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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Choicesuk | LSE:CHUK | London | Ordinary Share | GB0030842495 | ORD 5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.50 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number:1529I
ChoicesUK PLC
29 August 2006
IMMEDIATE - Tuesday, 29th August 2006
Results for the 52 weeks ended 3 June 2006 - a year of change
Figures in #000s 52 weeks ended 3/6/06 52 weeks ended 4/6/05
Turnover 134,206 140,467
Operating profit before
exceptional costs 816 4,708
Exceptional costs 4,485 -
Net interest payable 524 169
(Loss)/profit before tax (4,193) 4,539
Basic (loss)/earnings per
share (pence) (18.0) 16.1
* In a difficult year for the retail and entertainment industries, ChoicesUK
has continued to outperform the market which is experiencing weak demand,
particularly in rental, and industry-wide cost pressures.
* Management and the business have been restructured to improve focus and
responsiveness to market demands.
* The retail proposition has been reviewed, making changes to many elements
of the offer. Stores reflecting the new offer are outperforming the rest of
the chain. 12 underperforming stores have been disposed of and the process
of eliminating loss makers will continue.
* Central overheads have been reduced by #1.2 million in the period, net of
energy costs which increased by #620,000. The benefit of these savings in
2006/07 will be approximately #3.0 million.
* ChoicesUK TV, which failed to deliver the target level of sales within the
appraisal period, has been sold.
* Exceptional costs relating to stock mark-downs, restructuring and the
closure of ChoicesUK TV amounted to #4.5 million, resulting in a net loss
before taxation of #4.2 million.
* The current year has seen the launch of our new website. A A Retail
offering revised to increase the profile of games, enabling ChoicesUK to
capitalise on the launch of two important games consoles - the Nintendo
Wii and the Playstation 3.
Contact
Simon Bloomfield, Bankside Consultants (Tel: 020 7367 8888)
Chairman's Statement
Introduction
During the year ended 3 June 2006, the retail and home entertainment sectors
continued to experience intense pressures, which have had a dramatic impact on
the financial performance of the whole Industry. Chief among these are selling
price deflation, exacerbated by piracy, and the long-term decline of rental.
Nevertheless, ChoicesUK continues to outperform the market, especially in DVD
sell-thru and games, and the Board has acted decisively to ensure that the
Company will be a strong, growing and profitable business in the future.
We have put in place a management team with the skills and experience necessary
to take the Company forward in a challenging business environment, as well as
successfully introducing the ChoicesUK brand across all its activities.
After a disappointing financial performance for the first half of the year,
during which the Company made its first pre-tax loss since 1991, we have
re-configured the retail business and stepped up the process of eliminating
loss-making stores.
In addition, we have restructured and refocused the Group, substantially
reducing overheads and other costs, as well as disposing of ChoicesUK TV after
it failed to deliver target sales during its appraisal period.
As a result of these actions, ongoing activities returned to operating
profitability during the second half. Having substantially reduced its losses
the retail business is now generating cash.
Our people, at all levels, have worked extremely hard during this challenging
period, and I would like to record the Board's appreciation of their
efforts and initiative.
Results
Overall, turnover declined by 4.5 per cent to #134.2 million (2005: #140.5
million) against a background of substantial price deflation in DVDs, a
relatively poor release schedule and the continuing decline in rental.
Sell-thru sales accounted for 67.7 per cent of the Groups turnover compared to
64.5 per cent in the prior period. Sell-thru sales activities grew by 0.3 per
cent and rental sales activities were down 13.1 per cent. The reduction in
rental is reflected in a decrease in overall gross margin to 40.0 per cent
(2005: 41.5 per cent).
Operating profit before exceptional costs was #816,000 (2005: #4.7 million as
restated). After exceptional costs totalling #4.5 million, the loss before
taxation was #4.2 million (2005: #4.5 million profit).
Capital expenditure was #4.0 million (2005: #6.5 million) reflecting
investments in re-branding stores and in IT systems.
The basic loss per share was 18.0 pence (2005 earnings per share: 16.1p as
restated).
Dividend
In light of the full year trading results, the directors have not paid an
interim dividend and are not recommending the payment of a final dividend.
Chairman's Statement (ctd)
Piracy
Our industry remains plagued by piracy. Rental suffers from the availability of
pirated new titles long before they are legitimately available, and sell-thru
has become increasingly affected.
