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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Longmead Grp. | LSE:LGM | London | Ordinary Share | GB0002249075 | ORD 10P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 7.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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THE LONGMEAD GROUP PLC ("LONGMEAD" OR "THE COMPANY")
Preliminary Results for the 52 weeks ended 29 October 2005
CHAIRMAN'S STATEMENT
Trading Results
The trading results for the year, before exceptional items, show a loss of £153,000 (2004: £264,000). During the
first six months of the year steady progress was made with the half year results showing a small loss of just
£6,000. As indicated at the half year end, however, the second half was expected to be difficult as retail sales
slowed, particularly in the DIY sector, and our customers reduced their stock levels. In the event, the retail
market was tougher than anticipated with sales in the second half being less than £1 million, giving total sales
for the year of £2.26 million (2004: £2.5 million). To counter the effect of the lower level of sales, overheads
were reduced even further and this has produced the improvement at the operating level, after adjusting for the
profit on the sale of the building last year. Our trading results were helped by the fact that we have managed to
maintain our gross margin levels.
In order to reduce our overheads we vacated rented premises of some 5,000 sq feet adjacent to our main factory.
The closure costs are included as exceptional items in the accounts. Our overheads costs are now at a level where
a comparatively small increase in sales will result in the Company operating at a profit.
We continue to increase the percentage of our sales which are imported from the Far East. We have maintained our
ceramic manufacturing operation as we have, so far, been unable to find suitable quality products from the Far
East or Eastern Europe. We are continually reviewing our manufacturing operation but in the absence of a viable
alternative your Board believe that it would have a serious detrimental effect to cease ceramic manufacturing.
The number of employees in manufacturing is now just ten, and our total number of employees has been reduced to
32.
New Product Development
The long term strategy of the Company is to develop a much broader product offering of imported products in order
to increase substantially the level of sales. However, it is important that we offer products that are right for
the market place but are also sufficiently different from those offered by our competitors. To achieve this, we
have spent a great deal of time investigating market opportunities and researching new products. As reported
earlier, we launched a new range of door furniture at the end of 2005 which we expect to increase sales to this
sector of the market.
At the KBB Exhibition in January 2006 we launched a whole new range of products including bathroom furniture,
shower equipment and bathroom scales. The initial response to this at the Exhibition was very encouraging
particularly for bathroom furniture where the unit sales value will be far greater than our normal range of
products. Orders are now being placed with overseas suppliers for delivery to customers in the middle of the
year. We should see the benefit of sales of these products in the second half of the current financial year.
Issue of Additional Share Capital
On 7 December 2004, shareholders approved resolutions increasing the authorised share capital of the Company and
authorising the Board to issue shares without reference to the rights of pre-emption set out in Section 89 (i) of
the Companies Act 1985.
The authority to issue additional shares applied for a period of 15 months from the date the resolution was passed
and has therefore now expired.
Although a number of discussions were held during the year with a view to issuing additional equity, it was not
found possible to reach a satisfactory agreement with interested parties which would have benefited all
shareholders. The restructuring of our borrowings has provided additional working capital for the Company.
However, your Board is of the opinion that an injection of additional equity is still desirable to assist with the
longer term growth of the Company and it is therefore proposed that the authority to issue additional shares be
renewed for a period of another year. Accordingly a resolution has been included in the agenda for the Annual
General Meeting to seek shareholders' agreement for the renewal of the authority.
Balance Sheet
At the end of the financial year shareholders' funds stood at £1.62 million (2004 £1.83 million). Net assets per
share have therefore declined to 29.1p per share, although a valuation of our freehold property carried out during
the year showed a surplus of over £300,000 compared with the value in the year end balance sheet. Stocks are still
high but the introduction of new ranges has resulted in increased stocks of imported items.
During the year we restructured our borrowings as a result of moving our banking arrangements from Barclays Bank
plc to HSBC Bank plc. HSBC has provided the Company with additional long term loans and has improved our short
term borrowing arrangements. This has given us much more flexibility in managing our foreign imports.
However, as a result of the loss for the year the Company, although operating within its facilities, was in breach
of its banking covenant at the year end, but HSBC has waived the requirement to comply. The banking facilities
are due for renewal in May 2006, at which time, subject to achieving the sales budget, they will be adequate for
our requirements.
Future Prospects
The present economic situation gives cause for concern with retailers reporting lower sales and the level of
unemployment rising. Substantial cost increases are occurring in respect of power, distribution and business
rates. We are also experiencing large increases in freight costs with our imported products. Labour costs
continue to increase with very little prospect of passing on price increases to our customers. In spite of this
we are operating off a lower cost base than at any time in our recent past. We are starting to see improved sales
coming through as a result of new product development, aggressive marketing and an improved customer portfolio.
In spite of past disappointments, your Board feels that we have now turned the corner and the current year should
show a significant improvement in the Company's fortunes.
I would, finally, like to thank the management and staff of the Company for their efforts and support during the
year.
