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Proforma Consolidated Income Statement 

for the year ended 30 September 2019

The statutory reported Consolidated Income Statement and associated notes for the 12 months to 30 September 2019 can be found on the Consolidated Income Statement page.

The proforma Consolidated Income Statement for the 12 months to 30 September 2018 (comparative year) has been provided as additional information to the 9 month to September 2018 statutory reported Consolidated Income Statement, as a requirement to illustrate the performance of the business on an annualised basis given the importance of the fourth calendar quarter. This information is unaudited and does not form part of the audited annual Financial Statements. The reconciliation of the comparative year of 2018 between reported and as outlined in the table below is on the following page.

The proforma Consolidated Income Statement for the 12 months to 30 September 2017 (shown below) and associated notes has also been provided as these figures are represented also in our Annual Report.

Selected income statement information has been extracted from the Group’s management accounts for the comparative year of 2018 and 2017. Further notes to show the segmental analysis and certain assumptions used to calculate the proforma income statements are outlined in the below Notes section.

2019

€000 Notes (for 2018 only) Statutory reported 12 mth Sept 2019 Proforma 12 mth Sept 2018
Revenue   312,419 282,397
Cost of goods sold   (164,600) (144,234)
Gross profit   147,819 138,163
Selling expenses   (61,299) (57,731)
Other operating expenses   (31,644) (30,069)
Impairment loss on trade and other receivables   (430) (1,311)
Share of loss of equity-accounted investees, net of tax 3 (536) (386)
Operating profit   53,910 48,666
Exceptional expense 2 (11,693) (14,900)
Operating profit after exceptional expenses   42,217 33,766
Finance income   312 291
Finance costs   (4,299) (3,396)
Profit before tax   38,230 30,661
Income tax expense 4 (10,868) (12,331)
Exceptional tax credit/(expense) 2 948 (4,700)
Total income tax expense   (9,920) (17,031)
Profit for the period   28,310 13,630
Attributable to:      
Equity holders of Parent   28,310 13,630
Earnings per share, (€cents) attributable to equity holders of the Parent 7    
Basic   14.26 6.86
Diluted   14.17 6.83

 

2018

€000 Notes Statutory reported 9 mth Sept 2018 Add: Oct - Dec 2017 Proforma 12 mth Sept 2018
Revenue   193,766 88,631 282,397
Cost of goods sold   (100,374) (43,860) (144,234)
Gross profit   93,392 44,771 138,163
Selling expenses   (42,541) (15,190) (57,731)
Other operating expenses   (21,968) (8,101) (30,069)
Impairment loss on trade and other receivables   (501) (810) (1,311)
Share of loss of equity-accounted investees, net of tax 3 (166) (220) (386)
Operating profit   28,216 20,450 48,666
Exceptional expense 2 - (14,900) (14,900)
Operating profit after exceptional expenses   28,216 5,550 48,666
Finance income   249 42 291
Finance costs   (1,938) (1,458) (3,396)
Profit before tax   26,527 4,134 30,661
Income tax expense 4 (7,244) (5,087) (12,331)
Exceptional tax expense 2 - (4,700) (4,700)
Profit (loss) for the period   19,283 (5,653) 13,630
Attributable to:        
Equity holders of Parent   19,283 (5,653) 13,630
Earnings per share, (€cents) attributable to equity holders of the Parent 7      
Basic   9.71   6.86
Diluted   9.66   6.83

 

