Half Yearly Report
16 Novembre 2010 - 8:00AM
UK Regulatory
TIDMHAR
RNS Number : 2172W
Harvard International PLC
16 November 2010
16 November 2010
Harvard International plc (AIM: HAR)
Interim Results for the six months ended 30 September 2010
Harvard International plc ("Harvard", "the Company" or "the Group") is a
distributor of consumer electronic goods in the UK and Australia
KEY POINTS
· Overall market demand for consumer electronic products has been weak,
with a deteriorating trend in both the UK and Australia
· Sales for the current period fell to GBP30.1m (2009: GBP42.5m) resulting
in an operating loss of GBP0.6m (2009: total operating loss GBP5.5m; operating
profit from continuing operations GBP0.2m)
· Gross margin declined for the Group to 11% from 13%, primarily as a
result of disappointing sales in Australia
· In line with the Group's business plan new appointments have been made
which strengthen the Group's technical, product and marketing resource
· UK set top box sales were negatively affected by the timetable of the
digital switch over. However the programme's regional roll out is expected to
have a positive impact in the second half
· Demand for Apple accessories continues to buck negative market trends and
supported by favourable product reviews, iLuv brand awareness is now widening,
retailer interest growing and orders starting to meet expectations
· GBP10m special dividend distribution made to shareholders
Bridget Blow, Chairman, comments:
"Despite difficult market conditions considerable progress is being made in
establishing the Group's growth platform through new investment in people and
product development. Group Results for the full year are expected to be in line
with the Board's expectations."
16 November 2010
ENQUIRIES:
+------------------------------------------+----------------------+
| Harvard International plc | Tel: 020 8238 7650 |
+------------------------------------------+----------------------+
| Mike Ashley, Chief Executive | |
+------------------------------------------+----------------------+
| Colin Grimsdell, Finance Director | |
+------------------------------------------+----------------------+
| | |
+------------------------------------------+----------------------+
| | |
+------------------------------------------+----------------------+
| Investec Bank plc | Tel: 020 7597 4000 |
| James Grace | |
+------------------------------------------+----------------------+
| | |
+------------------------------------------+----------------------+
| | |
+------------------------------------------+----------------------+
| | |
+------------------------------------------+----------------------+
CHAIRMAN'S STATEMENT
Group Performance
Against a backdrop of continued weakness in the global economy, particularly in
the consumer electronics sector, the Group has continued with the programme to
improve operational efficiency and address growth opportunities as identified in
the strategic review.
Sales for the current period fell to GBP30.1m (2009: GBP42.5m) and the Group
recorded an operating loss of GBP0.6m (2009: total operating loss GBP5.5m;
operating profit from continuing operations was GBP0.2m). Gross margin for the
Group declined to 11% from 13%, largely as a result of the lower sales in
Australia. Gross margins in the UK remained broadly flat.
The comparative sales figures were also impacted by the timing of the UK's
digital switch over programme and the exceptionally strong performance in
Australia in the previous year.
Net cash at the end of the period remained strong at GBP25.1m, prior to the
payment of a GBP10.1m special dividend to shareholders in October. Working
capital and debtor days remain tightly managed.
Considerable progress is being made in establishing the Group's growth platform
through new investment in people and product development. The benefits of the
programme are already becoming apparent and are expected to progressively
strengthen financial performance.
Dividend
A special GBP10.1m dividend was paid to shareholders on 15 October 2010.
Board changes
Geoff Brady was appointed as an Independent Non-Executive Director. He is
currently the Non-Executive Chairman of Robert Dyas, a convenience non-food
retailer. As well as customer facing skills Geoff brings substantial procurement
and supply chain knowledge to the Boardroom. Paul Selway-Swift retired as a
Director of the Company at the Annual General Meeting 2010, where it was noted
that the Company wished to thank Paul for his substantial contribution to the
Group over the last twelve years.
Outlook
Although the first half was lower than expectation, the development of the
Group's growth platform continues on target and further progress is expected in
the second half.
The Group is now trading in line with the Board's expectations and expects to
deliver an improved financial performance in the second half led by the digital
switch over timetable and widening distribution of iLuv products. Current
economic forecasts suggest that demand for consumer electronics will remain
under pressure into the 2011/2012 financial year.
BRIDGET BLOW
Chairman
16 November 2010
CHIEF EXECUTIVE OFFICER'S REPORT
Market Background
In the UK, the consumer electronics market has weakened year on year, and
conditions have deteriorated further in recent months. The UK set top box (STB)
market has been impacted by a gap in the digital switch over timetable but
demand for Apple accessories continues to be strong, bucking the market trend,
and being supported by new product launches, notably the iPhone4 and iPad.
In Australia, a succession of interest rate increases and the withdrawal of
financial stimulus by the government has dampened consumer spending. As part of
the Group's integration plan, Harvard's Australian business is being more
closely aligned with that of the UK. This will allow the Group to develop
products for both markets simultaneously creating the opportunity to benefit
from economies of scale.
Digital STB
The Group's strategic review identified digital STB's as a target market which
can provide a sustainable platform for the Group's growth and development.
Harvard currently holds a strong position in the broad STB sector but to
maintain and extend this into higher value, more technically advanced products
there is a requirement for further investment in new product development.
In both the UK and Australia, the wider adoption of High Definition and Digital
TV Recording functionality, and the creation of combined Digital Broadcasting
and Broadband platforms, will support demand for technically advanced STB's.
To address these opportunities the management team has prioritised the need to
considerably upgrade the Group's in-house technical capability. A new Group CTO,
who possesses extensive internet enabled STB experience, has been appointed to
lead the team. This has begun the process of strengthening the Group's technical
resource and engineering skill set. The Group is developing strategic
partnerships with software providers which will competitively differentiate
Harvard's products. This will position the Group to supply internet enabled,
STB's which are compatible with different digital platforms in both the UK and
Australia.
