TIDMHAR
RNS Number : 7448J
Harvard International PLC
05 July 2011
Harvard International plc (AIM: HAR)
Preliminary unaudited results for the year ended 31 March
2011
Harvard International plc ("Harvard", "the Company" or "the
Group") is a distributor of consumer electrical goods in the UK and
Australia.
Key Points
-- Sales for the current period GBP61.2m (2010: GBP77.4m)
-- Sales were impacted adversely by a number of factors
including a lull in the UK Digital Switchover (DSO) timetable and
the very difficult retail market
-- Group total pre tax profit GBP0.9m (2010: Loss GBP4.3m)
-- Operating profit for the period from continuing operations
GBP0.7m (2010: GBP1.2m)
-- No impact from discontinued items in 2011
-- UK recovered in the second half led by Set Top Box (STB)
sales to customers in preparation for the DSO timetable and
improved interest in iLuv Apple accessories
-- Australia produced a better second half performance supported
by improved sales in STB and DAB+ sectors where innovative new
products have gained market share
-- Cash at 30 June 2011 was GBP16.0m
-- In line with the Group's business plan, new appointments
continue to be made which strengthen the Group's technical, product
and marketing teams
Bridget Blow, Chairman, comments:
"We made good progress in 2010/11 and the investment put in
place will support and extend our strategic objectives. It is now
clear that for the current financial year producers and retailers
of consumer electronics are continuing to face challenging market
conditions and we have consequently reduced our expectations whilst
maintaining investment in our development programme. The Group's
financial position continues to be strong."
5 July 2011
ENQUIRIES:
Harvard International plc Tel: 020 8238 7650
Mike Ashley, Chief Executive
Colin Grimsdell, Finance Director
Anthony Parker, Media & Analysts Tel: 07791 201467
Chairman's Statement
The restructuring and downsizing programme is now well
established and, for the first time in over 5 years, the Board is
able to present shareholders with accounts unaffected by
discontinued activities. Our new business plan is from a position
of stability that we believe will deliver sustainable profit whilst
protecting our strong cash position.
Investment in improving our technical understanding and
capabilities, in combination with the expansion of the marketing
and sales teams, is starting to produce tangible benefits, and new
opportunities to leverage the Group's strengths are being
sought.
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.
Sales for the current period totalled GBP61.2m (2010: GBP77.4m)
resulting in an operating profit of GBP0.7m (2010: GBP1.2m). After
a relatively weak performance in the first half of the period,
sales recovered led by the UK's digital switch over (DSO) timetable
and seasonal demand for the iLuv product range. The Australian
market was particularly difficult in the first half but began to
recover in the second half with strong sales in the STB and DAB+
sectors. Net cash at the end of the period remained strong at
GBP13.5m (2010: GBP28.9m). A special dividend totalling GBP10.1m
was paid to shareholders in October. Working capital requirements
have increased in response to the timing of the UK DSO
programme.
Progress is being made in developing the Group's growth platform
through new investment in people, marketing and external
partnerships such as the recently announced venture with ANT plc.
Through improving our own understanding of technologies, and
partnering with selected industry leaders, we now have an exciting
pipeline of new and differentiated products in development through
which to extend and enhance the Group's positioning in our target
segments.
Looking into the near future, demand for DTR functionality, and
the convergence of digital broadcasting and broadband services,
will mean that ownership of proprietary technology will be
critically important in successfully delivering new products to the
mass market. We are positioning Harvard to be a supplier of choice
for retailers and consumers in this space.
The current difficult market environment has widened the
possibility to acquire, or partner with, other businesses, products
or brands. The Board is actively investigating opportunities as
they are identified.
Dividend
The Board is not proposing the payment of an ordinary 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. Geoff brings substantial
retail and marketing knowledge to the Boardroom.
Paul Selway-Swift retired as an Independent Non-Executive
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.
