RNS Number:3698T
Wensum Company PLC
30 April 2008
The Wensum Company PLC
30 April 2008
Preliminary results for the year ended 26 January 2008
PRELIMINARY RESULTS FOR THE YEAR ENDED 26 JANUARY 2008
HIGHLIGHTS
The directors announce the results for the year ended 26 January 2008
* Net loss after tax of #244,000 against a prior year profit of #602,000
* Cash balances remain strong at #2.3m
* Dividend for the year maintained at 6.6p (2007: 6.6p); final dividend
maintained at 4.4p per share
* Sale completed of the Norwich manufacturing site at a net cash inflow of
#667,000
* Prospects of receiving a sum exceeding #500,000 during the current year
from the purchaser of the Norwich manufacturing site on receipt of planning
permission
The Chairman, Stuart Lyons CBE said:
"The current year will not be easy for the sector and Wensum's first two months'
trading has been disappointing. However, management is continuing to look for
opportunities to improve sales and margins, and build productive partnerships
for the future. The results for the coming year should benefit from the receipt
of additional proceeds relating to the Norwich disposal. The Directors believe
that Wensum's strong cash position will enable the group to weather any economic
downturn and build for the future "
For further information contact:
The Wensum Company plc
Jean Phillips - Chief Executive 01293 422 700
Sandra Badman - Finance director 01293 422 700
Brewin Dolphin Investment Banking (Nomad)
Neil Baldwin 0845 213 4726
THE WENSUM COMPANY PLC
PRELIMINARY RESULTS FOR THE YEAR ENDED 26 JANUARY 2008
CHAIRMAN'S STATEMENT
Results
Sales for the year ended 26 January 2008 were lower than expected and the
operating performance fell sharply. Group sales ended at #6.02 million, compared
with the prior year's #6.37 million, a fall of 5.5 per cent. Losses before tax
were #282,000. After an income tax credit of #38,000, the total attributable
loss was #244,000 against a prior year profit of #602,000.
Group cash balances fell to #2.3 million (2007: #3.3 million), reflecting the
poor trading results and the use of working capital to fund new contracts.
Although this fall was unwelcome, the group has a strong cash position by
contrast with many of its competitors. Finance income less finance costs for the
year rose to #225,000 compared with the prior year's #84,000.
As reported previously, once the purchaser of our former manufacturing site in
Norwich has received formal planning permission for his proposed development the
group will be entitled to receive a significant further payment. We have been
informed that at a meeting with the local planning authority in April 2008,
conditional planning permission was granted, subject to an agreement on the
provision of low-cost housing, which will shortly be documented. Provided this
proceeds to a satisfactory conclusion, it has been estimated that the group will
receive a sum exceeding #500,000 during the current year.
Dividend
The directors recommend an unchanged final dividend of 4.4p which, together with
the interim dividend of 2.2p, will give a total for the year of 6.6p at a cash
cost of approximately #517,000. The final dividend, if approved by
shareholders, will be payable on 30 June 2008 to shareholders on the register on
9 May 2008.
Operating Performance
During the year the group was successful in winning new contracts, but many
fewer than had been hoped, particularly in the second half. Wensum's strengths
include a strong in-house technical, design and logistics capability, and a high
level of brand support and individual customer care, all of which have cost
implications. In the present difficult environment, the market has been
extremely nervous and more contracts than usual have been awarded to lowest-cost
producers. In the light of this, considerable management effort during the
year was put into reviewing the group's efficiencies and competitiveness.
During the second half-year the group began trials with new overseas suppliers
which, if successful, will lead to significant savings in the future.
Management is also taking steps to reduce distribution and administrative costs
wherever practicable.
The cost of sales during the year at #3.81 million was considerably higher than
the prior year's #3.17 million, when there was a better than expected outturn on
completed contracts; the gross profit margin for the year was 36.7 per cent,
compared with the previous year's 50.3 per cent. Year-end inventories rose by
#1.1 million, of which #520,000 was to provide launch stocks for new contracts
obtained but not fulfilled prior to the year-end.
As reported previously, the directors have been keen to develop the group to
take advantage of the long-term potential of the corporatewear sector following
the disposal of the manufacturing subsidiary Wensum Clothing. During the year
discussions took place with third parties on possible acquisitions and other
potential partnerships with a view to improving the group's critical mass.
Certain discussions remained inconclusive at the year-end, but associated
professional fees exceeding #100,000 have been written off in the year under
review.
Directors and Staff
This has been a particularly challenging year and I would like to thank Jean
Phillips our Chief Executive, and the other directors, management and staff for
their commitment and loyalty.
Prospects
During the past year, the corporatewear sector has suffered from intensified
competition, and contracts have been awarded to suppliers who have apparently
quoted on the basis of little or no profit to themselves. There is now evidence
of some restructuring within the sector which may bring greater order to the
marketplace, but this will take time to bed in.
