Preliminary Results
Walker Greenbank PLC
17 April 2007
For immediate release 17 April 2007
WALKER GREENBANK PLC
('Walker Greenbank' or 'the Company')
Preliminary Results for the 12 months ended 31 January 2007
Walker Greenbank plc (AIM: WGB), the designer, manufacturer and distributor of
furnishing fabrics and wallpapers whose international business includes the
brands Sanderson, Morris & Co, Harlequin and Zoffany, is pleased to announce its
preliminary results for the 12 month period ended 31 January 2007.
Highlights
• A further year of excellent progress with continued strong organic growth
• Turnover from continuing operations up 15% to £53.33 million (2006:
£46.36 million)
• Operating profit from continuing operations up nearly three-fold to
£2.20 million (2006: £0.76 million)
• Earnings per share of 4.49p (2006: 4.51p) with underlying earnings per
share from continuing operations of 2.23p (2006: loss per share 0.77p)
• Pension deficit further reduced to £3.82 million (2006: £7.98 million)
which now represents only 30% of Shareholders' Funds (2006: 93%)
• Gearing reduced to 67% (2006: 109%)
• Shareholders' Funds increased by 49% to £12.85 million (2006: £8.60
million)
• Current financial year has started strongly as organic growth continues
and trading is ahead of internal projections
Ian Kirkham, the Chairman of Walker Greenbank, said: 'I am very pleased to
report another year of excellent progress in which our recovery has allowed us
to enter a sustained growth phase. Our brands, supported by our niche
manufacturing, are well placed to exploit the move away from minimalism towards
colour and design. The Board views the outcome for the current year with
increasing confidence.'
For further information:
Walker Greenbank plc 08708 300077
John Sach, Chief Executive
Alan Dix, Finance Director
Julian Wilson, Company Secretary
Teather & Greenwood 020 7426 9000
Mark Dickenson
Tom Hulme
Buchanan Communications 020 7466 5000
Mark Court/Suzanne Brocks
CHAIRMAN'S STATEMENT
Overview
In last year's Annual Report I began by describing the year to January 2006 as a
landmark year in that we reported a full year operating profit for the first
time since 2000, reflecting the success of our strategy of restoring the Group
to profitability and of the strengthening trend in interior design towards the
use of colour and pattern in wallpaper and fabrics. I am now very pleased to
report another year of excellent progress in which our recovery has allowed us
to enter a sustained growth phase. The momentum in our business is highlighted
by a near three-fold increase in operating profits from continuing operations
before exceptional items of £2,201,000 in the year to 31 January 2007, compared
with £758,000 in 2006. Our financial year concluded with a significantly
strengthened balance sheet, which benefited from a cash inflow from operating
activities of £2,995,000 (2006: £1,643,000), a substantially reduced pension
deficit and reduced debt.
Our brands - Harlequin, Sanderson, Morris & Co and Zoffany - have made
significant progress during the year.
Harlequin, our mid-market brand, has delivered substantial year on year sales
growth. The brand has gained market share from its competitors and more than
doubled its operating profits for the second consecutive year, reflecting
continued investment in new designs and a widening of the brand's distribution.
Growth in revenue at Sanderson is accelerating, following the significant
investment in product and an increase in marketing this year. Our strategy of
focusing the Zoffany brand on its core and traditional design values is
re-establishing the business as a leading brand at the premium end of the
market. This has led to Zoffany's first increase in sales after a number of
years of under performance. As reported at the interim stage, results from our
business in the United States have been disappointing, with underlying sales
growing more slowly than anticipated. This led to a strengthening of the
management team and we are confident of making progress in this important
market.
Anstey, our wallpaper factory, and Standfast, our fabric printing factory, have
made significant progress in the year. The strong return to popularity of
wallpaper at the premium end of the market is now building in the mid-market and
has helped Anstey deliver significant growth in both revenue and profits.
Standfast continues to win market share and it also has achieved significant
growth in both revenue and profits.
Financials
Turnover increased 10% to £53,327,000 from £48,392,000 and 15% from continuing
operations. The operating profit from continuing operations increased nearly
three-fold to £2,201,000 (2006: £758,000). The operating profit for the year was
£3,477,000 (2006: £5,018,000). Both 2006 and 2007 include the exceptional
beneficial effect of the pension deficit reduction exercise.
