TIDMAXD
RNS Number : 9143Z
Alexandra PLC
30 September 2009
PRESS RELEASE
For immediate release - 30 September 2009
Alexandra plc
Half yearly results for the six months ended 31 July 2009
Alexandra plc, one of Europe's leading suppliers of corporate clothing and
workwear, announces half yearly results for the six months ended 31 July 2009.
+-----------------------------+----------------+-------------+-------------+
| | Six months | Six months | Year ended |
| | ended | ended | 31 January |
| | 31 July 2009 | 31 July | 2009 |
| | | 2008 | |
+-----------------------------+----------------+-------------+-------------+
| Revenue (GBPm) | 32.3 | 38.9 | 74.7 |
+-----------------------------+----------------+-------------+-------------+
| Gross margin* % | 33.8 | 38.1 | 37.3 |
+-----------------------------+----------------+-------------+-------------+
| Operating profit* (GBPm) | 0.7 | 3.0 | 6.1 |
+-----------------------------+----------------+-------------+-------------+
| (Loss)/profit before tax* | (0.1) | 1.9 | 4.0 |
| (GBPm) | | | |
+-----------------------------+----------------+-------------+-------------+
| (Loss) / earnings per share | (28.6) | 4.1 | 5.0 |
| (p) | | | |
+-----------------------------+----------------+-------------+-------------+
| Dividend per share** (p) | - | 1.5 | 1.5 |
+-----------------------------+----------------+-------------+-------------+
| Net debt (GBPm) | 26.5 | 26.1 | 25.5 |
+-----------------------------+----------------+-------------+-------------+
*pre exceptional items
** dividends declared in respect of the period
+-----+------------------------------------------------------------------------+
| - | Revenue down 17% in difficult trading conditions |
| | |
+-----+------------------------------------------------------------------------+
| - | Gross margin of 33.8% in the period, down from last year (38.1%) |
| | |
+-----+------------------------------------------------------------------------+
| - | New management team in place by half year |
| | |
+-----+------------------------------------------------------------------------+
| - | GBP5m of new contract wins in the half |
| | |
+-----+------------------------------------------------------------------------+
| - | Restructuring/reorganisation underway with the help of a major firm of |
| | consultants to improve efficiency and productivity |
| | |
+-----+------------------------------------------------------------------------+
| - | Business being redirected to a focused service offering so action |
| | being taken to reduce inventory levels - write downs of approximately |
| | GBP9m in the period |
| | |
+-----+------------------------------------------------------------------------+
| - | The Company and its bankers are in constructive discussions regarding |
| | revised terms for the group's principal loans. |
| | |
+-----+------------------------------------------------------------------------+
| - | No interim dividend proposed |
| | |
+-----+------------------------------------------------------------------------+
Commenting on the results, Tim Gifford, Group Chief Executive said:
"The new management team have been aggressive in their evaluation of the current
state of the Company. This has resulted in the previously announced write down
of the value of stock of cGBP9m. I believe that it is most important to have
identified all the problem areas and to have dealt swiftly and decisively with
these areas of concern. The sale of redundant stock has been meticulously
planned and is now actively underway. We will obviously obtain the maximum
market value possible, with realisations expected of between GBP1m and GBP1.5m.
Given the magnitude of the write- down, our bankers clearly want to understand
our new strategy and the appropriateness of the current facilities and I can
confirm that the Directors have a reasonable expectation that the Group will
secure resources to allow it to continue with its programme of change."
For further information contact:
+-----------------------------+-----------------------+--------------------------+
| Tim Gifford, Chief | Alexandra plc | T: 01454 876003 |
| Executive | | |
+-----------------------------+-----------------------+--------------------------+
| | | |
+-----------------------------+-----------------------+--------------------------+
| Elaine New, Finance | Alexandra plc | T: 01454 876003 |
| Director | | |
+-----------------------------+-----------------------+--------------------------+
| | | |
+-----------------------------+-----------------------+--------------------------+
| Richard Day | Arden Partners | T: 020 7398 1600 |
+-----------------------------+-----------------------+--------------------------+
| | | |
+-----------------------------+-----------------------+--------------------------+
| Paul Vann | Winningtons Financial | T: 0117 920 0092 |
| | | M: 07768 807 631 |
+-----------------------------+-----------------------+--------------------------+
Notes to editors
The Alexandra Group is a service-focussed business that designs, procures and
distributes corporate clothing and workwear. Over 95% of garments are sourced
from overseas suppliers.
Bespoke corporate clothing now accounts for approximately 50% of turnover,
including a substantial amount delivered to accounts in mainland Europe.
Alexandra plc - Half yearly results for the six months ended 31 July 2009
Chief Executive's Statement
Financial performance
Overview
The Group has continued to feel the effects of the general economic malaise and
in the six months to 31 July 2009, turnover was down approximately 17% compared
to the same period last year, largely due to customers reducing and delaying
orders. In a very competitive environment margins have also come under some
pressure and the strength of the US dollar has further eroded gross profit.
Despite these difficult circumstances the Group still achieved an operating
profit of GBP0.7m for the period before exceptional items compared to GBP3m in
the first half of last year which had the benefit of a major corporate roll-out.
The Board is confident that there will be an improvement in activity levels in
the second half of the year which should go some way to replace the turnover
shortfall. Over GBP5 million of new contracts were won in the first half albeit
that the full benefit of new contracts will not be felt until the 2010/11
financial year. Customers have however delayed several roll-outs from the first
half which could now add to second-half performance but there may also be
further contract delays in the second half.
Following the arrival of the new senior management, the Company has embarked on
a restructuring of its business to focus on service delivery and streamlining
the balance sheet. External consultants continue to work with management to
accelerate the reorganisation of a number of the Group's operations to better
align them to the delivery of this focused service offering.
This planned reorganisation will enable a substantial reduction in the level of
inventory required. As a consequence, the results for the six months ended 31
July 2009 include a restructuring charge relating to a net inventory write-down
of redundant stock of nearly GBP9 million. Accelerated realisations from the
sale of this inventory are expected to generate cash of between GBP1m and
GBP1.5m, depending on negotiations yet to be concluded. This together with a
further write down of nearly GBP1.4m, in respect of a change in the estimation
of inventory values, has resulted in a one-off write down of inventories of
approximately GBP10m.
As at 31 July 2009 net debt was GBP0.4m higher than at the same point last year
and the Board expects net debt at the year end to be at a similar level to the
previous year end. The current level of gearing following the stock write-downs
has caused a breach of bank covenants which has led to a technical
reclassification of bank borrowings into current liabilities pending agreement
of revised terms for the Company's principal loans. After making full inquiries
and considering the uncertainties that exist the Directors have a reasonable
expectation that the Group will secure resources to allow the Group to continue
with its programme of change.
Taking into account the current difficult economic conditions and the fact
that the Company is undergoing a major restructuring, the Board regards the
Company's performance, whilst disappointing to be acceptable in the
circumstances. However the Board also believes that it needs to be prudent and
conserve cash by not proposing an interim dividend.
Income Statement
Revenue for the six months was GBP32.3m (2008: GBP38.9m). Several major
customers are delaying roll-outs or simply cutting back on their top-up
orders. Several customers were also lost during the period but this can be set
against the GBP5m of new contracts achieved.
Gross Margin for the first half of 33.8% was below last year (2008: 38.1%). The
movement in the US$ from $1.95: GBP1 (2008) to $1.55:GBP1 severely hit the cost
of sales despite the best hedging plans that were in place. Also several
suppliers increased their prices by up to 15% in the early part of the half
before the results of the 4 point plan could come into affect. The increased
costs of operating the Moroccan factory were worsened by the strengthening of
the Euro.
Overhead costs before exceptional items fell by 14.4% to GBP10.2m
(2008:GBP11.8m), mainly due to reducing headcount by 200 FTE's. Closure of the
French office and Corporate Apparel in Ireland at the end of last year plus full
integration of the Prima buying and merchandising/ product development
operations also added to the savings.
Finance charges fell by GBP0.3m in the period to GBP0.88m due to lower interest
rates netted off against an increase in the pension fund financing cost..
The loss before tax and exceptional items of GBP(0.1m) (2008: profit GBP1.86m)
resulted from the combined effect of lower sales and margin reduced overheads
and finance charges. The reduction in earnings per share to a loss of 28.6p
(2008: 4.1p) was limited due to a tax credit.
Balance Sheet
Net borrowings increased to GBP26.5m (2008: 26.1m) due to the traditional
seasonal profile caused by the payment of certain costs such as property rates
in the first half together with payments in relation to the termination of the
employment contracts of two directors.
Following the inventory write downs referred to above the value of inventories
was significantly lower at GBP29.1m (2008: GBP38.5m). Largely as a result of
this, gearing increased to 143% (2008: 92.6%). The Board has received strong
indications of interest from potential purchasers of the Group's surplus
property at Bothwell Park in Scotland and it is expected that a sale of this
property in the latter half of the 2010/11 financial year will contribute to a
significant reduction in gearing levels in that year.