A new range of Digital TV Recorders, which enable viewers to pause, rewind and
record live TV, is being developed to address growing consumer interest in this
higher value market segment. Key deliverables include functionality,
reliability, ease of use and affordability. The first models are expected to be
launched in the second half of 2011.
Freeview High Definition STB's were launched at the start of the period and over
time High Definition is forecast to become the standard viewing medium. After a
slow start, the growing number of free to air channels being broadcast in High
Definition, combined with falling retail prices, is expected to further
stimulate demand.
In the UK, 2011 will see the launch of "YouView", an integrated digital
broadcast and internet broadband service. The specified High Definition STB will
be able to provide consumers with access to Freeview and last 7 days catch-up TV
and will have Digital TV Recorder capability.
The UK's digital switch over timetable continues to convert viewers to digital
TV. Only 11% of households switched in 2010 but the programme expands
substantially in both 2011 and 2012, when 33% of households will switch over
each year. Harvard is a selected partner to supply easy to use STB's to the UK
Government's targeted help scheme.
iLuv (Apple accessories)
The growth and success of Apple's products has created a large market for
accessories including docking stations, headphones and peripherals such as cases
and covers. The accessories market is highly fragmented, with many suppliers but
no dominant players. The Board believes there to be a significant opportunity to
grow market share.
In 2009 Harvard secured the UK distribution rights for the iLuv brand of Apple
product accessories. Uniquely iLuv covers Apple's complete portfolio of iPod,
iPhone and iPad and, with new lines continuously being added, there is a strong
product pipeline driving the brand forward and widening market opportunity.
As part of the Group's strategy to exploit the brand's potential, Harvard has
started to strengthen the commercial team. iLuv is a proven high quality product
range, with broad market appeal, which to deliver its potential requires
effective marketing and retailer support. Supported by favourable product
reviews, brand awareness is now widening, retailer interest growing and orders
are starting to meet expectations.
MIKE ASHLEY
Chief Executive Officer
16 November 2010
Consolidated Income Statement
+--------------+--------+----------+-------+--------------+----------+----------------+----------+--------------+
| | | | Six months | | Six months | | Year ended |
| | | | ended | | ended | | |
+-----------------------+----------+-------+--------------+----------+----------------+----------+--------------+
| | | | 30 | | 30 September | | 31 March |
| | | | September | | | | |
+-----------------------+----------+-------+--------------+----------+----------------+----------+--------------+
| | | | 2010 | | 2009 | | 2010 |
+-----------------------+----------+-------+--------------+----------+----------------+----------+--------------+
| | | | (unaudited) | | (unaudited) | | (audited) |
+-----------------------+----------+-------+--------------+----------+----------------+----------+--------------+
| | | Notes | GBP'millions | | GBP'millions | | GBP'millions |
+-----------------------+----------+-------+--------------+----------+----------------+----------+--------------+
| | | | | | | | |
+-----------------------+----------+-------+--------------+----------+----------------+----------+--------------+
| Revenue | | 2 | 30.1 | | 42.5 | | 77.4 |
+-----------------------+----------+-------+--------------+----------+----------------+----------+--------------+
| | | | | | | | |
+-----------------------+----------+-------+--------------+----------+----------------+----------+--------------+
| Operating | | 2 | (0.6) | | 0.2 | | 1.2 |
| (loss)/profit | | | | | | | |
+-----------------------+----------+-------+--------------+----------+----------------+----------+--------------+
| | | | | | | | |
+-----------------------+----------+-------+--------------+----------+----------------+----------+--------------+
| Finance income | | 3 | 0.1 | | 0.1 | | 0.2 |
+-----------------------+----------+-------+--------------+----------+----------------+----------+--------------+
| (Loss)/profit before | | | (0.5) | | 0.3 | | 1.4 |
| tax | | | | | | | |
+-----------------------+----------+-------+--------------+----------+----------------+----------+--------------+
| | | | | | | | |
+-----------------------+----------+-------+--------------+----------+----------------+----------+--------------+
| Tax | | | - | | (0.3) | | (0.7) |
+-----------------------+----------+-------+--------------+----------+----------------+----------+--------------+
| (Loss)/profit for the | | | (0.5) | | 0.0 | | 0.7 |
| period from | | | | | | | |
| continuing operations | | | | | | | |
+-----------------------+----------+-------+--------------+----------+----------------+----------+--------------+
| | | | | | | | |
+-----------------------+----------+-------+--------------+----------+----------------+----------+--------------+
| Loss for the period | | | | | | | |
| from | | | | | | | |
+-----------------------+----------+-------+--------------+----------+----------------+----------+--------------+
| discontinuing | | 4 | - | | (5.7) | | (5.7) |
| operations | | | | | | | |
+-----------------------+----------+-------+--------------+----------+----------------+----------+--------------+
| Loss for the period | | | (0.5) | | (5.7) | | (5.0) |
+-----------------------+----------+-------+--------------+----------+----------------+----------+--------------+
| Attributable to: | | | | | | | |
+-----------------------+----------+-------+--------------+----------+----------------+----------+--------------+
| Owners of the parent | | | (0.5) | | (5.7) | | (5.0) |
| Company | | | | | | | |
+-----------------------+----------+-------+--------------+----------+----------------+----------+--------------+
| | | | | | | | |
+-----------------------+----------+-------+--------------+----------+----------------+----------+--------------+
| (Losses)/earnings per | | 5 | | | | | |
| share (in pence) | | | | | | | |
+-----------------------+----------+-------+--------------+----------+----------------+----------+--------------+
