TIDMLMR
RNS Number : 7589U
Luminar Group Holdings PLC
21 October 2010
Luminar Group Holdings plc
Condensed consolidated financial information for the 26 weeks to
26 August 2010
Luminar Group Holdings plc ("Luminar" or "the Group") is the
leading operator of nightclubs in the UK, with 78 clubs as at the
end of August 2010 trading predominantly under the brands of Oceana
and Liquid.
H1 H1
2011 2010
Revenue (GBPm) 68.2 86.1
Earnings before Interest, Tax, Depreciation
and Amortisation* (GBPm) 13.9 20.1
Profit before tax* (GBPm) 1.8 5.2
(Loss) / Profit before tax from continuing
operations (GBPm) (35.7) 1.5
Earnings per share* (p) 1.3 5.6
Loss per share (p) 34.1 15.3
Net borrowings (GBPm) 85.0 104.6
* for continuing operations before exceptional items
<BETA> 2010 comparative is reclassified to reflect the
composition of discontinued operations at the latest balance sheet
date
Key Points:
-- New management team appointed to return Group's profitability
and to restore value for shareholders
-- Credit approved term sheet obtained for new banking facility,
subject to documentation
-- New strategy in place following research and analysis of the
sector
-- Same outlet sales performance for the seven weeks to 14
October shows a decline of 16.9% year-on-year, which represents an
improvement on the 20.2% decline on the same basis for the 26 weeks
to 26 August 2010.
-- Continued cost control has mitigated the effects of the sales
reduction
Simon Douglas, Chief Executive, said:
"The difficult trading environment experienced during the second
half of the last financial year continued into the first half of
this year. Despite this, we continued to generate cash and reduce
net debt. We now have a clear picture of the strategy we believe is
appropriate to reverse the downward trend. Management actions are
showing encouraging signs of driving footfall and volume. The Board
believes that the Group is now on the right path, although at the
very beginning, of returning value to Luminar's shareholders."
21 October 2010
Enquiries:
Luminar Group Holdings plc Tel: 01908 544100
Simon Douglas, Chief Executive
Philip Bowcock, Finance Director
College Hill Tel: 020 7457 2020
Matthew Smallwood
Jamie Ramsay
Trading in the period continued to be difficult with
significantly reduced sales, primarily derived from fewer customer
admissions. However the Group's operations continue to generate
cash and net borrowings reduced to GBP85.0m at the end of the
period.
Revenue in the continuing business for the 26 weeks to 26 August
2010 was 20.8% below the same period in the previous year, with
same outlet sales down 20.2%. Profit before tax in the first half
for the continuing business, excluding exceptional items, was
GBP1.8m, compared to GBP5.2m in the same period in the previous
year.
A new management team, which was appointed during the period,
has already instigated a number of initiatives and actions to fully
understand the issues in the business, creating a strategy to lead
the business back to long term growth and retain the Group's
position as the leading specialist nightclub operator in the
UK.
Of paramount importance to the sustainability of the Group was
to stabilise the Group's financial position. The Group today
announces that it has secured a new credit approved term sheet,
subject to documentation which, when completed, will provide
financial security to the Group.
Outline Strategy
Following research and evaluation of the business, the following
key strategic aims have been ascertained:
-- to optimise the trading estate;
-- to refresh the customer proposition based on feedback and
research; and
-- to have a financial structure more suitable for the current
size of the Group.
In the short term and over the next year, the Group intends to
continue to manage operations and its finances tightly, optimise
the shape of the Group by disposing of non-core assets, continue to
review the Group's products and make changes where necessary,
effectively manage key trading events and support all of this
through a greatly enhanced marketing strategy led by
e-commerce.
Much of this is already happening with initial inroads being
made into reversing the decline of revenue.
Operational Change
Detailed market research was commissioned and completed to
enable us to better understand the expectations of our customers in
the late night industry. This shows that our customers regard
appropriate music as being a key factor for a good night out and
that they are developing an increasingly diverse range of musical
tastes. Therefore, in addition to our mainstream dance sessions and
the speciality nights offered at a local level, we have partnered
with Ministry of Sound to address this diversity of musical tastes.
Ministry of Sound is a world-leading dance brand and in conjunction
with them we are now able to offer a series of events under their
well-known dance brands such as Hed Kandi and Dance Nation. We have
also undertaken a thorough review of our DJ's to ensure they are
providing an experience that our customers demand.
Our research also indicates that it is important to our
customers that they are able to attend live performances by
well-known acts or artists. To cater for this demand, we have
signed up live acts such as Calvin Harris and Basshunter to perform
in our clubs.
Many of our customers are students and so we have launched
"Fuzzy Logic" a new brand aimed specifically at the student market.
Launched during the important trading period of Freshers' Week, it
is already proving extremely popular in university cities and
towns.
We have reviewed our drinks range and pricing policies to make
it more customer focused. Our range now includes cocktails and
premium brands so that our clubs can cater for as wide a variety of
tastes as possible.
All of these initiatives are being introduced into our clubs and
the feedback to date has been positive. These initiatives, along
with excellent customer service, will drive an increase in
admissions and sales.
Over the coming half year, we will begin to selectively
refurbish a number of our clubs. These refurbishments will be aimed
at improving the customer experience and so drive more admissions.
In addition we will be re-opening our club in Norwich in the second
half of the financial year. It will be launched under the new
'Project' brand and will unveil our latest concepts, which are
aimed at providing a complete night out for our customers.
We have developed our estate plan during the period to ensure we
are operating in the optimum locations. As a result, we have
disposed of 4 properties in the 26 weeks to 26 August 2010
generating net sales proceeds of GBP3.4m. We will continue to
review our estate on an ongoing basis.
