Last checked at 29 May 2009 07:00
Preliminary results of Caffyns plc
For the year ended 31 March 2009
29 May 2009
Caffyns plc, the leading motor distributor covering 12 car franchises in the south-east of England, announces its preliminary results for the year ended 31 March 2009.
Summary:
| Revenue £158.7 million (2008 : £182.0 million) |
| Loss before tax and non recurring items £2,288,000 (2008 loss : £197,000) |
| Loss before tax £4,420,000 (2008 profit : £2,579,000) |
| Basic (loss)/earnings per share (137.8p) (2008 earnings : 73.9p) |
| Adjusted (loss)/earnings per share (59.8p) (2008 earnings : 6.7p) |
| Proposed final dividend of 2.0p per ordinary share (2008 : 17.0p) |
| Cash generated from operations £6.5 million (2008 outflow : £1.6 million) |
| Management action taken to reduce ongoing operating costs by £2.5 million per annum |
| Bank borrowings reduced by £5.25 million |
The Chairman, Brian Birkenhead commented:
"The actions we took during the year to arrest the decline in profits and to return the company to a sustainable level of profit have begun to show results. It is encouraging that we traded profitably in our final quarter to March 2009. Our new car sales volume has declined by less than the market, costs have been cut with reductions in manpower and operational processes are undergoing major improvement. This means that we are stronger, leaner and better able to cope with the difficult economic conditions now affecting the UK market and we are well placed to take advantage of the upturn when it arrives."
| Caffyns plc | Simon Caffyn, Chief Executive | Tel: 01323 730201 |
| Mark Harrison, Finance Director | ||
| The HeadLand Consultancy | Howard Lee | Tel: 020 7367 5222 |
| Daniel Khan | ||
Operational and Business Review
Economy and Market Overview
In the year to March there was a marked deterioration in the UK economy during which the new car market fell by 23.5% in the retail and small business sectors in which we operate. In our final quarter these sectors declined by 28.9% year on year. At the same time, the used car market was affected by unprecedented falls in wholesale prices in the first nine months of our financial year with some stabilisation and a small recovery from January 2009. Leading industry sources have calculated that the average fall in used car prices during 2008 was between 15% and 25% with executive and large 4x4 vehicles being the hardest hit.
Results and Key Performance Indicators
The first half of our financial year coincided with the beginning of the serious decline in new car registrations falling 17.0% in our market segments. During this period, we also experienced unprecedented reductions in the value of used cars which affected our used car and demonstrator stock values.
Trading conditions in the second half of the year continued to deteriorate with the new car registrations in the six months to March 2009 falling 30.8% in our sectors. Used car values fell further before rallying at the end of December as demand recovered. Our unit sales of used cars increased by 18.5% in the second half on a like for like basis.
For the year as a whole, our new car sales volumes were down 21% with average unit prices down another 4% while used car volumes were up 6% although at prices which were lower by 9%. As a result revenue for the year was £158.7m, 13% down from last year's £182.0m, and operating profit on the continuing business fell by £1.8m to a loss of £1.4m in spite of vigorous action to reduce costs, which fell by £1.9m.
There were significant items of a non-recurring nature. Profits in the year resulting from the sales of property in Worthing and Hove have been offset by the losses arising from the closure costs of three dealerships. Asset values have also been written down. Inventories were written down following unprecedented reductions in unit prices of vehicles. Goodwill at two branches has been impaired following trading losses. In addition, given the rapid decline in the commercial property market, we concluded that one freehold property and one short leasehold site also required an impairment charge. The total net cost of these non-recurring items amounted to £2.1m contributing to pre tax losses for the year of £4.4m.
Earnings per share fell from 73.9p to a loss of 137.8p. An interim dividend of 2.0p per ordinary share (2008 - 8.0p) was paid on 9 January 2009. A final dividend of 2.0p (2008: 17.0p) is now being recommended which, if approved, will be payable on 30 July 2009 to shareholders on the register on 26 June 2009, giving a total dividend of 4.0p for the year (2008 - 25.0p).
During the second half of the year we took significant action to reduce our borrowings. As a result, we had positive cash inflow from operations of £6.5m for the year compared with a cash outflow of £1.6m in the previous year. Bank borrowings reduced from £14.2m to £8.9m reducing the proportion of total borrowings to shareholders funds to 42% (March 2008 - 47%).
