Interim Results
Creightons PLC
22 December 2005
Creightons PLC
22 December 2005
CREIGHTONS plc
('the Company')
Interim results for the six months ended 30 September 2005
The Company is pleased to announce its interim results as of 30 September 2005.
Chairman's Statement
The consolidated interim financial statements have been prepared in accordance
with International Financial Reporting Standards (IFRS) in issue and expected to
be endorsed by the European Union by 31 December 2005. Comparative results for
2004 have been restated accordingly.
The first half of this year saw the completion of the disposal of Unit 6, Water
Lane Trading Estate in Storrington and the sale of Units 1-5a, Water Lane,
Storrington became unconditional. The net proceeds from the sale of Unit 6 was
£887,000 with £452,000 used to reduce the term loan and the balance used to
provide funding for the significant stock build required for the Christmas
season. The net proceeds from the sale of Units 1-5 of £680,000 will be used to
repay the balance of the term loan and to repay £200,000 of the loan from
Whiskin Limited.
There has been a slight reduction in sales at £5,209,000 (2004: £5,530,000) due
to the continuing impact of our programme to rationalise sales, concentrating on
higher margin lines, which has resulted in improved percentage gross margins.
Administration and distribution costs have been held in line with last year at
£1,991,000 (2004: £2,015,000). We have made further investment in marketing,
sales support and product development resources, giving additional support to
our developing branded business and with special emphasis on the Christmas gift
programmes which are gaining in importance to the business, and for which we
have undertaken a significant stock build as we go into the second half.
Consequently the Group made a trading profit of £87,000 (2004: £138,000) before
the gain from the property disposal of £413,000 (2005: nil), which was £12,000
higher than anticipated in the circular due to a successful subsequent
renegotiation of the sales price. Lower financing costs of £93,000 (2004:
£114,000) due to reduced borrowings, and nil tax charges due to the brought
forward losses (2005: nil), resulted in a net profit after tax of £407,000
(2004: £24,000).
W O McIlroy
Executive Chairman
22 December 2005
Independent review report to Creightons plc
Introduction
We have been instructed by the company to review the financial information for
the six months ended 30 September 2005 which comprises the income statement,
group balance sheet, statement of changes in shareholders' equity, group cash
flow statement and related notes. We have read the other information contained
in the interim report and considered whether it contains any apparent
misstatements or material inconsistencies with the financial information.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority.
As disclosed in note 2, the next annual financial statements of the Group will
be prepared in accordance with accounting standards issued by the International
Accounting Standards Board and adopted by the European Union.
Review work performed
We conducted our review in accordance with the guidance contained in Bulletin
1999/4 issued by the Auditing Practices Board for use in the United Kingdom. A
review consists principally of making enquiries of group management and applying
analytical procedures to the financial information and underlying financial data
and based thereon, assessing whether the disclosed accounting policies have been
applied. A review excludes audit procedures such as tests of controls and
verification of assets, liabilities and transactions. It is substantially less
in scope than an audit and therefore provides a lower level of assurance.
Accordingly, we do not express an audit opinion on the financial information.
This report, including the conclusion, has been prepared for and only for the
company for the purpose of the Listing Rules of the Financial Services Authority
and for no other purpose. We do not, in producing this report, accept or assume
responsibility for any other purpose or to any other person to whom this report
is shown or into whose hands it may come save where expressly by our prior
consent in writing.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 September 2005.