Colin Grimsdell, Finance Director and Company Secretary, has
given notice of his intention to leave the business during August
2011. In his time at the Company Colin has contributed to the
stabilising of the business ready for the next stage of its
strategy. We wish Colin well in future.
A further announcement will be made when a new Finance Director
has been appointed.
Outlook
We have made good progress with our plans and the investment we
are making both supports and extends our strategic objectives.
Trading conditions for producers and retailers of consumer
electronics have been challenging, and are expected to remain so
for the foreseeable future. We have therefore reduced forecasts and
adjusted budgets for the current financial year, so as to retain
tight control of inventory levels and working capital. The Group's
financial position continues to be strong.
BRIDGET BLOW
Chairman
5 July 2011
Chief Executive Officer's Report
During the last year we have set about the task of carefully
putting in place an infrastructure and commercial culture capable
of competing and growing the existing business in the dynamic
Digital Vision and Apple Accessory markets.
Now that our business platform is established, we have begun to
actively invest in our growth potential. Over the longer term, our
strategic intent is for Harvard designed and branded products to
account for a much higher percentage of the Group's turnover,
enabling us to capture and retain a larger share of the total value
chain.
To this end we are developing our market positioning through the
introduction of a thoroughly researched new brand, View21(TM);
significantly upgrading our technological capability, so as to
drive new product development (Digital Television Recorder, Digital
Internet); expanding marketing and sales capabilities to increase
awareness and demand for iLuv Apple accessories and investigating
the possibility of increasing our rate of progress through
complimentary acquisitions and partnerships.
The Board believes that the combined benefits accruing from this
strategic investment, will increase our future incremental rate of
growth and profitability in both the UK and Australia.
Brands
We have conducted extensive consumer market research in the
digital vision segment. This focussed on the competitive structure
of the DTR segment, where there is growing demand but few brands.
Through our analysis of the data, we have developed a clear market
positioning for our newly created brand, View21(TM), which will be
launched in the 2nd half of 2011/12.
The View21(TM) brand is positioned to address the needs of more
technically savvy consumers, offering class leading features,
greater functionality and enhanced design at affordable prices. Our
Goodmans brand will continue to offer good value products at lower
price points. As part of our branding strategy the Grundig brand is
being withdrawn in the UK.
New Product Development
In the past Harvard's product range has been dominated by
sourcing products directly from our supplier base. Going forward,
we will increasingly design our own products whilst continuing to
outsource manufacture. New product development will address the
needs of both UK and Australian consumers.
To better support our in-house technical team we have entered
into a partnership with ANT plc, a specialist software designer.
This co-operative venture is developing an advanced range of market
leading DTR products which will be launched later this year under
the View21(TM) brand. With increased marketing support this will
enable us to compete in a higher value segment of the market. The
need for ownership of proprietary technologies will result in much
greater barriers to entry in the digital vision segment,
particularly at the entry level end of the market. This has created
a substantial opportunity, in partnership with leading retailers,
to develop new technically enhanced products for their in-house own
label budget ranges.
As the UK's DSO programme ends in 2012, we will already be
supplying a growing demand for an upgraded range of premium digital
vision products.
Marketing and Sales
To maximise the potential returns from iLuv's comprehensive
range of Apple accessories we are making significant investment to
improve the effectiveness of our marketing and sales activities.
The commercial team has been strengthened with experienced sales
personnel recruited from prominent competitors in the Apple
Accessories sector. This investment will lead our strategy to grow
iLuv's market share through accessing new distribution channels in
mobile phone network stores, on-line retailers and specialist
accessory vendors. In addition to this we have agreed a new 10 year
distribution agreement for the UK and the business is exploring
options for distribution in Australia.
A newly appointed brand manager is now supporting the sales
drive, through greater marketing and promotional activity, to build
greater awareness and interest among retail outlets in this high
quality brand.
Platform Expansion
To enable us to maximise and then expand beyond our current
capacity, and in the longer term to capture and retain a larger
share of the total value chain, we need to examine ways of
increasing our potential growth.
