TIDMACR
RNS Number : 2622B
Abbeycrest PLC
23 October 2009
+-------------------------------------+---------------------------------+
| | 23 October 2009 |
+-------------------------------------+---------------------------------+
Abbeycrest plc
("Abbeycrest" or "the Group")
Interim Results
Abbeycrest plc, (LSE: ACR) a leading international jewellery designer and
manufacturing company, today announces its unaudited interim results for the six
months ended 31 August 2009.
Highlights
+---+--------------------------------------------------------------------+
| - | In line with strategy, revenue down by 24% to GBP17.9m (2008: |
| | GBP23.5m) |
+---+--------------------------------------------------------------------+
| - | Operating profit pre-exceptional items of GBP0.2m (2008: GBPnil m) |
+---+--------------------------------------------------------------------+
| - | Exceptional operating profit of GBP1.5m (2008: exceptional costs |
| | of GBP1.2m) |
+---+--------------------------------------------------------------------+
| - | Post-exceptional items pre-tax profit of GBP1.3m (2008: GBP2.2m |
| | loss) |
+---+--------------------------------------------------------------------+
| - | Reduced inventory by 40% to GBP8.5m (2008: GBP14.2m) |
+---+--------------------------------------------------------------------+
| - | Reduced net debt by 37% to GBP8.1m (2008: GBP12.8m) |
+---+--------------------------------------------------------------------+
| - | Share placement announced in August 2009 successfully completed |
+---+--------------------------------------------------------------------+
Commenting on the interim results, Simon Ashton, Executive Chairman of
Abbeycrest, said: "I am pleased to report that the Group's results are in line
with management expectations. Whilst this is encouraging, the key selling season
for the Group is the period up to Christmas and, as ever, our performance for
the full year will largely be dependent upon retail market conditions during
this time, both in the UK and overseas."
- 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 Interim Statement
Business Review
I am pleased to advise shareholders that the Group achieved a profit after
taxation for the period of GBP1.3m compared to a loss after taxation for the
period to 31 August 2008 of GBP2.3m and a loss after taxation for the year ended
28 February 2009 of GBP10.2m. This result, which was heavily impacted by the
exceptional operating profit for the period explained in further detail
below, has been achieved on the planned, reduced revenue for the period of
GBP17.9m compared to a revenue for the period ended 31 August 2008 of GBP23.5m
and a revenue for the year ended 28 February 2009 of GBP53.1m. The Group made an
operating profit for the period of GBP1.7m compared to an operating loss for the
period to 31 August 2008 of GBP1.1m and an operating loss for the year ended 28
February 2009 of GBP7.1m.
The Group's results include an exceptional operating profit for the period of
GBP1.5m as a result of the agreement with its landlord to grant an option to
break the lease at the Group's former Head Office premises at Wilmington Grove
in Leeds, in September 2011. During the period ended 31 August 2008 the Group
incurred exceptional operating costs of GBP1.2m and for the year ended 28
February 2009 it incurred exceptional operating costs of GBP8.2m as part of the
Straight Edge restructuring programme, originally outlined in the Annual Report
and Financial Statements 2008.
As a consequence and as a result of the Group's strategy to improve operating
margins, the Group made an operating profit, pre exceptional profits, for the
period of GBP0.2m compared to an operating profit, pre exceptional losses, for
the period to 31 August 2008 of GBPnil m and an operating profit, pre
exceptional losses, for the period ended 28 February 2009 of GBP1.1m.
I would like to remind shareholders that the key elements of the Straight Edge
restructuring programme were:
+------------------------+---------------------------------------------------------------+
| i) | achieving an improvement in underlying profitability; |
+------------------------+---------------------------------------------------------------+
| ii) | implementing step change reductions in working capital |
| | and net debt; and |
+------------------------+---------------------------------------------------------------+
| iii) | restructuring the business and the management team. |
+------------------------+---------------------------------------------------------------+
I am therefore happy to inform shareholders of on-going developments on all
points.
As can be determined from the above results the break-even point of the Group
has been significantly lowered. Inventories as a key determinant of working
capital have been reduced by 40% at the end of the period to GBP8.5m compared to
GBP14.2m at 31 August 2008 as a result of tighter management controls along with
the on-going reduction in the number of stock-keeping units held by the Group.
This further reduction in inventory has enabled net debt in the period to fall
to GBP8.1m at the end of the period compared to GBP12.8m at 31 August 2008. In
addition, as previously advised, the Group's board has been strengthened through
the recruitment of 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 8 May 2009.
The Group continues to build for the future through its Leading Edge programme
which was outlined in the Annual Report and Financial Statements 2008.
The key elements of the Leading Edge programme are to:
+-------+------------------------------------------------------------+
| i) | distil the existing Abbeycrest operations supplying |
| | mainstream global markets into an Essentials division, |
| | targeting fewer customers with more focussed ranges; |
+-------+------------------------------------------------------------+
| ii) | create a Brands division, incorporating Brown & |
| | Newirth, to grow higher end market share with branded |
| | jewellery collections; and |
+-------+------------------------------------------------------------+
| iii) | shift the Group's thinking from "sell what we make" to |
| | "make what will sell" underpinned by new product |
| | development driven by market trends and consumer |
| | research. |
+-------+------------------------------------------------------------+
The Group has now invested in Global Edge, its new brands portfolio business,
and has launched three new jewellery collections - Gorgeous Gold , Fluid , and
Osare . It has also recruited a new sales team, all with branded sales
experience.
This phase remains in its early stages; however, the directors believe that
moving the Group's portfolios towards less price-sensitive segments of the
market is a positive direction to take in these uncertain economic times.
