Brown Group Regulatory News (BWNG)

29 Apr 2008 07:01

Brown (N.) Group PLC29 April 2008 29 April 2008 N Brown Group plc PRELIMINARY RESULTS ANNOUNCEMENT FOR THE YEAR ENDED 01 MARCH 2008 N Brown Group plc, the internet and catalogue home shopping company, todayannounces its full year results for the 53 weeks to 01 March 2008. Highlights: • Group revenue up at £610.9m +16.6% • Group operating profit from continuing operations up at £91.8m +20.3% • Group profit before tax up at £78.0m +19.4% • Like-for-like sales up +12.5% • E-commerce sales up at £168m +50.0% • Earnings per share from continuing operations up at 20.75p +30.8% • Final dividend up at 6.41p +20.0% • Current trading for the eight weeks ended 26 April up +12.1% • Confident outlook for 2009 Lord Alliance of Manchester, CBE, Chairman, added: "Our core strategy of focusing on niche customers and products has been successful during the recent difficult market conditions across thesector as a whole, and we are delighted to announce good results for 2008. Withan encouraging start to the new financial year, together with the continueddevelopment of our e-commerce activities and improvement to our portfolio of catalogues, I am confident we will make further progress this year." Alan White, Chief Executive, said: "The key to our excellent results has been the strength of our various brands,from the established successes such as Simply Be and JD Williams to thenewly-launched Marisota and Jacamo. We are continuously looking to improve thequality of our catalogues and websites and increase our product ranges to makeour brand offering even more attractive. The strategy we have in place, togetherwith our strong management and operational team, means we are well positioned todeliver another good performance this year." -Ends- For further information please contact: N Brown Group plcAlan White, Chief Executive On the day: 0207 554 1400Dean Moore, Finance Director Thereafter: 0161 238 2202Website : www.nbrown.co.uk---------------------------- Gavin Anderson & CompanyFergus Wylie / Clotilde Gros / Paula McBride Tel: 020 7554 1400 CHAIRMAN'S STATEMENT The Group has achieved record results for the 53 weeks ended 1 March 2008 andhas also made a good start to the new financial year. To reflect this, and ourongoing confidence in our business strategy, the directors are proposing a 20%increase in the final dividend. Group Group revenue from continuing operations for the year is up by 16.6% to £610.9mand operating profit is up by 20.3% to £91.8m. On a like-for-like basis salesare up 12.5% excluding the benefit of the 53rd week in this year which generatedadditional revenue of £12.5m and £1.9m of operating profit. Earnings per sharefrom continuing operations are up by 30.8% to 20.75p, benefiting both fromongoing profit growth and also the return of value to shareholders andassociated consolidation of share capital in March 2008. The directors areproposing a 20% increase in the final dividend to 6.41p, making a total for theyear of 9.06p (up 20.3%), covered 2.3 times. Net borrowings at the year-end stood at £199.4m, an increase of £95.4m on lastyear, due to the £80m return of value to shareholders, and £15m specialcontribution to the pension fund, which had a deficit of only £5.8m at 1 March2007. The group has committed borrowing facilities of £320m which are in placeuntil 2012. Net interest payable on borrowings was covered 5.9 times, andgearing is 80% (2007, 51%) based on net assets of £248.5m (2007, £202.5m). Home Shopping Highlights Key highlights have been the increase in our customer base, partly by the launchof new brands, expansion of our product ranges and growth of the online channel.The results are especially pleasing given the strange weather patterns, thegeneral economic downturn and the impact on the business of the Royal Maildispute in October 2007. The ongoing improvements in customer service and ouroperating efficiency have allowed us to invest in higher levels of customerrecruitment, yet still increase the operating margin by 0.4% to 15.0%. Customers The size and quality of our customer database is a core strength of thebusiness, and in the year the overall number of established customers withactive accounts increased by 5%. In addition there was an 8% increase in averagespend per established customer. Sales resulting from our new customerrecruitment have increased by 15% for the year, following the significantinvestment that has been made to enhance the database, and we have launched anumber of new brands to extend our offers to a wider audience. These includeSimply Yours, a younger, outsize lingerie range, Marisota, offering a completesize proposition of contemporary clothing for confident women, and Jacamo,providing clothing and footwear for younger, larger men. The results from thesenew