We are actively investigating opportunities to extend the
existing business platform through acquisition, licensing or
partnership with additional complimentary businesses, products or
brands in both Australia and the UK. These can then be incorporated
into the current business model and leveraged through using the
Group's existing infrastructure and variable cost model.
The agreements with ANT plc, regarding technological
partnership, and with iLuv, extending our licensing agreement,
represent the first steps taken in delivering this strategic
plan.
Financial Review
The past year saw the Group return to profitability, excluding
corporate disposals, for the first time since 2005, and report
numbers unaffected by discontinued activities arising from the
earlier restructuring programme. There is now a sound financial
basis against which to report future progress.
The first half loss of GBP0.6m was principally the result of a
disappointing performance in Australia, especially when compared
with the unusually strong outcome in the same period the previous
year, and the disappointing HD Freeview launch, where sales only
achieved a fraction of market expectations. Despite the occurrence
of the football World Cup, consumers failed to appreciate the
benefits of trading up to the higher standard, instead showing
greater appetite for DTR products.
The second half was much stronger, more than recovering the
first half loss, with the UK DSO timetable resulting in strong
orders for STB's for retailer own label branded products and the
Government's target help scheme. Australia also experienced a
seasonal recovery with STB demand also helped by the regional DSO
programme and strong sales in DAB+ radio products where Harvard is
the local market leader.
iLuv continued to launch products and broaden awareness of the
product range, building the platform from which this years new
investment is expected to deliver strong growth. iLuv's market
share increased year on year but still only represents a fraction
of the UK's GBP480m Apple Accessories market.
The Group's financial position remains healthy with a net cash
position of GBP13.5m. Net interest received in the year amounted to
GBP0.2m.
UK
Overall demand for consumer goods, particularly electronic
products, has been weak. Spending power has been curtailed by a
number of factors including price increases for essential food and
fuel items, a rise in the rate of vat, wage restraint, public
sector spending cuts and relatively high unemployment levels.
Much of this has yet to fully impact upon the economy but is
expected to have an increasing influence on household disposable
income in the months ahead. March 2011 saw a fall in overall demand
for consumer electronic products of 17% when compared with the
previous year. The decreased consumer demand has had an adverse
effect on orders from some of our major customers.
Digital Media Boxes (DMB)
After a lull in the UK Government's DSO timetable in 2010, with
only 11% of households experiencing DSO, momentum picks up in 2011
with 33% of households due to switch in each of the next two years,
before the programme's completion at the end of 2012. Demand for
STB's continues to respond to the DSO timetable however a growing
proportion of consumers, in regions yet to switch from analogue,
already have access to digital through the purchase of integrated
digital TV's or subscription to pay per view services (SKY,
Virgin).
The 'free to air' STB business will increasingly move away from
the Standard Definition (SD) low cost Freeview boxes to more
complex, higher value, products such as High Definition (HD) DTR,
and STB's which will facilitate the convergence of Digital TV and
internet content. Demand for HD STB's in 2010 got off to a slow
start but interest is expected to steadily increase as the price
differential with SD narrows.
The need to upgrade and broaden the Group's technical capability
was a key task in 2010/11, to ensure that we possess sufficient
skills in both software and hardware design, to deliver premium
quality Digital TV Recorders (DTR), demand for which is growing
strongly from a low base. A new Chief Technical Officer position
was created and the technical team was expanded.
The first half of 2011/12 will see our partnership with ANT
deliver the first View21(TM) branded products with more higher
specification HD DTR's following later in the year. Further
evidence of our growing technical competence comes with the launch
of dedicated App's for Apple iPad, iPhone and iPod Touch products
which enable wireless interactivity between these products and our
digital media boxes.
The launch of YouView, the subscription free, connected digital
TV platform, is expected in 2012 ahead of the London Olympics and
will require the availability of easy to use, affordable, well
designed DTRs to enable consumers to access the service. It is
likely that TV manufacturers will start to integrate this
functionality into their product designs but the relative expense
of upgrading TV sets should support TV recorder demand.
