Creightons Regulatory News (CRL)

25 Nov 2009 07:00



Creightons plc

Interim financial report

For the six months ended 30 September 2009

Chairman's Statement

I am pleased to report to you that losses in the first six months to 30 September 2009 at £116,000 are an improvement of £59,000 on the year to 30 September 2008 of £175,000. It should be noted that the cyclical nature of the Company's business means that it usually trades at a loss in the first half of the year. This improvement has been achieved despite a reduction in sales as against the same period last year.

The first six months of the year has been particularly challenging with a reduction in sales of £1,282,000 to £5,675,000 (2008 - £6,957,000). There has been a significant reduction in the sales of private label products. This reduction in sales is partly due to a continued drive to reduce stock levels on the part of our customers and partly relates to a reduction in sales relating to customers and ranges with relatively high retail selling prices. This sales reduction has been partially offset by a growth in sales of our branded ranges, particularly those products which are targeted at the discount market sector.

Our gross margins have improved by 0.2% compared to the same period last year in the main due to ongoing work to reduce raw material costs. This margin improvement has been achieved despite the adverse impact of the reduction in sales of products with relatively higher selling prices. 

As mentioned in last year's interim report we have reduced our investment in promoting our branded ranges and focused on driving sales to increasingly price sensitive consumers. This strategy has paid dividends in this period as the contribution from our branded product ranges has increased. The reduction in costs includes a saving of £41,000 relating to a reduction in salaries on the part of some employees. The agreement with these employees states that this reduction will be repaid if the company returns to profit in the financial year ended 31 March 2010.

We have continued to consolidate the presence of our brands in the North American market with sales in the six months to 30 September 2009 of £270,000 (2008: £267,000) deriving from a wider customer base and the launch of additional price competitive product ranges.  We intend to continue driving sales growth based on a value driven marketing strategy.

We have maintained our staffing levels in key areas of our business. We will continue to review our overhead structure to ensure it matches revenue projections and new product launch opportunities from new and existing customers.

Our operating loss in the period has decreased by £10,000 (8%) to £104,000 (2008: £114,000).  We expect our seasonal sales to be lower than last year and this will have an impact on the results for the end of the year. We continue to be cautious regarding the underlying level of retail sales. 

We have continued our programme of reducing stock levels, which have fallen by £393,000 to £3,690,000 (2008: £4,083,000). The increase in inventories from March relates to seasonal stock build. While we anticipate that underlying stock levels will continue to reduce, new launch activity in the second half of the year may result in increased stock levels compared to the same period last year.

Lower interest rates and significantly reduced borrowings in the first half of the year have resulted in a reduced interest cost of £12,000 (2008: £61,000). 

I believe that this half year's pre-tax loss at £116,000 (2008: loss of £175,000) is a creditable performance in the current economic climate and puts the business in a strong position to take advantage of any economic upturn when it materialises.

W O McIlroy

Executive Chairman

25 November 2009

Responsibility statement

We confirm that to the best of our knowledge:

The condensed set of financial statements has been prepared in accordance with IAS 34:

The interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year; and

The interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of material related party transactions and changes therein).

By order of the Board

Nicholas O'Shea

Company Secretary and Director

Creightons plc

Interim financial report

For the six months ended 30 September 2009

Consolidated income statement - unaudited

Earnings per share

Consolidated statement of recognised income and expense

Creightons plc

Interim financial report

30 September 2009

Consolidated balance sheet - unaudited

Creightons plc

Interim financial report

For the six months ended 30 September 2009

Statement of changes in shareholders equity - unaudited

Statement of changes in hedging and translation reserves - unaudited

Creightons plc

Interim financial report

For the six months ended 30 September 2009

Consolidated cash flow statement - unaudited

Creightons plc

Interim financial report

For the six months ended 30 September 2009

Notes to the interim financial report

1. Basis of preparation

The condensed financial statements in this Interim Report have been prepared in accordance with the requirements of IAS 34 'Interim Financial Reporting' as adopted by the European Union.

As required by the Disclosure and Transparency Rules of the UK's Financial Services Authority, the condensed set of financial statements has been prepared by applying the accounting policies and presentation that were applied in the preparation on the Company's published consolidated financial statements for the year ended 31 March 2009, which were prepared in accordance with International Financial Reporting Standards as adopted by the European Union.

The condensed interim financial statements for the six months ended 30 September 2009 and the comparative figures for the six months ended 30 September 2008 are unaudited and have not been reviewed by the Auditors. The summary financial statements for the year ended 31 March 2009 represent an abbreviated version of the Group's full financial statements for that year, on which the Auditors issued an unqualified audit report and which have been filed with the Registrar of Companies.

2. Earnings per share

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

3. Related party transactions

The related party transactions that occurred in the six months ended 30 September 2009 are not materially different in size or nature to those reported in the Company's Annual Report for the year ended 31 March 2009.

4. Availability of Interim Report

The Interim Report is being sent to shareholders. Further copies can be obtained from the Company's Registered Office, 1210 Lincoln Road, Peterborough, Cambridgeshire, PE4 6ND.