XPEDIATOR PLC Annual Report For the year ended 31 December 2022
ANNUAL REPORT
2022
01
2022 Annual Report & Accounts | OVERVIEW
Contents
Overview
Group Introduction
2
2022 Overview & Highlights
3
Strategic Report
Interim Chairman’s Statement
4
Operational Statement
5
Divisional Review
6
CFO’s Statement
7
Key Performance Indicators
10
Section 172(1) Statement
11
Vision & Values
13
ESG Strategy
14
Risks & Uncertainties
19
Governance
Board of Directors
25
Corporate Governance Statement
27
Director’s Report
36
Statement of Director’s Responsibilities
38
Independent Auditor’s Report
39
Financial Statements
Consolidated Income Statement
44
Consolidated Statement of Other Comprehensive Income
45
Consolidated Statement of Financial Position
46
Consolidated Statement of Changes in Equity
47
Consolidated Statement of Cash Flows
48
Notes to the Consolidated Financial Statements
49
Company Statement of Financial Position
81
Company Statement of Changes in Equity
82
Notes to the Company Financial Statements
83
Advisors
90
Xpediator plc | Annual report 2022
02
Global Supply Chain Solutions for the UK &
European markets
Xpediator Plc is an international freight management company
providing logistics and transport support solutions, exploiting
the global growth demand for transportation services.
As a Group Xpediator Plc is committed to providing dynamic
supply chain solutions and innovation within a global market,
focusing on outstanding quality and customer care excellence.
On 4 May 2023, the Board recommended an Offer from
DLM Bidco Limited (a newly incorporated entity indirectly
owned by a consortium comprising the Company’s largest
shareholder, Cogels Investments Limited (“Cogels”), the
investment vehicle of close family members of Stephen Blyth
(former CEO of Xpediator), funds managed by Baltcap, one
of the largest private equity investors in the Baltic states,
and Justas Versnickas, the Managing Director of, and 20%
shareholder in, Delamode Baltics, a subsidiary of Xpediator)
to acquire the entire issued, and to be issued, share capital of
the Company. The Offer comprises 42p cash per share (“Cash
Offer”) and a special dividend of 2p which values the Company
at approximately £62.3m. Under the terms of the Offer, a loan
note alternative will be available to eligible shareholders, which
will enable them to elect to receive loan notes in lieu of part or
all of the cash consideration to which they would otherwise be
entitled under the terms of the Offer. The shareholder meetings
for eligible shareholders to approve the Offer (being structured
as a Scheme of Arrangement) are scheduled for 7 June 2023.
Group Introduction
03
2022 Annual Report & Accounts | STRATEGIC REPORT
Freight Forwarding Revenues
£312.7m
(2021: £233.6m)
Warehousing & Logistics Revenues
£65.6m
(2021: £56.7m)
Transport Support Services Revenues
£8.4m
(2021: £6.3m)
Increase in Revenues
30%
(2021: 34%)
Increase in Profit Before Tax
52%
(2021: 10%)
Increase in Adjusted Profit Before Tax
21%
(2021: 25%)*
Decrease in Adjusted Earnings Per Share
(18)%
(2021: (4)%)
Net debt
£3.6m
(2021: £4.8m)
2022 Operational Highlights
•
Continued exceptional performance in the Freight
Forwarding Division, especially in the Baltic region, the
largest region for the Group in terms of revenue and profit.
•
Profitable performances by both the Transport Support
Services and Romanian Warehouse & Logistics Divisions
helped the Group achieve a particularly strong second
half performance.
•
The UK Logistics Division, underwent significant change
during the period, including post year end, the closure of
the Beckton warehouse.
2022 Financial Highlights
•
Significant organic growth with Group revenue increasing
30% to a record performance of £386.7m (2021: £296.6m)
with a particularly strong contribution from the Group’s
largest division, Freight Forwarding.
–
Freight Forwarding delivered revenue of £312.7m,
an increase of 34%.
–
Warehouse & Logistics delivered revenue of £65.6m,
an increase of 16%.
–
Transport Support Services delivered revenue of
£8.4m, an increase of 35%.
•
Adjusted profit before tax of £11.0m, up 21% (2021: £9.1m).*
•
Reported profit before tax of £6.5m (2021: £4.3m).
•
Adjusted basic earnings per share of 3.03 pence (2021:
3.68 pence).
•
Basic loss per share of (0.13) pence (2021: earnings per
share 0.29 pence).
•
Net cash generated from operating activities was £17.7m
(2021: £4.7m).
•
Net debt position of £3.6m (2021: net debt of £4.8m)
improved due to strong trading across the Group,
particularly in Delamode Baltics, but also as a result of
greater focus on turning around the loss-making UK entities.
Recommended Cash Offer
•
On 6 April 2023, Xpediator announced a recommended
cash offer by DLM Bidco Limited, of 44p per share
comprising 42p in cash and a special dividend of 2p (the
“Offer”).
•
Under the terms of the Offer, a loan note alternative will
be available to eligible shareholders, which will enable
them to elect to receive loan notes in lieu of part or all of
the cash consideration to which they would otherwise be
entitled under the terms of the Offer.
•
The Xpediator Directors, who have been so advised by
Zeus Capital (financial adviser to Xpediator) as to the
financial terms of the Offer, consider the terms of the
Offer to be fair and reasonable.
•
Shareholder meetings will be held on 7 June 2023 at
which eligible shareholders will vote on the proposed
Offer.
* Adjusted profit before tax is set out in Chief Financial Officer’s report and includes adjustments for the amortisation of intangibles, impairment, the impact of the
application of IFRS16 and exceptional items.
2022 Overview & Highlights
Xpediator plc | Annual report 2022
04
Introduction
I am pleased to present these results for the 12 months to
31 December 2022. The Group generated revenues of £386.7m,
a 30% increase over the prior year and adjusted profit before tax
of £11.0m, up 21%. Statutory profit before tax was £6.5m, up 52%.
An excellent performance and further enhanced by the progress
made with reducing net debt, being £3.6m at 31 December 2022
substantially down from the £8.0m at 30 June 2022.
Trading has begun positively in 2023 and we expect the
business to continue to grow throughout the current year. At the
same time, we remain aware of potential challenges. To date,
we have managed to offset any reduction in trade due to the
conflict in Ukraine with sales increases in other markets, and
whilst globally markets remain challenging, we will continue to
operate within our capabilities and not over extend ourselves.
Recommended Offer
On 4 May 2023, the Board recommended an Offer from
DLM Bidco Limited (a newly incorporated entity indirectly
owned by a consortium comprising the Company’s largest
shareholder, Cogels Investments Limited (“Cogels”), the
investment vehicle of close family members of Stephen Blyth
(former CEO of Xpediator), funds managed by Baltcap, one
of the largest private equity investors in the Baltic states,
and Justas Versnickas, the Managing Director of, and 20%
shareholder in, Delamode Baltics, a subsidiary of Xpediator)
to acquire the entire issued, and to be issued, share capital of
the Company. The Offer comprises 42p cash per share (“Cash
Offer”) and a special dividend of 2p which values the Company
at approximately £62.3m. Under the terms of the Offer, a loan
note alternative will be available to eligible shareholders, which
will enable them to elect to receive loan notes in lieu of part or
all of the cash consideration to which they would otherwise be
entitled under the terms of the Offer. The shareholder meetings
for eligible shareholders to approve the Offer (being structured
as a Scheme of Arrangement) are scheduled for 7 June 2023.
Our people
As ever, it is the people within the business who drive its
success. We know this and we have worked to increase our
focus and investment in individuals and provide collaborative
work environments. Our objective remains for the Group to
be seen as an employer of choice. We believe that employee
satisfaction continues to improve and through our employee
surveys we are listening to our teams and making their input
part of the future changes we make.
2022 was a successful year for the business and on behalf
of the Board I would like to thank everyone in the business for
their significant contributions.
Board and management changes
During the year there were several changes to the Board. In March,
Mark Whiteling, Non-executive Chairman, and Stephen Blyth,
Non-Executive Director (“NED”) and Founder, stepped down from
the Board. Rob Riddleston stepped in as Interim Chairman from
25 March to 1 June 2022. In June, Richard Myson re‑joined the
Company as Chief Financial Officer having previously worked for
the Group for 16 years, replacing Mike Williamson the outgoing
Chief Financial Officer. Mike Stone joined as Interim Chief Executive
and I joined as Interim Non‑Executive Chairman. Mike Stone
replaced Wim Pauwels who had stepped in from his NED role to
Interim Chief Executive. Wim left the Company on 31 May 2022.
On 6 April 2023, Mike Stone advised the Board of his intention to
step down from his role of Interim Chief Executive and from the
Board before the Offer completes but no specific effective date
has yet been agreed.
Operational targets
From June 2022, the new management team reviewed
the entire business and concluded that while the majority
of the Group was performing well and driving growth for
the business as a whole, there were some key areas of
underperformance. The second half of 2022 was successfully
focused on addressing these issues.
The first objective was to reduce the level of net debt which
at 30 June 2022 was £8.0 million and needed to come down
to a more sustainable level which we have achieved already
and the goal remains to move close to a net cash position by
the end of 2023.
The business review also highlighted the opportunity to
achieve greater operational efficiencies across the business
and reduce the cost base of the Group, without impacting the
quality of service we provide to our customers. This process
is well advanced and is already generating material savings.
From a trading perspective, the UK businesses have lagged
the performance of those on the Continent for some time both
in Freight Forwarding and Logistics. UK Freight Forwarding
has over the last six months improved under the leadership
of Justas Versnickas, MD of Delamode Baltics UAB. Similarly,
under Alberto Llames Romero, Head of UK Logistics, this division
has been restructured including the closure of the Beckton
warehouse and is now on a much-improved footing, albeit with
continual assessment of warehousing performance and with
other remedial actions available that can be taken as required.
Dividend
The Board is not recommending a final dividend to be paid
to shareholders, and no interim dividend was paid during the
year. In 2021 a total dividend of 1.10p per share was paid.
However, pursuant to the Offer and conditional upon
shareholder approval and the Offer completing, a special
dividend of 2p per share will be paid by the Company, further
details as to the timing of which will be provided in due course.
Outlook
The business has good foundations and the changes that have
occurred in the last nine months, have further enhanced the
business base. While cognisant of the wider market environment
and the ongoing volatility that is occurring in different parts of the
marketplace, transportation and storage of goods will continue
to be required. Notwithstanding the Offer to purchase the share
capital of the business and the potential change in ownership,
we believe the Group continues to be well placed to grow.
Interim Chairman’s Statement
05
2022 Annual Report & Accounts | STRATEGIC REPORT
Operational Statement
Introduction
The Board are happy to report that the Group is in good
health. During 2022, the business has grown, the operational
team have worked well together to bring in some important
changes which we believe will deliver benefits to the Group
over the medium to longer term. Most importantly, we
continue to offer a professional and highly efficient service to
our thousands of customers across the globe, ensuring their
goods are transported and stored safely, securely and cost
effectively.
The business generated close to £400 million in annual sales,
another target achieved by the team. 71% of revenues came
from the continent with the balance of 29% coming from the
UK. Our largest and most profitable business continues to be
our Freight Forwarding operation in Lithuania. Led by Justas
Versnickas, this division has been a core driver of the Group’s
success together with strong trading performances from the
Baltic and Balkan regions as a whole.
It has been clear from the outset that there is potential for
the UK businesses to make a much greater contribution to
the Group. Both UK Freight Forwarding and UK Logistics have
underperformed their potential and in the case of Logistics
have been a drag on profitability. Significant change requires
time to implement and take effect but over the last 9 months
we have made some important changes in the UK which we
believe will result in both areas making significant long-term
improvements.
UK Logistics which has been loss-making for some time, has
been fundamentally restructured under the leadership of
Alberto Llames Romero. The loss making high street fashion
warehouse in Beckton, covering 70,000 sq ft, has been
returned to the landlord at the end of our lease period with
key warehouse customers transferring their business to our
warehouse in Braintree which is not yet running to capacity
but is moving in the right direction. This, together with the
implementation of a new Warehouse Management System
in the recently developed 235,000 sq ft dockside warehouse
in the port of Southampton, has improved the financial
performance and future of the UK Logistics division.
Positive trading and better cost control enabled the Group
to reduce net debt to £3.6 million as at 31 December
2022. A significant reduction down from £8.0 million as at
30 June 2022. The Group’s indebtedness was a key issue for
the business, but it is now under control and whilst further
improvements are required, the goal to be cash positive
during 2024 is achievable.
Health & Safety
Health and Safety receives strategic focus and priority
on a daily basis. We are proud of the fact that there were
no significant injuries reported in 2022 and will continue
to ensure health and safety receives significant attention
throughout the Group.
Operational Review
Our strategy remains focused around building a scalable and
risk adjusted platform to support our freight management
companies across the UK and Europe with a particular
expertise in Central and Eastern Europe (“CEE”).
Xpediator plc | Annual report 2022
06
Divisional Review
Freight Forwarding
Overall, the Freight Forwarding division has performed well
with an exceptional performance delivered by Baltics and
strong performances from Bulgaria and Regional Express.
Revenue £312.7m (2021: £233.6.m)
Operating profit £12.6m (2021: £9.7m)
Operating predominately under the Delamode brand, this
division specialises in international freight management
services via road, sea, air and rail connecting CEE countries
and the UK with each other and the rest of Europe.
Revenues across the Baltics and Balkans continued to grow
significantly against prior year comparatives, with Baltics
revenue up by £65.0 million, a 71% increase year on year, and
Bulgaria up by £8.3 million, a 25% increase. Both businesses
benefitted from the global increase in sea freight rates plus
the development of new routes. Profit before tax in the Baltics
increased by £8.9 million to £15.9 million (2021: £7.0 million)
and in Bulgaria by £0.2 million to £1.5 million (2021:
£1.3 million). In addition, both Serbia and Estonia delivered a
strong performance as these businesses continue to mature
with revenue up 20% and 27% respectively.
Delamode Anglia, the largest UK freight forwarding business,
struggled in 2022 as a consequence of the integration of
the two acquired business into the main forwarding entity,
which resulted in revenue decreasing by £10.7 million year on
year. Improvements in performance have been seen in 2023.
Regional Express and Delamode Nidd, which both trade
independently, saw profits increase.
Warehousing & Logistics
Warehousing & Logistics division generated good revenue
growth led by Pallex Romania.
Revenue £65.6m (2021: £56.7.m)
Operating profit £0.7m (2021: £1.5m)
The Group’s warehousing capacity in the UK, Romania and
Bulgaria offers comprehensive services in strategically
situated sites. Although revenues for this division increased
year on year profitability was reduced attributable to the
warehousing operations in the UK.
Good trading performances from Pall-Ex and Logistics in
Romania drove an overall increase in revenues for this division,
UK warehousing also generated an increase in revenue, up
£5.1m due to the full year operation of the new facility in
Southampton. Profitability reduced significantly however,
primarily due to the challenges faced by the retail focused
Beckton warehouse and reduced occupancy in the Braintree
warehouse.
The Group’s Pall-Ex franchise in Romania continues to
perform strongly, offering a palletised freight delivery service
to any part of the country within 24 hours and handling in
excess of 90,000 pallets on average per month.
Transport Support Services
Transport Support Services operating under the Affinity
brand continues to go from strength to strength under the
leadership of strong and innovative local management. The
existing product offering is well established and continues to
be improved through digitalisation and innovation.
Revenue £8.4m (2021: £6.3m)
Gross billing £189.6m (2021: £145.9m)
Operating profit £2.7m (2021: £2.4m)
Affinity, provides bundled fuel and toll cards, financial and
support services for hauliers in Southern Europe. Affinity
has been an agent of DKV in Romania since 2002, one of
the world’s largest fuel card providers and provides the DKV
fuel card across the Balkans to a database of approximately
2,400 Eastern European hauliers.
In addition, Affinity provides a “one stop shop” of transport
services including roadside assistance and ferry bookings.
Affinity’s commercial model fits well within the Group as many
of the hauliers who are customers of Affinity also supply
haulage services to Delamode a key factor that enables the
Group to have a good understanding of its customers and
suppliers, which underpins the strategy to provide further
financial services such as insurance and leasing. With
continued driver shortages in Europe, having a haulage
supplier base is increasingly important for the Freight
Forwarding division.
Volumes sold to customers (gross billings) increased in 2022
by 30% year on year, mainly due to the increase in the average
fuel cost per litre, which increased by 24% year on year.
Romania remains the largest region for the division
representing 78% of total activity in terms of gross billings
(2021: 79%). The Balkans operation continues to grow
leveraging the relationships with the Freight Forwarding
businesses based in Bulgaria and Serbia.
In 2022 Affinity expanded its product offering with the
development of the financial services provision tailored
specifically for its existing customer base.
Affinity’s 20 years of experience and well-established
leadership team provides a good platform to expand in new
geographical regions, as well as being well placed to further
develop its service and product offerings.
07
2022 Annual Report & Accounts | STRATEGIC REPORT
2022 financial results improved over 2021 on the back of enhanced revenue.
Revenue
Group revenue increased in 2022 by £90.1 million (30.3%) to £386.7 million.
The Freight Forwarding Division delivered £312.7 million (33.9% increase from 2021), the Warehousing and Logistics Division revenue
of £65.6 million (15.5% increase from 2021) and the Transport Support Services Division delivered £8.4 million (34.5% increase
from 2021).
Segment Profit Before Central Overhead Allocation and Exceptional Items
This definition of profit performance is presented to provide a clear view of underlying trading activities and to ensure consistency
with previous reporting and commentary.
Operating profit of the Freight Forwarding Division increased by £2.9 million to £12.6 million largely driven by increased activity
in Baltics region.
Operating profit of the Warehouse and Logistics Division decreased by £0.8 million to £0.7 million mainly due to the reduction in
volumes in the UK and overstaffing to accommodate expected volumes in Southampton which were delayed.
The Transport Support Services Division’s operating profit increased by £0.3 million to £2.7 million.
Group Profit before Taxation
Group profit before tax increased in 2022 to £6.5 million (2021: £4.3 million) driven by the Freight Forwarding Division.
A summary of operating profit before central overhead allocation by division is shown below:
2022
2021
2020
2019
2018
2017
Freight Forwarding
£12.6m
£9.7m
£6.8m
£3.4m
£3.0m
£2.4m
Warehouse and Logistics
£0.7m
£1.5m
£2.6m
£2.9m
£3.0m
£0.9m
Transport Support Services
£2.7m
£2.4m
£2.3m
£2.5m
£2.3m
£2.0m
Adjusted Profit before Tax
This table sets out the adjustments made to the profit before tax to show an underlying trading profit performance and establish
consistency in reporting from prior periods and arrive at an adjusted profit before tax:
2022
2021
2020
2019
2018
2017
Profit Before Tax
£6.5m
£4.3m
£3.9m
£2.2m
£5.6m
£2.4m
Exceptional Items (note 27)
£0.5m
£2.6m
£1.4m
£0.9m
£0.3m
£0.9m
Net unwind and addback of discount on
deferred consideration/Benfleet vendor
income (note 8)
-
-
£0.1m
£0.3m
£0.2m
£0.3m
Amortisation of intangibles on acquisition
(note 12)
£1.5m
£1.5m
£1.5m
£1.4m
£1.1m
£0.4m
Impairment (note 12)
£1.5m
-
-
-
-
-
Net Income Statement Impact of
application of IFRS 16
£1.0m
£0.7m
£0.3m
£0.3m
-
-
Adjusted profit before tax
£11.0m
£9.1m
£7.2m
£5.1m
£7.2m
£4.0m
Earnings per Share
2022
2021
2020
2019
2018
2017
Basic (Loss)/Earnings Per Share
(0.13)
0.29
1.46
0.60
3.53
1.64
Adjusted Earnings Per Share
3.03
3.68
3.84
2.80
4.80
3.27
The total number of ordinary shares as at 31 December 2022 was 141.7 million (2021: 141.7 million).
(Loss)/Profit after tax attributable to the owners of the parent company of £(0.2) million (2021: £0.4 million) provides a basic
earnings per share of (0.13)p (2021: 0.29p). Adjusted profit before tax results in basic and diluted earnings per share of 3.03p
and 3.03p respectively (2021: basic and diluted 3.68p, 3.67p) (see note 10 of the financial statements).
Chief Financial Officer’s Statement
Richard Myson, Chief Financial Officer
08
Xpediator plc | Annual report 2022
Financial Resources
Asset Cover
2022
2021
2020
2019
2018
2017
Total Assets
£237.8
£196.1m
£138.2m
£128.9m
£98.8m
£76.4m
Net Assets
£31.9m
£29.2m
£31.2m
£29.0m
£29.1m
£14.8m
Current Ratio
1.05
0.99
1.05
1.01
1.14
1.07
A current ratio of 1.05 for 2022 shows an improvement over 2021 of 0.99.
Cash
The Group traditionally has been an asset light, cost conscious and cash generative entity and the focus of the Board has been
to restore this strategy in H2 of 2022.
By improving the performance of Delamode Anglia and the UK Logistics business, controlling the under-recovered costs in the
centre, together with the increased profits generated in the Baltics, the Group improved the cash position from H1 to end the
year with a net debt position of £(3.6)m, down from 30 June 2022 of £(8.0)m and £(4.6)m as at 31 December 2021.
The Board continues to monitor cash regularly to ensure the financing needs of the business are met and expects these to be
achieved for the coming year from existing cash balances, current funding facilities and operating cash flows.
The Group has sufficient financial resources and a broad spread of business activities. The Directors therefore believe that it is
well placed to manage its business risks.
Cash
20221
2021
2020
2019
20182
20172
Net cash from operating activities
£17.7m
£4.7m
£14.1m
£14.2m
£9.5m
£3.9m
Net cash outflow from investing activities
£(2.2)m
£(3.1)m
£(6.0)m
£(2.0)m
£(7.0)m
£(6.5)m
Net cash (outflow)/inflow from
financing activities
£(16.4)m
£(1.5)m
£(7.8)m
£(9.3)m
£(0.4)m
£4.8m
Effect of foreign exchange movements
£1.5m
£(1.1)m
£0.4m
£(0.5)m
£0.2m
£(0.1)m
Cash and cash equivalents at end
of year
£12.2m
£11.7m
£12.7m
£12.0m
£9.6m
£7.3m
1 Cash and cash equivalents at end of year includes overdrafts of £879,000.
2 Comparatives for 2017 and 2018 have been restated for consistency with the reporting under IFRS 16. Previously, the cashflow for operating leases was reported
within net cash from operating activities (2018, £5.9m, 2017 - £2.2m), but are now reported in net cash outflow from financing activities.
Working Capital
Trade Receivables and Payables
2022
2021
2020
2019
2018
2017
Trade and other receivables
£104.5
£98.5m
£66.7m
£60.9m
£60.3m
£51.8m
Trade and other payables
£87.4
£86.6m
£64.8m
£58.6m
£56.1m
£51.0m
Days Sales Outstanding
(based on gross billings)
67.2
82.4
71.2
63.5
70.4
81.5
Days Payable Outstanding (based on cost
of sales and recoverable disbursements)
67.0
85.6
82.6
71.9
75.6
91.3
Trade receivables and payables increased at the year end as a consequence of a growing business, however days
sales outstanding and days payable outstanding have both significantly decreased reflecting improved working capital
management and controls.
Chief Financial Officer’s Statement
Continued
09
2022 Annual Report & Accounts | STRATEGIC REPORT
Administrative Costs Review
Average headcount increased from 1,432 in 2021 to 1,511 in 2022 driven primarily by the growing freight forwarding operations
in the Baltics.
Operating Costs (Key Items)
2022
2021
2020
2019
2018
2017
Staff Costs
£40.0m
£29.0m
£24.6m
£23.9m
£18.6m
£13.4m
Bad debts
£0.9m
£1.5m
£0.9m
£0.8m
£1.1m
£0.6m
Depreciation on right-of-use assets/
rental payable under leases
£12.4m
£8.6m
£6.3m
£6.0m
£5.9m
£2.3m
Insurance
£2.6m
£1.7m
£1.1m
£0.9m
£0.7m
£0.4m
Plant and machinery hire
£0.8m
£0.5m
£0.6m
£0.7m
£0.7m
£0.3m
IT costs
£1.4m
£1.7m
£2.1m
£1.6m
£0.6m
£0.3m
Net Finance Costs
Excluding the IFRS 16 impact of £2.2m (2021: £1.6m), finance costs were £0.7m compared to £0.4m in the prior year.
Impairment
The Group carries out its impairment tests from annually and all newly acquired entities are also reviewed for impairment at
the balance sheet date.
In 2021 the Group consolidated the activities of the acquired entities, Benfleet Forwarding Ltd and Anglia Group Forwarding
Ltd with the Freight Forwarding activity of Delamode Plc into one entity, Delamode Anglia Ltd.
For the purposes of the Group impairment, this consolidated entity is considered as one cash generating unit.
As a result of the underperformance of the UK Freight Forwarding business the Board has provided an impairment on the
intangible assets of £1.5m during the year.
Richard Myson
Chief Financial Officer
Chief Financial Officer’s Statement
Continued
Xpediator plc | Annual report 2022
10
Key Performance Indicators
A qualitative review of the performance during the year is provided in the Chairman and Operational Statements and CFO’s
Financial Review. The results for the year are presented in the Consolidated Financial Statements.
The key indicators of performance for the Group are shown below:
2022
2021
2020
2019
2018
2017
Revenues
£386.7m
£296.6m
£221.2m
£213.2m
£179.2m
£116.3m
Gross profit
£92.2m
£68.4m
£55.6m
£52.6m
£41.7m
£28.1m
Gross margins (%)
23.8%
23.1%
25.1%
24.7%
23.3%
24.2%
Operating profit before tax and
exceptional items1
9.8m
8.7m
£6.7m
£4.7m
£6.5m
£4.0m
Adjusted profit before tax2
£11.0m
£9.1m
£7.2m
£5.2m
£7.2m
£4.0m
Reported profit before tax
£6.5m
£4.3m
£3.9m
£2.2m
£5.6m
£2.4m
Net (debt)/cash
£(3.6)m
£(4.8)m
£6.8m
£7.0.m
£3.2m
£1.5m
Notes
1 Exceptional items totalling £0.5m (2021 - £2.6m) include relocation costs of £nil (2021 - £1.7m), compensation for loss of office of £0.1m (2021 - £0.5m), financing
negotiation fees of £nil (2021 - £0.1m), reorganisation and restructuring costs of £0.1 (2021 - £nil), aborted acquisition costs of £0.2m (2021 - £0.3m), and costs
associated with the proposed Offer for the entire issued share capital of Xpediator plc of £0.1m (2021 - £nil).
2 Adjusted profit before tax excludes the impact of exceptional items (detailed above) of £0.5m (2021 - £2.6m), amortisation on the intangible assets relating to
acquisitions of £1.5m (2021 - £1.5m), net impact to the consolidated income statement following the application of IFRS 16 of £1.0m (2021 - £0.7m), and the
impairment of UK Freight Forwarding business of £1.5m (2021 - £nil).
11
2022 Annual Report & Accounts | STRATEGIC REPORT
Section 172(1)(a) to (f) of the Companies Act 2006 requires
Directors to take into consideration the interests of stakeholders
in their decision making, to this effect the board of directors of
Xpediator Plc consider that they have acted in such a way that
would be most likely to promote the success of the Group for the
benefit of its members as a whole.
(a) The likely consequences of any decision in
the long-term
Annually the Group reviews it’s medium to long term plan which
focuses on the strategic direction of the Group as well as looking
at the threats and opportunities it is facing. This plan is designed
to ensure the long-term optimal direction of the Group and to
contribute to its success in delivering excellence with regards
to its services to customers, whilst ensuring the long terms
requirements of the other stakeholders are considered.
(b) The interests of the Group’s employees
and workforce engagement
The Board considers the employees as one of the key
stakeholders within the Group and given the nature of the
business their greatest asset. As such the Group welcomes any
feedback to ensure the alignment of both parties’ interests.
