Interim Results
04 Juillet 2005 - 4:24PM
UK Regulatory
RNS Number:4374O
Longmead Group PLC
04 July 2005
THE LONGMEAD GROUP plc
CHAIRMAN'S STATEMENT
Trading Results
The trading results for the six months ending 30 April 2005 show a very small
loss of just #6,000. This compares with a trading loss of #34,000, before
exceptional items, in the first six months of last year. Compared with the same
period last year, turnover has declined by 9% to #1.27 m (2004: #1.4 m),
although compared with the second half of last year the six months' turnover has
increased by 15%.
Gross margins have fallen due to the continued pressure on purchase prices,
lower exchange rates and our inability to pass on price increases to our major
customers. The improvement in the net trading result has been achieved by
reducing our overheads by nearly 20% compared with the previous first half.
Sales
Sales continue to be disappointing. Our general trade business to retailers and
distributors has increased by nearly 8% but this has been offset by a fall of
nearly 16% to our major DIY customers. This is a continuing problem as these
customers source more and more of their products directly from the Far East.
As a result, we are making a major effort to increase our general trade
business. We launched an additional bathroom accessories catalogue at the start
of the calendar year which has enlarged our product base and enabled us to sell
to new outlets. These contain medium priced products under the Oceana brand
name. The launch has been encouraging so far and we are hoping to build on
this. We have recently updated our main product catalogue and have introduced a
number of new products.
In addition, we have prepared a complete new range of door furniture to be
launched in September/October of this year. The range will comprise
competitively priced imported products which we consider will have a wide
appeal. We believe that there are significant opportunities to increase our
market share in this area where, at present, we have a very small percentage.
The new range of products is unlikely to have an impact on sales in the present
financial period but we expect to see growing sales in the next financial year.
A key event in early 2006 is the KBB Exhibition in Birmingham where we are
planning the introduction of further new products.
Balance Sheet
The net assets per share at the end of the half year are little changed from the
previous financial accounts at nearly 33p. Stocks have remained at the
previous level in spite of efforts to reduce them as we are now importing more
products from the Far East where lead times are longer, and our stocks of
imported products have therefore increased. Our bank borrowings as a
percentage of shareholders' funds now stand at 60% mainly as a result of the
rise in debtors since the year end. The medium term loan is being steadily
reduced and is now #608,000.
Future Prospects
There is a great deal of uncertainty about the present economic climate. We are
finding a reduced level of confidence among many of our customers as retail
sales continue to slow and some customers are taking the opportunity to lower
their stock levels. We are starting to see a fall in house prices in some areas
and we believe that this is bound to influence consumers' attitudes.
To counter these negative effects, we have restructured our sales force, have
developed or are developing new products and have improved our sales promotion
activities whilst keeping our overheads strictly under control.
The second half of this year will be difficult but the steps we have taken
should stand us in good stead. We are continuing to search for new products to
enhance our offering, and for other business opportunities to improve our return
to shareholders.
REW Newman
Chairman
1 July 2005
UNAUDITED CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR 26 WEEKS ENDED 30 APRIL 2005
Unaudited Unaudited Audited
26 weeks to 26 weeks to 52 weeks to
30 April 2005 1 May 2004 30 Oct 2004
#'000 #'000 #'000
TURNOVER 1,270 1,400 2,501
Cost of sales (779) (812) (1,553)
_____ _____ _____
Gross profit 491 588 948
Operating costs (473) (241) (839)
_____ _____ _____
OPERATING PROFIT 18 347 109
Interest receivable - - -
Interest payable (24) (31) (56)
_____ _____ _____
(LOSS)/PROFIT ON
ORDINARY ACTIVITIES
BEFORE TAXATION (6) 316 53
Tax on profit on ordinary
activities - - -
_____ _____ _____
(LOSS)/PROFIT ON ORDINARY
