TIDMGAW
RNS Number : 2378M
Games Workshop Group PLC
27 January 2009
?
HALF-YEARLY REPORT
Games Workshop Group PLC ("Games Workshop" or the "Group") announces its
half-yearly results for the six months to 30 November 2008.
Highlights:
+---------+----------------------------------------------------------------------+
| * | Revenue at GBP61.2m (2007: GBP53.9m) |
+---------+----------------------------------------------------------------------+
| * | Gross margin - pre-exceptional at 71.4% (2007: 70.1%) |
+---------+----------------------------------------------------------------------+
| * | Operating profit - pre-exceptional and pre-royalties receivable at |
| | GBP3.3m (2007: GBP0.5m) |
+---------+----------------------------------------------------------------------+
| * | Operating profit - pre-exceptional at GBP3.8m (2007: GBP1.2m) |
+---------+----------------------------------------------------------------------+
| * | Operating profit at GBP3.8m (2007: GBP0.6m) |
+---------+----------------------------------------------------------------------+
| * | Pre-tax profit/(loss) at GBP3.1m (2007: GBP(0.1)m) |
+---------+----------------------------------------------------------------------+
| * | Earnings/(loss) per share of 4.9p (2007: (0.4)p) |
+---------+----------------------------------------------------------------------+
Mark Wells, Chief Executive of Games Workshop, said:
"The work needed to establish growth in all channels in all territories goes on
with some significant progress being made in this half-year where, with the
exception of Continental Europe, we have been able to deliver local currency
sales growth in all territories."
+---------------------------------------+-------------+-------------------+
| For further information, please | | |
| contact: | | |
+---------------------------------------+-------------+-------------------+
| | | |
+---------------------------------------+-------------+-------------------+
| Games Workshop Group PLC | Today only: | 01653 618016 |
+---------------------------------------+-------------+-------------------+
| Tom Kirby, Chairman | Thereafter: | 0115 900 4001 |
+---------------------------------------+-------------+-------------------+
| Mark Wells, Chief Executive | | 0115 900 4001 |
+---------------------------------------+-------------+-------------------+
| | | |
+---------------------------------------+-------------+-------------------+
| Investor relations website | investor.games-workshop.com |
+---------------------------------------+---------------------------------+
| General website | www.games-workshop.com |
+---------------------------------------+---------------------------------+
| | | |
+---------------------------------------+-------------+-------------------+
| Rawlings Financial PR Limited | Tel: | 01653 618016 |
+---------------------------------------+-------------+-------------------+
| Catriona Valentine | | |
+---------------------------------------+-------------+-------------------+
| | | |
+---------------------------------------+-------------+-------------------+
FIRST HALF HIGHLIGHTS
+--------------------------------------+--------------+---------------+
| | | Restated |
+--------------------------------------+--------------+---------------+
| | Six months | Six months to |
| | to | |
+--------------------------------------+--------------+---------------+
| | 30 November | 2 December |
+--------------------------------------+--------------+---------------+
| | 2008 | 2007 |
+--------------------------------------+--------------+---------------+
| | | |
+--------------------------------------+--------------+---------------+
| Revenue | GBP61.2m | GBP53.9m |
+--------------------------------------+--------------+---------------+
| Operating profit - pre-exceptional | GBP3.3m | GBP0.5m |
| and pre-royalties receivable | | |
+--------------------------------------+--------------+---------------+
| Royalties receivable | GBP0.5m | GBP0.7m |
+--------------------------------------+--------------+---------------+
| Operating profit - pre-exceptional | GBP3.8m | GBP1.2m |
+--------------------------------------+--------------+---------------+
| Exceptional items - cost reduction | GBPnil | GBP(0.6)m |
| programme | | |
+--------------------------------------+--------------+---------------+
| Operating profit | GBP3.8m | GBP0.6m |
+--------------------------------------+--------------+---------------+
| Pre-tax profit/(loss) | GBP3.1m | GBP(0.1)m |
+--------------------------------------+--------------+---------------+
| Basic earnings/(loss) per share | 4.9p | (0.4)p |
+--------------------------------------+--------------+---------------+
| | | |
+--------------------------------------+--------------+---------------+
INTERIM MANAGEMENT REPORT
Results
The work needed to establish growth in all channels in all territories goes on
with some significant progress being made in this half-year where, with the
exception of Continental Europe, we have been able to deliver local currency
sales growth in all territories.
As is usual, our three routes to market - independent retailers, direct via
telephones and our web store, and our own Hobby centres - have had mixed
fortunes. Those people looking for evidence about the health of the Hobby we
service will take great comfort from the UK achieving sales growth in all three
channels and Forge World's extremely strong showing (29% sales growth).
In a very difficult period for input costs - in particular with the price of
commodities such as tin and our utility costs - it is pleasing to report that we
have increased our gross margin from 70.1% in the last half-year report to 71.4%
in this one. This speaks volumes both about the discipline and attention to
detail shown by our supply side staff and the swift action taken in sales
businesses to increase metal retail prices.
Following last year's restructuring, overheads remain under control. We have
opened 14 Hobby centres during the period and closed eight, taking our total to
340.
Compared to November 2007, sterling has weakened by 12.7% against the US dollar
and by 13.6% against the euro. We have shown below our sales progression in
local currency terms to permit a more meaningful comparison.
Our net borrowings as at 30 November 2008 stood at GBP11.0 million, a reduction
of GBP4.2 million from the balance at November 2007. Our banking facilities were
renewed in July 2008, as set out in the 2008 annual report (page 11). We have
complied with the conditions of all banking covenants during the period.
Prospects
As a niche business we do not usually suffer or benefit from, macro-economic
factors. Whilst we are pleased with our half-year results, it would be foolish
not to sound a note of caution for the short term as we sell through many
independent retailers all over the world most of whom are far less well
protected than we are.
The principal risks and uncertainties for the balance of the year remain as
described in our 2008 annual report (page 6). These risks lie in the ability of
our sales businesses to establish and maintain sales growth and in our
manufacturing operation to control input costs. The Hobby is healthy and our
challenge is to stay focused on what needs to be done to service it efficiently
and cost effectively.
Games Workshop's core fundamentals remain strong. We continue to grow our sales,
our gross margins are improving, our costs are under control, our return on
capital is increasing and our cash flow is good. The board remains confident in
the future growth and profitability of the Group.
Statement of directors' responsibilities
The directors confirm that this condensed set of financial statements has been
prepared in accordance with IAS 34 as adopted by the European Union, and that
the interim management report herein includes a fair review of the information
required by DTR 4.2.7 and DTR 4.2.8.
The directors of Games Workshop Group PLC are listed in the annual report for
the year to 1 June 2008, with the exception of M Sherwin who left the board and
K D Rountree who was appointed to the board on 22 October 2008. A list of the
current directors is maintained on the investor relations website at
investor.games-workshop.com.
