TIDMACR
RNS Number : 5503U
Abbeycrest PLC
26 June 2009
+-------------------------------------+---------------------------------+
| Press release | 26 June 2009 |
+-------------------------------------+---------------------------------+
Abbeycrest plc
("Abbeycrest" or "the Group")
Final Results
Abbeycrest plc (LSE: ACR), a leading international jewellery designer and
manufacturer, today reports its final results for the year ended 28 February
2009.
Financial highlights
+----+--------------------------------------------------------------------+
| - | Revenue of GBP53.1m (2008: GBP61.9m) |
+----+--------------------------------------------------------------------+
| - | Operating loss of GBP7.1m (2008: GBP1.1m loss) after exceptional |
| | operating costs of GBP8.2m (2008: GBP2.8m) reflecting the impact |
| | of restructuring programme |
+----+--------------------------------------------------------------------+
| - | Adjusted operating profit before exceptional items and |
| | depreciation and amortisation of GBP2.0m (2008: GBP2.6m) |
+----+--------------------------------------------------------------------+
| - | Reduced net debt by 31% to GBP8.0m (2008: GBP11.6m) |
+----+--------------------------------------------------------------------+
| - | Group successfully re-financed with its senior secured asset |
| | backed financier (for details of further financing required see |
| | note 1b) |
+----+--------------------------------------------------------------------+
Operational highlights
+----+--------------------------------------------------------------------+
| - | First phase of the restructuring programme successfully completed |
+----+--------------------------------------------------------------------+
| - | Streamlined product offering |
+----+--------------------------------------------------------------------+
| - | Reduced UK distribution to direct supply from the Group's Thailand |
| | facility |
+----+--------------------------------------------------------------------+
| - | Brought further elements of third party manufacturing in-house |
+----+--------------------------------------------------------------------+
| - | Reduced head count from 1,042 employees to 891 |
+----+--------------------------------------------------------------------+
| - | Successfully launched phase two of the restructuring programme to |
| | focus on lower volume, higher margin products |
+----+--------------------------------------------------------------------+
Post year end highlights
+----+--------------------------------------------------------------------+
| - | Strengthened Board with the appointment of Graham Partridge as |
| | Group Finance & Operations Director and Nick Hamley as Group Sales |
| | & Marketing Director |
+----+--------------------------------------------------------------------+
| - | Launched three new higher margin brands Gorgeous Gold , Fluid , |
| | and Osare |
+----+--------------------------------------------------------------------+
| - | Launched Global Edge, Abbeycrest's brand portfolio business, and |
| | strengthened sales team with national and regional managers with |
| | brand experience |
+----+--------------------------------------------------------------------+
| - | Successfully increased banking facilities with Siam Commercial |
| | Bank in Thailand |
+----+--------------------------------------------------------------------+
Commenting on the results Simon Ashton, Executive Chairman of Abbeycrest,
said: "This has been a significant year for Abbeycrest, we have successfully
implemented our restructuring programme and the foundations are now in place to
enable the Group to maximise its potential growth.We have significantly reduced
overheads and shifted the focus onto higher margin products. The Group has
successfully launched three new branded collections, all of which have begun to
generate revenues.
"We believe that the Group is now in a position to enhance the returns from the
mainstream business through the Essentials division and to exploit the demand
for higher value, fashion driven pieces through the Brands division.
"I am confident that the Group is now in a position to take full advantage of
the wide range of opportunities available in the global jewellery market."
- Ends -
For further information:
+--------------------------------------------+--------------------------------+
| Abbeycrest plc | |
+--------------------------------------------+--------------------------------+
| Simon Ashton, Executive Chairman | Tel:+44 (0) 113 3970 865 |
+--------------------------------------------+--------------------------------+
| | www.abbeycrest.co.uk |
+--------------------------------------------+--------------------------------+
+--------------------------------------------+-------------------------------+
| Evolution Securities Limited | |
+--------------------------------------------+-------------------------------+
| Joanne Lake / Peter Steel | Tel: +44 (0)113 243 1619 |
+--------------------------------------------+-------------------------------+
| joanne.lake@evosecurities.com | www.evosecurities.com |
+--------------------------------------------+-------------------------------+
Media enquiries:
+--------------------------------------------+--------------------------------+
| Abchurch Communications | |
+--------------------------------------------+--------------------------------+
| Sarah Hollins / Stephanie Cuthbert / Mark | Tel: +44 (0) 20 7398 7729 |
| Dixon | |
+--------------------------------------------+--------------------------------+
| mark.dixon@abchurch-group.com | www.abchurch-group.com |
+--------------------------------------------+--------------------------------+
Chairman's statement
The year ended 28 February 2009 has been one of significant change for
Abbeycrest. Revenue for the period was GBP53.1m (2008: GBP61.9m) and the Group
had an operating loss of GBP7.1m (2008: GBP1.1m) after exceptional costs of
GBP8.2m (2008: GBP2.8m) reflecting the impact of the restructuring programme. I
am pleased to advise shareholders that against a backdrop of turbulent financial
markets and a world recession, the Group has made tangible progress with the
restructuring programme outlined in our "Annual Report & Financial Statements
2008" and successfully negotiated revised financing facilities with its secured
asset based financier.
I would like to remind shareholders of the background to this restructuring
programme. Traditionally, the Group had pursued a strategy of selling high
volumes of relatively low margin unbranded product, primarily to general and
specialist multiples and mid- market independent retailers. This strategy
manifested itself in an overly complex business with approximately 30,000 stock
lines and a disproportionately high level of overhead. Reported annual revenue
for the Group peaked at GBP98.8m for the year to 28 February 2003, yet this
generated a loss before tax of GBP0.6m and required stocks of GBP41.4m in
October 2002. With the exception of the year ended 28 February 2004, the Group
has made a loss before tax in every subsequent year.
