Toye & Co PLC

Final Results

Toye & Co PLC
28 April 2006


TOYE & COMPANY PLC


PRELIMINARY ANNOUNCEMENT


RESULTS FOR THE YEAR ENDED 31ST DECEMBER 2005



FINANCIAL REPORTING STANDARD 17 (RETIREMENT BENEFITS), 'FRS 17' HAS BEEN
ADOPTED IN THE CURRENT PERIOD AND COMPARATIVE FIGURES FOR THE YEAR ENDED 31ST
DECEMBER 2004 HAVE BEEN ADJUSTED ACCORDINGLY. THE FINANCIAL INFORMATION, WHICH
WITH THE EXCEPTION OF THE ADOPTION OF FRS 17 HAS BEEN PREPARED ON THE SAME BASIS
AS SET OUT IN THE 2004 ANNUAL ACCOUNTS, DOES NOT CONSTITUTE STATUTORY ACCOUNTS
AS DEFINED IN SECTION 240 OF THE COMPANIES ACT 1985. THE FINANCIAL INFORMATION
FOR THE YEAR ENDED 31ST DECEMBER 2005 HAS BEEN EXTRACTED FROM THE STATUTORY
ACCOUNTS ON WHICH AN UNQUALIFIED AUDIT OPINION HAS BEEN ISSUED. STATUTORY
ACCOUNTS FOR THE YEAR ENDED 31ST DECEMBER 2005 WILL BE DELIVERED TO THE
REGISTRAR IN DUE COURSE. THE COMPARATIVE FINANCIAL INFORMATION IS BASED ON THE
STATUTORY ACCOUNTS FOR THE FINANCIAL YEAR ENDED 31ST DECEMBER 2004. THOSE
ACCOUNTS, UPON WHICH THE AUDITORS ISSUED AN UNQUALIFIED OPINION, HAVE BEEN
DELIVERED TO THE REGISTRAR OF COMPANIES.


THE REPORT AND ACCOUNTS WILL BE POSTED TO SHAREHOLDERS AND THE ANNUAL GENERAL
MEETING WILL BE HELD ON 12th JUNE 2006 AT THE COMPANY'S OFFICES AT
REGALIA HOUSE, 19,20 & 21 GREAT QUEEN STREET, LONDON WC2B 5BE.


TOYE & COMPANY p.l.c.
Consolidated Profit and Loss Account
FOR THE YEAR ENDED 31st December 2005
                                                                                              As restated
                                                                             2005                    2004
                                                                                £                       £

Turnover
   Continuing operations                                                8,227,663               8,009,919

Change in stocks of finished goods and
   work in progress                                                        91,273                (73,307)

                                                                        8,318,936               7,936,612

Gain on pension scheme settlements and curtailments                             -                 369,570
Other operating charges                                               (8,208,912)             (7,663,583)

Total other operating charges                                         (8,208,912)             (7,294,013)

Operating profit                                                          110,024                 642,599

Interest payable                                                        (106,154)               (106,086)

Profit on ordinary activities before taxation                               3,870                 536,513

Taxation                                                                        -                       -

Profit for the financial year                                      £        3,870            £    536,513

Earnings per share - basic and diluted                                      0.17p                  23.87p






TOYE & COMPANY p.l.c.
Balance Sheets
AT 31st December 2005

                                                    The Group                               The Company
                                                                   As restated                          As restated
                                                    2005                  2004                2005             2004

                                                       £                     £                   £                £
Fixed Assets
Tangible assets                                2,222,055             2,297,261           2,087,240        2,127,460
Investments                                            -                     -           1,779,460        1,776,788
                                               2,222,055             2,297,261           3,866,700        3,904,248
Current assets
Stocks                                         1,591,651             1,574,115                   -                -
Debtors                                        1,127,529             1,121,711             177,380          188,484
Cash at bank and in hand                          97,123               136,911               3,612            3,612
                                               2,816,303             2,832,737             180,992          192,096
Creditors:

Amounts falling due within one year            1,724,325             1,610,765             781,392          625,187
Net current assets/(liabilities)               1,091,978             1,221,972           (600,400)        (433,091)
Total assets less current liabilities          3,314,033             3,519,233           3,266,300        3,471,157
Creditors: Amounts falling due after
more than one year
                                               1,370,360             1,000,000           1,370,360        1,000,000
Net assets excluding pension liability         1,943,673             2,519,233           1,895,940        2,471,157
Pension liability                                      -               579,430                   -          579,430
Net assets including pension liability        £1,943,673            £1,939,803          £1,895,940       £1,891,727
Capital and reserves
Called up share capital                          562,000               562,000             562,000          562,000
Share premium account                              2,677                 2,677               2,677            2,677
Revaluation reserve                            1,489,562             1,515,876           1,489,562        1,515,876
Profit and loss account                        (110,566)             (140,750)           (158,299)        (188,826)
Equity Shareholders' funds                   £1,943,673            £1,939,803          £1,895,940       £1,891,727




       B E Toye        )
       D Hartley       ) Directors


Approved by the Board of Directors and authorised for issue on 28th April 2006.


