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Share Name | Share Symbol | Market | Type |
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RemeGen Co Ltd | TG:REG | Tradegate | Ordinary Share |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 1.69 | 1.54 | 1.73 | 0.00 | 09:00:01 |
RNS Number:3210P Regent Inns PLC 03 September 2003 Wednesday 3rd September 2003 PRESS RELEASE Regent Inns PLC Preliminary results for the 52 week period ending 5th July 2003 Regent Inns plc ("Regent" or "the Company"), the operator of late-night, entertainment-led bars, today announces headline results for continuing operations showing a 28.5% increase in sales and a 25.3% increase in EBITDA. Following the Company's significant programme to dispose of its unbranded pub estate, the results for the continuing operations are highlighted separately below. The Total Company results include the to be discontinued unbranded pub operations, the disposal of which Regent is in the process of completing. As advised last year, the strategic decision to dispose of the Company's unbranded pub operations and focus entirely on its branded businesses has resulted in reduced Total Company earnings for the year. Financial highlights: Continuing operations * Turnover up by 28.5% to #110.8m (2002: #86.2m) * Like for like sales for Walkabout and Bar Risa/Jongleurs brands down 6.7% and 7.6% respectively, as previously indicated * EBITDA before exceptional items increased by 25.3% to #27.2m (2002: #21.7m) * Operating profits before goodwill amortisation and exceptional items up by 19.4% to #20.0m (2002: #16.7m) * Return on capital employed for Walkabout and Bar Risa/Jongleurs brands of 28.5% and 25.3% respectively * Profit before tax, goodwill amortisation and exceptional items #14.4m Total Company * Turnover #114.3m (2002: #124.6m) * Operating profit before goodwill amortisation and exceptional items #19.4m (2002: #21.5m) * Exceptional losses and fundamental reorganisation costs #8.9m * Earnings per share before goodwill amortisation and exceptional items 10.9p (2002: 12.2p) * Final dividend maintained at 3.36p, totalling 5.18p (2002: 5.18p) Corporate progress: * Eight new Walkabouts opened and one further site converted in the year; 41 in total * One new Bar Risa/Jongleurs opened and one further site converted in the year; 15 in total * Sales at Walkabout and Bar Risa/Jongleurs up 35.3% and 40.5% to #70.5m and #27.7m respectively * Average weekly sales of #43,400 and #44,300 achieved for Walkabout and Bar Risa/Jongleurs respectively * Combined operating profit margin increase of two percentage points to 45.8% for Walkabout and Bar Risa/Jongleurs brands * Total disposal proceeds of #34.5m received Commenting on the results, Peter Savage, Chairman of Regent, said: "I am pleased to report on a strong financial performance from our branded operations during the year, despite the most challenging of conditions in our market place. The strong trading performances of both the Walkabout and Bar Risa/Jongleurs brands over the last 12 months not only fully endorse the decision to reposition Regent as a focused operator of late-night, entertainment-led venues but also reinforce the premium quality positioning of our brands. We have continued to resist the temptation of heavy price discounting as we do not believe that such actions will benefit either our brands or our market sector in the long-term. We believe that focusing on the quality and profitability of our brands will ensure that we maintain their differentiation and long term success." - Ends - For further information, please contact: Regent Inns plc Tel: 020 8375 3000 Stephen Haupt, Chief Executive Simon Rowe, Finance Director Merlin Financial Tel: 020 7606 1244 Paul Downes Mob: 07900 244 888 Vanessa Maydon Mob: 07802 961 902 Attached: Chairman's Statement Chief Executive's Review Financial Review Group P&L, Balance Sheet, Cash Flow Statement. Statement of Reorganised Gains & Losses, Notes to the Accounts Chairman's Statement Review of the year I am pleased to report on a strong financial performance from our branded operations during the year, despite the most challenging of conditions in our market place. As advised last year, the strategic decision to dispose of the Company's unbranded pub operations and focus entirely on its branded businesses has resulted in reduced total Company earnings for the year. Nevertheless the strong trading performance of both the Walkabout and Bar Risa/Jongleurs brands over the last 12 months fully endorses the decision to reposition Regent as a focused operator of late-night, entertainment-led venues. These results not only support our decision to focus on developing and managing our branded portfolio, but also reinforce its premium quality positioning. We have continued to resist the temptation of heavy price discounting as we do not believe that such actions will benefit either our brands or our market sector in the long term. Whilst this decision has impacted our like-for-like sales performance, we believe