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Photo-Me International plc
Annual Report & Accounts 2016
Technological
Integration
Photo-Me International plc
Church Road, Bookham
Surrey KT23 3EU
Tel: +44 (0)1372 453399
Fax: +44 (0)1372 459064
Web: www.photo-me.co.uk
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About
Photo-Me
Our principal activity is the
operation of non-food unattended
vending equipment aimed primarily
at the consumer market.
The largest part of the estate
comprises photobooths and digital
printing kiosks, with the remainder
including laundry units, amusement
machines and business service
equipment.
Strategic Report
Financial Statements
01 Our Highlights
04 Our Strategy
05 Where We Operate
06 Our Products
08 Chairman’s Statement
09 Overview of the Year
11 Strategic Overview
13 Financial Review
16 Corporate Responsibility Statement
19 Viability Statement
Corporate Governance
22 Board of Directors
& Company Secretary
23 Report of the Directors
26 Corporate Governance Statement
30 Remuneration Report
43 Statement of Directors’
Responsibilities
44 Independent Auditor’s Report
48 Group Statement of
Comprehensive Income
49 Statements of Financial Position
50 Group Statement of Cash Flows
51 Company Statement of Cash Flows
52 Group Statement of Changes
in Equity
53 Company Statement of Changes
in Equity
54 Notes to the Financial Statements
101 Five Year Summary
102 Company Information & Advisors
103 Shareholder Information
Find out more about Photo-Me at
www.investor.photo-me.com
Our Highlights
The strength of our cash flow is
allowing us both to finance the
capital expenditure programme and
to raise returns to shareholders by
way of dividends.
John Lewis
Non-executive Chairman
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Underlying Pre-tax Profit
£40.1m
+14.6%
Ordinary Dividends Per Share
Cash Generated from Operations
5.86p*
+20.1%
£51.4m
+4.5%
2014
2015
2016
30.1m
35.0m
2014
2015
3.75p
4.88p
2014
2015
40.1m
2016
5.86p
2016
* Excluding special dividend of 2.815p
45.6m
49.2m
51.4m
Share Price at 30 April
167.25p
+20.3%
Underlying EBITDA
£56.7m
+9.5%
2014
2015
2016
135.0p
139.0p
2014
2015
47.8m
51.8m
167.25p
2016
56.7m
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Strategic Report
Integrated
security...
We are integrating highly secured
biometric solutions needed to
address today’s security issues
into our photobooths.
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...helping to make
our world safer.
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Our Strategy
Customer Focused
Photo-Me’s business strategy is
centred around utilising the cash
flow from our long-established
photobooth operations to develop
new and complementary products,
driving future growth, combined
with the penetration of new
geographic markets.
Where We Operate
Geographical Spread
The Group has operations in
17 countries, with a strong sales
and servicing network. We serve
markets that are well positioned
to deliver long-term profitable
growth, as well as strong and
stable cash-flows.
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Location
Attractiveness
Ease of Use
Location
Attractiveness
Ease of Use
We maintain strong relationships with
site owners and try to ensure optimum
positioning of our machines.
The Group has a strong history of innovation
and is constantly looking for ways to update
and modernize its estate, while introducing
new products to the marketplace. The Starck
photobooth and the Revolution laundry units
are examples of this.
Traditionally, units have been coin-operated
in simple denominations (e.g. £5, €5) but the
Group is intensifying its contactless payment
systems deployment programme to improve
the customer offering and to enhance
customer opportunity.
Reliability
Quality
Value
Reliability
Quality of Product
Value for money
Combined with the Telemetry connected
technology, we employ an extensive network
of experienced engineers to minimize
downtime and maintain appearance.
Photobooths produce ICAO-compliant
photos and constant investment in
technology ensures the estate in general
offers the consumer a satisfying experience.
Historically, the Group has been cautious
in raising its prices and believes it offers
a competitively priced range of products.
Machine usage statistics support this view.
UK & Ireland
Continental Europe
Asia & RoW
Vending Units
12,500
Revenue
£45.8m
Underlying Operating Profit
£8.0m
Geograhic spread
United Kingdom, Ireland
Vending Units
22,800
Revenue
£93.7m
Underlying Operating Profit
£24.2m
Geograhic spread
Austria, Belgium, France, Germany,
Netherlands, Poland, Portugal, Spain,
Switzerland
Vending Units
10,200
Revenue
£44.5m
Underlying Operating Profit
£10.6m
Geograhic spread
China, Japan, Singapore,
South Korea, U.S.A., Vietnam
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Our Products
For more than 50 years,
Photo-Me has been the world’s
largest operator of photobooths,
with market-leading photographic
quality and innovative technology.
Bringing innovation
to our customers
Photography
Photo Processing
Laundry Machines
PhotoLight
Children’s Rides
ANTS
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Photobooths
SpeedLab
Revolution®
Smart Solar Lighting
Children’s Rides
ANTS
State-of-the-art cameras, tactile control screens
and continually developing designs have helped
to cement Photo-Me’s position at the head of
the field.
Benefiting from the photographic expertise and
excellence in self-service systems, Photo-Me’s
digital printing kiosks offer a wide range of print
formats with a user-friendly interface.
A solution to the problem of washing and
drying large laundry items
Economical and eco-friendly, these solar street
lights offer variable lighting depending on light
intensity and the time of day.
Photo-Me offers the latest in interactive
character rides, exciting new simulator rides
and a selection of other coin-operated
amusement machines.
In France, Photomaton have negotiated the first
agreement with the French authorities to deliver
digitized photos and signatures for the driver
licence pre-application service.
Units in operation
27,654
Units in operation
5,053
Units in operation
1,411
Units sold
480
Units in operation
5,500
Units in operation
2,000
Included within Photobooths figure
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Chairman’s Statement
Overview of the Year
It has been another strong year for
the Group with a 14.6% increase in
reported underlying pre-tax profits
to a record £40.1million.
Dividends
Last year we stated that we intended to increase the annual dividend by
10%p.a. over the following three years. We also stated that any net cash
on the balance sheet at April 30 in each year in excess of £50m would be
available to shareholders as a special dividend, provided that the business
had no immediate needs for the capital, for example acquisitions or
specific investments.
The Group delivered a
solid financial performance,
as illustrated by the strong
increase in profits.
Results
At constant currency, Group Revenue was 6.3% higher over the year with
a 3.8% improvement on a reported basis. Group reported underlying
EBITDA increased by 9.5% during the period, to £56.7m, with underlying
EBITDA margins improving to 30.8% from 29.2% in 2015.
Strategy
Our stated strategy is to use the significant cash flow generated from our
long-established photobooth business to develop new and complementary
products which will drive our future growth. Alongside this, we are keen to
penetrate new geographic markets, which offer the potential of long-term
growth. It is also part of our strategy to be financially independent as far as
we can be, and to concentrate on increasing our returns to shareholders.
We have continued to make good progress with this strategy.
The expansion of our Revolution laundry product is proceeding in line
with our plan and is producing strong returns. Our photobooth business
is expanding gradually into new markets and our product development
pipeline – including the enhanced security technology in the photobooths
- is promising. The strength of our cash flow is allowing us both to finance
the capital expenditure programme and to raise returns to shareholders
by way of dividends.
We are therefore pleased to confirm that the proposed total annual
dividend of 5.86 pence per share and the proposed special dividend of
2.815 pence per share reflect the commitment made last year. We have
decided to increase the returns through ordinary dividends following
feedback received from our investors.
We are also committing to increase the ordinary dividend by 20%
for the next two financial years.
If approved at the Annual General Meeting on 20 October 2016, the final
dividend and the special dividend will be paid on 10 November 2016 to
shareholders on the register at the close of business on 7 October 2016.
The ex-dividend date will be 6 October 2016.
Employees
On behalf of the Board, I would once again like to thank our management
and employees for all their individual hard work, dedication and loyalty
throughout the year.
Current trading and Outlook
Whilst uncertainties remain, in particular in relation to currency, the Board
anticipates another year of good growth.
Revenue
Year to 30 April
Continental Europe
UK & Republic of Ireland
Asia & ROW
2016†
£m
97.9
45.9
44.6
188.4
2016
£m
93.7
45.8
44.5
184.0
2015 Change†
%
£m
+3.8%
94.3
+2.7%
44.7
38.2 +16.8%
+6.3%
177.2
Underlying Operating profit*
Year to 30 April
Continental Europe
UK & Republic of Ireland
Asia & ROW
Corporate
2016†
£m
25.3
8.0
10.7
44.0
(3.0)
40.1
2016
£m
24.1
8.0
10.7
42.8
(3.1)
39.7
2015 Change†
%
£m
22.0 +15.0%
8.4
-4.8%
6.9 +55.1%
37.3 +18.0%
(2.5)
34.8 +17.8%
† 2016 trading results of overseas subsidiaries converted at 2015 exchange rates.
* excluding profit on sale of land in 2015
John Lewis
Non-executive Chairman
Serge Crasnianski
Chief Executive Officer &
Deputy Chairman
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Vending units
Continental Europe
UK & Republic of Ireland
Asia & ROW
Total
2016
2015 Change
22,800
12,500
10,200
45,500
22,400
12,400
9,800
44,600
+1.8%
+0.8%
+4.1%
+2.0%
Continental Europe
This division contributed 51% of Group revenue (2015: 53%) and 61%
of underlying operating profit (2015: 63%). At the end of April 2016, 50%
(2015: 50%) of the Group's estate was sited in Continental Europe.
There were 22,800 (2015: 22,400) units in total of which 12,500
(2015: 12,400) were photobooths. The Group operates in nine countries.
Reported revenue was 0.6% lower than last year, but on a constant
currency basis increased by 3.8%. Operating profits increased by 9.5%
on a reported basis, due to the reduction in siting costs and continued
focus on operating costs reduction.
The European photobooth estate increased by 0.5% year-on-year
with the main areas for growth being France, Germany and Switzerland.
The Group continues its roll-out of higher-margin Starck booths and there
are now 3,780 deployed across Europe, an increase of 567 over the year.
The Group continues to assess the price increases in its photobooth
estate and is now running trials in two countries – Switzerland and
the Netherlands.
The roll-out of the Group's main laundry product - branded Revolution -
predominantly using the same sites as the photobooth estate, continues
to progress well.
Total (including UK & Ireland)
2016
2015
2014 Change
1,411
Owned and operated (total)
737
Sold (cumulative total at year end)
Ave. revenue per owned unit (€)† 15,382
644
440
14,396
202
317
13,887
+119%
+68%
+7%
† Average calculated only on machines in France, Ireland and Portugal
with full month takings
The results from the units in operation in France, Ireland and Portugal
remain extremely encouraging with takings during the period averaging
€1,282 per unit per month across the operating estate. For the full year,
the turnover of the entire laundry business units was £11.8m (including a
contribution of £1.2m from Fowler(UK)) (2015: £6.3m), which was more
than trebled since 2014. Laundries represented 13% of total turnover in
France, 47% in Ireland and 52% in Portugal.
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Overview of the Year
continued
The Group now has laundry units in twelve countries globally, with
the most significant coverage being in France, Belgium, Portugal and
Ireland. Besides supermarket locations, the Group continues to be
encouraged by potential demand in sites like campsites, universities
and military barracks, all of which have demand for heavy-duty laundry
capability. The product has continued to perform extremely well in
Portugal and in Ireland where an agreement with Tesco (Ireland) means
that the number of operated units in that country should increase to 120
over the next 12 months. The profit in these two countries has climbed
rapidly since the units were first introduced in those markets in 2014
and is expected to approach €1m in the coming year.
The Group continues to target 6,000 laundry units by 2020 and as
the business grows, it is expected that the majority of these will be
owned/operated. The Group remains focused on ensuring that only the
best locations are targeted for the machines, given the investment and
logistics involved and the speed of the roll-out programme is dictated
by the availability of suitable venues.
The Group has been trialling a number of launderettes in towns across
France and Belgium over the past three years. The vast majority of these
have achieved the desired return on capital and the Group now considers
it appropriate to roll out the concept more aggressively, targeting towns
where there is no large supermarket nearby and where competition within
the town is limited. The stores (all short leaseholds) again will benefit from
leading edge design and are expected to cost around €32,000 each to
equip fully. The Group’s ambition is to develop in that segment rapidly
and reach a sizeable base of locations.
Photo-Me also announced the development of “Revolution 2”, which would
only have a footprint of 5sqm compared with the 10sqm of existing units.
One principal advantage of these smaller units is that they avoid planning
restrictions and in addition may be attractive in markets where space is
more limited. Production of these units is expected to commence fully
in September 2016.
The expansion of the Revolution estate continues to represent an
opportunity for a material increase in Group revenue and with an attractive
cash generation and EBIT profile they provide an opportunity to enhance
returns to shareholders in future years.
The Group continues to operate over 5,000 digital printing kiosks,
primarily in France and Switzerland, and is currently upgrading the estate
to the latest technology to accept all models of memory cards and other
media. The new range of Starck-designed kiosks are gradually being
introduced and good progress is being seen with the Speedlab Cube
in particular. The Group considers the potential worldwide to be very
promising over the medium-term.
Europe remains the centre of the Group's R&D efforts and new product
development. The Group is increasingly focusing on new technologies,
like 3D digital photos and is investing with the aim of becoming a leader
in the field. One of the targets is to develop enhanced ID security standards
through 3D technology which the Group believes will be increasingly
attractive to Governments. The Group has already introduced biometric
standards into a number of its booths in Germany, Switzerland and China
and the addition of 3D photo capture would represent a major step forward
in security. Photobooths are therefore progressively being enabled digitally
and in February 2016, the Group announced that it had obtained the first
agreement with ANTS (National Agency of Secure Documents in France)
to allow the delivery of a digitized e-photo and signature for the purposes
of driving licence application with the document being sent from the
photobooths via a secure server. The Group has some 7,800 units in
France and the entire estate will be enabled rapidly. Similarly, in September
2015 Photo-Me signed a five-year agreement with Moneygram under
which money transfer services would be made available in its booths
worldwide, beginning in France.
The Group is still trialling its carwash concept and Photo-Me will report
further on its plans for this concept at the end of the next financial year.
Asia & R.O.W.
This division contributed 24% of Group revenue (2015: 22%) and 27% of
operating profit (2015: 20%). At the end of April 2016, 22% (2015: 22%)
of the Group's estate was sited in Asia & ROW. There were 10,200 (2015:
9,800) units in total of which 8,600 (2015: 8,200) were photobooths.
Growth in photobooth units was 4.6% year on year, mainly deploying
machines in Japan in order to respond to the increased demand created
by the roll-out of a new photo ID. The Group operates in six countries,
with the latest addition being the USA.
The largest territory by size of the machine estate and revenue by far is
Japan where performance was outstanding. Revenues were up by 16%
with profits 69% higher.
Performance here has benefited from the first stage of adoption of the
new ID card regulation which came into force in 2016. Under this system
all Japanese citizens may apply to be issued with their own personal
12-digit number (My Number) which will in due course require an
accompanying photo ID card. The system is not currently compulsory, but
brings a significant number of administrative benefits to both the private
user and the public sector and widespread adoption is expected.
Owing to technical and administrative problems at local government
level, the implementation of this plan to date has not gone as smoothly
as planned, after a strong start, but the Japanese government is
committed to the programme and is increasing financial resource to
ensure swifter issuance. Based on the official roadmap issued by the
Japanese administration, it is expected that by March 2019, 87 million
cards will be issued, while the scope and functionality of the card will be
expanded although the speed of issuance will be reliant upon promotion
of the scheme by the Japanese government. Ultimately the card will
become the Japanese photo ID card, branded One Card. This is likely to
lead to a steady and substantial increase in photobooth volumes over the
period but, due to the uncertainty over timing, we have not included any
profits related to My Number in our forecasts for the current year.
Gradual progress continues to be made in China where turnover rose
by 24% (at constant currency) with a good increase in profitability.
UK & Ireland
This division contributed 25% of Group revenue (2015: 25%) and 20%
of operating profit (2015: 24%). At the end of April 2016, 28% (2015: 28%)
of the Group's estate was sited in UK & Ireland. There were 12,500 (2015:
12,400) units in total of which 6,600 (2015: 6,400) were photobooths.
Growth in photobooth numbers was 2.9% year-on-year.
In a market background remaining difficult, the turnover in the UK and
Ireland increased by +2.5% (constant currency) due to the resilience of
the photographic business in the UK and the fast expansion of the laundry
business in Ireland. Profits contracted by -4.8% reflecting the increase
in depreciation and some site costs.
The Group’s progress in rolling out its Revolution laundries in Ireland has
been good and is covered in the Continental Europe section (above).
Strategic Overview
What we do
Photo-Me’s current principal activity is the operation of unattended
vending equipment aimed primarily at the consumer market. The largest
part of this estate currently comprises photobooths and digital printing
kiosks, with the balance comprising laundry units, amusement machines
(including kiddie rides) and business service equipment.
Photo-Me owns these units and pays the site owner a fixed fee or a
commission based on turnover. This commission varies by country and
location. Photo-Me is responsible for collecting the takings from, and the
service and maintenance of, the units and employs a network of
engineers to perform these tasks.
To further its diversification, the ambition of the Group is to expand the
laundry business to all segments (supermarket car parks Revolution units,
town centre launderettes, B2B equipment sales and rentals), as well as
aggressively move into offering security management solutions to
governments leveraging 3D identification technology and secured
digital transmission of identification data.
Where we operate
Photo-Me has three principal areas of operation geographically –
UK & Ireland, Continental Europe and Asia. Its most important territory
in Continental Europe is France, and in Asia it is Japan.
With photobooths historically being its core business, Photo-Me has
chosen to operate in areas offering a strong and consistent demand for
identity photos, in particular passports and driving licences. It has also
chosen areas where it is able to establish a strong market share and
where business practices maintain a high ethical standard. The Group
does not operate (although for differing reasons) in South America,
Africa or Australasia.
Our business model
Customers
The majority of our business is consumer-oriented and our units
must therefore have certain characteristics. These are: good location,
attractiveness, ease of use, reliability, quality of product and value for money.
(cid:129)
Location
We maintain strong relationships with site owners and try to ensure
optimum positioning of our machines.
(cid:129) Attractiveness
The Group has a strong history of innovation and is constantly looking
for ways to update and modernize its estate, while introducing new
products to the marketplace. The Starck photobooth, the Revolution
laundry units and the newly redesigned photo printing kiosks are
recent examples of this.
(cid:129)
Ease of use
Traditionally, units have been coin-operated in simple denominations
(e.g. £5, €5) but the Group is progressively introducing alternative
payment systems to improve the customer offering and to enhance
customer opportunity.
(cid:129) Reliability
Combined with the telemetry connected technology, we employ an
extensive network of experienced engineers to minimize downtime
and maintain appearance.
(cid:129) Quality of product
Photobooths produce ICAO (International Civil Aviation Organisation)-
compliant photos and constant investment in technology ensures the
estate in general offers the consumer a very satisfactory experience.
Units are generally sited in areas of high footfall and/or where there may be
ambient demand for identity photos. Thus supermarkets, shopping malls
(indoors and outdoors) and public transport venues are prime locations.
(cid:129)
Value for money
Historically, the Group has been cautious in raising its prices
and believes it offers a competitively priced range of products.
Machine usage statistics support this view.
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From an operational perspective, the Group has three main aims:
1. To increase the number of units in operation
2. To increase takings per unit
3. To minimize production and operational costs
Key performance indicators
The Group measures its performance using a mixture of financial and non-financial indicators. The main objective of these KPIs is to ensure that the Group
remains highly cash generative, delivers sustained long-term profitability, preserves the value of its assets and provides high returns to shareholders.
Description Relevance Performance
April 2016 April 2015 April 2014
Group total revenue at actual rate of exchange £184.0m £177.2m £186.6m
Group total revenue excluding minilab The turnover at constant rate of exchange excluding
business at constant rate of exchange minilabs indicates the underlying growth of the
core business £195.9m £183.7m £181.6m
Group profit before tax £40.1m £38.5m £30.1m
Underlying profit before tax £40.1m £35.0m £30.1m
EBITDA margin The EBITDA margin is a good indicator of our
improvements in profitability 30.8% 31.2% 25.6%
Underlying EBITDA The underlying EBITDA margin is a good indicator
of our improvements in profitability excluding major
one-off items 30.8% 29.2% 25.6%
Gross takings (including VAT) Gross takings are an important indicator of the trend
in our core vending business +3.7% +2.5% +1.9%
Increase in number of photobooths The increase in number of photobooths is always
a priority and a main driver for growth +611 +916 +1,261
Increase in number of laundry units The increase in number of laundry units measures
(operated or sold) our penetration in this market where there is a huge
potential for growth and large profits +1,064 +417 +235
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Strategic Overview
Financial Review
1. Unit expansion
The Group’s estate can be grown in the following ways:
a. Adding further units within existing territories
b.
c. Entering new markets
Introducing new products within existing territories
a. Adding further units
The Group has strong market positions in the established countries
in which it operates, therefore adding further units within these territories
is generally quite difficult to achieve. However, the Group managed a 2%
increase over the year and will be expanding its estate in Japan
significantly to take advantage of new photo ID card legislation which
comes into force in 2016.
b. Introducing new products
With its history of innovation, the Group has been very successful at
introducing new products and modernizing its portfolio. The last four years
have seen the introduction of the Philippe Starck- designed photobooth
range as well as the launch of the brand-new Revolution laundry units,
which are now being extended into a laundrette format in 2016.
In addition, the Group has further products on trial. This includes the
carwash system, the photolight and the new Starck designed digital
printing kiosks.
The Group is also focussing heavily on developing next-generation
technology in its photobooths encompassing biometry and 3D
photography, which it believes will provide solutions to national and local
governments in the area of increased security. Biometric applications are
already in use in Germany, Switzerland and China and during the year the
Group signed a deal with ANTS in France in relation to digital driving
licence applications.
c. Entering new markets
The Group takes an opportunistic approach to investments in
new markets, and constantly assesses new potential markets.
In the last twelve months, very positive progress has been made in
South Korea, where some 100 photobooths have been sited.
Small operations have been launched in Poland.
2. Increase takings per unit
Over the last few years the Group has generally chosen not to raise prices
in light of both the generally difficult economic background globally as well
as a desire to ensure that the offering remains very competitive. However,
in 2014, a price rise was effected in the Japanese booths to offset VAT
increases and the prices on kiddie rides and amusement machines have
been raised from low levels in the UK. Going forward, however, the
increasing introduction of contactless payment across the estate should
allow more price flexibility. The Group is trialling in two countries currently
and planning a phased rollout of price increases over the next two years.
Besides price initiatives, the introduction of attractive new offerings on
the existing estate as well as active resiting of machines to more attractive
locations are also strategies to increase takings.
3. Minimizing production and operational costs
The principal operating cost – other than depreciation – is the commission
paid to site owners. Thanks to sophisticated telemetry inside all of its
operating units and robust internal controls, the Group suffers virtually no
fraud and the costs of operating its network of engineers are also low as
a percentage of the total cost base. The Group seeks to reduce
commissions where possible - it has achieved some success with the
introduction of its Starck booths – and it remains an ongoing strategic
management target. The commission payable on its Revolution laundry
units is significantly less than the photobooths as they use external space
that would normally produce no value for the site owners.
Over the last three years, the Group has transferred its production of
photobooths to China and the production of the laundry units to Hungary.
The facility in each country is operated by a large, listed European
manufacturer with very high production standards and capability. In both
cases this has significantly reduced production costs.
The Group reviews regularly its supply chain and endeavours to further
reduce production costs.
Financial Performance
The Group delivered a strong financial performance, as illustrated
by the significant increase in profits.
Reported revenue increased by 3.8% to £184.0m as the result of
the consistently sustained roll-out of the new laundry business line,
the increased volumes in the ID photo business in Asia, and to a
lesser extent its resilience in Europe.
April 2016 April 2015
£m £m
Revenue 184.0 177.2
Underlying EBITDA * 56.7 51.8
Underlying Operating Profit * 39.7 34.8
Underlying Profit before tax * 40.1 35.0
Profit after tax 29.2 28.0
*
Excludes the profit on sale of land of £3.5m in 2015
The movements in turnover are outlined in the following table:
£m
April 2015 Turnover 177.2
Change in core business revenue
UK & Ireland +1.2
Continental Europe +3.8
Asia
+6.4
Decline in the minilab business -0.2
Impact of exchange rates -4.4
April 2016 Turnover 184.0
The increase in the underlying profit before tax can be explained as follows:
£m
April 2015 – PBT 38.5
Profit on disposal of land -3.5
April 2015 – Underlying PBT 35.0
Changes in Revenue +6.8
Changes in Costs -1.9
Increase in depreciation and amortization –
Increase in net finance revenue +0.2
April 2016 – PBT 40.1
Review of operating costs
Operating costs amounted to £144.3m (2015: £138.8m).
Staff costs amounting to £40.9m increased by 1.5% compared with
the previous year and represented 22.2% of revenue (2015: 22.7%).
The increase is in line with the salary inflation across the Group.
The reduction in inventory costs is the direct result of both the winding
down of the parts and consumable intensive minilab division as well as
the costs reductions achieved through enhanced efficiencies in the
supply chain.
April 2016 April 2015
£m £m
Staff costs 40.9 40.3
Inventory costs 11.5 12.6
Other operating costs 75.2 69.0
127.6 121.9
Depreciation and Amortization 16.9 16.9
Profit / (loss) on disposal of fixed assets * (0.2) –
Operating costs 144.3 138.8
*
Excluding a profit of £3.5m on the disposal of land in 2015
Taxation
The Group tax charge of £10.9m corresponds to an effective tax rate
of 27.2% (2015: 27.2%).
The Group undertakes business in over 17 countries worldwide, with
most of the tax charge arising in France, Japan and the United Kingdom.
In each jurisdiction in which the Group operates, operations are organised
so that the Group pays the correct and appropriate amount of tax at the
right time according to the local regulations and ensure compliance with
the Group’s tax policy and guidelines.
Dividends
During the year, the Group paid dividends totalling £18.2m in respect
of the interim and final dividend for the year ended 30 April 2015.
The interim dividend for the year ended 30 April 2016 (2.575p per share)
declared in December 2015 was paid in May 2016 and amounted
to £9.7m.
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Financial Review
continued
Financial Review
Statement of Financial position
The Group balance sheet can be summarised as follows:
Cash flow and net cash position
April 2016 April 2015
£m £m
Non-current assets (excl. deposits) 84.5 71.5
Current assets (excl cash and deposits) 32.4 23.9
Non-current liabilities (excl. borrowings) (8.4) (7.5)
Current liabilities (excl. borrowings) (48.2) (44.2)
Net Cash 62.4 60.7
Total Equity 122.7 104.4
Minority interests (1.1) (0.9)
Total Shareholders’ funds 121.6 103.5
Following the payment of dividends of £18.2m, the Shareholders funds
at 30 April 2016 amounting to £121.6m increased by £18.1m compared
with the previous year end.
The non-current assets detail is outlined in the following table:
April 2016 April 2015
£m £m
Goodwill 11.6 10.2
R&D costs 4.7 2.6
Other intangible assets 4.0 3.9
Operating equipment 49.8 43.1
Plant and machinery 5.1 3.8
Land and buildings 1.3 1.3
Investment property 0.6 0.5
77.1 65.4
Investments 1.7 0.9
Deferred tax asset 4.2 3.5
Trade and other receivables 1.5 1.7
Total non-current assets (excl. deposits) 84.5 71.5
The goodwill mainly relates to the Japanese subsidiary. The addition
corresponds to the acquisition of Fowler UK.
With a net book value of £49.8m, the operating equipment is largely
the main component of the Group’s total non-current assets. The Group
owns some 45,500 machines operated worldwide. The change in the net
book value reflects the Group’s capital expenditure of £25.3m net of
depreciation and exchange differences.
April 2016 April 2015
£m £m
Opening net cash 60.7 63.1
Cash generated from operations 51.4 49.1
Taxation (10.8) (9.1)
Net cash generated from operations 40.6 40.0
Net cash used in investing activities (24.8) (18.1)
Dividends paid and other financing activities (17.8) (21.1)
Net cash generated (2.0) 0.8
Impact of exchange 3.7 (3.2)
Net cash inflow 1.7 (2.4)
Closing net cash 62.4 60.7
The increase in the EBITDA, coupled with optimised working capital
mitigated the impact of increase tax payments leading to the increase in
net cash generated from operations by £0.6m.
The cash generation was still substantial and enabled the Group
to finance its capital expenditure program as well as to pay out
to shareholders dividends amounting to £18.2m.
Taking advantage of very advantageous fixed interest rates, the Group
raised over the year £10.1m of long term external debt, aimed at financing
the acquisition of town centre launderettes. The outstanding debt was
deducted from the closing net cash at 30 April 2016. The total cash and
cash equivalents at 30 April 2016 amounted to £71m (2015: £58.6m).
At the end of April 2016, the Group’s net financial position amounting
to £62.4 m could be split as follows:
Net
Cash and Financial
deposits Borrowings Position
£m £m £m
Balance at 30 April 2015 60.9 (0.2) 60.7
Cash flow 8.6 (10.6) (2.0)
Non-cash movements 3.7 – 3.7
Balance at 30 April 2016 73.2 (10.8) 62.4
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Principal risks
Like all businesses, the Group faces risks and uncertainties that could impact the achievement of the Group’s strategy. These risks are accepted as being
part of doing business and the Board recognises that the nature and scope of these risks can change and so regularly reviews the risks faced by the
Group as well as the systems and processes to mitigate them. The table below sets out what the Board believes to be the principal risks and
uncertainties, their impact, and actions taken to mitigate them.
Nature of the risk Description and impact Mitigation
Nature of the risk Description and impact Mitigation
Economic
Global economic conditions Economic growth is a major influence on The Group focuses on maintaining the
consumer spending. A sustained period of characteristics and affordability of its
economic recession could lead to a decrease needs-driven products.
in consumer expenditure in discretionary areas.
Volatility of foreign exchange rates The majority of the Group’s revenue and profit The Group hedges its exposure to currency
is generated outside of the UK, and the Group fluctuations on transactions, as relevant.
results could be adversely impacted by an However, by its nature, in the Board’s opinion,
increase in the value of sterling relative to it is very difficult to hedge against currency
those currencies. fluctuation arising from translation in
consolidation in a cost-effective manner.
Regulations
Centralisation of production of ID photos In many European countries where the Group The Group is developing new systems that
operates, if governments were to implement could respond to this situation, including the
centralised image capture for biometric passport introduction of 3D technology in ID security
and other applications, the Group’s revenues and standards.The Group also ensures that its ID
profits could be seriously affected. product remains affordable and of high quality.
The Group is also conducting lobbying activities.
Strategic
Identification of new business opportunities Failure to identify new business areas may impact The Management teams constantly review
the ability of the Group to grow in the long term. demand in existing markets and potential new
opportunities. The Group continues to invest in
research for new products and technologies.
Inability to deliver anticipated benefits from The realisation of long-term anticipated benefits The Group regularly monitors the performance
the launch of new products depends mainly upon the successful launch of of newly installed machines, which are heavily
the “Revolution” laundry unit. trialled before launch.
Market
Commercial relationships The Group has well-established long-term The Group’s major key relationships are
relationships with a number of site-owners. supported by medium-term contracts.
The deterioration in the relationship with, We actively manage our site-owner relationships
or ultimately the loss of, a key account would at all levels to ensure a high quality of service.
have an adverse albeit contained, impact on the
Group’s results, considering how the Group’s
turnover is spread over a large client base and
none of the accounts representing more than 1%
of the Group turnover
Operational
Reliance on foreign manufacturers The Group sources most of its products from outside Extensive research is conducted into quality and
the UK. Consequently, the Group is subject to risks ethics before the Group procures products from
associated with international trade. any new country or supplier. The Group also
maintains very close relationships with both its
suppliers and shippers to ensure that risks of
disruption to production and supply are
managed appropriately.
Reliance on one single supplier The Group currently buys all its paper for The Board has decided to hold a strategic stock
of consumables photobooths from one single supplier. The failure of paper, allowing for 6 to 10 months’ worth of
of this supplier could have a dramatic effect. paper consumption, to give enough time to put
in place alternative solutions.
Reputation The Group’s brand is a key asset of the The protection of the Group’s brand in its core
business. Failure to protect the Group’s markets is sustained by products with certain
reputation and brand could lead to a loss of unique features and offerings as well as regular
trust and confidence. This could result in a maintenance to maintain appearance.
decline in the customer base.
Product and service quality The Board recognises that the quality and safety The Group continues to invest in its existing
of both its products and services is of critical estate, to ensure that it remains contemporary,
importance and that any major failure will affect and in constant product innovation to meet
consumer confidence. customer needs. The Group also has a
programme to regularly train its technicians.
Technological
Failure to keep up with the advances The Group operates in fields particularly in The Group mitigates this risk by continual
in technology relation to photography where upgrades to focus on R&D.
new technologies are mission critical.
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Corporate Responsibility Statement
(forming part of the Report of the Directors)
Our approach to corporate responsibility
The Group recognises its responsibilities to the community and the
environment and believes that health, safety and environmental issues
are integral and important components of best practice in business
management. Our management of corporate responsibility can influence
our ability to create long-term financial and non-financial value, and
impacts on our relationship with shareholders and other stakeholders.
We believe that effective management of corporate responsibility can
reduce risks and also help us identify business opportunities. We prioritise
our corporate responsibility activities based on three main drivers:
(cid:129)
(cid:129)
(cid:129)
legal requirements and future policy trends;
customer, employee and investor preferences for corporate
responsibility; and
cost savings and business efficiency.
We aim at ensuring that our approach is consistent with the directors’
duty to promote the success of the Company, a legal requirement
included in the UK Companies Act 2006. This duty is based on the
principle of ‘enlightened shareholder value’.
