TIDMSSPG
RNS Number : 2141B
SSP Group PLC
28 January 2020
28 January 2020
LEI: 213800QGNIWTXFMENJ24
SSP Group plc
(the "Company")
Posting of 2019 Annual Report and Accounts and Notice of Annual
General Meeting
On 20 November 2019, the Company published its preliminary
results for the year ended 30 September 2019 and announced its
intention to return up to c.GBP100 million to shareholders by way
of a share buyback programme. The Company announces that it has
today posted to shareholders copies of its Annual Report and
Accounts for the period ending 30 September 2019, the Notice of
Annual General Meeting (the "Notice of AGM") and Form of Proxy.
Copies of the 2019 Annual Report and Accounts, the Notice of AGM
and Form of Proxy have been submitted to the National Storage
Mechanism and will shortly be available for inspection at:
www.Morningstar.co.uk/uk/nsm. Copies of the 2019 Annual Report and
Accounts and the Notice of AGM are also available on the Company's
website at www.foodtravelexperts.com.
Annual General Meeting
The Company's Annual General Meeting will be held at 11.00am on
26 February 2020 at the offices of Travers Smith LLP, 10 Snow Hill,
London, EC1A 2AL.
Regulated Information
The information set out in the Appendix, which is extracted from
the 2019 Annual Report and Accounts, is included for the purposes
of complying with DTR 6.3.5 and its requirements on how to make
public annual financial reports. The information in the Appendix
should be read in conjunction with the Company's preliminary
results for the year ended 30 September 2019 released on 20
November 2019 which can be viewed at www.foodtravelexperts.com.
Together, these constitute the material required by DTR 6.3.5 to be
communicated in unedited full text through a Regulatory Information
Service.
For further information contact:
SSP Group plc
Helen Byrne
Company Secretary & General Counsel
0207 543 3300
Investor and analyst enquiries
Sarah John
Director of Investor Relations
+44 (0) 203 714 5251
E-mail: sarah.john@ssp-intl.com
Appendix
This material should also be read in conjunction with, and is
not a substitute for reading, the full 2019 Annual Report and
Accounts.
Note and page references in the text of this Appendix refer to
note numbers and page numbers in the 2019 Annual Report and
Accounts that can be viewed on the Company's website.
1. Directors' Responsibility statement
The following responsibility statement is repeated here to
comply with DTR 6.3.5. This statement relates to, and is extracted
from, page 73 of the 2019 Annual Report and Accounts.
Responsibility is for the full 2019 Annual Report and Accounts, not
the extracted information presented in this announcement and the
full year results announcement.
The Directors are responsible for preparing the Annual Report
and the Group and parent company financial statements in accordance
with applicable law and regulations.
Company law requires the Directors to prepare Group and parent
company financial statements for each financial year. Under that
law they are required to prepare the Group financial statements in
accordance with International Financial Reporting Standards as
adopted by the European Union (IFRSs as adopted by the EU) and
applicable law. The Directors have elected to prepare the parent
company financial statements in accordance with UK accounting
standards and applicable law (UK Generally Accepted Accounting
Practice), including FRS 101 Reduced Disclosure Framework.
Under company law, the Directors must not approve the financial
statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Group and parent company, and
of their profit or loss for that period. In preparing each of the
Group 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, relevant and reliable;
-- state whether they have been prepared in accordance with
IFRSs as adopted by the EU or applicable UK accounting standards in
the case of the parent company;
-- assess the Group and parent 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 parent 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 its 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.
Under applicable law and regulations, the Directors are also
responsible for preparing a Strategic Report, Directors' Report,
Directors' Remuneration Report and Corporate Governance Statement
that complies with that law and those regulations.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company's website. Legislation in the UK governing the preparation
and dissemination of financial statements may differ from
legislation in other jurisdictions.
Responsibility statement of the Directors in respect of the
Annual Financial Report
We confirm that to the best of our knowledge:
-- the financial statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair view
of the assets, liabilities, financial position and profit or loss
of the Company and the undertakings included in the consolidation
taken as a whole; and
-- the Strategic Report/Directors' Report includes a fair review
of the development and performance of the business and the position
of the issuer and the undertakings included in the consolidation
taken as a whole, together with a description of the principal
risks and uncertainties that they face.
