Crawshaw Group Regulatory News (CRAW)

12 May 2009 07:00



12th May 2009

Crawshaw Group PLC (Formerly Felix Group PLC)

Final Results

Crawshaw Group PLC ( "the Company"), the meat focussed retailer, today reports its audited results for the year ended 31 January, 2009.

Highlights

Financial

Sales for the year to 31 January 2009 are £16.0m (£11.3m for the 42 weeks to 31 January 2008) 

EBITDA (before exceptional costs) of £1.2m

Operating profit of £854k before exceptional costs of £1,521k mostly associated with the reverse acquisition in April 2008

Loss before tax £(846k)

Earnings per share, basic (2.21p), normalised 1.27p.

Post balance sheet events - net debt at 31 January 2009 at £2.7m reduced to £2.0m in February partly due to a loan note for equity swap 

Operational

Sales performance in the second half of the year strong with retail like for like sales in Q3 ahead by 5% and in Q4 ahead by 6%. Retail like for like sales for full year to 31 January 2009 ahead by 2%

5 new stores opened in the period

One new store opened in April 2009 and a further store is planned for June 2009.

Trading Performance

Trading was strong during the period under review as good quality food available locally at a value price remained popular with our customers.

As indicated at the half year, it is difficult to make useful comparisons when reviewing performance against the prior year, largely due to exceptional costs incurred in relation to the reverse acquisition in April 2008. The comparative figures reported below for the prior year also only include 42 weeks of trading.

However, based on the underlying performance of the trading company, I am delighted to say that sales for the year rose to just over £16m, up £1.5m (+10%) versus the comparable prior year period. £1.3m of this increase was accounted for by the opening of 5 new stores and £0.2m was generated from improved sales performance from existing stores. Wholesale sales were £1.5m for the period under review (2008: £1.4m).

Sales from existing units were higher than the prior year despite the closure of units at Rotherham Market in November 2007 and Meadowhall in July 2008. Like for like sales for the full year (52 week period) are ahead by 2% which has been strengthened by an improved second half performance with like for likes for Q3 ahead by 5% and Q4 ahead by 6%. Second half sales performance was positively impacted by the store rebranding exercise.

Gross profit margin reduced slightly as a consequence of higher input prices.

Operating profit was £854k (2008: £954k) before exceptional costs of £1,521k (2008: £125k) which were mostly associated with the reverse acquisition. EBITDA before exceptional costs was £1.2m (2008: £1.1m). Loss before tax including exceptional costs was £(846k) (2008: profit £458k).

Gross margins were slightly lower than expected as increases in product costs, particularly towards the end of the period, were absorbed by the business to maintain our competitive advantage and value proposition. Net margins for the period were 5.3% (2008: 8.4%). This reduction was due to (i) the costs associated with being an AIM listed business, (ii) greater ongoing focus on food safety, (iii) processes and systems to support expansion, (iv) investment in training and HR, and (v) additional resource and pre opening costs associated with the new store opening programme.

No dividend is proposed.

New Units

Despite most of the new stores not opening until towards the back end of the year they did start to generate a trading profit by the end of the reporting period. New stores typically take two to three months of trading before a sufficient level of performance is generated to produce a positive cash return after pre opening costs.

As indicated in our pre close statement on 9 March 2009, the new stores cover a variety of different locations and the board now wishes to delay opening new stores until such a time as the financial returns of each store type can be fully evaluated - enabling the board to maximise its returns on further new stores going forward. The board feels this cautious approach is appropriate in the current external financial environment.

During the year five new stores were opened: Retford in July, Castleford in October, Chesterfield and Mansfield in November and Huddersfield in January. Of these five stores one store is trading significantly above, three are in line and one is below management's sales expectations. 

Cash Flow and Balance Sheet

At 31 January 2009, the Group had cash in bank of approximately £1.5m, total interest bearing loans and borrowings of approximately £4.2m and gross assets of £14.4m. 

In line with the Group's stated expansion strategy, cash has been utilised on the opening of new retail outlets and on the repayment of a proportion of the loan notes. As a result, the net debt position as at 31 January 2009 was approximately £2.7 million consisting of a cash balance of £1.5m, a bank loan of £1.1m, a loan note balance of £2.3m, and £0.8m related to mortgages secured on the Group's distribution centre in Grimsby and a store in Hull.

In February 2009, the Board finalised the conversion of £1m of debt owed to the loan note holders into shares issued by the Company reducing the net debt position to £2.0m.

The £2.5m facility agreement with the Royal Bank of Scotland PLC has been extended to 30 June 2010.

Food Safety

Food safety is a key priority for the business and during the period under review the company has embarked on the development and implementation of two food safety management systems (one for the distribution centres and the other to support the retail sites) to ensure that consistent safe quality products are always provided to all our customers.

During 2008, both distribution centers gained EC Approval from the Food Standards Agency (FSA) recognising improvements in our quality management systems and standards within all our retail sites have been verified by the relevant local authority as being consistently high.

 

In addition nutritional calculations have been completed for meat preparations which will now allow the company to provide customers with calorific and nutritional information for company manufactured meat preparations in accordance with the FSA traffic light initiative. Crawshaws, as far as we are aware, would be the first SME independent retail butcher to be able to supply this information in this format. 

People

Over the last year our people have provided an excellent service to our customers whilst managing new shop openings, integrating new systems and improving standards.

I would like to express the Board's appreciation to all the members of the Crawshaw team for their continued hard work and commitment to our success.

Current trading and Outlook

Like for like sales for the first 13 weeks of the current year are ahead of the corresponding period last year. Retail gross margin across the group for the current year to date is approximately 4 percentage points lower than planned as a consequence of much higher input prices and promotional activity at new stores. Whilst the new opening promotions have now ended at all but the most recently opened store and this has reduced the margin shortfall at these stores, input prices remain high across most product categories. We continue to absorb a proportion of these increases to maintain our competitive market advantage and intend to keep the situation under review.

A further new store was opened in April 2009 and is trading significantly ahead of management's expectation.

The Board expects that the Group's 20th store will open in June 2009.

Richard Rose

Chairman

12th May 2009.

Consolidated Income Statement

for the year ended 31 January 2009

		Year ended	Period ended
		31 January	31 January
		2009	2008
	Note	£	£
Revenue		16,044,771	11,338,631
Cost of sales		(9,221,902)	(6,452,804)
Gross profit		6,822,869	4,885,827
Other operating income	5	12,420	105,250
Administrative expenses		(7,501,617)	(4,161,854)
Operating profit before one-off costs		854,349	954,497
Restructuring costs	3	–	(63,671)
Refinancing costs	3	(254,908)	–
Reverse acquisition costs	3	(1,051,522)	–
Costs for flood remedial works	3	–	(61,603)
Intangible impairment	3	(214,247)
Operating (loss)/profit		(666,328)	829,223
Financial income	9	42,883	19,943
Financial expenses	9	(235,715)	(410,133)
Net finance expense		(192,832)	(390,190)
Share of profit of equity accounted investees (net of income tax)		13,414	18,852
(Loss)/profit before income tax		(845,746)	457,885
Income tax expense	10	(118,977)	(161,286)
(Loss)/profit for the period attributable to
equity holders of the parent		(964,723)	296,599
Earnings per share (pence)
·;  basic		(2.21p)	1.09p
·;  diluted		(2.21p)	1.09p

Figures for the period ended 31 January 2008 only include the trading results of Crawshaw Butchers Limited from 15 April 2007 onwards, the date that Crawshaw Butchers Limited was acquired by Crawshaw Holdings Limited.

