RNS Number:0284L
Blooms of Bressingham Holdings plc
13 May 2003
BLOOMS OF BRESSINGHAM HOLDINGS PLC
PRELIMINARY ANNOUNCEMENT
For the 52 weeks ended 26th January 2003
Chairman's Statement
Overview of the year to 26th January 2003
The year to 26th January 2003 was one of transition from the deal-making
activity of the previous years, to that of a stable business focused on organic
growth and improving operational efficiency.
The year started well with revenues growing 18% in the first half, only to be
followed by the well publicised industry-wide slow down due to one of the
wettest summers on record. As a consequence we ended the year with like for
like sales ahead by 7.6%. This was a respectable result when compared with the
industry average but it was below our early expectations and inevitably meant
that our original forecast for a small profit for last year was confounded;
nevertheless the final out-turn of a small loss was in line with revised market
expectations. It was pleasing to note that for the first time since the AIM
flotation Blooms has produced an operating profit of #245,000, before
exceptional and non-recurring items.
Turnover rose from #16.9m to #18.5m during the year. Loss on ordinary
activities before tax, amortisation, exceptional and non recurring items reduced
from #979,000 to #253,000. This is an acceptable result in a year where the
whole industry was so affected by poor weather. These figures therefore
disguise much of the success of the management team in building a robust and
successful trading formula upon which to go forward.
The new management team, in its implementation of our strategy of concentrating
on obtaining the best performance from our centres, identified two of our
smaller sites (Clandon Park and Betchworth) for sale. We were also approached by
a tenant at our Bressingham centre who wished to purchase a small piece of
surplus freehold land from which they trade. All of these sales were completed,
after the balance sheet date, for total proceeds of some #1.4 million. These
sales have resulted in a significant reduction in debt since the year end.
Approaches
At the end of last year we received a number of approaches to merge, be acquired
or inject capital into the Company. We had not solicited any of these
proposals.
Whilst the Board recognises that it could be of benefit to Blooms shareholders
in the short term to be part of a larger group, your Board believes that Blooms
has passed the low point in its financial fortunes and therefore any proposals
need to be on terms which properly reflect the prospects for further development
of our excellent property assets over the medium term. We are still waiting for
the outcome of these discussions but it is not the Board's intention to agree to
a deal unless it is in the interests of shareholders.
Deputy Chairman
To support me in my role as Chairman the Board invited Christopher Baker, our
senior non executive Director, to take up the position of Deputy Chairman.
Chris has brought a wealth of experience to the Board since joining us and I am
pleased that he has accepted this new appointment.
Capital restructure
Your Board is proposing a capital restructure to accomplish two objectives.
First to reduce the par value of our Ordinary Shares from 50p to 10p in order to
facilitate any possible future equity transactions. Second to assist the
Company in the ability to join the dividend list at the earliest appropriate
opportunity. The necessary resolutions will be placed before shareholders at
the forthcoming AGM and, subject to their approval, the Company will apply to
the Courts for the necessary confirmations.
Current trading
This year has started off encouragingly, with our centres currently performing
in line with budget. Sales, since the year end are 7% ahead of the same period
last year, itself a good period before the very poor weather conditions set in.
Future prospects
With our balance sheet strengthened by last year's placing and asset disposals
since the year end, raising a further #1.4 million, much of the legacy of the
past is now firmly behind us.
Our well known brand, loyal customer base and some of the best locations in the
southern half of the country, gives us a firm base on which to view the future
with confidence. In the light of the significant further development
opportunities within our property portfolio, excellent support from our bankers
and the good start to the current year we are able to look forward to a period
of sustained and above average growth.
Charles Good
Chairman
12th May 2003
Chief Executive's Review
Introduction
2002 was a challenging year for Blooms and the garden centre industry as a whole
owing to poor weather in key trading months. Despite the difficult trading
season I am pleased to report on a year of like for like growth of 7.6%, which
was above the industry average.
Last year was a period of consolidation for Blooms and a great deal was achieved
in the re-focusing and fine-tuning of the running of the business, which is
unfortunately not fully reflected in the results due to the poor trading season.
The benefits of improved controls and increased standards throughout the Group
will be reflected in the current and future years. As a result of our strategy
to focus on larger sites, we disposed of two smaller sites earlier this year.
We also completed the major redevelopments at our Cardiff and Bicester garden
centres, both of which are trading well.