Apple Accessories
Apple accessories continue to outperform the broader consumer
electronics market as Apple continues to deliver a successful
product pipeline. Awareness of the New York iLuv brand has grown
with many positive product reviews appearing in consumer
electronics media. Headphones, iPad cases and other accessories
sold well through a limited number of distributors offering
encouragement for further growth as new retailers are signed
up.
Our strategy is to take advantage of the market's highly
fragmented structure to grow our market share through investment in
our marketing, promotional and sales activities. This will extend
awareness, interest and demand for the iLuv brand; deepen
appreciation of the comprehensiveness and high quality of the
range, and heighten understanding of the opportunity to provide a
'one stop shop' service for retailers.
The enlarged and dedicated sales team will focus not only on
traditional high street retailers and supermarkets but will
increasingly open up new channels including mobile phone network
stores, on-line retailers and dedicated accessory outlets.
As part of our long term strategic plan, and commitment to this
market segment, Harvard has entered into an agreement with iLuv
regarding a significant deepening and extension of the current
partnership agreement, both in the UK and Australia. iLuv has
recently further extended its product portfolio through a
partnership endorsement with Samsung on the Galaxy tablet and
smartphone range.
Sales over the next few years are expected to benefit strongly
from the Group's investment in sales and marketing throughout
2011/12.
Australia
Consumer spending remains subdued despite evidence of recovery
in some other sectors of the economy. The Government's spending
cuts targeting a reduction of the budget deficit, and interest rate
rises to curtail inflationary pressure, continue to depress
consumer demand.
The structure of the consumer electronics market in Australia is
less competitive than in the UK and as a result operating margins
are stronger, delivering a higher return on investment. Our
operational structure in Australia has a broader base than the UK
and we are actively considering opportunities to extend both the
breadth and depth of the Australian business.
The Group's focus on the digital vision and Apple accessory
markets will result in the increasing importance of these segments,
benefiting from the new product pipeline and the launch of brand
View21(TM).
The strategy in 2011/12 is targeted at maintaining and
increasing our strong market shares of the STB, DTR and Digital
Radio categories. Having already grown to represent a 15% share of
the STB market, through the Bush and Grundig brands, and with new
innovative products and the launch of View21(TM) to come, we are
confident of further progress.
Australia's DSO timetable is still in its infancy, with the
major cities not due to switch until 2013, but Harvard has already
been awarded contracts to supply regions in Queensland and
Victoria. The Group is strongly positioned to take advantage of
increased consumer interest in digital products through its well
established retailer network.
Last year we were the first producer to supply digital 'free to
air' STB's equipped with an electronic programme guide (EPG) and
DTR products will follow in 2011. Harvard's speed to market was
also demonstrated through the successful launch of its Digital+ DAB
radios which have already captured a 25% market share.
The Apple accessories market, in line with our Group strategy,
is an opportunity that we are keen to develop, leveraging our
existing infrastructure and operational variable cost model. Under
a new agreement with iLuv we will start to supply a limited number
of products in the fourth quarter of 2011, building towards
marketing the full range by the end of 2012.