In January 2008, I was appointed to the Board to bring about a reduction of
Abbeycrest's cost base and borrowing levels in the short-term, and orchestrate a
shift in strategy to address its competitive position in the long-term. We have
set about rejuvenating Abbeycrest in two distinct phases.
Phase 1 - 'Straight Edge'
The aim here was, and remains, to focus on fewer more productive customers,
suppliers and product lines through leaner supply-chains, processes and teams,
with a view to reducing costs and working capital.
The key elements were to:
+--------+---------------------------------------------------------------+
| * | reduce the number of product lines based on design, margin |
| | and demand criteria; |
+--------+---------------------------------------------------------------+
| * | wind down UK distribution in favour of direct supply from the |
| | Group's Far East facilities; |
+--------+---------------------------------------------------------------+
| * | transfer third party manufacture to Group manufacturing |
| | resource where possible; and |
+--------+---------------------------------------------------------------+
| * | decrease headcount and overhead in line with the above |
| | measures. |
+--------+---------------------------------------------------------------+
Whilst this phase has necessitated planned exceptional operating and finance
costs of GBP9.1m (2008: GBP2.8m), including a cash element of GBP3.1m, we have:
+--------+---------------------------------------------------------------+
| 1. | reduced reported net debt, being current and non-current |
| | borrowings less cash and cash equivalents, linked principally |
| | to working capital reductions from GBP11.6m at 29 February |
| | 2008 to GBP8.0m at 28 February 2009, with a corresponding |
| | reduction in product lines from 22,159 to 18,919 over the |
| | same period. |
+--------+---------------------------------------------------------------+
| 2. | reduced labour and overhead costs, being employee benefit |
| | expense plus other operating expenses before exceptional |
| | items, within the reported results from GBP11.7m for the year |
| | ended 29 February 2008 to GBP9.1m for the year ended 28 |
| | February 2009, with a corresponding reduction in average |
| | headcount from 1,042 to 891 over the same period. |
+--------+---------------------------------------------------------------+
| 3. | successfully increased banking facilities with SCB in |
| | Thailand by GBP1.3m, in line with the transfer from UK |
| | distribution to direct supply from the Far East to major UK |
| | customers. |
+--------+---------------------------------------------------------------+
This phase is largely complete, but the Directors remain ever vigilant to the
opportunity for further improvement and the dangers of complacency.
Phase 2 - 'Leading Edge'
The aim here is to shift our thinking from 'sell what we make' to 'make what
will sell', and to recognise the trend toward buying 'less but better', with a
view to targeting lower-volume higher-margin segments of the market.
The key elements are to:
+--------+---------------------------------------------------------------+
| * | distil the existing Abbeycrest operations supplying |
| | mainstream global markets into an 'Essentials' division |
| | targeting fewer customers with more focused ranges; |
+--------+---------------------------------------------------------------+
| * | create a 'Brands' division, incorporating Brown & Newirth, to |
| | grow higher-end markets with branded jewellery collections; |
+--------+---------------------------------------------------------------+
| * | drive new product development through a formal process |
| | underpinned by market trends and consumer research; and |
+--------+---------------------------------------------------------------+
| * | introduce new talent and clearer objectives and lines of |
| | communication to make better use of Group resource, |
| | infrastructure and distribution channels. |
+--------+---------------------------------------------------------------+
Whilst this phase was effectively only launched in the autumn of 2008, we have
already:
+--------+---------------------------------------------------------------+
| 1. | launched Gorgeous Gold , Fluid , and Osare collections, |
| | aimed at the growing ABC1 working women's silver, and men's |
| | segments respectively; |
+--------+---------------------------------------------------------------+
| 2. | launched Global Edge(TM), Abbeycrest's brand portfolio |
| | business, and recruited a new national sales manager and four |
| | new regional sales managers, all with brand experience; |
+--------+---------------------------------------------------------------+
| 3. | appointed two new main board directors; Graham Partridge was |
| | appointed as Group Finance and Operations Director on 23 |
| | March 2009 and Nick Hamley as Group Sales and Marketing |
| | Director on |
| | 7 May 2009; and |
+--------+---------------------------------------------------------------+
| 4. | devised a new corporate identity programme to communicate |
| | Abbeycrest's vision both internally and externally. |
+--------+---------------------------------------------------------------+
This phase is still in its nascent stages, but the Directors believe that growth
in the less price-sensitive segments of the market, particularly in the current
economic climate, is a positive way to progress.
The Directors believe that the Group is now in a position to enhance the returns
from its traditional mainstream business through the Essentials division, and to
exploit the demand for higher value fashion driven pieces through the Brands
division.
However, there remain uncertainties with regard to the future funding of the
Group, more details of which can be found in note 1b and management are
currently exploring a number of options available to it.
In the light of the results for this financial year, the Directors are unable to
propose a dividend payment.
The markets in which the Group operates remain challenging. However, I am
confident in your Board's ability to deliver further improvements and that the
Group is well placed to take advantage of the wide range of opportunities
presented to us by the global jewellery market.
Simon Ashton
Chairman
25 June 2009
Business and Financial Review
Group Revenue
The table below analyses revenue for the Group for the periods indicated:
+-------------------------------------------------+--------------+------------+
| | 12 months | 12 months |
| | ended 28 | ended 29 |
| | February | February |
| | 2009 | 2008 |
| | GBP'000 | GBP'000 |
+-------------------------------------------------+--------------+------------+
| Revenue | 53,052 | 61,936 |
+-------------------------------------------------+--------------+------------+
| Analysis of revenues by geographic market | | |
+-------------------------------------------------+--------------+------------+
| UK | 35,272 | 43,863 |
+-------------------------------------------------+--------------+------------+
| Rest of Europe | 6,433 | 5,530 |
+-------------------------------------------------+--------------+------------+
| Rest of the World | 11,347 | 12,543 |
| | ---------- | ---------- |
+-------------------------------------------------+--------------+------------+
| Total | 53,052 | 61,936 |
| | ====== | ====== |
+-------------------------------------------------+--------------+------------+
The reduction in revenue during the periods covered by the table above was as a
result of a fall in demand for the Group's unbranded jewellery in the UK. The
reduction in demand was also exacerbated by increased competition at the
high-volume low-value end of the market, including the growth of costume
jewellery.Sales in the latter months of the year ended 28 February 2009 were
also affected by the strategic withdrawal by Abbeycrest from certain customer
relationships which generated little contribution or were loss-making in nature.