In the USA, where punitive action is the norm, the problem is slight and as a
result both the DVD rental and sell-thru markets are comparatively prospering.
The UK must counter the growth of the illegitimate sector with proper
enforcement of the law (including the activation of additional powers to Trading
Standards Officers under Copyright Acts).
In recent months industry wide efforts in conjunction with enforcement
authorities have resulted in significant arrests. The industry is now planning a
series of further enforcement initiatives, but it is essential for Central and
Local Government to react more positively if they wish legitimate businesses in
this sector to prosper.
We play a major role in this arena and will continue to do so.
Board Changes
As a result of reaching my normal retirement date and 21 years after co-founding
the Company, I stepped down as Executive Chairman with effect from 7 April 2006.
As planned, Managing Director, Anthony Skitt, became Chief Executive. Since he
joined the Board in 1999, Anthony has played a major role in responding to the
challenges we have faced, as well as in developing the business for the future.
I am delighted that he has agreed to take on this new responsibility. At the
request of the Board, I have remained as Non-Executive Chairman and, in that
capacity, will continue to play my part in restoring profitability.
During the year we appointed one additional Executive Director - Richard
Whalley. Richard graduated from Lancaster University in 1988 with BSc (Hons) in
Management Sciences and Marketing. Following an early career in Marketing, in a
business to business environment, Richard joined the Retail Division (Choices
Stores) of ChoicesUK plc as Business Development Manager in 1992 and helped to
expand the business from 27 to 220 stores. Since 2004 Richard has headed the
ChoicesUK Local Division and has more recently taken over the day to day
management of ChoicesUK Direct.
Gerad Barclay, Steve Barker and David Sanders resigned as Directors during the
year as we restructured the business, and Geoffrey Hopkins retired as a
Director. We thank them for their individual contributions and counsel during a
major period of change.
Outlook
Management has made substantial progress in restoring ChoicesUK to profitability
during a very difficult period for the whole industry. As a result, although
much uncertainty remains and there is more work to be done, the Company is well
placed to continue its recovery and achieve profitable growth.
Iain Muspratt
Chairman
Chief Executive's Review
Overview
The disappointing financial performance last year was the result of losses from
our retail business and ChoicesUK TV, and the exceptional costs of
re-structuring the group and writing down slow-moving stock.
A key priority for management has been to reverse the losses at our retail
business, which has imposed significant financial strain on the Group. We have
substantially reduced our cost base and will continue to seek ways to achieve
further savings and to improve efficiency in all departments.
As a result of the actions, we now have a cost base which is more appropriate to
the competitive market environment in which we operate and the size of the
business.
We are now focusing on opportunities to generate new revenue streams through a
more efficient business infrastructure and, with an improved release schedule
expected, our efforts should be reflected in continued progress in the current
financial year.
Trading
ChoicesUK stores
The operating loss for the period, before exceptional costs was #2.4 million
(2005: #1.1 million profit).
We have restructured the management team and accelerated the elimination of
loss-making stores with 12 disposals completed in the period. This will be a
continuing process, with the disposal of further retail leases which are surplus
to our requirements.
Following the strengthening of the retail management team, a comprehensive
review of the store offering was undertaken. As a result, the product range was
re-vamped, with greater profile given to games in anticipation of the launch of
two important games consoles - the Nintendo Wii and the Playstation 3.
The new EPOS system, introduced in 2003, has played a vital role in this
process, part of which was to identify slow-moving items.
The introduction of ChoicesUK branding, with 75 stores restyled and ranges
extended in terms of both depth and product (e.g. music, posters and magazines),
has demonstrated enhanced performance. The majority of stores improved like for
like performance towards the end of the period, with growth being greatest in
restyled stores.
Over the 52 week period, like for like performance on rental showed an 11.3 per
cent decline and retail sales a 3.8 per cent increase.
Although rental continues to be an important element of our business, we expect
the proportion of turnover from VHS/DVD rental will continue to fall.
ChoicesUK Local
Operating profit for the period, before exceptional costs was #1.8 million
(2005: #3.0 million).
