TIDMWGB
RNS Number : 3557A
Walker Greenbank PLC
07 October 2009
?
A briefing for analysts will be held at 10am this morning, 7 October 2009, at
the offices of Buchanan Communications,
45 Moorfields, London EC2Y 9AE.
+------------------------------------------+------------------------------------------+
| For immediate release | 7 October 2009 |
+------------------------------------------+------------------------------------------+
WALKER GREENBANK PLC
("Walker Greenbank" or "the Company")
Interim Results for the six months ended 31 July 2009
Walker Greenbank plc (AIM: WGB), the luxury interior furnishings group whose
brands include Sanderson, Morris & Co., Harlequin and Zoffany, is pleased to
announce its interim results for the six month period ended 31 July 2009.
Highlights
* Total revenues of GBP29.14 million (2008: GBP33.01million), a gradually
improving sales trend since the end of March 2009 has continued into the second
half
* Mid-market brands Harlequin, Sanderson and Morris & Co performed relatively well
whereas premium brand Zoffany was affected by customers' trading down or
deferring spending
* Wallpaper and fabric printing returned to profitability in the second quarter
following a restructuring programme
* Profit before tax of GBP0.57 million (2008: GBP1.72 million) and earnings per
share of 0.77p (2008: 1.70p)
* Cash generation allowed net debt to be reduced by 28% to GBP6.73 million (2008:
GBP9.30 million) and interest cover to improve to 7.0 times (2008: 5.6 times)
Terry Stannard, the Chairman of Walker Greenbank, said: "Whilst trading
conditions remain uncertain, we have addressed our cost base, sustained the
profitability of the Group and kept tight control of cash. We have a strong
balance sheet and are well positioned to take advantage of an upturn in our
marketplace.
"We have seen a gradually reducing shortfall in brand revenues each month since
the end of March and a return to profitability in our manufacturing in the
second quarter. This has continued into the opening weeks of the second half
and, whilst we are cautious about the stability of the marketplace, we remain
comfortable that we will meet market expectations."
For further information:
+------------------------------------------------+----------------------------------+
| Walker Greenbank PLC | 0844 543 4667 |
+------------------------------------------------+----------------------------------+
| John Sach, Chief Executive | |
+------------------------------------------------+----------------------------------+
| Alan Dix, Finance Director | |
+------------------------------------------------+----------------------------------+
| Julian Wilson, Company Secretary | |
+------------------------------------------------+----------------------------------+
| | |
+------------------------------------------------+----------------------------------+
| Arden Partners plc | 020 7398 1600 |
+------------------------------------------------+----------------------------------+
| Chris Hardie/Adrian Trimmings | |
+------------------------------------------------+----------------------------------+
| | |
+------------------------------------------------+----------------------------------+
| Buchanan Communications | 020 7466 5000 |
+------------------------------------------------+----------------------------------+
| Mark Court/Suzanne Brocks/Miranda Higham | |
+------------------------------------------------+----------------------------------+
CHAIRMAN'S STATEMENT
Overview
As anticipated at the year end, market conditions in the first half have been
particularly challenging and consequently revenues are significantly down on the
prior half year. However we are encouraged by a gradually improving sales trend
in our brands during the six month period. Our continued commitment to design
excellence and our broad range of brands has seen us stem the rate of revenue
decline progressively since the end of March.
Total revenues declined 12% against the same period last year, a time during
which trading was particularly strong.
External Worldwide brand revenues declined 10%, whilst third party manufacturing
suffered a more severe decline of 18% due to difficult market conditions and
customer de-stocking. Within the luxury interior furnishings market, our range
of mid market brands, Harlequin, Sanderson and Morris & Co, have performed more
strongly than our premium-end brand Zoffany.
The largest market for our brands, the UK, experienced an 8% revenue decline,
whereas the US and Europe were down 31% and 20% respectively in local currency.
During the period we have taken firm action to reduce costs to mitigate the
sales decline and to sustain the profitability of the Group. In addition we
continued to strengthen our balance sheet, reducing net debt to GBP6,727,000
from GBP9,302,000 a year ago.
Financials
Revenue decreased 12% to GBP29,139,000 from GBP33,007,000 over the same period
last year. The operating profit for the half
year, before exceptional redundancy costs of GBP246,000 and exceptional
insurance recovery of GBP210,000, decreased 51% to GBP1,049,000 (2008:
GBP2,141,000). Net finance costs on borrowings reduced to GBP145,000 (2008:
GBP385,000) due to reduced levels of borrowings and lower interest rates. Net
defined benefit pension charge increased to GBP300,000 (2008: GBP34,000) due to
higher discount rates on liabilities and lower investment returns on scheme
assets both based on actuarial estimates at the start of the year. The profit
before tax decreased 67% to GBP568,000 (2008: GBP1,722,000). Profit after tax
fell to GBP422,000 (2008: GBP936,000).
Interest cover (excluding net defined benefit pension charge) increased to 7.0
times compared with 5.6 times for the first half of 2008.
The earnings per share were 0.77p (2008: 1.70p).
The Group's net indebtedness at the period end was GBP6,727,000 (2008:
GBP9,302,000). This represents a reduction in gearing to 31% (2008: 43%).
Despite the reduced profit from operations of GBP1,013,000 (2008: GBP2,141,000)
the cash inflow from operating activities in the six month period was GBP117,000
(2008: cash outflow GBP1,081,000) reflecting tight working capital control and
reduced interest charges.
Dividend
At the interim stage, the Board does not recommend the payment of a dividend. We
will continue to review our dividend policy with the objective of paying a
dividend at the earliest appropriate opportunity.
People
On behalf of the Board, I would like to offer thanks to all our employees for
their enthusiasm, commitment and loyalty in a challenging environment. We are
very grateful to them for their continued support.
Outlook
Whilst trading conditions remain uncertain, we have addressed our cost base,
sustained the profitability of the Group and kept tight control of cash. We have
a strong balance sheet and are well positioned to take advantage of an upturn in
our market place.
We have seen a gradually reducing shortfall in brand revenues each month since
the end of March and a return to profitability in our manufacturing in the
second quarter. This has continued into the opening weeks of the second half and
whilst we are cautious about the stability of the marketplace we remain
comfortable that we will meet market expectations.
Terry Stannard
Non-Executive Chairman
6 October 2009
CHIEF EXECUTIVE'S REVIEW
Overview
Walker Greenbank has maintained carefully measured levels of product investment
in the first half of this year in its four luxury interior furnishings brands -
Harlequin, Zoffany, Sanderson and Morris & Co. - with tight control over
discretionary expenditure. This combined with the considerable investment made
in previous years has enabled the Group to maintain its focus on design and
product excellence and customer service despite extraordinarily tough market
conditions.
Our Brand segment revenues declined 11% and our Overseas segment revenues
declined 10% benefiting from the weakness of sterling in the first half. Brand
revenues in the UK retail market declined 8%, this being our most important
market, accounting for 41% of overall Group revenues. Much tougher conditions
were experienced at the upper end of our marketplace, with our mid-market brands
Harlequin and Sanderson performing relatively well. In mainland Europe, retail
revenues were down 7%, equating to a 20% decline in constant currency. Our US
retail business, whilst still a small part of overall Group revenues, proved to
be the most demanding business unit with revenues down 11%, equating to 31% in
constant currency. The Rest of the World revenues were down 16%. We have
continued to invest in the strategic development of our Contract business
although market conditions have led to an 8% decline in revenues. We continue to
develop the licensing opportunities that exist for our brands, with licensing
revenues being broadly maintained in the first half.
Our Manufacturing segment revenues declined 18%, suffering from significantly
reduced volumes and customer de-stocking, particularly in the first quarter. A
reduction in the cost base to align the manufacturing to these reduced volumes
returned our manufacturing businesses to profitability in the second quarter.
