TIDMACR
RNS Number : 0928R
Abbeycrest PLC
31 October 2011
Abbeycrest plc
("Abbeycrest" or "the Group")
(LSE: ACR)
Interim Results 2011
Abbeycrest plc, a leading international jewellery designer and
manufacturing company, announces its unaudited interim results for
the six months ended 31 August 2011.
Financial summary for the six months to 31 August 2011
-- Revenues of GBP12.6m (2010: GBP18.8m)
-- Operating loss pre-exceptional items of GBP0.5m (2010:
GBP0.1m)
-- Exceptional operating costs of GBP0.4m (2010: GBPNil)
-- Loss before tax of GBP1.3m (2010: GBP0.5m)
-- Reduced inventory by 23% to GBP6.6m (2010: GBP8.6m)
-- Reduced net debt by 13% to GBP6.1m (2010: GBP7.0m)
Commenting on the interim results, Simon Ashton, Executive
Chairman of Abbeycrest, said: "Our objective this year is to lay
the foundations for growth and to provide sufficient time for both
ATL and B&N to benefit from the sales and marketing initiatives
we now have underway. Whilst we are moving forward, difficult
trading conditions, coupled with the usual lag between investment
and return, mean that it is unlikely that we will see any
significant return from these initiatives until the next financial
year. We look forward to being able to update shareholders on
further progress in due course."
For further information:
Abbeycrest plc
Simon Ashton, Executive Chairman Tel:+44 (0) 113 3970
865
www.abbeycrest.co.uk
Evolution Securities Limited
Joanne Lake/Peter Steel Tel: +44 (0)113 243 1619
joanne.lake@evosecurities.com www.evosecurities.com
Rawlings Financial PR Limited
Catriona Valentine Tel: +44 (0) 1653 618016
catriona@rawlingsfinancial.co.uk
Chairman's Interim Statement
The year to 28 February 2012 is developing as a transitional
year for Abbeycrest. Trading over the first six months has been
difficult and we continue to press on with our programme of
reorganisation and reducing central costs. However, we are now also
introducing initiatives to grow sales in our two main trading
subsidiaries, Abbeycrest Thailand Limited ("ATL") and Brown &
Newirth Limited ("B&N").
Results
Group revenue for the six months to 31 August 2011 fell to
GBP12.6m (2010: GBP18.8m) resulting in an increased pre-exceptional
operating loss of GBP0.91m (2010: GBP0.46m) for the period.
However, we have a number of ongoing sales development and overhead
reduction initiatives being implemented throughout the Group, the
full benefit of which have yet to be delivered.
-- Abbeycrest's Essentials division, of which ATL is now the
major constituent part, generated turnover of GBP8.4m (2010:
GBP11.1m), a decrease of 25%, due in part to the consolidation of
Abbeycrest Hong Kong's activities into ATL and the closure of
Abbeycrest North America. The relatively small corresponding
decline in operating profit before exceptional items compared with
sales, from a profit of GBP0.2m in 2010 to a loss of GBP0.1m in
2011, has largely been achieved by the ongoing reduction in
divisional overheads.
ATL is now about to enter its traditional peak trading period
with a more focused business and a lower overhead base. Its
management continues to invest in product development and marketing
initiatives in order to maintain market share over this period and
increase it over the longer term.
-- Abbeycrest's Brands division, which is now almost exclusively
B&N, has had a difficult season, recording a turnover of
GBP4.2m (2010: GBP7.7m) and an operating loss before exceptional
items for the first half year of GBP0.2m (2010: profit GBP0.4m).
Whilst some of this was planned in order to exit lower margin or
higher risk activity, much was due to the short term loss of
management focus and margin control issues reported in the last
financial year.
Over the last six months, the newly introduced creative and
sales leadership at B&N is performing well and we expect to see
the effect of recently introduced product, service and
merchandising initiatives toward the end of the financial year, as
we enter B&N's peak season.
Funding
On 13 September 2011, the Board announced that Siam Commercial
Bank, one of the Group's senior lenders, had agreed to provide the
Group with an additional 50 million Thai Baht (c. GBP1m) of
funding.
