Bradda Head Lithium Regulatory News (BHL)

14 Jul 2005 07:00

4Less Group plc (The)14 July 2005 14th July 2005 The 4Less Group plc Preliminary results for the year to 31 March 2005 Key points • Gross profit increases 5% to £3.203 million (2004 : £2.905 million). • Group returned to profitability in current year following closure of non-profitable businesses and a restructuring of the core business operation and overhead. • Gross turnover increases by 5% to £335.4 million (2004 : £319.2 million). • Group net assets at year end of £1.194 million (2004 : £0.4 million). • Adequate cash resources to meet future trading requirements. Eric Peacock, Non-executive Chairman said: "The year under review saw the establishment of a sound operational base onwhich to develop the successful activities of the business. Having taken robuststeps to reorganise the activities and operations of the Group, the Group hasbecome profitable from the start of the current financial year". Contacts Nigel Paul Chief Executive OfficerThe 4Less Group plcTelephone: 020 7594 0515 Oliver CairnsCorporate SynergyTelephone: 020 7626 2244 CHAIRMAN'S STATEMENT Introduction I am pleased to report that we have now returned to profitability after the yearunder review which has been a difficult period for the Group. Following thepoor performance of the new ventures and activities of insurance and corporateservices, the Group conducted a full and detailed review of its activitiescommencing in December 2004. This review, which is now completed, resulted inthe Group refocusing its activities on the core operations of foreign currency,the arrangement of overseas mortgages and broking insurance products foroverseas home owners. As a result, the corporate services division was closed, and the underperformingCar Finance 4Less was sold to Charles McLeod at the end of the year underreview. Performance Gross turnover for the Group for the year under review was £335.4 millionrepresenting a 5 per cent. increase over the 2004 result. This resulted in agross profit of £3.2 million for the year, representing a 10.3 per cent.increase over the previous year. Continuing operations produced gross profitsof £3.1 million. The greatest effect of the review and the measures taken to return the Group toprofitability has been on the staffing and overhead structure of the business.Administrative expenses of £0.4 million have been eliminated by the closure ofbusinesses, and overhead and staff reductions in the continuing businesses haveresulted from the streamlining of operations, and improved efficiencies. Thenew structure will not affect the Group's ability to achieve improvedperformance across the continuing businesses. The directors have not recommended the payment of a dividend. The Board During the year there have been a number of changes to the Board of Directors.Nigel Paul, Finance Director, was appointed Chief Executive Officer in December2004. At the same time Ian Collins, Financial Controller, was appointed FinanceDirector. Charles McLeod, the founder of the business, has become anon-executive director with effect from the end of the financial year. GregBegley has left the Group. People Having undertaken a period of expansion of personnel, the reorganisation andrefocusing of the business on its core activities has resulted in a number ofredundancies across the Group. This has been a difficult time for the staff,but I remain impressed by the way they have dealt with the circumstances. Outlook The year under review saw the establishment of a sound operational base on whichto develop the successful activities of the business. Having taken robust stepsto reorganise the activities and operations of the Group, the Group has becomeprofitable from the start of the current financial year. We continue to improveall aspects of the Group's activities and can now look forward to the futurewith confidence. Eric Peacock CMG DLChairman CHIEF EXECUTIVE OFFICER'S REVIEW Introduction I am pleased to report the Group has returned to profitability for the firstthree months of the current financial year, following a year which has been adifficult one for the Group resulting in significant losses. The corebusinesses of foreign currency exchange and arranging overseas mortgagescontinued to grow and generate increased gross profits for the year. Followingour successful flotation on AIM in April 2004, the Group started the developmentof new business areas with the attendant increases in our cost base. Thesebusinesses regrettably did not perform in line with expectations. Furthermore,the Group bore significant one off costs associated with the intended expansionof all activities. In December 2004, we reassessed the Group's core