Results and financial review
Overall sales in the continuing business for the period totalled
GBP68.2m, a reduction of 20.8% on the previous year.
On a same outlet basis over a constant estate of 76 venues,
sales fell in the first half by 20.2% over the same period last
year. Within this same outlet basis, admission revenue fell by
26.5% on footfall down by 19.1%, while drinks revenue was down by
18.1%.
Within the continuing business, average sales per head in the
period were GBP12.33, a decrease of 1.1% over the previous year.
Within this total, average admission income per head fell by 10.0%
to GBP3.15, whilst drink sales per head increased by 1.7% to
GBP8.37.
Overall gross margin of 82.7%, which included 75.8% gross margin
on drinks, was slightly below the 83.0% achieved in the first half
of last year but exceeded the margins achieved as a whole for last
year of 82.6%. However with lower sales, actual gross profit in the
first half of GBP56.4m was GBP15.1m lower than the same period in
the previous year.
Operating costs continue to be tightly controlled with the focus
on ensuring that any reductions are not at the expense of customer
experience. The operational management of the clubs has been
streamlined and we now have four operating divisions across the
country, a reduction of three. A centralised support function has
been put in place to co-ordinate activities across the estate to
ensure that a consistent message and customer experience is being
delivered.
Earnings before interest, tax, depreciation and amortisation
("EBITDA") from continuing operations before exceptional items
totalled GBP13.9m in the first half, GBP6.2m or 31% below that
achieved over the same period the previous year due to lower
sales.
Lower capital investment in the period combined with the prior
year impairment charge contributed to a reduced depreciation and
amortisation charge of GBP8.4m (H1 2010: GBP11.8m). Net finance
costs of GBP3.6m (H1 2010: GBP3.0m) are higher than the same period
last year as interest receivable in respect of the loan note to The
3D Entertainment Group ("3DE") is no longer recognised.
Profit before tax in the continuing business before exceptional
items was GBP1.8m (H1 2010: GBP5.2m), which, together with a tax
charge of GBP0.5m, gave rise to basic earnings per share of 1.3p
(H1 2010: 5.6p). Included within the profit before tax is GBP0.5m
of other operating income, being insurance proceeds relating to
disruption to an operating venue.
Exceptional items in the continuing operations totalled GBP37.5m
before tax, including asset impairments of GBP34.3m. This is a
consequence of the further continued decline in trading seen during
the past six months which has resulted in a revised discounted cash
flow. Restructuring and reorganisation costs of GBP0.9m and a loss
on the disposal of 4 properties of GBP2.3m are also included in the
exceptional charge.
Discontinued operations after tax contributed a loss of GBP3.1m,
of which GBP2.9m represented exceptional costs in the period in
respect of a loss on disposal of discontinued operations.
Net loss from continuing and discontinued operations for the 26
weeks to 26 August 2010 was GBP34.2m (H1 2010: loss of
GBP9.6m).
The Group continues to generate cash. Net cash inflow from
operations in the first half was GBP8.3m (H1 2010: GBP5.8m). Timing
factors caused more cash expenditure to fall in the same period in
the previous year. In addition, the net cash inflow in the first
half benefited from a VAT refund of GBP1.4m in respect of VAT
overpaid on gaming machine income. Capital expenditure was
restricted to replacements only and totalled GBP0.5m (H1 2010:
GBP2.5m). No corporation tax was paid in the period, with no tax
expected to be paid this financial year.
In addition to cash generated from operations, Luminar raised
net proceeds of GBP3.4m from the sale of 4 properties. These
proceeds increased the cash held on the balance sheet at 26 August
2010 to GBP55.0m and reduced the Group's net borrowings to GBP85.0m
(H1 2010: GBP104.6m).
The Group's existing borrowings comprise a syndicated loan
facility which runs to August 2012 with a maximum drawdown of
GBP175.0m and interest costs of up to LIBOR plus 0.75%. We continue
to trade within covenant tests, with an adjusted EBITDA to net debt
ratio of 2.9 for the period ended 26 August 2010.
Strengthening our financial position
As noted in the previous announcements, the Group has been in
discussions with its banking syndicate on its existing banking
facilities. The Group now has attained a credit approved term sheet
for a new three year facility, subject to documentation. The Group
anticipates successfully completing the documentation process and
entering into this new facility over the next few weeks. Further
information will be provided once the refinancing exercise is
completed.
Current trading and outlook
The difficult trading environment experienced through the 26
weeks to 26 August 2010 has improved over the seven weeks to 14
October 2010. Compared to the same period last year same outlet
sales were down 16.9%. Same outlet admissions were down 14.7% with
admission income down 20.1% and drink sales down 16.3%. The
introduction of the initiatives described in this report are key to
this improvement and management are committed to ensuring that our
clubs deliver an experience that our customers demand.
Whilst the Group believes that the initiatives and actions taken
will provide the foundations for the recovery of performance and
restoration of shareholder value, the unhelpful macro-economic
environment that impacts on our customers' behaviour patterns and
their ability to spend means any recovery is expected to be
fragile.
Related parties
Related party transactions are disclosed in note 16 to the
condensed consolidated financial information.
Principal risks and uncertainties
The principal risks and uncertainties that could affect the
Group's business in the remaining six months of the financial year
are summarised below. Further details of the Group's risk profile
can be found in the 2010 Annual Report.
The key risk continues to be that of continued or worsening
economic conditions, particularly as they affect young people. The
Group competes for a share of the disposable income of its
customers with a wide range of other leisure activities and should
that income reduce, through greater unemployment or other economic
factors, then revenues available to the Group may reduce.
The seasonal pattern of the Group's income places great
importance on trade over the Christmas and New Year period.
