Interim Results
28 November 2008 - 8:12PM
UK Regulatory
RNS Number : 1530J
Strategic Retail PLC
28 November 2008
STRATEGIC RETAIL PLC
Interim Results
for the six months ended 30 August 2008
CHAIRMAN'S STATEMENT
Strategic Retail plc, the national retailer of soft furnishings, furniture and DIY products from stores located in either high street
locations or retail parks, announces today its unaudited interim results for the six months ended 30 August 2008 and provides an update on
current trading and prospects.
With the events in financial markets across the world in recent months, consumer confidence has reduced substantially. As a consequence,
trading conditions have deteriorated significantly in the UK. The board of directors is taking all appropriate measures to deal with the
current challenging economic environment and is maintaining a regular dialogue with the Company's bankers, in common with most other
businesses exposed to the retail sector.
We have had to look very carefully at our strategy in response to this significant deterioration in trading. Overall our like-for-like
sales performance has deteriorated by some 6% in the 26 weeks to 30 August 2008. The deterioration has been especially acute in the larger
out-of-town Texstyle World stores which are trading some 11% down on a like-for-like basis. This is especially disappointing when you
consider that these stores had been trading 2.5% up in the 53 weeks ended 1 March 2008. The Leveys business has also shown a disappointing
reversal in trends by trading some 7.8% down in the 26 weeks to 30 August 2008 compared to being up some 6.4% in the 53 week period ended 1
March 2008. The Fads stores remained at some 2% down on a like-for-like basis over both periods. In addition, average gross margins have
declined from 49.2% to 47.4% and distribution costs have increased with the addition of larger stores in out-of-town retail parks
(distribution costs in the 26 weeks ended 30 August 2008 were �4,139,000 versus �3,962,000 in the 26 weeks ended 25 August 2007).
We opened new stores located in Sheffield and East Kilbride in the early part of the year as we had committed to these openings during
the previous year. Plans for other new store openings have been cancelled. The new store openings were funded in part by reverse premiums
offered as an incentive by landlords.
Our revised strategy has been to try to reposition the sales offering in the stores towards discount products as demand has diminished
for more expensive products. This transition has been difficult and profit has suffered due to the necessity to generate cash. We are
currently implementing a stock reduction programme which, it is intended, will fund the transition to products that will be perceived as
offering increased value for money.
In the current environment the directors continue to review all options and will provide an update when it is deemed appropriate.
CONSOLIDATED INCOME STATEMENT
For the six months ended 30 August 2008
Six months ended Year ended
30 August 25 August 2007 1 March
2008 2008
�000 �000 �000
(Unaudited) (Unaudited - (Audited)
restated)
REVENUE 8,933 9,886 19,918
Cost of sales (4,695) (5,023) (10,150)
GROSS PROFIT 4,238 4,863 9,768
Distribution costs (4,139) (3,962) (7,820)
Administrative expenses (893) (878) (1,791)
GROUP OPERATING PROFIT (794) 23 157
Finance revenue - 1 2
Finance costs (61) (50) (139)
(LOSS)/PROFIT BEFORE TAXATION (855) (26) 20
Taxation - - (165)
LOSS FOR THE PERIOD
ATTRIBUTABLE TO EQUITY
SHAREHOLDERS (855) (26) (145)
EARNINGS PER SHARE
- Basic and diluted (3.94)p (0.12)p (0.67)p
CONSOLIDATED BALANCE SHEET
At 30 August 2008
30 August 2008 25 August 2007 1 March 2008
�000 �000 �000
(Unaudited) (Unaudited - restated) (Audited)
ASSETS
NON-CURRENT ASSETS
Intangible assets 3,731 3,908 3,731
Property, plant and equipment 1,808 1,235 1,299
Deferred tax - 150 -
5,539 5,293 5,030
CURRENT ASSETS
Inventories 4,035 4,355 4,182
Trade and other receivables 378 483 1,276
4,413 4,838 5,458
LIABILITIES
CURRENT LIABILITIES
Trade and other payables (3,233) (3,196) (2,946)
Financial liability (585) (432) (901)
Provisions for liabilities and (130) (208) (162)
charges
Corporation tax (15) - (15)
(3,963) (3,836) (4,024)