Based on current forecasts, the Group either needs to extend the
current facilities or reduce its working capital requirement by
GBP0.2m in November 2011. The Board is in discussions with its
senior lenders and certain of its creditors to address this.
Further commentary on this matter is provided in note 1.1 to this
announcement.
Strategy
As previously reported, we continue to press on with our plans
to grow the top line in our retained businesses as follows:
-- ATL - investing in product design, marketing and key account
management to regain market share in its traditional geographic
markets and to develop the Asia-Pacific markets.
-- B&N - to build its share of the UK engagement ring market
to that of its wedding band share, through new product design,
branding and support packages.
Board Changes
On 23 September 2011, we announced that Simon Lazenby, Group
Finance Director, will resign from the Board with effect from 31
December 2011. On behalf of the Board, I would like to thank Simon
for his contribution and wish him every success for the future. The
Board is making progress with its search for Simon's successor.
Simon has agreed to assist the Group on a consultancy basis, if
required, to ensure an orderly handover of responsibilities to his
successor.
Current Trading and Outlook
Our objective this year is to lay the foundations for growth and
to provide sufficient time for both ATL and B&N to benefit from
the sales and marketing initiatives we now have underway. Whilst we
are moving forward, difficult trading conditions, coupled with the
usual lag between investment and return, mean that it is unlikely
that we will see any significant return from these initiatives
until the next financial year. We look forward to being able to
update shareholders on further progress in due course.
Simon Ashton
Chairman
31 October 2011
Condensed Consolidated Interim Income Statement
For the six months ended 31 August 2011
Six months Six months Year
to 31 August to 31 August to 28 February
2011 2010 2011
Unaudited Unaudited Audited
Note GBP'000 GBP'000 GBP'000
-------------- -------------- ----------------
Revenue 12,619 18,790 38,529
Operating costs (13,558) (18,864) (40,633)
-------------- -------------- ----------------
Operating loss (939) (74) (2,104)
Finance income - - -
Finance costs (402) (387) (866)
-------------- -------------- ----------------
Loss before taxation (1,341) (461) (2,970)
-------------- -------------- ----------------
Analysis of loss before
taxation
Loss before taxation and
exceptional items (909) (461) (1,093)
Exceptional items - operating
costs (432) - (1,777)
Exceptional items - finance
costs 2 - - (100)
-------------- -------------- ----------------
Loss before taxation (1,341) (461) (2,970)
============== ============== ================
Tax on loss - - -
-------------- -------------- ----------------
Loss for the period (1,341) (461) (2,970)
============== ============== ================
Loss per share
- basic and diluted 3 (1.8)p (1.0)p (4.0)p
Condensed Consolidated Interim Statement of Comprehensive
Income
For the six months ended 31 August 2011
Six months Six months Year
to 31 August to 31 August to 28 February
2011 2010 2011
Unaudited Unaudited Audited
Note GBP'000 GBP'000 GBP'000
-------------- -------------- ----------------
Loss for the period (1,341) (461) (2,970)
-------------- -------------- ----------------
Other comprehensive income/(costs)
Exchange gains/(losses)
on retranslation of foreign
operations 114 (341) (16)
-------------- -------------- ----------------
Other comprehensive income/(costs) 114 (341) (16)
-------------- -------------- ----------------
Total comprehensive costs
for the period attributable
to equity holders of the
parent (1,227) (802) (2,986)
============== ============== ================
Condensed Consolidated Interim Balance Sheet
As at 31 August 2011
31 August 31 August 28 February
2011 2010 2011
Unaudited Unaudited Audited
Note GBP'000 GBP'000 GBP'000
----------- ----------- ------------
Assets
Non-current assets
Goodwill 1,866 1,866 1,866
Other intangible assets 398 398 385
Property, plant and equipment 3,155 4,054 3,486
Deferred tax assets 102 102 102
----------- ----------- ------------
5,521 6,420 5,839
=========== =========== ============
Current assets
Inventories 6,603 8,575 6,964
Trade and other receivables 4,180 6,440 5,127
Cash and cash equivalents 166 134 210
----------- ----------- ------------
10,949 15,149 12,301
=========== =========== ============
Liabilities
Current liabilities
Borrowings (6,160) (6,974) (5,783)
Trade and other payables (3,883) (4,355) (4,382)
Provisions 6 (740) - (915)
----------- ----------- ------------
(10,783) (11,329) (11,080)
=========== =========== ============
Net current assets 166 3,820 1,221
Non-current liabilities
Borrowings (90) (197) (51)
Provisions 6 - (1,056) (185)
----------- ----------- ------------
(90) (1,253) (236)
----------- ----------- ------------
Net assets 5,597 8,987 6,824
=========== =========== ============
Shareholders' equity
