Final Results
21 May 2003 - 5:01PM
UK Regulatory
RNS Number:3553L
Marchpole Holdings PLC
21 May 2003
21 May 2003
'Return to Profitability'
Marchpole Holdings plc, who design, produce and sell high quality clothing and
accessories for the YSL and Boateng brands, announces its results for the year
ended 31 March 2003.
Key Points
* Profit before tax achieved of #0.7m (2002 #2.8m loss) on turnover of
#16.0m (2002 #17.3m).
* Recovery driven by new board with strong sector experience.
* Restructured balance sheet from sale of property and additional
financing.
* Improvements in YSL distribution, investment in product development
and quality have furthered recovery.
* YSL Autumn/Winter 2003 collection received an excellent response and
the current order book stands at #7.1m of advance orders.
* New licence agreement signed with Ozwald Boateng for a diffusion line.
The first collection has been designed and sold, achieving high
quality distribution.
* Strategy clearly focussed on creating future growth and shareholder
value through "brand management".
Chief Executive, Greg Tufnell commented on the results :
"Since our appointment in May last year, the new board have focussed on
returning Marchpole to profitability and building stability within the business.
The progress made with the YSL brand has been extremely encouraging and with
several years of the license remaining, this is a significant opportunity for
the Company. The Board were delighted to sign an agreement with Ozwald Boateng
in October last year and believe that there is an exciting future for this
brand. We are also concentrating our efforts on building a high quality
portfolio of brands.
With our return to profitability ahead of expectations, the forthcoming twelve
months will focus on increasing sales and profitability in order to enhance
shareholder value."
For further information please contact:
Marchpole: 020 7908 7777
Greg Tufnell, Chief Executive
Justin Hampshire, Finance Director
Buchanan Communications: 020 7466 5000
Tim Thompson / Nicola Cronk
Chairman's Statement
I am pleased to present to you the preliminary results of Marchpole Holdings plc
for the year ended 31 March 2003.
An experienced new team was appointed to the board on 17 May 2002. Greg Tufnell
who has twenty years' experience in menswear and whose career includes working
at The Burton Group, Mothercare and Next, joined us as Chief Executive. Justin
Hampshire, who qualified as a Chartered Accountant with PricewaterhouseCoopers
and has since worked with both public and private companies, joined us as
Finance Director. Since their appointment much has been achieved. The hard
work of the Board together with Michael Morris has been fundamental in returning
the business to profitability and in reporting this year's results.
Results
The profit and loss account for the year ended 31 March 2003 shows an operating
profit of #0.8 million (2002 #3.2 million loss) on reduced turnover of #16.0
million (2002 #17.3 million). A gross margin of 41% was achieved (2002 25%)
during the year with profit before taxation of #0.7m (2002 #2.8m loss), and EPS
of 0.6p (2002 loss per share 2.1p).
Licences
Yves Saint Laurent
Current sell through on the Yves Saint Laurent brand is strong with earlier
deliveries and investment in product development having been the key to this
progress. The Autumn/Winter 2003 collection received an excellent response and
the order book currently stands at #7.1 million of advance orders. This
momentum is characterised by the production of a fuller collection, an improved
pricing structure and advances in distribution with both existing and new
customers. There has been further investment in the design team, which is
working to finalise the Spring/Summer 2004 collection ready for showing in July
2003.
Boateng
We announced during October 2002 that a licence agreement had been signed to
produce and sell a new diffusion range designed by Ozwald Boateng. As part of
this agreement Ozwald Boateng has agreed to cease distribution of his O to Z
range from August 2003 onwards. This licence runs for seven years and is for
the UK market with the opportunity to extend internationally. During the months
since the licence was signed the first collection has been designed and sold and
the order book stands at #0.5 million with sixty top tier retailers - an
excellent first season's performance. The second (Spring/Summer 2004)
collection is nearing completion and we are optimistic for a strong sales
response.
Property
The property at 19-20 Berners Street was sold for #4,645,000 after costs during
May 2002. Shareholders' approval was not sought for this transaction as a
dispensation from the UKLA was obtained prior to completion. The Company has
subsequently entered into a lease with the new landlord for 10,019 sq ft,
approximately 50% of the building, on a commercial basis which has contributed
to the reduction in overhead.
Other matters
On their appointment, the new Board committed to reaching an agreement with the
Company's former Chief Executive, Michael Morris, in a timely and cost effective
manner. During November 2002, we announced that a full and final settlement had
been reached with Michael Morris with regard to outstanding litigation and
claims and a final payment of #70,000 will become due to Mr Morris in June 2003.
Outlook
The investment since May 2002 means that we enter the new financial year with
the key building blocks for restoring shareholder value firmly in place. It is
the Board's intention to return to the payment of a dividend at the earliest
practicable opportunity.
Strong brands, improving product and distribution, overhead and margin control,
and a focus on overall brand management as a platform, will enable us to pursue
the acquisition of further brands to take Marchpole forward and to strengthen
the Company's position.
