ACCOUNTS - **
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Company registration number:
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COMPANY INFORMATION
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CONTENTS
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STRATEGIC REPORT
FOR THE 52 WEEK PERIOD ENDED 1 JANUARY 2022
The Directors, in preparing this Strategic Report, have complied with s414C of the Companies Act 2006.
The 52 week ended 1 January 2022 is stated as 2021, whilst the 53 week ended 2 January 2021 is stated as 2020. All reference to years represents the years detailed here, unless otherwise noted.
The principle activity of the Company is the provision of employee, customer and channel engagement programmes and promotions. These services help our clients engage with their employees, channel partners, customers and prospects, to improve their business performance.
The Company's business does not expose it to any risks other than those associated with normal commercial trading. The Hawk Incentives Holdings Limited group, of which the Company is a part, performs a comprehensive review of risks each year across all businesses in the Group. Each business leader is involved in the review and tasked with identification of risks, actions to mitigate and implementing plans to address risks. The top five risks specific to the Company are identified below:
∙Failure of our infrastructure may result in non-delivery of agreed services to clients resulting in loss of business, reputational damage and potential legal claims. The Company invests heavily in its IT infrastructure and employees to ensure this risk is mitigated.
∙As part of the trading activities the Company receives money on behalf of clients. The Directors recognise that there are specific obligations when dealing money on behalf of third parties.
∙Some of the products sold by the Company, in particular relating to certain employee benefits, are attractive to our clients and their employees because of the tax savings on offer. If the government were to change or remove these savings, this could result in a loss of business. To this end, the Group is always monitoring the legislative environment and works with government wherever possible.
∙Since Brexit, whilst the Company has incurred some additional compliance costs, there has not been a material impact to the Company’s trade performance owing to the majority of our supply chain being based in the UK.
∙Similarly, there has been no impact on the Company’s trade performance or supply chain as a result of the Ukraine-Russian conflict. However, the rise in fuel prices has meant that the Group expects to see slight increases in energy and electricity costs. Although, this should not have a material impact on the profitability nor its Going Concern status.
Through an assessment of the Company's operating cash position and its 2022 and 2023 trading pipeline, the
Directors consider the business to be in a strong position to face a new incentives environment following the easing of national lockdowns. Our retailer partners and product offering are considered to cater well to the public’s demands, with a broad offering in grocery channels (where the weighting of customer spending has increased) differentiating us from our competitors. The Company has therefore not observed a materially adverse impact on its current ratio or cash position as a result of new spending behaviours after social distancing requirements were eased. Adjusting the Company's cash flow forecasts for a reduction in gross profit and paying particular attention to the Company’s cost base, the Company’s amended forecasts show the Company maintaining a positive operating cash position under a stress test related scenario planning for a period at least 12 months for the date of this report. At the end of 2021, the Company has operating cash balances of £32.5 million, the Company’s ratio of current assets to current liabilities was 1.18 and the Company has no external debt obligations. The Directors therefore consider the Company to have enough liquid reserves to cover its liabilities after allowing for potential reductions in trade for the next 12 months.
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STRATEGIC REPORT (CONTINUED)
FOR THE 52 WEEK PERIOD ENDED 1 JANUARY 2022
Turnover increased by 22.0% to £24.6 million; this was due to a continued shift in sales mix towards product sales and away from managed services, where some programmes came to an end. Gross profit increased by 23.4% to £19.9 million and gross profit margin stayed the same at 81%, also due to the change in mix. The Company made a significant £1.1m of internally developed software additions in the period to generate profit in future periods from new products and enhancements. The Directors believe that the implementation of these changes will position the business well for growth in future years.
Shareholder’s funds have decreased by £3.8 million to £17.9 million. Cash increased by £20.4m (41%) compared to the prior year driven by an increase in operating cash.