Share capital 3,371 3,371 3,371
Share premium account 7,066 7,066 7,066
Merger reserve 199 199 199
Cumulative translation
reserve 2,452 2,013 2,338
Retained earnings (7,491) (3,662) (6,150)
----------- ----------- ------------
Total shareholders' equity 5,597 8,987 6,824
=========== =========== ============
Consolidated Statement of Changes in Equity
For the six months ended 31 August 2011
Cum
Share Share Merger translation Retained
capital premium reserve reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------- --------- --------- ------------- ---------- ---------
Balance at 1 March
2011 3,371 7,066 199 2,338 (6,150) 6,824
Loss for the period - - - - (1,341) (1,341)
Exchange gains
on retranslation
of foreign operations - - - 114 - 114
--------- --------- --------- ------------- ---------- ---------
Total comprehensive
income for the
period - - - 114 (1,341) (1,227)
--------- --------- --------- ------------- ---------- ---------
Share based payment - - - - - -
--------- --------- --------- ------------- ---------- ---------
Balance at 31
August 2011 (unaudited) 3,371 7,066 199 2,452 (7,491) 5,597
========= ========= ========= ============= ========== =========
Cum
Share Share Merger translation Retained
capital premium reserve reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------- --------- --------- ------------- ---------- ---------
Balance at 1 March
2010 3,371 7,066 199 2,354 (3,221) 9,769
Loss for the period - - - - (461) (461)
Exchange losses
on retranslation
of foreign operations - - - (341) - (341)
--------- --------- --------- ------------- ---------- ---------
Total comprehensive
income for the
period - - - (341) (461) (802)
--------- --------- --------- ------------- ---------- ---------
Share based payment - - - - 20 20
--------- --------- --------- ------------- ---------- ---------
Balance at 31
August 2010 (unaudited) 3,371 7,066 199 2,013 (3,662) 8,987
========= ========= ========= ============= ========== =========
Cum
Share Share Merger translation Retained
capital premium reserve reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------- --------- --------- ------------- ---------- ---------
Balance at 1 March
2010 3,371 7,066 199 2,354 (3,221) 9,769
Loss for the period - - - - (2,970) (2,970)
Exchange losses
on retranslation
of foreign operations - - - (16) - (16)
--------- --------- --------- ------------- ---------- ---------
Total comprehensive
income for the
period - - - (16) (2,970) (2,986)
========= ========= ========= ============= ========== =========
Share based payment - - - - 41 41
Balance at 28
February 2011
(audited) 3,371 7,066 199 2,338 (6,150) 6,824
========= ========= ========= ============= ========== =========
Condensed Consolidated Interim Cash Flow Statement
For the six months ended 31 August 2011
Six months Six months
to to Year to
31 August 31 August 28 February
2011 2010 2011
Note Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
----------- ----------- -------------
Cash flow from operating
activities
Loss after tax (1,341) (461) (2,970)
Depreciation and amortisation 374 437 865
Share-based payment - 20 41
Finance costs 402 387 966
----------- ----------- -------------
(565) 383 (1,098)
Decrease/ (increase) in
inventories 401 (812) 1,058
Decrease/(increase) in
receivables 957 (686) 855
(Decrease)/increase in
payables and provisions (844) 158 301
Finance costs paid (402) (387) (966)
Taxation paid - - (49)
----------- ----------- -------------
Net cash (outflow)/inflow
from operating activities (453) (1,344) 101
=========== =========== =============
Cash flow from investing
activities
Purchase of property,
plant and equipment (7) (68) (118)
Purchase of intangible
fixed assets - (22) (4)
----------- ----------- -------------
Net cash used in investing
activities (7) (90) (122)
=========== =========== =============
Cash flow from financing
activities
Proceeds of borrowings 1,522 1,126 -
Repayment of borrowings - - (395)
Leased gold facility movement (885) (56) 14
Capital element of finance
lease rental payments (46) (59) (120)
----------- ----------- -------------
Net cash generated from/(used
in) financing activities 591 1,011 (501)
=========== =========== =============
Net increase/(decrease)
in cash 131 (423) (522)
Cash and cash equivalents
at beginning of period (309) 213 213
----------- ----------- -------------
Cash and cash equivalents
at end of period (178) (210) (309)
=========== =========== =============
Cash and cash equivalents
comprise:
Cash and cash equivalents
in the balance sheet 166 134 210
Bank overdrafts (344) (344) (519)
----------- ----------- -------------
(178) (210) (309)
=========== =========== =============
Notes to the Condensed Consolidated Interim Financial
Statements
For the six months ended 31 August 2011
1. Basis of Preparation
1.1 Reporting entity
The condensed consolidated interim financial statements of
Abbeycrest plc ("the Company") as at and for the six months ended
31 August 2011 comprises the Company and its subsidiaries ("the
Group").