launches are encouraging and will be developed further in the coming year. This growth has been achieved across all our brands, and whilst our mid-lifetitles, targeting customers aged 45-65, remain the most significant in volumeterms and grew by a creditable 14%, the fastest growing have been our youngertitles catering for the larger woman under 45 where sales are up by 24%. Product Ranges Sales growth has been seen across all our major categories, and we continue toincrease both the breadth and depth of the range. Ladieswear sales were up 18%from a wider choice of size fittings and ongoing development of exclusiveproduct from designers, such as Anna Scholtz, and more branded lines. Footwearsales are up by 12% as we continue to offer the market-leading range in widerfittings. Although menswear currently accounts for just 8% of our total sales ithas grown by 24% in the year and is an area where we see future opportunities.Strong electrical sales in particular have contributed to home and leisure salesgrowing by 14%, now accounting for 27% of total revenue. Online Sales In the last 12 months our online sales have grown by 50% and now represent 28%of all sales, compared with 22% last year, as customers of all ages gainconfidence with online shopping. Ongoing improvements to web functionality,alongside internet-only product offers and promotions, are driving online ordervalues to be 25% higher than those taken by telephone, which, in addition tocost savings achieved through bypassing the contact centre, have generatedoperational efficiencies. The internet is additionally providing an effective recruitment channel andfurther developments are in place to exploit this. Our new brands have achieveda notably strong internet penetration. Gross and Operating Margins Due to the planned changes in customer and product mix we anticipated areduction in the gross margin, and the fall of 0.3% to 55.3% was better thanexpected. This drop was more than offset by lower costs achieved as a result ofthe higher online penetration and lower distribution costs, resulting in anincrease in the operating profit margin by 0.4% to 15.0%. Service For the Autumn/Winter 2007 season, we achieved our highest ever level ofcustomer satisfaction, which was reflected in a lower rate of goods returned bycustomers. In May 2007 the £10m project to extend the bulk and hanging garmentwarehouses at our Hadfield site was completed successfully which is helping toimprove productivity and speed up the time taken to despatch customers' orders.Later this year it will enable the integration of Gray & Osbourn's operations,which are currently outsourced, to further drive cost efficiencies. Current Trading and Outlook Home shopping sales for 8 weeks to 26th April 2008 are up by 12.1% on the sameperiod last year continuing the trends from the prior year. As expected the rateof gross margin has reduced by 0.4% compared to last year due to product andcustomer mix, and we would expect this to be the situation throughout the year.The proportion of sales transacted over the internet in this period was 31%, anincrease of 42% in value. Despite the current economic climate, the board believes there are a number ofreasons why the business is well placed to continue to outperform the retailsector as a whole. Firstly the age and socio-demographic distribution of ourcustomer base means it is less impacted by higher interest rates. In additionthe increased strength of the customer database, coupled with the potential fromthe roll-out of our new brands, gives us a firm foundation for the year. Theupward trend in online penetration will also continue to deliver incrementaldemand and cost savings, complementing the ongoing development of catalogues andproduct ranges. As a result the board remain confident that the management and staff, who haveperformed very well over the last year, can deliver another good performancethis year. Lord Alliance of Manchester, CBE29 April, 2008 CHIEF EXECUTIVE'S REVIEW Home Shopping Summary The results for the 53 weeks to 1 March 2008 continue to demonstrate thesuccessful implementation of our strategy to focus on niche customers andproducts. Sales were £610.9m, up by 16.6% on last year and operating profit fromcontinuing businesses was £91.8m, an increase of 20.3%. On a like-for-likebasis, sales were up by 12.5% excluding the benefit of the 53rd week whichcontributed an additional £12.5m of revenue and an extra £1.9m operating profit.The increases in sales across all customer and product groups, alongside recordcustomer satisfaction levels and ongoing reductions in major operating costs,are encouraging, as is the strong growth of our e-commerce activities. We have invested significantly more in marketing and recruitment costs duringthe year but the efficiency we have achieved in our operating costs has led toan overall 0.4% increase in the operating margin to 15.0%. The good start to the new financial year demonstrates that our home shoppingportfolio of catalogues and websites is in good shape and is well placed forfurther progress. Customer Groups We have a range of twenty different propositions to which we recruit customers,with each having a target customer profile, or product focus. We group them forsimplicity in three age bands: - Younger - targeting customers under 45.