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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Ig Design Group Plc | LSE:IGR | London | Ordinary Share | GB0004526900 | ORD 5P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
9.00 | 4.48% | 210.00 | 205.00 | 215.00 | 210.00 | 201.00 | 201.00 | 39,843 | 09:35:08 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Convrt Paper,paperbd Pds,nec | 890.31M | -27.99M | -0.2829 | -7.42 | 198.84M |
TIDMIGR
RNS Number : 3968T
International Greetings PLC
06 December 2011
6(th) December 2011
International Greetings PLC ("the Company" or "the Group")
Interim Results
International Greetings PLC, one of the world's leading designers, innovators and manufacturers of gift wrap, crackers, cards, stationery and accessories, announces its interim results for the six months ended 30 September 2011 (2011 H1).
Financial highlights
-- Sales up 6% to GBP110.3 million (2010 H1: GBP104.5 million) -- Operating profit before exceptional costs up 38% to GBP5.2 million (2010 H1: GBP3.8 million) -- Profit before tax and exceptional items up 50% to GBP3.2 million (2010 H1: GBP2.1 million) -- Profit from continuing operations before tax was level at GBP2.1 million (2010 H1: GBP2.1 million) including exceptional costs of GBP1.1 million (2010 H1: GBPnil) -- Debt reduction programme remains on track -- H1 seasonal working capital increase as expected - net debt at 30 September 2011 GBP88.5 million (2010 H1: GBP86.4 million)
Operational highlights
-- Continued focus on developing a more balanced business -- Increasing innovation and cross-selling throughout the Group's businesses continues to deliver improved results -- Positive momentum sustained in the USA with opportunities across all market segments -- Relocation of our manufacturing facility in China is on track
Paul Fineman, Chief Executive said:
"We have achieved sales and profit growth despite the challenging market conditions and have continued to enjoy significant business with value and mass market retailers across the globe. This has included growth in Everyday greetings card activities, which is an exciting new growth area for the Group.
Having completed the Christmas season manufacturing in China, we have instigated our plans for the relocation of our facilities in good time to meet future production deadlines whilst maintaining our competitive position.
We have continued to benefit from streamlining processes throughout the Group, including our Board structure. These measures optimise our competitive position and increase our efficiency and future ability to generate profit growth.
In these difficult trading markets around the world, we have delivered results in line with our expectations in the first half, which gives us optimism for the future. Significant opportunities for International Greetings exist across the markets in which we operate."
For further information, please contact: International Greetings plc Tel: 01707 630617 Paul Fineman, Chief Executive Anthony Lawrinson, Chief Financial Officer Arden Partners plc Tel: 020 7614 5917 Richard Day Jamie Cameron FTI Consulting Tel: 020 7831 3113 Jonathon Brill Caroline Stewart Georgina Bonham
Chief Executive's Review
Overview
We have achieved good progress in the first half of this year as we have continued to deliver on our strategy of driving profitable growth. Sales and profitability in the first half year have grown in line with management's expectations.
Operational Review
Our key focus has been on ensuring that our major revenue streams are delivered across a "balanced" portfolio of activity and we continued to achieve this in the period.
Profits in the UK and Asia have grown through greater collaboration between our manufacturing and sales operations. Additionally we have driven synergies in sourcing, having utilised the combined experience of our recently centralised team in the Far East.
We are relocating our manufacturing facility in China having completed Christmas season manufacturing requirements. This process remains on track and the efficiency gains will offset forecast inflationary pressures.
The first half has seen sales and profit meeting expectations in our businesses in the Netherlands and Poland. This is particularly pleasing given the challenging market conditions. However we anticipate that adverse conditions will continue in the period ahead and have planned accordingly.
Having re-established profitability in the USA, we are encouraged that positive momentum has been sustained with significant improvement in profitability on a growing sales base. Performance in Australia has also been strong with sales and profitability growing well.
A lot has been achieved through the business restructuring, and this continues. Our achievement was recently acknowledged through the Company being awarded Listed Company Turnaround 2011 Award by the Institute for Turnarounds.
As recently announced, Martin Hornung will step down from the Board during this month. The Board would like to take the opportunity to thank Martin for many years of service across many aspects of our business.
Financial Review
Revenue from continuing operations for the period increased by 6% to GBP110.3 million (2010 H1: GBP104.5 million). On a constant exchange basis, like-for-like turnover increased by 5% over the period, with growth across all geographic regions.
