BAE.L Regulatory News (BAE)

23 Jun 2005 07:01

Beale PLC23 June 2005 23 June 2005 Beale PLC Interim Results/Bid Talks Terminated Beale PLC, the specialist department store operator, announces Interim Resultsfor the 26 weeks ended 30 April 2005. Following the termination of talksregarding a possible offer, the Board has brought forward the release of theInterim Results from Monday 27 June. Key points • Gross sales* for the period fell by 2.4% to £57.9m (2004: £59.3m) reflecting the intensely competitive retail environment • Profit before tax for the 26 weeks was £1.08m (2004: £1.27m) • Interim dividend maintained at 1.10p per share (2004: 1.10p) • Continued tighter stock control reduce stock levels by 5.9% compared with 1 May 2004 • Net debt at 30 April 2005 of £5.45m (1 May 2004: £6.82m) • Satisfactory increase in womenswear, accessories, furniture and catering year-on-year; disappointing sales in housewares and menswear • Offer discussions announced on 25 February 2005, now terminated Mike Killingley, Chairman commented: "In the 7 weeks to 18 June gross sales, ona like for like basis, were level with those of last year. The tradingenvironment remains difficult and we do not foresee any significant improvementduring 2005. Your Board's attention remains focused on running the business welland delivering value for shareholders. In the short term any improvement in theGroup's trading performance will come from the continued implementation of ourbusiness plan changes, both in product mix and merchandise presentation." The analyst meeting planned for Monday 27 June 2005 will still take place. For further information please contact: Beale PLC Tavistock Communications Rowan DartingtonAllan Allkins, Chief Executive Lulu Bridges Barrie NewtonKen Owst, Finance Director Paul Dulieu Tel: 0117 925 3377Tel: 01202 552 022 Tel: 020 7920 3150 * Gross sales includes the full value of concession sales and VAT and provides amore realistic indication of customers' spending patterns than turnover. CHAIRMAN'S STATEMENT Financial results Our profit before tax for the 26 weeks to 30 April 2005 was £1.08 million (2004:£1.27 million). These figures have been restated to reflect the adoption ofFRS17 to account for pension liabilities. Gross sales, including the full value of concession sales and VAT, fell by 2.4%to £57.9 million (2004: £59.3 million); these provide a more realisticindication of customers' spending patterns than the turnover for the period,which declined by 5.5% to £34.2 million (2004: £36.2 million). Turnover excludesthe non-commission element of sales made by concessions. Gross sales havedeclined less than turnover because of the increasing significance to the Groupof concession sales. All figures are on a like for like basis. Gross margin as a percentage of gross sales was comparable to last year. Grossmargins on reported turnover improved from 50.8% to 52.7%, primarily becauseonly the commission element of concession sales is included in turnover. Termination of offer discussions We announced on 25 February 2005 that we had held very preliminary discussionswith a third party which might or might not lead to an offer for the Company. All discussions relating to an offer for the Company have now ceased. Shareholders will note that it is almost four months since the 25 Februaryannouncement, which was precipitated by a significant movement in the Company'sshare price. Those third party discussions had been at a very preliminary stageand did not progress to detailed due diligence or to an offer for your Company. However, following the announcement, expressions of interest in the Company weremade by other parties. These further discussions also did not progress either tothe stage of detailed due diligence or to an offer, primarily as a result of theGroup's defined benefit pension liabilities. The Beales defined benefit schemewas closed to new members in 1997. The pension liability, as disclosed in the Report and Accounts for the 52 weeksended 30 October 2004, on the basis of FRS17, was £7.28 million, beforeaccounting for the related deferred tax asset. This liability, net of deferredtax, has now been included in the Group's balance sheet. Review of activities Shareholders will be well aware, from extensive reports in the media, that