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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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H.R.Owen | LSE:HRO | London | Ordinary Share | GB0005202527 | ORD 50P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 165.00 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
TIDMHRO H.R. Owen Plc (the "Company" or the "Group") Preliminary Results 2013 H.R. Owen, the luxury motor retailer, today announces its preliminary results for the year ended 31 December 2013. Financial Highlights * Revenue up 7% to GBP261.1 million * Profit before exceptional items, discontinued operations and tax (the "underlying operating profits") of GBP3.8 million (2012: GBP2.3 million), an increase of 63% * Profit before tax of GBP2.4 million (2012: GBP2.3 million) * Profit from discontinued operations for the year of GBP0.2 million (2012: GBP0.3 million) * Basic earnings per share from continuing operations before exceptional charges of 13.1 pence (2012: 6.0 pence) * Basic earnings per share of 8.4 pence (2012: 7.3 pence) * Proposed final dividend for 2013 of 2.0 pence per share (2012: 1.25 pence per share) Joe Doyle- Chief Executive, H.R.Owen Plc commented; "This is an excellent result with underlying trading profits up 63% year on year. It was driven by a strong performance acrossall areas of the business, although of particular satisfaction was the execution of our used car strategy, delivering an increase in volumes of over 30%whilst also increasing average margins.The outlook for the business remains very positiveas we have a substantial new car forward order book. We will alsocontinue in 2014, to pursue our strategy of increasing manufacturer representation and delivering value added new products." Further Information: H.R. Owen (020 7245 1122) Joe Doyle, Mike Warren Charles Stanley Securities (020 7149 6000) Marc Milmo, Carl Holmes Halkin Communications (07904 680 547) Sara Batchelor About H.R. Owen H.R. Owen has evolved into the business it is today over a period of nearly 70 years. We operate a number of vehicle franchises in the prestige and specialist car market for both sales and aftersales, predominantly in the London area. These cover fifteen sales franchises and eighteen aftersales franchises for Aston Martin, Audi, Bentley, BMW, Bugatti, Ferrari, Lamborghini, Lotus, Maserati, MINI, Pagani and Rolls-Royce. We have a long and prestigious history and can trace our foundations back to the formation by Harold Rolfe Owen of a dealership selling Bentley and Rolls-Royce cars in 1932. More information about H.R. Owen can be found on our website http://www.hrowen.co.uk. Chairman's Statement In what was an eventful year for the Group, I am pleased to report that the trading performance during 2013 was very strong, with underlying operating profits up by 63%. Capital management was substantially improved, with return on capital for the year advancing by four percentage points. We also continued to enjoy a healthy cash position, with cash and deposits as at 31 December 2013 amounting to GBP11 million, some GBP5 million higher than at 31 December 2012. During 2013 we continued to progress the development of several key strategic initiatives. Our used car performance, which is a key area of opportunity for the Group, showed excellent growth, with volumes up by 30% from the previous year and with margins also higher. Digital marketing was further enhanced, resulting in visitor numbers to our website, www.hrowen.co.uk, increasing by 36% over the previous year and continuing to grow at an encouraging rate. Our new Customer Relationship Management system was fully implemented throughout the Group and we have continued to develop our customer magazine "DRIVE". The results from the former Broughtons business, which was acquired in August 2011 and was re-branded in 2012 as H.R. Owen, showed further significant improvement in 2013, contributing in excess of GBP1 million towards the Group's annual profit. The acquisition was strongly earnings enhancing in 2013. During the summer of 2013, we commenced trading at our new Lamborghini franchise for Berkshire, which is based alongside Bentley at our existing Pangbourne premises. We were delighted to welcome Thomas Felbermair, Commercial Director of Lamborghini SpA, to the dealership for its formal opening in September. We continue to develop the future strategy of the Company with further opportunities to grow both our used car and aftersales businesses, and have recently launched an H.R. Owen branded accident aftercare business. We also continue to strengthen relationships with our manufacturer partners, and expect to be opening at least one additional franchise during 2014. Our progressive dividend policy has been maintained and accordingly we have increased the proposed final dividend for 2013 to 2 pence per ordinary share. Total payment of dividends for 2013 will therefore amount to 4 pence per share, representing an increase of 78% over the 2¼ pence per share paid to shareholders in relation to 2012. In July 2013 the Board received an offer for the Company of 130 pence per share from Berjaya Philippines Inc ("BPI"). Subsequently, in September 2013, BPI increased their offer to 170 pence per share, which