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Pin to quick picksCreightons Regulatory News (CRL)

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Final Results

26 Jun 2008 14:44

RNS Number : 6300X
Creightons PLC
26 June 2008
 

Creightons Plc

Preliminary announcement

For the year ended 31 March 2008

Chairman's Statement

Review of the year

As I reported to you last November with our interim report for the first half of the financial year, we have been driving to expand our business, and as you will see below, I am pleased to be able to say that we have continued the growth I told you about then. 

We have also been focusing on developing our higher margin business, discontinuing products with lower margins, whilst continuing to strive to be a low cost producer in what is an increasingly competitive and price conscious commercial environment.  We have experienced significant price resistance from not only our own customers, both the High Street supermarkets and specialist retailers for whom we manufacture private label branded products and undertake contract manufacture, but also consumers who buy our own branded products through these outlets. 

Development of our own brands has continued apace, with the launch of The Real Shaving Company's products in the North American market, where we established a new wholly-owned subsidiary to manage sales and marketing in May 2007. We recently launched the Natural Grooming range of shaving products in the UK, and continue to roll-out new private label brands.

Financial results

Consolidated Group sales this year were up £2,452,000 (an increase of 19.0%) at £15,369,000 (2007: £12,917,000). This significantly improved result has been achieved mainly through increases in the volume of private label and contract manufactured product. Sales and gross profit were again up in the second half of the year due to seasonal contractual business at Christmas. 

Operating profit before tax for the year was £670,000 (2007: £461,000) a 45.3% increase of £209,000. Several factors contributed to this increase being significantly ahead of sales growth, including the flow through of cost saving initiatives invested in during previous years which I have previously reported to you, continued focus on achieving low-cost producer status despite significant cost inflation, and further rationalisation of our product ranges to eliminate low margin items or contracts.

We have experienced an increase in interest charges mainly as a result of financing higher levels of inventory during the year which were required to service new branded and private label product introductions. 

Profit after tax of £503,000 (2007: £383,000) shows a very satisfactory growth of £120,000, 31.3% over last year, with diluted earnings per share of 0.84p (2007: 0.65p). The directors do not consider it is in the best interests of the Company to declare a dividend at the moment, using the funds generated from this year's successful trading to reduce the Group's borrowings.

Current year developments

As in previous years, the Group continues to develop and strengthen its branded portfolio, with new brands launched into the premium and middle markets.

Since the beginning of the current financial year however, a number of adverse factors have started to affect our business, including the down-turn in consumer confidence and spending that is affecting all sections of the economy, inflationary pressures on raw material prices in general, and on oil-based products in particular (which as manufacturers of personal care products make up a significant element of our costs).  We are also suffering the adverse impact of the recent decline in the value of sterling, since we purchase a significant proportion of our raw materials in US dollars and Euros and so have further cost pressures.

In response to consumer demand for more natural based products, we have just launched improved versions of our Real Shave and Natural Grooming ranges which are free from Parabens, Sodium Lauryl Ethyl Sulphate and AlcoholRecognising the contribution we all need to make in combating global warming, we are also well advanced with plans for many of our products and brands to become carbon neutral next year.

We are continuing to exploit and develop our branded product ranges in the North American market, although keeping actual investment to a minimum whilst ensuring they have adequate support and distribution in this highly attractive but very competitive market.

 

We are also meeting the challenges of tighter consumer spending at home by seeking to offer a wider range of value brands at very competitive prices. We are combating the upward pressure on costs I mention above by reorganising our buying and product development departments to operate on the basis that we buy globally at the lowest possible price and use our development skills to reap the benefits of economies of scale and by using the same components in different ranges, although we ensure that this is without damaging the individual characteristics of our branded products. 

We are also continuing to manage our working capital and stocks in order to keep borrowing to a minimum given the present high cost of capital.

As in previous years, your board is continuing to seek opportunities to acquire brands or companies that would complement the existing businesses by offering synergies in manufacturing, sourcing and marketing due to similarities in product alignment, sourcing or outlets.

I would like to take this opportunity to thank each and every one of the Group's employees for the hard work and effort they have put in over the past year.