NET CURRENT ASSETS 450 1,002 1,434
NON CURRENT LIABILITIES
Convertible loan notes (1,395) (1,548) (1,353)
Provision for liabilities and (784) (821) (794)
charges
Accruals and deferred income (1,128) (270) (780)
(3,307) (2,639) (2,927)
NET ASSETS 2,682 3,656 3,537
SHAREHOLDERS' EQUITY
Called up share capital 108 108 108
Share premium account 3,688 3,688 3,688
Shares to be issued 21 25 21
Profit and loss account (1,135) (165) (280)
SHAREHOLDERS' EQUITY 2,682 3,656 3,537
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
For the six months ended 30 August 2008
Attributable to equity holders of the parent company
Called up share Share premium Shares to be issued Retained earnings Equity
capital account
�000 �000 �000 �000 �000
Balance at 24 February 2007 108 3,688 25 (139) 3,682
Loss for the financial period - - - (26) (26)
Balance at 27 August 2007 108 3,688 25 (165) 3,656
Loss for the financial period - - - (119) (119)
Reserves transfer - - (4) 4 -
Balance at 1 March 2008 108 3,688 21 (280) 3,537
Loss for the financial period - - - (855) (855)
Balance at 30 August 2008 108 3,688 21 (1,135) 2,682
CONSOLIDATED CASH FLOW STATEMENT
For the six months ended 30 August 2008
Six months ended Year ended
30 August 2008 25 August 2007 1 March 2008
�000 �000 �000
(Unaudited) (Unaudited - (Audited)
restated)
CASH FLOWS FROM OPERATING
ACTIVITIES
Operating profit (794) 23 157
Adjusted for:
Depreciation 121 121 286
Goodwill impairment - - 177
Loss/(profit) on disposal of 20 16 (44)
property, plant and
equipment
(653) 160 576
CHANGES IN WORKING CAPITAL
Decrease/(increase) in 147 (86) 87
inventories
Decrease/(increase) in trade 898 397 (398)
and other receivables
Increase/(decrease) in trade 287 (920) (1,208)
and other payables
Increase/(decrease) in (42) (143) (215)
provisions
Increase/(decrease) in 390 270 780
accruals and deferred income
CASH GENERATED FROM OPERATIONS 1,027 (322) (378)
Finance costs (61) (50) (68)
NET CASH FROM OPERATING 966 (372) (446)
ACTIVITIES
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchase of property, plant (650) (255) (426)
and equipment
Finance revenue - 1 2
NET CASH USED IN INVESTING (650) (254) (424)
ACTIVITIES
CASH FLOWS FROM FINANCING
ACTIVITIES
Repayment of convertible debt - - (225)
NET CASH USED IN FINANCING - - (225)
ACTIVITIES
NET INCREASE/(DECREASE) IN
CASH, CASH EQUIVALENTS AND 316 (626) (1,095)
FINANCIAL LIABILITY
Cash, cash equivalents and
bank overdrafts at beginning (901) 194 194
of period
CASH, CASH EQUIVALENTS AND
BANK/OVERDRAFTS AT END OF THE (585) (432) (901)
PERIOD
NOTES TO THE FINANCIAL STATEMENTS
For the six months ended 30 August 2008
1. The interim results are unaudited and do not comprise full financial statements within the meaning of Section 240 of the Companies
Act 1985. The results for the year ended 1 March 2008 have been extracted from the published financial statements. These were audited and
reported upon without qualification by Baker Tilly UK Audit LLP, did not contain a statement under Section 237(2) or (3) of the Companies
Act 1985 but did contain a statement under Section 235(2)(2A)(b) of the Companies Act 1985 as replicated below.
EMPHASIS OF MATTER - GOING CONCERN
In forming our opinion which is not qualified, we have considered the adequacy of the disclosures made on page 21 of the financial
statements concerning the directors confidence in the Company and Group's ability to continue as a going concern. The matters explained on
page 21 indicate the existence of a material uncertainty which may cast significant doubt about this ability. The financial statements do
not include the adjustment which would result if the company was unable to continue as a going concern.
2. Earnings per share has been calculated on the 21,696,713 shares in issue.
3. Copies of the interim report will be sent to shareholders on 28 November 2008 and will also be available from the Company's website
at www.strategicretail.co.uk
For further information, please contact:
Ian Currie, Strategic Retail plc Tel: 0161 831 1512
David Youngman, WH Ireland Limited Tel: 0161 832 2174
This information is provided by RNS
The company news service from the London Stock Exchange
END
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