TIDMGAW
RNS Number : 3248W
Games Workshop Group PLC
28 July 2009
?
PRELIMINARY RESULTS 2009
Games Workshop Group PLC ("Games Workshop" or the "Group") announces its
preliminary results for the year ended 31 May 2009.
Highlights
+-------+-------------------------------------------------------------------+
| * | Revenue up at GBP125.7m (2008: GBP110.3m) |
| | |
+-------+-------------------------------------------------------------------+
| * | Revenue at constant currency* up at GBP113.9m (2008: GBP110.3m) |
| | |
+-------+-------------------------------------------------------------------+
| * | Operating profit - pre-royalties receivable** up at GBP5.5m |
| | (2008: GBP0.8m) |
| | |
+-------+-------------------------------------------------------------------+
| * | Operating profit** at GBP9.0m (2008: GBP2.5m) |
| | |
+-------+-------------------------------------------------------------------+
| * | Pre-tax profit at GBP7.5m (2008: GBP1.1m) |
| | |
+-------+-------------------------------------------------------------------+
| * | Earnings per share of 17.8p (2008: loss (2.4)p) |
| | |
+-------+-------------------------------------------------------------------+
| * | Year end net borrowings of GBP1.6m (2008: GBP10.1m) |
| | |
+-------+-------------------------------------------------------------------+
Mark Wells, chief executive of Games Workshop, said:
"We are pleased to have delivered a good set of results this year, significantly
reducing our net debt. We believe that we have laid the foundations for steady
growth and that the prospects for Games Workshop remain good."
For further information, please contact:
+--------------------------------------+---------------------+------------------+
| Games Workshop Group PLC | Today only: | 01653 618 016 |
+--------------------------------------+---------------------+------------------+
| Tom Kirby, chairman | Thereafter: | 0115 900 4001 |
+--------------------------------------+---------------------+------------------+
| Mark Wells, chief executive | | 0115 900 4001 |
+--------------------------------------+---------------------+------------------+
| Kevin Rountree, chief financial | | 0115 900 4001 |
| officer | | |
+--------------------------------------+---------------------+------------------+
| | | |
+--------------------------------------+---------------------+------------------+
| Investor relations website | http://investor.games-workshop.com |
+--------------------------------------+----------------------------------------+
| General website | www.games-workshop.com |
+--------------------------------------+----------------------------------------+
| | | |
+--------------------------------------+---------------------+------------------+
| Rawlings Financial PR Limited | Tel: | 01653 618016 |
+--------------------------------------+---------------------+------------------+
| Catriona Valentine | | |
+--------------------------------------+---------------------+------------------+
The 2009 annual report, analyst presentation and notice of annual general
meeting may be viewed at the investor relations website at the address above.
* Constant currency growth is calculated by comparing results in the underlying
currencies for 2008 and 2009, both converted at the 2008 average exchange rates.
** Details of exceptional items relating to the cost reduction programme in the
prior year are set out in note 10.
FINANCIAL HIGHLIGHTS
+-------------------------------------------+-----------+-----------+
| | 2009 | 2008 |
+-------------------------------------------+-----------+-----------+
| | | |
+-------------------------------------------+-----------+-----------+
| Revenue | GBP125.7m | GBP110.3m |
+-------------------------------------------+-----------+-----------+
| | | |
+-------------------------------------------+-----------+-----------+
| Revenue in constant currency * | GBP113.9m | GBP110.3m |
+-------------------------------------------+-----------+-----------+
| | | |
+-------------------------------------------+-----------+-----------+
| Operating profit - pre-royalties | GBP5.5m | GBP0.8m |
| receivable** | | |
+-------------------------------------------+-----------+-----------+
| | | |
+-------------------------------------------+-----------+-----------+
| Royalties receivable | GBP3.5m | GBP1.7m |
+-------------------------------------------+-----------+-----------+
| | | |
+-------------------------------------------+-----------+-----------+
| Operating profit** | GBP9.0m | GBP2.5m |
+-------------------------------------------+-----------+-----------+
| | | |
+-------------------------------------------+-----------+-----------+
| Pre?tax profit | GBP7.5m | GBP1.1m |
+-------------------------------------------+-----------+-----------+
| | | |
+-------------------------------------------+-----------+-----------+
| Discontinued operations - profit/(loss) | GBP0.1m | GBP(1.2)m |
| for the year | | |
+-------------------------------------------+-----------+-----------+
| | | |
+-------------------------------------------+-----------+-----------+
| Year end net borrowings | GBP1.6m | GBP10.1m |
+-------------------------------------------+-----------+-----------+
| | | |
+-------------------------------------------+-----------+-----------+
| Earnings/(loss) per share | 17.8p | (2.4)p |
+-------------------------------------------+-----------+-----------+
BUSINESS REVIEW BY THE CHIEF EXECUTIVE
Summary of results - for the year to 31 May 2009
It's good to be back in sales growth, although I would encourage you not to get
too carried away because we did benefit from some significant exchange rate
movements. Because of this we have also included some comparisons in the
highlights based on sales in constant currency* to give a more realistic
perspective on our progress.
As far as sales are concerned, we had a disappointing third quarter. The simple
truth is that we didn't do a good enough job of helping all the customers we
recruited in the summer purchase product over Christmas. We make no excuses at
Games Workshop, lessons have been learned and it is good to report that in the
fourth quarter we have seen a return to steady growth.
There are no silver bullets for growing sales at Games Workshop. It requires a
consistent focus on the basics of recruiting new hobbyists through our Hobby
centres and using our games to teach them how to buy, build, paint and collect
ever larger armies of miniatures. We retain these hobbyists as customers by
releasing fantastic new products and running exciting activities to keep
everyone engaged in the Hobby. By growing our active customer base in this way,
our sales to independent retailers (trade) and direct businesses benefit as
well. It is simple to say, but hard to do, which is why it all comes down to the
strength of our management teams in each sales business and in particular the
quality of our managers in each Hobby centre.
Sales by channel
+----------------------------------+-----------+-----------+-----------+-----------+
| | 2009 | 2008 |
+----------------------------------+-----------------------+-----------------------+
| Hobby centres | GBP59.9m | 48% | GBP53.8m | 49% |
+----------------------------------+-----------+-----------+-----------+-----------+
| Direct | GBP14.2m | 11% | GBP13.1m | 12% |
+----------------------------------+-----------+-----------+-----------+-----------+
| Independent retailers | GBP51.6m | 41% | GBP43.4m | 39% |
+----------------------------------+-----------+-----------+-----------+-----------+
In the UK, North America and Asia Pacific our management teams remained focused
on building our customer base and delivered sales growth. Not enough progress
has been made in Continental Europe, particularly in Spain and Italy so in the
second half we made management changes to both of these businesses. The task of
rebuilding their customer base has begun and we expect these new teams to
deliver growth within the next couple of years.
