Orchard Furniture PLC
28 April 2000
ORCHARD FURNITURE PLC
INTERIM RESULTS FOR THE PERIOD ENDED 31 DECEMBER 1999
OPEN OFFER TO SHAREHOLDERS
The Directors of Orchard Furniture PLC ('Orchard' or 'the Company') announce the
Interim Results for the period ended 31 December 1999.
The Directors further announce the Company has today posted a document to
shareholders containing full details of the Open Offer announced on 6 April
2000.
Nabarro Wells & Co. Limited, as agent for and on behalf of the Company, is
offering 1,018,388,753 new Ordinary Shares to Qualifying Shareholders on the
Register on the Record Date, 17 April 2000, on the basis of:
1 new Ordinary Share for every 1 Ordinary Share held at lp per new Ordinary
Share
INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 1999
The results for the six months ended 31 December 1999, which show a loss before
tax of £165,000, cover a period when Orchard had no trading business. As has
already been reported to Shareholders, Orchard's furniture operations were sold
on 19 June 1999 in view of the Company's weak financial position. The sale
proceeds of £1.5 million enabled the repayment of bank borrowings and the
redemption of part of the 9% Convertible Loan Stock, but the Company was left
with no assets, no income and significant liabilities.
During the period under review, the priority of the Board was to endeavour to
establish some value for both creditors and Shareholders. This led to a
proposed Company Voluntary Arrangement ('CVA'), which was duly approved on 10
January 2000. Under the terms of the CVA up to 18,000,000 Ordinary Shares have
been reserved for the settlement of creditors' claims. Subsequently, the
Company raised £1.1 million before expenses through a placing of 550,000,000
Ordinary Shares at a price of 0.2p per share, which enabled its shares to be
re-admitted to trading on AIM on 25 January. On 6 April, the Company announced
that it had placed 310,000,000 new Ordinary Shares at a price of lp per share,
raising £3.1 million before expenses, as well as a further 310,000,000 new
Ordinary Shares at 1p subject to shareholder consent at an Extraordinary Meeting
convened for 2 May 2000. Existing Shareholders are also being given the right
to subscribe for additional shares at lp per share, on the basis of 1 new
Ordinary Share for every 1 Ordinary Share held, under the Open Offer.
Shareholders should note that the balance sheet at 31 December 1999 has been
drawn up before the CVA and subsequent placings and Open Offer.
When the Company's shares were requoted on AIM, the Directors stated that it was
the intention of the Board to identify suitable investments or a single
acquisition with a view to enhancing shareholder value. Since that time, a
number of opportunities have been examined. The Board believes that the Company
will be better able to take advantage of opportunities available by raising
additional capital. The Board intends either to make a number of investments or
to acquire control of a single company or to combine both of these investment
strategies.
BALANCE SHEET
31.12.99 30.6.99
£000 £000
Current assets
Cash 30 5
--- ---
30 5
Creditors
Amounts falling due within
one year (442) (293)
----- ----
Net liabilities (412) (288)
Capital and reserves
Called up share capital 5,079 5,079
Share premium account 6,330 6,330
Other reserves 557 557
Profit and loss account (13,270) (13,105)
------ ------
Equity Shareholders' funds (1,304) (1,139)
----- -----
Non equity share capital
Convertible secured loan stock 892 851
--- ---
Total Shareholders' funds (412) (288)
PROFIT AND LOSS ACCOUNT
Notes 6 Months ended Year Ended
31.12.99 30.6.99
£000 £000
TURNOVER 1 - 54
Operating costs (166) (2,036)
Operating loss from continuing
operations
Excluding exceptions (166) (420)
Exceptional items - (1,562)
(166) (1,982)
Interest 1 (72)
Loss on ordinary activities before tax (165) (2,054)
Tax on loss on ordinary activities 2 - -
Loss for the financial period/year (165) (2,054)
Loss per share before exceptional items 3 (0.4)p (1.2)p
Basic loss per share 3 (0.4)p (5.8)p
There were no recognised gains or losses other than disclosed above and there
have been no discontinued activities or acquisitions in the current or preceding
period.
