Final Results
July 25 2003 - 10:04AM
UK Regulatory
RNS Number:9803N
Creightons PLC
25 July 2003
CREIGHTONS PLC
("Creightons" or "the Company" or "the Group")
Chairman's statement
Review of the year
This year has seen the Company continue to consolidate its manufacturing
operation on the reduced Storrington site, ensuring that we achieve improved
product costs through increased manufacturing efficiencies.
Towards the end of the year, the Directors became aware of an exceptional
opportunity to expand the Company's operation in line with the policy of
building a successful and profitable business. Nemesis Toiletries Ltd had been
put into administration in February, and the Company made an offer to purchase
some of the Potter and Moore Brands and Intellectual Property Rights that had
therefore become available.
Potter and Moore had been an old and well established business operating in
similar sectors and with complimentary products to Creightons, and shareholders
will recall that under a previous board, Creightons made a costly yet abortive
offer to purchase this business several years ago.
The Company's offer to the Administrator was accepted, and separately, a
subsidiary of the Company has negotiated to take leases on some of the premises
and purchase manufacturing plant and equipment used for the production of Potter
and Moore products in Peterborough. These operations have been brought together
in a new subsidiary of Creightons, Potter & Moore Innovations, which will
operate the acquired business from the Peterborough site.
The two operations, Creightons based at Storrington and Potter & Moore
Innovations based in Peterborough, will continue to operate separately, with
their own marketing, selling and product development and innovation specialists
so that they can continue to provide the highest quality of product and customer
service to their respective clients. Although the Board will seek to achieve
savings through synergies for non-customer facing functions, it is committed to
achieving and maintaining a high standard of customer service and product
quality.
Financial results
Consolidated Group Sales this year were #3,846,000 (2002: #4,421,000), including
a contribution of #366,000 (2002: #nil) sales by the new business of Potter and
Moore Innovations Ltd. The decline in sales through Creightons was almost wholly
due to destocking as a consequence of changes in distribution and purchasing
policies at Bodyshop, one of the Company's largest customers, as they shortened
their supply chain and reduced internal stock holdings. This resulted in a
reduction in sales to Bodyshop in the region of #1m.
The Company has continued to pursue low-cost producer status and limit overheads
to the minimum required to provide customers with the quality of service and
delivery they require. To this end, further additional excess manufacturing and
warehousing capacity has been eliminated, with the facilities made available for
third-party rental, thereby maximising as far as possible the Company's return
on its assets.
The Potter and Moore Innovations trading consolidated into the Group's results
contributed a profit of #71,000 to reduce the otherwise virtually flat Group
operating loss to #23,000 (2002: #78,000 loss).
Current year developments
The Board intends to continue to operate the two businesses separately, whilst
introducing cost saving and efficiency improvement measures similar to those
that we instigated at Creightons when we took over from the previous management
and Board. These proved very successful in reducing the Company's losses,
focusing management and product development efforts into improved performance
through elimination of unprofitable products and practices.
A number of new and potentially exciting business opportunities are currently
being progressed. The Company is also continuing to seek new and innovative
openings for joint ventures in marketing, retailing and manufacturing, such as
the opportunity with Potter & Moore that came along last February. The Group
continues to operate within its agreed funding facility.
The Board would like to thank all its employees for their continued hard work
and dedication over the past year, and extend a warm welcome to the Potter &
Moore Innovations employees based in Peterborough.
William McIlroy
Chairman 24th July 2003
Consolidated profit and loss account
For the year ended 31 March 2003
2003 2003 2002 2002
Note #'000 #'000 #'000 #'000
Turnover 3,846 4,421
Cost of (2,203) (2,892
sales --------- --------
Gross 1,643 1,529
Profit
Operating (1,686) (1,682)
expenses
Other 20 75
operating ----------- -----------
income
Total (1,666) (1,607)
operating --------- ---------
expenses
Operating (23) (78)
Loss
Net interest (59) (70)
payable ----------- -----------
Loss on (82) (148)
ordinary
activities
before
taxation
Tax on loss - -
on ordinary ----------- -----------
activities
Loss on (82) (148)
ordinary ----------- ----------
activities
after
taxation
Retained (82) (148)
loss for the ----------- ----------
year
Basic loss 1 (0.15p) (0.29p)
per share --------- ---------
Diluted loss 1 (0.14p) (0.29p)
per share --------- ---------
The turnover and operating loss arose from continuing operations.
The Group had no gains or losses other than the above results.
There is no difference between the results shown above and their historical
cost.
