RNS Number:1402G
International Greetings PLC
08 December 2004
International Greetings plc
Interim results show continued growth
8 December 2004. International Greetings plc ("International Greetings" or "the
Group") (AIM: IGR), the leading designer and manufacturer of private label
greetings products and film and television character based licensed stationery,
announces today interim results for the six months ended 30 September 2004.
Financial highlights
* Turnover for the period grew 16% to #61.8m (2003: #53.5m)
* Adjusted profit* before tax increased 17% to #6.3m
* Adjusted earnings* per share also increased 17% to 10.5p
* The first full six month contribution turnover from Hoomark, the Group's
Netherlands based European subsidiary, was in-line with expectations with an
operating profit of #0.4m on turnover of #4.5m
* Excluding Hoomark's results, Group turnover increased by 7% and adjusted
profit* before tax improved by 12%
* US$ like-for-like sales up 23% in the US
* Interim dividend up 17% to 1.75p per share (2003: 1.5p)
* excluding amortisation of goodwill of #182,000 (6 months to 30th September
2003 : #87,000) and exceptional item of #nil (6 months to 30th September 2003:
#684,000)
Operational highlights
* New long term licence signed with Disney extending geographical coverage
and encompassing all the forthcoming Disney film releases, including the recently
released blockbuster "The Incredibles"
* Board strengthened with the appointment of Keith James, the former Chairman
of Eversheds LLP
* Design teams already working with major retail clients on designs for Christmas 2005
Commenting on the results, Nick Fisher, CEO of International Greetings said:
"I am delighted that we have delivered another strong set of interim results for
the Group. Hoomark, the gift wrap manufacturer we acquired last year, has
performed well and has strengthened our business in Europe. Our decision to
refocus the US division has been successful, with US$ like-for-like sales up
23%. We are now well into the second half of the year and are optimistic about
the full-year's performance."
For further information:
Nick Fisher, International Greetings: 01707 630630
Richard Sunderland, Tavistock Communications: 020 7920 3150
rsunderland@tavistock.co.uk
Graeme Cull, Arden Partners: 0121 423 8960
Interim Statement - 2004
I am delighted to announce strong interim results for the six months to 30th
September 2004. Turnover for the period grew 16% to #61.8m, with adjusted profit*
before taxation and adjusted basic earnings* per share both increasing 17% to
#6.3m and 10.5p respectively. These results include a full six month turnover of
#4.5m and operating profit contribution of #0.4m from Hoomark, our Netherlands
based subsidiary, which was acquired in November 2003. The integration of
Hoomark into the Group has proceeded well and I am pleased to report that its
performance is in line with our expectations. Excluding Hoomark's results, the
Group's turnover increased by 7% and adjusted profit* before tax improved by
12%.
The refocusing of the US division during the past 18 months has resulted in a
strong performance, with US$ like-for-like sales up 23%. Movements in period-end
exchange rates mean that, after translation into sterling, the reported increase
in turnover is 12%.
The acquisition of Hoomark and the licensed Christmas decoration business last
year, has significantly strengthened our trading relationship with Disney
Consumer Products and, as a result, we recently signed a new long term licence
for our core product categories with them. This new licence encompasses all the
forthcoming Disney film releases, including the recently released blockbuster
"The Incredibles", for which we have supplied stationery and Christmas based
merchandise. Krackajack, which we acquired in June this year, has been
successfully integrated into our cracker division and has helped to further
strengthen our position in that market.
As part of our on-going strategy of reducing costs and maintaining our
competitive position, we recently made the decision to transfer the
manufacturing of greetings cards and tags from the UK to a new facility in
Eastern Europe, currently in the process of being established. It is anticipated
that this new facility will be operational by 31st March 2005, in time to meet
next year's production requirements for these products. The exceptional one-off
costs of transferring this production facility, which are estimated to be
approximately #700,000, will be mostly incurred during the six month period to
31st March 2005. We are confident that this lower cost base will not only enable
us to add value to existing products but will provide a platform for further
growth in Europe.
On 1st August 2004, we announced the appointment of Keith James as a
non-executive board director. Keith has an extensive background in domestic and
international corporate law and recently retired as Chairman of Eversheds LLP,
one of the largest legal practices in Europe. His vast experience in all aspects
of business will be invaluable to the Group during our next important period of
growth. Hugh Child, a non-executive director since January 2002 retired from the
Board, and we thank him for the considerable contribution he made during his
time with us.
