Longboat Energy Regulatory News (LBE)

22 Sep 2005 07:03

Liberty PLC22 September 2005 FOR IMMEDIATE RELEASE22nd September 2005 LIBERTY PLC PRELIMINARY ANNOUNCEMENT OF RESULTS FOR THE YEAR ENDED 30th JUNE 2005 Contact:Iain Renwick, Chief Executive, Liberty Plc Tel: 020 7734 1234Baron Phillips, Baron Phillips Associates Tel: 020 7920 3161 HIGHLIGHTS---------- • Turnover increased by 11% to £43.8m - bucking the downturn in consumer spending experienced by other major retailers • Following property profits of £2.4m, pre-tax losses more than halved to £2.7m, down from £6.2m last year • Liberty now trading at break even at operating level • £66.5m of property sales entirely repaid debt - reducing annualised interest charges by £4m and rental income by a similar amount • Launch of "Liberty of London" brand following highly successful expansion of design studio • "Liberty of London" label spearheading transformation of Liberty into international luxury goods brand • Retailing activities to be focused into Tudor building on Great Marlborough Street and vacating existing Regent Street space "We believe the business has been transformed over the past 12 months and thepotential for future growth is substantial. Liberty is re-establishing itself asthe destination retail centre for cutting edge design and style as well as a newplayer in the international luxury goods market," Richard Balfour-Lynn, Chairman. CHAIRMAN'S STATEMENTfor the year ended 30th June 2005--------------------------------- This year has seen Liberty transformed into a vibrant and dynamic retaildestination that is reversing its fortunes and becoming an international luxurygoods brand. The sea change that has occurred reflects the determined effort of Liberty'sexperienced management team and is a result of almost two years of hard and,often, difficult work. Liberty is, once more, the home of cutting edge fashionand design and is receiving the approval of the buying public. Unlike almost every other major retailer, either in London's West End or HighStreets across the country, Liberty has bucked the downturn in consumerspending. During the 12 months to 30th June 2005 Liberty's turnover increased byalmost 11% to £43.8m producing an operating loss of £2.2m in comparison to aloss of £3.2m last year. I am pleased to report that at the operating levelLiberty is now trading at break-even, which augurs well for the future. Afterrealising £2.4m of profits on property sales this year, pre-tax losses have beenreduced to £2.7m, against £6.2m last year. This pleasing performance demonstrates that Liberty has succeeded in offeringdiscerning consumers a point of difference from other luxury goods retailers. Webelieve that our highly edited ranges - both in fashion and in other categories- are attracting customers looking to maintain their individuality, rather thanacquiring goods merely with mass appeal. We have dared to be different and weare not offering high street conformity. Customers are also discovering, or, in many cases, re-discovering, that Libertyis a far easier place in which to shop than has been the case in the past.Wayfinding has improved and the store's layout is more logical and shopperfriendly. Today there is much more to tempt London's high net worth individualsto cross Liberty's threshold. Apart from the strength of the underlying performance there have been twonotable events during the year. In April 2005 we concluded the sale of £66.5mworth of property, which entirely repaid our debt and, as a result,significantly strengthened Liberty's balance sheet. The sale of Lasenby House inKingly Street and the Liberty Island site on Regent Street, generated a pre-taxsurplus of £2.4m after sale costs. By eliminating our £62m of debt, we will savealmost £4m of annualised interest charges, although we will lose a similaramount of net annual rental income previously generated from these properties. Looking to the future we have spent much of the year under review designing inhouse a range of luxury goods under the "Liberty of London" label. Our greatlyexpanded design studio has created the first of what we plan will become anextensive range of "Liberty of London" goods which we believe will reflect boththe store's deep design heritage as well as its ability to produce beautiful"must have" items. The product development programme is producing new ranges of fashionaccessories, such as bags and small leather goods, scarves, luggage and travelaccessories, soft home furnishing, nightwear and stationery. The design team has successfully distilled the essence of Liberty while stayingtrue to our uniquely English provenance and design heritage. We believe theseluxury goods under the "Liberty of London" brand will reflect our pioneeringdesign spirit, showcasing the best in design while fusing fashion and thedecorative arts. This is something Liberty's reputation was founded upon over acentury ago. The