The profit before tax was £2,594,000 (2006: £2,625,000). The results include the
exceptional profit from the pension deficit reduction exercise in 2007 of
£1,276,000 (2006: £4,076,000) and the exceptional loss on the sale of Borge
Holdings AS in 2006 of £1,281,000. The earnings per share for the year were
4.49p (2006: 4.51p)
Following the Group's return to profitability and the successful outcome of the
pension deficit reduction exercise, shareholders' funds have increased 49% to
£12,847,000. (2006: £8,597,000). The pension deficit has reduced to represent
30% of shareholders' funds at the year end, compared with 93% a year ago. The
pension deficit reduction exercise has been extremely successful with the
pension deficit reducing directly by £1,562,000 in 2007 and £5,634,000 in 2006.
As a direct result of the reduction in the pension deficit the profit and loss
has benefited in 2007 with other finance income of £81,000 compared with a
finance charge of £174,000 in the prior year.
The Group's net indebtedness finished the year at £8,604,000 (2006: £9,357,000).
The cash inflow from operating activities was £2,995,000 (2006: £1,643,000)
after payments to pensioners and settlement of liabilities of £894,000 (2006:
£950,000) associated with the pension deficit reduction exercise.
Dividend
The Directors do not recommend the payment of a dividend, but remain conscious
of returning to the dividend list as soon as is prudent.
People
I would like to thank all of our employees who have demonstrated tremendous
commitment and enthusiasm and have been an important ingredient in delivering
the excellent progress of the Group in the past year.
Outlook
Having established the Group as a profitable and cash generative business we now
have a solid platform from which to take advantage of the opportunities that
exist within a market that is benefiting from a major shift in interior fashion
trends. Our brands, supported by our niche manufacturing, are well placed to
exploit the move away from minimalism towards colour and design. Harlequin's
success in the past year underlines the growing strength of this trend and the
organic growth opportunities that exist for the Group going forward.
With two months of our financial year now complete, we are trading ahead of our
internal projections. The Board views the outcome for the current year with
increasing confidence.
Ian Kirkham
Chairman
16 April 2007
CHIEF EXECUTIVE'S REVIEW
The year to January 2007 was a period of excellent progress in which we have
consolidated the recovery of the Group and created a platform for future growth.
Much work has been done to strengthen our financial position and this will allow
us to take advantage of the opportunities ahead.
Strategy
Our strategy is to deliver earnings growth and to maximise the return to
shareholders. We are driving our brands' organic growth, expanding our contracts
division, exploiting manufacturing opportunities and negotiating further
licensing arrangements.
There is significant organic growth potential in our brands: with Harlequin, we
are expanding the product offer and aiming to achieve greater presence in
overseas markets, specifically the North American market where the brand to date
has had limited exposure; with Sanderson and Morris & Co we are exploiting the
strength of the brands' global recognition through continued product investment
and licensing arrangements; and with Zoffany we will continue with the progress
already made in restoring the business to its deserved pre-eminent position as a
premium brand through enhanced focus on Zoffany's core and traditional design
values.
We are driving the expansion of our contracts division, with increased
investment in contract-specific product supported by the strength of the brand
names and our manufacturing capability.
We will evaluate acquisition opportunities in our highly fragmented market.
However, any acquisition would have to fit with the current brand portfolio and
provide synergistic and earnings enhancing opportunities.
The Brands
Harlequin
The Harlequin brand has continued the impressive sales growth seen in the first
half of the year, achieving a year on year increase of 42% and marking the
second consecutive year of substantial growth. Growth in 2007 was across all
product categories - wallpaper, printed fabric and woven fabric - and across all
markets, with export sales up strongly at 45% and the UK up 40%. This
performance further strengthens Harlequin's position as the leading mid-market
contemporary brand in the UK. Harlequin continues to expand its product launches
and all of its recent collections have performed extremely well. Two Harlequin
wallpaper collections now have annualised sales in excess of £1 million. Sales
to the USA have doubled following the successful re-launch into certain States
last year, expanding our presence to 15 States in total.
The continued investment in design capability has delivered excellent product,
which, supported by strong marketing, sampling and patterning, has fuelled the
42% sales growth. Coupled with improved margins, this has led to an almost
three-fold increase in profits compared with the same period last year.
