Half Yearly Results

RNS Number : 7635P

St. Ives PLC

31 March 2009

 



31 March 2009

ST IVES plc

Interim Results for the 26 weeks ended 30 January 2009

St Ives plc, the UK's leading printing group, announces interim results for the 26 weeks ended 30 January 2009.

Key Points

• Revenue £208.0m (2008**: £198.2m)

• Profit before tax £6.2m* (2008**: £12.4m)

• Profit from continuing operations before tax £4.4m (2008: £11.6m)

• Earnings per share from continuing operations 4.15p* (2008: 8.04p)

• Interim dividend of 1.75p per share (2008: 5.00p per share)

• Sale of US division for US$39m realising cash of US$34m

*    Before restructuring costs, provision releases and other one-off items

**     The US division was sold on 22 January 2009 and has been treated as a discontinued operation, with the comparative figures for the 26 weeks ended 1 February 2008 restated

Commenting on the results, Brian Edwards, Chief Executive of St Ives, said:

'As we announced in January, trading conditions during the period continued to be very challenging and deteriorated further after Christmas. Although we successfully grew sales of managed services and reduced costs, this was insufficient to offset fully the effects of volume and price pressure.

'However our unrivalled market position and our concentration on the supply of cost effective solutions, coupled with our strong balance sheet, will allow us to take advantage of any improvement in the economic outlook.'

For further information contact:

St Ives plc	020 7928 8844
Miles Emley, Chairman
Brian Edwards, Chief Executive
Matt Armitage, Finance Director
Smithfield	020 7360 4900
John Antcliffe
Rupert Trefgane

CHAIRMAN'S STATEMENT

Trading conditions have continued to be very challenging. Weak and volatile demand together with fierce price competition have led to a result that is considerably below that achieved in the first half of last year. We have declared an interim dividend, albeit at a reduced level.

As set out in the Chief Executive's statement, significant actions completed during the period include the disposal of our businesses in Holland and the USA. We are now able to concentrate solely on the development of our market leading businesses in the UK. In addition, we closed our defined benefits pension scheme to future accrual, thus reducing as far as possible the Group's exposure to the risks inherent in increased longevity and uncertain investment returns.

As already announced, as part of an overall management succession plan Brian Edwards will be standing down as Chief Executive at the end of the financial year: he will be succeeded by Patrick Martell, currently Managing Director Media Products.  Simon Ward leaves the Board at the end of March in order to concentrate his endeavours in the private equity sector: his role is being assumed by Lloyd Wigglesworth who joined the Board in December 2008, initially as a non-executive director. Wayne Angstrom, formerly President of St Ives Inc, retired from the Board immediately following completion of the disposal of our US businesses in January.

Against a background of extreme economic uncertainty, actions already taken will reduce costs further. We are well invested; the Group's balance sheet is robust; and we continue to focus on ensuring that our cost base is competitive and that we remain the premier provider of print-based solutions to our media and commercial customers alike.

Miles Emley 

Chairman

31 March 2009

CHIEF EXECUTIVE'S STATEMENT

Results

The results for the Group for the 26 weeks ended 30 January 2009 show sales from continuing operations of £208.0 million (2008* - £198.2 million) and profit before tax, restructuring costs, provision releases and other one-off items of £6.2 million (2008* - £12.4 million). Profit from continuing operations before tax was £4.4 million (2008 - £11.6 million).

Earnings per share from continuing operations before restructuring costs, provision releases and other one-off items was 4.15p (2008 - 8.04p).

On 22 January 2009 we completed the disposal of our US division for US$39 million. After writing off goodwill and other associated costs of £10.2 million in total on this disposal, the overall result of the Group was a net loss of £6.7 million (2008* - profit £8.2 million). Earnings per share from continuing operations were 2.97p (2008 - 7.11p). The losses per share from continuing and discontinued operations was 6.51p (2008 - earnings 7.95p).

Dividend

The Board has declared an interim dividend of 1.75p per share (2008 - 5.00p per share) which will be payable on 15 May 2009 to shareholders on the register at 17 April 2009. A proposal for the final dividend will be made subsequent to the end of the financial year and will reflect the outcome for the year as well as the outlook and requirements of the business moving forwards.