The company has recently renewed bank facilities of £18m including £8 million of revolving credit loans which will provide the company with adequate facilities to support the company's operations for the foreseeable future.
Operating review
In response to the poor market conditions, we have focused on the seven key activities which we outlined in our Interim Statement last November. These are repeated below together with a short update on how these have influenced business performance:
| Improved sales performance through concentrating on lower priced and fuel efficient vehicles together with additional management focus on sale of used vehicles. | ||
| Overall turnover has clearly been affected but sales of used cars has increased. Our effective write-down policies have helped to deliver high used car stock turn of about eleven times annually with improved margins. Demand for lower priced and fuel efficient vehicles has increased. | ||
| Enhance margins through marketing innovations and improved use of internet communication, especially in higher margin servicing and bodyshop operations. | ||
| Our evolving internet website enables customers to view all our new car offers by franchise as well as our Group used car stocks. Our fixed price servicing offer for cars out of manufacturer's warranty is clearly set out with customers able to see detailed quotes for their specific vehicle at rates in line with national independent repairers. We continue to focus on improvements to increase our service retention of new car buyers, and especially our used car customers. Improvements to our online marketing have enabled us to reduce our expenditure on traditional and expensive marketing media. | ||
| Additionally we have enhanced our own use of the internet to improve our internal reporting on both day to day operational activity and stock management across the Group. This enables quick comparison of best practice across our dealership network. | ||
| Reduce costs through closure of underperforming branches and reduction in staff numbers generally. | ||
| Three branches have been closed with customers transferred to our nearby dealerships. | ||
| - | In Tonbridge we closed our Vauxhall dealership but are able to offer customers a more complete service from our Vauxhall site in Tunbridge Wells. | |
| - | In Brighton we closed a second Vauxhall dealership and customers have been directed to our other three dealerships in the area. | |
| - | In Hailsham we closed our Chrysler dealership and transferred the aftersales and used car business to our Nissan dealership in Eastbourne. | |
| Additional reductions in staff numbers have been made at all our sites. Overall employee numbers have fallen from 778 to 646, a reduction of 17%. Cost reduction measures taken so far have reduced the total cost base of the Company by over £2.5m per annum. Redundancy costs of £455,000 incurred at our ongoing sites have been treated as a non-recurring expense. The costs of closing the three branches during the year were £754,000. We continue to monitor costs closely, identifying operating efficiencies wherever possible. | ||
| Reduce stocks and increase stock turnover, especially of used vehicles, strengthening our monthly write down policies on used cars and demonstrator stocks to remain competitive. | ||
| During this challenging period, we have reduced our owned stocks by £7.1m from £19.1m to £12.0m. Margins have improved and stock turn on used cars has increased to eleven times per annum. New car consignment stock has also reduced from £8.2m to £7.1m and levels of adopted stock are under tight control, ensuring our new car stocks are current. Demonstrator numbers have also been reduced lowering funding requirements and reducing running costs. | ||
| Reduce future capital expenditure to essential work only. | |
| Our redevelopment work at Brighton Audi is now complete, as are the refurbishment works at our Land Rover franchise in Lewes and the bodyshop at Hailsham. We are now limiting expenditure to minimal levels. Manufacturers have taken a pragmatic view and have postponed new requirements for showroom enhancements. It is anticipated that these projects, for which we provide the funds, will be delayed until economic recovery is established and in most cases we expect will be reduced in scale and cost. | |
| Allocate franchises to facilities to gain maximum profitability. | |
| In addition to the closures and amalgamations discussed above, we have also looked to improve throughput on various sites by adding additional franchise facilities. In Brighton we successfully added the Ford franchise to our Volvo dealership with benefits to both these manufacturers and enhanced profits to the Company. In Worthing we added the Volvo aftersales franchise to our small used car facilities; and in Sevenoaks we added the Citroen aftersales franchise to our Peugeot dealership. | |
| In Eastbourne we have reduced costs whilst enhancing expertise by amalgamating the managements of our Jaguar business with our Land Rover business in Lewes. A similar exercise has also been very successful with our Ford operations in Alton and Haslemere. | |
| Negotiate with manufacturers to set lower sales and bonus targets. | |
| In a difficult and declining new car market, manufacturers have taken pragmatic views of the likely market for 2009 and agreed realistically to lower their sales objectives. We believe the new targets make the achievement of bonus payments for us more likely in the financial year to 31 March 2010. |
The actions that we have taken are showing results and it is encouraging that we made a small trading profit before non-recurring charges in the final quarter.