the Board considered represented fair value for H.R. Owen and, as a result, recommended that shareholders accept the increased offer. In October BPI closed their offer and announced that their total beneficial shareholding amounted to approximately 71.2% of the Company's issued share capital. Our previous largest shareholder, Bentley Motors Limited, decided to retain their shareholding, and currently own approximately 26.3% of the Company's issued share capital. Following the successful completion of Berjaya's offer, the Chairman, Jon Walden decided to step down from the Board and, as Senior Independent Director, I agreed to chair the Board until a new Chairman is appointed. Earlier this month, shareholders approved a resolution to de-list the Company and we expect this process to complete on 15 April 2014. This will mark the beginning of a new chapter in the Company's history and we look forward to working closely with BPI and Bentley to continue growing and developing the business. We are pleased with the way trading has commenced in the current financial year and we look forward to 2014 with confidence. Our balance sheet remains strong with a healthy cash position and we have the resources to continue to generate profitable growth in our existing businesses, as well as develop new opportunities as they arise. Finally, I would like to record my appreciation of the significant contribution made by all of our colleagues to the Group's performance in 2013. Debbie Hewitt MBE Chairman 26 March 2014 Business Review Results In the year to 31 December 2013, revenue from continuing operations increased to GBP261.1 million (2012: GBP243.5 million). The Group made a profit from continuing operations before tax and exceptional items for the year of GBP3.8 million (2012: GBP2.3 million). The Group incurred an exceptional charge of GBP1.4 million in the year associated with the successful offer made by Berjaya Philippines Inc ("BPI"). Earnings per share from continuing operations before exceptional items were 13.1 pence (2012: 6.0 pence) with total earnings per share from continuing operations of 7.4 pence (2012: 6.0 pence). The Group's basic earnings per share for the year were 8.4 pence (2012: 7.3 pence). The Group's effective corporation tax rate for 2013 was 24.8%, significantly lower than the 39.2% experienced in the comparative period. The tax charge for 2012 included capital gains tax which crystallised on a previously held-over gain associated with a premium received on the surrender of a lease whilst the current year charge benefitted from tax deductions associated with the issue of shares under the Company's long term incentive plan. A final dividend for 2012 of 1.25 pence per share and an interim dividend for 2013 of 2.0 pence per share were paid during the year. Considering the performance of the Company during 2013, the directors are now recommending the payment of an increased final dividend for 2013 of 2.0 pence per ordinary share, to be paid on 23 May 2014 to shareholders on the register at the close of business on 25 April 2014. The Board continues to plan for a progressive dividend growth strategy for future years. Review of financial position At 31 December 2013, the Group had cash balances of GBP11.0 million (2012: GBP6.2 million, inclusive of current interest-bearing deposits of GBP1.5 million) and vehicle stocking loans (excluding manufacturer stocking loans) of GBP8.0 million (2012: GBP9.1 million). The Group recorded a cash inflow for the year of GBP6.3 million (2012: outflow of GBP2.5 million). Net assets increased in the year by 24% to GBP15.6 million helped by the strong trading result, a significant reduction in the deficit on the Group's defined-benefit pension scheme and by share issues in the year. Net current asset more than doubled in the year to GBP4.9 million. Review of operationsand principal activities The H.R. Owen group ("the Group") operates a number of vehicle franchises in the prestige and specialist car market for both sales and aftersales, predominantly in the London area but also in Berkshire, Gloucestershire, Hertfordshire, Surrey, and Manchester. The Group continues to focus on selling luxury and supercars to wealthy and discerning car buyers, primarily in the South of England and to delivering superior customer service to many of the UK's wealthiest people. The Group holds dealer agreements with various manufacturers. These cover fifteen sales franchises and fourteen aftersales franchises for its Aston Martin, Bentley, Bugatti, Ferrari, Lamborghini, Maserati, Pagani and Rolls-Royce marques. The Group also operates aftersales only franchises for Audi, BMW, Lotus and MINI. We recorded healthy growth in the volumes of cars sold in 2013 with a particularly strong used car performance. Our Jack Barclay Bentley dealership achieved the highest used car sales figures in the world in 2013 and was the third highest for new cars. However, overall, our new car volumes fell slightly year-on-year which reflected the UK national position for registrations for our marques. Our sales of Bugattis remained amongst the highest in the world and our Bentley Surrey dealership was the manufacturer's top performing dealer in the UK. Like-for-like, combined new and used car sales