TIDMACR
RNS Number : 5568O
Abbeycrest PLC
30 June 2010
Final Results 2010
Abbeycrest plc ("Abbeycrest" or the "Group"), a leading international jewellery
designer, manufacturer and distributor, announces its final results for the year
ended 28 February 2010.
Financial Highlights:
· Revenue, after strategic withdrawal from lower margin activities, of
GBP39.7m (2009: GBP53.1m)
· Return to profitability:
· Operating profit, including an exceptional gain of GBP1.5m (2009:
exceptional cost GBP8.2m), of GBP2.4m (2009: loss of GBP7.1m)
· Pre-tax profit, before exceptionals, of GBP55,000 (2009: loss of
GBP1.0m)
· Pre-tax profit, after exceptionals, of GBP1.6m (2009: loss of GBP10.1m)
· Basic profit per share of 3.2p (2009: loss per share 36.6p)
· Fundraising in September 2009, primarily to reduce debt, raised
GBP1.85m (net of share placement expenses)
· Agilo GBP1.75m and HMRC GBP1.6m (gross) repaid in full
· Year-end net debt reduced by 30% to GBP5.6m (2009: GBP8.0m)
· Increasing gold price creating pressure on working capital funding
Operational Highlights:
· Essentials division - operating margins strengthened to 5.7% (2009:
4.2%)
· Brands division - still in early stages of brand development; revenue
increased by 8%
· Board strengthened, post year end, with appointment of new
Non-executive Directors
Simon Ashton, Executive Chairman, said: "Market conditions remain challenging
and whilst we are pleased with the progress of the turnaround, there is still a
great deal to do within the business. Our 'Essentials' and 'Brands' divisions
are at very different stages of development but our main focus now with both is
to generate top-line growth. Managing our exposure to any further increases in
the gold price, given the clear impact of this variable on working capital
funding, also remains key. As we approach the key Christmas trading period, we
maintain our belief that the Group is now much better positioned to capitalise
on the opportunities in the global jewellery market."
For further information, please contact:
+------------------------------------+------------------------------------+
| Abbeycrest plc | Tel: 0113 397 0864 |
| Simon Ashton, Executive Chairman | www.abbeycrest.co.uk |
| | |
+------------------------------------+------------------------------------+
| Evolution Securities Limited | Tel:0113 243 1619 |
| Joanne Lake/Peter Steel | www.evosecurities.com |
| | |
+------------------------------------+------------------------------------+
| Rawlings Financial PR Limited | Tel: 01653 618 016 |
| Catriona Valentine/Keeley Clarke | www.rawlingsfinancial.co.uk |
| | |
+------------------------------------+------------------------------------+
Chairman's Statement
The year to 28 February 2010 was one of consolidation for Abbeycrest, concluding
the 'Straight Edge' and embedding the 'Leading Edge' initiatives outlined in
last year's Chairman's Statement. We entered the year facing a continuing
downturn in our markets and requiring the support of our stakeholders to
implement a range of initiatives. Notwithstanding the challenges presented by a
rapidly rising gold price, discussed further below, we have successfully
realigned our business, focused on our Essentials and Brands divisions, raised
equity to reduce gearing and strengthened our Board with the appointment of two
additional Non-executive Directors.
Results
As anticipated, Group revenue absorbed the impact of the first full year of our
withdrawal from lower margin, working capital intensive business streams,
reducing to GBP39.7m (2009: GBP53.1m). Pre-tax profit before exceptional items,
however, improved from a loss of GBP1.0m to a profit of GBP55,000. Pre-tax
profit after exceptional items, which included a GBP1.5m gain arising from the
grant of an option to break the lease over the Group's former head office in
September 2011, was GBP1.6m (2009: loss GBP10.1m).
In September 2009, the Group completed an equity fundraising, raising proceeds
of approximately GBP1.85m (net of share placement expenses). The proceeds were
used primarily to reduce net debt, which, by the year-end, stood at GBP5.6m
(2009: GBP8.0m). No dividends are payable.
Strategy
The Business and Financial Review section details the current position of the
Group and the progress we have made. As well as the positive trends in
profitability and net debt, I would like to highlight the following:
· Our Essentials division, which serves volume markets with mainstream
precious metal jewellery products, has been transformed into a leaner, more
focused operation. The division delivered an operating profit before exceptional
items of GBP1.6m (2009: GBP1.7m) on reduced turnover of GBP27.2m (2009:
GBP41.5m). The decrease in turnover reflects our decision to withdraw from
elements of our legacy activities referred to above, particularly in the UK.
This withdrawal resulted in the division's operating margins strengthening to
5.7% for the year (2009: 4.2%). In Europe and the Rest of the World, we
generated revenue increases of 5% and 21% respectively over the previous year.
Our focus during the current year is to continue this growth in overseas
markets, whilst consolidating our position in the UK marketplace.
· Our Brands division, which operates in the design-led, higher-end
jewellery sector with branded jewellery collections, delivered an 8% increase in
revenue to GBP12.5m (2009: GBP11.5m). Operating profit, before exceptional
items, remained broadly static at GBP0.41m (2009: GBP0.42m), reflecting the lag
between investment and return during the early stages of brand creation.
Building brands on a limited marketing budget is challenging, however, this
remains a key tenet of our strategy. We are exploring resourceful, imaginative
and cost effective ways in which to develop and market new branded collections
through our Global Edge and Brown & Newirth operations.
Notwithstanding the progress we have made, our business remains exposed to
fluctuations in the gold price. At 28 February 2010, the average price stood at
GBP636 per ounce (2009: GBP507 per ounce), an increase of 25% over the year. At
17 June 2010, the price had increased by a further 31% since the year-end to
GBP835 per ounce. These increases have had a clear impact on consumer demand,
with hallmarking of gold in the UK falling by over 30% during the year under
review. As we have adjusted some of our product design to reflect the movement
in demand towards silver and mixed metals, this has reduced our monetary selling
prices and margins on these items.
The increase in the gold price also added to the working capital requirements of
the Group, creating funding pressures. We continue to work closely with our
customers and bankers to address this matter.
As detailed in note 1b to the financial statements, the Directors anticipate
that the Group will breach its profit covenants with Burdale Financial Limited
("Burdale") at 30 June 2010 and has not yet agreed covenants for the full 12
months from the date of this statement. Management is in discussions with
Burdale to re-set the covenants up to 30 June 2011 and is confident of a
successful outcome. Based on current forecasts, the Group will also be required
either to extend its current borrowing facilities or reduce its working capital
funding requirement by GBP0.6m in September 2010. The Directors are currently
exploring a number of viable options at their disposal to achieve this. Further
information regarding these uncertainties are disclosed in notes 1b and 1c.
Fundraising
In September 2009, the Group raised GBP2.25m, approximately GBP1.85m net of
expenses, through a placing of 40,300,000 new ordinary shares with existing and
new investors at a price of 5 pence per share and 4,625,000 ordinary shares
which were issued in settlement of (i) a GBP100,000 fee payable to Moorgarth in
relation to deeds of variation of the Group's leases of its former head office
site at Wilmington Grove and (ii) GBP131,250 of lump sum loan interest charges
due to Agilo Master Fund ("Agilo"). The net proceeds of the placing have been
used primarily to reduce the Group's borrowings.
Repayment of loans
On 26 February 2010, Abbeycrest paid Agilo GBP950,000 in full and final
settlement of all amounts due, releasing all related security over the Group's
assets. All amounts owing to HMRC, under the "time to pay arrangement"
disclosed in last year's annual report, were paid in full during the year.
Grant of share options
In March 2010, the Board announced proposals to implement a share option scheme
for Directors and senior management, which was subsequently approved by
shareholders at a General Meeting of the Company held on 14 April 2010. Details
of the initial grants awarded to the Directors following the General Meeting are
set out in the Remuneration Committee Report.
Board Changes
Since the year end, the Board has been strengthened by the appointment of two
new Non-executive Directors, Sarah Carpin and Kathryn Davenport. Sarah, aged 47,
is a specialist jewellery and watch consultant with international experience in
magazine publishing, market research and trend forecasting. Kathryn, aged 40,
is a qualified solicitor and Company Secretary with significant experience in
company administration, corporate governance and UK Listing Authority
compliance. Their combined experience expands the skillset of the Board and
will be greatly valued as the Company moves out of the turnaround stage and into
growth.
Graham Partridge, Group Finance and Operations Director, who tendered his
resignation in May 2010, is currently working his six month notice period. The
Board has identified a suitable candidate for the role and will make a further
announcement at the appropriate time.
Outlook
Market conditions remain challenging and whilst we are pleased with the progress
of the turnaround, there is still a great deal to do within the business. Our
'Essentials' and 'Brands' divisions are at very different stages of development
but our main focus now with both is to generate top-line growth. Managing our
exposure to any further increases in the gold price, given the clear impact of
this variable on working capital funding, also remains key. As we approach the
key Christmas trading period, we maintain our belief that the Group is now much
better positioned to capitalise on the opportunities in the global jewellery
market.