The Group has continued to perform well and maintain its presence in its various
overseas markets throughout the periods covered by the table above.
Operating profit and margins
The table below analyses operating profit and margins for the Group for the per
ods indicated:
+-------------------------------------------------+--------------+------------+
| | 12 months | 12 months |
| | ended 28 | ended 29 |
| | February | February |
| | 2009 | 2008 |
| | GBP'000 | GBP'000 |
+-------------------------------------------------+--------------+------------+
| EBITDA before exceptional items | 2,026 | 2,629 |
+-------------------------------------------------+--------------+------------+
| Less | | |
| | | |
+-------------------------------------------------+--------------+------------+
| Depreciation of tangible fixed assets | 789 | 839 |
+-------------------------------------------------+--------------+------------+
| Amortisation of intangible fixed assets | 162 | 132 |
| | ---------- | ---------- |
+-------------------------------------------------+--------------+------------+
| Operating profit before exceptional items | 1,075 | 1,658 |
+-------------------------------------------------+--------------+------------+
| Exceptional items - operating costs | (8,191) | (2,803) |
| | ---------- | --------- |
+-------------------------------------------------+--------------+------------+
| Operating loss | (7,116) | (1,145) |
| | ====== | ====== |
+-------------------------------------------------+--------------+------------+
| EBITDA margins before exceptional items | 3.8% | 4.2% |
+-------------------------------------------------+--------------+------------+
| Operating margins before exceptional items | 2.0% | 2.7% |
+-------------------------------------------------+--------------+------------+
EBITDA before exceptional items and operating margin reduced during the year
ended 28 February 2009, a period of transition, as the various restructuring
measures were implemented. The effect of the strategic decision to withdraw from
certain UK customers towards the end of that year adversely impacted operating
profit before exceptional items for the year. The Directors believe that the
benefits of the restructuring exercise that took place during the year ended 28
February 2009 will only properly begin to gather momentum during the current
financial year ended 28 February 2010.
The Group's other operations all performed well during the periods covered by
the table above, with an improving trend in operating profits and margins in
both Abbeycrest Thailand and Abbeycrest Hong Kong. Brown and Newirth continues
to contribute significantly to the Group's performance however this business did
experience difficult conditions in the latter months of the year ended 28
February 2009, incurring certain one-off foreign currency losses and GBP0.4m of
gold losses.
Exceptional costs
The table below provides a breakdown of exceptional operating costs incurred
during the periods indicated:
+-------------------------------------------------+--------------+------------+
| | 12 months | 12 months |
| | ended 28 | ended 28 |
| | February | February |
| | 2009 | 2008 |
| | GBP'000 | GBP'000 |
+-------------------------------------------------+--------------+------------+
| Reorganisation costs | - | 819 |
+-------------------------------------------------+--------------+------------+
| Stock reduction programme | 2,386 | 1,934 |
+-------------------------------------------------+--------------+------------+
| Fixed asset impairment | - | 50 |
+-------------------------------------------------+--------------+------------+
| Abbeycrest International restructuring | 5,805 | - |
| | ---------- | ---------- |
+-------------------------------------------------+--------------+------------+
| Total exceptional operating costs | 8,191 | 2,803 |
| | ====== | ====== |
+-------------------------------------------------+--------------+------------+
The Group has incurred substantial exceptional costs during the years ended 29
February 2008 and 28 February 2009 as a result of the restructuring exercise.
Exceptional operating costs incurred during the year ended 28 February 2009
comprise restructuring costs incurred by Abbeycrest International, including
redundancy-related costs and a substantial onerous lease provision arising from
the decision to vacate the Company's premises in Leeds and a stock clearance and
liquidation programme associated with the Group's strategic withdrawal from
relationships with certain of its UK customers as part of the downsizing of the
operation in Leeds.
Exceptional operating costs incurred during the year ended 29 February
2008 comprise reorganisation costs associated with
redundancy, professional and other costs arising from the restructuring of
the Group, provisions against slow-moving stock, in particular, following the
reduction in the
number of stocklines held by Abbeycrest International and write-downs to GBPnil
of fixed assets no longer used by Abbeycrest International.
Loss attributable to equity shareholders
The table below analyses the loss attributable to equity Shareholders for the
periods indicated:
+---------------------------------------------+-------------+------------+
| | 12 months | 12 months |
| | ended 28 | ended 28 |
| | February | February |
| | 2009 | 2008 |
| | GBP'000 | GBP'000 |
+---------------------------------------------+-------------+------------+
| Operating loss | (7,116) | (1,145) |
+---------------------------------------------+-------------+------------+
| Finance income | 6 | 95 |
+---------------------------------------------+-------------+------------+
| Finance costs - exceptional | (956) | - |
+---------------------------------------------+-------------+------------+
| Finance costs - non-exceptional | (2,065) | (2,483) |
| | ---------- | ---------- |
+---------------------------------------------+-------------+------------+
| Loss before taxation | (10,131) | (3,533) |
+---------------------------------------------+-------------+------------+
| Tax on loss | (58) | (452) |
| | ---------- | ---------- |
+---------------------------------------------+-------------+------------+
| Loss for the year attributable to | (10,189) | (3,985) |
| shareholders | ====== | ====== |
+---------------------------------------------+-------------+------------+
The Group continued to incur substantial finance costs on the Group's net debt
which contributed to the pre-tax loss reported in the table above. The
restructuring exercise has resulted in a substantial decrease in the Group's net
debt, with net finance costs excluding exceptional charges incurred during the
year ended 28 February 2009 reduced to GBP2.1m (year ended 29 February 2008:
GBP2.5m).
