TIDMCC.
RNS Number : 9235Q
Clinton Cards PLC
27 October 2011
Embargoed until 0700 27 October 2011
CLINTON CARDS PLC
("the Company" or "the Group")
Unaudited Preliminary Results for the 52 weeks ended 31 July
2011
KEY HEADLINES
-- Management team strengthened, including the appointment of Darcy Willson-Rymer as Group CEO
-- Successful extension of debt facilities to July 2013
-- Like for like sales reduced by 2.9%, in a challenging trading environment
-- Strategic review underway with an early focus on improving
customer experience, the store portfolio, supply chain management
and digital offering
**Restated
FINANCIAL HIGHLIGHTS 52 weeks 52 weeks
ended ended
31 July 1 August
2011 2010
(unaudited) (unaudited)
--------------------------------------------------- ------------ ------------
Continuing operations GBP'000 GBP'000
Revenue (excluding VAT)
Clintons 312,878 336,922
Birthdays Retail 51,340 57,085
------------ ------------
Group revenue 364,218 394,007
------------ ------------
Adjusted operating profit/(loss) *
Clintons 7,004 19,354
Birthdays Retail (3,801) (516)
------------ ------------
Group adjusted operating profit 3,203 18,838
------------ ------------
Operating (loss)/profit
Clintons 485 16,968
Birthdays Retail (8,597) (1,265)
------------ ------------
Group operating (loss)/profit (8,112) 15,703
------------ ------------
Loss for the period from discontinued operations (2,943) (952)
------------ ------------
Net Debt (excluding finance costs capitalised) 34,327 35,775
------------ ------------
Reconciliation of statutory values to adjusted
measures
Group operating (loss)/profit (8,112) 15,703
Exceptional items:
Net impairment to property, plant and equipment 5,686 477
Charges in respect of onerous leases 4,644 1,189
Loss on sale of property, plant and equipment 985 1,469
------------ ------------
Group adjusted operating profit 3,203 18,838
------------ ------------
** The prior year comparatives have been restated to reflect
the results of Birthdays (Ireland) Limited as discontinued
* In the context of the figures throughout the statement,
adjusted measures are defined as continuing statutory values before
charging losses on sale of property, plant and equipment, the
change in the fair value of financial instruments and exceptional
items
Don Lewin, OBE, Chairman commented:
"Our business is continuing to evolve and, benefiting from a
strengthened management team, we are embarking on a series of
initiatives to improve the Group's performance. Together these
represent important steps both in our ability to continue to meet
the changing needs of our customers and to ensure that we establish
a solid platform for driving investor returns."
Enquiries:
Clinton Cards PLC (27 October 2011) 020 7067 0700
Don Lewin, OBE, Non Executive Chairman (thereafter) 020 8502
3711
Darcy Willson-Rymer, Group Chief Executive Officer
Paul Salador, Group Finance Director
Weber Shandwick Financial 020 7067 0700
Nick Oborne / John Moriarty / Robert Cook
CLINTON CARDS PLC
("the Company" or "the Group")
Unaudited Preliminary Results for the 52 weeks ended 31 July
2011
MESSAGE FROM THE CHAIRMAN
Evolving the Clintons story
Clinton Cards has come through a challenging year, a period in
which a number of iconic retailers have suffered and struggled
against ongoing economic uncertainty. I am therefore pleased to
report that the Group has agreed an extension to the revolving
credit facility with its joint lenders until July 2013.
Our business is continuing to evolve and, benefiting from a
strengthened management team, we are embarking on a series of
initiatives to improve the Group's performance. Together these
represent important steps both in our ability to continue to meet
the changing needs of our customers and to ensure that we establish
a solid platform for driving investor returns.
My main focus will be to continue to work with the Board to
transform the business so that the foundations are established for
realising commercial success, enabling Clintons to prosper in a
rapidly changing retail landscape.
Although the business continues to face a number of challenges,
Clintons remains an exciting and positive place to work, supported
by a strong and resilient presence on our nation's high
streets.