CASH FLOW STATEMENT
Notes 31.12.99 30.6.99
£000 £000
Net cash outflow from
the operating activities 4 (17) (1,609)
Returns on investments and servicing
of Finance
Interest paid 1 (72)
Taxation - -
Capital expenditure and financial investment
Receipts from sales of tangible fixed assets - 1,100
Net cash outflow before financing (16) (581)
Financing
Repayment of bank loan and overdraft - (460)
Repayment of Convertible Secured Loan Stock - (149)
Proceeds from new share issue - 195
Proceeds from issue of Convertible Secured Loan Stock 41 1,000
---- -----
41 586
Increase in cash 25 5
NOTES TO THE INTERIM RESULTS
1. Basis of preparation
The interim financial information for the six months ended 31 December 1999 is
unaudited and was approved by the directors on 27 April 2000.
The interim financial information has been prepared in accordance with the
accounting policies detailed in the financial statements for the year ended
30 June 1999.
The comparative figures for the year ended 30 June 1999 are the company's
statutory accounts for that financial year. Those accounts have been
reported on by the company's auditors and delivered to the Registrar of
Companies. The report of the auditors was unqualified and did not contain a
statement under section 237(2) or (3) of the Companies Act 1985.
2. Tax
No charge to corporation tax arises as a result of losses in this period and the
previous year.
3. Loss per share
6 Months to 12 Months to
31.12.99 30.6.99
£000 £000
Loss for the financial period / year (164,649) (2,054,000)
Number of Ordinary Shares in issue
(weighted average) 44,895,753 35,045,753
Basic loss per Ordinary Share (0.4)p (5.8)p
Exceptional items per share - (4.5)p
Loss per share before exceptional items (0.4)p (1.2)p
4. Reconciliation of operating loss to net cash inflow/(outflow) from
operating activities
6 Months to 12 Months to
31.12.99 30.6.99
£000 £000
Operating loss (166) (1,982)
Depreciation - 39
Loss on disposal of fixed assets - 173
Decrease in working capital 149 161
(17) (1,609)
5. Contingent liabilities
The Company had entered into cross guarantees with various suppliers to its
subsidiary companies and following the liquidation of these companies these
guarantees will crystalise. It is not possible to quantify the value of these
claims since many will be settled by the liquidators of the appropriate
companies and some guarantees are under dispute. The directors consider that
the amount payable under these guarantees will be £662,309 but the final figure
may be slightly less. This sum has not been provided for in these accounts, but
since the 31 December 1999 this potential liability has been dealt with under
the terms of the CVA
Information on the Open Offer
Application may only be made on the Application Form, which is personal to the
Qualifying Shareholder(s) named therein and may not be assigned, transferred or
split except to satisfy bona fide market claims. The latest time for splitting
Application Forms is 3.00 p.m., 18 May 2000 and the latest time for receipt of
completed Application Forms is 3.00p.m., 22 May 2000. Qualifying Shareholders
who have sold or transferred all or part of their registered holdings are
advised to consult their stockbroker, bank or other agent through or by whom the
sale or transfer was effected as soon as possible since the benefits arising
under the Open Offer may be claimed from them by purchasers under the rules of
the London Stock Exchange. The Application Form represents a right to apply for
new Ordinary Shares. It is not a document of title and cannot be traded. Any
rights to subscribe for new Ordinary Shares under the Open Offer which are not
exercised will lapse.
Application will be made for the new Ordinary Shares to be admitted to AIM.
It is expected that Admission will become effective and that dealings will
commence in the new Ordinary Shares on 23 May 2000 The new Ordinary Shares
will, when issued and fully paid, rank pari passu in all respects with the
existing Ordinary Shares, including the right to receive all dividends and
other distributions thereafter declared, made or paid.
