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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Instore | LSE:INST | London | Ordinary Share | GB0001469930 | ORD 10P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 4.68 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
TIDMINST Chairman's Statement and Chief Executive's Review CHAIRMAN'S STATEMENT The first half of the year has seen both continued progress with previously reported operational initiatives aimed at stabilising the business and the further integration of the Company into the Crown Crest Group. Whilst the reported loss before taxation for the period of GBP3.7 million represents a significant improvement on the GBP7.1 million loss reported for the same period last year, it would be wrong to characterise this as evidence of a turnaround in the Company's fortunes. However, it does demonstrate some degree of stabilisation and that the correct actions are being taken. Nevertheless, it is equally true that the discount sector is becoming ever more competitive in the current economic downturn. Although there is some evidence of consumers 'trading down' in the general merchandise sector, this has not been seen to the same extent as with, for example, food. As a result the present trading environment remains extremely difficult with ever increasing pressure on margins. The Board recognises that Crown Crest's investment in and commitment to the Company has been, and will continue to be, of vital importance. Not only is Crown Crest providing material financial support by way of loan and trade credit facilities, it is also assisting through initiatives such as joint buying and logistical support. While such assistance is provided always on a commercial and 'arm's length' basis, these are avenues of finance and credit that may well not have been available to the Company at all from traditional sources. The Board believes that even when general economic conditions improve, the Company's substantial dependence on the Crown Crest Group will continue and that the Company's interests will be best served by some or all of the Company's indebtedness to Crown Crest being converted into share capital. If approved, this would decrease further the proportion of the Company's shares in public hands and bring into question the continuing appropriateness of maintaining the Company's listing. For this and other reasons, the Company will today be separately announcing a proposal to seek cancellation of the admission of its shares to the Official List and to their trading on the London Stock Exchange, and subsequently the arrangement of a tender offer for its shares and its re-registration as a private limited company. A Circular setting out the reasons for and the details of these proposals, together with a notice convening a general meeting, will be posted to shareholders shortly. The Board unanimously believes this proposal to be in the best interests of shareholders as a whole, and is recommending that shareholders vote in favour. John Jackson Chairman 29th October 2009 CHIEF EXECUTIVE'S REVIEW During the first half of the year we have continued to implement the changes required to return the business to its heritage as a value retailer with a reputation for low everyday prices and fantastic offers. As a clear signal to consumers of our intentions in this regard we have pressed ahead with the programme of returning all our core estate to the 'Poundstretcher' brand, and have converted 58 stores during the period under review at minimal expense. To enable customers to be offered the best possible value for money we have continued to both refine our buying strategy and to review costs across the business. With regard to costs, we have continued to successfully achieve favourable rent and lease renewals and are renegotiating third party contracts for services wherever possible. I am pleased to report that our ongoing review of costs has not resulted in any significant redundancies and our focus has been to more tightly control staff hours on a store by store basis. Unfortunately we have experienced somewhat higher than anticipated distribution costs in the first half of the year. This has been due in part to the process of bedding in the logistics support now being provided by Crown Crest but principally due to the imperative of filling certain gaps that had arisen in our stock range. Ensuring that such gaps are eradicated and that all 'events', such as back-to-school, are fully ranged will be an area of focus for us going forward. Despite such stock issues, our sales for the first half remain broadly in line with our expectations and ahead of last year. The performance of our 19 store 'Coloroll' estate remains disappointing, however, although we have seen some encouraging signs following a review and rationalisation of the product range. We keep our options for this business under review. Finally, our property strategy remains one of prudence, keeping the market under constant review and assessing the