Our rebranding was launched at the beginning of this financial year and is now
beginning to be seen more widely in the stores we serve. The number of outlets
we supply has increased by 427 to just over 8,100, which provides us with a very
strong brand presence. Operations in Republic of Ireland, under the brand
ChoicesIE, are growing rapidly.
We are actively seeking to develop new sources of revenue where we can leverage
our relationships with entertainment suppliers and our fulfilment experience.
Currently, efforts are being focused on retail outlets, such as service
stations, providing entertainment as part of their customer offering.
ChoicesUK Direct
Operating profit for the period, before exceptional costs was #1.7 million
(2005: #800,000).
Our paper based business continued to grow satisfactorily, but our internet
business was adversely affected by the delay in launching our new ChoicesUK.com
website and associated systems. Implementation was due for end September 2005,
but this was launched in July 2006 following a change in divisional management.
Now that our new system is satisfactorily launched, we expect to move back into
overall growth and to expand through third party arrangements.
In April 2006, we purchased certain assets from the receivers of Andromeda,
which is now managed as part of our games fulfilment business. The integration
is in line with our expectations and, as a result, will become a significant
contributor to Group revenues and profit.
ChoicesUK TV
This has now been sold following a poor sales performance. The losses for
ChoicesUK TV amounted to #1.4 million, of which #833,000 was recognised in the
first half of the year, and have been treated as an exceptional cost.
Overheads
Cost savings have been initiated at every level. The benefit of these in 2006/7
will be in the region of #3.0 million, net of a further increase in energy
costs of around #620,000. These cost savings take into account the progressive
benefit of consolidating our administrative functions under one roof, and the
end of leases on existing Head Office property.
Exceptional Costs
Non-recurring costs associated with reorganisation and restructuring amounting
to #600,000 have been incurred within the period.
As reported in our Interim results, the review and reorganisation of two of our
trading divisions revealed overstocks (principally in our retail division)
certain of which had become obsolete or less desirable. These were written off
or down by #2.5 million.
As noted above, the aggregate loss of #1.4 million for the ChoicesUK TV
division has been treated as exceptional.
Cash
During the year, the financial position of the Group was affected by the one-off
costs related to the implementation of the Company's new web site, store
refurbishment, restructuring, and costs relating to the ChoicesUK TV operation,
which was sold in July 2006. We expect that the actions taken to restore
profitability and cash flow will result in a strengthening balance sheet in the
current year.
We have secured a committed overdraft facility of #20.0 million available until
30 April 2007 and #13.0 million thereafter. The facility is due for renewal on
31 July 2007. As part of the agreement, these facilities will remain available
for a year after the date on which the agreement is terminated. The directors
believe that this funding is sufficient for the ongoing cash needs of the
business, and that no additional financing will be required in the coming year.
Commentary
We remain highly focused on our cash position, having no major capital
expenditure planned and clear stock management objectives. Loss making elements
of the business continue to be tackled, while new revenue streams are attached
to the existing infrastructure. The business has momentum and morale remains
high, reflecting the Management's understanding of our position and
acceptance of the challenge.
Anthony Skitt
Chief Executive
Independent Auditors's Report to the Members of ChoicesUK plc
We have audited the Group and Parent Company accounts (the "accounts") of
ChoicesUK plc (formerly Home Entertainment Corporation PLC) for the year
ended 3 June 2006 which comprise the Group Profit and Loss Account, the Group
and Company Balance Sheets, the Group Statement of Cash Flows, the Group
Statement of Total Recognised Gains and Losses, and note of Historial Profit and
Losses and the related notes 1 to 22. These accounts have been prepared under
the accounting policies set out therein.
This report is made solely to the Company's members, as a body, in
accordance with Section 235 of the Companies Act 1985. Our audit work has been
undertaken so that we might state to the Company's members those matters
we are required to state to them in an auditors' report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company's members
as a body, for our audit work, for this report, or for the opinions we have
formed.
Respective Responsibilities of Directors and Auditors
The directors are responsible for preparing the Annual Report and the financial
statements in accordance with applicable United Kingdom law and Accounting
Standards (United Kingdom Generally Accepted Accounting Practice) as set out in
the Statement of Directors' Responsibilities.
Our responsibility is to audit the accounts in accordance with relevant legal
and regulatory requirements and International Standards on Auditing (UK and
Ireland).
