RNS Number:2383K
Retail Stores PLC
29 March 2005
FOR IMMEDIATE RELEASE
29th March 2005
RETAIL STORES PLC
INTERIM RESULTS
FOR SIX MONTHS TO 31st DECEMBER 2004
HIGHLIGHTS
* Christmas trading improved by 14% - in contrast to industry trends
* Sales advance to #23.7m over six months to 31st December, up 12% over
comparable period last year
* Sales momentum continued into the New Year with turnover in February and
March 2005 showing a healthy increase over the previous year
* Improved performance being led by: Ladies Accessories, Jewellery, Ladies
and Menswear, while re-vamped Home departments proving popular and selling
well
* Creation of fully dedicated design studio to support planned expansion
of Liberty branded goods
* Aim to eliminate #50m of borrowings through property sales
* Operating results, before interest and tax, improved to a loss of
#550,000 against a loss of #754,000 in six months to December 2003
* Name to be changed to Liberty Plc
* "Considerable progress is being made at Liberty, and the signs are
encouraging. It is pleasing to see that Liberty continues to deliver sales
growth as we re-establish the store as a luxury goods emporium. Early
indications are that this growth will continue for the remainder of the
second half, and I am confident of reporting a healthy uplift in sales at
the year end," Richard Balfour-Lynn, Chairman.
Contact: Retail Stores Plc Tel: 020 7734 1234
Iain Renwick, Chief Executive
Fraser Allan, Finance Director
Baron Phillips Associates Tel: 020 7920 3161
Baron Phillips
CHAIRMAN'S STATEMENT
for the six months ended 31st December 2004
Our performance over the six months to 31st December 2004 has been encouraging.
Sales advanced 12% over the comparable period last year to #23.7m, reflecting
the management team's efforts to transform Liberty, once more, into a
destination shopping location.
The level of activity in the store began to pick up during September and
October, as our new concepts unveiled in fashion accessories and four new home
departments were well received by our customers. Store sales during these two
months were particularly strong, recording a 22% uplift over the previous year.
Our investment programmes in people, marketing and new concepts continued during
the period, although they did incur upfront costs. This meant that our stronger
sales did not fully translate into greater bottom line profitability. There was
improvement at the operating level, before interest and taxation, where we
reduced the loss from #754,000 for the same period a year ago, to a loss of
#550,000 this time. However at the pre-tax level, losses increased from #2.0m to
#2.3m as the impact of increased interest charges was felt. Losses per share
were 11.8p against 11.1p last time.
We propose to remove the burden of interest charges on the Company by repaying
our external borrowings, which currently amount to approximately #50m. We aim to
achieve this through the sale of our office building, Lasenby House, and by the
sale and leaseback of Regent House. I can report there has been strong interest
among investors for these two prime properties in the heart of London's West End
.
It is pleasing to note that, unlike a great majority of retailers, Liberty
enjoyed an excellent run up to Christmas. Turnover in the store picked up
dramatically in December, with sales in the 24 days up to Christmas advancing by
14% over December 2003.
This momentum continued through the post Christmas Sales and into the New Year.
Since the end of the Winter Sale, Liberty has maintained its attractiveness to
shoppers as turnover during February and March showed very healthy increases
over the previous year.
Liberty's overall improved performance is being led by a number of key areas
within the store: Ladies Accessories, Jewellery, Ladies and Menswear, while the
re-vamped Home departments are proving extremely popular and are selling well.
As I outlined at the June year end our strategy to develop the Liberty business,
under the leadership of Iain Renwick, Chief Executive, and Fraser Allan, Finance
Director, is through the expansion of Liberty branded goods. Currently only 10%
of sales are Liberty branded goods and our aim over the next 5 years is to
increase this to 25%.
At the heart of our planned expansion of Liberty branded goods is the
establishment, for the first time, of a fully dedicated design studio headed by
Tamara Salman who joined Liberty in September 2004 as Director of Design. We
anticipate the first fruits of the studio's work will be seen in the store this
coming Autumn with the launch of a range of ladies fashion accessories, travel
bags and stationery.
