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Keepmoat Annual Report 2020

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Keepmoat has released its Group financial results for the year ending 31 October 2020.

NOTES TO THE

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Notes to the consolidated financial statements for the year ended 31 October 2020 1 – Group revenue The Group derives its revenue from the transfer of goods and services over time and at a point in time in the following major revenue streams: Year ended 31 October 2020 Year ended 31 October 2019 REVENUE £’000 £’000 Open market 288,928 464,140 Registered Provider / Development Contracts 117,025 185,668 405,953 649,808 Timing of revenue recognition At a point in time 312,770 529,470 Over time 93,183 120,338 Total 405,953 649,808 During the year ended 31 October 2020 a misclassification in the prior year comparative has been identified in respect of £4.3m of revenue that was incorrectly presented as open market and at a point in time and has now been corrected in the disclosure above as development contract revenue recognised over time. All revenue is generated in the United Kingdom. There are no single customers that account for 10% or more of the Group’s revenue. Included within revenue is £1.6m (2019: £1.1m) relating to income from government grants. At 31 October 2020, the aggregate amount of revenue allocated to unsatisfied performance obligations was £292.0m (31 October 2019: £235.5m). Approximately sixty percent of these amounts will be recognised within one year with the remainder recognised over varying contractual lengths. Contract assets and liabilities are included within “trade and other receivables” and “trade and other payables” respectively on the face of the balance sheet. Where there is a corresponding contract asset and liability in relation to the same contract, the balance shown is the net position. The timing of work performed (and thus revenue recognised), billing profiles and cash collection, results in trade receivables (amounts billed to date and unpaid), contract assets (unbilled amounts where revenue has been recognised) and customer advances and deposits (contract liabilities), where no corresponding work has yet to be performed, being recognised on the Group’s balance sheet. The reconciliation of opening and closing net contract balances is shown below: Contract assets Contract liabilities Net contract balance £’000 £’000 £’000 At 1 November 2018 13,672 (19,481) (5,809) Revenue recognised relating to performance obligations satisfied during 134,295 the year Net cash received in advance of performance obligations being satisfied (135,475) At 31 October and 1 November 2019 13,512 (20,501) (6,989) Revenue recognised relating to performance obligations satisfied during 84,871 the year Net cash received in advance of performance obligations being satisfied (116,040) At 31 October 2020 15,265 (53,423) (38,158) 80 KEEPMOAT.COM

FINANCIAL REVIEW 2 – Employees and directors EMPLOYEE BENEFIT EXPENSE DURING THE YEAR Year ended 31 October 2020 £’000s Year ended 31 October 2019 £’000s Wages and salaries 51,425 60,280 Social security costs 5,657 6,915 Other pension costs 1,773 1,542 Staff costs before grant income 58,855 68,737 Less CJRS grant income (3,541) - Staff costs 55,314 68,737 Included within staff costs is £3.5m of grant income received in respect of the Coronavirus Job Retention Scheme (CJRS) that was introduced by the Government in response to the COVID-19 pandemic. AVERAGE MONTHLY NUMBER OF PEOPLE EMPLOYED BY ACTIVITY Year ended 31 October 2020 Number Year ended 31 October 2019 Number Production 422 415 Selling and distribution 138 139 Administration 585 587 1,145 1,141 Directors’ emoluments None of the Directors are remunerated by the Group. The directors do not receive any remuneration for their role as statutory Directors. Remuneration of key management personnel The key management personnel comprise the executive board of the Keepmoat Limited Group and the non-executive directors. The remuneration of the key management personnel of the Group is set out below in aggregate for each of the categories specified in IAS 24, Related Party Disclosures. Year ended 31 October 2020 Year ended 31 October 2019 £’000 £’000 Salaries and short-term employee benefits 1,361 2,119 Retirement benefit costs 25 4 LTIP charge 500 239 1,886 2,362 Included in the year is £nil (31 October 2019: £340,000) in respect of termination costs. Also included is £500,073 (31 October 2019: £239,000) of profit and loss charges associated with the long-term incentive plan. These were not paid to the directors during the financial year but reflect future liabilities which may be paid if vesting conditions are met (note 20). ANNUAL REPORT & FINANCIAL STATEMENTS 2020 81