These primary statements and selected notes comprise the
unaudited condensed consolidated interim financial results of the
Company for the six months ended 31 August 2011 and 2010.
The financial information for the year ended 28 February 2011
does not comprise statutory accounts within the meaning of Section
434(3) of the Companies Act 2006. Statutory accounts for the year
ended 28 February 2011 were approved by the Board of Directors on
24 June 2011. The auditors' report on those accounts was
unqualified and did not contain a statement under section 498(2) or
498(3) of the Companies Act 2006. The auditors' report did include
reference to the material uncertainty in respect of the requirement
for the Group to raise additional financing or reduce its working
capital requirement by GBP0.4m before October 2011.
On 15 July 2011 the Group announced that due to difficult
trading conditions, including continuing rising precious metal
prices and retailer action to protect volumes, it needed to extend
its facilities further or reduce the peak working capital funding
requirement by GBP0.7m in October 2011. The Company subsequently
announced on 13 September 2011 that Siam Commercial Bank had
approved revisions to the Group's existing facility arrangements,
providing the Group with an additional 50 million Thai Baht (c.
GBP1m) of funding. However, the Group continues to face the
difficult trading conditions referred to above.
Based on the latest forecasts the Group needs either to extend
the current facilities or reduce working capital requirement by
GBP0.2m in November 2011, during the peak funding period. The Board
is currently exploring a number of options and has entered into
negotiations to extend its existing deferred payment agreement with
HM Revenue & Customs to defer a further GBP0.2m. No formal
agreement has yet been reached with HM Revenue & Customs.
For the above reasons the Directors have prepared these half
yearly unaudited condensed consolidated interim financial
statements on a going concern basis. However, these conditions
indicate the existence of a material uncertainty which may cast
significant doubt about the Group's ability to continue as a going
concern and therefore it may be unable to realise its assets and
discharge its liabilities in the normal course of business. These
unaudited condensed consolidated interim financial results do not
contain any adjustments which may be required if the Group was
unable to continue as a going concern.
1.2 Statement of compliance
The directors, Simon Ashton, Simon Lazenby, Sarah Carpin,
Kathryn Davenport and Albert Cheesebrough, confirm that to the best
of their knowledge:
-- the condensed set of financial statements has been prepared
in accordance with IAS 34 Interim Financial Reporting as adopted by
the EU.
-- the interim management report includes a fair review of the information required by:
(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being
an indication of important events that have occurred during the
first six months of the financial year and their impact on the
condensed set of financial statements; and a description of the
principal risks and uncertainties for the remaining six months of
the year; and
(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being
related party transactions that have taken place in the first six
months of the current financial year and that have materially
affected the financial position or performance of the entity during
that period; and any changes in the related party transactions
described in the last annual report that could do so.
These condensed consolidated interim financial statements were
approved by the Board of Directors and signed on behalf of the
Board by Simon Ashton on 31 October 2011.