TOYE & COMPANY p.l.c.
Group Statement of Cash Flows
FOR THE YEAR ENDED 31st December 2005


                                                          2005                2005           2004                2004
                                                             £                   £              £                   £
Cash flow from operating activities                                      (460,632)                           (49,280)

Returns on investments and servicing of finance
Interest paid                                        (107,077)                           (73,302)
Interest received                                          923                                216
                                                                         (106,154)                           (73,086)
Taxation                                                                         -                                  -

Capital expenditure and financial investment
Purchase of tangible fixed assets                     (29,571)                           (81,525)
Receipts from sale of tangible fixed assets             13,342                                  -
                                                                          (16,229)                           (81,525)
Cash (outflow)before financing                                           (583,015)                          (203,891)

Financing
New bank loans                                         500,000                            333,336
Repayment of borrowings                               (18,520)                                  -
                                                                           481,480                            333,336

(Decrease)/increase in cash in the year                             £    (101,535)                      £     129,445

Reconciliation of net cash flow to
   movement in net debt

(Decrease)/increase in cash in the year                                  (101,535)                            129,445
Cash (inflow) from (increase) in debt                                    (481,480)                          (333,336)
                                                                         (583,015)                          (203,891)
Net debt at 1st January 2005                                           (1,118,115)                          (914,224)
Net debt at 31st December 2005                                       £ (1,701,130)                       £(1,118,115)






TOYE & COMPANY p.l.c.
Group Statement of total recognised gains and losses and Other Statements
FOR THE YEAR ENDED 31st December 2005

                                                                                                  As restated
                                                                                 2005                    2004

                                                                                    £                       £
Group Statement of Total Recognised Gains and Losses
Profit for the financial year                                                   3,870                 536,513
Actuarial gain and related tax                                                      -                 275,000
Total recognised gains and losses relating to the year                  £       3,870        £        811,513
Prior year adjustment                                                       (775,640)
Total recognised gains and losses since previous year end               £   (771,770)



Other Statements
Note of historical cost profits and losses
Profit on ordinary activities before taxation                                   3,870                 536,513
Difference between historical cost depreciation
   charge and actual depreciation calculated on                                26,314                  26,314  
   revalued amounts
Historical cost profit on ordinary activities
   before taxation                                                     £       30,184        £        562,827

Historical cost profit for the year retained                           £       30,184        £        562,827

Reconciliation of movements in Group Shareholders' funds
Profit for the financial year                                                   3,870                 536,513
Other recognised gains and losses                                                   -                 275,000
Net increase in Shareholders' funds                                             3,870                 811,513
Opening Shareholders' funds (originally £2,715,443 before
deducting prior year adjustment of £775,640)
                                                                            1,939,803               1,128,290
Closing Shareholders' funds                                              £  1,943,673         £     1,939,803






Chairman's Statement



RESULTS

Turnover for the year ended 31st December 2005 amounted to £8,227,663 as against
£8,009,919 for the previous year. The improvement in sales occurred principally
in the first half year, which benefited from two large contracts, which were won
on reduced margins. The increase in sales resulted in a small profit of £3,870
as against £27,705 for the previous year. However, as detailed in the Directors
Report, the prior year's figures had to be restated in order to comply
with the Financial Reporting Standard 17 (Retirement Benefits). The effect of
this has been to restate profit for 2004 at £536,513, replacing the figure
previously reported in the 31st December 2004 Report and Accounts as £27,705.


DIVIDEND

Profit at this level, combined with the adverse cash flow through paying
£579,430 to the Pension Scheme in full and final settlement of the Company's 
obligations to the Scheme, means that your Board continues to
consider that it would be imprudent to pay a dividend.



TRADING

Whilst turnover in the first half of the year showed progress on the previous
year, the second half was significantly weakened by the adverse trading
conditions following the London July bombings which permeated most of our UK
market areas and, in particular, the sales to UK jewellery and men's
accessory and tailoring shops.


As a direct result of the second half downturn, a further review of the cost
base was undertaken to bring it more into line with sales and trading. This
resulted not only in redundancy costs, coupled with money in lieu of notice,
during this period, but also caused associated disruption to the manufacturing
departments concerned.


Although the Retail Division had a difficult year for reasons outside of our
control, the Regalia Division continued to prosper by supplying the highest
quality product and providing an excellent service in a market that is declining
for most within the UK but has pockets of growth overseas.


Expansion has also taken place in our traditional regimental and uniform markets
but much of the business has been won by significantly more competitive pricing.
Sales to Associations, Clubs, Corporations and other similar organisations
improved.


The refurbishment of the offices and showrooms in Great Queen Street have been
well received and have, for the first time, a lower showroom display of Group
custom designed products with areas set aside for customer reception. This
brings the capability to cross sell other products to many customers who until
now may have seen the Company as a single product supplier.


