Interim Results

RNS Number:2660Z
Walker (Thomas) PLC
03 March 2006


Chairman's Statement on the Interim Results for the half year ending
31 December 2005

The Thomas Walker Group is negotiating a difficult period of transition as it
seeks to contain the accelerating decline of garment accessories whilst, at the
same time, it develops its main activities into other areas of engineering.

In pursuit of this policy, the Group has set out to gain volume in metal
stamping to ensure fuller utilisation of its manufacturing capacity. The
acquisition, at the end of December 2005, of the business and certain assets of
the Leslie Group (which is now trading as TW Stamping) represents a significant
further step in this strategy. At the same time, staffing levels were reduced to
match the residual garment accessory work available within the United Kingdom.

The trading results do not incorporate any turnover relating to the Leslie
business and hence compare directly with the preceding periods. Compared with
the preceding half year to June 2005, they show an improvement at the operating
level, prior to redundancies costs.

Turnover rose by 5.1% to #2,674,962 (2004 - #2,544,203) and Operating Profit,
remained at just above break-even at #41,901, prior to a charge for redundancies
of #41,498. The Operating Profit after redundancies was #403 (2004 - #99,848).
At the pre-tax level, after interest and redundancy costs, the result was a loss
of #16,335 (2004 - #93,304 profit).

Once again the results reflect the relentless erosion of European garment
manufacturing. The problems facing the sector are illustrated by a further
decline of 30% in clothing accessories from Birmingham within the past 12
months. This process has not yet reached its conclusion.

The loss of textiles volume has been compensated in part by encouraging growth
in the identity business, although this is a commodity trade where margins are
substantially lower than in garment accessories. For this reason Thomas Walker
(UK) Ltd - the Birmingham operation - yielded reduced pre-tax profits on almost
identical sales.

The Hong Kong operations produced healthy growth and improved profitability. The
lower margins in textiles, prevailing in Asia and on the Indian sub-continent,
prevent the growth from compensating fully the reduction of volume and profit
within the UK business.

Brass stamping activity continued to provide steady growth. However, timing
difficulties and delays experienced in passing on higher raw material and fuel
costs, especially the dramatic 25% rise in metal prices between June and
December 2005, have impacted on margins and profits. The Group is now beginning
to recover these increased costs from customers.

Initial indications in relation to the newly acquired TW Stamping business are
encouraging. In the coming months the Group will concentrate on relocating the
new stamping facilities to the Guests and Thomas Walker factories, prior to
vacating the Leslie premises, which are held on a short term lease. The costs of
the amalgamation will be phased throughout 2006.

For the Group as a whole, we are cautious on the outlook for the second half of
the current year. The full benefits of the first stage of rationalisation within
brass stampings are, as previously announced, not expected to materialise before
June 2006 and we do not anticipate any significant improvement in the difficult
trading conditions for garment accessories.

The Board will maintain the interim dividend at 0.15p per share (2005 - 0.15p
per share). This will be paid on 7 April 2006 to shareholders on the register at
17 March 2006.





Group Profit and Loss Account
for the six months ended 31 December 2005

                                             Unaudited   Unaudited
                                            Six Months  Six Months         Year
                                                 Ended       Ended        Ended
                                              31/12/05    31/12/04     30/06/05
                                                    #            #            #
--------------------------------------------------------------------------------
Turnover                                    2,674,962    2,544,203    5,265,563
Net operating expenses                     (2,674,559)  (2,444,355)  (5,162,531)
--------------------------------------------------------------------------------
Operating profit                                  403       99,848      103,032
--------------------------------------------------------------------------------
Net interest payable                          (16,738)      (6,544)     (21,627)
--------------------------------------------------------------------------------
(Loss)/profit on ordinary activities 
 before taxation                              (16,335)      93,304       81,405
Taxation                                            -      (27,991)     (75,875)
--------------------------------------------------------------------------------
(Loss)/profit on ordinary activities 
 after taxation                               (16,335)      65,313        5,530
--------------------------------------------------------------------------------
(Loss)/earnings per share - basic 
 and diluted                                    (0.27)p      1.06p         0.09p
--------------------------------------------------------------------------------

All results in the period were from continuing operations.




Group Statement of Total Recognised Gains and Losses
For the six months ended 31 December 2005

                                             Unaudited   Unaudited
                                            Six Months  Six Months         Year
                                                 Ended       Ended        Ended
                                              31/12/05    31/12/04     30/06/05
                                                    #            #            #
--------------------------------------------------------------------------------
(Loss)/profit for the financial period 
 attributable to the parent company           (16,335)      65,313        5,530 
Exchange differences on retranslation 
 of net assets of subsidiary                    1,803         (173)      (2,882)
--------------------------------------------------------------------------------
Total recognised gains and losses relating 
 to the period                                (14,532)      65,140        2,648
--------------------------------------------------------------------------------




Group Balance Sheet
at 31 December 2005

                                             Unaudited   Unaudited
                                              31/12/05    31/12/04     30/06/05
                                                          Restated     Restated
                                                     #           #            #
--------------------------------------------------------------------------------
Fixed assets
Intangible assets                              433,298     397,800      276,333
Tangible assets                              3,795,885   2,651,945    2,907,641
Investments                                        104         104          104
--------------------------------------------------------------------------------
                                             4,229,287   3,049,849    3,184,078
Current assets
Stocks                                       1,170,555     841,672      912,695
Debtors                                      1,863,473   1,522,626    1,663,204
Cash at bank and in hand                       201,947      20,349      239,098
--------------------------------------------------------------------------------
                                             3,235,975   2,384,647    2,814,997
Creditors: amounts falling due within 
 one year                                   (1,587,216)   (990,791)  (1,477,120)
--------------------------------------------------------------------------------
Net current assets                           1,648,759   1,393,856    1,337,877
--------------------------------------------------------------------------------
Total assets less current liabilities        5,878,046   4,443,705    4,521,955
Creditors:amounts falling due after 
 more than one year                         (1,545,401)          -     (134,625)
Provision for liabilities and charges          (82,726)    (63,282)     (82,839)
Deferred income                                      -      (4,200)           -
--------------------------------------------------------------------------------
                                             4,249,919   4,376,223    4,304,491
--------------------------------------------------------------------------------
Capital and reserves
Called up share capital                        308,000     308,000      308,000
Share premium account                           15,200      15,200       15,200
Profit and loss account                      3,926,719   4,053,023    3,981,291
--------------------------------------------------------------------------------
Equity shareholders' funds                   4,249,919   4,376,223    4,304,491