Trading Conditions

As stated in our announcement on 26 January 2009, trading conditions during the period continued to be very challenging and deteriorated further after Christmas. The actions taken to reduce costs and the growth in sales of managed services were insufficient to offset fully the effects of volume and price pressure and profits were much lower than for the same period last year.

Media Products

Revenues from Media Products were £83.9 million, approximately 7.5% below the first half of last year. The majority of this reduction was attributable to the sale, in September 2008, of our Dutch music and multimedia activities. Underlying operating profit reduced to £8.2 million from £12.4 million last year.

Revenues from book customers increased modestly as a result of a further gain in market share and additional sales of added value services. Overall growth, however, was less than expected due to disruption in the supply chain to major supermarkets following the failure of a distributor, EUK, in November 2008. Variable demand, leading to less efficient utilisation, and reduced specifications resulted in modestly lower returns.

Overall, magazine sales were only slightly lower than in the same period last year. However, added value reduced by more than 10% because the mix of products required more bought in elements. Further price pressure, less efficient utilisation caused by volatile demand, and a significant increase in utility costs resulted in a loss in this area.

Commercial Products

Revenue from Commercial Products was £124.1 million, some 15.4% ahead of the previous half year. This segment produced a small loss of £143,000 before interest and exceptional items compared to a profit of £1.7 million for the comparative period in the prior year.

Direct response, general commercial printing and sales to music, movie and computer games publishers remained weak and under increasing price pressure. Pressure on volume and price was only partly offset by additional revenues delivered through our Group Sales offering. Utilisation deteriorated and the financial performance of these businesses was below that for the same period in the previous year.

Sales from our exhibitions, events and outdoor media operations declined by over 20% against the background of a more competitive environment, leading to a small loss. Actions to reduce cost have been taken in this part of the business.

Sales of point of sale services were robust with volumes nearly 30% ahead of the same period in the prior year, as our customers' marketing departments requested more frequent campaigns in an effort to promote sales. Whilst profits increased, net margins reduced as a result of price pressure and volatile demand caused less efficient utilisation of our labour.

Strategy

A number of key actions were completed during the half year. The assets and liabilities of the loss making Dutch business and the businesses of the US division were sold, generating £18.3 million in net cash which was used to reduce debt.

Our business now principally supplies the needs of the UK domestic market and our strategy of developing long term regular contractual relationships with customers continues to help offset the extremely challenging conditions.

Balance Sheet

The Group's balance sheet remains strong, partly as a result of actions taken to dispose of non-core activities. Our remaining businesses are well invested and, as expected, capital expenditure in the period was slightly below depreciation. The Group's defined benefits pension scheme was closed to future accrual with effect from 31 August 2008. During the period we contributed a special payment of £14.4 million as part of the agreed closure of the defined benefits pension scheme. Underlying free cash flow remains robust.

Outlook

Since January economic conditions have become more uncertain and most of our markets are extremely unpredictable. Action has been taken in many of our businesses to reduce costs and all areas remain under review. Some of our manned capacity has been reduced and we have seen further closures of competitor capacity. This has not kept pace, however, with reductions in demand and as a result has had no net effect on pricing in the market.

In Books, visibility remains limited but to date volumes have held up compared with the same period last year. Our new warehouse extension, built to allow us to offer more post-production services, is now on stream and sales to customers requiring these facilities are increasing.

Magazine paginations remain extremely variable, with volumes modestly lower overall. Some gains have been achieved following closure of competitor capacity.

Direct response, general commercial and multimedia markets continue to be oversupplied and subject to price pressure. Since the end of the half year, there has been a modest improvement in demand for the services of our exhibitions, events and outdoor media business but, overall, activity is below that of last year. The incremental sales that are still being achieved from existing customers for products and services not previously supplied are helping to offset some volume shortfall in these areas.

Point of sale markets continue to be busy, although we are achieving lower net margins as volatility in demand and price pressure increases.

The markets we serve are heavily influenced by the economic climate and the outlook is very uncertain in most areas. The Group's market position, however, remains strong and our concentration on the supply of cost effective solutions will help to mitigate the impact of continuing volume and margin pressure. This, together with the Group's sound financial position, will allow us to take advantage of any improvement in the economic outlook.

Brian Edwards

Chief Executive 

31 March 2009

*  The US division was sold on 22 January 2009 and has been treated as a discontinued operation. Accordingly, its results for the period have been reclassified and the comparative figures for the 26 weeks ended 1 February 2008 have been restated.