| Basic and diluted | | | | | | | |
+-----------------------+----------+-------+--------------+----------+----------------+----------+--------------+
| | -continuing | | (0.9)p | | Nil p | | 1.5p |
| | operations | | | | | | |
+--------------+-------------------+-------+--------------+----------+----------------+----------+--------------+
| | -discontinuing | | Nil p | | (11.3)p | | (11.3)p |
| | operations | | | | | | |
+--------------+-------------------+-------+--------------+----------+----------------+----------+--------------+
| | - total | | (0.9)p | | (11.3)p | | (9.8)p |
+--------------+-------------------+-------+--------------+----------+----------------+----------+--------------+
| | | | | | | | |
+--------------+-------------------+-------+--------------+----------+----------------+----------+--------------+
| | | | | | | | | |
+--------------+--------+----------+-------+--------------+----------+----------------+----------+--------------+
Consolidated Statement of Comprehensive Income
+-----------------------------------+--------------+----------+---------------+----------+--------------+
| | Six | | Six months | | Year |
| | months | | ended | | ended |
| | ended | | | | |
+-----------------------------------+--------------+----------+---------------+----------+--------------+
| | 30 | | 30 September | | 31 March |
| | September | | | | |
+-----------------------------------+--------------+----------+---------------+----------+--------------+
| | 2010 | | 2009 | | 2010 |
+-----------------------------------+--------------+----------+---------------+----------+--------------+
| | (unaudited) | | (unaudited) | | (audited) |
+-----------------------------------+--------------+----------+---------------+----------+--------------+
| | GBP'millions | | GBP'millions | | GBP'millions |
+-----------------------------------+--------------+----------+---------------+----------+--------------+
| | | | | | |
+-----------------------------------+--------------+----------+---------------+----------+--------------+
| Loss for the period | (0.5) | | (5.7) | | (5.0) |
+-----------------------------------+--------------+----------+---------------+----------+--------------+
| Other comprehensive income: | | | | | |
+-----------------------------------+--------------+----------+---------------+----------+--------------+
| Exchange differences on | | | | | |
| translation of overseas | | | | | |
+-----------------------------------+--------------+----------+---------------+----------+--------------+
| operations | - | | (0.2) | | 0.4 |
+-----------------------------------+--------------+----------+---------------+----------+--------------+
| Exchange difference on disposal | - | | - | | (0.2) |
+-----------------------------------+--------------+----------+---------------+----------+--------------+
| Other comprehensive income net of | - | | (0.2) | | 0.2 |
| tax | | | | | |
+-----------------------------------+--------------+----------+---------------+----------+--------------+
| Total comprehensive income (all | (0.5) | | (5.9) | | (4.8) |
| attributable to owners of the | | | | | |
| parent) | | | | | |
+-----------------------------------+--------------+----------+---------------+----------+--------------+
Consolidated Statement of Financial Position
+-------------+-------------------+--------------+----------+---------------+----------+--------------+
| | | 30 | | 30 September | | 31 March |
| | | September | | | | |
+-------------+-------------------+--------------+----------+---------------+----------+--------------+
| | | 2010 | | 2009 | | 2010 |
+-------------+-------------------+--------------+----------+---------------+----------+--------------+
| | | (unaudited) | | (unaudited) | | (audited) |
+-------------+-------------------+--------------+----------+---------------+----------+--------------+
| | | GBP'millions | | GBP'millions | | GBP'millions |
+-------------+-------------------+--------------+----------+---------------+----------+--------------+
| Non-current | | | | | | |
| assets | | | | | | |
+-------------+-------------------+--------------+----------+---------------+----------+--------------+
| | Property, plant & | 0.6 | | 1.0 | | 0.7 |
| | equipment | | | | | |
+-------------+-------------------+--------------+----------+---------------+----------+--------------+
| | Other receivables | - | | 0.5 | | - |
+-------------+-------------------+--------------+----------+---------------+----------+--------------+
| | Deferred tax | - | | 0.2 | | - |
+-------------+-------------------+--------------+----------+---------------+----------+--------------+
| | Total non-current | 0.6 | | 1.7 | | 0.7 |
| | assets | | | | | |
+-------------+-------------------+--------------+----------+---------------+----------+--------------+
| | | | | | | |
+-------------+-------------------+--------------+----------+---------------+----------+--------------+
| Current | | | | | | |
| assets | | | | | | |
+-------------+-------------------+--------------+----------+---------------+----------+--------------+
| | Inventories | 6.1 | | 10.2 | | 4.4 |
+-------------+-------------------+--------------+----------+---------------+----------+--------------+
| | Trade and other | 16.9 | | 18.8 | | 5.6 |
| | receivables | | | | | |
+-------------+-------------------+--------------+----------+---------------+----------+--------------+
| | Income tax | 0.2 | | 0.2 | | 0.1 |
| | recoverable | | | | | |
+-------------+-------------------+--------------+----------+---------------+----------+--------------+
| | Cash and cash | 25.1 | | 25.6 | | 28.9 |
| | equivalents | | | | | |
+-------------+-------------------+--------------+----------+---------------+----------+--------------+
| | Total current | 48.3 | | 54.8 | | 39.0 |
| | assets | | | | | |
+-------------+-------------------+--------------+----------+---------------+----------+--------------+
| Total | | 48.9 | | 56.5 | | 39.7 |
| assets | | | | | | |
+-------------+-------------------+--------------+----------+---------------+----------+--------------+
| Current | | | | | | |
| liabilities | | | | | | |
+-------------+-------------------+--------------+----------+---------------+----------+--------------+
| | Trade and other | 19.8 | | 27.3 | | 9.7 |
