Interim Results
MFI Furniture Group PLC
27 July 2000
MFI FURNITURE GROUP Plc
INTERIM RESULTS FOR THE 24 WEEKS ENDED 17 JUNE 2000
MFI Furniture Group Plc, the UK's largest manufacturer and retailer of
kitchen and bedroom furniture, announces its interim results for the 24 weeks
ended 17 June 2000.
Financial Highlights
* Turnover on continuing operations up 17% to £435.5m (H1 1999:
£373.1m)
- UK Retail up 15% to £337m
- Howden Joinery up 47% to £58.1m
- France level in local currency at £38.6m
* Pre-tax profit up 37% to £34.7m (H1 1999: £25.3m) before £19.4m
benefit from exceptional items
* On track to achieve £8m cost savings targeted for full year
* Pre-exceptional basic earnings per ordinary share up 37% to
4.19p (H1 1999: 3.06p)
- Reported earnings per share up 129% to 7.01p after
exceptionals
Interim dividend increased by 29% to 0.9 pence per share (H1
1999: 0.7p)
Strong cash flow with net cash of £96m as at 17 June 2000
Strategic Priorities
* Extensive review of market position and branding undertaken
from 10,000-strong customer sample
* Continuing focus on operational improvements and programme of
overhead reduction
* Roll-out of initiatives building on core business turnaround in
UK kitchens and bedrooms
* Substantial store opening programme planned to achieve full UK
geographic coverage:
- Up to 20 new out-of-town furniture centres
- Two new pilot high street stores opening in Greater London
- Conran Design Group appointed to develop new look for stores
* Agreement to sell Hygena kitchens in Currys stores
John Hancock, Chief Executive, said:
'Today we are reporting on an encouraging first half, showing a strong
recovery in sales and profits.
'The aggressive turnaround of MFI is continuing and we are taking some very
practical actions to unlock value. We are working hard to achieve
operational improvements throughout the business and are also implementing
plans to drive organic growth which are both low risk and build on the
Group's existing strengths and skills. Through these, I am confident that
MFI's transformation can be achieved.'
Contacts:
MFI Furniture Group Plc
John Hancock, Chief Executive 020 8913 5319
Brunswick Group Limited
Susan Gilchrist / Charlotte Elston 020 7404 5959
William Cullum / Katya Wright
CHAIRMAN'S STATEMENT
__________________________________________________________________
I am pleased to report on an encouraging performance for the first 24 weeks
of 2000. Following the change to our year-end, all financial comparisons are
based on pro forma data for the same period in 1999.
Sales were very robust, particularly in the critical first quarter. Turnover
on continuing operations rose by 17% to £435.5m (£373.1m). On a pre-
exceptional basis, operating profit on continuing operations increased by 18%
to £32.1m and pre-tax profit rose 37% to £34.7m. Excluding the effect on
rentals of the various sale and leaseback arrangements last year, operating
profit would have been £3.8m higher, an increase of 32% on last year's
operating profit from continuing operations.
In view of this result, the Board has declared an interim dividend of 0.9p
per share, which will be paid on 27 October 2000 to members on the register
at 15 September 2000. This is in line with our objective of maintaining an
acceptable level of dividend cover while providing shareholders with dividend
growth, and represents an increase of 29% on the previous year.
OPERATIONS
All parts of the UK business contributed to solid sales growth. UK retail
sales rose by 15% to £337m and Howden Joinery by 47% to £58.1m with like-for-
like sales rising by 29%. Howden Joinery continues to show excellent
potential, and we shall open our 150th outlet in September. Following two
years of strong growth, sales in France were level in local currency, but
fell by 1% to £38.6m in terms of sterling.
In the MFI retail business, we have actively driven a wide-ranging programme
of business improvement initiatives. Our Quick Stock programme has now
introduced smaller and lower-priced items into 112 retail branches. We have
negotiated a number of Group-wide purchasing discounts with our major
finished goods and raw materials suppliers. We have also made significant
improvements in the efficiency and productivity of our logistics operation
which will produce cost savings in the second half of the year.
The Chiswick store - our pilot town-centre outlet - continued to exceed
expectations, with sales per square foot running at twice the Group average.