Progress during 2011
Our actions to drive down cost, to differentiate our offering
and to improve profitability will take time to show through in our
results but the months ahead should provide clear evidence of the
progress we are making.
Against this backdrop, I am delighted to welcome to the Board
Darcy Willson-Rymer. Darcy was previously Managing Director of
Starbucks UK. He will build upon the opportunities created by the
changes we have started to make and robustly address the challenges
that lie ahead. Darcy has an excellent track record of managing
change as well as substantial retail experience.
Looking to the future
There is a shared recognition across the Group of the need to
respond to the challenges of having a visible high street presence
and a resilient business model if we are to return to a period of
sustained performance. In the coming months we will outline in more
detail the outcome of the strategic review being led by Darcy
Willson-Rymer and the journey that lies ahead. We start this new
and exciting phase with a very strong brand and an improving
portfolio of stores and products.
Don Lewin, OBE
Chairman
Business and Financial Review
Trading
In the 52 weeks ended 31 July 2011 trading has been conducted in
an environment characterised by low consumer confidence and weak
footfall. These factors impacted significantly on Group sales which
declined by 2.9% on a like for like basis comprising a reduction in
Clintons of 3.4% from 596 stores and an increase of 0.4% from 127
Birthdays stores. Total revenue from continuing operations for the
52 weeks ended 31 July 2011 was GBP364.2m compared with GBP394.0m
for the 52 weeks ended 1 August 2010. Adjusted operating profit for
the Group was GBP3.2m (2010: GBP18.8m). This figure comprises a
profit of GBP7.0m (2010: GBP19.3m) for Clintons and a loss of
GBP3.8m (2010: GBP0.5m loss) for the Birthdays brand.
At the beginning of the period Birthdays was trading from 14
stores in the Republic of Ireland which had suffered from a
combination of declining sales and increased occupancy costs.
During the period under review it became apparent that this
position was unlikely to reverse in the medium term with
expectations that full year losses to July 2011 would escalate to
approximately GBP1.4m. Accordingly the Board decided to seek to
dispose of the operation. On 1(st) March 2011 the Group petitioned
the Court to appoint a liquidator to instigate an orderly winding
up of its subsidiary Birthdays (Ireland) Limited. The largest
unsecured creditor was its parent company, Birthdays Retail
Limited, with GBP1.5m owed.
Against a backdrop of this challenging environment and the
significant reduction in revenues across the Group, we have taken a
more robust view of forecast trading performances which have
impacted carrying values of both assets and liabilities. This has
resulted in a significant increase in impairment of store based
fixed assets of GBP5.7m (2010: GBP0.5m) and an increase in
provision for onerous leases of GBP4.6m (2010: GBP1.2m). These two
non-cash items are considered to be exceptional by their size and
have been shown accordingly in the Group's results.
Capital Investment
In the 52 weeks to 31 July 2011 the Group invested a total of
GBP6.6m in the business. GBP3.7m was invested in the store
portfolio, GBP2.5m on information technology systems and GBP0.4m on
the motor vehicle fleet.
When reviewing the amount invested in new and future stores, it
should be noted that contributions from landlords in the form of
reverse premiums and/or extended rent free periods in excess of
three months amounted to GBP2.0m. This amount is included in
deferred income and credited to the income statement over the
period of the respective leases but excluded from the table
below.
Investment by brand:
Clinton Birthdays
Cards Retail Group
GBPm GBPm GBPm
New and future stores 1.4 0.2 1.6
Modernisation of existing
stores 1.6 0.5 2.1
-------- ---------- ------
3.0 0.7 3.7
Information systems 2.5
Other 0.4
------
Total investment 6.6
======
Group losses arising from the sale of property, plant and
equipment in the period amounted to GBP1.0m (2010: GBP1.5m).
Cash Flow, Interest and Borrowings
Net debt before financing costs at 31 July 2011 was GBP34.3m, a
reduction of GBP1.5m compared with GBP35.8m at 1 August 2010. Cash
generated from operations during the 52 week period amounted to
GBP10.8m compared with GBP25.3m in the 52 weeks to 1 August
2010.
