WGB.L Regulatory News (WGB)

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WALKER GREENBANK PLC

("Walker Greenbank" or "the Company")

Preliminary Results for the year ended 31 January 2014

Walker Greenbank PLC (AIM: WGB), the luxury interior furnishings group whose brands include Sanderson, Morris & Co., Harlequin, Zoffany, Scion and Anthology, is pleased to announce its preliminary results for the 12 month period ended 31 January 2014.

Highlights

· Sales up 3.6% to £78.4 million (2013: £75.7 million)

· Adjusted profit before tax* up 14.9% at £7.33 million (2013: £6.38 million)

· Unadjusted profit before tax up 11.6% at £5.50 million (2013: £4.93 million)

· Licensing income up 13.6% to £2.13 million (2013: £1.88 million)

· Adjusted earnings per share** up 20.1% at 11.30p per share (2013: 9.41p per share)

· Final dividend up 25.6% to 1.57p per share (2013: 1.25p per share), giving a total dividend up 25.0% at 1.85p per share (2013: 1.48p per share)

· Significant capital investment of £4.74 million (2013: £3.12 million)

· Net funds of £1.5 million (2013: £1.2 million)

* Adjusted for accounting charges relating to share-based incentives and defined benefit charge

** Adjusted earnings per share excludes the accounting charges relating to share-based incentives and defined benefit charge and the deferred tax credit arising from the share-based incentives.

Terry Stannard, the Chairman of Walker Greenbank, said: "The current financial year has started well. In the first 12 weeks our total Brands sales are up 6.7% compared with the same period last year helped by sales in the UK, our largest market, up 9.4%. Overseas Brands sales are up 2.8% in reportable currency and, encouragingly, 7.1% ahead in constant currency. Manufacturing has performed strongly during the first 12 weeks, driven by digital printing.

 "We have recently launched some exciting and innovative products, including Anthology and Scion's third collection, and are continuing to develop our export business. With an improving economic environment, we expect to drive sales growth in both UK and international markets and look forward to the year ahead with confidence."

For further information:

Notes for editors:

About Walker Greenbank

Walker Greenbank PLC is a luxury interior furnishings company that designs, manufactures and markets wallpapers and fabrics together with a wide range of ancillary interior products. The Company's brand portfolio - comprising Sanderson, Morris & Co, Harlequin, Zoffany, Scion and Anthology - spans heritage and contemporary design and its products are sold in more than 75 countries worldwide. The Company derives significant licensing income from the use of its designs in lifestyle products such as bed linen, rugs and tableware.

The Company employs more than 600 people and has showrooms in London, New York, Paris, Amsterdam and Dubai along with partnership showrooms in Moscow and in Shenzhen, China. Its UK manufacturing base, which includes a wallpaper factory in Loughborough and a fabric printing factory in Lancaster, manufactures product both for the Company and for other wallpaper and fabric brands. Continued investment in manufacturing has allowed the Company to offer a wide range of printing techniques.

Walker Greenbank trades on the AIM market of the London Stock Exchange under the ticker symbol WGB.

For further information please visit: www.walkergreenbank.com/

CHAIRMAN'S STATEMENT

Overview

It is pleasing to report a further year of progress at Walker Greenbank and to announce another significant increase in profitability and dividend payments. Looking back over the past four years, we have delivered double digit growth in underlying profitability each year. This track record has been achieved in a mixed global economic environment. As we begin our current financial year, it is encouraging to see positive trends in the UK economy, which is of particular importance as the UK, where we are market leader, is our largest market by sales. We are also encouraged by the economic backdrop in many of our overseas markets.

We have achieved the past four years of growth through the delivery of our strategy, in which continued investment in product, marketing and manufacturing is a recurring theme. During the year we extended the capabilities of our UK factories, including a £1.75 million investment in a hybrid rotary/gravure machine at our wallpaper printing factory in Loughborough. This custom-built machine has allowed the creation of a highly innovative textured wallpaper, which Harlequin launched earlier this month under a new brand named Anthology. Anthology marks the first time that we have specifically designed wallpaper for overseas markets.