Statements of Recognised Income and Expense

for the period ended 31 January 2009

		Group	Group	Company	Company
	Note	Year ended	Period ended	Year ended	Period ended
		31 January	31 January	31 January	31 January
		2009	2008	2009	2008
		£	£	£	£
(Loss)/profit for the period		(964,723)	296,599	(1,086,688)	(25,844,242)
Total recognised income and expense	21	(964,723)	296,599	(1,086,688)	(25,844,242)

Balance Sheets

At 31 January 2009

Non-current assets	Note	Group 2009 £	Group 2008 £	Company 2009 £	Company 2008 £
Property, plant and equipment	12	4,231,603	2,318,610	-	-
Intangible assets	13	7,720,084	7,754,762	-	-
Investment in equity accounted investees	14	109,746	96,332	-	-
Investments in subsidiaries	15		-	11,700,000	-
Total non-current assets		12,061,433	10,169,704	11,700,000	-
Current assets
Inventories	17	461,521	277,226	-	-
Trade and other receivables	18	447,528	234,890	4,732,966	136,630
Cash and cash equivalents		1,463,545	531,443	-	2,616,701
Total current assets		2,372,594	1,043,559	4,732,966	2,753,331
Total assets		14,434,027	11,213,263	16,432,966	2,753,331
Current liabilities
Loans and borrowings	22	2,252,018	713,335	-	-
Trade and other payables	19	2,376,787	1,372,995	37,500	887,383
Tax payable		-	118,983	-	-
Total current liabilities		4,628,805	2,205,313	37,500	887,383
Non-current liabilities
Loans and borrowings	22	1,950,000	7,978,118	-	-
Other payables	19	100,289	9,136	-	-
Deferred tax liabilities	16	457,233	391,816	-	-
Total non-current liabilities		2,507,522	8,379,070	-	-
Total liabilities		7,136,327	10,584,383	37,500	887,383
Net assets		7,297,700	628,880	16,395,466	1,865,948
Equity
Share capital	21	2,334,009	2,406,763	2,334,009	2,406,763
Share premium	21	4,981,049	15,981,764	4,981,049	15,981,764
Reverse acquisition reserve	21	446,563	(18,175,942)	-	-
Capital contribution reserve	21	149,311	119,696	-	-
Merger reserve	21	-	-	10,140,000
Retained earnings	21	(613,232)	296,599	(1,059,592)	(16,522,579)
Total equity attributable to equity holders of the parent		7,297,700	628,880	16,395,466	1,865,948

for the period ended 31 January 2009

Cash flows from operating activities	Group Note Year ended 31 January 2009 £	Group Period ended 31 January 2008 £	Company Year ended 31 January 2009 £	Company Period ended 31 January 2008 £
(Loss)/profit for the period	(964,723)	296,599	(1,086,688)	(26,260,232)
Adjustments for:
Depreciation and amortisation	259,570	181,532	-	-
Impairment of intangible	214,247	-	-	-
Impairment of fixed asset investments	-	-	-	11,830,258
Impairment of debt due from subsidiary	-	-	-	12,952,356
Financial income	(42,883)	(19,943)	-	(96,477)
Financial expenses	235,715	410,133	-	-
Share based payment charge	54,892	-	-	-
Share of profit of equity Accounted investees (net of income tax)	(13,414)	(18,852)	-	-
Profit on sale of property, plant and equipment	12,817	(2,225)	-	-
Taxation	118,977	161,286	-	-
Operating cash flow before movements in working capital	(124,802)	1,008,530	(1,086,688)	(1,574,095)
(Increase)/decrease in trade  and other receivables	(212,376)	26,807	(85,038)	(1,624,699)
(Increase)/decrease in inventories	(184,295)	(33,324)	-	-
Increase/(decrease) in trade and other payables	1,019,066	432,969	(841,883)	841,271
	497,593	1,434,982	(2,013,609)	(2,357,523)
Income tax paid	(172,806)	(293,853)	-	-
Net cash from operating activities	324,787	1,141,129	(2,013,609)	(2,357,523)

(continued)

for the period ended 31 January 2009

	Note	Group Year ended 31 January 2009	Group Period ended 31 January 2008	Company Year ended 31 January 2009	CompanyPeriod ended 31 January 2008
Cash flows from investing activities		£	£	£	£
Proceeds from sale of property, plant and equipment		3,860	20,636	-	96,477
Interest received		42,883	19,943	-	-
Interest paid		(206,100)	(277,991)	-	-
Dividend received		-	5,000	-	-
Proceeds from sale of investments		-	-	-	235,000
Acquisition of property, plant and equipment		(2,154,564)	(101,374)	-	-
Acquisition of subsidiary, net of cash acquired	4	-	(6,889,492)	-	-
Net cash recognised on reverse acquisition	4	1,666,899	-	-	-
Net cash from investing activities		(647,022)	(7,223,278)	-	331,477
Cash flows from financing activities
Proceeds from issue of share capital		-	2,012,152	-	4,160,793
Proceeds from medium term loan		-	3,555,500	-	-
Mortgage		-	840,000	-	-
Loan notes		-	752,690	-	-
Repayment of loans		(3,771,869)	(546,750)	-	-
Bank loan		1,110,000	-	-	-
Movements in amounts owed by group companies		-	-	(4,519,298)	-
Proceeds from issue of share capital (net of issue costs)		3,916,206	-	-	-
Issue of ordinary shares (net of issue costs)		-	-	3,916,206	-
Net cash from financing activities		1,254,337	6,613,592	(603,092)	4,160,793
Net increase/(decrease) in cash and cash equivalents		932,102	531,443	(2,616,701)	2,134,747
Cash and cash equivalents at
1 February 2008		531,443	-	2,616,701	481,954
Net cash and cash equivalents at
31 January 2009		1,463,545	531,443	-	2,616,701

Notes to the financial statements

(forming part of the financial statements)

1. BACKGROUND AND BASIS OF PREPARATION

The consolidated financial information presented for the year ended 31 January 2009 comprise Crawshaw Group PLC ('Company' formerly Felix Group PLC) and its subsidiaries (together referred to as the 'Group').

On 11 April 2008, the Company, then named Felix Group PLC, became the legal parent company of Crawshaw Group Limited (which subsequently changed its name to Crawshaw Holdings Limited) in a share for share exchange. Due to the relative sizes of the companies, the former Crawshaw Holdings Limited became the majority shareholders of the enlarged group. Following the transaction the Company's continuing operations and executive management were predominantly those of Crawshaw Holdings Limited. Accordingly the substance of the combination was that Crawshaw Holdings Limited acquired Felix Group PLC in a reverse acquisition. Felix Group PLC subsequently changed its name to Crawshaw Group PLC.

As a consequence of applying reverse acquisition accounting, the results of the Group at 31 January 2009 comprise the results of Crawshaw Holdings Limited for the year ended 31 January 2009 and those of Crawshaw Group PLC from 11 April 2008. However the equity structure appearing in these consolidated financial statements reflects the equity structure of the legal parent, including the equity instruments issued by the legal parent to effect the combination. The comparative figures for the Group are those of Crawshaw Holdings Limited for the period ended 31 January 2008. The fair values of Crawshaw Group PLC's assets and liabilities as at 11 April 2008 have been consolidated as set out in note 4.