The interests of the employees are always considered when
determining the strategic direction and vision of the Group.
How employee-related issues and concerns are
elevated to the Board
The Group has an international Human Resources (“HR”)
team which support and escalate all employee related issues
to the Board. In those countries where headcount is smaller,
the Business Unit Leader supports this escalation (if required).
The Group utilises a HR Shared Service (“HRSS”) model. The
HRSS is an online reporting tool for all people related queries.
It is accessible to employees and line managers alike.
Direct actions arising from Board discussions
The Group has multiple approaches to directing action
arising from Board discussions, whether these are Senior
Management led roadshows or corporate communications in
launching new policies.
(c) The need to foster the Group’s business
relationships with suppliers, customers and
others
The Board recognises that the success of the Group is reliant on
the stakeholders of the business and, to this effect, the Group
engages with these stakeholder groups on a regular basis.
Our senior management team regularly meets with their
respective suppliers in order to form a mutually beneficial
long-term partnership.
We look to ensure our suppliers have the same core values
as the Group and as part of our Group’s procurement policy
it ensures all suppliers adhere to the Group’s Anti-Bribery and
Corruption policy as well as its policy on modern slavery, details
of which are available on the Group’s website https:// xpediator.
com/corporate-social-responsibility/modern-slavery-policy.
With a large diverse customer base, the Group ensures it
follows a customer account methodology, and is focused on
delivering service excellence.
Service levels are regularly monitored, and the results
considered by the senior management team who will take
timely corrective actions as and when required.
Further details can be found in our Corporate Governance
Statement
(d) The impact of the Group’s operations on
the community and environment
The Board recognises its responsibilities with regards to the
environment and wider community and takes actions to
reduce any negative impact the provision of its services may
have in this area.
The Board regularly looks at ways in which it can operate
a sustainable business and has taken actions to reduce its
carbon footprint.
Further details can be found in our ESG Strategy
Section 172(1) Statement
Xpediator plc | Annual report 2022
12
(e) The desirability of the Group maintaining
a reputation for high standards of business
conduct
In order to ensure that the business maintains its reputation
and integrity, the Board promotes a corporate culture based
on sound ethical values and behaviours which are essential to
maximise shareholder value.
Those core values serve as a common language that allows
all members of employees to work together as an effective
team and it is these values and our shared long-term
business vision and strategy that we believe will drive growth
in shareholder value over the long term.
The Board is committed to:
1 Creating a safe, positive and inclusive workplace environment;
2 Engaging all stakeholders and the broader community
with respect, integrity and honesty;
and
3 Fostering a high-performance culture that values the
contribution of all team members.
These values are enshrined in the written policies and working
practices adopted by all employees in the Group. The Board
takes the time to consider the wider ramifications to its
stakeholders when making strategic and corporate decisions,
whilst at the same time delivering the long-term objectives of
stakeholders.
The Board regularly reviews its whistleblowing process in
order to ensure it safeguards the Group and its employees.
As well as good practice in terms of corporate governance,
it also provides employees with a process to raise any
suspected wrong doings, misconduct or illegal acts that
they have witnessed or become aware of. This reconfirms
the Group commitment to promoting the highest possible
standards of openness, integrity and accountability across
the business.
Further details can be found in our ESG Strategy
(f) The need to act fairly as between
members of the Group
The Group’s Board currently consists of three Non-Executive
Directors, and two Executive Directors. The Board seeks
to collectively have an appropriate balance of skills and
experience, as well as an appropriate balance of personal
qualities and capabilities to ensure that all decisions are
made, such that the impact toward the stakeholders is fair
and equal, so they too may benefit from the successful
delivery of our plan.
Further details can be found in our Corporate Governance
Statement
Section 172(1) Statement
Continued
13
2022 Annual Report & Accounts | STRATEGIC REPORT
Our Vision
Our vision is to become a leading international freight
management and logistics provider through tailored world
class customer service.
Our Mission
To shape the future of our client’s supply chains via the
deployment of digital technology and enhanced service
solutions, resulting in the delivery of excellence in everything
we do.
Shaping the Future. Delivering Excellence
Our Core Values
We are one team
We work in harmony to achieve our common goals and are
committed to each other’s well-being and success. Within a
culture of partnership, mutual respect, and integrity, working
together is part of everything we do - One Team. One Vision.
Working together successfully means everyone has a voice
and the recognition of our different qualities and skills are
used as a source of inspiration every day.
Our one team ethos is the backbone of our culture and
philosophy and underpins our desire to be the best version
of ourselves.
We are passionate
Our passion is rooted in a desire to deliver best in class
services for our customers.
Our drive and energy are contagious, supporting and
inspiring each other to fulfil our promises.
Our collective passion is a testimony to our engagement and
dedication in all we do and how we help each other and our
customers. With controlled and measured passion we seek
to be the best we can be and commit to it.
We deliver value
We constantly strive to redefine the standard of excellence
in everything we do.
Whether we are providing support to our employees or
delivering services to a client, we deliver lasting quality in
every action.
By consistently delivering value we exceed expectations and
build our reputation as a service provider of choice. We work
alongside our customers, to grow with them and to create
long-term solutions and success.
Vision & Values
14
Xpediator plc | Annual report 2022
Our evolving ESG Strategy is closely aligned to the Group’s
business strategy.
By being a responsible business, the Group has confidence in
a sustainable and value generating business model.
We understand the importance of being an environmentally
conscious Group and are taking steps to reduce the carbon
emissions arising from our activities.
Environmental
We are committed to minimising the impact of our activities
on the environment.
Our goals include:
•
Reducing waste
•
LED lighting installation
•
Expansion of renewable energy procurement (Solar or
Green energy)
•
Fleet replacements made with most energy efficient
vehicles.
•
Expansion of “green fuel” (e.g., HVO) use within own and
subcontracted vehicles and fleets.
•
Structured and visible review of vehicle telematics to
review areas of improvement.
•
Target zero-emission mechanical handling equipment
fleet company-wide by 2026.
Social
Xpediator is committed to ensuring a safe and inclusive work
environment for all employees. External activities include
supporting charitable organisations and communities on a
local and global scale.
Our goals include:
•
Providing a safe, inclusive and inspiring environment for
all employees
•
Developing the skills of employees through training
initiatives
•
Becoming an employer of choice
•
Supporting local charities and communities
Governance
We will continue to conduct our business activities responsibly
and ethically on behalf of our stakeholders including
employees, shareholders, suppliers and customers.
Our goals include:
•
Value creation through maintaining and developing good
corporate governance.
•
Sustainable and continuous improvement
•
Benchmarking performance against appropriate industry
standards
•
Maximising the ability for our people to engage in shaping
and delivering our ESG activities
ESG KPI’s
Our ESG Commitment
Social
over 2500
Training
hours
19 UK
apprentices
c20
wellbeing
activities
Governance
No Modern
slavery
incidents
UK
operations
full H&S
audits
completed
1 Whistle-
blowing case
reported &
resolved
Environmental
Carbon 8,900
tco2e
Carbon
intensity 22.48
tco2e / £m
Carbon
intensity 5.75
tco2e / FTE
64% of waste
recycled
15
2022 Annual Report & Accounts | STRATEGIC REPORT
Our carbon emissions information is prepared with reference to the Greenhouse Gas Protocol Corporate Accounting and
Reporting Standard for operational control. Carbon factors used are as per Defra conversion factors for company reporting
2022, with both electricity generation and distribution emissions included as scope 2 emissions.
Energy Use table
Energy Use (MwH)
2022
2021
2020
Scope 1 - Transport
30,392.77
13,464.10
13,324.03
Scope 1 - Non-Transport
3,963.03
3,039.56
2,647.20
Scope 2 - Electricity
3,485.46
3,675.43
3,145.91
Total Energy (MwH)
37,841.27
20,179.09
19,117.14
Carbon Emissions (tCo2E)
2022
2021
2020
Scope 1 - Transport
7,336.02
3,192.06
3,201.22
Scope 1 - Non-Transport
890.78
657.75
582.48
Scope 2 - electricity
674.02
780.40
804.09
Total Emissions
8,900.82
4,630.22
4,587.80
Carbon emissions ratios
Area
Ratio
2022
2021
2020
Revenue
Carbon Intensity tCo2e /£m
22.48
15.61
20.74
Employee
Carbon Intensity tCo2e / FTE
5.75
3.23
4.25
During 2022 we moved a significant proportion of haulage operations previously outsourced to third party haulage contractors
in-house in our Lithuania and Bulgarian operations. This represented the purchase and operation of HGV’s in Lithuania and
Bulgaria. These emissions have now been moved from scope 3 (not reported) to scope 1 – controlled transport. On a like for like
basis our adjusted carbon intensity for 2022 would have showed a net reduction the Carbon Intensity tCo2e /£m to 11.71 and
Carbon Intensity tCo2e / FTE to 3.00 without the switch to controlled transport.
The positive benefits of moving to our own fleet is the ability to influence the carbon emission of the vehicles. We only procure
the most modern and economic EURO 6 compliant vehicles and have introduced the addition of Hydrotreated vegetable oil
(HVO - as discussed in the HVO case study).
We record and publish energy and fuel use for managed supplies, which includes all supplies that are managed at sites wholly
operated by our teams.
The sources of emissions include road transport fuels; fuels for non-road transport uses; energy utilities for buildings; and fuel for
business travel in Xpediator-driven vehicles. Energy figures are provided on the same scope 1 and 2 basis as carbon emissions.
We also include consumption of fluorinated refrigerant gases as a scope 1 emission and have not excluded purposely any scope
1 and 2 emissions sources regardless of materiality.
Due to our ever-changing operations we use a carbon intensity measure to manage our carbon efficiency. Our carbon intensity
is defined as total scope 1 and 2 carbon emissions from managed supplies per unit of revenue and by employee (FTE), and our
carbon intensity ratio for the year ended 31 December 2022 was 22.48 tonnes of carbon dioxide equivalent (tCO2e) per £m of
revenue and 5.75 tonnes of carbon dioxide equivalent (tCO2e) per employee.
As a growing international logistics operation, we remain fully committed to play our part in the collective efforts needed to
achieve a low carbon future.
As a Group we continue to listen to the experts and champion our customer needs as we start to help transform the way we all
live, work and move through the decarbonising of power, heat, and transport.
Energy efficient property management
We are planning further investments in our remaining LED lighting opportunities; exploring further electrification of mechanical
handling equipment including lithium-ion fuel cells; and reviewing further installations of solar photovoltaic generating
capacity where feasible.
Environmental
Xpediator plc | Annual report 2022
16
Waste reduction
A full review of the waste strategy will be conducted to ensure that we have the best single stream waste solutions for the
business to ensure the maximum efficiency in recycling and a reduction in our waste to landfill.
Recycling
Tonnes
2022
2021
2020
Volume of waste recycled per annum
545.16
873.17
673.81
Volume of waste sent to landfill per annum
312.36
408.10
356.00
Total
857.51
1,281.26
1,029.81
Recycling %
64%
68%
65%
During the year three of our sites reported 100% recycling activities from their operations.
We will be reviewing our 2023 targets with the objective to increase our diversion from landfill to over 70%.
Our customers
With a clear symbiosis between ourselves and the carbon emissions coming from our customers, the biggest thing we can do to
tackle climate change is to help them. That is why we have focused our efforts towards providing services and logistics solutions
that will help our customers work sustainably and affordably.
•
Pallex Romania consolidates multiple customers onto single transports to avoid the use of multiple vehicles and reduce the
combined emissions otherwise associated
•
We conduct stakeholder interviews to understand the needs, culture, and aspirations of our customers to align and improve
outcomes.
Hydrotreated vegetable oil (HVO) case study – Lithuania and Bulgaria
What is HVO fuel?
HVO stands for hydrotreated vegetable oil, sometimes known as Renewable Diesel. Part of the paraffinic family of fuels, it is a
fossil-free alternative to mineral diesel, resulting in up to 90% reduction in Greenhouse Gas emissions
During the year our core fleet in Lithuania and Bulgaria began utilising HVO
Benefits of HVO renewable diesel
Cleaner, sustainable fuel
•
Results in up to 90% reduction in GHG emissions compared to fossil diesel.
•
Local air quality benefits - significantly lower particulate matter, NOx and unburnt hydrocarbons
•
Produced from 100% renewable sources, as certified by international accreditation schemes
•
Odourless and virtually free from sulphur and aromatics
Outstanding performance
•
Higher cetane number than EN590 diesel = efficient and clean combustion
•
Exceptional cold weather performance. Better start-up and throttle response
•
Excellent storage properties. HVO is FAME-free = does not affect water or microbial growth
Switching made simple.
•
Drop-in replacement for diesel or gas oil in engines
•
Meets EN15940 paraffinic fuels standard, approved by a wide range of OEMs as a replacement for use in diesel engines
without modification
Environmental
Continued
17
2022 Annual Report & Accounts | STRATEGIC REPORT
Social
Compassionate Leadership Academy
In 2022 we launched our Group-wide Compassionate
Leadership Academy (CLA), an accredited leadership
development programme.
The principle of the CLA digital course and platform is to create
a truly inclusive development programme that respects and
understands our diverse background and creates an equal
development opportunity.
To support our value of being One Team, we are delighted
to offer the programme fully translated into Romanian,
Lithuanian and Bulgarian to show our commitment to
creating a common culture and consistent application of
leadership across all of our businesses within the Xpediator
Group, where everyone has a positive experience of working
for the Group.
The CLA has been designed for individuals to gain greater
self-awareness and emotional intelligence to understand
what makes them who they are today, as well as give them
the tools to become a great leader, including effective
communication and delegation, motivating and coaching
teams and decision making.
This unique development course will help create and support
a coherent cultural change to compassionate leadership,
truly becoming one team.
Supporting communities and charities
As a Group it is incredibly important to us to support local
causes and wider communities.
As a corporate partner, we are also delighted to be
supporters of Transaid since 2019, an international charity
who transforms lives through safe, available and sustainable
transport.
Across 35 organisations, Xpediator contributes time, expertise
and resources to help Transaid implement professional driver
training programmes, transport management systems and
provide rural access to transport in Sub-Saharan Africa.
Supporting the wellbeing of our colleagues
We have continued to focus on creating a supportive
environment at Xpediator.
Our initiatives support our colleagues and this year we
have continued our UK wellbeing committee. Our dedicated
wellbeing team has built a community throughout the year
to provide support, advice and ideas for our colleagues to
help them learn about, manage and enhance their health
and wellbeing. We have supplemented this support through
our colleague app, iSmile, which facilitates our direct
communication with all colleagues.
•
Currently, there are 10 members of the team strategically
placed across different UK business units.
•
We operate as one team advertising and educating on
matters current and relevant to peoples working and
home lives.
•
From initiation of the group we have launched and
successfully delivered
–
a
wellbeing
week
consisting
of
photograph
competition, a walk, run, jog competition run across all
the UK business units,
–
run various competitions such as Halloween fancy
dress for charity where proceeds were matched by
the business to support Movember,
–
Christmas jumper day to raise proceeds for Save the
Children UK.
•
We have launched the Employee Assistance Program
App to all our UK employees giving them instant access to
support, podcasts, challenges and counsellors at the tip
of their fingers.
•
During the first half of 2023, the focus will be on women’s
health covering the menopause with an introduction of
a policy within the business, access to online training for
employees and managers and the introduction of an app
to support and track symptoms through the menopause.
Other Wellbeing events have been hosted across the group,
all with positive feedback and strong employee engagement.
•
Happy Friday’s (Romania)
•
Monthly employee birthday celebrations (Romania)
•
Secret Santa & X-mas party (Romania/Bulgaria)
•
The Colour Run Marathon (Romania)
•
Provision of Private personal health insurance (Bulgaria)
•
Assistance with transportation costs (Bulgaria)
•
Multiple
Team
building
events
(Romania/Bulgaria/
Lithuania/Estonia).
Training and development
Our Commitment to training and development in the year can
be highted via the following statistics.
•
19 employees on UK apprenticeship scheme
•
Over 2500 of training hours logged in the learning
management database
•
Over 90 participants in Excel training
•
Over 40 participants in English language training
18
Fundamentally, as a Group we are committed to building
a sustainable, fast-growing business, which generates
employee and stakeholder value, whilst ensuring that we
achieve this in a sustainable, environmentally friendly, and
socially responsible manner.
Our strategy, systems and processes are guided and
managed within a defined corporate governance model, with
regulatory compliance as a baseline of all our activities.
We strive for continuous improvement and the review of our
approach to operating a sustainable and environmental
concise business is ongoing.
Our experienced management team are focused on the
identification of associated environmental and social risks and
opportunities, ensuring we are true to our word in delivering
excellence in everything we do.
•
A trusted board who are accountable for delivering a
successful ESG Strategy
•
Continuous improvement and striving for excellence.
•
Development of transparent reporting processes
Our governance position has been further strengthened
through revised policies and associated compliance training and
awareness sessions run throughout the business, for example
modern slavery; GDPR; IT acceptable use; and Speaking Up.
Employee Company Handbook
The company handbook outlines the practices and procedures
the Group expects employees to follow.
Employee Code of Conduct
The Group expects the highest ethical standards from
employees and other personnel in carrying out its business.
The document provides employees with guidance on the
standards expected when conducting business on behalf of
the group.
•
Sets out what we stand for as a company.
•
Underpinned
by
a
robust
corporate
governance
framework.
•
Applied across the Group wherever we work.
Anti-Bribery Policy
This policy outlines the Group’s commitment and expectation
to prevent all risks related to bribery and corruption.
•
Zero tolerance policy
•
Mandatory e-learning training module
•
Gifts and hospitality approval process and register
Whistleblowing Policy and process
•
Whistleblowing is the right thing to do.
•
Relaunched policy in the year
•
Mandatory e-learning training module
Modern Slavery
•
Modern slavery statement is on our website.
Data Protection
•
Personal data is only collected and processed and stored
in line with our Company policies and legal requirements.
Governance
Xpediator plc | Annual report 2022
19
2022 Annual Report & Accounts | STRATEGIC REPORT
The Group has a formal risk identification and management process. This ensures that risks are properly identified, prioritised,
evaluated, and mitigated, in order that the Group can achieve its strategic objectives and enjoy long‑term success.
The success of the Group depends on its ability to understand and mitigate the risks facing the business.
The Board has overall responsibility for risk management, for determining the risk appetite, for implementation of the risk
management policy and for reviewing effectiveness of the risk management systems.
Risk identification
Principal risks and uncertainties
The Group maintains a register of Group (or principal) risks and uncertainties which are identified as either: financial; reputational;
operational; legal/compliance; or strategic risk types. The Group’s risk management framework is structured to ensure that risks
are identified promptly by management teams so that they are mitigated and managed appropriately. The risks identified are
documented and measured, including the ownership of individual risks.
The risks are regularly reviewed, and exposure is rated in terms of both inherent risk (before mitigations) and current risk
(after mitigations). Risks are allocated a required residual score (target) along with control and mitigation improvement road
maps. These are monitored at regular intervals and allocated timeframes between 6 and 12 months to ensure risk reduction
trajectories are continually reviewed.
The Board has overall responsibility for risk management, for determining the risk appetite in relation to the risk types, for
implementation of the risk management policy and for reviewing effectiveness of the risk management systems.
Risk appetite
The Group is prepared to accept a certain level of risk to remain competitive but continues to adopt a balanced approach to risk
management. The risk framework provides clarity in determining the risks faced and the level of risk that the board will accept.
The Group’s strategies are designed to either reduce, transfer or remove the source of the identified risk.
There are well-established procedures to identify, monitor and manage risk and, within the internal control framework. In the
last 12 months a programme to review and update policies and procedures has been formalised and processes initiated to
ensure these remain fit for purpose on an ongoing basis or as required by external changes (regulatory and other external
factors)
Conclusion
By following the risk management processes outlined above, the Board considers it has performed a robust assessment of
principal and emerging risks.
Management of risks
The Group manages risk by operating a three lines of defence risk and control model.
The first line of defence consists of operational management implementing and maintaining effective risk identification, reporting,
management and internal control systems. This ensures that risk management remains an integral part of the Group’s day-to-
day operations and facilitates the escalation of significant risks as and when they are identified.
Identify risk
Identify key risks
by category
Rate risk
Rate each risk
by evaluating
and assigning
a score to
each risk
Identify risk
mitigation
Identify actions
for each risk
Execute risk
mitigation
Execute agreed
risk mitigation
and proceed
improvements
identified
Review,
monitor and
report risk
management
process
Review and
monitor risk
management
process.
Report to Board
Risks & Uncertainties
Xpediator plc | Annual report 2022
20
The second line of defence consists of the subject matter expert functions which, in addition to supporting operational
management in their own specialist areas, also maintain their own risk registers. The second line also includes the Director of
Audit Risk and Compliance who regularly reviews the Group risks and other strategic risks affecting the Group and perform deep
dive reviews on specific risk areas.
Internal Audit, which forms the third line of defence, is empowered to provide an independent assessment of the effectiveness of
risk management and internal control systems. The Audit Plan has been built with input from the Group risk registers. The audit
assignments planned for the coming year include providing assurance on a number of Group risk types. The Internal Audit function
reports directly to the Audit Committee Chair to ensure its independence and objectivity. These lines of defence also include the
Group’s whistleblowing reporting system, which enables employees to raise concerns over ethics and compliance matters.
Three Lines of Defence (“LOD”) diagram
Xpediator Three Lines of Defence (LOD)
First Line of Defence - Management controls
Internal controls
Policies and procedures
Third Line of Defence - Internal Audit
Annual Audit Plan
Second Line of Defence - Risk management and assurance
Risk management
Assurance routines
Executive Directors
Plc Board / Audit Committee
Risks & Uncertainties
Continued
21
2022 Annual Report & Accounts | STRATEGIC REPORT
The Group has identified the following principal risks through its risk management process:
Key business risks currently facing the Group are addressed below:
Risk Title
Regulation and Legislation
Cyber security
Trend
Static
Increasing
Risk Description
The Group must comply with a range of regulations
and legislation in order to provide its services. Failure to
comply with the required standards could result in legal
claims and /or regulatory actions, sanctions, removal of
licences and permits, penalties and fines. It could also
result in reputational damage to the Group.
Major Cyber-crime incident leading to a loss of
revenue or long-term reputational issues where
Xpediator receives a denial of service attack,
Spoofing, Ransomware, unauthorised access to
Xpediator systems, monetary fraud issues.
Mitigating Controls
Policies and processes are in place throughout all
areas/geographies of the Group to ensure compliance
with relevant areas of legislation. Emerging legislation is
monitored for any potential impact to the Group. Policies,
controls, communications, and training provisions are
adjusted as required. External expert advice is sought
as appropriate.
The Group function regularly reviews the cyber risk
landscape internally. Xpediator has established
layered proactive and reactive information security
controls to mitigate common threats. Disaster
recovery plans are in place for Critical Services to
ensure business can recover from any interruptions
with minimal impact. Cyber insurance is in place.
Owner
Chief Financial Officer
IT Director
Manager
Director of Audit, Risk and Compliance
IT Infrastructure & Service Delivery Director
Risk Title
Dependence on Key Suppliers
Recruitment and retention
Trend
Static
Increasing
Risk Description
Certain Group business units are reliant on key strategic
supply partners across all key locations. Any event which
leads to the sudden loss or deterioration of a strategic
supplier relationship could adversely affect the Group’s
performance prospects, results of operations and/or
financial condition.
Inability to recruit and retain employees, from
warehouse
operatives
to
executive
talent,
is
considered a principal risk. Failure to retain people
with the right skills, competencies, values and
behaviours needed to operate and grow the business
would impact the long-term success of the Group.
Mitigating Controls
The Group has developed strong and successful
relationships with key strategic supply partners. These
relationships are supported by long term contracts,
regular senior operational manager interactions where
any issues are discussed. The Group CEO/CFO has open
dialogue with the key supplier’s senior management to
ensure any issues are resolved in a timely fashion.
The Group’s human resources function monitors
and maintains a high standard of recruitment and
a regular appraisal process. The Group constantly
reviews and refreshes strategies and processes for
recruitment and retention, monitoring vacancies
and future requirements. The Group has also
established relationships with preferred agencies
to provide additional contingency workforce. Talent
and development is monitored and supported to
ensure people at all levels have access to training
programmes and development opportunities. The
Group regularly benchmarks remuneration levels
against other employers in the respective region to
ensure it is paying the market rates. This process
is carried out annually and as part of any new
recruitment. The Group reviews employee turnover
and conducts exit interviews as required.
Owner
Chief Executive Officer
Chief Executive Officer
Manager
Business Unit Managing Directors
Head of People
Risks & Uncertainties
Continued
Xpediator plc | Annual report 2022
22
Risk Title
Competition in key market sectors
Forex
Trend
Increasing
Increasing
Risk Description
The Group provides services in a competitive and
complex environment. The Group faces commercial
pressures to maintain volumes and market share
acceptable to all stakeholders and in line with the
strategic vision of the Group. These pressures may stem
from strategic or behavioural changes in the competition
and new disruptors, in particular the emergence of new
technologies.
The Group reports its results in sterling but operates
in areas where the functional currency is non-sterling,
as such it has exposure to foreign exchange risk.
Certain liabilities, principally right-of-use assets and
borrowings, are denominated in foreign currencies,
which are retranslated at the prevailing exchange
rate at the balance sheet date.
Mitigating Controls
The Group strives to maintain its market position
across all divisions by ensuring high service levels for
all its clients. The Group also seeks to offer proactive
and innovative solutions to the market. The Group
has identified competitors for each area of business
and management regularly monitor their activity to
ensure they are fully aware of their development and
any strategic plans which may impact on the Group’s
activity. The Board and Business Unit managing
Directors closely monitors the Group’s strategic and
operational performance through its KPIs.
Currently the Group has not entered into any
exchange rate hedging mechanisms but looks to
mitigate exchange losses internally by matching the
revenue and cost base in the same currency as far
as possible. The position is monitored regularly to
ensure that the Group achieves its optimal position
with regards any exchange losses.
Owner
Chief Executive Officer
Chief Financial officer
Manager
Business Unit Managing Directors
Director of UK Operational Finance
Risk Title
Liquidity
Interest rate
Trend
Decreasing
Increasing
Risk Description
The Group has sufficient liquid resources to meet the
operating needs of the business as per its current
forecasts. Any changes to the profitability of the
business may impact the sufficiency of the Group’s
liquid resources.
There is a risk that interest rates and resultant costs
to the Group will fluctuate over time. Assets financed
through leases are leased at fixed interest rates.
Borrowing rates are dependent on Libor / Euribor
fluctuations. The long-term debt of the Group is
denominated in sterling and is based on a blend
of fixed rate and margin above base, which currently
has a blended average rate of approximately
4% per annum.
Mitigating Controls
The Group continually assesses its cash requirements by
undertaking regular and frequent reviews of cash flow
forecasts. These are reviewed by the Board to monitor any
changes to the funding requirements. The Group believes
that currently it has sufficient working capital and funds
available to meet its strategy and growth plans.
The Group constantly monitors its borrowings to
see if there is a suitable hedging product which
will mitigate any interest rate rises. For any new
borrowings, the Group will seek a suitable hedging
facility, if appropriate.
Owner
Chief Financial Officer
Chief Financial Officer
Manager
Director of UK Operational Finance
Director of UK Operational Finance
Risks & Uncertainties
Continued
23
2022 Annual Report & Accounts | STRATEGIC REPORT
Risk Title
Health and Safety (Including Pandemics)
Climate
Trend
Static
Increasing
Risk Description
The Group operates in environments which have the
potential to be hazardous to people, property, and the
environment if not actively managed. A failure to monitor
or manage health and safety risks appropriately could
result in significant penalties, reputational damage
and/or legal liabilities.
Post Covid-19 there remains risk of other global
pandemics which include risks to the Group’s operations
including labour shortages, increased regulatory or
safety requirements, loss of revenue and profit due to
business interruption, reductions in customer volumes or
customer failure and liquidity pressures and availability
of financing.