| | payables | | | | | |
+-------------+-------------------+--------------+----------+---------------+----------+--------------+
| | Dividend payable | 10.1 | | - | | - |
+-------------+-------------------+--------------+----------+---------------+----------+--------------+
| | Provisions | 0.3 | | 1.0 | | 0.7 |
+-------------+-------------------+--------------+----------+---------------+----------+--------------+
| | Total current | 30.2 | | 28.3 | | 10.4 |
| | liabilities | | | | | |
+-------------+-------------------+--------------+----------+---------------+----------+--------------+
| Total | | 30.2 | | 28.3 | | 10.4 |
| liabilities | | | | | | |
+-------------+-------------------+--------------+----------+---------------+----------+--------------+
| Net assets | | 18.7 | | 28.2 | | 29.3 |
+-------------+-------------------+--------------+----------+---------------+----------+--------------+
Equity attributable to equity holders of the parent
+----------------------------------+-----------+----------+---------------+----------+----------+
| Share capital | 5.1 | | 5.1 | | 5.1 |
+----------------------------------+-----------+----------+---------------+----------+----------+
| Share premium | 3.2 | | 3.2 | | 3.2 |
+----------------------------------+-----------+----------+---------------+----------+----------+
| Capital redemption reserve | 15.4 | | 15.4 | | 15.4 |
+----------------------------------+-----------+----------+---------------+----------+----------+
| Investment in own shares | (2.3) | | (2.3) | | (2.3) |
+----------------------------------+-----------+----------+---------------+----------+----------+
| Translation reserve | (7.6) | | (8.0) | | (7.6) |
+----------------------------------+-----------+----------+---------------+----------+----------+
| Share based payment reserve | 0.7 | | 1.1 | | 0.7 |
+----------------------------------+-----------+----------+---------------+----------+----------+
| Retained earnings | 4.2 | | 13.7 | | 14.8 |
+----------------------------------+-----------+----------+---------------+----------+----------+
| Total equity | 18.7 | | 28.2 | | 29.3 |
+----------------------------------+-----------+----------+---------------+----------+----------+
Consolidated Statement of Changes in Equity
+--------------------+---------+---------+------------+------------+-------------+---------+----------+---------+
| | Share | Share | Capital | Investment | Translation | Share | Retained | Total |
| | capital | premium | redemption | in own | reserve | based | earnings | equity |
| | (GBP'm) | (GBP'm) | reserve | shares | (GBP'm) | payment | (GBP'm) | (GBP'm) |
| | | | (GBP'm) | (GBP'm) | | reserve | | |
| | | | | | | (GBP'm) | | |
+--------------------+---------+---------+------------+------------+-------------+---------+----------+---------+
| | | | | | | | | |
+--------------------+---------+---------+------------+------------+-------------+---------+----------+---------+
| Balance at 1 April | 5.1 | 3.2 | 15.4 | (2.3) | (7.6) | 0.7 | 14.8 | 29.3 |
| 2010 | | | | | | | | |
+--------------------+---------+---------+------------+------------+-------------+---------+----------+---------+
| Transactions with | | | | | | | | |
| owners: | | | | | | | | |
+--------------------+---------+---------+------------+------------+-------------+---------+----------+---------+
| Dividend Approved | - | - | - | - | - | - | (10.1) | (10.1) |
+--------------------+---------+---------+------------+------------+-------------+---------+----------+---------+
| Total Transactions | - | - | - | - | - | - | (10.1) | (10.1) |
| with owners | | | | | | | | |
+--------------------+---------+---------+------------+------------+-------------+---------+----------+---------+
| Loss for the | - | - | - | - | - | - | (0.5) | (0.5) |
| period | | | | | | | | |
+--------------------+---------+---------+------------+------------+-------------+---------+----------+---------+
| Total | - | - | - | - | - | - | (0.5) | (0.5) |
| comprehensive | | | | | | | | |
| income | | | | | | | | |
+--------------------+---------+---------+------------+------------+-------------+---------+----------+---------+
| Balance at 30 | 5.1 | 3.2 | 15.4 | (2.3) | (7.6) | 0.7 | 4.2 | 18.7 |
| September 2010 | | | | | | | | |
+--------------------+---------+---------+------------+------------+-------------+---------+----------+---------+
| | | | | | | | | |
+--------------------+---------+---------+------------+------------+-------------+---------+----------+---------+
+--------------------+---------+---------+------------+------------+-------------+---------+----------+---------+
| | Share | Share | Capital | Investment | Translation | Share | Retained | Total |
| | capital | premium | redemption | | reserve | based | earnings | equity |
| | (GBP'm) | (GBP'm) | reserve | in own | (GBP'm) | payment | (GBP'm) | (GBP'm) |
| | | | (GBP'm) | shares | | reserve | | |
| | | | | (GBP'm) | | (GBP'm) | | |
+--------------------+---------+---------+------------+------------+-------------+---------+----------+---------+
| | | | | | | | | |
+--------------------+---------+---------+------------+------------+-------------+---------+----------+---------+
| Balance at 1 April | 5.1 | 3.2 | 15.4 | (2.3) | (7.8) | 1.1 | 19.4 | 34.1 |
| 2009 | | | | | | | | |
+--------------------+---------+---------+------------+------------+-------------+---------+----------+---------+
| Loss for the | - | - | - | - | - | - | (5.7) | (5.7) |
| period | | | | | | | | |
+--------------------+---------+---------+------------+------------+-------------+---------+----------+---------+
| Other | | | | | | | | |
| comprehensive | | | | | | | | |
| income: | | | | | | | | |
+--------------------+---------+---------+------------+------------+-------------+---------+----------+---------+
| Exchange | - | - | - | - | (0.2) | - | - | (0.2) |
| differences on | | | | | | | | |
| translation of | | | | | | | | |
| overseas | | | | | | | | |
| operations | | | | | | | | |
+--------------------+---------+---------+------------+------------+-------------+---------+----------+---------+
| Total | - | - | - | - | (0.2) | - | (5.7) | (5.9) |
| comprehensive | | | | | | | | |
| income | | | | | | | | |
+--------------------+---------+---------+------------+------------+-------------+---------+----------+---------+
