Strategic Minerals Regulatory News (SML)

28 Feb 2008 07:01

Smallbone PLC28 February 2008 SMALLBONE PLC("Smallbone" or "the Group") Preliminary results for the year ended 31 December 2007 Smallbone, the international group of unique luxury lifestyle brands, announcesrecord results Financial Highlights 2007 2006 % increase £000 £000Turnover 56,013 47,747 +17%EBITDA* 5,220 3,162 +65%Operating profit 3,236 1,290 +151%Profit before tax 2,615 758 +245%Operating cash flow 4,484 3,804 +18%EPS 8.16p 1.63p +401%Dividend per share 1.8p 1.0p + 80% * pre-exceptional items and share-based payments Key Achievements • Record performances from all brands achieved, both domestically and abroad • Substantial Group operating margin improvement up 78% to 8% (2006: 4.4%), excluding US showrooms, as investment in showroom network delivering results • Market share grown with greater visibility and brand awareness • Strong luxury positioning with high quality, long-established brands • Further international expansion: strong US trading performance as well as further contract for US residential development signed; showrooms in Moscow and Dubai now open Outlook • Record Group order book up 14% to £32 million, providing strong future revenue visibility • Further 6 showrooms to open in 2008; well on track for further expansion • Current trading in January and February 2008 continues to show no sign of slowing Charles Smallbone, Executive Chairman & Chief Executive, commented: "The high level of investment over the last few years is now delivering everstronger results. We are seeing fantastic progress, growing our market sharewhilst building sales and substantially improving profits and margins. "Our Group provides pure luxury into the home. We have the foremost brands inthe market with unparalleled consumer presence. Our still young but growingdistribution network of showrooms allows us considerable further expansion. Thecombination of long-established, high quality luxury brands and our currentlimited distribution puts us in a unique position to build our business even inchallenging times." 28 February 2008 Enquiries:College Hill Tel: +44 (0)207 457 2020Kate Rock / Anna Czerny SMALLBONE plc("Smallbone" or "the Group") Chairman and Chief Executive's Statement 2007 was a year of significant progress for the Group as we reinforced ourstrong leadership position and international brands appeal. All the individual brands within the Group's portfolio delivered recordperformances in 2007, both domestically and abroad. They are all at differentstages of development giving the Group a broader platform from which to expand. The high level of investment over the last few years is now delivering everstronger results. We are seeing fantastic progress, growing our market sharewhilst building sales and substantially improving profits and margins. Strong luxury positioning Our Group provides pure luxury into the home. We have the foremost brands in themarket with unparalleled consumer presence. Our still young but growingdistribution network of showrooms allows us considerable further expansion. Thecombination of long-established, high quality luxury brands and our currentlimited distribution puts us in a unique position to build our business even inchallenging times. Demand shows no sign of slowing and, as we expand ourshowroom network, we believe we can build further growth by continuing tocapture market share. Domestic and international wealth is still expanding. There continues to be ahigh spend in the home. People want to spend money in their homes, which theysee as an investment. The home is the one place where a capital investment canbe guided by lifestyle decisions. Key achievements in 2007 We focus on those key areas that will deliver both sales and profits. • Investment in showrooms showing positive impact on profitability A key part of our growth strategy is the significant investment in the Group'sshowroom network; the Group opened a further 2 showrooms in the period. Netoperating margin, excluding the Smallbone US showrooms, improved to 8% (2006:4.4%), as the investment over the last few years is now delivering results.Typically, it takes about nine months for a new showroom to reach monthlybreakeven and 18 