The current level of gearing has caused a breach of bank covenants which has led
to a technical reclassification of bank borrowings into current liabilities
pending agreement of revised terms for the Company's principal loans.
Good progress has been made during the period in reducing trade receivables and
debtor weeks have fallen by around one week.
The defined benefit pension scheme gross deficit rose by 42% to GBP12.3m (2008:
GBP8.7m) due to the combined effects of a further reduction in the value of the
fund's assets caused by the general fall in equity prices and an increase in the
present value of defined obligations as a result of the assumption about
discount rates used in the actuarial calculations.
Dividend
The Board is not proposing an interim dividend (2008: 1.5 p) as it believes
current conditions dictate the need for prudent cash management.
Principal Risks and Uncertainties
The principal risks and uncertainties that could affect the Group have not
changed from those set out on pages 6 and 7 of the 2009 Annual Report and
Accounts, a copy of which can be obtained at www.alexandra.co.uk. The specific
risks and uncertainties that the Board believes are most pertinent to the
remainder of the financial year are discussed in more detail in the Market
Overview and Outlook section below.
Operational Overview
The new management intend to fundamentally change the way the Group manages its
operations. There will be a change in focus from product to service. In order to
make this transition a programme of transformation has been designed and is now
being implemented. The result will yield an organisation with a strong sales
focus supported by revitalised customer service and account management teams.
The recruitment of a Director of Operations should be completed by the end of
November and should enable the Group to take a more strategic approach to
buying, sourcing and sales and operational planning process.
Market Overview and Outlook
The UK market continues to be difficult and it is likely that there may be
further consolidation amongst the vendors serving this market. Prices have
stabilised and customer expectations on price are more realistic with an equal
emphasis on service and reliability. However, whilst there has undoubtedly been
a slowdown there are opportunities for the nimble and operationally competent to
prosper from current market conditions, customers starting to return to more
normal buying patterns and postponed projects coming back into focus.
Board Changes
As previously announced both Julian Budd and Ken Gibbs left the business on 31
May 2009. They were replaced by Tim Gifford as Chief Executive Officer who was
appointed to the Board on 1 July 2009 and Elaine New who was appointed Finance
Director on 1 June 2009.
Stuart Love was appointed to the Board on 1 July 2009 as Sales and Marketing
Director.
John Pierce joined the Board as a non-executive director on 10 August 2009 and
the Board is actively considering the appointment of an additional non-executive
director .
Tim Gifford
Chief Executive
29 September 2009
Statement of Directors' Responsibilities
The Directors confirm that to the best of their knowledge:
+------+-------------------------------------------------------------------------+
| (i) | the condensed set of financial statements has been prepared in |
| | accordance with IAS 34 as adopted by the European Union; |
+------+-------------------------------------------------------------------------+
| | |
+------+-------------------------------------------------------------------------+
| (ii) | the half yearly management report includes a fair review of the |
| | information required by DTR 4.2.7 (indication of important events |
| | during the first six months and description of principal risks and |
| | uncertainties for the remaining six months) and DTR 4.2.8 (disclosure |
| | of material related party transactions and changes therein). |
+------+-------------------------------------------------------------------------+
At the date of this statement, the Directors are as follows:
A E Watson
T P Gifford (appointed 1 July 2009)
E New
S Love (appointed 1 July 2009)
P M Rosser
J E Pierce (appointed 10 August 2009)
By order of the Board
+---------------------------------------+--------------------------------------+
| Tim P Gifford | Elaine New |
+---------------------------------------+--------------------------------------+
| Chief Executive | Finance Director |
+---------------------------------------+--------------------------------------+
| 29 September 2009 | 29 September 2009 |
+---------------------------------------+--------------------------------------+
+---------------------------------+-----------+-------------+-------------+-----------+------------+-------------+-------------+----------+
| Condensed consolidated income statement |
+-----------------------------------------------------------------------------------------------------------------------------------------+
| For the six months ended 31 | | | | | | | | |
| July 2009 | | | | | | | | |
+---------------------------------+-----------+-------------+-------------+-----------+------------+-------------+-------------+----------+
| | Note | Six months to 31/07/09 | Six | Year to 31/01/09 |
| | | | months | |
+---------------------------------+-----------+---------------------------------------+------------+--------------------------------------+
| | | Before | Exceptional | Total | to | Before | Exceptional | Total |
| | | exceptional | items | | 31/07/08 | exceptional | items | |
| | | | (Note 5) | | (Restated) | | (Note 5) | |
| | | items | | | Total | items | | |
+---------------------------------+-----------+-------------+-------------+-----------+------------+-------------+-------------+----------+
| | | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+---------------------------------+-----------+-------------+-------------+-----------+------------+-------------+-------------+----------+
| | | | | | | | | |
+---------------------------------+-----------+-------------+-------------+-----------+------------+-------------+-------------+----------+
| Revenue | | 32,296 | - | 32,296 | 38,899 | 74,721 | - | 74,721 |
+---------------------------------+-----------+-------------+-------------+-----------+------------+-------------+-------------+----------+
| Cost of sales | | (21,368) | (10,333) | (31,701) | (24,085) | (46,883) | (225) | (47,108) |
+---------------------------------+-----------+-------------+-------------+-----------+------------+-------------+-------------+----------+
| | | | | | | | | |
+---------------------------------+-----------+-------------+-------------+-----------+------------+-------------+-------------+----------+
| Gross profit | | 10,928 | (10,333) | 595 | 14,814 | 27,838 | (225) | 27,613 |
+---------------------------------+-----------+-------------+-------------+-----------+------------+-------------+-------------+----------+
| Distribution costs | | (1,710) | - | (1,710) | (1,772) | (3,281) | - | (3,281) |
+---------------------------------+-----------+-------------+-------------+-----------+------------+-------------+-------------+----------+
| Administration expenses | | (8,488) | (2,503) | (10,991) | (10,005) | (18,423) | (798) | (19,221) |
+---------------------------------+-----------+-------------+-------------+-----------+------------+-------------+-------------+----------+
| | | | | | | | | |
+---------------------------------+-----------+-------------+-------------+-----------+------------+-------------+-------------+----------+
| | | | | | | | | |
+---------------------------------+-----------+-------------+-------------+-----------+------------+-------------+-------------+----------+
| Operating profit/(Loss) from | | 730 | (12,836) | (12,106) | 3,037 | 6,134 | (1,023) | 5,111 |
| continuing operations | | | | | | | | |
+---------------------------------+-----------+-------------+-------------+-----------+------------+-------------+-------------+----------+
| Finance costs | 9 | (879) | - | (879) | (1,184) | (2,111) | - | (2,111) |
+---------------------------------+-----------+-------------+-------------+-----------+------------+-------------+-------------+----------+
| | | | | | | | | |
+---------------------------------+-----------+-------------+-------------+-----------+------------+-------------+-------------+----------+
| (Loss)/profit before taxation | | (149) | (12,836) | (12,985) | 1,853 | 4,023 | (1,023) | 3,000 |
+---------------------------------+-----------+-------------+-------------+-----------+------------+-------------+-------------+----------+
| Taxation | 6 | 37 | 3,427 | 3,464 | (487) | (838) | 289 | (549) |
+---------------------------------+-----------+-------------+-------------+-----------+------------+-------------+-------------+----------+
| | | | | | | | | |
+---------------------------------+-----------+-------------+-------------+-----------+------------+-------------+-------------+----------+
| | | | | | | | | |
+---------------------------------+-----------+-------------+-------------+-----------+------------+-------------+-------------+----------+
| (Loss)/profit from continuing | | (112) | (9,409) | (9,521) | 1,366 | 3,185 | (734) | 2,451 |
| operations | | | | | | | | |
| | | | | | | | | |
+---------------------------------+-----------+-------------+-------------+-----------+------------+-------------+-------------+----------+
| | | | | | | | | |
+---------------------------------+-----------+-------------+-------------+-----------+------------+-------------+-------------+----------+
| (Loss)/profit for the period on | | | | (48) | 3 | | | (776) |
| discontinued operations | | | | | | | | |
+---------------------------------+-----------+-------------+-------------+-----------+------------+-------------+-------------+----------+
| | | | | | | | | |
+---------------------------------+-----------+-------------+-------------+-----------+------------+-------------+-------------+----------+
| (Loss)/profit for the period | | | | (9,569) | 1,369 | | | 1,675 |
+---------------------------------+-----------+-------------+-------------+-----------+------------+-------------+-------------+----------+
| | | | | | | | | |
+---------------------------------+-----------+-------------+-------------+-----------+------------+-------------+-------------+----------+
| | | | | | | | | |