increased by 15%. In total, 672 new cars and 1,101 used cars were sold during the year. Profits from the aftersales side of the business in 2013 improved to GBP7.8 million due to continuing excellent profitability in our key parts operations. I was especially proud of our Jack Barclay aftersales business which was successful in acquiring the Royal Warrant for Her Majesty the Queen, whilst our Audi aftersales business won the "Technical Cup for 2013" beating all the other Audi UK outlets for diagnosing and repairing technical faults. Our Bugatti aftersales operation retains its status as a "Service Partner of Excellence", one of only four in their worldwide network. Our Ferrari and Maserati aftersales operations service the most vehicles of this type of dealers in Europe. Focus areas targeted in 2013 Three areas targeted for 2013 all saw significant improvement; * Used car sales were 30% up year-on-year, helped by faster stock preparation, an increased buying team and wider advertising of stock. The Group won the `Used Car Dealership of the Year' award from Car Dealer magazine, which reported, "H.R. Owen has undergone a magnificent transformation". * The `Group First' objective was championed behind the scenes through the completion of the rollout of KORE, which allows all sites to see all customers, and in public through Group-level activities and events underpinned by consistent branding. Employees responded strongly in the staff survey to the statement "I feel as much a part of the H.R. Owen group as my specific site or franchise". * Improvements in customer service were measured by rolling out surveys to all customers via KORE. Over 2,500 email questionnaires were sent out in the final quarter of 2013, generating a 13% response rate. The results were exceptional and demonstrate the high value our customers place on H.R. Owen service. The main measure on the survey is the widely used Net Promoter Score, and the Company saw an average score of +71 (to put this in context Apple, one of the world's most desirable brands, achieved a score of +47 in a 2012 Interbrand survey). Other key events In March, the Group's defined benefit pension scheme was closed to future accrual with all existing members being transferred across to a new defined contribution Scheme and therefore becoming deferred members of the defined benefit scheme. This resulted in a curtailment gain arising of GBP343,000 which has been credited to Other Income in the Income Statement. In November 2013 we repeated our annual employee survey. This was well received with pleasing levels of participation and showed significant improvements in levels of staff morale and motivation. Future outlook We continue to hold a strong order book for new cars and expect to benefit further from additional new models due for launch in 2014. Used car trading has started the year very strongly and aftersales is also ahead of current expectations. I am also pleased to announce that an agreement has been reached with one of our existing manufacturer partners for the grant of additional sales and aftersales franchises, which will open in late 2014. The foundations for the Group's success in serving a highly discerning target market are now firmly in place and as 2013 has shown, the Group is already reaping the benefit in both employee and customer loyalty. For 2014, three areas of significance have been identified to focus on; * Closing the gap between the top and bottom performers through coaching, training and performance management; * Creating a `one H.R. Owen' ethic across all sites; * Identifying efficiency gains and incremental improvements that collectively will improve profits and service. Principal risks and uncertainties The management of the business and the execution of the Group's strategy are subject to a number of risks. These risks are formally reviewed by the Board and where appropriate, monitored and mitigated by suitable processes. Any business associated with the sale of cars is vulnerable to outside factors, both political and economic. Interest rate changes, increasing fuel costs, congestion charging and broader environmental concerns could all have an impact on a consumer's decision whether or not to buy a particular new or used car. Our activities are spread across a number of manufacturers and across both new and used cars and aftersales in order to attempt to minimise the risks that arise. The Group continues to be dependent on high volumes of new car sales to allow our business model to make a pre-tax profit as the cost of getting to market in one of the most expensive cities in the world remains very high. However, the Group is particularly sensitive to any deterioration in trading conditions, especially where that is combined with a lack of new model introductions. Having said this, our main franchises performed robustly and the Bentley, Ferrari, Lamborghini and Rolls-Royce London operations retained their position as the UK's largest dealer outlet for the supply of new cars. Other risks relate to the close contractual relationships we have with a number of vehicle manufacturers and in particular our reliance on their continuing to supply a suitable mix of popular vehicle models at competitive prices. If this supply ceases, is