We are also taking the opportunity to change the name of the Company from Retail
Stores Plc to Liberty Plc, reflecting the trading name of the business. A
shareholders' meeting will be held in April to consider this change, but it has
no affect on shareholders' interests in the Company.
Considerable progress is being made at Liberty, and the signs are encouraging.
It is pleasing to see that Liberty continues to deliver sales growth, as we
re-establish the store as a luxury goods emporium. Early indications are that
this growth will continue for the remainder of the second half and I am
confident of reporting a healthy uplift in sales at the year end.
Richard Balfour-Lynn
Executive Chairman
29th March 2005
CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the six months ended 31st December 2004
6 months 6 months Year
ended ended ended
31st December 31st December 30th June
2004 2003 2004
Notes #'000 #'000 #'000
Turnover 2 23,695 21,152 39,527
Cost of sales (13,027) (11,626) (22,193)
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Gross profit 10,668 9,526 17,334
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Selling and distribution
costs
(including exceptional (11,575) (10,663) (21,354)
operating charges)
Administrative expenses (1,362) (1,425) (2,919)
Other operating income 1,719 1,808 3,353
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Operating loss on ordinary
activities before interest
and taxation (550) (754) (3,586)
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Operating loss before
exceptional operating charges (550) (754) (3,219)
Exceptional operating charges 3 - - (367)
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Operating loss on ordinary
activities before interest
and taxation 2 (550) (754) (3,586)
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Net interest payable and
similar charges (1,751) (1,215) (2,606)
-----------------------------------------------------------------------------
Loss on ordinary activities
before taxation (2,301) (1,969) (6,192)
Taxation on loss on ordinary
activities (217) (332) (682)
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Loss on ordinary activities
after taxation (2,518) (2,301) (6,874)
Equity minority interests (104) (173) (360)
Non-equity minority interests (27) (27) (55)
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Loss attributable to ordinary
shareholders (2,649) (2,501) (7,289)
Undeclared non-equity
preference dividends 4 (11) (11) (23)
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Retained loss for the period 7 (2,660) (2,512) (7,312)
-----------------------------------------------------------------------------
Basic and diluted loss per
share 5 (11.8p) (11.1p) (32.3p)
-----------------------------------------------------------------------------
All operations are continuing.
CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
for the six months ended 31st December 2004
6 months 6 months Year
ended ended ended
31st December 31st December 30th June
2004 2003 2004
#'000 #'000 #'000
Loss for the period (2,649) (2,501) (7,289)
Unrealised surplus on revaluation
of property 4,154 - 3,464
Currency translation differences
on foreign currency net investments (29) 71 5
-----------------------------------------------------------------------------
Total recognised gains and losses
for the period 1,476 (2,430) (3,820)
-----------------------------------------------------------------------------
All recognised gains and losses are attributable to equity shareholders'
interests.