Despite significant inflationary pressures including rising raw materials prices and Chinese-based labour costs, together with the impact of the strengthening Chinese currency, we have achieved encouraging gross profit margins of 19.1% (2010 H1: 18.3%).
At GBP16.2 million (2010 H1: GBP15.9 million), our overheads as a percentage of sales continued to fall from 15.2% to 14.7%.
Operating profit before exceptional costs was up 38% to GBP5.2 million (2010 H1: GBP3.8 million) and profit before tax and exceptional items was up 50% to GBP3.2 million (2010 H1: GBP2.1 million).
Exceptional items during the period were GBP1.1 million (2010 H1: GBPnil) relating to senior management restructuring and provisions against leasehold assets in China in anticipation of our impending factory relocation. In particular, the management restructuring reflects synergies available at Board level as the Group simplifies the management control of its operational businesses in Asia, the UK and Europe. This is expected to generate future annualised savings of GBP0.6 million.
Finance expenses in the period were GBP2.0 million (2010 H1: GBP1.6 million) due to increased bank charges associated with the refinancing and extension of the maturity of our facilities and GBP0.2 million in respect of unrealised market movements on euro denominated interest rate swaps, which are not hedge accounted. A range of facilities are now available across UK, Europe, USA and Australia, matched to the working capital and currency needs of our respective businesses, with maturities on the majority of our core non-seasonal debt extended out to 2015/16. Debt reduction remains a key focus and our programme for this is on-track.
Net debt at 30 September 2011 was up 2% to GBP88.5 million (2010 H1: GBP86.4 million). With customer orders received earlier to optimise efficiency and production accelerated in China ahead of the move to our new factory, the usual seasonal working capital increase was entirely as expected. Details of the Group's new banking facilities are included in note 1 of the interim financial statements.
Profit from continuing operations before tax was level at GBP2.1 million (2010 H1: GBP2.1 million), including exceptional items of GBP1.1 million (2010: GBPnil).
The effective underlying tax rate was 27.5% (2010 H1: 6%) with the prior period benefitting from recognition of deferred tax assets. There are still tax losses of $15 million in the USA and GBP1.7 million in the UK not recognised as assets in the balance sheet.
Stated before exceptional items, and discontinued operations, basic earnings per share were 3.4p (2010 H1: 3.1p), and 1.8p (2010 H1: 3.1p) after exceptional items. See note 6 of the interim financial statements.
Capital expenditure in the six months was GBP1.4 million (2010 H1: GBP1.4 million). Our property asset held for resale was sold in the period, generating GBP0.5 million which was used to pay down debt.
Cash used by operations was GBP39.9 million (2010 H1: GBP34.7 million), which reflects the seasonality of the business as 59% of the sales in the six month period occurred in the last two months.
Debtors and receivables at GBP69.4 million are up 3% from GBP67.5 million at H1 2010 and 2% on like-for-like exchange rates with stock levels up by just 1% from GBP63.5 million (H1 2010) to 64.2 million (H1 2011) despite the sales increase of 6% and the effect of early production against customer orders and the move of our factory in China.
The Board will not be declaring an interim dividend and will keep this policy under review (2010 H1: nil).
Current trading/outlook
Our focus on providing our customers with excellent service and innovative products has enabled us to continue to enjoy profit growth and success across the globe. We expect conditions to remain challenging, particularly in Continental Europe, and we will manage the business accordingly, with a strong focus on tight cost control and continuing to drive further efficiencies throughout the business.
The overall quality of our earnings continues to improve. Notwithstanding difficult trading markets around the world, we have delivered results in line with our expectations in the first half, which gives us optimism for the future. Significant opportunities for International Greetings exist across the markets in which we operate.