We consider the Annual Report and Accounts, taken as a whole, to
be fair, balanced and understandable, and provides the information
necessary for shareholders to assess the Group's position and
performance, business model and strategy.
Simon Smith
Chief Executive Officer
19 November 2019
Jonathan Davies
Chief Financial Officer
19 November 2019
2. Principal Risks
The description below of the principal risks and uncertainties
that the Company faces is extracted from pages 19 to 24 of the 2019
Annual Report and Accounts.
The following table summarises the principal risks and
uncertainties to which the Group is exposed, and the actions taken
to mitigate those risks and uncertainties. Risks are identified as
principal based on the likelihood of occurrence and the potential
impact on the Group and are listed in order of priority.
Strategic Priorities: 1: Optimising our offer to benefit from
the positive trends in our markets and driving profitable LFL
sales; 2: Growing profitable new space; 3: Optimising gross margins
and leveraging scale benefits; 4: Running an efficient and
effective business; and 5: Optimising investment using best
practice and shared resource.
The principal risks discussed in the table below are listed in
order of priority. A new risk has been added to the principal risks
since last year regarding food safety.
Risk increasing Risk decreasing No risk movement
Risk/Risk Priority Risk Description Mitigating Factors
1 Business environment The Group operates The Group monitors
and geopolitical in the travel environment the performance of
uncertainty where external factors individual business
such as the general units and markets regularly.
economic and geopolitical The Executive Directors
climate, levels of review detailed weekly
disposable income, and monthly information
weather, changing demographics covering a range of
and travel patterns KPIs, and monitor progress
could all impact both on key strategic projects
passenger numbers and with local senior management.
consumer spending. Specific short- and
There is a risk that medium-term actions
the Group is unable, are taken to address
Strategic priorities or poorly placed, to any trading performance
1, 2 respond to these external issues which are monitored
events. on an ongoing basis.
The travel environment The Group also conducts
is vulnerable to acts extensive research
of terrorism or war, to understand current
an outbreak of pandemic levels of customer
disease, or a major satisfaction and gathers
and extreme weather feedback on changing
event or natural disaster requirements.
which could reduce The Group has business
the number of passengers continuity plans in
in travel locations. place including IT
Increased protectionist disaster recovery as
trade policy and tariffs well as liaison with
in the US could result authorities and clients
in US cost inflation. in key locations to
Increasing risk to ensure that contingency
airline stability and plans are comprehensive
public concern over and complete.
climate change may
impact air travel,
either directly or
through government
policies.
---------------------- --------------------------------- -------------------------------------
2 Retention of The Group's operations The Group's local management
existing client are dependent on the structures in all its
relationships terms of airport and major geographies allow
railway station concession it to maintain strong
agreements. Growth relationships with
is dependent on the its clients and to
Group's ability to monitor performance
retain existing concession in close partnership
contracts and win new with its clients' management
contracts from either teams.
new or existing clients. The Group has an established
The Group's clients contact strategy with
may turn to alternative key clients to establish
Strategic priorities operators, cease operations, and/or maintain ongoing
1, 2 terminate contracts relationships. These
with the Group or increase are discussed between
cost pressure on the Group and local management
Group. on a regular basis.
The Group conducts
regular online and
interview-based client
surveys to ensure any
concerns are being
addressed.
Furthermore, the Group
proactively seeks to
invest in, extend and
enhance its offers
in key locations, working
in conjunction with
clients.
---------------------- --------------------------------- -------------------------------------
3 Brexit Brexit may have an The Group carefully
adverse impact on the monitors the ongoing
wider economic environment negotiations of the
in the UK and across UK's exit from the
the EU, resulting in EU, which are discussed
weaker consumer spending between Group and local
in the travel food management on a regular
and beverage markets. basis.