months for it to generate a 25-30% profit contribution onsales. Our commitment to expand our showroom network, as the core driver for growth,remains as firm as ever. We see plenty of potential geographic locations andour target remains to have 16 UK showrooms for each of the Smallbone and MarkWilkinson brands by the end of 2010 and 7 Smallbone showrooms in the US. By the end of 2008, we will have 12 Smallbone and 14 Mark Wilkinson showrooms aswell as 3 Smallbone showrooms in the US. Paris Ceramics will also have opened afurther showroom in Tribeca, New York. • Market share grows with greater visibility and brand awareness The Group has a 6.2% share of the core UK market, up from 5.3% in 2006. Webelieve that we can gain further market share over the next three years to over8%. This expanding market share, together with our increasing presence ininternational and emerging markets, gives us tremendous scope for furtherorganic growth. Smallbone's UK kitchen sales increased by 31% between 2004 and 2006 compared tothe specialist kitchen market growth of 17% in the same period. This trend hasbeen reflected in 2007's results and we believe that this will continue asSmallbone builds on its unique brand leadership position. Monthly "new enquiry" levels continue to increase as our brands have greatervisibility via our expanded showroom network. • Record brand performances Sales in Smallbone UK in 2007 were up 18% to £24.3 million and operating profitup 64% to £2million. We are also extremely pleased that the average kitchenorder size for Smallbone has increased, now £44,800 compared to £30,000 in 2005.Smallbone's order intake for 2008 is up 11%. The performance from Smallbone was achieved despite not opening a new showroomin the period and this intentional hiatus allowed us to closely monitor theperformance of our existing showrooms. The expanded showroom network deliveredbetween 130-140 "new enquiries" for every 1,000 brochures sent; a ratio increaseof 30-40% from previous years. A fantastic performance from Mark Wilkinson delivered a sales increase of 9% to£23.5 million with an operating profit up 17% to £2.3 million in 2007. Theaverage order size has grown to a pleasing £32,600 from £29,900 in 2005. Theorder intake increased by 5% compared to 2006. Paris Ceramics, which accounts for 11.5% of total Group sales, has alsoperformed exceptionally well with sales up a record 19% to £6.4 million, andturned from an operating loss to an operating profit of £0.4 million. Economiesof scale achieved from the new factory have helped increase margins and improveprofitability. Paris Ceramics increased its order intake by 25%. We are alsodelighted that we achieved substantial sales growth and a maiden profit from ournewly formed division, The Hopton Works, and have started to generate graniteand flooring sales to external customers. • Further international expansion We are committed to taking our brands into international markets and see this asa huge opportunity. We have recruited a President for Smallbone USA Inc, whojoins from Armani Casa. The new Smallbone showroom in New York performed very well. In the period, theshowroom took over $8.6 million of orders against $2.7 million in the six monthsof 2006 that it was open. Given the longer lead time between order and deliveryin the US, we expect to see profits from these orders in 2009. We are alsopleased that we opened our second showroom in the US in Greenwich, Connecticut.We believe that the US business, which currently represents only 6% of totalSmallbone sales, has enormous potential as the size of the US market isestimated at some 12 times the UK. As announced on 25 February, we have been awarded a further contract withacclaimed US real estate developer, Extell Development Company, to providebespoke luxury kitchens to Extell's new residential development. Thisdevelopment, expected to complete in 2009, will comprise a limited collection of22 apartments for which Smallbone will design and customise kitchens. Revenuesare anticipated to be approximately $2 million in the financial years 2009 and2010. This is the second contract with Extell, following on from a landmarkdevelopment on New York's Fifth Avenue. These apartments are being sold for inexcess of $12 million and all have bespoke Smallbone kitchens. In early 2007, a new Mark Wilkinson dealer opened in Dubai and in December 2007,Smallbone opened in Moscow through a dealership. Whilst we do not expect thesenew showrooms to have an immediate effect on sales, we are confident of thelonger-term potential in these lucrative markets with no capital risk to theGroup, as well as the significant benefits of increasing brand awareness. Financial Results We are delighted with a record 245% increase in pre-tax profits of the Group to£2.6 million (2006: £0.7m) and a 151% increase in Group operating profit to£3.24 million (2007: £1.29 million). Group turnover increased of 17% to £56million (2006: £47.8 million), with EBITDA*up 65% to £5.2 million (2006: £3.1million). The improvement of our gross margin to 45.7% (2006: 43.8%), despite substantialincrease in raw material prices, has been extremely pleasing and reflects boththe strength of our brands' pricing power and the increasing benefits beingderived from economies of scale. We will continue to focus on improving ourgross margins and to control central overheads across the expanding Group. Net operating cash inflow increased by 18% to £4.5 million (2006: £3.8 million).We are a strongly cash generative business, allowing us to continue to invest inour showroom network, which is an important area of growth for the Group. Adjusted earnings per share before exceptional items and share-based paymentswere up 181% to 8.72 pence (2006: 3.09 pence) (refer note 4) and basic earningsper share were up 401% at 8.16 pence (2006: 1.63 pence). This is the first full year report under International Financial ReportingStandards ("IFRS") issued by the International Accounting Standards Board asadopted by the European Union. On 2 August 2007, we issued a restatement of 2006financial information under IFRS, which showed a reconciliation of the restatedmain financial statements under IFRS to the previously published 2006 financialstatements under UK Generally Accepted Accounting Standards ("UK GAAP"). Our2007 financial statements, which will be issued shortly, contain the notes tothe financial statements that IFRS requires both for 2007 and 2006. *Earnings before interest and tax (£3.2 million), deprecation and amortisation(£1.9 million), share-based payments (£0.08 million) and exceptional items(£0.04 million) Dividend Payment As a result of strong operating cash flows and continued confidence in theGroup's performance, the Board is pleased to recommend a final dividend of 1.2pence per share, bringing the total dividend for the year to 1.8 pence. This isan increase of 80% on the prior year and demonstrates our progressive dividendpolicy. Subject to shareholder approval at the Annual General Meeting, the dividend willbe paid on 11 April 2008 to shareholders on the register at 14 March 2008. Outlook Whilst we are ever watchful of the impact of a more challenging economicenvironment, we have seen little evidence so far to indicate any negative impacton our growth expectations. Our Group forward order book, as at 31 December 2007, is at a record level, up14% to £32 million (2006: £28 million) providing strong future revenuevisibility. We are on track to open further new showrooms across the Group in 2008. MarkWilkinson opened in Manchester in January 2008 and is due to open in Brentwood,Essex in March and in Mayfair in the summer. Smallbone opens in Beaconsfield inMarch and Chicago in the second half of this year. We are also delighted to havenew product launches planned for both the Smallbone and Mark Wilkinson brands in2008 and will be announcing further details of these in due course. Current trading in January and February 2008 continues to show no sign ofslowing. As demand continues and, as our record forward order book shows clearvisibility of revenues, we are confident of further growth for the current yearand beyond. Charles Smallbone Chairman and Chief Executive SMALLBONE plc("Smallbone" or "the Group") Operational Review Smallbone of Devizes ("Smallbone"): 46% of Group sales Smallbone delivered a record trading performance in 2007. We now have a total of11 Smallbone showrooms in the UK and are on track to increase our network to 16by the end of 2010. In