WGB.L Regulatory News (WGB)

15 April 2015

WALKER GREENBANK PLC

("Walker Greenbank" or "the Company")

Preliminary Results for the year ended 31 January 2015

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 2015.

Highlights

· Sales up 6.3% to £83.4 million (2014: £78.4 million), with UK Brands sales up 10.3% driven by increasing consumer confidence

· Unadjusted profit before tax up 15.2% at £6.33 million (2014: £5.50 million)

· Adjusted profit before tax* up 10.9% at £8.13 million (2014: £7.33 million)

· Successful launch of the international contemporary Anthology brand in March 2014, with the brand's sales exceeding expectations

· Continued investment in the Company including further digital capacity, relaunched brands websites, a new warehouse facility and showroom extensions in New York and London

· Adjusted earnings per share** up 3.0% at 11.64p per share (2014: 11.30p per share)

· Final dividend up 24.8% to 1.96p per share (2014: 1.57p per share), giving a total dividend up 24.9% at 2.31p per share (2014: 1.85p per share)

* Adjusted profit before tax excludes 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 10 weeks our total Brands sales are up 7.9% in reportable currency, 8.6% in constant currency, compared with the same period last year with sales in the UK, our largest market, up 8.1%. Overseas Brands sales are up 7.6% in reportable currency, 9.5% in constant currency. Manufacturing has continued to perform well.

"We are excited by our new product launches, including the third collection from the Anthology brand and by Zoffany's spring launch which will be its biggest launch in six years. We look forward with confidence to the year ahead."

Analyst meeting

A meeting for analysts will be held at 10am today, 15 April 2015, at the offices of Buchanan, 107 Cheapside, London EC2V 6DN. For further details, contact Buchanan on 020 7466 5000.

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 85 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

I am pleased to report that the Group continues to make good progress and has delivered another significant increase in profitability and dividend payments, reflecting our continued focus on developing our product offering, market penetration, manufacturing capability and international expansion.

We continue to deliver our strategy through further investment in product development, sales and marketing and manufacturing. During the year we invested in additional digital printers at both of our manufacturing sites to meet demand and to allow continued innovation in our printing techniques. We also opened a second warehouse in Milton Keynes for our wallcoverings storage and distribution. The major extension and refurbishment of our flagship New York showroom was officially opened in October 2014 and has helped to drive US sales in the latter part of the year.

Total Brand sales were up 6.4% during the year at £64.7 million. The UK, our largest market, delivered a strong sales performance, up 10.3% at £38.5 million, reflecting strong retail sales and a continuing resurgence of the contract market.

Our overseas Brand sales were up 1.5% in reportable currency, 5.1% in constant currency, impacted by the strength of sterling. Sales in Western Europe, the Group's second biggest market, were up 4.8% in reportable currency, 11.4% in constant currency, driven by strong sales growth in most regions. In the US, our third largest market, sales grew 0.7% in reportable currency, 5.1% in constant currency. Sales were impacted by the six month closure of our New York showroom; since the reopening, and with an improving economic environment, we achieved strong double digit growth in the last quarter of the financial year.

Brand sales in the Middle East grew by 20.1% in constant currency aided by the opening of the Dubai showroom in Q3 2013. Sales in the Rest of the World grew 1.0% in constant currency held back by market conditions in Japan as a result of the increase in consumption tax and the impact of sterling.

Licensing income of £2.1 million was down 2.4% in reportable currency, up 3.6% in constant currency, reflecting the weakness of the Yen and a strong comparator last year following the 150th anniversary of Morris & Co. We are pursuing the extension of our product offering through new licensing arrangements and recently appointed a dedicated Licensing Director. We remain confident about the future potential for this important strategic contributor to our growth.

Our UK manufacturing base is a key asset that differentiates us from others in our industry and puts us at the forefront of innovation in printing techniques. Our continuing investment in new digital printers has helped us grow our manufacturing sales and profits on what was a record year last year. We are particularly pleased by the 8.1% growth in UK manufacturing sales to external customers, a large proportion of which is driven by digital printing.