MIKE ASHLEY
Chief Executive Officer
5 July 2011
Consolidated Income Statement
Year ended
31 March Year ended
2011 31 March
Notes GBP'millions 2010 GBP'millions
-------------- -------------------
Revenue 2 61.2 77.4
Cost of sales (52.4) (65.2)
--------------------------------- ------ -------------- -------------------
Gross profit 8.8 12.2
Net operating expenses 3 (8.1) (11.0)
--------------------------------- ------ -------------- -------------------
Operating profit 0.7 1.2
Finance costs 4 - -
Finance income 4 0.2 0.2
--------------------------------- ------ -------------- -------------------
Profit before tax 0.9 1.4
Taxation 5 (0.5) (0.7)
--------------------------------- ------ -------------- -------------------
Profit for the period from
continuing operations 0.4 0.7
Loss for the period from
discontinued operations - (5.7)
--------------------------------- ------ -------------- -------------------
Profit/(loss) for the period 0.4 (5.0)
--------------------------------- ------ -------------- -------------------
Attributable to:
Equity holders of the parent 0.4 (5.0)
--------------------------------- ------ -------------- -------------------
Earnings per share (in pence) 6
Basic
- Continuing operations 0.7p 1.5p
- Discontinuing operations - (11.3)p
- Total 0.7p (9.8)p
Diluted
- Continuing operations 0.7p 1.5p
- Discontinuing operations - (11.3)p
- Total 0.7p (9.8)p
--------------------------------- ------ -------------- -------------------
Consolidated Statement of Comprehensive Income
Profit/(loss) for the period 0.4 (5.0)
------------------------------------------------- ---- ------
Other comprehensive income
Exchange differences on translation of overseas
operations - 0.4
Exchange difference on disposal - (0.2)
Other comprehensive income net of tax - 0.2
------------------------------------------------- ---- ------
Total comprehensive income (all attributable
to owners of the parent) 0.4 (4.8)
------------------------------------------------- ---- ------
Consolidated Statement of Financial Position
31 March
31 March 2010
2011 GBP'millions GBP'millions
Non-current assets
Property, plant & equipment 0.5 0.7
Total non-current assets 0.5 0.7
----------------------------------------- ------------------- --------------
Current assets
Inventories 7.2 4.4
Trade receivables and other receivables 13.0 5.6
Income tax recoverable - 0.1
Cash and cash equivalents 13.5 28.9
----------------------------------------- ------------------- --------------
Total current assets 33.7 39.0
----------------------------------------- ------------------- --------------
Total assets 34.2 39.7
----------------------------------------- ------------------- --------------
Current liabilities
Trade and other payables 13.7 9.7
Income tax payable 0.4 -
Provisions 0.5 0.7
----------------------------------------- ------------------- --------------
Total current liabilities 14.6 10.4
----------------------------------------- ------------------- --------------
Total liabilities 14.6 10.4
----------------------------------------- ------------------- --------------
Net assets 19.6 29.3
----------------------------------------- ------------------- --------------
Equity attributable to equity holders of
the parent
Share capital 5.1 5.1
Share premium 3.2 3.2
Capital redemption reserve 15.4 15.4
Investment in own shares (2.3) (2.3)
Translation reserve (7.6) (7.6)
Share based payments reserve 0.5 0.7
Retained earnings 5.3 14.8
Total equity 19.6 29.3
----------------------------------------- ------------------- --------------
Consolidated Statement of Changes in Equity
Share
Share Capital Investment based
Share premium redemption in own Translation payment Retained
capital account reserve shares reserve reserve earnings Total
(GBP'm) (GBP'm) (GBP'm) (GBP'm) (GBP'm) (GBP'm) (GBP'm) (GBP'm)
Group:
--------------- -------- -------- ----------- ----------- ------------ -------- --------- --------
At 1 April
2010 5.1 3.2 15.4 (2.3) (7.6) 0.7 14.8 29.3
--------------- -------- -------- ----------- ----------- ------------ -------- --------- --------
Transactions
with owners:
Dividends
Paid - - - - - - (10.1) (10.1)
Transfer
relating to
lapsed
options - - - - - (0.2) 0.2 -
Total
transactions
with owners - - - - - (0.2) (9.9) (10.1)
--------------- -------- -------- ----------- ----------- ------------ -------- --------- --------
Profit for
the period - - - - - - 0.4 0.4
Total
comprehensive
income - - - - - - 0.4 0.4
At 31 March
