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Toye & Co PLC (TOYE)

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Thursday 16 May, 2013

Toye & Co PLC

Final Results

RNS Number : 8298E
Toye & Co PLC
16 May 2013
 



 

 

TOYE & COMPANY PLC

(AIM: TOYE)

 

Preliminary Final Results for the Year Ended 31 December 2012

 

The Board of Toye & Company Plc ("Toye" or "the Company") announces today Final Results for the year ended 31 December 2012.

 

Contacts:




Toye & Company plc

www.toye.com

Fiona Toye, Chief Executive

+44 (0) 20 7242 0471



WH Ireland Limited

www.wh-ireland.co.uk

Mike Coe

+44 (0) 117 945 3470

 

 

Chief Executive's Report

 

Toye & Company is a rare breed.  It has a long lineage, unique characteristics in the combination of traditional textile, enamel and metalworking skills, a reliable and adaptable workforce, and design talents that have enabled it to serve many markets through many generational changes.

 

These attributes make it difficult to categorize neatly into a commercial genus:

·      It is a niche manufacturer of lower volume high quality and high value metal and textile product

·      It is a designer of these products for its own brands and those of others

·      It is a designer, procurer and supplier of high volume, lower value product

·      It contract manages the supply of a range of all these products and services to customers who want to 'buy-in' such expertise

·      It supplies ranges of finished product direct to a number of niche markets

·      It competes for large volume, long term supply contracts for the core product range

·      It pursues business in the UK and overseas

 

Toye & Company's core business is the detail of identity and status, which encompasses everything from State insignia and medals to the lace trimming on the uniform of an air steward and the badging for a policeman, to elegant cufflinks.

 

The Company has continued to focus on:

·      Nurturing and improving its four key skills of design, metals and textile manufacture and specialist sourcing

·      Improving our customer service

·      Reducing and improving process at all stages of our supply chain

·      Reducing our overhead costs

·      Increasing UK and export business

 

The highlight of 2012 for the Company was the manufacture and delivery of a large medal contract in collaboration with two other companies from the Jewellery Quarter in Birmingham.  This contract demonstrated perfectly the superb craft skills of our factories, (the medals stamped in Birmingham, the ribbon woven in Bedworth), our project management abilities in terms of minimizing process and delivering large volumes to specification and on time, and successful co-operation with others in the trade.

 

RESULTS

 

Turnover for the year ended 31 December 2012 amounted to £8,936,996 compared to £7,981,006 for the previous year.  The increase was substantially due to the large contract delivered during the year. Trading conditions in our traditional markets continue to be difficult.. Worldwide economic conditions and social disturbances in some countries have without doubt affected our export sales.  Export revenue was £1,680,764 compared to £1,870,949 the previous year.  This is due to the scheduling of deliveries on a large contract where we have reverted to supply at maintenance levels having delivered the initial bulk quantities in 2011.

 

Our gross profits have improved in our Fraternal and Metals segments, in textiles it has fallen slightly as our customers demand evermore competitive pricing. Our labour costs are reduced from the previous year.

 

The Company has made a profit of £453,872 before taxation.  The major contract previously referred to, which was completed in the financial year, was a key contributor to this result. 

 

TRADING CONDITIONS

 

The on-going economic recession continues to influence all our markets in the UK and overseas.  Buyers are cautious and lacking in confidence.  They want the lowest possible price, but are slow to make the decision to order, which has resulted in reduced lead-times for manufacture.  Customers' demands are increasing in terms of pre-order design and sampling work, rightly setting the service of one supplier against another.  This adds to our origination costs before we have even won an order.

 

Even in our comparatively niche market areas there is increasing global competition.  We are all vying for reduced custom.  Success will depend on our ability to manage our operating costs and maintain and even expand our operating capabilities.  Formidable challenges for a labour intensive traditional craft business.

 

It is essential to understand that the majority of our product and services are bespoke.  It is necessary to invest a considerable amount of time and work before a contract/customer delivers financial return. 

 

There is enormous publicity and public debate on the 'green' environmental agenda and human rights - the importance of reducing our carbon footprint and improving working conditions and pay.  You would think this global agenda would favour a company such as our own.  However the  reality is that for our customers it is price that governs their purchasing decisions not provenance.