William McIlroy

Chairman, 26 June 2008

Consolidated income statement

Year ended 31 March

Year ended 31 March

2008

2007

£000

£000

Revenue

15,369

12,917

Cost of sales

(9,088)

(7,789)

Gross profit

6,281

5,128

Distribution costs

(435)

(378)

Administrative expenses

(5,176)

(4,289)

Operating profit

670

461

Investment revenues

-

1

Finance costs

(167)

(79)

Profit before tax

503

383

Tax

-

-

Profit for the period from continuing operations attributable to the equity holders of the parent company

503

383

Earnings per share from continuing operations

Basic

0.93p

0.71p

Diluted

0.84p

0.65p

The company has elected to take exemption under S230 of the Companies Act 1985 not to present the parent company's income statement.

The loss of the parent company was nil (2007 - £5,000).

Consolidated statement of recognised income and expense

Year ended

31 March

Year ended

31 March

2008

2007

£000

£000

Net income recognised directly in equity:

Exchange differences on translation of foreign operations

5

-

Profit for the period

503

383

Total recognised income and expense for the period wholly attributable to the equity holders of the parent

508

383

Consolidated balance sheet - at 31 March 2008

31 March

31 March

2008

2007

£000

£000

Non-current assets

Goodwill

331

331

Other intangible assets

63

136

Property, plant and equipment

495

517

889

984

Current assets

Inventories

2,907

3,813

Trade and other receivables

2,065

2,056

Cash and cash equivalents

79

14

5,051

5,883

Total assets

5,940

6,867

Current liabilities

Trade and other payables

1,513

2,359

Obligations under finance leases

14

11

Bank overdrafts and loans

1,349

1,951

Derivative financial instruments

12

4

2,888

4,325

Net current assets

2,163

1,558

Non-current liabilities

Obligations under finance leases

38

40

38

40

Total liabilities

2,926

4,365

Net assets

3,014

2,502

Equity

Share capital

543

543

Share premium account

1,229

1,229

Capital redemption reserve

18

18

Capital reserve

7

7

Special reserve

13

13

Share-based payment reserve

56

52

Retained earnings

1,148

640

Total equity 

3,014

2,502

Company balance sheet - at 31 March 2008

31 March

31 March

2008

2007

£000

£000

Non-current assets

Investment in subsidiaries

60

60

60

60

Current assets

Trade and other receivables

2,018

2,014

2,018

2,014

Total assets

2,078

2,074

Current liabilities

Trade and other payables

35

35

35

35

Net current assets

1,983

1,979

Total liabilities

35

35

Net assets

2,043

2,039

Equity

Share capital

543

543

Share premium account

1,229

1,229

Capital redemption reserve

18

18

Special reserve

1,441

1,441

Share-based payment reserve

56

52

Retained earnings

(1,244)

(1,244)

Total equity 

2,043

2,039

Consolidated cash flow statement 

Year ended

31 March

Year ended

31 March

2008

2007

£000

£000

Net cash inflow/(outflow) from operating activities

836

(1,310)

Cash flow from investing activities

Proceeds on disposal of property, plant and equipment

-

8

Purchase of property, plant and equipment

(128)

(251)

Expenditure on intangible assets

(28)

(107)

Net cash used in investing activities

(156)

(350)

Cash flow from financing activities

Repayment of finance lease obligations

(13)

(14)

(Decrease)/increase in bank overdrafts

(602)

1,611

Net cash (used in)/from financing activities

(615)

1,597

Net increase/(decrease) in cash and cash equivalents

65

(63)

Cash and cash equivalents at start of period

14

77

Cash and cash equivalents at end of period

79

14

The Company cash flow statement is not disclosed as there were no movements after net cash from operating activities during the two years ended 31 March 2008.

Notes to preliminary announcement

1 Earnings per share

The calculation of the basic and diluted earnings per share is based on the following data:

Year ended 31 March 

Year ended

31 March

2008

2007

£000

£000

Earnings

Net profit attributable to the equity holders of the parent company

503

383

Year ended 31 March

Year ended

31 March

2008

2007

Number

Number

Number of shares

Weighted average number of ordinary shares for the purposes of basic earnings per share

54,275,876

54,275,876

Effect of dilutive potential ordinary shares relating to share options

5,426,550

4,256,550

Weighted average number of ordinary shares for the purposes of diluted earnings per share

59,702,426

58,532,426

2. Share capital

Ordinary shares of 1p each

2008

2007

£000

Number

£000

Number

Authorised

1,223

122,346,000

1,223

122,346,000

Issued and fully paid

543

54,275,876

543

54,275,876

The Company has one class of ordinary shares which carry no right to fixed income.

