Final Results
Domino's Pizza UK & IRL PLC
27 February 2006
27 February 2006
DOMINO'S PIZZA UK & IRL plc
PRELIMINARY RESULTS
FOR THE FIFTY-TWO WEEKS ENDED 1 JANUARY 2006
Domino's Pizza UK & IRL plc ('Domino's Pizza' or the 'Company'), the UK and
Ireland's leading pizza delivery company, announces its preliminary results for
the fifty-two weeks ended 1 January 2006 ('2005').
Highlights
• System sales increased 15.1% to £200.7m (2004: £174.3m)
• Profit before tax increased 26.6% to £11.2m (2004: £8.8m)
• Earnings per share:
- Basic earnings per share up 22.8% to 16.25p (2004: 13.23p)
- Diluted earnings per share up 22.1% to 15.47p (2004: 12.67p)
• Total dividend increased 38.1% to 7.25p per share (2004: 5.25p)
• 50 new stores opened in the period (2004: 40 stores) resulting in a
total of 407 stores at the period end (2004: 357 stores). No stores
were closed in 2005 (2004: one)
• Like-for-like sales in 317 mature stores up 7.1% (2004: 6.6%). First
6 weeks in 2006 up 10.3% (2005: 6.6%)
• E-commerce sales up 69.5% to £13.9m (2004: £8.2m). E-commerce
represented 10.4% of our delivered pizza sales in the UK in 2005
(2004: 5.2%)
• Cash at bank and in hand of £5.9m (2004: £4.8m) after returning
£8.2m cash to shareholders from share buybacks (2004: £1.6m). £15.2m
of cash has been returned to shareholders over the past two years
via share buybacks of £9.8m and dividends of £5.4m
*Comparatives shown in brackets represent the 53 weeks ended 2 January 2005
('2004')
Stephen Hemsley, Chief Executive of Domino's Pizza, commented:
'In 2005, Domino's Pizza broke through the £200m system sales barrier for the
first time and extended its market leadership with the opening of 50 new stores
and strong like-for-like sales growth, resulting in increased profits and
excellent cash generation. We believe that this success results from a total
focus on the development of the Domino's brand in the UK and Republic of
Ireland. We are confident that this growth is sustainable into the long-term
given the strong growth prospects of the market in which we operate. We look
forward to another year of strong growth.
'Trading in the first six weeks of 2006 has got off to a good start with
like-for-like sales up 10.3% (2005: 6.6%). E-commerce has continued to show
robust growth with an increase of 59.5% in the same period (2005: 49.2%). Our
store opening programme is also progressing in line with expectations and we are
on track to achieve our target of 50 new store openings this year.'
For further information, please contact:
Stephen Hemsley - Chief Executive 07917 178406
01908 580604
Lee Ginsberg - Finance Director 07887 734064
01908 580611
Bernadette Ahmed - PR & Communications Controller 07909 928016
01908 580693
Andrew Jaques, Anthony Arthur - The Hogarth Partnership
Limited 020 7357 9477
Notes to editors:
Domino's Pizza UK & IRL plc is the parent company of Domino's Pizza Group Ltd
('DPG') which holds the exclusive master franchise to own, operate and franchise
Domino's Pizza stores in the UK and Ireland. DPG is the leading player in the UK
and Ireland's fast-growing pizza delivery market. The first UK store opened in
1985 and the first Irish store opened in 1991.
There are 407 stores in the UK and Ireland. Of these, 332 stores are in England,
29 are in Scotland, 13 are in Wales, 9 are in Northern Ireland and 24 are in the
Republic of Ireland.
Founded in 1960, Domino's Pizza is the recognised world leader in pizza
delivery. Through its primarily franchised system, Domino's Pizza operates a
global network of more than 8,000 stores in more than 50 countries.
For photography visit www.dominos.uk.com/media or contact The Hogarth
Partnership Limited on 020 7357 9477. High resolution images are also available
for the media to review and download free of charge from www.vismedia.co.uk
Chairman's Statement
By all measures, 2005 was another outstanding year for Domino's Pizza. We opened
50 stores and are now more than 400 units strong. Our system wide sales topped £
200 million, breaking 2004's record-setting total by more than £25 million.
Though we have continued to add new stores in record numbers, our long-standing
units have not faltered, continuing their unbroken record of year-on-year sales
growth.
