Creightons Plc Annual Report 2023
Registered Number 01227964
Creightons Plc Annual Report 2023
1
Contents Page
Financial and operational highlights 2
Group strategic report 3
Chairman’s statement 3
The business model 7
A fair review of the Group’s business 7
Strategy, objectives and future developments 8
Key performance indicators 9
Principal risks and uncertainties 10
Section 172 statement 12
Corporate and social responsibility 15
Task Force on Climate-Related Financial disclosures (TCFD) reporting 16
Non-financial Information statement 23
Going concern 23
Directors’ report 24
Corporate governance statement 30
Directors’ remuneration report 34
Directors’ responsibilities statement 44
Independent auditor’s report to the members of Creightons Plc 45
Consolidated income statement and Consolidated statement of comprehensive income 55
Consolidated balance sheet 56
Company balance sheet 57
Consolidated statement of changes in equity 58
Company statement of changes in equity 60
Consolidated cash flow statement 61
Company cash flow statement 62
Notes to the financial statements 63
Directors and advisers 101
Creightons Plc Annual Report 2023
2
Financial highlights
• Significantly improved performance for the second half of the year due to remedial actions taken by
management with operating profit (before exceptional items) increasing from £0.3m in the first half to £1.3m
in the second half. Full year operating profit (before exceptional items) of £1.6m.
• Cash generated from operating activities has increased from £1.4m in the first half of the year to £4.5m in
the second half of the year. Full year cash from operating activities generated of £5.9m.
• Balance sheet remains strong with Group net assets at the balance sheet date of £25.5m (2022: £25.7m).
• Revenue for the year was £58.6m (2022: £61.2m), a reduction of 4.2%.
• EBITDA for the year was £3.0m (2022: £5.9m).
• Operating profit decreased by 67.5% to £1.4m (2022: £4.4m).
• Operating profit margin of 2.4% (2022: 7.1%).
• A tax charge of £0.2m (2022: £0.3m) equates to an effective tax rate of 25.2% (2022: 10.0%).
• The profit after tax for the year has decreased by £2.6m to £0.5m (2022: £3.1m).
• The profit reduction together with the issue of shares has reduced the fully diluted earnings per share to
0.65p (2022: 3.98p).
• Net cash on hand (cash and cash equivalents less short-term element of obligations under finance leases and
borrowings) is negative £1.2m (2022: negative £2.1m).
• The Directors do not propose a final dividend for the year ended 31 March 2023 (2022: £Nil).
Operational highlights
• Sales growth momentum has been maintained in the branded and export business despite the economic
downturn:
• Overall branded sales have increased by 11.7% to £22.8m.
• Sales of retailer own label products decreased by 11.7% to £22.0m.
• Contract manufacturing sales decreased by 13.1% to £13.8m.
• Total overseas sales have increased by 5.6% to £10.6m
• Integration of previous year acquisitions is substantially completed with the full benefits emerging in the new
financial year.
• The Group has responded proactively to the unprecedented challenges facing the business due to supply
chain constraints, higher commodity, and energy prices. The remedial measures were intended to restore
profitability, reduce costs and inventory and to return to positive cash flow. Specifically, actions were taken in
the following six areas:
• Increase in selling prices to our customers
• Reduction in overheads
• Increase efficiency and capacity in each factory so as to maximise the benefit of single shift working
• Relocating the customer facing side of the business, warehousing, picking packing and logistics back
to the Peterborough site
• Reduction in stock levels, targeting £2m reduction v previous year
• New and non-critical capital expenditure cancelled unless payback less than 9 months
The combined effect of these measures, carried out in the second half of the year, has been to return the
business to profitability and positive cashflow.
Creightons Plc Annual Report 2023
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Group strategic report
This strategic report has been prepared solely to provide additional information to enable shareholders to assess the
Group’s strategies and the potential for those strategies to succeed.
The strategic report contains certain forward-looking statements. These statements are made by the Directors in good
faith based on the information available to them up to the time of their approval of this report and such statements
should be treated with caution due to the inherent uncertainties, including both economic and business risk factors,
underlying any such forward-looking information.
In preparing this strategic report, the Directors have complied with s414C of the Companies Act 2006.
The strategic report has been prepared for the Group and therefore gives greater emphasis to those matters that are
significant to Creightons Plc and its subsidiary undertakings when viewed as a whole.
The strategic report discusses the following areas:
• Chairman’s statement
• The business model
• A fair review of the Group’s business
• Strategy, objectives and future developments
• Key performance indicators
• Principal risks and uncertainties
• Section 172 statement
• Corporate and social responsibility
• Task Force on Climate-Related Financial disclosures (TCFD) report
• Non-financial information statement
• Going concern
Chairman’s statement
This represented among the most challenging trading years ever faced by the Group. As reported in the Chairman’s
statement in the half year interim RNS announcement in November 2022 the Group faced significant supply chain and
inflationary pressures in the second half of the previous financial year which continued into the first part of the current
financial year. These pressures contributed to higher input and overhead costs and reduced profitability. Our response
was to embark upon a six-point programme designed to restore margins, reduce costs, lower stocks levels and return
the business to positive cashflow. This included moving to a single shift at the Peterborough site. I am pleased to report
that we have made significant progress in all of these areas in the second half of the financial year with Profit before tax
and exceptional items increasing from £0.1m in the first half to £1.1m in the second half. Full year Profit before tax and
exceptional items was £1.2m (2022: £4.1m). We have also improved our net cash on hand by £3.6m during the second
half of the year reflecting the improved trading performance and the success of the inventory reduction programme.
We remain committed to seeking further cost and overhead reductions and to restoring margin and overall profitability
to previous levels. In spite of the significant challenges faced by the Group and the wider economy, I am pleased to
report that the Group has been successful in increasing its branded turnover by an impressive 11.7% which partially
offsets the decline in the private label and contract manufacturing business.
The Group’s vertically integrated model continues to give it competitive advantage allowing it to respond quickly and
effectively to customer requirements. It previously provided for a rapid pivot in production to meet market demand for
sanitary product at the beginning of the Covid outbreak, and more recently allowed it to respond flexibly to the current
challenging economic environment. It also provides a competitive advantage with post-acquisition integration by
providing synergies not available to all market participants. Over the reporting period the Group continued to invest in
its manufacturing and in its research and development capabilities which contributed to improved manufacturing
efficiencies.
Summary of Half 1 and Half 2 results:
H1
(Unaudited)
H2
(Unaudited)
Year ended
31 March
2023
£000
£000
£000
Revenue
29,676
28,891
58,567
Gross profit
11,990
12,358
24,348
Gross profit %
40.4%
42.8%
41.6%
Operating profit before exceptional items
281
1,303
1,584
Operating profit
130
1,289
1,419
Profit before tax and exceptional items
104
1,060
1,164
Profit before tax
(359)
1,046
687
(Loss) / Profit after tax
(385)
899
514
Creightons Plc Annual Report 2023
4
Group strategic report (continued)
Chairman’s statement (continued)
H1
(Unaudited)
H2
(Unaudited)
Year ended
31 March
2023
£000
£000
£000
Cash generated from operating activities
1,352
4,522
5,874
At 30
September
2022
(Unaudited)
At 31 March
2023
Movement
£000
£000
£000
Net cash on hand
(4,672)
(1,090)
3,582
Revenue
Overall Group sales were £58.6m for the year ended March 2023 (2022: £61.2m) a reduction of £2.6m. Overall Branded
sales have increased by 11.7% from £20.4m to £22.8m with a strong performance from Feather & Down and Balance
Active brands. Private label sales have decreased from £24.9m to £22.0m due mainly to the non-recurrence of a one-
off private contract in the previous year. Contract manufacturing sales have decreased from £15.9m to £13.8m reflecting
the difficulty faced by certain brand owners in the challenging economic environment (see page 8).
The Group’s total overseas business increased by 5.6% to £10.6m (2022: £10.0m) (see note 5).
Margin and cost of sales
Our gross margin was 41.6% for the year ended 31 March 2023 (2022: 42.8%). Gross margin has improved in the
second half of the year to 42.8%, compared to the first half 40.4% due to proactive measures taken by management in
the areas of customer price increases, cost mitigation and product re-engineering and reduced labour costs due to shift
rationalisation and efficiency improvements.
Distribution costs and Administrative expenses
Distribution costs have increased by 10.4% to £3.9m (2022: £3.5m), driven by increased operational charges at third-
party logistics providers and also a full year impact of the acquisitions.
Administrative expenses have increased by 3.3% to £18.9m in the year (2022: £18.3m) as the Group has seen a general
rise in overhead costs in particular in energy prices and insurance costs. Overhead savings have been achieved across
most cost headings including indirect payroll.
Research and Development
The Group invests significant resources in research and product development. As the Group has developed its business
towards more leading-edge products, the nature of the research and development has become more sophisticated.
Creightons Plc has continued to invest in R&D throughout year ending 31 March 2023 to expand its portfolio of product
offering and capabilities, with key areas of focus being the development of unique and technically challenging
formulations across Skin care and Cleansing. Utilising advanced technologies we have successfully launched a range of
Vitamin C skincare products that demonstrate enhanced skin brightening and anti-ageing performance coupled with
novel textures at an affordable price point. New launches with key trend materials such as ceramides, peptides, prebiotics
and exfoliating acids continue to demonstrate our ability to keep up with new trends and formulation development,
delivering new product development quickly and effectively. Given the challenges in the market place, cost mitigation
has also been a key focus with raw material sourcing and validation offering solutions to avoid excessive cost increases
and maintain margins on existing products.
Looking forward the team are continuing to invest time and resource into exploring new categories and technologies.
The importance of SPF in the skincare and sun care categories is a key area of focus and consumer demand. We are
investing in delivering cutting edge, futureproofed formulations, delivering high UV protection in formats that offer
improved performance and product aesthetics. Lastly, as part of the Group’s expansion into new market territories
product compliance becomes a key area of development with formulation redevelopment underway to allow for
registration into the Chinese market whilst maintaining product quality. The team continues to support the wider business
with trend-based developments focusing on the increased demand for cleaner, natural formulations.
EBITDA
The Group has generated Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) of £3.0m (2022:
£5.9m). This represents a reduction of £2.9m (49.5%).
Creightons Plc Annual Report 2023
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Group strategic report (continued)
Chairman’s statement (continued)
Tax
The Group’s tax charge for the year was £0.2m (2022: £0.3m) which equates to a rate of 25.2% (2022: 10.0%). The
effective rate of tax is more than the standard rate of 19.0% (2022: 19.0%). The tax charge in the current year reflects
a higher deferred tax liability due to increase in future corporation tax rate to 25%.
Exceptional items
As reported in September 2022 there was an additional charge in respect of the acquisition of the Emma Hardie
business should the Company’s share price fail to attain £1.25 on the first anniversary of the sale. The excess over the
amount paid at 31 March 2022 amounted to £0.3m and has been treated as an exceptional cost.
Redundancy costs incurred of £0.2m in respect of the closure of the second shift at Peterborough have also been
included in exceptional costs.
Profit after tax
The Group’s profit after tax has reduced by 83.5% to £0.5m for the year ended 31 March 2023 (2022: £3.1m).
Earnings per share
The diluted earnings per share of 0.65p (2022: 3.98p) is a decrease of 83.7%. The EPS has been adversely impacted
by the reduction in profit after tax including the exceptional costs of £0.5m and also by the increase in the number of
shares in issue (prior year acquisition related shares of 1.0m and share options).
Cash on hand and working capital
Net cash on hand (cash and cash equivalents less short-term element of obligations under finance leases and borrowings)
is negative £1.2m (2022: negative £2.1m). The improvement in cash is mainly attributable to improved business trading
performance in the second half of the year together with inventory level reduction. The Group generated cash of £5.9m
(2022: £2.0m) from operating activities.
Return on Capital Employed
The Group has increased capital employed following the two acquisitions completed in the previous year.
These investments have not yet delivered a full return on Capital Employed, which together with the reduction in current
year operating profit has had the effect of reducing the Return on Capital Employed from 12.9% to 4.3% (see page 10).
The expected improvement on the returns on acquisitions in the year will increase in the year to March 2024. The Group
continues to look for opportunities to invest in brands that will help drive faster growth in profits.
Net gearing
Net gearing of 22.1% (2022: 28.7%) has decreased by 6.6% percentage points in the year.
Dividend
The Directors do not propose a final dividend for the year ended 31 March 2023, (2022: £Nil) due to the challenging and
volatile economic conditions facing the Group and the need to be prudent about utilisation of cash resources. This is
consistent with the Directors’ objective to align future dividend payments to the future underlying earnings and cash
requirements of the business. The total dividend paid for the year ended 31 March 2023 was nil (2022: £0.15) per
ordinary share.
Supply chain
In common with many UK manufacturing businesses, we have experienced global supply chain and inflationary pressures
particularly during the first half of the financial year. These pressures have manifested in the form of delayed deliveries
from suppliers, higher input, energy and overhead costs. The commodity pressures have eased somewhat in the second
half of the financial year, but the level of domestic inflation remains a cause for concern. We will continue to be proactive
in our response to these challenges and in particular we will seek out new opportunities and endeavour to mitigate any
price increases through price recovery, product reengineering, alternative sourcing and other cost control measures.
Creightons Plc Annual Report 2023
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Group strategic report (continued)
Chairman’s statement (continued)
Future opportunities
Looking forward we intend to invest in formulation development, market knowledge and manufacturing know how to
enter the sizeable Suncare category. Consumer demand for Sun Protection Factor (SPF) protection is increasing in both
the skincare category but also in more usage of sun protection products. This presents a significant opportunity in both
the private label and contract manufacturing categories. We also continue to advance in SPF formulation development
in the skincare category where consumer demand is also in growth.
We also intend to develop key markets in both the USA and China with our leading brands Emma Hardie and Feather &
Down. Considerable time and investment has already been undertaken in China with the Emma Hardie brand where we
are now launched on a number of digital platforms including Tmall and Douyin. Our next step is the finalisation of China
Health Registrations to enable the brand to also be sold in market in China. Both brands are launching on Amazon in
the USA market, a key development to then enable both brands to move into more traditional retail distribution as we
demonstrate success on marketplaces.
We expect to extend distribution of Creightons core brands, in particular TZone and Balance Active both in the UK
discount and grocery sectors along with international markets.
Conclusion
This has been a challenging year for the Group brought on by the war in Ukraine and global economic challenges.
In response we have been resolute and focused in restoring profitability and positive cash flow and in reducing the
overall cost base. Our result for the second half of the year provides evidence that we are on the right track.
Manufacturing efficiency improvements have continued as a result of significant investment in higher grade machinery
and equipment within the last 18 months. This has enabled the move to one shift across the Group.
In summary the Board believes that good management, strong customer relationships and financial position will continue
to enable the Group to manage the current economic situation and that the Group is well placed to proactively manage
new challenges and take advantage of any new opportunities that may arise.
We are still keen to expand but will only do so when the infrastructure is fully repositioned to deal with the volatile
conditions we are facing.
Thanks also to our employees, customers and suppliers, especially those who have responded so positively through this
challenging period.
William McIlroy
Chairman, 06 July 2023
Creightons Plc Annual Report 2023
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Group strategic report (continued)
The business model
are referred to in the Chairman's statement on pages 3 - 6.
The subsidiary undertakings affecting the results of the Group in the year are detailed in note 17 to the financial
statements.
A fair review of the Group’s business
History
Creightons Plc was registered in 1975 to continue the business of manufacturing and marketing toiletries, first
established in 1953, made exclusively from natural products. It created a number of proprietary brands, although it
focused mainly on private label and contract manufacturing. It was listed on the London Stock Exchange in 1987. The
Group consolidated its manufacturing at the Potter and Moore Innovations plant in Peterborough following the acquisition
of the Potter and Moore business in 2003 and disposal of the Storrington site in 2005. The Group acquired the business
and assets of the Broad Oak Toiletries site in Tiverton in February 2016 further increasing the Group’s sales reach in
terms of product and premium customers and adding to manufacturing capability and capacity. In June 2019 the Group
bought the Balance Active Formula brand. In the year ended March 2022 the Group completed the acquisition of the
Emma Hardie and Brodie & Stone businesses.
Operating Environment
The toiletries sector principally encompasses products for haircare, skincare, bath & body and male grooming. The
market is relatively mature although it is constantly evolving as brands seek to differentiate their offering in order to
generate sales opportunities. This has resulted in a fragmentation of different sectors, for example, with haircare
products developed to treat different hair types and conditions. Whilst adding some complexity, this segmentation
creates opportunities for our business.
Consumers purchase our products through a range of retail and internet outlets, from high quality department stores to
value driven discounters, with the High Street supermarkets and drug stores in the middle. A significant amount of the
Group’s products are sold in the UK, although increasing amounts are sold overseas, either direct to retailers or through
distributors.
Producers and manufacturers providing products in this marketplace range from major multinational corporations to
small businesses. Production is now world-wide, with many competitors sourcing a significant proportion of their products
from outside the UK, either due to greater economies of scale or due to a lower cost base.
The Group purchases its raw materials and components from an extensive range of suppliers in the UK and internationally
and has built up a significant contact network to keep up to date with prices and market developments. We have a skilled
team of employees working throughout the supply chain, including procurement, technical, manufacturing and logistics.
All products the Group manufactures conform to EU regulation No. EU 1223:2009 and the equivalent UK regulations,
which applies to toiletries and cosmetic products. The sites hold appropriate accreditations to conform to this regulation.
The Group’s operations are broadly organised into three business streams:
• our own branded business which develops, markets, sells and distributes products we have developed and own
the rights to or brands we have licensed. These sales are increasingly made direct to consumers. All stock is
manufactured to forecast. Key brands include Feather and Down, Balance Active and The Curl Company and
the brands added during the prior year Emma Hardie and T-Zone.
• private label business which focuses on high quality private label products for major high street retailers and
supermarket chains, with the majority of stock manufactured to forecast.
• contract manufacturing business, which develops and manufactures products on behalf of third-party brand
owners and typically manufactured to order.
Each of these business streams is supported by commercial and marketing teams.
Creightons Plc Annual Report 2023
8
Group strategic report (continued)
Each business stream uses central creative, planning, sourcing, finance and administration operations based in
Peterborough with manufacturing, sales, research and development and logistics operations located at both
Peterborough and Tiverton. Each business stream is pro-active in the development of new sales and product development
opportunities for their respective customers.
The sales generated by each sales stream are;
2022/23
2021/22
Movement
£000’s
£000’s
Branded products (excluding acquisitions)
16,682
16,747
Decrease of 0.4%
Branded products (acquisitions – Brodie and Stone &
Emma Hardie)
6,075
3,630
Increase of 67.4%
Private label
21,997
24,908
Decrease of 11.7%
Contract manufacturing
13,795
15,866
Decrease of 13.1%
Other
18
6
Increase of 200%
Total
58,567
61,157
Decrease of 4.2%
In addition to developing the existing branded portfolio, the Group considers the acquisition, development and
investment in new brands to be key in adding value to the business. We will dispose of brands which we have successfully
grown but are no longer part of our core business.
Position of Group business
It is the Directors’ view that the financial position of the Group at the year-end is strong and that the Group has sufficient
resources to meet its obligations in the normal course of business for the next 12 months.
