JLH.L Regulatory News (JLH)

5 Dec 2006 07:01

John Lewis Of Hungerford PLC05 December 2006 John Lewis of Hungerford plc Final results - year ending 31 August 2006 2006 HIGHLIGHTS . Sales decrease 8.3% to £3,990,510 (2005 - £4,351,312). . Profit before taxation £63,458 (2005 loss - £24,756) . Net cash inflows from operating activities £384,948 (2005 - £236,326). . Board significantly strengthened with the appointment of new Executive Directors. COMPANY PROFILE John Lewis of Hungerford plc ("the Company") designs, manufactures, and retailskitchens, furniture, bathrooms and wall panelling direct to the public from itsown showrooms and Company managed concessions throughout the United Kingdom. In addition the Company operates a United Kingdom direct mail order business,under the name of Just Doors for replacement kitchen cabinet doors. Manufacturing and administration is carried out from a purpose built factory atWantage, Oxfordshire, constructed in 1998. The Company's core product line is the "Artisan(R)" range of kitchens andfurniture. In recent years the Company has expanded its line of branded productsto include the retro style Creme de la Creme kitchen. For more information about the Company and its products visit our web sites: www.john-lewis.co.uk www.justdoors.co.uk CHAIRMAN'S STATEMENT Overview The overall financial results for the year under review have been disappointing. However despite sales declining 8.3% over the prior year, the Company has beenable to report a modest pre-tax profit compared to a pre-tax loss in the prioryear for the same period. This resulted from an improvement in margins andreduction in operating costs. The focus of your Board during the year has been to agree upon and thenimplement a transition in the management of the Company. As previously announced, a number of important changes have been made to thecomposition of the Company's Board. The most recent and significant of these hasbeen the appointment to the Board of Jonathon Rosby formerly trading director ofMFI Limited as Managing Director Designate of the Company. Results Sales for the year ended 31 August 2006 decreased to £3,990,510 (2005 -£4,351,312). Profit on ordinary activities before taxation for the same period was £63,458(2005 - £24,756 loss). Gross margins increased to 61.8% from 57.4% in the prior year. In the main thisreflects changes in sales mix referred to later in this report. However thetrend of an increasing proportion of sales being made at discounted prices(commented on in earlier reports) continued during the year under review. Thisreflects the price competitive retail environment in which the Company trades. The profit for the financial year after taxation amounted to £51,361 (2005 -£17,629 loss). Net cash inflows before financing were £320,295 (2005 - £33,757). Basic earnings per share were 0.03p (2005 - losses 0.01p). No dividend is proposed for the year. Trading Review As at 31st August the Company traded from 7 showrooms and 3 concession sites.Subsequent to the year end one concession site was closed. The decline in salesrevenues reflects an increasingly competitive environment in the Company's corebusiness of kitchens. As with many other retailers, a number of factors such asthe exceptionally hot summer did reduce in-store footfall, which in turn reducedsales opportunities. Despite this however some improvement in sales was seen inthe second half of the year under review. As indicated above the major reason for the decline in sales has been a markeddrop in the number of kitchens sold where the number of unit sales fell by 22%.This was to some degree offset by a growth in average sales values. Conversely,furniture sales were very buoyant showing a 50% unit volume increase. Acombination of these factors, offset to a degree by discounting, resulted in anoverall improvement in reported margins. Our 'Just Doors' division continues to disappoint. Sales values declined 50%over the prior year same period underlining the intense competition in thereplacement kitchen door market. Overall Company operating costs declined by 5%. Selling costs (including sales discounts) increased 3% over the prior yearrepresenting 35% of sales (2005 - 31%). Marketing and related costs decreased by 22% representing 14% of sales (2005 -17%). Production costs (excluding raw materials) decreased 6% over the prior yearrepresenting 15% of sales, a percentage that was broadly unchanged from theprior year. Administration and financial costs increased 4% representing 21% of sales (2005- 19%). The increase arises from legal and personnel costs relating to Boardchanges referred to elsewhere in this report. Financial Review During the period under review the Company continued to maintain a cashgenerative business model with Net Cash Inflows from Operating Activitiesamounting to £384,948 (2005 - £236,326). Cash balances at 31 August 2006 totalled £671,070 (2005 - £390,214). The Company has standby overdraft facilities of £250,000, which have recentlybeen renewed. Capital expenditures (net) in the current year totalled £37,763 (2005 -£194,594) and consisted mainly of factory improvements connected with Health andSafety legislation compliance. On the basis of the results for the year no dividend is being proposed. Outlook Your Board believes that the Company now has the management team necessary tosignificantly improve the financial performance of the business. Jonathon Rosby brings to the Company a wealth of industry experience that willbe of immense value in moving the Company into a new phase of profitable growth. The Board's focus going forward will be to use the strength of the John Lewis ofHungerford brands to drive sales particularly of the Company's core kitchenproducts. A number of further changes are currently being implemented