Oliver Group PLC
25 October 2000
The following announcement replaces the 'Offer by Benson Shoe, etc.'
announcement released today, 25 October 2000 at 0900 in two parts under RNS
numbers 0209T and 0158T. In Appendix II of the announcement, the table showing
the income effect of acceptances, should read 0.64 under 'Gross income from
cash consideration' and 'Increase in gross income' and not 0.53 as previously
stated.
The full amended text appears below
Not for release, distribution or publication in or into the United States,
Canada, Australia or Japan
The Oliver Group Plc ('Oliver')
Recommended Cash Offer
by
PricewaterhouseCoopers Corporate Finance
for and on behalf of
Benson Shoe Limited ('Benson Shoe')
and
Interim Results for the 26 weeks to 29 July 2000
HIGHLIGHTS
1. The Offer
* Benson Shoe, a privately owned shoe retailer, is offering 12p in
cash for each Oliver Share.
* The offer values the entire issued share capital of Oliver at
approximately £6.1m.
* The Offer is unanimously recommended by the board of Oliver.
2. Interim Results
* Oliver records first half loss of £2.5m before tax and
exceptionals (1999: restated loss £1.9m).
* Exceptional write-down of assets of £8.4m. Loss before tax and
after exceptionals of £10.9m (1999: restated loss £2.0m)
* Despite improving trends, the outcome for the year, as ever,
depends on performance over the key Christmas and January 2001 trading
period.
The chairman of Oliver commented:
'The recommended offer for Oliver by Benson Shoe is a welcome move in the
overdue consolidation of the UK footwear retail sector. The terms of Benson
Shoe's offer will allow Oliver's shareholders to exit an under-performing
investment at a fair and reasonable price.'
The chairman of Benson Shoe commented:
'We are delighted to have the opportunity to acquire Oliver, with its
complementary spread of stores, and continue the growth of Benson Shoe. This
acquisition marks the start of an exciting phase in our development.'
This summary should be read in conjunction with the attached announcement.
Press Enquiries:
Benson Shoe Limited The Oliver Group plc
Michael Smith Doug Rogers/Paul Ryan
Tel: 0116 248 8832 Tel: 0116 222 3000
PricewaterhouseCoopers Corporate Finance Brewin Dolphin Securities Limited
Colin Gillespie Frank Malcolm
Tel: 0161 245 2224 Tel: 0131 529 0311
Richard Pulford Citigate Dewe Rogerson
Tel: 0161 245 2520 Fiona Tooley
Tel: 0121 631 2299 or 07785 703523
Brewin Dolphin Securities Limited (a member of the London Stock Exchange and
regulated in the UK by The Securities and Futures Authority Limited) is acting
exclusively for Oliver and no-one else in connection with the Offer and will
not be responsible to anyone other than Oliver for providing the protections
afforded to customers of Brewin Dolphin Securities Limited nor for giving
advice in relation to the Offer.
PricewaterhouseCoopers Corporate Finance, the Corporate Finance division of
PricewaterhouseCoopers, which is authorised to carry on investment business by
the Institute of Chartered Accountants in England and Wales, is acting for
Benson Shoe and no-one else in connection with the Offer and will not be
responsible to anyone other than Benson Shoe for providing the protections
afforded to customers of PricewaterhouseCoopers Corporate Finance or for
giving advice in relation to the Offer.
This announcement does not constitute an offer or invitation to purchase any
securities.
The availability of the Offer to persons not resident in the United Kingdom
may be affected by the laws of the relevant jurisdiction. Persons who are not
resident in the United Kingdom should inform themselves about and observe any
applicable requirements.
The Offer will not be made, directly or indirectly, in or into, or by use of
the mails of, or by any means or instrumentality (including, without
limitation, facsimile transmission, telex, telephone or e-mail) of interstate
or foreign commerce of or of any facility of a national securities exchange of
the United States, Canada, Australia or Japan and the Offer will not be
capable of acceptance by any such use, means, instrumentality or facility or
from within the United States, Canada, Australia or Japan. Accordingly, copies
of this announcement are not being, and must not be, directly mailed or
otherwise distributed or sent in or into the United States, Canada, Australia
or Japan and persons receiving this announcement (including custodians,
nominees and trustees) must not distribute or send this announcement in or
into or from the United States, Canada, Australia or Japan. Doing so may
render invalid any purported acceptance.