| Balance at 30 | 5.1 | 3.2 | 15.4 | (2.3) | (8.0) | 1.1 | 13.7 | 28.2 |
| September 2009 | | | | | | | | |
+--------------------+---------+---------+------------+------------+-------------+---------+----------+---------+
Consolidated Statement of Cash Flows
+--------------------------------+-------+--------------+----------+--------------+----------+--------------+
| | | Six | | Six | | Year |
| | | months | | months | | ended |
| | | ended | | ended | | |
+--------------------------------+-------+--------------+----------+--------------+----------+--------------+
| | | 30 | | 30 | | 31 March |
| | | September | | September | | |
+--------------------------------+-------+--------------+----------+--------------+----------+--------------+
| | | 2010 | | 2009 | | 2010 |
+--------------------------------+-------+--------------+----------+--------------+----------+--------------+
| | | (unaudited) | | (unaudited) | | (audited) |
+--------------------------------+-------+--------------+----------+--------------+----------+--------------+
| | Notes | GBP'millions | | GBP'millions | | GBP'millions |
+--------------------------------+-------+--------------+----------+--------------+----------+--------------+
| Cashflow from operating | | | | | | |
| activities | | | | | | |
+--------------------------------+-------+--------------+----------+--------------+----------+--------------+
| | | | | | | |
+--------------------------------+-------+--------------+----------+--------------+----------+--------------+
| Cash used in operations | 7 | (3.8) | | (8.1) | | (5.4) |
+--------------------------------+-------+--------------+----------+--------------+----------+--------------+
| Tax paid | | (0.1) | | (0.3) | | (0.4) |
+--------------------------------+-------+--------------+----------+--------------+----------+--------------+
| Net cash used in operating | | (3.9) | | (8.4) | | (5.8) |
| activities | | | | | | |
+--------------------------------+-------+--------------+----------+--------------+----------+--------------+
| Cashflows from investing | | | | | | |
| activities | | | | | | |
+--------------------------------+-------+--------------+----------+--------------+----------+--------------+
| Interest received | | 0.1 | | 0.1 | | 0.2 |
+--------------------------------+-------+--------------+----------+--------------+----------+--------------+
| Purchase of property, plant | | - | | - | | (0.1) |
| and equipment | | | | | | |
+--------------------------------+-------+--------------+----------+--------------+----------+--------------+
| Sale of discontinued activity | | - | | 9.2 | | 10.0 |
| (net) | | | | | | |
+--------------------------------+-------+--------------+----------+--------------+----------+--------------+
| Net cash from investing | | 0.1 | | 9.3 | | 10.1 |
| activities | | | | | | |
+--------------------------------+-------+--------------+----------+--------------+----------+--------------+
| Net (decrease)/increase in | | (3.8) | | 0.9 | | 4.3 |
| cash and cash equivalents | | | | | | |
+--------------------------------+-------+--------------+----------+--------------+----------+--------------+
| Net foreign exchange | | - | | - | | (0.1) |
| differences | | | | | | |
+--------------------------------+-------+--------------+----------+--------------+----------+--------------+
| Cash and cash equivalents at | | 28.9 | | 24.7 | | 24.7 |
| begining of period | | | | | | |
+--------------------------------+-------+--------------+----------+--------------+----------+--------------+
| Cash and cash equivalents at | | 25.1 | | 25.6 | | 28.9 |
| end of period | | | | | | |
+--------------------------------+-------+--------------+----------+--------------+----------+--------------+
Notes to the interim statement
1. Basis of preparation
The condensed consolidated interim financial information for the six months
ended 30 September 2010 comprise the Company and its subsidiaries, together
referred to as the Group.
The condensed consolidated interim financial information has been prepared in
accordance with IAS 34 'Interim Financial Reporting', as adopted by the EU. It
does not include all of the information required for full annual financial
statements, and should be read in conjunction with the consolidated financial
statements of the Group for the year ended 31 March 2010.
The information relating to the six months ended 30 September 2010 and 30
September 2009 is unaudited and does not constitute statutory accounts for the
purposes of Section 434 of the Companies Act 2006. The comparative figures for
the financial year ended 31 March 2010 are not the Company's statutory accounts
for that financial year. Statutory accounts for the year ended 31 March 2010
were approved by the Board of Directors on 11 August 2010 and delivered to the
Registrar of Companies. The report of the auditors on those accounts was
unqualified, did not include a reference to any matters to which the auditors
drew attention by way of emphasis without qualifying their report and did not
contain a statement under Section 498 (2) or (3) of the Companies Act 2006.
The Group's financial risk management objectives and policies are consistent
with that disclosed in the consolidated financial statements as at and for the
year ended 31 March 2010.
Accounting policies
The accounting policies applied by the Group in these condensed consolidated
interim financial information are based on International Financial Reporting
Standards as adopted by the European Union and in accordance with the accounting
policies which the Group expects to adopt in its next annual accounts for the
year ending 31 March 2011 and are the same as those applied by the Group in its
consolidated financial statements for the year ended 31 March 2010.
This condensed consolidated interim financial information was approved by the
Board of Directors on 12 November 2010 and are available on Harvard's website,
www.harvardplc.com, and are being sent to shareholders. Further copies are
available from Harvard's registered office, Harvard House, The Waterfront,
Elstree Road, Elstree, Hertfordshire WD6 3BS
2. Segmental reporting
Revenue and segmental profit has been disclosed by the three operating segments
of UK Digital, UK other CE and rest of the World CE in the manner that the
information is presented to the Board of Directors.