to improvecustomer service and introduce new products. All the above changes are targeted to enhance profitability. As announced earlier in the year once Jonathon Rosby assumes the position ofManaging Director I shall be relinquishing all executive responsibilities withinthe Company but will remain as Chairman working on a part time basis. Your Board looks to the future with confidence. John L. LewisChairman 5 December 2006 Profit and Loss Account for the year ended 31 August 2006 2006 2005 £ £Turnover 3,990,510 4,351,312 Cost of sales (1,524,020) (1,853,980) ----------- -----------Gross profit 2,466,490 2,497,332 Distribution costs (516,942) (727,537) Administrative expenses (1,865,011) (1,772,811) ----------- -----------Operating profit/(loss) 84,537 (3,016) Interest receivable and similar income 640 1,881 Interest payable and similar charges (21,719) (23,621) ----------- -----------Profit/(loss) on ordinary activitiesbefore taxation 63,458 (24,756) Tax on profit/(loss) on ordinary (12,097) 7,127activities ----------- -----------Profit/(loss) for the financial year 51,361 (17,629) Dividends - - ----------- ----------- Retained profit/(loss) for the financial 51,361 (17,629)year =========== =========== Earnings/(loss) per share Basic 0.03p (0.01)p Fully diluted 0.03p (0.01)p The profit and loss account has been prepared on the basis that all operationsare continuing operations. There are no recognised gains and losses other thanthose passing through the profit and loss account. Balance Sheet as at 31 August 2006 2006 2005 £ £ £ £Fixed assetsIntangible assets 25,344 29,712Tangible assets 1,732,296 1,907,949 --------- --------- 1,757,640 1,937,661 Current assetsStocks 455,746 356,064Debtors 151,546 74,281Cash at bank and in hand 671,070 390,214 --------- --------- 1,278,362 820,559 Creditors: amounts falling (1,008,433) (750,584)due within one year --------- --------- Net current assets 269,929 69,975 --------- --------- Total assets less 2,027,569 2,007,636current liabilities Creditors: amounts falling (305,945) (327,159)due after more than oneyear Provisions for liabilities (47,779) (57,993)and charges --------- ---------Total net assets 1,673,845 1,622,484 ========= ========= Capital and reservesCalled up share capital 148,745 148,745Share premium account 824,771 824,771Other reserves 1,421 1,421Profit and loss account 698,908 647,547 --------- ---------Shareholders' funds 1,673,845 1,622,484- all equity interests ========= ========= The financial statements were approved and signed on behalf of the Board ofDirectors on 5 December 2006. John L. Lewis Richard D. Worthington F.C.A.Director Director Cash Flow Statement for the year ended 31 August 2006 2006 2005 £ £ £ £ Net cash inflow from 384,948 236,326operating activities Returns on investmentsand servicing of financeInterest received 640 1,881Interest paid (21,719) (23,621) -------- -------- Net cash outflow from (21,079) (21,740)returns on investmentsand servicing of finance Corporation tax (5,811) 13,765 Capital expenditurePayments to acquire - -intangible fixed assets Payments to acquire (37,763) (200,772)tangible fixed assets Receipts from sales - 6,178of tangible fixed assets --------- ---------Net cash outflow from (37,763) (194,594)capital expenditure Equity dividends paid - - --------- --------- Net cash inflow before 320,295 33,757financing FinancingRepayment of Loan (19,439) (17,219) -------- -------- Net cash (outflow) from (19,439) (17,219)financing --------- --------- Increase in cash 300,856 16,538 ========= ========= 1. Preliminary Results The preliminary results have been extracted from the Company's audited accounts which have been approved and signed by the directors and auditors, but have not yet been delivered to the Registrar of Companies. The audited accounts have been prepared under the historical cost convention using the accounting policies set out in the Company's 2006 statutory financial statements. 2. Reconciliation of Movement in Shareholders' Funds 2006 2005 £ £ Profit/(loss) for the financial year 51,361 (17,629) Dividends - - ---------- ---------- Net addition to/(reduction from) 51,361 (17,629) shareholders' funds Opening shareholders' funds 1,622,484 1,640,113 ----------- ----------- Closing shareholders' funds 1,673,845 1,622,484 =========== ======== 3. Earnings/(loss) per Share Earnings per ordinary share is calculated as follows: 2006 2005 Basic Profit/(loss) attributable to £51,361 £(17,629) ordinary shareholders Weighted average number of ordinary 148,745,519 148,745,519 shares in issue Earnings/(loss) per ordinary share 0.03p (0.01)p ========== ========== Fully diluted Profit/(loss) attributable to £51,361 £(17,629) ordinary shareholders Weighted average number of ordinary 148,745,519 148,745,519 shares in issue Earnings/(loss) per ordinary share 0.03p (0.01)p =========== =========== Weighted average number of ordinary 148,745,519 148,745,519 shares in issue - basic calculation Number of shares deemed to have been - - issued for no consideration in respect of share options ------------ ------------ - fully diluted calculation 148,745,519 148,745,519 ============ ============ 4. 2006 Report and Accounts Copies of the 2006 report and accounts will be sent to shareholders in due course. Further copies will be available from the Company's nominated adviser, Smith & Williamson Corporate Finance Limited, 25 Moorgate, London, EC2R 6AY, free of charge, for one month from the date of this announcement. 5. Copy of Announcement A copy of this announcement will be available from the nominated adviser, Smith & Williamson Corporate Finance Limited, No 25 Moorgate, London, EC2R 6AY, for one month from the date of this announcement. -ends- This information is provided by RNS The company news service from the London Stock Exchange