RNS Number:1400P
Silk Industries PLC
28 August 2003
SILK INDUSTRIES PLC
Preliminary Announcement of Results for the Year ended 30 April 2003
Silk Industries designs, manufactures and imports silk fabrics for neckwear,
fashion, and soft furnishing. The weaving division is based in Sudbury,
Suffolk, and the print division near Macclesfield. The company's luxurious
products are used by, amongst others, Aquascutum, Brooks Brothers, Burberry,
Drakes, Duchamp, Etro, Faconnable, Gieves & Hawkes, Hackett, Liberty, Paul
Smith, Prada, Ralph Lauren, Richard James, Robert Talbott, Thomas Pink and
Turnbull & Asser.
YEAR IN BRIEF
* Turnover - continuing operations #11,226,000 (2002:#12,155,000)
* Operating profit - continuing operations #1,266,000 (2002: #1,474,000)
* Profit after tax #867,000 (2002:#904,000)
* Earnings per share 7.0p (2002: 7.3p)
* Cash inflow before financing #2,832,000 (2002: #1,197,000)
* Cash inflow reduced net debt from #3,690,000 to #858,000
FOR FURTHER INFORMATION PLEASE CONTACT:
Silk Industries PLC David Tooth Chairman 01787 467905
Clive Reeks Finance Director 01787 467905
CHAIRMAN'S STATEMENT
As I anticipated in my interim statement, the second half of the year presented
the group with difficult trading conditions, which resulted in a downturn for
the full year. Turnover at #11,226,000 compared with #12,155,000 last year.
Operating profit at #1,266,000 compared with #1,474,000 last year. Reduced
interest charges and an absence of exceptional costs meant that profit after tax
was #867,000 compared with #904,000 last year. Earnings per share at 7.0p
compared with 7.3p last year.
Operational Review
Weaving Division
The most significant feature of the year was the rather rapid loss in market
confidence, particularly in the USA, where very poor trading for the Spring 2003
season was reported, and which impacted on the group's second half. Given world
events, this is not surprising. This lack of confidence has carried over into
initial orders for Autumn, whereas sampling activity for Spring 2004 has been
very strong. In general, and heat waves notwithstanding, the tie industry is
performing well globally, but has been subject to the effects of the Iraq war
and stock market uncertainty.
The installation of two electronic jacquard looms in January continued the loom
replacement programme, gradually building up the division's capacity. A further
four looms were commissioned at the start of the new financial year, and are now
in full production.
Print Division
Our niche printing division has now established itself as a significant player
in the neckwear and accessory industry, with order books far in excess of last
year. Its capacity is limited, however, and is totally dependent upon the
training and skill of hand operatives. During the current year a further table
is being utilised, and some of the production processes streamlined.
EMPLOYEES
I would like to pay tribute to the group's dedicated and hardworking employees
and agents, without whose skill, artistry and vision we would not have a
business. I thank them for keeping the group at the forefront of the industry.
OUTLOOK
The outlook for the silk businesses remains unsettled; the return to tie
wearing remains a feature of men's fashion, but that is balanced both by the
continued acceptance in many spheres of a casual dress code and by depressed
economic conditions. Nevertheless, Silk Industries is a beacon of quality,
fashion and style, and will flourish strongly so long as it continues to place
customer service first.
MANAGEMENT BUY-OUT
The board of directors has long felt that Silk Industries does not fit happily
in the quoted sector. The company is relatively small, it operates in a niche
sector and its shares are illiquid. As announced in July, discussions are
underway between our advisers, the directors and certain management of the
company towards a potential offer being made for Silk Industries. This will
facilitate an exit for non-management shareholders and will take the company
private. My aim is to create an ownership structure involving a wide spectrum
of management across the group. I believe this will give the group the best
long-term prospects for integrity and growth, whilst providing an exit for our
external shareholders who have supported us over the years.
Discussions and negotiations involving various advisors are at a final stage and
an announcement detailing the proposals can be expected shortly.