2011 5.1 3.2 15.4 (2.3) (7.6) 0.5 5.3 19.6
--------------- -------- -------- ----------- ----------- ------------ -------- --------- --------
Share
Share Capital Investment based
Share premium redemption in own Translation payment Retained
capital account reserve shares reserve reserve earnings Total
(GBP'm) (GBP'm) (GBP'm) (GBP'm) (GBP'm) (GBP'm) (GBP'm) (GBP'm)
Group:
--------------- -------- -------- ----------- ----------- ------------ -------- --------- --------
At 1 April
2009 5.1 3.2 15.4 (2.3) (7.8) 1.1 19.4 34.1
--------------- -------- -------- ----------- ----------- ------------ -------- --------- --------
Transactions
with owners:
Transfer
relating to
lapsed
options - - - - - (0.4) 0.4 -
Total
transactions
with owners - - - - - (0.4) 0.4 -
--------------- -------- -------- ----------- ----------- ------------ -------- --------- --------
Loss for the
period - - - - - - (5.0) (5.0)
Other
comprehensive
income
Exchange
difference on
disposal - - - - (0.2) - - (0.2)
Exchange
difference on
translation
of overseas
operations - - - - 0.4 - - 0.4
Total
comprehensive
income - - - - 0.2 - (5.0) (4.8)
At 31 March
2010 5.1 3.2 15.4 (2.3) (7.6) 0.7 14.8 29.3
--------------- -------- -------- ----------- ----------- ------------ -------- --------- --------
Consolidated Statement of Cash Flows
Year ended Year ended
31 March 31 March
2011 2010
Notes GBP'millions GBP'millions
-------------------------------------- ------ -------------- --------------
Cash flow from operating activities
Cash used by operations 8 (5.5) (5.4)
Tax paid - (0.4)
-------------------------------------- ------ -------------- --------------
Net cash used in operating activities (5.5) (5.8)
-------------------------------------- ------ -------------- --------------
Cash flows from investing activities
Interest received 0.2 0.2
Purchase of property, plant and
equipment - (0.1)
Sale of discontinued activities (net) - 10.0
-------------------------------------- ------ -------------- --------------
Net cash flow from investing
activities 0.2 10.1
-------------------------------------- ------ -------------- --------------
Cash flows from financing activities
Dividends paid (10.1) -
-------------------------------------- ------ -------------- --------------
Net cash used in financing activities (10.1) -
-------------------------------------- ------ -------------- --------------
Net (decrease)/increase in cash and
cash equivalents (15.4) 4.3
Net foreign exchange differences - (0.1)
Cash and cash equivalents at
beginning of year 28.9 24.7
-------------------------------------- ------ -------------- --------------
Cash and cash equivalents at end of
year 13.5 28.9
-------------------------------------- ------ -------------- --------------
Notes to the statement
1. General information
The unaudited financial information set out above does not
constitute statutory accounts for the purposes of Section 435 of
the Companies Act 2006 but is derived from those financial
statements and as such, does not contain all information required
to be disclosed in the financial statements prepared in accordance
with International Financial Reporting Standards ("IFRS").
Statutory accounts for 2011 will be delivered to the Registrar of
Companies following the Company's Annual General Meeting. The
auditors have agreed to the issue of these results and expect to
issue an unqualified audit report on the 2011 accounts following
formal completion of the audit.
The financial information in respect of the year ended 31 March
2010 has been produced using extracts from the statutory accounts
prepared under International Financial Reporting Standards. The
statutory accounts for this period have been filed with the
Registrar of Companies. The auditors' report on these accounts was
unqualified.
The financial information presented in this statement has been
prepared using accounting policies consistent with International
Financial Reporting Standards as endorsed by the European Union.
The accounting policies are the same as those published by the
Group in the Annual Report & Accounts for the year ended 31
March 2010 which is available on the Group's website
www.harvardplc.com.
These results were approved by the directors on 4(th) July 2011.
Copies of the 2011 Report and Accounts are being sent to
shareholders in due course. Further copies will be available at the
Company's registered offices at Harvard House, The Waterfront,
Elstree Road, Elstree Herts WD6 3BS.