Property
In March 2009 we completed on the sale of our site in Hove and cash proceeds of £1.5m were received. Earlier in May 2008 we received cash of £1.075m from the sale of our site in Worthing and the resultant gains have been included as non-recurring items in the period. The cash proceeds have been used to reduce borrowings.
In East Grinstead we continue to work towards a viable scheme for a developer on our vacant site but a further revision to our existing detailed planning approval will be required. In Brighton we have two parties interested in a lease on the major part of our site on the main London Road.
The freehold properties (excluding one site which is classed as an asset held for sale) were revalued at 31 March 2009 at fair value (open market for existing use) by CB Richard Elllis Limited, Chartered Surveyors. The excess of the valuation over the net book value of the properties subject to the valuation as at 31 March 2009 was £4.0m. In accordance with the company's accounting policies, this surplus is not incorporated in the financial statements.
Pensions
The triennial valuation of the company's defined benefit pension scheme is likely to show a deficit of £7.3 million following a surplus of £0.4m last time. Conditions governing the sustainability and affordability of defined benefit pension schemes generally have deteriorated in recent years and new taxation proposals announced in the budget are unlikely to materially benefit their performance.
Finance
In March we repaid £3m of term loans ahead of agreeing in May a three year term loan with HSBC amounting to £5m and with NatWest a two year loan of £3m. Overdraft facilities of £10m between the banks have also been agreed. The revised facilities include covenants relating to the level of profitability and the value of our freehold properties. The tests of our performance against these covenants will be calculated quarterly during our financial year 2009-10. As a result of the renegotiation of the facilities, the margins applicable have been amended to reflect current market pricing. The banks have been assigned security over the group's assets subject to the rights of the finance arms of manufacturers.
The major fluctuations in our requirements relate to the funding of car stocks and we were successful in reducing our owned stocks by £7.1m in the year. From a risk perspective, our funding is split between manufacturers through their related finance arms and that funded by ourselves through bank borrowings. Financing for stock other than through bank borrowings is shown in trade creditors in the balance sheet.
Tax
In July 2008 legislation was enacted whereby Industrial Buildings Allowances would be phased out over a three year period. This has resulted in a non-recurring deferred tax charge in the year of £527,000, without which there would have been a total taxation credit of £978,000. However, there will be no material impact on tax payable.
VAT
Along with many other motor dealers, a claim has been lodged with HM Revenue and Customs ("HMRC") in connection with the repayments of VAT received in September 2004 and March 2007. Interest on these repayments was paid on a simple interest basis whereas the company's claim is that it should have been on a compound interest basis. The company's claim is now joined in a Group Litigation Order with many claims from other businesses. While the High Court has found in the claimant's favour, it was also held that the limitation period for bringing these particular claims to the High Court, ran out in around 2002/2003. Leave of appeal has been granted and the directors understand that an appeal is to be lodged. However, there is ongoing VAT Tribunal litigation where different time limitation rules apply.
In the event that a claim is successful, any further amount payable to the company would depend upon the rate of interest decided by the courts. In view of the early stage of the legal process, no amount in respect of this claim has been included in these financial statements. If successful, the claim is likely to have a material affect on the company's financial statements. Two other smaller claims have also been lodged with HMRC.
People
During a difficult year during which we have closed three sites and reduced overall staffing levels significantly, we have seen the highest levels of commitment together with positive attitudes and energetic approach to the tasks in hand.
My colleagues and I are most grateful to all employees for their untiring efforts and loyalty which is enabling us to weather the economic crisis.
Operational Strategy
Following the unprecedented downturn in our key market, we quickly adjusted our strategic direction to ensure a return to profitability in the shortest possible time. This was achieved in the final quarter of last year and we have emerged stronger, leaner and better able to achieve sustainable pre-tax profits from a reduced revenue base. This will involve significant enhancements in marketing and operations, including online sales, improved management capabilities and performance, reduced fixed costs and re-balancing of the portfolio of properties and franchises into more cost-effective sites. In the longer term we will seek to grow the business organically and by incremental site and franchise acquisitions while maintaining a prudent level of gearing.