Current operations
The Group operates through the three main business streams described above, utilising its extensive brand
management, product development and manufacturing capabilities encompassing toiletries, skincare, hair care,
fragrances and home fragrance. The Group has extended its research and development and sales expertise to maximise
the opportunities afforded by these capabilities. Some of this work has been capitalised and is being amortised over the
estimated life of the products in accordance with UK adopted international accounting standards.
The Group has continued its aggressive development programme of new ranges of branded toiletries, haircare and
skincare products, with Feather & Down illustrating the potential that can be derived from this investment. The Group
continues to extend and develop those recently acquired, such as Emma Hardie, T Zone and Balance Active, or developed
internally and successfully launched such as The Curl Company.
The Group invests significant resources in developing new products, ensuring the Group adheres to regulations in all of
the markets it operates in and is forward looking to address future developments in what is a highly regulated market.
Strategy, objectives and future developments
The primary objective of the Group is to deliver an adequate and sustainable return for shareholders whilst guarding
against commercial risks. We aim to deliver this by pursuing the following broad strategies:
• Expand our customer base across all three sales streams (private label, contract manufacturing and own
brands) within the UK and increasingly overseas.
• Invest in our Business to Consumer business to take advantage of the change in consumer purchasing patterns.
• Continuously review, develop and enhance our product offering to meet the consumers’ requirement for high
quality, excellent value products and thereby help our customers grow their businesses.
• Ensure that we exceed our customers’ expectations for first-rate quality products and excellent customer
service and use this to expand opportunities within our existing customer base.
• Manage our gross and net margins through efficient product sourcing, continuously improving production
efficiencies, asset management and cost control.
• Make fully appraised investment in brands that will help us maintain and grow our business and create brand
value, which can be crystallised through disposals to third parties.
• Develop our staff and skill base to meet all of the needs of the business and ensure all employees are rewarded,
through profit related bonuses and share options, for their contribution to the success of the business.
Creightons Plc Annual Report 2023
9
Group strategic report (continued)
Research and development
The Group undertakes significant research and development to identify new brands, proprietary products and improved
formulations to existing products that address expected market trends to maximise the Group’s market share and deliver
new opportunities for growth. The spend in the year on research and development was £923,000 (2022: £852,000).
The Group’s principal focus in R&D is maintenance and development of brands and products in its existing markets and
product ranges. As our brands evolve the Group now develops ranges which involve greater innovative development
and claims substantiation which has changed the nature of our research and development over recent years. One impact
of this development is improved claims for research and development tax relief.
Key performance indicators
Management and monitoring of performance
The Directors are mindful that although Creightons Plc is a UK Listing Authority “premium” listed Company, given its
size many of the ‘big business’ features common in premium listed companies are inappropriate. Recent years’ profitable
results have been achieved as a result of considerable hard work in focusing management and staff efforts on more
productive product ranges, improving production and stock holding efficiencies, ensuring high levels of customer service
and eliminating overhead inefficiencies. This report has been prepared with that in mind and is commensurate with the
size of the Group’s business.
As a consequence, the Group has limited personnel or other non-financial Key Performance Indicators (KPIs) or targets.
Each position that becomes vacant is reviewed against our strategic objectives for necessity before authorisation is given
for it to be filled through either recruitment or promotion.
The Group has set a target of reducing tonnes of Co2e per £m of cost of sales by 5% per annum (based on the figures
reported in the year ended 31 March 2019 of 46.9 tonnes of Co2e per £m of cost of sales) over the 5 years ending 31
March 2024. The Group is currently ahead of this target, however it is planned to introduce a Science Based Target
(SBT) to replace the intensity target in March 2024 which is linked to Scope 1, 2 and 3 emissions.
The Board regularly monitors performance against several key financial indicators, including gross margin, overhead
cost control, cash/borrowing and stocking levels. Performance is monitored monthly against both budget and prior year.
Financial key performance indicators
These Key Performance Indicators are used to gauge and compare performance in terms of meeting our strategic and
operational goals.
• Sales shows the performance of the business.
• Gross margin % (revenue less cost of goods sold, over revenue) indicates production and purchasing
efficiencies.
• Profit for the year shows the return to shareholders.
• Operating profit (gross margin less operating expenses) shows profit earned from the normal business
operations.
• EBITDA (Earnings before Interest, Tax, Depreciation & Amortisation) provides a reflection of the operating
profitability of the business.
• Return on capital employed (Operating profit/Employed Capital + Long & short term debt) ensures that the
business generates sufficient returns to pay for its cost of capital.
• Net Gearing (Total net debt/Shareholders’ funds) shows the extent to which operations are funded by lenders
versus shareholders. Indicating potential exposure to external interest rate fluctuations (financial risk)
alongside shareholder investment in the business.
• Net cash on hand shows the immediately available cash for use in operating activities or available for
investments, defined as cash and cash equivalents less borrowings and lease liabilities.
• Net cash on hand is defined as Cash and cash equivalents less current lease liabilities and borrowings.
• Stocking levels shows the working capital currently invested in inventory. High levels indicates lock up of
working capital.
2022/23
2021/22
Movement
£000
£000
Sales
58,567
61,157
Decrease of 4.2%
Gross Margin
41.6%
42.8%
Decrease of 1.2%
Profit for the year
514
3,110
Decrease of 83.5%
Operating profit
1,419
4,365
Decrease of 67.5%
Operating margin
2.4%
7.1%
Reduction of 4.7%
EBITDA
3,001
5,944
Decrease of 49.5%
Return on capital employed
4.3%
12.9%
Reduction of 8.6%
Net gearing (including obligations under leases)
22.1%
28.7%
Reduction of 6.6%
Net cash on hand
(1,090)
(2,126)
Increase of 48.7%
Stocking levels
10,228
12,479
Decrease of 18.0%
Creightons Plc Annual Report 2023
10
Group strategic report (continued)
Key performance indicators (continued)
EBITDA is calculated by adjusting the operating profit for depreciation and amortised development costs as detailed
below.
2023
2022
Movement
£000
£000
Operating Profit
1,419
4,365
Decrease of 67.5%
Depreciation
1,294
1,144
Increase of 13.1%
Amortisation
288
435
Decrease of 33.8%
EBITDA
3,001
5,944
Decrease of 49.5%
Net Gearing is calculated by taking the total net borrowings over the total equity as detailed below.
2023
2022
Movement
£000
£000
Total Lease liabilities
1,290
1,167
Increase of 10.5%
Total Borrowings
5,990
7,049
Decrease of 15.0%
Less cash on hand
1,653
840
Increase of 96.8%
Total net borrowings
5,627
7,376
Decrease of 23.7%
Net equity attributable to the equity shareholders of
the parent Company
25,479
25,678
Decrease of 0.8%
Net gearing %
22.1%
28.7%
Decrease of 6.6%
Return on Capital Employed is calculated by dividing operating profit by net equity plus lease liabilities and borrowings.
See below.
2023
2022
£000
£000
Operating Profit
1,419
4,365
Net Equity
25,479
25,678
Lease liabilities
1,290
1,167
Borrowings
5,990
7,049
Return on Capital Employed
4.3%
12.9%
Health and Safety
There were 5 incidents involving employees or contractors on the Group’s sites which were required to be reported to
the Health & Safety Executive during the year (2022: 1). This did not result in adverse HSE reports or recommendations.
The individuals involved have fully recovered and were able to return to work with no long-term effects after their
incident. The Group continuously monitors and revises its operating, training and monitoring procedures as appropriate
to ensure that the safety of employees and contractors is maintained to a high standard and ensures there is no
deterioration in compliance with these standards.
Principal risks and uncertainties
The Board regularly monitors exposure to key risks, such as those related to production efficiencies, cash position and
competitive position relating to sales. It has also taken account of the risks facing the business from the challenging
economic environment including inflationary pressures, higher interest rates and their impact on consumer demand.
Further details of mitigating measures taken by management are set out on page 2.
It also monitors risks not directly or specifically financial, but capable of having a major impact on the business’s financial
performance if there is any failure. The key risks and the measures taken to manage these risks are noted below.
Capital structure, cash flow and liquidity
The Group has a strong balance sheet. Acquisitions during the previous year were financed by internal cash resources
and bank funding. The business is funded using; retained earnings, a long term mortgage, term loan and sale and lease
back arrangements to support investments in fixed assets, invoice financing and overdraft facilities for working capital.
Further details are set out in Notes 23 and 24.
At 31 March 2023 the invoicing financing is in a utilised position of £1,557,000 as this facility has been utilised to fund
the activities during the year (2022: £1,267,000). At 31 March 2023 the Group had utilised £26,000 (2022: £495,000)
of its overdraft facility.
Creightons Plc Annual Report 2023
11
Group strategic report (continued)
Principal risks and uncertainties (continued)
Competitive environment
The Group operates in a highly competitive environment in which demand for products can vary and customers have
the opportunity to transfer business to other suppliers. The Group works to minimise this risk by developing close
relationships with customers offering quality, service and innovation throughout the business. This risk is also further
reduced through the development of its branded product portfolio and by the diversity of customers and products offered.
Quality
The Group treats quality as its key requirement for all products and strives to deliver quality products for every price
point. Failure to achieve the required quality and safety standards would have severe consequences for the Group, from
financial penalties to the damage to customer relationships. The Group has a robust product development process to
mitigate risk wherever possible and to ensure all products are safe and fit for purpose. The Group is subject to frequent
internal and external safety, environmental, ethical and quality audits covering both accreditations held and a number
of specific operating standards our customers require us to comply with.
Global economic environment
On 24 February 2022 Russian forces entered Ukraine, resulting in Western nations reactions including announcements
of sanctions against Russia and Russian interests worldwide and an economic ripple effect on the global economy. The
immediate impact was a significant upward spike in energy and commodity prices, which continued into the first half of
the current financial year. In addition, BOE base interest rates have increased from 0.75% to 4.25% in response to
inflationary pressures. This has had a negative impact on consumer demand and the viability of many businesses. The
rate of increase in commodities has eased in the second half of the current financial year but core domestic inflation and
the prospect of prolonged higher interest rates remains a cause for concern. The Directors have carried out an
assessment of the potential global economic impact on the business, including the impact of mitigation measures and
uncertainties, and have concluded that the greatest impact on the business is expected to be from price increases.
The Directors have taken account of these potential impacts in their going concern assessments and have concluded
that the direct impact is not significant to the business, with the indirect impact of price increases being reviewed on a
regular basis. In the face of these challenges the focus of the business will be on positive cash generation and restoration
of profitability.
Credit risk
Our credit risk is that our customers are unable to pay, and we believe this risk is elevated currently due to the current
global economic climate. We proactively manage the risks faced by our customers by working closely with them and by
increasing debtor management and expanding our credit insurance. All customers’ debtor balances, are within insured
credit limits or they pay on a pro-forma basis. Credit control processes are in place to manage credit risk including
setting appropriate credit limits and the enforcement of credit terms and ongoing dialogue with all customers. We
minimise the risk from concentration of customers through implementation of these credit processes and this risk is
mitigated through the diversity of our customer base both by channel and geography. We remain vigilant to the credit
risks in light of the challenging economic environment.
Supplier sourcing and costs
Cost increases as a result of inflation together with pressures on supply of materials globally are our key supplier-related
risks. The pressure on global supply chains has eased but there remains uncertainty around future commodity pricing.
We continue to work closely with suppliers and have used our improved sourcing capabilities to expand our supply base
to ensure that we can meet the demand from our existing and new customers and minimise the impact of cost price
increases. We have an ongoing dialogue and communication with our customers to mitigate the impact on the business.
Environmental protection standards and sustainability
The Group’s technical department continues to monitor all relevant environmental regulations that the Group must
adhere to, to ensure continued compliance. We have successfully operated at both manufacturing sites without a
cessation in production due to an environmental incident. The risk of cessation of production from an environmental
breach is considered to be low but in such an event we would be able to move production to the other site or to outsource
to third party manufacturers in the short term.
The Group’s objective is to keep ahead of the move towards more sustainable products and processes. There is a risk
that if we do not take action we will be left behind and unable to meet our customers’ requirements. However, the Group
sees the move towards sustainability as an opportunity for business growth.
Creightons Plc Annual Report 2023
12
Group strategic report (continued)
Principal risks and uncertainties (continued)
Cyber security
Cyber Security remains a significant threat to all businesses. The Group has continued to invest in new software and
resources to minimise the risk of anyone accessing our systems and information. We have enhanced our ongoing
training programme for employees to ensure that they are constantly aware of their role in protecting the business from
all cyber security threats.
Section 172 statement
In accordance with the requirements of Section 172 of the Companies Act 2006 the Directors are aware of their duty to
act in the way they consider, in good faith, would be most likely to promote the success of the Group for the benefits of
its members in the long term and in doing so have regard to:
• the likely consequences of any decisions in the long term;
• the interests of the Group’s employees;
• the need to foster the Company’s business relationships with suppliers, customers and others;
• the impact of the Group’s operations on the community and the environment;
• the reputation for a high standard of business conduct; and
• the need to act fairly as between members of the Company.
Whilst the importance of giving due consideration to our stakeholders is not new, we are explaining in more detail how
the Board engages with our stakeholders to comply with the Section 172 requirement to include a statement setting out
how our Directors have discharged this duty.
The Board regularly reviews our principal stakeholders and how we engage with them. The stakeholder voice is brought
into the boardroom throughout the annual cycle through information provided by management and by direct engagement
with stakeholders where appropriate. The relevance of each stakeholder group may increase or decrease depending on
the matter or issue in question, so the Board seeks to consider the needs and priorities of each stakeholder group during
its discussions and as part of its decision-making. Details of our principal stakeholders, how and why we engage with
them is detailed below;
Shareholders
A key objective of the Board is to deliver long term sustainable growth for our shareholders and to maintain effective
communication with our shareholders to explain business performance and strategy. The Group’s principal means of
communicating with shareholders is through the Annual Report and Financial Statements. This is supported by bi-annual
presentations to shareholders where attendees question the executive Directors on the Groups’ performance and
direction. These sessions are also available to view on the Group’s website. The AGM also provides an opportunity for
shareholders to ask questions of the Directors.
Customers
The Directors believe that good relationships with our customers are a key component in the long term success of the
Group. These relationships are based on our commitment to provide our customers with quality, service and innovation.
We engage with a diverse range of customers from high quality department stores to value-driven discounters and also
brand owners within our contract division. Through the combined efforts of our specialist commercial and technical teams
our aim to provide a product offering suited to the needs of our customers. We work closely with all of our customers to
ensure fair trading agreements are in place and we strive to work closely to identify shared opportunities to increase
sales to ensure mutual growth in sales and profits. Our customers include consumers who purchase through a variety
of digital platforms and we recognise the increasing importance of effective communication with this expanding customer
group.
Employees
The Directors recognise the crucial role of all our employees in the success of the Group and are committed to enhancing
its methods of engagement with the workforce with thorough regular briefings, direct communications through text
messages and regular meetings with employee representatives through works councils. The Group offers an open and
inclusive culture where employees are offered the opportunity to progress within the business. The Group has a profit
related bonus system which ensures our employees participate in the ongoing success of the business. Share options
are made available to all employees of the Group to align the long term interest of our employees and shareholders.
Suppliers
Raw material and component prices constitute the significant proportion of the Cost of Goods Sold (COGS) and supply
chain issues in terms of pricing and delays have a major impact on business performance and continuity. We aim to
work responsibly with our suppliers and seek to maintain mutually beneficial and strategic relationships over the long
term. A due diligence exercise is carried out with new suppliers and ongoing suppliers’ performance is monitored
including adherence to our Modern Slavery and Human Trafficking Statement. We ensure all suppliers are treated fairly
when negotiating trading terms, including prompt payment for goods and services. We work proactively with our
Creightons Plc Annual Report 2023
13
Group strategic report (continued)
Section 172 statement (continued)
suppliers to support our vegan and cruelty-free claims on our products and to ensure we are up to date with the latest
technology and market trends.
Community
The Directors recognise the importance of engaging with the local communities in which the business operates and are
committed to making a positive contribution on the quality of life, environment and economy in the locations in which
the Group operates. The Directors are aware of the challenges of climate change and have put in place mechanisms to
ensure climate change considerations are incorporated into the strategic decisions of the business. These are fully more
fully described in the TCFD report on pages 16 to 22.
Key decisions made during the year, all of which have long-term implications for the ultimate success of the Group and
the section 172 and stakeholder considerations are set out below.
Key Board Decision
Section 172 and Stakeholder Consideration
Response to supply chain and
inflationary pressures
As detailed on page 2 the Group responded proactively to the deteriorating
economic environment and the unprecedented challenges facing the business due to
supply chain constraints and higher commodity and energy prices. The Group took
action across a number of areas which required the Directors to have regard to the
interests of key stakeholders. The overarching key priority was however to return
the business to profitability and positive cash generation.
➢ Customer Price
Recovery
• The Board identified the restoration of customer margin as a key element
in ensuring the long term viability of the business for the benefit of all
stakeholders. This involved negotiating price increases with our customers.
Such customer conversations were challenging but thanks to our
transparent and collaborative approach we were able to secure significant
price increases whilst retaining the confidence and support of our
customers.
➢ Supply Chain –
including cost and
overhead reduction
and efficiency
improvements
• The Group acted decisively to reduce costs across all areas of the business
and engaged collaboratively on a strategic level with a number of key
suppliers to ensure ongoing continuity of supply for the business at
competitive prices. This process encompassed a review of all cost and
overhead items and has delivered improved production efficiencies and a
lower ongoing cost base for the benefit of the benefit of shareholders,
employees, customers and suppliers.
➢ Inventory
Reduction and
Warehousing
• A decision was taken to reduce stock levels to 4 weeks across the business
which has reduced working capital requirement and overheads. This has
required changes to our internal planning process and also ongoing
engagement with our suppliers and customers.
• The Directors decided to relocate the picking and packing activities onsite
to Peterborough. This process is ongoing and has already reduced
distribution overheads. When completed this solution will provide a more
responsive service to our customers.
➢ Capex
• It was decided to curtail capital expenditure unless the payback was less
than nine months. However the Group was still in a position to deliver
efficiency improvements thanks to the capex investment programme
undertaken in recent years.
Renewal of Bank Facilities
• Bank facilities were renewed which provided ongoing and secure funding to
ensure continued adequate resources for the business to ensure the Group
can continue to operate for the benefit of all stakeholders.
Buyback of shares
• Buyback of 1.6m shares issued as part of the completion of the Emma
Hardie acquisition at a cost of £576k. The Board decided to hold the shares
purchased as Treasury shares. Notwithstanding the short term cash
outflow, the purchase had a positive dilutive effect on EPS and is
considered to be in the long term interests of the shareholders.
Elimination of Second Shift at
Peterborough site
• A decision was taken to eliminate the second shift at the Peterborough site.
This was made possible by recent capital investment and improved
efficiencies at both manufacturing sites. This decision delivered savings in
direct and indirect overheads and therefore improved long term business
profitability and cash generation.
• The elimination of the second shift ultimately resulted in 44 redundancies.