that focusing on the quality and profitability of our brands will ensure that we maintain their differentiation and long term success. The sale of the unbranded pub operations continued during the year. Of the 58 pubs originally identified for disposal, completion has now taken place on 39 sites with total proceeds received of #34.5m which have been used to reduce the Company's debt. We were disappointed at the appointment of the administrative receivers in June 2003 to Porter Black Holdings to whom we were in the final stages of selling 17 pubs for #4.3m. These pubs, which the receivers are currently managing on a day to day basis on our behalf, are now being re-marketed along with four further unbranded pubs which had originally been retained for potential future conversion to branded sites. Initial interest in these pubs has been encouraging. In June 2003, administrative receivers were appointed to the Unchained Growth Pub Companies which owed the Company #1.9m. Results Sales from continuing operations (ongoing) in the year increased by 28.5% to #110.8m (2002: #86.2m). Operating profits from continuing operations (ongoing) before goodwill amortisation and exceptional items increased by 19.4% to #20.0m (2002: #16.7m). Earnings before interest, tax, depreciation and amortisation (EBITDA) from continuing operations (ongoing) before exceptional items increased by 25.3% to #27.2m. Total Company profit before tax, goodwill amortisation and exceptional items in the previous year which comprised 53 weeks, was #16.5m. This included operating profits of #4.8m from the unbranded pub operations that subsequently became categorised as continuing operations to be discontinued. In the year under review profit before tax from continuing operations (ongoing), before goodwill amortisation and exceptional items was #14.4m. Total Company earnings per share before goodwill amortisation and exceptional items are 10.9p (2002: 12.2p). Exceptional losses in the year are #8.9m which are analysed in the Financial review. Capital expenditure in the year was #42.8m, reflecting in particular the strong roll out programme for Walkabout and Bar Risa/Jongleurs. Net bank debt increased by #3.0m to #71.5m, with gearing increasing to 134% (2002: 123%). Dividend The Board is recommending an unchanged final dividend of 3.36p to shareholders which, together with the interim dividend of 1.82p, totals 5.18p for the year. This will be paid, subject to shareholders' consent, on 12 November 2003 to those shareholders on the register at 17 October 2003. Once again, we are pleased to offer a dividend reinvestment plan for shareholders. Corporate Governance Whilst changes in requirements in this area have had little impact on the operation and management of the Company, we have increased the level of detail in several sections of the Report and Accounts to meet the reporting requirements of the new Combined Code, some of which take effect from November this year. We will be putting the Directors' Remuneration Report itself to a shareholder vote at this year's AGM for the first time. People In such a challenging trading environment, I am especially proud of our people and particularly those who work tirelessly within our venues looking after our customers. Their positive attitude and resourcefulness is a constant source of enjoyment and motivation for everyone in the Company. On behalf of the Board I would like to thank all of our staff for their unfailing contribution. Current trading and prospects The testing market conditions evidenced throughout most of last year have continued into the early weeks of the current financial year as we had anticipated. However, the Company continues to develop its brands to address these conditions and they remain amongst the strongest licensed retail brands in the sector. In the eight weeks to 30th August 2003 sales growth from continuing operations was 13.4% despite like-for-like sales for Walkabout and Bar Risa/Jongleurs remaining negative at 9.0%. Whilst 9.0% is somewhat greater than we had anticipated, reflecting the impact of the extraordinary hot weather during the majority of this short period, we believe it to be unrepresentative of our expectations for the year ahead. We therefore remain confident about the prospects for the profitable development of the Company for the coming year. Chief Executive's Review Strategy Regent's strategy is based upon the principles of profitable growth and sustainability. The Company is focused upon the development of high quality late-licensed venues which will be developed and managed as clearly differentiated brands. We will continue to invest in both Walkabout and Bar Risa /Jongleurs, the UK's leading liquor-led brands, in addition to creating further High Street opportunities. We will support this strategy by focusing on the development of our staff and the pursuit of operating efficiencies and cost reductions. Growth will be organic and through the opening of new venues. Overview Challenging market conditions, a weak