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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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Gaskell | LSE:GKLL | London | Ordinary Share | GB0004320452 | ORD 5P |
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% | 0.00 | - |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
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0 | 0 | N/A | 0 |
RNS Number:4771P Gaskell PLC 08 September 2003 GASKELL PLC 8 September 2003 INTERIM ACCOUNTS CHAIRMAN'S STATEMENT I described in some detail in my statement accompanying the 2002 Annual Report the background and effect of the sale of the Gaskell Tile Division and the sale of the Kidderminster site. These disposals have now been completed according to plan and I summarise the final result of these sales later in this report. I also stated that the Group would generate a loss in the early part of 2003, which indeed is revealed in this Interim Statement. The losses are slightly higher than expected due to start up costs attributable to our new logistics operation at Kidderminster and difficult market conditions in Gaskell Carpets' leisure markets, particularly during the Iraq conflict. However, operating losses before exceptional items show a welcome reduction on the previous year. We have made some progress in determining the strategic direction for the Group and I comment further on this below. Results The Group reported a pre-tax profit of #3.12m (2002 - loss of #2.31m) on a turnover of #17.0m (2002 - #29.7m). The profit arose entirely on the disposals referred to above. However, operating losses before exceptional items fell from #2.13m in 2002 to #0.87m in the current period. Operating exceptional charges of #1.56m (2002 - #Nil) arose on the closure of Tomkinsons operations at the Kidderminster site and the re-establishment of the Gaskell Wool Rich business in Rishton. Sales on continuing operations of #13.5m are almost #4m higher than for the corresponding period in 2002, but this primarily reflects the inclusion of Gaskell Wool Rich retail turnover previously reported in the discontinued Tomkinsons operation. On a like for like basis, Group turnover is approximately 2% down, with growth in retail carpet, underlay and export business offset by weaker sales in the UK contract market. Gross margins improved due to increased efficiencies at the Rishton site together with the elimination of less profitable contracts. The fixed overhead base continued to fall with the elimination of certain central costs, commensurate with a smaller overall Group. Net interest charges were minimal at #86,000 (2002 - #563,000) due to the repayment of the Group's entire bank debt in the first quarter. The taxation charge of #1m (2002 - #Nil) arose, as anticipated, on the income streams generated from the major disposals in the period. The overall profit after taxation of #2.12m (2002 - loss of #2.31m) produced earnings per share of 8.6p (2002 - loss of 9.4p). Cashflow The Group produced a positive net cashflow of #7.2m in the period. A total of #19.4m was generated, net of costs, from the Tile division and Kidderminster disposals and this was utilised to repay the Group's bank debts in full (approximately #11m) together with a number of other Government and trade creditors which had been deferred, by agreement, pending the outcome of the divestment process. Although there was a net cash outflow from operating activities in the first half of #4.7m, this arose largely from exceptional items and an increase in working capital due primarily to the settlement of overdue debts. However, the continuing businesses are now operating closer to break even in cash terms. Dividends Whilst the Group now has a small cash surplus the underlying trading is not sufficiently strong to warrant the payment of a dividend at this point in time. If the Group can return to sustainable profit in its continuing businesses, then an appropriate dividend policy will be considered at that time. Restructuring As indicated in my Chairman's Statement on 25 March 2003, Gaskell agreed to sell its Tile Division to Low & Bonar PLC on 27 January 2003 for a price of #18m, with #17m cash received on completion and a further #1m subject to meeting a net asset target in the completion accounts. I am pleased to report that the completion accounts have now been agreed and additional deferred consideration of #780,000 has been agreed with Low & Bonar