It would also impact The Group maintains
the travel sector directly a global portfolio
if any restrictions and regularly monitors
in the freedom of industrial the impact of foreign
air travel between exchange fluctuations
the UK and EU countries on its cash flows,
come into force. mitigating the impact
The potential depreciation from foreign exchange
of the pound could risk.
lead to cost inflation The Group's pricing
Strategic priorities pressures, particularly and range initiatives
1, 3 in the food commodity are driven by continuous
markets. monitoring of consumer
Potential restrictions spending benchmarks.
on mobility of EU nationals Various gross margin
post-Brexit may limit initiatives, including
the availability of recipe re-engineering
labour resource in and procurement rationalisation
the UK. continue to be pursued,
These risks may be in order to mitigate
compounded in the case the impact of cost
of a 'no deal' Brexit inflation.
which could further The Group continues
reduce the attractiveness to develop its UK recruitment
of the UK for investment. strategy to ensure
SSP is positioned as
an attractive employer
in the UK. There is
also an ongoing focus
on labour flexibility
and productivity to
improve retention rates
post Brexit.
---------------------- --------------------------------- -------------------------------------
4 Benefits realisation The Group is continuously The Group has completed
from efficiency seeking new programmes a detailed evaluation,
programmes to improve efficiency. planning and partial
There is a risk that implementation of its
these programmes may major change programmes,
be difficult to implement and adapts and responds
due to complexity, to feedback on an ongoing
Strategic priorities and furthermore that basis.
3, 4, 5 they could fail to To aid these programmes,
deliver the desired the Group continues
benefits, e.g. labour to utilise specialist
efficiency and minimising expertise in the business
waste and loss. where required, both
at a Group and at a
country level.
Group IT also provides
support for project
management and implementation,
using agreed standard
business processes
and controls.
---------------------- --------------------------------- -------------------------------------
5 Information The Group becomes exposed The Group has developed
security and to information security extensive IT disaster
stability and cyber threats, recovery and information
e.g. threats detailed security policies and
in the Payment Card practices, to ensure
Strategic priorities Industry Data Security that these meet the
4, 5 Standards (PCIDSS). changing landscape.
The risk of ransomware These are regularly
attacks has increased discussed and reviewed
due to a general increase by the Risk and Audit
in the prevalence of committees as well
ransomware attacks as the Board.
and their increasing The Group has also
sophistication. rolled out cyber security
The Group has commenced training across the
a major programme to business to reinforce
implement SAP Inventory data protection responsibilities
and Finance systems and cyber risks.
which can risk significant The Group's segmental
operational disruption. business model and
IT systems structure
help to ensure that
potential cyber attacks
are likely to remain
isolated locally rather
than impact the entire
Group.
A clear governance
and management structure
has been set up for
the SAP project implementation
including the engagement
of a SAP preferred
partner for the roll-out
which has significant
experience of implementing
SAP at large companies.
---------------------- --------------------------------- -------------------------------------
6 Labour laws Approximately half The Group works proactively
and unionisation of the Group's employees with all of its unions
are subject to collective to ensure that the
Strategic priorities bargaining agreements. various collective
4 These are principally bargaining agreements
in France, Germany, are appropriate for
Spain, Denmark, Finland, the Group and therefore
Norway, Sweden and minimise commercial
the United States. risks.
The Group is also subject The Group is continually
to minimum wage requirements reviewing the impact
and mandatory healthcare of changes in remuneration
subsidisation in some structures in developing
of the jurisdictions mitigating strategies
in which it operates, across the Group. The
notably North America, reviews include the
the United Kingdom ongoing impact of the
and China. Furthermore, National Living Wage
in the US, costs have and the Apprenticeship
continued to increase Levy in the United
due to the Fair Labor Kingdom, and the impact
Standards Act ('FLSA') of healthcare legislation
as well as the immigration and FLSA in the United
policy which has had States.
an adverse impact on Various labour productivity
the supply of labour. and technology initiatives
continue to be pursued
by the Group, in order
to mitigate the impact
of labour cost inflation.