Paul Fineman
Chief Executive
Consolidated income statement
six months ended 30 September 2011
Unaudited Unaudited --------- ------------ ---------- six months six months ended ended 30 30 12 months September September to March 2011 2011 2010 2011 2011 2010 2011 ------------------------ --------- ------------ --------- ----------- ------------ -------------- Before Exceptional Before Exceptional ----------- exceptional items exceptional items (note (note items 3) Total items 10) Total GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 ----------------------------------- ------------ --------- ----------- ------------ ------------ ---------- Continuing operations Revenue 110,277 - 110,277 104,453 216,857 - 216,857 Cost of sales (89,194) - (89,194) (85,296) (179,108) (27) (179,135) ------------------------ --------- ------------ --------- ----------- ------------ ------------ ---------- Gross profit 21,083 - 21,083 19,157 37,749 (27) 37,722 19.1% - 19.1% 18.3% 17.4% - 17.4% Selling expenses (6,451) - (6,451) (7,036) (12,698) (401) (13,099) Administration expenses (9,734) (1,080) (10,814) (8,844) (18,021) (472) (18,493) Other operating income 287 - 287 501 1,019 - 1,019 Profit on sales of property, plant and equipment 22 - 22 (1) 33 - 33 ------------------------ --------- ------------ --------- ----------- ------------ ------------ ---------- Operating profit/(loss) 5,207 (1,080) 4,127 3,777 8,082 (900) 7,182 Finance expenses (1,994) - (1,994) (1,642) (2,917) - (2,917) ------------------------ --------- ------------ --------- ----------- ------------ ------------ ---------- Profit/(loss) before tax 3,213 (1,080) 2,133 2,135 5,165 (900) 4,265 Income tax (charge)/ credit (884) 222 (662) (138) 426 267 693 ------------------------ --------- ------------ --------- ----------- ------------ ------------ ---------- Profit/(loss) from continuing operations Discontinued operations 2,329 (858) 1,471 1,997 5,591 (633) 4,958 Loss from discontinued operations (net of tax) - - - (78) (100) - (100) ------------------------ --------- ------------ --------- ----------- ------------ ------------ ---------- Profit/(loss) for the period 2,329 (858) 1,471 1,919 5,491 (633) 4,858 ------------------------ --------- ------------ --------- ----------- ------------ ------------ ---------- Attributable to: Owners of the Parent Company 993 1,563 4,010 Non-controlling interests 478 356 848 ------------------------ ---------------------------------- ----------- -------------------------------------- Unaudited six Unaudited six 12 months to March months ended 30 months ended 30 2011 September September 2011 2010 -------------------------- ------------------- ------------------- --------------------- Earnings per ordinary share Diluted Basic Diluted Basic Diluted Basic ---------- ------- ---------- ------- ----------- -------- Adjusted earnings per share excluding exceptional items and discontinued operations 3.2p 3.4p 2.8p 3.1p 8.2p 8.9p Loss per share on exceptional items (1.5)p (1.6)p - - (1.1)p (1.2)p -------------------------- ---------- ------- ---------- ------- ----------- -------- Earnings per share from continuing operations 1.7p 1.8p 2.8 p 3.1p 7.1p 7.7p Loss per share on discontinued operations - - (0.1)p (0.1)p (0.2)p (0.2)p -------------------------- ---------- ------- ---------- ------- ----------- -------- Earnings per share 1.7p 1.8p 2.7p 3.0p 6.9p 7.5p -------------------------- ---------- ------- ---------- ------- ----------- --------
Consolidated statement of comprehensive income
six months ended 30 September 2011
Unaudited Unaudited six months six months ended ended 12 months 30 September 30 September to March 2011 2010 2011 -------------------------------------------- -------------- -------------- ---------- Profit for the year 1,471 1,919 4,858 Other comprehensive income: -------------------------------------------- -------------- -------------- ---------- Recycling translation reserves on closure of subsidiary - - (97) Exchange difference on translation of foreign operations (155) (380) 529 Net profit/(loss) on cash flow hedges (net of tax) 274 - (124) -------------------------------------------- -------------- -------------- ---------- Other comprehensive income for period, net of tax 119 (380) 308 Total comprehensive income for the period, net of tax 1,590 1,539 5,166 Attributable to: Owners of the Parent Company 1,018 1,127 4,300 Non-controlling interests 572 412 866 -------------------------------------------- -------------- -------------- ---------- 1,590 1,539 5,166 -------------------------------------------- -------------- -------------- ----------
Consolidated statement of changes in equity
six months ended 30 September 2011