How we manage corporate responsibility
The Board is ultimately accountable for corporate responsibility. The Chief
Executive Officer has specific responsibility for risk management and
health, safety and environmental matters, with delegated authority through
line management.
The Group operates in highly differentiated national markets with differing
national laws, preferences and cultures. As a result, operational direction
and management of corporate responsibility lie primarily with national
business managers, who are best placed to ensure compliance with
national legislation and market expectations.
The Group internal audit programme operates on a risk-based
assessment process, including corporate responsibility issues. The Board
reviews Group-wide performance on corporate responsibility within the
assessment and review process. Where necessary, Group-wide policies
are developed or revised to address specific risks and opportunities,
or new information.
Products
The development, use and disposal of our products represent a main area
of both risk and opportunity. We ensure that our products and services are
designed to meet existing legislation and customer expectations. Increasingly,
this includes environmental, health and safety, and accessibility issues.
To ensure that products manufactured by KIS SAS (the Group’s
manufacturing subsidiary, based in France, which subcontracts this
function to third parties) consistently satisfy our stringent quality
requirements, certification to the ISO 9001 standard has been achieved.
Being conscious of the global issues with the disposal of waste and having
regard to increasing metal prices and landfill costs, we have paid more
attention to the re-use and recycling of our retired products. Currently,
at the end of their useful lives more than 90% by weight of the materials
used in our photobooths is recycled, most of this being steel and other
metals. In response to our concerns about the increase in energy costs
and man-made contributions to climate change, we have also embraced
technological advances by investing in energy-saving improvements to
our products, which are explained further under “Environment”, below.
The needs of all our customers are important. This drives a continual
review of our products and the development of solutions to meet these
needs. For example, we have improved the service provided to our
disabled customers and at the same time complied with the requirements
of the Equality Act 2010 by introducing within our photobooths on-screen
instructions for the hard of hearing and voice instructions as well as
carefully selected screen colours and font sizes to assist those with visual
impairments. In addition the development of the Universal photobooth
enables access for users confined to a wheelchair.
Employees
Employee communication, engagement and involvement
The Company’s employees are a valued integral part of the business and
the Company’s achieving success in key business objectives. As such it is
the Company’s policy to provide colleagues with appropriate financial and
other information about the business, encouraging employee
engagement, and to enthuse and inspire its workforce through a network
of media such as:
(cid:129)
(cid:129)
business networking tools whereby we encourage synergies among
colleagues and the businesses, sharing ideas and best practices;
the notification internally of vacancies and policy updates; and
(cid:129) monthly operational meetings for business leaders across the Group
to engage with colleagues, providing business and local updates, and
encouraging interactive feedback to ensure they are kept informed of
the Group’s performance and of the financial and economic factors
affecting the Company’s and the Group’s performance.
Despite the Group’s de-centralised approach, the Company ensures
that it has a common culture among the workforce throughout the entire
Group achieved through openness, honesty and a common goal, focused
on core values.
We support and protect human rights wherever we can. As a responsible
company with operations across the world, we believe that strong ethics
and good business go hand-in-hand and we are committed to complying
with the laws and regulations of the countries and jurisdictions in which
we operate.
Equal opportunities and diversity
The Company is an equal opportunities employer and is committed to the
equality of career opportunities for all of its employees without discrimination,
with fair and equitable policies and procedures for recruitment, training and
development. Full consideration is accorded to all applications from disabled
persons, having due regard to their aptitudes and abilities.
The Company ensures that wherever possible the continued employment
of those employees who become disabled during their engagement is
retained through a supportive mechanism of retraining, redeployment and
reasonable adjustments, enabling them to remain within the Group.
Opportunities for training, career development and progression into and
within the Group do not operate to the detriment of disabled persons.
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Health and safety
We are committed to ensuring that customers, site-owners and
employees are free from risk from products operated by the Group.
In addition to these moral and ethical considerations, we believe that the
effective management of health and safety is an essential ingredient for
successful business performance. The commitment to the safety of our
customers and business partners is achieved through a network of trained
service operatives who routinely service installed equipment on customers’
sites as well as conducting periodic safety inspections and tests.
Customers and site-owners are able to raise any safety concerns directly
through our own call centres, which will immediately inform management
and direct an operative to the site within 24 hours.
New products from external suppliers are assessed to ensure that they meet
the relevant safety standards before being placed on the market.
Where appropriate, we will work with our suppliers, sharing the benefit of our
many years’ experience to develop products with the greatest level of safety.
Photobooth security is managed by a multipoint locking system with
either one or two security padlocks depending on the actual model.
Our photobooths meet current electrical standards through a declaration
of conformity (DOC) and Conformité Européene (CE) marking confirming
Restriction of Hazardous Substances (RoHS2) product compliance.
Our experienced engineers also test equipment regularly to ensure it
meets both Portable Appliance Testing (PAT) and ADIPS (Amusement
Device Inspection Procedures Scheme) standards.
Children’s rides manufactured by Jolly Roger (Amusement Rides) Limited,
a subsidiary company in the UK, are produced in accordance with the
industry guidance issued by BACTA (British Amusement and Catering
Trades Association). This supplements the various British, European
and International standards that apply to children’s rides and ensures
a minimum standard of quality and safety. The Company is also
a registered inspection body within the UK of the ADIPS Scheme
administered by BACTA and enables its qualified operatives to
inspect children’s rides and issue the required safety certification.
Within the UK, the general manager fully supports the Health and Safety
policy and has ensured that there is provision within the agenda of regular
senior executive meetings to address health and safety matters.
The policies and procedures developed over the years continue to be
reviewed and adjusted as part of the process of continual improvement as
well as keeping pace with legislative change. We believe that it is important
to empower individuals at all levels and give them the tools and skills they
require, through providing relevant training and information, if we are to
achieve the standard of health and safety performance to which the
Company aspires. The Company also continues to improve the employee
induction process and has introduced an alternative on-line training system
supplied by Essential Skillz in 2014 to train and refresh employee skills as
required with the database now showing over 2,300 training sessions.
The Company continues to maintain its membership with the British
Safety Council and is also a member of the CE Marking Association.
As well as demonstrating our commitment to safety and environmental
best practice and continual improvement, these continued partnerships
provide us with access to expert advice and quality training resources
which assist us in achieving these goals.
In the UK, the Company is accredited under the SAFEcontractor scheme
and has also received an Altius assured Vendor award. This accreditation
is reviewed annually and requires that all of our Health and Safety policies
and procedures are audited by the scheme.
Environment
The Company recognises its responsibilities towards the environment and
the impact of its business activities. The main risks to the business in this
area arise from increasing legislation and the cost of waste disposal.
The Company has mitigated the exposure to these risks by:
(cid:129)
(cid:129)
consistently reducing, in previous years, the amount of obligated
waste produced. During the current year, the UK operations were
able to maintain the gains previously achieved; and
the recovery, refurbishment and resale of electrical equipment such
as children’s rides which promote the principle embodied in recent
legislation of reuse before recycling. This not only produces cost
savings but also creates a source of income.
Where possible we endeavour to embrace technological advances
to reduce the impact of our operations on the environment.
Such initiatives include:
(cid:129)
(cid:129)
(cid:129)
(cid:129)
the ability to automatically shut down (and restart) photobooths during
closing hours which saves around 30% of power consumption on site;
the use of remote telemetry systems to minimise the number of
service visits and reduce wastage of consumables;
the substitution of old-technology lighting with new low-energy lamps
in all photobooths. The new Photobooth by Starck uses the latest
LED lighting which also eliminates the hazardous waste associated
with fluorescent tubes;
the replacement of the majority of old CRT monitors with new
flat-screen technology which is more energy-efficient and also
eliminates the associated hazardous waste; and
(cid:129)
the development of equipment that uses solar power.
Although we are not presently exposed to material risks related to climate
change, we are taking proactive steps to ensure that our energy use and
demand on natural resources are reduced wherever possible. In addition
to the examples highlighted above, the Company operates a green fleet
policy which specifies that vehicles are sourced according to practicality
and environmental impact as defined in terms of CO2 emissions. We have
achieved the target set last year of further reducing vehicle CO2 ratings by
3%, to a total of 19% compared with the 2008 fleet, which will save 139
tonnes of CO2 from entering the atmosphere each year. This is supported
by the Company’s Road Risk Policy which assists in reducing fuel
consumed as well as an overall reduction in the number of miles driven.
Greenhouse gas (GHG) emissions
Reporting of GHG emissions
As of 1 October 2013, all quoted companies have to report their GHG
emissions in their annual report as required by the Large and Medium-
sized Companies and Groups (Accounts and Reports) Regulations 2008
(as amended).
In accordance with the disclosure requirements for listed companies,
the table below shows the Group’s greenhouse gas emissions for the
current and preceding financial year.
The requirement is for the Group to report the emissions that it is
responsible for (as defined below), and to provide at least one ‘intensity
ratio’, together with an explanation of the methodology used.
We recognise that all employees have an important contribution to make
in the ongoing development and implementation of our Health and Safety
policies and procedures. This is reflected in the representation from all
levels of the business on the Health and Safety Committee.
In the table below the Group has not reported fugitive emissions (which
includes leakages from refrigerants used in air conditioning units, etc.)
because no data were available and based on the low number of such units
in the Group, management deemed such emissions not to be material.
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Viability Statement
The directors have assessed the viability and prospects of the Group
in accordance with the requirements of the 2014 revision of the UK
Corporate Governance Code. In doing so, the directors have considered
and taken into account the Group’s present position and the principal risks
facing it the latter being set out in the Strategic Report. The directors have
carried out their assessment by: (i) considering the potential repercussions
of those principal risks at least annually as well as the risk impact of each
major event or transaction; (ii) examining the effectiveness of the actions
taken to mitigate the principal risks; (iii) continually reviewing strategy and
market developments through regular executive briefings; and (iv) taking
into account the Group’s operational processes and financial resources.
Based on this robust assessment, the directors have a reasonable
expectation that the Group will be able to continue in operation and
meet its liabilities over a three-year period to June 2019.
The directors decided that a three-year period is appropriate for this
assessment because it enables a good level of confidence due to a
number of factors including: (i) the Group’s considerable financial
resources including the high cash generation of its operations; (ii) the
inherent unlikelihood of all or even most of the identified potential
principal risks materialising simultaneously; (iii) the length of major
operating contracts; (iv) the Group’s diverse geographical operations plus
its established business relationships with many customers and suppliers
in countries throughout the world; and (v) its proven track record in R&D
development and its ability to adapt to market trends.
The directors have no reason to believe the Group will not be viable over
a longer period, however, given the inherent uncertainty involved in looking
at longer time frames, the period over which the directors consider it
possible to form a reasonable expectation as to the Group’s longer-term
viability is three years.
By order of the Board
Del Mansi
Company Secretary
21 June 2016
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Corporate Responsibility Statement
(forming part of the Report of the Directors)
continued
Greenhouse gas (GHG) emissions
Year ended Year ended
30 April 2016 30 April 2015
Tonnes Tonnes
of CO2e of CO2e
Emissions from
Scope 1 4,372.99 4,985.92
Scope 1 – travel costs 3,882.59 4,681.04
Scope 1 – gas 490.40 304.88
Scope 2 18,324.59 17,564.97
Scope 2 – operating estate 17,789.42 16,825.27
Scope 2 – electricity, heat, steam or cooling 535.17 739.70
Total emissions 22,697.58 22,550.89
Intensity ratio
Per number of units of operating equipment 0.4986 0.5048
There has been a slight increase (0.65%) in the Group’s total Greenhouse Gas emissions during the year ended 30 April 2016 compared with that
of the year ended 30 April 2015. There is a reduction in scope 1 emissions - mainly travel costs, reflecting the Group’s policy to use efficient Co2 car
fleets offset by an increase in scope 2 emissions - mainly electricity used in the operating estate.
The increase in scope 2 emissions is due in part to an increase in the number of laundry units in operation. The Group continues to invest in efficient
energy-saving equipment.
The Group’s intensity measure, based on the average number of units of operating equipment, shows a reduction in the year ended 30 April 2016
compared with the preceeding year from 0.5048 to 0.49858.
in addition, the Company complies with its obligations under the Government’s Energy Savings Opportunity Scheme. The Group’s long-term aim
is to reduce its carbon footprint, but it has not set any specific targets.
Assessment parameters
Consolidation approach The figures above are based on subsidiary companies owned by Photo-Me, with the exception of those
non-material subsidiary companies, each of whose vending estate comprises less than 50 machines,
being mainly new start-up ventures.
For those investments where the Group has less than 50% of the issued share capital, the Group does not
have operational control for day-to-day activities and these entities are not included in the above figures.
Boundary summary The Group has included its vending estates which are owned by the Group even though it does not directly
control the operational use (i.e. period of operation) for these assets.
Emission factor source DEFRA (2014) (2014: DEFRA (2013)) Guidelines to DEFRA/DECC’s GHG Conversion Factors
for Company Reporting.
Methodology Photo-Me followed the Greenhouse Gas Protocol Corporate Standard.
Materiality threshold As mentioned above, subsidiary companies with less than 50 units of operating equipment have been excluded,
as have depots and other property units where the total amount spent on heat, light and power is less than
£50,000 per annum per site.
Intensity ratio As explained below.
Scope 1 emissions
The main components of these emissions are:
(cid:129)
Emissions from motor vehicles operated by the Group, including service and installation personnel (servicing and maintaining the operational estate etc.)
and administrative staff.
(cid:129) Natural gas consumption on the Group’s premises.
Scope 2 emissions
The main components of these emissions are:
(cid:129)
Purchased electricity for use in the Group’s premises. This is mainly for heating and lighting. The Group’s property estate largely consists
of administrative offices and storage depots. Most manufacturing of vending equipment and products are outsourced to third parties,
where emissions are controlled by third parties.
(cid:129)
Emissions from vending equipment.
The Group’s chosen intensity ratio for external reporting is total emissions divided by the average number of units of operating equipment
during the year for the reporting companies.
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Corporate Governance
Personal
identification...
Assisting the Japanese
Government by developing a new
ID system in our photobooths,
utilising a QR code reader, for the
new My Number card.
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...helping to manage social
administration.
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Board of Directors
& Company Secretary
John Lewis OBE
Non-executive Chairman
Serge Crasnianski
Chief Executive Officer &
Deputy Chairman
Appointed to the Board in 2009. Previously
served on the Board from 1990 to 2007; until
1994 as a Non-executive Director, from 1994
as an Executive Director and as
Chief Executive Officer from 1998 to 2007.
Founded KIS in 1963.
Joined the Board in 2008 and appointed
Chairman in 2010. Chairman of the
Nomination Committee and a member of the
Audit and Remuneration Committees.
Currently a consultant to Messrs Eversheds
and a Director of AIM market company, Prime
People plc as well as various private
companies. Previously a practising solicitor
and partner in Lewis Lewis and Co which
became part of Eversheds after a series of
mergers. Also previously served as Chairman
of Cliveden Plc and Principal Hotels plc and as
Vice Chairman of John D Wood & Co plc and
Pubmaster Group Ltd.
Françoise Coutaz-Replan
Non-executive Director
Yitzhak Apeloig
Non-executive Director
Emmanuel Olympitis
Non-executive Director
Appointed to the Board in 2009. Retired from
her executive role as Group Finance Director
on 27 August 2015, continuing as a Non-
executive Director. Joined KIS in 1991.
Appointed to the Board in 2012. A qualified
accountant and Managing Partner of ATE
Technology Equipment B.V., a private equity
firm active mainly in Israel. Chairman of Leader
Holdings and Investments Ltd and Director of
Leader Capital Markets Ltd (all quoted on the
Israeli Tel Aviv Stock Exchange). Chairman or
Director of a number of other private
companies. Previously Executive Chairman of
Telit Communications plc, having led its
flotation on the London AIM market in 2005.
Jean-Marcel Denis
Non-executive Director
Del Mansi
Company Secretary
Appointed to the Board in 2009. Senior
Independent Non-executive Director,
Chairman of the Remuneration Committee
and a member of the Nomination and Audit
Committees. Previous directorships include
China Cablecom Holdings Limited (NASDAQ),
Canoel International Energy Limited (Canada),
Matica plc, Secure Fortress plc, Bulgarian
Land Development plc, Norman 95 plc,
Pacific Media plc (Executive Chairman) and
Bella Media plc (Chairman). Early career in
merchant banking and financial services,
including as Executive Director of Bankers
Trust International Ltd, Group Chief Executive
of Aitken Hume International plc and Executive
Chairman of Johnson & Higgins Ltd.
Appointed to the Board in 2012. Chairman of
the Audit Committee and a member of the
Nomination and Remuneration Committees.
Founded his own auditing firm in 1970 in
Paris; Auditeurs & Conseils Associes (ACA)
and sold his interest in ACA in 2005.
Subsequently a consultant in Finance &
Conseils Associes, which specialises in
business valuations.
Joined the Group in 2006. A qualified solicitor.
Served as interim Company Secretary from
April to July 2008. Appointed Group General
Counsel in 2009, a role retained upon being
appointed Company Secretary in May 2013.
Report of the Directors
The directors submit to the
shareholders their report, the
audited consolidated financial
statements of the Group and
such audited financial statements
of Photo-Me International plc
as required by law for the year
ended 30 April 2016.
The Corporate Governance Statement and the Corporate Responsibility
Statement should be read as forming part of this report. In this document,
references to “The Group”, “The Company”, “we”, or “our”, refer to Photo-
Me International plc, its subsidiary companies and, where applicable,
its associated undertakings, or any of them as the context may require.
Principal activities
The principal activities of the Group continue to be the operation, sale
and servicing of a wide range of instant-service equipment. The Group
operates coin-operated automatic photobooths for identification and fun
purposes, and a diverse range of vending equipment, including digital
photo kiosks, amusement machines, business service equipment and
laundry machines.
The Company’s subsidiary and associated undertakings are shown
on page 99.
Results and dividends
The results for the year are set out in the Group Statement of
Comprehensive Income on page 48.
The directors recommend a final dividend of 3.285p per ordinary share
which, if approved at the Annual General Meeting on 20 October 2016,
will be paid on 10 November 2016 to shareholders on the register at the
close of business on 7 October 2016. The ex-dividend date will be 6
October 2016. This, together with the interim dividend of 2.575p per
ordinary share paid on 12 May 2016 makes a total dividend for the year
of 5.86p per ordinary share.
In addition, a special dividend of 2.815p per ordinary share will be paid
on the same date as the final dividend, above.
Review of the business and future developments
The Strategic Report describes the activities of the business during the
financial year, recent events (including any important events affecting the
Group which have occurred since the financial year end), and gives an
indication of likely future developments in the Group’s business.
A discussion of the key risks facing the Group and an analysis of key
performance indicators are also provided in the Strategic Report. The
Strategic Report also contains the Board’s Long-term Viability Statement.
Research and development
The Group is committed to its research and development programme
in order to maintain its introduction of innovative products to the market.
The expenditure incurred on the development of new products is shown
in notes 4 and 11 to the financial statements.
Employees
Information on the Company’s employment practices including its policy
regarding applications for employment by disabled persons, for the
continuing employment of employees who have become disabled, and
the training, career development and promotion of disabled persons
employed by the Company, as well as employee communication and
involvement, is contained within the Corporate Responsibility Statement
on pages 16 to 18 forming part of this report.
Corporate responsibility
A summary of the Company’s approach to corporate social responsibility
and environmental matters, including a report on the Group’s greenhouse
gas emissions for the financial year ended 30 April 2016, can be found in
the Corporate Responsibility Statement on pages 16 to 18.
Board of directors and their interests
The current directors of the Company are: John Lewis (Chairman,
member of the audit and remuneration committees, and chairman of the
nomination committee); Serge Crasnianski (Chief Executive Officer and
Deputy Chairman); Emmanuel Olympitis (Senior Independent Non-
executive Director, Chairman of the Remuneration Committee and a
member of the Nomination and Audit Committees); Françoise Coutaz-
Replan (Non-executive Director); Jean-Marcel Denis (Chairman of the
Audit Committee and a member of the Nomination and Remuneration
Committees); and Yitzhak Apeloig. Further details, together with a brief
biography of each director, can be found on page 22. All directors
served on the Board throughout the year under review.
In addition to the powers conferred on the directors by law, the
Company’s Articles of Association also set out powers of the directors; in
particular, under these powers, the directors may, subject to any statutory
provision requiring prior shareholder approval, exercise all powers of the
Company to borrow money, issue shares, appoint and remove directors
and recommend dividends and pay interim dividends. A copy of the
Articles of Association can be found on the Company’s website.
The director retiring by rotation and being put forward for re-appointment
at the Annual General Meeting this year is Mr Emmanuel Olympitis.
Details of the directors’ contracts, emoluments and interests in shares and
share options are given in the Remuneration Report on pages 30 to 42.
Directors’ and officers’ liability insurance
The Company maintained directors’ and officers’ liability insurance cover
throughout the financial year. This insurance cover extends to directors
and officers of subsidiary undertakings and remains in force.
Article 191 of the Company’s Articles of Association allows the
indemnification of directors of the Company and associated companies
and of directors of a company that is the trustee of an occupational
pension scheme for employees of the Company or an associated
company against liability incurred by them in certain situations, and would,
if granted, constitute a “qualifying indemnity provision” within the meaning
of Section 236 (1) of the Companies Act 2006. No such indemnities have
been granted.
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Report of the Directors
continued
Substantial shareholders
As at 21 June 2016, the Company has been notified of the following
disclosable interests in the ordinary shares of the Company:
Number of % of total Nature
ordinary shares voting rights of holding
Serge Crasnianski
(director) 79,783,450 21.25 * Direct/indirect
Schroders plc 56,298,107 14.99 Indirect
Dan David Foundation 45,579,318 12.14 Direct
FIL Limited 29,660,825 7.90 Indirect
* Except for 63,750 Ordinary shares held in his own name, the interest in which
is direct, the remaining shares are registered in the name of Tibergest S.A.,
and Mr Crasnianski’s interest in those remaining shares is indirect.
Except for the above, the Company has not been advised of any
shareholders with interests of 3% or more in the issued ordinary share
capital of the Company as at such date.
Share capital
The issued share capital of the Company, plus details of the movements in
the Company’s issued share capital during the year, is shown in note 20 to
the financial statements. Each ordinary share of the Company carries one
vote at general meetings of the Company.
Authority to purchase shares
Pursuant to a resolution passed at its 2015 Annual General Meeting,
the Company is authorised to purchase its own shares in the market.
The Company will seek approval at the 2016 Annual General Meeting to
renew the authority for the Company to make market purchases of up to
10% of its own ordinary shares at a maximum price per share of not more
than the higher of: (a) an amount which is not more than 5% above the
average of the closing middle market quotations for an ordinary share
(derived from the London Stock Exchange Daily Official List) for the five
business days immediately before the date on which that ordinary share is
contracted to be purchased, or (b) the higher of the price of the last
independent trade or the highest current independent bid on the London
Stock Exchange at the time the purchase is carried out. This authority will
expire on the earlier of 18 months from the passing of the relevant special
resolution or the conclusion of the following Annual General Meeting.
The Company made no repurchases of shares in the year ended
30 April 2016.
Additional information
Where not provided elsewhere in the Report of the Directors, the following
provides the additional information required to be disclosed in the Report
of the Directors.
The structure of the Company’s share capital including the rights and
obligations attaching to the shares is set out within note 20 to the
financial statements.
No person holds securities carrying special rights with regards
to control of the Company.
There are no restrictions on the transfer of ordinary shares in the capital
of the Company other than certain restrictions which may from time to
time be imposed by law, for example, insider trading law. In accordance
with the Listing Rules of the Financial Conduct Authority, certain employees
are required to seek the approval of the Company to deal in its shares.
On a show of hands at a general meeting of the Company, every holder of
ordinary shares entitled to vote and who is present in person or by proxy
shall have one vote and on a poll, every member present in person or by
proxy and entitled to vote shall have one vote for every ordinary share held
(except as otherwise stated in Article 81 of the Company’s Articles of
Association). Any notice of general meeting issued by the Company will
specify deadlines for exercising voting rights and in appointing a proxy or
proxies in relation to resolutions to be passed at the general meeting.
All proxy votes are counted and the numbers for, against or withheld in
relation to each resolution are announced at the general meeting and
published on the Company’s website after the meeting. Proxy
appointment and voting instructions must be received by the Company’s
registrars not less than 48 hours before a general meeting.
Under its Articles of Association, unless the Board otherwise determines,
no member shall be entitled to vote in respect of any share unless all calls
or other sums presently payable by them in respect of that share shall
have been paid.
The Company is not aware of any agreements between shareholders
that may result in restrictions on the transfer of shares or on voting rights.
The rules governing the appointment of directors are set out in the
Corporate Governance Statement on pages 26 to 29.
The Company’s Articles of Association may only be amended by a special
resolution at a general meeting of shareholders.
The Company is party to a number of agreements with site-owners
(such as major supermarket chains) which could be terminable by the
site-owners following a change of control of the Company.
There are no agreements between the Company and its directors
or employees which provide for compensation for loss of office or
employment (whether through resignation, purported redundancy
or otherwise) that occurs because of a takeover bid.
The Company is not aware of any contractual or other agreements
which are essential to its business which ought to be disclosed in
this Report of the Directors.
Related-party transactions
Details of related-party transactions are set out in note 28 to the
financial statements.
Financial instruments
Details of the financial risk management objectives and policies of the
Group and exposure of the Group to foreign exchange risk, interest rate
risk and liquidity risk are given in note 15 to the financial statements.
Political donations
No member of the Group made any political donations during the
year ended 30 April 2016.
Going concern
Having reviewed forecasts, cash flow, financial resources and financing
arrangements and after making enquiries, the directors consider that the
Company and the Group have adequate resources to remain in operation
for the foreseeable future. Accordingly, the directors continue to adopt the
going concern basis in preparing the financial statements.
Disclosure of information to the auditor
The directors who held office at the date of approval of this Report of the
Directors confirm that: so far as they are each aware, there is no relevant
audit information of which the Company’s auditor (KPMG LLP) is unaware;
and each director has taken all the steps that he or she ought to have
taken as a director to make himself or herself aware of any relevant audit
information and to establish that the Company’s auditor is aware of
that information.
Auditor
In accordance with section 489 of the Companies Act 2006, a resolution
for the re-appointment of KPMG LLP as auditor of the Group is to be
proposed at the forthcoming Annual General Meeting.
Annual General Meeting
The Company’s Annual General Meeting this year will be held at noon on
20 October 2016 at The Thatcher’s Hotel, Guildford Road, East Horsley,
Surrey KT24 6TB.
Notice of the Annual General Meeting is sent to all shareholders of the
Company, as well as to persons nominated by a shareholder of the
Company to enjoy information rights. The Notice convening the meeting
provides full details of all the resolutions to be proposed, together with
explanatory notes for both the ordinary and special business. Copies of
this Annual Report are sent only to shareholders who have requested
or request a copy.
By order of the Board
Del Mansi
Company Secretary
21 June 2016
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Corporate Governance Statement
(forming part of the Report of the Directors)
Statement of compliance with the UK
Corporate Governance Code
The Financial Conduct Authority requires listed companies incorporated
in the United Kingdom to include in their annual financial report (i) a
statement of how they have applied the main principles set out in the
UK Corporate Governance Code (the “Code”) and (ii) a statement as to
whether they have complied throughout the accounting period with all
relevant provisions set out in the Code. The directors consider that the
Company has, throughout the year ended 30 April 2016, complied with
those provisions of the September 2014 edition of the Code that are
applicable to it. The Code and associated guidance are available on the
Financial Reporting Council website at www.frc.org.uk.
Explanations of how the principles have been applied and the provisions
complied with are set out below.
The Group’s business model and strategy
The Group’s business model and strategy are summarised on pages
4 to 5, and describe, amongst other things, how the Company generates
and preserves value over the longer term and the strategy for delivering
the objectives of the Company.
The Board
Board composition
Throughout the year under review, the Board comprised the same six
directors, being the Non-executive Chairman, the Chief Executive Officer,
and four Non-executive Directors, three of whom the Board considers to
be independent, namely Emmanuel Olympitis, Jean-Marcel Denis and
Yitzhak Apeloig, and one whom the Board considers to be non-
independent because of her previous employment by the Company,
namely Françoise Coutaz-Replan. Ms Coutaz-Replan resigned as an
employee of the Group in August 2015.
The Chairman
The Chairman has the overall responsibility for managing the Board.
The Chief Executive Officer has responsibilities for strategy, operations
and results. Clear division of responsibility exists such that no one individual
or group of individuals can dominate the Board’s decision-making process.
Throughout the year under review, John Lewis served as Chairman and
Serge Crasnianski served as Chief Executive Officer and Deputy Chairman.
Director independence
The Board structure has complied with the Code provision that, as a
“smaller company” (as defined by the Code), the Company has three
independent Non-executive Directors excluding the Chairman.
On his appointment in March 2012, the Nomination Committee took
the view (out of caution) that because of Mr Apeloig’s then current and
previous business relationships with the Dan David Foundation and
Mr Philippe Wahl, both of whom either directly or indirectly were major
shareholders in the Company, he should not be considered as
independent (the Dan David Foundation remains a major shareholder).
These relationships of Mr Apeloig were indirect through his association
with other entities.
This view was reached even though (i) Mr Apeloig held no mandate from
either of those shareholders, (ii) would not be representing them, and (iii)
would not be reporting back to them (a state of affairs which has never
changed throughout his tenure of office as a director of the Company).
Since Mr Apeloig’s appointment, the Group has transacted business
with one entity of which Mr Apeloig is a director, and in which the Dan
David Foundation and Mr Philippe Wahl have ownership interests, namely
Fomat Limited, a company incorporated in Israel. The business which
Fomat Limited transacted with the Group has been minimal (the total
value of such business transactions for the financial years ended
30 April 2013 and 2014,was £23,098, and £17 respectively, and £nil for
both of the financial years ended 30 April 2015 and 2016).
Accordingly, given the above the Nomination Committee reassessed
Mr Apeloig’s status in 2015 and concluded that he should be considered
as being an independent Non-executive director. The Committee keeps
the situation under observation in case of any change but it is not
expecting any such change.
The Senior independent director
Emmanuel Olympitis has served as the Company’s Senior Independent
Non-executive Director throughout the period.
If a new director were to be appointed, the Board would ordinarily appoint
someone who it believes has sufficient knowledge and experience to fulfil
the duties of a director. If this were not the case, an appropriate training
course would be provided. An appropriate induction programme is
undertaken for all newly-appointed directors. All directors have access to
the advice and services of the Company Secretary. Any director wishing to
do so in furtherance of his or her duties, may take independent advice at
the Company’s expense. All directors are required to stand for re-election
every three years and newly appointed directors are subject to election by
shareholders at the first Annual General Meeting after their appointment.
Directors’ conflicts of interest
During the year, directors completed questionnaires in respect of their
interests. The Board will continue to monitor and review actual or potential
conflicts of interest on a regular basis and will consider whether or not it is
appropriate to authorise any such conflicts.
Board evaluation
The Chief Executive Officer and the Chairman review the performance of
other Executive Directors. The Chairman reviews the performance of the
Chief Executive and each Non-executive Director. The Non-executive
Directors, led by the Senior Independent Non-executive Director, evaluate
the performance of the Chairman taking into account the views of the
Executive Directors. During the year, the Chairman met with the Non-
executive Directors without the Executive Directors being present.
An internal process to assess the effectiveness of the Board was
undertaken during the year, consisting of a confidential survey. Areas that
were identified in which there was considered to be room for improvement,
will be addressed by the Board during the current year.
The Board had five meetings during the year under review.
The attendance of directors at those meetings and meetings of Board Committees is set out below.
Audit Remuneration Nomination
Board Committee Committee Committee
Number of meetings held 5 3 2 0
Number of meetings attended (maximum possible)
Director
J Lewis 5 (5) 3 (3) 2 (2) 0 (0)
S Crasnianski 5 (5) n/a n/a n/a
Y Apeloig 5 (5) n/a n/a n/a
F Coutaz-Replan 4 (5) n/a n/a n/a
J-M Denis 5 (5) 3 (3) 1 (2) 0 (0)
E Olympitis 5 (5) 3 (3) 2 (2) 0 (0)
External auditor
The Audit Committee meets with the external auditor, without executive
directors present, at least once a year. On behalf of the Board, the
Committee reviews the Group’s accounting and financial reporting
practices, the reports of the internal auditor and external auditor, and
compliance with policies, procedures and applicable legislation. In
addition, the Committee monitors the effectiveness of both the external
and internal audit functions and reviews the Group’s internal financial
control systems and reporting processes, and risk management
procedures. The Committee considers the appointment of the external
auditor and makes a recommendation on the audit fee to the Board; it
assesses the effectiveness of the external auditor by means of an internal
review process assisted by a confidential questionnaire; it sets a policy for
safeguarding the independence of the external auditor and reviews the
external auditor’s work outside of the audit itself, taking into account the
nature of the work, the size of the fees and whether it is appropriate for the
external auditor to carry out such work. Details of audit and non-audit fees
are provided in note 4 to the financial statements.
KPMG LLP has been the external auditor of the Group since the Annual
General Meeting in September 2013. The Audit Committee is satisfied
with the effectiveness, objectivity and independence of the external
auditor. Accordingly, a resolution will be proposed at the forthcoming
Annual General Meeting for KPMG LLP’s re-election as auditor for the
coming year. From the year ended 30 April 2009 until the Annual General
Meeting in September 2013, KPMG Audit Plc was auditor, having been
selected as a result of a competitive tender in 2008. The Board is
committed to putting the audit contract out to tender at least once
every ten years.
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Operation of the Board
The Board is normally scheduled to meet four or five times a year, with
ad hoc meetings convened to deal with urgent matters. The Board has
a formal schedule of matters reserved to it for decision. These include
approval of the financial statements, dividend policy, major acquisitions
and disposals and other transactions outside delegated limits, significant
changes in accounting policies, the constitution of Board Committees,
risk management and corporate governance policy.