Year End Results
Group sales of #18.5m were recorded during the year ended 26th January 2003
(2002 - #16.9m). Overall Company growth of 9% in turnover was achieved, with
the newly developed garden centres at Cardiff and Bicester showing exceptional
growth.
Gross profit at #8.5m was well ahead of last year's #7.5m, with margins
increasing in a very difficult year by 1.8 percentage points to 46.1% reflecting
improved controls as well as a better buying and sales mix.
The Group returned an operating profit of #500,000 (2002 - a loss of #375,000)
before a goodwill amortisation charge of #255,000 (2002 - #211,000), and
exceptional costs of #88,000, (2002 - #2,768,000). The exceptional and
non-recurring items include provision for the loss on the sale of the two small
centres, which has been accounted for in last year's results.
After interest and tax the net loss for the year was #573,000 (2002 -
#3,958,000) giving a loss per share of 2.41 pence (2002 - 22.00 pence). Loss
per share before exceptional items and goodwill amortisation was reduced to 2.04
pence (2002 - 6.60 pence).
An analysis of the balance sheet shows total debt at the year end being reduced
by #1.1m from the previous year. Following the sale of the two small centres
and the parcel of land, which were completed after our year end, proforma debt
was reduced by a further #1.4m. I am also pleased to report that our bankers
continue to be fully supportive of the management team, the progress already
made and our plans for the future.
Trading Review
The trading year was one of mixed fortunes. The spring season started well and
record sales were achieved in March and April, when good gardening conditions
prevailed, increasing like for like sales for the 13 weeks to 28th April by 44%.
However, disappointing weather in both May and June, together with the
distractions created by the Jubilee celebrations and the World Cup, affected
trading considerably. The increase in sales for the 21 weeks to 23rd June fell
to 12.0%. Quarter three was stronger benefiting from good gardening weather in
the autumn with sales for the 13 weeks ending 27th October up 9.6%. Whilst the
important fourth quarter period including Christmas began poorly, with wet
weather and weak consumer confidence, December sales were respectable and
January was buoyant. This enabled a clearance sale of significant amounts of
stock and the 13 weeks ending 26th January showed sales up 1.6%. Overall, this
resulted in a 7.6% increase in like for like sales for the whole year.
Excluding non garden centre operations, in what was a difficult trading season
overall, like for like average sales per store rose this year from #1.4m to
#1.5m and gross margins rose by 2.5%.
Plants still represent Blooms core sales proposition and in the year ending 26th
January 2003 represented 40% of our total store sales. The underlying strength
in plant margins as well as our reputation for quality enables Blooms to build
upon its brand strength for the future. This was reinforced by winning our 24th
Gold Medal at the RHS Chelsea Flower Show last year.
Centre Development
As part of our continued focus on flagship development, we are in the process of
finalising an improved planning permission to redevelop our Gloucester site.
This site is currently 9 acres and trades from 14,000 sq.ft of heated covered
space. We hope to secure planning permission for 52,000 sq.ft of heated covered
space this Autumn.
We will shortly be determining the strategy for our green field site at Rugby.
The site is geographically well placed with excellent catchment and demographics
and, subject to obtaining a revised planning consent we intend to open a new
centre in 2004.
Our intentions at Bicester are to continue to grow returns for the immediate
future, whilst we determine the best funding and timing strategy to unlock the
tremendous property and trading value. As we reported at the interim stage, we
have achieved planning consent for just under 100,000 sq ft of heated covered
space and we now consider it to be one of the best locations in the country.
The opportunities at Gloucester, Rugby and Bicester represent significant
potential for the Group. Management believe that once built out and traded up
the expanded sites could increase Group annual turnover by around 50% as well as
expanding the potential for additional concession income.
The Team
I am pleased to announce the appointment of Wendy King as Financial Director and
Alistair Lorimer as Purchasing Director to the boards of the operating
subsidiaries. This reflects the contribution that Wendy and Alistair have
provided at senior management level over the last two years.
The management team at Blooms has made significant progress in the turnaround of
the business, improved core trading of the centres and raised the service level
to a high standard. Our proposition is still unique in the marketplace and is
only achieved thanks to the excellent hard work and dedication of the 422 staff
currently employed within the Group. The Board and I would like to express our
thanks and appreciation for their support and professionalism.
Outlook
Gardening continues to prove a popular pastime with an ever-broadening consumer
base. It is my belief that this trend will continue for many years ahead and
the customers will increasingly migrate towards those retailers that have brand
credibility, expertise and an ability to provide inspiration, aspiration and
value. The evolution of the product range continues and we have been
particularly pleased with the reception of our large Mediterranean specimens and
our broadened range of garden furniture.