+---------------------------------+-----------+-------------+-------------+-----------+------------+-------------+-------------+----------+
| | | | | | | | | |
+---------------------------------+-----------+-------------+-------------+-----------+------------+-------------+-------------+----------+
| (Loss)/earnings per share | | | | | | | | |
+---------------------------------+-----------+-------------+-------------+-----------+------------+-------------+-------------+----------+
| | | | | | | | | |
+---------------------------------+-----------+-------------+-------------+-----------+------------+-------------+-------------+----------+
| (Loss)/earnings per share | 7 | | | (28.6)p | 4.1p | | | 5.0p |
| (basic and diluted) | | | | | | | | |
+---------------------------------+-----------+-------------+-------------+-----------+------------+-------------+-------------+----------+
| | | | | | | | | |
+---------------------------------+-----------+-------------+-------------+-----------+------------+-------------+-------------+----------+
| | | | | | | | | |
+---------------------------------+-----------+-------------+-------------+-----------+------------+-------------+-------------+----------+
| Ordinary dividends paid and | 8 | | | | | | | |
| proposed | | | | | | | | |
+---------------------------------+-----------+-------------+-------------+-----------+------------+-------------+-------------+----------+
| | | | | | | | | |
+---------------------------------+-----------+-------------+-------------+-----------+------------+-------------+-------------+----------+
| Dividends proposed | | | | 0.0p | 1.5p | | | 0.0p |
+---------------------------------+-----------+-------------+-------------+-----------+------------+-------------+-------------+----------+
| Dividends paid | | | | 0.0p | 4.3p | | | 5.8p |
+---------------------------------+-----------+-------------+-------------+-----------+------------+-------------+-------------+----------+
| | | | | | | | | |
+---------------------------------+-----------+-------------+-------------+-----------+------------+-------------+-------------+----------+
Figures for the six months ended 31 July 2008 have been restated for
discontinued operations
+--------------------------------------------+-----------+-----------+----------+
| Condensed consolidated statement of comprehensive income and expense |
+-------------------------------------------------------------------------------+
| For the six months ended 31 July 2009 | | | |
+--------------------------------------------+-----------+-----------+----------+
| | Six | Six | Year |
| | months | months | |
+--------------------------------------------+-----------+-----------+----------+
| | to | to | to |
| | 31/07/09 | 31/07/08 | 31/01/09 |
+--------------------------------------------+-----------+-----------+----------+
| | | | |
+--------------------------------------------+-----------+-----------+----------+
| | GBP000 | GBP000 | GBP000 |
+--------------------------------------------+-----------+-----------+----------+
| | | | |
+--------------------------------------------+-----------+-----------+----------+
| | | | |
+--------------------------------------------+-----------+-----------+----------+
| Exchange difference on translation of | 38 | 11 | (32) |
| foreign operations | | | |
+--------------------------------------------+-----------+-----------+----------+
| Cash flow hedge (fair value gain/(loss) in | 67 | 11 | (522) |
| period) | | | |
+--------------------------------------------+-----------+-----------+----------+
| Gains on revaluations of properties | - | - | 4,166 |
+--------------------------------------------+-----------+-----------+----------+
| Deferred tax on revaluations of properties | - | - | (970) |
+--------------------------------------------+-----------+-----------+----------+
| Actuarial (loss)/gain on defined benefit | (5,859) | 11 | 2,126 |
| pension scheme | | | |
+--------------------------------------------+-----------+-----------+----------+
| Deferred tax on actuarial loss / (gain) | 1,641 | (3) | (595) |
+--------------------------------------------+-----------+-----------+----------+
| | | | |
+--------------------------------------------+-----------+-----------+----------+
| | | | |
+--------------------------------------------+-----------+-----------+----------+
| Net (loss)/income recognised directly in | (4,113) | 30 | 4,173 |
| reserves | | | |
+--------------------------------------------+-----------+-----------+----------+
| | | | |
+--------------------------------------------+-----------+-----------+----------+
| (Loss)/profit for the period | (9,569) | 1,369 | 1,675 |
+--------------------------------------------+-----------+-----------+----------+
| | | | |
+--------------------------------------------+-----------+-----------+----------+
| | | | |
+--------------------------------------------+-----------+-----------+----------+
| Total comprehensive (loss)/income for the | (13,682) | 1,399 | 5,848 |
| period | | | |
+--------------------------------------------+-----------+-----------+----------+
| | | | |
+--------------------------------------------+-----------+-----------+----------+
| | | | |
+--------------------------------------------+-----------+-----------+----------+
| | | | |
+--------------------------------------------+-----------+-----------+----------+
+---------------------------------+-----------+-----------+-----------+-----------+
| Condensed consolidated statement of financial position |
+---------------------------------------------------------------------------------+
| At 31 July 2009 | | | | |
+---------------------------------+-----------+-----------+-----------+-----------+
| | Note | As at | As at | As at |
+---------------------------------+-----------+-----------+-----------+-----------+
| | | 31/07/09 | 31/07/08 | 31/01/09 |
+---------------------------------+-----------+-----------+-----------+-----------+
| | | | | |
+---------------------------------+-----------+-----------+-----------+-----------+
| | | GBP000 | GBP000 | GBP000 |
+---------------------------------+-----------+-----------+-----------+-----------+
| | | | | |
+---------------------------------+-----------+-----------+-----------+-----------+
| | | | | |
+---------------------------------+-----------+-----------+-----------+-----------+
| Assets | | | | |
+---------------------------------+-----------+-----------+-----------+-----------+
| Non-current assets | | | | |
+---------------------------------+-----------+-----------+-----------+-----------+
| Goodwill | | 6,857 | 7,215 | 6,857 |
+---------------------------------+-----------+-----------+-----------+-----------+
| Other intangible assets | | 2,586 | 2,694 | 2,616 |
+---------------------------------+-----------+-----------+-----------+-----------+
| Property, plant and equipment | | 15,427 | 11,787 | 15,727 |
+---------------------------------+-----------+-----------+-----------+-----------+
| Deferred tax asset | | 6,231 | 2,513 | 1,791 |
+---------------------------------+-----------+-----------+-----------+-----------+
| Investments | | 10 | 10 | 10 |
+---------------------------------+-----------+-----------+-----------+-----------+
| | | | | |
+---------------------------------+-----------+-----------+-----------+-----------+
| | | | | |
+---------------------------------+-----------+-----------+-----------+-----------+
| | | 31,111 | 24,219 | 27,001 |
+---------------------------------+-----------+-----------+-----------+-----------+
| | | | | |
+---------------------------------+-----------+-----------+-----------+-----------+
| | | | | |
+---------------------------------+-----------+-----------+-----------+-----------+
| Current assets | | | | |
+---------------------------------+-----------+-----------+-----------+-----------+
| Inventories | | 29,055 | 38,491 | 38,692 |
+---------------------------------+-----------+-----------+-----------+-----------+
| Trade and other receivables | | 17,782 | 23,871 | 22,493 |
+---------------------------------+-----------+-----------+-----------+-----------+
| Derivative financial | | - | 113 | 1,478 |
| instruments | | | | |
+---------------------------------+-----------+-----------+-----------+-----------+
| Cash and cash equivalents | | 2,473 | 4,545 | 4,799 |
+---------------------------------+-----------+-----------+-----------+-----------+
| Current tax | | 241 | - | 673 |
+---------------------------------+-----------+-----------+-----------+-----------+
| | | | | |
+---------------------------------+-----------+-----------+-----------+-----------+
| | | | | |
+---------------------------------+-----------+-----------+-----------+-----------+
| | | 49,551 | 67,020 | 68,135 |
+---------------------------------+-----------+-----------+-----------+-----------+
| | | | | |
+---------------------------------+-----------+-----------+-----------+-----------+
| | | | | |
+---------------------------------+-----------+-----------+-----------+-----------+
| Total assets | | 80,662 | 91,239 | 95,136 |
+---------------------------------+-----------+-----------+-----------+-----------+
| | | | | |
+---------------------------------+-----------+-----------+-----------+-----------+
| | | | | |
+---------------------------------+-----------+-----------+-----------+-----------+
| Liabilities | | | | |
+---------------------------------+-----------+-----------+-----------+-----------+
| | | | | |
+---------------------------------+-----------+-----------+-----------+-----------+
| Current liabilities | | | | |
+---------------------------------+-----------+-----------+-----------+-----------+
| Trade and other payables | | 18,209 | 22,551 | 23,713 |
+---------------------------------+-----------+-----------+-----------+-----------+
| Current tax liabilities | | - | 121 | - |
+---------------------------------+-----------+-----------+-----------+-----------+
| Derivative financial | | 703 | 13 | 440 |
| instruments | | | | |
+---------------------------------+-----------+-----------+-----------+-----------+
| Obligations under finance | | 647 | 825 | 917 |
| leases | | | | |
+---------------------------------+-----------+-----------+-----------+-----------+
| Borrowings and overdrafts | | 27,678 | 3,731 | 11,573 |
+---------------------------------+-----------+-----------+-----------+-----------+
| | | | | |
+---------------------------------+-----------+-----------+-----------+-----------+
| | | | | |