Climate change and the resulting frequency and
impact of associated physical risks could impact
the Group financially and reputationally. These risks
include:
- extreme weather conditions impacting service
provisions.
- stakeholder reactions resulting in loss of customers,
availability of funding and shareholder support.
- market place obsolescence from poor response to
climate risks; and
- increased taxation and fuel duties increasing the
Group’s cost base
Physical climate risks – flooding, infrastructure and
subsequent disruption to systems, service, and supply
chain
Transition risks – changing policy and regulations
Mitigating Controls
The Group has a dedicated Health and Safety team,
supported by external advisors, that ensures policies,
processes and legal requirements are met by all
operating segments. The Health and Safety team
report to the CEO and Plc Board around health and
safety compliance. Regular training is provided to all
staff across all operating segments.
Business continuity and emergency response plans are
in place across all areas of the business. These plans
are mobilised as the situation evolves and include:
- the introduction of required health and safety policies
and processes.
- close dialogue with key customers
- expense control and monitoring, and
- remote workforce provisions
The Group has been developing risk management
strategies for associated climate risks and will be
continue to incorporate these in the Group’s ESG
strategy
Owner
Chief Executive Officer
Chief Executive Officer
Manager
Director of Audit, Risk and Compliance
Director of Audit, Risk and Compliance
Risk Title
EU conflict
ESG requirements
Trend
Decreasing
Increasing
Risk Description
The risk of Group operations being impacted resulting in
a loss of revenue and/or profitability due to the current
conflict in Ukraine
Risk of allocating insufficient resources to ESG could
result in reduced support from stakeholders such
as investors and customers, who may switch to
competitors.
Mitigating Controls
The situation in eastern Europe is evolving at a rapid
pace
and
our
operational
management
teams
are assessing the situation daily and are adjusting
operations as and when required, with working groups
formed in the EU for more closely impacted countries.
The Operating Board and Plc Board are assessing
the situation on a regular basis and risk management
assistance has been rolled out to document, assess
and monitor the risks, whilst also reviewing additional
controls and mitigations that could be implemented.
The Group regularly reviews its ESG agenda with
specific focus from the Plc Board. An ESG Steering
Committee has been created with regular Board
oversight. The Steering Committee is currently in the
process of defining internal targets for ESG.
Owner
Chief Executive Officer
Chief Executive Officer
Manager
Business Unit Managing Directors
Director of Audit, Risk and Compliance
Risks & Uncertainties
Continued
Xpediator plc | Annual report 2022
24
Risk Title
Consumer confidence
Failure to apply financial controls
Trend
Increasing
Static
Risk Description
With the current cost of living increases due to utility
price volatility and inflationary increases, the Group’s
customers may experience a reduction in demand for
products and that may impact operational volumes,
revenue and profitability.
Failure to apply financial controls in line with Group
procedures, accounting standards and customer
contracts.
Mitigating Controls
The Group continues to monitor forecasts with key
suppliers to understand their requirements. Volumes
and KPIs are reviewed monthly to understand the
external environment. Cost bases are reviewed to
ensure they match operating demand.
The group operates a Delegation of Authority matrix
and Financial policies and procedures are operated
and reviewed periodically.
Assurance routines are enacted by Finance teams.
Budgeting process and reviews are undertaken
regularly.
Finance staff qualifications and CPD are reviewed
periodically.
External / Internal auditor findings are actioned.
Owner
Chief Executive Officer
Chief Financial Officer
Manager
Business Unit Managing Directors
Group Financial Controller
Risk Title
Data Protection
Trend
Static
Risk Description
Failure to manage data in accordance with the data
protection principles and identify processing undertaken
outside the UK & EU and failure to ensure appropriate
security and contractual measures are in place to
protect against non-compliance with DP legislation
Failure to ensure our suppliers pass on relevant
restrictive clauses to their sub-contractors leading
to non-compliance with DP legislation and potential
increased financial liability to Xpediator
Failure to appropriately train colleagues to understand
their responsibilities within data protection legislation
Mitigating Controls
The Group maintains and updates our data protection
policy and processes on a regular basis.
Staff training is actioned and monitored to ensure
suitable role-based knowledge is in place across the
group.
Owner
Chief Executive Officer
Manager
IT Director
Risks & Uncertainties
Continued
25
2022 Annual Report & Accounts | GOVERNANCE
Board of Directors
Gillian Wilmot CBE
Interim Non-executive Chairman
(aged 63)
Michael (“Mike”) Stone
Interim Chief Executive Officer
(aged 62)
Gillian joined the Board in June 2022 as Interim
Non-executive Chairman. Gillian is an experienced
Chairman following an executive career as a
Marketing Director then CEO. Gillian brings a wealth
of experience across B2B, digital technology and
transformation with particular strengths in value
creation, operational insight and governance. She was
awarded a CBE in Jan 2023 for her contributions to
business, entrepreneurship and the prevention of
problem gambling and been a winner of the Sunday
Times Non-Executive Director Awards. Current
directorships include Chairman of ZOO Digital Group
plc, Synalogik and Jisp.
Mike joined the board in June 2022, as Interim CEO.
with over 35 years of experience in senior logistics
roles globally.
Mike is a highly experienced executive within the
international logistics industry with over 35 years’
experience working with logistics companies both
domestically and internationally. Currently serving
as Non-Executive Director of Bpost SA (Belgium Post
Group), the publicly listed postal service for Belgium,
Mike has also served as Managing Director for
Quadient’s (formerly called Neopost) UK operations,
Chief Operating Officer of DX Group, and prior to that,
in senior European and global management positions
with DHL including Managing Director of Operations
for DHL Express Europe.
Xpediator plc | Annual report 2022
26
Richard Myson
Chief Financial Officer
(aged 51)
Robert (Rob) James Riddleston
Non-executive Director
(aged 68)
Charles McGurin
Non-executive Director
(aged 57)
Richard rejoined the board in
June
2022
having
previously
served as Group CFO between
2016 and 2018, overseeing the
successful IPO of the Company. He
originally joined the finance team
of the Group in 2004 and in 2010
became Group CFO of Delamode
International
Logistics
Limited.
Richard’s roles were not limited
to finance, and in 2012, Richard
was appointed as Chief Executive
Officer of Affinity, which remains a
key division of the Group.
Rob joined the Board of Xpediator
in June 2018 having spent 45 years
with Barclays as a Senior Corporate
Banker.
Rob
has
extensive
experience of the logistics sector
as Head of Transport & Logistic
at Barclays from 2005‑18. Rob
is an associate of the Chartered
Institute of Bankers and Fellow
of the Institute of Logistics and
Transport.
Rob
authored
the
Barclays Logistics Confidence Index
from 2012 to 2017.
Charles
joined
the
Board
in
November 2018 bringing extensive
experience in the international
supply chain sector. Charles most
recent role was CEO of global
logistics
organisation,
Allport
Cargo Services Group. Prior to
this, Charles spent 10 years with
DHL in a variety of roles, latterly
as
Vice
President,
Business
Development EMEA.
Board of Directors
Continued
27
2022 Annual Report & Accounts | GOVERNANCE
The Board recognises the importance of maintaining and developing good corporate
governance throughout the Group for the wider benefit of the Group, its shareholders,
employees, customers, suppliers and applies the governance principles of the UK’s Quoted
Companies Alliance Corporate Governance Code (“QCA” Code), which is tailored for small and
mid-sized quoted companies.
The QCA Code is constructed around ten broad principles
and a set of disclosures. The QCA has stated what it considers
to be appropriate arrangements for growing companies and
asks companies to provide an explanation about how they
are meeting the principles through the prescribed disclosures.
The Group has considered how each principle is applied within
the business and the appropriateness of each approach.
Below is an explanation of the approaches taken in relation
to each principle.
Principle One
Establish a strategy and business model which promote
long-term value for shareholders
The Group’s strategy and business model and amendments
thereto, are developed by the Executive Directors and the
senior management team and approved by the Board. The
senior management team, led by the CEO, is responsible for
implementing the strategy and managing the business at an
operational level.
In order to deliver the optimal medium and long term value
for its shareholders, the Board has adopted a strategy of
continued organic growth across each of its business areas,
together with the acquisition of strategically enhancing
businesses which will complement the Group’s existing
operations in terms of new service offerings, capacity and/ or
geographic expansion.
Operating in a large, diverse yet fragmented sector, there
are many opportunities for organic growth and M&A activity.
Acquisitions should strategically enhance the Group’s ability
to offer a one stop solution to an ever-increasing customer
base whilst also providing cross-selling opportunities,
potential cost synergies and additional internal resources,
thereby providing an improved service to our clients.
The Group’s ability to execute its strategy is highly dependent
on the skills and abilities of its people. We undertake ongoing
initiatives to foster good employee engagement and ensure
that remuneration packages are competitive in the market.
The Board believes the Group has the right strategy in place
to deliver strong growth in profitability over the medium to
long term, which, notwithstanding the potential acquisition
of the Group, will enable the Group to deliver sustainable
shareholder value.
Principle Two
Seek to understand and meet shareholder needs and
expectations
The Board is committed to maintaining a regular dialogue
with both existing and potential new shareholders in order
to communicate the Group’s strategy, progress and to
understand the needs and expectations of shareholders.
The CEO and CFO are principally responsible for shareholder
liaison and have regular dialogue with institutional investors in
order to develop an understanding of their views. The Group’s
investor relations activities encompass dialogue with both
institutional and private investors. Meetings are held with
analysts, investors and institutional shareholders of the Group
following the interim and annual results announcements
as well as on an ad hoc basis (where requested by fund
managers).
These presentations are given by the CEO and the CFO,
updating on relevant matters and, in particular, on the
progress of the Group in terms of its operational performance,
financial performance and strategic direction. The Group also
endeavors to maintain a dialogue and keep shareholders
informed through its public announcements and its corporate
website, www.xpediator.com
The Group’s Annual Report as well as investor presentations
are available on this website. The Annual General Meeting
(“AGM”) of the Group, normally attended by all Directors, gives
the Directors the opportunity to report to shareholders on
current and proposed operations and enables shareholders
to express their views of the Group’s business activities.
Shareholders are encouraged to attend and are invited to
ask questions during the meeting and to meet with Directors
after the formal proceedings have ended.
The Group engages Zeus Capital Limited, as Nominated
Adviser (“NOMAD”), to publish comprehensive research
notes on the performance of the business, these reports are
available to shareholders on the Group website.
In addition, shareholder communication is answered, where
appropriate, by the Directors or the Group’s Financial PR
advisors
The AGM is the main forum where all investors can meet with
the Board but gives the retail investors a platform to discuss
any matters they have.
Corporate Governance Statement
Xpediator plc | Annual report 2022
28
Advance notice of the AGM is made available to all
shareholders no later than 21 days before the meeting. All
members of the Board normally attend the AGM and are
available to answer any questions raised by shareholders. The
AGM for 2022 was held on the 9 June 2022, although this
was held virtually due to the ongoing Covid-19 restrictions.
The Board proactively seeks to build relationships with all
institutional shareholders with regular presentations being
given by the CEO and CFO following the release of the full-
year and half-year results.
Also, the Board is in regular contact with the analysts to
ensure any announcements or trading updates are reflected
in the market expectations. The CEO and CFO conducted
virtual meetings with institutional investors in April and
September 2022 in relation to the above.
The Board is kept updated as to any concerns the investors
may have by regular communication with the Group’s
NOMAD and joint brokers. All publicity concerning the Group
is circulated by the Group’s PR company Novella to ensure the
Board is up to date with the public impression of the Group.
The Board is available to meet with all major shareholders if
required to discuss issues of importance to them.
To request a meeting with the Board, please contact
info@xpediator.com
Further details can be found in the section 172 report on
pages 11 to 12.
Principle Three
Take into account wider stakeholder and social responsibilities
and their implications for long-term success.
The Board recognises that the success of the Group is reliant
on the stakeholders of the business and, to this effect, the
Group engages with these stakeholder groups on a regular
basis.
The Board recognises its responsibility under UK corporate
law to promote the success of the Group for the benefit of
its members as a whole. The Board also understands that it
has a responsibility towards employees, partners, suppliers,
contractors and the local communities in which it operates.
The Group has close ongoing relationships with a broad range
of its stakeholders and provides them with the opportunity to
raise issues and provide feedback to the Group.
Aside from the regular meetings with investors, the Group
also engages regularly with its suppliers and customers, and
employees. The Board considers the employees as one of the
key stakeholders within the Group and as such welcomes any
feedback to ensure the alignment of both party’s interests.
This feedback can be provided by the use of on-site suggestion
boxes for internal stakeholders, employee committee forums,
and access to members of the Board, details on whom are
set out at https://xpediator.com/board-of-directors and
available on +44(0) 330 043 2395.
During the year the Operational Board and Senior
management has met with the key suppliers and clients on
numerous occasions. This is to ensure the ongoing relations
are maintained and developed ensuring the success of the
Group’s strategy.
The Group initiated an employee survey giving employees
the opportunity to provide feedback to the Group. This would
measure employee engagement, and thus how productive
our people are and how engaged they are in their job. It
would give employees a voice allowing them to provide open
feedback.
The Group survey will play a role in making employees feel part
of the enlarged Group, supporting our integration aspirations.
As part of our Group’s procurement policy it ensures all
suppliers adhere to the Group’s Anti-Bribery and Corruption
policy as well as its policy on modern slavery, which is available
on the Group’s website https://xpediator.com/corporate-
social-responsibility/modern-slavery-policy.
Further details in the section 172 report can be found on
pages 11 to 12.
Principle Four
Embed
effective
risk
management,
considering
both
opportunities and threats, throughout the organization.
The Board has overall responsibility for ensuring risk is
appropriately managed across the business. The Board sets
clear strategic objectives for the business. The risks to the
achievement of those objectives are identified by corporate
and divisional management. The audit committee provides
further independent review and robust challenge.
The Board is satisfied with the effectiveness of the system of
internal controls but, by their very nature, these procedures
can provide reasonable, not absolute, assurance against
material misstatement or loss.
This is particularly the case when integrating the operational
and financial procedures of acquired businesses. Identified
risks are evaluated, both before and after controls and
mitigating actions have been applied, as to their likelihood
of occurring and potential financial and reputational impact.
Risks are treated in accordance with risk appetite, which has
been defined by the Board across a range of risk categories.
The Group has initiated a formal structure for the internal audit
function that includes the targeting of certain key areas by the
Internal Audit function as well as the subsequent reporting
of their findings back to the Audit Committee. Through the
activities of the Audit Committee, the effectiveness of the
Group’s internal controls as well as the Group’s risk strategy is
reviewed annually with the Group’s auditors.
Corporate Governance Statement
Continued
29
2022 Annual Report & Accounts | GOVERNANCE
The success of the Group depends on its ability to mitigate
and understand the risks facing the business and take
appropriate action. The Board meets at least quarterly to
evaluate the Group’s risk appetite and ensure the risk register
reflects the issues facing the business.
A comprehensive budgeting process is completed once a
year and is reviewed and approved by the Board. The Group’s
actual results, compared to the budget, are reported to the
Board on a monthly basis.
The Group maintains appropriate insurance cover in respect
of actions taken against the Directors because of their roles,
as well as against material loss or claims against the Group.
The insured values and type of cover are comprehensively
reviewed on a periodic basis. The CEO and CFO meet
members of the Group’s Operating Board on a monthly
basis to discuss their business area and to consider new
risks and opportunities presented to the Group, making
recommendations to the Board and/or Audit Committee as
appropriate.
A summary of the principal risks and uncertainties facing the
Group, as well as mitigating actions, are set out on pages 19
to 24.
Principle Five
Maintain a balanced Board as a well-functioning balanced
team led by the Chair.
The members of the Board recognise that they have a
collective responsibility and legal obligation to promote the
interests of the Group. They are also responsible for ensuring
the Group has adequate corporate governance policies in
place to protect the business.
On 31 December 2022 the Board consisted of three
independent Non-Executive Directors, and two Executive
Directors.
All Directors are subject to re-election at intervals of no more
than three years.
The Board is responsible to the Group’s shareholders for
the proper management of the Group and met 25 times
throughout the year. All Board members are encouraged to
attend all meetings and were invited accordingly.
In addition to the various committees established by the
Group, the Board considers corporate governance as part
of the board meetings. Each meeting follows a standard
agenda, of which Corporate Governance is one such point.
This ensures and allows the Board members to consider the
issues facing the business regularly and frequently to ensure
compliance across the group. Any action points arising from
these discussions are then followed up accordingly.
Given the nature of the Group’s operations, during the year the
Board continually reviewed its health and safety procedures.
The Board has established an Audit Committee and a
Remuneration Committee but given the size of the Group the
Board does not consider a nominations committee is required
and all appointments to the Board are made by the Board as
a whole.
The Board considers it collectively has an appropriate balance
of skills and experience, as well as an appropriate balance of
personal qualities and capabilities.
The Board will continue to review the situation and make any
necessary appointments as required to maintain this balance
or to reflect the scale and complexity of the business as it
grows.
Principle Six
Ensure that between them the directors have the necessary
upto-date experience, skills and capabilities
The Board considers that all of the non-executive directors
are of sufficient competence and calibre to add strength and
objectivity to its activities and bring considerable experience
in the financial and operational development of the Group.
The Board also has the relevant professional and technical
skills to ensure they are able to fulfil their duties.
The Board believes that the current skills of the directors
reflect a broad range of both commercial and professional
skills across the relevant industries and territories in which the
Group operates, plus the Board has sufficient experience of
operating in public markets.
The Group does not however have a director designated as a
Senior Independent Director.
In light of the size of the Board, and the nature and size of the
Group’s stage of development, the Board does not consider
it necessary to appoint a Senior Independent Director at this
stage but will nevertheless keep this under review as part of
the Board’s evaluation on Board effectiveness.
The Group is committed to a culture of equal opportunities for
all employees regardless of gender. The Board will be diverse
in terms of its range of culture, nationality and international
experience. Of the five members of the Board, one is female
and four are male. If it is agreed to expand the Operating
Board and main Board at a later date, (or indeed if/when new
replacement directors are sought in the future), the Board
will, when identifying appropriate candidates, look to include
female candidates for consideration in senior and also Board
roles.
Corporate Governance Statement
Continued
Xpediator plc | Annual report 2022
30
Principle Seven
Evaluate board performance based on clear and relevant
objectives, seeking continuous improvement
The members of the Board are typically evaluated by the
way of an annual appraisal by their peers. The appraisal
determines the effectiveness and performance of each
member with regards their specific roles as well as their role
as a Board member in general.,
The appraisal system identifies any areas of concerns and
makes recommendations for any training or development to
enable the Board member to meet their objectives which will
be set for the following year.
Given the significant changes to the structure of the Board
this year the appraisal process was postponed until 2023,
where reviews will be carried out and objectives recorded
on Cascade, our internal HR system. As part of the review
process a review of the progress made against the prior
year’s targets is made to ensure any identified skill gaps are
closed.
As well as the appraisal process, the Board will monitor the
Non-Executives status as independent to ensure the suitable
balance of Non-Executive and Executive members remains
in place.
Succession planning is also a vital task for the Board and
the management of succession planning represents a key
responsibility of the Board.
Whilst the Board considers this evaluation process is currently
best carried out internally, the Board will keep this under
review and may consider independent external evaluation
reviews in due course as the Group grows.
Principle Eight
Promote a corporate culture that is based on ethical values
and behaviours
The Board believes that the promotion of a corporate culture
based on sound ethical values and behaviours is essential
to maximise shareholder value. Our core values serve as a
common language that allows all members of staff to work
together as an effective team and it is these values and
our shared long-term business vision and strategy that we
believe will drive growth in shareholder value over the long
term.
The Board is committed to three core values:
1.
Creating a safe, positive and inclusive workplace
environment
2. Engaging all stakeholders and the broader community
with respect, integrity and honesty
3. Fostering a high-performance culture that values the
contribution of all team members
The Board seeks to maintain the highest standards of integrity
and probity in the conduct of the Group’s operations because
the Board recognises that the culture of any business is set by
the actions and conduct of its Board of Directors.
The Board rewards the teams on the basis of success as
measured by financial and non-financial performance, as
judged by the operational chief operating officers and by
the audit committee including the internal audit function,
particularly related to the areas identified by control over
financial and non-financial risk.
These values are enshrined in the written policies and
working practices adopted by all employees in the Group. The
Board takes time to consider the wider ramifications to its
stakeholders when making strategic and corporate decisions,
whilst at the same time delivering the long-term objectives of
stakeholders.
In order to ensure the core values are continually applied and
adopted, the Board seeks to recruit the best talent available
and create a diverse talent pool, to investing in the capabilities
and well-being of our people which in turn contribute to the
positive relationships with our customers and suppliers and
within the communities that we serve.
The Board conduct interviews and obtain references for all
senior management recruits, it carries out further reviews
following a period of induction. It also conducts exit interviews
with departing personnel in order to obtain feedback for the
possible improvement of our systems and structure.
Having open communications with stakeholders allows them
to give constructive feedback to the Board and enables the
Board to monitor the reactions of those stakeholders to
decisions made.
The Group believes in openness, integrity, honesty, and trust
as its core values, which it promotes through each of its
different business units. The Group operates in international
markets and is aware that respect of individual cultures
is critical to corporate success. Accordingly, the Board
endeavours to promote sound ethical values and behaviours
and treats its customers, suppliers and business partners
with such respect at all times.
The Board has implemented a code for Directors’ and
employees’ dealings in securities which it considers to be
appropriate for a company whose securities are traded on
AIM and is in accordance with the requirements of the Market
Abuse Regulation.
The Group is committed to providing a safe environment for
its employees and all other parties for which the Group has
a legal or moral responsibility in this area. The Group has a
Health and Safety officer who monitors, reviews health and
safety matters making recommendations to the Board.
Corporate Governance Statement
Continued
31
2022 Annual Report & Accounts | GOVERNANCE
The Group’s health and safety policies and procedures are
enshrined in the Group’s documented quality systems, which
encompass all aspects of the Group’s day-to-day operations.
During the year the Board has reviewed its whistleblowing
process which seeks to safeguard the Group and its
employees.
As well as good practice in terms of corporate governance,
it also provides employees with a process to raise any
suspected wrong doings, misconduct or illegal acts that they
have witnessed or become aware of.
This reconfirms the Group commitment to promoting the
highest possible standards of openness, integrity and
accountability across the business.
A full copy of our Whistleblowing Policy is attached and
can also be found on our website: https://xpediator.com/
corporate-social-responsibility/whistleblowing-policy.
The
Group is a corporate partner for the Transaid charity. Transaid
seeks to improve the lives of those involved in the logistics
industry globally.
Principle Nine
Maintain governance structures and processes that are fit for
purpose and support good decision-making by the Board
The Board recognises that the responsibility for ensuring the
Group operates in the correct manner is ultimately theirs and
as such the Board has implemented various sub- committees
and an Operating Board which helps implement the strategy
of the Board. The executive directors have day-to-day
responsibility for the operational management of the Group’s
activities. The non-executive directors are responsible for
bringing independent and objective judgement to Board
decisions.
There is a clear separation of the roles of the Chief Executive
Officer and the Non-Executive Chairman. The Chairman is
responsible for overseeing the effectiveness of the Board,
ensuring that no individual or group dominates the Board’s
decision-making and ensuring the non-executive directors
are properly briefed on matters. The Chairman has overall
responsibility for corporate governance matters in the Group.
The Chief Executive Officer is responsible for implementing
the strategy of the Board and managing the day-to-day
business activities of the Group.
The Board has established an audit committee and a
remuneration committee with formally delegated duties and
responsibilities.
Principle Ten
Communicate how the Group is governed and is performing
by maintaining a dialogue with shareholders and other
relevant stakeholders
The Board is committed to maintaining good communication
with its shareholders. The Group has good relationships with
its private shareholders and institutional shareholders who
have regular access to the Executive Board to discuss the
business development and progress as appropriate. The
Investor Relations section of the Group’s website also provides
all required regulatory information as well as other helpful
information for shareholders and other relevant stakeholders
including podcasts and presentations.
Results of shareholder meetings and details of votes cast will
be publicly announced through the regulatory system and
displayed on the Group’s website with suitable explanations
of any actions undertaken as a result of any significant votes
against resolutions.
In accordance with the regulations, the Group lists all
the governance related announcements on its website,
details of which can be found on the Group website;
https://xpediator.com/regulatory-news-service
Details of the Group’s AGM and associated results
are published on the Group website, see following link.
www.xpediator.com
The results of voting on all resolutions in future general
meetings will be posted to the Group’s website, including any
actions to be taken as a result of resolutions for which votes
against have been received from at least 20% of independent
votes.
Details
of
the
Group’s
historical
reports
can
be
found
on
the
Group’s
website,
see
following
link;
https://xpediator.com/investor-relations
This Corporate Governance statement will be reviewed at
least annually to ensure that the Group’s corporate.
Internal
Controls
and
Financial
Risk
Management
The Board is responsible for establishing and maintaining
the Group’s financial and non-financial controls. The Board
recognises that whilst internal controls reduce risk it cannot
eliminate it completely.
The key procedures, which the Directors have established
with a view to providing effective internal controls are set out
below.
The Board sets policies, which it reviews regularly directly and
through the audit committee, ensures that these policies are
appropriate to mitigate key strategic, financial, operational,
compliance and reputational risks.
Corporate Governance Statement
Continued
Xpediator plc | Annual report 2022
32
Authorisation limits are in place
The Board ensures that there is an appropriate finance function
for each business unit within the Group, with the appropriately
qualified and experienced professionals dependent on the size
and complexity of the respective business.
Each business unit prepares monthly financial reports, which
are circulated to the Group, which details operating results,
cash flow, balance sheet information, compared to the budget
and latest estimate.
Each business unit has clearly defined segregation of duties,
authorisation limits and other key internal controls in place,
which are suitable for the respective entity, dependent on the
size and nature of the business unit.
Financial planning and monitoring
The Group sets annual budgets, which detail the operating
results, cash flow, balance sheet information. These are
updated at least twice in the year, all of which are subject to
Board approval.
The Board reviews the business performance monthly by
comparing the financial information, against the budget and
latest estimate.
Quality and Integrity of Personnel
The competence and integrity of personnel are ensured
through high recruitment standards and subsequent training.
High quality of personnel is seen as an essential part of the
control environment.
Identification of Business Risks
The Board is responsible for identifying the major business
risks faced by the Group and for determining the appropriate
course of action to manage those risks.
Meetings and Attendance
The directors’ attendance at Board and Committee meetings during the year is shown below:
Director
Plc Board
Audit
Committee
Remuneration
Committee
Meetings held during the year.
25
4
6
Director’s attendance
Mark Whiteling (resigned 25 March 2022)
5
2
Stephen Blyth (resigned 25 March 2022)
6
Michael Williamson (resigned 31 May 2022)
9
2
Wim Pauwels (resigned 31 May 2022)
12
1
2
Gillian Wilmott (appointed 1 June 2022)
13
2
2
Rob Riddleston
25
4
5
Charles McGurin
24
3
6
Mike Stone (appointed 1 June 2022,)
13
1
2
Richard Myson (appointed 1 June 2022)
13
1
2
The Board reviews and considers the performance and
outlook of the Group ensures that proper internal controls
and systems are in place to allow proper financial monitoring
and regulatory compliance.
Over the 12-month period there has been a total of 25 plc
Board Meetings a director could have attended.
The strengthened Board and senior management team is
focused on strategic direction and development ensuring
that appropriate governance and controls are in place
to support our delivery on strategy and the growth of our
business both organically and through acquisitions. We will be
closely monitoring changes in governance covering reporting
on systems, gender pay reporting and general provision for
our employees as we seek to develop our HR function during
the current year.
We welcome dialogue with our shareholders and potential
investors and look forward to welcoming you at our
forthcoming AGM in June. You will also be able to make
contact with the Group through our Company Secretary.
Notice of the Company’s annual general meeting and proxy
form will be posted separately to shareholders.