By order of the board
M N Wells
Chief Executive
K D Rountree
Chief Financial Officer
+------------------------+-------------------------------------------------------------+------------------------------------------------------------+
| |
+---------------------------------------------------------------------------------------------------------------------------------------------------+
| REVENUE BY GEOGRAPHICAL AREA OF SALES OPERATION IN |
+---------------------------------------------------------------------------------------------------------------------------------------------------+
| | LOCAL CURRENCY | |
+------------------------+-------------------------------------------------------------+------------------------------------------------------------+
| Continuing operations | Six months to | Restated |
| | 30 November 2008 | Six months to |
| | | 2 December 2007 |
+------------------------+-------------------------------------------------------------+------------------------------------------------------------+
| Continental Europe | EUR27.3m | EUR28.6m |
+------------------------+-------------------------------------------------------------+------------------------------------------------------------+
| United Kingdom | GBP21.1m | GBP18.5m |
+------------------------+-------------------------------------------------------------+------------------------------------------------------------+
| The Americas | US$24.8m | US$23.3m |
+------------------------+-------------------------------------------------------------+------------------------------------------------------------+
| Asia Pacific | Aus$10.0m | Aus$9.2m |
+------------------------+-------------------------------------------------------------+------------------------------------------------------------+
| | | |
+------------------------+-------------------------------------------------------------+------------------------------------------------------------+
CONSOLIDATED INCOME STATEMENT
+------------------------------+-------+------------+------------+------------+
| | | | Restated | |
+------------------------------+-------+------------+------------+------------+
| | | Six months | Six months | Year to |
| | | to | to | |
+------------------------------+-------+------------+------------+------------+
| | | 30 | 2 December | 1 June |
| | | November | | |
+------------------------------+-------+------------+------------+------------+
| | | 2008 | 2007 | 2008 |
+------------------------------+-------+------------+------------+------------+
| |Notes | GBP000 | GBP000 | GBP000 |
+------------------------------+-------+------------+------------+------------+
| | | | | |
+------------------------------+-------+------------+------------+------------+
| Continuing operations | | | | |
+------------------------------+-------+------------+------------+------------+
| | | | | |
+------------------------------+-------+------------+------------+------------+
| Revenue | 2 | 61,225 | 53,908 | 110,345 |
+------------------------------+-------+------------+------------+------------+
| | | | | |
+------------------------------+-------+------------+------------+------------+
| Cost of sales | | (17,532) | (16,386) | (33,731) |
+------------------------------+-------+------------+------------+------------+
| | | ---------- | ---------- | ---------- |
+------------------------------+-------+------------+------------+------------+
| | | | | |
+------------------------------+-------+------------+------------+------------+
| Gross profit | | 43,693 | 37,522 | 76,614 |
+------------------------------+-------+------------+------------+------------+
| | | | | |
+------------------------------+-------+------------+------------+------------+
| Operating expenses | | (40,443) | (37,593) | (75,798) |
+------------------------------+-------+------------+------------+------------+
| | | | | |
+------------------------------+-------+------------+------------+------------+
| Other operating income - | | 549 | 670 | 1,736 |
| royalties receivable | | | | |
+------------------------------+-------+------------+------------+------------+
| | | ---------- | ---------- | ---------- |
+------------------------------+-------+------------+------------+------------+
| | | | | |
+------------------------------+-------+------------+------------+------------+
| Operating profit | 2 | 3,799 | 599 | 2,552 |
+------------------------------+-------+------------+------------+------------+
| | | | | |
+------------------------------+-------+------------+------------+------------+
| Operating profit - | | 3,250 | 490 | 3,181 |
| pre-exceptional items and | | | | |
| pre-royalties receivable | | | | |
+------------------------------+-------+------------+------------+------------+
| | | | | |
+------------------------------+-------+------------+------------+------------+
| Exceptional items - cost | 15 | - | (561) | (2,365) |
| reduction programme | | | | |
+------------------------------+-------+------------+------------+------------+
| | | | | |
+------------------------------+-------+------------+------------+------------+
| Royalties receivable | | 549 | 670 | 1,736 |
+------------------------------+-------+------------+------------+------------+
| | | | | |
+------------------------------+-------+------------+------------+------------+
| Finance income | | 106 | 163 | 425 |
+------------------------------+-------+------------+------------+------------+
| | | | | |
+------------------------------+-------+------------+------------+------------+
| Finance costs | | (848) | (898) | (1,918) |
+------------------------------+-------+------------+------------+------------+
| | | ---------- | ---------- | ---------- |
+------------------------------+-------+------------+------------+------------+
| | | | | |
+------------------------------+-------+------------+------------+------------+
| Profit/(loss) before | | 3,057 | (136) | 1,059 |
| taxation | | | | |
+------------------------------+-------+------------+------------+------------+
| | | | | |
+------------------------------+-------+------------+------------+------------+
| Income tax expense | 4 | (1,524) | 51 | (613) |
+------------------------------+-------+------------+------------+------------+
| | | ---------- | ---------- | ---------- |
+------------------------------+-------+------------+------------+------------+
| | | | | |
+------------------------------+-------+------------+------------+------------+
| Profit/(loss) for the period | | 1,533 | (85) | 446 |
| from continuing operations | | | | |
+------------------------------+-------+------------+------------+------------+
| | | | | |
+------------------------------+-------+------------+------------+------------+
| Discontinued operations | | | | |
+------------------------------+-------+------------+------------+------------+
| | | | | |
+------------------------------+-------+------------+------------+------------+
| Loss for the period from | 5 | - | (30) | (1,186) |
| discontinued operations | | | | |
+------------------------------+-------+------------+------------+------------+
| | | ---------- | ---------- | ---------- |
+------------------------------+-------+------------+------------+------------+
| Profit/(loss) attributable | | 1,533 | (115) | (740) |
| to equity shareholders | | | | |
+------------------------------+-------+------------+------------+------------+
| | | ====== | ====== | ====== |
+------------------------------+-------+------------+------------+------------+
| | | | | |
+------------------------------+-------+------------+------------+------------+
| Basic earnings/(loss) per | 6 | 4.9p | (0.4)p | (2.4)p |
| ordinary share | | | | |
+------------------------------+-------+------------+------------+------------+
| Diluted earnings/(loss) per | 6 | 4.9p | (0.4)p | (2.4)p |
| ordinary share | | | | |
+------------------------------+-------+------------+------------+------------+
| Basic earnings/(loss) per | 6 | 4.9p | (0.3)p | 1.4p |
| ordinary share - continuing | | | | |
| operations | | | | |
+------------------------------+-------+------------+------------+------------+
| Diluted earnings/(loss) per | 6 | 4.9p | (0.3)p | 1.4p |
| ordinary share - continuing | | | | |
| operations | | | | |
+------------------------------+-------+------------+------------+------------+
The restatement of the results for the six months to 2 December 2007 relates to
the reclassification of the results of the card games, role-playing games and
board games activities from continuing operations to discontinued operations as
detailed in note 5. The results for the year to 1 June 2008 were prepared on
this basis.
CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE
+------------------------------------+------------+------------+------------+
| | Six months | Six months | Year to |
| | to | to | |
+------------------------------------+------------+------------+------------+
| | 30 | 2 December | 1 June |
| | November | | |
+------------------------------------+------------+------------+------------+
| | 2008 | 2007 | 2008 |
+------------------------------------+------------+------------+------------+
| | GBP000 | GBP000 | GBP000 |
+------------------------------------+------------+------------+------------+
| | | | |
+------------------------------------+------------+------------+------------+
| Profit/(loss) attributable to | 1,533 | (115) | (740) |
| equity shareholders | | | |
+------------------------------------+------------+------------+------------+
| | | | |
+------------------------------------+------------+------------+------------+
| Exchange differences on | 2,161 | 107 | 1,626 |
| translation of foreign operations | | | |
+------------------------------------+------------+------------+------------+
| | | | |
+------------------------------------+------------+------------+------------+
| Cash flow hedges: | | | |
+------------------------------------+------------+------------+------------+
| - fair value losses | (246) | (219) | (940) |
+------------------------------------+------------+------------+------------+
| - transferred to the income | 821 | 29 | 88 |
| statement | | | |
+------------------------------------+------------+------------+------------+
| | | | |
+------------------------------------+------------+------------+------------+
| Net investment hedge | (276) | - | (737) |
+------------------------------------+------------+------------+------------+
| | | | |
+------------------------------------+------------+------------+------------+
| Tax on items recognised directly | (161) | 52 | 237 |
| in equity | | | |
+------------------------------------+------------+------------+------------+
| | ---------- | ---------- | ---------- |
+------------------------------------+------------+------------+------------+
| | | | |
+------------------------------------+------------+------------+------------+
| Total recognised income/(expense) | 3,832 | (146) | (466) |
| for the period | | | |
+------------------------------------+------------+------------+------------+
| | ====== | ====== | ====== |
+------------------------------------+------------+------------+------------+
CONSOLIDATED BALANCE SHEET
+-----------------------------+-------+------------+------------+------------+
| | | As at | As at | As at |
+-----------------------------+-------+------------+------------+------------+
| | | 30 | 2 December | 1 June |
| | | November | | |
+-----------------------------+-------+------------+------------+------------+
| | | 2008 | 2007 | 2008 |
+-----------------------------+-------+------------+------------+------------+
| |Notes | GBP000 | GBP000 | GBP000 |
+-----------------------------+-------+------------+------------+------------+
| | | | | |
+-----------------------------+-------+------------+------------+------------+
| Non-current assets | | | | |
+-----------------------------+-------+------------+------------+------------+
| | | | | |
+-----------------------------+-------+------------+------------+------------+
| Goodwill | | 1,433 | 2,355 | 1,433 |
+-----------------------------+-------+------------+------------+------------+
| Other intangible assets | 10 | 6,163 | 5,545 | 6,059 |
+-----------------------------+-------+------------+------------+------------+
| Property, plant and | 11 | 26,318 | 27,053 | 26,422 |
| equipment | | | | |
+-----------------------------+-------+------------+------------+------------+
| Trade and other receivables | | 1,405 | 1,122 | 1,234 |
+-----------------------------+-------+------------+------------+------------+
| Financial assets - | | - | - | 14 |
| derivative financial | | | | |
| instruments | | | | |
+-----------------------------+-------+------------+------------+------------+