Not for release, publication or distribution in or into the United States,
Canada, Australia or Japan
PART I
Recommended Cash Offer
by
PricewaterhouseCoopers Corporate Finance
for and on behalf of
Benson Shoe Limited ('Benson Shoe')
for
The Oliver Group Plc ('Oliver')
1. Introduction
The boards of Benson Shoe and Oliver announce today that they have reached
agreement on the terms of a recommended cash offer to be made by
PricewaterhouseCoopers Corporate Finance on behalf of Benson Shoe for the
whole of the issued and to be issued share capital of Oliver.
2. The Offer
On behalf of Benson Shoe, PricewaterhouseCoopers Corporate Finance will
offer to acquire, subject to the conditions and further terms set out in
Appendix I to this announcement and to be set out in the Offer Document
and the Form of Acceptance, all of the Oliver Shares on the following
basis:
for each Oliver Share 12p in cash
The Offer represents a premium of approximately 14 per cent. to the
Closing Price of 101/2p per Oliver Share on 3 October 2000, (the last
dealing day prior to the announcement by Oliver that it was in discussions
which might lead to an offer). The Offer values the entire issued share
capital of Oliver at approximately £6.1 million.
The cash payable under the Offer will be provided by Benson Shoe funded by
new bank facilities from Bank of Scotland.
The Oliver Shares which are subject to the Offer will be acquired by
Benson Shoe fully paid and free from all liens, equities, charges,
encumbrances and other interests and together with all rights now or
hereafter attaching thereto, including the right to receive and retain any
dividends or other distributions (if any) declared, made or which may
become payable after the date of the Offer Document.
Further details of the bases and sources of the financial information on,
and the financial effects of acceptance of the Offer, are set out in
Appendix II of this announcement.
3. Recommendation and irrevocable undertakings
The Oliver Directors, who have been so advised by Brewin Dolphin
Securities, consider the terms of the Offer to be fair and reasonable. In
providing advice to the Oliver Directors, Brewin Dolphin Securities has
taken into consideration the Oliver Directors' commercial assessments.
Accordingly, the Oliver Directors unanimously recommend Oliver
Shareholders to accept the Offer as they and their connected parties have
irrevocably undertaken to do in respect of the holdings in which they are
beneficially interested, amounting in aggregate to 2,119,808 Oliver
Shares, representing 4.2 per cent. of Oliver's existing issued share
capital.
Benson Shoe has received irrevocable undertakings to accept the Offer from
certain Oliver Shareholders, including all of the Oliver Directors who are
also Oliver Shareholders, in respect of a total of 30,665,013 Oliver
Shares representing 60.7 per cent. of the existing issued share capital of
Oliver. An undertaking provided in respect of 7.9% of the existing issued
share capital of Oliver ceases to be binding in the event of a competing
offer being made for Oliver which is at least 13.5p. The other
undertakings cease to be binding in the event that the competing offer is
at least 13p (in respect of 23.1% of the issued share capital of Oliver)
or at least 15p (in respect of 29.7%), but only if the competing offer is
made within ten days of the date on which the Offer Document is posted.
4. Information on Oliver
The Oliver Group owns and operates a chain of footwear retail outlets
trading under the Oliver, Timpsons and Olivers Timpson names, located in
most parts of Great Britain. Head office and warehousing facilities are
situated in Leicester. Oliver operates in the middle-market or 'family'
sector of the footwear market and sells ladies', men's and children's
footwear.
For the 52 weeks to 29 January 2000, Oliver reported turnover of £72.9
million (1999: £73.9 million), restated loss on ordinary activities before
tax of £3.2 million (1999: restated £0.5 million) and restated loss per
share of 6.42p (1999: restated 1.26p). As at 29 January 2000, Oliver had
restated consolidated net assets of £17.1 million (1999: restated £20.3
million). In total, loan note and net bank borrowings averaged £8.3
million through the 1999/2000 financial year and were £8.1 million at 29
January 2000.