The following are our financial Key Performance Indicators:
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STRATEGIC REPORT (CONTINUED)
FOR THE 52 WEEK PERIOD ENDED 1 JANUARY 2022
Interests of employees
The interests of our employees are deep routed within everything we do at Blackhawk Network EMEA. We invest our time into regular employee briefings, so that all internal stakeholders feel informed as to company decisions and processes. We provide the opportunity for quarterly feedback via our ‘Listen Surveys’, of which the results are collated and acted upon. We also provide in depth compliance training such as anti-money laundering, code of business conduct and ethics, data privacy and information security. These trainings are mandatory once per 12-month period. Our review process, undertaken every 6 months, allows employees to envision a clear career progression and provides a forum for issues to be raised and dealt with professionally. Act fairly as between members of the company Blackhawk Network EMEA are dedicated to ensuring transparency in a fair and just manner between its members. Maintain a reputation for high standards of business conduct Our Board of Directors are experts in their field and can therefore make calculated decisions under pressure, to drive our business forward without compromising on the quality of our products, reputation or service. We are known within the payments industry as a compliant and well-managed organisation. Impact of the operations on the community and the environment In light of the marked concerns surrounding environmental health, there are a number of initiatives underway. We take into consideration all impact points along the production line and have minimised our emissions wherever possible. In terms of our products, we have focused on driving forward digital-first options. Whilst physical rewards are available to our clients, we highlight the many benefits of utilising our technology, over printed form. In relation to our workforce and offices, we employ the services of a waste removal company who sort our waste and ensure that as little as possible goes into landfill. We encourage our staff to commute via a green method and reward those who choose to travel via bike, car-share or public transport. We have installed cycling facilities and provide employees with access to our Cyclescheme benefit whereby participants agree to use their bike for commuting purposes where possible. During 2022, we launched a new Green Car Benefit scheme for our employees, offering brand new, electric or hybrid vehicles as part of a salary sacrifice scheme, thereby encouraging the use of electric and hybrid vehicles where car transport is necessary. Additionally, we have invested in our headquarters to ensure that energy is consumed in a thoughtful way. We have built some strong relationships within our local and wider community. We have a ‘charity of the year’, with several hosted fundraising events for our employees to participate in. We also encourage our employees to invest their own time in volunteering roles, with 2 working days per year granted for community outreach, per employee. We have raised multiple sums of money and donations of belongings for our local foodbank and many of our staff have participated in team volunteer days to collate and distribute donations at the shelter. Other teams have visited other local charities to help with ongoing projects.
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STRATEGIC REPORT (CONTINUED)
FOR THE 52 WEEK PERIOD ENDED 1 JANUARY 2022
Likely consequence of any decision in the long term Our Board of Directors consider the potential consequences of all decisions and appropriately weigh risk against each action. Regular reporting and a robust escalation process mean that the board remain fully informed at all times and are poised to take action if required.
This report was approved by the board and signed on its behalf.
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DIRECTORS' REPORT
FOR THE 52 WEEK PERIOD ENDED 1 JANUARY 2022
The directors present their report and the financial statements for the 52 week period ended 1 January 2022.
The 52 week ended 1 January 2022 is stated as 2021, whilst the 53 week ended 2 January 2021 is stated as 2020. All reference to years represents the years detailed here, unless otherwise noted.
Details of activities and principal risks and uncertainties can be found in the Strategic Report on page 2 and form part of this report by cross-reference.
The profit for the 52 week period, after taxation, amounted to £784k (2020 - loss £690k).
The Directors do not propose a dividend.
The directors who served during the 52 week period were:
After making enquiries, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.
Investing in research and development programs delivers product innovation within the Company. Expenditure in 2021 on research and development amounted to £42k. (2020: £115k). This is in line with expectations.
The team remains as committed and enthusiastic as always. The Company's profile allows it to attract and hire some of the best talent in the market place. The Board of Directors are committed to invest time and resources in our most valuable asset, our people.
The Company is ever mindful of the importance and value of its employees and ensures that employees are informed and involved regarding matters affecting them as employees and on the various factors affecting the performance of the Company.
The Company is exposed to financial risk through its financial assets and liabilities. The key financial risk is that the proceeds from financial assets are not sufficient to fund the obligations arising from liabilities as they fall due.