We report to you our opinion as to whether the accounts give a true and fair
view, are properly prepared in accordance with the Companies Act 1985 and
whether the information given in the directors' report is consistent with
the accounts.
We also report to you if, in our opinion, the Company has not kept proper
accounting records, if we have not received all the information and explanations
we require for our audit, or if information specified by law regarding
directors' remuneration and other transactions is not disclosed. We read other
information contained in the Annual Report, and consider whether it is
consistent with the audited acounts. This other information comprises A Year of
Change, the Chairman's Statement and the Chief Executive's Review.
We consider the implications for our report if we become aware of any apparent
misstatements or material inconsistencies with the accounts. Our
responsibilities do not extend to any other information.
Basis of Audit Opinion
We conducted our audit in accordance with International Standards on Auditing
(UK and Ireland) issued by the Auditing Practices Board. An audit includes
examination, on a test basis, of evidence relevant to the amounts and
disclosures in the accounts. It also includes an assessment of the significant
estimates and judgments made by the directors in the preparation of the
accounts, and of whether the accounting policies are appropriate to the Group's
and Company's circumstances, consistently applied and adequately
disclosed.
We planned and performed our audit so as to obtain all the information and
explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the financial statements
are free from material misstatement, whether caused by fraud or other
irregularity or error. In forming our opinion we also evaluated the overall
adequacy of the presentation of information in the financial statements.
Independent Auditors' Report to the Members of ChoicesUK plc (ctd)
Opinion:
In our opinion:
the accounts give a true and fair view, in accordance with United Kingdom
Generally Accepted Accounting Practice, of the state of the Group's and
the Parent Company's affairs as at 3 June 2006 and of the Group's
loss for the year then ended;
the accounts have been properly prepared in accordance with the Companies Act
1985; and the information given in the directors' report is consistent
with the accounts.
Ernst & Young LLP
Registered Auditor
Cambridge
Group Profit and Loss Account
for the 52 week period ended 3 June 2006
Notes 2006 2005
(52 (52
weeks) weeks)
#000 #000
As
restated
TURNOVER 2 134,206 140,467
Cost of sales (80,536) (82,198)
Gross profit 53,670 58,269
Net operating costs 3 (57,339) (53,561)
OPERATING (LOSS)/PROFIT 4 (3,669) 4,708
Analysis of operating (loss)/profit
Operating profit before exceptional costs 816 4,708
Exceptional costs (2,483) -
- stock mark downs
- reorganisation costs (646) -
- ChoicesUK TV (1,356) -
OPERATING (LOSS)/PROFIT 4 (3,669) 4,708
Net interest payable (524) (169)
(LOSS)/PROFIT ON ORDINARY
ACTIVITIES BEFORE TAXATION (4,193) 4,539
Tax credit/(charge)
on (loss)/profit
on ordinary activities 950 (1,633)
RETAINED (LOSS)/PROFIT FOR THE PERIOD (3,243) 2,906
(Loss)/Earnings per Share:
Basic 6 (18.0p) 16.1p
Diluted 6 (18.0p) 14.9p
Adjusted basic and diluted
earnings per share *
*(excluding exceptional items) 6 6.9p 16.1p
Dividends per Ordinary share 5 4.5p 6.7p
Details of dividends paid during the year are set out in Note 5 to the Accounts.