full impact of our initial "Liberty of London" collection will be feltduring the course of the current year as our first range has only just beenlaunched. This first collection has been well received by the fashion press andwas launched in-store earlier this month. This has given the team great encouragement and confidence and we are looking tobuild the label and provide an extensive range of luxury accessories that willspearhead the drive to establish "Liberty of London" as a truly internationalluxury brand. We have a clear strategy for focusing on the international expansion of the"Liberty of London" brand. Our priorities are the North American, Japanese andSouth East Asian markets, with key routes to market and distributionpartnerships being identified. This will enable us to market the brand on aglobal basis without the need for a substantial capital investment programme. At the same time we have worked hard on a programme of improving both the Londonstore and the range of products we now offer. The sales figures demonstrate thesuccess we have already had in Ladieswear, Menswear, Beauty and Accessories.During the second half of the year we unveiled our new look furnishing fabricsdepartment with a more commercial focus and re-arranging of our home offer. I am pleased to report that both these areas are trading in line with ourexpectations and are, once more, establishing Liberty as a destination for homepurchases. The impact of this success should not be underestimated as there isextensive competition in this area of our business and it is rewarding to seecustomers coming back to Liberty to purchase our furniture and related products. As part of our overall strategy of revitalising the Liberty brand, we intendfocusing retailing activities into the Tudor building in Great MarlboroughStreet and vacating our existing Regent Street sales space. Under the terms ofthe sale agreement for the Regent Street property referred to earlier, we canachieve this without any residual rental liability to Liberty. This will resultin the relocation of four key product areas from Regent Street: menswear, ladiesshoes, lingerie and beauty. They will all be accommodated within the Tudorbuilding but in a more tightly focused format to provide an improved productoffering. We clearly see the Tudor building as the iconic brand home, which trulysynthesises all the unique attributes of the Liberty brand. The focus on theTudor building will enable us to develop innovative retailing strategies thatadd value to our luxury goods development, while creating a unique lifestyledestination in London's West End. We are excited about the potential. It is also important to sound a note of caution. Although we have performed wellduring a period of poor consumer confidence, London retailing has been affectedby the terrorist events during July 2005. As a consequence, our tradingperformance in the flagship store during the first eleven weeks of our newfinancial year to 17th September 2005 was initially affected and turnover forthat period was 5% lower than last year. However, our current turnover on aweekly basis is now almost back to the record trading levels of last year. Whileit is too early to be certain of the long-term impact of the summer's events weare adopting a cautious approach to current year trading. We are concerned that there has been virtually no co-ordination between CentralGovernment, the Mayor of London's Office, and Westminster Council to provide aunified strategy aimed at encouraging consumers back to the West End. We believeone of the most effective methods of re-building consumer confidence is eitherthe complete suspension of the Congestion Charge or suspending it during thepeak pre-Christmas trading periods. Unfortunately simply raising the CongestionCharge, as is occurring at present, will do little to attract people back intothe West End. Putting these issues to one side, we believe the business has been transformedover the past 12 months and the potential for future growth is substantial.Liberty is re-establishing itself as the destination retail centre for cuttingedge design and style as well as a new player in the international luxury goodsmarket. Richard Balfour-LynnChairmanLiberty Plc22nd September 2005 CONSOLIDATED PROFIT AND LOSS ACCOUNTfor the year ended 30th June 2005------------------------------------ Year Year ended ended 30th June 30th June 2005 2004 Notes £'000 £'000------------------------------------------------------------------------------Turnover 1 43,760 39,527 Cost of sales (24,754) (22,193)------------------------------------------------------------------------------Gross profit 19,006 17,334 Selling and distribution costs (21,317) (21,354)Administrative expenses (2,576) (2,919)Other operating income 2,710 3,353------------------------------------------------------------------------------Operating loss on ordinary activities (2,177) (3,586) Operating