The Company's principal financial assets are cash, trade debtors and balances due from other group companies. In order to manage third party credit risk the Company sets limits for customers based on a combination of payment history and third party credit references. Credit limits are reviewed by the credit controller on a regular basis in conjunction with debt ageing and collection history. The credit risk on cash balances is limited because the counterparties are banks with high credit ratings assigned by international credit rating agencies.
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DIRECTORS' REPORT (CONTINUED)
FOR THE 52 WEEK PERIOD ENDED 1 JANUARY 2022
Blackhawk Network, of which the Company is a part, has published a Modern Slavery and Human Trafficking Statement on its UK corporate website www.blackhawknetworkeurope.com, in line with legislative requirements, and which applies to the Company.
The Company has granted an indemnity to one or more of its Directors against liability in respect of proceedings brought by third parties, subject to the conditions set out in Companies Act 2006. Such qualifying third party indemnity provisions remain in force as at the date of approving the Directors' Report. The maximum liability covered on behalf of Directors is approximately £36 million. This is a group-wide indemnity provision that benefits all Directors of all companies within the Blackhawk group.
The Company’s energy and carbon emission form part of the Group’s disclosures and are contained in the consolidated financial statements of Hawk Incentives Holdings Limited.
Disclosures on future developments have been included within the strategic report.
During 2022 the Directors have made a strategic decision to combine various legal entities in the UK to simplify the Blackhawk group structure and reduce costs. It is anticipated that the trade of two subsidiaries which are part of the wider group, Blackhawk Network Europe Limited and Intelligent Card Solutions Limited, will be transferred to Blackhawk Network EMEA Limited on 1 January 2023. It is also anticipated that the trade and assets of Cyclescheme Limited (a fellow subsidiary in the Hawk Incentives Holdings Limited subgroup) will be transferred to Blackhawk Network EMEA Limited.
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DIRECTORS' REPORT (CONTINUED)
FOR THE 52 WEEK PERIOD ENDED 1 JANUARY 2022
The auditors, Menzies LLP, will 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.
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DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE 52 WEEK PERIOD ENDED 1 JANUARY 2022
The directors are responsible for preparing the Strategic report, the Directors' report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 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 Company and of the profit or loss of the Company for that period.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies and then apply them consistently;
∙make judgements and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BLACKHAWK NETWORK EMEA LIMITED
We have audited the financial statements of Blackhawk Network EMEA Limited (the 'Company') for the 52 week period ended 1 January 2022, which comprise the Statement of comprehensive income, the Statement of financial position, the Statement of changes in equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 101 ‘Reduced Disclosure Framework’ (United Kingdom Generally Accepted Accounting Practice).
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BLACKHAWK NETWORK EMEA LIMITED (CONTINUED)
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Strategic report and the Directors' report for the financial 52 week period for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic report or the Directors' report.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BLACKHAWK NETWORK EMEA LIMITED (CONTINUED)
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 an Auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a 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 the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
The Company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation. We determined that the following laws and regulations were most significant:
∙The Companies Act 2006;
∙Financial Reporting Standard 101;
∙UK employment legislation;
∙UK tax legislation;
We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.
We understood how the Company is complying with those legal and regulatory frameworks by making inquiries to management and those responsible for legal and compliance procedures.
The engagement partner assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations. He did not identify any issues in this area.
We assessed the susceptibility of the Company’s financial statements to material misstatement, including how fraud might occur. Audit procedures performed by the engagement team included:
∙Identifying and assessing the design effectiveness of controls management has in place to prevent and detect fraud;
∙Understanding how those charged with governance considered and addressed the potential for override of controls or other inappropriate influence over the financial reporting process;
∙Challenging assumptions and judgements made by management in its significant accounting estimates; and
∙Identifying and testing journal entries, in particular any journal entries posted outside of the normal working patterns of the accounts team, or with unusual descriptions or account combinations.
As a result of the above procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas:
The application of inappropriate judgements or estimation to manipulate the financial position in the calculation of the year end provisions;
∙The posting of unusual journals and complex transactions; or
∙The use of management override of controls to manipulate results.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BLACKHAWK NETWORK EMEA LIMITED (CONTINUED)
Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' report.