The Board has delegated various matters to Committees, as detailed
below. These Committees of the Board meet regularly (the Nomination
Committee meets as required) and deal with specific aspects of the
management of the Company. The Board has delegated authority to the
Committees and they have defined terms of reference which are available
on the Company’s website (www.photo-me.co.uk). Decision making
relating to operational matters is delegated to senior management.
Board and Committee papers are circulated in advance of each meeting
and are supplemented by reports and presentations to ensure that Board
members are kept fully informed.
Board Committees
The Audit Committee
The Audit Committee consists entirely of Non-executive directors. For the
whole of the year under review, Jean-Marcel Denis (Committee Chairman),
Emmanuel Olympitis (Senior Independent Director) and John Lewis
(Chairman of the Board) served on the Committee. The composition of the
Committee was compliant with the Code, which permits a smaller
company’s Chairman to be a member of the Audit Committee providing
he was considered independent on appointment as Chairman. The Board
considers that both Emmanuel Olympitis and Jean-Marcel Denis have
suitable recent and relevant financial experience to satisfy the
requirements of the Code.
Meetings are normally held at least twice a year. Three meetings were held
during the year under review. Other directors (the Chief Executive Officer,
Ms Coutaz-Replan (the Group’s former Finance Director), Yitzhak Apeloig,
who is a qualified accountant) together with the Chief Financial Officer and
representatives of the external auditor are generally invited to attend
meetings, as is the Group’s internal auditor when required. The Group’s
internal auditor is in regular contact with the Chairman of the Audit
Committee and delivers regular reports. The minutes of the meetings
are available to all directors.
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Corporate Governance Statement
(forming part of the Report of the Directors)
continued
Key matters considered
During the last financial year, the Committee met to review the results of
the external audit for the previous financial year, the external auditor’s half-
year review and the audit plan for the audit for the year ended 30 April
2016. In June 2016, the Committee met to review this annual report and
to receive the external auditor’s update and report on its audit activity.
The Committee’s primary areas of focus have been:
(cid:129)
The carrying value of operating equipment and the potential
impairment of these assets.
How this was addressed: the Committee reviewed the assumptions made
for the assessment of future discounted cash flows of the operating assets
per country and per category. The review included the discount rate applied,
the achievability of the forecasts as compared with the past performance,
as well as the impact of external changes in markets or regulations.
the integrity, completeness and consistency of financial reporting,
including the adequacy, clarity and appropriateness of disclosures;
The Committee’s Terms of Reference are available on the
Company’s website.
(cid:129)
(cid:129)
(cid:129)
the areas where significant judgments and estimates are required
in the financial statements;
the scope and programme of audits, along with the quality
and effectiveness of audit processes so that they complement
the other risk management activities within the Group;
(cid:129)
the materiality level to apply to the audit; and
(cid:129) whether the going-concern basis of accounting should continue
to apply in the preparation of the annual financial statements.
The preparation of financial statements requires management to
make assumptions, judgments and estimates which are detailed
in note 1 to the financial statements. The key areas of assumptions,
judgments and estimates that have been monitored and considered
by the Committee were:
(cid:129)
The carrying value of the GBP denominated goodwill in connection with
the Japanese subsidiary and the potential impairment of this asset.
How this was addressed: the determination of whether or not goodwill
has to be impaired requires a review of the value in use of the asset.
The main judgments in relation to the review were considered to be the
achievability of the budget, the discount rate being applied to projected
future cash flows and the potential impact of the volatility of the Japanese
Yen. The calculation of the value in use was undertaken in April 2016 and
the Committee considered the conclusions and sensitivity calculations that
had been undertaken as part of the review.
(cid:129)
The appropriateness and valuation of provisions.
How this was addressed: provisions for termination of employment: the
main judgments were considered to be the average potential claim per
person and the period of lapse for the claims. The Committee reviewed
all the legal documentation and the methodology of calculation.
Provision for litigation: the main judgments were considered to be the
probable outcome of claims, including the potential exposure. The
Committee has reviewed the arguments contained in the documents
initiating the legal processes and the correspondence with the lawyers.
The Remuneration Committee
During the year under review, the Remuneration Committee comprised
Emmanuel Olympitis (Committee Chairman), Jean-Marcel Denis and
John Lewis (Chairman of the Board). Thus the composition of the
Committee was compliant with the provisions of the Code which require
the Remuneration Committee of a smaller company to comprise at least
two independent Non-executive directors with the Chairman of the Board
additionally being permitted to serve as a member providing that he was
considered independent on his appointment as Chairman.
The Committee meets at least once per year. Two meetings were held
in the year ended 30 April 2016.
The Committee makes recommendations to the full Board in respect of
the Group’s remuneration policy. The Committee also keeps under review
the remuneration of the Chairman, the Group’s Executive directors and
senior executives, to ensure that they are rewarded fairly for their
contribution. The Committee also makes awards under the Executive
Share Option Scheme. The Committee’s Terms of Reference are available
on the Company’s website.
The Remuneration Report on pages 30 to 42 provides details of how
the Committee applies the directors’ remuneration principles of the Code.
The Nomination Committee
During the year under review, the Nomination Committee comprised
John Lewis (Committee Chairman), Emmanuel Olympitis and
Jean-Marcel Denis. Thus the composition of the Committee was
compliant with the applicable provision of the Code which requires
the Nomination Committee of a smaller company to have a majority of
independent Non-executive directors with the Chairman of the Board
additionally being permitted to serve on the Committee as a member
or as Chairman.
The Committee, which meets as required, makes recommendations to
the Board on the appointment of new directors. The Committee had
several discussion sessions during the year ended 30 April 2016, but as
no new candidates were considered for appointment to the Board during
that period, the Committee held no formal meetings.
The Nomination Committee is committed to the pursuit of diversity,
including gender diversity, throughout the business. Appointments to the
Board are made on merit, against objective criteria and with due regard
for the benefits of diversity on the Board, including gender diversity.
The Nomination Committee does not commit to any specific targets.
The Group’s Diversity Policy also recognises the benefits of diversity.
The Nomination Committee will also ensure that its development in this
area is consistent with the Group’s current and future requirements,
enhances Board effectiveness and reflects the Company’s UK listing
and the international activity of the Group.
Internal control and risk management in relation
to the financial reporting process
The Group has a thorough assurance process in place in respect of
the preparation, verification and approval of periodic financial reports.
This process includes:
(cid:129)
(cid:129)
(cid:129)
(cid:129)
(cid:129)
(cid:129)
the involvement of qualified, professional employees with an
appropriate level of experience (both in Group Finance and
throughout the business);
formal sign-offs from appropriate business segment managing
directors and finance directors;
comprehensive review and, where appropriate, challenge from
key internal Group functions;
a transparent process to ensure full disclosure of information
to the external auditor;
engagement of a professional and experienced firm
as external auditor;
(ii)
oversight by the Audit Committee, involving (amongst other duties):
(i)
a detailed review of key financial reporting judgments which have
been discussed by management;
review and, where appropriate, challenge on matters including:
the consistency of, and any changes to, significant accounting
policies and practices during the year; significant adjustments
arising as a result of the external audit; the going concern
assumption; and the Company’s statement on internal control
systems, before endorsement by the Board.
The above process, together with the review by the Audit Committee of
a comprehensive note that sets out the details of the preparation, internal
verification and approval process for the Annual Report and Accounts,
provide comfort to the Board that the Annual Report and Accounts, taken
as a whole, are fair, balanced and understandable, and give the information
necessary for shareholders to assess the Group’s position and
performance, business model and strategy.
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Shareholder communication and engagement
The Chief Executive Officer has regular meetings with the Company’s
major institutional shareholders to help ensure, amongst other things, that
the Board develops an understanding of the views of major shareholders
about the Company and the Group.
The Chairman also meets with major shareholders and has contact
with them, as and when required. The Senior Independent Non-executive
Director and, where appropriate, other Non-executive directors, are also
made available to meet with major shareholders on request. Any pertinent
feedback arising from such meetings is reported to the Board at its regular
meetings and/or by correspondence or dialogue.
Private investors are encouraged to attend the Annual General Meeting
and have the opportunity to question the Board. All members of the Board
usually attend the Annual General Meeting. The notice of the meeting is
sent to shareholders at least 20 working days before the meeting.
Shareholders are given the opportunity to vote on each separate issue.
The number of proxy votes lodged is given at the meeting after the vote
on a show of hands for each resolution and is published on the
Company’s website after the meeting.
Accountability and internal control
The Board is ultimately responsible for the Group’s systems of internal
control and risk management, and for reviewing their effectiveness.
This is effected by receiving reports from the Audit Committee following
its review. The Board confirms that it has reviewed the effectiveness of
the systems of internal control and risk management for the year under
review. The Board is satisfied generally that such systems have operated
adequately throughout the period.
The system of internal control is designed to manage, rather than
eliminate, the risk of failure to achieve business objectives. Such a system
can, however, provide only reasonable and not absolute assurance
against material misstatement or loss.
The Group has in place processes for identifying, evaluating and
managing the significant risks which are applicable to the business.
The Board regularly reviews these processes.
The Chief Executive Officer is ultimately responsible for risk management.
Executive managers of individual Group companies are responsible for the
identification, evaluation and management of the key risks applicable to
their areas of responsibility. The risks are assessed on a regular basis.
The managers of Group companies are aware of their responsibility
to operate systems of internal control which are effective and efficient
for their businesses, to provide reliable financial information and to
ensure compliance with local laws and regulations.
The Group has a comprehensive budgeting system with an annual
budget approved by the Board. Actual results are reported monthly
through the Group’s financial systems, and variances are reviewed.
The Audit Committee receives reports from the internal auditor and
from the external auditor and reports its conclusions to the Board.
A whistle-blowing procedure by which staff may raise concerns about
possible improprieties in matters of financial reporting or other matters
was in place throughout the year. The Whistle Blowing policy can be
found on the Company’s website.
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Remuneration Report
Annual Statement
Dear Shareholder,
I am pleased to present the
Directors’ Remuneration Report
for the year ended 30 April 2016,
which has been prepared by the
Remuneration Committee (‘the
Committee’) and approved by
the Board.
This is the Company’s third year of reporting in line with The Large and
Medium-sized Companies and Groups (Accounts and Reports) Regulations
2008 (as amended). The report has been divided into three sections:
–
–
–
This Annual Statement, which summarises remuneration outcomes
in 2015/16 and the intended policy for 2016/17.
The Company’s policy on the remuneration of executive and non-
executive directors which outlines the Group’s remuneration policy
approved by shareholders at the 2014 annual general meeting (AGM).
We will ask shareholders to vote on a number of changes to that
remuneration policy at the 2016 AGM ahead of a more fundemental
review of the policy in 2017 (i.e. the end of the three year policy). The
amended policy, as it would be if shareholders approve those
changes at the 2016 AGM, is set out below.
The Annual Report on Remuneration, which discloses details of
the Remuneration Committee, how the remuneration policy was
implemented in the year ended 30 April 2016, and how the policy
will operate for the year ending 30 April 2017.
This Remuneration Report (other than the part containing the
Directors’ Remuneration Policy) will be subject to an advisory vote at the
forthcoming 2016 AGM. The Remuneration policy amendments will be
subject to a binding vote.
Remuneration outcomes in 2015/16
For the year under review, the Remuneration Committee considers the
remuneration of the executive directors to reflect both the performance
of the Group and their individual performance. As pre-tax profit exceeded
the prior year adjusted pre-tax profit by more than 5%, 100% of salary
bonus is payable to the Chief Executive Officer (CEO). The Remuneration
Committee decided not to pay out any bonus to Françoise Coutaz-Replan
as she stepped down from her executive role on 27 August 2015.
However, the Remuneration Committee would like to take this opportunity
of acknowledging the excellent work that Françoise has done over the
years she has been with the Group and in particular during the time she
served as Group Finance Director. Françoise continues to serve the Group
as a non-executive director, bringing her skill, experience and deep
knowledge of the business to bear in this role.
Remuneration policy for 2016/17
For 2016/17 and following extensive consultation with major investors:
–
the base salary payable to the Chief Executive Officer (CEO) was
increased by 10% effective 1 May 2016. This followed a review of
both individual and Group performance in addition to taking account
of: (i) a desire to re-establish and maintain an appropriate salary
differential between the CEO and below-Board executives, which has
been reducing in recent years; (ii) the size and complexity of the role;
and (iii) relevant market data. This increase is within the shareholder
approved remuneration policy.
–
Shareholder approval will be sought at the 2016 AGM to amend
the remuneration policy to, amongst other things, accommodate an
increase in the CEO’s annual bonus potential from 100% to 150%
of salary, effective 1 May 2016, with the additional potential subject
to challenging performance targets based on financial performance.
100% of base salary bonus potential will be payable for exceeding
the previous year’s pre-tax profit by 5%, increasing to 150% of base
salary bonus potential payable for exceeding the previous year’s
pre-tax profit by 10%. 75% of base salary will be payable as a bonus
if pre-tax profit for the year is not less than that of the previous year.
If the Group’s pre-tax profit is less than that of the previous year, any
bonus will be entirely at the discretion of the Committee. This change
reflects the Committee’s desire to remunerate the CEO fairly and at
market levels for his responsibility levels and role performed,
particularly given that, as explained below, he does not receive share
awards. No share deferral will operate given the CEO’s significant
equity holding. Consistent with best practice, clawback provisions will
be introduced. In addition, the Remuneration Committee will provide
full retrospective disclosure in respect of the performance targets and
performance against those targets in the Remuneration Report
published immediately following the relevant year end.
– Consistent with best practice, the policy in respect of shareholding
guidelines for executive directors will be increased from 100% to
200% of salary.
– No changes will be made to the policy in respect of benefit and
pension provision and long-term incentives will continue to be
provided through the Photo-Me 2014 Executive Share Option
Scheme approved at the 2014 AGM. Awards are granted over
market value options which normally vest three years from grant,
subject to continued employment and performance conditions based
on earnings per share targets. However, the committee considers that
the CEO is already significantly aligned to the share price given his
shareholding, therefore he will not receive long-term incentive awards
during 2016/17. Market value options over shares worth up to 150%
of salary will be granted to selected senior executives (excluding the
CEO) which will normally vest three years from grant, subject to
continued employment and earnings per share (“EPS”) performance
targets. However, to the extent that any executive director receives
awards under the Photo-Me 2014 Executive Share Option Scheme in
the future, a two-year holding period will operate whereby to the
extent that the individual exercises vested awards within two years of
the vesting date, they will be required to retain the net-of-tax shares
until the second anniversary of vesting (i.e. five years from grant).
As the above changes are amendments to the existing remuneration
policy rather than the introduction of a new policy, the Committee still
intends to conduct a full review of the remuneration policy before the
2017 AGM (i.e. three years from the adoption of the first remuneration
policy) to take recent investor feedback into account. Major investors
and representitive bodies will be consulted where appropriate.
Shareholder engagement
The Committee continues to take an active interest in shareholder views
on our executive remuneration policy and is mindful of the concerns of
shareholders and other stakeholders. This is reflected in our voting result
at the 2015 AGM, which was over 91% in favour of the Directors’
Remuneration Report resolution, and no significant issues were raised.
In conclusion, we remain firmly of the view that our remuneration policy
continues to be appropriately aligned with the Company’s strategic
objectives of delivering shareholder value and supporting the long-term
success of the Company.
Yours faithfully,
Emmanuel Olympitis
Chairman of the Remuneration Committee
21 June 2016
Remuneration Report
Remuneration Policy Report
This part of the Directors’ Remuneration Report sets out the remuneration
policy for the Company since 1 May 2014 subject to a number of
amendments which will be put to shareholders for approval at the 2016
AGM. The original policy was approved by shareholders at the Company’s
Annual General Meeting held on 23 October 2014 with 98.59% of all
votes cast in favour and became effective formally following that date.
If shareholders approve this amended policy, it will take effect
from 1 May 2016.
The Committee’s remuneration policy for the executive directors is to have
regard to the directors’ experience and the nature and complexity of their
work in order to provide a competitive remuneration package that attracts,
retains and motivates high-calibre executives from whom first-class
performance is expected. The remuneration policy is also intended to
be consistent with the Company’s business objectives, risk profile and
shareholder interests.
The Committee also ensures that, when determining the executive
directors’ remuneration packages, due account is taken of pay and
general employment conditions elsewhere in the Company, liaising with
the Human Resources department where appropriate. In order to align
the interests of shareholders and executive directors, a significant
proportion of the remuneration of executive directors is performance-
related through an annual bonus plan and the grant of share options.
The Committee will ensure that the incentive structures for executive
directors and senior managers will not raise environmental, social or
governance (“ESG”) risks by inadvertently motivating irresponsible
behaviour. More generally, with regard to overall remuneration structures,
there is no restriction on the Committee which prevents it from taking into
account ESG matters, nor do these remuneration structures encourage
inappropriate operational risk-taking.
The remuneration packages of the executive directors can comprise
the following main elements:
– Base salary
Annual bonus
–
Share options
–
–
Pensions
– Other benefits
Remuneration scenarios for executive directors
The chart below shows how the composition of the CEO’s remuneration
package varies at three performance levels; namely, at minimum (i.e. fixed
pay), target and maximum levels, under the policy set out in the table below.
Value of remuneration package at different levels of performance
£1,461
56%
£1,055
38%
£649
100%
62%
44%
1600
1280
960
0
0
0
’
£
640
320
0
Minumum
On-target
Maximum
Basic salary, benefits & pension Bonus
The chart above is based on the following:
–
–
–
–
–
Salary level effective on 1 May 2016
An approximate value of benefits for the financial year
to 30 April 2017
An annualised pension contribution and/or salary supplement
(as a % of salary) for the year to 30 April 2017
A maximum bonus of 150% of salary (with target assumed
to be 50% of the maximum).
The CEO will not receive share option awards during
the 2016/2017 financial year.
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Remuneration Report
Remuneration Policy Report
continued
Summary remuneration policy table
The table below summarises the remuneration policy for directors:
Element
Salary1
Benefits
Performance
measures
– N/A
Purpose and link
to strategy
Operation
Maximum
– Reflects the value of the
individual and their role
– Reflects skills and
experience over time
– Provides an appropriate
level of basic fixed
income avoiding
excessive risk arising
from over reliance on
variable income
– Normally reviewed
annually, effective 1 May
– Normally paid in cash
on a monthly basis;
pensionable
– Comparison against
companies with similar
characteristics and
comparators taken into
account in review
– There is no prescribed
maximum annual base
salary or salary increase
– The Committee is
guided by the
requirements of the
Company and prevailing
market levels but may
decide to award a lower
increase or a higher
increase for executive
directors to recognise,
for example, an increase
in the scale, scope or
responsibility of the role
and/or to take account
of relevant market
movements
– Provides insured
benefits to support the
individual and their
family during periods of
ill health or death
– Gives allowances to
support individuals in
their relevant roles
– Includes company car,
– N/A
– N/A
Private medical
insurance and may
include an overseas
housing allowance for a
director working outside
of his or her country of
normal residence
– Other benefits may be
offered where
appropriate
Annual bonus
– Incentivises delivery of
specific Company,
divisional and personal
annual goals
– Maximum bonus only
payable for achieving
specified targets
– Normally payable in
– Up to 150% of base
salary p.a.
cash
– Non-pensionable
– Committee has the
discretion to defer up to
50% of the bonus in
shares for 3 years
– Company profit before
tax will apply to the
majority
– Personal and strategic
KPIs may be applied to
a minority of the bonus
– One-year performance
period
– Clawback provisions
are operated
Element
Executive Share Option
Scheme
Purpose and link
to strategy
– Aligns executive
directors’ interests with
those of shareholders
– Retention
Share ownership
guidelines
– Provides alignment of
interests between
executive directors and
shareholders
Non-executive
directors
– Provides fees reflecting
time commitments and
responsibilities, in line
with those provided by
similarly sized
companies
Operation
Maximum
Performance
measures
– Annual awards of
market value options
may be granted
– The Committee reviews
the quantum of awards
annually and monitors
the continuing suitability
of the performance
measures
– Executive directors are
required to build and
maintain a shareholding
equivalent to at least
one year’s base salary
through the retention of
50% of the net-of-tax
vested share awards or
through open-market
purchases
– Cash fee paid on a
monthly basis
– Fees are reviewed
annually
– Not entitled to
participate in any Group
pension scheme, nor
will awards be granted
under the annual bonus
or ESOS
– No non-executive
directors receive any
benefits in kind (other
than in respect of the
expenses relating to the
performance of that
individual’s duties, such
as travel to/from Board
meetings)
– Up to 150% of base
– Financial (EPS) metrics
salary p.a.
will apply
– Up to 25% vests at
threshold increasing to
150% vesting at
maximum
– Clawback provisions
are operated
– At least 200% of base
– N/A
salary
– N/A
– There is no prescribed
maximum fee or fee
increase
– The Committee is
guided by market rates,
time commitments and
responsibility levels
– The Board may request
that a non-executive
director undertake
services not within the
normal scope of his/her
role. Should this be the
case in the future, a
commercial rate would
be paid and full
disclosure would be
provided in the relevant
Directors’ Remuneration
Report
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Pension
– Provides competitive
retirement benefits
– Defined contribution
– Executive directors may
be offered cash in lieu of
pension
– Up to 15% of base
– N/A
salary p.a.
For the avoidance of doubt, in approving this Directors’ Remuneration Policy, authority was given to the Company to honour any commitments entered
into with current or former directors (such as the payment of the prior year’s annual bonus or the vesting/exercise of share awards granted in the past).
Details of any payments to former directors will be set out in the Annual Report on Remuneration for the relevant financial year.
1 Where considered appropriate, the Committee may allow the Company to pay salaries to a director and/or fees to a service company that supplies a director’s services
to the Company.
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Remuneration Report
Remuneration Policy Report
continued
Choice of performance measures
The Committee has given careful consideration to the performance
measures applicable to both the annual bonus and the 2014 Executive
Share Option Scheme.
The choice of the performance metrics applicable to the annual bonus
scheme reflects the Committee’s belief that any incentive compensation
should be appropriately challenging with the majority (or the entirety) linked
to the achievement of profit-related targets. The Committee may also link
a proportion of the annual bonus to personal objectives if it deems this
appropriate with regard to the Company’s key objectives.
The EPS performance condition applicable to the 2014 Executive Share
Option Scheme was selected by the Remuneration Committee on the basis
that it incentivises the delivery of sustainable long-term financial performance
and rewards management for growing the Company whilst retaining an
appropriate profit margin. The use of share options retains a robust link
between management and shareholders by incentivising management
to deliver long-term growth in the Company’s share price. The Committee
retains discretion over the calculation of EPS in order to appropriately
adjust for any material one-off items including (but not limited to): major
acquisitions, changes in accounting policies and major share issues.
The Committee operates the 2014 Executive Share Option Scheme in
accordance with the plan rules, the Listing Rules and HMRC legislation,
and the Committee, consistent with market practice, retains discretion over
a number of areas relating to the operation and administration of the plan.
How employees’ pay is taken into account
Pay and conditions elsewhere in the Group were considered when
finalising the current policy for executive directors and continue to be
considered in relation to implementation of this policy. Whilst employees
were not directly consulted, the Committee seeks to ensure that the
underlying principles which form the basis for decisions on executive
directors’ pay are consistent with those on which pay decisions for the
rest of the workforce are taken. In order to do so, the Committee regularly
interacts with the HR function and senior operational executives.
How the executive directors’ remuneration policy
relates to the Group
The remuneration policy described above provides an overview of
the structure that operates for the most senior executives in the Group.
Employees below executive level have a lower proportion of their total
remuneration made up of incentive-based remuneration, with
remuneration driven by market comparators and the impact of the role
of the employee in question. Long-term incentives are reserved for those
judged as having the greatest potential to influence the Group’s earnings
growth and share-price performance.
How shareholders’ views are taken into account
The Committee continues to take an active interest in shareholder views
on our executive remuneration policy and is mindful of the concerns of
shareholders and other stakeholders. This is reflected in our voting result
at the 2015 AGM, which was over 91% in favour of the Directors’
Remuneration Report resolution. Major shareholders and representative
bodies were consulted in 2014 in respect of the 2014 Executive Share
Option Scheme described in the Annual Statement and Annual Report
on Remuneration.
Approach to recruitment and promotions
The remuneration package for a new executive director would be set
in accordance with the terms of the Company’s prevailing approved
remuneration policy at the time of appointment and takes into account
the skills and experience of the individual, the market rate for a candidate
of that experience, and the importance of securing the relevant individual.
Salary would be provided at such a level as required to attract the most
appropriate candidate, and may be set initially at a below mid-market level
on the basis that it may progress towards the mid-market level once
expertise and performance have been proven and sustained. The annual
bonus potential would be limited to 150% of salary and grants under the
2014 Executive Share Option Scheme would be limited to 150% of salary.
In addition, the Committee may offer additional cash and/or share-based
elements to replace deferred or incentive pay forfeited by an executive
leaving a previous employer. It would seek to ensure, where possible,
that these awards would be consistent with awards forfeited in terms
of vesting periods, expected value and performance conditions.
For an internal executive director appointment, any variable pay element
awarded in respect of the prior role may be allowed to pay out according
to its original terms.
For external and internal appointments, the Committee may agree that
the Company will meet certain relocation and/or incidental expenses
as appropriate.
Fee structure and quantum for non-executive director appointments
will be based on the prevailing non-executive director fee policy.
Service contracts
Details of the executive director’s service contract are as follows:
Executive director Date of contract Notice period
Serge Crasnianski 01/05/2010 12 months
All non-executive directors are appointed for specified terms subject to
re-election at the AGM immediately following their appointment and every
three years thereafter. None of the non-executive directors will ordinarily
be entitled to compensation upon termination of their involvement with
the Company. However, if a non-executive director should be removed
as a result of a resolution duly proposed and resolved by members of the
Company during the non-executive director’s normal term of appointment,
he will be entitled to compensation equal to three months’ fees, six months
in the case of the Chairman. Relevant appointment letter and term dates of
the non-executive directors are set out below:
Expected year
Non-executive Appointment Year of of expiry of
director letter date last election current term
John Lewis1 26/07/2010 2014 2017
Yitzhak Apeloig 08/03/2012 2015 2018
Françoise Coutaz-Replan2 27/08/2015 2015 2018
Jean-Marcel Denis 01/03/2012 2015 2018
Emmanuel Olympitis 11/11/2009 2013 2016
1 First appointed to the Board on 3 July 2008.
2 First appointed to the Board as Group Finance Director on 24 September 2009,
and resigned as an executive director on 27 August 2015.
External appointments
The Board may allow executive directors to accept appropriate outside
commercial non-executive director appointments provided the aggregate
commitment is compatible with their duties as executive directors.
Whether or not the executive directors concerned may retain fees paid
for these services will be considered on a case-by-case basis and will
be subject to approval by the Board. Details (if any) of non-executive
directorships held by executive directors will be disclosed in the
Annual Report on Remuneration.
Approach to leavers
No executive director has the benefit of provisions in his or her service
contract for the payment of pre-determined compensation in the event
of termination of employment. It has been the Committee’s general policy
that the service contracts of executive directors (none of which is for a
fixed term) should provide for termination of employment by giving notice
or by making a payment of an amount equal to base salary (and in the
case of the CEO, an additional amount equal to the cost of providing any
benefits for the period of notice) in lieu of any unserved notice period,
together with any accrued bonus entitlement. It is the Committee’s general
policy that no executive director should be entitled to a notice period or
payment on termination of employment in excess of the levels set out
in his or her service contract. In determining amounts payable on
termination, the Committee also considers, where it is able to do so,
appropriate adjustments to take into account accelerated receipt and
the executive director’s duty to mitigate his loss. An annual bonus may
be payable with respect to the period of the financial year served although
it will be pro-rated for time served and paid at the normal payout date.
The treatment of any share awards granted to an executive director will be
determined based on the relevant plan rules.
The default treatment under the 2004 Executive Share Option Scheme is
that any outstanding awards or unexercised options lapse on cessation
of employment. However, in certain prescribed circumstances (e.g. death,
ill-health, disability, redundancy, or other circumstances at the discretion
of the Committee) ‘good leaver’ status is applied. In this scenario, other
than in the case of a retirement, any outstanding options will normally be
exercisable on the date of cessation and remain exercisable for a period of
6 months (or 12 months in the case of death). On a retirement, options vest
at the normal vesting date and remain exercisable for a period of 6 months.
The default treatment under the 2014 Executive Share Option Scheme is
that any outstanding awards or unexercised options lapse on cessation
of employment. However, in certain prescribed circumstances (e.g. death,
injury, disability or other circumstances at the discretion of the Committee)
‘good leaver’ status can be applied at the discretion of the Committee or
shall apply in relation to HMRC tax-favoured options as relevant. In this
scenario, any outstanding options will normally be exercisable on the date
of cessation and remain exercisable for a period of 6 months (or 12
months in the case of death). Alternatively, in the case of non-tax favoured
options, the Committee has the discretion to determine that good leavers’
awards should continue to be exercisable based on the normal timetable.
The extent to which outstanding option awards become exercisable
for good leavers will depend on the satisfaction of any applicable
performance conditions (over a curtailed or full performance period as
relevant). Time pro-ration of options will apply to good leavers’ awards
unless the Committee determines that time pro-ration is inappropriate.
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Remuneration Report
Annual Report on Remuneration
Implementation of the Remuneration Policy for year ending 30 April 2017
Base salary
The base salary for each executive director is reviewed annually by the Committee and the current applicable base salaries are as follows:
Single Total Figure of Remuneration *
The detailed emoluments received by the executive and non-executive directors for the year ended 30 April 2016 are shown below. No payments were
made for loss of office, and no payments were made to past directors.
Executive director
Serge Crasnianski
Françoise Coutaz-Replan1
1 May 2016
£
540,887
n/a
1 May 2015
£
491,715
189,000
%
Increase
10
–
1 Resigned as Group Finance Director on 27 August 2015, continuing as non-executive director
Pension and benefits
Mr Crasnianski will continue to receive a pension contribution equal to 15% of base salary in the form of a salary supplement.
Benefits
Executive directors will be provided with a company car, private medical insurance and an accommodation allowance.
Annual bonus
The executive directors are eligible for annual bonuses based upon the financial performance of the Group and the attainment of personal objectives.
Consent will be sought at the 2016 AGM to increase the maximum bonus payable for Serge Crasnianski from 100% to 150% of base salary such
change to be effective as of 1 May 2016.
In respect of Serge Crasnianski, 100% of base salary bonus potential will be payable for exceeding the previous year’s pre-tax profit by 5% increasing
to 150% of base salary bonus potential payable for exceeding the previous year’s pre-tax profit by 10%. 75% of base salary will be payable as a bonus
if pre-tax profit for the year is not less than that of the previous year. If the Group’s pre-tax profit is less than that of the previous year, any bonus will be
entirely at the discretion of the Committee.
Long-term incentives
No options will be granted to the CEO under the 2014 Executive Share Option Scheme this year.
Non-executive directors
The fees for non-executive directors are reviewed at least every three years and the current applicable fee levels for the roles below are as follows:
Non-executive director
John Lewis
Emmanuel Olympitis
Françoise Coutaz-Replan
Jean-Marcel Denis
Yitzhak Apeloig
Role
Chairman
Senior Independent director
Non-executive director
Non-executive director
Non-executive director
Committee Chairman role
Chair of Nomination Committee
Chair of Remuneration Committee
–
Chair of Audit Committee
–
1 May 2016
£
120,000
50,000
40,000
45,000
40,000
1 May 2015
£
120,000
50,000
n/a
45,000
40,000
Executive directors
Serge Crasnianski5
Françoise Coutaz-Replan6
Non-executive directors
John Lewis7
Yitzhak Apeloig
Françoise Coutaz-Replan6
Jean-Marcel Denis
Emmanuel Olympitis
Year
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
Salary/Fees
£
Benefits1
£
491,715
468,300
63,000
189,000
120,000
120,000
40,000
40,000
27,701
n/a
45,000
45,000
50,000
50,000
27,397
24,783
9,220
21,958
–
–
–
–
–
n/a
–
–
–
–
Bonus2
£
491,715
468,300
30,725
–
Long-Term
Incentives3
£
568,703
–
154,120
225,000
Pension4
£
73,757
70,245
6,300
18,900
–
–
–
–
–
n/a
–
–
–
–
–
–
–
–
–
n/a
–
–
–
–
–
–
–
–
–
n/a
–
–
–
–
Total
£
1,653,287
1,031,628
263,365
549,358
120,000
120,000
40,000
40,000
–
n/a
45,000
45,000
50,000
50,000
1 Taxable benefits comprise the provision of a car or car allowance, private medical insurance and an accommodation allowance (where appropriate).
2 Bonus is that awarded in respect of performance in the financial year, the calculation for the 2016 annual bonus is shown on page 38.
3 The vesting calculation for the ESOS awards granted in July 2013 to Serge Crasnianski (738,000 shares) and Françoise Coutaz-Replan (200,000 shares), each with an
exercise price of 90.63p which had a performance period which ended on 30 April 2016 is set out on page 38. The awards do not vest until 9 July 2016 and the intrinsic
values have been estimated using the 3-month average share price ended on 30 April 2016 being 167.69p. These figures will be revised in the subsequent year using the
actual intrinsic values on the vesting date.
4 The Company contributed 5% (2015: 5%) of base salary to the Company’s Group Personal Pension Plan on behalf of Françoise Coutaz-Replan until she resigned as an
executive director on 27 August 2015. Additional contributions were paid as salary supplements to Serge Crasnianski and Françoise Coutaz-Replan of £73,757 (2015:
£70,245) and £3,150 (2015: £9,450) respectively. These supplements were based on basic salary at the rate of 15% for Mr Crasnianski and 5% for Ms Coutaz-Replan.