Average net borrowings for the 52 week period were GBP22.9m
compared to GBP26.0m in the 52 weeks to 1 August 2010.
The net interest paid in the period to 31 July 2011 amounted to
GBP1.88m (52 weeks to 1 August 2010: GBP1.96m). Interest on amounts
drawn down against the Group's revolving credit facility is paid at
LIBOR plus a lender's margin. To minimise exposure to fluctuations
in LIBOR, a hedge agreement was entered into on 31 July 2009
expiring in December 2011. This comprises an interest rate swap
with a fixed rate of interest of 1.5% until July 2010 and 2.3%
until December 2011. The Board will review its strategic options
for future hedging arrangements on a monthly basis to ensure
interest rate risks are mitigated.
Net corporation tax paid in the period amounted to GBP0.8m
(2010: GBP4.3m) of which GBP0.4m related to the final instalment
for 2010 and GBP0.4m to the interim instalment for 2011.
Cash expenditure in the 52 weeks to 31 July 2011 on property,
plant and equipment was GBP6.7m (2010: GBP4.6m).
Inventory has increased by GBP6.3m over the 52 week period due
to an increase in seasonal carryover and an extension of our gift
offering. The seasonal stock carryover will be sold through in the
next appropriate season. A higher proportion of stock is made up of
gift items and reflects the increase in gifting revenue generated
during the 52 week period. Management recognise the need for
improvement of controls in relation to stock holdings and we have
now strengthened processes in this area.
Trade creditors have increased primarily due to extended
creditor terms, a proportion of which will reverse in the next 52
week period. In addition rent creditors have increased due to the
August quarter rent payments falling due after the year end.
Financing
We are pleased to report that the Group has agreed an extension
to its revolving credit facility with its joint lenders, Barclays
Bank and Royal Bank of Scotland, until July 2013. The maximum
available draw down will be GBP55m which we would only expect to
fully utilise for a short period in October 2012.
Taxation
There is a Group taxation charge of GBP1.4m (2010: GBP3.6m)
which is offset by a GBP0.4m credit relating to discontinued
operations. GBP1.5m related to deferred tax of which GBP2.6m was an
adjustment to prior year mainly due to revised asset values on
shops acquired from Birthdays Limited in 2009. This also created a
prior year adjustment of (GBP0.5m) for corporation tax. No
corporation tax liability arose for the current 52 week period.
Earnings Per Share and Dividend
The adjusted basic loss per share for the 52 weeks to 31 July
2011 was 2.25p compared to a profit of 5.28p for the 52 weeks to 1
August 2010.
The basic loss per share from continuing operations was 7.26p
(2010: profit 3.57p)
The Board has decided not to propose a final dividend for the 52
weeks to 31 July 2011 (2010:Nil). In the longer term, the Board
remains committed to paying a dividend when there is evidence of a
consistent upward trend in profitability.
Shareholders' Funds
Total shareholders' funds at 31 July 2011 amounted to GBP23.0m
(2010: GBP38.2m). Net assets per share at the period end were 11.1p
(2010: 18.48p).
Store Development
The Clintons brand
In the 52 week period, we opened one new store, relocated six
stores and disposed of 14 stores resulting in 641 stores trading at
31 July 2011 with a trading area of 1.24 million square feet. The
average trading area of a Clintons store at the year end is 1,931
square feet.
Utilising the experience gained from our four new format stores,
which have had positive customer feedback, we have designed a lower
cost refit to modernise all stores. These will be trialled in three
additional stores before Christmas.
The Birthdays brand
In the 52 week period, we relocated two stores and disposed of
20 stores, including 14 relating to the liquidation of Birthdays
(Ireland) Limited, resulting in 156 stores trading at 31 July 2011.
The average trading area of a Birthdays store at the year end is
1,746 square feet and a total trading area of 0.27 million square
feet.