The Group embarked on a consultation programme with employees prior to
making the redundancies and where possible offered alternative
employment within the Group.
Creightons Plc Annual Report 2023
14
Group strategic report (continued)
Section 172 statement (continued)
Sustainability
• The Directors significantly expanded on TCFD reporting and ESG
responsibilities as detailed in the TCFD report on pages 16 to 22. Expert
consultants were engaged to facilitate climate workshops and assist the
development of a strategy to respond to the risks and opportunities of
climate change.
• The Group engages widely with customers, suppliers, employees and
advisors to understand the risks and opportunities associated with climate
change and believes that, in spite of any short term cost, it can secure a
long term strategic advantage in providing customers with appropriate
sustainable solutions.
Share Options issues during the year
• As disclosed in Note 26, share options of 300,000 were issued to employees
during the year. The Directors are aware of the potentially dilutive impact
of share options but believe that it is important to balance this impact with
the need to incentivise the Group’s employees, rewarding their loyalty and
success, whilst also contributing to the growth of the business and thereby
enhancing overall shareholder value over the long term.
Dividend policy
• No interim dividend was paid during the year and the Directors do not
propose a final dividend for the year ended 31 March 2023. Faced with the
challenging and volatile economic conditions facing the Group the Directors
have prioritised returning the business to profitability and positive cashflow.
This is consistent with the Directors’ objective to align future dividend
payments to the future underlying earnings and cash requirements of the
business and the need to be prudent about utilisation of cash resources.
The Board ensures that items requiring Board approval highlight relevant stakeholder considerations to be reviewed
when making decisions. As required, the Company Secretary will provide support to the Board to help ensure that
sufficient consideration is given to stakeholder issues.
Creightons Plc Annual Report 2023
15
Group strategic report (continued)
Corporate and social responsibility
The Group is mindful of its wider responsibilities as a significant local employer in both its principal locations and of the
contribution it makes to the local economy both where it and its suppliers are based. The Group adheres to Modern
Slavery and Human Trafficking Policies and adheres to best practice with regard to employment practices. All employees
are paid the National Living Wage Foundations earnings.
The Group is committed to operating in an honest way and without the use of corrupt practices or acts of bribery to
obtain an unfair advantage. The Group has an Anti-bribery policy which prohibits bribes, gifts, inappropriate
entertainment and hospitality as well as the avoidance of conflict of interest through personal or other relationships.
We value and respect our employees and endeavour to engage their talent and ability fully. Whilst the Group does not
operate a formal personal performance appraisal process, individual managers and supervisors undertake continuous
performance monitoring and appraisal for their subordinates, and routinely report the results of these to their own
managers and this assessment forms part of bonus payments. Part of this monitoring and appraisal includes assessment
of training required for personal development as well as succession planning within the Group, and all employees are
encouraged to undertake appropriate training to develop their skills and enhance their career opportunities.
The Group has formally adopted an Environmental Policy, which requires management to work closely with local
environmental protection authorities and agencies, and as a minimum, meet all environmental legislation. The Group
uses significant amounts of plastics, cardboard packaging and chemicals in its products. It ensures it meets all
regulations covering their use and has specific programmes covering;
• Sustainable palm oil; we are a member of Roundtable for Sustainable Palm Oil, holding their supply chain
accreditation. 99.9% of palm oil derivatives purchased by the Group are sustainably sourced.
• Packaging waste; all plastic and cardboard waste generated by the Group is recycled.
• Post-Consumer Recycled materials; we have an active development programme to use ‘post-consumer recycled’
materials in the manufacture of our products where practicable.
• Prepared for implementation of the Plastic packaging tax in April 2022 including measures to reduce plastic
content in our componentry. This includes collaborative working with customers on product reengineering.
• Progress on TCFD measures reporting was made during the year. We have engaged with consultants to assist
in the formulation of a strategy and science-based targets.
The tables below show the number of employees by gender in the Group as at 31 March 2023 and 31 March 2022.
Group 2023
Company 2023
Female
Male
Female
Male
Directors, including Non-executive Directors
1
6
1
6
Senior Managers
3
5
-
-
Other employees
260
146
-
-
Group 2022
Company 2022
Female
Male
Female
Male
Directors, including Non-executive Directors
1
6
1
6
Senior Managers
3
5
-
-
Other employees
325
183
-
-
The Group has formal Staff Handbooks, which cover all major aspects of staff discipline and grievance procedure, Health
and Safety regulations, and the Group’s non-discrimination policy.
Disabled persons
The Group's policy is to fully consider all applications for employment from disabled persons in relation to the vacancy
concerned. In the event of existing staff members becoming disabled, every effort would be made to enable them to
maintain their present position or to provide appropriate training and find an alternative role within another department.
Creightons Plc Annual Report 2023
16
Group strategic report (continued)
Task Force on Climate-Related Financial disclosures (TCFD) reporting
The Task Force on Climate-related Financial Disclosures (TCFD) was established by the Financial Stability Board to
improve reporting of climate-related risks and opportunities (CROs). Creightons plc has structured its climate disclosures
according to the TCFD recommendations.
According to the Financial Conduct Authority listing rule LR 9.8.6 R(8), reporting is on a ‘comply or explain’ basis.
Creightons plc is consistent with the TCFD recommendations and recommended disclosures, with the exception of
Strategy 2c, and Metrics and Targets 4c.
Pages 16 to 22 explain the work to be completed to ensure consistency with the TCFD recommendations and set out
the activities Creightons plc has planned during the financial year ending 31 March 2024, as it continues its journey
towards increased consistency.
Governance
The Board’s oversight of climate-related risks and opportunities
The Board
The Board is responsible for providing strategic guidance in respect of Creightons plc’s Environmental, Social and
Governance (ESG) programme, including actions to address climate-related matters and consider potential CROs. It
reviews climate-related reporting as part of the overall assessment of the Annual Report. An update on ESG related
topics is presented to the Board on a six-monthly basis by the chair of the ESG Committee, the Managing Director for
manufacturing.
The Board considers climate-related risks and opportunities when setting strategy, budgets (including capex) and
presently the Board does not yet see significant climate-related impacts on budgets, financial planning, and capex
within the timescale of the planning and budgeting process.
Creightons will be in a position to set emissions targets within the first six months of the financial year ending 31
March 2024, when these are in place, monitoring will be added to the Board’s agenda.
Governance Framework
The governance structure provides updates and information to the Board to ensure it can make informed decisions.
The Board is also responsible for overseeing and monitoring the management of all business risks and opportunities,
including CROs.
In terms of reporting lines, the TCFD Working Group identifies CROs and develops climate-related financial disclosures,
which are reported to the Environmental, Social and Governance Committee which has direct responsibility for
principal risks and uncertainties as well as challenging the outputs of the TCFD Working Group. This committee is led
by the Managing Director for manufacturing, who is a Creightons plc board member with direct influence at Board
level.
The governance of climate-related issues is set out in the graphic below.
TCFD Governance Structure
Role of Senior Management
ESG Committee
The ESG Committee is responsible for all matters pertaining to environmental, social and governance issues. Each
committee member is responsible for the execution of an action plan within a key business area. The key
responsibilities of the ESG Committee are:
• Delivery of the ESG action plan and monitoring progress.
• Developing and adhering to a board-approved roadmap of emissions reduction opportunities and developing
and monitoring progress.
• Collaborating with subject matter experts within business to deliver objectives around responsible sourcing,
waste, plastics, and packaging.
Creightons plc
Board
Remuneration
Committee
Audit Committee
ESG Commitee
TCFD Working
Group
ESG Working
Groups
Creightons Plc Annual Report 2023
17
Group strategic report (continued)
Task Force on Climate-Related Financial disclosures (TCFD) reporting (continued)
TCFD Working Group
Reporting to the ESG Committee is a TCFD Working Group which is responsible for the development of climate-related
financial disclosures including identifying climate-related risks and opportunities and assessing their business and
financial impacts, identifying potential responses, and ensuring appropriate stakeholder input.
The TCFD Working Group works in collaboration with the ESG Committee in developing and adhering emission
reduction opportunities and developing and monitoring progress for the purposes of consistency with the TCFD
recommendations.
External Advice
Creightons plc engaged external experts for expert external advice to supplement the capabilities within the Company
and assist in establishing initial data systems and reporting frameworks for our Scope 1, 2 and 3 emissions, as well as
assisting in identifying and analysing CROs and to understand the potential impacts from physical climate change risks
and risks associated with the transition to a decarbonised economy.
This expert engagement will continue in financial year ending 31 March 2024 to assist in setting appropriate science-
based targets and completing a carbon workshop education programme.
Key Activities
Board Level
Key Activities Financial year ended 31 March 2023
• The Managing Director for manufacturing presented the two updates in relation on current ESG activities,
including the progress of the Carbon Roadmap programme delivered in conjunction with external experts, the
work by the TFCD working group on identifying CROs, as well as current work on the Energy Saving
Opportunities Scheme.
Focus Financial year ending 31 March 2024
• The Board will review the CROs identified by the TCFD Working Group facilitated by external experts.
• Board to review and approve the Group’s roadmap in the setting of science-based emissions reduction
targets.
• Board to receive updates on progress against the key indicators in the ESG action plans.
Senior Level
Key Activities Financial year ended 31 March 2023
• The ESG Committee, led by the Managing Director for manufacturing, reviewed and updated environmental,
social, and business ethics goals and ambitions.
Focus Financial year ending 31 March 2024
• Following the completion of the Carbon Roadmap programme the ESG Committee will implement and monitor
progress of the execution of the climate action plans in each business area and develop our science-based
emission reduction targets.
• The ESG Committee will continue to identify, assess and manage climate risks through its existing risk
management process on an annual basis. It will also review the more detailed scenario analyses in financial
year ending 31 March 2024 conducted by the TCFD Working Group and external experts.
Operational Level
Key Activities Financial year ended 31 March 2023
• The TCFD Working Group, in conjunction with external experts identified climate-related risks, assessed their
impact on the group and identified potential responses.
Focus Financial year ending 31 March 2024
• The TCFD Working Group will work with the ESG Committee in building prioritised initiatives for emissions
reduction and to develop Science Based Targets aligned to the roadmap, along with completing scenario
analyse.
• A deeper dive into the substantive CROs which have been identified.
Creightons Plc Annual Report 2023
18
Group strategic report (continued)
Task Force on Climate-Related Financial disclosures (TCFD) reporting (continued)
Strategy
The climate-related risks and opportunities the organisation has identified over the short, medium and long-term
Creightons plc with input from external experts have conducted a review of climate related risks and opportunities
under the below categories, evaluating their short-, medium- and long-term likelihood, along with their financial,
operational, and reputational impacts.
A comprehensive risk analysis has taken place looking at the following risk categories: Current regulations, future
regulations, legal, technology, market, reputation, Physical risk (acute and chronic) as well as these opportunities
categories: Resource efficiency, energy source, products and service, market, and resilience.
These risks and opportunities have been identified over short (before 2025), medium (2025 to 2030) and long-term
(post 2030) time horizons.
Consideration was given to the likelihood (time horizon) of the risk impacting Creightons plc. A risk score was
generated (impact x likelihood) and those scoring greater than 12 were classed as substantive (indicated in table
below) and will be subjected to a deeper dive assessment in financial year ending 31 March 2024 by the TCFD Working
Group.
A summary of the substantive risks are in the table below.
Risk Category
Risk Type
Primary
Financial
impacts
Impact
Likelihood
Time
Horizon
Score
Substantive
(>= 12)
Technology
Substitution of existing
products and services
with lower emissions
options
Increased
direct costs
3
5
Short-
term
15
Y
Market
Changing customer
behaviour
Decreased
revenues
due to
reduced
demand for
products
and services
4
3
Medium-
term
12
Y
Increased cost of raw
materials
Increased
indirect
(operating)
costs
4
4
Short-
term
16
Y
Reputation
Increased stakeholder
concern or negative
stakeholder feedback
Decreased
revenues
due to
reduced
demand for
products
and services
4
3
Medium-
term
12
Y
The substantive opportunity is change in customer and consumer perception; we are well placed to respond to the
growing volume of climate related queries.
Risk Category - Regulatory and Legal
Impact Assessment
• Short term
o Based on our Scope 1 and 2 emissions, Creightons plc would be materially impacted by carbon
taxation.
o Following our Scope 3 emissions screening, the indirect cost of carbon taxation through the wider
supply chain both with the UK and abroad would have a material impact on Creightons plc.
o Developing a transition plan in-line with the proposed Mandatory Climate Transition Plan for
businesses.
o Creightons is within the Scope of packaging waste, Extended Producer Responsibility (EPR) and plastic
tax commitments.
o Creighton’s plc has taken steps to minimise its exposure to greenwashing claims, it has controls in
place to ensure it does not overstate its environmental claims on products and is working with industry
experts on ensuring the quality of its climate related data.
o Creighton’s plc provides guidance for its customers and is well prepared for mitigating this risk and
avoiding potential reputational exposure.
Creightons Plc Annual Report 2023
19
Group strategic report (continued)
Task Force on Climate-Related Financial disclosures (TCFD) reporting (continued)
• Medium term
o The Group is under increased reporting obligations as a premium listed Company. Implementation of
the TCFD recommendations is supported by external consultants and takes internal resources to
deliver this.
Risk Category – Technological, Market and Reputational
Impact Assessment
• Short Term
o Increased expenditure around the replacement of energy inefficient production and office equipment.
o As customers look to become more sustainable and address climate change, it is likely that demand
for products with lower emissions and more sustainably sourced raw materials could increase. There
can be challenges with some of the 'more sustainable' raw material substitutions.
• Medium Term
o Several key customers have signed up to the British Retail Consortium Climate Action Roadmap. This
commits them to achieving Net Zero emissions by 2040. If we do not work in conjunction with them,
there is a risk that they may choose to work with other suppliers that match their ambition.
o Increased requests for information from customers around climate action and its impact on internal
resources.
o Increased demand for sustainable materials affecting availability in the supply chain.
Risk Category – Physical (Acute and Chronic)
Impact Assessment
• Medium Term
o Impact to raw material availability and delays in supply chain and distribution
• Long Term
o Reduced labour and equipment productivity due to extremes in temperature.
o Disruption due to potable and process water supply reduction could impact manufacturing and
commercial operations, coupled with high water costs.
o Factory and infrastructure damage.
Opportunity Category – Resource Efficiency and Energy Source
• Short Term
o Reviewing low-emission technologies such as solar panels, fitting air source heat pumps, installing LED
lighting / PIR’s and efficient compressed air use will require upfront capex costs but could develop cost
savings through operating efficiencies over time.
o Developing products with more Post Consumer Regrind (PCR) recycled content could develop cost
savings through operating efficiencies over time.
o Better pallet utilisation to reduce transportation emissions.
o To develop transportation efficiencies and reduce costs.
o Continual training of staff on energy saving opportunities.
Opportunity Category – Products and Services, Market and Resilience
Impact Assessment
• Medium Term
o Increasing consumer demand for sustainable products could enable Creightons plc to increase its
market share.
o Having Creightons plc be at the forefront of sustainable formulations, products and packaging design
as well as providing good quality accurate sustainability data could help us gain new customers and
retain current ones.
o This opportunity will be maximised if sustainable products are affordable to consumers, otherwise
consumers may choose more affordable less sustainable products due to budget constraints.
We have made good progress in identifying the CROs we could be exposed to over different time horizons. We have
also started to describe the impact of CROs on our business, which has helped inform its risk management response
and potential adaptations to its strategy and financial planning.
• The Board has now put in procedures to assess the impact of climate related issues and all its impacts. We have
employed consultants to assist in the formulation of a holistic climate related strategy.
• The Board recognises the increasing importance of climate related issues on our business and all points in our
supply chain. We recognise that climate related issues are not a standalone activity and we have taken
measures to ensure that climate related processes are integrated into the financial planning and manufacturing
processes.
Creightons Plc Annual Report 2023
20
Group strategic report (continued)
Task Force on Climate-Related Financial disclosures (TCFD) reporting (continued)
• Following the Scope 3 and CRO analysis our substantive risks revolve around changing customer behaviour and
requests for information from suppliers. The ESG committee has worked extremely hard to respond to all
customer requests for information regarding climate change and climate related issues. Expertise within the
committee is expanding due to continued collaboration with our consultants as well as involvement in industry
seminars / webinars and close working with our trade association.
• Our assessment is that climate related issues will not have a long-term impact on the viability of the business,
however we are committed to acting in a responsible manner to meet all our obligations.
The resilience of the organisation’s strategy, taking into consideration different climate-related scenarios, including a
2°C or lower scenario.
In financial year ending 31 March 2024, Creightons plc intends to conduct a more granular risk assessment for the
CROs identified as being substantial, in conjunction with external experts and will also review the businesses reliance
under different climate-related scenarios including a 2 °C or lower scenario.
Risk Management
Processes for identifying and assessing climate related risks
To assess the identified risks and opportunities, workshops were held with the cross-functional senior individuals from
across the Group as well as our key consultant. Following this workshop, a CRO matrix was completed and considered
the following areas:
Risk categories: Current regulations, future regulations, legal, technology, market, reputation, Physical risk (acute and
chronic)
Opportunities categories: Resource efficiency, energy source, products and service, market, and resilience.
Substantive risks were highlighted along with the management/mitigation methods, as well as the financial impact. A
detailed explanation of this can be found in sections above. These are reviewed at least annually, or as new or
emerging climate risks are identified.
As part of our Carbon Roadmap programme Creightons plc along with external experts have undertaken a Scope 3
emissions screening based on a financial data model for our base line year financial year ending 31 March 2022.
Emissions in financial year ending 31 March 2022 totalled 88,243.6 tonnes CO2e with Scope 3 emissions accounting
for 98.8% all emissions. The aim of this project was to identify the most impactful areas of Creightons plc’s value
chain which are, purchased goods and services including emissions from packaging and raw materials and the
upstream & downstream distribution of materials and finished products. These are the key business areas for
Creightons PLC’s GHG inventory, accounting for 94.2% of the total.
This data collection and screening process will now be further refined and repeated for financial year ended 31 March
2023 during financial year ending 31 March 2024. The information gathered during these screening processes will
better inform where emission reduction measures and risk management strategies can be focused.
A final validation of this CRO matrix and a deeper dive into the substantive risks will be completed by the TCFD
Working Group in financial year ending 31 March 2024 and the outputs from the assessment will then be shared with
the wider team. A routine annual review of all topics detailed in the CRO matrix will also be conducted.
Processes for identifying, assessing, and managing climate related risks
Risk Category - Regulatory and Legal
Risk Response
• Short Term
o We work with government bodies and external consultants to ensure we are fully compliant with our
plastic tax, EPR and packaging waste obligations.
o Developing Net Zero and science-based targets, along with a detailed action plan.
o Continue to monitor new and amended legislation via working with industry groups and external
consultants.
• Medium Term
o To mitigate carbon pricing mechanisms we will be evaluating renewable energy alternatives to natural
gas and procure energy from renewable sources.
