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Registered number: 09927306










WALSTEAD GROUP LIMITED










ANNUAL REPORT AND CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

 
WALSTEAD GROUP LIMITED
 
 
 
COMPANY INFORMATION

 
Directors
J Camacho Fernandez (resigned 2 July 2024)
G Czech (appointed 1 April 2023)
S Gutheil (appointed 1 April 2023, resigned 30 September 2024)
N Johnson (appointed 1 June 2023, resigned 3 September 2024)
O Jones 
R Kingston 
R Marsh (resigned 1 March 2024)
B G Murray (appointed 3 September 2024)
D Read 
J Rothwell (resigned 31 March 2023)
M Scanlon 
I Southerland (appointed 5 August 2024)
P Utting 




Registered number
09927306



Registered office
18 Westside Centre
London Road

Colchester

Essex

CO3 8PH




Independent auditor
KPMG LLP
Chartered Accountants & Statutory Auditor

20 Station Road

Cambridge

CB1 2JD





 
WALSTEAD GROUP LIMITED
 
 
 
CONTENTS


Page
Chairman's Report
 
1 - 2
Group Strategic Report
 
3 - 17
Directors' Report
 
18 - 22
Directors' Responsibilities Statement
 
23
Independent Auditor's Report to the members of Walstead Group Limited
 
24 - 27
Consolidated Statement of Profit or Loss
 
28
Consolidated Statement of Other Comprehensive Income
 
29
Consolidated Balance Sheet
 
30 - 31
Consolidated Statement of Changes in Equity
 
32
Consolidated Statement of Cash Flows
 
33 - 34
Notes to the Consolidated Financial Statements
 
35 - 97
Company Balance Sheet
 
98 - 99
Company Statement of Changes in Equity
 
100
Notes to the Company Financial Statements
 
101 - 108

 
WALSTEAD GROUP LIMITED
 
 
 
CHAIRMAN'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

A change of direction
We will look back on 2023 as a watershed year for Walstead. In last year’s report I stated that opportunities for acquisitions were likely to increase and we would be actively looking for further strategic opportunities. We have been, and will continue to be, both very selective in the targets we have chosen to pursue and extremely selective in our deployment of our capital for inorganic growth, given the overall market backdrop.
When Walstead ventured out of the UK into mainland Europe in 2015 with the acquisition of Bertelsmann’s Spanish printing operations, we could see plenty of targets that could and, indeed, did propel us to become the European market leader we are today. However, since Covid and the war in Ukraine, there remain only one or two potential targets that could enhance our offering and add value to the company – and these may never be put up for sale at a suitable price. We are now setting our sights on quality businesses in the wider graphic industries space that offer growth prospects, can be scaled-up through selective investment, are well-managed, and generate strong cashflows. This will not be a fast-track strategy and it may not be until 2025 or beyond that we get a foothold in a new sector.
Market conditions in the European gravure commercial printing market remain especially challenging, as 3 sites were closed leaving only 11 in operation. Whilst some gravure volume transitioned to web offset production, it was insufficient to fill the latent web offset capacity in Continental Europe. 
 
Walstead’s 2023 performance was affected by wage inflation, interest rates increases in the Eurozone and in the UK – all compounded by a reduction in volume. However, we were able to part-mitigate these headwinds by selective restructuring across our manufacturing platform including the closure in late 2023 of one of the two ex-YM Group sites we inherited in 2022.
In April 2023, Walstead UK signed a five-year year contract with News UK to produce its weekend newspaper supplements. This substantial and prestigious contract required us to invest significantly in our Bicester facility which is now one of Walstead’s largest manufacturing sites. In 2022 and 2023 our UK business invested over €28 million in plant and machinery creating a market-leading manufacturing platform that will serve UK publishers, retailers and cataloguers for the foreseeable future.
On the acquisition front, in July 2023 we purchased the assets of GD Gotha Druck, a German-based printer of retail advertising flyers, which was subject to insolvency proceedings. The transaction involved Walstead purchasing certain of Gotha’s plant and machinery and its freehold property. This is our first manufacturing site in Germany, Europe’s largest print market; we hope it will enhance our prospects to increase revenue from existing and new German retail customers.

… and now the highlights of our financial performance in 2023
Overall, I would say we delivered a satisfactory result in a particularly challenging market.
In the 12 months to 31 December 2023 Walstead’s gross revenue was €582.0 million (
2022: €648.9 million). Net revenue¹ was €378.1 million (2022: €391.7 million). EBITDA (adjusted)¹ was €34.8 million (2022: €42.0 million). Operating loss was €0.8 million (2022: profit of €13.9 million) and operating profit (adjusted)¹ was €3.3 million (2022: €17.2 million). 
Cash and liquidity have always been a primary focus for Walstead management. Net debt¹ at 31 December 2023 increased by 44.3% to €80.5 million (
2022: €55.8 million) which comprised €65.0 million of external net debt¹ (2022: €36.0 million). At the year-end our external net debt leverage ratio¹ remained healthy at 1.9x (2022: 0.9x). 
Net cash inflow from operating activities in the year was €24.5 million (
2022: €38.8 million). Net current liabilities at 31 December 2023 were €57.9 million (2022: €30.2 million) of which €10.2 million (2022: €5.3 million) was due under revolving credit and factoring facilities. Further financial details and key performance indicators are provided in the Group Strategic Report in the next few pages. 
 
Page 1

 
WALSTEAD GROUP LIMITED
 
 
 
CHAIRMAN'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

The Group’s net capital expenditure in the year was €25.4 million (2022: €23.5 million) which markedly increased debt. Our planned capital expenditures from 2024 is substantially lower because the Group now has a well-invested manufacturing platform.
I would also like to mention Rhapsody, where revenue increased by 4% to €11.3 million. This business has been transformed from a traditional reprographics studio to a full-service digital production services agency with offices in London, Warsaw, Madrid, and Bosnia. We expect Rhapsody to continue growing at a heady pace and to deliver strong earnings in a growth market.

Aims and strategy 
Walstead continues to be a pre-eminent supplier of print for publishers, retailers, cataloguers, and brand owners. Our geographical reach and substantial printing and binding capability – the largest in Europe - demonstrate our commitment to our customers and our industry. Our strategy is to maintain or grow our market share in web offset printing and to acquire complementary and growing businesses that are market leaders in their individual sectors.

Current trading and developments: 2024

The year has started steadily for the Group, and we have continued in the usual way to do our best to improve service to customers while maintaining liquidity and profitability.
Unaudited results for the six months to 30 June 2024 show gross revenue down by 12.4% at €251.0 million 
(to 30 June 2023: €286.4 million) and net revenue down 4.3% at €170.0 million (to 30 June 2023: €177.7 million). As ever we remain vigilant of our balance sheet, as of 30 June 2024 we had total cash availability (bank balances plus facility headroom) of €49.9 million.
I can also report that in June 2024 we agreed the sale for two vacant freehold properties that have generated  proceeds of €22.6 million which will be applied to reduce our external net bank debt.
This year we have said farewell to Ron Marsh, our senior independent non-executive director, who joined us in 2016. Ron has used his many years of experience in similar businesses to provide acute counsel and help guide our decision making. We thank you, Ron, for your devotion and incite to the success of Walstead during these past years. 
¹ See page 109 for definitions of Alternative Performance Measures

And of course, our stakeholders …
Finally, I would like to record here my thanks to all my colleagues, employees, and Directors alike, for the magnificent way they continued to work in wholly unanticipated circumstances. Once again, we are particularly grateful for the diligent and dedicated efforts of our teams right across Europe to maintain a first-rate service to our customers. 
Our banks, finance providers and equity investors play an essential role in maintaining the progress of Walstead. We are grateful to them all. Equally, we are grateful to all our customers for continuing to use our services.

 

NameM Scanlon
Chairman

Date14 November 2024

Page 2

 
WALSTEAD GROUP LIMITED
 
 
 
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
 
Introduction
 
The Directors present the Group Strategic Report of Walstead Group Limited ("the Company") and its subsidiaries (together "the Group") for the year ended 31 December 2023.
Walstead is the largest commercial web offset printing business in Europe. Founded in 2008, the Group has completed over 10 acquisitions. It operates four territory-based divisions (Walstead United Kingdom, Walstead Iberia, Walstead Leykam and Walstead Central Europe) which together employ over 3,000 staff at 14 print manufacturing sites in the UK, Spain, Austria, Czech Republic, Slovenia, Poland and Germany. 
Walstead has 58 web offset presses and four gravure presses processing over 500,000 tonnes of paper annually. The Group specialises in printing high-volume advertising flyers and leaflets for major European retailers; and magazines, catalogues, supplements, brochures and newspaper supplements for publishers and brand owners. The Group also provides pre-media digital services through its Rhapsody division which has offices in London, Warsaw and Madrid. Further information on the Group can be found on the following websites:
www.walstead-group.com 
www.rhapsodymedia.com 

Strategy and objectives

The Group’s strategy is to continue to grow revenue and profits both organically and by acquisition in the European market, to leverage economies of scale in all aspects of operations, as well as to provide the widest possible geographic coverage to our customers. Due to the Group’s size, we can deliver economies of scale far beyond most competitors and this in turn delivers significant value to our shareholders.
Competition in the sector is fragmented with numerous small operators largely serving local markets. In addition to volume-related economies of scale, the Group is also able to leverage additional benefits through adopting best Europe-wide practices in production, distribution efficiencies through multiple production sites, and efficient routes to market through a co-ordinated sales strategy.
Walstead will continue to look for opportunities in the print supply chain, from pre-media to post-press services, from paper management to logistics, from digital to offset web printing. Our financial stability will continue to underpin day-to-day operations and support our growth.
The printing industry is evolving rapidly with certain markets being subject to increased competition from the digital media sector and this has resulted in a reduction in market size for certain product categories. Our strategy is to focus on markets where demand is strongest either because competition is weak or where end markets are most robust.

Principal risks and uncertainties
 
The Group’s risk management principals are that we only take risks relevant to our strategic goals and that those risks are balanced with proportionate reward. The senior management team identify and control risks through their weekly operational meetings and monthly board meetings. Further detail regarding financial risks can also be seen in note 33.
 
Page 3

 
WALSTEAD GROUP LIMITED
 
 
 
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Principal risks and uncertainties (continued)
The principal risks facing the Group include:


Risk
Description
Response
Market pressure
 
 
 
 
 
 
Failure to respond to competitive pressures in the market could lead to revenues and margins weakening.
 
 
 
 
 
The Group manages this risk by ensuring the quality of its products, by providing added value services to its customers, having fast response times not only in supplying products, but in handling all customer queries and by maintaining strong relationships with customers. The Group’s strategy is to focus on markets with the greatest longevity and where competition is weak.
Reliance on key suppliers
 
 
 
 
 
 
 
Supply disruption could impact customer satisfaction as an inability to print to schedule, leading to loss of revenue. 
 
 
 
 
 
The Group has processes in place to manage and monitor exposure to significant counterparties centrally and within the manufacturing sites; where we are exposed regarding specialised products, supplier and customer communication is at the heart of the process to ensure delivery is maintained. For all our key purchases we have relationships with alternative suppliers should there be a failure amongst any of the key suppliers.
Health and Safety
 
 
 
 
 
The Group’s business is subject to occupational health and safety rules. Failure to comply with occupational health and safety rules could lead to fines or monetary penalties being levied on the Group as well as injury to staff and employees.
Health and safety guidelines and training is in place across the group. Regular audits and updates and a review of near-misses is done on a monthly basis.
 
 
 
 
Reliance on key employees
 
The resignation of key employees and the inability to recruit people with the right expertise and skills could adversely affect the Group’s results.
Training programmes and succession planning reduce this risk so that we have continuity. Incentive programmes also assist in retaining staff.
 
Availability of finance
 
 
 
Inability to obtain finance to fund business needs could result in a shortage of cash to enable it to pay its debts as they fall due. 
 
Financing is obtained from a diversified range of sources and includes both secured and unsecured facilities. The availability of assets to provide security to lenders provides options for the Group to obtain financing at optimal rates.  
Exchange rate movements and interest rate increases
Movement in exchange rates could impact on profitability or result in a reduction to net assets. Increasing interest rates would increase the debt service requirements. 
 
Financing is obtained for each territory in its local currency so that assets are matched by its associated funding. A substantial proportion of the Group’s facilities have a fixed rate of interest minimising the impact on debt service if interest rates increase. 
 

Page 4

 
WALSTEAD GROUP LIMITED
 
 
 
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Principal risks and uncertainties (continued)

Risk
Description
Response
Pandemic
 
 
 
 
Another pandemic could result in disruption to our operational sites and / or customers / suppliers.
 
 
The Group has developed policies and procedures to allow safe working in our plants and minimise the risk of spreading disease. Whilst there have been some permanent changes to business practice, additional procedures will be re-instated as needed to minimise the interruption to operations. 
Increase in energy and raw material prices 
 
 
Increase in the cost of production may be difficult to pass on to the consumer in the short term and have impact on volumes produced. 
 
 
The Group works closely with its customers to manage the cost of production. It ensures that a high-quality service is maintained whilst passing on cost increases through the supply chain where necessary to maintain a viable business. Any impact on production volumes is carefully managed to maintain efficiencies across the group. 
Cyber breach
 
 
 
 
 
 
 
 
 
Major information security breach or cyber-attack could result in reputational damage, business interruption and litigation, as well as negative impact on customer relations including loss of confidence. Potential exposure to fines or prosecution (Data Protection Act). Developers could stop supporting ageing IT hardware creating risks to data security.
The risk of attack is continuous, and we look to minimise the risks with firewalls and up-to-date anti-virus protection systems. Group policies, staff training and data backup routines ensure high levels of protection. Data protection policies and practices are in place and regular updates are performed on IT systems used across the Group.
 
 
 
Equipment and system obsolescence
 
 
 
 
Spare parts for plant and machinery not being readily available could increase maintenance costs and result in production interruptions.
 
 
 
Engineering spares are held for critical components. Consistency of equipment across the group means many components are interchangeable and allow spares to be transferred between group companies where required. The group also continually review their IT systems and programmes, updating where appropriate to improve efficiencies and to ensure they are supported by external providers. 
Regulatory and legislative reporting changes
 
Failure to comply with all regulatory and legislative reporting requirements. 
 
 
In conjunction with the internal skills and knowledge within Walstead, the Group work with several partners that specialise in their respective fields and provide management with advice and support to ensure compliance. 

Page 5

 
WALSTEAD GROUP LIMITED
 
 
 
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
 
Corporate and social responsibility

Environmental, employee, social, community and human right matters

The Group’s performance depends largely on its managers and staff. The resignation of key employees and the inability to recruit people with the right expertise and skills could adversely affect the Group’s results. To mitigate these risks, the Group operates a training programme for its employees and provides incentives linked to the results that are designed to retain key personnel.
The Group has consistently sought to recruit and retain the best employees in order to provide good customer service, which is the foundation of the business.
The Group recognises the importance of understanding and controlling environmental impacts where possible. We aim to ensure our paper is sourced from sustainably and environmentally managed forests, and production waste materials are effectively recycled. Our printing processes aim to be as efficient as reasonably possible to minimise emission and other environmental impacts.
The Group is committed to working closely, and in a sustainable manner, with our suppliers and business partners. We consider our broader role within the community and look for opportunities where we can play a larger part in those communities.
The Group supports the principals laid out in the Universal Declaration of Human Rights; our major human rights impacts relate to colleagues, contractors, suppliers and our products.

Page 6

 
WALSTEAD GROUP LIMITED
 
 
 
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
 
Employee gender diversity
2023
2023
2022
2022
Male
Female
Male
Female
Directors
Directors of the Company
8
1
9
1
Directors of subsidiary companies not included in the above
16
1
10
1
24
2
19
2
Total senior managers other than Directors
Employees in other senior executive positions
37
3
34
2
Other employees of the Group
2,438
707
2,448
727
2,499
712
2,501
731

Fair review of the business and key performance indicators (KPIs)
 
A summary of the key financial results for the year to 31 December 2023 is set out in the tables below:

2023
2022
€'000
€'000

Financial highlights – Statutory measures


Revenue
581,997
648,876

Operating (loss)/profit
(756)
13,871

(Loss)/profit after tax
(12,129)
6,856

Net assets
82,754
93,271

The Group’s Directors use key performance indicators to measure progress in delivering the business model and creating sustainable shareholder returns. Whilst the above financial highlights reflect the results for the Group for 2023 and 2022, the below KPI’s provide alternative performance measures that are used by the Directors to analyse the business.
In the period under review the Group used the following key performance indicators:


2023
2022
€'000
€'000
Financial highlights - Alternative performance measures
EBITDA (adjusted)
34,764
41,976
EBITDA (adjusted) as a percentage of net revenue
9.2%
10.7%
EBITDA (adjusted) return on capital employed
19.3%
25.2%
External net debt to EBITDA (adjusted)
1.9x
0.9x
Added value per production employee
79.9
79.1

Page 7

 
WALSTEAD GROUP LIMITED
 
 
 
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
 
Fair review of the business and key performance indicators (continued)

2023 EBITDA (adjusted) ended at €34.8 million following a year of investment combined with lower volumes. Whilst an adequate performance, EBITDA (adjusted) was behind prior year primarily due to some incremental investments and associated one off costs to support long term contract wins during the year, and also further expand Walstead’s footprint in Europe.
The main investment came in the UK and Leykam divisions. 
In the UK, new equipment has been installed during the year to service a number of new long term contracts wins. The new presses are now running well, although installation did take longer than expected to complete and reach full efficiency, which has in turn resulted in some incremental start-up costs whilst also restricting capacity during the peak season in the latter part of 2023. Operational efficiencies have however subsequently much improved and the business is well placed to start 2024. 
At the beginning of the year, restructuring in Leykam allowed for a reduction in the Group’s fixed site costs with the closure of the Müllendorf facility. Utilising the spare space and capacity in other Leykam sites has enabled two presses to be moved with all production being transferred to alternative Walstead sites. All presses have now been relocated and are fully operational. Also in Leykam, from 1 July 2023 a newly formed subsidiary of the Leykam business, Walstead Gotha GmbH, acquired certain assets from the administrators of GD Gotha Druck und Verpackung in Germany including Plant & Machinery and the Freehold property. Whilst providing a foothold in Germany and opportunities for new customer relationships, this has also allowed the Group to offer an extended offering to existing customers. 
Input costs overall have reduced on prior year, and in particular the cost of paper. This has been a key factor in the reduction in Gross revenue, reducing by 10.3% year on year to €582.0 million 
(2022: €648.9 million) as the cost of paper is largely a pass through cost. Net revenue* by contrast (Gross revenue less paper costs) has only reduced by 3.5% on prior year mostly resulting from lower production volumes. Primarily because of carefully managed costs and Capacity, Added Value as a percentage of Net Revenue increased in the year to 56.4% up from 54.8% in 2022. Added value per production employee was broadly in line with prior year at €79.9k (2022: €79.1k)
Whilst the lower volumes have allowed for some cost mitigation, cost savings have not fully offset and as a result EBITDA (adjusted)* has decreased to €34.8 million 
(2022: €42.0 million). EBITDA (adjusted)* as a percentage of Net revenue* has declined slightly to 9.2% (2022: 10.7%)
Additional costs due to one off investments and one-off start up inefficiencies as noted above have impacted the Operating loss of €0.8 million, versus 2022 profit of €13.9 million. This includes an increase in depreciation of €3.9m following investment in the asset base, including investments to support long term contracts. Amortisation and impairment also increased by €1.3m primarily due to impairment of goodwill of €1.2m. Restructuring and other costs were higher by €0.7m.
Net finance costs increased by €1.7m, following higher interest rates and the increase in net debt (to finance the investment in assets, including the purchase of the assets of GD Gotha Druck). The overall result is a statutory loss before tax of €10.0 million compared to 2022 profit of €6.6 million.
 