 

The Company response to these challenging trading conditions:

 

·      Labour costs have been controlled - though it is important to note that we need to ensure resilience of our skills base so it has been necessary to take on apprentices in some key areas

·      Rationalise and improve process in both manufacture and administration

·      Achieve optimum margin on all transactions

·      Focus on increasing profitable sales in all market areas in the UK and overseas

·      Cease to trade in unprofitable product lines or markets or transfer to solely e-commerce provision for these

·      Further review our establishment and operation costs for the optimum benefit of the business

 

In my last annual report I stated that we intended to lease the retail areas to a high covenant retailer and were close to completion of the lease contract.  This aroused intense interest in the property from other quarters, and the Company received an offer from Stability Investments that was so advantageous the Main Board were persuaded to accept.

 

The agreement with Stability Investments, which was approved by Shareholders at a General Meeting on 27 February 2013, is for eventual purchase of the entire property at Great Queen Street, London within eighteen months.  Against this purchase they have advanced the Company a significant sum subsequent to the year.

 

As part of this agreement two new Non-executive Directors have joined the Main Board.  They are Robin Edwards, whose background is Hedge Fund management and Robert Luck who is a property developer.  They bring considerable commercial experience to the Board.

 

MANAGEMENT AND STAFF

 

During the year we have with regret made further redundancies throughout all tiers of the business including senior management.

 

From 1 September 2012 we reduced the weekly hours worked from 37.5 hours to 34 hours.  This has resulted in production being closed on Fridays.  The sales and administration staff are working flexible hours to cover customer services.

 

It has been challenging for the management to maintain morale and engender enthusiasm for all the necessary changes.  It is a great compliment to all our staff and their loyalty that we are successfully delivering improvements in our operation

 

Apprenticeship is essential to the maintenance and future of our trade skills, so the Company has welcomed the government and local authority initiatives to support recruitment of trainees.  We have been actively involved in the establishment of an apprenticeship scheme with a rigorous curriculum matched to key qualification stages in the Jewellery Quarter in Birmingham.

 

We currently have one apprentice in Birmingham, and are soon to welcome two more.  In Bedworth we have one in production and one in administration.  This introduction of fresh talent is essential to the future of the business and the trades.

 

Facilities

 

Our production facilities in the Midlands are unique not only in what they do, but in their strong ties to their locations.  This is essential when considering the further development of our production capabilities.

 

PROGRESS AND OUTLOOK

 

2012 was an exciting and busy year for our Company as well as the Nation. The successful delivery of the Queen's Diamond Jubilee medal contract in collaboration with two other Jewellery Quarter firms was a highlight, especially in terms of our bottom line.  It was also an incredible thrill and extremely satisfying for all the employees of the firm to be able to watch the festivities and ceremonies of the Jubilee year and see items they had made adorning so many of those involved.

 

Although we did not contribute directly to the Olympics, apart from the buttons for the equestrian team, our products have featured on many other notable sporting occasions such as Henley Royal Regatta and the FA Cup contests during the year.

 

We continue to expand our portfolio of brand development work for retailers in this country and around the world.  Our sales team is concentrating on developing prospects overseas that we are hopeful will come to fruition in the coming year.  After the success of our work towards the Kremlin restoration last year we are now part of a new project for a different part of the complex.

 

We are busy in all our market areas responding to established customers and acquiring new ones.  New customers come to us through our proactive sales efforts but also due to some of our competitors failing in these difficult times.

 

All employees have worked hard to adapt, and continue our drive to improve performance.  

 

I am delighted to announce that our Company has been awarded "Apprentice Employer of the Year 2013" by Holts Academy, at a reception in London's Guildhall.  This news came as we were going to press.

 

The Board are working together to develop a clear strategy to achieve a business that is commercially robust and continues to nurture the range of skills and talents that makes this Company such a valuable rare breed.  Market conditions remain difficult but we remain resilient.