CONDENSED CONSOLIDATED INCOME STATEMENT

	26 weeks to 30 January 2009
	---------------------------------
	Before  restructuring  costs,  provision  releases and  other one-off  items	Restructuring  costs,  provision  releases and  other one-off  items  (note 3)			Total		26 weeks to  1 February  2008  (restated  note 7)		52 weeks to  1 August  2008  (restated  note 7)
	----------	----------			----------		----------		----------
	£'000		£'000		£'000		£'000		£'000
Revenue (note 2)	207,971		-		207,971		198,247		391,200
Cost of sales	(164,224)		(1,277)		(165,501)		(146,960)		(287,916)
	----------		----------		----------		----------		----------
Gross profit/(loss)	43,747		(1,277)		42,470		51,287		103,284
Selling costs	(13,562)		(372)		(13,934)		(14,608)		(27,300)
Administrative expenses	(22,250)		(521)		(22,771)		(24,254)		(43,121)
Other operating income	138		420		558		836		1,216
	----------		----------		----------		----------		----------
Profit/(loss) from operations   (note 2)	8,073		(1,750)		6,323		13,261		34,079
Investment income	6,394		-		6,394		5,721		11,051
Finance costs	(8,310)		-		(8,310)		(7,413)		(14,508)
	----------		----------		----------		----------		----------
Profit/(loss) before tax	6,157		(1,750)		4,407		11,569		30,622
Income tax (charge)/credit    (note 4)	(1,878)		533		(1,345)		(4,242)		(16,096)
	----------		----------		----------		----------		----------
Profit/(loss) for the period from   continuing operations	4,279		(1,217)		3,062		7,327		14,526
Profit/(loss) for the period from   discontinued operations	476		(10,249)		(9,773)		867		1,714
	----------		----------		----------		----------		----------
Net profit/(loss) for the period	4,755		(11,466)		(6,711)		8,194		16,240
	=========		=========		=========		=========		=========
Basic and diluted earnings/(losses)   per share (note 6)
From continuing operations	4.15p		(1.18p)		2.97p		7.11p		14.09p
	=========		=========		=========		=========		=========
From continuing and discontinued   operations	4.61p		(11.12p)		(6.51p)		7.95p		15.75p
	=========		=========		=========		=========		=========

CONDENSED CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE

		26 weeks to  30 January  2009	26 weeks to  1 February  2008			52 weeks to  1 August  2008
		----------		---------		----------
		£'000		£'000		£'000
Exchange gains on translating foreign operations		275		905		973
Actuarial gains/(losses) on defined benefits pension scheme		12,375		(9,486)		(12,806)
Gains on cash flow hedges taken to equity		586		-		-
Tax (charge)/credit on items taken directly to equity		(3,629)		2,656		3,522
		----------		---------		----------
Net income/(expense) recognised directly in equity		9,607		(5,925)		(8,311)
Transfer to income statement of exchange differences on   disposal of foreign operations and on repayment of group   hedging loan		(235)		-		-
(Loss)/profit for the period		(6,711)		8,194		16,240
		----------		---------		----------
Total recognised income		2,661		2,269		7,929
		=========		========		=========

