RNS Number:0111R
Walker (Thomas) PLC
28 March 2008
Chairman's Statement on the Interim Results for the half year ending
31 December 2007
The uncertainties foreshadowed in the Company Report for the year ending June
2007 have materialised. The Group was prepared for them, but conditions have
been more challenging than expected, leading to reduced demand across all
sectors.
Group turnover declined to �4,499,000 (2006: �5,017,000) - a reduction of 10.3%.
This has resulted in an operating loss of �48,000 after one off costs of
�161,000 (2006: Profit �388,000).The loss after income tax amounts to �77,000
(2006 Profit of �212,000).
Within the one off costs for the period are losses resulting from a temporary
lapse of protocols governing brass purchasing and pricing during a period of
erratic London Metal Exchange ("LME") values. The matter has been thoroughly
investigated and management changes have been made. The effects are contained
and accounted for within the period as one off costs.
Encouragingly, Net Debt was reduced by �272,000 during the period to stand at
�1,943,000.
The interim statement has been prepared adopting IFRS for the first time.
Reconciliation between the adopted IFRS and former UK GAAP is attached to this
statement and posted with the Interim Report on the Company web-site,
www.thomaswalker.co.uk.
The Directors are of the opinion that the fundamentals of the Company's
operations remain sound and are therefore pleased to maintain the Interim
Dividend at 0.5 pence per share.
The Interim Dividend will be paid on 6th May 2008 to shareholders on the
register at 11th April 2008.
Stamping: TW Stamping Ltd
Turbulence in the brass market and in the market for brass components resulted
in a reduction in sales to �2,672,000 (2006: �2,949,000).
This weakening culminated in a difficult December trading period, where some
customers closed early or delayed acceptance of completed orders, other than
when urgently required.
The redundancies resulting from the rationalisation programme were negotiated
successfully and the combined factories integrated satisfactorily.
With the completion of the relocation, new safety and environmental audits were
undertaken with necessary actions being initiated without delay.
Accessories: Thomas Walker (UK) Ltd and Thomas Walker (SEA) Ltd
Turnover for the six months to December 2007, declined to �1,827,000 (2006:
�2,068,000) as a temporary resilience in 2006/2007 came to an end in the garment
sector.
The peripatetic nature of garment manufacture was again demonstrated as once
more it migrated eastwards - this time from Eastern Europe and North Africa back
to China and India and, within China, from the seaboard provinces northward as
the hinterland is opened up. Access for foreign producers of accessories to the
northern provinces is logistically restricted at present and this will tend to
favour their local producers.
Identity products also showed decline as some large personal identity contracts
ended and economic uncertainties delayed renewal. This is a clear indication of
generally reduced recruiting activities in the United Kingdom and Europe.
Management Change
The Board is delighted to announce the impending appointment of Mr William Good
who will assume the position of Group Managing Director following the retirement
of Mr Edward Cook in October 2008.
Mr Good is a graduate engineer and a qualified accountant with extensive
industry experience having previously been Managing Director of businesses
within the TI and the Sandvik Groups. Mr. Good will join Thomas Walker PLC at
the beginning of June 2008 prior to assuming his Main Board Director
responsibilities in July 2008.
Mr Edward Cook will remain on the Board until October 2008, as an executive
Director to ensure an efficient hand over.
Outlook
The general market outlook for the first half of the calendar year 2008 remains
uncertain as indicated in the sector analyses.
The stamping industry is experiencing a general weakness in enquiries for
components, as end customers reduce their exposure and intermediate
manufacturers destock. Brass prices remain volatile and will depend on the
volume of demand from China and India.
Retailers are becoming increasingly cautious in their forward commitments for
garments and their accessories. Established customers are ordering for the
summer season, but quantities are significantly below the comparable period last
year as fears persist of a general downturn on the High Street.
Forecasters predict significant cost inflation in China as measures come into
effect ranging from appreciation of the Renminbi, to employment legislation and
environmental improvements. It remains to be seen what effect these may have on
both garment manufacture and supply of identity products.
Notwithstanding the current uncertainties, trading in the early part of 2008 is
encouraging and given that this period will be the first to benefit from the
managerial and procedural improvements the Board look forward to being in a
position to report useful progress when the Group reports its full year result
in the autumn.