We have progressed our digital sales and marketing strategy by launching updated industry-leading websites for each of our brands and by the launch of a new functional website, Style Library (www.stylelibrary.com), which showcases all of the Group's products. These websites have B2B and B2C e-commerce capabilities and, during the second half of the year, we launched our B2B e-commerce platform with customers in the US.

Financials

Total sales increased 6.3% to £83.4 million (2014: £78.4 million). The operating profit before an accounting charge relating to the Long-Term Incentive Plan ('LTIP') rose 11.0% to £8.34 million (2014: £7.51 million). The profit from operations was up 12.1% to £7.34 million (2014: £6.54 million). The interest charge has increased from £180,000 to £208,000 due to higher average borrowings. The defined benefit pension charge has reduced from £868,000 to £798,000 driven by a reduction in the service cost.

Profit before tax excluding the LTIP accounting charge and the net defined benefit charge was £8.13 million (2014: £7.33 million), an increase of 10.9%. The profit before tax after the two non-cash charges was £6.33 million (2014: £5.50 million). The profit after tax was £5.11 million (2014: £5.04 million) and basic adjusted earnings per share were up 3.0% 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 £3.26 million (2014: £5.95 million), reflecting strong operating profits and also significant investment in product. The Group has continued to invest in the period with capital expenditure of £3.25 million (2014: £4.74 million).

Dividend

During the year, the Group has paid a final dividend for the year to 31 January 2014 of 1.57p per share and an interim dividend of 0.35p per share. The Directors recommend the payment of a final dividend of 1.96p per share (2014: 1.57p) which will be payable on 7 August 2015 to shareholders on the register on 16 July 2015. This brings the total dividend for the year to 2.31p per share (2014: 1.85p) an increase of 24.9%, which reflects Directors' confidence in the future prospects and financial strength of the Group.

People

On behalf of the Board, I would like to thank all of our management and employees for their contribution to another successful year.

Outlook

The current financial year has started well. In the first 10 weeks our total Brands sales are up 7.9% in reportable currency, 8.6% in constant currency compared with the same period last year with sales in the UK, our largest market up, 8.1%. Overseas Brands sales are up 7.6% in reportable currency, 9.5% in constant currency. Manufacturing has continued to perform well.

We are excited by our new product launches, including the third collection from the Anthology brand and by Zoffany's spring launch which will be its biggest launch in six years. We look forward with confidence to the year ahead.

Terry Stannard

Non-Executive Chairman

15 April 2015

CHIEF EXECUTIVE'S STRATEGIC REVIEW

I am pleased to report that the Group continues to make strong growth in both sales and profits and to further implement its strategy, which comprises:

· 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;

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

· 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;

· British manufacturing capability - 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 and ambitions, with the objective of further advancing shareholder value.

The Brands

This segment incorporates global trading from our internationally recognised brands and includes our overseas subsidiaries in the US and France.

In order to fully leverage our global brand assets we have recently made some important organisational changes including the creation and appointment of three new senior operational roles: Design Director Brands, Marketing Director Brands, and Licensing Director Brands. These appointments will play a critical role in further developing and delivering our strategic ambitions by bringing together the management of the Brands.

Total Brands sales increased by 6.4% compared with last year to £64.7 million as a result of continued investment in design, marketing and distribution, and from new product launches. This has led to a 12.1% increase in operating profits to £7.4 million.

In the UK, Brands sales increased 10.3% to £38.5 million driven by the recovery of the UK economy and consumer confidence, together with a resurgence in the contracts division.

Despite challenging market conditions, Western Europe Brand sales have increased 4.8% in reportable currency, 11.4% in constant currency, to £7.0 million with most regions performing strongly, particularly Southern Ireland. Other highlights include sales in the Middle East, up 20.1% in constant currency, to £1.0 million and growth in Australasia, up 14.2% in constant currency, to £1.1 million.

Sales in the US increased by 0.7% in reportable currency, 5.1% in constant currency. Sales in this important market were adversely affected by the total refurbishment and extension of our New York showroom. However, since it reopened with a major launch event in October of last year we have seen an improving trend in sales. We see the US as an extremely important opportunity for the Group.