Sales by territory ***
+--------------------------------+----------+----------+-----------+------------+
| | | | | Constant |
+--------------------------------+----------+----------+-----------+------------+
| | | | | currency |
+--------------------------------+----------+----------+-----------+------------+
| | | | | growth/ |
+--------------------------------+----------+----------+-----------+------------+
| | 2009 | 2008 | Growth | (decline) |
+--------------------------------+----------+----------+-----------+------------+
| | | | | |
+--------------------------------+----------+----------+-----------+------------+
| Continental Europe | GBP43.3m | GBP41.1m | +GBP2.2m | GBP(2.7)m |
+--------------------------------+----------+----------+-----------+------------+
| UK | GBP42.7m | GBP36.8m | +GBP5.9m | +GBP4.5m |
+--------------------------------+----------+----------+-----------+------------+
| North America | GBP29.7m | GBP24.0m | +GBP5.7m | +GBP0.8m |
+--------------------------------+----------+----------+-----------+------------+
| Asia Pacific | GBP10.0m | GBP8.4m | +GBP1.6m | +GBP1.0m |
+--------------------------------+----------+----------+-----------+------------+
Forge World and Black Library are two small and highly successful businesses
which sell, respectively, specialist resin kits and books based on the worlds of
Warhammer and Warhammer 40,000 to Games Workshop hobbyists. Both businesses have
seen strong growth this year, reflecting both the quality of the management and
the underlying health of the Games Workshop Hobby.
Our gross margin strengthened in the second half as we benefited from the metal
price increase that we implemented in the autumn and further cost reductions in
our manufacturing and supply chain. Raw material prices have returned to more
normal levels in the second half but we continue to invest in converting more of
our range to plastic, both to improve the quality of the models and make us less
sensitive to metal cost fluctuations.
The last few years have reminded us how important it is to be cost conscious and
we have made good progress in restoring this cost saving culture across the
business. We have reduced staffing levels in our Hobby centres by adjusting
opening hours to better reflect when our hobbyists are available to play. We
have limited our property cost increases by better planned rent negotiations and
relocations to lower cost premises when possible. Our new web store has improved
efficiency in processing orders and allowed us to slim down our direct sales
teams. We also closed our Canadian office and relocated our Italian office to
more modest premises outside Rome.
Investment has been focused on two key drivers of performance, opening more
Hobby centres, which increased from 334 to 355, and developing more plastic
injection tools. These two areas will remain the focus of future investment.
Other non-essential capital expenditure has been cut back. In addition, we have
implemented automatic stock replenishment and streamlined product ranges into
our UK and North American Hobby centres to improve our control of working
capital. This is being rolled out into Europe next year.
Hobby centre openings in 2008/9
+--------------------------+------------+--------------+
| | Opened | Closed |
+--------------------------+------------+--------------+
| Continental Europe | 9 | 2 |
+--------------------------+------------+--------------+
| UK | 5 | 1 |
+--------------------------+------------+--------------+
| North America | 18 | 13 |
+--------------------------+------------+--------------+
| Asia Pacific | 5 | 0 |
+--------------------------+------------+--------------+
In North America, we continue to make good progress with our programme of
closing Hobby centres in shopping malls at the end of their lease and replacing
them with small 'strip mall' locations where rents are lower and we have more
control over opening hours. In total we have 81 Hobby centres in North America
and with the closure programme nearing completion we expect to deliver double
digit openings for the foreseeable future. In the UK and Continental Europe we
successfully piloted the new one-man format, which will allow us to open
profitable Hobby centres in much smaller towns. We now expect to see an increase
in such openings across both these territories.
The combination of modest sales growth, gross margin improvement and controlled
costs has resulted in an increase in operating margins to 7.2%. And with more
focused investment and better asset management, the return on capital has
strengthened from 12% to 22%. We expect the improvement in operating margins and
asset turn to continue as sales volumes increase over time and stock management
is rolled out across Continental Europe, further strengthening our return on
capital.
Return on average capital employed ****
+----------------+------------+
| 2009 | 22% |
+----------------+------------+
| 2008 | 12% |
+----------------+------------+
| 2007 | 5% |
+----------------+------------+
| 2006 | 10% |
+----------------+------------+
| 2005 | 35% |
+----------------+------------+
Finally, royalty income has increased from GBP1.7 million to GBP3.5 million.
While we don't rely on this income, it has made a very welcome contribution to
our cash flow from operating activities, up from GBP10.7 million to GBP18.1
million. As a result we have been able to reduce our net debt from GBP10.1
million to GBP1.6 million by year end. Our banking arrangements are in place
until 2011 and our covenant cover is excellent.
Net debt/(cash)
+----------------+------------+
| 2009 | GBP1.6m |
+----------------+------------+
| 2008 | GBP10.1m |
+----------------+------------+
| 2007 | GBP10.2m |
+----------------+------------+
| 2006 | GBP2.2m |
+----------------+------------+
| 2005 | GBP(3.4)m |
+----------------+------------+
So a pleasing set of results. But the real story this year is that we have been
preparing ourselves for growth. Tom referred to some of this work in his
preamble in the annual report and I am going to talk about these important
initiatives in more detail.
First, we have been working on our Hobby centre models to make them as cost
effective as possible. This involved successfully piloting a smaller model in
the UK, Continental Europe and North America. This smaller model delivers all
the customer benefits of introductory games, painting lessons and Hobby
activity, but does so with lower property costs, staffing levels and capital
investment. We believe we can roll this format out into many more locations in
our largest markets, thereby expanding our global customer base further than we
had thought previously.
I described earlier the importance of the manager in each Hobby centre to its
sales performance. Last year we started building a pipeline of Hobby centre
managers in the UK and North America to support their Hobby centre opening
plans. This has had the additional benefit of improving the overall quality of
Hobby centre managers across both businesses and we are now intending to
implement a similar improvement in the manager pipeline in Continental Europe.
We are now prepared for a sustained period of Hobby centre openings across the
world.
We have also completed the rollout of our new website and global web store. This
complex project has been completed on time and within budget. The new web store
is being introduced into each Games Workshop Hobby centre to allow hobbyists
access to our full product range with free delivery to the store. Order
turnaround time has been improved dramatically and we now have the engine to
support our growth plans.
We have also introduced new trade terms in the UK and Continental Europe which
rewards those accounts which deliver a higher level of service to customers and
reduces the discount to those accounts which had been benefiting from the hard
work of others. This and the large swings in exchange rates between sterling and
the euro have made it difficult for our Continental European trade teams in the
second half. Now these new terms are in place we are well prepared to build a
sustainable base of quality trade accounts across Europe for the foreseeable
future.
We have centralised the management of worldwide stock for all Hobby centres and
warehouses in Nottingham. With automatic replenishment, the streamlined range
and new EPOS tills in France and Germany, this new global stock management team
should be able to optimise stock levels and reduce wastage as we grow.