+---------------------------------+-----------+-----------+-----------+-----------+
| | | 47,237 | 27,241 | 36,643 |
+---------------------------------+-----------+-----------+-----------+-----------+
| | | | | |
+---------------------------------+-----------+-----------+-----------+-----------+
| Non-current liabilities | | | | |
+---------------------------------+-----------+-----------+-----------+-----------+
| Long term borrowings | | - | 25,256 | 16,917 |
+---------------------------------+-----------+-----------+-----------+-----------+
| Obligations under finance | | 654 | 847 | 867 |
| leases | | | | |
+---------------------------------+-----------+-----------+-----------+-----------+
| Retirement benefit obligations | 10 | 12,357 | 8,680 | 6,218 |
+---------------------------------+-----------+-----------+-----------+-----------+
| Deferred tax liabilities | | 1,415 | 820 | 1,955 |
+---------------------------------+-----------+-----------+-----------+-----------+
| Provisions | | 531 | 193 | 386 |
+---------------------------------+-----------+-----------+-----------+-----------+
| | | | | |
+---------------------------------+-----------+-----------+-----------+-----------+
| | | | | |
+---------------------------------+-----------+-----------+-----------+-----------+
| | | 14,957 | 35,796 | 26,343 |
+---------------------------------+-----------+-----------+-----------+-----------+
| | | | | |
+---------------------------------+-----------+-----------+-----------+-----------+
| | | | | |
+---------------------------------+-----------+-----------+-----------+-----------+
| Total liabilities | | 62,194 | 63,037 | 62,986 |
+---------------------------------+-----------+-----------+-----------+-----------+
| | | | | |
+---------------------------------+-----------+-----------+-----------+-----------+
| | | | | |
+---------------------------------+-----------+-----------+-----------+-----------+
| Net assets | | 18,468 | 28,202 | 32,150 |
+---------------------------------+-----------+-----------+-----------+-----------+
| | | | | |
+---------------------------------+-----------+-----------+-----------+-----------+
| | | | | |
+---------------------------------+-----------+-----------+-----------+-----------+
| | | | | |
+---------------------------------+-----------+-----------+-----------+-----------+
| Equity | | | | |
+---------------------------------+-----------+-----------+-----------+-----------+
| | | | | |
+---------------------------------+-----------+-----------+-----------+-----------+
| Called up share capital | | 3,341 | 3,341 | 3,341 |
+---------------------------------+-----------+-----------+-----------+-----------+
| Share premium account | | 1,848 | 1,848 | 1,848 |
+---------------------------------+-----------+-----------+-----------+-----------+
| Revaluation reserve | | 7,890 | 4,694 | 7,890 |
+---------------------------------+-----------+-----------+-----------+-----------+
| Other reserves | | 667 | 1,128 | 562 |
+---------------------------------+-----------+-----------+-----------+-----------+
| Retained earnings | | 4,722 | 17,191 | 18,509 |
+---------------------------------+-----------+-----------+-----------+-----------+
| | | | | |
+---------------------------------+-----------+-----------+-----------+-----------+
| | | | | |
+---------------------------------+-----------+-----------+-----------+-----------+
| Total shareholders' equity | | 18,468 | 28,202 | 32,150 |
+---------------------------------+-----------+-----------+-----------+-----------+
| | | | | |
+---------------------------------+-----------+-----------+-----------+-----------+
| | | | | |
+---------------------------------+-----------+-----------+-----------+-----------+
+--------------------------------------------+-----------+-----------+-----------+-----------+----------+
| Consolidated statement of changes in equity |
+-------------------------------------------------------------------------------------------------------+
| For the six months ended 31 July 2009 | | | | | |
+--------------------------------------------+-----------+-----------+-----------+-----------+----------+
| | | | | | |
+--------------------------------------------+-----------+-----------+-----------+-----------+----------+
| | | | | | |
+--------------------------------------------+-----------+-----------+-----------+-----------+----------+
| | Share | Share | Other | Retained | Total |
| | Capital | Premium | Reserves | Earnings | Equity |
+--------------------------------------------+-----------+-----------+-----------+-----------+----------+
| | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+--------------------------------------------+-----------+-----------+-----------+-----------+----------+
| | | | | | |
+--------------------------------------------+-----------+-----------+-----------+-----------+----------+
| | | | | | |
+--------------------------------------------+-----------+-----------+-----------+-----------+----------+
| Balance at 1 February 2008 | 3,341 | 1,848 | 5,810 | 17,241 | 28,240 |
+--------------------------------------------+-----------+-----------+-----------+-----------+----------+
| Total comprehensive income for the period | - | - | 22 | 1,377 | 1,399 |
+--------------------------------------------+-----------+-----------+-----------+-----------+----------+
| Dividends paid | - | - | - | (1,437) | (1,437) |
+--------------------------------------------+-----------+-----------+-----------+-----------+----------+
| Balance at 31 July 2008 | 3,341 | 1,848 | 5,832 | 17,181 | 28,202 |
+--------------------------------------------+-----------+-----------+-----------+-----------+----------+
| Total comprehensive income for the period | - | - | 2,620 | 1,829 | 4,449 |
+--------------------------------------------+-----------+-----------+-----------+-----------+----------+
| Dividends paid | - | - | - | (501) | (501) |
+--------------------------------------------+-----------+-----------+-----------+-----------+----------+
| | | | | | |
+--------------------------------------------+-----------+-----------+-----------+-----------+----------+
| | | | | | |
+--------------------------------------------+-----------+-----------+-----------+-----------+----------+
| Balance at 31 January 2009 | 3,341 | 1,848 | 8,452 | 18,509 | 32,150 |
+--------------------------------------------+-----------+-----------+-----------+-----------+----------+
| | | | | | |
+--------------------------------------------+-----------+-----------+-----------+-----------+----------+
| Total comprehensive income / (loss) for | - | - | 105 | (13,787) | (13,682) |
| the period | | | | | |
+--------------------------------------------+-----------+-----------+-----------+-----------+----------+
| | | | | | |
+--------------------------------------------+-----------+-----------+-----------+-----------+----------+
| | | | | | |
+--------------------------------------------+-----------+-----------+-----------+-----------+----------+
| Balance at 31 July 2009 | 3,341 | 1,848 | 8,557 | 4,722 | 18,468 |
+--------------------------------------------+-----------+-----------+-----------+-----------+----------+
| | | | | | |
+--------------------------------------------+-----------+-----------+-----------+-----------+----------+
| | | | | | |
+--------------------------------------------+-----------+-----------+-----------+-----------+----------+
+--------------------------------------------+-+-+------------+-----------+-----------+
| Condensed consolidated statement of cashflows |
+-------------------------------------------------------------------------------------+
| For the six months ended 31 July 2009 | | | |
+--------------------------------------------+----------------+-----------+-----------+
| | Six months | Six | Year |
| | | months | |
+--------------------------------------------+----------------+-----------+-----------+
| | to 31/07/09 | to | to |
| | | 31/07/08 | 31/01/09 |
+--------------------------------------------+----------------+-----------+-----------+
| | | | |
+--------------------------------------------+----------------+-----------+-----------+
| | GBP000 | GBP000 | GBP000 |
+--------------------------------------------+----------------+-----------+-----------+
| | | | |
+--------------------------------------------+----------------+-----------+-----------+
| | | | |
+--------------------------------------------+----------------+-----------+-----------+
| Cash flows from operating activities | | | |
+--------------------------------------------+----------------+-----------+-----------+
| Profit from continuing operations before | 730 | 3,037 | 6,134 |
| exceptionals | | | |
+--------------------------------------------+----------------+-----------+-----------+
| (Loss)/profit of discontinued operations | (67) | 3 | (571) |
+--------------------------------------------+----------------+-----------+-----------+
| Restructuring costs incurred | (12,836) | - | (1,023) |
+--------------------------------------------+----------------+-----------+-----------+
| (Loss)/profit from operating activities | (12,173) | 3,040 | 4,540 |
+--------------------------------------------+----------------+-----------+-----------+
| Depreciation and amortisation | 820 | 707 | 1,553 |
+--------------------------------------------+----------------+-----------+-----------+
| Foreign exchange differences | 107 | (93) | (213) |
+--------------------------------------------+----------------+-----------+-----------+
| (Profit) / loss on sale of fixed assets | 2 | - | 46 |
+--------------------------------------------+----------------+-----------+-----------+
| Defined benefit pension costs less | (251) | (325) | (952) |
| contributions paid | | | |
+--------------------------------------------+----------------+-----------+-----------+
| Decrease/(increase) in inventories | 9,633 | (1,607) | (1,723) |
+--------------------------------------------+----------------+-----------+-----------+
| Decrease / (increase) in receivables | 4,644 | 3,524 | 5,107 |
+--------------------------------------------+----------------+-----------+-----------+
| Decrease in payables | (5,458) | (2,369) | (1,390) |
+--------------------------------------------+----------------+-----------+-----------+
| Increase / (decrease) in other provisions | 151 | 26 | 199 |
+--------------------------------------------+----------------+-----------+-----------+