In order to support the Group's future development, repay the initial
instalment of GBP0.75m due at the end of September to the Group's junior
creditor Agilo Master Fund Limited and reduce debt still further, the Group
announced on 28 August 2009, its intention to raise GBP1.7m net of costs from a
share placement. With the support of certain existing shareholders and some new
shareholders this was successfully achieved and approved by shareholders on 23
September 2009. The Group's shareholder base has been both broadened and
deepened following significant new investments by certain major institutions
including Gartmore Fund Managers and we would like to welcome all new
shareholders and thank existing shareholders for their support in these
challenging times.
There are a number of potential risks and uncertainties which could have a
material impact on the Group's performance over the remaining six months of the
financial year and could cause actual results to differ materially from expected
historical results. The directors do not consider that there have been any
material adverse changes to the principal risks and uncertainties included in
the publication of the annual report for the year ended 28 February 2009. A
detailed explanation of the risks relevant to the Group is on pages 14 to 17 of
the annual report which is available at www.abbeycrest.co.uk.
The Group's performance during the first half of the year has been in-line with
management expectations. Whilst this is encouraging, the key selling season for
the Group is the period up to Christmas and, as ever, our performance will be
dependent upon retail market conditions during this time, both in the UK and
overseas.
Simon Ashton
Executive Chairman
Condensed Consolidated Interim Income Statement
For six months ended 31August 2009
+---------------------------------------------------------------------------------------------------------+------+--------------+--------------+--------------+
| | Note | Six months | Six months | Year to |
| | | to 31 | to 31 | 28 |
| | | August | August | February |
| | | 2009 | 2008 | 2009 |
| | | Unaudited | Unaudited | Audited |
| | | GBP'000 | | GBP'000 |
| | | | GBP'000 | |
+---------------------------------------------------------------------------------------------------------+------+--------------+--------------+--------------+
| Revenue | 4 | 17,852 | 23,529 | 53,052 |
+---------------------------------------------------------------------------------------------------------+------+--------------+--------------+--------------+
| Operating costs | 2 | (16,143) | (24,676) | (60,168) |
| | | ------------ | ------------ | ------------ |
+---------------------------------------------------------------------------------------------------------+------+--------------+--------------+--------------+
| Operating profit/(loss) | | 1,709 | (1,147) | (7,116) |
+---------------------------------------------------------------------------------------------------------+------+--------------+--------------+--------------+
| | | | | |
+---------------------------------------------------------------------------------------------------------+------+--------------+--------------+--------------+
| Finance income | | - | 6 | 6 |
+---------------------------------------------------------------------------------------------------------+------+--------------+--------------+--------------+
| Finance costs | | (451) | (1,072) | (3,021) |
| | | ----------- | ------------ | ------------ |
+---------------------------------------------------------------------------------------------------------+------+--------------+--------------+--------------+
| | | | | |
+---------------------------------------------------------------------------------------------------------+------+--------------+--------------+--------------+
| Profit/(loss) before | | 1,258 | (2,213) | (10,131) |
| taxation | | ------------ | ------------ | ------------ |
+---------------------------------------------------------------------------------------------------------+------+--------------+--------------+--------------+
| | | | |
+----------------------------------------------------------------------------------------------------------------+--------------+--------------+--------------+
| ----------------------------------------------------------------------------------------------------------------------------------------------------------- |
+-------------------------------------------------------------------------------------------------------------------------------------------------------------+
| Analysis of profit/(loss) before | | | |
| taxation | | | |
+----------------------------------------------------------------------------------------------------------------+--------------+--------------+--------------+
| Loss before taxation and | (241) | (1,023) | (984) |
| exceptional items | | | |
+----------------------------------------------------------------------------------------------------------------+--------------+--------------+--------------+
| Exceptional items - | 2 | 1,499 | (1,190) | (8,191) |
| operating costs | | | | |
+---------------------------------------------------------------------------------------------------------+------+--------------+--------------+--------------+
| Exceptional items - finance | 2 | - | - | (956) |
| costs | | ------------ | ------------ | ------------ |
+---------------------------------------------------------------------------------------------------------+------+--------------+--------------+--------------+
| Profit/(loss) before | | 1,258 | (2,213) | (10,131) |
| taxation | | ======= | ======= | ======= |
+---------------------------------------------------------------------------------------------------------+------+--------------+--------------+--------------+
| ----------------------------------------------------------------------------------------------------------------------------------------------------------- |
+-------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | |
+---------------------------------------------------------------------------------------------------------+------+--------------+--------------+--------------+
| Tax charge | | - | (43) | (58) |
| | | ------------ | ------------ | ------------ |
+---------------------------------------------------------------------------------------------------------+------+--------------+--------------+--------------+
| Profit/(loss) for the period | | 1,258 | (2,256) | (10,189) |
| attributable to equity | | ======= | ======= | ======= |
| holders of the parent | | | | |
+---------------------------------------------------------------------------------------------------------+------+--------------+--------------+--------------+
| | | | | |
+---------------------------------------------------------------------------------------------------------+------+--------------+--------------+--------------+
| Profit/(loss) per share - | 3 | 4.4p | (8.3)p | (36.6)p |
| basic and diluted | | | | |