sporting calendar and yet more bureaucracy, regulation and associated costs have been the external themes of the year. By addressing these challenges in a prompt, robust and responsible fashion, the Company and its brands have continued to make solid progress both operationally and financially. Continued profit growth from Walkabout and Bar Risa/Jongleurs has been achieved through tight control of retail pricing, labour costs and the supply chain resulting in a combined operating profit margin increase of 2.0 percentage points to 45.8% for these brands. Other key financial measures including average weekly sales, venue profitability and return on capital employed have also remained at the top end of sector performance. In addition, head office costs have been reduced by #1.3m mainly in connection with the disposal of the unbranded pub estate. A total of nine new venues were opened in the year comprising eight Walkabouts and one Bar Risa/Jongleurs, which was significantly down on our original forecast, due to the more volatile and uncertain market conditions. The initial success of these new venues, which include important locations such as Blackpool, Middlesbrough, Bournemouth, Leeds and Plymouth has been encouraging. We also converted three retained unbranded pubs. One in Wimbledon was converted into a Walkabout, one in Reading was converted into a Bar Risa/Jongleurs and the other one in Hertford was converted into our potential third brand, The Stone House. These venues have exceeded our trading expectations since opening and, in the case of The Stone House, encourage us to undertake further trials of this potential brand in the year ahead, including the conversion of another unbranded pub. The development of The Stone House into a strong, complementary brand within our portfolio will also initially enable us to maximise profitable performance from both present and future Jongleurs venues by providing the opportunity to mix Jongleurs with either Bar Risa, Walkabout or The Stone House. The performance of the unbranded pubs retained for potential future conversion was impacted by the difficult trading conditions and their overall trading was disappointing. In the year, three pubs from this estate were converted into branded operations and a further two will be converted in the current year. Additionally four further pubs are now being marketed for sale as our more measured approach to capital expenditure would have extended the periods before their conversion to an unacceptable timescale. Our property pipeline for new venues will also continue to take a more measured approach for the current year, with six Walkabouts and two Jongleurs planned to open. Total capital expenditure is therefore expected to be #30m in the year ahead. In a service-led business, the internal development of our management and staff is of paramount importance. Our "Step Forward" staff training programme initiated in 2001, is now embedded within the business. 78% of our front line staff had completed all six basic modules at the year end with 2,500 intermediate modules having been voluntarily taken up by our staff. In addition, 23 Managers in Training have passed the final advanced stages of the programme over the past two years and have now progressed to become venue managers. This commitment to our staff and managers continues to underpin our passion to deliver operational and financial excellence. The Company-wide initiative to introduce an integrated purchase order system (IPOS) has continued throughout the year. The system enables venue managers to place orders electronically with suppliers, receipt the goods/services and then automatically matches quantities and prices to supplier invoices. The system is now live in 50% of our venues with full implementation due by December 2003. Licensing Reform The new licensing bill has now received Royal Assent and we are already making preparations for the costly and time-consuming transitional process including the change from Magistrates to Local Authority control. Even at this stage however, the full impact of the Bill upon our business and the entire licensed industry remains unclear and we therefore await the publication of detailed guidelines with some apprehension. Whilst we support many of the overall objectives of the Bill, we are dismayed at the additional bureaucracy involved along with even more costs and barriers to business growth. Brand Review Walkabout 2003 2002 Total sales - #m 70.5 52.1 Average gross weekly sales - #K 43.4 44.6 Like for like sales % (6.7) 10.6 ROCE % 28.5 This year we opened a further nine venues including two in Walkabout's original heartland of Central London (Shaftesbury Avenue and Temple) where trading has been particularly pleasing. This brought the total number of Walkabouts at the year end to 41. Total sales in the period increased by #18.4m to #70.5m with average gross weekly sales remaining strong at #43,400. Operating margins improved by 1.0 percentage point with total operating profit before fixed