We shall continue to test this new retail model carefully, and will open
further shops in Staines (August) and Clapham (October).
FINANCIAL REVIEW
Gross margins have been held within our target range of 54 - 55%.Costs
continue to be controlled and we expect to meet our targeted £8m reduction in
overheads in the course of 2000. Payroll costs increased from £80.3m to
£97.3m on a continuing operations basis, due principally: to the expansion of
Howden, which held its payroll steady as a percentage of sales; to
performance bonuses and increased sales commission arising from an excellent
first quarter for MFI; and to associated increased staff costs for
manufacturing.
The Group generated an exceptional profit of £19.4m before tax. Following a
major review of our business we have decided to consolidate our distribution
arrangements at the purpose-built Northampton centre, which enables us to
write back some £12.7m of provisions made in the 1998 accounts. We also
realised a £11.2m profit on the sale of our packaging business. Against
this, we incurred non-recurring costs of £4.0m associated with structural
change and the reorganisation of the supply chain. We have also provided
£0.5m in connection with the disposal of our pilot operation in Spain.
The Group's cash position has been dramatically improved over the period, due
to strong cash generation from trading and to the sale of our packaging
business and the remaining three Home Delivery Centres. Against net
borrowings at last June of £110m, we now have a positive net cash balance of
some £100m, giving us a sound base on which to invest for the future.
Capital expenditure for 2000 is forecast to be no more than £30m.
STRATEGIC DEVELOPMENT
We have undertaken a thorough strategic review of our market, our customers,
our brands and our product portfolio. The result is a two-phase plan which
will enable us to drive MFI forward as an integrated business over the next
five years.
1. Core Business Turnaround
In the first phase, we are concentrating on unlocking the very considerable
potential within our existing business.
- Store Openings: we plan to achieve full national coverage for
our out-of-town MFI stores in the UK through a mixture of new openings
and relocations which will expand the number from 186 to around 220.
Subject to careful testing of the concept, we may open up to 45 smaller
town-centre outlets. We shall also expand our network in France towards
a planned 200 stores. At the same time, we shall focus on improving the
productivity of each outlet through a programme of refurbishment and
redesign.
- New Product Development: we shall also harness our existing
product development skills in order to achieve design leadership.
Continued improvement to our product offering and our customer service
will allow us to take full advantage of our control of every stage of
the value chain.
- Growing Howden Joinery: we shall continue to expand our trade
business, and plan to double the number of Howden Joinery outlets over
the next three years.
2. Development and Growth
A stronger financial and operating platform will provide the basis for the
second phase of our strategy, which will focus on developing new channels to
market, both as a retailer and as a manufacturer. I am pleased to announce
today that we have reached an agreement with Dixons Stores Group to operate
kitchen concessions in a number of Currys outlets over the next three years.
This is an exciting development which builds on MFI's strengths as the UK's
number one manufacturer and retailer of kitchens and bedrooms. Where we
identify profitable opportunities for MFI's own retail business, we shall
continue to add new product categories, aiming to replicate 1999's successes
in home office furniture.
In Howden Joinery, we are taking advantage of existing relations with
regional and local builders to pilot selling to the new-build market through
existing depots.
Our e-commerce web site was launched in August last year, generating sales
approaching £2m to date.
To date, we have deliberately concentrated our international efforts on the
French market. The continuing success in France will give us confidence to
look at other international options during 2001.
THE IMMEDIATE OUTLOOK
It is too early to forecast the outcome for the full year, although we have
had an encouraging first half. Sales in the UK business have been volatile in
recent months, and since last year's third and fourth quarters were
relatively strong it may be difficult to maintain comparable levels of
improvement in the second half.
We have made significant improvements to the Group's business over the last
year, and we believe that we are on course to deliver continued improvements
in performance.