Global licensing income is a key part of our strategy and an important income stream for the Group. Income was down 2.4% in reportable currency, up 3.6% to £2.1m in constant currency. Income has been impacted by the weakness of the Japanese Yen and exceptionally strong comparators last year following the 150th anniversary of Morris & Co.

Harlequin incorporating Scion & Anthology

Harlequin has grown its worldwide sales 11.1% in reportable currency over the same period last year to £29.0 million and remains the UK's leading mid-market contemporary brand. Sales in the UK have increased 9.1% driven by the success of its spring 2014 launch, Jardin Bohème, and the 2014 Momentum collections. In the US, Harlequin has seen significant growth, up 10.7% in reportable currency, 14.9% in constant currency and sales in Western Europe have grown 21.6% year on year in reportable currency, 29.0% in constant currency, despite challenging market conditions.

The Scion brand launched in February 2012 continues to grow well. Its third collection, Spirit and Soul, launched in the first half of the year has been its strongest yet. This cutting edge brand is accessibly priced making it a success with young, aspirational and fashion-aware customers. Anthology was launched in April 2014 with two contemporary wallpaper collections, designed specifically for overseas markets though also available in the UK. Anthology sales have exceeded expectations and a third collection was launched in March 2015. It is intended to launch a range of Anthology fabrics in the current year to complement the wallpapers. A significant proportion of the sales of both Scion and Anthology were produced in our factories and therefore benefit from strong margins.

During the year Harlequin moved to a substantially larger showroom in Chelsea Harbour, giving it much needed space to display its products.

Arthur Sanderson & Sons incorporating the Morris & Co brand

Sanderson sales were up 3.4% compared with the same period last year at £21.7 million in reportable currency. The UK has been the driver of this growth with an increase of 13.7%. Sales in the US are down 9.7% in reportable currency, down 4.7% in constant currency, sales in Western Europe are down 1.8% in reportable currency, up 4.1% in constant currency. Sales in the Far East are down 26.5% in reportable currency, down 26% in constant currency, as a result of major stock orders and a one-off special production last year not being repeated and the increase in consumption tax in Japan.

Zoffany

Zoffany is positioned at the upper end of the premium market. Total sales have grown by 4.5% compared with the same period last year to £11.2 million in reportable currency driven by sales of more recent collections. Sales in the UK have grown 7.2% in reportable currency. Sales in the US are up 5.5% in reportable currency, up 10.1% in constant currency, sales in Western Europe are down 11.8% in reportable currency, down 6.3% in constant currency.

Warehouse

The transfer of wallpaper storage and distribution to a new additional distribution centre of 40,000 sq. ft. was completed in May 2014 and has enabled us to continue delivering on our strategy through enhanced service levels.

Manufacturing

Manufacturing has delivered another strong performance with both sales and profitability increasing to record levels. Total sales grew 9.1% to £35.1 million leading to an increase in profits of 19.5% to £3.7 million.

Anstey

Anstey, our wallpaper printing business, had a very successful year with sales growing by 9.1% to £18.3 million. Third party sales in the UK were up 3.0% and third party export sales were down 3.6%. Internal sales to our own group brands grew by 17.6% as a result of a stronger launch of new wallpaper collections from the Brands this year.

During the year Anstey invested in a fourth digital printer and correlated digital sampling machine to provide additional capacity to meet demand. Investment has also been made in dedicated finishing equipment for digital product to create a market leading fully finished service. These investments have contributed to Anstey's growth by enhancing capacity, capability and efficiency.

Standfast

Standfast, our fabric printing factory, has seen an increase in annual sales of 9.0% to £16.7 million. Third party sales in the UK grew by 13.2% with sales to our own Group brands increasing 7.7%.

Standfast continues to invest in digital printing and an additional fast-run printer was commissioned during the second half of the year together with an extension to its digital room to allow for future growth. Digital print sales have increased 50% year on year and now represent 32% of total revenue.

Summary

We continue to grow our brands both in the UK and internationally through continuing investment in design, marketing and distribution, and new product launches such as Scion's third collection Spirit and Soul. Sales have also been boosted by the very successful launch of our international brand Anthology and a strong performance by our contracts division.

