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Pin to quick picksCreightons Regulatory News (CRL)

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Final Results

30 Jun 2009 10:02

RNS Number : 7630U
Creightons PLC
30 June 2009
 



Creightons Plc

Preliminary announcement

For the year ended 31 March 2009

Chairman's statement

Review of the year

I am pleased to report a pre tax profit of £378,000 for the year ended 31 March 2009 (2008- £503,000). Whilst this is a decrease we consider it to be a creditable performance given the unprecedented trading conditions faced by the Group in the second half of the year. As mentioned in our interim report the trading environment has become very difficult and whilst Christmas trade was in line with expectations underlying sales of all year round products have fallen as consumers cut back their spending and customers have reduced stock levels.

We continue to see consumers switch their allegiance to lower priced products which offer a value proposition. In the second half of the year we focused on maximising the opportunities afforded by this change in consumer buying patterns. We have re-positioned our selling prices and have re-engineered existing and developed new products to take advantage of this change. 

This re-positioning strategy has been applied to The Real Shaving Company brand which has seen sales growth and increased market penetration in both the UK and North America. As part of this strategy we will reduce the level of advertising and promotional expenditure

Raw material prices have increased during the year with a combination of scarce supply in the first half of the year and the high dollar and euro towards the end of the year adversely affecting raw material costs. We have successfully managed to mitigate against the impact of this through an ongoing cost reduction and product review programme.

We have continued to reduce headcount through natural wastage and some targeted redundancies, for which the Group made a P&L charge of £28,000 in the year which has already achieved pay back. We will continue our programme to reduce overheads whilst still retaining our capability to respond to changing circumstances into the coming year.

We have continued with extensive new product development programmes in order to support our customers and to maximise opportunities presented by the changing retail scene.

Financial results

Consolidated Group sales this year were £214,000 lower thalast year (a decrease of 1.4%) at £15,155,000 (2008: £15,369,000). The sales performance of our branded product ranges aimed at price conscious consumers partially offset falling sales to private label and contract customers.

The fall in gross margins was largely in line with the fall in sales. Increased raw material costs, driven by raw material prices did result in a small erosion for gross margin percentage to 40.7% of sales from 40.9% of sales in 2008.

Operating profit before tax for the year was £378,000 (2008: £503,000) representing a 25% reduction. Higher advertising and promotional expenditure together were a significant factor in overheads not falling as far as we would have liked, but it was felt that this expenditure was justifiable and necessary to counter consumer purchasing resistance as the economic situation worsened particularly in the second half of the year.

Interest costs fell with reduced borrowings and lower interest rates combining to reduce the year's charge to £97,000 (2008: £167,000).

Profit after tax of £378,000 (2008: £503,000) therefore shows a very satisfactory performance given the unprecedented trading environment. Diluted earnings per share fell to 0.63p from 0.84 p in 2008 as a result of the reduced Company earnings.  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.

The Group has made significant progress in reducing its financing requirement with borrowing net of cash in hand falling by £1,230,000 to £40,000 (2008: £1,270,000) largely driven by cash generated from operations and reduced working capital requirements.

Current year developments

As I reported to you last year, the Group continues to develop and strengthen its branded portfolio, with greater emphasis being placed on seeking to offer a wider range of value brands at very competitive prices. This strategy has resulted in a number of new customers for these value brands in both the UK and North America.

We believe that sales will continue at depressed levels for the foreseeable future with customers switching to lower price alternatives, which is exemplified by our 2009 Christmas programme with the average price points falling. Coupled with lower purchase and stock commitments from customers, this will inevitably impact adversely on our sales over the next couple as years until consumer and retailer behaviour changes again as the economy recovers.

We also expect our main private label customers to continue to adopt value strategies with sales opportunities in lower priced products offsetting lower sales levels on higher priced products. This too is likely to adversely affect our turnover and margins in the coming year.

There has been some softening of price pressure in the last few months but not sufficient to reduce raw material costs significantly with the impact of weaker sterling continuing to impact adversely on dollar and euro denominated raw materials. We are continuing to develop our supplier network on a global basis to provide the lowest prices for the quality components required to support our business. We will also continue our successful programme of redeveloping and re-engineering our products in order to manage our margins in this exceptionally difficult trading environment.

We will continue to manage our overhead cost base and working capital requirements to ensure they are aligned with the anticipated sales levels of the Group whilst retaining the skill sets necessary to meet any opportunities as they arise.

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 what has been a challenging year.

William McIlroy

Chairman, 29 June 2009

Consolidated income statement

Year ended 31 March

Year ended 31 March

2009

2008

Note

£000

£000

Revenue

15,155

15,369

Cost of sales

(8,994)

(9,088)

Gross profit

6,161

6,281

Distribution costs

(518)

(435)

Administrative expenses

(5,180)

(5,176)

Operating profit

463

670

Investment revenues

12

-

Finance costs

(97)

(167)

Profit before tax

378

503

Tax

-

-

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

378

503

Earnings per share from continuing operations

Basic

1

0.70p

0.93p

Diluted

1

0.63p

0.84p

The profit of the parent company was nil (2008 - nil).