Oliver's interim results for the 26 weeks to 29 July 2000 are announced
today. A summary is set out under 'Reasons for recommending the Offer'
below, and the full text of the announcement, which also contains details
of current trading, is set out in Part II of this announcement.
5. Information on Benson Shoe
Benson Shoe is a privately owned multiple discount footwear retailer with
more than 180 stores in the UK and Ireland. A wholly owned subsidiary of
No. 310 Leicester Limited, Benson Shoe predominantly trades as Discount
Shoe Zone in England & Wales and Tylers and Tylers Express in Ireland.
Since January 1993, Benson Shoe has grown its turnover by over 85 per
cent. and continues to seek opportunities for further expansion.
For the year ended 1 January 2000, Benson Shoe reported turnover of £41.5
million (1999: £35.8 million) and profit before tax of £1.1 million (1999:
£0.6 million). As at 1 January 2000, Benson Shoe had consolidated net
assets of £3.8 million (1999: £3.3 million).
6. Reasons for recommending the Offer
Oliver has reported losses, before and after both tax and exceptional
items, for each of the three financial years to 29 January 2000. Interim
results for the 26 weeks to 29 July 2000 show a pre-exceptional loss on
ordinary activities before tax of £2.5 million. These losses were, and
are, primarily due to the combination of a declining market, the rapid
expansion of non-specialist competition, uneconomic pricing by competitors
and rising cost pressures. Taking into account these adverse trading
conditions and the Offer from Benson Shoe, the Oliver Directors reviewed
the carrying value of certain of Oliver's fixed assets and decided to
recognise an exceptional write-down of asset values of £8.4 million,
resulting in a loss on ordinary activities before tax but after
exceptional items, of £10.9 million for the period.
According to official and industry figures, consumer spending on footwear
was weak in both 1998 and 1999. Independent research also shows that, for
many years, footwear multiples such as Oliver have consistently lost
market share to, inter alia, clothing multiples and discount retailers.
Meanwhile, competitive forces and consumer price stability have together
produced an environment of at best flat, and at worst deflationary,
selling prices for footwear products.
Faced with this difficult market, Oliver has worked hard to contain its
costs. There are, however, limits to what can be achieved in terms of cost
reduction. The market Oliver serves, and its position in them, depends
greatly on its ability to maintain high standards of product quality and
customer service, both of which cannot be compromised if its competitive
position is to be maintained.
Oliver's response to this unsatisfactory trading background has been a
programme of store rationalisation and upgrading. Over the three years to
January 2000, it has closed a total of 58 stores, opened 16 stores and
undertaken the extensive refurbishment of a further 65. The new and
refurbished stores have generated significant increases in turnover, but
their performance has been unable to compensate for the performance of the
unrefurbished units, which has been below expectations. This has in turn
affected its ability to raise external investment finance and so the pace
at which the modernisation programme can be progressed.
In October 1999, Doug Rogers was appointed Chairman of Oliver, and Donald
Macpherson and David Stevenson became non-executive directors. Since then,
the Board has conducted a thorough review of the Company's future and has
concluded that, in view of the poor market background and the competitive
position it faces, Oliver could not remain as it is, without the resources
to implement its modernisation policy more speedily. In any event,
continuing losses were considered to be unacceptable. The Board therefore
determined that Oliver should pursue one of two options: to merge with,
acquire or be taken over by a company with similar or complementary
interests in footwear retailing (thereby being better placed to
rationalise operations and ameliorate competitive pressures); or, if
necessary, to withdraw from footwear retailing completely.
The Board has been active in pursuing both of these options. The
negotiations with Benson Shoe have proved to be by far the most fruitful,
and have resulted in the Offer.
Benson Shoe, being a discount retailer, targets a different segment of the
market than Oliver. This area has shown more growth and Benson Shoe's
strategy has hitherto proved successful. Although as a business Benson
Shoe has fewer retail outlets than Oliver, its private company status,
commercial infrastructure and supportive financiers mean that Benson Shoe
appears better able to implement the changes that Oliver needs.
