Half Yearly Report

RNS Number : 6509P
Galiform PLC
21 July 2010
 

GALIFORM Plc

 

HALF YEARLY REPORT FOR THE 24 WEEKS ENDED 12 JUNE 2010

 

HIGHLIGHTS

Galiform's Chief Executive, Matthew Ingle, said:

 

"We are pleased with these results, which reflect the strength of Howdens' business model and point the way to future growth.  After a slow start to the year, we delivered a further improvement in gross profit margin and a substantial increase in operating profit.  We also succeeded in further reducing our property liabilities.  The 16 new depots we have opened so far this year are performing well, as are the new kitchen ranges we have introduced.

 

"We have identified further opportunities to develop the business and intend to continue to invest in its growth.  We remain cautious about the economic environment, however, and will continue to manage the business in the light of economic conditions."

 

Financial results

 

·      Howden Joinery UK depot revenue increased by 3.2%* to £319.2m, up 2.5%* on a same depot basis (* see note 1 below).  However, revenue increased by 6.0% year on year in the last four periods of the half, after the end of the cold weather that disrupted the start of 2010.  Group revenue was £324.7m (2009: £316.8m);

 

·      Gross profit margin rose from 54.1% to 58.1%;

 

·      Operating profit before exceptional items increased to £24.5m (2009: £10.0m);

 

·      Profit before tax and exceptional items increased by £16.9m to £21.6m (2009: £4.7m);

 

·      Basic earnings per share from continuing operations2 increased to 2.3p (2009: 0.5p);

 

·      Basic earnings per share from continuing and discontinued operations3 increased to 2.3p (2009: 0.2p loss);

 

·      Net cash outflow of £5.1m included cash payments totalling £21.7m relating to 'legacy' properties and a payment, in excess of the operating charge, of £13.2m to the Group's pension schemes (the 'pension deficit contribution');

 

·      Net debt of £2.7m at 12 June 2010 (26 December 2009: £2.4m net cash).

 

Business developments

 

·      We continue to strengthen our competitive position:

 

-      16 new depots opened so far in 2010, bringing total to 478 and in line with plan to open between 20 and 30 this year;

 

-      New product development and introduction well received.

 

·      Further mitigation of legacy property liability, with termination of leases on three more legacy properties since the Interim Management Statement, bringing the total so far this year to seven.

 

Current trading

 

·    Howden Joinery UK depot total revenue increased by 5.7% in the first period of the second half of the year (period 7) compared with the same period last year.

 

Note 1: Week 1 sales (2010: nil, 2009 £0.8m) excluded because of the impact arising from New Year's Day falling on different days of the week (Thursday in 2009, Friday in 2010).

Note 2: There were no exceptional items from continuing operations in H1 2009 or H1 2010.

Note 3: There were no items arising from discontinued operations in 2010.

 

 

 

 

 

Enquiries

 

Investors/analysts:

 

Gary Rawlinson

Head of Investor Relations                  +44 (0)207 404 5959 (21 July 2010 a.m. only)

                                                            +44 (0)207 535 1127

                                                            +44 (0)7989 397527

 

Media:

 

Brunswick                                            +44 (0)207 404 5959

      Kate Holgate

      Kate Miller

 

 

 

Note for editors:

 

Galiform Plc is the parent company of Howden Joinery.  In the UK, Howden Joinery is engaged in the sale of kitchens and joinery products to trade customers, primarily small local builders, through over 475 depots.  Around one-third of the products it sells are manufactured in the company's own factories in Runcorn, Cheshire, and Howden, East Yorkshire.  The business also has a small operation in France.

 

SUMMARY OF GROUP RESULTS

 

The information presented below relates to the 24 weeks to 12 June 2010 and the 24 weeks to 13 June 2009, unless otherwise stated.