| Deferred tax assets | | 2,880 | 2,420 | 3,005 |
+-----------------------------+-------+------------+------------+------------+
| | | ---------- | ---------- | ---------- |
+-----------------------------+-------+------------+------------+------------+
| | | 38,199 | 38,495 | 38,167 |
+-----------------------------+-------+------------+------------+------------+
| | | ---------- | ---------- | ---------- |
+-----------------------------+-------+------------+------------+------------+
| Current assets | | | | |
+-----------------------------+-------+------------+------------+------------+
| | | | | |
+-----------------------------+-------+------------+------------+------------+
| Inventories | | 11,807 | 11,623 | 10,392 |
+-----------------------------+-------+------------+------------+------------+
| Trade and other receivables | | 12,642 | 12,691 | 9,870 |
+-----------------------------+-------+------------+------------+------------+
| Assets held for sale | 5 | - | - | 464 |
+-----------------------------+-------+------------+------------+------------+
| Current tax assets | | 437 | 1,515 | 854 |
+-----------------------------+-------+------------+------------+------------+
| Financial assets - | | 262 | - | 17 |
| derivative financial | | | | |
| instruments | | | | |
+-----------------------------+-------+------------+------------+------------+
| Cash and cash equivalents | | 7,861 | 6,722 | 7,723 |
+-----------------------------+-------+------------+------------+------------+
| | | ---------- | ---------- | ---------- |
+-----------------------------+-------+------------+------------+------------+
| | | 33,009 | 32,551 | 29,320 |
+-----------------------------+-------+------------+------------+------------+
| | | ---------- | ---------- | ---------- |
+-----------------------------+-------+------------+------------+------------+
| Total assets | | 71,208 | 71,046 | 67,487 |
+-----------------------------+-------+------------+------------+------------+
| | | ---------- | ---------- | ---------- |
+-----------------------------+-------+------------+------------+------------+
| Current liabilities | | | | |
+-----------------------------+-------+------------+------------+------------+
| | | | | |
+-----------------------------+-------+------------+------------+------------+
| Financial liabilities - | 9 | (1,830) | (6,889) | (2,791) |
| borrowings | | | | |
+-----------------------------+-------+------------+------------+------------+
| Financial liabilities - | | (885) | (463) | (1,401) |
| derivative financial | | | | |
| instruments | | | | |
+-----------------------------+-------+------------+------------+------------+
| Trade and other payables | | (14,799) | (15,208) | (15,351) |
+-----------------------------+-------+------------+------------+------------+
| Current tax liabilities | | (441) | (218) | (222) |
+-----------------------------+-------+------------+------------+------------+
| Provisions | 12 | (615) | (1,459) | (1,155) |
+-----------------------------+-------+------------+------------+------------+
| | | ---------- | ---------- | ---------- |
+-----------------------------+-------+------------+------------+------------+
| | | (18,570) | (24,237) | (20,920) |
+-----------------------------+-------+------------+------------+------------+
| | | ---------- | ---------- | ---------- |
+-----------------------------+-------+------------+------------+------------+
| Net current assets | | 14,439 | 8,314 | 8,400 |
+-----------------------------+-------+------------+------------+------------+
| | | ---------- | ---------- | ---------- |
+-----------------------------+-------+------------+------------+------------+
| Non-current liabilities | | | | |
+-----------------------------+-------+------------+------------+------------+
| | | | | |
+-----------------------------+-------+------------+------------+------------+
| Financial liabilities - | 9 | (17,000) | (15,004) | (15,001) |
| borrowings | | | | |
+-----------------------------+-------+------------+------------+------------+
| Deferred tax liabilities | | (310) | - | - |
+-----------------------------+-------+------------+------------+------------+
| Other non-current | | (718) | (842) | (723) |
| liabilities | | | | |
+-----------------------------+-------+------------+------------+------------+
| Provisions | 12 | (1,196) | (1,173) | (1,317) |
+-----------------------------+-------+------------+------------+------------+
| | | ---------- | ---------- | ---------- |
+-----------------------------+-------+------------+------------+------------+
| | | (19,224) | (17,019) | (17,041) |
+-----------------------------+-------+------------+------------+------------+
| | | ---------- | ---------- | ---------- |
+-----------------------------+-------+------------+------------+------------+
| | | | | |
+-----------------------------+-------+------------+------------+------------+
| Net assets | | 33,414 | 29,790 | 29,526 |
+-----------------------------+-------+------------+------------+------------+
| | | ====== | ====== | ====== |
+-----------------------------+-------+------------+------------+------------+
| | | | | |
+-----------------------------+-------+------------+------------+------------+
| Capital and reserves | | | | |
+-----------------------------+-------+------------+------------+------------+
| | | | | |
+-----------------------------+-------+------------+------------+------------+
| Called up share capital | 16 | 1,556 | 1,556 | 1,556 |
+-----------------------------+-------+------------+------------+------------+
| Share premium account | 16 | 7,822 | 7,822 | 7,822 |
+-----------------------------+-------+------------+------------+------------+
| Other reserves | 16 | 1,564 | (1,103) | (321) |
+-----------------------------+-------+------------+------------+------------+
| Retained earnings | 16 | 22,472 | 21,515 | 20,469 |
+-----------------------------+-------+------------+------------+------------+
| | | ---------- | ---------- | ---------- |
+-----------------------------+-------+------------+------------+------------+
| | | | | |
+-----------------------------+-------+------------+------------+------------+
| Total shareholders' equity | | 33,414 | 29,790 | 29,526 |
+-----------------------------+-------+------------+------------+------------+
| | | ====== | ====== | ====== |
+-----------------------------+-------+------------+------------+------------+
CONSOLIDATED CASH FLOW STATEMENT
+------------------------------+-------+------------+------------+------------+
| | | Six months | Six months | Year to |
| | | to | to | |
+------------------------------+-------+------------+------------+------------+
| | | 30 | 2 December | 1 June |
| | | November | | |
+------------------------------+-------+------------+------------+------------+
| | | 2008 | 2007 | 2008 |
+------------------------------+-------+------------+------------+------------+
| |Notes | GBP000 | GBP000 | GBP000 |
+------------------------------+-------+------------+------------+------------+
| | | | | |
+------------------------------+-------+------------+------------+------------+
| Cash flows from operating | | | | |
| activities | | | | |
+------------------------------+-------+------------+------------+------------+
| | | | | |
+------------------------------+-------+------------+------------+------------+
| Cash generated from | 7 | 3,833 | 623 | 11,097 |
| operations | | | | |
+------------------------------+-------+------------+------------+------------+
| UK corporation tax | | (27) | (3) | 6 |
| (paid)/received | | | | |
+------------------------------+-------+------------+------------+------------+
| Overseas tax paid | | (395) | (142) | (418) |
+------------------------------+-------+------------+------------+------------+
| | | ---------- | ---------- | ---------- |
+------------------------------+-------+------------+------------+------------+
| Net cash from operating | | 3,411 | 478 | 10,685 |
| activities | | | | |
+------------------------------+-------+------------+------------+------------+
| | | ---------- | ---------- | ---------- |
+------------------------------+-------+------------+------------+------------+
| Cash flows from investing | | | | |
| activities | | | | |
+------------------------------+-------+------------+------------+------------+
| | | | | |
+------------------------------+-------+------------+------------+------------+
| Purchases of property, plant | | (3,164) | (2,887) | (5,705) |
| and equipment | | | | |
+------------------------------+-------+------------+------------+------------+
| Proceeds on disposal of | | - | - | 44 |
| other intangible assets | | | | |
+------------------------------+-------+------------+------------+------------+
| Proceeds on disposal of | | 9 | 9 | 50 |
| property, plant and | | | | |
| equipment | | | | |
+------------------------------+-------+------------+------------+------------+
| Proceeds on disposal of | | 500 | - | - |
| assets held for sale | | | | |
+------------------------------+-------+------------+------------+------------+
| Purchases of other | | (720) | (802) | (1,557) |
| intangible assets | | | | |
+------------------------------+-------+------------+------------+------------+
| Expenditure on product | | (1,210) | (1,138) | (2,266) |
| development | | | | |
+------------------------------+-------+------------+------------+------------+
| Interest received | | 112 | 162 | 415 |
+------------------------------+-------+------------+------------+------------+
| | | ---------- | ---------- | ---------- |
+------------------------------+-------+------------+------------+------------+
| Net cash from investing | | (4,473) | (4,656) | (9,019) |
| activities | | | | |
+------------------------------+-------+------------+------------+------------+
| | | ---------- | ---------- | ---------- |
+------------------------------+-------+------------+------------+------------+
| Cash flows from financing | | | | |
| activities | | | | |
+------------------------------+-------+------------+------------+------------+
| | | | | |
+------------------------------+-------+------------+------------+------------+
| Proceeds from borrowings | | 2,000 | 5,190 | 5,189 |
+------------------------------+-------+------------+------------+------------+
| Repayment of principal under | | (6) | (6) | (10) |
| finance leases | | | | |
+------------------------------+-------+------------+------------+------------+
| Interest paid | | (437) | (792) | (1,681) |
+------------------------------+-------+------------+------------+------------+
| | | ---------- | ---------- | ---------- |
+------------------------------+-------+------------+------------+------------+
| Net cash from financing | | 1,557 | 4,392 | 3,498 |
| activities | | | | |
+------------------------------+-------+------------+------------+------------+
| | | ---------- | ---------- | ---------- |
+------------------------------+-------+------------+------------+------------+
| Effects of foreign exchange | | 601 | (24) | 124 |
| rates | | | | |
+------------------------------+-------+------------+------------+------------+
| | | ---------- | ---------- | ---------- |
+------------------------------+-------+------------+------------+------------+
| Net increase in cash and | | 1,096 | 190 | 5,288 |
| cash equivalents | | | | |
+------------------------------+-------+------------+------------+------------+
| | | ---------- | ---------- | ---------- |
+------------------------------+-------+------------+------------+------------+
| Opening cash and cash | | 4,944 | (344) | (344) |
| equivalents | | | | |
+------------------------------+-------+------------+------------+------------+
| | | ---------- | ---------- | ---------- |
+------------------------------+-------+------------+------------+------------+
| Closing cash and cash | 8 | 6,040 | (154) | 4,944 |
| equivalents | | | | |
+------------------------------+-------+------------+------------+------------+
| | | ====== | ====== | ====== |
+------------------------------+-------+------------+------------+------------+
NOTES TO THE FINANCIAL INFORMATION
1. Basis of preparation
The half-year results for the six months to 30 November 2008 and for the
comparative six months to 2 December 2007 are neither audited or reviewed and do
not constitute statutory accounts within the meaning of section 434 of the
Companies Act 2006. Statutory accounts for the year to 1 June 2008 have been
delivered to the Registrar of Companies. The auditors' report on those accounts
was unqualified, did not contain an emphasis of matter paragraph and did not
contain any statement under section 237 of the Companies Act 1985.