Simon Ashton
Chairman
29 June 2010
Business and Financial Review
Group Revenue
The table below analyses revenue for the Group by geographical market and
operating segment for the periods indicated:
+---------------------------------------------+--------------+------------+
| | 12 months | 12 |
| | ended 28 | months |
| | February | ended 28 |
| | 2010 | February |
| | GBP'000 | 2009 |
| | | GBP'000 |
+---------------------------------------------+--------------+------------+
| Revenue (all continuing operations) | 39,663 | 53,052 |
+---------------------------------------------+--------------+------------+
| Analysis of revenues by geographic market | | |
+---------------------------------------------+--------------+------------+
| UK | 19,178 | 35,272 |
+---------------------------------------------+--------------+------------+
| Rest of Europe | 6,782 | 6,433 |
+---------------------------------------------+--------------+------------+
| Rest of the World | 13,703 | 11,347 |
| | ---------- | ---------- |
+---------------------------------------------+--------------+------------+
| Total | 39,663 | 53,052 |
+---------------------------------------------+--------------+------------+
| | ====== | ====== |
+---------------------------------------------+--------------+------------+
| Analysis by operating segment | | |
+---------------------------------------------+--------------+------------+
| Brands | 12,478 | 11,542 |
+---------------------------------------------+--------------+------------+
| Essentials | 27,185 | 41,510 |
| | --------- | --------- |
+---------------------------------------------+--------------+------------+
| Total | 39,663 | 53,052 |
+---------------------------------------------+--------------+------------+
| | ====== | ====== |
+---------------------------------------------+--------------+------------+
The reduction in revenue in the period ending 28 February 2010 of 25% in overall
terms was the result of the Group's Straight Edge programme and its plan to
withdraw from certain UK based, low margin high volume business. Competition
was also strong in all the Group's global markets as a result of the worldwide
economic downturn which, coupled with increasing gold and precious metal prices,
is affecting demand for the Group's principal products.
However, despite this background, the Group was able to grow its revenue in the
Rest of Europe by 5% and in the Rest of the World by 21%, particularly in the
Australian market.
The Brands division was able to increase revenue by 8% in the period ending 28
February 2010, reflecting growth in the existing brands Company and the launch
of the new Brands businesses.
Operating profit and margins
The table below analyses operating profit and margins for the Group and by
operating segment for the periods indicated:
+--------------------+------------+------------+------------+------------+------------+------------+
| | Group | Brands | Essentials | Group | Brands | Essentials |
| | 12 | 12 | 12 months | 12 | 12 | 12 months |
| | months | months | ended | months | months | ended |
| | ended | ended | 28 | ended | ended | 28 |
| | 28 | 28 | February | 28 | 28 | February |
| | February | February | 2010 | February | February | 2009 |
| | 2010 | 2010 | GBP'000 | 2009 | 2009 | GBP'000 |
| | GBP'000 | GBP'000 | | GBP'000 | GBP'000 | |
+--------------------+------------+------------+------------+------------+------------+------------+
| | | | | | | |
+--------------------+------------+------------+------------+------------+------------+------------+
| EBITDA before | 1,775 | 547 | 2,288 | 2,026 | 558 | 2,539 |
| exceptional items | | | | | | |
+--------------------+------------+------------+------------+------------+------------+------------+
| Less | | | | | | |
+--------------------+------------+------------+------------+------------+------------+------------+
| Depreciation of | | | | | | |
| tangible fixed | 747 | 136 | 611 | 789 | 102 | 687 |
| assets | | | | | | |
+--------------------+------------+------------+------------+------------+------------+------------+
| Amortisation of | | | | | | |
| intangible fixed | 122 | - | 122 | 162 | 41 | 121 |
| assets | ---------- | ---------- | ---------- | ---------- | ---------- | ---------- |
+--------------------+------------+------------+------------+------------+------------+------------+
| Operating profit | | | | | | |
| before exceptional | 906 | 411 | 1,555 | 1,075 | 415 | 1,731 |
| items | | | | | | |
+--------------------+------------+------------+------------+------------+------------+------------+
| Exceptional items | | | | | | |
| - | 1,500 | - | - | (8,191) | - | (4,132) |
| operating costs | ---------- | ---------- | ---------- | ---------- | ---------- | ---------- |
+--------------------+------------+------------+------------+------------+------------+------------+
| Operating | 2,406 | 411 | 1,555 | (7,116) | 415 | (2,401) |
| profit/(loss) | | | | | | |
+--------------------+------------+------------+------------+------------+------------+------------+
| | ====== | ====== | ====== | ====== | ====== | ====== |
+--------------------+------------+------------+------------+------------+------------+------------+
| EBITDA margins | | | | | | |
| before exceptional | 4.5% | 4.4% | 8.4% | 3.8% | 4.8% | 6.1% |
| items | | | | | | |
+--------------------+------------+------------+------------+------------+------------+------------+
| Operating margins | | | | | | |
| before exceptional | 2.3% | 3.3% | 5.7% | 2.0% | 3.6% | 4.2% |
| items | | | | | | |
+--------------------+------------+------------+------------+------------+------------+------------+
Group EBITDA margin increased during the year to 4.5% from 3.8% reflecting a
strong performance from the Essentials division which increased its EBITDA
margin to 8.4% from 6.1% through the reduction in low margin business, coupled
with a strong performance in the Australian market offset by the Brands
division's small decrease from 4.8% to 4.4%.
This performance fed through to the Group's operating margins before exceptional
items which increased to 2.3% from 2.0%, again reflecting the strong performance
by the Essentials division which increased its operating margin to 5.7% from
4.2%, again through the reduction in low margin business coupled with a strong
performance in the Australian market, partially offset by the Brand division's
small decrease from 3.6% to 3.3%.
Exceptional costs
The table below provides a breakdown of exceptional operating costs incurred
during the periods indicated:
+-----------------------------------------+--------------+--------------+
| | 12 months | 12 months |
| | ended | ended |
| | 28 February | 28 February |
| | 2010 | 2009 |
| | GBP'000 | GBP'000 |
| | | |
+-----------------------------------------+--------------+--------------+
| Cost of stock reduction programme | - | (2,386) |
+-----------------------------------------+--------------+--------------+
| Cost of Abbeycrest International | 1,500 | (5,805) |
| restructuring | ---------- | ---------- |
+-----------------------------------------+--------------+--------------+
| Total exceptional operating costs | 1,500 | (8,191) |
| | ====== | ====== |
+-----------------------------------------+--------------+--------------+
Exceptional operating costs incurred during the year ended 28 February 2009
comprise:
(i) 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
ii) A stock clearance and liquidation programme associated with Abbeycrest
International's strategic withdrawal from relationships with certain of its UK
customers as part of the downsizing of the operation in Leeds.
The Group benefited from a write back of exceptional operating costs for the
year ended 28 February 2010 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.
Profit/(loss) attributable to equity shareholders
The table below analyses the profit/(loss) attributable to equity shareholders
for the periods indicated:
+-----------------------------------------+--------------+--------------+
| | 12 months | 12 months |
| | ended | ended |
| | 28 February | 28 February |
| | 2010 | 2009 |
| | GBP'000 | GBP'000 |
| | | |
+-----------------------------------------+--------------+--------------+
| Operating profit/(loss) | 2,406 | (7,116) |
+-----------------------------------------+--------------+--------------+
| Finance Income | - | 6 |
+-----------------------------------------+--------------+--------------+
| Finance costs - exceptional | - | (956) |
+-----------------------------------------+--------------+--------------+
| Finance costs - non-exceptional | (851) | (2,065) |
| | ---------- | ---------- |
+-----------------------------------------+--------------+--------------+
| Profit/(loss) before taxation | 1,555 | (10,131) |
+-----------------------------------------+--------------+--------------+
| Tax on profit/(loss) | - | (58) |
| | ---------- | ---------- |
+-----------------------------------------+--------------+--------------+
| Profit/(loss) for the year attributable | | |
| to equity shareholders | 1,555 | (10,189) |
| | ====== | ====== |
+-----------------------------------------+--------------+--------------+
The Group achieved an operating profit of GBP2.4m for the period ended 28
February 2010 compared to a loss of GBP7.1m for the period ended 28 February
2009, benefiting from the write back of exceptional costs.
The Group incurred no exceptional finance costs during the period ended 28
February 2010. The Group announced on 17 March 2009, that it had renegotiated
its UK asset backed finance 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.
The Group significantly reduced its non-exceptional finance costs during the
year ended 28 February 2010 to GBP0.9m from GBP2.1m as a result of its continued
reduction of net debt and the effective management of its working capital
against a background of continuously increasing gold prices.
Cash flows
The table below analyses the Group's cash flows for the periods indicated:
+-----------------------------------------+--------------+--------------+
| | 12 months | 12 months |
| | ended | ended |
| | 28 February | 28 February |
| | 2010 | 2009 |
| | GBP'000 | GBP'000 |
| | | |
+-----------------------------------------+--------------+--------------+
| Net cash generated from operations | 1,796 | 6,026 |
+-----------------------------------------+--------------+--------------+
| Share based payment | 230 | - |
+-----------------------------------------+--------------+--------------+
| Net finance costs | (851) | (2,059) |
+-----------------------------------------+--------------+--------------+
| Tax paid | (65) | (160) |
+-----------------------------------------+--------------+--------------+
| Net capital expenditure and development | (370) | (497) |
| expenditure | | |
+-----------------------------------------+--------------+--------------+
| Issue of shares | 1,620 | 306 |
+-----------------------------------------+--------------+--------------+
| Net proceeds from bank borrowings and | (2,888) | (3,223) |
| finance leases | | |
+-----------------------------------------+--------------+--------------+
| Leased gold facility movement | 859 | (1,241) |
| | --------- | --------- |
+-----------------------------------------+--------------+--------------+
| Net increase/(decrease) in cash | 331 | (848) |
+-----------------------------------------+--------------+--------------+
| Cash and cash equivalents at beginning | (118) | 730 |
| of year | | |
+-----------------------------------------+--------------+--------------+
| | --------- | --------- |
+-----------------------------------------+--------------+--------------+
| Cash and cash equivalents at end of | 213 | (118) |
| year | ====== | ====== |
+-----------------------------------------+--------------+--------------+
The Group has continued to generate significant inflows of cash from operations
throughout each period covered by the table above, attributed primarily to the
actively managed reduction of working capital levels (primarily stock and trade
debtors) across the Group. This is despite the impact of the inexorable
increase in the price of gold which has increased during the period to an
average monthly level of GBP636 per ounce an increase of over 25% from the
average monthly level of GBP507 per ounce in the prior year. As a consequence,
net finance costs have reduced again during the period to GBP0.9m compared to
GBP2.1m in the prior period.