CONDENSED CONSOLIDATED BALANCE SHEET

	30 January  2009		1 February  2008		1 August  2008
	----------		---------		----------
	£'000		£'000		£'000
ASSETS
Non-current assets
Property, plant and equipment	126,367		141,824		141,581
Goodwill	46,273		54,679		54,679
Other intangible assets	1,362		1,755		1,753
Deferred tax assets	-		7,004		39
Financial assets (note 7)	3,469		-		-
Other non-current assets	1,832		3,176		2,478
	----------		---------		----------
	179,303		208,438		200,530
	----------		---------		----------
Current assets
Inventories	12,681		13,340		14,211
Trade and other receivables	97,650		81,077		96,965
Cash and cash equivalents	492		14,144		5,635
Assets held for sale	1,282		4,604		6,650
	----------		---------		----------
	112,105		113,165		123,461
	----------		---------		----------
Total assets	291,408		321,603		323,991
	----------		---------		----------
LIABILITIES
Current liabilities
Trade and other payables	77,124		72,165		72,694
Loans and bank overdrafts	3,199		358		-
Other financial liabilities	39		382		230
Current tax liabilities	504		5,170		3,209
Provisions	983		2,322		1,901
Deferred income	611		196		981
Liabilities directly associated with assets held for sale	-		-		1,142
	----------		---------		----------
	82,460		80,593		80,157
	----------		---------		----------
Non-current liabilities
Loans	36,173		28,540		38,491
Retirement benefit obligations (note 10)	20,920		55,008		48,344
Deferred income	1,095		1,384		1,204
Other financial liabilities	-		79		-
Provisions	936		1,695		925
Deferred tax liabilities	4,762		-		-
	----------		---------		----------
	63,886		86,706		88,964
	----------		---------		----------
Total liabilities	146,346		167,299		169,121
	----------		---------		----------
Net assets	145,062		154,304		154,870
	=========		========		=========
EQUITY
Capital and reserves
Share capital	10,355		10,355		10,355
Other reserves (note 8)	46,637		46,061		46,123
Retained earnings (note 9)	88,070		97,888		98,392
	----------		---------		----------
Total equity	145,062		154,304		154,870
	=========		========		=========

These interim statements were approved by the board of directors on 31 March 2009.

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

		26 weeks to  30 January  2009	26 weeks to  1 February  2008			52 weeks to  1 August  2008
		----------		---------		----------
		£'000		£'000		£'000
Operating activities
Cash generated from operations (note 11)		6,112		32,886		40,138
Interest received		-		247		17
Interest paid		(1,435)		(823)		(1,992)
Income taxes paid		(2,647)		(3,017)		(8,938)
		----------		---------		----------
Net cash generated from operating activities		2,030		29,293		29,225
		----------		---------		----------
Investing activities
Purchase of property, plant and equipment		(10,548)		(8,640)		(21,443)
Purchase of other intangibles		(265)		(816)		(1,347)
Proceeds on disposal of property, plant and equipment		4,620		1,189		1,838
Disposal proceeds of subsidiary, net of cash disposed		17,764		-		-
		----------		---------		----------
Net cash generated from/(used in) investing activities		11,571		(8,267)		(20,952)
		----------		---------		----------
Financing activities
Loan notes redeemed		-		-		(358)
Capital element of finance lease rentals		(191)		(211)		(398)
Dividends paid (note 5)		(12,521)		(12,521)		(17,673)
(Decrease)/increase in bank loans		(10,117)		-		10,000
Increase/(decrease) in bank overdrafts		3,199		(1,969)		(1,969)
		----------		---------		----------
Net cash used in financing activities		(19,630)		(14,701)		(10,398)
		----------		---------		----------
Net (decrease)/increase in cash and cash equivalents		(6,029)		6,325		(2,125)
Cash and cash equivalents at beginning of period		5,635		7,547		7,547
Effect of foreign exchange rate changes		886		272		213
		----------		---------		----------
Cash and cash equivalents at end of period (note 11)		492		14,144		5,635
		=========		========		=========

NOTES TO THE FINANCIAL STATEMENTS

1. Basis of preparation

The interim statements have been prepared in accordance with IAS34 'Interim Financial Reporting', the recognition and measurement principles of International Financial Reporting Standards as adopted by the European Union, and those parts of the Companies Act 2006 applicable to companies reporting under IFRS.

The interim statements have been prepared in accordance with the accounting policies set out in the Group's Annual Report and Accounts 2008. Certain balance sheet items have been reclassified in the prior year comparatives to reflect changes in presentation. The interim statements have not been audited or reviewed.

The interim statements do not comprise statutory accounts for the purpose of section 435 of the Companies Act 2006. The abridged information for the fifty two weeks to 1 August 2008 has been extracted from the Group's statutory accounts for that period which have been filed with the Registrar of Companies. The auditor's report in the accounts of the Group for that period was unqualified and did not contain a statement under either section 237(2) or section 237(3) of the Companies Act 1985.

The Board continuously assesses and monitors the key risks of the business. The key risks that could affect the Group's medium term performance and the factors that mitigate those risks have not substantially changed from those set out in pages 16 and 17 and 75 to 78 of the Group's Annual Report and Accounts for 2008, a copy of which is available on the Group's website: www.st-ives.co.uk. 