Board Committees
We recognise the importance of good corporate governance
being led by the Board and we established an appropriate
Board structure in accordance with regulatory compliance
on the listing of the Group’s shares on the AIM market of the
London Stock exchange in August 2017, with the Board now
comprising of five directors, of whom three are independent
and two executive directors.
Corporate Governance Statement
Continued
33
2022 Annual Report & Accounts | GOVERNANCE
To assist in carrying out its duties, the Board has several
committees including the Audit Committee and the
Remuneration Committee.
Each committee has formally delegated duties and
responsibilities with written terms of reference.
An explanation of the responsibilities and composition of the
committees is set out below and the terms of reference can
be downloaded from our website.
Audit Committee
The Audit Committee consists of Charles McGurin and is
chaired by Rob Riddleston.
The audit committee has responsibility for ensuring that the
financial performance of the Group is properly reported on
and reviewed, and its role includes.
•
monitoring the integrity of the financial statements of the
Group (including annual and interim accounts and results
announcements),
•
reviewing any changes to accounting policies,
•
reviewing and monitoring the Internal Audit functions
charter, annual plan, and performance,
•
reviewing and monitoring the extent of the non-audit
services undertaken by external auditors and
•
advising on the appointment of external auditors.
Remuneration Committee
The Remuneration Committee consists of Rob Riddleston and
is chaired by Charles McGurin. The Remuneration Committee
has responsibility for determining, within the agreed terms of
reference, the Group’s policy on the remuneration packages of
the Group’s Chair, the Executive and Non-Executive Directors.
No Director may be involved in any discussions as to their own
remuneration.
The Audit Committee Report
The Audit Committee meets at least annually with the
Group’s Auditor and as otherwise required. The Audit
Committee met four times during 2022 with full attendance
and, in accordance with best practice, the Chair of the Audit
Committee also met separately with the Audit partner to
provide an opportunity for any relevant issues to be raised
directly with him.
The key findings of last year’s audit were discussed, and plans
put in place with a view to addressing the limited number
of areas of concern. During the year, the Audit Committee
discharged its responsibilities by:
•
Reviewing the Group’s draft financial statements,
preliminary
announcements
and
interim
results
statement prior to Board approval and reviewing the
external Auditor’s reports thereon.
•
Reviewing the external Auditor’s plan for the audit of
the Group financial statements, confirmations of auditor
independence and proposed audit fee and approving
terms of engagement for the audit.
•
Considering the effectiveness and independence of the
external Auditor and recommending to the Board the
reappointment of Crowe as external Auditor.
•
Considering the review of material business risks.
•
Considering the significant risks and issues in relation to
the financial statements and how these were addressed.
•
Considering policies on non-audit engagements for the
Group’s Auditor.
The Remuneration Committee Report
The key pillars of the remuneration policy for the Group, as
well as the rationale for any major decisions made by the
remuneration committee during the year, are set out below.
This is intended to help investors assess and understand the
remuneration policy in the light of the strategy for the Group.
The role of the Remuneration Committee is to assist the Board
in fulfilling its responsibilities in establishing appropriate
remuneration levels and incentive policies for Directors and
key executives, including all share-based compensation.
The remuneration of the Non-Executive Directors is approved
by the Board of Directors who always act as fairly and
reasonably and in the interests of the Group and shareholders
as possible.
Remuneration Policy The remuneration policy of the Group is:
•
To provide a suitable remuneration package to attract,
motivate and retain Executive Directors who will run the
Group successfully.
•
To ensure that all long-term incentive schemes for the
Directors are in line with the Shareholders’ interests.
The Committee makes recommendations to the Board.
No Director plays a part in any discussion about their own
remuneration. The Remuneration Committee members
are expected to draw on their experience to judge where
to position the Group, relative to other companies’ and
other groups’ rates of pay when considering remuneration
packages for Executives. The Executive Directors have service
contracts which provide for notice periods of twelve months.
Each of the Non-Executive Directors has a service contract
which provides for a notice period of three months.
Directors Remuneration
The Group aims to achieve an effective balance between
fixed and variable remuneration, and between short and
longer-term performance.
Corporate Governance Statement
Continued
Xpediator plc | Annual report 2022
34
Company Share Option Scheme (“CSOP”)
On 5 February 2021, Xpediator PLC granted options over
3,168,539 new ordinary shares to 108 employees under the
Group Company Share Option Plan (“CSOP”). The award value
is between £5,000 - £30,000 (depending on seniority within
the business) divided by closing share price on the day before
grant of CSOP options with an exercise price equivalent to
110% of the closing share price on the day before grant. These
options vest three years from the award date and are subject
to meeting a performance criteria of an average earnings per
share (EPS) growth of 10% per annum, from the 1 January
2021 to 31 December 2023.
Long-term Incentive Plans (“LTIP”)
Details regarding share options at the reporting date are set
out in note 24 of the financial statements.
Director
The remuneration of Directors for the year ended 31 December 2022 was as follows:
Director
Base
Salary
Bonuses
Other
benefits
2022
Total
2021
Total
Mark Whiteling
23.7
-
-
23.7
25.2
Stephen Blyth
9.6
-
0.3
9.9
41.2
Gillian Willmott
186.2
-
-
186.2
-
Rob Riddleston
48.5
-
-
48.5
30.9
Charles McGurin
38.8
-
-
38.8
34.0
Wim Pauwels
208.3
-
-
208.3
81.8
Mike Stone
228.4
-
3.5
231.9
-
Mike Williamson
90.5
-
72.8
163.3
287.0
Richard Myson
108.8
-
7.7
116.5
-
Alex Borrelli
-
-
-
-
37.5
Robert Ross
-
-
-
-
616.6
Total
942.8
-
84.3
1,027.1
1,154.2
Included within other benefits for Mike Williamson for 2022 is combined payment in lieu of notice period and compensation of
£79,781 in addition to a credit for lapsed share options of £10,344, and in 2021 for Robert Ross is combined payment in lieu of
notice period and compensation of £202,000.
Directors and their interests
The Directors of the Group held the following interests in ordinary shares of Xpediator plc:
Director
31 Dec 2022
31 Dec 2022 %
31 Dec 2021
31 Dec 2021 %
Alex Borrelli1
-
-
416,667
0.29
Stephen Blyth2
37,781,045
26.66
37,781,045
26.66
Rob Riddleston
2,084
0.00
2,084
0.00
Charles McGurin
65,321
0.05
65,321
0.05
Wim Pauwels
208,155
0.15
208,155
0.15
Richard Myson
1,941,272
1.37
-
-
1
Alex Borrelli exited the business (22 September 2021)
2 Shares held via Cogels Investment Limited and Blyth family members
Corporate Governance Statement
Continued
35
2022 Annual Report & Accounts | GOVERNANCE
CEO Pay Ratio
Year
Method
CEO Single
Figure
All UK
Employee
Lower
Quartile
Median
Upper
Quartile
2022
Option B
440,207
Ratio
18:1
17:1
13:1
Total Salary
24,720
26,000
34,000
2021
Option B
461,334
Ratio
20:1
17:1
12:1
Total Salary
23,000
27,731
38,314
The CEO pay ratios have been calculated using ‘option B’, which is to use the gender pay data to identify the three employees
that represent the lower quartile, the median and the upper quartile. We believe this provides us with a clear methodology
involving less adjustments to impute Full-time Equivalent earnings. Therefore, we believe this option is more likely to produce
more robust data year on year. The data used to calculate CEO pay ratio is only for employees on UK payrolls.
For 2022, the CEO pay ratio is based on Wim Pauwel’s salary from 1 January 2022 to 31 May 2022 and Mike Stone’s salary
from 1 June 2022 to 31 December 2022.
Corporate Governance Statement
Continued
Xpediator plc | Annual report 2022
36
Principal Activities
Xpediator is an AIM listed freight management company
which includes freight forwarding, logistics and the provision
of services to the transport sector (Affinity Division). The
Group has been in the business of freight management for
over 30 years.
The consolidated Financial Statements give the Group
results for the year ended 31 December 2022.
The Group and its subsidiaries operate from a network of 12
countries in Europe, mainly in Central and Eastern European
areas and the UK.
The Group’s overall financial objectives are to increase
revenue, profitability, network coverage and enhance the
asset base supporting the business. In order to monitor
its progress towards achieving these objectives, the Group
has set a number of key performance indicators, which deal
predominately with revenue, profitability, margin and cash
flow as per page 10 in the Strategic Report.
Results
The Group reports its Consolidated Financial Statements
in accordance with International Financial Reporting
Standards, the results of which for the year are set out in the
Consolidated Income Statement on page 44.
Share Capital
Details of the changes in the share capital are set out in
note 22 to the financial statements.
At 31 December 2022, the Group had been notified of the
following interests amounting to 5% or more of the voting
rights attaching to the Group’s issued share capital:
Percentage of
Cogels Investments Limited
26.66%
Mr Shaun R Godfrey
16.01%
Mr Sandu Grigore
11.14%
Berenberg Bank
8.21%
Stonehage Fleming Family & Partners
6.58%
Financial Instruments
As at 31 December 2022 the Group had UK borrowings
of £5.0m and an invoice discounting facility provided by
Investec Capital Solutions Limited of £10.8m. The financial
risk management objectives and policies are disclosed in
note 21.
Directors
The Directors of the Group during the period and to the date
of this report, unless otherwise stated, were as follows:
Executive
•
Mike Stone (appointed Interim Chief Executive Officer
1 June 2022)
•
Wim Pauwels (resigned 31 May 2022)
•
Michael Williamson (resigned 31 May 2022)
•
Richard Myson (appointed Chief Financial Officer 1 June
2022)
Non-Executive
•
Gillian Wilmot (appointed Interim Chairman 1 June
2022)
•
Mark Whiteling (resigned 25 March 2022)
•
Stephen Blyth (resigned 25 March 2022)
•
Charles McGurin
•
Rob Riddleston (acted as Interim Chairman 25 March
2022 to 1 June 2022)
The Directors’ remuneration, share options, long-term
executive plans, pension contributions, benefits and interests
are set out in the Directors’ remuneration report.
On 31 May 2022, Wim Pauwels resigned as Interim Chief
Executive Officer and was replaced by Mike Stone on 1 June
2022.
On 6 April 2023, Mike Stone advised the Board of his intention
to step down from his role of Interim Chief Executive and
from the Board before the Offer completes but no specific
effective date has yet been agreed.
Directors’ Indemnity Provisions
The Group purchased and maintained throughout the
financial period Directors’ and Officers’ liability insurance in
respect of itself and its directors.
Political Donations
The Group made no political donations in the financial year.
Employee Involvement
The Group regularly consults with the employees of the
Group to ensure that their opinions are considered when
decisions are made that are likely to affect their interests.
Details of the Group’s activities are regularly communicated
to the employees via a Group employee newsletter, plus the
regular circulation of Group announcements which include
the interim and annual results.
Further details are also discussed in the section 172 report
available on pages 11 and 12.
Directors’ Report
37
2022 Annual Report & Accounts | GOVERNANCE
Equal Opportunities
The Group is committed to eliminating discrimination and
encouraging diversity. Its aim is that each employee is able
to perform to the best of their ability.
As such it is the Group’s policy to employ the best person
for the role, irrespective of gender, nationality, race, sexual
orientation or disability. As such applications for employment
by disabled individuals are given full and fair consideration.
If an employee becomes disabled, the Group makes every
effort to retrain them in the business in a suitable role.
Statement, as to Disclosure of Information to
Auditors
The Directors in office on 22 May 2023 have confirmed
that, as far as they are aware, there is no relevant audit
information of which the auditor is unaware.
Each Director has confirmed that they have taken all steps
that they ought to have taken as Directors in order to make
themselves aware of any relevant audit information and to
establish that it has been communicated to the auditor.
Auditor Appointment
Crowe U.K. LLP have expressed willingness to continue in
office. In accordance with section 489(4) of the Companies
Act 2006 a resolution to re-appoint Crowe U.K. LLP will be
proposed at the AGM.
Related Party Transactions
Any related party transactions required to be disclosed
under the AIM rules are disclosed in note 26 to the financial
statements.
Modern Slavery Act
Our Anti-slavery policy, which sets out our commitment
to preventing modern slavery and human trafficking from
occurring within any part of our business and supply chain,
is available on our website, www.xpediator.com.
Subsequent Events and Future
Developments
Details of post balance sheet events are given in note 28 of
the financial statements.
Planned future developments are disclosed in the strategic
report on page 4.
Going Concern
The Directors are satisfied that the Group has adequate
resources to continue in operation for at least 12 months
from the date of approval of the financial statements and
that it is appropriate to prepare financial statements on the
going concern basis.
Approval
This Directors’ report was approved on behalf of the Board
and signed on its behalf by:
Richard Myson
Chief Financial Officer
22 May 2023
Directors’ Report
Continued
Xpediator plc | Annual report 2022
38
The directors are responsible for preparing the annual report
and the financial statements in accordance with applicable
law and regulations.
Company law requires the directors to prepare Group and
Group financial statements for each financial year. Under
that law and as required by the Alternative Investment
Market rules of the London Stock Exchange, the directors
have elected to prepare the Group financial statements
in accordance with International Financial Reporting
Standards (“IFRSs”) as adopted by the United Kingdom
and the company financial statements in accordance with
United Kingdom Generally Accepted Accounting Practice
(United Kingdom Accounting Standards and applicable law).
Under Company law the directors must not approve the
financial statements unless they are satisfied that they
give a true and fair view of the state of affairs of the Group
and Company and of the profit or loss of the Group for that
period.
In preparing these financial statements, the directors are
required to:
•
select suitable accounting policies and then apply them
consistently.
•
make judgements and accounting estimates that are
reasonable and prudent.
•
state whether they have been prepared in accordance
with IFRSs as adopted by the United Kingdom, subject
to any material departures disclosed and explained in
the financial statements for the Group and statements
in accordance with United Kingdom Generally Accepted
Accounting Practice subject to any material departures
disclosed and explained in the financial statements for
the company.
•
prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the
Group will continue in business.
The directors are responsible for keeping adequate
accounting records that are sufficient to show and explain
the Group’s transactions and disclose with reasonable
accuracy at any time the financial position of the Group and
enable them to ensure that the financial statements comply
with the requirements of the Companies Act 2006. They are
also responsible for safeguarding the assets of the Group
and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
Website Publication
The Directors are responsible for ensuring the Annual
Report and the Financial Statements are made available
on a website. Financial Statements are published on the
Group’s website in accordance with legislation in the United
Kingdom governing the preparation and dissemination of
Financial Statements, which may vary from legislation in
other jurisdictions.
The maintenance and integrity of the Group’s website is the
responsibility of the Directors. The Directors’ responsibility
also extends to the on-going integrity of the Financial
Statements contained therein.
This report was approved by the Board and signed on its
behalf by:
Richard Myson
Chief Financial Officer
22 May 2023
Statement of Directors’ Responsibilities
39
2022 Annual Report & Accounts | GOVERNANCE
Independent
Auditor’s
Report
to
the
Members of Xpediator Plc
Opinion
We have audited the financial statements of Xpediator Plc
(the “Parent Company”) and its subsidiaries (the “Group”) for
the year ended 31 December 2022, which comprise:
•
the Consolidated Income Statement and Consolidated
Statement of Other Comprehensive Income;
•
the Consolidated and Company Statements of Financial
Position;
•
the Consolidated and Company Statements of Changes
in Equity;
•
the Consolidated Statement of Cash Flows; and
•
the notes to the financial statements, including a summary
of significant accounting policies.
The financial reporting framework that has been applied in the
preparation of the group financial statements is applicable
law and UK-adopted international accounting standards
(UK IAS). The financial reporting framework that has been
applied in the preparation of the parent company financial
statements is applicable law and United Kingdom Accounting
Standards, including Financial Reporting Standard 101
Reduced Disclosures Framework (United Kingdom Generally
Accepted Accounting Practice).
In our opinion:
•
the financial statements give a true and fair view of the
state of the Group’s and of the Parent Company’s affairs
as at 31 December 2022 and of the Group’s profit for the
period then ended;
•
the Group financial statements have been properly
prepared in accordance with UK IAS;
•
the Parent Company financial statements have been
properly prepared in accordance with United Kingdom
Generally Accepted Accounting Practice; and
•
the financial statements have been prepared in
accordance with the requirements of the Companies Act
2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described
in the Auditor’s responsibilities for the audit of the financial
statements section of our report. We are independent of the
Group and Parent Company in accordance with the ethical
requirements that are relevant to our audit of the financial
statements in the UK, including the FRC’s Ethical Standard, as
applied to listed entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We
believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to the going concern paragraph in Note 2 in
the financial statements which highlights the risks to the Group
and Parent Company’s ability to trade as a going concern as
there can be no certainty over the nature of the continuing
operations of the Group should the acquisition by DLM Bidco
Limited proceed successfully. As stated in the going concern
paragraph in Note 2 in the financial statements, these events
or conditions indicate that a material uncertainty exists that
may cast significant doubt on the Group and Parent Company’s
ability to continue as a going concern. Our opinion is not modified
in respect of this matter.
In auditing the financial statements, we have concluded that
the director’s use of the going concern basis of accounting in
the preparation of the financial statements is appropriate.
Our evaluation of the directors’ assessment of the ability of the
Group and the Parent Company continue to adopt the going
concern basis of accounting included the following procedures:
We obtained and reviewed the Directors’ assessment of the
Group’s and the Parent Company’s ability to continue as a going
concern with the supporting working capital model for a period
at least 12 months from the date of the approval of the financial
statements. Our audit procedures were as follows:
•
We obtained an understanding of the key controls over the
working capital model and assessed the appropriateness of
the approach, assumptions and arithmetic accuracy of that
model used by management when performing their going
concern assessment;
•
We assessed the accuracy of management’s past
forecasting for the previous financial years by comparing
management’s forecasts to actual results for those years
and have considered the impact on the working capital
forecast;
•
We assessed and tested the integrity of the working capital
model, reviewed and challenged the underlying data and
key assumptions used to make the assessment;
•
We reviewed and considered potential downside scenarios
and the resultant impact on available funds, to assess the
reasonableness of economic assumptions on the Group’s
liquidity position; and
•
We assessed the adequacy of the disclosures made in the
financial statements.
Further details of the Directors’ assessment of going concern is
provided in Note 2.
Our responsibilities and the responsibilities of the directors with
respect to going concern are described in the relevant sections
of this report.
Independent Auditor’s Report
Xpediator plc | Annual report 2022
40
Materiality
In planning and performing our audit we applied the concept
of materiality. An item is considered material if it could
reasonably be expected to change the economic decisions
of a user of the financial statements. We used the concept
of materiality to both focus our testing and to evaluate the
impact of misstatements identified.
•
Our overall materiality was set £470,000 based on
approximately 5% of the Group’s profit before tax for the
year to 31 December 2022 normalised by adding back
impairment loss and exceptional items. In 2021, the overall
materiality of £525,000 represented approximately 8% of
the Group’s profit before tax for the year to 31 December
2021 normalised by adding back exceptional items and
approximately 5% of Adjusted Profit for that year, which is
the non-GAAP measure which the Group uses for market
guidance. As the Group is a trading group we determined
that a trading based metric was the most appropriate to
use for determining materiality.
•
£329,000 is the Group level of performance materiality
(2021: £392,000) Performance materiality is used
to determine the extent of our testing for the audit of
the financial statements. Performance materiality is
set based on the audit materiality as adjusted for the
judgements made as to the entity risk and our evaluation
of the specific risk of each audit area having regard to
the internal control environment. Where considered
appropriate performance materiality may be reduced to
a lower level, such as, for related party transactions and
directors’ remuneration.
•
£23,500 (2021: £26,000) is the Group level of triviality
agreed with the Audit Committee. Errors above this
threshold are reported to the Audit Committee, errors
below this threshold would also be reported to the Audit
Committee if, in our opinion as auditor, disclosure was
required on qualitative grounds.
The Parent Company materiality was assessed as £85,000
(2021: £85,000) and its performance materiality to be
£60,000 (2021: £60,000).
Overview of the scope of our audit
There are eight significant components of the Group, located
and operating in and into four geographical areas, United
Kingdom, Bulgaria, Lithuania and Romania. The audits of
Xpediator PLC and two UK significant components were
conducted from the UK. Audit work on significant non-UK
components Delamode Bulgaria EOOD, Delamode Baltics
UAB, Delamode Romania Srl, Affinity Transport Solutions,
Srl and Pallet Express Srl was carried out by members of the
Crowe Global international network firms in Bulgaria, Romania
and Lithuania as component auditors. Financial information
from other components not considered to be individually
significant was subject to desktop review procedures carried
out by the group audit team.
We engaged with the component auditors at all stages
during the audit process and directed the audit work on the
non-UK subsidiary undertakings. We directed the component
auditors regarding the audit approach at the planning stage,
issued instructions that detailed the significant risks to be
addressed through the audit procedures and indicated the
information we required to be reported on.
We conducted our oversight of our component audit
team through regular dialogue via conference calls,
video conferencing and other forms of communication as
considered necessary. We performed remote working paper
reviews to satisfy ourselves as to the appropriateness of
audit work performed by our component audit team. This
year the site visit was undertaken by the Senior Statutory
Auditor to the component team in Lithuania. From the review
of the component auditors’ working papers, we discuss key
findings directly with the component audit team, specialist
team members and component auditor reporting partner
and conclude on significant issues.
Key Audit Matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the
financial statements of the current period and include the
most significant assessed risks of material misstatement
(whether or not due to fraud) that we identified. These
matters included those which had the greatest effect on:
the overall audit strategy, the allocation of resources in the
audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit
of the financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion
on these matters.
Independent Auditor’s Report
Continued
41
2022 Annual Report & Accounts | GOVERNANCE
Independent Auditor’s Report
Continued
In addition to the matter described in the material uncertainty in relation to going concern section, we have determined the
matters described below to be the key audit matters to be communicated in our report. This is not a complete list of all risks
identified by our audit.
Key audit matter
How the scope of our audit addressed the key audit matter
Impairment of intangible assets (including goodwill)
Note 12 of the Group financial statements
The Group’s intangible assets comprise licences, goodwill,
and customer related and technology related assets,
predominantly arising from past business combinations. The
total carrying value of the intangible assets was £20 million
at 31 December 2022 (2021: £21.9 million), which include an
impairment charge of £1.5 million in the year (2021: £nil).
Management is required to test goodwill for impairment on
an annual basis. The impairment testing of other intangible
assets is required if there is any indicator of impairment.
The value in use calculation for the cash generating unit
(CGU), which represents the estimated recoverable amount,
is subjective due to the inherent uncertainty involved in
forecasting and discounting estimated future cash flows
(specifically the key assumptions such as revenue growth and
discount rate).
The effect of these matters is that, despite the impairment
in the year, as part of our risk assessment we determined
that the carrying amount of the intangible asset has a high
degree of estimation uncertainty, with a potential range of
reasonable outcomes greater than our materiality for the
financial statements as a whole and therefore we considered
this to be a significant risk.
We confirmed the existence and the design effectiveness of
control around management’s impairment assessment for
intangible assets.
We
obtained
management’s
impairment
assessment
of intangible assets (including goodwill), reviewed the
management’s impairment model and discussed the key
inputs into the model with management. We performed
audit procedures, including applying challenge regarding the
reasonableness on the inputs into the model as follows:
•
the forecast cash flows within the assessment period;
•
the expected growth rate;
•
the discount rate applied to the forecast, and
•
benchmarked the underlying key input assumption to the
market information.
We tested the accuracy of management’s forecasting
through a comparison of budget to actual data and historical
variance trends.
We considered managements’ sensitivity analysis and also
performed an additional range of sensitivities to assess
whether a reasonably likely change to a key input would result
in an impairment charge. We also considered the disclosure
made in the financial statements relating to impairments are
appropriate.
Carrying value of investments in subsidiaries
Note 5 of the Parent Company financial statements
At 31 December 2022 the carrying value of investments
in subsidiaries in the financial statements of the Parent
Company was £54.9 million (2021: £63.7 million), after
recognising an impairment charge of £8.8million in the year
(2021: £nil).
The carrying amount of the investments in subsidiaries
is dependent on the financial performance of the cash
generating unit. Any adverse impact to the performance
would likely result in an impairment to the carrying amount of
the investment in subsidiaries.
We discussed with management whether any indication of
impairment existed. This includes considering the existence
of any indication of discontinued operating activities,
management’s future plans for business and the market
capitalization of the Group.
We obtained and reviewed the management’s impairment
model and discussed the key inputs into the model with
management. We performed audit procedures, including
applying challenge regarding the reasonableness on the key
inputs assumption into the model and benchmarked the input
assumptions to market information.
We tested the accuracy of management’s impairment model.
We also considered managements’ sensitivity analysis and
performed an additional range of sensitivities to assess
whether a reasonably likely change to a key input would result
in an impairment charge.
Our audit procedures in relation to these matters were designed in the context of our audit opinion as a whole. They were not
designed to enable us to express an opinion on these matters individually and we express no such opinion.
Xpediator plc | Annual report 2022
42
Independent Auditor’s Report
Continued
Other information
The Directors are responsible for the other information
contained within the annual report. The other information
comprises the information included in the Annual Report,
other than the financial statements and our auditor’s report
thereon. Our opinion on the financial statements does
not cover the other information and, except to the extent
otherwise explicitly stated in our report, we do not express
any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in
doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge
obtained in the audit or otherwise appears to be materially
misstated. If we identify such material inconsistencies
or apparent material misstatements, we are required to
determine whether this gives rise to a material misstatement
in the financial statements themselves. If, based on the work
we have performed, we conclude that there is a material
misstatement of this other information, we are required to
report that fact.
We have nothing to report in this regard.
Opinion on other matter prescribed by the
Companies Act 2006
In our opinion based on the work undertaken in the course of
our audit
•
the information given in the strategic report and the
directors’ report for the financial year for which the
financial statements are prepared is consistent with the
financial statements; and
•
the strategic report and the directors’ report have
been prepared in accordance with applicable legal
requirements.
Matters on which we are required to report
by exception
In the light of the knowledge and understanding of the Group
and the Parent Company and their environment obtained
in the course of the audit, we have not identified material
misstatements in the strategic report or the directors’ report.
We have nothing to report in respect of the following matters
in relation to which the Companies Act 2006 requires us to
report to you if, in our opinion:
•
adequate accounting records have not been kept by the
Parent Company, or returns adequate for our audit have
not been received from branches not visited by us; or
•
the Parent Company financial statements are not in
agreement with the accounting records and returns; or
•
certain disclosures of directors’ remuneration specified by
law are not made; or
•
we have not received all the information and explanations
we require for our audit
Responsibilities of directors
As explained more fully in the directors’ responsibilities
statement set out on page 38, the directors are responsible
for the preparation of the financial statements and for being
satisfied that they give a true and fair view, and for such
internal control as the directors determine is necessary to
enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the Group’s and the Parent
Company’s ability to continue as a going concern, disclosing,
as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either
intend to liquidate the Group or the Parent Company or to
cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the
financial statements
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to
issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with ISAs (UK) will
always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of
users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non‑compliance
with laws and regulations. We design procedures in line
with our responsibilities, outlined above, to detect material
misstatements in respect of irregularities, including fraud.
The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below:
We obtained an understanding of the legal and regulatory
frameworks within which the Group operates, focusing on
those laws and regulations that have a direct effect on the
determination of material amounts and disclosures in the
financial statements. We determined that the most significant
frameworks that are directly relevant to specific assertions
in the financial statements are those related to financial
reporting and taxation laws, being UK IAS, the Companies Act
2006 and the AIM Rules.
We identified the greatest risk of material impact on the
financial statements from irregularities, including fraud, to be
the override of controls by management. Our audit procedures
to respond to these risks included enquiries of management
and audit committees about their own identification and
assessment of the risks of irregularities, reviewing of minutes
of meetings of those charged with governance, designing
audit procedures to incorporate unpredictability around the
nature, extent and timing of our testing; testing a risk-based
43
2022 Annual Report & Accounts | GOVERNANCE
selection of journals, assessing the accounting treatment of
non-routine transactions, challenging assumptions made
by management in its significant accounting estimates,
corroborating
amounts
and
balances
recognised
to
supporting documentation on a sample basis and ensuring
accounting policies are appropriate under UK IAS and
applicable law.