costs increasing by 38.2%. Return on capital employed for the year was 28.5%. The difficult trading environment coupled with aggressive discounting from many other High Street operators and a relatively weak sporting calendar, contributed to a fall in like-for-like sales of 6.7% (2002: +10.6%). Several new initiatives for building sales in Walkabout were piloted during the year. These included live music tours by Southern Hemisphere bands, Talkabout @ Walkabout and a Sports Model Search which have complemented ongoing sales initiatives which focus on key calendar events such as Australia Day. Working in conjunction with our suppliers to create an awesome occasion, sales on Australia Day this year were four times those of a normal Sunday in January. Our focus for the year ahead will be to continue this style of promotional activity and concentrate on driving sales through creating customer experiences without the need to introduce value destroying discounting. Since the start of the current year, we have opened two new venues in Durham and Edinburgh, with the Edinburgh location being our first totally integrated Walkabout and Jongleurs venue. Four further venues are planned to open in the year and we also plan to convert one further unbranded pub along with re-branding the Bar Risa in Watford into a Walkabout. New developments continue to benefit from constant re-evaluation of design and fit-out following consultation with customers, operators, designers and developers. Changes to lighting, flooring, furniture, infrastructure and general decor have been introduced, thus ensuring the continual evolution of the brand. As a result, the more recent Walkabouts including those that have recently been refurbished, combine a more comfortable and relaxing backdrop to daytime and early week trading, whilst maintaining the durability and scale for high energy late night trading later in the week. As the leading venue for watching sport, Walkabout is well placed to benefit from the Rugby World Cup this autumn and the Euro 2004 football finals during a five-week period in June 2004. The success of the respective England sides will have a major influence on customer interest in these events. On current form, the prospects are encouraging - at least for rugby! Bar Risa/Jongleurs 2003 2002 Total sales - #m 27.7 19.7 Average gross weekly sales - #K 44.3 39.2 Like for like sales % (7.7) ROCE % 25.3 The combined attraction of a High Street bar alongside an exhilarating and unique Jongleurs comedy club has been a winning formula for over 20 years. Trading at our three latest openings, Birmingham (which opened in June 2002), Leeds and Reading has been outstanding. As a result, total sales for the brand grew by 40.5% to #27.7m with corresponding average gross weekly sales increasing from #39,200 to #44,300 per venue per week. Strong disciplines over Jongleurs show capacity, yields and tariffs were maintained throughout the year resulting in a 12% year on year reduction in capacity at like-for-like venues. Although like-for-like sales were down 7.7% the brand increased its overall operating profit margin by 4.6 percentage points and achieved a total operating profit increase of 58.6% before fixed costs. Return on capital employed was 25.3% for the year. Following the introduction of the Customer Relationship Management System earlier in the year, a new Jongleurs website and on-line booking facility was launched during the Spring, embracing many innovative design features. As a result visitor numbers to the website have doubled and costs per booking have begun to reduce as customers book on-line in greater numbers. Our customer database has increased from approximately 100,000 in 2001 to over 300,000 in 2003 following a series of successful data capture initiatives. Customer feedback scores, a critical weekly measure of both the brands' and the comedians' performance, have also continued to improve. "Word of mouth" marketing now generates significant advance ticket sales. Jongleurs has now become second only to the BBC as the world's largest employer of stand-up comedy talent. To celebrate this achievement in conjunction with our first new opening of the current year in Edinburgh, we launched a national search for new talent under the banner headline "Stand and Deliver". From over 300 entrants the eventual winner performed live at Jongleurs during the Edinburgh Fringe Festival and was subsequently awarded a 12 month contract to perform throughout the Jongleurs estate. In the current year we have already opened a new Jongleurs venue in Edinburgh and plan to open a further venue, this time combined with The Stone House, later in the year. This will bring the total number of Jongleurs venues to 17. We also intend to rebrand three Bar Risa venues as The Stone House in addition to rebranding the Watford Bar Risa into a Walkabout. FINANCIAL REVIEW Results The results for the year under review report in separate columns the financial performance of the continuing operations ongoing (continuing