Osborne & Little PLC
23 November 2000
OSBORNE & LITTLE PLC
Interim Results
for the half year ended 30 September 2000
Chairman's Statement
Financial Overview
Profit before tax was £2,310,000, down 13% on the previous period
(£2,640,000), whilst earnings per share were down 11% at 23.4p (1999 - 26.3p).
Turnover was up 8% at £20.0 million (1999 - £18.5 million); approximately half
of this increase was due to US dollar currency translation.
As our cash balances remain healthy we have decided to maintain the dividend
at 13p per share. This will be paid on 17 January 2001 to shareholders on the
register at close of business on 15 December 2000.
The principal reasons for the decline in profits were in respect of capital
and initial start-up costs of two new USA showrooms, additional payroll,
promotional and advertising costs in both the UK and the USA, and the weakness
of the Euro affecting our European markets.
Whilst the strengthening of the US dollar against sterling is beneficial for
us in the medium to long term, our policy, which we believe to be prudent, of
covering the exposure with forward contracts has meant that we have not
benefited as much as if we had no cover.
On 23 October, 2000, we moved from a full listing on the London Stock Exchange
to the Alternative Investment Market. The principal objective of the move was
that the Company should continue to enhance shareholder value through the
buying in of shares. This would not have been possible under LSE regulations,
which require a free float of at least 25%, a limit which the Company has
almost reached. There is no such restriction on AIM. In the course of the
first six months we purchased, and cancelled 128,000 of our own shares.
Brief comments on our principal markets follow:
North America
Sales were ahead 16% (8% in dollars) at £10.3 million (1999 - £8.9 million).
This market now represents 52% of total Group sales.
In July we opened a new, wholly owned showroom in San Francisco and in April,
in conjunction with the local agent, a new showroom in Boston. There have been
sizeable start-up costs associated with both these showrooms, but we are
confident that the investment will bring benefits in the near future.
United Kingdom
Sales in the UK were marginally up at £6.3 million (1999 - £6.2 million),
representing 32% of total Group sales. Although demand for interior
furnishings remains weak, we have increased our spend on advertising and
promotion as we believe it is important to maintain market leadership.
Rest of the World
Sales to the rest of the world, at £3.3 million (1999 - £3.4 million), were
down 3% over the previous period. This should be seen in the context of a
decline in the Euro against sterling over this period.
We are in the process of renovating and updating our own showrooms, and those
of our agents, throughout Europe and we are confident that the more
contemporary look will encourage an increase in sales.
Current Trading and Prospects
There is little change to the patterns of trading in the first few weeks of
the second half.
Sir Peter Osborne Bt
Chairman
23 November 2000
Enquiries
Osborne & Little plc 020 8675 2255
Sir Peter Osborne (Chairman)
Peter Soar (Finance Director)
UNAUDITED CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the half year ended 30 September 2000
Half year Half year
ended ended Year
ended
30 September 30 September
2000 1999 31 March
2000
£000 £000 £000
Turnover 19,951 18,501 39,325
Cost of sales (8,201) (7,620) (16,498)
Gross profit 11,750 10,881 22,827
Operating profit 2,217 2,568 5,353
Net interest receivable 93 72 176
Profit on ordinary activities before 2,310 2,640 5,529
taxation
Taxation on profit on ordinary (859) (1,002) (1,996)
activities
Profit on ordinary activities after 1,451 1,638 3,533
taxation
Dividends (793) (810) (2,929)
Retained profit for the year 658 828 604
Earnings per share 23.43p 26.29p 56.70p
Diluted earnings per share 22.83p 25.70p 55.35p
Dividends per share - ordinary 13p 13p 32p
Dividends per share - special - - 15p
13p 13p 47p
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 2000
30 September 30 September 31
2000 1999 March
2000
£000 £000 £000
Fixed assets 4,354 4,220 4,067
Current assets
Stocks and work in progress 9,166 7,509 7,218
Debtors: amounts falling due within one 5,843 4,537 6,125
year
Cash at bank and in hand 2,070 4,255 5,429
17,079 16,301 18,772
Creditors: amounts falling due within 8,866 8,001 10,525
one year
Net current assets 8,213 8,300 8,247
Equity shareholders' funds 12,567 12,520 12,314
ABRIDGED UNAUDITED CONSOLIDATED CASH FLOW STATEMENT
for the half year ended 30 September 2000
Half year Half year
ended ended Year
ended
30 September 30 September
2000 1999 31 March
2000
£000 £000 £000
Cash flow from operating activities 751 3,164 6,689
Returns on investments and servicing of 93 72 176
finance
Taxation (804) (696) (1,963)
Capital expenditure (816) (684) (1,059)
Equity dividends paid (2,119) (1,121) (1,931)
Purchase of own shares (451) - -
(Decrease) /increase in cash (3,346) 735 1,912
UNAUDITED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
for the half year ended 30 September 2000
Half year Half year
ended ended Year
ended
30 September 30
2000 September 31
March
1999
2000
£000 £000 £000
Profit for the year 1,451 1,638 3,533
Currency translation differences on foreign
currency net investments 47 (25) (7)
Total recognised gains and losses 1,498 1,613 3,526
NOTES
30 September 2000
1. Taxation
The tax charge for the half year ended 30 September 2000 has been
based on the estimated tax rate for the full year of 37.2% (1999 -
38.0%)
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 below:
2000 1999
Earnings Per Earnings Per share
Number of share Number of amount
£ shares £ shares
amount
Basic earnings per 1,451,000 6,192,632 23.43p 1,638,000 6,230,965 26.29p
share
Effect of dilutive
securities:
Options - 162,000 (0.60)p - 143,393 (0.59)p
Diluted earnings
per 1,451,000 6,354,632 22.83p 1,638,000 6,374,358 25.70p
share
3. RECONCILIATION OF OPERATING PROFIT TO OPERATING CASH FLOWS
Half year Half year
ended ended Year
ended
30 September 30 September
2000 1999 31 March
2000
£000 £000 £000
Operating profit 2,217 2,568 5,353
Depreciation charges 571 484 1,005
Loss/ (profit) on sale of tangible 18 (22) 7
fixed assets
(Increase)/ decease in stocks (1,948) 208 499
Decrease/ (increase) in debtors 282 659 (929)
(Decrease)/ increase in creditors (389) (733) 754
Net cash inflow from operating 751 3,164 6,689
activities
There was a £13,000 exchange loss affecting the movement in cash.
4. 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 unqualifed
audit report and have been delivered to the Registrar of Companies.
5. INTERIM REPORT
Copies of this Interim Report were despatched to shareholders on 23
November 2000 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 8772 9200
Email: [email protected]
