TSI.L Regulatory News (TSI)

2 Aug 2005 12:06

Coburg Group PLC02 August 2005 COBURG GROUP PLC ("Coburg" or the "Company") Results for the year ended for the year ended 30th April 2005 Chairman's statement Overview Following many years of challenging conditions and a shortage of funds forinvestment the present Board joined the Company to turn around the business.The loss for the year reflects this process. Over the last year we have substantially rationalised the vast number of itemsthe Company was selling and the brands through which they reached our customers.In parallel we have embarked on a programme of investment in our core "Langdons of London", "Giovanni Rizzi" and "Citifilter" labels to create modernattractive brands that reinforced the quality of the tea and coffee we make. We have invested in our factory in Woolwich, South East London. For ten yearsthere had been little investment and as a result much of the equipment was oldand prone to breakdown. There is still much to be done but with the purchase ofa new roaster and investment in our existing equipment we have started to seesome improvements in efficiency in our operations. We have had to invest in the basic infrastructure of IT, software and officeequipment that makes it possible for us to serve our customers to theirsatisfaction. Finally our job has been to raise our presence in the market. This is a longprocess. Rolling out a strategy based around the quality of our product hastaken time and the loss for the year reflects the need to invest before we areable to see a return. Slowly we are raising our profile and now all ourefforts are towards improving sales. This process has not been helped in the year by a near doubling of the greencoffee bean prices. Since the year end prices have fallen but we remain alert tothe need to move away from low margin sales to higher margin premium businessthat more accurately reflect our expertise in coffee and tea blending and ourassociated marketing. Trading Results Sales during the year increased by 7% as a result of a full year of contributionfrom the "Giovanni Rizzi" acquisition that we made in July 2003. The rise in rawcoffee prices increased cost of sales by 15% whilst overheads increased 23% asthe Company began the process of investing in the business and recruiting aprofessional management team. Current Trading Conditions on the High Street remain difficult and the Company is looking for asmall increase in sales over the year. The management has conducted a thoroughreview of the Company's overheads in the last quarter and identified a number ofareas of saving which will be implemented before the half year ends. This islikely to lead to extra one-off overheads in the first half that will berecovered in the second half and beyond. Future Developments and Prospects The Company's objective is to move towards sustainable profitability and thedifficult but necessary work over the last few years has laid the foundationsfor this. In the light of the loss for the year, the need for investment and a number ofnew product developments, the Board is looking at raising funds for the businessthrough a placing. The Board expects to announce the results of its review ofthis shortly. The Board is still looking for suitable acquisitions but will do so only at aprice that adds value to Coburg's shares. I would like to thank the staff for their continued efforts throughout the year.In recognition of this and my strong desire to correlate the staff's interestswith shareholders we are putting in place an Option scheme for all the Company'semployees. I believe strongly that it is the staff that will deliver the returnsfor the Company and I would therefore like them to share in the success of thebusiness. Alistair Summers Chairman 26th July 2005 Consolidated profit and loss account for the year ended 30 April 2005 2005 2004 £000 £000TurnoverContinuing operations 2,874 1,910Acquisitions - 774Total Turnover 2,874 2,684 Cost of sales (1,577) (1,366)Gross profit 1,297 1,318Distribution and selling costs (495) (430)Administrative costs (1,182) (934)Operating (loss) / profitContinuing operations (380) (61)Acquisitions - 15Group operating loss (380) (46)Profit / (loss) on sale of fixed assets in 1 2continuing operationsLoss on ordinary activities before (379) (44)interestInterest payable (17) (6)Loss on ordinary activities before (396) (50)taxationTaxation - -Loss on ordinary activities after taxation (396) (50)Equity minority interests (1) 1 Loss retained for the