 

£m unless stated

2010

2009

Continuing operations1:






Revenue

 - Group

324.7

316.8

 - Howden Joinery UK depots

319.2

310.1

Gross profit

188.8

171.3

Gross profit margin, %

58.1

54.1

Operating profit

24.5

10.0

Profit before tax

21.6

4.7




Loss from discontinued operations before tax



- including exceptional items2

-

(4.4)




Earnings per share from continuing operations1



- basic

2.3p

0.5p




Earnings/(loss) per share from continuing and discontinued operations



- basic excluding exceptional items

2.3p

0.5p

- basic including exceptional items

2.3p

(0.2)p




Net debt at end of period

2.7

50.3

 

1   There were no exceptional items in continuing operations in 2009 and 2010.

2   Details of exceptional items incurred in 2009 are given in note 6 to the Condensed Financial Statements.                                                                                           

 

 

 

 

FINANCIAL REVIEW

The following discussion relates to the 24 weeks to 12 June 2010 and the 24 weeks to 13 June 2009, unless otherwise stated.

 

FINANCIAL RESULTS FOR FIRST HALF OF 2010

 

There were no exceptional items in respect of continuing operations in 2009 and 2010.  There were no items arising from discontinued operations in 2010.  In 2009, there were exceptional items arising from discontinued operations (see note 6).  In the following, all of the figures relating to the Condensed Consolidated Income Statement are in respect of continuing operations only.

 

The financial performance of the Group during the first half of 2010 benefited from the strength of the Group's competitive position.  It also benefited from actions taken during the course of 2009 and this year to improve financial performance, including pursuing opportunities to increase gross profit.

 

Sales through our Howden Joinery UK depots increased by £9.1m to £319.2m in 2010.

 

 

Revenue £m

 

2010

 

2009

Group

324.7

316.8

comprising:

Howden Joinery UK depots

Howden Joinery French depots

Hygena Cuisines*

 

* ceased in H1 2009

 

319.2

5.5

-

 

310.1

5.5

1.1

 

Excluding the distorting effect of trading in the first week of the year (see note 1 at end of Highlights section above), Howden Joinery UK depots' revenue was up 3.2%, rising 2.5% on a same depot basis.  This performance reflects the previously reported impact of the cold weather seen in the first two periods of the year (to 20th February).  Since then, trading has returned to more stable conditions, with total sales increasing by 6.0% year-on-year in the last four periods of the first half of the year.

 

Sales by our French depots of £5.5m were up 3.2% in constant currency terms.

 

Gross profit rose by £17.5m to £188.8m.   This primarily reflects the continuing focus in our depots on gross profit margin and the benefit from a small price increase early in the year.  In addition, gross profit benefited from purchasing and manufacturing efficiencies, with exchange rate movements having only a limited impact.

 

As a result, the gross profit margin rose from 54.1% in the first half of 2009 to 58.1%, which was ahead of the 57.6% achieved in the second half of last year.

 

Selling and distribution costs and administrative expenses increased by £3.0m to £164.3m.  This reflects the costs of new depots, the impact of inflation, particularly on payroll costs, increased marketing expenditure and higher logistics costs, which were partly offset by cost reductions in other areas.

 

Operating profit increased by £14.5m to £24.5m (2009: £10.0m).

 

The net interest charge fell by £2.4m to £2.9m, due to the lower level of debt this year and the reduced finance expense in respect of pensions.  The net result was profit before tax from continuing operations rose by £16.9m to £21.6m (2009: £4.7m).

 

The tax charge on profit before tax was £7.4m, based on the estimated effective rate of tax on profit before tax for the 2010 financial year of 34.1%.  This tax rate mainly reflects the impact of depreciation on capital expenditure that is disallowable for tax purposes and other non-deductible expenditure.

 

Basic earnings per share were 2.3p (2009: 0.5p)

 

Net cash inflows from operating activities were £2.1m.  This included payments relating to 'legacy' properties totalling £21.7m and a cash contribution to the Group's pension schemes, in excess of the operating charge, of £13.2m. 

 

Excluding the 'legacy' properties payments, underlying working capital changes generated a cash inflow of £8.4m.  Within this, stock levels at the end of the period were £3.0m lower than at the beginning of the year, despite the requirement for stock in new depots.  Creditors increased by £12.4m.  Offsetting these, debtors increased by £7.0 million pounds.  The movements in creditors and debtors reflected the seasonal difference in sales levels at the year-end and the end of the half year.  In respect of debtors, we have seen an improvement in the age profile of debtors and a reduction in the bad debt write-off.

