TIDMLEE
RNS Number : 9055C
Lees Foods Plc
08 May 2012
LEES FOODS Plc ("Lees" or the "Company")
Preliminary results for the year ended 31st December 2011
Highlights
-- Sales up 8.9% to GBP20.3m (2010 : GBP18.7m)
-- 6.1% increase in pre-tax profit* to GBP1.09m (2010 : GBP1.03m)
-- Gross margin reduced to 33.1% (2010 : 33.8%)
-- Basic earnings per share increased to 31.94p (2010 : 29.28p)
*Pre-tax profit is stated prior to share based payment
deductions
Enquiries
Lees Foods Plc 01236 441 600
Clive Miquel - Chief Executive
David Simson - Finance Director
Shore Capital and Corporate - Nomad and Broker 0207 408 4090
Stephane Auton/Patrick Castle
Chief Executive's Report
I am pleased to report that our profits before tax and share
based payments have increased to approximately GBP1.09 million
(2010 GBP1.03 million). This was achieved through an 8.9% growth in
sales with sales turnover reaching GBP20.3 million (2010 GBP18.7
million). This increase was achieved across a number of customers
and categories.
The higher level of turnover was balanced by an overall
reduction in our gross margin from approximately 33.8% to
approximately 33.1%, caused by significantly higher input prices.
In January 2011, I referred to the cost increases that we would be
facing in 2011, due to the general rise in world-wide commodity
prices and the specific cost increases in our raw materials and
packaging. The steps we have taken to combat the impact of these
cost increases have been successful in mitigating the effect of
these cost increases during 2011. These steps included a programme
of continuous investment in our plant to drive production
efficiencies, a strategic review of our product packaging that has
resulted in a meaningful reduction in packaging usage, and targeted
price increases across our customer base for our range of Lees and
Waverley products.
Successful and careful cash management, particularly around the
lead up to the year end, meant the final year end cash position was
GBP2.02m (2010 GBP1.02m). The current cash position, which includes
the payments received from HMRC announced on 27 January 2012, is
slightly below the level at 31 December 2011.
Protecting margins through managing the impact of considerable
ingredient and packaging cost increases continues to be our main
focus. The cost increases we face in 2012 on two of our key
ingredients, sugar and egg, are significant. In order to meet the
current challenge of rising ingredient costs, it is vitally
important that we successfully introduce new products at improved
margin levels to continue our profitable growth. In this regard,
during 2011 we launched Lees mini meringue cake decorations which
take us into a new product area with our retail customers.
Offer for the Company
On 10 April 2012, Randotte (No. 555) Limited announced an offer
by way of a scheme of arrangement for Lees Foods plc. As stated in
Part 1 of the Scheme Document, 'Letter from the Board of Lees Foods
plc', posted to shareholders on 19 April 2012, the Directors stated
that "the Company would be better placed as a private company given
the ongoing costs associated with being on AIM and the time demands
on key members of the team associated with the listing. The Board
also believes that the size of the Company and the lack of
liquidity in its shares do not make it suited to being admitted to
trading on AIM."
Dr Chris Greig
It was with great sadness that we said goodbye to our
Non-executive Chairman, Dr Chris Greig, who passed away earlier
this year. Chris made a terrific contribution to the Lees business
and he bravely continued to fulfil his role fully until the very
end. His knowledge, experience and friendship will be sadly
missed.