operations) and continuing operations to be discontinued (discontinued operations). The continuing operations comprise our branded operations; Walkabout and Bar Risa/ Jongleurs, the third brand development venues and 11 unbranded pubs retained for future conversion to branded operations. The discontinued operations represent the trading performance of the remaining unbranded pub operations, the disposal of which was announced in the previous financial year. Sales from continuing operations have increased by 28.5% to #110.8m, with sales in Walkabout increasing by 35.2% and Bar Risa/Jongleurs by 40.5%. Operating profits from continuing operations before goodwill amortisation and exceptional items increased by 19.4% to #20.0m. The progress made during the year on the disposal of unbranded pub operations has significantly reduced the financial scale of the discontinued operations. At the beginning of the year under review 24 unbranded pubs were in the discontinued operations, compared with 58 at the beginning of the previous year. Of the 24, with the exception of one unbranded pub, these pubs became the subject of exchanged sales contracts during the year. In June 2003, as a result of Porter Black Holdings Ltd and Unchained Growth Pub Companies entering insolvency arrangements, 19 unbranded pubs reverted to and remained in discontinued operations at 5th July 2003. Sales from discontinued operations were #3.5m (2002: #38.4m) and the operating loss before exceptional items was #0.6m (2002:profit of #4.8m). Total Company sales and operating profits before goodwill amortisation and exceptional items decreased by 8.3% to #114.3m and 10.0% to #19.4m. A key measure of the cash generative qualities of the Company is earnings before interest, tax, depreciation and amortisation (EBITDA). EBITDA before exceptional items from continuing operations increased by 25.3% to #27.2m and the conversion of sales to EBITDA (on the same basis) reduced slightly to 24.6% (2002: 25.2%). Total Company EBITDA before exceptional items was #26.8m (2002: #28.6m). Interest The net interest charge increased by #0.6m to #5.6m reflecting the increased level of borrowings resulting from our capital expenditure on new venues offset by proceeds from the disposal of the unbranded pub operations. Interest capitalised as part of the new venue development totalled #0.7m (2002: #0.7m). The net interest charge is covered 3.4 times (2002: 4.3 times) by operating profits before exceptional items. Fixed charge cover is 1.9 times (2002: 2.1 times) representing the number of times interest plus rent costs is covered by operating profits before rent. Taxation The Company has a cash tax rate payable on profits of 17.0% (2002: 16.0%) which is significantly below the UK corporation tax rate of 30% due to the accelerated capital cost allowances received on our investment in new venues. The effective total tax rate on profits from continuing operations before the prior period adjustment of #0.5m over provision for tax in prior years is 32.0% (2002: 33.2%). This rate includes a provision for tax deferred into future years that may become payable. The provision for future tax liabilities arises predominantly from capital cost allowances deducted for tax purposes being significantly greater than the depreciation charge used for accounting purposes. The total provision for deferred taxation is #14.1m (2002: #11.9m) and as the Company intends to continue to invest in the roll out of its branded venues, this provision should increase and is therefore unlikely to become payable in the foreseeable future. Exceptional items Exceptional losses for the year are #8.9m (2002: #17.1m) before the associated tax credit of #1.7m (2002: #5.5m), which reduces the net loss to #7.2m (2002: #11.6m). The losses include #1.9m in respect of operating exceptionals, #8.0m of fundamental reorganisation costs and #1.0m profit on the sale of fixed assets. The exceptional losses and fundamental reorganisation costs include: * #1.9m provision against the debt due from the Unchained Growth Pub Companies which entered administrative receivership in June 2003. The proceeds from the sale of pubs that were the subject of a first charge as security for the debt are not anticipated to be in excess of the related costs of disposals and their net book value. * A #3.4m loss arising from the reduced anticipated proceeds, net of related costs, for the pubs that were the subject of a sale and purchase agreement that did not complete with Porter Black Holdings Ltd. * A provision for onerous leases of #3.1m has been made in accordance with FRS 12 - "Provisions, contingent liabilities and contingent assets". * Losses of #1.5m as a result of the net proceeds last year from the disposal of our unbranded pub operations being lower than anticipated. The losses include a #1.0m reduction in the value of pubs that have attracted limited buyer interest. The previously estimated sales proceeds have been reduced to nil and provisions made for the anticipated costs of