Osborne & Little PLC
18 November 1999
INTERIM RESULTS - HALF YEAR ENDED 30 SEPTEMBER 1999
* Osborne & Little, a leading designer and international
distributor of fine furnishing fabrics and wallpapers,
which has increased turnover, profits and earnings per
share in each of the last six years, announces further
increases:
1999 1998 Change
%
Turnover (£000) 18,501 17,845 3.7
Operating profit (£000) 2,568 2,393 7.3
Pre-tax profit N (£000) 2,640 2,516 4.9
EPS (p) 26.29 25.49 3.1
DPS (p) 13 12 8.3
Period end net cash (£000) 4,255 4,018 5.9
* Sales in North America were up 7% in sterling terms at
£8.9m (1998: £8.3m) and now represent 48% of total Group
sales. The programme of showroom expansions continues
with larger showrooms effective or planned for Atlanta,
Boston and San Francisco.
* UK sales were marginally ahead at £6.2m (1998: £6.1m),
representing 34% of total Group sales, after the 7%
decline in UK sales in the year to 31 March 1999, with
the improvement mostly in the second quarter and
continuing.
* Sales to the rest of the world were static at £3.4m,
representing 18% of total Group sales, reflecting
difficult markets except Eire, where sales were ahead by
17%.
* Several excellent collections were launched in September,
notably Just Kidding, the first children's collection,
launched under the Liberty Furnishings label and already
generating excellent sales.
* Sir Peter Osborne, Chairman & Chief Executive, stated
'With our two principal markets, North America and the
UK, continuing to perform up to expectations, we remain
confident of another satisfactory outcome to the full
year.'
Enquiries:
Osborne & Little plc 0181-675 2255
Sir Peter Osborne (Chairman & Chief Executive)
Peter Soar (Finance Director)
Bankside Consultants Limited 0171-220 7477
Charles Ponsonby
CHAIRMAN'S STATEMENT
FINANCIAL OVERVIEW
I am pleased to report an increase in pre-tax profit of 5% to
£2,640,000 (1998: £2,516,000) for the half year ended 30
September 1999, on turnover up 4% at £18.5 million (1998:
£17.8 million). Earnings per share rose 3% to 26.3p (1998:
25.5p), reflecting a higher tax rate due to the larger element
of profit made in the USA, where effective rates are higher.
Net cash balances at the end of September were higher at £4.3
million compared with £3.5 million at 31 March 1999.
DIVIDENDS
The Board has decided to increase the interim dividend per
share to 13p (1998: 12p). The interim dividend will be paid
on 19 January 2000, to shareholders on the register at close
of business on 17 December 1999.
NORTH AMERICA
Sales were up 7% in sterling terms at £8.9 million (1998: £8.3
million). North American sales now represent 48% of total
Group sales. The result is commendable in view of the fact
that, as I mentioned in my last Chairman's Statement, we
discontinued distribution of a brand that, last year,
represented some 5% of our North American sales.
Our programme of showroom expansions continues. We have
enlarged our space within the showroom of our agent in
Atlanta, and we will be moving to larger showrooms in Boston
and San Francisco early in the New Year.
UNITED KINGDOM
UK sales were marginally ahead at £6.2 million (1998: £6.1
million). This should be seen in the context of UK sales for
the year to 31 March 1999, being down 7%, and is indicative of
an upturn in our home market in the current year. Most of
this improvement came in the second quarter and has continued
into the opening weeks of the second half. UK sales represent
34% of total Group sales.
Our sales team has been strengthened by the addition of a new
sales manager, and our product offering by several excellent
collections launched in September. Outstanding amongst these
was Just Kidding, our first children's collection, launched
under the Liberty Furnishings label and already generating
excellent sales.
REST OF THE WORLD
Sales to the rest of the world, representing 18% of total
Group sales, were static at £3.4 million. All our export
markets were difficult (a notable exception being Eire, with
sales ahead by 17%) and they have continued to be so into the
second half.
France, where we have appointed a new sales manager with many
years' experience in our industry, was ahead by 4%, whilst
Germany, where we also have our own sales operation, was
unchanged. Both performances were a little disappointing
given our view at the year-end that these markets were finally
emerging from recession.
PROSPECTS
With our two principal markets, North America and the UK,
continuing to perform up to expectations, we remain confident
of another satisfactory outcome to the full year.
Sir Peter Osborne Bt.
Chairman
19 November 1999
UNAUDITED CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the half year ended 30 September 1999
Half year Half year Year
ended ended ended
30 Sept 30 Sept 31 Mar
1999 1998 1999
£000 £000 £000
--------------------------------------------------------------
Turnover 18,501 17,845 37,117
Cost of sales (7,620) (7,321) (15,279)
--------------------------------------------------------------
Gross profit 10,881 10,524 21,838
==============================================================
Operating profit 2,568 2,393 5,503
Net interest receivable 72 123 209
--------------------------------------------------------------
Profit on ordinary activities
before taxation 2,640 2,516 5,712
Taxation on profit on
ordinary activities (1,002) (928) (2,160)
--------------------------------------------------------------
Profit on ordinary activities
after taxation 1,638 1,588 3,552
Dividends (810) (748) (1,869)
--------------------------------------------------------------
Retained profit for the year 828 840 1,683
==============================================================
Earnings per share 26.29p 25.49p 57.01p
==============================================================
Diluted earnings per share 25.70p 25.08p 56.09p
==============================================================
Dividends per share 13p 12p 30p
==============================================================
All activity has arisen from continuing operations.