2. Segmental Reporting
Revenue and segmental profit has been disclosed by 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 Boards of
Directors (being the 'Chief Operating Decision Makers') in
accordance with IFRS8.
Continuing operations:
Year ended 31 March 2011 Year ended 31 March 2010
Rest of the Rest of the
UK Digital UK other CE World CE Total UK Digital UK Other CE World CE Total
GBP'millions GBP'millions GBP'millions GBP'millions GBP'millions GBP'millions GBP'millions GBP'millions
--------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
Revenue
External sales 25.6 22.4 13.2 61.2 30.9 30.2 16.3 77.4
Inter-segment
sales - - - - - - - -
--------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
Segment profit 3.7 1.8 3.0 8.5 5.1 2.4 4.5 12.0
39.2
Total assets 14.9 12.9 6.5 34.3 17.3 17.2 4.7 *
Total
liabilities (7.5) (6.3) (0.9) (14.7) (4.7) (4.8) (0.9) (10.4)
--------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
Total net
assets 7.4 6.6 5.6 19.6 12.6 12.4 3.8 28.8
Capital
expenditure - - - - 0.1 - - 0.1
Depreciation
charge 0.1 0.1 - 0.2 0.1 0.1 0.1 0.3
* Total assets at 31 March 2010 exclude GBP0.5m for expected
earnout from the Grundig disposal as this relates to a discontinued
operation.
Segment figures can be reconciled to the corresponding Group
figures as follows:
Year ended Year ended
31 March 31 March
2011 GBP'millions 2010 GBP'millions
------------------------------------ ------------------- -------------------
Segment profit 8.5 12.0
Overheads not allocated to segments (7.8) (10.8)
Group operating profit 0.7 1.2
------------------------------------ ------------------- -------------------
The geographical analysis of turnover of continuing operations
by geographical location of customer is as follows:
Year ended Year ended
31 March 31 March
2011 GBP'millions 2010 GBP'millions
---------------- ------------------- -------------------
Revenue
United Kingdom 47.9 61.1
Australia 13.2 15.0
Rest of Europe 0.1 1.3
---------------- ------------------- -------------------
61.2 77.4
---------------- ------------------- -------------------
The geographical location of non-current assets of continuing
operations is as follows:
Year ended Year ended
31 March 31 March
2011 GBP'millions 2010 GBP'millions
---------------- ------------------- -------------------
United Kingdom 0.3 0.4
Australia 0.1 0.1
Hong Kong 0.1 0.2
---------------- ------------------- -------------------
0.5 0.7
---------------- ------------------- -------------------
One UK customer represents 24% (2010: 16%) of total Group
revenue during the year. Revenue from this customer is included in
both UK Digital and UK other CE segments.
3. Net Operating expenses
Year ended 31st March
Year ended 31st March 2011 2010
Continuing Discontinued Continuing Discontinued
operations operations Total operations operations Total
GBP'millions GBP'millions GBP'millions GBP'millions GBP'millions GBP'millions
---------------- ------------- ------------- ------------- ------------- ------------- -------------
Selling and
distribution 2.5 - 2.5 4.1 0.3 4.4
Administration 5.6 - 5.6 6.9 6.0 12.9
----------------
8.1 - 8.1 11.0 6.3 17.3
---------------- ------------- ------------- ------------- ------------- ------------- -------------
4. Finance costs/income
Year ended Year ended
31 March 2011 31 March
GBP'millions 2010 GBP'millions
------------------------------------- --------------- -------------------
Finance costs comprise:
Interest on bank loans and
overdrafts repayable
within 5 years - -
------------------------------------- --------------- -------------------
Finance income comprises:
Bank interest receivable 0.2 0.2
------------------------------------- --------------- -------------------
5. Taxation
Year ended
31 March Year ended
2011 31 March
GBP'millions 2010 GBP'millions
----------------------------------------- -------------- -------------------
The tax charge comprises:
UK corporation tax on profits for the
year at 28% (2010:28%) - -
Adjustments for previous periods - -
----------------------------------------- -------------- -------------------
Non-UK taxation
- Current 0.3 0.5
