.
22
The Pebble Group plc Annual Report 2023
STRATEGIC REPORT Key Business Decision (1)
Appointment of additional Non-executive Director
Decision to initiate a search for a new Non-executive Director, the nomination of David Moss by the
Nomination Committee and the Group Board appointment of him as a new Non-executive Director.
Key Stakeholder groups relevant
to this decision:
How did the Group Board have
regard to these interests:
Other relevant s.172
considerations:
Our employees, particularly within our
technology teams.
Our shareholders and the wider
investment community.
Themes and output of
engagement being addressed by
this decision:
Effective stakeholder engagement had
informed the Group Board that:
a)
our businesses could benefit from
more detailed technical oversight
and guidance, particularly around
the technology product
development and expansion plans
within Facilisgroup; and
b) shareholders and potential investors
were interested in the strength of
the leadership team and had sought
reassurance on whether the right
technology-based skills and
experience were in place in
Facilisgroup to deliver that business’
aspirations. This highlighted the
need for enhanced Board oversight
to include technology skills and
experience to ensure that was being
effectively monitored and judged.
When the Group Board considered its
strategic and governance requirements,
it had regard to the output of
stakeholder engagement which led to
the Board investigating the need for
technology skills representation at
Group Board level.
The Chair of the Nomination
Committee actively sought input by
conducting a Needs Analysis to gather
feedback on the most appropriate type
of appointment to fill the skills gap that
had been identified and the required
expertise and knowledge in the
boardroom, including opinions on key
attributes required, taking into account
the needs of the current Heads of
Technology and their teams within each
of the businesses.
The CEO discussed the matter with
each Divisional Lead and Head of
Technology in Facilisgroup because it
was considered to be extremely
important that they were engaged by
the Group Board as part of the
appointment process to ensure that the
resulting decision was a good fit and a
positive step to support the Group
towards its strategic goals. This directly
informed Group Board discussion and
the decision-making process and
ultimately led to the appointment of
David Moss as a new Non-executive
Director.
The Group Board undertook an
extensive search and interview process
in which multiple excellent candidates
were identified. The Directors discussed
the perceived likely approach of David
Moss and his genuine interest to act in a
supportive and coaching role for the
Group’s businesses and noted the
positive impact that was likely to have
on the Group’s employees and culture.
The Directors also had regard to the
likely positive consequences of his
appointment on the long-term success
of the Company, given his own previous
career and therefore understanding and
experience of the likely challenges to be
faced by the Group.
The Group Board and Nomination
Committee also considered their wider
social responsibilities by discussing
Diversity, Equity and Inclusion
considerations and setting out a clear
mandate to the external recruitment
agent to aim to access talent from as
wide and diverse pool as possible and
ensured that DEI played an important
part of the Board appointment process.
Overall, having had regard to all relevant
factors set out in Section 172(1) of the
Companies Act, the nomination of
David Moss as the preferred candidate
was determined by the Nomination
Committees, acting in good faith, most
likely to promote the success of the
Company for the benefit of its
shareholders as a whole.
The Group Board determined that the
proposed appointment was a good fit
for the Group and addressed
stakeholder feedback. In making the
appointment, it concluded that the
appointment was a positive step to
support the Group towards its strategic
goals and long-term success.
The Pebble Group plc Annual Report 2023
23
Section 172(1) statement
Key Business Decision (2)
Payment of maiden dividend
Decision to make a maiden dividend payment in respect of full year 2022.
Key Stakeholder group relevant to
this decision:
How did the Group Board have
regard to these interests:
Other relevant s.172
considerations:
The Group Board had regard to the
other relevant matters in Section 172(1)
in considering this decision, being the
impact on helping to build a positive
reputation for high standards of
business conduct and the likely
long-term consequences. Given the
time since IPO and the Group’s
ambitions, the view was that the
Company should consider the
introduction of payment of a dividend
as a step towards demonstrating that
it was becoming a more mature and
established business.
Our shareholders and the wider
investment community.
Themes and output of
engagement being addressed by
this decision:
Increased investor relations activity and
dialogue with brokers during 2022 and
2023 had informed the Group Board
that:
a) it would be beneficial to take action
When the Group Board considered its
dividend policy as stated at IPO which
had not yet been implemented, it
considered and discussed the
immediate requirement for ongoing
investment in the Group. However, the
Group Board also had regard to the
long-term and considered the interests
of relevant stakeholders in the
application of that stated dividend
policy, which led to the Group Board
planning its first dividend payment.
to improve liquidity in the
Company’s share price;
b) diversifying the category of
shareholder beyond large
institutions was considered
desirable; and
c) investment by Inheritance Tax Funds
and Wealth Management Funds
could help improve liquidity through
more frequent trading, but for
those categories of investors, the
payment of a regular dividend was
important.
24
The Pebble Group plc Annual Report 2023
STRATEGIC REPORT Key Business Decision (3)
OTCQX Market: International Tier Application and Admission
Decision by the Group Board to apply for admission of the Company’s Ordinary Shares onto the
OTC Market’s OTCQX platform (International Tier) in the United States.
Key Stakeholder groups relevant
to this decision:
How did the Group Board have
regard to these interests:
Other relevant s.172
considerations:
The Group Board also considered other
consequences of the decision and said
benefits were expected to include
general increased visibility and a
positive impact on the Company’s
reputation, and possible increased
participation in/value attributed to the
Company’s employee share-based
compensation, which may enhance
ability to attract and retain key
employees in the US. Overall, having
had regard to all relevant factors set
out in Section 172(1) of the Companies
Act, the decision was determined by
the Directors, acting in good faith, most
likely to promote the success of the
Company for the benefit of its
shareholders as a whole.
Our US based employees and wider
stakeholder groups.
Our shareholders and the wider
investment community.
Themes and output of engagement
being addressed by this decision:
Effective stakeholder engagement had
informed the Group Board that:
a) the Group’s US based employees
and wider stakeholders were
interested in investing in and owning
the Company’s shares which would
align their own interests better with
the overall Group, yet they faced
practical difficulties in doing so via
US brokers given the Company’s
London Stock Exchange AIM listing;
b) shareholders and potential investors
were interested in the Company
taking steps aimed at improving the
Company’s share liquidity to help
unlock shareholder value; and
c) Inheritance Tax (IHT) funds (part of
the wider investment community)
were concerned that a “dual-listing”
for the Company would result in it
being ineligible for IHT funds to
invest in.
In its decision-making process, the
Group Board noted that the primary
aim of this decision was to increase
liquidity of the Company’s shares by
creating ready access to US investors.
A secondary aim was to allow our US
stakeholders (employees, Partners and
others) an efficient and convenient way
to invest in and then trade the
Company’s shares. The Group Board
determined that the OTCQX platform
offered an efficient way of achieving
these aims without material time and
resource disruption to other areas,
such as the Company’s operations and
corporate governance structure. The
Group Board also sought guidance on
the “dual-listing” issue for IHT funds and
satisfied itself that admission to the
OTC Market would not classify as a
dual-listing and would not result in the
Company being ineligible for IHT funds
to invest in. The Group then took steps
to include clear and consistent
explanation of that point in all
communications to ensure that no
misunderstanding arose in that regard.
The Pebble Group plc Annual Report 2023
25
STRATEGIC REPORT
Environmental Social and Governance (ESG)
Integrating ESG
into all aspects of
our business.
Our Values in action:
Ambitious
positivity
Ambitious in our commitment to
achieving positive results with
sustainable impact.
ESG introduction
We aim to integrate ESG into all aspects of our
business and strive to create an exciting and
engaging place to work and tackle the increasing
environmental and social challenges faced by
the world.
Investing in how to achieve our strategy with
sustainable impact is central to our Group values.
By listening to our stakeholders, we focus on the ESG issues
that matter to us and to the sustainability of our business in
the long-term. We challenge ourselves to make positive
steps and commitments to ESG in a way that is meaningful,
to future proof our operations addressing ESG demands
and holding ourselves accountable. We see ESG Reporting
and disclosures as an opportunity to differentiate our
Group by sharing the progress we have made against these
commitments.
We aim to act responsibly through effective governance,
managing our direct social and environmental impacts and
risks throughout our operations and striving to drive
positive change. Our intention is to be transparent in our
approach, in our commitments and how we measure and
deliver against these commitments in terms of clear targets
and aspirations. Our ESG priorities continue to be informed
by our materiality assessment representing the topics that
are likely to have the greatest impact on our Group and are
the most important to our stakeholders.
26
26
The Pebble Group plc Annual Report 2023
The Pebble Group plc Annual Report 2023
HeadlinePage TitleSTRATEGIC REPORT Evolving our
ESG priorities.
ESG priorities
In 2023, we updated our materiality assessment and expanded our scope by directly seeking the
views and inputs from clients, Partners, investors, suppliers and our internal teams.
The categories were scored in terms of importance and impact and the results used to help
strengthen and update our previous assessment.
This resulted in the addition of a further four material topics to the assessment, redefining of our
four ESG cornerstones and updating of our priorities and objectives, allowing us to articulate our
efforts more clearly under our framework. As we gather more data and benchmark our
performance we will review and revise our goals to include quantitative measures to help track our
improvements.
The below table details our evolved ESG cornerstones and our 2030 ESG action plan.
CORNERS TONE
PRIORITIES
OB JEC TIVES
Advancing
sustainability
Reduce greenhouse gas
(GHG) emissions and our
environmental impact
Enhance the range of
sustainable products and
support customers to
become more sustainable
Make packaging more
sustainable and reduce waste
Net-Zero in our direct operations by 2030, 100%
renewable electricity by 2025
Prioritise the reduction of Scope 3 emissions
Continued development of bespoke customer focused
products and stock ranges made from sustainable materials
Strive to reduce the amount of single-use plastic in our
product packaging and transit packaging
Aim to reduce the amount of waste being sent to landfill
from our warehouses and distribution centres
Expand Group diversity
Attract, retain and develop
our employees
Aim to achieve the RACE Equality Code Quality Mark and
strive to create an inclusive culture where everyone feels
valued, respected and treated fairly
Empowering
our people
Provide opportunities and
training to help our people
achieve their goals
Aim to achieve and maintain an employee engagement
score of 75
Strive for zero accidents in the workplace
Community
engagement
Responsible
leadership
Provide support and
charitable giving to local
communities
Build and grow
relationships, in the
industry to expand the
Facilisgroup community
Implement and improve
key policies and
frameworks to provide
effective governance
Regularly engage with all
stakeholders
Raise standards in our
supply chain and increase
ESG supplier screening
Aim to volunteer over 1,000 hours annually to support
local community projects and encourage a majority of
our employees to take part in community volunteering
activities to learn new skills and support local projects
Grow Facilisgroup community engagement through
organised events, education, collaboration and training
Development and continuous improvement of key Group
level policies
Improve the supplier assessment programme to
incorporate additional ESG related assessment criteria
into supplier selection
Evaluate our suppliers to verify that they are acting
responsibly, and they are aligned with our ethical and
environmental standards
Achieve ISO27001 certification at Brand Addition and
SOC2 certification at Facilisgroup
The Pebble Group plc Annual Report 2023
The Pebble Group plc Annual Report 2023
27
27
STRATEGIC REPORT
Environmental Social and Governance (ESG)
ESG highlights.
GHG emissions
We have continued to make good progress in
reducing our environmental impact, switching
all of our sites over to renewable electricity and
engaging with our suppliers to encourage the
reduction in their GHG emissions.
The RACE Equality Code Quality Mark
In October 2023, the Group was awarded The
Race Equality Code Quality Mark recognising
our efforts and future commitments to DEI and
race equality in the workplace.
ISO certification
In June 2023, Brand Addition was successful in
extending the scope of its ISO9001 and ISO14001
certifications and in August 2023, it achieved
certification to the ISO27001 information
security standard.
28
The Pebble Group plc Annual Report 2023
HeadlinePage TitleSTRATEGIC REPORT OVERVIE W OF O UR 2023 KE Y ESG HIGHLIGHTS
54%
reduction in our Scope 1
and Scope 2 emissions
58%
female representation
across the Group
100%
of our sites are now
using renewable
electricity, achieving
our target in 2023
Race
Equality
Code
quality mark achieved
30%
reduction in our Scope 3 emissions
71Employee engagement score achieved
across the Group
1,165
Group volunteering
hours donated to local
community projects
1,366
People joined
Facilisgroup Partner
events in 2023
242
Facilisgroup Partners
ISO27001
certification
achieved
ISO9001 and
ISO14001
certification expanded
to cover all key sites
Implementation of Group Framework
on Conduct, Ethics and Compliance
Advancing sustainability
Aim to make a positive long-term
contribution to reducing our environmental
impact across all aspects of our business
Empowering
our people
Aim to create a safe and inclusive culture,
celebrating individuality and diversity
Community engagement
Aim to create a lasting impression in our
local community and build a strong
distributor network, promoting innovation
and collaboration
Responsible
leadership
Aim to lead responsibility through good
governance, embedding clear policies,
processes and safeguards
ESG Report 2023
Our 2023 ESG Report provides an in-depth review of our activity throughout the
year and expands upon the information included in our Annual Report.
An overview is included in the sections below and you are encouraged to read our full ESG Report for
more detail which is available in the ‘Investors’ and ‘ESG’ section of our website.
The Pebble Group plc Annual Report 2023
29
Advancing sustainability
Reducing our
emissions impact.
GHG emissions and energy usage
In 2023, our Group reduced its GHG emissions by 32% (34% against our base year).
The reduction has been a consequence
of a number of different factors
including the lower volume of products
sold through Brand Addition, the
changes to the product mix sold by
Brand Addition, consolidation of
logistics suppliers, access to higher
quality supplier data and transitioning
our sites over to renewable electricity.
GHG emissions in our direct
operations (Scope 1 and Scope 2)
In FY 23, with the completion of moving
all of our sites over to renewable
electricity we have reduced our
market-based Scope 2 emissions by
82%, through a combination of
renewable energy contracts and
Renewable Energy Credits (RECs),
achieving a 54% reduction in our total
direct emissions (55% compared to our
2021 base year).
30
The Pebble Group plc Annual Report 2023
• prioritising services from our
logistics providers that lower carbon
emissions, such as DHL’s Go Green
service and the FedEx carbon offset
pilot programme; and
• continuing to work with our
customers to develop bespoke
products made from sustainable
materials, products that are less
energy intensive to manufacture or
have a lower overall impact
Business travel and employee
commuting
In 2023, we continued to reduce travel
between sites by making best use of
video conference facilities where
appropriate. However, as a
consequence of more people returning
to the office and recommencing
in-person customer visits after the
pandemic, in addition to improvements
in the way that we track travel, our
overall business travel emissions
increased by ~600 tonnes CO2e.
Improving Scope 3 reporting
Our long-term goal for tracking
emissions from purchased goods and
services is to transition to activity-
based reporting. This remains
challenging due to complexities and
variabilities in collecting the necessary
product data. In 2024, we will
investigate the possibility of introducing
intensity-based reporting for select
Scope 3 categories to help with future
emissions tracking.
Energy savings and energy
efficiency
Consolidating our German office and
warehouse locations in 2022 enabled us
to reduce our overall Group energy
consumption by 7% (208MWh) against
prior year. A larger working area,
efficiency savings and the fitting of LED
lighting and more efficient heating in
our German premises allowed us to
reduce our energy consumption over
the long-term. In our other locations,
we continue to educate our team
members on being energy conscious,
turning off lights and shutting down
computers and monitors to help
minimise our energy usage.
Indirect emissions (Scope 3)
Indirect emissions from Brand Addition
accounts for 99% of the Group’s total
carbon footprint with the majority of
the emissions falling into two categories,
purchased goods and services and
transport and logistics.
We recognise that a large proportion of
the emissions savings in 2023 result
from a reduction in the volume of
products purchased through our
suppliers and data accuracy
improvements, such as moving to
supplier specific reporting for our main
logistics providers. However, some
savings result from the proactive steps
taken across the Group, as detailed
below:
• launching a supplier engagement
project, to educate our suppliers on
our long-term strategy and goals to
reduce our GHG emissions. The aim
of the project was to encourage
suppliers to take action and address
their own carbon emissions;
STRATEGIC REPORT GHG emissions and Streamlined Energy and Carbon Reporting (SECR)
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 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 SECR Regulations.
In the table below we have reported the GHG emissions and energy usage for the Group and split out the relevant UK
based operations required for SECR.
Energy consumption (MWh)
Natural gas
Renewable gas (Biogas)
Electricity (Standard)
Electricity (Renewable)
Transport fuel (Company owned vehicles)
Transport fuel (Employees own vehicles)
Carbon emissions (tonnes CO2e)
Scope 1
Scope 2
Scope 3
Stationary combustion (Gas)
Mobile combustion (Company owned vehicles)
Purchased Electricity (Location based)
Purchased Electricity (Market based)
Purchased goods and services
Fuel-and energy-related activities
Upstream transportation and distribution
Waste generated in operations
General business travel
Business travel in employees own vehicles
Employee commuting
Total Scope 1 and Scope 2 emissions (Location-Based)
Total Scope 1 and Scope 2 emissions (Market-based)
Total Scope 3 emissions
Offsets
Total emissions (Location-based)
Total emissions (Market-based)
Total energy consumption (MWh)
% Renewable electricity
% Sites using renewable electricity (31 December 2023)
Intensity metrics (tonnes CO2e per £1m of revenue)
Intensity ratio Location - based
Intensity ratio Market – based
2023
2022
UK
-
313
216
60
-
21
UK
63
-
61
79
-
-
-
-
-
5
-
124
142
5
-
129
147
610
22%
100%
UK
2.09
2.39
Group
822
313
216
1,122
118
21
Group
227
29
411
79
27,590
165
6,308
1
930
5
407
667
335
35,406
1,220
34,853
34,521
2,612
84%
100%
Group
281
278
UK
85
198
231
43
-
33
UK
58
-
61
81
-
-
-
-
-
8
-
119
139
8
-
127
147
590
16%
50%
UK
1.81
2.10
Group
1,048
198
1,228
186
127
33
Group
251
34
434
439
40,811
178
8,990
1
302
8
336
719
724
50,626
825
50,520
50,525
2,820
13%
36%
Group
377
377
Variance
UK
-100%
58%
-6%
40%
-
-36%
UK
9%
–
–
-2%
-
-
-
-
-
-38%
-
4%
2%
-38%
Group
-22%
58%
-82%
503%
-7%
-36%
Group
-10%
-15%
-5%
-82%
-32%
-7%
-30%
–
208%
-38%
21%
-7%
-54%
-30%
2%
–
3%
6%
50%
UK
15%
14%
-31%
-32%
-7%
71%
64%
Group
-25%
-26%
Methodology
1. Group emissions column includes UK emissions.
2. GHG emissions have been calculated by each business and then
summarised in this table.
3. ‘Biogas’ is purchased UK gas from our energy provider backed by RGGOs /
BMCs.
4. All carbon emissions have been calculated using the Normative carbon
reporting engine unless otherwise stated.
5. All carbon emissions have been restated to:
- Remove the stationary combustion market-based calculation to ensure
that gas usage is correctly reported to account for the use of biogas.
- Reflect the changes to the emission factors used for Facilisgroup
Scope 3, purchased goods and services due to the retirement of the
Quantis GHG protocol Scope 3 evaluator and the inclusion of additional
expenses associated with purchased goods and services due to
improvements in data collection.
Brand Addition
Employee commuting has been calculated using the relevant 2023 DEFRA
(Department for Environment, Food & Rural Affairs) emissions factors (EFs).
Facilisgroup
Natural gas consumption has been calculated using the 2023 EFs published
by Environment and Climate Change Canada.
Employee commuting has been calculated using the relevant 2023
DEFRA EFs.
Scope 3 emissions have been calculated using the US EPA Supply Chain
Greenhouse Gas Emission Factors v1.2 by NAICS-6.
The Pebble Group plc Annual Report 2023
31
Product sustainability
Responsibly increasing
our sustainable product
portfolio at Brand Addition.
P OS T- CONSUMER
RECYCLED DOWN PADDING
100%
Product sustainability
Promotional merchandise plays
an important role in connecting
brands with their target
audience. As sustainability
increases in importance, our
customers recognise that the
products used to promote their
brand need to reflect this
changing landscape. Brand
Addition is well placed to
support its customers in facing
these challenges.
In 2023, Brand Addition launched a
sustainable product catalogue. The
catalogue was developed to support
internal sales teams and customers building
sustainable ranges to select products that
have been pre-assessed against our own
internal product sustainability standards to
ensure that any sustainability claims are
validated. The catalogue features over 350
different sustainable products in all core
categories and provides varied and
innovative products that not only allow our
customers to promote their brand in a
sustainable way but also explains how each
product provides a sustainable benefit and
supports the circular economy.
32
The Pebble Group plc Annual Report 2023
P OS T- CONSU MER
RECYCLED ALUMINIU M
40tonnes
STRATEGIC REPORT “Our sustainable
product catalogue
features over 350
different items.”
We have also continued to provide our
customers with innovative, bespoke,
sustainable product solutions.
Examples include textile products
made of fabric repurposed from
recycled plastics found in our
waterways and using organic materials
that reduce production waste and are
easily recycled or biodegradable.
Our aim with all the products we
supply is that they are useful,
practical, desirable and something that
people want to keep. This not only
prevents waste, but also helps our
customers increase brand impressions
and grow their target audience.
Packaging and waste
Packaging
Packaging plays an important role in
protecting the products we deliver to
our customers and we also recognise
our role in supporting the circular
economy by ensuring that the
packaging we use is appropriate and
can be easily recycled to minimise its
environmental impact. To minimise the
amount of packaging used, where
possible, we make direct shipments
from manufacturers to our end
customer or send out product from
our warehouses in its original
packaging. Where customers require
smaller quantities, we use our own
transit packaging to package the
goods.
In 2023, we made a number of
improvements to our own internal
transit packaging. These changes were
focused on our US warehouse and
included:
• replacing the carton sealing tape
used historically with a reinforced
tape that has resulted in a reduction
in the amount of tape used during
application
• reducing the thickness of our smaller
boxes to reduce cardboard content
without compromising the products
being transported
• increasing the recycled content in
our packaging void fill
• improved the way in which individual
products are packaged to reduce the
volume of packaging materials used
Waste
In 2023, we conducted several waste
audits across the Group. From the
audits we found opportunities in our
offices to improve waste management
by consolidating waste bins and adding
a compost programme. In our
warehouses we added additional waste
bins in strategic locations,
standardising the colour of different
waste streams, and adding new signage
at existing bin locations. We expect
these updates should help us continue
to reduce the amount of waste sent to
landfill and help improve our recycling
rates.
The Pebble Group plc Annual Report 2023
33
STRATEGIC REPORT
Empowering our people
Building a culture
of openness,
belonging and trust.
The Pebble Group is committed to developing a culture of openness, belonging and trust which is
central to our Group values. We strive to provide an inclusive place to work where everyone feels
valued, respected and treated fairly.
We are focused on providing equal opportunities throughout the Group and aim to promote a ‘speak-up’ culture with
inclusive systems and processes. We want to attract and retain the best individuals by providing opportunities to learn
and grow through the development and integration of inclusive and equitable practices. This is central to our Group
values.
Diversity, Equity and Inclusion
Our Group DEI policy and our formal succession planning
process set out our approach to DEI and how we aim to
embed and enhance our commitment to further diversify our
teams.
In April 2023, the Group appointed an external governance
consultant to commence ‘The RACE Equality Code’
assessment, joining a network of over 50 other businesses
who have completed a formal evaluation of how race and DEI
is tackled within the workplace. The assessment consisted of
a comprehensive four stage review which covered:
• Diagnostic document review and survey
• Governance assessment
• Code diagnostic self-assessment
• Inclusion support questionnaire
The results of the assessment provide a detailed account of
business performance against the four key principles of the
RACE code (Reporting, Action, Composition and Education),
identifying areas of strength and making suggestions for areas
of improvement. All businesses who adopt the RACE code
are required to provide a written statement against each of
the four RACE principles detailing the actions they are going
to take over a three year period to move the dial of RACE
and DEI in their organisation to influence positive change,
moving from being data aware to becoming data driven.
In October 2023, The Pebble Group was
awarded The RACE Equality Code Quality
Mark to recognise the commitments it
has made towards accelerating efforts to
address DEI and race. The action plan
allowed us to revisit and update our DEI
strategy, focusing on seven key areas to
improve DEI across the Group. In order
to retain the ‘RACE Quality Mark’, regular external reviews
and check-ins are undertaken to confirm that progress is
being maintained against our four principles statement and
action plan. The RACE code evaluation has helped us create
a clear and tailored action plan specific to our business needs
that will allow us to focus on the most important areas of DEI
and race across the Group.
Internally we continue to evolve our approach to recruitment
and have implemented steps to ensure we have the widest
pool of candidates when we advertise new roles and we
continue to work on attracting candidates from all
backgrounds. The appointment of David Moss as our new
Non-executive Director in 2023 saw our Group Board gender
balance reduce. However, the senior roles of our two female
Board members (being CFO and Senior Independent Director)
are strengths from a gender balance perspective and it is
considered to remain good. Overall, our gender and ethnicity
split across our businesses remains similar to previous years.
As part of our new DEI strategy, we will benchmark ethnic
diversity levels in the Group against regional and national
data. We will also use the help of our network through the
RACE Equality forum to identify opportunities to continue to
improve.
34
The Pebble Group plc Annual Report 2023
STRATEGIC REPORT Our Values in action:
One team, diverse
and united
We are one team using our diverse
skills and experience to support
each other’s successes and
challenges, respecting our
differences.
Our Values in action:
Always learning
and growing
Learning and growing knowing there is
always progress to be made
Group diversity figures
The Group is committed to fostering a culture of diversity and inclusion. We take
pride in our gender balance and consider it to be an area of strength. We are also
proud to have a diverse range of people representing nationalities from all over the
world, with approximately 36 different languages spoken throughout the Group.
FY 23 Group Diversity Figures
GENDER SPLIT
DIVERSITY SPLIT
42%
Female
Male
4%
11%
43%
13%
5%
58%
67%
Asian
Black
White
Other ethnically diverse
team member*
Not known or prefer not
to say
*Other ethnically diverse team member incorporates:
Hispanic/Latino, Mixed, Other, Pacific Islander, Native American
GROUPWIDE LEADERSHIP GENDER SPLIT
GROUP BOARD GENDER SPLIT
GROUP EXECUTIVE COMMITTEE GENDER SPLIT
44%
Female
Male
33%
43%
56%
57%
67%
Female
Male
Female
Male
Operating Board, their direct reports
and senior management.
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.
The Pebble Group plc Annual Report 2023
35
Diversity, health, well‑being
and engagement
Health, safety and well‑being
The Group is committed to providing a safe working
environment for all its employees that promotes a healthy
work–life balance and encourages a positive attitude towards
mental health and well-being.
The Group has its own health and safety policy and each
Group business has adapted its own version of the policy to
make it relevant to its business. Each business has its own
appointed health and safety officer who is also a member of
the senior leadership team and is responsible for the health,
safety and well-being of its employees. Health and Safety
Committee meetings are held at least once a year at each
Group business and these are an opportunity to review
findings from workplace risk assessments or health and safety
walkarounds. The Group Board is provided a summary at
each Board meeting on the health and safety performance of
each business. In 2023, there we no reportable accidents
recorded across the Group.
In 2023, we observed a 15% increase in the number of team
members participating in the Brand Addition ‘ba well-being
programme’. Facilisgroup conducted its annual mental health
awareness month in May and extended employee access to
the ‘Calm’ app which offers tailored content to help
individuals manage stress, anxiety and improve sleep.
Employee engagement
We believe that having an engaged workforce is essential to
ensuring that our business continues to thrive and evolve.
Throughout the year, we hold meetings, briefings and
employee forums to provide team members systematically
with information of concern to them as employees, to give
them opportunities to ask questions and to achieve a
common awareness on the part of all employees on business
progress and the performance of the Group. In 2023, we
arranged two networking sessions with the Group Board
where senior employees across the business had the
opportunity to talk with all Directors on various topics in an
informal environment. In addition to the briefings and
meetings, we host a number of events throughout the year
focused on team building, celebrating success and building a
supportive and inclusive culture across the Group. For
further information on our employee engagement activity
please see pages 18 and 34-37.
We conduct employee engagement surveys at least once a
year to monitor our performance. In 2023, we achieved an
average employee engagement score of 71 across the Group,
which is a slight reduction on our 2022 score of 75. In 2024,
we will review the feedback and work on actions as
appropriate. The results of employee engagement surveys
are shared annually with employees through company
briefings and newsletters and published annually in our
ESG Report.
Training and development
We consider the training and education of our employees an
important part of our long-term success. We strive to
provide them with the best opportunities to learn and grow
in their roles. Our online training platforms offer a variety of
courses and materials that cover both essential and optional
topics. In 2023, 33 new training courses were added across
the Group with a total of 4,097 hours of training completed
by our team members.