Owing to the inherent limitations of an audit, there is an
unavoidable risk that we may not have detected some
material misstatements in the financial statements, even
though we have properly planned and performed our audit in
accordance with auditing standards. We are not responsible
for preventing non-compliance and cannot be expected to
detect non-compliance with all laws and regulations.
These inherent limitations are particularly significant in the
case of misstatement resulting from fraud as this may involve
sophisticated schemes designed to avoid detection, including
deliberate failure to record transactions, collusion or the
provision of intentional misrepresentations.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council’s website at: www.frc.org.uk/auditorsresponsibilities.
This description forms part of our auditor’s report.
Use of our report
This report is made solely to the Parent Company’s members,
as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so
that we might state to the company’s members those matters
we are required to state to them in an auditor’s report and for
no other purpose. To the fullest extent permitted by law, we
do not accept or assume responsibility to anyone other than
the company and the Parent Company’s members as a body,
for our audit work, for this report, or for the opinions we have
formed.
Nick Jones
Senior Statutory Auditor
For and on behalf of
Crowe U.K. LLP
Statutory Auditor
London
22 May 2023
Independent Auditor’s Report
Continued
Xpediator plc | Annual report 2022
44
Notes
2022
£’000
2021
£’000
Gross billing
7
567,865
436,237
CONTINUING OPERATIONS
Revenue
3
386,697
296,594
Cost of sales
(294,516)
(228,201)
GROSS PROFIT
92,181
68,393
Other operating income
4
2,217
1,478
Impairment losses on receivables
17
(863)
(1,475)
Administrative expenses
5
(84,213)
(62,344)
Exceptional items included in administrative expenses above
27
(483)
(2,610)
OPERATING PROFIT BEFORE EXCEPTIONAL ITEMS
9,805
8,662
OPERATING PROFIT
5
9,322
6,052
Finance costs
8
(2,848)
(1,937)
Finance income
8
47
172
PROFIT BEFORE INCOME TAX
6,521
4,287
Income tax
9
(3,701)
(2,410)
PROFIT FOR THE YEAR
2,820
1,877
Profit attributable to:
Owners of the parent
(178)
417
Non-controlling interests
2,998
1,460
2,820
1,877
Earnings per share attributable to the ordinary equity holders of the parent:
Basic earnings pence per share
10
(0.13)
0.29
The notes form part of these financial statements
Consolidated Income Statement
For the year ended 31 December 2022
44
45
2022 Annual Report & Accounts | FINANCIAL STATEMENTS
2022
£’000
2021
£’000
PROFIT FOR THE YEAR
2,820
1,877
OTHER COMPREHENSIVE INCOME
Items that may be reclassified to profit or loss:
Exchange differences on translation of foreign operations
1,683
(1,289)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
4,503
588
Total comprehensive income attributable to:
Owners of the parent
1,329
(758)
Non-controlling interests
3,174
1,346
4,503
588
The notes form part of these financial statements
Consolidated Statement of Other Comprehensive Income
For the year ended 31 December 2022
Xpediator plc | Annual report 2022
46
Consolidated Statement of Financial Position
As at 31 December 2022
Notes
2022
£’000
2021
£’000
ASSETS
NON-CURRENT ASSET
Intangible assets
12
20,011
21,923
Property, plant and equipment
13
4,398
4,563
Right-of-use assets
25
93,303
58,321
Investments
16
33
–
Trade and other receivables
17
1,247
–
Deferred tax asset
9
813
904
119,805
85,711
CURRENT ASSETS
Inventories
283
235
Trade and other receivables
17
104,597
98,495
Cash and cash equivalents
13,126
11,684
118,006
110,414
TOTAL ASSETS
237,811
196,125
EQUITY
SHAREHOLDERS’ EQUITY
Called up share capital
22
7,134
7,134
Share premium
23
13,149
13,149
Equity reserve
23
–
108
Translation reserve
23
913
(594)
Merger reserve
23
3,102
3,102
Retained earnings
23
3,092
4,121
Issued share capital and reserves attributable to the owners of the parent
27,390
27,020
Non-controlling interests
4,503
2,170
TOTAL EQUITY
31,893
29,190
LIABILITIES
NON-CURRENT LIABILITIES
Provisions
20
3,759
2,191
Lease liabilities – right-of-use assets
25
83,765
50,625
Interest bearing loans and borrowings
19
4,083
–
Trade and other payables
18
273
343
Deferred tax liability
9
1,702
2,011
93,582
55,170
CURRENT LIABILITIES
Trade and other payables
18
87,436
86,219
Lease liabilities – right-of-use assets
25
12,287
9,053
Interest bearing loans and borrowings
19
12,613
16,493
112,336
111,765
TOTAL LIABILITIES
205,918
166,935
TOTAL EQUITY AND LIABILITIES
237,811
196,125
The notes form part of these financial statements
The financial statements were approved and authorised for issue by the Board of Directors and were signed by:
Richard Myson
CFO
22 May 2023
47
2022 Annual Report & Accounts | FINANCIAL STATEMENTS
Consolidated Statement of Changes in Equity
For the year ended 31 December 2022
Notes
Share
Capital
£’000
Share
Premium
£’000
Equity
Reserve
£’000
Translation
Reserve
£’000
Merger
Reserve
£’000
Retained
Earnings
£’000
Total
£’000
NCI
£’000
Total
Equity
£’000
Carried forward
31 December 2021
7,134
13,149
108
(594)
3,102
4,121
27,020
2,170
29,190
Contributions by and
distribution to owners
Dividends paid
11
–
–
–
–
–
(851)
(851)
(841)
(1,692)
Share options charge
–
–
(108)
–
–
–
(108)
–
(108)
Total contribution by and
distribution to owners
–
–
(108)
–
–
(851)
(959)
(841)
(1800)
Profit for the year
–
–
–
–
–
(178)
(178)
2,998
2,820
Exchange differences on
translation of foreign operations
–
–
–
1,507
–
–
1,507
176
1,683
Total comprehensive income for
the year
–
–
–
1,507
–
(178)
1,329
3,174
4,503
Balance at 31 December 2022
7,134
13,149
–
913
3,102
3,092
27,390
4,503
31,893
Notes
Share
Capital
£’000
Share
Premium
£’000
Equity
Reserve
£’000
Translation
Reserve
£’000
Merger
Reserve
£’000
Retained
Earnings
£’000
Total
£’000
NCI
£’000
Total
Equity
£’000
Carried forward
31 December 2020
7,132
13,139
1
581
3,102
5,901 29,856
1,332
31,188
Contributions by and
distribution to owners
Dividends paid
11
-
-
-
-
-
(2,197)
(2,197)
(508)
(2,705)
Share options granted
-
-
107
-
-
-
107
-
107
Share options exercised
2
10
-
-
-
-
12
-
12
Total contribution by and
distribution to owners
2
10
107
-
-
(2,197)
(2,078)
(508)
(2,586)
Profit for the year
-
-
-
-
-
417
417
1,460
1,877
Exchange differences on
translation of foreign operations
-
-
-
(1,175)
-
-
(1,175)
(114)
(1,289)
Total comprehensive income for
the year
-
-
-
(1,175)
-
417
(758)
1,346
588
Balance at 31 December 2021
7,134
13,149
108
(594)
3,102
4,121
27,020
2,170
29,190
The notes form part of these financial statements
Xpediator plc | Annual report 2022
48
Consolidated Statement of Cash Flows
For the year ended 31 December 2022
Notes
2022
£’000
2021
£’000
Continuing operations
Cash flows from operating activities
Cash generated from operations
1
21,124
6,721
Interest paid
(605)
(299)
Tax paid
(2,829)
(1,732)
Net cash from operating activities
17,690
4,690
Cash flows from investing activities
Purchase of property, plant and equipment
13
(1,157)
(3,262)
Purchase of intangible fixed assets
12
(1,172)
(309)
Purchase of investments
16
(33)
–
Cash proceeds on disposal of property, plant and equipment
73
254
Interest received
8
47
172
Net cash outflow from investing activities
(2,242)
(3,145)
Cash flows from financing activities
New loans in year
19
5,500
10,869
Loan repayments in year
19
(6,176)
(338)
Share issue (net of share issue costs)
-
12
Dividends paid
11
(851)
(2,197)
Repayments on leases
(14,024)
(9,347)
Non-controlling interest dividends paid
(841)
(508)
Net cash outflow from financing activities
(16,392)
(1,509)
(Decrease)/Increase in cash and cash equivalents
(944)
36
Cash and cash equivalents at beginning of year
11,684
12,720
Effect of foreign exchange rate movements
1,507
(1,072)
Cash and cash equivalents at end of year
12,247
11,684
Cash and cash equivalents at end of year includes overdrafts of £879,000 (2021: £nil).
The notes form part of these financial statements
49
2022 Annual Report & Accounts | FINANCIAL STATEMENTS
1. Reconciliation of Profit Before Income Tax to Cash Generated
from Operations
2022
£’000
2021
£’000
Profit before income tax
6,521
4,287
Depreciation charges
13,790
9,691
Amortisation charges
1,742
1,676
Profit on disposal of property, plant and equipment
(14)
(47)
Impairment of intangibles
1,474
–
Loss/(profit) on disposal of right of use assets
10
(143)
Loss on disposal of intangible assets
3
–
Finance costs
2,848
1,937
Finance income
(47)
(172)
Share based payments (credit)/charge
(108)
107
26,219
17,336
Increase in inventories
(48)
(176)
Increase in trade and other receivables
(6,652)
(31,520)
Increase in trade and other payables
37
21,043
Increase in provisions
1,568
38
Cash generated from operations
21,124
6,721
2. Accounting Policies
Description of the business
Xpediator Plc (the “Company”) is a public limited company, incorporated in England and Wales, United Kingdom. The registered office
is 700 Avenue West, Skyline 120 Great Notley, Braintree, Essex, CM77 7AA and the Company registration number is 10397171.
The consolidated financial statements comprise the financial information of the Company and its subsidiary undertakings (together
the “Group”). Detail of the entities of the Group are described in Note 14.
Basis of preparation
The financial statements have been prepared in accordance with UK adopted international accounting standards, under the
historical cost convention. Accounting policies have been consistently applied to the periods presented.
The presentation currency used for the preparation of the financial statements is Pounds Sterling (£), which is the currency of choice
of the principal investors of the Group. The amounts are rounded to the nearest thousand, unless otherwise stated.
The preparation of financial statements in conformity with IFRSs requires the use of certain accounting estimates. It also requires
the directors to exercise their judgement in the process of applying the Group’s accounting policies (see Note 2.1 – Critical accounting
estimates and judgements).
Going concern
The Group meets its working capital requirements through the receipt of revenues from the provision of its services in the UK and in
CEE, the management of capital and operating expenditure, from the working capital and other borrowing facilities available to it
and, from time to time, from the issue of equity capital. Ultimately the receipt of revenues and charges due to the Group depends on
the availability of liquidity for the Group’s customers and the level of transport and logistics activity in the market.
The Director’s expect to continue to grow the business throughout the current year, and at the same time, remain aware of the
potential challenges. The business has good foundations and the changes that have occurred in the last nine months, have further
enhanced the business base. While cognisant of the wider market environment and the ongoing volatility that is occurring in different
parts of the marketplace, transportation and storage of goods will continue to be required and therefore the Director’s believe the
Group continues to be well placed to grow.
Notes to the Consolidated Financial Statements
For the year ended 31 December 2022
Xpediator plc | Annual report 2022
50
Notes to the Consolidated Financial Statements
Continued
At 31 December 2022 the Group had cash and cash equivalents of £13,126,000 (2021: £11,684,000). The Group also has funding
facilities in place, details of which are set out in note 19 of the financial statements.
Having regard to the above and based on their latest assessment of the budgets and forecasts for the business of the company, the
directors consider that there are sufficient funds available to the Group to enable it to meet its liabilities as they fall due for a period
of not less than twelve months from the date of approval of the financial statements. The directors therefore consider it appropriate
to adopt the going concern basis of accounting in preparing the financial statements.
However, on 4 May 2023, the Board recommended an Offer from DLM Bidco Limited (a newly incorporated entity indirectly owned
by a consortium including the Company’s largest shareholder, Cogels Investments Limited, the investment vehicle of close family
members of Stephen Blyth (former CEO of Xpediator), funds managed by Baltcap, one of the largest private equity investors in
the Baltic states, and Justas Versnickas, the Managing Director of, and 20% shareholder in, Delamode Baltics UAB, a subsidiary of
Xpediator Plc (together the “Consortium”) to acquire the entire issued, and to be issued, share capital of the Company, which may
complete within the next 12 months. Details of the Offer are available on our investor website (https://xpediator.com/offer-for-
xpediator-plc/)
Whilst the completion of the Offer is subject to approval by eligible shareholders at the shareholder meetings scheduled for 7 June
2023 and sanction by the High Court of Justice in England and Wales, the Group continues to operate autonomously with the
assumption that trading will continue post-acquisition as modelled in the detailed forecasts, without adjustments to reflect any
incremental costs or expected benefits should the acquisition go ahead. As the directors do not have visibility over the future
intentions of the potential acquirer, there can be no certainty over the nature of the continuing operations of the Group should the
acquisition proceed successfully. This gives rise to a material uncertainty, as defined in auditing and accounting standards, related
to events or conditions that may cast significant doubt on the Group and the Company’s ability to continue as a going concern and
in such circumstances, the Group and the Company may therefore be unable to realise its assets and discharge its liabilities in the
normal course of business.
Basis of consolidation
The Group financial statements consolidate the financial statements of Xpediator Plc and its subsidiaries drawn up to 31 December
each year. Subsidiaries are consolidated from the date of their acquisition, being the date on which the Group obtains control,
and continue to be consolidated until the date that such control ceases. The Company has control over a subsidiary if all three of
the following elements are present: power over the investee, exposure to variable returns from the investee, and the ability of the
investor to use its power to affect those variable returns. Control is reassessed whenever facts and circumstances indicate that
there may be a change in any of these elements of control.
The financial statements of subsidiaries are prepared for the same reporting year as the Company, using consistent accounting
policies. Intra-group balances and transactions, including unrealised profits arising from intra-Group transactions, have been
eliminated. Unrealised losses are eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Non-controlling interests represent the equity in subsidiaries that is not attributable, directly or indirectly, to Xpediator Plc.
Subsequent to the merger accounting noted below the consolidated financial statements incorporate the results of business
combinations using the acquisition method. In the statement of financial position, the acquiree’s identifiable assets, liabilities and
contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included
in the consolidated income statement from the date on which control is obtained. They are deconsolidated from the date on which
control ceases.
Merger accounting
On 25 May 2017, the Company entered into a share swap agreement with the ultimate beneficiaries of Delamode Group Holdings
Limited, whereby 4,000,000 new ordinary shares of £1.00 each were issued to the ultimate beneficiaries of Delamode Group
Holdings Limited in exchange for their shares in Delamode Group Holdings Limited in the same proportion as their shareholding in
Delamode Group Holdings Limited. The merger method of accounting is used to consolidate the results of Xpediator Plc.
On 8 June 2018, the Company issued 1,727,694 new ordinary shares of £0.05 each as part of the deferred consideration of Easy
Managed Transport Limited (“EMT”). On 14 July 2018, the Company issued 3,740,648 new ordinary shares of £0.05 each as part of
the acquisition of Import Services Limited. On 31 December 2018, the Company issued 84,951 new ordinary shares of £0.05 each as
part of the deferred consideration of Regional Express Limited (“Regional”). On 16 May 2019, the Company issued 1,655,876 shares
to the former owners of EMT as part of the payment of the deferred consideration relating to the acquisition of the entire equity of
EMT in 2017. On 5 December 2019, the Company issued 89,744 shares to the former owners of Regional as part of the payment of
the deferred consideration relating to the acquisition of the entire equity of Regional in 2017. The premium on the fair value in excess
of the nominal value of shares issued in consideration of business combinations is credited to the merger reserve.
51
2022 Annual Report & Accounts | FINANCIAL STATEMENTS
Revenue
The Group generates revenue in the UK and Europe.
The Group operates a number of diverse businesses and accordingly applies a variety of methods for revenue recognition, based
on the principles set out in IFRS 15. The revenue and profits recognised in any reporting period are based on the satisfaction of
performance obligations and an assessment of when control is transferred to the customer. In determining the amount of revenue
and profits to record, and associated statement of financial position items (such as trade receivables, contract assets and contract
liabilities), management is required to review performance obligations within individual contracts. This may involve some judgemental
areas (for example within the logistics & warehousing business), where revenue is recorded in advance of invoicing the customer.
Revenue is recognised either when the performance obligation in the contract has been performed (so ‘point in time’ recognition)
or ‘over time’ as control of the performance obligation is transferred to the customer. For all contracts, the Group determines if the
arrangement with a customer creates enforceable rights and obligations, which is in line with our contractual commitments and
industry standard best practice (for example Convention Relative au Contrat de Transport International de Marchansies par la
Route or CMR).
For each performance obligation to be recognised over time, the Group applies a revenue recognition method that faithfully depicts
the Group’s performance in transferring control of the goods or services to the customer. This decision requires assessment of the
real nature of the goods or services that the Group has promised to transfer to the customer. The Group has assessed the period
of time principles as follows:
•
The customer receives the benefits of the good being moved from the origin to the destination, as another supplier would not
need to re-perform the service performed to date (i.e. the goods have been moved partway).
•
The customer becomes committed to pay the Group the moment that the goods are despatched and collected.
•
The customer accepts that they are liable to pay for the transaction in full although it is the Group’s responsibility to ensure that
the shipment is in transit before invoicing.
•
The customer can usually be invoiced on despatch/export and has an obligation to pay for services despite any problems that
may arise in transit.
•
The Group would hold any third party liable for any issues that happen in transit that is beyond its reasonable control.
The Group recognises that it acts as both an agent and a principal. The Group is a principal if it is responsible for the specified
good or service before that good or service is transferred to a customer. The Group is an agent if it is not responsible for arranging
for the provision of the specified good or service by another party. In this case, the Group does not control the specified good or
service provided by another party before that good or service is transferred to the customer. When the Group acts as an agent,
it recognises revenue in the amount of any fee or commission to which it expects to be entitled in exchange for arranging for the
specified goods or services to be provided by the other party. The Affinity business (see Affinity section of revenue recognition policy)
primarily operates as an agent, and largely recognises only the commission earned as revenue.
Freight Forwarding
Under IFRS 15, freight forwarding revenue is recognised over the period of time based on the principles identified above. Therefore,
revenue will consist of freight delivered during the period as well as a proportion of revenue for service delivered that are in process
as at the end of the reporting period, which is calculated on a time proportioned basis.
Logistics & Warehousing
Logistics & warehousing revenue is recognised over a period of time. Invoicing varies by contract but is typically in line with work
performed. Due to the different contractual arrangements in place, each customer is assessed to determine the amount of work
carried out, which has not been invoiced at the date of the Group’s reporting period. This revenue is recognised by direct reference to
the amount of work carried out to deliver the service and measured relative to cost or over the time period which the warehousing is
provided. Judgement is therefore required when determining the appropriate timing and amount of revenue that can be recognised.
The revenue from handling of incoming products is recognised when a performance obligation is satisfied, but not invoiced at the
reporting date, which is correspondingly accrued on the statement of financial position within contract assets.
Affinity
Revenue is recognised at a point in time only after the performance obligation has been actually satisfied. Affinity and trucking
services revenue largely acts as an agent based on the assessment above, so only commission is recorded as revenue. This largely
relates to provision of DKV fuel cards, which enables the customer to purchase fuel, tolls and other services.
In addition, the Affinity business operates as a reseller ferry crossing, where revenue is recorded at a point in time as it is based on
the performance obligation being delivered. Revenue for this part of the business is recorded as a principal due to the assessments
identified above.
Notes to the Consolidated Financial Statements
Continued
Xpediator plc | Annual report 2022
52
Gross billings (Affinity)
Recoverable disbursements incurred on behalf of our Affinity Division customers based in Romania and the West Balkans include
fuel costs, toll charges and breakdown assistance. The gross billings figure is included within the Groups trade payables and
receivables but are excluded from consolidated income statement revenue. The gross billing revenue number is a non-statutory
measure but is included to make a more meaningful calculation of days sales outstanding and days payable outstanding, so it is
important to understand the level of billings going through the sales and purchase ledgers.
Franchise income
Income relating to franchise fees are not recorded as revenues by the Group but are shown as other income. This revenue arises
from the sales of services to the franchisees. This income is recognised over a period of time based on when the services have been
transferred to the franchisee in accordance with the terms and conditions of the relevant agreements.
Franchise fees comprise of revenue for the initial allocation of the franchise to the respective member, IT support, marketing and
the use of the intellectual property.
Business combinations
Acquisitions of subsidiaries and businesses are accounted for using the purchase method. The cost of the business combination is
measured as the aggregate of the fair values (at the date of exchange) of assets given, liabilities incurred or assumed, and equity
instruments issued by the Group in exchange for control of the acquiree. The Group recognises any non-controlling interest in the
acquired entity on an acquisition-by-acquisition basis either at fair value or at the non-controlling interest’s proportionate share of
the acquired entity’s net identifiable assets.
The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3: Business
Combinations are recognised at their fair values at the acquisition date.
Goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the excess of the cost of the business
combination over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised.
If the cost of the acquisition is less than the Group’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and
contingent liabilities, the difference is recognised directly in the Consolidated Income Statement.
Non-controlling interests
The total comprehensive income of non-wholly owned subsidiaries is attributed to owners of the parent and to the non-controlling
interests in proportion to their relative ownership interests.
Goodwill
Goodwill arising on the acquisition of a business represents any excess of the fair value of the consideration over the fair value of
the identifiable assets and liabilities acquired. The identifiable assets and liabilities acquired are incorporated into the consolidated
financial statements at their fair value to the Group.
Goodwill is not amortised but tested for impairment annually. Any impairment is recognised immediately in the consolidated income
statement and is not subsequently reversed. On disposal of a business, the attributable amount of goodwill is included in the
determination of the profit or loss on disposal.
Impairment of non-financial assets (excluding inventories and deferred tax assets)
Impairment tests on goodwill and intangibles with indefinite useful economic lives are undertaken annually in November as part of
the Group’s budgeting process, except in the year of acquisition when they are tested at the year-end. Other non-financial assets
are subject to impairment tests whenever events or changes in circumstances indicate that their carrying amount may not be
recoverable. Where the carrying value of an asset exceeds its recoverable amount (i.e. the higher of value in use and fair value less
costs to sell), the asset is written down accordingly.
Where it is not possible to estimate the recoverable amount of an individual asset, the impairment test is carried out on the smallest
Group of assets to which it belongs for which there are separately identifiable cash flows; its Cash Generating Units (“CGUs”).
Goodwill is allocated on initial recognition to each of the Group’s CGUs that are expected to benefit from a business combination
that gives rise to the goodwill. Impairment charges are included in profit or loss, except to the extent they reverse gains previously
recognised in other comprehensive income. An impairment loss recognised for goodwill is not reversed.
Foreign currencies
The financial statements of the Group are presented in its reporting currency of Sterling. The functional currency of each Group
entity is the currency of the primary economic environment in which the entity operates.
Transactions in foreign currencies during the period have been converted at the rates of exchange ruling on the date of the
transaction. Assets and liabilities denominated in foreign currencies have been translated at the rates of exchange ruling on
the reporting date. Any gains or losses arising from these conversions are credited or charged to administrative expenses in the
Consolidated Income Statement.
Notes to the Consolidated Financial Statements
Continued
53
2022 Annual Report & Accounts | FINANCIAL STATEMENTS
On consolidation, the results of overseas operations are translated into Sterling at rates approximating to those ruling when the
transactions took place. All assets and liabilities of overseas operations, including goodwill arising on the acquisition of those
operations, are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net
assets at opening rate and the results of overseas operations at actual rate are recognised in other comprehensive income and
accumulated in the translation reserve.
On disposal of a foreign operation, the cumulative exchange differences recognised in the foreign exchange reserve relating to that
operation up to the date of disposal are transferred to the consolidated statement of comprehensive income as part of the profit
or loss on disposal.
Financial assets
The Group classifies its financial assets into the categories discussed below, depending on the purpose for which the asset was
acquired. The Group only has financial assets classified as held at amortised cost. The financial assets comprise of trade and other
receivables and cash and cash equivalents in the consolidated statement of financial position.
Cash and cash equivalents includes cash in hand, deposits held with banks, and – for the purpose of the statement of cash flows –
bank overdrafts. Bank overdrafts are shown within loans and borrowings in current liabilities on the consolidated statement of
financial position, unless there is a right of set-off between bank accounts across the Group. In this instance, the net cash position
will be shown. Deposits held with banks comprise short-term deposits with original maturities of three months or less that are
readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value
These assets arise principally from the provision of goods and services to customers (e.g. trade receivables), but also incorporate
other types of financial assets where the objective is to hold these assets in order to collect contractual cash flows and the contractual
cash flows are solely payments of principal and interest. Trade receivables are recognised initially at the transaction price and other
financial assets are initially recognised at fair value plus transaction costs that are directly attributable to their acquisition or issue.
They are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment.
Impairment provisions for current and non-current trade receivables are recognised based on the simplified approach within IFRS 9
using a historical provision matrix in the determination of the lifetime expected credit losses. During this process the probability of
the non-payment of the trade receivables is assessed. This probability is then multiplied by the amount of the expected loss arising
from default to determine the lifetime expected credit loss for the trade receivables. For trade receivables, which are reported
net, such provisions are recorded in a separate provision account with the loss being recognised within administration costs in
the consolidated statement of comprehensive income. On confirmation that the trade receivable will not be collectable, the gross
carrying value of the asset is written off against the associated provision.
Impairment provisions for receivables from related parties and loans to related parties are recognised based on a forward looking
expected credit loss model. The methodology used to determine the amount of the provision is based on whether there has been a
significant increase in credit risk since initial recognition of the financial asset. For those for which credit risk has increased significantly,
lifetime expected credit losses are recognised, unless further information becomes available contrary to the increased credit risk.
For those that are determined to be permanently credit impaired, lifetime expected credit losses are recognised.
Capital management
The Group monitors its risk to a shortage of funds using a recurring liquidity planning tool. This tool considers the maturity of
both its financial investments and financial assets (e.g. accounts receivables, other financial assets) and projected cash flows from
operations.
The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts,
invoice discounting and long-term loan finance.
Financial liabilities
The Group classifies its financial liabilities into two categories – other financial liabilities and fair value through profit and loss:
Other financial liabilities
The Group’s other financial liabilities include bank loans, confidential invoice discounting facility, trade and other payables and
accruals. Bank borrowings are initially recognised at fair value net of any transaction costs directly attributable to the issue of
the instrument. Such interest bearing liabilities are subsequently measured at amortised cost using the effective interest rate
method, which ensures that any interest expense over the period to repayment is at a constant rate on the balance of the liability
carried in the consolidated statement of financial position. For the purposes of each financial liability, interest expense includes
initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is
outstanding.
Trade payables and other short-term monetary liabilities, which are initially recognised at fair value and subsequently carried at
amortised cost using the effective interest method.
Notes to the Consolidated Financial Statements
Continued
Xpediator plc | Annual report 2022
54
Fair value through profit and loss
This category only comprises of the element of deferred consideration on business combinations, which is contingent on the
performance of the acquired businesses.
Share capital
Financial instruments issued by the Company are classified as equity only to the extent that they do not meet the definition of a
financial liability or financial asset. The company’s ordinary shares are classified as equity instruments.