Page 8

 
WALSTEAD GROUP LIMITED
 
 
 
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Cash generation from operating activities remained adequate at €24.5 million 
(2022: €38.8 million) with continued good management of working capital. Capital expenditure includes the investments in the GD Gotha assets (€10.6 million) and Iberia assets (€1.3 million) along with the installation of presses in the UK to support long term contracts. External net debt* increased to €65.0 million compared to €36.0 million in the prior year with new facilities primarily funding the investments. External net debt to EBITDA (adjusted) ratio* increased to 1.9x (2022: 0.9x) which whilst higher than prior year still remains relatively low. At the year-end cash and cash equivalents were €33.4 million and bank facility headroom was €33.6 million giving the Group a healthy €67.0 million of cash availability (2022: cash balances of €48.2 million and undrawn bank facilities of €33.8 million).
* See page 109 for definitions of Alternative Performance Measures

Future developments

As detailed in the Chairman’s report, 2024 has started satisfactory. Unaudited results for the six months to 30 June 2024 show gross revenue at €251.0 million (to 30 June 2023: €286.4 million) and net revenue at €170.0 million (to 30 June 2023: €177.7 million). See page 2 for further details.

Non-Financial and Sustainability Statement

Introduction
Walstead’s climate related financial disclosures for the purposes of section 414CB of the Companies Act 2006 are detailed below.  
Governance
Board oversight of climate-related risks and opportunities
The Board of Directors have ultimate oversight of the Groups strategy, including its approach to the effect of climate change on the Group’s business model.  The Board considers climate-related issues as part of its decision making, including in relation risk management, annual budgets and business plans.
ESG compliance is a regular discussion item at  Board meetings throughout the year and climate change is included in these discussions. 
The Group Energy Efficiency team, comprising members from the Board of Directors, Commercial, Procurement and the Group Health, Safety and Environment (“HSE”) team, have been delegated management of climate-related issues by the Board.  The Group Energy Efficiency team receives information about climate-related issues through activities such as internal briefings by members of the Executive management team and briefings from external advisors.  Feedback from the Group Energy Efficiency team on Walstead’s progress on climate change related matters, including progress against climate-related goals and targets, is provided to the Board of Directors regularly. As part of this oversight the Board reviews specific numerical KPIs as well as qualitive discussions with teams across the business monthly.
The Audit Committee serves as a partner to the Board, diligently monitoring the organisations risk exposure and risk appetites, including in relation to climate-related risks, to ensure they align with established thresholds.  Additionally, the Audit Committee provides an oversight function by reviewing the effectiveness of implemented risk management and control systems.  The Audit Committee is assisted in its oversight role by the Groups internal audit function, which undertakes bother regular and ad hoc reviews of risk management controls and procedures, including in relation to climate-related risks; the results of these reviews are reported to the Audit Committee.  The Chair of the Audit Committee reports to the Board on all matters within its duties and responsibilities, including any climate-related matters that were discussed.
 
Page 9

 
WALSTEAD GROUP LIMITED
 
 
 
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Management's role in assessing and managing climate-related risks and opportunities
The Group Energy Efficiency team overseas implementation of the Groups strategy in relation to climate change.
In addition, the Groups Executive management team monitors and assesses climate-related risks through its risk monitoring activities.  Further information on how management assesses and manages climate-related risks and opportunities is set out in the ‘Risk management’ disclosures below.
Strategy
Climate-related risks and opportunities over the short, medium and long term
Climate change poses several risks to the printing sector and is a principal risk (as part of overall ESG compliance) for the Group.
The Group has identified several specific climate-related risks and opportunities through a series of stakeholder interviews and desk-based research.  
This process resulted in a shortlist of key potential risks and opportunities for Walstead within different category areas, including transition risks associated with the transition to a lower carbon economy and physical risks arising from acute weather events or longer-term chronic changes to the climate.
Climate-related risks and opportunities were considered over the following time horizons: short term (less than two years), medium term (more than two years but less than ten years) and long term (greater than ten years).  The definition of each time horizon is broadly aligned to the Group’s medium term climate change targets for 2030.  Expert external advice was obtained to allocate each climate change target to an appropriate time horizon.  
Further information on the climate-related risks and opportunities potentially arising in the short, medium and long term is set out in the ‘Risks and opportunities’ section below. 
Impact of climate related risks and opportunities on Walstead business strategy and financial planning
Consideration of topics relating to climate change is a fundamental aspect of Walstead business model.  Through the work completed with sustainability partners Nero Carbon and Envirya, the Group was able to look at further reduction projects.
The climate-related risks and opportunities into business strategy has led to the Group to increase its investment on LED lighting and heat recovery, further lowering gas usage.  Walstead continues to invest in research and to implement new technologies that are expected to lower Walstead’s organisational Scope 1 and 2 emissions footprint.
Climate-related risks input into financial planning processes through the consideration of the potential carbon emissions footprint of existing and proposed operating projects and capital investment projects.
Climate-related factors are expected to have an impact on the financial performance in the short to medium term due to potentially increased operating costs and the potential for increased capital investment but present opportunities in the long term through reduced energy usage and reduced energy costs. There are a range of possible financial impacts arising from the climate related factors and these are monitored on an ongoing basis.
 
Page 10

 
WALSTEAD GROUP LIMITED
 
 
 
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Resilience climate change scenarios
Walstead utilises advanced printing technologies and upholds strict quality standards to ensure consistent, high-quality outputs across our extensive range of printing services.  This commitment to excellence extends to our sustainability initiatives, with efforts to reduce waste, minimise energy consumption and use environmentally friendly materials in its processes.  
We are closely following the evolving risks and opportunities arising from climate change for Walstead, positioning ourselves to capitalise on the increasing market demand for low carbon products and services.  Our scenario analysis indicates that short term impacts are manageable, with medium and long term risks being monitored and solutions being investigated.
Through ongoing forecasts and the reinforcement of mitigation strategies, we are confident of the resilience of our business and adaption efforts.  Our proactive actions exemplify our strong commitment to action and innovation, firmly embedding sustainability into our operations and business and financial planning. An analysis of the climate-related scenarios including key input assumptions and analytical method outputs and sensitivities have not been disclosed. Management continues to work on and refine analysis of multiple different climate related scenarios and expects to present these further in future disclosures.
Risk management
Process for identifying and assessing climate-related risks
The Board of Directors has ultimate responsibility for the identification of emerging and potential risks, including climate-related risks, and associated strategies to manage and mitigate such risks.
The Group has an internal risk register which considers emerging and principal risks related to the business, including climate-related risks, and determines their relative significance by reference to monetary impact, probability, maximum foreseeable loss, trend and mitigating actions.  The risk register is updated on a regular basis. and reviewed by the Audit Committee.  The Executive committee ultimately reports into the Board for further review and approval of the risk register.
Managing climate-related risks
The Board monitors the Groups risk management and internal control systems on an ongoing basis, supported by the Audit Committee, Executive Committee and Group Energy Efficiency team.
Where a risk is deemed to be sufficiently significant in terms of potential impact or likelihood, appropriate risk mitigation measures are sought, including with the assistance of third-party specialists where relevant.
The Chief Operating Officer has been delegated responsibility for managing specific climate related risks within the business, on a day to day basis.
Further information on the actions taken to manage and mitigate risks relating to climate change is set out in the ‘Risks and opportunities’ section below.
How processes for identifying, assessing and managing climate-related risks are integrated into Walstead's overall risk management
The Groups processes for identifying, assessing, and managing climate-related risks are fully integrated into the Groups overall risk governance framework, further details of which are set out in the ‘Risk management’ section above.
 
Page 11

 
WALSTEAD GROUP LIMITED
 
 
 
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Metrics and targets
Metrics used to assess climate-related risks and opportunities
The Group uses a wide range of climate-related metrics including GHG emissions (Scopes 1, 2 and 3 and emissions intensity), as well as consumption of electricity, natural gas, liquefied petroleum gas (“LPG”) and waste generation.
Walstead is also monitoring various key performance indicators (“KPIs”) to assess and manage climate-related risks and opportunities.  These include electricity, natural gas and LPG consumption and turnover intensity ratios.  These metrics and targets were selected based on their direct relevance to the Group’s operations and their ability to effectively track policy, market and technological changes.  
The Group does not have specific targets or KPIs, however it will strive to introduce best practice in this sector.  The Group has chosen to take the exemption to disclose against elements of the UK-CFD; primarily around the resilience of the business model, specific targets identified in relation to climate risk and KPIs in relation to these targets.
Whilst the Group is fully aware of the importance of climate related risk, the potential risks identified above are medium and long term in nature, coupled with a pessimistic scenario outlook. The Directors therefore views the impact upon the Group as very limited in the short to medium term. As a result of this, climate risk does not form a key part of the Group’s risk management process, although this will be continually reviewed as appropriate.
The appropriate Scope 1, 2 and 3 emissions in 2023 and 2022 as well as the methodology used to calculate GHG emissions is set out in the financial statements of the applicable subsidiaries.
Targets
At Walstead our commitment to sustainability encompasses several key focus areas: energy efficiency, waste reduction, carbon footprint monitoring and responsible sourcing.
Energy efficiency
Dedicated to reducing energy consumption across the printing sites.  Through the use of advanced technology and energy efficient equipment, the aim is to decrease overall energy usage by implementing improvements such as LED lighting, power factor correction, and energy heating systems.
Waste Reduction
Waste management and recycling are critical to Walstead’s sustainability goals.  With an aim to decrease the amount of waste sent to landfill by expanding recycling programs to include metal, aluminium plates, paper, cardboard, and plastic.  The goal is to recycle as much waste as possible to minimise environmental footprint.
Carbon Footprint Monitoring
Walstead uses ClimateCalc, an online carbon calculator, to monitor and reduce greenhouse gas emissions.  This tool helps track our carbon footprint across all three scopes, providing insights to guide their efforts to lower emissions and promote sustainable practices. 
Responsible Sourcing
Prioritising the use of environmentally responsible materials, such as Forest Stewardship Council™ (FSC®) and PEFC-certified paper. By sourcing these sustainable materials, it supports responsible forest management and contributes to environmental objectives. 
 
Page 12

 
WALSTEAD GROUP LIMITED
 
 
 
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Certification
Walstead is certified to ISO 9001, ISO 14001, and ISO 45001, internationally recognised standards that demonstrates our commitment to quality management, environmental responsibility, and occupational health and safety.
 
ISO 9001: A standard for quality management systems (“QMS”), ensuring processes are efficient, consistent, and customer-focused.  It requires a commitment to continuous improvement and customer satisfaction, emphasising a systematic approach to managing quality across all aspects of the Group’s operations.

ISO 14001: A standard to set the framework for environmental management systems (“EMS”), providing guidance in reducing environmental impact while complying with legal requirements.  This standard helps identify, monitor, and control potential environmental risks and promote sustainability.

ISO 45001: An international standard for occupational health and safety management systems. It focuses on creating a safe and healthy workplace by identifying and managing risks, reducing workplace hazards, and fostering employee well-being. 

Risks and opportunities
In reviewing the possible risks and opportunities facing Walstead because of climate change a series of interviews were held with a range of stakeholders.  This process was established to determine perceptions around climate change and Walstead’s business model.
Through a mix of desk-based research and key stakeholder interviews, a number of shortlists have been developed of key potential risks and opportunities for Walstead, as shown below.
 
Risks
Opportunities
Time horizon
Increase in climate consciousness amongst customers and investors.  Potential loss of finance, trust and brand value if climate-related matters are not addressed.  Reduced market demand for emissions intensive products.  The use of paper, ink and energy intensive printing processes can be perceived as less environmentally friendly.
 
 
Collaborating with a net-zero committed printer enhances our customers' brand image, showcasing their dedication to environmental responsibility and attracting eco-conscious consumers.
 
Reducing carbon footprint opens new markets to explore.  Changing perception of the business giving opportunity to enhancer reputation through responsible actions.  
2030-2050
 
 
 
 
 
 
 
 
 
 
Lack of sustainable supply chain.  Risk of using environmentally unfriendly suppliers impacting current and future business.  Potential loss of finance, trust and brand value if climate related matters are not addressed.
Build resilience amongst the supply chain.  
 
Comprehensive review of all suppliers to ensure credentials and reduction targets are aligned with the business.  
2030-2050
 
 
 
 

Page 13

 
WALSTEAD GROUP LIMITED
 
 
 
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Risks and opportunities (continued)

Risks
Opportunities
Time horizon
Un-sustainable printing practises and failure to future-proof operations
 
 
 
 
 
 
 
 
 
 
 
 
 
As regulations and market demand shift towards sustainability it is expected that there will be increased demand for low carbon products and services.  
 
Walstead are investigating a number of eco-friendly processes to ensure our customers are ahead of the curve, avoiding potential future costs or disruptions.  
 
Opportunities include using carbon balanced paper and investigating inks that have lower volatile organic compounds (‘VOCs’).
2030-2050
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Increase in energy usage and costs from use of inefficient technology.  Inability to change will inevitably result in higher future energy usage and costs.
 
 
 
 
 
 
 
 
 
 
 
 
The printing business is energy intensive.  The adoption of low-emission energy sources is expected to reduce energy costs and carbon footprint.
 
Walstead is dedicated to reducing energy consumption across the printing sites.  Printing presses aim to be as efficient as reasonably possible to minimise emission and environmental impacts.  
 
Using advanced technology and energy efficient equipment, the aim is to decrease overall energy usage by implementing improvements such as LED lighting, power factor correction, and energy heating systems.
2030-2050
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Page 14

 
WALSTEAD GROUP LIMITED
 
 
 
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
 
Directors' statement of compliance with duty to promote the success of the Group
 
This statement, which forms part of the Group Strategic Report, is intended to show how the Directors have approached and met their responsibilities under Section 172(1) (a) to (f) of the Companies Act 2006 (“Section 172(1)”) during the period under review.  As required by Section 172(1), the Directors consider, both individually and together, that they have acted in the way they consider, in good faith, would be most likely to promote the success of the Group for the benefit of its members as a whole, having regard to its stakeholders and the matters set out in Section 172(1).  In doing this, the Directors must have regard amongst other matters, to; 
a) The likely consequences of any decision in the long term;
b) The interests of the Group’s employees;
c) The need to foster the Group’s business relationships with suppliers, customers and others;
d) The impact of the Group’s operations on the community and the environment;
e) The desirability of the Group maintaining a reputation for high standards of business conduct; and
f) The need to act fairly between members of the Group.
The Board receives suitable training and briefings on Directors’ duties and updates in relation to corporate governance developments and stakeholder engagement.  New Directors appointed to the Board receive tailored, individual briefings on their duties and obligations as part of their induction.
The following paragraphs, together with the Corporate and Social Responsibilities, as shown in the Group Strategic Report, summarise how the Directors fulfil their duties:
(a) The likely consequences of any decision in the long term;
 
The Board recognises that decisions taken today will affect the long-term success and sustainability of the Group.  
The Board receives regular reports from across the business on performance, financial position, and the implementation of strategy, as well as updates on the market, relationships with customers, suppliers and other external influences.  These factors feed into discussions on strategy and setting priorities to ensure that the potential impact of decisions, particularly on the long term, are understood and considered.
The Board understands the potential impacts of the decisions it makes for its stakeholders, the environment and the communities in which the Group operates.
(b) The interests of the Group’s employees;
The Board recognise that the Group’s employees are fundamental to the success of the business and the delivery of its strategic ambitions.  The business depends on attracting, retaining, developing and motivating talented employees. 
The Board regularly consider and assess the implications of relevant decisions on employees and the wider workforce. 
The Group aims to be a fair and responsible employer in its approach to the pay and benefits its employees receive. The Group operates a training programme for its employees and provides incentives linked to the results that are designed to retain key personnel.
The health, safety and well-being of the Group’s employees is of paramount importance to the way the business operates. Each employee is provided with a comprehensive handbook on Safety in the Workplace as part of an induction programme. The Group has established a clearly defined policy of Health and Safety which meets all the requirements set out in the Health and Safety at Work Act 1974 or the relevant standards applicable to the country of operation.
 
Page 15

 
WALSTEAD GROUP LIMITED
 
 
 
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

The Board places considerable value on the involvement of its employees and has continued to keep them informed on matters affecting them as employees and on the various factors affecting the performance of the Group.  Employees are encouraged to participate and be involved in matters that affect their interests as employees.
(c) The need to foster the Group’s business relationships with suppliers, customers and others;
The Board recognises the importance of key stakeholders in the long-term success of the Group, reflected in the focus on effective engagement and building mutually beneficial relationships with suppliers, customers and other business partners. 
The Group engage regularly with these stakeholders, with interactions led by the day-to-day management team and with Board-level involvement where appropriate. The Board receive feedback on a variety of topics that indicate how these stakeholders have been engaged and uses this to continuously review its approach. The Group utilise multi-year contracts with both customers and suppliers to provide certainty to both parties and enable a longer-term strategic development of these relationships. 
The Group acting as an intermediary between stakeholders works with suppliers to develop products that meet the needs of the customers. Similarly, it proactively promotes new, innovative solutions that have been developed and tested by the Group and its suppliers. This creates an environment for continuous improvement providing improved quality, process efficiencies and reducing the environmental footprint of a product, ultimately benefitting all stakeholders.  
The Group continually assesses the priorities related to customers, suppliers and those with whom it does business, with the Board engaging with the business and management team on these topics.
(d) The impact of the Group’s operations on the community and the environment;
The Board are committed to driving down energy and carbon impacts and recognise that its business activities interact with the environment in a variety of ways.  The Board receive information on relevant topics to help them make decisions.  
The Group is committed to working closely, and in a sustainable manner, with key stakeholders.  The Group considers its broader role within the community and looks for opportunities where it can play a larger role in these communities.
The Board recognise the importance of understanding and controlling environmental impacts wherever possible.  The Group aim to ensure paper is sourced from sustainable and environmentally managed forests, and that production waste materials are effectively recycled.  The Group’s printing processes aim to be as efficiency as reasonably possible to minimise emission and other environmental impacts.
More information can be found in the ‘Non-Financial and Sustainability Statement’ section on page 9 - 14.
 
Page 16

 
WALSTEAD GROUP LIMITED
 
 
 
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

(e) The desirability of the Group maintaining a reputation for high standards of business conduct;
The Board is responsible for setting and monitoring the culture, values and reputation of the Group.  Maintaining a reputation for high standards of business conduct is an essential part of this responsibility.  
The Board periodically reviews and approves clear frameworks, such as the Group’s Code of Conduct and Integrity Principles, to ensure that high standards are maintained in the business and in the Group’s business relationships. The Code of Conduct sets out the principles of how the Board expect everyone who works with or represents the Group to behave and do business, with the Board leading by example.
The Board of Directors aim to behave responsibly and ensure that management operates the business in a responsible manner, operating within the expected high standards of business conduct and good governance and in doing so contribute to the delivery of the Group’s strategy and plans.
(f) The need to act fairly between members of the Group
After weighing up all relevant factors, the Board consider which course of action best enables delivery of the Group’s strategy and long-term interests, taking into consideration the effect on stakeholders.  In doing so, the Board act fairly between the Group’s members but are not required to balance the Group’s interests with those of other stakeholders. This can sometimes mean that certain stakeholder interests may not be fully aligned.
As a result of these activities, the Directors believe they have demonstrated compliance with their legal duty under Section 172(1) (a) to (f) of the Companies Act 2006.