In September 2023, Brand Addition introduced a pilot
mentoring programme. The aim of the programme is to help
nurture and grow talent within the organisation, pairing
employees with mentors to assist them with their personal
development and support them so they can improve and
advance. Twelve employees (mentors and mentees) joined
the initial programme which will run for six months and,
based upon feedback, changes will be made and the
programme will be extended in 2024.
36
The Pebble Group plc Annual Report 2023
STRATEGIC REPORT Community engagement
1,165hrs
Group volunteering
hours during 2023
Volunteering
We partner with charities and good causes to provide local
support in a variety of different ways. We encourage our
employees to take part in volunteering projects and give
them up to two days paid time off to do so. The projects
can range from companywide initiatives to supporting
smaller community projects. Not only do we see our
volunteering activities helping the local community, but we
also see a great benefit to our employees. By supporting
these projects our team members have the opportunity to
learn new skills and broaden their experience to help them
learn and grow.
Facilis Cares
Facilis Cares aims to capture the collective spirit and
dedication of the Facilisgroup Community to help fulfil the
needs of underserved and underprivileged individuals
through service and donation.
During the 2023 Partner Summit in Denver, Facilisgroup
partnered with Wish For Wheels, a non-profit organisation
to build and donate brand-new bicycles and helmets to
children in need in the Denver area. Our community of
Partners, Suppliers, and Facilisgroup staff worked together
and built 30 bikes for a group of happy children.
Facilisgroup also partnered with the St. Louis area foodbank
during the summer and was able to donate 20 hours packing
boxes, collect 543kg of food, and provide 974 meals to local
families in need.
Strengthening links with the local community
Brand Addition continued to strengthen its links to the local
community providing further help and support to ‘Mustard
Tree’, a local charity which aims to combat poverty and
prevent homelessness by supporting the vulnerable back to
work. In H2 Brand Addition offered temporary work
placements to help individuals improve their skills and their
confidence in the workplace.
Facilisgroup Partner summits
Fostering growth and community within the
promotional products industry
Facilisgroup extends beyond the conventional definition
of a technology company. Working with its Partners and
Preferred Suppliers, Facilisgroup creates a community
through which all parties benefit from sharing best
practice, collaborating on industry trends and offering
exclusive access to events, webinars, training, and
networking opportunities to ultimately build a better
and stronger industry for all.
In 2023, Facilisgroup organised a Supplier Showcase and
two Partner Summits, collectively attracting 1,366
participants. The events provided attendees with
invaluable networking opportunities, complemented by
thought-provoking workshops and social events. From
panel discussions exploring the influence of
transformative technology on the industry to workshops
dedicated to leadership best practices, guests gained
practical takeaways tailored to their businesses and the
larger promotional products industry. Facilisgroup will
also continue to leverage Partner summits to serve as a
dedicated platform, specifically, to increase awareness
of the promotional products industry’s impact on the
environment and to champion actions aimed at
mitigating climate change.
The Pebble Group plc Annual Report 2023
37
Responsible leadership
Responsible sourcing
The Group has a mature vendor management process for
product purchases which ensures that all suppliers used are
validated through a robust vendor assessment. On-site
assessments are mandatory for any product suppliers located
in countries deemed higher risk such as Turkey, China or
other parts of Asia. These assessments are predominantly
undertaken by our own audit team. Our vendor assessments
consider social and ethical business practices, working
conditions and product quality and compliance obligations.
If issues are identified, corrective action plans are issued and
followed-up to ensure completion. If any critical issues are
identified or actions not completed, the supplier cannot be
used. Re-assessments of all suppliers are conducted every
two years.
In 2023, Brand Addition undertook a total of 209 vendor
assessments of its supplier network. 5 critical non-
conformances were identified and 4 suppliers were not
approved for use as a result.
We have mandatory compliance clauses integrated into third-
party partner and supplier contracts which include corporate
social responsibility, anti-bribery and corruption, anti-slavery
and human trafficking, trade restrictions and facilitation of
tax evasion. These contracts include termination rights for
non-compliance.
Product quality and compliance
Customers want to be confident that the products they use
to promote their brand are compliant and meet all the
necessary regulatory requirements, are free from defects,
manufactured through approved supply routes and will not
present any safety concerns. If any claims are made related
to a product or its materials, customers want to be reassured
that these claims have been validated. Product compliance,
quality and safety is a non-negotiable requirement.
Brand Addition has a dedicated product compliance function
that supports purchasing and merchandising teams to
develop product testing plans, undertake product risk
assessments, evaluate product compliance documentation
and test reports to ensure that products are fit for purpose.
For bespoke manufactured products, extensive product
testing is undertaken with certified third-party laboratories
to ensure that products do not contain hazardous substances
and products have been tested for typical use cases.
38
The Pebble Group plc Annual Report 2023
STRATEGIC REPORT “ISO27001 certification
achieved in 2023.”
Information security and data protection
Information security and data protection is an essential part
of our Group IT strategy. We recognise that cyber threats
are constantly evolving and pose a risk to all businesses. We
remain aware and vigilant about these risks and are
committed to ensuring that we have robust processes and
systems to protect the data that we process and uphold
high standards in data ethics and security.
We adopt a risk-based approach to identify, assess, and
mitigate the cyber risks that may affect our business.
We invest in the technology and solutions to protect our
network, data, services, and hardware from unauthorised
access, misuse, or damage. We monitor and test our
security controls and systems regularly to minimise the
possibility of any potential incidents.
We educate and train our team annually on the importance
of cybersecurity and privacy, and foster a culture of security
awareness and responsibility across our organisation.
We aim to follow best practice to ensure compliance with
relevant laws and regulations in the countries where we
operate. As a Group, we are committed to collecting,
processing and analysing data, in line with data privacy
legislation, and we work closely with our suppliers,
customers and Partners to ensure that data and its use is
compliant with applicable legislation. During 2023, the
Group team developed a new IT security incident response
plan for implementation across the Group.
Alignment with international standards and certifications
Ecovadis
Our Brand Addition business retained
its Platinum Ecovadis rating for a fourth
year, positioning the business within the
top 1% of similar companies in its
approach to sustainability. Being an
independent evaluation and rating
platform, we are proud of our industry
leading score which reflects the
Group’s focus and commitment to
sustainability.
Carbon Disclosure Project (CDP)
Brand Addition makes an annual
submission to CDP, declaring its annual
GHG emissions and progress against its
reduction targets. Its declaration also
supports the Scope 3 emission tracking
for clients linked to CDP. In the 2023
assessment, Brand Addition improved
its CDP rating from a ‘C’ to a ‘B’,
reflecting its continuing efforts to tackle
climate change, embedding
climate-related risks into the risk
management process and advancing its
carbon reporting, tracking and
disclosures.
ISO management systems
In 2023, Brand Addition expanded the
reach of its ISO9001 (quality
management) certification to cover all
of its main locations, this has allowed all
of the sites to align its key processes
and procedures across the business
enhancing business efficiencies and
continual improvement. ISO14001 was
also expanded to cover all of our key
warehouse locations. Brand Addition
also achieved ISO27001, demonstrating
compliance of its information security
management system with an
international standard.
The Pebble Group plc Annual Report 2023
39
Non‑Financial and Sustainability Information statement
This section of the Strategic report constitutes the Group’s Non-Financial and Sustainability Information statement to
comply with the Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2022.
Task‑force on climate‑related financial
disclosures (TCFD)
In our Annual Report 2022, we made our first TCFD
disclosure detailing the climate-related risks and
opportunities (CRROs) that our Group faces to help
stakeholders and investors make informed decisions about
our business. This year we have updated our disclosure to
reflect any changes in our priorities and actions to strengthen
how we address and mitigate the climate-related risks and
take advantage of the opportunities that have been identified
from our assessment.
The updated assessment did not reveal any new or increased
CRROs and of the CRROs identified, none have been deemed
to have a material or significant impact on the financial
performance of the business. Where risks have been
identified, the impacts remain low, with the highest potential
for impact being experienced following Scenario ‘A’ (early and
orderly policy action – smooth transition) but only over the
long-term, mainly affecting our Brand Addition business.
Although we see demand increasing for more sustainable
products and stakeholders increasing the level of business
scrutiny we are well placed based upon the actions and
pro-active steps we have in place to minimise and mitigate
any significant impacts.
Climate‑related risks and opportunities
CRROs have been fully integrated into the risk management
process and are considered alongside all of our potential
business risks. With the introduction of TCFD we updated our
over-arching risk management framework to consider not
only the longer term risks but how different climate-related
scenarios may also impact the business and how these risks
could be mitigated.
CRROs are assessed and updated twice per year as part of
the risk management process and the Audit Committee
provides oversight of climate-related risks as part of its
integrated risk review.
This year we have continued to develop our climate-related
scenarios, expanding them to include possible Group
outcomes and how they would impact the business.
Transitional risks pose the greatest risk to the business but at
this stage we do not believe that any of the risks identified
would have a material impact on the business. In our
assessment we did identify some areas of risk but as our
businesses does not directly manufacture products, we are
somewhat shielded from any material impacts. Where risks
have been identified, steps are already in place to minimise
the impact.
We recognise the importance of ensuring that we continue to
develop and evolve our risk management framework, and we
will ensure that the scenarios we use to quantify risk factors
remain current and continue to evolve to represent the
changing landscape.
40
The Pebble Group plc Annual Report 2023
STRATEGIC REPORT Scenario planning
The table below details the three different climate-related scenarios that we have used to assess the possible transitional and
physical impacts that may occur as a result of each scenario. These scenarios have been developed in line with publicly
available data from: The Intergovernmental Panel on Climate Change (IPCC) SR15 report and the Bank of England, Key elements
of the 2021 Biennial Exploratory Scenario: Financial risks from climate change.
Scenario A
Scenario B
Scenario C
Early and orderly action
(No greater than 2°C rise)
Late and disorderly action
(No greater than 2°C rise)
No change to current situation
(Greater than 3°C rise)
Early committed action by society to
reduce global emissions.
Delays in implementing policy needed to
reduce global emissions until 2031.
Co-ordinated polices and legislation
immediately implemented towards a low
carbon economy intensifying over time.
Sudden and disorderly policy changes to
compensate for a late start to transitioning
to a low carbon economy.
Governments fail to introduce additional
policies to address climate change
resulting in ambitions falling behind Paris
agreement targets.
Global temperatures increase above 3°C.
Action taken is sufficient to limit global
warming to less than 2°C in line with Paris
agreement.
Global warming is limited to 2°C in line
with the Paris agreement, but transition
starts much later.
Increasing levels of demand for sustainable
products.
Customers focus on high quality goods
rather than low-cost items.
Increasing pressure from stakeholders for
businesses to demonstrate tangible steps
towards reducing carbon emissions and
minimising environmental impact.
Increasing regulations, frameworks and
reporting requirements for businesses.
Customers require increased levels of
transparency and disclosures to avoid
greenwashing and lowering emissions.
Increasing costs related to energy and
carbon offsets as more businesses look to
meet net-zero commitments.
Group transition risks
Reduced short term action and less
pressure put on businesses to switch to
sustainable products.
Rapid cost increases due to fast sweeping
changes related to energy transportation
and the use of non-environmentally
friendly materials.
Reduced demand for promotional
products and services as customers look
for more cost-effective ways to promote
their brand, when policy changes are
introduced.
Significant and rapid changes to
regulations opening up businesses to
litigation risks and shareholder
dissatisfaction.
Group physical risks
Regulations reduce around the
environment and climate change.
Demand for sustainable products plateaus
as customers switch back to lower cost
non sustainable materials adding to
problems with waste and pollution.
Energy costs start to increase as fossil
fuels become less readily available.
Slow rise in the number of extreme
weather events causing minor disruption
to travel routes or production.
Rapid acceleration in the number of
extreme weather events occurring, leading
to production and travel disruption.
Severe impacts from extreme weather
events, unpredictability in transport routes
and production.
Damage to crops making manufacturing
more difficult, resulting in production
shortfalls and / or price increases.
Increasing costs of raw materials and lack
of availability of certain products.
Increased customer frustration due to
missed delivery dates and stock
availability.
Shortages of raw materials and huge price
increases and volatility making certain
products no longer viable.
Instability in global markets and countries
as economies suffer from prolonged
extreme weather events.
Political and social unrest.
The Pebble Group plc Annual Report 2023
41
Non‑Financial and Sustainability Information statement
Highest scoring climate‑related risks and opportunities
The table below details the highest scoring risk categories as identified from our CRROs assessment and the mitigating
actions that we have in place or the steps we are taking to continue to monitor and minimise the impact. Each risk is
considered against each climate-related scenario and three different time frames; short (1 year), mid-term (2-5 years)
and long-term (6-10 years).
RISK TYPE
TRANSITIONAL
Changing customer behaviour
– Changes in customer behaviour may affect the types of products and services
required to support promotional activity.
– Demand may reduce for low-cost promotional goods or move to more online
offerings.
Uncertainty in market signals and increased cost of raw materials
– Uncertainty in the market may make it more difficult to meet customers’
requirements around climate change and will result in more problematic
product sourcing to meet customer demand and customer transparency
requirements.
– Increasing costs of certain raw materials may make certain products no longer
viable and increases in energy process may further increase the cost of goods
and delivery.
Shifts in customer preferences / expectations
– Failure to act quickly to changing customer preference and expectation is
likely to result in customers sourcing their goods and services from elsewhere.
Increased stakeholder concern or negative stakeholder feedback
– Failure to act quickly to changing customer preference and expectation is
likely to result in customers sourcing their goods and services from elsewhere.
SUMMARY OF MITIGATING ACTIONS
Clear ESG strategy and action plan to meet the changing
needs of our stakeholders.
Dedicated sustainability team to support the transition to a
low carbon economy.
Close working relationships with customers to ensure that
we are aligned with their future sustainability needs.
Creative services and account management teams work
with customers to find innovative products to meet budget
needs to help mitigate raw material cost increases.
Clear ESG strategy and action plan to meet the changing
needs of our stakeholders.
Dedicated sustainability team to support the transition to a
low carbon economy.
Regular and ongoing stakeholder engagement ensures that
we are aligned with the needs and expectations of our
stakeholder groups.
Evaluation and certification to recognised standards and
ratings such as Ecovadis, CDP, ISO9001, ISO14001 and
ISO5001 to demonstrate a best practice approach.
PHYSICAL
Increased severity of extreme weather events
– Not embracing a low carbon economy is likely to result in customers and
stakeholders becoming disinterested in the business and the inability to attract
new customers or investors.
Location planning built into product sourcing and
manufacturing to mitigate against the risk of disruption due
to extreme weather events.
Robust supply chain with second source alternatives to
quickly adapt to changes.
OPPORTUNITIES
CURRENT AND FUTURE ACTIONS
Product sustainability
– Providing customers access to more sustainable products, whether this is
through advising customers on sustainable alternatives or showcasing
sustainable products or suppliers.
– Where sustainable products are offered, we work with our supply chain to
validate product sustainability claims to prevent greenwashing.
– Being dynamic and flexible allows us to meet customer needs and back up
claims with evidence, building long lasting relationships with customers based
upon honesty and trust.
– Being able to meet the sustainability needs of larger businesses may lead to
additional new business wins and also reduce the demand of non-sustainable
materials reducing the environmental impact.
Shifts in customer preference
– As customers and Partners become more aware of the impact of climate
change and how this affects their brand there will be a shift to ensure that
they are partnered with the right business partner.
– Having a robust ESG strategy and clear climate reduction targets may offer a
competitive advantage strengthening existing relationships and attracting new
business.
42
The Pebble Group plc Annual Report 2023
Providing innovative products and solutions to meet the
sustainability needs of our customers, through a validated
supply chain.
Supporting customers with advice and expertise to
develop future product ranges or bespoke products made
from sustainable materials to meet the growing needs of
their businesses.
Having a clear ESG and sustainability strategy aligned with
our stakeholders helps to retain existing customers and
win new business opportunities as customers seek to
partner with customers who can support their changing
needs.
STRATEGIC REPORT TCFD disclosure table
RECOMMENDATION
RESPONSE
GOVERNANCE
DISCLOSURE
LOCATION
a) Describe the Board’s oversight
of climate-related risks and
opportunities
The Group Board has overall responsibility for ESG and provides
oversight of the ESG strategy and actions related to the CRROs
identified by the Group.
Page 64 in our
Corporate
Governance section
The Group Board reviews progress against the ESG strategy every six
months as part of its strategy review meeting. The Group Board is
supported by the Audit Committee who provides oversight of the
TCFD CRROs assessment as part of its integrated risk review.
The Senior ESG officer reports to the Group Board at least annually on
progress against the ESG strategy and goals and provides specific
updates on environmental performance, including any CRROs.
ESG is a standing agenda item at the Group Executive Committee.
b) Describe management’s role in
assessing and managing climate-
related risks and opportunities
The Senior ESG Officer is responsible for developing and executing the
ESG strategy including the assessment of any CRROs identified by the
Group.
Page 64 in our
Corporate
Governance section
The Senior ESG Officer holds meetings with the Divisional Leads of
each business every two months to review operational progress in
relation to agreed ESG objectives, including any CRROs.
The Operating Boards of Facilisgroup and Brand Addition meet
monthly and each maintain its own risk registers, including any CRROs.
The risk registers are reconciled against the Group’s risk register twice
per year in advance of review by the Audit Committee.
STRATEGY
a) Describe the climate-related
risks and opportunities the
organisation has identified over
the short, medium, and long-term
The CRROs assessment has identified a number of physical and
transitional risks, however none of the risks are seen as significant or
likely to have a material financial impact on the business. Where risks
have been identified, proactive steps are already being taken as part
of our ESG strategy and continual improvement activities.
Page 42 in our
Non-Financial and
Sustainability
Information
statement section
b) Describe the impact of
climate-related risks and
opportunities on the
organisation’s businesses,
strategy and financial planning
Transitional risks are most likely to have the greatest impact to the
business related to changes in customers behaviour over the
long-term as we transition to a low carbon future, however this also
creates an opportunity as we are well positioned to support
customers to develop more sustainable products.
Through our ESG efforts and the steps we are taking to ‘Advance
Sustainability’ we see this as an opportunity to strengthen our
business. Our ESG strategy commits us to take positive action on
climate change. By having a robust strategy we strive to differentiate
our business from our competitors, supporting our customers in the
transition to a low carbon economy.
The impacts of any CRROs identified by the Group are described in
the risk management section of this Report and in the table identifying
all of the possible risks associated with each scenario, and how this
may impact the Group.
At present, none of the CRROs that we have identified or have
proactively taken action against have significantly impacted the
Group’s strategy or financial planning. The Group’s ESG strategy is
reviewed and approved annually by the Group Board and where
necessary changes can be made to the strategy to ensure that any
CRROs are pro-actively addressed.
The risks identified from our assessment remain low and any future
impacts seen are likely to occur under ‘scenario A’ (early and orderly
policy action – smooth transition) over the long-term (6-10 years).
Page 42 in our
Non-Financial and
Sustainability
Information
statement section
Page 57 in our Risk
section
The Pebble Group plc Annual Report 2023
43
Non‑Financial and Sustainability Information statement
TCFD disclosure table – continued
RECOMMENDATION
RESPONSE
c) Describe the resilience of the
organisation’s strategy, taking
into consideration different
climate-related scenarios,
including a 2°C or lower scenario
The Group developed three scenarios in line with publicly available
data and reports to assess the possible CRROs the Group may face in
relation to each scenario. Where risks were identified mitigating
actions have been implemented or are being implemented to ensure
that the impact remains as low as possible.
DISCLOSURE
LOCATION
Pages 41-42 in our
Non-Financial and
Sustainability
Information
statement section
Pages 52-53 in our
Risk section
Page 40 in our
Non-Financial and
Sustainability
Information
statement section
Page 52 in our Risk
section
The CRROs are regularly assessed (every six months, as a minimum)
against the climate-related scenarios which helps proactively
implement actions and build resilience against each scenario, ensuring
that any changes are reflected in the Group’s strategy and goals. The
climate-related risks identified do not pose a significant risk to the
business over the developed scenarios.
Climate-related risks are identified by a number of methods, these
range from publicly available data to help develop an understanding of
the climate-related risks the business may face, internal brainstorming
exercises, stakeholder engagement and discussion. Risks are also
raised through internal discussion, individual business risk registers,
the Group risk register or the Group Executive Committee.
Each risk identified is reviewed against three different climate-related
scenarios and timescales to assess the potential likelihood and impact
on the business to ensure that priority is given to the highest risk. The
assessment is led by the Senior ESG officer with support from the
Group Financial Controller and the Managing Directors of Facilisgroup
and Brand Addition.
Emerging and identified risks are continually monitored and managed
through the Group’s risk management framework, described in the risk
section of this Report. All risks are prioritised and assigned an owner who
is responsible for the management and implementation of any actions.
Risk reviews are undertaken biannually with each Group business and
any changes or updates are discussed and reflected in the Group risk
register. The Audit Committee formally reviews and approves the
Group risk register twice yearly.
Climate-related risks are considered at the same time as all other
business risks and scored in the same way allowing them to be fully
integrated into the overall risk management framework.
Page 57 in our Risk
section
• Absolute GHG emissions
• Progress towards 100% renewable electricity
• Carbon intensity
• Energy consumption
GHG emissions table covers GHG emission inventory of all relevant
Scope 1, Scope 2 and Scope 3 emissions
• 100% renewable electricity by 2025
• Net-zero in our direct operations by 2030 (Scope 1 and Scope 2
emissions)
• Prioritise the reduction of Scope 3 emissions
Pages 30-31
ESG section
Pages 30- 31
ESG section
Pages 27-29
ESG section
RISK MANAGEMENT
a) Describe the organisation’s
processes for identifying and
assessing climate-related risks
b) Describe the organisation’s
processes for managing
climate-related risks
c) Describe how processes for
identifying, assessing and
managing climate-related risks
are integrated into the
organisation’s overall risk
management framework
METRICS AND TARGETS
a) Disclose the metrics used by the
organisation to assess climate-
related risks and opportunities in
line with its strategy and risk
management process
b) Disclose Scope 1, Scope 2, and
if appropriate Scope 3
greenhouse gas (GHG) emissions,
and the related risks
c) Describe the targets used by
the organisation to manage
climate-related risks and
opportunities and performance
against targets
44
The Pebble Group plc Annual Report 2023
STRATEGIC REPORT Key performance indicators
Measuring our
performance.
Group
REVENUE
GROSS PROFIT
ADJUSTED EBITDA1
BASIC ADJUSTED
EARNINGS PER SHARE2
OPERATING CASH FLOW
CONVERSION
£124.2m
-7.3%
43.6%
+10.9%
£16.0m
-11.1%
4.60p
-20.4%
40.6%
62.4%
m
0
.
4
3
1
£
m
2
.
4
2
1
£
%
6
.
3
4
%
3
.
9
3
m
0
.
8
1
£
m
0
.
6
1
£
p
8
7
.
5
p
0
6
.
4
%
6
.
0
4
%
0
.
5
2
FY 22 FY 23
FY 22 FY 23
FY 22 FY 23
FY 22 FY 23
FY 22 FY 23
Why we measure it
Growth in gross profit
percentage indicates an
improvement in the
quality of our earnings.
Comment
The increase in gross
profit percentage
reflects both the
increased revenue
weighting of Facilisgroup,
our higher margin
business and an
improvement in Brand
Addition gross margins.
The latter is a
combination of client mix
and implemented pricing
initiatives at Brand
Addition that supported
the costs of additional
services delivered to our
clients.
Why we measure it
Year-on-year Adjusted
EBITDA trends provide an
indication of progress
against both short-term
plans and long-term
strategy. Management
believes this adjusted
measure is appropriate in
understanding the
underlying trading
performance of the
business.
Comment
EBITDA fell by £2m in
FY 23. The improved
gross profit margins
helped to mitigate, in
part, the reduction in
Group revenue.
Why we measure it
Monitoring year-on-year
revenue growth provides
an indication of progress
against both short-term
plans and long-term
strategy.
Comment
Whilst Facilisgroup grew
revenue in FY 23,
revenue at Brand
Addition reduced,
principally driven by
lower budgets of our
clients who operate in
the Consumer and
Technology sectors. This
resulted in an overall
£10m reduction in Group
revenue.
Importantly, behind this
sector specific effect on
revenue, client retention
at Brand Addition and
Partner retention at
Facilisgroup was
excellent.
Why we measure it
This metric measures the
Group’s profit to cash
ratio. It is monitored to
highlight the level of
investment in capital
expenditure and working
capital to support the
Group’s medium-term
growth plans.
Comment
The increase compared
to FY 22 is driven by
working capital as a result
of lower volumes at
Brand Addition, and
careful management of
working capital
investment.
Why we measure it
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.
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
Basic Adjusted earnings
per share were 4.60p
against 5.78p in 2022,
reflecting the lower level
of profitability and
increased amortisation
from investment made
into new products in
Facilisgroup.
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
The Pebble Group plc Annual Report 2023
45
20
15
10
5
0
1500
1200
900
600
300
0
STRATEGIC REPORT
Key performance indicators
Group companies
Facilisgroup
RECURRING REVENUES – HIGH VISIBILITY OF RECURRING REVENUES WITH A GROWING CUSTOMER BASE
REVENUES £’m
PARTNER NUMBERS #
PARTNER RETENTION RATE %
17
18
13
10
9
242
225
206
175
149
250
200
150
100
50
0
FY 19
FY 20
FY 21
FY 22
FY 23
FY 19
FY 20
FY 21
FY 22
FY 23
Why we measure it
Tracking Facilisgroup revenues
demonstrates the business’ ability to grow
and retain its income from its Partners and
Preferred Suppliers through the technology
and services it provides.
Comment
Revenues increased by 8% GBP (9% in
home currency of USD) in FY 23, driven by
an increase in subscription fees. The rate of
growth was lower than in the prior year
(FY 22: 31% GBP, 17% USD) due to lower
GMV growth which impacts that proportion
of our revenue which is received through
activity between our Partners and
Preferred Suppliers. Recurring revenues
comprise 95% of Facilisgroup revenues in
FY 23 (FY 22: 93%).
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
Partner numbers increased to 242. Further
investment has been made to continue the
business’ excellent Partner retention levels
and in the sales team to responsibility grow
this metric.
97+
97%
Why we measure it
Understanding attrition and the reasons for it
is key to our Partner growth strategy. We
focus on maximising retention of existing
Partners, in addition to growing new.
Comment
Retention of 97% is considered, by
management, as an excellent performance,
and is key to the success of Facilisgroup.
PARTNER ACTIVITY – HIGH QUALITY PARTNERS AND LONG-TERM RELATIONSHIPS
GROSS MERCHANDISE VALUE $’M
PREFERRED SUPPLIER PURCHASES $’M
ATTACH RATE %
1,150
1,017
821
1,397
1,419
500
400
300
460
471
360
200
261
257
100
0
1500
1200
900
600
300
0
1.45%
1.23%
1.52%
1.46%
1.56%
FY 19
FY 20
FY 21
FY 22
FY 23
FY 19
FY 20
FY 21
FY 22
FY 23
FY 19
FY 20
FY 21
FY 22
FY 23
Why we measure it
Tracking the value of sales processed
through our technology (GMV) 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 our
growth in total distributor sales versus the
market.
Why we measure it
Consolidating Partner spend through a
high-quality supply base that provides
excellent service, favourable pricing and
rebates for our Partners generates revenue
for Facilisgroup. The level of spend with our
Preferred Suppliers is tracked monthly to
demonstrate progress against this target.
Comment
The sales activity of our Partners resulted in
$1,419m GMV, an increase of $22m on
FY 22, driven by new Partners.
Comment
Spend through Preferred Suppliers increased
slightly by $11m in FY 23 to $471m, being a
slower rate of growth and a reflection of our
Partner GMV.
Why we measure it
The attach rate shows ARR as a percentage
of GMV. Driving purchases through the
preferred network, and the sale of additional
products and services will result in an
increase in the attach rate.
Comment
The attach rate has increased to 1.49% in
FY 23 from 1.36% in FY 22, driven by an
increase in management fee revenue from
FY 22 to FY 23 on a flat GMV.
46
The Pebble Group plc Annual Report 2023
STRATEGIC REPORT3
+
N
Group companies
Brand Addition
REVENUE ANALYSIS – WIN, GROW, RETAIN, REPEAT
REVENUE £’M
117
106
98
102
73
120
100
80
60
40
20
0
120
100
80
60
40
20
0
REVENUE BY EXISTING AND NEW
CLIENTS £’m
10
11
91
107
10
96
3
12
95
5
68
REVENUE BY CLIENT
CONCENTRATION %
14
34
52
14
27
59
12
17
71
10
15
23
62
16
25
59
100
80
60
40
20
0
FY 19
FY 20
FY 21
FY 22
FY 23
FY 19
FY 20
FY 21
FY 22
FY 23
FY 19
FY 20
FY 21
FY 22
FY 23
Existing clients
New clients (in year and 1st full year contribution)
Top 10 clients
11-20 clients
21+ clients
Why we measure it
Tracking revenue trends is key to
understanding how Brand Addition is
performing against its strategic goals.