Zoffany
The process, begun in 2005, of re-enforcing Zoffany's position as one of the
UK's leading premium brands is taking effect. Having brought an intense focus to
its core and traditional design values we have seen sales growth in the second
half of the year for the first time in four years. Overall sales for the year
are slightly up on the same period last year with UK underlying sales in line
with last year following an adjustment for a large contract order to the
Intercontinental London Park Lane Hotel in the early part of last year. Export
sales are up 13% on the same period last year.
Overall margins are slightly reduced compared with last year due to the higher
proportion of export activity. This, combined with a planned increase in
marketing expenditure, has led to Zoffany breaking even this year in line with
internal expectations. We fully expect the business to return to profitability
in the current year.
Arthur Sanderson & Sons incorporating the Morris & Co brand
Following increased investment in product over the past two years, we are now
experiencing increasing momentum in Sanderson's sales growth. Sales are up 13%
compared with last year. As with Harlequin, the sales growth has been broad
based showing growth in all major markets but driven by a strong UK performance.
Licensing contribution grew 7%, with the key markets of Japan and Australasia
performing well, helped by the continued development of the Sanderson and Morris
& Co names across a number of product categories. We continue to invest for the
future in the key areas of product development and marketing, both of which we
believe will deliver strong profit growth in the future.
Manufacturing
Anstey
Anstey has established itself as the market leader in the UK in wallpaper
manufacture at the mid to premium end of the market. With the interior design
trend now moving strongly towards wallpaper in this sector of the market Anstey
has increased overall sales by 16%. External third party sales have grown 23% as
more of its customers have sought to satisfy the consumer demand for wallpaper.
Group sales have grown 11%. This higher activity assisted by continued
improvement in factory efficiencies and tightly controlled overheads has enabled
the business to generate a return on sales compared with a break-even position
last year.
Standfast
Standfast has continued to win market share and achieved growth in third party
business of 14%. This together with the impact of the success of the Group's
brands has helped Standfast achieve overall sales growth of 19%. There has been
a significant increase in investment during the year both in terms of capital
equipment and the level of preventive maintenance to help mitigate the impact of
increases in energy costs. The higher activity and improved factory loadings
have increased efficiencies enabling Standfast to generate improved return on
sales.
Overseas
USA
Sales in the USA are down 9%, but this is primarily due to the exit of lower
margin third-party business during the second half of last year. Sanderson &
Morris sales have grown by 11% with particular benefit arising from the latest
Morris & Co collection. Zoffany sales declined by 12% primarily due to fewer
significant contract orders realised in the year. The re-launch of the Harlequin
brand last year has helped achieve more than a doubling of revenue.
Margins have improved with the exit from the lower margin third-party business
during the second half of last year. However the overall result was a loss due
to increased investment in patterning, sampling and marketing during the year,
all of which were clearly focused in support of our medium to long term belief
in our brands' potential in this important market.
Europe
The distribution businesses for Zoffany and Harlequin in Rome and Zoffany and
Sanderson in Paris are relatively small but have grown their combined sales by
22%, returning a small profit compared with a loss last year.
Summary
We are delighted to have built on last year's substantial achievements through
further progress delivered across all areas of our business, from our product
collections to our balance sheet. We have created a solid platform for future
progress and have identified significant opportunities for growth through
leveraging our brand assets. The organic potential of our brands, underlined by
the sales growth at Harlequin and more recently Sanderson, clearly demonstrates
our ability to create shareholder value and we look forward to delivering
further progress in the year ahead.
John Sach
Chief Executive
16 April 2007
FINANCIAL REVIEW
(Extracted from the Financial Review)
Profit and Loss
The profit and loss account has been set out in a columnar format this year.
This presentation has been adopted in order to reflect more clearly the
underlying performance of the business and to separate the exceptional
beneficial impact of the pension deficit reduction exercise in both 2007 and
2006 and of the exceptional loss in 2006 on the sale of Borge Holdings AS and
its subsidiary John O Borge AS. The table below shows the true underlying
performance.