David Tooth
Executive Chairman
28 August 2003
CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the year ended 30 April 2003
2003 2002
#'000 #'000
Turnover
Continuing operations 11,226 12,155
Discontinued operations - 331
11,226 12,486
Operating Profit/(Loss)
Continuing operations 1,266 1,474
Discontinued operations - (152)
Release of provision - 152
1,266 1,474
Exceptional Items
Discontinued operations
Provision for costs of closure of operation - (125)
Profit before Interest 1,266 1,349
Interest 154 293
Profit on Ordinary Activities before Taxation 1,112 1,056
Tax charge on profit on ordinary activities 245 152
Profit on ordinary activities after taxation credited to 867 904
reserves
Earnings per ordinary share 7.0p 7.3p
Diluted earnings per ordinary share 7.0p 7.3p
Earnings and diluted earnings per ordinary share were calculated on the results
for the year after tax of #867,000 profit (2002: #904,000) and 12,343,086 (2002:
12,312,449) shares being the average number in issue throughout the year.
There are no recognised gains and losses for the current financial year and
preceding financial year other than the profit of #867,000 (2002: #904,000)
shown above.
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 30 April 2003
2003 2002
#'000 #'000
Cash Inflow from Operating Activities 1,575 1,712
Returns on Investments and Servicing of Finance
Interest received 7 4
Interest paid (144) (273)
Finance lease interest payments (17) (24)
(154) (293)
Ordinary Shares Issued 9 -
Corporation Tax Paid (52) -
Capital Expenditure
Purchase of fixed assets (421) (283)
Sale of fixed assets - 61
Sale of vacant site 1,875 -
1,454 (222)
Inflow before financing 2,832 1,197
Financing
Repayment of bank loan (1,867) (267)
Finance lease capital payments (165) (157)
(2,032) (424)
Increase in Cash 800 773
BALANCE SHEETS
As at 30 April 2003
Group Company
2003 2002 2003 2002
#'000 #'000 #'000 #'000
Fixed Assets
Tangible assets 3,561 3,573 3,561 3,573
Investments - - 830 818
3,561 3,573 4,391 4,391
Current Assets
Stocks 1,609 2,075 1,571 2,010
Tangible asset awaiting sale - 1,875 - 1,875
Debtors 2,464 2,437 2,409 2,231
Cash at bank and in hand 2 2 2 2
4,075 6,389 3,982 6,118
Creditors: amounts falling due within one year 2,376 4,003 3,071 4,677
Net current assets 1,699 2,386 911 1,441
Total Assets less Current Liabilities 5,260 5,959 5,302 5,832
Creditors: amounts falling due after more than one year 82 1,789 82 1,789
Provisions for Liabilities and Charges 212 80 212 80
4,966 4,090 5,008 3,963
Capital and Reserves
Called up share capital 1,235 1,231 1,235 1,231
Share premium account 679 674 679 674
Capital redemption reserve 1,105 1,105 1,105 1,105
Profit and loss account 1,947 1,080 1,989 953
Equity Shareholders' Funds 4,966 4,090 5,008 3,963
Notes:
1. The financial information set out above does not
constitute the company's statutory accounts for the year to 30 April 2003 or the
year ended 30 April 2002 but is derived from those accounts. Statutory accounts
for 2002 have been delivered to the Registrar of Companies and those for 2003
will be delivered following the Company's Annual General Meeting. The auditors
have reported on those accounts; their reports were unqualified and did not
contain statements under section 237 (2) or (3) of the Companies Act 1985.
2. The Board is not recommending payment of a final dividend
(2002: nil) and no interim dividend was paid (2002: nil).
3. The Annual Report and Accounts will be despatched to
shareholders in due course and will be available from the Company Secretary at
the company's registered office, Gregory Mills, Sudbury, Suffolk, CO10 1BB.
This information is provided by RNS
The company news service from the London Stock Exchange
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