Comment
The revenue reduction in FY 23 was principally
driven by the spend of several of our clients
which operate in the Technology and
Consumer sectors, whilst revenue from our
clients in the Engineering and Transport
sectors has been more robust. Client
retention has remained strong.
Why we measure it
Brand Addition has excellent levels of client
retention. Retaining and growing existing
clients, while successfully implementing new
business is fundamental to its growth strategy.
Comment
The reduction in revenue from existing
clients is the result of spend from our
Technology and Consumer clients. New
business includes £7.9m generated from
clients won in FY 22.
Why we measure it
Brand Addition tracks revenue by client
concentration as success of larger clients is
central to delivering on our strategy of Win,
Grow, Retain, Repeat. We also recognise
the importance of not being over reliant on
a small number of customers.
Comment
The top 10 clients contributed 59% of total
revenue in FY 23 (62% in FY 22), with no
one client contributing more than 12% of
revenue.
REVENUE DIVERSITY – STRONG SECTORS ACROSS MULTIPLE GEOGRAPHIES
REVENUE BY CLIENT SECTOR %
REVENUE BY DESTINATION %
8%
11%
4%
9%
10%
11%
FY 23
FY 22
25%
28% 25%
18%
17%
21%
19%
FY 23
FY 22
29%
24%
22%
19%
Engineering
Financial Services
Health, Beauty, FMCG
Technology
Transport
Other
24%
22%
40%
39%
UK
Europe
US
RoW
Why we measure it
Brand Addition works with clients across a wide range of sectors.
This level of diversity provides some protection against
economic factors which may impact specific sectors.
Why we measure it
Brand Addition has a global client base and is well diversified
across the world, providing some resilience to market
conditions that could affect specific geographies.
Comment
The changes reflect the reduced activity from our clients that
operate in the Technology and Consumer sectors and the more
robust performance from clients that operate in the Engineering
and Transport sectors, which has helped to soften this impact.
Comment
Revenue by destination shows a similar trend to FY 22 and
continues to be well diversified.
The Pebble Group plc Annual Report 2023
47
Chief Financial Officer’s review
A year of challenge
and progress.
Claire Thomson
Chief Financial Officer (CFO)
The challenging macroeconomic
backdrop to FY 23 impacting the
Technology and Consumer clients of
Brand Addition, overshadowed continued
strategic progress at Facilisgroup.
Overview
FY 23 was a year for the Group where progress in
Facilisgroup was overshadowed by a contraction in demand
in the Technology and Consumer client sectors of Brand
Addition. Group revenue of £124.2m (FY 22: £134.0m) was
7% below FY 22 and Adjusted EBITDA of £16.0m (FY 22:
£18.0m) was 11% below. Operating profit was £8.0m (FY 22:
£10.2m). The Group Board is pleased to announce the
continuation of the dividend policy implemented in FY 22
and is proposing a final dividend of 1.2 pence per share for
FY 23 (FY 22: 0.6 pence per share), payable in May 2024.
The Group’s balance sheet remains strong and its liquidity
position continues to be robust with cash balances of
£10.0m at 18 March 2024 and no amounts drawn down on
the Company’s £10m committed revolving credit facility.
£’m
Revenue
Gross profit
Gross profit margin
Adjusted EBITDA
Depreciation and amortisation
Share-based payment charge
Operating profit
Net finance costs
Profit before tax
Tax
Profit for the year
FY 23
124.2
54.2
43.6%
16.0
(7.5)
(0.5)
8.0
(0.6)
7.4
(1.6)
5.8
FY 22
134.0
52.7
39.3%
18.0
(6.5)
(1.3)
10.2
(0.5)
9.7
(2.1)
7.6
Weighted average number of
shares
Adjusted Basic EPS
Basic EPS
167,412,949 167,450,893
5.78p
4.60p
3.46p
4.55p
48
The Pebble Group plc Annual Report 2023
STRATEGIC REPORT Revenue
Group revenue for FY 23 was £124.2m (FY 22: £134.0m).
Facilisgroup revenue was £17.9m (FY 22: £16.6m). This
represents an increase of 8% in GBP and 9% in
Facilisgroup’s home currency of USD. ARR from Partner and
customer subscriptions for our technology accounted for
this increase, through a combination of additional fees from
existing and new Partners. Revenue in Brand Addition was
£106.3m (FY 22: £117.4m). The reduction in revenue was
concentrated in our Technology and Consumer clients
which combined were £16.9m behind FY 22, offset in part
by £3.6m of revenue growth delivered by new client
contracts won in FY 22 and FY 23 and the robust
performance of the more traditional sectors of Transport
and Engineering which grew by £2.2m.
Gross profit
Gross profit as a percentage of revenue increased during
the year by 4.3 p.p.t to 43.6%. Of the total increase,
2.9 p.p.t relates to the improvement in gross margins at
Brand Addition as the business raised prices to cover the
investment it has made to deliver increasingly complex
services to its clients. We expect this to be a permanent
change moving the businesses long-term gross margins to
circa 33%. The balance of improvement reflects the
increasing proportion of Facilisgroup as part of overall
Group sales. This improvement is expected to continue as
Facilisgroup scales.
Adjusted EBITDA
Adjusted EBITDA for FY 23 was £16.0m (FY 22: £18.0m). The
reduction was made up as follows:
• Facilisgroup; £0.1m reduction as incremental revenues
were invested in sales and marketing to continue to drive
sales growth. The business has excellent EBITDA returns of
circa 50% demonstrating its ability to retain strong margins
whilst growing revenue;
• Brand Addition; £2.0m reduction as the volume reductions
and investment in business services discussed above
translated to EBITDA; and
• Central costs; £0.1m reduction in costs in the year as
incremental advisors’ fees were offset by a reduction in
payroll costs as no bonuses were payable in respect of FY 23.
Depreciation and amortisation
The total charge in the year was £7.5m (FY 22: £6.5m), of
which £5.2m (FY 22: £4.2m) 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 primarily a result of
the Group’s stated decision to increase capital expenditure
in its proprietary technology at Facilisgroup.
Share based payments
The total charge for the year under IFRS 2 “Share-based
payments” was £0.5m (FY 22: £1.3m). This charge related to
the 2020, 2021, 2022 and 2023 awards made under the 2019
Long Term Incentive Plan and Save As You Earn scheme. The
reduction against FY 22 relates to the 2021 award for which
the performance period ended on 31 December 2023. As
Group trading in the year was below expectation, forecast
performance conditions for the EPS element of this award
were not met giving rise to a reduction in the charge
associated with this award.
Operating profit
Operating profit for the year was £8.0m (FY 22: £10.2m)
after the impact of the reduction in sales volumes and
investment in new technology products and services noted
above and charging incremental depreciation and
amortisation of £1.0m
Finance costs
Net costs of £0.6m in the year (FY 22: £0.5m) include
£0.4m interest costs on leases capitalised in accordance
with IFRS 16 (FY 22: £0.4m), £0.1m interest in relation to the
Group’s £10.0m committed RCF facility (FY 22: £0.1m) and
£0.1m costs of refinancing this facility.
Taxation
The total taxation charge was £1.6m (FY 22: £2.1m) giving
rise to an effective rate of tax of 21.6% (FY 22: 21.6%). The
effective rate of tax was lower than the UK standard rate of
taxation due to the proportion of profit earned by the
Group in overseas jurisdictions where the applicable rate of
corporation tax was lower than that in the UK. The Group is
subject to taxes in the UK, Ireland, Germany, Turkey, US,
Canada, China and Hong Kong.
Earnings per share
The earnings per share analysis in note 10 covers both
adjusted earnings per share (profit attributable to equity
shareholders 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 basic earnings per share (profit
attributable to equity holders divided by the weighted
average number of shares in issue during the year). Adjusted
earnings was £7.7m (FY 22: £9.7m), meaning adjusted basic
earnings per share was 4.60 pence per share (FY 22:
5.78 pence per share), a decrease of 1.18 pence per share.
Basic earnings per share was 3.46 pence per share (FY 22:
4.55 pence per share), a decrease of 1.09 pence per share.
Dividends
In FY 23, the Group Board began the implementation of a
progressive dividend policy where it announced its
intention in the medium-term to move towards its stated
position at IPO of making dividend payments of c.30% of
profit after tax. For FY 23, the Board is proposing the
payment of a final dividend of 1.2 pence per share
(FY 22: 0.6 pence per share), a distribution totalling £2.0m,
or 34% of profit after tax. This will be paid on 7 May 2024,
subject to shareholder approval, to those shareholders on
the register of members on 5 April 2024. The shares will
trade ex-dividend on 4 April 2024.
The Pebble Group plc Annual Report 2023
49
Chief Financial Officer’s review
Cash flow
The Group had a cash balance of £15.9m at 31 December
2023 (FY 22: £15.1m).
Cash flow for the year is set out below:
£’m
Adjusted EBITDA
Movement in working capital
Capital expenditure
Deferred consideration
Leases
Operating cash flow
Tax paid
Net finance cash flows
Dividend paid
EBT purchase of own shares
Exchange (loss)/gain
Net cash flow
FY 23
16.0
0.7
(8.6)
‑
(1.6)
6.5
(2.5)
(0.6)
(1.0)
(0.4)
(1.2)
0.8
FY 22
18.0
(3.4)
(7.4)
(1.0)
(1.7)
4.5
(1.7)
(0.5)
-
-
0.7
3.0
Operating cash flow
Operating cash flow before tax payments and net finance
costs increased by £2.0m in the year to £6.5m. This
increase is due to the unwinding of working capital as sales
volumes in Brand Addition reduced. This remains an
important metric for the Group and is monitored to ensure
underlying cash flow remains sufficiently strong to underpin
the short-term additional investment required to deliver
the Group’s ambitious plans for growth.
Balance sheet and shareholders’ funds
Net assets increased in the year by £2.9m, the balance
sheet is summarised below:
£’m
Non-current assets
Working capital
Cash
Lease liabilities
Other net liabilities
Net assets
FY 23
69.9
13.0
15.9
(7.6)
(2.7)
88.5
FY 22
69.8
13.7
15.1
(9.1)
(3.9)
85.6
Non‑current assets
Non-current assets are the most significant balance sheet
category and comprise the following:
£’m
Goodwill
Customer relationships
Software development costs
Property, plant & equipment
Deferred tax assets
Non‑current assets
FY 23
36.0
8.0
17.3
8.3
0.3
69.9
FY 22
36.1
9.0
14.9
9.5
0.3
69.8
50
The Pebble Group plc Annual Report 2023
Amounts classified as goodwill and customer relationships
relate to historic acquisitions made by the Group. Software
development costs, which include £5.7m (FY 22: £5.1m)
investment in the year into Facilisgroup technology
products, arise from ongoing investment into Group
proprietary software and, in particular, investment into the
Facilisgroup digital commerce platform to ensure that
existing technology remains market leading and
differentiated from our competitors, alongside the
development of new products that will support 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 we have previously indicated, FY 23 was
the intended peak point of our investment into the
Facilisgroup platform and moving forward, we expect the
level of investment to reduce. Property, Plant and
Equipment primarily comprises the costs of Right-of-Use
assets capitalised in accordance with IFRS 16 “Leases”.
Working capital
Working capital of £13.0m is £0.7m lower than FY 22. This
relates principally to the reduction in sales in Brand
Addition.
Lease liabilities
Lease liabilities of £7.6m (FY 22: £9.1m) relate to Group
properties capitalised in accordance with IFRS 16. The
reduction in the year reflects payments made under the
lease agreements.
Other net liabilities
Other net liabilities of £2.7m (FY 22: £3.9m) are net tax
liabilities of which £2.4m (FY 22: £2.9m) is deferred tax in
respect of the intangible assets of Facilisgroup. £1.5m of the
deferred tax liability (FY 22: £1.7m) relates to acquired
customer relationships. These liabilities will reverse over the
period that the assets are amortised.
Alternative Performance Measures (APMs)
Throughout the Annual Report and related statements, the
Group has used a number of APMs as key performance
indicators in addition to those reported under IFRS. These
are used to provide additional clarity to the Group’s
underlying 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
APMs 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. They have been
consistently applied in all years presented.
STRATEGIC REPORT The following are key non-GAAP measures identified by the
Group and used in the Business Review and Financial
Statements.
Adjusted EBITDA which means operating profit before
depreciation, amortisation, share-based payments charge
and exceptional items. Refer to note 11 for reconciliation.
Adjusted operating profit which means operating profit
before amortisation of acquired intangible assets,
share-based payments charge and exceptional items. Refer
to note 11 for reconciliation.
Adjusted operating profit less finance costs which means
adjusted operating profit before tax, amortisation of
acquired intangible assets, share-based payments charge
and exceptional items. Refer to note 11 for reconciliation.
Adjusted earnings which means profit attributable to equity
shareholders before amortisation of acquired intangible
assets, share-based payments charge and exceptional
items. Refer to note 11 for reconciliation.
Adjusted earnings per share which means Adjusted
earnings divided by a weighted average number of shares in
issue. Refer to note 10 for reconciliation.
Claire Thomson
Chief Financial Officer
18 March 2024
The Pebble Group plc Annual Report 2023
51
Risk management
Robust and responsible
risk management.
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 its responsibility for the review
and approval of the Group’s risk profile and risk register to
the Audit Committee.
The Audit Committee considers the nature and extent of
principal risks to the Group’s achievement of its strategic
objectives and any related opportunities. It ensures that all
principal risks have been properly identified and that
appropriate mitigating actions and controls are
implemented.
The Audit Committee also reviews the Group’s internal
controls. It considers reports from the Group’s management
on the effectiveness and integrity of the Group’s internal
control and risk management systems. The CFO and the
Group Financial Controller also update the Committee on
progress against the Group’s internal audit and risk plan.
Each year, the Committee considers whether there is a
need for a separate internal audit function and makes its
recommendation to the Group Board for approval.
When satisfied, the Audit Committee approves the Group’s
risk register and internal controls and recommends these to
the Group Board for approval twice per year.
Group Executive Committee and Operating Boards
Risk identification and monitoring is an iterative process
that facilitates early identification and escalation of risks.
The Group’s strong governance and communication
structures ensure effective risk management and mitigation.
The Group Executive Committee discusses ‘Risk
Management and Compliance’ as a standing agenda item at
each monthly meeting. Divisional Leads escalate any new
actual or potential risks so that such risks can be discussed
by the Committee and any required amendments to internal
controls can be considered. Risk and compliance-related
policies and procedures are also reviewed and discussed by
the Group Executive Committee before presentation to the
Audit Committee and/or Group Board for annual approval.
52
The Pebble Group plc Annual Report 2023
The Operating Boards of Facilisgroup and Brand Addition
meet monthly. Each business maintains its own risk register,
which is reviewed against the Group’s risk register twice a
year before review by the Audit Committee, as described
above. Each Operating Board discusses ‘Risk Management’
as a standing agenda item at each monthly meeting, where
the lead for each key function addresses the significant risks
relevant to their area, 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, facilitates effective decision-making
throughout 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
STRATEGIC REPORT Evolution of the risk management framework
We continue to review and evolve the Group’s risk
management framework to ensure it reflects best practice.
In 2023, the Group expanded its risk scoring criteria to take
into account the potential impact of a risk on EBITDA (in
addition to the revenue impact) and improve its assessment
of risk. In addition, our Group Head of Tax introduced a new
sub-register of granular tax risks faced by the Group so that
tax risks could be evaluated and monitored more closely.
Key risks
The Group Board has identified the risks listed below as
currently being the most significant and specific to the
Group’s businesses.
The following heatmap illustrates the Group’s rating of key
risks, relative to one another. We have indicated the primary
categorisation of each risk (financial, strategic or
operational), although the Group Board acknowledges that
some risks span multiple categories.
Risk Ownership
To ensure effective and accountable management of
individual risks, each risk identified on the Group’s risk
register is assigned to the CEO or CFO as the risk owner.
The owner is ultimately responsible for the ongoing
monitoring, review and mitigation of individual risks.
1
2
4
3
5
7
6
8
d
o
o
h
i
l
e
k
i
L
9
Breach of IT security or
cyber-attack
Global supply chain
disruptions
Macroeconomic
environment
Reliance on
IT systems
Interruption to
warehouse operations
Concentrated
client base
Attracting and retaining
key personnel
Technological change
Climate change
1
2
3
4
5
6
7
8
9
Strategic risk
Impact Severity
Operational risk
Financial risk
The Pebble Group plc Annual Report 2023
53
Risk management
Summary of key risks
Risk and potential impacts
Mitigating activities
1. Breach of IT security or cyber-attack
The incidence and sophistication of cybersecurity threats and
breaches continue to increase, affecting businesses across the
globe.
IT security breaches, computer malware and other cyber-
attacks could result in the loss or compromise of data and
significant disruption to operations. In turn, this could lead to a
loss of business for the Group, affecting the Group’s ability to
achieve its financial targets.
Furthermore, such incidents could give rise to a potential liability
through litigation and may damage the Group’s reputation with
clients, resulting in a loss of goodwill.
2. Global supply chain disruptions
The Group must be prepared for the potential impact of
disruption to global supply chains caused by factors outside
of the Group’s control, including geopolitical events, armed
conflicts, terrorism and pandemic outbreaks.
The number of global regions affected by actual or potential
geopolitical instability or conflict continues to increase,
including regions of Ukraine (due to its conflict with Russia),
the Middle East (including conflicts in Gaza and piracy in the
Red Sea) and East Asia (including tensions between Taiwan
and China).
Continuation or escalation of such incidents could cause
disruption to global supply chains, impacting their
availability, reliability and operational costs. This could result
in the loss or cancellation of sales, which could affect the
Group’s financial targets.
54
The Pebble Group plc Annual Report 2023
In 2023, the Group developed new IT security incident response plans and
Brand Addition obtained global ISO27001 (information security, cybersecurity
and privacy protection) certification. Facilisgroup is targeting SOC2
information security certification in 2024.
During 2023, the IT infrastructures of the Group and Brand Addition were
separated. The separation of the IT infrastructures of the Group, Brand
Addition and Facilisgroup reduces the likelihood of a cyber incident severely
impacting the Group and each of its businesses simultaneously.
All Group employees are provided with IT security training. The Group employs
personnel dedicated to IT security within its businesses. It monitors
cybersecurity trends and continuously identifies and implements new
processes, systems and technologies, including Artificial Intelligence
technologies, to mitigate the likelihood of a successful breach of its IT security.
Disaster recovery plans and crisis management procedures are in place to
enable any IT security incidents to be handled efficiently and appropriately to
ensure the business can recover with limited interruption.
Change to risk
No change
The Group has a proven ability to react swiftly in response to global supply chain
disruptions and manage its flexible cost base to remain profitable and cash-
generative. The experience and know-how gained in dealing with previous
periods of disruption (including those relating to Brexit and COVID-19) have put
the business in a stronger position to handle any future supply chain challenges.
The Group’s differentiated positions in the industry and established client and
Partner relationships position it well to endure a period of supply chain
disruption and return to growth quickly.
The Group maintains business interruption insurance.
The Group’s suppliers span several geographic regions and the Group can divert
supply across its infrastructure should an incident arise in a particular region.
The Group has a strong balance sheet, effective working capital disciplines, is
cash generative and has access to a £10m revolving credit facility.
Change to risk
Increased
STRATEGIC REPORT Risk and potential impacts
Mitigating activities
3. Macroeconomic environment
There remains a degree of macroeconomic uncertainty due
to several factors including ongoing armed conflicts and
geopolitical instability in various regions of the world.
Interest rates, raw material prices and energy costs remain
relatively high. Shipping costs have also increased globally
and remain uncertain given ongoing risk of piracy and
terrorism affecting shipping in the Red Sea region.
Whilst the risk of a general global economic downturn
remains relatively high, the Group believes that the risk it
faces continues to be sector-specific. As explained on
page 47 of this Report, the Group’s clients in the
Technology and Consumer sectors were particularly
impacted in FY 23.
An economic downturn could impact demand for the
Group’s products and services and Brand Addition’s gross
margins, thereby affecting the Group’s ability to meet its
financial targets.
4. Reliance on IT systems
The Group’s IT platforms and infrastructure are critical to
its effective operation.
A prolonged unavailability or disruption of IT systems could
impact the Group’s ability to deliver its goods and services,
thereby affecting its reputation and ability to meet its
financial targets.
The Group is profitable and cash generative and has consistently proven its ability
to be so despite demand fluctuations and periods of global supply chain
disruption.
In the event of an economic downturn, Facilisgroup’s subscription-based
technology platform insulates that 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. The
flexibility of the operating model below gross margin allows the business to protect
profits.
Both businesses are cash-generative, with the underlying client base in Brand
Addition resulting in a high-quality balance sheet.
Change to risk
Increased
The Group has an experienced and skilled IT team, supported by external
consultants where necessary. The IT teams constantly monitor the
availability and performance of core IT systems.
Robust disaster recovery and business continuity procedures are regularly
monitored and updated by the IT and Operations teams.
Change to risk
No change
5. Interruption to warehouse operations
The Group’s warehouses receive, store and dispatch large
volumes of products internationally.
Any significant interruption in the Group’s warehouse
operations (for example, due to fire or other catastrophic
events or workforce disputes) could reduce the Group’s
ability to receive and process orders and provide products
to its clients. This could result in the loss or cancellation of
sales and a loss of customer loyalty, which could affect the
Group’s financial targets.
The Group maintains business interruption and property insurance.
Its warehouse locations span several geographic regions, reducing the
likelihood of multiple warehouses being simultaneously affected by the
same event. The business can also divert supply across its infrastructure
should an incident arise in a single location.
The Group has business continuity and disaster recovery plans for each of
its warehouses, which are tested regularly.
Warehousing operations handle approximately 36% of Group revenues,
which diversifies the risk should there be an interruption to their
operation.
Facilisgroup does not have warehouse operations and therefore its
revenues are not impacted by this risk.
Change to risk
No change
The Pebble Group plc Annual Report 2023
55
Risk management
Risk and potential impacts
Mitigating activities
6. Concentrated client base
Brand Addition’s core strategy is to win, grow, and retain
multi-country outsourced contracts, as detailed in page 17 of
this Report.
Facilisgroup’s diversified customer base and 48% share of FY 23 Group
Adjusted EBITDA means that the impact of losing a key Brand Addition client
on Group Adjusted EBITDA would be much reduced.
However, Brand Addition has a relatively small number of key
clients and, in FY 23 generated 50% of Group revenue from it’s
top 10 clients.
In addition, the delivery of Brand Addition’s strategic objective of continued
growth through new client acquisition would dilute the impact of the loss of a
client on the overall Group Adjusted EBITDA.
A loss, or significant reduction, in activity from major clients
could affect the Group’s financial targets.
Change to risk
No change
7. Retaining and attracting key personnel
Attraction and retention of experienced and skilled
personnel remains critical to achieving the organic growth
plans on page 17 of this Report.
We continually develop and invest in our highly talented and dedicated people to
maintain an engaged workforce, as explained further in the Stakeholder
Engagement section of this Report on page 18.
Whilst inflationary pressures on wages remained in FY 23,
the Group experienced improved availability of skilled
labour compared with FY 21 and FY 22.
We offer competitive compensation packages that are reviewed regularly, and
we routinely survey our employees to monitor engagement levels and identify
opportunities for further improvement.
A failure to attract and retain high-quality personnel could
impact the Group’s ability to service our clients and grow
our businesses. This could also adversely impact the
workloads and morale of existing staff, leading to increased
resource turnover and reduced productivity and
engagement.
8. Technological change
As technology changes quickly, there is a risk that the
Group’s current competitors and/or new entrants to the
promotional products market may introduce new
technologies, products, or services which challenge the
functionality or capability of the Group’s offerings.
If the Group cannot promptly respond to technological
changes or encounters material delay in introducing new
products or services, it may be at a significant disadvantage
to its key competitors.
Attrition rates across sites and geographies are monitored monthly to enable
mitigating actions to be taken quickly if necessary.
Change to risk
No change
The Group strives to enhance its existing products and services continually.
The Group maintains strong business relationships with its clients and Partners,
obtaining feedback and continually enhancing its offerings to meet customer
needs and respond to technological changes.
The Group monitors the market for potential acquisition targets whilst continuing
to invest in its technology and IT capabilities. In FY 23, Brand Addition invested in a
leading warehouse management system, which aims to bring greater efficiencies
and reporting capabilities for its warehouse operations. The system is due to
go-live across UK and German warehouse sites in FY 24.
This could damage the Group’s reputation with clients and
Partners, resulting in a loss of goodwill and affect the
Group’s ability to meet its financial targets.
Change to risk
No change
56
The Pebble Group plc Annual Report 2023
STRATEGIC REPORT Risk and potential impacts
Mitigating activities
9. Climate change
Climate change presents several risks to the business, which
are further analysed on pages 40-44 of this Report.
Risks of extreme weather events (such as floods, droughts
and storms) could directly affect the Group’s infrastructure,
operations and supply chain.
The transition to a low-carbon economy and increased
compliance and tax regimes could increase costs for the
Group. In particular, the Group’s supply chain and suppliers
may be exposed to increased operational costs, product
costs and/or distribution costs arising from mitigation
efforts, increased regulatory compliance and carbon taxes.
Customer preferences and concerns will increase demand
for a wider range of low-carbon, sustainable products,
services and delivery options that may be difficult to
identify and source. A failure to proactively rise to this
challenge could negatively impact customer demand,
customer retention, and the Group’s ability to meet its
financial targets.
Although none of the identified risks have been assessed as likely to have a
direct material financial impact on our business, the Group accepts its duty
to meaningfully address the challenges of tackling climate change and
minimise our environmental impact.
Our actions and commitments are set out in the ESG section of this Report on
pages 26-44 and also in our ESG Report, which is on the Company’s website.
The risk of supply chain disruption is minimised through the Group’s diverse
supply chain, which allows it to adapt quickly. The Group also maintains
alternative supplier relationships for each key product category.
Any heightened risk of disruption in Brand Addition’s direct supply chain due to
natural disasters and/or political or social unrest, would be identified through its
supplier evaluation process. In such an instance, Brand Addition would select an
alternative supplier (with reduced risk exposure).
Change to risk
No change
The Strategic report (which includes an introduction to the promotional products industry, our purpose and vision, our investment case,
the business models of each of our businesses, the Chair’s report, the CEO’s review, our strategy in action, stakeholder engagement, the
Section 172(1) Statement, ESG overview, key performance indicators, the CFO's review and risk management) was approved by the Group
Board and signed on its behalf by:
Christopher Lee
CEO
18 March 2024
The Pebble Group plc Annual Report 2023
57
Chair’s introduction to governance
Enhancing our
good governance.
Our Values in action:
Enjoying the
journey
Enjoying the journey in a culture of
integrity, transparency and fairness,
where we are proud of our past
and excited by our future.
“We are proud to have achieved
The RACE Equality Code Quality
Mark as a demonstration of our
clear commitment to DEI.”
Welcome to the corporate governance
report for the year ended 31 December
2023.
As Chair of the Board, I am responsible for corporate
governance within the Group. The Board places a high
priority on effective governance and I work with our Group
General Counsel and Company Secretary to ensure that our
governance structure, policies and processes reflect best
practice and are embedded into our Group’s culture.
The Group Board believes that good corporate governance
creates shareholder value and builds engagement and trust
with our teams, customers and suppliers. It does this by
demonstrating our strong values and supporting sustainable
growth whilst minimising risk.
We look to enhance our sound corporate governance
grounding by focusing on embedding it into our culture and
continually monitoring the Group’s governance framework
and practices against any: (i) changes in our businesses over
time; (ii) changes in official standards; (iii) developments in
best practice guidance; and (iv) our stakeholders’
expectations. I therefore oversee a formal internal review of
the effective operation of the Group Board, its Committees
and their oversight of our businesses on an annual basis.
In addition, the Board engages experts where we believe
doing so will enhance our governance approach, for
example, our ongoing appointment of Executive
remuneration advisors and consultants on DEI.