The revenues and profit generated by each of the Group's segments are as
follows:
+-----------------------+--------------+--------------+--------------+--------------+
| | UK | UK Other | Rest of | Total |
| | Digital | CE | the | |
| | | | World CE | |
+-----------------------+--------------+--------------+--------------+--------------+
| | GBP'millions | GBP'millions | GBP'millions | GBP'millions |
+-----------------------+--------------+--------------+--------------+--------------+
| 6 months to 30 | | | | |
| September 2010 | | | | |
+-----------------------+--------------+--------------+--------------+--------------+
| Revenue from external | 9.0 | 16.3 | 4.8 | 30.1 |
| customers | | | | |
+-----------------------+--------------+--------------+--------------+--------------+
| Segmental profit | 1.2 | 0.7 | 1.0 | 2.9 |
+-----------------------+--------------+--------------+--------------+--------------+
| | | | | |
+-----------------------+--------------+--------------+--------------+--------------+
| 6 months to 30 | | | | |
| September 2009 | | | | |
+-----------------------+--------------+--------------+--------------+--------------+
| Revenue from external | 12.5 | 19.7 | 10.3 | 42.5 |
| customers | | | | |
+-----------------------+--------------+--------------+--------------+--------------+
| Segmental profit | 2.1 | 1.5 | 2.5 | 6.1 |
+-----------------------+--------------+--------------+--------------+--------------+
| | | | | |
+-----------------------+--------------+--------------+--------------+--------------+
| Year ended 31 March | | | | |
| 2010 | | | | |
+-----------------------+--------------+--------------+--------------+--------------+
| Revenue from external | 30.9 | 30.2 | 16.3 | 77.4 |
| customers | | | | |
+-----------------------+--------------+--------------+--------------+--------------+
| Segmental profit | 5.1 | 2.4 | 4.5 | 12.0 |
+-----------------------+--------------+--------------+--------------+--------------+
Segment operating profit can be reconciled to Group profit/(loss) as follows:
+----------------------+--------------+-+---------------+----------+--------------+
| | Six months | | Six months | | Year ended |
| | ended | | ended | | |
+----------------------+--------------+-+---------------+----------+--------------+
| | 30 | | 30 September | | 31 March |
| | September | | | | |
+----------------------+--------------+-+---------------+----------+--------------+
| | 2010 | | 2009 | | 2010 |
+----------------------+--------------+-+---------------+----------+--------------+
| | (unaudited) | | (unaudited) | | (audited) |
+----------------------+--------------+-+---------------+----------+--------------+
| | GBP'millions | | GBP'millions | | GBP'millions |
+----------------------+--------------+-+---------------+----------+--------------+
| | | | | | |
+----------------------+--------------+-+---------------+----------+--------------+
| Segmental profit | 2.9 | | 6.1 | | 12.0 |
+----------------------+--------------+-+---------------+----------+--------------+
| | | | | | |
+----------------------+--------------+-+---------------+----------+--------------+
| Reconciling items: | | | | | |
+----------------------+--------------+-+---------------+----------+--------------+
| Unallocated costs | (3.5) | | (5.9) | | (10.8) |
+----------------------+--------------+-+---------------+----------+--------------+
| Group operating | (0.6) | | 0.2 | | 1.2 |
| (loss)/profit | | | | | |
+----------------------+--------------+-+---------------+----------+--------------+
| | | | | | |
+----------------------+--------------+-+---------------+----------+--------------+
| Finance income | 0.1 | | 0.1 | | 0.2 |
+----------------------+--------------+-+---------------+----------+--------------+
| Tax | - | | (0.3) | | (0.7) |
+----------------------+--------------+-+---------------+----------+--------------+
| Loss from | - | | (5.7) | | (5.7) |
| discontinuing | | | | | |
| operations | | | | | |
+----------------------+--------------+-+---------------+----------+--------------+
| Loss for the period | (0.5) | | (5.7) | | (5.0) |
+----------------------+--------------+-+---------------+----------+--------------+
3. Finance income
+---------------------------+--------------+-+--------------+--+--------------+
| | Six months | | Six months | | Year ended |
| | ended | | ended | | |
+---------------------------+--------------+-+--------------+--+--------------+
| | 30 | | 30 September | | 31 March |
| | September | | | | |
+---------------------------+--------------+-+--------------+--+--------------+
| | 2010 | | 2009 | | 2010 |
+---------------------------+--------------+-+--------------+--+--------------+
| | (unaudited) | | (unaudited) | | (audited) |
+---------------------------+--------------+-+--------------+--+--------------+
| | GBP'millions | | GBP'millions | | GBP'millions |
+---------------------------+--------------+-+--------------+--+--------------+
| Finance income comprises: | | | | | |
+---------------------------+--------------+-+--------------+--+--------------+
| Interest on bank loans | - | | - | | - |
| and overdrafts repayable | | | | | |
| within 5 years | | | | | |
+---------------------------+--------------+-+--------------+--+--------------+
| | | | | | |
+---------------------------+--------------+-+--------------+--+--------------+
| Less: Bank interest | (0.1) | | (0.1) | | (0.2) |
| receivable | | | | | |
+---------------------------+--------------+-+--------------+--+--------------+
| | (0.1) | | (0.1) | | (0.2) |
+---------------------------+--------------+-+--------------+--+--------------+
4. Loss for the period from discontinuing activities
+--------+------------+----+----------+------+--------------+--+----------------+--+----------------+--+
| | | | | Six months | | Six months | | Year ended | |
| | | | | ended | | ended | | | |
+---------------------+----+----------+------+--------------+--+----------------+--+----------------+--+
| | | | | 30 September | | 30 September | | 31 March | |
| | | | | | | | | | |
+---------------------+----+----------+------+--------------+--+----------------+--+----------------+--+
| | | | | 2010 | | 2009 | | 2010 | |
+---------------------+----+----------+------+--------------+--+----------------+--+----------------+--+
| | | | | (unaudited) | | (unaudited) | | (audited) | |
+---------------------+----+----------+------+--------------+--+----------------+--+----------------+--+
| | | | Note | GBP'millions | | GBP'millions | | GBP'millions | |
+---------------------+----+----------+------+--------------+--+----------------+--+----------------+--+
| Loss for the period from | | | | | | | | |
| discontinuing activities | | | | | | | | |
| comprise: | | | | | | | | |
+--------------------------+----------+------+--------------+--+----------------+--+----------------+--+
| | Loss from operations | (i) | - | | (5.3) | | (5.3) | |
+--------+----------------------------+------+--------------+--+----------------+--+----------------+--+
| | Loss on disposal | (ii) | - | | (0.4) | | (0.4) | |
+--------+----------------------------+------+--------------+--+----------------+--+----------------+--+
| | | | - | | (5.7) | | (5.7) | |
+--------+----------------------------+------+--------------+--+----------------+--+----------------+--+
| | | | | | | | | | | |
+--------+------------+----+----------+------+--------------+--+----------------+--+----------------+--+
There were no disposals of discontinued operations in the six months ended 30
September 2010.