Share premium and capital Non- Share redemption Merger Hedging Translation Retained Shareholder controlling capital reserve reserves reserves reserve earnings equity interest Total GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 ------------------------ ----------- --------- --------- ------------ --------- ------------ ------------ ------- At 1 April 2011 2,698 4,386 17,164 (124) 776 23,190 48,090 4,220 52,310 ---------------- ------ ----------- --------- --------- ------------ --------- ------------ ------------ ------- Profit for the year - - - - - 993 993 478 1,471 Other comprehensive income - - - 274 (249) - 25 94 119 ---------------- ------ ----------- --------- --------- ------------ --------- ------------ ------------ ------- Total comprehensive income for the year - - - 274 (249) 993 1,018 572 1,590 ---------------- ------ ----------- --------- --------- ------------ --------- ------------ ------------ ------- Equity-settled share-based payment - - - - - 53 53 - 53 Shares issued - - - - - - - - - Options exercised 14 25 - - - - 39 - 39 Equity dividends paid - - - - - - - (958) (958) ---------------- ------ ----------- --------- --------- ------------ --------- ------------ ------------ ------- At 30 September 2011 2,712 4,411 17,164 150 527 24,236 49,200 3,834 53,034 ---------------- ------ ----------- --------- --------- ------------ --------- ------------ ------------ -------
For the six months ended 30 September 2010
Share premium and capital Non- Share redemption Merger Hedging Translation Retained Shareholder controlling capital reserve reserves reserves reserve earnings equity interest Total GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 ------------------------ ----------- --------- --------- ------------ --------- ------------ ------------ ------- At 1 April 2010 2,608 4,346 16,216 - 362 19,071 42,603 3,354 45,957 ---------------- ------ ----------- --------- --------- ------------ --------- ------------ ------------ ------- Profit for the period - - - - - 1,563 1,563 356 1,919 Other comprehensive income - - - - (436) - (436) 56 (380) ---------------- ------ ----------- --------- --------- ------------ --------- ------------ ------------ ------- Total comprehensive income for the year - - - - (436) 1,563 1,127 412 1,539 ---------------- ------ ----------- --------- --------- ------------ --------- ------------ ------------ ------- Equity-settled share-based payment - - - - - 49 49 - 49 Shares issued 74 - 948 - - - 1,022 - 1,022 ---------------- ------ ----------- --------- --------- ------------ --------- ------------ ------------ ------- At 30 September 2010 2,682 4,346 17,164 - (74) 20,683 44,801 3,766 48,567 ---------------- ------ ----------- --------- --------- ------------ --------- ------------ ------------ -------
For the year ended 31st March 2010
Share premium and capital Non- Share redemption Merger Hedging Translation Retained Shareholder controlling capital reserve reserves reserves reserve earnings equity interest Total GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 ------------------------ ----------- --------- --------- ------------ --------- ------------ ------------ ------- At 1 April 2010 2,608 4,346 16,216 - 362 19,071 42,603 3,354 45,957 ---------------- ------ ----------- --------- --------- ------------ --------- ------------ ------------ ------- Profit for the year - - - - - 4,010 4,010 848 4,858 Other comprehensive income - - - (124) 414 - 290 18 308 ---------------- ------ ----------- --------- --------- ------------ --------- ------------ ------------ ------- Total comprehensive income for the year - - - (124) 414 4,010 4,300 866 5,166 ---------------- ------ ----------- --------- --------- ------------ --------- ------------ ------------ ------- Equity-settled share-based payment - - - - - 109 109 - 109 Shares issued 74 - 948 - - - 1,022 - 1,022 Options exercised 16 40 - - - - 56 - 56 ---------------- ------ ----------- --------- --------- ------------ --------- ------------ ------------ ------- At 31 March 2011 2,698 4,386 17,164 (124) 776 23,190 48,090 4,220 52,310 ---------------- ------ ----------- --------- --------- ------------ --------- ------------ ------------ -------
Consolidated balance sheet
as at 30 September 2011
Unaudited Unaudited as at as at 30 30 As at September September 31 March 2011 2010 2011 Note GBP000 GBP000 GBP000 ----------------------------------- ------- ---------- --------- Non-current assets Property, plant and equipment 31,130 32,404 31,518 Intangible assets 33,082 33,047 33,385 Deferred tax assets 4,758 3,456 4,616 ------------------------------- ----------- ---------- --------- Total non-current assets 68,970 68,907 69,519 ------------------------------- ----------- ---------- --------- Current assets Inventory 64,202 63,465 45,582 Assets classified as held for sale - 780 497 Trade and other receivables 69,360 67,537 21,494 Cash and cash equivalents 4 1,734 1,911 1,885 ------------------------------- ------- ---------- --------- Total current assets 135,296 133,693 69,458 ------------------------------- ----------- ---------- --------- Total assets 204,266 202,600 138,977 ------------------------------- ----------- ---------- --------- Equity Share capital 2,712 2,682 2,698 Share premium 3,071 3,006 3,046 Reserves 