This report was approved by the Board and signed on its behalf.



P Utting
Director
Date: 14 November 2024

Page 17

 
WALSTEAD GROUP LIMITED
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

The Directors present their Report and the audited financial statements for the year ended 31 December 2023.

Directors

The Directors who served during the year and up to the date of approval of this report were:

J Camacho Fernandez (resigned 2 July 2024)
G Czech (appointed 1 April 2023)
S Gutheil  (appointed 1 April 2023, resigned 30 September 2024)
N Johnson (appointed 1 June 2023, resigned 3 September 2024) 
O Jones 
R Kingston 
R Marsh (resigned 1 March 2024)
D Read 
J Rothwell (resigned 31 March 2023)
M Scanlon 
P Utting
B Murray (appointed 3 September 2024)
I Southerland (appointed 5 August 2024)

Dividends

The Directors do not recommend the payment of a dividend following their approval of the 2023 consolidated financial statements and no dividends were paid during the year (2022: €nil).

Political contributions

Neither the Group or Company made any political donations or incurred any political expenditure during the year (2022: €nil).

Forward-looking statements

Where the financial statements contain forward-looking statements, these are based on current expectations and assumptions and are subject to risk factors and uncertainties which the directors believe are reasonable. Accordingly, the Group and Company’s actual future results may differ materially from the results expressed or implied in these forward-looking statements. We do not undertake to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Engagement with employees

The Group places considerable value on the involvement of its employees and has continued to keep them informed on matters affecting them as employees and on the various factors affecting the performance of the Group. The Group encourages employee participation and involvement in matters that affect their interests as employees.
The Group has established a clearly defined policy of Health and Safety which meets all the requirements set out in the Health and Safety at Work Act 1974.

Disabled employees

The Group gives full consideration to applications for employment from disabled persons where the requirements of the job can be adequately fulfilled by a handicapped or disabled person. Where existing employees become disabled, it is the Group’s policy, wherever practicable, to provide continuing employment under normal terms and conditions and to provide training and career development and promotion to disabled employees wherever appropriate.
Page 18

 
WALSTEAD GROUP LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

 
Qualifying third party indemnity provisions

The Group and Company has made qualifying third-party indemnity provisions for the benefit of its Directors which remain in force at the date of this report.

Greenhouse gas emissions, energy consumption and energy efficiency action

The Group is committed to driving down our energy and carbon impacts. The Group recognises that its business activities interact with the environment in a variety of ways and its responsibility to help protect the environment. The Group is committed to: 
 
Continuous improvement in the environmental impact of its business activities;
Complying with relevant legal, customer and other third-party requirements; and
Adopting best practices to its activities wherever possible.

Our Streamlined Energy and Carbon Reporting (SECR) disclosure presents our carbon footprint across Scopes 1, 2 and 3 together with an appropriate intensity metric and our total energy usage. The data only includes information relating to Walstead Roche Limited and Walstead Bicester Limited as these are the only UK entities that meet the threshold for SECR reporting.
Operational scopes
Following the UK Government’s Environmental Reporting Guidelines, the Energy and Carbon Disclosure meets the requirements for large unquoted companies:
Scope 1 - Combustion of gasses on premises and combustion of fuels in vehicles. 
Scope 2 - Purchased electricity.
Scope 3 - Business travel in rental cars or employee-owned vehicles where the Company is responsible for purchasing the fuel.
Methodology
The services of Nero Carbon LTD (Nero) were employed to assist with the quantification of emissions.
Activity data were identified and entered into Nero's Greenhouse Gas (GHG) Calculator. Nero verified the activity data by auditing submitted evidence files, including utility statements and mileage records.
The methodology of Nero’s GHG Calculator conforms to the Greenhouse Gas Protocol Standards and has been independently verified to ISO14064-1. The 2023 UK Government GHG Conversion Factors for Company Reporting were used to calculate emissions and to convert activity data into a kWh-equivalent
Purchased electricity and the dual reporting approach (location-based and market-based) follows The GHG Protocol Scope 2 Guidance. Market-based emission factors were sourced from the Group's electricity suppliers' Fuel Mix Disclosures for the relevant periods.

Page 19

 
WALSTEAD GROUP LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Emissions overview
Absolute emissions in tonnes of carbon dioxide equivalent (tCO2e) is shown below:

2023
2022
tCO2e
tCO2e
Scope 1
Company Premises - Gaseous fuels, natural gas
7,327
7,211
Company Vehicles - Gaseous fuels, LPG
267
260
7,594
7,471
Scope 2
Location-based - Purchased electricity
7,661
7,160
Market-based - Purchased electricity*
14,162
14,228
7,661
7,160
Scope 3
Business Travel
-
-
-
-
Total emissions
15,255
14,631
Intensity Ratio
Turnover (£'000)
77,020
75,774
Ratio - kgCO2e per £1m of turnover
191,689
192,425

* Not included in totals

Page 20

 
WALSTEAD GROUP LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Energy overview
Energy consumption used to calculate the above emissions in (kWh) is shown below:

2023
2022
kWh
kWh
Scope 1
Company Premises - Gaseous fuels, natural gas
40,050,693
39,505,062
Company Vehicles - Gaseous fuels, LPG
1,162,214
1,132,226
41,212,907
40,637,288
Scope 2
Purchased Electricity
36,996,341
37,029,967
36,996,341
37,029,967
Scope 3
Business Travel
-
-
-
-
Total
78,209,248
77,667,255

Emissions summary
Total energy consumption in the reporting period was 78,209,248kWh, representing a 0.7% change from the previous year.
The consumption of this energy resulted in emissions of 15,255 tonnes of carbon dioxide equivalent (tCO2e). This was a 4% change compared to the previous year.
The highest emissions in the reporting period resulted from purchased electricity (7,661 tCO2e).
Energy efficiency action
During the year ended 31 December 2023, the Group made major investments in LED lighting, more energy efficient cold-water chillers and compressors. The compressors have also been used for heat recovery within our facilities, further lowering the gas usage. In August 2023 the Group engaged with an ESG consultant to gain a clear understanding of the Group's Carbon Footprint and look at further reduction projects, enabling the Company to measure the impact of the investments already made in the future.


Page 21

 
WALSTEAD GROUP LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
 
Matters covered in the Group Strategic Report

In accordance with Section 414c (11) of the Companies Act 2006, the Directors have chosen to include the following items in the Group Strategic Report: 

Principal activity and business review 
Principal risks and uncertainties 
Future developments

 
Disclosure of information to auditor

Each of the persons who are Directors at the time when this Directors' Report is approved has confirmed that:
 
so far as the Directors are aware, there is no relevant audit information of which the Group and the Company's auditor is unaware, and

the Directors have taken all the steps that ought to have been taken as a Director in order to be aware of any relevant audit information and to establish that the Group and the Company's auditor is aware of that information.

Post balance sheet events

In June 2024, the Group agreed the sale for two vacant freehold properties that have generated proceeds of €22.6 million.

Auditor

The auditor, KPMG LLPwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the Board and signed on its behalf.
 



P Utting
Director
Date: 14 November 2024
Page 22

 
WALSTEAD GROUP LIMITED
 
 
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023

The Directors are responsible for preparing the Group Strategic Report, Directors' Report and the consolidated financial statements, in accordance with applicable law.

Company law requires the Directors to prepare consolidated financial statements for each financial year. Under that law they have elected to prepare the consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the UK (UK-adopted IFRS) and the parent Company financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 (FRS 102).

Under company law the Directors must not approve the consolidated financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group for that period. In preparing each of the consolidated and parent Company financial statements, the Directors are required to:

select suitable accounting policies and then apply them consistently;

make judgements and estimates that are reasonable and prudent;

for the consolidated financial statements, state whether they have been prepared in accordance with IFRS as adopted by the UK, subject to any material departures disclosed and explained in the financial statements;

for the parent Company financial statements, state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

assess the Group and Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and

use the going concern basis of accounting unless they either intend to liquidate the Group or the Company or to cease operations, or have no realistic alternative but to do so.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the parent Company's transactions and disclose with reasonable accuracy at any time the financial position of the parent Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

Page 23

 
WALSTEAD GROUP LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF WALSTEAD GROUP LIMITED
 

Opinion

We have audited the financial statements of Walstead Holdings Limited (“the Company”) for the year ended 31 December 2023 which comprise the Consolidated Statement of Profit or Loss, Consolidated Statement of Other Comprehensive Income, Consolidated and Company Balance Sheet, Consolidated and Company Statement of Changes in Equity, Consolidated Statement of Cash Flows and related notes, including the accounting policies in note 4.
 
In our opinion:

the financial statements give a true and fair view of the state of the Group’s and of the parent Company’s affairs as at 31 December 2023 and of the Group’s loss for the year then ended;
the Group financial statements have been properly prepared in accordance with UK-adopted international accounting standards;
the parent Company financial statements have been properly prepared in accordance with UK accounting standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland; and;
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities are described below. We have fulfilled our ethical responsibilities under, and are independent of the Group in accordance with, UK ethical requirements including the FRC Ethical Standard. We believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinion.

Going concern

The Directors have prepared the financial statements on the going concern basis as they do not intend to liquidate the Group or the Company or to cease their operations, and as they have concluded that the Group and the Company’s financial position means that this is realistic. They have also concluded that there are no material uncertainties that could have cast significant doubt over their ability to continue as a going concern for at least a year from the date of approval of the financial statements (“the going concern period”).

In our evaluation of the Directors’ conclusions, we considered the inherent risks to the Group’s business model and analysed how those risks might affect the Group and Company’s financial resources or ability to continue operations over the going concern period.

Our conclusions based on this work:

we consider that the Directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate;
we have not identified, and concur with the directors’ assessment that there is not, a material uncertainty related to events or conditions that, individually or collectively, may cast significant doubt on the Group or the Company's ability to continue as a going concern for the going concern period.

However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgements that were reasonable at the time they were made, the above conclusions are not a guarantee that the Group or the Company will continue in operation.

Page 24

 
WALSTEAD GROUP LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF WALSTEAD GROUP LIMITED
 

Fraud and breaches of laws and regulations – ability to detect

Identifying and responding to risks of material misstatement due to fraud
To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud. Our risk assessment procedures included:

Enquiring of Directors as to the Group’s high-level policies and procedures to prevent and detect fraud and the Group’s channel for “whistleblowing”, as well as whether they have knowledge of any actual, suspected or alleged fraud.
Reading Board minutes.
Considering remuneration incentive schemes and performance targets for management.
Using analytical procedures to identify any unusual or unexpected relationships.

We communicated identified fraud risks throughout the audit team and remained alert to any indications of fraud throughout the audit. This included communication from the Group audit team to full scope component audit teams of relevant fraud risks identified at the Group level and request to full scope component audit teams to report to the Group audit team any instances of fraud that could give rise to a material misstatement at the Group level.

As required by auditing standards, and taking into account possible pressures to meet profit we perform procedures to address the risk of management override of controls and the risk of fraudulent revenue recognition at cut-off, in particular the risk that revenue is recorded in the wrong period and the risk that Group and component management may be in a position to make inappropriate accounting entries.

We did not identify any additional fraud risks.

In determining the audit procedures we took into account the results of our evaluation and testing of the operating effectiveness of the Group-wide fraud risk management controls.

We performed procedures including:

Identifying journal entries and other adjustments to test for all full scope components based on risk criteria  and comparing the identified entries to supporting documentation. These included those posted to unusual  accounts.
• For a sample of sales invoices raised close to year end, assessing whether the revenue has been             recognised in the correct period through inspection of relevant supporting documentation and the                underlying contractual terms.
• Assessing whether the judgments made in making accounting estimates are indicative of a potential bias.

Identifying and responding to risks of material misstatement related to compliance with laws and regulations
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience and through discussion with the Directors (as required by auditing standards) and discussed with the directors the policies and procedures regarding compliance with laws and regulations.

We communicated identified laws and regulations throughout our team and remained alert to any indications of noncompliance.

The potential effect of these laws and regulations on the financial statements varies considerably.

Page 25

 
WALSTEAD GROUP LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF WALSTEAD GROUP LIMITED
 

Firstly, the Group is subject to laws and regulations that directly affect the financial statements including financial reporting legislation (including related companies legislation), distributable profits legislation and taxation legislation and we assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.

Secondly, the Group is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation. We identified the following areas as those most likely to have such an effect: health and safety, data protection laws, anti-bribery, employment law, recognising the nature of the Group’s activities. Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the Directors and inspection of regulatory and legal correspondence, if any. Therefore, if a breach of operational regulations is not disclosed to us or evident from relevant correspondence, an audit will not detect that breach.

Context of the ability of the audit to detect fraud or breaches of law or regulation
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it.

In addition, as with any audit, there remained a higher risk of non-detection of fraud, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. Our audit procedures are designed to detect material misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to detect non-compliance with all laws and regulations.

Other information

The Directors are responsible for other information which comprises the Strategic Report, the Chairman’s Statement and the Directors’ Report. Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except as explicitly stated below, any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether, based on our financial statements audit work, the information therein is materially misstated or inconsistent with the financial statements or our audit knowledge. Based solely on that work:

we have not identified material misstatements in the other information;
in our opinion the information given in those reports for the financial year is consistent with the financial statements; and
in our opinion those reports have been prepared in accordance with the Companies Act 2006.

Matters on which we are required to report by exception

Under the Companies Act 2006, we are required to report to you if, in our opinion:

adequate accounting records have not been kept by the parent Company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent Company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors’ remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.

We have nothing to report in these respects.

Page 26

 
WALSTEAD GROUP LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF WALSTEAD GROUP LIMITED
 

Directors’ responsibilities

As explained more fully in their statement set out on page 23, the Directors are responsible for: the preparation of the financial statements and for being satisfied that they give a true and fair view; such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error; assessing the Group and 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 they 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

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 our opinion in an auditor’s report.  Reasonable assurance is a high level of assurance, but does not 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 aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.

A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities.

The purpose of our audit work and to whom we owe our responsibilities

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.

 

Michael Scrivener (Senior Statutory Auditor)

  

for and on behalf of KPMG LLP, Statutory Auditor
 
Chartered Accountants
  
20 Station Road
Cambridge
CB1 2JD
 
Date: 
14 November 2024

Page 27

 
WALSTEAD GROUP LIMITED
 
 
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AS AT 31 DECEMBER 2023

 
2023
2022
Note
€'000
€'000
Revenue
6
581,997
648,876
Cost of sales
(497,104)
(548,279)
Gross profit
84,893
100,597
Other operating income
7
15,264
11,720
Distribution expenses
(28,343)
(31,075)
Administrative expenses
(71,308)
(67,551)
(Loss)/profit on disposal of fixed assets
(1,262)
180
Operating (loss)/profit
8
(756)
13,871
EBITDA (adjusted)*
34,764
41,976
 
Depreciation
14
(28,098)
(24,192)
Amortisation and impairment
15
(2,135)
(801)
(Loss)/profit on disposal of fixed assets
(1,262)
180
Operating profit (adjusted)*
3,269
17,163
Restructuring and other costs
9
(4,025)
(3,292)
Operating (loss)/profit
(756)
13,871
Finance costs - net
12
(9,215)
(7,297)
(Loss)/profit before tax
(9,971)
6,574
Taxation
13
(2,158)
282
(Loss)/profit for the year from continuing operations
(12,129)
6,856

*See page 109 for the definition of alternative performance measures.
The notes on pages 35 to 97 form part of these financial statements.


Page 28

 
WALSTEAD GROUP LIMITED
 
 
 
STATEMENT OF OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
€'000
€'000

(Loss)/profit for the year

  
(12,129)
6,856

Other comprehensive income:

Items that will not be reclassified to profit or loss:
  

Actuarial (loss)/gain on severance provision
 21 
(377)
2,102

 
Items that may be reclassified to profit or loss:
  

Exchange differences on translation of foreign operations
  
1,989
(557)

Other comprehensive income for the year
  
1,612
1,545

Total comprehensive income
  
(10,517)
8,401


The notes on pages 35 to 97 form part of these financial statements.

Page 29

 
WALSTEAD GROUP LIMITED
 
 
CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2023

 
2023
2022
Note
€'000
€'000
Non-current assets
Property, plant and equipment
14
187,783
166,510
Intangible assets
15
31,831
32,214
Deferred tax assets
13
19,814
23,923
239,428
222,647
Current assets
Inventories
17
24,346
34,965
Trade and other receivables
18
36,269
40,713
Cash and cash equivalents
30
33,402
48,208
94,017
123,886
Total assets
333,445
346,533
Current liabilities
Trade and other payables
19
(118,569)
(127,085)
Corporation tax payable
(167)
(248)
Loans and borrowings
20
(32,020)
(22,358)
Provisions
21
(1,164)
(4,398)
(151,920)
(154,089)
Net current liabilities
(57,903)
(30,203)
Non-current liabilities
Trade and other payables
19
(1,361)
(1,174)
Loans and borrowings
20
(81,917)
(81,634)
Provisions
21
(11,572)
(9,948)
Deferred tax liability
13
(3,921)
(6,417)
(98,771)
(99,173)
Total liabilities
(250,691)
(253,262)
Net assets
82,754
93,271
Page 30

 
WALSTEAD GROUP LIMITED
 


CONSOLIDATED BALANCE SHEET (CONTINUED)
AS AT 31 DECEMBER 2023


Equity
Share capital
22
65
65
Retained earnings
74,414
86,920
Foreign exchange reserve
8,275
6,286
Equity attributable to the owners of the parent
82,754
93,271

The financial statements were approved and authorised for issue by the Board of Directors and were signed on its behalf by:

B G Murray
Director
Date: 14 November 2024

The notes on pages 35 to 97 form part of these financial statements.
Page 31

 
WALSTEAD GROUP LIMITED
 
 
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
AS AT 31 DECEMBER 2023

 
Share capital
Foreign exchange reserve
Retained earnings
Total equity
€'000
€'000
€'000
€'000
At 1 January 2022
65
6,843
76,202
83,110
Comprehensive income for the year
Profit for the year
-
-
6,856
6,856
Other comprehensive income
-
(557)
2,102
1,545
Total comprehensive income for the year
-
(557)
8,958
8,401
Transactions with owners
Capital contributions
-
-
1,760
1,760
At 31 December 2022
65
6,286
86,920
93,271


At 1 January 2023
65
6,286
86,920
93,271
Comprehensive income for the year
Loss for the year
-
-
(12,129)
(12,129)
Other comprehensive income
-
1,989
(377)
1,612
Total comprehensive income for the year
-
1,989
(12,506)
(10,517)
At 31 December 2023
65
8,275
74,414
82,754

The notes on pages 35 to 97 form part of these financial statements.


