RNS Number:1806U
Alexon Group PLC
02 April 2007
For Immediate Release 2 April 2007
ALEXON GROUP PLC
Preliminary Results for the 52 weeks ended 27 January, 2007
Alexon Group plc, the leading retailer of ladieswear and menswear, announces
Preliminary Results for the 52 weeks ended 27 January 2007.
Key Points
* Operating profit, before exceptional items, in line with market
expectations;
* Turnover from continuing operations of #325.8m (2006: #345.5m);
* L-f-l sales for the 52 weeks to 27 January 2007 down 5.5% with gross
margins down 1% on prior year; l-f-l sales improved in the current financial
year and for the first eight weeks are level, with improved gross margins;
* Unchanged final dividend proposed of 6.0p, making a total of 9.0p
for the year (2006: 9.0p);
* John Osborn, Chief Executive, commented:
"The sale of Dolcis and the closure of Mandolin marks the end of a challenging
period for the Group. The positive start to the Spring season by Bay Trading,
and the product initiatives taken within Menswear and Alexon Brands mean that
the Group is well placed to make good progress in 2007.
For further information:
Alexon Group 020 7597 5000 (today) &
John Osborn, Chief Executive 01582 723131 (thereafter)
Robin Piggott, Finance Director
Buchanan Communications 020 7466 5000
Richard Darby/Nicola Cronk
Chief Executive's Report
Results
Operating profit, from continuing operations, before exceptional items, for the
52 weeks ended 27th January 2007 was #11.8 million as against #21.6 million for
the prior year, and is in line with market expectations. The total loss for the
period, after tax and exceptional items, was #25.6m compared to a profit of
#14.7m for the previous period. Group sales (excluding Dolcis) were 5.5% down
on a like-for-like basis, with gross margins 1% down on the prior year.
(references to operating profit /loss hereafter refer to operating profit/loss
before exceptional items)
Alexon Brands
Operating profit for the division was #12.9 million against #21.1 million last
year.
As previously reported, Mandolin launched in October 2005, was discontinued in
January 2007. Mandolin losses for the year were #5.1 million compared with a
part year loss of #2.0 million in the prior year. Closure costs were #1.9
million and these are reported within exceptional costs.
Operating profit for the Alexon Brands, excluding Mandolin, was #18.0 million
against #23.1 million last year. Like for like sales for the year were 5.9%
down, with margins 1.4% lower, reflecting an increase in markdown activity
necessary to keep stocks under control.
Whilst Eastex and Dash performed strongly, Alex & Co, Minuet and Kaliko
struggled against the prior year. Whilst it was not an easy market place
within which to operate, these brands suffered from the diversion of managerial
effort and attention into Mandolin and have lost some market share as a result.
Bay Trading
Operating profit was #1.8 million against #2.8 million last year. Like for
like sales were 3% down on margins slightly lower than the prior year.
The division, after a difficult first half, showed an encouraging improvement in
the second half, reflecting stronger trends in the young fashion market and a
better understanding of the target customer.
Menswear
The operating loss for the year was #2.7 million against a loss of #1.9 million
last year. Like for like sales were 7.8% down, on margins 0.8% lower than the
prior year.
The division, after a poor first half, showed a marked improvement in
profitability in the second half, reflecting the work done to re-establish the
branded offer within the Envy chain and to develop more commercial ranges on own
brand merchandise.
A review of the carrying value of goodwill was carried out during the year. As a
consequence, a write down of #16.0m has been made and is shown within
exceptional items.
Dolcis
Following a detailed review, the Board concluded that Dolcis had no strategic
future within the Group and the business was sold at the end of November 2006
for #2.7 million in cash resulting in a loss on disposal of #10.3m after tax.
The operating loss before tax in the year to date, which is shown under
discontinued operations, was #4.2 million compared with a full year loss of #0.8
million in the prior year. The total loss for the period, after tax, amounted
to #13.4m.
Current Trading
The emphasis during February has been to clear residual stocks, which are well
under control in all divisions. Like for like sales for the first eight weeks
of the current financial year are level with improved gross margins.
Following the closure of Mandolin and the sale of Dolcis, more managerial
attention is now being focussed on Alexon Brands, and we are confident that the
measures currently being taken will prove successful as the year progresses.