the next month we will be opening a new showroom inBeaconsfield. The Walnut and Silver kitchen design, launched in 2005, continues to performwell and now accounts for 21% of total Smallbone sales. We are also delightedwith the performance of the Bedroom and Bathroom designs, launched in 2006,where order intake has increased to £4.7 million (2006: £3.4 million). As previously stated, the new Smallbone showroom in New York has performed well,taking over $8.6m of orders. Due to the longer lead times in the United Statesbetween order and delivery, we do not anticipate significant profits fromSmallbone US until 2009. However, we do expect there to be a positivecontribution to the Group operating profit in 2008. We will continue with the international expansion of Smallbone with the openingof a third US showroom in Chicago in the second half of 2008. We remain on trackwith our target of 7 Smallbone showrooms in the US by the end of 2010. Mark Wilkinson Furniture ("MWF"): 42% of Group sales MWF has also delivered a strong trading performance in 2007 with record salesand profits. In February 2007, we opened a new showroom in Weybridge which hasperformed well. In the first three months of this year, MWF will have opened newshowrooms in the centre of Manchester and Brentwood, Essex, taking the totalnumber of MWF showrooms in the UK to 12. We have also secured sites in Mayfairand Litchfield for openings later in the year. Internationally, MWF appointed a dealer in Dubai which opened a showroom in May2007. This added to the six existing overseas dealerships that MWF already has.We are also looking at opportunities for MWF in the US and further dealershipopportunities outside the core UK market. Paris Ceramics: 11.5% of Group sales Paris Ceramics, which operates predominately in the US, had a tremendous 2007.We now have a total of 10 showrooms in the US, all performing well, and we planto open a new showroom in Tribeca, New York later this year. The new productionfacility at Farmville Virginia continues to add value to the Group withsubstantially increased levels of performance as well as economies of scale. Aselected range of Paris Ceramics floors are now being sold through the Smallboneand Mark Wilkinson showrooms and we are delighted with this cross-sellingopportunity. The Hopton Works: 0.5% of Group sales In 2007, we created a new division, The Hopton Works, providing granite, stoneflooring and wood veneer to Group brands and developing bespoke service toexternal clients. In December 2007 we opened a branded showroom next to theDevizes factory and we are delighted that this offering has had early success.The division showed a good maiden profit in 2007 due to the increased volume ofwork performed for Smallbone and Mark Wilkinson, as well as gradually increasingexternal sales. Consolidated income statementfor the year ended 31 December 2007 2007 2006 Unaudited Audited Note £'000 £'000Revenue 2 56,013 47,747Cost of sales (30,442) (26,833)Gross profit 25,571 20,914 Other income 8 29 Distribution costs (15,042) (13,175) Administrative expensesShare-based payments 80 99Depreciation and amortisation 1,859 1,543Exceptional costs of relocation and dispute settlement 45 230Other administrative expenses 5,317 4,606Total administrative expenses (7,301) (6,478) Operating profit 2 3,236 1,290 Finance income 3 3Finance costs (624) (535) Profit before taxation 2,615 758 Tax expense 3 (788) (394) Retained profit for the financial year 1,827 364 Earnings per share 4Basic (pence per share) 8.16p 1.63pDiluted (pence per share) 7.47p 1.52p All amounts relate to continuing activities. Consolidated statement of changes in equityfor the year ended 31 December 2007 Notes Share Share Treasury Merger Foreign Retained Total Capital Premium Shares Reserve Currency Earnings Equity Reserve Reserve £'000 £'000 £'000 £'000 £'000 £'000 £'000AuditedBalance at1 January 2006 1,115 1,818 - 3,604 - (602) 5,935 Currency translation (75) (75)differencesDeferred tax on share 139 139options Net income / (75) 139 64(expense) recogniseddirectly in equity Profit for the year 364 364 Total recognised (75) 503 428income and expensefor the year Share-based payments 99 99 Balance at31 December 2006 1,115 1,818 - 3,604 (75) - 6,462 