Interim Results
28 Febrero 2003 - 8:22AM
UK Regulatory
RNS Number:1402I
FII Group PLC
28 February 2003
28 February 2003
FII GROUP PLC
Interim Results for the six months to 30 November 2002
Fii Group Plc announces its interim results for the six months to 30 November
2002.
Highlights:
* Lotus and Frank Wright shoes outsourcing with overseas manufacturers
should lead to an improvement in gross margins going forward.
* Company in discussions with the pension trustee to resolve the pension
fund deficit
* Successful sale of Banbridge site for a total sum of #2.325 million
completed in H2
For further information please contact:
Fii Group
Doug Ware Tel 01604 593600
Gavin Anderson & Co.
Liz Morley Tel +44 (0) 207 554 1400
FII GROUP PLC
CHAIRMANS STATEMENT
Introduction
The results for the period to 30 November 2002 were, as shareholders are aware,
dominated by the decision to close our last UK manufacturing facility at
Banbridge in Northern Ireland. Full details of this closure and the associated
disposal of the site to fund the redundancy payments were contained in the
circular sent to shareholders on 12 February 2003. I would like, once again, to
extend your Board's expressions of thanks to the employees at Banbridge.
Operational Review
In the six months to 30 November 2002, turnover of #7,951,000 represented a
reduction of 12.9% with the comparable period last year. However, the two
branded labels, Lotus and Frank Wright, both managed to increase their turnover
by 6.3% and 1.3% respectively by concentrating on their core business and
increasing sales with major customers.
The reduction in turnover is primarily due to the Private Label business in
Banbridge losing one of its principal customers, who moved their contract to
overseas sources. Despite management's efforts to replace this business, the
Banbridge manufactured product was unable to compete directly with cheaper
imported footwear being offered, resulting in unbearable pricing demands that
could not be matched. These events led to a review of the manufacturing
operation and resulted in the Board's decision to close the facility. A further
adverse affect on turnover was as a consequence of the decision to withdraw from
an unprofitable men's branded distribution and marketing arrangement.
As stated in the circular to shareholders dated 12 February 2003, your Board is
confident that we have the ability to source suitable quality footwear at lower
unit prices from overseas, which will lead to improved gross margins for both
Lotus and Frank Wright.
Within the figures for 30 November 2002 full account has been taken of costs
associated with the closure of Banbridge, however, under accounting convention,
no recognition of the accounting profit on disposal of the site of #1.279
million can be taken until the disposal has been completed. The profit will
therefore be recognised in the full year accounts to 31 May 2003.
The Board do not recommend the payment of an interim dividend.
Pension Fund
The triennial actuarial valuation of the fund as at 31 May 2002 is awaited. It
is to be expected that, even following the recent relaxation of minimum funding
requirements valuation rules, a significant deficit will be reported. However,
this significant deficit cannot be ignored and, as indicated in the May 2002
annual report and in subsequent announcements, the Company has re-opened
discussions with the trustee of the pension fund. We continue to seek to
negotiate a final settlement with the trustee and are optimistic of a successful
outcome to these negotiations. However should no agreement be reached the
Company would not be able to meet this liability; in this respect I would draw
attention to the fundamental uncertainty statement set out in note 1 to this
interim report.
Additional pension fund costs totalling #0.348 million were incurred during the
six months to November 2002, being half the annual contribution of #0.475
million in respect of the pension fund deficit reported in May 1999 together
with #0.111 million in respect of legal & professional fees paid on behalf of
the scheme.
Subsequent Events
On 7 January 2003 the Group sold part of its Banbridge site for a consideration
of #0.275 million. Subsequently the Group reached agreement on 24 January 2003
to sell the remaining part of the Banbridge site for a consideration of #2.050
million to Stoney Properties Limited subject to the approval of shareholders at
an Extraordinary General Meeting to be held on 28 February.