 

Payments to acquire fixed and intangible assets totalled £6.7m (2009: £3.8m).

 

As a result of the above, there was a £5.1m net cash outflow in the first half of the year, the Group having net debt at the end of the period of £2.7m (26 December 2009: £2.4m net cash).  Excluding payments in respect of legacy properties and the contribution to the pension deficit, there was a cash inflow of £29.8m.

 

At 12 June 2010, the pension deficit shown on the balance sheet was £176.1m (26 December 2009: £196.3m).  The decrease in the deficit in the period was driven by the Company's contribution (£13.2m) made as part of the 2009 agreement to clear the actuarial deficit (over a 10-year period) and the impact of changes in actuarial assumptions used to calculate liabilities, principally with respect to inflation.

 

No interim dividend is being paid (2009: nil).

 

OPERATIONAL REVIEW

 

The overriding strategic goal of Howden Joinery is "To supply from local stock nationwide the small builder's ever-changing routine kitchen and joinery requirements, assuring no call back quality and best local price".

 

An unwavering focus on this goal, a unique business model and a readiness to test and learn from new ideas led to the rapid growth of Howden Joinery from the time it was founded in 1995.  In recent years, the strength of the business has enabled it to continue to perform well, despite the severity of the economic downturn and the major challenges posed by the effects of the disposal of MFI.  The business has continued to invest in areas that are critical to future growth, including product development and implementation of robust, scalable IT systems.

 

Today, the opportunity to transform the scale of the business is apparent.  This can be achieved through: further significant growth in the size of the depot portfolio, beyond previous expectations; ongoing sales and profit growth in existing depots as they become mature, typically over 7 years or so; and the pursuit of further opportunities to improve performance that have been identified across the depot portfolio.  The growth and development of the business takes place against a background of ever-increasing demand for sophisticated, functional, professionally fitted kitchens that represent value for money.  In addition, there is the opportunity to develop Howdens' operations in France, at the appropriate time.

 

As the performance of the business is improving and legacy issues diminish, investment in the future growth of Howden Joinery is being stepped up.  Already this year, a number of developments have taken place.

 

Depots

 

16 new depots have been opened so for this year, bringing the total to 478.  This is in line with the plan to open between 20 and 30 depots in 2010.  The stated target of 600 depots is being reviewed and is likely to be revised upwards.

 

Products

 

Following the review of our kitchen ranges undertaken at the end of 2009, the phased roll-out of new products continues.  So far this year, this has included eight new kitchens that complement our most successful existing ranges.  These new introductions are performing well.  We have also launched new sinks and appliances in our 'own brand' Lamona range and extended our range of Bosch appliances to cover all large domestic appliances.

 

Supply operations

 

New IT systems for manufacturing have been successfully implemented in our factories at Howden, completing the roll-out in all our manufacturing plants, and a new warehouse management system has been implemented in our distribution centre in Northampton.  These systems facilitate improved production planning and stock control.

 

In the coming months, investment in the business to support its growth will continue, as new depots are opened, staffing levels in existing depots are increased to enable them to reach their full potential, and new machinery is introduced in manufacturing to increase its capacity and improve efficiency.

 

 

GROUP DEVELOPMENTS

 

Legacy properties

 

The Group continues to reduce its 'legacy property' portfolio.

 

The number of legacy properties now stands at 46, compared with 55 at the end of 2009.  Included within this are 22 properties that are fully or part occupied by tenants.

 

Since the release of the Interim Management Statement, on 29 April 2010, the leases of a further three properties have been terminated, at a cost of £7.4m.  This means that the leases of seven properties have been terminated so far this year, at a cost of £14.5m (of which £10.1m was incurred in the first half of the year), mitigating future liabilities that would have totalled over £50m.

 

With the leases of two additional properties having reached the end of their term, the profile of properties remaining and the net annual rent and rates (current values) for the associated leases going forward, before any further mitigating action is taken, is shown below.

 

Current

As at 31 Dec

31 Dec

31 Dec

31 Dec



2011

2014

2019

2024

Number of properties1

46

43

24

13

33

Net annual rent and rates, £m2

14.6

14.3

8.0

6.3

0.4

 

Estimated future costs associated with these properties were provided for in 2009 and previous years.