Accordingly, the Oliver Directors have concluded that the Offer is, in the
circumstances, the best corporate solution for Oliver and therefore is in
the best interests of Oliver Shareholders.
7. Oliver management and employees
Although the board of Benson Shoe intends to implement a number of changes
to bring about cost efficiencies, they nevertheless confirm that all the
existing employment rights, including pension rights, of all the employees
of the Oliver Group will be fully safeguarded following completion of the
Offer.
8. Oliver Share Option Schemes
The Offer will extend to any Oliver Shares issued or unconditionally allotted
as at the date of the Offer together with any further such shares which are
unconditionally allotted or issued whilst the Offer remains open for
acceptance (or by such earlier date as Benson Shoe may, subject to the City
Code, determine, being not earlier than the date on which the Offer becomes
unconditional as to acceptances or, if later, the first closing date of the
Offer), including any Oliver Shares which are unconditionally allotted or
issued pursuant to the exercise of share options granted under the Oliver
Share Option Schemes. To the extent that such options are not exercised and in
the event that the Offer becomes or is declared unconditional in all respects,
appropriate proposals will be made, in due course, to the holders of options
under the Oliver Share Option Schemes.
9. Financing of the Offer
Bank of Scotland has agreed to make available £15.0 million of term loans for
the purposes of assisting in the finance of the Offer, refinancing Oliver's
existing borrowings and paying related expenses in connection with the Offer
and also an additional working capital facility.
The financing from Bank of Scotland is conditional, inter alia, on the Offer
becoming or being declared wholly unconditional and on receipt of valid
acceptances of the Offer (and such acceptances, where permitted by the City
Code, not having been withdrawn) in respect of 90 per cent. (or such lesser
percentage as Bank of Scotland may agree) in nominal value of the Oliver
Shares to which the Offer relates.
10. Disclosure of interests in Oliver
At the close of business on 24 October 2000 (being the last practicable date
prior to this announcement), Benson Shoe beneficially owned 25,000 Oliver
Shares.
Save as set out herein, neither Benson Shoe nor, to the best of Benson Shoe's
knowledge and belief, any person acting in concert with Benson Shoe for the
purposes of the Offer, owns or controls any Oliver Shares or any options to
purchase any Oliver Shares or has entered into any derivative referenced to
securities of Oliver which remains outstanding.
11. General
The Offer will be subject, inter alia, to the conditions and the further terms
set out in Appendix I to this announcement and to be set out in the Offer
Document and Form of Acceptance. The formal Offer Document, together with a
Form of Acceptance, will be posted to Oliver Shareholders and, for information
only, to participants in the Oliver Share Option Schemes, as soon as
practicable.
Press Enquiries:
Benson Shoe Limited The Oliver Group plc
Michael Smith Doug Rogers/Paul Ryan
Tel: 0116 248 8832 Tel: 0116 222 3000
PricewaterhouseCoopers Corporate Finance Brewin Dolphin Securities Limited
Colin Gillespie Frank Malcolm
Tel: 0161 245 2224 Tel: 0131 529 0311
Richard Pulford Citigate Dewe Rogerson
Tel: 0161 245 2520 Fiona Tooley
Tel: 0121 631 2299 or 07785 703523
Brewin Dolphin Securities Limited (a member of the London Stock Exchange and
regulated in the UK by The Securities and Futures Authority Limited) is acting
exclusively for Oliver and no-one else in connection with the Offer and will
not be responsible to anyone other than Oliver for providing the protections
afforded to customers of Brewin Dolphin Securities Limited nor for giving
advice in relation to the Offer.
PricewaterhouseCoopers Corporate Finance, the Corporate Finance division of
PricewaterhouseCoopers, which is authorised to carry on investment business by
the Institute of Chartered Accountants in England and Wales, is acting for
Benson Shoe and no-one else in connection with the Offer and will not be
responsible to anyone other than Benson Shoe for providing the protections
afforded to customers of PricewaterhouseCoopers Corporate Finance or for
giving advice in relation to the Offer.
This announcement does not constitute an offer or invitation to purchase any
securities.