Chantrey Vellacott DFK LLP
Chartered Accountants
Registered Auditors
Croydon
22 December 2005
Consolidated income statement - unaudited
Six months ended 30 September Year ended 31
March
2005 2004 2005
Note £000 £000 £000
Revenue 5,209 5,530 11,354
Cost of sales (3,131) (3,390) (7,040)
Gross Profit 2,078 2,140 4,314
Other operating income - 13 7
Distribution costs (125) (146) (277)
Administration costs (1,866) (1,869) (3,815)
Restructuring costs 4 - - (431)
Exceptional profit 5 413 - -
Profit/(loss) from operations 500 138 (202)
Finance costs (93) (114) (161)
Profit/(loss) before tax 407 24 (363)
Tax 6 - - -
Profit/(loss) for the period attributable to the holders 407 24 (363)
of the parent company
Earnings per share
Basic 7 0.75p 0.04p (0.67)p
Diluted 7 0.69p 0.04p (0.61)p
Consolidated balance sheet - unaudited
30 September 31 March
2005 2004 2005
Note £000 £000 £000
Non-current assets
Goodwill 364 364 364
Other intangible assets 1 6 3
Property, plant and equipment 445 1,658 1,589
810 2,028 1,956
Current assets
Inventories 3,127 2,124 2,088
Trade and other receivables 2,776 2,224 1,606
Cash and cash equivalents 5 - 1
5,908 4,348 3,695
Total assets 6,718 6,376 5,651
Current liabilities
Trade and other payables 2,029 1,937 2,131
Short term borrowings 8 2,954 1,845 1,310
4,983 3,782 3441
Non-current liabilities
Long term borrowings - 900 892
Deferred tax 15 15 15
15 915 907
Total liabilities 4,998 4,697 4,348
Net assets 1,720 1,679 1,303
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 36 15 26
Retained earnings (126) (146) (533)
Total equity available to the holders of the parent 1,720 1,679 1,303
company
Statement of changes in shareholders equity - unaudited
Share Share Other Share-based Retained Total
capital premium reserves payment earnings
reserve
£000 £000 £000 £000 £000
Balance at 1 April 2004 543 1,229 38 - (199) 1,611
Changes in accounting policy - - - 5 29 34
Restated at 1 April 2004 543 1,229 38 5 (170) 1,645
Profit for six months ended 30 - - - - 24 24
September 2004
Credit to equity for share based - - - 10 - 10
payments
Balance at 30 September 2004 543 1,229 38 15 (146) 1,679
Loss for six months ended 31 March 2005 - - - - (387) (387)
Credit to equity for share based - - - 11 - 11
payments
Balance at 31 March 2005 543 1,229 38 26 (533) 1,303
Profit for six months ended 30 - - - - 407 407
September 2005
Credit to equity for share based - - - 10 - 10
payments
Balance at 30 September 2005 543 1,229 38 36 (126) 1,720
Consolidated cash flow statement - unaudited
Six months ended Year ended
30 September 31 March
2005 2004 2005
Note £000 £000 £000
Net cash (outflow)/ inflow from operating activities 9 (2,218) (467) 117
Cash flow from investing activities
Interest received - - 1
Proceeds on disposal of property, plant and equipment 1,567 10 10
Purchase of property, plant and equipment (97) (55) (96)
Net cash from/(used in) investing activities 1,470 (45) (85)
Cash flow from financing activities
Repayment of borrowings (452) (28) (258)
New bank loans - 900 900
Increase/(decrease) in bank overdrafts 1,204 (361) (674)
Net cash from /(used in) financing activities 752 511 (32)
Net increase/(decrease) in cash and cash equivalents 4 (1) 0
Cash and cash equivalents at start of period 1 1 1
Cash and cash equivalents at end of period 5 0 1
Notes to the interim financial report
1. General information
The interim report does not constitute statutory financial statements as defined
in section 240 of the Companies Act 1985, but should be read in conjunction with
the most recently prepared statutory financial statements, being those for the
year ended 31 March 2005. A copy of the statutory financial statements for that
year has been delivered to the Registrar of Companies. The auditors' report on
those financial statements was unqualified.
2. Accounting policies
The interim financial report has been prepared in accordance with International
financial reporting Standards (IFRSs), including IAS1 'First Time Adoption of
International Financial Reporting Standards' and IAS34 'Interim Financial
Reporting'. European Union law requires that the next annual financial
statements of the company for the year ended 31 March 2006 will be prepared in
accordance with International Financial Reporting Standards adopted for use in
the European Union.