Group Statement of Cash Flows
for the six months ended 31 December 2005


                                             Unaudited   Unaudited
                                            Six Months  Six Months         Year
                                                 Ended       Ended        Ended
                                              31/12/05    31/12/04     30/06/05
                                                     #           #            #
--------------------------------------------------------------------------------
Net cash inflow from operating activities       61,822     425,257      285,774

Returns on investments and servicing 
 of finance 
Net interest paid                              (11,638)     (6,544)     (22,860)

Taxation
Corporation tax paid                           (61,154)          -       (7,687)
Repayment of prior year corporation tax              -           -        3,022

Capital expenditure and financial investment
Payments to acquire tangible fixed assets      (82,609)   (160,131)    (309,254)
Receipts from sales of tangible fixed assets         -           -        3,125
Deferred receipt (see note below)                    -           -      505,250

Acquisitions and disposals
Purchase of business                        (1,396,466)          -            -
Equity dividends paid                          (40,040)    (40,040)     (49,280)
--------------------------------------------------------------------------------
Net cash (outflow)/inflow before 
 management of liquid resources and 
 financing                                  (1,530,085)    218,542      408,090

Financing
Repayment of bank loan                        (150,785) (1,000,000)    (849,215)
Proceeds from new bank loan                  1,500,000     220,916            -
Repayment of finance leases                    (26,438)          -            -
--------------------------------------------------------------------------------
Net cash inflow/(outflow) from financing     1,322,777    (779,084)    (849,215)
--------------------------------------------------------------------------------
Decrease in cash in the period                (207,308)   (560,542)    (441,125)
--------------------------------------------------------------------------------
Note: Deferred receipt for sale of land and buildings by Guests to Thomas Walker
PLC prior to the acquisition of Guests by Thomas Walker PLC




Notes to the Statements
At 31 December 2005

Prior year adjustment

Following the implementation of FRS 21 - Events after the balance sheet date -
and the enabling amendments to the Companies Act 1985, a proposed dividend can
be recognised only in the period in which it is declared by the company (usually
when approved by shareholders in general meeting) or paid.  Previously,
dividends were accounted for in the period to which they related, irrespectively
of when a liability for such dividends arose.

A prior year adjustment has been recorded to the group balance sheets as at 31
December 2004 and 30 June 2005 to exclude from creditors: amounts falling due
within one year proposed dividends of #9,240 and #40,040 respectively, and to
add these items back to retained profits in the respective periods then ended.  
The dividends proposed out of retained profits at 31 December 2004 and 30 June
2005 of #9,240 and #40,040 respectively, were shown as dividends payable for the
period ended 31 December 2004 and year ended 30 June 2005 respectively, are now
shown as paid dividends in the year ended 30 June 2005 and period end 31
December 2005 respectively.

Acquisition

On 20 December 2005 the Group purchased the business and certain assets of
Leslie Group Limited, whose principal activity is the manufacture and finishing
of non-ferrous stampings, for a total cash consideration of #1,305,649.

The purchase price of the assets which are estimated to be their provisional
fair values were:

                                                                     Fair Value
                                                                              #
--------------------------------------------------------------------------------
Tangible fixed assets                                                   957,250
Stock                                                                   276,649
--------------------------------------------------------------------------------
                                                                      1,233,899
--------------------------------------------------------------------------------
Consideration paid                                                    1,305,649
Cost of acquisition                                                      90,817
--------------------------------------------------------------------------------
                                                                      1,396,466
--------------------------------------------------------------------------------
Goodwill arising on acquisition                                         162,567
--------------------------------------------------------------------------------

As the trade and assets were acquired at the period end, there was no impact on
Group profit.


Group Reserves Restated

                                             Unaudited   Unaudited
                                            Six Months  Six Months         Year
                                                 Ended       Ended        Ended
                                              31/12/05    31/12/04     30/06/05
                                                     #           #            #
--------------------------------------------------------------------------------
At start of period                           3,981,291   4,027,923    4,027,923
Total retained (loss)/profit for 
 the period                                    (16,335)     65,313        5,530
Exchange differences on retranslation 
 of net assets of subsidiary                     1,803        (173)      (2,882)
Dividend payments in period                    (40,040)    (40,040)     (49,280)
--------------------------------------------------------------------------------
At end of period                             3,926,719   4,053,023    3,981,291
--------------------------------------------------------------------------------

Dividend payment

Equity dividends on ordinary shares of 0.15p per share, (Company total interim
dividend of #9,240) will be paid to those shareholders on the register at the
close of business on 17 March 2006, payable on 7 April 2006.

The interim statement will be sent to shareholders and is available to the
public at the registered office: Catesby Park, Eckersall Road, Kings Norton,
Birmingham, B38 8SE.

The figures for the financial year ended 30 June 2005 are based on an abridged
version of the audited accounts of the Group which carried an unqualified audit
report filed with the registrar of companies.




                      This information is provided by RNS
            The company news service from the London Stock Exchange

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