We implemented a new factory layout in Nottingham which will help deliver gross
margin improvements as volumes increase. We have improved our resin
manufacturing processes in Nottingham and implemented a new resin cell in
Shanghai to manage the significantly higher levels of sales growth we have been
experiencing from Forge World.
We have centralised our pricing and range decisions in Nottingham to ensure that
we have more consistent pricing across the range to better reflect the
improvement in quality we have been delivering. Indeed, with the investment we
have made in our state-of-the-art plastic tool making facility in Nottingham and
skill of our design and manufacturing teams, the quality of our new plastic
miniatures are now superior to their metal counterparts. By charging what these
new models are worth, we can continue to invest in further plastic product
development and quality improvements across the range.
Risks facing the business
We have a formal risk reporting process as part of our annual planning cycle,
which is linked into the internal and external audit process, but the management
of these risks is an integral part of our daily management process. Our
management structure and the reporting systems which we have developed make this
process transparent and accountable. The head of sales of each business is
responsible for growing the value of his business in each country and for
managing market facing risk; the head of operations is responsible for
minimising the economic costs of production and risks inherent in that; the
chief financial officer is responsible for managing corporate risks and for
ensuring we comply with the regulatory environment.
Tom has said on many previous occasions that the biggest risks facing Games
Workshop are that we lose focus on what makes us successful and fail to develop
the management talent to deliver it. That is why we have invested in the
Games Workshop Academy and an annual succession planning programme.
+-------+-------------------------------------------------------------------+
| * | The Academy's role is to support the personal development of all |
| | senior managers and to embed in them the management behaviours |
| | and understanding of Games Workshop's niche business model so |
| | that we run the business the right way. |
+-------+-------------------------------------------------------------------+
| * | Our annual succession planning reviews ensure that we are |
| | developing good short-term and long-term internal candidates for |
| | each senior management role. |
| | |
+-------+-------------------------------------------------------------------+
Both these approaches have been used successfully this year in filling important
sales, operational and finance roles with excellent internal candidates.
In the past we have also referred to the risk that something catastrophic
happens to our Nottingham facility and to adverse variances in commodity prices
such as metal. We have mitigated the risk to our Nottingham facility by
establishing a manufacturing and warehousing hub in Memphis which has the
capacity to meet our needs should anything prevent the Nottingham facility from
operating effectively. And as we demonstrated this year, we have mitigated the
risk of metal cost price increases by the continued development of our plastic
ranges, where we are better able to manage commodity price fluctuations.
Games Workshop people
I take this opportunity to thank all of the people at Games Workshop who have
helped make a success of this financial year. Our staff really are our most
important assets and no financial balance sheet can adequately reflect this
truth. Kevin Rountree joined the board in October 2008 as chief financial
officer and Kevin and his team are doing sterling work on the finance front. In
this role Kevin succeeded Michael Sherwin, who left the Group after nine years'
service. We thank Michael for his contribution and wish him well for the future.
Prospects
There remain opportunities for geographical growth of our core business in all
of our existing territories. We have developed better retail formats and well
structured trade terms to ensure we can grow profitably in each of these
territories. We also have a web store which can support our customer base for
the long term.
We have a strong product release schedule which delivers constantly improving
quality miniatures each month on time. Our manufacturing and supply operations
are increasingly efficient and reliable. Our costs are under tight control and
our service centres are operating well.
We have established a five year plan and KPIs to allow us to measure performance
in all these areas. We have invested sensibly in management recruitment and
development, in particular with our Games Workshop Academy. This year's
succession plan reviews have confirmed that we now have good internal candidates
to fill all senior roles.
And finally, while we are not dependent on royalty income, we continue to look
for opportunities to develop high quality licences with strong players in
attractive markets.
In summary, we are pleased to have delivered a good set of results this year,
significantly reducing our net debt. We believe that we have laid the
foundations for steady growth and that the prospects for Games Workshop remain
good.
Mark Wells
Chief executive
27 July 2009
* Constant currency growth is calculated by comparing results in the underlying
currencies for 2008 and 2009, both converted at the 2008 average exchange rates.
** Details of exceptional items relating to the cost reduction programme in the
prior year are set out in note 10.
*** Sales by territory includes an allocation of web sales from the UK to the
respective territory of destination to aid comparison with the prior year.
**** We use average capital employed to take account of the significant
fluctuation in working capital which occurs as the business builds both
inventories and trade debtors in the pre-Christmas trading period. Return is
defined as pre-exceptional operating profit, and the average capital employed is
adjusted by deducting assets and adding back liabilities in respect of cash,
borrowings, exceptional provisions, taxation and dividends.
CONSOLIDATED INCOME STATEMENT
+-----------------------------------------------+-------+------------+------------+
| | | Year to | Year to |
+-----------------------------------------------+-------+------------+------------+
| | | 31 May | 1 June |
| | | 2009 | 2008 |
+-----------------------------------------------+-------+------------+------------+
| |Notes | GBP000 | GBP000 |
+-----------------------------------------------+-------+------------+------------+
| Continuing operations | | | |
+-----------------------------------------------+-------+------------+------------+
| Revenue | 3 | 125,706 | 110,345 |
+-----------------------------------------------+-------+------------+------------+
| Cost of sales | | (35,919) | (33,731) |
+-----------------------------------------------+-------+------------+------------+
| | | | |
+-----------------------------------------------+-------+------------+------------+
| Gross profit | | 89,787 | 76,614 |
+-----------------------------------------------+-------+------------+------------+
| Operating expenses | | (84,244) | (75,798) |
+-----------------------------------------------+-------+------------+------------+
| Other operating income - royalties receivable | | 3,471 | 1,736 |
+-----------------------------------------------+-------+------------+------------+
| | | | |
+-----------------------------------------------+-------+------------+------------+
| Operating profit | 3 | 9,014 | 2,552 |
+-----------------------------------------------+-------+------------+------------+
| | | | |
+-----------------------------------------------+-------+------------+------------+
| Finance income | | 333 | 425 |
+-----------------------------------------------+-------+------------+------------+
| Finance costs | | (1,808) | (1,918) |
+-----------------------------------------------+-------+------------+------------+
| | | | |
+-----------------------------------------------+-------+------------+------------+
| | | | |
+-----------------------------------------------+-------+------------+------------+
| Profit before taxation | | 7,539 | 1,059 |
+-----------------------------------------------+-------+------------+------------+
| Income tax expense | 5 | (2,107) | (613) |
+-----------------------------------------------+-------+------------+------------+
| | | | |
+-----------------------------------------------+-------+------------+------------+
| Profit for the year from continuing | | 5,432 | 446 |
| operations | | | |
+-----------------------------------------------+-------+------------+------------+
| | | | |
+-----------------------------------------------+-------+------------+------------+