The same accounting policies and methods of computation are followed in the
interim financial report as published by the company on 28 September 2005,
except for:
Goodwill
Goodwill represents the excess of the purchase price over the fair value of the
net assets of business acquired at the date of acquisition. Goodwill is tested
at least annually for impairment and is carried at cost less accumulated
impairment losses. No amortisation is charged.
Other intangible assets
Other intangible assets are carried at cost less accumulated amortisation and
accumulated annual impairment. Amortisation begins when an asset is available
for use and is calculated on a straight-line basis over their estimated useful
lives as follows:
Acquired licences - Over three years
Share based payments
The Group has applied the requirements of IFRS2 'Share Based Payment'. In
accordance with the transitional provisions, IFRS 2 has been applied to all
grants of options after 7 November 2002 that were unvested at 1 January 2005.
The group issues equity-settled share based payment to certain employees.
Equity-settled share-based payments are measured at fair value (excluding the
effect of non market-based vesting conditions) at the date of grant. The fair
value determined at the grant date of the equity-settled share-based payments is
expensed on a straight-line basis over the vesting period, based on the group's
estimate of shares that will eventually vest and adjusted for the effect of non
market-based vesting conditions.
Fair value is calculated using the Black-Scholes model. The expected life used
in the model has been adjusted, based on managements best estimate, for the
non-transferability, exercise restrictions and behavioural considerations.
Segmental reporting
The Group trades in only one business sector and one geographic region. There
is therefore, no segmental reporting required.
3. Operations in the interim period
The business is involved in the sale of personal care products. An important
feature of this trade is the increased sales of gift products for the Christmas
season. These sales largely occur after the reporting period covered by the
interim report, however a significant investment in inventories to support these
sales occurs in the period to 30 September 2005. Changes in retail patterns and
improved logistics means that an increasing portion of the seasonal sales occurs
after 30 September.
Trade and other receivables include £680,000 for the sale of Units 1-5a, Water
Lane, Storrington, which was completed on 1 November 2005.
4. Restructuring costs
The exceptional costs relate to a provision to cover the anticipated costs of
relocating the operations carried out at Storrington following a decision to
dispose of the freehold property.
5. Exceptional profit
The exceptional profit relates to the profit on the disposal of two freehold
sites in Storrington.
6 Tax
There is no liability to UK Corporation tax on the results for the interim
period. There is no liability to tax on the disposal of the properties. The
Group has trading losses which, subject to agreement with the HM Revenue and
Customs, can be carried forward and relieved against future profits of the same
trade.
7 Earnings per share
The calculation of the basic and diluted earnings per share is based on the
following data:
Six months ended Year ended
30 September 31 March
2005 2004 2005
£000 £000 £000
Earnings
Net profit/(loss) attributable to the equity holders of 407 24 (363)
the parent company
Six months ended Year ended
30 September 31 March
2005 2004 2005
Number Number Number
Number of shares
Weighted average number of ordinary shares for the 54,275,876 54,275,876 54,275,876
purposes of basic earnings per share
Effect of dilutive potential ordinary shares relating 4,882,203 5,182,203 5,182,203
to Share options
Weighted average number of ordinary shares for the 59,158,079 59,458,079 59,458,079
purposes of diluted earnings per share
8 Short term borrowings
Six months ended Year ended
30 September 31 March
2005 2004 2005
£000 £000 £000
Bank overdraft and other short term borrowings 1,861 934 621
Short term element of long term borrowings 440 27 36
Other loans 653 884 653
End of period 2,954 1,845 1,310
£452,000 of the bank term loan was repaid out of the proceeds of the sale of
Unit 6, Water Lane Trading Estate, Storrington, which was completed on 7 July
2005. The balance of the term loan, amounting to £440,000 has been
re-classified as a short-term loan as it was repaid when the sale of Units 1-5a,
Water Lane Trading Estate, Storrington was completed on 1 November 2005.