and this amount was settled in full on 4 June 2003. Furthermore, having effected the initial phase of completion of the Kidderminster property disposal in early March, the additional net consideration of #0.9m, payable on clearance of the site, was settled on 2 May 2003, giving total proceeds of #3.1m. As a result of the above transactions, the Group has been able to repay all its outstanding bank debt, discharge such liabilities as fell due as a result of these disposals and return its creditor payment policy to more normal terms. The Group has had positive cash balances since the end of February 2003 and the net cash position at 30 June 2003 was in excess of #3m. Pension Schemes As indicated in my Chairman's Statement of 25 March 2003, #0.2m of pension liabilities crystallised as a result of the disposal of the Tile business. Additional employer contributions are being made into the Group's final salary pension schemes and employee contributions to the Gaskell scheme have been increased by 2%. A combination of these increased payments and an improvement in the equity markets should start to reduce the deficits on these schemes. Strategy Your Board has started to make progress in developing the future strategy of the Group. The Board has reaffirmed its commitment to the Gaskell Carpets business, based on its longstanding reputation in the leisure market, the recent re-establishment of the Gaskell Wool Rich retail brand and its expertise in high speed Axminster loom technology. These strengths will be reinforced by innovative sourcing of both new yarns and finished products which will not only enhance the product range but also reduce significantly the company's cost base. The appointment of a Creative Director, Darren Clanford, who takes up his position in November, will also provide a new impetus to the design and marketing activities, which play a key role in generating new business at Gaskell Carpets. Gerry Wheeler, in addition to his duties as Group Chief Executive, has become increasingly involved in the running of Gaskell Textiles on a day to day basis. The strategy for this business is centred around a growth in turnover through a combination of an increased direct sales force, the introduction of several new products and more focused activity in the distribution sector. The company's expansion will be built upon its traditional strength in underlays, together with the development of suitable partners for the supply and distribution of fibre bonded products. The final element of the Group's strategy relates to its logistics operations at both the Kidderminster and Clayton Park sites which are currently subject to a detailed review, due for completion by the end of the year. Prospects Certain markets in which we operate, particularly retail, continue to be difficult. We believe that the recent announcement by Carpets International (UK) Limited will have a significant impact on the market going forward. Nevertheless, we are already gaining market share in some important segments of our business and with the various sales and cost reduction initiatives outlined above, I believe we can continue to make progress in the second half of 2003. Operating profits are likely to be difficult to generate in the short term and pension fund commitments will continue to be a significant burden on the Group. However, with the normal final quarter uplift in sales and close management of working capital, I believe that positive cash balances can be maintained and the Group can become well positioned as we go into 2004. A J CHAMBERLAIN 8 September 2003 Consolidated profit & loss account For the half year ended 30 June 2003 Half year ended 30/06/03 Half year Full year Before After Ended Ended Exceptional Exceptional Exceptional 30/06/02 31/12/02 Items Items Items Note #000 #000 #000 #000 #000 Turnover 2 Continuing operations 13,465 - 13,465 9,484 19,026 Discontinued operations 3,491 - 3,491 20,254 36,610 ======= ======= ======= ======== ======= 16,956 - 16,956 29,738 55,636 Operating (loss)/profit Continuing operations 2,3 (1,215) - (1,215) (1,439) (2,305) Discontinued operations 4 340 (1,561) (1,221) (696) (2,350) ------- ------- ------- ------- ------- (875) (1,561) (2,436) (2,135) (4,655) Discontinued operations Profit/(loss) on disposal of 5 - 184 184 - (2,561) fixed assets Profit/(loss) on disposal of 5 - 5,458 5,458 391 (755) businesses ------- ------- ------- ------- ------- - 5,642 5,642 391 (3,316) Profit/(loss) on ordinary (875) 4,081 3,206 (1,744) (7,971) activities before interest Interest payable (86) - (86) (563) (1,013) ------- ------- ------- ------- ------- Profit/(loss) on ordinary (961) 4,081 3,120 (2,307) (8,984) activities before taxation Tax on profit/(loss) on 6 - (1,000) (1,000) - 1,015 ordinary activities ------- ------- ------- ------- ------- Profit/(loss) for the period (961) 3,081 2,120 (2,307) (7,969) Dividends - - - - - ------- ------- ------- ------- ------- Amount (deducted from)/set (961) 3,081 2,120 (2,307) (7,969) aside to reserves ======= ======= ======= ======== ======= Basic & diluted earnings/ 7 (3.9p) 12.5p 8.6p (9.4p) (32.5p) (loss) per ordinary share Dividends per ordinary share - - - - - ======= ======= ======= ======== ======= Statement of total recognised gains and losses for the half year ended 30 June 2003 With the exception of profit/(loss) after taxation there were no recognised gains and losses in the Group. Consolidated balance sheet As at 30 June 2003 30/06/03 30/06/02 31/12/02 Note #000 #000 #000 Fixed assets Intangible assets - (363) - Tangible assets 5,211 18,007 13,352 --------- --------- --------- 5,211 17,644 13,352 ========= ========= ========= Current assets Stocks 5,620 14,180 10,941 Debtors 6,116 9,749 9,477 Cash at bank and in hand 3,806 1,049 1,111 --------- --------- --------- 15,542 24,978 21,529 ========= ========= ========= Creditors (amounts falling due within one year) Bank loan and overdraft - 5,936 7,320 Obligations under finance leases and hire 519 732 838 purchase contracts Other creditors 7,304 13,279 12,810 --------- --------- --------- 7,823 19,947 20,968 --------- --------- --------- Net current assets 7,719 5,031 561 --------- --------- --------- Total assets less current liabilities 12,930 22,675 13,913 --------- --------- --------- Creditors (amounts falling due after more than one year) Bank loan - 5,035 3,155 Obligations under finance leases and hire 403 2,065 841 purchase contracts Loan notes 493 1,011 1,011 Other creditors - - 4 --------- --------- --------- 896 8,111 5,011 --------- --------- --------- Net assets 12,034 14,564 8,902 ========= ========= ========= Capital and reserves Called up share capital 1,226 1,226 1,226 Share premium account 4,630 4,630 4,630 Revaluation reserve 881 1,546 1,117 Capital redemption reserve fund 175 175 175 Profit and loss account 5,122 6,987 1,754 --------- --------- --------- Equity shareholders' funds 9 12,034 14,564 8,902 ========= ========= ========= Consolidated cash flow statement For the half year ended 30 June 2003 Half year ended Half year ended Full year ended 30/06/03 30/06/02 31/12/02 Note #000 #000 #000 Net cash (outflow)/inflow from operating 3 (4,747) 475 2,364 activities Returns on investments and servicing of finance Interest paid (159) (442) (874) Interest element of finance leases and hire (19) (54) (129) purchase rentals --------- --------- --------- (178) (496) (1,003) --------- --------- --------- Taxation 29 326 198 Capital expenditure Purchases of tangible fixed assets (excluding (56) (165) (233) finance lease and hire purchase assets) Sale of tangible fixed assets and assets held 3,030 111 1,128 for resale --------- --------- --------- 2,974 (54) 895 --------- --------- --------- Business disposals Receipts from sales of trades, net of costs 5 16,367 1,552 1,496 Loan relating to business subject to disposal - - (250) --------- --------- --------- 16,367 1,552 1,246 --------- --------- --------- Equity dividends paid - - (172) Financing Repayment of capital element of finance leases (799) (726) (1,678) and hire purchase rentals New finance leases 42 215 - Repayment of bank loans (5,930) - (850) Cost of new medium term loan - - 45 Repayment of loan notes (518) - - --------- --------- --------- (7,205) (511) (2,483) --------- --------- --------- Increase in cash 8 7,240 1,292 1,045 ========= ========= ========= Notes to the financial statements 1. Accounting policies These interim statements, which have been prepared on the basis of the accounting policies set out in the Group's 2002 statutory accounts, do not constitute statutory accounts within the meaning of section 240 of the Companies Act 1985 and are neither audited nor reviewed. The abridged accounts for the year ended 31 December 2002 are an extract from the accounts for that period on which the auditors gave an unqualified report and which have been filed with the Registrar of Companies. 