restricted or over-supplied for any reason, then clearly the impact on our performance, especially in relation to new cars, could have an adverse effect on profitability. This risk is mitigated by the Group's spread of manufacturer relationships and the Group's careful observance of maintaining manufacturer operational standards. Any change in control of the Group could run the risk of either impacting on the relationships we have with the manufacturers or conceivably causing our contracts with them to be terminated altogether. However, we are satisfied that no adverse consequences have resulted from the recent acquisition of a majority shareholding in the Company by Berjaya Philippines Inc. Possible future changes to the legislative framework governing the sale of new cars in the UK and the competition provided by internet-based brokers and sellers, also pose risks to us. We have developed a significant on-line presence in order to ensure exposure to these rapidly developing new avenues of sale. In the area of aftersales, any improvement in the reliability and durability of cars will reduce their need for servicing and repairs, and the threat of increased competition from the independent service and repair sector is now a permanent feature of the market. The Group's investment in maintaining close relationships with its customers aims to generate customer loyalty and mitigate the risk of aftersales work migrating to the independent sector. Finally, the Group is dependent upon a number of business critical systems which, if interrupted for a significant period of time, would be likely to have a material effect on the smooth running of the Group's operational and financial systems. A number of contingency plans are already in place to minimise this risk and which aim to ensure that the Group could resume operations within an appropriate period of time. Key performance indicators ("KPIs") The Group monitors performance by reference to seven KPIs. Performance, during the current and prior year, is set out in the table below. 2013 2012 Segment profit percentage: * Sales 6% 5% * Aftersales 21% 22% New vehicle volumes 672 694 Used vehicle volumes: 1,101 844 Aftersales labour efficiency 86% 82% Return on capital employed 13% 10% Annual staff survey participation rate 86% 80% Net promoter score from annual staff survey 39 16 Segment profit percentage for vehicle sales improved slightly from 2012 levels, due to a significantly improved used car performance. However, profit percentages achieved for aftersales fell marginally due to changes in sales mix. Aftersales labour efficiency, defined as the hours sold by our technicians as a percentage of their total hours worked, improved in the year as we reaped the benefits of operational efficiencies during the period. Return on capital employed improved significantly during 2013 due to a combination of increased levels of profitability and tight controls over the levels of working capital. Net Promoter Score ("NPS") is a widely used management tool for gauging the loyalty of a firm's relationships. NPS can be used with both staff and customers, and serves as an alternative to traditional satisfaction research. Staff are asked whether they would recommend H.R. Owen as a place to buy from and then whether they would recommend the company as a place to work. From individual scores an overall score for a business, ranging from -100 to +100, can be calculated. An NPS that is greater than zero is considered good and an NPS of more than 50 is considered excellent. Joe Doyle Chief Executive 26 March 2014 Unaudited Consolidated Income Statement for the year ended 31 December 2013 Notes Before Exceptional 2013 2012 Exceptional Items Total Total Items GBP'000 GBP'000 GBP'000 GBP'000 Continuing operations Revenue 261,096 - 261,096 243,516 Cost of sales (222,072) - (222,072) (208,237) Gross profit 39,024 - 39,024 35,279 Other income 730 - 730 304 Distribution costs (19,465) (42) (19,507) (17,303) Administrative (15,594) (1,365) (16,959) (14,993) expenses Operating profit 4,695 (1,407) 3,288 3,287 Finance costs (980) - (980) (1,571) Finance income 60 - 60 596 Profit before 3,775 (1,407) 2,368 2,312 taxation Taxation (643) 55 (588) (906) Profit for the year 3,132 (1,352) 1,780 1,406 from continuing operations Profit for the year 6 233 - 233 325 from discontinued operations Profit for the year 3,365 (1,352) 2,013 1,731 attributable to owners of the parent Earnings per share from continuing operations: - Basic (pence per 3 7.4p 6.0p ordinary share) - Diluted (pence per 3 7.4p 6.0p ordinary share) Earnings per share: - Basic (pence per 3 8.4p 7.3p ordinary share) - Diluted (pence per 3 8.4p 7.3p ordinary share) Unaudited Consolidated Statement of Other Comprehensive Income for the year ended 31 December 2013 2013 2012 GBP'000 GBP'000 Profit for the year 2,013 1,731 Actuarial gains/(losses) recognised in defined 658 (581) benefit pension scheme Deferred taxation thereon (132) 134 Tax benefit on special pension contributions - deferred tax (34) (28) - current tax 38 29 Total other comprehensive income/(expense) for 530 (446) the year Total comprehensive income for the year 2,543 1,285 attributable to owners of the parent 2013 2012 GBP'000 GBP'000 Total comprehensive income