theretail environment continues to be intensely competitive, and is morechallenging than it has been for many years. Against that background, sales of womenswear, accessories, furniture andcatering all showed satisfactory increases on last year. The improvement infashion and accessories reflects a better fashion mix, and the strongerfurniture sales came as we moved our assortment to provide an improving rangebased on quality and value. These are all encouraging when set against therecent retail trend. The decline in sales in the period was largely attributable to disappointingsales in housewares and menswear. The former is consistent with resultselsewhere in the high street; houseware sales have suffered with the reductionin house moves as the housing market has softened. The decline in menswear salesalso reflects the difficult middle market apparel business, but it has led us tomake a number of changes to the way in which we organise and buy for thatcategory, which we believe will lead to improvements in the future. Our Southport store, which was partially refurbished in October last year,continues to perform well, with sales up on the equivalent period last year.This demonstrates the improvements which can be achieved with relatively modestamounts of carefully planned capital expenditure. Hilary Santell joined the Board on 14 February from Littlewoods as buying andmerchandising director. She has made a swift impact, reviewing all aspects ofour merchandise and introducing many aspects of best practice. The changes whichshe is introducing will improve both product mix and price architecture toensure that we are competitive in the high streets where we trade. On 9 June we announced that we had reached a commercially acceptable agreementwith O&H Properties, landlords of the Walton-on-Thames store, for the earlysurrender of our lease, which was due to expire in December 2007. The store willclose on 14 January 2006, and our landlords intend to redevelop the site. Weshall receive a cash consideration of £575,000 for the surrender, payable in twoinstalments. The profit on this disposal, after closure costs, will be accountedfor in the year ending October 2006. We are looking for alternative sites in theWalton area. We are sad to be closing this store after many successful years trading inWalton and thank all our customers and staff for their continuing loyalty. Cash management Our net debt at 30 April 2005 was £5.45 million (1 May 2004: £6.82 million).This primarily reflects continued tight control of stocks, which were 5.9% belowthose at 1 May 2004. Dividend An interim dividend of 1.10p per share (2004: 1.10p) will be paid on 30September 2005 to shareholders on the register at the close of business on 9September 2005. The shares will become ex-dividend on 7 September 2005. Ourdividend has only been partly covered by profits for the last two financialyears; we shall review our performance and forecasts carefully for signs ofimproving trading following our year end in October before determining whatdividend should be paid in respect of the full year. Outlook In the 7 weeks to 18 June gross sales, on a like for like basis, were level withthose of last year. The trading environment remains difficult and we do notforesee any significant improvement during 2005. Your Board's attention remainsfocused on running the business well and delivering value for shareholders. Inthe short term any improvement in the Group's trading performance will come fromthe continued implementation of our business plan changes, both in product mixand merchandise presentation. Mike KillingleyChairman22 June 2005 Independent review report to Beale PLC Introduction We have been instructed by the Company to review the financial information forthe six months ended 30 April 2005 which comprises the consolidated profit andloss account, the consolidated balance sheet, the statement of total recognisedgains and losses, the reconciliation of movement in consolidated shareholders'funds, the consolidated cash flow statement and related notes to theconsolidated cash flow statement, and related notes 1 to 7. We have read theother information contained in the interim report and considered whether itcontains any apparent misstatements or material inconsistencies with thefinancial