Final Results

RNS Number : 5201H

Creightons PLC

20 June 2013

 



Creightons Plc

Preliminary announcement

For the year ended 31 March 2013

Chairman's statement

I am pleased to report that in 2012/13 we achieved another year of growth and consolidation, and that the consolidated Group pre-tax profit  for the year ended 31 March 2013  was £302,000 (2012: £223,000). This continued improvement in profits has been achieved despite the on-going tough trading environment with customers seeking improving value to offer the consumer.  In particular our private label ranges have faced increased price and promotion pressure from the big brands which has adversely affected sales volumes.  

To combat the effects of lower underlying demand we have successfully generated sales growth by introducing new customers and developing new product ranges. The new business generated over the past couple of years is more evenly spread through the year, virtually eliminating the seasonality that characterised the business in previous years.

Margins remain under pressure with customers seeking to recover lost margin.  We will continue our programme of managing costs and our product offering in order to be in a position to respond to customer pressure whilst maintaining our own profitability.

Financial results

Group sales this year at £17,326,000 are £993,000 (6%) higher than last year (2012: £16,333,000), continuing the upward growth in sales volumes we have been recording over the past three years. This year's growth has come from a combination of our own UK branded ranges, private label and contract manufacture, representing all three strands of our business. Much of this growth has been driven by new ranges and new customer listings for existing ranges with limited growth from on-going sales with existing customers.

Changes in product mix, particularly relating to new ranges, together with improved purchasing and production efficiencies have resulted in an increased gross margin percentage of 42.8%, an increase of 0.7% on last year (2012:  42.1%).  Administration costs, which include product research and development as well as sales promotion and product support, have risen as we invest in support and promotional activity to drive new sales opportunities.

Profit before tax and interest for the year of £333,000 (2012: £257,000) represents an increase of 30%. Lower average borrowings than in the previous period resulted in slightly lower interest costs of £31,000 (2012: £34,000).

Group profit after tax of £302,000 (2012: £223,000) therefore shows a further improved performance especially given the trading environment during the past year.  Diluted earnings per share rose from 0.37p in 2012 to 0.51p for 2013 as a result of the increased earnings. 

Net borrowings (bank overdraft and loans less cash at bank and in hand) at the year-end have increased by £142,000 to £874,000 (2012: £732,000). The main reason for the increase in borrowing is the higher working capital requirement at the end of the year.  Inventories have increased as we have invested in new ranges and continued our drive to support customers with 100% product availability.

Current year developments

The Group continues to develop and strengthen its branded portfolio.  This is being achieved through developing our own brand offering and developing relationships with the owners of existing brands, often through investing in existing brands when opportunities arise.

We are continuing to work hard to manage cost pressure through a combination of measures including managing customer prices, product re-engineering and enhancing our product portfolio with higher margin products.  We have continued to develop new sales opportunities to compensate for the decline in the previously significant Christmas gifts part of the business.

As we expected, our main private label customers have responded to the pressures in the current economic climate with value strategies resulting in sales opportunities which we have exploited through lower priced products which have offset lower sales levels on higher priced products.  Whilst we had anticipated that this would adversely affect margins, we have managed to counter this effect through a mix of continued cost control, increasing our branded product sales and margins and ensuring we seek value for money in product support, development and administration expenditure. We will continue to manage our overhead cost base and working capital requirements to ensure they are aligned with the anticipated sales levels of the Group whilst retaining the skills necessary to meet growth opportunities as they arise. We are undertaking a major review of our planning and purchasing procedures in order to continue to improve our stock turn whilst maintaining customer service levels and reduce investment in working capital.

As in previous years, your Board is continuing to seek opportunities to acquire brands or companies that would complement the existing businesses by offering synergies in manufacturing, sourcing and marketing due to similarities in product alignment, sourcing or outlets.

The board has considered whether to declare a dividend this year, but although we have seen a further increase in annual profits, it feels that it continues to be more appropriate to retain profits to help fund the continued investment in growth than to reduce available funds through dividend distribution.

I would like to take this opportunity to thank each and every one of the Group's employees for the hard work and effort they have put in over what has been a challenging year.