Richard Law
Chair and Independent
Non-executive Director
Governance Highlights
• Appointment of new Non-executive Director
enhancing the Group Board skillset
• Being awarded The RACE Code Quality Mark
Accreditation, providing third party affirmation of
our DEI approach and strategy
• Brand Addition achieving global ISO27001
(information security, cybersecurity and privacy
protection) certification
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The Pebble Group plc Annual Report 2023
CORPORATE GOVERNANCE During 2023 the key governance related
developments were:
• Successful recruitment and induction of a new Non-
executive Director to address the identified need for
specific technical skills around ‘Digital technologies and
SaaS’ on the Group Board
• Establishing a Group level DEI Steering Committee
• The successful completion of the RACE Code Quality
Assessment to affirm our DEI approach
• The development of a new Group DEI strategy to create
structure and direction for our businesses
• Embedding our Framework on Conduct, Ethics and
Compliance in our businesses with training for all
employees designed to cascade the Board’s culture,
integrity and expectations across the entire business and
empower our employees
• Creation of a new corporate authorities structure and
documentation to be adopted by each Group subsidiary
• Introduction of a biannual policy audit led by Group to
ensure all policies adopted are being implemented and
embedded well within our businesses
• Development of new IT security incident response plans
across the Group and achieving ISO27001 accreditation in
Brand Addition globally, demonstrating its commitment to
maintaining robust information security policies and
practices
During 2023, time was also
dedicated to:
• Continued focus on succession
planning and talent identification and
development. Investment will
continue throughout 2024 with
activities and progress overseen by
the Board’s Nomination Committee
• Our Senior ESG Officer taking a pro-active approach to
staying updated on the changing ESG landscape through
events and training, with the aim of adapting our ESG
policies and reporting requirements to align with best
practice
• Direct Group Board engagement with our employees in
the form of two employee engagement events held in
Manchester and London. Directors spent time with our
teams and had the opportunity to develop a deeper
knowledge and understanding of the Group’s business and
those who work within it. I also make a point of chatting to
and engaging directly with our teams in offices around the
world whenever I visit
Our Group Board members have extensive knowledge, skills
and experience and remain professionally active in roles
other than at The Pebble Group. They are provided with a
regular ‘Boardroom Briefing’ covering a range of corporate
governance issues, such as: new laws and regulations, new
governance code requirements and consultations on issues
such as DEI and reporting.
On 22 June 2023 we strengthened our Group Board when
David Moss joined as an additional independent Non-
executive Director. David co-founded Blue Prism and has
significant technology experience from his time there as
Chief Software Architect. Given the gap in specific Group
Board ‘Digital technologies and SaaS’ technical skills
identified through the operation of our governance
monitoring activities in 2022, it is expected that David will
add value to the Group Board and help support in the
execution of Group strategy to the benefit of all
stakeholders. David is a member of the Remuneration and
Nomination Committees.
The Company has applied the Corporate Governance Code
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. For the next financial period, the
Company will apply and report against the Corporate
Governance Code 2023 as updated and published by the
QCA.
This section of the Annual Report outlines how we have
applied the principles of the QCA Code during the year.
Additional corporate governance information around our
Stakeholder Engagement activities and our Section 172(1)
statement can be found on pages 22-25.
Richard Law
Chair
18 March 2024
The Pebble Group plc Annual Report 2023
59
Our governance structure
The Group Board
Structure and composition
The Chair of the Group Board is separate to, and
independent of, the CEO and each has clearly defined
responsibilities. These, along with the terms of reference for
all of the Committees of the Group Board, can be found in
the Investors section of the Company’s website.
The Group Board attended two employee engagement
events in 2023, the first at Brand Addition Manchester in
May 2023 and the second at Brand Addition London in
September 2023. This was an opportunity for Executives
and Non-executive Directors to spend time with our teams
and develop a deeper knowledge and understanding of the
Group’s business, those who work within it and discuss
matters of interest or concern to them as employees.
With the addition of David Moss as a new independent
Non-executive Director in 2023, the Group Board now
comprises of six Directors:
GROUP BOARD COMPOSITION
3
1
2
Executive
Independent
Non-executive
Independent
Non-executive
Chair
In June 2023 the Group team, including the Executives,
hosted the Brand Addition senior team at the new Group
Head Office to ensure the strength of existing relationships
was maintained following re-location of the Group function
out of the Brand Addition premises.
Both the Chair and Senior Independent Director are
available to speak with shareholders to discuss governance
or any other topic related to the Group that is important to
them. You can send a meeting request to:
investors@thepebblegroup.com to arrange this.
Group Board engagement with our businesses
and employees
How the Group Board engaged with employees
The Group Board recognises the importance of employees
to the success of its businesses. Employee involvement in
the Group is encouraged, as common goals and awareness
of the Group’s strategy and performance play a major role
in delivering our medium to long-term strategic objectives.
Awards under the Group’s LTIP were made on 28 March
2023 in which 76 senior staff across the Group participated.
Our approach is to cast the net for LTIP participation widely
to involve all of our senior employees in the Group’s
performance.
To facilitate contact between the Group Board and our
businesses, during the year, employees regularly attended
Board meetings to present on key topics of interest and
engaged directly with the Group Board on their specialist
subject matter.
Our Chair Richard Law spent informal time amongst the
teams at Brand Addition Manchester on a number of
occasions during the year to ensure he has direct
engagement with our employees and an established
relationship with them. He also visited the team in St. Louis
in the US in March 2023, where he also spent time in a
social setting, again, to ensure a strong and open dialogue
with the team.
As part of his induction, David Moss our new independent
Non-executive Director spent time with the Facilisgroup
team and also had the opportunity to meet a top 5
Preferred Supplier to gain a first hand clear understanding
of that business and its strategic direction. He has since had
regular virtual meetings with technology team members,
offering the benefit of his experience, advise and expertise
to this specialist function.
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The Pebble Group plc Annual Report 2023
CORPORATE GOVERNANCE Our Executive Directors have regular direct contact with
the businesses and dialogue with our teams to ensure
ongoing and open engagement, and occasionally attend
Divisional Operating Board meetings. The Group Board
receives minutes of each Employee Forum and Health &
Safety meeting for noting to ensure that the Group Board is
aware of and engaged in matters of concern to employees.
This engagement activity helps to ensure that employees’
views can be taken into account when making board
decisions that are likely to affect their interests.
Providing information and a common awareness of
performance
With the aim of having open dialogue with employees,
seeking to provide a common awareness of the financial and
economic factors affecting performance of the Group and
systematically providing employees with information on
matters of concern to them, in addition to the Stakeholder
Engagement activity outlined on pages 18-21, the following
occurred during 2023:
Results Presentations: Full year and half year results
presentations were made to the senior teams across the
businesses with live Q&A. This offered the opportunity for
the operational management to hear from the CEO and
CFO about Group performance, share price and feedback
received from investors. This was also and an opportunity
for operational management to raise questions and engage
directly with the Group Executive on performance.
Frequency: Half yearly
Format:
Focus:
Hosted virtual meeting
How the operational performance of Divisional
businesses has translated into the Group’s
financial performance and the factors
affecting that performance.
‘Significant Change’ meetings: Significant Change meetings
were hosted by CEO and CFO to communicate important
Group wide information that should be delivered by
leadership and heard first by the team.
Frequency: As required
Format:
Focus:
Hosted virtual meeting
LTIP performance and market trading updates,
covering the financial and economic factors
affecting performance of the Group.
Group Executive Committee: The CEO and CFO presented
‘Planned market reporting dates and key messages’ and ‘Key
Group financials and other deliverables’ as standing agenda
items at each Committee meeting.
Frequency: 9 meetings held across the year
Format:
Focus:
Mix of virtual and in person meetings
Common understanding of market
touchpoints, our Group performance and
factors affecting those.
1:1 meetings: Between CEO and Divisional Leads.
Frequency: Weekly
Format:
Focus:
Mix of virtual and in person meetings
Group and Divisional performance and factors
influencing and senior management
recruitment
Cascading by Divisional Leads:
Brand Addition
Divisional Lead made biannual virtual ‘State of the Nation’
presentations to cascade key messages from Group, deliver
Divisional messages and engage with employees directly via
Q&A.
Each member of the senior leadership team held monthly
or quarterly in person and virtual meetings where they each
cascaded those key messages again to their own team
members for discussion.
Facilisgroup
Monthly ‘Company Meetings’ were hosted by Divisional Lead
and senior leadership team.
‘Headline News’ was used as a source for day-to-day
business and operational updates across all Company
departments.
‘Significant Change’ meetings occurred to communicate
important company wide information that should be
delivered from the leadership of the business and heard
first by the team.
Frequency: Mixed
Format:
Focus:
Mix of virtual and in person meetings
Divisional strategy, financial updates and
perspectives on factors influencing
performance; highlighting company
milestones, key achievements, anniversaries
and events, with an emphasis on building a
strong company culture.
The Pebble Group plc Annual Report 2023
61
Our governance structure
Fostering relationships with other stakeholders
The Group Board understands the importance of the need
to foster the business’ relationships with suppliers,
customers and investors. In addition to the Stakeholder
Engagement activity outlined on pages 18-21, the Executive
Directors engaged directly with customers and suppliers
during 2023 as follows:
Brand Addition
• CEO participated in key client price negotiations
• CEO and CFO participated in key client contract
negotiations
Facilisgroup
• CEO acting as Interim President of Facilisgroup has had
direct day-to-day leadership of the business from
October 2023 to date
• CEO had multiple direct contact with Partners (customers)
through site visits, face-to-face and virtual meetings, and
attendance at industry trade shows
• CEO had multiple direct contact with major Preferred
Suppliers through face-to-face and virtual meetings, and
attendance at industry trade shows
• CEO and CFO attendance at Facilisgroup Partner and
Supplier events participating in group discussions and
networking events, building direct access opportunities
Group Board decisions are also supported by independent
third-party advice and challenge, where relevant. For
example, from our Nominated Adviser, broker and Executive
remuneration consultants.
The Group Board’s gender balance remains good, however
it has reduced to four male and two female Directors
following the appointment of David Moss in June 2023. The
senior roles of our two female Group Board members, being
CFO and Senior Independent Director, are strengths from a
gender balance perspective.
In addition, the Group Board has an extensive range of skills,
experience and knowledge, now boosted by David Moss’
specific technology expertise, to support delivery of the
Group’s strategy for the benefit of shareholders over the
medium to long-term. Further details can be found in their
biographies on pages 80-81.
Group Board Agenda
Throughout the year, the Group Board covered a broad
range of topics to ensure that it reviewed and challenged
matters of importance to our stakeholders. In setting the
annual agenda, the Directors considered the required
number of meetings and the appropriate balance between
strategy setting, financial and operational execution and
governance. The following was felt to create an appropriate
balance:
2 x Executive Directors
Christopher Lee (CEO)
Claire Thomson (CFO)
4 x Independent Non-
executive Directors
Richard Law (Chair)
Yvonne Monaghan (Senior
Independent Director)
Stuart Warriner
David Moss
Standing agenda items at each meeting:
• Minutes and matters arising
• Minutes for noting, including from Group Executive
Committee and Brand Addition Employee Forum
• CEO business trading and operational update
• CEO corporate activities update, including on investor
relations activity
The Group Board believes that it has a good balance of
Non-executive and Executive Directors with a clear division
of responsibilities between those functions. Independence
and judgement is demonstrated in the boardroom and no
individual (or group of individuals) dominates decision-
making. There is sufficient time for debate in meetings and
independent challenge is offered as part of the decision-
making process.
• CFO financial performance update
• Unlocking and delivering shareholder value
• Health, safety and welfare report
Additional matters covered during the year:
• Preliminary Announcement, Annual Report and Interim
Report and related work, for example going concern and
final dividend approval
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The Pebble Group plc Annual Report 2023
CORPORATE GOVERNANCE • Two day Annual Strategy Setting event and Half-Year
strategy review
• Biannual risk register and related work, for example on
internal controls
• Annual General Meeting (AGM) matters, for example
reappointment of auditors and Directors for re-election
and approval of circular
• Annual approval of Group ESG strategy and policy with
progress updates provided, including on the RACE Code
• Annual approval of Group DEI strategy and policy with
progress updates provided
• Annual Modern Slavery Statement approval
• Annual review of risk and control processes around crisis
management and IT/cybersecurity
• Annual Board and Committee Effectiveness Review
• Annual approval of formal Succession Planning Process and
Board Appointment Process
• Budget approval
Operating Boards and Group Executive
Committee
Structure and composition
Each Group business has an established Operating Board
which meets monthly with its own standing agenda that
includes business updates from the heads of all key
functions and risk monitoring. Each Operating Board is led
by a Divisional Lead.
Each Divisional Lead together with other key members of
their Operating Boards formally report to the CEO on
trading and performance during Executive Monthly
Meetings, and also through the Divisional Lead’s
membership of the Group Executive Committee.
In 2023, the Group Executive Committee was 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, the
Group General Counsel and Company Secretary and the
Group Head of Tax. It meets frequently, has its own terms
of reference in place and a standing agenda to include:
• Group corporate authorities and Board delegation
• Minutes and matters arising
• Business updates from each Division
• Planned market reporting dates and key messages
• Key financials and other deliverables
• Risk management and compliance
• ESG updates
• Feedback from Group Board/Committee meetings and/or
Non-executive Directors
The Committee assists the Group in providing a common
awareness of the financial and economic factors affecting
Group performance. It also facilitates the flow of
information throughout the Group to ensure the alignment
of culture, business ethics and standards and consistent
good governance across divisions to deliver value for
shareholders as a whole over the medium to long-term.
approval
• Group policies approval
• Group insurance approval
• Matters reserved and Committee terms of reference
Attendance
Our Group General Counsel and Company Secretary
attends all meetings from a governance perspective and our
Group Financial Controller also attends from a finance
perspective, along with our Senior ESG Officer attending
biannually to present on ESG strategy and to provide ad hoc
updates to the Group Board.
To facilitate contact between the Group Board and the
business, employees of each business attended meetings
and/or presented to the Group Board during the year on
the following: technology and sustainability, IT security,
product sourcing, and customer satisfaction analysis.
Our Nominated Adviser presents to the Group Board
annually to provide a training update on directors’ duties,
AIM Rules and Market Abuse Regulation.
Our broker attended and presented an overview of market
sentiment and activity, provided feedback to the Group
Board on Company analysis and valuation and discuss
takeover defence planning.
The Pebble Group plc Annual Report 2023
63
Our governance structure
Our Governance Structure
Chair of Group Board
Group Board - The Pebble Group plc
Audit
Committee
Remuneration
Committee
Nomination
Committee
CEO
Facilisgroup
Executive Monthly
Meeting
Group Executive
Committee
Brand Addition
Executive Monthly
Meeting
Divisional Lead
Divisional Lead
Operating Board
Facilisgroup
Operating Board
Brand Addition
Environmental, Social, and Governance
Risk and Compliance
Diversity, Equity & Inclusion
The Operating Boards typically meet prior to the Group
Executive Committee meetings, which is before the Group
Board meetings. This enables the Executive Directors to
provide the most up to date information possible to the
Group Board.
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The Pebble Group plc Annual Report 2023
ESG governance
The Group Board sets and approves Group ESG strategy
and policy on an annual basis and reviews and approves
each ESG Report prior to publication, following consultation
with the Group Senior ESG Officer and Group General
Counsel and Company Secretary. The Group Board reviews
progress against ESG strategy every six months.
The Group Executive Committee includes an ESG update as
a standing agenda item at each meeting and ensures regular
communication and discussion of ESG strategy and progress
with the Divisional Leads and other members of the
Committee.
Each Operating Board, led by their Divisional Leads, is
responsible for the implementation of the ESG strategy.
Each business has flexibility to develop its own ESG focus,
policies and initiatives, defining their own objectives.
The Senior ESG Officer holds meetings with each business
at least every two months to discuss progress against
agreed non-financial objectives related to energy usage,
carbon emissions and roll-out, training and adherence to
policies.
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.
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. This is 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 auditors 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 pages 52-57.
The Audit Committee also provides channels of
communication between the external auditors and the
Non-executive Directors. It reviews the performance and
CORPORATE GOVERNANCE The Nomination Committee
The Nomination Committee chaired by Richard Law has
responsibility to identify and nominate for the approval of
the Board, candidates to fill Board vacancies as and when
they arise. In respect of new appointments, the Committee
will undertake a needs analysis considering the balance of
skills, experience, independence and knowledge on the
existing Board and prepare a detailed candidate profile and
role description. In 2023, the Nomination Committee
carried out its duties in relation to the appointment of
David Moss as a new independent Non-executive Director.
The Committee also reviews Board structure, size, diversity
and composition, makes recommendations on annual
reappointment of Directors, oversees succession planning
and talent identification and development, and oversees
Group DEI strategy and policy. The Committee retains
external consultants in support of its responsibilities. The
Nomination Committee reports to the Group Board on all
these matters and typically meets three times in each
financial year. Yvonne Monaghan, Stuart Warriner and
David Moss are the other members of the Nomination
Committee.
Further information can be found in the Nomination
Committee report on pages 66-68.
independence of the external auditors and makes
recommendations to the Group Board in relation to auditor
appointment for the following financial year. The Audit
Committee reports to the Group Board on all these matters
and typically meets three times in each financial year.
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 82-85.
The Remuneration Committee
The Remuneration Committee, chaired by Stuart Warriner,
has primary responsibility to determine the total individual
remuneration packages of the Executive Directors 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 monitors
the level and structure of senior executive’s remuneration.
The Remuneration Committee retains, as necessary,
external remuneration consultants in support of its
responsibilities. The Remuneration Committee reports to
the Group Board on all these matters and typically meets
four to five times in each financial year. In exercising this
role, the members of the Remuneration Committee have
regard to QCA Code 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, Yvonne Monaghan and David Moss are the
other members of the Remuneration Committee.
Further information can be found in the Remuneration
report on pages 86-95.
The Pebble Group plc Annual Report 2023
65
Nomination Committee report
Leading the process to
appoint our new
Non-executive Director.
Richard Law
Nomination Committee Chair
Independent Non-executive Director
“I am delighted to welcome our new
Non-executive Director, David Moss
who brings a wealth of relevant
technology experience and expertise
to strengthen our Group Board.”
Dear Shareholder,
I am pleased to present the Nomination Committee report
for the year ended 31 December 2023.
Composition and experience of the Nomination
Committee
I am Chair of the Committee which is made up of our four
independent Non-executive Directors (Stuart Warriner,
Yvonne Monaghan, David Moss and myself) and is supported
by Lucy Penfold as Company Secretary.
The Committee typically meets three times per year and
the meetings are attended by the CEO and CFO. In 2023,
there were four meetings and each had full Committee
attendance.
Responsibilities of the Nomination Committee
Throughout the year, the Committee continued to fulfil its
duties on behalf of the Group Board. It has an established,
structured agenda and 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:
• regular review of the structure, size and composition
required of the Group Board;
66
The Pebble Group plc Annual Report 2023
• evaluating the diversity, balance of skills, knowledge,
experience and independence on the Group Board;
• leading the process for Group Board appointments,
identifying, and nominating for the approval of the Group
Board, candidates to fill Group Board vacancies as and
when they arise;
• leading on, and being responsible for, the Group’s DEI
policy, objectives and strategies;
• oversight of succession planning for the Group Board and
senior executives; and
• reviewing annually the time required from Non-executive
Directors.
The Nomination Committee reports to the Group Board on
all these matters.
Evaluation of the effectiveness of the Nomination
Committee
To ensure that it is operating at maximum effectiveness, the
Committee introduced forward looking KPIs during Q1 2023
and in Q4 2023 reviewed progress against those, together
with output from the annual Board and Committee
Effectiveness Review detailed on page 76, to evaluate its
own performance and constitution. It concluded that the
Committee performed well and effectively over 2023 with
no action or changes required to be recommended to the
Group Board.
CORPORATE GOVERNANCE annual Board and Committee Effectiveness Review during
Q4 2023 (please see page 76) and explored ways in which
this area could be strengthened to ensure that the Group
was more diversified and stable from a succession planning
perspective
• On internal talent identification and development, the
Committee received reports from HR leads in Brand
Addition and Facilisgroup on how focus had improved
during 2023 and on plans for future development in 2024.
It concluded that good work and focus was underway, and
momentum must be maintained with regular updates to
the Committee to evaluate progress against proposals
tabled
• These matters will remain key areas of focus for the
Committee during 2024
In addition, the Committee handled the following
standard matters well:
(i) Board Appointment Process
• The Committee used the Board Appointment Process for
the first time
• In Q4 2023 the Committee conducted its annual review of
the process and approved minor amendments to reflect
what was learned through the experience of practical
application
• The Committee satisfied itself that the process was
rigorous and transparent and aimed to work hand-in-hand
with the Group’s DEI policy
2023 Nomination Committee Activity
The Committee had a particular focus on the following
three areas:
(i) Successful Non-executive Director recruitment
• Addressing the need identified in 2022 for specific
technical skills around ‘Digital technologies and SaaS’ at
Board level
• Full consideration of the required role following
completion of a Needs Analysis and preparation of formal
Role Profile
• Initiation of search led by the Committee Chair with close
involvement from CEO and support by Company Secretary
• Appointment of professional recruitment consultant with
specialist expertise in the Technology sector to run the
search on behalf of the Company. (There is no connection
between the Group and the external recruitment
consultant used)
• Following the Group’s Board Appointment Process,
including the consideration of merit against objective
criteria (an assessment of candidate’s background, skills
and experience against the agreed Profile) and use of
scoring on a competency matrix which also highlighted DEI
attributes and had due regard to the Group’s DEI
commitments and the benefits of diversity on the Board
• Nomination of David Moss as the preferred candidate to
the Group Board
(ii) Advancement of DEI approach and strategy
• At the end of 2022 continuing to promote and achieve
ethnic diversity in the Group was identified as a priority
area and there was continued focus on DEI during 2023.
The Committee stressed that it was key that all DEI activity
be authentic, embraced and meaningful
• The RACE Equality Code process and results were
reviewed by the Committee and the achievement of The
RACE Equality Code Quality Mark in October 2023 was
celebrated as a demonstration of our clear commitment
to DEI. Please see page 34 for further details
• The Chair met with the DEI Sponsor for each business and
the Committee reviewed and discussed positive DEI
progress and activity during the year
• Re-approval of Group DEI Policy and development and
approval of a new DEI Strategy document to reflect the
output of the RACE Equality Code assessment and bring
greater structure and clarity
• Review future priorities, objectives and plans for
development further in 2024 and beyond
(iii) Succession planning and internal talent
identification and development
• Following previous identification as an area for emphasis in
2023, the Committee reviewed updated succession plans
for the Group Board and each Division Senior Leadership
and re-approved the formal Group Succession Planning
Process. It noted that this was a lower scoring area in the
The Pebble Group plc Annual Report 2023
67
Nomination Committee report
• On assessment criteria – evaluation of sufficient linkage
with the Group’s needs and objectives and coverage of
stakeholder interests, concluding that the current
assessment evaluation topics and criteria reflected the
right priorities and areas of stakeholder interest
The Committee initiated the review to commence in Q4
2023. Please see page 76 for further details.
(iv) Annual review of Membership of all Committees
and Terms of Reference
• Annual review of Group Board and Committee
membership and time requirements of Non-executive
Directors. No action was recommended to the Board
• Annual review and re-approval of the Committee’s Terms
of Reference. These are available on the Company’s
website
(v) All Directors to stand for re-election at 2024
AGM
During Q1 2024 the Nomination Committee considered the
continued independence, skills and performance of each
Director. To include a review of conflicts of interest and
availability, and overall ability to continue to contribute to
the long-term success of the Company. The Committee
recommended to the Group Board that David Moss should
stand for election and all other Directors should seek
re-election by the Group’s shareholders at the 2024 AGM.
Richard Law
Chair of the Nomination Committee
18 March 2024
(ii) Review of Board Structure, Size, Diversity and
Composition and Non-executive Director Skills
Matrix
• Evolution of the Non-executive Director Skills Matrix to
show improved skills coverage following appointment of
David Moss to the Group Board
• Conclusion that the Group Board was of a suitable size
given stage of development
• The Committee concluded that the current skills and
experience were optimum to support delivery of the
Group’s strategy, considering the future strategic
requirements and anticipated developments. No current
or perceived future skills gaps were identified
• A good Executive to Non-executive Director balance of
responsibilities was noted and it was agreed that no
individual or small group dominated decision-making and
independent challenge was also offered
• The Group Board was noted to have less female
representation since the recruitment of David Moss, but the
Committee were of the view that the balance remained
acceptable given investor expectations and concluded that
there remained strong female representation given the
senior roles that the two female members hold
• The Committee acknowledged that ethnic diversity of the
Board could be increased, however there was no
imminent opportunity to address that. Nevertheless, the
Group’s DEI focus and activities were designed to address
that point over the longer term
• The Committee concluded that there was no action
needed and no recommendations were made to the Board
(iii) Board and Committee Effectiveness Review
• Assessment of how the formal review could be developed
or improved
• On process, the Committee approved the introduction of
the use of a digital platform for the first time, to facilitate
the process and present results in a more sophisticated
format, but otherwise concluded that the process
remained appropriate and effective given the size, nature
and complexity of the Board
68
The Pebble Group plc Annual Report 2023
CORPORATE GOVERNANCE Key governance policies
Our Values in action:
Enjoying the
journey
Enjoying the journey in a culture of
integrity, transparency and fairness,
where we are proud of our past
and excited by our future.
Establishing key governance policies that reflect our tone of voice and are focused on the
Group Board’s areas of priority.
The Group has developed key governance policies to
establish a common understanding of the high standards of
conduct, ethics and responsible business practices
expected across our businesses and in our wider
stakeholder relationships. They serve to cascade the right
culture down from the Group Board and set the tone for
expected behaviour. Our culture and values aim to protect
the Group from unnecessary risk, to enable delivery of
long-term growth and to secure our long-term future.
Adherence to policies by our employees and suppliers is
tracked through:
• the opportunity at each Group Executive Committee for
Divisional Leads to raise policy breaches as part of a
standing risk agenda item at each meeting;
• biannual attestation of compliance with key policies by the
Group’s senior leaders in relation to their respective
teams and reported to the Group Audit Committee;
In developing our policies, we consider:
• monitoring of any whistleblowing reports received;
• our legal and regulatory obligations;
• our QCA Code governance obligations;
• new and upcoming changes and standards;
• best practice guidance; and
• our own tone of voice.
We strive to make policies relatable to our employees and
relevant to our Group operations so that they underpin
and guide the objectives and strategy of each business.
The aim is for everyone to feel proud of the Group, its
purpose and vision.
Our policies are reviewed on at least an annual basis, to
ensure that they reflect current working practices, remain
relevant and are aligned with best practice. They are
re-approved by the Group Board each year.
Implementation and embedding of our key policies is
addressed through a mixture of:
• inclusion in new starter induction process;
• ad hoc communication and reminder processes; and
• ad hoc training.
• robust vendor audits of suppliers;
• supplier visits; and
• a biannual internal policy audit by the Group team, which
was introduced during 2023.
To formalise the embedding and implementation of our
Group policies, in Q1 2024 the Group team developed a
Group Training Plan to confirm training requirements on
Group policies and to introduce a system of regular
confirmation from employees of their awareness and
acceptance of Group policies.
The Group policies in our governance framework can be
found in the ESG section of the Company’s website, which
includes copies of the following:
a) Group Framework on Conduct, Ethics and
Compliance – an umbrella document to provide an
overview of all Group conduct, ethics and compliance
priorities, to empower our employees and provide them
with links to all Group policies in one place.
During 2023, all employees across the Group have been
made aware of this Framework and it was embedded within
our businesses through a Group-led training module
delivered to all employees through each of our businesses’
training platforms, to include a short assessment. It also
forms part of our new starter induction process within each
business to ensure that all new employees are informed of
and aware of Group expectations. This is part of the Group
Board setting the tone from the top.
The Pebble Group plc Annual Report 2023
69
Key governance policies
b) Anti-bribery and corruption policy – including gifts
and hospitality rules and outlining a zero-tolerance
approach. This reflects the Group’s commitment to acting
honestly, professionally and with integrity in all business
dealings and relationships.
During Q1 2024, a new Group-led training module was
designed and delivered to all employees through each of
our businesses’ training platforms.
c) Anti-slavery and human trafficking policy –
outlining a zero-tolerance approach and clarifying 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 businesses or
supply chains.
During 2023, a new Group-led training module was designed
and delivered to all employees through each of our
businesses’ training platforms to raise understanding and
awareness around modern slavery.
d) Whistleblowing policy – to support and encourage
employees and stakeholders to raise 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.
e) Group wide dealing policy and share dealing
code - 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.
These support compliance with the applicable regulatory
framework on market abuse.
f) DEI policy – promoting integrity and openness and
highlighting diversity as an important part of our long-term
focus on shareholder value.
g) Group environmental and climate change
policy – reflecting our obligation to be part of the climate
crisis solution and the importance of reducing greenhouse
gas (GHG) emissions.
h) Group health, safety and well-being policy – aiming
to create an inclusive culture for our employees which
focusses on prevention, and in the case of any issues, ensure
that they are minimised and managed before they have a
detrimental impact on our employees’ well-being.