The current year will not be easy for the sector and Wensum's first two months'
trading has been disappointing. However, management is continuing to look for
opportunities to improve sales and margins, and build productive partnerships
for the future. The results for the coming year should benefit from the receipt
of additional proceeds relating to the Norwich disposal. The directors believe
that Wensum's strong cash position will enable the group to weather any economic
downturn and build for the future
Stuart Lyons CBE
30 April 2008
GROUP INCOME STATEMENT
For the year ended 26 January 2008
2008 2007
#000 #000
Continuing operations
Revenue 6,017 6,368
Cost of sales (3,810) (3,168)
Gross profit 2,207 3,200
Distribution costs (698) (562)
Administrative costs (2,016) (1,518)
(Loss)/profit from operations (507) 1,120
Finance income 225 98
Finance costs - (14)
(Loss)/profit before tax (282) 1,204
Income tax credit /(expense) 38 (373)
(Loss)/profit for the period from continuing operations (244) 831
(Loss) for the period from discontinued operations - (229)
(Loss)/profit for the period (244) 602
(Loss)/earnings per share - basic (3.11)p 7.68p
- diluted (3.11)p 7.68p
(Loss)/earnings per share from continuing activities
- basic (3.11)p 10.60p
- diluted (3.11)p 10.60p
Dividends
Proposed dividend per share 4.4p 4.4p
Proposed dividend #344,692 #344,692
Dividends paid during the year 6.6p 6.6p
Dividends paid during the year #517,038 #517,038
GROUP BALANCE SHEET
At 26 January 2008
2008 2007
#000 #000
Non current assets
Intangible assets 86 63
Property, plant and equipment 103 135
Deferred tax assets 67 45
256 243
Current assets
Inventories 2,611 1,561
Receivables and prepayments 1,353 1,752
Current corporation tax 175 -
Loans and receivables:
Term deposit at bank - 1,500
Cash and cash equivalents 2,275 1,754
6,414 6,567
Assets held for resale - 653
6,414 7,220
Current liabilities
Trade and other payables 1,587 1,313
Current corporation tax - 261
1,587 1,574
Non current liabilities
Deferred tax liabilities - 45
Net assets 5,083 5,844
Equity attributable to equity holders of the parent
Share capital 392 392
Share premium account 189 189
Capital redemption reserve 2 2
Profit and loss account 4,500 5,261
Total equity 5,083 5,844
GROUP STATEMENT OF CHANGES IN EQUITY
For the year ended 26 January 2008
Share Capital Share premium Capital Profit and Total equity
Redemption loss account
Reserve
#000 #000 #000 #000 #000
Balance at 28 January 2006 392 189 2 5176 5,759
Profit for the year - - - 602 602
Dividends paid - - - (517) (517)
Balance at 27 January 2007 392 189 2 5,261 5,844
(Loss) for the year - - - (244) (244)
Dividends paid - - - (517) (517)
Balance at 26 January 2008 392 189 2 4,500 5,083
GROUP CASH FLOW STATEMENT
For the year ended 26 January 2008
2008 2007
#000 #000
Cashflows from operating activities
(Loss)/profit before tax (282) 1,204
(Loss) before tax on discontinued operations - (287)
Depreciation 52 117
Amortisation 43 37
Profit on disposal of property (14) -
(Increase)/decrease in inventories (1,050) 532
Decrease in receivables and prepayments 406 772
Increase/(decrease) in trade and other payables 273 (993)
Finance income (177) (98)
Finance costs - 1
Corporation tax (paid)/received (465) 8
Interest paid - (1)
Net cash (outflow)/inflow from operating activities (1,214) 1,292
Cashflow from investing activities:
Payments to acquire property, plant and equipment (20) (6)
Payments to acquire intangible assets (66) (24)
Proceeds on disposal of asset held for resale 667 -
Disposal of discontinued operations - 532
Placement of monies from/(to) long term deposit 1,500 (1,500)
Interest received 171 67
2,252 (931)
Cashflow from financing activities:
Equity dividends paid (517) (517)
(517) (517)
Increase / (decrease) in cash and cash equivalents: 521 (156)
Cash and cash equivalents at the beginning of period 1,754 1,910
Cash and cash equivalents at end of period 2,275 1,754
NOTES THE FINANCIAL INFORMATION
1 International Financial Reporting Standards
The consolidated financial statements have been prepared in accordance with
applicable International Financial Reporting Standards as adopted by the EU.
2 Earnings per share
The earnings per share are based on the loss for the year of #244,000
(2007: profit #602,000) and on 7,833,916 (2007: 7,833,916) ordinary shares,
being the weighted average number of shares in issue during the year. There
is no dilution of earnings per share for 2008 or 2007 as all employee share
options had been exercised at 28 January 2006 and no options were granted
after this date. Diluted earnings per share is therefore the same as basic
earnings per share.
3 Dividends
The Directors recommend a final dividend of 4.4p (2007: 4.4p) in addition to
the interim dividend paid in the year of 2.2p (2007:2.2p). If approved by
shareholders at the Annual General Meeting to be held on 27 June 2008 the
final dividend will be paid on 30 June 2008 to shareholders on the register
on 9 May 2008. The shares will become ex dividend on 7 May 2008.
4 Annual General Meeting
The Annual General Meeting of the Company will be held at The Wensum Company
plc, South Corner, Old Brighton Road, Lowfield Heath, Crawley, RH11 0PH on
27 June 2008 commencing at 12:00 noon.
5 Financial Information
The above audited financial information does not amount to Statutory
Accounts within the meaning of section 240 of the Companies Act 1985. The
Statutory Accounts for the year ended 27 January 2007 on which the auditors
issued an unqualified opinion, have been delivered to the Registrar of
Companies.
6 Annual Report
The Annual Report and Financial Statements will be despatched to
shareholders in May 2008 and will be available from then from the Company
Secretary at the company's registered office South Corner, Old Brighton
Road, Lowfield Heath, Crawley, RH11 0PH.
ENDS
This information is provided by RNS
The company news service from the London Stock Exchange
END
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