Bryan C Knight
Chairman
Consolidated Income Statement
Six months ended 31 December 2007
Unaudited Unaudited Audited
6mths to 6mths to Year ended
31/12/07 31/12/06* 30/06/07*
�'000 �'000 �'000
________________________________________________________________________________
Revenue 4,499 5,017 9,890
Operating expenses (4,386) (4,629) (9,071)
One off costs (note 2) (161) - -
________________________________________________________________________________
Operating (loss)/profit (48) 388 819
Finance income - 1 -
Finance cost (82) (74) (168)
________________________________________________________________________________
(Loss)/Profit before income tax (130) 315 651
Income tax credit/(expense) 53 (103) (146)
________________________________________________________________________________
(Loss)/Profit for the period (77) 212 505
attributable to the equity holders
of the parent company
________________________________________________________________________________
Basic and diluted (loss) /earnings (note 4) (1.25) 3.44 8.20
per share (pence)
________________________________________________________________________________
Consolidated Statement of Recognised Income and Expense
Six months ended 31 December 2007
Unaudited Unaudited Audited
6mths to 6mths to Year ended
31/12/07 31/12/06* 30/06/07*
�'000 �'000 �'000
________________________________________________________________________________
Actuarial gains on defined benefit - 154 511
pension scheme
Deferred tax on actuarial (gain)/ Loss - (46) (153)
Exchange differences on - - 4
translation of foreign operations
________________________________________________________________________________
Net profit recognised directly in equity - 108 362
(Loss) / Profit for the period (77) 212 505
attributable to the equity holders
of the parent company
________________________________________________________________________________
Total recognised income and (77) 320 867
expense for the period
________________________________________________________________________________
*Restated for IFRS
Revenue and operating profit/(loss) all derive from continuing operations
Consolidated Balance Sheet
As at 31 December 2007
Unaudited at Unaudited at Audited at
31/12/07 31/12/06* 30/06/07*
�'000 �'000 �'000
________________________________________________________________________________
Non-current assets
Intangible Assets 551 664 565
Property, plant and equipment 3,886 3,572 3,958
Deferred tax assets 11
Retirement benefit surplus 337 (34) 337
________________________________________________________________________________
4,774 4,213 4,860
________________________________________________________________________________
Current Assets
Inventories 1,820 1,928 1,794
Trade and other receivables 2,337 2,787 2,540
Cash and cash equivalents 449 344 249
________________________________________________________________________________
4,606 5,059 4,583
________________________________________________________________________________
Total assets 9,380 9,272 9,443
________________________________________________________________________________
Current liabilities
Trade and other payables (1,781) (1,772) (1,671)
Current tax liabilities (199) (260) (150)
Obligations under finance lease (46) (46) (46)
Bank loans (1,021) (1,237) (1,026)
________________________________________________________________________________
(3,047) (3,315) (2,893)
________________________________________________________________________________
Non Current liabilities
Bank loans (1,305) (1,371) (1,348)
Deferred tax liabilities (230) (110) (241)
Obligations under finance leases (20) (67) (44)
________________________________________________________________________________
(1,555) (1,548) (1,633)
________________________________________________________________________________
Total liabilities (4,602) (4,863) (4,526)
________________________________________________________________________________
NET ASSETS 4,778 4,409 4,917
________________________________________________________________________________
Capital and Reserves
Called up Share Capital 308 308 308
Share Premium Account 15 15 15
Other Reserve 4 - 4
Retained earnings 4,451 4,086 4,590
________________________________________________________________________________
TOTAL EQUITY 4,778 4,409 4,917
________________________________________________________________________________
*Restated for IFRS
Consolidated Statement of Cash flows
For the six months ended 31 December 2007
Unaudited Unaudited Audited
6mths to 6mths to Year ended
31/12/07 31/12/06 30/06/07
�'000 �'000 �'000
________________________________________________________________________________
Profit for the period (77) 212 505
Adjustments for:
Finance costs 82 74 168
Finance income - (1) -
Income tax expense (53) 103 146
Depreciation of plant, property and 209 251 522
equipment
Amortisation of Intangible assets - - 7
________________________________________________________________________________
Operating cash flows before movement
in working capital 161 639 1,348
(Increase)/decrease in inventories (26) (445) (311)
Decrease/(increase) in debtors 205 (210) 38
(Decrease)/increase in creditors 198 55 (201)
________________________________________________________________________________
Cash flow from operations 538 39 874
Net Interest paid (80) (68) (162)
Interest paid on finance leases (2) (5) (6)
Tax paid - - 16
________________________________________________________________________________
Net cash from/(used in) operating activities 456 (34) 722
________________________________________________________________________________
Cash flow from investing activities
Purchase of property, plant and (123) (246) (811)
equipment
________________________________________________________________________________
Net cash used in investing activities (123) (246) (811)
________________________________________________________________________________
Cash flow from financing activities
Bank loan repayments (42) (37) (59)
Proceeds/(repayment) new bank facilities (5) 473 263
Finance lease repayments (24) (22) (46)
Equity dividend paid (note 3) (62) (52) (83)
________________________________________________________________________________
Net cash (used in)/from financing (133) 362 75
activities
________________________________________________________________________________
Net increase/(decrease) in cash, cash 200 82 (14)
equivalents
Cash, cash equivalents at beginning of 249 263 263
period
________________________________________________________________________________
Cash, cash equivalents at end of the period 449 345 249
________________________________________________________________________________
Notes to the statements
At 31 December 2007
1. Basis of Preparation
This interim report does not constitute statutory accounts of the group
within the meaning of section 240 of the Companies Act 1985. Statutory
accounts for the year ended 30 June 2007, which were prepared under UK
generally accepted accounting principles (UK GAAP), have been filed with the
Registrar of Companies. The auditor's report on those accounts was
unqualified and did not contain a statement under section 237 of the
Companies Act 1985.