---------------------- --------------------------------- -------------------------------------
7 Regulatory The laws and regulations The Group has procedures
compliance governing the Group's and processes in place
industry have become to ensure compliance
increasingly complex with local laws and
across a number of regulations. The Group
jurisdictions and a may obtain external
wide variety of areas, advice to supplement
including, among others the in-house legal
labour, employment, and compliance team.
immigration, security The Group has a Code
and safety, modern of Conduct, and Anti-Bribery
slavery, competition and Anti-Corruption
and antitrust, consumer Policy, and training
protection, data protection, has been rolled out
licensing requirements internationally. This
and related compliance. is continually being
With a UK parent company, reviewed and updated
the Group is required to improve controls
to comply with the and monitoring.
provisions of the UK The Group's procedures
Bribery Act and the under the policy include
legislation aimed at regular reporting by
preventing the facilitation the businesses to the
of tax evasion, as Risk Committee. Compliance
well as the local equivalent is monitored by Internal
laws in the territories Audit and the Risk
in which the Group Committee on an ongoing
operates. There is basis, and all alleged
a risk that the Group breaches of the Code
fails to comply with of Conduct and policy
such laws and regulations. are investigated.
The Group is required GDPR compliance, is
to comply with data determined and managed
protection laws in locally but is overseen
the jurisdictions in by the Steering Committee,
which it operates. comprising leadership
Strategic priorities The Company is subject from Group HR, Commercial
1, 2 to the EU General Data and Legal. A Global
Protection Regulation Privacy Office staffed
(GDPR) which requires with expert resource
the ability to evidence has been established
compliance against to help identify and
a large number of mandatory address global data
obligations relating protection challenges.
to personal data processing Local champions are
activities including in place to ensure
being able to respond compliance with local
to an increased range and Group rules.
of data subject rights Furthermore, terms
and mandatory personal and conditions have
data breach response been included in our
reporting. supplier and business
The UK Corporate Governance partner contracts (to
Code published by the the extent possible)
Financial Reporting to ensure that they
Council in July 2018 are GDPR compliant
impacts various areas and sign up to our
including workforce policy.
and audit, risk and We have engaged external
internal control, stakeholders, specialist firms to
culture, succession review compliance with
and diversity and remuneration. the requirements of
Furthermore, the new the 2018 Corporate
IFRS 16 accounting Governance Code. This
standard fundamentally is additional to the
changes the accounting thorough compliance
for operating leases checks and reviews
and will result in conducted by the in-house
material changes to legal department.
the financial statements. Related to IFRS 16,
Both the 2018 Corporate a new software solution
Governance code and is being implemented
IFRS 16 are applicable to ensure correct computation
to SSP's financial of the impact on the
year commencing 1 October financial statements.
2019. These new requirements
create a disclosure
and reporting risk
in the financial statements.
---------------------- --------------------------------- -------------------------------------
8 Food safety The preparation of The Group has implemented
and product food and maintenance a global safety management
compliance of the Group's supply programme, setting
New risk chain require a base minimum standards of
level of hygiene, temperature health and safety,
maintenance and traceability. fire safety and food
Non-compliance with safety across all its
food safety laws can operations and requiring
expose the Group to periodic reporting
significant reputational of performance and
damage as well as possible incident statistics.
food safety liability Within this management
claims, financial penalties programme are food
and other issues. Compliance safety standards which
with food allergen include processes to
laws came into the monitor the supply
spotlight following chain and to manage
the death of a teenager, allergens. All SSP
Natasha Ednan-Laperouse, country operations
who died after a severe are required to report
allergic reaction to on all food safety
a Pret A Manger baguette incidents (including
in 2016. From October allergens) on a quarterly
2021, foods that are basis to the Risk Committee,
pre-packaged for direct which reports on global
sale in the United safety performance
Kingdom will need to to the Audit Committee
have a label with a every six months. SSP
full ingredients list UK & Ireland currently
Strategic priorities with allergenic ingredients controls allergen management
1, 2 emphasised within it within the supply chain,
(commonly referred supported by staff
to as 'Natasha's Law'). training and unit audits.