Environmental factors such as very poor weather, or high incidence
of virus infections or other factors could deter customers from
visiting the Group's venues.
The Group benefits from a syndicated loan facility which extends
until August 2012. As outlined above, the Group has also received a
credit approved term sheet for a new three year facility, subject
to documentation, which will replace the existing facility. The
Directors consider the likelihood of the new facility not
concluding successfully to be remote.
The Group's projections indicate that cash and EBITDA will be
generated over the forthcoming year sufficient for the Group to
remain within the covenants under the new facility. However, given
the fragile nature of the economic recovery, in the event of a
continued deterioration in market conditions the Directors
recognise there is potential for budgeted headroom on the covenants
to be eroded. The Directors have identified available mitigating
actions that would be pursued to protect covenant headroom if
trading results decline against projections.
In the remote event that the new facility is not entered into,
the Group will continue to trade under its existing facility. The
Group's covenant headroom under the existing facility will be at
significantly lower levels than under the new facility, hence more
stringent mitigating actions would need to be successfully pursued.
Breach of the covenants would allow the bank to require immediate
repayment of the debt.
However, as noted above, the Directors consider the likelihood
of the new facility not being completed successfully to be remote,
and therefore the Directors are satisfied that the Group will
continue to operate within its covenants and that adequate
financial resources are available to the Group within circumstances
that can be reasonably foreseen.
Forward-looking statements
Certain statements in this consolidated financial information
for 26 weeks ended 26 August 2010 are forward-looking. Although the
Group believes that the expectations reflected in these
forward-looking statements are reasonable, it can give no assurance
that these expectations will prove to have been correct. Because
these statements involve risks and uncertainties, actual results
may differ materially from those expressed or implied by these
forward-looking statements.
The Group undertakes no obligation to update any forward-looking
statements whether as a result of new information, future events or
otherwise.
Luminar Group Holdings plc
Luminar House
Deltic Avenue
Rooksley
Milton Keynes, Bucks
MK13 8LW
By order of the Board
Simon Douglas Philip Bowcock
20 October 2010 20 October 2010
Chief Executive Finance Director
Statement of Directors' responsibilities
The Directors confirm that this condensed financial information
has been prepared in accordance with IAS 34, Interim Financial
Reporting, as adopted by the European Union, and that the interim
management report herein includes a fair review of the information
required by DTR 4.2.7 and DTR 4.2.8, namely:
- an indication of important events that have occurred during
the first six months and their impact on the condensed consolidated
financial information, and a description of the principal risks and
uncertainties for the remaining six months of the financial year;
and
- material related party transactions in the first six months
and any material changes in the related party transactions
described in the last annual report.
The Directors of Luminar Group Holdings plc are listed in the
Luminar Group Holdings plc Annual Report for the year ended 25
February 2010. A list of current Directors is maintained on the
Luminar Group Holdings plc website: www.luminar.co.uk.
By order of the Board
Simon Douglas Philip Bowcock
20 October 2010 20 October 2010
Chief Executive Finance Director
Independent review report to Luminar Group Holdings plc
Introduction
We have been engaged by the company to review the condensed
consolidated financial information for the half year ended 26
August 2010, which comprises the Consolidated Income Statement, the
Consolidated Statement of Comprehensive Income, the Consolidated
Balance Sheet, the Consolidated Cash Flow Statement, the Net Debt
Statement, the Consolidated Statement of Changes in Shareholders'
Equity, and the notes to the condensed consolidated financial
information. We have read the other information contained in the
condensed consolidated financial information for the half year
ended 26 August 2010 and considered whether it contains any
apparent misstatements or material inconsistencies with the
information in the condensed set of financial statements.
Directors' responsibilities
The condensed consolidated financial information for the half
year ended 26 August 2010 is the responsibility of, and has been
approved by, the directors. The directors are responsible for
preparing the condensed consolidated financial information in
accordance with the Disclosure and Transparency Rules of the United
Kingdom's Financial Services Authority.
As disclosed in note 2, the annual financial statements of the
group are prepared in accordance with IFRSs as adopted by the
European Union. The condensed consolidated financial information
for the half year ended 26 August 2010 has been prepared in
accordance with International Accounting Standard 34, "Interim
Financial Reporting", as adopted by the European Union.
Our responsibility
Our responsibility is to express to the company a conclusion on
the condensed consolidated financial information for the half year
ended 26 August 2010 based on our review. This report, including
the conclusion, has been prepared for and only for the company for
the purpose of the Disclosure and Transparency Rules of the
Financial Services Authority and for no other purpose. We do not,
in producing this report, accept or assume responsibility for any
other purpose or to any other person to whom this report is shown
or into whose hands it may come save where expressly agreed by our
prior consent in writing.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, 'Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity' issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK and Ireland) and consequently does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed consolidated financial
information for the half year ended 26 August 2010 is not prepared,
in all material respects 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.
PricewaterhouseCoopers LLP
Chartered Accountants
St Albans
20 October 2010
Notes:
(a) The maintenance and integrity of the Luminar Group Holdings
plc website is the responsibility of the directors; the work
carried out by the auditors does not involve consideration of these
matters and, accordingly, the auditors accept no responsibility for
any changes that may have occurred to the interim report since it
was initially presented on the website.
(b) Legislation in the United Kingdom governing the preparation
and dissemination of financial statements may differ from
legislation in other jurisdictions.
