14 Oct 2008 07:00
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14thΒ October 2008
Crawshaw Group PLC (Formerly Felix Group PLC)
Interim Results for the six months ended 31st July, 2008
Highlights
SalesΒ Β£7.2mΒ for theΒ 26 weeks to 31 July 2008Β (Β£4.1m for theΒ 15Β weeks to 31stΒ July 2007*)
Like for like salesΒ from allΒ retailΒ outlets have strengthened over the period, +2% for the half year,Β andΒ continue to strengthen.
OperatingΒ profit of Β£360kΒ for the halfΒ year, beforeΒ exceptional costsΒ associated with the reverse acquisitionΒ of Β£1,449k, (see note 3 to the accounts).Β
Profit comparison to last year not meaningful due to other one off and exceptional costs, both this half year and last.
Cash balance at half year endΒ Β£1,882k. Strong operating cash flow.
Recent rebrandingΒ exerciseΒ at twoΒ existing outlets very successful
First new store opened inΒ lateΒ July and is performing very well. Second new store opened in early October with initial performance extremely positive.
Three further stores to be opened in the fourth quarter and others planned for 2009.
Chairman's Statement - Interims 31stΒ July, 2008.
Since theΒ reverseΒ acquisition of CrawshawΒ GroupΒ LtdΒ (renamed Crawshaw Holdings Ltd)Β andΒ the share subscriptionΒ ofΒ Β£4 millionΒ in AprilΒ 2008Β I am delighted by the Groups' business performance to date.
Trading has strengthened as ourΒ wide andΒ varied product offerΒ continuesΒ to be popular with ourΒ customersΒ -Β good quality food, available locally andΒ at aΒ valueΒ price isΒ anΒ idealΒ combination inΒ the current economic climate.
ItΒ is difficult to make useful comparisons when comparingΒ our performanceΒ for the half year under review as compared to the similar period during the prior year. AsΒ wasΒ explained in the admission documentΒ which was dated April 2008, there were a number of one off costs during the prior year and during the half year under review the business incurred significantΒ exceptional costs, largely to do with the refinancing, as well asΒ additional recurring costs in order to ensure that systems and processes were sufficiently robust to support the rollΒ out of additional stores.
Existing Outlets:
Turnover
Since the reverse acquisition in April, salesΒ haveΒ strengthened inΒ allΒ retailΒ areas of theΒ business.Β For the period February toΒ mid AprilΒ 2008,Β cumulative like for like sales atΒ Markets, Stores and Mart were running at -7%, +1% and -8% respectively, (totalΒ -2%).Β For the periodΒ midΒ April to July 2008Β they had strengthened to +1%, +3% andΒ +2% respectively, (totalΒ +3%). Wholesale sales were slightly down during the period reflecting an increasing focus on the utilisation of product through our own, rather than 3rdΒ party,Β channels.
Margin
OurΒ retailΒ pricing isΒ competitive, offering our customers exceptional value forΒ moneyΒ whichΒ is madeΒ possible byΒ our verticallyΒ integrated business model. Rapidly rising meat prices during May put pressure on our gross margins for a 6 week period but we were able to pass the increases on and gross margins have since been restored. We continue to offer our customers exceptional value for money.
New Outlets:
The admission document referred to the key growth opportunity for the business being the potential to open more stores, replicating the current successful format. Accordingly ourΒ first new storeΒ since admissionΒ was openedΒ duringΒ lateΒ JulyΒ 2008Β inΒ RetfordΒ NottinghamshireΒ and has been a resounding success. Turnover and margin are in line withΒ ourΒ expectations and the capitalΒ investment willΒ take less than two years to payΒ back.Β With no pre marketing or advertising, the new storeΒ demonstrated a very short maturity curve by,Β from its first dayΒ trading at a level that, if it is sustained,Β would delight usΒ long term.Β
Our store in Meadowhall closed in July 2008Β as the landlord took back the site for redevelopment.
Post half year end events and current trading.
Our secondΒ newΒ store opened at the beginning of OctoberΒ 2008Β in Castleford,Β WestYorkshire.Β PerformanceΒ for the 2 weeks to dateΒ is extremely positiveΒ andΒ indicates another successful store opening.
Leases for threeΒ other stores have now been signed up inΒ Chesterfield,Β MansfieldΒ andΒ HuddersfieldΒ andΒ allΒ are expected to open in the coming weeks. This will bring the total of new stores opened during 2008 to five.Β
We have alreadyΒ identified a sixth new siteΒ which will openΒ early inΒ 2009Β and we plan to continue opening new stores at the maximum rate that the business canΒ prudentlyΒ handle.
Since the half year end sales have continued to strengthen in all retail areas of the group. Like for like sales for the lastΒ 10Β weeks are upΒ 4Β %,Β SeptemberΒ beingΒ up 5%.