Bay Trading is currently performing strongly in terms of both sales and margin,
and we are actively looking to expand the shop portfolio. Menswear is
regaining credibility as a brand fashion retailer and continues to show steady
improvement.
Dividend
The Board are recommending a final ordinary dividend of 6.00p per ordinary
share be paid on 29 June 2007 to shareholders on the register on 1 June 2007
making a total of 9.00p for the year (2006 : 9.00p)
Outlets
A breakdown of outlets as at 27th January 2007 is as follows:-
UK UK European Total
Shops Concessions Concessions
Alexon Brands 79 840 142 1,061
Bay Trading 158 47 19 224
Style Menswear 55 72 2 129
Total 292 959 163 1,414
John Osborn
Chief Executive
2 April 2007
ALEXON GROUP PLC
Consolidated Income Statement
For the 52 weeks to 27 January 2007
2007 2006
Pre- Exceptional Pre- Exceptional
exceptional items exceptional items
items (see notes 5 Total items (see notes 5 Total
& 6) & 6)
Note #000 #000 #000 #000 #000 #000
Revenue - continuing 2 325,844 - 325,844 345,485 - 345,485
operations
Cost of sales (291,534) (6,617) (298,151) (300,153) (1,263) (301,416)
Gross profit - continuing 34,310 (6,617) 27,693 45,332 (1,263) 44,069
operations
Administrative expenses (8,701) (16,045) (24,746) (9,920) - (9,920)
Distribution costs (13,850) - (13,850) (13,779) - (13,779)
Operating profit/(loss) - 2 11,759 (22,662) (10,903) 21,633 (1,263) 20,370
continuing operations
Finance income 839 - 839 621 - 621
Finance expense (228) - (228) (245) - (245)
Profit/(loss) before 2 12,370 (22,662) (10,292) 22,009 (1,263) 20,746
taxation
Income tax (expense)/ (3,732) 1,865 (1,867) (5,838) 341 (5,497)
credit
Profit/(loss) for the
financial period from
continuing operations
attributable
to equity holders of the 8,638 (20,797) (12,159) 16,171 (922) 15,249
company
Loss from discontinued 6 - (13,398) (13,398) - (532) (532)
operations
Profit/(loss) for the
financial period
attributable
to equity holders of the 8,638 (34,195) (25,557) 16,171 (1,454) 14,717
company
(Losses)/earnings per
share from continuing
operations
attributable to equity
holders of the company
during the period
Basic 3 (21.63) p 26.66p
Diluted 3 (21.63) p 26.64p
Losses per share from
discontinued operations
attributable to equity
holders of the company
during the period
Basic 3 (23.83) p (0.93)p
Diluted 3 (23.83) p (0.93)p
ALEXON GROUP PLC
Consolidated Statement of Recognised Income and Expense
For the 52 weeks to 27 January 2007
2007 2006
#000 #000
Actuarial gain/(loss) 783 (1,702)
arising in defined benefit
pension scheme
Tax on items taken 152 492
directly to equity
(Loss)/gain on cash flow (1,348) 195
hedges
Net expense recognised (413) (1,015)
directly in equity
(Loss)/profit for the (25,557) 14,717
financial period
Total recognised (expense)
/income for the financial
period
attributable to equity (25,970) 13,702
holders of the Company
ALEXON GROUP PLC
Consolidated balance sheet
As at 27 January 2007
2007 2006
Note #000 #000 #000 #000
Non current assets
Goodwill 17,703 37,174
Property, plant and equipment 10,953 17,930
Deferred tax 2,482 4,214
Pension assets 316 72
31,454 59,390
Current assets
Inventory 41,217 58,629
Trade and other receivables 22,479 24,994
Current tax recoverable 2,954 -
Cash and cash equivalents 14,851 12,327
81,501 95,950
Current liabilities
Trade and other payables (32,522) (36,494)
Derivative financial instruments (947) (152)
Short term borrowings (1,125) (4,462)
Current tax payable - (2,816)
(34,594) (43,924)
Net current assets 46,907 52,026
Non-current liabilities
Long term provisions (6,377) (2,751)
Accruals and deferred income (1,767) (2,580)