The Brands
Walker Greenbank has a strong portfolio of brands covering a wide variety of
market segments in the mid to upper end of the premium interior furnishings
market. The brands segment performed relatively well in the current trading
environment, with revenues down by 11% over the same period last year. We
embarked on a cost reduction exercise in the final quarter of last year and the
early part of the current year in response to these market conditions. This,
combined with improved margins, has helped reduce the impact of the revenue
decline, leading to a 26% fall in operating profits after exceptional items over
the same period last year.
Harlequin's continued focus on design excellence and new product launches has
underpinned its position as the leading mid-market contemporary brand in the
UK. Pleasingly "Arkona", a contemporary range of wallpapers, prints and woven
fabrics and part of last year's autumn launch has become the best selling
Harlequin collection in the past five years despite the current market place.
Overall revenues fell 10% over the same period last year but the fall has been
steadily reducing since the end of March. As the contract market becomes more
cost conscious in the current trading environment, Harlequin has seen its
contract revenues grow 15% on the same period last year. The UK has performed
slightly better than export markets with revenues down 8% compared with 11% for
export. Within export, Europe is down 21% in constant currency, with the
important markets of Ireland and Spain being hardest hit. Revenues within the
Rest of the World were only down 1%, with solid progress being made in the
Middle East. More than half of Harlequin revenues are from woven product, which
is sourced primarily from Europe and consequently the gross margins have
declined slightly due to the strengthening of the Euro.
Zoffany, which is positioned at the upper end of the premium market, has seen
revenues fall 21% as customers appear to be trading down or deferring
investment. The fall has been across all markets, with the UK down 19%. Zoffany
has been particularly hard hit in its export markets where the decline in its
most important market of Southern Ireland contributed significantly to a 26%
fall in constant currency in Europe. It has also suffered from a significant
decline in its contract business and a fall in constant currency of 33% in the
USA and 43% in the Rest of World.
Arthur Sanderson & Sons incorporating the Morris & Co brand has continued its
strong investment in product. The successful spring launch of "Options 10", its
flagship triennial collection, combined with the unrivalled global recognition
of the brand to give Sanderson an overall revenue fall of only 4%, compared with
a particularly strong growth period last year. The fall has been steadily
reducing since the end of April. The UK suffered only a 1% revenue fall with
European revenues increasing by 4% but declining 5% on a constant currency
basis. The US market fell 24% on a constant currency basis, albeit from a
relatively small base. The Rest of the World experienced a fall in revenues of
10%. Gross margins improved as the strengthening Euro benefited margins, there
being a higher proportion of European sales for these brands compared with
Harlequin and Zoffany.
Overseas
The US market has been extremely challenging with revenues in the US business
falling 11%, equating to 31% in constant
currency. The US still forms an important part of the Group's medium to long
term growth strategy but currently represents only 14% of overall Group
revenues. Investment in marketing, patterning and sample support has been
reduced to reflect the market conditions. The reduced investment and the impact
of improved margins due to the strength of the dollar have led to a small profit
in the first half.
The Group's distribution businesses in Rome, for Zoffany and Harlequin, and in
Paris, for Zoffany and Sanderson, remain relatively small. The French business
remained robust with revenue growing by 6% but the Italian business suffered a
decline of 14%. Overall the European businesses have remained profitable.
Manufacturing
Manufacturing experienced extremely tough market conditions, with third party
revenues falling 18% on the same period last year. This was reflected with a
similar reduction in revenues within the Group's brands. The most significant
decline was for export customers where the decline was 47%, with US customers
reducing stock levels and new product launches more significantly than others.
To mitigate the lower volumes, headcount was reduced through a redundancy
programme, predominantly in the first quarter. This, combined with a slight
easing in market conditions, helped return manufacturing to profitability in the
second quarter.
Anstey, our wallpaper printing factory, experienced de-stocking by its customers
and reduced levels of new product launches. Overall revenues fell by 23% with
external revenues falling 27% and revenues from the Group's brands down 20%. The
most significant decline suffered was in export markets where revenues fell
56%, representing 10% of total revenues. These revenue declines led to an
overall breakeven result in the first half with Anstey returning to
profitability in the second quarter.
Standfast, our fabric printing factory, continued to experience extremely
challenging market conditions in the first half of the current year. Overall
revenues were down 13% over the same period last year, with an 11% fall in third
party revenues and a 15% fall in Group revenues. This reduced activity placed
further pressure on factory throughput and operating margins leading to a small
overall loss in the first half. However, a further reduction in headcount
through a redundancy programme in the first quarter, combined with Standfast's
main competitor going into administration and emerging in a significantly
reduced form, helped to turn a significant first quarter loss into a second
quarter profit.
Eliminations and Unallocated (including central costs)
The Group hedges dollar revenues from its overseas distribution business. The
average rate of these contracts during the first half of the year compared with
spot rates led to an exchange loss. However, tight cost control has reduced
central costs to GBP1,142,000 (2008: GBP1,502,000).
Summary
We remain committed to our strategy which continues to be underpinned by five
key elements: organic growth within the UK, geographic expansion, contract sales
growth, development of further licensing arrangements and a willingness to
evaluate acquisition opportunities. We remain focused on cash generation and
building the strength of our balance sheet. Whilst the market place makes
current growth difficult we remain confident about the progress the Group will
make in the medium term given the global recognition of its brands and the
robustness of the Group's finances.
John Sach
Group Chief Executive
6 October 2009
Walker Greenbank plc
Unaudited Consolidated Income Statement
For the six months ended 31 July 2009
+----------------------------------+------+---------+---------+---------+---------+---------+
| |Note | | | 6 | 6 | 12 |
| | | | | months | months | months |
| | | | | to 31 | to 31 | to 31 |
| | | | | July | July | Jan |
| | | | | 2009 | 2008 | 2009 |
| | | | | GBP000 | GBP000 | GBP000 |
+----------------------------------+------+---------+---------+---------+---------+---------+
| Revenue | 2 | | | 29,139 | 33,007 | 63,698 |
+----------------------------------+------+---------+---------+---------+---------+---------+
| | | | | | | |
+----------------------------------+------+---------+---------+---------+---------+---------+
| Profit from operations before | | | | 1,049 | 2,141 | 3,857 |
| exceptional items | | | | | | |
+----------------------------------+------+---------+---------+---------+---------+---------+
| Exceptional items: | | | | | | |
+----------------------------------+------+---------+---------+---------+---------+---------+
| - redundancy expenses | 4 | | | (246) | - | (146) |
+----------------------------------+------+---------+---------+---------+---------+---------+
| - net proceeds from insurance | 4 | | | 210 | - | (150) |
| recovery / (costs from insurance | | | | | | |
| event) | | | | | | |
+----------------------------------+------+---------+---------+---------+---------+---------+
| Profit from operations | 3 | | | 1,013 | 2,141 | 3,561 |
| | | | | | | |
+----------------------------------+------+---------+---------+---------+---------+---------+
| | | | | | | |
+----------------------------------+------+---------+---------+---------+---------+---------+
| Net defined benefit pension | 5 | | | (300) | (34) | (79) |
| charge | | | | (133) | (373) | (669) |
| Net borrowing costs | | | | (12) | (12) | (26) |
| Amortisation of issue costs | | | | | | |
+----------------------------------+------+---------+---------+---------+---------+---------+
| Net finance costs | | | | (445) | (419) | (774) |
+----------------------------------+------+---------+---------+---------+---------+---------+
| | | | | | | |
+----------------------------------+------+---------+---------+---------+---------+---------+