5 The emoluments of Serge Crasnianski shown above, include fees and bonus totalling £770,373 (2015: £733,688) payable to a third party in respect of making available
the services of Serge Crasnianski to the Company.
6 Françoise Coutaz-Replan stepped down as an executive director on 27 August 2015, continuing as a non-executive.
7 The emoluments of John Lewis shown above, include fees of £45,000 (2015: £45,000) paid to a third party in respect of making available the services of John Lewis
to the Company.
* Subject to audit
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Remuneration Report
Annual Report on Remuneration
continued
Additional information in respect of the single total figure table *
Annual bonus
For the year ended 30 April 2016, the maximum bonus opportunity for Serge Crasnianski and for Françoise Coutaz-Replan was 100% of salary and
50% of salary respectively, in the case of Ms Coutaz-Replan’s maximum bonus opportunity was subject to pro-rating to reflect that she stepped down
as an executive part way through the year.
Serge Crasnianski’s full bonus for that year was determined by performance against profit-before-tax targets established at the start of the financial
year. Françoise Coutaz-Replan did not receive an annual bonus for the year ended 30 April 2016 given she switched to non-executive director on
27 August 2015.
Details of the performance against the profit-before-tax targets for the 2016 annual bonus are set out below.
Profit-before-tax target
Target1
Maximum
Actual
Bonus payout (% of salary)
2016 Profit
Serge
before tax £m Crasnianski
75%
100%
100%
35.0
36.8
40.1
Françoise
Coutaz-Replan
25%
35%
Nil
1 Equivalent to the 2014/15 adjusted profit before tax, excluding the one-off £3,484,000 profit on the sale of land.
Summary
2016 Maximum bonus payout
(% of salary)
2016 Actual bonus payout
(% of salary)
Executive director
Serge Crasnianski
Françoise Coutaz-Replan
Profit
before tax
100%
35%
Personal
objectives1
–
15%
Total
100%
50%
Profit
before tax
100%
n/a
Personal
objectives2
n/a
n/a
2016 Actual
bonus
payout (£)
491,715
n/a
Total
100%
n/a
1 The figures presented are based upon a full year. In practice, no bonus was payable to Françoise Coutaz-Replan for the year ended 30 April 2016.
2 Based on the Committee’s assessment of a number of pre-specified financial-related objectives.
Executive Share Option Scheme (ESOS)
The ESOS awards granted to Serge Crasnianski and Françoise Coutaz-Replan on 9 July 2013 completed their performance period on 30 April 2016
and accordingly have been included in the 2016 single total figure of remuneration. These awards are fully based on performance against an EPS target.
Details of the EPS performance target, the level of achievement against the target and the resultant level of vesting are set out in the table below.
Performance condition
Actual
* Subject to audit
EPS for 2016
Below 5.3p
5.3p
6.2p
6.8p
Between 5.3p and 6.8p
7.77p
Vesting (% of participant’s
salary at date of grant)
None
25%
100%
150%
Between 25% and 150%
on a straight-line basis
150%
Scheme interests awarded in the year *
Executive Share Option Scheme
On 9 July 2015, one executive director was granted an award over options under the ESOS with an exercise price of 133.33p.
Executive director
Françoise Coutaz-Replan
Number of ESOS awards
212,600
Basis
150% of base salary
Face value1
£283,460
1 Based on a share price of 133.33p which was the average share price over three dealing days immediately prior to grant.
The awards will vest in 2018 subject to the achievement of EPS targets which are detailed below.
EPS for 2018
Below 6.5p
6.5p
7.7p
8.5p
Between 6.5p and 8.5p
Vesting (% of participant’s salary at date of grant)
None
25%
100%
150%
Between 25% and 150% on a straight-line basis
Directors’ interests in shares *
According to the records kept by the Company, the directors had interests in the share capital of the Company as shown below. There have been
no changes to these holdings between 30 April 2016 and the date of signing the financial statements.
Executive directors
Serge Crasnianski
Françoise Coutaz-Replan5
Non-executive directors
John Lewis
Yitzhak Apeloig
Françoise Coutaz-Replan5
Jean-Marcel Denis
Emmanuel Olympitis
Beneficially owned at
30 April 2016
79,783,4504
n/a
1 May 2015
79,783,450
161,800
Vested
ESOS
awards1
–
–
Unvested
ESOS
awards2
738,000
–
Shareholding
requirement
(% of salary)
200%
n/a
Current
shareholding
(% of salary)3
23,681%
n/a
Guideline
achieved
Yes
n/a
–
161,800
–
45,000
–
–
–
45,000
–
–
776,093
–
–
407,600
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1 Options with no further performance conditions attached that have not been exercised.
2 Options with outstanding performance conditions attached.
3 Executive directors are required to build and maintain a shareholding equivalent to at least 100% of base salary (200% from the 2016 AGM, if approved by shareholders)
through the retention of 50% of the net of tax vested share awards or through open-market purchases. Calculated using the closing share price on 30 April 2016 being
167.25p. The shareholding guideline is calculated using only beneficially owned shares.
4 Of the shares beneficially owned by Serge Crasnianski, 79,719,900 (2015: 79,719,900) were registered in other names.
5 Françoise Coutaz-Replan stepped down as an executive director on 27 August 2015, continuing as a non-executive.
* Subject to audit
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Remuneration Report
Annual Report on Remuneration
continued
Directors’ interests in share options *
Number of options
As at Date
As at Granted Exercised Lapsed 30 April Exercise from which Expiry
Date of grant 1 May 2015 during year during year during year 2016 price exercisable date
Serge Crasnianski
9 July 20131 738,000 – – – 738,000 90.63p 9 July 2016 8 July 2020
Françoise Coutaz-Replan
20 Jan 2010 44,093 – – – 44,093 36.67p 20 Jan 2013 19 Jan 2017
4 July 2011 50,000 – – – 50,000 65.25p 4 July 2014 3 July 2018
13 Dec 2011 250,000 – – – 250,000 53.50p 13 Dec 2014 12 Dec 2018
4 July 2012 232,000 – – – 232,000 39.17p 4 July 2015 3 July 2019
9 July 20131 200,000 – – – 200,000 90.63p 9 July 2016 8 July 2020
10 July 20142 195,000 – – – 195,000 145.33p 10 July 2017 9 July 2021
9 July 20153 – 212,600 – – 212,600 133.33p 9 July 2018 8 July 2022
1 The 9 July 2013 ESOS award ended its performance period in the year ended 30 April 2016 and will vest subject to the performance conditions as outlined on page 38.
2 The 10 July 2014 ESOS awards are subject to the same performance conditions and vesting schedule as the 2013 ESOS awards, but the threshold 2017 EPS target
is set at 5.5p with full vesting for an EPS of 7.2p or greater.
3 The 9 July 2015 ESOS award is subject to the performance conditions as outlined on page 39.
* Subject to audit
Relative importance of the spend on pay
The following table sets out the percentage change in distributions to shareholders and employee remuneration costs.
Employee remuneration costs (£’000)1
Dividends (£’000)2
2016
32,653
18,217
2015
32,031
21,381
% Change
1.94%
(14.80%)
1 Based on the figure shown in note 5 to the Financial Statements.
2 Based on the cash returned to shareholders in 2016 through dividends as shown in note 9 to the Financial Statements.
Percentage increase in the remuneration of the Chief Executive Officer
The table below shows the change in the salary, benefits and annual bonus for the Chief Executive Officer between the current and previous
financial year compared with the change for a comparator group of selected employees of the Group.
Element of remuneration
Salary
Benefits
Annual bonus
Chief Executive Officer
% change
+5%
+10.5%
+5%
Employees
% change1
+3.1%
+7.97%
+21.0%%
1 The Committee chose to use a comparator group comprising employees from the major operating territories, namely UK (excluding main board directors of the Company),
France and Japan as being a representative group of employees for these purposes.
Performance graph
The graph below shows the Company’s performance, measured by total shareholder return (share price growth plus dividends reinvested) (TSR),
compared with the performance of the FTSE SmallCap Index (calculated on the same basis) over the past seven years. As the Company has been a
constituent of the FTSE SmallCap Index for all of the relevant period, this index is considered an appropriate form of ‘broad equity market index’ against
which the Company’s performance should be compared.
Total Shareholder Return
Source: Datastream (Thomson Reuters)
FTSE SmallCap
Photo-Me
International plc
1400
1300
1200
1100
1000
900
800
700
600
500
400
300
200
100
0
April 2009
April 2010
April 2011
April 2012
April 2013
April 2014
April 2015
April 2016
This graph shows the value, by 30 April 2016, of £100 invested in Photo-Me International plc on 30 April 2009 compared with the value of £100 invested
in the FTSE SmallCap Index.
The table below shows the total remuneration for the Chief Executive Officer over the same seven-year period as the TSR chart above. All share awards
are valued at the date of vesting.
Year ended
30 April
2016
2015
2014
2013
2012
2011
2010
2010
Chief Executive
Officer
Serge Crasnianski
Serge Crasnianski
Serge Crasnianski
Serge Crasnianski
Serge Crasnianski
Serge Crasnianski
Serge Crasnianski2
Thierry Barel3
Total Annual Long-term
remuneration bonus incentives
(£) (% of max) (% of max)1
1,653,287 100% 100%
1,031,628 100% –
914,278 100% –
899,487 100% –
898,693 100% –
893,312 100% –
739,548 100% –
90,327 0% –
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1 Shows the number of share options which vested as a percentage of the maximum number of share options which could have vested. For the years ended 30 April 2011
to 30 April 2016, Serge Crasnianski did not have any outstanding share option awards that could have vested in the relevant years.
2 Serge Crasnianski was appointed to the role of Chief Executive on 3 July 2009 having previously served as a non-executive director from 6 May 2009. The total
remuneration figure shown includes all payments received following his appointment as Chief Executive Officer but excludes any fees paid (£5,429) for performing the role
of non-executive director.
3 Thierry Barel resigned from the role of Chief Executive Officer on 3 July 2009. The total remuneration figure shown includes all payments received prior to his resignation
as Chief Executive Officer, but excludes a termination payment of £92,800.
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Remuneration Report
Annual Report on Remuneration
continued
Committee role and membership
The Remuneration Committee comprises three non-executive directors: Emmanuel Olympitis (Committee Chairman, member of the Audit and
Nomination Committees and Senior Independent Director), John Lewis (Chairman of the Board and the Nomination Committee and member of the Audit
Committee) and Jean-Marcel Denis (Chairman of the Audit Committee and member of the Nomination Committee). They are all considered by the Board
to be independent. Biographies of the members of the Committee are set out on page 22. Details of their membership of the Committee and attendance
at the meetings during the year are as follows:
Name
Emmanuel Olympitis
John Lewis
Jean-Marcel Denis
Position
Appointment date
Committee Chairman
Non-executive Chairman
Non-executive Director
7 December 2009
3 July 2008
1 March 2012
Number of meetings attended
(maximum possible)
2 (2)
2 (2)
1 (2)
It remains the Committee’s policy that it shall be available to meet on an ad hoc basis when the needs of the Company require it. At the invitation of the
Chairman, the Chief Executive Officer may attend meetings of the Committee, except when his own remuneration is under consideration. No director is
involved in determining his or her own remuneration. The Company Secretary acts as the secretary to the Committee. The members of the Committee
can, where they judge it necessary to discharge their responsibilities, obtain independent professional advice at the Company’s expense.
Statement of Directors’ Responsibilities
The directors of the Company, who are named on page 22, are
responsible for preparing the Annual Report, the Report of the Directors
and the Group and Company financial statements in accordance with
applicable law and regulations.
Responsibility statement of the directors in respect
of the annual financial report
Each of the directors of the Company, whose names and functions are
listed on page 22, confirms that, to the best of his or her knowledge:
Company law requires the directors to prepare financial statements for
the Group and the Company for each financial year. Under that law the
directors are required to prepare the Group financial statements in
accordance with International Financial Reporting Standards (IFRSs)
as adopted by the European Union and applicable law and have elected
to prepare the Company’s financial statements on the same basis.
Under company law the directors must not approve the financial
statements unless they are satisfied that they give a true and fair view of
the state of affairs of the Group and the Company and of their profit or
loss for that period. In preparing each of the Group and the Company’s
financial statements, the directors are required to:
(cid:129)
(cid:129)
the financial statements, prepared in accordance with IFRSs as
adopted by the European Union, give a true and fair view of the
assets, liabilities, financial position and profit or loss of the Company
and the undertakings included in the consolidation taken as a whole;
and
the Strategic Report, which is incorporated into the Report of the
Directors, includes a fair review of the development and performance
of the business and the position of the Company and the undertakings
included in the consolidation taken as a whole, together with a
description of the principal risks and uncertainties that they face.
Fair, balanced and understandable
In accordance with the principles of the UK Corporate Governance Code,
the directors have arrangements in place to ensure that the information
presented in the Annual Report is fair, balanced and understandable;
these are described on page 29.
The Board considers, on the advice of its Audit Committee, that the
Annual Report, taken as a whole, is fair, balanced and understandable,
and provides the information necessary for shareholders to assess the
Company’s and the Group’s position and performance, business model
and strategy.
Significant accounting policies,
critical estimates and key judgments
Our significant accounting policies are set out on pages 54 to 61 of the
consolidated financial statements and conform with IFRS as adopted by
the EU. These policies and applicable estimation techniques have been
reviewed by the directors who have confirmed them to be appropriate for
the preparation of the 2015/2016 consolidated financial statements.
By order of the Board
John Lewis
Non-executive Chairman
21 June 2016
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The Committee’s terms of reference are published in the ‘Investor Relations’ section of the Company’s website at www.photo-me.co.uk.
(cid:129)
select suitable accounting policies and then apply them consistently;
Advisors
The Committee is advised by New Bridge Street, part of Aon plc, which has been appointed by the Committee and which advises it on various matters
relating to the remuneration of the Chairman, executive directors and senior executives. New Bridge Street also provides advice to the executive directors
in respect of the remuneration of non-executive directors. Under long-standing relationships, other Aon plc subsidiary companies provided pension
scheme management, actuarial services and general insurance broking services to the Company, during the year. Following a review by the
Remuneration Committee, the Committee is satisfied that the additional services provided by the wider Aon plc network do not prejudice the
independence of the remuneration advice provided to it by New Bridge Street. During the financial year, fees paid to New Bridge Street totalled £14,250
in respect of advice given to the Remuneration Committee.
The Committee also receives advice from the Chief Executive Officer in relation to the remuneration of certain senior executives (but not in relation to his
own remuneration).
Statement of shareholder voting
At last year’s AGM, the Directors’ Remuneration Report received the following votes from shareholders:
Resolution
Directors’ remuneration
report (excluding the
Remuneration policy)
Votes cast
in favour
%
Votes cast
against
%
Total votes
cast (excludes
withheld votes)
%
Votes1
withheld
301,692,164
91.50
28,008,187
8.50
329,700,351 100.00
21,366
1 A vote withheld is not a vote in law and is not counted in the calculation of the proportion of votes cast “for” and “against” a resolution.
By order of the Board
Emmanuel Olympitis
Chairman of the Remuneration Committee
21 June 2016
(cid:129) make judgments and accounting estimates that are reasonable
and prudent;
(cid:129)
(cid:129)
state whether they have been prepared in accordance with IFRSs
as adopted by the EU; and
prepare the financial statements on the going-concern basis unless it
is inappropriate to presume that the Group and the Parent Company
will continue in business.
The directors are responsible for keeping adequate accounting records
that are sufficient to show and explain the Company’s transactions and
disclose with reasonable accuracy at any time the financial position of the
Company and the Group and enable them to ensure that their financial
statements and the Directors’ Remuneration Report comply with the
Companies Act 2006 and as regards the Group’s financial statements,
Article 4 of the IAS Regulation. They have general responsibility for taking
such steps as are reasonably open to them to safeguard the assets of the
Group and to prevent and detect fraud and other irregularities.
Under applicable law and regulations, the directors are also responsible
for preparing a Strategic Report, Directors’ Report, Directors’
Remuneration Report and Corporate Governance Statement that comply
with that law and those regulations.
The directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company’s website.
Legislation in the UK governing the preparation and dissemination of
financial statements may differ from legislation in other jurisdictions.
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Independent Auditor’s Report
to members of Photo-Me International plc only
Opinions and conclusions arising from our audit
1 Our opinion on the financial statements is unmodified
We have audited the financial statements of Photo-me International plc for
the year ended 30 April 2016 set out on pages 48 to 100. In our opinion:
Estimation of provisions £4,113,000 (2015: £5,557,000)
Risk vs 2015: ◄ ►
Refer to page 28 (Audit Committee Report), page 60 (accounting policy)
and pages 94 to 95 (financial disclosures)
The components within the scope of our work accounted for the following
percentages of the group's results:
the financial statements give a true and fair view of the state of the
group’s and of the parent company’s affairs as at 30 April 2016 and
of the group’s profit for the year then ended;
(cid:129)
(cid:129)
(cid:129)
(cid:129)
(cid:129)
the group financial statements have been properly prepared in
accordance with International Financial Reporting Standards as
adopted by the European Union (IFRSs as adopted by the EU);
the parent company financial statements have been properly
prepared in accordance with IFRSs as adopted by the EU and as
applied in accordance with the provisions of the Companies Act
2006; and
the financial statements have been prepared in accordance with the
requirements of the Companies Act 2006 and, as regards the group
financial statements, Article 4 of the IAS Regulation.
2 Our assessment of risks of material misstatement
In arriving at our audit opinion above on the financial statements the risks
of material misstatement that had the greatest effect on our audit, in
decreasing order of significance, were as follows (unchanged from 2015):
Recoverability of Japan goodwill £7,245,000 (2015: £7,245,000)
Risk vs 2015: ◄ ►
Refer to page 28 (Audit Committee Report), page 56 (accounting policy)
and pages 68 to 69 (financial disclosures)
(cid:129)
The risk - Goodwill in relation to Nippon Auto-Photo Kabushiki
Kasisha (Japan) is significant and at risk of recoverability due to:
-
-
the potential impact of the volatility of the Japanese Yen on the
recoverable amount of this GBP denominated goodwill and;
the inherent uncertainty involved in forecasting and discounting
future cash flows, which are the basis of the assessment of
recoverability.
(cid:129) Our response - Our audit procedures included testing the group's
budgeting procedures upon which the forecasts are based, the
principles and integrity of the group's discounted cash flow model
and the foreign exchange translation. We considered the historical
accuracy of key assumptions used in the model by comparing
forecasted revenue and cost growth to the actual amounts achieved
in prior periods. We compared forecast exchange rates to externally
derived data and performed break-even analysis on the key
assumptions. We also assessed whether the group's disclosures
about the sensitivity of the outcome of the impairment assessment
to changes in key assumptions reflected the risks inherent in the
valuation of goodwill.
The risk - In the normal course of business, provisions and contingent
liabilities may arise from potential and actual legal proceedings. These
legal proceedings primarily relate to claims from former employees, as
well as other ad hoc legal claims. The amounts involved are potentially
significant and the estimation of the amounts, if any, to be provided,
is inherently subjective.
(cid:129) Our response - Our audit procedures included discussion with the
board of directors and the company secretary of all known liabilities
and potential liabilities on claims where the recognition criteria for a
provision have not been met. In addition, discussions were held with
key management at each key component of the group to understand
their view of actual and potential claims that they are aware of. We
read Board minutes and correspondence with the group’s external
legal advisors to gain an understanding of their views in relation to
any such potential liabilities. For employee claims we compared the
group’s calculation of provisions with the group’s historical experience
of similar claim settlements. We obtained estimates of the expected
liabilities from the group’s legal advisors on all significant matters.
We considered our own assessment of the provision balance based
on our understanding of the business gained throughout the audit
process. We also assessed the adequacy and appropriateness of the
group's disclosures in respect of provisions and contingent liabilities.
Recoverability of carrying value of photobooths and vending
machines £49,669,000 (2015: £43,087,000) Risk vs 2015: ◄ ►
Refer to page 28 (Audit Committee Report), page 57 (accounting policy)
and pages 72 to 73 (financial disclosures)
(cid:129)
The risk – The carrying value of photobooths and vending machines
is significant and there is a risk of impairment of these assets in some
countries due to potential changes in technology, consumer preference
and regulations. The group prepares discounted cash flow forecasts at
a country-specific entity level and compares the results to carrying
value of the assets to assess if an impairment of the assets is required.
(cid:129) Our response - Our audit procedures included assessing assumptions
made in the discounted forecasted cash flows. We challenged the
methodology used to determine the discount rate used in the model.
and challenged the cash flow forecasts by comparing against part
performance and assessing whether these considered the changes in
the market place and regulations. For those assets where the carrying
values were not supported by the discounted cash flows and no
impairment was recognised, we challenged the achievability of the
plans management had in place for the assets.
3 Our application of materiality and an overview
of the scope of our audit
The materiality for the group financial statements as a whole was set at
£2.0m (2015: £2.3m), determined with reference to a benchmark of group
profit before taxation of £40m, of which it represents 5.0% (2015: 6.6%).
We report to the audit committee any corrected or uncorrected identified
misstatements exceeding £0.1m (2015: £0.1m), in addition to other
identified misstatements that warrant reporting on qualitative grounds.
Of the group's 34 (2015: 30) reporting components, we subjected 5 (2015:
5) to audits for group reporting purposes and 1 (2015: 6) to specified risk-
focused audit procedures. The latter was not individually financially
significant enough to require an audit for group reporting purposes,
but did present specific individual risks that needed to be addressed.
12%
9%
12%
3%
2%
86%
88%
2%
86%
2016
Total ass e t s
PBT
Revenu e
5%
6%
2%
8%
5%
8%
89%
90%
87%
2015
Total ass e t s
PBT
Revenu e
Audits for group reporting purposes
Specified risk-focus audit procedures
Analysis at aggregated group level
The remaining 12% (2015: 5%) of total group revenue, 9% (2015: 6%)
of group profit before tax and 12% (2015: 2%) of total group assets is
represented by 28 (2015: 19) reporting components, none of which
individually represented more than 4.9% (2015: 1.2%) of any of total group
revenue, group profit before tax or total group assets. For the remaining
components, we performed analysis at an aggregated group level to
re-examine our assessment that there were no significant risks of
material misstatement within these.
The Group audit team instructed component auditors as to the significant
areas to be covered, including the relevant risks detailed above and the
information to be reported back. The Group audit team approved the
component materialities, which ranged from £1m to £1.2m (2015: £1m
to £1.2m), having regard to the mix of size and risk profile of the Group
across the components. The work on 6 of the 34 components (2015:
10 of the 30 components) was performed by component auditors and
the rest by the Group audit team.
The Group Engagement Partner visited 1 (2015: 0) component location in
France, including to assess the audit risk and strategy. Regular telephone
conference meetings were held with the component auditors, including
planning calls and post reporting calls. At these meetings, the findings
reported to the Group audit team were discussed in more detail, and any
further work required by the Group audit team was then performed by the
component auditor.
4 Our opinion on other matters prescribed by the
Companies Act 2006 is unmodified
In our opinion:
(cid:129)
(cid:129)
the part of the Directors’ Remuneration Report to be audited has
been properly prepared in accordance with the Companies Act 2006;
the information given in the Strategic Report and the Directors’ Report
for the financial year for which the financial statements are prepared is
consistent with the financial statements.
5 We have nothing to report on the disclosures of principal risks
Based on the knowledge we acquired during our audit, we have nothing
material to add or draw attention to in relation to:
(cid:129)
(cid:129)
the directors’ statement of viability on page 19, concerning
the principal risks, their management, and, based on that, the
directors’ assessment and expectations of the group’s continuing
in operation over the three years to 30 April 2019; or
the disclosures in note 1 of the financial statements concerning
the use of the going concern basis of accounting.
6 We have nothing to report in respect of the matters
on which we are required to report by exception
Under ISAs (UK and Ireland) we are required to report to you if, based on
the knowledge we acquired during our audit, we have identified other
information in the annual report that contains a material inconsistency with
either that knowledge or the financial statements, a material misstatement
of fact, or that is otherwise misleading.
In particular, we are required to report to you if:
(cid:129) we have identified material inconsistencies between the knowledge
we acquired during our audit and the directors’ statement that they
consider that the annual report and financial statements taken as a
whole is fair, balanced and understandable and provides the
information necessary for shareholders to assess the group’s
position and performance, business model and strategy; or
(cid:129)
the corporate governance statement does not appropriately
address matters communicated by us to the audit committee.
Under the Companies Act 2006 we are required to report to you if,
in our opinion:
(cid:129)
(cid:129)
(cid:129)
adequate accounting records have not been kept by the parent
company, or returns adequate for our audit have not been received
from branches not visited by us; or
the parent company financial statements and the part of the
Directors’ Remuneration Report to be audited are not in agreement
with the accounting records and returns; or
certain disclosures of directors’ remuneration specified by law
are not made; or
(cid:129) we have not received all the information and explanations
we require for our audit.
Under the Listing Rules we are required to review:
(cid:129)
(cid:129)
the directors’ statement, set out on page 43, in relation to going
concern and longer-term viability; and
the part of the Corporate Governance Statement on page 26 relating
to the company’s compliance with the eleven provisions of the 2014
UK Corporate Governance Code specified for our review.
We have nothing to report in respect of the above responsibilities.
Scope and responsibilities
As explained more fully in the Directors’ Responsibilities Statement set
out on page 43, the directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true and fair
view. A description of the scope of an audit of financial statements is
provided on the Financial Reporting Council’s website at
www.frc.org.uk/auditscopeukprivate. This report is made solely to the
company’s members as a body and is subject to important explanations
and disclaimers regarding our responsibilities, published on our website
at www.kpmg.com/uk/auditscopeukco2014a, which are incorporated
into this report as if set out in full and should be read to provide an
understanding of the purpose of this report, the work we have
undertaken and the basis of our opinions.
Steve Masters (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
1 Forest Gate
Brighton Road
Crawley
RH11 9PT
21 June 2016
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Financial Statements
Innovative
technology...
Our leading edge kiosks provide
durable, top quality prints from
various media and via Bluetooth,
WiFi and Infrared transfer, giving
our customers an exceptional
experience.
...bringing innovation
to our customers.
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Group Statement of Comprehensive Income
for the year ended 30 April 2016
Statements of Financial Position
for the year ended 30 April 2016
Revenue
Cost of Sales
Gross Profit
Other Operating Income
Administrative Expenses
Share of Post-Tax Profits from Associates
Operating Profit
Analysed as:
Operating profit before specific items
Profit on sale of land
Operating profit after specific items
Finance Revenue
Finance Cost
Profit before Tax
Total Tax Charge
Profit for Year
Other Comprehensive Income
Items that are or may subsequently be classified to profit and loss:
Exchange differences arising on translation of foreign operations
Taxation on exchange differences
Total items that are or may subsequently be classified to profit and loss
Items that will not be classified to profit and loss:
Remeasurement (losses)/gains in defined benefit obligations and other post-employment benefit obligations
Deferred tax on remeasurement (losses)/gains
Total items that will not be classified to profit and loss
Other comprehensive income/(expense) for the year net of tax
Total comprehensive income for the year
Profit for the Year Attributable to:
Owners of the Parent
Non-controlling interests
Total comprehensive income attributable to:
Owners of the Parent
Non-controlling interests
Earnings per Share
Basic Earnings per Share
Diluted Earnings per Share
All results derive from continuing operations.
Notes
3
4
14
6
6
7
10
10
2016
£’000
183,994
(131,546)
52,448
1,306
(14,185)
165
39,734
39,734
–
39,734
538
(166)
40,106
(10,907)
29,199
5,328
485
5,813
43
(9)
34
5,847
35,046
29,066
133
29,199
34,841
205
35,046
7.77p
7.72p
2015
£’000
177,202
(129,638)
47,564
1,166
(10,524)
164
38,370
34,886
3,484
38,370
191
(65)
38,496
(10,452)
28,044
(6,779)
–
(6,779)
(860)
221
(639)
(7,418)
20,626
27,900
144
28,044
20,605
21
20,626
7.49p
7.43p
Assets
Non-current assets
Goodwill
Other intangible assets
Property, plant & equipment
Investment property
Investment in - associates
Investment in - subsidiaries
Other financial assets - held to maturity
Other financial assets - available for sale
Deferred tax assets
Trade and other receivables
Current assets
Inventories
Trade and other receivables
Current tax
Cash and cash equivalents
Assets held for sale
Total assets
Equity
Share capital
Share premium
Translation and other reserves
Retained earnings
Equity attributable to owners of the Parent
Non-controlling interests
Total equity
Liabilities
Non-current liabilities
Financial liabilities
Post-employment benefit obligations
Provisions
Deferred tax liabilities
Trade and other payables
Current liabilities
Financial liabilities
Provisions
Current tax
Trade and other payables
Total equity and liabilities
The accounts were approved by the Board on 21 June 2016.
Serge Crasnianski
Chief Executive Officer
John Lewis
Non-executive Chairman
Notes
Group
2016
£’000
11
11
12
13
14
14
15
15
24
16
17
16
18
20
21
22
23
24
25
21
23
25
11,606
8,706
56,094
629
1,713
–
2,253
75
4,216
1,548
86,840
17,094
13,010
2,273
71,005
103,382
96
190,318
1,877
8,156
10,507
101,101
121,641
1,109
122,750
9,183
4,755
10
1,887
1,821
17,656
1,660
4,103
8,341
35,808
49,912
190,318
2015
£’000
10,180
6,507
48,263
458
848
–
2,220
70
3,512
1,684
73,742
12,099
10,874
869
58,632
82,474
–
156,216
1,866
7,131
4,766
89,744
103,507
904
104,411
124
4,291
17
1,067
2,050
7,549
59
5,540
5,981
32,676
44,256
156,216
Company
2016
£’000
–
5,723
8,383
–
400
44,462
971
–
2,227
–
62,166
1,723
4,974
–
46,840
53,537
96
115,799
1,877
8,156
1,660
57,110
68,803
–
68,803
–
–
10
–
200
210
–
–
997
45,789
46,786
115,799
2015
£’000
–
5,179
8,480
–
257
41,690
967
–
1,702
–
58,275
814
7,991
–
20,938
29,743
–
88,018
1,866
7,131
1,399
55,163
65,559
–
65,559
–
–
17
–
–
17
–
–
1,128
21,314
22,442
88,018
The notes on pages 58 to 104 are an integral part of these consolidated financial statements.
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Group Statement of Cash Flows
for the year ended 30 April 2016
Company Statement of Cash Flows
for the year ended 30 April 2016
Cash flow from operating activities
Profit before tax
Finance cost
Finance revenue
Operating profit
Share of post tax profit from associates
Amortisation of intangible assets
Depreciation of property, plant and equipment
Profit/(loss) on sale of property, plant and equipment
Exchange differences
Other items
Changes in working capital:
Inventories
Trade and other receivables
Trade and other payables
Provisions
Cash generated from operations
Interest paid
Taxation paid
Net cash generated from operating activities
Cash flows from investing activities
Acquisition of subsidiaries net of cash acquired
Investment in associates
Investment in intangible assets
Proceeds from sale of intangible assets
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Proceeds of sale of subsidiaries net of cash sold
Interest received
Dividends received from associates
Net cash generated from investing activities
Cash flows from financing activities
Issue of Ordinary shares to equity shareholders
Repayment of capital element of finance leases
Repayment of borrowings
Increase in borrowings
Decrease in assets held to maturity
Dividends paid to owners of the Parent
Dividends paid to non-controlling interests
Net cash utilised in financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Exchange loss on cash and cash equivalents
Cash and cash equivalents at end of year
Notes
9
18
2016
£’000
40,106
166
(538)
39,734
(165)
1,548
15,413
(236)
2,031
(1,615)
(3,665)
52
108
(1,775)
51,430
(166)
(10,816)
40,448
(1,642)
(671)
(3,221)
–
(21,276)
1,521
–
538
–
(24,751)
1,036
(147)
(665)
10,946
29
(18,217)
–
(7,018)
8,679
58,632
3,694
71,005
2015
£’000
38,496
65
(191)
38,370
(164)
2,092
14,789
(3,510)
(1,996)
(876)
(1,910)
2,587
451
(671)
49,162
(64)
(9,124)
39,974
(422)
(146)
(3,641)
1
(19,833)
5,623
32
189
96
(18,101)
617
(78)
(158)
–
76
(21,381)
(158)
(21,082)
791
60,996
(3,155)
58,632
Cash flow from operating activities
Profit before tax
Finance cost
Finance revenue
Dividends and other items
Operating profit
Amortisation of intangible assets
Depreciation of property,plant and equipment
Loss/(profit) on sale of property, plant and equipment
Movement in investment provisions and other items
Changes in working capital:
Inventories
Trade and other receivables
Trade and other payables
Provisions
Cash generated from operations
Interest paid
Taxation paid
Net cash generated from operating activities
Cash flows from investing activities
Investment in subsidiaries
Purchase of intangible assets
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Loans advanced to subsidiaries
Interest received
Dividends received from associates and subsidiaries
Net cash generated from investing activities
Cash flows from financing activities
Issue of ordinary shares to equity shareholders
Borrowings from subsidiaries
Repayment of borrowings from subsidiaries
Increase in assets held to maturity
Dividends paid to owners of the Parent
Net cash utilised in financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Notes
9
18
2016
£’000
21,453
74
(532)
(10,692)
10,303
1,073
3,275
(255)
(249)
(909)
3,132
16,157
(7)
32,520
(74)
(2,098)
30,348
(1,851)
(1,617)
(3,416)
397
(115)
532
10,692
4,622
1,036
15,615
(7,498)
(4)
(18,217)
(9,068)
25,902
20,938
46,840
2015
£’000
22,481
191
(205)
(8,430)
14,037
702
3,054
(3,601)
145
36
(1,960)
(6,355)
7
6,065
(32)
(1,364)
4,669
(4)
(379)
(3,259)
4,513
–
109
8,526
9,506
617
7,611
–
(4)
(21,381)
(13,157)
1,018
19,920
20,938
The notes on pages 58 to 104 are an integral part of these consolidated financial statements.
