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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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Henderson European Trust Plc | LSE:HET | London | Ordinary Share | Ordinary Shares |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 188.00 | 186.00 | 188.00 | 188.00 | 187.00 | 188.00 | 403,213 | 16:14:26 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
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0 | 0 | N/A | 0 |
RNS Number:4388A Home Entertainment Corporation PLC 28 August 2002 News Release - Wednesday, 28 August 2002 Home Entertainment Corporation PLC Results for the 52 weeks ended 1 June 2002 Financial highlights (figures in #'000s) 52 weeks ended 1 June 2 June 2002 2001 Turnover 103,038 83,408 + 23.5% Operating profit (before exceptional item) 5,411 4,953 + 9.2% Pre-tax profit (before exceptional item) 5,366 4,905 + 9.4% Earnings per ordinary share (pence - before-exceptional item and prior year tax adjustments) 19.1 17.6 + 8.5% Dividends (pence) - interim paid 1.9 1.3 - final proposed 3.8 2.5 - total 5.7 3.8 + 50.0% * Exceptional item consisted of flotation costs totalling #639,000 * Since successfully floating on AIM in October 2001, HEC has continued to achieve significant growth * Sales grew by 23.5 per cent to #103 million, reflecting continued strong demand for games consoles and software and DVDs * Expected change in sales mix from rental to sell-thru has reduced gross margin offset by savings achieved by management through tight cost control * Profit before tax and exceptional charges increased by 9.4 per cent to #5.4 million * Capital expenditure of #5.4 million for the year included investment in 18 new Choices Video stores, store refurbishments and 32,000 square feet of new warehouse and office space at Peterborough * Strong net positive cash flow of #743,000 during the period. * Video Box Office expected to benefit in 2003 from investment in the transition from video to DVD rental with the NAAFI contract also contributing to profit * Earnings per share, before exceptional costs and prior year tax adjustments, rose by 8.5 per cent to 19.1 pence * A proposed final dividend of 3.8 pence per share will make a total of 5.7 pence for the year "Our trading performance for the first 8 weeks of the current year, when Group turnover rose 16.9 per cent to #14.1 million, was satisfactory particularly bearing in mind the negative impact of the World Cup on demand for home entertainment. Our confidence in the prospect of further growth in DVD rental and sell-thru and computer games is underpinned by a strong release schedule. We approach our next financial year as an AIM-listed company with the same prudent confidence and care that has characterised our last 15 years of sustained growth." (Iain Muspratt, Chairman) For further information contact: Simon Bloomfield, Bankside Consultants: 0207 444 4140 (office) or 07771 758517 (mobile) CHAIRMAN'S STATEMENT I am pleased to report Home Entertainment Corporation PLC's results for the 52 week period ended 1 June 2002, the first since the Company listed on the Alternative Investment Market ("AIM"). Since floating, we have made significant progress, both in terms of the organic growth we have achieved and in raising the Company's profile with customers and suppliers. Video rental activities suffered from a comparatively poor release schedule but benefited from the growth in Digital Versatile Discs ("DVDs"). Video sell-thru gains were a result of DVD, although the VHS market remained more buoyant than expected. Computer games sales and rentals showed significant improvement, driven by new games and formats. Results Sales in the period increased by 23.5 per cent to #103.04 million (2001: #83.41 million). A significant part of that growth arose from the increased sales of computer games consoles and software and the continued growth in the sale and rental of DVDs. Gross profit for the period was #43.29 million (2001: #37.96 million), an increase of 14.0 per cent. Gross margin declined in the period to 42.0 per cent (2001: 45.5 per cent) as a result of the faster rate of growth from the sale of videos, DVDs and computer games, compared to their rental. Sell-thru activity accounted for 50.1 per cent of the Company's turnover for the period compared to 44.3 per cent in the prior year. Management continued to maintain tight control over net operating costs which, before exceptional charges of #639,000 relating to flotation, were #37.88 million (2001: #33.01 million), and represented 36.8 per cent of sales (2001: 39.6 per cent). Profit before taxation and exceptional charges increased by 9.4 per cent to #5.37 million (2001: #4.91 million). The Company generated positive cashflow of #743,000 in the period and net cash at the period end was #1.27 million. Capital expenditure during the period including investment