| Profit before taxation | | | | 568 | 1,722 | 2,787 |
+----------------------------------+------+---------+---------+---------+---------+---------+
| | | | | | | |
+----------------------------------+------+---------+---------+---------+---------+---------+
| Current tax | | | | (6) | (11) | (57) |
+----------------------------------+------+---------+---------+---------+---------+---------+
| Deferred tax - exceptional | | | | - | (320) | (320) |
+----------------------------------+------+---------+---------+---------+---------+---------+
| Deferred tax - other | | | | (140) | (455) | (788) |
+----------------------------------+------+---------+---------+---------+---------+---------+
| Total tax (charge)/credit | 6 | | | (146) | (786) | (1,165) |
+----------------------------------+------+---------+---------+---------+---------+---------+
| | | | | | | |
+----------------------------------+------+---------+---------+---------+---------+---------+
| Profit for the period | | | | 422 | 936 | 1,622 |
+----------------------------------+------+---------+---------+---------+---------+---------+
| | | | | | | |
+----------------------------------+------+---------+---------+---------+---------+---------+
| Earnings per share - Total basic | 7 | | | 0.77p | 1.70p | 2.96p |
| and diluted | | | | | | |
+----------------------------------+------+---------+---------+---------+---------+---------+
| | | | | | | |
+----------------------------------+------+---------+---------+---------+---------+---------+
Unaudited Consolidated Statement of Comprehensive Income
For the six months ended 31 July 2009
+--------------------------------------------+--------+-----------+-----------+-----------+
| | | 6 months | 6 months | Year to |
| | | to | to | 31 Jan |
| | | 31 July | 31 July | 2009 |
| | | 2009 | 2008 | GBP000 |
| | | GBP000 | GBP000 | |
+--------------------------------------------+--------+-----------+-----------+-----------+
| Profit for the period | | 422 | 936 | 1,622 |
+--------------------------------------------+--------+-----------+-----------+-----------+
| Other Comprehensive Income: | | | | |
+--------------------------------------------+--------+-----------+-----------+-----------+
| Actuarial losses on scheme assets | | - | - | (7,458) |
+--------------------------------------------+--------+-----------+-----------+-----------+
| Other actuarial gains on scheme | | - | - | 5,458 |
| liabilities | | | | |
+--------------------------------------------+--------+-----------+-----------+-----------+
| Currency translation differences | | 192 | 30 | (350) |
+--------------------------------------------+--------+-----------+-----------+-----------+
| Cash flow hedges | | 905 | 65 | (702) |
+--------------------------------------------+--------+-----------+-----------+-----------+
| Recognition/(reduction) of deferred tax | | - | (175) | 211 |
| asset relating to pension scheme liability | | | | |
+--------------------------------------------+--------+-----------+-----------+-----------+
| Other comprehensive income for the period, | | 1,097 | (80) | (2,841) |
| net of tax | | | | |
+--------------------------------------------+--------+-----------+-----------+-----------+
| | | | | |
+--------------------------------------------+--------+-----------+-----------+-----------+
| Total comprehensive income for the period | | 1,519 | 856 | (1,219) |
| attributable to the owners of the parent | | | | |
+--------------------------------------------+--------+-----------+-----------+-----------+
Unaudited Consolidated Balance Sheet
As at 31 July 2009
+-------------------------------------+--------+------------+------------+------------+
| | Note | As at | As at | As at |
| | | 31 July | 31 July | 31 Jan |
| | | 2009 | 2008 | 2009 |
| | | GBP000 | GBP000 | GBP000 |
+-------------------------------------+--------+------------+------------+------------+
| Non-current assets | | | | |
+-------------------------------------+--------+------------+------------+------------+
| Intangible assets | | 5,821 | 5,778 | 5,877 |
+-------------------------------------+--------+------------+------------+------------+
| Property, plant & equipment | | 8,382 | 8,921 | 8,734 |
+-------------------------------------+--------+------------+------------+------------+
| Deferred income tax assets | | 5,018 | 5,105 | 5,158 |
+-------------------------------------+--------+------------+------------+------------+
| Trade and other receivables | | 6 | 17 | 12 |
+-------------------------------------+--------+------------+------------+------------+
| | | 19,227 | 19,821 | 19,781 |
+-------------------------------------+--------+------------+------------+------------+
| | | | | |
+-------------------------------------+--------+------------+------------+------------+
| Current assets | | | | |
+-------------------------------------+--------+------------+------------+------------+
| Inventories | | 13,180 | 13,910 | 13,887 |
+-------------------------------------+--------+------------+------------+------------+
| Trade and other receivables | | 11,893 | 13,908 | 12,552 |
+-------------------------------------+--------+------------+------------+------------+
| Cash and cash equivalents | | 2,039 | 3,203 | 1,050 |
+-------------------------------------+--------+------------+------------+------------+
| Derivative financial instruments | | 93 | - | - |
+-------------------------------------+--------+------------+------------+------------+
| | | 27,205 | 31,021 | 27,489 |
+-------------------------------------+--------+------------+------------+------------+
| | | | | |
+-------------------------------------+--------+------------+------------+------------+
| Total assets | | 46,432 | 50,842 | 47,270 |
+-------------------------------------+--------+------------+------------+------------+
| | | | | |
+-------------------------------------+--------+------------+------------+------------+
| Current liabilities | | | | |
+-------------------------------------+--------+------------+------------+------------+
| Borrowings | 8 | (5,966) | (400) | (400) |
+-------------------------------------+--------+------------+------------+------------+
| Trade and other payables | | (12,426) | (13,730) | (15,118) |
+-------------------------------------+--------+------------+------------+------------+
| Derivative financial instruments | | - | (45) | (812) |
+-------------------------------------+--------+------------+------------+------------+
| | | (18,392) | (14,175) | (16,330) |
+-------------------------------------+--------+------------+------------+------------+
| | | | | |
+-------------------------------------+--------+------------+------------+------------+
| Net current assets | | 8,813 | 16,846 | 11,159 |
+-------------------------------------+--------+------------+------------+------------+
| | | | | |
+-------------------------------------+--------+------------+------------+------------+
| Non-current liabilities | | | | |
+-------------------------------------+--------+------------+------------+------------+
| Borrowings | 8 | (2,800) | (12,105) | (6,868) |
+-------------------------------------+--------+------------+------------+------------+
| Retirement benefit obligation | 10 | (3,810) | (2,783) | (4,161) |
+-------------------------------------+--------+------------+------------+------------+
| | | (6,610) | (14,888) | (11,029) |
+-------------------------------------+--------+------------+------------+------------+
| | | | | |
+-------------------------------------+--------+------------+------------+------------+
| Total liabilities | | (25,002) | (29,063) | (27,359) |
+-------------------------------------+--------+------------+------------+------------+
| | | | | |
+-------------------------------------+--------+------------+------------+------------+
| Net assets | | 21,430 | 21,779 | 19,911 |
+-------------------------------------+--------+------------+------------+------------+
| | | | | |
+-------------------------------------+--------+------------+------------+------------+
| | | | | |
+-------------------------------------+--------+------------+------------+------------+
| Equity | | | | |
+-------------------------------------+--------+------------+------------+------------+
| Share capital | | 590 | 590 | 590 |
+-------------------------------------+--------+------------+------------+------------+
| Share premium account | | 457 | 457 | 457 |
+-------------------------------------+--------+------------+------------+------------+
| Foreign currency translation | | (144) | 40 | (340) |
| reserve | | | | |
+-------------------------------------+--------+------------+------------+------------+
| Accumulated losses | | (20,073) | (19,770) | (20,491) |
+-------------------------------------+--------+------------+------------+------------+
| Other reserves | | 40,600 | 40,462 | 39,695 |
+-------------------------------------+--------+------------+------------+------------+
| Total equity | | 21,430 | 21,779 | 19,911 |
+-------------------------------------+--------+------------+------------+------------+
Unaudited Consolidated Cash Flow Statement