The accounting policies applied in these un-audited interim financial
statements are those that the group expects to apply in its annual financial
statements for the year ended 30 June 2008, which will be prepared in
accordance with International Financial Reporting Standards (IFRS), and
those parts of the Companies Act 1985 that remain applicable to companies
reporting under IFRS.
2. One off Costs
During the current period the company has incurred one off costs that are not
due to ordinary trading. There is a one off loss on materials of �98,000 and
Re-organisation costs �63,000.
3. Dividends paid
Final equity dividend relating to year ended 30th June 2007 paid on ordinary
shares of 1p per share, Company total of �61,600, (2006: Final equity
dividend relating to year ended 30th June 2006 paid on ordinary shares of
0.85p per share, Company total of �52,360).
4. Earnings per share
The basic loss/earnings per share is calculated on the loss on ordinary
activities after taxation �77,000 for the period to 31 December 2007 (31
December 2006: profit �212,000) and on 6,160,000 ordinary shares (2006:
6,160,000 ordinary shares), being the weighted average number of ordinary
shares in issue during the period.
5. Analysis of changes in net debt
As at Cashflow As at
1 July 31 December
2007 2007
________________________________________________________________________________
Cash at bank and in hand 249 200 449
________________________________________________________________________________
249 200 449
Bank loans due within one year (65) - (65)
Bank loans due after more than one year (1,348) 43 (1,305)
Finance leases due within one year (46) - (46)
Finance leases due after more than one year (44) 24 (20)
Debt resulting from new invoice financing (961) 5 (956)
________________________________________________________________________________
(2,215) 272 (1,943)
________________________________________________________________________________
6. Capital and Reserves
Reconciliation of movement in capital and reserves
Share Share Foreign Retained Total
capital premium exchange earnings equity
account
________________________________________________________________________________
Balance at 1 July 2007* 308 15 4 4,590 4,917
Dividends paid - - - (62) (62)
Loss for the period - - - (77) (77)
________________________________________________________________________________
At 31 December 2007 308 15 4 4,451 4,778
* Restated for IFRS
The Interim Statement will be sent to shareholders and is available to the
public at the registered office: Catesby Park, Eckersall Road, Kings Norton,
Birmingham B38 8SE and on the Company website at www.thomaswalker.co.uk.
Contacts
John Lomer
Group Financial Director
07778 889977
Katie Dale
Golley Slater Financial PR
0121 384 9743
07918 716 754
Colin Smith
Arden Partners
0121 423 8940
Adoption of International Financial Reporting Standards (IFRS)
Preliminary restatement of comparative periods
Introduction
Companies listed on the AIM market are required to adopt International Financial
Reporting Standards as adopted by the European Union ("Adopted IFRS") for
financial periods commencing on or after 1 January 2007. Thomas Walker plc will
report its results under Adopted IFRS for the year ending 30 June 2008. Its
first results to be reported under the new standards will be for the period
ending 31 December 2007.