relative merits of opportunities as they arise. During the period we have opened five new stores, including two former Woolworths sites, and closed four, giving a total of 329 stores at the half year. Trading Performance and Financial Results Total sales in the 26 weeks to 29th August 2009 were GBP139.8 million, an increase of 2.9% against the GBP135.8 million achieved in the same period last year. Within this total, like-for like sales showed an increase of 1.3%, reflecting the favourable weather during the first quarter and strong performances from textiles and FMCG. Cost of sales before exceptional items increased to GBP127.7 million (2008: GBP124.6 million), with savings in payroll and reduced rents offset by increased energy charges, together with higher than anticipated distribution costs incurred as gaps in the stock range were filled. Nevertheless, gross profit before exceptional items has increased to GBP12.1 million (2008: GBP11.2 million) increasing gross profit margin slightly to 8.6% (2008: 8.3%). After net operating expenses before exceptional items of GBP15.1 million (2008: GBP17.5 million), the business reported a net operating loss before exceptional items for the period of GBP3.2 million, a GBP3.1 million improvement versus last year's loss for the same period of GBP6.3 million. After the exceptional costs of GBP0.4 million, relating to the impairment of property, plant and equipment and an onerous lease provision (2008: GBP0.7 million relating to costs of the offer from Sechem Investments and employee share movements), and after net interest paid of GBP0.2 million (2008: GBP0.1 million), the total loss before taxation for the period was GBP3.7 million, compared with last year's GBP7.1 million. The basic loss per share was 1.98p (2008: 3.32p). Balance Sheet Capital expenditure in the 26 week period to 29th August 2009 was GBP0.7 million (2008: GBP0.3 million), partly reflecting the decision to rebrand the estate to the 'Poundstretcher' fascia. Fixed assets at the period end had decreased from GBP30.1 million to GBP21.7 million. Stock amounted to GBP44.4 million, an increase of 11.9% on 2008 levels, reflecting both the new product lines being brought into the business and the acquisitions made of ex-Woolworth stock. At the half-year end, the Group had net cash balances of GBP3.2 million (2008: GBP6.9 million), after a net decrease in cash of GBP3.7 million (2008: GBP3.3 million). Risk and Uncertainties The Group faces a number of risks and uncertainties, both over the remainder of the financial year and beyond, and it is Instore's policy to mitigate these risks to the greatest extent possible. The Company is, and in the view of the Directors likely to remain, significantly dependent on the support of the Crown Crest Group. The financial support from Crown Crest, which takes the form of a loan of GBP5 million, a guarantee to support the Company's banking facilities and trade credit facilities amounting to GBP5 million, is carefully monitored by the Board's Audit Committee to ensure it is provided always on an 'arm's length' basis and at commercial terms which reflect those applied to Crown Crest by its own lenders. In common with most retailers, the Group's performance is affected by the underlying economic climate. The Board considers that the full effects of the current recession have yet to be seen, but that the economic downturn presents opportunities as well as challenges, given the 'value' nature of Instore's offer and the possibility of that offer becoming increasingly attractive to a wider range of customers. Nevertheless, in such circumstances the value retail sector is likely to become ever more competitive, and the Group and its management will have to ensure sourcing remains robust if Instore is to continue to offer its customers best value. Group performance in every year is also heavily dependent on the key Christmas trading period and accordingly management spends a great deal of time planning for this period and ensuring such plans are well executed. In addition, sales of our seasonal lines, particularly our gardening and outdoor living ranges, are to a large extent dependent on the UK enjoying good, seasonal weather during the spring and summer months. As regards sourcing, the Group acquires a significant proportion of goods for resale from outside the UK, paid for in foreign currency, and it is the Group's policy to manage the inherent risks from such currency exposure by entering into forward contracts in respect of payments to such overseas suppliers. The day-to-day operation of the business is hugely dependent on the efficient and uninterrupted operation of Instore's logistics and IT systems. Given their centralised nature, the Group has invested much effort in establishing a robust business continuity plan, which it is hoped will minimise the impact of any major disaster suffered at the Group's head office location. Nevertheless, these effects cannot be eradicated fully, and any such disaster would have a significant