2. Segment reporting

The Group manages its business on a market segment basis.  Inter-segment sales are charged at arm's length prices.  Corporate costs are allocated to revenue generating segments as this presentation better reflects their profitability. As detailed in note 7, the US division was sold on 22 January 2009 and is classified as a discontinued operation in the interim statements.  Segmental results in the prior half year and full year segmental analysis comparatives have been restated to reflect continuing operations only.

Business segments

 

		26 weeks to 30 January 2009
		––––––––––––––––––––––––––––––––––––-
		Media  Products	Commercial  Products		Elimination		Total
		£’000		£’000		£’000		£’000
Revenue
External sales		83,921		124,050		–		207,971
Inter-segment sales		439		2,680		(3,119)		–
		––––––––		––––––––		––––––––		––––––––
Total revenue		84,360		126,730		(3,119)		207,971
		========		========		========		========
Result
Segmental result		7,833		(1,510)		–		6,323
Add back restructuring costs, provision releases and     other one-off items		383		1,367		–		1,750
		––––––––		––––––––		––––––––		––––––––
Segmental result before restructuring costs, provision     releases and other one-off items		8,216		(143)		–		8,073
		========		========		========
Total restructuring costs, provision releases and other     one-off items								(1,750)
								––––––––
Profit from operations								6,323
Investment income								6,394
Finance costs								(8,310)
								––––––––
Profit before tax								4,407
Income tax expense								(1,345)
								––––––––
Profit for the period from continuing operations								3,062
								========

 

		26 weeks to 1 February 2008 (restated)
		––––––––––––––––––––––––––––––––––––
		Media  Products	Commercial  Products		Elimination		Total
		£’000		£’000		£’000		£’000
Revenue
External sales		90,735		107,512		–		198,247
Inter-segment sales		1,339		1,872		(3,211)		–
		––––––––		––––––––		––––––––		––––––––
Total revenue		92,074		109,384		(3,211)		198,247
		========		========		========		========
Result
Segmental result		10,646		2,615		–		13,261
Add back restructuring costs, provision releases and     other one-off items		1,727		(886)		–		841
		––––––––		––––––––		––––––––		––––––––
Segmental result before restructuring costs, provision     releases and other one-off items		12,373		1,729		–		14,102
		========		========		========
Total restructuring costs, provision releases and other     one-off items								(841)
								––––––––
Profit from operations								13,261
Investment income								5,721
Finance costs								(7,413)
								––––––––
Profit before tax								11,569
Income tax expense								(4,242)
								––––––––
Profit for the period from continuing operations								7,327
								========

 

		52 weeks to 1 August 2008 (restated)
		––––––––––––––––––––––––––––––––––––
		Media  Products	Commercial  Products		Elimination		Total
		£’000		£’000		£’000		£’000
Revenue
External sales		173,153		218,047		–		391,200
Inter-segment sales		2,280		3,737		(6,017)		–
		––––––––		––––––––		––––––––		––––––––
Total revenue		175,433		221,784		(6,017)		391,200
		========		========		========		========
Result
Segmental result		24,454		9,625		–		34,079
Add back restructuring costs, provision releases and     other one-off items		1,264		(2,390)		–		(1,126)
		––––––––		––––––––		––––––––		––––––––
Segmental result before restructuring costs, provision     releases and other one-off items		25,718		7,235		–		32,953
		========		========		========
Total restructuring costs, provision releases and other     one-off items								1,126
								––––––––
Profit from operations								34,079
Investment income								11,051
Finance costs								(14,508)
								––––––––
Profit before tax								30,622
Income tax expense								(16,096)
								––––––––
Profit for the period from continuing operations								14,526
								========

 

 

Geographical segments

The Media Products and Commercial Products business segments operate primarily in the UK, deriving more than 90% of their revenues and profits from operations and customers located in the UK.