9 Notes to cash flow statement
Six months ended Year ended
30 September 31 March
2005 2004 2005
£000 £000 £000
Profit/(loss) from operations 500 138 (202)
Adjustments for:
Depreciation on property plant and equipment 87 97 196
Amortisation of intangible assets 2 2 5
(Gain)/loss on disposal of property, plant and (413) (10) 1
equipment
Share based payment charge 10 10 21
Operating cash flows before movements in working 186 237 21
capital
Increase in inventories (1,039) (587) (551)
(Increase)/decrease in receivables (1,170) (278) 340
(Decrease)/increase in payables (114) 275 469
Cash (utilised in)/generated from operations (2,137) (353) 279
Interest paid (81) (114) (162)
Net cash (outflow)/inflow from operating activities (2,218) (467) 117
Cash and cash equivalents (which are presented as a single asset on the face of
the balance sheet) comprise cash at bank and in hand.
10 Related party transactions
Transactions between the company and its subsidiary, which are related parties,
have been eliminated on consolidation and are not disclosed in this note.
During the period, group companies entered into the following transactions with
Whiskin Limited, a related party who is not a member of the group:
Six months ended Year ended
30 September 31 March
2005 2004 2005
£000 £000 £000
Loan payable to Whiskin Limited
Start of period 653 854 854
Interest earned 26 39 53
Repayments of interest and capital (14) (39) (254)
End of period 665 854 653
Whiskin Limited is a company of which Mr McIlroy is a director and controlling
shareholder. The amounts outstanding are unsecured and will be settled in cash.
No guarantee has been given or received.
11 Explanation of transition to IFRS
The reconciliation of profits, equity and cash flow statements for the
comparative periods and at 01 April 2004, the date of transition, between those
previously published under UK GAAP and those required by IFRS is detailed below.
Reconciliation of consolidated income statement for the six months ended 30
September 2004
UK GAAP Goodwill Share based IFRS
Amortisation payments
£000 £000 £000 £000
Revenue 5,530 - - 5,530
Cost of sales (3,390) - - (3,390)
Gross Profit 2,140 - - 2,140
Other operating income 13 - - 13
Distribution costs (146) - - (146)
Administration costs (1,876) 17 (10) (1,869)
Profit from operations 131 17 (10) 138
Finance costs (114) - - (114)
Profit before tax 17 17 (10) 24
Tax - - - -
Profit for the period attributable to the 17 17 (10) 24
holders of the parent company
Reconciliation of consolidated income statement for the year ended 31 March 2005
UK GAAP Goodwill Share based IFRS
Amortisation payments
£000 £000 £000 £000
Revenue 11,354 - - 11,354
Cost of sales (7,040) - - (7,040)
Gross Profit 4,314 - - 4,314
Other operating income 7 - - 7
Distribution costs (277) - - (277)
Administration costs (3,828) 34 (21) (3,815)
Other operating expenses - - - -
Restructuring costs (431) - - (431)
Exceptional profit - - - -
(Loss) from operations (215) 34 (21) (202)
Finance costs (161) - - (161)
(Loss) before tax (376) 34 (21) (363)
Tax - - - -
(Loss) for the period attributable to the (376) 34 (21) (363)
holders of the parent company
11. Explanation of transition to IFRS (continued)
An explanation of the impact of the principal differences and resulting
adjustments between UK GAAP and IFRS as they apply to Creighton's consolidated
income statement for the six months ended 30 September 2004 and for the year
ended 31 March 2005 is set out below.
(i) Goodwill amortisation
Under UK GAAP, goodwill was amortised over its useful economic life, not
exceeding 20 years. Under IFRS, goodwill is not amortised but is tested at
least annually for impairment.
For the six months to September 2005 and year to 31 March 2005 under IFRS,
goodwill amortisation of £17,000 and £34,000 respectively expensed has been
reversed.
(ii) Share based payments
Under UK GAAP, no expense was recognised for share options at the time of grant.