Ian Peacock
Chairman
-------------------------------------------------------------------
KPMG
__________________________________________________________________
Independent review report by KPMG Audit Plc to MFI Furniture Group Plc
Introduction
We have been instructed by the Company to review the financial information
set out on pages (5) to (12) except for the pro forma financial information
and related pro forma notes and we have read the other information contained
in the interim report and considered whether it contains any apparent
misstatements or material inconsistencies with the financial information
reviewed by us.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The Listing
Rules of the Financial Services Authority require that the accounting
policies and presentation applied to the interim figures should be consistent
with those applied in preparing the preceding annual accounts except where
they are to be changed in the next annual accounts in which case any changes,
and the reasons for them, are to be disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin
1999/4: Review of Interim financial information issued by the Auditing
Practices Board. A review consists principally of making enquiries of Group
management and applying analytical procedures to the financial information
and underlying financial data and, based thereon, assessing whether the
accounting policies and presentation have been consistently applied unless
otherwise disclosed. A review is substantially less in scope than an audit
performed in accordance with Auditing Standards and therefore provides a
lower level of assurance than an audit. Accordingly we do not express an
audit opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications
that should be made to the financial information as presented for the 24
weeks ended 17 June 2000.
KPMG Audit Plc
Chartered Accountants
London
--------------------------------------------------------------------
CONSOLIDATED PROFIT AND LOSS ACCOUNT
24 weeks to
24 weeks to 19 June 1999
17 June 2000 Pro forma
------------------------ ----------------------
Total
Opera- Excep-
tions tional Con- Discon-
Pre- Items tinuing tinued
excep- Unau- Opera- Opera-
tional dited Total tions tions Total
Unau- (note Unau- Unau Unau- Unau-
Notes dited 3) dited dited dited dited
£m £m £m £m £m
£m
Turnover 2 435.5 - 435.5 373.1 12.0 385.1
Change in
stocks 13.7 - 13.7 (8.3) - (8.3)
Other operating
income 9.2 - 9.2 10.6 - 10.6
------ ------ ------ ------ ------ ------
458.4 - 458.4 375.4 12.0 387.4
------ ------ ------ ------ ------ ------
Raw materials
and consumables 211.4 - 211.4 158.6 3.7 162.3
Staff costs 97.3 (0.4) 96.9 80.3 2.4 82.7
Depreciation of
tangible fixed
assets 14.5 - 14.5 15.0 0.9 15.9
Other operating
charges 103.1 (7.8) 95.3 94.3 2.6 96.9
------ ------ ------ ------ ------ ------
426.3 (8.2) 418.1 348.2 9.6 357.8
------ ------ ------ ------ ------ ------
Operating
profit 2 32.1 8.2 40.3 27.2 2.4 29.6
Profit/(loss)
on disposal of
fixed assets 0.7 - 0.7 (0.7) - (0.7)
Profit on
disposal of
discontinued
operations - 11.2 11.2 - - -
------ ------ ------ ------ ------ ------
Profit on
ordinary
activities
before interest 32.8 19.4 52.2 26.5 2.4 28.9
------ ------
Net interest
receivable/
(payable) 1.9 - 1.9 (3.6)
------ ------ ------ ------
Profit before
taxation 2 34.7 19.4 54.1 25.3
Tax 4 (9.8) (2.6) (12.4) (7.1)
------ ------ ------ ------
Profit for the
financial
period 24.9 16.8 41.7 18.2
Dividends 5 (5.3) - (5.3) (4.2)
------ ------ ------ ------
Amount
transferred
to reserves 6 19.6 16.8 36.4 14.0
------ ------ ------ ------
Earnings per
share
Earnings per
10p
ordinary share 7 4.19p 2.82p 7.01p 3.06p
Diluted
earnings
per 10p
ordinary share 7 4.12p 2.78p 6.90p 3.06p
CONSOLIDATED PROFIT AND LOSS ACCOUNT cont
52 weeks to 1 January 2000
Pro forma
---------------------------------
Continuing Discon-
Operations tinued Total
Unaudited Operations Unaudited