19,181 18,430 19,156 Retained earnings 24,236 20,683 23,190 ------------------------------- ----------- ---------- --------- Equity attributable to owners of the Parent Company 49,200 44,801 48,090 ------------------------------- ----------- ---------- --------- Non-controlling interests 3,834 3,766 4,220 ------------------------------- ----------- ---------- --------- Total equity 53,034 48,567 52,310 ------------------------------- ----------- ---------- --------- Non-current liabilities Loans and borrowings 4 34,926 8,602 8,377 Deferred income 2,154 2,704 2,429 Provisions 1,847 1,722 1,847 Other financial liabilities 355 44 375 ------------------------------- ----------- ---------- --------- Total non-current liabilities 39,282 13,072 13,028 ------------------------------- ----------- ---------- --------- Current liabilities Bank overdraft 5,940 7,174 3,620 Loans and borrowings 4 49,383 72,509 34,312 Deferred income 4 550 619 550 Provisions - 260 - Income tax payable 585 686 162 Trade and other payables 42,324 45,112 25,353 Other financial liabilities 13,168 14,601 9,642 ------------------------------- ----------- ---------- --------- Total current liabilities 111,950 140,961 73,639 ------------------------------- ----------- ---------- --------- Total liabilities 151,232 154,033 86,667 ------------------------------- ----------- ---------- --------- Total equity and liabilities 204,266 202,600 138,977 ------------------------------- ----------- ---------- ---------
Consolidated cash flow statement
six months ended 30 September 2011
Unaudited Unaudited six months six months ended ended 12 months to 31 September September March 2011 2010 2011 GBP000 GBP000 GBP000 ------------------------------------------------------ ----------- ---------- Cash flows from operating activities Profit for the year 1,471 1,919 4,858 Adjustments for: Depreciation 1,951 2,118 4,108 Impairment of tangible fixed assets 214 - - Amortisation of intangible assets 261 177 331 Finance expenses - continuing operations 1,994 1,642 2,917 Finance expenses - discontinued operations - 26 26 Recycling of translation reserves on closure of subsidiary - - (97) Income tax credit - continuing operations 662 138 (693) (Profit)/loss on sales of property, plant and equipment (7) 1 (33) (Profit)/loss on disposal of assets held for resale (15) - - Impairments of assets held for resale - - 238 Equity-settled share-based payment 53 49 109 ------------------------------------------- --------- ----------- ---------- Operating profit after adjustments for non-cash items 6,584 6,070 11,764 Change in trade and other receivables (48,188) (45,955) 173 Change in inventory (18,643) (18,589) (303) Change in trade and other payables 20,658 24,498 (381) Change in provisions and deferred income (275) (684) (518) ------------------------------------------- --------- ----------- ---------- Cash (used by)/generated from operations (39,864) (34,660) 10,735 Tax paid (388) 357 (420) Interest and similar charges paid (1,628) (1,552) (3,226) Receipts from sales of property for resale 528 - - Acquisition of property for resale - (780) (780) ------------------------------------------- --------- ----------- ---------- Net cash (outflow)/inflow from operating activities (41,352) (36,635) 6,309 ------------------------------------------- --------- ----------- ---------- Cash flow from investing activities Proceeds from sale of property, plant and equipment 42 14 73 Acquisition of intangible assets (166) (288) (521) Acquisition of property, plant and equipment (1,187) (1,186) (1,900) ------------------------------------------- --------- ----------- ---------- Net cash outflow from investing activities (1,311) (1,460) (2,348) ------------------------------------------- --------- ----------- ---------- Cash flows from financing activities Proceeds from issue of share capital 39 - 56 Repayment of secured borrowings (1,118) (471) (947) Net movement in credit facilities 11,799 34,541 (3,222) Payment of finance lease liabilities (35) (29) (113) New bank loans raised 30,170 - - New finance leases - 74 - Dividends paid to non-controlling interests (918) - - ------------------------------------------- --------- ----------- ---------- Net cash inflow/(outflow) from financing activities 39,937 34,115 (4,226) ------------------------------------------- --------- ----------- ---------- Net increase in cash and cash equivalents (2,726) (3,980) (265) Cash and cash equivalents at end of period (1,735) (993) (993) Effect of exchange rate fluctuations on cash held 255 (290) (477) ------------------------------------------- --------- ----------- ---------- Cash and cash equivalents at 31 March (4,206) (5,263) (1,735) ------------------------------------------- --------- ----------- ----------
Notes to the interim financial statements
1 Accounting policies
Basis of preparation
The financial information contained in this interim report does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006 and is unaudited.