Pension liabilities (2,581) (4,516)
Total non-current liabilities (10,725) (9,847)
Net assets 67,636 101,569
Equity attributable to equity holders
Share capital 5,706 5,820
Share premium 39,372 39,354
Capital redemption reserve 3,131 3,016
Cashflow hedge reserve (1,153) 195
Retained earnings 20,580 53,184
Total equity 67,636 101,569
ALEXON GROUP PLC
Consolidated statement of cash flows
For the 52 weeks to 27 January 2007
2007 2006
Note #000 #000 #000 #000
Cash flows from operating activities
Cash generated from continuing operations 4 20,879 15,736
Interest received (continuing operations) 366 285
Interest paid (continuing operations) (211) (194)
Tax paid (continuing operations) (4,606) (6,102)
Cash (used)/generated by discontinued 4 (3,228) 1,464
operations
Net cash flow from operating activities 13,200 11,189
Investing activities
Disposal of subsidiary undertaking 2,158 -
Purchase of property, plant and equipment (1,582) (3,867)
(continuing operations)
Purchase of property, plant and equipment (115) (657)
(discontinued operations)
Proceeds from disposals of property, plant and 157 167
equipment (continuing operations)
Proceeds from disposals of property, plant and 6 -
equipment (discontinued operations)
Cash flows from investing activities 624 (4,357)
Financing activities
Proceeds from the issue of shares 32 334
Purchase of own shares (2,942) (2,983)
Equity dividends paid (5,053) (4,944)
Cash flows from financing activities (7,963) (7,593)
Net increase/(decrease) in cash and cash 5,861 (761)
equivalents
Cash and cash equivalents at the beginning of 7,865 8,626
the period
Cash and cash equivalents at the end of the 13,726 7,865
period
Cash and cash equivalents 14,851 12,327
Short term borrowings (1,125) (4,462)
13,726 7,865
ALEXON GROUP PLC
52 weeks to 27 January 2007
Notes to the financial statements
1. These financial statements do not constitute the full financial
statements within the meaning of Section 240 of the Companies Act 1985. They are
extracted from the draft unaudited financial statements for the 52 weeks ended
27 January 2007 which will be delivered to the Registrar of Companies in due
course. Statutory accounts for the 52 weeks ended 28 January 2006, which were
prepared under IFRS and on which our auditors expressed an unqualified opinion,
have been filed with the Registrar of Companies.
The directors approved this announcement on 30 March 2007.
These financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRS) and the accounting policies set out in the
Group's 2006 Annual Report.
In accordance with IFRS5, Non-current Assets Held for Sale and Discontinued
Operations, comparative information for the 52 weeks to 28 January 2006 relating
to discontinued operations has been restated in the income statement and
statement of cash flows. Exceptional items in the comparative information have
also been shown separately to aid comparability with the current period.
2. Segmental information
Primary reporting format - business segments
The Group manages its business activities via three continuing business
segments, Alexon Brands, Bay Trading, and Style Menswear. Each business segment
has its own executive committee responsible for managing day to day operations
through its trading outlets. All revenue is readily identifiable for each
segment, as are the majority of costs. Where certain central functions are
shared across all segments these costs have been allocated on a reasonable
basis. Dolcis was sold during the period and its operating results, together
with the loss on disposal, are shown within discontinued operations (see note
6).