* excluding amortisation of goodwill of #182,000 (6 months to 30th September
2003 : #87,0000) and exceptional item of #nil (6 months to 30th September 2003 :
#684,000)
Current Trading
Whilst the trend continues for consumers to carry out their Christmas shopping
later each year, we have now completed the bulk of the season's deliveries to
our customers and are optimistic about our full year's performance. In a
challenging retail environment, we have demonstrated our ability to deliver
quality, design-based products to our customers that meet their margin
requirements and satisfy the ever more sophisticated demands of the consumer.
Our creative and sales teams are already working with the in-house teams of many
of our major retail clients and are clearly focussed on the range and design
developments for the Christmas 2005 season.
Reflecting our continued confidence in the future prospects and financial
strength of the Group, we are proposing an interim dividend of 1.75p per share,
an increase of 17% over last year. The dividend will be paid on 21st January
2005 to all shareholders on the register on 17th December 2004.
John Elfed Jones CBE DL
Chairman
International Greetings PLC
Interim Report 2004
Consolidated profit and loss account
for the six months to 30th September 2004
Note Unaudited Unaudited Audited
6 months to 6 months to 12 months to
30 September 30 September 31 March 2004
2004 2003
#000 #000 #000
------------- ------------- ----------
Turnover 2 61,781 53,471 126,689
----------------------- --- ------------- ------------- ----------
Operating profit
before exceptional
item 2 6,140 5,444 12,021
----------------------- --- ------- ------- --------
Exceptional item 3 - (684) (684)
----------------------- --- ------------- ------------- ----------
Operating profit 6,140 4,760 11,337
------------------ ------- ------- --------
Net interest
payable (30) (154) (137)
----------------------- ------------- ------------- ----------
Profit before
taxation 6,110 4,606 11,200
------------------------ ------- ------- --------
Taxation 5 (1,809) (1,403) (3,142)
----------------------- --- ------------- ------------- ----------
Profit after
taxation 4,301 3,203 8,058
----------------------- ------- ------- -------
Dividend proposed (759) (662) (2,774)
----------------------- ------------- ------------- ----------
Retained profit 3,542 2,541 5,284
----------------------- ------------- ------------- ----------
Earnings per share 4
-------------------- ---
Basic 10.1p 7.7p 19.2p
------- ------ -------
Adjusted basic
excluding goodwill
and exceptional
item 10.5p 9.0p 20.7p
Diluted 10.0p 7.6p 19.1p
----------------------- ------------- ------------- ----------
Dividend per
ordinary share 1.75p 1.5p 6.5p
----------------------- ------------- ------------- ----------
Statement of recognised gains and losses
for the six months to 30 September 2004
-----------------------------------------
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
30 September 30 September 31 March
2004 2003 2004
#000 #000 #000
Profit for the period 4,301 3,203 8,058
----------------------- ------------- ------------- ----------
Currency translation differences
arising on foreign currency net investments 99 (243) (835)
----------------------- ------------- ------------- ----------
Total recognised gains and losses
relating to the period 4,400 2,960 7,223
----------------------- ------ ------------- ------------- ----------
International Greetings PLC
Interim Report 2004
Consolidated balance sheet
at 30th September 2004
Note Unaudited Unaudited Audited
30 September 30 September 31 March 2004
2004 2003
#000 #000 #000
Fixed assets
Intangible assets -
goodwill 2,557 978 2,737
Tangible assets 25,484 21,856 23,271
----------------------- ------ ------------- ------------- ----------
28,041 22,834 26,008
Current assets
Stocks 39,110 36,629 22,069
Debtors 45,873 44,059 11,492
Cash at bank and in
hand 5 1 16,233
----------------------- ------ ------------- ------------- ----------
84,988 80,689 49,794
Creditors: amounts
falling due within
one year (60,257) (56,172) (25,583)
----------------------- ------ ------------- ------------- ----------
Net current assets 24,731 24,517 24,211
----------------------- ------ ------------- ------------- ----------
Total assets less
current liabilities 52,772 47,351 50,219
Creditors: amounts
falling due after
more than one year (1,999) (3,315) (3,059)
Provisions for
liabilities and
charges (199) (382) (243)
Deferred income (2,656) (2,824) (2,802)
----------------------- ------ ------------- ------------- ----------
Net assets 47,918 40,830 44,115
----------------------- ------ ------------- ------------- ----------
Capital and reserves
Called up share
capital 2,129 2,109 2,112
Share premium
account 2,515 1,652 1,703
Potential issue of
shares 413 - 1,080
Other reserves 280 773 181
Profit and loss
account 42,581 36,296 39,039
