Ceps Regulatory News (CEPS)

16 May 2005 07:00

Dinkie Heel PLC16 May 2005 DINKIE HEEL PLC PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2004 Dinkie Heel plc (the "Company") announces its preliminary audited results forthe year ended December 31 2004. Highlights: • Profit before tax £74,000 (2003: loss £685,000) • Turnover £5.36m (2003: £5.63m) • Loss-making toecap business sold • Proposed name change • Net debt down by more than £1m • Shareholder funds of £475,000 (2003: deficit £802,000) Chairman Richard Organ said: "It is very pleasing to report that the Companyhas been able to produce its first profit since 1998. This is in stark contrastto this time last year when shareholders were being asked to vote on proposalsto rescue the Company from insolvency. "Your Board was successful in disposing of the loss making steel toecap activityin December to its management and thereby completing the last step in thereconstruction. Since the year end, I am pleased to report that the Company has continued tomake strategic progress. In February 2005, the Company raised a further£750,000 in a successful placing. This has been used to acquire 75% ofFriedman's, a converter of lycra for the dancewear, sportswear and swimwearmarkets, and also to strengthen the balance sheet. To reflect the new approach and direction of the Company, it will be proposed atthe annual general meeting that the name is changed to CEPS PLC, an abbreviationof Chelverton Equity Partners, a clear description of the future approach of thebusiness. The Board remains cautiously optimistic that the current year will show progressin profits with an added expectation of further acquisitions". For further information: Paul Quade, City Road Communications 020 7248 8010Geoff Martin, Dinkie Heel 0117 303 3404 Chairman's Statement It is very pleasing to report that the Company has been able to produce itsfirst profit since 1998. This is in stark contrast to this time last year whenshareholders were being asked to vote on proposals to rescue the Company frominsolvency. As shareholders are aware, the refinancing took place with a placing of95,800,000 new shares being issued at 1p per share to raise £958,000 andsimultaneously £330,000 of outstanding loan notes were converted into new sharesat the same price. The effect of this capital injection has been to transformthe financial strength of the Company. Your Board was successful in disposing of the loss-making steel toecap activityin December to its management and thereby completing the last step of thereconstruction. The consideration for the disposal was £145,000. The refinancing has enabled Davies and Odell to commence much needed investmentin key aspects of their businesses. The companies have excellent offshoresourcing arrangements and now need to spend time and money developing routes tomarket for their products. Odell have a range of personal protection equipment,designed to protect participants in extreme sports, which has recently wonspecialist awards for its quality and it is important that this range is nowaggressively marketed through newly developed trading relationships. In overall terms the operating profit before exceptional items in 2004 was£239,000 versus a loss in 2003 of £476,000 on turnover which has reduced by 5%.After exceptional costs of £99,000 and the much reduced interest charge, theretained profit for the year was £74,000 against the substantial loss in 2003 of£675,000, with positive earnings per share of 0.07p per share for the first timesince 1998. For the year as a whole, cash outflow from operating activities was £137,000after accounting for the delayed payment of £223,000 of VAT arising from thesale of the Bristol property in 2003. Net debt at £565,000 is down by over £1.0million from the previous year, primarily due to the re-financing in April. The balance sheet shows the benefit of the new share capital raised and thecapital reduction agreed by shareholders in April. New share capital of £1.3million has been introduced and those funds, together with the reduction inshare capital and share premium confirmed by the Court in October, have allowedthe accumulated losses at the previous year end to be eliminated. Shareholders'funds at the current year end were £475,000 by comparison with a deficit of£802,000 a year earlier. Since the year end, I am pleased to report that the Company has continued tomake strategic progress. In February 2005, Dinkie Heel raised a further£750,000 in a successful placing. This has been used to acquire 75% ofFriedman's, a converter of lycra for the dancewear, sportswear and swimwearmarkets, and also to strengthen the Company's balance sheet Dividend The board has decided not to recommend a dividend for the year (2003, nil). Itis nevertheless committed to returning to the dividend list and to commencingthe payment of a growing dividend as part of shareholders' total return frominvestment. People I would like to take the opportunity to wholeheartedly thank our staff for theirdedication to the business in 2004 when at last their efforts to return theCompany to profitability have been rewarded. I would also like to thank Chris Ball for his support over the past verydifficult four years. In December 2004 Chris bought the toe cap trading assetsand left the Company. We wish him all success in this new venture. Name Change To reflect the new approach and direction of the Company it will be proposed atthe annual general meeting that the name is changed to CEPS PLC an abbreviationof Chelverton Equity Partners, a clear description of the future approach of thebusiness. Prospects and Future Developments Trading during the early part of 2005 has started more slowly than last year asconsumer spending slows down in the UK. Stiletto top-pieces and protective bodyarmour, including the newly launched armoured undergarments, are more active andit is expected that the marketing efforts will produce benefits as the yearunfolds. Sales