We are committed to invest in our British wallpaper and fabric printing factories to further enhance their innovative, added value techniques that we are able to offer customers. We have successfully launched our new industry-leading websites for our Brands, opened our new additional warehouse, completed the extension and redesign of our flagship showroom in New York, moved Harlequin into a substantially larger showroom in Chelsea Harbour and made some key senior appointments.

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

CHIEF FINANCIAL OFFICER'S REVIEW

Income Statement

The Chairman's Statement and Chief Executive's 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 Long-Term Incentive Plan ("LTIP") with vesting conditions 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 £1,005,000 (2014: £970,000) in the Income Statement relating to LTIP awards. The charge in the year is higher than last year driven by an increase in the share price compared with the prior year and the associated National Insurance element.

Interest

The net interest charge for the year was £208,000 (2014: £180,000) including amortisation of capitalised debt issue costs reflecting slightly higher borrowings as a result of investment in working capital.

Net Defined Benefit Pension

The Group operates two defined benefit schemes in the UK for its employees. These comprise the Walker Greenbank Pension Plan and the Abaris Holdings Limited Pension Scheme which are both closed to new members and to future service accrual from 30 June 2002 and 1 July 2005 respectively.

The charge during the year was £798,000 (2014: £868,000). The decrease reflects a reduction in service cost.

Current Taxation

There was a corporation tax charge of £596,000 (2014: £21,000) arising from the brought forward UK corporation tax losses within the main UK entity, Abaris Holdings Limited, becoming fully utilised and withholding tax suffered on overseas licence income.

Deferred Taxation

There was a deferred tax charge of £628,000 (2014: £430,000) as the brought forward UK corporation tax losses within the main UK entity, Abaris Holdings Limited, have become fully utilised as at end of January 2015, giving rise to a deferred tax charge.

The Group also continues to recognise the deferred tax asset arising from the pension deficit and LTIP.

Earnings per share ('EPS')

The basic EPS was 8.60p (2014: 8.63p). 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 (in the prior year comparative) 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 11.64p (2014: 11.30p).

Operating Cash Flow and Net Debt

The Group generated net cash inflow from operating activities during the year of £3,255,000 (2014: £5,945,000) reflecting strong operating profits and continued investment in product and marketing materials.

Capital expenditure was £3,230,000 (2014: £4,735,000) and includes investment in additional digital printers at Anstey and Standfast and the extension of our New York showroom. The depreciation and amortisation charge during the period was £2,349,000 (2014: £2,217,000). 

The Group made additional payments to the Pension schemes of £1,240,000 (2014: £1,138,000) to reduce the deficit, part of the ongoing planned reduction, along with £425,000 (2014: £535,000) of pension fund scheme expenses. 

Income tax of £1,584,000 (2014: £936,000) that arose on the vesting of an LTIP award was paid during the year.

The Group had net funds at the year end of £2,000 (2014: £1,490,000). There is average debt during the year due to the timing and seasonality of revenues and investment in product. The average monthly net debt reduced by £15,000 to £4,156,000 (2014: £4,171,000).

The Group utilises facilities provided by Barclays Bank Plc. There is a term property facility of £1,000,000 (2014: £1,395,000) 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 and will be renewed over the next few months. 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 £11,582,000 (2014: £13,092,000). The total facilities have a current limit of £16.50 million (2014: £16.50 million).

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 increase in liabilities is a result of a lower discount rate being applied due to a reduction in the bond rates, which is greater than the increase in the return on scheme assets. The significant improvement in the return on scheme assets is driven by strong performance of index linked gilts. 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 2014 of 1.57p per share and an interim dividend of 0.35p per share. The Directors recommend the payment of a final dividend of 1.96p per share (2014: 1.57p) which will be payable on 7 August 2015 to shareholders on the register on 16 July 2015. This brings the total dividend for the year to 2.31p per share (2014: 1.85p), an increase of 24.9%.

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 liability of £195,000 (2014: £153,000 asset) at the end of the year in relation to US dollar forward contracts.

There is no liability (2014: £nil) 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 still presents a level of risk and in addition to specific provisioning against individual receivables, a provision has been required of £223,000 (2014: £289,000) which is a collective assessment of the risk against non specific receivables. 