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 Auditors' 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.
for and on behalf of
Chartered Accountants
Statutory Auditor
Lynton House
7-12 Tavistock Square
London
WC1H 9LT
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STATEMENT OF COMPREHENSIVE INCOME
FOR THE 52 WEEK PERIOD ENDED 1 JANUARY 2022
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STATEMENT OF FINANCIAL POSITION
AS AT 1 JANUARY 2022
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 16 to 35 form part of these financial statements.
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STATEMENT OF CHANGES IN EQUITY
FOR THE 52 WEEK PERIOD ENDED 1 JANUARY 2022
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEK PERIOD ENDED 1 JANUARY 2022
Blackhawk Network EMEA Limited (formerly Hawk Incentives Limited) is a private company limited by shares incorporated in the United Kingdom under the Companies Act 2006. The company is registered in England and Wales and the address of the registered office is disclosed on the company information page.
2.Accounting policies
The 52 week ended 1 January 2022 is stated as 2021, whilst the 53 week ended 2 January 2021 is stated as 2020. All reference to years represents the years detailed here, unless otherwise noted.
The preparation of financial statements in compliance with FRS 101 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
The Company has taken advantage of the following disclosure exemptions under FRS 101:
∙the requirements of paragraphs 45(b) and 46-52 of IFRS 2 Share-based payment
∙the requirements of IFRS 7 Financial Instruments: Disclosures
∙the requirements of paragraphs 91-99 of IFRS 13 Fair Value Measurement
∙the requirements of the second sentence of paragraph 110 and paragraphs 113(a), 114, 115, 118, 119(a) to (c), 120 to 127 and 129 of IFRS 15 Revenue from Contracts with Customers
∙the requirement in paragraph 38 of IAS 1 'Presentation of Financial Statements' to present comparative information in respect of:
- paragraph 79(a)(iv) of IAS 1;
- paragraph 73(e) of IAS 16 Property, Plant and Equipment;
- paragraph 118(e) of IAS 38 Intangible Assets;
∙the requirements of paragraphs 10(d), 10(f), 16, 38A, 38B, 38C, 38D, 40A, 40B, 40C, 40D, 111 and 134-136 of IAS 1 Presentation of Financial Statements
∙the requirements of IAS 7 Statement of Cash Flows
∙the requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors
∙the requirements of paragraph 17 and 18A of IAS 24 Related Party Disclosures
∙the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member
∙the requirements of paragraphs 130(f)(ii), 130(f)(iii), 134(d)-134(f) and 135(c)-135(e) of IAS 36 Impairment of Assets.
This information is included in the consolidated financial statements of Hawk Incentives Holdings Limited as at 1 January 2022 and these financial statements may be obtained from Companies House, Crown Way, Maindy, Cardiff CF14 3UZ.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEK PERIOD ENDED 1 JANUARY 2022
2.Accounting policies (continued)
The Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future and there are no post balance sheet events which alter this view. The Directors have considered the future expected cash flow of the Company by adjusting the cash flow forecasts for a reduction in gross profit, with the amended cash flow forecasts showing a positive operating cash position under a stress tested related scenario planning for a period of at least one year from the signing of these financial statements. For this reason, they continue to adopt the going concern basis in preparing the financial statements.
Functional and presentation currency
Transactions and balances
Revenue from reward and communication schemes is recorded across the period of the campaign. Revenue from the sales of goods and vouchers is recognised on dispatch of the goods and vouchers.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEK PERIOD ENDED 1 JANUARY 2022
2.Accounting policies (continued)
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEK PERIOD ENDED 1 JANUARY 2022
2.Accounting policies (continued)
The fair value of the award also takes into account non-vesting conditions. These are either factors beyond the control of either party (such as a target based on an index) or factors which are within the control of one or other of the parties (such as the Company keeping the scheme open or the employee maintaining any contributions required by the scheme). Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to profit or loss over the remaining vesting period. Where equity instruments are granted to persons other than employees, profit or loss is charged with fair value of goods and services received.
Software is amortised on a straight-line basis over a useful economic life of 36 months.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEK PERIOD ENDED 1 JANUARY 2022
2.Accounting policies (continued)
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Financial assets and financial liabilities are initially measured at fair value.