Staff
The average number of staff employed during the period was 8,350
(2010: 8,463). Administrative staff totalled 231 (2010: 236) and
store and field staff totalled 8,119 (2010: 8,227). Many of the
store staff are part time employees and the number of full time
equivalent staff was 4,795 (2010: 5,065). Staff have moved across
the two brands either as a result of re-branding stores or to fill
vacancies at all levels within the business. The Group operates a
policy of appointing internal candidates wherever possible to fill
any vacancies which arise. Clearly the operation of two sizeable
chains enhances these opportunities.
Strategy and Outlook
The first 12 weeks of the current financial year to 23(rd)
October have seen like for like sales 1.5% lower than the same
period last year, with the Clinton brand 1.5% lower and Birthdays
reduced by 1.3%.
The strengthened management team is undertaking a review of the
Group's operations, with an early focus on improving customer
experience, our store portfolio, supply chain management and
digital offering. While the current macro-economic environment
remains challenging, the team believes that this review and
subsequent actions will benefit the Group's future performance. The
team is excited about taking the business forward.
Darcy Willson-Rymer
Group Chief Executive Officer
Paul Salador
Group Finance Director
Unaudited Consolidated Statement of Comprehensive Income
For the 52 weeks to 31 July 2011
**Restated
52 weeks 52 weeks
ended ended
31 July 1 August
2011 2010
(unaudited) (unaudited)
Continuing operations Note GBP'000 GBP'000
Revenue (including VAT) 432,037 457,459
------------ ------------
Revenue (excluding VAT) 4 364,218 394,007
Cost of sales (including exceptional items) (357,589) (365,374)
------------ ------------
Gross profit 6,629 28,633
Other operating income 94 148
Loss on sale of property, plant and equipment (985) (1,469)
Administrative expenses (13,850) (11,609)
Operating (loss)/profit (8,112) 15,703
------------ ------------
Analysed as:
Operating profit before exceptional items 2,218 17,369
Net impairment to property, plant and equipment
* (5,686) (477)
Charges in respect of onerous leases * (4,644) (1,189)
------------ ------------
Operating (loss)/profit 4 (8,112) 15,703
Finance income 96 253
Finance costs (2,992) (3,149)
Change in fair value of financial instruments 356 (824)
Unwinding of property provision discount (10) (7)
------------ ------------
(Loss)/profit before taxation (10,662) 11,976
Taxation 7 (1,428) (3,646)
------------ ------------
(Loss)/profit from continuing operations (12,090) 8,330
Loss for the period from discontinued operations (2,943) (952)
------------ ------------
(Loss)/profit for the period attributable
to owners of the company (15,033) 7,378
Other comprehensive income (net of tax):
Currency translation differences (233) (92)
------------ ------------
Total comprehensive (expenses)/income for
the period attributable to owners of the
company (15,266) 7,286
------------ ------------
Earnings/(loss) per share for profit attributable
to owners of the company 8
From continuing operations:
Basic (loss)/earnings per share (pence) (5.66) 4.03
Diluted (loss)/earnings per share (pence) (5.66) 4.00
From continuing & discontinued operations:
Basic (loss)/earnings per share (pence) (7.26) 3.57
Diluted (loss)/earnings per share (pence) (7.26) 3.54
** The prior year comparatives have been restated to reflect the
results of Birthdays (Ireland) Limited as discontinued
Non-GAAP measure: adjusted profit before
taxation from continuing operations 2 GBP'000 GBP'000
(Loss)/profit before taxation (10,662) 11,976
Adjustments for:
IAS32 and IAS39 'Financial Instruments'
- Fair value remeasurements (356) 824
Loss on disposal of property, plant and
equipment 985 1,469
Exceptional items * 10,330 1,666
--------- --------
Adjusted profit before taxation 297 15,935
--------- --------
Unaudited Consolidated Balance Sheet
as at 31 July 2011
As at As at
31 July 1 August
2011 2010
(unaudited) (audited)
Note GBP'000 GBP'000
Non current assets
Goodwill 17,326 17,326
Other intangible assets 1,750 1,750
Property, plant and equipment 9 48,729 58,162
Deferred tax asset - 172
------------ ----------
67,805 77,410
------------ ----------
Current assets
Inventories 10 43,202 37,653
Trade and other receivables 11 18,917 17,882
Current tax asset 886 -
Cash and cash equivalents 12 19,673 7,225
------------ ----------
82,678 62,760
------------ ----------
Total assets 150,483 140,170
------------ ----------