 

1.  Vacant and tenanted.

2.  Gross rent & rates less payments by tenants.

3.  The leases on these properties expire during the course of 2025.

 

Group name

 

We intend to change the name of the Group to a variant of the Howden Joinery name, rather than Galiform, and are taking steps to effect the formal change.

 

OUTLOOK

 

 

With sales 5.7% ahead of last year in the first period of the second half of 2010, sales growth continues to be in line with management's expectations.  We are seeing pressures on product input costs in a number of areas, although we would hope to be able to offset these. 

 

In the second half, our cost base will be impacted by the non-recurrence of one-off cost savings last year that totalled around £4m and the increasing costs associated with new depots.  Our year-end net cash/debt position will reflect any costs associated with terminating further legacy leases.

 

The key risk to performance in the second half of the year is the continuing uncertainty surrounding the general economic environment.  Other risks to the business are discussed in the following section on 'Risks and Uncertainties'.

 

Although, we remain cautious about the macro outlook, we will invest prudently in the areas that present growth opportunities for the business.  However, as in recent years, we will continue to manage the business in light of economic conditions.

 

 

GOING CONCERN AND RISKS AND UNCERTAINTIES

 

GOING CONCERN

 

The Group meets its day to day working capital requirements through an asset backed lending facility of £160m, which is due for renewal in May 2014.  The current economic conditions create uncertainty, particularly over (a) the level of demand for the Group's products and, (b) the exchange rate between sterling and both the Euro and the US Dollar which would affect the cost of the Group's operations.

 

The Group's forecasts and projections have been stress-tested for reasonably possible adverse variations in trading performance.  The results of this testing show that the Group should be able to operate within the level of its current facility and covenants.  The Group's banking facility expires in May 2014 so at this stage the Group has not sought any written commitment that the facility will be renewed.  We will open renewal negotiations with the banks in due course.

 

After making enquiries, the directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future.   Accordingly, they continue to adopt the going concern basis in preparing the half-yearly condensed financial statements.

 

RISKS AND UNCERTAINTIES

 

The Board continually assesses and monitors the key risks of the business.  The principal risks and uncertainties that could have a material impact on the Group's performance over the remaining 28 weeks of the financial year have not changed from those which are set out in detail on pages 16 to 17 of the Group's 2009 Annual Report, and which are summarised below:

 

·      Defined benefit pension scheme

·      Legacy properties

·      Market conditions

·      IT systems

·      Continuity of supply

·      Failure to implement Howdens' strategy

·      Product design leadership

·      Loss of key personnel

 

A copy of the Group's 2009 Annual Report is available on the Group's website, www.galiform.com.  


 

Condensed consolidated income statement



24 weeks to

12 June 2010

unaudited


24 weeks to 13 June 2009

unaudited


52 weeks to 26 December 2009

audited


Notes

Total

£m


Before exceptional items

£m

Exceptional items

£m

Total

£m


Before exceptional items

£m

Exceptional items

£m

Total

£m























There are no exceptional items in the current period.  All profits and losses for all periods are attributable to the equity holders of the parent.













 

 

Condensed consolidated statement of comprehensive income


Notes

24 weeks to

12 June 2010

unaudited

£m

24 weeks to

13 June 2009

unaudited

£m       

52 weeks to

26 December 2009

audited

£m

Profit/(loss) for the financial period


14.2

(1.4)

45.7

Items of other comprehensive income:





Actuarial gain/(loss) on defined benefit pension schemes

11

9.4

(18.7)

(87.0)

Deferred tax on actuarial (gain)/loss on defined benefit pension schemes


(2.6)

5.3

24.4


 
















Total liabilities



(412.0)


(442.0)


(433.1)

















 

 

 

During the current period, the Group did not issue any shares.

 

 

During the period above, the Group did not issue any shares.

 

 

During the period above, the Group did not issue any shares.