Brand
We have recently started to trial the potential impact of a major rebrandingΒ ofΒ ourΒ currentΒ stores, martΒ and market locations. The aimΒ isΒ (i) to generally strengthen our brand as we grow and (ii) to ensure that ourΒ quality and valueΒ message is relevant and strong inΒ today'sΒ retail trading environment andΒ soΒ thatΒ the CompanyΒ maximisesΒ itsΒ potential.
Our firstΒ existingΒ location to beΒ rebrandedΒ hasΒ sinceΒ seen aΒ 27%Β uplift in sales which isΒ extremely encouraging asΒ the increase inΒ performance should pay back the cost of theΒ rebrandingΒ exercise in just aΒ few weeks. The improved result is a consequence of increased footfall as more customers notice our presence.Β We haveΒ subsequentlyΒ rebrandedΒ a secondΒ existingΒ siteΒ whichΒ Β hasΒ seenΒ aΒ 15%Β uplift in sales.Β We are now planning to roll the re-branding out to further stores over the coming weeks although we expect a more modest uplift in sales when applied across the whole store portfolio.
The only significant area of our operation where we are behind plan is in the timing of our new store opening program. Back in AprilΒ 2008Β we had planned to beginΒ opening new storesΒ in May.Β The property marketΒ howeverΒ was softening rapidlyΒ thenΒ and so we took the view that a little patience would result in better deals -Β and thisΒ has since proved to be the case. We were also formulating plans for the re-branding referred toΒ aboveΒ and decided to delay the opening of RetfordΒ so thatΒ it could carry the new image. Again, this proved to be a successful decision. We plan to compensateΒ for the slower than expected startΒ by accelerating our new store timetable forΒ the remainder of this year and into nextΒ subject to utilityΒ capacityΒ and planning restraints at each individual site.
Outlook
Our value food proposition and local presence is a perfect formula in the currentΒ economicΒ environment.Β Given theΒ strengtheningΒ performance from our existing business and the positive results from our new store openingsΒ and rebranding exerciseΒ the Board remains very optimistic aboutΒ our prospects for growth inΒ the future.
Richard Rose
Chairman
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CHIEF FINANCIAL OFFICER'S REPORT
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Β Following the reverse acquisition of Crawshaw Group Ltd in April 2008 and the subsequent Β£4m
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Β raised via the share subscription, I am very pleased with the financial progress of the business to
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Β date. Adjusting for the transaction costs, underlying operating cash flows remain strong, theΒ
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Β balance sheet is robust and the business is ideally positioned for its expansion. The business hasΒ
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Β incurred the planned additional overhead costs in the period to ensure that systems andΒ
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Β processes are sufficiently robust to allow the group to proceed with its plans for rapid expansion.
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Β Reverse acquisition accounting
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Β On the 11th of April 2008 Crawshaw Group Ltd was acquired by the cash shell Felix Group plc in a
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Β "reverse takeover". The accounting rules surrounding a reverse acquisition are complex and
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Β detailed and have crystallised various exceptional items in the period under review. Under IFRS 3
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Β Crawshaw Group Ltd is deemed the acquirer and as such all comparatives have been restated to
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Β show that this was always the case. The restatement of both the balance sheet and income
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Β statement comparatives has resulted in less meaningful direct comparisons with prior periods as
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Β both the half year and full year comparatives are based on the 15 weeks and 41 weeks from 15th
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Β April 2007 respectfully, this being the date of the original acquisition of Crawshaw Butchers Ltd by
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Β Crawshaw Group Ltd. Following the reversal Crawshaw Group Ltd changed its name to Crawshaw
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Β Holdings Ltd and Felix Group plc assumed the name Crawshaw Group plc.
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Β Exceptional items
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Β With reference to note 3 in the financial statements, exceptional items were incurred in both the
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Β period ended 31st January 2008 and 31st July 2008. The exceptional items in the current reporting
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Β period relate to transaction costs related to the reverse takeover (Β£1,050k), renegotiating
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Β new bank facilities following the reverse takeover (Β£184k) and impairment of goodwill (Β£215k).
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Β Per note 6 in the financial statements the goodwill represents the excess of consideration overΒ
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Β net assets acquired, under IFRS3 this is deemed to be as if Crawshaw Group Ltd was the
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Β acquirer. As Felix Group plc was a non trading cash shell at the time of the acquisition theΒ
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Β directors have deemed that a full impairment of this goodwill balance be made.
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Β Adjusting for the exceptional items above would result in an operating profit of Β£360k and
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Β adjusted earnings per share of 1p for the reporting period.
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Β Summary
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Β Following a period of consistent performance in its existing units and planned investment in
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Β processes and systems, the business is now in an ideal position to realise its roll out potential
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Β which has started with the opening of new stores in Retford and Castleford.
