For Immediate Release |
1 April 2009 |
Churchill China plc
PRELIMINARY RESULTS
for the year ended 31 December 2008
Churchill China plc, the manufacturer and global distributor of ceramic tableware and household goods to the hospitality and retail markets, is pleased to announce its preliminary results for the year ended 31 December 2008.
Key Points:
Group turnover of £42.0m (2007 : £46.9m)
Profit before tax of £3.4m (2007 : £4.8m)
Basic earnings per share 13.8p (2007: 33.8p)
Adjusted earnings per share before exceptional items 22.2p (2007: 26.5p)
Year end net cash £7.7m (2007 : £11.4m)
Final dividend maintained at 9.2p per ordinary share (2007: 9.2p)
Jonathan Sparey, Chairman said:
'I am pleased to report that 2008 was a year of good performance, with respectable profitability, positive cash flows and continued progress against key strategic targets. Churchill China has been in a stronger position than many of our peer group due to our balanced business of hospitality and retail accounts, our strong balance sheet, tight control of our cost base and effective working capital management.
'Despite the prevailing economic circumstances, we have performed in line with our expectations in the first three months of 2009 with Group sales marginally ahead of the corresponding period in 2008.
'Our retail business has started well and sales will be enhanced later this year with the impact of the new Jamie Oliver licence which we secured in February this year. This licence is very exciting for our business and opens up a range of opportunities on a worldwide basis. We will continue to improve efficiency and keep costs and working capital tightly managed. The executive management team is both hugely experienced and conservative by nature and we are confident in our future prospects.'
For further information, please contact:
Churchill China plc
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Today on: 020 7466 5000
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Andrew Roper/David Taylor
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thereafter on: 01782 577566
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Buchanan Communications
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Tel No: 020 7466 5000
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Tim Anderson/Lisa Baderoon/Rebecca Skye Dietrich
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Brewin Dolphin Investment Banking
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Tel No: 0845 270 8610
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Andrew Emmott
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CHAIRMAN'S STATEMENT
INTRODUCTION
I am pleased to report that 2008 was a year of good performance, with respectable profitability, positive cash flows and continued progress against key strategic targets. This was a sound performance against the back drop of a deteriorating economic environment and weakening consumer demand. Churchill China has been in a stronger position than many of our peer group due to our balanced business of hospitality and retail accounts, our strong balance sheet, tight control of our cost base and effective working capital management.
FINANCIAL REVIEW
Group revenues fell by 11% to £42.0m (2007: £46.9m) reflecting a lower demand in many of our important hospitality markets against strong 2007 comparatives and reduced sales in our retail division as we withdrew from certain low contribution business.
Group operating profit before exceptional items was £2.8m (2007: £3.2m) and our pre-tax profit before exceptional items was 17% lower at £3.4m (2007: £4.0m).
Overall margins were maintained at close to 2007 levels despite the fall in sales, reflecting a better mix of business across the Group, benefits from our continuing investment programme and good cost control.
Group operating profit after exceptional items was £2.8m (2007: £4.0m). Pre tax profit after exceptional items was £3.4m (2007: £4.8m) 2007 comparatives included a one off benefit relating to the disposal of land.
Adjusted earnings per share decreased by 16% to 22.2p (2007: 26.5p). Basic earnings per share, including exceptional items, were 13.8p (2007: 33.8p).
Our tax charge for the year includes a one off provision for deferred tax of £919,000 which has been treated as exceptional. This relates to the phasing out of Industrial Buildings Allowances enacted in the Finance Act 2008.
We continued our strong record of cash generation from operations. Overall cash balances remain healthy at £7.7m (2007: £11.4m), the reduction reflecting strategic investment of £4.6m in capital expenditure (principally our new warehouse) and some increase in working capital as we expanded inventory holdings.
DIVIDEND
In the light of the respectable performance of the business in a demanding year, the Board is pleased to recommend a maintained final dividend of 9.2p per share. Together with the interim dividend paid last October, this gives a total dividend declared in respect of 2008 of 14.0p compared to 13.7p for 2007. Our record of profitability and cash generation allows us to provide a real return to investors and we will continue to manage our dividend policy to deliver long term shareholder value. The dividends declared in 2008 were covered 1.6 times by adjusted earnings per share.
Attractive real shareholder returns are an important objective of the Board but total shareholder returns in 2008 were depressed by the sharp contraction in the share price of not just your Company but equity markets as a whole. Over the last five years Churchill has delivered an overall return of 33%, well in excess of the average of the AIM market.