The consolidated financial information have been prepared and approved by the directors in accordance with International Financial Reporting Standards as adopted by the European Union ("IFRSs").

 

2. ACCOUNTING POLICIES

Significant accounting policies

The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in this financial information.

Judgements made by the directors, in the application of these accounting policies that have significant effect on the financial information and estimates with a significant risk of material adjustment in the next period are discussed below.

The financial statements have been prepared on the going concern basis, notwithstanding net current liabilities of the Group of £2,256,211 which the directors believe to be appropriate given the long term financing in place, the post balance sheet conversion of £1 m of debt into equity (see note 29) and the directors' assessment of the adequacy of future cash flows. Adherence to the Groups short term obligations is a key focus and closely monitored via working capital management, short term cash flow forecasting and cost control. The directors believe that it remains appropriate to prepare the financial statements on a going concern basis.

The directors have reviewed the Group's projected working capital requirements and fixed asset expenditure and believe that the Group has sufficient funding for the foreseeable future.

Basis of consolidation

The consolidated financial information includes the financial information of the company and its subsidiary undertakings made up to 31 January 2009. Subsidiaries are defined as entities controlled by the group. Control exists when the group has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

On 11 April 2008, Crawshaw Holdings Limited acquired by a reverse acquisition Crawshaw Group PLC. As a result of the business combination, the shareholders of Crawshaw Holdings Limited became the majority shareholders of the enlarged group. Accordingly the transaction was accounted for as a reverse acquisition in accordance with IFRS 3 'Business Combinations'.

As a consequence of applying reverse acquisition accounting, the results of the Group at 31 January 2009 comprise the results of Crawshaw Holdings Limited for the year ended 31 January 2009 and those of Crawshaw Group PLC from 11 April 2008. However the equity structure appearing in these consolidated financial statements reflects the equity structure of the legal parent, including the equity instruments issued by the legal parent to effect the combination. The comparative figures for the Group are those of Crawshaw Holdings Limited for the period ended 31 January 2008. The fair values of Crawshaw Group PLC's assets and liabilities as at 11 April 2008 have been consolidated as set out in note 4.

Classification of financial instruments issued by the Group

In applying policies consistent with IAS 32, financial instruments issued by the Group are treated as equity only to the extent that they meet the following two conditions:

they include no contractual obligations upon the Group to deliver cash or other financial assets or to exchange financial assets or financial liabilities with another party under conditions that are potentially unfavourable to the Group; and

where the instrument will or may be settled in the Group's own equity instruments, it is either a non-derivative that includes no obligation to deliver a variable number of the Group's own equity instruments or is a derivative that will be settled by the Group's exchanging a fixed amount of cash or other financial assets for a fixed number of its own equity instruments.

To the extent that this definition is not met, the proceeds of issue are classified as a financial liability. Where the instrument so classified takes the legal form of the Group's own shares, the amounts presented in this financial information for called up share capital and share premium account exclude amounts in relation to those shares.

Preference share capital is classified as equity if it is non-redeemable, or redeemable only at the Company's option, and any dividends are discretionary. Dividends thereon are recognised as distributions within equity upon approval by the Group's shareholders.

Preference share capital is classified as a liability if it is redeemable on a specific date or at the option of the shareholders, or if dividend payments are not discretionary. Dividends thereon are recognised as interest expense in profit or loss as accrued.

Finance payments associated with financial liabilities are dealt with as part of finance expenses. Finance payments associated with financial instruments that are classified in equity are treated as distributions and are recorded directly in equity.

Non-derivative Financial Instruments

Non-derivative financial instruments comprise investments in equity securities, trade and other receivables, cash and cash equivalents and trade and other payables.

Trade and other receivables are recognised at stated cost less impairment losses. It is the Company's policy to review trade and other receivable balances for evidence of impairment at each reporting date. Any receivables which give significant cause for concern are written down to the best estimate of the recoverable amount.

Cash and cash equivalents comprise cash-in-hand and cash-at bank. Trade and other payables are recognised at stated cost.

Associates and jointly controlled entities (equity accounted investees)

Associates are those entities in which the Group has significant influence, but not control, over the financial and operating policies. Significant influence is presumed to exist when the Group holds between 20 and 50% of the voting power of another entity. Joint ventures are those entities over whose activities the Group has joint control, established by contractual agreement and requiring unanimous consent for strategic financial and operating decisions.

Associates and jointly controlled entities are accounted for using the equity method (equity accounted investees) and are initially recognised at cost. The Group's investment includes goodwill identified on acquisition, net of any accumulated impairment losses. The consolidated financial statements include the Group's share of the income and expenses and equity movements of equity accounted investees, after adjustments to align the accounting policies with those of the Group, from the date that significant influence or joint control commences until the date that significant influence or joint control ceases. When the Group's share of losses exceeds its interest in an equity accounted investee, the carrying amount of that interest (including any long-term investments) is reduced to nil and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the investee.

Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses.

Depreciation is charged to the income statement on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment. Residual values of property, plant and equipment is assumed to be nil. Land is not depreciated. The estimated useful lives are as follows:

Freehold property	2%
Leasehold buildings	in accordance with the lease term
Leasehold improvements	in accordance with the lease term
Plant, equipment and vehicles	10-25% on reducing balance

Intangible assets and goodwill

Goodwill represents amounts arising on acquisition of businesses. In respect of business acquisitions that have occurred since 11 December 2006, goodwill represents the difference between the cost of the acquisition and the fair value of the net identifiable assets acquired. Identifiable intangibles are those which can be sold separately or which arise from legal rights regardless of whether those rights are separable.

Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to cash-generating units and is not amortised but is tested annually for impairment. Any impairment is then recognised immediately in profit or loss and is not subsequently reversed.

Intangible assets that are acquired by the Group, which have finite useful lives, are measured at cost less accumulated amortisation and accumulated impairment losses.

Amortisation

Amortisation is recognised in profit and loss on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date that they are available for use. The estimated useful lives for the current and comparative periods are as follows:

Brand

20 years

Impairment

The carrying amounts of the Group's assets are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the asset's recoverable amount is estimated.

For goodwill and intangible assets that are not yet available for use, the recoverable amount is estimated at each balance sheet date.

An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognised in the income statement.

Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to cash-generating units and then to reduce the carrying amount of the other assets in the unit on a pro rata basis. A cash generating unit is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets.

Goodwill and intangible assets that are not yet available for use were tested for impairment as at 1 February 2006, the notional date of transition to Adopted IFRSs, even though no indication of impairment existed.

Calculation of recoverable amount

The recoverable amount of other assets is the greater of their fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

  Reversals of impairment

An impairment loss in respect of goodwill is not reversed.

In respect of other assets, an impairment loss is reversed when there is an indication that the impairment loss may no longer exist and there has been a change in the estimates used to determine the recoverable amount.

An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

Provisions

A provision is recognised in the balance sheet when the Group has a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect is material, provisions are determined by discounting the expected, risk adjusted, future cash flows at a pre-tax risk-free rate.

Trade and other receivables

Trade and other receivables are recognised at their fair value and thereafter at amortised cost less impairment charges.

Inventories

Inventories are stated at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items. Cost comprises purchase price. Net realisable value is estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

Inventories are primarily goods for resale.

Cash and cash equivalents

Cash and cash equivalents comprise cash-in-hand and cash-at bank. Bank overdrafts that are repayable on demand and form an integral part of the Group's cash management are included as a component of cash and cash equivalents for the purpose only of the statement of cash flows.