| Unrealised loss/(gain) on financial | 1,803 | - | (1,472) |
| instruments | | | |
+--------------------------------------------+----------------+-----------+-----------+
| | | | |
+--------------------------------------------+----------------+-----------+-----------+
| | | | |
+--------------------------------------------+----------------+-----------+-----------+
| Cash (absorbed)/generated by operations | (722) | 2,903 | 5,695 |
+--------------------------------------------+----------------+-----------+-----------+
| | | | |
+--------------------------------------------+----------------+-----------+-----------+
| Taxes received/(paid) | 576 | (472) | (885) |
+--------------------------------------------+----------------+-----------+-----------+
| | | | |
+--------------------------------------------+----------------+-----------+-----------+
| | | | |
+--------------------------------------------+----------------+-----------+-----------+
| Net cash (outflow) / inflow from operating | (146) | 2,431 | 4,810 |
| activities | | | |
+--------------------------------------------+----------------+-----------+-----------+
| | | | |
+--------------------------------------------+----------------+-----------+-----------+
| | | | |
+--------------------------------------------+----------------+-----------+-----------+
| Investing activities | | | |
+--------------------------------------------+----------------+-----------+-----------+
| Purchase of property, plant and equipment | (102) | (200) | (371) |
+--------------------------------------------+----------------+-----------+-----------+
| Net proceeds from sale of plant and | 2 | 3 | 2 |
| equipment | | | |
+--------------------------------------------+----------------+-----------+-----------+
| Purchase of other intangible assets | (404) | (582) | (964) |
+--------------------------------------------+----------------+-----------+-----------+
| | | | |
+--------------------------------------------+----------------+-----------+-----------+
| | | | |
+--------------------------------------------+----------------+-----------+-----------+
| Net cash used in investing activities | (504) | (779) | (1,333) |
+--------------------------------------------+----------------+-----------+-----------+
| | | | |
+--------------------------------------------+----------------+-----------+-----------+
| | | | |
+--------------------------------------------+----------------+-----------+-----------+
| Financing activities | | | |
+--------------------------------------------+----------------+-----------+-----------+
| Interest paid | (377) | (910) | (1,627) |
+--------------------------------------------+----------------+-----------+-----------+
| Dividends paid to Company shareholders | - | (1,437) | (1,938) |
+--------------------------------------------+----------------+-----------+-----------+
| Repayment of borrowings | (909) | (505) | (910) |
+--------------------------------------------+----------------+-----------+-----------+
| Repayment of obligations under finance | (482) | (394) | (282) |
| leases | | | |
+----------------------------------------------+--------------+-----------+-----------+
| | | | |
+--------------------------------------------+----------------+-----------+-----------+
| | | | |
+--------------------------------------------+----------------+-----------+-----------+
| Net cash flow from financing activities | (1,768) | (3,246) | (4,757) |
+--------------------------------------------+----------------+-----------+-----------+
| | | | |
+--------------------------------------------+----------------+-----------+-----------+
| | | | |
+--------------------------------------------+----------------+-----------+-----------+
| Net decrease in cash and cash equivalents | (2,418) | (1,594) | (1,280) |
+----------------------------------------------+--------------+-----------+-----------+
| | | | |
+------------------------------------------------+------------+-----------+-----------+
| Cash and cash equivalents at start of year | 4,458 | 5,691 | 5,691 |
+------------------------------------------------+------------+-----------+-----------+
| | | | |
+------------------------------------------------+------------+-----------+-----------+
| Effect of foreign exchange rate changes | (5) | 15 | 47 |
+------------------------------------------------+------------+-----------+-----------+
| | | | |
+------------------------------------------------+------------+-----------+-----------+
| | | | |
+------------------------------------------------+------------+-----------+-----------+
| Cash and cash equivalents at end of period | 2,035 | 4,112 | 4,458 |
| (note 11) | | | |
+------------------------------------------------+------------+-----------+-----------+
| | | | |
+------------------------------------------------+------------+-----------+-----------+
| | | | |
+------------------------------------------------+------------+-----------+-----------+
| | | | |
+--------------------------------------------+-+-+------------+-----------+-----------+
Notes on the condensed consolidated financial statements
1. Basis of preparation
These condensed financial statements which are for the six months ended 31 July
2009 have been prepared in accordance with the Disclosure and Transparency Rules
of the Financial Services Authority and with International Financial Reporting
Standards (IFRS) and the information contained therein is in compliance with IAS
34 "Interim Financial Reporting". They do not include all the information
required for full annual financial statements within the meaning of the
Companies Act 2006 and should be read in conjunction with the financial
statements of the Group for the year ended 31 January 2009.
In determining the appropriate basis of preparation of the half yearly report,
the Directors are required to consider whether the Group can continue in
operational existence for the foreseeable future, that is, for at least 12
months from the date of signing this report.
In our 2009 Annual Report published on 28 May 2009, we disclosed that the
Company has cGBP32.5m bank facilities provided by HSBC comprising several loans
with maturity dates ranging from July 2009 to July 2014.
Pursuant to IAS 1 bank borrowings as at 31 July 2009 have been reclassified as
current liabilities pending agreement with the Group's bankers of renewed
facilities following a breach of covenants due to the exceptional stock
write-down.
The Group is, in the ordinary course of its business, in discussions with the
existing lenders to re-negotiate the facilities to be more aligned to its future
requirements.
The Directors have prepared trading and cash flow forecasts as part of their
going concern assessment which project that the total current facilities are not
exceeded over the duration of the forecasts.
The forecasts prepared make assumptions in respect of future trading, the
achievability of which is dependent on:
* the current economic climate
* the continued ability of the Group to effectively manage its short term working
capital
After making enquiries, and considering the matters described above, the
Directors have concluded that they have a reasonable expectation that the Group
has adequate resources to continue in operational existence for the foreseeable
future. For these reasons, they continue to adopt the going concern basis in
preparing these results. This half yearly report does not include any
adjustments that would be required should the going concern basis be
inappropriate.
These condensed financial statements were approved by the Board on 29 September
2009. They are unaudited but have been reviewed by the auditors whose report is
set out below.
The impact of seasonality or cyclicality on operations is not regarded as
significant on the condensed financial statements. There have been no changes
in estimates of amounts reported in prior periods that have had a material
effect in the current period, with the exception of those noted in Note 5.
2. Significant accounting policies
The accounting policies and presentation followed in the preparation of this
condensed half yearly report have been applied consistently to all periods
in these financial statements and are the same as those applied by the Group in
the preparation of its Annual Report for the year ended 31 January 2009, with
the exception of those noted below:
IAS 1 (revised) "Presentation of Financial Statements"
The revised standard prohibits the presentation of items of income and expenses
(that is "non-owner changes in equity") in the statement of changes in
equity, requiring "non-owner changes in equity" to be presented separately from
owner changes in equity. All "non-owner changes in equity" are required to be
shown in a performance statement. Entities can choose whether to present one
performance statement (the statement of comprehensive income) or two statements
(the income statement and statement of comprehensive income). The Group has
elected to present two. The half yearly financial statements have been prepared
under the revised disclosure requirements.
IFRS 8 "Operating Segments"
The standard requires that operating segments are identified on the basis of
internal reports that are regularly reviewed by the Chief Operating Decision
Maker to allocate resources to the segments and assess their performance. The
Group considers that its Chief Operating Decision Maker is its Board of
Directors
IAS 2 "Inventories"
As explained below, the Group has changed its methodology for estimating
inventory valuation. Its policy with regard to inventory remains that
of capitalising appropriately applicable overhead costs as required under
IAS2 "Inventories".
3. Risks and uncertainties
The principal risks and uncertainties which affect the Group have not changed
since 31 January 2009. A detailed explanation of these risks and uncertainties
can be found in the Business Review section of the Annual Report and Accounts
for the year ended 31 January 2009. The Directors consider that this properly
reflects the risks and uncertainties in respect of the second six months of the
financial year to 31 January 2010.
4. Segmental reporting
As per IFRS 8 "Segmental Reporting", based on the Group's internal financial
reporting structures the Board considers that there is only one operating
segment being the sourcing and sale of workplace clothing. Therefore the
disclosures have already been given in these financial statements.