Abbeycrest's operations are traditionally 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
+-----------------------------------------+--------------+--------------+
| | 12 months | 12 months |
| | ended | ended |
| | 28 February | 28 February |
| | 2010 | 2009 |
| | GBP'000 | GBP'000 |
| | | |
+-----------------------------------------+--------------+--------------+
| Expenditure on plant and equipment | 284 | 441 |
+-----------------------------------------+--------------+--------------+
| Expenditure on computer software | 89 | 56 |
| | ---------- | ---------- |
+-----------------------------------------+--------------+--------------+
| Capital expenditure | 373 | 497 |
| | ====== | ====== |
+-----------------------------------------+--------------+--------------+
The majority of capital expenditure incurred during the periods in the table
above was on equipment for Abbeycrest Thailand's Lamphun facility. During the
current period Abbeycrest Thailand's major investment was in a gold recovery
line which has contributed to a further reduction in both operating costs and
working capital. All the Group's operations are well-equipped, however, the
Group will continue to invest as projects with appropriate paybacks are
proposed.
Capital resources
The table below analyses the Group's net debt position for the periods
indicated:
+------------------------------------------------------------+-----------+-----------+
| | 12 | 12 |
| | months | months |
| | ended | ended |
| | 28 | 28 |
| | February | February |
| | 2010 | 2009 |
| | GBP'000 | GBP'000 |
| | | |
+------------------------------------------------------------+-----------+-----------+
| Borrowings - current | | |
+------------------------------------------------------------+-----------+-----------+
| Bank overdrafts | 280 | 217 |
+------------------------------------------------------------+-----------+-----------+
| Bank loans | 2,997 | 5,773 |
+------------------------------------------------------------+-----------+-----------+
| Leased gold | 2,563 | 1,704 |
+------------------------------------------------------------+-----------+-----------+
| Obligations under hire purchase contracts | 80 | 117 |
+------------------------------------------------------------+-----------+-----------+
| | | |
+------------------------------------------------------------+-----------+-----------+
| Borrowings - non-current | | |
+------------------------------------------------------------+-----------+-----------+
| Bank loans falling due in more than one year but not more | - | - |
| than two years | | |
+------------------------------------------------------------+-----------+-----------+
| Obligations under hire purchase contracts | 176 | 251 |
| | --------- | --------- |
+------------------------------------------------------------+-----------+-----------+
| Total borrowings | 6,096 | 8,062 |
+------------------------------------------------------------+-----------+-----------+
| Less | | |
+------------------------------------------------------------+-----------+-----------+
| Cash and cash equivalents | (493) | (99) |
| | --------- | --------- |
+------------------------------------------------------------+-----------+-----------+
| Net debt | 5,603 | 7,963 |
| | ===== | ===== |
+------------------------------------------------------------+-----------+-----------+
The net debt outstanding as at 28 February 2010 was GBP5.6m, a decrease of
GBP2.4m from GBP8.0m as at 28 February 2009.
The Group continues to be reliant on secured, asset backed borrowings to finance
its operations.
On 13 March 2009, Burdale Financial Limited (Burdale) formally agreed to renew
the Group's secured asset backed borrowing facilities for a further two years,
with an expiry date of 9 March 2011. Further to this, on 26 February 2010,
Burdale agreed to extend these facilities by a further year to 9 March 2012.
The facilities extended to the Group by Burdale are asset-based, revolving
credit, with a maximum drawdown of GBP8m against inventory and trade debtors in
the UK.
Debt facilities are also provided directly to Abbeycrest Thailand Limited by
Siam Commercial Bank (SCB). The facility comprises an overdraft, packing
credit, gold guarantees and letters of credit. Draw downs against the SCB
facility at 28 February 2010 stood at GBP3.5m at the Sterling/Thai Baht exchange
rate as at that date. The borrowings are secured principally against the
Lamphun facility's land and buildings and the Bangkok offices of Abbeycrest
Thailand.
The loan owed to Agilo Master Fund Limited which stood at GBP1.75m at the
beginning of the period has been satisfied in full during the period through the
payment of two tranches, the first of GBP0.75m on 28 September 2009 and a
second, in full and final settlement of GBP0.95m of all liabilities outstanding,
on 26 February 2010.
The leased gold balance of GBP2.6m (2009:GBP1.7m) 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 Company also has a GBP0.25m, secured loan facility from Michael Lever due
for repayment on 28 February 2011.
As detailed in the Chairman's Statement, the Directors anticipate that the Group
will be in breach of its profit covenants with Burdale as at 30 June 2010. The
Group will also be required to extend its current facilities or reduce the
working capital funding requirement in September 2010. These matters are
discussed further in note 1b to the financial statements.
Financial Risks and Uncertainties
Principal Risks Relating to the Group
The Group may be affected adversely by global economic conditions
The Group's operating and financial performance is influenced by the economic
conditions of the regions in which it operates, particularly in the United
Kingdom and continental Europe. The current debt position of certain Eurozone
economies as well as the UK and the proposed debt reduction policies of their
respective governments continues to create uncertainty and could lead to
recession or limited growth and an increase in competition in the Group's core
markets with a subsequent general reduction in business activity and a
consequent loss of income for the Group. The ongoing global credit market
conditions mean financial institutions continue to apply more stringent lending
criteria and the availability of debt remains low by historical comparison,
which may mean that it will remain more costly for the Group to raise funds to
take advantage of opportunities. The continued uncertain state of global
economic conditions may also have a material adverse effect on the Group's
business, results of operations and overall financial condition.
The price volatility of some of the raw materials purchased by the Group, in
particular gold, could have a material adverse effect on the Group and its
ability to reflect raw material price movements in the Group's selling prices
and in its finance headroom
The Group's profit is impacted by the price of the raw materials that it
purchases, particularly gold and other precious metals. The prices of these raw
materials are volatile and they are influenced by a number of external factors,
such as conditions in the gold market, which are outside the Group's control.
The price of gold and other precious metals has continued to rise almost
inexorably during the period ended 28 February 2010. The Group has some ability
to pass on higher input prices to its customers, but this ability is, to some
extent, dependent upon market conditions and in any event may tend to lag behind
the price input movements. There may be periods of time during which the Group
is not able to recover fully increases in the cost of raw materials due to
weakness in demand for its products or the actions of its competitors. During
periods in which prices of raw materials fall, the Group may face demands from
its customers to reduce its prices or experience falls in demand for its
products whilst customers delay orders in anticipation of price reductions.
The Group during 2010 increased finance facilities by GBP1.3m with Siam
Commercial Bank (SCB). However, the Group estimates that each GBP100 rise in
the price of gold per ounce reduces its finance headroom by in excess of
GBP0.4m. Given the adverse, increasing price movements in 2010 over and above
the considerable adverse price increases experienced during 2009 much of the
above increase in the facility has now been absorbed. There is no guarantee
that SCB will further extend its facilities to take account of increases in the
price of gold or other precious metals.
All of these factors could have a material adverse effect on the Group's
business, financial condition, prospects and results of operations.
Limitations on the Group's ability to fund its longer term financing
requirements could affect the Group adversely
(i) Debt covenants
The Company's debt facilities provided by Burdale contain net worth, trading
cash flow and EBITDA financial covenants tested quarterly and its facilities
with Michael Lever also contain certain undertakings.
If the Company cannot meet its liabilities under the debt facilities, then the
guarantees and security in place over the Group may be enforced.
The Company must manage its business and capital structure so that it is able to
meet its debt covenants, whilst also ensuring it can meet its liabilities as
they fall due. Should trading deteriorate further, the Company may be forced to
take actions that it would not ordinarily take in order to ensure it meets its
debt covenants.
(ii) SCB
Abbeycrest Thailand's debt facilities with SCB are currently being renegotiated.
Under the terms of the current documentation, the terms of all of the
facilities provided by SCB can be varied at any time. Were SCB to withdraw its
facilities or make their terms onerous, this could affect Abbeycrest Thailand's
ability to trade.
The Group is exposed to currency fluctuations which could impact its results,
cash flow and/or financial condition materially
Currency risk arises from the possibility that fluctuations in foreign currency
exchange rates will affect the value of the Group's assets and liabilities and
its earnings. The Group's reporting currency is Pounds Sterling. However,
through wholly-owned subsidiaries in Hong Kong and Thailand and sales offices in
other territories, the Group has or will have operational exposure in US
Dollars, Euros and Thai Baht (amongst other currencies) and capital expenditure
cash flows may also be in currencies other than the functional currency of the
Group's subsidiaries. As a result, the Group's profitability may be adversely
impacted if the earnings and cash flows associated with these investments fall
or cash outflows increase because of currency fluctuations against Pounds
Sterling. When valuing investments that are denominated in currencies other
than Pounds Sterling, the Group will be required to convert the values of such
investments into Pounds Sterling based on prevailing exchange rates as at the
end of the applicable accounting period. Among the factors that may affect
currency values are trade balances, levels of short-term interest rates,
differences in relative values of similar assets in different currencies,
long-term opportunities for investment and capital appreciation and political
developments. The Group uses derivative financial instruments to manage the
value of its earnings. To the extent that the Group's currency exposure remains
un-hedged, these currency risks could have a material adverse effect on the
Group's business, financial condition and results of operations.