- Mid-life - targeting customers aged 45-65.- Older - targeting customers over 65. In the last year, the younger customer group has been the fastest growing withsales up 24% to £168m. Fashion World, which has the highest sales in thiscategory by targeting value-conscious customers in their forties, had stronggrowth, but the key driver has been Simply Be with sales growth of 39%. SimplyBe caters for female customers in their thirties who want fashionable clothingin sizes 14 to 32, but find it hard to buy clothes on the high street to fit. Wehave continued to expand the product range, notably with the introduction ofbrands such as Joe Browns and Ben Sherman, where we have exclusivity in largersizes. To complement the Simply Be brand we have also launched Simply Yours,recruiting customers to a younger lingerie catalogue. Additionally we havecreated and launched Jacamo for younger, but larger, fashion conscious men. Theinitial results from these new brands are encouraging with customer recruitmentlevels, repeat order rates, and online penetration all beating their targets. Our mid-life brands are the largest group, with sales of £415m, representing 68%of group sales. Despite these being our most established brands, we have seensales growth of 14%, with particularly strong performances from JD Williams,Ambrose Wilson, Oxendales and Premier Man. These customers love to shop from ourcatalogues and websites, for our range of stylish, comfortable clothing andfootwear which is almost invariably available in their size, length or fitting.To further develop this group we launched Marisota in the autumn/winter 2007season. It is targeted at middle-aged women who are not currently home shoppers,and who we can attract through a contemporary clothing offer which emphasisesthe wide range of sizes, lengths, colours and fittings. The early results fromMarisota have exceeded initial expectations and further investment is plannedfor 2008/9. In June 2006 we acquired Gray & Osbourn, an upmarket ladieswear catalogue inthis mid-life group, specialising in German branded merchandise. Growth fromthis has been exceptionally strong, with sales for the full twelve months of£25m, compared with £12m in the eight months in the previous year. The third group of catalogue brands is the older group which includes HeatherValley and Special Collection. These customers delivered sales of £28m, up by12%, and account for 5% of total sales. Sales growth has been driven from both our established customers (who havepurchased in previous years) and new customers (those recruited during theperiod). We have an established database of over five million customers who haveordered in the past two years and in the period we saw an increase in activecustomers of 5%, coupled with an 8% increase in average spend per customer. Due to the operating cost efficiencies being driven across the business as awhole, we have been able to invest significantly in new customer recruitment,both for the established brands and the new launches of Simply Yours, Marisotaand Jacamo. The sales from newly recruited customers in the year rose by 15%,and we are experiencing improved second order rates due to the investment inmore targeted advertising, albeit at a marginally higher initial cost peracquisition, as we switch from individual product advertisements to promotion ofour unique selling propositions. This includes a dramatic increase in customersrecruited through search engine marketing. Product Groups Our core selling points are around size and fit, and in the year we havecontinued to extend the range we offer with a 20% increase in options to over180,000. We can service such an extensive range by operating from twocentralised warehouses. Ladieswear sales increased by 18% to £332m and account for 54% of the total. Ourextensive range of sizes go up to size 38, and over half our ladieswear salesare in size 20 or above where availability on the high street is limited. Therange continues to be expanded with more length options on skirts and trousersand even swimwear is now available in two lengths. Younger fashion has grown dueto strong Simply Be sales and our casual ranges which offer great fashion andvalue. With improved presentation in both our Wardrobe and Joanna Hope ranges wesaw impressive sales growth in smartwear, and