Notes to the Financial Statements continued for the year ended 31 May 2021
24 Cash and cash equivalents and borrowings Cash and cash equivalents Cash and cash equivalents comprise:
Group 2021 £m
Company 2021 £m
Group 2020 £m
Company 2020 £m
Cash at bank and in hand
116.5
0.6
95.0
6.8
Borrowings are analysed as follows:
Group 2021 £m
Company 2021 £m
Group 2020 £m
Company 2020 £m
Maturity
Non-current liabilities:
33.2
–
Revolving credit facility
2024
99.2
–
Total borrowings
33.2
–
99.2
–
The maturity profile is as follows:
Group 2021 £m
Company 2021 £m
Group 2020 £m
Company 2020 £m
–
– –
Less than one year Two to five years
–
– –
33.2
99.2
Total borrowings
33.2
–
99.2
–
In June 2019, the Group renegotiated its previous term loan and multi-currency revolving credit facilities into a new fully revolving credit facility (RCF) of £100m with a new five year term up to June 2024, on similar terms (pricing and covenants). The interest payable on drawn down funds ranges from 0.9% to 2.0% above LIBOR subject to the Group’s leverage (net debt 1 to Adjusted EBITDA ¹) ratio. Under the new arrangements, the Group can request an additional accordion facility to increase the total size of the revolving credit facility by up to £75m. The Group is required to comply with financial covenants for leverage (net debt 1 to Adjusted EBITDA 1 ), interest cover (Adjusted EBITDA 1 to interest charge) and provisions relating to guarantor coverage such that guarantors must exceed a prescribed threshold of the Group’s gross assets and Adjusted EBITDA 1 . Covenants are tested bi-annually at 31 May and 30 November each year. Arrangement fees incurred of £1.0m are being amortised over the term. Since the new facility is on broadly similar pricing terms to the previous facility, the refinancing has been accounted for as a non-substantial modification with no gain or loss arising on modification. On 12 May 2021, the Group entered into a new Term Loan Facility Agreement. The facility made available under the Facility Agreement (the ‘Term Facility’) is a $70m amortising term loan facility, to fund the acquisition of the IPM Software Resilience business. The rate of interest on each loan under the Term Facility is the percentage rate per annum which is equal to the aggregate of a compounded rate based on the secured overnight financing rate (SOFR) administered by the Federal Reserve Bank of New York and the margin (based on a leverage ratchet varying from 1.40% to 2.65% per annum). The Term Facility is repaid in annual instalments of $23.3m on each of 10 June 2022 and 10 June 2023, with a final instalment of $23.4m payable on 10 June 2024. Arrangement fees incurred of £0.3m will be amortised over the term. The Term Facility Agreement also contains financial covenants relating to leverage and interest cover and provisions relating to guarantor coverage consistent with the RCF. The RCF is drawn in short to medium-term tranches of debt that are repayable within 12 months of draw-down. These tranches of debt can be rolled over provided certain conditions are met, including compliance with all loan terms. The Group considers that it is highly unlikely it would not be in compliance and therefore be unable to exercise its right to roll over the debt. The Directors therefore believe that the Group has the ability and the intent to roll over the drawn RCF amounts when due and consequently has presented the RCF as a non-current liability. As at 31 May 2021, the Group had committed bank facilities of £149.3m (2020: £100.0m), of which £33.8m (2020: £100.0m) had been drawn under these facilities, leaving £115.5m (2020: £nil) of undrawn facilities. Unamortised arrangement fees of £0.6m (2020: £0.8m) have been offset against the amounts drawn down, resulting in a carrying value of borrowings at 31 May 2021 of £33.2m (2020: £99.2m). The fair value of borrowings is not materially different to its amortised cost.
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NCC Group plc — Annual report and accounts for the year ended 31 May 2021
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