The Group interim report has been prepared and approved by the Directors in accordance with International Financial Reporting Standards as adopted by the EU ("Adopted IFRSs"). The financial information for the year ended 31 March 2011 is extracted from the statutory accounts of the Group for that financial year and does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The report of the auditors was (i) unqualified; (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) of the Companies Act 2006.
Going concern basis
The financial statements have been prepared on the going concern basis. Following the restructure of its principal banking facilities in July 2011 the Group now shows net current assets of GBP23.3 million (2010 net current liabilities H1: GBP7.3 million).
In previous years the Group relied primarily on a short-term facility for its working capital needs. In July 2011 the Group negotiated with its principal bank more structured borrowings (split between US dollars and sterling) comprising a five year loan of GBP15.2 million with a bullet repayment on the fifth anniversary, a four year amortising loan of GBP14.8 million, a one year revolving multi-currency credit facility of up to GBP33 million and a one year rolling multi-currency overdraft facility of up to GBP5 million, plus a two year asset back loan facility secured on the UK business inventory and debtors.
We have also secured a three year asset backed loan facility of up to GBP25 million with a US bank to assist in the funding of the US business and to mitigate the currency effect on our facility headroom.
The borrowing requirement of the Group increases steadily over the period from July 2011 and peaks in September and October 2011 due to the seasonality of the business, as the sales of wrap and crackers are mainly for the Christmas market, before then reducing.
As with any company placing reliance on external entities for financial support, the Directors acknowledge that there can be no certainty that this support will continue although, at the date of approval of this interim report, they have no reason to believe it will not do so.
After making enquiries, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing this interim report.
The interim report does not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's annual financial statements as at 31 March 2011.
Significant accounting policies
The accounting policies adopted in the preparation of the interim report are consistent with those followed in the preparation of the Group's annual financial statements for the year ended 31 March 2011.
2 Segmental information
The Group has one material business activity being the design, innovation and manufacture of giftwrap, crackers, card, stationery and gift accessories.
For management purposes the Group is organised into four geographic business units.
The results below are allocated based on the region in which the businesses are located; this reflects the Group's management and internal reporting structure. The decision was made during the last year to focus Asia as a service provider of manufacturing and procurement operations, whose main customers are our UK businesses. Both the China factory and the majority of the Hong Kong procurement operations are now managed by our UK operational management team and we are therefore now including Asia within the internal reporting of the UK operations, such that UK and Asia comprise an operating segment. The Chief Operating Decision Maker is the Board.
Intra-segment pricing is determined on an arm's length basis. Segment results include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.
Financial performance of each segment is measured on operating profit. Interest expense or revenue and tax are managed on a Group basis and not split between reportable segments.
Segment assets are all non-current and current assets, excluding deferred tax and income tax receivable. Where cash is shown in one segment, which nets under the Group's banking facilities, against overdrafts in other segments, the elimination is shown in the eliminations column. Similarly inter-segment receivables and payables are eliminated.