for the year: From continuing operations 2,310 960 From discontinued operations 233 325 Total comprehensive income for the year 2,543 1,285 attributable to owners of the parent Unaudited Consolidated Balance Sheet as at 31 December 2013 Notes 2013 2012 GBP'000 GBP'000 Assets Non-current assets Intangible assets 3,145 3,145 Property, plant and equipment 7 8,224 8,810 Deferred tax assets 228 699 Total non-current assets 11,597 12,654 Current assets Inventories 44,962 39,848 Trade and other receivables 10,518 10,627 Cash and cash equivalents 10,996 4,657 Other current interest-bearing deposits - 1,500 10,996 6,157 Total current assets 66,476 56,632 Liabilities Current liabilities Financial liabilities - borrowings (31,996) (29,457) Current tax liabilities (80) (892) Trade and other payables (29,504) (24,138) Total current liabilities (61,580) (54,487) Net current assets 4,896 2,145 Non-current liabilities Deferred tax liabilities (895) (1,128) Retirement benefit liability 9 (5) (1,074) Total non-current liabilities (900) (2,202) Net assets 15,593 12,597 Equity attributable to owners of the parent Ordinary shares 12,522 11,806 Share premium account 420 - Retained earnings 2,651 791 Total equity 15,593 12,597 Unaudited Consolidated Statement of Changes in equity for the year ended 31 December 2013 (Accumulated deficit)/ Orinary Share retained Total Shares Premium earnings equity GBP'000 GBP'000 GBP'000 GBP'000 At 1 January 2012 11,806 - (142) 11,664 Profit for the year - - 1,731 1,731 Other comprehensive - - (581) (581) (expense)/income: Actuarial losses recognised in defined benefit pension scheme Deferred tax thereon - - 134 134 Corporation tax benefit on special pension contributions - deferred tax - - (28) (28) - current tax - - 29 29 Other comprehensive expense - - (446) (446) for the year Total comprehensive income - - 1,285 1,285 for the year Transactions with owners: - - (402) (402) Dividends paid Share options: - value of employee services - - 50 50 At 31 December 2012 11,806 - 791 12,597 Profit for the year - - 2,013 2,013 Other comprehensive - - 658 658 (expense)/income: Actuarial gains recognised in defined benefit pension scheme Deferred tax thereon - - (132) (132) Corporation tax benefit on special pension contributions - deferred tax - - (34) (34) - current tax - - 38 38 Other comprehensive income - - 530 530 for the year Total comprehensive income - - 2,543 2,543 for the year Transactions with owners: - - (767) (767) Dividends paid Shares issued in the year 716 420 (452) 684 Share options: - value of employee services - - 536 536 At 31 December 2013 12,522 420 2,651 15,593 Unaudited Consolidated Cash Flow Statement for the year ended 31 December 2013 Notes As restated 2013 2012 GBP'000 GBP'000 Cash flows from operating activities Cash generated from operations 8 7,589 1,657 Finance costs (1,094) (923) Tax paid (1,344) (558) Tax recovered 54 22 Net cash generated from operating activities 5,205 198 Cash flows from investing activities Proceeds from sale of property, plant and 12 7 equipment Purchase of property, plant and equipment (1,371) (846) Finance income 76 30 Decrease/(increase) in other current 1,500 (1,500) interest-bearing deposits Net cash generated from/(used in) investing 217 (2,309) activities Cash flows from financing activities Issue of new shares 684 - Payment of dividends to shareholders 4 (767) (402) Receipt of other loans 1,000 - Net cash generated from/(used in) financing 917 (402) activities Increase/(decrease) in cash and cash 6,339 (2,513) equivalents Cash and cash equivalents at 1 January 4,657 7,170 Cash and cash equivalents at 31 December 10,996 4,657 Explanatory notes to the Financial Information 1. Basis of preparation and statement of compliance The consolidated financial information in this announcement does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006. Statutory accounts of the Group, on which the auditors will report, will be delivered to the Registrar of Companies. The financial information has been prepared using the recognition and measurement principles of International Financial Reporting Standards ("IFRSs") as adopted by the European Union and the Listing Rules of the Financial Services Authority. The comparative figures for the year to 31 December 2012 have been extracted from, but do not constitute, the Group's statutory financial statements for that financial year. Those financial statements have been reported on by the Group's auditors and delivered to the Registrar of Companies. The report of the auditors was unqualified, did not contain an emphasis of matter paragraph and did not contain a statement under sections 498(2) or 498(3) of the Companies Act 2006. The accounting policies adopted are consistent with those applied in the 2012 financial statements and Accounts. Company details The Company's registered address is Melton Court, Old Brompton Road, London SW7 3TD. The Company is a public limited company and is incorporated and domiciled in England and Wales. The Company's registration number at Companies House is 1753134. New and forthcoming accounting standards The following standard has been applied to the 2013 financial results: * Amendments to IAS19 Employee Benefits: The amendments require immediate recognition of