Our e-commerce sales also saw dynamic growth in 2005 totalling nearly £14
million - an increase of 69.5% over 2004. In other words - nearly one million
Domino's Pizza orders went from 'mouse to house' in less than 30 minutes. The
beauty of these e-commerce sales is that they do not require special facilities,
dedicated delivery systems or increased management costs. These web and
interactive TV orders come directly into the store in the same way as a phone
call does - only far less time-consuming and with 100% accuracy.
What has fuelled this customer demand, which seems to grow so steadily year
after year? At least some of the credit must go to our highly talented marketing
team which has carefully gauged consumer tastes and trends. Our marketing is
paid for by our stores, which contribute a portion of their sales directly to
the National Advertising Fund. As new stores are opened and our units grow, so
does the size of the fund. The cost of managing this fund however remains fairly
constant allowing more and more to be spent on advertising which, in turn,
drives sales.
It is not enough, however, to look a year or two ahead when planning the roadmap
for long-term growth. Chief Executive Stephen Hemsley and I look not only at
today's and tomorrow's needs but also at the Company's long-term requirements.
This goes not only for planning growth strategies, but also for strengthening
and enhancing the management team. Stephen, by example and guidance, has
fashioned and elevated Domino's Pizza into a market leader. In addition, Chris
Moore, formerly our Sales and Marketing Director, has been promoted to the
newly-created position of Chief Operating Officer. Chris has been with the
Company for more than 15 years and his vision of the brand, his passion and his
ability to achieve excellence will be key in getting us to the 1,000 store mark.
Chris has already been instrumental in enticing a very skilled veteran from
Domino's in the USA, Patricia Thomas, to head up our expanded Operations Team.
In addition to our strong executive team, we have also been fortunate enough to
attract an impressive team of non-executive Directors whose guidance and
assistance we value highly. As we begin 2006, we are pleased to welcome two
non-executives, Michael Shallow and Dianne Thompson. Michael joined our Board on
5 January 2006 and brings with him years of experience in the food and leisure
industry and a wealth of large public-company expertise. Dianne, who joined our
Board on 22 February 2006 also has wide plc experience together with the energy
and drive to help position Domino's for the years ahead. Gerald Halpern, who
retired from the Board last year, will continue to serve as a Director of our
Republic of Ireland subsidiary. We thank him for his contribution over many
years.
Although I could continue to commend to you our talented, wise and experienced
Board of Directors and management team, our energetic and entrepreneurial
franchisees and our terrific product at Domino's Pizza - we know that our
success would not be possible without the continued support of our shareholders.
It is because of you we have the means to build this company for many years to
come. It is you who deserve the recognition for your loyalty and for the
confidence you have placed in us. For that I thank you most sincerely.
Colin Halpern
Chairman
Chief Executive's Statement
Introduction
In 2005, Domino's Pizza celebrated the 20th anniversary of our first UK store
opening and another year of excellent progress. We believe that this success
results from a total focus on the development of the Domino's brand in the UK
and Republic of Ireland. This focus has extended our market leadership with the
opening of 50 new stores and strong like-for-like sales growth. This has
resulted in another year of robust system sales growth, increased profits and
excellent cash generation.
We are confident that your Company's growth is sustainable into the long-term
given the robust growth prospects of the market in which we operate. The
combined effect of a growing number of households in the UK and Republic of
Ireland, increased acceptance of home delivery and favourable demographic
changes provides the opportunity for 800-1,000 Domino's Pizza stores in these
territories. It has taken us 20 years to open the first 400 stores; we hope to
reach our next target in a further ten years.
System Sales
In 2005, system sales, which are the sales of all stores in the Domino's system
in the UK and Republic of Ireland, rose by 15.1% to £200.7m in 2005 (2004:
22.5%). Like-for-like sales in the 317 stores open for more than twelve months
in both periods grew by 7.1% (2004: 6.6%).
In addition to the continued store roll-out, several other factors underpinned
system sales growth in 2005. We launched a number of new pizzas in the year
which were very well-received and gave us the opportunity to communicate
something new to our customers. The combination of these new products, national
TV and direct marketing proved a strong driver of system sales.
In the area of e-commerce, our first-mover advantage continues to pay dividends
with sales increasing by 69.5% over the last year. E-commerce sales represented
10.4% all delivered pizza sales by Domino's Pizza in the UK. Orders made via our
website (www.dominos.co.uk) account for 94% of e-commerce sales. The remaining
6% of orders are generated by our presence on two national interactive TV
platforms.