The Group announced on 17 March 2009 that it had re-banked its UK borrowings
facilities. This resulted in GBP1.0m of arrangement fees and associated legal
costs of an exceptional nature being incurred during the year ended 28 February
2009.
Cashflows
The table below analyses the Group's cashflows for the periods indicated:
+----------------------------------------------+-------------+------------+
| | 12 months | 12 months |
| | ended 28 | ended 29 |
| | February | February |
| | 2009 | 2008 |
| | GBP'000 | GBP'000 |
+----------------------------------------------+-------------+------------+
| Net cash generated from operations | 5,418 | 4,843 |
+----------------------------------------------+-------------+------------+
| Net finance costs | (1,451) | (1,736) |
+----------------------------------------------+-------------+------------+
| Tax paid | (160) | (5) |
+----------------------------------------------+-------------+------------+
| Net capital expenditure and development | (497) | (725) |
| expenditure | | |
+----------------------------------------------+-------------+------------+
| Issue of ordinary shares | 306 | - |
+----------------------------------------------+-------------+------------+
| Net (repayment)/proceeds from bank | (3,223) | 122 |
| borrowings and finance leases | | |
+----------------------------------------------+-------------+------------+
| Leased gold facility movement | (1,241) | (1,877) |
| | ---------- | ---------- |
+----------------------------------------------+-------------+------------+
| Net (decrease)/increase in cash | (848) | 622 |
| | ---------- | ---------- |
+----------------------------------------------+-------------+------------+
| Cash and cash equivalents at beginning of | 730 | 108 |
| year | ---------- | ---------- |
+----------------------------------------------+-------------+------------+
| Cash and cash equivalents at end of year | (118) | 730 |
| | ====== | ====== |
+----------------------------------------------+-------------+------------+
Despite reporting a loss for the year ended 28 February 2009 of GBP10.2m
(year ended 29 February 2008: GBP4.0m), the Group has continued to generate
significant
inflows of cash from operations throughout each period covered by the table abo
e, attributed primarily to the actively managed reduction of working capital
levels (primarily inventories and trade receivables) across the Group.
Exceptional items include GBP6.1m (2008: GBP2.0m) which had no impact on
cashflows. Net finance costs have reduced each year as a result of the managed
reduction in total net debt levels.
Abbeycrest's operations are seasonal in nature, with sales peaking in the run-up
to the Christmas trading season. Accordingly, peak working capital investment
traditionally occurs
between September and November, with the build-up in inventories unwinding and
translating into peak sales during the months immediately before Christmas.
Net investment expenditure
The table below summarises the Group's capital expenditure:
+----------------------------------------------+-------------+------------+
| | 12 months | 12 months |
| | ended 28 | ended 29 |
| | February | February |
| | 2009 | 2008 |
| | GBP'000 | GBP'000 |
+----------------------------------------------+-------------+------------+
| Expenditure on plant and equipment | 441 | 595 |
+----------------------------------------------+-------------+------------+
| Expenditure on computer software | 56 | 130 |
| | ---------- | ---------- |
+----------------------------------------------+-------------+------------+
| Net capital expenditure | 497 | 725 |
| | ====== | ====== |
+----------------------------------------------+-------------+------------+
The majority of capital expenditure incurred during the periods in the table
above was on equipment for the Lamphun facility and also investment in better
technological equipment at B&N's factory in Hatfield. The Lamphun facility now
has the necessary plant and equipment for the Group's current requirements and
capital expenditure levels during the year ended 28 February 2009 reduced as a
result.
Capital resources
The table below analyses the Group's net debt position for the periods
indicated:
+----------------------------------------------+-------------+------------+
| | 12 months | 12 months |
| | ended 28 | ended 29 |
| | February | February |
| | 2009 | 2008 |
| | GBP'000 | GBP'000 |
+----------------------------------------------+-------------+------------+
| Borrowings - current | | |
+----------------------------------------------+-------------+------------+
| Bank overdrafts | 217 | 311 |
+----------------------------------------------+-------------+------------+
| Bank loans | 5,773 | 9,061 |
+----------------------------------------------+-------------+------------+
| Leased gold | 1,704 | 2,945 |
+----------------------------------------------+-------------+------------+
| Obligations under hire purchase contracts | 117 | 161 |
+----------------------------------------------+-------------+------------+
| | | |
+----------------------------------------------+-------------+------------+
| Borrowings - non-current | | |
+----------------------------------------------+-------------+------------+
| Obligations under hire purchase contracts | 251 | 142 |
+----------------------------------------------+-------------+------------+
| Less | | |
+----------------------------------------------+-------------+------------+
| Cash and cash equivalents | (99) | (1,041) |
| | ---------- | ---------- |
+----------------------------------------------+-------------+------------+
| Net debt | 7,963 | 11,579 |
| | ====== | ====== |
+----------------------------------------------+-------------+------------+
Following implementation of the restructuring programme, Abbeycrest has reported
substantial reductions in net debt. The net debt outstanding at 28 February 2009
of GBP8.0m was substantially lower when compared to the GBP11.6m outstanding on
29 February 2008.
In recent years, the Group has been reliant on secured asset backed borrowings
to finance its operations.
On 17 March 2009, Burdale formally agreed to renew the Group's secured asset
backed borrowing facilities for a further two years, with an expiry date of 16
March 2011. The facilities extended to the Group now comprise solely an
asset-based revolving credit facility with a maximum drawdown of GBP8.0m against
available inventory and trade receivables in the UK.
Debt facilities are provided to Abbeycrest Thailand Limited by Siam Commercial
Bank ("SCB"). The facility comprises an overdraft, packing credit, gold
guarantees and letters of credit. Borrowings against the SCB facility at 28
February 2009 stood at GBP3.5m at sterling/Thai baht exchange rate at that date.