5. Exceptional items
The current period exceptional items expensed comprise of:
+-----------+-----------+------------+----------------+----------------+----------------+-------------+
| | | | | Cost of | Administration | Total |
| | | | | sales | expenses | |
+-----------+-----------+------------+----------------+----------------+----------------+-------------+
| | | | | GBP000 | GBP000 | GBP000 |
+-----------+-----------+------------+----------------+----------------+----------------+-------------+
| | | | | | | |
+-----------+-----------+------------+----------------+----------------+----------------+-------------+
| Write down of inventory | | 8,807 | - | 10,217 |
+------------------------------------+----------------+----------------+----------------+-------------+
| Change in estimation of inventory values | 1,410 | | |
+-----------------------------------------------------+----------------+----------------+-------------+
| Termination payments including directors | - | 1,161 | 1,161 |
+-----------------------------------------------------+----------------+----------------+-------------+
| Write off of unrecoverable debt | | - | 548 | 548 |
+------------------------------------+----------------+----------------+----------------+-------------+
| Vacant property provision | | - | 375 | 375 |
+------------------------------------+----------------+----------------+----------------+-------------+
| Other expenses | | | 116 | 419 | 677 |
+-----------------------+------------+----------------+----------------+----------------+-------------+
| | | | | | | |
+-----------+-----------+------------+----------------+----------------+----------------+-------------+
| | | | | 10,333 | 2,503 | 12,836 |
+-----------+-----------+------------+----------------+----------------+----------------+-------------+
| | | | | | | |
+-----------+-----------+------------+----------------+----------------+----------------+-------------+
Write down of inventory
To the extent that future events impact the saleability of inventory, provisions
for slow moving and obsolete inventories can vary significantly. For example,
changes in specifications or regulations may render inventory, previously
considered to have a realisable value in excess of cost, obsolete and requiring
such inventory to be fully written off. As part of management's re-organisation
of the business, there is a significantly lower requirement for inventory
necessary to support the on-going needs of the business. As a consequence of
this, there has been a write down in inventories of GBP8,807,000, in line with
IAS 2 "Inventories".
Change in estimation of inventory values
As noted at the year end the Group undertook a review of its manufacturing
facilities and as a result the production facilities have reduced. Accordingly
as a result management have reviewed the techniques associated with their
methodology for estimating the overhead costs in inventory. The effect of this
has been to adversely impact the Income Statement by GBP1,410,000. Inventory
valuation remains compliant with IAS 2 "Inventories".
Termination payments
In May 2009 JR Budd and KP Gibbs left the Company. Termination payments were
made in line with their contractual arrangements. The total cost, including
payroll taxes, amounted to GBP1,019,000. Legal fees of GBP95,000 were also
incurred. Other redundancies totalling GBP47,000 were also paid
Write off of receivables
Management have performed a review of trade and other receivables and consider
that amounts totalling GBP548,000 are not recoverable and they have therefore
been written down accordingly.
Vacant properties
The Group has sublet various properties. A number of these are no longer
required for the business's on-going needs. Thus the Group has provided
GBP375,000 for the lease costs in accordance with IAS 37 "Provisions".
Other expenses
Other expenses of GBP419,000 included consultancy and planning fees costs.
The exceptional items for the year ended 31 January 2009 were:
+-----------+-----------+------------+----------------+----------------+----------------+------------+----------+
| | | | | Cost of | Administration | Total | |
| | | | | Sales | Expenses | | |
+-----------+-----------+------------+----------------+----------------+----------------+------------+----------+
| | | | | GBP000 | GBP000 | GBP000 |
+-----------+-----------+------------+----------------+----------------+----------------+-----------------------+
| | | | | | | |
+-----------+-----------+------------+----------------+----------------+----------------+-----------------------+
| Workforce reduction programme | - | 599 | 599 |
+-----------------------------------------------------+----------------+----------------+-----------------------+
| Closure of French sales office | 225 | 199 | 424 |
+-----------------------------------------------------+----------------+----------------+-----------------------+
| | | | | | | |
+-----------+-----------+------------+----------------+----------------+----------------+-----------------------+
| | | | | 225 | 798 | 1,023 |
+-----------+-----------+------------+----------------+----------------+----------------+-----------------------+
| | | | | | | |
+-----------+-----------+------------+----------------+----------------+----------------+------------+----------+
6. Taxation
Taxation has been calculated on the profit on ordinary activities using the
effective tax rate for the current financial year.The effective rate of tax on
profit from operations including tax adjustments in respect of prior years and
changes in tax rates is 26.7% (2008/09: 26.2%), representing the best estimate
of the effective rate for the full financial year. The effective tax rate for
the year ending 31 January 2009 was 19.1%.
7. Earnings per share
Basic earnings per share is calculated on the (loss) / profit attributable to
ordinary shareholders and the weighted average number of shares in issue during
the period. Diluted earnings per share is calculated on basic earnings per share
adjusted to include an additional number of shares which represents the fair
value of the weighted average number of shares under option during the period.
Adjusted earnings per share has been calculated on basic earnings adjusted for
discontinued operations and activities, restructuring costs and fixed asset
disposals net of tax at the appropriate rate.
The calculation of the basic, diluted and adjusted earnings per share is as
follows:
+------------------+--+--+-----------+----------+----------+----------+--+----------+----------+----------+--+---------+---------+--------+---------+
| | | | | Six months to 31/07/09 | | Six months to 31/07/08 | | Year to 31/01/09 | |
+------------------+--+--+-----------+--------------------------------+--+--------------------------------+--+----------------------------+---------+
| | | | | | Earnings per share | | | Earnings per share | | Earnings per share | |
+------------------+--+--+-----------+----------+---------------------+--+----------+---------------------+--+----------------------------+---------+
| | | | | GBP000 | Basic | Diluted (p) | GBP000 | Basic | Diluted | | GBP000 | Basic | Diluted (p) |
| | | | | | (p) | | | (p) | (p) | | | (p) | |
+------------------+--+--+-----------+----------+----------+-------------+----------+----------+----------+--+---------+---------+------------------+
| | | | | | | | | | | | | | | | |
+------------------+--+--+-----------+----------+----------+----------+--+----------+----------+----------+--+---------+---------+--------+---------+
| Earnings attributable to ordinary | | | | | | | | | | | | |
+------------------------------------+----------+----------+----------+--+----------+----------+----------+--+---------+---------+--------+---------+
| Shareholders | | | | (28.6) | (28.6) | | 1,369 | 4.1 | 4.1 | | 1,675 | 5.0 | 5.0 | |
| | | | (9,569) | | | | | | | | | | | |
+---------------------+--+-----------+----------+----------+----------+--+----------+----------+----------+--+---------+---------+--------+---------+
| (Profit)/loss from discontinued | 48 | 0.1 | 0.1 | | (3) | - | - | | 776 | 2.3 | 2.3 | |
| operations and discontinued | | | | | | | | | | | | |
| activities | | | | | | | | | | | | |
+------------------------------------+----------+----------+----------+--+----------+----------+----------+--+---------+---------+--------+---------+
| Restructuring costs (net of tax) | 9,409 | 28.2 | 28.2 | | - | - | - | | 733 | 2.2 | 2.2 | |
+------------------------------------+----------+----------+----------+--+----------+----------+----------+--+---------+---------+--------+---------+
| Disposal of fixed assets (net of | 2 | - | - | | - | - | - | | - | - | - | |
| tax) | | | | | | | | | | | | |
+------------------------------------+----------+----------+----------+--+----------+----------+----------+--+---------+---------+--------+---------+
| | | | | | | | | | | | | | | | |
+------------------+--+--+-----------+----------+----------+----------+--+----------+----------+----------+--+---------+---------+--------+---------+
| | | | | | | | | | | | | | | | |
+------------------+--+--+-----------+----------+----------+----------+--+----------+----------+----------+--+---------+---------+--------+---------+
| (Loss)/profit for adjusted | (110) | (0.3) | (0.3) | | 1,366 | 4.1 | 4.1 | | 3,184 | 9.5 | 9.5 | |
| earnings per | | | | | | | | | | | | |
+------------------------------------+----------+----------+----------+--+----------+----------+----------+--+---------+---------+--------+---------+
| Share | | | | | | | | | | | | | | |
+---------------------+--+-----------+----------+----------+----------+--+----------+----------+----------+--+---------+---------+--------+---------+
| | | | | | | | | | | | | | | | |
+------------------+--+--+-----------+----------+----------+----------+--+----------+----------+----------+--+---------+---------+--------+---------+
The weighted average number of shares used in the basic earnings per share
calculation for the period amounted to 33,409,654 (2008: 33,409,654).
For the diluted earnings per share calculation the number of shares equalled the
weighted average number of shares used in the basic earnings per share
calculation plus an additional amount of nil (2008: nil) representing the fair
value of the weighted average number of shares under option during the period.
For the year ended 31 January 2009, the weighted average number of shares in
issue during the year was 33,409,654 and the diluted weighted average number of
shares was 33,409,654.
8. Dividend
+-------------------------------------------+-----------+------------+-----------+
| | Six | Six months | Year |
| | months | | |
+-------------------------------------------+-----------+------------+-----------+
| | to | to | to |
| | 31/07/09 | 31/07/08 | 31/01/09 |
+-------------------------------------------+-----------+------------+-----------+
| | GBP000 | GBP000 | GBP000 |
+-------------------------------------------+-----------+------------+-----------+
| | | | |
+-------------------------------------------+-----------+------------+-----------+
| Dividend paid and recognised in the | - | 1,437 | 1,938 |
| period | | | |
+-------------------------------------------+-----------+------------+-----------+
| | | | |
+-------------------------------------------+-----------+------------+-----------+
| | | | |
+-------------------------------------------+-----------+------------+-----------+
The Board does not propose an interim dividend (2008: 1.5p). The total paid
during the period is GBPnil (2008: GBP501,000).