Employee benefits

Defined contribution plans

The Group operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Group in an independently administered fund. Obligations for contributions to defined contribution pension plans are recognised as an expense in the income statement as incurred.

Short-term benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A provision is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

Revenue

Revenue is derived from retail butcher activities, stated after trade discounts, VAT and any other sales taxes. Revenue from the sale of goods is recognised in the income statement when the significant risks and rewards of ownership have been transferred to the buyer. Where the Group sells to distributors, revenue from the sale of goods is recognised where there are no further obligations on the Group and when the associated economic benefits are due to the Group and the turnover can be reliably measured.

Expenses

Operating lease payments

Payments made under operating leases are recognised in the income statement on a straight-line basis over the term of the lease. Lease incentives received are recognised in the income statement as an integral part of the total lease expense.

Net financing costs

Net financing costs comprise interest payable, finance charges on shares classified as liabilities, interest receivable on funds invested and dividend income.

Interest income and interest payable is recognised in profit or loss as it accrues, using the effective interest method. Dividend income is recognised in the income statement on the date the entity's right to receive payments is established.

Borrowing costs

In the current year borrowing costs are expensed in the consolidated income statement as incurred.

Taxation

Tax on the profit or loss for the period comprises current and deferred tax. Tax is recognised in the income statement except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.

Current tax is the expected tax payable on the taxable income for the period, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous periods.

Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided for: the initial recognition of goodwill; the initial recognition of assets or liabilities that affect neither accounting nor taxable profit other than in a business combination, and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised.

Bank loans, overdrafts and loan notes

Interest-bearing bank loans, overdrafts and loan notes are recorded at the proceeds received, net of direct issue costs. Finance charges, including premiums payable on settlement or redemption and direct issue costs, are accounted for on an accruals basis in profit or loss using the effective interest rate method and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise.

Segmental reporting

A segment is a distinguishable component of the Group that is engaged either in providing related products or services (business segment), or in providing products or services within a particular economic environment (geographical segment), which is subject to risks and returns that are different from those of other segments.

Based on the sources of risks and returns impacting the Group's activities, the Directors consider that the primary reporting format is by business segment. The Directors consider that there is only one business segment being retail butchers. The disclosures for the primary segment are therefore given by the primary financial statements and related notes.

The Group's business operations are conducted exclusively in the UK so a geographical segment report is not required.

Applicable new standards and interpretations of existing standards that have been issued and endorsed by the EU but are not yet adopted by the Group

The following new applicable standards, amendments to standards and interpretations are not yet effective for the period ended 31 January 2009 and have not been applied in preparing the financial information: 

 

International Accounting Standards (IAS/IFRS)		Effective date
IFRS 2 (Amendment)	Share based payments	1 January 2009
IFRS 8	Operating segments	1 January 2009
IAS 1 (Revised)	Presentation of Financial Statements	1 January 2009
IAS 23 (Revised)	Borrowing costs	1 January 2009
IAS 32 (Amendment)	Financial instruments presentation	1 January 2009

IFRS 8 which becomes mandatory for the Group's 2010 Financial Statements will require the disclosure of segment information based on the internal reports regularly reviewed by the Group's Chief Operating decision maker in order to assess each segment's performance and to allocate resources to them. Currently the Group does not present segmental information as the Directors have determined that only one segment exists. However going forward consideration of this will be required should it possess distinguishable segments.

The effect of the other new standards and interpretations is not expected to be material.

Significant judgements and estimates

The preparation of the financial information in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and underlying assumptions are reviewed on an ongoing basis.

The estimates associated with the assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgements about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised in the period in which the estimate is revised if the revision only affects that period, or in the period of revision and future periods if the revision affects both current and future periods.

The key sources of estimation uncertainty at the balance sheet date are:

Goodwill

Determining whether goodwill is impaired requires an estimation of the value in use of the cash-generating unit(s) to which goodwill has been allocated. The value in use calculation requires the entity to estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate present value.

The carrying amount of goodwill at the balance sheet date was £7.1 m. Details of the present value calculation are provided in note 13.

Brand intangibles

The royalty relief approach was utilised to determine the value of the brand. A royalty percentage of 1% has been applied to revenue streams for the twenty years ended 31 January 2028 from the branch network carrying the Crawshaw brand, as part of the business combination occurring in the prior period. These have then been discounted at 15.7% to arrive at an initial carrying value of £693,558. This will be amortised over the finite life of twenty years, with the amortisation charge being included within administrative expenses.

3. EXCEPTIONAL COSTS Exceptional items in the period relate to

	2009	2008
	£	£
Refinancing costs	254,908	–
Acquisition costs related to reverse acquisition (see note 4)	1,051,522	–
Intangible impairment related to reverse acquisition (see note 4)	214,247	–
Restructuring costs	–	63,671
Costs from flood remedial works	–	61,603
	1,520,677	125,274

Refinancing costs are in relation to fees incurred on a change in the company's bankers. Acquisition costs and intangible impairment relate to the reverse acquisition of Felix Group PLC.

4. ACQUISITION IN THE PERIOD

On 11 April 2008, the Company, then named Felix Group PLC, became the legal parent company of Crawshaw Group Limited (which subsequently changed its name to Crawshaw Holdings Limited) in a share for share exchange. Due to the relative sizes of the companies, the former Crawshaw Holdings Limited shareholders became the majority shareholders of the enlarged group. Following the transaction the Company's continuing operations and executive management were predominantly those of Crawshaw Holdings Limited. Accordingly the substance of the combination was that Crawshaw Holdings Limited acquired Felix Group PLC in a reverse acquisition. Felix Group PLC subsequently changed its name to Crawshaw Group PLC.

The acquisition has been accounted for as a reverse acquisition as required by IFRS 3, with all acquisition costs being expensed.

The value of net assets acquired and other intangibles arising was as follows:

	Book Value Prior	Fair Value	Acquisition
	To Acquisition	Adjustments	Amounts
	£	£	£
Trade and other receivables	1,422,714	-	1,422,714
Cash and cash equivalents	1,668,899	-	1,668,899
Trade and other payables	(1,500,550)	-	(1,500,550)
Net identifiable assets and liabilities	1,591,063	-	1,591,063
Fair value of consideration			1,805,310
Other intangibles			214,247

4. ACQUISITION IN THE PERIOD (continued)

The combination was effected by the issue of 31,200,000 shares of 5p each including those shares issued to acquire the preference share capital (see note 15). The fair value of the consideration is calculated based on the number of shares that would have been issued by Crawshaw Holdings Limited to provide the same percentage ownership interest of the enlarged group to the owners of the legal parent, being 13.37%.

The value of the shares issued was £11,700,000 (37.5p per 5p share) which represented the market value at that date.

The other intangibles balance generated of £214,247, which represents the acquisition of a listing by Crawshaw Holdings Limited, has been immediately impaired as Felix Group PLC has no ongoing trade.

In the year to 31 January 2009, Crawshaw Group PLC contributed a net loss of £(811,757) to the consolidated net loss for the year.

 

5. OTHER OPERATING INCOME

	2009	2008
	£	£
RGV management charge	12,000	6,000
Insurance proceeds	–	99,250
Other	420	–
	12,420	105,250

The Group charges RGV Refrigeration a management charge each period for administration services. The Group has investment in RGV Refrigeration, which is described further in note 12.