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Group Statement of Changes in Equity
for the year ended 30 April 2016
Company Statement of Changes in Equity
for the year ended 30 April 2016
At 1 May 2014
Profit for year
Other comprehensive expense
Total comprehensive expense
Total comprehensive income for year
Transactions with owners of the Parent
Shares issued in period
Share options
Deferred tax on share options
Capital contributions relating to share-based payments (net of disposals)
Dividends
Total transactions with owners of the Parent
At 30 April 2015
At 1 May 2015
Profit for year
Other comprehensive expense
Total comprehensive expense
Total comprehensive income for year
Transactions with owners of the Parent
Shares issued in period
Share options
Deferred tax on share options
Capital contributions relating to share-based payments (net of disposals)
Dividends
Total transactions with owners of the Parent
At 30 April 2016
Details of share capital and reserves are given in note 20.
Share
capital
£’000
1,859
–
Share
premium
£’000
6,521
–
Other
reserves
£’000
1,172
–
Retained
earnings
£’000
56,470
19,749
–
–
7
–
–
–
–
7
1,866
1,866
–
–
–
11
–
–
–
–
11
1,877
–
–
610
–
–
–
–
610
7,131
7,131
–
–
–
1,025
–
–
–
–
1,025
8,156
–
–
–
–
–
227
–
227
1,399
1,399
–
–
–
–
–
–
261
–
261
1,660
–
19,749
–
144
181
–
(21,381)
(21,056)
55,163
55,163
19,951
–
19,951
–
152
61
–
(18,217)
(18,004)
57,110
Total
£’000
66,022
19,749
–
19,749
617
144
181
227
(21,381)
(20,212)
65,559
65,559
19,951
–
19,951
1,036
152
61
261
(18,217)
(16,707)
68,803
Attributable Non-
Share Share Other Translation Retained to owners of controlling
capital premium reserves reserve earnings the Parent interests Total
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
At 1 May 2014 1,859 6,521 1,874 9,528 83,332 103,114 1,119 104,233
Profit for year – – – – 27,900 27,900 144 28,044
Other comprehensive
(expense)/income
Exchange differences – – – (6,656) – (6,656) (123) (6,779)
Transfers between reserves – – – 20 (20) – – –
Remeasurement losses in
defined benefit pension
scheme and other post-
employment benefit obligations – – – – (860) (860) – (860)
Deferred tax on remeasurement gains – – – – 221 221 – 221
Total other comprehensive
(expense)/income – – – (6,636) (659) (7,295) (123) (7,418)
Total comprehensive
(expense)/income – – – (6,636) 27,241 20,605 21 20,626
Transactions with owners of the Parent
Shares issued in the period 7 610 – – – 617 – 617
Share options – – – – 371 371 – 371
Deferred tax on share options – – – – 181 181 – 181
Dividends
– – – – (21,381) (21,381) (158) (21,539)
Disposal of minority – – – – – – (78) (78)
Total transactions with owners
of the Parent 7 610 – – (20,829) (20,212) (236) (20,448)
At 30 April 2015 1,866 7,131 1,874 2,892 89,744 103,507 904 104,411
At 1 May 2015 1,866 7,131 1,874 2,892 89,744 103,507 904 104,411
Profit for year – – – – 29,066 29,066 133 29,199
Other comprehensive
(expense)/income
Exchange differences – – – 5,256 – 5,256 72 5,328
Tax on exchange – – – 485 – 485 – 485
Remeasurement losses in
defined benefit pension scheme
and other post-employment
benefit obligations – – – – 43 43 – 43
Deferred tax on remeasurement gains – – – – (9) (9) – (9)
Total other comprehensive
(expense)/income – – – 5,741 34 5,775 72 5,847
Total comprehensive
(expense)/income – – – 5,741 29,100 34,841 205 35,046
Transactions with owners
of the Parent
Shares issued in the period 11 1,025 – – – 1,036 – 1,036
Share options – – – – 413 413 – 413
Deferred tax on share options – – – – 61 61 – 61
– – – – (18,217) (18,217) – (18,217)
Dividends
Total transactions with
owners of the Parent 11 1,025 – – (17,743) (16,707) – (16,707)
At 30 April 2016 1,877 8,156 1,874 8,633 101,101 121,641 1,109 122,750
The non-controlling interests in the above table relate to interests not held by the Group in SCI du Lotissement d’Echirolles, where the Group’s interest is
61% as described in note 29.
The notes on pages 58 to 104 are an integral part of these consolidated financial statements.
Details of share capital and reserves are given in note 20.
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Notes to the Financial Statements
for the year ended 30 April 2016
Authorisation of the financial statements and statement of compliance with IFRSs
The Group and the Company financial statements of Photo-Me International plc (the “Company”) for the year ended 30 April 2016 were authorised
for issue by the directors on 21 June 2016 and the statements of financial position were signed by S Crasnianski, Chief Executive Officer and J Lewis,
Non-executive Chairman.
The Company is a public limited company incorporated and registered in England and Wales and whose shares are quoted on the London Stock
Exchange, under symbol PHTM. The registered number of the Company is 735438 and its registered office is at Church Road, Bookham, Surrey KT23
3EU. The principal activities of the Group are shown on page 23.
The Group’s and the Company’s financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRSs”),
as adopted by the European Union (“EU”), International Financial Reporting Interpretations Committee (“IFRIC”) interpretations and in accordance with
the provisions of the Companies Act 2006 applicable to companies reporting under IFRS.
The Company has taken advantage of the exemption provided under Section 408 of the Companies Act 2006 not to publish its individual income
statement and related notes.
1 Accounting policies
The principal accounting policies adopted in the preparation of the Group’s consolidated financial statements and the Company’s individual financial
statements are set out below. The policies have been consistently applied, unless otherwise stated, to all of the statements presented. New standards
adopted for this financial year are shown in note 2 on page 61.
In presenting these financial statements, the directors have followed the Financial Reporting Council’s (“FRC”) objective in “cutting clutter” with the aim
of simplifying notes and descriptions and removing non-material disclosures.
1.1 Basis of preparation
The consolidated financial statements have been prepared under the historical cost convention except for certain derivative financial instruments and
available-for-sale financial assets that are measured at fair value.
Going concern
The financial statements of the Group and the Company have been prepared on the going concern basis.
In reaching this conclusion management has reviewed detailed budgets, which reflect, where applicable, the current economic conditions, with regard to
the level of demand for the Group’s manufactured products, the level of consumer confidence, the uncertainty of the Euro and cash flow forecasts for the
next financial year and high level projections thereafter. The cash flow projections indicate that the Group and the Company will remain comfortably within
their available banking facilities. Additional information on these facilities is provided in note 15.
A review of the business activity, future prospects and financial position of the Group are covered in the Chairman’s Statement and the Strategic Report.
Critical accounting estimates and key judgments
The preparation of the financial statements in accordance with IFRS requires the use of estimates and assumptions that affect the reported amounts
of assets and liabilities, the disclosure of contingent assets and liabilities at the year end and the reported amounts of revenues and expenses during the
reported period. Although these estimates are based on the directors’ best knowledge of current events and actions, actual results may ultimately differ
from those estimates.
The critical accounting policies, which the directors consider are of greater complexity and/or particularly subject to the exercise of judgment,
are included in the following notes:
Group
1) Goodwill and other intangible assets – notes 1.4, 1.8 and 11.
The recoverable amount of cash generating units (cgus) has been determined by management based on a value in use basis. These calculations
require estimates by management, including management’s expectations of future growth in revenue, costs and profit margins, cash flows and
discount rates.
2) Development costs – notes 1.4 and 11.
3) Depreciation and impairment of property, plant and equipment – notes 1.5,1.8, 12 and 13.
Management make estimates of the useful life of capitalised development costs and property, plant and equipment as disclosed below in notes 1.4
and 1.5. Technogical developments and regulatory changes can impact on the lives of the vending estate. Management consider these factors in
assessing the useful lives of the asset.
4) Taxation – notes 1.17, 7 and 24.
5) Provisions – note 23.
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow will
be required to settle the obligation and the amount can be reliably estimated. In respect of claims, litigation and other provisions, including property
restitution, management make estimates based on anticipated costs where it is considered that an outflow of resources is probable. For all risks the
ultimate liability may vary from the amount provided and will be dependent upon the eventual outcome of any settlement.
Company
Critical assumptions and estimates for the preparation of the Company’s financial statements, in addition to 3 and 4 above, include:
Investments in subsidiaries
Management makes decisions on the carrying value of investments in subsidiaries and whether an impairment is required, as detailed in note 1.8 and 1.9.
1.2 Basis of consolidation
The Group consolidates the financial statements of the Company and all of its subsidiaries, and includes associates under the equity method,
as at 30 April each year.
Subsidiaries
Subsidiaries are all entities controlled by the Group. The Group controls an entity when it 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. In assessing control, the Group takes into
consideration potential voting rights that are currently exercisable. The acquisition date is the date on which control is transferred to the acquirer.
The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date
on which control ceases. Losses applicable to non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing
so causes the non-controlling interests to have a negative balance.
The principal subsidiaries affecting the results and financial position of the Group are shown in note 29.
Changes in ownership of subsidiaries and loss of control
Changes in the Group’s interest in a subsidiary that do not result in loss of control are accounted for as equity transactions.
Where the Group loses control of a subsidiary, the assets and liabilities are derecognised along with any related non-controlling interest and other
components of equity. Any resulting gain or loss is recognised in profit and loss. Any interest retained in a subsidiary is measured at fair value when
control is lost.
The Group uses the acquisition method of accounting to account for business combinations. Acquisition costs for business combinations are expensed
as incurred. The consideration transferred for the acquisition of a subsidiary is the fair value of the assets acquired, the liabilities incurred to the former
owners of the acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting
from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are
initially measured at their fair values on acquisition date. The Group recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition
basis, either at fair value or at the non-controlling interest’s proportionate share of the recognised amounts of acquiree’s identifiable net assets.
If the business combination is achieved in stages, the acquisition date carrying value of the acquiree’s previously held interest in the acquiree
is re-measured to fair value at the acquisition date, with such gains or losses arising from re-measurement recognised in profit and loss.
Transactions eliminated on consolidation
Inter-company transactions, balances and unrealised gains and losses on transactions between Group companies are eliminated. Unrealised gains
arising from transactions with equity-accounted investees are eliminated against the investment to the extent of the Group’s interest in the investee.
Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment. Where necessary
subsidiaries’ accounting policies have been changed to ensure consistency with the Group’s policies.
Associates
Associates are those entities in which the Group has significant influence, but not control, over the financial and operating policies. Significant influence
is presumed to exist when the Group holds between 20% and 50% of the voting power of another entity.
Application of the equity method to associates and joint ventures
Associates are accounted for using the equity method (equity accounted investees) and are initially recognised at cost. The Group’s investment includes
goodwill identified on acquisition, net of any accumulated impairment losses. The consolidated financial statements include the Group’s share of the total
comprehensive income and equity movements of equity accounted investees, from the date that significant influence or joint control commences until the
date that significant influence or joint control ceases. When the Group’s share of losses exceeds its interest in an equity accounted investee, the Group’s
carrying amount is reduced to nil and recognition of further losses is discontinued except to the extent that the Group has incurred legal or constructive
obligations or made payments on behalf of an investee.
All associates affecting the results and financial position of the Group are shown in note 29.
Non-controlling interests
Non-controlling interests represent the portion of results for the period and net assets not held by the Group. They are presented separately within
the statement of comprehensive income and the statement of financial position.
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Notes to the Financial Statements
for the year ended 30 April 2016
1.3 Foreign currency translation
The consolidated financial statements and the Company’s own financial statements are presented in Sterling being the functional and presentational
currency of the Parent Company and all values are shown in £’000 except where indicated.
Transactions in foreign currencies are translated into the respective functional currencies of the Group’s subsidiaries at the exchange rate ruling on
the date the transaction is recorded. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rates ruling
at 30 April. Exchange gains and losses resulting from the above translation are reflected in the income statement, except where they qualify as cash
flow hedges and are reflected in equity. There were no qualifying cash flow hedges in 2016 and 2015.
Income statements of overseas entities are translated into Sterling, at weighted average rates of exchange, as a reasonable approximation to actual
exchange rates at the date of the transaction and their balance sheets are translated at the exchange rate ruling at 30 April. Exchange differences arising
on the translation of opening net assets are taken to equity, as is the exchange difference on the translation of the income statement between average
and closing exchange rates. For this purpose net assets includes loans between Group companies and any related foreign exchange contracts where
settlement is neither planned nor likely to occur in the foreseeable future. Such cumulative exchange differences are released to the income statement
on disposal of the subsidiary or associate.
Goodwill arising on the acquisition of subsidiaries and associates post 1 May 2004 is treated as a foreign currency asset and translated at the rate ruling
at 30 April. On transition to IFRS on 1 May 2004, business combinations were not retrospectively adjusted to comply with Adopted IFRS and goodwill
was recognised based on the carrying value under the previous accounting policies. Pre 1 May 2004 goodwill was treated as a sterling asset and is
included in these financial statements at that value less any subsequent impairment.
1.5 Property, plant and equipment
Property, plant and equipment is shown at cost, less accumulated depreciation and any impairment.
Subsequent expenditure on property, plant and equipment is capitalised, either as a separate asset, or included in the cost of the asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the Group and the cost can be measured reliably. The carrying
amount of any parts of the assets that are replaced are derecognised. All other costs are recognised in the income statement as an expense as incurred.
Freehold land is not depreciated. Other assets are depreciated on a straight-line basis, or occasionally on a reducing balance basis, to reduce cost to the
estimated residual value over the estimated useful life of the asset at the following rates:
Freehold buildings
Leasehold improvements
Photobooths and vending machines
Plant, machinery, furniture, fixtures and motor vehicles
Capitalised finance lease assets
2% – 5% straight-line
over the life of the lease on a straight-line basis
10% – 33.33% straight-line
12.5% – 33.33% straight-line or reducing balance
over the shorter of the life of the asset or the life of the lease
The assets’ residual values and useful lives are reviewed at each year end and adjusted, if appropriate.
The critical judgment areas for operating equipment revolve around the useful life of the asset and whether an impairment charge is required. Operating
equipment assets are reviewed at least annually for impairment testing.
1.4 Intangible assets
Goodwill
Goodwill represents the excess of cost of an acquisition of a subsidiary or associate over the fair value of the Group’s share of net identifiable assets at
the date of acquisition. Goodwill on acquisition of associates is included in investment in associates.
1.6 Investment property
Certain of the Group’s properties are classified as investment properties; being held for long-term investment and to earn rental income. Investment
properties are stated at cost and the building element is depreciated to reduce cost to its estimated residual value at rates between 3.33% and 8.33%
on a straight-line basis.
Goodwill is not amortised but is tested annually for impairment or more frequently if events or changes in circumstances indicate that the carrying
amounts may be impaired and is carried at cost less any impairment. On disposals, goodwill is included in the calculation of gains or losses on the
sale of the previously acquired entity.
Goodwill relating to previous acquisitions (pre-1999) was charged under UK GAAP to equity and is not included in the gain or loss on sale of the
previously acquired entity to which it relates.
For the purposes of impairment testing, goodwill is allocated to cash-generating units. Each of these units represents the Group’s investment in each
region of operation.
Research and development expenditure
Research expenditure is expensed as incurred. Costs incurred in developing projects are capitalised as intangible assets when it is considered that the
commercial viability of the project will be a success based on discounted expected cash flows, and the costs can be reliably measured.
Other development costs are expensed and are not recognised as assets.
Other intangible assets
Intangible assets (including research and development) acquired as part of a business combination are capitalised at fair value at the date of acquisition.
Other intangibles are capitalised at cost.
The policies applied to the Group’s intangible assets are summarised as follows:
Useful lives
Amortisation
Research and
development
costs
Finite
Straight-line
basis, with a
maximum life of
four years from
commencement
of commercial
production, with
no residual value
Internally generated or acquired
Internally generated
Patents
and licences
Finite
Software
Finite
Straight-line
basis, with
Customer
Other
related
Indefinite
Finite
Straight-line Not amortised,
Straight-line
but subject
basis, with a
basis, with a
to impairment
maximum life
a maximum maximum life of
testing
of 20 years,
20 years, with
life of three
years, with no no residual value. with no residual
value. Most
The majority
residual value
patents are
of customer
depreciated
related
over a period
intangible
of 10 years
assets are
or less
depreciated
over their useful
lives of between
three and five
years
Acquired
Acquired
Acquired
Acquired
1.7 Leases
Leases of property, plant and equipment where the Group has substantially all the risks and rewards of ownership, are classified as finance leases.
Finance leases are capitalised at the inception of the lease at the lower of the fair value of the leased asset and the present value of lease payments
discounted at the interest rate implicit in the lease. The interest element in the lease payment is expensed at a constant interest rate, whereas the
obligation net of the interest element is included in other payables.
All other leases are classified as operating leases and rentals are expensed over the period of the lease on a straight-line basis.
Where a Group company acts as a lessor the lease is classified as a finance or operating lease and accounted for as follows.
When assets are leased out under a finance lease, the present value of the lease payments are recognised as a receivable. The rental is allocated
between finance income and repayment of capital in each accounting period using the actuarial method, such that finance income will emerge as
a constant rate of return on the lessor’s net investment in the lease.
Lease income on operating leases is recognised over the term of the lease on a straight-line basis and the asset is included in the statement of financial
position based on the nature of the asset.
1.8 Impairment
For goodwill and intangible assets with indefinite lives, the carrying value is reviewed annually for impairment or more frequently if events or changes
in circumstances indicate that the carrying amounts may be impaired.
Other intangible assets and property, plant and equipment are reviewed for impairment losses whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable. If the carrying value of the asset is higher than the recoverable amount of the asset an impairment loss
is recognised. In carrying out such impairment evaluations the recoverable amount is the higher of the asset’s value in use or its fair value less costs to
sell. Assets that do not generate largely independent cash inflows are grouped at the lowest level for which separate identifiable cash flows exist
(cash-generating units) and the recoverable amount is determined for the cash-generating unit. If necessary, the carrying value is reduced by
charging an impairment loss in the income statement.
Reversal of impairment
Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount,
but so that it does not exceed the carrying amount that would have been determined had no impairment loss been recognised. No impairment loss
is reversed for goodwill.
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Notes to the Financial Statements
for the year ended 30 April 2016
1.9 Financial assets
Group
The Group classifies its financial assets on initial recognition in the following categories. The classification depends on the purpose for which the financial
assets were acquired.
(i) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.
Such financial assets arise when the Group provides money, goods or services directly to a debtor with no intention of trading the receivable. They are
included in trade and other receivables in the statement of financial position. These assets are held at amortised cost using the effective interest rate method.
(ii) Held to maturity financial assets
These financial assets are non-derivative financial assets with fixed or determinable payments and fixed maturities that the Group has the positive intention
and ability to hold to maturity. These assets are held at amortised costs using the effective interest rate method.
Included within these amounts are cash deposits that are subject to restrictions and are not freely available for use by the Group until a future date.
(iii) Financial assets at fair value through profit or loss
A financial asset is classified in this category if acquired principally for the purpose of trading or if so designated by management. Assets held in this
category are classified as current assets if expected to be settled within one year; otherwise they are classified as non-current. Financial assets in this
category are initially recorded and subsequently valued at fair value, with changes in fair value recognised in the income statement.
(iv) Available-for-sale financial assets
Financial assets not classified in any of the above categories are shown as available-for-sale financial assets and are shown as non-current assets, unless
management intends to sell the financial assets within 12 months of the end of the financial year. These assets are initially recognised at cost and are
subsequently carried at fair value.
(v) Recognition and measurement
For investments designated as financial assets at fair value through profit or loss or available-for-sale financial assets the fair values of quoted investments
are based on current bid prices. For unlisted investments the Group uses various valuation techniques to determine fair values, including at cost less any
provision for impairment, where appropriate.
At each year end date the Group assesses whether there is objective evidence that a financial asset, or group of financial assets, has become impaired.
Any impairment loss so recognised is reflected in the income statement. Indications of impairment may include a reduction in the quoted price,
a reduction in the underlying profitability of the investment and other factors indicating that the value of the investment has fallen.
Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised
amounts and there is an intention to settle on a net basis or realise the asset and simultaneously settle the liability.
Company
In the Company statement of financial position, investments in subsidiaries and associates are stated at cost less impairment. The Company reviews,
at least annually, the carrying value of investments and performs an impairment exercise.
An impairment charge is made where there is evidence that the carrying value exceeds the future cash flows of the investment or where its carrying
amount will not be recovered from sale.
1.10 Inventories
Inventories are stated at the lower of cost and net realisable value. Cost includes costs incurred in bringing inventories to their present location
and condition. The cost of work-in-progress and finished goods includes an appropriate proportion of production overheads.
Finished goods also include operating equipment not yet sited.
Raw materials and consumables are valued on a first-in first-out basis or on an average cost basis where average cost is not significantly different to
first-in first-out due to the fast turnaround of consumables. The Group uses standard costs to value inventory and these standard costs are regularly
updated to reflect current prices.
1.11 Trade receivables
Trade receivables are stated at fair value and subsequently measured at amortised cost using the effective interest method net of impairment provisions.
An impairment provision is reflected in the income statement if there is objective evidence that the Group will not be able to recover the full amount of the
receivable. The impairment is calculated as the difference between the carrying value of the receivable and the present value of the expected future cash
flows, discounted at the original interest rate. Such factors as the debtor experiencing significant financial difficulties, bankruptcy, financial reorganisation
or default on payments are indicators that the receivable is impaired.
1.12 Cash and cash equivalents
Cash and cash equivalents are carried in the statements of financial position at cost. Bank overdrafts are included within borrowings in current liabilities in
the statements of financial position. For the purposes of the statements of cash flows, cash and cash equivalents comprises cash on hand, unrestricted
deposits held at banks with less than three months’ notice and other highly liquid investments with an original maturity of three months or less, less bank
overdrafts.
1.13 Share capital
Shares of the Company are classified as equity.
Where the Company acquires its own equity share capital (treasury shares), the consideration paid, including any directly attributable incremental costs
(net of tax relief), is deducted from equity attributable to the Company’s equity shareholders until the shares are either cancelled or subsequently reissued.
The amount is shown in equity as treasury shares. Where such shares (the treasury shares) are subsequently reissued, any consideration received, net of
any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the Company’s equity
holders.
1.14 Borrowings
Borrowings are recorded initially at the fair value of the consideration received net of directly attributable transaction costs.
After initial recognition, borrowings are subsequently measured at amortised cost using the effective interest rate method. This method includes any initial
issue costs and discounts or premiums on settlement. Finance costs on the borrowings are charged to the income statement under the effective interest
rate method.
Financial liabilities are derecognised when the obligation under the liability is cancelled, discharged or has expired.
1.15 Employee benefits
Pension obligations
Group companies have various pension schemes in accordance with local conditions and practices in the countries in which they operate.
The Company operates a defined benefit pension scheme, which is closed to new entrants, with contributions made by employees and the Company.
The defined benefits are based upon the employee’s length of service and final pensionable salary. The Company also operates a defined contribution
pension scheme.
The Group also has defined benefit pension schemes as noted in note 22.
The net obligation for the Group’s defined benefit pension schemes is calculated for each scheme separately by estimating the future benefit that
employees have earned in the current and prior periods, discounting that amount and deducting the fair value amount of plan assets. The calculation is
performed by independent actuaries using the projected unit credit actuarial method. If this calculation results in a potential asset for the Group, this asset
is only recognised to the present value of the economic benefits available in the form of a refund of contributions paid to the fund or reductions in future
contributions. In calculating the present value of any economic benefit consideration is given to any minimum funding requirements.
Re-measurement of the net liability, which comprises actuarial gains and losses, the return on plan assets (excluding interest) and the effects of any asset
ceiling, are recognised in other comprehensive income. The Group determines the net interest expense (income) on the net liability (asset) for the period
by applying the discount rate used to measure the defined benefit obligation at the beginning of the period to the then net defined liability (asset), taking
into account changes in the period as a result of contributions and pension benefits paid. Other expenses are charged to profit and loss.
When plan benefits are changed or the plan curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment
is recognised in profit and loss. Gains and losses on settlement of any plan are recognised when settlement occurs.
Other post-employment benefits
In addition to the pension schemes noted above, certain Group companies are required to make provisions for employee retirements. These provisions
are based on local circumstances, length of service and salaries of the employees concerned. They are included in post-employment benefit obligations,
and shown in note 22 as other retirement provisions.
Equity compensation benefits
The cost of equity-settled transactions with employees is measured by reference to the fair value at the date of grant, determined using the
Black-Scholes model. The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period
in which the performance conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (“vesting date”).
The cumulative expense recognised at each reporting date until the vesting date, reflects the extent to which the vesting period has expired and the
number of awards that, in the opinion of the directors of the Group and based on the best available estimate, at that date, of the number of equity
instruments that will ultimately vest. The income statement charge or credit for the period represents the movement in the cumulative expense
recognised as at the beginning and end of the period. No expense is recognised for awards that do not ultimately vest. The Group does not
have options with market conditions.
On exercise of the option the proceeds received are allocated to share capital (nominal value of shares) and share premium.
The grant by the Company of options over its equity instruments (shares) to the employees of subsidiary undertakings in the Group is treated as a capital
contribution. The fair value of the employee services received, measured by reference to the grant date fair value, is recognised over the investing period
as an increase to the investment in subsidiary undertakings with a corresponding credit to other reserves in equity.
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Notes to the Financial Statements
for the year ended 30 April 2016
Termination benefits
Termination benefits are recognised in the income statement in the period when the Group is demonstrably committed to the termination of employment
or to provide termination benefits as a result of an offer made to encourage voluntary redundancy.
Short-term employee benefits
The Group recognises a liability and an expense for short-term employee benefits (such as holiday pay, bonuses and profit sharing) where these
obligations contractually arise (for example, as a result of employment contracts) or where a constructive obligation has arisen from past practice.
1.16 Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow
of resources will be required to settle the obligation and a reliable estimate can be made. Provisions are discounted where the effect of the time value
of money is material.
1.17 Taxation
Tax expense for the current period comprises current and deferred tax and is recognised in the income statement, except to the extent that it relates
to items recognised in other comprehensive income or equity. The current tax charge is calculated on the basis of the laws enacted or substantively
enacted at the balance sheet date in the countries where the Group operates.
Deferred tax is provided in full on temporary differences arising between the tax base of assets and liabilities and their carrying value in the accounts.
Deferred tax is measured on an undiscounted basis at the tax rates that are expected to apply in future periods in which the temporary difference will
reverse, based on tax rates and laws enacted or substantively enacted at the year end.
Deferred tax assets are recognised to the extent that it is probable that the future taxable profit, against which the deductible temporary differences
can be utilised, will be available.
Deferred tax is provided, or an asset recognised, on taxable temporary differences arising on investments in subsidiaries and associates, except where the
timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.
Current tax assets and liabilities are measured at the amounts expected to be recovered from, or paid to, the taxation authorities, based on tax rates and
laws that are enacted or substantively enacted at the year end.
1.21 Own work capitalised
Some of the Group’s subsidiaries manufacture vending equipment, which is then sold to the Group’s Operations companies and capitalised by them
as fixed assets. The amount capitalised includes direct costs associated with the manufacture of such items together with applicable overheads, but
excluding general overheads and administration costs. Profits made by the selling company are eliminated on consolidation.
1.22 Dividend distributions
Dividends to the Company’s shareholders are recognised as a liability and deducted from shareholders’ equity in the period in which the shareholders’
right to receive payment is established.
1.23 Financial guarantee contracts
Where the Company enters into financial guarantee contracts to warranty the indebtedness of one company within the Group, the Company considers
these to be insurance arrangements and accounts for them as such. In this respect, the Company treats the guarantee contract as a contingent liability
until such time as it becomes probable that the Company will be required to make a payment under the guarantee (note 27).
1.24 Government grants
Grants that compensate the Group for expenses incurred are recognised in profit and loss on a systematic basis in periods in which the expenses are
recognised, provided the terms of the grant are satisfied.
1.25 Specific items
The Group’s Statement of Comprehensive Income and segmental analysis show operating profit before and after specific items. The presentation and
use of Specific items is a non-GAAP measure and the use of this measure may not be comparable to similarly titled measures used by other companies.
Specific items are those that in management’s judgment need to be disclosed separately by virtue of their size, nature or incidence. Management
determines whether an item is specific and warrants separate disclosure by considering both qualitative and quantitative factors, such as the frequency
or predictability of occurrence. This is consistent with the way operating performance is presented and reported to management.
The directors believe that the presentation of the Group’s results in this way is relevant to an understanding of the Group’s performance, as specific
items are identified by their size, nature or incidence.
For those years where specific items are shown in the Group Statement of Comprehensive Income an alternative earning per share is shown in the
earnings per share note. Alternative earnings per share and alternative diluted earning per share are shown and are calculated on earnings available
to Ordinary shareholders excluding specific items.
1.18 Trade and other payables
Trade payables are initially recorded at fair value and subsequently recorded at amortised cost using the effective interest rate method.
2 New standards, amendments and interpretations
New accounting standards
1.19 Segment reporting
Operating segments are reported in a manner consistent with internal reporting provided to the Chief Operating Decision Maker as required by IFRS 8
Operating Segments. Details of the segments are shown in note 3.
1.20 Revenue recognition
Revenue from the operation of photobooths and other operating equipment is the cash received, and held in machines up to the year-end date,
net of value added tax and refunds.
Revenue from the sale of goods is recognised upon delivery of products and acceptance, if applicable, by the customer. Revenue is stated net of value
added tax and discounts.
Revenue from the sale of services, including maintenance contracts and royalty income, is recognised evenly over the period in which the service/licence
is provided to the customer.
Rental income from investment property and other assets under operating lease contracts is accounted for on a straight-line basis over the lease term
and is included in other operating income.
Dividend income is recognised when the right to receive payment is established.
Interest income is recognised using the effective interest method and mainly consists of bank interest. It is accounted for as finance income.
Adopted by the Group
The Group has adopted the following new and amended standards for the first time in these financial statements with no material impact.
(cid:129)
(cid:129)
(cid:129)
(cid:129)
(cid:129)
Amendments to IFRS 2 Share based Payments - clarifies issues relating to the definitions of performance and service conditions
which are vesting conditions.
Amendments to IFRS3 Business Combinations - clarifies when other applicable IFRSs should be referred to when determining the
classification of contingent consideration as a liability or equity instrument.
Amendments to IFRS8 Operating Segments - clarifies that entities should disclose those factors that are used to identify the entity’s
Amendments to IAS19 Defined Benefit Plans: simplifies the accounting for contributions that are independent of a number of years
Employee Contributions - of employee service.
Amendments to IAS 24 Related Party Disclosures - clarifies that an entity providing key management personnel services to the reporting
reportable segments when operating segments have been aggregated.
entity or to the Parent Company is a related party of the reporting entity.
Not adopted by the Group
Certain changes to IFRS will be applicable to the Group’s financial statements in future years, including the IFRS Improvements Cycle.
The more significant changes are shown below.
IFRS 9 Financial Instruments (effective from 1 January 2018) reflects all phases of the financial instruments project and replaces IAS39 Financial
Instruments: Recognition and Measurement. This standard introduces new classification and measurement requirements of financial instruments,
new general hedge accounting requirements and a new expected credit loss model for measuring impairment on financial assets. The Group’s initial
impression is that adopting this standard will not have a material impact on the financial statements. A detailed evaluation will commence in 2016.
IFRS15 Revenue from Contracts with Customers (effective from 1 January 2018) replaces the existing Revenue Standard. The new standard is based on
the principle that revenue is recognised when control of goods or services is transferred and provides a single principle based standard. The Group’s initial
impression is that this standard will not have a material impact on the consolidated results or financial position. A detailed evaluation will commence in 2016.
IFRS16 Leases was issued in January 2016, and is effective from 1 January 2019. This standard will replace all existing lease accounting requirements.
The standard makes no distinction between operating and finance leases and will require nearly all leases to be reflected on the balance sheet.
The Group currently has operating leases, mainly for motor vehicles which under the new standard will result in an increase in assets and liabilities.
The Group has a strong net cash position so the impact on gearing will be marginal. The Group will begin to assess the impact of this standard in 2016,
including any impact on site agreements.
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Notes to the Financial Statements
for the year ended 30 April 2016
3 Segmental analysis
IFRS 8 requires operating segments to be identified, based on information presented to the Chief Operating Decision Maker (CODM) in order to allocate
resources to the segments and monitor performance. The Group reports its segments on a geographical basis, Asia, Continental Europe and United
Kingdom and Ireland. The Group’s European operations are predominately based in Western Europe and with the exception of the Swiss operations use
the Euro as their domestic currency. The Board believes that the economic characteristics of the European operations, together with the fact that they are
similar in terms of operation, they use common systems for operations and administrative functions and the nature of the regulatory environment allows
the European operations to be aggregated into one reporting segment.
The Group monitors performance at the adjusted operating profit level before special items, interest and taxation.
In accordance with IFRS 8, no segment information is provided for assets and liabilities in the disclosures below, as this information is not regularly
provided to the CODM.