Creightons Plc Annual Report 2023
21
Group strategic report (continued)
Task Force on Climate-Related Financial disclosures (TCFD) reporting (continued)
Risk Category – Technological, Market and Reputational
Risk Response
• Short Term
o Review the available lower emission technologies appropriate to our production requirements and build
this into the capital expenditure plan.
o Creightons plc have been members of the Roundtable of Sustainable Palm Oil (RSPO) since 2014.
Currently 99.9% of the palm oil derivatives (which are key in many personal care products) we
purchase are from RSPO sources, decreasing their environmental impact.
o Creightons plc are actively increasing the PCR usage within its portfolio of products. In the financial
year ending 31 March 2023, 34% of our packaging contained PCR content. We will look to increase
the amount of packaging which contains PCR whilst working with industry experts on the packaging
materials that currently are unable to contain PCR.
o Working with consultants to develop a carbon management strategy aligned with the TCFD
recommendations and evaluating setting science-based emission reduction targets, with the
involvement of SBTi.
o Presently the Company has not been participating in the Carbon Disclosure Project (CDP), we anticipate
joining the CDP within the next 12 months.
o There has been an increased number of requests from customers on climate related information,
coupled with the demands of quantifying our Scope 3 emissions. We are reviewing our internal resource
and consultancy to meet these demands.
o Follow-up questionnaires to suppliers on their response to climate change initiatives and deep dive on
each individual component or raw material supplied.
• Medium Term
o Build sustainability and carbon impact into new product development processes.
Risk Category – Physical (Acute and Chronic)
Risk Response
• Short Term
o Look at encouraging water saving by employees.
o Review business continuity plan in relation to flood and sea level rise risks.
• Medium Term
o Understand suppliers’ preparedness for future heat stress.
o Engage with suppliers currently at risk and for those having future risk of flooding.
o Explore options for water saving in the manufacturing process.
• Long Term
o Consider introduction of natural cooling and ventilation solutions.
Opportunity Category – Resource Efficiency and Energy Source
Opportunities Response
• Closely monitor technological developments and major brand behaviour to be able to act as an innovator and
a fast follower.
• Continue monitoring the cost difference in renewables versus non-renewables so that the shift to increased
renewables can be timed correctly.
Opportunity Category – Products and Services, Market and Resilience
Opportunities Response
• Short Term
o Continue monitoring consumer demand for sustainable products.
o Ensure continued capex investment in sustainable technology to ensure readiness to meet rising
demand.
o To be able to retain current customers and gain new ones with the quality or our sustainable
formulations and the accuracy of our climate data we are:
▪ Continuing climate related education activities in conjunction with external experts for all staff
to ensure they remain at the forefront of this topic.
▪ R&D researching all manner of green technologies, formulation design and packaging types.
Creightons Plc Annual Report 2023
22
Group strategic report (continued)
Task Force on Climate-Related Financial disclosures (TCFD) reporting (continued)
Processes for identifying, assessing, and managing climate related risks are integrated into the organization’s overall
risk management.
Creightons plc has detailed and robust risk management processes around the design, procurement, and safety of
all personal care products it manufactures. As previously mentioned, these would currently cover sustainability and
legislative topics relating to the use of:
• Round table of sustainable palm oil. Creightons plc holds the RSPO chain of custody accreditation which is
completely integrated into the Company’s quality management system and is independently audited on an
annual basis. Presently 99.9% of palm derivatives used are from an RSPO sustainable source.
• Prohibiting or restricting materials derived from species on the IUCN Red List. All materials are reviewed as part
of our R&D development process to ensure there are no sustainability issues with ingredients used in
formulations.
• We are actively involved in increasing the amount of PCR inclusion within our products. Currently at the financial
year end 31
March 2023, 34% of plastic components contain PCR, an increase of 14% from the previous year.
• In other areas, the business continuity plans include extreme weather and climate events, and our capital
expenditure review process considers the energy efficiency savings on new equipment.
In financial year ending 31 March 2024 we will use the CRO matrix, scenarios resilience and emissions screening
data to further integrate climate related risks into the organisations overall risk management strategies or add
additional process where required.
Metrics and Targets
We calculate our Scope 1 and Scope 2 GHG emissions annually as part of the Streamlined Energy and Carbon
reporting requirements, these are calculated in accordance with the GHG Protocol and the SECR guidelines.
Details of the Group’s Scope 1 and 2 carbon emissions for the financial year ending 31 March 2023 are set out on
page 24.
Currently, the Group is not consistent with recommended disclosures 4(a) – 4(c). Whilst Scope 1 and Scope 2
GHG emissions have been calculated under the SECR requirements finalised Scope 3 emissions data for financial
year ending 31 March 2023 are still to be completed.
The next stage in the Group’s journey towards consistency with the TCFD recommended disclosures 4(a) – 4(c) is
to work with an external partner during the financial year ending 31 March 2024 to:
• Setting appropriate Science Based Targets in conjunction with the SBTi
• Benchmark our performance by participating in the Carbon Disclosure Project (CDP) reporting cycle starting in
April 2024.
• Develop a roadmap of emissions reduction opportunities.
• Deeper dive into all substantial climate related risks
• Further ingrate climate related risks into the organisations overall risk management strategies.
Creightons Plc Annual Report 2023
23
Group strategic report (continued)
Non-financial information statement
This Annual Report and in particular this Strategic Report, contains the information required to comply with the
Companies, Partnerships and Groups (and Non-Financial Reporting) Regulations 2016, as contained in sections 414CA
and 414CB of the Companies Act 2006.
The table below provides key references to information that, in conjunction with the TCFD Report, comprises the Non-
Financial Information Statement for the year ended March 2023.
Reporting requirement
Group Policies that guide our
approach
Information and risk
management, with page
references
Environmental matters
Group Environmental, Health,
Safety, Energy and Sustainability
Policy
• TCFD report on pages 16 – 22
• Section 172 statement on pages
12 - 14
• Strategy, objectives and future
developments on page 8
Employees
Group Environmental, Health, Safety,
Energy and Sustainability Policy
• Section 172 statement on pages
12 - 14
• Disabled persons on page 15
• Health and Safety on page 10
• Diversity policy on page 31
Social matters
Corporate and social responsibility
policy
• Corporate and social
responsibility on page 15
Respect for human rights
Modern Slavery and Human
Trafficking Policies
• Corporate and social
responsibility on page 15
• Suppliers on page 12
Anti-corruption and
anti-bribery matters
Group Anti-Bribery and Corruption
Policy
• Corporate and social
responsibility on page 15
Description of the business model
Environmental
As a manufacturing business we understand that we must continue to evolve
in order to meet the needs of our stakeholders. The Group continues to
improve its environmental credentials in a commercially viable manner. We
are taking proactive steps to build on this as set out in our second report
under the TCFD framework on pages 16 – 22.
Social
The foundation of the Group’s strength is its people. The Group’s policy is to
employ people who embody its core values of quality, service and innovation.
These values apply to all employees regardless of position.
Governance
The Group’s arrangements are set out in the Corporate Governance section
on pages 30 – 33.
Description of the principal risks in relation to the above matters, including
business relationships, products and services likely to affect those areas of
risk, and how the Group manages the risks
• Principal risks and uncertainties
on pages 10 - 12
Non-financial key performance indicators
• TCFD report on pages 16 - 22
The Modern Slavery policy can be located at www.creightonsplc.com
Going concern
The Directors are pleased to report that the Group has renewed its bank facilities and continues to meet its debt
obligations and expects to operate comfortably within its available borrowing facilities. The Group’s cash on hand at 30
June 2023 is positive £0.4m. We have carried out a review of our cash requirements for the next 12 months. Scenarios
modelled included the removal of the Group’s largest customer and increases of 20% in costs of raw materials or
overheads. These models are more extreme than the conditions prevailing during the last 12 months but demonstrate
that even without management tackling current overhead levels or increasing prices to customers, the Group would not
fully utilise available bank facilities over the next 12 months. The Directors have therefore formed a judgement, at the
time of approving the financial statements, that there is a reasonable expectation that the Group has adequate resources
to continue in operational existence for the foreseeable future being at least twelve months from the date of this report.
For this reason, the Directors continue to adopt the going concern basis in preparing the financial statements.
This report was approved by the Board of Directors on 06 July 2023 and signed on its behalf by:
Bernard Johnson
Managing Director
bernard johnson (Jul 6, 2023 17:54 GMT+1)
bernard johnson
Creightons Plc Annual Report 2023
24
Directors’ report
The Directors present their annual report on the affairs of the Group, together with the financial statements and auditor’s
report, for the year ended 31 March 2023. The corporate governance statement set out on pages 30 to 33 forms part of
this report.
The Strategic Report on pages 3 to 23 provides a fair review of the Group’s business for the year ended 31 March 2023
as well as explaining the Group’s strategy, objectives, future developments, its key performance indicators for monitoring
the business and the Group’s principal risks and uncertainties that could impact on the Group.
The Strategic Report on page 9 covers the Groups Research and Development activities and on page 15 covers Disabled
Persons practice.
The Strategic Report on page 23 covers the Going concern policy.
Dividends
The Directors do not propose a final dividend for the year ended 31 March 2023 (2022: £Nil). No dividends were paid
during the year. The 2021 final dividend of 0.50 pence per ordinary share and an interim 2022 dividend of 0.15 pence
per ordinary share were paid during the year to 31 March 2022 total 0.65p (2021: 0.65p).
Acquisition of the Company’s own shares
Further to the shareholders’ resolutions of 24 August 2022, the Company purchased 1,600,000 ordinary shares with a
nominal value of £0.01 and representing 2 per cent of the Company’s called up ordinary share capital, for a consideration
of £576,000. The reason for the purchase was to enhance earnings per share.
Annual UK energy consumption and Greenhouse Gas (GHG) emissions
The Companies Act 2006 (Strategic Report and Directors’ Report) Regulation 2018 requires Creightons Plc to disclose
annual UK energy consumption and Greenhouse Gas (GHG) emissions from SECR regulated sources. Energy and GHG
emissions have been independently calculated for the 12-month period ending 31 March 2023.
We have reported on all of the emissions sources required under the Large and Medium-sized Companies and Groups
(Accounts and Reports) Regulation 2008 as amended in August 2013. The reporting boundary used for the collation of
the above data is consistent with that used for consolidation purposes in the financial statements. We have used GHG
Protocol Corporate Accounting and Reporting Standard (revised edition), data gathered to fulfil our requirements under
the CRC Energy Efficiency scheme, and emission factors from the UK Governments GHG Conversion Factors for Company
Reporting 2019 to calculate the above disclosures.
The figures reported above relate to emissions and energy consumed in the United Kingdom only, the overseas
operations consumption of energy is minimal. The figures are reported under the location-based method which reflects
the average emissions intensity of the grids on which energy consumption occurs (using mostly grid-average emission
factor data), namely the UK grid for the Group.
The key sources for emissions are gas and electricity. We have not included Co2e emissions from Group employees’
travel, which we considered immaterial. Measures taken to date include the installation of a new, more energy efficient
boiler at the Peterborough site and installation of new LED lighting at both sites.
Year ended
31 March 2023
Year ended 31
March 2022
% change
Energy (kWh)
Natural gas
2,926,451
3,617,440
(19.1)
Other fuels
3,963
3,963
-
Electricity
1,869,902
2,048,984
(8.7)
Total energy
4,800,316
5,670,387
(15.3)
Emissions (tCO
2
e)
Scope 1
Natural gas
534.2
629
(15.1)
Scope 1
Other fuels
1
1
-
Scope 1
Refrigerant
gases
12.3
12.5
(1.6)
Scope 2 (LB)
Electricity
361.6
435.1
(16.9)
Scope 2 (MB)*
Electricity
488.4
608.1
(18.8)
Total SECR
emissions
909.1
1,077.6
(15.6)
Emission intensity ratio
Intensity
metric
34,219
35,001
(2.2)
Emissions intensity (tCO
2
e / unit)
0.027
0.031
(12.9)
Creightons Plc Annual Report 2023
25
Directors’ report (continued)
The Group has set a target of reducing tonnes of Co2e per £m of cost of sales by 5% per annum (based on the figures
reported in the year ended 31 March 2019 of 46.9 tonnes of Co2e per £m of cost of sales) over the 5 years ending 31
March 2024. The Group is currently ahead of this target, however it is planned to introduce a Science Based Target
(SBT) to replace the intensity target in March 2024 which is linked to Scope 1, 2 and 3 emissions. The ambition of this
target will be reviewed in preparation for the annual report for the year ended 31 March 2024.
Creightons Plc is committed to reducing its environmental impact and contribution to climate change through
continuous improvement procedures. We have implemented several initiatives within the reporting period, primarily
focused on energy efficiency:
• Ongoing investment in lighting replacements across the warehouse and rest of the factory
• £62K investment in replacing compressors with variable rate equivalents, saving an estimated £7.5K in annual
energy costs
• Installation of PIR motion sensors in warehouse, toilet and canteen areas
In addition, we are working with our suppliers and customers to develop lower-carbon products with a higher post-
consumer recycled material (PCR) content, with some of our customers having started to use PCR componentry in
their brands. Currently, 80% of the packaging from products produced by us can be recycled. We aim to minimise all
packaging where possible and have recently achieved this by reducing full diameter overcaps to small dust caps where
possible, along with removing plastic shives from packaging where they are not required.
Methodology
Activity data have been converted into equivalent energy and GHG emissions using emissions factors published by the
UK Government in 2022. Electricity and natural gas disclosures have been calculated using metered kWh consumption
taken from supplier fiscal invoices. GHG emissions associated with Scope 2 purchased electricity have been reported
using both market-based (MB) and location-based (LB) methodologies. Market-based emissions have been carried into
the total emissions figure – corresponding location-based emissions have been included for comparison only.
Where there is limited visibility of a site’s energy consumption, electricity and natural gas consumption has been
estimated based on floor area and CIBSE industry benchmarks for energy usage within offices. A small amount of gas
oil is purchased on an ad-hoc basis, for which consumption has been estimated based on run hours.
Refrigerant gas emissions were calculated using a screening methodology with data taken from aircon servicing
certificates carried out in 2023 for the Peterborough site. The reports have then been used to estimate the emissions for
the Devon site. Finally, last year’s gas consumption has been amended due to billing issues in FY22.
Capital structure
The issued share capital is detailed in note 25. Creightons Plc has one class of ordinary shares, which carry no rights to
fixed income. Each share carries one vote at general meetings of the Company.
There are no specific restrictions on the size of a holding nor on the transfer of shares, which are governed by the general
provisions of the Articles of Association and prevailing legislation. The Directors are not aware of any agreements
between holders of the Company’s shares that may result in restrictions on the transfers of shares or their voting rights.
Details of the employee share schemes are set out in note 26.
No person has any special rights of control over the Company’s share capital and all issued shares are fully paid.
Creightons Plc Annual Report 2023
26
Directors’ report (continued)
With regard to the appointment and replacement of Directors, the Company is governed by its Articles of Association,
the UK Corporate Governance Code, the Companies Act and related legislation. The Articles themselves may be amended
by special resolution of the shareholders. The powers of the Directors are governed by the Companies Act 2006, the
Articles of the Company and are detailed in the Corporate Governance statement on pages 30 to 33. Directors are
required to retire upon the third anniversary of their last election.
Under the terms of resolution 8 at the 2022 AGM, the Company has the authority to issue without pre-emption rights
3,487,809 ordinary shares, being 5% of the issued share capital at that time. This authority expires after 15 months
from its date of adoption (24 November 2023) or until the next AGM if sooner unless renewed. The Directors will propose
a resolution renewing this power based upon the new issued share capital.
Under the terms of resolution 9 at the 2022 AGM, the Company has the authority to purchase 1p ordinary shares up to
a maximum aggregate nominal value of £34,878.09, being 5% of the issued share capital at that time, at no more than
105% of the average of the middle market quotations for ordinary shares for the five business days prior to the date of
the purchase and the minimum price of 1p. This authority expires after 15 months from its date of adoption (24
November 2023) or until the next AGM if sooner unless renewed. The Directors will propose a resolution renewing this
power based upon the new issued share capital.
There are several other agreements that alter or terminate upon a change of control of the Company or subsidiary
companies such as commercial agreements, bank facility agreements, property leases and employee share plans. None
of these are expected to be considered significant in terms of their likely impact on the business of the Group taken as
a whole. There are no agreements between any companies within the Group and any of their Directors or employees
that provide for compensation for loss of office or employment that occurs because of a takeover bid.
Business Relationships
Our Directors and employees foster great business relationships with all of our external stakeholders. Further information
on the matter is included in the section 172 Statement on pages 12-14.
Employees
The Group places significant importance on the contributions of its employees and aims to keep them informed of
developments in the Group through a combination of Teams briefings and electronic communication, which has increased
significantly in recent years. There are Works Councils on both of the Group’s sites where employee concerns are raised.
Employee input is encouraged and Directors and senior management regularly tour the facilities and engage with
employees.
A large number of employees are members of the Group’s Share Option scheme and can participate in the Group’s
success. All employees can earn up to 7.5% of their basic earnings in a Group wide bonus scheme as long as the Group
has met its profit targets. This Bonus is paid twice per year and has been paid regularly in recent years. However due
to the challenging trading conditions no profit-related bonus was paid in the current financial year.
The Strategic Report on page 12 covers how the Directors have had regard to employee interests, including the effect
of principal decisions taken by the Group during the financial year.
Directors
The Directors who held office during the year were as follows:
William O McIlroy (Executive Chairman and Chief Executive)
Bernard JM Johnson (Managing Director)
Philippa Clark (Deputy Managing Director)
Martin Stevens (Group Managing Director – Manufacturing)
Paul Forster– (Non-executive)
William T Glencross (Non-executive)
Nicholas DJ O’Shea (Non-executive and Group Company Secretary)
William McIlroy – Chairman and Chief Executive
Mr McIlroy is a major shareholder and has served on the Company’s Board since 2000 and been Chairman and Chief
Executive since 2001. He has extensive knowledge and experience of the personal care industry. Since his appointment
to the Board, he has provided invaluable strategic direction and guidance to the Company, which has resulted in its
recovery from a historically poor trading and funding position, leading to the delivery of sustained profit and earnings
growth for over a decade.
Bernard Johnson - Managing Director
Mr Johnson has been the Company’s Managing Director since 2002 and has been in similar senior positions with
manufacturing businesses over the past 30 years, in many cases brought in on a rescue and recovery basis. He has
overseen the turn-round and subsequent growth of the business during his time as Managing Director as well as
managing the acquisition and integration of both the Potter & Moore Innovations business in Peterborough and more
recently the Potter & Moore Devon, Emma Hardie and Brodie & Stone businesses.
Creightons Plc Annual Report 2023
27
Directors’ report (continued)
Philippa Clark – Deputy Managing Director
Ms Clark has worked within the industry for more than 20 years in a wide and extensive range of sales, marketing and
commercial roles across private label, branded and contract businesses. In recent years she has headed up the
development of the Creightons branded portfolio, growing and extending the reach of the Group's award-winning brands
into multiple channels and international markets whilst also overseeing the development of the strengthening private
label division of the business. She has held the position of Global Marketing Director since her appointment to the Board
in 2015 and Deputy Managing Director since 8 July 2020.