Leased assets
The Group assesses at inception whether the contract is, or contains, a lease. A lease exists if the contract conveys the right to
control the use of an identified asset for a period of time in exchange for consideration. The Group assessment includes whether:
•
the contract involves the use of an identified asset;
•
the Group has the right to obtain substantially all of the economic benefits from the use of the asset throughout the contract
period; and
•
the Group has the right to direct the use of the asset.
At the commencement of a lease, the Group recognises a right-of-use asset along with a corresponding lease liability.
The lease liability is initially measured at the present value of the remaining lease payments, discounted using the individual entities
incremental borrowing rate. The lease term comprises the non-cancellable period of the contract, together with periods covered
by an option to extend the lease where the Group is reasonably certain to exercise that option based on operational needs and
contractual terms. Subsequently, the lease liability is measured at amortised cost by increasing the carrying amount to reflect
interest on the lease liability and reducing it by the lease payments made. The lease liability is remeasured when the Group changes
its assessment of whether it will exercise an extension or termination option.
Right-of-use assets are initially measured at cost, comprising the initial measurement of the lease liability adjusted for any lease
payments made at or before the commencement date, lease incentives received and initial direct costs. Subsequently, right-of-use
assets are measured at cost, less any accumulated depreciation and any accumulated impairment losses, and are adjusted for
certain remeasurements of the lease liability.
Depreciation is calculated on a straight-line basis over the length of the lease. The Group has elected to apply exemptions for
short-term leases and leases for which the underlying asset is of low value. For these leases, payments are charged to the income
statement on a straight-line basis over the term of the relevant lease. Right-of-use assets are presented within non-current assets
on the face of the statement of financial position, and lease liabilities are shown separately on the statement of financial position in
current liabilities and non-current liabilities depending on the maturity of the lease payments.
Under IFRS 16, right-of-use assets will be tested for impairment in accordance with IAS 36 Impairment of Assets. This has replaced
the previous requirements to recognise a provision for onerous lease contracts.
Payments associated with short-term leases are recognised on a straight-line basis as an expense in the profit or loss. Short term
leases are leases with a lease term of 12 months or less.
Externally acquired intangible assets
Externally acquired intangible assets, other than Goodwill, are initially recognised at cost and subsequently amortised on a
straight‑line basis over their useful economic lives.
Intangible assets are recognised on business combinations if they are separable from the acquired entity or give rise to other
contractual/legal rights. The amounts ascribed to such intangibles are arrived at by using appropriate valuation techniques (see
section related to critical estimates and judgements below).
The significant intangibles recognised by the Group, their useful economic lives and the methods used to determine the cost of
intangibles acquired in a business combination are as follows:
Intangible asset
Useful economic life
Valuation method
Licences and trademarks
3-25 years
Multiple of historic profits
Customer Related
6-10 Years
Excess Earning Model
Technology Based
5 Years
Replacement Cost
Notes to the Consolidated Financial Statements
Continued
55
2022 Annual Report & Accounts | FINANCIAL STATEMENTS
Taxation
The charge for current tax is based on the taxable income for the period. The taxable result for the period differs from the result as
reported in the statement of comprehensive income because it excludes items which are not assessable or disallowed and it further
excludes items that are taxable and deductible in other years. It is calculated using tax rates that have been enacted or substantially
enacted by the statement of financial position date.
Deferred income tax is provided using the liability method, for all temporary differences arising between the tax bases of assets and
liabilities and their carrying values for financial reporting purposes.
Deferred tax assets are recognised only to the extent that future taxable profit will be available such that realisation of the related
tax benefits is probable. The amount of the asset or liability is determined using tax rates that have been enacted or substantively
enacted by the reporting date and are expected to apply when the deferred tax liabilities/ (assets) are settled/(recovered).
Property, plant and equipment
Items of property, plant and equipment are initially recognised at cost. As well as the purchase price, cost includes directly attributable
costs and the estimated present value of any future unavoidable costs of dismantling and removing items. The corresponding
liability is recognised within provisions.
Freehold land is not depreciated. Depreciation on assets under construction does not commence until they are complete and
available for use. Depreciation is provided on all other items of property, plant and equipment so as to write off their carrying value
over their expected useful economic lives. It is provided at the following rates:
Freehold buildings
2%-10% per annum straight line
Fixtures and fittings
20-33% per annum straight line/10% - 25% on reducing balance
Computer equipment
33% per annum straight line/20% - 50% on reducing balance
Motor vehicles
25-33% per annum straight line/20% - 25% on reducing balance
Dividends
Dividends are recognised when they become legally payable. In the case of final dividends, this is when approved by the shareholders
at the annual general meeting.
Holiday pay accrual
All employees accrue holiday pay during the calendar year, the board encourages all employees to use their full entitlement
throughout the year, however in the unlikely case that an employee has untaken holiday pay this is accrued for at the daily salary
costs, including costs of employment, such as social security.
Staff pensions
The Group does not operate a pension scheme for its employees however it does make payments to defined contribution pension
schemes on behalf of employees in the UK in accordance with auto enrolment legislation. The payments made are recognised as an
expense in the period to which they relate.
Share-based payments
Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of the
equity instruments at the grant date.
The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the
vesting period, based on the Group’s estimate of equity instruments that will eventually vest. At each reporting date, the Group revises its
estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in
profit or loss over the remaining vesting period, with a corresponding adjustment to the equity-settled employee benefits reserve.
Equity-settled share-based payment transactions with other parties are measured at the fair value of the goods or services
received, except where the fair value cannot be estimated reliably, in which case they are measured at the fair value of the equity
instruments granted, measured at the date the entity obtains the goods or the counterparty renders the service.
Exceptional items
The Group has adopted an accounting policy and income statement format which seeks to highlight unusual significant items of income
and expense within Group result for the year. The Directors consider that this presentation provides a more representative analysis of the
Group performance by highlighting the impact of one-off items. Such items may include significant restructuring costs, profits or losses
on disposal or termination of operations, gains or losses on disposal of investments, significant impairment of assets, and significant costs
incurred in the relocation of operations. Further details can be found in note 27 to the Consolidated financial statements.
Notes to the Consolidated Financial Statements
Continued
Xpediator plc | Annual report 2022
56
Provisions
The Group has recognised provisions for liabilities of the uncertain timing or amount for leasehold dilapidations. The provision is
measured at the best estimate of the expenditure required to settle the obligation at the reporting date, discounted at a pre-tax
rate reflecting current market assessments of the time value of money and risks specific to the liability. The provision takes into
account the potential that the properties in question may be sublet for some or all of the remaining lease term.
The directors are aware of potential risks relating to the impact of climate change, and consider no provision is required at the year
end (2021: £nil).
2.1 Critical Accounting Estimates and Judgements
The Group makes certain estimates and assumptions regarding the future. Management also needs to exercise judgement in
applying the Group’s accounting policies. Estimates and judgements are continually evaluated based on historical experience and
other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future,
actual experience may differ from these estimates and assumptions.
2.1.1 Principal estimates
•
Estimated impairment of intangible assets (including goodwill)
The Group annually tests whether the carrying value of intangible assets (including goodwill) has suffered any impairment.
These calculations require the use of estimates, both in arriving at the expected future profitability of the cash generating units
(CGUs) and the application of a suitable discount rate in order to calculate the present value of these flows. As the impairment
of the CGUs is based on a future forecast, the Group has used a level of judgement around key assumptions of future cashflows
greater than 12 months. At 31 December 2022, the carrying value of intangible assets (including goodwill) is £20,011,000
(2021: £21,923,000). Details of the impairment and sensitivity of cashflows are disclosed in note 12.
•
Trade receivables
In accordance with IFRS 9, the Group assesses whether the credit risk has increased significantly since initial recognition, the
Group compares the risk of a default occurring on the financial instrument both due within one year and more than one year as
at the reporting date with the risk of a default occurring on the trade receivable as at the date of initial recognition. In making this
assessment, the Group considers both quantitative and qualitative information that is reasonable and supportable, including
historical experience and forward-looking information that is available without undue cost or effort. The Group has trade
receivables less provision for expected credit losses at the year-end of £86,022,000 (2021: £77,699,000). Details of trade
receivables and expected credit loss are disclosed in note 17.
•
Deferred tax assets
Deferred tax assets have been recognised in relation to trading losses generated in the entities, these have been restricted to
those instances where it is probable that the assets will be utilised against future trading profits. The Group has recognised a
deferred tax asset of £813,000 (2021: £904,000) as disclosed in note 8.
2.1.2 Principal judgements
•
Current financial assets
Current financial assets relate to the security deposits held by DKV on behalf of the Group which are refundable on termination
of the agreement which can be served giving three months’ notice hence they are classed as current assets, are disclosed in
note 17.
3. Revenue Analysis by Country
2022
£’000
2021
£’000
United Kingdom
110,643
114,943
Lithuania
156,301
91,261
Romania
55,525
40,582
Bulgaria
41,707
33,369
Serbia
9,997
8,307
Other
12,524
8,132
Total revenue
386,697
296,594
Notes to the Consolidated Financial Statements
Continued
57
2022 Annual Report & Accounts | FINANCIAL STATEMENTS
The table below shows revenue by timing of transfer of goods and services:
3a) Revenue from Contracts with Customers
2022
£’000
2021
£’000
Over a period of time
378,254
290,318
At a point in time
8,443
6,276
Total revenue
386,697
296,594
Revenue is derived from three main divisions: Transport solutions, referred to as Affinity, Freight Forwarding, and Logistics &
Warehousing, as detailed in note 7.
3b) Contract Assets
2022
£’000
2021
£’000
At 1 January
6,256
1,335
Net movement for the year
(2,982)
4,921
At 31 December
3,274
6,256
Contract assets are included within trade and other receivables on the face of the statement of financial position.
3c) Non-Current Assets by Country
2022
£’000
2021
£’000
United Kingdom
93,848
70,493
Romania
6,293
7,806
Bulgaria
5,273
699
Lithuania
13,848
6,547
Serbia
468
102
Other
75
64
Total Non-Current Assets
119,805
85,711
4. Other Operating Income
Other operating income arises mainly from sundry services executed by the Group, not being freight forwarding, logistics and
warehousing or affinity services. Since this is not considered to be part of the main revenue generating activities, the Group presents
this income separately from revenue.
2022
£’000
2021
£’000
Recharges to Franchise members
1,336
1,098
Recovery of fines/penalties
387
(90)
Rental income
392
20
Other
102
450
2,217
1,478
Notes to the Consolidated Financial Statements
Continued
Xpediator plc | Annual report 2022
58
5. Operating Profit
2022
£’000
2021
£’000
Operating profit is stated after charging/(crediting):
Short term hire costs
814
526
Depreciation – owned assets (note 13)
1,341
1,108
Depreciation – right of use assets (note 25)
12,449
8,583
Amortisation of intangible assets (note 12)1
1,742
1,676
Impairment of goodwill arising on acquisition of subsidiary (note 12)
1,474
–
Auditors’ remuneration
330
320
Gain on disposal of property, plant and equipment
(14)
(47)
Loss on disposal of intangible assets
3
–
Loss/(gain) on disposal of right of use assets
10
(143)
Foreign exchange losses/(gains)
832
(344)
1 Amortisation charges on the Group’s intangible assets are recognised in the administrative expenses line item in the consolidated income statement.
The remuneration paid to Crowe U.K. LLP and its associates; the Group’s external auditors is as follows:
2022
£’000
2021
£’000
Audit and Audit Related Services
The audit of the Company and Group financial statements
131
114
The audit of the financial statements of subsidiaries of the Group
189
196
Other assurance services
10
10
Total audit and audit related services
330
320
6. Employee Benefit Expenses
2022
£’000
2021
£’000
Employee benefit expenses (including directors) comprise:
Wages and salaries
37,298
26,440
Short-term non-monetary benefits
113
447
Share based payments (credit)/charge
(108)
88
Defined contribution pension cost
532
367
Social security contributions and similar taxes
2,183
1,695
Total
40,018
29,037
Key management personnel compensation
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the
activities of the Group, including the directors of the Company.
2022
£’000
2021
£’000
Salary and bonuses
1,259
1,985
Compensation for loss of office
202
202
Short-term non-monetary benefits
26
27
Share based payments (credit)/charge
(19)
19
Defined contribution pension cost
13
44
Total
1,481
2,277
Notes to the Consolidated Financial Statements
Continued
59
2022 Annual Report & Accounts | FINANCIAL STATEMENTS
Directors’ remuneration
2022
£’000
2021
£’000
Salary and bonuses
943
907
Compensation for loss of office
80
202
Short-term non-monetary benefits
10
24
Share based payments (credit)/charge
(10)
10
Defined contribution pension cost
4
11
Total
1,027
1,154
Short-term non-monetary benefits comprises of private family medical cover, company car and insurance benefits.
Total remuneration regarding the highest paid Director is as follows:
2022
£’000
2021
£’000
Total aggregate remuneration
232
617
The average number of employees (including directors) during the year was as follows:
2022
2021
Freight forwarding
859
754
Logistics
585
550
Other
67
128
Total
1,511
1,432
7. Segmental Analysis
Types of services from which each reportable segment derives its revenues
The Group had three main divisions: Transport Solutions, referred to as Affinity, Freight Forwarding, and Logistics & Warehousing.
All revenue is derived from the provision of services.
•
Freight Forwarding – This division is the core business and relates to the movement of freight goods across Europe. This division
accounts for the largest proportion of the Group’s business, generating 81% of its external revenues. (2021: 79%)
•
Affinity – This division is the Transport Solution’s arm of the Group. It focuses on the reselling of DKV fuel cards, leasing, ferry
crossings and other associated transport related services. This division accounts for 2% of the Group’s business in terms of
revenue (2021: 2%)
•
Logistics & Warehousing – This division is involved in the warehousing and domestic distribution; delivering 17% of the Group’s
external revenues in 2022 (2021: 19%).
Factors that management used to identify the Group’s reportable segments
The Group’s reportable segments are strategic business units that offer different products and services. They are managed
separately because each business requires different technology and marketing strategies.
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-
maker. The chief operating decision maker has been identified as the management team comprising the Divisional Chief Operating
Officers, the Chief Executive Officer and the Chief Financial Officer.
Notes to the Consolidated Financial Statements
Continued
Xpediator plc | Annual report 2022
60
Measurement of operating segment profit or loss
The Group evaluates segmental performance on the basis of profit or loss from operations calculated in accordance with IFRS 8.
Segment assets and liabilities are measured in the same way in the financial statements, and they are allocated based on the
operations of the segment.
Inter-segment sales are priced at market rates and at arm’s length basis, along the same lines as sales to external customers. This
policy was applied consistently throughout the current and prior period.
Freight
Forwarding
2022
£’000
Logistics &
Warehousing
2022
£’000
Affinity
2022
£’000
Overheads
2022
£’000
Total
2022
£’000
Gross billings
312,596
65,627
189,611
31
567,865
Less recoverable disbursements
–
–
(181,168)
–
(181,168)
Total revenue
312,596
65,627
8,443
31
386,697
Inter-segmental revenue
74
(74)
–
–
–
Total revenue from external customers
312,670
65,553
8,443
31
386,697
Depreciation & amortisation (excluding
right-of-use asset depreciation)
(1,209)
(1,493)
(64)
(317)
(3,083)
Segment profit before central overhead
allocation (excluding exceptional items)
12,572
662
2,709
(6,138)
9,805
Allocation of central overheads
(1,347)
(707)
(17)
2,071
–
Segment profit after central overhead
allocation (excluding exceptional items)
11,225
(45)
2,692
(4,067)
9,805
Net finance costs
(2,801)
Exceptional items
(483)
Profit before income tax
6,521
Total segment assets / equity & liabilities
102,438
84,706
28,966
21,701
237,811
Freight
Forwarding
2021
£’000
Logistics &
Warehousing
2021
£’000
Affinity
2021
£’000
Overheads
2021
£’000
Total
2021
£’000
Gross billings
234,182
56,136
145,919
–
436,237
Less recoverable disbursements
–
–
(139,643)
–
(139,643)
Total revenue
234,182
56,136
6,276
–
296,594
Inter-segmental revenue
(607)
607
–
–
–
Total revenue from external customers
233,575
56,743
6,276
–
296,594
Depreciation & amortisation (excluding
right-of-use asset depreciation)
(973)
(1,482)
(49)
(280)
(2,784)
Segment profit before central overhead
allocation (excluding exceptional items)
9,673
1,498
2,355
(4,864)
8,662
Allocation of central overheads
(1,615)
(802)
(79)
2,496
–
Segment profit after central overhead
allocation (excluding exceptional items)
8,058
696
2,276
(2,368)
8,662
Net finance costs
(1,765)
Exceptional items
(2,610)
Profit before income tax
4,287
Total segment assets / equity & liabilities
88,065
71,281
25,917
10,862
196,125
Notes to the Consolidated Financial Statements
Continued
61
2022 Annual Report & Accounts | FINANCIAL STATEMENTS
8. Net Finance Costs
2022
£’000
2021
£’000
Finance income:
Deposit account interest
47
143
Interest receivable on Benfleet vendor income
–
29
Total finance income
47
172
Finance costs:
Bank loan & confidential invoicing discount interest
(687)
(352)
Right-of-use asset interest
(2,161)
(1,585)
Total finance costs
(2,848)
(1,937)
Net finance costs
(2,801)
(1,765)
9. Income Tax
Analysis of tax expense
2022
£’000
2021
£’000
Current tax:
Tax on profits for the year
4,004
2,338
Adjustments in respect of prior periods
(65)
(60)
Total current tax payable
3,939
2,278
Deferred tax credit
(238)
132
Total tax expense in consolidated statement of profit or loss
3,701
2,410
The reconciling items for the difference between the actual tax charge for the year and the standard rate of corporation tax in UK
(the ultimate parent company’s tax residency) applied to profits for the year are as follows:
2022
£’000
2021
£’000
Profit before tax
6,521
4,287
UK tax charge at 19%
1,239
814
Overseas tax charge
(976)
(616)
Expenses not deductible for tax purposes
1,252
728
Movement in deferred tax
(238)
(134)
Remeasurement of deferred tax – change in the UK tax rate
–
266
Unrecognised deferred tax
2,515
1,826
Adjustment in respect of prior periods
(65)
(60)
Other
(26)
(414)
Total tax expense
3,701
2,410
Deferred Tax
Assets – Arising from Trading losses
2022
£’000
2021
£’000
Balance as at 1 January
904
707
Movement in the year as a result of trading
(91)
(20)
Effect of change in rate of taxation
–
217
Balance as at 31 December
813
904
Notes to the Consolidated Financial Statements
Continued
Xpediator plc | Annual report 2022
62
Liabilities
2022
£’000
2021
£’000
Balance as at 1 January
(2,011)
(1,697)
(Charge)/release to income statements
328
154
Effect of change in rate of taxation
–
(483)
Movement in foreign exchange
(19)
15
Balance as at 31 December
(1,702)
(2,011)
The deferred tax asset relates to losses carried forward at the rate of tax in the relevant jurisdiction.
The UK government announced that the corporation tax rate of 25% will be enacted for the tax year 1 April 2023 to 31 March 2024
and this is the rate reflected in these financial statements. Deferred taxes at the statement of financial position date have been
measured using these enacted tax rates and reflected in these financial statements.
In addition, the Group has potential deferred tax assets for trading losses totalling £8,481,000 (2021: £3,170,000) arising from
certain subsidiaries across the Group. These assets have not been recognised due to insufficient certainty that the suitable profits
will be generated in the foreseeable future.
The deferred tax liabilities relate to liabilities arising as part of the Group’s acquisitions.
10. Earnings Per Share
2022
‘000
2021
‘000
Basic weighted average number of shares
141,688
141,660
Potentially dilutive share options
–
267
Diluted weighted average number of shares
141,688
141,927
2022
£’000
2021
£’000
(Loss)/profit for the year attributable to owners of the parent company
(178)
417
Earnings pence per share - basic
(0.13)
0.29
Earnings pence per share - diluted
N/a
0.29
(Loss)/profit for the year attributable to owners of the parent company
(178)
417
Exceptional items (note 27)
483
2,610
Amortisation of intangible assets arising from acquisitions (note 12)
1,471
1,472
Impairment of goodwill arising on acquisition of subsidiary (note 12)
1,474
–
Additional interest charge due to IFRS16 accounting standard change
1,046
714
Adjusted profit for the year attributable to owners of the parent company
4,296
5,213
Adjusted earnings pence per share – basic
3.03
3.68
Adjusted earnings pence per share – diluted
3.030
3.67
11. Dividends
2022
£’000
2021
£’000
Final dividend of £nil (2021: 0.60p) per ordinary share
–
850
Interim dividend of £nil (2021: 0.50p) per ordinary share
–
709
Subject to approval by shareholders, the Board is not recommending a final dividend to be paid to shareholders, whilst no interim
dividend was paid during the year. In 2021 a total dividend of 1.10p per share was paid.
However, pursuant to the Offer and conditional upon shareholder approval and the Offer completing, a special dividend of
2p per share will be paid by the Company, further details as to the timing of which will be provided as appropriate, in due course.
Notes to the Consolidated Financial Statements
Continued
63
2022 Annual Report & Accounts | FINANCIAL STATEMENTS
12. Intangible Assets
Group
COST
Licences and
trademarks
£’000
Goodwill
£’000
Customer
Related
£’000
Technology
Related
£’000
Total
£’000
At 1 January 2022
3,387
14,160
12,258
510
30,315
Additions
1,172
–
–
–
1,172
Transfer
(253)
253
–
–
–
Disposals
(4)
–
–
–
(4)
Exchange differences
182
–
–
–
182
At 31 December 2022
4,484
14,413
12,258
510
31,665
AMORTISATION
At 1 January 2022
952
1,845
5,241
354
8,392
Charge for the year
364
–
1,276
102
1,742
Impairment
–
1,474
–
–
1,474
Disposals
(1)
–
–
–
(1)
Exchange differences
47
–
–
–
47
At 31 December 2022
1,362
3,319
6,517
456
11,654
NET BOOK VALUE
At 31 December 2022
3,122
11,094
5,741
54
20,011
At 1 January 2022
2,435
12,315
7,017
156
21,923
COST
Licences
£’000
Goodwill
£’000
Customer
Related
£’000
Technology
Related
£’000
Total
£’000
At 1 January 2021
3,234
14,160
12,258
510
30,162
Additions
309
–
–
–
309
Disposals
(90)
–
–
–
(90)
Exchange differences
(66)
–
–
–
(66)
At 31 December 2021
3,387
14,160
12,258
510
30,315
AMORTISATION
At 1 January 2021
751
1,845
3,871
252
6,719
Charge for the year
204
–
1,370
102
1,676
Disposals
(90)
–
–
–
(90)
Exchange differences
87
–
–
–
87
At 31 December 2021
952
1,845
5,241
354
8,392
NET BOOK VALUE
At 31 December 2021
2,435
12,315
7,017
156
21,923
At 1 January 2021
2,483
12,315
8,387
258
23,443
The goodwill included in the above note, relates to acquisition of Pallet Express Srl in January 2016, Easy Managed Transport
Limited in March 2017, Benfleet Forwarding Limited in October 2017, Regional Express Limited in November 2017, Anglia
Forwarding Group Limited in June 2018, Import Services Limited in July 2018, International Cargo Centre Limited in April 2020
and Nidd Transport Limited in October 2020.
Goodwill arising on acquisition of a UK freight forwarding subsidiary was written down during the year by £1,474,000 (2021: £nil),
reflecting expected profitability.
Notes to the Consolidated Financial Statements
Continued
Xpediator plc | Annual report 2022
64
Annual test for impairment
The Group carries out its impairment tests annually in November as part of the budget process and all newly acquired entities are
also reviewed for impairment at the reporting date.
Upon acquisition the goodwill and other intangibles are calculated at Cash Generating Unit (“CGU”) level, these are then measured
based on forecast cash flow projections, the first year of which is based on the CGU’s current annual financial budget which has
been approved by the board. The cash flow projections for years two to five have been derived based on growth rates that are
considered to be in line with the market expectations.
The recoverable amount is determined based on value in use calculations. The use of this method requires the estimation of future
cash flows and the determination of a discount rate in order to calculate the present value of the cash flows.
In determining the future free cash flow, the main drivers have been revenue and Earnings Before Interest and Tax (“EBIT”) margins,
with margins remaining at expected levels.
The directors have reviewed the future profit and cash flow forecasts for the next five years and applying a discount rate of between
13.8% to 17.3% to the cash flow projections when determining the net present value of these cash flow. Goodwill arising on acquisition
of a UK freight forwarding subsidiary was written down during the year by £1,474,000 (2021: £nil), reflecting expected profitability.
The Directors believe there is sufficient headroom in the value of the remaining CGUs to not have to further impair the goodwill.
Key assumptions used in the impairment calculations are as follows:
Entity
Division
Impairment
WACC %
Short term
Revenue
Growth Rate %
Long Term
Revenue
Growth Rates %
Pallet Express Srl
Logistics & Warehousing
15.4
13.1
3.0
Delamode Logistics Limited
Logistics & Warehousing
14.6
(2.7)
3.5
Delamode Anglia Limited
Freight Forwarding
17.3
1.0
1.3
Regional Express Limited
Logistics & Warehousing
15.4
5.4
3.0
Nidd Transport Limited
Freight Forwarding
13.8
7.2
3.3
The WACC of the Group has been calculated at a rate of between 13.8% to 17.3% with each CGU being adjusted to take into
consideration a specific Company premium risk factor.
The short-term growth rate for each CGU uses several factors including the expected new business or the loss of existing business.
These growth rates are based on the internal three-year plans submitted by local management and reviewed through a thorough
board process during the annual budget cycle.
Sensitivity to changes in key assumptions
Impairment testing is dependent on management’s estimates and judgements, particularly as they relate to the forecasting of
future cashflows, the discount rates selected and expected long-term growth rates.
The Group has conducted sensitivity analysis on the impairment test of the CGU’s classified within continuing operations. Goodwill
arising on acquisition of a UK freight forwarding subsidiary was written down during the year by £1,474,000 (2021: £nil), reflecting
expected profitability and considering sensitivity in key assumptions, as detailed below (inclusive of the write down):
Assumption
Estimate
used
Change
£’000
Excess / (Shortfall)
£’000
Increase in long term growth
1.3%
+ 1.0%
2,599
Decrease in long term growth
1.3%
- 1.0%
1,515
Increase in WACC
17.3%
+ 1.0%
1,587
Decrease in margins
Forecast
- 0.25%
1,225
Delay in turnaround – EBIT as % of revenue in 2023/2024
1.8%
- 3.4%
(684)
The directors believe that there is sufficient headroom in the value of the remaining business to not have to further impair the
goodwill.