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Β Andrew Richardson
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Β Chief Financial Officer
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CONDENSED CONSOLIDATED INTERIM INCOME STATEMENTΒ |
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Β FOR THE 6 MONTHS ENDED 31/7/2008 |
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Β UnauditedΒ |
Β AuditedΒ |
Β UnauditedΒ |
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Β 31.7.08Β |
Β 31.1.08Β |
Β 31.7.07Β |
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Note |
Β Β£000Β |
Β Β£000Β |
Β Β£000Β |
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Β RevenueΒ |
2 |
7,169Β |
11,339Β |
4,080Β |
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Β Cost of salesΒ |
(4,132) |
(6,453) |
(2,326) |
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Β Gross profitΒ |
3,037Β |
4,886Β |
1,754Β |
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Β Other incomeΒ |
6Β |
105Β |
30Β |
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Β Administrative expensesΒ |
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Β Before exceptional itemsΒ |
(2,683) |
(4,036) |
(1,480) |
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Β Exceptional refinancing costsΒ |
3 |
(1,449) |
(126) |
- |
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Β Operating (loss) / profitΒ |
(1,089) |
829 |
304 |
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Β Finance incomeΒ |
36Β |
20Β |
12Β |
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Β Finance expensesΒ |
(125) |
(410) |
(145) |
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Β Net finance expenseΒ |
(89) |
(390) |
(133) |
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Β Share of profit of equity accounted investees (net of tax)Β |
- |
19Β |
- |
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Β (Loss) / Profit before income taxΒ |
(1,178) |
458 |
171 |
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Β Income tax expenseΒ |
4 |
(5) |
(161) |
- |
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Β (Loss) / Profit for the periodΒ |
(1,183) |
297Β |
171Β |
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Β Attributable to:Β |
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Β Equity holders of the CompanyΒ |
(1,183) |
297Β |
171Β |
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Β Basic and diluted earnings per ordinary shareΒ |
5 |
(2.9p) |
1.1pΒ |
0.7pΒ |
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CONDENSED CONSOLIDATED INTERIM BALANCE SHEETΒ |
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Β AT 31/7/2008Β |
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Β UnauditedΒ |
Β AuditedΒ |
Β UnauditedΒ |
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Β 31.7.08Β |
Β 31.1.08Β |
Β 31.7.07Β |
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Β ASSETSΒ |
Note |
Β Β£000Β |
Β Β£000Β |
Β Β£000Β |
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Β Non Current AssetsΒ |
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Β Property, plant and equipmentΒ |
2,517Β |
2,319Β |
2,394Β |
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Β Intangible assets - goodwill and relatedΒ |
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Β acquisition intangiblesΒ |
6 |
7,737Β |
7,755Β |
7,761Β |
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Β Investment in equity accounted investeesΒ |
96Β |
96Β |
3Β |
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Β Total Non Current AssetsΒ |
10,350Β |
10,170Β |
10,158Β |
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Β Current AssetsΒ |
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Β InventoriesΒ |
491Β |
277Β |
258Β |
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Β Trade and other receivablesΒ |
623Β |
235Β |
336Β |
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Β Cash and cash equivalentsΒ |
1,882Β |
531Β |
271Β |
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Β Total Current AssetsΒ |
2,996Β |
1,043Β |
865Β |
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Β Total AssetsΒ |
13,346Β |
11,213Β |
11,023Β |
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Β EQUITYΒ |
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Β Share capitalΒ |
4,500Β |
2,407Β |
2,404Β |
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Β Share premiumΒ |
19,363Β |
15,982Β |
15,982Β |
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Β Reverse acquisition reserveΒ |
(16,103) |
(16,349) |
(16,346) |
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Β Capital contribution reserveΒ |
120Β |
120Β |
- |
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Β Retained earningsΒ |
(849) |
297Β |
171Β |
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Β Total EquityΒ |