Consolidated Income Statement
for the half year ended 26 August 2010
Half year ended 26 August Half year ended 27 August
2010 (unaudited) 2009 (unaudited) (reclassified**)
----------------------- ------------------------------------ ------------------------------------
Exceptional Exceptional
Pre- items Pre- items
exceptional (note 9) Total exceptional (note 9) Total
Note items GBPm GBPm GBPm items GBPm GBPm GBPm
---------------- ----- ------------ ------------ -------- ------------ ------------ --------
Continuing
operations
Revenue 4 68.2 - 68.2 86.1 - 86.1
Cost of sales (11.8) - (11.8) (14.6) - (14.6)
Gross profit 56.4 - 56.4 71.5 - 71.5
Administrative
expenses (51.5) (37.5) (89.0) (63.3) (3.7) (67.0)
Other operating
income 0.5 - 0.5 - - -
---------------- ------------ ------------ --------
Profit / (loss)
from
operations 4 5.4 (37.5) (32.1) 8.2 (3.7) 4.5
Finance income 5 0.6 - 0.6 1.1 - 1.1
Finance costs 5 (4.2) - (4.2) (4.1) - (4.1)
------------ --------
Profit / (loss)
before
taxation 1.8 (37.5) (35.7) 5.2 (3.7) 1.5
Tax on profit
/ (loss) 6 (0.5) 5.1 4.6 (1.7) 0.5 (1.2)
---------------- ----- ------------ ------------ -------- ------------ ------------ --------
Profit / (loss)
for the period
from
continuing
operations
attributable
to equity
shareholders 1.3 (32.4) (31.1) 3.5 (3.2) 0.3
(Loss) / profit
from
discontinued
operations * 10 (0.2) (2.9) (3.1) 0.2 (10.1) (9.9)
---------------- ----- ------------ ------------ -------- ------------ ------------ --------
Profit / (loss)
for the period
attributable
to equity
shareholders 1.1 (35.3) (34.2) 3.7 (13.3) (9.6)
---------------- ----- ------------ ------------ -------- ------------ ------------ --------
Loss per share
from
continuing and
discontinued
operations 8
Basic (34.1p) (15.3p)
Diluted (34.1p) (15.3p)
---------------- ----- ------------ ------------ -------- ------------ ------------ --------
* The loss from discontinued operations is stated after tax
** Reclassified to reflect the composition of discontinued
operations at the latest balance sheet date
Consolidated Statement of Comprehensive Income
for the half year ended 26 August 2010
Half year ended Half year ended
26 August 2010 27 August 2009
(unaudited) (unaudited)
GBPm GBPm
------------------------------------------ ---------------- ----------------
Loss for the period (34.2) (9.6)
Other comprehensive income:
Cash flow hedges (net of tax) (0.5) 1.1
Other comprehensive income for the
period, net of tax (0.5) 1.1
Total comprehensive income for the period
attributable to equity shareholders (34.7) (8.5)
------------------------------------------ ---------------- ----------------
Consolidated Balance Sheet
As at 26 August 2010
27 August
26 August 2010 2009 25 February
(unaudited) (unaudited) 2010 (audited)
Note GBPm GBPm GBPm
--------------------- ----- --------------- ------------- ----------------
Non-current assets
Goodwill 130.8 171.9 130.8
Other intangible
assets 2.3 2.5 2.6
Property, plant and
equipment 177.0 297.7 226.9
Other non-current
assets 1.5 2.0 1.9
Trade and other
receivables - 17.3 -
--------------------- ----- --------------- ------------- ----------------
311.6 491.4 362.2
Current assets
Inventories 1.8 2.4 1.5
Trade and other
receivables 10.9 11.8 5.6
Cash and cash
equivalents 44.8 45.4 37.3
Monies on deposit 10.2 - 10.0
--------------------- ----- --------------- ------------- ----------------
Assets classified as 67.7 59.6 54.4
held for sale 10 3.2 2.4 2.1
--------------------- ----- --------------- ------------- ----------------
70.9 62.0 56.5
Total assets 382.5 553.4 418.7
--------------------- ----- --------------- ------------- ----------------
Current liabilities
Trade and other
payables (18.0) (12.1) (14.1)
Current tax
liabilities (43.8) (45.0) (42.8)
Deferred income (0.5) (0.5) (0.5)
Provisions (1.5) (1.9) (2.3)
(63.8) (59.5) (59.7)
Liabilities
classified as held
for sale 10 (0.7) (4.0) (0.7)
--------------------- ----- --------------- ------------- ----------------
(64.5) (63.5) (60.4)
Net current assets /
(liabilities) 6.4 (1.5) (3.9)
--------------------- ----- --------------- ------------- ----------------
Total assets less
net current assets
/ (liabilities) 318.0 489.9 358.3
Non-current
liabilities
Borrowings and loans 13 (140.0) (149.8) (139.9)
Derivative financial
instruments (14.5) (11.9) (13.8)
Deferred income (5.7) (6.0) (6.1)
Obligations under
finance leases (7.9) (7.9) (7.9)
Provisions (2.6) (0.7) (2.9)
Deferred tax
liabilities (2.0) (18.9) (7.9)
--------------------- ----- --------------- ------------- ----------------
(172.7) (195.2) (178.5)
Net assets 145.3 294.7 179.8
--------------------- ----- --------------- ------------- ----------------
Capital and reserves
Share capital 14 25.1 131.8 131.8
Share premium 25.8 25.8 25.8
Capital redemption
reserve 14 148.8 42.1 42.1
Equity reserve 1.9 1.4 1.7
Retained earnings (56.3) 93.6 (21.6)
--------------------- ----- --------------- ------------- ----------------
Shareholders' equity 145.3 294.7 179.8
--------------------- ----- --------------- ------------- ----------------
Consolidated Cash Flow Statement
for the half year ended 26 August 2010
Half year ended Half year ended
26 August 2010 27 August 2009
(unaudited) (unaudited)
Note GBPm GBPm
----------------------------------- ----- ---------------- ----------------
Cash flows from operating
activities
Net cash inflow from operations 11 8.3 5.8
Finance costs paid (4.1) (4.0)
Tax received - 2.2
4.2 4.0
----------------------------------- ----- ---------------- ----------------
Cash flows from investing
activities
Purchase of property, plant and
equipment (0.5) (2.5)
Purchase of intangible assets - (0.1)
Net proceeds from sale of
