Creightons Regulatory News (CRL)

28 Nov 2007 09:27

Creightons PLC28 November 2007 Creightons plc Interim financial report For the six months ended 30 September 2007 Chairman's Statement We have continued our drive to expand the business, so I am very pleased toreport to you that this has resulted in an increase in sales over the past sixmonths of over 30% generating £6,477,000 (2006 £4,944,000) sales in the halfyear to 30th September 2007. This organic growth has been achieved across allareas of our business, the main contributing factors being range launches with amajor UK High Street supermarket and the introduction of a major drugstore chainas a new private label customer. This growth has been achieved in a periodwhere the retail sales environment has become increasingly challenging andwhere increases in raw material costs, particularly for oil-price based productswhich constitute a major proportion of our product costs, are seriously erodingmargins. As I have told you in previous reports, we decided several years ago to investin our production, technical and sales teams to support the expansion of ourbranded business, including in particular the continued development of The RealShaving Company brand which we first launched in December 2004, and subsequentlygained several industry awards for this new and innovative brand. In May 2007 we established a subsidiary in the US to manage development of ourbrands into the North American market. Their sales in the six months to 30thSeptember were £118,000 (2006: £nil) mostly from the launch of The Real ShavingCompany range into a major Canadian retail chain in September. This means thatThe Real Shaving Company brand is now listed in over 3,000 stores in the UK andNorth America. We have made significant investment in developing opportunitiesacross America. We anticipate a successful product listing will be achieved witha major US retail chain in the immediate future, which will continue theprogress in developing equity in the brand. We have also continued to drive the development of the premium Potter & Moorebrand in the UK and export markets, with product listings in many premiumdepartment stores. Whilst most of the brand ranges developed last year have been successful onerange has not met expectations and we have commenced a planned withdrawal ofthis product which will continue into the second half of the year. Given theindustry norm of failure for new brands of more than four out of every five newbrand launches, this clearly vindicates your board's approach to new brandintroduction. We have increased resources in production to meet the increase in demand and insales and technical departments to facilitate our ability to drive the businessand meet the technical requirements of supporting our customers. The impact ofthese changes is to increase overheads. We have achieved a Soil Associationaccreditation in the period which will help progress sales opportunities in thefast growing organic sector. Our operating loss in the period has decreased by £45,000 (31%) to £99,000(2006:£144,000) compared to last year. This is a creditable improvement takinginto consideration the investments made in the business and the pressure ongross margins. It should be noted that the Group trades at a loss in the firsthalf ahead of the seasonally stronger second half. We have made significant investment in inventories to meet the demands of newproduct launches and new customers. The increase in inventories relates toseasonal stock build, with stock levels excluding seasonal stocks falling by£323,000 since March 2007. We anticipate that our programme to reduce stocks ina planned manner will produce further reductions in the second half of the year. Higher interest rates and increased costs to support the investment in stockshave resulted in an increased interest charge of £50,000 compared with the sameperiod last year. I therefore believe that this half year's pre-tax loss at £179,000 (2006: lossof £174,000), whilst disappointingly a small increase on last year's, provides agood base for the second half of the year. W O McIlroyExecutive Chairman 27 November 2007 Creightons plc Interim financial report For the six months ended 30 September 2007 Consolidated income statement - unaudited Six months ended 30 September Year ended 31 March 2007 2006 2007 Note £000 £000 £000Revenue 6,477 4,944 12,917Cost of sales (3,946) (2,910) (7,789) Gross profit 2,531 2,034 5,128 Distribution costs (222) (157) (378)Administration costs (2,408) (2,021) (4,289) (Loss)/profit from operations (99) (144) 461 Investment revenues - - 1Finance costs (80) (30) (79) (Loss)/profit before tax (179) (174) 383 Tax - - - (Loss)/profit for the period attributable to the equity (179) (174) 383holders of the parent company Earnings per share Basic 2 (0.33p) (0.32p) 0.71pDiluted 2 (0.30p) (0.30p) 0.65p Consolidated statement of recognised income and expense Six months ended 30 September Year ended 31 March 2007 2006 2007 £000 £000 £000Exchange differences