The availability of the Offer to persons not resident in the United Kingdom
may be affected by the laws of the relevant jurisdiction. Persons who are not
resident in the United Kingdom should inform themselves about and observe any
applicable requirements.
The Offer will not be made, directly or indirectly, in or into, or by use of
the mails of, or by any means or instrumentality (including, without
limitation, facsimile transmission, telex, telephone or e-mail) of interstate
or foreign commerce of or of any facility of a national securities exchange of
the United States, Canada, Australia or Japan and the Offer will not be
capable of acceptance by any such use, means, instrumentality or facility or
from within the United States, Canada, Australia or Japan. Accordingly, copies
of this announcement are not being, and must not be, directly mailed or
otherwise distributed or sent in or into the United States, Canada, Australia
or Japan and persons receiving this announcement (including custodians,
nominees and trustees) must not distribute or send this announcement in or
into or from the United States, Canada, Australia or Japan. Doing so may
render invalid any purported acceptance.
PART II
Oliver interim results for the 26 weeks to 29 July 2000
The following is the text of the unaudited interim results statement of Oliver
for the 26 weeks to 29 July 2000, released today.
'Chairman's statement
Dear Shareholder,
In the 26 weeks to 29 July 2000 the Oliver Group continued to experience
difficult trading conditions. The whole UK footwear market demonstrated
minimal growth. Total sales for the Oliver Group were, however, down 1.9 per
cent. to £33.8 million (1999: £34.5 million) and the pre-exceptional operating
loss was £2.0 million (1999 restated: £1.7 million). Exceptional charges were
£8.4 million (1999: £0.1 million). After interest costs of £0.4 million (1999:
£0.3 million), a property loss of £0.1 million (1999: profit £0.1 million) and
a nil tax charge (1999: £ nil), the retained loss for the period was £10.9
million (1999 restated: £2.0 million). Loss per share was 21.52p (1999:
restated 4.03p). No dividend will be paid.
As in prior periods the Oliver Directors reviewed the carrying value of the
balance sheet assets, which, in accordance with FRS 11, are carried at no
greater than their recoverable amounts. Following this review and in light of
the offer for Oliver announced today, the Oliver Directors decided to
recognise an exceptional write-down of asset values. This exceptional charge
of £8.4 million is shown separately in the half-year financial statements and
details are set out in note 2.
The results reflect for the first time the implementation of both FRS 15 and
the accounting guidelines in UITF Abstract 24 regarding start-up costs. The
implementation has been by means of a prior year adjustment, the impact of
which is set out in note 1 to this statement.
Due to the profile of annual demand for footwear, which is skewed
significantly towards the second half year which includes both the 'back to
school' and Christmas selling peaks, the first half of the year is typically a
period in which trading losses are recorded. Nevertheless it is disappointing
to report deterioration from last year's performance at the pre-exceptional
operating level.
During the period the Oliver Group traded from, on average, 271 stores (1999:
278 stores). There were 12 store closures while one new store was added. The
Oliver Group ended the first half with 266 stores (1999: 280) of which 85 were
in the Olivers Timpson 'family' format (1999: 74). By the end of the period,
63 of the store conversions had completed their first year's trading in the
new format at an average sales increase of 21 per cent.
Of the 85 Olivers Timpson 'family' format stores at 29 July 2000, 73 were
conversions of core Oliver Group stores while the remainder represented either
new stores or relocations. The Olivers Timpson conversions in total, including
those in their second and subsequent periods of post conversion trading,
outperformed the unconverted stores by 5 per cent. in terms of like for like
sales growth. Total company like for like sales growth was -2.7 per cent.
(1999: +2.4 per cent.).
Positive sales growth was achieved in sports footwear but sales declines were
reported in most product areas. The trend through the period was however more
encouraging as, after a first quarter in which like for like sales were -6.5
per cent., in the second quarter they were virtually level.
Pre-exceptional gross profit of £0.5 million (1999 restated: £0.8 million)
reflected a reduction in achieved product margins of 0.3 percentage points
offset by a reduction of 1 per cent. in total retail and store costs.
Distribution and administrative costs (excluding exceptional items) were also
down 1 per cent. on last year's levels.