Unaudited
Note £m £m
s £m
Turnover 2 770.9 26.0 796.9
Change in stocks 7.8 - 7.8
Other operating income 22.8 - 22.8
------- ------- -------
801.5 26.0 827.5
------- ------- -------
Raw materials and
consumables 355.4 8.5 363.9
Staff costs 173.0 5.5 178.5
Depreciation of
tangible fixed assets 33.5 1.9 35.4
Other operating charges 209.9 6.6 216.5
------- ------- -------
771.8 22.5 794.3
------- ------- -------
Operating profit 2 29.7 3.5 33.2
Profit/(loss) on 4
disposal of fixed
assets 4.1 0.1 .2
Profit on disposal of
discontinued
operations - - -
------- ------- -------
Profit on ordinary
activities before
interest 33.8 3.6 37.4
------- -------
Net interest
receivable/(payable) (8.2)
-------
Profit before taxation 2 29.2
Tax 4 (7.0)
-------
Profit for the
financial period 22.2
Dividends 5 (8.3)
-------
Amount transferred 6
to reserves 13.9
-------
Earnings per share
Earnings per 10p
ordinary share 7 3.73p
Diluted earnings per
10p ordinary share 7 3.73p
CONSOLIDATED BALANCE SHEET
As at As at As at
17 June 19 June 1 January
2000 1999 2000
Unaudited
Notes Unaudited Pro forma Audited
FIXED ASSETS £m £m £m
Tangible assets 280.9 456.3 315.6
Investments 11.2 8.0 9.2
------- ------- -------
292.1 464.3 324.8
------- ------- -------
CURRENT ASSETS
Stocks 105.7 85.1 92.6
Debtors 81.9 73.3 71.2
Investments 10 0.5 0.6 0.4
Cash at bank and
in hand 10 102.0 55.6 30.2
------- ------- -------
290.1 214.6 194.4
------- ------- -------
CREDITORS FALLING
DUE WITHIN ONE
YEAR
Borrowings 10 3.3 155.5 18.8
Other amounts 222.7 183.8 169.5
------- ------- -------
226.0 339.3 188.3
------- ------- -------
Net current
assets/ 64.1 (124.7) 6.1
(liabilities)
TOTAL ASSETS LESS
CURRENT
LIABILITIES 356.2 339.6 330.9
CREDITORS FALLING
DUE AFTER MORE
THAN ONE YEAR
Borrowings 10 3.3 11.3 3.8
Other amounts 0.6 0.8 0.8
------- ------- -------
3.9 12.1 4.6
------- ------- -------
PROVISIONS FOR
LIABILITIES AND
CHARGES 7.7 18.7 18.1
------- ------- -------
Net assets 344.6 308.8 308.2
------- ------- -------
CAPITAL AND
RESERVES
Called up share 59.5 59.5 59.5
capital
Share premium 6 43.9 43.9 43.9
account
Other reserves 6 18.2 15.3 17.0
Revaluation 6 43.4 111.8 44.3
reserve
Profit and loss 6 179.6 78.3 143.5
account
------- ------- -------
Equity 344.6 308.8 308.2
shareholders'
funds
------- ------- -------
CONSOLIDATED CASH FLOW STATEMENT
24 weeks to 24 weeks to 52 weeks
to
17 June 19 June 1 January
2000 1999 2000
Notes Unaudited Unaudited Unaudited
Pro forma Pro forma
£m £m £m
Cash inflow from
operating activities 8 66.1 41.9 39.0
Returns on investments
and servicing of finance 9 1.9 (3.2) (8.4)
Taxation 6.8 (17.7) (17.7)
Capital expenditure (net) 9 7.7 (12.2) 115.1
Proceeds from sale
of subsidiary 13.7 - -
Equity dividends paid (8.2) (4.3) (4.3)
------- ------- -------
88.0 4.5 123.7
Management of
liquid resources 9 (0.1) - 0.2
Financing 9 (16.1) 17.5 (127.0)
------- ------- -------
Increase/(decrease) in
cash in the period 71.8 22.0 (3.1)
------- ------- -------
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
Increase/(decrease) in
cash in the period 71.8 22.0 (3.1)
Cash movement on :
- debt and lease
financing 9 16.1 (17.5) 127.0
- cash flow from decrease
in liquid resources 0.1 - (0.2)
------- ------- -------
Change in net debt
resulting from cash flows 88.0 4.5 123.7
Effect of foreign
exchange rate changes 10 - - (0.3)
------- ------- -------
Movement in net debt
in the period 88.0 4.5 123.4
Net cash/(debt) at the
beginning of the period 10 7.6 (115.8) (115.8)
------- ------- -------
Net cash/(debt) at the
end of the period 10 95.6 (111.3) 7.6
------- ------- -------
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
24 weeks to 24 weeks to 52 weeks to
17 June 19 June 1 January
2000 1999 2000
Unaudited Unaudited Unaudited
Pro forma Pro forma
£m £m £m
Profit for the financial
period 41.7 18.2 21.0
Translation differences on
foreign currency
