JLH.L Regulatory News (JLH)

29 May 2007 07:01

John Lewis Of Hungerford PLC29 May 2007 JOHN LEWIS OF HUNGERFORD PLC ("John Lewis of Hungerford" or the "Company") Interim results - period ending 28 February 2007 HIGHLIGHTS • Revenues increase 32% to £1,896,000 (2006 - £1,431,000). • *Normalised loss before taxation reduced to £51,000 (2006 - £289,000 loss). • Net cash inflows from operating activities £195,000 (2006 - £138,000). * Normalised loss is loss before taxation excluding the first time application of accounting standard FRS20. CHAIRMAN'S STATEMENT Review of Operations Changes to the Board and executive management of the Company addressed in priorannouncements are beginning to deliver results. The sales performance of theCompany has shown marked improvement and first half losses have beensubstantially reduced. Importantly, other significant changes within the Company have yet to bereflected in the financial numbers. These include the recent introduction of anew kitchen range offered in both solid oak and walnut, much wider accessoryofferings (for example granite and stone worktops) and changes in productionprocesses and customer service. With the above in place, the Company is now competitively positioned to deliverattractive new products in terms of both offering and price. Summary of Financial Results Turnover for the period was £1,896,000 against £1,431,000 for the comparableperiod last year. Unit sales of kitchens grew 50%; sales of furniture units grew 1%. Gross profit margins were broadly flat at 62.0% against 63.0% in the same periodin the prior year. The pattern of sales continues to be increasingly skewed to promotional events.Much of the sales revenue in the period was at discounted prices, although thefinancial impact of this has been reduced through price increases. Normalised losses before taxation were £51,000 (2006 - £289,000 loss). As in theprior year, due to uncertainties as to the outcome of the current year, no taxcredit has been booked in these interim statements against current periodlosses. Normalised losses exclude the first time application of accounting standardFRS20 in relation to unvested share options. The charge for the period amountedto £15,000. Your Board considers that the arbitrary nature of the FRS20methodology means that the resulting charge has little meaningful relevance tothe reported results. Capital expenditures in the period were £5,000 (2006 - £31,000). Net cash inflows from operating activities were £195,000 (2006 - £138,000). As at 28 February 2007 the Company had cash balances of £841,000 (2006 -£472,000) and unused overdraft facilities amounting to £250,000. Outlook for the Future Following a successful Winter Sale, recent order input has been weaker thanexpected although the last few weeks have seen some up-turn. We continue to work on the development of further new product lines to broadenthe appeal of the John Lewis of Hungerford brand. In addition we are continuingto extend the range of appliances and accessories offered by the Company. Our sales focus remains firmly on the core business of kitchens and keyfurniture lines. The Board remains very positive about the progress being made within thebusiness. Whilst we remain cautious as to the outcome for the full year, we do expect acontinuation of the improving performance over the remainder of the financialyear. John LewisChairman 29 May 2007 PROFIT AND LOSS ACCOUNTFOR THE SIX MONTHS ENDED 28 FEBRUARY 2007 Unaudited Unaudited Audited 6 months 6 months 12 months ended ended ended 28 February 28 February 31 August 2007 2006 2006 Restated £000 £000 £000 Turnover 1,896 1,431 3,990 Cost of sales (719) (529) (1,524) -------- -------- --------Gross profit 1,177 902 2,466 Distribution costs (249) (248) (517) Administration costs (970) (933) (1,865) -------- -------- --------Operating (loss)/profit (42) (279) 84 Interest receivable 1 0 1 Interest payable (10) (10) (22) -------- -------- --------(Loss)/profit on ordinary activitiesbefore taxation (51) (289) 63 Share based payment (FRS 20) (15) - - Taxation - - (12) -------- -------- --------(Loss)/profit on ordinary activitiesafter taxation (66) (289) 51 Dividends - - - -------- -------- --------Retained (loss)/profit (66) (289) 51 ======== ======== ======== (Loss)/profit