Segment results for the 52 weeks to 27 January 2007 are as follows :
Alexon Bay
Brands Trading Menswear Total
#000 #000 #000 #000
Segment turnover 191,649 79,536 54,659 325,844
Operating profit/(loss) before 12,896 1,830 (2,708) 12,018
exceptional items
Exceptional items (see note (3,664) (900) (18,098) (22,662)
5)
Segment result 9,232 930 (20,806) (10,644)
Unallocated costs (259)
Operating loss - continuing (10,903)
operations
Finance income 839
Finance expense (228)
Loss before taxation (10,292)
Income tax expense - (1,867)
continuing operations
Loss for the period from continuing operations (12,159)
Loss from discontinued operations (14,764)
Tax on discontinued operations 1,366
Loss for the period attributable to equity holders of the company (25,557)
ALEXON GROUP PLC
52 weeks to 27 January 2007
Notes (continued)
Segment results for the 52 weeks to 28 January 2006 are as follows :
Alexon Bay
Brands Trading Menswear Total
#000 #000 #000 #000
Segment turnover 201,347 83,970 60,168 345,485
Operating profit/(loss) before 21,142 2,843 (1,919) 22,066
exceptional items
Exceptional items (see note (212) (385) (666) (1,263)
5)
Segment result 20,930 2,458 (2,585) 20,803
Unallocated costs (433)
Operating profit - 20,370
continuing operations
Finance income 621
Finance expense (245)
Profit before taxation 20,746
Income tax expense - continuing (5,497)
operations
Profit for the period from 15,249
continuing operations
Loss from discontinued operations (760)
Tax on discontinued operations 228
Profit for the period attributable to equity holders of the company 14,717
ALEXON GROUP PLC
52 weeks to 27 January 2007
Notes (continued)
Other segment information for the 52 weeks to 27 January 2007 is as follows:
Alexon Bay
Brands Trading Dolcis Menswear Total
#000 #000 #000 #000 #000
Capital expenditure 978 414 115 190 1,697
Depreciation 1,607 897 591 1,541 4,636
Impairment of goodwill - - - 16,045 16,045
Impairment of property, plant and 1,038 200 - 1,138 2,376
equipment
Other segment information for the 52 weeks to 28 January 2006 is as follows :
Alexon Bay
Brands Trading Dolcis Menswear Total
#000 #000 #000 #000 #000
Capital expenditure 2,824 506 657 537 4,524
Depreciation 1,507 1,015 983 2,001 5,506
Impairment of property plant and 140 112 405 694 1,351
equipment
Secondary reporting format - geographic segments
The financial operation and assets of the Group are principally located in the
United Kingdom. Accordingly no segment analysis by geographical segments is
provided.
3. Earnings per share - continuing operations
The calculation of basic earnings per ordinary share is based on losses of
#12,159,000 (2006: profits of #15,249,000) and on 56,212,969 ordinary shares
(2006 : 57,197,319 ) being the weighted average number of ordinary shares in
issue.
In calculating diluted earnings per share the weighted average number of
ordinary shares in issue is adjusted to assume the exercise of all dilutory
share options granted to directors and key employees.
Reconciliations of the earnings and weighted average number of shares are set
out below.
2007 2006
Weighted Weighted
average average
Losses number Per share Earnings number Per share
(#) of shares pence (#) of shares pence
Basic (losses)/ (12,159,000) 56,212,969 (21.63) 15,249,000 57,197,319 26.66
earnings
Effect of dilutive
securities :
options - 619 - - 48,201 (0.02)
Diluted (losses)/ (12,159,000) 56,213,588 (21.63) 15,249,000 57,245,520 26.64
earnings
Earnings per share - discontinued operations
The calculation of basic earnings per ordinary share is based on losses of
#13,398,000 (2006 : #532,000) and on 56,212,969 ordinary shares (2006 :
57,197,319 ) being the weighted average number of ordinary shares in issue.
In calculating diluted earnings per share the weighted average number of
ordinary shares in issue is adjusted to assume the exercise of all dilutory
share options granted to directors and key employees.
Reconciliations of the earnings and weighted average number of shares are set
out below.
2007 2006
Weighted Weighted
average average
Losses number Per share Losses number Per share
(#) of shares pence (#) of shares pence
Basic (losses)/ (13,398,000) 56,212,969 (23.83) (532,000) 57,197,319 (0.93)
earnings
Effect of dilutive
securities :
options - 619 - - 48,201 -
Diluted (losses)/ (13,398,000) 56,213,588 (23.83) (532,000) 57,245,520 (0.93)
earnings
4. Notes to the statement of cash flows
2007 2006
52 weeks 52 weeks
#000 #000
Cash generated from continuing operations
Operating (loss)/profit - continuing operations (10,903) 20,370
Adjustments for:
Depreciation 4,045 4,523
Impairment of property, plant and equipment 2,376 946
Impairment of goodwill 16,045 -
Share based payments - 114
Revaluation gains on financial instruments (20) (60)
Loss on disposal of property, plant and equipment 60 418
Changes in working capital:
Increase in trade and other receivables (508) (2,794)
Decrease/(increase) in inventories 7,244 (2,464)
Increase/(decrease) in trade and other payables 694 (2,978)
Increase/(decrease) in long term provisions, accruals
and deferred income 2,435 (7)
Movement in net retirement benefit obligations (589) (2,332)
Cash generated from continuing operations 20,879 15,736
2007 2006
52 Weeks 52 Weeks
#000's #000's
Cash generated from discontinued operations
Operating loss - discontinued operations (4,139) (710)
Adjustments for:
Depreciation 591 983
Impairment of property, plant and equipment - 405
Loss on disposal of property, plant and equipment 6 18
Changes in working capital:
Decrease in trade and other receivables 1,553 2,758
Increase in inventories (2,917) (858)
Increase/(decrease) in trade and other payables 772 (1,364)
Increase in long term provisions, accruals and deferred income 666 14
Movement in net retirement benefit obligations 309 285
Cash generated from discontinued operations (3,159) 1,531
Interest received 1 4
Interest paid (61) (50)
Tax paid (9) (21)
Cash flows from operating activities - discontinued operations (3,228) 1,464
5. Exceptional items - continuing operations
The following exceptional costs were incurred by the Group during the period in
relation to continuing operations.
