Peters Limited

The company specialises in the supply of books and library furniture to public libraries, schools, academies, and other educational establishments across the UK, with some limited international business. Review of business and financial review During the course of the year, there was still a degree of disruption as a result of restrictions imposed as part of the Covid-19 recovery plan. Staff and customers who tested positive were still isolating, and this also had an impact on the main book distributors and our ability to receive and despatch books. Coupled with major disruption in the supply chain, caused by Covid-19, driver shortages and various global events, the business continued to face challenges on several fronts. The Directors are pleased to report that the business continued to trade strongly throughout this time, offering support to schools and other establishments. Despite the disruption, trading for the year saw an increase in sales of £3,167,311 representing a rise of 26% on the previous year. This growth was driven by an increase in our trading with schools across the country. The gross profit margin was 28.7% (2021: 27.9%). The public library book supply market continues to be challenging as a direct result of continuous price pressures from public sector buying consortiums, reducing spend on books and an extremely competitive market which includes a large general book wholesaler. The business continues to develop successful partnerships within the educational sector and these partnerships alongside the strength of the specialism within the business, have been responsible for the growth seen over the past year. Funding in the education sector remains positive as schools work to reduce the effects of the previous two years on the attainment of their pupils. Serving schools and academies remains the main focus and will drive growth over the coming year. The investment in the on-line platforms, internal infrastructure, and the increased use of technology to drive efficiency continues, and this has proved to be the right investment strategy as more customers move to online buying. The development of our own integrated IT platform, accessible to our clients, has incurred significant expenditure with a third-party development house and internal resources. This level of investment in the business has inevitably had an impact on the results in previous years, but in the view of the Board, is crucial to the long-term development of the business in the ever-changing market. The Board are pleased to report that the company returned a profit of £387k during the year ended 30th April 2022 - a demonstration that the strategy is working. The balance sheet continues to provide a strong foundation for the business with a healthy cash position to enable the business to complete the restructuring programme and meet its working capital cash flow requirements. The showroom will remain open and still provides a unique buying experience for many customers. The Directors are delighted that the company has returned a profit and believe it will continue to do so into the future, as the planned I.T investment reduces, the partnerships begin to mature, and the improvements made start to impact on the business. Principal risks and uncertainties Liquidity risk The company is cash rich and profitable, with sufficient working capital. Liquidity risk is managed through a strong banking relationship and the availability of securing financing if required. Credit risk Credit risk is the risk is mitigated by frequent reviews of customer credit terms and making reasonable bad debt provisions where deemed necessary. Due to the nature of the customer base the risk of bad debts is low. Covid-19 Covid 19 and its consequences have had a positive impact on revenues due to increased school funding. Transport delays and shortages also impacted the trade, but stability is now returning and the company is actively working to mitigate any cost impact on the business. Economic risk The company has a trading relationship with customers in Europe and Northern Ireland and has made provision for the continued supply of books following the exit from the European Union (Brexit). Less than 1% of total sales are made to customers as export and the Brexit situation does not pose material risks to the business. Future Developments We are progressing with our plans to extend our offering to include adult book supply. Two contracts have been secured and we have been included on two additional supply frameworks for both adult and children's materials. This is a slow process due to the availability of tenders and the dominance of the competition. Working stock levels are actively managed by the buying team and the stock will be increased over the coming year to ensure service levels are maintained for the online buying levels. Fast fulfillment is key to generating repeat business.