Clive Miquel
Chief Executive
Date: 8 May 2012
LEES FOODS Plc
Consolidated Income Statement
For the year ended 31 December 2011
2011 2010
GBP GBP
Revenue 20,300,494 18,648,443
Cost of sales (13,587,246) (12,350,567)
-------------- --------------
Gross profit 6,713,248 6,297,876
Selling and distribution costs (3,207,210) (2,990,768)
Administrative costs (2,416,412) (2,272,876)
Share based payments (100,409) (79,416)
Other operating income 16,240 16,540
-------------- --------------
(5,707,791) (5,326,520)
-------------- --------------
Operating profit 1,005,457 971,356
Finance Income 35,284 43,576
Finance costs (48,661) (64,964)
-------------- --------------
Profit before Tax 992,080 949,968
Tax (214,230) (253,863)
-------------- --------------
Profit for the year 777,850 696,105
Earnings per Share
Basic (pence per share) 31.94 29.28
Diluted (pence per share) 31.81 29.01
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2011
Profit for the period / Total comprehensive
income 777,850 696,105
Attributable to :
Owners of the parent company 777,850 696,105
LEES FOODS Plc
Consolidated Statement of Financial Position
As at 31 December 2011
2011 2010
GBP GBP
Non-Current Assets
Intangible assets 1,803,414 1,803,414
Property, plant and equipment 2,256,012 2,325,500
-------------- --------------
4,059,426 4,128,914
Current Assets
Inventories 1,623,368 1,448,951
Trade and other receivables 3,090,634 2,976,589
Cash at bank and in hand 2,019,280 1,016,568
-------------- --------------
6,733,282 5,442,108
Current liabilities
Trade and other payables (4,810,701) (4,259,593)
Current tax liabilities (105,813) (157,809)
-------------- --------------
Net Current Assets 1,816,768 1,024,706
Total Assets less Current Liabilities 5,876,194 5,153,620
Non-current liabilities
Other payables (228,659) (171,444)
Accruals and deferred income (80,432) (96,672)
Provisions for Liabilities
Deferred tax (189,830) (239,424)
-------------- --------------
5,377,273 4,646,080
Equity
Called up share capital 2,444,751 2,414,751
Share premium account 833,512 833,512
Share-based payment reserve 64,152 51,903
Capital redemption reserve 65,000 65,000
Retained earnings 1,502,551 901,767
Merger reserve 579,934 579,934
Employee Share Ownership Trust (112,627) (200,787)
-------------- --------------
Total Equity Shareholders' Funds 5,377,273 4,646,080
LEES FOODS Plc
Consolidated Statement of Cash Flows
For the year ended 31 December 2011
2011 2010
GBP GBP
Net cash inflow from operating activities 1,381,414 1,289,898
-------------- --------------
Investing activities
Interest received 35,284 43,576
Proceeds on disposal of property, plant and equipment 10,964 5,250
Purchases of property, plant and equipment (157,831) (341,361)
-------------- --------------
Net cash used in investing activities (111,583) (292,535)
-------------- --------------
Financing activities
Dividends paid (177,065) (162,321)
Repayment of borrowings - (125,000)
Repayment of obligations under finance leases (120,054) (78,262)
Proceeds from issuance of share capital 30,000 10,000
-------------- --------------
Net cash used in financing activities (267,119) (355,583)
-------------- --------------
Net increase in cash and cash equivalents 1,002,712 641,780
Cash and cash equivalents at beginning of year 1,016,568 374,788
-------------- --------------
Cash and cash equivalents at end of year 2,019,280 1,016,568
Cash and cash equivalents
Bank and cash in hand 2,019,280 1,016,568
LEES FOODS Plc
Consolidated Statement of Cash Flows (continued)
For the year ended 31 December 2011
2011 2010
GBP GBP
Profit from operations 1,005,457 971,356
Adjustment for:
Depreciation of property, plant and equipment 433,096 387,911
Loss / (gain) on disposal of property, plant and equipment 46,134 (413)
Development grant release (16,240) (16,540)
ESOP shares vested unconditionally with employees 88,160 88,160
Share based payments 12,249 (8,744)
-------------- --------------
Operating cash flows before movements in working capital 1,568,856 1,421,730
Increase in inventories (174,417) (226,126)
(Increase)/decrease in receivables (114,045) 9,511
Increase in payables 465,502 411,979
Income taxes paid (315,821) (262,232)
Interest paid - bank overdraft and loan (31,157) (47,134)
Interest paid - HP and finance lease (17,504) (17,830)
-------------- --------------
Net cash flow from operating activities 1,381,414 1,289,898
LEES FOODS Plc
Notes to the Consolidated Financial Statements
For the year ended 31 December 2011
1. Accounting Policies
Statement of compliance
The financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRSs) issued by the
International Accounting Standards Board, International Financial
Reporting Interpretations Committee (IFRIC) interpretations
endorsed by the European Union and the requirements of the
Companies Act 2006 applicable to companies reporting under
IFRS.
Basis of preparation
The financial statements have been prepared on the historical
cost basis. Historical cost is generally based on the fair value of
the consideration given in exchange for assets. The functional and
presentational currency of the Group is Sterling.
Going concern
The Company's business activities, together with the factors
likely to affect future performance, are set out in the Chief
Executives Report. In addition, note 19 to the financial statements
includes the Company's policies for managing capital and its
exposures to interest rate risk, credit risk and liquidity
risk.
The company has no long term debt, has significant cash
resources, is cash generative and has a diversified customer base.
As a consequence, the directors believe that the company is well
placed to manage its business risks and has adequate resources to
continue in operational existence for the foreseeable future. Thus
they continue to adopt the going concern basis of accounting in
preparing the annual financial statements.