R E W Newman
Chairman
23 March 2006
CONSOLIDATED PROFIT AND LOSS ACCOUNT
52 weeks ended 29 October 2005
Before Exceptional 52 weeks 52 weeks
exceptional items ended ended
items (Note 1) 29 October 30 October
2005 2005 2005 2004
£ £ £ £
TURNOVER - continuing operations 2,263,377 - 2,263,377 2,500,920
Cost of sales (1,395,583) (53,646) (1,449,229) (1,553,212)
--------- -------- ----------- -----------
GROSS PROFIT 867,794 (53,646) 814,148 947,708
Distribution costs (638,362) - (638,362) (834,083)
Administrative expenses (333,298) - (333,298) (4,830)
(includes 2004: £354,102 profit on sale of
building) ---------- -------- ----------- -----------
OPERATING /LOSS)PROFIT (103,866) (53,646) (157,512) 108,795
- continuing operations
Interest receivable and similar income 147 - 147 141
Interest payable and similar charges (48,938) - (48,938) (55,736)
---------- -------- ----------- -----------
(LOSS)/PROFIT ON ORDINARY (152,657) (53,646) (206,303) 53,200
ACTIVITIES BEFORE TAXATION ---------- --------
Tax on (loss)/profit on ordinary activities - -
----------- -----------
(LOSS)/PROFIT ON ORDINARY (206,303) 53,200
ACTIVITIES AFTER TAXATION ----------- -----------
(LOSS)/RETAINED PROFIT FOR THE (206,303) 53,200
FINANCIAL YEAR =========== ===========
(LOSS)/EARNINGS PER ORDINARY SHARE (3.69)p 0.95p
There are no recognised gains and losses for the current or preceding financial period other than as stated in the
profit and loss account.
CONSOLIDATED BALANCE SHEET
At 29 October 2005
2005 2004
£ £
FIXED ASSETS
Intangible assets 18,981 21,981
Tangible assets 1,398,547 1,461,291
--------- ---------
1,417,528 1,483,272
CURRENT ASSETS
Stocks and work in progress 1,304,774 1,282,030
Debtors 420,866 385,455
Cash at bank and in hand 1,855 3,687
--------- ---------
1,727,495 1,671,172
CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR (741,778) (739,339)
--------- ---------
NET CURRENT ASSETS 985,717 931,833
--------- ---------
TOTAL ASSETS LESS CURRENT LIABILITIES 2,403,245 2,415,105
CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR (778,899) (584,456)
--------- ---------
TOTAL NET ASSETS 1,624,346 1,830,649
========= =========
CAPITAL AND RESERVES
Called up share capital 558,439 558,439
Share premium account 1,397,747 1,397,747
Capital redemption reserve 19,000 19,000
Revaluation reserve 260,113 265,185
Profit and loss account (610,953) (409,722)
--------- ---------
TOTAL EQUITY SHAREHOLDERS' FUNDS 1,624,346 1,830,649
========= =========
CONSOLIDATED CASH FLOW STATEMENT
52 weeks ended 29 October 2005
2005 2004
£ £
CASH FLOW FROM OPERATING ACTIVITIES (138,401) (50,298)
Returns on investments and servicing of finance (49,554) (55,281)
Capital expenditure and financial investment (8,863) 772,877
--------- ---------
NET CASH (OUTFLOW)/INFLOW BEFORE FINANCING (196,818) 667,298
Financing - increase/(decrease) in debt 65,447 (645,522)
--------- ---------
(DECREASE)/INCREASE IN CASH IN THE PERIOD (131,371) 21,776
========= =========
NOTES TO THE ACCOUNTS
52 weeks ended 29 October 2005
1. EXCEPTIONAL ITEMS
2005 2004
£ £
Stock write-offs 39,335 -
Factory closure costs and redundancy payments 14,311 16,572
Reorganisation of Board and compensation for redundancy - 20,039
Profit on sale of warehouse building - (354,102)
------ ---------
53,646 (317,491)
====== =========
2. (LOSS)/EARNINGS PER ORDINARY SHARE
The calculation of the basic earnings per share is based on the weighted average number of shares in issue during
the financial year of 5,584,391 (2004: 5,584,391) and on the loss attributable to ordinary shareholders of
£206,303 (2004: £53,200 profit).
3. The financial information on the Group set out above does not constitute statutory information financial year
within the meaning of section 240 of the Companies Act 1985. The statutory accounts for the 52 weeks ended 29
October 2005 will be finalised on the basis of the financial information presented by the directors in this
preliminary announcement and will be delivered to the Registrar of Companies following the Group's Annual General
Meeting.
4. Copies of the 2005 Report and Accounts will be sent to shareholders in due course. Further copies will be
available from the registered office of The Longmead Group plc, Millwey Industrial Estate, Axminster, Devon, EX13
5HU and from the Company's nominated adviser, Smith & Williamson Corporate Finance Limited at 25 Moorgate, London
EC2R 6AY for one month from the date of this announcement.
The Longmead Group PLC
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