The borrowings are secured against the Lamphun facility's land and buildings and
other fixed assets of Abbeycrest Thailand.
The loan owed to Agilo now stands at GBP1.75m, of which a minimum of GBP0.4m is
due for repayment on or before 31 August 2009. Sizeable lump sum finance costs
also accrue monthly, currently at the rate of 1% per month of the balance of the
loan outstanding, but increasing to 1.5% from and including 31 May 2009, then to
3% from and including 31 August 2009 and to 4.5% from and including 31 December
2009. The total of all of the accrued monthly lump sums is repayable in full on
final maturity of the Agilo loan on 28 February 2010, however the lump sums
cease to accrue from the point that the Company has repaid in aggregate at least
GBP750,000 of the principal.
The leased gold balance of GBP1.7m (2008: GBP2.9m) is a loan from the Bank of
Nova Scotia denominated in gold. The loan is secured by a letter of credit from
Burdale and SCB.
The Group also has a small term facility from the former Chairman, Michael
Lever, of GBP250,000.
Consolidated Income Statement
+-----------------------------------------+-------+-------------+-------------+
| | Notes | Year | Year |
| | | To | To 29 |
| | | 28 February | February |
| | | 2009 | 2008 |
| | | GBP'000 | GBP'000 |
+-----------------------------------------+-------+-------------+-------------+
| Revenue | | 53,052 | 61,936 |
+-----------------------------------------+-------+-------------+-------------+
| Operating costs | | 60,168 | 63,081 |
| | | ---------- | ---------- |
+-----------------------------------------+-------+-------------+-------------+
| Operating loss | | (7,116) | (1,145) |
+-----------------------------------------+-------+-------------+-------------+
| Finance income | 3 | 6 | 95 |
+-----------------------------------------+-------+-------------+-------------+
| Finance costs | 3 | (3,021) | (2,483) |
| | | ---------- | ---------- |
+-----------------------------------------+-------+-------------+-------------+
| Loss before taxation | | (10,131) | (3,533) |
+-----------------------------------------+-------+-------------+-------------+
| Analysis of loss before taxation | | | |
+-----------------------------------------+-------+-------------+-------------+
| Loss before taxation and exceptional | | (984) | (730) |
| items | | | |
+-----------------------------------------+-------+-------------+-------------+
| Exceptional items - operating costs | 2 | (8,191) | (2,803) |
+-----------------------------------------+-------+-------------+-------------+
| Exceptional items - finance costs | 2 | (956) | - |
| | | ---------- | ---------- |
+-----------------------------------------+-------+-------------+-------------+
| Loss before taxation | | (10,131) | (3,533) |
+-----------------------------------------+-------+-------------+-------------+
| Tax on loss | | (58) | (452) |
| | | ---------- | ---------- |
+-----------------------------------------+-------+-------------+-------------+
| Loss for the year attributable to | | (10,189) | (3,985) |
| equity shareholders | | ====== | ====== |
+-----------------------------------------+-------+-------------+-------------+
| Loss per share - basic and diluted | 4 | (36.6)p | (15.0)p |
+-----------------------------------------+-------+-------------+-------------+
Consolidated Balance Sheet
+------------------------------------------+-------+------------+------------+
| | Notes | 28 | 29 |
| | | February | February |
| | | 2009 | 2008 |
| | | GBP'000 | GBP'000 |
+------------------------------------------+-------+------------+------------+
| Assets | | | |
+------------------------------------------+-------+------------+------------+
| Non-current assets | | | |
+------------------------------------------+-------+------------+------------+
| Goodwill | | 1,880 | 1,880 |
+------------------------------------------+-------+------------+------------+
| Other intangible assets | | 398 | 137 |
+------------------------------------------+-------+------------+------------+
| Property, plant and equipment | | 4,677 | 4,879 |
+------------------------------------------+-------+------------+------------+
| Deferred tax assets | | 102 | 73 |
| | | ---------- | ---------- |
+------------------------------------------+-------+------------+------------+
| | | 7,057 | 6,969 |
| | | ====== | ====== |
+------------------------------------------+-------+------------+------------+
| Current assets | | | |
+------------------------------------------+-------+------------+------------+
| Inventories | | 9,344 | 15,446 |
+------------------------------------------+-------+------------+------------+
| Trade and other receivables | | 10,703 | 11,037 |
+------------------------------------------+-------+------------+------------+
| Derivative financial instruments | | - | 1 |
+------------------------------------------+-------+------------+------------+
| Cash and cash equivalents | | 99 | 1,041 |
| | | ---------- | ---------- |
+------------------------------------------+-------+------------+------------+
| | | 20,146 | 27,525 |
| | | ====== | ====== |
+------------------------------------------+-------+------------+------------+
| Liabilities | | | |
+------------------------------------------+-------+------------+------------+
| Current liabilities | | | |
+------------------------------------------+-------+------------+------------+
| Borrowings | | (7,811) | (12,478) |
+------------------------------------------+-------+------------+------------+
| Trade and other payables | | (9,010) | (7,071) |
+------------------------------------------+-------+------------+------------+
| Corporation tax | | (197) | (126) |
| | | ---------- | ---------- |
+------------------------------------------+-------+------------+------------+
| | | (17,018) | (19,675) |
| | | ====== | ====== |
+------------------------------------------+-------+------------+------------+
| Net current assets | | 3,128 | 7,850 |
| | | ====== | ====== |
+------------------------------------------+-------+------------+------------+
| Non-current liabilities | | | |
+------------------------------------------+-------+------------+------------+
| Borrowings | | (251) | (142) |
+------------------------------------------+-------+------------+------------+
| Provisions | 5 | (3,500) | - |
| | | ---------- | --------- |
+------------------------------------------+-------+------------+------------+
| | | (3,751) | (142) |
| | | ====== | ====== |
+------------------------------------------+-------+------------+------------+
| Net assets | | 6,434 | 14,677 |
| | | ====== | ====== |
+------------------------------------------+-------+------------+------------+
| Capital and reserves attributable to | | | |
| equity holders of the parent | | | |
+------------------------------------------+-------+------------+------------+
| Share capital | | 2,992 | 2,662 |
+------------------------------------------+-------+------------+------------+
| Share premium account | | 5,665 | 5,619 |
+------------------------------------------+-------+------------+------------+
| Merger reserve | | 199 | 199 |
+------------------------------------------+-------+------------+------------+
| Cumulative translation reserves | | 2,424 | 783 |