OPERATIONAL REVIEW
HOSPITALITY
Sales to hospitality customers were lower at £25.0m (2007: £28.6m) reflecting soft demand in most markets throughout the year, particularly the UK, where sales were £16.3m (2007: £18.9m). As a result the net contribution was lower at £3.7m (2007: £4.9m). Churchill's recurring replacement sales to regular customers were resilient throughout the year but there were fewer of the new installations in pubs, hotels and restaurant chains which enhanced 2007's result. There was also markedly lower banqueting activity in the final quarter of the year. The UK Treasury has concluded that the UK as a whole experienced sharp destocking in the final quarter of 2008 which contributed to the contraction of GDP and the ceramics industry was not immune.
Total export sales at £8.7m (2007: £9.7m) reflected weaker performance in Spain and the USA where the deteriorating economic environment adversely affected both capital spending by our customers and lower eating out by the consumer.
We are continuing to develop our sales and marketing capabilities in target export markets to ensure we make the most of available opportunities which ranged in 2008 from the Caribbean to Turkey, Central Europe and the UAE.
Our core super vitrified and fine china dinnerware ranges retain their superior performance and we are continuing to work closely with end users, professional chefs and our distribution partners to identify requirements and impress with our value proposition. Churchill has a talented team of sales, marketing, design and product development executives focused on the needs of a diverse range of customers from public and private sector accounts. It is always pleasing to receive new orders from customers for a new product designed and developed specifically for their requirements.
RETAIL
Revenues from the sales of our wide ranging retail product portfolio, which are almost all outsourced, were £17.0m (2007: £18.3m) with the decline being in relatively unattractive volume channels. This resulted in a substantially improved net contribution before central costs of £1.7m (2007: £1.1m).
In my last annual report I stated that a key objective for 2008 was to increase margins and build our middle market 'Queens' and related business with department stores and independent retailers. This plan has been pursued with some success and we are acquiring listings and generating sales in major retailers including John Lewis, Debenhams, House of Fraser and others, together with over 100 new independent accounts. We expect further material progress in 2009 in this sector of the market.
Another key element of our retail strategy has been to broaden our range of top quality license partnerships which include Disney, Sanderson and Cath Kidston. We aim to reflect the full range of lifestyles within our license portfolio including entertainment, fashion and celebrity alongside classic brands and we believe that this reflects the diversity of consumer taste. These licensed product ranges coupled with a top quality design team, professional sales and logistics and deep retail experience has enabled us to grow sales in key accounts despite the well reported slow down in the High Street.
These circumstances create considerable opportunities for your Group given its relative strength and diversity and we have noted market share shifting to Churchill as customers re-evaluate their core suppliers.
This core business capability has been reflected most recently in our securing a new partnership with Jamie Oliver. Jamie Oliver's ability to inspire the public and his honest and enthusiastic approach is a perfect fit with Churchill China's brand values.
We achieved important performance objectives in 2008 for our retail business and are optimistic of further progress this year despite more difficult economic conditions.
MANUFACTURING, TECHNICAL AND LOGISTICS
During 2008 we continued to implement key cost reduction and manufacturing efficiency initiatives. In the second half of the year, we successfully consolidated our remaining Alchemy fine china production into the Marlborough site, thus completing the rationalisation programme centralising our production on a single modern and efficient site.
This move, together with the benefit of the new fast fire kiln and lower output levels, allowed Churchill to absorb a considerable portion of the inflated gas and electricity price rises which impacted the business in 2008.
Site consolidation has brought significant efficiencies within our manufacturing operations and has allowed us to focus resource on value creating activities, developing new products and processes, rather than managing a disparate production base. We expect to deliver further benefits from this in the medium term.
During 2008 we incurred extra warehousing and inter site transport costs on a temporary basis by using the old Wheildon Road site. These costs will be reduced when the new warehouse is completed in May 2009.
CAPITAL EXPENDITURE
The Group has invested significantly during the year in support of our long term strategic objectives of delivering a market leading service to our customers and value to our shareholders.
I have already mentioned the £1.5m project to consolidate our Alchemy manufacturing on one site. During the second half of 2008 we commenced work on a new state of the art high bay warehouse large enough to accommodate 12,500 pallets which will enhance substantially our flexibility to support both our retail and hospitality clients, at a total cost of £4m. Once completed, all operations will be at our Marlborough site and the Whieldon Road facility will be vacated and sold.