Insurance proceeds in 2008 were received in respect of consequential loss of profits following the closure of a store due to a flood.

6. EXPENSES AND AUDITORS' REMUNERATION  Included in operating profit are the following:

	2009	2008
	£	£
Depreciation of property, plant and equipment (owned)	224,892	154,079
Amortisation of intangible assets (note 13)	34,678	27,453
Loss/(profit) on sale of property, plant and equipment	12,817	(2,225)
Auditors’ remuneration:
	2009	2008
	£	£
Audit of these financial statements	12,500	3,500
Amounts receivable by the auditors and their associates in respect of:
Audit of financial statements of subsidiaries pursuant to legislation	15,000	10,500
Other services relating to taxation	1,500	3,500
Other services relating to accountancy	–	20,000
Services relating to corporate finance transactions	229,500	–
Total auditors’ remuneration	258,500	37,500

7. STAFF NUMBERS AND  COSTS The average number of persons employed by the Company (including directors) during the period, analysed by category, was as follows:
	Number	of employees
	2009	2008
Management	7	7
Other	183	176
	190	183
The aggregate payroll costs of these persons were as follows:
	2009	2008
	£	£
Wages and salaries	3,332,696	2,275,754
Social security costs	272,129	204,611
Other pension costs	65,893	79,223
	3,670,718	2,559,588

8. KEY MANAGEMENT COMPENSATION

	2009	2008
	£	£
Wages and salaries	327,005	179,646
Company contributions to money purchase pension plans	61,629	75,065

The Group considers key management personnel as defined in IAS24 'Related Party Disclosures' to be the Directors of the Group. Detailed disclosures of individual remuneration, pension entitlements and share options, for those directors who served during the year, are given in the Report of the Remuneration Committee. 

 

Retirement benefits accruing under:	No. of Directors	No. of Directors
	2009	2008
Money Purchase Schemes	2	3

 

 

9. FINANCE INCOME AND EXPENSE
	2009	2008
	£	£
Bank interest	42,883	19,943
Financial income	42,883	19,943
Bank interest	103,269	277,991
Loan note interest	132,446	119,696
Other finance costs	-	12,446
Financial expenses	235,715	410,133

10. TAXATION
Recognised in the income statement
	2009	2008
	£	£
Current tax expense
Current period	53,560	198,420
	53,560	198,420
Deferred tax expense
Origination and reversal of temporary differences	42,402	(23,015)
Reduction in tax rate	-	(14,116)
Adjustments for prior year	23,015	-
	65,417	(37,134)
Total tax in income statement	118,977	161,286
Reconciliation of effective tax rate
	2009	2008
	£	£
(Loss)/profit for the period	(964,723)	296,599
Total tax expense	118,977	161,286
(Loss)/profit excluding taxation	(845,746)	457,885
Tax using the UK corporation tax rate of 28%	(239,527)	137,366
Non-deductible expenses	335,489	38,036
Reduction in tax rate	-	(14,116)
Adjustments for prior years	23,015	-
Total tax expense	118,977	161,286

11. EARNINGS PER SHARE

Basic earnings per share is calculated by dividing the earnings attributable to the ordinary shareholders by the weighted average number of ordinary share in issue during the year.

Diluted EPS is not calculated as the share options are anti-dilutive. As per IAS33 potential ordinary shares are antidilutive when their conversion to ordinary shares would increase earnings per share or decrease loss per share from continuing operations. The calculation of diluted earnings per share does not assume conversion, exercise, or other issue of potential ordinary shares that would have an antidilutive effect on earnings per share.

11. EARNINGS PER SHARE (continued)

Reconciliation of the earnings and weighted average number of shares used in the calculation are set out below

	Earnings	Weighted average	Earnings	Weighted average
	2009	Number of ordinary	2008	Number of ordinary
	£'000's	Shares 2009	£'000's	Shares 2008
Earnings per share	(965)	43,711,390	297	27,281,282

12. PROPERTY, PLANT AND EQUIPMENT
Cost	Asset under construction	Land and buildings	Leasehold Plant, equipment	Freehold improvements and vehicles	Total
	£	£	£	£	£
Balance at 1 February 2008	-	731,935	290,930	1,412,042	2,434,907
Additions at cost	73,192	-	1,881,612	199,758	2,154,562
Disposals	-	-	-	(95,869)	(95,869)
Balance at 31 January 2009	73,192	731,935	2,172,542	1,515,931	4,493,600
Depreciation and impairment
Balance at 1 February 2008	-	11,641	9,957	94,699	116,297
Depreciation charge for the year	-	14,405	51,168	159,319	224,892
Disposals	-	-	-	(79,192)	(79,192)
Balance at 1 January 2009	-	26,046	61,125	174,826	261,997
Net book value
At 31 January 2008	-	720,294	280,973	1,317,343	2,318,610
At 31 January 2009	73,192	705,889	2,111,417	1,341,105	4,231,603

There are no items of property, plant and equipment in the Company.

For details of security given over property, plant and equipment see note 22.

12. PROPERTY, PLANT AND EQUIPMENT (continued) Prior year

Group Cost or deemed cost	Freehold £	Land and buildings Leasehold improvements and building £	Plant, equipment and vehicles £	Total £
Acquisitions through business combinations	731,935	273,223	1,384,568	2,389,726
Additions at cost	-	17,707	83,667	101,374
Disposals	-	-	(56,193)	(56,193)
Balance at 31 January 2008	731,935	290,930	1,412,042	2,434,907
Depreciation and impairment
Depreciation charge for the period	11,641	9,957	132,481	154,079
Disposals	-	-	(37,782)	(37,782)
Balance at 31 January 2008	11,641	9,957	94,699	116,297
Net book value
At 31 January 2008	720,294	280,973	1,317,343	2,318,610

13. INTANGIBLE ASSETS Group Cost or deemed cost	Other intangibles £	Goodwill £	Brand £	Total
At 1 February 2008	-	7,088,657	693,558	7,782,215
Reverse acquisition (see note 4)	214,247	-	-	214,247
Balance at 31 January 2009	214,247	7,088,657	693,558	7,996,462
Amortisation and impairment
At 1 February 2008	-	-	27,453	27,453
Amortisation charge for the period	-	-	34,678	34,678
Impairment losses for the period - exceptional	214,247	-	-	214,247
Balance at 31 January 2009	214,247	-	62,131	276,378
Net book value
At 31 January 2009	-	7,088,657	631,427	7,720,084
At 31 January 2008	-	7,088,657	666,105	7,754,762
Prior year
		Goodwill	Brand	Total
		£	£	£
Group
Cost or deemed cost
Acquisitions through business combinations		7,088,657	693,558	7,782,215
Balance at 31 January 2008		7,088,657	693,558	7,782,215
Amortisation and impairment
Amortisation charge for the period		-	27,453	27,453
Balance at 31 January 2008		-	27,453	27,453
Net book value
At 31 January 2008		7,088,657	666,105	7,754,762

13. INTANGIBLE ASSETS (continued)

Other intangibles impaired in the period relates to the excess fair value of consideration against net assets following the reverse acquisition of Crawshaw Group PLC.

Acquired brand values are calculated using the royalty relief approach and are amortised over twenty years. The remaining amortisation period is 18 years and 2 months.