| Discontinued operations | | | |
+-----------------------------------------------+-------+------------+------------+
| Profit/(loss) for the year from discontinued | | 118 | (1,186) |
| operations | | | |
+-----------------------------------------------+-------+------------+------------+
| | | | |
+-----------------------------------------------+-------+------------+------------+
| Profit/(loss) attributable to equity | | 5,550 | (740) |
| shareholders | | | |
+-----------------------------------------------+-------+------------+------------+
| | | | |
+-----------------------------------------------+-------+------------+------------+
| | | | |
+-----------------------------------------------+-------+------------+------------+
| Basic earnings/(loss) per ordinary share | 4 | 17.8p | (2.4)p |
+-----------------------------------------------+-------+------------+------------+
| Diluted earnings/(loss) per ordinary share | 4 | 17.8p | (2.4)p |
+-----------------------------------------------+-------+------------+------------+
| Basic earnings per ordinary share - | 4 | 17.4p | 1.4p |
| continuing operations | | | |
+-----------------------------------------------+-------+------------+------------+
| Diluted earnings per ordinary share - | 4 | 17.4p | 1.4p |
| continuing operations | | | |
+-----------------------------------------------+-------+------------+------------+
STATEMENT OF RECOGNISED INCOME AND EXPENSE
+------------------------------------------------------+------------+------------+
| | Year to | Year to |
+------------------------------------------------------+------------+------------+
| | 31 May | 1 June |
| | 2009 | 2008 |
+------------------------------------------------------+------------+------------+
| | GBP000 | GBP000 |
+------------------------------------------------------+------------+------------+
| | | |
+------------------------------------------------------+------------+------------+
| Profit/(loss) attributable to equity shareholders | 5,550 | (740) |
+------------------------------------------------------+------------+------------+
| | | |
+------------------------------------------------------+------------+------------+
| Exchange differences on translation of foreign | 2,605 | 1,626 |
| operations | | |
+------------------------------------------------------+------------+------------+
| Cash flow hedges: | | |
+------------------------------------------------------+------------+------------+
| - fair value losses | (112) | (940) |
+------------------------------------------------------+------------+------------+
| - transferred to the income statement | 940 | 88 |
+------------------------------------------------------+------------+------------+
| Net investment hedge | (621) | (737) |
+------------------------------------------------------+------------+------------+
| Tax on items recognised directly in equity | (58) | 237 |
+------------------------------------------------------+------------+------------+
| | | |
+------------------------------------------------------+------------+------------+
| Total recognised income/(expense) for the year | 8,304 | (466) |
+------------------------------------------------------+------------+------------+
CONSOLIDATED BALANCE SHEET
+-----------------------------------------------+-------+------------+------------+
| | | As at | As at |
+-----------------------------------------------+-------+------------+------------+
| | | 31 May | 1 June |
| | | 2009 | 2008 |
+-----------------------------------------------+-------+------------+------------+
| |Notes | GBP000 | GBP000 |
+-----------------------------------------------+-------+------------+------------+
| | | | |
+-----------------------------------------------+-------+------------+------------+
| Non-current assets | | | |
+-----------------------------------------------+-------+------------+------------+
| Goodwill | | 1,433 | 1,433 |
+-----------------------------------------------+-------+------------+------------+
| Other intangible assets | | 5,811 | 6,059 |
+-----------------------------------------------+-------+------------+------------+
| Property, plant and equipment | | 25,380 | 26,422 |
+-----------------------------------------------+-------+------------+------------+
| Trade and other receivables | | 1,570 | 1,234 |
+-----------------------------------------------+-------+------------+------------+
| Financial assets - derivative financial | | - | 14 |
| instruments | | | |
+-----------------------------------------------+-------+------------+------------+
| Deferred tax assets | | 4,704 | 3,005 |
+-----------------------------------------------+-------+------------+------------+
| | | | |
+-----------------------------------------------+-------+------------+------------+
| | | 38,898 | 38,167 |
+-----------------------------------------------+-------+------------+------------+
| | | | |
+-----------------------------------------------+-------+------------+------------+
| Current assets | | | |
+-----------------------------------------------+-------+------------+------------+
| Inventories | | 10,678 | 10,392 |
+-----------------------------------------------+-------+------------+------------+
| Trade and other receivables | | 9,959 | 9,870 |
+-----------------------------------------------+-------+------------+------------+
| Assets held for sale | | - | 464 |
+-----------------------------------------------+-------+------------+------------+
| Current tax assets | | 32 | 854 |
+-----------------------------------------------+-------+------------+------------+
| Financial assets - derivative financial | | 210 | 17 |
| instruments | | | |
+-----------------------------------------------+-------+------------+------------+
| Cash and cash equivalents | | 10,355 | 7,723 |
+-----------------------------------------------+-------+------------+------------+
| | | | |
+-----------------------------------------------+-------+------------+------------+
| | | 31,234 | 29,320 |
+-----------------------------------------------+-------+------------+------------+
| | | | |
+-----------------------------------------------+-------+------------+------------+
| Total assets | | 70,132 | 67,487 |
+-----------------------------------------------+-------+------------+------------+
| | | | |
+-----------------------------------------------+-------+------------+------------+
| Current liabilities | | | |
+-----------------------------------------------+-------+------------+------------+
| Financial liabilities - borrowings | | (2) | (2,791) |
+-----------------------------------------------+-------+------------+------------+
| Financial liabilities - derivative financial | | (550) | (1,401) |
| instruments | | | |
+-----------------------------------------------+-------+------------+------------+
| Trade and other payables | | (14,092) | (15,351) |
+-----------------------------------------------+-------+------------+------------+
| Current tax liabilities | | (2,233) | (222) |
+-----------------------------------------------+-------+------------+------------+
| Provisions | | (1,046) | (1,155) |
+-----------------------------------------------+-------+------------+------------+
| | | | |
+-----------------------------------------------+-------+------------+------------+
| | | (17,923) | (20,920) |
+-----------------------------------------------+-------+------------+------------+
| | | | |
+-----------------------------------------------+-------+------------+------------+
| Net current assets | | 13,311 | 8,400 |
+-----------------------------------------------+-------+------------+------------+
| | | | |
+-----------------------------------------------+-------+------------+------------+
| Non-current liabilities | | | |
+-----------------------------------------------+-------+------------+------------+
| Financial liabilities - borrowings | | (12,000) | (15,001) |
+-----------------------------------------------+-------+------------+------------+
| Other non-current liabilities | | (632) | (723) |
+-----------------------------------------------+-------+------------+------------+
| Provisions | | (1,586) | (1,317) |
+-----------------------------------------------+-------+------------+------------+
| | | | |
+-----------------------------------------------+-------+------------+------------+
| | | (14,218) | (17,041) |
+-----------------------------------------------+-------+------------+------------+
| | | | |
+-----------------------------------------------+-------+------------+------------+
| Net assets | | 37,991 | 29,526 |
+-----------------------------------------------+-------+------------+------------+
| | | | |
+-----------------------------------------------+-------+------------+------------+
| Capital and reserves | | | |
+-----------------------------------------------+-------+------------+------------+