Our other major initiative during 2008 was to fundamentally re-evaluate and upgrade our management systems to meet the needs of an international manufacturing and logistics business. After months of preparation, we selected a partner to implement a major ERP system which should be operational in the business in the second half of 2009. The total spend, which fell mostly in the second half of 2008, will be £0.8m. We envisage considerable operational efficiency benefits throughout the business once the project is completed.
OUTSOURCING
The last 12 months has seen an unprecedented number of factory closures in China and continued sterling weakness has put the Churchill buying team under pressure to ensure that these events have not impacted on customers or affected service and quality.
There has been a large scale reduction in the plethora of importers of housewares product. Only those that add value, are professionally organised and well financed have survived. Major retailers prefer to work with reliable suppliers capable of delivering well designed, ethically produced goods on schedule.
The UK outsourcing team is a good blend of graduates and seasoned buyers. We have long standing relationships with many of our suppliers at Director level and unlike general wholesaler/importers our technical and production experts are able to offer them constructive consultancy and real assistance to improve manufacturing efficiencies and ensure improved quality and cost.
Our US$ sales are an approximate match for our US$ purchases but in a harsh trading environment there is considerable pressure on outsource departments to buy more competitively without sacrificing quality and delivery assurance.
PEOPLE
Churchill is very fortunate to have such a dedicated and skilled workforce, many of whom are long serving and following in the footsteps of other family members who pursued careers with us over the passing decades. A special mention should made of Gordon Stephenson who worked for Churchill for a record 57 years and who retired in August 2008 but sadly died in February 2009.
Health and Safety in the working environment is a top priority in all areas of the business. We believe that adherence to legislation alone is not sufficient and that management and operatives share a common responsibility for the safety of themselves and others. Our role is to encourage a culture of Health and Safety, but there is no substitute for training and discipline.
For a comparatively small company Churchill has serious ambitions in terms of training and qualifications: Over 50% of all operatives have occupational NVQs and the target for 2009 is 90%. We have a thriving graduate recruitment programme with over 50 graduates employed throughout the business. Senior managers are actively encouraged and sponsored to study for business and other qualifications.
PROSPECTS
Despite the prevailing economic circumstances, we have performed in line with our expectations in the first three months of 2009 with Group sales marginally ahead of the corresponding period in 2008. Our retail business has started well and sales will be enhanced later this year with the impact of the new Jamie Oliver license which we secured in February. This license is very exciting for our business and opens up a range of opportunities on a worldwide basis.
Demand for hospitality products is marginally behind last year in the traditionally quiet first quarter. It is not unreasonable to mirror many in the industry and state trading conditions for the rest of 2009 are unpredictable. However, our market leading position, recurring revenues and strong balance sheet is attractive to our customer base and distribution partners and provides a basis of confidence for a sound performance.
We will continue to improve efficiency and keep costs and working capital tightly managed. The executive management team is both hugely experienced and conservative by nature and we are confident in our future prospects.
Jonathan Sparey
Chairman
31st March 2009
Churchill China plc
Consolidated Income Statement
for the year ended 31 December 2008
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Audited Year to |
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Audited Year to |
||||
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31 December 2008 |
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31 December 2007 |