3Statements of reserves and changes in equity

Group

Share capital

Share premium account

Capital redemption reserve

Capital reserve

Special

reserve

Share-based payment reserve

Retained

reserve

Total

equity

£000

£000

£000

£000

£000

£000

£000

£000

At 1 April 2006 

543

1,229

18

7

13

47

257

2,114

Additional provision

-

-

-

-

-

5

-

5

Net profit for the year

-

-

-

-

-

-

383

383

At 31 March 2007

543

1,229

18

7

13

52

640

2,502

Additional provision

-

-

-

-

-

4

-

4

Net profit for the year

-

-

-

-

-

-

508

508

At 31 March 2008

543

1,229

18

7

13

56

1,148

3,014

Company

Share capital

Share premium account

Capital redemption reserve

Special

reserve

Share-based payment reserve

Retained

reserve

Total

equity

£000

£000

£000

£000

£000

£000

£000

At 1 April 2006

543

1,229

18

1,441

47

(1,239)

2,039

Additional provision

-

-

-

-

5

-

5

Net loss for the year

-

-

-

-

-

(5)

(5)

At 31 March 2007

543

1,229

18

1,441

52

(1,244)

2,039

Additional provision

-

-

-

-

4

-

4

Net loss for the year

-

-

-

-

-

-

At 31 March 2008

543

1,229

18

1,441

56

(1,244)

2,043

The Company obtained a court ruling dated 19 March 1997 under which the reduction in share premium was credited to a special reserve. The special reserve was first used to write off the deficit on the company profit and loss account and then to write off the goodwill arising on the acquisition of Crestol Limited to the Group profit and loss account. At 31 March 2008 cumulative goodwill written off amounted to £2,575,000 (2007: £2,575,000)

Under the court ruling, the special reserve may be used to write-off goodwill on any further acquisition. To the extent that there shall remain any sum standing to the credit of the reserve, it shall be treated as unrealised profit and as a non-distributable reserve, until such time as the creditors existing at the date of the ruling have been satisfied or consent to its distribution.

4Notes to cash flow statement

Group

Year ended 31 March 

Year ended

31 March

2008

2007

£000

£000

Profit from operations

670

461

Adjustments for:

Investment revenues

-

1

Depreciation on property plant and equipment

164

117

Amortisation of intangible assets

101

55

(Gain) on disposal of property, plant and equipment

-

(6)

Share based payment charge

4

5

Other non cash items

13

4

952

637

Decrease/(increase)  in inventories

906

(2,008)

Increase in trade and other receivables

(9)

(728)

(Decrease)/ increase in trade and other payables

(846)

868

Cash generated from / (absorbed by) operations

1,003

(1,231)

 

Interest paid

(167)

(79)

Cash inflow/(outflow) from operating activities

836

(1,310)

Additions to plant and equipment during the year amounting to £14,000 (2007 - £47,000) were financed by new finance leases.

Cash and cash equivalents (which are presented as a single asset on the face of the balance sheet) comprise cash at bank and in hand.

Company

Year ended 31 March 

Year ended

31 March

2008

2007

£000

£000

Loss from operations

-

(5)

Adjustments for:

Share based payment charge

4

5

4

-

(Increase)/decrease in trade and other receivables

(4)

89

Decrease in trade and other payables

-

(89)

Cash absorbed by operations

-

-

Interest paid

-

-

Cash outflow

-

-

Cash and cash equivalents (which are presented as a single asset on the face of the balance sheet) comprise cash at bank and in hand.

The financial information above does not constitute full accounts within the meaning of section 240 of the Companies Act 1985. The financial information presented above has been prepared in accordance with the accounting policies published in the financial statements for the year ended 31 March 2007.

The preliminary statement of results has been reviewed and agreed with the Company's auditor, Chantrey Vellacott DFK LLP, who have indicated that they will be giving an unqualified opinion in their report on the statutory financial statements.

Copies of the annual report and consolidated financial statements for the year ended 31 March 2008 will be sent to shareholders in due course. Further copies will be available from the Company's registered office at 1210 Lincoln RoadPeterboroughPE4 6ND.

This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
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