Group Balance Sheet
at 3 June 2006
Group
Notes 2006 2005
#000 #000
As
restated
FIXED ASSETS
Tangible assets 15,032 16,748
CURRENT ASSETS
Stocks 18,949 16,633
Debtors 11,532 8,152
Cash at bank and in hand - 77
30,481 24,862
CREDITORS: amounts falling due within one year (28,946) (20,955)
NET CURRENT ASSETS 1,535 3,907
TOTAL ASSETS LESS CURRENT LIABILITIES 16,567 20,655
PROVISIONS FOR LIABILITIES AND CHARGES
Deferred taxation (54) (135)
Net assets excluding pension surplus 16,513 20,520
Pension surplus - 90
Net assets 16,513 20,610
CAPITAL AND RESERVES
Called up share capital 902 904
Share premium account 997 997
Capital redemption reserve 1,063 1,061
Revaluation reserve 761 777
Profit and loss account 12,790 16,871
SHAREHOLDERS' FUNDS 16,513 20,610
Group Statement of Cash Flows
for the 52 week period ended 3 June 2006
Notes 2006 2005
#000 #000
NET CASH (OUTFLOW)/INFLOW FROM OPERATING
ACTIVITIES 4b (2,613) 8,317
RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
Interest paid (524) (169)
TAXATION
Corporation tax paid (848) (1,626)
CAPITAL EXPENDITURE
Payments to acquire tangible fixed assets (3,979) (6,502)
ACQUISITIONS AND DISPOSALS
Purchase of the business and certain assets of
In-Store Movies PLC - (331)
Sale of business - 385
- 54
DIVIDENDS PAID (813) (1,210)
NET CASH OUTFLOW BEFORE FINANCING (8,777) (1,136)
FINANCING
Redemption of Ordinary shares (41) -
Issue of Ordinary share capital - 30
DECREASE IN CASH (8,818) (1,106)
reconciliation of net cash flow to movement in net funds
2006 2005
#000 #000
Decrease in cash in period (8,818) (1,106)
Net funds at beginning of period 77 1,183
Net (debt)/funds at end of period 15 (8,741) 77
Group Statement of Total Recognised Gains and Losses
for the 52 week period ended 3 June 2006
Note 2006 2005
(52 (52
weeks) weeks)
#000 #000
(Loss)/Profit for the financial year (3,243) 2,906
Unrealised surplus on revaluation - 168
Total recognised gains and losses for year (3,243) 3,074
Prior year adjustment 1 109 -
Total recognised gains and losses since last Annual
Report (3,134) 3,074
Note of Group Historical Profits and Losses
for the 52 week period ended 3 June 2006
Notes 2006 2005
(52 (52
weeks) weeks)
#000 #000
As
restated
Reported (Loss)/Profit on ordinary
activities before taxation (4,193) 4,539
Difference between historical cost
depreciation charge and the actual
depreciation charge of the period
calculated on the revalued amount 16 16
Historical cost (loss)/profit on
ordinary activities before taxation (4,177) 4,555
Historical cost (loss)/profit
for the period retained after tax (3,227) 2,922
Notes to the Accounts
at 3 June 2006
1. Accounting Policies
Accounting convention
The accounts are prepared under the historical cost convention as amended by the
revaluation of certain fixed assets and in accordance with UK Accounting
Standards (UK Generally Accepted Accounting Principles) and Companies Act 1985,
Section 256.
Basis of consolidation
The Group accounts consolidate the accounts of ChoicesUK plc's subsidiary
undertakings drawn up to 3 June 2006. No profit and loss account is presented
for ChoicesUK plc as permitted by section 230 of the Companies Act 1985. The
Group (loss)/profit for the financial year includes (#3,073,000) (2005:
#2,779,000 as restated) which relates to the (loss)/profit of the Company.
Change in accounting policy for events after the balance sheet date (FRS21) and
retirement benefits (FRS 17)
Group
Creditors Profit & Loss Shareholders'
Funds
#000 #000 #000
At 4 June 2005
(as previously reported) 21,768 1,588 19,707
2004 final dividend - (794) -
2005 final dividend (813) 813 813
Dividends paid - 1,209 -
2005 pension surplus - 90 90
At 4 June 2005 (as restated) 20,955 2,906 20,610
The Group has adopted FRS21, whereby dividends declared after the period end no
longer meet the definition of a liability and are only recognised in the period
in which they are declared and appropriately approved. The Group has therefore
been required to restate the dividend charges in previous years and to include
in the annual accounts at 3 June 2006 the charge previously shown in the 2005
annual accounts of 4.5p per share.
The Company operates a pension scheme which provides benefits for certain
directors based on final pensionable salary. During the year, the Company has
implemented FRS 17 "Retirement Benefits" (see note 20).
Amounts charged to operating profit in respect of pensions consist of the
current service costs, and any costs are charged to operating profit immediately
if the benefits have vested. If the benefits have not vested immediately, the
costs are recognised by equal annual instalments over the period until vesting
occurs. The interest cost and the expected return on assets are included as
other finance income. Actuarial gains net of deferred tax are recognised
immediately in the group statement of total recognised gains and losses.