Our strategy of licensing our designs for use in lifestyle products, such as bed-linen, has been an important contributor to growth. Last year, our global licensing income grew by £256,000 to more than £2.1 million. This has made a significant contribution to our profit growth but, because licence income is essentially a royalty payment, this income is not proportionally reflected in turnover growth. When we created the Scion brand, which was launched in early 2012, licensing was an integral part of the brand's development. In the short period of time since Scion's launch we have already seen successful ranges of Scion bed-linen, rugs, towels, and other products.

International sales were up 6.6% during the year at £23.8 million, which represents 39% of our Brands sales. Economic recovery in the US helped fuel strong growth, which we continue to see as a major opportunity for the Company. During the year we commenced the extension and redesign of our New York showroom, which, along with other initiatives, will continue to drive US sales. We have also opened a new showroom in Dubai, complementing our existing international showrooms in New York and Paris and our partnership showrooms in Russia and China.

Financials

Total sales increased 3.6% to £78.4 million (2013: £75.7 million). The operating profit before an accounting charge relating to the Long-Term Incentive Plan ('LTIP') rose 14.2% to £7.51 million (2013: £6.58 million). The profit from operations was up 12.2% to £6.54 million (2013: £5.83 million). The interest charge has reduced from £193,000 to £180,000. The net defined benefit pension charge has risen from £704,000 to £868,000 as a consequence of costs associated with the triennial valuation and a reduction in the expected return on scheme assets.

Profit before tax excluding the LTIP accounting charge and the defined benefit charge was £7.33 million (2013: £6.38 million) an increase of 14.9%. The profit before tax after the two charges was £5.50 million (2013: £4.93 million). The profit after tax was £5.04 million (2013: £3.96 million) and basic adjusted earnings per share were up 20.1% after removing the LTIP accounting charge, net defined benefit charge and the deferred tax credit arising from the LTIP.

The cash inflow from operating activities was £5.95 million (2013: £5.80 million), reflecting strong operating profits and continued investment in product. The Group has continued to invest with capital expenditure of £4.74 million (2013: £3.12 million). Despite this investment, the Group had net funds at the year end of £1.49 million (2013: £1.16 million).

Dividend

During the year, the Group has paid a final dividend for the year to 31 January 2013 of 1.25p per share and an interim dividend of 0.28p per share. The Directors recommend the payment of a final dividend of 1.57p per share (2013: 1.25p) which will be payable on 8 August 2014 to shareholders on the register on 18 July 2014. This brings the total dividend for the year to 1.85p per share (2013: 1.48p), an increase of 25.0%.

People

On behalf of the Board, I would like to thank all of our management and employees for their contribution to another successful year. Post the year-end, I was delighted to welcome Mike Gant to Walker Greenbank as Chief Financial Officer. He brings a depth of international, financial, and brand experience to the Company. I would like to thank Mike's predecessor, Alan Dix, for his very valuable contribution during his nine years as Group Finance Director.

Outlook

The current financial year has started well. In the first 12 weeks our total Brands sales are up 6.7% compared with the same period last year helped by sales in the UK, our largest market, up 9.4%. Overseas Brands sales are up 2.8% in reportable currency and, encouragingly, 7.1% ahead in constant currency. Manufacturing has performed strongly during the first 12 weeks, driven by digital printing.

We have recently launched some exciting and innovative products, including Anthology and Scion's third collection, and are continuing to develop our export business. With an improving economic environment, we expect to drive sales growth in both UK and international markets and look forward to the year ahead with confidence.