For the six months ended 31 July 2009
+---------------------------------------------+------+----------+----------+----------+
| | Note | 6 months | 6 months | Year to |
| | | to | to | 31 Jan |
| | | 31 July | 31 July | 2009 |
| | | 2009 | 2008 | GBP000 |
| | | GBP000 | GBP000 | |
+---------------------------------------------+------+----------+----------+----------+
| Cash flows from operating activities | | | | |
+---------------------------------------------+------+----------+----------+----------+
| Cash generated/(utilised) from operations | 9 | 276 | (691) | 3,536 |
+---------------------------------------------+------+----------+----------+----------+
| Interest paid | | (153) | (407) | (704) |
+---------------------------------------------+------+----------+----------+----------+
| Interest received | | - | 28 | 35 |
+---------------------------------------------+------+----------+----------+----------+
| Income tax paid | | (6) | (11) | (37) |
+---------------------------------------------+------+----------+----------+----------+
| | | 117 | (1,081) | 2,830 |
+---------------------------------------------+------+----------+----------+----------+
| | | | | |
+---------------------------------------------+------+----------+----------+----------+
| Cash flows from investing activities | | | | |
+---------------------------------------------+------+----------+----------+----------+
| Purchase of intangible fixed assets | | (161) | (210) | (420) |
+---------------------------------------------+------+----------+----------+----------+
| Purchase of property, plant & equipment | | (459) | (647) | (1,267) |
+---------------------------------------------+------+----------+----------+----------+
| Proceeds on sale of property, plant and | | - | - | 7 |
| equipment | | | | |
+---------------------------------------------+------+----------+----------+----------+
| | | (620) | (857) | (1,680) |
+---------------------------------------------+------+----------+----------+----------+
| | | | | |
+---------------------------------------------+------+----------+----------+----------+
| Cash flows from financing activities | | | | |
+---------------------------------------------+------+----------+----------+----------+
| Purchase of treasury shares | | - | (83) | (83) |
+---------------------------------------------+------+----------+----------+----------+
| Net drawdown/ (repayment) of borrowings | | 1,498 | 3,199 | (2,064) |
+---------------------------------------------+------+----------+----------+----------+
| | | 1,498 | 3,116 | (2,147) |
+---------------------------------------------+------+----------+----------+----------+
| | | | | |
+---------------------------------------------+------+----------+----------+----------+
| Net increase/ (decrease) in cash, cash | | 995 | 1,178 | (997) |
| equivalents and bank overdrafts | | | | |
+---------------------------------------------+------+----------+----------+----------+
| | | | | |
+---------------------------------------------+------+----------+----------+----------+
| Cash, cash equivalents and bank overdrafts | | 1,050 | 2,017 | 2,017 |
| at beginning of period | | | | |
+---------------------------------------------+------+----------+----------+----------+
| Exchange (losses)/gains on cash and bank | | (6) | 8 | 30 |
| overdrafts | | | | |
+---------------------------------------------+------+----------+----------+----------+
| | | | | |
+---------------------------------------------+------+----------+----------+----------+
| Cash, cash equivalents and bank overdrafts | | 2,039 | 3,203 | 1,050 |
| at the end of the period | | | | |
+---------------------------------------------+------+----------+----------+----------+
Unaudited Consolidated Statement of Changes in Equity
+--------------------+---------+---------+-------------+---------+---------+---------+-------------+--------+
| | | | | Other reserves | | |
+--------------------+---------+---------+-------------+-----------------------------+-------------+--------+
| | Share | Share | Accumulated | Capital | Merger | Hedge | Translation | Total |
| | capital | premium | losses | reserve | reserve | Reserve | reserve | GBP000 |
| | GBP000 | account | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | |
| | | GBP000 | | | | | | |
+--------------------+---------+---------+-------------+---------+---------+---------+-------------+--------+
| Balance at 1 | 590 | 457 | (20,491) | 43,457 | (2,950) | (812) | (340) | 19,911 |
| February 2009 | | | | | | | | |
+--------------------+---------+---------+-------------+---------+---------+---------+-------------+--------+
| Profit for the | - | - | 422 | - | - | - | - | 422 |
| period | | | | | | | | |
+--------------------+---------+---------+-------------+---------+---------+---------+-------------+--------+
| Other | | | | | | | | |
| comprehensive | | | | | | | | |
| Income: | | | | | | | | |
+--------------------+---------+---------+-------------+---------+---------+---------+-------------+--------+
| Currency | - | - | - | - | - | - | 196 | 196 |
| translation | | | | | | | | |
| differences | | | | | | | | |
+--------------------+---------+---------+-------------+---------+---------+---------+-------------+--------+
| Cash flow hedging | - | - | - | - | - | 458 | - | 458 |
| reserve - released | | | | | | | | |
| to Income | | | | | | | | |
| Statement | | | | | | | | |
+--------------------+---------+---------+-------------+---------+---------+---------+-------------+--------+
| Cash flow hedging | - | - | - | - | - | 447 | - | 447 |
| reserve - | | | | | | | | |
| recognised in | | | | | | | | |
| equity during the | | | | | | | | |
| period | | | | | | | | |
+--------------------+---------+---------+-------------+---------+---------+---------+-------------+--------+
| Net comprehensive | - | - | 422 | - | - | 905 | 196 | 1,523 |
| Income/(expense) | | | | | | | | |
+--------------------+---------+---------+-------------+---------+---------+---------+-------------+--------+
| Transactions with | | | | | | | | |
| owners: | | | | | | | | |
+--------------------+---------+---------+-------------+---------+---------+---------+-------------+--------+
| Reserve for long | - | - | (4) | - | - | - | - | (4) |
| term incentive | | | | | | | | |
| charge | | | | | | | | |
+--------------------+---------+---------+-------------+---------+---------+---------+-------------+--------+
| Balance at 31 July | 590 | 457 | (20,073) | 43,457 | (2,950) | 93 | (144) | 21,430 |
| 2009 | | | | | | | | |
+--------------------+---------+---------+-------------+---------+---------+---------+-------------+--------+
+--------------------+---------+---------+-------------+---------+---------+---------+-------------+--------+
| | | | | Other reserves | | |
+--------------------+---------+---------+-------------+-----------------------------+-------------+--------+
| | Share | Share | Accumulated | Capital | Merger | Hedge | Translation | Total |
| | capital | premium | losses | reserve | reserve | Reserve | reserve | GBP000 |
| | GBP000 | account | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | |
| | | GBP000 | | | | | | |
+--------------------+---------+---------+-------------+---------+---------+---------+-------------+--------+
| Balance at 1 | 590 | 457 | (20,655) | 43,457 | (2,950) | (110) | 10 | 20,799 |
| February 2008 | | | | | | | | |
+--------------------+---------+---------+-------------+---------+---------+---------+-------------+--------+
| Profit for the | - | - | 936 | - | - | - | - | 936 |
| period | | | | | | | | |
+--------------------+---------+---------+-------------+---------+---------+---------+-------------+--------+
| Other | | | | | | | | |
| comprehensive | | | | | | | | |
| Income: | | | | | | | | |
+--------------------+---------+---------+-------------+---------+---------+---------+-------------+--------+
| Deferred tax | - | - | (175) | - | - | - | - | (175) |
| relating to | | | | | | | | |
| pension scheme | | | | | | | | |
| liability | | | | | | | | |
+--------------------+---------+---------+-------------+---------+---------+---------+-------------+--------+
| Currency | - | - | - | - | - | - | 30 | 30 |
| translation | | | | | | | | |
| differences | | | | | | | | |
+--------------------+---------+---------+-------------+---------+---------+---------+-------------+--------+
| Cash flow hedging | - | - | - | - | - | 52 | - | 52 |
| reserve - released | | | | | | | | |
| to Income | | | | | | | | |
| Statement | | | | | | | | |
+--------------------+---------+---------+-------------+---------+---------+---------+-------------+--------+
| Cash flow hedging | - | - | - | - | - | 13 | - | 13 |
| reserve - | | | | | | | | |
| recognised in | | | | | | | | |
| equity during the | | | | | | | | |
| period | | | | | | | | |
+--------------------+---------+---------+-------------+---------+---------+---------+-------------+--------+
| Net comprehensive | - | - | 761 | - | - | 65 | 30 | 856 |
| Income/(expense) | | | | | | | | |
+--------------------+---------+---------+-------------+---------+---------+---------+-------------+--------+
| Transactions with | | | | | | | | |