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The Pebble Group plc Annual Report 2023
CORPORATE GOVERNANCE i) Group labour standards and human rights
policy – outlining our corporate responsibility to ensure
that our activities do not directly or indirectly violate labour
standards and human rights.
j) Group data protection policy – recognising that the
correct and lawful treatment of personal data will maintain
confidence in the Group and its businesses and will provide
for successful operations.
k) Group anti-facilitation of tax evasion policy –
setting out the Group’s responsibilities, and those working for
us, in observing and upholding our position on preventing the
criminal facilitation of tax evasion.
Responsibilities
Each policy notes which Director has primary responsibility
for establishing and maintaining proportionate and effective
policies and processes for that area. It also states that,
ultimately, the Group Board has overall responsibility for
ensuring that the policy complies with legal and ethical
obligations, and that the policy is complied with.
The Group Executive Committee is responsible for
reviewing policies prior to passing up to Group Committee
level (as appropriate), then to Group Board, for approval.
The Group Executive Committee also communicates all
finalised policies to the senior executives in each business
to ensure consistent messaging, and the Divisional Leads are
responsible for implementing the policies, as appropriate
for their business.
We will continue to evolve and adapt our policies and
procedures to address any changes across the Group as we
continue to grow and ensure alignment of key business
practices across our two businesses.
Overseeing compliance priorities
• GC and Co Sec
• CEO/CFO
Group Board
• Senior ESG Officer and Data Protection Officer
Audit
Committee
Nomination
Committee
Group Executive Committee
Brand Addition
Divisional Lead
Fascilisgroup
Divisional Lead
Group Values
Framework on Conduct, Ethics and
Compliance
Group Policies
Whistleblowing
Our Priorities
The Pebble Group plc Annual Report 2023
71
Corporate governance statement
Best practice corporate
governance.
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 outlines how we have applied the ten principles of the QCA Code
during the year.
Commentary
Principle 1:
Establish a strategy and
business model which
promotes long-term value
for shareholders.
The Group Board has a shared view of the Group’s vision and
the vision, strategy and business models of our businesses.
These are designed to deliver medium to long-term growth
for the Group.
Strategy is re-visited annually with six-monthly check-ins
against plan. In 2023, the Group Board held its annual
strategy event over two days in November with all Directors
in attendance. The output focused on:
• vision and scoring of our businesses
• scaling our businesses
• technology product roadmap
• leadership, our people and team structures
The Chair and CEO work closely to ensure the strategic
message and direction is strong and understood. In 2023, the
Board discussed resource to drive strategy alignment across
the Group and ensure strategy is clear, memorable and
tangible for all employees.
All strategic initiatives are underpinned by the Group’s values
and expected high standards of conduct, ethics and
compliance. Examples of this and how it is cascaded through
our businesses is described throughout this Report.
The Executive Directors have primary responsibility for liaison
with the Company’s shareholder base and during 2023 they
maintained the active and frequent dialogue the Company has
established.
Regular updates on shareholder meetings, together with all
reports and feedback issued by analysts are provided to the
entire Group Board to support their understanding of the view
of the Group by the investment community.
The Group Executive Committee discusses shareholder needs
and expectations in the context of upcoming market
announcements and other touchpoints at every meeting and
reviews investor feedback received following each of those
touchpoints.
The 2024 AGM will again 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. Should you wish to
request a meeting or submit a question, please contact
investors@thepebblegroup.com.
Principle 2:
Seek to understand and
meet shareholder needs
and expectations.
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The Pebble Group plc Annual Report 2023
Cross-reference
to detail
The following
sections of this
Report set out how the
Group intends to deliver
shareholder value in the
medium to long-term:
• Group strategy is on
page 17
• Group vision and the
vision of each business
is on page 4
• Our business models
are on pages 8-11
• The Chair’s report on
page 12
• The CEO’s review on
page 14
• Our strategy in action
on page 17
How the Group
seeks to engage
with shareholders and
the output of that
engagement in 2023 is
detailed in the
Stakeholder engagement
section of this Report on
pages 18-21.
Investor
presentations can
be found on the
Company’s website.
CORPORATE GOVERNANCE 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 invests in, and works consistently to develop and
strengthen, the relationships it has with all of its
stakeholders, to understand their needs and requirements.
Systems are in place to solicit, consider and act on the
feedback from all of our stakeholder groups.
The Group Board and its Committees have regard to relevant
stakeholder interests in all key decision-making. Our Board
report template prompts authors to outline the
consequences of each proposal on the long-term success of
the Company including (where relevant) the impact on the
Company’s wider social responsibilities.
Principle 4:
Embed effective risk
management, considering
both opportunities and
threats, throughout the
organisation.
The Group Board takes 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 each
of the Audit Committee, Group Executive Committee, and
Operating Boards. There is an effective process for identifying,
assessing and managing risks in this framework and risk
registers are held and reviewed on a biannual basis at both
Divisional and Group level. The Audit Committee provides the
assurance that the risk management and related control
systems in place are effective.
Our values are on
page 1.
Information on
how our business
model identifies key
resources and
relationships is
contained on pages 8-11.
How the Group
obtains stakeholder
feedback and the output
of that is in the
Stakeholder engagement
section of this Report 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 52-57.
The Audit
Committee report
on pages 82-85 explains
how it oversees the
effectiveness and
integrity of the internal
control systems.
The Pebble Group plc Annual Report 2023
73
Corporate governance statement
Principle 5:
Maintain the Board as a well-functioning, balanced team led
by the Chair.
• role of Chair and Role of Senior
Independent Director;
• independence and balance on
the Board; and
• Board members attendance
and active contribution at
meetings.
The Group Board successfully
appointed a new Non-executive
Director during 2023 and
remains a well-functioning team
led by the Chair with strong
independent representation.
There is a good balance
between the Executive and the
Non-executive Directors.
Executive Directors dedicate a
full-time commitment to the
Company. Non-executive
Directors provided a strong time
commitment in 2023, 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, each of which had
very strong attendance.
The Chair and Company
Secretary keep Group Board
processes under review,
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 2023 annual Board and
Committee Effectiveness
Review highlighted the following
as particular areas of strength,
which the Board concluded
were an indication that the
Directors were operating very
effectively and performing to a
high standard as a unit, in
Committees, and also
individually as Directors:
• time commitment of
Non-executive Directors;
Group Board
structure and
composition details are
on pages 80-81.
Detailed
information on
Group Board and
Committee meeting
frequency can be found
in the Board of Directors
section on pages 60-65.
For more detail
on Board Agenda
please see page 62.
For full details of
the annual Board
and Committee
Effectiveness Review
2023 results, see
Principle 7 below.
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The Pebble Group plc Annual Report 2023
CORPORATE GOVERNANCE The identity of
each Director and
their relevant skills and
experience are detailed
on pages 80-81 and also
on the Company’s
website.
Information on
how the
Nomination Committee
actively reviewed Group
Board structure, size
and composition in
2023, is on page 68.
For full details of
the results of the
2023 annual Board and
Committee Effectiveness
Review, see Principle 7
below.
For full details of
the Director
performance
evaluation conducted
by the Nomination
Committee in Q1 2024
see page 75.
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.
Principle 6:
Ensure that between them the Directors have the necessary up-to-
date experience, skills and capabilities.
The Company’s external auditors
provide regulatory updates and
briefings to the Group Board
twice per year on relevant
corporate reporting
developments or similar ‘hot
topics’ for the year under
review.
The Company’s Nominated
Adviser and the Company’s
broker each provide annual
Group Board training and a
briefing pack, covering between
them the AIM Rules, Market
Abuse Regulation, managing
price sensitive information,
Takeover Code and other topical
regulatory updates.
The Directors are given the
opportunity to attend other
updates and/or training sessions
to ensure continued
development of knowledge, skill
and capability.
The Group Board and
Committees use professional
advisors at the Company’s
expense when considered
necessary.
Our Directors are
professionally active and each
has demonstrated that they
possess the appropriate skills,
capabilities and experience for
the roles they perform, including
as members of the Group Board
and its Committees.
Group Board experience is
extensive and varied, and their
mix of personal qualities and
gender balance contributes to
the Group Board’s ability as a
whole to deliver the Company’s
strategic objectives.
The skills and experience of the
Group Board are reviewed
annually through use of a
forward-looking skills matrix to
ensure that it is sufficiently
resourced to discharge its
governance obligations on behalf
of all stakeholders. After the
2022 review highlighted the
need for specific technical skills,
David Moss was successfully
appointed as a new
Non-executive Director in
June 2023. The Nomination
Committee has concluded that
the current skills and experience
are optimum to support delivery
of the Group’s strategy,
considering the future strategic
requirements and anticipated
developments.
The 2023 annual Board and
Committee Effectiveness
Review highlighted the mix of
skills, experience and knowledge
of the Board as an area of
improvement. It also noted
knowledge and experience of
capital market rules and
understanding of obligations of a
quoted company as a particular
strength. Further, all Directors
were re-elected at the 2023
AGM and 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 2024
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: new laws and regulations,
new governance code
requirements and consultations
on issues such as DEI and
reporting.
The Pebble Group plc Annual Report 2023
75
Corporate governance statement
Principle 7:
Evaluate Board performance based on clear and relevant objectives,
seeking continuous improvement.
Details of the
Nomination
Committee update to its
Group Board effectiveness
review criteria in 2023 (to
ensure it remained fit-for
purpose) is on pages 66-67.
Progress against previous
recommendations
The Group Board has addressed
the areas for development
identified in the 2022
performance review as outlined
in the Company’s 2022 Annual
Report. In particular:
• On Board mix of skills,
experience and knowledge; the
previously low score became a
strength in the 2023 review
due to the reaction of the
Board and successful
appointment of David Moss as
a new Non-executive Director
with the required skillset and
experience
• On Board diversity; in response
to the need for development
of a more specific action plan
with measurable targets for
achieving increased diversity,
the Group successfully worked
with an external consultant and
completed an in-depth
exercise which led to the
achievement of the RACE
Equality Code Quality Mark
accreditation. This has
provided external validation of
the Group’s DEI policy and
approach, and has also
brought improved clarity to DEI
strategy and structure to all
DEI activities across the Group.
The Nomination Committee
reviews the Group Board
effectiveness process annually
to enhance and improve the
exercise. The above process was
followed in 2023, which was
considered to be fit-for-
purpose given the size, nature
and complexity of the Group
Board and its Committees,
current stability of composition
and governance maturity.
Results and
recommendations of the
2023 Review
Particular strengths highlighted
(not already mentioned in
principles above):
• Constitution and performance
of Board Committees
• Board appointment and
induction processes
• The Board’s demonstration of
stewardship through ensuring
that the standard of external
reporting is high
• Remuneration and
performance – ensuring
appropriate consistency and
linkage between the strategy,
risks and performance of the
Group, and the remuneration
offered to the Directors
Recommendations:
• On DEI; to ensure continued
focus through Nomination
Committee activities and RACE
Code developments
• On succession planning; action
agreed via Nomination
Committee activity to improve
and further develop succession
planning across the Group
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
The process is conducted
internally by the Group Board on
a non-anonymous basis, which
reflects its open culture and
nature. In 2023, the use of a
digital platform was introduced
to improve the process and
present results in a more
sophisticated format. This also
improves year-on-year
comparison:
• 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
• All Directors complete a
questionnaire using the digital
platform
• The questionnaire covers
‘Composition and Process’ and
‘Behaviours and Activities’
• A digital report on the results
and a year-on-year
comparison, together with a
written analysis is tabled for full
Board discussion
• Directors’ evaluation of the
results is facilitated by the
Company Secretary during a
board meeting with full
attendance
• Actions are included and
followed-up as part of
standard Group Board and
Committee process
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The Pebble Group plc Annual Report 2023
CORPORATE GOVERNANCE Principle 8:
Promote a corporate culture that is based on ethical values
and behaviours.
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 Divisional Lead
in each business is responsible
for ensuring the implementation
and communication of policies
and ensuring that any Group
policies are reflected in their
respective Division’s equivalent
local policies.
Any non-compliance with
policies is reported by the
Divisional Leads via the Group
Executive Committee to the
relevant Group Board
Committee and, ultimately, to
the Group Board for monitoring
on an ongoing basis.
Annual employee performance
evaluations within Brand
Addition assess alignment with,
and embodiment of, its core
values, including ‘Do the right
thing’. Within Facilisgroup, 50%
of employees’ bonuses are
earned based on individual
performance which is aligned
with embodiment of core values.
Employees that are not aligned
with core values can be assigned
a specific Performance
Improvement Plan and will not
be paid a bonus.
During 2023, the Group has
developed and enhanced
employee awareness and
engagement with Group Policies
and culture, including through
Group-led training for all staff on
our framework on conduct,
ethics and compliance, our
anti-slavery and human
trafficking policy. During Q1
2024, this Group-led training
extended to our anti-bribery
and corruption policy.
For details of our
values please see
page 1.
For information
on how the
Company’s culture is
consistent with its
objectives, strategy
and business model,
please see page 56
under Operating
Boards and Group
Executive Committee.
Our assessment
of our principal
risks and uncertainties
reflects our ethical
culture and balanced
risk appetite. For
details, please see
pages 52-57.
Information on
monitoring compliance
with certain policies
can be found in the
Audit Committee
report on pages 82-85.
For details of the
key governance
policies in place across
the Group, and activities
during 2023, please see
pages 69-71.
The Group’s values shape our
culture, define who we are, what
we do and how we act. We
believe they demonstrate our
commitment to ethical
behaviour.
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 ways
of working.
The Group Board also monitors
and assesses the current state
of culture and employee
satisfaction. It does so by
including minutes of each Brand
Addition employee forum for
noting at Group Board meetings
and by chatting to employees at
pre-arranged employee
engagement events or more
informally whilst spending time in
our offices.
The Pebble Group plc Annual Report 2023
77
Corporate governance statement
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 are explained
on pages 60-65.
More detail on the
Group Board roles
and responsibilities can
be found on the
corporate governance
section of the
Company’s website.
The roles of the
Group Board’s
Committees are
described in detail on
pages 64-65.
The schedule of
matters reserved
for the Group Board
and each Committee’s
terms of reference can
be found on the
Company’s website.
For more detail on
Board Agenda,
please see page 62.
The Group’s governance structures have evolved and
developed so that they fit naturally with our culture and way
of working. They will remain under continual review and will
evolve where required in line with the Group’s 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 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 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 continue to support good
decision-making.
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), with
appropriate and timely information circulated in good time
prior to each meeting, and considered planning of meetings
are 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 review, develop and
formalise Group Board processes, including by 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.
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The Pebble Group plc Annual Report 2023
CORPORATE GOVERNANCE Principle 10:
Communicate how the
Company is governed and
is performing by
maintaining a dialogue
with shareholders and
other relevant
stakeholders.
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.
The investor relations activity during 2023 ensured dialogue
existed with investors on matters of governance and
performance.
Shareholders and other relevant stakeholders are free to
engage in dialogue with the Company via
investors@thepebblegroup.com.
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.
The Pebble Group plc Annual Report 2023
The Pebble Group plc Annual Report 2023
79
79
Board of Directors
Leading with
experience.
KEY TO COMMITTEE MEMBERSHIP
A Audit Committee
R Remuneration Committee
N Nomination Committee
Committee Chair
Richard Law
Chair and Independent
Non-executive Director
Tenure
4 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. He then took up a
portfolio role investing in and chairing both
public and private companies.
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 2023
Board meetings and AGM
Audit Committee meetings
Remuneration Committee meetings
Nomination Committee meetings
12/12
3/3
7/7
4/4
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The Pebble Group plc Annual Report 2023
Christopher (Chris) Lee
Chief Executive Officer (CEO)
Claire Thomson
Chief Financial Officer (CFO)
Tenure
24 years
Tenure
16 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 respectively. He then led 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
Experience
Claire has led the finance, banking, tax, legal
and compliance aspects of the businesses
which now comprise the Group for over
15 years. She took on 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
management, contracting and negotiations
• Successful transaction and M&A
• A thorough understanding of stakeholder
experience
priorities including the development of the
senior executives and ESG issues
• Significant experience of effective risk
management and internal controls
• Investor relations
External appointments
• Director at Cheadle Hulme School
Committee membership
Group Executive Committee
Committee membership
Group Executive Committee
Meetings attended in 2023
Board meetings and AGM
Meetings attended in 2023
Board meetings and AGM
12/12
Group Executive Committee
9/9
Group Executive Committee
12/12
9/9
CORPORATE GOVERNANCE Yvonne Monaghan
Independent Non-
executive Director and
Senior Independent
Director
Stuart Warriner
Independent Non-
executive Director
Tenure
4 years 4 months
David Moss
Independent Non-
executive Director
Lucy Penfold
Group General Counsel
and Company Secretary
Tenure
8 months
Tenure
3 years 3 months
Experience
Stuart has extensive corporate
finance experience with a career
in investment banking and as a
Corporate Finance Partner at
PricewaterhouseCoopers. 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
• Non-executive Chair at Altia
Solutions Limited
• Non-executive Chair at
Mortgage and Surveying
Services Limited
• Non-executive Chair at Blue-I
Holdings Limited
• Non-executive Director of
Lodestone Oxford Limited
• Senior Advisor at Houlihan
Lokey
Tenure
4 years 4 months
Experience
Yvonne has been the Chief
Financial Officer of Johnson
Service Group PLC since 2007.
She 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
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
law firm 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/integration
• Commercial contract, drafting
and negotiation
• Corporate governance
• Risk management
Experience
David has extensive technology
and Board experience. Following
a four-year tenure at Lynx
Financial Systems as a Developer,
Designer and Software Architect,
David co-founded Blue Prism as
Chief Technology Officer in 2001.
During his 20-year tenure, David
had direct responsibility for all
Technology product related
matters, as well as participating in
key engagements with
stakeholders and sitting on the
Blue Prism Board. Following a
successful AIM IPO with 70 staff
and a market capitalisation of
£48.5m in 2016, Blue Prism grew
to over 1,000 people in 30
countries by 2020 before being
acquired by SS&C in 2022 for
$1.6bn. David has a BSc (Hons)
degree in Mathematics from
Leeds University.
Skills brought to the Group
Board
• Successful track record of
ambitious growth strategy
execution and building
shareholder value
• Significant knowledge, skills
and experience in technology
business
• Technology product
management, marketing and
R&A
• Intellectual Property
External appointments
• Director at Binary Pursuits
Limited
Committee membership
A R N
Committee membership
A R N
Committee membership
R N
Committee membership
Group Executive Committee
Meetings attended in 2023
Board meetings and AGM
10/12
Meetings attended in 2023
Board meetings and AGM
12/12
Meetings attended in 2023
Board meetings
4/4
Meetings attended in 2023
Group Executive Committee
9/9
Audit Committee meetings
3/3
Audit Committee meetings
3/3
Remuneration Committee meetings 2/2
Remuneration Committee meetings
7/7
Remuneration Committee meetings
7/7
Nomination Committee meetings
2/2
Nomination Committee meetings
4/4
Nomination Committee meetings
4/4
The Pebble Group plc Annual Report 2023
81
Audit Committee report
Overseeing the integrity
of the Group’s financial
statements.
Yvonne Monaghan
Audit Committee Chair
Independent Non-executive Director and
Senior Independent Director
“Our risk register has been
expanded to enable the Group to
review and assess tax risks in an
evolving global tax environment.”
Dear Shareholder,
I am pleased to present the Audit Committee report for the
year ended 31 December 2023.
Composition and experience of the Audit
Committee
I am Chair of the Committee which is made up of three of
our independent Non-executive Directors (Stuart Warriner,
Richard Law and myself) and is supported by Lucy Penfold
as Company Secretary. All Committee members 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 80-81. All Committee
members 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, and typically by the external auditors. In
2023, all three meetings had full Committee attendance.
The external auditors attended two of the 2023 Committee
meetings and submitted a report in lieu of their attendance
at the third meeting. Additionally, the Committee meets the
external auditors at least once per year without executive
management present, to discuss the auditors’ 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 are reviewed at least annually
and 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 Group’s processes and controls in respect of
whistleblowing, anti-bribery and failure to prevent tax
evasion;
• monitoring and reviewing the effectiveness of the Group’s
internal audit function;
• considering the review of material business risks, including
ESG and climate-related risks and opportunities, 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 Interim Report and
giving an opinion to the Group Board on whether the
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The Pebble Group plc Annual Report 2023
CORPORATE GOVERNANCE Annual Report and Interim Report are fair, balanced and
understandable;
The Committee is aware that APMs are non-IFRS measures.
APMs used by the Group are as follows:
• ensuring consistency in application of, and compliance
• Adjusted EBITDA which means operating profit before
with, applicable accounting standards; and
• overseeing the relationship with the external auditors
depreciation, amortisation, share-based payments charge
and exceptional items
including recommending approval of their appointment
and approving their remuneration, reviewing their reports
and ensuring their independence is maintained.
• Adjusted operating profit which means operating profit
before amortisation of acquired intangible assets, share-
based payments charge and exceptional items
• Adjusted operating profit less finance costs
• 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
The Committee considers the APMs, 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 APMs are used, they are presented with
equal prominence to the statutory figures.
External Auditors
The Audit Committee has responsibility for recommending
the appointment of and deciding the remuneration of the
Group’s external auditors and satisfying itself that they
maintain their independence regardless of any non-audit
work performed by them.
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 from the formal Board and
Committee Effectiveness Review detailed on pages 74-76 to
review and evaluate its own performance and constitution
during Q4 2023. It concluded that the Committee was
operating effectively, and no action or changes were
required to be recommended to the Group Board.
Significant matters considered in relation to the
financial statements
At the request of the Group Board, the Audit Committee
considered whether the 2023 Annual Report was 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 2023
Annual Report was 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 auditors. The specific areas reviewed by the
Committee during the year were:
• the capitalisation of software development costs;
• consideration of the appropriateness of the carrying value
of goodwill, intangibles and investments;
• the procedures and controls introduced in relation to
compliance with the prevention of tax evasion;
• review of the controls processes over inventory;
• going concern assessment; and
• considering and agreeing the annual internal audit plan.
Alternative Performance Measures (APMs)
We refer to a number of APMs throughout the Annual
Report. 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 for determination of
Directors’ and senior team’s remuneration.
The Pebble Group plc Annual Report 2023
83
Audit Committee report
The Group has a formal policy in place in relation to the
engagement of the external auditors to supply non-audit
services, 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 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 auditors in
respect of the year under review amount to £406,000
(FY 22: £310,000). The fee for FY 23 includes £35,000 of
over-runs, agreed by the Committee in respect of the
FY 22 audit. No non-audit services were provided in FY 23
(FY 22: £nil).
During the year, the Audit Committee led a process for the
selection and appointment of new external auditors for the
Company, as explained in further detail below. In
accordance with the recommendation of the Audit
Committee, the Group Board has approved that a
resolution to appoint BDO LLP (BDO) as external auditors
will be proposed to shareholders at the 2024 Annual
General Meeting, to take effect from the closure of that
meeting.
The respective responsibilities of the Directors and external
auditors in connection with the Group financial statements
are explained in the Statement of Directors’ Responsibilities
in Respect of the Financial Statements on page 99 and the
Independent auditors’ report on pages 100-105.
Review of external auditors’ effectiveness
The Committee reviewed the external auditors’
performance and independence during 2023, by considering
the qualifications, expertise and resources of
PricewaterhouseCoopers LLP (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
• the relationship with PwC as a whole, to confirm there
were no relationships between the external auditors and
the Company other than in the ordinary course of business
which could adversely affect independence and objectivity
The Group has in place a formal policy for the appointment
of former employees of the external auditors, 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.
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The Pebble Group plc Annual Report 2023
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 auditors in respect of the
year ending 31 December 2023.
Internal control and risk management
As explained in more detail in the Risk Management section
of the Strategic report on pages 52-57, 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, as contained in the
Group’s main risk register and sub register of climate-
related risks. This includes assessing the mitigating actions
in place and updates to action plans agreed in previous
meetings.
In FY 23, the Group risk register was extended to include a
sub register of tax risks facing the Group. The tax risk
register enables the Group to review and assess tax risks in
an evolving global tax environment, as well as ensuring that
those risks are monitored and that the mitigations put in
place are fit for purpose.
The Committee discussed and reviewed the Group’s risk
register twice in FY 23; key areas of focus being security
breaches, computer malware and other cyber-attacks,
global supply chain disruption, reliance on IT systems,
macroeconomic environment and climate change. 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.
Whistleblowing
The Committee ensures an appropriate whistleblowing
policy and confidential process is in place designed to
support and encourage employees and other stakeholders
to raise concerns in respect of conduct within the Group,
without fear of recrimination or suffering a disadvantage of
any kind. The policy reflects the Group’s commitment to
high standards of honesty, integrity and accountability, and
it promotes a culture of openness by enabling stakeholders
to report any misconduct, malpractice, illegalities,
wrongdoing or matters of similar concern using the Group’s
24 hour whistleblowing portal. During the year, the policy
was reviewed by the Committee and later re-approved by
the Board to ensure continued compliance with best
practice and alignment with our businesses and ways of
working.
Summaries of any whistleblowing reports and resolutions
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, if necessary. During the year, one matter was
submitted via the whistleblowing process which was akin to
an employee related grievance. This was investigated and
resolved efficiently and thoroughly in accordance with the
policy and the resulting actions were tracked by the
Committee.
CORPORATE GOVERNANCE b) References from other companies – obtained by CFO
with findings communicated to the Committee to
provide reassurance on quality of service.
c) FRC findings - FRC annual supervision reports on the
conclusions of their work on Audit Quality Inspection and
Supervision for BDO were noted by the Committee and
discussed with BDO.
d) Audit Proposal – BDO presented its proposed Audit
Strategy document to the Committee in January 2024 to
cover its perceived audit risks and areas of focus, the
steps it would take to guarantee full independence and
how it would explore improving audit efficiency through
the use of IT. This provided an opportunity for the
Committee to ask questions of the BDO Lead Partner
and audit team directly.
Committee recommendation and Group Board
approval
The CFO explained the assessment criteria used to draw the
conclusion that BDO was well positioned to take over the
role of external auditors and perform a high quality,
effective and efficient audit. Following Committee
discussion on the outcome of the process followed and the
Audit Proposal received from BDO, the Committee
unanimously resolved to recommend to the Board that BDO
be proposed as the Company’s external auditors in the
place of PwC. The Group Board subsequently approved
that a resolution to appoint BDO as external auditors will be
proposed to shareholders at the 2024 Annual General
Meeting, to take effect from the closure of that meeting
(if approved).
Transitional plans
BDO has commenced transitional activity in preparation for
the external audit of FY 24, by shadowing the outgoing
external auditors and attending the March 2024 Audit
Committee meeting. This will aid a smooth and efficient
transition and allow BDO to commence their work on the
2024 audit as well prepared as possible.
Yvonne Monaghan
Chair of the Audit Committee
18 March 2024
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 separate internal audit
function. Targeted reviews and visits to operations are
performed by the Group 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 auditors.
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 and market abuse prevention
and ensures that the Group has appropriate policies and
processes in place.
For full details of our Group policies and work performed in
2023, please see pages 69-71 of this Report.
Appointment of a new external auditors
During the year, the Committee considered the ongoing
appointment of PwC as the Company’s external auditors
and made the decision to initiate a process to explore
whether there was a firm other than PwC that was well
suited to provide a high quality, effective and efficient
audit. It was noted that a change in external auditors was
viewed positively from the viewpoint of ensuring and
maintaining independence.
After a preliminary investigation, the Committee concluded
that a formal tender process was not required and would not
be beneficial due to the existence of conflicts of interest and
capacity challenges within Tier 1 accountancy firms which
ruled out possible participants. To ensure and evidence that a
robust process with an emphasis on audit quality was
followed, the Committee instead implemented the following
steps to evaluate a proposal received from BDO:
a) Information sharing and preliminary meetings – this
ensured a full understanding by BDO of our businesses
and the Group’s key audit deliverables and timetable.
It confirmed the existence of adequate resource and
capacity within BDO to commit to audit delivery within
the Company’s timetable.
The Pebble Group plc Annual Report 2023
85
Remuneration report
Ensuring that remuneration
appropriately reflects
performance.
Stuart Warriner
Remuneration Committee Chair
Independent Non-executive Director
“I am pleased to have overseen the
introduction of ESG performance
metrics into Executive variable
pay for 2024.”
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The Pebble Group plc Annual Report 2023
This report is for the year ended 31 December 2023. 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 2023 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 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 2024 AGM, as we have in previous years. At the 2023
AGM, this resolution was supported by 100% of votes cast.
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 the
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.
CORPORATE GOVERNANCE 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.