7 |
7,031Β |
2,457Β |
2,211Β |
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Β LIABILITIESΒ |
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Β Non Current LiabilitiesΒ |
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Β Other payablesΒ |
- |
9Β |
- |
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Β Interest bearing loans and borrowingsΒ |
840Β |
6,150Β |
6,592Β |
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Β Deferred tax liabilitiesΒ |
397Β |
392Β |
236Β |
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Β Total Non Current LiabilitiesΒ |
1,237Β |
6,551Β |
6,828Β |
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Β Current LiabilitiesΒ |
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Β Trade and other payablesΒ |
2,088Β |
1,373Β |
1,164Β |
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Β Tax payableΒ |
(13) |
119Β |
91Β |
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Β Interest bearing loans and borrowingsΒ |
3,003Β |
713Β |
729Β |
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Β Total Current LiabilitiesΒ |
5,078Β |
2,205Β |
1,984Β |
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Β Total LiabilitiesΒ |
6,315Β |
8,756Β |
8,812Β |
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Β Total Equity and LiabilitiesΒ |
13,346Β |
11,213Β |
11,023Β |
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CONDENSED CONSOLIDATED INTERIM CASH FLOW STATEMENTΒ |
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Β FOR THE 6 MONTHS ENDED 31/7/2008Β |
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Β UnauditedΒ |
Β AuditedΒ |
Β UnauditedΒ |
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Β 31.7.08Β |
Β 31.1.08Β |
Β 31.7.07Β |
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Β Β£000Β |
Β Β£000Β |
Β Β£000Β |
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Β Cash flows from operating activitiesΒ |
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Β (Loss) / Profit before taxΒ |
(1,178) |
458Β |
171Β |
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Β Adjustments for:Β |
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Β Share based payments chargeΒ |
37Β |
- |
- |
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Β Depreciation of property, plant and equipmentΒ |
100Β |
176Β |
54Β |
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Β Amortisation of intangible assets and goodwill impairmentΒ |
233Β |
6Β |
- |
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Β Loss / (Profit) on sale of property, plant and equipmentΒ |
13Β |
(2) |
1Β |
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Β Net financial chargesΒ |
89Β |
390Β |
133Β |
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Β Share of profit of equity accounted investees (net of tax)Β |
- |
(19) |
- |
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Β Movement in trade and other receivablesΒ |
(388) |
27Β |
(336) |
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Β Movement in trade and other payablesΒ |
606Β |
433Β |
1,187Β |
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Β Movement in inventoriesΒ |
(214) |
(33) |
(258) |
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Β Cash generated from operationsΒ |
(702) |
1,436Β |
952Β |
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Β Interest paidΒ |
(104) |
(278) |
(145) |
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Β Tax paidΒ |
(132) |
(294) |
- |
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Β Net cash generated from operating activitiesΒ |
(938) |
864Β |
807Β |
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Β Cash flows from investing activitiesΒ |
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Β Purchase of property, plant and equipmentΒ |
(311) |
(80) |
(2,560) |
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Β Acquisition of subsidiary, net of cash acquiredΒ |
1,584Β |
(6,889) |
- |
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Β Dividend receivedΒ |
- |
5Β |
- |
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Β Interest receivedΒ |
36Β |
20Β |
12Β |
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Β Net cash generated by / (used in) investing activitiesΒ |
371Β |
(6,080) |
(1,741) |
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Β Cash flows from financing activitiesΒ |
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Β Proceeds from issue of share capitalΒ |
4,000Β |
2,012Β |
2,012Β |
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Β Net (repayment) / issue of loansΒ |
(3,020) |
4,599Β |
- |
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Β Net cash generated from financing activitiesΒ |
1,351Β |
531Β |
271Β |
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Β Net change in cash and cash equivalentsΒ |