An increase in NGO All operational staff
activism and UK public undertake allergen
awareness has seen training as part of
increased pressure mandatory training
to reduce the use of upon commencement of
plastics in the Food employment in unit.
and Beverage (F&B) All units are subject
industry. Network Rail to an unannounced 'Safe
has stated that F&B and Legal' audit by
units must be plastic-free the Health and Safety
at their sites by 2020. team on a 12 monthly
Switching to non-plastic cycle. Full technical
alternative materials guidance and clarity
could have significant of scope of Natasha's
cost impact on the Law is expected to
business. There is be provided by the
also the risk of additional Food Standards Agency
levies being imposed by the end of 2019.
by the government on This is likely to require
the use of plastic. significant investment
and therefore a working
group has been set
up to discuss all options
with relevant stakeholders,
including Health and
Safety, Purchasing,
IT, New Product Development
and Data teams.
Ongoing reviews of
operations are being
carried out in the
UK to determine plastic-free
feasibility and opportunities.
---------------------- --------------------------------- -------------------------------------
9 Changing client Changing client requirements, The Group has in place
behaviours such as splitting tenders a clear 'SSP Value
across two or more Proposition' that it
providers, seeking presents to the client
new income streams to address this risk.
through pouring rights The Group Chief Commercial
agreements, partnering and Strategy Officer
with operators in joint works closely with
ventures, developing country management
third party purchasing teams to enhance and
Strategic priorities models and favouring clarify the Group's
1, 2 franchise and local proposition to its
brand operators or clients. There is greater
partnering directly focus on developing
with brand owners, internal concepts to
may adversely affect reduce complexity and
the Group's business. costs.
Furthermore, new tender The Group's contact
processes can be more strategy with key stakeholders
complex and demand and clients helps to
increased rents. mitigate this risk.
This is informed by
its annual client survey,
which is carried out
by an independent party.
---------------------- --------------------------------- -------------------------------------
10 Execution and There is a risk that The Group, as well
mobilisation the Group may not be as regional and country
of new contracts successful in mobilising senior management teams,
new contracts and operating reviews mobilisation
them successfully. plans to ensure that
new openings are delivered
on time and in line
with the specific agreement
or contract.
The Group has strengthened
Strategic priorities the management teams,
3, 4, 5 including the business
development and property
teams in the high-growth
regions of Asia Pacific,
India and North America.
The Group also teams
up with its joint venture
partners in new territories
to provide local infrastructure
and mobilisation support.
---------------------- --------------------------------- -------------------------------------
11 Expansion into The Group's strategy The Group has strengthened
new markets involves expanding the management teams
its business in developing in Asia Pacific and
markets, including India, especially in
Asia Pacific, India, finance, business development
Eastern Europe, Middle and operations, where
East and more recently, this risk is high and
Latin America. the Group is growing.
Political, economic In addition, the Group
and legal systems and adopts a joint venture
conditions in these model in certain new
countries are generally territories to provide
less predictable than access to existing
in countries with more local infrastructure
developed institutional and expertise, as well
structures, subjecting as to help mitigate
the Group to additional the risk inherent on
commercial, reputational, entering new territories.
legal and compliance The Group has clearly
risks. defined authorisation
procedures for all
contract investments,
to ensure that they
are consistent with
the objectives set
by the Board and that
they fully consider
Strategic priorities and evaluate the risks
1, 2 inherent in expansion
into new locations
and territories.
The Group works with
in-house and external
advisors to ensure
the risks of doing
business in developing
markets are identified
and where possible,
mitigated before entering
those markets. This
includes appropriate
due diligence of potential
joint venture and other
local partners.
The Group legal team
works closely with
country legal and operational
teams to support business
development activities
and to ensure compliance
with local requirements.
The risk of working
in developing markets
is also monitored by
the Risk Committee,
Group Investment Committee
and the Audit Committee.
---------------------- --------------------------------- -------------------------------------
12 Senior management The performance of The Group continues
capability the Group depends on to review key roles
and retention its ability to attract, and succession plans
motivate and retain at a country and at
key employees. The a Group level. Senior
skills developed in resources have been
our business are highly strengthened in a number
attractive to other of strategically important
companies, which regularly and growing businesses
target our staff for and there is a programme
recruitment. in places to further
There is a risk that strengthen these going
the Group may not have forwards.