The Group is exposed to interest rate fluctuations which could impact its
results, cash flow and/or financial condition materially
The Group's interest-bearing assets and liabilities are subject to fluctuations
in interest rates. Hence the Group's financial costs, financial condition and
credit profile may be adversely affected by fluctuations in interest rates.
The Group is also exposed to movements in interest rates which affect the amount
of interest paid on borrowings and the return on its cash investments. To the
extent that any of the Group's interest rate exposure remains unhedged, adverse
movements in interest rates could have a material adverse effect on the Group's
business, results of operations and overall financial condition.
The Group's business may be affected by the default of counterparties in respect
of monies owed to the Group
As a consequence of its normal operations, the Group often has significant
amounts owed to it by its customers. In addition, the Group may hold large cash
balances on deposit with financial institutions. In the current market
environment, the Group's operating and financial performance may be impacted by
increased exposure to the default of counterparties (including customers with
bad debts), in particular if global economic conditions worsen which may, among
other things, reduce the Group's cash flows.
There can be no assurance that the Group's policy to limit counterparty
exposures by setting credit limits for each counterparty, where possible by
reference to published credit ratings, will eliminate such exposure effectively
and any such counterparty default may have a material adverse effect on the
Group's business, results of operations and overall financial condition.
Trade credit insurance policies to insure the Group against credit risk of its
customers or counterparties, in particular due to the current volatile market
conditions, may not be available on reasonable terms or at all.
The occurrence of major operational problems could have a material adverse
effect on the Group
The Group's revenues are dependent on the continued operations of its
manufacturing facilities. Operational risks include equipment failure, failure
to comply with applicable regulations and standards, raw material supply
disruptions, labour force shortages or work stoppages, events impeding, or
increasing the cost of, transporting the Group's products and natural disasters.
Any disruption of the manufacturing processes can either result in delivery
delays, interrupt the production or even lead to a full cessation of production.
If production is interrupted, customers may decide to purchase products from
other suppliers. The resulting loss of revenue and the impact on the Group's
relationships with its customers could be significant.
The occurrence of major operational problems may adversely affect the Group's
business, financial condition, results of operations and prospects.
The Group monitors this risk through its internal control and reporting systems.
Alternative sources of supply exist either through associated subsidiaries of
the Group or other third party vendors.
The Group may be exposed to refinancing risks
To the extent that they have not been repaid by the due dates, the Group will be
required to seek a refinancing of its debt facilities as they come to an end.
The facility with Burdale is repayable on 9 March 2012 and the loan from Michael
Lever matures on 28 February 2011. There can be no assurance that the Group
will be able to obtain new finance on competitive terms or at all and,
therefore, it may suffer a loss as a result of having to dispose of assets
either at a time which is not of the Group's own volition and/or at a price
which does not reflect the full value of the asset which might be achieved upon
its maturity. A failure to obtain new finance could result in a member of the
Group defaulting on its obligations which would have a material adverse effect
on the Group.
Risks associated with the industry
The markets in which the Group operates are highly competitive with respect to
price, geographic distinction, functionality, brand recognition and the
effectiveness of sales and marketing
Due to pricing pressure, the Group may experience substantial fluctuations in
future operating results. If the Group is unable to offset any reductions in
average selling prices by increases in volumes and/or by decreases in operating
expenses, the Group's turnover and profitability may be affected negatively.
Furthermore, competition could be intensified due to companies entering certain
markets with new products or favourable cost structures or due to competitors
establishing co-operative relationships or alliances among themselves or with
third parties to increase the competitiveness of their products. Accordingly,
in such events, the Group's sales, margins and/or market share may decrease.
These and other competitive pressures may prevent the Group from competing
successfully against current or future competitors. Such competitive pressures
could have a significant impact on the Group's business, financial condition,
results operations and prospects.
The Group monitors this risk through analysing market and competitive trends and
seeks to strategically position the Group's operations in areas where prospects
remain viable in the longer term.
The markets in which the Group operates experience seasonal variations in
revenues and operating profits
Sales to the various sectors serviced by products from the Group vary greatly
throughout the calendar year, influenced by the key Christmas selling season.
As a result, the Group actively manages its cost base and investment decisions
in line with forecast activity levels and prior experience. However, any
shortfall in revenues during peak trading periods against those anticipated
could have a significant impact on the Group's business, financial condition,
results of operations and prospects.
The Group monitors this risk through its internal control and reporting systems
and is attuned to react to short term fluctuations of demand through stringent
control of costs and working capital.
Consolidated Income Statement
+------------------------------------------+-------+------------+------------+
| | | Year to | Year to |
| | | 28 | 28 |
| | | February | February |
| | Notes | 2010 | 2009 |
| | | GBP'000 | GBP'000 |
+------------------------------------------+-------+------------+------------+
| | | | |
+------------------------------------------+-------+------------+------------+
| Revenue | 2 | 39,663 | 53,052 |
+------------------------------------------+-------+------------+------------+
| Operating costs | | (37,257) | (60,168) |
| | | ---------- | ---------- |
+------------------------------------------+-------+------------+------------+
| Operating profit/(loss) | | 2,406 | (7,116) |
+------------------------------------------+-------+------------+------------+
| Finance income | 4 | - | 6 |
+------------------------------------------+-------+------------+------------+
| Finance costs | 4 | (851) | (3,021) |
| | | --------- | ---------- |
+------------------------------------------+-------+------------+------------+
| Profit/(loss) before taxation | | 1,555 | (10,131) |
+------------------------------------------+-------+------------+------------+
| Analysis of profit/(loss) before | | | |
| taxation | | | |
+------------------------------------------+-------+------------+------------+
| Profit/(loss) before taxation and | | 55 | (984) |
| exceptional items | | | |
+------------------------------------------+-------+------------+------------+
| Exceptional items - operating costs | 3 | 1,500 | (8,191) |
+------------------------------------------+-------+------------+------------+
| Exceptional items - finance costs | 3 | - | (956) |
| | | -------- | ---------- |
+------------------------------------------+-------+------------+------------+
| Profit/(loss) before taxation | | 1,555 | (10,131) |
| | | -------- | ---------- |
+------------------------------------------+-------+------------+------------+
| Tax on profit/(loss) | | - | (58) |
| | | -------- | ---------- |
+------------------------------------------+-------+------------+------------+
| Profit/(loss) for the year attributable | | 1,555 | (10,189) |
| to equity shareholders of the Parent | | ===== | ====== |
| | | | |
+------------------------------------------+-------+------------+------------+
| Profit/(loss) per share - basic and | 5 | 3.2p | (36.6)p |
| diluted | | | |
+------------------------------------------+-------+------------+------------+
Consolidated Statement of Comprehensive Income
+------------------------------------------+-------+------------+------------+
| | | Year to | Year to |
| | | 28 | 28 |
| | | February | February |
| | Notes | 2010 | 2009 |
| | | GBP'000 | GBP'000 |
| | | | |
+------------------------------------------+-------+------------+------------+
| Profit/(loss) for the period | | 1,555 | (10,189) |
| | | ---------- | ---------- |
+------------------------------------------+-------+------------+------------+
| Other comprehensive (costs)/income | | | |
+------------------------------------------+-------+------------+------------+
| Cash flow hedges: | | | |
+------------------------------------------+-------+------------+------------+
| Losses recognised directly in equity | | - | (1) |
+------------------------------------------+-------+------------+------------+
| Net investment hedges: | | | |
+------------------------------------------+-------+------------+------------+
| Gains/(losses) recognised directly in | | 1,193 | (1,445) |
| equity | | | |
+------------------------------------------+-------+------------+------------+
| Exchange (losses)/gains on retranslation | | | |
| of foreign operations | | (1,263) | 3,086 |
| | | ---------- | ---------- |
+------------------------------------------+-------+------------+------------+
| Other comprehensive (costs)/income | | (70) | 1,640 |
| | | ---------- | ---------- |
+------------------------------------------+-------+------------+------------+
| Total comprehensive income/(costs) for | | | |
| the year attributable to equity | | 1,485 | (8,549) |
| shareholders of the Parent | | ---------- | ---------- |
+------------------------------------------+-------+------------+------------+
Consolidated Balance Sheet
+------------------------------------------+-------+------------+------------+
| | | 28 | 28 |
| | | February | February |
| | Notes | 2010 | 2009 |
| | | GBP'000 | GBP'000 |
+------------------------------------------+-------+------------+------------+
| Assets | | | |
+------------------------------------------+-------+------------+------------+
| Non-current assets | | | |
+------------------------------------------+-------+------------+------------+
| Goodwill | | 1,866 | 1,880 |
+------------------------------------------+-------+------------+------------+
| Other intangible assets | | 358 | 398 |
+------------------------------------------+-------+------------+------------+
| Property, plant and equipment | | 4,240 | 4,677 |
+------------------------------------------+-------+------------+------------+
| Deferred tax assets | | 102 | 102 |
| | | ---------- | ---------- |
+------------------------------------------+-------+------------+------------+
| | | 6,566 | 7,057 |
| | | ---------- | ---------- |
+------------------------------------------+-------+------------+------------+
| Current assets | | | |
+------------------------------------------+-------+------------+------------+
| Inventories | | 8,046 | 9,344 |
+------------------------------------------+-------+------------+------------+
| Trade and other receivables | | 5,982 | 10,703 |
+------------------------------------------+-------+------------+------------+
| Cash and cash equivalents | | 493 | 99 |
| | | --------- | ---------- |
+------------------------------------------+-------+------------+------------+
| | | 14,521 | 20,146 |
| | | --------- | ---------- |
+------------------------------------------+-------+------------+------------+
| Liabilities | | | |
+------------------------------------------+-------+------------+------------+
| Current liabilities | | | |
+------------------------------------------+-------+------------+------------+
| Borrowings | | (5,920) | (7,811) |
+------------------------------------------+-------+------------+------------+