property, plant and equipment 3.4 0.4
Finance income received 0.4 -
3.3 (2.2)
----------------------------------- ----- ---------------- ----------------
Cash flows from financing
activities
Repayment of long-term borrowings - (20.0)
Net proceeds from issue of shares - 35.7
- 15.7
----------------------------------- ----- ---------------- ----------------
Net increase in cash and cash
equivalents 7.5 17.5
Cash and cash equivalents at
beginning of period 37.3 27.9
----------------------------------- ----- ---------------- ----------------
Cash and cash equivalents at end
of period 44.8 45.4
----------------------------------- ----- ---------------- ----------------
Net Debt Statement
for the half year ended 26 August 2010
Half year Half year
ended ended Year ended
26 August 27 August 25 February
2010 2009 2010
(unaudited) (unaudited) (audited)
Note GBPm GBPm GBPm
---------------------------- ----- ------------ ------------ -------------
Net increase in cash in the
period / year (7.5) (17.5) (9.4)
Cash outflow from monies
being placed on deposit (0.2) - (10.0)
Cash outflow from repayment
of debt - (20.0) (30.0)
---------------------------- ----- ------------
Movement in net debt in the
period / year (7.7) (37.5) (49.4)
Opening net debt 100.6 150.0 150.0
Closing net debt 11 92.9 112.5 100.6
---------------------------- ----- ------------ ------------ -------------
Consolidated Statement of Changes in Shareholders' Equity
(unaudited)
for the half year ended 26 August 2010
Capital
Share Share redemption Equity Retained
capital premium reserve reserve earnings Total
GBPm GBPm GBPm GBPm GBPm GBPm
--------------- -------- -------- ----------- -------- --------- -------
Brought
forward at 27
February
2009 121.9 - 42.1 1.2 102.1 267.3
Total
comprehensive
income for
the year - - - - (8.5) (8.5)
Share-based
payment
charge - - - 0.2 - 0.2
Issue of
shares 9.9 25.8 - - - 35.7
Carried
forward at 27
August 2009 131.8 25.8 42.1 1.4 93.6 294.7
--------------- -------- -------- ----------- -------- --------- -------
Brought
forward at 26
February
2010 131.8 25.8 42.1 1.7 (21.6) 179.8
Total
comprehensive
income for
the year - - - - (34.7) (34.7)
Cancellation
of deferred
shares (106.7) - 106.7 - - -
Share-based
payment
charge - - - 0.2 - 0.2
Carried
forward at 26
August 2010 25.1 25.8 148.8 1.9 (56.3) 145.3
--------------- -------- -------- ----------- -------- --------- -------
Notes to the condensed consolidated financial information
for the half year ended 26 August 2010
1 General information
The Company is a public limited company incorporated and
domiciled in the UK. The address of its registered office is
Luminar House, Deltic Avenue, Rooksley, Milton Keynes, Bucks, MK13
8LW.
The Company is listed on the London Stock Exchange.
This condensed consolidated financial information for the half
year ended 26 August 2010 was approved for issue on 20 October
2010.
This condensed consolidated financial information does not
comprise statutory accounts within the meaning of Section 434 of
the Companies Act 2006. Statutory accounts for the year ended 25
February 2010 were approved by the Board of Directors on 12 May
2010 and delivered to the Registrar of Companies. The report of the
auditors on those accounts was unqualified, did not contain an
emphasis of matter paragraph and did not contain any statement
under Section 498 of the Companies Act 2006.
This condensed consolidated interim financial information has
been reviewed, not audited.
2 Basis of preparation
This condensed consolidated financial information for the half
year ended 26 August 2010 has been prepared in accordance with the
Disclosure and Transparency Rules of the Financial Services
Authority and with IAS 34, Interim Financial Reporting, as adopted
by the European Union. The condensed consolidated financial
information should be read in conjunction with the annual financial
statements for the year ended 25 February 2010, which have been
prepared in accordance with IFRSs as adopted by the European
Union.
3 Accounting policies
Except as described below, the accounting policies adopted are
consistent with those of the annual financial statements for the
year ended 25 February 2010, as described in those annual financial
statements.
Taxes on income in the interim periods are accrued using the tax
rate that would be applicable to expected total annual
earnings.
The following new standards, amendments to standards or
interpretations are mandatory for the first time for the financial
year beginning 26 February 2010.
Amendments to IFRS 2, Share-based payments, effective for annual
periods beginning on or after 1 January 2010. These amendments
provide a clear basis to determine the classification of share
based payment awards in both consolidated and separate financial
statements. The amendments incorporate IFRIC 8 and IFRIC 11 into
the standard. The amendment also clarifies inconsistencies within
the definitions section of IFRS 2. This amendment has not had any
material impact on the Group.
Amendment to IAS 39, Financial instruments: Recognition and
measurement on eligible hedged items, effective for annual periods
beginning on or after 1 July 2009. This amendment makes two
significant changes. It prohibits designating inflation as a
hedgeable component of a fixed rate debt. It also prohibits
including time value in one-sided hedged risk when designating
options as hedges. The impact of this change must be applied
retrospectively in accordance with IAS 8, Accounting Policies.
Management have considered the impact of this amendment at 26
August 2010 and determined that there is no material impact of this
change on the result stated for the half year ended 27 August
2009.