denominated net investments - (1.1) (0.4)
---------- ---------- ----------
Total recognised gains and
losses for the period 41.7 17.1 20.6
---------- ---------- ----------
RECONCILIATION OF MOVEMENTS IN EQUITY SHAREHOLDERS' FUNDS
24 weeks to 24 weeks to 52 weeks to
17 June 19 June 1 January
2000 1999 2000
Unaudited Unaudited Unaudited
Pro forma Pro forma
£m £m £m
Profit for the financial
period 41.7 7.1 20.6
Dividends (5.3) (4.2) (8.3)
---------- ---------- ----------
Retained profit for the
financial period 36.4 12.9 12.3
Equity shareholders' funds
at beginning of the period 308.2 295.9 295.9
---------- ---------- ----------
Equity shareholders' funds
at end of the period 344.6 308.8 308.2
---------- ---------- ----------
NOTES TO THE FINANCIAL STATEMENTS
______________________________________________________________
1 BASIS OF PREPARATION
Following the change in the financial year-end, pro forma consolidated
profit and loss accounts and segmental information have been provided for
the 24 week comparative period ended 19 June 1999 and the 52 weeks ended
1 January 2000 in order to provide a better understanding of the Group's
performance. The information, which is unaudited, has been derived from
previously published results and internal management accounts with
adjustments being made for the adoption of FRS12 and the change in sales
accounting policy. Exceptional items have been excluded from the
analysis and the dividend policy has been restated to reflect two equal
dividends of 0.7p per share in each half of the 1999 financial year. The
accounting policies are consistent with those applied to the audited
financial statements for the 36 weeks ended 1 January 2000.
These statements do not constitute statutory financial statements within
the meaning of Section 240 of the Companies Act 1985.The Group's full
financial statements for the 36 week period ended on 1 January 2000, on
which the auditors made an unqualified report, have been delivered to the
Registrar of Companies.
On 4 January 2000 Hygena Packaging was sold to La Rochette SA. The business
has therefore been shown as discontinued.
2 SEGMENTAL ANALYSIS
24 weeks to 17 June 2000
----------------------------
24 Weeks 52 Weeks
Before to to
Excep- Excep- 19 June 1 January
tional tional 1999 2000
items items Total Pro forma Pro forma
TURNOVER £m £m £m
UK - Retail 337.0 293.2 597.8
- Trade 58.1 39.4 95.9
France and Spain 38.6 39.0 73.5
Other operations 1.8 1.5 3.7
------- ------- -------
Continuing
Operations 435.5 373.1 770.9
Discontinued
Operations - 12.0 26.0
------- ------- -------
435.5 385.1 796.9
------- ------- -------
PROFIT BEFORE
TAXATION £m £m £m £m £m
UK - Retail 22.0 8.7 30.7 16.7 13.2
- Trade 5.5 - 5.5 4.6 8.9
France and Spain 4.5 (0.5) 4.0 5.6 7.1
Other operations 0.1 - 0.1 0.3 0.5
------- ------- ------- ------- -------
Continuing
Operations 32.1 8.2 40.3 27.2 29.7
Discontinued
Operations - - - 2.4 3.5
------- ------- ------- ------- -------
Total operating
profit 32.1 8.2 40.3 9.6 33.2
Profit on sale of
subsidiary - 11.2 11.2 - -
Profit/(Loss) on
disposal of fixed
assets 0.7 - 0.7 (0.7) 4.2
Net interest
receivable/
(payable) 1.9 - 1.9 (3.6) (8.2)
------- ------- ------- ------- -------
Profit before
taxation 34.7 19.4 54.1 25.3 29.2
------- ------- ------- ------- -------
NET ASSETS/
(LIABILITIES) £m £m £m
UK - Retail 196.0 346.9 232.0
- Trade 38.5 33.8 43.2
France and Spain 14.4 25.6 22.6
Other operations 0.9 17.3 10.7
------- ------- -------
249.8 423.6 308.5
Unallocated net
assets/
(liabilities) 94.8 (114.8) (0.3)
------- ------- -------
344.6 308.8 308.2
------- ------- -------
Manufacturing operating profit has been apportioned across the separate
divisions in proportion to the external sales of those divisions of in-house
manufactured product. This method of apportionment is revised from previous
years and is considered to be more appropriate as we develop towards a single
pricing structure.