actuarial gains and losses in other comprehensive income and eliminate the corridor method. The principal amendment that will affect most entities with a defined benefit plan is the requirement to calculate net interest income or expense using the discount rate used to measure the defined benefit obligation. The effect of adopting this Standard has been to reduce finance income in the period by GBP157,000. There is no effect on the net asset position. As a result of adopting IAS 19 (Revised) the finance cost and finance income for the prior year have both been reduced by GBP534,000 to reflect the net income or expense. There is no effect on the net asset or overall cash flow position. There are no other new standards, amendments to standards, or interpretations which are effective in 2013 that are relevant to the Group. Going concern The Group's business activities, together with the factors likely to affect its future development, performance and position are set out above in the Business Review. The directors remain convinced that the Group is well placed to manage its business risks successfully. Therefore, after making appropriate enquiries, the directors have a reasonable expectation that the Company and the Group have adequate resources to continue operating for the foreseeable future. For this reason they continue to adopt the going concern basis in preparing the Group's financial statements. 2. Segmental reporting The chief operating decision-maker has been identified as the board of directors. The Board reviews the Group's internal reporting in order to assess performance and allocate resources. Management has determined the operating segments based on these reports. The Board considers the business primarily from a product perspective, assessing the performance of car sales (both new and used) and aftersales (including servicing, parts and bodyshop). The Board assesses the performance of the operating segments based on a measure of adjusted operating profit, defined as gross profit less directly attributable expenses. This measurement basis excludes the effects of non-recurring income and expenditure from the operating segments, such as exceptional gains on lease disposals and redundancy costs and other exceptional items. Finance income and costs are not included in the result for each operating segment that is reviewed by the Board. Other information provided to the Board is measured in a manner consistent with that in the Financial Statements. For 2013 the Group is organised into two main business segments: the sale of new and used motor vehicles and an aftersales operation consisting of the servicing of vehicles, sales of parts and bodyshop repairs. Unallocated costs represents shared property costs and depreciation of fixed assets, in addition to background support services, such as finance, IT and marketing, and corporate expenses which cannot be directly attributed to either business segment. The Group operates from a single geographical area, namely the United Kingdom. Year ended Sales Aftersales Unallocated Group 31 December 2013 GBP'000 GBP'000 GBP'000 GBP'000 Continuing operations Revenue - external customers 223,148 37,948 - 261,096 Segment result 12,736 7,789 (15,830) 4,695 Exceptional charge - - (1,407) (1,407) Finance costs - - (980) (980) Finance income - - 60 60 Profit before tax 12,736 7,789 (18,157) 2,368 Taxation - - (588) (588) Profit for the year from continuing 12,736 7,789 (18,745) 1,780 operations Discontinued operations Revenue - external customers - - - - Segment result - - 233 233 Finance costs - - - - Finance income - - - - Profit before tax - - 233 233 Taxation - - - - Profit for the year from discontinued - - 233 233 operations Inventories 41,846 3,116 - 44,962 Other segment assets 1,813 3,174 16,527 21,514 Unallocated assets - property, plant and equipment - - 8,224 8,224 - intangible assets - - 3,145 3,145 - deferred tax - - 228 228 Total assets 43,659 6,290 28,124 78,073 Inventory stocking loans (31,337) (659) - (31,996) Other segment liabilities (20,697) (1,098) (7,789) (29,584) Unallocated liabilities - Deferred tax and other - - (900) (900) non-current liabilities Total liabilities (52,034) (1,757) (8,689) (62,480) Net assets/(liabilities) (8,375) 4,533 19,435 15,593 The total segmental loss of GBP15,597,000 which cannot be allocated to either Car Sales or Aftersales segments includes depreciation charges of GBP1,948,000. Similarly, other segment assets of GBP16,527,000 include capital expenditure of GBP1,371,000. Year ended Sales Aftersales Unallocated Group 31 December 2012 GBP'000 GBP'000 GBP'000 GBP'000 Continuing operations Revenue - external customers 209,511 34,005 - 243,516 Segment result 9,626 7,354 (13,693) 3,287 Finance costs - - (1,037) (1,037) Finance income - - 62 62 Profit before tax 9,626 7,354 (14,668) 2,312 Taxation - - (906) (906) Profit for the year from continuing 9,626 7,354 (15,574) 1,406 operations Discontinued operations Revenue - external customers - - - - Segment result - - 325 325 Finance costs - - - - Finance income - - - - Profit before tax - - 325 325 Taxation - - - - Profit for the year from - - 325 325 discontinued operations Inventories 36,623 3,225 - 39,848 Other segment assets 3,684 1,832 11,268 16,784 Unallocated assets - property, plant and equipment - - 8,810 8,810 - intangible assets - - 3,145 3,145 - deferred tax - - 699 699 Total assets 40,307 5,057 23,922 69,286 Inventory stocking loans (28,975) (482) - (29,457) Other segment liabilities (15,779) (781) (8,470) (25,030) Unallocated liabilities - Deferred tax and other - - (2,202) (2,202) non-current liabilities Total liabilities (44,754) (1,263) (10,672) (56,689) Net assets/(liabilities) (4,447) 3,794 13,250 12,597 The total segmental loss of GBP13,368,000 which cannot be allocated to either Car Sales or Aftersales segments includes depreciation charges of GBP1,918,000. Similarly, other segment assets of GBP11,268,000 include capital expenditure of GBP846,000. 