30 Mar 2023 07:00
The information contained within this announcement is deemed to constitute inside information as stipulated under the retained EU law version of the Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. The information is disclosed in accordance with the Company's obligations under Article 17 of the UK MAR. Upon the publication of this announcement, this inside information is now considered to be in the public domain.
30 March 2023
John Lewis of Hungerford plc
(the "Company")
Half-year report
John Lewis of Hungerford Plc (AIM: JLH), the specialist manufacturer and retailer of kitchens, bedrooms and freestanding furniture, is pleased to announce its unaudited interim results for the six months ended 31 December 2022.
Overview
The Company is pleased to report that the revenue for the half year to 31 December 2022 of £5.4 million (2021: £4.6 million) reflected an improvement of 18% over the corresponding period in 2021 and a 60% growth over the pre-pandemic half year period to 31 December 2019. The total of dispatched sales and confirmed forward orders for the first 38 weeks of trading in the current financial year stands at £9.2 million (2022: £8.5 million).
The underlying adjusted loss before tax* for the half year to 31 December 2022, was £105k (2021: Loss before tax £81k). In the 2022 calendar year, the Company experienced substantial and sudden increases in costs of some key raw materials. The Company took swift action to raise prices on all new orders from the start of the 2022/23 financial year in order to offset cost increases.
However, it should be noted that the average lead time between taking an order and completing the installation and recognising the sale is six months. The sales recognised in the first half of the current financial year were predominantly at the previous retail prices before any price increase had been applied, and consequently the gross margin was lower at 42% (FY2021/22: 45%). The Board expects that the gross margin in the second half of the current financial year will benefit from these price increases, which customers have accepted as necessary and market standard increases, and be closer to its historic run rate. The Board also notes that the significant cost pressures suffered in 2022 are easing, as the current year progresses, with the management team focused on increasing the gross margin through improved purchasing and improving operational efficiencies.
The movement in administration costs is split between additional infrastructure costs in the support functions which have been strengthened to enable the front-line team to focus on conversion; and delivering an unrivalled customer experience. The high levels of quoted business throughout the first half of the financial year demonstrate the brand continuing to build on its digital reach and share of voice in all online platforms. Investment to optimise the website experience for mobile devices has been instrumental in the increase in enquiries into the business. Additional investments in the Company's production capacity, through the recruitment and development of a larger team, will allow the Company to capitalise on a traditionally busier second half year.
*Loss before tax and non-recurring costs of £105k is after adjusting for £69k of one-off, non-recurring costs which occurred in the half year to 31 December 2022, which are not expected to be repeated going forward. These non-recurring costs are related to project and one-off restructuring costs. Reported unaudited loss before tax for the half year to 31 December 2022 was £174k.
Outlook
As stated above, the dispatched sales and confirmed orders (which the Board believes to be the best measure of trading) for the first 38 weeks of trading of the current financial year stood at £9.2 million (2022: £8.5 million). Future orders, against which a first stage deposit has been taken, are tracking the prior year and the Board's central scenario is to deliver a c£12 million full year revenue performance, which the Board believes would result in the profit before tax and non-recurring costs being ahead of the prior year.
Kiran Noonan
Chief Executive Officer and Acting Chairman
29 March 2023
Enquiries:
John Lewis of Hungerford plc 01235 774300
Kiran Noonan - Chief Executive Officer and Acting Chairman
Allenby Capital Limited (Nominated Adviser and Broker) 020 3328 5656
David Worlidge / Nick Naylor / George Payne (Corporate Finance)
Matt Butlin / Amrit Nahal (Sales and Corporate Broking)
INCOME STATEMENT |
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FOR THE SIX MONTHS ENDED 31 DECEMBER 2022 |
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Audited | |||||
| Unaudited 6 months ended |
| Year ended | ||
| 31 December | 31 December |
| 30 June | |
| 2022 | 2021 |
| 2022 | |
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£'000 | £'000 |
| £'000 | ||
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Revenue | 5,374 | 4,561 | 10,325 | ||
Cost of sales | (3,102) | (2,530) | (5,580) | ||
Gross profit | 2,272 | 2,031 | 4,745 | ||
Selling and distribution costs | (223) | (245) | (546) | ||
Administration expenses: | |||||
Other | (2,099) | (1,758) | (3,968) | ||
Other operating income | - | 3 | 2 | ||
Total | (2,099) | (1,755) | (3,966) | ||
(Loss)/Profit from operations | (50) | 31 | 233 | ||
Finance expenses | (124) | (112) | (219) | ||
(Loss)/Profit before tax | (174) | (81) | 14 | ||
Taxation | - | - | - | ||
(Loss)/Profit after taxation | (174) | (81) | 14 | ||
(Loss)/Earnings per share | |||||
Basic | (0.09)p | (0.04)p | 0.01p | ||
Fully diluted | (0.08)p | (0.04)p | 0.01p | ||
STATEMENT OF COMPREHENSIVE INCOME |
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FOR THE SIX MONTHS ENDED 31 DECEMBER 2022 |
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Audited | ||||
| Unaudited 6 months ended |
| Year ended | |
| 31 December | 31 December |
| 30 June |
| 2022 | 2021 |
| 2022 |
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£'000 | £'000 |
| £'000 | |
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(Loss)/Profit for the period | (174) | (81) | 14 | |
Revaluation of freehold land and buildings | - | - | 584 | |
Total Comprehensive (Loss)/Income | (174) | (81) | 598 | |
BALANCE SHEET |
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AS AT 31 DECEMBER 2022 |
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| Unaudited As at |
| Audited As at |
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| 31 December | 31 December |
| 30 June |
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| 2022 | 2021 |
| 2022 |
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£'000 | £'000 |
| £'000 |
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Non-Current Assets |
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Intangible assets | 128 | 124 | 148 |
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Tangible assets | 4,547 | 3,811 | 4,705 |