Notes to the Consolidated Financial Statements
Continued
65
2022 Annual Report & Accounts | FINANCIAL STATEMENTS
13. Property, Plant and Equipment
Group
Freehold
property
£’000
Fixtures
and fittings
£’000
Motor
vehicles
£’000
Computer
equipment
£’000
Totals
£’000
COST
At 1 January 2022
322
4,248
921
3,824
9,315
Additions
131
548
79
399
1,157
Disposals
–
(183)
(132)
(141)
(456)
Transfers between categories
–
230
(99)
(131)
–
Exchange differences
43
35
(65)
5
18
At 31 December 2022
496
4,878
704
3,956
10,034
DEPRECIATION
At 1 January 2022
121
1,881
529
2,221
4,752
Charge for the year
41
628
87
585
1,341
Eliminated on disposal
–
(174)
(119)
(104)
(397)
Transfers between categories
–
136
(1)
(135)
–
Exchange differences
1
27
(41)
(47)
(60)
At 31 December 2022
163
2,498
455
2,520
5,636
NET BOOK VALUE
At 31 December 2022
333
2,380
249
1,436
4,398
At 1 January 2022
201
2,367
392
1,603
4,563
Group
Freehold
property
£’000
Fixtures
and fittings
£’000
Motor
vehicles
£’000
Computer
equipment
£’000
Totals
£’000
COST
At 1 January 2021
258
2,666
1,024
2,745
6,693
Additions
106
1,717
145
1,294
3,262
Disposals
(31)
(74)
(209)
(160)
(474)
Exchange differences
(11)
(61)
(39)
(55)
(166)
At 31 December 2021
322
4,248
921
3,824
9,315
DEPRECIATION
At 1 January 2021
97
1,462
671
1,767
3,997
Charge for the year
35
513
61
499
1,108
Eliminated on disposal
(8)
(70)
(176)
(12)
(266)
Exchange differences
(3)
(24)
(27)
(33)
(87)
At 31 December 2021
121
1,881
529
2,221
4,752
NET BOOK VALUE
At 31 December 2021
201
2,367
392
1,603
4,563
At 1 January 2021
161
1,204
353
978
2,696
Notes to the Consolidated Financial Statements
Continued
Xpediator plc | Annual report 2022
66
14. Subsidiaries
The subsidiaries of Xpediator Plc, all of which have been included in these consolidated financial statements, are as follows:
Name
Registered
Office
Country of
incorporation
Proportion of
ownership
interest
2022
Proportion of
ownership
interest
2021
Delamode Holdings Ltd
1
United Kingdom
100%
100%
Delamode Distribution UK Ltd
1
United Kingdom
51%
51%
Delamode Plc
1
United Kingdom
100%
100%
Delamode Property Ltd
1
United Kingdom
100%
100%
Xpediator Services Limited
1
United Kingdom
100%
100%
Easy Managed Transport Limited
1
United Kingdom
100%
100%
Benfleet Forwarding Limited
1
United Kingdom
100%
100%
Regional Express Limited
1
United Kingdom
100%
100%
Delamode International Logistics Ltd (formerly Import Services Ltd)
1
United Kingdom
100%
100%
Anglia Forwarding Group Limited
1
United Kingdom
100%
100%
Delamode Anglia Ltd (formerly Anglia Forwarding Ltd)
1
United Kingdom
100%
100%
Traker International Limited
1
United Kingdom
100%
100%
Delamode Nidd Ltd (formerly Nidd Transport Ltd)
1
United Kingdom
100%
100%
International Cargo Centre Limited
1
United Kingdom
100%
100%
Affinity Transport Solutions Srl
2
Romania
100%
100%
Delamode Moldova Srl
3
Moldova
100%
100%
Delamode Bulgaria OOD
4
Bulgaria
90%
90%
Delamode Balkans DOO
5
Serbia
100%
100%
Affinity Balkans DOO
6
Montenegro
100%
100%
Delamode Macedonia
7
Macedonia
100%
100%
Delamode Baltics UAB
8
Lithuania
80%
80%
Delamode Estonia OÜ
9
Estonia
80%
80%
Delamode Romania Srl
2
Romania
100%
100%
Affinity Leasing IFN
2
Romania
99.95%
99.95%
Delamode Group Limited
10
Malta
100%
100%
Delamode Group Holdings Limited
10
Malta
100%
100%
Pallet Express Srl
11
Romania
100%
100%
Pallex Hungary
12
Hungary
100%
100%
Regional Express Gmbh
13
Germany
100%
100%
Delamode Netherlands BV
14
Netherlands
100%
-
Delamode Finland OY
15
Finland
100%
-
Delamode Group Holdings Limited, Easy Managed Transport Limited, Benfleet Forwarding Limited, Regional Express Limited,
Delamode International Logistic Limited, Anglia Forwarding Group Limited, Delamode Nidd Limited and Delamode Netherlands BV,
are the only Subsidiaries held directly by Xpediator Plc.
1
700 Avenue West, Skyline 120, Braintree, Essex, CM77 7AA, United Kingdom
2
Bulevardul Timişoara, Nr. 4A, Etaj 1, Bucureşti Sectorul 6, 061328, Romania
3
Bd. Moscova 21/5 of. 1011 MD-2068, Chisinau, Republic of Moldova
4
361 Tsarigradsko Shose Boulevard, 1582, Sofia, Bulgaria
5
Bulevar Oslobodenja 113, 11010 Vozdovac, Belgrade, Serbia
6
Bul. Dzordza, Vasingtona 51/43, Podgorica, 81000, Montenegro
7
Bul. Llinden No 109/1-15, 1000 Skopje, Macedonia
Notes to the Consolidated Financial Statements
Continued
67
2022 Annual Report & Accounts | FINANCIAL STATEMENTS
8
Naugarduko g.98 LT-03160, Vilnius, Lithuania
9
Pärnu mnt 160e, 11318 Tallinn, Estonia
10 Europa Business Centre, Level 3 – Suite 701, Dun Karn Street Birkirkara BKR 9034, Malta
11
Stefan cel Mare street, no. 197A, Sibiu, 550321, Romania
12 1141 Budapest Szuglo utcs 82, Hungary
13 Darmstadter Landstrasse 116, Frankfurt, 60598, Germany
14 Venneveld 9, 4705RR Roosendaal, the Netherlands
15 Malminkaari 23 A 00700 Helsinki, Finland
The following companies are entitled to exemption from audit under Section 479A of the UK Companies Act 2006 relating to
subsidiary companies:
Company
Registration
Delamode Property Limited
06895332
Traker International Limited
02068943
International Cargo Centre Limited
02932640
Xpediator Services Limited
09724594
Anglia Forwarding Group Limited
07148692
Benfleet Forwarding Limited
02218468
Easy Managed Transport Limited
02293696
Delamode Holdings Limited
05751316
Delamode Plc
03716214
15. Non–Controlling Interests
Non-controlling interests (“NCI”) held in the Group are as follows:
2022
2021
Delamode Baltics UAB
20.0%
20.0%
Delamode Estonia OÜ
20.0%
20.0%
Delamode Bulgaria OOD
10.0%
10.0%
Affinity Leasing IFN
0.05%
0.05%
Delamode Distribution UK Limited
49.0%
49.0%
The summarised financial information in relation to Delamode Bulgaria OOD and Delamode Baltics UAB before intra-Group
eliminations, is presented below together with amounts attributable to NCI:
Delamode
Bulgaria OOD
£’000
Delamode
Baltics UAB
£’000
Total NCI at 1 January 2022
201
1,715
Non-controlling interest in results for the year
142
2,814
Non-controlling interest in dividends for the year
(90)
(629)
Non-controlling Interest in translation adjustment
11
94
Total NCI at 31 December 2022
264
3,994
Notes to the Consolidated Financial Statements
Continued
Xpediator plc | Annual report 2022
68
Delamode
Bulgaria OOD
£’000
Delamode
Baltics UAB
£’000
Share Capital
–
5
Reserves
264
3,989
Total NCI at 31 December 2022
264
3,994
Income Statement
Delamode Bulgaria OOD
Delamode Baltics UAB
2022
£’000
2021
£’000
2022
£’000
2021
£’000
Revenue
42,503
34,428
158,726
93,066
Cost of sales
(37,825)
(30,598)
(128,231)
(78,135)
Gross profit
4,678
3,830
30,495
14,931
Administrative expenses
(3,335)
(2,522)
(15,394)
(8,298)
Other income
227
21
451
164
Operating profit
1,570
1,329
15,552
6,797
Finance income/(costs)
(52)
(15)
350
217
Profit before tax
1,518
1,314
15,902
7,014
Tax expense
(153)
(132)
(2,366)
(1,051)
Profit after tax
1,365
1,182
13,536
5,963
Profit after tax attributable to non-controlling interests
137
118
2,707
1,193
Statement of Financial Position
Delamode Bulgaria OOD
Delamode Baltics UAB
For the year to 31 December
2022
£’000
2021
£’000
2022
£’000
2021
£’000
Assets:
Non-current trade and receivables
31
17
1,548
465
Property plant and equipment
65
80
383
240
Right-of-use assets
5,187
622
12,079
6,240
Inventories
33
13
56
175
Trade and other debtors
6,962
7,462
35,497
22,011
Cash and cash equivalents
1,614
914
6,708
1,495
13,892
9,108
56,271
30,626
Liabilities:
Trade and other payables
6,080
6,477
23,821
15,813
Lease liabilities – right-of-use assets
5,167
622
11,801
6,240
Loans and other borrowings
–
–
680
–
11,247
7,099
36,302
22,053
Total net assets
2,645
2,009
19,969
8,573
Accumulated non-controlling interests
264
201
3,994
1,715
Notes to the Consolidated Financial Statements
Continued
69
2022 Annual Report & Accounts | FINANCIAL STATEMENTS
Statement of Cash Flows
Delamode Bulgaria OOD
Delamode Baltics UAB
For the year to 31 December
2022
£’000
2021
£’000
2022
£’000
2021
£’000
Cash flows from operating activities
1,859
848
8,684
352
Cash flows from investing activities
(34)
(21)
(3,168)
525
Cash flows from financing activities
(1,246)
(973)
(754)
(1409)
Increase/(Decrease) in cash and cash equivalents
579
(146)
4,762
(532)
Cash and cash equivalents at beginning of year
914
1,156
1,495
2,336
Effect of foreign exchange rate movements
121
(96)
451
(309)
Cash and cash equivalents at end of year
1,614
914
6,708
1,495
The NCI of all the other shareholders, that are not 100% owned by the Group are considered to be immaterial.
16. Investments
Cost
Participating
interests
£’000
At 1 January 2022
–
Movement
33
At 31 December 2022
33
Net Book Value
At 31 December 2022
33
17. Trade and Other Receivables
Group
2022
£’000
2021
£’000
Current:
Trade receivables
90,867
82,127
Less: provision for impairment of trade receivables
(4,845)
(4,428)
86,022
77,699
Current financial assets
4,915
5,082
Prepayments and contract assets
10,584
10,845
Other receivables
3,076
4,869
Total
104,597
98,495
Non–Current
Trade and other receivables
1,247
–
Current financial assets relate to the security deposits held by DKV on behalf of the Group which are refundable on termination of
the agreement which can be served giving three months’ notice hence they are classed as current assets.
The Group applies the IFRS 9 simplified approach to measuring expected credit losses using a lifetime expected credit loss
provision for trade receivables and contract assets. To measure expected credit losses on a collective basis, trade receivables and
contract assets are grouped based on similar credit risk and aging. The contract assets have similar risk characteristics to the trade
receivables for similar types of contracts.
The expected loss rates are based on the Group’s historical credit losses experienced. The historical loss rates are then adjusted to
reflect current and forward-looking information, any known legal and specific economic factors, including the credit worthiness and
ability of the customer to settle the receivable.
Notes to the Consolidated Financial Statements
Continued
Xpediator plc | Annual report 2022
70
The movements in the impairment allowance for trade receivables are as follows:
Group
2022
£’000
2021
£’000
At 1 January
4,428
2,976
Amount charged to the Consolidated Income Statement in the year
863
1,475
Receivables written off during the year as uncollectible
(446)
(23)
At 31 December
4,845
4,428
The lifetime expected loss provision for trade receivables and contract assets is as follows:
At 31 December 2022
Current
£’000
More than
30 Days Past
Due
£’000
More than
60 Days Past
Due
£’000
More than
90 Days Past
Due
£’000
Total
£’000
Expected loss rate
0.27%
4.24%
6.14%
66.73%
Gross carrying amount
80,120
5,471
1,978
6,412
93,981
Loss provision
213
232
121
4,279
4,845
At 31 December 2021
Current
£’000
More than
30 Days Past
Due
£’000
More than
60 Days Past
Due
£’000
More than
90 Days Past
Due
£’000
Total
£’000
Expected loss rate
1.2%
12.9%
6.0%
74.9%
Gross carrying amount
80,901
2,197
1,128
4,157
88,383
Loss provision
963
283
68
3,114
4,428
18. Trade and Other Payables
Group
2022
£’000
2021
£’000
Current:
Trade and other payables
76,475
72,094
Social security and other taxes
3,838
2,032
Other creditors
2,988
6,760
Accruals
4,135
5,333
Total Trade and other payables
87,436
86,219
Non–current
Trade and other payables
273
343
19. Bank and Other Loans
Group
2022
£’000
2021
£’000
Current:
Overdrafts
879
–
Bank loans
912
1,891
Confidential invoice discounting facility
10,822
14,602
12,613
16,493
Non-current:
Bank loans - 1-2 years
913
–
Bank loans - 2-5 years
3,170
–
Bank loans due after 5 years repayable by instalments
–
–
4,083
–
Notes to the Consolidated Financial Statements
Continued
71
2022 Annual Report & Accounts | FINANCIAL STATEMENTS
The Lloyds bank loan, on which interest was charged at both a fixed rate of 6.4% and a variable rate of 1.1% above the Bank of
England base rate, was repaid in full in January 2022. This was replaced with a loan facility from Investec bank, in which interest is
payable at a variable rate of 4.5% above the Bank of England base rate and is repayable by April 2026.
The Lloyds bank loan was partially guaranteed by the personal assets of some of the Directors and Key Management of the Group,
which has since been satisfied.
The book value and fair value of loans and borrowings are as follows:
Non-Current
2022
£’000
2021
£’000
Bank borrowings and others
– Secured
4,083
–
Current
Bank borrowings and others
- Secured
12,613
16,493
Total loans and borrowings
16,696
16,493
Sterling
16,696
16,493
Bank borrowings and overdrafts are secured by a fixed and floating charge over the Group’s assets.
The movements in the bank and other loans are as follows:
Group
2022
£’000
2021
£’000
At 1 January
16,493
5,962
New borrowings in the year
6,379
10,869
Borrowings repaid during the year
(6,176)
(338)
At 31 December
16,696
16,493
20. Provisions
Other provisions relate to an assessment of dilapidation of leasehold properties. In each instance, management undertake surveys
from time to time to understand the work required to bring the leasehold properties back to their original condition. The additions
relate to the new leasehold properties and the provisions at each reporting date are as follows:
2022
£’000
2021
£’000
At 1 January
2,191
2,153
Additions during the year
1,568
38
At 31 December
3,759
2,191
21. Financial Instruments - Risk Management
The Group is exposed through its operations to the following financial risks:
•
Credit risk
•
Market price risk
•
Cash flow and fair value interest rate risk
•
Foreign exchange risk, and
•
Liquidity risk.
Notes to the Consolidated Financial Statements
Continued
Xpediator plc | Annual report 2022
72
The Group is exposed to risks that arise from its use of financial instruments. This note describes the Group’s objectives, policies and
processes for managing those risks and the methods used to measure them. Further quantitative information in respect of these risks
is presented throughout these financial statements.
There have been no substantive changes in the Group’s exposure to financial instrument risks, its objectives, policies and processes for
managing those risks or the methods used to measure them from previous periods unless otherwise stated in this note.
Principal financial instruments
The principal financial instruments used by the Group, from which financial instrument risk arises, are as follows:
•
Trade and other receivables (excluding prepayments)
•
Cash and cash equivalents
•
Trade and other payables
•
Bank overdrafts
•
Bank loans and invoice discounting
•
Lease liabilities
Financial instruments by category:
Financial assets at amortised cost
2022
£’000
2021
£’000
Cash and cash equivalents
13,126
11,684
Trade and other receivables
99,188
87,650
Total financial assets at amortised costs
112,314
99,334
Financial Liabilities
Fair value through
profit and loss
Loans and other payables
2022
£’000
2021
£’000
2022
£’000
2021
£’000
Trade and other payables
–
–
87,709
81,229
Overdrafts, bank loans and invoice discounting
–
–
16,696
16,493
Lease liabilities
–
–
96,052
59,678
Total financial liabilities
–
–
200,457
157,400
Financial instruments not measured at fair value
These include cash and cash equivalents, trade and other receivables (excluding prepayments), trade and other payables, overdrafts
and loans and borrowings. Due to their short-term nature, the carrying value of cash and cash equivalents, overdrafts, trade and
other receivables, trade and other payables approximates their fair value.
The Group’s activities expose it to a variety of financial risks: credit risk, market risk (including foreign exchange risk, price risk and
cashflow and fair value interest rate risk) and liquidity risk. The financial risks relate to the following financial instruments: cash and
cash equivalents, trade and other receivables (excluding prepayments), trade and other payables, and loans and borrowings. The
accounting policies with respect to these financial instruments are described in note 2.
Risk management is carried out by the directors under policies, where they identify and evaluate financial risks in close co‑operation
with the Group’s operating units. The directors provide principles for overall risk management.
The reports on the risk management are produced periodically to the key management personnel of the Group.
(a) Credit Risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual
obligations. The Group is mainly exposed to credit risk from credit sales. It is Group policy, implemented locally, to assess the credit
risk of new customers before entering contracts. Such credit ratings are taken into account by local business practices.
Credit risk also arises from cash and cash equivalents and deposits with banks and financial institutions. For banks and financial
institutions, the most suitable bank in the local territory is selected.
Notes to the Consolidated Financial Statements
Continued
73
2022 Annual Report & Accounts | FINANCIAL STATEMENTS
A significant amount of cash is held with the following institutions:
Cash at bank
2022*
Rating
2022
£’000
2021
£’000
Barclays Bank plc
A+
436
737
Lloyds Bank plc
A+
725
4,274
Raiffeisen Bank AG
A-
3,496
3,903
NatWest group plc
A
57
14
Swedbank
A+
5,659
1,217
HSBC
A+
95
165
Bank of Transylvania
BB+
415
194
Unicredit Bulbank
A-
135
30
Hipotekarna Bank
N/a
260
222
Erste Bank
A+
252
187
Luminor Bank AB
N/a
322
114
Ebury
N/a
525
114
PKO Bank Polski
N/a
244
114
Other
505
399
Total
13,126
11,684
* Based on Standard & Poor Rating
(b) Market risk
(i) Price risk
Certain aspects of the commercial terms relating to the Affinity division are, directly linked to the commodity costs of fuel purchased
by their clients at roadside fuelling stations across Europe. As such there is a risk arising from price changes relating to the fuel
prices offered at the respective fuelling stations. In order to manage this risk, the Group varies the way it charges its commissions.
The table below shows the sensitivity analysis to possible changes in fuel prices to which the Group is exposed at the end of each
year, with all other variables remaining constant. This arises due to the commercial arrangements the Affinity division has with its
clients, whereby it will generate income in the form of commissions based on the value of fuel purchased by its clients.
Petrol price risk effect on net profit sensitivity analysis:
2022
£’000
2021
£’000
Price increased by 10%
271
166
Price decreased by 10%
(271)
(166)
The Group is exposed to the market risk with respect to its operating income which is subject to changes in performance, exchange
fluctuations and other market influences both economic and political. The directors manage this risk by reviewing on a regular basis
market fluctuation arising on the Group’s activities.
(ii) Cash flow and fair value interest rate risk
As the Group has no significant interest-bearing assets, its income and operating cash flows are substantially independent of
changes in market interest rates.
The risk associated with interest-bearing debts is mitigated by utilising a mix of fixed and variable interest rate loans, as well as a
Confidential Invoice Discounting Facility (“CID”).
Interest rate risk effect on net profit sensitivity analysis:
2022
£’000
2021
£’000
Interest rates increased by 0.25%
(42)
(45)
Interest rates decreased by 0.25%
42
45
The Group’s cash flow and fair value interest rate risk is periodically monitored by the directors. The cash flow and fair value risk
policy is approved by the directors.
Receivables and trade and other payables are interest free and have settlement dates within one year.
A sensitivity analysis is normally based on a change in an assumption while holding all other assumptions constant. In practice, this
is unlikely to occur, and change in some of the assumptions may be correlated – for example, change in exchange rates and change
in market values.
Notes to the Consolidated Financial Statements
Continued
Xpediator plc | Annual report 2022
74
(iii) Foreign exchange risk
Foreign exchange risk arises because the Group has operations located in various parts of the world whose functional currency
is not the same as the presentational currency of the Group. Foreign exchange risk also arises when individual companies enter
transactions denominated in a currency other than their functional currency. Certain assets of the Group comprise amounts
denominated in foreign currencies. Similarly, the Group has financial liabilities denominated in foreign currency. In general, the
Group seeks to maintain the financial assets and financial liabilities in each of the foreign currencies at a reasonably comparable
level, thereby providing a natural hedge against foreign exchange risk.
GBP
£’000
Euro
£’000
RON
£’000
MDL
LEU
£’000
BGN
LEV
£’000
RSD
Dinar
£’000
HUF
Forints
£’000
MKD
Denar
£’000
Total
£’000
At 31 December 2022
Financial assets
25,051
44,159
32,389
332
8,103
2,204
1
75
112,314
Financial liabilities
110,601
49,159
28,528
240
9,282
2,618
–
29
200,457
At 31 December 2021
Financial assets
27,235
30,487
31,812
141
7,307
2,257
2
93
99,334
Financial liabilities
82,667
32,460
32,290
77
6,655
3,027
40
184
157,400
An analysis of the Group’s exposure to foreign exchange risk, illustrating the impact on the net financial assets of a 10% movement
in each of the key currencies to which the Group is exposed, is shown below
Foreign currency risk sensitivity analysis:
2022
£’000
2021
£’000
Euro (EUR)
Strengthened by 10%
(430)
(53)
Weakened by 10%
430
53
Romanian Lei (RON)
Strengthened by 10%
386
(90)
Weakened by 10%
(386)
90
Moldavian Leu (MDL)
Strengthened by 10%
9
7
Weakened by 10%
(9)
(7)
Serbian Dinar (RSD)
Strengthened by 10%
(41)
38
Weakened by 10%
41
(38)
Bulgarian Lev (BGN)
Strengthened by 10%
(188)
29
Weakened by 10%
188
(29)
Macedonian Denar (MKD)
Strengthened by 10%
5
(8)
Weakened by 10%
(5)
8
Notes to the Consolidated Financial Statements
Continued
75
2022 Annual Report & Accounts | FINANCIAL STATEMENTS
(c) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash flow for operations. The Group manages its risk to shortage
of funds by monitoring forecast and actual cash flows.
The Group monitors its risk to a shortage of funds using a recurring liquidity planning tool. This tool considers the maturity of both its
financial investments and financial assets (e.g. trade receivables, other financial assets) and projected cash flows from operations.
At 31 December 2022
Up to
12 months
£’000
Between
1 and 2
years
£’000
Between
2 and 5
years
£’000
Over
5 years
£’000
Trade and other payables
87,436
273
–
–
Overdrafts, bank loans & invoice discounting
12,977
1,205
3,458
–
Lease liabilities
15,310
13,254
26,663
64,454
Total
115,723
14,732
30,121
64,454
At 31 December 2021
Up to
12 months
£’000
Between
1 and 2
years
£’000
Between
2 and 5
years
£’000
Over
5 years
£’000
Trade and other payables
80,886
343
–
–
Bank loans & invoice discounting
16,493
–
–
–
Lease liabilities
9,053
8,528
13,852
28,245
Total
106,432
8,871
13,852
28,245
22. Called Up Share Capital
Ordinary Shares of £0.05 each
2022
Number
2022
£’000
2021
Number
2021
£’000
At the beginning of the year
141,688,425
7,084
141,633,175
7,082
Issued during the year
–
–
55,250
2
At the end of the year
141,688,425
7,084
141,688,425
7,084
Deferred Shares of £1.00 each
50,000
50
50,000
50
Total shares at the end of the year
141,738,425
7,134
141,738,425
7,134
Shares Issued
On 8 July 2021, SP Angel exercised their option to subscribe for 55,250 Ordinary Shares at the price of £0.24 per share.
23. Reserve Description and Purpose
Share premium is the amount subscribed for share capital in excess of nominal value.
Equity reserve represents the cost of the share options granted that have not yet been exercised.
Translation reserve represents the difference arising on the translation of the net assets and results of subsidiaries into the
presentation currency.
Merger reserve represents the difference between the nominal value of consideration paid for shares acquired in entities under
common control and the nominal value of those shares. This arises as a result of the business combination falling outside the scope
of IFRS 3 and merger accounting being applied in place of acquisition accounting. In addition, the premium on the fair value in excess
of the nominal value of shares issued in consideration of business combinations is credited to the merger reserve.
Retained earnings represents all other net gains and losses and transactions with owners (e.g. dividends) not recognised elsewhere.
Notes to the Consolidated Financial Statements
Continued
Xpediator plc | Annual report 2022
76
24. Share-Based Payments
The Company has granted Directors and key management share option plans. These are unapproved schemes so they do not
satisfy the requirements of schedule 4, ITEPA. A summary of the options plans at 31 December is shown below. All options will vest
within one to four years.
Name
Share Option
No
Option Price
£
Vesting Period
Expiry Date
LTIP
–
0.05
March 2022
March 2025
CSOP
2,426,966
0.49
December 2023
February 2024
Total
2,426,966
On 5 February 2021, the Group launched a new Company Share Option Plan (“CSOP”) to certain employees. The award value is
between £5,000 - £30,000 (depending on seniority within the business) divided by closing share price on the day before grant of
CSOP options with an exercise price equivalent to 110% of the closing share price on the day before grant. These options vest three
years from the award date and are subject to meeting a performance criteria of an average earnings per share (EPS) growth of
10% per annum, from 1 January 2021 to 31 December 2023.
On 3 March 2021, the company awarded 2,430,291 to Robert Ross and Mike Williamson under a long term investment plan (LTIP).
Both employees have since left the company and the options have lapsed.
Options will normally lapse on cessation of employment. However, exercise is permitted for a limited period following cessation of
employment for specified reasons, such as redundancy, retirement, ill-health, and, in other circumstances, at the discretion of the
Remuneration Committee.
The movements in share options are as follows:
2022
No
2021
No
At 1 January
2,986,111
55,250
Share options exercised during the year
–
(55,250)
Share options granted during the year
449,438
5,598,830
Share options lapsed during the year
(1,008,583)
(2,612,719)
At 31 December
2,426,966
2,986,111
Weighted average share price of options
£0.49
£0.45
Weighted average grant fair value
£0.11
£0.13
Weighted average contractual life
12 months
25 months
Exercise price
£0.49
£0.45
The weighted average grant fair value at the year was 2022 £0.11 (2021: £0.13) per option. The outstanding options have a weighted
average contractual life of 24 months (2021: 25 months), and exercise price between £0.15 and £0.49 (2021: between £0.05 and
£0.49).
Options were valued using the Black-Scholes option pricing model. No performance conditions were included in the fair value
calculations. Expected dividends are not incorporated into the fair value calculations. The fair value per option granted and the
assumptions used in the calculations are as follows:
2022
2021
Risk free investment
2.30%
2.15%
Expected life
12 Months
25 Months
Expected volatility
37.07%
39.56%
The Group recognised a total credit of £108,000 (2021: charge of £107,000) relating to equity-settled share-based payments in
light of recent share prices of the Company.
Notes to the Consolidated Financial Statements
Continued
77
2022 Annual Report & Accounts | FINANCIAL STATEMENTS
25. Leases
The Group as a lessee
The Group’s leases consist primarily of property premises and equipment and is presented below:
Right-of-use assets
Group
Property
Premises
£’000
Equipment
£’000
Total
£’000
COST
At 1 January 2022
68,315
7,658
75,973
Additions
35,479
11,424
46,903
Disposals
(1,291)
(535)
(1,826)
Exchange differences
803
137
940
At 31 December 2022
103,306
18,684
121,990
DEPRECIATION
At 1 January 2022
16,164
1,488
17,652
Charge for the year
9,394
3,055
12,449
Eliminated on disposal
(1,284)
(437)
(1,721)
Exchange differences
283
24
307
At 31 December 2022
24,557
4,130
28,687
NET BOOK VALUE
At 31 December 2022
78,749
14,554
93,303
At 31 December 2021
52,151
6,170
58,321
Group
Property
Premises
£’000
Equipment
£’000
Total
£’000
COST
At 1 January 2021
41,378
2,247
43,625
Additions
32,426
6,010
38,436
Disposals
(4,461)
(570)
(5,031)
Exchange differences
(1,028)
(29)
(1,057)
At 31 December 2021
68,315
7,658
75,973
DEPRECIATION
At 1 January 2021
11,223
803
12,026
Charge for the year
7,379
1,204
8,583
Eliminated on disposal
(2,223)
(506)
(2,729)
Exchange differences
(215)
(13)
(228)
At 31 December 2021
16,164
1,488
17,652
NET BOOK VALUE
At 31 December 2021
52,151
6,170
58,321
At 31 December 2020
30,155
1,444
31,599
Lease liabilities included in the consolidated statement of financial position
2022
£’000
2021
£’000
Current
12,287
9,053
Non-Current
83,765
50,625
Total
96,052
59,678
Notes to the Consolidated Financial Statements
Continued
Xpediator plc | Annual report 2022
78
Amount recognised in the consolidated income statement
2022
£’000
2021
£’000
Depreciation on right-of-use property premises
9,394
7,379
Depreciation charged on other right-of-use assets
3,055
1,204
Interest on lease liabilities
2,161
1,637
Total
14,610
10,220
The total cash outflow for leases during the current year was £14,023,000 (2021: £9,347,000). Further lease disclosures are in
note 29.