Terry Stannard

Non-Executive Chairman

28 April 2014

CHIEF EXECUTIVE'S STRATEGIC REVIEW

I am pleased to report the continued progress that the Group has made with the successful implementation of its strategy, comprising:

· Market penetration - to continue to develop our brands in the UK and internationally through the development of new product categories and extension of market positions;

· International expansion - to focus on the distribution and marketing of our brands in the important US, European, and Asia Pacific markets where we see significant potential to grow our existing market share and to invest in the exciting growth opportunities in other international markets;

· Lifestyle product extension - to profit from the global recognition of the Group's heritage brands, Sanderson and Morris & Co, and the contemporary design excellence of the Harlequin and Scion brands, by broadening the product range and exploiting the considerable licensing opportunities;

· To continue to promote our British manufacturing capability through investment in innovative printing techniques and market leading facilities that provide quality, added value products to our customers worldwide; and

· Acquisitions - to actively evaluate acquisition opportunities that fit synergistically with our current brand portfolio with the objective of further advancing our earnings growth.

Overview

We have continued to make strong progress with further growth in sales and profits.

Our Brands have benefited from the continued investment in design, marketing and from new product launches. We are particularly encouraged with the performance of the Scion brand which in its second year has achieved UK and overseas sales of over £2 million. Total Brands sales increased 3.3% to £60.8 million. In a challenging UK market, Brands sales increased by 0.6% over the full year helped by an improving second half trend. Export sales grew 6.6% to £23.8 million driven by strong growth in US and Western Europe markets.

Following the Eurozone crisis in 2012 we are encouraged to report sales growth in Western Europe of 9.3% to £6.7 million in reportable currency, 5.0% in constant currency, driven by Southern Ireland, Benelux, and Germany. The recovery in the US has continued, leading to growth in sales of 8.6% to £7.0 million in reportable currency and 6.9% in local currency. Other highlights include sales in the Far East, up 11.1% to £3.4 million, and growth of 12.7% to £0.9 million in Australasia.

Global licensing income has grown 13.6% to £2.13 million with both the UK and overseas growing strongly. Substantial growth in the UK was achieved by our bed-linen partner, with Scion branded bed-linen launched alongside new ranges for both Harlequin and Sanderson.

Overseas, our Australian bed-linen partner launched the Scion brand alongside Harlequin and Sanderson with immediate positive results whilst in Japan our long term partner for Sanderson/Morris, Nishikawa, developed a full bed and bath offer for Harlequin. Licensing remains a core area of focus for the Group with a number of further initiatives already underway, both at home and abroad.

Manufacturing has had another successful year increasing both sales and profits on what was a record year last year. There continues to be significant investment in digital printing at both the fabric and wallpaper printing sites. This year has also seen a substantial investment at our wallpaper factory of £1.75 million in the commissioning of a custom-built hybrid rotary/gravure machine. Standfast, our fabric printing factory, has advanced the commissioning of its second fast-run digital printer to meet substantial increase in demand from its customers, with digital print sales having more than doubled compared with last year.

The Brands

The Brands segment incorporates global trading from our internationally recognised brands including our overseas subsidiaries in the US and France.

The Brands segment has grown sales by 3.3% over the same period last year to £60.8 million. The Brands' operating profits grew 11.8% to £6.59 million helped by strong licensing income and improved operating margins.

Harlequin & Scion

Harlequin has grown its worldwide sales 3.8% to £26.1 million compared with the same period last year. It continues to be the UK's leading mid-market brand achieving growth of 1.1% in a challenging UK market. It has cemented its position as the Group's number one brand in the US, growing 21.3% year on year. Sales in Western Europe continue to improve, growing 14.4% over last year, whilst elsewhere sales were broadly flat.

The Scion brand was launched in the early part of last year. It continues to grow its brand presence and its second extensive collection, Wabi Sabi, was launched in February 2013. Its simple contemporary designs are ideally suited to licensed products and to date successful ranges of bed-linen, rugs, towels, and other ancillary products have been launched. The impact of this exciting new brand cannot be overstated - its recently launched third collection, Spirit and Soul, being hailed by customers as its strongest yet.