 

 

Fiona Toye

Chief Executive

 

16 May 2013

 

 


 

 

Group Statement of Comprehensive Income

for the year ended 31 December 2012







2012

£

2011

£






Revenue



8,936,996

7,981,006

Operating expense



(8,416,291)

(8,369,796)

Operating profit/(loss)



520,705

(388,790)






Finance costs



(66,833)

(50,601)






Profit/(loss) before taxation



453,872

(439,391)






Taxation



-

-






Profit/(loss) for the year



453,872

(439,391)











Other comprehensive income





Other comprehensive income for the year



-

-

Total comprehensive income for the year



453,872

(439,391)

All of the comprehensive income for the year is attributable to equity holders of the parent.

 

All activities relate to continuing operations.

 

Earnings per share

Earnings/(loss) per share (basic and diluted)



 

20.19p

 

(19.55)p

 



 

Statements of Financial Position

at 31 December 2012






The Group

The Company


2012

£

2011

£

2012

£

2011

£

Assets

Non-current assets





Property, plant & equipment

1,959,086

1,934,241

1,858,786

1,802,720

Investments in subsidiary undertakings

-

-

1,155,852

1,155,852


1,959,086

1,934,241

3,014,638

2,958,572






Current assets





Inventories

1,154,462

1,351,304

-

-

Trade and other receivables

1,115,709

968,469

3,041

3,406

Cash and cash equivalents

4,390

5,665

-

-


2,274,561

2,325,438

3,041

3,406






Liabilities

Current liabilities





Trade and other payables

1,133,324

1,335,847

946,760

781,414

Current borrowings

559,687

715,977

-

-

Current portion of long term borrowings

120,607

124,724

120,607

124,724


1,813,618

2,176,548

1,067,367

906,138






Net current assets / (liabilities)

460,943

148,890

(1,064,326)

(902,732)






Non-current liabilities





Non-current borrowings

742,147

859,121

742,147

859,121


742,147

859,121

742,147

859,121






Net assets

1,677,882

1,224,010

1,208,165

1,196,719






Equity attributable to equity holders of the parent





Ordinary shares

562,000

562,000

562,000

562,000

Share premium

2,677

2,677

2,677

2,677

Retained earnings

1,113,205

659,333

643,488

632,042

Total equity

1,677,882

1,224,010

1,208,165

1,196,719






 

 



 

Statements of Changes in Equity

for the year ended 31 December 2012














Ordinary

shares

£

Share

premium

£

Retained

earnings

£

Total

equity

£

The Group






Balance at 1 January 2011


562,000

2,677

1,098,724

1,663,401







Changes in equity for 2011






(Loss) and total comprehensive income for the year

-

-

(439,391)

(439,391)







Balance at 31 December 2011


562,000

2,677

659,333

1,224,010







Changes in equity for 2012






Profit and total comprehensive income for the year

-

-

453,872

453,872







Balance at 31 December 2012


562,000

2,677

1,113,205

1,677,882







All equity is attributable to equity holders of the parent.

















The Company






Balance at 1 January 2011


562,000

2,677

1,055,015

1,619,692







Changes in equity for 2011






(Loss) and total comprehensive income for the year

-

-

(422,973)

(422,973)







Balance at 31 December 2011


562,000

2,677

632,042

1,196,719







Changes in equity for 2012






Profit and total comprehensive income for the year

-

-

11,446

11,446







Balance at 31 December 2012


562,000

2,677

643,488

1,208,165









 

Statements of Cash Flows

for the year ended 31 December 2012






The Group

The Company


2012

£

2011

£

2012

£

2011

£

Cash flows from/(used by) operating    activities





Cash generated from operating activities

464,475

232,281

211,778

121,855

Interest received

-

-

72,000

159,922

Interest paid

(66,833)

(50,601)

(66,833)

(50,601)

Net cash generated from operating activities

397,642

181,680

216,945

231,176






Cash flows from investing activities





Purchase of property, plant and equipment

(121,536)

(40,149)

(95,854)

-

Proceeds from sale of property, plant and    equipment

-

10,873

-

-

 

Net cash flows (used in) investing activities

(121,536)

(29,276)

(95,854)

-






Cash flows from financing activities





Repayment of borrowings

(121,091)

(122,012)

(121,091)

(122,012)

Net cash flows (used in) financing activities

(121,091)

(122,012)

(121,091)

(122,012)






Net increase in cash and cash equivalents

155,015

30,392

-

109,164

Cash and cash equivalents at the beginning of the year

 

(710,312)

 

(740,704)

 

-

 

(109,164)

Cash and cash equivalents at the end of         the financial year

(555,297)

(710,312)

-

-











 

 

 

 

 

1      Basis of preparation

These consolidated financial statements have been prepared in accordance with IFRS and International Financial Reporting Interpretations Committee ("IFRIC") interpretations as adopted by the European Union, and those parts of the Companies Act 2006 applicable to companies reporting under IFRS.