Consolidated statement of recognised income and expense

Year ended

31 March

Year ended

31 March

2009

2008

Note

£000

£000

Net income recognised directly in equity

Exchange differences on translation of foreign operations

(76)

5

Gains on cash flow hedges taken to equity

179

-

Profit for the period

378

503

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

481

508

Consolidated balance sheet - at 31 March 2009

31 March

31 March

2009

2008

Note

£000

£000

Non-current assets

Goodwill

331

331

Other intangible assets

112

63

Property, plant and equipment

435

495

878

889

Current assets

Inventories

2,550

2,907

Trade and other receivables

1,537

2,065

Cash and cash equivalents

194

79

Derivative financial instruments

191

-

4,472

5,051

Total assets

5,350

5,940

Current liabilities

Trade and other payables

1,576

1,513

Obligations under finance leases

14

14

Bank overdrafts and loans

234

1,349

Derivative financial instruments

-

12

1,824

2,888

Net current assets

2,648

2,163

Non-current liabilities

Obligations under finance leases

24

38

24

38

Total liabilities

1,848

2,926

Net assets

3,502

3,014

Equity

Share capital

2

543

543

Share premium account

3

1,229

1,229

Capital redemption reserve

3

18

18

Capital reserve

3

7

7

Special reserve

3

13

13

Share-based payment reserve

3

63

56

Retained earnings

3

1,521

1,143

Foreign exchange reserves

4

108

5

Total equity available to the holders of the parent company

3,502

3,014

Company balance sheet - at 31 March 2009

31 March

31 March

2009

2008

Note

£000

£000

Non-current assets

Investment in subsidiaries

60

60

60

60

Current assets

Trade and other receivables

2,025

2,018

2,025

2,018

Total assets

2,085

2,078

Current liabilities

Trade and other payables

35

35

35

35

Net current assets

1,990

1,983

Total liabilities

35

35

Net assets

2,050

2,043

Equity

Share capital

2

543

543

Share premium account

3

1,229

1,229

Capital redemption reserve

3

18

18

Special reserve

3

1,441

1,441

Share-based payment reserve

3

63

56

Retained earnings

3

(1,244)

(1,244)

Total equity available to the holders of the parent company

2,050

2,043

Consolidated cash flow statement 

Year ended

31 March

Year ended

31 March

2009

2008

Note

£000

£000

Net cash inflow from operating activities

5

1,438

830

Cash flow from investing activities

Purchase of property, plant and equipment

(69)

(122)

Expenditure on intangible assets

(125)

(28)

Net cash used in investing activities

(194)

(150)

Cash flow from financing activities

Repayment of finance lease obligations

(14)

(13)

Decrease in bank overdrafts

(1,115)

(602)

Net cash used in financing activities

(1,129)

(615)

Net increase in cash and cash equivalents

115

65

Cash and cash equivalents at start of period

79

14

Cash and cash equivalents at end of period

194

79

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 2009.

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

2009

2008

£000

£000

Earnings

Net profit attributable to the equity holders of the parent company

378

503

Year ended 31 March

Year ended

31 March

2009

2008

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

5,426,550

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

59,702,426

59,702,426

2. Share capital

Ordinary shares of 1p each

2009

2008

£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 2007

543

1,229

18

7

13

52

640

2,502

Additional provision

-

-

-

-

-

4

-

4

Net profit for the year

-

-

-

-

-

-

503

503

At 31 March 2008

543

1,229

18

7

13

56

1,143

3,009

Additional provision

-

-

-

-

-

7

-

7

Net profit for the year

-

-

-

-

-

378

378

At 31 March 2009

543

1,229

18

7

13

63

1,521

3,394

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 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

Additional provision

-

-

-

-

7

-

7

Net loss for the year

-

-

-

-

-

-

-

At 31 March 2009

543

1,229

18

1,441

63

(1,244)

2,050

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 2009 goodwill written off amounts to £2,575,000 (2008: £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.

4. Hedging and translation reserves

Group

Hedging reserve

Translation 

reserve

Total

£000

£000

£000

At 1 April 2007

-

-

-

Exchange differences on translation of foreign operations

-

5

5

At 31 March 2008

-

5

5

Gain on cash flow hedges

179

-

179

Exchange differences on translation of foreign operations

(76)

(76)

At 31 March 2009

179

(71)

108

5Notes to cash flow statement

Group

Year ended 31 March 

Year ended

31 March

2009

2008

£000

£000

Profit from operations

463

670

Adjustments for:

Depreciation on property plant and equipment

129

158

Amortisation of intangible assets

76

101

Share based payment charge

7

4

Other non cash items

(88)

13

587

946

Decrease in inventories

357

906

Decrease/(increase) in trade and other receivables

528

(9)

Increase/(decrease) in trade and other payables

63

(846)

Cash generated from operations

1,535

997

 

Interest paid

(97)

(167)

Cash inflow from operational activity

1,438

830

Company

Year ended 31 March 

Year ended

31 March

2009

2008

£000

£000

Profit from operations

-

-

Adjustments for:

Share based payment charge

7

4

7

4

(Increase) in trade and other receivables

(7)

(4)

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 2008.

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 2009 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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