prioritiesand implemented an overall restructuring to close non-profitable operations, andstreamline the administrative cost base of the core businesses in order toreturn the Group to profitability. The year also saw a complete review of the Group's anti-money launderingprocedures in conjunction with our specialist advisers, and the authorisation ofboth Property Finance 4Less Limited and FLG Insurance Brokers Limited under thenew FSA regulations. Following the release of our 6 months results in December 2004, I was appointedChief Executive Officer in order to co-ordinate the strategic review andimplement the turnaround strategies necessary to return the Group toprofitability. The Group addressed the issues in the last quarter of the yearunder review, closing non profitable businesses, making significantredundancies, implementing new remuneration and commission structures, andoutsourcing certain administrative functions such as human resource and healthand safety management. Trading Review Continuing operations Continuing operations produced a turnover of £335.2 million up from £318.9million in 2004 representing a 5 per cent increase, and generated a gross profitof £3.1 million up from £2.7 million in 2004 representing a 15 per cent.increase. The core foreign exchange business has achieved modest growth over the year.Both this activity and the property finance business saw a marked decline inactivity in the last quarter of the year, following the slowing of the UKproperty market at that time and the tragic events in the Indian Ocean on BoxingDay. This trend is now reversing in both businesses. We continue to expand theskills within the business and adapt the offering to suit the ever changingmarket place. Property Finance 4Less increased its turnover to £315,452 and generated a netprofit of £42,959. The market continues to develop for the overseas mortgageprovider and we continue to develop relationships with a range of banks andmortgage providers throughout Europe, America, South Africa, and Australia. FLG Insurance Brokers has been refocused solely on the provision of retailinsurance products to meet the requirements of property ownership overseas. Toenhance the development of FLG Insurance Brokers and to provide a comprehensiverange of insurance products to customers, we have recently entered into a jointventure with Healthcare International Limited, a company specialising inhealthcare insurance products to the ex-patriot communities around the world,and associated insurance products such as critical illness, mortgage protectionand travel insurance. Interest receivable, a fundamental income source for the business, increased by60 per cent. to £213,236 from £133,496. Administrative costs in the continuing businesses amounted to £3,539,056. TheGroup had increased its support structures and was faced with a high level oflegal and consultancy fees during the year. As part of the review andreorganisation these costs have been significantly reduced, without affectingthe Group's ability to meet its forecasts for the forthcoming year. Discontinued businesses The discontinued businesses of Corporate Services and Car Finance 4Less producedoperating losses of £262,335. The activities of Corporate Services have beenclosed and Car Finance 4Less was sold to Charles McLeod, producing a profit ondisposal of £35,269. During a period of reorganisation there is inevitable uncertainty amongst staff,but the rapid execution of changes, and the undoubted skill, temerity anddiligence of all our staff, has let to the acceptance of difficult decisions.The costs of the reorganisation of the businesses, which is now complete,including the costs of redundancies and associated legal fees amounted to£199,221. The losses have resulted in a tax credit of £86,074 being received and lossesavailable to be set off against future profits have produced a further deferredtax asset of £89,319. In total the Group made post tax losses of £529,996. The future Having undertaken the re-organisation, the Group is now in a position tocontinue to develop the core business activities, and pursue organic growth andacquisition opportunities. Our infrastructure is capable of supporting thefuture development plans of the business, although we continue to enhancesystems and seek opportunities to further improve our administrative andorganisational procedures. We have identified a number of acquisitionopportunities and are looking forward to the future development of the Groupwith confidence. Nigel PaulChief Executive Officer CONSOLIDATED PROFIT AND LOSS ACCOUNTYEAR ENDED 31 MARCH 2005 2005 2004 Note Continuing Discontinued Continuing Discontinued Operations Operations Total Operations Operations Total £ £ £ £ £ £ Turnover 335,222,877 184,403 335,407,280 318,964,063 205,389 319,169,452 Cost of sales (332,166,149) (38,525) (332,204,674) (316,244,518) (19,980) (316,264,498) Gross profit 3,056,728 145,878 3,202,606 2,719,545 185,409 2,904,954 Administrative expense (3,539,056) (412,699) (3,951,755) (2,511,618) (224,900) (2,736,518) Operating (loss) / profit (482,328) (266,821) (749,149) 207,927 (39,491) 168,436 Interest receivable and 208,737 4,499 213,236 130,303 3,193 133,496similar income Interest payable and (5,511) (13) (5,524) (4,001) (10) (4,011)similar charges (279,102) (262,335) (541,437) 334,229 (36,308) 297,921 Exceptional Items Profit on sale of 35,269 -subsidiary (Loss) / profit before (506,168) 297,921Reorganisation Costs Reorganisation costs (199,221) - (Loss) / profit on (705,389) 297,921ordinary activitiesbefore taxation Taxation 175,393 (96,152) (Loss) / profit for the (529,996) 201,769financial year (Loss) / earnings per 1 (6.74p) 3.923pshare Diluted earnings per 1 (6.74p) 3.815pshare There were no other recognised gains and losses in the year. CONSOLIDATED BALANCE SHEET31 MARCH 2005 2005 2004 £ £ £ £FIXED ASSETSTangible 247,084 299,516 247,084 299,516 CURRENT ASSETSDebtors 950,565 608,220Cash at bank and in hand 5,594,089 7,844,363 6,544,654 8,452,583 CREDITORS: amounts falling due (5,598,128) (8,310,208)within one year NET CURRENT ASSETS 946,526 142,375 TOTAL ASSETS LESS CURRENT LIABILITIES 1,193,610 441,891 NET ASSETS 1,193,610 441,891 CAPITAL AND RESERVESCalled up share capital 79,762 51,429Share premium account 1,414,187 160,805Profit and loss account (300,339) 229,657 EQUITY SHAREHOLDERS' FUNDS 1,193,610 441,891 COMPANY BALANCE SHEET31 MARCH 2005 2005 2004 £ £ £ £FIXED ASSETSTangible 246,716 288,708Investments 10 6 246,726 288,714 CURRENT ASSETSDebtors 1,058,581 664,519Cash at bank and in hand 5,488,407 7,784,558 6,546,988 8,449,077 CREDITORS: amounts falling due (5,591,742) (8,229,369)within one year NET CURRENT ASSETS 955,246 219,708 TOTAL ASSETS LESS CURRENT LIABILITIES 1,201,972 508,422 CAPITAL AND RESERVESCalled up share capital 79,762 51,429Share premium account 1,414,187 160,805Profit and loss account (291,977) 296,188 EQUITY SHAREHOLDERS' FUNDS 1,201,972 508,422 CONSOLIDATED CASH FLOW STATEMENTYEAR ENDED 31 MARCH 2005 2005 2004 £ £Reconciliation of operating (loss) / profit to net cash flow fromoperating activitiesOperating (loss) / profit (749,149) 168,436Reorganisation costs (199,221) -Disposal of assets to subsidiary 10,896 -Depreciation of tangible fixed assets 157,333 108,113Increase in debtors (213,083) (397,280)(Decrease) increase in creditors (2,556,248) 3,520,958 Net cash (outflow) inflow from operating activities (3,549,472) 3,400,227 CASH FLOW STATEMENT (note 22)Net cash (outflow) / inflow from operating activities (3,549,472) 3,400,227Returns on investments and servicing of finance 207,712 129,485Taxation - (35,189)Capital expenditure (121,231) (319,758)Disposal of subsidiary (68,998) - Cash (outflow) / inflow before financing (3,531,989) 3,174,765 Financing - net proceeds of flotation 1,281,715 - (Decrease) increase in cash in the period (2,250,274) 3,174,765 Reconciliation of net cash flow to movement in net funds (note 23)(Decrease) increase in cash in the period (2,250,274) 3,174,765 Net funds at 1 April 2004 7,844,363 4,669,598 Net funds at 31 March 2005 5,594,089 7,844,363 Note 1 EARNINGS PER SHARE Both basic earnings per share and diluted earnings per share are based on a lossafter tax of £529,996 (2004: Profit after tax £201,769). The basic earnings pershare has been calculated on a weighted average of 7,867,507 (2004: 5,142,805)ordinary shares in issue. Diluted loss and earnings per share is calculated onthe same basis as basic loss and earnings per share because the effect of thepotential ordinary shares (share options) reduces the net loss per share and istherefore anti-dilutive. For 2004, the diluted earnings per share has beencalculated on a weighted average of 5,288,452 of ordinary shares in issue andthe dilutive potential ordinary shares from warrants. Note 2 NATURE OF ACCOUNTS The financial information set out in the announcement does not constitute thecompany's statutory accounts for the year ended 31 March 2005 or 2004. Thefinancial information for the year ended 31 March 2004 is derived from thestatutory accounts for that year which have been delivered to the Registrar ofCompanies. The auditors reported on those accounts; their report wasunqualified and did not contain a statement under s237(2) or (3) Companies Act1985. The statutory accounts are expected to be sent to shareholders shortly. This information is provided by RNS The company news service from the London Stock Exchange