financial inducements to attract buyers. The profit on sales of fixed assets include:- * A #3.1m profit arising from a sale and leaseback transaction that completed in March 2003. * Losses on disposal of fixed assets total #2.1m and include a provision for the anticipated shortfall between net sales proceeds and the net book value of four pubs originally retained for conversion to our branded operations. Shareholder returns Total Company earnings per share, before goodwill amortisation and exceptional items reduced by 10.0% to 10.9p (2002: 12.2p). The earnings per share from continuing operations calculated allocating net interest payable to continuing operations in both years increased by 32.4% to 11.4p (2002: 8.6p). The proposed dividend of 5.18p per share is covered 2.1 times by post tax profits compared with 2.3 times in the prior year. The dividend yield based on the mid market share price on 5th July 2003 of 68.5p, is 7.6%. Cash flow The Company continues to be highly cash generative. Net cash inflow from operations, before cash exceptional items at #27.7m (2002: #28.6m) which represents 143% (2002: 133%) of operating profits. Free cash flow (being cash from operations less payments of interest, tax, dividends and refurbishment of existing venues and cash exceptional items) was #10.7m (2002: #10.9m), representing 11.9p per share (2002: 12.1p). Total proceeds from sale of fixed assets were #24.3m. This includes #16.6m from the disposal of the unbranded operations, bringing the cumulative total to #34.5m. These funds were used initially to reduce debt before being reinvested in the brand roll out programme. Capital Expenditure As a result of the more measured approach to new openings, capital expenditure reduced to #42.8m from #48.9m in the prior year. Capital expenditure on new branded venues and conversions was #36.6m, which includes #5.0m on venues due to open in the current financial year. The Company continues to maintain the venues to the highest standards reinvesting #5.1m in the refurbishment of existing venues, representing 4.4% of sales (2002: 4.7%). The reinvestment programme included a #1.0m refurbishment of Walkabout Nottingham, which since re-opening has generated a return on the investment greater than the Company's hurdle rate of 28%. In the year, the Company increased the percentage of capital expenditure funded from free cash flow to 25.0% compared to 22.3% in the prior year. Capital expenditure funded from disposal proceeds was 56.7% (2002: 36.5%) Funding Net debt increased in the year by #3.0m to #81.0m, which includes #7.0m of convertible loan notes. Net bank gearing at the balance sheet date was 134% (2002: 123%). Net bank gearing before full provision for deferred tax would be 106% (2002: 101%). The Company has #39.9m of unutilised committed bank facilities at the balance sheet date. Treasury policy The Company's treasury policy is to ensure the availability of funds to meet its future requirements and minimise exposure to fluctuations in interest rates. The Board monitors and approves treasury policy. To manage the Company's exposure to fluctuations in interest rates, the majority of the borrowings are hedged using interest rate swaps. At the balance sheet date the Company had negotiated interest rate swaps agreements for #70m of its debt, covering a three year period at an average rate of interest of 6.16%. 98% of net bank debt is now the subject of fixed rate swaps. The Company maintains business and cash flow models that forecast cash requirements in the short, medium and long term. These forecasts are reviewed regularly by the Board. CONSOLIDATED PROFIT AND LOSS ACCOUNT for the 52 weeks ended 5 July 2003 Continuing 52 weeks 53 weeks Continuing operations ended ended operations to be 5 July 2003 6 July 2002 ongoing discontinued Total Total (note 6) Note #'000 #'000 #'000 #'000 Turnover 110,757 3,505 114,262 124,642 --------- --------- --------- --------- Net operating costs 5 (91,186) (4,145) (95,331) (103,566) Net operating costs exceptional 5 - (1,912) (1,912) (890) --------- --------- --------- --------- (91,186) (6,057) (97,243) (104,456) --------- --------- --------- --------- Operating profit 19,571 (2,552) 17,019 20,186 Profit on sales of fixed assets 1,001 - 1,001 - Fundamental reorganisation - (7,958) (7,958) (16,224) --------- ---------- --------- --------- 20,572 (10,510) 10,062 3,962 Net interest payable (5,642) - (5,642) (5,047) --------- ---------- --------- --------- Profit/(loss) on ordinary activities before taxation 14,930 (10,510) 4,420 (1,085) Taxation 3 (4,045) 1,847 (2,198) 63 --------- ---------- --------- --------- Profit/(loss) on ordinary activities after taxation 10,885 (8,663) 2,222 (1,022) Dividends 4 (4,695) - (4,695) (4,692) --------- ---------- --------- --------- Retained profit/(loss) for the period 6,190 (8,663) (2,473) (5,714) --------- ---------- --------- --------- Earnings per share before goodwill amortisation and exceptional items - basic 2 10.9p 12.2p - diluted 2 10.8p 11.8p Earnings per