RNS Number : 1945H
Stylo PLC
31 October 2008
31 October 2008
UNAUDITED INTERIM RESULTS OF STYLO PLC FOR THE
26 WEEKS ENDED 2 AUGUST 2008
SUMMARY
The Board of Stylo plc, the footwear retailer, today announces its unaudited interim results for the 26 week period ended 2 August 2008.
The highlights of the results for the period compared with the equivalent period in 2007 are:
* Loss for the period of �9.3m (2007: loss of �7.5m).
* Total revenue of �105.7m (2007: �100.0m), an increase of 5.7%, representing a 3.22% decrease in like for like sales.
* Basic loss per share of 29.73 pence (2007: basic loss per share of 24.00 pence).
* Net assets of �25.2m represent 72.9 pence per share (2007: �37.9m and 109.7 pence per share).
* Net debt at the end of the period of �45.8m (2007: �42.2m).
* As in previous years, no interim dividend is declared (2007: �nil).
Michael A Ziff, Chairman and Chief Executive, commented:
"The loss for the period is a reflection of the exceptionally difficult retail and economic climate in which we operate. We have taken a
number of positive actions as part of our strategic recovery plan to return the business to profitability, including an aggressive cost
reduction programme, the benefits of which will be seen in future periods."
For Further Information
Stylo plc 01274 617 761
Michael Ziff
Arbuthnot Securities Limited 020 7012 2000
Katie Shelton / Richard Tulloch
31 October 2008
To the Shareholders
Dear Shareholder,
CHAIRMAN'S INTERIM STATEMENT
The results for the six months ended 2 August 2008 reflect a loss of �9.3m after tax compared with a loss of �7.5m for the corresponding
period last year.
These results are a reflection of the difficult economic and retail climate in which we are currently operating and, whilst revenue
increased by �5.7m over the equivalent period last year reflecting the effect of the new Bay Trading concessions and sales of Dolcis product
through temporary stores, like for like sales decreased by 3.22% as a result of both a poor summer that affected sales of summer seasonal
product and the economic environment.
The retail environment has led to significant change in the footwear market in the six month period. At the start of the year, Dolcis
and Stead & Simpson both went into administration, and latterly Faith has followed them. We benefited from these changes by getting the
opportunity to run the Bay Trading concessions as well as acquiring Dolcis stock and the Dolcis brand name, which we are now introducing
into our Barratts stores.
Branch costs, including rent, rates and wages, continued to increase faster than the levels of turnover and margin. Distribution costs
are �0.7m higher than the equivalent period last year reflecting increased fuel costs and the additional volumes resulting from the Bay
Trading concession growth and the sale of Dolcis stock. Administration costs have increased by �0.7m due to the costs of our new EPOS system
and redundancy and turnaround costs.
Other operating income of �1.2m principally reflects the �1.0m proceeds, net of costs, on the disposal of the Shellys brand. This brings
to a close the losses experienced on this business since its acquisition in April 2003. Net finance expense of �2.0m is slightly higher
than the same period last year, principally as a result of higher average overdraft balances, and the tax credit of �0.4m arises from
deferred tax arising on property disposals in the period. As part of our focus on cash flow management we disposed of our freehold interest
in Ipswich for �2.4m in May 2008 and have, since the period end, exchanged contracts to dispose of our freehold interest in Chester for a
sum of �3.0m, which has led to an impairment charge of �0.5m to the income statement in the first half.
Our focus on cash flow management during the period has enabled us to minimise the impact of the difficult trading conditions on our net
debt position which stood at �45.8m as at 2 August 2008. This will improve following the completion of the disposal of Chester, expected
during November 2008, which will result in restricted cash held for re-investment in further freehold properties increasing to �10.7m from
�7.7m as at 2 August 2008. During the period our banks have remained supportive of our plans and progress, and we secured both an extension
to our facilities through to May 2009 and an increase of �1.5m in the level of those facilities.
Future Prospects
The Board are conscious of a number of material uncertainties surrounding future performance, which are driven by the state of the UK
economy and the prospect for a prolonged period of reduced consumer spending. The economic circumstances can be considered somewhat extreme
but these are the conditions in which we are operating. As such it is harder than usual to assess the impact of these conditions on our
plans but the Board have taken mitigating actions to address the potential for reduced sales below current expectations and which
concentrate on reducing the cost base through effective working capital management.