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Β Cash and cash equivalents at start of periodΒ |
531Β |
- |
- |
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Β Cash and cash equivalents at end of periodΒ |
1,882Β |
531Β |
271Β |
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NOTESΒ |
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Β 1. BASIS OF PREPARATIONΒ |
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Β BASIS OF PREPARATIONΒ |
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Β This unaudited interim financial information is for the 6 month period ending 31 July 2008 and isΒ |
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Β prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU and underΒ |
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Β the historical cost convention.Β |
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Β The comparative figures for the financial year ended 31 January 2008 are not the company'sΒ |
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Β statutory accounts for that financial year. Those accounts have been reported on by theΒ |
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Β company's auditors and delivered to the registrar of companies. The report of the auditors wasΒ |
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Β (i) unqualified, (ii) did not include a reference to any matters to which the auditors drewΒ |
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Β attention by way of emphasis without qualifying their report, and (iii) did not contain aΒ |
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Β statement under section 237(2) or (3) of the Companies Act 1985.Β |
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Β INTERIM FINANCIAL INFORMATIONΒ |
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Β The interim financial information for the 6 month period ended 31 July 2008 has not been auditedΒ |
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Β but has been reviewed by the auditors. Their review report for the 6 month period ended 31 JulyΒ |
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Β 2008 is set out on page 17. Figures for the 6 month period ended 31 July 2007 are extracted fromΒ |
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Β the Company's financial records for the period ended 31 July 2007. The financial statements forΒ |
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Β the year ended 31 January 2008 have been reported on by the company's auditors and deliveredΒ |
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Β to the registrar of companies. The report of the auditors was (i) unqualified (ii) did not include aΒ |
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Β reference to any matters to which the auditors drew attention by way emphasis withoutΒ |
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Β qualifying their report, and (iii) did not contain a statement under section 237(2) or (3) of theΒ |
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Β Companies Act 1985.Β |
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Β SIGNIFICANT JUDGEMENTS, KEY ASSUMPTIONS AND ESTIMATION UNCERTAINTYΒ |
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Β The preparation of interim financial statements in conformity with adopted IFRS requiresΒ |
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Β management to make judgements, estimates and assumptions that affect the application ofΒ |
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Β policies and reported amounts of assets and liabilities, income and expenses. The estimates andΒ |
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Β associated assumptions are based on historical experience and various other factors that areΒ |
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|
Β believed to be reasonable under the circumstances, the results of which form the basis ofΒ |
||||||||
|
Β making the judgements about carrying values of assets and liabilities that are not readilyΒ |
||||||||
|
Β apparent from other sources. Actual results may differ from these estimates.Β |
||||||||
|
Β GOING CONCERNΒ |
||||||||
|
Β The Group has in place borrowing facilities up to a maximum of Β£6,342,690. These facilitiesΒ |
||||||||
|
Β are subject to financial performance covenants. They consist of a mortgage of Β£840,000, loan notesΒ |
||||||||
|
Β totalling Β£3,002,690 and a loan facility of Β£2,500,000 which has not been used to date.Β |
||||||||
|
Β The board has prepared a working capital forecast based upon assumptions as to trading and hasΒ |
||||||||
|
Β concluded that the Group has adequate working capital, will meet the financial performanceΒ |
||||||||
|
Β covenants and that therefore it is appropriate to use the going concern basis of preparation forΒ |