share - basic 2 2.5p (1.1)p - diluted 2 2.4p (1.1)p CONSOLIDATED BALANCE SHEET at 5 July 2003 5 July 2003 6 July 2002 Note #'000 #'000 Fixed assets Intangible assets 7,361 7,792 Tangible assets 7 154,292 126,955 Investments 213 48 ---------- --------- 161,866 134,795 Current assets Assets for sale 4,078 6,069 Stocks 1,432 1,896 Debtors 8 6,901 28,665 Cash at bank and in hand 8 9,763 ---------- --------- 12,419 46,393 Creditors: amounts falling due within one year 9 (35,475) (41,361) ---------- ---------- Net current (liabilities)/assets (23,056) 5,032 ----------- ---------- Total assets less current liabilities 138,810 139,827 Creditors: amounts falling due after 10 (68,422) (70,507) more than one year Provision for liabilities and charges (17,132) (13,591) ----------- ---------- 53,256 55,729 ----------- ---------- Capital and reserves Called up share capital 4,531 4,531 Share premium account 34,340 34,340 Profit and loss account 14,385 16,858 ----------- ---------- Equity shareholders' funds 53,256 55,729 ----------- ---------- Approved by the Board on 3 September 2003 Simon Rowe FINANCE DIRECTOR CONSOLIDATED CASH FLOW STATEMENT for the 52 weeks ended 5 July 2003 52 weeks 53 weeks ended ended 5 July 2003 6 July 2002 Note #'000 #'000 Net cash inflow from operating 11 27,651 27,722 activities Returns on investments and servicing of finance Interest received 559 86 Interest paid (6,952) (4,586) ---------- --------- (6,393) (4,500) ---------- --------- Taxation Corporation tax paid (818) (2,879) ---------- --------- Capital expenditure and financial investment Purchases of tangible fixed assets (42,765) (48,948) Sales of tangible fixed assets 7,654 - Payments to acquire investments (247) - ---------- --------- (35,358) (48,948) ---------- --------- Acquisitions and disposals Net cash acquired with subsidiary undertaking - (200) Costs of acquisition - (1,042) ---------- --------- - (1,242) Fundamental reorganisation - proceeds from asset sales 16,601 17,874 ---------- --------- 16,601 16,632 ---------- --------- Dividends Dividends paid (4,695) (4,542) Net cash outflow before financing (3,012) (16,515) Financing Repayment of long term loans (6,743) (47,496) New long term loans - 78,265 Loan notes due within one year - (776) Net proceeds from issue of shares - 156 ---------- --------- Net cash (outflow)/inflow from financing (6,743) 30,149 ---------- --------- (Increase)/decrease in cash (9,755) 13,634 ---------- --------- RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS For the 52 weeks ended 5 July 2003 52 weeks 53 weeks ended ended 5 July 6 July 2003 2002 #'000 #'000 Profit/(loss) attributable to shareholders' for the financial period 2,222 (1,022) Dividends (4,695) (4,692) -------- -------- (2,473) (5,714) New share capital subscribed - 156 Goodwill previously written off - 1,227 -------- -------- Net reduction to shareholders' funds (2,473) (4,331) Opening shareholders' funds 55,729 60,060 -------- -------- Closing shareholders' funds 53,256 55,729 ======== ======== NOTES for the 52 weeks ended 5 July 2003 1. The unaudited financial information set out in the announcement does not constitute the company's statutory accounts for the 52 weeks ended 5 July 2003. The financial information for the 53 weeks ended 6 July 2002 is derived from the statutory accounts for that year, which have been delivered to the Registrar of Companies. The auditors reported on those accounts; their report was unqualified and did not contain a statement under section 237 of the Companies Act 1985. The statutory accounts for the 52 weeks ended 5 July 2003 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 company's Annual General Meeting. 2. Earnings per share have been calculated using the weighted average number of shares in issue during the relevant financial years. The weighted average number of shares in issue is 90,126,738 (2002 - 90,379,666) and the earnings, being profits on ordinary activities after taxation, are #2,222,000 (2002 - loss #1,022,000). The earnings on a diluted basis exclude #nil (2002 - #418,000) of interest on the convertible unsecured loan stock less tax thereon of #nil (2002 - #125,000). Diluted earnings per share have been calculated using the weighted average number of shares in issue diluted for the effect of share options and convertible unsecured loan stock, where the option price or conversion rate has a diluting effect. The diluted weighted average number of shares is 91,075,919 (2002 - 95,774,814). Earnings per share before goodwill amortisation and exceptional items excludes fundamental reorganisation costs of #7,958,000 (2002 - #16,224,000), profit on sales of fixed assets of #1,001,000 (2002 - #nil), goodwill amortisation of #431,000 (2002- #431,000) and other exceptional losses of #1,912,000 (2002- #890,000) together with a taxation credit thereon of #1,655,000 (2002 - credit #5,529,000). 