short-term impact on the Group's business. Outlook Total sales were down 7.7% in the seven weeks ended 17th October 2009, equivalent to an 8.3% like-for-like decrease. As in previous years the full year outcome will be heavily dependent on the key Christmas trading period. Responsibility Statement of the Directors in Respect of the Interim Financial Report We confirm that to the best of our knowledge: * the condensed set of financial statements, which has been prepared in accordance with the applicable set of accounting standards, gives a true and fair view of the assets, liabilities, inancial position and loss of the Group; * the interim management report includes a fair review of the information required by: (a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and (b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so. Aziz Tayub Chief Executive 29th October 2009 Independent Review Report to Instore plc Introduction We have been engaged by the Company to review the condensed set of financial statements in the interim financial report for the 26 weeks ended 29th August 2009 which comprises the Consolidated Income Statement, the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Changes in Shareholcers' Equity, the Consolidated Statement of Financial Position, the Consolidated Statement of Cash Flows and the related notes. We have read the other information contained in the interim financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements. This report is made solely to the Company in accordance with the terms of our engagement. Our review has been undertaken so that we might state to the Company those matters we are required to state to it in this 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 for our review work, for this report, or for the conclusions we have reached. Directors' Responsibilities The interim financial report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the interim financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority. As disclosed in note 3, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this interim financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European Union. Our Responsibility Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the interim fi nancial report based on our review. Scope of Review We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the interim financial report for the 26 weeks ended 29th August 2009 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and Disclosure and Transparency Rules of the Financial Services Authority. PKF (UK) LLP Nottingham 29th October 2009 Unaudited Consolidated Income Statement for the 26 weeks ended 29th August 2009 26 weeks ended 29th August 26 weeks ended 30th 2009 August 2008 Before Before Exceptional Exceptional exceptional items exceptional items items (note Total items (note Total 6) 6) Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Revenue 139,792 - 139,792 135,821 - 135,821 Cost of sales (127,736) (440) (128,176) (124,580) - (124,580) Gross profit 12,056 (440) 11,616 11,241 - 11,241 Distribution (8,815) - (8,815) (10,155) - (10,155) costs Administrative (6,276) - (6,276) (7,319) (782) (8,101) expenses Operating (3,035) (440) (3,475) (6,233) (782) (7,015) (loss)/profit Finance income 1 - 1 33 - 33 Finance (183) - (183) (104) - (104) expenses Loss before (3,217) (440) (3,657) (6,304) (782) (7,086) taxation Taxation 7 (695) - (695) (194) - (194) Loss for the period attributable to the equity holders of the Parent Company (3,912) (440) (4,352) (6,498) (782) (7,280) Loss per share (pence) - Basic and 8 (1.98) (3.32) diluted Unaudited Consolidated Statement of Comprehensive Income for the 26 weeks ended 29th August 2009 26 weeks 26 weeks ended ended 29th August 30th August 2009 2008 GBP'000 GBP'000 Loss for the period attributable to the equity holders of the Parent Company (4,352) (7,280) Cash flow hedges - Fair value gains in period 382 3,123 - Transfers to net profit (2,169) (2,013) Total comprehensive expense for the period attributable to the equity holders of the Parent Company (6,139) (6,170) (net of tax) Unaudited Consolidated Statement of Changes in Shareholders' Equity for the 26 weeks ended 29th August 2009 Share Share Other Accumulated capital premium Reserves losses Total GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 As at 2nd March 2008 as previously reported 28,721 97,794 3,729 (104,089) 26,155 Prior year adjustment see notes below - - (219) - (219) At 2nd March 2008 as restated 28,721 97,794 3,510 (104,089) 25,936 Net loss - - - (7,280) (7,280) Cash flow hedges - Fair value gains in - - 3,123 - 3,123 period - Transfers to net - - (2,013) - (2,013) profit At 30th August 2008 as restated 28,721 97,794 4,620 (111,369) 19,766 At 1st March 2009 28,721 97,794 3,184 (114,214) 15,485 Net loss - - - (4,352) (4,352) Cash flow hedges - Reclassification to retained earnings - - (1,787) 1,787 - - Fair value gains in - - - 382 382 period - Transfers to net - - - (2,169) (2,169) profit At 29th August 2009 28,721 97,794 1,397 (118,566) 9,346 Prior year adjustment At 1st March 2008 the deferred tax adjustment relating to hedging was not recognised. An adjustment of GBP219,000 was made between deferred tax and the equity hedge reserve as per the Company's Statutory accounts for the 52 weeks ended 28th February 2009. Reclassification to accumulated losses The reclassification of the hedge reserve is due to the novation of the forward contracts and options held by the Company as per IAS 39 (see note 14). Unaudited Consolidated Statement of Financial Position as at 29th August 2009 29th August 30th August 28th February 2009 2008 2009 As restated Notes GBP\'000 GBP'000 GBP'000 Assets Non-current assets Property, plant and 9 21,685 30,138 25,222 equipment Deferred tax - 1,759 - Other non-current - 50 - receivables 21,685 31,947 25,222 Current assets Inventories 44,352 39,635 45,168 Trade and other 8,213 7,751 6,346 receivables Derivative financial - 4,142 7,345 assets Cash and cash equivalents 3,152 6,913 6,327 55,717 58,441 65,186 Total assets 77,402 90,388 90,408 Liabilities Current liabilities Trade and other payables 11a (53,305) (52,842) (56,432) Derivative financial - (2,679) (3,316) liabilities Current tax payable - (112) - Provisions 12 (558) (1,618) (1,091) (53,863) (57,251) (60,839) Net current assets 1,854 1,190 4,347 Non-current liabilities Provisions 12 (10,506) (9,710) (10,501) Other non-current 11b (3,687) (3,659) (3,583) payables (14,193) (13,369) (14,084) Total liabilities (68,056) (70,620) (74,923) Net assets 9,346 19,768 15,485 Shareholders' equity Called up share capital 28,721 28,721 28,721 Share premium 97,794 97,794 97,794 Other reserves 1,397 4,622 3,184 Accumulated losses (118,566) (111,369) (114,214) Total equity 9,346 19,768 15,485 Prior year adjustment - taken to equity hedge reserve At 1st March 2008 the deferred tax adjustment relating to hedging was not recognised. An adjustment of GBP219,000 was made between deferred tax and the equity hedge reserve as per the Company's Statutory accounts for the 52 weeks ended 28th February 2009. Unaudited Consolidated Statement of Cash Flows for the 26 weeks ended 29th August 2009 26 weeks 26 weeks ended ended 29th August 30th August 2009 2008 Notes GBP'000 GBP'000 Cash flows from operating activities Cash (absorbed by) operations 10 (2,281) (1,176) Interest received 1 33 Interest paid (183) (104) Net cash outflow from operating (2,463) (1,247) activities Cash flows from investing activities Purchase of property, plant and (712) (551) equipment Net cash used in investing activities (712) (551) Net decrease in cash, cash equivalents (3,175) (1,798) and overdrafts Cash and cash equivalents at beginning 6,327 8,711 of period Cash, cash equivalents and overdrafts 3,152 6,913 at end of period Notes to the Interim Report for the 26 weeks ended 29th August 2009 1 GENERAL INFORMATION The Company is a limited liability company incorporated and domiciled in the UK. The address of its registered office is Trident Business Park, Leeds Road, Huddersfield, HD2 1UA. The Company has its primary listing on the London Stock Exchange. This condensed consolidated interim financial information was approved for issue on 29th October 2009. These interim financial results do not comprise statutory accounts within the meaning of Section 435 of the Companies Act 2006. Statutory accounts for the 52 weeks ended 28th February 2009 were approved by the Board of Directors on 29th June 2009 and delivered to the Registrar of Companies. The financial information contained in this interim report in respect of the 52 weeks ended 28th February 2009 has been extracted from the 2009 annual report and financial statements. The report of the auditors on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under Section 498 (2) or (3) of the Companies Act 2006. 2 SEASONALITY OF OPERATIONS The Company's principal activity is retail within the value sector. Historically, approximately 55% of sales revenue is generated in the second half-year, although this is partially offset by a corresponding rise in variable costs. 3 BASIS OF PREPARATION This condensed consolidated interim financial information for the period ended 29th August 2009 has been prepared in accordance with the Disclosure and Transparency Rules of the Financial Services Authority and with IAS 34, "Interim financial reporting" as adopted by the European Union. The half-yearly condensed consolidated financial report should be read in conjunction with the annual financial statements for the 52 weeks ended 28th February 2009, which have been prepared in accordance with IFRSs as adopted by the European Union. In view of the Group's ongoing trading losses the Directors have carried out a detailed review to determine whether the going concern basis of preparation remains appropriate. In carrying out this review the Directors have noted the improved results that have been achieved during the interim period compared to the comparative period in line with the turnaround plan. The Directors are aware that