2. Continuing and discontinued operations The continuing business represents Gaskell PLC, Gaskell Carpets Limited and Gaskell Textiles Limited and the associated warehousing and distribution operations. The discontinued operations comprise businesses sold during the current period (Bamber Carpets Limited, Gaskell Carpet Tiles Limited and Modulus Flooring Systems Limited), businesses sold in the previous year (Mid-Wales Yarns Limited and Crucial Trading) and the manufacturing and selling operations of Tomkinsons Carpets Limited which ceased during the current period. 3. Reconciliation of operating loss to net cash (outflow)/inflow from operating activities Half year ended Half year ended Full year ended 30/06/03 30/06/02 31/12/02 #000 #000 #000 Operating loss (2,436) (2,135) (4,655) Depreciation/amortisation and loss/(profit) on 468 1,119 1,547 sale of fixed assets (Increase)/decrease in stock (890) 1,389 4,338 (Increase)/decrease in debtors (1,055) (333) 217 (Decrease)/increase in creditors (834) 435 917 --------- --------- --------- (4,747) 475 2,364 ========= ========= ========= 4. Operating exceptional items Operating exceptional items comprise costs associated with the closure of the manufacturing and selling operations of Tomkinsons Carpets Limited (2002-#Nil). 5. Non-operating exceptional items The profit on disposal of fixed assets totalling #184,000 arose from the sale of the Kidderminster site and related plant and equipment. The net profit on disposal of businesses of #5,458,000 arose from the sale of the trade and certain net assets of the Gaskell Tile Division (Bamber Carpets Limited, Gaskell Carpet Tiles Limited and Modulus Flooring Systems Limited) and comprised - #000 Proceeds, net of costs 16,367 Net assets disposed of or written off (9,897) Related goodwill previously written off against reserves (1,012) ------- 5,458 ======= Non-operating exceptional items in the first half of 2002 related to the profit on disposal of the Crucial Trading division of Tomkinsons Carpets Limited (#1.28m) less impairment charges of #891,000 attributable to Mid-Wales Yarns Limited, sold in August 2002. 6. Taxation on profit/(loss) on ordinary activities The taxation charge of #1.0m (2002-#Nil) arose from the reversal of the deferred tax asset on the realisation of the income streams from the major business and asset disposals during the period. Otherwise, taxation on the profit/(loss) on ordinary activities is based on the estimated effective rate for the year. 7. Earnings/(loss) per ordinary share Basic earnings/(loss) per ordinary share is calculated by dividing the profit attributable to shareholders of #2,120,000 (2002 - loss of #2,307,000) by the weighted average of 24,522,079 (2002 - 24,522,079) ordinary shares in issue during the period. The diluted earnings/(loss) per ordinary share is calculated by dividing the profit attributable to shareholders of #2,120,000 (2002 - loss of #2,307,000) by the weighted average of 24,571,079 (2002 - 24,522,079) ordinary shares, being the increased weighted average assuming the exercise of dilutive employee share options. 8. Reconciliation of net cash/(debt) Half year ended Half year ended Full year ended 30/06/03 30/06/02 31/12/02 #000 #000 #000 Increase in cash in the period 7,240 1,292 1,045 Decrease in lease financing 799 726 1,678 Repayment of bank loan 5,930 - 850 Repayment of loan notes 518 - - --------- --------- --------- Change in net debt resulting from cash flows 14,487 2,018 3,573 New finance leases and hire purchase contracts (42) (229) (63) Amortisation of bank loan costs - - (45) --------- --------- --------- Movement in net debt in the period 14,445 1,789 3,465 Net debt brought forward (12,054) (15,519) (15,519) --------- --------- --------- Net cash/(debt) carried forward 2,391 (13,730) (12,054) ========= ========= ========= 9. Reconciliation of movement in shareholders' funds Half year ended Half year ended Full year ended 30/06/03 30/06/02 31/12/02 #000 #000 #000 Profit/(loss) for the financial period 2,120 (2,307) (7,969) Goodwill previously written off against reserves 1,012 - - --------- --------- --------- 3,132 (2,307) (7,969) Opening shareholders' funds 8,902 16,871 16,871 --------- --------- --------- Closing shareholders' funds 12,034 14,564 8,902 ========= ========= ========= This information is provided by RNS The company news service from the London Stock Exchange END IR BRGDCIGGGGXU
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