Martin Stevens – Group Managing Director – Manufacturing
Mr Stevens is a Chartered Chemist and has worked in the cosmetics industry for more than 30 years with extensive
experience across the personal care and household sector in Research & Development, Quality Assurance, Production
and Procurement. Martin has been Technical Director at Potter & Moore Innovations Ltd (the Group's principal trading
business) and Creightons Plc for the past 16 years. He was appointed Group Managing Director of Manufacturing in
March 2022 including responsibility for climate-related risks and opportunities. He has previously been Technical Director
of Norit Body Care Toiletries, Technical Director at the manufacturing division of AAH Pharmaceuticals Ltd, Chief Chemist
at Columbia Products Co Ltd after initially entering the industry with L'Oreal working with brands such as Lancôme and
Cacharel. Martin was appointed as Group Deputy Managing Director when he joined the Board in 2015.
Paul Forster – Non-executive Director - formerly Group Finance & Commercial Director
Mr Forster was appointed Non-executive Director on 01 April 2021 after retiring from his full time executive role as
Group Finance & Commercial Director. Paul has been with the Potter & Moore Innovations business for more than 30
years, primarily working as Chief Financial Officer but also including spells overseeing manufacturing. Previously he was
Finance Director of Beauty International Fragrance Ltd (BIF), who distributed the Coty fragrance range throughout
Europe and the Far East. Prior to joining BIF Paul qualified as a Chartered Accountant with Touche Ross.
William Glencross - Non-executive Director
Mr Glencross has had many years' sales, marketing and general management experience in the cosmetics and toiletries
industry in both the branded and private label sectors, having been Sales & Marketing Director and then Managing
Director of Potter & Moore, and was previously General Manager of the Fine Fragrance division of Shulton G.B., part of
the American Cyanamid Group. Mr Glencross was appointed to the Board in July 2005 and made a non-executive Director
on his retirement in 2006.
Nicholas O’Shea – Non-executive Director & Group Company Secretary
Mr O’Shea has been the Company secretary for most group companies for over 25 years and a Director since 2001. A
maths & chemistry graduate, he has a background in the toiletries and chemicals sectors having held senior financial
positions in a number of world-wide businesses including Proctor & Gamble, Scott Paper and Omya Pluss-Stauffer. Mr
O’Shea is a CIMA qualified management accountant, and he is currently CFO or finance Director with several privately-
owned SMEs as well as an investment management Company in the City.
Director indemnities
There are no Director indemnities.
Directors’ insurance
During the year, the Company has purchased insurance cover for the Directors against liabilities arising in relation to
the Group, which remained in force at the date of this report.
Directors standing for re-election
Under the terms of the Articles, Directors are required to retire on the third anniversary of their last election. No
Directors come up for election this years under article 76 (all were re-elected last year or the year before). The
previous requirement for retirement by rotation by thirds was abolished in the 2006 Companies Act.
Substantial shareholdings
At 31 March 2023 the Company had been notified, in accordance with chapter 5 of the Disclosure and Transparency
Rules, of the following substantial interests, being 3% or more of the ordinary shares in issue:
Shareholder
Number of shares
% held
Mr WO McIlroy (including Oratorio Developments Ltd)
16,219,275
22.64%
Mr & Mrs B Geary
6,273,427
8.76%
Mr BJM Johnson
5,245,844
7.32%
Messrs S & A Chandaria
3,500,000
4.89%
The Estate of Mr T Amies
2,580,000
3.60%
Mr B Dale
2,451,740
3.42%
No notifiable share transactions by any of the above shareholders have been advised to the Company.
There have been no sales of ordinary shares during the period between 31 March 2023 and 30 June 2023.
Creightons Plc Annual Report 2023
28
Directors’ report (continued)
The Company has received no other information requiring such notifications under chapter 5 of the Disclosure and
Transparency Rules during the year. The above table shows the percentages held revised for share issues subsequent
to the latest notification from the relevant shareholder.
Financial instruments
The Group’s financial risk management objectives and policies are discussed in Note 21 to the Consolidated Financial
Statements on pages 90 to 93.
Resolutions to be proposed at the Annual General Meeting to be updated
The Board will be proposing the following resolutions at the AGM. The detailed wording of the resolutions is contained
within the notice of the AGM. They have the support of all Board members, who will vote in favour of them with all their
own shareholdings and those under their control, and with any discretionary proxies granted to them personally or in
the capacity of chair of the meeting.
1. To receive and consider the Group's financial statements and reports of the Directors and auditor for the
year ended 31 March 2023.
2. To receive and approve the Directors’ remuneration report for the year ended 31 March 2023.
3. To approve the Directors’ remuneration policy as detailed in pages 40 to 43 of the Directors’ remuneration
report.
4. To re-appoint Mazars LLP as auditors and to authorise the Directors to determine their remuneration.
5. To give authority to the Directors to allot shares pursuant to Section 551 of the Companies Act 2006.
This authorises the Company for a period of up to 15 months, or until the next AGM if sooner, to allot 1p
Ordinary Shares up to an aggregate nominal value of £233,431.94 being a further one third of the
Company’s present issued share capital as a rights issue.
6. As a special resolution, to grant a limited disapplication of the statutory pre-emption rights contained in
Section 570 of the Companies Act 2006. This authorises the Company for a period of up to 15 months, or
until the next AGM if sooner, to allot 1p ordinary shares up to an aggregate nominal value of £35,014.79
being 5% of the Company’s present issued share capital, without first offering them as a rights issue to
existing shareholders.
7. As a special resolution, to give a limited power to the Company to purchase its own shares. This authorises
the Company for a period of up to 15 months, or until the next AGM if sooner, to purchase 1p ordinary
shares up to a maximum aggregate nominal value of £35,014.79 being 5% of the Company's present
issued share capital, at no more than 105% of the average of the middle market quotations for ordinary
shares for the five business days prior to the date of purchase and the minimum price of 1p.
The resolution approved at the AGM on 24 August 2022 relating to the authorisation of the Company to purchase 1p
ordinary shares up to a maximum 5% of the Company's issued share capital at that date remains in place and is
unused.
Directors’ confirmations
Each Director at the date of approval of this annual report confirms that:
• so far as the Director is aware, there is no relevant audit information of which the Group’s auditor is not
aware; and
• the Director has taken all the steps that he/she ought to have taken as a Director in order to make
himself/herself aware of any relevant audit information and to establish that the Group’s auditor is aware
of that information.
This confirmation is given and should be interpreted in accordance with the provisions of s418 of the Companies Act
2006.
Creightons Plc Annual Report 2023
29
Directors’ report (continued)
Viability statement
In accordance with the UK Corporate Governance Code 2018, the Directors have assessed the viability of the Group over
a longer period than the 12 months required by the ‘Going Concern’ provision. The Board conducted this review for a
period of 3 years. In making this statement, the Directors have carried out a robust assessment of the Group’s current
position and prospects, the principal risks facing the business, the impact of sensitivity analysis, together with the
Group’s principal risks and uncertainties (outlined in the Strategic Report on pages 10 to 12).
The Group continues to take advantage of opportunities as evidenced by the two business acquisitions in the prior year.
The Group has flexible manufacturing capabilities at both sites and has the ability to respond to changes in consumer
and market trends as appropriate.
The Group continues to be able to successfully manage employees, the supply chain and customers, and considers the
managing of all three relationships key in the medium term particularly due to the challenges presented by the current
economic climate. This assessment is based on our ability to retain existing borrowing facilities and to continue to sell
our products and brands to existing and new customers. We have performed a going concern assessment which confirms
the Group has adequate resources to continue in operational existence for the foreseeable future. This assessment also
included various sensitivity analysis including the loss of the Group’s largest customer and various scenarios on
increasing costs.
The Group continues to meet its debt obligations and expects to operate comfortably within its available borrowing
facilities going forward.
Based on the above, the Board confirms it has a reasonable expectation that the Group will continue in operation and
meet its liabilities as they fall due over the 3 year period of assessment.
Auditor
A resolution to re-appoint Mazars LLP as auditors is being proposed at the forthcoming Annual General Meeting.
By order of the Board
Mr Bernard Johnson
Managing Director 06 July 2023
bernard johnson (Jul 6, 2023 17:54 GMT+1)
bernard johnson
Creightons Plc Annual Report 2023
30
Corporate governance statement
Introduction
The Board of Directors is responsible for the long-term success of the Group, through the sustainability of the Group’s
business model and showing leadership and drive to ensure the Group delivers on its strategies. The Board identifies
opportunities to maintain the long-term success of the Group and devises strategies and actions to take advantage of
these opportunities. The strategy will always take into account the costs and commitments associated with the
opportunities and will ensure the risks are managed to reduce the short-term risks. The Board is conscious of all
stakeholders when making decisions, with particular focus on protecting and respecting the interest of its employees.
Compliance
The Listing Rules of the Financial Conduct Authority (“FCA’’) require listed companies to disclose how they have applied
the principles set out in the UK Corporate Governance Code (the “Code”) issued by the Financial Reporting Council and
whether or not they have complied with its provisions. The UK Corporate Governance Code is available on the Financial
Reporting Council’s website: www.frc.org.uk. The Board is committed to the principles set out in the Code but judges
that some of the processes are disproportionate or less relevant to the Company, given the relatively small size and
minimal complexity of the business.
The Company has not complied with the Code since its issue as regards the following:
• No formal training programme is in place specifically for Non-executive Directors.
• The role of the Chairman and Chief Executive are combined.
• The non-executive Directors are not limited to a period of office.
• There is no Director considered by the Board to be independent.
• There are no independent Directors on either the Remuneration or Audit Committees.
• The share options granted to Directors have a vesting period of less than 5 years.
Regarding division of responsibilities The Code recommends that the Chairman of a listed Company should not hold
executive powers, and should be ‘independent upon appointment’ (provision 9). William McIlroy is both Chairman and
Chief Executive Officer, he is also a major shareholder. The Board continues to believe that it is appropriate for William
to be both Chairman and Chief Executive Officer due to his in-depth knowledge of the business. Nevertheless, the Board
is attentive to the implications of combining the roles and therefore has ensured that safeguards are in place to protect
independence and ensure that proper processes and controls are followed. These include: the independent judgement
of the Non-Executive Directors, effective functioning committees and robust internal controls. The Board also operates
a formal process of performance evaluation with the Chairman and Remuneration Committee regularly reviewing the
performance of all members of the Board.
Additionally, the Chairman has been in place beyond nine years which the Board consider appropriate given his wide
business and industry experience and ensuring business continuity.
With regard to the issue of share options to Directors with a vesting period of less than 5 years, options have been
issued with a vesting period of 3 years in line with options issued to other group employees. These options are issued
under the Company Share Option Plan which was approved by shareholders in 2018.
With the growth of the Company and increasingly prescriptive compliance requirements, the Board is continuing to
review its governance arrangements with the intention of ensuring that it continues to be as compliant with guidelines
and best practice as is appropriate and practical for a Company of our size and resources.
The Group has an Equal Opportunities policy which encompasses our commitment to diversity. Under this policy the aim
is to ensure that all employees are treated equally, irrespective of sex, sexual orientation, marital status, age, disability,
race, colour, religion, ethnic or national origin and places an obligation upon all staff to respect and act in accordance
with this policy. The open management style ensures that everyone is given opportunities to progress.
The Composition of the Board
Details of all the Directors are set out below:
William McIlroy Executive Chairman and Chief Executive
Bernard Johnson Managing Director
Nicholas O’Shea Group Company Secretary and Non-executive Director
William Glencross Non-executive Director
Philippa Clark Deputy Managing Director
Martin Stevens Deputy Managing Director
Paul Forster Non-executive Director
Creightons Plc Annual Report 2023
31
Corporate governance statement (continued)
Board diversity
Creightons Plc has not complied with the requirements of LR 9.8.6R(9) as the targets set by the Listing Rules as at 31
March 2023 have not been met as follows:
• At least 40% of the Board are women;
• At least one of the senior Board positions is a woman;
• At least one member of the Board is from a minority ethnic background.
In acknowledging the need for increased diversity, it is important to consider the context that the Board is long-standing
and has not had recent opportunities for appointments. The Board has been established for a significant period and
naturally lacks diversity due to historical circumstances and limited turnover. However, this represents a unique
opportunity for proactive action to make meaningful appointments that promote diversity and inclusivity.
By recognising the need for greater diversity, we can actively seek out and welcome qualified individuals from a broader
range of backgrounds, experiences, and perspectives through fair and transparent selection processes. Embracing
diversity fosters creativity, innovation, and a richer decision-making process, ultimately benefiting the entire group and
ensuring a more inclusive and equitable future. Whist it may require time, this commitment to change will contribute to
the Boards long term success and enable it to better reflect the diverse world in which we operate.
Details of the Board gender diversity are set out below:
No. of
Board
members
% of the
Board
No. of senior
positions on
the Board
No. in
executive
management
% of
executive
management
Men
6
86%
6
3
75%
Women
1
14%
1
1
25%
Other categories
-
-
-
-
-
Not specified/prefer not
to say
-
-
-
-
-
Details of the Board gender diversity are set out below:
No. of
Board
members
% of the
Board
No. of senior
positions on
the Board
No. in
executive
management
% of
executive
management
White British or other
White (Including
minority-white groups)
7
100%
7
4
100%
Mixed/multiple ethnic
groups
-
-
-
-
-
Asian/Asian British
-
-
-
-
-
Black/African
Caribbean/Black British
-
-
-
-
-
Other ethnic group,
including Arab
-
-
-
-
-
Not specified / prefer
not to say
-
-
-
-
-
The Role of the Board
The Board’s principal task is to set the Group’s strategy, which is devised to deliver optimum value for shareholders.
Other matters reserved for decision by the full Board include approval of the annual report, authorisation of all
acquisitions and disposals, sanction of all major capital expenditure, the raising of equity or debt finance and investor
relations.
The Board has considered that the Group was too small for the distinction between Chairman and Chief Executive to be
practical.
The Board recognises the lack of independent Directors, however the existing Non-executive Directors provide extensive
industry, market and business knowledge which benefits the strategic decisions of the Group. The Board considers this
expertise is considered more beneficial than the cost of appointing independent Directors. Consequently, it feels that it
remains appropriate for the existing Non-executive Directors to be nominated for re-election when their terms expire
under the Company’s articles.
Both William McIlroy and Bernard Johnson continued with their roles with their service companies and Mr McIlroy has
continued with his role with Oratorio Developments Ltd during the year. There has been no change in these commitments
over the past year.
Creightons Plc Annual Report 2023
32
Corporate governance statement (continued)
The Board reviews the risks that arise and continually reviews any emerging and ongoing risks and the outcomes are
noted in the Strategic Report on pages 10 to 12. This includes the management of the risk from cost increases due to
global supply chain pressures and the corresponding mitigation measures. A senior management team hold regular
ongoing meetings to measure the extent of the cost price increase and to determine the appropriate commercial and
operational response.
The Directors have met as a full Board on 9 occasions during the year, including meetings by telephone. The attendance
at meetings held during the year to 31 March 2023 for each of the Directors is as follows:
Director
Board
meetings
Remuneration
Committee
Audit
Committee
William McIlroy
8
-
-
Bernard Johnson
9
-
-
Nicholas O’Shea
7
1
7
William Glencross
8
1
7
Philippa Clark
9
-
-
Martin Stevens
9
-
-
Paul Forster
8
1
7
Procedures are in place to enable the Directors to take appropriate independent professional advice at the Company’s
expense if that is necessary for the furtherance of their duties. All Directors have access to the advice and services of
the Company Secretary.
Board Committees
Under the formal terms of reference of the Board Committees, the Board has delegated specific responsibilities to the
Nomination, Remuneration and Audit Committees. The Board considers that all the members of each Committee have
the appropriate experience and none of them has interests which conflict with their positions on the Committees.
Nomination Committee
The Board as a whole undertakes the duties of the Nomination Committee. The Committee is responsible for proposing
candidates for the Board having regard to the balance and structure of the Board.
The Group has an Equal Opportunities and Diversity policy which aims to ensure that all employees are treated equally,
irrespective of sex, sexual orientation, marital status, age, disability, race, colour, religion, ethnic or national origin and
places an obligation upon all staff to respect and act in accordance with this policy. This policy is applied to the Company’s
administrative, management and supervisory bodies and the remuneration, audit and nomination committees of those
bodies.
Remuneration Committee
The Remuneration Committee consisted of William Glencross, acting as chair, Nicholas O’Shea and Paul Forster. In
determining policy for the Executive Directors, the committee has given due consideration to the Code. The remuneration
packages are designed to attract, retain and motivate Executive Directors of the required calibre. The Committee reviews
the appropriateness of all aspects of Directors’ pay and benefits by taking into account the remuneration packages of
similar businesses.
Directors’ remuneration
The Executive Directors are salaried in their capacity as Directors. Their management and operational services may be
provided via service companies on a basic fee basis. Additional fees are contingent on the levels of pre-tax profits.
In addition, the Directors participate in a share option scheme. The Board believes that in accordance with the best
practice provisions, this approach aligns the interests of shareholders and Directors.
Full details of Directors’ remuneration, shareholdings and share options are noted in the Directors’ Remuneration Report
on pages 34 to 43.
Internal control
The Directors are responsible for the Group’s systems of internal control and for reviewing its effectiveness whilst the
role of management is to implement Board policies on risk management and control. The Group’s system of internal
control is designed to manage rather than eliminate risk of failure to achieve the Group’s business objectives and can
only provide reasonable and not absolute assurance against material misstatement or loss.
The Board has established a process for managing the significant risks faced by the Group. This ongoing process is
reviewed regularly by the Board and accords with the internal control guidance issued by the FRC.
Creightons Plc Annual Report 2023
33
Corporate governance statement (continued)
The key procedures designed to provide effective internal controls are:
• A clearly defined organisational structure with the appropriate delegation of authority to operational
management.
• A comprehensive planning and budgeting process, which requires the Chairman’s and Managing Director’s
approval.
• Management information systems to monitor financial and other operating statistics.
• Aspects of internal control are regularly reviewed and where circumstances dictate, new procedures are
instigated.
The Group does not have an internal audit function. However, the Board periodically reviews the need for such a
function. The current conclusion is that this is not necessary given the scale and complexity of the Group’s activities.
The Board has reviewed and is satisfied with the effectiveness of the internal controls in operation and this process will
continue.
Audit Committee
The Audit Committee consisted of Nicholas O’Shea (ACMA CGMA), acting as chair, William Glencross and Paul Forster
(FCA). Its role is to:
• Monitor the integrity of the financial statements of the Group and any formal announcements relating to the
Group’s financial performance and review significant financial reporting judgements contained therein;
• Review the Group’s internal financial controls and the Group’s internal control and risk management systems;
• Review whether it is appropriate to introduce an internal audit function;
• Make recommendations to the Board for a resolution to be put to the shareholders for their approval in general
meetings on the appointment of the external auditor and the approval of the remuneration and terms of
engagement of the external auditor;
• Review and monitor the external auditor’s independence and objectivity and the effectiveness of the audit
process, taking into consideration relevant UK professional and regulatory requirements;
• Develop and implement policy on the engagement of the external auditor to supply non-audit services, taking
into account relevant guidance regarding provision of non-audit services by the external audit firm;
• Advise the Board on whether the annual report is fair, balanced and understandable and provides information
necessary for the users to assess the Group’s position and performance, business model and strategy;
• Report to the Board on how it has discharged its responsibility.