IFRS 3 (revised), Business combinations, effective for annual
periods beginning on or after 1 July 2009. The main changes to this
standard are that directly attributable costs such as advisers'
fees and stamp duty will be charged to the income statement,
revisions to contingent cash consideration in the period following
the acquisition will be recorded in the income statement and any
difference between the fair value of the consideration in the buy
out of minority interests and the value of their reported minority
interest will be recorded against equity rather than goodwill. The
Group will apply IFRS 3 (revised) to any relevant transactions from
26 February 2010 onwards.
4 Segmental information
As reported at 25 February 2010, the Group has adopted IFRS 8
'Operating segments'.
IFRS 8 requires operating segments to be identified on the basis
of internal reports about components of the Group that are
regularly reviewed by the Chief Operating Decision Maker (CODM) to
allocate resources to the segments and to assess their
performance.
We report our segment information on the same basis as our
internal management reporting structure, which drives how our
company is organised and managed.
The Group is principally engaged as owner, developer and
operator of nightclubs and themed bars in the UK. The CODM has been
identified as the Senior Executive Management (SEM) that exercises
the day-to-day management function of the Group. Operational and
financial information, which is primarily at an individual club
level, is received by the CODM on a monthly basis. Luminar do not
distinguish between geography or brand. The club information does
not meet the quantitative thresholds as required by IFRS 8, as such
management have judged it appropriate to aggregate the financial
information relating to all clubs into a single reportable
segment.
All revenue is earned from sales to external customers.
5 Net finance costs
Net finance costs relating to continuing operations were as
follows:
Half year Half year
ended ended
26 August 27 August
2010 2009
GBPm GBPm
---------------------------------------- ----------- -----------
Interest payable on bank borrowings (3.9) (3.8)
Interest payable on obligations under
finance leases (0.2) (0.2)
Amortisation of issue costs on bank
loan (0.1) (0.1)
Finance costs (4.2) (4.1)
---------------------------------------- ----------- -----------
Income on bank deposits 0.4 -
Interest on loan to associate - 0.9
Other interest receivable 0.2 -
Fair value movements on derivatives
that do not meet the hedge accounting
criteria - 0.2
Finance income 0.6 1.1
---------------------------------------- ----------- -----------
Net finance costs (3.6) (3.0)
---------------------------------------- ----------- -----------
6 Tax on (loss) / profit
The taxation charge is based on the (losses) / profits for the
period and represents:
Half year Half year
ended ended
26 August 27 August
2010 2009 (reclassified*)
GBPm GBPm
----------------------------------- ----------- ----------------------
Current tax (charge) / credit
Continuing operations:
- Current period (1.1) (2.3)
- Adjustments in respect of prior
periods - 0.2
Discontinued operations:
- Current period 0.1 2.0
(1.0) (0.1)
----------------------------------- ----------- ----------------------
Deferred tax credit / (charge)
- Continuing operations 5.7 0.9
- Discontinued operations - 0.4
----------------------------------- ----------- ----------------------
5.7 1.3
----------------------------------- ----------- ----------------------
Total taxation credit / (charge)
- Continuing operations 4.6 (1.2)
- Discontinued operations 0.1 2.4
----------------------------------- ----------- ----------------------
4.7 1.2
----------------------------------- ----------- ----------------------
Income tax expense is recognised based on management's best
estimate of the full year effective rate of tax which is then
applied to the first half year results.
Luminar's policy is to recognise liabilities for uncertain tax
positions relating to open tax years, based on management's
assessment of the potential outcomes at the balance sheet date.
During the half year a tax charge of GBP0.5m (H1 2010: GBP1.7m*)
was recognised against a continuing profit before taxation
pre-exceptional items figure of GBP1.8m (H1 2010: GBP5.2m*). This
gives an effective rate of 30.9% (H1 2010: 31.5%*), which is
broadly comparable with that for the prior year half year end.
* Reclassified to reflect the composition of discontinued
operations at the latest balance sheet date
7 Dividends
As reported in the Annual Report approved on 12 May 2010, the
Board did not recommend a final dividend for the year ended 25
February 2010. No interim dividend payment is proposed for the half
year ended 26 August 2010.
8 (Loss) / Earnings per share
The calculation of basic earnings per share (EPS) is calculated
by dividing the earnings attributed to equity shareholders by the
weighted average number of shares in issue during the half year.
For diluted earnings per share the weighted average number of
ordinary shares in issue is adjusted to assume conversion of all
dilutive potential ordinary shares. The Group has two classes of
dilutive potential ordinary shares: share options granted to
Directors and employees where the exercise price is less than the
average market price of the Group's ordinary shares during the half
year; and the contingently issuable shares under the Group's
long-term incentive plan. At the half year end an assessment is
made as to whether the performance criteria for the vesting of
awards under the share option schemes of the Group is likely to be
met and any potential shares unlikely to be exercised are excluded
from the diluted EPS calculation.
An alternative measure of earnings per share has also been
presented below, that being earnings per share from continuing
operations pre-exceptional items, as the Directors believe that
this measure of pre-exceptional earnings from continuing operations
is more reflective of the ongoing trading of the Group.