In the first 10 weeks of the second half, which include the 'back to school'
selling period, like for like sales growth has been +0.4 per cent. The peak
demand for school footwear arose later this year as the shorter school summer
break appeared to lead to the deferral of spending on autumn product. Despite
that delay, there have been some signs of recovery in demand for many product
categories and most encouragingly for ladies' boots.
Despite improving trends the outcome for the year, as ever, depends on the
performance over the key Christmas and January 2001 trading period.
D.E. Rogers
Chairman
Consolidated profit and loss account
Restated Restated
For the 26 weeks ended 29 July 2000 for the 26 for the
52
weeks ended weeks
ended
Before After 31 29
July January
exceptional Exceptional exceptional 1999 2000
item item item (note1) (note
1)
£000 £000 £000 £000 £000
Turnover 33,830 - 33,830 34,473 72,876
Cost of sales
- normal items (33,315) - (33,315) (33,667) (70,163)
- exceptional item (note 2) - (8,406) (8,406) - -
______ ______ ______ ______ ______
(33,315) (8,406) (41,721) (33,667) (70,163)
______ ______ ______ ______ ______
Gross profit 515 (8,406) (7,891) 806 2,713
Distribution costs (1,315) - (1,315) (1,391) (2,718)
Administrative expenses
- normal items (1,184) - (1,184) (1,136) (2,391)
- exceptional items - - - (148) (151)
______ ______ ______ ______ ______
(1,184) - (1,184) (1,284) (2,542)
_____ ______ ______ ______ ______
Operating loss (1,984) (8,406) (10,390) (1,869) (2,547)
(Loss)/profit on disposal of (127) - (127) 123 (81)
properties
______ ______ ______ ______ ______
(Loss) on ordinary activities (2,111) (8,406) (10,517) (1,746) (2,628)
before interest
Net interest payable (367) - (367) (293) (620)
______ ______ ______ ______ ______
(Loss) on ordinary activities (2,478) (8,406) (10,884) (2,039) (3,248)
before tax
Tax on (loss) on ordinary - - - - -
activities
______ ______ ______ ______ ______
Retained (loss) for the (2,478) (8,406) (10,884) (2,039) (3,248)
financial period for equity
shareholders ______ ______ ______ ______ ______
Basic (loss) per ordinary share (21.52)p (4.03)p (6.42)p
Adjusted (loss) per ordinary (4.90)p (3.74)p (6.12)p
share (note 3)
Additional statements
Consolidated historical cost profits and losses
For the Restated Restated
26 for for
weeks the 26 the 52
ended weeks weeks
29 July ended 31 ended 29
2000 July
1999 January
2000
£000 £000 £000
Reported (loss) on ordinary activities before (10,884) (2,039) (3,248)
tax
Realisation of property revaluation gains of - - 293
previous periods
______ ______ ______
Historical cost (loss) on ordinary activities (10,884) (2,039) (2,955)
before tax
______ ______ ______
Historical cost retained (loss) (10,884) (2,039) (2,955)
====== ====== ======
Consolidated statement of total recognised gains and losses
For the 26 Restated Restated
for for
weeks the 26 the 52
ended weeks weeks
29 July ended 31 ended 29
2000 July
1999 January
2000
£000 £000 £000
(Loss) for the financial period (10,884) (2,039) (3,248)
Prior year adjustment (note 1) (955) - -
______ ______ ______
Total recognised gains and (losses) for the (11,839) (2,039) (3,248)
period
______ ______ ______
Reconciliation of movements in Group shareholders' funds
For the 26 Restated Restated
for for
weeks the 26 the 52
ended weeks weeks
29 July ended 31 ended 29
2000 July
1999 January
2000
£000 £000 £000
(Loss) for the financial period (10,884) (2,039) (3,248)
______ ______ ______
Net (decrease) in shareholders' funds (10,884) (2,039) (3,248)