28 February 2003
UNAUDITED GROUP PROFIT AND LOSS ACCOUNT
FOR THE SIX MONTHS ENDED 30 NOVEMBER 2002
As restated
Six months Six months Year
ended ended ended
30.11.02 30.11.01 31.5.02
Notes #000 #000 #000
Turnover - continuing 7,951 9,127 17,482
Operating loss before operating exceptional items (501) (98) (405)
Operating exceptional items 2 (75) (175) (155)
Operating loss - continuing (576) (273) (560)
Non-operating exceptional items 2
Loss on closure of manufacturing operation (1,697) - -
Profit on disposal of fixed assets - 73 -
Loss before interest and taxation (2,273) (200) (560)
Net Interest payable (53) (41) (130)
Loss before taxation (2,326) (241) (690)
Taxation 3 - 20 21
Loss after taxation (2,326) (221) (669)
Dividends - - -
Amount transferred from reserves (2,326) (221) (669)
Loss per share 4 (10.0)p (1.0)p (2.9)p
Loss per share before exceptional items 4 (2.4)p (0.5)p (2.2)p
Loss per share fully diluted 4 (10.0)p (1.0)p (2.9)p
Dividends per 25p Ordinary Share nil p nil p nil p
The November 2001 comparative figures for operating loss, operating exceptionals
& loss per share before exceptional items have been restated in respect of the
additional pension fund contributions and pension scheme administration costs.
There are no recognised gains or losses other than those reported in the profit
and loss account
UNAUDITED GROUP BALANCE SHEET
AS AT 30 NOVEMBER 2002
As restated
At 30.11.02 At 30.11.01 At 31.5.02
#000 #000 #000
Tangible fixed assets 1,342 1,446 1,388
Investments - - -
1,342 1,446 1,388
Current assets
Stocks 2,014 2,702 2,545
Debtors 3,707 4,168 2,910
Cash at bank 22 58 211
5,743 6,928 5,666
Creditors - amounts falling due within one year 5,565 3,648 3,318
Net current assets 178 3,280 2,348
Total assets less current liabilities 1,520 4,726 3,736
Creditors - amounts falling due after more than one year 17 264 28
Provisions for liabilities and charges 130 315 9
Net assets 1,373 4,147 3,699
Capital and reserves
Called up share capital 5,798 5,798 5,798
Reserves (4,425) (1,651) (2,099)
Shareholders' funds 1,373 4,147 3,699
Reconciliation of shareholders' funds
Balance at the beginning of the period 3,699 4,368 4,368
Loss for the period (2,326) (221) (669)
Balance at the end of the period 1,373 4,147 3,699
The November 2001 comparative figures for debtors & creditors - amounts due
within one year have been restated in respect of the amount owed under the
Group's invoice discounting facility.
UNAUDITED CONSOLIDATED CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 30 NOVEMBER 2002
As restated
Six months Six months Year
ended ended ended
30.11.02 30.11.01 31.5.02
Notes #000 #000 #000
Net cash outflow from operating activities 5 (767) (497) (747)
Costs on servicing of finance (40) (34) (134)
Taxation - 20 21
Capital expenditure and financial investment 58 75 29
Net cash from acquisitions and disposals - 35 253
Financing 560 262 592
(Decrease)/increase in cash (189) (139) 14
Reconciliation of net cash flow to movement in net debt
As
restated
Six Six
months months Year
ended ended ended
30.11.02 30.11.01 31.5.02
#000 #000 #000
(Decrease)/increase in cash for the period (189) (139) 14
Additional finance leases - - (28)
Cash movement from increase in debt and lease financing (560) (262) (592)
Change in net debt (749) (401) (606)
Net debt at beginning of the period (625) (19) (19)
Net debt at end of the period (1,374) (420) (625)
The November 2001 comparative figures for net cash outflow from operating
activities, financing, cash movement from increase in debt and lease financing
and change in net debt have been restated in respect of the amount borrowed
under the Group's invoice discounting facility.