We have been working on implementing our strategic recovery programme and have taken a number of actions to return the business to
profitability. Such actions include: an aggressive cost reduction programme; exiting the Shellys loss-making business; strengthening the
Barratts management team; critically reviewing our product ranges; focusing on the presentation of our stores; trialling a re-branded
Barratts look; closing loss making stores; increasing the focus on our concessions business; investing in transactional websites; reducing
headcount levels; closing surplus warehouse space and reducing stock levels. Actions to increase efficiencies across the business will
continue in the second half of the year, which will result in additional costs in the short term, such as redundancies and restructuring
costs, but will be for the longer-term benefit of the business.
Market conditions in the economy generally are perhaps harder than I have known them to be and certainly difficult to predict with some
weeks showing positive signs and other weeks being particularly difficult. However, trading was strong in our children's range during the
back to school period and I am encouraged by the early sales of boots, which appear to indicate being on trend for the autumn and winter
period. We will continue to manage our stocks tightly to reduce mark-downs, and are continuing to work closely with our supply base through
these challenging times, particularly in a market with fewer shoe retailers.
Colleagues
I am delighted to welcome Terry Bond to the Board as a non-executive director with effect from 7 July 2008. Terry's experience in
Corporate Banking, including working for Barclays Bank, will bring an additional dimension to the Board in the current difficult trading
environment, and his experience will be invaluable to the development of our on-going strategy.
In addition Ian Gray, who has undertaken a number of global CEO and Chairman roles spanning a variety of industry sectors and PLC and
private businesses, has given us invaluable input into our strategic recovery plan. Richard Wharton, a well respected member of the shoe
retail industry being the co-founder and creator of renowned high street fashion footwear chain "Office" and its other fascias Qube,
Offspring, Poste and Poste Mistress, has been assisting us with product development and the Barratts re-brand.
I am grateful, as ever, to the staff for their continued support and commitment to the business and I am confident of their support as
we steer the business through the difficult times ahead.
MICHAEL ZIFF
Chairman and Chief Executive
CONSOLIDATED INCOME STATEMENT (Unaudited)
for the 26 weeks ended 2 August 2008
26 weeks ended 26 weeks ended 52 weeks ended
2 August 2008 4 August 2007 2 February 2008
�'000 �'000 �'000
Revenue 105,657 99,970 223,279
Cost of sales
- Other cost of sales (102,154) (96,629) (207,438)
- Property impairment (518) - (4,750)
(102,672) (96,629) (212,188)
Gross profit 2,985 3,341 11,091
Distribution costs (4,404) (3,741) (7,911)
Administrative expenses (7,368) (6,666) (13,758)
Other operating income 1,187 1,428 1,438
Other operating expenses (112) - -
Operating loss (7,712) (5,638) (9,140)
Finance income 1,630 1,524 3,367
Finance expense (3,614) (3,358) (6,775)
Loss before taxation (9,696) (7,472) (12,548)
Taxation 440 - 2,286
Loss for the period (9,256) (7,472) (10,262)
attributable to equity holders
of the parent
Basic loss per share (pence) (29.73) (24.00) (32.96)
Diluted loss per share (pence) (29.73) (24.00) (32.96)
CONSOLIDATED BALANCE SHEET (Unaudited)
as at 2 August 2008
As at As at As at
2 August 4 August 2 February
2008 2007 2008
�000 �000 �000
Non-current assets
Property, plant & equipment 70,250 80,866 71,621
Investment properties 7,109 6,114 13,023
77,359 86,980 84,644
Current assets
Inventories 26,817 29,617 21,047
Trade and other receivables 13,678 13,072 14,056
Cash and cash equivalents 8,200 6,008 5,933
Assets held for sale 4,360 3,003 594
53,055 51,700 41,630
Total assets 130,414 138,680 126,274
Current liabilities
Short term borrowings 20,603 13,757 10,578
Trade and other payables 42,482 41,027 38,348
Current tax payable 41 - 40
Other financial liabilities 19 10 16
63,145 54,794 48,982
Non-current liabilities
Long term borrowings 30,000 31,000 30,000
Deferred taxation 8,709 11,516 9,209
Other financial liabilities 3,355 3,437 3,366
42,064 45,953 42,575
Total liabilities 105,209 100,747 91,557
Net assets 25,205 37,933 34,717
Capital and reserves
attributable
to equity holders of the
parent
Called up share capital 692 692 692
Share premium account 41 41 41
Capital redemption reserve 174 174 174
Retained earnings 24,298 37,026 33,810
Total equity 25,205 37,933 34,717
CONSOLIDATED CASH FLOW STATEMENT (Unaudited)
as at 2 August 2008
26 weeks ended 26 weeks ended 52 weeks ended
2 August 2008 4 August 2007 2 February 2008
�000 �000 �000
Cash flows from operating activities
Loss for the period (9,696) (7,472) (12,548)
Adjustments for:
- Depreciation 3,109 3,233 6,638
- Impairment of property 518 - 4,750
- Profit on disposal of Shellys and property, (1,187) - -
plant & equipment
- Net finance costs 1,984 1,834 3,408