Page 32

 
WALSTEAD GROUP LIMITED

 
 
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
Note
€'000
€'000

Cash flows from operating activities
  

(Loss)/profit for the year
  
(12,129)
6,856

Adjustments for
  

Depreciation of property, plant and equipment
 14 
28,099
24,192

Amortisation of intangible fixed assets
 15 
926
801

Impairment losses on goodwill
 15 
1,209
-

Reversal of impairment loss recognised on trade receivables
  
(119)
(117)

Finance expense
 12 
9,215
7,297

Negative goodwill acquired on business combinations
 29 
(2,372)
-

Loss/(profit) on disposal of property, plant and equipment
  
1,262
(180)

Net foreign exchange differences
  
(365)
(371)

Income tax expense
 13 
2,158
(282)

  
27,884
38,196

Movements in working capital:
  

Decrease in trade and other receivables
  
5,379
4,947

Decrease/(increase) in inventories
  
12,418
(3,563)

(Decrease)/increase in trade and other payables
  
(11,499)
6,760

(Decrease) in provisions
  
(2,325)
-

Cash generated from operations
  
31,857
46,340

Income taxes reclaimed/(paid)
  
87
(1,268)

Interest paid
  
(7,451)
(6,236)

Net cash from operating activities

  
24,493
38,836

Cash flows from investing activities
  

Acquisition of business, net of cash acquired
 29 
(11,040)
-

Purchases of property, plant and equipment
  
(25,397)
(29,942)

Proceeds from disposal of property, plant and equipment
  
574
1,720

Purchase of intangible assets
 15 
(592)
(482)

Net cash used in investing activities

  
(36,455)
(28,704)
Page 33

 
WALSTEAD GROUP LIMITED

 
 
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023








2023
2022




€'000
€'000


Cash flows from financing activities
  

Drawdown of borrowings
  
12,585
2,452

Repayment of borrowings
  
(5,393)
(7,752)

Drawdown/(repayments) of revolving credit & invoice factoring
  
4,139
(8,971)

Repayment of loans from related parties
  
(5,801)
(11,843)

New finance lease arrangements
  
-
6,460

Principal elements of lease payments
  
(9,152)
(9,569)

Net cash used in financing activities
  
(3,622)
(29,223)

Net decrease in cash and cash equivalents
  
(15,584)
(19,091)

Cash and cash equivalents at the beginning of year
  
48,208
68,459

Exchange gains/(loss) on cash and cash equivalents
  
778
(1,160)

Cash and cash equivalents at the end of the year
 30 
33,402
48,208

The notes on pages 35 to 97 form part of these financial statements.

Page 34

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.


Reporting entity

Walstead Group Limited ("the Company") is a private company limited by shares incorporated and domiciled in the United Kingdom. The Company's registered office is 18 Westside Centre, London Road, Colchester, Essex, CO3 8PH. These consolidated financial statements comprise the Company and its subsidiaries (collectively "the Group" and individually "Group companies"). 
The principal activities of the Group and Company, and the nature of the Group's operations are set out in the Group Strategic Report on pages 3 to 17.


2.


Basis of preparation

The Group's consolidated financial statements have been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretations as adopted by the UK (collectively UK-adopted IFRSs). The Company's individual financial statements have been prepared in accordance with Financial Reporting Standard 102 (FRS 102) and the Companies Act 2006. They were authorised for issue by the Company's Board of Directors on 14 November 2024.

Details of the Group's accounting policies, including changes during the year, are included in note 4.

In preparing these financial statements, management has made judgements, estimates and assumptions that affect the application of the Group accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively.

The areas where judgements and estimates have been made in preparing the consolidated financial statements and their effects are disclosed in note 5.


2.1 Basis of measurement

The financial statements have been prepared on the historical cost basis except for the following items, which are measured on an alternative basis on each reporting date.


Items

Measurement basis


Trade receivables
Amortised cost

Cash
Amortised cost

Trade and other creditors
Amortised cost

Invoice discounting
Amortised cost

Lease liabilities
Amortised cost

Loans from related parties
Amortised cost

Term loans
Amortised cost

Page 35

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Basis of preparation (continued)


2.2 Changes in accounting policies

i) New and amended standards adopted by the Group

The Group has applied the following standards and amendments for the first time for their annual reporting period commencing 1 January 2023:
• IAS 1: Presentation of Financial Statements - The standard now requires companies to disclose              their material accounting policies rather than their significant accounting policies.
• IAS 8: Accounting Policies, Changes in Accounting Estimates and Errors - The standard introduces    a new definition for accounting estimates, clarifying that they are monetary amounts in the                                               financial statements that are subject to measurement uncertainty. It also specifies that a                         company develops  an accounting estimate to achieve the objective set out by an accounting policy.
• IAS 12: Income Taxes - The standard has narrowed the scope of the initial recognition exemption                (IRE) so that it does not apply to transactions that give rise to equal and offsetting temporary              differences.
• IFRS 17: Insurance Contracts
The amendments listed above did not have any impact on the amounts recognised in prior periods and are not expected to significantly affect the current or future periods.

ii) 

UK-adopted IFRS standards not yet applied

The following new standards, interpretations and amendments, which are not yet effective and have not been adopted early in these financial statements, will or may have an effect on the Group's future financial statements:

Amendments to IAS 1: Presentation of Financial Statements - Classification of liabilities as current      or non-current (effective date 1 January 2024).
• Amendments to IFRS 16: Leases - Lease liabilities in sale and leaseback arrangements (effective 1     January 2024).

These standards are not expected to have a material impact on the entity in the current or future reporting periods and on foreseeable future transactions.


3.


Functional and presentation currency

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates ("the functional currency").
These consolidated financial statements are presented in Euro ("€"), which is the Group's functional currency. All amounts have been rounded to the nearest thousand ("€'000"), unless otherwise indicated.

Page 36

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

4.Accounting policies

 
4.1

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities (including structured entities) controlled by the Company and its subsidiaries. Control is achieved when the Company:
has power over the investee;
is exposed, or has rights, to variable returns from its involvement with the investee; and
has the ability to use its power to affect its returns.

The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.

When the Company has less than a majority of the voting rights of an investee, it has power over the investee when the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Company considers all relevant facts and circumstances in assessing whether or not the Company's voting rights in an investee are sufficient to give it power, including:
the size of the Company's holding of voting rights relative to the size and dispersion of holdings of the other vote holders;
potential voting rights held by the Company, other vote holders or other parties;
rights arising from other contractual arrangements; and
any additional facts and circumstances that indicate that the Company has, or does not have, the current ability to direct the relevant activities at this time that decisions need to be made, including voting patterns at previous shareholders' meetings.

Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated statement of profit or loss and other comprehensive income from the date the Company gains control until the date when the Company ceases to control the subsidiary.

Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the non-controlling interests. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group's accounting policies.

All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.

Page 37

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

4.Accounting policies (continued)


4.1
Basis of consolidation (continued)


Changes in the Group's ownership interests in existing subsidiaries

Changes in the Group's ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group's interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of the Company.

When the Group loses control of a subsidiary, a gain or loss is recognised in profit or loss and its calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests. All amounts previously recognised in other comprehensive income in relation to that subsidiary are accounted for as if the Group had directly disposed of the related assets or liabilities of the subsidiary (i.e. reclassified to profit or loss or transferred to another category of equity as specified/permitted by applicable IFRSs). The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent account under IAS 39, when applicable, the cost on initial recognition of an investment in an associate or a joint venture.

Page 38

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

4.Accounting policies (continued)


4.2

Going concern

Notwithstanding net current liabilities of €54.0m as at 31 December 2023 and a loss after tax for the year of €12.1m, the financial statements have been prepared on a going concern basis which the Directors consider to be appropriate for the following reasons:
The Group and Company’s business activities, together with the factors likely to affect its future development, performance and position are set out in the Group Strategic Report. Principal risks are detailed on pages 3 to 5. The financial position of the Group, its cash flows, liquidity position and borrowing facilities are described in the financial statements.
The Directors have prepared cash flow forecasts and performed a going concern assessment for at least 12 months from the date of approval of these financial statements (the going concern period), which indicates that in the base case scenario the Group will have sufficient availability to finance in order to meet its liabilities as they fall due during the going concern assessment period.
The Directors have also prepared severe yet plausible downside scenarios, which take account of potential but plausible declines in trading performance driven by inflation and loss in customer demand. 
In particular, these scenarios include modelling reductions in revenue or an increase in the price of raw materials. Results from these models noted that there was sufficient funds to meet Group’s liabilities as they fall due during the going concern assessment period.
In addition to operating cash flows, the Group meets day to day financing and working capital needs through external facilities and shareholder loan notes, amounting to €149.5m.  As part of the Group’s working capital management, it utilises invoice factoring facilities. These ongoing factoring facilities have operated successfully and efficiently for a number of years, and while the earliest date that these facilities could cease to be available is 30 November 2025, the group has no reason to believe that the facilities would not continue to be available beyond this date. The facilities remain attractive to the provider due to the quality and strength of the group's receivables. The group also uses a range of revolving credit and other non-term facilities which have been, and are expected to be, renewed as considered appropriate. 
There are no covenants attached to the shareholder loan notes and the factoring facility held across the Group is subject to a net equity covenant. The Directors note that at no point in the modelling (i.e. either at the base case or severe but plausible case) the covenants were expected to breach. 
In the unlikely event of these existing factoring facilities ceasing to be available or if other facilities are not renewed, the group already has prudent back up facilities in place in respect of all but €38m of its projected working capital management  requirements at the end of 2025, with adequate time to ensure that additional facilities are in place to fully meet its working capital management requirements. 
Consequently, the Directors are confident that the Group will have sufficient working capital to continue to meet its liabilities for at least 12 months from the date of approval of these financial statements and therefore have prepared these financial statements on a going concern basis.

Page 39

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

4.Accounting policies (continued)

  
4.3

Business combinations

Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of the assets transferred by the Group, liabilities incurred by the Group to the former owners of the acquiree and the equity interests issued by the Group in exchange for control of the acquiree. Acquisition-related costs are generally recognised in profit or loss as incurred.

At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognised at their fair value, except that:
deferred tax assets or liabilities, and assets or liabilities related to employee benefit arrangements are recognised and measured in accordance with IAS 12 Income Taxes and IAS 19 respectively;
liabilities or equity instruments related to share-based payment arrangements of the acquiree or share-based payment arrangements of the Group entered into to replace share-based payment arrangements of the acquiree are measured in accordance with IFRS 2 at the acquisition date; and
assets (or disposal groups) that are classified as held for sale in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations are measured in accordance with that Standard.

Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer's previously held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If, after reassessment, the net of the acquisition-date amounts of the identifiable assets acquired and liabilities assumed exceeds the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree and the fair value of the acquirer's previously held interest in the acquiree (if any), the excess is recognised immediately in profit or loss as a bargain purchase gain.

Non-controlling interests that are present ownership interests and entitle their holders to a proportionate share of the entity's net assets in the event of liquidation may be initially measured either at fair value or at the non-controlling interests' proportionate share of the recognised amounts of the acquiree's identifiable net assets. The choice of measurement basis is made on a transaction-by-transaction basis. Other types of non-controlling interests are measured at fair value or, when applicable, on the basis specified in another IFRS.

When the consideration transferred by the Group in a business combination includes assets or liabilities resulting from a contingent consideration arrangement, the contingent consideration is measured at its acquisition-date fair value and included as part of the consideration transferred in a business combination. Changes in the fair value of the contingent consideration that qualify as measurement period adjustments are adjusted retrospectively, with corresponding adjustments against goodwill. Measurement period adjustments are adjustments that arise from additional information obtained during the ‘measurement period’ (which cannot exceed one year from the acquisition date) about facts and circumstances that existed at the acquisition date.

The subsequent accounting for changes in the fair value of the contingent consideration that do not qualify as measurement period adjustments depends on how the contingent consideration is classified. Contingent consideration that is classified as equity is not remeasured at subsequent reporting dates and its subsequent settlement is accounted for within equity. Contingent consideration that is classified as an asset or a liability is remeasured at subsequent reporting dates in accordance with IAS 39, or IAS 37 Provisions, Contingent Liabilities and Contingent Assets, as appropriate, with the corresponding gain or loss being recognised in profit or loss.

Page 40

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

4.Accounting policies (continued)


4.3
Business combinations (continued)

When a business combination is achieved in stages, the Group's previously held equity interest in the acquiree is remeasured to its acquisition-date fair value and the resulting gain or loss, if any, is recognised in profit or loss. Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognised in other comprehensive income are reclassified to profit or loss where such treatment would be appropriate if that interest were disposed of.

If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period (see above), or additional assets or liabilities are recognised, to reflect new information obtained about facts and circumstances that existed at the acquisition date that, if known, would have affected the amounts recognised at that date.

 
4.4

Foreign currency

In preparing the financial statements of each individual group entity, transactions in currencies other than the entity's functional currency (foreign currencies) are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences on monetary items are recognised in profit or loss in the period in which they arise except for:
exchange differences on foreign currency borrowings relating to assets under construction for future productive use, which are included in the cost of those assets when they are regarded as an adjustment to interest costs on those foreign currency borrowings;
exchange differences on transactions entered into in order to hedge certain foreign currency risks; and
exchange differences on monetary items receivable from or payable to foreign operation for which settlement is neither planned nor likely to occur (therefore forming part of the net investment in the foreign operation), which are recognised initially in other comprehensive income and reclassified from equity to profit or loss on repayment of the monetary items.

For the purposes of presenting these consolidated financial statements, the assets and liabilities of the Group's foreign operations are translated into Euros using exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period, unless exchange rates fluctuate significantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are recognised in other comprehensive income and accumulated in equity (and attributed to non-controlling interests as appropriate).

On the disposal of a foreign operation (i.e. a disposal of the Group's entire interest in a foreign operation, a disposal involving loss of control over a subsidiary that includes a foreign operation, or a partial disposal of an interest in a joint arrangement or an associate that includes a foreign operation of which the retained interest becomes a financial asset), all of the exchange differences accumulated in equity in respect of that operation attributable to the owners of the Company are reclassified to profit or loss.

Page 41

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

4.Accounting policies (continued)


4.4
Foreign currency (continued)

In addition, in relation to a partial disposal of a subsidiary that includes a foreign operation that does not result in the Group losing control over the subsidiary, the proportionate share of accumulated exchange differences are re-attributed to non-controlling interests and are not recognised in profit or loss. For all other partial disposals (i.e. partial disposals of associates or joint arrangements that do not result in the Group losing significant influence or joint control), the proportionate share of the accumulated exchange differences is reclassified to profit or loss.

Goodwill and fair value adjustments to identifiable assets acquired and liabilities assumed through acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the rate of exchange prevailing at the end of each reporting period. Exchange differences arising are recognised in other comprehensive income.


4.5

Finance income and costs

The Group’s finance income and finance costs include:
 
interest income;
interest expense;
the net gain or loss on financial assets at fair value through profit or loss;
the foreign currency gain or loss on financial assets and financial liabilities;
 
Interest income and interest payable is recognised in profit or loss as it accrues, using the effective interest method. Foreign currency gains and losses are reported on a net basis.

 
4.6

Revenue from contracts with customers

Revenue is measured based on the consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties. The Group recognises revenue when it transfers control over a product or service to a customer.

The Group does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the Group does not adjust any of the transaction prices for the time value of money.

Page 42

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

4.Accounting policies (continued)


4.6
Revenue from contracts with customers (continued)


(i) Printed materials

Contracts are entered into with customers for the provision of printed goods. The contract stipulates rates applicable to each product and invoices are raised in accordance with a matrix or pricing structure stipulated within the contract. Contracts can be agreed for specific jobs or may be for longer periods spanning the year end. Where a contract does not cover a specific job, orders are raised under the contract for specific products. These are produced on separate print runs making them easily identifiable. In certain circumstances, contracts may allow for a rebate if volume or revenue targets are met within a set period. Rebates are accrued against revenue based on achievement against targets within the financial year. Revenue from printed materials includes sales of waste paper.
Revenue is measured based on the consideration to which the Group expects to be entitled in a contract with a customer and excludes amounts collected on behalf of third parties. 
Revenue is recognised when control of the products has transferred, that is either when the products have been delivered to the customer or the customer collects the goods as defined within the contract, the customer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the customer’s acceptance of the products. Delivery occurs when the products have been shipped to the specific location or loaded for delivery in the case of an ex-works contract, the risks of obsolescence and loss have been transferred to the customer and either the customer has accepted the products in accordance with sales contract, the acceptance provisions have been lapsed, or the Group has objective evidence that all criteria for acceptance have been satisfied.
A receivable is recognised at the point the control of the products has transferred, since this is the point in time that the consideration is unconditional because only the passage of time is required before payment is due. 

A receivable is recognised when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.

Page 43

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

4.Accounting policies (continued)


4.6
Revenue from contracts with customers (continued)


(ii) Rendering of services

Contracts are entered into with customers for the provision of reprographic services.
Revenue is measured based on the consideration to which the Group expects to be entitled in a contract with a customer and excludes amounts collected on behalf of third parties. Revenue is recognised over time as the contracts progress and the services are performed.

For fixed-price contracts, revenue is recognised based on the actual service provided to the end of the reporting period as a proportion of the total services to be provided because the customer receives and uses the benefits simultaneously.

Where contracts include multiple performance obligations, the transaction price will be allocated to each performance obligation based on the stand-alone selling prices. Where these are not directly observable, they are estimated based on expected cost plus margin. For service contracts including a goods element, revenue for the separate good is recognised at a point in time when the good is delivered, the legal title has passed and the customer has accepted the good.

Estimates of revenues, costs or extent of progress toward completion are revised if circumstances change. Any resulting increases or decreases in estimated revenues or costs are reflected in profit or loss in the period in which the circumstances that give rise to the revision become known by management. In case of fixed-price contracts, the customer pays the fixed amount based on a payment schedule. If the services rendered by the Group exceed the payment, a contract asset is recognised. If the payments exceed the services rendered, a contract liability is recognised. 


4.7

Other operating income

Other operating income predominantly relates to the sale from generation of electricity sold to the national grid. Income is recognised at the fair value of the consideration received or receivable and represents amounts receivable for goods provided in the normal course of business, net of discounts, VAT and other sales-related taxes. Electricity income is recognised over time as energy is supplied to the grid. 

Page 44

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

4.Accounting policies (continued)

 
4.8

Government grants

Government grants are not recognised until there is reasonable assurance that the Group will comply with the conditions attaching to them and that the grants will be received.

Government grants are recognised in profit or loss on a systematic basis over the periods in which the Group recognises as expenses the related costs for which the grants are intended to compensate. Specifically, government grants whose primary condition is that the Group should purchase, construct or otherwise acquire non-current assets are recognised as deferred revenue in the consolidated statement of financial position and transferred to profit or loss on a systematic and rational basis over the useful lives of the related assets.

Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Group with no future related costs are recognised in profit or loss in the period in which they become receivable.

The benefit of a government loan at a below-market rate of interest is treated as a government grant, measured as the difference between proceeds received and the fair value of the loan based on prevailing market interest rates.


4.9

Restructuring and other costs

The Group presents restructuring and other costs (note 9) to provide additional useful information on the operational performance of the Group.

Page 45

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

4.Accounting policies (continued)

  
4.10

Employee benefits


(i) Retirement benefit costs and termination benefits

Payments to defined contribution retirement benefit plans are recognised as an expense when employees have rendered service entitling them to the contributions.