| owners: | | | | | | | | |
+--------------------+---------+---------+-------------+---------+---------+---------+-------------+--------+
| Purchase of | - | - | (83) | - | - | - | - | (83) |
| treasury shares | | | | | | | | |
+--------------------+---------+---------+-------------+---------+---------+---------+-------------+--------+
| Reserve for long | - | - | 207 | - | - | - | - | 207 |
| term incentive | | | | | | | | |
| plan | | | | | | | | |
+--------------------+---------+---------+-------------+---------+---------+---------+-------------+--------+
| Balance at 31 July | 590 | 457 | (19,770) | 43,457 | (2,950) | (45) | 40 | 21,779 |
| 2008 | | | | | | | | |
+--------------------+---------+---------+-------------+---------+---------+---------+-------------+--------+
Unaudited Consolidated Statement of Changes in Equity (Continued)
+--------------------+---------+---------+-------------+---------+---------+---------+-------------+---------+
| | | | | Other reserves | | |
+--------------------+---------+---------+-------------+-----------------------------+-------------+---------+
| | Share | Share | Accumulated | Capital | Merger | Hedge | Translation | Total |
| | capital | premium | losses | reserve | reserve | Reserve | reserve | GBP000 |
| | GBP000 | account | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | |
| | | GBP000 | | | | | | |
+--------------------+---------+---------+-------------+---------+---------+---------+-------------+---------+
| Balance at 1 | 590 | 457 | (20,655) | 43,457 | (2,950) | (110) | 10 | 20,799 |
| February 2008 | | | | | | | | |
+--------------------+---------+---------+-------------+---------+---------+---------+-------------+---------+
| Profit for the | - | - | 1,622 | - | - | - | - | 1,622 |
| year | | | | | | | | |
+--------------------+---------+---------+-------------+---------+---------+---------+-------------+---------+
| Other | | | | | | | | |
| comprehensive | | | | | | | | |
| Income: | | | | | | | | |
+--------------------+---------+---------+-------------+---------+---------+---------+-------------+---------+
| Actuarial losses | - | - | (7,458) | - | - | - | - | (7,458) |
| on scheme assets | | | | | | | | |
+--------------------+---------+---------+-------------+---------+---------+---------+-------------+---------+
| Other actuarial | - | - | 5,458 | - | - | - | - | 5,458 |
| gains on scheme | | | | | | | | |
| liabilities | | | | | | | | |
+--------------------+---------+---------+-------------+---------+---------+---------+-------------+---------+
| Deferred tax | - | - | 211 | - | - | - | - | 211 |
| relating to | | | | | | | | |
| pension scheme | | | | | | | | |
| liability | | | | | | | | |
+--------------------+---------+---------+-------------+---------+---------+---------+-------------+---------+
| Currency | - | - | - | - | - | - | (350) | (350) |
| translation | | | | | | | | |
| differences | | | | | | | | |
+--------------------+---------+---------+-------------+---------+---------+---------+-------------+---------+
| Cash flow hedging | - | - | - | - | - | 110 | - | 110 |
| reserve - released | | | | | | | | |
| to income | | | | | | | | |
| statement | | | | | | | | |
+--------------------+---------+---------+-------------+---------+---------+---------+-------------+---------+
| Cash flow hedging | - | - | - | - | - | (812) | - | (812) |
| reserve - | | | | | | | | |
| recognised in | | | | | | | | |
| equity during the | | | | | | | | |
| period | | | | | | | | |
+--------------------+---------+---------+-------------+---------+---------+---------+-------------+---------+
| Net comprehensive | - | - | (167) | - | - | (702) | (350) | (1,219) |
| Income/(expense) | | | | | | | | |
+--------------------+---------+---------+-------------+---------+---------+---------+-------------+---------+
| Transactions with | | | | | | | | |
| owners: | | | | | | | | |
+--------------------+---------+---------+-------------+---------+---------+---------+-------------+---------+
| Reserve for | - | - | 414 | - | - | - | - | 414 |
| long-term | | | | | | | | |
| incentive plan | | | | | | | | |
+--------------------+---------+---------+-------------+---------+---------+---------+-------------+---------+
| Purchase of | - | - | (83) | - | - | - | - | (83) |
| treasury shares | | | | | | | | |
+--------------------+---------+---------+-------------+---------+---------+---------+-------------+---------+
| Balance at 31 | 590 | 457 | (20,491) | 43,457 | (2,950) | (812) | (340) | 19,911 |
| January 2009 | | | | | | | | |
+--------------------+---------+---------+-------------+---------+---------+---------+-------------+---------+
Unaudited Notes to the Accounts
+---+-------------------------------------------------------------------------------+
|1 | Basis of preparation of interim statements |
+---+-------------------------------------------------------------------------------+
| | The interim financial statements have been prepared in accordance with the |
| | accounting policies that the Group expects to apply in its annual financial |
| | statements for the year ending 31 January 2010. The directors have continued |
| | to apply the going concern basis of accounting because they remain confident |
| | in the future performance of the business and of the replacement of those |
| | borrowing facilities which are due to expire within 12 months of the balance |
| | sheet date (refer note 8). |
| | The Group's accounting policies are based on International Financial |
| | Reporting Standards ("IFRS") adopted for use by the European Union ("EU") and |
| | interpretive guidance from the International Financial Reporting |
| | Interpretations Committee ("IFRIC"). These standards and interpretations are |
| | subject to ongoing review and endorsement by the EU or possible amendment by |
| | further interpretive guidance from IFRIC and are therefore still subject to |
| | change. |
| | The Group has chosen not to adopt IAS 34 'Interim Financial Reporting' in |
| | preparing these interim financial statements for the period to 31 July 2009 |
| | as it is not mandatory for AIM listed companies. |
| | Since the Group's previous annual financial report for the year ended 31 |
| | January 2009 a number of authoritative pronouncements issued by the |
| | International Accounting Standards Board and IFRIC are now effective for |
| | financial years ending 31 January 2010, and additional authoritative |
| | pronouncements have been issued and will become effective in later years. |
| | Except as indicated below, pronouncements now effective for the year ending |
| | 31 January 2010 have had no material impact on these interim financial |
| | statements and pronouncements due to become effective in later years have not |
| | been early adopted by the Group. |
| | The Group will apply the following accounting standards for the first time in |
| | its financial statements for the year ending 31 January 2010, and the |
| | principles of these standards have also been applied in these interim |
| | financial statements: |
| | * |
| | IAS 1 (revised) 'Presentation of financial statements' - adoption of this |
| | standard will result in presentational changes to the primary financial |
| | statements. Under IAS 1 (revised), entities can choose to present one |
| | performance statement (the Statement of Comprehensive Income) or two |
| | performance statements (the Income Statement and the Statement of |
| | Comprehensive Income). The group has elected to produce two statements: the |
| | Income Statement and Statement of Comprehensive Income.* |
| | IFRS 8 'Operating segments' - adoption of this standard has resulted in |
| | changes to the reportable segments of the Group. |
| | Further details of authoritative pronouncements effective for financial years |
| | ending 31 January 2010 and additional authoritative pronouncements that have |
| | been issued and will become effective in later years will be set out in the |
| | financial statements of the Group for the year ending 31 January 2010. |
| | The interim financial statements do not represent statutory accounts for the |
| | purposes of S434 of the Companies Act 2006. The financial information for the |
| | year ended 31 January 2009 is based on the statutory accounts for the |
| | financial year ended 31 January 2009, on which the auditors issued an |
| | unqualified opinion, and have been delivered to the Registrar of Companies. |
| | The interim financial statements for the 6 month period ended 31 July 2009 |
| | have not been audited, but have been reviewed by the auditors. The auditors' |
| | review report is included following the interim financial statements. |
| | The Board approved the interim financial statements on 6 October 2009. |
| | |
+---+-------------------------------------------------------------------------------+
Unaudited Notes to the Accounts (continued)
2. Segmental analysis
The Board of Walker Greenbank PLC predominantly manages the operations of the
Group as two divisions which are the Brands and Manufacturing, which has been
the basis of segment information disclosed in previous financial periods.
