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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Henderson European Trust Plc | LSE:HET | London | Ordinary Share | GB00BLSNGB01 | ORD 5P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
4.50 | 2.51% | 183.50 | 182.00 | 182.50 | 183.50 | 180.00 | 180.00 | 592,515 | 16:35:19 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Unit Inv Tr, Closed-end Mgmt | 79.72M | 75.29M | 0.2269 | 8.04 | 594.02M |
RNS Number:4085C Home Entertainment Corporation PLC 31 August 2004 Home Entertainment Corporation Press Release Results for the 53 weeks ended 5 June 2004 Financial highlights (figures in #000s) 53 weeks 52 weeks ended 5/6/2004 ended 31/5/03 (Audited) (Audited) Turnover 128,862 + 6.8% 120,664 Operating profit before exceptional items* 4,774 -18.8% 5,882 Pre-tax profit after exceptional items* 4,701 -20.1% 5,950 Earnings per share (pence) 17.0 -18.7% 20.9 Dividend per share (pence) 6.6 + 4.8% 6.3 * Net exceptional credit of #9,000 (2003: #62,000 credit) * Sales increased by 6.8 per cent to #128,862,000 (2003: #120,664,000) reflecting continued buoyant demand for digital versatile discs ("DVDs") and games software against a background of significant price deflation in DVDs. * Rental activity during the year was adversely affected by unprecedented hot and fine weather. * Internet business grew by 74.4 per cent compared with last year. * New EPOS system successfully installed in all 213 Choices stores in 20 weeks. * Positive cash balances of #1.18 million at 5 June 2004 (2003: #2.09 million) after capital expenditure of #6.7m (2003: #7.6m). * New warehousing and distribution premises were acquired which has enabled the consolidation of operations within one facility from the end of July 2004. * #1.34 million underfunding of HEC Discretionary Pension Scheme has been eliminated. "We have made a good and improved start to the current year despite 'wall to wall' sport. We face the increasingly important Autumn and Christmas periods with confidence and determination.' (Iain Muspratt, Chairman) For further information contact Iain Muspratt (Home Entertainment Corporation): 01733 363099 Simon Bloomfield or Trisha Davies Bankside Consultants: 0207 444 4140 (office) or 07771 758517 (mobile) CHAIRMAN'S STATEMENT Profit before tax is as estimated in the trading update I issued on 25 June 2004. The period ended 5 June 2004 was one during which we chose to invest in a range of new systems, relocated our central logistics centre and launched new activities at the same time as experiencing an unexpected downturn in rental activity due to the unprecedentedly long hot summer. The result of that 'double whammy' is the first setback in profits growth we have suffered since 1990. However, the results of the current year to date indicate that the benefits of the investments are, with one exception, proving successful and are contributing to an improvement in year on year performance. During the year we appointed two additional non-executive directors - Michael Riding and John Sealey. Michael is about to retire from Lloyds TSB Bank plc where he has been Managing Director, Corporate Banking and Chairman of Lloyds TSB Development Capital Limited. John served as Group Finance Director of this Company until his retirement in May 2004. We welcome the experience and value judgments they will provide. Both will be members of the Audit and Remuneration Committees. Gareth Clark will be retiring from the Board on 18 October 2004 having completed three years service as a non-executive director and we would like to thank him for his counsel. Results Overall turnover growth was 6.8 per cent against a background of a reduced number of new store openings (whilst effort was concentrated in installing our new EPOS system) and substantial price deflation in DVDs. Gross Profit increased by 11.4 per cent and Gross Margins by 1.7 per cent to 42.6 per cent (2003: 40.9 per cent) as our volumes on selling activities and product ranges grew. Sales activity accounted for 55.2 per cent of the Company's turnover compared to 53.4 per cent in the prior period. Sales activities grew by 10.4 per cent and rental activity by 2.6 per cent. Operating Profit before exceptional items declined to #4.77 million compared to #5.88 million in 2003. Net cash at the end of the period was #1.18 million (2003: #2.09 million). Capital Expenditure Incurred was #6.71 million (2003: #7.60 million) reflecting investments in store openings and relocations, central systems and the new logistics centre. Basic earnings per share were 17.0p (2003: 20.9p). Our actuaries have advised us that the underfunding of HEC Discretionary Pension Scheme has been eliminated. Immediately prior to HEC's admission to AIM this underfunding amounted to #1.34 million. Dividend An interim dividend of 2.2 pence per share (2003: 2.1 pence) was paid on 16 April 2004 and the Board is recommending a final dividend of 4.4 pence per share (2003: 4.2 pence) to be paid, subject to approval at the Annual General Meeting on 30 September 2004, on 29 October 2004 to shareholders on the Register as at 17 September 2004. Trading The year was characterised by rapid growth in DVD sales volumes accompanied by very substantial price deflation, particularly in catalogue product. Christmas trading was generally satisfactory. Fine weather at key periods adversely affected rental activities. Huge effort was invested in our new EPOS system which enabled us to start to successfully introduce new activities in store towards the end of the financial period. These are already producing incremental profits. Work started on fitting out our new logistics centre and some of our activities were located there by the period end. The final moves took place at the end of July 2004. During the year we launched our new Internet based rental service in association with Book Club Associates - part of the DirectGroup Bertlesmann. This venture incurred losses contributing further to the fall in profitability. Trading Divisions Choices Video opened a net three new stores during the year making a total of 213 at the period end. There were 11 openings, two relocations and eight closures. Total Capital Expenditure (excluding the new EPOS system) was #2.59 million (2003: #4.12 million). On a like for like basis rental and sales activities increased by 7.1 per cent and 6.1 per cent respectfully. Video Box Office rental revenues declined slightly during the year but this was offset by a higher rate of increase in sales activity. DVD is now well established in all VBO outlets and, as with Choices Video, a range of new activities (and customers) were introduced towards the end of the year and continue to be developed. Choices Direct grew both its Internet and paper-based mail order businesses but the fulfillment business declined slightly for reasons outside our control. This was a one off situation which has now been rectified. Margins came under pressure during the year as a result of price deflation in traditional retail outlets. Overall revenues grew by 14 per cent. Mosaic Entertainment achieved a 93 per cent increase in turnover as a result of adding a wider range of sell thru product to the titles that have been licensed. The division was profitable. MovieChoices (initially launched as 'ChoicesErental') commenced trading and has grown its subscriber base albeit at a slower rate than originally anticipated. As with many new activities it was loss making. The financial period ended 5 June 2004 has not been easy but we have made progress. I should like to thank my colleagues and staff for the determined way they have reacted to the challenges it has presented. Outlook We believe that our future lies in our ability to innovate our entertainment offerings both in how we deal with our customers and in what we offer them. In every trading division we have introduced a combination of new activities and new (related) products or laid the foundation to do so. The area to develop most initially has been Choices Video where results for the first two periods of our current financial year have much improved compared with 2003 - notwithstanding the adverse effect of Euro 2004. Five new stores have been opened and are trading as expected and the new EPOS system is producing considerable benefit. Video Box Office has broadly maintained year on year performance during that time but is more susceptible to external factors over which we have no control. Further new initiatives are planned during the run up to Christmas. Choices Direct is also broadly in line with the previous year which we consider to be a creditable performance given the relative paucity of major releases. All platforms and associations for the run up to Christmas are in place and with an unprecedentedly heavy release line up there is no reason to believe that this crucial period should not meet our expectations provided consumer confidence is not dented. Mosaic Entertainment has released less than it did during the same period last year but has its best ever line up for Christmas and beyond. Our new MovieChoices business has grown but continues to lose money. We are monitoring performance of both that sector (a very small part of the overall rental business) and our part in it with care. We have made a good and improved start to the current year despite 'wall to wall' sport. We face the increasingly important Autumn and Christmas periods with confidence and determination. Iain Muspratt, Chairman 27 August 2004 INDEPENDENT AUDITORS' REPORT to the members of Home