| Called up share capital | 7 | 1,556 | 1,556 |
+-----------------------------------------------+-------+------------+------------+
| Share premium account | 7 | 7,822 | 7,822 |
+-----------------------------------------------+-------+------------+------------+
| Other reserves | 7 | 1,837 | (321) |
+-----------------------------------------------+-------+------------+------------+
| Retained earnings | 7 | 26,776 | 20,469 |
+-----------------------------------------------+-------+------------+------------+
| | | | |
+-----------------------------------------------+-------+------------+------------+
| Total shareholders' equity | 7 | 37,991 | 29,526 |
+-----------------------------------------------+-------+------------+------------+
CONSOLIDATED CASH FLOW STATEMENT
+------------------------------------------------+-------+------------+------------+
| | | Year to | Year to |
+------------------------------------------------+-------+------------+------------+
| | | 31 May | 1 June |
| | | 2009 | 2008 |
+------------------------------------------------+-------+------------+------------+
| |Notes | GBP000 | GBP000 |
+------------------------------------------------+-------+------------+------------+
| | | | |
+------------------------------------------------+-------+------------+------------+
| Cash flows from operating activities | | | |
+------------------------------------------------+-------+------------+------------+
| Cash generated from operations | 9 | 18,902 | 11,097 |
+------------------------------------------------+-------+------------+------------+
| UK corporation tax (paid)/received | | (191) | 6 |
+------------------------------------------------+-------+------------+------------+
| Overseas tax paid | | (592) | (418) |
+------------------------------------------------+-------+------------+------------+
| | | | |
+------------------------------------------------+-------+------------+------------+
| Net cash from operating activities | | 18,119 | 10,685 |
+------------------------------------------------+-------+------------+------------+
| | | | |
+------------------------------------------------+-------+------------+------------+
| Cash flows from investing activities | | | |
+------------------------------------------------+-------+------------+------------+
| Purchases of property, plant and equipment | | (6,291) | (5,705) |
+------------------------------------------------+-------+------------+------------+
| Proceeds on disposal of intangible assets | | - | 44 |
+------------------------------------------------+-------+------------+------------+
| Proceeds on disposal of property, plant and | | 62 | 50 |
| equipment | | | |
+------------------------------------------------+-------+------------+------------+
| Proceeds on disposal of asset held for sale | | 500 | - |
+------------------------------------------------+-------+------------+------------+
| Purchases of other intangible assets | | (1,315) | (1,557) |
+------------------------------------------------+-------+------------+------------+
| Expenditure on product development | | (2,249) | (2,266) |
+------------------------------------------------+-------+------------+------------+
| Interest received | | 333 | 415 |
+------------------------------------------------+-------+------------+------------+
| | | | |
+------------------------------------------------+-------+------------+------------+
| Net cash from investing activities | | (8,960) | (9,019) |
+------------------------------------------------+-------+------------+------------+
| | | | |
+------------------------------------------------+-------+------------+------------+
| Cash flows from financing activities | | | |
+------------------------------------------------+-------+------------+------------+
| Proceeds from borrowings | | 2,000 | 5,189 |
+------------------------------------------------+-------+------------+------------+
| Repayments of borrowings | | (5,000) | - |
+------------------------------------------------+-------+------------+------------+
| Repayment of principal under finance leases | | (13) | (10) |
+------------------------------------------------+-------+------------+------------+
| Interest paid | | (1,258) | (1,681) |
+------------------------------------------------+-------+------------+------------+
| | | | |
+------------------------------------------------+-------+------------+------------+
| Net cash from financing activities | | (4,271) | 3,498 |
+------------------------------------------------+-------+------------+------------+
| | | | |
+------------------------------------------------+-------+------------+------------+
| Effects of foreign exchange rates | | 523 | 124 |
+------------------------------------------------+-------+------------+------------+
| | | | |
+------------------------------------------------+-------+------------+------------+
| Net increase in cash and cash equivalents | | 5,411 | 5,288 |
+------------------------------------------------+-------+------------+------------+
| | | | |
+------------------------------------------------+-------+------------+------------+
| Opening cash and cash equivalents | | 4,944 | (344) |
+------------------------------------------------+-------+------------+------------+
| | | | |
+------------------------------------------------+-------+------------+------------+
| Closing cash and cash equivalents | 8 | 10,355 | 4,944 |
+------------------------------------------------+-------+------------+------------+
NOTES TO THE PRELIMINARY RESULTS
1. The consolidated financial statements of Games Workshop Group PLC are
prepared in accordance with International Financial Reporting Standards (IFRS)
and International Financial Reporting Interpretations Committee (IFRIC)
interpretations, that are adopted by the European Union and with those parts of
the Companies Act 2006 applicable to those companies reporting under IFRS.
2. These results for the year to 31 May 2009 together with the corresponding
amounts for the year to 1 June 2008 are extracts from the 2009 annual report and
do not constitute statutory accounts within the meaning of section 434 of the
Companies Act 2006.
The annual report for the year to 31 May 2009, on which the auditors have issued
a report that does not contain a statement under either section 498(2) or 498(3)
of the Companies Act 2006, will be posted to shareholders on 28 July 2009 and
will be delivered to the Registrar of Companies in due course. Copies will also
be available from Rachel Tongue, Games Workshop Group PLC, Willow Road, Lenton,
Nottingham NG7 2WS. This information is also available on the Company's website
at http://investor.games-workshop.com.
The annual general meeting will be held at Willow Road, Lenton, Nottingham, NG7
2WS at 10.00am on 17 September 2009.
The preliminary announcement is prepared in accordance with the Listing Rules of
the Financial Services Authority and accounting policies consistent with those
used in the 2008 annual report.
The preparation of the consolidated financial statements requires management to
make estimates and assumptions that affect the reported amounts of revenues,
expenses, assets and liabilities, and disclosure of contingencies at the balance
sheet date. If in future such estimates and assumptions, which are based on
management's best judgement at the date of the consolidated financial
statements, deviate from actual circumstances, the original estimates and
assumptions will be modified, as appropriate, in the period in which the
circumstances change. The following areas are considered of greater complexity
and/or particularly subject to the exercise of judgement:
+-----+--------------------------------------------------------------------+
| * | Management estimates and judgements are required in assessing the |
| | impairment of assets, particularly in relation to the forecasting |
| | of future cash flows and the discount rate applied to the cash |
| | flows. |
| | |
+-----+--------------------------------------------------------------------+
| * | Judgement is involved in assessing the exposures in the provisions |
| | (including inventory, bad debt and returns) and hence in setting |
| | the level of the required provisions. |
| | |
+-----+--------------------------------------------------------------------+
| * | Management estimates and judgements are required in assessing the |
| | recognition of deferred tax assets, particularly in relation to |
| | the timing and amount of future profits. |
| | |
+-----+--------------------------------------------------------------------+
3. Segmental analysis
The Group has one business segment, the Games Workshop Hobby. Geographical
segments represent the dominant source and nature of the Group's risk and
returns and is therefore provided below as the primary reporting format.