The Board reviews the work of the Audit Committee annually to ensure it meets the requirements of its role.
The Audit Committee pays particular attention to matters it considers to be important by virtue of their size, complexity,
level of judgement and potential impact on the financial statements and wider business model. During the year, the
committee undertook a comprehensive review of the Company’s compliance with various regulations including those
covering Market Abuse, with which they are satisfied that the Company is compliant in all materials aspects. The
committee also reviews the management accounts and internal management reports on a regular basis.
During the year, the Audit Committee met to review the outcome from the 2022 audit and the plan for the 2023 audit.
Creightons Plc Annual Report 2023
34
Directors’ remuneration report
Relations with shareholders
The objective of the Board is to create increased shareholder value by growing the business in a way that delivers
sustainable improvements in earnings over the medium to long term.
The Board considers the Annual General Meeting as an important opportunity to communicate with private investors in
particular. Directors make themselves available to shareholders at the Annual General Meeting, at the presentation of
full-year and interim results and on an ad hoc basis, subject to normal disclosure rules.
This report is on the activities of the Remuneration Committee for the year to 31 March 2023. It sets out the remuneration
policy and remuneration details for the Executive and Non-executive Directors of the Company. It has been prepared in
accordance with Schedule 8 of The Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations
2008 (the “Regulations”) as amended in June 2019.
The report is split into three main areas:
• Statement by the chair of the Remuneration Committee;
• Annual report on Directors’ remuneration (subject to audit); and
• Policy report.
The policy report was subject to a binding shareholder resolution at the 2022 Annual General Meeting and the policy
took effect for the financial year beginning on 1 April 2022. The annual report on Directors’ remuneration provides details
on remuneration in the period and some other information required by the Regulations. It will be subject to an advisory
shareholder vote at the 2023 Annual General Meeting.
The Companies Act 2006 requires the auditor to report to the shareholders on certain parts of the Directors’ remuneration
report and to state whether, in their opinion, those parts of the report have been properly prepared in accordance with
the Regulations. The parts of the annual remuneration report that are subject to audit are indicated in that report. The
statement by the chair of the Remuneration Committee and the policy report are not subject to audit.
Statement by the chair of the Remuneration Committee
The Directors’ remuneration report has been prepared on behalf of the Board by the Remuneration Committee. The
current members of the Remuneration Committee are William Glencross, who is the Chairman of the Committee, Nicholas
O’Shea who is a Non-executive Director, and acts as secretary to the committee and Paul Forster.
The Remuneration Committee determines the remuneration of each Executive Director. During the year ended 31 March
2023, the Remuneration Committee agreed changes to the salaries of the Executive Directors in line with other
employees, which became effective on 01 April 2022.
It is envisaged that the other remuneration components for Executive Directors for the year ended 31 March 2024 will
be similar to those in place for the year ended 31 March 2023.
Creightons Plc Annual Report 2023
35
Directors’ remuneration report (continued)
2023
2022
Director
Number of options
Exercise Price
Number of options
Exercise Price
WO McIlroy
-
-
225,000
97.73p
BJM Johnson
-
-
225,000
97.73p
Creightons Plc Annual Report 2023
36
Directors’ remuneration report (continued)
Creightons Plc Annual Report 2023
37
Directors’ remuneration report (continued)
Directors' shareholdings
The Directors who held office at 31 March 2023 had the following beneficial interests in the 1p ordinary shares of the
Company:
At 31 March 2023
Shares
Share Options
Director
Number of
shares
Exercise
period of
2017 -
2024
Exercise
period of
2019 -
2025
Exercise
period of
2021 -
2028
Exercise
period of
2023 -
2030
Exercise
period of
2024 -2031
Total
Options
held
price 5.50p
price
4.50p
price
26.80p
price
36.00p
price
97.73p
Vested
Vested
Vested
Not vested
Not vested
Mr W O McIlroy
16,219,275
1,300,000
-
900,000
-
225,000
2,425,000
Mr B JM Johnson
5,245,844
-
-
700,000
-
225,000
925,000
Mr N DJ O’Shea
115,000
-
-
135,000
-
-
135,000
Mr W T Glencross
86,000
-
-
131,500
-
-
131,500
Ms P Clark
851,818
-
-
500,000
200,000
-
700,000
Mr M Stevens
993,758
-
-
218,060
100,000
-
318,060
Mr P Forster
1,032,318
-
-
300,000
100,000
-
400,000
There are no performance measures attributable to the share options. There are no requirements for a Director to own
shares.
Mr Forster disposed of 46,000 shares on 12 April 2022. There have been no other sales of ordinary shares during the
period between 31 March 2022 and 30 June 2023.
At 1 April 2022
Shares
Share Options
Director
Number
of shares
Exercise
period of
2017 -2024
Exercise
period of
2019 -
2025
Exercise
period of
2021 -
2028
Exercise
period of
2023 -
2030
Exercise
period of
2024 -2031
Total
Options
held
price 5.50p
price 4.50p
price
26.80p
price
36.00p
price
97.73p
Vested
Vested
Vested
Not vested
Not vested
Mr W O McIlroy
16,219,275
1,300,000
-
900,000
-
225,000
2,425,000
Mr B JM Johnson
5,245,844
-
-
700,000
-
225,000
925,000
Mr N DJ O’Shea
115,000
-
-
135,000
-
-
135,000
Mr W T Glencross
86,000
-
-
131,500
-
-
131,500
Ms P Clark
851,818
-
-
500,000
200,000
-
700,000
Mr M Stevens
993,758
-
-
218,060
100,000
-
318,060
Mr P Forster
1,078,318
-
-
300,000
100,000
-
400,000
All of the above options relate to ordinary shares in Creightons plc. The market prices of these shares are included in
the table below.
Market price
At 31 March 2023
Lowest during period
Highest during period
29.0p
25.4p
64.0p
Mr McIlroy’s holding noted above includes 14,450,000 (2022: 14,450,000) shares held in the name of Oratorio
Developments Ltd, a private Company of which Mr McIlroy is a Director and controlling shareholder.
Creightons Plc Annual Report 2023
38
Directors’ remuneration report (continued)
The information provided in this part of the Annual Report on remuneration is not subject to audit
Performance graph and CEO remuneration table
The following graph shows the Group’s performance, measured by total shareholder return, compared with the FTSE
All-Share index, which the Directors have always considered the most suitable comparator given the small number of
quoted companies of a similar size in the Company’s sector; and the typical portfolio style of management for most
investors, meaning that investments in the Company would be compared against investment portfolios based on FTSE
All-Share index performance.
Table of Historical Data
The table below sets out the remuneration of the highest paid Director.
Year
Single figure of
total remuneration
Annual bonus pay-out
against maximum %
Share option scheme exercised
against maximum %
£000’s
2023
137
100%
n/a
2022
163
40% after waiver
22%
2021
291
100%
n/a
2020
291
100%
100%
2019
301
100%
0%
2018
177
100%
n/a
2017
170
100%
n/a
2016
156
100%
n/a
2015
47
100%
n/a
2014
29
100%
100%
2013
20
100%
n/a
2012
16
100%
n/a
Creightons Plc Annual Report 2023
39
Directors’ remuneration report (continued)
Percentage change in remuneration of the Directors and employees
The table below shows the percentage increase in remuneration of the Directors and the Group’s employees as a whole
between the years ended 31 March 2022 and 31 March 2023.
2023
2022
Salary
and fees
All taxable
benefits
Annual
bonus
Total
Salary and
fees
All taxable
benefits
Annual
bonus
Total
W McIlroy
0.0%
-
(36.6%)
(26.5%)
3.8%
-
(73.2%)
(66.3%)
B Johnson
0.0%
-
(36.6%)
(16.0%)
0.0%
-
(46.6%)
(27.6%)
P Clark
4.4%
-
(100%)
1.6%
4.6%
-
(91.9%)
(19.1%)
M Stevens
17.2%
-
(100%)
12.6%
3.1%
-
(87.0%)
(13.3%)
P Forster
(10.0%)
-
(100%)
(13.6%)
(71.4%)
(66.7%)
(95.7%)
(77.1%)
N O'Shea
0.0%
-
(100%)
(5.3%)
5.9%
-
-
11.8%
W Glencross
5.9%
-
(100%)
0%
(10.5%)
-
-
(5.3%)
Average
Employee
11.7%
-
(50.2%)
6.2%
6.7%
0.0%
14.3%
7.3%
2021
Salary and
fees
All taxable
benefits
Annual
bonus
Total
W McIlroy
4.0%
-
33.2%
29.9%
B Johnson
0.0%
-
(33.2%)
(22.7%)
P Clark
18.5%
50.0%
362.5%
46.2%
M Stevens
11.6%
-
187.5%
24.3%
P Forster
(16.7%)
(62.5%)
228.6%
(3.0%)
N O'Shea
(22.7%)
-
-
(22.7%)
W Glencross
5.6%
-
-
5.6%
Average
Employee
6.5%
-
(1.8%)
5.8%
Pay ratios
The table below sets out the ratio of the highest paid Director to the median, 25
th
and 75
th
percentile full-time
equivalent remuneration of the Groups employees.
Year
Method
25
th
percentile pay
ratio
Median pay ratio
75
th
percentile ratio
2023
Option B
6:1
5:1
4:1
2022
Option B
8:1
7:1
6:1
2021
Option B
14:1
14:1
12:1
2020
Option B
15:1
13:1
11:1
The pay ratio has reduced slightly from previous years due to the reduction in the profit related bonus of the Directors.
Option B under the reporting requirements has been chosen to identify the employees at the median, 25
th
and 75
th
percentiles as it provides the most effective method to identify the reference employees for calculation purposes. The
reference employees pay has been calculated from their annual salary, bonuses and pension at the close of the
financial year.
In line with the regulations, the following table sets out the total pay and benefits, and the salary element for the
highest paid Director and employees at each percentile.
Base salary
Total pay and benefits
£000’s
£000’s
Highest paid Director
92
137
75
th
percentile employee
30
31
50
th
percentile employee
24
26
25
th
percentile employee
21
22
Relative importance of spend on pay
The table below shows the total expenditure of the Group for all employees compared to retained profits and distributions
to shareholders for the years ended 31 March 2023 and 31 March 2022 and the year on year change.
Creightons Plc Annual Report 2023
40
Directors’ remuneration report (Continued)
Year ended 31
March 2023
Year ended 31
March 2022
Change
£000’s
£000’s
%
Employee costs
14,716
15,489
(5.0%)
Profit after tax for the year
514
3,110
(83.5%)
Dividends paid
-
428
(100%)
Voting at general meeting
The Group is committed to ongoing shareholder dialogue and takes an active interest in voting outcomes. Where there
are substantial votes against resolutions in relation to Directors’ remuneration, the reasons for any such vote will be
sought, and any actions in response will be detailed here.
The following table sets out actual voting in respect of the approval of the Directors’ Remuneration report and policy in
respect of the year ended 31 March 2022,
Resolution
Number of
votes cast
for
% of
votes
cast for
Number of
votes cast
against
% of
votes cast
against
Total votes
cast
Number
of votes
cast
withheld
Directors’ Remuneration Report
24,819,447
99.13%
210,590
0.84%
25,036,804
6,767
Directors’ Remuneration Policy
24,817,269
99.12%
212,768
0.85%
25,036,804
6,767
Policy report
Remuneration Committee
The Board has established a Remuneration Committee to determine the remuneration of Directors of the Company.
Consideration by the Directors of matters relating to Directors’ remuneration
The members of the Committee were Nicholas O’Shea, William Glencross and Paul Forster. In determining the Directors’
remuneration, the Committee consulted the Chairman. There has been one meeting of the Committee during the period,
attended by Mr Glencross, Mr O’Shea and Mr Forster. The committee has considered market rates and increases awarded
to all employees in determining the base salary increases for the executive Directors. The Committee has not sought
advice from any consultants during the period.
Statement of consideration of employee employment conditions elsewhere in the Company
When determining the remuneration of Executive Directors, the Committee considers the pay of employees across the
Group. When conducting salary reviews, the average base salary increase awarded to the UK workforce and senior
managers across the Group provides a key reference point when determining levels of increase for Executive Director
remuneration.
Illustrations of application of the Remuneration Policy
Under the Remuneration Policy a significant portion of the remuneration is variable for Mr McIlroy and Mr Johnson. The
variable element of the remuneration is directly linked to the profit of the Group as detailed in the policy below. The
remuneration for Ms Clark and Mr Stevens is reviewed in line with all other employees of the Group and also contains
a variable element which is payable only if the Group hits the profit target for the period.
The charts below indicate the level of remuneration that could be received by each executive Director in accordance
with the Directors’ Remuneration Policy at different levels of performance.
Creightons Plc Annual Report 2023
41
Directors’ remuneration report (Continued)
Policy report (continued)
Note: The bonuses for Directors are uncapped and directly related to profits. The charts above illustrate the level of
remuneration based on the level of profit as at 31 March 2023 and an increase in profit of 50% from this level.
These bonuses are not impacted by an increase in the share price.
Statement of implementation of remuneration policy in the following financial year
There has been no change to the Directors’ remuneration policy during the year ended 31 March 2023.
Policy on Directors’ remuneration
The policy of the Company on executive remuneration including that for Executive Directors is to reward individual
performance and motivate and retain existing Executive Directors so as to promote the best interests of the Group and
enhance shareholder value. The remuneration packages for executives and Executive Directors include a basic annual
salary, performance related bonus and a share option programme. The remuneration packages for Non-executive
Directors include a salary or fee. The Committee has reviewed the policy for the year ahead and has concluded that the
key features of the remuneration policy remain appropriate.
In setting Executive Directors’ remuneration, the Committee is mindful of the pay and conditions enjoyed by other
employees. It considers revisions to their arrangements only when other employees’ pay and conditions are also
reviewed, and this is always done in the light of market conditions and overall Group performance. However, the
Committee does not automatically increase the pay and conditions for Directors in line with either inflation or at the
same rate that those for other employees may be increased.
Both Executive and Non-executive Directors may accept appointment as Directors of other companies and retain any
fees paid to them, although Directors are required to notify the Company of all such appointments and may not accept
appointments which would be incompatible with their role with the Group, such as with direct competitors or major
suppliers and customers.
Salary and benefits
Executive Directors’ salary and benefits packages are determined by the Committee on appointment or when
responsibilities or duties change substantially, and are reviewed annually in line with those of employees. The last review
was undertaken during 2022 and the Directors received pay increases and bonuses in line with other employees of the
Group. The Committee considers that improved performance should be recognised by achievement of performance
bonuses. Whilst no absolute maximum is prescribed, increases will take account of other salary increases across the
Group. However, in certain circumstances, including changing roles and responsibilities, market levels and individual and
group performance, the committee will have discretion to award larger increases.
Pensions
Pension contributions for Executive Directors are broadly in line with other employees. Contracts for Ms Clark and Mr
Stevens include contributions to an auto-enrolment pension and fixed defined contributions to Company pension
schemes. Pension contributions for the year ended 31 March 2023 were as follows; Ms Clark £6,000 and Mr Stevens
£9,000.
Creightons Plc Annual Report 2023
42
Directors’ remuneration report (Continued)
Policy report (continued)
Directors’ performance bonuses
Bonuses are used to reward contribution to the performance of the Group, aligned to shareholder interests. Whilst no
absolute maximum is prescribed the annual bonus is aligned to the performance of the group.
Both Mr McIlroy and Mr Johnson have contracts which provide for bonuses should the Group achieve profitability, and
Mr McIlroy’s also provides for a bonus should a complete or partial sale of the Group’s toiletries business be achieved.
The profit criterion was met in 2023, and as a consequence, provision for payment of the profit related performance
bonus has been made in the financial statements, and will be paid as required by the contracts within one month of the
approval and publication of these financial statements.
The contract for Mr McIlroy’s services as a Director provides for a bonus to be paid after the deduction of tax and National
Insurance by the Company to Oratorio Developments Ltd in respect of the Group’s net profits before tax at the rate of
12.5% in respect of net profits up to £50,000, 7.5% of net profits between £50,001 and £100,000, and 5% of net profits
in excess of £100,000. During the year, a bonus of £45,000 was payable for Mr McIlroy. During the previous year a
bonus of £177,000 was payable to Mr McIlroy. He chose to waive £106,000 (60%) of his bonus for the year ended 31
March 2022. 40% was waived to allow for employee bonuses and 20% was fully waived for the year ended 31 March
2022.
A further bonus of 10% of the net sale proceeds is also payable to Oratorio Developments Ltd if the Company sells the
whole of the toiletries business undertaken by the Company at 16 January 2002 for a price in excess of £1,500,000, or
if the Company sells a part of that toiletries business for a price in excess of £500,000 and the net book value of the
assets disposed of is less than one-third of the value of the net assets of the Company.
The contract for Mr Johnson’s services as a Managing Director provides for a performance bonus to be paid after the
deduction of tax and National Insurance by the Company to Carty Johnson Limited in respect of the Group’s net profits
before tax at the rate of 12.5% in respect of net profits up to £50,000, 7.5% of net profits between £50,001 and
£100,000, and 5% of net profits in excess of £100,000. During the year, a bonus of £45,000 was payable for Mr Johnson.
During the previous year, a bonus of £177,000 was payable to Mr Johnson. Mr Johnson waived £106,000 (60%) of his
bonus for the year ended 31 March 2022. 40% was waived to allow for employee bonuses and 20% was fully waived for
the year ended 31 March 2022.
The contracts for Ms Clark and Mr Stevens include a Group bonus scheme, where employees are entitled to a bonus of
7.5% of basic pay if the Group hits the profit target for the period and additional payments of up to 14% of earnings
(10% for other employees) in relation to key performance indicator targets which were partially achieved during the
year. No bonus was payable to either Ms Clark and Mr Stevens in respect of the year ended 31 March 2023 (2022: Ms
Clark £3,000 and Mr Stevens £3,000).
There are no performance conditions against share price for Directors. None of the Directors remuneration is paid or
payable in shares, therefore a 50% increase in share price would have a nil effect on remuneration.
Share option schemes
The policy of the Company is to grant share options to all employees including both Executive and Non-executive
Directors as a further incentive to align with the interests of shareholders. Options are granted periodically at the
discretion of the Board and on approval by the Remuneration Committee to Directors and certain key employees who
in the opinion of the Board are in a position to contribute to the long term growth of the business.
Options will normally be granted at market value on the date of grant with a vesting period of three years. However
the options may be granted at a discount to the market value upon approval by the Remuneration Committee.
Recruitment
On appointment or promotion, base salary levels will be set taking into account a range of factors including market
levels, experience, internal relativities and cost. If an individual is appointed on a base salary below the desired market
positioning, the Committee retains the discretion to re-align the base salary, contingent on individual performance,
which may result in a higher rate of annualised increase above ordinary levels.
Loss of office
Any loss of office payment will be approved by the Remuneration Committee. Any payment will be made at discretion
and on a case-by-case basis. Any payments made beyond contractual and statutory obligations would be exceptional
in nature either due to additional obligations taken on by the departing Director or due to specific circumstance and
always benchmarked against market practice.