Current Trading and Outlook
We are continuing to make good progress following the encouraging results for the last quarter of our financial year. Trading in April has seen a further improvement in used car sales with a strong aftersales performance. Although new car volumes remain depressed we made a profit in April which was ahead of the prior year's result as a consequence of actions we have taken.
The Budget in April disclosed the extent of the difficulties faced by the UK economy but also included the New Car Scrappage Scheme which, during May, has resulted in improved new car enquiries particularly for smaller cars
Conditions remain very difficult but we are stronger and leaner, with reduced borrowings and tighter control of stocks and operating processes and so better placed to face the challenges ahead.
S G M Caffyn
Chief Executive
29 May 2009
CONSOLIDATED INCOME STATEMENT
for the year ended 31 March 2008
| Note | Before non-recurring | Non-recurring (note 2) | 2009 | Before non-recurring | Non-recurring (note 2) | 2008 | ||
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |||
| Revenue | 158,109 | 544 | 158,653 | 182,029 | - | 182,029 | ||
| Cost of sales | (134,173) | (1,194) | (135,367) | (154,386) | 1,310 | (153,076) | ||
| Gross profit / (loss) | 23,936 | (650) | 23,286 | 27,643 | 1,310 | 28,953 | ||
| Operating expenses | ||||||||
| Distribution costs | (16,563) | (653) | (17,216) | (17,365) | - | (17,365) | ||
| Administration expenses | (8,798) | (1,257) | (10,055) | (9,885) | (134) | (10,019) | ||
| Operating (loss) / profit before other income | (1,425) | (2,560) | (3,985) | 393 | 1,176 | 1,569 | ||
| Other income - gains on the sale of property | - | 428 | 428 | - | - | - | ||
| Operating (loss) / profit | (1,425) | (2,132) | (3,557) | 393 | 1,176 | 1,569 | ||
| Finance expense | 5 | (1,177) | - | (1,177) | (1,310) | - | (1,310) | |
| Finance income | 6 | 314 | - | 314 | 720 | 1,600 | 2,320 | |
| Net finance costs | (863) | - | (863) | (590) | 1,600 | 1,010 | ||
| (Loss) / profit before taxation | (2,288) | (2,132) | (4,420) | (197) | 2,776 | 2,579 | ||
| Income tax credit / (expense) | 3 | 566 | (115) | 451 | 6 | (457) | (451) | |
| (Loss) / profit for the year from continuing operations | (1,722) | (2,247) | (3,969) | (191) | 2,319 | 2,128 | ||
| (Loss) / earnings per share continuing operations | ||||||||
| Basic and diluted | 4 | (137.8p) | 73.9p | |||||
CONSOLIDATED BALANCE SHEET
at 31 March 2009
| 2009 £'000 | 2008 £'000 | ||||
| Non-current assets | |||||
| Property, plant and equipment | 32,176 | 32,141 | |||
| Goodwill | 286 | 481 | |||
| Intangible assets | - | 9 | |||
| Retirement benefit scheme | - | 1,864 | |||
| 32,462 | 34,495 | ||||
| Current assets | |||||
| Inventories | 19,095 | 27,238 | |||
| Trade and other receivables | 5,926 | 8,837 | |||
| Cash and cash equivalents | 32 | 29 | |||
| Non current assets classified as held for sale | 564 | 990 | |||
| 25,617 | 37,094 | ||||
| Total assets | 58,079 | 71,589 | |||
| Current liabilities | |||||
| Interest bearing loans and borrowings | 8,922 | 11,196 | |||
| Trade and other payables | 21,899 | 22,801 | |||
| Current tax payable | 212 | 626 | |||
| Provisions | - | 27 | |||
| 31,033 | 34,650 | ||||
| Non-current liabilities | |||||
| Interest bearing loans and borrowings | 6 | 3,017 | |||
| Preference shares | 1,237 | 1,237 | |||
| Deferred tax liabilities | 784 | 2,542 | |||
| Retirement benefit obligations | 3,715 | - | |||
| 5,742 | 6,796 | ||||
| Total liabilities | 36,775 | 41,446 | |||
| Net assets | 21,304 | 30,143 | |||
| Capital and reserves | |||||
| Share capital | 1,439 | 1,439 | |||
| Share premium account | 272 | 272 | |||
| Capital redemption reserve | 282 | 282 | |||
| Non-distributable reserve | 2,901 | 3,892 | |||
| Retained earnings | 16,410 | 24,258 | |||
| Total equity attributable to shareholders of Caffyns plc | 21,304 | 30,143 | |||
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 March 2009
| Note | 2009 | 2008 | |||
| £'000 | £'000 | ||||
| Net cash from operating activities | 9 | 6,499 | (1,597) | ||
| Investing activities | |||||
| Proceeds on disposal of property, plant and equipment | 2,589 | - | |||
| Purchases of property, plant and equipment | (3,253) | (2,023) | |||