NOTE OF CONSOLIDATED STATEMENT OF HISTORICAL COST PROFITS AND LOSSES
for the six months ended 31st December 2004
6 months 6 months Year
ended ended ended
31st December 31st December 30th June
2004 2003 2004
#'000 #'000 #'000
Reported loss on ordinary
activities before taxation (2,301) (1,969) (6,192)
Difference between historical cost
of depreciation charge and
depreciation charge based on
revalued amounts 2 7 14
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Historical cost loss on ordinary
activities before taxation (2,299) (1,962) (6,178)
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Historical cost loss retained
after taxation, minority interests
and dividends (2,658) (2,505) (7,298)
-----------------------------------------------------------------------------
RECONCILIATIONS OF MOVEMENTS IN SHAREHOLDERS' FUNDS
for the six months ended 31st December 2004
6 months 6 months Year
ended ended ended
31st December 31st December 30th June
2004 2003 2004
#'000 #'000 #'000
Opening shareholders' funds 44,879 48,699 48,699
Loss for the financial period (2,649) (2,501) (7,289)
Undeclared non-equity preference
dividends (11) (11) (23)
Net revaluation surplus on fixed
assets 4,154 - 3,464
Currency translation differences
on foreign currency net
investments (29) 71 5
Unpaid non-equity preference
dividends 11 11 23
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Closing shareholders' funds 46,355 46,269 44,879
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CONSOLIDATED BALANCE SHEET
at 31st December 2004
31st December 1st December 30th June
2004 2003 2004
Notes #'000 #'000 #'000
----------------------------------------------------------------------------------
Fixed assets
Intangible asset 18,200 18,200 18,200
Tangible assets 6 84,794 78,304 81,103
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102,994 96,504 99,303
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Current assets
Stocks 7,839 5,820 6,343
Debtors:
amounts falling due after more
than one year 745 1,007 5,869
amounts falling due within one year 6,107 6,473 878
Cash 5,887 4,901 4,490
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20,578 18,201 17,580
Creditors: amounts falling due
within one year (15,636) (15,180) (14,534)
----------------------------------------------------------------------------------
Net current assets 4,942 3,021 3,046
----------------------------------------------------------------------------------
Total assets less current
liabilities 107,936 99,525 102,349
Creditors: amounts falling due
after more than one year (59,291) (50,933) (55,009)
----------------------------------------------------------------------------------
Net assets 48,645 48,592 47,340
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Capital and reserves
Called up share capital 6,036 6,036 6,036
Merger reserve 7 61,503 61,503 61,503
Revaluation reserve 7 16,489 8,880 12,337
Profit and loss account 7 (37,673) (30,150) (34,997)
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Total shareholders' funds 46,355 46,269 44,879
Analysed as:
Equity shareholders' funds 45,867 45,804 44,402
Non-equity shareholders' funds 488 465 477
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Equity minority interests 1,712 1,745 1,883
Non-equity minority interests 578 578 578
----------------------------------------------------------------------------------
48,645 48,592 47,340
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CONSOLIDATED CASH FLOW STATEMENT
for the six months ended 31st December 2004
6 months 6 months Year
ended ended ended
31st December 31st December 30th June
Notes 2004 2003 2004
-----------------------------------------------------------------------------
#'000 #'000 #'000
Net cash inflow from
operating activities 8 391 2,856 520
Returns on investments and
servicing of finance 9 (1,763) (1,359) (2,640)
Tax paid (265) (526) (766)
Capital expenditure (921) (683) (1,148)
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Net cash (outflow)/inflow
before financing and use of
liquid resources (2,558) 288 (4,034)
Management of liquid resources (1,500) (2,200) (500)
Financing 10 4,000 - 4,000
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Decrease in cash during the
period 11 (58) (1,912) (534)
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RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
for the six months ended 31st December 2004
6 months 6 months Year
ended ended ended
31st December 31st December 30th June
Notes 2004 2003 2004
-------------------------------------------------------------------------------------
Decrease in cash during the
period 11 (58) (1,912) (534)
Increase in liquid resources 11 1,500 2,200 500
Increase in loans during the
period (4,000) - (4,000)
-------------------------------------------------------------------------------------
(Decrease)/increase in net debt
during the period (2,558) 288 (4,034)
Foreign currency translation 11 (45) 100 11
-------------------------------------------------------------------------------------
Movement in net debt during the
period (2,603) 388 (4,023)
Opening net debt 11 (47,510) (43,487) (43,487)
-------------------------------------------------------------------------------------
Closing net debt 11 (50,113) (43,099) (47,510)
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NOTES TO THE ACCOUNTS
1. ACCOUNTING POLICIES
The interim accounts of the Group for the six months ended 31st December 2004
incorporate the results of the Company, Retail Stores Plc, and its subsidiary
undertakings for the six months then ended. The results have been prepared on
the basis of the accounting policies adopted in the accounts of the Group for
the year ended 30th June 2004, consistently applied in all material respects.