+---------------------------------------------------------------------------------------------------------+------+--------------+--------------+--------------+
Condensed Consolidated Statement of Comprehensive Income
For six months ended 31August 2009
+--------------------------------+------+--------------+--------------+--------------+
| | | Six | Six | Year to |
| | | months | months | 28 |
| | | to 31 | to 31 | February |
| | | August | August | 2009 |
| | | 2009 | 2008 | Audited |
| | | Unaudited | Unaudited | GBP'000 |
| | | | | |
| | | GBP'000 | GBP'000 | |
+--------------------------------+------+--------------+--------------+--------------+
| Profit/(loss) for the period | | 1,258 | (2,256) | (10,189) |
| | | ------------ | ------------ | ------------ |
+--------------------------------+------+--------------+--------------+--------------+
| Other comprehensive | | | | |
| (costs)/income | | | | |
+--------------------------------+------+--------------+--------------+--------------+
| Cash flow hedges: | | | | |
+--------------------------------+------+--------------+--------------+--------------+
| Losses recognised directly in | | - | (1) | (1) |
| equity | | | | |
+--------------------------------+------+--------------+--------------+--------------+
| Exchange (losses)/gains on | | (770) | 9 | 1,641 |
| retranslation of foreign | | ------------ | ------------ | ------------ |
| operations | | | | |
+--------------------------------+------+--------------+--------------+--------------+
| Other comprehensive | | (770) | 8 | 1,640 |
| (costs)/income | | ------------ | ------------ | ------------ |
+--------------------------------+------+--------------+--------------+--------------+
| Total comprehensive | | 488 | (2,248) | (8,549) |
| income/(costs) for the period | | ======= | ======= | ======= |
| attributable to equity holders | | | | |
| of the parent | | | | |
+--------------------------------+------+--------------+--------------+--------------+
Consolidated Statement of Changes in Equity
For six months ended 31August 2009
+--------------------+--------------+--------------+--------------+--------------+--------------+--------------+--------------+
| | Share | Share | Merger | Foreign | Hedging | Retained | Total |
| | capital | premium | reserve | exchange | reserve | earnings | GBP'000 |
| | GBP'000 | GBP'000 | GBP'000 | reserve | GBP'000 | GBP'000 | |
| | | | | GBP'000 | | | |
+--------------------+--------------+--------------+--------------+--------------+--------------+--------------+--------------+
| Balance at 1 March | 2,922 | 5,665 | 199 | 2,424 | - | (4,776) | 6,434 |
| 2009 | ------------ | ------------ | ------------ | ------------ | ------------ | ------------ | ------------ |
+--------------------+--------------+--------------+--------------+--------------+--------------+--------------+--------------+
| | | | | | | | |
+--------------------+--------------+--------------+--------------+--------------+--------------+--------------+--------------+
| Profit for the | - | - | - | - | - | 1,258 | 1,258 |
| period | | | | | | | |
+--------------------+--------------+--------------+--------------+--------------+--------------+--------------+--------------+
| Cash flow hedges: | | | | | | | |
+--------------------+--------------+--------------+--------------+--------------+--------------+--------------+--------------+
| Exchange losses on | - | - | - | (770) | - | - | (770) |
| retranslation of | ------------ | ------------ | ------------ | ------------ | ------------ | ------------ | ------------ |
| foreign operations | | | | | | | |
+--------------------+--------------+--------------+--------------+--------------+--------------+--------------+--------------+
| Total | - | - | - | (770) | - | 1,258 | 488 |
| comprehensive | ------------ | ------------ | ------------ | ------------ | ------------ | ------------ | ------------ |
| income for the | | | | | | | |
| period | | | | | | | |
+--------------------+--------------+--------------+--------------+--------------+--------------+--------------+--------------+
| Balance at 31 | 2,922 | 5,665 | 199 | 1,654 | - | (3,518) | 6,922 |
| August 2009 | ======= | ======= | ======= | ======= | ======= | ======= | ======= |
| (unaudited) | | | | | | | |
+--------------------+--------------+--------------+--------------+--------------+--------------+--------------+--------------+
+------------------------+--------------+--------------+--------------+--------------+--------------+--------------+--------------+
| | Share | Share | Merger | Foreign | Hedging | Retained | Total |
| | capital | premium | reserve | exchange | reserve | earnings | GBP'000 |
| | GBP'000 | GBP'000 | GBP'000 | reserve | GBP'000 | GBP'000 | |
| | | | | GBP'000 | | | |
+------------------------+--------------+--------------+--------------+--------------+--------------+--------------+--------------+
| Balance at 1 March | 2,662 | 5,619 | 199 | 783 | 1 | 5,413 | 14,677 |
| 2008 | ------------ | ------------ | ------------ | ------------ | ------------ | ------------ | ------------ |
+------------------------+--------------+--------------+--------------+--------------+--------------+--------------+--------------+
| | | | | | | | |
+------------------------+--------------+--------------+--------------+--------------+--------------+--------------+--------------+
| Loss for the period | - | - | - | - | - | (2,256) | (2,256) |
+------------------------+--------------+--------------+--------------+--------------+--------------+--------------+--------------+
| Cash flow hedges: | | | | | | | |
+------------------------+--------------+--------------+--------------+--------------+--------------+--------------+--------------+
| Losses recognised | - | - | - | - | (1) | - | (1) |
| directly in equity | | | | | | | |
+------------------------+--------------+--------------+--------------+--------------+--------------+--------------+--------------+
| Exchange gains on | - | - | - | 9 | - | - | 9 |
| retranslation of | ------------ | ------------ | ------------ | ------------ | ------------ | ------------ | ------------ |
| foreign operations | | | | | | | |
+------------------------+--------------+--------------+--------------+--------------+--------------+--------------+--------------+
| Total comprehensive | - | - | - | 9 | (1) | (2,256) | (2,248) |
| income for the period | ------------ | ------------ | ------------ | ------------ | ------------ | ------------ | ------------ |
+------------------------+--------------+--------------+--------------+--------------+--------------+--------------+--------------+
| Issue of share capital | 260 | 46 | - | - | - | - | 306 |
| | ------------ | ------------ | ------------ | ------------ | ------------ | ------------ | ------------ |
+------------------------+--------------+--------------+--------------+--------------+--------------+--------------+--------------+
| Balance at 31 August | 2,922 | 5,665 | 199 | 792 | - | 3,157 | 12,735 |
| 2008 (unaudited) | ======= | ======= | ======= | ======= | ======= | ======= | ======= |
+------------------------+--------------+--------------+--------------+--------------+--------------+--------------+--------------+
