Creightons Regulatory News (CRL)

27 Jul 2005 17:17

Creightons PLC27 July 2005 Creightons plc Preliminary results for the year ended 31 March 2005 Chairman's statement Review of the year This year has been one of consolidation and investment in our branded business.We undertook a significant rationalisation at the end of the year with thedecision to transfer manufacturing of a significant portion of our products toPeterborough and the subsequent agreements to dispose of the Company's premisesat Storrington. Before the resultant exceptional costs associated with thisreorganisation the Group has again achieved profitable results. At Potter and Moore Innovations Limited, further progress has been made,rationalising the huge product range, reducing unnecessary overheads, andimproving manufacturing performance and operations. The board entered into negotiation with potential purchasers for the Storringtonsite towards the end of the financial year, having taken the decision inprinciple to dispose of the site and transfer manufacturing to Peterborough ifsatisfactory offers could be obtained. Since shareholders' approval for the disposals was given on 30th June, work hasstarted to transfer and consolidate most of Creightons plc's manufacturing andadministration functions at the Peterborough plant operated by Potter & MooreInnovations Ltd. However, as indicated in last year's report and in my Interim report toshareholders last December, we will continue to operate the Creightons andPotter & Moore businesses separately, although we will seek to achieve savingsin administrative and manufacturing operations without jeopardising eachbusinesses' unique skills, product offerings and customer relationships. Financial results Consolidated Group Sales this year were £11,354,000 (2004: £12,238,000). The 7%reduction from last years result has been mainly due to rationalisation of theCreightons branded ranges, focusing on higher margin business. Sales and GrossProfit were both higher in the second half due to the seasonal contract businessat Christmas. The Group has continued to strive for low cost producer status,without compromising on product or service level quality. We have made further investment in marketing, sales, and technical R&D support,increasing headcount to strengthen our teams in all these areas. Subsequent tothe yearend we have increased resources dedicated to securing improved sourcingwith the aim of continuing our drive to reduce product costs. The board believes that although these investments have increased overheads inthis year, they have provided the business with greater ability to deliver new,innovative products, meet our customers service and product qualityexpectations, and will result in improved results in the coming years. As weanticipated, these investments did result in lower profit in the second half,with operating profit before, exceptional costs, interest and tax of £216,000(2004 £431,000). After interest of £161,000 (2004: £214,000), the Group hasachieved profit before exceptional costs of £55,000 (2004: £217,000). Areorganisation charge of £431,000 (2004: £nil) has been made representing thecosts of the transfer of Storrington based operations to Peterborough, resultingin retained loss for the year of £376,000 (2004: earnings of £202,000), withdiluted loss per share of 0.63p (2004: earnings of 0.34p). It is worth notingthat the gain on disposals of the Storrington site is anticipated to be£401,000, which cannot be booked against the reorganisation costs since it wasnot realised in the year ended 31 March 2005, and so will impact in the currentyear. During the year we negotiated a term loan secured on our freehold property withour new bankers. This had the advantage of converting the short-term overdraftinto long term loans and aligning our fixed assets and long term finance. The directors are not in a position to declare a dividend this year. Current year developments As I mention above, the disposal of the Storrington site is expected to generatea net profit in the current year of £401,000, whilst the costs of the resultantreorganisation have already been provided in the £431,000 exceptional item thisyear. We will also be seeking additional synergistic cost savings on top ofthis. On 15th July, we announced the appointment of Bill Glencross as ManagingDirector of Potter & Moore Innovations Limited, the contracting part of theGroup's business, to ensure continued focus is maintained on the key contractspart of the Group's operations. Your board is also continuing to seek opportunities to acquire brands orcompanies that would complement the existing businesses by offering synergies inmanufacturing, 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'semployees for the hard work and effort they have put in over the past year. William McIlroy Chairman, 27th July 2005 Consolidated profit and loss accountFor the year ended 31 March 2005 2005 2005 2004 2004 Note £000 £000 £000 £000 Turnover Continuing operations 11,354 12,238 Cost of sales (7,040) (7,794) Gross Profit 4,314 4,444 Operating expenses (4,105) (4,031)Other operating income 7 18 (431)Exceptional costs - Total operating expenses (4,529) (4,013) Operating profit (215) 431 Net interest payable (161) (214) (Loss)/profit on ordinary activities before taxation (376) 217 Tax on (loss)/profit/ on ordinary activities (-) (15) (Loss)/profit on ordinary activities after taxation (376) 202 Retained (loss)/profit for the year (376) 202 Basic (loss)/profit per share 1 (069)p 0.37p Diluted (loss)/profit per share 1 (0.63)p 0.34p The turnover and operating (loss)/profit arose from continuing operations. The Group had no gains or losses other than the above results. There is no difference between the results shown above and their historical cost Note to consolidated profit and loss Account 1. (Loss)/profit per share The calculation of the basic loss per share is based on the loss after taxationof £376,000 (2004 - profit £202,000) and 54,275,876 (2004 - 54,275,876)ordinary shares, the weighted average number of shares in issue during theperiod. The calculation of the diluted loss per share is based on the basicloss per share, adjusted for the effect of all dilutive options. Consolidated balance sheet At 31 March 2005- 2005 2005 2004 2004 £000 £000 £000 £000 Fixed assetsTangible assets 1,589 1,700Intangible assets 3 8Goodwill 296 330 1,888 2,038 Current assetsStocks 2,088 1,537Debtors 1,606 1,946Cash at bank 1 1 3,695 3,484 Creditors: amount falling due within one year (3,441) (3.850) Net current assets/(liabilities) 254 (366) Total assets less current liabilities 2,142 1,672 Creditors: amount falling due after morethan one year (892) (46) Provisions for liabilities and charges (15) (15) Net Assets 1,235 1,611 Capital and ReservesCalled up share capital 543 543Share premium account 1,229 1,229Capital redemption reserve 18 18Capital reserve 7 7Special Reserve 13 13Profit and loss account (575) (199) Equity shareholders funds 1,235 1,611 Consolidated statement of cash flow For the year ended 31 March 2005 2005 2004 Note £000 £000 Cash from operating activities 1 279 (110) Returns on investments and servicing of finance 2 (161) (214) Taxation - - Capital expenditure and financial investments 3 (86) (109) Cash inflow/(outflow) before management ofliquid resources and financing 32 (433)Financing 4 642 193Increase/(decrease) in cash in the year 674 (240) Reconciliation of net cash flow to movement in net debt Increase/(decrease) in cash in the year 674 (240)Cash outflow from repayment of debt 255 69 929 (171)New loans (900) (262) Movement in net debt in the year 29 (433) Net debt at the start of the rear (2,233) (1,800) Net debt at the end of the year (2,204) (2,233) Notes to consolidated statement of cash flow For the year ended 31 March 2005 1. Reconciliation of operating loss to operating cash flow 2005 2004 £000 £000 Operating (loss)/profit (215) 431Depreciation charges 196 205Amortisation of goodwill 34 34Amortisation of intangible assets 5 5Loss/(profit) on disposal of fixed assets 1 (2)(Increase) in stocks (551) (890)Decrease/(increase) in debtors 340 (779)Increase in creditors 469 886 Net cash inflow/(outflow) from operations 279 (110) 2. Returns on investments and servicing of finance 2005 2004 £000 £000 Interest received 1 1Interest paid (158) (212)Interest element of HP payments (4) (3) Net cash (outflow) for returns on investmentsand servicing of finance (161) (214) 3. Capital expenditure and financial investments 2005 2004 £000 £000 Purchase of tangible fixed assets (96) (101)Purchased goodwill 0 (19)Sale of tangible fixed assets 10 11 Net cash (outflow) from capital expenditureand financial investments (86) (109) Notes to consolidated statement of cash flow (continued)For the year ended 31 March 2005 4. Financing 2005 2004 £000 £000 Other loans 900 162Repayments of amounts borrowed (220) (50)New hire purchase agreements 0 100Capital element of HP payments (38) (19) Net cash inflow from financing 642 193 5. Analysis of changes in net debt At 1 April Cash flow At 31 March 2004 2005 £000 £000 £000 Cash at bank and in hand 1 0 1Overdrafts (1,295) 674 (621) (1,294) 674 (620) Debt due within one year (854) 201 (653)Debt falling due over one year 0 (881) (881)HP contracts (85) 38 (47) (939) (642) (1,581) Net debt (2,233) 32 (2,201) The preliminary statement of results has been reviewed and agreed with theCompany's auditors, Chantrey Vellacott DFK LLP, who have indicated that theywill be giving an unqualified opinion in their report on the statutory financialstatements. Copies of the report and accounts for the year ended 31 March 2005 will be sentto shareholders in due course. Further copies will be available from theCompany's registered office, which is now at 1210 Lincoln Road, Peterborough, PE4 6ND. This information is provided by RNS The company news service from the London Stock Exchange