To ensure that the remuneration policy remains appropriate
and effective, the Committee’s approach is to review one
element of remuneration each year. During 2023, the
Committee looked in detail at the structure, workings and
performance conditions applied to the Executive Bonus
Plan awards. Following this review, the Committee
determined that no material changes were required to its
Executive Bonus Plan structure, which remains relevant,
appropriate and consistent with best practice. However, the
Committee approved the introduction of three specific
Environmental, Social and Governance (ESG) related
performance measures linked to tangible targets for
inclusion alongside financial performance targets for 2024.
Performance and decisions on remuneration taken
during 2023
Annual bonus
The Company faced trading challenges, primarily due to
weaker sales in the second half of the year at Brand
Addition from its clients who operate in the Technology and
Consumer sectors. This resulted in a trading update being
issued in November 2023 which indicated that Group
financial performance was expected to be lower than
market consensus. The resultant financial performance in
2023 proved to be lower than the threshold set for the
Executive Directors under their 2023 Annual Bonus Plan.
Therefore, no annual bonus is payable to the Executive
Directors for 2023 performance.
LTIP
In August 2023, the vesting of Awards under the 2020 LTIP
was approved (with basic adjusted Earnings Per Share (EPS)
and Total Shareholder Return (TSR) measured over the
three years to 30 June 2023) with vesting at 70% of the
maximum level.
The vesting of Awards under the LTIP 2021 (with EPS and
TSR performance measured over the three years to
31 December 2023) due in June 2024 will be impacted by
the second half 2023 trading performance. Vesting was
approved post year end, in March 2024, at 20.8% of the
maximum level.
Other remuneration decisions made by the
Remuneration Committee during the year:
• Awards to Executive Directors under the 2023 Annual
Bonus Plan were approved and granted subject to
performance targets agreed by the Committee based
solely on the Group’s financial results, switching to use of
Operating Profit instead of Adjusted EBITDA performance
• Awards to Executive Directors under the 2022 Annual
Bonus Plan were approved as follows: Chris Lee £148,770
and Claire Thomson £109,620 (each at 52.2% of salary)
• The annual grant of awards under the LTIP were made on
28 March 2023
• A second grant under the Group SAYE was approved and
options granted on 25 April 2023
Information on how remuneration will be operated in 2024
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
18 March 2024
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Remuneration report
Composition of Remuneration Committee
The Committee comprises all four independent Non-
executive Directors, Stuart Warriner (Chair), Yvonne
Monaghan, Richard Law and David Moss and is supported by
Lucy Penfold as Company Secretary. The Committee will
normally meet four or more times a year to review the
remuneration of the Executive Directors and other
Executive Team members and to deal with share scheme
matters.
The views of the CEO 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 Board and
Committee Effectiveness Review detailed on pages 74-76 to
review and evaluate its own performance, constitution and
terms of reference during Q4 2023. It concluded that the
Committee was operating effectively, and no action or
changes were required to be recommended to the Group
Board. The terms of reference 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 LTIP. In addition to this, the
Executive Directors are required to build and maintain a
minimum shareholding in the Company’s shares, details of
which are provided in the table on the following pages.
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The Pebble Group plc Annual Report 2023
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 66% of the potential
remuneration of the Executive Directors in 2023 was
subject to the achievement of performance targets, made
up of a maximum annual bonus opportunity at 100% of
salary and an annual performance share award at 100% of
salary. The link of remuneration outcomes to long-term
performance is primarily through the LTIP which has
stretching three-year targets based on EPS and 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: (i) careful consideration in the
choice and pitching of performance targets; (ii) the ability
to exercise discretion; (iii) the attachment of malus and
clawback provisions to LTIP awards; and (iv) 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 2023 the Committee
also consulted external consultants h2glenfern
Remuneration Advisory UK LLP (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. h2glenfern advised and assisted the Committee
in respect of the detailed review of its Executive Bonus Plan
and introduction of ESG performance metrics, (as outlined
above) during 2023.
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 on the following pages.
CORPORATE GOVERNANCE Performance metric
The Committee
considers individual
and Company
performance when
setting base salary.
None.
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.
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.
Link to remuneration
policy/strategy
Operation
Maximum
opportunity
Elements of Remuneration
Element
Base Salary
To help recruit and
retain high performing
Executive Directors.
Reflects the individual’s
experience, role and
importance to the
business.
Benefits
To help recruit and
retain high performing
Executive Directors.
To provide market
competitive benefits.
Pension
To help recruit and
retain high performing
Executive Directors.
To provide market
competitive pensions.
Base salary is set annually
as at 1 January with
reference to each
Executive Directors’
performance and
contribution during the
year, company
performance, the scope
of the Executive
Directors’ responsibilities
and consideration of
competitive pressures.
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.
None.
5% of base salary,
which is aligned with
the pension
contribution made by
the Company to its UK
workforce.
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Remuneration report
Element
Link to remuneration
policy/strategy
Operation
Maximum
opportunity
Annual Bonus
Plan
To incentivise and reward
performance.
To align the interests of
the Executives and
shareholders in the short
and medium-term.
LTIP
To incentivise and reward
long-term performance
and value creation.
To align the interests of
Executive Directors and
shareholders in the
long-term.
The maximum bonus
opportunity for the
CEO and CFO is 100%
of base salary.
The annual award to
the CEO and CFO is
normally 100% of base
salary.
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.
Executive Directors are
eligible to receive awards
under the LTIP 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.
Performance metric
Performance measures
may include financial,
non-financial, personal
and strategic
objectives.
Performance criteria
and weightings may be
changed from year to
year.
For 2023, the
performance targets
were based on
Operating Profit. For
2024, the performance
targets are based on
operating profit (85%)
and three ESG
performance metrics:
customer satisfaction
(5%), employee
engagement (5%) and
ESG sustainability (5%).
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, FY 21, FY 22 and FY
23, 70% of the award
was subject to a
cumulative basic
earnings per share
(EPS) target and 30%
was subject to an
absolute total
shareholder return
(TSR) target.
Details are set out later
in this Report.
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The Pebble Group plc Annual Report 2023
CORPORATE GOVERNANCE Element
Link to remuneration
policy/strategy
Operation
Maximum
opportunity
Performance metric
All employee
share plan
To encourage all
employees to make a
long-term investment in
the Company’s shares in
a tax efficient way
The Executive Directors
may participate in the
SAYE on the same terms
as other eligible
employees.
The maximum
participation level will
be aligned to HMRC
limits.
None.
Shareholding
requirement
Encourages Executive
Directors to achieve the
Company’s long-term
strategy and create
sustainable stakeholder
value.
Aligns with shareholder
interests.
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 may be
reimbursed.
The Group Board is
guided by the general
increase for the
broader employee
population and takes
into account relevant
market movements.
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Remuneration report
Malus and clawback
Both Annual Bonus and LTIP 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 LTIP, as well as being eligible to participate
in the SAYE on the same terms as other eligible employees.
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 2024.
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. Three Non-
executive Directors have letters of appointment for their
second three-year term from 28 November 2022 and one
Non-executive Director has a letter of appointment for his
initial three-year term from 22 June 2023. Each has 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 considering 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 2023.
2023 Summary of Directors’ total remuneration (audited)
Name
Executive
Christopher Lee
Claire Thomson
Non-executive
Richard Law
Yvonne Monaghan
Stuart Warriner
David Moss
Salary / Fee
Bonus
LTIP
Pension
Benefits*
Total
£96,618
£71,569
£300,000
£221,000
£110,000
£50,000
£50,000
£26,350**
£0
£0
-
-
-
-
-
-
-
-
-
-
£10,645
£10,774
£407,263
£303,343
-
-
-
-
£110,000
£50,000
£50,000
£26,350
* car lease and private medical insurance
**David Moss was appointed on 22 June 2023
The value of the LTIP in 2023 relates to the vesting of the 2020 LTIP awards and the value has been calculated using the share price on the vesting date of 21 December 2023. Of the LTIP
value included, £nil is attributable to share price appreciation. Neither Executive has exercised these vested awards.
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The Pebble Group plc Annual Report 2023
CORPORATE GOVERNANCE 2022 Summary of Directors’ total remuneration (audited)
Name
Executive
Christopher Lee
Claire Thomson
Non-executive
Richard Law
Yvonne Monaghan
Stuart Warriner
* car lease and private medical insurance
Salary / Fee
Bonus
LTIP
Pension
Benefits*
Total
£285,000
£210,000
£148,770
£109,620
£100,000
£45,000
£45,000
-
-
-
-
-
-
-
-
-
-
-
-
-
£15,170
£11,787
£448,940
£331,407
-
-
-
£100,000
£45,000
£45,000
2023 Annual Bonus Plan Awards
For 2023, the maximum potential bonus was 100% of base salary. The awards were subject to performance targets set in
March 2023 based solely on the Group’s financial results, using the operating profit performance, which was considered by
the Remuneration Committee to be the Group’s most relevant key performance measure for 2023. 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, as follows:
Pay out level
25%
60%
100%
0%
threshold
target
maximum
actual
Operating Profit
£10.5 million
£11.6 million
£12.5 million
£8 million
The Company achieved Operating Profit of £8m in FY 23 which corresponded to no bonus pay out for either Executive
Director, as shown in the table above.
LTIP and SAYE
LTIP awards were granted to the CEO and CFO on 28 March 2023. The table below summarises all of the awards made to
the Executive Directors under the LTIP and SAYE plans.
The LTIP awards are nil cost awards with performance conditions outstanding as at 31 December 2023.
Name and award date
Type
Interest at
31 December
2022
Granted in
year*
Exercise
price (£)
Vested
Exercised
Lapsed
Interest at 31
December
2023
Performance
period ending
Christopher Lee
21 December 2020
8 June 2021
6 October 2021
29 March 2022
28 March 2023
Claire Thomson
21 December 2020
8 June 2021
6 October 2021
29 March 2022
28 March 2023
LTIP
LTIP
SAYE
LTIP
LTIP
LTIP
LTIP
SAYE
LTIP
LTIP
242,152
176,471
14,754
280,788
179,372
130,719
14,754
206,897
-
-
-
-
256,410
-
-
-
-
188,889
0
0
1.22
0
0
0
0
1.22
0
0
169,506
-
-
-
-
125,560
-
-
-
-
0
-
-
-
-
0
-
-
-
-
72,646
169,506
30 June 2023
-
-
-
-
176,471
31 December 2023
14,754
n/a
280,788
31 December 2024
256,410
31 December 2025
n/a
53,812
125,560
30 June 2023
-
-
-
-
130,719
31 December 2023
14,754
n/a
206,897
31 December 2024
188,889
31 December 2025
* The value at Grant Date was calculated based on the closing share price on 27 March 2023 of 117p per share. Each of the awards represents an LTIP award over shares worth 100% of
annual salary as at the Grant Date.
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Performance conditions
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
30% Annualised TSR
Annualised growth in total
shareholder returns
2020 award
2021 award
2022 award
2023 award
3 years ended
30 June 2023
3 years ended
31 December
2023
3 years
ended
31 December
2024
3 years
ended
31 December
2025
Threshold (25% maximum vesting)
Mid-range (60% maximum vesting)
Maximum (100% maximum vesting)
13.4p
14.3p
15.1p
15.4p
16.3p
17.3p
17.6p
18.8p
19.9p
19.5p
20.6p
21.8p
Threshold (25% maximum vesting)
Mid-range (60% maximum vesting)
8.0% pa
11.3% pa
8.0% pa
11.3% pa
8.0% pa
11.3% pa
8.0% pa
11.3% pa
Maximum (100% maximum vesting)
15.0% pa
15.0% pa
15.0% pa
15.0% pa
Performance between these levels is determined on a straight-line basis and the performance periods for the awards were
chosen to align with the financial year.
Awards granted under the LTIP 2020 vested on 21 December 2023. The three year performance period was from 1 July 2020 to
30 June 2023 rather than aligned with the financial year as the LTIP was granted late in the year due to Covid disruption. On the
EPS performance target, the Adjusted EPS performance over the period was 16.01p and that equated to the vesting of 100% of
the award subject to the 70% Adjusted EPS performance condition. On the TSR performance target, the share price at the start
of the performance period was 105p and the share price on 30 June 2023 was 93p which was below the 8% Annualised TSR
thresholds and equated to the vesting of 0% of the award subject to the 30% Annualised TSR performance condition.
Awards granted under the LTIP 2021 are due to vest on 8 June 2024. These had a three year performance period from
1 January 2021 to 31 December 2023. On the EPS performance target, the Adjusted EPS performance over the period was
15.52 and that equates to the vesting of 29.7% of the award subject to the 70% Adjusted EPS performance condition.
On the TSR performance target, the share price at the start of the performance period was 130p and the share price on
31 December 2023 was 60.5p which is below the 8% Annualised TSR threshold and equates to the vesting of 0% of the
award subject to the 30% Annualised TSR performance condition.
The charge for share based payments is detailed in note 25 to the Group financial statements.
SAYE participation
Christopher Lee and Claire Thomson were not eligible to participate in the 2023 SAYE opened in October 2023 as they are
already included in the 2021 SAYE to the maximum amount offered to staff under the plan.
No SAYE was operated in 2022. As such, they continue to hold options as detailed below. The exercise price for these
awards is 122p per Ordinary Share, representing a 20% discount to the closing market price of 152.50p per Ordinary 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
Granted in 2021
Exercise price
Contract start date
Option exercisable
6 Oct 2021
6 Oct 2021
14,754
14,754
122p
122p
1 Dec 2021
1 Dec 2021
1 Dec 2024
1 Dec 2024
Directors’ interests in shares
The interests of the Directors as at 31 December 2023 and 31 December 2022 in the shares of the Company were:
Name
Richard Law
Christopher Lee
Claire Thomson
Yvonne Monaghan
Stuart Warriner
David Moss
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The Pebble Group plc Annual Report 2023
31 December 2023
31 December 2022
Number
370,041
6,091,515
2,907,243
55,000
95,000
100,000
% of issued
shares
0.22%
3.64%
1.74%
0.03%
0.06%
0.06%
Number
370,041
6,091,515
2,907,243
55,000
95,000
n/a
% of issued
shares
0.22%
3.64%
1.74%
0.03%
0.06%
n/a
CORPORATE GOVERNANCE Directors’ remuneration for the year commencing 1 January 2024
Executive Directors basic pay 2024
In reviewing Executive Director basic pay in Q4 2023, the Committee looked to ensure that Executive remuneration is fair
and competitive. It had regard to the interests of the Group’s wider workforce, its shareholders, the impact of the decision
on the Company’s culture, reputation, and its wider social responsibilities in the context of the current economic
landscape, share price and the Group’s stage on its growth journey. Following consideration of the remuneration policy,
general remuneration trends across the Group, and the broader context of Executive Director total remuneration package,
the Committee agreed salary increases for each of the CEO and CFO of 4.0% and 4.1% respectively, which was below the
average increase in basic pay awarded across the wider Group.
Name
Christopher Lee
Claire Thomson
Role
CEO
CFO
Base salary
2024
312,000
230,000
Base salary
2023
300,000
221,000
2024 Annual Bonus Plan Awards
The annual bonus plan for 2024 will operate in a similar way to 2022 and 2023. However, performance targets will be split
so that 85% of total award is based on Operating Profit which the Committee continues to consider the most relevant key
performance indicator for bonus purposes and 15% of total award is based on non-financial performance metrics, as
follows:
• Customer Satisfaction, to be measured by the Net Promoter Score (NPS) metric in Brand Addition and Partner Retention
Rate metric in Facilisgroup;
• Employee Engagement, to be measured by the score resulting from the annual employee survey within each of Brand
Addition and Facilisgroup; and
• ESG and Sustainability to be measured by reference to Brand Addition’s annual Ecovadis rating,
with 5% allocated to the achievement of each one.
LTIP for 2024
LTIP awards are planned for March 2024 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
One new Non-executive Director was appointed for an initial three-year term with effect from 22 June 2023.
Non-executive Director remuneration is a matter for the Chair of the Board and Executive Directors, and no Non-executive
Director was involved in the decision as to their own remuneration.
Name
Richard Law
Role
Committee Chair
Chair of the Group Board
Nomination
Yvonne Monaghan
Non-executive Director
Audit
Stuart Warriner
David Moss
Non-executive Director
Remuneration
Non-executive Director
n/a
Annual Fee
2024
£110,000
£50,000
£50,000
£50,000
Annual Fee
2023
£110,000
£50,000
£50,000
£26,350
The Pebble Group plc Annual Report 2023
95
Directors’ Report
For the year ended 31 December 2023
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 2023.
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 likely future
developments in its businesses is given in the Strategic
report on page 17.
Results and dividends
The Group recorded revenue in the year of £124.2m
(FY 22: £134.0m) and profit after tax of £5.8m
(FY 22: £7.6m). No interim dividend has been paid in the
year (FY 22: 0.6 pence per share as final dividend).
In respect of FY 22, the Board began to implement a
progressive dividend policy for the Group which is to move
in the medium-term towards its stated position at IPO of
making dividend payments of c.30% of profit after tax. As
such, the Group Board is proposing the payment of a final
dividend of 1.2 pence per share for FY 23, a distribution
totalling £2m, payable on 7 May 2024, subject to
shareholder approval, to those shareholders on the register
of members on 5 April 2024. The shares will trade
ex-dividend on 4 April 2024.
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.
The Group refinanced its £10m RCF in January 2023 for a
three year period to January 2026, with the option to
extend for an additional year to January 2027.
Further details on going concern are provided in note 2 to
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
• David Moss (appointed on 22 June 2023)
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, to align best practice,
the Group Board has again decided that all Directors would
retire and seek re-election by the Company’s shareholders
at the 2024 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 2023 had the interests in the Ordinary Shares
of the Company as shown in the table on page 94.
Financial risk management
Information relating to the principal risks and uncertainties
of the Group has been included within the Strategic report
on pages 52-57. Further information relating to the financial
risk of the Group has been included within note 24 to the
Group financial statements.
In addition to the interest in Ordinary Shares shown in the
table on page 94, the Group operates a 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 LTIP
awards as at 31 December 2023 is shown below.
Name of Director
Christopher Lee
Claire Thomson
Number
883,175
652,065
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 2025. 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
96
The Pebble Group plc Annual Report 2023
CORPORATE GOVERNANCE
The Group also operates a 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 SAYE awards as at
31 December 2023 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 60.5p (31 December 2022: 90p) and the
range of market prices during the year ended 31 December
2023 was between 52.5p and 118.5p.
respect of their eligibility for training, career development
and promotion. For further information on the Group’s DEI
policy please see page 34.
Statement on Engagement with other Stakeholders
The ‘Fostering relationships with other stakeholders’ section
on page 62 summarises how the Directors have engaged
with other stakeholders.
Our Strategic report on pages 18-21 summarises all
stakeholder engagement and how our Directors and
Divisional Leads have had regard to the need to foster
other stakeholder relationships and the effect of that
regard, including on the principal decisions taken by the
Group or each Division during the financial year.
Further details on related party transactions with Directors
are provided in note 26 to the Group financial statements.
That section is incorporated by reference and forms part of
this Directors’ Report.
Directors’ insurance
The Company maintains Directors’ and Officers’ liability
insurance for the Directors, which was in force during the
full year 2023 and remains in force as at the date of this
Report.
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 (2022: nil).
Significant shareholdings
Please see details of our major shareholders on the
Company’s website.
Employee Engagement Statement
Our Strategic report on page 18 sets out the arrangements
made or maintained in 2023 aimed at providing employees
systematically with information on matters of concern to
them and consulting employees on a regular basis.
The ‘Group Board Engagement with our businesses and
employees’ section on page 60 summarises how the
Directors have engaged with employees and explains how
the Group Board aims to provide employees systematically
with information on matters of concern to them as
employees and achieve a common awareness on the part of
all employees of the financial and economic factors
affecting the performance of the Group.
Our Strategic report on pages 18 and 34 summarises all
employee engagement and how our Directors and Divisional
Leads have had regard to employee interests, and the
effect of that regard, including on the principal decisions
taken by the Group or each Division during the financial
year.
Those sections are incorporated by reference and form
part of this Directors’ Report.
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
Share capital and voting
The Company has one class of equity share, 1 pence
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 of Association.
As at 31 December 2023, the Company’s issued share
capital comprised: 167,450,893 Ordinary Shares of 1 pence.
Shareholders’ Authority for the Purchase by the
Company of its own Shares
At the 2023 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 2023 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 2024 AGM. Further details
are given in the 2024 Notice of Annual General Meeting.
Appointment and replacement of Directors and
changes to constitution
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. The Articles of Association are
available on the Company’s website.
The Pebble Group plc Annual Report 2023
97
Directors’ Report
For the year ended 31 December 2023
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
The Company adheres to the Corporate Governance Code
for Small and Mid-Size Quoted Companies 2018 published
by the QCA Code. Our governance structure and the
Group’s statement on corporate governance can be found
in the Corporate Governance section of this Report on
pages 60-65 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
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’.
Greenhouse Gas emissions and energy use
Our ESG Section on pages 26-44 contains disclosures of our
UK energy use and GHG emissions, as required under the
Companies (Directors’ Report) and Limited Liabilities
Partnerships (Energy & Carbon Report) Regulations 2019.
That section is incorporated by reference and forms part of
this Directors’ Report.
Independent auditors
During the year, the Audit Committee led a process for the
selection and appointment of new external auditors for the
Company and, in accordance with the recommendation of
the Audit Committee, the Group Board has approved that a
resolution to appoint BDO LLP as external auditors will be
proposed to shareholders at the 2024 Annual General
Meeting, to take effect from the closure of that meeting.
Further details of the Audit Committee’s selection and
appointment process can be found on pages 82-83.
By order of the Group Board
Lucy Penfold
Group General Counsel & Company Secretary
18 March 2024
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The Pebble Group plc Annual Report 2023
CORPORATE GOVERNANCE 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’ confirmations
In the case of each Director in office at the date the
Directors’ Report is approved:
• so far as the Director is aware, there is no relevant audit
information of which the Group’s and Company’s auditors
are unaware; and
• they have taken all the steps that they ought to have taken
as a Director in order to make themselves aware of any
relevant audit information and to establish that the
Group’s and Company’s auditors are aware of that
information.
Claire Thomson
CFO
18 March 2024
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.
The Pebble Group plc Annual Report 2023
99
FINANCIAL STATEMENTS
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 2023 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 as applied in accordance with the
provisions of the Companies Act 2006;
• the company financial statements have been properly
prepared in accordance with United Kingdom Generally
Accepted Accounting Practice (United Kingdom
Accounting Standards, including 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 2023; the consolidated income
statement, consolidated statement of other comprehensive
income, consolidated and company statements of changes
in equity and consolidated cash flow statement for the year
then ended; and the notes to the financial statements,
comprising material accounting policy information and other
explanatory information.
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 or
its controlled undertakings in the period under audit.
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The Pebble Group plc Annual Report 2023
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 reporting
components, as well as central operations.
• 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.
• Two further components were also subject to audit
procedures over specific balances due to their
contribution to the Group; this included accruals,
inventory, property, plant and equipment, and
depreciation expense in Brand Addition Germany, and
intangible assets and amortisation expense in Facilisgroup
Canada.
• As a result of this scoping we obtained coverage over 82%
of Group revenue, 86% of Group profit before tax and
84% of Group Adjusted EBITDA.
Key audit matters
• Accuracy, existence/occurrence of capitalised
development costs (group)
• Risk of impairment of investments in subsidiaries and
amounts owed by group undertakings (parent)
Materiality
• Overall group materiality: £931,283 (2022: £451,050) based
on 0.75% of Revenue (2022: based on 2.5% of Adjusted
EBITDA).
• Overall company materiality: £838,154 (2022: £405,945)
based on 1% of total assets, restricted to 90% of Group
financial statement materiality.
• Performance materiality: £698,462 (2022: £338,287)
(group) and £628,615 (2022: £304,458) (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.
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.
The key audit matters below are consistent with last year.
Key audit matter
How our audit addressed the key audit matter
Accuracy, existence/occurrence of capitalised
development costs (group)
Refer to Note 2k, Note 3b and Note 13 of the Notes to the
group financial statements.
The group capitalised costs of £7.6 million during the year
ended 31 December 2023, of which £6.6 million relates to
internally generated costs. Management prepared an
accounting paper and uses this as their guide in capitalising
such costs.
There is a risk that capitalised development costs additions
are incorrectly recognised in the closing balance sheet. This
can arise where internally generated costs (such as wages
and salaries) are incorrectly capitalised or inaccurately
recorded.
We obtained and reviewed the paper prepared by
management in relation to the capitalised costs.
We obtained the underlying schedules for the capitalised
costs and tested the appropriateness and accuracy of
the calculations by corroborating, for a sample of
individuals, the amounts to payroll records.
We agreed, and challenged, on a sample basis, that the
proportion of internal employee costs capitalised was
appropriate based upon their roles and responsibilities
and contracts of employment.
In addition, we obtained and reviewed project budgets
to confirm that the development meets the capitalisation
criteria stated within IAS 38.
In addition, we interviewed IT managers and engineers in
order to validate the percentage of time capitalised per
employee.
We evaluated the disclosures included within the
financial statements relating to capitalised development
costs and found them to be appropriate and complete.
We did not identify any material issues in our work in this
area.
The Pebble Group plc Annual Report 2023
101
FINANCIAL STATEMENTS
Independent auditors’ report to the members of The Pebble Group plc
Report on the audit of the financial statements
Key audit matter
How our audit addressed the key audit matter
Risk of impairment of investments in subsidiaries
and amounts owed by group undertakings (parent)
The company has investments in subsidiaries of £113.6m
(2022: £113.3m) and amounts owed by group undertakings
of £78.3m (2022: £80.9m). Given the magnitude of both of
these balances we considered the risk of impairment of
these assets.
Management performed an impairment assessment, for
both balances, and have concluded that no impairments are
required.
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 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
Revenue contribution: The Pebble Group plc, Brand
Addition UK, Brand Addition US and Facilisgroup US.
We also audited material consolidation journals. All audit
work was performed by the group audit team.
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The Pebble Group plc Annual Report 2023
In assessing the appropriateness of valuation of
investment in subsidiaries and amounts owed by group
undertakings we have performed the following
procedures:
We compared the overall carrying value of the
investments to the group’s market capitalisation. As this
was a trigger for impairment, we also reviewed
managements Value in use model prepared for the
purposes of assessing impairment.
We recalculated historic growth rates and EBITDA
margins, within managements impairment model, and
noted that the forecasted rates are in line with historic
rates and are deemed to be achievable.
Initial models provided by management did not indicate
an impairment of the goodwill balance. We challenged
management on their assumptions and we were provided
with additional sensitivities, which were challenged
further but ultimately indicated no impairment.
We inspected the results of P1 and P2 against forecast
for the year to Dec-24, and noted that the business is
exceeding forecasted results of revenue and EBITDA
levels for the year to date.
Based on the above procedures we concluded that there
was no impairment to the carrying value of investments.
We evaluated management’s assessment of the
recoverability of amounts owed by group undertakings
including assessing the ability of other group companies
to settle the intercompany balances; and
We also assessed the adequacy of the disclosure
provided in the company financial statements in relation
to the relevant accounting standards.
We found no exceptions as a result of our procedures
and consider the recoverability of amounts owed by
group undertakings to be appropriate.
As a result of this scoping we obtained coverage over 82%
of group revenue, 86% of group profit before tax and 84%
of group Adjusted EBITDA.
The impact of climate risk on our audit
As part of our audit we made enquiries of management toAs
part of our audit we made enquiries of management to
understand the process they have adopted to assess the
extent of the potential impact of climate risk on the group’s
financial statements.
The group continues to develop its assessment of the
potential impacts of environmental, social and governance
(ESG) related risks, including climate change, as outlined in
the Strategic report on pages 26 to 44.
The directors have reached the overall conclusion that
there has been no material impact on the financial
statements for the current year from the potential impact
of climate change.
We used our knowledge of the group, with assistance from
our internal climate experts, to challenge management’s
assessment. We particularly considered how climate risk
would impact the assumptions made in the forecasts
prepared by management used in their impairment analyses
and going concern. We also considered the consistency of
the disclosures in relation to climate change (including the
disclosures in the Task Force on Climate-related Financial
Disclosures (TCFD) section) within the Annual Report with
the financial statements and our knowledge obtained from
our audit.
Our procedures did not identify any material impact in the
context of our audit of the financial statements as a whole,
or on our key audit matters for the year ended 31 December
2023.
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:
Financial statements - group
Financial statements - company
Overall materiality
How we determined it
£931,283 (2022: £451,050).
£838,154 (2022: £405,945).
0.75% of Revenue (2022: based on 2.5%
of Adjusted EBITDA)
1% of total assets, restricted to 90% of
Group financial statement materiality
Rationale for benchmark applied
Based on the benchmarks used in the
Annual Report, Revenue is the primary
measure used by the shareholders in
assessing the performance of the group.
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 in line with PwC guidance.