The financial information has been prepared in accordance with the accounting
policies under International Financial Reporting Standards ('IFRS') as adopted
by the European Union which are detailed in the financial statements for the
year to 1 June 2008. These accounting policies are expected to be followed in
the full financial statements for the year ending 31 May 2009. This half-yearly
report has been prepared in accordance with the Disclosure and Transparency
Rules of the Financial Services Authority and with IAS 34 'Interim Financial
Reporting'.
The half-yearly report is available to shareholders and members of the public on
the Company's website at investor.games-workshop.com.
2. Segmental analysis
Six months to 30 November 2008
+-----------------+-------------+---------+----------+---------+--------+-------------+---------+-------------+---------+--------+
| | Continental | United | The | Asia | Rest | Central/ | Service | Design | Royalty | Group |
| | Europe | Kingdom | Americas | Pacific | of | unallocated | centres | and | income | |
| | | | | | the | | | development | | |
| | | | | | world | | | | | |
+-----------------+-------------+---------+----------+---------+--------+-------------+---------+-------------+---------+--------+
| | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+-----------------+-------------+---------+----------+---------+--------+-------------+---------+-------------+---------+--------+
| Sales | 21,720 | 21,135 | 13,900 | 4,470 | - | - | - | - | - | 61,225 |
| by | | | | | | | | | | |
| operation | | | | | | | | | | |
+-----------------+-------------+---------+----------+---------+--------+-------------+---------+-------------+---------+--------+
| Inter-segment | 2,001 | (4,604) | 1,887 | 477 | 239 | - | - | - | - | - |
| sales | | | | | | | | | | |
+-----------------+-------------+---------+----------+---------+--------+-------------+---------+-------------+---------+--------+
| Sales | 23,721 | 16,531 | 15,787 | 4,947 | 239 | - | - | - | - | 61,225 |
| by | | | | | | | | | | |
| location | | | | | | | | | | |
| of | | | | | | | | | | |
| customers | | | | | | | | | | |
+-----------------+-------------+---------+----------+---------+--------+-------------+---------+-------------+---------+--------+
| Pre-exceptional | | 3,817 | | | 108 | (3,282) | (2,475) | (1,260) | 549 | 3,799 |
| operating | 5,529 | | 322 | 491 | | | | | | |
| profit/ segment | | | | | | | | | | |
| result by | | | | | | | | | | |
| location of | | | | | | | | | | |
| customers | | | | | | | | | | |
+-----------------+-------------+---------+----------+---------+--------+-------------+---------+-------------+---------+--------+
| Exceptional | - | - | - | - | - | - | - | - | - | - |
| items | | | | | | | | | | |
+-----------------+-------------+---------+----------+---------+--------+-------------+---------+-------------+---------+--------+
| Operating | 5,529 | | | 491 | | | (2,475) | (1,260) | | |
| profit/ | | 3,817 | 322 | | 108 | (3,282) | | | 549 | 3,799 |
| segment | | | | | | | | | | |
| result by | | | | | | | | | | |
| location | | | | | | | | | | |
| of | | | | | | | | | | |
| customers | | | | | | | | | | |
+-----------------+-------------+---------+----------+---------+--------+-------------+---------+-------------+---------+--------+
Restated
Six months to 2 December 2007
+-----------------+-------------+---------+----------+---------+--------+-------------+---------+-------------+---------+--------+
| | Continental | United | The | Asia | Rest | Central/ | Service | Design | Royalty | Group |
| | Europe | Kingdom | Americas | Pacific | of | unallocated | centres | and | income | |
| | | | | | the | | | development | | |
| | | | | | world | | | | | |
+-----------------+-------------+---------+----------+---------+--------+-------------+---------+-------------+---------+--------+
| Continuing | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
| operations | | | | | | | | | | |
+-----------------+-------------+---------+----------+---------+--------+-------------+---------+-------------+---------+--------+
| Sales by | 19,705 | 18,550 | 11,742 | 3,911 | - | - | - | - | - | 53,908 |
| operation | | | | | | | | | | |
+-----------------+-------------+---------+----------+---------+--------+-------------+---------+-------------+---------+--------+
| Inter-segment | 287 | (1,973) | 1,266 | 269 | 151 | - | - | - | - | - |
| sales | | | | | | | | | | |
+-----------------+-------------+---------+----------+---------+--------+-------------+---------+-------------+---------+--------+
| Sales by | 19,992 | 16,577 | 13,008 | 4,180 | 151 | - | - | - | - | 53,908 |
| location | | | | | | | | | | |
| of | | | | | | | | | | |
| customers | | | | | | | | | | |
+-----------------+-------------+---------+----------+---------+--------+-------------+---------+-------------+---------+--------+
| | | | | | | | | | | |
+-----------------+-------------+---------+----------+---------+--------+-------------+---------+-------------+---------+--------+
| Pre-exceptional | | | 501 | 184 | | (2,854) | (2,158) | (1,504) | 670 | 1,160 |
| operating | 3,489 | 2,757 | | | 75 | | | | | |
| profit/ segment | | | | | | | | | | |
| result by | | | | | | | | | | |
| location of | | | | | | | | | | |
| customers | | | | | | | | | | |
+-----------------+-------------+---------+----------+---------+--------+-------------+---------+-------------+---------+--------+
| Exceptional | (20) | (322) | (89) | - | - | (130) | - | - | - | (561) |
| items | | | | | | | | | | |
+-----------------+-------------+---------+----------+---------+--------+-------------+---------+-------------+---------+--------+
| Operating | 3,469 | 2,435 | 412 | 184 | 75 | (2,984) | (2,158) | (1,504) | 670 | 599 |
| profit/ | | | | | | | | | | |
| segment | | | | | | | | | | |
| result by | | | | | | | | | | |
| location | | | | | | | | | | |
| of | | | | | | | | | | |
| customers | | | | | | | | | | |
+-----------------+-------------+---------+----------+---------+--------+-------------+---------+-------------+---------+--------+
Year to 1 June 2008
+-----------------+-------------+---------+----------+---------+--------+-------------+---------+-------------+---------+---------+
| | Continental | United | The | Asia | Rest | Central/ | Service | Design | Royalty | Group |
| | Europe | Kingdom | Americas | Pacific | of | unallocated | centres | and | income | |
| | | | | | the | | | development | | |
| | | | | | world | | | | | |
+-----------------+-------------+---------+----------+---------+--------+-------------+---------+-------------+---------+---------+
| Continuing | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
| operations | | | | | | | | | | |
+-----------------+-------------+---------+----------+---------+--------+-------------+---------+-------------+---------+---------+
| Sales by | 41,139 | 36,760 | 24,011 | 8,435 | - | - | - | - | - | 110,345 |
| operation | | | | | | | | | | |
+-----------------+-------------+---------+----------+---------+--------+-------------+---------+-------------+---------+---------+
| Inter-segment | 1,952 | (5,704) | 2,833 | 645 | 274 | - | - | - | - | - |
| sales | | | | | | | | | | |
+-----------------+-------------+---------+----------+---------+--------+-------------+---------+-------------+---------+---------+
| Sales by | 43,091 | 31,056 | 26,844 | 9,080 | 274 | - | - | - | - | 110,345 |
| location | | | | | | | | | | |
| of | | | | | | | | | | |
| customers | | | | | | | | | | |
+-----------------+-------------+---------+----------+---------+--------+-------------+---------+-------------+---------+---------+
| | | | | | | | | | | |
+-----------------+-------------+---------+----------+---------+--------+-------------+---------+-------------+---------+---------+
| Pre-exceptional | 7,648 | 7,338 | 610 | 207 | 110 | (5,235) | | (2,965) | 1,736 | 4,917 |
| operating | | | | | | | (4,532) | | | |
| profit/segment | | | | | | | | | | |
| result by | | | | | | | | | | |
| location of | | | | | | | | | | |
| customers | | | | | | | | | | |
+-----------------+-------------+---------+----------+---------+--------+-------------+---------+-------------+---------+---------+
| Exceptional | (382) | (1,453) | (568) | 2 | - | - | - | 36 | - | (2,365) |
| items | | | | | | | | | | |
+-----------------+-------------+---------+----------+---------+--------+-------------+---------+-------------+---------+---------+
| Operating | 7,266 | 5,885 | | 209 | 110 | (5,235) | (4,532) | | 1,736 | 2,552 |
| profit/segment | | | 42 | | | | | (2,929) | | |
| result by | | | | | | | | | | |
| location of | | | | | | | | | | |
| customers | | | | | | | | | | |
+-----------------+-------------+---------+----------+---------+--------+-------------+---------+-------------+---------+---------+
The restatement of the six months to 2 December 2007 relates to the
reclassification of the results of the card games, role-playing games and board
games activities from continuing operations to discontinued operations as
detailed in note 5.
Central/unallocated, service centres, design and development and royalty income
segments (costs)/income comprise the (costs)/income arising in the United
Kingdom that cannot be directly attributed to an individual geographical
segment.
3. Dividends
No dividend was paid in the six months to 30 November 2008. In addition, no
interim dividend is proposed for the year ending 31 May 2009 (2007: GBPnil).