The defined benefit scheme is funded in a separate trustee administered fund,
with the assets of the scheme held separately from those of the Company. Pension
scheme assets are measured at fair value, and liabilities are measured on an
actuarial basis using the projected unit method and discounted at a rate
equivalent to the current rate of return on a high quality corporate bond of
equivalent currency and term to the scheme liabilities.
The full resulting defined benefit asset, net of related deferred tax, is
included below creditors on the group and company balance sheet.
Tangible fixed assets and depreciation
Depreciation is provided on all tangible fixed assets so as to write down their
cost or revalued amount to their estimated residual values by equal annual
instalments over the period of their estimated useful economic lives, which are
considered to be:
Freehold buildings - fifty years
Leasehold buildings - between five and seven years
Display racks - three years (after which they are deemed to be scrapped)
Fixtures, fittings and other equipment - between three and seven years
The carrying value of tangible fixed assets is reviewed for impairment if events
or changes in circumstances indicate that carrying value may not be recoverable.
Leased assets
Rentals payable under operating leases are charged to the profit and loss
account on a straight line basis over the terms of the leases.
Stock
Pre-recorded DVDs and video cassettes held for rental are treated as stock.
Their costs are amortised systematically on a reducing balance basis to reflect
current related income streams (which the directors consider to be their
anticipated economic life).
Stocks of goods held for resale are valued at the lower of cost and net
realisable value.
Deferred taxation
Deferred tax is recognised in respect of all timing differences that have
originated but not reversed at the balance sheet date where transactions or
events have occurred at that date that will result in an obligation to pay more,
or a right to pay less or to receive more, tax, with the following exceptions:
provision is made for tax on gains arising from the revaluation (and similar
fair value adjustments) of fixed assets, and gains on disposal of fixed assets
that have been rolled over into replacement assets, only to the extent that, at
the balance sheet date, there is a binding agreement to dispose of the assets
concerned. However, no provision is made where, on the basis of all available
evidence at the balance sheet date, it is more likely than not that the taxable
gain will be rolled over into replacement assets and charged to tax only where
the replacement assets are sold;
deferred tax assets are recognised only to the extent that the directors
consider that it is more likely than not that there will be suitable taxable
profits from which the future reversal of the underlying timing differences can
be deducted.
Deferred tax is measured on an undiscounted basis at the tax rates that are
expected to apply in the periods in which timing differences reverse, based on
tax rates and laws enacted or substantively enacted at the balance sheet date.
Pension contribution plan
The costs of providing pensions under the defined contribution schemes are
charged to the profit and loss account as they become payable in accordance with
the rules of the schemes.
Foreign currencies
Transactions in foreign currencies are recorded at the rate ruling at the date
of the transaction.
Monetary assets and liabilities denominated in foreign currencies are
retranslated at the rate of exchange ruling at the balance sheet date. All
differences are taken to the profit and loss account.
2. Turnover
Turnover, which is stated net of credits, allowances, trade discounts and VAT,
represents amounts invoiced to, or received from, third parties.
Turnover comprises income from the rental of pre-recorded DVDs, video cassettes
and computer games, and the sale of pre-recorded DVDs, video cassettes, computer
games, audio products, mobile telephones and 'E-Top-Ups' and other
related products.
2. Turnover (ctd)
An analysis of turnover by geographical market and segment is given below:
2006 2005
(52 (52
Weeks) Weeks)
#000 #000
As
restated
Geographical Analysis
United Kingdom 132,725 139,189
Rest of Europe 907 690
Other 574 588
134,206 140,467
Segmental Analysis
Rental - DVD and VHS 43,329 49,869
Sales and Rental - Games 27,074 25,224
Sales - DVD, Mobile
Phones and other products 63,803 65,374
134,206 140,467
Games Rental had previously been shown in rental. This is now shown in Sales and
Rental - Games, and 2005 has been adjusted to reflect this change.
The directors consider it to be prejudicial to the commercial interests of the
business to analyse operating profit and net assets geographically or by sector.