Year ended 31 May 2009
+----------------+-------------+---------+---------+---------+--------+-------------+---------+-------------+---------+---------+
| | Continental | United | North | Asia | Rest | Central/ | Service | Design | Royalty | Group |
| | Europe | Kingdom | America | Pacific | of | unallocated | centres | and | income | |
| | | | | | the | | | development | | |
| | | | | | world | | | | | |
+----------------+-------------+---------+---------+---------+--------+-------------+---------+-------------+---------+---------+
| | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+----------------+-------------+---------+---------+---------+--------+-------------+---------+-------------+---------+---------+
| Continuing | | | | | | | | | | |
+----------------+-------------+---------+---------+---------+--------+-------------+---------+-------------+---------+---------+
| Sales by | 42,340 | 46,537 | 27,152 | 9,677 | - | - | - | - | - | 125,706 |
| operation | | | | | | | | | | |
+----------------+-------------+---------+---------+---------+--------+-------------+---------+-------------+---------+---------+
| | | | | | | | | | | |
+----------------+-------------+---------+---------+---------+--------+-------------+---------+-------------+---------+---------+
| Sales by | 47,577 | 33,653 | 33,387 | 10,729 | 360 | - | - | - | - | 125,706 |
| location of | | | | | | | | | | |
| customers | | | | | | | | | | |
+----------------+-------------+---------+---------+---------+--------+-------------+---------+-------------+---------+---------+
| | | | | | | | | | | |
+----------------+-------------+---------+---------+---------+--------+-------------+---------+-------------+---------+---------+
| Operating | 8,896 | 8,995 | 822 | 778 | 85 | (6,032) | (4,941) | (3,060) | 3,471 | 9,014 |
| profit/segment | | | | | | | | | | |
| result by | | | | | | | | | | |
| location of | | | | | | | | | | |
| customers | | | | | | | | | | |
+----------------+-------------+---------+---------+---------+--------+-------------+---------+-------------+---------+---------+
Year ended 1 June 2008
+-----------------+-------------+---------+---------+---------+--------+-------------+---------+-------------+---------+---------+
| | Continental | United | North | Asia | Rest | Central/ | Service | Design | Royalty | Group |
| | Europe | Kingdom | America | Pacific | of | unallocated | centres | and | income | |
| | | | | | the | | | development | | |
| | | | | | world | | | | | |
+-----------------+-------------+---------+---------+---------+--------+-------------+---------+-------------+---------+---------+
| | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+-----------------+-------------+---------+---------+---------+--------+-------------+---------+-------------+---------+---------+
| Continuing | | | | | | | | | | |
+-----------------+-------------+---------+---------+---------+--------+-------------+---------+-------------+---------+---------+
| Sales by | 41,139 | 36,760 | 24,011 | 8,435 | - | - | - | - | - | 110,345 |
| operation | | | | | | | | | | |
+-----------------+-------------+---------+---------+---------+--------+-------------+---------+-------------+---------+---------+
| | | | | | | | | | | |
+-----------------+-------------+---------+---------+---------+--------+-------------+---------+-------------+---------+---------+
| Sales by | 43,091 | 31,056 | 26,844 | 9,080 | 274 | - | - | - | - | 110,345 |
| location of | | | | | | | | | | |
| customers | | | | | | | | | | |
+-----------------+-------------+---------+---------+---------+--------+-------------+---------+-------------+---------+---------+
| | | | | | | | | | | |
+-----------------+-------------+---------+---------+---------+--------+-------------+---------+-------------+---------+---------+
| Pre-exceptional | 7,648 | 7,338 | 610 | 207 | 110 | (5,235) | (4,532) | (2,965) | 1,736 | 4,917 |
| operating | | | | | | | | | | |
| profit/segment | | | | | | | | | | |
| result by | | | | | | | | | | |
| location of | | | | | | | | | | |
| customers | | | | | | | | | | |
+-----------------+-------------+---------+---------+---------+--------+-------------+---------+-------------+---------+---------+
| Exceptional | (382) | (1,453) | (568) | 2 | - | - | - | 36 | - | (2,365) |
| items | | | | | | | | | | |
+-----------------+-------------+---------+---------+---------+--------+-------------+---------+-------------+---------+---------+
| Operating | 7,266 | 5,885 | 42 | 209 | 110 | (5,235) | (4,532) | (2,929) | 1,736 | 2,552 |
| profit/segment | | | | | | | | | | |
| result by | | | | | | | | | | |
| location of | | | | | | | | | | |
| customers | | | | | | | | | | |
+-----------------+-------------+---------+---------+---------+--------+-------------+---------+-------------+---------+---------+
Service centres are established in the UK which provide support services (IT,
accounting, payroll, HR, production planning and supplier development) to
activities across the Group. The related costs which had previously been
reported as segmental costs, are now separately identified as service centre
costs to aid transparency.
Central/unallocated, service centres, design and development and royalty income
segment (costs)/income comprise the (costs)/income arising in the United Kingdom
that cannot be directly attributed to an individual geographical segment.
4. Earnings/(loss) per share
The calculation of basic earnings/(loss) per ordinary share has been based on
profit/(loss) attributable to equity shareholders of GBP5.5 million and GBP5.4
million for continuing operations (2008: GBP(0.7) million and GBP0.4 million for
continuing operations) and the weighted average number of shares in issue
throughout the year (2009: 31,129,000; 2008: 31,123,000).
Diluted earnings/(loss) per ordinary share is identical to basic earnings/(loss)
per ordinary share as the dilutive effect of share options for 2009 is 17,000
shares (2008: nil).