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 £735,000 and £837,900. 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% (2022: 75%) of overall materiality, amounting to
£698,462 (2022: £338,287) for the group financial
statements and £628,615 (2022: £304,458) 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 £46,564 (group audit) (2022: £22,552) and
£41,907 (company audit) (2022: £20,297) 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 2025;
• 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 2023 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 2025;
• 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 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
The Pebble Group plc Annual Report 2023
103
FINANCIAL STATEMENTS
Independent auditors’ report to the members of The Pebble Group plc
Report on the audit of the financial statements
conditions for at least 12 months from the date of the
approval of financial statements; and
• 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.
104
The Pebble Group plc Annual Report 2023
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 2023 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’ 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.
Based on our understanding of the group and industry, we
identified that the principal risks of non-compliance with
laws and regulations related to health and safety
regulations, environmental laws and employment law, 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 corporate 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 operating profit, 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;
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.
• reviewing minutes of meetings of those charged with
governance, where available;
We have no exceptions to report arising from this
responsibility.
• incorporating an element of unpredictability into our audit
procedures;
• identifying and testing journal entries, in particular journal
entries posted with unusual account combinations; 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.
Jonathan Studholme
(Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Manchester
18 March 2024
The Pebble Group plc Annual Report 2023
105
FINANCIAL STATEMENTS
Consolidated income statement
For the year ended 31 December 2023
Revenue
Cost of goods sold
Gross profit
Operating expenses
Operating profit
Analysed as:
Adjusted EBITDA1
Depreciation
Amortisation
Share-based payment charge
Total operating profit
Finance expense
Profit before taxation
Income tax expense
Profit for the year
Basic earnings per share
Diluted earnings per share
Note
4
5
5
14
13
25
7
9
10
10
2023
£'000
124,171
(69,988)
54,183
(46,185)
2022
£'000
134,025
(81,279)
52,746
(42,523)
7,998
10,223
15,978
(2,248)
(5,184)
(548)
7,998
(589)
7,409
(1,614)
5,795
3.46p
3.45p
18,042
(2,384)
(4,182)
(1,253)
10,223
(520)
9,703
(2,090)
7,613
4.55p
4.54p
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.
106
The Pebble Group plc Annual Report 2023 Consolidated statement of other comprehensive income
For the year ended 31 December 2023
Items that may be subsequently reclassified to profit and loss
Foreign operations – foreign currency translation differences
Other comprehensive (expense)/income for the year
Profit for the year
Total comprehensive income for the year
2023
£'000
2022
£'000
(2,068)
(2,068)
5,795
3,727
2,190
2,190
7,613
9,803
107
The Pebble Group plc Annual Report 2023 Consolidated statement of financial position
As at 31 December 2023
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
Total current liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY AND RESERVES
Share capital
Share premium
Own share reserve
Capital reserve
Merger reserve
Translation reserve
Share-based payment reserve
Retained earnings
TOTAL EQUITY AND RESERVES
Note
2023
£'000
2022
£'000
13
14
15
16
17
18
19, 21
15
20, 21
20
20
22
22
61,307
8,306
282
69,895
11,852
30,158
15,898
57,908
60,002
9,492
292
69,786
15,447
34,693
15,058
65,198
127,803
134,984
6,130
2,365
8,495
1,494
28,965
381
30,840
39,335
88,468
1,675
78,451
(227)
125
7,490
2,860
10,350
1,569
36,413
1,063
39,045
49,395
85,589
1,675
78,451
–
125
(103,581)
(103,581)
(1,205)
2,005
111,225
863
1,892
106,164
88,468
85,589
The notes on pages 111-138 are an integral part of these financial statements.
The financial statements on pages 106-138 were approved by the Board of Directors and authorised for issue on 18 March
2024, and were signed on its behalf by:
Claire Thomson
Director
18 March 2024
108
FINANCIAL STATEMENTSThe Pebble Group plc Annual Report 2023 Consolidated statement of changes in equity
For the year ended 31 December 2023
Share
capital
£'000
Share
premium
£'000
Own share
reserve
£'000
Capital
reserve
£'000
Merger
reserve
£'000
Translation
reserve
£'000
Share-based
payment
reserve
£'000
Retained
earnings
£'000
Total
equity
£'000
At 1 January 2022
1,675
78,451
Profit for the year
Other comprehensive
income for the year
Total comprehensive
income
Employee share schemes
– value of employee
services (note 25)
Deferred tax on employee
share schemes (note 15)
Total transactions with
owners recognised in
equity
–
–
–
–
–
–
–
–
–
–
–
–
At 31 December 2022
1,675
78,451
Profit for the year
Other comprehensive
expense for the year
Total comprehensive
(expense)/income
Dividend paid (note 12)
Purchase of own shares
by EBT
Employee share schemes
– value of employee
services (note 25)
Deferred tax on employee
share schemes (note 15)
Total transactions with
owners recognised in
equity
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
At 31 December 2023
1,675
78,451
–
–
–
–
–
–
–
–
–
–
–
–
(395)
168
–
(227)
(227)
125
(103,581)
(1,327)
681
98,551
74,575
–
–
–
–
–
–
–
–
–
–
–
–
–
2,190
2,190
–
–
–
7,613
7,613
–
2,190
7,613
9,803
–
–
–
1,196
15
1,211
–
–
–
1,196
15
1,211
125
(103,581)
863
1,892
106,164
85,589
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(2,068)
(2,068)
–
–
–
–
–
–
–
–
–
–
5,795
5,795
–
(2,068)
5,795
3,727
(1,005)
(1,005)
–
(395)
136
(23)
271
–
575
(23)
113
(734)
(848)
125 (103,581)
(1,205)
2,005
111,225
88,468
The notes on pages 111-138 are an integral part of these financial statements.
The Group set up an Employee Benefit Trust (EBT) in the year to administer share plans and acquire shares, using funds
gifted by the Group, to meet commitments to employee share schemes. At 31 December 2023, the EBT held 412,637
shares (2022: nil).
109
The Pebble Group plc Annual Report 2023 Consolidated cash flow statement
For the year ended 31 December 2023
Profit before taxation
Adjustments for:
Depreciation
Amortisation
Share-based payment charge
(Profit)/loss on disposal of fixed assets
Finance expense
Cash flows from operating activities before changes in working capital
Change in inventories
Change in trade and other receivables
Change in trade and other 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
Dividends paid
Purchase of own shares by EBT
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 111-138 are an integral part of these financial statements.
Note
14
13
25
7
16
17
20
14
13
7
12
2023
£'000
7,409
2,248
5,184
548
(18)
589
15,960
3,595
4,535
(7,422)
16,668
(2,517)
14,151
(882)
(7,648)
(8,530)
(1,600)
(589)
(1,005)
(395)
(3,589)
2,032
15,058
(1,192)
18
15,898
2022
£'000
9,703
2,384
4,182
1,253
19
520
18,061
(5,354)
(5,271)
7,263
14,699
(1,712)
12,987
(945)
(7,434)
(8,379)
(1,737)
(520)
–
–
(2,257)
2,351
12,051
656
15,058
110
FINANCIAL STATEMENTSThe Pebble Group plc Annual Report 2023 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 digital
commerce, products and related services 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 digital
commerce, 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. The Group refinanced its £10m RCF in
January 2023 for a three-year period to January 2026, with
the option to extend for an additional year to January 2027.
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 2025.
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 at least 12 months from the date of signing the
financial statements. 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 its annual reporting
period commencing 1 January 2023:
• IFRS 17 Insurance Contracts;
• Amendment to IAS 12 Deferred tax: deferred tax related to
assets and liabilities arising from a single transaction;
• Amendment to IAS 12 International tax reform – pillar two
model rules; and
• Narrow-scope amendments to IAS 1, Practice statement 2
and IAS 8.
The amendments listed above do not have any impact on
the amounts recognised in prior periods and are not
expected to significantly affect 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
2023 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.
111
The Pebble Group plc Annual Report 2023 Notes to the Group financial statements
(continued)
2. Accounting policies (continued)
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.
Employee Benefit Trust (EBT)
The Group established an EBT (The Pebble Group Employee
Benefit Trust) on 2 May 2023 to enable shares to be bought
in the market to satisfy the demand from share awards
under the Group’s employee share schemes. The EBT is a
separately administered trust and is funded by contributions
from Group companies in the form of a loan or a gift. The
assets of the trust comprise shares in The Pebble Group plc
and cash balances. The Group recognises the assets and
liabilities of the trust in the consolidated financial
statements and shares held by the trust are recorded in the
own share reserve as a deduction from shareholders’
equity. As at 31 December 2023, the EBT held 412,637
shares in the Company.
(f) Revenue
Revenue arises from the provision of services through
digital commerce 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.
Facilisgroup provision of digital commerce,
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
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.
Revenue earned from Preferred Suppliers is recognised
over time on a monthly basis in line with orders placed by
112
Partners with these suppliers. Payments are received
biannually.
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 trade receivables in the
statement of financial position. A small number of
customers are invoiced in advance and these amounts are
deferred and presented within contract liabilities.
(g) Supplier rebates
In the Brand Addition segment, amounts due under rebate
agreements are recognised based upon volumes of
products purchased during the period to which the rebates
relate at the relevant rebate rates, per supplier agreements.
Amounts are credited to the cost of purchase of goods for
resale and any accrued income is included in other
receivables.
(h) Alternative performance measures
Throughout the Annual Report, we refer to a number of
alternative performance measures (APMs). APMs are used
internally by management to assess the operating
performance of the Group. These are non-GAAP measures
and so other entities may not calculate these measures in
the same way and hence are not directly comparable. The
APMs that are not recognised under UK-adopted
international accounting standards are:
• Adjusted earnings;
• Adjusted EBITDA;
• Adjusted operating profit; and
• Adjusted operating profit less finance costs.
See note 11 for the reconciliation of the APMs.
The Board considers that the above APMs provide useful
information for stakeholders on the underlying trends and
performance of the Group and facilitate meaningful year on
year comparisons.
(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.
The Pebble Group plc Annual Report 2023FINANCIAL STATEMENTS 2. Accounting policies (continued)
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.
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. 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 13.
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; and
• Software and development costs – 3-5 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.
113
The Pebble Group plc Annual Report 2023 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 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
and rewards of ownership of the financial asset are
transferred. The basis of classification depends on the
114
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.
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 Pebble Group plc Annual Report 2023FINANCIAL STATEMENTS 2. Accounting policies (continued)
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 the
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 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.
Gains and losses on disposals are determined by comparing
proceeds with carrying amount. These are included in profit
or loss.
Depreciation is calculated using straight-line method 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; and
• 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.
The Group presents right-of-use assets within property,
plant and equipment in note 14.
Short-term leases and low value assets
The Group has elected not to recognise right-of-use assets
and lease liabilities for short-term leases 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.
115
The Pebble Group plc Annual Report 2023 Notes to the Group financial statements
(continued)
2. Accounting policies (continued)
(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 digital commerce, 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, who have 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.
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.
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 other
payables 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.
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.
116
(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 the US, a benefit of $0.3m has been
received and credited to the income statement in 2023.
This relates to the Employee Retention Credit available to
certain eligible businesses that had employees and were
affected during the Covid-19 pandemic. There are no
unfulfilled conditions or other contingencies attached to
this grant. In 2022, a benefit of £0.02m was received in
Germany in relation to Bridging Assistance for companies
that have suffered a decline in revenue as a result of the
pandemic.
(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.
Own share reserve
Own share reserve represents Ordinary Shares in the
Company held by the Employee Benefit Trust set up in 2023
to administer share plans and acquire shares, using funds
contributed by the Group, to meet commitments to
employee share schemes.
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.
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.
The Pebble Group plc Annual Report 2023FINANCIAL STATEMENTS 2. Accounting policies (continued)
Dividends
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 (2022: £nil). The Directors recommend the
payment of a final dividend for 2023 of 1.2 pence per share
(2022: 0.6 pence per share).
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. As part of these calculations,
we have considered various sensitivities, explained in note
13. A 1% increase in the Weighted Average Cost of Capital
(WACC) would reduce the total value in use by £21.5m
(2022: £25.7m).
Goodwill relates to the various acquisitions made and
amounts to £35,964,000 as at 31 December 2023 (2022:
£36,139,000). The estimates used in the impairment
calculation are set out in note 13. There is no significant risk
of material adjustment to the carrying amount of the
goodwill within the next 12 months. The sensitivities applied
are explained in note 13.
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 12 months.
No reasonable sensitivity performed in relation to the useful
economic lives assumption would result in a material change
in the carrying value of intangible assets.
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 the
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 12 months.
The useful economic lives applied are set out in the
accounting policies and are reviewed annually. No
reasonable sensitivity performed in relation to the useful
economic lives assumption would result in a material change
in the carrying value of property, plant and equipment.
Share-based payment charge
Fair values used in calculating the amount to be expensed as
a share-based payment is subject to a level of uncertainty.
These fair values are calculated by applying a valuation
model, which is in itself judgemental, and takes into account
certain inherently uncertain assumptions. The basic
assumptions that are used in the calculations are explained
further in note 25. No reasonable sensitivity performed in
relation to the share-based payment assumptions would
result in a material change to the expense in the
consolidated income statement.
(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. There is
also some judgement required in relation to the proportion
of time capitalised for employees working on the
development of internally generated intangible assets. 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 13.
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
financial statements, are:
• Brand Addition – sale of promotional product through
complex services provided under framework contracts on
an international basis;
• Facilisgroup – provision of digital commerce, consolidated
buying power and community learning and networking
events to SME promotional product distributors in North
America through subscription-based services; and
• Central operations – certain central activities and costs
that are not directly related to the activities of the
operating segments.
Segment information about the above businesses is
presented on the following pages.
117
The Pebble Group plc Annual Report 2023 Notes to the Group financial statements
(continued)
4. Segmental analysis (continued)
The Executive Directors assess the performance of the operating segments based on Adjusted EBITDA and operating profit.
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.
Major customers
In 2023, there was one major customer that individually accounted for at least 10% of total revenues (2022: none). In 2023,
the revenue relating to this customer was £12,511,000 and related to the Brand Addition segment.
Analysis of revenue by geographical destination
United Kingdom
Continental Europe
US
Rest of World
Total revenue
2023
£’000
21,710
41,896
39,924
20,641
2022
£’000
22,570
47,236
43,189
21,030
124,171
134,025
The geographical revenue information above is based on the location of the customer.
Included within Rest of World is £14,378,000 of revenue from China (2022: £14,247,000).
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
2023
£’000
107,128
17,043
2022
£’000
118,507
15,518
124,171
134,025
All non-current assets of the Group reside in the UK, with the exception of non-current assets with a net book value of
£31,525,000 (2022: £31,250,000) which were located in North America and £2,006,000 (2022: £2,451,000) located in other
foreign countries.
Income statement for the year ended 31 December 2023
Brand
Addition
£’000
106,276
(69,988)
Facilisgroup
£’000
17,895
–
36,288
17,895
Central
operations
£’000
–
–
–
(30,084)
(13,514)
(2,587)
6,204
4,381
(2,587)
9,491
(1,640)
(1,335)
(312)
6,204
(345)
5,859
(891)
4,968
8,851
(571)
(3,849)
(50)
(2,364)
(37)
–
(186)
4,381
(2,587)
(67)
4,314
(700)
3,614
(177)
(2,764)
(23)
(2,787)
2023
£’000
124,171
(69,988)
54,183
(46,185)
7,998
15,978
(2,248)
(5,184)
(548)
7,998
(589)
7,409
(1,614)
5,795
Revenue
Cost of goods sold
Gross profit
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
Profit/(loss) for the year
118
The Pebble Group plc Annual Report 2023FINANCIAL STATEMENTS 4. Segmental analysis (continued)
Statement of financial position as at 31 December 2023
Brand
Addition
£’000
Facilisgroup
£’000
Central
operations
£’000
2023
£’000
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
38,472
5,269
158
22,835
2,803
–
43,899
25,638
11,852
24,956
12,906
49,714
93,613
4,161
–
4,161
1,195
26,519
(202)
27,512
31,673
61,940
–
4,921
1,607
6,528
32,166
1,969
2,365
4,334
299
2,006
583
2,888
7,222
–
234
124
358
–
281
1,385
1,666
2,024
–
–
–
–
440
–
440
440
24,944
1,584
61,307
8,306
282
69,895
11,852
30,158
15,898
57,908
127,803
6,130
2,365
8,495
1,494
28,965
381
30,840
39,335
88,468
119
The Pebble Group plc Annual Report 2023 Notes to the Group financial statements
(continued)
4. Segmental analysis (continued)
Income statement for the year ended 31 December 2022
Revenue
Cost of goods sold
Gross profit
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
117,391
(81,279)
Facilisgroup
£’000
16,634
–
36,112
16,634
Central
operations
£’000
–
–
–
2022
£’000
134,025
(81,279)
52,746
(28,155)
(11,624)
(2,744)
(42,523)
7,957
5,010
(2,744)
10,223
11,467
(1,719)
(1,232)
(559)
7,957
(388)
7,569
(1,495)
6,074
9,011
(626)
(2,950)
(425)
(2,436)
(39)
–
(269)
18,042
(2,384)
(4,182)
(1,253)
5,010
(2,744)
10,223
(13)
4,997
(689)
4,308
(119)
(520)
(2,863)
94
9,703
(2,090)
(2,769)
7,613
120
The Pebble Group plc Annual Report 2023FINANCIAL STATEMENTS 4. Segmental analysis (continued)
Statement of financial position as at 31 December 2022
Brand
Addition
£’000
Facilisgroup
£’000
Central
operations
£’000
2022
£’000
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
Total current liabilities
TOTAL LIABILITIES
NET ASSETS/(LIABILITIES)
37,863
6,449
137
22,139
3,004
–
44,449
25,143
15,447
29,989
12,655
58,091
–
4,648
2,265
6,913
102,540
32,056
5,148
–
5,148
1,221
33,543
258
35,022
40,170
62,370
2,315
2,860
5,175
303
2,075
805
3,183
8,358
–
39
155
194
–
56
138
194
388
27
–
27
45
795
–
840
867
60,002
9,492
292
69,786
15,447
34,693
15,058
65,198
134,984
7,490
2,860
10,350
1,569
36,413
1,063
39,045
49,395
23,698
(479)
85,589
121
The Pebble Group plc Annual Report 2023 Notes to the Group financial statements
(continued)
5. Expenses by nature
Inventory recognised as an expense
Other cost of sales
Total cost of goods sold
Staff costs (note 6)
Depreciation of property, plant and equipment (note 14)
Amortisation of intangible assets (note 13)
Auditors’ remuneration (note 8)
Share-based payment charge (note 25)
Foreign exchange (gain)/loss and movement in foreign exchange derivative contracts
Increase in provision for expected credit losses
Other external charges
Total operating expenses
2023
£’000
61,777
8,211
69,988
27,496
2,248
5,184
406
548
(146)
9
10,440
46,185
2022
£’000
71,649
9,630
81,279
25,769
2,384
4,182
310
1,253
65
34
8,526
42,523
Total cost of sales and operating expenses
116,173
123,802
Depreciation and amortisation are charged to operating expenses in the income statement.
Other external charges include a credit of £260,000 (2022: £24,000) from the use of Government schemes.
2023
£’000
2022
£’000
23,744
2,972
780
27,496
22,423
2,666
680
25,769
2022
£’000
5,749
31
17
5,797
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
Additional staff costs of £6,626,000 (2022: £5,797,000) have been capitalised as intangible assets (see note 13).
2023
£’000
6,055
455
116
6,626
Wages and salaries
Social security costs
Other pension costs
Total staff costs
122
The Pebble Group plc Annual Report 2023FINANCIAL STATEMENTS 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
£780,000 (2022: £680,000). Included within accruals and other payables is £98,000 (2022: £81,000) 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
2023
No.
21
316
240
577
2022
No.
17
287
252
556
Key management compensation
Key management of the Group is considered to be the Board of Directors. Details of Directors’ remuneration is disclosed in
the Directors’ Remuneration report on pages 86-95. Remuneration paid to these individuals on an aggregated basis is as
follows:
Salaries including bonuses and social security costs
Short-term benefits
Total remuneration
2023
£’000
855
21
876
2022
£’000
943
27
970
Key management compensation also includes amounts in respect of the LTIP, as disclosed in the Directors’ Remuneration
report on pages 86-95.
7. Finance expense
Other interest
Unwind of discount finance costs on lease liabilities
Total finance expense
8. 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
2023
£’000
190
399
589
2023
£’000
161
245
406
2022
£’000
146
374
520
2022
£’000
105
205
310
123
The Pebble Group plc Annual Report 2023 Notes to the Group financial statements
(continued)
9. 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
Total deferred tax
Total income tax expense
2023
£’000
2022
£’000
575
(337)
1,652
1,890
(413)
137
(276)
901
(159)
1,822
2,564
(426)
(48)
(474)
1,614
2,090
The expected corporation tax charge for the year is calculated at the UK corporation tax rate of 23.5% (2022: 19%) on the
profit before taxation for the year. Taxation for other jurisdictions is calculated at the rates prevailing in the respective
jurisdictions in which the Group operates.
The charge for the year can be reconciled to the profit in the consolidated income statement as follows:
Analysis of charge in year
Reconciliation of total tax charge:
Profit before taxation
Profit before taxation multiplied by the rate of corporation tax in the UK of 23.5% (2022: 19%)
Effects of:
Adjustments in respect of prior years
Impact of difference in current and deferred tax rates in the UK
Non-deductible (income)/expenses
Differences in tax rates in overseas jurisdictions
Unrecognised for deferred tax
Total income tax expense
2023
£’000
7,409
1,741
(200)
–
(27)
100
–
2022
£’000
9,703
1,844
(207)
13
32
286
122
1,614
2,090
Factors that may affect future tax charges
An increase in the UK corporation tax rate from 19% to 25% from 1 April 2023. This change was substantively enacted on
24 May 2021. The impact of this rate change has been considered when recognising the deferred tax in relation to the UK
companies in the Group. Where the asset or liability is expected to unwind after 1 April 2023, the deferred tax has been
recognised at 25%.
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 (charged)/credited to equity:
Deferred tax: (charge)/credit relating to employee share schemes – value of employee services
2023
£’000
(23)
2022
£’000
15
124
The Pebble Group plc Annual Report 2023FINANCIAL STATEMENTS 10. 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 Pebble Group plc Long Term Incentive Plan (LTIP), 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 25, are satisfied at the end of the reporting period, irrespective of whether this is the end of the vesting period
or not.
The impact of the potentially dilutive share options issued under the LTIP on 21 December 2020, 8 June 2021, 29 March
2022, and 28 March 2023 and the SAYE on 6 October 2021 and 25 April 2023, as detailed in note 25, is 0.01p for the year
ended 31 December 2023 (2022: 0.01p).
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)
2023
2022
5,795
7,613
167,412,949 167,450,893
185,624
167,858,853 167,636,517
445,904
3.46
3.45
4.55
4.54
Adjusted EPS
The calculation of adjusted earnings per share is based on the after-tax adjusted profit after adding back certain costs as
detailed in the table in note 11. 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)
See note 11 for the reconciliation of adjusted earnings.
2023
2022
7,708
9,675
167,412,949 167,450,893
185,624
167,858,853 167,636,517
445,904
4.60
4.59
5.78
5.77
125
The Pebble Group plc Annual Report 2023 Notes to the Group financial statements
(continued)
11. Alternative performance measures (APMs)
Throughout the consolidated financial statements, we refer to a number of APMs. A reconciliation of the APMs used are
shown below.
Adjusted earnings:
Profit for the year attributable to equity shareholders
Add back/(deduct):
Amortisation charge on acquired intangible assets
Share-based payment charge
Tax effect of the above
Adjusted earnings
Adjusted EBITDA:
Operating profit
Add back:
Depreciation
Amortisation
Share-based payment charge
Adjusted EBITDA
Adjusted operating profit:
Operating profit
Add back:
Amortisation charge on acquired intangible assets
Share-based payment charge
Adjusted operating profit
Adjusted operating profit less finance costs:
Adjusted operating profit
Deduct:
Finance expense
Adjusted operating profit less finance costs
12. Dividends paid and proposed
Declared and paid during the year
Final dividend for 2022 paid in June 2023: 0.6p per share
Proposed for approval at AGM (not recognised as a liability at 31 December)
Final dividend for 2023: 1.2p per share (2022: 0.6p per share)
2023
£’000
5,795
1,901
548
(536)
7,708
2023
£’000
7,998
2,248
5,184
548
2022
£’000
7,613
1,420
1,253
(611)
9,675
2022
£’000
10,223
2,384
4,182
1,253
15,978
18,042
2023
£’000
7,998
1,901
548
2022
£’000
10,223
1,420
1,253
10,447
12,896
2023
£’000
2022
£’000
10,447
12,896
(589)
9,858
(520)
12,376
2023
£’000
2022
£’000
1,005
–
2,004
1,005
As per the Trust Deed, the EBT shall waive its entitlement to a dividend on the shares held of 412,637 shares.
126
The Pebble Group plc Annual Report 2023FINANCIAL STATEMENTS 13. Intangible assets
Cost
Balance at 1 January 2022
Foreign exchange translation
Additions
Disposals
Reclassifications
Balance at 31 December 2022
Foreign exchange translation
Additions
Disposals
Reclassifications
Balance at 31 December 2023
Accumulated amortisation
Balance at 1 January 2022
Foreign exchange translation
Charge for the year
Disposals
Balance at 31 December 2022
Foreign exchange translation
Charge for the year
Disposals
Balance at 31 December 2023
Net book value
Balance at 31 December 2021
Balance at 31 December 2022
Balance at 31 December 2023
Goodwill
£’000
Customer
relationships
£’000
Software and
development
costs
£’000
Work in
progress
£’000
35,805
10,241
21,321
334
1,081
–
–
–
–
–
–
1,643
2,347
(926)
492
423
39
4,115
–
(492)
Total
£’000
67,790
3,097
6,462
(926)
–
36,139
11,322
24,877
4,085
76,423
(175)
(554)
–
–
–
–
–
–
(672)
661
(186)
(195)
6,987
–
4,200
(4,200)
(1,596)
7,648
(186)
–
35,964
10,768
28,880
6,677
82,289
–
–
–
–
–
–
–
–
–
1,647
10,469
171
554
–
878
3,628
(926)
2,372
14,049
(123)
550
–
(345)
4,634
(155)
2,799
18,183
–
–
–
–
–
–
–
–
–
12,116
1,049
4,182
(926)
16,421
(468)
5,184
(155)
20,982
35,805
36,139
35,964
8,594
8,950
7,969
10,852
10,828
10,697
423
55,674
4,085
6,677
60,002
61,307
Staff costs of £6,626,000 (2022: £5,797,000) have been capitalised as intangible assets. The net book value of internally
generated assets is £13,785,000 (2022: £9,941,000).
The remaining amortisation periods for customer relationships are between 13 and 15 years (2022: 14 and 16 years) and for
software and development costs are between 1 and 5 years (2022: 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 2024 to 2028 were used. For Brand Addition,
these were based on a forecast for 2024 with growth rates of 6% applied to EBITDA each year. For Facilis, these were based
on forecasts for 2024 to 2025, with growth rates of 20% applied to revenue each year and an EBITDA return of 50% for 2026
and 55% for 2027 and 2028. Subsequent years were based on a reduced rate of growth of 2.0% (2022: 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.
127
The Pebble Group plc Annual Report 2023 Notes to the Group financial statements
(continued)
13. Intangible assets (continued)
The Directors used an estimated pre-tax market weighted average cost of capital (WACC) of 12.6% for Brand Addition and
13.9% for Facilisgroup (2022: 12.4% for Brand Addition and 13.6% for Facilisgroup) to discount the cash flows used for the
CGUs. Sensitivities to revenue and margin, consistent with those used in the going concern analysis, were applied to each
CGU. Additionally, the impact on headroom arising from a 2% increase in the WACC was also considered. 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 adequate headroom and therefore do not give rise to impairment concerns.
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
2023
£’000
33,057
2,907
35,964
2022
£’000
33,057
3,082
36,139
The value in use, calculated as described on the previous page and attributable to each CGU, is as follows:
Brand Addition
Facilisgroup
2023
£’000
102,824
98,560
2022
£’000
102,824
123,798
201,384
226,622
The revenue and margin sensitivities described above, result in a reduction in the total value in use to £105,013,000. The
WACC sensitivity described above, results in a reduction in the total value in use to £162,373,000. Under both sensitivities,
there is headroom for both CGUs.
Management considers that no reasonably possible changes would reduce either CGUs headroom to £nil. The reduction
from prior year is driven by revenue growth phasing for Facilis new products, in addition to the increase in WACC.
