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Hamleys PLC (HYL)

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Monday 11 November, 2002

Hamleys PLC

Interim Results



Interim Statement

Interim Results for the 26-week period ended
 28th September 2002

Chairman's Statement
11th November 2002
Interim Results for the 26-week period ended 28th September 2002

Highlights

  * Profit Before Tax: £0.2m compared with a loss of £0.9m last year
  * Like for like sales at Regent Street up 10%
  * Hamleys Direct services improved - well positioned to take advantage of the seasonal upturn
  * Continued targeted expansion of the Bear Factory
  * Successful acquisition of the English Teddy Bear Company - expected to contribute in the second half of this year

Simon Burke, Chairman, commented:

'We are pleased with these results and with the continuing strong performance of our business.  We still see
considerable potential in both Hamleys and Bear Factory, which together with the successful acquisition of the English
Teddy Bear Company will allow us to grow further.'

For further information, please call:

Hamleys plc        Simon Burke, Chairman            (020) 7479 7316     
Brunswick          Rebecca Blackwood                                    
                   Melissa McVeigh                                      
                   Carolyn Esser                    (020) 7404 5959     

Financial Results
Profit before tax during the first half of the financial year was £0.2m compared with a loss of £0.5m before tax and
exceptional items last year. 

Regent Street
During the period, Regent Street achieved like for like sales growth of 10% and contribution increased by 11% over the
same period last year.  Product mix caused a temporary dip of 0.5% in gross margin during the summer, but underlying
buying margins improved further and recent performance has confirmed a resumption of overall margin growth.

Hamleys Direct
In preparation for an 80% increase in the number of autumn catalogues to be issued, improvements, including new
management and systems, were made to Hamleys Direct operations.  The new website has been successfully launched and
Internet sales are showing a year on year increase of 100%.  As expected, the financial performance of Hamleys Direct
remained unchanged when compared to the same period last year.

Bear Factory
During the period, two new Bear Factory stores were opened in Cardiff and Telford.  The contribution from Bear Factory
in the period was £0.1m. The Bear Factory launched a DVD and Video in September featuring characters sold in the
stores.

Since the period end, five new Bear Factory stores have opened in Chester, Stirling, Aberdeen, Glasgow Braehead and
Basingstoke. The store opened in Stirling is a new format store that we have developed to enable us to trade from a
smaller square footage area.  A further store will open this week in Edinburgh Ocean Terminal, bringing the total
number of UK Bear Factories to 30.  In addition, 3 stores have been successfully opened by franchisees and a further 2
stores are due to open before Christmas.

Acquisition of the English Teddy Bear Company
Hamleys successfully completed the acquisition of four stores trading as English Teddy Bear Company on 11th September
2002.  The acquisition has given us the opportunity to leverage our significant expertise in soft toys and accessories
in a complementary and well-branded business.

The plans for the restocking of the stores and their re-launch in Spring 2003 are proceeding well.  As anticipated,
these stores made no significant contribution during the period.

Cash Flow
Cash flow was £1.4m better than for the same period last year because of improved profit performance and lower capital
expenditure. 

Subsequent to the period end, the company received £3.3m in respect of the share placing that was approved by
shareholders on 4th October 2002.  This placing was well received by the market, and has allowed us to finance the
English Teddy Bear Company acquisition and reduce debts which will have a favourable impact on both interest charge and
gearing from the second half onwards. 

Dividend
The Board has decided to maintain the interim dividend of 2.2 pence per share (2001: 2.2p).  This will be paid on 17th
January 2003 to shareholders registered at the close of business on 20th December 2002.

Recent Trading and Outlook
Like for like sales growth in Regent Street since the end of September have been very strong at 23%. 

In this year's Christmas season we expect to build on the strong sales achieved last year and at this stage we see no
reason to change this view.  Both the Hamleys branded business and Bear Factory are well positioned to maximise sales
over the Christmas period with significant new ranges, especially the newly redeveloped Hamleys own-brand range which
has made a very promising start.