||||
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|
|
|
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|
|
|
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Before |
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|
|
Before |
|
|
|
|
Exceptional |
Exceptional |
|
|
Exceptional |
Exceptional |
|
|
|
items |
Items |
Total |
|
items |
Items |
Total |
|
Note |
£000 |
£000 |
£000 |
|
£000 |
£000 |
£000 |
|
|
|
|
|
|
|
|
|
Revenue |
|
41,969 |
- |
41,969 |
|
46,930 |
- |
46,930 |
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|
|
|
|
|
|
|
|
Operating profit before exceptional items |
2 |
2,804 |
- |
2,804 |
|
3,230 |
- |
3,230 |
Exceptional items |
3 |
- |
- |
- |
|
- |
798 |
798 |
|
|
|
|
|
|
|
|
|
Operating profit after exceptional items |
2 |
2,804 |
- |
2,804 |
|
3,230 |
798 |
4,028 |
|
|
|
|
|
|
|
|
|
Share of results of associated company |
|
(71) |
- |
(71) |
|
120 |
- |
120 |
Finance income |
4 |
658 |
- |
658 |
|
730 |
- |
730 |
Finance cost |
|
(29) |
- |
(29) |
|
(36) |
- |
(36) |
|
|
|
|
|
|
|
|
|
Profit before income tax |
|
3,362 |
- |
3,362 |
|
4,044 |
798 |
4,842 |
|
|
|
|
|
|
|
|
|
Income tax expense |
5 |
(938) |
(919) |
(1,857) |
|
(1,147) |
- |
(1,147) |
|
|
|
|
|
|
|
|
|
Profit for the period |
|
2,424 |
(919) |
1,505 |
|
2,897 |
798 |
3,695 |
|
|
|
|
|
|
|
|
|
Attributable to: |
|
|
|
|
|
|
|
|
Equity holders of the parent |
|
2,424 |
(919) |
1,505 |
|
2,897 |
798 |
3,695 |
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|
|
|
|
|
|
|
|
|
|
|
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Pence per share |
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|
|
Pence per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per ordinary share |
6 |
|
|
13.8 |
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|
|
33.8 |
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|
|
|
|
|
|
|
|
Diluted basic earnings per ordinary share |
6 |
|
|
13.7 |
|
|
|
33.6 |
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|
|
|
|
|
|
|
|
Adjusted earnings per share figures excluding the effect of exceptional items are shown in notes 3 & 5 |
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All the above figures relate to continuing operations |
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Churchill China plc
Consolidated Balance Sheets
As at 31 December 2008
|
Audited |
Audited |
|
31 December |
31 December |
|
2008 |
2007 |
|
£000 |
£000 |
|
|
|
Assets |
|
|
Non Current Assets |
|
|
Property, plant and equipment |
13,889 |
10,813 |
Intangible assets |
397 |
34 |
Investment in associates |
743 |
814 |
Deferred income tax assets |
586 |
318 |
|
15,615 |
11,979 |
|
|
|
Current Assets |
|
|
Inventories |
8,477 |
6,660 |
Trade and other receivables |
8,631 |
9,606 |
Cash and cash equivalents |
7,738 |
11,440 |
|
24,846 |
27,706 |
|
|
|
Total Assets |
40,461 |
39,685 |
|
|
|
Liabilities |
|
|
Current Liabilities |
|
|
Trade and other payables |
(7,466) |
(7,779) |
Current income tax liabilities |
(689) |
(493) |
|
(8,155) |
(8,272) |
|
|
|
Non current Liabilities |
|
|
Deferred income tax liabilities |
(1,640) |
(592) |
Retirement benefit obligations |
(2,055) |
(1,090) |
|
|
|
Total non current liabilities |
(3,695) |
(1,682) |
|
|
|
Total liabilities |
(11,850) |
(9,954) |
|
|
|
Net Assets |
28,611 |
29,731 |
|
|
|
Capital and reserves attributable to equity holders of the Company |
|
|
Issued share capital |
1,095 |
1,095 |
Share premium account |
2,332 |
2,332 |
Treasury shares |
(138) |
- |
Retained earnings |
24,086 |
25,124 |
Other reserves |
1,236 |
1,180 |
|
28,611 |
29,731 |
Churchill China plc
Statement of recognised income and expenses
for the year ended 31 December 2008
|
Audited |
Audited |
|
Year to |
Year to |
|
31 December |
31 December |
|
2008 |
2007 |
|
£000 |
£000 |
|
|
|
Net of tax |
|
|
Actuarial (loss) / gain on retirement benefit obligations |
(1,022) |
1,655 |
Currency translation differences |
43 |
3 |
Impact of change in UK tax rate on deferred tax |
- |
26 |
|
|
|
Net income recognised directly in equity |
(979) |
1,684 |
Profit for the year |
1,505 |
3,695 |
|
|
|
Total recognised income for the period |
526 |
5,379 |
|
|
|
Attributable to Equity holders of the Company |
526 |
5,379 |
Churchill China plc
Cash Flow Statement
for the year ended 31 December 2008
|
|
|
Audited |
Audited |