Mike Gant

Chief Financial Officer

15 April 2015

Unaudited Consolidated Income Statement

Year ended 31 January 2015

Consolidated Statement of Comprehensive Income

Year ended 31 January 2015

Unaudited Consolidated Balance Sheet

At 31 January 2015

Unaudited Consolidated Cash Flow Statement

Year ended 31 January 2015

Year ended 31 January 2015

Unaudited Consolidated Statement of Changes in Equity continued

Year ended 31 January 2015

Unaudited Notes to the Accounts

1. Basis of preparation

The Group has prepared its consolidated financial statements in accordance with International Financial Reporting Standards adopted for use in the European Union (IFRS).

While the financial information included in this preliminary announcement has been prepared in accordance with the recognition and measurement criteria of IFRS this announcement does not itself contain sufficient information to comply with IFRS. The financial information set out in this preliminary announcement does not constitute the Company's statutory accounts for the year ended 31 January 2015. The unaudited financial information is prepared in accordance with IFRSs as adopted by the European Union and IFRSs as issued by the International Accounting Standards Board, and with the accounting policies set out in the Group's 2014 Annual Report and Financial Statements and as updated by the 2014 Interim Statement.

These accounts will be finalised on the basis of the financial information presented by the Directors in this preliminary announcement and will be delivered to the Registrar of Companies following the Company's annual general meeting. The statutory accounts for the year ended 31 January 2014 have been filed with the Registrar of Companies and contained an auditor's report which was (i) unqualified and (ii) did not contain a reference to any matters to which the auditors drew attention by way of emphasis of matter without qualifying their report, and (iii) did not contain any statement under section 498(2) or (3) of the Companies Act 2006.

This preliminary announcement was approved for release by the Board on 14 April 2015.

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, Anthology 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 2015

Year ended 31 January 2014

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 segment - 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

6. Net defined benefit pension costs

7. Tax

Factors affecting current and future tax charges

No overseas taxation is anticipated to become payable within the immediate future due to the availability of gross tax losses of approximately £1.5 million (2014: £1.9 million).

8. Deferred income tax assets

A net deferred tax asset of £1,591,000 (2014: £2,163,000) has been recognised in respect of tax losses and other temporary differences.

9. Earnings per share

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 6, 7 and 8 are now being met and as a consequence these LTIP awards are now dilutive.

On 22 May 2014, 1,849,663 shares vested under the Company's Long Term Incentive Plan of which 997,008 shares 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 59,762,559 (2014: 59,006,162) ordinary shares of which no (2014: nil) ordinary shares are held in treasury and a further 188,272 (2014: 240,611) ordinary shares are held by the Walker Greenbank PLC EBT with a cost of £347,362 (2014: £49,427). Shares held in treasury or by the EBT are treated as cancelled when calculating EPS.

On 20 May 2013, 1,839,250 shares vested under the Company's Long-Term Incentive Plan and these were issued from the Walker Greenbank PLC Employee Benefit Trust.

The market value of shares held by the EBT at 31 January 2015 was £376,544 (2014: £392,196). The total number of shares held in the EBT at the year end represented 0.3% (2014: 0.4%) of the issued shares.

10. Trade and other receivables

Restatement

Certain assets have been reclassified from trade and other receivables to inventories to better reflect the nature of these items. The financial effect is to increase inventories by £1,278,000 as at 31 January 2014 and to decrease marketing materials by the same amount.

11. Analysis of net funds

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

13. Retirement benefit obligations

The Group operates the following funded defined benefit pension schemes in the UK which offer pensions in retirement and death benefits to members of the Walker Greenbank Pension Plan and the Abaris Holdings Limited Pension Scheme. Pension benefits are related to the members' salary at retirement and their length of service. The schemes are closed to new members and the future accrual of benefits. This disclosure excludes any defined contribution assets and liabilities. The Company's contributions to the schemes for the year beginning 1 February 2015 are expected to be £1,723,000.

14. Post Balance Sheet Event

The Directors have recommended the payment of a final dividend of 1.96 pence per share, at a total cost of £1,153,750 which is subject to the approval of shareholders at the annual general meeting on 17 June 2015.