RNS Number:9107Q
Actif Group PLC
15 October 2003
Actif Group plc
Final results for the year ended 2 August 2003
Highlights
* Turnover up 2.8% to #25.6 million (2002: #24.9 million). Retail
turnover up 7.7% to #16.2m, wholesale turnover down 27.6% to #5.4m
* Profit before tax increased by 5.7% to #333,000 (2002: #315,000)
* Net Debt reduced by 39% to #1.1m (2002: #1.8m)
* Gearing ratio reduced to 27% (2002: 47%)
* Gross margins have increased to 44.9% from 42.5% as a result of the
increasing proportion of retail business within the Group
* Basic Earnings per share of 0.51p (2002: 0.74p)
* Store opening programme recommenced. New flagship stores opened in
Meadowhall and Reading during year, with Glasgow and Birmingham
opened since year end.
Commenting on these results, David Brock, Chairman said:
"The repositioning and restructure process is now broadly complete and the new
store opening programme has recommenced. This gives us a solid platform on which
to grow performance over the next year."
Enquiries: Actif Group plc (020 7436 3330) Hudson Sandler (020 7710 8908)
Mark Evans, Chief Executive Piers Hooper
Julian Ghinn, Group Finance Director
Chairman's statement
I am pleased to report the Group's final results for the twelve month period to
1 August 2003. This has been an important year for the Group with the
completion of the repositioning and restructuring programme that was started in
2001. We have seen the transition of the business to a primarily UK retail/
wholesale focus with significant improvement in both fashionability and quality
of our ELLE ranges. Given the extent of these changes during the year, I am
pleased that the Group has been able to grow sales and profits, and invest in
new prime retail stores whilst still generating cash and reducing debt. The net
result is a solid platform to improve our performance over the next 12 months.
Results
In the twelve months to 1 August 2003 total Group turnover increased by 2.8% to
#25.6m (2002: #24.9 million). Composite gross margins have increased to 44.9%
from 42.5% as a result of the retail business accounting for a higher proportion
of sales than in the prior period. Costs have increased by 11.6% to #11.0m,
representing 42.8% of sales (2002: 39.4% of sales), following the addition of
new space. Total profit before tax increased by 5.7% to #333,000 (2002:
#315,000) and basic earnings per share were 0.51p (2002: 0.74p). This reduction
in earnings per share stems from the recognition of a deferred tax asset in
respect of timing differences between depreciation and capital allowances
arising in 2002, following the Group's return to profitability.
ELLE Retail
Total retail sales in the period increased by 7.7% to #16.2 million (2002: #15.0
million), which is up by an underlying 3% like-for-like. The growth in retail
sales is partly due to the two new stores that opened in the first half year. We
also saw good growth in our outlet stores and department store concessions as
the improvements made in our prime stores during 2001/2 (an increased focus on
key trading periods, improved fashionability of the product offer and improved
stock availability) were extended to these formats. Retail gross margins are
better than the comparative period at 59.0% (2002: 57.0%), reflecting an
increased proportion of sales through prime stores and a reduced need for
markdowns as a result of improved stock management.
2 new Elle stores opened in the period under review and 2 loss-making stores
were closed. We also opened 3 new department store concessions, but also closed
3 concessions following the closure or refurbishment of the host store. Overall
our retail selling space at the end of the year has decreased by 2,000 square
feet to 47,000 square feet.
ELLE Wholesale
Wholesale revenues from our ELLE collections in the period have decreased by
27.6% to #5.4 million (2002: #7.5 million). Of the #2.1m decline in wholesale
revenues, #1.6m can be attributed to the change in ELLE licence rights, which
were renegotiated in October 2001. Discontinued categories include underwear,
and daywear sales to Continental Europe. In the remaining categories, we have
seen sportswear and swimwear grow by 12% due to increased sales in the UK and
Spain, combined with revived distribution to France offsetting a decline in
Germany. Daywear sales to the UK have stayed broadly level.
From Spring / Summer 2003 we have started to sell nightwear direct, rather than
through a distributor, in response to a declining sales trend. Although sales
continued to fall in Spring / Summer 2003, this trend has reversed from Autumn /
Winter 2003 and at a significantly higher gross margin. Wholesale gross profit
margins have improved to 29.9% (2002: 24.6%) as a result of improved stock
management, and the change to direct selling on nightwear.
Costs
Operating costs have increased by 11.6% to #11.0m (2002: #9.8m), which
represents 42.8% of sales (2002: 39.4%). Retail operating costs increased by
18.3% to #7.1m, equating to 43.8% of retail sales (2002: 40.0%), following the
addition of new retail space, where we have yet to see mature revenues. Total
central overhead, including the cost of restructuring the wholesale business,
was level at #3.8m or 14.8% of sales (2002: #3.8m and 15.3% of sales).