5. Income tax expense
+-----------------------------------------------------+---------+---------+
| Continuing operations | 2009 | 2008 |
+-----------------------------------------------------+---------+---------+
| | GBP000 | GBP000 |
+-----------------------------------------------------+---------+---------+
| | | |
+-----------------------------------------------------+---------+---------+
| Current taxation | | |
+-----------------------------------------------------+---------+---------+
| UK corporation tax | 2,309 | 56 |
+-----------------------------------------------------+---------+---------+
| Overseas tax | 1,480 | 819 |
+-----------------------------------------------------+---------+---------+
| | | |
+-----------------------------------------------------+---------+---------+
| Total current taxation | 3,789 | 875 |
+-----------------------------------------------------+---------+---------+
| | | |
+-----------------------------------------------------+---------+---------+
| Deferred taxation | (1,682) | (262) |
+-----------------------------------------------------+---------+---------+
| | | |
+-----------------------------------------------------+---------+---------+
| Income tax expense | 2,107 | 613 |
+-----------------------------------------------------+---------+---------+
+-----------------------------------------------------+---------+--------+
| Continuing operations | 2009 | 2008 |
+-----------------------------------------------------+---------+--------+
| | GBP000 | GBP000 |
+-----------------------------------------------------+---------+--------+
| | | |
+-----------------------------------------------------+---------+--------+
| Profit before taxation | 7,539 | 1,059 |
+-----------------------------------------------------+---------+--------+
| | | |
+-----------------------------------------------------+---------+--------+
| Profit before taxation multiplied by the standard | 2,111 | 318 |
| rate of corporation tax in the UK of 28% (2008: | | |
| 30%) | | |
+-----------------------------------------------------+---------+--------+
| Effects of: | | |
+-----------------------------------------------------+---------+--------+
| Expenses not deductible for tax purposes | 1,351 | 156 |
+-----------------------------------------------------+---------+--------+
| Recognition of asset held for sale | - | (148) |
+-----------------------------------------------------+---------+--------+
| Movement in deferred tax not recognised | (85) | (79) |
+-----------------------------------------------------+---------+--------+
| Deferred tax on losses now recognised | (2,489) | (400) |
+-----------------------------------------------------+---------+--------+
| Changes in tax rates | - | 95 |
+-----------------------------------------------------+---------+--------+
| Higher tax rates on overseas earnings | 370 | 348 |
+-----------------------------------------------------+---------+--------+
| Adjustments to tax charge in respect of previous | (152) | 323 |
| years | | |
+-----------------------------------------------------+---------+--------+
| Abolition of industrial buildings allowances | 1,001 | - |
+-----------------------------------------------------+---------+--------+
| | | |
+-----------------------------------------------------+---------+--------+
| Total tax charge for the year | 2,107 | 613 |
+-----------------------------------------------------+---------+--------+
6. No final dividend is proposed. There were no dividends paid in the year.
7. Consolidated statement of changes in shareholders' equity
+--------------+---------+---------+------------+-------------+----------+--+----------+----------+--------+
| | | | Other reserves | | Retained |
| | | | | | earnings |
+--------------+---------+---------+-------------------------------------+--+---------------------+
| | Called | Share | Capital | | | | | Profit |
| | up | | | | | | | |
+--------------+---------+---------+------------+-------------+----------+--+----------+----------+
| | share | premium | redemption | Translation | Other | | Hedging | and | Total |
+--------------+---------+---------+------------+-------------+----------+--+----------+----------+--------+
| | capital | account | reserve | reserve | reserve | | reserve | loss | equity |
+--------------+---------+---------+------------+-------------+----------+--+----------+----------+--------+
| | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | | GBP000 | GBP000 | GBP000 |
+--------------+---------+---------+------------+-------------+----------+--+----------+----------+--------+
| | | | | | | | | | |
+--------------+---------+---------+------------+-------------+----------+--+----------+----------+--------+
| As at 1 | 1,556 | 7,822 | 101 | 628 | (1,050) | | (677) | 21,146 | 29,526 |
| June 2008 | | | | | | | | | |
+--------------+---------+---------+------------+-------------+----------+--+----------+----------+--------+
| Exchange | - | - | - | 2,605 | - | | - | - | 2,605 |
| adjustments | | | | | | | | | |
+--------------+---------+---------+------------+-------------+----------+--+----------+----------+--------+
| Net | - | - | - | (621) | - | | - | - | (621) |
| investment | | | | | | | | | |
| hedge | | | | | | | | | |
+--------------+---------+---------+------------+-------------+----------+--+----------+----------+--------+
| Profit | - | - | - | - | - | | - | 5,550 | 5,550 |
| attributable | | | | | | | | | |
| to equity | | | | | | | | | |
| shareholders | | | | | | | | | |
+--------------+---------+---------+------------+-------------+----------+--+----------+----------+--------+
| Share-based | - | - | - | - | - | | - | 161 | 161 |
| payments | | | | | | | | | |
+--------------+---------+---------+------------+-------------+----------+--+----------+----------+--------+
| Current | - | - | - | 174 | - | | | - | 174 |
| tax | | | | | | | | | |
+--------------+---------+---------+------------+-------------+----------+--+----------+----------+--------+
| Deferred | - | - | - | - | - | | (232) | - | (232) |
| tax | | | | | | | | | |
+--------------+---------+---------+------------+-------------+----------+--+----------+----------+--------+
| Cash flow | | | | | | | | | |
| hedges: | | | | | | | | | |
+--------------+---------+---------+------------+-------------+----------+--+----------+----------+--------+
| - fair | - | - | - | - | - | | (112) | - | (112) |
| value | | | | | | | | | |
| losses in | | | | | | | | | |
| the year | | | | | | | | | |
+--------------+---------+---------+------------+-------------+----------+--+----------+----------+--------+
| - | - | - | - | - | - | | 940 | - | 940 |
| transfers | | | | | | | | | |
| to net | | | | | | | | | |
| profit | | | | | | | | | |
+--------------+---------+---------+------------+-------------+----------+--+----------+----------+--------+
| As at 31 | 1,556 | 7,822 | 101 | 2,786 | (1,050) | | (81) | 26,857 | 37,991 |
| May 2009 | | | | | | | | | |
+--------------+---------+---------+------------+-------------+----------+--+----------+----------+--------+
+--------------+---------+---------+------------+-------------+----------+--+----------+------+--------+--------+---------+
| | | | Other reserves | | Retained earnings | |
+--------------+---------+---------+-------------------------------------+--+-----------------------------------+---------+
| | Called | Share | Capital | | | | | | Profit | |
| | up | | | | | | | | | |
+--------------+---------+---------+------------+-------------+----------+--+-----------------+--------+--------+---------+
| | share | premium | redemption | Translation | Other | | Hedging | Treasury | and | Total |
+--------------+---------+---------+------------+-------------+----------+--+----------+---------------+--------+---------+
| | capital | account | reserve | reserve | reserve | | reserve | shares | loss | equity |
+--------------+---------+---------+------------+-------------+----------+--+----------+---------------+--------+---------+
| | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | | GBP000 | GBP000 | GBP000 | GBP000 |
+--------------+---------+---------+------------+-------------+----------+--+----------+---------------+--------+---------+
| | | | | | | | | | | |