||||||||
|
Β this financial information.Β |
||||||||
|
CONSOLIDATIONΒ |
||||||||
|
Β Crawshaw Group plc acquired all the equity and financial instruments of Crawshaw GroupΒ |
||||||||
|
Β Limited on 11th April 2008. Crawshaw Group Limited was the significantly larger merger partnerΒ |
||||||||
|
Β and in line with IFRS 3 is deemed to be the acquirer of the group. Consequently the businessΒ |
||||||||
|
Β combination has been treated as a reverse acquisition.Β |
||||||||
|
Β In accordance with IFRS 3:Β |
||||||||
|
Β The pre combination results of the new group are those of Crawshaw Group Limited group.Β |
||||||||
|
Β The accumulated loss of the group is based on the pre-combination reserves of CrawshawΒ |
||||||||
|
Β Group Limited.Β |
||||||||
|
Β Crawshaw Group plc has been consolidated from the date of its reverse acquisition at the fairΒ |
||||||||
|
Β values as at that date.Β |
||||||||
|
Β Crawshaw Butchers Limited was acquired by Crawshaw Group Limited on 15 April 2007.Β |
||||||||
|
Β Comparative figures therefore only include the trade of Crawshaw Butchers Limited from 15Β |
||||||||
|
Β April 2007.Β |
||||||||
|
Β 2. REVENUEΒ |
||||||||
|
Β The directors have undertaken a review of the Group's continuing operations and its associatedΒ |
||||||||
|
Β business risks and consider that the continuing operations should be reported as a singleΒ |
||||||||
|
Β business segment. The directors consider that the continuing operations represent one productΒ |
||||||||
|
Β offering with similar risks and rewards and should be reported as a single business segment inΒ |
||||||||
|
Β line with the Group's internal reporting framework. All revenue received during the period wasΒ |
||||||||
|
Β received from customers within theΒ United Kingdom.Β |
||||||||
|
Β UnauditedΒ |
Β AuditedΒ |
Β UnauditedΒ |
||||||
|
Β 3. EXCEPTIONAL ITEMSΒ |
Β 31.7.08Β |
Β 31.1.08Β |
Β 31.7.07Β |
|||||
|
Β Β£000Β |
Β Β£000Β |
Β Β£000Β |
||||||
|
Β Refinancing costsΒ |
184Β |
126Β |
- |
|||||
|
Β Acquisition costsΒ |
1,050Β |
- |
- |
|||||
|
Β Impairment of goodwillΒ |
215Β |
- |
- |
|||||
|
Β Refinancing costs are in relation to a change in the company's bankers and acquisition costs andΒ |
||||||||
|
Β goodwill impairment relate to the reverse acquisition of Felix GroupΒ plc.Β |
||||||||
|
Β UnauditedΒ |
Β AuditedΒ |
Β UnauditedΒ |
||||||
|
Β 4. INCOME TAX EXPENSEΒ |
Β 31.7.08Β |
Β 31.1.08Β |
Β 31.7.07Β |
|||||
|
Β Β£000Β |
Β Β£000Β |
Β Β£000Β |
||||||
|
Β The income tax expenses is based on the estimated effectiveΒ |
||||||||
|
Β rate of taxation on trading for the period and represents:Β |
||||||||
|
Β Current taxΒ |
0 |
198 |
- |
|||||
|
Β Deferred tax:Β |
||||||||
|
Β Origination and reversal of timing differencesΒ |
5 |
(37) |
- |
|||||
|
Β Income tax expenseΒ |
5 |
161 |
- |
|||||
|
5. EARNINGS PER ORDINARY SHAREΒ |
||||||||
|
Β Basic earnings per ordinary share have been calculated by using profit after taxation, and theΒ |
||||||||
|
Β average number of qualifying shares of 5p in issue of 40,693,377 (31/1/08: 27,281,282) |
||||||||
|
Β (31/07/07: 23,297,612).Β |
||||||||
|
Β Diluted earnings per ordinary share normally vary from basic earnings per ordinary share due toΒ |
||||||||
|
Β the effect of the notional exercise of outstanding share options. However, the effect of theΒ |
||||||||
|
Β share options of the company is anti-dilutive. The options have therefore not been included inΒ |
||||||||
|
Β the calculation of diluted earnings per ordinary share.Β |
||||||||
|
Β 6. ACQUISITION IN THE PERIODΒ |
||||||||
|
Β The acquired business in the six month period relates to the reverse acquisition of Felix GroupΒ |
||||||||
|
Β plc by Crawshaw Group Limited. Felix Group plc has subsequently changed its name toΒ |
||||||||
|
Β Crawshaw Group plc. Felix Group plc was a non trading cash shell. The acquisition took place onΒ |
||||||||
|
Β 11 April 2008. 100% of the ordinary and preference shares of Crawshaw Group Limited were |
||||||||
|
Β acquired. Crawshaw Group Limited has now changed its name to Crawshaw Holdings Limited.Β |
||||||||
|
Β The consideration payable is made up of:Β |
Β Β£000Β |
|||||||
|
Β Cost of investment at nominal valueΒ |
1,560Β |
|||||||
|
Β Fair value adjustmentΒ |
246Β |
|||||||
|
Β Acquisition consideration payableΒ |
1,806Β |
|||||||
|
Β The acquisition has been accounted for using the purchase method as required by IFRS 3.Β |
||||||||
|
Β The Group has yet to finalise the valuation of intangible assets acquired and therefore the totalΒ |
||||||||
|
Β of intangible assets and goodwill is shown as one number below.Β |
||||||||
|
Β The integration exercise has concentrated to date on maximising the profitability andΒ |
||||||||
|
Β operating efficiency of Crawshaw Group plc and it may be that other fair value adjustmentsΒ |
||||||||
|