Current liabilities
Borrowings (53,527) (41,566)
Trade and other payables 13 (55,458) (47,370)
Derivative financial instruments (218) (574)
Current tax liabilities - (456)
Provisions 14 (5,221) (639)
------------ ----------
(114,424) (90,605)
------------ ----------
Net current liabilities (31,746) (27,845)
------------ ----------
Non current liabilities
Deferred tax liabilities (1,289) -
Other non current liabilities (9,025) (9,417)
Provisions 14 (2,772) (1,909)
------------ ----------
(13,086) (11,326)
------------ ----------
Total liabilities (127,510) (101,931)
------------ ----------
Net assets 22,973 38,239
------------ ----------
Shareholders' equity
Called up share capital 20,693 20,693
Share premium account 5,873 5,873
Capital redemption reserve 50 50
Translation reserve - 233
Other reserves 308 308
Retained Earnings (3,951) 11,082
------------ ----------
Total equity 22,973 38,239
------------ ----------
Unaudited Consolidated Statement of Changes in Equity
as at 31 July 2011
Called-up Share Capital
share premium redemption Translation Other Retained Total
capital account reserve reserve reserves earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 2 August 2009 20,693 5,873 50 325 308 3,704 30,953
---------- --------- ------------ ------------ ---------- ---------- ---------
Profit for the
period - - - - - 7,378 7,378
Other comprehensive
income:
Currency translation
differences - - - (92) - - (92)
---------- --------- ------------ ------------ ---------- ---------- ---------
Total comprehensive
income/(expense)
for the period - - - (92) - 7,378 7,286
At 1 August 2010 20,693 5,873 50 233 308 11,082 38,239
---------- --------- ------------ ------------ ---------- ---------- ---------
(Loss)/profit
for the period - - - - - (15,033) (15,033)
Other comprehensive
income:
Currency translation
differences - - - (233) - - (233)
---------- --------- ------------ ------------ ---------- ---------- ---------
Total comprehensive
income/(expense)
for the period - - - (233) - (15,033) (15,266)
---------- ----------
At 31 July 2011 20,693 5,873 50 - 308 (3,951) 22,973
---------- --------- ------------ ------------ ---------- ---------- ---------
Unaudited Consolidated Cash Flow Statement
For the 52 weeks ended 31 July 2011
**Restated
52 weeks 52 weeks
ended ended
31 July 1 August
2011 2010
(unaudited) (unaudited)
Note GBP'000 GBP'000
Cash flows from operating activities
(Loss)/profit before tax from continuing
operations (10,662) 11,976
Loss before tax from discontinued operations (3,329) (952)
Adjustments for:
Net finance costs 2,550 3,752
Depreciation 8,380 9,487
Net impairment of property, plant and equipment 5,686 657
Loss on sale of property, plant and equipment 985 1,469
Net assets written off relating to discontinued
operations 1,360 -
------------ ------------
Operating cash flows before movements in
working capital 4,970 26,389
Increase in inventories (6,283) (1,436)
(Increase)/decrease in trade and other receivables (1,647) 1,443
Increase/(decrease) in trade and other payables 8,270 (1,930)
Movement in provisions 5,445 785
------------ ------------
Cash generated from operations 10,755 25,251
Interest received 96 253
Interest paid (1,977) (2,216)
Net taxation paid (808) (4,252)
------------ ------------
Net cash generated from operating activities 8,066 19,036
------------ ------------
Cash flows from investing activities
Cash disposed of with discontinued operations (486) -
Proceeds/(payments) relating to disposal
of property, plant and equipment 539 (246)
Purchase of property, plant and equipment (6,671) (4,621)
------------ ------------
Net cash used in investing activities (6,618) (4,867)
------------ ------------
Cash flows from financing activities
Increase/(decrease) in borrowings 15 11,000 (16,000)
Net cash used in financing activities 11,000 (16,000)
------------ ------------
Net increase/(decrease) in cash and cash
equivalents 12,448 (1,831)
Cash and cash equivalents at beginning of
period 7,225 9,056
Cash and cash equivalents at end of period 12 19,673 7,225
------------ ------------
** The prior year comparatives have been restated to reflect the
results of Birthdays (Ireland) Limited as discontinued
The net debt reconciliation is given in note 14
Notes to the Preliminary Financial Information
1 General Information
The principal activity of the Group is the specialist retailing
of greetings cards and associated products. This is carried out
through two brands on the high street, Clinton Cards and
Birthdays.