Creightons Plc Annual Report 2023
43
Directors’ remuneration report (Continued)
Policy report (continued)
Service contracts
Name of Director
Date of service
contract
Date contract last
amended
Notice
period
WO McIlroy (chairman’s contract)
6 Feb 2003
1 Apr 2023
12 months
WO McIlroy (Director’s contract with employer)
16 Jan 2002
1 Apr 2023
12 months
BJM Johnson (Director’s contract)
16 Jan 2002
1 Apr 2023
12 months
BJM Johnson (manager’s contract with employer)
16 Jan 2002
1 Apr 2023
12 months
NDJ O’Shea (non-executive)
5 Jul 2001
1 Apr 2023
3 months
WT Glencross (non-executive)
31 Jul 2005
1 Apr 2023
3 months
P Clark (Deputy Managing Director)
9 Feb 2015
1 Apr 2023
3 months
M Stevens (Deputy Managing Director)
9 Feb 2015
1 Apr 2023
3 months
P Forster (non-executive from 1 April 2021)
1 Apr 2021
1 Apr 2023
3 months
All contracts were revised on 1 April 2023 to reflect current legislation and salaries.
It is the Company’s policy that service contracts for the Directors are for an indefinite period, terminable by either party
with a maximum period of notice of either 3 months or 12 months. Any payments in lieu of notice should not exceed the
Director’s salary or fees for the unexpired term of the notice period. Within that policy, information relating to individual
Directors is scheduled above.
The fees for Non-executive Directors are reviewed annually and determined in the light of market practice and with
reference to the time commitment and responsibilities associated with each Non-executive Director’s role and
responsibilities.
The Board as a whole considers the policy and structure for the Non-executive Directors’ fees on the recommendation
of the Chairman. The Non-executive Directors do not participate in discussions on their specific levels of remuneration.
Non-executive Directors are eligible for share options but may not participate in any personal performance bonus, and
are only eligible for statutory contributions to workplace pensions. The fees paid for Non-executive Directors consist of
a flat annual fee based on the involvement each is anticipated to be required to commit to the Group, together with the
Group-wide bonus relating to the Group’s overall performance that all employees are entitled to, and both the time
commitments and fee basis are reviewed annually. Any additional time commitments over these are paid on a pro rata
per diem basis. The fees paid for the Chairman and Non-executive Directors also include an element of profit-related
bonus based on the overall performance of the Group and for the Chairman of sales value related bonus for the disposal
of all or parts of the toiletries business.
Approval
In the opinion of the Remuneration Committee, the Company has complied with Section D of the Code, and in forming
the remuneration policy the Committee has given full consideration to that section of the Code.
The Directors’ Remuneration Report was approved by the Board of Directors on 06 July 2023 and signed on its behalf
by:
Mr Nicholas O’Shea
Remuneration Committee
Creightons Plc Annual Report 2023
44
Directors’ responsibilities statement
The Directors whose names and functions are set out on page 101 of this document are responsible for preparing the
Annual Report and the Financial Statements in accordance with applicable law and regulation.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors
have prepared the Group financial statements in accordance with UK-adopted international accounting standards and
parent Company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United
Kingdom Accounting Standards, comprising FRS 101 ‘Reduced Disclosure Framework’, 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 Company and the Group 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;
• state whether UK-adopted international accounting standards have been followed for the group financial
statements and United Kingdom Accounting Standards, comprising FRS 101, have been followed for the
Company financial statements, subject to any material departures disclosed and explained in the financial
statements;
• make judgements and accounting estimates that are reasonable and prudent; and
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the
Company will continue in business.
The Directors are responsible for safeguarding the assets of the Group and parent Company and hence for taking
reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group
and parent Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Group
and parent Company and enable them to ensure that the financial statements and the Directors’ Remuneration Report
comply with the Companies Act 2006.
The Directors are responsible for the maintenance and integrity of the parent Company’s website. Legislation in the
United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other
jurisdictions.
Directors’ confirmations
The Directors consider that the Annual Report and accounts, taken as a whole, is fair, balanced and understandable and
provides the information necessary for shareholders to assess the group and parent Company’s position and
performance, business model and strategy. Each of the Directors, whose names and functions are listed in Directors and
Advisers on page 101 confirm that to the best of their knowledge:
1. the parent Company financial statements, which have been prepared in accordance with United Kingdom
Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 101 ‘Reduced
Disclosure Framework’, and applicable law), give a true and fair view of the assets, liabilities, financial position
and profit of the Company; and
2. the group financial statements, which have been prepared in accordance with UK-adopted international
accounting standards, give a true and fair view of the assets, liabilities, financial position and profit of the group;
and
3. the strategic report includes a fair review of the development and performance of the business and the position
of the Company and the undertakings included in the consolidation taken as a whole, together with the
description of the principal risks and uncertainties that they face; and
4. the report and financial statements, taken as a whole, are fair, balanced and understandable and provide the
information necessary for shareholders to assess the Group’s position and performance, business model and
strategy.
Creightons Plc Annual Report 2023
45
Independent auditor’s report to the members of Creightons Plc
Opinion
We have audited the financial statements of Creightons Plc (the ‘parent company’) and its subsidiaries (the ‘group’) for
the year ended 31 March 2023 which comprise the Consolidated income statement, the Consolidated statement of
comprehensive income, the Company statement of comprehensive income, the Consolidated balance sheet, the
Company balance sheet, the Consolidated statement of changes in equity, the Company statement of changes in equity,
the Consolidated cash flow statement, the Company cash flow statement, and notes to the financial statements, including
a summary of significant accounting policies.
The financial reporting framework that has been applied in their preparation of the group financial statements is
applicable law and UK-adopted international accounting standards. The financial reporting framework that has been
applied in the preparation of the Parent Company financial statements is applicable law and United Kingdom Accounting
Standards, including FRS 101 “Reduced Disclosure Framework” (United Kingdom Generally Accepted Accounting
Practice), as applied in accordance with the provisions of the Companies Act 2006.
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 March 2023 and
of the group’s profit for the year then ended;
• have been properly prepared in accordance with UK-adopted international accounting standards;
• the parent company financial statements have been properly prepared in accordance with United Kingdom
Accounting Standards, including FRS 101 “Reduced Disclosure Framework” (United Kingdom Generally Accepted
Accounting Practice); and
• 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 the 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 public interest 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.
Creightons Plc Annual Report 2023
46
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting
in the preparation of the financial statements is appropriate.
Our audit procedures to evaluate the directors’ assessment of the group’s and the parent company's ability to continue
to adopt the going concern basis of accounting included but were not limited to:
• Undertaking an initial assessment at the planning stage of the audit to identify events or conditions that may cast
significant doubt on the group’s and the parent company’s ability to continue as a going concern;
• Making enquiries of the directors to understand the period of assessment considered by them, the assumptions
they considered and the implication of those when assessing the group’s and the parent company’s future financial
performance;
• Challenging the appropriateness of the directors’ key assumptions in their cash flow forecasts, by reviewing
supporting and contradictory evidence in relation to these key assumptions and assessing the directors’
consideration of severe but plausible scenarios. This included assessing the viability of mitigating actions within
the directors’ control;
• Testing the accuracy and functionality of the model used to prepare the directors’ forecasts;
• Assessing the historical accuracy of forecasts prepared by the directors;
• Considering the consistency of the directors’ forecasts with other areas of the financial statements and our audit;
• Inspecting the terms of loan agreements and financing facilities for covenants, and assessing the extent to which
they are restrictive and have been accurately included in severe but plausible scenarios;
• Inspecting the changes in the terms and conditions of financing facilities and covenants, and any changes in the
terms that may impact conclusions in relation to material uncertainties; and
• Evaluating the appropriateness of the directors’ disclosures in the financial statements on going concern.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions
that, individually or collectively, may cast significant doubt on the group’s and the parent company’s ability to continue
as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant
sections of this report.
In relation to Creightons Plc’s reporting on how it has applied the UK Corporate Governance Code, we have nothing
material to add or draw attention to in relation to the directors’ statement in the financial statements about whether the
director’s considered it appropriate to adopt the going concern basis of accounting.
Creightons Plc Annual Report 2023
47
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) we identified, including those which had the greatest effect on: the overall audit strategy;
the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed
in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
We summarise below the key audit matters in forming our opinion above, together with an overview of the principal
audit procedures performed to address each matter and our key observations arising from those procedures.
These matters, together with our findings, were communicated to those charged with governance through our Audit
Completion Report.
Key Audit Matter
How our scope addressed this matter
Revenue recognition
The Group’s accounting policy for revenue
recognition is set out in the accounting policy notes
on pages 66-67.
Revenue is material for the Group and represents
the largest figure in the Consolidated statement of
comprehensive income. An error in this balance
could significantly affect a user’s interpretation of
the financial statements.
For the Group, we identify the risk around revenue
recognition as being in relation to cut off, due to the
potential to inappropriately shift the timing and
basis of revenue recognition.
Due to revenue being a key benchmark in a user’s
assessment of the performance of the Group, we
consider revenue recognition to be a key audit
matter.
For PMI trading revenue:
We addressed this risk by performing the following:
• reviewing the design and implementation of the
controls in place surrounding revenue
recognition, in particular in relation to cut off;
• obtaining and reviewing the revenue recognition
policy to ensure they comply with the
requirements of IFRS 15;
• we have reviewed adjustments to revenue to
ensure these are in accordance with IFRS 15;
and
• sample testing over sales incurred in the week
either side of the year end for both UK and
overseas sales within the UK trading subsidiary
– agreeing ledger details back to the applicable
customer order and trading terms, sales invoice
and signed proof of delivery for UK customers,
and signed customer collection notice for
overseas customers, to ensure revenue was
recognised in the same period in which control
of the goods was transferred to the customer in
line with the Group’s stated policy.
Our observations:
Based on the results of our procedures performed,
we consider revenue recognition is appropriate, and
in line with the Group accounting policy described
on pages 66-67.
Inventory provision – valuation
There is a risk that inventory is overstated due to
management’s judgement on potentially obsolete,
damaged and slow-moving items in determining the
net realisable value. The value of the provision as
at 31 March 2023 is £1,014k (31 March 2022:
£1,261k). Refer to page 72 (note 3 Critical
accounting judgements and sources of estimation
uncertainty) and note 18 (Inventories) for financial
disclosures.
Due to the inventory being a material balance in
the Group, and the judgement used in calculating
the inventory provision, we consider this to be a
key audit matter.
We addressed this risk by performing the following:
• Obtaining, reviewing and challenging the
inventory provision policy implemented by the
Group, and performing a sample test to ensure
compliance with the policy;
• valuation testing with NRV recalculation,
comparing purchase cost to sales proceeds in
the subsequent period in order to obtain
assurance that inventories are being held at the
lower of cost and net realisable value;
• during our attendance of stock takes, we
documented our review of any obsolete, slow
moving or damaged inventory items, as well as
the condition of the warehouse, with no such
items or issues noted;
• we obtained an understanding of, and
challenged the assumptions used, in
Creightons Plc Annual Report 2023
48
management’s processes with regards to the
calculation of the year end inventory provision;
• we re-performed the calculation of the inventory
write-off provision and confirmed its accuracy
and mathematical logic;
• we obtained and reviewed the underlying
historical data used in the provision calculation
and confirmed that this was accurate and
correctly applied; and
• we performed a stand-back review considering
relevant internal and external factors in our
assessment of the appropriateness of the
methodology and valuation of the inventory
provision.
Our observations:
We considered management’s judgement on the
level of provisioning to be reasonable and in line
with the Group accounting policy as described on
page 72.
Brand Valuation and goodwill valuation
Emma Hardie:
Brand Value: £5.1m
Goodwill-Deferred tax: £1.3m
Brodie & Stone
Brand Value: £4.9m
Goodwill-Deferred tax: £1.2m
The group’s accounting policy for goodwill and
impairment is set out in the accounting policies noted
to the financial statements.
Non-amortising intangibles are subject to annual
impairment review, to assess whether the value in
use (VIU) is in excess or equal to the carrying value
of assets, or whether any impairment is required.
Significant assumptions are made in the VIU model,
as an individual cash generating unit (CGU),
prepared by management for the basis of their
assessment. There is inherent uncertainty involved
in forecasting and discounting future cash flows.
There may be significantly different outcomes of the
assessment if different assumptions were applied in
the model, therefore greater level of management
judgement is involved in determining the
appropriateness of assumptions. This is considered
to be a significant risk given the material value of
non-amortising intangibles in the group financial
statements.
Due to the brand and goodwill value being a material
balance in the Group, and the judgement used
impairment calculation, we consider this to be a Key
Audit Matter.
Our audit procedures included, but were not limited
to:
• We engaged our internal impairment team
as auditor’s specialist to review
management’s impairment review in line
with IAS 36;
• We confirmed the relevant knowledge and
sector experience of our internal specialist
team;
• We assessed the appropriateness of the
main assumption inputs used by
management in their cash flow model
being the discount rate, the year-on-year
growth rates, and terminal growth rates,
including comparison to economic and
industry forecasts to ensure assumptions
used are reasonable;
• We reviewed and challenged
management’s impairment model to
assess the impairment of the Emma Hardie
and Brodie & Stone CGUs ;
• We reviewed the impairment model,
looking for any disconfirming evidence in
post year end data and market
information;
• We performed sensitivity analysis on the
key assumptions and cash flows used
within the impairment model to assess the
break-even scenario that would trigger an
impairment;
• We re-performed management’s
impairment model to confirm its
mathematical accuracy;
• We provided an assessment on the
appropriateness of management’s
methodology applied in the impairment
model against the requirements of the
relevant standard (i.e. IAS 36);
• We reviewed the historical accuracy of
forecasting to actual results;
• We reviewed the forecast information
included in the impairment calculation, and
Creightons Plc Annual Report 2023
49
whether this is consistent with that
provided in other areas of the audit;
• We performed a stand back review
considering relevant internal and external
factors including disconfirming information
in our assessment of the appropriateness
of the methodology and asset valuation;
• We engaged with our valuation team to
perform a review of the inputs in the
Weight Average Cost of Capital (WACC)
calculation; and
• We obtained and challenged
management’s reassessment of the
purchase price allocation.
Our observations
Based on the results of our procedures performed,
we consider management’s impairment review as
appropriate, and in line with the Group accounting
policy described on page 72.
Our application of materiality and an overview of the scope of our audit
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for
materiality. These, together with qualitative considerations, helped us to determine the scope of our audit and the
nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures and in
evaluating the effect of misstatements, both individually and on the financial statements as a whole. Based on our
professional judgement, we determined materiality for the financial statements as a whole as follows:
Creightons Plc Annual Report 2023
50
Group materiality
Overall materiality
£351k
How we determined it
0.6% of Revenue
Rationale for benchmark applied
Revenue was used as the benchmark for materiality in the
current year as lower profits were made due to inflationary
pressures on the group, however revenue has remained
consistent year on year and therefore the revenue benchmark
was selected to reflect this.
Performance materiality
Performance materiality is set to reduce to an appropriately low
level the probability that the aggregate of uncorrected and
undetected misstatements in the financial statements exceeds
materiality for the financial statements as a whole.
We set performance materiality at £246k, which represents 70%
of overall materiality.
Reporting threshold
We agreed with the directors that we would report to them
misstatements identified during our audit above £11k as well as
misstatements below that amount that, in our view, warranted
reporting for qualitative reasons.
Parent company materiality
Overall materiality
£188k
How we determined it
Materiality has been determined with reference to a benchmark
of total equity, of which it represents 3%.
Rationale for benchmark applied
We used total equity to calculate our materiality as, in our
review, this is the most relevant measure of the underlying
financial position of the parent Company for this year end as a
holding company.
Performance materiality
Performance materiality is set to reduce to an appropriately low
level the probability that the aggregate of uncorrected and
undetected misstatements in the financial statements exceeds
materiality for the financial statements as a whole.
On the basis of our risk assessments, together with our
assessment of the Group’s overall control environment, our
judgement was that performance materiality should be set at
approximately 70% of our financial statement materiality,
representing a value of £132k.
Reporting threshold
We agreed with the directors that we would report to them
misstatements identified during our audit above £5.6k as well
as misstatements below that amount that, in our view,
warranted reporting for qualitative reasons.
As part of designing our audit, we assessed the risk of material misstatement in the financial statements, whether due
to fraud or error, and then designed and performed audit procedures responsive to those risks. In particular, we looked
at where the directors made subjective judgements, such as assumptions on significant accounting estimates.
We tailored the scope of our audit to ensure that we performed sufficient work to be able to give an opinion on the
financial statements as a whole. We used the outputs of our risk assessment, our understanding of the group and the
parent company, their environment, controls, and critical business processes, to consider qualitative factors to ensure
that we obtained sufficient coverage across all financial statement line items.
Our Group audit scope included an audit of the group and parent company financial statements of Creightons plc. Based
on our risk assessment, Creightons plc and Potter & Moore Innovations Limited within the group were subject to full
scope audit, which was performed by the group audit team. The group audit team obtained external bank confirmations
Creightons Plc Annual Report 2023
51
for all bank accounts held within the group regardless if the entity was subject to a full scope audit to gain necessary
assurance over the consolidated cash position as at the 31 March 2023. Stock held in Potter and Moore PTY and Emma
Hardie Limited represented a material figure to the consolidation. For Potter and Moore PTY we engaged component
auditors to attend a physical stock take. All stock held in Emma Hardie was in external locations and therefore the group
audit team received external confirmation of the balances and the controls around the stock held at Emma Hardie. We
then audited the reconciliation from the external stock listing to the internal stock listing.
At the parent company level, the group audit team also tested the consolidation process and carried out analytical
procedures to confirm our conclusion that there were no significant risks of material misstatement of the aggregated
financial information.
Other information
The other information comprises the information included in the annual report other than the financial statements and
our auditor’s report thereon. The directors are responsible for the other information. Our opinion on the financial
statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we
do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained in the course of 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.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, the part of the directors’ remuneration report to be audited has been properly prepared in accordance
with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the strategic report and the directors’ report for the financial year for which the financial
statements are prepared is consistent with the financial statements and those reports have been prepared in
accordance with applicable legal requirements;
• the information about internal control and risk management systems in relation to financial reporting processes
and about share capital structures, given in compliance with rules 7.2.5 and 7.2.6 in the Disclosure Guidance and
Transparency Rules sourcebook made by the Financial Conduct Authority (the FCA Rules), is consistent with the
financial statements and has been prepared in accordance with applicable legal requirements; and
• information about the parent company’s corporate governance code and practices and about its administrative,
management and supervisory bodies and their committees complies with rules 7.2.2, 7.2.3 and 7.2.7 of the FCA
Rules.
Matters on which we are required to report by exception
In 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; or
• information about internal control and risk management systems in relation to financial reporting processes and
about share capital structures, given in compliance with rules 7.2.5 and 7.2.6 of the FCA Rules.
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 and the part of the directors’ remuneration report to be audited are not
in agreement with the accounting records and returns; or
Creightons Plc Annual Report 2023
52
• 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; or
• a corporate governance statement has not been prepared by the parent company.