Impairment testing

For the purpose of impairment testing, goodwill is allocated to the Group's branch network, which represents the lowest level within the Group at which the goodwill is monitored for internal management purposes. The cash generating unit for the purpose of assessing the carrying value of goodwill is therefore the branch network as a whole.

The recoverable amount of the cash generating unit has been calculated with reference to its value in use. The key features of this calculation are shown below:

	2009	2008
Period on which management approved forecasts are based	2 years	2 years
Growth rate applied beyond approved forecast period	1%	1%
Discount rate	15.7%	15.7%

Value in use was determined by discounting the future cash flows generated from the continuing operations of the branch network over the next 20 years and was based on the following key assumptions:

A growth rate of 1% was assumed thereafter (18 years)

 

14. INVESTMENTS IN EQUITY ACCOUNTED INVESTEES

	Group 2009	Group 2008	Company 2009	Company 2008
	£	£	£	£
Non-current
Investment in equity accounted investees	109,746	96,332	-	-

Other investments comprise a 50% share in RGV Refrigeration, a partnership jointly owned by Crawshaw Butchers Limited and Mr M Hornsby. The Group does not exert control over the entity. The Group accounts for the investment using the equity method as detailed in note 2.

The carrying value of investments in equity accounted investees includes £27,246 outstanding dividend declared by RGV Refrigeration.

15. INVESTMENTS IN SUBSIDIARIES

	Company	Company
	2009	2008
	£	£
Non-current
Investment in Crawshaw Holdings Limited	9,872,433	–
Loans to group undertakings	1,827,567	–
Total	11,700,000	–

On 11 April 2008 the company acquired Crawshaw Holdings Limited via a share for share exchange for a fair value consideration of £11 .7m, representing the market value of the shares issued at that date. As part of the share for share exchange, 1,827,567 preference shares of £1 were acquired in Crawshaw Holdings Limited. These shares were classified as debt within this company hence this element of the transaction has been treated as an acquisition of debt.

16. DEFERRED TAX LIABILITIES Recognised deferred tax liabilities Deferred tax liabilities are attributable to the following:			Group Liabilities
			2008
			£
Plant and equipment			300,170
Intangible assets - brand			174,080
Share based payments			(17,017)
			457,233
Movement in deferred tax during the period
		Recognised
	31 January	in income	31 January
	2008	Current period	2009
	£	£	£
Plant and equipment	222,273	77,897	300,170
Deferred tax relating to intangible assets - brand	186,509	(12,429)	174,080
Share based payments	(16,966)	(51)	(17,017)
	391,816	65,417	457,233

17. INVENTORIES
	Group	Group	Company	Company
	2009	2008	2009	2008
	£	£	£	£
Finished goods	461,521	277,226	-	-
18. TRADE AND OTHER RECEIVABLES
	Group	Group	Company	Company
	2009	2008	2009	2008
	£	£	£	£
Trade receivables	125,083	131,910	-	-
Other tax and social security	168,738	37,690	111,459	-
Prepayments and accrued income	153,707	65,290	794	17,764
Amounts owed by group undertakings	-	-	4,620,713	110,866
	447,528	234,890	4,732,886	128,630

No interest is charged on receivables. The directors consider that the carrying amount of trade and other receivables approximates their fair value.

Aged analysis of trade receivables

		31 Jan 2009			31 Jan 2009
	Gross	Provision for	Net trade	Gross	Provision for	Net trade
	receivables	Doubtful debt	receivables	receivables	Doubtful debt	receivables
	£	£	£	£	£	£
Not past due	98,949	-	98,949	94,834	-	94,834
Up to 1 month past due	20,286	-	20,286	19,442	-	19,442
Over 1 month past due	18,399	(12,551)	5,848	30,185	(12,551)	17,634
	137,634	(12,551)	125,083	144,461	(12,551)	131,910

19. TRADE AND OTHER PAYABLES Current:	Group 2009 £	Group 2008 £	Company 2009 £	Company 2008 £
Trade payables	1,870,097	1,112,444	-	8,580
Other creditors and accruals	506,690	260,551	37,500	878,803
	2,376,787	1,372,995	37,500	887,383
Non-current:
Accruals	100,289	9,136	-	-
	100,289	9,136	-	-

Trade payables and other creditors comprise amounts outstanding for trade purchases and ongoing costs. The directors consider that the carrying amount of trade payables approximates to their fair value.

Non-current accruals relate to reverse lease premiums, which are credited to the income statement on a straight-line basis over the lease term.

20. EMPLOYEE BENEFITS

Pension plans

Defined contribution plans

The Group operates a defined contribution pension plan. The assets of the scheme are held separately from those of the Group in an independently administered fund. The amount charged to the income statement represents the contributions payable to the scheme in respect of the accounting period. Pension costs for the defined contribution scheme are as follows:

	2009	2008
	£	£
Defined contribution scheme	3,293	5,343

Share Based Payments

Share Options

Share options granted prior to the reverse acquisition are held by former employees of Felix Group PLC. Further share options were granted post reverse acquisition on 14 April 2008 to current directors of the enlarged group, Crawshaw Group PLC.

The share options in issue which all relate to ordinary shares of 5p and are to be settled by the physical delivery of shares are as follows

		Number of options at
Date	Exercise	1 February	Granted	Exercised	Lapsed	Number of
granted	price	2008	in period	in period	in period	options	Exercise Period
14 July 2003	250p	45,000	-	-	-	45,000	14 July 2003 to 13 July 2013
8 March 2004	187p	21,984	-	-	21,984	-	8 March 2004 to 21 January 2014
8 March 2004	187p	4,813	-	-	-	4,813	17 February 2005 to 16 February 2009
8 March 2004	1,000p	15,000	-	-	-	15,000	8 March 2005 to 7 March 2009
14 July 2006	619p	60,200	-	-	60,200	-	14 July 2006 to 13 July 2016
17 July 2006	619p	1,500	-	-	1,500	-	17 July 2006 to 16 July 2016
4 September 2006	619p	17,655	-	-	17,655	-	4 September 2006 to 3 September 2016
1 February 2007	237.5p	1,500	-	-	1,500	-	1 February 2007 to 31 January 2017
16 April 2007	400p	2,000	-	-	2,000	-	16 April 2007 to 15 April 2017
14 April 2008	42.5p	-	1,235,292	-	-	1,235,292	14 April 2008 to 12 April 2010

The expected volatility is wholly based on the historic volatility (calculated based on the weighted average remaining life of the share options), adjusted for any expected changes to future volatility due to publicly available information.

The fair value of the share appreciation rights at grant date of 14 April 2008 is determined based on the black scholes model. The model inputs were the share price of 42.5p, the exercise price of 42.5p, expected volatility of 43%, expected dividends of £Nil, a term of two years and a risk free rate of 5%. The fair value of the liability is remeasured at each balance sheet date and settlement date.

The total expense for the year recognised in relation to equity-settled share based payments is £54,892.