Cash flow
Net cash flow from operating activities has increased by 8.4% to #1.8m (2002:
#1.7m).
Capital expenditure increased to #1.0m (2002: #0.2m) as a result of recommencing
the store opening programme. The capital expenditure in the year also includes
some of the costs of opening new prime stores in Glasgow and Birmingham, which
opened in the first quarter of the 2003/4 financial year.
Total working capital has been reduced by 14.8% to #3.4m (2002: #4.0m). This
improvement in working capital reflects a 1.2% reduction in stock levels to
#3.39m at the year end (2002: #3.43m). Debtors have risen slightly by 3.3% to
#3.8m (2002: #3.7m). Trade and other creditors have increased by 15.8% to #3.9m
(2002: #3.3m).
As a result of the positive cash flow, net debt has been reduced by 39% to #1.1m
(2002: #1.8m), resulting in a gearing ratio at the year end of 27% (2002: 47%).
The comparable figures for 2001 were net debt of #3.1m and gearing of 91%.
Our People
On behalf of the Board I would particularly like to thank the Actif Group team.
Over the year we have progressed with changes to the business, and all our staff
have responded well to these. Our new teams have gelled very quickly and
together have made notable improvements to all areas of the business. They
display a very strong determination and desire to fulfil the potential of the
ELLE brand, and give us confidence in our ability to progress other
opportunities in the future.
Current trading and prospects
Having completed the repositioning and restructuring process, our concentration
is wholly on driving business performance. We have seen a good start to the new
financial year. Over the 10 weeks to 11th October and against a soft first
quarter last year, our retail business has achieved the planned 15% increase in
total sales. There are clear indications that the changes to the product design,
buying and merchandising teams that were implemented at the start of 2003 are
having a positive impact on the fashionability and desirability of our product
offer and we are in good shape for the all important Christmas trading period.
Within wholesale, we have seen overall sales growing in line with plan. Sales of
our Autumn / Winter 2003 collection were 22% up on Autumn / Winter 2002, with
continued growth on sportswear and nightwear offsetting a small decline in
daywear. Our Spring / Summer 2004 wholesale collections are selling well, and
are also on track to achieve plan.
August saw the opening of our first prime ELLE store in Scotland, with our store
in Glasgow and this was followed in September with a store in the new Birmingham
Bullring centre. We are currently fitting out our 16th ELLE store in Gunwharf
Quays, Portsmouth, which will open in October and have committed to one further
new store, which will open in the new Centrale shopping centre development in
Croydon in March 2004.
On this basis I remain optimistic for a positive outturn to our first half
trading performance.
David Brock
Chairman
(15 October 2003)
Group profit and loss account
For the year ended 2 August 2003
Unaudited Audited
Notes 2003 2002
#'000 #'000
Turnover 2 25,575 24,877
Cost of sales (14,102) (14,303)
__________ __________
Gross profit 11,473 10,574
Other operating expenses (net) (11,001) (10,047)
__________ __________
Operating profit 472 527
Interest payable and similar charges (139) (212)
__________ __________
Profit on ordinary activities before taxation 333 315
Taxation - 168
__________ __________
Profit for the financial year 333 483
__________ __________
Earnings per share 3
Basic earnings per share 0.51p 0.74p
__________ __________
Adjusted basic earnings per share 0.59p 1.14p
__________ __________
Diluted earnings per share 0.49p 0.70p
__________ __________
Adjusted diluted earnings per share 0.56p 1.08p
__________ __________
All amounts relate to continuing activities.
Group balance sheet
As at 2 August 2003
Unaudited Audited
Notes 2003 2002
#'000 #'000
Fixed assets
Intangible assets 44 47
Tangible assets 1,888 1,687
__________ __________
1,932 1,734
Current assets
Stocks 3,385 3,426
Debtors 3,810 3,688
Cash at bank and in hand 5 4
__________ __________
7,200 7,118
Creditors: amounts falling due within one year (4,643) (4,854)
__________ __________
Net current assets 2,557 2,264
__________ __________
Total assets less current liabilities 4,489 3,998
Creditors: amounts falling due after more than one (285) (100)
year
__________ __________
Net assets 4,204 3,898
__________ __________
Capital and reserves
Called up share capital 657 657
Share premium account 4,322 4,322
Other reserves 89 89
Profit and loss account (864) (1,170)
_________ _________
Shareholders' funds - all equity 4,204 3,898
__________ __________
Group cash flow statement
For the year ended 2 August 2003
Unaudited Audited
Notes 2003 2002
#'000 #'000
Net cash inflow from operating activities 4 1,818 1,677
Returns on investments and servicing of finance (139) (212)
Taxation - -
Capital expenditure and financial investment (981) (184)
__________ __________
Net cash inflow before financing 698 1,281
Financing (252) (1,029)
__________ __________
Increase in cash in the year 5 446 252
__________ __________
Notes:
1. Basis of preparation
This summary financial information comprises that of Actif Group plc and its'
subsidiaries for the year ended 2 August 2003. The results have been prepared
using accounting policies consistent with those presented in the 2002 financial
statements. The preliminary announcement, which does not constitute statutory
accounts within the meaning of Section 240 of the Companies Act 1985, is an
extract from the Group statutory accounts for the year ended 2 August 2003,
which will be delivered to the Registrar of Companies in due course. The
auditors have not yet reported on those accounts. The results for the year
ended 3 August 2002 have been extracted from the statutory accounts for that
period, which have been delivered to the Registrar of Companies and on which the
auditors gave an unqualified report.