financial year (397) (49) Loss per share in pence - basic and (2.39) (0.35)diluted There are no recognised gains or losses in either the current or previousfinancial years other than the profits and losses disclosed in the profit andloss account. Accordingly no statement of total recognised gains and losses hasbeen prepared. Consolidated balance sheet at 30 April 2005 2005 2004 £000 £000 £000 £000 Fixed assetsTangible assets 593 610Intangible assets 317 344 910 954Current assetsStocks 193 229Debtors 551 472Cash at bank and in hand 26 236 770 937Creditors: amounts falling duewithin one year (924) (714)Net current assets (154) 223Total assets less current 756 1,177liabilities Creditors: amounts falling dueafter more than one year (87) (112) Minority InterestsEquity minority interests (10) (9)Net assets 659 1,056Capital and reservesCalled up share capital 830 830Share premium account 346 346Other reserves 428 428Profit and loss account (945) (548)Equity shareholders' funds 659 1,056 Approved by the board of directors on 26th July 2005 and signed on its behalf byA. G. Summers, Director and C. W. Birkle, Director Consolidated cash flow statement for the year ended 30 April 2005 2005 2004 £000 £000 £000 £000 Net cash (outflow)/inflow fromOperating activities (98) 219 Returns on investment and servicingof financeInterest paid (17) (6) (17) (6) Capital expenditure and financialinvestmentPurchase of tangible assets (142) (313)Sale of tangible fixed assets 25 8 (117) (305)Acquisitions and disposalsPurchase of business undertaking - (220) - (220)Net cash outflow before financing (232) (312)FinancingProceeds of ordinary share issue - 320 320Net (decrease)/increase in borrowings (14) 147Net cash (outflow)/inflow from (14) 467financing(Decrease)/increase in cash during (246) 155the year Notes to consolidated cash flow statement for the year ended 30 April 2004 2005 2004 £000 £000 Operating loss (380) (46)Depreciation 119 93Amortisation and impairment of goodwill 43 37Decrease/(Increase) in stocks 36 (42)Increase in debtors (79) (58)Increase in creditors 163 235Net cash (outflow)/inflow from operating (98) 219activities Analysis of net funds At 1 May Cash Flow Other non At 30 2004 cash April changes 2005 £000 £000 £000 £000 Cash at bank and in hand 236 (210) - 26Bank overdrafts (21) (73) - (94)Debt due within one year (30) 30 - -Debt due after more than one year (7) 7 - -Net obligations under finance leasesand hire purchase agreements (140) 44 (30) (126) 38 (202) (30) (194) Reconciliation of net cash flow to movement in net debt 2005 2004 £000 £000 (Decrease)/Increase in cash in the period (246) 155Cash outflow from decrease in debt and 44 2lease financingChange in net debt / funds resulting from (202) 157cash flowsNew finance lease and hire purchase (30) (149)obligationsMovement in net debt / funds in the period (232) 8Opening net funds 38 30Closing net funds (194) 38 Notes to the accounts 1 Loss per share for the year ended 30 April 2005 is calculated on the consolidated loss on ordinary activities after tax of £397,000, divided by 16,590,914 this being the weighted average number of ordinary shares in issue during the year. The earnings per share for the year ended 30th April 2004 is calculated on the consolidated loss on ordinary activities after tax of £49,000 divided by 14,055,394 being the weighted average number of shares in issue during the year. 2 The results have been prepared on the basis of the accounting policies as stated in the previous year's financial statements. 3 The financial information set out in the preliminary announcement does not constitute the Company's statutory accounts for the year ended 30th April 2005 or 30th April 2004, but this is derived from those accounts. Statutory accounts for the year ended 30th April 2004 have been delivered to the Registrar of Companies and those for the year ended 30th April 2005 will be delivered following the Company's annual general meeting. The auditors have reported on those accounts; their reports were unqualified and did not contain statements under S237 (2) or (3) Companies Act 1985. 4 Copies of the annual report and accounts will be posted to shareholders on 5th August 2005 and will be made available to the public at Unit 3, Harrington Way, Warspite Road, Woolwich, London SE18 5NU until the Annual General Meeting of the Company which is due to take place on 14th September 2005 at the same address. This information is provided by RNS The company news service from the London Stock Exchange