21. CAPITAL AND RESERVES

Reconciliation of movement in capital and reserves - Group

Balance at 1 February	Share capital £	Share premium £	Reverse acquisition reserve £	Capital contribution reserve £	Retained earnings £	Total equity £
2008	2,406,763	15,981,764	(18,175,942)	119,696	296,599	628,880
Total recognised income and expense	-	-	-	-	(964,723)	(964,723)
Share based payment	-	-	-	-	54,892	54,892
Issue of shares to effect reverse acquisition	1,316,000	-	489,263	-	-	1,085,263
Issue of shares for
Crawshaw Holdings
Limited preference shares	244,000	-	1,583,567	-	-	1,827,567
Proceeds from share issue	533,333	3,382,873	-	-	-	3,916,206
Cancellation of 0.9p deferred shares	(2,166,087)	(14,383,588)	16,549,675	-	-	-
Capital contribution	-	-	-	29,615	-	29,615
Balance at 31 January
2009	2,334,009	4,981,049	446,563	149,311	(613,232)	7,297,700

On 11 April 2008, the company acquired in a share for share exchange the whole of the ordinary share capital of Crawshaw Holdings Ltd. The reverse acquisition reserve arises on the accounting for the share for share exchange. Reserve acquisition accounting requires that Crawshaw Holdings Limited is treated as the acquirer and the company the acquired. A reverse acquisition arises which represents the difference between the issued equity instruments of Crawshaw Holdings Limited immediately before the share exchange and the equity instruments of the company along with the shares issued to effect the share for share exchange.

The intention of the reverse acquisition accounting is to present the group as having always existed except that the capital reserves presented in the group balance sheet are those of the company in all the years and not Crawshaw Holdings Ltd. As a result the reverse acquisition reserve arises at February 2007 that being the start of the earliest comparative period.

In conjunction with the acquisition, 10,666,667 ordinary shares were issued at 37.5p per share raising a total of £4,000,000. The premium arising on the issue on these shares was £3,382,873 net of issue costs of £83,794.

The capital contribution reserve arose in relation to the waiver of shareholder loan note interest in the current year (prior to the reverse acquisition) and prior period.

21. CAPITAL AND RESERVES (continued)

The capital of the company was by virtue of a written special resolution dated 10 April 2008 and with the sanction of an order of the High Court dated 21 July 2008 reduced by the cancellation of the 240,676,350 0.9p deferred shares leaving the number of issued shares as 46,680,194 5p ordinary shares.

By order of the court, the sum arising on the reduction of capital was transferred to a special reserve. Following confirmation from potential creditors the special reserve has been transferred to the profit and loss account by an order of the High Court dated 13 August 2008.

Reconciliation of movement in capital and reserves - Company

	Share capital	Share premium	Capital reduction reserve	Merger reserve	Retained earnings	Total equity
	£	£	£	£	£	£
Balance at 1 February 2008	2,406,763	15,981,764	-	-	(16,522,579)	1,865,948
Issue of shares	533,333	3,382,873	-	-		3,916,206
Total recognised income and expense	-	-	-	-	(1,086,688)	(1,086,688)
Cancellation of 0.9p deferred shares	(2,166,087)	(14,383,588)	16,549,675	-	-	-
Transfer	-	-	(16,549,675)	-	16,549,675	-
Issue of shares in connection with reverse acquisition	1,560,000	-	-	10,140,000	-	11,700,000
Balance at 31 January 2009	2,334,009	4,981,049	-	10,140,000	(1,059,592)	16,395,466

10,666,667 ordinary shares were issued in order to raise funds at a premium of 32.5p per 5p share, raising £4m. The premium arising on the issue on these shares was £3,382,873, net of issue costs of £83,794. 31,200,000 5p shares were issued in connection with the reverse acquisition. The value of the shares issued was £11,700,000 (37.5p per 5p share), which represented the market value at that date.

The original 240,676,303 1p shares of Crawshaw Group PLC were increased to 240,676,350 via the issue of 47 additional shares. These shares were then split into 240,676,350 0.1p shares and 240,676,350 0.9p deferred shares. The 0.1 p ordinary shares were swapped for 5p ordinary shares via a 50:1 share exchange, leaving 4,813,527 5p ordinary shares and 240,676,350 0.9p deferred shares. The additional 31,200,000 shares issued by Crawshaw Group PLC and 10,666,667 shares issued to raise new funds left a total of 46,680,194 issued ordinary 5p shares and 240,676,350 0.9p deferred shares.

The capital of the company was by virtue of a written special resolution dated 10 April 2008 and with the sanction of an order of the High Court dated 21 July 2008 reduced by the cancellation of the 240,676,350 0.9p deferred shares leaving the number of issued shares as 46,680,194 5p ordinary shares.

By order of the court, the sum arising on the reduction of capital was transferred to a special reserve. Following confirmation from potential creditors the special reserve has been transferred to the profit and loss account by an order of the High Court dated 13 August 2008.

21. CAPITAL AND RESERVES (continued) Share capital - Group and Company Authorised	Number of shares	2009 £	2008 £
Ordinary shares of 5p	96,678,257	4,833,913	-
Ordinary shares of 1p	500,000,000	-	5,000,000
		4,833,913	5,000,000
Allotted, called up and fully paid
Ordinary shares of 5p	46,680,194	2,334,009	-
Ordinary shares of 1p	240,676,350	-	2,406,763
		2,334,009	2,406,763
Total issued share capital:
Included in equity	46,680,194	2,334,009	2,406,763
		2,334,009	2,406,763

The company was incorporated as Felix Group PLC and had an authorised share capital of £5,000,000 representing 500,000,000 1 p ordinary shares.

The company changed its name to Crawshaw Group PLC on 11 April 2008.

On 11 April 2008, the authorised share capital was decreased to £4,833,913 following the reverse acquisition of Crawshaw Group PLC by Crawshaw Holdings Limited. The shares were reclassified as 96,678,257 ordinary shares of 5p each.

All issued shares are fully paid. The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at the meetings of the company.

22. LOANS AND BORROWINGS - GROUP	2009 £	2008 £
Non-current liabilities
Medium term loan	1,110,000	2,307,861
Mortgage	840,000	840,000
Loan notes	-	3,002,690
Redeemable preference shares of £1 each	-	1,827,527
	1,950,000	7,978,118
Current liabilities
Current portion of secured bank loans	-	713,335
Current portion of loan notes	2,252,018	-

As part of the acquisition of Crawshaw Holdings Limited on 11 April 2008, the 1,827,567 preference shares were acquired. The liability in the current year is now due to Crawshaw Group Plc, hence eliminated on consolidation.

The holders of preference shares are entitled to attend all general meetings with no right to vote. They do not have any rights to any granted dividend. The shares are redeemable on an exit, which is defined as a sale, a disposal followed by the winding-up of the company or a listing. A sale is considered to be within the control of the shareholders but not within the control of the company. Therefore as the Group's

preference shares are mandatory redeemable on a takeover, the are classed as a liability. In the event of a winding up of the preference shareholders rank above other holders of any other share (but after payment of the Group's debts and liabilities).

Terms and debt repayment schedule
	Nominal	Year of		Carrying
	interest rate	maturity	Fair value	amount
			£	£
Mortgage	LIBOR+1.5%	2023	840,000	840,000
Loan notes	5%	2009	2,401,329	2,252,018
Bank loan	LIBOR+1.5%	2010	1,110,000	1,110,000
			4,351,329	4,202,018

 

LOANS AND BORROWINGS - GROUP (continued)

The following liabilities disclosed under bank loans and loan notes are secured by fixed and floating charges over the assets of the Group.

	2009 £	2008 £
Non-current liabilities
Medium term loan	1,110,000	2,307,861
Mortgage	840,000	840,000
	1,950,000	3,147,861
Current liabilities
Current portion of secured bank loans	-	713,335
The principle features of the loans are as follows:

A loan of £1,110,000 was taken out in two tranches £500,000 on the 15 January 2009 and £610,000 on 30 January 2009, both sums carry an interest rate of LIBOR +1.5%.