in 18 new Choices Video stores, store refurbishment and new warehousing and logistics at Peterborough, was #5.37 million (2001: #5.0 million). Basic earnings per share were 14.4 pence, and earnings per share, excluding flotation costs of #639,000 and under-provision in respect of taxation of #203,000 for prior periods, were 19.1 pence compared with 17.6 pence in the previous year. Dividend An interim dividend of 1.9 pence per share was paid on 16 April 2002 and the Board has recommended a final dividend of 3.8 pence per share to be paid on 22 October 2002 to shareholders on the Register at 6 September 2002. Flotation Dealings in Home Entertainment Corporation PLC shares commenced on 25 October 2001 when the Company was successfully floated on AIM. 6,976,712 existing Ordinary shares were placed with a range of institutional and other investors at a price of #1.70 each, representing 39.2 per cent of the issued share capital. Share options amounting to approximately 2 1/2 per cent of the issued share capital of the Company, were granted to 187 employees at the placing price. Trading Overall growth in video, DVD and computer games rental sales was achieved despite a relatively lacklustre new video release schedule and unusually unfavourable weather conditions during the crucial Easter holiday period. Substantial growth in turnover was powered by DVD, Playstation 2 computer games sales and from the launch in May 2002 of Microsoft X-Box and Nintendo Gamecube computer games. As a result of this strong demand, stocks increased by #1.47 million to #9.67 million during the year. A further 32,000 square feet of leasehold warehouse and office space, adjacent to our existing facilities at Manasty Road, Peterborough, were acquired in the year to handle the additional volumes. Fitting out will be completed in September 2002 at a total cost of approximately #675,000. Trading Divisions: Choices Video opened 18 new stores during the year, making a total of 187 at year end. This, together with the cost of store re-fits, resulted in capital expenditure of #3.12 million (2001 : #3.16 million). It is planned to continue opening new stores at a similar rate in the foreseeable future. On a 'like for like' basis, rental and total sales in the year increased by 9.7 per cent and 22.8 per cent respectively. Video Box Office rental and total sales on a 'like for like' basis increased by 4.6 per cent and 15.6 per cent respectively, reflecting the rapid growth in the 'Collections' sell-thru offerings to customers. The transition from video rental product to DVD rental for VBO customers commenced in November 2001 and is now well under way, with DVD now accounting for approximately 20 per cent of rental turnover. The benefit of this DVD investment is expected in early 2003. During the year we completed installations in the UK and overseas for the NAAFI contract and, having incurred extra costs in 2002, the Company expects this contract to contribute to profit in 2003. Choices Direct achieved profitable sales growth in both mail order and fulfilment with 'like for like' sales increasing by 19.2 per cent. A new website was launched in June 2002 supported by a major logistical upgrade in order to exploit a substantial opportunity for Internet sales growth. Mosaic Entertainment's profitability was assisted by the successful release of the feature film 'Ginger Snaps'. Outlook Our trading performance for the first 8 weeks of the current year, when Group turnover rose 16.9 per cent to #14.1 million, was satisfactory particularly bearing in mind the negative impact of the World Cup on demand for home entertainment. During the same period, sell-thru accounted for 47.3 per cent of sales and DVD for 39.5 per cent of video rental in Choices stores. In broad terms we expect the Company to benefit from the continuing consumer take-up of DVD players and computer games consoles. By the end of June 2002, the installed base of DVD players exceeded 4 million and the British Video Association estimates that the total sales will reach 6.5 million by the end of the year. Current estimates are that just under 20 per cent of households had DVD players at the end of May 2002 when DVD was accounting for 38 per cent of video rental activity in Choices stores. On the basis that these trends continue, the Board believes that there is scope for considerable further growth in the overall rental market after taking into account that VHS rental will continue to decline. Our confidence in the prospect for DVD rental and sell-thru growth in the current year is underpinned by a strong release schedule which includes 'Lord of the Rings', 'A Beautiful Mind', 'Blade 2', 'Monsters Inc', 'Ocean's 11' and ' Minority Report'. The enormous volume of new computer games software scheduled for release in the run up to Christmas should ensure that this segment of our business continues to