- Difference between pension charge and cash - (134) (134)
contributions
Changes in working capital:
- Inventories (5,770) (7,433) 1,137
- Trade and other receivables 378 131 (853)
- Trade and other payables 4,134 7,141 4,532
Interest paid (2,350) (2,222) (4,499)
Taxation paid (59) (65) (46)
Net cash absorbed from operating activities (8,939) (4,987) 2,385
Cash flows from investing activities
Purchases of property, plant & equipment (2,297) (2,761) (6,241)
Proceeds from sale of property, plant & 2,367 - -
equipment
Proceeds from sale of Shellys 1,009 - -
Interest received 208 87 459
Net cash flows from investing activities 1,287 (2,674) (5,782)
Cash flows from financing activities
Repayments of borrowings - - (1,100)
Finance lease cash flows (106) (166) (326)
Net cash flows from financing activities (106) (166) (1,426)
Net decrease in cash and cash equivalents (7,758) (7,827) (4,823)
Cash and cash equivalents at beginning of period (3,645) 1,178 1,178
Cash and cash equivalents at end of period (11,403) (6,649) (3,645)
STATEMENT OF RECOGNISED INCOME AND EXPENSE
26 weeks ended 26 weeks ended 52 weeks ended
2 August 2008 4 August 2007 2 February 2008
�000 �000 �000
Actuarial loss on pension (256) (536) (962)
scheme
Net charge recognised directly (256) (536) (962)
in equity
Loss for the period (9,256) (7,472) (10,262)
Total recognised losses (9,512) (8,008) (11,224)
attributable to equity holders
of the parent for the period
NOTES
1 Basis of preparation of the interim financial statements
The AIM Rules for Companies require that the annual consolidated financial statements of the company for the 52 week period ending 31
January 2009 be prepared in accordance with International Financial Reporting Standards adopted for use in the EU ("IFRS"). Consequently
this half year financial statement has been prepared on a consistent basis in accordance with the accounting policies adopted in the
accounts for the year ended 2 February 2008 and on the basis of the recognition and measurement requirements of IFRS in issue that are
either endorsed by the EU and effective (or available for early adoption) at 2 August 2008 and hence on the basis of IFRS that are expected
to apply in preparation of the accounts for the year ending 31 January 2009.
The Group's main bank facilities are in place through to mid-May 2009. The Board has prepared forecasts which have taken into account
the following uncertainties:
* The impact on the Group's financial performance arising from the current UK economic conditions and associated consumer spending;
* The importance of the Christmas and January sales trading season;
* The increased pressure on working capital as suppliers feel the impact of the deteriorating economy and the failure of
competitors.
The resultant forecasts rely on the availability of continuing bank support. Based on discussions with the Group's banks, and having
regard to the present intentions of the banks, the Directors are confident that facilities will be available after mid-May 2009 at a level
which is sufficient to support the Group's plans. Having taken these uncertainties into account, together with the plans in place to manage
cashflow, the Directors believe it is appropriate to prepare the accounts on a going concern basis, as they believe the Group can operate
within its existing funding resources. Accordingly, the interim financial information does not include the adjustments that would result
should the going concern basis prove to be inappropriate.
The preparation of the half year financial statements requires management to make judgements, estimates and assumptions that affect the
application of policies and reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates.
These half year financial statements have been prepared under the historical cost convention except for derivative financial instruments
carried at fair value and items of property, plant and equipment measured at fair value at the date of transition and treated as deemed
cost.
This half year statement is unaudited. The financial information for the 52 weeks ended 2 February 2008 is not the statutory accounts
for that year but has been extracted from the Group's Annual Report and Accounts for that year, which has been delivered to the Registrar of
Companies. The auditors' report on those accounts was unqualified, did not include references to any matters to which the auditors drew
attention by way of emphasis without qualifying their report and did not contain a statement under Section 237(2)-(3) of the Companies Act
1985.
2 Other operating income
Other operating income comprises the net profit on disposal of the Shellys brand of �1,009,000 and the profit on disposal of property
plant and equipment of �178,000. Other operating income for the 26 weeks ended 4 August 2007 of �1,428,000 comprised the profit on receipt
of lease premiums, net of costs, arising on the early surrender of leasehold properties.
3 Other operating expenses
Other operating expenses of �112,000 comprises the payment of lease premiums, net of costs, arising on the early surrender of short
leasehold properties during the period.