Shareholders' funds at beginning of the 17,052 20,300 20,300
period (note 1)
______ ______ ______
Shareholders' funds at the end of the period 6,168 18,261 17,052
====== ===== =====
Consolidated balance sheet
Restated as Restated as
at at
As at 31 July 1999 29 January
29 July (note 1) 2000 (note 1)
2000
£000 £000 £000
Fixed assets
Tangible assets 9,421 19,865 18,466
Current assets
Stocks 13,802 14,070 12,052
Debtors 6,326 6,637 3,779
Cash at bank and in hand 259 91 192
______ ______ ______
20,387 20,798 16,023
Creditors
Amounts falling due within one year 23,170 21,875 17,027
______ ______ ______
Net current (liabilities) (2,783) (1,077) (1,004)
______ ______ ______
Total assets less current liabilities 6,638 18,788 17,462
Creditors
Amounts falling due in more than one 257 205 168
year
Provisions for liabilities and charges 213 322 242
______ ______ ______
6,168 18,261 17,052
===== ===== =====
Capital and reserves
Called up share capital 12,641 12,641 12,641
Share premium account 994 994 994
Revaluation reserve 4,852 5,145 4,852
Capital redemption reserve 125 125 125
Profit and loss account (12,444) (644) (1,560)
______ ______ ______
6,168 18,261 17,052
===== ===== ======
Summary consolidated cash flow statement
For the 26 Restated Restated
for for
weeks the 26 the 52
ended weeks weeks
29 July ended 31 ended 29
2000 July
1999 January
2000
£000 £000 £000
Net cash inflow/(outflow) from operating 653 (400) (637)
activities
Returns on investments and servicing of (383) (276) (549)
finance
Taxation - (6) (6)
Capital expenditure (329) (3,209) (3,261)
______ ______ ______
Cash (outflow)before financing (59) (3,891) (4,453)
Financing (93) (130) (246)
______ ______ ______
(Decrease) in cash in the period (152) (4,021) (4,699)
====== ====== ======
Reconciliation of operating loss to cash flow from operating activities
For the 26 Restated Restated
for for
weeks the 26 the 52
ended weeks weeks
29 July ended 31 ended 29
2000 July
1999 January
2000
£000 £000 £000
Operating (loss) (10,390) (1,869) (2,547)
Exceptional item - provision against fixed 8,406 - -
assets
______ ______ ______
Operating (loss) before exceptional item (1,984) (1,869) (2,547)
Depreciation charge (excluding impairment
provision) 989 1,017 2,262
(Profit)/loss on sale of fixed assets (10) 1 (2)
Movement on provisions (29) (68) (148)
(Increase) in stocks (1,750) (2,117) (99)
(Increase) in debtors (2,551) (2,681) (214)
Increase in creditors 5,988 5,317 111
______ ______ ______
Net cash inflow/(outflow) from operating 653 (400) (637)
activities
====== ====== ======
Notes
1. Change of accounting policy
Following the issue of FRS 15 'Tangible fixed assets', which is mandatory for
accounting periods ending on or after 23 March 2000 and UITF Abstract 24 -
'Accounting for start-up costs', which was issued in June 2000 by the Urgent
Issues Task Force, the Oliver Directors have reviewed the accounting treatment
of operating costs incurred whilst branches are closed for refurbishment.
The effect of this change of policy is to charge operating costs that are
attributable to the opening or re-fit of branches against income as they are
incurred. Previously such costs were deferred as a prepayment and charged to
profit over a three-year period starting on the date of commencement of trade.
The implementation of the change has been made by way of a prior year
adjustment, which will be included in the financial statements to 27 January
2001. Accordingly it is included within the interim statement covering the
first 26 weeks of that accounting period.