continued achievement of the turnaround plan is dependent on the ongoing level of demand for the Group's products, exchange rate fluctuations between sterling and dollar, and the availability of bank finance in the foreseeable future. During the interim period the Group breached one of its borrowing covenants. However, the consent of the bank was sought prior to such breach occurring and the Directors subsequently obtained a formal waiver by the bank after the period end. There have been no subsequent breaches. The Directors have prepared detailed cash flow forecasts which they consider prudently model trading performance taking account of the current economic environment and demonstrate that the business should be able to continue to operate within its current banking facilities for the foreseeable future. The committed facilities are due for review on 30th June 2010. The Group will open renewal negotiations with the bank in due course and has at this stage not sought any written commitment that the facility will be renewed. However, the Group has held discussion with its bankers about its future borrowing needs and no matters have been drawn to its attention to suggest that renewal may not be forthcoming on acceptable terms. The Directors recognise that in order to operate within its facilities the Group is dependent on the ongoing support of Crown Crest (Leicester) plc, the Company's principal shareholder. The Directors have obtained written confirmation that Crown Crest (Leicester) plc will not recall its loan during the next year and will continue to provide ongoing support in relation to trade credit facilities and buying and logistic support for the foreseeable future to ensure the Group can meet its liabilities as they fall due. In consideration of its ability to provide the ongoing support Crown Crest (Leicester) plc has reviewed its own funding requirements and has agreed extended facilities to provide additional headroom to cover any delays with the ongoing turnaround of the Group. Taking the above into consideration the Directors believe that the preparation of the accounts on a going concern basis is appropriate. 4 ACCOUNTING POLICIES The accounting policies adopted are consistent with those of the financial statements for the 52 weeks ended 28th February 2009, as described in those annual financial statements. There have been no significant changes in the bases upon which estimates have been determined, compared to those applied at 28th February 2009 and no change in estimate has had a material effect on the current period. These condensed consolidated interim financial statements have been prepared on the basis of IFRS in issue that are effective or available for early adoption at the Group annual reporting date as at 27th February 2010. 5 SEGMENT INFORMATION The Group derives its revenue from a single activity, being variety discount retailing. This is carried out throughout the UK and applying IFRS 8 the Directors consider this to be a single operating segment. 6 EXCEPTIONAL ITEMS Items that are both material in size and unusual and infrequent in nature are presented as exceptional items in the income statement. The Directors are of the opinion that the separate recording of exceptional items provides helpful information about the Group's underlying business performance. Operating exceptional items are analysed as follows: 26 weeks 26 weeks ended ended 29th August 30th August 2009 2008 GBP'000 GBP'000 Cost of sales: 1) Impairment of property, plant and (354) - equipment 2) Onerous lease provision (86) - (440) - Administration expenses: 3) Cost of share offer - (245) 4) Employee share loan provision - (537) - (782) (440) (782) 1) As a result of the provisions under IAS 36, the Directors have conducted an assessment of the future cash flows of all trading outlets. An impairment charge of GBP0.4 million (2008: GBPnil) has been recognised on those stores where the anticipated cash flows do not support the carrying value of the associated assets. 2) During the financial period ended 29th August 2009, the Directors have conducted an assessment of the future cash flows of all trading outlets and as result an onerous lease charge of GBP0.1 million (2008: GBPnil) was recognised on those stores where the anticipated cash flows were not expected to cover the contracted lease charges. 3) During the period ended 30th August 2008, Seaham Investments Limited made an offer to the minority shareholders of Instore plc to buy their shares. The cost of evaluating and effecting this offer was GBP0.3 million. 4) During the period ended 30th August 2008, an impairment charge of GBP0.5 million has been recognised in respect of a potential shortfall on loans made to employees for the purpose of acquiring shares in the Company. 7 TAXATION The tax charge for the period is GBP695,000 (2008: GBP194,000). The effective rate of tax is lower than the prevailing UK statutory rate of 28% as no deferred tax asset has been recognised in relation to losses arising in the period. The tax change relates to movements in deferred tax relating to short-term timing differences. 