Following the adoption of the principles set out in IFRS 8 'Operating Segments'
the Group has identified its operating segments and applied aggregation
criteria, as set out in IFRS 8, and has determined that the reportable segments
of the Group are as follows:
* Brands - comprising the design, marketing, sales and distribution, and licensing
of Harlequin, Sanderson, Zoffany and Morris & Co brands operated from the UK in
the retail and contract sectors of the market
* Manufacturing - comprising the wallpaper and fabrics manufacturing businesses
operated by Anstey and Standfast
* Overseas - comprising the marketing, sales and distribution operations of the
Group's foreign based subsidiaries in Europe and the United States.
Other group wide activities and expenses, predominantly related to corporate
head office costs, long term incentive plan expenses, taxation and eliminations
of intersegment items, are presented within 'Eliminations and unallocated'.
Segment information for the comparative periods for the six months ended 31 July
2008 and year ended 31 January 2009 have been restated to ensure a consistent
form of presentation following the adoption of IFRS 8 principles.
+----+-------------------------------------+--------------+---------------+--------------+--------------+--------------+
| a. | Reportable segment information | | | | | |
| | | | | | | |
+----+-------------------------------------+--------------+---------------+--------------+--------------+--------------+
| 6 months to 31 July 2008 | | | | Eliminations | |
| | Brands | Manufacturing | | and | |
| | | | Overseas | unallocated | Total |
+------------------------------------------+--------------+---------------+--------------+--------------+--------------+
| | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
| | | | | | |
+------------------------------------------+--------------+---------------+--------------+--------------+--------------+
| Revenue - External | 20,041 | 5,494 | 3,604 | - | 29,139 |
+------------------------------------------+--------------+---------------+--------------+--------------+--------------+
| Revenue - Internal | 720 | 5,011 | - | (5,731) | - |
+------------------------------------------+--------------+---------------+--------------+--------------+--------------+
| | | | | | |
+------------------------------------------+--------------+---------------+--------------+--------------+--------------+
| Total Revenue | 20,761 | 10,505 | 3,604 | (5,731) | 29,139 |
+----+-------------------------------------+--------------+---------------+--------------+--------------+--------------+
+------------------------------------------+--------------+--------------+--------------+--------------+--------------+
| Operating profit/(loss) before | 2,151 | (84) | 124 | (1,142) | 1,049 |
| exceptional items | | | | | |
+------------------------------------------+--------------+--------------+--------------+--------------+--------------+
| Exceptional items (refer note 4): | | | | | |
+------------------------------------------+--------------+--------------+--------------+--------------+--------------+
| - redundancy expenses | (64) | (182) | - | - | (246) |
+------------------------------------------+--------------+--------------+--------------+--------------+--------------+
| - net proceeds from insurance recovery | 210 | - | - | - | 210 |
+------------------------------------------+--------------+--------------+--------------+--------------+--------------+
| Operating profit/(loss) | 2,297 | (266) | 124 | (1,142) | 1,013 |
+------------------------------------------+--------------+--------------+--------------+--------------+--------------+
| Financial costs | - | - | - | (145) | (145) |
+------------------------------------------+--------------+--------------+--------------+--------------+--------------+
| Net pension charge | - | - | - | (300) | (300) |
+------------------------------------------+--------------+--------------+--------------+--------------+--------------+
| Profit/(loss) before tax | 2,297 | (266) | 124 | (1,587) | 568 |
+------------------------------------------+--------------+--------------+--------------+--------------+--------------+
| Tax | | | | (146) | (146) |
+------------------------------------------+--------------+--------------+--------------+--------------+--------------+
| Profit/(loss) for the period | 2,297 | (266) | 124 | (1,733) | 422 |
+------------------------------------------+--------------+--------------+--------------+--------------+--------------+
Unaudited Notes to the Accounts (continued)
+----+----------------------------+----------+---------------+----------+--------------+----------+
| 2 | Segmental analysis | | | | | |
| | (continued) | | | | | |
+----+----------------------------+----------+---------------+----------+--------------+----------+
| a. | Reportable segment information | | | | |
| | (continued) | | | | |
+----+---------------------------------------+---------------+----------+--------------+----------+
| 6 months to 31 July 2008 | Brands | Manufacturing | Overseas | Eliminations | Total |
| | | | | and | |
| | | | | unallocated | |
+---------------------------------+----------+---------------+----------+--------------+----------+
| | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
| | | | | | |
+---------------------------------+----------+---------------+----------+--------------+----------+
| Revenue - External | 22,341 | 6,683 | 3,983 | - | 33,007 |
+---------------------------------+----------+---------------+----------+--------------+----------+
| Revenue - Internal | 1,044 | 6,090 | - | (7,134) | - |
+---------------------------------+----------+---------------+----------+--------------+----------+
| | | | | | |
+---------------------------------+----------+---------------+----------+--------------+----------+
| Total Revenue | 23,385 | 12,773 | 3,983 | (7,134) | 33,007 |
+----+----------------------------+----------+---------------+----------+--------------+----------+
+-------------------------------+----------+----------+----------+----------+----------+
| Operating profit/(loss) | 3,090 | 672 | (119) | (1,502) | 2,141 |
+-------------------------------+----------+----------+----------+----------+----------+
| Financial costs | - | - | - | (385) | (385) |
+-------------------------------+----------+----------+----------+----------+----------+
| Net pension charge | - | - | - | (34) | (34) |
+-------------------------------+----------+----------+----------+----------+----------+
| | | | | | |
+-------------------------------+----------+----------+----------+----------+----------+
| Profit/(loss) before tax | 3,090 | 672 | (119) | (1,921) | 1,722 |
+-------------------------------+----------+----------+----------+----------+----------+
| Tax | | | | (786) | (786) |
+-------------------------------+----------+----------+----------+----------+----------+
| Profit/(loss) for the period | 3,090 | 672 | (119) | (2,707) | 936 |
+-------------------------------+----------+----------+----------+----------+----------+
+-------------------------------+----------+---------------+----------+--------------+----------+
| 12 months to 31 January 2009 | Brands | Manufacturing | Overseas | Eliminations | Total |
| | | | | and | |
| | | | | unallocated | |
+-------------------------------+----------+---------------+----------+--------------+----------+
| | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
| | | | | | |
+-------------------------------+----------+---------------+----------+--------------+----------+
| Revenue - External | 42,766 | 12,963 | 7,969 | - | 63,698 |
+-------------------------------+----------+---------------+----------+--------------+----------+
| Revenue - Internal | 1,942 | 10,992 | - | (12,934) | - |
+-------------------------------+----------+---------------+----------+--------------+----------+
| | | | | | |
+-------------------------------+----------+---------------+----------+--------------+----------+
| Total Revenue | 44,708 | 23,955 | 7,969 | (12,934) | 63,698 |
+-------------------------------+----------+---------------+----------+--------------+----------+
+-------------------------------+----------+----------+----------+----------+----------+
| Operating profit/(loss) | 5,240 | 931 | (8) | (2,306) | 3,857 |
| before exceptional items | | | | | |