Expansion
In 2005 we opened 50 new stores (2004: 40 stores) to take the year-end store
count to 407 stores (2004: 357). No stores were closed during the year (2004:
one).
Mindful of the speed at which we are growing, and the fact that we must focus on
the quality as well as the volume of new stores, we are increasingly selective
about the franchisees whom we allow to expand. We must also build a system that
can be effectively and cost-efficiently managed as we grow to 1,000 stores.
Finally, we must provide the opportunity for our franchisee partners to build
substantial and successful businesses. To this end we will focus more on
assisting our existing franchisees to open as many of the new stores as
possible, providing they meet our very rigorous standards. In 2005, 70% of new
stores were opened by existing franchisees. New franchisees will be increasingly
encouraged to acquire existing stores from franchisees wishing to leave the
system.
Trading Results
Group turnover, which includes the sales generated by the Group from royalties,
fees on new store openings, food sales, finance lease and rental income, as well
as the turnover of corporately owned and operated stores, grew by 10.0% to £81.7
m (2004: £74.2m). This rate of growth is slower than the system sales rate due
to the disposal of the corporate stores during the year. Excluding the impact of
lost revenue from these disposed stores, Group turnover would have increased by
19.3%.
Group operating profit, including our share of operating profit in joint
ventures, but before the accelerated LTIP and exceptional items, was up 20.4% to
£11.0m from £9.1m. As a result of the early vesting of the Long Term Incentive
Plan ('LTIP') outlined below, we have taken an accelerated £0.6m charge that
would otherwise have been made in 2006 and 2007. This treatment follows the
requirement of FRS20 which we have now adopted. After taking into account this
charge, Group operating profits were up 13.6% to £10.4m.
As our Chairman stated we have significantly strengthened the resources we
commit to our operations function. The key to our eventual growth to 1,000
stores will lie in our focus on the execution of the Domino's system at store
level. This additional investment in our operations team cost £0.5m in 2005.
During 2005, we also introduced a commissary rebate scheme which was designed to
help our franchisees overcome a number of external cost pressures they were
facing. This performance-related rebate enabled our franchisees to receive a
reduction in the cost of food purchased from our commissaries, provided they
achieve certain percentage sales increases. Franchisees benefited from a total
rebate of £0.5m which was an increase of £0.4m over a more limited scheme that
operated in 2004.
Profit on ordinary activities before interest and taxation grew by 23.8% to
£11.3m (2004: £9.1m). This includes the profit of £0.9m on the sale of corporate
stores as well as the accelerated LTIP charges as referred to above.
Net interest paid fell to £0.1m (2004: £0.3m) primarily due to stronger cash
generation from operations during the year. Net interest costs are covered 122
times by operating profits (2004: 34 times).
The tax charge for the year was 26.2% (2004: 23.3%) and is lower than the
statutory tax rate of 30% as a result of the relief available on the profit from
the sale of the corporate stores under the substantial shareholding exemption
and the exercise of employee share options. The increase in the tax rate from
2004 is due to substantially higher relief in the earlier year on the number of
employee share options exercised.
Profit after tax and minority interests was up 22.6% to £8.3m (2004: £6.7m).
Earnings per Share and Dividend
Basic earnings per share were up 22.8% to 16.25 pence from 13.23 pence. Diluted
earnings per share increased by 22.1% to 15.47 pence from 12.67 pence.
As a result of the ability of the business to generate strong cash flows, the
Board is pleased to recommend a further significant increase in the dividend
payment which, if approved by shareholders, will give a final dividend of 4.15
pence per share (2004: 3.05 pence per share). This would give a total dividend
for the year of 7.25 pence per share, a 38.1% increase over the 5.25 pence per
share declared for 2004. The proposed dividend is 2.2 times covered by profits
after tax (2004: 2.5 times).
Subject to shareholders' approval the final dividend will be payable on 28 April
2006 to shareholders on the register on 7 April 2006.
Cash Flow and Balance Sheet
Net cash inflow from operating activities reached £12.7m, up from £9.9m in 2004.
This increase was attributable mainly to the higher operating profit, before the
accelerated LTIP charge, which was £1.8m up on 2004.
Cash flows were also stronger as cash interest was £0.2m lower, taxation paid
was £0.5m lower, and capital expenditure £1.5m lower. Proceeds of £3.7m from the
sale of subsidiary undertakings and £0.5m from the sales of fixed assets of
corporate stores were partially offset by an increase in dividend payments of
£0.9m.