information. This report is made solely to the Company in accordance with Bulletin 1999/4issued by the Auditing Practices Board. Our work has been undertaken so that wemight state to the Company those matters we are required to state to them in anindependent review report and for no other purpose. To the fullest extentpermitted by law, we do not accept or assume responsibility to anyone other thanthe Company, for our review work, for this report, or for the conclusions wehave formed. Directors' responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by, the directors. The directorsare responsible for preparing the interim report in accordance with the ListingRules of the Financial Services Authority which require that the accountingpolicies and presentation applied to the interim figures are consistent withthose applied in preparing the preceding annual accounts except where anychanges, and the reasons for them, are disclosed. Review work performed We conducted our review in accordance with the guidance contained in Bulletin1999/4 issued by the Auditing Practices Board for use in the United Kingdom. Areview consists principally of making enquiries of Group management and applyinganalytical procedures to the financial information and underlying financial dataand, based thereon, assessing whether the accounting policies and presentationhave been consistently applied unless otherwise disclosed. A review excludesaudit procedures such as tests of controls and verification of assets,liabilities and transactions. It is substantially less in scope than an auditperformed in accordance with United Kingdom auditing standards and thereforeprovides a lower level of assurance than an audit. Accordingly, we do notexpress an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 30 April 2005. Deloitte & Touche LLPChartered AccountantsSouthampton22 June 2005 Consolidated profit and loss accountUnaudited Group results for the 26 weeks to 30 April 2005 Notes 26 weeks to 26 weeks to 52 weeks to 30 April 2005 1 May 2004 30 Oct 2004 (restated) (restated) ------------- ------------- ------------- £000 £000 £000Gross sales 1 57,895 59,300 109,598 ------------- ------------- ------------- Turnover 1 34,232 36,171 65,299Cost of sales (16,188) (17,782) (31,075) ------------- ------------- -------------Gross profit 18,044 18,389 34,224Administrative expenses 2 (16,753) (16,942) (33,769) ------------- ------------- -------------Operating profit 1,291 1,447 455Other finance charges (107) (35) (71)Net interest payable (107) (144) (295) ------------- ------------- -------------Profit on ordinaryactivities before taxation 1,077 1,268 89Taxation 3 (451) (570) 6 ------------- ------------- -------------Profit on ordinaryactivities after taxation 626 698 95Dividends (226) (226) (677) ------------- ------------- -------------Retained profit/(loss) forthe period 400 472 (582) ============= ============= =============Earnings per share 5 3.05p 3.40p 0.46pDiluted earnings per share 5 3.05p 3.40p 0.46pDividends per share 1.10p 1.10p 3.30p Consolidated balance sheet as at 30 April 2005 30 April 2005 1 May 2004 30 Oct 2004 (restated) (restated) ------------- ------------- ------------- £000 £000 £000Fixed assetsIntangible assets 1,052 1,117 1,089Tangible assets 21,904 23,687 22,955Investments 28 29 28 ------------- ------------- ------------- 22,984 24,833 24,072 ------------- ------------- -------------Current assetsStocks 9,637 10,241 11,440Debtors due after one year 73 86 76 due within one year 6,174 6,563 6,403 ------------- ------------- ------------- 6,247 6,649 6,479Cash at bank and in hand 108 111 113 ------------- ------------- ------------- 15,992 17,001 18,032Current liabilitiesCreditors: amountsfalling due within one year (9,406) (9,017) (10,627) ------------- ------------- -------------Net current assets 6,586 7,984 7,405 ------------- ------------- -------------Total assets lesscurrent liabilities 29,570 32,817 31,477Creditors: amountsfalling due after morethan one year (4,750) (6,500) (7,000) Provisions forliabilities and charges (622) (817) (672) ------------- ------------- -------------Net assets excludingpension liability 24,198 25,500 23,805Pension liability (5,347) (3,312) (5,347) ------------- ------------- ------------- Net assets