 

Payments to acquire property, plant and equipment and intangible assets


(6.7)

(3.8)

(8.1)

Receipts from sale of property, plant and equipment and intangible assets


-

1.0

1.2

Net increase/(decrease) in cash and cash equivalents


3.4

(2.8)

(7.2)

Cash and cash equivalents at beginning of period

14

14.0

21.2

21.2

 

Cash flows from discontinued operating activities are shown in note 14.  There are no cash flows from discontinued investing or financing activities.

 

 

 

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

 

 

1 General information

 

The results for the 24 week periods ended 12 June 2010 and 13 June 2009 are unaudited but have been reviewed by the Group's auditors, whose report on the current period forms part of this document.  The information for the 52 week period ended 26 December 2009 does not constitute statutory accounts as defined in section 435 of the Companies Act 2006.  A copy of the statutory accounts for that period has been delivered to the Registrar of Companies.  The auditors' report on those accounts was not qualified or modified, did not draw attention to any matters by way of emphasis and did not contain statements under section 498(2) or (3) of the Companies Act 2006.

 

2 Accounting policies

 

The annual financial statements of Galiform Plc are prepared in accordance with IFRSs as adopted by the European Union.  The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting", as adopted by the European Union.

 

Basis of preparation

 

The Group's business activities, together with the factors likely to affect its future development, performance, and position are set out on pages 4 to 7, and include a summary of the Group's financial position, its cash flows and borrowing facilities, and a discussion of why the directors consider that the going concern basis is appropriate. 

 

The same accounting policies, presentation methods, and methods of computation are followed in the condensed set of financial statements as applied in the Group's latest annual audited financial statements, except that the taxation charge for the half-year is calculated by applying the annual estimated effective tax rate to the profit for the period, and except for the adoption of IFRS8 and the revisions to IAS1, which are explained directly below.

 

Adoption of new accounting standards in the current period

 

In the current period, the Group has adopted International Financial Reporting Standard 8 'Operating segments' and the revisions to International Accounting Standard 1 'Presentation of Financial Statements'.

 

IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the group that are regularly reviewed by the Chief Executive to allocate resources to the segments and to assess their performance.  In contrast, the predecessor (IAS 14 'Segmental reporting') required the group to identify two sets of segments (business and geographical), using a risks and rewards approach, with the Group's system of internal financial reporting to key management personnel serving only as the starting point for identification of such segments.

 

IAS 1 (revised) requires the presentation of a statement of changes in equity as a primary statement, separate from the income statement and statement of comprehensive income.  As a result, a condensed statement of changes in equity has been included in the primary statements.

 

3 Segmental results

 

Basis of segmentation

 

Information reported to the Group's Chief Executive is focussed on one operating segment, Howden Joinery.  Thus, the information required in respect of segmental disclosure can all be found in the condensed consolidated income statement.

 

4 Seasonality of revenue

 

Howden Joinery sales are more heavily weighted to the second half of the financial year.  This partly reflects the fact that there are 24 weeks in the first half of the financial year and 28 weeks in the second half.  It also reflects sales in the peak October trading period.  In the last two financial years, approximately 60% of sales have been in the second half of the year.

 

5 Write down of inventories

 

During the period, the Group incurred a charge of £0.6m to write inventories down to their net realisable value (24 weeks to 13 June 2009 - £3.5m, 52 weeks to 26 December 2009 - £7.1m).

 

6 Exceptional items

 

Exceptional items in the 24 weeks to 12 June 2010:

 

There are no exceptional items in the 24 weeks to 12 June 2010.

 

Exceptional items charged to operating profit in the 24 weeks to 13 June 2009 are analysed as follows:

 


Total

 

There are no exceptional items in continuing operations.  The items in discontinued operations relate to the Group's former Sofa Workshop Limited operations, which were sold and treated as discontinued in 2006 and which are currently in administration.

 

As was disclosed in the Contingent Liabilities note to the Group's Annual Report and Accounts for the 52 weeks to 27 December 2008, the Group is guarantor on up to 12 leases in relation to properties which were held by Sofa Workshop Limited and which were occupied by Sofa Workshop Limited retail operations.  During the course of the 24 weeks to 13 June 2009, these contingent liabilities crystallised and the Group has begun to incur costs in connection with them.