UnauditedBalance at1 January 2007 1,115 1,818 - 3,604 (75) - 6,462 Currency translation (1) (1)differencesDeferred tax on share 200 200options Net income / (expense) (1) 200 199recognised directly inequity Profit for the year 1,827 1,827Total recognised income (1) 2,027 2,026and expense for theyear Dividends 5 (358) (358)Issue of share capital 9 110 119Share-based payments 80 80Shares of company held (97) (97)by Smallbone TrusteesLtd. Balance at31 December 2007 1,124 1,928 (97) 3,604 (76) 1,749 8,232 Consolidated balance sheetat 31 December 2007 2007 2007 2006 2006 Unaudited Unaudited Audited Audited Note £'000 £'000 £'000 £'000Non-current assetsProperty, plant and equipment 10,393 8,613Intangible assets 12,679 12,175Deferred tax assets 601 457Total non-current assets 23,673 21,245 Current assetsInventories 5,811 5,400Trade and other receivables 3,512 3,548Current tax asset - 21Cash and cash equivalents 1,015 1,608Total current assets 10,338 10,577 Current liabilitiesShort-term borrowings (2,049) (1,663)Current portion of long-term borrowings (1,675) (1,033)Trade and other payables (5,306) (5,371)Current tax liability (670) -Payments received on account (8,530) (8,544)Accruals (1,931) (1,965)Provisions (141) (278)Total current liabilities (20,302) (18,854) Net current liabilities (9,964) (8,277) Non-current liabilitiesLong-term borrowings (5,024) (6,133)Deferred tax liabilities (453) (373)Total non-current liabilities (5,477) (6,506) Total net assets 8,232 6,462 Capital and reserves attributable toequity holders of the companyShare capital 1,124 1,115Share premium 1,928 1,818Treasury shares reserve (97) -Merger reserve 3,604 3,604Foreign currency reserve (76) (75)Retained earnings 1,749 - Total Equity 8,232 6,462 Consolidated cash flow statementfor the year ended 31 December 2007 2007 2007 2006 2006 Unaudited Unaudited Audited Audited Note £'000 £'000 £'000 £'000Cash flow from operating activitiesProfit before taxation 2,615 758Finance income (3) (3)Finance costs 624 535Share-based payments 80 99Depreciation 1,859 1,543Profit on disposal of fixed assets (79) (26)Operating cash flow before changes in 5,096 2,906 working capitalIncrease in inventories (411) (982)Decrease / (increase) in trade and otherreceivables 36 (297)Decrease in trade and other payables (52) (350)(Decrease) / increase in payments onaccount (14) 1,715(Decrease) / increase in accruals andprovisions (171) 812Cash generated from operations 4,484 3,804Income taxes received / (paid) 39 (4)Net cash from operating activities 4,523 3,800 Cash flow from investing activitiesFurther consideration paid in respect ofprior period acquisitions - (23)Purchase of property, plant and (3,497) (3,996)equipmentProceeds from sale of plant and 148 454equipmentPurchase of intangible assets (534) -Interest received 3 3Net cash used in investing activities (3,880) (3,562) Cash flow from financing activitiesProceeds from the issue of shares 119 -Purchase of treasury shares (97)Proceeds from long-term loans 601 6,266Repayment of long-term loans (1,132) (6,056)Net payment of finance lease liabilities (130) (197)Interest paid (624) (535)Dividends paid (358) -Net cash used in financing activities (1,621) (522) Net decrease in cash and cashequivalents 6 (978) (284) Notes to the preliminary financial information 1 Basis of preparation The consolidated preliminary financial information has been prepared under thehistorical cost convention and in accordance with International FinancialReporting Standards as endorsed by the European Union ('IFRS') and effective atthe Group's year end of 31 December 2007, which are mandatory for accountingperiods beginning on or after 1 January 2007. Comparative information for theyear ended 31 December 2006 has been restated on an IFRS basis. The comparativeinformation has been taken from the "Restatement of 2006 financial informationunder IFRS" statement ("the Restatement for IFRS") issued by the company on 2August 2007, which shows the reconciliation between the figures under IFRS andthe previously reported figures under UK Generally Accepted Accounting Practice("UK GAAP"). The accounting policies applied are consistent with those set out in thefinancial statements of Smallbone plc for the year ended 31 December 2006 