Unallocated net assets/(liabilities) comprise balances in respect of
dividends, cash and borrowings.
The analysis of turnover by destination is not materially different to the
analysis of turnover by origin.
3 EXCEPTIONAL ITEMS
The exceptional items reflected in the Group profit and loss account arise
as follows:
£m
Re-occupation of Northampton Distribution Centre 12.7
Reorganisation of supply chain and structural change
costs (4.0)
Provision for disposal of Spanish operations (0.5)
-------
Total operating exceptionals 8.2
Sale of Hygena Packaging Limited 11.2
-------
Total exceptionals 19.4
-------
4 TAXATION
The taxation charge is calculated at 28% per cent on profit before
exceptional items (24 weeks to 19 June 1999 - 28%, 52 weeks to 1 January
2000 - 28%), being the estimated effective rate of taxation for the 52
weeks ending 30 December 2000.
5 DIVIDEND
The interim dividend will be paid on 27 October 2000 to shareholders on the
register of members at the close of business on 15 September 2000. The
shares will be quoted ex-dividend on 11 September 2000.
6 RESERVES
Share Profit and
premium Other Revaluation Loss
account Reserves reserve Account
£m £m £m £m
As at 1 January 2000 43.9 17.0 44.3 143.5
Retained profit for the
period - - - 36.4
Realised on disposal - - (0.9) 0.9
Amortisation of goodwill - 1.2 - (1.2)
------ -------- ------- -------
As at 17 June 2000 43.9 18.2 43.4 179.6
------- ------- ------- -------
7 EARNINGS PER SHARE
Pro forma
24 weeks to 17 June 2000 24 weeks to 19 June 1999
------------------------ -------------------------
Weighted Weighted
average average
number of Earnings number of Earnings
shares per shares per
Earning share Earnings share
s
£m m p £m m p
Basic earnings
per share (eps)
Earnings per 41.7 594.9 7.01 18.2 594.9 3.06
ordinary shares
Effect of
dilutive share
options - 9.8 0.11 - - -
------ ------ ------ ------ ------ ------
Diluted earnings
per share 41.7 604.7 6.90 18.2 594.9 3.06
------ ------ ------ ------ ------ ------
eps before
exceptional
items
Basic earnings
per share 41.7 594.9 7.01 18.2 594.9 3.06
Exceptional
items net of tax (16.8) - (2.82) - - -
------ ------ ------ ------ ------ ------
Basic eps pre
exceptional
items 24.9 594.9 4.19 18.2 594.9 3.06
------ ------ ------ ------ ------ ------
Diluted earnings
per share 41.7 604.7 6.90 18.2 594.9 3.06
Exceptional
items net of
tax (16.8) - (2.78) - - -
------ ------ ------ ------ ------ ------
Diluted eps pre
exceptional
items 24.9 604.7 4.12 18.2 594.9 3.06
------ ------ ------ ------ ------ ------
Pro forma
52 weeks to 1 January 2000
--------------------------------
Weighted
average
Earnings number of Earnings
shares per share
£m m p
Basic earnings per share (eps)
Earnings per ordinary shares 22.2 594.9 3.73
Effect of dilutive share
options - 0.8 -
------ ------ ------
Diluted earnings per share 22.2 595.7 3.73
------ ------ ------
eps before exceptional items
Basic earnings per share 22.2 594.9 3.73
Exceptional items net of tax - - -
------ ------ ------
Basic eps pre exceptional items 22.2 594.9 3.73
------ ------ ------
Diluted earnings per share 22.2 595.7 3.73
Exceptional items net of tax - - -
------ ------ ------
Diluted eps pre exceptional
items 22.2 595.7 3.73
------ ------ ------