2017

€000 Notes Statutory reported 12 mth Dec 2017 Less: Oct - Dec 2017 Add: Oct - Dec 2016 Proforma 12 mth Sept 2017
Revenue   269,837 (88,631) 78,583 259,789
Cost of goods sold   (137,394) 43,860 (43,407) (136,941)
Gross profit   132,443 (44,771) 35,176 122,848
Selling expenses   (56,044) 15,190 (14,048) (54,902)
Other operating expenses   (29,629) 8,101 (3,589) (25,117)
Impairment loss on trade and other receivables   (1,658) 810 (207) (1,055)
Share of loss of equity-accounted investees, net of tax 3 (331) 220 - (111)
Operating profit before exceptional expenses   44,781 (20,450) 17,332 41,663
Exceptional expenses 2 (14,900) (14,900) - -
Operating profit   29,881 (5,550) 17,332 41,663
Finance income   681 (42) 112 751
Finance costs   (3,253) 1,458 (614) (2,409)
Profit before tax   27,309 (4,134) 16,830 40,005
Income tax expense 4 (11,280) 5,087 (4,612) (10,805)
Exceptional tax expense 2 (4,700) 4,700 - -
Profit for the period   11,329 5,653 12,218 29,200
Attributable to:          
Equity holders of the Parent   11,329 5,653 12,218 29,200
Earnings per share, (€cents) attributable to equity holders of the Parent 7        
Basic   5.72     14.74
Diluted   5.68     14.64

 

Notes

The following notes provide detail on further assumptions applied in deriving the financial information presented in the proforma Consolidated Income Statement:

1. Accounting policies and critical areas of judgement

The accounting policies of the Group, as outlined on pages 128 to 139, are applied to the statutory period as presented within the Financial Statements and accompanying notes. The financial information provided for the proforma 12 month period has been derived from this information by extracting selected information from the Group’s quarterly consolidated management accounts for the quarters ended December 2016 and December 2017.

Revenue: proforma revenue has been extracted from source accounting records without adjustment. A certain degree of estimation is applied in determining volume rebate deductions from revenue. These estimates are revised each month such that no further adjustment to revenue is necessary for the purposes of the proforma revenue. Revenue rebate adjustments were reviewed, to the extent significant, at both the December 2016 and December 2017 year-end and no further adjustment to revenue was necessary for the purposes of proforma revenue figures.

In the context of the Group’s critical accounting judgements and key sources of estimation uncertainty, described in note 4 to the Financial Statements, the following considerations were made:

  1. Taxation: a thorough review of tax risks and exposures has been carried out in June and December of each reporting period, and again as at September 2018. A review of significant judgements and estimates made in the quarterly periods ended December 2016 and December 2017 was undertaken to identify any item that would have had a significant impact on September balances. No adjustments were determined to be necessary to the methodology applied as per note 4 below.
     
  2. Impairment of goodwill and indefinite-life intangible assets: annual impairment reviews were performed as at 31 December of each reporting period prior to 30 September 2018, and then as at 30 September 2018. The impairment charge recorded against goodwill in the year to 31 December 2017 has been included in the proforma financial information as an exceptional expense.
     

There are a number of other estimates and judgements made on a routine basis that are not considered significant for the Financial Statements taken as a whole. No adjustments have been made to September 2016 and September 2017 balances to reflect these.

2. Exceptional expenses

In the year to 31 December 2017, two non-cash exceptional items were expensed. The first was an impairment loss of €14.9m against the carrying value of goodwill in our Italian business. The second was a deferred tax charge of €4.7m resulting from amortisation on our Polish brands ceasing to be available.

3. Share of loss of equity-accounted investee

On 17 July 2017, as per the note on page 159, Stock invested in a 25% shareholding of Quintessential Brands Ireland Whiskey Limited (QBIWL). Information has been gathered from the management accounts of QBIWL for the years to September 2017 and September 2018 to provide information for the proforma years September 2017 and September 2018. No indicators of impairment were identified during the period since acquisition, and therefore the balances recognised in the proforma period represented only the share of loss for the relevant period. No adjustments were recorded to the fair value of contingent consideration during the period since investment.

4. Taxation

As the effective tax rates for the Group do not materially change year-on-year, for the period of October to December 2017, the effective tax rate (excluding exceptional tax expenses) has been assumed to be the same as for the reported rate for the year to December 2017, 26.7%. For the period of October to December 2016, the effective tax rate for the year to December 2016 of 27.4% has been assumed.