9. Finance costs
+-------------------------------------------+-----------+-----------+------------+
| | Six | Six | Year |
| | months | months | |
+-------------------------------------------+-----------+-----------+------------+
| | to | to | to |
| | 31/07/09 | 31/07/08 | 31/01/09 |
+-------------------------------------------+-----------+-----------+------------+
| | GBP000 | GBP000 | GBP000 |
+-------------------------------------------+-----------+-----------+------------+
| | | | |
+-------------------------------------------+-----------+-----------+------------+
| Interest payable (net) on bank loans and | 265 | 837 | 1,397 |
| overdrafts | | | |
+-------------------------------------------+-----------+-----------+------------+
| Interest on obligations under finance | 83 | 72 | 159 |
| leases | | | |
+-------------------------------------------+-----------+-----------+------------+
| Finance cost on retirement benefit | 531 | 275 | 555 |
| liability | | | |
+-------------------------------------------+-----------+-----------+------------+
| | | | |
+-------------------------------------------+-----------+-----------+------------+
| | | | |
+-------------------------------------------+-----------+-----------+------------+
| | 879 | 1,184 | 2,111 |
+-------------------------------------------+-----------+-----------+------------+
| | | | |
+-------------------------------------------+-----------+-----------+------------+
| | | | |
+-------------------------------------------+-----------+-----------+------------+
10. Retirement benefits liability
The Company operates two funded pension schemes in the UK. These are the
Alexandra 1994 Pension Fund and the Alexandra Pension Fund. The Alexandra 1994
Pension Fund has both defined benefit and defined contribution sections,
although the defined contribution section is relatively small. The defined
benefit schemes are closed to new entrants.
This disclosure is in respect of the defined benefit section only.
The Company has opted to recognise all actuarial gains and losses immediately
through the Statement of Comprehensive Income.
Full actuarial valuations of the schemes were carried out as at 5 April 2006 and
updated to 31 July 2009 by a qualified independent actuary. The major
assumptions used by the actuary were (in nominal terms) as follows:
+--------------------------------+---------------+---------------+---------------+
| | Six months | Six months | Year |
+--------------------------------+---------------+---------------+---------------+
| | to 31/07/09 | to 31/07/08 | to 31/01/09 |
+--------------------------------+---------------+---------------+---------------+
| | | | |
+--------------------------------+---------------+---------------+---------------+
| Discount rate | 6.2% | 6.5% | 7.2% |
+--------------------------------+---------------+---------------+---------------+
| Rate of salary increase | 3.3% | 3.8% | 3.3% |
+--------------------------------+---------------+---------------+---------------+
| Rate of increase to pensions | 2.9% | 3.4% | 2.9% |
| in payment (where | | | |
| index-linked) | | | |
+--------------------------------+---------------+---------------+---------------+
| Rate of inflation | 3.3% | 3.8% | 3.3% |
+--------------------------------+---------------+---------------+---------------+
| Mortality table assumption - | PA92 (C = | PA92 (C = | PA92 (C = |
| non-pensioners | 2020) | 2020) | 2020) |
+--------------------------------+---------------+---------------+---------------+
| Mortality table assumption - | PA92 (C = | PA92 (C = | PA92 (C = |
| pensioners | 2010) | 2010) | 2010) |
+--------------------------------+---------------+---------------+---------------+
| | | | |
+--------------------------------+---------------+---------------+---------------+
| The assumptions used in determining the overall expected return of the scheme |
| have been set with reference to yields available on Government bonds and |
| appropriate risk margins. |
+--------------------------------+---------------+---------------+---------------+
+------------------------------------------+------------+------------+------------+--+
| The mortality assumption implies the expected future lifetime from age 65 as |
| follows: |
+---------------------------------------------------------------------------------+
| | | | |
+------------------------------------------+------------+------------+------------+
| Non-pensioner male (years) | 19.9 | 19.9 | 19.9 |
+------------------------------------------+------------+------------+------------+
| Pensioner male (years) | 19.0 | 19.0 | 19.0 |
+------------------------------------------+------------+------------+------------+
| Non-pensioner female (years) | 22.8 | 22.8 | 22.8 |
+------------------------------------------+------------+------------+------------+
| Pensioner female (years) | 22.0 | 22.0 | 22.0 |
+------------------------------------------+------------+------------+------------+
| | | | |
+------------------------------------------+------------+------------+------------+
| The assets in the scheme were: | | | |
+------------------------------------------+------------+------------+------------+
| | | | |
+------------------------------------------+------------+------------+------------+
| | As at | As at | As at |
| | 31/07/09 | 31/07/08 | 31/01/09 |
+------------------------------------------+------------+------------+------------+
| | GBP000 | GBP000 | GBP000 |
+------------------------------------------+------------+------------+------------+
| | | | |
+------------------------------------------+------------+------------+------------+
| Equities | 20,630 | 24,662 | 19,323 |
+------------------------------------------+------------+------------+------------+
| Bonds | 14,842 | 14,503 | 14,048 |
+------------------------------------------+------------+------------+------------+
| Cash | 58 | 106 | 296 |
+------------------------------------------+------------+------------+------------+
| | | | |
+------------------------------------------+------------+------------+------------+
| | | | |
+------------------------------------------+------------+------------+------------+
| Fair value of schemes' assets | 35,530 | 39,271 | 33,667 |
+------------------------------------------+------------+------------+------------+
| | | | |
+------------------------------------------+------------+------------+------------+
| Present value of defined obligations | (47,887) | (47,951) | (39,885) |
+------------------------------------------+------------+------------+------------+
| | | | |
+------------------------------------------+------------+------------+------------+
| | | | |
+------------------------------------------+------------+------------+------------+
| Net liability in balance sheet | (12,357) | (8,680) | (6,218) |
+------------------------------------------+------------+------------+------------+
| | | | |
+------------------------------------------+------------+------------+------------+
| | | | |
+------------------------------------------+------------+------------+------------+
| Changes in the present value of the defined benefit obligation are as follows: |
+------------------------------------------+------------+------------+------------+--+
+-----------------------------+----------+--+------------+------------+------------+
| | | | Six months | Six months | Year |
+-----------------------------+----------+--+------------+------------+------------+
| | | | to | to | to |
| | | | 31/07/09 | 31/07/08 | 31/01/09 |
+-----------------------------+----------+--+------------+------------+------------+
| | | | GBP000 | GBP000 | GBP000 |
+-----------------------------+----------+--+------------+------------+------------+
| | | | | | |
+-----------------------------+----------+--+------------+------------+------------+
| Benefit obligation at start | | | 39,885 | 49,270 | 49,270 |
| of period | | | | | |
+-----------------------------+----------+--+------------+------------+------------+
| Service cost | | | 72 | 141 | 264 |
+-----------------------------+----------+--+------------+------------+------------+
| Interest cost | | | 1,409 | 1,474 | 2,955 |
+-----------------------------+----------+--+------------+------------+------------+
| Contributions by plan | | | 70 | 84 | 156 |
| participants | | | | | |
+-----------------------------+----------+--+------------+------------+------------+
| Actuarial loss/(gain) | | | 8,115 | (2,362) | (10,673) |
+-----------------------------+----------+--+------------+------------+------------+
| Benefits paid | | | (1,664) | (656) | (2,087) |
+-----------------------------+----------+--+------------+------------+------------+
| | | | | | |
+-----------------------------+----------+--+------------+------------+------------+
| | | | | | |
+-----------------------------+----------+--+------------+------------+------------+
| Benefit obligation at end of period | | 47,887 | 47,951 | 39,885 |
+----------------------------------------+--+------------+------------+------------+
| | | | | | |
+-----------------------------+----------+--+------------+------------+------------+
| | | | | | |
+-----------------------------+----------+--+------------+------------+------------+
| Changes in the fair value of plan assets are as | | |
| follows: | | |
+-----------------------------+----------+--+------------+------------+------------+
+-----------------------------+----------+--+------------+------------+------------+
| | | | Six months | Six months | Year |
+-----------------------------+----------+--+------------+------------+------------+
| | | | to | to | to |
| | | | 31/07/09 | 31/07/08 | 31/01/09 |
+-----------------------------+----------+--+------------+------------+------------+
| | | | GBP000 | GBP000 | GBP000 |
+-----------------------------+----------+--+------------+------------+------------+
| | | | | | |
+-----------------------------+----------+--+------------+------------+------------+
| Fair value of plan assets at start of | | 33,667 | 40,529 | 40,529 |
| period | | | | |
+----------------------------------------+--+------------+------------+------------+
| Expected return on plan | | | 878 | 1,199 | 2,400 |
| assets | | | | | |
+-----------------------------+----------+--+------------+------------+------------+
| Actuarial gain/(loss) | | | 2,256 | (2,351) | (8,547) |
+-----------------------------+----------+--+------------+------------+------------+
| Contributions by employers | | | 323 | 466 | 1,216 |
+-----------------------------+----------+--+------------+------------+------------+
| Contributions by plan | | | 70 | 84 | 156 |
| participants | | | | | |
+-----------------------------+----------+--+------------+------------+------------+
| Benefits paid | | | (1,664) | (656) | (2,087) |
+-----------------------------+----------+--+------------+------------+------------+
| | | | | | |
+-----------------------------+----------+--+------------+------------+------------+
| | | | | | |
+-----------------------------+----------+--+------------+------------+------------+
| Fair value of plan assets at end of | | 35,530 | 39,271 | 33,667 |