| Trade and other payables | | (3,896) | (9,010) |
+------------------------------------------+-------+------------+------------+
| Corporation tax | | - | (197) |
| | | ---------- | ---------- |
+------------------------------------------+-------+------------+------------+
| | | (9,816) | (17,018) |
| | | ---------- | ---------- |
+------------------------------------------+-------+------------+------------+
| Net current assets | | 4,705 | 3,128 |
| | | ---------- | ---------- |
+------------------------------------------+-------+------------+------------+
| Non-current liabilities | | | |
+------------------------------------------+-------+------------+------------+
| Financial liabilities | | | |
+------------------------------------------+-------+------------+------------+
| Borrowings | | (176) | (251) |
+------------------------------------------+-------+------------+------------+
| Provisions | 6 | (1,326) | (3,500) |
| | | ---------- | ---------- |
+------------------------------------------+-------+------------+------------+
| | | (1,502) | (3,751) |
| | | ---------- | ---------- |
+------------------------------------------+-------+------------+------------+
| Net assets | | 9,769 | 6,434 |
| | | ====== | ====== |
+------------------------------------------+-------+------------+------------+
| Shareholders' equity | | | |
+------------------------------------------+-------+------------+------------+
| Share capital | 7 | 3,371 | 2,922 |
+------------------------------------------+-------+------------+------------+
| Share premium account | | 7,066 | 5,665 |
+------------------------------------------+-------+------------+------------+
| Merger reserve | | 199 | 199 |
+------------------------------------------+-------+------------+------------+
| Cumulative translation reserves | | 2,354 | 2,424 |
+------------------------------------------+-------+------------+------------+
| Retained earnings | | (3,221) | (4,776) |
| | | ---------- | ---------- |
+------------------------------------------+-------+------------+------------+
| Total shareholders' equity | | 9,769 | 6,434 |
| | | ====== | ====== |
+------------------------------------------+-------+------------+------------+
Consolidated Cash Flow Statement
+------------------------------------------+-------+------------+------------+
| | | Year to | Year to |
| | | 28 | 28 |
| | | February | February |
| | Notes | 2010 | 2009 |
| | | GBP'000 | GBP'000 |
+------------------------------------------+-------+------------+------------+
| Cash flow from operating activities | | | |
+------------------------------------------+-------+------------+------------+
| Profit/(loss) after tax | | 1,555 | (10,189) |
+------------------------------------------+-------+------------+------------+
| Tax charge | | - | 58 |
+------------------------------------------+-------+------------+------------+
| Depreciation and amortisation | | 874 | 951 |
+------------------------------------------+-------+------------+------------+
| Loss on sale of tangible fixed assets | | - | 199 |
+------------------------------------------+-------+------------+------------+
| Share based payment | | 230 | - |
+------------------------------------------+-------+------------+------------+
| Finance costs | 4 | 851 | 2,059 |
+------------------------------------------+-------+------------+------------+
| Finance income | 4 | - | (6) |
| | | ---------- | ---------- |
+------------------------------------------+-------+------------+------------+
| | | 3,510 | (6,928) |
+------------------------------------------+-------+------------+------------+
| | | | |
+------------------------------------------+-------+------------+------------+
| Decrease in inventories | | 1,298 | 6,568 |
+------------------------------------------+-------+------------+------------+
| Decrease in receivables | | 4,721 | 595 |
+------------------------------------------+-------+------------+------------+
| (Decrease)/increase in payables | | (7,503) | 5,785 |
+------------------------------------------+-------+------------+------------+
| Finance costs paid | 4 | (851) | (2,059) |
+------------------------------------------+-------+------------+------------+
| Taxation paid | | (65) | (160) |
| | | ---------- | ---------- |
+------------------------------------------+-------+------------+------------+
| Net cash inflow from operating | | 1,110 | 3,801 |
| activities | | ====== | ====== |
+------------------------------------------+-------+------------+------------+
| Cash flow from investing activities | | | |
+------------------------------------------+-------+------------+------------+
| Purchase of property, plant and | | (284) | (441) |
| equipment | | | |
+------------------------------------------+-------+------------+------------+
| Proceeds from sale of property, plant | | 3 | - |
| and machinery | | | |
+------------------------------------------+-------+------------+------------+
| Finance income received | 4 | - | 6 |
+------------------------------------------+-------+------------+------------+
| Purchase of intangible fixed assets | | (89) | (56) |
| | | ---------- | ---------- |
+------------------------------------------+-------+------------+------------+
| Net cash used in investing activities | | (370) | (491) |
| | | ====== | ====== |
+------------------------------------------+-------+------------+------------+
| Cash flow from financing activities | | | |
+------------------------------------------+-------+------------+------------+
| Issue of ordinary shares | | 1,620 | 306 |
+------------------------------------------+-------+------------+------------+
| Proceeds of borrowings | | 185 | 225 |
+------------------------------------------+-------+------------+------------+
| Repayment of borrowings | | (2,776) | (3,288) |
+------------------------------------------+-------+------------+------------+
| Leased gold facility movement | | 859 | (1,241) |
+------------------------------------------+-------+------------+------------+
| Capital element of finance lease rental | | (297) | (160) |
| payments | | ---------- | ---------- |
+------------------------------------------+-------+------------+------------+
| Net cash used in financing activities | | (409) | (4,158) |
| | | ====== | ====== |
+------------------------------------------+-------+------------+------------+
| Net increase/(decrease) in cash | | 331 | (848) |
+------------------------------------------+-------+------------+------------+
| Cash and cash equivalents at beginning | | (118) | 730 |
| of year | | ---------- | ---------- |
+------------------------------------------+-------+------------+------------+
| Cash and cash equivalents at end of year | | 213 | (118) |
| | | ====== | ====== |
+------------------------------------------+-------+------------+------------+
| Cash and cash equivalents comprise: | | | |
+------------------------------------------+-------+------------+------------+
| Cash and cash equivalents in the balance | | 493 | 99 |
| sheet | | | |
+------------------------------------------+-------+------------+------------+
| Bank overdrafts | | (280) | (217) |
| | | ---------- | ---------- |
+------------------------------------------+-------+------------+------------+
| | | 213 | (118) |
| | | ====== | ====== |
+------------------------------------------+-------+------------+------------+
Consolidated Statement of Changes in Equity
+------------------+------------+------------+------------+-------------+------------+------------+------------+
| | | | | Cumulative | | | |
| | Share | Share | Merger | translation | Hedging | Retained | |
| | capital | premium | reserve | reserve | reserve | earnings | Total |
| | | | | | | | |
+------------------+------------+------------+------------+-------------+------------+------------+------------+
| Balance at 1 | 2,922 | 5,665 | 199 | 2,424 | - | (4,776) | 6,434 |
| March 2009 | | | | | | | |
+------------------+------------+------------+------------+-------------+------------+------------+------------+
| Profit for the | - | - | - | - | - | 1,555 | 1,555 |
| period | | | | | | | |
+------------------+------------+------------+------------+-------------+------------+------------+------------+
| Exchange losses | | | | | | | |
| on retranslation | | | | | | | |
| of foreign | - | - | - | (70) | - | - | (70) |
| operations | ---------- | ---------- | ---------- | ---------- | ---------- | ---------- | ---------- |
+------------------+------------+------------+------------+-------------+------------+------------+------------+
| Total | | | | | | | |
| comprehensive | - | - | - | (70) | - | 1,555 | 1,485 |
| income for the | --------- | --------- | --------- | ---------- | ---------- | ---------- | ---------- |
| period | | | | | | | |
+------------------+------------+------------+------------+-------------+------------+------------+------------+
| Gross issue of | | | | | | | |
| share capital | 449 | 1,797 | - | - | - | - | 2,246 |
+------------------+------------+------------+------------+-------------+------------+------------+------------+
| Issue costs | - | (396) | - | - | - | - | (396) |
| | --------- | ---------- | --------- | ---------- | --------- | --------- | --------- |
+------------------+------------+------------+------------+-------------+------------+------------+------------+
| Balance at 28 | | | | | | | |
| February 2010 | 3,371 | 7,066 | 199 | 2,354 | - | (3,221) | 9,769 |
| | ===== | ===== | ===== | ===== | ===== | ===== | ===== |
+------------------+------------+------------+------------+-------------+------------+------------+------------+
| | | | | | | | |
+------------------+------------+------------+------------+-------------+------------+------------+------------+
| | | | | Cumulative | | | |
| | Share | Share | Merger | translation | Hedging | Retained | |
| | capital | premium | reserve | reserve | reserve | earnings | Total |
| | | | | | | | |
+------------------+------------+------------+------------+-------------+------------+------------+------------+
| Balance at 1 | 2,662 | 5,619 | 199 | 783 | 1 | 5,413 | 14,677 |
| March 2008 | | | | | | | |
+------------------+------------+------------+------------+-------------+------------+------------+------------+
| Loss for the | - | - | - | - | - | (10,189) | (10,189) |
| period | | | | | | | |
+------------------+------------+------------+------------+-------------+------------+------------+------------+
| Cash flow | | | | | | | |
| hedges: | | | | | | | |
+------------------+------------+------------+------------+-------------+------------+------------+------------+
| Losses | | | | | | | |
| recognised | - | - | - | - | (1) | - | (1) |
| directly in | | | | | | | |
| equity | | | | | | | |
+------------------+------------+------------+------------+-------------+------------+------------+------------+
| Exchange gains | | | | | | | |
| on retranslation | | | | | | | |
| of foreign | - | - | - | 1,641 | - | - | 1,641 |
| operations | --------- | --------- | --------- | --------- | --------- | --------- | --------- |
+------------------+------------+------------+------------+-------------+------------+------------+------------+
| Total | | | | | | | |
| comprehensive | - | - | - | 1,641 | (1) | (10,189) | (8,549) |
| income for the | --------- | --------- | --------- | --------- | --------- | ---------- | ---------- |
| period | | | | | | | |
+------------------+------------+------------+------------+-------------+------------+------------+------------+
| Issue of share | 260 | 46 | - | - | - | - | 306 |
| capital | ===== | ===== | ===== | ===== | ===== | ===== | ===== |
+------------------+------------+------------+------------+-------------+------------+------------+------------+
| Balance at 28 | | | | | | | |
| February 2009 | 2,922 | 5,665 | 199 | 2,424 | - | (4,776) | 6,434 |
| | ===== | ===== | ===== | ===== | ===== | ===== | ===== |
+------------------+------------+------------+------------+-------------+------------+------------+------------+
Notes to the financial statements
1. Basis of preparation
While the financial information included in the annual financial report
announcement has been prepared in accordance with the recognition and
measurement principles of International Financial Reporting Standards as
endorsed for use in the European Union (IFRSs), this announcement does not
contain sufficient information to comply with IFRSs.
