Half Yearly Report

RNS Number : 0074D

Creightons PLC

25 November 2009

 



Creightons plc

Interim financial report

For the six months ended 30 September 2009

Chairman's Statement

I am pleased to report to you that losses in the first six months to 30 September 2009 at £116,000 are an improvement of £59,000 on the year to 30 September 2008 of £175,000.  It should be noted that the cyclical nature of the Company's business means that it usually trades at a loss in the first half of the year.  This improvement has been achieved despite a reduction in sales as against the same period last year.  

The first six months of the year has been particularly challenging with a reduction in sales of £1,282,000 to £5,675,000 (2008 - £6,957,000).  There has been a significant reduction in the sales of private label products. This reduction in sales is partly due to a continued drive to reduce stock levels on the part of our customers and partly relates to a reduction in sales relating to customers and ranges with relatively high retail selling prices. This sales reduction has been partially offset by a growth in sales of our branded ranges, particularly those products which are targeted at the discount market sector.  

Our gross margins have improved by 0.2% compared to the same period last year in the main due to ongoing work to reduce raw material costs. This margin improvement has been achieved despite the adverse impact of the reduction in sales of products with relatively higher selling prices. 

As mentioned in last year's interim report we have reduced our investment in promoting our branded ranges and focused on driving sales to increasingly price sensitive consumers. This strategy has paid dividends in this period as the contribution from our branded product ranges has increased.  The reduction in costs includes a saving of £41,000 relating to a reduction in salaries on the part of some employees. The agreement with these employees states that this reduction will be repaid if the company returns to profit in the financial year ended 31 March 2010.  

We have continued to consolidate the presence of our brands in the North American market with sales in the six months to 30 September 2009 of £270,000 (2008: £267,000) deriving from a wider customer base and the launch of additional price competitive product ranges.  We intend to continue driving sales growth based on a value driven marketing strategy.

We have maintained our staffing levels in key areas of our business. We will continue to review our overhead structure to ensure it matches revenue projections and new product launch opportunities from new and existing customers.

Our operating loss in the period has decreased by £10,000 (8%) to £104,000 (2008: £114,000).  We expect our seasonal sales to be lower than last year and this will have an impact on the results for the end of the year. We continue to be cautious regarding the underlying level of retail sales. 

We have continued our programme of reducing stock levels, which have fallen by £393,000 to £3,690,000 (2008: £4,083,000). The increase in inventories from March relates to seasonal stock build. While we anticipate that underlying stock levels will continue to reduce, new launch activity in the second half of the year may result in increased stock levels compared to the same period last year.

Lower interest rates and significantly reduced borrowings in the first half of the year have resulted in a reduced interest cost of £12,000 (2008: £61,000). 

I believe that this half year's pre-tax loss at £116,000 (2008: loss of £175,000) is a creditable performance in the current economic climate and puts the business in a strong position to take advantage of any economic upturn when it materialises.  

W O McIlroy

Executive Chairman

25 November 2009

Responsibility statement

We confirm that to the best of our knowledge:

• The condensed set of financial statements has been prepared in accordance with IAS 34:

• The interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year; and

• The interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of material related party transactions and changes therein).

By order of the Board

Nicholas O'Shea

Company Secretary and Director

Creightons plc

Interim financial report

For the six months ended 30 September 2009

Consolidated income statement - unaudited

		Six months ended 30 September		Year ended 31 March
		2009	2008	2009
	Note	£000	£000	£000
Revenue		5,675	6,957	15,155
Cost of sales		(3,379)	(4,156)	(8,994)
Gross profit		2,296	2,801	6,161
Distribution costs		(230)	(239)	(518)
Administration costs		(2,170)	(2,676)	(5,180)
(Loss)/profit from operations		(104)	(114)	463
Investment revenues		-	-	12
Finance costs		(12)	(61)	(97)
(Loss)/profit before tax		(116)	(175)	378
Tax		-	-	-
(Loss)/profit for the period attributable to the equity holders of the parent company		(116)	(175)	378

Earnings per share

Basic	2	(0.21p)	(0.32p)	0.70p
Diluted	2	(0.19p)	(0.29p)	0.63p

Consolidated statement of recognised income and expense

		Six months ended 30 September		Year ended 31 March
		2009	2008	2009
		£000	£000	£000
Exchange differences on translation of foreign operations		40	(17)	(76)
Movements on cash flow hedges taken to equity		(143)	-	179
Net income recognised directly in equity		(103)	(17)	103
(Loss)/profit for the period		(116)	(175)	378
Total recognised income and expense for the period attributable to the equity holders of the parent company		(219)	(192)	481

Creightons plc

Interim financial report

30 September 2009

Consolidated balance sheet - unaudited

		30 September		31 March
		2009	2008	2009
		£000	£000	£000
Non-current assets
Goodwill		331	331	331
Other intangible assets		155	114	112
Property, plant and equipment		398	493	435
		884	938	878
Current assets
Inventories		3,690	4,083	2,550
Trade and other receivables		2,329	2,885	1,537
Cash and cash equivalents		27	307	194
Derivative financial instruments		36	37	191
		6,082	7,312	4,472
Total assets		6,966	8,250	5,350
Current liabilities
Trade and other payables		1,959	2,426	1,576
Obligations under finance leases		14	14	14
Short term borrowings		1,690	2,953	234
Derivative financial instruments		-	-	-
		3,663	5,393	1,824
Net current assets		2,419	1,919	2,648
Non-current liabilities
Long term borrowings		17	31	24
		17	31	24
Total liabilities		3,680	5,424	1,848
Net assets		3,286	2,826	3,502
Equity
Share capital		543	543	543
Share premium account		1,229	1,229	1,229
Capital redemption reserve		18	18	18
Capital reserve		7	7	7
Special reserve		13	13	13
Share-based payment reserve		66	60	63
Retained earnings		1,405	968	1,521
Hedging and translation reserve		5	(12)	108
Total equity available to the holders of the parent company		3,286	2,826	3,502