26. Related Party Transactions
During the year Group companies entered into the following transactions with related parties who are not members of the Group.
Sales
Purchases
Amounts owed by
Amounts owed to
2022
£’000
2021
£’000
2022
£’000
2021
£’000
2022
£’000
2021
£’000
2022
£’000
2021
£’000
Related Party
Delamode Holding BV
114
–
–
–
–
–
–
116
Delamode Propretati, Srl
–
–
–
4
–
–
–
–
Cogels Investment BV
–
1
–
–
–
–
–
–
EshopweDrop Baltics
199
–
–
–
72
–
–
–
EshopweDrop Romania
17
–
–
–
2
–
–
–
EshopweDrop Holdings
–
–
–
–
3
–
–
–
Franchisees
Delamode (SW) Limited
410
215
29
–
58
25
8
–
Delamode Latvia SA
485
–
189
–
67
–
22
–
Companies in which directors or
their immediate family have a
significant controlling interest
Board Mentoring Limited
–
–
128
–
–
–
65
–
Sebastian Associates Limited
–
–
230
–
–
–
72
–
Delamode Holding BV, is indirectly owned by Shaun Godfrey, Sandu Grigore, and Cogels Investments Limited all of whom are
shareholders of Xpediator Plc.
Delamode Properitati Srl, a Company owned by Delamode Holding BV, is the landlord of one of the Group’s leasehold properties in
Romania. Rent payable under the current lease is at market rates. Shaun Godfrey, Sandu Grigore and Cogels Investment Limited
are shareholders of Xpediator Plc.
Cogels Investment BV is a Company owned by Stephen Blyth, a director of Cogels Investments Limited who are a shareholder of
Xpediator Plc.
EshopweDrop Baltics, EshopweDrop Romania and EshopweDrop Holdings are all entities partly owned by Stephen Blyth, a director
of Cogels Investments Limited who are a shareholder of Xpediator Plc.
Delamode (SW) Limited (“DSW”) is a franchisee of the Group. In 2018, Delamode Holdings Limited entered into a franchise agreement
with DSW, with Shaun Godfrey acting as a Director for both companies. The Group provides certain administrative functions on
behalf of DSW and charges a fee at an agreed rate and under the franchise agreement is entitled to a share of the profits.
Delamode Latvia SA is a new franchisee of the Group. During 2022, Delamode Baltics UAB entered into a franchise agreement with
Delamode Latvia SA.
Details of directors’ remuneration and the remuneration of key management personnel are given in note 6.
All related party transactions were made at an arm’s length basis.
Notes to the Consolidated Financial Statements
Continued
79
2022 Annual Report & Accounts | FINANCIAL STATEMENTS
27. Exceptional Items
During the year, the Group incurred non-recurring costs totalling £483,000 (2021: £2,610,000)
An analysis by type of expense is show below.
2022
£’000
2021
£’000
Relocation costs
–
1,654
Compensation for loss of office and associated recruitment costs
143
539
Financing negotiation fees
–
116
Costs associated with offer received for share capital of Xpediator plc
148
–
Redundancy and restructuring
40
–
Aborted acquisition costs
152
301
Total
483
2,610
28. Subsequent Events
On 4 May 2023, the Board recommended an Offer from DLM Bidco Limited (a newly incorporated entity indirectly owned by a
consortium including the Company’s largest shareholder, Cogels Investments Limited (“Cogels”), the investment vehicle of close
family members of Stephen Blyth (former CEO of Xpediator), funds managed by Baltcap, one of the largest private equity investors
in the Baltic states, and Justas Versnickas, the Managing Director of, and 20% shareholder in, Delamode Baltics UAB, a subsidiary
of Xpediator Plc (together the “Consortium”) to acquire the entire issued, and to be issued, share capital of the Company. The Offer is
for 42p per share and a special dividend of 2p per share and values the Company at approximately £62.3m. Shareholder meetings
will be held on 7 June 2023 at which eligible shareholders will vote on the proposed Offer.
On 5 April 2023, Xpediator and the Consortium referred to above, entered into a co-operation agreement in relation to the Offer
(the “Co-operation Agreement”). Under the terms of the Co-operation Agreement, the parties agreed, amongst other things, that
a cash award be made to Richard Myson, Xpediator’s CFO, in lieu of his entitlement to receive an award under the Xpediator LTIP
(“Cash Award”). The maximum cash amount payable pursuant to the Cash Award will be calculated as 346,391 Xpediator Shares
multiplied by the Cash Offer per Xpediator Share. The Cash Award will vest and become payable on the Effective Date of the Offer.
29. Nature of Leases
The Group leases a number of properties in the jurisdictions from which it operates. In some jurisdictions it is customary for lease
contracts to provide for payments to increase each year by inflation or and in others to be reset periodically to market rental rates.
In some jurisdiction’s property leases the periodic rent is fixed over the lease term.
The Group also leases certain items of plant and equipment. In some contracts for services with distributors, those contracts contain
a lease of vehicles. Leases of plant, equipment and vehicles comprise only fixed payments over the lease terms.
The percentages in the table below reflect the current proportions of lease payments that are either fixed or variable.
The sensitivity reflects the impact on the carrying amount of lease liabilities and right-of-use assets if there was an uplift of 1% on
the statement of financial position date to lease payments that are variable.
Lease
Contract
Number
Fixed
Payments
%
Variable
Payments
%
Sensitivity
£’000
Property leases with payments linked to inflation
3
–
1%
605
Property leases with fixed payments
37
12%
–
–
Leases of plant & equipment
165
55%
–
–
Vehicle leases
96
32%
–
–
Total
301
99%
1%
605
Notes to the Consolidated Financial Statements
Continued
Xpediator plc | Annual report 2022
80
30. Analysis of Changes in Net Debt
Group
At
31 December
2021
£’000
Cashflow
£’000
Foreign
exchange
£’000
Right-of-
Use-asset
additions
£’000
Right-of-
use asset
disposals
£’000
Non-cash
interest
charge
right-of-
use assets
£’000
Other
non-cash
movements
£’000
At
31 December
2022
£’000
Cash at bank
11,684
(65)
1,507
–
–
–
–
13,126
Short term deposits
–
–
–
–
–
–
–
–
Total cash
11,684
(65)
1,507
–
–
–
–
13,126
Overdrafts
–
879
–
–
–
–
–
879
Confidential invoice discounting
facility
14,602
(3,780)
–
–
–
–
–
10,822
Bank loans
1,891
3,104
–
–
–
–
–
4,995
Right–of–use–assets
59,678
(14,023)
648
46,903
(94)
2,243
697
96,052
Total debt
76,171
(13,820)
648
46,903
(94)
2,243
697
112,748
Net debt
(64,487)
(99,622)
Net debt excluding right–of–use
assets
(4,809)
(3,570)
Group
At
31 December
2020
£’000
Cashflow
£’000
Foreign
exchange
£’000
Right-of-
Use-asset
additions
£’000
Right-of-
use asset
disposals
£’000
Non-cash
interest
charge
right-of-
use assets
£’000
Other
non-cash
movements
£’000
At
31 December
2021
£’000
Cash at bank
10,963
1,793
(1,072)
–
–
–
–
11,684
Short term deposits
1,757
(1,757)
–
–
–
–
–
–
Total cash
12,720
36
(1,072)
–
–
–
–
11,684
Confidential invoice
discounting facility
3,732
10,870
–
–
–
–
–
14,602
Bank loans
2,230
(339)
–
–
–
–
–
1,891
Right–of–use–assets
32,240
(9,346)
(842)
38,436
(2,447)
1,637
–
59,678
Total debt
38,202
1,185
(842)
38,436
(2,447)
1,637
–
76,171
Net debt
(25,482)
(64,487)
Net cash/(debt) excluding
right–of–use assets
6,758
(4,809)
Non-cash items relate to right-of-use-assets accounting under IFRS16, which the directors consider would misrepresent the net
cash/(debt) position of the Group. Further details on right-of-use-assets / leases can be found in note 25 to these Consolidated
financial statements.
Reconciliation of net cash flow to movement in net debt
2022
£’000
2021
£’000
Net (decrease)/increase in cash and cash equivalents
(944)
36
Net increase in borrowings and right–of–use assets
(35,050)
(38,811)
Foreign exchange movements
859
(230)
Increase in net debt
(35,135)
(39,005)
Opening net debt
(64,487)
(25,482)
Closing net debt
(99,622)
(64,487)
Notes to the Consolidated Financial Statements
Continued
81
2022 Annual Report & Accounts | FINANCIAL STATEMENTS
Notes
2022
£’000
2021
£’000
ASSETS
NON-CURRENT ASSET
Intangible assets
3
236
418
Property, plant and equipment
4
127
217
Investments
5
54,866
63,668
Deferred Tax
640
640
55,869
64,943
CURRENT ASSETS
Trade and other receivables
6
9,254
10,441
Cash and cash equivalents
271
59
9,525
10,500
TOTAL ASSETS
65,394
75,443
EQUITY
SHAREHOLDERS’ EQUITY
Called up share capital
9
7,134
7,134
Share premium
10
13,149
13,149
Equity reserve
10
–
108
Merger reserve
10
24,694
24,694
Retained earnings
10
749
3,366
TOTAL EQUITY
45,726
48,451
LIABILITIES
NON-CURRENT LIABILITIES
Interest bearing loans and borrowings
8
4,083
–
4,083
–
CURRENT LIABILITIES
Interest bearing loans and borrowings
8
912
–
Trade and other payables
7
14,673
26,992
15,585
26,992
TOTAL LIABILITIES
19,668
26,992
TOTAL EQUITY AND LIABILITIES
65,394
75,443
The Company made a loss in the year of £1,766,000 (2021: profit of £2,715,000).
Richard Myson
CFO
22 May 2023
Company Statement of Financial Position
As at 31 December 2022
Xpediator plc | Annual report 2022
82
Company Statement of Changes in Equity
For the year ended 31 December 2022
Share
Capital
£’000
Share
Premium
£’000
Equity
Reserve
£’000
Merger
Reserve
£’000
Retained
Earnings
£’000
Total
Equity
£’000
At 1 January 2022
7,134
13,149
108
24,694
3,366
48,451
Contribution by and distribution to owners
Dividends paid
–
–
–
–
(851)
(851)
Share options credit
–
–
(108)
–
–
(108)
Total contributions by and distribution to
owners
7,134
13,149
–
24,694
2,515
47,492
Loss for the year
–
–
–
–
(1,766)
(1,766)
At 31 December 2022
7,134
13,149
–
24,694
749
45,726
Share
Capital
£’000
Share
Premium
£’000
Equity
Reserve
£’000
Merger
Reserve
£’000
Retained
Earnings
£’000
Total
£’000
At 1 January 2021
7,132
13,139
1
24,694
2,848
47,814
Contribution by and distribution to owners
Dividends paid
–
–
–
–
(2,197)
(2,197)
Share options granted
–
–
107
–
–
107
Share options exercised
2
10
–
–
–
12
Total contributions by and distribution to
owners
7,134
13,149
108
24,694
651
45,736
Profit for the year
–
–
–
–
2,715
2,715
At 31 December 2021
7,134
13,149
108
24,694
3,366
48,451
83
2022 Annual Report & Accounts | FINANCIAL STATEMENTS
1. Accounting Policies
Basis of preparation
These financial statements have been prepared in accordance with Financial Reporting Standard 101 “Reduced Disclosure
Framework” and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.
The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by
FRS 101 “Reduced Disclosure Framework”:
•
the requirements of paragraphs 45(b) and 46 to 52 of IFRS 2 Share-based Payment;
•
the requirements of paragraphs 62, B64(d), B64(e), B64(g), B64(h), B64(j) to B64(m), B64(n)(ii), B64(o)(ii), B64(p),
B64(q)(ii), B66 and B67 of IFRS 3 Business Combinations;
•
the requirements of paragraph 33(c) of IFRS 5 Non-Current Assets Held for Sale and Discontinued Operations;
•
the requirements of IFRS 7 Financial Instruments: Disclosures;
•
the requirements of paragraphs 91 to 99 of IFRS 13 Fair Value Measurement;
•
the requirement in paragraph 38 of IAS 1 Presentation of Financial Statements to present comparative information in
respect of:
•
paragraph 79(a)(iv) of IAS 1;
•
paragraph 73(e) of IAS 16 Property, Plant and Equipment;
•
paragraph 118(e) of IAS 38 Intangible Assets;
•
the requirements of paragraphs 10(d), 10(f), 16, 38A, 38B, 38C, 38D, 40A, 40B, 40C, 40D and 111 of IAS 1 Presentation of
Financial Statements;
•
the requirements of paragraphs 134 to 136 of IAS 1 Presentation of Financial Statements;
•
the requirements of IAS 7 Statement of Cash Flows;
•
the requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors;
•
the requirements of paragraphs 17 and 18A of IAS 24 Related Party Disclosures;
•
the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or
more members of a Group;
•
the requirements of paragraphs 134(d) to 134(f) and 135(c) to 135(e) of IAS 36 Impairments of Assets.
Merger accounting
On 25 May 2017 the Company entered into a share swap agreement with the ultimate beneficiaries of Delamode Group Holdings
Limited, whereby 4,000,000 new ordinary shares of £1.00 each were issued to the ultimate beneficiaries of Delamode Group
Holdings Limited in exchange for their shares in Delamode Group Holdings Limited in the same proportion as their shareholding in
Delamode Group Holdings Limited. The merger method of accounting is used to consolidate the results of Xpediator Plc.
Where merger relief is applicable, the cost of the investment is recorded at the fair value on the date of the transaction at below.
The difference between the fair value of the investment and the nominal value of the shares (plus the fair value of any other
consideration given) is shown as a merger relief reserve and no share premium is recognised.
On 8 June 2018, the Company issued 1,727,694 new ordinary shares of £0.05 each as part of the deferred consideration of Easy
Managed Transport Limited. On 13 July 2018, the Company issued 3,740,648 new ordinary shares of £0.05 each as part of the
acquisition of Import Services Limited. On 31 December 2018, the Company issued 84,951 new ordinary shares of £0.05 each
as part of the deferred consideration of Regional Express Limited. On 16 May 2019, the Company issued 1,655,876 shares to the
former owners of Easy Managed Transport Limited as part of the final payment of the deferred consideration of Easy Managed
Transport Limited. On 5 December 2019, the Company issued 89,744 new ordinary shares of £0.05 each as part of the final
deferred consideration of Regional Express Limited.
Notes to the Company Financial Statements
For the year ended 31 December 2022
Xpediator plc | Annual report 2022
84
Notes to the Company Financial Statements
Continued
Going concern
The directors have concluded that it is appropriate that the financial statements have been prepared on a going concern basis
given the cash balances as at 31 December 2022, and funding facilities in place across the Group, which it does not envisage will
be withdrawn thus there are sufficient funds available to meet its liabilities as they fall due for a period of not less than 12 months
from the date of approval of the financial statements. The directors believe that based on the current budgets and forecast cash
flows, there is sufficient resources to meet its liabilities as they fall due. The financial statements have therefore been prepared on
a going concern basis.
However, on 4 May 2023, the Board recommended an Offer from DLM Bidco Limited (a newly incorporated entity indirectly owned
by a consortium including the Company’s largest shareholder, Cogels Investments Limited, the investment vehicle of close family
members of Stephen Blyth (former CEO of Xpediator), funds managed by Baltcap, one of the largest private equity investors in
the Baltic states, and Justas Versnickas, the Managing Director of, and 20% shareholder in, Delamode Baltics UAB, a subsidiary
of Xpediator Plc to acquire the entire issued, and to be issued, share capital of the Company, which may complete within the next
12 months. Details of the Offer are available on our investor website (https://xpediator.com/offer-for-xpediator)
Whilst completion of the Offer is subject to approval by eligible shareholders at the shareholder meetings scheduled for 7 June
2023 and sanction by the High Court of Justice in England and Wales, the Group and Company continues to operate autonomously
with the assumption that trading will continue post-acquisition as modelled in the detailed forecasts, without adjustments to
reflect any incremental costs or expected benefits should the acquisition go ahead. As the directors do not have visibility over the
future intentions of the potential acquirer, there can be no certainty over the nature of the continuing operations of the Group and
Company should the acquisition proceed successfully. This gives rise to a material uncertainty, as defined in auditing and accounting
standards, related to events or conditions that may cast significant doubt on the Group and the Company’s ability to continue as a
going concern and in such circumstances, the Group and the Company may therefore be unable to realise its assets and discharge
its liabilities in the normal course of business.
Intangible assets
Externally acquired intangible assets, are initially recognised at cost and subsequently amortised on a straight-line basis over their
useful economic lives.
The significant intangibles recognised by the Company, their useful economic lives and the methods used to determine the cost of
intangibles are as follows
Licences and Software
–
25%-33% straight line
Property, Plant & Equipment
Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life or, if held under
a finance lease, over the lease term, whichever is the shorter.
Computer Equipment
–
20%-33% straight line
Fixture & Fittings
–
20%-33% straight line
Leasehold Improvements
–
33% straight line
Fixed assets are stated at cost less depreciation and provision for impairment.
Taxation
Current taxes are based on the results shown in the financial statements and are calculated according to local tax rules, using tax
rates enacted or substantially enacted by the reporting date.
Foreign currencies
The financial statements of the Company are presented in its reporting currency of Sterling. The functional currency of the Company
is the UK Sterling.
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the statement of financial
position date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction.
Any gains or losses arising from these conversions are credited or charged to the Income Statement.
Employee benefit costs
The Company operates a defined contribution pension scheme on behalf of employees in the UK in accordance with auto enrolment
legislation. Contributions payable to the company’s pension scheme are charged to the income statement in the period to which
they relate.
Investments
Investments in subsidiaries are at cost less any provision for impairment. The Company assesses investments for impairment
85
2022 Annual Report & Accounts | FINANCIAL STATEMENTS
whenever events or changes in circumstances indicate that the carrying value of an investment may not be recoverable. If any such
indication of impairment exists, the Company makes an estimate of the recoverable amount of the investment. If the recoverable
amount is less than the value of the investment, the investment is considered to be impaired and is written down to its recoverable
amount. An impairment loss is expensed immediately; if the impairment is not considered to be a permanent diminution in value, it
may reverse in a future period to the extent it is no longer considered necessary.
Other financial assets
Classification
The Company classifies its financial assets in the following measurement categories:
•
those to be measured subsequently at fair value (either through OCI or through profit or loss); and
•
those to be measured at amortised cost.
The classification depends on the contractual terms of the cash flows.
Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been
transferred and the Company has transferred substantially all the risks and rewards of ownership.
Measurement
At initial recognition, the Company measures a financial asset at its fair value plus, in the case of a financial asset not at fair value
through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the financial asset. Transaction
costs of financial assets carried at FVPL are expensed in profit or loss. Financial assets with embedded derivatives are considered
in their entirety when determining whether their cash flows are solely payment of principal and interest.
Impairment
The Company assesses, on a forward-looking basis, the expected credit losses associated with its debt instruments carried at
amortised cost and fair value through other comprehensive income (FVOCI). The impairment methodology applied depends on
whether there has been a significant increase in credit risk.
Trade, Intercompany and other receivables
The Company assesses on a forward-looking basis the expected credit loss associated with its receivables carried at amortised cost.
The impairment methodology applied depends on whether there has been a significant increase in credit risk. For trade receivables,
the Company applies the simplified approach permitted by IFRS 9, resulting in trade receivables recognised and carried at original
invoice amount less an allowance for any uncollectible amounts based on expected credit losses.
Cash and cash equivalents
Cash and cash equivalents in the statement of financial position comprise cash at bank and in hand and short-term deposits
with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an
insignificant risk of changes in value.
Financial liabilities
The Company classifies its financial liabilities into two categories:
Other financial liabilities
The Company’s other financial liabilities include bank loans, confidential invoice discounting facility, trade and other payables and
accruals. Bank borrowings are initially recognised at fair value net of any transaction costs directly attributable to the issue of
the instrument. Such interest-bearing liabilities are subsequently measured at amortised cost using the effective interest rate
method, which ensures that any interest expense over the period to repayment is at a constant rate on the balance of the liability
carried in the consolidated statement of financial position. For the purposes of each financial liability, interest expense includes
initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is
outstanding.
Trade payables and other short-term monetary liabilities, which are initially recognised at fair value and subsequently carried at
amortised cost using the effective interest method.
Fair value through profit and loss
This category only comprises of the element of deferred consideration on business combinations, which is contingent on the
performance of the acquired businesses. The expected consideration payable is assessed at each reporting date with the movement
in the expected liability being recorded in the income statement.
Notes to the Company Financial Statements
Continued
Xpediator plc | Annual report 2022
86
Notes to the Company Financial Statements
Continued
Share-based payments
The Company operates equity-settled share-based options plans. The fair value of the employee services received in exchange
for the participation in the plan is recognised as an expense in the profit and loss account. The corresponding credit has been
recognised in the profit and loss account reserve.
The fair value of the employee is based on the fair value of the equity instrument granted. This expense is spread over the vesting
period of the instrument.
1.1 Critical accounting estimates and judgements
Impairment of Fixed Asset Investments
The Company makes certain estimates and assumptions regarding the future. Estimates and judgements are continually evaluated
based on historical experience and other factors, including expectations of future events that are believed to be reasonable under
the circumstances. In the future, actual experience may differ from these estimates and assumptions.
Impairment tests on investments are undertaken annually in November as part of the Company’s budgeting process, except in the
year of acquisition when they are tested at the year-end.
In preparing these financial statements, the key estimates relate to:
•
The determination of the carrying value of the Company’s investments in its subsidiary undertakings. During the year,
the directors undertook an impairment assessment in line with the accounting policy. The directors recognised an
impairment of £8,802,000 with respect to the Company’s investment in the UK Freight Forwarding business which had
been determined by reference to the recoverable value calculated in determining the impairment of goodwill, as set out in
note 12 to the Group financial statements. Further details can be found in note 5 to the Company’s financial statements.
2. Staff Costs
Compensation consists of 2 executive Directors, 3 non-executive Directors and 57 other employees (2021: 2 executive Directors,
4 non-executive Directors and 70 other employees).
2022
£’000
2021
£’000
Employee benefit expenses (including directors) comprise:
Salaries
4,158
4,176
Short-term non-monetary benefits
26
27
Share based payments (credit)/charge
(108)
108
Social security contributions and similar taxes
553
463
Defined contribution pension cost
71
71
Total
4,700
4,845
3. Intangible Assets
Cost
Licences &
Software
£’000
At 1 January 2022
750
Additions
21
At 31 December 2022
771
Amortisation
Licences &
Software
£’000
At 1 January 2022
332
Charge for the year
203
At 31 December 2022
535
87
2022 Annual Report & Accounts | FINANCIAL STATEMENTS
Net Book Value
Licences &
Software
£’000
At 31 December 2022
236
At 1 January 2022
418
4. Property, Plant & Equipment
Leasehold
Improvements
£’000
Fixture &
Fittings
£’000
Computer
Equipment
£’000
Total
£’000
COST
At 1 January 2022
49
16
420
485
Additions
–
–
19
19
At 31 December 2022
49
16
439
504
DEPRECIATION
At 1 January 2022
42
14
212
268
Charge for the year
7
2
100
109
At 31 December 2022
49
16
312
377
NET BOOK VALUE
At 31 December 2022
–
–
127
127
At 1 January 2022
7
2
208
217
5. Fixed Asset Investments
Subsidiary
Undertakings
£’000
At 1 January 2022
63,668
Additions during the year
–
Impairments
(8,802)
At 31 December 2022
54,866
Impairment
The carrying amount of investments has been reduced to its recoverable value through recognition of an impairment loss.
There were impairments recognised during the year of £8,802,000 (2021: £nil). In addition, there were no impairment reversals in
2022 (2021: £nil). The recoverable value was calculated using a value in use calculation based on the estimates set out in note 12
of the Group financial statements.
Notes to the Company Financial Statements
Continued
Xpediator plc | Annual report 2022
88
6. Trade and Other Receivables
2022
£’000
2021
£’000
Current:
Trade receivables
3
20
Amounts owed from group undertakings
7,688
8,153
Contract assets
159
–
Prepayments
100
144
Other receivables
1,304
2,124
Total trade and other receivables
9,254
10,441
7. Trade and Other Payables
2022
£’000
2021
£’000
Current:
Trade payables
1,153
1,157
Amounts owed to group undertakings
12,392
24,173
Other taxes and social security
108
308
Accruals and deferred income
1,020
1,354
Total trade and other payables
14,673
26,992
8. Bank and Other Loans
2022
£’000
2021
£’000
Current:
Bank loans
912
–
912
–
Non-current:
Loans - 1-2 years
913
–
Loans - 2-5 years
3,170
–
Loans due after 5 years repayable by instalments
–
–
4,083
–
During the year the Company received a loan facility from Investec bank, on which interest is payable at a variable rate of 4.5%
above the Bank of England base rate and is repayable by April 2026.
The book value and fair value of loans and borrowings are as follows:
2022
£’000
2021
£’000
Non-Current
Bank borrowings and others
- Secured
4,083
–
Current
Bank borrowings and others
- Secured
912
–
Total loans and borrowings
4,995
–
Sterling
4,995
–
Notes to the Company Financial Statements
Continued
89
2022 Annual Report & Accounts | FINANCIAL STATEMENTS
9. Share Capital
See consolidated financial statements note 22 for share capital section.
10. Reserves
Share premium is the amount subscribed for share capital in excess of nominal value.
Equity reserve represents the cost of the share options granted that have not yet been exercised.
Merger reserve represents the difference between the net asset value of Delamode Group Holdings Limited and the nominal value
of the shares issued by Xpediator Plc in consideration for the acquisition of Delamode Group Holdings Limited. In addition, the
premium on the fair value in excess of the nominal value of shares issued in consideration for business combinations is credited to
the merger reserve.
Retained earnings represents all other net gains and losses and transactions with owners (e.g. dividends) not recognised elsewhere.
11. Related Party Transactions
The Company has taken advantage of the disclosure of related party transactions with wholly owned fellow Group companies.
Related party transactions with key management personnel (including Directors) are shown in note 26 of the consolidated financial
statements.
12. Share-Based Payments
Share-based payments arrangements for employees are set out in the Directors’ Report (Remuneration note). Details of the share
options in existence are shown in note 24 of the consolidated financial statements.
Notes to the Company Financial Statements
Continued
Xpediator plc | Annual report 2022
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Auditors
Crowe U.K. LLP
Chartered Accountants
Member of Crowe Global
55 Ludgate Hill
London
EC4M 7JW, UK
Legal Advisors
BDB Pitmans LLP
One Bartholomew Close
London
EC1A 7BL
Nominated Advisor
Zeus Capital Limited
125 Old Broad Street,
12th Floor,
London,
EC2N 1AR
Financial Public Relations
Novella
South Wing, Somerset House,
London
WC2R 1LA
Share Registrar
Share Registrars Limited
3 Millennium Centre
Crosby Way, Farnham
Surrey
GU9 7XX
Advisors
XPEDIATOR PLC
700 AVENUE WEST
SKYLINE 120
GREAT NOTLEY
BRAINTREE
CM77 7AA