----------------------- ------ ------------- ------------- ----------
Equity shareholders'
funds 6 47,918 40,830 44,115
----------------------- ------ ------------- ------------- ----------
International Greetings PLC
Interim Report 2004
Consolidated cash flow statement
for the six months to 30th September 2004
Note Unaudited Unaudited Audited
6 months to 6 months to 12 months to
30 September 30 September 31 March 2004
2004 2003
#000 #000 #000
Net cash
(outflow)/inflow
from operating
activities 7 (28,585) (27,105) 23,695
Returns on
investments and
servicing of
finance 8 (21) (151) (191)
Taxation (1,399) (1,165) (3,175)
Capital expenditure 8 (3,408) (2,221) (4,842)
Acquisitions and
disposals 8 (1,520) - (7,777)
Equity dividends
paid (2,126) (1,878) (2,511)
----------------------- ------ ------------- ------------- ----------
Cash (outflow)/
inflow before
financing (37,059) (32,520) 5,199
Financing 8 (1,276) 4,977 1,440
----------------------- ------ ------------- ------------- ----------
(Decrease)/increase
in cash (38,335) (27,543) 6,639
----------------------- ------ ------------- ------------- ----------
Reconciliation of net cash flow to movement in net (debt)/funds
for the six months to 30th September 2004
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
30 September 30tSeptember 31 March 2004
2004 2003
#000 #000 #000
(Decrease)/increase in
cash in the period (38,335) (27,543) 6,639
Cash outflow/(inflow)
from debt and lease
financing 1,438 (4,374) (783)
----------------------- ------------- ------------- ----------
Change in net
(debt)/funds resulting
from cash flows (36,897) (31,917) 5,856
Inception of finance
leases - - (180)
Finance leases
acquired with
subsidiary - - (393)
Translation
differences (276) 327 1,552
----------------------- ------------- ------------- ----------
Movement in net
(debt)/funds in the
period (37,173) (31,590) 6,835
Net funds at beginning
of period 10,268 3,433 3,433
----------------------- ------------- ------------- ----------
Net (debt)/funds at
end of period (26,905) (28,157) 10,268
----------------------- ------------- ------------- ----------
Notes:
1 Basis of Preparation
The interim statement has been prepared under the same accounting policies as
those used for the financial statements for the year ended 31st March 2004.
The comparative figures for the year ended 31st March 2004 are an abridged
version of the published accounts and are not the company's statutory accounts
for that financial year. Those accounts have been reported on without
qualification by the auditors, and without any statement under Section 237 (2)
or (3) of the Companies Act 1985, and have been delivered to the Registrar of
Companies.
2 Acquisitions
(a) On 19th November 2003, the Group acquired 100% of the issued
share capital of Hoomark Giftwrap Partners BV. During the period from the date
of acquisition to 31st March 2004, the Group's results included turnover of
#2.05m and an operating loss of #458,000 attributable to Hoomark.
(b) On 1st June 2004, the Group purchased certain assets and the business of
Krakajack Limited, a supplier of Christmas crackers to the catering market, for
an initial consideration of #1.52m. This represented #800,000 in respect of
plant and machinery and #720,000 in respect of stock. No goodwill arose on this
acquisition. In addition to this amount, an agreed percentage of sales made to
Krakajack customers in 2004 and 2005 will be payable to the vendors. This amount
is expected to amount to approximately #100,000. During the period to 30th
September 2004, sales to Krakajack customers totalled #182,000. Following
Krakajack's integration into the Group's Christmas cracker division, it is not
possible to separately identify the operating profit attributable to these
sales.
3 Exceptional Item
The exceptional item of #684,000 during the six months to 30th September 2003
and the year ended 31st March 2004 represented the one-off start-up costs
associated with the establishment of a new business division involved in the
design and selling of licensed Christmas decorations.
4 Earnings Per Share
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
30 September 30 September 31 March 2004
2004 2003
Adjusted basic earnings per
share excluding goodwill and
exceptional item 10.5p 9.0p 20.7p
Loss per share on goodwill (0.4p) (0.2p) (0.4p)
Loss per share on exceptional
item - (1.1p) (1.1p)
----------------------- ------------- ------------- ----------
Basic earnings per share 10.1p 7.7p 19.2p
----------------------- ------------- ------------- ----------
Diluted earnings per share 10.0p 7.6p 19.1p
----------------------- ------------- ------------- ----------
The calculation of basic earnings per share is based on 42,378,290 (6 months to
30th September 2003: 41,788,924, 12 months to 31st March 2004: 41,995,174)
ordinary shares being the average number of shares in issue during the period.