3. Restructuring costs, provision releases and other one-off items

Restructuring costs, provision releases and other one-off items disclosed on the face of the consolidated income statement in respect of continuing operations are as follows:

		26 weeks to  30 January  2009		26 weeks to  1 February  2008		52 weeks to  1 August  2008
		£'000		£'000		£'000
(Expense)/income
Restructuring items
Redundancies, impairments and other charges		(2,149)		(2,527)		(5,195)
Provision releases		-		1,432		1,373
Profit on disposal of fixed assets		-		447		594
Profit on disposal of music and multimedia business		420		-		-
		----------		---------		----------
		(1,729)		(648)		(3,228)
Other
Pension curtailment, net of associated costs		(21)		-		4,737
Press fire		-		(193)		(250)
		----------		---------		----------
		(1,750)		(841)		1,259
Income tax credit/(charge)		533		(121)		(6,765)
		----------		---------		----------
		(1,217)		(962)		(5,506)
		=========		========		=========

Redundancies, impairments and other charges includes redundancies (£1,909,000) and other costs within the Media Products and Commercial Products segments. The assets and liabilities of the music and multimedia business in Uden, the Netherlands were sold on 24 September 2008 for net proceeds of £502,000 resulting in a gain of £420,000.

4.  Tax

Tax on profit from continuing operations as shown in the consolidated income statement is as follows:

		26 weeks to  30 January  2009		26 weeks to  1 February  2008		52 weeks to  1 August  2008
		£'000		£'000		£'000
United Kingdom income tax		1,345		4,217		16,096
Overseas income tax		-		25		-
		----------		---------		----------
		1,345		4,242		16,096
		=========		========		=========

5. Dividends

		26 weeks to  30 January  2009		26 weeks to  1 February  2008		52 weeks to  1 August  2008
	per share	£'000		£'000		£'000
Final dividend paid for the 53 weeks ended   3 August 2007	12.15p	-		12,521		12,521
Interim dividend paid for the 26 weeks ended   1 February 2008	5.00p	-		-		5,152
Final dividend paid for the 52 weeks ended   1 August 2008	12.15p	12,521		-		-
		----------		---------		----------
Dividends paid during the period		12,521		12,521		17,673
		=========		========		=========
Proposed interim dividend for the 26 weeks   ended 30 January 2009	1.75p	1,803
		=========

6. Earnings per share

Number of shares

		26 weeks to  30 January  2009		26 weeks to  1 February  2008		52 weeks to  1 August  2008
		million		million		million
Weighted average and diluted weighted average number of   ordinary shares for the purposes of basic earnings per share		103.1		103.1		103.1
		=========		========		=========

Basic and diluted earnings per share

		26 weeks to  30 January 2009				26 weeks to  1 February 2008				52 weeks to  1 August 2008
		---------------				---------------				---------------
		Earnings		Earnings  per share		Earnings		Earnings  per share		Earnings		Earnings  per share
		£'000		pence		£'000		pence		£'000		pence
Earnings and earnings per share   from continuing activities
Earnings and basic earnings   per share		3,062		2.97		7,327		7.11		14,526		14.09
Restructuring costs,   provision releases   and other one-off items		1,217		1.18		958		0.93		5,639		5.47
		-------		-------		-------		-------		-------		-------
Underlying earnings and underlying   earnings per share		4,279		4.15		8,285		8.04		20,165		19.56
		======		======		======		======		======		======
Earnings and earnings per share   from discontinued activities
(Losses)/earnings and basic   (losses)/earnings per share		(9,773)		(9.48)		867		0.84		1,714		1.66
Restructuring costs,   provision releases   and other one-off items		10,249		9.94		4		-		(133)		(0.13)
		-------		-------		-------		-------		-------		-------
Underlying earnings and underlying   earnings per share		476		0.46		871		0.84		1,581		1.53
		======		======		======		======		======		======
Basic (losses)/earnings per share   from continuing and   discontinued activities				(6.51)				7.95				15.75
				======				======				======

Underlying earnings is calculated by adding back restructuring costs, provision releases and other one-off items, as adjusted for tax, to the profit for the period.

7. Discontinued operations

On 22 January 2009 the Group disposed of its US division, St Ives (USA), Inc and its subsidiary undertakings. The disposal was tax free in the UK. The US operation is classified as a discontinued operation in these interim statements and prior period figures have been restated accordingly.