+------------------------------------------+-------+------------+------------+
| Hedging reserve | | - | 1 |
+------------------------------------------+-------+------------+------------+
| Retained earnings | | (4,776) | 5,413 |
| | | ---------- | ---------- |
+------------------------------------------+-------+------------+------------+
| Total shareholders' equity | | 6,434 | 14,677 |
| | | ====== | ====== |
+------------------------------------------+-------+------------+------------+
Consolidated Statement of Recognised Income and Expense
+------------------------------------------+------+------------+------------+
| | | Year | Year |
| | | To 28 | To 29 |
| | | February | February |
| | | 2009 | 2008 |
| | | GBP'000 | GBP'000 |
+------------------------------------------+------+------------+------------+
| Movement on fair value of cash flow | | (1) | 5 |
| hedges | | | |
+------------------------------------------+------+------------+------------+
| Exchange movement | | 1,641 | 353 |
| | | ---------- | ---------- |
+------------------------------------------+------+------------+------------+
| Total income and expense recognised in | | 1,640 | 358 |
| equity | | | |
+------------------------------------------+------+------------+------------+
| Loss for the year | | (10,189) | (3,985) |
| | | ---------- | ---------- |
+------------------------------------------+------+------------+------------+
| Total recognised expense relating to the | | (8,549) | (3,627) |
| year | | ====== | ====== |
+------------------------------------------+------+------------+------------+
| Attributable to: | | | |
+------------------------------------------+------+------------+------------+
| Equity holders of the parent | | (8,549) | (3,627) |
| | | ====== | ====== |
+------------------------------------------+------+------------+------------+
Consolidated Cash Flow Statement
+----------------------------------------+-------+--------------+------------+
| | Notes | Year to | Year to |
| | | 28 February | 29 |
| | | 2009 | February |
| | | GBP'000 | 2008 |
| | | | GBP'000 |
+----------------------------------------+-------+--------------+------------+
| Cash flow from operating activities | | | |
+----------------------------------------+-------+--------------+------------+
| Loss after tax | | (10,189) | (3,985) |
+----------------------------------------+-------+--------------+------------+
| Tax charge | | 58 | 452 |
+----------------------------------------+-------+--------------+------------+
| Depreciation and amortisation | | 951 | 972 |
+----------------------------------------+-------+--------------+------------+
| Loss on sale of tangible fixed assets | | 199 | 5 |
+----------------------------------------+-------+--------------+------------+
| Finance costs | 3 | 1,457 | 1,831 |
+----------------------------------------+-------+--------------+------------+
| Finance income | 3 | (6) | (95) |
| | | ---------- | ---------- |
+----------------------------------------+-------+--------------+------------+
| | | (7,530) | (820) |
+----------------------------------------+-------+--------------+------------+
| | | | |
+----------------------------------------+-------+--------------+------------+
| Decrease in inventories | | 6,568 | 3,351 |
+----------------------------------------+-------+--------------+------------+
| Decrease in receivables | | 595 | 2,171 |
+----------------------------------------+-------+--------------+------------+
| Increase in payables | | 5,785 | 141 |
+----------------------------------------+-------+--------------+------------+
| Finance costs paid | | (1,457) | (1,831) |
+----------------------------------------+-------+--------------+------------+
| Taxation paid | | (160) | (5) |
| | | --------- | ---------- |
+----------------------------------------+-------+--------------+------------+
| Net cash inflow from operating | | 3,801 | 3,007 |
| activities | | ====== | ====== |
+----------------------------------------+-------+--------------+------------+
| Cash flow from investing activities | | | |
+----------------------------------------+-------+--------------+------------+
| Purchase of property, plant and | | (441) | (595) |
| equipment | | | |
+----------------------------------------+-------+--------------+------------+
| Finance income received | | 6 | 95 |
+----------------------------------------+-------+--------------+------------+
| Purchase of intangible fixed assets | | (56) | (130) |
| | | ---------- | ---------- |
+----------------------------------------+-------+--------------+------------+
| Net cash used in investing activities | | (491) | (630) |
| | | ====== | ====== |
+----------------------------------------+-------+--------------+------------+
| Cash flow from financing activities | | | |
+----------------------------------------+-------+--------------+------------+
| Issue of ordinary shares | | 306 | - |
+----------------------------------------+-------+--------------+------------+
| Proceeds of borrowings | | 225 | 309 |
+----------------------------------------+-------+--------------+------------+
| Repayment of borrowings | | (3,288) | - |
+----------------------------------------+-------+--------------+------------+
| Leased gold facility movement | | (1,241) | (1,877) |
+----------------------------------------+-------+--------------+------------+
| Capital element of finance lease | | (160) | (187) |
| rental payments | | ---------- | ---------- |
+----------------------------------------+-------+--------------+------------+
| Net cash used in financing activities | | (4,158) | (1,755) |
| | | ====== | ====== |
+----------------------------------------+-------+--------------+------------+
| Net (decrease)/increase in cash | | (848) | 622 |
+----------------------------------------+-------+--------------+------------+
| Cash and cash equivalents at beginning | | 730 | 108 |
| of year | | ---------- | ---------- |
+----------------------------------------+-------+--------------+------------+
| Cash and cash equivalents at end of | | (118) | 730 |
| year | | ====== | ====== |
+----------------------------------------+-------+--------------+------------+
| Cash and cash equivalents comprise: | | | |
+----------------------------------------+-------+--------------+------------+
| Cash and cash equivalents in the | | 99 | 1,041 |
| balance sheet | | | |
+----------------------------------------+-------+--------------+------------+
| Bank overdrafts | | (217) | (311) |
| | | ---------- | ---------- |
+----------------------------------------+-------+--------------+------------+
| | | (118) | 730 |
| | | ====== | ====== |
+----------------------------------------+-------+--------------+------------+
Notes
1. Basis of preparation
a) Directors' Responsibility Statement
This preliminary announcement is derived from the audited financial statements
for the year ended 28 February 2009 which are prepared in accordance with
International Financial Reporting Standards (IFRS and IFRIC interpretations)
issued by the International Standards Board (IASB) as adopted by the EU and with
those parts of the Companies Act 1985 applicable to companies preparing their
accounts under IFRS. Those financial statements include the following
responsibility statement.