4. Tax
The taxation charge for the six months to 30 November 2008 is based on an
estimate of the full year effective rate of 15% (2007: 40%) reflecting a
deferred tax credit in respect of a proportion of the US losses previously
unrecognised. In addition, following a change in the UK corporation tax
legislation in the Finance Act 2008, the Group has taken a one-off charge of
GBP1,060,000 in the current year to reflect the phasing out of industrial
buildings allowances.
5. Discontinued operations
On 14 February 2008, the Group disposed of the trading activities of Sabertooth
Games Inc., its collectible card game business, and entered into a licensing
agreement for the publishing of board games, card games and role-playing games
with Fantasy Flight Games Inc. The net result of these operations has been
presented as a discontinued operation in the Group's income statement for all
periods presented in these financial statements.
These operations, which were previously treated as a separate cash-generating
unit due to their non-core nature, have been classified as discontinued.
The table below shows the results of the discontinued operations included in the
results of the Group:
Income statement
+--------------------------------------+-----------+---------+------------+------------+
| | Six months to | Six | Year to |
| | | months to | |
+--------------------------------------+---------------------+------------+------------+
| | 30 November | 2 | 1 June |
| | | December | |
+--------------------------------------+---------------------+------------+------------+
| | 2008 | 2007 | 2008 |
+--------------------------------------+---------------------+------------+------------+
| | GBP000 | GBP000 | GBP000 |
+--------------------------------------+---------------------+------------+------------+
| | | | |
+--------------------------------------+---------------------+------------+------------+
| Revenue | - | 722 | 1,308 |
+--------------------------------------+-----------+----------------------+------------+
| | | | |
+--------------------------------------+---------------------+------------+------------+
| Cost of sales | - | (309) | (514) |
+--------------------------------------+---------------------+------------+------------+
| | ---------- | ---------- | --------- |
+--------------------------------------+---------------------+------------+------------+
| Gross profit | - | 413 | 794 |
+--------------------------------------+---------------------+------------+------------+
| | | | |
+--------------------------------------+---------------------+------------+------------+
| Operating expenses | - | (469) | (1,900) |
+--------------------------------------+---------------------+------------+------------+
| | ---------- | ---------- | ---------- |
+--------------------------------------+---------------------+------------+------------+
| Operating loss | - | (56) | (1,106) |
+--------------------------------------+---------------------+------------+------------+
| | | | |
+--------------------------------------+---------------------+------------+------------+
| Operating profit/(loss) - | - | (56) | 86 |
| pre-exceptional items | | | |
+--------------------------------------+---------------------+------------+------------+
| Exceptional items | - | - | (1,192) |
+--------------------------------------+---------------------+------------+------------+
| | | | |
+--------------------------------------+---------------------+------------+------------+
| Income tax credit/(expense) | - | 26 | (80) |
+--------------------------------------+---------------------+------------+------------+
| | ---------- | ---------- | ---------- |
+--------------------------------------+---------------------+------------+------------+
| Loss for the period | - | (30) | (1,186) |
+--------------------------------------+---------------------+------------+------------+
| | ====== | ====== | ====== |
+--------------------------------------+-----------+---------+------------+------------+
Cash flow statement
+--------------------------------------+------------+------------+------------+
| | Six | Six | Year to |
| | months to | months to | |
+--------------------------------------+------------+------------+------------+
| | 30 | 2 | 1 June |
| | November | December | |
+--------------------------------------+------------+------------+------------+
| | 2008 | 2007 | 2008 |
+--------------------------------------+------------+------------+------------+
| | GBP000 | GBP000 | GBP000 |
+--------------------------------------+------------+------------+------------+
| | | | |
+--------------------------------------+------------+------------+------------+
| Cash flows from operating activities | - | 308 | 491 |
+--------------------------------------+------------+------------+------------+
| Cash flows from investing activities | - | (110) | (167) |
+--------------------------------------+------------+------------+------------+
| | ---------- | ---------- | ---------- |
+--------------------------------------+------------+------------+------------+
| Net increase in cash and cash | - | 198 | 324 |
| equivalents | | | |
+--------------------------------------+------------+------------+------------+
| | ====== | ====== | ====== |
+--------------------------------------+------------+------------+------------+
The table below shows the net assets disposed of in the year to 1 June 2008 and
the consideration received:
+------------------------------------------------------------+------------+
| | Year to |
+------------------------------------------------------------+------------+
| | 1 June |
+------------------------------------------------------------+------------+
| | 2008 |
+------------------------------------------------------------+------------+
| | GBP000 |
+------------------------------------------------------------+------------+
| | |
+------------------------------------------------------------+------------+
| Goodwill | 922 |
+------------------------------------------------------------+------------+
| Inventories | 139 |
+------------------------------------------------------------+------------+
| Trade and other receivables | 255 |
+------------------------------------------------------------+------------+
| | --------- |
+------------------------------------------------------------+------------+
| Assets disposed of | 1,316 |
+------------------------------------------------------------+------------+
| | |
+------------------------------------------------------------+------------+
| Consideration receivable | (198) |
+------------------------------------------------------------+------------+
| | ---------- |
+------------------------------------------------------------+------------+
| Loss on disposal | 1,118 |
+------------------------------------------------------------+------------+
| | ====== |
+------------------------------------------------------------+------------+
All cash flows arising from discontinued operations arise from operating
activities.
Assets held for sale
Following the closure of the tool making facility at Wisbech, UK, the related
freehold land and buildings were reclassified from non-current assets to assets
held for sale during the year to 1 June 2008. No gain or loss was recognised on
reclassification to current assets. The Wisbech facility was sold in July 2008
for a consideration of GBP500,000.
6. Earnings/(loss) per ordinary share
Basic earnings/(loss) per share
Basic earnings/(loss) per share is calculated by dividing the profit/(loss)
attributable to equity shareholders by the weighted average number of ordinary
shares in issue throughout the relevant period, excluding ordinary shares
purchased by the Company and held as treasury shares.
+--------------------------------------+------------+------------+------------+
| | | Restated | |
+--------------------------------------+------------+------------+------------+
| | Six | Six | Year to |
| | months to | months to | |
+--------------------------------------+------------+------------+------------+
| | 30 | 2 | 1 June |
| | November | December | |
+--------------------------------------+------------+------------+------------+
| | 2008 | 2007 | 2008 |
+--------------------------------------+------------+------------+------------+
| | | | |
+--------------------------------------+------------+------------+------------+
| Profit/(loss) attributable to equity | | | |
| shareholders (GBP000): | | | |
+--------------------------------------+------------+------------+------------+
| | | | |
+--------------------------------------+------------+------------+------------+
| Continuing operations | 1,533 | (85) | 446 |
+--------------------------------------+------------+------------+------------+
| Discontinued operations | - | (30) | (1,186) |
+--------------------------------------+------------+------------+------------+
| | ---------- | ---------- | --------- |
+--------------------------------------+------------+------------+------------+
| Total | 1,533 | (115) | (740) |
+--------------------------------------+------------+------------+------------+
| | ---------- | ---------- | ---------- |
+--------------------------------------+------------+------------+------------+
| | | | |
+--------------------------------------+------------+------------+------------+
| Weighted average number of ordinary | 31,129 | 31,117 | 31,123 |
| shares in issue (thousands) | | | |
+--------------------------------------+------------+------------+------------+
| | ---------- | ---------- | ---------- |
+--------------------------------------+------------+------------+------------+
| Basic earnings/(loss) per share - | 4.9 | (0.3) | 1.4 |
| continuing operations (pence per | | | |
| share) | | | |
+--------------------------------------+------------+------------+------------+
| | ====== | ====== | ====== |
+--------------------------------------+------------+------------+------------+
| | | | |
+--------------------------------------+------------+------------+------------+
| Basic earnings/(loss) per share | 4.9 | (0.4) | (2.4) |
| (pence per share) | | | |
+--------------------------------------+------------+------------+------------+
| | ====== | ====== | ====== |
+--------------------------------------+------------+------------+------------+
Diluted earnings/(loss) per share
The calculation of diluted earnings/(loss) per share has been based on
profit/(loss) attributable to equity shareholders and the weighted average
number of shares in issue throughout the period, adjusted for the dilution
effect of share options outstanding at the period end.