a) Directors Responsibility Statement
The Directors are responsible for preparing the annual report and the financial
statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each
financial year. Under that law the Directors are required to prepare the Group
financial statements in accordance with International Financial Reporting
Standards (IFRSs) as adopted by the European Union and have elected to prepare
the Company financial statements in accordance with United Kingdom Generally
Accepted Accounting Practice (United Kingdom Accounting Standards and Applicable
Law). Under company law, the Directors must not approve the financial statements
unless they are satisfied that they give a true and fair view of the state of
affairs of the Group and Company and of the profit or loss for the Group for
that period.
In preparing these financial statements, the Directors are required to:
· Select suitable accounting policies and then apply them consistently;
· Make judgements and accounting estimates that are reasonable and
prudent;
· State whether they have been prepared in accordance with IFRSs as
adopted by the European Union, subject to any material departures disclosed and
explained in the financial statements; and
· Prepare a Director's Report and Director's Remuneration Report which
comply with the requirements of the Companies Act 2006.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Company's transactions and disclose with
reasonable accuracy at any time the financial position of the Company and enable
them to ensure that the financial statements comply with the Companies Act 2006
and, as regards the Group financial statements, Article 4 of the IAS Regulation.
They are also responsible for safeguarding the assets of the company and hence
for taking reasonable steps for the prevention and detection of fraud and other
irregularities.
Website publication
The Directors are responsible for ensuring the annual report and the financial
statements are made available on a website. Financial statements are published
on the Company's website (www.abbeycrest.co.uk) 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 Company's website is the responsibility of the
Directors. The Directors' responsibility also extends to the ongoing integrity
of the financial statements contained therein.
Directors' responsibilities pursuant to DTR4
The Directors confirm to the best of their knowledge:
· The Group financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRSs) as adopted by the European
Union and Article 4 of the IAS Regulation and give a true and fair view of the
assets, liabilities, financial position and profit and loss of the Group.
· The annual report includes a fair review of the development and
performance of the business and the financial position of the Group and the
Parent Company, together with a description or the principal risks and
uncertainties that they face.
The Directors' responsibilities pursuant to DTR4 were approved by the Chairman,
S. Ashton.
b) Going concern
As described in the business and financial review the current economic
environment is challenging. In spite of this, the Group has reported a profit
before tax for the year ended 28 February 2010 and continues to improve working
capital balances and reduce debt levels. However, the Group has been adversely
affected by the significant rise in the gold price which has increased working
capital balances above budgeted values and reduced demand for the Group's
products.
The Group is anticipating a breach in its profit covenants with its senior UK
borrowing provider as at 30 June 2010 and has not yet agreed covenants for the
full 12 month period from the date of the balance sheet. Management are in
discussions with the Group's senior UK borrowing provider to reset and extend
covenants up to 30 June 2011. It is expected that covenants will be set that are
achievable based on current forecasts.
Based on current forecasts the Group need to either extend the current
facilities, or reduce the working capital requirement by GBP0.6m in September
2010, during the peak funding period. Management are currently exploring a
number of viable options available to them to achieve this.
During the year the Group has successfully extended facilities with its senior
UK borrowing provider by an extra year so that they will expire on 9 March 2012.
Based upon the managed reduction of debt over the previous five years, the
current balance sheet position of the Group, detailed Group forecasts, and
on-going relationships with the Group's senior and junior lenders in the UK and
Thailand respectively, the Directors are confident that appropriate and
sufficient facilities will be in place during the peak funding period.
For the above reasons, the Directors have prepared the financial statements on a
going concern basis. Should the Group not obtain sufficient financing or reduce
working capital balances during the peak funding period and reset and agree
achievable covenants up to June 2011, there exists material uncertainties which
would 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 28 February 2009 or 28 February
2010 within the meaning of Companies Act section 435, but is derived from those
accounts. Statutory accounts for the year ended 28 February 2009 have been
delivered to the Registrar of Companies and those for 28 February 2010 will be
delivered following the Company's Annual General Meeting. Their report for the
year end 28 February 2010 did not contain statements under S498(2) or (3) of the
Companies Act 2006 and their report for the year ended February 2009 did not
contain statements under s237(2) or (3) of the Companies Act 1985. Their report
for 28 February 2009 and 28 February 2010 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.
d) Changes in accounting policies
Amendment to IAS 1 Presentation of Financial Statements: A Revised Presentation:
As a result of the application of this Amendment, the Group has elected to
present two separate statements, an income statement and a statement of
comprehensive income; previously it presented an income statement and the
statement of recognised income and expense. In addition, a statement of changes
in equity is now presented as a primary statement where previously the
information was included in a note. The Amendment does not change the
recognition or measurement of transactions and balances in the financial
statements.
Amendment to IFRS 8 Operating Segments:
The application of this Amendment has resulted in changes to the disclosure
provided in respect of operating segments, primarily in note 2 to the financial
statements including an analysis of results and assets by operating segment.
The Amendment does not change the recognition or measurement of transactions and
balances in the financial statements.
2) Segmental analysis
The Group has two main reportable segments:
(i) Brands division - this division is the Group's vehicle for increased
penetration of higher value segments of the jewellery market. Its objective is
to appeal to the most fashion conscious buyers through the creation of highly
innovative branded jewellery collections and differentiated service
propositions.
(ii) Essentials division - this division represents the bulk of the retained
historic business of Abbeycrest. Its role is to continue to exploit the Group's
supply capabilities across existing mainstream markets in much the same way as
before; only with heightened consumer focus; product differentiation and account
management. This is the Group's foundation.
Factors that management used to identify the Group's reportable segments
The Group's reportable segments are strategic business units that offer
different products. They are managed separately because each business requires
different marketing strategies.
Measurement of operating segment profit or loss, assets and liabilities
The accounting policies of the operating segments are the same as those
described in the summary of significant accounting policies.
The Group evaluates performance on the basis of EBITDA and profit or loss from
operations before tax not including non-recurring losses, such as restructuring
costs and goodwill impairment and also excluding the effects of share based
payments.
Segment assets exclude tax assets used primarily for corporate purposes.
Details are provided in the reconciliation from segment assets and liabilities
to the Group.
The following shows the revenues and results by reportable segment for the year
ended 28 February 2010:
+-------------------------------------------+-----------+------------+-----------+
| | Brands | Essentials | |
| | division | division | Total |
| | GBP'000 | GBP'000 | GBP'000 |
| | | | |
+-------------------------------------------+-----------+------------+-----------+
| Revenue | 12,478 | 27,185 | 39,663 |
| | --------- | --------- | --------- |
+-------------------------------------------+-----------+------------+-----------+
| Segment result | 411 | 1,555 | 1,966 |
| | --------- | --------- | --------- |
+-------------------------------------------+-----------+------------+-----------+
| Unallocated income | | | 440 |
+-------------------------------------------+-----------+------------+-----------+
| Finance costs | | | (851) |
| | | | --------- |
+-------------------------------------------+-----------+------------+-----------+
| Profit before income tax | | | 1,555 |
| | | | --------- |
+-------------------------------------------+-----------+------------+-----------+
| Tax charge | | | - |
| | | | --------- |
+-------------------------------------------+-----------+------------+-----------+
| Profit for the period | | | 1,555 |
| | | | ===== |
+-------------------------------------------+-----------+------------+-----------+
Unallocated income relates to central costs and income, including exceptional
items.