Strategic priorities sufficient management The Remuneration Committee
1, 2, 4 capability at a senior monitors the levels
level, such as country of remuneration for
leadership in both senior management and
existing and new territories, seeks to ensure that
to execute the planned they are designed to
operational efficiency attract, retain and
programmes and to support motivate the key personnel
the growth and development required to run the
of the business. Group effectively.
There is also a risk The Group carries out
that the Group may an annual talent mapping
not have sufficient exercise to identify
resources in various candidates for future
functions including roles and continues
in legal, finance and to invest in additional
IT, to meet the changing resources to support
and complex needs of change initiatives
an international and and business development
growing business. programmes.
---------------------- --------------------------------- -------------------------------------
13 Competitive Competition intensifies The Group has developed
intensity as the Group's competitors high-quality 'business-to-business'
become more sophisticated, marketing collateral
diversified, direct to clearly lay out
more resources to the the benefits of working
preparation of tenders, with SSP, which it
and take a more aggressive shares with the clients
position on commercial to help them better
terms when tendering understand the Group's
for contracts. This proposition, from both
could put pressure a quantitative and
on the Group's profitability a qualitative perspective.
and reduce the availability The Group's business
and attractiveness development team utilises
of contracts. Over the feedback from regular
the past year competition client satisfaction
Strategic priorities has notably intensified surveys when developing
1, 2 in India and China. new tenders, to ensure
they remain competitive
to clients.
The Group has clear
internal benchmarking
and investment appraisal
processes to evaluate
tender proposals and
to ensure that the
Group is able to make
a competitive offer,
as well as meet its
investment criteria.
The Group continues
to extend and update
its brand portfolio
to provide breadth
and depth as part of
a tender process.
---------------------- --------------------------------- -------------------------------------
14 Business development The Group may not have The Group prioritises
capability the capabilities in its investment in new
and investment key markets to maximise contracts as part of
business development the ongoing review
opportunities, in order of its global pipeline,
to win profitable business and the prioritisation
in new markets. of its capital investment
and resources. The
Group Investment Committee
process ensures all
Strategic priorities significant investments
1, 2 are assessed by the
CEO and CFO.
The Group has also
strengthened the management
team in Asia Pacific
and India, especially
in finance, business
development and operations.
Furthermore, the Group
works with local joint
venture partners in
new markets to access
support and advice
on business development
activities.
---------------------- --------------------------------- -------------------------------------
15 Outsourcing The Group fails to The Group continues
programmes execute outsourcing to utilise specialist
projects effectively, resources in the business
resulting in business to manage implementation
as usual being disrupted and transition projects,
and the introduction and it continues to
of new third party use external advisors
risks. to provide input into
Furthermore, any benefits the management of risks
expected from the outsourcing in such projects.
programme may not be Furthermore, the Group
realised. has included the outsourcing
centres in its Internal
Audit review scope.
Strategic priorities The outsourcing partners
5 are highly reputable
and were selected after
a rigorous tender process
and extensive due diligence.
There are also monthly
and quarterly reviews
with outsourcing partners
focusing on efficiency
and costs to ensure
shared services are
being appropriately
managed. Performance
feedback is reported
to the Executive Committee
and the Risk Committee
on a regular basis.
---------------------- --------------------------------- -------------------------------------
16 Maintenance/ The Group's success The Group continues
development is largely dependent to strengthen its dedicated
of brand portfolio upon its ability to brands and marketing
maintain its portfolio teams, to work closely
of proprietary brands with its partner brands
and the brands of its and to enable greater
franchisors, as well capacity to attract
as the appeal of those and manage a broader
brands to clients and portfolio of external
customers. brands.
Strategic priorities The loss of any significant The Group also carries
1, 2 partner brands, the out extensive customer
inability to obtain research into passengers'
rights to new brands needs and continually
over time or the diminution analyses market trends
in appeal of partner in order to enhance
brands or the Group's its brand and concept
proprietary brands, portfolio on an ongoing
could impair the Group's basis.
ability to compete Finally, the Group
effectively in tender continuously looks
processes and ultimately to strengthen the depth
have a material adverse and breadth of its
effect on the Group's brand partners.
business.