2007 2006
52 weeks 52 weeks
#000 #000
Impairment of goodwill 16,045 -
Impairment of property, plant & equipment 2,376 946
Provision for onerous lease commitments 3,201 317
Provision for obsolete stock of discontinued brand 1,040 -
22,662 1,263
The impairment of goodwill arises from the annual impairment test and reflects
the difference between the value-in-use of the cash generating units (trading
divisions) and their carrying value. The impairment relates entirely to Style
Menswear.
The impairment of property, plant and equipment arises from a comparison of the
value-in-use of individual trading outlets with their net book value where
circumstances indicate a possible impairment. #0.9m of the charge relates to
Mandolin.
Onerous lease provisions are made for the estimated cost of exiting those leases
which are considered onerous on the basis that the stores to which they relate
are expected to generate net cash outflows over the remaining lease term.
The provision for obsolete stock relates to stock for the Mandolin brand which
was discontinued in January 2007.
ALEXON GROUP PLC
52 weeks to 27 January 2007
Notes (continued)
6. Exceptional items - discontinued operations
The loss incurred by the Group in relation to the disposal of its wholly owned
subsidiary, Dolcis Limited can be analysed as follows :
2007 2006
52 weeks 52 weeks
#000 #000
Operating loss :
Revenue 48,876 68,145
Expenses (53,015) (68,855)
Operating loss (4,139) (710)
Net finance expense (60) (50)
Loss before taxation (4,199) (760)
Tax on operating loss 1,141 228
Loss after taxation (3,058) (532)
Loss on disposal :
Disposal proceeds 2,700 -
Goodwill disposed of (3,426) -
Provision for onerous lease commitments (1,354) -
Pension scheme curtailment credit 602 -
Net assets of subsidiary company disposed (8,345) -
Other costs associated with disposal of subsidiary company (742) -
Loss before taxation (10,565) -
Taxation 225 -
Loss after taxation (10,340) -
Total loss from discontinued operations (13,398) (532)
7. Statement of changes in equity
2007 2006
52 weeks 52 weeks
#000 #000
Profit attributable to equity shareholders (25,557) 14,717
Dividends (5,053) (4,944)
Actuarial gain/(loss) arising in defined benefit pension scheme 783 (1,702)
Tax on items taken directly to equity 152 492
(Losses)/gains on cash flow hedges (1,348) 195
Arising on share issues 32 1,308
Arising on share purchases (2,942) (2,983)
(Decrease)/increase in total equity (33,933) 7,083
Total equity at the beginning of the period 101,569 94,486
Total equity at the end of the period 67,636 101,569
8. Dividends
2007 2006
52 Weeks 52 Weeks
#000's #000's
- final dividend in respect of 2006 of 6.00p (2006 : 5.67p) per share 3,369 3,225
- interim dividend in respect of 2007 of 3.00p (2006 : 3.00p) per share 1,684 1,719
5,053 4,944
A final dividend in respect of the 52 weeks ended 27 January 2007 of 6.00p per
share, amounting to #3,368,000, is to be proposed at the Annual General Meeting
on 24 May 2007. These financial statements do not reflect this dividend
payable.
9 The Company's AGM will be held on Thursday 24 May 2007 at 3 pm.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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