Clinton Cards PLC is a Public Limited Company incorporated and
domiciled in England and Wales.
The preliminary financial information is unaudited and was
approved by the Board of Directors on 25 October 2011.
2 Basis of preparation
This unaudited preliminary consolidated financial information
has been prepared in accordance with the Disclosure and
Transparency Rules of the UK Financial Services Authority and
International Financial Reporting Standards (IFRS) and
International Financial Reporting Interpretation Committee (IFRIC)
interpretations, as endorsed by the European Union (EU). The
accounting policies applied are consistent with those described in
the Annual Report and Financial Statements 2010, apart from those
arising from the adoption of new International Financial Reporting
Standards detailed below, which will be described in more detail in
the Annual Report and Financial Statements 2011.
This consolidated financial information does not constitute
statutory financial statements for the 52 weeks ended 31 July 2011
or the 52 weeks ended 1 August 2010 as defined in section 434 of
the Companies Act 2006. The Annual Report and Financial Statements
for the 52 weeks ended 1 August 2010 were approved by the Board of
Directors and have been filed with the Registrar of Companies and
the Annual Report and Financial Statements for 2011 will be filed
with the Registrar in due course. The report of the auditors on
those financial statements was unqualified, did not contain an
emphasis of matter paragraph and did not contain any statement
under section 498 of the Companies Act 2006.
Use of adjusted measures
Adjusted operating profits or losses and adjusted net profits or
losses are defined as operating profits or losses and net profits
or losses before charging profits or losses on the sale of
property, plant and equipment, the movement in the fair value of
financial instruments and exceptional profits on acquisition.
3 Accounting policies
The accounting policies adopted are consistent with those of the
annual financial statements for the 52 weeks ended 31 July 2011 as
described in those financial statements.
The following new standards have been adopted in the period and
have had an impact on the Group:
-- IFRS 5 (amendment) 'Non-current assets held for sale and discontinued operations'
The following new standards and amendments to existing standards
have been published and are mandatory for the Group's accounting
periods for the financial year ending 31 July 2011, but do not
currently have a material impact on the Group:
-- IAS 1 (amendment) 'Presentation of financial statements'
-- IAS 36 (amendment) 'Impairment of assets'
-- IAS 32 (amendment) 'Classification of rights issues'
-- IFRIC 19 'Extinguishing financial liabilities with equity instruments'
The following new standards and amendments to existing standards
have been issued but not effective for the year ending 31 July 2011
and not early adopted:
-- IFRS 9 'Financial instruments'
-- Revised IAS 24 (revised) 'Related party disclosures'
-- IFRIC 14 (amendment) 'Prepayments of a minimum funding requirement'
4. Segmental information
For management purposes, the Group is currently organised into
two operating divisions namely Clinton Cards and Birthdays Retail.
These divisions are the basis on which the Group reports its
segment information.
Clinton Birthdays Continuing
Store information Cards Retail operations
No. No. No.