2007 2006
£000 £000
Profit before tax per the accounts 2,594 2,625
Exclude discontinued activities - (184)
Exclude exceptional benefit from pension deficit reduction exercise (1,276) (4,076)
Exclude exceptional loss on disposal of Borge Holdings AS - 1,281
Underlying Profit/(loss) before tax 1,318 (354)
Tax (58) (80)
Profit/(loss) after tax 1,260 (434)
Underlying EPS 2.23 (0.77)
Disposals
There were no disposals during the year. In the previous year the Group sold the
non-core business of Borge Holding AS and its subsidiary John O Borge AS. There
was a profit on disposal after related costs of £532,000. Under FRS 17 the Group
accounts showed a pension liability associated with the John O Borge business,
although under Norwegian accounting rules there was a small pension surplus. As
a consequence of the sale this liability, £95,000 was no longer required and was
released. Goodwill previously written off to reserves was expensed in the profit
and loss as required by FRS 10, leading to an overall net loss on disposal of
£1,281,000. The goodwill was directly credited back to reserves as seen in the
Reconciliation of Movements in Shareholders' Funds.
Interest
The interest charge for the year was £964,000 (2006: £938,000) including
amortisation of debt issue costs capitalised in accordance with FRS4 'Capital
Instruments'. There was other finance income during the year of £81,000 (2006:
other finance charge £174,000). This is a consequence of the significant
reduction in the gross pension liability compared with the previous year.
Taxation
The Group tax charge continues to reflect the amounts borne in foreign
territories. This is constantly under review to ensure every opportunity is
considered to minimise the amount incurred. In the UK, the Group has substantial
brought forward tax trading losses and, as a consequence, does not anticipate
paying UK corporation tax in the foreseeable future. It will be the Group's
intention to reflect a deferred tax asset in the future as the Group
demonstrates its continuing improving profitability. The first step was to
reflect the deferred tax asset associated with the pension liability this year,
which is reflected in the Statement of Total Recognised Gains and Losses.
Earning per share ('EPS')
The basic and diluted EPS was 4.49p (2006: 4.51p). The underlying EPS is 2.23p
for the current year (2006: loss per share 0.77p). The number of shares in issue
remained constant for both years at 56,457,000.
Operating Cash Flow
The Group generated net cash inflow from operating activities during the year of
£2,995,000 (2006: £1,643,000). It paid interest of £893,000 (2006: £866,000) and
capital expenditure of £1,220,000 (2006: £710,000). There has been increased
investment in the manufacturing businesses focused on energy-saving projects and
replacement of old equipment which was becoming unreliable. The depreciation
charge during the period continued to be greater than required capital
expenditure. Working capital was tightly controlled and although the group
turnover for continuing businesses increased by 15% there was a decrease in
working capital.
The Group made payments to the Pension schemes of £1,078,000 to reduce the
deficit and this is part of the ongoing planned reduction. There were also
payments made during the year to active and deferred pensioners of £286,000 as
these pensioners accepted an offer from the Group to buy out the right to
non-statutory pension increases. During the year liabilities of £608,000
associated with the pension reduction exercise that arose last year were
settled.
As a consequence net debt in the Group has reduced by £753,000 to £8,604,000
(2006: £9,357,000).
Pension Deficit
The pension deficit has reduced further this year. There are three key
contributing factors; the first being £1,078,000 ongoing contributions from the
company to reduce the deficit; the second was the reduction arising from the
settlement of liabilities of £1,562,000; the final being the recognition of the
deferred tax associated with the pension deficit. The impact of these factors is
shown below.
2007
£000
Deficit at beginning of period (7,981)
Current service cost (180)
Other finance income 81
Contributions 1,078
Reduction of deficit following settlement of liabilities 1,562
Actuarial loss (18)
Gross deficit at the end of the year (5,458)
Deferred tax asset arising 1,637
Net deficit at end of period (3,821)
Long-Term Incentive Plan
At the AGM held on 25 July 2006, conditional awards of shares were granted to
the executive directors and certain employees under the Long-Term Incentive Plan
('LTIP'). FRS20 has been adopted during the year. The impact has been a charge
in the Profit and Loss Account of £143,000.
Treasury Policy
The Group's treasury policy is controlled centrally in accordance with
procedures approved by the Board. It is run prudently as a central Group
function, providing services to the other Group companies and adopts a risk
averse strategy.
Gearing
The gearing level for the Group improved during the year to 67% at 31 January
2007 (2006: 109%).