3. Earnings per share 2013 2012 Pence per Pence per ordinary ordinary share share Basic and diluted earnings per share 7.4 6.0 - continuing operations 1.0 1.3 - discontinued operations Total basic and diluted earnings per share 8.4 7.3 Basic earnings per share is calculated by dividing the earnings attributable to owners of the parent by the weighted average number of ordinary shares outstanding during the year. The calculation of basic earnings per share is based on the profit after taxation of GBP2,013,000 (2012: GBP1,731,000) and the weighted average number of shares in issue during the period of 23,936,368 (2012: 23,611,742). For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive potential ordinary shares which are currently exercisable and where the exercise price is less than the prevailing market share price. The Group has currently has no classes of dilutive potential ordinary shares. 4. Dividends 2013 2012 GBP'000 GBP'000 Final dividend paid for the year ended 31 December 2012 295 165 of 1.25 pence (2011: 0.7 pence) per ordinary 50 pence share Interim dividend paid for the year ended 31 December 2013 472 237 of 2.0 pence (2012: 1.0 pence) per ordinary 50 pence share 767 402 The directors are recommending the payment of a final dividend for the year ended 31 December 2013 of 2.0 pence per ordinary share, to be paid on 23 May 2014, to shareholders on the register at the close of business on 25 April 2014. 5. Exceptional charge Group 2013 2012 GBP'000 GBP'000 Costs associated with takeover 1,407 - During the year the Company received an unsolicited offer which ultimately resulted in Berjaya Philippines Inc acquiring a 71.2% shareholding in H.R. Owen Plc. The professional fees associated with the Company's initial defence of the bid along with accounting charges and employment costs associated with the grant of awards under the Long Term Incentive Plan as a direct result of the bid amounted to GBP1,407,000. 6. Discontinued operations Group 2013 2012 GBP'000 GBP'000 Revenue - - Cost of sales - - Gross profit - - Other income 233 325 Distribution costs - - Administrative expenses - - Operating profit 233 325 Finance costs and similar charges - - Finance income - - Profit before taxation 233 325 Taxation - - Profit for the year from discontinued operations 233 325 The Group has disposed of various businesses over recent years, solely by sale of trade and assets. As a result of these transactions, a number of residual liabilities were retained by the Group which relate to pre-disposal trading and the sale processes. At 31 December 2013 the Group has reassessed these balances and released GBP233,000 of accruals and deferred income balances no longer required to profit in the year. Remaining residual liabilities will continue to be assessed in future periods. In March 2011, the Group closed its Alfa Romeo dealership in Chelsea, London and relinquished the franchise back to the manufacturer. In March 2012, the lease was surrendered back to the landlord in return for a cash premium of GBP 325,000. Discontinued operations had no effect on the Group's cash flow statement in the current year. In the prior year, discontinued operations generated a cash inflow of GBP325,000. 7. Property, plant and equipment Year ended 31 December 2013 Long Short leasehold leasehold Plant and premiums improvements equipment Total GBP'000 GBP'000 GBP'000 GBP'000 Cost At 1 January 2013 300 10,474 4,738 15,512 Additions - 746 625 1,371 Disposals - (340) (399) (739) At 31 December 2013 300 10,880 4,964 16,144 Accumulated depreciation At 1 January 2013 238 4,274 2,190 6,702 Charge for the year 28 1,101 819 1,948 Eliminated on disposals - (340) (390) (730) At 31 December 2013 266 5,035 2,619 7,920 Net book value 34 5,845 2,345 8,224 At 31 December 2013 Net book value 62 6,200 2,548 8,810 At 31 December 2012 Long leasehold land and buildings includes a net book value of GBP34,000 (2012: GBP62,000) in respect of premiums on long leaseholds with less than 50 years to expiry. Year ended 31 December 2012 Long Short leasehold leasehold Plant and premiums improvements equipment Total GBP'000 GBP'000 GBP'000 GBP'000 Cost At 1 January 2012 458 10,486 4,816 15,760 Additions - 506 340 846 Disposals (158) (518) (418) (1,094) At 31 December 2012 300 10,474 4,738 15,512 Accumulated depreciation At 1 January 2012 368 3,721 1,778 5,867 Charge for the year 28 1,071 819 1,918 Eliminated on disposals (158) (518) (407) (1,083) At 31 December 2012 238 4,274 2,190 6,702 Net book value 62 6,200 2,548 8,810 At 31 December 2012 Net book