per shareBasic (0.04)p (0.19)p 0.03pFully diluted (0.04)p (0.19)p 0.03p ===== ===== ===== BALANCE SHEET AS AT 28 FEBRUARY 2007 Unaudited Unaudited Audited 28 February 2007 28 February 2006 31 August 2006 £000 £000 £000 £000 £000 £000Fixed assetsIntangible 23 27 26assetsTangible 1,652 1,833 1,732assets -------- -------- -------- 1,675 1,860 1,758CurrentassetsStocks 485 512 456Debtors 103 100 151Cash at bank 841 472 671and in hand -------- -------- -------- 1,429 1,084 1,278Creditors:amountsfallingdue within one (1,139) (1,237) (1,008)year -------- -------- --------Net currentassets/ (liabilities) 290 (153) 270 -------- -------- --------Total assetsless currentliabilities 1,965 1,707 2,028 Creditors:amountsfallingdue after morethan one year (294) (316) (306) Provisions forliabilitiesand charges (48) (58) (48) -------- -------- --------Total net assets 1,623 1,333 1,674 ======== ======== ======== Capital andReserves Called up sharecapital 149 149 149 Other reserves 1 1 1 Share premium account 825 825 825 Share option capital 15 - - Profit and loss account 633 358 699 -------- -------- --------Shareholders'funds - all equity interests 1,623 1,333 1,674 ======== ======== ======== CASH FLOW STATEMENTFOR THE SIX MONTHS ENDED 28 FEBRUARY 2007 Unaudited Unaudited Audited 6 months 6 months 12 months ended ended ended 28 February 28 February 31 August 2007 2006 2006 £000 £000 £000 Operating (loss)/profit (42) (279) 84 Depreciation 88 108 218 (Increase) in stock (29) (156) (100) Decrease/(increase) in debtors 48 (25) (57) Increase in creditors 130 490 240 -------- -------- --------Net cash inflow fromoperating activities 195 138 385 Returns on investment and servicingof finance (9) (10) (21) Corporation tax paid - (5) (6) Capital expenditure (5) (31) (38) Equity dividends paid - - - Financing (11) (10) (19) -------- -------- --------Increase in cash 170 82 301 ======== ======== ======== NOTES: 1. The interim accounts, which are unaudited, have been prepared under thehistorical cost convention using the accounting policies set out in the accountsfor the year ended 31 August 2006. 2. The basic loss per share is calculated on the loss after taxation of £66,000and on the basis of 148,745,519 shares in issue. The basic loss per share forthe 6 months ended 28 February 2006 is calculated on the loss after taxation of£289,000 and on the basis of 148,745,519 shares in issue. The basic profit pershare for the year ended 31 August 2006 is calculated on the profit aftertaxation of £51,000 and on the basis of 148,745,519 shares in issue. The fully diluted loss per share is calculated on the loss after taxation of£66,000 and on the basis of 156,782,198 shares in issue. The fully diluted lossper share for the 6 months ended 28 February 2006 is calculated on the lossafter taxation of £289,000 and on the basis of 148,745,519 shares in issue. Thefully diluted profit per share for the year ended 31 August 2006 is calculatedon the profit after taxation of £51,000 and on the basis of 148,745,519 sharesin issue. 3. The company has applied FRS20 - Share-based Payment, for the first time inthis interim report. Under FRS20 the amount to be charged to the Profit and Lossaccount is based on an estimate of the fair value of any share-based payment (inthe case of the Company this is options over its shares) between the date ofgrant and the date of vesting. This fair value figure is then adjusted by makingestimates of the number of share options which are likely to vest. The resultingamount to be charged is then time-apportioned over the period from the date ofgrant to the date of vesting. To determine the value of the share options in accordance with the above, theCompany has used a pricing model relevant to share options. This has resulted ina charge of £15,419 to the profit and loss account for the six months to 28February 2007. 4. Copies of the 2007 interim accounts will be available to shareholders on theCompany's website www.john-lewis.co.uk. 5. Copies of this announcement will be available from the Nominated Adviser,Smith & Williamson Corporate Finance Limited, 25 Moorgate, London, EC2R 6AY forone month from the date of this announcement. This information is provided by RNS The company news service from the London Stock Exchange