For defined benefit retirement benefit plans, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding interest), is reflected immediately in the statement of financial position with a charge or credit recognised in other comprehensive income in the period in which they occur. Remeasurement recognised in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss. Past service cost is recognised in profit or loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset. Defined benefit costs are categorised as follows:
service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements);
net interest expense or income; and
remeasurement.

The Group presents the first two components of defined benefit costs in profit or loss in the line item 'Cost of sales' or 'Administrative expenses' . Curtailment gains and losses are accounted for as past service costs.

The retirement benefit obligation recognised in the consolidated statement of financial position represents the actual deficit or surplus in the Group’s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans.

A liability for a termination benefit is recognised at the earlier of when the entity can no longer withdraw the offer of the termination benefit and when the entity recognises any related restructuring costs.
The Group recognises termination benefits at the earlier of the following dates: (a) when the Group can no longer withdraw the offer of those benefits; and (b) when the entity recognises costs for a restructuring that is within the scope of IAS 37 and involves the payment of terminations benefits. In the case of an offer made to encourage voluntary redundancy, the termination benefits are measured based on the number of employees expected to accept the offer. Benefits falling due more than 12 months after the end of the reporting period are discounted to present value.

Page 46

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

4.Accounting policies (continued)


4.10
Employee benefits (continued)


(ii) Short-term and other long-term employee benefits

A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave and sick leave in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service.

Liabilities recognised in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.

Liabilities recognised in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflows expected to be made by the Group in respect of services provided by employees up to the reporting date.
Bonus plans
The Group recognises a liability and an expense for bonuses based on metrics that take into account key performance indicators, including profits after certain adjustments.
The Group recognises a provision where contractually obliged or where there is a past practice that has created a constructive obligation.


4.11

Share-based transactions

The Group has share-based transactions in respect of certain shares issued to employees of the Group by the ultimate parent company of the Group (Walstead Holdings Limited).  
Equity-settled share-based payments to employees are measured at the fair value of the equity instruments at the grant date. The fair value is calculated using the Black-Scholes option pricing model and further details regarding the determination of the fair value of the transactions are set out in note 26.
The fair value determined at the grant date of the equity-settled share-based payments is expensed over the vesting period, with a corresponding increase in equity.

 
4.12

Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.


(i) Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from ‘profit before tax’ as reported in the Consolidated Profit and Loss Account because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Group's current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

Page 47

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

4.Accounting policies (continued)


4.12
Taxation (continued)


(ii) Deferred tax

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. In addition, deferred tax liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill.

Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.


(iii) Current and deferred tax for the year

Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity respectively. Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.

Page 48

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

4.Accounting policies (continued)

 
4.13

Property, plant and equipment

Items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses.

If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment. Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss. Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Group.

Land is not depreciated. Depreciation is provided on all other items of property, plant and equipment so as to write off their carrying value over their expected useful economic lives. It is provided at the following rates:

Buildings
4% per annum
Plant and machinery
10% - 50% per annum
Fixtures and fittings
30% per annum

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in profit or loss.


4.14

Goodwill

Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the business (see note 4.3) less accumulated impairment losses, if any.
For the purposes of impairment testing, goodwill is allocated to each of the Group's cash-generating units (or groups of cash-generating units) that is expected to benefit from the synergies of the combination.
On disposal of the relevant cash-generating unit, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.
Negative goodwill arising on acquisition is fully recognised within restructuring and other costs in the year of acquisition.

Page 49

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

4.Accounting policies (continued)

 
4.15

Intangible assets


Intangible assets acquired in a business combination

Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortisation and accumulated impairment losses. Amortisation is recognised on a straight-line basis over their estimated useful lives. The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. Intangible assets with indefinite useful lives that are acquired separately are carried at cost less accumulated impairment losses.

Goodwill
Indefinite
Customer contracts
20% - 100% per annum
Software
33% per annum

Capitalised development expenditure isn't amortised until development is complete.

  
4.16

Impairment of non-financial assets

Impairment tests on goodwill and other intangible assets with indefinite useful economic lives are undertaken annually at the financial year end. Other non-financial assets are subject to impairment tests whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. These impairment tests are based on the going concern forecasts; adjusted to only reflect conditions that existed at at the 31 December 2023. Where the carrying value of an asset exceeds its recoverable amount (i.e. the higher of value in use and fair value less costs to sell), the asset is written down accordingly.

Where it is not possible to estimate the recoverable amount of an individual asset, the impairment test is carried out on the smallest group of assets to which it belongs for which there are separately identifiable cash flows; its cash generating units ('CGUs'). Goodwill is allocated on initial recognition to each of the Group's CGUs that are expected to benefit from a business combination that gives rise to the goodwill.

Impairment charges are included in profit or loss, except to the extent they reverse gains previously recognised in other comprehensive income. An impairment loss recognised for goodwill is not reversed.

  
4.17

Leasing

A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.


The Group as a lessee

The Group assesses whether a contract is or contains a lease, at inception of a contract. The Group recognises a right-of-use asset and a corresponding lease liability with respect to all lease agreements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low-value assets. For these leases, the Group recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Group uses its incremental borrowing rate.

Page 50

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

4.Accounting policies (continued)


4.17
Leasing (continued)


 The Group as a lessee (continued)

Lease payments included in the measurement of the lease liability comprise:

fixed lease payments (including in-substance fixed payments), less any lease incentives;

the amount expected to be payable by the lessee under residual value guarantees;

the exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and

payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease.

The lease liability is included in the 'Loans and borrowings' line in the Consolidated Balance Sheet.

The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.

The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:

the lease term has changed or there is a change in the assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised discount rate.

the lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised lease payments using the initial discount rate (unless the lease payments change is due to a change in a floating interest rate, in which case a revised discount rate is used).


Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses.

Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Group expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease.

The right-of-use assets are included in the 'Property, Plant and Equipment' line in the Consolidated Balance Sheet.

Page 51

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

4.Accounting policies (continued)


4.17
Leasing (continued)


 The Group as a lessee (continued)

The Group applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss as described in note 4.13.

As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components, and instead account for any lease and associated non-lease components as a single arrangement. The Group has used this practical expedient.

 
4.18

Inventories

Inventories are stated at the lower of cost and net realisable value. Costs of inventories are determined on a first in, first out basis. Net realisable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale.
Cost of work in progress includes an appropriate proportion of overhead expenditure based on normal operating capacity. Impairment losses are recognised where inventories become obsolete or damaged with items written down to net realisable value. Previously recognised impairment losses are reversed if the reasons for the impairment no longer apply. 


4.19

Trade receivables

Classification as trade receivables
Trade receivables are amounts due from customers for goods sold and services provided in the ordinary course of business. They are generally due for settlement within 30 days and are therefore all classified as current. Trade receivables are recognised initially at the amount of consideration that is unconditional. The Group holds the trade receivables with the objective of collecting contractual cash flows, and so it measures them subsequently at amortised cost using the effective interest method.
Transferred receivables
The carrying amount of the trade receivables include receivables which are subject to a factoring arrangement. Under this arrangement, the Group has transferred the relevant receivables to the factor in exchange for cash and is prevented from selling or pledging the receivables. However, in some cases the Group has retained late payment and credit risk. The Group therefore continues to recognise these transferred assets to the extent the risk has not been transferred in the Consolidated Balance Sheet. Amount repayable under the factoring agreement is presented as secured borrowing. The Group considers that the ‘held to collect’ business model remains appropriate for these receivables, and hence it continues measuring them at amortised cost. 

 
4.20

Financial assets

All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.

All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.

Page 52

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

4.Accounting policies (continued)


4.20
Financial assets (continued)


Classification of financial assets

Debt instruments that meet the following conditions are subsequently measured at amortised cost:

the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and

the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Debt instruments that meet the following conditions are subsequently measured at fair value through other comprehensive income (FVOCI):

the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling the financial assets; and

the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

By default, all other financial assets are subsequently measured at fair value through profit or loss (FVTPL).

Despite the aforegoing, the Group may make the following irrevocable election/designation at initial recognition of a financial asset:

the Group may irrevocably elect to present subsequent changes in fair value of an equity instrument in other comprehensive income if certain criteria are met; and

the Group may irrevocably designate a debt investment that meets the amortised cost or FVOCI criteria as measured at FVTPL if doing so eliminates or significantly reduces an accounting mismatch.

Page 53

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

4.Accounting policies (continued)


4.20
Financial assets (continued)


Amortised cost and effective interest method

The effective interest method is a method for calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period.

For financial instruments other than purchased or originated credit-impaired financial assets, the effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) excluding expected credit losses, through the expected life of the debt instrument, or, where appropriate, a shorter period, to the gross carrying amount of the debt instrument on initial recognition. For purchased and originated credit-impaired financial assets, a credit-adjusted effective interest rate is calculated by discounting the estimated future cash flows, including expected credit losses, to the amortised cost of the debt instrument on initial recognition.

The amortised cost of a financial asset is the amount at which the financial asset is measured at initial recognition minus the principal repayments, plus the cumulative amortisation using the effective interest method of any difference between that initial amount and the maturity amount, adjusted for any loss allowance. On the other hand, the gross carrying amount of a financial asset is the amortised costs of a financial asset before adjusting for any loss allowance.

Interest income is recognised using the effective interest method for debt instruments measured subsequently at amortised cost and at FVOCI. For financial instruments other than purchased or originated credit-impaired financial assets, interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset, except for financial assets that have subsequently become credit-impaired. For financial assets that have subsequently become credit-impaired, interest income is recognised by applying the effective interest rate to the amortised cost of the financial asset. If, in subsequent reporting periods, the credit risk on the credit-impaired financial instrument improves so that the financial asset is no longer credit-impaired, interest income is recognised by the applying the effective interest rate to the gross carrying amount of the financial asset.

For purchased and originated credit-impaired financial assets, the Group recognises interest income by applying the credit-adjusted effective interest rate to the amortised cost of the financial asset from initial recognition. The calculation does not revert to the gross basis even if the credit risk of the financial asset subsequently improves so that the financial asset is no longer credit-impaired.

Interest income is recognised in profit or loss and is included in the 'finance income' line item.

Page 54

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

4.Accounting policies (continued)


4.20
Financial assets (continued)


Impairment of financial assets

The Group recognises a loss allowance for expected credit losses on investments in debt instruments that are measured at amortised costs or at FVOCI, lease receivables, amounts due from customers under contracts, as well as on loan commitments and financial guarantee contracts. No impairment loss is recognised for investments in equity instruments. The amount of expected credit losses ("ECL") is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective financial instrument.

The Group always recognises lifetime ECL for trade receivables, amounts due from customers under contracts and lease receivables. The expected credit losses on these financial assets are estimated using a provision matrix based on the Group's historical credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the current as well as the forecast direction of conditions at the reporting date, including time value of money where appropriate.

For all other financial instruments, the Group recognises lifetime ECL when there has been a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on the financial instrument has not increased significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12 months ECL. The assessment of whether lifetime ECL should be recognised is based on significant increases in the likelihood or risk of a default occurring since initial recognition instead of on evidence of a financial asset being credit-impaired at the reporting date or an actual default occurring.

Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12 months ECL represents the portion of lifetime ECL that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.

 
4.21

Financial liabilities and equity instruments


(i) Classification as debt or equity

Debt and equity instruments issued by a group entity are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.


(ii) Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by a group entity are recognised at the proceeds received, net of direct issue costs.

Repurchase of the Company's own equity instruments is recognised and deducted directly in equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Company's own equity instruments.

Page 55

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

4.Accounting policies (continued)


4.21
Financial liabilities and equity instruments (continued)


(iii) Financial liabilities

All financial liabilities are subsequently measured at amortised cost using the effective interest method or at FVTPL.

However, financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when the continuing involvement approach applies, financial guarantee contracts issued by the Group, and commitments issued by the Group to provide a loan at below-market interest rate are measured in accordance with the specific accounting policies set out below.

Foreign exchange gains and losses

For financial liabilities that are denominated in a foreign currency and are measured at amortised cost at the end of each reporting period, the foreign exchange gains and losses are determined based on the amortised cost of the instruments. These foreign exchange gains and losses are recognised in the 'finance income' or 'finance expense' line item, for gains and losses respectively, in profit or loss for financial liabilities that are not part of a designated hedging relationship.

The fair value of financial liabilities denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of the reporting period.

For financial liabilities that are measured as at FVTPL, the foreign exchange component forms part of the fair value gains or losses and is recognised in profit or loss for financial liabilities that are not part of a designated hedging relationship.

Derecognition of financial liabilities

The Group derecognises financial liabilities when, and only when, the Group's obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.


4.22

Derivatives and hedging activities

Derivative financial instruments are recognised at fair value. The gain or loss on remeasurement to fair value is recognised immediately in profit or loss. However, where derivatives qualify for hedge accounting, recognition of any resultant gain or loss depends on the nature of the item being hedged.
There are no open derivative positions in the current or preceding financial year so the Group has not applied hedge accounting under IFRS 9.


4.23

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term, highly liquid investments maturing within 90 days from the date of acquisition that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.
Bank overdrafts are shown within borrowings in current liabilities in the Consolidated Balance Sheet. 

Page 56

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

4.Accounting policies (continued)


4.24

Borrowings

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent that there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it relates.
Borrowings are removed from the Consolidated Balance Sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss as other income or finance costs.
Where the terms of a financial liability are renegotiated and the entity issues equity instruments to a creditor to extinguish all or part of the liability (debt for equity swap), a gain or loss is recognised in profit or loss, which is measured as the difference between the carrying amount of the financial liability and the fair value of the equity instruments issued.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period.
Borrowing costs
Borrowing costs that are directly attributable to the acquisition, construction or production of an asset that takes a substantial time to be prepared for use, are capitalised as part of the cost of that asset. All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

Page 57

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

4.Accounting policies (continued)

 
4.25

Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.
Restructuring provision
A restructuring provision is recognised when the Group has developed a detailed formal plan for the restructuring and has raised a valid expectation in those affected that it will carry out the restructuring by starting to implement the plan or announcing its main features to those affected by it. The measurement of a restructuring provision includes only the direct expenditures arising from the restructuring, which are those amounts that are both necessarily entailed by the restructuring and not associated with the ongoing activities of the entity.
Loss making contract provision
Present obligations arising under loss making contracts are recognised and measured as provisions. Loss making contract is considered to exist where the Group has a contract under which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it. 
Employee and loyalty bonus provision
Both of these provisions relate to a legal requirement for Austrian and Slovenian employees to accrue specific costs; the provisions are calculated by an actuary.


5.


Accounting estimates and judgements

The Group and Company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that carry a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities are as follows:

Impairment of intangible assets (Note 15)

Page 58

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

6.


Revenue


The following is an analysis of the Group's revenue for the year from continuing operations:


2023
2022
€'000
€'000


Sale of goods
570,703
638,741

Sale of services
11,294
10,135

581,997
648,876


Analysis of revenue by country of destination:

2023
2022
€'000
€'000


United Kingdom
148,233
153,397

Continental Europe
430,584
492,588

Rest of the World
3,180
2,891

581,997
648,876

Timing of revenue recognition:

2023
2022
€'000
€'000

Goods and services transferred at a point in time
581,997
648,876

581,997
648,876

Included in revenues arising from commercial printing are revenues of approximately €33.8 million (2022: €40.5 million) which arose from sales to the Group’s largest customer. No single customer contributed 10% or more to the Group's revenue during the year ended 31 December 2023 or during the year ended 31 December 2022

Page 59

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

7.


Other operating income

2023
2022
€'000
€'000


Electricity income
9,233
4,587

Waste sales - non-paper
1,889
2,254

Government grants receivable
1,166
1,386

Other
2,976
3,493

15,264
11,720


8.
Operating profit

The operating profit is stated after charging/(crediting):


2023
2022

€'000
€'000


Net foreign exchange gains
(674)
(236)

Depreciation of property, plant and equipment
28,099
24,192

Amortisation of intangible assets
926
801

Impairment of intangible assets
1,209
-

Loss/(profit) on disposal of property, plant and equipment and intangible assets
1,262
(180)

Net impairment gain recognised on trade receivables
(119)
(117)


9.
Restructuring and other costs

In the analysis of the Group’s operating results, information is presented to provide readers with additional performance indicators that are prepared on a non-statutory basis. This presentation is regularly reviewed by management to identify items that are considered to be one-off or do not reflect an operational cost of the business and should be adjusted in order to reflect an understanding of the Group’s performance and long-term trends.


2023
2022

€'000
€'000


Restructuring costs (including redundancies and acquisition costs)
6,397
3,292

Negative goodwill recognised on acquisition
(2,372)
-

Of the above costs, €0.2 million (2022: €1.5 million) remains outstanding at the year end and is included within accruals. All restructuring costs are deductible for tax purposes.


Page 60

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

10.


Auditor's remuneration

During the year, the Group obtained the following services from the Company's auditor and its associates:


2023
2022
€'000
€'000

Fees payable to the Company's auditor and its associates for the audit of the consolidated and parent Company's financial statements
120
34

Fees payable to the Company's auditor and its associates in respect of:

Audit of the financial statements of the Company’s subsidiaries
822
709

Taxation compliance services
19
5


11.


Employee benefit expenses

Group


2023
2022
€'000
€'000

Employee benefit expenses (including Directors) comprise:

Wages and salaries
104,318
101,872

Social security costs
21,069
20,629

Pension cost
1,307
1,221

126,694
123,722


The monthly average number of persons, including the Directors, employed by the Group during the year was as follows:


2023
2022
No.
No.

Production
2,670
2,715

Sales
78
98

Administrative
464
419

3,212
3,232

Page 61

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

12.


Finance costs

Recognised in profit or loss


2023
2022
€'000
€'000

Interest on loans
3,987
2,479

Interest on lease liabilities
3,464
3,757

Interest on loans from related parties
1,143
822

Net interest expense on defined benefit obligation
245
104

Net exchange losses on foreign currency borrowings
376
135

Total finance expense
9,215
7,297






Page 62

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

13.


Tax expense

13.1 Income tax recognised in profit or loss



2023
2022
€'000
€'000

Current tax

Current tax on profits for the year
777
787

Adjustments in respect of prior years
(189)
(123)

Total current tax
588
664


Deferred tax expense

Origination and reversal of timing differences
1,012
(330)

Adjustments in respect of prior years
558
(616)

Total deferred tax
1,570
(946)


Total tax expense/(credit)
2,158
(282)

Page 63

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

13.Tax expense (continued)


13.1 Income tax recognised in profit or loss (continued)

The reasons for the difference between the actual tax charge for the year and the standard rate of corporation tax in the United Kingdom applied to losses for the year are as follows:


2023
2022
€'000
€'000


(Loss)/profit for the year
(12,129)
6,856

Income tax expense/(credit)
2,158
(282)

(Loss)/profit before income taxes
(9,971)
6,574


Tax using the Company's effective tax rate of 23.5% (2022: 19%)
(2,343)
1,249

Expenses not deductible for tax purposes
(485)
2,090

Capital allowances for the year in excess of depreciation
1,917
910

Tax effect of losses
242
(140)

Post year end expenses allowable in determining taxable profit
(28)
55

Different tax rates on overseas earnings
(699)
(2,045)

Adjustments to tax charge in respect of prior periods
369
(739)

Non-taxable income
(3,598)
(1,223)

Changes in provisions leading to an increase/(decrease) in the tax charge
352
-

Movement in unrecognised deferred tax
1,829
(375)

Change of rate for tax
204
(64)

Tax group capitalisation
979
-

Movement in SEZ asset
1,645
-

Other
1,774
-

Total tax expense/(credit)
2,158
(282)

Changes in tax rates and factors affecting the future tax charges

An increase in the UK corporation tax rate from 19% to 25% was substantively enacted in June 2021 and took effect from 1 April 2023 for profits over £250,000. For profits under £50,000 the tax rate will remain the same at 19% and for profits between these figures it will be subject to 25% but reduced by a marginal relief providing a gradual increase in the effective corporation tax rate.
There are no currently known factors that will affect future tax charges.