the expanded sportswear range isproving highly popular. We have also launched a fast fashion range, with newproducts designed and then featured on our websites within eight weeks. As wellas generating its own sales stream, it gives a strong indicator as to trends andwinning lines, which can be incorporated into future editions of the catalogue. The corsetry and lingerie ranges now feature bra sizes from 32A up to 56L, withan unsurpassed array of styles and colours. The younger styles have again beenexpanded to support the development of the Simply Yours brand and in particularwe have introduced more branded merchandise. Last year our lingerie was heavilyfeatured on Channel 4's "How To Look Good Naked". Within footwear we are the market leader in wide fittings and new developmentshave included a multi-fit range, with variable insoles allowing a perfect fit,and boots available in up to four calf fittings. Footwear sales have grown by12% in the year, with success in both the core ranges and the introduction ofstyles suited to the younger Fashion World and Simply Be customers. Menswear has continued to grow with sales of £46m, up by 24%, driven both by ourmid-life Premier Man and Southbay ranges and our more fashionable Resume range.Although menswear accounts for only 8% of our total sales at present, it is akey area for future development. The launch of Jacamo in August 2007 wasdesigned to gain an increased share of the younger menswear market, and involvedacquiring more branded lines in larger sizes. Home and leisure sales have grown by 14% and now account for 27% of total sales.Our extended gift range for Christmas proved successful and further developmentsare planned for 2008/9. We have seen strong electrical sales as our customersadopt newer technologies such as digital television and radio, personalcomputers and satellite navigation systems. In addition we have successfullyexpanded the home and leisure range for younger customers with the Simply BeHome catalogue which has a more contemporary collection of home decor and gardenproducts. A key part of our strategy is to encourage customers to trade across ourdepartments and the main measure is the proportion of customers who purchasesomething during the year from each of the ladieswear outerwear, underwear andfootwear ranges. This has increased to 14% through an active cross-sellingprogramme which in turn will drive higher spend per customer and loyalty infuture seasons. Managing the multiplicity of catalogues, brochures, leaflets and online offerswith such a large range of product options is core strength of the business andwe have succeeding in delivering high service yet low dormancy levels. The achieved gross margin is a complex mix, based on the performance ofdifferent product and customer segments, including the financial income and baddebts arising from sales on credit. For 2007/8, the reduction in gross margin by0.3% to 55.3% was better than we had anticipated based on the change in thismix. Credit Most of our customers have a credit account but less than half incur anyinterest charges as they pay their balance in full. Our credit scoring policyhas increased credit limits to established customers through behaviouralscoring, and assisted new customer recruitment through increased acceptance atmarginal levels. Although this has increased bad debt, this is in line with ourplan and the strategy continues to prove profitable. We are monitoring ourportfolio very closely for any signs of degradation but to date there have beenno significant changes after allowing for the influx of new customers and themix of the active customer base. Overall debtors at the end of the year hadincreased by 13% to £389m. E-Commerce A key element of our success this year has been the increase in our online salesto £168m, accounting for 28% of total sales compared to 22% last year. This isan increase of 50% on the prior year. The increase is driven by customers of allages becoming more confident in shopping online. The websites are activelypromoted to established customers through the more traditional, paper basedcommunications we send out, as well as using the channel as an effectiverecruitment vehicle for new customers. The internet brings a number of benefits to us, and is proving highly costeffective. The average order value online is 25% higher than for orders placedoffline as customers find it easy to browse our many websites, taking theironline basket with them. Once an online shopper, we then see a customer'sfrequency of order increase due to the convenience the channel offers, and weutilise e-mail marketing campaigns extensively to generate incremental demand ata low promotional cost. During the year we have again invested heavily in improving the capacity andfunctionality of our websites, and the new