 

The item "Costs and obligations relating to empty properties" covers the Group's best estimate of the rent, rates, and other associated costs of these properties.  It includes amounts paid under the property guarantees up to the end of the 24 weeks to 13 June 2009, as well as a provision for expected future amounts payable.   The amounts are discounted to their present value where material.

  

 

Exceptional items charged to operating profit in the 52 weeks to 26 December 2009 are analysed as follows:

 

Notes

Other operating expenses

£m

Total

£m

Continuing operations:

a



Loss on disposal of property, plant and equipment


(0.1)

(0.1)

Total charged to operating profit


(0.1)

(0.1)

Tax on exceptional items



-

Total exceptional items after tax



(0.1)





Discontinued operations:

b



Costs and obligations relating to empty properties



(4.4)

Total exceptional items before tax



(4.4)

Tax on exceptional items



-

Total exceptional items after tax



(4.4)





Continuing and discontinued operations:



Total exceptional items before tax



(4.5)

Tax on exceptional items



-

Total exceptional items after tax



(4.5)

 

(a) Continuing operations

 

The item "Loss on disposal of property, plant and equipment" comprises the net loss on disposals of property, plant and equipment during the 52 weeks to 26 December 2009.

 

(b) Discontinued operations

 

As was disclosed in the Contingent Liabilities note to the Group's Annual Report and Accounts for the 52 weeks ended 27 December 2008, the Group is guarantor for certain leases in relation to properties which were held by Sofa Workshop Limited and which were occupied by Sofa Workshop retail operations.  During the course of the 52 weeks to 26 December 2009, these contingent liabilities crystallised and the Group has begun to incur costs in connection with them.

 

The item "Costs and obligations relating to empty properties" covers the Group's best estimate of the rent, rates and other associated costs of these properties.  It includes amounts paid under the property guarantees up to 26 December 2009, as well as a provision for expected future amounts payable.  The amounts are discounted to their present value where material.  The provision element of the exceptional item is included as part of the total additions to the property provision in  the 52 weeks to 26 December 2009.

 

7 Finance income, finance expense and other finance charges - pensions

 

24 weeks to

12 June 2010

unaudited

£m

24 weeks to

13 June 2009

unaudited

£m

52 weeks to

26 December 2009

audited

£m

Finance income




Bank interest receivable

0.1

0.1

0.2

Other interest receivable

0.1

-

-


0.2

0.1

0.2





Finance expense




Bank interest payable

(0.5)

(1.5)

(2.6)

Other interest (including finance lease interest) payable

(0.1)

(0.1)

(0.2)

Interest charge on remeasuring creditors to fair value

(0.1)

(0.1)

(0.2)


(0.7)

(1.7)

3.0





Other finance expense - pensions




Finance element of pension charge

(2.4)

(3.7)

(8.0)

 

8 Tax

 

(a) Tax in the income statement

 

 

 

 

 

24 weeks to 12 June 2010

unaudited

£m

24 weeks to 13 June 2009

unaudited

£m

52 weeks to

26 December 2009

audited

£m

Current tax




Current year

5.1

0.9

15.2

Adjustments in respect of previous periods

-

-

(2.2)

Total current tax

5.1

0.9

13.0





Deferred tax




Current year

2.3

0.8

4.3

Adjustments in respect of previous periods

-

-

1.2

Total deferred tax

2.3

0.8

5.5





Total tax charged in the income statement

7.4

1.7

18.5

 

The tax charge is based on the estimated effective rate of tax on profit before tax for the 2010 financial year of 34.14% (52 weeks to 26 December 2009 - 35.6%).  Tax on losses from discontinued operations for the 24 weeks to 13 June 2009 was £nil.