The calculation of diluted earnings per share is based on 42,883,669 (6 months
to 30th September 2003: 41,993,399, 12 months to 31st March 2004: 42,180,513)
ordinary shares. The difference of 505,380 (6 months to 30th September 2003:
204,475, 12 months to 31st March 2004: 185,339) represents the dilutive effect
of outstanding employee share options which have been calculated in accordance
with FRS 14.
Adjusted basic earnings per share excluding goodwill and exceptional item is
calculated after adjusting for amortisation of goodwill of #182,000 (6 months to
30th September 2003: #87,000, 12 months to 31st March 2004: #233,000), the
exceptional item of #nil (6 months to 30th September 2003: #684,000, 12 months
to 31st March 2004: #684,000) and the tax relief thereon.
5 Taxation
The taxation charge for the six months ended 30th September 2004 is based on the
estimated tax rate for the full year.
6 Reconciliation of movements in shareholders' funds
Unaudited Unaudited Audited
6 months to 6 months to 12 months
30 September 30 September 31 March 2004
2004 2003
#000 #000 #000
Profit for the period 4,301 3,203 8,058
Dividend (759) (662) (2,774)
----------------------- ------------- ------------- ----------
3,542 2,541 5,284
------- -------- -------
Other recognised gains
and losses relating to
the period (net) 99 (243) (835)
New share capital
subscribed 829 603 657
Potential issue of
shares (667) - 1,080
----------------------- ------------- ------------- ----------
Net addition to
shareholders' funds 3,803 2,901 6,186
Opening shareholders'
funds 44,115 37,929 37,929
----------------------- ------------- ------------- ----------
Closing shareholders'
funds 47,918 40,830 44,115
----------------------- ------------- ------------- ----------
7 Reconciliation of operating profit to
net cash (outflow)/ inflow from operating activities
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
30 September 30 September 31 March 2004
2004 2003
#000 #000 #000
Operating profit
before exceptional
item 6,140 4,760 12,021
Exceptional item - - (684)
Depreciation charge 2,102 1,896 4,466
(Increase)/decrease in stocks (16,129) (15,027) 1,454
(Increase)/decrease in debtors (34,364) (34,556) 2,073
Increase in creditors 13,634 15,927 4,431
Grant income (150) (192) (299)
Goodwill amortisation 182 87 233
------------------------- ------------- ------------- ----------
Net cash
(outflow)/inflow from
operating activities (28,585) (27,105) 23,695
------------------------- ------------- ------------- ----------
8 Gross Cash Flows
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
30 September 30 September 31 March 2004
2004 2003
#000 #000 #000
Returns on investment and servicing
of finance
Net interest paid (11) (137) (153)
Interest element of
finance lease
repayments (10) (14) (38)
------------------------- ------------- ------------- ----------
(21) (151) (191)
------------- ------------- ----------
Capital expenditure
Purchase of tangible fixed assets (3,438) (2,322) (5,016)
Disposal of tangible fixed assets 30 101 174
------------- ------------- ----------
(3,408) (2,221) (4,842)
------------- ------------- ----------
Acquisition and disposals
Acquisition cost (1,520) - (1,226)
Net overdraft acquired
with subsidiary - - (6,551)
------------------------- ------------- ------------- ----------
(1,520) - (7,777)
------------- ------------- ----------
Financing
New shares issued 162 603 657
New net loans (1,269) 4,466 970
Capital element of
finance lease payments (169) (92) (187)
------------- ------------- ----------
(1,276) 4,977 1,440
------------- ------------- ----------
9 Analysis of movement in net (debt)/funds
At 31 March Cash Flow Exchange At 30 September
2004 Movement 2004
#000 #000 #000 #000
Cash at bank
and in hand 16,233 (16,228) - 5
Overdrafts (2,324) (22,107) (219) (24,650)
------------ ----------- ------------- --------------
13,909 (38,335) (219) (24,645)
------------ ----------- ------------- --------------
Bank loans (2,557) 1,269 (42) (1,330)
Finance leases (1,084) 169 (15) (930)
--------------- ------------ ----------- ------------- --------------
(3,641) 1,438 (57) (2,260)
------------ ----------- ------------- --------------
Total net
funds/(debt) 10,268 (36,897) (276) (26,905)
--------------- ------------ ----------- ------------- --------------
This information is provided by RNS
The company news service from the London Stock Exchange
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