features are encouraging customers tospend longer periods logged on to our websites which generates additionalrevenue. Encouragingly, our developing younger brands and new launches, which have allbeen backed with a web offering, are seeing very strong online penetration. Forexample, 60% of Simply Be's sales are online and this is 69% for Jacamo. Service and Costs For the Autumn/Winter 2007 season we achieved our highest ever level of customersatisfaction as measured through ongoing service questionnaires. Thisdemonstrates continued satisfaction with our products, which is also reflectedin a 0.3% reduction in the rate at which customers return goods as a result ofproduct quality and fit improvements. Additionally, the customer satisfactionlevel shows that the service delivered by our call centre and fulfilmentlogistics teams is improving. A key measure is that the proportion of enquiriesmade by our customers actually fell from the previous year. In May 2007 we completed a £10m project developing our Hadfield warehouse, whichhas increased bulk and hanging garment capacity, and allowed a faster deliveryto customers. We are also in the process of migrating the courier deliveryservice from TNT Post to Parcelnet, following TNT's exit from the low costparcel network. Courier delivery currently accounts for around 70% of deliveriesand the move to Parcelnet will be complete by mid-2008 with better servicelevels anticipated for no additional cost. Distribution costs in the year have only increased by 12.5% primarily due to thecollation benefits achieved on the back of higher order values, mainly via theweb, and improved stock availability. Management We have strengthened the operating board in the last few months with threesenior appointments. Mark Cheshire joined as Customer Service Director, PaulKendrick as Group Development Director and Neil McGowan as InformationTechnology Director. Environment We take the impact our business has on the environment seriously and haveinstigated a number of initiatives to reduce our carbon footprint. For example,75% of group waste is now re-cycled, compared to just 25% in 2005/6, and we aimto move this to 85% by the end of 2008. Despite the growth of the business, andthe increases in volumes and working hours at our warehouses, we have maintainedgas and electricity consumption at previous years levels, and this year willmigrate to 100% Green Energy. Zendor In December 2007 we completed the disposal of non-core activities with the saleof Zendor to GSi Luxembourg S.a.r.l. The net proceeds in cash, includingrepayment of inter-company loans, was £3.6m and allows the group to focusexclusively on its core home shopping business. Current Trading and Prospects The development of our established home shopping brands and the launch of newtitles, have given us a good platform for the future. This is evidenced by thesales for the 8 weeks to 26th April 2008 which are up by 12.1% with the growthspread across all customer and product groups. The rate of gross margin has reduced by 0.4% due to the mix of turnover slightlyfavouring new customers and our younger brands for the 30-45 age group. Howeverwe expect to achieve further operational cost savings from the increasingproportion of online sales during the year. The demographic trends continue to benefit our business, with the customerpopulation aged 45+ forecast to grow steadily over the medium term, and we arewell positioned through our range of brands and niche products to capitalise onthis. Moving forward we will continue to grow the business by recruiting newcustomers, increasingly through the internet, and increasing the spend ofestablished customers, as we encourage them to shop across our various productranges. All the new brands launched in 2007 have shown strong early results and activityon these will be increased in 2008/9. Additionally we have acquired theNightingales brand and customer file from the administrators. This will add toour older catalogue group with a more upmarket, traditional ladieswear range,and the first catalogue has our expectations. The product ranges have been significantly expanded in recent years, and theexclusive product is proving highly popular. We will build on the designerranges featured and have also launched a ladieswear range with Caryn Franklinwithin our spring/summer catalogues. Following the success of the home andleisure Christmas range, we will be rolling out an all-year round gift offeringunder thebrilliantgiftshop.co.uk brand. The internet is the channel of choice for a large proportion of our customers,and we will continue to invest in an ongoing development programme. Improvementswill include enhanced search engine optimisation to make online customerrecruitment even more effective, and improving the online experience throughbetter