Corporate governance statement
The Listing Rules require us to review the directors' statement in relation to going concern, longer-term viability and
that part of the Corporate Governance Statement relating to Creightons Plc's compliance with the provisions of the UK
Corporate Governance Statement specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the
Corporate Governance Statement is materially consistent with the financial statements or our knowledge obtained during
the audit:
• Directors' statement with regards the appropriateness of adopting the going concern basis of accounting and any
material uncertainties identified, set out on page 23;
• Directors’ explanation as to its assessment of the entity’s prospects, the period this assessment covers and why
they period is appropriate, set out on page 29;
• Directors' statement on fair, balanced and understandable, set out on page 24;
• Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks, set out on
page 10-12;
• The section of the annual report that describes the review of effectiveness of risk management and internal control
systems, set out on page 33; and;
• The section describing the work of the audit committee, set out on page 33.
Responsibilities of Directors
As explained more fully in the directors’ responsibilities statement set out on page 44, 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.
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
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.
Based on our understanding of the group and the parent company and their industry, we considered that non-compliance
with the following laws and regulations might have a material effect on the financial statements: the Bribery Act 2010,
General Data Protection Regulation (GDPR), EU Cosmetics Regulation EC 1223:2009 & UK Cosmetic Products
Enforcement Regulations 2013 and Taskforce on Climate-related Financial Disclosures (TCFD).
To help us identify instances of non-compliance with these laws and regulations, and in identifying and assessing the
risks of material misstatement in respect to non-compliance, our procedures included, but were not limited to:
Creightons Plc Annual Report 2023
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• Gaining an understanding of the legal and regulatory framework applicable to the group and the parent company,
the industry in which they operate, and the structure of the group, and considering the risk of acts by the group
and the parent company which were contrary to the applicable laws and regulations, including fraud;
• Inquiring of the directors, management and, where appropriate, those charged with governance, as to whether the
group and the parent company is in compliance with laws and regulations, and discussing their policies and
procedures regarding compliance with laws and regulations;
• Inspecting correspondence with relevant licensing or regulatory authorities;
• Reviewing minutes of directors’ meetings in the year; and
• Discussing amongst the engagement team the laws and regulations listed above, and remaining alert to any
indications of non-compliance.
We also considered those laws and regulations that have a direct effect on the preparation of the financial statements,
such as UK tax legislation, UK-adopted international accounting standards, FRS 101 “Reduced disclosure framework”,
Rules of the London Stock Exchange, and the Companies Act 2006.
In addition, we evaluated the directors’ and management’s incentives and opportunities for fraudulent manipulation of
the financial statements, including the risk of management override of controls, and determined that the principal risks
related to posting manual journal entries to manipulate financial performance, management bias through judgements
and assumptions in significant accounting estimates, revenue recognition on the cut-off assertion, and significant one-
off or unusual transactions.
Our procedures in relation to fraud included but were not limited to:
• Making enquiries of the directors and management on whether they had knowledge of any actual, suspected or
alleged fraud;
• Gaining an understanding of the internal controls established to mitigate risks related to fraud;
• Discussing amongst the engagement team the risks of fraud; and
• Addressing the risks of fraud through management override of controls by performing journal entry testing;
Our audit procedures in relation to fraud through revenue recognition specific to cut-off included, but were not limited
to:
• Assessing management’s revenue recognition policy; and
• Agreeing a sample of revenue transactions pre and post year end, to ensure they have been recognized in the
appropriate period and in line with the group accounting policy.
The primary responsibility for the prevention and detection of irregularities, including fraud, rests with both those
charged with governance and management. As with any audit, there remained a risk of non-detection of irregularities,
as these may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal controls.
The risks of material misstatement that had the greatest effect on our audit are discussed in the “Key audit matters”
section of this report.
A further description of our responsibilities is available on the Financial Reporting Council’s website at
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Creightons Plc Annual Report 2023
54
Other matters which we are required to address
Following the recommendation of the audit committee, we were appointed by the Board of Directors on 24 November
2020 to audit the financial statements for the year ending 31 March 2021 and subsequent financial periods. The period
of total uninterrupted engagement is 3 years, covering the years ending 31 March 2021 to date.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the group or the parent company
and we remain independent of the group and the parent company in conducting our audit.
Our audit opinion is consistent with our additional report to the audit committee.
Use of the audit report
This report is made solely to the company’s members as a body in accordance with Chapter 3 of Part 16 of the Companies
Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are
required to state to them in an auditor’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 company’s members as a body for our
audit work, for this report, or for the opinions we have formed.
Stephen Brown (Senior Statutory Auditor)
for and on behalf of Mazars LLP
Chartered Accountants and Statutory Auditor
The Pinnacle
160 Midsummer Boulevard
Milton Keynes
Buckinghamshire
MK9 1FF
Date
Stephen Brown (Jul 6, 2023 17:57 GMT+1)
Jul 6, 2023
Creightons Plc Annual Report 2023
55
Consolidated income statement
Year ended 31
March 2023
Year ended 31
March 2022
Note
£000
£000
Revenue
4,5
Cost of sales
(34,219 )
(35,001 )
Gross profit
Distribution costs
(3,902 )
(3,535 )
Administrative expenses
(18,862 )
(18,256 )
Exceptional items - Redundancy costs
7
(165 )
Operating profit
6
Exceptional items - Acquisition costs
8
(312 )
(602 )
Finance costs
9
(420 )
(308 )
Profit before tax
Taxation
10
(173 )
(345 )
Profit for the year from operations attributable to
the equity shareholders
Consolidated statement of comprehensive income
Year ended
31 March
2023
Year ended
31 March
2022
£000
£000
Profit for the year
Items that may be subsequently reclassified to profit and loss:
Exchange differences on translating foreign operations
(9 )
(7 )
Other comprehensive income for the year
(9 )
(7 )
Total comprehensive income for the year attributable to the equity
shareholders
Earnings per share
Year ended
31 March
Year ended
31 March
Note
2023
2022
Basic
12
Diluted
12
Creightons Plc Annual Report 2023
56
Consolidated balance sheet
31 March
31 March
2023
2022
Note
£000
£000
Non-current assets
Goodwill
13
Other intangible assets
14
Property, plant and equipment
15
Right-of-use assets
16
Current assets
Inventories
18
Trade and other receivables
19
Cash and cash equivalents
20
Total assets
Current liabilities
Trade and other payables
22
Corporation tax payable
22
Lease liabilities
23
Borrowings
24
Deferred and contingent consideration
8
Net current assets
Non-current liabilities
Deferred tax liability
31
Lease liabilities
23
Borrowings
24
Total liabilities
Net assets
Equity
Share capital
25
Share premium account
Merger reserve
Treasury shares
8
(576 )
Other reserves
(211 )
(211 )
Translation reserve
Retained earnings
Total equity attributable to the equity shareholders of
the parent Company
These financial statements were approved by the Board of Directors and authorised for issue on 06 July 2023. They
were signed on its behalf by:
Bernard Johnson
Managing Director
bernard johnson (Jul 6, 2023 17:54 GMT+1)
bernard johnson
Creightons Plc Annual Report 2023
57
Company balance sheet
31 March
31 March
31 March
2023
2022
2021
Restated
Restated
Note
£000
£000
£000
Non-current assets
Investment in subsidiaries
17
1,199
1,098
768
Investment property
15
3,310
3,521
3,731
4,509
4,619
4,499
Current assets
Trade and other receivables
19
4,256
4,476
1,872
Cash and cash equivalents
20
26
255
1
4,282
4,731
1,873
Total assets
8,791
9,350
6,372
Current liabilities
Trade and other payables
22
53
100
97
Borrowings
24
178
172
166
231
272
263
Net current assets
4,051
4,459
1,610
Non-current liabilities
Borrowings
24
2,289
2,471
2,646
2,289
2,471
2,646
Total liabilities
2,520
2,743
2,909
Net assets
6,271
6,607
3,463
Equity
Share capital
25
700
697
648
Share premium account
2,022
1,951
1,410
Merger reserve
2,476
2,476
-
Treasury shares
8
(576)
-
-
Capital redemption reserve
18
18
18
Other reserves
(236)
(236)
-
Retained earnings brought forward
1,802
1,289
938
Profit for the year
65
412
449
Total equity attributable to the equity
shareholders
6,271
6,607
3,463
These financial statements were approved by the Board of Directors and authorised for issue on 06 July 2023. They
were signed on its behalf by:
The Company’s profit for the year was £65,000 (2022: 412,000). The Company has elected to take the exemption
permitted under Section 408 of the companies Act 2006 not to present the Company’s profit and loss account.
Bernard Johnson
Managing Director
Company registration number 01227964
bernard johnson (Jul 6, 2023 17:54 GMT+1)
bernard johnson
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58
Consolidated statement of changes in equity
Share
capital
(note
25)
Share
premium
account
Merger
reserve
Treasury
Shares
Other
reserves
Translation
reserve
Retained
earnings
Total
equity
£000
£000
£000
£000
£000
£000
£000
£000
At 1 April 2021
Comprehensive
income for the year
Profit for the year
Exchange differences
on translation of
foreign operations
(7 )
(7 )
Total comprehensive
income for the year
(7 )
Contributions by and
distributions to
owners
Exercise of options
Shares issued on
acquisitions
Purchase of own shares
by EBT
(236 )
(236 )
Share-based payment
charge
Deferred tax through
Equity
(243 )
(243 )
Dividends
(428 )
(428 )
Total contributions
by and distributions
to owners
(236 )
(341 )
At 31 March 2022
(211 )
Comprehensive
income for the year
Profit for the year
Exchange differences
on translation of
foreign operations
(9 )
(9 )
Total comprehensive
income for the year
(9 )
Contributions by and
distributions to
owners
Exercise of options
Purchase of own shares
(Note 8)
(576 )
(576 )
Share-based payment
charge (note 26)
Deferred tax through
Equity (note 31)
(303 )
(303 )
Total contributions
by and distributions
to owners
(576 )
(202 )
(704 )
At 31 March 2023
(576 )
(211 )
The balance of £2,476,00 0 of ‘Shares issued on acquisitions’ has been transferred to the merger reserve from Share
premium as required by Section 612 of the Companies Act 2006. This has been represented in the prior year to show
the amounts as a separate reserve within equity.
Creightons Plc Annual Report 2023
59
Consolidated statement of changes in equity (continued)
Share capital
The nominal value of allotted and fully paid up ordinary share capital in issue.
Share premium account
Amount subscribed for share capital in excess of nominal value.
Merger reserve
The excess of the nominal value of the shares issued to the shareholders upon the acquisition of Emma Hardie and
Brodie & Stone businesses.
Treasury shares
Purchase of the Company’s own shares.
Capital redemption reserve
Non-distributable reserves following the purchase of Company’s own shares.
Other reserves
Non-distributable reserve following the redemption of the Company’s own shares. Purchase of the Company’s shares
by the EBT is shown as a negative movement through other reserves.
Translation reserve
Foreign currency differences arising from the translation of the financial statements of the overseas subsidiaries.
Retained earnings
Cumulative net gains and losses recognised in the statement of comprehensive income.
Creightons Plc Annual Report 2023
60
Company statement of changes in equity
Share
capital
(note
25)
Share
premium
account
Merger
reserve
Treasury
shares
Capital
redemption
reserve
Other
reserves
Retained
earnings
Total
equity
£000
£000
£000
£000
£000
£000
£000
Restated
As previously disclosed
at 1 April 2021
679
679
Prior year restatement
708
708
At 1 April 2021
648
1,410
-
-
18
-
1,387
3,463
Comprehensive
income for the year
Profit for the year
-
-
-
-
-
-
412
412
Total comprehensive
income for the year
-
-
-
-
-
-
412
412
Contributions by and
distributions to
owners
Exercise of options
23
541
-
-
-
-
-
564
Share based payment
charge restated
-
-
-
-
-
-
330
330
Shares issued on
acquisitions
26
-
2,476
-
-
-
-
2,502
Purchase of own shares
by EBT
-
-
-
-
-
(236)
-
(236)
Dividends paid (note
11)
-
-
-
-
-
-
(428)
(428)
Total contributions
by and distributions
to owners
49
541
2,476
-
-
(236)
(98)
2,732
Restated as at 31
March 2022
697
1,951
2,476
-
18
(236)
1,701
6,607
Comprehensive
income for the year
Profit for the year
-
-
-
-
-
-
65
65
Total comprehensive
income for the year
-
-
-
-
-
-
65
65
Contributions by and
distributions to
owners
Exercise of options
3
71
-
-
-
-
-
74
Share based payment
charge
-
-
-
-
-
-
101
101
Shares issued on
acquisitions
-
-
-
-
-
-
-
-
Purchase of own shares
(note 8)
-
-
-
(576)
-
-
(576)
Dividends paid (note
11)
-
-
-
-
-
-
-
-
Total contributions
by and distributions
to owners
3
71
-
(576)
-
-
101
(401)
At 31 March 2023
700
2,022
2,476
(576)
18
(236)
1,867
6,271
The balance of £2,476,000 of ‘Shares issued on acquisitions’ has been transferred to the merger reserve from Share
premium as required by Section 612 of the Companies Act 2006. This has been represented in the prior year to show
the amounts as a separate reserve within equity.
Creightons Plc Annual Report 2023
61
Consolidated cash flow statement
Note
Year ended 31
March
Year ended 31
March
2023
2022
£000
£000
Profit from operations
Adjustments for:
Depreciation on property, plant and equipment
15
Depreciation on right of use assets
16
Amortisation of intangible assets
14
Loss/(Profit) on disposal of Right of Use assets
6
(10 )
Share based payment charge
26
Decrease/(increase) in inventories
18
(2,515 )
Decrease/(increase) in trade and other receivables
(1,820 )
(Decrease)/increase in trade and other payables
(288 )
Cash generated from operations
Taxation paid
(62 )
(575 )
Net cash generated from operating activities
Investing activities
Purchase of property, plant and equipment
15
(825 )
(1,106 )
Purchase of right-of-use assets
16
(286 )
Proceeds from sale and lease back
Purchase of intangible assets
14
(315 )
(338 )
Acquisition of Brodie & Stone
8
(75 )
(3,507 )
Acquisition of Emma Hardie
8
(1,424 )
(2,775 )
Exceptional costs in relation to acquisitions
8
(343 )
Net cash used in investing activities
(2,639 )
(8,091 )
Financing activities
Proceeds on issue of shares
25
Cancellation of leases
23
(35 )
Principal paid on lease liabilities
23
(436 )
(240 )
Interest on lease liabilities
9
(117 )
Interest paid on mortgage loan
9
(83 )
Interest paid on overdrafts
9
(108 )
Increase in invoice financing facilities
30
(Decrease)/increase of borrowings
30
(600 )
Draw down of loan facility
30
Repayment on term loan
30
(816 )
(314 )
Repayment on mortgage loan facility
30
(252 )
(169 )
Dividends paid to owners of the parent
11
(428 )
Purchase of own shares via EBT
34
(236 )
Purchase of shares - Share buy back
8
(576 )
Repayment of debt – Emma Hardie
8
(2,201 )
Repayment of debt – Brodie & Stone
8
(463 )
Net cash generated from/(used in) financing
activities
(2,351 )
Net increase in cash and cash equivalents
(5,711 )
Cash and cash equivalents at start of year
Effect of foreign exchange rate changes
(9 )
(7 )
Cash and cash equivalents at end of year
Creightons Plc Annual Report 2023
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Company cash flow statement
Year ended 31
March
Year ended
31 March
2023
2022
Note
£000
£000
Profit from operations
142
116
142
116
Adjustments for:
Depreciation on property, plant and equipment
15
211
210
353
326
Decrease/(increase) in trade and other receivables
220
(2,604)
(Increase)/decrease in trade and other payables
(3)
9
Cash generated from operations
570
(2,269)
Taxation paid
(45)
(55)
Net cash generated from operating activities
525
(2,324)
Investing activities
Dividend received
-
428
Net cash (used in)/generated investing activities
-
428
Financing activities
Proceeds of share issue
25
74
3,066
Repayment on loan facility
(252)
(169)
Interest paid on mortgage loan
-
(83)
Dividends paid to owners of the parent
11
-
(428)
Purchase of own shares via EBT
34
-
(236)
Purchase of shares - EH buy back
8
(576)
-
Net cash generated from/(used in) financing activities
(754)
2,150
Net change in cash and cash equivalents
(229)
254
Cash and cash equivalents at start of year
255
1
Cash and cash equivalents at end of year
26
255
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Notes to the financial statements
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Notes to the financial statements
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Notes to the financial statements
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Notes to the financial statements
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Notes to the financial statements
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Notes to the financial statements
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Notes to the financial statements
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Notes to the financial statements
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Notes to the financial statements
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Notes to the financial statements
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Notes to the financial statements
5 Business and geographic segments
In the year ended 31 March 2023, the Group had 1 customer that exceeded 10% of total revenue, being £10.3m
(2022: two customers being £9.1m and £7.4m).
The Group makes sales under its own branded ranges, private label and contract manufacturing. However, all return
on investment and capital investment decisions are assessed at an overall business level only. Customers purchase
from various brands across the business, using the same manufacturing facilities (other than a small number of
products purchased from third parties), with the same employees working across all of the ranges in manufacturing
and support services. The Group therefore considers there to be only one operating segment when providing
information for management review.
Revenues from external customers
Year ended
Year ended
31-Mar
31-Mar
2023
2022
£000
£000
UK
47,964
51,114
Overseas
10,603
10,043
Total
58,567
61,157
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Notes to the financial statements
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Notes to the financial statements
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Notes to the financial statements
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Notes to the financial statements
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Notes to the financial statements
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Notes to the financial statements
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Notes to the financial statements
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Notes to the financial statements
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Notes to the financial statements
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Notes to the financial statements
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Notes to the financial statements
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Notes to the financial statements
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Notes to the financial statements
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Notes to the financial statements
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Notes to the financial statements
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Notes to the financial statements
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Notes to the financial statements
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Notes to the financial statements
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Notes to the financial statements
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Notes to the financial statements
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Notes to the financial statements
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Notes to the financial statements
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Notes to the financial statements
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Notes to the financial statements
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Notes to the financial statements
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Notes to the financial statements
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Notes to the financial statements
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Directors and Advisers
Directors
William O McIlroy Chairman
Bernard JM Johnson Managing Director
William T Glencross Non-executive Director
Nicholas DJ O’Shea Non-executive Director
Philippa Clark Deputy Managing Director
Martin Stevens Deputy Managing Director
Paul Forster Non-executive Director
Registered Office and number Company Secretary
Registered in England & Wales No 01227964
Auditor Registrars
Mazars LLP Link Group
The Pinnacle 10
th
Floor
160 Midsummer Boulevard Central Square
Milton Keynes 29 Wellington Street
MK9 1FF Leeds
LS1 4DL
Bankers Solicitors
HSBC Bank Plc Marriott Harrison
Cathedral Square 11 Staple Inn
Peterborough London
PE1 1XL WC1V 7QH
Financial Advisers
Greenwoods
Beaumont Cornish Ltd 30 City Road
Building 3 Peterborough
566 Chiswick High Road PE1 1JE
London
W4 5YA