Funding
The Group utilises a facility provided by Burdale Financial Ltd, part of the
Bank of Ireland. It is a 3 year facility which ends on 23 July 2007 with a limit
of £18.5m. A significant element of the facility is linked to working capital
levels which allows the Group to manage its cash more effectively during the
seasonal fluctuations in working capital associated with the industry in which
the Group operates.
The Group has been seeking a funding structure that is more appropriate to its
improving financial strength and an agreement has been reached on commercial
terms with a UK clearing bank to provide these requirements from July 2007
subject only to satisfactory legal agreements being concluded.
All of the bank's facilities remain secured by first fixed and floating charges
over the Group's assets.
Going Concern
The directors are confident, after having made appropriate enquiries that the
Group and company have adequate resources to continue in the foreseeable future.
For this reason they continue to adopt the going concern basis in preparing the
accounts.
Alan Dix
Finance Director
16 April 2007
Group Profit and Loss Account
Year ended 31 January 2007
Before
Exceptional Exceptional Total Total
items items 2007 2006
note £000 £000 £000 £000
Turnover
Continuing operations 1,2 53,327 - 53,327 46,361
Discontinued operations 1,2 - - - 2,031
53,327 - 53,327 48,392
Operating profit
Continuing operations 2 2,201 - 2,201 758
Discontinued operations 2 - - - 184
Exceptional items 2 - 1,276 1,276 4,076
2,201 1,276 3,477 5,018
Profit on sale of subsidiary 3 - - - 532
Pension provision (FRS17) release on sale of - - - 95
subsidiary
Goodwill previously written off to reserves - - - (1,908)
Net loss on sale of subsidiary - - - (1,281)
Profit on ordinary activities before interest 2,201 1,276 3,477 3,737
Net interest payable
Interest payable (898) (872)
Amortisation of issue costs (66) (66)
(964) (938)
Other finance income/(charge) 81 (174)
Profit on ordinary activities before taxation 1 2,594 2,625
Tax on profit on ordinary activities (58) (80)
Profit on ordinary activities after taxation 2,536 2,545
Dividends - -
Profit for the year 2,536 2,545
Earnings per share - Basic and diluted 4 4.49p 4.51p
Earnings per share - Basic and diluted from 4 4.49p 6.46p
continuing operations
Dividend per ordinary share - -
There is no material difference between the profit on ordinary activities above
and their historical cost equivalent.
Balance Sheets
At 31 January 2007
Group Group Company Company
note 2007 2006 2007 2006
£000 £000 £000 £000
Fixed assets
Intangible assets 4,820 4,859 - -
Tangible assets 9,623 10,205 4,489 4,595
Investment in subsidiaries - - 43,579 33,250
14,443 15,064 48,068 37,845
Current assets
Stocks 13,476 11,539 - -
Debtors 10,344 9,137 17,175 15,823
Cash at bank and in hand 2,065 1,530 - 77
25,885 22,206 17,175 15,900
Creditors: amounts falling due within one year (13,587) (10,403) (9,987) (9,440)
Net current assets 12,298 11,803 7,188 6,460
Total assets less current liabilities 26,741 26,867 55,256 44,305
Creditors: amounts falling due after more than one year (10,073) (10,289) (780) (1,225)
Net assets excluding pension liability 16,668 16,578 54,476 43,080
Pension liability 8 (3,821) (7,981) - -
Net assets 12,847 8,597 54,476 43,080
Capital and reserves
Share capital 590 590 590 590
Share premium account 457 457 457 457
Profit and loss account (28,707) (32,957) 11,541 145
Other reserves 40,507 40,507 41,888 41,888
Equity shareholders' funds 12,847 8,597 54,476 43,080
Group Cash Flow Statement
Year ended 31 January 2007
2007 2007 2006 2006
note £000 £000 £000 £000
Net cash inflow from operating activities 5 2,995 1,643
Returns on investment and servicing of finance
Interest received 20 12
Interest paid (913) (878)
(893) (866)
Taxation (50) (184)
Capital expenditure
Purchase of tangible fixed assets (1,220) (710)
(1,220) (710)
Acquisitions and disposals
Net proceeds from disposal of operations - 1,498
- 1,498
Equity dividends paid - -
Cash inflow before use of liquid resources and
financing 832 1,381
Management of liquid resources - -
Financing
Proceeds from new loans - 655
Principal repayments of finance lease obligations - (251)
Repayment of borrowings (282) (1,414)
(282) (1,010)
Increase in cash 6,7 550 371