grow. Releases for the current year include 'Getaway' (PS2), 'Grand Theft Auto' (PS2), 'Harry Potter - Chamber of Secrets' (all formats), 'Lord of the Rings - Two Towers' (all formats), 'Mario Sunshine' (GameCube) and 'Tomb Raider - Angel of Darkness' (PS2). Our new website (www.choicesdirect.co.uk ) was launched recently and is proving popular with customers. Still a relatively modest part of our mail order business we are confident in its ability to grow. Mosaic Entertainment will continue its strategy of acquiring a limited number of titles and exploiting them at least risk. However, our success is dependent upon consumer confidence and, in the present uncertain economic environment, there is the risk of consumers limiting their spending. Should that happen the Board believes that the Company is better placed than many to withstand a downturn, as video and DVD rental would become a relatively attractive and cost-effective form of entertainment. We approach our next financial year as an AIM listed Company with the same prudent confidence and care that has characterised our last 15 years of sustained growth. Iain Muspratt Chairman Home Entertainment Corporation PLC _______________________________________________________ PROFIT AND LOSS ACCOUNT for the 52 week period ended 1 June 2002 Notes 2002 2001 #000 #000 TURNOVER 1 103,038 83,408 Costs of Sales (59,751) (45,447) ________ ________ Gross profit 43,287 37,961 Net operating costs (38,515) (33,008) ________ ________ OPERATING PROFIT 2 4,772 4,953 Analysis of Operating Profit: Operating profit before exceptional item 5,411 4,953 Exceptional item - costs of flotation (639) - OPERATING PROFIT 4,772 4,953 Interest payable (45) (48) ________ ________ PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 4,727 4,905 Tax on profit on ordinary activities (2,157) (1,874) ________ ________ PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION 2,570 3,031 Dividends (including non-equity dividends) (1,047) (922) ________ ________ RETAINED PROFIT FOR THE 52 WEEK PERIOD 1,523 2,109 ======= ======= Earnings per Share: 3 Basic 14.4p 17.0p Diluted 13.9p 16.8p Adjusted basic earnings per share (excluding exceptional costs and under-provision in respect of prior periods' taxation) 19.1p 17.6p Dividends per Ordinary share 5.7p 3.8p There are no recognised gains or losses other than the profit attributable to shareholders of the Company of #2,570,000 in the 52 week period ended 1 June 2002 and of #3,031,000 in the 52 week period ended 2 June 2001. BALANCE SHEET at 1 June 2002 Notes 2002 2001 #000 #000 FIXED ASSETS Tangible assets 11,521 10,254 ________ ________ CURRENT ASSETS Stocks 9,672 8,201 Debtors 5,366 5,069 Cash at bank and in hand 1,267 524 ________ ________ 16,305 13,794 CREDITORS: amounts falling due within one year (14,947) (12,865) ________ ________ NET CURRENT ASSETS 1,358 929 ________ ________ TOTAL ASSETS LESS CURRENT LIABILITIES 12,879 11,183 PROVISIONS FOR LIABILITIES AND CHARGES Deferred taxation (166) (109) ________ ________ 12,713 11,074 ======= ======= CAPITAL AND RESERVES Called up share capital 901 890 Share premium account 909 804 Capital redemption reserve fund 1,061 1,061 Profit and loss account 9,842 8,319 ________ ________ Shareholders' funds: Equity 12,713 10,794 Non-equity - 280 ________ ________ 12,713 11,074 ======= ======= STATEMENT OF CASH FLOWS for the 52 week period ended 1 June 2002 Notes 2002 2001 #000 #000 NET CASH INFLOW FROM OPERATING ACTIVITIES 2 9,335 7,329 ________ ________ RETURNS ON INVESTMENTS AND SERVICING OF FINANCE Interest paid (45) (48) Non-equity dividends paid (243) (466) ________ ________ (288) (514) ________ ________ TAXATION Corporation tax paid (2,394) (1,493) ________ ________ CAPITAL EXPENDITURE Proceeds from sale of tangible fixed asset 18 - Payments to acquire tangible fixed assets (5,393) (5,002) ________ ________ (5,375) (5,002) EQUITY DIVIDENDS PAID (651) (467) ________ ________ NET CASH INFLOW/(OUTFLOW) BEFORE FINANCING 627 (147) FINANCING Issue of ordinary share capital 116 - ________ ________ INCREASE/(DECREASE) IN CASH 4 743 (147) ======= ======= RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS 2002 2001 #000 #000 Increase/(decrease) in cash in period 4 743 (147) Net funds at 2 June 2001 524 671 ________ ________ Net funds at 1 June 2002 1,267 524 ======= ======= NOTES TO THE ACCOUNTS 1. TURNOVER Turnover, which is stated net of credits, allowances, trade discounts and VAT, represented amounts invoiced to, or received from, third parties. Turnover comprised income from the rental of pre-recorded video cassettes, digital versatile discs and computer games and sale of pre-recorded video cassettes, digital versatile discs, computer games, mobile telephones and vouchers and other related products. An analysis of turnover by geographical market and segment is given below: Geographical Analysis 2002 2001 #000 #000 United Kingdom 102,077 82,846 Rest of Europe 419 146 Other 542 416 ________ ________ 103,038 83,408 ======= ======= Segmental Analysis 2002 2001 #000 #000 Rental 51,414 46,448 Sales - Games 16,049 8,751 Sales - Others 35,575 28,209 ________ ________ 103,038 83,408 ======= ======= The directors consider it to be seriously prejudicial to the commercial interests of the business to analyse operating profit and net assets geographically or by sector. 