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Osborne & Little PLC (OSL)

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Thursday 13 June, 2002

Osborne & Little PLC

Final Results

Osborne & Little PLC
13 June 2002



                              Osborne & Little plc
              Preliminary Results for the year ended 31 March 2002



Chairman's Statement

The most significant event I have to report is the retirement in July, as Design
Director, of my partner of some 35 years, Antony Little. I leave it to Antony,
in his statement below, to elaborate.

Whilst it is extremely sad to be losing Antony's full time commitment, I share
his confidence that the transition will be smooth and successful.

Elizabeth Ockford will be appointed Design Director as from 1 July 2002.



FINANCIAL OVERVIEW

At the half year stage I reported a loss, before taxation, of £308,000. I
briefly outlined the reasons for this, our first ever loss: the complex
introduction of our new SAP computer system; the tragic events of September 11
with their consequent impact on sales not only in the USA but in all our major
markets; and a general background of difficult trading conditions.

I am pleased to report that, despite no improvement in sales, we have stemmed
the losses and produced a full year profit, before taxation, of £414,000, a
turnaround in the second half of £722,000. Whilst this result needs to be
compared with last year's profit, before taxation, of £4,237,000, there are
solid reasons, which I expand on below, for believing that we are well on the
way to recovery. Earnings per share were 3.87p (2001 - 45.10p restated).

Turnover was down 11% at £36.6 million (2001- £40.9 million) with the percentage
decreases evenly spread across our major markets, USA, UK and Europe.

I referred in my half year statement to the overrun on costs and timetable of
our new SAP computer system. I am now able to report that it is fully
operational and performing up to our highest expectations. The computer system
went live in the USA in January 2002 and we intend to introduce an e-commerce
facility to our principal agents and distributors within the next few months. I
truly believe that we now have the most advanced IT system of any company in our
field.

Cost saving measures that we have implemented recently include:-

 • closing our French and German offices and routing all orders to
   our Head Office where we have established desks manned by bi-lingual staff. 
   We will continue to employ our own sales personnel in both countries.

 • reintroducing carriage charges in the UK bringing us in line with our 
   competitors.

 • carefully and judiciously pruning our promotional and advertising 
   expenditure.

Whilst some of these savings have already had a positive impact on the year I am
reporting on, the full benefit will be seen in the year ending 31 March 2003.
Further savings are in the throes of being identified.

Another factor that will work in our favour this year is the exchange rate at
which we convert the revenues received from our USA subsidiary. Last year, as a
result of forward exchange contracts maturing, this averaged 1.56; this year it
should be quite significantly lower, assuming there is no radical weakening of
the dollar.

There has been a cash outflow, in the course of the year, of £2.2 million.
Whilst our net borrowings are only £448,000, a gearing of 4%, your Board has
considered it prudent not to declare a final dividend. Some 70% of shares are
held by members of the Board.

Our policy has been to distribute to shareholders, via dividend, a substantial
part of our annual profits. Our intention is to return, as soon as possible, to
previous levels of dividend payments.



Comments on our major markets follow:-


NORTH AMERICA

Sales were down 10% at £18.3 million (2001 - £20.4 million). At the half year
stage they were down 7%. The events of September 11 obviously had a big impact
but I am pleased to report that we have seen a slight recovery in the past few
months, including April and May, with sales back at last year's levels.

In March we took over the running of our Los Angeles Showroom from our agent.
Our own showrooms in New York, Washington, Chicago, San Francisco and Los
Angeles will account for approximately 50% of total North American sales; we
believe this provides a balanced portfolio.



UNITED KINGDOM

Sales were down 12% at £11.8 million (2001 - £13.5 million), the same percentage
decrease as at the half year. Contract sales, down 20%, have been hard hit by
the slowdown in hotel expenditure. However, as with North America, we are seeing
encouraging signs of a modest return to growth.

In March we renewed the lease on our Merton warehouse for a further 12 years,
and are finalising negotiations to renew our Chelsea showroom lease for a
further 15 years.