 

 

2.     Segmental reporting

 

In identifying its operating segments, management generally follow the manufacturing or sourcing of the products.

 

The Group operates in the supply of identity products to a large and varied market and customer base.  The type of products sold into this market generally fall under either a textile or metals (including corporate gifts) umbrella.  The exception to this being the friendly societies market.

 

Each of the textile, metals and friendly societies operating segments is managed separately as each of these segments requires different resources and core skills.  All transfers between the segments are carried out at cost.

 

The measurement policies the Group uses for segment reporting under IFRS 8 are the same as those used in its financial statements.

 

Management currently identifies three units as operating segments as described above. These operating segments are monitored and strategic decisions are made on the basis of segment operating results.

 



Textiles

Friendly societies

Metals

Total



2012

£

2012

£

2012

£

2012

£

Revenue


3,140,400

1,049,822

4,746,774

8,936,996







Gross profit


1,503,728

384,028

2,156,602

4,044,358

Works overheads


538,755

564,104

1,150,603

Manufacturing contribution by segment

964,973

336,284

1,592,498

2,893,755







Selling and administration costs



2,207,490

Profit before finance and costs associated with AIM the listing

686,265







Costs associated with the AIM listing





83,377

Other bank charges and leasing costs



82,183

Interest


66,833

Net profit





453,872







 



 

 



Textiles

Friendly societies

Metals

Total



2011

£

2011

£

2011

£

2011

£

Revenue


3,641,625

911,162

3,428,219

7,981,006







Gross profit


1,617,241

267,475

1,344,741

3,229,457

Works overheads


526,256

94,472

663,739

1,284,467

Manufacturing contribution by segment

1,090,985

173,003

681,002

1,944,990







Selling and administration costs



2,178,368

Loss before finance and costs associated with the AIM listing

(233,378)






Costs associated with the AIM listing





83,530

Other bank charges and leasing costs



71,882

Interest



50,601

Net loss





(439,391)













The Group's revenues from external customers are divided into the following geographical markets:





2012

£

2011

£

United Kingdom




7,256,232

6,110,057

Rest of World




1,680,764

1,870,949





8,936,996

7,981,006







 

All non-current assets are held within the United Kingdom.  Additions to fixed assets are disclosed in note 11.

 

During 2012, £1,955,450 or 21.9% of the Group's revenues depended on a single customer whose sales were made from the metals segment.  During 2011 no single customer accounted for more than 10% of the Group's revenue.

 

The assets of the business have been attributed to the segments on the following basis.

 



Textiles

Friendly societies

Metals

Total



2012

£

2012

£

2012

£

2012

£

Inventories


624,088

258,746

271,628

1,154,462

Unallocated assets





3,079,185

Unallocated liabilities





(2,555,765)









2011

£

2011

£

2011

£

2011

£

Inventories


665,588

281,326

404,390

1,351,304

Unallocated assets





2,908,375

Unallocated liabilities





(3,035,669)

 

Non-current assets are not allocated between segments.

 

All segments of the Group sell into the same markets and share many of the same customers and thus receivables are not attributed to the individual business segments.

 

Similarly all segments of the Group purchase from the same suppliers and as such the trade payables are not attributed to the business segments.

 

Borrowing and finance costs are arranged centrally by the Group and are not attributed to the business segments.

 

 

 

3.     Operating expenses by nature










2012

£

2011

£

Changes in inventories of finished goods and work in progress

199,824

(47,094)

Raw materials and consumables used




3,697,883

3,780,877

Employee benefits



2,930,599

3,121,532

Depreciation  -  owned assets




96,691

93,977

Audit and non-audit services




36,350

34,545

Hire of plant and machinery




35,599

21,442

Other expenses




1,419,345

1,364,517





8,416,291

8,369,796







Included in cost of raw materials and consumables used is a credit of £19,209 (2011: credit £9,146) in respect of the movement in the inventory provision.