Blooms will continue to focus on the large store format and on broadening its
appeal to a wider consumer base through quality products and added value
service.
Jon Kitching
Chief Executive
12th May 2003
CONSOLIDATED PROFIT & LOSS ACCOUNT
For the 52 weeks ended 26th January 2003
52 weeks ended 52 weeks ended
26 January 2003 27 January 2002
Note #'000 #'000 #'000 #'000
Turnover 18,452 16,926
Cost of sales (9,947) (9,426)
Gross profit 8,505 7,500
Administrative expenses
Amortisation of goodwill (255) (211)
Exceptional and non-recurring items 2 (88) (2,768)
Other (8,558) (8,313)
(8,901) (11,292)
Other operating income 553 438
Operating profit/(loss) 157 (3,354)
Interest receivable and similar income 1 52
Interest payable and similar charges (754) (656)
Loss on ordinary activities before taxation (596) (3,958)
Tax on loss on ordinary activities 3 23 -
Loss for the financial year (573) (3,958)
Basic loss per share (pence) 4 (2.41)p (22.0)p
Adjusted loss per share pre exceptional and 4 (2.04)p (6.60)p
non-recurring items (pence)
All Operations are continuing
There were no recognised gains and losses other than the loss for the financial
year.
CONSOLIDATED BALANCE SHEET AT 26TH JANUARY 2003
26 January 2003 27 January 2002
Note #'000 #'000 #'000 #'000
Fixed assets
Intangible assets
Goodwill 4,307 4,795
Other 29 31
4,336 4,826
Tangible assets 22,497 22,165
26,833 26,991
Current assets
Stocks 2,401 2,150
Debtors 472 780
Cash at bank and in hand 15 24
2,888 2,954
Creditors: amounts falling due within one (7,059) (9,680)
year
Net current liabilities (4,171) (6,726)
Total assets less current liabilities 22,662 20,265
Creditors: amounts falling due after more
than one year
Convertible debt (1,500) (1,750)
Other (6,835) (5,472)
(8,335) (7,222)
Provisions for liabilities and charges (90) (479)
14,237 12,564
Capital and reserves
Called up share capital 12,314 9,964
Share premium account 7,383 7,487
Other reserves 1,783 1,783
Profit and loss account (7,243) (6,670)
Equity shareholders' funds 5 14,237 12,564
CONSOLIDATED CASH FLOW STATEMENT
For the 52 weeks ending 26th January 2003
52 weeks ended 52 weeks ended
26 January 2003 27 January 2002
Note #'000 #'000 #'000 #'000
Net cash inflow/(outflow) from operating 6 647 (186)
activities
Returns on investments and servicing of
finance
Interest received 1 52
Interest paid (602) (593)
Finance lease interest paid (69) (63)
Net cash outflow from returns on investments (670) (604)
and serving finance
Taxation (1) -
Capital expenditure and financial investment
Purchase of intangible fixed assets - (2)
Purchase of tangible fixed assets (1,130) (4,247)
Net cash outflow from capital expenditure (1,130) (4,249)
and financial investment
Financing
Purchase of subsidiary undertakings - (1,335)
Financing
Issue of shares 1,900 4,019
Share issue costs (104) (129)
Receipts from finance leases - 240
Capital element of finance lease rentals (453) (374)
Receipts from borrowings 1,723 4,990
Repayment of borrowings (2,473) (1,888)
Net cash inflow from financing 593 6,858
(Decrease)/increase in cash 7 (561) 484
NOTES TO THE PRELIMINARY ANNOUNCEMENT
1. BASIS OF PREPARATION
The preliminary announcement has been prepared in accordance with applicable
accounting standards and under the historical cost convention.
The principal accounting policies have remained unchanged for those set out in
the Group's 2002 annual report and financial statements.
2. EXCEPTIONAL AND NON RECURRING ADMINISTRATIVE EXPENSES
2003 2002
#'000 #'000
Impairment of intangible fixed assets 233 292
Impairment of tangible fixed assets - 1,187
Site closure costs 78 456
Post acquisition rationalisation 27 833
Insurance proceeds (250) -
88 2,768
3. TAX ON LOSS ON ORDINARY ACTIVITIES
2003 2002
#'000 #'000
United Kingdom corporation tax at 30% (2002: 30%) - -
Adjustment in respect of prior period (23) -
Total current tax (23) -
Unrelieved tax losses of approximately #6,900,000 (2002: #6,600,000) remain
available to offset against future trading profits.