Statement of Total Recognised Gains and Losses
Year ended 31 January 2007
Group Group
2007 2006
£000 £000
Profit for the financial year 2,536 2,545
Actual less expected return on pension scheme assets (1,216) 3,817
Experience gains and losses arising on pension scheme liabilities (5) 425
Change in actuarial assumptions 1,203 (7,141)
Currency translation differences (17) (27)
Deferred tax on pension liability 1,637 -
Total recognised gains and losses since the last annual report 4,138 (381)
Reconciliation of Movements in Shareholders' Funds
Year ended 31 January 2007
Group Group
2007 2006
£000 £000
Profit for the financial year 2,536 2,545
Dividends - -
Profit for the year 2,536 2,545
Other recognised gains/(losses) relating to the year 1,602 (2,926)
Accrual for long term incentive plan liabilities 112 -
Goodwill previously set off to reserves in respect of the disposal of - 1,908
operations
Net increase to shareholders' funds 4,250 1,527
Opening shareholders' funds 8,597 7,070
Closing shareholders' funds 12,847 8,597
Notes to the Accounts
1 Segmental analysis
(a) Classes of business
Turnover
2007 2006
£000 £000
(restated)
Continuing operations:
Fabrics 37,414 31,943
Wallcoverings 14,553 12,415
Other 1,360 2,003
53,327 46,361
Discontinued operations:
Fabrics - 511
Wallcoverings - 1,520
- 2,031
Group 53,327 48,392
The comparative classes of business have been restated to better reflect the
nature of the business.
The other category includes furniture, paint and trimmings.
(b) Geographical segments
Turnover Profit Net assets
before taxation before taxation
2007 2006 2007 2006 2007 2006
£000 £000 £000 £000 £000 £000
By origin on continuing
operations:
United Kingdom 46,320 38,902 2,721 2,377 13,816 9,414
Continental Europe 1,466 1,198 9 (86) (1,011) (1,003)
North America 5,541 6,261 (136) 154 42 186
53,327 46,361 2,594 2,445 12,847 8,597
By origin on discontinued
operations:
Continental Europe - 2,031 - 180 - -
By origin Group operations 53,327 48,392 2,594 2,625 12,847 8,597
By destination on continuing
operations:
United Kingdom 35,485 29,476
Continental Europe 7,693 6,145
North America 7,503 7,937
Rest of the World 2,646 2,803
53,327 46,361
By destination on
discontinued operations:
Continental Europe - 2,031
By destination Group 53,327 48,392
operations
2 Analysis of operating profit
2007 2006
Continuing Discontinued Total Continuing Discontinued Total
£000 £000 £000 £000 £000 £000
Turnover 53,327 - 53,327 46,361 2,031 48,392
Cost of sales (23,006) - (23,006) (20,562) (957) (21,519)
Gross Profit 30,321 - 30,321 25,799 1,074 26,873
Net operating expenses:
Distribution costs (13,272) - (13,272) (11,650) (305) (11,955)
Administrative expenses (15,845) - (15,845) (14,489) (583) (15,072)
Other operating income 997 - 997 1,098 (2) 1,096
Operating profit before 2,201 - 2,201 758 184 942
exceptionals
Reduction of pension 1,276 - 1,276 4,076 - 4,076
deficit following
settlement of liabilities
Operating profit 3,477 - 3,477 4,834 184 5,018
Exceptional items
During the year the Group bought out the right to non statutory pension
increases from its active and deferred pensioners. This has resulted in a
reduction of the FRS 17 liability in the balance sheet of £1,562,000 (2006:
£5,634,000) and a benefit of £1,276,000 (2006: £4,076,000) in the profit and
loss account. The benefit arising from the pension reduction exercise would be
classified as administration expenses under FRS 3.
3 Loss on the sale of Borge Holdings AS and John O Borge AS
In June 2005, the wholly owned Norwegian subsidiaries Borge Holding AS and John
O Borge AS were sold for a consideration before costs of £1,881,000. A profit of
£532,000 was generated on the sale before goodwill previously written off to
reserves and the adjustment to FRS 17 provision. Goodwill previously written off
to reserves of £1,908,000 was charged through the profit and loss account. A net
loss on sale of £1,281,000 has been recorded. Net proceeds of £1,498,000 were
received as detailed in the table below:
2006
£000
Sale of Borge Holdings AS and John O Borge AS
The disposal comprised the following:
Tangible fixed assets 60
Stock 681
Debtors 745
Creditors (520)
Profit on disposal 532
Net cash inflow from the disposal of Borge Holdings AS and 1,498
John O Borge AS
The tax effect of the disposal was £nil.