These condensed consolidated interim financial statements have
been neither audited nor reviewed pursuant to guidance issued by
the Auditing Practices Board.
1.3 Changes in accounting policies
The interim financial statements have been prepared under the
same accounting policies, presentation and methods of computation
as were applied in the Group's latest annual audited financial
statements except as described below.
In the current financial year, the Group has adopted a number of
revised standards and interpretations but these have not had a
material impact on the Group's reporting.
1.4 Estimates
The preparation of the interim financial statements requires
management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported
amounts of assets and liabilities, income and expense. Actual
results may differ from these estimates.
The principal risks and uncertainties as disclosed in the
financial statements for the year ended 28 February 2011 are
expected to remain applicable for the remainder of the current
financial year.
In preparing these condensed consolidated interim financial
statements, the significant judgments made by management in
applying the Group's accounting policies and the key sources of the
uncertainty of estimations were the same as those that applied to
the consolidated financial statements as at and for the year ended
28 February 2011.
2 Exceptional items
Operating costs include the following exceptional income and
costs:
Six months Six months
to to Year to
31 August 31 August 28 February
2011 2010 2011
Unaudited Unaudited Audited
GBP'000 GBP\'000 GBP'000
----------- ----------- -------------
Exceptional items - operating
costs
Brands Division restructure (48) - (988)
Essentials Division restructure (384) - (509)
Onerous lease - - (280)
----------- ----------- -------------
Total exceptional items (432) - (1,777)
=========== =========== =============
Exceptional items - finance
costs
Financing costs - - (100)
----------- ----------- -------------
Total exceptional items (432) - (1,877)
=========== =========== =============
Operating costs
Exceptional operating costs comprise:
(i) the Brands Division restructure relates to stock reduction,
redundancy, professional and other costs following a fundamental
review of the business and structure of the Brands Division;
and
(ii) the Essentials Division restructure relates to stock
reduction, redundancy, professional and other costs following a
fundamental review of the business and structure of the Essentials
Division.
3 Loss per share
Basic loss per share and diluted earnings per share have been
calculated using the weighted average number of shares in issue
during the period of 73,548,641 (2010: 47,353,495).
The loss per ordinary share and diluted loss per ordinary share
are equal because share options are only included in the
calculation of diluted earnings per share if their issue would
decrease net profit or increase the net loss per share.
4 Segmental analysis
The Group has two main reportable segments:
-- Brands Division - this Division is the Group's vehicle for
increased penetration of higher value segments of the jewellery
market. Its objective is to appeal to the most fashion conscious
buyers through the creation of highly innovative branded jewellery
collections and differentiated service propositions.
-- Essentials Division - this Division represents the bulk of
the retained historic business of Abbeycrest. Its role is to
continue to exploit the Group's supply capabilities across existing
mainstream markets in much the same way as before; only with
heightened consumer focus, product differentiation and account
management. This is the Group's foundation.
Factors that management used to identify the Group's reportable
segments
The Group's reportable segments are strategic business units
that offer different products. They are managed separately because
each business requires different marketing strategies.
Measurement of operating segment profit or loss, assets and
liabilities
The accounting policies of the operating segments are the same
as those described in the summary of significant accounting
policies.
The Group evaluates performance on the basis of EBITDA and
profit or loss from operations before tax not including
non-recurring losses, such as restructuring costs and goodwill
impairment, and also excluding the effects of share-based
payments.
Segment assets exclude tax assets and assets used primarily for
corporate purposes. Segment liabilities exclude tax liabilities.
Even though loans and borrowings arise from finance activities
rather than operating activities, they are allocated to the
segments based on relevant factors (e.g. funding requirements).
Details are provided in the reconciliation from segment assets and
liabilities to the Group position.