Overall, net cash inflow before financing was £7.2m higher than last year, up
from £1.8m to £9.0m. This strong cash generation has allowed us to return a
further £8.2m to shareholders through share buybacks during the year. We have
now returned £15.2m of cash to shareholders over the past two years via share
buybacks of £9.8m and dividends of £5.4m.
In the year, options over 0.7m shares were exercised generating an inflow of
£0.5m (2004: £1.1m). The Employee Benefit Trust ('EBT') borrowed an additional
£1.1m taking its total borrowings to £7.5m (2004: £6.4m). This additional loan
was used to purchase further shares in the Company, over which an LTIP award was
granted.
During the year DP Capital continued to provide leasing support to franchisees
for the fit-out of new stores and the refit of existing stores, with new
advances of £1.2m. (2004: 0.9m). After repayments, the balance outstanding at
the year end on these leases was £2.9m (2004: £2.9m). These facilities are
financed by a limited recourse loan facility and the amount drawn down at the
end of the year stood at £2.5m (2004: £2.6m).
At the year end, the Group had cash at hand of £5.9m (2004: £4.8m) and
consolidated debt of £10.0m (2004: £9.0m) all of which related to the EBT and DP
Capital loans. Net borrowings at the year end therefore stood at £4.1m (2004:
£4.2m) representing 34.5% (2004: 28.4%) of shareholders' funds.
Although adoption of IFRS will only be mandatory for AIM listed companies from
2007, a preliminary assessment has highlighted that that the adoption of IFRS is
not expected to have any significant on the Group's reported results.
Corporate Stores
During 2005, we disposed of 14 corporate stores, acquired one and opened two new
stores, leaving just five. It is our intention to dispose of these remaining
stores as the opportunities arise. Since the year-end, one of these stores has
been sold and terms have been agreed on three others. These disposals
effectively complete our exit from own-store operation. This has been achieved
at a significant capital profit and the stores are now being operated
successfully by franchisees.
During the year, two stores were transferred into subsidiary companies in which
our partners have a 20% equity stake. We hope that the combination of our
partners' entrepreneurial skill in operating the stores, combined with our
strategic direction and capital, will provide an attractive return for our
shareholders.
In total, we now have an equity interest in five ventures which are not 100%
owned and operate in a total of 26 stores. Our total equity investment in these
enterprises is £565,000 (2004: £205,000) and they contributed £166,000 to
operating profits in 2005 (2004: £105,000).
The Market
According to Mintel's 2004 Home Delivery Report, the home-delivered food market
was estimated to be worth around £1.36bn in 2005 with pizza takeaway/delivery
being the largest component at 48%. Current purchasing habits indicate that
there is an enormous growth opportunity in the pizza delivery sector. Mintel
also states that just 23% of adults have ever ordered a delivered pizza, and
only 6% of the population had ordered from Domino's. When compared to the more
mature US market, where 75% of adults have ordered a delivered pizza, and 50% of
those have had a pizza delivered from Domino's, these figures suggest that the
scope for growth lies not only in the expansion of the system into virgin
territory but also in attracting more new customers to our existing stores.
Furthermore, a report by The Future Foundation forecasts growth of 91% in the
pizza segment of the home delivery market by 2015. This report also underlines
how your Company is well-placed to maximise future opportunities in the market
arising from changing eating habits, the increasing spend on in-home leisure as
well as the continuance of the cash-rich, time-poor society.
People
At Domino's Pizza, we believe that encouraging longevity of service is a key
part of our success. To this end, we seek to foster long-term loyalty from our
people and offer them market-leading rewards. During the year we introduced a
Save As You Earn scheme giving team members an option to acquire shares in your
Company. This offer was extremely well-subscribed. We have also reinforced
previous schemes with the granting of a further round of share options to all
team members, excluding the executive directors, further demonstrating the
commitment and strong partnership between our people and the Company.
Long Term Incentive Plan and Employee Benefit Trust
As a result of the rapid growth in profitability and earnings per share over the
last three years, the performance targets included in the 2003 LTIP award have
been achieved. The early vesting of these awards necessitates the acceleration
of the 2006 and 2007 charge as referred to above.
Based on the closing share price on 24 February 2006 of 416.5 pence, the
beneficiaries of the LTIP are now entitled to the growth in value of the LTIP
which will be satisfied by the transfer of 1,909,334 shares to the
beneficiaries. During the year, the EBT purchased a further 375,000 shares, over
which an LTIP interest was granted. Following these movements, the EBT owns
2,065,587 shares, of which 975,000 are subject to an outstanding LTIP interest.