A mortgage of £840,000 against freehold property was taken out on the 21 May 2008 over a 15 year period at a rate of LIBOR +1.5%. The mortgage is repayable over the final 10 years of the 15 year period, with interest only payments due during the first five years.

(c) Loan notes of £2,252,018. The loan notes were taken out on 16 April 2007 at a value of £3,002,690. Repayments were made on 1 August 2008, excluding interest due up to 11 April 2008 which was waived by the loan notes holders and totalled £29,615 in the current year (1 February 2008 to 11 April 2008). This has been treated as a capital contribution from the shareholders in the year (see note 21). The loan notes carry an interest rate of 5%. Repayments of £750,672 were made during the year. Loan notes of £1,000,000 were converted into equity share capital during February 2009 (See note 29).

23. FINANCIAL INSTRUMENTS

The Group's principal financial instruments comprise loans and borrowings, cash and trade creditors. The main purpose of these financial instruments is to raise finance for the Group's operations.

The main risks arising from the Group's financial instruments are interest rate risk, liquidity risk and credit risk. The board reviews and agrees policies for managing each of these risks and they are summarised below.

  23. FINANCIAL INSTRUMENTS (continued) 

Interest rate risk

The Group's exposure to market risk for changes in interest rates relates primarily to the Group's long ­term debt obligations.

The Group has not currently entered into any steps to mitigate its risk to variability in interest rates.

Credit risk

The Group's principal financial assets are cash and receivables. The Group's credit risk is primarily attributable to trade receivables. Trade receivables are included in the balance sheet net of doubtful receivables, estimated by the Group's management based on prior experience and their assessment of current economic conditions.

At the balance sheet date the Directors consider there to be no significant credit risk.

Liquidity risk

The Group's objective is to maintain a balance between continuity of funding and flexibility through the use of cash and bank loans. Prior to the acquisition Crawshaw Butchers Limited was increasingly cash-generative and had no external loans and borrowings. This trend is forecast to continue in the future subject to levels of capital expenditure.

Effective interest rates

In respect of income-earning financial assets and interest-bearing financial liabilities, the following table indicates their effective interest rates at the balance sheet date and the periods in which they mature or, if earlier, are repriced.

Financial Instrument	Effective Interest Rate	< 1 year	1 to < 2 years	2 to < 5 years	5 years and over
		£	£	£	£
Cash	-	1,463,545	-	-	-
Loans	3.19%	-	1,110,000	-	840,000

Sensitivity analysis

In managing interest rate risks the Group aims to reduce the impact of a general increase of one percentage point in interest rates would have an impact on consolidated earnings.

At 31 January 2009, it is estimated that the full period impact of a general increase of one percentage point in interest rates would decrease the Group's profit before tax by approximately £20,000.

  

24. CAPITAL MANAGEMENT

The Group's objectives are to safeguard its ability to continue as a going concern providing returns to shareholders, through the optimisation of the debt and equity balance, and to maintain a strong credit rating and headroom. The Group manages its capital structure and makes appropriate decisions in light of the current economic conditions and strategic objectives of the Group.

A key objective of the Group's capital management is to maintain compliance with the covenants set out in the bank facility.

Throughout the year, the Group has complied with this policy.

There has been no change in the objectives, policies or processes with regards to capital management during the years ended 31 January 2009 and 31 January 2008.

25. CAPITAL COMMITMENTS

	2009	2008
	£	£
Contracts placed for future capital expenditure not provided in the financial statements	540,000	-

26. OPERATING LEASES

Non-cancellable operating lease rentals are payable as follows:

	Group		Company
	2009	2008	2009	2008
	£	£	£	£
Less than one year	556,807	318,082	-	-
Between one and five years	1,799,158	710,258	-	-
More than five years	3,393,649	1,062,769	-	-
	5,749,614	2,019,109	-	-

The Company leases a number of warehouse and factory facilities under operating leases. Land and buildings have been considered separately for lease classification. During the period £536,360 was recognised as an expense in the income statement in respect of operating leases.

27. RELATED PARTIES

Group

Richard Rose was Chairman of both Felix Group PLC and Crawshaw Group Limited at the time of the reverse acquisition therefore this acquisition is classified as a related party transaction under the AIM rules. Details of this transaction are provided in note 4.

Transactions with key management personnel and directors

Key management personnel compensation

See note 8.

Other transactions

The Company lease the property owned by Colin Crawshaw Pension Scheme for factory facilities and paid rental fee of £13,000 in 2009 (2008: £12,875).

Other related party transactions

The aggregate value of transactions and outstanding balances relating to entities over which they have control or significant influence were as follows:

	Transaction value
	2009	2008
	£	£
Purchase of services
Other related parties	61,309	74,803
Other income
Other related parties – management fee	12,000	6,000
Other related parties – dividend	13,414	18,852

	Balance outstanding
	2009	2008
	£	£
Payable
Other related parties	8,026	–
Receivable
Other related parties	27,746	13,832

The aggregate value of transactions and outstanding balances relating to entities over which they have control or significant influence were as follows:

		Transaction value
	Note	2008
		£
Purchase of services
Other related parties		52,882
Other income
Other related parties – management fee	4	6,000
Other related parties – dividend		18,852
		Balance outstanding
		2008
		£
Payable
Other related parties		–
Receivable
Other related parties		13,832

28. PRINCIPAL SUBSIDIARY UNDERTAKINGS

At 31 January 2009 Crawshaw Group PLC had the following principal subsidiary undertakings:

Crawshaw Holdings Limited - United Kingdom - Intermediate Holding Company Crawshaw Butchers Limited - United Kingdom - Retail Butchers

Chestnut Prospects Limited - United Kingdom - Dormant

The shareholdings were 100% of the subsidiary undertakings' ordinary and preference shares. Each of the subsidiaries is included in the consolidated financial statements.

29. POST BALANCE SHEET EVENTS

Given the current economic climate and its general impact on the costs and restrictions associated with borrowings the Board decided that it would be prudent to reduce the Group's dependency on bank borrowings and provide the Group with greater financial flexibility in the future. Therefore, two weeks after the reporting date, the Board finalised the conversion of £1 m of debt owed to the loan note holders into shares issued by the Company. Added to this, the scheduled loan note repayment was also made in February of £602k and therefore by the end of February the Company had reduced the debt position owing to the loan note holders to £650k which is due to be repaid in June 2009.

The preliminary results have been prepared in accordance with International Financial Reporting Standards ("IFRS") and IFRIC interpretations as adopted by the EU and with those parts of the Companies Act 1985 applicable to companies reporting under IFRS. The preliminary announcement does not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985. This announcement has been agreed with the company's auditors for release.

A copy of the full annual report will be sent to all shareholders shortly and will be available from the company's registered office : Unit 15 Bradmarsh Business Park, Bow Bridge Close, Rotherham, S60 1BY, shortly. It will also be published on the Company's website www.crawshawgroupplc.com.

The statutory accounts for the period ended 31 January 2008, which have been delivered to the Registrar of Companies, included an audited report which was unqualified and which did not contain a statement under Section237(2) or (3) of the Companies Act 1985.

For further information please contact:

Crawshaw Group PLC

Lynda Sherratt, Company Secretary,

01709 369 602

Investec Investment Banking

James Grace/Martin Smith

0207 597 5970

ENDFR UASRRKBRVAUR