Financial assets
All recognised financial assets are subsequently measured in their entirety at either fair value or amortised cost, depending on the classification of the financial assets.
Debt instruments at amortised cost
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEK PERIOD ENDED 1 JANUARY 2022
2.Accounting policies (continued)
Financial liabilities
At amortised cost
Unredeemed Select codes are stated in the statement of financial position at the face value of the codes outstanding. Select codes are held on the statement of financial position until their expiry date.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEK PERIOD ENDED 1 JANUARY 2022
Critical judgements in applying the Company's accounting policies Presentation of revenue A number of the Company's revenue streams involve the sale of third party products and content. The presentation of revenue as gross or net is dependent on the judgement of whether the Company is acting as the principal or agent in the transactions, and the judgement is based on a number of considerations under FRS 101. Each individual consideration can lead to a different conclusion on whether the Company is acting as principal or agent and a degree of judgement is therefore involved as whether, on balance, it is appropriate to present these revenue streams as gross or net. Classification of sublease The classification of the new sublease as an operating lease under IFRS 16 was a matter of judgement for management. This included consideration of whether the present value of lease payments amounted to a substantial sum of the fair value of the underlying asset. Key sources of estimation uncertainty Recoverability of internally generated intangible assets During the period, management assessed the recoverability of its intangible asset portfolio which is included in the statement of financial position at £2,302,000. Based on estimated future cash flow from the products concerned, management believes that the carrying value will be recovered in full, and this situation will be monitored closely. Expected credit losses The Company applies the IFRS 9 simplified approach to measuring expected credit losses using a lifetime expected credit loss provision for trade debtors and contract assets. To measure expected credit losses on a collective basis, trade debtors and contract assets are grouped based on similar credit risk and ageing. The contract assets have similar risk characteristics to the trade debtors for similar types of contracts. The expected loss rates are based on the Company's historical credit losses. The historical loss rates are then adjusted for current and forward-looking information on macroeconomic factors affecting the Company's customers.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEK PERIOD ENDED 1 JANUARY 2022
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEK PERIOD ENDED 1 JANUARY 2022
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEK PERIOD ENDED 1 JANUARY 2022
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEK PERIOD ENDED 1 JANUARY 2022
Page 26
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEK PERIOD ENDED 1 JANUARY 2022
Page 27
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEK PERIOD ENDED 1 JANUARY 2022
Page 28
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEK PERIOD ENDED 1 JANUARY 2022
15.Tangible fixed assets (continued)
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEK PERIOD ENDED 1 JANUARY 2022
Page 30
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEK PERIOD ENDED 1 JANUARY 2022
The lease liability will be paid in installments over the remaining lease term of 8 years.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEK PERIOD ENDED 1 JANUARY 2022
Page 32
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEK PERIOD ENDED 1 JANUARY 2022
21.Leases (continued)
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEK PERIOD ENDED 1 JANUARY 2022
23.Deferred taxation (continued)
The Company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension costs represents contributions payable by the Company to the fund and are disclosed in Employees note. There were contributions payable from the fund at the reporting date of £166k (2020: £177k).
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEK PERIOD ENDED 1 JANUARY 2022
During 2022 the Directors have made a strategic decision to combine various legal entities in the UK to simplify the Blackhawk group structure and reduce costs. It is anticipated that the trade of two subsidiaries which are part of the wider group, Blackhawk Network Europe Limited and Intelligent Card Solutions Limited, will be transferred to Blackhawk Network EMEA Limited on 1 January 2023. It is also anticipated that the trade and assets of Cyclescheme Limited (a fellow subsidiary in the Hawk Incentives Holdings Limited subgroup) will be transferred to Blackhawk Network EMEA Limited. As at 1 January 2022, the ultimate parent company is BHN Holdings, Inc. which is incorporated in the USA and whose registered office is 6220 Stoneridge Mall Rd, Pleasanton, CA 94588, USA. BHN Holdings, Inc. is majority owned by investment funds affiliated with Silver Lake Partners and investment funds affiliated with P2 Capital Partners. There is no individual who, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, owns 25% or more of the equity interests of BHN Holdings, Inc.
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