loss before exceptional operating charges (2,177) (3,219)Exceptional operating charges 2 - (367) Profit on disposal of investment and operationalproperties 2,432 -------------------------------------------------------------------------------Profit/(loss) on ordinary activities before 255 (3,586)interest Net interest payable and similar charges 3 (2,925) (2,606)------------------------------------------------------------------------------Loss on ordinary activities before taxation (2,670) (6,192)Taxation charge on loss on ordinary activities 4 (651) (682)------------------------------------------------------------------------------Loss on ordinary activities after taxation (3,321) (6,874)Equity minority interests (245) (360)Non-equity minority interests (55) (55)------------------------------------------------------------------------------Loss attributable to ordinary shareholders (3,621) (7,289)Undeclared non-equity preference dividends (23) (23)------------------------------------------------------------------------------Retained loss for the year (3,644) (7,312)==============================================================================Basic loss per share 5 (16.1p) (32.3p)Diluted loss per share 5 (15.7p) (32.3p)============================================================================== All operations are continuing. CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSESfor the year ended 30th June 2005----------------------------------------------------------- Year Year ended ended 30th June 30th June 2005 2004 £'000 £'000------------------------------------------------------------------------------Loss for the year (3,621) (7,289) Net revaluation surplus on fixed assets credited torevaluation reserve 5,513 3,464 Currency translation differences on foreign currencynet investments (11) 5------------------------------------------------------------------------------Total recognised gains and losses for the year 1,881 (3,820)============================================================================== All recognised gains and losses are attributable to equity shareholders'interests. RECONCILIATIONS OF MOVEMENTS IN SHAREHOLDERS' FUNDSfor the year ended 30th June 2005--------------------------------------------------- 2005 2004 £'000 £'000------------------------------------------------------------------------------Opening shareholders' funds 44,879 48,699 Loss for the financial year (3,621) (7,289) Undeclared non-equity preference dividends (23) (23) Net surplus on fixed assets credited to revaluationreserve 5,513 3,464 Currency translation differences on foreign currency netinvestments (11) 5 Unpaid non-equity preference dividends 23 23------------------------------------------------------------------------------Closing shareholders' funds 46,760 44,879============================================================================== CONSOLIDATED BALANCE SHEETat 30th June 2005-------------------------- 30th June 30th June 2005 2004 Notes £'000 £'000------------------------------------------------------------------------------Fixed assetsIntangible asset 18,200 18,200Tangible assets 6 27,909 81,103------------------------------------------------------------------------------ 46,109 99,303------------------------------------------------------------------------------Current assets Stocks 7 6,653 6,343 Debtors:amounts falling due after more than oneyear 2,050 878 amounts falling due within one year 6,091 5,869 Cash 3,630 4,490------------------------------------------------------------------------------ 18,424 17,580Creditors: amounts falling due withinone year 8 (13,580) (14,534)------------------------------------------------------------------------------Net current assets 4,844 3,046------------------------------------------------------------------------------Total assets less current liabilities 50,953 102,349 Creditors: amounts falling due aftermore than one year 9 (1,745) (55,009)------------------------------------------------------------------------------Net assets 49,208 47,340============================================================================== Capital and reserves Called up share capital 6,036 6,036Merger reserve 10 61,503 61,503Revaluation reserve 10 4,528 12,337Profit and loss account 10 (25,307) (34,997)------------------------------------------------------------------------------Total shareholders' funds 46,760 44,879 Analysed as: Equity shareholders' funds 46,260 44,402Non-equity shareholders' funds 500 477 Equity minority interests 1,870 1,883Non-equity minority interests 578 578------------------------------------------------------------------------------ 49,208 47,340============================================================================== CONSOLIDATED CASH FLOW STATEMENTfor the year ended 30th June 2005--------------------------------- 2005 2004 Notes £'000 £'000------------------------------------------------------------------------------Net cash (outflow)/inflow from operating activities 11 (9,643) 520 Returns on investments and servicing of finance 12 (3,792) (2,640) Tax paid (635) (766) Capital expenditure and financial investment, lesssales of fixed assets 13 65,227 (1,148)------------------------------------------------------------------------------Net cash inflow/(outflow) before financing and useof liquid resources 51,157 (4,034) Management of liquid resources 500 (500) Financing 14 (52,000) 4,000------------------------------------------------------------------------------Decrease in cash during the year (343) (534)============================================================================== RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBTfor the year ended 30th June 2005------------------------------------------------------- 2005 2004 Notes £'000 £'000------------------------------------------------------------------------------Decrease in cash during the year 15 (343) (534) (Decrease)/increase in liquid resources 15 (500) 500 Decrease/(increase) in loans during the year 52,000 (4,000)------------------------------------------------------------------------------Decrease/(increase) in net debt during the year 51,157 (4,034) Translation differences 15 (17) 11------------------------------------------------------------------------------Movement in net debt during the year 51,140 (4,023) Opening net debt (47,510) (43,487)------------------------------------------------------------------------------Closing net cash/(debt) 15 3,630 (47,510)============================================================================== NOTES TO THE ACCOUNTS--------------------- 1. DIVISIONAL ANALYSIS Operating Operating result on result on ordinary ordinary activities activities before Net before Net Turnover interest assets Turnover interest assets 2005 2005 2005 2004 2004 2004 £'000 £'000 £'000 £'000 £'000 £'000By class ofbusiness: Retail 31,016 (2,472) 43,766 27,139 (5,651) 44,894Wholesale 12,744 2,727 5,442 12,388 2,065 2,446------------------------------------------------------------------------------------- 43,760 255 49,208 39,527 (3,586) 47,340===================================================================================== By geographicalorigin: United Kingdom 38,875 (617) 47,664 33,940 (4,774) 46,508Japan 4,885 872 1,544 5,587 1,188 832------------------------------------------------------------------------------------- 43,760 255 49,208 39,527 (3,586) 47,340===================================================================================== By geographicaldestination: United Kingdom 32,273 28,571Japan 4,885 5,585Other 6,602 5,371------------------------------------------------------------------------------------- 43,760 39,527===================================================================================== Sales from concession departments are shown on a commission only basis asfollows: 2005 2004 £'000 £'000 Gross turnover 49,118 45,213 Less concession departments turnover net of commission (5,358) (5,686)------------------------------------------------------------------------------- Net turnover 43,760 39,527=============================================================================== The segmental analysis of operations reflects the structure of the Group. Retailincludes the UK retail operations at Regent Street and Heathrow. Wholesaleincludes the results of the UK and Japanese fabric businesses. The Retail loss before interest includes net rental income from properties andis after deducting exceptional operating charges. Cash balances of £3.6m in 2005(£4.5m in 2004) and bank loans of £nil in 2005 (£49.7m in 2004) have beenallocated to the Retail business as it utilises the cash balances and thebuildings against which the debt was secured prior to its repayment during theyear. 2. EXCEPTIONAL OPERATING CHARGES-------------------------------- 2005 2004 £'000 £'000 Redundancy and recruitment costs - 367=============================================================================== 3. NET INTEREST PAYABLE AND SIMILAR CHARGES------------------------------------------- 2005 2004 £'000 £'000Interest payable on:Bank loans and overdrafts (2,549) (2,626)Loan from ultimate holding company (433) (35)Other interest payable (11) (19)------------------------------------------------------------------------------- (2,993) (2,680)Less bank and other interest receivable 68 74------------------------------------------------------------------------------- (2,925) (2,606)=============================================================================== 4. TAXATION ON LOSS ON ORDINARY ACTIVITIES------------------------------------------ 2005 2004 £'000 £'000UK taxUK corporation tax on UK results (218) - Overseas taxWithholding tax written off (57) (232)Japanese tax on Japanese profits (345) (483)Adjustments in respect of prior years (31) 