A reconciliation of the earnings and weighted average number of
shares used in the calculations is set out below:
Half year ended 26 August 2010
------------------------------------ ----------------------------------------
Weighted
(Loss) / average number Per share
Earnings of shares amount
GBPm (in millions) (pence)
------------------------------------ ---------- ---------------- ----------
Basic and diluted EPS
Loss attributable to ordinary
shareholders (34.2) 100.4 (34.1)
Basic and diluted EPS from
continuing operations (31.1) 100.4 (31.0)
Basic and diluted EPS from
discontinued operations (3.1) 100.4 (3.1)
EPS from continuing operations
pre-exceptional items
Basic and diluted EPS from
continuing operations
pre-exceptional items 1.3 100.4 1.3
------------------------------------ ---------- ---------------- ----------
Half year ended 27 August 2009
(reclassified)
-------------------------------- --------------------------------------------
Weighted
(Loss) / average
Earnings number of Per share
(reclassified) shares amount
GBPm (in millions) (pence)
-------------------------------- ---------------- -------------- ----------
Basic and diluted EPS
Loss attributable to ordinary
shareholders (9.6) 62.7 (15.3)
Basic and diluted EPS from
continuing operations 0.3 62.7 0.5
Basic and diluted EPS from
discontinued operations (9.9) 62.7 (15.8)
EPS from continuing operations
pre-exceptional items
Basic and diluted EPS from
continuing operations
pre-exceptional items 3.5 62.7 5.6
-------------------------------- ---------------- -------------- ----------
All amounts included in the column headed '(Loss) / Earnings'
are taken from the face of the Consolidated Income Statement.
At 26 August 2010, as the Group is loss-making, any share
options in issue are considered to be 'anti-dilutive' based on the
exercise price and the weighted average market price and as such,
the calculation is the same for both basic and diluted earnings per
share.
9 Exceptional items
(a) Continuing operations
The comparative income statement is reclassified at each balance
sheet date to reflect the composition of discontinued operations at
the latest balance sheet date.
The Group incurred exceptional items on continuing operations as
follows:
Half year Half year
ended ended
26 August 27 August
2010 2009 (reclassified)
GBPm GBPm
----------------------------------------- ----------- ---------------------
Exceptional items relating to trading
Impairment of property, plant and
equipment (34.0) (0.1)
Impairment of lease premiums (0.3) (1.8)
Provision for loss on liquidation
of supplier - (0.8)
Provision for onerous lease commitments - (0.2)
Realised loss on disposals (2.3) -
Costs relating to reorganisation
and rationalisation (0.9) (0.8)
----------- ---------------------
Pre-tax exceptional items relating
to continuing operations (37.5) (3.7)
----------- ---------------------
Tax on exceptional items 5.1 0.5
Post-tax exceptional items relating
to continuing operations (32.4) (3.2)
----------------------------------------- ----------- ---------------------
Impairments of GBP34.3m (H1 2010: GBP1.9m) relate to property,
plant and equipment (GBP34.0m) and lease premiums (GBP0.3m),
reflecting the difference between the value in use of cash
generating units (e.g. discrete trading clubs) and their carrying
value. Management continue to keep the Property, Plant and
Equipment and Goodwill under review for impairment given the
uncertainty over the economic recovery.
A provision of GBP0.8m was recognised in the period to 27 August
2009 in relation to anticipated losses arising from the liquidation
of Eminence Leisure Limited, a key supplier of DJ's and live acts
to the Group, and in which the Group held a 20% equity share. This
amount remains fully provided for at 26 August 2010.
The loss on disposal of GBP2.3m relates to the disposal of 4
clubs and represents the difference between the net sales proceeds
received of GBP3.4m and the carrying value of the clubs at the date
of disposal of GBP5.7m.
(b) Discontinued operations
The comparative income statement is reclassified at each balance
sheet date to reflect the composition of discontinued operations at
the latest balance sheet date.
The Group incurred exceptional items relating to discontinued
operations as follows:
Half year Half year
ended ended
26 August 27 August
2010 2009 (reclassified)
GBPm GBPm
--------------------------------------- ----------- ---------------------
Impairment of property, plant and
equipment (0.1) (1.6)
Net increase in provision for onerous
lease commitments (0.2) (0.3)
Impairment of investment in associate - (3.6)
Provision against receivable due
from associate - (6.3)
Realised loss on disposals (2.4) -
Costs relating to reorganisation
and rationalisation (0.2) (0.3)
Pre-tax exceptional items relating
to discontinued operations (2.9) (12.1)
----------- ---------------------
Tax on exceptional items - 2.0
----------- ---------------------
Post-tax exceptional items relating
to discontinued operations (2.9) (10.1)
--------------------------------------- ----------- ---------------------
An impairment of GBP3.6m was recognised in the period to 27
August 2009 against the carrying value of the investment held in
The 3D Entertainment Group Limited ("3DE"). In addition, GBP6.3m
was provided in the same period against the receivable balance due
from 3DE in relation to a Vendor Loan Note and associated accrued
interest. See note 16 for further details.
10 Discontinued operations and non-current assets held for
sale
The comparative income statement is reclassified at each balance
sheet date to reflect the composition of discontinued operations at
the latest balance sheet date.
(a) Results of discontinued operations
The results of discontinued operations, which comprise clubs
either disposed of, or held for sale and forming part of the
Group's plan to exit from non-core operations, included within the
Consolidated Income Statement were as follows:
Half year Half year
ended ended
26 August 27 August
2010 2009 (reclassified)
GBPm GBPm
------------------------------------------ ----------- ---------------------
Revenue 0.4 2.6
Cost of sales and administrative
expenses (0.7) (2.8)
Loss before tax pre-exceptional
items (0.3) (0.2)
Attributable tax credit 0.1 0.4
------------------------------------------ ----------- ---------------------
(Loss) / profit after tax pre-exceptional
items (0.2) 0.2
Exceptional items (see note 9) (2.9) (12.1)
Attributable tax credit - 2.0
Loss from discontinued operations (3.1) (9.9)
------------------------------------------ ----------- ---------------------
(b) Assets and liabilities of clubs held for sale
At 26 August 2010 nine clubs were classified as held for
sale.