2 Segment information
The turnover and profit before taxation are attributable to the Group's
principal activity, being the design, contracted manufacture, wholesale and
retail of high quality fashion clothing.
a) Analysis of turnover by destination:
Unaudited Audited
2003 2002
#'000 #'000
United Kingdom 24,577 22,504
Overseas - European community 680 1,489
Overseas - Non European community 318 884
__________ __________
25,575 24,877
__________ __________
b) Classes of business
Year ended 2 August 2003 Third party Wholesale Retail Group
sourcing
#'000 #'000 #'000 #'000
Turnover 3,951 5,441 16,184 25,576
Cost of sales (3,658) (3,816) (6,629) (14,103)
__________ __________ __________ __________
Gross profit 293 1,625 9,555 11,473
Common costs __________ __________ __________ (10,951)
__________
Operating profit 522
Exceptional costs (50)
Net interest payable (139)
__________
Profit before taxation 333
__________
The exceptional costs of #50,000 relate to amounts charged for the closure of the Leeds Store.
Year ended 3 August 2002 Third party Wholesale Retail Group
Sourcing
#'000 #'000 #'000 #'000
Turnover 2,335 7,519 15,023 24,877
Cost of sales (2,166) (5,671) (6,466) (14,303)
__________ __________ __________ __________
Gross profit 169 1,848 8,557 10,574
Common costs __________ __________ __________ (9,809)
__________
Operating profit 765
Exceptional costs (257)
Net interest payable (193)
__________
Loss before taxation 315
__________
The exceptional costs of #257,000 relate to amounts owed by The Designer Room Ltd when it went into administration on
12 June 2002.
3 Earnings per ordinary share
The calculations of earnings per share is based on the earnings for the
financial period attributable to equity shareholders and the weighted average
number of ordinary shares as follows:
2003 2002
Weighted average number of shares: Number Number
For basic earnings per share 65,344,571 65,194,434
__________ __________
For diluted earnings per share 68,449,120 68,809,587
__________ __________
Adjusted earnings per share has been calculated after excluding the impact of
exceptional items after taxation and the amortisation of goodwill. This has
been disclosed to provide shareholders with a better indication of the
underlying performance of the Group.
Basic/diluted Adjusted
2003 2002 2003 2002
#'000 #'000 #'000 #'000
Profit for the financial year before 333 315 333 315
taxation
Exceptional costs - - 50 257
Add: taxation - 168 - 168
Amortisation of goodwill - - 3 3
__________ __________ __________ __________
333 483 386 743
__________ __________ __________ __________
4 Reconciliation of operating profit to operating cash flows
Unaudited Audited
2003 2002
#'000 #'000
Operating profit 473 527
Depreciation charges 781 855
Amortisation of goodwill 3 3
Profit on disposal of fixed assets - (2)
Decrease in stock 40 921
(Increase)/decrease in debtors (122) 517
Increase/(decrease) in creditors 671 (1,138)
Foreign exchange loss relating to non-operating activity (28) (6)
__________ __________
Net cash inflow from operating activities 1,818 1,677
__________ __________
5 Reconciliation of net cash flow to net debt
Unaudited Audited
2003 2002
#'000 #'000
Increase in cash in the year 446 252
Cash outflow from decrease in debt and lease financing 852 1,031
__________ __________
Change in net debt resulting from cash flows 1,298 1,283
New secured loans (600) -
__________ __________
Movement in net debt in year 698 1,283
Net debt at 3 August 2002 (1,814) (3,097)
__________ __________
Net debt at 2 August 2003 (1,116) (1,814)
__________ __________
6 Annual General Meeting
The Annual General Meeting will be held at 20 Little Portland Street, London W1W
8AA on 16 December 2003 at 12 noon.
This information is provided by RNS
The company news service from the London Stock Exchange
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