Notes to the accounts
FOR THE SIX MONTHS ENDED 30 NOVEMBER 2002
1. Fundamental uncertainty
The last formal valuation of the Fii defined benefit occupational benefit
pension scheme was undertaken as at 31 May 1999. On the basis of this valuation
the Group agreed to increase its contributions to an annual amount of #475,000
for the five years commencing 1 June 1999 in addition to regular contributions
to the scheme. The triennial valuation as at 31 May 2002 is awaited and it is
expected that, even following the recent relaxation of MFR valuation rules, a
significant deficit will be reported. In accordance with the principal in the
recent "Bradstock" case the Group is in discussion with the trustees of the
pension scheme with a view to agreeing a compromise settlement and the Directors
are confident that an appropriate compromise will be reached.
The financial information has been prepared on a going concern basis which
assumes that the compromise discussions referred to above are successful. If
this assumption proves invalid the preparation of the financial information on a
going concern basis may no longer prove to be appropriate at a future date in
which case adjustments would have to be made to reduce the balance sheet values
of assets to their recoverable amounts and to provide for further liabilities
that might arise and to reclassify fixed assets and long term liabilities as
current assets and liabilities.
2. Exceptional items arising comprise of the following:
As restated
2002 2001 2002
six months six months full year
ended ended ended
30.11.02 30.11.01 31.5.02
#000's #000's #000's
Operating exceptional items
Reorganisation & restructuring of ongoing business 75 175 427
and writedown of certain assets
Capital grant credit relating to fixed asset - - (272)
impairment
75 175 155
Non-operating exceptional items
Loss on closure of manufacturing operation 1,697 - -
Profit on disposal of fixed assets - (73) -
1,697 (73) -
1,772 102 155
The November 2001 comparative figure for operating exceptional items has been
restated in respect of additional pension fund contributions and pension scheme
administration costs.
3. Due to the availability of unrelieved tax losses, no tax credit has been
recognised in the accounts of the Group at the Balance Sheet date.
4. Earnings per 25p ordinary share are calculated on the average number of
shares in issue of 23,191,679 (2001: half year - 23,191,679, 2002: full year -
23,191,679).
5. Reconciliation of operating loss to net cash outflow from operating activities
As restated
Six months Six months Year
ended ended ended
30.11.02 30.11.01 31.5.02
#000 #000 #000
Operating loss (576) (273) (560)
Exceptional items 75 175 155
Operating loss before exceptional items (501) (98) (405)
Depreciation and amortisation charge 50 79 138
Amortisation of Government grants - (31) (61)
Profit on sale of tangible fixed assets (62) (14) (93)
Profit on trade disposal - - (10)
Cash flow relating to exceptional items (312) (384) (492)
Decrease in stocks 531 575 732
(Increase)/decrease in debtors (797) 92 905
Increase/(decrease) in creditors 324 (716) (1,461)
Net cash outflow from operating activities (767) (497) (747)
The November 2001 comparative figures for exceptional items and cash flow
relating to exceptional items have been restated in respect of additional
pension fund contributions and pension scheme administration costs.
Additionally, the November 2001 figure for the (increase)/decrease in debtors
has been restated in respect of the amount borrowed under the Group's invoice
discounting facility.
6. The half year figures are unaudited. The abridged profit and loss account
for the year ended 31 May 2002 and the balance sheet at that date are extracts
from the latest statutory accounts, which have been delivered to the Registrar
of Companies; the report of the auditors on those accounts was unqualified.
The interim financial statements set out on pages 4 to 8 do not comprise
statutory accounts for the purpose of section 240 of the Companies Act 1985.
7. Copies of this Interim Report are sent to all shareholders; further copies
may be obtained from the Company's registered office at 19, Gambrel Road,
Northampton NN5 5DJ, telephone number 01604 593600
This information is provided by RNS
The company news service from the London Stock Exchange
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