| period | | | | |
+----------------------------------------+--+------------+------------+------------+
| | | | | | |
+-----------------------------+----------+--+------------+------------+------------+
| | | | | | |
+-----------------------------+----------+--+------------+------------+------------+
11. Analysis of net debt
+-----------+-----------+-----------+-----------+------------+------------+------------+
| | | As at | As at | As at |
+-----------+-----------------------+------------------------+------------+------------+
| | | 31/07/09 | 31/07/08 | 31/01/09 |
+-----------------------+-----------------------+------------+------------+------------+
| | | GBP000 | GBP000 | GBP000 |
+-----------------------+-----------------------+------------+------------+------------+
| | | | | |
+-----------------------+-----------------------+------------+------------+------------+
| | | | | |
+-----------------------+-----------------------+------------+------------+------------+
| Cash and cash | | (2,473) | (4,545) | (4,799) |
| equivalents | | | | |
+-----------------------+-----------------------+------------+------------+------------+
| Bank overdrafts | | 438 | 433 | 341 |
+-----------------------+-----------------------+------------+------------+------------+
| | | | | |
+-----------------------+-----------------------+------------+------------+------------+
| Cash and cash equivalents and bank overdrafts | (2,035) | (4,112) | (4,458) |
+-----------------------------------------------+------------+------------+------------+
| Bank borrowing due | | 27,240 | 3,298 | 11,232 |
| within one year | | | | |
+-----------------------+-----------------------+------------+------------+------------+
| Bank borrowing due in the second year | - | 9,190 | 1,331 |
+-----------------------------------------------+------------+------------+------------+
| Bank borrowing due in the third to fifth year | - | 14,834 | 14,626 |
+-----------------------------------------------+------------+------------+------------+
| Bank borrowing due after five years | - | 1,232 | 960 |
+-----------------------------------------------+------------+------------+------------+
| Finance leases | | 1,301 | 1,672 | 1,784 |
+-----------------------+-----------------------+------------+------------+------------+
| | | | | |
+-----------------------+-----------------------+------------+------------+------------+
| Total net debt | | 26,506 | 26,114 | 25,475 |
+-----------------------+-----------------------+------------+------------+------------+
| | | | | |
+-----------------------+-----------------------+------------+------------+------------+
| | | | | |
+-----------+-----------+-----------+-----------+------------+------------+------------+
12. Related party transactions
The Group's significant related parties are its subsidiaries as disclosed in the
Annual Report and Accounts for 31 January 2009.
During the period to 31 July 2009, the Board engaged Celerant Consulting
Limited, of which Alex Watson is Chairman. Costs of GBP 95,000 have been
incurred during the period.
13. General Information
The financial information for the year ended 31 January 2009 does not constitute
the full financial statements within the meaning of section 240 of the Companies
Act 1985. The full financial statements for that year were prepared in
accordance with IFRSs as adopted by the European Union, have been filed with the
Registrar of Companies. The auditors reported on those financial statements,
their report was unqualified, did not contain a a statement under either
sections 237(2) or section 237(3) of the Companies Act 1985 and did not include
references to any matters to which the auditor drew attention by way of emphasis
of matter.
The financial information for the six month ended 31 July 2009 and 31 July 2008
is unaudited.
The 2009 Annual Report has been sent to all shareholders. Additional copies are
available at the Company's registered office, Alexandra House, Midland Way,
Thornbury, Bristol, BS35 2NT. Telephone: (01454) 876003.
The Annual Report can be found on the website of Alexandra plc,
www.alexandra.co.uk.
INDEPENDENT REVIEW REPORT TO ALEXANDRA PLC
+-----+------------------------------------------------------------------------+
| 1. | Introduction |
+-----+------------------------------------------------------------------------+
| | |
+-----+------------------------------------------------------------------------+
| | We have been engaged by the Group to review the condensed consolidated |
| | set of financial statements in the half-yearly report for the six |
| | months ended 31 July 2009 which comprises a condensed consolidated |
| | income statement, a condensed consolidated statement of comprehensive |
| | income, a condensed consolidated statement of financial position as at |
| | 31 July 2009, a consolidated statement of changes in equity, a |
| | condensed consolidated statement of cashflows, comparative figures and |
| | associated notes. |
+-----+------------------------------------------------------------------------+
| | |
+-----+------------------------------------------------------------------------+
| | We have read the other information contained in the half-yearly report |
| | and considered whether it contains any apparent misstatements or |
| | material inconsistencies with the financial information in the |
| | condensed consolidated set of financial statements. |
+-----+------------------------------------------------------------------------+
| | |
+-----+------------------------------------------------------------------------+
| | This report is made solely to the Group in accordance with the terms |
| | of our engagement to assist the Group in meeting the requirements of |
| | the Listing Rules of the Financial Services Authority. Our review has |
| | been undertaken so that we might state to the Group those matters we |
| | are required to state to it in this report and for no other purpose. |
| | To the fullest extent permitted by law, we do not accept or assume |
| | responsibility to anyone other than the Group for our review work, for |
| | this report or for the conclusions we have reached. |
+-----+------------------------------------------------------------------------+
| | |
+-----+------------------------------------------------------------------------+
| 2. | Directors' responsibilities |
+-----+------------------------------------------------------------------------+
| | |
+-----+------------------------------------------------------------------------+
| | The half-yearly report is the responsibility of, and has been approved |
| | by, the directors. The directors are responsible for preparing the |
| | half-yearly report in accordance with the Disclosure and Transparency |
| | Rules of the United Kingdom's Financial Services Authority. |
+-----+------------------------------------------------------------------------+
| | |
+-----+------------------------------------------------------------------------+
| | As disclosed in note 1 the annual financial statements of the group |
| | are prepared in accordance with IFRS as adopted by the European Union. |
| | The condensed consolidated set of financial statements included in |
| | this half-yearly report have been prepared in accordance with |
| | International Accounting Standard 34, " InterimFinancial Reporting", |
| | as adopted by the European Union. |
+-----+------------------------------------------------------------------------+
| | |
+-----+------------------------------------------------------------------------+
| 3. | Our responsibility |
+-----+------------------------------------------------------------------------+
| | |
+-----+------------------------------------------------------------------------+
| | Our responsibility is to express to the Group a conclusion on the |
| | condensed consolidated set of financial statements in the half-yearly |
| | report based on our review. |
+-----+------------------------------------------------------------------------+
| | |
+-----+------------------------------------------------------------------------+
| 4. | 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 half yearly 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. |
+-----+------------------------------------------------------------------------+
| | |
+-----+------------------------------------------------------------------------+
| 5. | Conclusion |
+-----+------------------------------------------------------------------------+
| | |
+-----+------------------------------------------------------------------------+
| | Based on our review, nothing has come to our attention that causes us |
| | to believe that the accompanying half yearly financial information |
| | does not present fairly, in all material respects, the financial |
| | position of the entity as at 31 July 2009 and of its financial |
| | performance and its cash flows for the six-month period then ended in |
| | accordance with International Accounting Standard 34 as adopted by the |
| | European Union and the Disclosure and Transparency Rules of the United |
| | Kingdom's Financial Services Authority. |
| | |
+-----+------------------------------------------------------------------------+
| | |
+-----+------------------------------------------------------------------------+
| 6. | Emphasis of matter |
| | |
+-----+------------------------------------------------------------------------+
| | We draw attention to the following matters: |
| | We have considered the adequacy of the disclosure made in note 1 to |
| | the condensed financial statements which describes the uncertainty |
| | related to the outcome of the renegotiation of ongoing banking |
| | facilities. These matters indicate the existence of a material |
| | uncertainty which may cast significant doubt on the Group's ability to |
| | continue as a going concern. The condensed financial statements do not |
| | include the adjustments that would result if the Group were unable to |
| | continue as a going concern. Our opinion is not qualified in respect |
| | of this matter. |
| | As detailed in note 5 to the condensed financial statements, following |
| | a change in strategy by the company, certain stock is to be disposed |
| | by the company outside of its normal commercial channels. Provision |
| | has been made against the carrying value of this stock to reflect |
| | managements' best estimate of its net realisable value. However, in |
| | the absence of agreed contracts for disposal there is inherent |
| | uncertainty as to the net realisable value that can be achieved and |
| | accordingly the extent of provision that will be required. Our opinion |
| | is not qualified in this respect. |
| | |
+-----+------------------------------------------------------------------------+
Nexia Smith & Williamson Audit (Bristol) LLP
Registered Auditors, Chartered Accountants
Bristol
29 September 2009
This information is provided by RNS
The company news service from the London Stock Exchange
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