2. OPERATING PROFIT Reconciliation of operating profit to net cash inflow from operating activities: 2002 2001 #000 #000 Operating profit 4,772 4,953 Depreciation 4,108 3,608 Increase in debtors (297) (1,825) Increase in stocks (1,471) (2,718) Increase in creditors 2,223 3,311 ________ ________ Net cash inflow from operating activities 9,335 7,329 ======== ======== Net cash inflow from operating activities included cash outflows of #639,000 relating to flotation costs. 3. EARNINGS PER SHARE 52 weeks ended 52 weeks ended 1 June 2002 2 June 2001 Diluted Basic Diluted Basic Earnings #2,570,438 #2,570,438 #3,031,230 #3,031,230 __________ __________ __________ __________ Number of shares at 2 June 2001 17,791,852 17,791,852 17,791,852 17,791,852 Shares issued 224,123 224,123 - - Dilutive effect of share option schemes 633,900 - 287,523 - __________ __________ __________ __________ 18,649,875 18,015,975 18,079,375 17,791,852 ========= ========= ========= ========= Weighted average number of shares 18,451,083 17,890,284 18,079,375 17,791,852 __________ __________ __________ __________ Earnings per share 13.9p 14.4p 16.8p 17.0p Adjusted earnings per share 18.5p 19.1p 17.3p 17.6p Adjusted earnings per share excluded the effects of exceptional (flotation) costs of #639,000 (2001 - #Nil) and an under-provision in respect of prior periods' taxation of #203,000 (2001 - #100,000) and is presented in order to show the underlying performance of the Company. 4. ANALYSIS OF CHANGES IN NET FUNDS At 2 Cash At 1 June Flows June 2001 2002 #000 #000 #000 Cash at bank and in hand 524 743 1,267 ====== ====== ====== Cash outflows included an exceptional amount of #639,000 relating to flotation costs. 5. ANNUAL GENERAL MEETING The 2002 Annual General Meeting of Home Entertainment Corporation PLC will be held at19 - 24 Manasty Road, Orton Southgate, Peterborough, PE2 6UP, on Thursday 26th September 2002 at 10:00am. 6. COPIES OF ANNUAL REPORT Copies of the annual report for the 52 weeks ended 1 June 2002 are available, free of charge, to the public on any week day (excluding Saturdays), at the registered office of the Company (19 - 24 Manasty Road, Orton Southgate, Peterborough, PE2 6UP) 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 1 month thereafter. 7. NATURE OF FINANCIAL INFORMATION The financial information set out above does not comprise the Company's statutory accounts. Statutory accounts for the 52 week period ended 2 June 2001 have been delivered to the Registrar of Companies. The auditors' report on those accounts was unqualified and contained no statement under section 237(2) or (3) of the Companies Act 1985. TRADING DIVISIONS The trading division of HEC are as follows: Video Box Office (at www.vbo.co.uk ) Provides a service throughout the United Kingdom to convenience stores and other retailers, enabling them to add video and DVD sales and rental and computer games software sales to the range of products offered to their customers. Choices Video (at www.choicesvideo.co.uk ) Operated through 187 (2 June 2001 - 169) retail outlets in England and Wales, offering videos, DVDs and computer games rental and sales, games consoles for sale, the sales of 'Pay As You Go' mobile telephones and 'Top-Ups' (including ' E-Top-Ups') and ice cream and confectionery. Choices Direct (at www.choicesdirect.co.uk ) Choices Direct offers video and DVD, as well as providing talking tapes released in the United Kingdom on audio cassette and compact disc, for sale through mail order. Customers can access the Choices Direct service by mail, by 'phone or via Choices Direct's website. Choices Direct also manages and fulfils video and DVD sales for many of the large mail order catalogue companies in the United Kingdom, including GUS, Freemans, Littlewoods and Book Club Associates. The service offered is comprehensive, ranging from title selection advice and compilation, through to fulfilment of customers' orders. Mosaic Entertainment (at www.mosaic-entertainment.co.uk ) Mosaic Entertainment invests in and acquires the rights to a range of feature films and television programmes and then releases them to the general consumer video and DVD market in the United Kingdom and the Republic of Ireland (including arm's length sales to other divisions of the Company). This information is provided by RNS The company news service from the London Stock Exchange END FR UBVBRUWRWUAR
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