To retain margin, the Company is adopting a careful mix of global procurement
along with the Company's retained areas of certain specialist
manufacture, to keep the product knowledge within the Company and provide a
supply capability that might be needed with any emergency within those countries
that have become principal suppliers to the Company.


Of general concern are the increases in oil, gold, silver, copper and other raw
material costs through increased demand from Asia and the Far East coupled with
the trend to move from property and equity investment to commodities.
Additionally, the increases in Council tax and energy costs are matters of
considerable concern. The cost of airfreight is significant, as the increases
are difficult to recover on long-term contracts.


Furthermore, during the year, the supply base optimization programme being
conducted by the Ministry of Defence has caused extreme delays on the usual
level of procurement and the Government strategy for national and regional
procurement has also held back normal period purchases for Police Constabularies
and Fire Brigades.


MANAGEMENT AND STAFF

I should like to thank all the Management and Staff for their continued support.
It is pleasing to see the younger members recruited to the Management Team
blending well and contributing significantly to the older established Management
Team, which augurs well for the future development of the business, through the
enthusiasm and commitment of everyone employed by the Company.


PENSION FUND

As reported last year, an agreement was reached between the Trustees of the
Pension Scheme and the Company. During 2005 payments were made into the scheme
in full and final settlement of the Company's obligations, amounting to
£579,430, which included a contribution towards the professional fees of the
Scheme. Although this removed the uncertainty of the future funding of the
Scheme, the Company will now have to cover the cost of interest and generate the
cash required to repay the loan that has been taken up in order to fund the
payment.


ENVIRONMENTAL POLICY

The Company is committed to a policy that recognises environmental issues in all
aspects of its activities and environmentally sensitive options are integrated
in all levels of operation.


CORPORATE GOVERNANCE

The Board supports a high standard of Corporate Governance by adopting those
features of the Code that are appropriate. Nonetheless, they are onerous and
expensive. Furthermore, the business is not helped by the continuous increase in
our cost base caused by European Union and other directives. Your Board foresees
further burdens yet to come, which will be made more onerous by remaining in the
public domain. These issues must question the benefit of your Company continuing
with a formal listing.


HEALTH AND SAFETY

The Executives of your Company are committed in the application of all aspects
of Health and Safety at work and all related directives. However, the volume of
such directives and the limitations at times for implementation are proving to
be unduly burdensome on management who have many other calls on their time, not
least running the business.


FUTURE

Many of our customers are asking us to manufacture or source cheaper
alternatives to reduce their own cost base. Furthermore, the Ministry of Defence
and Civil Authorities are increasingly going to competitive tender to place
long-term contracts with single suppliers. Both aspects have a detrimental
effect on the Company in terms of UK manufactured product.

We have identified additional off shore suppliers who will undoubtedly continue
to replace UK manufactured products so as to enable your Company to retain
margin through reduced costs whilst meeting customers' budgets.


As a direct result, this has immediately led to the necessity for further UK
manufacturing cost savings in those departments affected, through redundancies,
during spring 2006, both within the Weston Cap business at Bedworth and in the
Cornelia James Neckwear business at Bury St Edmunds, the staff of the latter
business having voluntarily reduced their working week without recompense.


In this respect the increase of the national minimum wage by 20p for 2005 and a
proposed further escalation of 30p per hour for October 2006 not only leads to
difficulties in maintaining differentials in the pay structure for different
skill bases, but such cost increases simply accelerate the demise of UK
manufacturing, whilst ignoring regional differentials of which the perceived
national pay structure takes no account.


Advances with development into supply chain management and logistics is
progressing well, alongside product development. Your Board clearly sees this as
the way forward for your Company, with the cost of UK manufacturing becoming
less competitive against externally sourced product.


Fortunately, we have secured a substantial share of a long awaited Ministry of
Defence contract worth in the region of £2 million for the supply of insignia
for the UK armed services. The contract, spread over five years, is for metal
badges, buttons and textile rank markings.


However, during the course of this year there will be some significant capital
expenditure in reorganising the Birmingham factory and acquiring new specialist
equipment essential to produce efficiently the very specialist metal
requirements needed and to support other ongoing business. These costs will fall
mainly into the current year with the benefits not accruing until the last three
years of the contract.



The Company has had a long and successful association with the Ministry of
Defence and is delighted to have won such a significant contract against tough
UK and European competition. We were the only Company to receive a major portion
of each of the tender's five categories, supplying every arm of the
Navy, Army and RAF. A great deal of effort went into preparing the tender
including costing over 3,000 individual items and ensuring compliance with
Ministry of Defence stringent business criteria.


The Ministry of Defence contract continues a string of successes in the export,
corporate and retail sectors. The year under review carried high development
costs, researching and preparing new designs for the retail range for the trade
market. These were launched in January 2006. I am pleased to report that our
confidence in the design team has proved well founded. The ranges have been much
sought after by many new as well as existing clients from their launch, both in
the UK and overseas.


A tremendous team effort throughout the Company has gone into achieving all
these recent successes, which bodes well for the future.








Bryan Toye
Chairman
28th April 2006




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