In order to comply with Adopted IFRS, Thomas Walker is required to provide
comparative numbers. Included within this report is an analysis of how balance
sheets and income statements previously prepared under UK generally accepted
accounting principles ("UK GAAP") will change under Adopted IFRS, and to explain
the adjustments to reconcile the figures from one basis of accounting to the
other. The main reconciling items and their effects on the balance sheet and
income statement are set out as follows:
Appendix 1 - Opening Balance Sheet at 1 July 2006
Appendix 2 - Income Statement for the six months ended 31 December 2006
Appendix 3 - Balance Sheet at 31 December 2006
Appendix 4 - Income Statement for year ended 30 June 2007
Appendix 5 - Balance Sheet at 30 June 2007
IFRS 1 - First time adoption
IFRS 1 'First time adoption of International Financial Reporting Standards'
details the procedures a company must follow when adopting IFRS for the first
time. It also gives companies the option of taking a number of exemptions to the
full requirements on transition. The group's date of transition to IFRS is 1
July 2006, with the transitional year being the year ended 30 June 2007.
The group has elected to take the following key exemption on transition to IFRS.
- IFRS 3- Business combinations
The group has chosen not to restate historical business combinations that
took place before the date of transition 1 July 2006.
- IAS 21 - Effect of change in foreign exchange rates
The group has chosen to deem that the cumulative translation differences for
translation of foreign entities are deemed to be zero at the date of
transition to IFRS.
Notes to changes arising from the adoption of IFRS
1. IAS 19 - Employee benefits
IAS 19 does not permit pension assets or liabilities to be shown net of
deferred tax, (required under UK GAAP). This has resulted in a
reclassification of deferred tax from the pension liability to deferred tax
asset (July 2006: �57,000, December 2006: �11,000) and from pension asset to
deferred tax liability (June 2007: �101,000).
2. IAS 12 - Income Tax: deferred tax
Deferred tax should be recognised on the basis of taxable temporary
differences (subject to certain exceptions), which represents the difference
between the carrying value of an asset or liability and the amount used for
taxation purposes.
3. IAS 21 - Effects of change in foreign exchange rates: translation of
foreign entities
Under IAS 21, exchange differences arising on the translation of foreign
entities are required to be separately tracked within equity and the
cumulative amounts disclosed in a separate reserve within shareholders funds.
As a result, at December 2006 and June 2007 the foreign exchange reserves of
�nil and �4,000 respectively have been separately disclosed from retained
earnings in other reserves. Under UK GAAP exchange differences arising
from translation are recorded as a movement on retained earnings.
4. IFRS 3 - Goodwill
Under IFRS 3, Goodwill is no longer amortised therefore we have added back
�11,000 for the period ended 31 December 2006 and �22,000 for the year ended
30 June 2007.
5. IFRS 1 - Impact on cash flow statement
The group prepares the cash flow statement for both UK GAAP and Adopted IFRS
using the indirect method. Consequently, adjustments made to working capital
items in the balance sheet on conversion to Adopted IFRS lead to an
adjustment in the IFRS cash flow statement. There are no significant changes
between cash flows from operating activities, investing activities, and
financing activities. No adjustments have been made to cash and cash
equivalents, and no other adjustments have been made to the cash flow
statement on conversion.
Appendix 1
Transition balance sheet
As at 1 July 2006
UK GAAP IAS 19 IAS 12 IFRS
2006 Employee Deferred 2006
Benefits Tax
�'000 �'000
_________________________________________
Non current assets
Intangible assets 572 572
Property, plant and equipment 3,669 3,669
Deferred tax assets 57 57
_________________________________________
4,241 57 4,298
_________________________________________
Current Assets
Inventories 1,483 1,483
Trade and other receivables 2,577 2,577
Cash and cash equivalents 263 263
_________________________________________
4,323 4,323
_________________________________________
Total assets 8,564 57 8,621
_________________________________________
Current liabilities
Trade and other payables (1,857) (1,857)
Current tax liabilities (16) (16)
Obligations under finance leases (46) (46)
Bank Overdrafts and loans (763) (763)
_________________________________________
(2,682) (2,682)
Non current liabilities
Bank loans (1,407) (1,407)
Deferred tax liabilities (109) (22) (131)
Obligations under finance leases (90) (90)
Retirement benefit obligations (134) (57) (191)
_________________________________________
(1,740) (57) (22) (1,819)
_________________________________________
Total liabilities (4,422) (57) (22) (4,501)
_________________________________________
Net assets 4,142 (22) 4,120
_________________________________________
Capital and reserves
Called up share capital 308 308
Share premium account 15 15
Retained earnings 3,819 (22) 3,797
_________________________________________
Total Equity 4,142 (22) 4,120