Current Trading and Outlook
Trading in the first six weeks of 2006 has got off to an excellent start with
like-for-like sales up 10.3% (2005: 6.6%). E-commerce has continued to show
robust growth with an increase of 59.5% in the same period (2005: 49.2%).
E-commerce in the first six weeks accounted for 11.8% of all UK delivered pizza
sales. Our store opening programme is also progressing in line with expectations
and we are on track to achieve our target of 50 new store openings this year.
Cash flow remains strong and it is the Directors' intention to return cash not
needed to expand our business to shareholders by further share buybacks and a
progressive dividend policy. The Company is once again well-positioned for
another year of strong growth.
Conclusion
On behalf of the Domino's Pizza team in the UK and Ireland, I should like to
thank our customers for their loyalty and continued support of Domino's Pizza.
Finally, to all of our franchisees and team members, I thank you sincerely for
your tireless dedication at every level of the business and for contributing to
another successful year.
Stephen Hemsley
Chief Executive
Group profit and loss account
52 weeks ended 53 weeks ended
1 January 2006 2 January 2005
Notes £000 £000
Turnover
Turnover: group and share of
joint ventures' turnover 85,004 77,254
Less: share of joint ventures' turnover (3,344) (3,039)
------ ------
Group turnover 81,660 74,215
Cost of sales (48,778) (43,815)
------ ------
Gross profit 32,882 30,400
Distribution costs (8,538) (8,404)
------ ------
Administrative expenses (13,504) (12,963)
Accelerated LTIP charge 2 (626) -
------ ------
_______ _______
Administrative expenses (14,130) (12,963)
------ ------
Group operating profit 10,214 9,033
------ ------
Share of operating profit in joint ventures 179 120
Amortisation of goodwill in joint ventures (15) (15)
------ ------
164 105
------ ------
Total operating profit: group and share of joint 10,378 9,138
venture
Profit/(loss) on sale of fixed assets 3 206 (47)
Profit on sale of subsidiaries 3 670 -
------ ------
Profit on ordinary activities before interest and
taxation 11,254 9,091
Interest receivable 273 100
Interest payable and similar charges (358) (370)
------ ------
Profit on ordinary activities before taxation 11,169 8,821
Tax on profit on ordinary activities (2,922) (2,058)
------ ------
Profit on ordinary activities after taxation 8,247 6,763
Minority interests 8 (32)
Profit for the financial year attributable to ______ ______
members of the parent company 8,255 6,731
------ ------
------ ------
Earnings per share - basic 5 16.25p 13.23p
- diluted 5 15.47p 12.67p
There are no recognised gains and losses other than the profit reported above.
Group balance sheet
At At
1 January 2 January
2006 2005
Notes £000 £000
(Restated)
Fixed assets
Intangible assets 1,326 1,520
Tangible assets 13,593 14,595
Investments in joint venture:
Share of gross assets 1,477 1,449
Share of gross liabilities (1,026) (1,066)
------ ------
451 383
------ ------
Total fixed assets 15,370 16,498
------ ------
Current assets
Stocks 2,186 2,700
Debtors:
amounts falling due within one year 10,753 10,735
amounts falling due after more than one year 2,168 2,721
------ ------
12,921 13,456
Cash at bank and in hand 5,885 4,824
------ ------
Total current assets 20,992 20,980
------ ------
Creditors: amounts falling due within one year (13,742) (13,590)
------ ------
Net current assets 7,250 7,390
------ ------
Total assets less current liabilities 22,620 23,888
------ ------
Creditors: amounts falling due after more than (9,085) (8,102)
one year
Provision for liabilities and charges (1,447) (857)
------ ------
12,088 14,929
------ ------
------ ------
Capital and reserves
Called up share capital 7 2,645 2,740
Share premium account 7 4,677 4,241
Capital redemption reserve 7 171 40
Treasury shares held by Employee Benefit Trust 7 (7,500) (6,360)
Profit and loss account 7 12,013 14,186
------ ------
Equity shareholders' funds 12,006 14,847
Minority interest 82 82
------ ------
12,088 14,929
------ ------
------ ------
Group statement of cash flows
52 weeks ended 53 weeks ended
1 January 2 January
2006 2005
Notes £000 £000
Net cash inflow from operating activities 6(a) 12,674 9,943
------ ------
Returns on investments and servicing of
finance
Interest received 273 100
Interest paid (307) (307)
Interest element of finance lease payments (4) (7)
------ ------
(38) (214)
------ ------
Taxation
Corporation tax paid (1,549) (2,021)
------ ------
Capital expenditure and financial
investment
Payments to acquire intangible fixed assets (395) (200)
Payments to acquire tangible fixed assets (2,246) (3,905)
Receipts from sales of tangible and