Arthur Sanderson & Sons incorporating the Morris & Co brand

Encouragingly, sales at Sanderson grew 5.0% over the same period last year to £21.0 million. A strong second half performance has helped grow the UK, its largest market, 3.5% over the same period last year to £11.1 million. Export sales overall grew 7.0%, with Western Europe, its largest market outside the UK, growing 1.1%, helped by a stronger second half performance, particularly in Germany and Southern Ireland. The US, its second biggest export market, increased sales by 4.7% year on year whilst the rest of the world grew 11.6% driven by the Far East, up 31.9%, and specifically Japan and China, up 52.6% and 38.8% respectively, reflecting the strength of the Sanderson and Morris & Co brands.

The Sanderson and Morris & Co brands benefit from heritage and global brand recognition, as well as an extensive archive of designs to attract licensing opportunities. Licence income increased 7.6% over the same period last year. UK and Australian bed-linen licensees have helped drive this growth along with a number of new licence arrangements signed during the year.

Zoffany

Zoffany is positioned at the upper end of the premium market, which has been the most challenging end of the market in the recent past. This led to the decision to discontinue some older, slow-selling collections slightly early impacting the performance in the first half of the year which has contributed to a full year sales decline of 1.9% to £10.7 million. Encouragingly though, the second half has experienced an improving performance over the same period last year benefitting from strong performances from more recent collections.

Sales in the UK declined 5.8%. In contrast, Zoffany's second largest market, the US, grew by 3.8% and sales in Western Europe were up 17.6%, driven by strong performances in Southern Ireland and Spain.

Manufacturing

Our continued commitment to investment in our wallpaper and fabric printing factories has helped deliver another strong performance with both sales and profitability increasing to record levels. Total sales grew 7.0% leading to an increase in profits of 14.5% to £3.1 million (2013: £2.7 million).

Anstey

Anstey, our wallpaper printing factory, had a very successful year with sales growing by 6.9% to £16.8 million over the same period last year. Third party sales in the UK were up 7.1% and third party export sales were up 2.7% whilst sales to our own brands grew by 7.5%.

Anstey has continued its investment in new innovative printing techniques. Its recent investment includes the purchase of its third digital printer and most significantly a £1.75 million investment in a new hybrid rotary/gravure machine. This new custom-built machine has increased much needed gravure capacity and replaced outdated rotary equipment leading to improvements in efficiency and capability. This purchase adds to the wide range of printing techniques that the factory is able to offer its customers. The new machine enables the creation of new textured wallpaper product by combining the two print techniques. This capability was used by Harlequin in its Leonida collection launched in the second half and by third party customers developing their own new products. It has also helped the Harlequin brand create the recently launched Anthology collections. Whilst these collections will be available in the UK, the designs have been specifically developed for export customers.

Standfast

Standfast, our fabric printing factory, also had a strong performance with annual sales up 7.1% to £15.4 million compared with the same period last year. Third party sales are up 2.7% with sales to our own brands increasing 9.0% with a stronger launch of new print collections from the Brands this year. Due to increasing customer demand, a second fast-run digital printer was acquired and commissioned in the second half. This, combined with the investment in digital printing over the past five years, has helped grow digital sales 110% year on year and now represents 23% of Standfast's sales. This continued investment in technology and innovation, together with our extensive historic archives, has helped create the platform to investigate other market opportunities such as upper end apparel.

Summary

We have continued to grow our brands both in the UK and internationally during the year through our sustained investment in design, marketing and from new product launches such as the Scion brand which in its second year has delivered sales of more than £2 million. Wabi Sabi its second collection launched in the spring of 2013 won the gold award for Best Fabric and silver for Best Wallcovering at the recent House Beautiful Awards.

Internationally, we have seen encouraging growth driven by the US, Western Europe, and the Far East. With the recent launch of our Anthology collections combined with improving trends in the UK, our largest market, we are confident that we will continue to build market share.

Global licensing income delivered a strong performance as we continue to find new opportunities to leverage the Group's heritage brands. Product extensions for 2014 will include a contemporary collection of Momentum bed-linen designs under the Harlequin brand and a range of Morris & Co bed-linen.