Entertainment Corporation PLC We have audited the accounts for the 53 week period ended 5 June 2004 which comprise the Profit and Loss Account, Balance Sheet, Statement of Cash Flows and the related notes 1 to 22. These accounts have been prepared on the basis of 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' responsibilities for preparing the Annual Report and the accounts in accordance with applicable United Kingdom law and accounting standards are set out in the Statement of Directors' Responsibilities. Our responsibility is to audit the accounts in accordance with relevant legal and regulatory requirements and United Kingdom Auditing Standards. We report to you our opinion as to whether the accounts give a true and fair view and are properly prepared in accordance with the Companies Act 1985. We also report to you if, in our opinion, the Directors' Report is not consistent with the accounts, if 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 transactions with the Company is not disclosed. We read other information contained in the Annual Report and consider whether it is consistent with the audited accounts. This other information comprises the Chairman's Statement, the Directors' Report, Corporate Governance Statement and Report on Remuneration. 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 OPINION We conducted our audit in accordance with United Kingdom Auditing Standards 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 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 accounts 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 accounts OPINION In our opinion the accounts give a true and fair view of the state of affairs of the Company as at 5 June 2004 and of the profit of the Company for the period then ended and have been properly prepared in accordance with the Companies Act 1985. Ernst & Young LLP Registered Auditor Cambridge 27 August 2004 PROFIT AND LOSS ACCOUNT for the 53 week period ended 5 June 2004 Notes 2004 2003 (53 weeks) (52 weeks) #000 #000 TURNOVER 1 128,862 120,664 Cost of sales (73,937) (71,366) Gross profit 54,925 49,298 Net operating costs 3 (50,471) (43,354) OPERATING PROFIT 2 4,454 5,944 Analysis of Operating Profit: Operating profit before exceptional items 4,774 5,882 Exceptional item - credit in respect of flotation costs - 62 Exceptional item - EPOS implementation (320) - OPERATING PROFIT 4,454 5,944 Exceptional gain on disposal of tangible fixed asset 329 - Net interest (payable) / receivable (82) 6 PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 4,701 5,950 Tax on profit on ordinary activities (1,638) (2,184) PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION 3,063 3,766 Dividends (including non-equity dividends) 3 (1,191) (1,135) RETAINED PROFIT FOR THE PERIOD 1,872 2,631 Earnings per Share: Basic 4 17.0p 20.9p Diluted 4 15.8p 20.0p Adjusted basic earnings per share (excluding exceptional items and over-provision in respect of prior periods' taxation) 4 16.9p 20.5p Dividends per Ordinary share 3 6.6p 6.3p There are no recognised gains or losses other than the profit attributable to shareholders of the Company of #3,063,000 in the 53 week period ended 5 June 2004 and of #3,766,000 in the 52 week period ended 31 May 2003. BALANCE SHEET at 5 June 2004 Notes 2004 2003 #000 #000 FIXED ASSETS Tangible assets 15,676 14,418 CURRENT ASSETS Stocks 12,200 10,514 Debtors 6,550 7,161 Cash at bank and in hand 1,183 2,088 19,933 19,763 CREDITORS: amounts falling due within one year (18,022) (18,533) NET CURRENT ASSETS 1,911 1,230 TOTAL ASSETS LESS CURRENT LIABILITIES 17,587 15,648 PROVISIONS FOR LIABILITIES AND CHARGES: Deferred taxation (310) (304) 17,277 15,344 CAPITAL AND RESERVES Called up share capital 903 901 Share premium account 968 909 Capital redemption reserve 1,061 1,061 Profit and loss account 14,345 12,473 SHAREHOLDERS' FUNDS - EQUITY 17,277 15,344 I D Muspratt ) ) Directors C J White ) 27 August 2004 STATEMENT OF CASH FLOWS for the 53 week period ended 5 June 2004 Notes 2004 2003 #000 #000 NET CASH INFLOW FROM OPERATING ACTIVITIES 2 8,625 11,412 RETURNS ON INVESTMENTS AND SERVICING OF FINANCE Interest (paid) / received (82) 6 TAXATION Corporation tax paid (2,110) (1,934) CAPITAL EXPENDITURE Proceeds from sale of tangible fixed assets 466 - Payments to acquire tangible fixed assets (6,711) (7,600) (6,245) (7,600) EQUITY DIVIDENDS PAID (1,154) (1,063) NET CASH (OUTFLOW) / INFLOW BEFORE FINANCING (966) 821 FINANCING Issue of Ordinary share capital 61 - (DECREASE) / INCREASE IN CASH (905) 821 RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS 2004 2003 #000 #000 (Decrease) / Increase in cash in period (905) 821 Net funds at 31 May 2003 2,088 1,267 Net funds at 5 June 2004 1,183 2,088 NOTES TO THE ACCOUNTS at 5 June 2004 1. 