 

(b) Tax relating to items credited to equity

 

24 weeks to 12 June 2010

unaudited

£m

24 weeks to 13 June 2009

unaudited

£m

52 weeks to

26 December 2009

audited

£m

Deferred tax




Actuarial gains/(losses) on pension scheme

2.6

(5.3)

(24.4)

Share schemes

0.3

(0.1)

(2.1)

Total tax charged/(credited) to statement of recognised income and expense

2.9

(5.3)

(26.5)

 


9 Earnings per share

 

From continuing operations












14.2

605.0

2.3


3.0

602.5

0.5


50.1

602.8

8.3

Effect of dilutive share options

-

0.7

-


-

7.1

-


-

3.2

-

Diluted earnings per share

14.2

605.7

2.3


3.0

609.6

0.5


50.1

606.0

8.3

 

From discontinued operations












-

605.0

-


(4.4)

602.5

(0.7)


(4.4)

602.8

(0.7)

Effect of dilutive share options

-

0.7

-


-

7.1

-


-

3.2

-

Diluted loss per share

-

605.7

-


(4.4)

609.6

(0.7)


(4.4)

606.0

(0.7)

 

From continuing and discontinued operations









14.2

605.0

2.3


(1.4)

602.5

(0.2)


45.7

602.8

7.6

Effect of dilutive share options

-

0.7

-


-

7.1

-


-

3.2

(0.1)

Diluted earnings/(loss) per share

14.2

605.7

2.3


(1.4)

609.6

(0.2)


45.7

606.0

7.5

 

From continuing operations, excluding exceptional items









14.2

605.0

2.3


3.0

602.5

0.5


50.2

602.8

8.3

Effect of dilutive share options

-

0.7

-


-

7.1

-


-

3.2

-

Diluted earnings per share

14.2

605.7

2.3


3.0

609.6

0.5


50.2

606.0

8.3

 

From continuing and discontinued operations, excluding exceptional items







14.2

605.0

2.3


3.0

602.5

0.5


50.2

602.8

8.3

Effect of dilutive share options

-

0.7

-


-

7.1

-


-

3.2

-

Diluted earnings per share

14.2

605.7

2.3


3.0

609.6

0.5


50.2

606.0

8.3

 


10 Property, plant and equipment

 

During the period, the Group spent £6.4m on additions to property, plant and equipment (24 weeks to 13 June 2009 - £3.6m; 52 weeks to 26 December 2009 - £7.5m).  It also disposed of property, plant and equipment with a net book value of £nil (24 weeks to 13 June 2009 - £0.4m; 52 weeks to 26 December 2009 - £0.6m) for proceeds of £nil (24 weeks to 13 June 2009 - £nil; 52 weeks to 26 December 2009 - £0.2m).

 

There are non-cancellable commitments to purchase property, plant and equipment of £3.5m (24 weeks to 13 June 2009 - £0.5m; 52 weeks to 26 December 2009 - £0.5m) at the current period end.

 

 

11 Retirement benefit obligations

 

(a) Total amounts charged in respect of defined pensions in the period

 

24 weeks to 12 June 2010

unaudited

£m

24 weeks to

 13 June 2009

unaudited

£m

52 weeks to

26 December 2009

audited

£m

 

(b) Other information - defined benefit pension schemes

 

The most recent actuarial valuation was carried out at 6 April 2008 by the scheme actuary.  The actuary advising the Group has subsequently rolled forward this valuation to 12 June 2010 and restated the results onto a basis consistent with market conditions at that date.  The pension deficit has decreased over the 24 weeks ended 12 June 2010.  The following summary information analyses the main changes in greater detail.

 

Key assumptions used in the valuation of the schemes

 

24 weeks to 12 June 2010

unaudited

24 weeks to

 13 June 2009

unaudited

52 weeks to

26 December 2009

audited

 

Balance sheet

 

Movements in the deficit during the period were as follows:

 

24 weeks to 12 June 2010

unaudited

24 weeks to

 13 June 2009

unaudited

52 weeks to

26 December 2009

audited

 

Statement of comprehensive income

 

Amounts taken to equity via the statement of comprehensive income in respect of the Group's defined benefit schemes are shown below.

 

24 weeks to 12 June 2010

%

24 weeks to

 13 June 2009

%

52 weeks to

26 December 2009

%

 

12 Provisions

 

 

The property provision mainly covers onerous leases.  For any such leases, the Group provides for any shortfall between rent payable and rent receivable.  The provision is based on the period until the end of the lease, or until the Group can cover the shortfall by subletting, assigning or surrendering the lease.  None of the provisions are short term.  The property provision also includes amounts for any related shortfalls in business rates on these properties and for dilapidations.