2. DIVISIONAL ANALYSIS
Turnover represents the amounts charged to third party customers for goods and
services, less returns, and excluding value added tax. Sales by concession
departments are included in turnover on a commission only basis.
6 months 6 months Year
ended ended ended
31st December 31st December 30th June
Turnover 2004 2003 2004
#'000 #'000 #'000
By class of business:
Retail 17,285 15,270 27,139
Wholesale 6,410 5,882 12,388
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23,695 21,152 39,527
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By geographical origin:
United Kingdom 21,517 18,753 33,940
Japan 2,178 2,399 5,587
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23,695 21,152 39,527
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By geographical destination:
United Kingdom 17,948 16,082 28,571
Japan 2,193 2,401 5,585
Other 3,554 2,669 5,371
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23,695 21,152 39,527
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By category:
Gross turnover 26,674 24,409 45,213
Less concession departments
turnover net of commission (2,979) (3,257) (5,686)
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Net turnover 23,695 21,152 39,527
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6 months 6 months Year
Operating loss on ended ended ended
ordinary activities 31st December 31st December 30th June
before interest and taxation 2004 2003 2004
#'000 #'000 #'000
By class of business:
Retail (1,902) (1,713) (5,651)
Wholesale 1,352 959 2,065
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(550) (754) (3,586)
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By geographical origin:
United Kingdom (920) (1,308) (4,774)
Japan 370 554 1,188
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(550) (754) (3,586)
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The segmental analysis of operations reflects the structure of the Group. Retail
includes the UK retail operations at Regent Street and Heathrow. Wholesale
includes the results of the UK and Japanese fabric businesses.
The Retail loss on ordinary activities before interest and taxation includes net
rental income from properties and is after deducting exceptional operating
charges.
3. EXCEPTIONAL OPERATING CHARGES
During the year ended 30th June 2004 the Group completed a major restructuring
of its management and business operations. The statutory accounts for that year
included exceptional operating charges relating to redundancy, recruitment and
closure costs of #367,000. These costs are not expected to re-occur.
4. DIVIDENDS
6 months 6 months Year
ended ended ended
31st December 31st December 30th June
2004 2003 2004
#'000 #'000 #'000
Undeclared non-equity preference
dividends 11 11 23
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Due to a deficiency of distributable reserves, the preference shares are
currently in arrears of dividend of 41/2 years. Payment of #103,950 will be made
when this deficiency has been made good from future profits.
5. LOSS PER SHARE
The basic and diluted loss per share figures are calculated by dividing the loss
after taxation and minority interests by the weighted average number of ordinary
shares in issue during the period and in the comparative periods of 22,602,808.
6 months 6 months Year
ended ended ended
31st December 31st December 30th June
2004 2003 2004
#'000 #'000 #'000
Retained loss for the period
Loss for the financial period (2,660) (2,512) (7,312)
Exceptional operating charges - - 367
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Loss for the financial period
before exceptional operating
charges (2,660) (2,512) (6,945)
------------------------------------------------------------------------------
Basic and diluted loss per share pence pence pence
Loss for the financial period (11.8p) (11.1p) (32.3p)
Exceptional operating charges - - 1.6p
------------------------------------------------------------------------------
Loss for the financial period
before exceptional operating
charges (11.8p) (11.1p) (30.7p)
------------------------------------------------------------------------------
As the exercise price of share options is equal to the average share price for
the period there is no difference between the basic loss per share and the
diluted loss per share.
6. TANGIBLE FIXED ASSETS
Short Fixtures &
Freehold leasehold equipment Total
#'000 #'000 #'000 #'000
Cost or valuation
At 1st July 2004 35,550 42,623 7,597 85,770
Additions 15 - 885 900
Revaluation 941 2,513 - 3,454
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At 31st December 2004 36,506 45,136 8,482 90,124
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Depreciation
At 1st July 2004 - (125) (4,542) (4,667)
Charge for the period (356) (433) (574) (1,363)
Revaluation 356 344 - 700
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At 31st December 2004 - (214) (5,116) (5,330)
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Net book value
at 31st December 2004 36,506 44,922 3,366 84,794
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Net book value
at 31st December 2003 36,409 38,884 3,011 78,304
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Net book value
at 30th June 2004 35,550 42,498 3,055 81,103
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During the year ended 30th June 2004, long leasehold property interests of #40m
and accumulated depreciation of #0.6m were reclassified to short leasehold to
reflect the Group's accounting policy. The comparatives for 31st December 2003
have been restated accordingly.
