MPH.L Regulatory News (MPH)

8 Jun 2005 07:00

Marchpole Holdings PLC08 June 2005 IMMEDIATE RELEASE 8 June 2005 MARCHPOLE HOLDINGS PLC ("the Company") PRELIMINARY RESULTS 'Increasing profitability and dividend' Marchpole Holdings plc, which designs, produces and sells high quality clothingand accessories for six world class brands (Yves Saint Laurent, Boateng,Jean-Charles de Castelbajac ('JCC') and Jean-Charles de Castelbajac / Rossignol,Emanuel Ungaro and Ungaro) is pleased to announce its preliminary results forthe year ended 31 March 2005. Financial Highlights • Operating profit up 80% to £5.0m (2004: £2.8m). • Profit before tax up 79% to £4.7m (2004: £2.7m). • Turnover up 62% to £32.5m (2004: £20.0m). • EPS of 2.3 pence per share (2004: 1.4 pence) a growth of 64% on prior year. • Final dividend of 0.45 pence per share proposed payable in September 2005 (2004: 0.25 pence). • Autumn Winter 2005 order books stand at £14.9m (compared to £14.0m at the same time last year). Chief Executive, Greg Tufnell commented: "We are very pleased with the progress we have made during the year, only someof which is reflected in these results. We have worked hard to develop newrevenue streams and relationships, and are now representing six world classbrands. The agreements we have put in place during the year will secure the futuregrowth and continued profitability of Marchpole." For further information please contact: Marchpole: 020 7908 7777 Greg Tufnell, Chief ExecutiveJustin Hampshire, Finance DirectorMichael Morris, Executive Director Buchanan Communications: 020 7466 5000Tim Thompson / Nicola Cronk / Rebecca Skye Dietrich Shore Capital : 020 7408 4090Alex Borrelli / Dru Danford CHAIRMAN'S STATEMENT I am pleased to present to you the preliminary results of Marchpole Holdings plcfor the year ended 31 March 2005. The business continues to grow turnover,improve profitability and enhance shareholder value. The future potential of the business lies within the expertise of managingbranded apparel on a worldwide platform. This platform has been establishedover the last two to three years and will become increasingly more efficient asthe Company develops. The major signing in September of the partnership with Emanuel Ungaro S.A. onthe design and distribution of menswear worldwide demonstrates the uniqueapproach and the expertise offered by the Company. This exciting new agreementalso demonstrates our ability to form new partnerships that provide the Companywith strong growth potential for the future. Results & Dividend Continued improvements in the business are shown in the profit and loss accountfor the year ended 31 March 2005. Operating profit has increased by £2.2million, 80%, to £5.0 million (2004: £2.8 million) on turnover up 62% to £32.5million (2004: £20.0 million). Profit before taxation of £4.7 million (2004: £2.7 million) has been achieved,giving a basic EPS improvement of 64% to 2.3 pence per share (2004: 1.4 penceper share). The board is also delighted to recommend the payment of a finaldividend of 0.45 pence per share, which added to the interim dividend of 0.25pence per share gives a total dividend for the year of 0.7 pence per share(2004: 0.25 pence). The final dividend is proposed to be paid on 9 September2005 after the completion of the Company's Annual General Meeting. Licences Emanuel Ungaro and Ungaro In September last year we announced that the Company had entered into asignificant worldwide licence agreement with Emanuel Ungaro S.A. to launchEmanuel Ungaro menswear. This agreement will run for eight and a half years andcovers all product categories. We worked quickly to appoint the renowneddesigner, Jose Levy, to develop the collections, which have been well receivedby customers and by the press. Subsequently we have signed a sub-licence agreement with Camiceria Giemme, abusiness which had an existing relationship with the house of Emanuel Ungaro.This agreement commences with the Spring Summer 2006 season in January 2006 andruns for five years with minimum guaranteed royalties over this period of €1.375million. This partnership also includes a contribution to advertising andmarketing of €150,000 per annum. We have also secured an initial distributionagreement with a Japanese partner Onward Kashiyama Corporation which commenceswith Spring Summer 2006 and has minimum guarantees of €600,000 over the threeseason term. In the