We have continued to invest in our British manufacturing sites to further enhance the innovative, added value, techniques that we are able to offer our customers. In addition, the Group has opened a new design showroom in Chelsea Harbour and another in Dubai and we are currently extending and re-designing our New York showroom.

We have also made a significant investment of £400,000 during the past 12 months to transform our presence online. Customers can now view our products, experiment with different designs and order samples online on any device from a PC to a smartphone. We are particularly excited by our Style Library website as it marks the first time that all our brands and products have been accessible in the same place online.

The new websites are integrated into the Company's central IT system, which was launched in January last year after a substantial investment in renewing our IT platform. The new websites have the functionality for B2B e-commerce, which we believe could have considerable potential in our planned expansion in the US.

We will continue to focus on delivering against our strategy and the Board remains confident of our future growth prospects.

John Sach

Group Chief Executive

28 April 2014

CHIEF FINANCIAL OFFICER'S REVIEW

Income Statement

The Chairman's Statement and Chief Executive's Strategic Review provide an analysis of the key factors impacting the revenue and operating profit. In addition to the information on our Brands and Manufacturing divisions included in these reports, the Group has included in note 2 of this Preliminary announcement further information on our segments. This is the basis on which the Group presents its operating results to the Board of Directors which is considered to be the Chief Operating Decision Maker ('CODM') for the purposes of IFRS 8.

Long-Term Incentive Plan ('LTIP')

There has been a new award of shares during the year under the LTIP with the vesting conditions of half the award based on Total Shareholder Return ('TSR') with an adjusted profit before tax floor and half based on Earnings Per Share ('EPS') growth. There has been a charge of £970,000 (2013: £746,000) in the Income Statement relating to LTIP awards. The charge in the year is higher than last year as the relative position of Walker Greenbank PLC within the comparator group has risen which means the number of shares that would vest under each award has increased. This increase in the number of shares along with the increase in share price has also resulted in a significant increase in the national insurance element of the charge for the period.

Interest

The net interest charge for the year was £180,000 (2013: £193,000) including amortisation of capitalised debt issue costs.

Net Defined Benefit Pension

The charge during the year was £868,000 (2013: £704,000). The increased charge reflects the additional costs associated with the triennial valuation and a reduction in the expected return on scheme assets.

Current Taxation

There is a small corporation tax charge of £21,000 (2013: £16,000) arising from withholding tax suffered on overseas licence income.

Deferred Taxation

Due to brought forward UK corporation tax losses of £6.3 million (2013: £9.1 million), the Group does not anticipate paying significant UK corporation tax in the coming year. However, as the corporation tax losses that are being utilised have been recognised as a deferred tax asset, in the current and following year there will be a deferred tax charge in the Income Statement as the losses are utilised. It is expected that given the current level of taxable profits within the main UK entity, Abaris Holdings Limited, the tax losses giving rise to the deferred tax asset will either be fully utilised or nearly fully utilised by January 2015.

The Group also continues to recognise the deferred tax asset arising from the pension deficit. Although there has been an increase in the pension deficit, a reduction in the tax rate from 23% to 20% has resulted in a small decrease in the associated deferred tax asset which has been recognised in the Statement of Comprehensive Income.

Earnings per share ('EPS')

The basic EPS was 8.63p (2013: 6.89p). The Group also reports an adjusted EPS which removes the impact of the LTIP accounting charge, net defined benefit pension charge and the deferred tax credit arising from LTIP as these can fluctuate due to external factors outside of the control of the Group. A better understanding of the underlying performance of the business is given after adjusting for these items. The adjusted basic EPS was 11.30p (2013: 9.41p).

Operating Cash Flow and Net Debt

The Group generated net cash inflow from operating activities during the year of £5,945,000 (2013: £5,798,000) reflecting strong operating profits and continued investment in product.