7. MOVEMENT ON RESERVES
Profit
Merger Revaluation and loss
reserve reserve account
#'000 #'000 #'000
Group
At 1st July 2004 61,503 12,337 (34,997)
Loss retained for the period - - (2,660)
Surplus arising on revaluation of properties - 4,154 -
Transfer of depreciation on revaluation of
fixed assets - (2) 2
Currency translation differences on foreign
currency net investments - - (29)
Unpaid non-equity preference dividends - - 11
------------------------------------------------------------------------------
At 31st December 2004 61,503 16,489 (37,673)
------------------------------------------------------------------------------
All reserves of the Group are attributable to equity shareholders' interests.
8. RECONCILIATION OF OPERATING LOSS TO NET CASH INFLOW FROM OPERATING ACTIVITIES
6 months 6 months Year
ended ended ended
31st December 31st December 30th June
2004 2003 2004
#'000 #'000 #'000
Operating loss (550) (754) (3,586)
Depreciation 1,363 1,187 2,317
Increase in stock (1,503) (259) (804)
(Increase)/decrease in debtors (95) (391) 281
Increase in creditors 1,176 3,073 2,312
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Net cash inflow from operating
activities 391 2,856 520
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9. RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
6 months 6 months Year
ended ended ended
31st December 31st December 30th June
2004 2003 2004
#'000 #'000 #'000
Equity dividend paid to
minorities (247) (236) (224)
Non-equity dividend paid to
minorities (27) - (82)
Interest paid (1,525) (1,163) (2,408)
Interest received 36 40 74
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Returns on investments and
servicing of finance (1,763) (1,359) (2,640)
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10. FINANCING
6 months 6 months Year
ended ended ended
31st December 31st December 30th June
2004 2003 2004
#'000 #'000 #'000
Loans drawn down 4,000 - 4,000
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Financing 4,000 - 4,000
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11. ANALYSIS OF NET DEBT
Movement Foreign
during currency 30th June
31st December period translation 2004
2004
#'000 #'000 #'000 #'000
Available cash 3,887 (58) (45) 3,990
Short term investments 2,000 1,500 - 500
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Cash at bank and in hand 5,887 1,442 (45) 4,490
Ultimate holding company
loan due after more
than one year (6,000) (4,000) - (2,000)
Bank loan due after more
than one year (50,000) - - (50,000)
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Net debt (50,113) (2,558) (45) (47,510)
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12. FINANCIAL INFORMATION
The financial information set out in these interim accounts of the Group for the
six months ended 31st December 2004 includes information for the year ended 30th
June 2004. This information does not constitute the Company's statutory accounts
for the year ended 30th June 2004 but is derived from those accounts. Statutory
accounts for the year ended 30th June 2004 have been delivered to the Registrar
of Companies. The auditors have reported on those accounts; their report was
unqualified and did not contain statements under section 237(2) or (3) of the
Companies Act 1985.
13. ACCOUNTS AND INTERIM ANNOUNCEMENT
A copy of the above document has been submitted to the UK Listing Authority, and
will be available for inspection at the UK Listing Authority's Document Viewing
Facility, which is situated at The Financial Services Authority, 25 The North
Colonnade, Canary Wharf, London E14 5HS, telephone number 020 7676 1000.
The interim accounts of the Company are expected to be sent to shareholders at
the end of March 2005. The audited accounts of Retail Stores Plc for the year
ended 30th June 2004 and further copies of these interim accounts are available
from the Company Secretary, Filex Services Limited, 179 Great Portland Street,
London W1W 5LS.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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