Annual report and accounts 2023 - Flipbook - Page 179
Strategic Report
20.
Corporate Governance
Accounts
Trade and other receivables
Group
Company
2023
£m
2022
£m
2023
£m
2022
£m
Trade receivables
Less: loss allowance
56.0
(0.2)
41.7
(0.1)
39.1
(0.1)
34.7
(0.1)
Trade receivables – net
Prepayments
Amounts due by subsidiary companies
55.8
4.6
–
41.6
2.7
–
39.0
3.8
1.9
34.6
2.3
0.3
60.4
44.3
44.7
37.2
Trade receivables
The average credit period on sales of goods is 60 days. No interest is charged on outstanding trade receivables.
The Group always measures the loss allowance for trade receivables at an amount equal to lifetime ECL. The expected credit losses on trade receivables are estimated using
a provision matrix by reference to past default experience on the debtor and an analysis of the debtor’s current financial position, adjusted for factors that are specific to the
debtors, general economic conditions of the industry in which the debtors operate and an assessment of both the current as well as the forecast direction of conditions at
the reporting date. Accordingly, the credit risk profile of these assets is presented based on their past due status in terms of the provision matrix.
The Group writes off a trade receivable when there is information that the debtor is in severe financial difficulty and there is no realistic prospect of recovery,
e.g. when the debtor has been placed under liquidation or has entered into bankruptcy proceeding. None of the trade receivables that have been written off are
subject to enforcement activities.
The maximum exposure for both the Group and the Company to credit risk for trade receivables are the balances in the table above.
The following table details the risk profile of trade receivables based on the Group’s provision matrix. As the Group’s historical credit loss experience does not show
significantly different loss patterns for different customer segments, the provision for loss allowance based on past due status is not further distinguished between the Group’s
different customer base.
The Group’s and Company’s most significant customer, a UK major customer, accounts for £9.1m of the trade receivables carrying amount at 29 January 2023
(30 January 2022: £9.4m).
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