+-------------------------------+----------+----------+----------+----------+----------+
| Exceptional items (refer note | | | | | |
| 4): | | | | | |
+-------------------------------+----------+----------+----------+----------+----------+
| - redundancy expenses | - | (146) | - | - | (146) |
+-------------------------------+----------+----------+----------+----------+----------+
| - net costs from insurance | (150) | - | - | - | (150) |
| event | | | | | |
+-------------------------------+----------+----------+----------+----------+----------+
| Operating profit/(loss) | 5,090 | 785 | (8) | (2,306) | 3,561 |
+-------------------------------+----------+----------+----------+----------+----------+
| Financial costs | - | - | - | (695) | (695) |
+-------------------------------+----------+----------+----------+----------+----------+
| Net pension charge | - | - | - | (79) | (79) |
+-------------------------------+----------+----------+----------+----------+----------+
| | | | | | |
+-------------------------------+----------+----------+----------+----------+----------+
| Profit/(loss) before tax | 5,090 | 785 | (8) | (3,080) | 2,787 |
+-------------------------------+----------+----------+----------+----------+----------+
| Tax | - | - | - | (1,165) | (1,165) |
+-------------------------------+----------+----------+----------+----------+----------+
| Profit/(loss) for the year | 5,090 | 785 | (8) | (4,245) | 1,622 |
+-------------------------------+----------+----------+----------+----------+----------+
+----+-------------------------------------------+------------+------------+------------+
| b. | Additional segment information | 6 months | 6 months | 12 months |
| | | to | to | to |
| | | 31 July | 31 July | 31 January |
| | | 2009 | 2008 | 2009 |
+----+-------------------------------------------+------------+------------+------------+
| Revenue by geographical location of customers | GBP000 | GBP000 | GBP000 |
+------------------------------------------------+------------+------------+------------+
| United Kingdom | 18,863 | 21,196 | 41,026 |
+------------------------------------------------+------------+------------+------------+
| Continental Europe | 5,105 | 5,674 | 10,987 |
+------------------------------------------------+------------+------------+------------+
| United States of America | 3,022 | 4,207 | 7,893 |
+------------------------------------------------+------------+------------+------------+
| Rest of the World | 2,149 | 1,930 | 3,792 |
+------------------------------------------------+------------+------------+------------+
| | 29,139 | 33,007 | 63,698 |
+----+-------------------------------------------+------------+------------+------------+
Unaudited Notes to the Accounts (continued)
+----+-------------------------------------+----------+-----------+-----+-----+-----+-----+
| 3 | Analysis of operating profit by function of expense | |
+----+------------------------------------------------------------------+-----------+
| | | | 6 | 6 months | 12 months |
| | | | months | to | to 31 |
| | | | to | 31 July | January |
| | | | 31 July | 2008 | 2009 |
| | | | 2009 | | |
+----+-------------------------------------+----------+-----------+-----------+-----------+
| | | | GBP000 | GBP000 | GBP000 |
+----+-------------------------------------+----------+-----------+-----------+-----------+
| | Revenue | | 29,139 | 33,007 | 63,698 |
+----+-------------------------------------+----------+-----------+-----------+-----------+
| | Cost of sales | | (11,747) | (13,294) | (25,567) |
+----+-------------------------------------+----------+-----------+-----------+-----------+
| | Gross profit | | 17,392 | 19,713 | 38,131 |
+----+-------------------------------------+----------+-----------+-----------+-----------+
| | Net operating expenses | | (16,379) | (17,572) | (34,570) |
+----+-------------------------------------+----------+-----------+-----------+-----------+
| | Operating profit | | 1,013 | 2,141 | 3,561 |
+----+-------------------------------------+----------+-----------+-----+-----+-----+-----+
+----+----------------------------------------------------+----------+----------+----------+
| 4 | Exceptional | | | |
+----+----------------------------------------------------+----------+----------+----------+
Items that are both material and whose nature is sufficient to warrant separate
disclosure and identification are disclosed within the financial statements and
classified within their relevant income statement category. In the current
period, "Redundancy expenses" and net income from an insurance claim for
marketing material products held at third party's premises which were destroyed
in a fire in the previous year have been presented as exceptional as these items
fall within the group's accounting policy for exceptional items. The insurance
loss in the previous year arose due to the uncertainty over the level of
insurance settlement recoverable.
+----+-----------------------------------------------+-----------+-----------+-----------+
| 5 | Net defined benefit pension costs | | | |
+----+-----------------------------------------------+-----------+-----------+-----------+
| | | 6 months | 6 months | 12 months |
| | | to | to | to |
| | | 31 July | 31 July | 31 |
| | | 2009 | 2008 | January |
| | | | | 2009 |
+----+-----------------------------------------------+-----------+-----------+-----------+
| | | GBP000 | GBP000 | GBP000 |
+----+-----------------------------------------------+-----------+-----------+-----------+
| | Expected return on pension scheme assets | 1,160 | 1,430 | 2,829 |
+----+-----------------------------------------------+-----------+-----------+-----------+
| | Interest on pension scheme liabilities | (1,315) | (1,326) | (2,633) |
+----+-----------------------------------------------+-----------+-----------+-----------+
| | Scheme expenses | (145) | (138) | (275) |
+----+-----------------------------------------------+-----------+-----------+-----------+
| | | (300) | (34) | (79) |
+----+-----------------------------------------------+-----------+-----------+-----------+
+----+-----------------------------------+-------------+-----------+-----------+-----------+
| 6 | Taxation | | | |
+----+-------------------------------------------------+-----------+-----------+-----------+
| | | | 6 months | 6 months | 12 months |
| | | | to | to | to |
| | | | 31 July | 31 July | 31 |
| | | | 2009 | 2008 | January |
| | | | | | 2009 |
+----+-----------------------------------+-------------+-----------+-----------+-----------+
| | | | GBP000 | GBP000 | GBP000 |
+----+-----------------------------------+-------------+-----------+-----------+-----------+
| | UK Corporation tax at 28% | - current | - | - | - |
| | (2008:28%) | year | | | |
+----+-----------------------------------+-------------+-----------+-----------+-----------+
| | Overseas taxation | - current | (6) | (11) | (57) |
| | | year | | | |
+----+-----------------------------------+-------------+-----------+-----------+-----------+
| | | - prior | - | - | - |
| | | year | | | |
+----+-----------------------------------+-------------+-----------+-----------+-----------+
| | Deferred tax | - current | (140) | (455) | (788) |
| | | year | | | |
+----+-----------------------------------+-------------+-----------+-----------+-----------+
| | | - | - | (320) | (320) |
| | | exceptional | | | |
+----+-----------------------------------+-------------+-----------+-----------+-----------+
| | Tax (charge)/credit on profit on | | (146) | (786) | (1,165) |
| | ordinary activities | | | | |
+----+-----------------------------------+-------------+-----------+-----------+-----------+
Other than overseas taxation, there was no current tax arising in the year to 31
January 2009, as taxable profits arising in the year were offset against
available losses from prior years. Because of the previous recognition of
deferred tax assets relating to losses of prior years, the Group's taxable
profits earned in the six months to 31 July 2009, and in future periods, will
result in deferred tax charges being recognised as losses are utilised and as
temporary differences originate and reverse. A deferred tax charge of GBP140,000
(2008: GBP455,000) arose in the period to 31 July 2009. The tax at the half year
has been based on a forecast full year effective tax rate.