William McIlroy

Chairman, 20 June 2013

Consolidated income statement

		Year ended 31 March	Year ended 31 March
		2013	2012
	Note	£000	£000
Revenue		17,326	16,333
Cost of sales		(9,902)	(9,461)
Gross profit		7,424	6,872
Distribution costs		(763)	(686)
Administrative expenses		(6,328)	(5,929)
Operating profit		333	257
Finance costs		(31)	(34)
Profit before tax		302	223
Income tax expense		-	-
Profit for the period from continuing operations		302	223

Earnings per share

Basic	2	0.55p	0.41p
Diluted	2	0.51p	0.37p

The loss of the parent company was £3,000 (2012 - nil).

Consolidated statement of comprehensive income

		Year ended 31 March	Year ended 31 March
		2012	2011
		£000	£000
Profit for the period from continuing operations		302	223
Exchange differences on translating foreign operations		(22)	-
Total  comprehensive income  for the period attributable to the equity holders of the parent		280	223

Company statement of comprehensive income

		Year ended 31 March	Year ended 31 March
		2013	2012
		£000	£000
Loss for the period from continuing operations		(3)	-
Total  comprehensive income  for the period		(3)	-

Consolidated balance sheet

		31 March	31 March
		2013	2012
	Note	£000	£000
Non-current assets
Goodwill		343	346
Other intangible assets		295	262
Property, plant and equipment		525	556
		1,163	1,164
Current assets
Inventories		3,526	3,271
Trade and other receivables		2,811	3,040
Cash and cash equivalents		18	106
		6,355	6,417
Total assets		7,518	7,581
Current liabilities
Trade and other payables		2,219	2,604
Obligations under finance leases		19	19
Bank overdrafts and loans		892	838
		3,130	3,461
Net current assets		3,225	2,956
Non-current liabilities
Obligations under finance leases		48	67
		48	67
Total liabilities		3,178	3,528
Net assets		4,340	4,053
Equity
Share capital		545	545
Share premium account		1,231	1,231
Other reserves		38	38
Share-based payment reserve		51	44
Translation reserve		(55)	(33)
Retained earnings		2,530	2,228
Total equity attributable to the equity shareholders of the parent company		4,340	4,053

Consolidated statement of changes in equity

	Share capital	Share premium account	Other reserves (note 22)	Share-based payment reserve	Translation reserve	Retained earnings	Total equity
	£000	£000	£000	£000	£000	£000	£000
At 1 April 2011	543	1,229	38	30	(32)	2,005	3,813
Share issue	2	2	-		-	-	4
Exchange differences on translation of foreign operations	-	-	-	-	(1)	-	(1)
Additional provision	-	-	-	14	-	-	14
Net profit for the year	-	-	-	-	-	223	223
At 31 March 2012	545	1,231	38	44	(33)	2,228	4,053
Exchange differences on translation of foreign operations	-	-	-	-	(22)	-	(22)
Additional provision	-	-	-	7	-	-	7
Net profit for the year	-	-	-	-	-	302	302
At 31 March 2013	545	1,231	38	51	(55)	2,530	4,340

Consolidated cash flow statement

		Year ended 31 March	Year ended 31 March
		2013	2012
	Note	£000	£000
Net cash inflow from operating activities		306	339
Cash flow from investing activities
Purchase of property, plant and equipment		(97)	(308)
Expenditure on intangible assets and goodwill		(334)	(333)
Net cash used in investing activities		(431)	(641)
Cash flow from financing activities
Repayment of finance lease obligations		(19)	(18)
New finance lease		-	97
Proceeds of share issue		-	4
Increase in bank loans and invoice finance facilities		54	227
Net cash generated from  in financing activities		35	310
Net (decrease)/increase in cash and cash equivalents		(90)	8
Cash and cash equivalents at start of period		106	96
Effect of foreign exchange rate changes		2	2
Cash and cash equivalents at end of period		18	106

Notes to preliminary announcement

1    Business and geographic segments

For management purposes the Group reports operations from two operations one based in the United Kingdom and one based in North America. The Group's reportable segments under IFRS 8 are therefore as follows:

Revenue by segment

	Year ended 31 March 2013			Year ended 31 March 2012
	External revenue	Inter- segment revenue	Total segment revenue	External revenue	Inter- segment revenue	Total segment revenue
	£000	£000	£000	£000	£000	£000
United Kingdom	15,782	346	16,128	14,850	342	15,192
North America	1,544	-	1,544	1,483	-	1,483
Total	17,326	346	17,672	16,333	342	16,675

Profit by segment

	Year ended 31 March 2013			Year ended 31 March 2012
	United Kingdom	North America	Group	United Kingdom	North America	Group
	£000	£000	£000	£000	£000	£000
Segment results	1,017	129	1,146	905	115	1,020
Central costs			(813)			(763)
Operating profit			333			257
Finance costs			(31)			(34)
Profit for the period from continuing operations			302			223

The profit reported by each segment represents the profit earned before central management costs, including directors' remuneration, and finance costs.

Segment assets

		Year ended 31 March	Year ended 31 March
		2013	2012
		£000	£000
United Kingdom		7,037	6,858
North America		481	723
Total assets		7,518	7,581

1    Business and geographic segments (continued)

Segment liabilities

		Year ended 31 March	Year ended 31 March
		2013	2012
		£000	£000
United Kingdom		3,124	3,285
North America		54	243
Total liabilities		3,178	3,528

All of the Group's capital expenditure, depreciation and amortisation is within the United Kingdom segment.

The accounting policies for the reportable segment are the same as the Group's accounting policies described in the Group's financial statements for the year ended 31 March 2012.

2    Earnings per share

The calculation of the basic and diluted earnings per share is based on the following data:

		Year ended 31 March	Year ended 31 March
		2013	2012
		£000	£000
Earnings
Net profit attributable to the equity holders of the parent company		302	223

		Year ended 31 March	Year ended 31 March
		2013	2012
		Number	Number
Number of shares
Weighted average number of ordinary shares for the purposes of basic earnings per share		54,478,876	54,478,876
Effect of dilutive potential ordinary shares relating to share options		5,126,550	5,376,550
Weighted average number of ordinary shares for the purposes of diluted earnings per share		59,605,426	59,855,426

3.   Share capital

		Ordinary shares of 1p each
		2013		2012
		£000	Number	£000	Number
Issued and fully paid		545	54,478,876	545	54,478,876

The Company has one class of ordinary shares which carry no right to fixed income.

4. Notes to consolidated cash flow statement

		Year ended 31 March	Year ended 31 March
		2013	2012
		£000	£000
Profit from operations		333	257
Adjustments for:
Depreciation on property, plant and equipment		128	128
Goodwill impairment charge		3	-
Amortisation of intangible assets		301	236
Share based payment charge		7	14
		772	635
(Increase)  in inventories		(230)	(244)
Decrease/(increase) in trade and other receivables		235	(462)
Decrease)/increase in trade and other payables		(440)	444
Cash generated from operations		337	373
Interest paid		(31)	(34)
Cash inflow from operating activities		306	339

Cash and cash equivalents (which are presented as a single asset on the face of the balance sheet) comprise cash at bank and in hand.

5. Status of information

The financial information above, which was approved by the Board of Directors on 20 June 2013, does not constitute full accounts within the meaning of section 434 of the Companies Act 2006. The financial information presented above has been prepared in accordance with the accounting policies published in the financial statements for the year ended 31 March 2012.  The full financial statements for the year ended 31 March 2012, which contained an unqualified audit report under section 475 of the Companies Act 2006 and which did not make any statement under section 498 of the Companies Act 2006, have been delivered to the Registrar of Companies in accordance with section 441 of the Companies Act 2006.

The preliminary statement of results has been reviewed and agreed with the Company's auditor, Chantrey Vellacott DFK LLP, who have indicated that they will be giving an unqualified opinion in their report on the statutory financial statements.

Copies of the annual report and consolidated financial statements for the year ended 31 March 2013 will be made available to shareholders in due course.   Further copies will be available from the Company's registered office at 1210 Lincoln Road, Peterborough, PE4 6ND and on the company's website at www.creightons.com.

 

END

 

 

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