Page 64

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

13.Tax expense (continued)

13.2 Deferred tax balances

The following is the analysis of deferred tax assets/(liabilities) presented in the Consolidated Balance Sheet:


2023
2022
€'000
€'000


Deferred tax assets
19,814
23,923

Deferred tax liabilities
(3,921)
(6,417)

15,893
17,506

Page 65

 


 
WALSTEAD GROUP LIMITED


 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

13.Tax expense (continued)


13.2 Deferred tax balances (continued)








Opening balance
Recognised in profit or loss
Recognised in other comprehensive income
Transfers
Acquisitions/ disposals
Reclass-ifications
Closing balance
        €'000
        €'000
        €'000
        €'000
        €'000
        €'000
        €'000
2023
Intangible assets

(542)

90

(12)

-

-

-

(464)

Accelerated tax depreciation

705

1,543

328

-

(718)

437

2,295

Tax losses

7,694

(1,296)

141

-

-

(438)

6,101

Other timing differences

9,649

(1,907)

403

(185)

-

1

7,961



17,506


(1,570)


860


(185)


(718)


-


15,893


Other timing differences relate to SEZ assets, provisions and other miscellaneous items.

Page 66

 


 
WALSTEAD GROUP LIMITED


 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

13.Tax expense (continued)


13.2 Deferred tax balances (continued)





Opening balance
Recognised in profit or loss
Recognised in other comprehensive income
Closing balance
        €'000
        €'000
        €'000
        €'000
2022
Deferred tax (liabilities)/assets in relation to:





Intangible assets

(364)

(205)

27

(542)

Accelerated tax depreciation

1,023

(76)

(242)

705

Tax losses

6,898

959

(163)

7,694

Other timing differences

9,508

268

(127)

9,649



17,065


946


(505)


17,506


Page 67

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

13.Tax expense (continued)


13.3 Unprovided deferred tax assets

Unprovided deferred taxation assets with no expiry date have not been recognised as it is not considered probable that they can be utilised in the foreseeable future. The gross unrecognised deferred tax is as follows:


2023
2022
€'000
€'000

Tax losses carried forward and other deductions
35,049
1,431

Other short-term timing differences
84,324
73,963

119,373
75,394

A significant proportion of the unrecognised tax losses expires in December 2026.


14.


Property, plant and equipment


Group





Land and buildings
Plant and machinery
Fixtures and fittings
Total

€'000
€'000
€'000
€'000



Cost






At 1 January 2022
99,482
171,470
4,806
275,758


Additions
822
28,872
248
29,942


Transfer to intangible assets
-
(275)
-
(275)


Disposals
59
(5,008)
(283)
(5,232)


Reclassifications
53
(115)
62
-


Foreign exchange movements
(1,091)
(969)
(120)
(2,180)



At 31 December 2022
99,325
193,975
4,713
298,013


Additions
6,055
29,208
303
35,566


Transfer to intangible assets
-
(380)
-
(380)


Acquisition of subsidiary
7,380
4,445
1,276
13,101


Disposals
(522)
(27,549)
(470)
(28,541)


Foreign exchange movements
1,356
2,459
82
3,897



At 31 December 2023
113,594
202,158
5,904
321,656

Page 68

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

14.Property, plant and equipment (continued)


Land and buildings
Plant and machinery
Fixtures and fittings
Total

€'000
€'000
€'000
€'000



Accumulated depreciation and impairment






At 1 January 2022
35,605
72,547
3,148
111,300


Charge owned for the year
2,261
12,528
377
15,166


Charged financed for the year
4,152
4,874
-
9,026


Disposals
2
(3,732)
(23)
(3,753)


Reclassifications
296
(280)
(16)
-


Exchange adjustments
(303)
94
(27)
(236)



At 31 December 2022
42,013
86,031
3,459
131,503


Charge owned for the year
1,957
16,072
767
18,796


Charged financed for the year
4,151
5,152
-
9,303


Disposals
(138)
(25,910)
(661)
(26,709)


Exchange adjustments
214
712
54
980



At 31 December 2023
48,197
82,057
3,619
133,873



Net book value


At 31 December 2022

57,312
107,944
1,254
166,510


At 31 December 2023
65,397
120,101
2,285
187,783


14.1. Assets held under leases


The net book value of owned and leased assets included as "Property, plant and equipment" in the Consolidated Balance Sheet is as follows:

2023
2022
€'000
€'000


Property, plant and equipment owned
130,677
119,820

Right-of-use assets
57,106
46,690

187,783
166,510

Page 69

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

14.Property, plant and equipment (continued)


14.1 Assets held under leases (continued)

Information about right-of-use assets is summarised below:

Net book value

2023
2022
€'000
€'000

Buildings
19,934
18,204

Plant and machinery
37,172
28,486

57,106
46,690

Depreciation charge for the year ended

2023
2022
€'000
€'000

Buildings
4,151
4,152

Plant and machinery
5,152
4,874

9,303
9,026

Additions to right-of-use assets

2023
2022
€'000
€'000

Additions to right-of-use assets
14,982
6,460



14.2 Assets pledged as security

Freehold land and buildings with a carrying amount of €27.5 million (2022: €28.7 million) and plant and machinery with a carrying amount of €3.4 million (2022: €3.3 million) have been pledged to secure borrowings of the Group.

Page 70

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

15.


Intangible assets

Group





Goodwill
Customer contracts
Software
Total

€'000
€'000
€'000
€'000



Cost






At 1 January 2022
45,222
22,789
6,998
75,009


Additions
-
-
482
482


Disposals
-
-
(72)
(72)


Transfers from property, plant and equipment
-
-
275
275


Foreign exchange movement
(1,600)
(728)
(97)
(2,425)



At 31 December 2022
43,622
22,061
7,586
73,269


Additions
-
133
459
592


Disposals
-
-
(39)
(39)


On acquisition of subsidiaries
-
-
34
34


Transfers from property, plant and equipment
-
-
380
380


Foreign exchange movement
665
396
161
1,222



At 31 December 2023
44,287
22,590
8,581
75,458


Goodwill
Customer contracts
Software
Total

€'000
€'000
€'000
€'000



Accumulated amortisation and impairment






At 1 January 2022
13,777
22,759
4,521
41,057


Charge for the year - owned
-
10
791
801


Disposals
-
-
(11)
(11)


Foreign exchange movement
-
(727)
(65)
(792)



At 31 December 2022
13,777
22,042
5,236
41,055


Charge for the year - owned
-
16
910
926


Disposals
-
-
(39)
(39)


Impairment charge
1,209
-
-
1,209


Foreign exchange movement
-
389
87
476


At 31 December 2023
14,986
22,447
6,194
43,627
Page 71

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

15.Intangible assets (continued)




Net book value


At 1 January 2022

31,445
30
2,477
33,952


At 31 December 2022

29,845
19
2,350
32,214


At 31 December 2023
29,301
143
2,387
31,831

The recoverable amounts of the CGUs and the group of units are determined from value in use calculations. The key assumptions for the value in use calculations are those regarding the discount rates, growth rates and expected changes to selling prices and direct costs during the year. Management estimates discount rates using pre-tax rates that reflect current market assessments of the time value of money and the risks specific to the CGUs and the group of units. The growth rates are based on industry growth forecasts and management estimates. Changes in selling prices and direct costs are based on past practices and expectations of future changes in the market.
The Company considers the CGUs to be it's territories. These are groups of subsidiaries allocated based on geographical location and legal structure. These territories are as follows:
Iberia (Spain)
Leykam (Austria, Germany, Czech Republic and Slovenia)
UK (England)
Central Europe (Poland and Germany)
The Group prepares cash flow forecasts derived from the most recent financial budgets approved by management for the next five years and extrapolates cash flows into perpetuity based on an estimated growth rate of zero per cent. This rate does not exceed the average long-term growth rate for the relevant markets. 
The Group has goodwill relating to its investments in the UK and Iberia territories. Goodwill is allocated to CGUs based on the territory the related entity or entities is in.
On acquisition, before impairment testing, goodwill of €15.6 million was allocated to the Walstead Iberia CGU within the commercial printing segment. The combination of the decline within the industry and limited GDP growth reduced Walstead Iberia’s goodwill to its recoverable amount of €1.2 million through recognition of an impairment loss in 2016. The Iberia balance was then fully impaired in 2023. The remaining goodwill of €29.3 million 
(2022: €28.6 million) relates to the Walstead UK CGU which is denominated in GBP and is retranslated at the balance sheet date. 


The discount rates and terminal growth rates used in performing the impairment reviews are as follows:


Walstead Iberia
Walstead Iberia
Walstead UK
Walstead
UK

2023
2022
2023
2022

%
%
%
%


Discount rate
13.7
13.0
12.6
13.0

Terminal growth rate
0.0
0.0
0.0
0.0

Page 72

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

15.

Intangible assets (continued)

Reasonably possible changes at the reporting date to one of the key assumptions, holding other assumptions constant, would have affected the CGU valuation of Walstead Iberia by the amounts shown below:


Incease
Incease
Decrease
Decrease

2023
2022
2023
2022

£'000
£'000
£'000
£'000


Discount rate (1% movement)
(2,329)
(2,128)
2,719
2,497

Sales volume (1% movement)
940
939
(940)
(939)

Labour cost (1% movement)
(1,075)
(1,182)
1,075
1,182

Non-labour cost (1% movement)
(1,437)
(1,524)
1,437
1,524

Terminal growth rate (1% movement)
1,354
1,292
(1,170)
(1,117)

The value of customer contracts is derived from the discounted cash flows that are expected to arise from each contract at the point of acquisition. Contracts are amortised over their estimated useful lives, which range between 1 and 5 years, and are reviewed annually for impairment.



16.


Subsidiaries

The Group consists of a parent company, Walstead Group Limited, which is incorporated in the United Kingdom and a number of subsidiaries held directly and indirectly by Walstead Group Limited, which operate and are incorporated in the United Kingdom and the rest of Europe. Note 46 to the Company’s separate financial statements lists details of the interests in subsidiaries. 

Details of the Group's subsidiaries at the end of the reporting period are as follows:

Place of incorporation and operation
Principal activity
Number of wholly-owned subsidiaries


2023
2022






1United Kingdom


Printing
 
13

13

2Spain


Printing
 
5

4

3Austria


Printing
 
3

7

4Czech Republic


Printing
 
1

1

5Slovenia


Printing
 
1

1

6Poland


Printing
 
3

3

7Germany


Printing
 
2

1


The Group did not hold any non-wholly owned subsidiaries as at 31 December 2023 (2022: none). There are no significant restrictions on the ability of the Group to access or use assets and settle liabilities.  

Page 73

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

17.


Inventories

Group


2023
2022
€'000
€'000



Raw materials
18,105
26,116

Work in progress
6,241
8,849

24,346
34,965

The cost of inventories recognised as an expense during 2023 was €230 million (2022: €305 million).

No inventories have been pledged as security for any of the Group’s borrowings.


18.


Trade and other receivables



Group

2023
2022
€'000
€'000


Current

Trade receivables
23,643
26,933

Less: provision for impairment of trade receivables
(2,799)
(3,444)

Trade receivables - net
20,844
23,489

Prepayments
4,389
3,500

Corporation tax
817
1,390

Accrued income
995
1,661

Amounts receivable from invoice discounting facility
1,551
1,005

VAT receivable
1,231
3,826

Other receivables
6,442
5,842

Total current trade and other receivables
36,269
40,713

Page 74

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

18.Trade and other receivables (continued)

The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the Group’s customer base, including the default risk of the industry and country in which customers operate, has less influence on credit risk. No single customer accounts for a significant proportion of the Group’s revenue. 
Each new customer is analysed individually for creditworthiness before the Group’s standard payment and delivery terms and conditions are offered. The Group’s review includes external ratings, where available, and in some cases bank references. Purchase limits are established for each customer, which represents the maximum open amount without requiring approval from the Board of Directors. Customers that fail to meet the Group’s benchmark creditworthiness may transact with the Group only on a prepayment basis.
The average credit period taken on sales of goods is 15 days 
(2022: 14 days). No interest is charged on the receivables for the first 30 days from the date of the invoice. 
Of the trade receivables balance at the end of the year, €5.3 million is due from the Group’s customer with the largest revenue 
(2022: €0.6million). There is no customer with a balance more than 10% of the total balance of trade receivables.

Movements in the impairment allowance for trade receivables are as follows:




2023
2022
€'000
€'000

Current

At 1 January
3,444
3,643

Impairment losses recognised
418
339

Written off during the year as uncollectable
(603)
(38)

Impairment losses reversed
(243)
(442)

Recovered during the year
(346)
(14)

Effect of changes in foreign exchange rate
129
(44)

At 31 December
2,799
3,444

In determining the recoverability of a trade receivable, the Group considers any change in the credit quality of the trade receivable from the date credit was initially granted up to the reporting date. The concentration of credit risk is limited due to the customer base being large and unrelated.





Page 75

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

18.

Trade and other receivables (continued)

Amounts receivable from the sale of goods can be analysed as follows:


2023
2022

€'000
€'000


Amount receivable not past due
18,379
21,553

Amount receivable past due but not impaired
2,465
1,936

Amount receivable impaired (gross)
2,799
3,444

Less: impairment loss allowance
(2,799)
(3,444)


20,844
23,489


Ageing of past due but not impaired receivables:


2023
2022

€'000
€'000


0 - 30 days
2,380
1,363

31 - 60 days
69
424

61 - 90 days
16
36

90+ days
-
113


2,465
1,936


Ageing of impaired trade receivables:


2023
2022

€'000
€'000


Within payment terms
120
36

0 - 30 days
81
93

31 - 60 days
3
52

61 - 90 days
40
180

90+ days
2,555
3,083


2,799
3,444

Page 76

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

18.

Trade and other receivables (continued)

The Group entered into a factoring arrangement with BNP Paribas Fortis Factor. Under this arrangement, the Group has transferred the relevant receivables to the factor in exchange for a facility which allows it to draw down cash of up to 95% of the value of the receivable. The sale of these receivables is non-recourse up to the credit limit provided by the insurance provider subject to a deductible of up to 10%. As a result, the Group has transferred a proportion of the risks and rewards of ownership of the financial asset and therefore only recognises the asset to the extent it continues to be exposed to the changes in value in accordance with IFRS 9. The Group continues to carry the risks associated with receivables above the credit limit and consequently these receivables are recognised in the Consolidated Balance Sheet and measured at fair value and the general classification category is FVTPL.
Amounts advanced by the factor that could become repayable under the terms of the agreement are presented as secured borrowing. Cash that has not been advanced in respect of non-recourse debts sold to the factor is shown within other receivables.
The carrying amounts of receivables sold to the factor but included within trade receivables are as follows:


2023
2022

€'000
€'000


Amounts owned by the factor
19,290
15,862

Associated secured borrowing
10,215
5,264


19.
Trade and other payables


2023
2022

€'000
€'000


Non-current

Deferred income
1,361
1,174

Total non-current trade and other payables
1,361
1,174

Current

Trade payables
69,144
73,393

Other payables
5,021
7,986

Accruals
36,944
36,761

Other tax and social security
4,911
6,613

Deferred income
390
187

Payroll payables
2,159
2,145


Total current trade and other payables
118,569
127,085

Trade creditors and accruals principally comprise amounts outstanding for trade purchases and ongoing costs. The average credit period taken for trade purchases is 51 days (2022: 54 days).
There are no suppliers who represent more than 10% of the total balance of the trade payables. 


Page 77

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

19.

Trade and other payables (continued)

The deferred income arises as a result of the benefit received from an interest-free government grant received to purchase plant and equipment; this has been recognised as other operating income, €390,000 for the year (2022: €187,000). The grant is being deferred over the life of the machine.


2023
2022

€'000
€'000


Arising from government grant

Within one year
390
187

More than one year
1,361
1,174


1,751
1,361


20.


Loans and borrowings


Group

2023
2022
€'000
€'000

Non-current

Term loans - secured
25,205
20,703

Term loans - unsecured
2,846
3,326

Loans from related parties
15,518
19,738

Lease liabilities
38,348
37,867

81,917
81,634

Current

Term loans - secured
6,863
3,719

Term loans - unsecured
2,699
2,725

Overdrafts and invoice discounting facility - secured
10,215
5,264

Lease liabilities
12,243
10,650

32,020
22,358

Total loans and borrowings
113,937
103,992

The principal features of the Group’s borrowings are as follows.
Amounts payable to related parties
Amounts repayable to related parties comprise of loans from shareholders which accrue interest at 12.0% per annum on the outstanding loan note balances. These loan notes are denominated in GBP and are due to mature in 2026.

Page 78

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

20.
Loans and borrowings (continued)
 
Term loans


The Group has a number of principal term loans, the most significant are detailed below:


Country
Currency
Maturity
Interest rate
2023
€'000
2022
€'000

Austria - secured
EUR
2024 - 2032
2.20% - 4.56%
28,976
21,208

Austria - unsecured
EUR
2023 - 2030
0.99% - 4.53%
1,613
2,633

Czech - secured
CZK/EUR
2024 - 2027
2.20% - 6.36%
2,124
1,659

Spain - secured
EUR
2025
2.50%
968
1,555

Spain - unsecured
EUR
2024 - 2029
0.00% - 5.75%
3,932
3,418

37,613
30,473

The secured loans are secured by charges over specifically identified buildings, plant and machinery of the relevant legal entity.




21.


Provisions

Group



Loss making contracts
Employee provisions
Onerous lease and dilapidations
Total

€'000
€'000
€'000
€'000





At 1 January 2023
1,393
9,460
3,493
14,346


Charged to profit or loss
880
283
277
1,440


Utilised during the year
(1,302)
(2,233)
(228)
(3,763)


Actuarial losses
-
377
-
377


Interest cost
-
245
-
245


Foreign exchange movements
-
36
55
91



At 31 December 2023
971
8,168
3,597
12,736



Due within one year or less
971
83
110
1,164


Due after more than one year
-
8,085
3,487
11,572



971
8,168
3,597
12,736

Page 79

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

21.Provisions (continued)

Loss making contracts

Contract provisions are recognised where contractual or constructive obligations exist with certain customers whereby the Group is obliged to fulfil the contract even if it is loss making. This situation arose at 31 December 2023 as a result of a unprecedented increases in paper, energy and other input costs, which at the contracted selling prices means certain contracts will be loss making.

Onerous lease and dilapidations

The lease provisions relate to estimated early surrender costs and dilapidations.