Directors' responsibilities
The Directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
Group, for safeguarding the assets of the Company, for taking reasonable steps
for the prevention of detection of fraud and other irregularities and for the
preparation of a Directors' Report and Directors Remuneration Report which
comply with the requirements of the Companies Act 1985.
The Directors are responsible for preparing the annual report and the financial
statements in accordance with the Companies Act 1985. The Directors are also
required to prepare financial statements for the Group in accordance with
International Financial Reporting Standards as adopted by the European Union
(IFRSs) and Article 4 of the IAS Regulation. The Directors have chosen to
prepare financial statements for the Company in accordance with UK Generally
Accepted Accounting Practice.
Group financial statements
International Accounting Standard 1 requires that financial statements present
fairly for each financial year the Group's financial position, financial
performance and cash flows. This requires the faithful representation of the
effects of transactions, other events and conditions in accordance with the
definitions and recognition criteria for assets, liabilities, income and
expenses set out in the International Accounting Standards Board's 'Framework
for the preparation and presentation of financial statements'. In virtually all
circumstances, a fair presentation will be achieved by compliance with all
applicable IFRSs. A fair presentation also requires the Directors to:
+--------+---------------------------------------------------------------+
| * | consistently select and apply appropriate accounting |
| | policies; |
+--------+---------------------------------------------------------------+
| * | present information, including accounting policies, in a |
| | manner that provides relevant, reliable, comparable and |
| | understandable information; and |
+--------+---------------------------------------------------------------+
| * | provide additional disclosures when compliance with the |
| | specific requirements in IFRSs is insufficient to enable |
| | users to understand the impact of particular transactions, |
| | other events and conditions on the entity's financial |
| | position and financial performance. |
+--------+---------------------------------------------------------------+
Parent company financial statements
Company law requires the Directors to prepare financial statements for each
financial year which give a true and fair view of the state of affairs of the
Company and of the profit or loss of the Company for that period. In preparing
these financial statements, the Directors are required to:
+------+------------------------------------------------------------------+
| * | select suitable accounting policies and then apply them |
| | consistently; |
+------+------------------------------------------------------------------+
| * | prepare the financial statements on the going concern basis |
| | unless it is inappropriate to presume that the Company will |
| | continue in business; |
+------+------------------------------------------------------------------+
| * | make judgements and estimates that are reasonable and prudent; |
| | and |
+------+------------------------------------------------------------------+
| * | state whether applicable accounting standards have been |
| | followed, subject to any material departures disclosed and |
| | explained in the financial statements. |
+------+------------------------------------------------------------------+
Financial statements are published on the Group's website in accordance with
legislation in the United Kingdom governing the preparation and dissemination of
financial statements, which may vary from legislation in other jurisdictions.
The maintenance and integrity of the Group's website is the responsibility of
the Directors. The Director's responsibility also extends to the ongoing
integrity of the financial statements contained herein.
The Directors confirm that, to the best of their knowledge and belief, that:
+------+----------------------------------------------------------------+
| * | The financial statements prepared in accordance with IFRS as |
| | adopted by the EU give a true and fair view in accordance with |
| | IFRSs as adopted by the EU of the state of the Group's affairs |
| | as at 28 February 2009 and of its loss for the year then |
| | ended; and |
+------+----------------------------------------------------------------+
| * | The Director's report includes a fair review of the |
| | development and performance of the business and the financial |
| | position of the Group together with a description of the |
| | principal risks and uncertainties that it faces." |
+------+----------------------------------------------------------------+
b) Going concern
As described in the business and financial review the current economic
environment is challenging and the Group has reported an operating loss for the
year. The Directors consider that the outlook presents significant challenges
and whilst the Directors have instituted plans to secure additional funding,
these circumstances create material uncertainties over future trading results
and cash flows.
The Group's UK borrowing facilities, excluding amounts due under hire purchase
agreements, which are primarily asset based against inventory and receivables in
the UK, expired on 28 February 2009 at which point utilisation amounted to
GBP5.4m. The Directors have successfully re-negotiated new facilities with their
senior UK borrowing provider that will expire on 28 February 2011. These
facilities were subject to the company agreeing additional working capital
facilities to cover the funding requirements of the peak trading period.
In addition, the UK junior borrowing provider extended the facility until 28
February 2010. Management expect to repay this amount on the due date but will
require additional financing to meet the repayment schedule.
Management are currently exploring a number of options available to them to
obtain sufficient finance to meet the peak funding requirement and the scheduled
repayment to the UK junior debt provider. Based upon the managed reduction of
debt over the previous facility term, the current balance sheet position of the
Group, detailed Group forecasts, the continued restructuring programme which is
underway, and on-going relationships with the Group's senior borrowing provider,
the Directors are confident that appropriate and sufficient facilities will be
in place before that date. However there are no signed agreements yet in
place.The Group has also applied to HM Revenue & Customs to pay a liability of
GBP1.6m in instalments, however, no formal agreement has yet been reached.