REST OF THE WORLD

Sales were down 9% at £6.4 million (2001 - £7.0 million), the same percentage
decrease as at the half year. As mentioned above we have taken cost cutting
measures in France and Germany which will ensure that these two markets are
profitable. Europe, as a whole, continues to be challenging.

In Australia and New Zealand we have switched to another distributor. We are
encouraged by initial reactions and very much hope that these two markets, which
have declined over the past few years, will revert to growth.



NEW COLLECTIONS

Our Autumn 2001 and Spring 2002 collections have been very well received across
the three brands, Osborne & Little, Nina Campbell and Liberty Furnishings. We
are continuing to place added emphasis on our weave products, an area, we
believe, of potential growth.



FUTURE TRADING AND PROSPECTS

As I mentioned earlier, there are small signs of recovery in the UK and in North
America, which together account for 83% of Group sales. If this continues, and
with cost savings already implemented, we can look forward to a much improved
trading performance.

I congratulate and thank our employees for having coped so well throughout the
past year with the steep learning curve of the new computer technology against
the background of tough market conditions.



Sir Peter Osborne Bt.
Chairman

13 June 2002

Enquiries
Osborne & Little plc  020 8675 2255
Sir Peter Osborne Bt. (Chairman)  07799 691757
Peter Soar (Finance Director)  020 8675 2255




                          Statement from Antony Little
                     Design Director of Osborne & Little plc


During the past 35 years it has been my privilege to be Design Director of
Osborne & Little. I will be 60 in December and I have decided that this is the
appropriate time to pass on the responsibility to a younger generation.

Over the years we have built up an excellent group of designers, all talented
and experienced.

In 1991 Elizabeth Ockford joined the studio, and in 1999 she was appointed Head
of Design. Over the past three years I have been steadily delegating
responsibilities to her for all studio activities. I am now completely confident
that Elizabeth should take on the full role of Design Director.

I will continue with my interest in the Company as Design Consultant and as a
non-executive director. I do not have any current intention to sell any of my
shares in Osborne & Little.

I have greatly enjoyed helping to build Osborne & Little into one of the major
companies in our field and I look forward to my on-going contribution, and to
the future success of Osborne & Little.



Antony Little
Design Director

13 June 2002




CONSOLIDATED PROFIT AND LOSS ACCOUNT

Year ended 31 March                                                                       2002       As restated
                                                                       Notes                            (note 5)
                                                                                                            2001
                                                                                          £000              £000

Turnover                                                                                36,552            40,919
Cost of sales                                                                         (15,406)          (16,718)
Gross profit                                                                            21,146            24,201

Operating profit                                                                           494             4,108
Net Interest (payable)/ receivable                                                        (80)               129
Profit on ordinary activities before taxation                                              414             4,237
Taxation on ordinary activities                                                          (178)           (1,464)
Profit for the year                                                                        236             2,773
Dividends                                                                  1             (793)           (1,953)
Retained (loss)/profit for the year                                                      (557)               820

Earnings per share                                                         2             3.87p            45.10p

Diluted earnings per share                                                 2             3.78p            43.95p



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.



CONSOLIDATED SUMMARISED BALANCE SHEET

At 31 March                                                                                          As restated 
                                                                                                        (note 5)
                                                                                          2002              2001
                                                                                          £000              £000

Fixed assets                                                                             4,494             4,589
Current assets
Stocks                                                                                   7,843             9,016
Debtors                                                                                  7,313             6,734
Cash                                                                                     1,398             1,776
Current assets                                                                          16,554            17,526
Current liabilities
Creditors                                                                                8,552             9,022
Equity shareholders' funds                                                              12,496            13,093




STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES

Year ended 31 March                                                     Note                         As restated 
                                                                                                        (note 5)
                                                                                          2002              2001
                                                                                          £000              £000