asamended in the Restatement for IFRS referred to above. The financialinformation in the announcement is unaudited and does not constitute thecompany's statutory accounts for the years ended 31 December 2007 or 2006. Thefinancial information for the year ended 31 December 2006 is derived from thestatutory accounts for that year, which were prepared under UK GAAP, which havebeen delivered to the Registrar of Companies. The auditors reported on thoseaccounts; their report was unqualified, did not include references to anymatters to which the auditors drew attention by way of emphasis withoutqualifying their reports and did not contain statements under the Companies Act1985, s 237(2) or (3). The auditors have prepared a Special Purpose AuditReport on the financial information for the year ended 31 December 2006, whichhas been in accordance with the recognition and measurement requirements ofIFRSs. Their report, which was appended to the "Restatement of 2006 financialinformation under IFRS" published on 2 August 2007, was unqualified but didinclude references to matters to which the auditors drew attention by way ofemphasis without qualifying their report as set out below: • The basis of preparation note to the preliminary consolidatedIFRS financial information explains why the accompanying preliminaryconsolidated IFRS financial information may require adjustments before theirinclusion as comparative information in the IFRS financial statements for theyear ending 31 December 2007 when the Company prepares its first IFRS financialstatements. • As described in the basis of preparation note to the preliminaryconsolidated IFRS financial information, as part of its conversion to IFRS, theCompany has prepared the preliminary consolidated IFRS financial information forthe year ended 31 December 2006 to establish the financial position and resultsof operations of the Company necessary to provide the comparative financialinformation expected to be included in the Company's first complete set of IFRSfinancial statements as at 31 December 2007. The preliminary consolidated IFRSfinancial information does not itself include comparative financial informationfor the prior period. • As explained in the basis of preparation note, no adjustmentshave been made for any changes in estimates made at the time of approval of theUK GAAP financial statements on which the preliminary consolidated IFRSfinancial information is based, as required by IFRS 1. IFRS standards and interpretations that have come into force since theRestatement for IFRS statement and before 31 December 2007, have not led to anymaterial adjustment of the 2006 figures reported in the Restatement of IFRS. The statutory accounts for the year ended 31 December 2007, prepared inaccordance with IFRSs as adopted by the EU, will be finalised on the basis ofthe financial information presented by the directors in this preliminaryannouncement and will be delivered to the registrar of Companies following thecompany's annual general meeting. 2 Segmental analysis i) Primary segmental reporting format The Group's primary segment information is based on its operating divisions. Smallbone Mark Paris Hopton Smallbone Corporate Group UK Wilkinson Ceramics Works USA and other2007 £'000 £'000 £'000 £'000 £'000 £'000 £'000 RevenueTotal segment revenue 25,032 23,509 6,478 3,060 1,486 2,400 61,965Inter-segment revenue (757) - (31) (2,764) - (2,400) (5,952) 24,275 23,509 6,447 296 1,486 - 56,013 Operating profit / (loss) 2,002 2,274 407 673 (1,099) (1,021) 3,236Net finance costs (621) Profit before tax 2,615Taxation (788)Profit for the financial 1,827year Balance sheetAssets 10,122 10,407 4,041 2,512 1,808 5,121 34,011Liabilities (7,109) (7,952) (4,508) (2,208) (3,616) (386) (25,779)Net assets / (liabilities) 3,013 2,455 (467) 304 (1,808) 4,735 8,232 Other informationCapital additions 955 2,139 272 187 658 26 4,237Depreciation and 562 768 205 93 231 - 1,859amortisationOther non-cash expenses 34 20 12 - - 14 80 Smallbone Mark Paris Hopton Smallbone Corporate Group UK Wilkinson Ceramics Works USA and other2006 £'000 £'000 £'000 £'000 £'000 £'000 £'000 RevenueTotal revenue 20,561 21,542 5,430 1,650 54 - 49,237Inter-segment revenue (1,490) (1,490)External revenue 