value 90 6,765 3,038 9,893 At 31 December 2011 8. Cash flows from operating activities Reconciliation of net profit to net cash flows from operating activities: 2013 2012 GBP'000 GBP'000 Continuing operations 1,780 1,406 Profit for the year Adjustments for: Tax charge 588 906 Depreciation charge 1,948 1,918 (Profit)/loss on disposal of (3) 5 property, plant and equipment Share option charge/(credit) 536 50 Finance income (60) (27) Finance costs 980 36 Changes in working capital: (Increase)/decrease in inventories (2,635) 1,790 Decrease/(increase) in trade and 93 (2,127) other receivables Increase/(decrease) in trade and 4,467 (3,515) other payables Excess of pension contributions over (105) (76) current service cost Cash generated from continuing 7,589 1,332 operations Discontinued operations Profit for the year 233 325 Decrease in trade and other payables (233) - Cash generated from/(used in) - 325 discontinued operations Cash generated from operations 7,589 1,657 9. Retirement benefit liability The Group operates the H.R. Owen London Defined Benefit Pension Scheme, a defined benefit pension scheme, which operates on a pre-funded basis. The funding policy is to contribute such variable amounts as, on the advice of the Scheme's actuary, will achieve a 100% funding level on a projected salary basis. Actuarial assessments covering expense and contributions are carried out by independent qualified actuaries, with the last such completed review being carried out as at 5 April 2010. The Scheme was closed to future accrual during 2013. The Scheme currently operates in a deficit position and, as a result, H.R. Owen Plc agreed with the Scheme's trustees that the Group would make an additional annual contribution of GBP50,000 in May 2011 and May 2012 and, if the Scheme remained in a deficit position, a further payment of GBP50,000 in 2013. By agreement between the Company and the Trustees, the cash payment for 2013 was increased from GBP50,000 to GBP100,000. All payments scheduled have been made to the Scheme. H.R. Owen Plc also makes additional monthly contributions of GBP4,000 to the Scheme, with these additional monthly contributions continuing whilst the Scheme remains in a deficit position. 10. Related party transactions Bentley Motors Limited holds shares in H.R. Owen Plc equivalent to 26.3% (2012: 27.9%) of the Company's issued share capital and, accordingly has been deemed to be a related party throughout the year under review. The Group operates four Bentley franchises for new and used car sales, through its Jack Barclay Limited and Broughtons of Cheltenham Limited subsidiaries. The Group also operates five Bentley aftersales franchises from its service and bodyshop facilities through its Jack Barclay Limited, Broughtons of Cheltenham Limited and H.R. Owen Dealerships Limited subsidiaries. During the year, the Group purchased a total value of vehicles and parts from Bentley Motors Limited of GBP74.9 million (2012: GBP61.1 million). At 31 December 2013 an amount of GBP0.8 million (2012: GBP1.0 million) was owed by the Group to Bentley Motors Limited. All transactions were conducted on an arm's length basis and under normal commercial terms. During 2013, two directors each purchased a car each from the Group with a combined cost of purchase of GBP378,000. As part of these transactions GBP223,000 was allowed for cars taken in as part exchange. All of these transactions were conducted on an arm's length basis and under normal commercial terms and no amounts remain outstanding at 31 December 2013. 11.Ultimate parent company and controlling party The immediate parent undertaking is Berjaya Philippines Inc, a company incorporated in the Philippines and listed on the Philippine Stock Exchange. The ultimate parent undertaking is Berjaya Corporation Berhad, a company incorporated in Malaysia and listed on the Main Market of Bursa Malaysia Securities Berhad, Malaysia. The largest group in which the results of the company are consolidated is that headed by Berjaya Corporation Berhad, incorporated in Malaysia. The consolidated accounts are available to the public and may be obtained from The Company Secretary, Berjaya Corporation Berhad, Lot 13-01A, Level 13 (East Wing), Berjaya Times Square, No. 1 Jalan Imbi, 55100 Kuala Lumpur, Malaysia. 12. Responsibility statement The responsibility statement below has been prepared in connection with the Company's financial statements for the year ended 31 December 2013, certain parts of which are not included within this preliminary announcement. We confirm that to the best of our knowledge: * The financial statements, prepared in accordance with International Financial Reporting Standards as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit of the Company and the Group; and * The Chairman's Statement and Business Review include a fair review of the performance of the business and the future outlook for the Company and the Group, together with a description of the principal risks and uncertainties. The results for the year ended 31 December 2013, and these preliminary financial statements, were approved by the board of directors on 26 March 2014. Joe Doyle Mike Warren Chief Executive Finance Director END
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