spirit of our partnership with Emanuel Ungaro S.A., we have also agreedto take space in their Paris store located in Avenue Montagne and in theirLondon store located in Bond Street. These outlets will raise the profile ofthe menswear collections and provide a strong platform for the product launch. There has been a substantial net investment in the development of the Ungarobrand during the year to March 2005, the sales of product will commence in July2005 and will be aided by the two agreements commencing in Spring Summer 2006 asoutlined above. In all we are very encouraged by the first six months of our relationship andremain optimistic for the development of this brand for the future. Jean-Charles de Castelbajac S.A. ("JCC") The strategy for the development and growth of JCC remains the same; to partnerwith strong worldwide specialists in non-core product such as eyewear; tosolidify the existing relationships of the business, to develop new key marketssuch as the UK, China and the USA; and to capitalise on the strengths of theMarchpole business model in areas such as production and sourcing. Much has been achieved during the year in rolling out this strategy. Totalrevenues have increased to £5.4 million from pre-ownership annual turnover ofapproximately £1.3 million, which includes a significant improvement inlicensing income. Partnerships have been established with specialists such asCodir on developing JCC eyewear worldwide. Existing relationships have beendeveloped, good examples being with Daikyung in Korea where the agreement hasbeen extended to 2011 and a programme of opening new outlets has begun, and withRossignol where we have begun to develop a new "Trekking" range to augment thehighly successful winter "Ski" collection. Plans are well underway to develop new markets and we now have showroomsdedicated to the JCC product in London, Paris and Milan. Our focus internally has been on developing the product and on efficientsourcing of the product using our worldwide reach. We are already seeingbenefits of these plans and achievements are coming through and we will continueto benefit in the coming years. The brand has substantial future potential and all of these developments duringthe last twelve months give us confidence for the future growth of the brand. Yves Saint Laurent Further progress has been made with the Yves Saint Laurent Pour Homme brandduring the year. We have worked closely with our key customers in developingproduct and in rolling out in store support programmes. Excellent levels ofsell-through continue to be achieved, and despite the cautiousness of buyers inthe current, well documented retail environment, the demand for this product hasremained high. Boateng The Boateng collection continues to make significant improvements in structure,content and in defining its place in the market. Despite the dispute withBespoke Couture, the company owned and run by Ozwald Boateng, our commitment tothis brand remains unaltered. Outlook The business has made further significant progress over the last few years andwe continue to focus on the development of the Company by entering into newagreements and extending existing ones. I believe that we have the team and theexpertise to take the Company forward and take full advantage of furtheropportunities. We are currently in the final stages of negotiations which maylead to an acquisition and hope to update shareholders in the near future. On behalf of the board of directors, I would like to thank the employees of theCompany for their continued support and contribution in achieving the aims ofthe Company and the results for the year. Together we look forward toharnessing the core strengths of the Company and to delivering continuedshareholder value over the coming years. Christopher PhillipsChairman 8 June 2005 Dividend Declaration The Company confirms the following final dividend information: Amount of final dividend: 0.45 pence per Ordinary Share Ex-dividend date: 10 August 2005 Record date: 12 August 2005 Date of AGM : 6 September 2005 Expected payment date : 9 September 2005 MARCHPOLE HOLDINGS PLC GROUP PROFIT AND LOSS ACCOUNTFOR THE YEAR ENDED 31 MARCH 2005 31-Mar-05 31-Mar-04 Note £'000 £'000 Turnover 2 19,986 32,460Cost of sales (16,289) (10,968) Gross profit 9,018 16,171 Distribution costs (3,999) (2,124)Administration expenses (7,172) (4,112) Operating profit 