intangible fixed assets 576 421
Receipts from repayment of joint venture 60 108
loan
Payments to acquire finance lease assets and
advance of franchisee loans (1,166) (946)
Receipts from repayment of finance leases
and franchisee loans 1,172 1,098
------ ------
(1,999) (3,424)
------ ------
Acquisitions and disposals
Sale of subsidiary undertakings 3,354 -
Utilisation of provision related to disposal
of subsidiary undertakings (309) -
Cash balances disposed of with subsidiary
undertakings (5) -
Purchase of subsidiary undertaking and
minority share interest 8 (280)
------ ------
3,048 (280)
------ ------
Equity dividends paid 4 (3,169) (2,240)
------ ------
Net cash inflow before financing 8,967 1,764
------ ------
Financing
Issue of ordinary share capital 472 1,071
New long-term loans 2,146 3,299
Repayments of long-term loans (1,146) (2,198)
Repayment of capital element of finance
leases (16) (23)
& hire purchase contracts
Purchase of shares by Employee Benefit Trust (1,140) (1,200)
Purchase of own shares (8,222) (1,610)
------ ------
(7,906) (661)
------ ------
Increase in cash 6(b) 1,061 1,103
------ ------
------ ------
Notes to the accounts
At 1 January 2006
1. Accounting Policies
Basis of preparation
This preliminary announcement has been prepared on the basis of the accounting
policies set out in the Group's financial statements for the fifty-three weeks
ended 2 January 2005 with the following exceptions:
FRS 20 - Share based payment
FRS 21 - Events after the balance sheet date
FRS 22 - Earnings per share
FRS 25* - Financial instruments disclosure and presentation
FRS 28 - Corresponding amounts
FRS 20 - Share based payment
The effect of the revised accounting policy has an insignificant impact on the
charge in the current year (except for the accelerated LTIP charge in note 2)
and it also has an insignificant impact on retained earnings. This standard has
been adopted in advance of the effective date.
FRS 21 - Events after the balance sheet date
These required dividends, which are proposed after the balance sheet date to be
disclosed and not recognised as a liability. As a result of adopting this
accounting standard, retained earnings have been increased by £1,083,000 as at
28 December 2003 and increased by £1,531,000 as at 2 January 2005. Liabilities
have been decreased by £1,531,000 as at 2 January 2005. There has been no effect
on current or previous years results from adopting this standard.
FRS 22, FRS 25 and FRS 28 have not resulted in the restatement of retained
earnings and have had no impact on the results or net assets for the current or
prior year.
* The Group has only adopted the presentation required of this standard, as it
does not have to comply with the disclosure requirement in this year.
2. Accelerated LTIP Charge
During the year the Company has accelerated the charge relating to reversionary
interests granted in 2003, as the performance targets set will be achieved
earlier than expected. This resulted in an additional charge of £626,000 during
2005. This charge is not deductible for corporation tax purposes and has no
impact on the cash flow of the Group during the year.
3. Exceptional Items
Recognised below operating profit
During the year the Group sold two subsidiary undertakings, DPGS Limited and
Triple A Pizza Limited (which included 12 corporate stores at the date of the
transaction). The main elements of the transaction were as follows:
52 weeks 53 weeks
ended ended
1 January 2 January
2006 2005
£000 £000
Cash consideration received 3,650,000 -
Net assets disposed of (1,495,000) -
Sale costs (296,000) -
Provisions (1,189,000) -
-------- --------
Profit on disposal 670,000 -
-------- --------
As part of the above transaction, a further corporate -
store was sold for a cash consideration of £350,000
resulting in profit on sale of 144,000 -
Sale of one corporate store resulting in a profit of 62,000 (56,000)
Group's share of Profit on disposal of joint venture
store - 9,000
-------- --------
206,000 (47,000)
-------- --------
4. Dividends paid and proposed
52 weeks 53 weeks
ended ended
1 January 2 January
2006 2005
£000 £000
Declared and paid during the year:
Final dividend for 2004 3.05p (2003: 2.18p) 1,531 1,083
Interim dividend for 2005 3.10p (2004:
2.20p) 1,638 1,157
-------- --------
3,169 2,240
-------- --------
-------- --------
Proposed for approval at AGM (not recognised as a liability
as at 1 January 2006 and at 2 January 2005)
Final dividend for 2005 4.15p (2004: 3.05p) 2,031 1,531
-------- --------
-------- --------
5. Earnings per ordinary share
The calculation of basic earnings per ordinary share is based on earnings of
£8,255,000 (2004: £6,731,000) and on 50,810,785 (2004: 50,883,095) ordinary
shares.