+------------------------+--------------+--------------+--------------+--------------+--------------+--------------+--------------+
| | Share | Share | Merger | Foreign | Hedging | Retained | Total |
| | capital | premium | reserve | exchange | reserve | earnings | GBP'000 |
| | GBP'000 | GBP'000 | GBP'000 | reserve | GBP'000 | GBP'000 | |
| | | | | GBP'000 | | | |
+------------------------+--------------+--------------+--------------+--------------+--------------+--------------+--------------+
| Balance at 1 March | 2,662 | 5,619 | 199 | 783 | 1 | 5,413 | 14,677 |
| 2008 | ------------ | ------------ | ------------ | ------------ | ------------ | ------------ | ------------ |
+------------------------+--------------+--------------+--------------+--------------+--------------+--------------+--------------+
| | | | | | | | |
+------------------------+--------------+--------------+--------------+--------------+--------------+--------------+--------------+
| Loss for the period | - | - | - | - | - | (10,189) | (10,189) |
+------------------------+--------------+--------------+--------------+--------------+--------------+--------------+--------------+
| Cash flow hedges: | | | | | | | |
+------------------------+--------------+--------------+--------------+--------------+--------------+--------------+--------------+
| Losses recognised | - | - | - | - | (1) | - | (1) |
| directly in equity | | | | | | | |
+------------------------+--------------+--------------+--------------+--------------+--------------+--------------+--------------+
| Exchange gains on | - | - | - | 1,641 | - | - | 1,641 |
| retranslation of | ------------ | ------------ | ------------ | ------------ | ------------ | ------------ | ------------ |
| foreign operations | | | | | | | |
+------------------------+--------------+--------------+--------------+--------------+--------------+--------------+--------------+
| Total comprehensive | - | - | - | 1,641 | (1) | (10,189) | (8,549) |
| income for the period | ------------ | ------------ | ------------ | ------------ | ------------ | ------------ | ------------ |
+------------------------+--------------+--------------+--------------+--------------+--------------+--------------+--------------+
| Issue of share capital | 260 | 46 | - | - | - | - | 306 |
| | ------------ | ------------ | ------------ | ------------ | ------------ | ------------ | ------------ |
+------------------------+--------------+--------------+--------------+--------------+--------------+--------------+--------------+
| Balance at 28 February | 2,922 | 5,665 | 199 | 2,424 | - | (4,776) | 6,434 |
| 2009 (unaudited) | ======= | ======= | ======= | ======= | ======= | ======= | ======= |
+------------------------+--------------+--------------+--------------+--------------+--------------+--------------+--------------+
Condensed Consolidated Interim Balance Sheet
As at 31 August 2009
+-----------------------------+--------+--------------+--------------+---------------+
| | Note | 31 August | 31 August | 28 |
| | | 2009 | 2008 | February |
| | | Unaudited | Unaudited | 2009 |
| | | GBP'000 | | Audited |
| | | | GBP'000 | GBP'000 |
+-----------------------------+--------+--------------+--------------+---------------+
| Assets | | | | |
+-----------------------------+--------+--------------+--------------+---------------+
| Non-current assets | | | | |
+-----------------------------+--------+--------------+--------------+---------------+
| Goodwill | | 1,880 | 1,880 | 1,880 |
+-----------------------------+--------+--------------+--------------+---------------+
| Other intangible assets | | 336 | 197 | 398 |
+-----------------------------+--------+--------------+--------------+---------------+
| Property, plant and | | 4,089 | 4,567 | 4,677 |
| equipment | | | | |
+-----------------------------+--------+--------------+--------------+---------------+
| Deferred tax assets | | 102 | 73 | 102 |
| | | ------------ | ------------ | ------------ |
+-----------------------------+--------+--------------+--------------+---------------+
| | | 6,407 | 6,717 | 7,057 |
| | | ======= | ======= | ======= |
+-----------------------------+--------+--------------+--------------+---------------+
| Current assets | | | | |
+-----------------------------+--------+--------------+--------------+---------------+
| Inventories | | 8,519 | 14,192 | 9,344 |
+-----------------------------+--------+--------------+--------------+---------------+
| Trade and other receivables | | 7,222 | 11,587 | 10,703 |
+-----------------------------+--------+--------------+--------------+---------------+
| Cash and cash equivalents | | 233 | 603 | 99 |
| | | ------------ | ------------ | ------------ |
+-----------------------------+--------+--------------+--------------+---------------+
| | | 15,974 | 26,382 | 20,146 |
| | | ======= | ======= | ======= |
+-----------------------------+--------+--------------+--------------+---------------+
| Liabilities | | | | |
+-----------------------------+--------+--------------+--------------+---------------+
| Current liabilities | | | | |
+-----------------------------+--------+--------------+--------------+---------------+
| Borrowings | | (8,193) | (13,214) | (7,811) |
+-----------------------------+--------+--------------+--------------+---------------+
| Trade and other payables | | (5,559) | (6,995) | (9,010) |
+-----------------------------+--------+--------------+--------------+---------------+
| Corporation tax | | - | - | (197) |
| | | ------------ | ------------ | ------------ |
+-----------------------------+--------+--------------+--------------+---------------+
| | | (13,752) | (20,209) | (17,018) |
| | | ======== | ======== | ======= |
+-----------------------------+--------+--------------+--------------+---------------+
| Net current assets | | 2,222 | 6,173 | 3,128 |
+-----------------------------+--------+--------------+--------------+---------------+
| Non-current liabilities | | | | |
+-----------------------------+--------+--------------+--------------+---------------+
| Borrowings | | (143) | (155) | (251) |
+-----------------------------+--------+--------------+--------------+---------------+
| Provisions | 6 | (1,564) | - | (3,500) |
| | | ------------ | ------------ | ------------ |
+-----------------------------+--------+--------------+--------------+---------------+
| | | (1,707) | (155) | (3,751) |
| | | ------------ | ------------ | ------------- |
+-----------------------------+--------+--------------+--------------+---------------+
| Net assets | | 6,922 | 12,735 | 6,434 |
| | | ======= | ======= | ======= |
+-----------------------------+--------+--------------+--------------+---------------+
| Shareholders' equity | | | | |
+-----------------------------+--------+--------------+--------------+---------------+
| Share capital | | 2,922 | 2,922 | 2,922 |
+-----------------------------+--------+--------------+--------------+---------------+
| Share premium account | | 5,665 | 5,665 | 5,665 |
+-----------------------------+--------+--------------+--------------+---------------+