Note to consolidated profit and loss Account
1. *Loss per share
The calculation of the basic loss per share is based on the loss after taxation
of #82,000 (2002 - #148,000) and 54,275,876 (2002 - 52,158,719) ordinary shares,
the weighted average number of shares in issue during the period. The
calculation of the diluted loss per share is based on the basic loss per share,
adjusted for the effect of all dilutive options.
Consolidated balance sheet
At 31 March 2003
2003 2003 2002 2002
#'000 #'000 #'000 #'000
Fixed assets
Tangible assets 1,813 1,895
Intangible assets 13 -
Goodwill 345 -
--------- ----------
2,171 1,895
Current assets
Stocks 647 645
Debtors 1,167 892
Cash at bank 9 16
------- --------
1,823 1,553
Creditors: amount (2,585) (1,953)
falling due within one --------- ---------
year
Net current (762) (400)
liabilities
Total assets less 1,409 1,495
current liabilities
Creditors: amount
falling due after more
than one year - (4)
--------
Net Assets 1,409 1,491
------- -------
Capital and Reserves
Called up share 543 543
capital
Share premium account 1229 1229
Capital redemption 18 18
reserve
Capital reserve 7 7
Special Reserve 13 13
Profit and loss (401) (319)
account ------- -------
Equity shareholders 1,409 1,491
funds ------- -------
Consolidated statement of cash flow
For the year ended 31 March 2003
2003 2003 2002 2002
Note #'000 #'000 #'000 #'000
Cash from operating 1 (207) (294)
activities
Returns on investments 2 (59) (70)
and servicing of
finance
Taxation - -
Capital expenditure 3 (496) 1,190
and financial ------- -------
investments
Cash (outflow)/inflow
before management of
Liquid resources and (762) 826
financing
Financing 4 726 (355)
-------- --------
(Decrease)/increase in (36) 471
cash in the year -------- --------
Reconciliation of net
cash flow to movement
in net debt
(Decrease)/increase in (36) 471
cash in the year
Cash outflow from 16 425
repayment of debt --------- -------
(20) 896
New loans (742) -
------- -----------
Movement in net debt (762) 896
in the year
Net debt at the start (1,038) (1,934)
of the rear --------- ---------
Net debt at the end of (1,800) (1,038)
the year --------- ---------
The preliminary statement of results has been agreed with the Company's
auditors, Chantrey Vellacott DFK, who have indicated that they will be giving an
unqualified opinion in their report on the statutory financial statements, which
will be dispatched to shareholders.
The directors are not proposing that a dividend payment be made.
Notes to consolidated statement of cash flow
For the year ended 31 March 2003
1. *Reconciliation of operating loss to operating cash flow
2003 2003 2002 2002
#'000 #'000 #'000 #'000
Operating loss (23) (78)
Depreciation charges 221 246
Amortisation of intangible 2 -
assets
(Profit) on disposal of fixed (3) -
assets
(Increase) in stocks (2) (66)
(Increase) in debtors (275) (96)
(Decrease) in creditors (127) (300)
------- -------
Net cash (outflow) from (207) (294)
operations ------- -------
2. *Returns on investments and servicing of finance
2003 2003 2002 2002
#'000 #'000 #'000 #'000
Interest received 1 1
Interest paid (58) (60)
Interest element of HP (2) (11)
payments --------- --------
---
Net cash (outflow) for (59) (70)
returns on investments and -------- --------
servicing of finance
3. *Capital expenditure and financial investments
2003 2003 2002 2002
#'000 #'000 #'000 #'000
Purchase of tangible fixed (150) (53)
assets
Purchase of intangible (15) -
fixed assets
Purchased goodwill (345) -
Sale of property - 1240
Sale of other tangible 14 3
fixed assets --------- ----------
Net cash (outflow)/inflow (496) 1190
from capital expenditure ------- -------
and financial investments
4. *Financing
2003 2003 2002 2002
#'000 #'000 #'000 #'000
Issue of ordinary share - 70
capital
Other loans 742 -
Repayments of amounts - (410)
borrowed
Capital element of HP (16) (15)
payments --------- ---------
Net cash inflow/(outflow) 726 (355)
from financing -------- --------
5. *Analysis of changes in net debt
At 1 April Cash flow At 31 March
2002 2003
#'000 #'000 #'000
Cash at bank and in hand 16 (7) 9
Overdrafts (1,034) (29) (1,063)
--------- --------- ---------
(1,018) (36) (1,054)
--------- ---------- ---------
Debt due within one year - (742) (742)
HP contracts (20) 16 (4)
----------- ---------- -------------
(20) (726) (746)
------------ ---------- -----------
Net debt (1,038) (762) (1,800)
--------- ---------- ---------
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