8 LOSS PER SHARE Basic loss per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period, excluding those held in the employee share trust which are treated as cancelled. For diluted loss per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive potential ordinary shares. The Group has one class of potentially dilutive ordinary shares: those share options granted to employees where the exercise price is less than the average market price of the Company's ordinary shares during the period. Reconciliations of the earnings and weighted average number of shares used in the calculations are set out below. 2009 2008 Weighted Weighted average average number of Per number of Per share share Earnings shares amount Earnings shares amount GBP'000 millions pence GBP'000 millions pence Basic loss per share: Earnings attributable to ordinary (4,352) 219.4 (1.98) (7,280) 219.5 (3.32) shareholders Effect of dilutive securities: Options - - - - - - Diluted loss per (4,352) 219.4 (1.98) (7,280) 219.5 (3.32) share The dilutive effect of options is disregarded in the current and prior periods as a loss was incurred. 9 PROPERTY, PLANT AND EQUIPMENT 26 weeks 26 weeks 52 weeks ended ended ended 29th August 30th August 28th February 2009 2008 2009 GBP'000 GBP'000 GBP'000 Opening net book amount 1st March 2009/ 2nd March 2008/2nd March 2008 25,222 33,987 33,987 Additions at cost 677 259 2,536 Disposals (148) (478) (672) Depreciation, amortisation and (3,712) (3,630) (8,530) other movements Impairment charge (note 6) (354) - (2,099) Closing net book amount 29th August 2009/ 30th August 2008 21,685 30,138 25,222 Due to indications the properties have been reviewed for impairment at the balance sheet date. The recoverable amount of each property has been based on estimated value in use calculations. Value in use calculations have been based on a subjective discount rate of 8.7%. 10 CASH FLOW FROM OPERATING ACTIVITIES Cash absorbed by operations 26 weeks 26 weeks ended ended 29th August 30th August 2009 2008 GBP'000 GBP'000 Loss for the financial period (4,352) (7,280) Adjustments for: Taxation 695 194 Finance income (1) (33) Finance costs 183 104 Depreciation 3,712 4,125 Impairment of fixed assets 354 (495) Loss on disposal of property, plant and 148 478 equipment Share-based payment (credit) - (171) Fair value movements on derivative financial 1,547 - instruments Decrease/(Increase) in inventories 816 (3,929) (Increase) in trade and other receivables (1,867) (2,420) Increase/(Decrease) in payables (2,988) 9,047 (Decrease) in provisions (528) (796) (2,281) (1,176) 11 LIABILITIES (a) Trade and other payables 29th August 30th August 28th February 2009 2008 2009 GBP'000 GBP'000 GBP'000 Trade payables 35,099 35,369 38,090 Other tax and social security 1,790 2,514 1,001 payable Other payables 2,073 2,121 1,769 Loan from Crown Crest 5,000 - 5,000 (Leicester) plc (note 14) Accruals and deferred income 9,343 12,838 10,572 53,305 52,842 56,432 (b) Other non-current liabilities 29th August 30th August 28th February 2009 2008 2009 GBP'000 GBP'000 GBP'000 Other payables 3,687 3,659 3,583 Other payables represent capital contributions from landlords, lease premiums and rent-free periods. 12 PROVISIONS Dilapidation Closed store Onerous lease provision provision provision Total GBP'000 GBP'000 GBP'000 GBP'000 At 2nd March 2008 9,634 690 1,800 12,124 Charged to profit and 112 - - 112 loss account Utilised during the (57) (583) - (640) period Released during the (28) - (240) (268) period At 30th August 2008 9,661 107 1,560 11,328 At 2nd March 2008 9,634 690 1,800 12,124 Charged to profit and 260 134 1,085 1,479 loss account Utilised during the (221) (798) (443) (1,462) period Released during the (27) (26) (496) (549) period At 28th February 2009 9,646 - 1,946 11,592 At 1st March 2009 9,646 - 1,946 11,592 Charged to profit and 20 - 86 106 loss account Utilised during the (2) - - (2) period Released during the - - (632) (632) period At 29th August 2009 9,664 - 1,400 11,064 Provisions have been analysed between current and non-current as follows: 29th August 30th August 28th February 2009 2008 2009 GBP'000 GBP'000 GBP'000 Current 558 1,618 1,091 Non-current 10,506 9,710 10,501 11,064 11,328 11,592 13 CONTINGENCIES Liabilities The Group had guaranteed certain lease obligations of its subsidiary undertakings, which were disposed of to Tradegro Limited during the period ended 22nd February 2003. Tradegro Limited has agreed to indemnify the Company against claims received under the guarantees. These leases all expire in between 8 and 10 years. The maximum potential annual liability under these leases is GBP336,000 (2008: GBP336,000). As at 28th February 2009 the Group had guarantees in respect of Customs and Excise duty deferment of GBP500,000 (2008: GBP500,000) and stand-by letters of credit given to suppliers of GBP630,000 (2008: GBPnil). Assets In previous years a compulsory purchase order was issued over one of the Group's stores. Subject to final agreement of the value, the minimum compensation is expected to be GBP650,000 after costs. 