Employee provisions

Employee provisions relate to legally required future costs in respect of employees.
Poland
There is a provision for severance in respect of employees in Poland, paid as a one-off sum in case of retirement or disablement. The payments are obligatory and guaranteed by the Labour Code. The methodology used "Projected unit method" is compliant with IAS 19.
Austria and Slovenia
There is a legal requirement in Austria and Slovenia to accrue for a future cost in respect of employees that commenced their employment with the Group pre-2003. A payment is due to an employee if their service is terminated following three years of continuous employment. 
The provision is accumulated for each employee and is payable based on a multiple of their final month’s salary, depending on length of service. The future cost discounted and is valued by an actuary each year. 
The provision exposes the Group to actuarial risks such as interest risk and salary risk.
Interest risk   A decrease in the discount rate will increase the liability.
Salary risk    The present value of the provision is calculated by reference to the future                salaries of plan participants. As such, an increase in the salary of the plan                participants will increase the plan’s liability.
The most recent actuarial assessment of the Austrian present value of the employee provision was carried out at 31 December 2023 by a professional actuary. The present value was measured using the projected unit credit method.

Page 80

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

21.

Provisions (continued)

The weighted average of the principal assumptions used for the purposes of the actuarial valuations were as follows:


2023
2022

%
%


Key assumptions used:

Discount rate
3.25
3.75

Expected rate of salary increase
3.20
3.20


Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate and expected salary increase. The sensitivity analysis below has been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.


Decrease in parameter
Increase in parameter
Impact of decrease
Impact of increase

Discount rate
(1.00%)
1.00%
11.20%
(9.70%)

Salary growth
(0.50%)
0.50%
(5.00%)
5.30%

The sensitivity analysis presented above may not be representative of the actual change in the provision as it is unlikely that the changes in assumptions would occur in isolation of one another as some of the assumptions may be correlated. 
In presenting the above sensitivity analysis, the present value of the employee provision has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the employee provision recognised in the Consolidated Balance Sheet.
There are long term service provisions relating to legal requirements for Austrian and Slovenian employees to accrue specific costs for employees that have been employed for at least 25 years. The provisions are calculated by an actuary and relates to length of service.
Also, in Austria there is a small defined benefit pension scheme with a liability of €11,000
 (2022: €12,000), this relates to retired employees and no further benefit is accruing.


Page 81

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
22.


Share capital

Authorised, issued and fully paid


2023
2023
2022
2022
Number
€'000
Number
€'000

Ordinary shares of £1.00 each

At 1 January and 31 December
50,000

65

50,000
 
65
 

All shares have full voting, dividend and capital distribution rights.


23.


Reserves


Foreign exchange reserve

The foreign exchange reserve represents the accumulation of non-distributable unrealised foreign exchange differences arising from the consolidation of foreign subsidiaries and operations.

Retained earnings

Retained earnings represent the accumulation of retained profits, net of dividends, which are in the form of distributable reserves.

Page 82

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

24.


Leases


Group




(i) Leases as a lessee



The average lease term was 5 years (2022: 5 years) and during the year ended 31 December 2023 the average effective borrowing rate was 6.70% (2022: 7.59%). Interest rates were fixed at the contract date. All leases were on a fixed repayment basis and no arrangements had been entered into for contingent rental payments.


Lease liabilities are due as follows:

2023
2022
€'000
€'000

Present value of lease liabilities is as follows:

Not later than one year
12,243
10,650

Between one year and five years
29,103
29,568

Later than five years
9,245
8,299

50,591
48,517


Lease liabilities included in the Consolidated Balance Sheet at 31 December
50,591
48,517


Non-current
38,348
37,867

Current
12,243
10,650

The Group’s obligations under leases are secured by the lessors’ rights over the leased assets disclosed in note 14.


The following amounts in respect of leases have been recognised in profit or loss:

2023
2022
€'000
€'000

Expenses relating to leases of low-value assets, excluding short-term leases of low-value assets
90
492

Page 83

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

25.


Derivative financial instruments

The Group is exposed to market risk from changes in foreign currency exchange rates. Where possible, the Group identifies exposures in our business that can be offset internally. Where no natural offset is identified, the Group may choose to enter into various derivative transactions. These instruments have the effect of reducing our exposure to unfavourable changes in foreign currency rates. The Group does not enter into derivative transactions for trading purposes.
Derivative transactions are governed by an established set of policies and procedures covering areas such as authorisation, counterparty exposure and hedging practices. New and existing transactions and agreements are evaluated to determine if they require derivative accounting treatment. The Group assessed that no derivatives gave rise to credit risks from non-performance by counterparties, other than credit risk generally limited to the fair value of the contracts favourable to the Group.
A number of the Group’s subsidiaries receive revenues (through either internal or external billing) in currencies other than their functional currency. As a result, the functional currency revenue will fluctuate as the currency exchange rates change. To reduce this variability, the Group assesses the need for the foreign exchange forward contracts to hedge the foreign exchange risk of forecasted collections. At 31 December 2023 the Group does not have any significant derivative financial instruments 
(2022: €nil).


26.
Share-based payments

The Group has permitted a number of senior management employees of the Group to subscribe for certain classes of shares in Walstead Holdings Limited, the ultimate parent company of the Group.  The shares were issued to the employees for cash consideration paid to Walstead Holdings Limited, at a price that was deemed to be the market value of the shares at the time of purchase by the employees.
When issued, these shares contained a service condition whereby they were subject to a potential repurchase by Walstead Holdings Limited for an amount equal to the price originally paid, in the event of the individual ceasing to be an employee of the Group.  As a result, the shares are treated as share-based payments.  The shares are instruments of the ultimate parent company and are considered to be equity-settled.
The relevant shares falling within this scope are the C and D ordinary shares of Walstead Holdings Limited.  These shares rank equally in their entitlement to their share of equity proceeds and are valued equally.  The principal difference between the shares is that the C shares became fully vested over a 3-year period from the date they were issued (over the period 2016 to 2019 for shares issued in 2016 and over the period 2021 to 2024 for shares issued in 2021; hence C shares issued in 2016 are fully vested and C shares issued in 2021 are partially vested), while the D shares remain subject to a potential repurchase if the holder ceases to be an employee.  The D shares will therefore only vest fully at an exit event, being the sale of the Group, including these shares, to an unconnected purchaser.
Management have calculated the charge arising in respect of share-based payments using the Black-Scholes option pricing model, with its key assumptions being enterprise value (based on observable multiples from comparable companies), risk free rate, volatility, expected dividend yield, and expected term to an exit event, based on management’s best estimate as of the date of issue of these shares.  There are 250,880 C shares outstanding and 180,040 D shares outstanding at 31 December 2023 (
2022: 250,880 C shares and 177,200 D shares) to which this treatment applies, including 2,840 D shares that were issued in the current year (2022: nil) and no shares that were repurchased in the current year (2022: 17,040 D shares).
No charge to the Income Statement (and similarly no corresponding entry to equity) has been made in either the current or prior year as the amounts calculated are not considered to be material to either the Group or the Company. 
Page 84

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023



27.


Related party transactions

Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and are not disclosed in this note. Details of transactions between the Group and other related parties are disclosed below.

27.1 Trading transactions


During the year, group entities entered into the following trading transactions with related parties that are not members of the Group:



Transactions in the year
Outstanding balances
2023
2022
2023
2022
€'000
€'000
€'000
€'000


Rutland Partners LLP
186
179
42
41

DM&F Investments Limited
30
28
-
-

Colombier S.A.
-
15
-
3

216
222
42
44

Walstead Finance Limited is the immediate parent of the Company. DM&F Investments Limited had a common Director and provided consultancy service to the Group. Colombier S.A. has a close relative of the Director of the Company as a non-executive Board member and provides paper converting services to the Group.
No interest is repayable with respect to these outstanding trading balances and all transactions are at arm’s length.

Page 85

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

28.


Directors' remuneration

2023
2022
€'000
€'000


Directors' emoluments
5,948
6,365

Group contributions to pension schemes
83
60

6,031
6,425

Five Directors are members of defined contribution pension schemes (2022: five).


Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Group and Company. The Group and Company considers the Key Management Personnel to only include the Directors listed on the Company Information page.

The highest paid Director's emoluments were as follows:


2023
2022
€'000
€'000


Total emoluments and amounts receivable under long-term incentive schemes (excluding shares)
1,585
1,865

Group contributions to pension schemes
-
-

1,585
1,865

Page 86

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

29.


Business combinations during the year

29.1 Assets acquired and liabilities recognised at the date of acquisition

On 1 July 2023 a newly formed subsidiary of the Group acquired certain assets including plant and machinery and the freehold property from the administrators of Gotha Druck und Verpackung GmbH & Co KG ("GD") for consideration of €10,550,000. GD is one of Germany's largest web offset printing companies located in central Germany. Upon completion the newly formed subsidiary was renamed Walstead Gotha GmbH and sits within the Group's Leykam CGU.
On 13 July 2023, Walstead Encuadernación y Acabados S.L.U. acquired certain assets including plant and machinery and inventory from the administrators of Litografia Roses SA for consideration of €490,000. On top of this, expenditure of €815,000 was incurred for the installation of these assets.




Walstead Gotha GmbH
Walstead Encuadern-ación y Acabados S.L.U.
Total
        €'000
        €'000
        €'000
Non-current assets





Property, plant and equipment

12,186

915

13,101

Intangible assets

34

-

34


12,220
915
13,135
 
Current assets





Inventories

883

285

1,168

 
Non-current liabilities





Deferred tax liabilities

(718)

-

(718)

 
Current liabilities





Trade and other liabilities

(173)

-

(173)


12,212
1,200
13,412

Page 87

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

29.Business combinations during the year (continued)

29.2 Goodwill arising on acquisition




Walstead Gotha GmbH
Walstead Encuadern-ación y Acabados S.L.U.
Total
        €'000
        €'000
        €'000
Consideration transferred

10,550

490

11,040

Fair value of identifiable net assets acquired

(12,212)

(1,200)

(13,412)

Negative goodwill arising on acquisition


(1,662)
(710)
(2,372)


29.3 Net cash outflow on acquisition

2023
€'000


Consideration paid in cash
11,040

Less: cash and cash equivalent balances acquired
-

11,040

Page 88

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

30.

Notes supporting the Consolidated Statement of Cash Flows

Group


Cash and cash equivalents comprise cash and short-term bank deposits with an original maturity of three months or less. The carrying amount of these assets is approximately equal to their fair value. 


2023
2022
€'000
€'000


Cash at bank available on demand
33,402
48,208


Cash and cash equivalents in the Consolidated Statement of Cash Flows and Consolidated Balance Sheet
33,402
48,208



Analysis of movements in net debt


1 January €'000
Cash flows
€'000
Exchange differences
€'000
Other movements
€'000
31 December
€'000

2023

Revolving credit facilities & factoring
5,264
4,139
314
498
10,215

Leases
48,517
(9,152)
1,057
10,169
50,591

Term loans
30,473
7,192
(52)
-
37,613

Loans from related parties
19,738
(5,801)
561
1,020
15,518

Total debt
103,992
(3,622)
1,880
11,687
113,937

Cash and bank balances
(48,208)
15,584
(778)
-
(33,402)

Net debt
55,784
11,962
1,102
11,687
80,535

Page 89

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023


30.

 
Notes supporting the Statement of Cash Flows (continued)


1 January €'000
Cash flows
€'000
Exchange differences
€'000
Other movements
€'000
31 December
€'000

2022

Revolving credit facilities & factoring
14,473
(8,971)
(238)
-
5,264

Leases
53,689
(6,866)
(2,063)
3,757
48,517

Term loans
35,772
(5,300)
1
-
30,473

Loans from related parties
33,812
(11,843)
(1,293)
(938)
19,738

Total debt
137,746
(32,980)
(3,593)
2,819
103,992

Cash and bank balances
(68,459)
19,091
1,160
-
(48,208)

Net debt
69,287
(13,889)
(2,433)
2,819
55,784

Other movements on 'Loans from related parties' relates to capitalised interest.
Net debt includes accrued interest on shareholder loans at 31 December 2023 of €1.1 million
 (2022: €822,000). Cash flows in respect of leases consist of €10.2 million (2022: €6.5 million) of sale and lease back financing and €9.2 million (2022: €9.6 million) of repayments of principal. Cash flows in respect of term loans consist of €12.6 million (2022: €2.4 million) of drawdowns and €5.4 million (2022: €7.8 million) of repayments. 



31.


Financial commitments

2023
2022
€'000
€'000

Future capital expenditure


Contracted for but not provided
2,761
3,354


32.


Contingent liabilities

Certain companies within the UK are part of a group banking facility. In accordance with this arrangement, credit and debit balances are grouped together to calculate a net balance. Each individual company that is party to the agreement provides a guarantee for credit balances held by other group companies up to a gross limit of £1 million. At the year end, none of the companies within this arrangement held a credit balance (2022: €nil).
The Group is involved in various contractual relationships as part of its ordinary course of business and makes provision for claims and warranties as necessary. The Board notes that as at 31 December 2023 any such provisions are immaterial and have not had a material adverse effect on our consolidated financial position, results of operations or cash flows.

Page 90

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

33.


Retirement benefit schemes

Defined contribution plans
The Group operates defined contribution retirement benefit plans, which receive fixed contributions from the Group companies, for all qualifying employees. The Group’s legal or constructive obligation for these plans is limited to the contributions. The expense recognised in the current period in relation to these contributions was €1.3 million (2022: €1.2 million).
Defined benefit schemes
The Group sponsors a small defined benefit scheme which is recognised within provisions, see note 21 for details.


34.


Financial instruments - fair values and risk management

34.1 Accounting classifications and fair values

Details of the significant accounting policies and methods adopted (including the criteria for recognition, the basis of measurement and the bases for recognition of income and expenses) for each class of financial asset, financial liability and equity instrument are disclosed in note 4.

The following table shows the carrying amounts and fair values of financial assets and financial liabilities. It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.



31 December 2023
Note
Amortised cost
Total


        €'000
        €'000

Financial assets


  




Trade receivables

 18 

20,844

20,844

Cash and cash equivalents

 30 

33,402

33,402

Other financial assets

  

7,991

7,991



  


62,237
62,237
Financial liabilities


  




Term loans

 20 

37,613

37,613

Overdrafts and invoice discounting facility

 20 

10,215

10,215

Loans from related parties

 20 

15,518

15,518

Lease liabilities

 20 

50,591

50,591

Trade and other payables

 19 

76,324

76,324



  


190,261
190,261

Page 91

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

34.Financial instruments - fair values and risk management (continued)


34.1 Accounting classifications and fair values (continued)



31 December 2022
Note
Amortised cost
Total


        €'000
        €'000

Financial assets


  




Trade receivables

 18 

23,489

23,489

Cash and cash equivalents

 30 

48,208

48,208

Other financial assets

  

8,510

8,510



  


80,207
80,207
Financial liabilities


  




Term loans

 20 

30,473

30,473

Overdrafts and invoice discounting facility

 20 

5,264

5,264

Loans from related parties

 20 

19,738

19,738

Lease liabilities

 20 

48,517

48,517

Trade and other payables

 19 

83,524

83,524



  


187,516
187,516

Page 92

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

34.Financial instruments - fair values and risk management (continued)


34.2 Financial risk management objectives

The Group’s treasury function provides services to the business, co-ordinates access to domestic and international financial markets, and monitors and manages the financial risks relating to the operations of the Group. These risks include market risk (including currency risk, interest rate risk and price risk), credit risk, liquidity risk and cash flow interest rate risk.
The Group seeks to minimise the effects of these risks by using derivative financial instruments to take exercise options on these risk exposures where necessary. The use of financial derivatives is governed by the Group’s policies approved by the Board of Directors, which provide written principles on foreign exchange risk, interest rate risk, credit risk, the use of financial derivatives and non-derivative financial instruments, and the investment of excess liquidity. Compliance with policies and exposure limits is reviewed on a continuous basis. The Group does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.


34.3 Market risk

The Group’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates. The Group enters into a variety of derivative financial instruments to manage its risk, including forward foreign exchange contracts to minimise foreign exchange exposures where there are material currency imbalances.


34.4 Foreign currency risk management

The Group undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. Exchange rate exposures are managed within approved policy parameters utilising forward foreign exchange contracts.

It is the policy of the Group to enter into forward foreign exchange contracts to cover specific foreign currency payments and receipts. Foreign currency time options were entered into with National Westminster Bank plc, to counter the foreign currency risk exposure arising from dividends and other cash receipts from overseas territories into Walstead Group Limited.


Liabilities
Assets
2023
2022
2023
2022
€'000
€'000
€'000
€'000

GBP
(92,965)
(86,942)
73,981
71,266

PLN
(31,047)
(25,418)
63,355
65,856

Others (non-EUR)
(10,018)
(13,826)
23,128
27,741

(134,030)
(126,186)
160,464
164,863

Page 93

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

34.Financial instruments - fair values and risk management (continued)


34.4 Foreign currency risk management (continued)


Foreign currency sensitivity analysis

A 1% weakening of the following key trading currencies against the Euro at 31 December would have increased/(decreased) equity and profit or loss by the amounts shown below. This calculation assumes that the change occurred at the balance sheet date and had been applied to risk exposures existing at that date

This analysis assumes that all other variables, in particular other exchange rates and interest rates, remain constant. The analysis is performed on the same basis for comparative period.



GBP impact
PLN impact
2023
2022
2023
2022
€'000
€'000
€'000
€'000

Profit or loss
(19)
69
(229)
78

Equity
52
41
405
399

A 1% percent strengthening of the above currencies against the Euro at 31 December would have had the equal but opposite effect on the above currencies to the amounts shown above, on the basis that all other variables remain constant.

The average and closing rates applied in this set of financial statements are as follows:
GBP/EUR
Average: €1.150
Closing: €1.154
PLN/EUR
Average: €0.220
Closing: €0.230

Page 94

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

34.Financial instruments - fair values and risk management (continued)


34.5 Interest rate risk management

The Group is exposed to interest rate risk because entities in the Group borrow funds at both fixed and floating interest rates. The risk is managed by the Group by maintaining an appropriate mix between fixed and floating rate borrowings. 
The Group’s exposures to interest rates on financial assets and financial liabilities are detailed in the liquidity risk management section of this note.

At the balance sheet date the interest rate profile of the Group’s interest-bearing financial instruments was:


2023
2022
€'000
€'000

Fixed rate instruments
77,883
76,220

Variable rate instruments
36,054
27,772

113,937
103,992

An increase/(decrease) of 100 basis points in interest rates at the balance sheet date would have (decreased)/increased equity and profit or loss by €320,000 (2022: €408,000). This calculation assumes that the change occurred at the balance sheet date and had been applied to risk exposures existing at that date. 
This analysis assumes that all other variables, in particular foreign currency rates, remain constant and considers the effect of financial instruments with variable interest rates. The analysis is performed on the same basis for comparative period.


34.6 Credit risk management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral where appropriate, as a means of mitigating the risk of financial loss from defaults. The Group only transacts with entities that are rated the equivalent of investment grade and above. This information is supplied by independent rating agencies where available, and if not available, the Group uses other publicly available financial information and its own trading records to rate its major customers.
The Group’s exposure and the credit ratings of its counterparties are continuously monitored, and the aggregate value of transactions concluded is spread amongst approved counterparties. Credit exposure is controlled by counterparty limits that are reviewed and approved annually. 
The credit risk on liquid funds is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies.