Loss for the period from discontinuing activities in the six months ended 30
September 2009 included the following:
a) the disposal of the Medical division for GBP1.2m
b) the disposal of a portfolio of surplus property assets for GBP8.5m
c) the decision to cease trading in the Carl Lewis fitness operation
d) the settlement with MPEG
All of the above activities have been reported as discontinued operations within
the six months ended 30 September 2009.
i) Loss from operations:
+------------------------+--------------+--------------+--------------+--------------+---+----------+--------------+--------------+
| | Full | Discontinued | Carl | Property | Medical | MPEG | Total |
| | service | UK CE | Lewis | | division | | |
| | LCD TV | | | | | | |
+------------------------+--------------+--------------+--------------+------------------+----------+--------------+--------------+
| | GBP'millions | GBP'millions | GBP'millions | GBP'millions | GBP'millions | GBP'millions | GBP'millions |
+------------------------+--------------+--------------+--------------+--------------+--------------+--------------+--------------+
| | | | | | | | |
+------------------------+--------------+--------------+--------------+--------------+--------------+--------------+--------------+
| 6 months to 30 | | | | | | | |
| September 2010 | | | | | | | |
+------------------------+--------------+--------------+--------------+--------------+--------------+--------------+--------------+
| Revenue | - | - | - | - | - | - | - |
+------------------------+--------------+--------------+--------------+--------------+--------------+--------------+--------------+
| Operating loss | - | - | - | - | - | - | - |
+------------------------+--------------+--------------+--------------+--------------+--------------+--------------+--------------+
| Tax | - | - | - | - | - | - | - |
+------------------------+--------------+--------------+--------------+--------------+--------------+--------------+--------------+
| Loss for period | - | - | - | - | - | - | - |
+------------------------+--------------+--------------+--------------+--------------+--------------+--------------+--------------+
| | | | | | | | |
+------------------------+--------------+--------------+--------------+--------------+--------------+--------------+--------------+
| 6 months to 30 | | | | | | | |
| September 2009 | | | | | | | |
+------------------------+--------------+--------------+--------------+--------------+--------------+--------------+--------------+
| Revenue | (0.2) | 0.2 | 1.0 | - | 5.7 | - | 6.7 |
+------------------------+--------------+--------------+--------------+--------------+--------------+--------------+--------------+
| Operating loss | (1.0) | 0.7 | (0.4) | 0.4 | (0.2) | (4.8) | (5.3) |
+------------------------+--------------+--------------+--------------+--------------+--------------+--------------+--------------+
| Tax | - | - | - | - | - | - | - |
+------------------------+--------------+--------------+--------------+--------------+--------------+--------------+--------------+
| (Loss)/profit for | (1.0) | 0.7 | (0.4) | 0.4 | (0.2) | (4.8) | (5.3) |
| period | | | | | | | |
+------------------------+--------------+--------------+--------------+--------------+--------------+--------------+--------------+
| | | | | | | | |
+------------------------+--------------+--------------+--------------+--------------+--------------+--------------+--------------+
| Year to 31 March 2010 | | | | | | | |
+------------------------+--------------+--------------+--------------+--------------+--------------+--------------+--------------+
| Revenue | (0.2) | 0.2 | 1.0 | - | 5.7 | - | 6.7 |
+------------------------+--------------+--------------+--------------+--------------+--------------+--------------+--------------+
| Operating loss | (1.0) | 0.7 | (0.4) | 0.4 | (0.2) | (4.8) | (5.3) |
+------------------------+--------------+--------------+--------------+--------------+--------------+--------------+--------------+
| Tax | - | - | - | - | - | - | - |
+------------------------+--------------+--------------+--------------+--------------+--------------+--------------+--------------+
| (Loss)/profit for | (1.0) | 0.7 | (0.4) | 0.4 | (0.2) | (4.8) | (5.3) |
| period | | | | | | | |
+------------------------+--------------+--------------+--------------+--------------+--------------+--------------+--------------+
| | | | | | | | | |
+------------------------+--------------+--------------+--------------+--------------+---+----------+--------------+--------------+
ii) (Loss)/profit on disposal of discontinued operations in the six months ended
30 September 2009 may be analysed as follows:
+------------------------------------+--------------+--------------+--------------+--------------+
| | Other | Medical | Property | Total |
| | | division | | |
+------------------------------------+--------------+--------------+--------------+--------------+
| | GBP'millions | GBP'millions | GBP'millions | GBP'millions |
+------------------------------------+--------------+--------------+--------------+--------------+
| | | | | |
+------------------------------------+--------------+--------------+--------------+--------------+
| Non-current assets | - | - | 8.5 | 8.5 |
+------------------------------------+--------------+--------------+--------------+--------------+
| | | | | |
+------------------------------------+--------------+--------------+--------------+--------------+
| Current assets | - | 1.7 | - | 1.7 |
+------------------------------------+--------------+--------------+--------------+--------------+
| | | | | |
+------------------------------------+--------------+--------------+--------------+--------------+
| Current liabilities | - | (1.5) | - | (1.5) |
+------------------------------------+--------------+--------------+--------------+--------------+
| Net assets disposed of | - | 0.2 | 8.5 | 8.7 |
+------------------------------------+--------------+--------------+--------------+--------------+
| | | | | |
+------------------------------------+--------------+--------------+--------------+--------------+
| Profit on disposal | (0.9) | 0.5 | - | (0.4) |
+------------------------------------+--------------+--------------+--------------+--------------+
| Total consideration net of costs | (0.9) | 0.7 | 8.5 | 8.3 |
| etc | | | | |
+------------------------------------+--------------+--------------+--------------+--------------+
| Satisfied and to be satisfied by | (0.9) | 0.7 | 8.5 | 8.3 |
| cash, and net cash inflow arising | | | | |
| on disposal | | | | |
+------------------------------------+--------------+--------------+--------------+--------------+
The other loss of GBP0.9m refers to a reassessment of the deferred consideration
of a disposal from a prior period.