The profit after tax for the period from the discontinued operation is analysed below:

		26 weeks to  30 January  2009		26 weeks to  1 February  2008		52 weeks to  1 August  2008
		£'000		£'000		£'000
Revenue		23,592		24,942		47,949
Operating costs		(23,047)		(23,981)		(46,344)
		----------		---------		----------
Profit before tax		545		961		1,605
Income tax charge		(69)		(90)		(24)
		----------		---------		----------
Profit after tax before restructuring costs, provision   releases and other one-off items on discontinued   operations		476		871		1,581
		=========		========		=========

Restructuring costs, provision releases and other one-off items from the discontinued operation is analysed below:

		26 weeks to  30 January  2009		26 weeks to  1 February  2008		52 weeks to  1 August  2008
		£'000		£'000		£'000
Loss on disposal of the US activities		(10,554)		-		-
Other restructuring costs, provision releases and other   one-off items		305		(4)		133
		----------		---------		----------
Total restructuring costs, provision releases and   other one-off items before and after tax		(10,249)		(4)		133
		=========		========		=========

		26 weeks to  30 January  2009		26 weeks to  1 February  2008		52 weeks to  1 August  2008
		£'000		£'000		£'000
Profit after tax before restructuring costs, provision releases   and other one-off items		476		871		1,581
Restructuring costs, provision releases and other one-off   items		(10,249)		(4)		133
		----------		---------		----------
Total (loss)/profit from discontinued operations		(9,773)		867		1,714
		=========		========		=========

The net assets of the US division at the date of disposal and at 1 August 2008 and 1 February 2008 were as follows:

		22 January  2009		1 February  2008		1 August  2008
		£'000		£'000		£'000
Attributable goodwill		8,405		8,405		8,405
Other intangible assets		210		272		217
Property, plant and equipment		21,515		14,932		16,250
Inventories		4,389		2,561		2,589
Trade and other receivables		11,345		10,356		9,898
Bank balances and cash		3,186		4,305		4,372
Trade and other payables		(11,984)		(6,165)		(6,601)
Other liabilities		(128)		(1,452)		(946)
		----------		---------		----------
Net assets		36,938		33,213		34,183
				========		=========
Recycling of cumulative foreign exchange translation losses		1,056
Loss on disposal before and after tax		(10,554)
		----------
Total consideration receivable, net of selling costs		27,440
		=========

		£'000
Consideration net of selling costs, received in cash in the period		20,950
Consideration receivable in cash on US tax authority clearance		2,844
Promissory loan note		3,646
		----------
Total consideration receivable, net of selling costs		27,440
		=========

Net cash inflow arising from the disposal in the period:

		£'000
Total consideration net of selling costs, received in cash in the period		20,950
Cash included in net assets disposed of in the period		(3,186)
		----------
Proceeds in the period on disposal, net of cash disposed		17,764
		=========

Clearance from the US federal tax authorities was received after the balance sheet date, following which the withheld consideration of £2,844,000 was received by the Group. The promissory loan note is interest bearing and is repayable in instalments with US$1.0 million due on 1 February 2012, US$1.0 million on 1 February 2013 and US$3.0 million due on 1 February 2014. This receivable is recorded within financial assets under non-current assets.

8. Other reserves

	Share  premium			ESOP  reserve	Capital  redemption   reserve				Share  option  reserve	Hedging  and  translation  reserve			Total
		£'000		£'000		£'000			£'000		£'000		£'000
Balance at 3 August 2007		46,689		(1,913)		1,238			62		(949)		45,127
Exchange differences and related   tax		-		-		-			-		905		905
Recognition of share-based   payments		-		-		-			29		-		29
		-------		-------		-------			-------		-------		-------
Balance at 1 February 2008		46,689		(1,913)		1,238			91		(44)		46,061
Exchange differences and related   tax		-		-		-			-		4		4
Recognition of share-based   payments		-		-		-			58		-		58
		-------		-------		-------			-------		-------		-------
Balance at 1 August 2008		46,689		(1,913)		1,238			149		(40)		46,123
Exchange differences and related   tax
Arising in the period		-		-		-			-		275		275
Transferred to income statement		-		-		-			-		(235)		(235)
Cash flow hedges
Gains on hedges taken to equity		-		-		-			-		586		586
Tax taken directly to equity		-		-		-			-		(164)		(164)
Recognition of share-based   payments		-		-		-			52		-		52
		-------		-------		-------			-------		-------		-------
Balance at 30 January 2009		46,689		(1,913)		1,238			201		422		46,637
		======		======		======			======		======		======

