25 Financial instruments continued Exposure to credit risk continued The maximum exposure to credit risk at the reporting date by business segment was:
Group 2021 £m
Company 2021 £m
Group 2020 £m
Company 2020 £m
Debtors by business segment
30.0
– –
Assurance
35.4
– –
7.1
Software Resilience
7.1
Total
37.1
–
42.5
–
The trade receivables of the Group typically comprise many amounts due from a large number of customers and represent a spread of industry sectors. The largest amount due from a single customer at the reporting date represented 3.9% (2020: 9.2%) of total Group receivables. The prior year figure is considered to be exceptionally high due to a high value of sales in the latter part of the year ended 31 May 2020 which were substantially settled by cash receipts. All of the Group’s cash is held with financial institutions of high credit rating. The provisions in respect of trade receivables are used to record expected credit losses. The Group has dedicated credit control teams which regularly review customer debt balances to assess the risk of recovery. Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group manages and minimises liquidity risk by using global cash management solutions and actively monitoring both actual and projected cash outflows to ensure that it will have sufficient liquidity to meet its liabilities when due and have headroom to provide against unforeseen obligations. In response to Covid-19, the Group has undertaken regular detailed reviews of both the potential short-term effects of the pandemic on working capital and the longer-term forecast liquidity position. Cash collections have remained strong and, though the Group took advantage of governmental tax payment deferrals during the year, these have been unwound as at 31 May 2021. Longer term, the Group has assessed its liquidity forecast as part of the viability assessment and its ability to continue trading as a going concern. For further detail on the Group’s assessment of liquidity risk refer to the Viability Statement on page 48. The following are the contractual maturities of financial liabilities, including interest payments, of the Group:
Carrying amount £m
Contractual cash flows £m
1–2 years £m
2+ years £m
5+ years £m
<1 year £m
At 31 May 2021
(33.2) (34.4) (45.2)
(34.7) (39.6) (45.2)
(0.3) (6.3)
(0.3) (5.7)
(34.1) (12.8)
–
Borrowings
(14.8)
Lease liabilities
(45.2)
–
–
–
Trade and other payables
At 31 May 2020
Borrowings
(99.2) (38.2) (46.4)
(104.4)
(1.1) (6.4)
(1.1) (5.6)
(102.2)
–
Lease liabilities
(44.8) (46.4)
(13.5)
(19.3)
Trade and other payables
(46.4)
–
–
–
The contractual cash flows for borrowings disclosed above relate to the Group’s RCF facility, which terminates in June 2024. The contractual cash flows include an estimate of the interest payable based on the assumption that the facility was fully drawn at £100m, and is calculated based on SONIA plus a margin of 0.9% based on the current leverage ratio. Currency risk The Group is exposed to currency risk on sales, purchases, cash and borrowings that are denominated in a currency other than the respective functional and presentational currency of the Group. The Group’s management reviews the size and probable timing of settlement of all financial assets and liabilities denominated in foreign currencies. The Group’s exposure to currency risk is as follows:
2021
2020
Sterling £m
EUR £m
USD £m
Other £m
Total £m
Sterling £m
EUR £m
USD £m
Other £m
Total £m
14.8
9.1 10.4
0.9 35.2
Trade receivables Other receivables
16.9
5.0 17.6
2.1 41.6
0.8
–
0.6 7.3
0.5
1.9
0.7
–
–
0.2
0.9
85.0 16.1
8.1 116.5 – (33.2)
Cash and cash equivalents
30.3 17.7 40.0
7.0 95.0 – (99.2)
(30.4) (21.5) (27.3)
– (2.8)
Borrowings
(49.9) (24.2) (20.9)
– (49.3)
(2.1) (7.6)
(8.6) (6.9)
(2.2) (3.4)
(34.4) (45.2)
Lease liabilities
(2.5)
(10.6)
(0.9) (3.3)
(38.2) (46.4)
Trade and other payables
(13.2)
(9.0)
Total
21.4 15.5
–
3.9 40.8
(47.1)
7.0 (11.3)
5.1 (46.3)
NCC Group plc — Annual report and accounts for the year ended 31 May 2021
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