at the newly acquired Friedman's business are in line with expectationsbut the sales mix shows a predominance of plain over printed lycra products.Following Friedman's success at international trade shows it was decided toappoint distributors in other European countries. The first of these agents wasappointed in France and they have already opened several new accounts forFriedman's products. It is anticipated that this experience can be replicated elsewhere and allowFriedman's to penetrate lucrative European markets The Board remains cautiously optimistic that the current year will show furtherprogress in profits with an added expectation of further acquisitions in linewith the new strategy to continue the process of building the new CEPS PLC. Richard OrganChairman Dinkie Heel plc Profit and Loss Account Year ended 31 December 2004 2004 2003 £'000 £'000Turnover continuing operations 4,676 4,494 discontinued operations 687 1,142 5,363 5,636Cost of sales (4,482) (5,390)Gross profit 881 246Net operating expenses (including exceptional items) (741) (1,235) Operating profit/(loss) before exceptional items 239 (476)Exceptional items Restructuring costs (99) (477) Goodwill impairment provision - (36) Operating profit/(loss) continuing operations 263 170 discontinued operations (123) (1,159) 140 (989)Profit on sale of fixed assets - 481Interest payable (66) (177) Profit/(loss) on ordinary activities before taxation 74 (685)Taxation - 10 Profit/(loss) for the financial year 74 (675)Dividends - - Retained profit/(loss) for the year 74 (675) Earnings/(loss) per share- basic 0.07p (4.41p)- diluted 0.06p (4.41p) The Company has no recognised gains or losses other than the profit forthe financial year as set out above. In the opinion of the directorsthe results on a historical cost basis are not materially differentfrom the results as set out above. Dinkie Heel plc Balance Sheet 31 December 2004 2004 2003 £'000 £'000Net assets employed Fixed AssetsIntangible assets - -Tangible assets 263 272Investment in associate - - 263 272Current assets :Stocks 639 589Debtors 813 859Cash at bank and in hand 422 - 1,874 1,448 Creditors : amounts falling due within one year (1,242) (1,982) Net current assets/(liabilities) 632 (534) Total assets less current liabilities 895 (262) Creditors :amounts falling due after more than one year (420) (540)Provisions for liabilities and charges - - Net assets/(liabilities) 475 (802) Capital and reserves Called up share capital 145 785Share premium - 710Special Reserve 304 -Profit and loss account 26 (2,297) Total equity shareholders' funds 475 (802) Dinkie Heel plc Cash Flow Statement Year ended 31 December 2004 2004 2003 £'000 £'000Reconciliation of operating profit/(loss) to net cash outflow fromoperating activities Operating profit/(loss) 140 (989)Depreciation and amortisation charges 52 121Impairment provisions - 36(Increase)/decrease in stocks (50) 259(Increase)/decrease in debtors (91) 180Decrease in creditors (188) (6)Net cash outflow from operating activities (137) (399) Cash Flow Statement Net cash outflow from operating activities (137) (399)Returns on investments and servicing of finance (66) (177)Taxation - 10Capital expenditure and financial investment (43) 1,518Disposal 137 - (109) 952Financing 776 231Increase in cash 667 1,183 Reconciliation of net cash flow to movement in net debtIncrease in cash in the period 667 1,183Cash increase from change in debt 427 (189)Change in net debt 1,094 994Net debt at 1 January 2004 (1,659) (2,653)Net debt at 31 December 2004 (565) (1,659) Dinkie Heel plc Turnover and segmental analysis Year ended 31 December 2004 The United Kingdom is the source of turnover and operating profit and the principal location of thenet assets of the Company. The directors consider that the Company operates in two business segmentsserving various markets. Turnover, profit on ordinary activities before taxation and net assets areanalysed as follows: Segment of activity: Dinkie Davies Odell Company 2004 2003 2004 2003 2004 2003 £'000 £'000 £'000 £'000 £'000 £'000 Turnover 687 1,142 4,676 4,494 5,363 5,636 Segmental (loss)/profit before exceptional items (24) (682) 439 386 415 (296)Exceptional items (99) (477) - (36) (99) (513)Profit on sale of fixed assets - 403 - 78 - 481Segmental (loss)/profit before Group costs (123) (756) 439 428 316 (328)Group costs (176) (180)Profit/(loss) before interest andtaxation 140 (508) Interest payable (66) (177)Profit/(loss) before taxation 74 (685) Net (liabilities)/assets (129) (275) 1,169 1,132 1,040 857 Unallocated net debt (565) (1,659) Total net assets/(liabilities) 475 (802) Geographical analysis of turnover:United Kingdom 3,654 3,872Rest of Europe 968 774The Americas 248 304Australasia 35 49Far East 443 557Africa 15 80 Total turnover 5,363 5,636 Notes: 1. The Annual Report and Financial Statements will be sent to allshareholders. Further copies will be available to the public from the CompanySecretary at the Company's registered office, St Ivel Way, Warmley, Bristol BS308TY. 2. Basic earnings per share is calculated on the profit on ordinaryactivities before taxation of £74,000 (2003, loss £675,000) and on 106,125,367(2003, 15,290,075) ordinary shares, being the weighted number in issue duringthe year. Diluted earnings per share is calculated on 114,790,505 ordinary shares, beingthe weighted average number in issue adjusted to reflect the potential effect ofthe exercise of share warrants. As a loss was incurred in 2003 diluted and basicearnings per share were the same. 3. The abridged accounts for the year ended 31 December 2004 and 2003 donot constitute statutory accounts and are an extract from the Company'sstatutory accounts on which the auditors give an unqualified opinion. For further information contact: Geoff Martin, Dinkie Heel plc 0117 303 3404Paul Quade, City Road Communications Ltd 020 7334 0243 This information is provided by RNS The company news service from the London Stock Exchange