|
|
|
Year to |
Year to |
|
|
|
31 December |
31 December |
|
|
|
2008 |
2007 |
|
Notes |
|
£000 |
£000 |
|
|
|
|
|
Cash generated from operations |
7 |
|
2,502 |
6,307 |
Interest received |
|
|
444 |
491 |
Interest paid |
|
|
(29) |
(14) |
Income tax paid |
|
|
(483) |
(225) |
|
|
|
|
|
Net cash from operating activities |
|
|
2,434 |
6,559 |
|
|
|
|
|
Investing activities |
|
|
|
|
Purchases of property, plant and equipment |
|
|
(4,199) |
(1,413) |
Proceeds on disposal of property, plant and equipment |
|
|
107 |
1,107 |
Purchases of intangible assets |
|
|
(382) |
(25) |
Dividends received |
|
|
- |
103 |
|
|
|
|
|
Net cash used in Investing activities |
|
|
(4,474) |
(228) |
|
|
|
|
|
Financing activities |
|
|
|
|
Issue of ordinary shares |
|
|
22 |
71 |
Purchase of treasury shares |
|
|
(160) |
- |
Dividends paid |
|
|
(1,531) |
(1,375) |
|
|
|
|
|
Net cash used in financing activities |
|
|
(1,669) |
(1,304) |
|
|
|
|
|
Net (decrease)/increase in cash and cash equivalents |
|
|
(3,709) |
5,027 |
|
|
|
|
|
Cash and cash equivalents at the beginning of the year |
|
|
11,440 |
6,410 |
|
|
|
|
|
Exchange gains on cash and cash equivalents |
|
|
7 |
3 |
|
|
|
|
|
Cash and cash equivalents at the end of the year |
|
|
7,738 |
11,440 |
|
|
|
|
|
|
|
|
|
|
1. BASIS OF PREPARATION
The Group's financial statements for the period to 31 December 2008 have been audited and an unqualified audit report has been issued. The preliminary financial statements represent extracts of those audited accounts, but do not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985.
The Group's financial statements have been prepared in been prepared in accordance with International Financial Reporting Standards as adopted by the European Union (IFRSs as adopted by the EU), IFRIC Interpretations and the Companies Act 1985/2006 applicable to companies reporting under IFRS. The consolidated financial statements have been prepared under the historical cost convention, as modified by the revaluation of land and buildings, available-for-sale financial assets, and financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss.
The preliminary financial statements for the year to 31 December 2008 have been prepared in accordance with the accounting policies stated in the Group's financial statements for the year ended 31 December 2007.
2. Segmental analysis
for the year ended 31 December 2008
|
Hospitality |
Retail |
Unallocated |
Total |
|
£000 |
£000 |
£000 |
£000 |
2008 |
|
|
|
|
|
|
|
|
|
Revenue |
24,952 |
17,017 |
- |
41,969 |
|
|
|
|
|
Contribution to group overheads |
3,668 |
1,709 |
- |
5,377 |
Group overheads |
|
|
(2,573) |
(2,573) |
|
|
|
|
|
Operating profit |
|
|
(2,573) |
2,804 |
|
|
|
|
|
Share of results of associate company |
|
|
(71) |
(71) |
Finance income /cost |
|
|
629 |
629 |
|
|
|
|
|
Profit before income tax |
|
|
|
3,362 |
|
|
|
|
|
Income tax expense |
|
|
|
(1,857) |
|
|
|
|
|
Profit for the period |
|
|
|
1,505 |
|
|
|
|
|
|
|
|
|
|
2007 |
|
|
|
|
|
|
|
|
|
Revenue |
28,576 |
18,354 |
- |
46,930 |
|
|
|
|
|
Contribution to group overheads |
4,909 |
1,112 |
- |
6,021 |
Group overheads |
|
|
(2,791) |
(2,791) |
Exceptional items |
|
|
798 |
798 |
|
|
|
|
|
Operating profit |
|
|
(1,993) |
4,028 |
|
|
|
|
|
Share of results of associate company |
|
|
120 |
120 |
Finance income /cost |
|
|
694 |
694 |
|
|
|
|
|
Profit before income tax |
|
|
|
4,842 |
|
|
|
|
|
Income tax expense |
|
|
|
(1,147) |
|
|
|
|
|
Profit for the period |
|
|
|
3,695 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3. Exceptional Items
As stated in the Group's accounting policies the Directors regard certain material items as exceptional. The analysis of exceptional items is as follows:
|
Audited |
Audited |
(Charge) / credit |
Year to |
Year to |
|
31 December |
31 December |
|
2008 |
2007 |
|
|
|
Profit on disposal of property, plant and equipment |
- |
798 |
Deferred taxation - IBAs |
(919) |
- |
|
(919) |
798 |
|
|
|
Please refer to note 5 for disclosures relating to the exceptional deferred taxation provision made in 2008.
The profit on disposal recognised in 2007 is in relation to the sale of surplus land at Sandyford. A taxation charge of £nil has been charged in the Group's overall tax charge in the year in respect of this disposal. Net receipts of £1,042,000 were received in respect of this disposal during 2007.