 

4.     Profit for the financial year

 

The profit dealt with in the accounts of the Parent Company was £11,446 (2011: £422,973 loss).  The Parent Company had no other comprehensive income for the year other than the profit for the year (2011: £nil).






5.     Earnings per ordinary 25p share










The earnings per ordinary 25p share is based on the profit or loss after taxation and the average number of shares in issue throughout the year.




2012

2011

Profit/(loss)



£453,872

£(439,391)

Average number of shares in issue



2,248,000

2,248,000

Profit/(loss) per share - basic and diluted



20.19p

(19.55)p






There were no potentially dilutive ordinary shares in issue.





 

6.     Share Capital








2012

£

2011

£

Authorised

  3,000,000 Ordinary shares of 25p each



 

750,000

 

750,000

Allotted and fully paid

  2,248,000 Ordinary shares of 25p each



 

562,000

 

562,000

 

 

7.     Cash generated from/(used by) operating activities

 



The Group

The Company



2012

£

2011

£

2011

£

2011

£

Operating profit/(loss)


520,705

(388,790)

6,279

(532,294)

Depreciation - property, plant and equipment


96,691

93,977

39,788

39,020

(Profit) on sale of fixed assets


-

(125)

-

-

Addition to provision against investments


-

-

-

409,390

(Increase) in loans to group companies


-

-

-

(98,228)

Decrease/(increase) in inventories


196,842

(17,486)

-

-

(Increase)/decrease in trade and other receivables

(147,240)

692,173

365

1,861

(Decrease)/increase in trade and other payables

(202,523)

(147,468)

165,346

302,106



464,475

232,281

211,778

121,855







8.     Events after the reporting period

 

On 28 January 2013 the Company entered into an unconditional loan facility agreement, legal charge, and conditional sale agreement to dispose of its leasehold property at 19-21 Great Queen Street ("the Property") to Stability Investments Limited for a consideration of at least £2.75 million.  At 31 December 2012 the Property had a carrying value of £945,000.  The Company may be entitled to additional consideration of £500,000 and a share of any ultimate development profit relating to the Property.

 

Loan Facility Agreement and Legal Charge

 

The loan facility agreement provides that Stability Investments Limited advances to the Company an amount of up to £2.5 million.  This advance is secured by a legal charge and all other outstanding charges over the Company's interest in the Property have been redeemed.

 

Of the advance, £2,000,000 has been paid to the Company on 28 January 2013.  The balance of the advance, some £500,000, is available to be released to the Company, in line with the business plan.

 

£2,000,000 of the advance has been applied by the Company to repay in full the indebtedness of the Group to Lloyds TSB Bank plc and to meet the working capital requirements of the Group. 

 

The advance attracts compound interest at a rate of 3.75 per cent above the Bank of England base rate.

 

Under the terms of the loan facility agreement, two representatives of Stability Investments Limited, Robin Edwards and Robert Luck, have been appointed as Non-Executive Directors of the Company subsequent to the year end.

 

Sale Agreement

 

The sale agreement provides that Stability Investments Limited shall on or before 18 months from the date of the sale agreement acquire the Company's interest in the Property.  The purchase price is payable on completion of the transfer of the Company's interest in the Property, which is then applied to repay in full amounts advanced under the loan facility agreement, and accrued interest.  The Company's entitlement to such additional consideration and/or to any share of development profit is contingent upon certain future events occurring which, if they occur, will be payable at future dates which cannot yet be determined.

 

 

The financial information, which has been prepared on the same basis as set out in the 2011 Annual Accounts, does not constitute statutory accounts as defined in section 435 of the Companies Act 2006.  The financial information for the year ended 31 December 2012 has been extracted from the statutory accounts on which an unqualified audit opinion has been issued.  Statutory accounts for the year ended 31 December 2012 will be delivered to the registrar in due course.  The comparative financial information is based on the statutory accounts for the financial year ended 31 December 2011.  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 later today to Shareholders and the Annual General Meeting will be held on 18 June 2013 at 12.30 pm at the company's offices at 77 Warstone Lane, Birmingham B18 6NL.  The Report and Accounts will also be available from the Company's website, www.toye.com.

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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