5. Earnings per share
Basic and diluted earnings per share are based upon losses of GBP0.5 million
(six months ended 30 September 2009: losses of GBP5.7 million, and year ended 31
March 2010: losses of GBP5.0 million). Basic and diluted earnings per share is
also based on 50,597,573 (2009: 50,578,573) Ordinary Shares being the weighted
average number of Ordinary Shares in issue during the six months ended 30
September 2010 excluding the shares held by The Alba plc ESOP Trust. Basic and
diluted earnings per share on continuing activities is based upon losses of
GBP0.5 million (six months ended 30 September 2009: profits of GBPNil million,
and year ended 31 March 2010: profits of GBP0.7 million) and on discontinuing
activities upon losses of GBPNil million (six months ended 30 September 2009:
losses of GBP5.7 million, and year ended 31 March 2010: losses of GBP5.7
million).
Diluted earnings per share are based upon 50,597,573 (2009: 50,578,573) Ordinary
Shares allowing for the exercise of outstanding share purchase options
exercisable at a price below the average fair value during the period and the
shares held by The Alba plc ESOP Trust.
1,213,386 Potential Ordinary Shares have been excluded from the computation of
diluted earnings per share where these shares would be anti-dilutive.
6. Dividends
+---------------+--------------+----------+--------------+----------+--------------+
| | Six months | | Six months | | Year |
| | ended | | ended | | ended |
+---------------+--------------+----------+--------------+----------+--------------+
| | 30 | | 30 | | 31 |
| | September | | September | | March |
+---------------+--------------+----------+--------------+----------+--------------+
| | 2010 | | 2009 | | 2010 |
+---------------+--------------+----------+--------------+----------+--------------+
| | (unaudited) | | (unaudited) | | (audited) |
+---------------+--------------+----------+--------------+----------+--------------+
| | GBP'millions | | GBP'millions | | GBP'millions |
+---------------+--------------+----------+--------------+----------+--------------+
| | | | | | |
+---------------+--------------+----------+--------------+----------+--------------+
| Special | 10.1 | | - | | - |
| dividend | | | | | |
+---------------+--------------+----------+--------------+----------+--------------+
A special dividend of 20p per ordinary share was approved at the AGM on 23
September 2010. This dividend was paid on 15 October 2010 to shareholders on the
register at 1 October 2010.
7. Note to the consolidated cash flow statement
+----------------------------+--------------+----------+--------------+----------+--------------+
| | Six months | | Six months | | Year |
| | ended | | ended | | ended |
+----------------------------+--------------+----------+--------------+----------+--------------+
| | 30 | | 30 | | 31 |
| | September | | September | | March |
| | 2010 | | 2009 | | 2010 |
| | (unaudited) | | (unaudited) | | (audited) |
| | GBP'millions | | | | GBP'millions |
| | | | GBP'millions | | |
+----------------------------+--------------+----------+--------------+----------+--------------+
| Cashflow from operating | | | | | |
| activities: | | | | | |
+----------------------------+--------------+----------+--------------+----------+--------------+
| | | | | | |
+----------------------------+--------------+----------+--------------+----------+--------------+
| Operating profit/(loss) | (0.6) | | 0.2 | | 1.2 |
| from continuing operations | | | | | |
+----------------------------+--------------+----------+--------------+----------+--------------+
| Adjustment for: | | | | | |
+----------------------------+--------------+----------+--------------+----------+--------------+
| Depreciation of property, | 0.1 | | 0.2 | | 0.3 |
| plant & equipment | | | | | |
+----------------------------+--------------+----------+--------------+----------+--------------+
| Operating (loss) from | - | | (5.3) | | (5.3) |
| discontinuing operations | | | | | |
+----------------------------+--------------+----------+--------------+----------+--------------+
| (Increase)/decrease in | (11.3) | | (11.1) | | 3.1 |
| receivables | | | | | |
+----------------------------+--------------+----------+--------------+----------+--------------+
| (Increase)/decrease in | (1.7) | | (4.1) | | 1.8 |
| inventories | | | | | |
+----------------------------+--------------+----------+--------------+----------+--------------+
| (Increase)/decrease in | 9.7 | | 12.0 | | (6.5) |
| payables and provisions | | | | | |
+----------------------------+--------------+----------+--------------+----------+--------------+
| Cashflow from operating | (3.8) | | (8.1) | | (5.4) |
| activities | | | | | |
+----------------------------+--------------+----------+--------------+----------+--------------+
+-----------------------------+------------+----------+------------+----------+--------+
| Net Cash | | | | | |
+-----------------------------+------------+----------+------------+----------+--------+
| | | | | | |
+-----------------------------+------------+----------+------------+----------+--------+
| Cash and cash equivalents | 25.1 | | 25.6 | | 28.9 |
+-----------------------------+------------+----------+------------+----------+--------+
| | 25.1 | | 25.6 | | 28.9 |
+-----------------------------+------------+----------+------------+----------+--------+
Cash and cash equivalents comprise cash at bank all with a maturity of three
months or less.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR FFAFWIFSSESF
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