The impact of the change in accounting policy has had the following impact on
the profit and loss account:
26 weeks Restated Restated
for for
ended the 26 the 52
weeks weeks
29 July ended 31 ended 29
2000 July
1999 January
2000
£000 £000 £000
Increase in cost of sales 236 298 111
(Decrease)/increase in distribution costs (27) 171 203
Decrease in property costs - (8) (8)
______ ______ ______
209 461 306
====== ====== ======
The effect of the prior year adjustment on
reserves is as follows:
Adjustment to prepayments calculated at
30 January 1999 649 649
Charge to the profit and loss account in the 461 306
period
______ ______
Adjustment at 31 July 1999/29 January 2000 1,110 955
====== ======
The prepayment for pre-opening costs has been adjusted in the Group balance
sheet as follows:
As previously
stated Adjustment As restated
At 31 July 1999 £000 £000 £000
Debtors 7,747 (1,110) 6,637
Profit and loss account 466 (1,110) (644)
Equity shareholders' funds 19,371 (1,110) 18,261
At 29 January 2000
Debtors 4,734 (955) 3,779
Profit and loss account (605) (955) (1,560)
Equity shareholders' funds 18,007 (955) 17,052
2. Cost of sales - exceptional item
The Oliver Directors have reviewed the carrying value of fixed assets
in accordance with FRS 11 'Impairment of Fixed Assets and Goodwill'
taking full account of the Offer as announced on 25 October 2000. This
review indicated that it would be appropriate to adjust the carrying
value of fixed assets. Accordingly a provision of £8,406,000 was made
in the period to adjust these assets to their estimated recoverable
amount.
3. Loss per share
Basic loss per share
The loss per share has been calculated using the loss for the
financial period and the number of ordinary shares in issue throughout
the period which was 50,564,772 (26 weeks ended 31 July 1999 and 52
weeks ended 29 January 2000: 50,564,772).
Adjusted loss per share
An adjusted loss per share has been calculated in addition to the
basic loss per share as required by FRS 14 'Earnings per share' and is
based on the loss excluding the effect of the exceptional items. It
has been calculated to allow shareholders to gain a clearer
understanding of the trading performance of the Oliver Group.
Details of the adjusted earnings per share for the 26 weeks ended
29 July 2000 are set out below:
For the 26 Restated for Restated for
weeks ended the 26 weeks the 52 weeks
29 July 2000 ended 31 July ended 29
1999 January 2000
Basic earnings per share (21.52)p (4.03)p (6.42)p
Exceptional items 16.62p 0.29p 0.30p
______ ______ ______
Adjusted earnings per share (4.90)p (3.74)p (6.12)p
===== ====== ======
4. The accounts for the 26 weeks ended 29 July 2000 have not been
audited, nor have the accounts for the equivalent comparative period
in 1999. The information for the 52 weeks ended 29 January 2000
comprises figures extracted from the published accounts as restated
for the prior year adjustment detailed in note 1. The accounts for the
52 weeks ended 29 January 2000 have been filed with the Registrar of
Companies and contain an unqualified audit report.
The figures for the comparative periods to 31 July 1999 and 29 January
2000 have been restated to reflect the change in accounting policy
adopted in the financial statements for the current period ending 27
January 2001.
5. These accounts comply with relevant accounting standards and
have been prepared using accounting policies set out in the 1999/2000
report and accounts, with the exception of the change in accounting
policy explained in note 1.
6. This statement has been sent to shareholders and further copies
are available from the Registered Office of the Company.
The Oliver Group Plc
Murrayfield Road
Braunstone
Leicester LE3 1DZ
Tel: 0116 222 3000
Facsimile: 0116 222 3001
Independent review report by KPMG Audit Plc to The Oliver Group Plc ('Oliver')
Introduction
We have been instructed by Oliver to review the financial information set out
on pages 9 to 14 and we have read the other information contained in the
interim report and considered whether it contains any apparent misstatements
or material inconsistencies with the financial information.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the Oliver Directors. The
listing rules of the Financial Services Authority require that the accounting
policies and presentation applied to the interim figures should be consistent
with those applied in preparing the preceding annual accounts except where
they are to be changed in the next annual accounts in which case any changes,
and the reasons for them, are to be disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999
/4: Review of interim financial information issued by the Auditing Practices
Board. A review consists principally of making enquiries of the Oliver Group's
management and applying analytical procedures to the financial information and
underlying financial data, and based thereon, assessing whether the accounting
policies and presentation have been consistently applied unless otherwise
disclosed. A review is substantially less in scope than an audit performed in
accordance with Auditing Standards and therefore provides a lower level of
assurance than an audit. Accordingly we do not express an audit opinion on the
financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the 26 weeks
ended 29 July 2000.
KPMG Audit Plc
1 Waterloo Way
Leicester
LE1 6LP
25 October 2000 '
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