33------------------------------------------------------------------------------- (651) (682)=============================================================================== The tax credit on loss on ordinary activities has been reduced from the amountthat would arise from applying the prevailing UK corporation tax rate asfollows: 2005 2004 £'000 £'000 UK corporation tax credit at 30% on Group losses before tax 801 1,858Permanently disallowable expenditure and unrelieved losses (396) (2,496)Taxation on chargeable gains in excess of accounting profits (2,066) -Withholding tax written off (57) (232)Taxation on overseas earnings at a higher rate than UK corporation tax (82) (126)Tax losses brought forward utilised in the year 1,999 208Adjustments to taxation charge in respect of prior years (249) 33Excess of capital allowances over/(under) depreciation (601) 73-------------------------------------------------------------------------------Current taxation charge (651) (682)=============================================================================== 5. LOSS PER SHARE----------------- The loss per share figures are calculated by dividing the loss after taxationand minority interests for the year, by the weighted average number of shares inissue during the year, as follows:- 2005 2004 £'000 £'000Loss on ordinary activities after taxation and minorityinterests (3,644) (7,312)=============================================================================== '000 '000Weighted average number of ordinary shares in issue duringthe year 22,603 22,603=============================================================================== Loss per share (16.1p) (32.3p)=============================================================================== The exercise price of the share options was less than the average share pricefor the year and therefore no adjustment to the earnings is necessary in respectof shares under option. However, the weighted average number of shares in issueis adjusted by 572,092 shares allocated to the share option schemes at 30th June2005 to calculate the diluted loss per share. 6. TANGIBLE FIXED ASSETS------------------------ Group----- Short Freehold leasehold Fixtures & properties properties equipment Total £'000 £'000 £'000 £'000Cost or valuationAt 1st July 2004 35,550 42,623 7,597 85,770Additions 120 - 1,142 1,262Reclassifications - (74) 74 -Disposals (13,250) (45,052) (297) (58,599)Revaluation 2,188 2,503 - 4,691--------------------------------------------------------------------------------------At 30th June 2005 24,608 - 8,516 33,124====================================================================================== DepreciationAt 1st July 2004 - (125) (4,542) (4,667)Charge for the year (561) (563) (949) (2,073)Disposals 76 351 276 703Revaluation 485 337 - 822--------------------------------------------------------------------------------------At 30th June 2005 - - (5,215) (5,215)======================================================================================Net book value at 30th June 2005 24,608 - 3,301 27,909======================================================================================Net book value at 30th June 2004 35,550 42,498 3,055 81,103-------------------------------------------------------------------------------------- Valuation The Group's properties were valued at 31st December 2004 and 30th June 2005 byqualified professional valuers working for the company of DTZ Debenham TieLeung, Chartered Surveyors, ("DTZ") acting in the capacity of External Valuers.All such valuers are Chartered Surveyors, being members of the Royal Institutionof Chartered Surveyors. All properties were valued on the basis of Market Valueand in accordance with the RICS Appraisal and Valuation Standards 5th Edition("the Manual"). The valuation of the properties at 31st December 2004 was £81.3m and thevaluation surplus reflected in the interim accounts was £4.2m. Two of theGroup's properties were sold on 19th April 2005. A short leasehold property wassold for £53.7m and a freehold property was sold for £12.8m. These salesgenerated a net profit on sale of £2.4m after selling costs, which is includedin the Consolidated Profit and Loss Account. The valuation of the remainingfreehold property at 30th June 2005 was £24.8m (a valuation surplus £1.3m). Thetotal valuation surplus credited to revaluation reserve during the year was£5.5m which is reflected in the table above. 