+--------------------------------------+-----------+---------+------------+------------+
| | | Restated | |
+--------------------------------------+---------------------+------------+------------+
| | Six months to | Six | Year to |
| | | months to | |
+--------------------------------------+---------------------+------------+------------+
| | 30 November | 2 | 1 June |
| | | December | |
+--------------------------------------+---------------------+------------+------------+
| | 2008 | 2007 | 2008 |
+--------------------------------------+---------------------+------------+------------+
| | | | |
+--------------------------------------+---------------------+------------+------------+
| Profit/(loss) attributable to equity | | | |
| shareholders (GBP000): | | | |
+--------------------------------------+---------------------+------------+------------+
| | | | |
+--------------------------------------+---------------------+------------+------------+
| Continuing operations | 1,533 | (85) | 446 |
+--------------------------------------+---------------------+------------+------------+
| Discontinued operations | - | (30) | (1,186) |
+--------------------------------------+---------------------+------------+------------+
| | ---------- | ---------- | --------- |
+--------------------------------------+---------------------+------------+------------+
| Total | 1,533 | (115) | (740) |
+--------------------------------------+---------------------+------------+------------+
| | ---------- | ---------- | ---------- |
+--------------------------------------+---------------------+------------+------------+
| | | | |
+--------------------------------------+---------------------+------------+------------+
| Weighted average number of ordinary | 31,129 | 31,117 | 31,123 |
| shares in issue (thousands) | | | |
+--------------------------------------+---------------------+------------+------------+
| Adjustment for share options | 32 | - | - |
| (thousands) | | | |
+--------------------------------------+---------------------+------------+------------+
| | ---------- | ---------- | ---------- |
+--------------------------------------+---------------------+------------+------------+
| Weighted average number of ordinary | 31,161 | 31,117 | 31,123 |
| shares for diluted earnings per | | | |
| share (thousands) | | | |
+--------------------------------------+-----------+----------------------+------------+
| | ---------- | ---------- | ---------- |
+--------------------------------------+---------------------+------------+------------+
| Diluted earnings/(loss) per share - | 4.9 | (0.3) | 1.4 |
| continuing operations (pence per | | | |
| share) | | | |
+--------------------------------------+---------------------+------------+------------+
| | ====== | ====== | ====== |
+--------------------------------------+---------------------+------------+------------+
| | | | |
+--------------------------------------+---------------------+------------+------------+
| Diluted earnings/(loss) per share | 4.9 | (0.4) | (2.4) |
| (pence per share) | | | |
+--------------------------------------+---------------------+------------+------------+
| | ====== | ====== | ====== |
+--------------------------------------+-----------+---------+------------+------------+
7. Reconciliation of profit/(loss) attributable to equity shareholders to net
cash from operations
+--------------------------------------+------------+------------+------------+
| | Six | Six | Year to |
| | months to | months to | |
+--------------------------------------+------------+------------+------------+
| | 30 | 2 | 1 June |
| | November | December | |
+--------------------------------------+------------+------------+------------+
| | 2008 | 2007 | 2008 |
+--------------------------------------+------------+------------+------------+
| | GBP000 | GBP000 | GBP000 |
+--------------------------------------+------------+------------+------------+
| | | | |
+--------------------------------------+------------+------------+------------+
| Operating profit - continuing | 3,799 | 599 | 2,552 |
| operations | | | |
+--------------------------------------+------------+------------+------------+
| Operating loss - discontinued | - | (56) | (1,106) |
| operations | | | |
+--------------------------------------+------------+------------+------------+
| Depreciation of property, plant and | 3,264 | 3,377 | 6,778 |
| equipment | | | |
+--------------------------------------+------------+------------+------------+
| Impairment reversal on property, | - | - | (52) |
| plant and equipment | | | |
+--------------------------------------+------------+------------+------------+
| Loss on disposal of property, plant | - | 116 | 210 |
| and equipment | | | |
+--------------------------------------+------------+------------+------------+
| Profit on disposal of assets held | (36) | - | - |
| for sale | | | |
+--------------------------------------+------------+------------+------------+
| Loss on disposal of goodwill | - | - | 922 |
+--------------------------------------+------------+------------+------------+
| Amortisation of capitalised | 1,292 | 1,009 | 2,236 |
| development costs | | | |
+--------------------------------------+------------+------------+------------+
| Amortisation of other intangibles | 592 | 372 | 753 |
+--------------------------------------+------------+------------+------------+
| Net fair value (gains)/losses on | (171) | 61 | 421 |
| derivative financial instruments | | | |
+--------------------------------------+------------+------------+------------+
| Share-based payments | 56 | 79 | 135 |
+--------------------------------------+------------+------------+------------+
| Changes in working capital: | | | |
+--------------------------------------+------------+------------+------------+
| -(Increase)/decrease in inventories | (550) | (437) | 811 |
+--------------------------------------+------------+------------+------------+
| -Increase in trade and other | (2,392) | (3,988) | (847) |
| receivables | | | |
+--------------------------------------+------------+------------+------------+
| -(Decrease)/increase in trade and | (1,271) | 1,393 | 480 |
| other payables | | | |
+--------------------------------------+------------+------------+------------+
| -Decrease in provisions | (750) | (1,902) | (2,196) |
+--------------------------------------+------------+------------+------------+
| | ---------- | ---------- | ---------- |
+--------------------------------------+------------+------------+------------+
| Cash generated from operations | 3,833 | 623 | 11,097 |
+--------------------------------------+------------+------------+------------+
| | ====== | ====== | ====== |
+--------------------------------------+------------+------------+------------+
The cash outflow relating to exceptional items in the six months to 30 November
2008 was GBP649,000 (year to 1 June 2008: GBP3,734,000 and six months to 2
December 2007: GBP2,088,000).
8. Cash and cash equivalents
Cash and cash equivalents and bank overdrafts include the following for the
purposes of the cash flow statement:
+--------------------------------------+------------+------------+------------+
| | 30 | 2 | 1 June |
| | November | December | |
+--------------------------------------+------------+------------+------------+
| | 2008 | 2007 | 2008 |
+--------------------------------------+------------+------------+------------+
| | GBP000 | GBP000 | GBP000 |
+--------------------------------------+------------+------------+------------+
| | | | |
+--------------------------------------+------------+------------+------------+
| Cash and cash equivalents | 7,861 | 6,722 | 7,723 |
+--------------------------------------+------------+------------+------------+
| Bank overdraft | (1,821) | (6,876) | (2,779) |
+--------------------------------------+------------+------------+------------+
| | ---------- | ---------- | ---------- |
+--------------------------------------+------------+------------+------------+
| | 6,040 | (154) | 4,944 |
+--------------------------------------+------------+------------+------------+
| | ====== | ====== | ====== |
+--------------------------------------+------------+------------+------------+
9. Financial liabilities - borrowings
+--------------------------------------+------------+------------+------------+
| | 30 | 2 | 1 June |
| | November | December | |
+--------------------------------------+------------+------------+------------+
| | 2008 | 2007 | 2008 |
+--------------------------------------+------------+------------+------------+
| | GBP000 | GBP000 | GBP000 |
+--------------------------------------+------------+------------+------------+
| | | | |
+--------------------------------------+------------+------------+------------+
| Current | | | |
+--------------------------------------+------------+------------+------------+
| Bank overdraft | 1,821 | 6,876 | 2,779 |
+--------------------------------------+------------+------------+------------+
| Obligations under finance leases | 9 | 13 | 12 |
+--------------------------------------+------------+------------+------------+
| | ---------- | ---------- | ---------- |
+--------------------------------------+------------+------------+------------+
| | 1,830 | 6,889 | 2,791 |
+--------------------------------------+------------+------------+------------+
| | ---------- | ---------- | ---------- |
+--------------------------------------+------------+------------+------------+
| Non-current | | | |
+--------------------------------------+------------+------------+------------+
| Bank loans | 17,000 | 15,000 | 15,000 |
+--------------------------------------+------------+------------+------------+
| Obligations under finance leases | - | 4 | 1 |
+--------------------------------------+------------+------------+------------+
| | ---------- | ---------- | ---------- |
+--------------------------------------+------------+------------+------------+
| | 17,000 | 15,004 | 15,001 |
+--------------------------------------+------------+------------+------------+
| | ---------- | ---------- | ---------- |
+--------------------------------------+------------+------------+------------+
| Total borrowings | 18,830 | 21,893 | 17,792 |
+--------------------------------------+------------+------------+------------+
| | ====== | ====== | ====== |
+--------------------------------------+------------+------------+------------+
During the period to 30 November 2008, the Group increased its revolving credit
facility to GBP20,000,000 and reduced its working capital facility to
GBP5,000,000. These facilities are secured on UK assets. The seasonal facilities
have been removed in favour of a higher revolving credit facility.