                                         Consolidated Profit and Loss Account                                          
                                    For the 26 week period ended 28 September 2002                                     
                                                      Unaudited                                                        
                                                                             26 week period         12 Months          
                                                                 Note   28 September  29 September   30 March          
                                                                                2002          2001       2002          
                                                                              £' 000        £' 000      £'000          
                                                                               Total         Total      Total          

         Turnover                                                             18,975        17,499     45,918          

         Operating profit / (loss) before exceptional items                      570         (127)      4,912          
         Toystack related rebranding costs                                         -         (594)      (664)          
         Release of property provision                                             -           250        250          

         Operating profit / (loss)                                   2           570         (471)      4,498          

         Net interest payable                                                  (386)         (419)      (785)          
         Profit / (loss) on ordinary activities before taxation                  184         (890)      3,713          

         Taxation on profit on ordinary activities                   3          (62)           290    (1,196)          
         Profit / (loss) on ordinary activities after taxation                   122         (600)      2,517          

         Dividends                                                             (508)         (462)    (1,533)          
         (Loss) / retained profit for the period                               (386)       (1,062)        984          

         Earnings / (loss) per share                                                                                   
         Basic                                                       5          0.6p        (2.9p)      12.0p          
         Diluted                                                     5          0.6p        (2.9p)      12.0p          
         Dividends per share                                         4          2.2p          2.2p       7.3p          
         All results are from continuing businesses.                                                                   

                                              Consolidated Balance Sheet                                               
                                                As at 28 September 2002                                                
                                                       Unaudited                                                       
                                                                              As at              As at                 
                                                             Note   28 September  29 September  30 March               
                                                                            2002          2001      2002               
                                                                          £' 000        £' 000     £'000               
               Fixed assets                                                                                            
               Intangible assets                                             901            86       105               
               Tangible assets                                            11,369        10,370    10,956               
                                                                          12,270        10,456    11,061               
               Current assets                                                                                          
               Stocks - goods for resale                                   7,476         7,573     5,542               
               Debtors                                                     2,833         3,185     1,373               
               Cash at bank and in hand                                      779           825     1,279               
                                                                          11,088        11,583     8,194               
               Creditors                                                                                               
               Amounts falling due within one year                       (7,339)       (6,311)  (17,325)               
               Net current assets / (liabilities)                          3,749         5,272   (9,131)               
               Total assets less current liabilities                      16,019        15,728     1,930               

               Creditors                                                                                               
               Amounts falling due after more than one year             (14,475)      (15,757)         -               

               Provisions for liabilities and charges                      (373)         (460)     (373)               
               Net  assets / (liabilities)                                 1,171         (489)     1,557               

               Capital and reserves                                                                                    
               Called up share capital                                     1,167         1,167     1,167               
               Share premium account                             7           321           321       321               
               Capital redemption reserve                        7         6,403         6,403     6,403               
               Profit and loss account                           7       (6,720)       (8,380)   (6,334)               
               Equity shareholders' funds                                  1,171         (489)     1,557               

                                  Consolidated Cash Flow Statement                                   
                           For the 26 week period ended 28 September 2002                            
                                              Unaudited                                              
                                                                     26 week period        12 Months 
                                                         Note  28 September  29 September   30 March 
                                                                        2002          2001       2002
                                                                      £' 000        £' 000      £'000
Net cash (outflow) / inflow from operating activities     6            (118)          (48)      7,884

Returns on investments and servicing of finance                                                      
Interest received                                                        255            55        183
Interest paid                                                          (653)         (491)    (1,010)
                                                                       (398)         (436)      (827)
Taxation paid                                                          (557)         (368)    (1,020)

Capital expenditure and financial investment                                                         
Purchase of intangible fixed assets                                     (27)           (2)       (37)
Purchase of tangible fixed assets                                      (516)       (2,840)    (4,669)
                                                                       (543)       (2,842)    (4,706)

Acquistions and Disposals                                                                            
Purchase of business                                                   (640)             -          -
                                                                       (640)             -          -

Equity dividends paid                                                (1,071)       (1,071)    (1,533)
Net cash outflow before use of liquid resources and financing        (3,327)       (4,765)      (202)

Financing                                                                                            
Receipt of bank loans                                                  2,827         4,828        719
                                                                       2,827         4,828        719
Movement in cash                                                       (500)            63        517

Reconciliation to net debt                                                                           
Balance at 31 March 2002                                            (10,369)      (10,167)   (10,167)
Net cash (outflow) / inflow                                            (500)            63        517
Movement in bank borrowings                                          (2,827)       (4,828)      (719)
Balance at 28 September 2002                                        (13,696)      (14,932)   (10,369)

                              Notes to the Financial Information                              

1 Basis of Presentation                                                                       
The financial information for the 26 week period ended 28 September 2002 and the comparative  
information for 26 week period ended 29 September 2001 are unaudited and do not constitute    
statutory accounts as defined in S240 of the Companies Act 1985.  The financial information   
has been prepared on the basis of the accounting policies set out in the Groups Annual Report 
and Accounts for the year ended 30 March 2002, and in accordance with UK generally accepted   
accounting principles. The financial information for the year ended 30 March 2002 is extracted
from the statutory accounts, which include an unqualified audit report and have been delivered
to the Registrar of Companies.                                                                