| Merger reserve | | 199 | 199 | 199 |
+-----------------------------+--------+--------------+--------------+---------------+
| Cumulative translation | | 1,654 | 792 | 2,424 |
| reserves | | | | |
+-----------------------------+--------+--------------+--------------+---------------+
| Retained earnings | | (3,518) | 3,157 | (4,776) |
| | | ------------ | ------------ | ------------ |
+-----------------------------+--------+--------------+--------------+---------------+
| Total shareholders' equity | | 6,922 | 12,735 | 6,434 |
| | | ======= | ======= | ======= |
+-----------------------------+--------+--------------+--------------+---------------+
Condensed Consolidated Interim Cash Flow Statement
For six months ended 31August 2009
+---------------------------------------+------+---------------+---------------+---------------+
| | Note | Six months to | Six months | Year to |
| | | 31 August | to | 28 February |
| | | 2009 | 31 August | 2009 |
| | | Unaudited | 2008 | Audited |
| | | GBP'000 | Unaudited | GBP'000 |
| | | | GBP'000 | |
+---------------------------------------+------+---------------+---------------+---------------+
| Cash flow from operating activities | | | | |
+---------------------------------------+------+---------------+---------------+---------------+
| Profit/(loss) after tax | | 1,258 | (2,256) | (10,189) |
+---------------------------------------+------+---------------+---------------+---------------+
| Tax charge | | - | 43 | 58 |
+---------------------------------------+------+---------------+---------------+---------------+
| Depreciation and amortisation | | 436 | 464 | 951 |
+---------------------------------------+------+---------------+---------------+---------------+
| Loss on sale of tangible fixed assets | | - | - | 199 |
+---------------------------------------+------+---------------+---------------+---------------+
| Finance costs | | 451 | 1,072 | 1,457 |
+---------------------------------------+------+---------------+---------------+---------------+
| Finance income | | - | (6) | (6) |
| | | ------------ | ------------ | ------------ |
+---------------------------------------+------+---------------+---------------+---------------+
| | | 2,145 | (683) | (7,530) |
+---------------------------------------+------+---------------+---------------+---------------+
| Decrease in inventories | | 824 | 1,220 | 6,568 |
+---------------------------------------+------+---------------+---------------+---------------+
| Decrease/(increase) in receivables | | 3,253 | (517) | 595 |
+---------------------------------------+------+---------------+---------------+---------------+
| (Decrease)/increase in payables | | (5,718) | (171) | 5,785 |
+---------------------------------------+------+---------------+---------------+---------------+
| Finance costs paid | | (451) | (1,072) | (1,457) |
+---------------------------------------+------+---------------+---------------+---------------+
| Taxation paid | | (66) | - | (160) |
| | | ------------- | ------------- | ------------- |
+---------------------------------------+------+---------------+---------------+---------------+
| Net cash (outflow)/inflow from | | (13) | (1,223) | 3,801 |
| operating activities | | ======= | ======= | ======= |
+---------------------------------------+------+---------------+---------------+---------------+
| Cash flow from investing activities | | | | |
+---------------------------------------+------+---------------+---------------+---------------+
| Purchase of property, plant and | | (84) | (276) | (441) |
| equipment | | | | |
+---------------------------------------+------+---------------+---------------+---------------+
| Finance income received | | - | 6 | 6 |
+---------------------------------------+------+---------------+---------------+---------------+
| Purchase of intangible fixed assets | | (43) | - | (56) |
| | | ----------- | ----------- | ------------ |
+---------------------------------------+------+---------------+---------------+---------------+
| Net cash used in investing activities | | (127) | (270) | (491) |
| | | ======= | ======= | ======= |
+---------------------------------------+------+---------------+---------------+---------------+
| Cash flow from financing activities | | | | |
+---------------------------------------+------+---------------+---------------+---------------+
| Issue of ordinary shares | | - | 306 | 306 |
+---------------------------------------+------+---------------+---------------+---------------+
| Proceeds of borrowings | | 318 | 2,904 | 225 |
+---------------------------------------+------+---------------+---------------+---------------+
| Repayment of borrowings | | - | - | (3,288) |
+---------------------------------------+------+---------------+---------------+---------------+
| Leased gold facility movement | | 88 | (1,996) | (1,241) |
+---------------------------------------+------+---------------+---------------+---------------+
| Capital element of finance lease | | (270) | (88) | (160) |
| rental payments | | | | |
+---------------------------------------+------+---------------+---------------+---------------+
| | | ------------ | ------------ | ------------ |
+---------------------------------------+------+---------------+---------------+---------------+
| Net cash generated from/(used in) | | 136 | 1,126 | (4,158) |
| financing activities | | ======= | ======= | ======= |
+---------------------------------------+------+---------------+---------------+---------------+
| Net decrease in cash | | (4) | (367) | (848) |
+---------------------------------------+------+---------------+---------------+---------------+
| Cash and cash equivalents at | | (118) | 730 | 730 |
| beginning of period | | ------------ | ------------ | ------------ |
+---------------------------------------+------+---------------+---------------+---------------+
| Cash and cash equivalents at end of | | (122) | 363 | (118) |
| period | | ======= | ======= | ======= |
+---------------------------------------+------+---------------+---------------+---------------+
| Cash and bank overdrafts comprise: | | | | |
+---------------------------------------+------+---------------+---------------+---------------+
| Cash and cash equivalents in the | | 233 | 603 | 99 |
| balance sheet | | | | |
+---------------------------------------+------+---------------+---------------+---------------+
| Bank overdrafts | | (355) | (240) | (217) |
| | | ------------ | ------------ | ------------ |
+---------------------------------------+------+---------------+---------------+---------------+
| | | (122) | 363 | (118) |
| | | ======= | ======= | ======= |
+---------------------------------------+------+---------------+---------------+---------------+
Notes to the Condensed Consolidated Interim Financial Statements
For the six months ended 31 August 2009
1 Basis of preparation
1.1 Reporting entity
The condensed consolidated interim financial statements of Abbeycrest plc (the
"Company") as at and for the six months ended 31 August 2009 comprises the
Company and its subsidiaries (the "Group").