10. Other intangible assets
+--------------------------------------+------------+------------+------------+
| | 30 | 2 | 1 June |
| | November | December | |
+--------------------------------------+------------+------------+------------+
| | 2008 | 2007 | 2008 |
+--------------------------------------+------------+------------+------------+
| | GBP000 | GBP000 | GBP000 |
+--------------------------------------+------------+------------+------------+
| | | | |
+--------------------------------------+------------+------------+------------+
| Net book value at beginning of | 6,059 | 4,963 | 4,963 |
| period | | | |
+--------------------------------------+------------+------------+------------+
| Additions | 1,986 | 1,957 | 4,088 |
+--------------------------------------+------------+------------+------------+
| Exchange differences | 1 | 6 | 41 |
+--------------------------------------+------------+------------+------------+
| Disposals | - | - | (44) |
+--------------------------------------+------------+------------+------------+
| Amortisation charge | (1,883) | (1,381) | (2,989) |
+--------------------------------------+------------+------------+------------+
| | ---------- | ---------- | ---------- |
+--------------------------------------+------------+------------+------------+
| Net book value at end of period | 6,163 | 5,545 | 6,059 |
+--------------------------------------+------------+------------+------------+
| | ====== | ====== | ====== |
+--------------------------------------+------------+------------+------------+
11. Property, plant and equipment
+--------------------------------------+------------+------------+------------+
| | 30 | 2 | 1 June |
| | November | December | |
+--------------------------------------+------------+------------+------------+
| | 2008 | 2007 | 2008 |
+--------------------------------------+------------+------------+------------+
| | GBP000 | GBP000 | GBP000 |
+--------------------------------------+------------+------------+------------+
| | | | |
+--------------------------------------+------------+------------+------------+
| Net book value at beginning of | 26,422 | 27,986 | 27,986 |
| period | | | |
+--------------------------------------+------------+------------+------------+
| Additions | 2,615 | 2,569 | 5,591 |
+--------------------------------------+------------+------------+------------+
| Exchange differences | 553 | - | 295 |
+--------------------------------------+------------+------------+------------+
| Disposals | (8) | (125) | (260) |
+--------------------------------------+------------+------------+------------+
| Charge for the period | (3,264) | (3,377) | (6,778) |
+--------------------------------------+------------+------------+------------+
| Impairment reversal | - | - | 52 |
+--------------------------------------+------------+------------+------------+
| Reclassifications | - | - | (464) |
+--------------------------------------+------------+------------+------------+
| | ---------- | ---------- | ---------- |
+--------------------------------------+------------+------------+------------+
| Net book value at end of period | 26,318 | 27,053 | 26,422 |
+--------------------------------------+------------+------------+------------+
| | ====== | ====== | ====== |
+--------------------------------------+------------+------------+------------+
12. Provisions
+--------------------------------------+------------+------------+------------+------------+
| | | Employee | | |
+--------------------------------------+------------+------------+------------+------------+
| | Redundancy | benefits | Property | Total |
+--------------------------------------+------------+------------+------------+------------+
| | GBP000 | GBP000 | GBP000 | GBP000 |
+--------------------------------------+------------+------------+------------+------------+
| | | | | |
+--------------------------------------+------------+------------+------------+------------+
| As at 4 June 2007 | 1,556 | 888 | 2,064 | 4,508 |
+--------------------------------------+------------+------------+------------+------------+
| Charged to the income statement | 415 | 44 | 35 | 494 |
+--------------------------------------+------------+------------+------------+------------+
| Exchange differences | 29 | 28 | (4) | 53 |
+--------------------------------------+------------+------------+------------+------------+
| Utilised | (1,657) | (42) | (724) | (2,423) |
+--------------------------------------+------------+------------+------------+------------+
| | ---------- | ---------- | ---------- | ---------- |
+--------------------------------------+------------+------------+------------+------------+
| As at 2 December 2007 | 343 | 918 | 1,371 | 2,632 |
+--------------------------------------+------------+------------+------------+------------+
| | ====== | ====== | ====== | ====== |
+--------------------------------------+------------+------------+------------+------------+
+--------------------------------------+------------+------------+------------+------------+
| | | Employee | | |
+--------------------------------------+------------+------------+------------+------------+
| | Redundancy | benefits | Property | Total |
+--------------------------------------+------------+------------+------------+------------+
| | GBP000 | GBP000 | GBP000 | GBP000 |
+--------------------------------------+------------+------------+------------+------------+
| | | | | |
+--------------------------------------+------------+------------+------------+------------+
| As at 4 June 2007 | 1,556 | 888 | 2,064 | 4,508 |
+--------------------------------------+------------+------------+------------+------------+
| Charged/(credited) to the income | 1,164 | (78) | (101) | 985 |
| statement | | | | |
+--------------------------------------+------------+------------+------------+------------+
| Exchange differences | 46 | 81 | 33 | 160 |
+--------------------------------------+------------+------------+------------+------------+
| Increase in provision - discount | - | - | 30 | 30 |
| unwinding | | | | |
+--------------------------------------+------------+------------+------------+------------+
| Utilised | (2,344) | (37) | (830) | (3,211) |
+--------------------------------------+------------+------------+------------+------------+
| | ---------- | ---------- | ---------- | ---------- |
+--------------------------------------+------------+------------+------------+------------+
| As at 1 June 2008 and 2 June 2008 | 422 | 854 | 1,196 | 2,472 |
+--------------------------------------+------------+------------+------------+------------+
| | | | | |
+--------------------------------------+------------+------------+------------+------------+
| (Credited)/charged to the income | (16) | 17 | (16) | (15) |
| statement | | | | |
+--------------------------------------+------------+------------+------------+------------+
| Exchange differences | 7 | 23 | 37 | 67 |
+--------------------------------------+------------+------------+------------+------------+
| Utilised | (294) | (16) | (403) | (713) |
+--------------------------------------+------------+------------+------------+------------+
| | ---------- | ---------- | ---------- | ---------- |
+--------------------------------------+------------+------------+------------+------------+
| As at 30 November 2008 | 119 | 878 | 814 | 1,811 |
+--------------------------------------+------------+------------+------------+------------+
| | ====== | ====== | ====== | ====== |
+--------------------------------------+------------+------------+------------+------------+
13. Seasonality
The Group's monthly sales profile demonstrates an element of seasonality around
the Christmas period. This impacts sales in the months of September and
December.
14. Related-party transactions
There were no material related-party transactions during the period.
15. Exceptional items
The exceptional item relates to the cost reduction programme announced in May
2007. As part of this programme, in the six months to 2 December 2007, GBP42,000
was incurred in closing loss making Hobby centres, GBP356,000 in rationalising
the manufacturing and supply chain and GBP163,000 in simplifying the support
infrastructure. There are no exceptional items in the six months to 30 November
2008.
+----------------------------+----------------------+-------------+--------------+
| | | Restated | Restated |
+----------------------------+----------------------+-------------+--------------+
| | Restated | Continuing | Six months |
| | | | to |
+----------------------------+----------------------+-------------+--------------+
| | Continuing | exceptional | 2 December |
+----------------------------+----------------------+-------------+--------------+
| | pre-exceptional | items | 2007 |
+----------------------------+----------------------+-------------+--------------+
| | GBP000 | GBP000 | GBP000 |
+----------------------------+----------------------+-------------+--------------+
| | | | |
+----------------------------+----------------------+-------------+--------------+
| Revenue | 53,908 | - | 53,908 |
+----------------------------+----------------------+-------------+--------------+
| Cost of sales | (16,125) | (261) | (16,386) |
+----------------------------+----------------------+-------------+--------------+
| | ---------- | --------- | ---------- |
+----------------------------+----------------------+-------------+--------------+
| Gross profit | 37,783 | (261) | 37,522 |
+----------------------------+----------------------+-------------+--------------+
| Operating expenses | (37,293) | (300) | (37,593) |
+----------------------------+----------------------+-------------+--------------+
| Other operating | 670 | - | 670 |
| income-royalties | | | |
| receivable | | | |
+----------------------------+----------------------+-------------+--------------+
| | ---------- | --------- | ---------- |
+----------------------------+----------------------+-------------+--------------+
| Operating profit/(loss) | 1,160 | (561) | 599 |
+----------------------------+----------------------+-------------+--------------+
| | ====== | ====== | ====== |
+----------------------------+----------------------+-------------+--------------+
+----------------------------+----------------------+-------------+--------------+
| | | Continuing | Year to |
+----------------------------+----------------------+-------------+--------------+
| | Continuing | exceptional | 1 June |
+----------------------------+----------------------+-------------+--------------+
| | pre-exceptional | items | 2008 |
+----------------------------+----------------------+-------------+--------------+
| | GBP000 | GBP000 | GBP000 |
+----------------------------+----------------------+-------------+--------------+
| | | | |
+----------------------------+----------------------+-------------+--------------+
| Revenue | 110,345 | - | 110,345 |
+----------------------------+----------------------+-------------+--------------+
| Cost of sales | (32,896) | (835) | (33,731) |
+----------------------------+----------------------+-------------+--------------+
| | ---------- | --------- | ---------- |
+----------------------------+----------------------+-------------+--------------+
| Gross profit | 77,449 | (835) | 76,614 |
+----------------------------+----------------------+-------------+--------------+
| Operating expenses | (74,268) | (1,530) | (75,798) |
+----------------------------+----------------------+-------------+--------------+
| Other operating | 1,736 | - | 1,736 |
| income-royalties | | | |
| receivable | | | |
+----------------------------+----------------------+-------------+--------------+
| | ---------- | --------- | ---------- |