product presentation and guided navigation, which in turn should improvevisitor/order conversion levels. As we continue to seek improvements in the way we deal with customers, we willoffer a differentiated service within our contact centres dependent on brand.Initially this is being trialled on Nightingales, Gray & Osbourn and House ofBath. The combination of the demographic trends, strength of our database, rollout ofthe new titles, expansion of the product ranges, investment in our e-commerceactivities and improvement to our customer service give us confidence that thebusiness will make further progress in the 52 weeks to 28th February 2009. Alan White29 April 2008 Unaudited consolidated income statement 53 weeks to 52 weeks to 01-Mar-08 24-Feb-07 Note £m £m Revenue - continuing operations 2 610.9 523.8 ---------- --------- Operating profit - continuing operations 2 91.8 76.3 Investment income 4.2 2.7Finance costs (19.8) (11.3) Fair value adjustments to financial 1.8 (2.4)instruments ---------- --------- Profit before taxation 78.0 65.3 Taxation (22.2) (18.5) ---------- ---------Profit for the year from continuing 55.8 46.8operations Profit/(loss) for the year from 3 1.1 (1.1)discontinued operations ---------- --------- Profit attributable to equity 56.9 45.7holders of the parent ---------- --------- Earnings per share from continuing operations 5Basic 20.75 p 15.86 pDiluted 20.67 p 15.77 p Earnings per share from continuingand discontinued operations 5Basic 21.16 p 15.48 pDiluted 21.08 p 15.40 p Unaudited consolidated statement of recognised income and expense 53 weeks to 52 weeks to 01-Mar-08 24-Feb-07 £m £m Exchange differences on translation offoreign operations 0.8 0.4Actuarial gains on defined benefit pension 7.9 8.3schemes Tax on items recognised directly in equity (1.0) (0.5) ---------- ---------Net income recognised directly in equity 7.7 8.2 Profit for the year 56.9 45.7 Recognised income for the year attributable ---------- ---------to equity holders of the parent 64.6 53.9 ---------- --------- Unaudited consolidated balance sheet 01-Mar-08 24-Feb-07 £m £mNon-current assetsIntangible assets 30.9 30.9Property, plant & equipment 70.5 68.9Deferred tax assets 7.1 11.3 ---------- --------- 108.5 111.1 ---------- --------- Current assetsInventories 68.1 54.9Trade and other receivables 406.2 359.2Derivative financial instruments 0.1 -Cash and cash equivalents 50.8 40.0 ---------- --------- 525.2 454.1 ---------- --------- ---------- ---------Total assets 633.7 565.2 ---------- --------- Current liabilitiesBank overdrafts (0.2) (0.2)Trade and other payables (103.6) (83.7)Derivative financial instruments - (1.7)Dividends declared - (79.9)Current tax liability (13.2) (18.6) ---------- --------- (117.0) (184.1) ---------- --------- Net current assets 408.2 270.0 ---------- --------- Non-current liabilitiesBank loans (250.0) (143.8)Retirement benefit obligation (5.8) (27.7)Deferred tax liabilities (12.4) (7.1) ---------- --------- (268.2) (178.6) ---------- --------- ---------- ---------Total liabilities (385.2) (362.7) ---------- --------- ---------- ---------Net assets 248.5 202.5 ---------- --------- EquityShare capital 30.0 29.6Share premium account 11.0 10.3Own shares (0.1) -Foreign currency translation reserve 1.2 0.4Retained earnings 206.4 162.2 ---------- ---------Total equity 248.5 202.5 ---------- --------- Unaudited consolidated cash flow statement 53 weeks to 52 weeks to 01-Mar-08 24-Feb-07 £m £m Net cash from operating activities 31.7 42.8 Investing activitiesPurchases of property, plant and equipment (8.8) (12.9)Purchases of intangible assets (6.7) (8.0)Acquisition of subsidiary - (7.3)Disposal of subsidiary 3.3 -Interest received 1.5 1.0 ---------- ---------Net cash used in investing activities (10.7) (27.2) ---------- --------- Financing activities Interest paid (16.2) (8.0)Dividends paid (101.4) (19.6)Increase in bank loans 106.2 -Proceeds on issue of share capital 0.7 0.5Proceeds on issue of shares held by ESOT 0.5 0.4 ---------- ---------Net cash used in financing activities (10.2) (26.7) ---------- --------- Net increase/(decrease) in cash and cashequivalents 10.8 (11.1)Opening cash and cash equivalents 40.0 51.1 ---------- ---------Cash and cash equivalents at end of year 50.8 40.0 ---------- --------- Reconciliation of operating profit to net cash from operating activities 53 weeks to 52 weeks to 01-Mar-08 24-Feb-07 £m £m Operating profit from continuingoperations 91.8 76.3Operating profit/(loss) from discontinuedoperations 0.4 (1.6) Adjustments for:Depreciation of property, plant andequipment 5.7 5.1Amortisation of intangible assets 6.7 7.0Share option charge 1.7 1.2 ---------- --------- Operating cashflows before movements inworking capital 106.3 88.0 Increase in inventories (13.2) -Increase in trade and other receivables (50.8) (32.5)Increase in trade and other payables 23.0 1.4Pension obligation adjustment (14.5) 0.1 ---------- --------- Cash generated from operations 50.8 57.0 Taxation paid (19.1) (14.2) ---------- ---------Net cash from operating activities 31.7 42.8 ---------- --------- Notes to the unaudited consolidated financial statements 1. Basis of preparation The group's financial statements for the 53 weeks ended 1 March 2008 will beprepared in accordance with International Financial Reporting Standards (IFRS)as adopted for use in the EU. Whilst the financial information included in thispreliminary announcement has been computed in accordance with IFRS thisannouncement does not itself contain sufficient information to comply with IFRS.The company expects to publish full financial statements that comply with IFRSby 30 May 2008. 2. Segmental analysis 53 weeks to 52 weeks to 01-Mar-08 24-Feb-07 £m £m Analysis of revenue Continuing operationsHome shopping 610.9 523.8 ---------- --------- Analysis of operating profit Continuing operationsHome shopping 91.8 76.3 ---------- --------- 3. Discontinued operations 53 weeks to 52 weeks to 01-Mar-08 24-Feb-07 £m £mRevenueFulfilment 8.7 10.0Door to door selling - 4.6 ---------- --------- 8.7 14.6 ---------- --------- Operating profit/(loss)Fulfilment 0.4 0.1Door to door selling - (1.7) ---------- --------- 0.4 (1.6) Profit on disposal of discontinuedoperations 0.8 -Attributable tax (charge)/credit (0.1) 0.5 ---------- ---------Net profit/(loss) attributable todiscontinued operations 1.1 (1.1) ---------- --------- Notes to the unaudited consolidated financial statements 4. Disposal of subsidiary On 14 December 2007 the group sold the entire share capital of Zendor.com Limited, its third party fulfilment operation, for a net consideration of £1.7m. The net assets of Zendor.com Ltd at the date of disposal were as follows: £m Plant and equipment 1.5Trade and other receivables 4.6Cash and cash equivalents 0.3Trade and other payables (3.5)Loan from parent company (1.9)Current tax liability (0.1) ------------Net assets 0.9 Profit on disposal 0.8 ------------Total consideration 1.7 ------------ Satisfied by:Cash 2.3Directly attributable costs (0.6) ------------ 1.7 ------------ Net cash inflow arising on disposalCash consideration and loan repayment to parent company 3.6Cash and cash equivalents disposed of (0.3) ------------Net cash inflow 3.3 ------------ 5. Earnings per share The calculation of earnings per share from continuing operations is based on theprofit for the year from continuing operations of £55.8m (2007, £46.8m) and theweighted average number of shares in issue during the period of 268,869,000 (2007, 295,160,000). The calculation of earnings per share from continuing and discontinued operations is based on the profit attributable to equity holders of the parent of £56.9m (2007, £45.7m) and the weighted average number of shares in issue during the year of 268,869,000 (2007,295,160,000).For diluted earnings per share, the weighted average number of shares of 269,948,000(2007, 296,836,000) has been calculated after adjusting for the potential dilutive effect of outstanding share options. Notes to the unaudited consolidated financial statements 6. Reconciliation of equity 53 weeks to 52 weeks to 01-Mar-08 24-Feb-07 £m £m Total recognised income for the period 64.6 53.9Ordinary dividends paid (21.5) (19.6)B Share dividend declared - (79.9)Issue of ordinary share capital 1.1 1.2Purchase of own shares by ESOT (0.4) (0.7)Issue of own shares by ESOT 0.5 0.4Share option charge 1.7 1.2 ------------- ---------- Total movement during the year 46.0 (43.5) Equity at the beginning of the year 202.5 246.0 ------------- ----------Equity at the end of the year 248.5 202.5 ------------- ---------- 7. Dividends The final recommended dividend is proposed to be paid on 25 July 2008 toshareholders on the register at the close of business on 27 June 2008. 8. Non-statutory financial statements The financial information set out above does not constitute the group'sstatutory financial statements for the 53 weeks ended 1 March 2008 or the 52weeks ended 24 February 2007, but is derived from those financial statements.The financial statements for the 52 weeks ended 24 February 2007 have beendelivered to the Register of Companies. The auditors have reported on thosefinancial statements; their report was unqualified and did not contain anystatement under Section 237(2) or (3) of the Companies Act 1985. The auditorshave not reported on the financial statements for the 53 weeks ended 1 March2008, nor have any such financial statements been delivered to the Registrar ofCompanies. This report was approved by the Board of Directors on 29 April 2008. This information is provided by RNS The company news service from the London Stock Exchange