UK and Asia Europe USA Australia Eliminations Group GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 --------------------------------------- --------- --------- ---------- ------------- ---------- Six months ended 30 September 2011 Continuing operations Revenue - external 59,945 12,409 23,764 14,159 - 110,277 - intra-segment 2,340 1,302 - - (3,642) - ---------------------------- --------- --------- --------- ---------- ------------- ---------- Total segment revenue 62,285 13,711 23,764 14,159 (3,642) 110,277 ---------------------------- --------- --------- --------- ---------- ------------- ---------- Segment result before exceptional items 3,058 701 1,145 1,405 - 6,309 Exceptional items (225) - - - - (225) ---------------------------- --------- --------- --------- ---------- ------------- ---------- Segment result 2,833 701 1,145 1,405 - 6,084 ---------------------------- --------- --------- --------- ---------- ------------- ---------- Central administration costs (1,102) Central administration exceptional items (855) Net finance expenses (1,994) Income tax (662) ---------------------------------------------------------------------------------------- ---------- Profit from continuing operations for the six months ended 30 September 2011 1,471 ---------------------------------------------------------------------------------------- ---------- Balances at 30 September 2011 Continuing operations ---------------------------------------------------------------------------------------------------- Segment assets 143,246 24,324 19,158 12,781 4,757 204,266 ---------------------------- --------- --------- --------- ---------- ------------- ---------- Segment liabilities (81,867) (21,766) (39,632) (7,388) (579) (151,232) ---------------------------- --------- --------- --------- ---------- ------------- ---------- Capital expenditure - property, plant and equipment 232 746 147 62 1,187 - intangible 72 29 48 17 166 Depreciation 1,119 395 346 91 - 1,951 Amortisation 178 29 12 42 - 261 Impairment of property, plant and equipment 214 - - - - 214 ---------------------------- --------- --------- --------- ---------- ------------- ---------- Restated Restated Restated UK and Asia Europe USA Australia Eliminations Group GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 ---------------------------------------------- --------- --------- ---------- ------------- ---------- Six months ended 30 September 2010 restated Continuing operations Revenue - external 58,716 11,635 22,575 11,527 - 104,453 - intra-segment 3,391 1,034 - - (4,425) - ---------------------------------- --------- --------- --------- ---------- ------------- ---------- Total segment revenue 62,107 12,669 22,575 11,527 (4,425) 104,453 ----------------------------------- --------- --------- --------- ---------- ------------- ---------- Segment result from continuing operations 2,437 816 262 1,077 (32) 4,560 Pre-tax loss from discontinued operations (see below) - (78) - - - (78) Segment result 2,437 738 262 1,077 (32) 4,482 ----------------------------------- --------- --------- --------- ---------- ------------- ---------- Pre-tax loss from discontinued operations 78 Central administration costs (783) Net finance expenses (1,642) Income tax (138) ----------------------------------------------------------------------------------------------- ---------- Profit from continuing operations for the six months ended 30 September 2011 1,997 ----------------------------------------------------------------------------------------------- ---------- Balances at 30 September 2011 Continuing operations ----------------------------------------------------------------------------------------------------------- Segment assets 158,728 30,887 13,272 13,209 (13,496) 202,600 ----------------------------------- --------- --------- --------- ---------- ------------- ---------- Segment liabilities (87,333) (29,615) (46,299) (6,252) 15,466 (154,033) ----------------------------------- --------- --------- --------- ---------- ------------- ---------- Capital expenditure - property, plant and equipment 848 132 38 168 - 1,186 - asset for resale - - 780 - - 780 - intangible 121 - 61 106 - 288 Depreciation 1,184 444 413 74 3 2,118 Amortisation 100 15 38 24 - 177 Impairment of property, plant and equipment 3 - - - (3) - ----------------------------------- --------- --------- --------- ---------- ------------- ---------- UK and Asia Europe USA Australia Eliminations Group GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 ---------------------------------------------------- --------- --------- ---------- ------------- --------- Year ended 31 March 2011 Continuing operations Revenue - external 117,806 33,493 39,980 25,578 - 216,857 - intra-segment 11,895 1,336 - - (13,231) - ----------------------------------------- --------- --------- --------- ---------- ------------- --------- Total segment revenue 129,701 34,829 39,980 25,578 (13,231) 216,857 ----------------------------------------- --------- --------- --------- ---------- ------------- --------- Segment result before exceptional items and discontinued operations 2,673 2,107 2,096 2,455 9,331 Exceptional items (510) - (238) - (748) ----------------------------------------- --------- --------- --------- ---------- ------------------------ Segment result from continuing operations 2,163 2,107 1,858 2,455 - 8,583 Pre-tax loss from discontinued operations - (100) - - - (100) ----------------------------------------- --------- --------- --------- ---------- ------------- --------- Segment result 2,163 2,007 1,858 2,455 - 8,483 ----------------------------------------- --------- --------- --------- ---------- ------------- --------- Pre-tax loss from discontinued operations 100 Central administration costs (1,249) Central administration costs exceptional items (152) Net finance expenses (2,917) Income tax 693 ----------------------------------------------------------------------------------------------------- --------- Profit from continuing operations for the year ended 31 March 2010 4,958 ----------------------------------------------------------------------------------------------------- --------- Balances at 31 March 2011 Continuing operations ---------------------------------------------------------------------------------------------------------------- Segment assets 100,853 18,112 6,272 9,438 4,302 138,977 ----------------------------------------- --------- --------- --------- ---------- ------------- --------- Segment liabilities (41,243) (15,721) (27,245) (2,611) 153 (86,667) ----------------------------------------- --------- --------- --------- ---------- ------------- --------- Capital expenditure - property, plant and equipment 1,334 297 231 279 - 2,141 - intangible 307 17 16 181 - 521 Depreciation 2,346 821 780 161 - 4,108 Amortisation 161 44 64 62 - 331 Impairment of property, plant and equipment - - 238 - - 238 ----------------------------------------- --------- --------- --------- ---------- ------------- ---------
3 Exceptional items
Six months ended 30 September 2011 GBP000 ---------------------------------------------------- Restructuring of operational activities - Redundancies (note a) 855 - Impairment of leasehold land & buildings in China (note b) 225 -------------------------------------------- ------ Total restructuring costs 1,080 Income tax credit (222) -------------------------------------------- ------ 858 -------------------------------------------- ------
(a) Redundancies relating to the termination expenses of three directors who have left the business following a review of Board responsibilities.