- Adjustment in respect of prior years 0.2 -
----------------------------------------- -------------- -------------------
Total current taxation 0.5 0.5
Deferred tax - Origination and reversal
of temporary timing differences - 0.2
Adjustments in respect of prior years - -
----------------------------------------- -------------- -------------------
Total taxation charge in the income
statement 0.5 0.7
----------------------------------------- -------------- -------------------
Factors affecting taxation charge:
The taxation expense on the profit for the year differs from the
amount computed by applying the corporation tax rate to the profit
before taxation as a result of the following factors:
Profit before tax on continuing
operations 0.9 1.4
Loss before tax from discontinuing
operations - (5.7)
----------------------------------------- -------------- -------------------
Profit/(loss) for the period before tax 0.9 (4.3)
----------------------------------------- -------------- -------------------
Notional tax charge/(credit) at UK rate
of 28% (2010:28%) 0.3 (1.2)
Effects of:
Non allowable and non taxable items 0.3 4.8
Disposal of discontinued activities - (0.8)
Tax losses not recognised 0.1 (1.9)
Different tax rates on non-UK profits (0.1) (0.2)
Adjustments to tax charges for previous
periods: Non-UK taxation (0.1) -
Total taxation charge 0.5 0.7
----------------------------------------- -------------- -------------------
6. Earnings per ordinary share
Basic earnings per share are based upon earnings of GBP0.4
million (2010 : GBP(5.0) million) and 50,589,140 (2010 :
50,578,573) Ordinary Shares being the weighted average number of
Ordinary Shares in issue during the twelve months ended 31 March
2011 excluding the shares held by The ESOP Trust. Basic earnings
per share on continuing activities are based upon earnings of
GBP0.4 million (2010 : GBP0.7 million) and discontinued operations
are based upon earnings of GBPnil million (2010 : GBP(5.7)
million).
Diluted earnings per share are based upon earnings of GBP0.4
million (2010 : GBP(5.0) million) and 51,284,857 (2010 :
50,578,573) Ordinary Shares allowing for the exercise of
outstanding share options exercisable at a price below the average
fair value during the period and the shares held by the ESOP Trust.
Diluted earnings per share on continuing activities are based upon
earnings of GBP0.4 million (2010 : GBP0.7 million) and on
discontinued operations upon earnings of GBPnil million (2010 :
GBP(5.7) million).
Potential Ordinary Shares of 696,513 have been excluded from the
prior year computation of diluted EPS as the shares are
anti-dilutive.
7. Dividends
Year ended Year ended
31 March 31 March
2011 GBP'millions 2010
GBP'millions
----------------- ------------------- --------------
Special dividend 10.1 -
----------------- ------------------- --------------
10.1 -
----------------- ------------------- --------------
The company paid a special dividend of 20p per ordinary share on
15 October 2010 to shareholders on the register at 1 October
2010.
8. Cash flow from operating activities:
Year ended
Year ended 31 March
31 March 2010
2011 GBP'millions GBP'millions
----------------------------------------- ------------------- --------------
Operating profit from continuing
operations before impairment of
properties 0.7 1.2
Operating loss from discontinuing
operations - (5.3)
----------------------------------------- ------------------- --------------
0.7 (4.1)
Adjustment for:
Depreciation of property, plant &
equipment 0.2 0.3
(Increase)/decrease in receivables (7.4) 3.1
(Increase)/decrease in inventories (2.8) 1.8
Increase/(decrease) in payables 4.0 (2.5)
Decrease in provisions (0.2) (4.0)
Cash flow used by operating activities (5.5) (5.4)
----------------------------------------- ------------------- --------------
Net Cash
Cash and cash equivalents 13.5 28.9
----------------------------------------- ------------------- --------------
Cash and cash equivalents comprise cash at bank and bank
overdrafts 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
FR UGUUAMUPGGAC
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