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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 |
THE LONGMEAD GROUP PLC ("Longmead" or "the Company") PRELIMINARY RESULTS FOR 15 MONTHS TO 2 NOVEMBER 2002 CHAIRMAN'S STATEMENT Trading results The trading results (including finance costs) for the 15 month period under review show a loss, before exceptional items, of £144,231. Exceptional costs amounted to £409,374 giving an overall loss for the 15 months of £553,605 (loss before tax for 12 months to 29 July 2001: £592,796). The exceptional items arise from the closure of our Chard factory, reorganisation costs and a further write-down of stocks. These are commented on in more detail below. Turnover for the 15 month period was £3,922,538 showing an increase on the previous period of 5.6% on an annualised basis. This result, although encouraging, was still very disappointing as we budgeted for a much larger increase in sales. However, we experienced some delays in our larger customers taking new products into store and the overall level of retail demand for these accounts was below expectation. Sales of our imported products have shown a substantial increase and our policy of strengthening our sales and marketing team to increase penetration in the general trade area has been largely successful, with an increase in sales in this part of the business of over 30% on an annualised basis. Similarly although our exports were below budget partly due to the strength of the pound, we still posted an increase of 41% compared with the previous year. Closure of Chard factory As a result of the decline in the ceramic side of our business, we decided in June 2002 to close our factory in Chard and to consolidate production of ceramics at our main factory in Axminster. We had an option to break the lease of the Chard factory at the end of 2002 and thus avoid further rental costs. The closure was completed in July 2002 and we incurred some £115,000 of exceptional costs as a result. This amount is accounted for by redundancy payments, removal costs, dilapidations and stock write-off. All expenditure relative to Chard will cease at the end of December 2002. We estimate that we will achieve annual savings of about £70,000 from the closure. Further exceptional costs of approximately £37,000 were incurred from the restructuring of our sales and marketing function. This is commented on below. Sales and marketing department As a result of the departure of our Marketing Director in August 2002 we decided to restructure our sales and marketing function. Whereas previously the two functions were separated, we decided to combine them under a new Head of Sales and Marketing. Chris Newman resigned his position as Sales Director in October 2002; Chris had been our Sales Director for 16 years and played a significant part in the growth of the Company since its establishment in 1986. I would like to thank him for the contribution he has made over this period. He continues to assist us as a consultant dealing with our sales in Ireland and Scotland. The restructuring resulted in exceptional costs of £37,000. The new Head of Sales and Marketing joined us in October 2002. Mark Toolan has an impressive record of achieving sales growth in previous positions and we are confident that he will add a new dimension to our business. Stock write-off during the period During the period under review the nature of our business has continued to change, resulting in a further need to provide for slow moving and obsolete stocks. Our two major DIY customers have required further alterations to product ranges resulting in a significant write-off of packaging and of finished goods. In addition, continuing changes in our door furniture business have necessitated a further write-off of raw materials and work in progress. A total of £256,667 has been provided in the accounts to cover these items. Bathroom accessories As reported last year, we have continued our policy of improving our product ranges particularly with imported products. As well as offering a comprehensive range of bathroom accessories we now import storage items for the bathroom. We launched a new catalogue in January - "Bathroom Storage Solutions" - and this has achieved good results. The new products were shown, together with an existing range, at the Kitchens, Bedrooms and Bathroom Exhibition at the NEC in January 2002. We had a very successful show and, as a result, a large number of new general trade retail accounts have been opened. Sales to our major customers have been disappointing with some of the larger DIY groups undergoing restructuring or changes in ownership. Traditionally sales to major outlets have been mainly ceramic but we are working hard to introduce new metal products into this sector of our business. As reported earlier exports have improved by some 41% although they still represent a comparatively small part of our total turnover. We have been successful in improving our penetration into the French market and we are anticipating improved sales from the Benelux countries. Door furniture This part of our business has shown a small decline in the period. Competition from Far East imports has intensified and the demand for ceramic products has remained static. We have maintained our export sales in the period but the strength of the pound makes it difficult to increase sales. It is our intention to review the whole of this operation during the coming year and to place emphasis on increasing our imports from the Far East, particularly