Under IFRS an expense is recognised for all equity options granted after
January 2004 based on the fair value of the options at the date of grant
calculated using the appropriate pricing model.
For the six months ended 30 September 2004 and the year ended 31 March 2005
under IFRS operating expenses increase by £10,000 and £21,000 respectively.
Reconciliation of consolidated net assets at 30 September 2004
UK GAAP Goodwill Share base IFRS
Amortisation payments
£000 £000 £000 £000
Non-current assets
Goodwill 313 51 - 364
Other intangible assets 6 - - 6
Property, plant and equipment 1,658 - - 1,658
1,977 51 - 2,028
Current assets
Inventories 2,124 - - 2,124
Trade and other receivables 2,224 - - 2,224
Cash and cash equivalents - - - -
4,348 - - 4,348
Total assets 6,325 51 - 6,376
Current liabilities
Trade and other payables 1,937 - - 1,937
Short term borrowings 1,845 - - 1,845
3,782 - - 3,782
Non-current liabilities
Long term borrowings 900 - - 900
Deferred tax 15 - - 15
915 - - 915
Total liabilities 4,697 - - 4,697
Net assets 1,628 51 - 1,679
Equity
Share capital 543 - - 543
Share premium account 1,229 - - 1,229
Capital redemption reserve 18 - - 18
Capital reserve 7 - - 7
Special reserve 13 - - 13
Share-based payment reserve - - 15 15
Retained earnings (182) 51 (15) (146)
Total equity available to the holders of the 1,628 51 - 1,679
parent company
Reconciliation of consolidated net assets at 31 March 2005
UK GAAP Goodwill Share base IFRS
Amortisation payments
£000 £000 £000 £000
Non-current assets
Goodwill 296 68 - 364
Other intangible assets 3 - - 3
Property, plant and equipment 1,589 - - 1,589
1,888 68 - 1,956
Current assets
Inventories 2,088 - - 2,088
Trade and other receivables 1,606 - - 1,606
Cash and cash equivalents 1 - - 1
3,695 - - 3,695
Total assets 5,583 68 - 5,651
Current liabilities
Trade and other payables 2,131 - - 2,131
Short term borrowings 1,310 - - 1,310
3,441 - - 3441
Non-current liabilities
Long term borrowings 892 - - 892
Deferred tax 15 - - 15
907 - - 907
Total liabilities 4,348 - - 4,348
Net assets 1,235 68 - 1,303
Equity
Share capital 543 - - 543
Share premium account 1,229 - - 1,229
Capital redemption reserve 18 - - 18
Capital reserve 7 - - 7
Special reserve 13 - - 13
Share-based payment reserve - - 26 26
Retained earnings (575) 68 (26) (533)
Total equity available to the holders of the 1,235 68 - 1,303
parent company
Reconciliation of consolidated net assets at 1 April 2004 (Transition date)
UK GAAP Goodwill Share base IFRS
Amortisation payments
£000 £000 £000 £000
Non-current assets
Goodwill 330 34 - 364
Other intangible assets 8 - - 8
Property, plant and equipment 1,700 - - 1,700
2,038 34 - 2,072
Current assets
Inventories 1,537 - - 1,537
Trade and other receivables 1,946 - - 1,946
Cash and cash equivalents 1 - - 1
3,484 - - 3,484
Total assets 5,522 34 - 5,556
Current liabilities
Trade and other payables 1,662 - - 1,662
Short term borrowings 2,188 - - 2,188
3,850 - - 3,850
Non-current liabilities
Long term borrowings 46 - - 46
Deferred tax 15 - - 15
61 - - 61
Total liabilities 3,911 - - 3,911
Net assets 1,611 34 - 1,645
Equity
Share capital 543 - - 543
Share premium account 1,229 - - 1,229
Capital redemption reserve 18 - - 18
Capital reserve 7 - - 7
Special reserve 13 - - 13
Share-based payment reserve - - 5 5
Retained earnings (199) 34 (5) (170)
Total equity available to the holders of the 1,611 34 - 1,645
parent
Reconciliation of consolidated cash flow statement for the six months ended 30
September 2004
UK GAAP Goodwill Share base IFRS
Amortisation payments