includingpension liability 18,851 22,188 18,458 ============= ============= =============Capital and reservesCalled up share capital 1,026 1,026 1,026Share premium account 440 437 440Revaluation reserve 3,891 3,944 3,916Capital redemptionreserve 242 242 242ESOP reserve (61) (58) (54)Profit and loss account 13,313 16,597 12,888 ------------- ------------- -------------Equity shareholders'funds 18,851 22,188 18,458 ============= ============= ============= Consolidated cash flow statement for the26 weeks ended 30 April 2005 26 weeks to 26 weeks to 52 weeks to 30 April 2005 1 May 2004 30 Oct 2004 (restated) (restated) ------------- ------------- ------------- £000 £000 £000 £000 £000 £000Cash flow fromoperating activities 2,922 3,530 3,941 Returns on investments andservicing of financeInterest received 4 4 15Interest paid (126) (124) (277) ------- ------- ------- (122) (120) (262)TaxationUK corporation tax 23 (62) (29)Capital expenditure andfinancial investmentSale of investment - 2 2Purchase of tangiblefixed assets (314) (516) (1,286)Sale of tangiblefixed assets - 10 13 ------- ------- ------- (314) (504) (1,271)Equity dividends paid (451) (451) (677) ------- ------- -------Cash inflow beforefinancing 2,058 2,393 1,702 Finance - long term bank loans (2,250) (2,500) (2,000) - issue of ordinary shares - - 3 - investment in own shares - (38) (38) ------- ------- ------- (2,250) (2,538) (2,035) ------- ------- -------Decrease in cash during the period (192) (145) (333) ======= ======= ======= Notes to consolidated cash flow statement Reconciliation of operating profit to net cash flow from operating activities 26 weeks to 26 weeks to 52 weeks to 30 April 2005 1 May 2004 30 Oct 2004 (restated) (restated) ------------- ------------- ------------- £000 £000 £000 Operating profit 1,291 1,447 455Depreciation 1,365 1,459 2,960Amortisation of goodwill 37 38 66Profit on sale of fixedassets - (5) (7)Decrease in stocks 1,803 2,814 1,615Decrease in debtors 232 324 493Decrease in creditors (1,806) (2,547) (922)Increase in actuarial debtor - - (719) ------------- ------------- ------------- 2,922 3,530 3,941 ============= ============= ============= Reconciliation of net cash flow to movement in net debt 26 weeks to 26 weeks to 52 weeks to 30 April 2005 1 May 2004 30 Oct 2004 ------------- ------------- ------------- £000 £000 £000 Decrease in cash in theperiod (192) (145) (333)Cash outflow from decreasein net debt 2,250 2,500 2,000 ------------- ------------- -------------Movement in net debtin period 2,058 2,355 1,667Net debt at beginningof period (7,507) (9,174) (9,174) ------------- ------------- -------------Net debt at end of period (5,449) (6,819) (7,507) ============= ============= ============= Analysis of net debt 26 weeks to 26 weeks to 52 weeks to 30 April 2005 1 May 2004 30 Oct 2004 ------------- ------------- ------------- £000 £000 £000 Cash at bank and in hand 108 111 113Overdraft (807) (430) (620) ------------- ------------- ------------- (699) (319) (507)Debt due after one year (4,750) (6,500) (7,000) ------------- ------------- ------------- (5,449) (6,819) (7,507) ============= ============= ============= Statement of total recognised gains and losses 26 weeks to 26 weeks to 52 weeks to 30 April 2005 1 May 2004 30 Oct 2004 (restated) (restated) ------------- ------------- ------------- £000 £000 £000Profit for the financial period 626 698 95Actuarial loss - - (3,556)Deferred tax on pension schemelosses - - 873 ------------- ------------- -------------Total recognised gains/(losses)relating to the period 626 698 (2,588) ============= ============= ============= Reconciliation of movements in consolidated shareholders' funds 26 weeks to 26 weeks to 52 weeks to 30 April 2005 1 May 2004 30 Oct 2004 (restated) (restated) ------------- ------------- ------------- £000 £000 £000Profit for the financialperiod 626 698 95Dividends (226) (226) (677) ------------- ------------- -------------Retained profit/(loss) forthe period 400 472 (582)ESOP (7) (37) (33)Proceeds of share issue - - 3Actuarial balance - - (2,683) ------------- ------------- -------------Net increase/(decrease) inshareholders' funds 393 435 (3,295)Opening shareholders' funds 18,458 21,753 21,753 ------------- ------------- -------------Closing shareholders' funds 18,851 