| Net cash used in investing activities | (664) | (2,023) | |||
| Financing activities | |||||
| Repayment of unsecured bank loans | (3,000) | - | |||
| Dividends paid | (547) | (720) | |||
| Repayments of obligations under finance leases | (29) | (33) | |||
| Net cash used in financing activities | (3,576) | (753) | |||
| Net increase / (decrease) in cash and cash equivalents | 2,259 | (4,373) | |||
| Cash and cash equivalents at beginning of year | (11,135) | (6,762) | |||
| Cash and cash equivalents at end of year | (8,876) | (11,135) | |||
CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE
for the year ended 31 March 2009
| £'000 | £'000 | |||||
| 2009 | 2008 | |||||
| Actuarial (loss)/gains recognised | (6,002) | 960 | ||||
| Deferred tax on actuarial loss / (gains) | 1,679 | (270) | ||||
| Income and expense recognised directly in equity | (4,323) | 690 | ||||
| (Loss)/profit for the year | (3,969) | 2,128 | ||||
| Total recognised income and expense for the year | (8,292) | 2,818 | ||||
NOTES TO THE PRELIMINARY RESULTS
For the year ended 31 March 2009
| 1. | Basis of Preparation |
| The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as endorsed by the European Union and with those parts of the Companies Act 1985 applicable to companies reporting under IFRS. The financial information presented does not constitute statutory financial statements for the years ended 31 March 2009 or 2008 as defined in Section 240 of the Companies Act 1985. The financial information for the year ended 31 March 2009 and the comparative information have been extracted from the audited financial statements for the year ended 31 March 2009 prepared under IFRS, which have not yet been approved by shareholders and have not yet been delivered to the Registrar. The auditors have reported on those financial statements; their report was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under S.237(2) or (3) of the Companies Act 1985. This preliminary statement was approved by the board of directors on 29 May 2009. | |
| The financial statements have been prepared on a going concern basis. As described in the operational and business review, the current economic environment is challenging and the group has reported an operating loss for the year. The directors have adjusted the strategic direction of the company to provide a return to profitability in the shortest possible time. As set out in note 10, since the financial year end the Group's banking facilities have been revised. Furthermore, the directors have prepared detailed financial forecasts for the foreseeable future which take into account current trading conditions and expectations for the future, together with the revised operating strategy of the Group. These forecasts indicate that the Group will be able to operate within the financing facilities that are available to it, with sufficient margin for reasonable adverse movements in expected trading conditions. Accordingly, the directors are satisfied that the Group will have sufficient resources to continue in operational existence for the foreseeable future and they continue to adopt the going concern basis in preparing the financial statements |
| 2. | Non-recurring items | 2009 | 2008 | |||||
| £'000 | £'000 | |||||||
| Within operating expenses: | ||||||||
| VAT refund (net of costs) on demonstrator vehicle bonuses in the period 1973 to 1997 | - | 1,310 | ||||||
| Impairment of property, plant and equipment | (660) | - | ||||||
| Net profit on disposal of property, plant and equipment | 428 | - | ||||||
| Goodwill impairment | (195) | - | ||||||
| Losses incurred on closing businesses | (754) | (134) | ||||||
| Inventory write down | (496) | - | ||||||
| Redundancy costs | (455) | - | ||||||
| (2,132) | 1,176 | |||||||
| Interest received on VAT refund | - | 1,600 | ||||||
| Total non-recurring items before taxation | (2,132) | 2,776 | ||||||
| Income tax expense | - | Deferred tax in respect of withdrawal of Industrial Building Allowances | (527) | - | ||||
|
| - | Tax relief on non-recurring items | 412 | (457) | ||||
| Total income tax expense | (115) | (457) | ||||||
| Total after tax | (2,247) | 2,319 | ||||||