Creightons plc

Interim financial report

For the six months ended 30 September 2009

Statement of changes in shareholders equity - unaudited

	Share capital	Share premium	Other reserves	Share-based payment reserve	Retained earnings	Total
	£000	£000	£000		£000	£000
Balance at 1 April 2008	543	1,229	38	56	1,143	3,009
Loss for six months ended 30 September 2008	-	-	-	-	(175)	(175)
Debit to equity for share based payments	-	-	-	4	-	4
Balance at 30 September 2008	543	1,229	38	60	968	2,838
Profit for six months ended 31 March 2009	-	-	-	-	553	553
Debit to equity for share based payments	-	-	-	3	-	3
Balance at 31 March 2009	543	1,229	38	63	1,521	3,394
Loss for six months ended 30 September 2009	-	-	-	-	(116)	(116)
Debit to equity for share based payments	-	-	-	3	-	3
Balance at 30 September 2009	543	1,229	38	66	1,405	3,281

Statement of changes in hedging and translation reserves - unaudited

		Hedging reserve	Translation reserve	Total
		£000	£000	£000
Balance at 1 April 2008		-	5	5
Exchange differences on translation of foreign operations		-	(17)	(17)
Balance at 30 September 2008		-	(12)	(12)
Gain on cash flow hedges		179	-	179
Exchange differences on translation of foreign operations		-	(59)	(59)
Balance at 31 March 2009		179	(71)	108
Transfer to Income		(143)	-	(143)
Exchange differences on translation of foreign operations		-	40	40
Balance at 30 September 2009		36	(31)	5

Creightons plc

Interim financial report

For the six months ended 30 September 2009

Consolidated cash flow statement - unaudited

		Six months ended  30 September		Year ended 31 March
		2009	2008	2009
		£000	£000	£000
Net cash (outflow)/inflow from operating activities		(1,500)	(1,215)	1,438
Cash flow from investing activities
Purchase of property, plant and equipment		(21)	(60)	(69)
Expenditure on intangible assets		(91)	(98)	(125)
Net cash used in investing activities		(112)	(158)	(194)
Cash flow from financing activities
Repayment of finance lease obligations		(7)	(7)	(14)
Increase/(decrease) in bank overdrafts		1,456	1,604	(1,115)
Net cash from/(used in) financing activities		1,449	1,597	(1,129)
Net (decrease)/increase in cash and cash equivalents		(163)	224	115
Cash and cash equivalents at start of period		194	79	79
Effect of foreign exchange rate changes		(4)	4	-
Cash and cash equivalents at end of period		27	307	194

Creightons plc

Interim financial report

For the six months ended 30 September 2009

Notes to the interim financial report

      1.   Basis of preparation

The condensed financial statements in this Interim Report have been prepared in accordance with the requirements of IAS 34 'Interim Financial Reporting' as adopted by the European Union.

As required by the Disclosure and Transparency Rules of the UK's Financial Services Authority, the condensed set of financial statements has been prepared by applying the accounting policies and presentation that were applied in the preparation on the Company's published consolidated financial statements for the year ended 31 March 2009, which were prepared in accordance with International Financial Reporting Standards as adopted by the European Union.

The condensed interim financial statements for the six months ended 30 September 2009 and the comparative figures for the six months ended 30 September 2008 are unaudited and have not been reviewed by the Auditors. The summary financial statements for the year ended 31 March 2009 represent an abbreviated version of the Group's full financial statements for that year, on which the Auditors issued an unqualified audit report and which have been filed with the Registrar of Companies.

      2.   Earnings per share

The calculation of the basic and diluted earnings per share is based on the following data:

		Six months ended  30 September		Year ended 31 March
		2009	2008	2009
		£000	£000	£000
Earnings
Net (loss)/profit attributable to the equity holders of the parent company		(116)	(175)	378

		Six months ended  30 September		Year ended 31 March
		2009	2008	2009
		Number	Number	Number
Number of shares
Weighted average number of ordinary shares for the purposes of basic earnings per share		54,275,876	54,275,876	54,275,876
Effect of dilutive potential ordinary shares relating to Share options		5,426,550	5,426,550	5,426,550
Weighted average number of ordinary shares for the purposes of diluted earnings per share		59,702,426	59,702,426	59,702,426

3.    Related party transactions

The related party transactions that occurred in the six months ended 30 September 2009 are not materially different in size or nature to those reported in the Company's Annual Report for the year ended 31 March 2009.

4.    Availability of Interim Report

The Interim Report is being sent to shareholders. Further copies can be obtained from the Company's Registered Office, 1210 Lincoln Road, Peterborough, Cambridgeshire, PE4 6ND.

 

END

 

 

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