The segment results are as follows:
2016
Total revenue
Inter-segment sales
Revenue from external customers
EBITDA
Depreciation and amortisation
Operating profit excluding associates
Share of post-tax profits from associates
Corporate costs excluding depreciation and amortisation
Corporate depreciation and amortisation
Operating profit
Finance revenue
Finance costs
Profit before tax
Tax
Profit for year
Capital expenditure
Corporate capital expenditure
Total capital expenditure
Reconciliation of operating profit
Operating profit before associates
Share of post tax profits from associates
Corporate operating profit
Total operating profit
Asia
£’000
45,364
(865)
44,499
13,633
(3,134)
10,499
Continental
Europe
£’000
100,816
(7,104)
93,712
33,881
(9,718)
24,163
United
Kingdom
& Ireland
£’000
46,066
(283)
45,783
11,934
(3,973)
7,961
4,623
13,221
4,669
Asia
£’000
10,499
165
–
10,664
Continental
Europe
£’000
24,163
–
737
24,900
United
Kingdom
& Ireland
£’000
7,961
–
(3,791)
4,170
Total
£’000
192,246
(8,252)
183,994
59,448
(16,825)
42,623
165
(2,918)
(136)
39,734
538
(166)
40,106
(10,907)
29,199
22,513
2,303
24,816
Total
£’000
42,623
165
(3,054)
39,734
2015
Total revenue
Inter-segment sales
Revenue from external customers
EBITDA
Depreciation and amortisation
Operating profit excluding associates
Share of post-tax profits from associates
Corporate costs excluding depreciation and amortisation
Corporate depreciation and amortisation
Operating profit
Finance revenue
Finance costs
Profit before tax
Tax
Profit for year
Capital expenditure
Corporate capital expenditure
Total capital expenditure
Asia
£’000
38,925
(720)
38,205
10,232
(3,465)
6,767
Continental
Europe
£’000
100,127
(5,782)
94,345
32,013
(9,967)
22,046
United
Kingdom
& Ireland
£’000
44,867
(215)
44,652
11,810
(3,359)
8,451
3,895
14,193
3,799
Included in corporate costs for April 2015 is the profit on sale of vacant land at the Bookham site of £3,484,000.
Reconciliation of operating profit
Operating profit before associates
Share of post tax profits from associates
Corporate operating profit
Total operating profit
Asia
£’000
6,768
164
–
6,932
Continental
Europe
£’000
22,045
–
1,012
23,057
United
Kingdom
& Ireland
£’000
8,453
–
(72)
8,381
Inter-segment revenue mainly relates to sales of equipment.
The Parent Company is domiciled in the UK. Total revenue from external customers is as follows:
Total revenue from external customers
Asia and rest of the world
Continental Europe
UK
Total revenue from external customers
Sales of equipment
Sales of spare parts and consumables
Other sales
Vending revenue
Group
2016
£’000
44,499
95,960
43,535
183,994
Group
2016
£’000
6,590
7,517
183
14,290
169,704
183,994
Total
£’000
183,919
(6,717)
177,202
54,055
(16,791)
37,264
164
1,032
(90)
38,370
191
(65)
38,496
(10,452)
28,044
21,887
1,729
23,616
Total
£’000
37,266
164
940
38,370
2015
£’000
38,205
96,265
42,732
177,202
2015
£’000
5,809
8,139
21
13,969
163,233
177,202
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Notes to the Financial Statements
for the year ended 30 April 2016
4 Profit for the year
Costs and overhead items charged/credited in arriving at profit for the year, include the following:
Amortisation, depreciation and impairment
Amortisation of previously capitalised research and development expenditure
Amortisation of intangible assets other than research and development
Depreciation of property, plant and equipment
- owned
- leased
2016
£’000
1,015
533
1,548
15,304
109
15,413
Amortisation and impairment of capitalised research and development expenditure is reflected in the income statement in cost of sales.
Amortisation of intangible assets other than research and development.
- reflected in income statement in cost of sales
- reflected in income statement in administrative expenses
Operating lease rentals
- property
- plant and equipment
Restated as per note 2
Inventory cost
Cost of inventories recognised as an expense
Inventory provision reversed
2015
£’000
1,678
414
2,092
14,709
80
14,789
206
208
414
2015
£’000
462
966
1,428
280
253
533
2016
£’000
396
1,866
2,262
11,441
52
11,493
12,575
–
12,575
Inventory provision reversed relates to provisions which have been reversed during the year.
Other items
Research and development current year expenditure, not capitalised
Own work capitalised
Trade receivables impairment (note 15)
Net foreign exchange gains
(Gains)/losses on sale of property, plant and equipment
Direct expenses for investment properties generating rental income
2016
£’000
177
(1,842)
(45)
(106)
(236)
53
Audit and non-audit services
The following fees for audit and non-audit services were paid or are payable to the Company’s auditor, KPMG LLP and its associates.
Audit of these financial statements
Fees payable to the Company’s auditor and its associates for other services
- audit of the Company’s subsidiaries pursuant to legislation
- other services
Audit fee of the Company
2016
£’000
162
131
21
314
2016
£’000
60
2015
£’000
377
(2,613)
292
(956)
(3,510)
68
2015
£’000
162
151
57
370
2015
£’000
60
In order to maintain the independence of the external auditors, the Board has determined policies as to what non-audit services can be provided by the
Company’s external auditors and the approval processes related thereto. This function is performed by the Audit Committee. Such services will only be
approved if there are clear efficiencies and added value benefits to the Company. Fees paid to KPMG LLP and its associates for non-audit services to
the Company itself are not disclosed individually, as they are included above.
In addition to the audit fees payable to KPMG LLP and its associates, certain Group subsidiaries are audited by other firms. The following shows the
fees payable to those firms:
Audit fees
Other services
Summary
Total fees paid or payable to all of the Group’s auditors for audit and other services
Other operating income
Other operating income principally includes rental income from investment property (note 13)
Specific items
Specific items are as follows:
Profit on sale of land
Total
2016
£’000
67
3
70
2016
£’000
384
2016
£’000
1,306
2016
£’000
–
–
2015
£’000
89
3
92
2015
£’000
462
2015
£’000
1,166
2015
£’000
3,484
3,484
Specific items are those that in management’s judgment need to be disclosed separately by virtue of their size, nature or incidence.
Management determines whether an item is specific and warrants separate disclosure by considering both qualitative and quantitative factors,
such as the frequency or predictability of occurrence.
In the year ended 30 April 2015 the Company sold its vacant land at the Bookham site.
5 Employees
Staff costs, including costs relating to the Group’s key management personnel, who comprise the directors of the Parent Company,
during the year amounted to:
Wages and salaries
Social security costs
Share options granted to directors and employees
Post employment benefit costs
- defined benefit schemes
- defined contribution schemes
- other post-employment costs
Group
2016
£’000
32,653
7,096
413
228
243
243
40,876
2015
£’000
32,031
7,242
371
247
218
191
40,300
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Notes to the Financial Statements
for the year ended 30 April 2016
Directors’ emoluments
Full details of directors’ remuneration and share options are given in the Remuneration Report on pages 36 to 48.
The average number of employees during the year (including executive directors) comprised:
Full - time
Part - time
UK: Full - time
UK: Part - time
Continental Europe: Full - time
Continental Europe: Part - time
Asia and rest of the world: Full - time
Asia and rest of the world: Part - time
6 Finance revenue and costs
Finance revenue
Bank interest
Other interest
Other financial income
Finance costs
Bank loans and overdrafts at amortised cost
Other loans at amortised costs and finance leases
Provision on investments and other finance charges
7 Taxation expense
Tax charges/(credits) in the statement of comprehensive income
Taxation
Current taxation
UK Corporation tax
- current year
- prior years
Overseas taxation
- current year
- prior years
Total current taxation
Deferred taxation
Origination and reversal of temporary differences
- current -year - UK
- current -year - overseas
Adjustments to estimated recoverable amounts of deferred tax assets arising in previous years
- UK
- Overseas
Impact of change in rate
Total deferred tax
Tax charge in the statement of comprehensive income
Group
2016
£’000
950
167
1,117
291
9
507
42
152
116
1,117
2016
£’000
528
10
–
538
149
17
–
166
2016
£’000
1,965
(15)
1,950
9,023
(64)
8,959
10,909
(520)
256
(15)
205
72
(2)
10,907
2015
£’000
924
164
1,088
264
11
515
42
146
110
1,088
2015
£’000
170
19
2
191
52
12
1
65
2015
£’000
2,164
(144)
2,020
7,491
(62)
7,429
9,449
1,103
(123)
(56)
79
–
1,003
10,452
Tax relating to items charged to other components of comprehensive income
Corporation tax
Deferred tax
Tax credit in other comprehensive income
2016
£’000
485
52
537
Reconciliation of total tax charge
The difference between the Group tax charge and the standard UK corporation tax rate of 20.0% (2015: 20.9%) is explained below:
Profit before tax
Tax using the UK corporation tax rate of 20.0% (2015: 20.9%)
Effect of:
- non-taxable items
- change in UK tax rates
- overseas tax rates
- losses not recognised in deferred tax (relieved)\incurred
- adjustments to tax in respect of prior years
Total tax charge
Effective tax rate
2016
£’000
40,106
8,021
(227)
112
3,598
(708)
111
10,907
27.2%
2015
£’000
–
402
402
2015
£’000
38,496
8,052
168
7
2,648
(125)
(298)
10,452
27.2%
8 Profits attributable to members of the Parent Company
The profit for the year, after tax, dealt with in the financial statements of the Parent Company is £19,951,000 (2015: £19,749,000), including dividends
received from subsidiaries.
9 Dividends paid and proposed
Interim
2015 paid on 14 May 2015
2014 paid on 6 May 2014
Final
2015 paid on 12 November 2015
2014 paid on 7 November 2014
Special
paid on 15 May 2014
2016
Pence
per share
2.34
£’000
8,733
2015
Pence
per share
£’000
1.80
6,690
2.54
9,484
4.88
18,217
1.95
2.00
5.75
7,257
7,434
21,381
Year ended 30 April 2016 – Proposed dividends not yet paid
The Board declared an interim dividend of 2.575p per share for the year ended 30 April 2016, amounting to £9,669,000 which was paid on
12 May 2016. The Board proposes a final dividend for the year ended 30 April 2016 of 3.285p per share, which is subject to shareholders approval
at the Annual General Meeting to be held on 20 October 2016. The Board also proposes a special dividend of 2.815p per share. Both the final and
special dividends will be paid on 10 November 2016.
Year ended 30 April 2015 – Paid after 30 April 2015
The Board declared an interim dividend of 2.34p per share for the year ended 30 April 2015, amounting to £8,733,000 which was paid on 14 May 2015.
The Board proposed a final dividend for the year ended 30 April 2015 of 2.54p per share, amounting to £9,484,000 which was paid on 12 November 2015.
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Notes to the Financial Statements
for the year ended 30 April 2016
10 Earnings per share
Basic earnings per share amounts are calculated by dividing net earnings attributable to shareholders of the Parent of £29,066,000 (2015: £27,900,000)
by the weighted average number of shares in issue during the year, excluding those held, where applicable, as treasury shares.
Diluted earnings per share amounts are calculated by dividing the net earnings attributable to shareholders of the Parent by the weighted average number
of shares outstanding during the year plus the weighted average number of shares that would be issued on conversion of all the dilutive potential shares into
shares. The Group has only one category of dilutive potential shares: the share options granted to senior staff, including directors, as detailed in note 20.
The earnings and weighted average number of shares used in the calculation are set out in the table below:
Basic earnings per share
Effect of dilutive share options
Diluted earnings per share
2016
Weighted
average
number of
shares
£’000
374,121
2,514
376,635
Earnings
£’000
29,066
29,066
Earnings
per share
pence
7.77
(0.05)
7.72
Earnings
£’000
27,900
27,900
2015
Weighted
average
number of
shares
£’000
372,381
3,314
375,695
Earnings
per share
pence
7.49
(0.06)
7.43
Potential shares (for example, arising from exercising share options) are treated as dilutive only when their conversion to shares would decrease basic
earnings per share or increase loss per share from continuing operations.
Alternative earnings per share
The table below reconciles earnings per share (EPS) and diluted earnings per share (DPS) before and after specific items.
Earnings available to shareholders
Specific items net of tax
Earnings after special items
Weighted average number of shares
in issue in period- basic (’000)
- including dilutive share options (’000)
£’000
29,066
–
29,066
374,121
376,635
2016
EPS
7.77
–
7.77
DPS
7.72
–
7.72
£’000
27,900
(2,752)
25,148
372,381
375,695
2015
EPS
7.49
(0.74)
6.75
DPS
7.43
(0.73)
6.70
There were no specific items in the year ended 30 April 2016.
Specific items for the year ended 30 April 2015 relate to the sale of vacant land at the Bookham site. The contract for £4,200,000 was exchanged
on 5 June 2014 with cash settlement on completion one month later.
11 Goodwill and other intangible assets
Goodwill
Group
Cost:
At 1 May 2014
Exchange difference
Additions
At 30 April 2015
At 1 May 2015
Exchange difference
Additions
At 30 April 2016
Impairment charges:
At 1 May 2014
Exchange difference
At 30 April 2015
At 1 May 2015
Exchange difference
At 30 April 2016
Net book value:
At 1 May 2016
At 1 May 2015
At 1 May 2014
£’000
10,209
(246)
513
10,476
10,476
154
1,273
11,903
298
(2)
296
296
1
297
11,606
10,180
9,911
Goodwill by segments and impairment of goodwill
The table below shows the allocation of goodwill acquired through business combinations between segments.
Goodwill has been allocated for impairment testing purposes to eight (2015: seven ) cash-generating units (CGUs); allocated between geographical
areas and activity in accordance with impairment testing in the prior year:
Carrying amount
UK & Ireland
CGU 1
CGU 2
CGU 3
CGU 4
Total UK & Ireland
Continental Europe
CGU 1 - France
CGU 2 - Germany
CGU 3 - Switzerland
Total Continental Europe
Asia
CGU 1 - Japan
Total Asia
Total
Total
2016
£’000
154
14
317
1,273
1,758
280
1,797
526
2,603
7,245
7,245
11,606
2015
£’000
154
14
317
–
485
261
1,676
513
2,450
7,245
7,245
10,180
The Group tests annually, for impairment, or more frequently if there are indications that goodwill might be impaired. The recoverable amount of all CGUs
has been determined on a value in use basis.
Value in use was determined by discounting the future cash flows of the CGU, for a finite period of five years, based on actual operating results,
budgets and economic market research.
Key assumptions
Growth rate 3% (2015: 3%)
The growth rate has been determined based on a conservative basis for expected annual growth in EBITDA for each CGU and takes into account
revenue, volumes, selling prices and operating costs. It is based on past experience and expected future developments in markets and operations.
Discount rate 8–11% (2015: 8–11%)
The pre-tax discount rates applied to the cash flow forecasts for the CGUs are derived from the pre-tax weighted average cost of capital for the Group
adjusted for economic and political risks for the specific country concerned.
The rates used are: United Kingdom 8.7%, (2015: 9.5%), Ireland 8.1% (2015: 8.7%), France 7.8% (2015: 8.4%), Germany 7.51% (2015:8.1%),
Switzerland 7.3% (2015: 7.8% ) and Japan 7.3% (2015: 8.3%). The Board is confident, overall, that these discount rates reflect the circumstances
in each region, and are in accordance with IAS 36.
Sensitivity to changes in assumptions
There is significant headroom for each CGU and management believes that no reasonable possible change in any of the above assumptions would
cause the carrying value of those CGUs to exceed their recoverable amount. Consequently, no impairment losses were recognised in 2016 (2015: none).
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The addition to goodwill in 2016 relates to the acquisition of operations in the United Kingdom, and in 2015 to acquisitions in Switzerland
as shown in note 30.
Company
The Company has no goodwill.
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Notes to the Financial Statements
for the year ended 30 April 2016
Other intangible assets
Group
Cost:
At 1 May 2014
Exchange differences
Additions
- Internally generated
- External
Reclassifications
Disposals
At 30 April 2015
At 1 May 2015
Exchange differences
Additions
- Subsidiaries acquired
- Internally generated
- External
Reclassifications
Disposals
At 30 April 2016
Amortisation:
At 1 May 2014
Exchange differences
Provided during year
Reclassifications
Disposals
At 30 April 2015
At 1 May 2015
Exchange differences
Subsidiaries acquired
Provided during year
Disposals
Reclassifications
At 30 April 2016
Net book value:
At 30 April 2016
At 30 April 2015
At 30 April 2014
Research
& development
costs
£’000
Other
intangible
assets
£’000
7,607
(742)
2,560
–
–
(1,149)
8,276
8,276
577
–
2,935
–
–
(5,675)
6,113
5,374
(604)
1,678
–
(814)
5,634
5,634
457
–
1,015
(5,675)
–
1,431
4,682
2,642
2,233
7,112
(479)
–
1,081
(8)
(121)
7,585
7,585
396
255
–
286
56
(578)
8,000
3,569
(160)
414
(8)
(95)
3,720
3,720
189
1
533
(510)
43
3,976
4,024
3,865
3,543
Total
£’000
14,719
(1,221)
2,560
1,081
(8)
(1,270)
15,861
15,861
973
255
2,935
286
56
(6,253)
14,113
8,943
(764)
2,092
(8)
(909)
9,354
9,354
646
1
1,548
(6,185)
43
5,407
8,706
6,507
5,776
Company
Cost:
At 1 May 2014
Additions
- external
Disposals
- external
At 30 April 2015
At 1 May 2015
Additions
- internally generated
- external
Disposals
- external
At 30 April 2016
Amortisation:
At 1 May 2014
Provided during year
Disposals
- external
At 30 April 2015
At 1 May 2015
Provided during year
Disposals
- external
Transfers
Transfers to available for sale
At 30 April 2016
Net book value:
At 30 April 2016
At 30 April 2015
At 30 April 2014
Research &
development
costs
£’000
Other
intangible
assets
£’000
Patents &
trade marks
£’000
–
–
–
–
1,457
–
–
1,457
–
–
–
–
–
243
–
–
–
243
1,214
–
–
1,309
379
(88)
1,600
1,600
–
160
(475)
1,285
762
152
(88)
826
826
279
(475)
–
–
630
655
774
547
5,506
–
–
5,506
5,506
–
–
–
5,506
551
550
–
1,101
1,101
551
–
–
–
1,652
3,854
4,405
4,955
Total
£’000
6,815
379
(88)
7,106
7,106
1,457
160
(475)
8,248
1,313
702
(88)
1,927
1,927
1,073
(475)
–
–
2,525
5,723
5,179
5,502
Capitalised research and development expenditure is amortised over a maximum of four years, with no residual value.
Included in the net book value of other intangible assets is £2,343,000 corresponding to droit de bail (2015: £2,194,000 and 2014: £2,068,000).
Droit de bail, which occur in France, are payments made for the right to occupy a space to site vending equipment. The Group has control over the use
of these rights and has classified them as having an indefinite life, as the Group considers that there is no foreseeable limit to the period in which they can
be utilised. Although the Group has no intention of selling these rights, there is a value attached to them. These assets are based on cost, being the
payments made for the right to occupy the space. In determining fair values of such assets for the purpose of impairment testing, the Group has based
its assumptions on current prices paid for such assets (using actual amounts paid by the Company and/or management estimates for amounts paid by
third parties) and, where the right has been held for a number of years, the expected sales price, less costs to sell. The carrying amount of these intangible
assets has been reviewed on an individual basis for impairment testing at least once a year and more frequently if there is an indication that they may be
impaired. If their fair value is less than their carrying value, an impairment loss is recognised and charged to cost of sales. Management believes that no
reasonable possible change in the basis of this assessment would cause the carrying value of these rights to exceed their recoverable value.
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Notes to the Financial Statements
for the year ended 30 April 2016
12 Property, plant and equipment
Group
Cost:
At 1 May 2014
Exchange difference
Additions
- new subsidiaries
- internal
- external
Reclassifications
Disposals
At 30 April 2015
Exchange difference
Additions
- new subsidiaries
- internal
- external
Reclassifications
Transfer to assets held for sale
Disposals
At 30 April 2016
Depreciation
At 1 May 2014
Exchange difference
New subsidiary
Provided during year
Reclassifications
Disposals
At 30 April 2015
Exchange difference
New subsidiary
Provided during year
Reclassifications
Transfers to assets held for sale
Disposals
At 30 April 2016
Net book value:
At 30 April 2016
At 30 April 2015
At 30 April 2014
Land
& Buildings
£’000
7,264
(495)
–
–
31
–
(387)
6,413
437
278
–
192
–
(1,542)
(719)
5,059
5,738
(399)
–
113
–
(386)
5,066
366
28
55
–
(1,446)
(302)
3,767
1,292
1,347
1,526
Photobooths
and vending
Plant
machinery,
furniture,
fixtures and
machines motor vehicles
£’000
£’000
169,028
(10,679)
1,516
2,613
15,674
–
(12,253)
165,899
12,376
–
925
18,477
14
–
(9,381)
188,310
127,338
(8,437)
1,291
13,925
–
(11,305)
122,812
10,046
–
14,507
5
–
(8,728)
138,642
49,668
43,087
41,690
24,940
(2,539)
90
–
1,657
8
(409)
23,747
1,608
590
–
1,861
(14)
–
(2,321)
25,471
21,627
(2,240)
82
751
8
(310)
19,918
1,390
291
849
(5)
–
(2,106)
20,337
5,134
3,829
3,313
Total
£’000
201,232
(13,713)
1,606
2,613
17,362
8
(13,049)
196,059
14,421
868
925
20,530
–
(1,542)
(12,421)
218,840
154,703
(11,076)
1,373
14,789
8
(12,001)
147,796
11,802
319
15,411
–
(1,446)
(11,136)
162,746
56,094
48,263
46,529
Internal additions for photobooths and vending machines of £925,000 (2015: £2,613,000) relate to own work capitalised, being equipment produced
by the subsidiaries and capitalised by the Group companies.
Included in the above are assets held under finance leases, as follows:
2016
2015
Net book value
Additions/reclassifications
Depreciation charge
Photobooths
and vending
Plant,
machinery,
furniture
fixtures and
machines motor vehicles
£’000
483
319
109
£’000
–
–
–
Photobooths
and vending
Plant,
machinery,
furniture,
fixtures and
machines motor vehicles
£’000
187
142
80
£’000
–
–
–
Assets held for sale at 30 April 2016 for both the Group and the Company of £96,000 consist of a Group property.
Company
Cost:
At 1 May 2014
Additions
- internal
- external
Disposals
- internal
- external
At 30 April 2015
Additions
- internal
- external
Transfer to assets held for sale
Disposals
- internal
- external
At 30 April 2016
Depreciation
At 1 May 2014
Provided during year
Disposals
- internal
- external
At 30 April 2015
Provided during year
Transfers to assets held for sale
Disposals
- internal
- external
At 30 April 2016
Net book value:
At 30 April 2016
At 30 April 2015
At 30 April 2014
Photobooths
and vending
Plant
machinery,
furniture,
fixtures and
machines motor vehicles
£’000
£’000
Land
& Buildings
£’000
Total
£’000
1,648
35,777
1,075
38,500
–
–
–
(6)
1,642
–
–
(1,542)
–
–
100
1,533
12
–
–
1,545
1
(1,446)
–
–
100
–
97
115
3,056
183
(451)
(2,884)
35,681
3,092
274
–
(41)
(2,197)
36,809
27,479
3,007
(319)
(2,816)
27,351
3,240
–
(5)
(2,091)
28,495
8,314
8,330
8,298
–
20
–
(41)
1,054
–
50
–
–
(41)
1,063
1,007
35
–
(41)
1,001
34
–
–
(41)
994
69
53
68
3,056
203
(451)
(2,931)
38,377
3,092
324
(1,542)
(41)
(2,238)
37,972
30,019
3,054
(319)
(2,857)
29,897
3,275
(1,446)
(5)
(2,132)
29,589
8,383
8,480
8,481
Internal additions for photobooths and vending machines of £3,092,000 (2015: £3,056,000) relate to new equipment produced by subsidiaries and
equipment previously capitalised by the Group’s subsidiaries and sold to the Parent. Internal disposals relate to disposals to subsidiary companies.
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Notes to the Financial Statements
for the year ended 30 April 2016
13 Investment property
Group
Cost:
At 1 May 2014
Exchange difference
At 30 April 2015
Exchange difference
Additions
At 30 April 2016
Depreciation
At 1 May 2014
Exchange difference
At 30 April 2015
Exchange difference
Provided during year
At 30 April 2016
Net book value:
At 30 April 2016
At 30 April 2015
At 30 April 2014
£’000
12,315
(1,379)
10,936
790
140
11,866
11,799
(1,321)
10,478
757
2
11,237
629
458
516
The investment property is freehold and is stated at cost.
The property was valued by an independent professional valuer in October 2010, with a value of €12.2m based on a market value for similar properties,
and on a rental stream valuation of €12.6m.
Since this valuation was performed, the Group has sold the rights to the future rental stream on the property for the period up to April 2019.
Funds received in the year ended 30 April 2011 on the original rental stream sale amounted to €9.2m (£8.2m). The associated liability is reflected
in accruals and deferred income, note 25.
The sale of the future rental income has impacted the value of the property. The Board believes at 30 April 2016 that net of the remaining deferred rental
income creditor of €3,109,000 (£2,431,000), the property continues to be worth more than its £629,000 net book value. The valuations for future years
are expected to increase due to the passage of time and the unwinding of the related deferred rental income creditor.
14 Investments in associates and subsidiaries
Investment in associates
Group
Cost:
At 30 April 2014
Exchange differences
Additions
Share of profits
Dividends
At 30 April 2015
Exchange differences
Additions
Share of profits
At 30 April 2016
£’000
620
14
146
164
(96)
848
29
671
165
1,713
The summarised financial information of the principal associates, relating to the Group’s share, is set out below. All companies are unlisted.
Name
At 30 April 2015
Max Sight Ltd
Photo Direct Pty Ltd
Stilla Technologies SA
Other associates
At 30 April 2016
Max Sight Ltd
Photo Direct Pty Ltd
Stilla Technologies SA
Other associates
Country of
incorporation
Assets
£’000
Liabilities
£’000
Revenue
£’000
Profit/(loss)
£’000
% interest
Hong Kong
Australia
France
Hong Kong
Australia
France
460
499
146
80
1,185
682
419
817
76
1,994
98
198
–
41
337
125
121
–
35
281
585
1,938
–
105
2,628
662
784
–
91
1,537
33.33
26.95
8.00
33.33
26.95
40.00
137
28
–
(1)
164
173
(8)
–
–
165
Included in associates is an investment in Stilla Technologies SA, a French company which provides researchers with a universal and flexible digital
PCR (dPCR) solution for genetic testing.
Rental income from the investment property was £903,000 (2015: £946,000) (note 4) and finance costs were £32,000 (2015: £52,000).
The Group will continue to act as a cash collection agent for the underlying lease agreement.
The Group has increased its holding in this company during the year.
The non-cancellable future minimum rentals receivable on this basis are as follows:
No later than one year
After one year but no more than five years
Company
The Company has no investment property.
2016
£’000
956
1,912
2,868
2015
£’000
888
2,664
3,552
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Notes to the Financial Statements
for the year ended 30 April 2016
Company
Costs:
At 1 May 2014
Additions
Capital increase relating to share-based payment (net)
At 30 April 2015
Additions
Capital increase relating to share-based payment (net)
At 30 April 2016
Provision:
At 1 May 2014
Increase
At 30 April 2015
Increase
Decrease
At 30 April 2016
Net book value:
At 30 April 2016
At 30 April 2015
At 1 May 2014
Associated
Subsidiary
undertakings undertakings
£’000
£’000
407
–
–
407
–
–
407
150
–
150
7
(150)
7
400
257
257
42,562
4
227
42,793
2,251
261
45,305
945
158
1,103
3
(263)
843
44,462
41,690
41,617
Total
£’000
42,969
4
227
43,200
2,251
261
45,712
1,095
158
1,253
10
(413)
850
44,862
41,947
41,874
The net capital increase relating to share-based payments relates to share options granted to employees of subsidiary undertakings of the Group.
Refer to note 20 for further details on the Group’s share option schemes.
The details of all the Group’s principal subsidiaries and associates are given in note 29.
15 Financial instruments
Group Treasury
During the year ended 30 April 2016 the centralised Group Treasury Function became operational. The primary aim for this function is to manage liquidity
and funding arrangements and the Group’s exposure to associated financial and market risks, including credit risk, interest rate risk and foreign currency
risk. The general approach for Group Treasury is one of risk reduction within a framework of delivering total shareholder return.
Treasury operations
Overview and policy
Treasury policy is set by the Board. Group treasury activities are subject to a set of controls appropriate for the magnitude of the borrowing, investments
and Group wide exposures. To date the treasury function has limited itself to obtaining surplus cash from the subsidiaries and depositing this in bank
accounts owned by the Parent Company. Depending on the exchange rate determined by the Board, bank balances may be converted into sterling,
thus creating an exchange rate exposure for the Parent but protecting the Group’s total net cash position. The Board has defined an investment strategy,
amounts and types of products to which the surplus cash may be invested.
The Group may hold financial instruments (such as bank and other loans) to finance its day to day working capital requirements, for capital expenditure,
for corporate transactions (such as dividend payments to shareholders, share buybacks and acquisitions), for the management of currency and interest
rate exposure arising from its operations (which may involve the use of derivatives and swaps) and for the temporary investment of short-term funds.
With a strong net cash position, the Group largely finances its working capital and capital expenditure programmes from its own resources. The Group
made use of dual currency deposits in the early stages of the Group treasury function but no longer uses these instruments. In addition financial
instruments such as trade receivables (amounts due from customers as a result of a sale) and trade payables (arising from purchases of materials
and services) arise from day to day trading.
The following notes describe the Group’s financial risk management policy and details on financial instruments.
15(a) Fair values of financial instruments by class
There is no difference between the fair values and the carrying values of financial assets and financial liabilities held in the Group’s or the Company’s
statement of financial position.
Held to maturity, available-for-sale financial assets and derivatives
The fair value is based on quoted prices at the balance sheet date for quoted investments and other valuation methods for unquoted investments.
For restricted deposit accounts held to maturity, fair value is estimated at the present value of future cash flows, discounted at the market rate of
interest at the balance sheet date.
Trade and other receivables
The fair value of trade and other receivables is estimated as the present value of future cash flows, discounted at the market rate of interest at the
balance sheet date if the effect is material.
Cash and cash equivalents
The fair value of cash and cash equivalents is estimated as its carrying value where cash is repayable on demand. For short-term cash deposits and
other items not repayable on demand, fair value is estimated at the present value of future cash flows, discounted at the market rate of interest at the
balance sheet date.
Interest-bearing borrowings
Fair value is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the balance
sheet date. For finance leases the market rate of interest is determined by reference to similar lease agreements.
Trade and other payables
The fair value of trade and other payables is estimated as the present value of future cash flows, discounted at the market rate of interest at the balance
sheet date if the effect is material.
IFRS13 requires an analysis of financial instruments carried at fair value by valuation method as follows:
Level 1 – quoted prices in active markets for identical assets or liabilities
Level 2 – inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as process) or indirectly
(that is derived from process).
Level 3 – inputs for assets or liability that are not based on observable market data
The Board will monitor the performance of the treasury function and will be responsible for making changes to the personnel and limits of authority
of treasury personnel.
The Group’s financial instruments are fair valued at level 2.
The Board has provided written principles for overall risk management of the treasury function. It has also defined policies and procedures covering such
areas as foreign exchange risk, interest rate risk, credit risk, the use of derivative instruments and investment of excess liquidity (surplus funds above the
immediate and short–term operational funding needs, such as working capital requirements).
Liquidity risk
Liquidity risk is the risk that the Group will face in meeting is obligations in settling its financial liabilities. The Group’s approach to managing liquidity risk is
to ensure that it has sufficient funds to meet its liabilities when due without incurring unacceptable losses. A material and sustained shortfall in the Group’s
cash flow could undermine the Group’s credit rating, impair major investor confidence and restrict the ability of the Group to raise new funds.
The Group maintained a strong net cash position throughout the year and preceding year as a result of cash generation from the business.
During the current year surplus cash held by the operating subsidiaries, over and above balances required for working capital management was transferred
to Group treasury. These funds were kept in their local currency, or converted into sterling and kept in Parent Company bank accounts which are interest
bearing. Previously surplus cash was maintained by the operating subsidiaries and invested locally in suitable products, if not remitted to the Parent.
The key objective for Group treasury will be to protect the principal value of cash and cash equivalents, to concentrate cash at the centre to minimise
external borrowings, and to maximise the return on cash.
The strong cash generation and retention from the business together with available credit resources, detailed below, help mitigate liquidity risk.
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Notes to the Financial Statements
for the year ended 30 April 2016
Financial instruments by category
The tables below show financial instruments by category
At 30 April 2016
Assets per statement of financial position
Other financial assets - held to maturity
Other financial assets - available for sale
Trade and other receivables
Cash and cash equivalents
Liabilities per statement of financial position
Borrowings
Leases
Trade and other payables excluding non-financial liabilities
At 30 April 2015
Assets per statement of financial position
Other financial assets - held to maturity
Other financial assets - available for sale
Trade and other receivables
Cash and cash equivalents
Liabilities per statement of financial position
Borrowings
Leases
Trade and other payables excluding non-financial liabilities
15(b) Financial statement risk management
Financial risk factors and financial risk management
Overview
The Group and the Company are exposed to the following risks arising from financial instruments:
(i) Credit risk
(ii) Liquidity risk
(iii) Market risk
Loans and
receivables
£’000
Available
for sale
£’000
2,253
–
12,247
71,005
85,505
–
75
–
–
75
Other financial
liabilities at
amortised cost
£’000
Loans and
receivables
£’000
2,220
–
9,699
58,632
70,551
10,381
462
34,005
44,848
Available
for sale
£’000
–
69
–
–
69
Other financial
liabilities at
amortised cost
£’000
–
182
30,126
30,308
Total
£’000
2,253
75
12,247
71,005
85,580
Total
£’000
10,381
462
34,005
44,848
Total
£’000
2,220
69
9,699
58,632
70,620
Total
£’000
–
182
30,126
30,308
Credit risk is the risk of financial loss to the Group and the Company if a customer or counterparty to a financial instrument fails to meet its contractual
obligations. It mainly arises on trade and other receivables and bank balances.