Operating profit margins
+----------------------------------+------------+------------+-------------+------------+
| | Brands | Essentials | | |
| | division | division | Unallocated | Total |
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
| | | | | |
+----------------------------------+------------+------------+-------------+------------+
| EBITDA before exceptional items | 547 | 2,288 | (1,060) | 1,775 |
+----------------------------------+------------+------------+-------------+------------+
| Less | | | | |
+----------------------------------+------------+------------+-------------+------------+
| Depreciation of tangible fixed | (136) | (611) | - | (747) |
| assets | | | | |
+----------------------------------+------------+------------+-------------+------------+
| Amortisation of intangible fixed | - | (122) | - | (122) |
| assets | --------- | ---------- | ---------- | ---------- |
+----------------------------------+------------+------------+-------------+------------+
| Operating profit before | 411 | 1,555 | (1,060) | 906 |
| exceptional items | | | | |
+----------------------------------+------------+------------+-------------+------------+
| Exceptional items - operating | - | - | 1,500 | 1,500 |
| costs | ---------- | ---------- | ---------- | --------- |
+----------------------------------+------------+------------+-------------+------------+
| Operating profit/(loss) | 411 | 1,555 | 440 | 2,406 |
| | ====== | ====== | ====== | ====== |
+----------------------------------+------------+------------+-------------+------------+
| EBITDA margin before exceptional | 4.4% | 8.4% | - | 4.5% |
| items | ---------- | ---------- | ---------- | ---------- |
+----------------------------------+------------+------------+-------------+------------+
| Operating margin before | 3.3% | 5.7% | - | 2.3% |
| exceptional items | ---------- | ---------- | ---------- | ---------- |
+----------------------------------+------------+------------+-------------+------------+
Segmental assets as at 28 February 2010 were as follows:
+--------------------------+----------+------------+-------------+----------------+---------+
| | Brands | Essentials | | | |
| | division | division | Unallocated | Reconciliation | Total |
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
| | | | | | |
+--------------------------+----------+------------+-------------+----------------+---------+
| Total assets | 12,942 | 19,501 | 14,035 | (25,391) | 21,087 |
| | ====== | ====== | ====== | ====== | ====== |
+--------------------------+----------+------------+-------------+----------------+---------+
The reconciling items relate to the elimination of intercompany balances of
GBP17,486,000 and fixed asset investments of GBP7,905,000 on consolidation.
Non-current asset additions totalled GBP373,000 of which GBP169,000 related to
the Brands division and GBP204,000 related to the Essentials division.
The following shows the revenues and results by reportable segment for the year
ended 28 February 2009:
+-------------------------------------------+-----------+------------+-----------+
| | Brands | Essentials | |
| | division | division | Total |
| | GBP'000 | GBP'000 | GBP'000 |
| | | | |
+-------------------------------------------+-----------+------------+-----------+
| Revenue | 11,542 | 41,510 | 53,052 |
| | --------- | --------- | --------- |
+-------------------------------------------+-----------+------------+-----------+
| Segment result | 415 | (2,401) | (1,986) |
| | --------- | --------- | --------- |
+-------------------------------------------+-----------+------------+-----------+
| Unallocated costs | | | (5,130) |
+-------------------------------------------+-----------+------------+-----------+
| Finance income | | | 6 |
+-------------------------------------------+-----------+------------+-----------+
| Finance costs | | | (3,021) |
| | | | --------- |
+-------------------------------------------+-----------+------------+-----------+
| Loss before income tax | | | (10,131) |
| | | | --------- |
+-------------------------------------------+-----------+------------+-----------+
| Tax charge | | | (58) |
| | | | --------- |
+-------------------------------------------+-----------+------------+-----------+
| Loss for the period | | | (10,189) |
| | | | ====== |
+-------------------------------------------+-----------+------------+-----------+
Unallocated costs relates to central costs and income, including exceptional
items.
Operating profit margins
+----------------------------------+------------+------------+-------------+------------+
| | Brands | Essentials | | |
| | division | division | Unallocated | Total |
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
| | | | | |
+----------------------------------+------------+------------+-------------+------------+
| EBITDA before exceptional items | 558 | 2,539 | (1,071) | 2,026 |
+----------------------------------+------------+------------+-------------+------------+
| Less | | | | |
+----------------------------------+------------+------------+-------------+------------+
| Depreciation of tangible fixed | (102) | (687) | - | (789) |
| assets | | | | |
+----------------------------------+------------+------------+-------------+------------+
| Amortisation of intangible fixed | (41) | (121) | - | (162) |
| assets | --------- | ---------- | ---------- | ---------- |
+----------------------------------+------------+------------+-------------+------------+
| Operating profit before | 415 | 1,731 | (1,071) | 1,075 |
| exceptional items | | | | |
+----------------------------------+------------+------------+-------------+------------+
| Exceptional items - operating | - | (4,132) | (4,059) | (8,191) |
| costs | ---------- | ---------- | ---------- | --------- |
+----------------------------------+------------+------------+-------------+------------+
| Operating profit/(loss) | 415 | (2,401) | (5,130) | (7,116) |
| | ====== | ====== | ====== | ====== |
+----------------------------------+------------+------------+-------------+------------+
| EBITDA margin before exceptional | 4.8% | 6.1% | - | 3.8% |
| items | ---------- | ---------- | ---------- | ---------- |
+----------------------------------+------------+------------+-------------+------------+
| Operating margin before | 3.6% | 4.2% | - | 2.0% |
| exceptional items | ---------- | ---------- | ---------- | ---------- |
+----------------------------------+------------+------------+-------------+------------+
Segmental assets as at 28 February 2009 were as follows:
+--------------------------+----------+------------+-------------+----------------+---------+
| | Brands | Essentials | | | |
| | division | division | Unallocated | Reconciliation | Total |
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
| | | | | | |
+--------------------------+----------+------------+-------------+----------------+---------+
| Total assets | 13,112 | 36,599 | 24,254 | (46,762) | 27,203 |
| | ====== | ====== | ====== | ====== | ====== |
+--------------------------+----------+------------+-------------+----------------+---------+
The reconciling items relate to the elimination of intercompany balances of
GBP35,086,000 and fixed asset investments of GBP11,676,000 on consolidation.
Non current asset additions totalled GBP497,000 of which GBP90,000 related to
the Brands division and GBP407,000 related to the Essentials division.
The Group operates from three main geographical regions: the United Kingdom,
Thailand and Hong Kong.
+-----------------------+---------+---------+---------+---------+---------+---------+---------+---------+
| | United | Thailand | Hong Kong | Total |
| | Kingdom | | | |
+-----------------------+-------------------+-------------------+-------------------+-------------------+
| | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 |
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
| | | | | | | | | |
+-----------------------+---------+---------+---------+---------+---------+---------+---------+---------+
| Total revenue | 14,630 | 26,740 | 20,242 | 20,260 | 4,791 | 6,052 | 39,663 | 53,052 |
| | ===== | ====== | ====== | ====== | ====== | ====== | ====== | ====== |
+-----------------------+---------+---------+---------+---------+---------+---------+---------+---------+
| Total assets by | 7,846 | 11,293 | 11,206 | 10,426 | 2,035 | 1,984 | 21,087 | 23,703 |
| location | ===== | ====== | ====== | ====== | ====== | ====== | ====== | ====== |
+-----------------------+---------+---------+---------+---------+---------+---------+---------+---------+
Total revenues are allocated based on the country of origin.
No customers represented more than 10% of the Group's revenue (2009: one
customer, represented 17%).
Total assets are allocated based on where the assets are located.
3. Exceptional items
+-------------------------------------------------+----+------------+------------+
| | | 2010 | 2009 |
| | | GBP'000 | GBP'000 |
+-------------------------------------------------+----+------------+------------+
| Exceptional items - operating costs | | | |
+-------------------------------------------------+----+------------+------------+
| Stock reduction programme | | - | 2,386 |
+-------------------------------------------------+----+------------+------------+
| Cost of Abbeycrest International restructuring | | (1,500) | 5,805 |
| | | ---------- | ---------- |
+-------------------------------------------------+----+------------+------------+
| | | (1,500) | 8,191 |
| | | ====== | ====== |
+-------------------------------------------------+----+------------+------------+
| Exceptional items - finance costs | | | |
+-------------------------------------------------+----+------------+------------+
| Re-banking costs | | - | 956 |
| | | ---------- | ---------- |
+-------------------------------------------------+----+------------+------------+
| Total exceptional items | | (1,500) | 9,147 |
| | | ====== | ====== |
+-------------------------------------------------+----+------------+------------+
Operating costs
Exceptional operating costs incurred during the year ended 28 February 2009
comprise:
(i) 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
(ii) A stock clearance and liquidation programme associated with
Abbeycrest International's strategic withdrawal from relationships with certain
of its UK customers as part of the downsizing of the operation in Leeds.
The Group benefited from a write back of exceptional operating costs 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.
Finance costs
The re-banking costs in 2009 relate to facility fees and associated legal costs.