ACTIVITIES AFTER TAXATION (6) 316 53
Dividends - - -
_____ _____ _____
RETAINED (LOSS)/PROFIT
FOR THE PERIOD (6) 316 53
_____ _____ _____
(LOSS)/EARNINGS PER SHARE
(PENCE) (0.11)p 5.66p 0.95p
UNAUDITED CONSOLIDATED BALANCE SHEET
AT 30 APRIL 2005
Unaudited Unaudited Audited
as at as at as at
30 April 2005 1 May 2004 30 Oct 2004
#'000 #'000 #'000
FIXED ASSETS
Intangible Assets 20 23 22
Tangible Assets 1,449 1,510 1,461
_____ _____ _____
1,469 1,533 1,483
_____ _____ _____
CURRENT ASSETS
Stocks 1,281 1,275 1,282
Debtors 539 548 385
Cash at bank and in hand 4 4 4
_____ _____ _____
1,824 1,827 1,671
CREDITORS: amounts
falling due within one year (909) (634) (739)
_____ _____ _____
NET CURRENT ASSETS 915 1,193 932
_____ _____ _____
TOTAL ASSETS LESS
CURRENT LIABILITIES 2,384 2,726 2,415
CREDITORS: amounts
falling due after one year (559) (632) (584)
PROVISIONS FOR
LIABILITIES & CHARGES - - -
_____ _____ _____
1,825 2,094 1,831
_____ _____ _____
CAPITAL AND RESERVES
Called up share capital 558 558 558
Share premium account 1,398 1,398 1,398
Capital redemption reserve 19 19 19
Revaluation reserve 263 268 265
Profit and loss account (413) (149) (409)
_____ _____ _____
TOTAL EQUITY
SHAREHOLDERS' FUNDS 1,825 2,094 1,831
_____ _____ _____
THE LONGMEAD GROUP plc
UNAUDITED CASH FLOW STATEMENT
FOR 26 WEEKS ENDED 30 APRIL 2005
Unaudited Unaudited Audited
26 weeks to 26 weeks to 52 weeks to
30 April 2005 1 May 2004 30 Oct 2004
#'000 #'000 #'000
CASH FLOW FROM OPERATING
ACTIVITIES (Note 1) (107) 42 (50)
Returns on investment and
servicing of finance (25) (34) (55)
Taxation - - -
Capital expenditure and
financial investment (10) 782 772
_____ _____ _____
NET CASH (OUTFLOW)/INFLOW
BEFORE FINANCING (142) 790 667
Financing - (Decrease)/increase (65) (587) (645)
in debt
_____ _____ _____
(DECREASE)/INCREASE
IN CASH (207) 203 22
_____ _____ ______
Note 1: Reconciliation of operating profit to net cash inflow from operating
activities
Unaudited Unaudited Audited
26 weeks to 26 weeks to 52 weeks to
30 April 2005 1 May 2004 30 Oct 2004
#'000 #'000 #'000
Operating profit 18 347 109
Depreciation 53 55 106
(Profit) on sale of fixed (1) (351) (343)
assets
Decrease/(increase) in stock 1 (73) (80)
(Increase)/decrease in debtors (153) 122 284
(Decrease) in creditors (25) (58) (126)
_____ _____ _____
Net cash (outflow)/inflow from
operating activities (107) 42 (50)
_____ _____ _____
Note 2: Reconciliation of net cash flow to movement in net debt
Unaudited Unaudited Audited
26 weeks to 26 weeks to 52 weeks to
30 April 2005 1 May 2004 30 Oct 2004
#'000 #'000 #'000
(Decrease)/increase in cash in (207) 203 22
the period
Cash inflow from decrease in
debt and lease and hire 65 587 645
purchase financing
_____ _____ _____
(142) 790 667
New finance lease and hire
purchase obligations (28) (14) (14)
_____ _____ _____
Movement in net debt in (170) 776 653
period
Net debt at beginning of (966) (1,619) (1,619)
period
_____ _____ _____
Net debt at end of period (1,136) (843) (966)
_____ _____ _____
ANALYSIS OF NET DEBT
At Other At
31 Oct non-cash 30 Apr
2004 Cash flow changes 2005
#'000 #'000 #'000 #'000
Cash 4 - - 4
Overdraft (287) (207) - (494)
_____ _____ _____ _____
(283) (207) - (490)
Debt due within one year (74) 37 (37) (74)
Debt due after one year (571) - 37 (534)
Finance leases (38) 28 (28) (38)
_____ _____ _____ _____
TOTAL (966) (142) (28) (1,136)
_____ _____ _____ _____
Note 3: Earnings per share
The loss per ordinary share is calculated on the loss on ordinary activities
after taxation and on a weighted average of ordinary shares in issue of
5,584,391 in the period (26 weeks to 1 May 2004: 5,584,391 and 52 weeks to 30
October 2004: 5,584,391).
Note 4: Preparation of interim financial statements
These unaudited financial statements have been prepared on the basis of the
accounting policies set out in the Group's 2004 statutory financial statements.
Note 5: Copies of the Accounts
Copies of the interim accounts will be sent to shareholders. Further copies
will be available from the Company's head office at The Longmead Group plc,
Millwey Industrial Estate, Axminster, Devon, EX13 5HU and from the Company's
nominated adviser, Smith & Williamson Corporate Finance Limited, at No. 1 Riding
House Street, London, W1A 3AS for at least one month from the date of this
announcement.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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