For the above reasons, the Directors have prepared the financial statements on a
going concern basis. Should the Group not obtain financing in excess of GBP1.7m
before September 2009 and should the application to HM Revenue & Customs be
unsuccessful there exists a material uncertainty which may cast significant
doubt on the Group's ability to continue as a going concern. The financial
statements do not contain any adjustments which may be required if the Group
was unable to continue as a going concern.
c) Statutory Accounts and Auditors' Emphasis of Matter
The financial information set out in this announcement does not constitute the
Group's statutory accounts for the years ended 29 February 2008 or 28 February
2009, but is derived from those accounts. Statutory accounts for the year ended
29 February 2008 have been delivered to the Registrar of Companies and those for
28 February 2009 will be delivered following the company's annual general
meeting. The auditors have reported on those accounts; their reports were
unqualified and did not contain statements under the Companies Act 1985, s
237(2) or (3). Their report for 29 February 2008 and 28 February 2009 included
reference to the material uncertainty in respect of the current borrowing
facilities to which the auditors drew attention by way of emphasis of matter
without qualifying their report.
2. Exceptional items
+------------------------------------------+------+------------+------------+
| | | 2009 | 2008 |
| | | GBP'000 | GBP'000 |
+------------------------------------------+------+------------+------------+
| Exceptional items - operating | | | |
+------------------------------------------+------+------------+------------+
| Re-organisation costs | | - | 819 |
+------------------------------------------+------+------------+------------+
| Stock reduction programme | | 2,386 | 1,934 |
+------------------------------------------+------+------------+------------+
| Fixed asset impairment | | - | 50 |
+------------------------------------------+------+------------+------------+
| Group restructuring | | 5,805 | - |
| | | ---------- | ---------- |
+------------------------------------------+------+------------+------------+
| | | 8,191 | 2,803 |
| | | ---------- | ---------- |
+------------------------------------------+------+------------+------------+
| Exceptional items - finance costs | | | |
+------------------------------------------+------+------------+------------+
| Re-banking costs | | 956 | - |
| | | ---------- | ---------- |
+------------------------------------------+------+------------+------------+
| Total exceptional items | | 9,147 | 2,803 |
| | | ====== | ====== |
+------------------------------------------+------+------------+------------+
Operating costs
2009
The stock reduction programme relates to a stock clearance and liquidation
programme associated with the Group's strategic withdrawal from relationships
with certain of its UK customers as part of the downsizing of the operation in
Leeds
Restructuring costs relate to redundancy-related costs and a substantial onerous
lease provision arising from the decision to vacate the Group's premises in
Leeds
2008
The 2008 reorganisation costs relate to redundancy, professional and other costs
arising from the fundamental review of the Group's business and structure.
The stock reduction programme is an exercise to achieve additional future cash
inflow from significant reductions in slow moving or end of line stock. The
major part of these costs consist of provisions against stock at the year end.
The fixed asset impairment relates to fixed assets held by Abbeycrest
International Limited that are no longer in use subsequent to the down-sizing
review.
Finance costs
The re-banking costs in 2009 relate to facility fees and associated legal costs.
3. Financing income and expense
+-------------------------------------------+------------+------------+
| | 2009 | 2008 |
| | GBP'000 | GBP'000 |
+-------------------------------------------+------------+------------+
| Finance costs | | |
+-------------------------------------------+------------+------------+
| - bank borrowings | (1,418) | (1,781) |
+-------------------------------------------+------------+------------+
| - interest payable on leased gold | (39) | (50) |
| facility | | |
+-------------------------------------------+------------+------------+
| - bank charges | (1,564) | (652) |
| | ---------- | ---------- |
+-------------------------------------------+------------+------------+
| Finance costs | (3,021) | (2,483) |
| | ======- | ====== |
+-------------------------------------------+------------+------------+
| Finance income | | |
+-------------------------------------------+------------+------------+
| - bank deposit interest | 6 | 95 |
| | ====== | ====== |
+-------------------------------------------+------------+------------+
4. Loss per share
Both basic and diluted loss per share has been calculated using the weighted
average number of shares in issue during the period of 27,847,203 (2008:
26,617,691).
5. Provisions for liabilities and charges
+-------------------------------------------+-----------+------------+
| | | Onerous |
| | | lease |
+-------------------------------------------+-----------+------------+
| | | GBP'000 |
+-------------------------------------------+-----------+------------+
| At 1 March 2008 | | - |
+-------------------------------------------+-----------+------------+
| Charged to the profit and loss account | | 3,500 |
| | | ---------- |
+-------------------------------------------+-----------+------------+
| At 28 February 2009 | | 3,500 |
| | | ====== |
+-------------------------------------------+-----------+------------+
The Group has a tenancy agreement for property at Wilmington Grove, Leeds which
does not expire until June 2021. As part of the reorganisation of the UK
business, a decision was made to vacate the premises and management consider the
tenancy agreement to be onerous.
Management has made a provision for the onerous lease based on estimates for the
expected future cash inflows and future cash outflows of the property. After
having taken appropriate professional advice the expected future cash inflows
reflect estimates of a suitable period of marketing the property, market
competitive rents together with an estimate of occupancy rates.
Management have assessed the obligations under the tenancy agreement and the
associated unavoidable costs at GBP6.7m. Management are currently investigating
potential sub-lease arrangements and have included an element of income against
the cash outflows. The net cash outflows have been discounted at a rate of 4.5%,
considered to be the markets current assessment of the time value of money.
6. The full text of the 2009 Report and Accounts will be sent to
shareholders and be available on the Company's website on the 30 June 2009 at
www.abbeycrest.co.uk
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR FGGZVNKGGLZM
Abbeycrest (LSE:ACR)
Historical Stock Chart
From Feb 2025 to Mar 2025
Abbeycrest (LSE:ACR)
Historical Stock Chart
From Mar 2024 to Mar 2025