Β will arise in the six months ended 31 January 2009.Β |
||||||||
|
Β Goodwill and fair value adjustments have been necessarily calculated on a provisional basisΒ |
||||||||
|
Β and are expected to be finalised for the Group Financial Statements for the year ended 31Β |
||||||||
|
Β January 2009. |
||||||||
|
Β The provisional value of net assets acquired and goodwill and intangible assets arising was asΒ |
||||||||
|
Β follows:Β |
||||||||
|
Β FairΒ |
||||||||
|
Β value ofΒ |
||||||||
|
Β BookΒ |
Β FairΒ |
Β net assetsΒ |
||||||
|
Β valueΒ |
Β valueΒ |
Β assets/Β |
||||||
|
Β prior toΒ |
Β adjust-Β |
Β (liabilities)Β |
||||||
|
Β acquisitionΒ |
Β mentsΒ |
Β acquiredΒ |
||||||
|
Β Β£000Β |
Β Β£000Β |
Β Β£000Β |
||||||
|
Β Trade and other receivablesΒ |
1,423Β |
- |
1,423Β |
|||||
|
Β Cash and cash equivalentsΒ |
1,669Β |
- |
1,669Β |
|||||
|
Β Trade and other payablesΒ |
(1,501) |
- |
(1,501) |
|||||
|
Β Total net assets acquiredΒ |
1,591Β |
- |
1,591Β |
|||||
|
Β Total investment cost (as above)Β |
1,806Β |
|||||||
|
Β Provisional goodwill and intangible assets arisingΒ |
215Β |
|||||||
|
Β From the date of acquisition (11 April 2008) to 31 July 2008, the contribution of CrawshawΒ |
||||||||
|
Β Group plc to the Group results was as follows:Β |
||||||||
|
Β Β£000Β |
||||||||
|
Β RevenueΒ |
- |
|||||||
|
Β Profit before taxΒ |
17Β |
|||||||
|
Β 10,666,667 ordinary shares were issued in order to raise funds at a premium of 32.5p per 5pΒ |
||||||||
|
Β share. The cost of the investment of Crawshaw Group plc in Crawshaw Holdings Limited wasΒ |
||||||||
|
Β Β£1,560,000 representing 31,200,000 5p shares. The value of the shares issued was Β£11,700,000Β |
||||||||
|
Β (37.5p per 5p share) which represented the market value at that date.Β |
||||||||
|
Β The original 240,676,303 1p shares of Crawshaw Group plc were increased to 240,676,350 viaΒ |
||||||||
|
Β the issue of 47 additional shares. These shares were then split into 240,676,350 0.1p ordinaryΒ |
||||||||
|
Β shares and 240,676,350 0.9p deferred shares. The 0.1p ordinary shares were swapped for 5pΒ |
||||||||
|
Β ordinary shares via a 50:1 share exchange, leaving 4,813,527 5p ordinary shares and 240,676,350Β |
||||||||
|
Β 0.9p deferred shares. The additional 31,200,000 issued by Crawshaw Group plc and 10,666,667Β |
||||||||
|
Β shares issued to raise new funds left a total of 46,680,194 issued ordinary 5p shares andΒ |
||||||||
|
Β 240,676,350 0.9p deferred shares at 31 July 2008.Β |
||||||||
|
Β During August 2008, the 240,676,350 0.9p deferred shares were cancelled, leaving the numberΒ |
||||||||
|
Β of issued shares at 46,680,194 5p ordinary shares.Β |
||||||||
|
7. CAPITAL AND RESERVESΒ |
||||||||
|
Β ShareΒ |
Share |
Β Rev. Acq.Β |
Β CapitalΒ |
Β RetainedΒ |
Β TotalΒ |
|||
|
Β Current periodΒ |
Β CapitalΒ |
Premium |
Β ReserveΒ |
Β Cont. Res.Β |
Β EarningsΒ |
Β EquityΒ |
||
|
Β Β£000Β |
Β Β£000Β |
Β Β£000Β |
Β Β£000Β |
Β Β£000Β |
Β Β£000Β |
|||
|
Β Balance at 1 February 2008Β |
2,407Β |
15,982Β |
(16,349) |
120Β |
297Β |
2,457Β |
||
|
Β Total recognised income andΒ |
||||||||
|
Β expense for the periodΒ |
- |
- |
- |
- |
(1,146) |
(1,146) |
||
|
Β Reverse acquisition |
||||||||
|
Β capital adjustmentΒ |
2,093Β |
3,381Β |
(3,754) |
- |
- |
1,720Β |
||
|
Β Proceeds from listingΒ |
- |
- |
4,000Β |
- |
- |
4,000Β |
||
|
4,500Β |
19,363Β |
(16,103) |
120Β |
(849) |
7,031Β |
|||
|
Β Reverse acquisitionΒ |
||||||||
|
Β On 11 April 2008, the company acquired in a share for share exchange the whole of the ordinaryΒ |
||||||||
|
Β share capital of Crawshaw Holdings Limited. The reverse acquisition reserve arises on theΒ |
||||||||
|
Β accounting for the share for share exchange. Reverse acquisition accounting requires thatΒ |
||||||||
|
Β Crawshaw Holdings Limited is treated as the acquirer and the company the acquirer. A reverseΒ |
||||||||
|
Β acquisition reserve arises which represents the difference between the issued equityΒ |
||||||||
|
Β instruments of Crawshaw Holdings Limited immediately before the share for share exchangeΒ |
||||||||
|
Β and the equity instruments of the company along with the shares issued to effect the share for share exchange.Β |
||||||||
|
Β |
||||||||
|
Β The intention of reverse acquisition accounting is to present the group as having alwaysΒ |
||||||||
|
Β existed except that the capital reserves presented in the group balance sheet are those of theΒ |
||||||||
|
Β company in all years and not Crawshaw Holdings Limited. As a result the reverse acquisitionΒ |
||||||||
|
Β reserve arises at 1 February 2007 that being the start of the earliest comparative period.Β |
||||||||
|
Β The movement in the reverse acquisition reserve in the current year in respect of the listingΒ |
||||||||
|
Β proceeds relates to the net consideration received on the issue of the shares.Β |
||||||||