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 sale of pre-recorded DVDs, video cassettes, computer games, mobile telephones and 'E-Top-Ups' and other related products. An analysis of turnover by geographical market and segment is given below: 2004 2003 (53 Weeks) (52 Weeks) #000 #000 Geographical Analysis United Kingdom 127,509 119,466 Rest of Europe 787 680 Other 566 518 128,862 120,664 Segmental Analysis Rental 57,695 56,227 Sales - Games 18,553 19,139 Sales - Others 52,614 45,298 128,862 120,664 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: 2004 2003 (53 Weeks) (52 Weeks) #000 #000 Operating profit 4,454 5,944 Depreciation 5,316 4,703 Decrease/(Increase) in debtors 611 (1,795) Increase in stocks (1,686) (842) (Decrease)/Increase in creditors (70) 3,402 Net cash inflow from operating activities 8,625 11,412 Net cash inflow from operating activities includes an outflow of #320,000 in 2004 in respect of exceptional EPOS implementation costs, and includes an inflow of #62,000 in 2003 in respect of flotation costs. Proceeds from sale of tangible fixed assets in the Statement of Cash Flows in 2004 includes #466,000 from the exceptional sale of tangible fixed assets. 3. DIVIDENDS 2004 2003 (53 Weeks) (52 Weeks) #000 #000 Equity dividends on Ordinary shares: Interim 2.2p - paid (2003: 2.1p) 397 378 Final 4.4p - proposed (2003: 4.2p) 794 757 1,191 1,135 4. EARNINGS PER SHARE 53 weeks ended 52 weeks ended 5 June 2004 31 May 2003 Diluted Basic Diluted Basic Earnings #3,063,379 #3,063,379 #3,766,584 #3,766,584 Number of shares at start of period 18,015,975 18,015,975 18,015,975 18,015,975 Shares issued 36,125 36,125 - - Dilutive effect of share option schemes 1,482,150 - 1,011,025 - 19,534,250 18,052,100 19,027,000 18,015,975 Weighted average number of shares 19,371,188 18,033,361 18,877,500 18,015,975 Earnings per share 15.8p 17.0p 20.0p 20.9p Adjusted earnings per share 15.8p 16.9p 19.5p 20.5p Adjusted earnings per share excludes the effects of exceptional EPOS implementation costs of #320,000 and exceptional gain on disposal of tangible fixed asset of #329,000 (2003: #62,000 flotation credit and #15,000 over-provision in respect of prior period's taxation) and is presented in order to show the underlying performance of the Company. 5. ANNUAL GENERAL MEETING The 2004 Annual General Meeting of Home Entertainment Corporation PLC will be held at 19-24 Manasty Road, Orton Southgate, Peterborough, PE2 6UP, on Thursday 30 September 2004 at 10.00am. 6. COPIES OF ANNUAL REPORT Copies of the annual report for the 53 weeks ended 5 June 2004 are available, free of charge, to the public on any week day, 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 one month thereafter. Alternatively, the annual report can be accessed by visiting the Company's website at www.hecplc.com. 7. NATURE OF FINANCIAL INFORMATION The financial information set out above does not comprise the Company's statutory accounts. Statutory accounts for the 53 week period ended 5 June 2004 have been delivered to the Registrar of Companies. The auditor's report on those accounts was unqualified and contained no statement under section 237 (2) or (3) of the Companies Act 1985. 8. TRADING DIVISIONS Video Box Office 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. www.vbo.co.uk Choices Video Operated through 213 (31 May 2003: 210) Company owned retail outlets in England and Wales, offering DVDs, videos and computer games rental and sales, games consoles for sale, the sales of 'Pay As You Go', 'Network Branded' and 'SIM Free' mobile telephones, 'top-ups' (including 'E-Top-Ups') and ice cream and confectionery. www.choicesvideo.co.uk Choices Direct Choices Direct offers DVDs, videos, computer games and talking tapes released in the United Kingdom for sale through mail order. Customers can access the Choices Direct service by mail, by telephone or over the Internet via Choices Direct's website. www.choicesdirect.com Choices Direct also manages and fulfils DVD 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. Moviechoices Moviechoices was relaunched in June this year (formerly choicesErental) and offers the rental of DVDs via the Internet utilising Home Entertainment Corporation's vast experience in this area. The present range of 20,000 titles is being extended daily and provides our customers with a valued service. www.moviechoices.com Mosaic Entertainment 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 DVD, video and TV markets in the United Kingdom and the Republic of Ireland (including arm's length sales to other divisions of the Company). www.mosaic-entertainment.co.uk This information is provided by RNS The company news service from the London Stock Exchange END FR UBOBRSARWUAR
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