3. TAXATION Continuing 52 weeks 53 weeks Continuing operations ended ended operations to be 5 July 2003 6 July 2002 ongoing discontinued Total Total #'000 #'000 #'000 #'000 UK corporation tax Profit/(loss) for the period 2,441 (1,847) 594 1,646 --------- ---------- --------- --------- Adjustment in respect of prior periods (550) - (550) - --------- ---------- --------- --------- 1,891 (1,847) 44 1,646 --------- ---------- --------- --------- UK deferred tax: Originating timing differences 2,154 - 2,154 2,832 Reversing timing differences - - - (4,541) --------- ---------- --------- --------- Total deferred tax 2,154 - 2,154 (1,709) --------- ---------- --------- --------- Tax on profit/(loss) on ordinary activities 4,045 (1,847) 2,198 (63) --------- ---------- --------- --------- 4. The directors have recommended a final dividend of 3.36p (2002 - 3.36p) per share giving a total for the year of 5.18p (2002 - 5.18p), to be paid on 12 November 2003 to shareholders on the register at the close of business on 17 October 2003. 5. NET OPERATING COSTS Continuing 52 weeks 53 weeks Continuing operations ended ended operations to be 5 July 2003 6 July 2002 ongoing discontinued Total Total #'000 #'000 #'000 #'000 Cost of sales (27,572) (1,212) (28,784) (34,255) Operating expenses (49,075) (2,663) (51,738) (54,396) Depreciation (7,219) (223) (7,442) (7,044) Goodwill amortisation (431) - (431) (431) Head office expenses (7,169) (221) (7,390) (8,712) Other operating income Management fees - 121 121 974 Other 280 53 333 298 -------- ---------- --------- --------- Net operating costs (91,186) (4,145) (95,331) (103,566) Net operating costs - (1,912) (1,912) (890) exceptional -------- ---------- --------- --------- (91,186) (6,057) (97,243) (104,456) -------- ---------- --------- --------- 6. CONTINUING OPERATIONS TO BE DISCONTINUED 52 weeks 53 weeks ended ended 5 July 2003 6 July 2002 #'000 #'000 Operating loss on continuing operations to be discontinued (640) 4,761 UGP debt write off (1,912) - --------- ---------- (2,552) 4,761 --------- ---------- Fundamental reorganisation of discontinuing activities Loss on sales of fixed assets and related costs (4,908) (13,334) Provision for onerous leases (3,050) - UGP provision - (1,663) Goodwill previously written off - (1,227) ---------- ---------- (7,958) (16,224) ---------- ---------- Taxation 1,847 3,948 ---------- ---------- (8,663) (7,515) ---------- ---------- 7. TANGIBLE ASSETS 5 July 2003 6 July 2002 #'000 #'000 Opening book value 126,955 135,119 Additions 43,021 53,909 Depreciation (7,442) (7,044) Disposals/transfers (8,242) (55,029) ---------- ---------- Closing book value 154,292 126,955 ---------- ---------- 8. DEBTORS 5 July 2003 6 July 2002 #'000 #'000 Amounts falling due within one year: Trade debtors 827 1,030 Corporation tax 520 - Other debtors 1,742 23,552 Prepayments and accrued income 3,812 4,083 ---------- ---------- 6,901 28,665 ---------- ---------- 9. Creditors - Amounts falling due within one year 5 July 2003 6 July 2002 #'000 #'000 Bank loans 9,100 10,000 Loan notes 3,492 7,250 Trade creditors 6,959 10,277 Corporation tax - 254 Tax and social security 1,601 1,104 Accruals and deferred income 9,016 7,310 Proposed dividend 3,045 3,045 Other creditors 2,262 2,121 ---------- ---------- 35,475 41,361 ---------- ---------- 10. CREDITORS - AMOUNTS FALLING DUE AFTER ONE YEAR 5 July 2003 6 July 2002 #'000 #'000 Bank loans 1-2 years 9,100 10,000 Loan notes 1-2 years - 992 Bank loans 2-5 years 53,322 58,265 Loan notes 2-5 years 6,000 1,250 ---------- ---------- 68,422 70,507 ---------- ---------- 11. RECONCILIATION OF OPERATING PROFIT TO OPERATING CASH FLOWS 2 weeks ended 53 weeks ended 5 July 2003 6 July 2002 #'000 #'000 Operating profit 17,019 20,186 Depreciation 7,442 7,044 Amortisation of goodwill 431 431 Amortisation of investment 82 - Decrease/(increase) in stocks 464 (295) Decrease/(increase) in debtors 3,125 (1,452) (Decrease)/increase in creditors (912) 1,808 ---------- ---------- 27,651 27,722 ---------- ---------- 12. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT 52 weeks ended 53 weeks ended 5 July 2003 6 July 2002 #'000 #'000 (Decrease)/increase in cash in the period (9,755) 13,634 Cash inflow from increase in loans 6,743 (78,265) Repayment of long term loans - 48,272 ---------- ---------- Change in net debt resulting from cash flows (3,012) (16,359) Borrowings of businesses acquired - (1,000) Loan notes issued to acquire new business - (992) ---------- ---------- Movement in net debt in the period (3,012) (18,351) Net debt at beginning of the period (77,994) (59,643) ---------- ---------- Net debt at end of the period (81,006) (77,994) ---------- ---------- 13. The report and financial statements will be sent to all shareholders in the week commencing 22 September 2003 and copies will be available from the Group's registered office at 77 Muswell Hill, London N10 3PJ. The Annual General Meeting of the Company will be held at the Walkabout Temple on Wednesday, 5 November 2003 at 11.00am. This information is provided by RNS The company news service from the London Stock Exchange END FR UUURCBUPWPPP
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