Liquidity risk arises from the Group and the Company having insufficient cash resources to meet its obligations as and when they fall due for payment.
Market risk arises from changes in market prices, such as exchange rates, interest rates and equity prices that will impact on the Group’s and the
Company’s income statement or the value of its holding of financial instruments.
Listed below are details of these risks, the Group’s objectives, policies and processes for measuring and monitoring risks and the Group’s management
of capital.
Risk Management Framework
The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential risks for the Group.
Information has been disclosed relating to the Parent Company only where material risk exists.
There is a continuous process for identifying, evaluating and managing the key financial risks faced by the Group in line with changing market conditions
and the Group’s strategy. If necessary, the Group’s internal audit function may assist in monitoring and assessing the effectiveness of controls and
procedures. The Board retains responsibility for ensuring the adequacy of systems for identifying and assessing significant risks, that appropriate control
systems and other mitigating actions are in place and that residual exposures are consistent with the Group’s strategy and objectives. Assessments are
conducted for all material entities.
The Group may use derivatives to manage exchange or interest rate risk. Approval for their use is given by the Board and the position
is monitored constantly.
With regard to management of interest rate risk, the objectives are to lessen the impact of adverse interest rate movements on earnings and
shareholders’ funds and to ensure no breach of covenants. This is mainly achieved by reviewing the mix of fixed and floating rate borrowings.
The Group’s liquidity risk management involves maintaining sufficient cash and cash equivalents and the availability of funding through an
adequate amount of committed credit facilities.
(i) Credit risk
The Group has no significant concentrations of credit risk. Credit risk arises from cash and cash equivalents and deposits with banks and financial
institutions, and on outstanding trade and other receivables. Cash deposits are limited to high credit quality financial institutions. The Group has policies
in place to ensure that sales of products and services are made to customers with an approved credit history.
Credit quality of financial assets
Individual Group companies have banking relationships with leading banks in the country in which the Group company operates. Surplus cash is placed
with Group treasury bank accounts, as described above. The Group has procedures in place to ensure that cash is placed with sound financial institutions.
The Group and the Company trade with a large number of customers, ranging from quoted companies and state organisations to individual traders.
Individual Group companies have credit control procedures in place before making sales to new customers and levels of credit are reviewed in light of
trading experience. The normal terms of trade are in the range 30–90 days. The collection of outstanding receivables is monitored at both the Group and
subsidiary level.
The Group and the Company make provisions against trade and other receivables, such provisions being based on the previous credit history
of the debtor and if the debtor is in receivership or liquidation.
The maximum credit risk for financial assets is the carrying value.
Trade receivables, related parties and amounts due from associated undertakings are normally interest free. The normal terms of settlement are
between 30 and 90 days. Other receivables and prepayments and accrued income are interest free.
The movements in provisions are as follows:
At 1 May
Exchange differences
Charged/(credited) to income statement
Utilised and other movements
At 30 April
Group
2016
£’000
385
70
(45)
10
420
2015
£’000
327
(37)
292
(197)
385
Company
2016
£’000
715
38
(162)
–
591
At 30 April 2016, trade receivables of £978,000 (2015: £535,000) were past due and relate to a number of individual customers for whom
there is no recent evidence of default and therefore are not impaired.
The ageing of net trade current receivables is as follows:
Current
Past due
- overdue 1-30 days
- overdue 31-60 days
- overdue 61 days
Total past due
Total trade receivables
Group
2016
£’000
5,910
210
54
714
978
6,888
2015
£’000
4,932
192
133
210
535
5,467
Company
2016
£’000
712
12
7
179
198
910
2015
£’000
846
(11)
(34)
(86)
715
2015
£’000
328
25
6
39
70
398
The credit quality of trade receivables that are neither past due nor impaired is assessed on an individual basis, based on credit ratings and experience.
Management believes adequate provision has been made for trade receivables.
Amounts due from subsidiaries of £3,095,000 (2015:£6,849,000) are all current.
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Notes to the Financial Statements
for the year ended 30 April 2016
(ii) Liquidity risk
The Group’s liquidity risk management involves maintaining sufficient cash and cash equivalents and the availability of funding through an adequate
amount of committed credit facilities. Trading forecasts indicate that the current facilities provide more than sufficient liquidity headroom to support
the business for the foreseeable future. The net cash position at 30 April 2016 and 30 April 2015 has reduced liquidity risk for the Group.
Operational foreign exchange exposure
Where possible, the Group tries to invoice in the local currency of the respective entity. If this is not possible, to mitigate exposure, the Group endeavours
to buy from suppliers and sell to customers in the same currency. The exposure relating to receivables and payables denominated in the non-functional
currency is normally less than 3 months as this is the normal settlement period for these items.
At 30 April 2016, the Group has undrawn facilities of £24,449,000 (2015:£10,490,000). Having regard to the Group’s cash flow, it is considered that
these facilities provide adequate headroom for the Group’s needs. The facilities are generally reaffirmed by the banks annually. These undrawn facilities,
if used, will be subject to floating rates of interest and may be subject to the normal covenant conditions attached to such borrowings.
Certain lending banks may impose loan covenants on borrowings, which are normal for these types of borrowings, and, during the years to 30 April 2016
and 30 April 2015, the Group and the Company have comfortably complied with such requirements.
The table below summarises the maturity profile of the Group’s and Company’s financial liabilities (including trade and other payables) at 30 April 2016
and 30 April 2015 based on contractual undiscounted payments.
Group contractual cash flows
At 30 April 2016
Interest bearing loans and
borrowings and interest free loans
Finance leases
Trade and other payables
At 30 April 2015
Interest bearing loans and
borrowings and interest free loans
Finance leases
Trade and other payables
Company contractual cash flows
At 30 April 2016
Trade and other payables
Interest bearing Group
balances including interest
At 30 April 2015
Trade and other payables
Interest bearing Group
balances including interest
Within
one year
£’000
1,633
156
31,373
33,162
–
59
26,965
27,024
Within
one year
£’000
29,453
70
29,523
9,663
10,931
20,594
Year 2
£’000
1,633
141
–
1,774
–
45
–
45
Year 2
£’000
200
15,685
15,885
–
–
–
Year 3
£’000
1,633
104
–
1,737
–
38
–
38
Year 4
£’000
1,633
69
–
1,702
–
28
–
28
Year 5 Over 5 years
£’000
£’000
1,633
17
–
1,650
–
13
–
13
2,794
–
–
2,794
–
–
–
–
Year 3
£’000
Year 4
£’000
Year 5 Over 5 years
£’000
£’000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Total
£’000
10,959
487
31,373
42,819
–
183
26,965
27,148
Total
£’000
29,653
15,755
45,408
9,663
10,931
20,594
Held to maturity financial assets
These largely comprise of restricted bank deposit accounts where the cash acts as security against possible shortfalls in the funding required to meet
future payments in the course of business.
Floating rate Euro loans
Sterling loans
(iii) Market risk
Foreign exchange risk
The Group is exposed to foreign currency risk on sales and purchases that are denominated in a currency other than the local functional currency.
In addition, the Group faces currency risks arising from monetary financial instruments held in non-functional currencies. The income statement
reflects the impact of realised and unrealised exchange differences on trading items and monetary financial instruments (note 4).
The Group has certain investments in foreign operations, whose net assets are exposed to foreign currency translation risk. The main currency translation
risk relates to foreign operations whose functional currency is the Euro, Swiss franc or Japanese yen. The investments are not hedged. The translation
reserve reflects the exchange differences arising on translation of the opening net assets and results of the foreign operation (note 20).
Subject to the requirements of Group treasury, as noted above, where possible, the Group tries to hold the majority of its cash and cash equivalent
balances in the local currency of the respective entity.
Monetary assets/liabilities
The Group continues to monitor exchange rates and buy or sell currencies in order to minimise the open exposure to foreign exchange risk.
The Group may use derivative financial instruments mainly to reduce the risk of foreign exchange exposure on trading items (sales or purchases in
currencies other than the domestic currency of the company concerned) and interest rate movements. The Group does not hold or issue derivative
financial instruments for financial trading purposes.
IFRS 7 sensitivity analysis
The following table shows the impact on profit and equity of a change of 10% in exchange rates, excluding translation risk, assuming all other variables
held constant. This analysis is for illustrative purposes only.
2016
Profit for the year
Total equity
2015
Profit for the year
Total equity
Reported
£’000
29,199
122,750
10%
increase
£’000
28,537
121,957
10%
decrease
£’000
29,993
123,630
28,044
104,411
28,883
105,265
27,018
103,367
The table below shows trade and other receivables that are not in the domestic currency of the individual Group company they are held by.
Trade and other receivables
Sterling
Euro
Swiss franc
US dollar
Japanese yen
Other currencies
The majority of these amounts arise from inter-Group trading.
Included in the Company amounts due from subsidiaries are short-term loans as follows:
Group
2016
£’000
17,373
1,601
–
687
–
11
19,672
2015
£’000
159
584
345
807
375
11
2,281
Company
2016
£’000
–
1,595
–
–
–
–
1,595
2016
£’000
521
115
636
2015
£’000
–
579
14
–
–
–
593
2015
£’000
486
–
486
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Notes to the Financial Statements
for the year ended 30 April 2016
Borrowings
At 30 April 2016 and 30 April 2015 the Group had no borrowings which were not denominated in the functional currency of the
Group company concerned.
The table below shows trade and other payables that are not in the domestic currency of the individual Group company they are held by,
with the majority arising from inter-Group trading.
Trade and other payables
Sterling
Euro
Swiss franc
US dollar
Japanese yen
Other currencies
Analysis of net cash by currency
Group
2016
Sterling
Euro
Swiss franc
US dollar
Japanese yen
Other currencies
2015
Sterling
Euro
Swiss franc
US dollar
Japanese yen
Other currencies
Interest rate risk
Net cash
Mainly non-interest bearing current accounts:
- Cash at bank and in hand
Deposit accounts - generally interest bearing:
- Bank deposit accounts
- Restricted deposit accounts
Other items
Interest free and interest bearing loans
Interest bearing finance leases
Group
2016
£’000
656
21,205
374
687
798
32
23,752
Financial
assets
£’000
971
662
620
–
–
–
2,253
967
649
604
–
–
–
2,220
2015
£’000
7,990
9,958
1,692
948
314
41
20,943
Loans
£’000
–
(10,381)
–
–
–
–
(10,381)
–
–
–
–
–
–
–
Bank
£’000
30,103
26,870
2,383
128
9,820
1,701
71,005
22,052
24,791
1,902
84
7,673
2,130
58,632
Company
2016
£’000
–
20,067
1
–
–
–
20,068
Leases
£’000
(85)
(35)
–
–
(342)
–
(462)
–
(12)
–
–
(171)
–
(183)
2016
£’000
38,368
32,637
2,253
(10,381)
(462)
62,415
2015
£’000
–
8,971
1,336
–
–
8
10,315
Total
£’000
30,989
17,116
3,003
128
9,478
1,701
62,415
23,019
25,428
2,506
84
7,502
2,130
60,669
2015
£’000
29,275
29,357
2,220
–
(183)
60,669
The above table shows which components of net debt are subject to interest. With the current low interest rates for bank base rates worldwide,
the interest which can be earned on bank deposits is low. The Group’s exposure to floating rate interest bearing debt is small and a change in
interest rates will not have a material change on interest expense.
The Group uses derivative financial instruments mainly to reduce the risk of foreign exchange exposure on trading items (sales or purchases in currencies
other than the domestic currency of the company concerned) and interest rate movements. The Group does not hold or issue derivative financial
instruments for financial trading purposes. There were no derivatives reflected in the statement of financial position at 30 April 2016 and 30 April 2015.
IFRS 7 sensitivity analysis
With current low interest rates and the Group’s low level of debt financing, the impact on the total interest payable charges due to a change of 100 basis
points (1%) on borrowings subject to floating rates of interest is not material. Consequently, no sensitivity tables have been presented. The Group has
total loans outstanding at 30 April 2016 of £10,381,000 which is subject to a fixed interest rate of 1.2%. An increase of 1% in the fixed rate of interest
would result in an extra £104,000 interest expense.
Terms and debt repayment schedule
The table below shows the maturity profile and interest rates of the Groups borrowings at 30 April 2016 and 30 April 2015. Floating rate interest borrowings
(loans and overdrafts) are based on LIBOR, EURIBOR or equivalent rates in other countries plus a margin (generally between 0.45% and 1.0%).
The Company has no external loans outstanding at 30 April 2016 (2015: none).
Group
Finance leases
Loans
Status
Fixed rate
Fixed rate
Currency
Various
Euro
Interest
rate
0.0% -7.2%
1.20%
Year of
maturity
2021
2023
2016
Carrying
amount
£’000
462
10,381
10,843
2015
Carrying
amount
£’000
183
–
183
Price risk
The Group and the Company are exposed to changes in prices on raw materials, consumables and finished goods purchased from suppliers.
Wherever possible, price rises are passed on to customers via sales price increases to help manage this risk. The Group does not have material
amounts invested in equity securities and thus does not have any significant exposure to price risk on equity investments.
15(c) Capital risk management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern and to enhance long-term shareholder
value, by investing in the business so as to improve the return on investment (by increasing profits available for dividends) and by managing the capital
gearing ratio (mixture of equity and debt).
The Group manages, and makes adjustments to, its capital structure in light of the prevailing risks and economic conditions affecting its business
activities. This may involve adjusting the rate of dividends, purchasing the Company’s own shares, the issue of new shares and reviewing the level and
type of debt. The Group manages its borrowings by appraising the mix of fixed and floating rate borrowings and the mix of long-term and short-term
borrowings. Details of how the Group and subsidiaries are funded are shown below. There were no changes to the Group’s approach to capital
management during the year.
Group
The Group is funded by share capital and retained earnings; there was an increase in external borrowings in the current year and external loans
in the comparative year were not significant. The Group has had a strong net cash position throughout the current and comparative year.
Subsidiary companies
Subsidiary companies are funded by share capital and retained earnings, and where applicable local borrowings by the subsidiaries
in appropriate currencies.
The capital structure of the Group is presented below.
Cash and cash equivalents
Borrowings
Net cash (excluding restricted deposits)
Equity
2016
£’000
71,005
(10,843)
60,162
122,750
2015
£’000
58,632
(183)
58,449
104,411
The Group has various borrowings and available facilities that contain certain external capital requirements (covenants) that are considered normal
for these types of arrangements. The Group remains comfortably within all such covenants.
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Notes to the Financial Statements
for the year ended 30 April 2016
15(d) Other financial assets held to maturity and available for sale
18 Cash and cash equivalents
Group
Non-current
Assets held
to maturity
2016
£’000
2,253
2,253
Assets
available
for sale
2016
£’000
75
75
Assets held
to maturity
2015
£’000
2,220
2,220
Assets
available
for sale
2015
£’000
70
70
Assets held to maturity consist of restricted bank deposit accounts – see note 19.
Assets available for sale consist of short-term monetary funds of £nil (2015: £nil) and investments in unlisted entities, net of impairment provisions.
Company
Non-current
Assets held to maturity consist of restricted bank deposit accounts – see note 19.
16 Trade and other receivables
Non-current assets
Other receivables
Prepayments and accrued income
Current assets
Trade receivables
Amounts due from subsidiaries
Amounts due from associated undertakings
Other receivables
Prepayments and accrued income
Assets held
to maturity
2016
£’000
971
971
Assets
available
for sale
2016
£’000
–
–
Assets held
to maturity
2015
£’000
967
967
Assets
available
for sale
2015
£’000
–
–
Group
2016
£’000
1,546
2
1,548
6,888
–
51
3,762
2,309
13,010
2015
£’000
1,639
45
1,684
5,467
–
–
2,593
2,814
10,874
Company
2016
£’000
–
–
–
910
3,095
–
171
798
4,974
2015
£’000
–
–
–
398
6,849
–
159
585
7,991
Non-current other receivables include deposits relating to operating sites and properties. Current other receivables include deposits relating to operating
sites and properties, indirect and other taxation and other receivables.
17 Inventories
Raw materials and consumables
Work-in-progress
Finished goods
The replacement value of inventories is not materially different from that stated above.
Group
2016
£’000
12,595
40
4,459
17,094
2015
£’000
10,154
90
1,855
12,099
Company
2016
£’000
850
–
873
1,723
2015
£’000
814
–
–
814
Cash at bank and in hand
Deposit accounts (excluding restricted deposits)
Cash and cash equivalents per statement of financial position
Cash and cash equivalents per cash flow
Group
2016
£’000
38,368
32,637
71,005
71,005
2015
£’000
29,275
29,357
58,632
58,632
Company
2016
£’000
14,732
32,108
46,840
46,840
2015
£’000
2,882
18,056
20,938
20,938
Cash and cash equivalents per cash flow comprise cash at bank and in hand and short-term deposit accounts with an original maturity of less than
three months, less bank overdrafts. The amounts placed in short-term deposit accounts depend on the immediate cash requirements of the Group,
and earn interest at the respective short-term deposit rate. Cash at bank is generally interest free, but may earn interest at the applicable daily bank
floating deposit rate.
19 Net cash
Cash and cash equivalents per statement of financial position
Financial assets - held to maturity
Non-current instalments due on bank loans
Current instalments due on bank loans
Non-current finance leases
Current finance leases
The Company’s net cash excludes inter-Group financing.
Notes
18
15
21
21
21
21
Group
2016
£’000
71,005
2,253
(8,866)
(1,515)
(317)
(145)
62,415
2015
£’000
58,632
2,220
–
–
(124)
(59)
60,669
Company
2016
£’000
46,840
971
–
–
–
–
47,811
2015
£’000
20,938
967
–
–
–
–
21,905
At 30 April 2016, £2,253,000 of the total net cash (2015: £2,220,000 ) comprised bank deposit accounts that are subject to restrictions and are not
freely available for use by the Group and Company. These amounts are shown under financial assets held to maturity.
Net cash is a non-GAAP measure since it is not defined in accordance with IFRS but is a key indicator used by management in assessing operational
performance and financial position strength. The inclusion of items in net cash as defined by the Group may not be comparable with other companies’
measurement of net cash/debt. The Group includes in net cash, cash and cash equivalents and certain financial assets, mainly deposits, less instalments
on loans and other borrowings.
In calculating the gearing ratio, the Group excludes certain deposit balances that are subject to restrictions and are not freely available for use by the
Group. These financial assets are shown as held to maturity in the statement of financial position.
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Notes to the Financial Statements
for the year ended 30 April 2016
The tables below, which are not currently required by IFRS, reconcile the Group’s net cash to the Group’s statement of cash flows. Management believes
the presentation of the tables will be of assistance to shareholders. Presentation of this information is recommended by the Financial Reporting Council
(FRC) as good practice as being of use to shareholders and analysts, in their Financial Lab Project, Net Debt Reconciliations.
20 Share capital and reserves
Share capital
Group
2015/16
Cash and cash equivalents per statement of
financial position and cash flow
Financial assets held to maturity
Non-current loans
Current loans
Non-current leases
Current leases
2014/15
Cash and cash equivalents per statement of
financial position and cash flow
Financial assets held to maturity
Financial assets - available for sale
Current loans
Non-current leases
Current leases
1 May
£’000
58,632
2,220
–
–
(124)
(59)
60,669
60,996
2,334
85
(177)
(64)
(63)
63,111
Other movements for finance leases relates to new finance leases during the year.
Company
2015/16
Cash and cash equivalents per statement of
financial position and cash flow
Financial assets held to maturity
2014/15
Cash and cash equivalents per statement of
financial position and cash flow
Financial assets held to maturity
1 May
£’000
20,938
967
21,905
19,920
963
20,883
Exchange
Other
differences movements
£’000
£’000
3,694
62
–
–
(20)
(10)
3,726
(3,155)
(69)
(9)
19
4
4
(3,206)
–
–
(76)
(24)
(244)
(152)
(496)
–
–
(31)
–
(83)
(59)
(173)
Exchange
Other
differences movements
£’000
£’000
Cash flow
£’000
30 April
£’000
8,679
(29)
(8,790)
(1,491)
71
76
(1,484)
791
(45)
(45)
158
19
59
937
71,005
2,253
(8,866)
(1,515)
(317)
(145)
62,415
58,632
2,220
–
–
(124)
(59)
60,669
Cash flow
£’000
30 April
£’000
–
–
–
–
–
–
–
–
–
–
–
–
25,902
4
25,906
1,018
4
1,022
46,840
971
47,811
20,938
967
21,905
Company
Allotted, issued and fully paid:
Ordinary shares of 0.5p each
At 1 May
Issued in year -
- share options
At 30 April
2016
Number
2015
Number
373,229,778
371,794,278
2,249,000
375,478,778
1,435,500
373,229,778
2016
£’000
1,866
11
1,877
2015
£’000
1,859
7
1,866
The holders of Ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings
of the Company.
Share options, which have been granted to senior staff, including directors, to purchase Ordinary shares of 0.5p each, are as follows:
Date options
granted
29 Jan 2009
20 Jan 2010
12 Jul 2010
4 Jul 2011
13 Dec 2011
4 Jul 2012
9 Jul 2013
11 Jul 2014
9 Jul 2015
15 Dec 2015
Date options
granted
29 Jan 2009
20 Jan 2010
12 Jul 2010
4 Jul 2011
13 Dec 2011
4 Jul 2012
9 Jul 2013
11 Jul 2014
At 30 April
2015
50,000
44,093
15,000
740,000
250,000
1,926,000
1,980,000
1,331,700
–
–
6,336,793
At 30 April
2014
95,000
44,093
1,140,500
1,085,000
250,000
1,926,000
2,030,000
–
6,570,593
Granted
during year
–
–
–
–
–
–
–
–
1,377,600
57,400
1,435,000
Granted
during year
–
–
–
–
–
–
–
1,331,700
1,331,700
Lapsed
or forfeited
during year
(30,000)
–
–
–
–
–
–
–
–
–
(30,000)
Lapsed
or forfeited
during year
(40,000)
–
(30,000)
(10,000)
–
–
(50,000)
–
(130,000)
Exercised
during year
(20,000)
–
–
(615,000)
–
(1,614,000)
–
–
–
–
(2,249,000)
Exercised
during year
(5,000)
–
(1,095,500)
(335,000)
–
–
–
–
(1,435,500)
At 30 April
2016
–
44,093
15,000
125,000
250,000
312,000
1,980,000
1,331,700
1,377,600
57,400
5,492,793
At 30 April
2015
50,000
44,093
15,000
740,000
250,000
1,926,000
1,980,000
1,331,700
6,336,793
Full details of directors’ share options are given in the Remuneration report on pages 40 to 41.
Exercise
price
10.92p
36.37p
36.33p
65.25p
53.50p
39.17p
90.63p
145.33p
133.33p
153.25P
Exercise
price
10.92p
36.37p
36.33p
65.25p
53.50p
39.17p
90.63p
145.33p
Date
from which
exercisable
29 Jan 2012
20 Jan 2013
12 Jul 2013
4 Jul 2014
13 Dec 2014
4 Jul 2015
9 Jul 2016
11 Jul 2017
9 Jul 2018
15 Dec 2018
Date
from which
exercisable
29 Jan 2012
20 Jan 2013
12 Jul 2013
4 Jul 2014
13 Dec 2014
4 Jul 2015
9 Jul 2016
11 Jul 2017
Last date
on which
exercisable
28 Jan 2016
19 Jan 2017
11 Jul 2017
3 Jul 2018
12 Dec 2018
3 Jul 2019
8 Jul 2020
10 Jul 2021
8 Jul 2022
14 Dec 2022
Last date
on which
exercisable
28 Jan 2016
19 Jan 2017
11 Jul 2017
3 Jul 2018
12 Dec 2018
3 Jul 2019
8 Jul 2020
10 Jul 2021
All options can be exercised, in normal circumstances, within a period of four years from the exercise of option date, providing that the performance
criterion or performance condition has been achieved. The subscription price for all options is based upon the average market price on the three days
prior to the date of grant. Options are restricted, or may lapse, if the grantee leaves the employment of the Group before the first exercise date.
All options are equity settled options.
Options granted after 2005 are covered by the new Photo-Me Executive Share Option Scheme. The vesting of options is subject to an EPS-based
performance condition relating to the extent to which the Company’s basic EPS for the third financial year, following the date of grant, reaches a sliding
scale of challenging EPS targets.
Options are normally granted over shares worth up to 150% of a participant’s salary each year. In exceptional cases as part of the terms of attracting
senior management, options in excess of that number may be granted.
The weighted average exercise price of all options outstanding at 30 April 2016 is 109.5p (2015: 80.9p) and the weighted average exercise price
of options exercisable at 30 April 2016 is 48.3p (2015: 58.6p).
The weighted average share price for options exercised during the year ended 30 April 2016 was 159.3p (30 April 2015: 133.6p).
The weighted average remaining years for options outstanding at the year end date is 4.8 years (2015: 4.8 years).
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Notes to the Financial Statements
for the year ended 30 April 2016
Share-based payments
In accordance with IFRS 2 Share-based Payments, share options granted to senior management including directors after November 2002 have been
fair-valued and the Company has used the Black-Scholes option pricing model. This model takes into account the terms and conditions under which
the options were granted.
The following table lists the inputs to the model used for the years ended 30 April 2016 and 30 April 2015:
Date of grant
Vesting period
Share price volatility
Share price on date of grant
Option price
Expected term
Dividend yield
Risk free interest rate
Fair value
Date of grant
Vesting period
Share price volatility
Share price on date of grant
Option price
Expected term
Dividend yield
Risk free interest rate
Fair value
Date of grant
Vesting period
Share price volatility
Share price on date of grant
Option price
Expected term
Dividend yield
Risk free interest rate
Fair value
Date of grant
Vesting period
Share price volatility
Share price on date of grant
Option price
Expected term
Dividend yield
Risk free interest rate
Fair value
29 January
2009
3 years
52.80%
10.75p
10.92p
3.25years
0.00%
2.52%
4.693p
20 January
2010
3 years
69.10%
35.50p
36.37p
3.25years
0.70%
2.27%
16.36p
04 July 13 December
2011
3 years
63.20%
50.25p
53.50p
3.25years
4.48%
0.50%
16.38p
2011
3 years
65.40%
64.00p
65.25p
3.25years
3.13%
1.32%
24.46p
09 July
2013
3 years
48.50%
94.00p
90.63p
3.25years
3.83%
0.62%
26.20p
11 July
2014
3 years
39.10%
141.00p
145.33p
3.25years
2.66%
1.28%
32.20p
12 July
2010
3 years
70.10%
38.00p
36.33p
3.25years
3.29%
1.27%
15.95p
04 July
2012
3 years
58.30%
38.00p
39.17p
3.25years
6.58%
0.46%
10.23p
9 July
2015
3 years
30.70%
113.50p
133.33p
3.25years
4.02%
0.82%
21.00p
15 December
2015
3 years
26.16%
154.00p
153.25p
3.25years
3.32%
0.90%
21.78p
The charge for share-based payments is £413,000 (2015: £371,000) and for the Company the charge is £152,000 (2015: £144,000).
Share price volatility is based on historical volatility.
Reserves
Group
Treasury shares (Group and Company)
In accordance with shareholders’ resolutions passed at Annual General Meetings, the Company may purchase its own shares up to a maximum
of 10% of the Ordinary shares in issue. At 30 April 2016 and 30 April 2015 the Company held no shares in treasury.
Other reserves
Other reserves mainly arise in subsidiaries, are generally not distributable, and arise as a result of local legislation regarding capital maintenance.
Translation reserve
The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign
subsidiaries and associates. In accordance with the options allowed under IFRS 1, only exchange rate differences arising on translation after the date
of transition, 1 May 2004, are shown in this reserve. When an overseas subsidiary or associate is disposed, the cumulative exchange difference relating
to the entity disposed is recycled through the income statement as part of the profit or loss on sale in finance revenue/cost and is shown as a movement
in other comprehensive income.
Company
Other reserves
The Company’s other reserves include £201,000 (2015: £201,000) arising on the redemption of the deferred shares and £1,459,000 (2015: £1,198,000)
relating to the fair value of options granted to employees of Group undertakings (note 14).
21 Financial Liabilities
Non-current liabilities
Non-current instalments due on bank loans
Finance lease creditors
Current liabilities
Current instalments due on loans
Finance lease creditors
Group
2016
£’000
8,866
317
9,183
1,515
145
1,660
2015
£’000
–
124
124
–
59
59
Company
2016
£’000
2015
£’000
–
–
–
–
–
–
–
–
–
–
–
–
Bank loans bear interest rates based on LIBOR or foreign equivalent rates appropriate to the country in which the borrowing is incurred. Further details
are provided in note 15 and in the tables below. Margins are generally between 0.4% and 1.0%.
Obligations under finance leases
The Group has entered into finance lease arrangements for certain items of property, plant and equipment, largely for periods of up to four (2015: four)
years (note 12). The total finance lease creditor at 30 April 2016 is £462,000, £145,000 due within one year and £317,000 due between two and five
years, (2015: £183,000, £59,000 due within one year and £124,000 due within two to five years).
22 Post-employment benefit obligations
The Company and its principal subsidiaries operate pension and other retirement and post-employment schemes including both funded defined benefit
schemes, and defined contribution schemes.
Defined benefit plans
A defined benefit plan is a pension arrangement under which participating members receive a benefit at retirement. The amount is determined by the
plan rules and is dependent on such factors as age, years of service and pensionable pay and is not dependent on contributions made by the Company
or members. The income statement service cost, in respect of defined benefit plans represents the increase in the defined benefit liability arising from
pension benefits accrued by members in the current period. The Company having such plans is exposed to investment and other experience risks and
may need to make additional contributions where it is estimated that the benefits will not be covered by the assets of the plan. As is explained below,
the defined benefit plan for the Company has been closed to new members for over 30 years.
The Group’s and the Company’s policy is to recognise actuarial gains and losses immediately each year in the statement of changes in equity,
under other comprehensive income. These comprise the impact on the defined benefit liability of changes in demographic and financial assumptions
compared with the start of the year, actual experience being different to those assumptions and the return on plans assets above the amount included
in net pension interest.
Defined contributions plans are arrangements in which the benefits paid to participants are linked to the amount of contributions paid and the
performance of the scheme. Such plans are independent of the Company and the Group and the Company and the Group have no exposure
to investment and experience risks. The income statement charge for these plans represents the contributions paid by the Group based on a
percentage of employees’ pay.
The Group’s and the Company’s defined benefit pension schemes are included in the statement of financial position under employment benefit
obligations, as are other overseas retirement provisions.
The amounts charged to profit and loss for all post-employment benefits are shown in note 5.
The amount shown in the statement of financial position is detailed as follows:
Company defined benefit obligations
Overseas employment benefit obligations
Overseas defined benefit scheme
Group
2016
£’000
–
3,833
922
4,755
2015
£’000
–
3,318
973
4,291
Company
2016
£’000
–
–
–
–
2015
£’000
–
–
–
–
Photo-Me International plc defined benefit pension scheme
The Company operates a final salary defined benefit scheme in the UK for some long-serving employees, which is funded by contributions from the
Company and by members of the scheme. This pension scheme (the Photo-Me International plc Pension and Life Assurance Fund) is closed to new
entrants. The defined benefits are based upon an employee’s years of service and final pensionable salary. Actuarial valuations are undertaken triennially
by a qualified independent actuary, the most recent valuation being at 1 June 2012. The next valuation with an effective date of 1 June 2015 is currently
being carried out and as part of this valuation the Company will discuss with the Trustee Directors the contributions to be paid to the Fund in the future.
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Notes to the Financial Statements
for the year ended 30 April 2016
Reconciliation of the movement in the present value of the defined benefit obligation
Present value of defined benefit obligation at beginning of year
Current service cost
Interest cost
Contributions by members
Actuarial losses/(gains) on fund liabilities arising in demographic assumptions
Actuarial (gains)/losses from changes in financial assumptions
Actuarial (gains)/losses on liabilities from experience
Benefits paid
Present value of defined benefit obligation at end of year
Reconciliation of the movement in the fair value of plan assets
Fair value of plan assets at beginning of year
Interest income on fund assets
Remeasurement (losses)/gains on assets
Contributions by the Company
Contributions by members
Benefits paid
Fair value of plan assets at end of year
Amount to be recognised in the statement of financial position
Present value of funded obligations
Fair value of scheme assets
Net assets
Effect of limit of recognition of an asset
Amount recognised in statement of financial position
2016
£’000
6,562
16
210
1
–
(25)
(76)
(385)
6,303
2016
£’000
6,938
223
(75)
14
1
(385)
6,716
2016
£’000
6,303
(6,716)
(413)
413
–
2015
£’000
5,922
14
243
1
(18)
659
40
(299)
6,562
2015
£’000
6,379
262
581
14
1
(299)
6,938
2015
£’000
6,562
(6,938)
(376)
376
–
Principal actuarial assumptions
Discount rate for scheme liabilities
Rate for increase in salaries
Price inflation
Pension increases
30 April 2016
%
3.30
3.90
2.90
2.90
30 April 2015
%
3.30
4.10
3.10
3.00
The mortality tables used for 2016 are S1NXA Light tables with CMI 2014 projections and a long term rate of improvement of 1.5% pa. The mortality
tables used for 2015 are S1NXA Light tables with CMI2014 projections and a long term rate of improvement of 1.5% pa. The mortality assumptions
allow for expected future improvements in mortality rates.