14 RELATED PARTY TRANSACTIONS Crown Crest (Leicester) plc and Seaham Investments Limited are related parties to Instore plc and its subsidiary undertakings. At 29th August 2009 Seaham Investments owned 56.98% of the ordinary 10p shares in Instore plc. A A Tayub and A R Tayub are Directors of Crown Crest (Leicester) plc and A A Tayub is a Director of Seaham Investments Limited. A A Tayub and A R Tayub are also Directors of Instore plc. Material transactions between related parties in relation to Crown Crest (Leicester) plc and Seaham Investments Limited in the period to 29th August 2009 were: (a) GBP29.9 million (30th August 2008: GBP8.6 million; 28th February 2009: GBP24.5 million) was payable to Crown Crest (Leicester) plc during the period for purchases of goods for resale during the ordinary course of business. As at 29th August 2009 an amount of GBP14.2 million (30th August 2008: GBP2,635,000; 28th February 2009: GBP5.3 million) was owed to Crown Crest (Leicester) plc in respect of these purchases. (b) On 25th August 2009, $27.3 million of Forward Contracts and Options were novated to Crown Crest (Leicester) plc as part of the strategy of purchasing the Company's previously imported goods directly from Crown Crest. (c) In January 2009, the Group received an unsecured short-term loan of GBP5 million to cover working capital requirements. Interest is charged at 1.25% above LIBOR until May 2009 when the rate increases to 2.25% above LIBOR. At 29th August 2009 the amount outstanding included in current liabilities was GBP5 million (28th February 2009: GBP5 million). M & S Toiletries Ltd is also a related party to Instore plc and its subsidiary undertakings. S Tayub, a Director and shareholder of M & S Toiletries Ltd, is related to A A Tayub and A R Tayub, Directors of Instore plc. Material transactions between related parties in relation to M & S Toiletries Ltd in the period to 29th August 2009 were: (a) GBP2.0 million (30th August 2008: GBPnil; 28th February 2009: GBP1.1 million) was payable to M & S Toiletries Ltd during the period for purchases of goods for resale during the ordinary course of business. As at 29th August 2009 an amount of GBP149,000 (30th August 2008: GBPnil; 28th February 2009: GBP21,000) was owed to M & S Toiletries Ltd in respect of these purchases. Sert UK plc is another related party to Instore plc and its subsidiary undertakings. S Tayub, a Director and shareholder of Sert UK plc, is related to A A Tayub and A R Tayub, Directors of Instore plc. Material transactions between related parties in relation to Sert UK plc in the period to 29th August 2009 were: (a) GBPnil (30th August 2008: GBP360,000; 28th February 2009: GBP426,000) was payable to Sert UK plc during the period for purchases of goods for resale during the ordinary course of business. As at 29th August 2009 an amount of GBPnil (30th August 2008: GBPnil; 28th February 2009: GBPnil) was owed to Sert UK plc in respect of these purchases. (b) GBPnil (29th August 2008: GBPnil; 28th February 2009: GBP152,000) was receivable from Sert UK plc during the period for purchases of goods for resale during the ordinary course of business. As at 28th August 2009 an amount of GBPnil (29th August 2008: GBPnil; 28th February 2009: GBPnil) was receivable from Sert UK plc in respect of these purchases. Tradehold Limited, Tradegro Limited and Tradegro (UK) Limited are related parties to Instore plc and its subsidiary undertakings. At 28th February 2009 Tradegro Limited owned 15.86% of the ordinary 10p shares in Instore plc. Material transactions between related parties in relation to Tradehold Limited, Tradegro Limited and Tradegro (UK) Limited in the period to 29th August 2009 were: (a) GBPnil (30th August 2008: GBP35,000; 28th February 2009: GBPnil) was payable to Tradegro (UK) in respect of the purchase of shares from Directors of a subsidiary company. (b) GBPnil (30th August 2008: GBP6,000; 28th February 2009: GBPnil) was paid to Tradegro (UK) for travel costs incurred during the period. (c) GBPnil (30th August 2008: GBP56,000; 28th February 2009: GBPnil) was received from Tradegro (UK) in respect of rental payments reimbursed in connection with the indemnity arrangements agreed on the disposal of previously held subsidiaries. Key management represents the current Executive Directors. Key management compensation amounted to GBP85,000 for the period to 29th August 2009 (30th August 2008: GBPnil; 28th February 2009: GBP58,000). This figure comprises of salaries and other short-term benefits. For the period to 29th August 2009 an amount of GBP6,000 (30th August 2008: GBP42,000; 28th February 2009: GBP54,000) was paid to Forrest Burlinson, a firm of Chartered Accountants, in respect of the services of an Executive Director. =--END OF MESSAGE--- This announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
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