on translation of foreign operations (2) - - Net income recognised directly in equity (2) - - (Loss)/profit for the period (179) (174) 383 Total recognised income and expense for the period (181) (174) 383attributable to the equity holders of the parent company Creightons plc Interim financial report 30 September 2007 Consolidated balance sheet - unaudited 30 September 31 March 2007 2006 2007 £000 £000 £000Non-current assetsGoodwill 331 331 331Other intangible assets 75 75 136Property, plant and equipment 534 448 517 940 854 984Current assetsInventories 4,485 3,434 3,813Trade and other receivables 2,313 1,669 2,056Cash and cash equivalents 33 93 14 6,831 5,196 5,883 Total assets 7,771 6,050 6,867 Current liabilities Trade and other payables 2,365 1,903 2,359Obligations under finance leases 13 11 11Short term borrowings 3,010 2,140 1,951Derivative financial instruments 17 - 4 5,405 4,054 4,325Non-current liabilitiesLong term borrowings 45 45 40 45 45 40 Total liabilities 5,450 4,099 4,365 Net assets 2,321 1,951 2,502 Equity Share capital 543 543 543Share premium account 1,229 1,229 1,229Capital redemption reserve 18 18 18Capital reserve 7 7 7Special reserve 13 13 13Share-based payment reserve 52 58 52Retained earnings 459 83 640 Total equity available to the holders of the parent 2,321 1,951 2,502company Creightons plc Interim financial report For the year ended 30 September 2007 Statement of changes in shareholders equity - unaudited Share Share Other Share-based Retained Total capital premium reserves payment earnings reserve £000 £000 £000 £000 £000 Balance at 1 April 2006 543 1,229 38 47 290 2,147Prior year adjustment - - - - (33) (33)Balance at 1 April 2006 - restated 543 1,229 38 47 257 2,114Loss for six months ended 30 September - - - - (174) (174)2006Credit to equity for share based - - - 11 - 11payments Balance at 30 September 2006 543 1,229 38 58 83 1,951Profit for six months ended 31 March - - - - 557 5572007Debit to equity for share based - - - (6) - (6)payments Balance at 31 March 2007 543 1,229 38 52 640 2,502Loss for six months ended 30 September - - - - (179) (179)2006Credit to equity for share based - - - - - -paymentsExchange differences on translation of - - - - (2) (2)foreign operations Balance at 30 September 2007 543 1,229 38 52 459 2,321 Creightons plc Interim financial report For the year ended 30 September 2007 Consolidated cash flow statement - unaudited Six months ended Year ended 30 September 31 March 2007 2006 2007 £000 £000 £000 Net cash (outflow) from operating activities (839) (1,646) (1,310) Cash flow from investing activities Proceeds on disposal of property, plant and equipment - 8 8Purchase of property, plant and equipment (60) (126) (251)Expenditure on intangible assets (7) (24) (107) Net cash (used in) investing activities (67) (142) (350) Cash flow from financing activities Repayment of borrowings (7) (1) -Repayment of finance lease obligations (6) (3) (14)Increase/(decrease) in bank overdrafts 859 1,808 1,611Net cash from financing activities 846 1,804 1,597 Net (decrease)/increase in cash and cash equivalents (60) 16 (63)Cash and cash equivalents at start of period 93 77 77Cash and cash equivalents at end of period 33 93 14 Creightons plc Interim financial report For the year ended 30 September 2007 Notes to the interim financial report 1. Basis of preparation The financial statements presented in this Interim Report has been prepared inaccordance with the Group's accounting policies under International Reportingstandards (IFRS) as set out in the financial statements for the year ended 31March 2007. The interim financial statements for the six months ended 30 September 2007 andthe comparative figures for the six months ended 30 September 2006 areunaudited. The summary financial statements for the year ended 31 March 2007represent an abbreviated version of the Group's full financial statements forthat year, on which the Auditors issued an unqualified report and which havebeen filed with the Registrar of Companies. 2. Earnings per share The calculation of the basic and diluted earnings per share is based on thefollowing data: Six months ended Year ended 30 September 31 March 2007 2006 2007 £000 £000 £000EarningsNet (loss)/profit attributable to the equity holders of (179) (174) 383the parent company Six months ended Year ended 30 September 31 March 2007 2006 2007 Number Number NumberNumber of sharesWeighted average number of ordinary shares for the 54,275,876 54,275,876 54,275,876purposes of basic earnings per share Effect of dilutive potential ordinary shares relating 5,376,550 4,256,550 4,256,550to Share options Weighted average number of ordinary shares for the 59,652,426 58,532,426 58,532,426purposes of diluted earnings per share 3. Availability of Interim Report The Interim Report is being sent to shareholders. Further copies can be obtainedfrom the Company's Registered Office, 1210 Lincoln Road, Peterborough,Cambridgeshire, PE4 6ND. 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