(b) Impairment of leasehold land & buildings in China as a result of the decision to move the China factory.
4 Cash, loans and borrowing
Six months Six months ended 12 months ended 30 30 to September September 31 March 2011 2010 2011 GBP000 GBP000 GBP000 --------------------------------------------------- ---------- ---------- Secured bank loan (short term) (3,918) (1,042) (962) Secured bank loan (long term) (34,926) (8,602) (8,377) Asset backed loans (36,811) (22,999) (4,449) Revolving credit facilities (8,654) (48,468) (28,901) ---------------------------------------- --------- ---------- ---------- Total loans (84,309) (81,111) (42,689) Cash and bank deposits 1,734 1,911 1,885 Bank overdraft (5,940) (7,174) (3,620) ---------------------------------------- --------- ---------- ---------- Cash and cash equivalents per cash flow statement (4,206) (5,263) (1,735) ---------------------------------------- --------- ---------- ---------- Net debt used in the Chief Executive's Review (88,515) (86,374) (44,424) ---------------------------------------- --------- ---------- ----------
5 Taxation
Six months Six months ended 12 months ended 30 30 to September September 31 March 2011 2010 2011 GBP000 GBP000 GBP000 ------------------------------------------- ---------- ---------- Current tax expenses Current income tax charge (825) (243) (539) Deferred tax expense Relating to original and reversal of temporary differences 163 105 1,232 Total tax in income statement (662) (138) 693 ----------------------------------- ------ ---------- ----------
Taxation for the six months to 30 September is based on the effective rate of taxation, which is estimated to apply in each country for the year ended 31 March 2012.
6 Earnings per share
As at As at As at 30 September 30 September 31 March 2011 2010 2011 ------------------------------ ----------------- ----------------- ----------------- Diluted Basic Diluted Basic Diluted Basic ------------------------------ -------- ------- -------- ------- -------- ------- Adjusted earnings per share excluding exceptional items and discontinued operations 3.2p 3.4p 2.8p 3.1p 8.2p 8.9p Loss per share on exceptional items (1.5)p (1.6)p - - (1.1)p (1.2)p ------------------------------ -------- ------- -------- ------- -------- ------- Loss per share on discontinued operations - - (0.1)p (0.1)p (0.2)p (0.2)p ------------------------------ -------- ------- -------- ------- -------- ------- Earnings per share from continuing operations 1.7p 1.8p 2.8 p 3.1p 7.1p 7.7p ------------------------------ -------- ------- -------- ------- -------- -------
The basic earnings per share is based on the profit attributable to equity holders of the Parent Company of GBP993,000 (2010: GBP1,563,000) and the weighted average number of ordinary shares in issue of 54,102,407 (2010: 52,371,295) calculated as follows:
September September 31 March Weighted average number of shares in thousands of shares 2011 2010 2011 Issued ordinary shares at 1 April 53,967 52,150 52,150 Shares issued in respect of acquisitions 0 221 854 Shares issued in respect of exercising of share options 136 0 123 Weighted average number of shares at 31 March 54,103 52,371 53,127 ----------------------------------- ------- ---------- ---------
Total number of options, over 5p ordinary shares, in issue at 30 September 2011 and during the period was 5,772,556.
Adjusted basic earnings per share excludes exceptional items charged of GBP1,080,000 (2010: nil), the tax relief attributable to those items of GBP222,000 (2010: nil) and the loss on discontinued operations (net of tax) of Nil (2010: GBP78,000), to give an adjusted profit of GBP1,851,000 (2010: GBP1,641,000).
This information is provided by RNS
The company news service from the London Stock Exchange
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