2 Segmental Reporting                                                                         

                 26 weeks ended      26 weeks ended      26 weeks ended      26 weeks ended   
               28 Sept    29 Sept   28 Sept   29 Sept   28 Sept  29 Sept    28 Sept   29 Sept 
                 2002      2001      2002      2001      2002      2001      2002       2001  
                £'000      £'000     £'000     £'000     £'000    £'000      £'000     £'000  

                 Hamleys (inc.     'Bears'                  Toystack             Total        
                  satellites)                                                                 

Turnover          12,752    12,429     6,223     2,672         -    2,398      18,975   17,499
Gross profit       6,885     6,657     4,374     1,909         -      547      11,259    9,113
Contribution       3,050     2,784       104        92         -    (742)       3,154    2,134
Central and Distribution Costs                                                (2,584)  (2,261)
Toystack related rebranding costs                                                   -    (594)
Release of property provision                                                       -      250
Operating profit / (loss)                                                         570    (471)

3 Taxation                                                                                    
The effective tax rate for 2002 of 33.5% (2001: 32.6%) is an estimate based on the anticipated
charge for the full year.                                                                     

4 Dividends                                                                                   

The interim ordinary dividend of 2.2p per share will be paid on the 17 January 2003 to        
shareholders registered at the close of business on 20 December 2002.                         

Subsequent to the period end, the company issued 2,100,615 new shares via a placing. The      
placing was approved by shareholders at an EGM held 4th October 2002. As a result of this     
placing , the dividend payable in January 2003 reflects the increased issued share capital.   

5 Earnings Per Share                                                                          

Basic earnings per share is calculated by dividing the earnings attributable to ordinary      
shareholders by the weighted average number of ordinary share in issue during the period of   
20,939,290 (2001: 20,939,290).                                                                

For diluted earnings per share, the weighted average number of ordinary shares in issue is    
adjusted to assume conversion of all dilute potential ordinary shares. The Group has only one 
category of dilute potential ordinary shares: those share options granted to employees where  
the exercise price is less than the average market price of the Company's ordinary shares     
during the period.                                                                            

6 Reconciliation of operating profit / (loss) to net cash (outflow) / inflow from             
operating activities                                                                          

                                                                  As at      As at     As at  
                                                                 28 Sept    29 Sept   30 March
                                                                   2002      2001       2002  
                                                                  £' 000    £' 000     £' 000 

Operating profit /                                                    570       (471)    4,498
(loss)                                                                                        
Amortisation on intangible fixed assets                                22          14       30
Depreciation on tangible fixed assets                                 851         798    1,593
Exceptional write off on disposal of Toystack fixed                     -         696      669
assets                                                                                        
(Increase) / decrease in stocks                                   (1,934)     (1,374)      657
(Increase) / decrease in debtors                                  (1,460)     (1,188)      445
Increase in creditors                                               1,833       1,577      242
Decrease in provisions for liabilities and charges                      -       (100)    (250)
Net cash inflow/(outflow) from operating activities                 (118)        (48)    7,884

7 Reserves                                                                                    
                                                                  Share     Capital    Profit 
                                                                                        and   
                                                                  Premium  Redemption   Loss  
                                                                  Account   Reserve    Account
                                                                  £' 000    £' 000     £' 000 

At 31 March 2002                                                      321       6,403  (6,334)
Loss for the period                                                     -           -    (386)
At 28 September 2002                                                  321       6,403  (6,720)

The parent company 's distributable reserves within the profit and loss account at 30         
September were £3,093,000 (At 30 March 2002 £3,700,000) .                                     

8 Interim Report                                                                              

The interim report for the 26 week period ended 28 September 2002 was approved by the         
directors on 8 November 2002.                                                                 
The report will be posted to all shareholders by 15 November 2002 and is available            
from the company secretary at the Registered Office: 188-196 Regent Street, London            
W1R 6BT.                                                                                      

Registered Office

                                                      Hamleys plc                                                      
                                                 188-196 Regent Street                                                 
                                                    London W1R 6BT                                                     
                                              Registered Number: 2352435                                               

                                               Telephone: 0870 333 2455                                                
                                                  Fax : 020 7479 7319                                                  

                                                     Buy Online at                                                     

                                                    www.hamleys.com                                                    

                                                          and                                                          

                                                 www.bearfactory.co.uk                                                 

                                                          and                                                          

                                                    www.teddy.co.uk                                                    

						                                                                                                                                                                    

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