The following shows the revenue and results by reportable
segment in the six months ended 31 August 2011:
Essentials Brands
Division Division Total
GBP'000 GBP'000 GBP'000
------------ ---------- ---------
Revenue 8,381 4,238 12,619
------------ ---------- ---------
Segment result (201) (160) (361)
------------ ---------- ---------
Unallocated costs (578)
Finance costs (402)
---------
Loss before income tax (1,341)
Tax charge -
---------
Loss for the period (1,341)
=========
Unallocated costs relate to central costs
Operating profit margins
Essentials Brands
Division Division Unallocated Total
GBP'000 GBP'000 GBP'000 GBP'000
----------- ---------- ------------ ---------
EBITDA before exceptional
items 101 (88) (146) (133)
Less
Depreciation of tangible
fixed assets (220) (64) - (284)
Amortisation of intangible
fixed assets (82) (8) - (90)
----------- ---------- ------------ ---------
Operating loss before
exceptional items (201) (160) (146) (507)
Exceptional items -
operating costs - - (432) (432)
----------- ---------- ------------ ---------
Operating loss (201) (160) (578) (939)
=========== ========== ============ =========
EBITDA margin before
exceptional items 1.2% -2.1% - -1.1%
----------- ---------- ------------ ---------
Operating margin before
exceptional items -2.4% -3.8% - -4.0%
----------- ---------- ------------ ---------
Segmental assets as at 31 August 2011 were as follows:
Essentials Brands
Division Division Unallocated Reconciliation Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------- ---------- ------------ --------------- ---------
Total assets 23,356 9,641 4,381 (20,908) 16,470
=========== ========== ============ =============== =========
The reconciling items relate to the elimination of inter-company
balances of GBP13,003,000 and fixed asset investments of
GBP7,905,000 on consolidation.
Non-current asset additions totalled GBP7,000 of which GBP2,000
related to the Brands Division and GBP5,000 related to the
Essentials Division.
The following shows the revenues and results by reportable
segment in the six months ended 31 August 2010:
Essentials Brands
Division Division Total
GBP'000 GBP'000 GBP'000
----------- ---------- ---------
Revenue 11,130 7,660 18,790
----------- ---------- ---------
Segment result 55 443 498
----------- ---------- ---------
Unallocated costs (572)
Finance costs (387)
---------
Loss before income tax (461)
Tax charge -
---------
Loss for the period (461)
=========
Unallocated costs relate to central costs.
Operating profit margins
Essentials Brands
Division Division Unallocated Total
GBP'000 GBP'000 GBP'000 GBP'000
----------- ---------- ------------ ---------
EBITDA before exceptional
items 412 523 (572) 363
Less
Depreciation of tangible
fixed assets (296) (67) - (363)
Amortisation of intangible
fixed assets (61) (13) - (74)
----------- ---------- ------------ ---------
Operating profit/(loss) 55 443 (572) (74)
=========== ========== ============ =========
EBITDA margin before
exceptional items 3.7% 6.8% - 1.9%
----------- ---------- ------------ ---------
Operating margin before
exceptional items 0.5% 5.8% - -0.4%
----------- ---------- ------------ ---------
Segmental assets as at 31 August 2010 were as follows:
Essentials Brands
Division Division Unallocated Reconciliation Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------- ---------- ------------ --------------- ---------
Total assets 31,232 16,979 21,089 (47,731) 21,569
=========== ========== ============ =============== =========
The reconciling items relate to the elimination of inter-company
balances of GBP39,826,000 and fixed asset investments of
GBP7,905,000 on consolidation.
Non-current asset additions totalled GBP90,000 of which
GBP59,000 relate to the Brands Division and GBP31,000 relate to the
Essentials Division.
The following shows the revenues and results by reportable
segment in the year ended 28 February 2011:
Essentials Brands
Division Division Total
GBP'000 GBP'000 GBP'000
------------ ---------- ---------
Revenue 25,794 12,735 38,529
------------ ---------- ---------
Segment result 120 (786) (666)
------------ ---------- ---------
Unallocated costs (1,438)
Finance costs (866)
---------
Loss before income tax (2,970)
Tax charge -
---------
Loss for the period (2,970)
=========
Unallocated costs relate to central costs.