22,188 18,458 ============= ============= ============= Notes 1. In accordance with the requirements of the amendment to FRS 5 (Application Note G: Revenue Recognition) issued on 13 November 2003 turnover excludes the non-commission element of sales made by concession outlets. All the Company's turnover is derived from retail sales made in the UK. 26 weeks to 26 weeks to 52 weeks to 30 April 2005 1 May 2004 30 Oct 2004 ------------- ------------- ------------- £000 £000 £000 Gross sales 57,895 59,300 109,598 VAT (8,247) (8,443) (15,654) ------------- ------------- ------------- 49,648 50,857 93,944 Agency sales less commission (15,416) (14,686) (28,645) ------------- ------------- ------------- Turnover 34,232 36,171 65,299 ============= ============= ============= 2. The Board have decided to adopt FRS 17 with effect from 30 October 2004. Comparatives have been restated. 26 weeks to 26 weeks to 52 weeks to 30 April 2005 1 May 2004 30 Oct 2004 ------------- ------------- ------------- £000 £000 £000 Administrative expenses: prior to restatement (16,522) (16,979) (33,665) SSAP 24 charge adjustment (66) 242 483 FRS 17 charge (165) (205) (587) ------------- ------------- ------------- Administrative expenses: after adopting FRS 17 (16,753) (16,942) (33,769) ============= ============= ============= Other finance charges: prior to restatement - - - Other finance charges: adopting FRS 17 (107) (35) (71) ------------- ------------- ------------- Total other finance charges (107) (35) (71) ============= ============= ============= 3. For the 26 week period under review, corporation tax has been based on an effective rate of 42% (2004 45%).4. There is no material difference between the results as disclosed above and the results on an unmodified historical cost basis.5. The calculation of earnings per share is based on profit after taxation of £626,000 (1 May 2004: £698,000, 30 October 2004: £95,000 both restated) and on 20,524,797 (1 May 2004: 20,520,579, 30 October 2004: 20,521,029), being the weighted average number of ordinary shares in issue during the period. The weighted average number of shares used in the calculation of diluted earnings per share is 20,524,797 (1 May 2004: 20,529,416, 30 October 2004: 20,521,029).6. The prior year adjustment relates to the implementation of FRS 17 - Retirement Benefits. The adoption of FRS 17 has resulted in an increase in the reported profit before tax for the 6 months ended 1 May 2004 of £2,000 and a decrease in reported profit before tax for the year ended 30 October 2004 of £175,000. £000 £000 Shareholders' funds as at 1 November 2003 as stated in the last annual report 27,069 Prior year adjustments: - Pensions : FRS 17 deficit (4,374) Related deferred tax 1,062 Pension prepayment reversal (2,863) Related deferred tax 859 -------- (5,316) ---------- Shareholders' funds restated on 1 November 2003 21,753 ========== This relates to the implementation of FRS 17 whereby the net FRS 17 pension deficit is required to be shown on the balance sheet and the pension prepayment as at 1 November 2003 is written off. 7. The interim statement has been prepared on the basis of the accounting policies set out in the Group's 2004 financial statements with the exception of the adoption of FRS 17 in relation to pension accounting. The statement was approved by the board on 22 June 2005 and has been reviewed by the Company's auditors. Their report is set out on page 5. The results for the year ended 30 October 2004 have been extracted from the statutory financial statements which have been filed with the Registrar of Companies. The auditors' report on those financial statements was unqualified and did not contain any statement under Section 237 of the Companies Act 1985. The unaudited profit and loss account for the twenty-six weeks to, and the unaudited balance sheet as at, 30 April 2005 do not amount to full accounts within the meaning of section 240 of the Companies Act 1985 and have not been delivered to the Registrar of Companies. The interim statement will be sent to shareholders. Further copies may be obtained from the company secretary, Beale PLC, The Granville Chambers, 21 Richmond Hill, Bournemouth, BH2 6BJ. This information is provided by RNS The company news service from the London Stock Exchange