These primary statements and selected notes comprise the unaudited condensed
consolidated interim financial results of Abbeycrest plc for the six months
ended 31 August 2009 and 2008.
The financial information for the year ended 28 February 2009 does not comprise
statutory accounts within the meaning of Section 240 of the Companies Act 1985.
Statutory accounts for the year ended 28 February 2009 were approved by the
Board of Directors on 25 June 2009. The auditors' report on those accounts was
unqualified and did not contain a statement under section 237(2)-(3) of the
Companies Act 1985. The auditors' report did include reference to the material
uncertainty in respect of the requirement for the Group to raise additional
financing in excess of GBP1.7m before September 2009 and for the Group to agree
a time to pay application with HM Revenue and Customs to which the auditors drew
attention by way of emphasis without qualifying their report.
The Company announced its intention to raise GBP1.7m net of costs from a share
placement on 28 August 2009 which was successfully achieved and approved by
shareholders on the 23 September 2009. In addition the company has now agreed a
time to pay application with HM Revenue and Customs.
The consolidated financial statements of the Group as at and for the year ended
28 February 2009 are available upon request from the Company's registered office
at 4100 Park Approach, Thorpe Park, Leeds, LS15 8GB or via the Company's website
at www.abbeycrest.co.uk.
1.2 Statement of compliance
The directors, Simon Ashton, Graham Partridge, Nick Hamley and Albert
Cheesebrough, confirm that to the best of their knowledge:
* the condensed set of financial statements has been prepared in accordance with
IAS 34 Interim Financial Reporting as adopted by the EU;
* the interim management report includes a fair review of the information required
by:
a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of
important
events that have occurred during the first six months of the
financial year and their impact on
the condensed set of financial
statements; and a description of the principal risks and
uncertainties
for the remaining six months of the year; and
b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party
transactions that
have taken place in the first six months of the
current financial year and that have materially
affected the financial
position or performance of the entity during that period; and any
changes in the related party transactions described in the last annual report
that could do so.
These condensed consolidated interim financial statements were approved by the
Board of Directors on 22 October 2009.
These condensed consolidated interim financial statements have been neither
audited nor reviewed pursuant to guidance issued by the Auditing Practices
Board.
1.3 Changes in accounting policies
The interim financial statements have been prepared under the same accounting
policies as last year except that in the current financial year, the Group has
adopted IAS 1, "Presentation of Financial Statements" (Revised), IFRS 8,
"Operating segments" and the amendments to IFRS 2, "Share-based payments:
vesting conditions and cancellations".
IAS 1 Presentation of Financial Statements (Revised) includes the requirement to
present a Statement of Changes in Equity as a primary statement and introduces
the possibility of either a single Statement of Comprehensive Income (combining
the Income Statement and a Statement of Comprehensive Income) or to retain the
Income Statement with a supplementary Statement of Comprehensive Income. The
second option has been adopted by Abbeycrest plc. As this standard is concerned
with presentation only it does not have any impact on the results or net assets
of the Group.
IFRS 8, Operating Segments requires operating segments to be identified on the
basis of internal reports about components of the Group that are regularly
reviewed by the Chief Operating Decision Maker ("CODM"). By contrast IAS 14,
"Segmental Reporting" required business and geographical segments to be
identified on a risks and rewards approach. The business segmental reporting
bases used by the Company in previous years are those which are reported to the
CODM, so the changes to the segmental reporting for 2009 are in respect of the
additional disclosure only. Comparatives have been restated.
Amendment to IFRS 2, "Share-based payments: vesting conditions and
cancellations" results in an immediate acceleration of the IFRS 2 expense that
would otherwise have been recognised in future periods should an employee decide
to stop contributing to the savings plan. Management has concluded that so far
there has been no impact on the results of the Group as a result of this
amendment.
1.4 Estimates
The preparation of the interim financial statements requires management to make
judgements, estimates and assumptions that affect the application of accounting
policies and the reported amounts of assets and liabilities, income and expense.
Actual results may differ from these estimates.
In preparing these condensed consolidated interim financial statements, the
significant judgements made by management in applying the Group's accounting
policies and the key sources of the uncertainty of estimations were the same
as those that applied to the consolidated financial statements as at and for the
year ended 28 February 2009.