4. Financing income and expense
+-----------------------------------------------------+------------+------------+
| | 2010 | 2009 |
| | GBP'000 | GBP'000 |
| | | |
+-----------------------------------------------------+------------+------------+
| Finance costs | | |
+-----------------------------------------------------+------------+------------+
| - bank borrowings | (613) | (1,418) |
+-----------------------------------------------------+------------+------------+
| - interest payable on leased gold facility | (17) | (39) |
+-----------------------------------------------------+------------+------------+
| - bank charges | (221) | (1,564) |
| | ---------- | ---------- |
+-----------------------------------------------------+------------+------------+
| Finance costs | (851) | (3,021) |
| | ---------- | ---------- |
+-----------------------------------------------------+------------+------------+
| Finance income | | |
+-----------------------------------------------------+------------+------------+
| - bank deposit interest | - | 6 |
| | ---------- | ---------- |
+-----------------------------------------------------+------------+------------+
| Net finance cost | (851) | (3,015) |
| | ====== | ====== |
+-----------------------------------------------------+------------+------------+
5. Profit/(loss) per share
The weighted average number of shares is as follows:
+-------------------------------------+----------------+-----------------+
| | 2010 | 2009 |
| | Number of | Number of |
| | shares | shares |
+-------------------------------------+----------------+-----------------+
| Weighted average number of shares: | | |
+-------------------------------------+----------------+-----------------+
| For basic profit/(loss) per share | 47,947,545 | 27,847,203 |
+-------------------------------------+----------------+-----------------+
| For diluted profit/(loss) per share | 47,992,545 | 27,847,203 |
+-------------------------------------+----------------+-----------------+
| | | |
+-------------------------------------+----------------+-----------------+
| | 2010 | 2009 |
| | GBP'000 | GBP'000 |
| | | |
+-------------------------------------+----------------+-----------------+
| Financial profit/(loss) for the | 1,555 | (10,189) |
| year | ====== | ====== |
+-------------------------------------+----------------+-----------------+
| Profit/(loss) per share | | |
+-------------------------------------+----------------+-----------------+
| - basic and diluted | 3.2p | (36.6)p |
+-------------------------------------+----------------+-----------------+
6. Provisions
+-----------------------------------------------------+----+-------------+
| | | Onerous |
| | | lease |
| | | GBP'000 |
| | | |
+-----------------------------------------------------+----+-------------+
| At 1 March 2009 | | 3,500 |
+-----------------------------------------------------+----+-------------+
| Utilised in year | | (674) |
+-----------------------------------------------------+----+-------------+
| Released in the year | | (1,500) |
| | | ---------- |
+-----------------------------------------------------+----+-------------+
| At 28 February 2010 | | 1,326 |
| | | ====== |
+-----------------------------------------------------+----+-------------+
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 GBP1.4m. Management have not included any
income against the cash outflows due to the sublease potential being assessed as
low. The net cash outflows have been discounted at a rate of 4.5% considered to
be markets current assessment of the time value of money.
7. Called up share capital
The Company's share capital comprises the following shares:
+---------------------------+-------------------+-----------+-------------------+-----------+
| | 2010 | 2010 | 2009 | 2009 |
| | No. of | GBP'000 | No. of | GBP'000 |
| | shares | | shares | |
+---------------------------+-------------------+-----------+-------------------+-----------+
| Authorised: | | | | |
+---------------------------+-------------------+-----------+-------------------+-----------+
| Ordinary shares of 10p | - | - | 31,000,000 | 3,100 |
| each | | | | |
+---------------------------+-------------------+-----------+-------------------+-----------+
| New ordinary shares of 1p | 100,000,000 | 1,000 | - | - |
| each | | | | |
+---------------------------+-------------------+-----------+-------------------+-----------+
| Ordinary deferred shares | 29,217,691 | 2,630 | - | - |
| of 9p each | ----------------- | --------- | ----------------- | --------- |
+---------------------------+-------------------+-----------+-------------------+-----------+
| | 129,217,691 | 3,630 | 31,000,000 | 3,100 |
| | ========== | ===== | ========== | ===== |
+---------------------------+-------------------+-----------+-------------------+-----------+
| | | | | |
+---------------------------+-------------------+-----------+-------------------+-----------+
| | 2010 | 2010 | 2009 | 2009 |
| | No. of | GBP'000 | No. of | GBP'000 |
| | shares | | shares | |
+---------------------------+-------------------+-----------+-------------------+-----------+
| Allotted, called-up and | | | | |
| fully paid: | | | | |
+---------------------------+-------------------+-----------+-------------------+-----------+
| Ordinary shares of 10p | - | - | 29,217,691 | 2,922 |
| each | | | | |
+---------------------------+-------------------+-----------+-------------------+-----------+
| New ordinary shares of 1p | 74,142,691 | 741 | - | - |
| each | | | | |
+---------------------------+-------------------+-----------+-------------------+-----------+
| Ordinary deferred shares | 29,217,691 | 2,630 | - | - |
| of 9p each | ----------------- | --------- | ----------------- | --------- |
+---------------------------+-------------------+-----------+-------------------+-----------+
| | 103,360,382 | 3,371 | 29,217,691 | 2,922 |
| | ========== | ===== | ========== | ===== |
+---------------------------+-------------------+-----------+-------------------+-----------+
Share capital movements during the year:
+----------------------------+------------+------------+------------+------------+
| | | | | |
| | Ordinary | New | Ordinary | |
| | shares | ordinary | | Total |
| | of 10p | shares | deferred | GBP'000 |
| | each | of 1p | shares | |
| | GBP'000 | each | of 9p | |
| | | GBP'000 | each | |
| | | | GBP'000 | |
+----------------------------+------------+------------+------------+------------+
| Shares in issue at 1 March | 2,922 | - | - | 2,922 |
| 2009 | | | | |
+----------------------------+------------+------------+------------+------------+
| Share conversion on 23 | (2,922) | 292 | 2,630 | - |
| September 2009 | | | | |
+----------------------------+------------+------------+------------+------------+
| Shares issued on 24 | - | 449 | - | 449 |
| September 2009 | --------- | ---------- | ---------- | ---------- |
+----------------------------+------------+------------+------------+------------+
| Shares in issue as at 28 | - | 741 | 2,630 | 3,371 |
| February 2010 | ====== | ====== | ====== | ====== |
+----------------------------+------------+------------+------------+------------+
On 23 September 2009 each of the 29,217,691 issued ordinary shares of 10p each
were sub-divided into 29,217,691 new ordinary shares of 1p each and 29,217,691
deferred shares of 9p each. Each of the 1,782,309 authorised but unissued
shares of 10p each were sub-divided into 17,823,090 new ordinary shares of 1p
each. The authorised share capital was further increased by the creation of
55,959,219 new ordinary shares of 1p each.
On the 24 September 2009 the Company successfully completed the placing of
40,300,000 new ordinary shares of 1p each at a price of 5p per share raising
GBP2,015,000 before expenses. In addition 2,000,000 new ordinary shares of 1p
each were issued at 5p per share to Moorgarth Investments Limited in full
satisfaction of a fee payable for entering into a deed of variation for an
operating lease. The Company also issued 2,625,000 new ordinary shares of 1p
each to Agilo at an issue price of 5p each in full satisfaction of the lump sum
interest charges accrued up to 31 August 2009.
In total, the Company raised GBP2,246,000 gross of expenses and incurred costs
of GBP396,000 which have been deducted from the share premium account.
Details of classes of share capital
Holders of ordinary shares are entitled to attend and vote at General Meetings
and, on a poll, each holder will have one vote per share. Ordinary shares rank
pari passu with each other in respect of dividends and on a return of capital or
a winding up.
Holders of deferred shares are not entitled to receive notice of or attend at
any General Meetings. They are not entitled to receive a dividend. On a
winding-up of the Company they are entitled to the amount paid up on that share
but only after the payment of the capital paid up on each ordinary share of one
pence in the share capital of the Company and the further payment of
GBP10,000,000 on each such ordinary share. They are not entitled to receive a
share certificate.
The Company has granted options, which at 28 February 2010 had not been
exercised, in respect of ordinary shares exercisable between the following dates
as set out below:
+-------------------------------------+----------------+-----------------+
| | | Exercise |
| | Shares | price |
+-------------------------------------+----------------+-----------------+
| Executive Share Option Scheme | | |
+-------------------------------------+----------------+-----------------+
| 6 June 2003 - 6 June 2010 | 5,000 | 113p |
+-------------------------------------+----------------+-----------------+
| 24 May 2004 - 24 May 2011 | 40,000 | 102p |
| | ---------- | ---------- |
+-------------------------------------+----------------+-----------------+
| | 45,000 | |
| | ====== | |
+-------------------------------------+----------------+-----------------+
The additional disclosures required by IFRS 2 have not been given as the impact
of the share based payments is not material to the results of the Group.
A reconciliation of option movements over the year to 28 February 2010 is shown
below:
+---------------------------+--------------+--------------+--------------+--------------+
| | 2010 | 2009 |
+---------------------------+-----------------------------+-----------------------------+
| | | Weighted | | Weighted |
| | | average | | average |
| | Number | exercise | Number | exercise |
| | | price | | price |
+---------------------------+--------------+--------------+--------------+--------------+
| Outstanding at 1 March | 83,835 | GBP0.79 | 113,235 | GBP0.85 |
| 2009 | | | | |
+---------------------------+--------------+--------------+--------------+--------------+
| Expired | (38,835) | GBP0.52 | (29,400) | GBP1.02 |
| | ------------ | ------------ | ------------ | ------------ |
+---------------------------+--------------+--------------+--------------+--------------+
| Outstanding at 28 | 45,000 | GBP1.03 | 83,835 | GBP0.79 |
| February 2010 | ======= | ======= | ======= | ======= |
+---------------------------+--------------+--------------+--------------+--------------+
8. Related party transactions
Simon Ashton, Graham Partridge and Nick Hamley participated in the placing
completed by the Company on 24 September 2009 on the same terms as the other
placees. Under the Listing Rules, their respective participations in the
placing constituted smaller related party transactions not requiring shareholder
approval:
+-------------------------------------+----------------+-----------------+
| | Consideration | No of shares |
| | GBP | Allotted |
| | | |
+-------------------------------------+----------------+-----------------+
| S. Ashton | 50,000 | 1,000,000 |
+-------------------------------------+----------------+-----------------+
| G. Partridge | 30,000 | 600,000 |
+-------------------------------------+----------------+-----------------+
| N. Hamley | 20,000 | 400,000 |
| | ====== | ====== |
+-------------------------------------+----------------+-----------------+
The full text of the 2010 Report and Accounts will be sent to shareholders and
can be found on the Company's website at www.abbeycrest.co.uk.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR KKKDKQBKDPAN
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