8 CASH FLOW STATEMENT
Reconciliation of profit on ordinary activities before interest to
operating cash flows :
24 weeks 24 weeks 52 weeks
to to to
17 June 19 June 1 January
2000 1999 2000
Pro forma Pro forma
£m £m £m
Profit on ordinary activities
before interest 52.2 28.9 37.4
Depreciation charge 14.5 15.9 35.4
Amortisation of fixed asset
investments 0.2 - 0.4
Profit on disposal of
discontinued operations (11.2) - -
(Profit)/loss on sale of tangible
fixed assets (0.7) 0.7 (4.2)
(Increase)/decrease in stocks (13.9) 7.8 0.3
Increase in debtors (23.4) (25.5) (23.4)
Increase/(decrease) in creditors
and provisions 48.4 14.1 (6.9)
---------- ---------- ----------
Net cash inflow from operating
activities 66.1 41.9 39.0
---------- ---------- ----------
9 ANALYSIS OF CASH FLOWS FOR HEADINGS NETTED IN THE CASH FLOW
STATEMENT
24 weeks 24 weeks 52 weeks
to to to
17 June 19 June 1 January
2000 1999 2000
Pro forma Pro forma
£m £m £m
Returns on investments and
servicing of finance
Interest received 1.9 - -
Interest paid - (3.2) (8.4)
---------- ---------- ----------
Inflow/(outflow) on investments
and servicing of finance 1.9 (3.2) (8.4)
---------- ---------- ----------
Capital expenditure and
financial investment
Payments to acquire fixed
assets investments (2.2) - (1.6)
Payments to acquire tangible
fixed assets (13.5) (16.4) (30.3)
Receipts from sales of tangible
fixed assets 23.4 4.2 147.0
---------- ---------- ----------
Inflow/(outflow) for capital
expenditure and financial
investment 7.7 (12.2) 115.1
---------- ---------- ----------
Cash (outflow)/inflow from
liquid resources (0.1) 0.2 -
Financing
(Decrease)/increase in bank
finance (16.0) 17.5 (126.7)
Capital element of finance
lease rental payments (0.1) - (0.3)
---------- ---------- ----------
(Outflow)/inflow for financing (16.1) 17.5 (127.0)
---------- ---------- ----------
10 ANALYSIS OF NET DEBT
Cash
at Current Revol- Net Total
bank asset ving Short cash/ Fin- net
and in invest- credit term (borrow- ance cash/
hand ments facility loans ings) leases (debt)
£m £m £m £m £m £m £m
As at 2
January
1999 33.6 0.6 (130.0) (19.3) (115.1) (0.7) (115.8)
Cash flow 22.0 - (20.0) 2.5 4.5 - 4.5
------ ------ ------- ------ ------ ------ ------
- - - - - -
As at 19
June 55.6 0.6 (150.0) (16.8) (110.6) (0.7) (111.3)
1999
Cash flow (25.1) (0.2) 135.0 9.2 118.9 0.3 119.2
Exchange
movement (0.3) - - - (0.3) - (0.3)
------ ------ ------- ------ ------ ------ ------
As at 1
January
2000 30.2 0.4 (15.0) (7.6) 8.0 (0.4) 7.6
Cash flow 71.8 0.1 15.0 1.0 87.9 0.1 88.0
------ ------ ------- ------ ------ ------ ------
As at 17
June 2000 102.0 0.5 - (6.6) 95.9 (0.3) 95.6
------ ------ ------- ------ ------ ------ ------
11 SALE OF HYGENA PACKAGING LIMITED
Net assets £m £m
disposed of:
Fixed assets 11.0 Cash (net of expenses
of £1.5m) 14.0
Stocks 0.8 Cash sold with business (0.3)
Debtors 7.1 -------
Creditors (16.4) 13.7
------- -------
2.5
Profit on disposal 11.2
-------
13.7
-------
As announced on 15 December 1999 consideration amounted to £37.0m in cash and
assumed debt. This comprised £7.6m for the sale of land and buildings from
another subsidiary company, £13.9m of assumed debt and £15.5m for the sale of
the company.
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