The tax assessed for the period is higher than the standard rate of corporation
tax in the UK of 30% (2002: 30%). The differences are explained as follows:
2003 2002
#'000 #'000
Loss on ordinary activities before tax (596) (3,958)
Loss on ordinary activities multiplied by standard rate
of corporation tax in the UK of 30% (2002: 30%) (179) (1,187)
Effect of:
Expenses not deductible for tax purposes 69 374
Depreciation in excess of capital allowances for the period 160 65
Short term timing differences (102) 102
Tax losses carried forward 52 646
Adjustments to tax charge in respect of prior periods (23) -
Current tax charge for period (23) -
4. LOSS PER SHARE
The calculation of basic loss per share is based on the loss attributable to
ordinary shareholders of #573,000 (2002: loss #3,958,000) divided by the
weighted average number of shares in issue during the period 23,744,327 (2002:
17,996,568). The calculation of adjusted loss per share pre exceptional/
non-recurring items is based on the loss before exceptional/non-recurring items
of #485,000 (2002: loss #1,190,000).
There is no dilutive effect of share options or warrants on the basic loss per
share.
5. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
The Group 2003 2002
#'000 #'000
At 28 January 2002 12,564 10,506
Issue of shares 2,350 5,138
Issue costs (104) (129)
Excess of fair value over nominal value of shares issued to acquire Jardinerie - 1,007
Limited
Loss for the period (573) (3,958)
At 26 January 2003 14,237 12,564
6. CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES
2003 2002
#'000 #'000
Operating profit/(loss) 157 (3,354)
Depreciation and amortisation 1,030 814
Impairment write down of fixed assets 233 1,479
(Increase)/decrease in stocks (251) 410
Decrease/(increase) in debtors 308 (172)
(Decrease)/increase in creditors (466) 248
(Decrease)/increase in provisions for liabilities and charges (389) 389
Loss on disposal 25 -
Net cash inflow/(outflow) from continuing operating activities 647 (186)
7. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
2003 2002
#'000 #'000
(Decrease)/increase in cash (561) 484
Movement in bank loan (1,723) (3,102)
Convertible loan stock and loan notes issued as consideration for acquisition 2,923 (5,910)
of subsidiaries
Net cash outflow from finance leases 453 134
1,092 (8,394)
Net debt at beginning of period (13,083) (1,867)
Net debt acquired with subsidiaries - (2,822)
Net debt at end of period (11,991) (13,083)
8. ANALYSIS OF CHANGES IN NET DEBT
At 28 January Cash flow Non-cash At 26
2002 items January
2003
#'000 #'000 #'000 #'000
Cash at bank and in hand 24 (9) - 15
Bank overdraft (1,504) (552) - (2,056)
(1,480) (561) - (2,041)
Bank loan (4,990) (1,723) - (6,713)
Convertible loan stock (1,750) - 250 (1,500)
Loan notes (4,160) 2,473 200 (1,487)
Finance leases (703) 453 - (250)
Net debt (13,083) 642 450 (11,991)
9. MAJOR NON CASH TRANSACTIONS
During the year the loan notes with a value of #200,000 and convertible loan
notes with a value of #250,000 were converted into 900,000 ordinary shares of
50p each with value of #450,000.
10. PUBLICATION OF NON-STATUTORY ACCOUNTS
The preliminary announcement, was approved by the Board of Directors on 12th May
2003.The preliminary announcement does not constitute the Company's statutory
accounts.
The financial information for 2002 has been derived from the statutory account
for 2002. The statutory accounts for the year ended 27th January 2002 received
an audit report which was unqualified and did not contain a statement under
section 237 of the Companies Act 1985. The statutory accounts for the year ended
27th January 2002 have been delivered to the Registrar of Companies.
The statutory accounts for the year ended 26th January 2003, will be finalised
on the basis of the information presented by the Directors in this preliminary
announcement and will be delivered to the Registrar of Companies following the
company's annual general meeting.
Copies of the statutory accounts will be sent to shareholders and the AIM team
shortly. Copies will also be available to the public at the Company's
registered address, Bath Road, Haresfield, Nr Stonehouse, Gloucestershire GL10
3DP.
This information is provided by RNS
The company news service from the London Stock Exchange
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