+----------------------------+----------------------+-------------+--------------+
| Operating profit/(loss) | 4,917 | (2,365) | 2,552 |
+----------------------------+----------------------+-------------+--------------+
| | ====== | ====== | ====== |
+----------------------------+----------------------+-------------+--------------+
16. Consolidated statement of changes in shareholders' equity
+-------------+-----------+------------+--------+---+---------+---+------------+--+------+------+--------+---+------------+-----------+
| | | | | Other | reserves | | | Retained | earnings | |
+-------------+-----------+------------+--------+-------------+----------------+--+------+---------------+----------------+-----------+
| | Called | Share | Capital | | | | | | | |
+-------------+-----------+------------+------------+-------------+------------+--+-------------+------------+------------+-----------+
| | up | premium | redemption | Translation | Other | | Hedging | Treasury | Profit | Total |
| | share | | | | | | | | and | |
+-------------+-----------+------------+------------+-------------+------------+--+-------------+------------+------------+-----------+
| | capital | account | reserve | reserve | reserve | | reserve | shares | loss | equity |
+-------------+-----------+------------+------------+-------------+------------+--+-------------+------------+------------+-----------+
| | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | | GBP000 | GBP000 | GBP000 | GBP000 |
+-------------+-----------+------------+------------+-------------+------------+--+-------------+------------+------------+-----------+
| | | | | | | | | | | |
+-------------+-----------+------------+------------+-------------+------------+--+-------------+------------+------------+-----------+
| As at 4 | 1,556 | 7,822 | 101 | (261) | (1,050) | | (62) | (49) | 21,800 | 29,857 |
| June 2007 | | | | | | | | | | |
+-------------+-----------+------------+------------+-------------+------------+--+-------------+------------+------------+-----------+
| Exchange | - | - | - | 107 | - | | - | - | - | 107 |
| adjustments | | | | | | | | | | |
+-------------+-----------+------------+------------+-------------+------------+--+-------------+------------+------------+-----------+
| Loss for | - | - | - | - | - | | - | - | (115) | (115) |
| the period | | | | | | | | | | |
+-------------+-----------+------------+------------+-------------+------------+--+-------------+------------+------------+-----------+
| Shares | - | - | - | - | - | | - | 49 | (49) | - |
| vested | | | | | | | | | | |
+-------------+-----------+------------+------------+-------------+------------+--+-------------+------------+------------+-----------+
| Share-based | - | - | - | - | - | | - | - | 79 | 79 |
| payments | | | | | | | | | | |
+-------------+-----------+------------+------------+-------------+------------+--+-------------+------------+------------+-----------+
| Deferred | - | - | - | - | - | | 52 | - | - | 52 |
| tax | | | | | | | | | | |
+-------------+-----------+------------+------------+-------------+------------+--+-------------+------------+------------+-----------+
| Cash flow | | | | | | | | | | |
| hedges: | | | | | | | | | | |
+-------------+-----------+------------+------------+-------------+------------+--+-------------+------------+------------+-----------+
| - fair | - | - | - | - | - | | (219) | - | - | (219) |
| value | | | | | | | | | | |
| losses in | | | | | | | | | | |
| the period | | | | | | | | | | |
+-------------+-----------+------------+------------+-------------+------------+--+-------------+------------+------------+-----------+
| - | - | - | - | - | - | | 29 | - | - | 29 |
| transferred | | | | | | | | | | |
| to net | | | | | | | | | | |
| profit | | | | | | | | | | |
+-------------+-----------+------------+------------+-------------+------------+--+-------------+------------+------------+-----------+
| | --------- | ---------- | ---------- | ---------- | ---------- | | ---------- | ---------- | ---------- | --------- |
+-------------+-----------+------------+------------+-------------+------------+--+-------------+------------+------------+-----------+
| As at 2 | 1,556 | 7,822 | 101 | (154) | (1,050) | | (200) | - | 21,715 | 29,790 |
| December | | | | | | | | | | |
| 2007 | | | | | | | | | | |
+-------------+-----------+------------+------------+-------------+------------+--+-------------+------------+------------+-----------+
| | ====== | ====== | ====== | ====== | ====== | | ====== | ====== | ======= | ====== |
+-------------+-----------+------------+--------+---+---------+---+------------+--+------+------+--------+---+------------+-----------+
+-------------+-----------+------------+--------+---+---------+---+------------+--+------+------+--------+---+------------+-----------+
| | | | | Other | reserves | | | Retained | earnings | |
+-------------+-----------+------------+--------+-------------+----------------+--+------+---------------+----------------+-----------+
| | Called | Share | Capital | | | | | | | |
+-------------+-----------+------------+------------+-------------+------------+--+-------------+------------+------------+-----------+
| | up | premium | redemption | Translation | Other | | Hedging | Treasury | Profit | Total |
| | share | | | | | | | | and | |
+-------------+-----------+------------+------------+-------------+------------+--+-------------+------------+------------+-----------+
| | capital | account | reserve | reserve | reserve | | reserve | shares | loss | equity |
+-------------+-----------+------------+------------+-------------+------------+--+-------------+------------+------------+-----------+
| | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | | GBP000 | GBP000 | GBP000 | GBP000 |
+-------------+-----------+------------+------------+-------------+------------+--+-------------+------------+------------+-----------+
| | | | | | | | | | | |
+-------------+-----------+------------+------------+-------------+------------+--+-------------+------------+------------+-----------+
| As at 4 | 1,556 | 7,822 | 101 | (261) | (1,050) | | (62) | (49) | 21,800 | 29,857 |
| June 2007 | | | | | | | | | | |
+-------------+-----------+------------+------------+-------------+------------+--+-------------+------------+------------+-----------+
| Exchange | - | - | - | 1,626 | - | | - | - | - | 1,626 |
| adjustments | | | | | | | | | | |
+-------------+-----------+------------+------------+-------------+------------+--+-------------+------------+------------+-----------+
| Loss for | - | - | - | - | - | | - | - | (740) | (740) |
| the year | | | | | | | | | | |
+-------------+-----------+------------+------------+-------------+------------+--+-------------+------------+------------+-----------+
| Net | - | - | - | (737) | - | | - | - | - | (737) |
| investment | | | | | | | | | | |
| hedge | | | | | | | | | | |
+-------------+-----------+------------+------------+-------------+------------+--+-------------+------------+------------+-----------+
| Share-based | - | - | - | - | - | | - | - | 135 | 135 |
| payments | | | | | | | | | | |
+-------------+-----------+------------+------------+-------------+------------+--+-------------+------------+------------+-----------+
| Shares | - | - | - | - | - | | - | 49 | (49) | - |
| vested | | | | | | | | | | |
+-------------+-----------+------------+------------+-------------+------------+--+-------------+------------+------------+-----------+
| Deferred | - | - | - | - | - | | 237 | - | - | 237 |
| tax | | | | | | | | | | |
+-------------+-----------+------------+------------+-------------+------------+--+-------------+------------+------------+-----------+
| Cash flow | | | | | | | | | | |
| hedges: | | | | | | | | | | |
+-------------+-----------+------------+------------+-------------+------------+--+-------------+------------+------------+-----------+
| - fair | - | - | - | - | - | | (940) | - | - | (940) |
| value | | | | | | | | | | |
| losses in | | | | | | | | | | |
| the period | | | | | | | | | | |
+-------------+-----------+------------+------------+-------------+------------+--+-------------+------------+------------+-----------+
| - | - | - | - | - | - | | 88 | - | - | 88 |
| transferred | | | | | | | | | | |
| to net | | | | | | | | | | |
| profit | | | | | | | | | | |
+-------------+-----------+------------+------------+-------------+------------+--+-------------+------------+------------+-----------+
| | --------- | ---------- | ---------- | ---------- | ---------- | | ---------- | ---------- | ---------- | --------- |
+-------------+-----------+------------+------------+-------------+------------+--+-------------+------------+------------+-----------+
| As at 1 | 1,556 | 7,822 | 101 | 628 | (1,050) | | (677) | - | 21,146 | 29,526 |
| June 2008 | | | | | | | | | | |
| and 2 June | | | | | | | | | | |
| 2008 | | | | | | | | | | |
+-------------+-----------+------------+------------+-------------+------------+--+-------------+------------+------------+-----------+
| Exchange | - | - | - | 2,161 | - | | - | - | - | 2,161 |
| adjustments | | | | | | | | | | |
+-------------+-----------+------------+------------+-------------+------------+--+-------------+------------+------------+-----------+
| Net | - | - | - | (276) | - | | - | - | - | (276) |
| investment | | | | | | | | | | |
| hedge | | | | | | | | | | |
+-------------+-----------+------------+------------+-------------+------------+--+-------------+------------+------------+-----------+
| Profit for | - | - | - | - | - | | - | - | 1,533 | 1,533 |
| the period | | | | | | | | | | |
+-------------+-----------+------------+------------+-------------+------------+--+-------------+------------+------------+-----------+
| Share-based | - | - | - | - | - | | - | - | 56 | 56 |
| payments | | | | | | | | | | |
+-------------+-----------+------------+------------+-------------+------------+--+-------------+------------+------------+-----------+
| Deferred | - | - | - | - | - | | (161) | - | - | (161) |
| tax | | | | | | | | | | |
+-------------+-----------+------------+------------+-------------+------------+--+-------------+------------+------------+-----------+
| Cash flow | | | | | | | | | | |
| hedges: | | | | | | | | | | |
+-------------+-----------+------------+------------+-------------+------------+--+-------------+------------+------------+-----------+
| - fair | - | - | - | - | - | | (246) | - | - | (246) |
| value | | | | | | | | | | |
| losses in | | | | | | | | | | |
| the period | | | | | | | | | | |
+-------------+-----------+------------+------------+-------------+------------+--+-------------+------------+------------+-----------+
| - | - | - | - | - | - | | 821 | - | - | 821 |
| transferred | | | | | | | | | | |
| to net | | | | | | | | | | |
| profit | | | | | | | | | | |
+-------------+-----------+------------+------------+-------------+------------+--+-------------+------------+------------+-----------+
| | --------- | ---------- | ---------- | ---------- | ---------- | | ---------- | ---------- | ---------- | --------- |
+-------------+-----------+------------+------------+-------------+------------+--+-------------+------------+------------+-----------+
| As at 30 | 1,556 | 7,822 | 101 | 2,513 | (1,050) | | (263) | - | 22,735 | 33,414 |
| November | | | | | | | | | | |
| 2008 | | | | | | | | | | |
+-------------+-----------+------------+------------+-------------+------------+--+-------------+------------+------------+-----------+
| | ====== | ====== | ====== | ====== | ====== | | ====== | ====== | ======= | ====== |
+-------------+-----------+------------+--------+---+---------+---+------------+--+------+------+--------+---+------------+-----------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR PUUUUGUPBGPQ
|