Male currently aged 65
Female currently aged 65
Male currently aged 45
Female current aged 45
History of assets, liabilities and actuarial gains and losses
Fair value of defined benefit obligation
Fair value of assets
Surplus/(deficit)
Experience (losses)/gains on fund assets
Experience gains/(losses) on plan liabilities
- as a percentage of present value of plan liabilities
Differences between expected and actual return on plan assets
- as a percentage of present value of plan liabilities
2016
24.1 years (age 89.10)
25.5 years (age 90.50)
26.1 years (age 91.10)
27.8 years (age 92.80)
2015
24.0 years (age 89.00)
25.3 years (age 90.30)
26.0 years (age 91.00)
27.6 years (age 92.60)
2016
£’000
6,303
6,716
413
2016
£’000
(75)
76
–
–
–
2015
£’000
6,562
6,938
376
2015
£’000
581
(40)
–
–
–
2014
£’000
5,922
6,379
457
2014
£’000
(357)
246
–
–
–
2013
£’000
6,696
6,973
277
2013
£’000
–
(731)
(11.0%)
602
9.0%
2012
£’000
5,865
5,923
58
2012
£’000
–
(316)
(5.0%)
(165)
(3.0%)
The actuarial valuation of the UK Pension scheme has revealed a surplus at 30 April 2016 and 30 April 2015. This surplus has not been recognised as an
asset, in accordance with IFIC14 as in future the surplus will not be recovered by a reduction in future contributions to the scheme. The scheme has been
closed to new members for over 30 years.
The figure of liabilities for 2016, 2015 2014 and 2013 relates to gains/(losses) in respect of liability experience only, and excludes any change in liabilities
in respect of changes to the actuarial assumptions used, previous years’ figures include changes in respect of the actuarial assumptions used.
The Company’s best estimate of contributions to be paid by the Company next year is £14,000 (2015: £14,000).
The cumulative amount of remeasurement gains and losses recognised since 1 May 2004 in the Group and Company statements of comprehensive
income, within other comprehensive income, is a loss of £1,375,000 (2015: loss of £1,375,000) in respect of the Company’s defined benefit scheme.
This has been charged to retained earnings.
Sensitivity to key assumptions
The key assumptions used for the IAS 19 valuation are: discount rate, inflation rate and mortality. If different assumptions were used, this could have
a material effect on the results disclosed. The table below shows the sensitivity to the key assumptions noted above.
2016
£’000
2015
£’000
Year ended 30 April 2016
Amount recognised in profit and loss and other comprehensive income
Amount recognised in profit and loss
Current service cost
Interest on net defined liability/(asset)
Total charge
Pension expense recognised in profit and loss
Remeasurement in other comprehensive income
Return on Scheme assets (in excess of)/below that recognised in net interest
Actuarial (gains)/losses due to changes in financial assumptions
Actuarial losses/(gains) due to changes in demographic assumptions
Actuarial (gains)/losses on liabilities arising from experience
Adjustment due to the asset ceiling
Total (income)/expense amount recognised in other comprehensive income
Total (income)/expense amount recognised in comprehensive income
The amounts shown above are included in staff costs (note 5) and in administrative expenses.
An analysis of the assets of the plan is as follows:
Growth assets
Insurance policies and bonds
Other
16
–
16
16
75
(25)
–
(76)
24
(2)
14
2016
£’000
603
6,044
69
6,716
%
9
90
1
100
2015
£’000
827
6,097
14
6,938
There were no financial instruments of the Company included in the plan assets (2015: none) and there were no property assets occupied
by the Company (2015: none).
14
–
14
14
(581)
659
(18)
40
(100)
–
14
%
12
88
–
100
As reported
Following a 0.1% decrease in the discount rate
Following a 0.1% increase pa in the inflation assumption
Following an increase in the life expectancy of one year
Service
cost
£’000
16
16
16
16
Net
interest
£’000
–
–
–
–
Total
profit and
loss charge
£’000
16
16
16
16
Plan
assets
£’000
6,716
6,745
6,720
6,894
Defined
benefit
obligation
£’000
6,303
6,383
6,326
6,607
Surplus
£’000
413
362
394
287
The sensitivity information shown above has been prepared using the same method as adopted when adjusting the results of the latest valuation
to the balance sheet data. This is the same approach as has been adopted in previous years.
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Notes to the Financial Statements
for the year ended 30 April 2016
Overseas post-employment benefit obligations
Provisions for obligations to make termination payments on retirement, to employees who are not members of the pension and retirement schemes,
are as follows:
(cid:129)
The Group’s Japanese subsidiary undertaking, Nippon Auto-Photo K.K., has an unfunded post-employment retirement provision based on
an employee’s length of service with the company and their current salary. The allowance is paid to an employee when they leave the company.
This has been provided for in full within the accounts. Nippon Auto –Photo K.K, agreed with the employees that 50 % of the liability for the retirement
provision will be paid in cash to an independently controlled defined contribution scheme, with the balance to be met by the company when the
employee leaves.
To meet the legal obligations within France, the Group’s subsidiary undertakings have unfunded retirement provisions, which were valued by an
independent actuary using the Projected Unit Credit Method at 30 April 2016 and 30 April 2015. This actuarial valuation incorporated the following
principal assumptions in arriving at the present value of the obligations:
(cid:129)
Discount rate
Rate of increase in salaries
Retirement age
Inflation rate
Mortality table
2016
1.35%
2.00%
62-64 years
2.00%
TGH/TGF 05
2015
1.25%
2.00%
62-64 years
2.00%
TGH/TGF 05
Management believes that the book value for retirement obligations in France fairly states the position at 30 April 2016 and 30 April 2015.
The movement on these schemes is as follows:
At 1 May
Exchange differences
Utilised and other movements
At 30 April
2016
£’000
3,318
373
142
3,833
2015
£’000
3,094
(320)
544
3,318
Utilised and other movements for 2016 include amounts reflected in other comprehensive income, amounts charged to profit and loss and amounts paid
to employees.
Overseas pension schemes
The Group’s Swiss subsidiary, Prontophot (Schweiz) A.G. participates in funded multi-employer pension schemes. A guaranteed return for such
employees’ schemes is mandated by the Swiss state. An actuarial valuation was performed at 30 April 2016 and 30 April 2015 by independent actuaries.
Reconciliation of the movement in the present value of the defined benefit obligation
Present value of defined benefit obligation at 1 May
Exchange difference
Contribution by members
Current service cost
Interest cost
Past service cost
Remeasurement losses on plan liabilities
Prepaid risk premiums
Benefits paid
Administration costs
Present value of defined benefit obligation at 30 April
Fair value of plan assets at 1 May
Exchange difference
Contributions by company and members
Expected return on plan assets
Remeasurement gain on plan assets
Benefits paid
Prepaid risk premiums
Fair value of plan assets at 30 April
Net liability at 1 May
Exchange difference
Increase/(decrease) in liability
Net liability at 30 April
2016
£’000
3,381
97
36
203
27
–
107
(61)
(265)
1
3,526
2016
£’000
2,491
71
181
19
168
(265)
(61)
2,604
2016
£’000
890
25
7
922
2015
£’000
2,529
37
33
169
52
36
571
–
(47)
1
3,381
2015
£’000
2,205
27
167
45
94
(47)
–
2,491
2015
£’000
324
10
556
890
Amounts recognised in comprehensive income
Amount recognised in profit and loss
Service costs
Current service cost
Past service cost
Administrative expenses
Net pension interest
Total charge
Amount recognised in other comprehensive income
Return on scheme assets
Actuarial losses/(gains) on defined benefit obligation
Total amount recognised in other comprehensive income
Total amount recognised in profit and loss and other comprehensive income
Cash
Equities & debt instruments
Other
Total plan assets
Principal actuarial assumptions
Discount rate
Expected return on plan assets at end of year
Rate of increase in salaries
Price inflation
2016
£’000
2015
£’000
203
–
1
8
212
(168)
107
(61)
151
2015
£’000
30
1,750
711
2,491
169
36
1
7
213
(94)
571
477
690
%
1
70
29
100
30 April 2016
%
0.50
n/a
2.00
0.00
30 April 2015
%
0.80
n/a
2.00
1.00
2016
£’000
73
1,753
778
2,604
%
3
67
30
100
The normal retirement age for males is between 60 - 65 years and for females between 59 - 64 years for both 2016 and 2015.
The mortality tables used in 2016 were the BVG2015 GT tables; 2015,2014 and 2013 were the BVG 2010 GT tables.
History of assets, liabilities and actuarial gains and losses
Present value of defined benefit obligation
Fair value of assets
Deficit
Experience (losses)/gains on plan liabilities (£’000)
- as a percentage of the present value of plan liabilities
Difference between expected and actual return
on plan assets (£’000)
- as a percentage of the present value of plan assets
2016
£’000
3,526
2,604
(922)
2016
(107)
3%
168
6%
2015
£’000
3,381
2,491
(890)
2015
(571)
(17%)
94
3%
2014
£’000
2,529
2,205
(324)
2014
78
3%
1
0%
2013
£’000
2,383
2,002
(381)
2013
205
9%
98
5%
2012
£’000
3,297
2,746
(551)
2012
(372)
(13%)
162
6%
The 2016, 2015 and 2014 figures in the table above represent actuarial gains on plan liabilities and plan assets.
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Notes to the Financial Statements
for the year ended 30 April 2016
Sensitivity to key assumptions
The key assumptions used for the IAS 19 valuation are: discount rate, inflation rate and mortality. If different assumptions were used, this could have a
material effect on the results disclosed.
Company
The table below shows the sensitivity to the key assumptions noted above.
Defined benefit obligation as reported
Defined benefit obligation
- with discount rate - 0.25%
- with discount rate + 0.25%
- with salary decrease - 0.25%
- with salary increase + 0.25%
- with life expectancy + 1 year
- with life expectancy - 1 year
Defined
benefit
obligation
£’000
3,526
3,690
3,375
3,489
3,516
3,576
3,475
Increase/
(decrease)
in defined
benefit
obligation
£’000
–
164
(151)
(37)
35
50
(51)
At 30 April 2014
Charged to income statement
At 30 April 2015
Amount shown as non-current liability
Amount shown as current liability
At 30 April 2015
Utilised and other movements
At 30 April 2016
Amount shown as non-current liability
Amount shown as current liability
24 Deferred taxation
Deferred tax comprises:
The Group’s best estimate for contributions to be paid by the company next year to the scheme is £215,000 (2015: £141,000).
The amount recognised in the income statement for this scheme was £212,000.
Employee
related claims
£’000
–
–
–
–
–
–
–
–
–
–
–
–
Product
warranties
£’000
–
–
–
–
–
–
–
–
–
–
–
–
Group
2016
£’000
(447)
842
(1,400)
(352)
(972)
(2,329)
(4,216)
1,887
(2,329)
Group
2016
£’000
(2,445)
115
55
(2)
(52)
(2,329)
2015
£’000
(956)
542
(1,280)
(123)
(628)
(2,445)
(3,512)
1,067
(2,445)
2015
£’000
(2,850)
(196)
–
1,003
(402)
(2,445)
Other
£’000
10
7
17
17
–
17
17
(7)
10
10
–
10
Company
2016
£’000
(1,881)
–
–
–
(346)
(2,227)
(2,227)
–
(2,227)
Company
2016
£’000
(1,702)
–
–
(464)
(61)
(2,227)
Total
£’000
10
7
17
17
–
17
17
(7)
10
10
–
10
2015
£’000
(1,365)
–
–
–
(337)
(1,702)
(1,702)
–
(1,702)
2015
£’000
(2,334)
–
–
813
(181)
(1,702)
23 Provisions
Group
At 30 April 2014
Exchange differences
Utilised and other movements
Charged to income statement
At 30 April 2015
Amount shown as non-current liability
Amount shown as current liability
At 30 April 2015
Exchange differences
Utilised and other movements
Charged to income statement
At 30 April 2016
Amount shown as non-current liability
Amount shown as current liability
Employee
related claims
£’000
1,718
(161)
(626)
118
1,049
–
1,049
1,049
1,049
63
(314)
97
895
–
895
895
Product
warranties
£’000
2,441
(143)
(2,113)
–
185
–
185
185
185
7
(117)
–
75
–
75
75
Other
£’000
4,107
(503)
(769)
1,488
4,323
17
4,306
4,323
4,323
229
(1,495)
86
3,143
10
3,133
3,143
Total
£’000
8,266
(807)
(3,508)
1,606
5,557
17
5,540
5,557
5,557
299
(1,926)
183
4,113
10
4,103
4,113
Employee related claims
Certain overseas Group undertakings have made provision for claims made by former employees.
Product warranties
A provision is made for claims on products sold under warranty. The provision will reduce as the warranty period expires but will be increased
by warranties given with new sales. The provision is based on past experience of level of repairs for items under warranty. It is expected that most
of the provision will be utilised within the next year. The effect of discounting is not material.
Timing difference relating to property, plant and equipment
Other timing differences in recognising revenue and expense
items in other periods for taxation purposes:
- research and development
-post-employment benefit provisions
-losses
-other short term temporary differences
The closing balance comprises:
Deferred tax assets
Deferred tax liabilities
The movements on deferred taxation during the year were as follows:
Opening balance
Exchange differences
Newly acquired subsidiary
Charge/(credit) for the year in income statement
Amounts (credited)/charged to other comprehensive income
Closing balance
Temporary differences associated with Group investments
Unremitted earnings of overseas affiliates
No deferred tax liability has been recognised on the unremitted earnings of overseas subsidiaries, as no tax is expected to be payable on them
in the foreseeable future based on current legislation or where the Group is able to control the remittance of earnings and it is possible that such
earnings will not be remitted in the foreseeable future.
Other provisions
Other provisions include provisions for potential legal claims against certain Group Companies. These have been assessed by management based
on legal advice and are expected to be resolved in the following year.
Unrecognised deferred tax assets
Deferred tax assets amounting to £958,000 (2015: £1,009,000) arising on temporary differences of £3,809,000 (2015: £4,308,000), in respect
of unrelieved tax losses and other temporary differences have not been recognised, as their future economic benefit is uncertain.
The expiry dates of unrelieved tax losses are as follows:
Expiring in less than one year
Expiring between two and 20 years
No expiry date
Group
2016
£’000
–
81
877
958
2015
£’000
–
230
779
1,009
In addition, the Group has an unrecognised deferred tax asset on gross capital losses of £3,765,000 (2015: £3,737,000), of which £3,627,000
(2015: £3,608,000) relate to the Company, which have not been recognised as their future economic benefit is not certain.
Factors that may affect future tax charges in the UK
The rate of UK corporation tax is scheduled to reduce from 20% to 19% from 1 April 2017 (and then to 17% from 1 April 2020). UK deferred tax has
been calculated at 19% for balances at 30 April 2016, apart from balances which are expected to be utilised before 1 April 2017.
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Notes to the Financial Statements
for the year ended 30 April 2016
25 Trade and other payables
Amounts shown as non-current liabilities
Other payables
Accruals and deferred income
Amounts shown as current liabilities
Trade payables
Amounts owed to subsidiaries
Other taxes and social security costs
Other payables
Accruals and deferred income
Group
2016
£’000
200
1,621
1,821
19,672
–
3,624
5,435
7,077
35,808
2015
£’000
–
2,050
2,050
15,779
–
4,600
5,437
6,860
32,676
Company
2016
£’000
200
–
200
4,015
34,246
721
295
6,512
45,789
2015
£’000
–
–
–
4,398
13,226
765
103
2,822
21,314
27 Capital commitments and contingent liabilities
Capital commitments
The table below shows the amount of capital commitments with third parties for property, plant and equipment and the amounts placed with the Group’s
procurement companies for vending equipment.
Amounts with third parties
For supply of property, plant & equipment - mainly vending equipment
Amounts with Group companies
Amount of vending equipment contracted by the Group’s
operating companies with the Group’s procurement companies
Group
2016
£’000
8,942
2015
£’000
9,640
Company
2016
£’000
17
2015
£’000
–
1,398
173
1,394
146
Contingent liabilities
The Company and subsidiary undertakings have given other guarantees in the normal course of business to third parties. No losses are expected
from guarantees given by the Company and subsidiary undertakings.
Other payables non-current and current for both the Group and the Company includes deferred consideration for the acquisition of subsidiary
undertakings as shown in note 30 Business Combinations and disposals
In the opinion of the directors, adequate provision has been made for claims and legal disputes and the directors thus consider that no contingent
liability for litigation exists.
Included in the Company figures – amounts owed to subsidiaries, are borrowings as detailed in note 15.
The Group has no contingent liabilities with regard to its interest in the associated undertakings (2015: none).
26 Operating leases and site agreements
The future minimum lease payments under non-cancellable operating leases are as follows:
Land and buildings
Not later than one year
After one year but not more than five years
After five years
Other
Not later than one year
After one year but not more than five years
After five years
Total
Not later than one year
After one year but not more than five years
After five years
Site owner agreements
Not later than one year
After one year but not more than five years
After five years
Group
2016
£’000
667
1,241
144
2,052
1,133
1,712
6
2,851
1,800
2,953
150
4,903
6,836
10,336
3,451
20,623
2015
£’000
666
1,074
–
1,740
1,010
1,028
7
2,045
1,676
2,102
7
3,785
7,126
9,932
3,154
20,212
Company
2016
£’000
144
229
–
373
462
927
–
1,389
606
1,156
–
1,762
1,273
884
1
2,158
2015
£’000
151
362
–
513
412
246
–
658
563
608
–
1,171
1,895
843
–
2,738
Lease arrangements
The Group and the Company have entered into operating lease agreements in respect of property, plant and machinery, the majority of which
are for motor vehicles.
Site owner agreements
The Group and the Company have entered into various commission agreements with site-owners enabling the Group and the Company to site vending
equipment for a number of years. The amounts shown in the table above represent the minimum fixed commission payable. Certain agreements may,
in addition, have clauses where additional commission is payable based on a percentage of revenue generated, above a specified amount.
Based on the IASB publications in 2015: Project Update: Leases - Practical implications of the new Leases standard and Project Update: Leases -
Definition of a Lease, the Board decided to show in 2015 and for future periods separately under the heading site owner agreements the obligations
arising under commission agreements which extend beyond 12 months as such agreements did not appear to meet the definition of a lease.
In January 2016 the IASB issued IFRS16 Leases which is effective for annual reporting periods beginning on or after 1 January 2019, subject to EU
endorsement. Under this standard all leases, both finance and operating will be included on the balance sheet. The Group will study the impact of this
new standard in 2016 and the impact on both operating lease and site owner agreements.
28 Related parties
The following transactions were carried out with related parties:
Directors’ compensation
Salaries and other short-tem employee benefits
excluding long-term incentives and pension contributions
Post-employment benefits
Share- based payments - charge
Group
2016
£’000
1,360
80
117
1,557
2015
£’000
1,491
9
99
1,599
Company
2016
£’000
1,360
80
117
1,557
2015
£’000
1,491
9
99
1,599
The remuneration of the directors, both executive and non-executive, of the Company, who are the key management personnel of the Group,
is set out in the table above. These figures include amounts payable to third party companies for services of the directors. Further information about
the remuneration of the directors is given in the Remuneration report on pages 30 to 42. Certain executive directors, with UK salaries, are entitled to
join the Company’s Group Personal Pension Plan, to which the Company contributes 5% of their basic salaries. The charge for the year was £3,000
(2015: £9,000). No director who served during the year was a member of the Company’s defined benefit pension scheme (2015: none).
Directors of the Company control 21.3% of the Ordinary shares of the Company. The interests of the directors are shown on page 39
of the Remuneration report.
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Notes to the Financial Statements
for the year ended 30 April 2016
Sales of goods and services, purchases and year end balances
Sales of goods and services
Associates
Trade and other receivable balances
Associates
Group
2016
£’000
84
84
51
51
2015
£’000
92
92
–
–
Company
2016
£’000
2015
£’000
–
–
–
–
–
–
–
–
Transactions with related parties other than associates refer to transactions with companies in which certain directors have declared an interest.
All transactions with related parties were conducted at arm’s-length in the ordinary course of business.
The trade and other receivable balances with related parties and associates arise from normal trading and do not include any security
or any other consideration.
The trade and other payable balances arise from normal trading.
The Company has the following transactions with related parties.
Defined benefit pension scheme
Administration costs of Company defined benefit scheme
Transactions with subsidiaries
Sales
Purchases
Amounts owed by subsidiaries
Amounts owed to subsidiaries
Other items
Interest due from subsidiaries
Interest paid to subsidiaries
Intercompany fee due from subsidiaries
Intercompany fees charged by subsidiaries
Property, plant and equipment
- sold to subsidiaries
- acquired from subsidiaries
Dividend income
- from subsidiaries
Transactions with Associates
Dividends received from associates
2016
£’000
47
2016
£’000
72
5,428
3,095
34,246
5
73
7,458
1,591
36
3,092
10,692
2016
£’000
–
2015
£’000
39
2015
£’000
54
5,707
6,849
13,226
5
32
8,681
1,358
132
3,056
8,430
2015
£’000
96
29 Group undertakings
This disclosure is made in accordance with Section 409 of the Companies Act 2006 and the Large and Medium-sized Companies and Groups
(Accounts and Reports) Regulations 2008, as amended by the Companies, Partnerships and Groups (accounts and reports) Regulations 2015.
A full list of subsidiary undertakings and associated undertakings (showing country of incorporation, which is also the main trading location of the
company, and the effective percentage of equity shares held) at 30 April 2016 is shown below. Unless indicated otherwise the equity shares held
are in the form of ordinary shares or common stock.
Principal group undertakings which affect the financial statements of the Group are highlighted in bold. Together with the Parent Company,
Photo-Me international plc, these companies contributed over 85% of the Group’s revenue and operating profit.
Geographical Area
Subsidiary undertakings
Principal activity
Group’s interest
United Kingdom and Ireland
Camden Management Services Limited
Fowler UK.Com Limited
Jolly Roger (Amusement Rides) Limited
MgInvest Investments Limited
Xpand Investments Limited
Photo-Me Limited
Photo-Me (Retail) Limited
Photo-Me Trustee Limited
Power-Me Limited
Photo-Me Ireland Limited
Impact (Web Services) Limited
Continental Europe
Prontophot Austria G.m.b.H.
Prontophot Belgium NV
Photo-Me Czech Republic s.p.o.l. s.r.o.
Photo-Me France SAS
KIS SAS
Photomaton SAS
SCI Immobilière du 21
SCI du Lotissement d’Echirolles
Fotofix-Schnellphotoautomaten G.m.b.H.
Prontophot Holland B.V
Animate Fotofixe Limitada
KIS Poland s.p.z.o.o.
KIS Automatic Services SL
Copyphot SA
Prontophot (Schweiz) AG
Photo-Me Suisse SA
Prontophot Holding SA
Asia and Rest Of World
Photo-Me Beijing Co Limited
Photo-Me (Shanghai) Co Limited
NAP (Hong Kong) Limited
Photo-Me Korea Company Limited
Nippon Auto-Photo Kabushiki Kaisha
Photomatico (Singapore) Pte Limited
KIS Technology Company Limited
KIS USA LLC
KIS (Thailand) Limited
Associated undertakings
Stilla Technologies SA
Photomaton Maroc SARL
Photo Direct Pty Ltd
Max Sight Limited
Fullwise International Limited
Operations
Operations
Production
Investment
Investment
Dormant
Dormant
Dormant
Dormant
Operations
Dormant
Operation
Operations
Dormant
Investment
Trading
Operations
Property
Property
Operations
Operations
Operations
Operations
Operations
Operations
Operations
Dormant
Dormant
Operations
Operations
Dormant
Operations
Operations
Operations
Trading
Operations
Dormant
Biotechnology
Operations
Sales & servicing
Operations
Dormant
100%*
100%
100%
100%*
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%*
100%
100%*
100%*
100%*
61%*
100%
100%
100%
100%
100%
100%*
100%
100%
100%
100%*
100%*
100%*
100%*
100%
100%
100%
100%
49%
40%
50%
26.95%
33.33%
33.33%
Country of
incorporation
England & Wales
England & Wales
England & Wales
England & Wales
England & Wales
England & Wales
England & Wales
England & Wales
England & Wales
Republic of Ireland
Republic of Ireland
Austria
Belgium
Czech Republic
France
France
France
France
France
Germany
Holland
Portugal
Poland
Spain
Switzerland
Switzerland
Switzerland
Switzerland
China
China
Hong Kong
Korea
Japan
Singapore
Vietnam
USA
Thailand
France
Morocco
Australia
Hong Kong
Hong Kong
Investments in subsidiaries not owned directly by Photo-Me International plc are indicated thus *.
Photo-Me CR.s.p.o.l.s.r.o. is owned 20% by Photo-Me International plc and 80% by Prontophot Austria G.m.b.H.
Photo-Me International plc owns 49% common shares in KIS (Thailand), 51% preferred stock are owned by other shareholders.
The results of the Group’s subsidiaries and associates are consolidated for the year ended 30 April. Certain subsidiaries and associates have a different
statutory year end, sometimes due to legal requirements in the country concerned.
The following subsidiaries and associates have year ends which are not 30 April. Fowler UK.Com Limited 30 September, SCI du Lottisement d’Echirolles
31 December, Photo-Me Beijing Co Limited and Photo-Me ( Shanghai) Co Limited 31 December, KIS Technology Company Limited.
31 March, Stilla Technologies SA 31 December, and Photo Direct Pty Ltd 30 June.
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Notes to the Financial Statements
for the year ended 30 April 2016
Five Year Summary
30 Business Combinations and disposals
Business Combinations
Current year
The Group completed its acquisition of 100% of the share capital and voting interests in Fowler UK.Com Ltd (“Fowler”) in early November 2015.
Fowler is a UK company which supplies and installs laundry and catering equipment. The acquisition was effective on 1 October 2015 and Fowler
was consolidated in the Group’s consolidated results and balance sheet from that date.
The table below summarises the fair value of assets acquired, liabilities assumed and the consideration paid.
Intangible assets
Property, plant and equipment
Inventory
Trade and other receivables
Cash and cash equivalents
Total assets
Borrowings
Deferred tax
Trade and other payables
Current tax
Total liabilities
Total identifiable net assets
Total net assets excluding net cash and cash equivalents
Goodwill
Goodwill and total identifiable net assets
Cost of investment
Deferred consideration
Cash paid as per Company Statement of Cash Flows
Net cash acquired
Net cash consideration as per Group Statement of Cash Flows
£’000
253
549
265
280
209
1,556
178
55
289
56
578
978
947
1,273
2,251
2,251
400
1,851
209
1,642
As a result of this acquisition the Group is expected to strengthen its presence in the laundry market and benefit from cost savings and business synergies.
Goodwill of £1,273,000 arose on this acquisition.
Prior year business combinations and disposals
Business combinations
On 14 May 2014 the Group acquired 100% of the share capital and voting interests in Copyphot SA, a small operating company in Switzerland.
Disposals
Transactions with non-controlling interests.
During the year ended 30 April 2015 the Group disposed of its 51% interest in Photo-Me Hungary KFT, a small operating company, to its other shareholder
for a total consideration of €110,000 (£80,000), which was the Group’s share of the net assets.
The profit on this transaction is shown in finance income after including the recycling of accumulated exchange differences through the income statement.
Income statement (unaudited)
Revenue
UK & Ireland
Continental Europe
Asia
Total revenue
Operating profit after special items before finance costs
Net finance (cost)/income
Profit before taxation
Taxation
Profit after taxation
Attributable to:
- equity owners of the Parent
- Non-controlling interests
Earnings per share - basic
Earnings per share - diluted
Dividends - interim
Dividends - final
Dividends - special
Total dividends
* Including discontinued operations.
2016
£’000
45,783
93,712
44,499
183,994
39,734
372
40,106
(10,907)
29,199
29,066
133
29,199
7.77p
7.72p
2,575p
3.285p
2.815p
8.675p
Statement of financial position (unaudited)
Intangible assets
Property,plant and equipment
Other non-current investments
Other non-current assets
Current assets
Assets held for sale
Total assets
Share capital
Share premium
Treasury shares
Reserves
Equity of the Parent
Non-controlling interests
Total equity
Total non-current liabilities
Total current liabilities
Total equity and liabilities
Net cash
2016
£’000
20,312
56,723
1,713
8,092
103,382
96
190,318
1,877
8,156
–
111,608
121,641
1,109
122,750
17,656
49,912
190,318
62,415
2015
£’000
44,652
94,345
38,205
177,202
38,370
126
38,496
(10,452)
28,044
27,900
144
28,044
7.49p
7.43p
2.34p
2.54p
0.00p
4.88p
2015
£’000
16,687
48,721
848
7,486
82,474
–
156,216
1,866
7,131
–
94,510
103,507
904
104,411
7,549
44,256
156,216
60,669
2014
£’000
44,927
102,932
38,739
186,598
30,266
(173)
30,093
(8,514)
21,579
21,422
157
21,579
5.77p
5.70p
1.80p
1.95p
2.00p
5.75p
2014
£’000
15,687
47,045
620
8,474
86,680
705
159,211
1,859
6,521
–
94,734
103,114
1,119
104,233
8,713
46,265
159,211
63,111
2013
£’000
45,744
104,913
44,933
195,590
24,199
107
24,306
(6,746)
17,560
17,405
155
17,560
4.78p
4.76p
1.50p
1.50p
3.00p
6.00p
2013
£’000
16,715
46,057
790
6,376
85,872
–
155,810
1,856
6,287
–
89,018
97,161
1,197
98,358
9,847
47,605
155,810
61,419
2012*
£’000
46,173
114,045
47,623
207,841
20,019
121
20,140
(5,594)
14,546
14,349
197
14,546
3.97p
3.95p
1.25p
1.25p
–
2.50p
2012
£’000
18,853
47,275
592
6,877
86,075
–
159,672
1,850
5,873
(5,802)
93,919
95,840
1,001
96,841
13,292
49,539
159,672
51,832
Note: The figures above have been extracted from the accounts for the relevant year and have not been adjusted for changes in accounting policies
as a result of adoption of new accounting standards.
Financial & operating statistics
Capital expenditure - photobooth & vending machines £’000
Capital expenditure - research & development £’000
EBITDA £’000
EBITDA % of revenue
Number of vending sites
2016
19,402
2,935
56,695
30.8
45,500
2015
18,287
2,560
55,251
31.2
44,600
2014
17,327
1,125
47,803
25.6
43,850
2013
16,381
1,058
44,927
23.0
43,150
2012
15,032
2,169
44,033
21.2
43,000
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Company Information
& Advisors
Registered in England and Wales
Number 735438
Registered Office
Church Road, Bookham
Surrey, KT23 3EU
Tel: +44 (0)1372 453399
Fax: +44 (0)1372 459064
Web: www.photo-me.co.uk
e-mail: ir@photo-me.co.uk
Auditor
KPMG LLP
1 Forest Gate, Brighton Road
Crawley, RH11 9PT
Brokers
finnCap Limited
60 New Broad Street
London, EC2M 1JJ
Canaccord Genuity Ltd
88 Wood Street
London
EC2V 7QR
Bankers
Lloyds Bank plc
City Office, 11–15 Monument Street
London, EC3V 9JA
Santander UK plc
2 Triton Square, Regent’s Place
London, NW1 3AN
Financial public relations
Madano Partnership Ltd
7th Floor, 160 Blackfriars Road
London, SE1 8EZ
Registrars
Capita Asset Services
The Registry, 34 Beckenham Road
Beckenham, Kent , BR3 4TU
Shareholder Information
Analysis of registered shareholdings at 21 June 2016
Category:
Individuals
Nominees
Other corporate bodies
Size of holding:
1 – 1,000
1,001 – 10,000
10,001 – 100,000
100,001 – 500,000
500,001 – 1,000,000
1,000,001 and above
Number
of holdings
Number of % of issued
Ordinary
share capital
Ordinary
shares
2,007
466
48
2,521
1,189
963
233
64
29
43
2,521
7,708,334
348,662,716
19,107,728
375,478,778
583,523
3,076,723
7,709,356
16,588,013
20,366,846
327,154,317
375,478,778
2.1
92.9
5.0
100.0
0.2
0.8
2.1
4.4
5.4
87.1
100.0
Capital gains tax
For shareholders wishing to calculate United Kingdom capital gains tax, the example below shows the effect on 100 shares at 31 March 1982
after all subsequent capitalisations and subdivisions:
31 March 1982
9 December 1983 (1 for 5 Cap.)
12 December 1985 (1 for 6 Cap.)
12 December 1985 (subdivision)
18 December 1987 (subdivision)
13 December 1989 (subdivision)
8 November 1999 (subdivision)
100
20
120
20
140
140
280
1,120
1,400
1,400
2,800
11,200
14,000
Ordinary shares of 50p each
(at market value of 445p per 50p share)
Ordinary shares of 50p each
Ordinary shares of 50p each
(50p to 25p)
Ordinary shares of 25p each
(25p to 5p)
Ordinary shares of 5p each
(5p to 2.5p)
Ordinary shares of 2.5p each
(2.5p to 0.5p)
Ordinary shares of 0.5p each
Investor relations website
Investor relations information, including share price, is available through the Company’s website www.photo-me.co.uk
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Shareholder Information
continued
Transfer office and registration services
Capita Asset Services Limited act on behalf of the Company. All shareholder enquiries, notifications of change of address, dividend mandates, etc.
should be referred to them at:
Capita Asset Services
The Registry, 34 Beckenham Road
Beckenham, Kent, BR3 4TU
Tel: 0871 664 0300
Overseas Tel: 00 44 208 639 3399
Fax: 0871 644 0399
Capita Asset Services also offer a range of shareholder information online at www.capitashareportal.com
The Register of directors’ interests is maintained at the Registered Office at Bookham.
Copies of the Annual Report should be requested from:
Photo-Me International plc
Church Road, Bookham
Surrey, KT23 3EU
Tel: +44 (0)1372 453399
Fax: +44 (0)1372 459064
e-mail: ir@photo-me.co.uk
Financial calendar
Annual General Meeting
Half-year results (to 31 October 2016)
Full-year results (to 30 April 2017)
Dividend
Final (year to 30 April 2016) and special – ex-dividend date
– record date
– payment date
20 October 2016
Announcement in December 2016
Announcement in June/July 2017
6 October 2016
7 October 2016
10 November 2016
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Designed and produced by effektiv
+44 (0)20 7251 7720 / www.effektiv.co.uk
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