| The following amounts have been presented as non-recurring items in these financial statements: Property, plant and equipment have been reviewed for possible impairment in the light of economic conditions, in particular the fall in commercial property prices. As a result of this review, an impairment charge of £660,000 has been recognised against property, plant and equipment (2008 - nil). Goodwill impaired during the year in the light of economic conditions was £195,000 (2008 - nil). The net profit on the disposal of property, plant and equipment relates to the profit on sale of two freehold properties sold in the year less the loss on disposal of certain plant and equipment. Losses incurred in the closure of businesses amounted to £754,000 (2008 - £134,000). These costs include wind down expenses and redundancy costs. Losses of branches up to the date of closure included in operating results before non-recurring items were £437,000. The values of used cars fell at an unprecedented rate, particularly between July and November 2008, and used car stock suffered an exceptional loss in value compared to its cost. This fall in value is not expected to recur. A stock provision of £496,000 has therefore been recognised in respect of these issues and presented as a non-recurring item. The group undertook a programme of redundancies in its core business consequent to the current economic situation, resulting in non-recurring payments of £455,000 (2008 - nil). In July 2008, legislation was enacted whereby Industrial Buildings Allowances will be phased out over a three year period. This results in a non-recurring deferred tax charge in the year of £527,000. There will be no material impact on tax payable. |
| 3. | Tax | 2009 | 2008 | ||
| £'000 | £'000 | ||||
| Current tax | |||||
| UK corporation tax | (650) | 650 | |||
| Advance corporation tax recovered | 253 | (253) | |||
| Total | (397) | 397 | |||
| Deferred tax | |||||
| Origination and reversal of temporary differences | (581) | 408 | |||
| Adjustment recognised in the period due to change in rate of corporation tax | - | (219) | |||
| Adjustments recognised in the period for deferred tax of prior periods | - | (135) | |||
| Total | (581) | 54 | |||
| Non- recurring - adjustment due to abolition of Industrial Buildings Allowances | 527 | - | |||
| Total | (54) | 54 | |||
| Total tax (credited)/charged in the Income Statement | (451) | 451 | |||
| The tax (credit)/charge arises as follows: | |||||
| On normal trading | (566) | (6) | |||
| Non-recurring (see note 2) | 115 | 457 | |||
| (451) | 451 | ||||
| The (credit)/charge for the year can be reconciled to the profit per the income statement as follows: | 2009 | 2008 | ||
| £'000 | £'000 | |||
| (Loss)/profit before tax | (4,420) | 2,579 | ||
| Tax at the UK corporation tax rate of 28% (2008 - 30%) | (1,238) | 776 | ||
| Tax effect of expenses that are not deductible in determining taxable profit | 260 | 29 | ||
| Adjustment due to abolition of Industrial Buildings Allowances | 527 | - | ||
| Change in rate of corporation tax from 30% to 28% | - | (219) | ||
| Adjustments to tax charge in respect of prior years | - | (135) | ||
| Tax (credit)/expense for the year | (451) | 451 | ||
| 4. | Earnings per ordinary share |
| The calculation of the basic earnings per share is based on the earnings attributable to ordinary shareholders divided by the weighted average number of shares in issue during the year. The calculation of diluted earnings per share would be based on the basic earnings per share, adjusted to allow for the issue of shares and the post tax effect of dividends and/or interest, on the assumed conversion of all dilutive options and other dilutive potential ordinary shares. At both year ends there were no unissued shares, so the diluted earnings per share are the same as the basic earnings. Reconciliations of earnings and weighted average number of shares used in the calculations are set out below: |
| Adjusted | Basic | ||||||||||||
| 2009 £'000 | 2008 £'000 | 2009 £'000 | 2008 £'000 | ||||||||||
| (Loss)/profit before tax | (4,420) | 2,579 | (4,420) | 2,579 | |||||||||
| Adjustments: | |||||||||||||
| Non-recurring items (note 2) | 2,132 | (2,776) | - | - | |||||||||
| Adjusted (loss)/profit before tax | (2,288) | (197) | (4,420) | 2,579 | |||||||||