The major classes of assets and liabilities comprising the clubs
classified as held for sale were as follows:
27 August 25 February
26 August 2010 2009 2010
GBPm GBPm GBPm
------------------------------- --------------- ---------- ------------
Property, plant and equipment 2.9 2.3 2.0
Inventories 0.1 - -
Trade and other receivables 0.2 0.1 0.1
Total assets classified
as held for sale 3.2 2.4 2.1
Trade and other payables (0.1) (0.2) (0.1)
Provisions (0.6) (3.7) (0.5)
Deferred tax liabilities - (0.1) (0.1)
Total liabilities classified
as held for sale (0.7) (4.0) (0.7)
Net assets / (liabilities)
classified as held for
sale 2.5 (1.6) 1.4
------------------------------- --------------- ---------- ------------
11 Cash flow from operating activities and reconciliation of
movement in net
debt
A reconciliation of net cash inflow from operations is provided
below:
Half year Half year
ended ended
26 August 27 August
2010 2009 (reclassified)
GBPm GBPm
--------------------------------------- ----------- ---------------------
(Loss) / profit before taxation -
continuing operations (35.7) 1.5
Loss before taxation - discontinued
operations (3.2) (12.3)
----------- ---------------------
Loss before taxation (38.9) (10.8)
Depreciation and amortisation 8.4 11.8
Amortisation of lease premiums 0.1 0.1
Amortisation of issue costs on bank
loan 0.1 0.1
Impairment of property, plant and
equipment 34.1 1.7
Impairment of lease premiums 0.3 1.8
Impairment of investment in associate - 3.6
Movement in exceptional accrued costs
and provisions (0.6) 5.0
Loss on sale of property, plant and
equipment 4.7 0.3
Non-cash charges for share-based
payments 0.2 0.2
Net finance costs 3.6 3.0
12.0 16.8
Increase in inventories (0.4) (0.3)
Increase in receivables (6.1) (4.2)
Increase / (decrease) in trade and
other payables 3.4 (6.1)
Decrease in provisions (0.6) (0.4)
Net cash inflow from operations 8.3 5.8
--------------------------------------- ----------- ---------------------
The movement in net debt during the half year is analysed as
follows:
25 February 26 August
2010 Cash flow 2010
GBPm GBPm GBPm
--------------------------- ------------ ---------- ----------
Cash and cash equivalents 37.3 7.5 44.8
Monies on deposit 10.0 0.2 10.2
Loans due in more than
1 year (140.0) - (140.0)
--------------------------- ------------ ---------- ----------
Cash net debt (92.7) 7.7 (85.0)
Finance leases (7.9) - (7.9)
--------------------------- ------------ ---------- ----------
Net debt (100.6) 7.7 (92.9)
--------------------------- ------------ ---------- ----------
12 Property, plant and equipment
During the half year the Group acquired GBP0.5m (H1 2010:
GBP2.5m) of assets and disposed of GBP7.4m (H1 2010: GBP0.6m) of
assets. GBP8.1m (H1 2010: GBP11.2m) of depreciation was charged in
the half year, and an impairment provision of GBP34.1m (H1 2010:
GBP1.7m) was recognised.
The Group had capital commitments relating to property, plant
and equipment of GBP3.1m at 26 August 2010 (H1 2010: GBPnil). Of
this amount GBP2.4m is recoverable through insurance proceeds
relating to disruption to an operating venue.
13 Borrowings and loans
Amounts falling due after more than one year were as
follows:
27 August 25 February
26 August 2010 2009 2010
GBPm GBPm GBPm
-------------- --------------- ---------- ------------
Non-current:
Bank loan 140.0 150.0 140.0
Issue costs - (0.2) (0.1)
-------------- --------------- ---------- ------------
140.0 149.8 139.9
-------------- --------------- ---------- ------------
The movements in bank loans were analysed as follows:
GBPm
--------------------------------------- -------
Opening amount as at 27 February 2009 169.7
Repayment of borrowings (20.0)
Issue costs amortisation 0.1
Closing amount as at 27 August 2009 149.8
--------------------------------------- -------
Opening amount as at 26 February 2010 139.9
Repayment of borrowings -
Issue costs amortisation 0.1
Closing amount as at 26 August 2010 140.0
--------------------------------------- -------
14 Share Capital
On 30 April 2010, the Deferred Shares were redeemed and
cancelled. This has resulted in a reduction in Share Capital of
GBP106.7m with a corresponding increase in the Capital Redemption
Reserve. The number of Ordinary Shares in issue is unaffected by
this transaction.
15 Contingent assets and contingent liabilities
There are no material contingent assets or liabilities at 26
August 2010.
16 Related party transactions
The Group holds a debtor balance with Eminence Leisure Limited
of GBP0.8m in respect of services provided in prior periods.
Eminence Leisure Limited is an associate of the Group and has gone
into liquidation. The debtor balance was fully provided for at 27
August 2009 and remains fully provided for at 26 August 2010.
On 19 January 2007 the Group sold certain trade and assets of
its clubs to 3DE (an associate of the Group). Post completion a
transitional services agreement ("TSA") was put in place between
the Group and 3DE for the provision of certain services. A vendor
loan note of GBP19.3m (plus accrued interest totalling GBP5.3m)
remains owed to the Group. On 26 February 2010, 3DE was placed into
administration. The administration process is ongoing. From the
date of administration, the Group no longer continues to accrue any
interest on the 3DE loan notes and have provided no further
services under the TSA. All debtor balances relating to 3DE were
fully provided for in the accounts for the year ended 25 February
2010 and remain fully provided for at 26 August 2010.
During the period, a property was sold to No Saints Limited.
Stephen Thomas, who resigned from the Board on 1 March 2010, is a
director of that company. The transaction was in the ordinary
course of business and at arm's length. Net sales proceeds of
GBP0.6m were received and the balance outstanding at 26 August 2010
was GBPnil.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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