5. Adjusted EBITDA and Free cashflow

The Group defines Adjusted EBITDA as operating profit before depreciation and amortisation, exceptional items and the share of results of equity-accounted investees. A reconciliation from profit before tax per the proforma Consolidated Income Statement to Adjusted EBITDA is as follows:

2018

€000 Statutory Reported 9 mth Sept 2018 Add: Oct - Dec 2017 Proforma 12 mth Sept 2018
Operating profit 28,216 5,550 33,766
Exceptional expenses - 14,900 14,900
Share of loss of equity-accounted investees, net of tax 166 220 386
Depreciation and amortisation 7,466 2,845 10,311
Adjusted EBITDA 35,848 23,515 59,363
Adjusted EBITDA margin 18.5% 26.5% 21.0%

 

2017

€000 Statutory reported 12 mth Dec 2017 Less: Oct - Dec 2017 Add: Oct - Dec 2016 Proforma 12 mth Sept 2017
Operating profit 29,881 (5,550) 17,332 41,663
Exceptional expenses - (14,900) - (14,900)
Share of loss of equity-accounted investees, net of tax 331 (220) - 111
Depreciation, amortisation and exceptionals 26,112 (2,845) 3,103 26,370
Adjusted EBITDA 56,324 (23,515) 20,435 53,244
Adjusted EBITDA margin 20.9% 26.5% 26.0% 20.5%

 

The Group defines free cashflow as cash generated from operating activities (excluding income tax paid), plus the proceeds from the sale of property, plant and equipment and proceeds from the disposal of intangible assets less cash used for the acquisition of property, plant or equipment and for the acquisition of intangible assets. Adjusted free cashflow conversion is free cashflow as a percentage of Adjusted EBITDA.

2018

€000 Statutory reported 9 mth Sept 2018 Add: Oct - Dec 2017 Proforma 12 mth Sept 2018
Cash generated from operations 51,394 10,552 61,946
Payments to acquire property, plant and equipment (2,449) (3,385) (5,834)
Payments to acquire intangible assets (1,075) (756) (1,831)
Proceeds from sale of property, plant and equipment 33 - 33
Free cashflow 47,903 6,411 54,314
Free cashflow conversion 133.6% 27.3% 91.5%

 

2017

€000 Statutory reported 12 mth Dec 2017 Less: Oct - Dec 2017 Add: Oct - Dec 2016 Proforma 12 mth Sept 2017
Cash generated from operations 53,619 (10,552) 18,944 62,011
Payments to acquire property, plant and equipment (3,710) 3,385 (2,783) (3,108)
Payments to acquire intangible assets (1,376) 756 (5,595) (6,215)
Proceeds from sale of property, plan and equipment 98 - (28) 70
Free cashflow 48,631 (6,411) 10,538 52,758
Free cashflow conversion 86.3% 27.3% 51.6% 99.1%

6. Segmental analysis

2018

  Poland €000 Czech Republic €000 Italy €000 Other Operational €000 Corporate €000 Total €000
External revenue - 9 months reported 105,648 49,220 17,592 21,306 - 193,766
Add: Oct - Dec 2017 46,936 23,961 8,165 9,569 - 88,631
External revenue - proforma 12 months 152,584 73,181 25,757 30,875 - 282,397
Adjusted EBITDA - 9 months reported 27,477 13,601 1,739 2,846 (9,815) 35,848
Add: Oct - Dec 2017 12,894 8,007 2,662 2,856 (2,904) 23,515
Adjusted EBITDA - proforma 12 months 40,371 21,608 4,401 5,702 (12,719) 59,363

 

2017

  Poland €000 Czech Republic €000 Italy €000 Other Operational €000 Corporate €000 Total €000
External revenue - restated reported 147,496 67,712 26,224 28,405 - 269,837
Less: Oct - Dec 2017 (46,936) (23,961) (8,165) (9,569) - (88,631)
Add: Oct - Dec 2016 40,600 20,818 7,901 9,264 - 78,583
External revenue - proforma 12 months 141,160 64,569 25,960 28,100 - 259,789
Adjusted EBITDA - restated reported 37,738 21,818 6,317 4,899 (14,448) 56,324
Less: Oct - Dec 2017 (12,894) (8,007) (2,662) (2,856) (2,904) (23,515)
Add: Oct - Dec 2016 10,045 6,824 2,351 2,553 (1,338) 20,435
Adjusted EBITDA - proforma 12 months 34,889 20,635 6,006 4,596 (12,882) 53,244