---------------------- --------------------------------- -------------------------------------
17 Tax strategy The Group may suffer The Group has a tax
reputational damage management policy which
if customers, clients is based on the Board's
and/or suppliers believe guidance to adopt a
that the Group is engaged low risk tax strategy.
in aggressive or abusive The Group also regularly
tax avoidance. reviews its tax priorities
There is a risk that and has strengthened
Strategic priorities the Group may not be the tax team at the
2, 4 tax compliant due to centre. There is also
complicated local tax increased oversight
laws across different and monitoring of key
geographical territories. tax issues at divisions
There is an increased by the Group tax team.
focus on tax governance Increased disclosure
from the tax authorities, of tax policy and tax
including the integration payments in Group financial
of systems with tax documents.
authorities. There
continues to be more
investment from OECD
into Base Erosion and
Profit Shifting (BEPS)
related initiatives.
There is a risk that
there could be wholesale
changes to how taxation
systems work based
on the data gathered
in the future. This
is also driving digitisation
resulting in a cost
and complexity impact.
---------------------- --------------------------------- -------------------------------------
3. Related Parties
The following is extracted from note 27 to the Group's
consolidated financial statements (on page 117).
Related party relationships exist with the Group's subsidiaries,
associates (note 12), key management personnel, pension schemes
(note 19) and employee benefit trust (note 21).
Subsidiaries
Transactions between the Company and its subsidiaries, and
transactions between subsidiaries, have been eliminated on
consolidation and are not disclosed in this note. Where the Group
does not own 100% of its subsidiary, significant transactions with
the other investors in the non-wholly owned subsidiary
('investor'), other than those listed in note 21, are disclosed
within this note (in the table below). Sales and purchases with
related parties are made at normal market prices.
Associates
Significant transactions with associated undertakings during the
year, other than those included in note 12, are included in the
table below.
Related party transactions
2019 2018
GBPm GBPm
------------------------------------------------------- ------ ------
Purchases from related parties(1) (3.0) (5.9)
------------------------------------------------------- ------ ------
Management fee income 2.6 2.1
------------------------------------------------------- ------ ------
Other income 1.6 1.7
------------------------------------------------------- ------ ------
Other expenses(2) (14.2) (11.5)
------------------------------------------------------- ------ ------
Amounts owed by related parties at the end of the year 10.1 2.2
------------------------------------------------------- ------ ------
Amounts owed to related parties at the end of the year - (0.5)
------------------------------------------------------- ------ ------
Operating lease commitments (18.5) (20.3)
------------------------------------------------------- ------ ------
1 The majority of purchases from related parties relates to
purchases from The Minor Food Group PCL (GBP0.9m; 2018: GBP5.2m)
which owns 51% of Select Service Partner Co. Limited.
2 The majority of other costs relate to GBP8.9m concession fees
(2018: GBP8.9m).
The Group has provided a number of guarantees to third parties
and has given guarantees to partners of consolidated non-wholly
owned subsidiaries in respect of obligations of its associates,
relating to, for example, concession agreements, franchise
agreements and financing facilities. In addition, certain
subsidiaries benefit from guarantees provided by the Group's
non-controlling interest partners to similar third parties (in
respect of obligations of the subsidiaries). These guarantees are
consistent with those provided in the normal course of business in
respect of the Group's wholly owned subsidiaries.
Remuneration of key management personnel
The remuneration of key management personnel of the Group is set
out below in aggregate for each of the categories specified in IAS
24 'Related Party Disclosures'. The Group considers key management
personnel to be the Chief Executive Officer, Chief Financial
Officer and Non- Executive Directors.
2019 2018
GBPm GBPm
----------------------------- ----- -------------
Short-term employee benefits (6.5) (5.1)
Post-employment benefits (0.4) (0.4)
Share-based payments (1.5) (2.4)
----------------------------- ----- -------------
(8.4) (7.9)
----------------------------- ----- -------------
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
NOAMZGZMNRRGGZM
(END) Dow Jones Newswires
January 28, 2020 12:22 ET (17:22 GMT)
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