The diluted earnings per share is based on earnings of £8,255,000 (2004:
£6,731,000) and on 53,368,778 (2004: 53,108,892) ordinary shares. The difference
relates to share options, which takes into account theoretical ordinary shares
that would have been issued, based on average market value of all outstanding
options likely to be exercised and the impact of reversionary interests where
the performance conditions have been met.
Reconciliation of basic and diluted earnings per share
2005 2004
Ordinary shares - basic earnings per share 50,810,785 50,883,095
Unexercised share options - average market value 832,056 2,225,797
Reversionary interests 1,725,937 -
---------- ----------
Ordinary shares - diluted earnings per share 53,368,778 53,108,892
---------- ----------
Reversionary interests have been granted over 3,800,000 shares, which have not
yet vested at 1 January 2006. For 2,825,000 of these interests, the number of
shares which would have vested based on the share price at the year end of 347p,
have been included in the diluted earnings per share calculation as the
performance conditions have been met.
6. Notes to the statement of cash flows
(a) Reconciliation of operating profit to net cash inflow from operating
activities
52 weeks 53 weeks
ended ended
1 January 2 January
2006 2005
£000 £000
Operating profit 10,214 9,033
Depreciation charge 1,508 1,386
Amortisation charge 131 133
Share option and accelerated LTIP charge 963 333
Decrease/(increase) in stocks 489 (857)
Decrease/(increase) in debtors 337 (1,505)
(Decrease)/increase in creditors (968) 1,420
-------- --------
12,674 9,943
-------- --------
-------- --------
6. Notes to the statement of cash flows cont.
(b) Reconciliation of net cash flow to movement in net debt
52 weeks 53 weeks
ended ended
1 January 2 January
2006 2005
£000 £000
(Decrease)/increase in cash before sale of subsidiaries (2,589) 1,103
Proceeds from the sale of subsidiaries 3,650 -
-------- --------
Increase in cash including sale of subsidiaries 1,061 1,103
Cash inflow from increase in loans (2,146) (3,278)
Repayment of long-term loans 1,146 2,177
Repayments of capital element of finance leases and hire
purchase contracts 16 23
-------- --------
Movement in net debt 77 25
Net debt at 2 January 2005 (4,218) (4,243)
-------- --------
Net debt at 1 January 2006 (4,141) (4,218)
-------- --------
-------- --------
7. Reconciliation of Shareholders Funds and Movement on Reserves
Share Share Capital Treasury Profit & Total
Capital Premium Redemption Shares held Loss Shareholders'
Account Reserve by EBT Account Funds
£000 £000 £000 £000 £000 £000
At 2 January 2005 2,740 4,241 40 (6,360) 14,186 14,847
Proceeds from share
issue 36 436 - - - 472
Share buy back (131) - 131 - (8,222) (8,222)
Treasury shares held by
EBT - - - (1,140) - (1,140)
Profit for the year - - - - 8,255 8,255
Share option and LTIP
charge - - - - 963 963
Dividends - - - - (3,169) (3,169)
------ ------ ------ ------ ------ ------
At 1 January 2006 2,645 4,677 171 (7,500) 12,013 12,006
------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------
8. Financial Information
The financial information set out in the announcement does not constitute the
Company's statutory accounts for the 52 weeks ending I January 2006. The
financial information for the 53 weeks ended 2 January 2005 is derived from the
statutory accounts for that year, which have been delivered to the Registrar of
Companies. The auditors reported on those accounts; their report was unqualified
and did not contain a statement under section 237 (2) or (3) of the Companies
Act 1985. The statutory accounts for the 52 weeks ended 1 January 2006 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.
This information is provided by RNS
The company news service from the London Stock Exchange
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