4 Loss per share
The calculation of basic loss per share is calculated by reference to the weighted average number of ordinary shares in issue during the
period of 31,136,000 (4 August 2007 31,136,000 and 2 February 2008 31,136,000). The calculation of diluted loss per share is calculated by
reference to 31,150,000 weighted average number of shares (4 August 2007 31,201,000 and 2 February 2008 31,177,000).
The basic and diluted loss per share are the same at 2 August 2008, 4 August 2007 and 2 February 2008 as a loss has been incurred and,
therefore, all potentially diluted shares are deemed to be non-dilutive.
5 Analysis of net debt
26 weeks ended 26 weeks ended 52 weeks ended
2 August 2008 4 August 2007 2 February 2008
�000 �000 �000
Cash at bank and in hand 502 592 361
Bank overdrafts (19,603) (12,657) (9,578)
Restricted cash 7,698 5,416 5,572
Cash and cash equivalents (11,403) (6,649) (3,645)
Bank loans
- Debt due within one year (1,000) (1,100) (1,000)
- Debt due after one year (30,000) (31,000) (30,000)
Finance leases
- Due within one year (19) (10) (16)
- Due after one year (3,355) (3,437) (3,366)
Net debt (45,777) (42,196) (38,027)
6 Reconciliation of net cash flow movement to movement in net debt
26 weeks ended 26 weeks ended 52 weeks ended
2 August 2008 4 August 2007 2 February 2008
�000 �000
�000
Decrease in cash and cash (7,758) (7,827) (4,823)
equivalents
Decrease in bank loans - - 1,100
Increase in finance lease 8 65 130
liabilities
Change in net debt from cash (7,750) (7,762) (3,593)
flows
Net debt at beginning of (38,027) (34,434) (34,434)
period
Net debt at end of period (45,777) (42,196) (38,027)
7 Reconciliation of movement in equity
As at As at As at
2 August 2008 4 August 2007 2 February 2008
�000 �000 �000
At beginning of period 34,717 45,941 45,941
Loss for the financial period (9,256) (7,472) (10,262)
Actuarial loss on pension (256) (536) (962)
scheme
At end of period 25,205 37,933 34,717
8 Interim Report 2008/09
The Interim Report 2008/09 was approved by the directors on 31 October 2008 and will be sent to those shareholders who have elected to
receive posted copies and not information in an electronic format, during November 2008. A copy can be obtained by the public from the
Company Secretary, Stylo plc, Stylo House, Harrogate Road, Apperley Bridge, Bradford, West Yorkshire BD10 ONW and is also available on the
company's website, www.stylo.co.uk.
INDEPENDENT REVIEW REPORT TO STYLO PLC
Introduction
We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the 26
weeks ended 2 August 2008 which comprises the consolidated income statement, consolidated balance sheet, consolidated cash flow statement
and statement of recognised income and expense.
We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in the condensed set of financial statements.
Directors' responsibilities
The interim report, including the financial information contained therein, is the responsibility of and has been approved by the
directors. The directors are responsible for preparing the interim report in accordance with the rules of the London Stock Exchange for
companies trading securities on the Alternative Investment Market which require that the half-yearly report be presented and prepared in a
form consistent with that which will be adopted in the company's annual accounts having regard to the accounting standards applicable to
such annual accounts.
Our responsibility
Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly financial
report based on our review.
Our report has been prepared in accordance with the terms of our engagement to assist the company in meeting the requirements of the
rules of the London Stock Exchange for companies trading securities on the Alternative Investment Market and for no other purpose. No person
is entitled to rely on this report unless such a person is a person entitled to rely upon this report by virtue of and for the purpose of
our terms of engagement or has been expressly authorised to do so by our prior written consent. Save as above, we do not accept
responsibility for this report to any other person or for any other purpose and we hereby expressly disclaim any and all such liability.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, ''Review of Interim
Financial Information Performed by the Independent Auditor of the Entity'', issued by the Auditing Practices Board for use in the United
Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the
half-yearly financial report for the 26 weeks ended 2 August 2008 is not prepared, in all material respects, in accordance with the rules of
the London Stock Exchange for companies trading securities on the Alternative Investment Market.
BDO Stoy Hayward LLP
Chartered Accountants and Registered Auditors
1 Bridgewater Place
Water Lane
Leeds LS11 5RU
31 October 2008
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR ILFFEISLLVIT
Stylo (LSE:STYL)
Historical Stock Chart
From Dec 2024 to Jan 2025
Stylo (LSE:STYL)
Historical Stock Chart
From Jan 2024 to Jan 2025