£000 £000 £000 £000
Net cash from operating activities (467) - - (467)
Cash flow from investing activities
Proceeds on disposal of property, plant and 10 - - 10
equipment
Purchase of property, plant and equipment (55) - - (55)
Net cash used in investing activities (45) - - (45)
Cash flow from financing activities
Repayment of borrowings (28) - - (28)
New bank loans 900 - - 900
Increase/(decrease) in bank overdrafts (361) - - (361)
Net cash (used in)/ from financing activities 511 - - 511
Net increase/(decrease) in cash and cash (1) - - (1)
equivalents
Cash and cash equivalents at start of period 1 - - 1
Net increase/(decrease) in cash and cash (1) - - (1)
equivalents
Cash and cash equivalents at end of period 0 - - 0
Reconciliation of note to consolidated cash flow statement
UK GAAP Goodwill Share base IFRS
Amortisation payments
£000 £000 £000 £000
Profit from operations 131 17 (10) 138
Adjustments for:
Depreciation on property plant and equipment 97 - - 97
Amortisation of goodwill 17 (17) - -
Amortisation of intangible assets 2 - - 2
(Gain)/loss on disposal of property, plant and (10) - - (10)
equipment
Share based payment charge - - 10 10
Operating cash flows before movements in working 237 - - 237
capital
Decrease/(increase) in inventories (587) - - (587)
Decrease/(increase) in receivables (278) - - (278)
Increase/(decrease in payables 275 - - 275
Cash (utilised in)/generated from operations (353) - - (353)
Interest paid (114) - - (114)
Net cash from operating activities (467) - - (467)
Reconciliation of consolidated cash flow statement for the year ended 31 March
2005
UK GAAP Goodwill Share base IFRS
Amortisation payments
£000 £000 £000 £000
Net cash from operating activities 117 - - 117
Cash flow from investing activities
Interest received 1 -- - 1
Proceeds on disposal of property, plant and 10 - - 10
equipment
Purchase of property, plant and equipment (96) - - (96)
Net cash used in investing activities (85) - - (85)
Cash flow from financing activities
Repayment of borrowings (258) - - (258)
New bank loans 900 - - 900
Increase/(decrease) in bank overdrafts (674) - - (674)
Net cash (used in)/ from financing activities (32) - - (32)
Net increase/(decrease) in cash and cash 0 - - 0
equivalents
Cash and cash equivalents at start of period 1 - - 1
Net increase/(decrease) in cash and cash 0 - - 0
equivalents
Cash and cash equivalents at end of period 1 - - 1
Reconciliation of note to consolidated cash flow statement
UK GAAP Goodwill Share base IFRS
Amortisation payments
£000 £000 £000 £000
(Loss) from operations (215) 34 (21) (202)
Adjustments for:
Depreciation on property plant and equipment 196 - - 196
Amortisation of goodwill 34 (34) - -
Amortisation of intangible assets 5 - - 5
(Gain)/loss on disposal of property, plant and 1 - - 1
equipment
Share based payment charge 21 21
Operating cash flows before movements in working 21 - - 21
capital
Decrease/(increase) in inventories (551) - - (551)
Decrease/(increase) in receivables 340 - - 340
Increase/(decrease in payables 469 - - 469
Cash (utilised in)/generated from operations 279 - - 279
Interest paid (162) - - (162)
Net cash from operating activities 117 - - 117
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
This information is provided by RNS
The company news service from the London Stock Exchange
Latest directors dealings
- 1 day ago The Renewables Infrastructure Group Limited
- 1 day ago The Renewables Infrastructure Group Limited
- 1 day ago Smurfit Westrock (DI)
- 1 day ago Menhaden Resource Efficiency
- 1 day ago BP