3. Net Operating Costs
2006 2005
(52 (52
Weeks) Weeks)
#000 #000
As
restated
Administrative expenses 51,648 46,992
Distribution costs 5,691 6,569
57,339 53,561
4. Operating (Loss)/Profit
(a) This is stated after charging:
2006 2005
(52 (52
Weeks) Weeks)
#000 #000
Depreciation 5,676 6,275
Directors' remuneration 897 1,021
Auditors' remuneration - audit services 57 71
- non-audit services 5 14
Operating lease rentals - land and buildings 8,407 8,196
- other 453 524
Loss on disposal of fixed assets 19 -
(b) Reconciliation of operating (loss)/profit to net cash (outflow)/inflow from
operating activities:
2006 2005
(52 (52
Weeks) Weeks)
#000 #000
As
restated
Operating (loss)/profit (3,669) 4,708
Amortisation - 5
Depreciation 5,676 6,275
Profit on sale of business - (385)
Loss on disposal of fixed assets 19 -
Decrease/(Increase) in pension surplus 90 (90)
(Increase) in debtors (2,520) (1,602)
(Increase) in stocks (2,316) (4,140)
Increase in creditors 107 3,546
Net cash (outflow)/inflow
from operating activities (2,613) 8,317
(c) Reconciliation of operating (loss)/profit to EBITDA:
2006 2005
(52 (52
Weeks) Weeks)
#000 #000
As
restated
Operating (loss)/profit (3,669) 4,708
Depreciation and amortisation 5,676 6,280
EBITDA 2,007 10,988
5. Dividends
2006 2005
(52 (52
Weeks) Weeks)
#000 #000
Equity dividends paid on ordinary shares:
Final dividend for prior year 813 794
Interim dividend - 415
813 1,209
6. (Loss)/Earnings Per Share
52 weeks ended 52 weeks ended
3 June 2006 4 June 2005
Diluted Basic Diluted Basic
(Loss)/earnings (2005
as restated) (3,243,648) (3,243,648) 2,905,676 2,905,676
Number of shares at
start of period 18,069,747 18,069,747 18,052,100 18,052,100
Shares issued - - 17,647 17,647
Dilutive effect of
share option schemes - - 1,397,628 -
Shares cancelled (35,000) (35,000) - -
18,034,747 18,034,747 19,467,375 18,069,747
Weighted average
number of shares 19,169,313 18,039,747 19,500,367 18,059,453
(Loss)/earnings per
share (18.0p) (18.0p) 14.9p 16.1p
7. Annual General Meeting
The 2006 Annual General Meeting of ChoicesUK plc will be held at Unit 11,
Manasty Road, Orton Southgate, Peterborough, PE2 6UP on Thursday 28 September
2006 at 10.00 am.
8. Annual Report
Copies of the annual report for the 52 weeks ended 3 June 2006 are available,
free of charge, to the public on any week day, at the registered office of the
Company (Southgate House, Southgate Way, Orton Southgate, Peterborough, PE2 6YG)
and at the offices of the Company's nominated advisers, Teather &
Greenwood Limited (Beaufort House, 15 St Botolph Street, London, EC3A 7QR) from
the date of this announcement and for a period of one month thereafter.A
Alternatively, the annual report can be accessed by visiting the Company's
website at www.choicesukplc.com
Trading Divisions
ChoicesUK Local
Provides a service throughout the United Kingdom to convenience stores and other
established retailers, enabling them to add DVD and video sales and rental,
computer games software sales and music sales to the range of products offered
to their customers. Now incorporates Mosaic Entertainment which exploits
existing rights to a range of feature films and television programmes.
www.ChoicesUKlocal.com
ChoicesUK Stores
Operated through 217 (4 June 2005: 228) Company owned retail outlets in England
and Wales, offering DVDs, videos and computer games rental and sales, games
consoles for sale, the sale of 'Pay As You Go', 'Network Branded' and 'SIM Free'
mobile telephones, 'top-ups'(including 'E-Top-Ups'), audio products and ice
cream and confectionery.
www.ChoicesUK.com
ChoicesUK Direct
ChoicesUK.Direct offers DVDs, videos, computer games and talking tapes released
in the United Kingdom for sale through its Internet site (ChoicesUK.com) and
through it's mail order business. In addition ChoicesUK.Direct manages and
fulfils DVD, computer games and video sales for many of the large mail order
catalogue companies in the United Kingdom, including SDG, Freemans, Littlewoods
and Book Club Associates. The service offered is comprehensive, ranging from
title selection advice and compilation, through to fulfilment of customers'
orders.
www.ChoicesUK.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR BIGDIXDDGGLU
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