7. Earnings per share

The proforma earnings per share has been calculated for the basic and diluted measures using the weighted average number of Ordinary shares in issue as follows:

  1. Proforma year to September 2018: as per the 9 month period ending on the same date and as per note 14 of the Financial
    Statements, as there were no material share schemes vesting or purchased into the employee benefit trust in the last quarter
    of 2017, nor did options outstanding materially differ over that period;
     
  2. Proforma year to September 2017: the weighted average number of shares as per December 2017 as there were no material
    share schemes vesting or purchased into the employee benefit trust in the last quarter of 2017 or 2016, nor did options
    outstanding materially differ over that period.

 

2018

  Statutory reported 9 mth Sept 2018 Proforma 12 mth Sept 2018
Basic earnings per share    
Profit attributable to the equity shareholders of the Company (€000) 19,283 13,630
Weighted average number of ordinary shares in issue for basic earnings per share (000) 198,690 198,690
Basic earnings per share (€cents) 9.71 6.86
Diluted earnings per share    
Profit attributable to the equity shareholders of the Company (€000) 19,283 13,630
Weighted average number of diluted ordinary shares adjusted for the effect of dilution (000) 199,606 199,606
Diluted earnings per share (€cents) 9.66 6.83
Adjusted basic earnings per share    
Profit attributable to the equity shareholders of the Company (€000) 19,283 13,630
Exceptional expenses (€000) - 14,900
Exceptional tax expense (€000) - 4,700
Profit attributable to the equity shareholders of the Company before exceptional expenses ad exceptional tax expense (€000)  19,283 33,230
Weighted average number of Ordinary shares in issue for adjusted basic earnings per share (000) 198,690 198,690
Adjusted basic earnings per share (€cents) 9.71 16.72

 

2017

  Statutory reported 12 mth Dec 2017 12 mth Dec 2017 (excluding exceptionals) Proforma 12 mth Sept 2017
Basic earnings per share      
Profit attributable to the equity shareholders of the Company (€000) 11,329 30,929 29,200
Weighted average number of ordinary shares in issue for basic earnings per share (000) 198,104 198,104 198,104
Basic earnings per share (€cents) 5.72 15.61 14.74
Diluted earnings per share      
Profit attributable to the equity shareholders of the Company (€000) 11,329 30,929 29,200
Weighted average number of diluted ordinary shares adjusted for the effect of dilution (000) 199,467 199,467 199,467
Diluted earnings per share (€cents) 5.68 15.51 14.64
Adjusted basic earnings per share      
Profit attributable to the equity shareholders of the Company (€000) 11,329 30,929 29,200
Exceptional expenses (€000) 14,900 - -
Exceptional tax expense (€000) 4,700 - -
Profit attributable to the equity shareholders of the Company before exceptional expenses ad exceptional tax expense (€000)  30,929 30,929 29,200
Weighted average number of Ordinary shares in issue for adjusted basic earnings per share (000) 198,104 198,104 198,104
Adjusted basic earnings per share (€cents) 15.61 15.61 14.74

8. Net debt and leverage

Net debt is defined as the net of balances reported as cash and cash equivalents, loans and borrowings and finance leases. Refer to note 30 in the Financial Statements for a calculation of net debt as at 30 September 2018.

Leverage, being net debt divided by 12 months adjusted EBITDA, is an important measure for the efficient capital structure of the Group at a point in time, to support organic and inorganic growth. This is also an important measure for both our banks and shareholders. Leverage at 30 September 2018 has therefore been calculated using the net debt value (€31,583,000) divided by proforma Adjusted EBITDA 2018 (€59,363,000) = 0.53.

As leverage has been reported as at 31 December 2017 (0.94), there is felt to be no need for a comparative calculation as at 30 September 2017.