The fashion industry as a whole is going through a challenging period with the
overall economic uncertainty and static growth. The Board, however remains
confident that progress can continue to be made with the existing brands through
innovative design and product development and through enhancing customer
relationships and communication.
Finally, on behalf of the Board of Directors, I would like to thank the
employees of the Company for their efforts over the last twelve months and for
their continued support and hard work.
Christopher Phillips
Chairman 21 May 2003
MARCHPOLE HOLDINGS PLC
GROUP PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH 2003
31-Mar-03 31-Mar-02
#'000 #'000
Turnover 15,991 17,255
Cost of sales (9,489) (12,968)
Gross profit 6,502 4,287
Distribution costs (1,853) (2,506)
Administration expenses (3,807) (4,945)
Operating profit/(loss) 842 (3,164)
Other income - 750
Interest payable (125) (395)
Profit/(loss) on ordinary activities before taxation 717 (2,809)
Tax credit on profit/(loss) on ordinary activities 79 260
Retained profit/(loss) for the year 796 (2,549)
Earnings/(loss) per share
Basic and diluted 0.6p (2.1)p
MARCHPOLE HOLDINGS PLC
GROUP BALANCE SHEET
AS AT 31 MARCH 2003
31-Mar-03 31-Mar-02
#'000 #'000
Fixed assets
Tangible assets 97 4,886
Current assets
Stock 1,124 1,602
Debtors 4,299 2,002
Cash at bank and in hand 121 499
5,544 4,103
Creditors: amounts falling due within one year (3,579) (7,882)
Net current assets/(liabilities) 1,965 (3,779)
Total assets less current liabilities 2,062 1,107
Creditors: amounts falling due after more than one year (125) (25)
Net assets 1,937 1,082
Capital and reserves
Share capital 23,901 23,891
Share premium 15,626 15,586
Revaluation reserve - 683
Merger reserve (38,584) (38,584)
Profit and loss account 994 (494)
Total shareholders' funds - equity interests 1,937 1,082
MARCHPOLE HOLDINGS PLC
GROUP STATEMENT OF CASHFLOWS
FOR THE YEAR ENDED 31 MARCH 2003
31-Mar-03 31-Mar-02
#'000 #'000
Cash (outflow)/inflow from operating activities (868) 291
Returns on investments and servicing of finance
Interest received - 25
Interest and facility fees paid (124) (429)
Interest element of hire purchase and finance lease rentals (1) (3)
Sale of licence - 750
(125) 343
Taxation 80 (314)
Capital expenditure and financial investment
Payments to acquire tangible fixed assets (39) (30)
Proceeds from sale of tangible fixed assets 4,743 59
4,704 29
Cash inflow before financing 3,791 349
Financing
Issue of new share capital 50 -
New loans 1,000 -
Repayment of loans (325) (802)
Capital element of hire purchase and finance lease rentals (36) (15)
689 (817)
Increase/(decrease) in cash in the year 4,480 (468)
MARCHPOLE HOLDINGS PLC
EXTRACT FROM NOTES TO THE ACCOUNTS
FOR THE YEAR ENDED 31 MARCH 2003
1 Basis of preparation
The financial information presented in this preliminary statement has been extracted from the draft
Group financial statements for the year ended 31st March 2003, and does not constitute full accounts
within the meaning of section 240 of the Companies Act 1985. The audit is virtually complete and the
auditors are expected to give an unqualified report on these results.
2 Turnover and profit on ordinary activities before taxation
Turnover and profit on ordinary activities before taxation are wholly attribute to the Group's
principal activity and arose entirely in the United Kingdom and the Republic of Ireland.
3 Taxation
31-Mar-03 31-Mar-02
#'000 #'000
UK Corporation Tax at 30% (2002 - 30%):
Current tax/(tax credit) on profit/(loss) for the year 180 (230)
Prior period adjustment (259) (30)
(79) (260)
4 Net cash (outflow)/inflow from operating activities
31-Mar-03 31-Mar-02
#'000 #'000
Operating profit/(loss) 842 (3,164)
Depreciation of tangible fixed assets 85 412
(Profit)/loss on disposal of tangible fixed assets (1) 2
Currency translation differences 9 -
Decrease in stocks 478 2,175
(Increase)/decrease in debtors (2,297) 1,344
Increase/(decrease) in creditors 16 (478)
(868) 291
MARCHPOLE HOLDINGS PLC
EXTRACT FROM NOTES TO THE ACCOUNTS
FOR THE YEAR ENDED 31 MARCH 2003
5 Reconciliation of net debt
31-Mar-03 31-Mar-02
#'000 #'000
Net debt at beginning of the year (4,395) (4,693)
Increase/(decrease) in cash 4,480 (468)
New loans (1,000) -
New hire purchase and finance lease facilities - (51)
Capital element of hire purchase and finance lease rentals 36 15
Loan repayments 325 802
Net debt at end of the year (554) (4,395)
Cash at bank and in hand 121 499
Bank overdraft - (4,858)
121 (4,359)
Hire purchase and finance leases - (36)
Loans (675) -
(554) (4,395)
This information is provided by RNS
The company news service from the London Stock Exchange
END
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