2,782 5,000 Net interest payable (253) (127) Profit on ordinary activities before taxation 2,655 4,747 Tax charge on profit on ordinary activities 3 (1,829) (925) Profit on ordinary activities after taxation 1,730 2,918 Dividends 4 (932) (331) Retained profit for the financial year 1,399 1,986 Earnings per shareBasic 2.3p 1.4p Diluted 2.2p 1.4p GROUP BALANCE SHEETAS AT 31 MARCH 2005 31-Mar-05 31-Mar-04 £'000 £'000Fixed assetsIntangible assets 3,715 3,625Tangible assets 759 423 4,474 4,048Current assetsStock 1,658 1,986Debtors 9,386 4,740Cash at bank and in hand 254 2,102 11,298 8,828 Creditors: amounts falling due within one (8,884) (7,680)year Net current assets 2,414 1,148 Total assets less current 6,888 5,196liabilities Creditors: amounts falling due after more (315) (588)than one year Net assets 6,573 4,608 Capital and reservesShare capital 1,335 1,325Share premium 2,704 2,666Merger reserve (1,818) -Profit and loss account 2,534 2,435 Total shareholders' funds - equity interests 6,573 4,608 GROUP STATEMENT OF CASHFLOWSFOR THE YEAR ENDED 31 MARCH 2005 Note 31-Mar-05 31-Mar-04 £'000 £'000 Cash (outflow)/inflow from operating activities 5 (823) 2,979 Returns on investments and servicing of financeInterest received 3 7Interest and facility fees paid (250) (133)Interest element of hire purchase and finance lease rentals (3) (1) (250) (127) Taxation (1,660) (11) Capital expenditure and financial investmentPayments to acquire intangible fixed assets (283) -Payments to acquire tangible fixed assets (538) (156) (821) (156) AcquisitionsCosts of acquisition - (375)Net cash acquired with subsidiary - 52 - (323) Equity dividends paid (662) - Cash (outflow)/inflow before financing (4,216) 2,362 FinancingIssue of new share capital 48 -New loans - 93Bank Invoice financing 566 -Short-term bank import loans 5,637 -Repayment of short-term bank import loans (3,837) -Loan repayments (710) (459)Capital element of hire purchase and finance lease rentals (32) (15) 1,672 (381) (Decrease)/increase in cash in the year (2,544) 1,981 EXTRACT FROM NOTES TO THE ACCOUNTSFOR THE YEAR ENDED 31 MARCH 2005 1 Basis of preparation The financial information set out in the announcement does not constitute the statutory accounts for the year ended 31 March 2005 or the year ended 31 March 2004. The financial information for the year ended 31 March 2004 is derived from the statutory accounts for that period which have been delivered to the Registrar of Companies. The auditors reported on those accounts; their report was unqualified and did not contain a statement under s237(2) or (3) Companies Act 1985. The statutory accounts for the year ended 31 March 2005 will be delivered to the Registrar of Companies following the Company's annual general meeting. 2 Turnover and profit on ordinary activities before taxation Turnover and profit on continuing activities before taxation are wholly attributable to the Group's principal activity. 3 Taxation 31-Mar-05 31-Mar-04 £'000 £'000 UK Corporation Tax at 30% (2004 - 30%): Current tax charge on profit for the year 1,812 940 Prior period adjustment (118) (68) Foreign tax 135 53 1,829 925 4 Dividends 31-Mar-05 31-Mar-04 £'000 £'000 Interim dividend paid - 0.25p per ordinary share 331 - Final dividend proposed - 0.45p per ordinary share 601 331 932 331 5 Net cash (outflow)/inflow from operating activities 31-Mar-05 31-Mar-04 £'000 £'000 Operating profit 5,000 2,782 Depreciation 202 99 Amortisation 193 29 Foreign exchange (70) (5) Decrease/(increase)in stocks 328 (845) Increase in debtors (4,646) (44) (Decrease)/increase in creditors (1,830) 963 (823) 2,979 6 Reconciliation of net funds 31-Mar-05 31-Mar-04 £'000 £'000 Net funds/(debt) at beginning of the year 980 (554) (Decrease)/increase in cash (2,544) 1,981 Loans acquired with subsidiary - (845) New loans - (93) Short-term bank import loans (5,637) - Repayment of short-term bank import loans 3,837 - Bank invoice financing (566) - Loan repayments 710 459 Capital element of hire purchase and finance lease 32 15 rentals Currency translation - 17 Net (debt)/funds at end of the year (3,188) 980 Cash at bank and in hand 254 2,102 Bank overdraft (696) - Bank invoice financing (566) - Short-term bank import loans (1,800) - Hire purchase and finance leases (46) (78) Loans (334) (1,044) (3,188) 980 This information is provided by RNS The company news service from the London Stock Exchange