7. STOCKS--------- Group Group 2005 2004 £'000 £'000 Raw materials 613 481Work in progress - 25Finished goods 6,040 5,837------------------------------------------------------------------------------- 6,653 6,343=============================================================================== 8. CREDITORS: amounts falling due within one year 2005 2004 £'000 £'000 Trade creditors 8,124 7,122Amounts owed to fellow Group undertakings 567 852Corporation tax 48 251Other taxes and social security 223 626Other creditors 704 1,761Non-equity minority interest dividend payable 28 27Accruals and deferred income 3,886 3,895------------------------------------------------------------------------------- 13,580 14,534=============================================================================== 9. CREDITORS: amounts falling due after more than one year---------------------------------------------------------- 2005 2004 £'000 £'000 Bank loans - 50,000Less issue costs - (282)-------------------------------------------------------------------------------Bank loans net of debt issue costs - 49,718Amounts owed to ultimate holding company - 2,031Amounts owed to fellow Group undertakings - 3,194Other creditors 1,745 66------------------------------------------------------------------------------- 1,745 55,009=============================================================================== 10. MOVEMENT ON RESERVES------------------------ Profit Merger Revaluation and loss reserve reserve account £'000 £'000 £'000 GroupAt 1st July 2004 61,503 12,337 (34,997)Loss retained for the year - - (3,644)Surplus arising on revaluationof properties - 5,513 -Currency translationdifferences on foreigncurrency net investments - - (11)Transfer of depreciation onrevaluation of fixed assets - (56) 56Transfer on sale of properties - (13,266) 13,266Unpaid non-equity preferencedividends - - 23-------------------------------------------------------------------------------At 30th June 2005 61,503 4,528 (25,307)=============================================================================== 11. RECONCILIATION OF OPERATING LOSS ON ORDINARY ACTIVITIES TO NET CASH INFLOW FROM OPERATING ACTIVITIES------------------------------------------------------------------------------ 2005 2004 £'000 £'000 Operating loss on ordinary activities (2,177) (3,586)Depreciation 2,073 2,317Loss on disposal of fixed assets 127 -Increase in stock (312) (804)(Increase)/decrease in debtors (1,437) 281(Decrease)/increase in creditors (7,917) 2,312-------------------------------------------------------------------------------Net cash (outflow)/inflow from operating activities (9,643) 520=============================================================================== 12. RETURNS ON INVESTMENTS AND SERVICING OF FINANCE--------------------------------------------------- 2005 2004 £'000 £'000 Equity dividend paid to minority interests (246) (224)Non-equity dividend paid to minority interests (53) (82)Interest paid (3,550) (2,408)Interest received 57 74------------------------------------------------------------------------------- (3,792) (2,640)=============================================================================== 13. CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT, LESS SALES OF FIXED ASSETS---------------------------------------------------------------------------- 2005 2004 £'000 £'000 Purchase of tangible fixed assets (1,273) (1,148)Sale of tangible fixed assets 66,500 -------------------------------------------------------------------------------- 65,227 (1,148)=============================================================================== 14. FINANCING------------- 2005 2004 £'000 £'000 Loans drawn down 5,100 4,000Loans repaid (57,100) -------------------------------------------------------------------------------- (52,000) 4,000=============================================================================== 15. ANALYSIS OF NET DEBT------------------------ Movement Foreign during currency 2005 year translation 2004 £'000 £'000 £'000 £'000 Available cash 3,630 (343) (17) 3,990Short term investments - (500) - 500-------------------------------------------------------------------------------Cash 3,630 (843) (17) 4,490Loan from ultimate holding company - 2,000 - (2,000)Bank loan - 50,000 - (50,000)------------------------------------------------------------------------------- 3,630 51,157 (17) (47,510)=============================================================================== 16. FINANCIAL INFORMATION------------------------- The financial information set out above does not constitute the Company'sstatutory accounts for the period ended 30th June 2005 or 30th June 2004 but isderived from those accounts. Statutory accounts for 2004 have been delivered tothe Registrar of Companies, and those for 2005 will be delivered following theCompany's Annual General Meeting. The auditors have reported on those accounts;their reports were unqualified and did not contain statements under Section 237(2) or (3) of the Companies Act 1985. 17. DESPATCH OF ACCOUNTS------------------------ The audited accounts of the Company are expected to be sent to shareholdersduring October 2005. Thereafter copies will be available from the CompanySecretary, Filex Services Limited, 179 Great Portland Street, London W1W 5LS. This information is provided by RNS The company news service from the London Stock Exchange