128
The Pebble Group plc Annual Report 2023FINANCIAL STATEMENTS 14. Property, plant and equipment
Cost
Balance at 1 January 2022
Foreign exchange translation
Additions
Disposals
Balance at 31 December 2022
Foreign exchange translation
Additions
Disposals
Balance at 31 December 2023
Accumulated depreciation
Balance at 1 January 2022
Foreign exchange translation
Charge for the year
Disposals
Balance at 31 December 2022
Foreign exchange translation
Charge for the year
Disposals
Balance at 31 December 2023
Net book value
Balance at 31 December 2021
Balance at 31 December 2022
Balance at 31 December 2023
Right-of-use assets – net book value
Leasehold property
Fixtures and fittings
Computer hardware
Total right-of-use assets – net book value
Fixtures and
fittings
£’000
Computer
hardware
£’000
Right-of-use
assets
£’000
Total
£’000
3,892
3,226
12,784
19,902
216
327
(880)
146
618
783
2,471
1,145
3,416
(1,319)
(2,240)
(4,439)
3,555
2,671
13,798
20,024
(118)
245
–
(74)
626
(350)
(394)
516
(477)
(586)
1,387
(827)
3,682
2,873
13,443
19,998
6,519
339
1,700
3,133
2,323
154
233
(880)
98
451
(1,300)
(2,238)
2,640
1,572
(81)
278
–
(48)
465
(345)
6,320
(143)
1,505
(471)
11,975
591
2,384
(4,418)
10,532
(272)
2,248
(816)
2,837
1,644
7,211
11,692
759
915
845
903
1,099
1,229
6,265
7,478
6,232
2023
£’000
5,943
100
189
6,232
7,927
9,492
8,306
2022
£’000
7,362
87
29
7,478
129
The Pebble Group plc Annual Report 2023 Notes to the Group financial statements
(continued)
15. Deferred tax assets and liabilities
Deferred tax assets/(liabilities) are analysed as follows:
Accelerated
depreciation
£’000
Intangible
fixed assets
£’000
Share options
£’000
Short-term
timing
differences
£’000
Transitional
relief
on IFRS 16
adoption
£’000
Losses and
unused
tax relief
£’000
Total
£’000
Balance at 1 January 2022
Tax (charge)/credit in respect of
current year
Tax directly credited to equity
Foreign exchange translation
Balance at 31 December 2022
Tax credit/(charge) in respect of
current year
Tax directly charged to equity
Foreign exchange translation
(1,556)
(1,587)
(13)
–
(127)
102
–
(195)
(1,696)
(1,680)
262
–
156
102
–
92
Balance at 31 December 2023
(1,278)
(1,486)
220
160
15
–
395
(16)
(23)
(8)
348
15
–
–
–
15
138
–
–
153
173
(34)
–
–
139
(34)
–
–
105
–
(2,735)
259
–
–
474
15
(322)
259
(2,568)
(176)
–
(8)
75
276
(23)
232
(2,083)
The above are disclosed in the statement of the financial position as a deferred tax asset of £282,000 (2022: £292,000)
and a deferred tax liability of £(2,365,000) (2022: £(2,860,000)) resulting in a net deferred tax position of £(2,083,000)
(2022: £(2,568,000)), as analysed above.
The above amounts reflect the differences between the carrying and tax amounts as at each year end.
Of the deferred tax balances at 31 December 2023, £214,000 (2022: £34,000) of the deferred tax asset and £788,000
(2022: £508,000) of the deferred tax liability are expected to be utilised within one year.
There are unrecognised deferred tax assets relating to capital losses of £9,900,000 (2022: £9,900,000) and in respect of
trading losses of £657,000 (2022: £657,000). The Directors have assessed at this time 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.
16. Inventories
Finished goods for resale
Total inventories
Inventories are stated after provisions for impairment of £375,000 (2022: £292,000).
There is no difference between the replacement cost of inventories and carrying value.
2023
£’000
11,852
11,852
2022
£’000
15,447
15,447
130
The Pebble Group plc Annual Report 2023FINANCIAL STATEMENTS
17. 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
Other debtors
Prepayments
Total trade and other receivables
Other debtors include amounts relating to other taxes and social security and supplier rebates.
Currency analysis
Sterling
Euro
US Dollar
Chinese Renminbi
Other
Total trade and other receivables
2023
£’000
2022
£’000
19,222
5,782
(60)
24,944
2,060
3,154
30,158
2023
£’000
5,222
9,199
12,380
2,042
1,315
30,158
24,440
5,901
(73)
30,268
2,002
2,423
34,693
2022
£’000
8,054
10,419
12,234
2,800
1,186
34,693
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 loss 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 certain financial assets (which comprise trade receivables and other debtors) is analysed below.
Trade and other receivables:
Not yet due
Up to 3 months overdue
3 to 6 months past due
Over 6 months past due
Gross
£’000
Provision
£’000
21,283
4,020
1,395
366
27,064
–
–
–
(60)
(60)
2023
Net
£’000
21,283
4,020
1,395
306
27,004
Gross
£’000
Provision
£’000
26,442
4,057
1,722
122
32,343
–
–
–
(73)
(73)
2022
Net
£’000
26,442
4,057
1,722
49
32,270
The Group uses objective evidence as well as considering forward-looking information, including macroeconomic factors,
and the probability of default when calculating expected credit losses. No significant changes to estimation techniques or
assumptions were made during the reporting period. 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.
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. Trade and other receivables are grouped based
on the days past due. 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.
131
The Pebble Group plc Annual Report 2023 Notes to the Group financial statements
(continued)
18. Cash and cash equivalents
Cash and cash equivalents
Currency analysis
Sterling
Euro
US Dollar
Other
Total cash and cash equivalents
19. Non-current liabilities
Lease liability (note 21)
Currency analysis
Sterling
Euro
US Dollar
Chinese Renminbi
Other
Total lease liability
20. Current liabilities
Lease liability (note 21)
Lease liability
Corporation tax
Current tax liability
Trade payables
Other taxation and social security
Other payables
FX derivative
Accruals
Contract liabilities
Trade and other payables
Total current liabilities
2023
£’000
2022
£’000
15,898
15,058
2023
£’000
1,592
7,363
5,616
1,327
2022
£’000
3,060
5,045
4,976
1,977
15,898
15,058
2023
£’000
6,130
2023
£’000
1,461
1,361
3,231
–
77
2022
£’000
7,490
2022
£’000
1,855
1,632
3,923
49
31
6,130
7,490
2023
£’000
1,494
1,494
381
381
17,351
279
577
8
5,022
5,728
28,965
30,840
2022
£’000
1,569
1,569
1,063
1,063
22,342
475
765
196
6,621
6,014
36,413
39,045
Revenues totalling £4,537,000 were recognised in the year ended 31 December 2023 that were included in the contract
liabilities balance as at 31 December 2022 (£4,460,000 recognised in the year ended 31 December 2022 that were included
in the contract liabilities balance as at 31 December 2021).
132
The Pebble Group plc Annual Report 2023FINANCIAL STATEMENTS 20. Current liabilities (continued)
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.
21. Leases
Amounts recognised in the statement of financial position
The statement of financial position shows the following amounts relating to leases:
Right-of-use assets
Balance at 1 January 2022
Foreign exchange translation
New leases recognised in the year
Disposals
Depreciation charge for the year
Balance at 31 December 2022
Foreign exchange translation
New leases recognised in the year
Disposals
Depreciation charge for the year
Balance at 31 December 2023
These are included within property, plant and equipment in the 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 liability at year end
Finance costs
Total discounted lease liability at year end
Current
Non-current
2023
£’000
8,447
8,375
12,156
1,429
433
30,840
2022
£’000
16,330
8,903
11,694
1,510
608
39,045
£’000
6,265
444
2,471
(2)
(1,700)
7,478
(251)
516
(6)
(1,505)
6,232
2022
£’000
1,897
1,726
1,627
1,624
1,091
2,207
10,172
(1,113)
9,059
1,569
7,490
9,059
133
2023
£’000
1,807
1,729
1,722
1,165
1,004
1,106
8,533
(909)
7,624
1,494
6,130
7,624
The Pebble Group plc Annual Report 2023 Notes to the Group financial statements
(continued)
21. Leases (continued)
Amounts recognised in the income statement
The income statement shows the following amounts relating to leases:
Depreciation charge – fixtures and fittings
Depreciation charge – computer hardware
Interest expense (within finance expense)
2023
£’000
1,451
54
1,505
399
2022
£’000
1,655
45
1,700
374
The above leases relate to office space, computer equipment and motor vehicles. The net book value by category is set
out in note 14.
Any expense for short-term and low value leases is not material and has not been presented.
22. Share capital
The authorised, issued and fully paid number of shares are set out below.
Ordinary
Shares
Number
Total share
capital
£
Share
premium
£
Ordinary Shares of 1p each:
At 1 January 2023 and 31 December 2023
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.
In 2023, the EBT purchased a total of 716,195 Ordinary Shares at a price of £0.55 per share, which were used to satisfy the
exercise of 303,558 LTIP options. The EBT did not sell any shares and the remaining 412,637 shares are held by the Trust.
23. Analysis and reconciliation of net cash/(debt)
1 January
2023
£’000
15,058
(9,059)
5,999
1 January
2022
£’000
12,051
(7,772)
4,279
New leases
£’000
–
(505)
(505)
New leases
£’000
-
(2,471)
(2,471)
Lease
disposals
£’000
–
60
60
Lease
disposals
£’000
-
2
2
Foreign
exchange
translation
£’000
(1,192)
280
(912)
31 December
2023
£’000
15,898
(7,624)
8,274
Foreign
exchange
translation
£’000
31 December
2022
£’000
656
(555)
101
15,058
(9,059)
5,999
Cash flow
£’000
2,032
1,600
3,632
Cash flow
£’000
2,351
1,737
4,088
Cash at bank and in hand
Lease liability
Net cash/(debt)
Cash at bank and in hand
Lease liability
Net cash/(debt)
134
The Pebble Group plc Annual Report 2023FINANCIAL STATEMENTS Credit risk
The Group's principal financial assets are cash, trade
receivables and other debtors. 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 17.
Liquidity risk
The Group seeks to manage the risk of being unable to
meet its obligations as they fall due by ensuring sufficient
liquidity is available and 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 Group has a cross-guarantee banking arrangement,
which is a revolving credit facility of £10,000,000 expiring in
January 2026, with the option to extend to January 2027.
Interest was charged at a rate of SONIA + 2.0%. As at
31 December 2023, the balance on the facility was £nil
(2022: £nil). There is also revolving credit facility of
10,000,000 RMB for Brand Addition (Shanghai) Trading Co.
Limited. As at 31 December 2023, the balance on the facility
was £nil (2022: £nil).
24. 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 17, 18, 19 and 20.
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 £576,000 (2022: £569,000) and net assets
would decrease by £3,597,000 (2022: £1,225,000). For a
10% weakening of the Sterling exchange rate, operating
profit would increase by £704,000 (2022: £696,000) and net
assets would increase by £4,399,000 (2022: £1,496,000).
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.
135
The Pebble Group plc Annual Report 2023 Notes to the Group financial statements
(continued)
24. 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
Cash and cash equivalents
Financial liabilities
Financial liabilities measured at amortised cost
Non-current:
Lease liability
Current:
Lease liability
Trade and other payables
Accruals
Financial liabilities measured at fair value through profit or loss
FX derivative liability
Net financial assets and liabilities
2023
£’000
2022
£’000
27,004
15,898
42,902
32,270
15,058
47,328
(6,130)
(7,490)
(1,494)
(17,928)
(5,022)
(1,569)
(23,107)
(6,621)
(30,574)
(38,787)
(8)
(196)
(30,582)
(38,983)
12,320
8,345
The maturity analysis for lease liabilities is presented in note 21. All other financial liabilities have a maturity of less than
12 months (i.e. are all current).
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 relates to cash and cash equivalents as disclosed on the previous page.
The Group is subject to interest cover and net leverage financial covenants over its £10,000,000 revolving credit facility.
The covenants are monitored as part of regular forecasting.
The only derivative financial instruments used by the Group are foreign currency forward contracts that are disclosed in
the table above. 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 $5,440,000 and
€11,500,000. The contracts mature within 1 to 12 months of the year end.
136
The Pebble Group plc Annual Report 2023FINANCIAL STATEMENTS 25. Share-based payments
In the year ended 31 December 2023, the Group operated equity-settled share-based payment plans as described below.
The Group recognised total expenses of £548,000 (2022: £1,253,000) in respect of equity-settled share-based payment
transactions in the year ended 31 December 2023.
The weighted average remaining contractual life of options outstanding at the end of the year is 1.33 years (2022:
1.40 years).
The Pebble Group plc Long Term Incentive Plan (LTIP)
Certain employees of the Company, along with other Group employees, have been granted share options on 21 December
2020, 8 June 2021, 29 March 2022 and 28 March 2023 under the LTIP.
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 Directors' 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 2023 are shown below.
At 1 January 2022
Granted in the year
Lapsed in the year
At 31 December 2022
Granted in the year
Exercised in the year
Lapsed in the year
Outstanding at 31 December 2023
Exercisable at 31 December 2023
Number of
shares
2,074,246
1,719,986
(436,702)
3,357,530
1,655,496
(303,558)
(1,494,515)
3,214,953
412,637
The weighted average exercise price in the year is 52.1p (2022: nil).
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, the 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 start of performance period
Share price at grant date
Exercise price
Expected volatility
Expected life
Expected dividend yield
Risk-free interest rate
Fair value per option
2022 award
TSR condition
2022 award
AEPS condition
2023 award
TSR condition
2023 award
AEPS condition
132.5p
101.5p
£nil
17.9%
132.5p
101.5p
£nil
–
3 years
3 years
0%
0.53%
29.6p
–
–
101.5p
88.5p
117.0p
£nil
14.3%
3 years
0%
3.05%
21.1p
88.5p
117.0p
£nil
–
3 years
–
–
117.0p
137
The Pebble Group plc Annual Report 2023 Notes to the Group financial statements
(continued)
25. Share-based payments (continued)
The Pebble Group plc Group Sharesave Plan (SAYE)
Certain eligible employees of the Company, along with other Group employees, have been granted share options on
6 October 2021 and 25 April 2023 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 20 per cent. The vesting period under the scheme is three
years with no performance conditions, other than remaining a Group employee, attached to the options.
In 2023 under the SAYE, the Group made awards of 417,932 (2022: nil) 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 2023 are shown below.
At 1 January 2022
Lapsed in the year
At 31 December 2022
Granted in the year
Lapsed in the year
Outstanding at 31 December 2023
Number of
shares
Weight average
exercise price (p)
923,710
(181,645)
742,065
417,932
(481,650)
678,347
122.0
122.0
122.0
94.0
117.4
108.0
The fair value at grant date is independently determined using an adjusted form of the Black-Scholes model that takes into
account the exercise price, the term of the option, the share price at grant date, the 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
2023 award
117.0p
94.0p
13.4%
3 years
0%
3.05%
16.0p
26. 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.
138
The Pebble Group plc Annual Report 2023FINANCIAL STATEMENTS Company balance sheet
As at 31 December 2023
Fixed assets
Property, plant and equipment
Investments
Current assets
Trade and other receivables (including £78,500,000
(2022: £81,066,000) falling due after more than one year)
Cash and cash equivalents
Creditors: amounts falling due within one year
Net current assets
Total assets less current liabilities
Net assets
Equity
Called up share capital
Share premium account
Own share reserve
Capital reserve
Merger relief reserve
Share-based payment reserve
Retained earnings
Total equity
Note
2023
£’000
2022
£’000
6
7
8
10
12
13
90
113,617
113,707
–
113,276
113,276
78,713
1,374
80,087
(821)
79,266
192,973
192,973
1,675
78,451
(227)
125
713
1,970
110,266
192,973
81,122
–
81,122
(288)
80,834
194,110
194,110
1,675
78,451
–
125
713
1,842
111,304
194,110
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 loss for the year dealt within the financial statements of the Company was £304,000
(2022: £30,000).
The Company financial statements on pages 139-146 were approved by the Board of Directors on 18 March 2024 and were
signed on its behalf by:
Claire Thomson
Director
18 March 2024
The notes on pages 141-146 form part of these Company financial statements.
139
The Pebble Group plc Annual Report 2023
Company statement of changes in equity
For the year ended 31 December 2023
Balance at 1 January 2022
Loss for the year
Total comprehensive expense
Employee share schemes – value
of employee services (note 13)
Deferred tax on employee share
schemes (note 9)
Total transactions with owners
recognised in equity
Share
capital
£’000
Share
premium
account
£’000
1,675
78,451
–
–
–
–
–
–
–
–
–
–
Balance at 31 December 2022
1,675
78,451
Loss for the year
Total comprehensive expense
Dividends paid (note 5)
Purchase of own shares by EBT
Employee share schemes – value
of employee services (note 13)
Deferred tax on employee share
schemes (note 9)
Total transactions with owners
recognised in equity
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Balance at 31 December 2023
1,675
78,451
Own share
reserve
£’000
Capital
reserve
£’000
Merger
relief
reserve
£’000
Share-based
payment
reserve
£’000
Retained
earnings
£’000
Total
equity
£’000
–
–
–
–
–
–
–
–
–
–
(395)
168
–
(227)
(227)
125
713
681
111,334
192,979
–
–
–
–
–
–
–
–
–
–
–
–
1,196
(35)
1,161
(30)
(30)
–
–
–
(30)
(30)
1,196
(35)
1,161
125
713
1,842
111,304
194,110
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(304)
(304)
(304)
(304)
(1,005)
(1,005)
–
(395)
136
271
575
(8)
–
(8)
128
(734)
(833)
125
713
1,970
110,266
192,973
The notes on pages 141-146 form part of these Company financial statements.
The Group set up an Employee Benefit Trust (EBT) in the year to administer share plans and acquire shares, using funds
gifted by the Group, to meet commitments to employee share schemes. At 31 December 2023, the EBT held 412,637
shares (2022: nil).
140
The Pebble Group plc Annual Report 2023FINANCIAL 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 loss for the year was £304,000 (2022:
£30,000). There are no material differences between the
loss 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 2025 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 at least 12 months from the date
of signing the financial statements. 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.
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 (2022: £nil). The Directors recommend the
payment of a final dividend for 2023 of 1.2 pence per share
(2022: 0.6 pence per share).
(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 in the employing company’s income statement
with the credit side of the entry being recorded in equity.
Remuneration relating to subsidiary undertakings are
recognised as an increase in investment to that subsidiary.
141
The Pebble Group plc Annual Report 2023 Notes to the Company financial statements
(continued)
2. Accounting policies (continued)
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.
Depreciation is calculated using straight-line method 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; and
• Computer hardware – 5 years.
(l) Leases
Rentals under operating leases are charged on a straight-
line basis over the lease term, even if the payments are not
made on such a basis.
(i) 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.
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.
(j) Cash and cash equivalents
Cash and cash equivalents comprise cash balances.
(k) 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.
Gains and losses on disposals are determined by comparing
proceeds with carrying amount. These are included in profit
or loss.
142
(m) 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.
(n) 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.
(o) Own share reserve
Own share reserve represents Ordinary Shares in the
Company held by the Employee Benefit Trust (EBT) set up in
2023 to administer share plans and acquire shares, using
funds contributed by the Group, to meet commitments to
employee share schemes.
Employee Benefit Trust
The Company established an EBT (The Pebble Group
Employee Benefit Trust) on 2 May 2023 to enable shares to
be bought in the market to satisfy the demand from share
awards under the Group’s employee share schemes. The
EBT is a separately administered trust and is funded by
contributions from Group companies in the form of a loan
or a gift. The assets of the trust comprise shares in The
Pebble Group plc and cash balances. The Company
recognises the assets and liabilities of the trust in the
Company financial statements and shares held by the trust
are recorded in the own share reserve as a deduction from
shareholders’ equity. As at 31 December 2023, the EBT held
412,637 shares in the Company.
(p) Capital reserve
The capital reserve was created in 2021 as a result of the
purchase by the Company of all deferred shares in issue.
(q) 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.
(r) 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.
The Pebble Group plc Annual Report 2023FINANCIAL STATEMENTS 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 2023 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 auditors
Details of Directors’ remuneration are shown in the Directors’ Remuneration report on pages 86-95. Details of auditors’
remuneration are shown in note 8 to the Group financial statements. In 2023, the Company had nine employees that were
transferred from Project Amber Bidco Limited (2022: none).
A proportion of the emoluments of the Company’s Directors are recharged to other companies in the Group. The total
remuneration incurred by the Company in the year was £315,000 (2022: £533,000).
Highest paid Director
The highest paid Director’s emoluments incurred by the Company during the financial year was as follows:
Salaries including bonuses and social security costs
Short-term benefits
Total remuneration
5. Dividends paid and proposed
Declared and paid during the year
Final dividend for 2022 paid in June 2023: 0.6p per share
2023
£’000
170
10
180
2023
£’000
1,005
2022
£’000
291
15
306
2022
£’000
–
Proposed for approval at AGM (not recognised as a liability at 31 December)
Final dividend for 2023: 1.2p per share (2022: 0.6p per share)
2,004
1,005
As per the Trust Deed, the EBT shall waive its entitlement to a dividend on the shares held of 412,637 shares.
6. Property, plant and equipment
Cost
Balance at 1 January 2023
Additions
Balance at 31 December 2023
Accumulated depreciation
Balance at 1 January 2023
Charge for the year
Balance at 31 December 2023
Net book value
Balance at 31 December 2022
Balance at 31 December 2023
Fixtures and
fittings
£’000
Computer
hardware
£’000
–
83
83
–
13
13
-
70
–
23
23
–
3
3
–
20
Total
£’000
–
106
106
-
16
16
–
90
143
The Pebble Group plc Annual Report 2023
Notes to the Company financial statements
(continued)
7. Investments
Cost and carrying amount
Balance at 1 January 2022
Movement relating to share options
Balance at 31 December 2022
Movement relating to share options
Balance at 31 December 2023
£’000
112,291
985
113,276
341
113,617
The Directors believe that the carrying value of the investments is supported by their underlying net assets.
The Company owns the whole of the issued Ordinary Shares of the following subsidiary undertakings:
Name
Registered address
Principal activity
Class of share
Percentage holding
Project Amber Bidco Limited
H.I.G Milan UK Bidco Limited
Brand Addition Limited
Brand Addition Asia Limited
Brand Addition Ireland Limited
Brand Addition Reklam Urunleri
Dagitim ve Ticaret Limited Sirketi
Brand Addition (Shanghai) Trading
Co., Limited
H.I.G. Milan Germany Bidco GmbH
Brand Addition GmbH
Broadway
Trafford Wharf Road
Manchester
M17 1DD
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
Europastrasse 19a
45888 Gelsenkirchen,
Germany
Holding company
Holding company
Ordinary
Ordinary
Promotional merchandise Ordinary
100%
100%
100%
Promotional merchandise
Ordinary
100%
Promotional merchandise
Ordinary
100%
Promotional merchandise
Ordinary
100%
Promotional merchandise
Ordinary
100%
Holding company
Promotional merchandise
Ordinary
Ordinary
100%
100%
100%
100%
100%
The Pebble Group US Bidco Inc.
Gateway CDI Inc.
909 North 20th Street
Saint Louis, MO 63103
Holding company
Promotional merchandise
Ordinary
Ordinary
Facilisgroup LLC
1600 S Brentwood Blvd.,
Ste 800, Brentwood,
MO 63144
Promotional merchandise
service provider
Ordinary
Facilisgroup Canada Inc.
5320 Canotek Road
Gloucester, ON K1J 9C1
Promotional merchandise
service provider
Ordinary
100%
Other than Project Amber Bidco Limited, which is directly held by the parent, all subsidiaries are indirectly held.
All subsidiaries listed above are included in the consolidated financial statements.
144
The Pebble Group plc Annual Report 2023FINANCIAL STATEMENTS 8. Trade and other receivables
Amounts falling due within one year:
Prepayments
Capitalised refinancing fees
Amounts falling due after more than one year:
Amounts owed by Group undertakings
Capitalised refinancing fees
Deferred tax assets (note 9)
Total trade and other receivables
2023
£’000
145
68
213
2022
£’000
56
–
56
78,308
80,911
68
124
78,500
78,713
–
155
81,066
81,122
Amounts owed by Group undertakings falling due after more than one year are unsecured, repayable in greater than one
year and bear interest at market rates.
9. Deferred tax assets
Deferred tax assets are analysed as follows:
Accelerated depreciation
Other short-term timing differences
2023
£’000
(19)
143
124
2022
£’000
–
155
155
The above amounts reflect the differences between the carrying and tax amounts as at each year end. Of the deferred tax
balances at 31 December 2023, £2,000 (2022: £nil) of the deferred tax asset is expected to be utilised within one year.
Changes during each year are as follows:
Balance at 1 January 2022
Tax credit in respect of current year
Tax directly charged to equity
Balance at 31 December 2022
Tax (charge)/credit in respect of current year
Tax directly charged to equity
Balance at 31 December 2023
Accelerated
depreciation
£’000
Share options
£’000
Short-term
timing
differences
£’000
–
–
–
–
(19)
–
(19)
96
94
(35)
155
(6)
(8)
141
–
–
–
–
2
–
2
Total
£’000
96
94
(35)
155
(23)
(8)
124
145
The Pebble Group plc Annual Report 2023 Notes to the Company financial statements
(continued)
10. Creditors: amounts falling due within one year
Accruals
Other payables
Other tax and social security
Amounts owed to Group undertakings
Total creditors
2023
£’000
364
7
64
386
821
2022
£’000
288
–
–
–
288
Amounts owed to Group undertakings falling due within one year are unsecured, have no fixed date of repayment and are
repayable on demand.
The Company is party to a Group cross-guarantee banking arrangement, which is a revolving credit facility of £10,000,000
expiring January 2026, with the option to extend to January 2027. Interest was charged at a rate of SONIA + 2.0%. As at
31 December 2023, the balance on the facility was £nil (2022: £nil). There is also a revolving credit facility of 10,000,000
RMB for Brand Addition (Shanghai) Trading Co. Limited, which is guaranteed by the Company. At 31 December 2023, the
balance on the facility was £nil (2022: £nil). Details over financial risk management are set out in note 24 to the Group
financial statements.
11. Leases
The charge relating to rentals under operating leases in 2023 was £16,869 (2022: £nil).
The Company had minimum lease payments under non-cancellable operating leases as set out below.
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
Total leases
2023
£’000
51
43
43
28
1
166
2022
£’000
–
–
–
–
–
–
12. Called up share capital
Details of movements in shares are set out in note 22 to the Group financial statements.
13. Share-based payments
Details of share-based payments are set out in note 25 to the Group financial statements.
14. 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.
146
The Pebble Group plc Annual Report 2023FINANCIAL STATEMENTS 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
Head office
Suite 1, Didsbury House
748-754 Wilmslow Road
Didsbury
Manchester
M20 2DW
Registered office
The Pebble Group plc
Broadway House
Trafford Wharf Road
Trafford Park
Manchester M17 1DD
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
Registrar
Link Group
Central Square
29 Wellington Street
Leeds LS1 4DL
Financial PR
Temple Bar Advisory
71 Queen Victoria Street
London EC4V 4BE
Company number: 12231361
31 December 2023
18 March 2024
27 March 2024
30 April 2024
September 2024
31 December 2024
147
The Pebble Group plc Annual Report 2023 “ Against a challenging macroeconomic
environment, the Group has continued
to invest in new technology to further
its market differentiation and
underpin its long-term growth.”
Richard Law
Chair
Stay up to date at
thepebblegroup.com
Strategic report
2
Introduction to the Promotional
Products Industry
4 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 Environmental Social and
Governance (ESG)
45 Key performance indicators
48 Chief Financial Officer’s review
52 Risk management
Corporate governance
58 Chair’s introduction to governance
60 Our governance structure
66 Nomination Committee report
69 Key governance policies
72 Corporate governance statement
80 Board of Directors
82 Audit Committee report
86 Remuneration report
96 Directors’ Report
99 Statement of Directors’ responsibilities
in respect of the financial statements
Financial statements
100 Independent auditors’ report
106 Consolidated income statement
107 Consolidated statement of other
comprehensive income
108 Consolidated statement of financial
position
109 Consolidated statement of changes in
equity
110 Consolidated cash flow statement
111 Notes to the Group financial statements
139 Company balance sheet
140 Company statement of changes in
equity
141 Notes to the Company financial
statements
147 Financial calendar and Company
information
The material used in this report has
been harvested in a responsible
manner from an FSC accredited mill.
Building brands.
Growing relationships.
Building brands.
Strengthening businesses.
Growing relationships.
Strengthening businesses.
Broadway House
Head Office
Trafford Wharf Road
Suite 1, Didsbury House
Trafford Park
748-754 Wilmslow Road
Manchester M17 1DD
Didsbury
Manchester
M20 2DW
The Pebble Group plc Annual Report 2023
1
Annual
Report
2023
Annual Report 2022
The Pebble Group plc Annual Report 2023
3
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HeadlinePage TitleFINANCIAL STATEMENTS