 

During the current period, the property provision has been increased by £0.1m arising from an unwinding of the discount rate over time.  None of this amount relates to a change in the discount rate.  This amount is shown as a finance charge in note 7.  The amount of the expected future cash flows has been adjusted to reflect the expected range of possibilities and, as the outflows under this provision are expected to take place over a number or years, the provision has been discounted to its present value.

 

Other provisions relate to amounts due in respect of contractual terminations.

 

13 Related party transactions

 

Transactions between Group companies, which are related parties, have been eliminated on consolidation and are therefore not disclosed.  The only other transactions which fall to be treated as related party transactions are those relating to the remuneration of key management personnel, which are not disclosed in the Half Yearly Report, and which will be disclosed in the Group's next Annual Report.

 

14 Notes to the cash flow statement

 

(a) Net cash flows from operating activities

 

Operating cash flows before movements in working capital

33.8

19.9

97.2

 

(b) Reconciliation of movement in net debt

 

Cash and cash equivalents

17.4

18.4

14.0

Investments

0.4

1.0

0.7

Bank loans

(19.5)

(67.0)

(10.5)

Finance leases

(1.0)

(2.7)

(1.8)


(2.7)

(50.3)

2.4

 

(c) Analysis of net debt

 

 

Closing bank loans at 12 June 2010 comprise £18.4m of non-current liabilities and £1.1m of current liabilities.

 

Closing finance leases at 12 June 2010 comprise £0.2m of non-current liabilities and £0.8m of current liabilities.

 

 

 

CAUTIONARY STATEMENT

 

Certain statements in this Half Yearly Report are forward-looking.  Although the Group believes that the expectations reflected in these forward-looking statements are reasonable, we can give no assurance that these expectations will prove to have been correct.  Because these statements contain risks and uncertainties, actual results may differ materially from those expressed or implied by these forward-looking statements.  We undertake no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise.

 

 

RESPONSIBILITY STATEMENT

 

We confirm that to the best of our knowledge:

 

(a) the condensed set of financial statements has been prepared in accordance with IAS 34 'Interim Financial Reporting';

(b) the Half Yearly Report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first 24 weeks and description of principal risks and uncertainties for the remaining 28 weeks of the year); and

(c) the Half Yearly Report includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties' transactions and changes therein).

 

The directors are responsible for the maintenance and integrity of the corporate and financial information included in the company's website.  Legislation in the United Kingdom governing the preparation and dissemination of financial information differs from legislation in other jurisdictions.

 

By order of the Board

 

 

 

 

 

Matthew Ingle                                                          Mark Robson

Chief Executive Officer                                     Chief Financial Officer

 

20 July 2010

 

INDEPENDENT REVIEW REPORT TO GALIFORM PLC

 

We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the 24 weeks ended 12 June 2010  which comprises the income statement, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the cash flow statement and related notes 1 to 14. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

 

This report is made solely to the company in accordance with International Standard on Review Engagements (UK and Ireland) 2410  "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board.  Our work has been undertaken so that we might state to the Company those matters we are required to state to them in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our review work, for this report, or for the conclusions we have formed.

 

Directors' responsibilities

 

The half-yearly financial report is the responsibility of, and has been approved by the directors.  The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdoms' Financial Services Authority.

 

As disclosed in note 2, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union.  The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting," as adopted by the European Union.

 

Our responsibility

 

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

 

Scope of Review

 

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

 

Conclusion

 

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the 24 weeks ended 12 June 2010 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

 

 

 

Deloitte LLP

Chartered Accountants and Registered Auditor

London

 

20 July 2010

FINANCIAL CALENDAR

 

2010

 

Interim Management Statement                  11 November 2010

 

End of financial year                                 25 December 2010

 

2011

 

2010 Preliminary Results                            3 March 2011

 

Interim Management Statement                  28 April 2011 (provisional)

 

Half Yearly Report                                    21 July 2011 (provisional)

 

Interim Management Statement                  10 November 2011 (provisional)

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
IR RMMFTMBATBTM

Companies

Howden Joinery Group (HWDN)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today