+----+-----------------------------------------------------------------------------+
| | Unaudited Notes to the Accounts (continued) |
| | |
+----+-----------------------------------------------------------------------------+
+---+-------------------------------------------------------------------------------+
| | |
+---+-------------------------------------------------------------------------------+
| 7 | Earnings per share |
+---+-------------------------------------------------------------------------------+
| | The basic and diluted earnings per share are based on a profit after taxation |
| | of GBP422,000 (2008: GBP936,000) and 54,859,000 ordinary shares (2008: |
| | 54,995,000), being the weighted average number of the shares in issue during |
| | the period, excluding those held in the Employee Share Trust and in treasury, |
| | which are treated as cancelled. |
| | The basic and diluted earnings per share for the year ended 31 January 2009 |
| | were based on a profit for the year amounting to GBP1,622,000 and the |
| | weighted average of 54,880,000 ordinary shares in issue during the year. |
| | |
+---+-------------------------------------------------------------------------------+
+----+------------------------+---------+---------+---------+---+----------+----------+--------+
| | | | | | | Earnings | Weighted | Per |
| | | | | | | GBP000 | Average | share |
| | | | | | | | number | amount |
| | | | | | | | of | pence |
| | | | | | | | shares | |
| | | | | | | | (000's) | |
+----+------------------------+---------+---------+---------+---+----------+----------+--------+
| | Basic and diluted EPS: | | | | | | | |
+----+------------------------+---------+---------+---------+---+----------+----------+--------+
| | Earnings attributable to ordinary equity | | | | | |
| | shareholders for the periods to: | | | | | |
+----+--------------------------------------------+---------+---+----------+----------+--------+
| | | | | | | | | |
+----+------------------------+---------+---------+---------+---+----------+----------+--------+
| | - 6 months to 31 July | | | | | 422 | 54,859 | 0.77 |
| | 2009 | | | | | | | |
+----+------------------------+---------+---------+---------+---+----------+----------+--------+
| | - 6 months to 31 July | | | | | 936 | 54,995 | 1.70 |
| | 2008 | | | | | | | |
+----+------------------------+---------+---------+---------+---+----------+----------+--------+
| | - 12 months to 31 | | | | | 1,622 | 54,880 | 2.96 |
| | January 2009 | | | | | | | |
+----+------------------------+---------+---------+---------+---+----------+----------+--------+
+----+----------------------+----------+---------+------------+------------+----------+---------+
| 8 | Analysis of net debt | | | | | | |
+----+----------------------+----------+---------+------------+------------+----------+---------+
| | | | | Reclassifications of | | |
| | | | | Borrowings | | |
+----+----------------------+----------+---------+-------------------------+----------+---------+
| | | 1 | Cash | Working | Current | Exchange | 31 |
| | | February | flow | capital | portion of | movement | July |
| | | 2009 | GBP000 | facilities | term loans | GBP000 | 2009 |
| | | GBP000 | | (see note | GBP000 | | GBP000 |
| | | | | below) | | | |
| | | | | GBP000 | | | |
+----+----------------------+----------+---------+------------+------------+----------+---------+
| | Cash at bank and in | 1,050 | 995 | - | | (6) | 2,039 |
| | hand | | | | | | |
+----+----------------------+----------+---------+------------+------------+----------+---------+
| | | | | | | | |
+----+----------------------+----------+---------+------------+------------+----------+---------+
| | Borrowings due | (400) | 200 | (5,566) | (200) | - | (5,966) |
| | within 1 year | | | | | | |
+----+----------------------+----------+---------+------------+------------+----------+---------+
| | Borrowings due after | (6,868) | (1,698) | 5,566 | 200 | - | (2,800) |
| | 1 year | | | | | | |
+----+----------------------+----------+---------+------------+------------+----------+---------+
| | | (7,268) | (1,498) | - | - | - | (8,766) |
+----+----------------------+----------+---------+------------+------------+----------+---------+
| | Net debt | (6,218) | (503) | - | - | (6) | (6,727) |
+----+----------------------+----------+---------+------------+------------+----------+---------+
The current working capital facilities provided by Barclays will end their
initial three year term in July 2010. Negotiations to renew these facilities
have commenced. The borrowings under these facilities as at 31 July 2009 were
GBP5,566,000 and have been classified as Borrowings due within 1 year. The
directors expect to replace existing working capital facilities before their
expiry date.
+----+------------------------------------------------------------------------------+
| | Unaudited Notes to the Accounts (continued) |
| | |
+----+------------------------------------------------------------------------------+
+----+-------------------------------+------------------+----------+----------+--------+----+
| 9 | Cash generated/(utilised) from operations |
+----+---------------------------------------------------------------------------------+
| | | | 6 months | 6 months | 12 |
| | | | to | to | months |
| | | | 31 July | 31 July | to |
| | | | 2009 | 2008 | 31 January |
| | | | GBP000 | GBP000 | 2009 |
| | | | | | GBP000 |
+----+-------------------------------+------------------+----------+----------+-------------+
| | Operating profit | 1,013 | 2,141 | 3,561 |
+----+--------------------------------------------------+----------+----------+-------------+
| | Depreciation | 782 | 709 | 1,470 |
+----+--------------------------------------------------+----------+----------+-------------+
| | Amortisation | 217 | 265 | 376 |
+----+--------------------------------------------------+----------+----------+-------------+
| | (Credit)/charge for long-term incentive plan | (4) | 207 | 414 |
| | recognised in equity | | | |
+----+--------------------------------------------------+----------+----------+-------------+
| | Loss/(profit) on disposal of property, plant and | - | - | 6 |
| | equipment | | | |
+----+--------------------------------------------------+----------+----------+-------------+
| | Unrealised foreign exchange (gains)/losses | 227 | - | (499) |
| | included in operating profit | | | |
+----+--------------------------------------------------+----------+----------+-------------+
| | | | | |
+----+--------------------------------------------------+----------+----------+-------------+
| | Changes in working capital | | | |
+----+--------------------------------------------------+----------+----------+-------------+
| | Decrease /(Increase) in inventories | 707 | (1,364) | (1,341) |
+----+--------------------------------------------------+----------+----------+-------------+
| | Decrease/(Increase) in trade and other | 665 | (197) | 1,164 |
| | receivables | | | |
+----+--------------------------------------------------+----------+----------+-------------+
| | (Decrease)/ Increase in trade and other payables | (2,680) | (1,792) | (288) |
+----+--------------------------------------------------+----------+----------+-------------+
| | Defined benefit pension cash contributions | (651) | (660) | (1,327) |
+----+--------------------------------------------------+----------+----------+-------------+
| | Cash generated/(utilised) from operating | 276 | (691) | 3,536 |
| | activities | | | |
+----+-------------------------------+------------------+----------+----------+--------+----+
+----+------------------------------------------------------------------------------+
| 10 | Retirement benefit obligations |
| | The Group operates the following funded pension schemes in the UK: the |
| | Walker Greenbank Pension Plan, the Abaris Holdings Limited Pension Scheme |
| | and the WG Senior Management Pension Scheme. The Walker Greenbank Pension |
| | Plan is the biggest scheme. All schemes contain defined benefits sections, |
| | which are closed to new members and the accrual of future benefits, however |
| | the Abaris Holdings Limited Pension Scheme also contains a defined |
| | contribution section, although this section is relatively small. |
| | The pension costs relating to the UK defined benefit schemes are assessed in |
| | accordance with the advice of an independent qualified actuary using the |
| | projected unit method. These schemes are subject to triennial actuarial |
| | reviews with the most recent ones having been April 2006. An updated |
| | valuation for IAS 19 financial reporting purposes was completed for the |
| | previous annual financial statements to 31 January 2009. |
| | The assumptions applied for valuation of the defined benefit schemes are |
| | fully disclosed in the annual financial statements for the year ended 31 |
| | January 2009 and continue to be applied in the half year to 31 July 2009. |
| | The net defined benefit pension charge recognised in the half year |
| | represents the relevant proportion of the annual amounts expected to be |
| | recognised for the year ending 31 January 2010, and are based on previous |
| | actuarial estimates. The net retirement benefit obligation recognised at 31 |
| | July 2009 is based on the actuarial valuation under IAS 19 at 31 January |
| | 2009 updated for movements in net defined benefit pension charge and |
| | contributions paid during the half year period. The deferred tax effect of |
| | movements in the net retirement benefit obligation has also been recognised |
| | in the half year. A full valuation for IAS 19 financial reporting purposes |
| | will be completed for the next annual financial statements for the year |
| | ending 31 January 2010, at which time any actuarial gains and losses arising |
| | due to the recent market volatility throughout the year will be recognised. |
| | |
+----+------------------------------------------------------------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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