Standards affecting presentation and disclosure
In the current year, the following new and revised Standards
have been adopted but have not had any material impact on the
amounts reported in these financial statements:
IFRS 1 (amended 2010) Additional exemptions for first time adopters
IFRS 3 (amended 2010) Business combinations
IFRS 7(amended 2010) Financial instruments: disclosures
IAS 1 (amended 2010) Presentation of financial statements
IAS 21 (amended 2010) The effects of foreign exchange rates
IAS 24 (revised 2009) Related party disclosures
IAS 27 Consolidated and separate financial statements
IAS 34 (amended 2010) Interim financial reporting
IFRIC 19 Extinguishing financial liabilities with equity instruments
LEES FOODS Plc
Notes to the Consolidated Financial Statements
For the year ended 31 December 2011
1. Accounting Policies (continued)
Standards affecting presentation and disclosure (continued)
At the date of authorisation of the financial statements, the
following Standards and Interpretations which have not been applied
in the financial statements were in issue but not yet effective
(and in some cases had not yet been adopted by the EU):
IFRS 1 (amended 2010) First time adoption of IFRS: Hyperinflation
IFRS 7 (amended 2010) Financial instruments disclosures: transfers of financial assets
IFRS 7 (amended 2011) Financial instruments disclosures:
offsetting financial assets and financial liabilities
IFRS 9 Financial instruments
IFRS 10 Consolidated financial statements
IFRS 11 Joint arrangements
IFRS 12 Disclosure of interests in other entities
IFRS 13 Fair value measurement
IAS 1 (amended 2011) Presentation of other comprehensive income
IAS 12 (amended 2010) Income taxes: deferred tax
IAS 19 (amended 2011) Employee benefits
IAS 27 (amended 2011) Separate financial statements
IAS 28 (amended 2011) Investments in associates and joint ventures
IAS 32 (amended 2011) Financial instruments presentation:
offsetting financial assets and financial liablilities
The Directors do not expect that the adoption of these Standards
or Interpretations in future periods will have a material impact on
the financial statements of the Company or the Group.
Basis of consolidation
The consolidated financial statements incorporate the financial
statements of the company and all principal subsidiaries for the
year ended 31 December 2011. The results of subsidiaries acquired
are included in the consolidated income statement from the
effective date of acquisition.
All intra-group transactions, balances, income and expenses are
eliminated in full on consolidation.
LEES FOODS Plc
Notes to the Consolidated Financial Statements
For the year ended 31 December 2011
2. Share based payments 2011 2010
GBP GBP
Share based payments 100,409 79,416
A charge of GBP100,409 was made in the year in accordance with
IFRS 2 "Share-based payment" to recognise the cost of issuing
shares to employees (2010 - GBP79,416).
3. Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the result
for the financial year by the weighted average number of ordinary
shares in issue during the year. The weighted average number of
ordinary shares in 2011 has been calculated based on the following
assumptions;
(a) 2,414,751 ordinary shares were in issue up to 13 January 2011.
(b) 20,000 ordinary shares were issued on 14 January 2011, giving a total of 2,434,751 shares
(c) 10,000 ordinary shares were issued on 11 November 2011,
giving a total of 2,444,751 shares at 31 December 2011
Diluted earnings per share
In accordance with IAS 33 "Earnings Per Share", diluted earnings
per share takes into account the dilutive effect of outstanding
share options. The following assumptions have been made:
(a) The weighted average number of shares under option is 20,000 (2010: 50,000).
(b) The weighted average number of shares that would have been
issued at the average market value is 10,417 (2010: 27,322).
(c) The average market value of GBP1.92 during 2011 (2010: GBP1.83) per ordinary share has been used in the calculation.
LEES FOODS Plc
Notes to the Consolidated Financial Statements
For the year ended 31 December 2011
3. Earnings per share (continued)
Basic Earnings Basic
Shares EPS
GBP Number Pence
2011
Profit attributable to ordinary 777,850 - -
equity holders
Weighted average shares during - 2,435,672 -
year
Basic EPS - - 31.94
Weighted average number of shares
under option - 20,000 -
Weighted average number of shares
that would have been issued - (10,417) -
at the market value
Diluted EPS - - 31.81
-------------- -------------- --------------
2010
Profit attributable to ordinary 696,105 - -
equity holders
Weighted average shares during - 2,376,847 -
year
Basic EPS - - 29.28
Weighted average number of shares
under option - 50,000 -
Weighted average number of shares
that would have been issued - (27,322) -
at the market value
Diluted EPS - - 29.01
-------------- -------------- --------------
4. Dividend GBP GBP
Dividend paid in the year on 2,434,751
ordinary shares at 7.5p per share (2010
- 2,349,751 ordinary shares at 7.2p) 182,606 169,182
Less proportion of dividend due to Lees
Group Holdings
Limited Employee Share Ownership Trust (5,540) (6,861)
-------------- --------------
177,066 162,321
5. Despatch of documents
These preliminary results for the year ended 31 December 2011 do
not constitute audited statutory accounts for the Company. Copies
of the Group's statutory accounts for the year ended 31 December
2011, upon which the auditors have still to report, will be
available and despatched to shareholders in due course.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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