metal products. Balance sheet In spite of the exceptional costs and the loss for the year, the balance sheet remains satisfactory. In February 2002 we placed 1,975,000 Ordinary shares at 20p each to raise £370,000 net of expenses. This was to provide additional working capital to enable us to expand our imports from the Far East. However the placing at 20p per share has diluted net assets per share. At the last year end they were 74.7p per share. Following the placing and after taking into account the results for the period, shareholders' funds now stand at 45.0p per share. We have continued to repay the medium term loan and at the end of October the outstanding balance was £825,000. At the end of the period our bank borrowings as a percentage of shareholder funds was 45.9%. Dividend As a result of the loss for the year and the cost of the exceptional items your Board has decided not to recommend the payment of a final dividend. However, it remains our policy to restore dividend payments as soon as our profit performance permits. Future prospects Although we achieved some sales growth in the last period, we must do a great deal better in the coming year to return the Company to profitability. We are concentrating our efforts on selling and marketing where we are investing additional costs. The market is likely to remain static at best so we must strive to increase market share. However, the economic climate is worrying with the prospect of war in the Middle East, increased taxes in April and a decline in consumer confidence all likely to make trading difficult. The year ahead will therefore represent a major challenge although it will also present new opportunities of which I believe we are in a position to take advantage. In conclusion, I would like to thank the management and staff of the Company for all their hard work and commitment during the period. R E W Newman Chairman THE LONGMEAD GROUP PLC CONSOLIDATED PROFIT AND LOSS ACCOUNT 66 weeks ended 2 November 2002 Before Exceptional 66 weeks 52 weeks exceptional costs ended ended costs (Note 1) 2 November 29 July 2002 2002 2002 2001 £ £ £ £ TURNOVER 3,922,538 - 3,922,538 2,970,694 Cost of sales (2,725,161) (372,099) (3,097,260) (2,558,191) ________ _______ ________ ________ GROSS PROFIT 1,197,377 (372,099) 825,278 412,503 Distribution costs (873,082) - (873,082) (574,463) Administrative expenses (361,152) (37,275) (398,427) (324,871) ________ _______ _______ _______ OPERATING (LOSS) (36,857) (409,374) (446,231) (486,831) ________ _______ Interest receivable and 3 1,750 similar income Interest payable and (107,377) (107,715) similar charges _______ _______ (LOSS) ON ORDINARY ACTIVITIES BEFORE TAXATION (553,605) (592,796) Tax credit on loss on - 63,773 ordinary activities _______ _______ (LOSS) ON ORDINARY ACTIVITIES AFTER TAXATION (553,605) (529,023) _______ _______ RETAINED (LOSS) FOR THE PERIOD (553,605) (529,023) ======= ======= (LOSS) PER SHARE (11.79)p (14.66)p There are no recognised gains and losses other than the gains and losses set out in the profit and loss account. THE LONGMEAD GROUP PLC CONSOLIDATED BALANCE SHEET At 2 November 2002 2 November 29 July 2002 2001 £ £ FIXED ASSETS Intangible Assets 27,981 - Tangible Assets 2,199,399 2,351,062 _______ _______ 2,227,380 2,351,062 _______ _______ CURRENT ASSETS Stocks 1,363,643 1,546,765 Debtors 733,457 562,150 Cash at bank and in hand 1,219 1,557 _______ _______ 2,098,319 2,110,472 CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR (1,058,350) (869,514) _______ _______ NET CURRENT ASSETS 1,039,969 1,240,958 _______ _______ TOTAL ASSETS LESS CURRENT LIABILITIES 3,267,349 3,592,020 CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR (755,541) (897,030) _______ _______ 2,511,808 2,694,990 ======= ======= CAPITAL AND RESERVES Called up share capital 558,439 360,939 Share premium account 1,397,747 1,224,824 Capital redemption reserve 19,000 - Revaluation reserve 275,329 281,669 Profit and loss account 261,293 827,558 _______ _______ TOTAL EQUITY SHAREHOLDERS' FUNDS 2,511,808 2,694,990 ======= ======= THE LONGMEAD GROUP PLC CONSOLIDATED CASH FLOW STATEMENT 66 weeks ended 2 November 2002 2002 2001 £ £ CASH FLOW FROM OPERATING ACTIVITIES (125,707) (38,276) Returns on investment and servicing of finance (105,907) (108,652) Taxation - 45,981 Capital expenditure and financial investment (69,006) (37,576) _______ _______ NET CASH (OUTFLOW) BEFORE FINANCING (300,620) (138,523) Financing - Increase in 170,631 302,695 debt _______ _______ (DECREASE)/INCREASE IN (129,989) 164,172 CASH ======= ======= NOTES TO THE ACCOUNTS 1. EXCEPTIONAL COSTS 2002 2001 £ £ Stock write-offs 256,667 541,790 Factory closure costs 115,432 - Reorganisation of Board and compensation for redundancy 37,275 10,466 ___________ __________ 409,374 552,256 ====== ====== 2. EARNINGS PER ORDINARY SHARE The calculation of the basic loss per share is based on the weighted average number of shares in issue during the financial year of 4,695,213 (2001: 3,609,391) and on the loss attributable to ordinary shareholders of £553,605 (2001: £529,023). 3. The financial information on the Group set out above does not constitute statutory information within the meaning of section 240 of the Companies Act 1985. The statutory accounts for the ended 2 November 2002 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 2002 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 No 1 Riding House Street, London, W1A 3AS for two months from the date of this announcement.
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