The Group paid net interest of £180,000 (2013: £209,000), as the level of average borrowing reduced year on year. Capital expenditure was £4,735,000 (2013: £3,119,000) with significant investment in the hybrid rotary/gravure machine at Anstey, additional digital printing at Standfast and our new websites. The depreciation and amortisation charge during the period was £2,217,000 (2013: £2,048,000). The Group will continue to invest in the Manufacturing facilities and will complete the refurbishment of the New York showroom in the first quarter although capital expenditure during the next 12 months will reduce from this year's increased level.

The Group made additional payments to the Pension schemes of £1,138,000 (2013: £1,077,000) to reduce the deficit, part of the ongoing planned reduction, along with £535,000 (2013: £507,000) of fund scheme expenses.

Income tax of £936,000 (2013: £640,000) that arose on the vesting of an LTIP award was paid during the year.

The Group had net funds at the year end of £1.49 million (2013: £1.16 million). There is average debt during the year due to the timing and seasonality of revenues and investment in product. The average net debt improved by £657,000 to £4,171,000 (2013: £4,748,000).

The Group utilises facilities provided by Barclays Bank Plc. There is a term property facility of £1,400,000 (2013: £1,800,000) at the year end expiring in July 2017. There is also a receivables facility linked to the level of Trade Receivables which allows the Group to more effectively manage seasonal fluctuations in working capital. This facility was renewed on 31 January 2013 for a further three year term expiring in January 2016. There is a three year committed facility of £2.5 million secured against inventories. There were no borrowings at the end of the year for the receivables facility and committed facility. Under these facilities there was borrowing headroom of £13,092,000 (2013: £12,607,000). The total facilities have a current limit of £16.50 million (2013: £16.50m).

All of the Group bank facilities remain secured by first fixed and floating charges over the Group's assets.

Pension Deficit

The pension deficit has increased this year. The key factors affecting the movement in the deficit have been the contributions from the Company to reduce the deficit offset by a negative return on index linked gilts over the year. The impact of these factors is shown as follows:

Dividends

During the year, the Group has paid a final dividend for the year to 31 January 2013 of 1.25p per share and an interim dividend of 0.28p per share. The Directors recommend the payment of a final dividend of 1.57p per share (2013: 1.25p) which will be payable on 8 August 2014 to shareholders on the register on 18 July 2014. This brings the total dividend for the year to 1.85p per share (2013: 1.48p), an increase of 25.0%.

Disposals

There were no major disposals during the year.

Going Concern

The Directors are confident, after having made appropriate enquiries, that the Group and Company have adequate resources to continue trading for the foreseeable future. For this reason they continue to adopt the going concern basis in preparing the financial statements.

Foreign Currency Risk

All foreign currencies are bought and sold centrally on behalf of the Group. Regular reviews take place of the foreign currency cash flows and unmatched exposures are covered by forward contracts wherever economically practical. Working capital exposures are hedged using currency swaps.

The Group does not trade in financial instruments and hedges are used for highly probable future cash flows and to hedge working capital exposures. There is a hedging asset of £153,000 (2013: £63,000 asset) at the end of the year in relation to US dollar and Japanese Yen forward contracts.

There is no liability (2013: £15,000 liability) arising from US dollar and Euro swaps used to hedge working capital exposures.

Credit Risk

The Group no longer seeks credit insurance as this is not a commercial solution to reducing credit risk. The Board reviews the internal credit limits of all major customers and reviews the credit risk regularly. The aging profile of trade debtors shows that payments from customers are close to terms however there have been specific expenses during the year. The current economic environment creates a significant level of risk and in addition to specific provisioning against individual receivables, a provision has been required of £289,000 (2013: £284,000) which is a collective assessment of the risk against non specific receivables.