2 Exceptional items
Operating costs include the following exceptional income and costs:
+-----------------------------+----+--------------+--------------+--------------+
| | | Six months | Six | Year to |
| | | to | months to | 28 |
| | | 31 August | 31 August | February |
| | | 2009 | 2008 | 2009 |
| | | Unaudited | Unaudited | Audited |
| | | GBP'000 | GBP'000 | GBP'000 |
+-----------------------------+----+--------------+--------------+--------------+
| Exceptional items - | | | | |
| operating costs | | | | |
+-----------------------------+----+--------------+--------------+--------------+
| Re-organisation costs | | - | 929 | - |
+-----------------------------+----+--------------+--------------+--------------+
| Stock reduction programme | | - | 261 | 2,386 |
+-----------------------------+----+--------------+--------------+--------------+
| Group restructuring | | (1,499) | - | 5,805 |
+-----------------------------+----+--------------+--------------+--------------+
| | | ------------ | ------------ | ------------ |
+-----------------------------+----+--------------+--------------+--------------+
| | | (1,499) | 1,190 | 8,191 |
| | | ------------ | ------------ | ------------ |
+-----------------------------+----+--------------+--------------+--------------+
| Exceptional items - finance | | | | |
| costs | | | | |
+-----------------------------+----+--------------+--------------+--------------+
| Re-financing costs | | - | - | 956 |
| | | ------------ | ------------ | ------------ |
+-----------------------------+----+--------------+--------------+--------------+
| Total exceptional | | (1,499) | 1,190 | 9,147 |
| (income)/costs | | ======= | ======= | ======= |
+-----------------------------+----+--------------+--------------+--------------+
The re-organisation costs relate to redundancy, professional and other costs
arising from the fundamental review of the Group's business and structure.
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 operations in
Leeds.
The Group restructuring costs for the year ended 28 February 2009 relate to
redundancy related costs and a substantial onerous lease provision arising from
the decision to vacate the Group's premises in Leeds. During the six months
ended 31 August 2009 management negotiated a break clause in the onerous lease
which has resulted in an exceptional profit for the period (note 6).
3 Profit/(loss) per share
Basic profit/(loss) per share and diluted earnings per share have been
calculated using the weighted average number of shares in issue during the
period of 28,623,641 (2008: 27,083,424).
4 Segmental analysis
The Group operates in the reportable segments shown below. The following shows
the revenue and results by reportable segment in the six months ended 31 August
2009:
+-----------------------------+-------+--------------+--------------+--------------+
| | | Essentials | Brands | Total |
| | | division | division | Unaudited |
| | | Unaudited | Unaudited | GBP'000 |
| | | GBP'000 | GBP'000 | |
+-----------------------------+-------+--------------+--------------+--------------+
| Revenue | | 10,831 | 7,021 | 17,852 |
| | | ------------ | ------------ | ------------ |
+-----------------------------+-------+--------------+--------------+--------------+
| Segment result | | 359 | 417 | 776 |
| | | ------------ | ------------ | ------------ |
+-----------------------------+-------+--------------+--------------+--------------+
| | | | | |
+-----------------------------+-------+--------------+--------------+--------------+
| Unallocated income | | | | 933 |
+-----------------------------+-------+--------------+--------------+--------------+
| Finance costs | | | | (451) |
| | | | | ------------ |
+-----------------------------+-------+--------------+--------------+--------------+
| Profit before income tax | | | | 1,258 |
+-----------------------------+-------+--------------+--------------+--------------+
| Tax charge | | | | - |
| | | | | ------------ |
+-----------------------------+-------+--------------+--------------+--------------+
| Profit for the period | | | | 1,258 |
| | | | | ======= |
+-----------------------------+-------+--------------+--------------+--------------+
Unallocated income relates to central costs and income.
Segmental assets as at 31 August 2009 were as follows:
+------------------+-----+------------+-----------+-------------+----------------+-----------+
| | | Essentials | Brands | Unallocated | Reconciliation | Total |
| | | division | division | Unaudited | GBP'000 | Unaudited |
| | | Unaudited | Unaudited | GBP'000 | | GBP'000 |
| | | GBP'000 | GBP'000 | | | |
+------------------+-----+------------+-----------+-------------+----------------+-----------+
| Total assets | | 30,319 | 16,335 | 20,975 | (45,248) | 22,381 |
| | | ======= | ======= | ======= | ======= | ======= |
+------------------+-----+------------+-----------+-------------+----------------+-----------+
The reconciling items relate to the elimination of intercompany balances and
fixed asset investments on consolidation.
The following shows the revenues and results by reportable segment in the six
months ended 31 August 2008:
+-----------------------------+-------+--------------+--------------+--------------+
| | | Essentials | Brands | Total |
| | | division | division | Unaudited |
| | | Unaudited | Unaudited | GBP'000 |
| | | GBP'000 | GBP'000 | |
+-----------------------------+-------+--------------+--------------+--------------+
| Revenue | | 16,238 | 7,291 | 23,529 |
| | | ------------ | ------------ | ------------ |
+-----------------------------+-------+--------------+--------------+--------------+
| Segment result | | (1,047) | 874 | (173) |
| | | ------------ | ------------ | ------------ |
+-----------------------------+-------+--------------+--------------+--------------+
| | | | | |
+-----------------------------+-------+--------------+--------------+--------------+
| Unallocated costs | | | | (974) |
+-----------------------------+-------+--------------+--------------+--------------+
| Finance income | | | | 6 |
+-----------------------------+-------+--------------+--------------+--------------+
| Finance costs | | | | (1,072) |
| | | | | ------------ |
| | | | | |
+-----------------------------+-------+--------------+--------------+--------------+
| Loss before income tax | | | | (2,213) |
+-----------------------------+-------+--------------+--------------+--------------+
| Tax charge | | | | (43) |
| | | | | ------------ |
+-----------------------------+-------+--------------+--------------+--------------+
| Loss for the period | | | | (2,256) |
| | | | | ======= |
+-----------------------------+-------+--------------+--------------+--------------+
Unallocated costs relate to central costs.