4. Finance Income / cost
|
Audited |
Audited |
|
Year to |
Year to |
|
31 December |
31 December |
|
2008 |
2007 |
|
|
|
Interest income and short term deposits |
444 |
491 |
Interest on pension scheme |
214 |
239 |
Finance income |
658 |
730 |
|
|
|
Other interest |
(29) |
(14) |
Impairment of available for sale financial assets |
- |
(22) |
Finance costs |
(29) |
(36) |
|
|
|
Net finance income |
629 |
694 |
5. Income tax expense
|
Audited |
Audited |
|
Year to |
Year to |
|
31 December |
31 December |
|
2008 |
2007 |
|
|
|
Current tax |
680 |
528 |
Deferred tax - origination and reversal of temporary differences |
258 |
626 |
Deferred tax - origination and reversal of temporary differences - exceptionals |
919 |
- |
Deferred tax - impact of change in UK tax rates |
- |
(7) |
|
1,857 |
1,147 |
During the year, the UK tax regime in relation to Industrial Buildings Allowances (IBAs) was changed following the enactment of certain provisions contained in the Finance Act 2008. As a result IBAs will be phased out in the period 2008 to 2011. The Group has provided £919,000 (2007: £nil) for the deferred tax liability arising from this change and the charge has been treated as exceptional. There was no cash outflow in relation to this change in the year. 6. Earnings per ordinary share
The basic earnings per ordinary share is based on the profit on ordinary activities after taxation and on 10,923,038 (2007: 10,933,561) ordinary shares, being the weighted average number of ordinary shares in issue during the year.
The adjusted earnings per ordinary share is based on the profit on ordinary activities after taxation and adjusted to take into account exceptional items.
|
Audited |
Audited |
|
Year to |
Year to |
|
31 December |
31 December |
|
2008 |
2007 |
|
Pence per |
Pence per |
|
share |
share |
|
|
|
Basic earnings per share |
13.8 |
33.8 |
Adjustments: |
|
|
Profit on disposal of property, plant and equipment |
- |
(7.3) |
Deferred taxation - industrial buildings allowance |
8.4 |
- |
|
|
|
Adjusted earnings per share |
22.2 |
26.5 |
|
|
|
The diluted basic earnings per ordinary share is based on the profit on ordinary activities after taxation and on 10,965,990 (2007: 11,007,289) ordinary shares, being the weighted average number of ordinary shares in issue during the year of 10,923,038 (2007: 10,933,561) increased by 42,952 (2006: 73,728) shares, being the weighted average number of ordinary shares which would have been issued if the outstanding options to acquire shares in the Group had been exercised at the average price during the year.
The diluted adjusted earnings per ordinary share is based on the profit on ordinary activities after taxation and adjusted to take into account exceptional items.
|
Audited |
Audited |
|
Year to |
Year to |
|
31 December |
31 December |
|
2008 |
2007 |
|
Pence per |
Pence per |
|
share |
share |
|
|
|
Basic earnings per share |
13.7 |
33.6 |
Adjustments: |
|
|
Profit on disposal of property, plant and equipment |
- |
(7.3) |
Deferred taxation - industrial buildings allowance |
8.4 |
- |
|
|
|
Adjusted earnings per share |
22.1 |
26.3 |
|
|
|
7. Reconciliation of operating profit to cash generated from operations
|
Audited |
Audited |
|
Year to |
Year to |
|
31 December |
31 December |
|
2008 |
2007 |
|
£000 |
£000 |
Cash generated from operations |
|
|
|
|
|
Operating profit |
2,804 |
4,028 |
Adjustments for |
|
|
Depreciation |
1,070 |
1,002 |
Profit on disposal of property, plant and equipment |
(35) |
(719) |
Charge for share based payment |
23 |
3 |
Decrease in retirement benefit obligations |
(240) |
(240) |
Changes in working capital: |
|
|
Inventory |
(1,817) |
197 |
Trade and other receivables |
1,021 |
505 |
Trade and other payables |
(324) |
1,531 |
|
|
|
Cash generated from operations |
2,502 |
6,307 |
8. Dividend
The final dividend, which has not been provided for, has been calculated on 10,902,476 ordinary shares, being those in issue at 31 December 2008 qualifying for dividend and at a rate of 9.2p per 10p ordinary share. The dividend will be paid, subject to approval at the Company's Annual General Meeting, on 27 May 2009 to shareholders on the register at 24 April 2009.