Mike Gant

Chief Financial Officer

28 April 2013

Year ended 31 January 2014

Year ended 31 January 2014

Unaudited Consolidated Balance Sheet

As at 31 January 2014

Year ended 31 January 2014

Unaudited Consolidated Statement of Changes in Equity

Unaudited Consolidated Statement of Changes in Equity continued

Unaudited Notes to the Accounts

2. Segmental Analysis

The Group has identified its operating segments and applied aggregation criteria, as set out in IFRS 8, and has determined that the reportable segments of the Group are as follows:

- Brands - comprising the design, marketing, sales and distribution, and licensing activities of Sanderson, Morris & Co, Harlequin, Zoffany and Scion brands operated from the UK and its foreign subsidiaries in the US and France.

- Manufacturing - comprising the wall covering and printed fabric manufacturing businesses operated by Anstey and Standfast respectively.

This is the basis on which the Group presents its operating results to the Board of Directors of the parent company, which is considered to be the Chief Operating Decision Maker (CODM) for the purposes of IFRS 8. Additional revenue-only data is also reported to the CODM and is disclosed on the basis explained below. Other group wide activities and expenses, predominantly related to corporate head office costs, defined benefit pension costs, long term incentive plans expenses, taxation and eliminations of intersegment items, are presented within 'Eliminations and unallocated'.

a. Reportable segment information

Year ended 31 January 2014

Year ended 31 January 2013

The segmental revenues of the Group are reported to the CODM in more detail. One of the analyses presented is Brands export revenues, an analysis of which is shown below:

Revenue of the Brands reportable segments - revenue from retail operations in all territories where the sale is sourced from the United Kingdom Brands operations, including sales to overseas subsidiaries, together with contract and license revenue:

Revenue of the Manufacturing reportable segments - including revenues from internal sales to the group's Brands:

b. Additional entity-wide disclosures

3. Analysis of profit from operations

4. Exceptional items

Items that are both material and whose nature is sufficient to warrant separate disclosure and identification are disclosed within the financial statements and classified within their relevant income statement category. In the current year and prior year, there are no exceptional items.

5. Finance costs

Factors affecting current and future tax charges

The Group does not anticipate that UK corporation tax will become payable on profits within the immediate future due to the availability of tax losses of approximately £6.3 million (2013: £9.1 million).

8. Deferred income tax

A net deferred tax asset of £2,163,000 (2013: £2,015,000) has been recognised in respect of tax losses and other temporary differences.

Basic earnings per share ('EPS') is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of shares outstanding during the year, excluding those held in the Employee Benefit Trust ('EBT') and those held in treasury, which are treated as cancelled. The adjusted basic earnings per share is calculated by dividing the adjusted earnings by the weighted average number of shares. As a consequence of the improved profitability of the Group, PBT performance criteria within LTIPs 5, 6 and 7 are now being met and as a consequence these LTIP awards are now dilutive.

On 20 May 2013, 1,003,305 shares vested under the Company's Long-Term Incentive Plan and these were issued from the Walker Greenbank PLC Employee Benefit Trust. Following these transactions Walker Greenbank's issued ordinary share capital with voting rights consists of 59,006,162 (2013: 59,006,162) ordinary shares of which no (2013: nil) ordinary shares are held in treasury and a further 240,611 (2013: 1,243,916) ordinary shares are held by the Walker Greenbank PLC EBT with a cost of £49,427 (2013: £255,528). Shares held in treasury or by the EBT are treated as cancelled when calculating EPS.

The market value of shares held by the EBT at 31 January 2014 was £392,196 (2013: £1,001,352). The total number of shares held in the EBT at the year end represented 0.4% (2013: 2.1%) of the issued shares.

10. Trade and other receivables

In January 2013, the Group agreed terms to renew the Receivables facilities from Barclays Bank PLC for a three-year period and to cancel the existing Inventory facility and replace it with a new Committed facility to a three-year period. Other non-cash changes are capitalisation and amortisation of issue costs relating to the borrowings.

12. Cash generated from operations

14. Post Balance Sheet Event

The Directors have recommended the payment of a final dividend of 1.57 pence per share, at a total cost of £923,000 which is subject to the approval of shareholders at the annual general meeting on 16 July 2014.