_________________________________________
Appendix 2
Income statement
6 months ended 31 December 2006
UK GAAP IAS 12 IFRS 3 IFRS
2006 Income Goodwill 2006
tax
�'000 �'000
_________________________________________
Revenue 5,017 5,017
Operating expenses (4,640) 11 (4,629)
Other operating income
_________________________________________
Operating profit 377 11 388
Finance income 1 1
Finance costs (74) (74)
_________________________________________
Profit on ordinary activities before 304 11 315
taxation
Income tax expense (91) (12) (103)
_________________________________________
Profit on ordinary activities after 213 (12) 11 212
taxation _________________________________________
_________________________________________
Basic earnings per share (p) 3.45p 3.44p
_________________________________________
Appendix 3
Balance sheet
As at 31 December 2006
UK GAAP IAS 19 IAS 12 IFRS 3 IFRS
2006 Employee Deferred Goodwill 2006
Benefits Tax
�'000 �'000
_________________________________________________
Non current assets
Intangible assets 653 11 664
Property, plant and equipment 3,572 3,572
Deferred tax assets 11 11
_________________________________________________
4,225 11 11 4,247
_________________________________________________
Current Assets
Inventories 1,928 1,928
Trade and other receivables 2,787 2,787
Cash and cash equivalents 344 344
_________________________________________________
5,059 5,059
_________________________________________________
Total assets 9,284 11 11 9,306
_________________________________________________
Current liabilities
Trade and other payables (1,772) (1,772)
Current tax liabilities (260) (260)
Obligations under finance leases (46) (46)
Bank Overdrafts and loans (1,237) (1,237)
_________________________________________________
(3,315) (3,315)
Non current liabilities
Bank loans (1,371) (1,371)
Deferred tax liabilities (98) (12) (110)
Obligations under finance leases (67) (67)
Retirement benefit obligations (23) (11) (34)
_________________________________________________
(1,559) (11) (12) (1,582)
_________________________________________________
Total liabilities (4,874) (11) (12) (4,897)
_________________________________________________
Net assets 4,410 (12) 11 4,409
_________________________________________________
Capital and reserves
Called up share capital 308 308
Share premium account 15 15
Retained earnings 4,087 (12) 11 4,086
_________________________________________________
Total Equity 4,410 (12) 11 4,409
_________________________________________________
Appendix 4
Income statement
Year ended 30 June 2007
UK GAAP IAS 12 IFRS 3 IFRS
2007 Income Goodwill 2007
tax
�'000 �'000
_________________________________________
Revenue 9,890 9,890
Operating expenses (9,093) 22 (9,071)
Other operating income
_________________________________________
Operating profit 797 22 819
Finance costs (168) (168)
_________________________________________
Profit on ordinary activities before 629 22 651
taxation
Income tax expense (99) (47) (146)
_________________________________________
Profit on ordinary activities after 530 (47) 22 505
taxation _________________________________________
_________________________________________
Basic earnings per share (p) 8.60p 8.20p
_________________________________________
Appendix 5
Balance sheet
As at 30 June 2007
UK GAAP IAS 21 IAS 19 IAS 12 IFRS 3 IFRS
2007 Foreign Employee Deferred Goodwill 2007
Exchange Benefits Tax
�'000 �'000
___________________________________________________________
Non current assets
Intangible assets 543 22 565
Property, plant and equipment 3,958 3,958
Retirement benefit surplus 236 101 337
___________________________________________________________
4,737 101 22 4,860
___________________________________________________________
Current Assets
Inventories 1,794 1,794
Trade and other receivables 2,540 2,540
Cash and cash equivalents 249 249
___________________________________________________________
4,583 4,583
___________________________________________________________
Total assets 9,320 101 22 9,443
___________________________________________________________
Current liabilities
Trade and other payables (1,671) (1,671)
Current tax liabilities (150) (150)
Obligations under finance leases (46) (46)
Bank Overdrafts and loans (1,026) (1,026)
___________________________________________________________
(2,893) (2,893)
Non current liabilities
Bank loans (1,348) (1,348)
Deferred tax liabilities (93) (101) (47) (241)
Obligations under finance leases (44) (44)
___________________________________________________________
(1,485) (101) (47) (1,633)
___________________________________________________________
Total liabilities (4,378) (101) (47) (4,526)
___________________________________________________________
Net assets 4,942 (47) 22 4,917
___________________________________________________________
Capital and reserves
Called up share capital 308 308
Share premium account 15 15
Other reserves 4 4
Retained earnings 4,619 (4) (47) 22 4,590
___________________________________________________________
Total Equity 4,942 (47) 22 4,917
___________________________________________________________
This information is provided by RNS
The company news service from the London Stock Exchange
END
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