Profit for the year                                                                        236             2,773
Currency translation differences on foreign currency net                                     9                87
investments
Total recognised gains and losses for the year                                             245             2,860
Prior year adjustment                                                      5               609                 -
Total recognised gains and losses since last annual report                                 854             2,860




CONSOLIDATED SUMMARISED CASH FLOW STATEMENT

Year ended 31 March                                                     Note              2002              2001
                                                                                          £000              £000

Cash inflow from operating activities                                      4             1,595             3,492
Returns on investments and servicing of finance
Net interest (paid)/ received                                                             (80)               129
Taxation                                                                                 (577)           (2,135)
Capital expenditure
Purchase of tangible fixed assets                                                      (1,230)           (1,700)
Sale of tangible fixed assets                                                               55                59
                                                                                       (1,175)           (1,641)
Equity dividends paid                                                                  (1,953)           (2,912)
Cash outflow before financing                                                          (2,190)           (3,067)
Financing:
Issue of own shares                                                                         14                 -
Purchase of own shares                                                                    (63)             (589)
Decrease in cash                                                                       (2,239)           (3,656)



NOTES

1. Dividends

The Directors have paid and now propose the following dividends in respect of
the year ended 31 March 2002:

                                                                                           2002              2001
                                                                                           £000              £000

Interim paid of 13p (2001 - 13p) per share                                                  793               793
Proposed final of nil (2001 - 19p) per share                                                  -             1,160
                                                                                            793             1,953



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
year. 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:


                                                                            
                                                                            Earnings                  Per share 
                                                     2002                          £          2001       amount
                                   Earnings     Number of    Per share   as restated     Number of  as restated
                                          £        shares      amount       (note 5)        shares     (note 5)
                                                               
Basic earnings per share            236,000     6,096,447        3.87p     2,773,000     6,147,921       45.10p
Effect of dilutive securities:
Options                                   -       144,000      (0.09)p             -       162,000      (1.15)p

Diluted earnings per share          236,000     6,240,447        3.78p     2,773,000     6,309,921       43.95p



3. Analysis of Net Debt

                                        1 April        Movement         1 April        Movement   31 March 2002
                                           2000                            2001
                                           £000            £000            £000            £000            £000

Cash at bank and in hand                  5,429         (3,653)           1,776           (378)           1,398
Bank overdrafts                               -               -               -         (1,846)         (1,846)

Net (debt)/ funds                         5,429         (3,653)           1,776         (2,224)           (448)




4. Reconciliation of operating profit to operating cash flows

                                                                                            2002            2001
                                                                                            £000            £000

Operating profit                                                                             494           4,108
Depreciation, net of profits and losses on sale of fixed assets                            1,264           1,203
Decrease/ (increase) in stocks                                                             1,173         (1,798)
(Increase) in debtors                                                                      (359)               -
(Decrease) in creditors                                                                    (977)            (21)
Net cash inflow from operating activities                                                  1,595           3,492



5. Change in Accounting Policy

From 1 April 2001 the Group has adopted the new accounting standard FRS19:
Deferred Tax which requires full provision to be made for deferred tax arising
from timing differences between the recognition of gains and losses in the
financial statements and their recognition in the tax computation. In adopting
FRS19, the Group has chosen not to discount deferred tax assets and liabilities.
Consequently the shareholders' funds at 31 March 2001, as published previously,
have been increased by £609,000 to reflect the recognition of the additional
asset in respect of deferred tax. The impact of FRS19 in the Profit and Loss
Account on the tax charge was:-


31 March                                                    2002            2001
                                                            £000            £000

Decrease in tax charge                                       220             148



6. Consolidated results

The consolidated results shown do not constitute full accounts for the Group.
The Group's accounts for the year ended 31 March 2001 received an unqualified
Audit Report on 14 June 2001. Copies of the full accounts for the year ended 31
March 2002 will be circulated to shareholders for approval at the Annual General
Meeting, which will be held on 17 July 2002.

The Group's accounts for the year ended 31 March 2001 received an unqualified
Audit Report and have been filed with the Registrar of Companies.




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