| Taxation | 566 | 6 | 451 | (451) | |||||||||
| Earnings | (1,722) | (191) | (3,969) | 2,128 | |||||||||
| Adjusted earnings per share | (59.8p) | (6.7p) | |||||||||||
| Basic earnings per share | (137.8p) | 73.9p | |||||||||||
| The number of fully paid ordinary shares in issue during both years was 2,879,298. | |||||||||||||
| The number of fully paid ordinary shares in issue during both years was 2,879,298. |
| 5. | Finance expense | 2009 | 2008 | |
| £'000 | £'000 | |||
| Interest payable on bank borrowings | 746 | 823 | ||
| Vehicle stocking plan interest | 322 | 378 | ||
| Interest payable on finance leases | 7 | 7 | ||
| Preference dividends | 102 | 102 | ||
| Finance expense | 1,177 | 1,310 | ||
| 6. | Finance income | 2009 | 2008 | |
| £'000 | £'000 | |||
| Defined benefit pension scheme net finance income | 301 | 720 | ||
| Interest receivable | 13 | - | ||
| 314 | 720 | |||
| Non-recurring - interest on VAT refund (see note 2) | - | 1,600 | ||
| 7. | Dividends | |||
| 2009 | 2008 | |||
| Paid | £'000 | £'000 | ||
| Ordinary | ||||
| Interim dividend paid in respect of the current year of 2.0p (2008: 8.0p) | 58 | 230 | ||
| Final dividend paid in respect of the previous year of 17.0p (2008: 17.0p) | 490 | 490 | ||
| 548 | 720 | |||
| The directors propose a final dividend of 2.0p (2008 - 17.0p) per ordinary share, to be paid on 30 July 2009 to shareholders on the register at 26 June 2009. An interim dividend of 2.0p (2008 - 8.0p) per share was paid during the year, making a total for the year of 4.0p (2008 - 25.0p). The ex-dividend date is 24 June 2009. | |
| 8. | Analysis of net debt | ||||
| 2009 £'000 | 2008 £'000 | ||||
| Cash and cash equivalents | 32 | 29 | |||
| Short term borrowings | (8,908) | (11,164) | |||
| Medium term borrowings | - | (3,000) | |||
| Obligations under finance leases | (20) | (49) | |||
| (8,896) | (14,184) | ||||
| 9. | Notes to the cash flow statement | |||
| 2009 £'000 | 2008 £'000 | |||
| (Loss)/profit before taxation | (4,420) | 2,579 | ||
| Adjustment for net finance expense | 863 | 590 | ||
| (3,557) | 3,169 | |||
| Adjustments for: | ||||
| Depreciation of property, plant and equipment | 1,419 | 1,464 | ||
| Amortisation of intangible assets | 9 | 22 | ||
| Impairment of property, fixtures and fittings | 660 | - | ||
| Goodwill impairment | 195 | - | ||
| Change in retirement benefit obligations | (122) | 160 | ||
| (Gain) / loss on disposal of property, plant and equipment | (428) | 28 | ||
| Decrease in provisions | (27) | (3,108) | ||
| Operating cash flows before movements in working capital | (1,851) | 1,735 | ||
| Decrease / (increase) in inventories | 8,143 | (3,392) | ||
| Decrease in receivables | 2,315 | 210 | ||
| (Decrease) / increase in payables | (902) | 1,160 | ||
| Cash generated / (absorbed) by operations | 7,705 | (287) | ||
| Income taxes | (42) | - | ||
| Interest paid | (1,164) | (1,310) | ||
| Net cash from operating activities | 6,499 | (1,597) | ||
| 10. | Post balance sheet events | |||
| Since the financial year end, the group's bank facilities have been revised in that £18.0m of overdraft facilities available at 31 March 2009 have since been changed to £10.0m and revolving credit facilities of £8.0m put in place. The average margin applying to the overdraft facilities is 3.05% over bank base rate and 3.1% over 3 month LIBOR in respect of the revolving credit facilities. The new facilities are subject to covenants with respect to debt/freehold property, trading results against budget and facility reduction based upon 50% of free cash flow. The group has granted security over certain of its assets, not subject to any other arrangements, mainly comprising property, debtors and certain vehicle stocks. The balance sheet value of those assets at 31 March 2009 was £42.9m. Restructuring and professional fees consequent to this restructuring are estimated to amount to 1.6% of the facilities during the year ending 31 March 2010. | ||||
| 11. | Annual Report | |||
| Copies of the Annual Report will be despatched to shareholders by 3 July 2009. | ||||
| 12. | Financial Calendar | |||
| Annual General Meeting at the Hydro Hotel, Eastbourne on Thursday 30 July 2009 at 11.30am. | ||||