Operating profit margins
Essentials Brands
Division Division Unallocated Total
GBP'000 GBP'000 GBP'000 GBP'000
------------ ---------- ------------ ---------
EBITDA before exceptional
items 1,360 366 (1,158) 568
Less
Depreciation of tangible
fixed assets (521) (163) - (684)
Amortisation of intangible
fixed assets (210) (1) - (211)
------------ ---------- ------------ ---------
Operating profit before
exceptional items 629 202 (1,158) (327)
Exceptional items -
operating costs (509) (988) (280) (1,777)
------------ ---------- ------------ ---------
Operating profit/(loss) 120 (786) (1,438) (2,104)
============ ========== ============ =========
EBITDA margin before
exceptional items 5.3% 2.9% - 1.5%
------------ ---------- ------------ ---------
Operating margin before
exceptional items 2.4% 1.6% - -0.8%
------------ ---------- ------------ ---------
Segmental assets as at 28 February 2011 were as follows:
Essentials Brands
Division Division Unallocated Reconciliation Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------ ---------- ------------ --------------- ---------
Total assets 17,165 12,943 14,720 (26,688) 18,140
============ ========== ============ =============== =========
The reconciling items relate to the elimination of inter-company
balances of GBP18,783,000 and fixed asset investments of
GBP7,905,000 on consolidation.
Non-current asset additions totalled GBP109,000 of which
GBP82,000 relate to the Brands Division and GBP27,000 relate to the
Essentials Division.
5 Property plant and equipment
Acquisitions and disposals
During the six months ended 31 August 2011, the Group purchased
property, plant and equipment with a cost of GBP7,000 (six months
to 31 August 2010: GBP68,000).
Capital commitments
At 31 August 2011, the Group had no capital commitments (2010:
GBPNil).
6 Provisions
Six months Six months
to to Year to
31 August 31 August 28 February
2011 2010 2011
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
----------- ----------- -------------
Onerous lease provision
Opening provision 1,100 1,326 1,326
Utilised during the period (360) (270) (506)
Provided during the period - - 280
Closing provision 740 1,056 1,100
=========== =========== =============
The Group had a tenancy agreement for property at Wilmington
Grove, Leeds which did not expire until June 2021. As part of the
reorganisation of the UK business during the year ended 28 February
2009, a decision was made to vacate the premises and management
considered the tenancy agreement to be onerous.
During the year ended 28 February 2010, management negotiated a
break clause for September 2011 and reassessed the lease
provision.
Management have assessed the obligations under the tenancy
agreement and associated unavoidable costs of GBP1.2m at 28
February 2011. Management have not included any income against the
cash outflows due to the sub-lease potential being assessed as low.
The net cash outflows have been discounted at a rate of 4.5%,
considered to be the markets current assessment of the time value
of money.
7 Seasonality of operations
The Group is subject to seasonal fluctuations, particularly the
effect of Christmas. As a consequence the first half year typically
results in lower revenues than the second half year.
The Group attempts to minimise the seasonal impact through the
management of inventories to meet demand.
8 Share-based payments
The number and weighted average price of share options are shown
in the table below:
2011 2010
Weighted Weighted
average average
2011 exercise 2010 exercise
Number price Number price
------------ ---------- ------------ ----------
Opening 7,615,475 8.53p - -
Granted - - 9,430,949 8.79p
Lapsed (2,284,642) 8.79p (2,764,241) 8.76p
------------ ---------- ------------ ----------
Closing 5,330,833 8.42p 6,666,708 8.80p
============ ========== ============ ==========
These are made up of:
Exercisable at 31 August 1,523,095 7.95p 1,414,642 8.80p
Outstanding and subject
to vesting conditions
at 31 August 3,807,738 8.61p 5,252,066 8.80p
============ ========== ============ ==========
The number and weighted average price of share options at 28
February 2011 are shown in the table below:
2011 2010
Weighted Weighted
average average
2011 exercise 2010 exercise
Number price Number price
------------ ---------- --------- ----------
Opening 45,000 103.00p 83,835 79.26p
Granted 12,330,949 8.60p - -
Lapsed (4,760,474) 7.66p (38,835) 52.00p
------------ ---------- --------- ----------
Closing 7,615,475 8.53p 45,000 103.00p
============ ========== ========= ==========
These are made up of:
Exercisable at the end
of the year 1,523,095 7.95p 45,000 103.00p
Outstanding and subject
to vesting conditions
at the end of the year 6,092,380 8.67p - 103.00p
============ ========== ========= ==========
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR LLFSEIDLTFIL
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