There is no material difference between the profit on ordinary
activities before taxation and the retained profit for the
year stated above and their historical cost equivalents.
ABRIDGED UNAUDITED CONSOLIDATED BALANCE SHEET
as at 30 September 1999
30 Sept 30 Sept 31 Mar
1999 1998 1999
£000 £000 £000
--------------------------------------------------------------
Fixed assets 4,220 3,596 4,016
--------------------------------------------------------------
Current assets
Stocks and work in progress 7,509 7,551 7,717
Debtors: amounts falling
due within one year 4,537 4,238 5,212
Cash at bank and in hand 4,255 4,018 3,528
--------------------------------------------------------------
16,301 15,807 16,457
--------------------------------------------------------------
Creditors: amounts falling
due within one year 8,001 8,325 8,756
--------------------------------------------------------------
Net current assets 8,300 7,482 7,701
--------------------------------------------------------------
Creditors: amounts falling
due after one year - 187 -
--------------------------------------------------------------
Equity shareholders' funds 12,520 10,891 11,717
==============================================================
ABRIDGED UNAUDITED CONSOLIDATED CASH FLOW STATEMENT
for the half year ended 30 September 1999
Half year Half year Year
ended ended ended
30 Sept 30 Sept 31 Mar
1999 1998 1999
£000 £000 £000
--------------------------------------------------------------
Cash flow from
operating activities 3,164 2,737 5,754
Returns on investments and
servicing of finance 72 123 209
Taxation (696) (498) (2,438)
Capital expenditure (684) (433) (1,283)
Equity dividends paid (1,121) (2,119) (2,867)
--------------------------------------------------------------
Increase/(decrease) in cash 735 (190) (625)
==============================================================
UNAUDITED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
for the half year ended 30 September 1999
Half year Half year Year
ended ended ended
30 Sept 30 Sept 31 Mar
1999 1998 1999
£000 £000 £000
--------------------------------------------------------------
Profit for the year 1,638 1,588 3,552
Currency translation differences
on foreign currency
net investments (25) (31) (48)
--------------------------------------------------------------
Total recognised gains and losses 1,613 1,557 3,504
==============================================================
NOTES
1. TAXATION
The tax charge for the half year ended 30 September 1999
has been based on the estimated tax rate for the full year
of 38.0% (1998: 36.9%).
2. EARNINGS PER SHARE
Basic earnings per share is calculated using the profit on
ordinary activities after tax and the weighted average
number of ordinary shares in issue during the period. For
diluted earnings per share, the weighted average number of
ordinary shares is adjusted to assume conversion of all
dilutive potential ordinary shares. Full details are
given in the table below:
1999 1998
Earn- Number Per Earn- Number Per
ings of share ings of share
£ shares amount £ shares amount
----------------------------------------------------------
Basic
earnings
per
share 1,638,000 6,230,965 26.29p 1,588,0006,230,965 25.49p
Effect
of dilutive
securities:
Options - 143,393(0.59)p - 102,000 (0.41)p
----------------------------------------------------------
Diluted
earnings
per
share 1,638,000 6,374,358 25.70p 1,588,0006,332,965 25.08p
==========================================================
3. RECONCILIATION OF OPERATING PROFIT TO OPERATING CASH FLOWS
1999 1998
£000 £000
----------------------------------------------------------
Operating profit 2,568 2,393
Depreciation charges 484 412
(Profit)/loss on sale of
tangible fixed assets (22) 12
Decrease/(increase) in stocks 208 (1,161)
Decrease in trade debtors 661 1,265
(Increase) in prepayments
and accrued income (2) (197)
(Decrease)/increase in
trade creditors (373) 110
(Decrease) in other taxation
and social security (96) (148)
(Decrease)/increase in accruals
and deferred income (264) 51
----------------------------------------------------------
Net cash inflow from
operating activities 3,164 2,737
==========================================================
There was an £8,000 exchange loss affecting the movement
in cash.
4. YEAR 2000
Year 2000 plans are progressing satisfactorily with all
critical systems now compliant.
Additional costs since the last financial year end to
achieve compliance are difficult to estimate but are in
the region of £40,000.
The Directors believe that they are taking all reasonable
steps to minimise the risk of Year 2000 related failures
disrupting the business.
5. PREPARATION OF INTERIM FINANCIAL INFORMATION
The financial information set out herein has been prepared
using accounting policies consistent with the previous
year, but does not comprise full financial statements
within the meaning of the Companies Act 1985 and has not
been audited. The full year comparatives were extracted
from the full Group Accounts which received an unqualified
audit report and have been delivered to the Registrar of
Companies.
6. INTERIM REPORT
Copies of this Interim Report were despatched to
shareholders on 19 November 1999 and are available from
the Company Secretary at the registered office of Osborne
& Little plc at:
49 Temperley Road, London SW12 8QE
Tel: 020 8675 2255
Fax: 020 8673 8254
Email: [email protected]