+--------------+---------+---------+------------+-------------+----------+--+----------+---------------+--------+---------+
| As at 3 | 1,556 | 7,822 | 101 | (261) | (1,050) | | (62) | (49) | 21,800 | 29,857 |
| June 2007 | | | | | | | | | | |
+--------------+---------+---------+------------+-------------+----------+--+----------+---------------+--------+---------+
| Exchange | - | - | - | 1,626 | - | | - | - | - | 1,626 |
| adjustments | | | | | | | | | | |
+--------------+---------+---------+------------+-------------+----------+--+----------+---------------+--------+---------+
| Net | - | - | - | (737) | - | | - | - | - | (737) |
| investment | | | | | | | | | | |
| hedge | | | | | | | | | | |
+--------------+---------+---------+------------+-------------+----------+--+----------+---------------+--------+---------+
| Loss | - | - | - | - | - | | - | - | (740) | (740) |
| attributable | | | | | | | | | | |
| to equity | | | | | | | | | | |
| shareholders | | | | | | | | | | |
+--------------+---------+---------+------------+-------------+----------+--+----------+---------------+--------+---------+
| Share-based | - | - | - | - | - | | - | - | 135 | 135 |
| payments | | | | | | | | | | |
+--------------+---------+---------+------------+-------------+----------+--+----------+---------------+--------+---------+
| Shares | - | - | - | - | - | | - | 49 | (49) | - |
| vested | | | | | | | | | | |
+--------------+---------+---------+------------+-------------+----------+--+----------+---------------+--------+---------+
| Deferred | - | - | - | - | - | | 237 | - | - | 237 |
| tax | | | | | | | | | | |
+--------------+---------+---------+------------+-------------+----------+--+----------+---------------+--------+---------+
| Cash flow | | | | | | | | | | |
| hedges: | | | | | | | | | | |
+--------------+---------+---------+------------+-------------+----------+--+----------+---------------+--------+---------+
| - fair | - | - | - | - | - | | (940) | - | - | (940) |
| value | | | | | | | | | | |
| losses in | | | | | | | | | | |
| the year | | | | | | | | | | |
+--------------+---------+---------+------------+-------------+----------+--+----------+---------------+--------+---------+
| - | - | - | - | - | - | | 88 | - | - | 88 |
| transfers | | | | | | | | | | |
| to net | | | | | | | | | | |
| profit | | | | | | | | | | |
+--------------+---------+---------+------------+-------------+----------+--+----------+---------------+--------+---------+
| As at 1 | 1,556 | 7,822 | 101 | 628 | (1,050) | | (677) | - | 21,146 | 29,526 |
| June 2008 | | | | | | | | | | |
+--------------+---------+---------+------------+-------------+----------+--+----------+------+--------+--------+---------+
8. Analysis of net debt
+-------------------------------+----------+----------+----------+----------+
| | As at | | | As at |
+-------------------------------+----------+----------+----------+----------+
| | 1 June | Cash | Exchange | 31 May |
+-------------------------------+----------+----------+----------+----------+
| | 2008 | flow | Movement | 2009 |
+-------------------------------+----------+----------+----------+----------+
| | GBP000 | GBP000 | GBP000 | GBP000 |
+-------------------------------+----------+----------+----------+----------+
| | | | | |
+-------------------------------+----------+----------+----------+----------+
| Cash at bank and in hand | 7,723 | 1,999 | 633 | 10,355 |
+-------------------------------+----------+----------+----------+----------+
| Current borrowings - bank | (2,779) | 2,889 | (110) | - |
| overdraft | | | | |
+-------------------------------+----------+----------+----------+----------+
| | | | | |
+-------------------------------+----------+----------+----------+----------+
| Cash and cash equivalents | 4,944 | 4,888 | 523 | 10,355 |
+-------------------------------+----------+----------+----------+----------+
| | | | | |
+-------------------------------+----------+----------+----------+----------+
| Non-current borrowings | (15,000) | 3,000 | - | (12,000) |
+-------------------------------+----------+----------+----------+----------+
| Finance leases | (13) | 13 | (2) | (2) |
+-------------------------------+----------+----------+----------+----------+
| | | | | |
+-------------------------------+----------+----------+----------+----------+
| Net debt | (10,069) | 7,901 | 521 | (1,647) |
+-------------------------------+----------+----------+----------+----------+
9. Reconciliation of profit to net cash from operating activities
+---------------------------------------------------+----------+----------+
| | 2009 | 2008 |
+---------------------------------------------------+----------+----------+
| | GBP000 | GBP000 |
+---------------------------------------------------+----------+----------+
| | | |
+---------------------------------------------------+----------+----------+
| Operating profit - continuing operations | 9,014 | 2,552 |
+---------------------------------------------------+----------+----------+
| Operating profit/(loss) - discontinued operations | 129 | (1,106) |
+---------------------------------------------------+----------+----------+
| Depreciation of property, plant and equipment | 7,055 | 6,778 |
+---------------------------------------------------+----------+----------+
| Net impairment charge/(reversal) on property, | 167 | (52) |
| plant and equipment | | |
+---------------------------------------------------+----------+----------+
| Loss on disposal of property, plant and equipment | - | 210 |
+---------------------------------------------------+----------+----------+
| Loss on disposal of intangible assets | 39 | - |
+---------------------------------------------------+----------+----------+
| Profit on disposal of asset held for sale | (36) | - |
+---------------------------------------------------+----------+----------+
| Loss on disposal of goodwill | - | 922 |
+---------------------------------------------------+----------+----------+
| Amortisation of capitalised development costs | 2,269 | 2,236 |
+---------------------------------------------------+----------+----------+
| Amortisation of other intangibles | 1,281 | 753 |
+---------------------------------------------------+----------+----------+
| Net fair value (gains)/losses on derivative | (226) | 421 |
| financial instruments | | |
+---------------------------------------------------+----------+----------+
| Share-based payments | 161 | 135 |
+---------------------------------------------------+----------+----------+
| Changes in working capital: | | |
+---------------------------------------------------+----------+----------+
| -Decrease in inventories | 386 | 811 |
+---------------------------------------------------+----------+----------+
| -Decrease/(increase) in trade and other | 393 | (847) |
| receivables | | |
+---------------------------------------------------+----------+----------+
| -(Decrease)/increase in trade and other payables | (1,713) | 480 |
+---------------------------------------------------+----------+----------+
| -Decrease in provisions | (17) | (2,196) |
+---------------------------------------------------+----------+----------+
| | | |
+---------------------------------------------------+----------+----------+
| Net cash from operating activities | 18,902 | 11,097 |
+---------------------------------------------------+----------+----------+
10. Exceptional items
Exceptional costs of GBP2,365,000 were incurred in the year ended 1 June 2008 in
respect of the cost reduction programme announced in May 2007. As part of this
programme the following costs were incurred in the year ended 1 June 2008:
GBP250,000 in closing loss making Hobby centres, GBP1,065,000 in rationalising
the manufacturing and supply chain and GBP1,050,000 in simplifying the support
infrastructure. GBP835,000, GBP619,000, GBP947,000 and GBP(36,000) was
charged/(credited) to cost of sales, selling costs, administrative costs and
design and development costs respectively. Costs incurred in the year ended 31
May 2009 in respect of ongoing redundancies, impairments and loss making Hobby
centres were GBP1,370,000, GBP167,000 and GBP807,000 respectively.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR ILFLLDSIDFIA
|