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Trade and other receivables | 32 | 32 | 32 |
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4,707 | 3,966 | 4,885 |
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Current assets |
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Inventories | 234 | 167 | 252 |
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Trade and other receivables | 1,712 | 1,140 | 1,864 |
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Deferred Tax asset | 82 | 82 | 82 |
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Cash and cash equivalents | 680 | 824 | 1,473 |
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2,708 | 2,214 | 3,671 |
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Current liabilities | (3,639) | (3,070) | (4,484) |
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Net current liabilities | (931) | (856) | (813) |
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Total assets less current |
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liabilities | 3,776 | 3,110 | 4,072 |
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Non-current liabilities |
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Borrowings | (1,102) | (1,127) | (1,116) |
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Lease Liabilities | (1,401) | (1,208) | (1,503) |
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Provisions for liabilities |
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and charges | (47) | (53) | (53) |
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Net Assets | 1,226 | 722 | 1,400 |
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Equity |
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Share capital | 194 | 194 | 194 |
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Other reserves | 1 | 1 | 1 |
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Share premium account | 1,222 | 1,222 | 1,222 |
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Revaluation Reserve | 1,102 | 518 | 1,102 |
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Retained Earnings | (1,293) | (1,214) | (1,119) |
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Total Equity | 1,226 | 722 | 1,400 |
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STATEMENT OF CHANGES IN EQUITY |
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FOR THE SIX MONTHS ENDED 31 DECEMBER 2022 |
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Share | Share | Other | Revaluation | Retained |
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Capital | Premium | Reserves | Reserves | Earnings | Total | ||||||||||
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£'000 | £'000 | £'000 | £'000 | £'000 | £'000 | ||||||||||
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At 30 June 2021 (Audited) | 194 | 1,222 | 1 | 518 | (1,132) | 803 |
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Loss for the period | - | - | - | - | (81) | (81) |
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At 31 December 2021 (Unaudited) | 194 | 1,222 | 1 | 518 | (1,213) | 722 |
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Profit for the period | - | - | - | - | 94 | 94 |
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Share issue | - | - | - | - | - | - |
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Revaluation of freeholds | - | - | - | 584 | - | 584 |
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Deferred tax on Revaluation of freeholds | - | - | - | - | - | - |
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Share based payments | - | - | - | - | - | - |
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At 30 June 2022 (Audited) | 194 | 1,222 | 1 | 1,102 | (1,119) | 1,400 |
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Loss for the period | - | - | - | - | (174) | (174) |
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At 31 December 2022 (Unaudited) | 194 | 1,222 | 1 | 1,102 | (1,293) | 1,226 |
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STATEMENT OF CASH FLOWS |
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FOR THE SIX MONTHS ENDED 31 DECEMBER 2022 |
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Unaudited 6 months ended |
| Audited | ||
| Year ended | |||
| 31 December | 31 December |
| 30 June |
| 2022 | 2021 |
| 2022 |
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£'000 | £'000 |
| £'000 | |
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(Loss)/Profit from operations | (51) | 31 | 233 | |
Depreciation, impairment, and amortisation | 259 | 239 | 466 | |
Decrease/(Increase) in inventories | - | 26 | (58) | |
Decrease/(Increase) in receivables | 170 | (271) | (995) | |
(Decrease)/Increase in payables | (331) | (506) | 377 | |
(Decrease)/Increase in Customer Deposits | (475) | 298 | 791 | |
Loss/(Profit) on disposal of property plant and equipment | (8) | 0 | 2 | |
Decrease in provisions | - | - | (6) | |
Net cash from operating activities | (436) | (183) | 809 | |
Cash flows from financing activities | (284) | (263) | (505) | |
Cash flows from investing activities | (73) | (32) | (133) | |
Net (decrease)/increase in cash and cash equivalents | (793) | (478) | 171 | |
Net cash and cash equivalents at the start of the period | 1,473 | 1,302 | 1,302 | |
Net cash and cash equivalents at the end of the period | 680 | 824 | 1,473 | |
NOTES: | |||||
1. This interim financial statement has been prepared on the basis of accounting policies adopted by the Company and set out in the annual report and accounts for the year ended 30 June 2022. The Company does not anticipate any change in these accounting policies for the year ending 30 June 2023. As permitted, this interim report has been prepared in accordance with the AIM Rules and not in accordance with IAS 34 "Interim financial reporting". The principal risks and uncertainties facing the Company are disclosed in the Company's financial statements for the year ended 30 June 2022, available from www.john-lewis.co.uk and remain unchanged. | |||||
2. Loss/Earnings per share Basic and fully diluted loss per ordinary share is calculated as follows: | |||||
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6 months | 6 months | Year | |||
ended | ended | ended | |||
31 December | 31 December | 30 June | |||
2022 | 2021 | 2022 | |||
(Loss/Profit attributable to ordinary shareholders (£'000) | (174) | (81) | 14 | ||
Weighted average number of shares in issue | 193,945,519 | 193,945,519 | 193,945,519 | ||
Shares used to calculate diluted earnings per share | 211,424,385 | 193,945,519 | 211,424,385 | ||
Basic(loss)/earnings per ordinary share (pence) | (0.09)p | (0.04)p | 0.01p | ||
Diluted (loss)/earnings per ordinary share (pence) | (0.08)p | (0.04)p | 0.01p | ||
3. Availability of the 2022 Interim accounts Copies of the interim accounts for the six months ended 31 December 2022 will be available to shareholders on the Company's website - www.john-lewis.co.uk | |||||