9.  Retained earnings

		£'000
Balance at 3 August 2007		109,045
Dividends paid		(12,521)
Profit for the period attributable to equity holders of the parent		8,194
Actuarial losses on defined benefits pension scheme, net of associated tax		(6,830)
		--------
Balance at 1 February 2008		97,888
Dividends paid		(5,152)
Profit for the period attributable to equity holders of the parent		8,046
Actuarial losses on defined benefits pension scheme, net of associated tax		(2,390)
		--------
Balance at 1 August 2008		98,392
Dividends paid		(12,521)
Loss for the period attributable to equity holders of the parent		(6,711)
Actuarial gains on defined benefits pension scheme, net of associated tax		8,910
		--------
Balance at 30 January 2009		88,070
		=======

10. Retirement benefits

The defined benefits pension scheme was closed to future service accruals with effect from 31 August 2008.  The related net liability in respect of retirement benefit obligations of £20.9m at the balance sheet date has decreased compared to 1 August 2008 (£48.3m) due primarily to an increase in the discount rate from 6.25% at 1 August 2008 to 6.75% at 30 January 2009, and a decrease in the inflation rate from 3.65% to 3.4% at 30 January 2009.

11.  Notes to the consolidated cash flow statement

Reconciliation of cash generated from operations

		26 weeks to  30 January  2009		26 weeks to  1 February  2008		52 weeks to  1 August  2008
		£'000		£'000		£'000
Profit from continuing operations		6,323		13,261		34,079
(Loss)/profit from discontinued operations		(9,547)		1,237		2,246
Adjustments for
Depreciation of property, plant and equipment		11,506		13,553		24,250
Loss on disposal of subsidiary		10,554		-		-
Impairment losses		-		-		2,937
Amortisation of intangible assets		520		467		998
Gain on disposal of property, plant and equipment		(525)		(838)		(1,355)
Foreign exchange gains		(397)		-		-
Deferred income (credit)/charge		(480)		(246)		359
Share-based payment charge		51		29		87
Decrease in retirement benefit obligations		(15,683)		(657)		(11,689)
Decrease in provisions		(978)		(3,516)		(4,375)
		----------		---------		----------
Operating cash inflows before movements in working   capital		1,344		23,290		47,537
Increase/(decrease) in inventories		(1,790)		625		(667)
Increase in receivables		(5,406)		(4,532)		(20,489)
Increase in payables		11,964		13,503		13,757
		----------		---------		----------
Cash generated from operations		6,112		32,886		40,138
		=========		========		=========

Analysis of net debt

		2 August  2008		Cash flow		Exchange  movements		30 January  2009
		£'000		£'000		£'000		£'000
Cash and cash equivalents		5,635		(6,029)		886		492
Bank overdrafts		-		(3,199)		-		(3,199)
Bank loans		(38,491)		10,117		(7,799)		(36,173)
Finance leases		(230)		191		-		(39)
		----------		---------		----------		----------
		(33,086)		1,080		(6,913)		(38,919)
		=========		========		=========		=========

Cash and cash equivalents (which are presented as a single class of assets on the face of the balance sheet) comprise cash at bank and other short-term highly liquid investments with a maturity of three months or less.  The effective interest rates on cash and cash equivalents are based on current market rates.

Finance lease obligations are included within other financial liabilities under current liabilities.

Cash flows from discontinued operations

Included within the cash flow statement are the following cash flows from discontinued operations:

		26 weeks to  30 January  2009		26 weeks to  1 February  2008		52 weeks to  1 August  2008
		£'000		£'000		£'000
Net cash generated from operating activities		1,691		867		2,671
Net cash generated from/(used in) investing activities		2,232		(1,141)		(2,870)
		----------		---------		----------
Net increase/(decrease) in cash from discontinued   operations		3,923		(274)		(199)
		=========		========		=========

12. Responsibility statement

We confirm that, to the best of our knowledge:

• the condensed set of financial statements has been prepared in accordance with IAS34 'Interim Financial Reporting'; 

• the interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months of the year and descriptions of principal risks and uncertainties for the remaining six months of the year); and

• the interim management report includes a fair review of the information required by DTR4.2.8R (disclosure of related parties' transactions and changes therein).

By Order of the Board

Brian Edwards

Chief Executive

31 March 2009

13.  A copy of these interim statements will be available shortly on the Group's website and will be sent to all shareholders.

The foregoing contains forward looking statements made by the directors in good faith based on information available to them up to 31 March 2009. Such statements need to be read with caution due to inherent uncertainties, including economic and business risk factors underlying such statements.

 

END

 

 

IR UROKRKBROOAR