|
Β Share IssueΒ |
||||||||
|
Β In conjunction with the acquisition, 10,666,667 ordinary shares were issued at 37.5p per shareΒ |
||||||||
|
Β raising a total of Β£4,000,000. The premium arising on the issue of these shares was Β£3,467,000.Β |
||||||||
|
Β Prior yearΒ |
Β ShareΒ |
Share |
Β Rev. Acq.Β |
Β CapitalΒ |
Β RetainedΒ |
Β TotalΒ |
||
|
Β CapitalΒ |
Premium |
Β ReserveΒ |
Β Cont. Res.Β |
Β EarningsΒ |
Β EquityΒ |
|||
|
Β Β£000Β |
Β Β£000Β |
Β Β£000Β |
Β Β£000Β |
Β Β£000Β |
Β Β£000Β |
|||
|
Β Balance at 1 February 2007Β |
1,827Β |
12,401Β |
(12,188) |
- |
- |
2,040Β |
||
|
Β Issue of new sharesΒ |
580Β |
3,581Β |
(4,161) |
- |
- |
- |
||
|
Β Total recognised income andΒ |
||||||||
|
expense for the periodΒ |
- |
- |
- |
- |
297Β |
297Β |
||
|
Β Capital contributionΒ |
- |
- |
- |
120Β |
- |
120Β |
||
|
2,407Β |
15,982Β |
(16,349) |
120Β |
297Β |
2,457Β |
|||
|
Β Number of Ordinary 5p sharesΒ |
||||||||
|
Β Share capitalΒ |
Β 31.7.08Β |
Β 31.1.08Β |
Β 31.7.07Β |
|||||
|
000 |
000 |
000 |
||||||
|
Β Balance at 1 FebruaryΒ |
240,676Β |
240,676Β |
182,658Β |
|||||
|
Β Issued for cashΒ |
10,666Β |
58,018Β |
57,680Β |
|||||
|
Β Consolidation of existing 1p sharesΒ |
(235,862) |
- |
- |
|||||
|
Β Share for share exchangeΒ |
31,200Β |
- |
- |
|||||
|
46,680Β |
240,676Β |
240,338Β |
||||||
|
Β Number of Deferred 0.9p sharesΒ |
||||||||
|
Β 31.7.08Β |
Β 31.1.08Β |
Β 31.7.07Β |
||||||
|
000 |
000 |
000 |
||||||
|
Β Balance at 1 FebruaryΒ |
- |
- |
- |
|||||
|
Β Subdivision of existing ordinary sharesΒ |
240,676Β |
- |
- |
|||||
|
240,676Β |
- |
- |
||||||
|
Β AuthorisedΒ |
Β Β£000Β |
Β Β£000Β |
Β Β£000Β |
|||||
|
Β 96,678,257 ordinary shares of 5p eachΒ |
4,834Β |
- |
- |
|||||
|
Β 500,000,000 ordinary shares of 1p eachΒ |
- |
5,000Β |
5,000Β |
|||||
|
4,834Β |
5,000Β |
5,000Β |
||||||
|
Β Allotted, called up and fully paidΒ |
Β Β£000Β |
Β Β£000Β |
Β Β£000Β |
|||||
|
Β 46,680,194 ordinary shares of 5p eachΒ |
2,334Β |
- |
- |
|||||
|
Β 240,338,226 ordinary shares of 1p eachΒ |
- |
- |
2,404Β |
|||||
|
Β 240,676,350 ordinary shares of 1p eachΒ |
- |
2,407Β |
- |
|||||
|
Β 240,676,350 deferred shares of 0.9p eachΒ |
2,166Β |
- |
- |
|||||
|
4,500Β |
2,407Β |
2,404Β |
||||||
|
Β The company was incorporated as Felix Group plc and had an authorised share capital ofΒ |
||||||||
|
Β Β£5,000,000 representing 500,000,000 1p ordinary shares.Β |
||||||||
|
Β The company changed its name to Crawshaw Group plc.Β |
||||||||
|
Β On 11 April 2008, the authorised share capital was decreased to Β£4,833,913 following theΒ |
||||||||
|
Β reverse acquisition of Crawshaw Group plc by Crawshaw Holdings Limited. The shares wereΒ |
||||||||
|
Β reclassified as 96,678,257 ordinary shares of 5p each.Β |
||||||||
|
Β The following describes the nature and purpose of each reserve within owners' equity:Β |
||||||||
|
Β Share premium - amount subscribed for share capital in excess of nominal value.Β |
||||||||
|
Β Retained earnings - cumulative net gains and losses recognised in the consolidated incomeΒ |
||||||||
|
statement.Β |
||||||||
|
Β Reverse acquisition reserve - arises on the reverse acquisition accounting applied to the shareΒ |
||||||||
|
for share exchange of Crawshaw Holdings Limited by the company.Β |
||||||||
|
Β 8. POST BALANCE SHEET EVENTSΒ |
||||||||
|
Β The company cancelled deferred shares representing 90% of the existing shares that wereΒ |
||||||||
|
Β in existence prior to the reverse acquisition of Crawshaw Group plc by Crawshaw HoldingsΒ |
||||||||
|
Β Limited. The nominal value of the shares cancelled was Β£2,166,087, reducing the company'sΒ |
||||||||
|
Β share capital to Β£2,334,009. The company also transferred share premium in relation to theseΒ |
||||||||
|
Β shares of Β£14,383,800, adding Β£16,550,000 to the capital reduction reserve.Β |
||||||||
|
Β 9. RELATED PARTY TRANSACTIONSΒ |
||||||||
|
Β Crawshaw Butchers Limited, a subsidiary of Crawshaw Holdings Limited, holds a 50% shareΒ |
||||||||
|
Β in a partnership which trades under the name of RGV Refrigeration. The operations of theΒ |
||||||||
|
Β partnership comprise of the maintenance and repair of refrigeration machinery for a varietyΒ |
||||||||
|
Β of customers. The group received management charges of Β£6,000 in the period from RGVΒ |
||||||||
|
Β Refrigeration.Β |
||||||||
A copy of the full interim report will be sent to all shareholders today and will be available from the company's registered office : Unit 15 Bradmarsh Business Park, Bow Bridge Close,Β Rotherham,Β S60 1BY, shortly. It will also be published on the Company's websiteΒ www.crawshawgroupplc.com.
For further information please contact:
Crawshaw Group PLC
Lynda Sherratt, Company Secretary,
01709 369 602
Investec Investment Banking
James Grace/Martin Smith
0207 597 5970
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