Page 95

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

34.Financial instruments - fair values and risk management (continued)



34.7 Liquidity risk management

Liquidity risk tables

Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has established an appropriate liquidity risk management framework for the management of the Group’s short, medium and long-term funding and liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities. 
In addition to the €33.4 million of cash, the Group has access to revolving financing and invoice financing facilities, of which €33.6 million 
(2022: €33.8 million) were unused at the balance sheet date. The Group expects to meet its other obligations from operating cash flows and proceeds of maturing financial assets.
The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include contractual interest payments and exclude the impact of netting arrangements:

Carrying amount
Total
Year 1
Years 2 to 5
More than 5 years
        €'000
        €'000
        €'000
        €'000
        €'000
31 December 2023







Term loans

37,613

37,613

9,562

19,799

8,252

Revolving credit facilities & factoring

10,215

10,215

10,215

-

-

Lease liabilities

50,591

50,591

12,243

29,103

9,245

Trade and other payables

76,324

76,324

76,324

-

-

Loans from related parties

15,518

15,518

-

15,518

-



190,261
190,261
108,344
64,420
17,497

Carrying amount
Total
Year 1
Years 2 to 5
More than 5 years
        €'000
        €'000
        €'000
        €'000
        €'000
31 December 2022







Term loans

30,473

30,473

6,444

14,865

9,164

Revolving credit facilities & factoring

5,264

5,264

5,264

-

-

Lease liabilities

48,517

48,517

10,650

29,568

8,299

Trade and other payables

83,524

83,524

83,524

-

-

Loans from related parties

19,738

19,738

-

19,738

-



187,516
187,516
105,882
64,171
17,463

Page 96

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

34.Financial instruments - fair values and risk management (continued)

34.8 Fair value measurements

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Group takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date.
Fair value for measurement and/or disclosure purposes in these consolidated financial statements is determined on such a basis. 
In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that     the entity can access at the measurement date;
• Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for       the asset or liability, either directly or indirectly;
• Level 3 inputs are unobservable inputs for the asset or liability. 



35.


Capital management

The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximising the return to shareholders through the optimisation of the debt and equity balance. 
The capital structure of the Group consists of net debt (comprising loans and borrowings less cash and bank balances, see note 30) and equity of the Group (comprising issued share capital, reserves and retained earnings as disclosed in the Consolidated Statement of Changes in Equity).


36.

Events after the reporting date


Group

In June 2024, the Group agreed the sale for two vacant freehold properties that have generated proceeds of €22.6 million.

Page 97

 
WALSTEAD GROUP LIMITED
 
 
COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2023

 
2023
2022
Note
€'000
€'000
Non-current assets
Investment in subsidiaries
39
52,429
56,949
Property, plant and equipment
40
1
2
Intangible assets
41
125
133
Trade and other receivables
41
14,235
-
66,790
57,084
Current assets
Trade and other receivables
41
5,162
26,906
Cash and cash equivalents
1,121
1,593
6,283
28,499
Total assets
73,073
85,583
Current liabilities
Trade and other payables
42
(4,491)
(4,085)
Loans and borrowings
43
(18,737)
(19,753)
(23,228)
(23,838)
Net current assets
(16,945)
4,661
Non-current liabilities
Loans and borrowings
43
(15,515)
(19,738)
(15,515)
(19,738)
Total liabilities
(38,743)
(43,576)
Net assets
34,330
42,007
Equity
Share capital
65
65
Retained earnings
35,190
43,110
Foreign exchange reserve
(925)
(1,168)
Equity attributable to the owners of the parent
34,330
42,007

Page 98

 
WALSTEAD GROUP LIMITED
 


COMPANY BALANCE SHEET (CONTINUED)
AS AT 31 DECEMBER 2023


The Company has elected to take the exemption under section 408 of the Companies Act 2006 from presenting the parent Companies profit and loss account.
During the year, management identified that intercompany receivables which were not expected to be collected in the next 12 months were recognised in current assets instead of non-current assets. Given the way that the company is structured and funded as well as the effect that this has on the users, management do not believe that this represents a material error requiring a prior year adjustment, and therefore have not restated the comparatives. €14,235,000 has been reclassified to non-current assets in the current period.
The Company’s result for the financial year amounted to a loss of €7,920
(2022: €1,852k).
The financial statements were approved and authorised for issue by the Board of Directors and were signed on its behalf by:


B G Murray
Director
Date: 14 November 2024
The notes on pages 101 to 108 form part of these financial statements.


Page 99

 
WALSTEAD GROUP LIMITED
 
 
COMPANY STATEMENT OF CHANGES IN EQUITY
AS AT 31 DECEMBER 2023

 
Share capital
Foreign exchange reserve
Retained earnings
Total equity
€'000
€'000
€'000
€'000
At 1 January 2022
65
1,206
44,962
46,233
Comprehensive income for the year
Loss for the year
-
-
(1,852)
(1,852)
Other comprehensive income
-
(2,374)
-
(2,374)
Total comprehensive income for the year
-
(2,374)
(1,852)
(4,226)
At 31 December 2022
65
(1,168)
43,110
42,007


At 1 January 2023
65
(1,168)
43,110
42,007
Comprehensive income for the year
Loss for the year
-
-
(7,920)
(7,920)
Other comprehensive income
-
243
-
243
Total comprehensive income for the year
-
243
(7,920)
(7,677)
At 31 December 2023
65
(925)
35,190
34,330

The notes on pages 101 to 108 form part of these financial statements.

Page 100

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE COMPANY FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

37.


Company accounting policies

Basis of preparation

The Company financial statements are prepared on a going concern basis and in accordance with the Companies Act 2006 and applicable UK accounting standards and present information about the Company as an individual undertaking, and not about its group.
The financial statements are prepared under the historical cost convention.
The functional currency of the Company is pound sterling ("£"), however the financial statements are presented in Euro ("€") and all values are rounded to the nearest thousand euros ("€000").
In preparing its individual financial statements under FRS 102, the Company has taken advantage of the disclosure exemptions available under that standard in relation to financial instruments, capital management, presentation of a cash flow statement, certain related party transactions and the impact of future changes in accounting standards.

The principal accounting policies adopted are the same as those set out in note 4 to the consolidated financial statements except as noted below.
Investments in subsidiaries and associates are stated at cost less, where appropriate, provisions for impairment.


38.


Staff costs

The Company has 19 employees (2022: 19).
The costs relating to these staff are borne in the Company's subsidiaries.

Page 101

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE COMPANY FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023


39.

Investment in subsidiaries


2023
2022

€'000
€'000


Cost and net book value

At 1 January 
56,949
60,130

Effect of foreign exchange rate changes
600
(3,181)

Impairment
(5,120)
-


At 31 December 
52,429
56,949

During the year ended 31 December 2023, the Company impaired its investment in Walstead Iberia Limited by €5,120k (2022: €nil).
The same underlying assumptions were applied in deriving an enterprise value as those detailed in Note 15. The necessary adjustments were then made to calculate the equity value required to appraise the Company's investment.



Details of the Company’s subsidiaries at 31 December 2023 are as follows:


Name
Place of business
Class of shares
Holding

Walstead United Kingdom Limited
UK
Ordinary
100
%

Walstead Iberia Limited
UK
Ordinary
100
%

Walstead Treasury Limited
UK
Ordinary
100
%

Walstead Leykam Limited
UK
Ordinary
100
%

Rhapsody Group Limited
UK
Ordinary
100
%

The investments in subsidiaries are all stated at cost less provision for impairments.
Further information about subsidiaries is provided in notes 16 and 46 to the financial statements.

Page 102

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE COMPANY FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023


40.
Property plant and equipment


Fixtures and fittings
Total

€'000
€'000

Cost

At 1 January 2022
75
75

Additions
2
2

Exchange adjustments
(4)
(4)

At 31 December 2022
73
73

Exchange adjustments
2
2

At 31 December 2023
75
75


Accumulated depreciation and impairment

At 1 January 2022
73
73

Charge for the year
2
2

Exchange adjustments
(4)
(4)

At 31 December 2022
71
71

Charge for the year
1
1

Exchange adjustments
2
2

At 31 December 2023
74
74


Net book value

At 31 December 2023
1
1

At 31 December 2022
2
2

Page 103

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE COMPANY FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023


41.

Intangible assets


Software
Total

€'000
€'000

Cost

At 1 January 2022
256
256

Additions
145
145

Exchange adjustments
(19)
(19)

At 31 December 2022
382
382

Additions
42
42

Exchange adjustments
9
9

At 31 December 2023
433
433


Accumulated amortisation and impairment

At 1 January 2022
234
234

Charge for the year
28
28

Exchange adjustments
(13)
(13)

At 31 December 2022
249
249

Charge for the year
53
53

Exchange adjustments
6
6

At 31 December 2023
308
308


Net book value

At 31 December 2023
125
125

At 31 December 2022
133
133

Page 104

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE COMPANY FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023


42.

Trade and other receivables


2023
2022

€'000
€'000


Non-current

Amounts owed by related parties
14,235
-

14,235
-


Current

Amounts owed by related parties
3,936
25,966

Prepayments
91
165

Group relief receivable
-
150

Deferred tax receivable
797
625

Other receivables
338
-


5,162
26,906

Amounts owed by related parties includes a deferred payment receivable of €1,750,000 (2022€11,790,000). Outstanding balance bears interest of EURIBOR + 1% and are due to mature in 2024. Other amounts owed by related parties of are interest free and are repayable on demand.



43.
Trade and other payables


2023
2022

€'000
€'000


Trade payables
457
243

Other payables
650
-

Accruals
3,008
3,408

Other tax and social security
226
280

Amounts payable to related parties
80
154

Group relief payable
70
-


4,491
4,085

Amounts payable to related parties are interest free and are repayable on demand. 


Page 105

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE COMPANY FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023


44.

Loans and borrowings


2023
2022

€'000
€'000


Non-current

Loans from related parties
15,515
19,738


Current

Loans from related parties
18,737
19,753


Total loans and borrowings
34,252
39,491

Amounts repayable of €18,737,000 (2022: €19,753,000) comprise of loans from subsidiary companies at between 1.5% and EURIBOR + 3.5% per annum on the outstanding balances and are payable on demand.
Amounts repayable of €
15,515,000 (2022: €19,738,000) comprise of loans from the Company’s immediate parent company at SONIA +2.0% per annum on the outstanding loan balances. These loans are due to mature in 2026.



45.


Share capital and share premium

The movements on these items are disclosed in note 22 to the consolidated financial statements.

Page 106

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE COMPANY FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023


46.

List of affiliated entities and controlling party

The consolidated financial statements of the Group include the holding company accounts and those of wholly-owned and controlled subsidiaries after elimination of intercompany accounts and transactions. The wholly-owned investments in these companies, over which the Group has the ability to exercise significant influence, are accounted for using the equity method. The list of entities within the Group is below.


Name
Status
Business activity
Class of shares
Registered office

Walstead Treasury Limited*
Active
Management
Ordinary
UK1

Walstead United Kingdom Limited*
Active
Management
Ordinary
UK1

Walstead UK Holdings Limited
Active
Management
Ordinary
UK1

Walstead Peterborough Limited
Active
Print and related services
Ordinary
UK1

Walstead Roche Limited
Active
Print and related services
Ordinary
UK1

Walstead Bicester Limited
Active
Print and related services
Ordinary
UK1

Walstead York Limited
Active
Print and related services
Ordinary
UK1

Walstead Press Group Limited
Active
Management
Ordinary
UK1

Walstead Heron Limited
Active
Print and related services
Ordinary
UK1

Walstead Iberia Limited*
Active
Management
Ordinary
UK1

Eurohueco S.A.U.
Active
Print and related services
Ordinary
ES1

Rotocobrhi S.A.U.
Active
Print and related services
Ordinary
ES1

Rhapsody Media S.L.U.
Active
Print and related services
Ordinary
ES1

Walstead Encuadernación y Acabados S.L.U.
Active
Management
Ordinary
ES1

Walstead Iberia S.L.U.
Active
Management
Ordinary
ES1

Walstead Leykam Limited*
Active
Management
Ordinary
UK1

Walstead CE GmbH
Active
Management
Ordinary
AU1

Let's Print Holdings AG
Active
Management
Ordinary
AU1

Walstead Moraviapress s.r.o.
Active
Print and related services
Ordinary
CZ1

Walstead Leykam Tiskana d.o.o.
Active
Print and related services
Ordinary
SL1

Walstead Gotha GmbH
Active
Print and related services
Ordinary
DE1

Walstead Leykam Druck GmbH
Active
Print and related services
Ordinary
AU1

Walstead Kraków Sp. z.o.o.
Active
Print and related services
Ordinary
PL1

Walstead Starachowice Sp. z.o.o.
Active
Print and related services
Ordinary
PL2

Walstead Deutschland GmbH
Active
Print and related services
Ordinary
DE2

Rhapsody Group Limited*
Active
Management
Ordinary
UK1

Rhapsody Limited
Active
Print and related services
Ordinary
UK1

Rhapsody CE Sp. z.o.o.
Active
Print and related services
Ordinary
PL3

* Direct undertaking
 
Page 107

 
WALSTEAD GROUP LIMITED
 
 
 
NOTES TO THE COMPANY FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023


46.List of affiliated entities and controlling party (continued)

Registered offices
UK1 18 Westside Centre, London Road, Colchester, CO3 8PH, United Kingdom
ES1  Ronda de Valdecarrizo 13, 28760 Tres Cantos, Spain
AU1 Bickfordstraße 21, 7201 Neudörfl an der Leitha, Austria
CZ1  Breclav, U Póny 3061, PSC 69002, Czech Republic
SL1  Miklavška cesta 61, 2311 Hoce, Slovenia
PL1  Obroncow Modlina 11, Krakow, 30-733, Poland
PL2  Bema 2C, Starachowice, 27-200, Poland
PL3  Aleja Armii Ludowej 14, Warsaw, 00-638, Poland
DE1  Gutenbergstraße 3, 99869 Günthersleben-Wechmar, Germany
DE2 Ulmenstraße 37-39, Frankfurt, 60325, Germany
Further details for active companies including the principal business address, can be found at: www.walstead-group.com
The Group also includes a number of historic entities that no longer trade and are classed as dormant entities. None of these entities have any income or expenditure, nor significant consolidated assets or liabilities. The entities have been included within the Group's consolidated reporting but have not been included on this list of companies for the sake of clarity and brevity.



47.


Controlling party

At 31 December 2023 the Company’s immediate parent company is Walstead Finance Limited, a company registered in England and Wales (company registered number 09927246).
The ultimate holding company is Walstead Holdings Limited, a company registered in England and Wales (company registered number 09927148). Walstead Holdings Limited forms the largest group for which consolidated financial statements are drawn up and these financial statements are available from Companies House. The registered office for Walstead Holdings Limited is 18 Westside Centre, London Road, Stanway, Colchester, Essex, England, CO3 8PH. 
The ultimate controlling party is Rutland Partners LLP. Rutland Partners LLP is held by multiple partners and is diversified. It is not significantly influenced by a single person.

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WALSTEAD GROUP LIMITED
 
 
APPENDIX: ALTERNATIVE PERFORMANCE MEASURES
FOR THE YEAR ENDED 31 DECEMBER 2023

 
The Group has a number of non-GAAP measures which are used internally to assess financial performance.
The definitions and reconciliations for these Alternative Performance Measures (APMs) are presented below:

APM
Definition
EBITDA (adjusted)
 
Earnings before interest, tax, depreciation, amortisation, profit or loss on disposal of fixed assets, restructuring and other costs.
Operating profit (adjusted)
Statutory operating profit or loss with restructuring and other costs added back.
Profit after tax (adjusted)
Statutory profit or loss after tax with restructuring and other costs added back.
Paper costs
The total cost of paper used in production after any associated rebates.
Net revenue
Statutory revenue less paper costs.
Added value
 
Added value represents net revenue less outwork and consumable purchases, effectively the valued added by the Group for the work undertaken.
Outwork and consumable purchases
 
Outwork is the costs of production provided by external contractors; consumables are commodity products used in printing, mainly ink.
Net debt
Total debt less cash.
External net debt
Net debt excluding loans from related parties.
External net debt leverage
The ratio of external net debt excluding loans from related parties to EBITDA (adjusted).
Capital employed
Gross assets (excluding cash) less current liabilities (excluding debt).
EBITDA (adjusted) return on capital employed 
EBITDA (adjusted) as a percentage of capital employed.
EBITDA (adjusted) as a percentage of net revenue
EBITDA (adjusted) divided by net revenue, expressed as a percentage.
Added value per production employee
Total added value divided by number of production employees.
Added value as a percentage of net revenue
Total added value divided by net revenue, expressed as a percentage.
Manufacturing output
The equivalent amount of A4 pages used in the manufacturing process.
Net current assets / (liabilities) - excluding loans from related parties
Net current assets (or liabilities) excluding loans from related parties from current liabilities.

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WALSTEAD GROUP LIMITED
 


APPENDIX: ALTERNATIVE PERFORMANCE MEASURES (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023


2023
2022
Note
€'000
€'000
Reconciliation of operating profit (adjusted)
Operating (loss)/profit (per Consolidated Statement of Profit or Loss)
(756)
13,871
Add back:
Restructuring and other costs
9
4,025
3,292
Operating profit (adjusted)
3,269
17,163
Reconciliation of (loss)/profit after tax (adjusted)
(Loss)/profit after tax (per Consolidated Statement of Profit or Loss)
(12,129)
6,856
Add back:
Restructuring and other costs
9
4,025
3,292
(Loss)/profit after tax (adjusted)
(8,104)
10,148
Reconciliation of net revenue
Revenue (per Consolidated Statement of Profit or Loss)
6
581,997
648,876
Less:
Paper costs
(203,935)
(257,209)
Net revenue
378,062
391,667
Reconciliation of added value
Net revenue (per above)
378,062
391,667
Less:
Outwork and consumables
(164,714)
(176,895)
Added value
213,348
214,772
Reconciliation of external net debt leverage
Net debt 
30
80,535
55,784
Less:
Loans from related parties
21,29
(15,518)
(19,738)
External net debt
65,017
36,046
EBITDA (adjusted) (per Consolidated Statement of Profit or Loss)
34,764
41,976
External net debt leverage
1.9x
0.9x

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WALSTEAD GROUP LIMITED
 


APPENDIX: ALTERNATIVE PERFORMANCE MEASURES (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023


2023
2022
Note
€'000
€'000
Reconciliation of EBITDA (adjusted) return on capital employed
Gross assets (per Consolidated Balance Sheet)
333,445
346,533
Less:
Cash and cash equivalents (per Consolidated Balance Sheet)
(33,402)
(48,208)
Gross assets excluding cash and cash equivalents
300,043
298,325
Current liabilities (per Consolidated Balance Sheet)
(151,920)
(154,089)
Less:
Current debt
20
32,020
22,358
Current liabilities excluding current debt
(119,900)
(131,731)
Capital employed
180,143
166,594
EBITDA (adjusted) (per Consolidated Statement of Profit or Loss)
34,764
41,976
EBITDA (adjusted) return on capital employed
19.3%
25.2%
Reconciliation of net current assets excluding loans from related parties (consolidated)
Net current liabilities
(57,903)
(30,203)
Add back:
-
-
Loans from related parties
-
-
Net current liabilities excluding loans from related parties
(57,903)
(30,203)
Reconciliation of net current assets excluding loans from related parties (company)
Net current (liabilities)/assets
(2,710)
4,661
Add back:
-
-
Loans from related parties
18,737
19,753
Net current assets excluding loans from related parties
16,027
24,414

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