4 Earnings per share
Basic earnings per share is calculated by dividing the earnings attributable to
ordinary shareholders by the weighted average number of shares outstanding
during the year, excluding those held in the employee share trust, which are
treated as cancelled.
2007 2006
Earnings Weighted Per share Earnings Weighted Per share
£000 average Amount £000 average Amount
number of pence number of pence
shares shares
(000's) (000's)
Basic and diluted EPS:
Earnings attributable to ordinary 2,536 56,457 4.49 2,545 56,457 4.51
shareholders
Earnings per share from continuing
operations:
Basic and diluted EPS 2,536 56,457 4.49 2,545 56,457 4.51
Loss on sale of subsidiary - - - 1,281 - 2.27
Pre tax profit from discontinued - - - (180) - (0.32)
operation
Basic and diluted EPS from 2,536 56,457 4.49 3,646 56,457 6.46
continuing operations
Earnings per share from discontinued
operations:
Basic and diluted EPS
Loss on sale of subsidiary - - - (1,281) 56,457 (2.27)
Pre tax profit from discontinued - - - 180 - 0.32
operation
Basic and diluted EPS from - - - (1,101) 56,457 (1.95)
discontinued operations
5 Reconciliation of operating profit to net cash inflow from operating
activities
6
2007 2007 2006 2006
£000 £000 £000 £000
Continuing operations:
Operating profit 3,477 4,834
Depreciation and amortisation 1,811 1,894
Difference between pension charge and cash contributions (2,174) (5,316)
Settlement of pension liabilities (894) (950)
Proceeds on disposal of fixed assets - 3
Loss on disposal of fixed assets 11 -
(Increase)/decrease in stocks (1,940) 525
(Increase)/decrease in debtors (1,245) 1,624
Increase/(decrease) in creditors 3,837 (642)
Decrease in provisions - (323)
Accrual for long term incentive plan liabilities 112 -
(482) (3,185)
Net cash inflow from continuing operating activities 2,995 1,649
Discontinued operations:
Operating profit - 184
Depreciation and amortisation - 9
Decrease in stocks - 134
Increase in debtors - (125)
Decrease in creditors - (208)
- (190)
Net cash outflow from discontinued operations - (6)
Total net cash inflow from operating activities 2,995 1,643
7 Analysis of net debt
1 February 2006 Other movements Exchange 31 January
Cash flow movement 2007
£000 £000 £000 £000 £000
Cash at bank and in hand 1,530 548 - (13) 2,065
Overdrafts (2) 2 - - -
1,528 550 - (13) 2,065
Debt due within one year (596) - - - (596)
Debt due after one year (10,289) 282 (66) - (10,073)
(10,885) 282 (66) - (10,669)
(9,357) 832 (66) (13) (8,604)
8 Reconciliation of net cash flow to movement in net debt
2007 2006
£000 £000
Increase in cash in the year 550 371
Decrease in debt and lease financing 282 911
Cash inflow from cash flows 832 1,282
Other movements (66) 99
Exchange movement (13) 8
Movement in the year 753 1,389
Net debt at 1 February 2006 (9,357) (10,746)
Net debt at 31 January 2007 (8,604) (9,357)
Other movements are amortisation of issue costs relating to the loan financing.
9 Pensions
Movement in deficit during the period
2007 2006
Group Group
£000 £000
Deficit at beginning of period (7,981) (11,269)
Movement in the period:
Current service cost (180) (167)
Contributions 1,078 799
Reduction of pension deficit following settlement of liabilities 1,562 5,634
Release due to sale of subsidiary - 95
Other finance income/(charge) 81 (174)
Adoption of PA92 mortality tables - (3,196)
Actuarial (loss)/gain (18) 297
Deficit at end of period (5,458) (7,981)
Related deferred tax asset 1,637 -
Net pension liability (3,821) (7,981)
This information is provided by RNS
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