20,561 21,542 5,430 160 54 - 47,747 Operating profit / (loss) 1,220 1,943 (144) (61) (847) (821) 1,290Net finance costs (532) Profit before tax 758Taxation (394)Profit for the financial 364year Balance sheetAssets 10,549 8,521 3,460 1,369 1,230 6,693 31,822Liabilities (7,847) (6,579) (4,012) (1,620) (2,365) (2,937) (25,360)Net assets / (liabilities) 2,702 1,942 (552) (251) (1,135) 3,756 6,462 Other informationCapital additions 1,008 976 330 678 1,212 - 4,204Depreciation and 626 598 166 73 80 - 1,543amortisationOther non-cash expenses 49 20 11 - - 19 99 2 Segmental analysis (continued) ii) Secondary segmental reporting format The Group's secondary reporting format is by geographic segments. External revenue by Total assets by Capital expenditure by location of location of location of assets customers assets 2007 2006 2007 2006 2007 2006 £'000 £'000 £'000 £'000 £'000 £'000United Kingdom 45,810 40,061 28,390 27,132 3,307 2,662North America 8,742 5,595 5,621 4,690 930 1,542Europe 1,011 1,274 - - - -Rest of world 450 817 - - - - 56,013 47,747 34,011 31,822 4,237 4,204 Inter-group sales that are made to fulfil a contract to an external customer aresold to the relevant inter-group company at the price that the selling companywould sell to a distributor of its products or services. Inter-group sales thatare made for retention by another group company (e.g. as part of a showroomfit-out) are sold at cost, 3 Tax expense In 2007, the tax expense is similar to the standard rate of corporation tax inthe UK applied to the result before tax. In 2006, the tax assessed for theperiod was higher than the standard rate of corporation tax in the UK applied tothe result before tax primarily due to the reversal of a deferred tax asset as aresult of utilising the tax losses held by group companies against 2006'sprofits. 4 Earnings per share The profit per ordinary share has been calculated using the weighted averagenumber of shares in issue during the year of 22,395,310 (2006: 22,305,593), andthe profit, being the profit after tax, is £1,827,000 (2006: £364,000). The shares used in the calculation of diluted earnings per share are as follows: 2007 2006 Number NumberShares used for calculation of basis EPS 22,395,310 22,305,593Exercise of options 2,058,296 1,572,140 24,453,606 23,877,733 The effect of adjusting earnings for exceptional items and share-based paymentsis shown below. The Directors consider that this gives a useful indication ofunderlying performance. 2007 2006 Adjusted earnings per £'000 Basic Diluted £'000 Basic DilutedshareProfit for the year 1,827 8.16 7.47 364 1.63p 1.52pExceptional items (see 45 0.20 0.18 230 1.03p 0.96pNote 6)Share-based payments 80 0.36 0.33 99 0.44p 0.41p 1,952 8.72 7.98 693 3.09p 2.90p 5 Dividend 2007 2006 £'000 £'000Final dividend of 1 pence (2006: nil) per ordinary shareproposed and paid in the year relating to 2006 results 224 -Interim dividend of 0.6 pence (2006: nil) per ordinary sharepaid during the year 134 - 358 - The directors are proposing a final dividend of 1.2 pence (2006: 1 pence) pershare, totalling £270,000 (2006: £224,000). This dividend has not been accruedat the balance sheet date. 6 Notes supporting the cash flow statement Cash and cash equivalents comprise: 2007 2006 £'000 £'000Cash available on demand 1,015 1,608Overdrafts (2,049) (1,663) (1,034) (55) Net decrease) in cash and cash equivalents (978) (284)Changes in foreign exchange rates (1) (31) Cash and cash equivalents at 1 January (55) 260Cash and cash equivalents at 31 December (1,034) (55) The only significant non-cash transaction, which would be classified as afinancing activity, was assets acquired under finance leases amounting to£207,000 (2006: £360,000). 7 Analysis of cash and cash equivalents and borrowings At At 1 January Non-cash 31 December 2007 Cash flow movements 2007 £'000 £'000 £'000 £'000Cash at bank and in hand 1,608 (592) (1) 1,015Overdrafts (1,663) (386) - (2,049) (55) (978) (1) (1,034) Bank loans due within one year (812) (546) (1,358)Bank loans due after one year (5,436) 1,078 1 (4,357)Finance lease and hire purchase liabilities (918) 130 (196) (984)Total (7,221) (316) (196) (7,733) This information is provided by RNS The company news service from the London Stock Exchange