Segmental assets as at 31 August 2008 were as follows:
+---------------+----+------------+-----------+-------------+----------------+-----------+
| | | Essentials | Brands | Unallocated | Reconciliation | Total |
| | | division | division | Unaudited | GBP'000 | Unaudited |
| | | Unaudited | Unaudited | GBP'000 | | GBP'000 |
| | | GBP'000 | GBP'000 | | | |
+---------------+----+------------+-----------+-------------+----------------+-----------+
| Total assets | | 40,942 | 14,968 | 21,847 | (44,658) | 33,099 |
| | | ======= | ======= | ======= | ======= | ======= |
+---------------+----+------------+-----------+-------------+----------------+-----------+
The reconciling items relate to the elimination of intercompany balances and
fixed asset investments on consolidation.
The following shows the revenues and results by reportable segment in the year
ended 28 February 2009:
+-----------------------------+-------+--------------+--------------+--------------+
| | | Essentials | Brands | Total |
| | | division | division | Unaudited |
| | | Unaudited | Unaudited | GBP'000 |
| | | GBP'000 | GBP'000 | |
+-----------------------------+-------+--------------+--------------+--------------+
| Revenue | | 41,510 | 11,542 | 53,052 |
| | | ------------ | ------------ | ------------ |
+-----------------------------+-------+--------------+--------------+--------------+
| Segment result | | (2,452) | 388 | (2,064) |
| | | ------------ | ------------ | ------------ |
+-----------------------------+-------+--------------+--------------+--------------+
| | | | | |
+-----------------------------+-------+--------------+--------------+--------------+
| Unallocated costs | | | | (5,052) |
+-----------------------------+-------+--------------+--------------+--------------+
| Finance income | | | | 6 |
+-----------------------------+-------+--------------+--------------+--------------+
| Finance costs | | | | (3,021) |
| | | | | ------------ |
+-----------------------------+-------+--------------+--------------+--------------+
| Loss before income tax | | | | (10,131) |
+-----------------------------+-------+--------------+--------------+--------------+
| Tax charge | | | | (58) |
| | | | | ------------ |
+-----------------------------+-------+--------------+--------------+--------------+
| Loss for the period | | | | (10,189) |
| | | | | ======= |
+-----------------------------+-------+--------------+--------------+--------------+
Unallocated costs relate to central costs.
Segmental assets as at 28 February 2009 were as follows:
+------------------+-----+------------+-----------+-------------+----------------+-----------+
| | | Essentials | Brands | Unallocated | Reconciliation | Total |
| | | division | division | Unaudited | GBP'000 | Unaudited |
| | | Unaudited | Unaudited | GBP'000 | | GBP'000 |
| | | GBP'000 | GBP'000 | | | |
+------------------+-----+------------+-----------+-------------+----------------+-----------+
| Total assets | | 36,599 | 13,112 | 24,254 | (46,762) | 27,203 |
| | | ======= | ======= | ======= | ======= | ======= |
+------------------+-----+------------+-----------+-------------+----------------+-----------+
The reconciling items relate to the elimination of intercompany balances and
fixed asset investments on consolidation.
5 Property plant and equipment
Acquisitions and disposals
During the six months ended 31 August 2009 the Group purchased property, plant
and equipment with a cost of GBP84,000 (six months to 31 August 2008:
GBP133,000).
Capital commitments
At 31 August 2009 the Group had no capital commitments (2008: GBPnil).
6 Provisions for liabilities and charges
+----------------------------+----+--------------+--------------+--------------+
| | | Six months | Six | Year to |
| | | to | months to | 28 |
| | | 31 August | 31 August | February |
| | | 2009 | 2008 | 2009 |
| | | Unaudited | Unaudited | Audited |
| | | GBP'000 | | GBP'000 |
| | | | GBP'000 | |
+----------------------------+----+--------------+--------------+--------------+
| Onerous lease provision | | | | |
+----------------------------+----+--------------+--------------+--------------+
| At 1 March 2009 | | 3,500 | - | - |
+----------------------------+----+--------------+--------------+--------------+
| (Credited)/charged to the | | (1,936) | - | 3,500 |
| income statement | | | | |
+----------------------------+----+--------------+--------------+--------------+
| | | ------------ | ------------ | ------------ |
+----------------------------+----+--------------+--------------+--------------+
| At 31 August 2009 | | 1,564 | - | 3,500 |
| | | ======= | ======= | ======= |
+----------------------------+----+--------------+--------------+--------------+
The Group had a tenancy agreement for property at Wilmington Grove, Leeds which
did not expire until June 2021. As part of the reorganisation of the UK business
during the year ended 28 February 2009, a decision was made to vacate the
premises and management considered the tenancy agreement to be onerous.
Management have negotiated a break clause for September 2011 and have reassessed
the onerous lease provision.
Management have assessed the obligations under the tenancy agreement and
associated unavoidable costs of GBP1.7m. Management have not included any income
against the cash outflows due to the sub-lease potential being assessed as low.
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.
7 Seasonality of operations
The Group is subject to seasonal fluctuations, particularly the effect of
Christmas. As a consequence the first half year typically results in lower
revenues than the second half year.
The Group attempts to minimise the seasonal impact through the management of
inventories to meet demand.
8 Post balance sheet events
The Group announced its intention to raise GBP1.7m net of costs from a share
placement on 28 August 2009. With the support of certain existing shareholders
and the support of new shareholders this was successfully achieved and approved
by shareholders on 23 September 2009.
-ENDS-
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR EAKEAAAANFFE
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