Store numbers
Stores at 2 August 2009 681 180 861
Additions 2 17 19
Disposals (including relocations) (30) (21) (51)
Relocations 1 - 1
-------- ---------- ------------
Stores at 1 August 2010 654 176 830
Additions 1 6 7
Disposals (including relocations) (20) (14) (34)
Relocations 6 2 8
Discontinued operations - (14) (14)
-------- ---------- ------------
Stores at 31 July 2011 641 156 797
-------- ---------- ------------
Trading area (square feet) 000 000 000
Trading area at 2 August 2009 1,307 298 1,605
Additions 5 28 33
Disposals (42) (29) (71)
Relocations (8) - (8)
-------- ---------- ------------
Trading area at 1 August 2010 1,262 297 1,559
Additions 3 5 8
Disposals (41) (17) (58)
Relocations 13 3 16
Discontinued operations - (16) (16)
-------- ---------- ------------
Trading area at 31 July 2011 1,237 272 1,509
-------- ---------- ------------
Average store size sq ft sq ft sq ft
At 2 August 2009 1,919 1,657 1,864
At 1 August 2010 1,930 1,688 1,878
At 31 July 2011 1,931 1,746 1,895
Segmental information
4 (continued)
Clinton Birthdays Continuing Discontinued
Income statement Cards Retail operations operations Group
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
52 weeks ended 31 July
2011
Revenue (excluding VAT) 312,878 51,340 364,218 3,347 367,565
-------- ---------- ------------ ------------- ---------
Adjusted operating profit/(loss) 7,004 (3,801) 3,203 (558) 2,645
Net impairment to property,
plant and equipment (4,126) (1,560) (5,686) - (5,686)
Charges in respect of
onerous leases (1,819) (2,825) (4,644) (1,411) (6,055)
Loss on sale of property,
plant and equipment (574) (411) (985) - (985)
-------- ---------- ------------ ------------- ---------
Operating profit/(loss)
as reported 485 (8,597) (8,112) (1,969) (10,081)
Assets written off on
liquidation - (1,360) (1,360)
Net finance costs (2,550) - (2,550)
------------ ------------- ---------
Loss before tax (10,662) (3,329) (13,991)
Taxation (1,428) 386 (1,042)
------------ ------------- ---------
Loss after tax (12,090) (2,943) (15,033)
------------ ------------- ---------
52 weeks ended 1 August
2010
Revenue (excluding VAT) 336,922 57,085 394,007 6,035 400,042
-------- ---------- ------------ ------------- ---------
Adjusted operating profit/(loss) 19,354 (516) 18,838 (747) 18,091
Net impairment to property,
plant and equipment (364) (113) (477) (180) (657)
Charges in respect of
onerous leases (1,189) - (1,189) - (1,189)
Loss on sale of property,
plant and equipment (833) (636) (1,469) - (1,469)
-------- ---------- ------------ ------------- ---------
Operating profit/(loss)
as reported 16,968 (1,265) 15,703 (927) 14,776
Net finance costs (3,727) (25) (3,752)
------------ ------------- ---------
Profit before tax 11,976 (952) 11,024
Taxation (3,646) - (3,646)
------------ ------------- ---------
Profit after tax 8,330 (952) 7,378
------------ ------------- ---------
Clinton Birthdays Continuing Discontinued
Cards Retail operations operations Group
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance Sheet
Assets at 31 July 2011 126,742 23,741 150,483 - 150,483
Liabilities as at 31
July 2011 (61,649) (12,334) (73,983) - (73,983)
--------- ---------- ------------ ------------- ---------
Net assets excluding
Group borrowings 65,093 11,407 76,500 - 76,500
--------- ---------- ------------ -------------
Group borrowings (53,527)
---------
Net assets as at 31
July 2011 22,973
---------
Assets at 1 August 2010 116,731 21,644 138,375 1,795 140,170
Liabilities as at 1
August 2010 (52,608) (6,526) (59,134) (1,231) (60,365)
--------- ---------- ------------ ------------- ---------
Net assets excluding
Group borrowings 64,123 15,118 79,241 564 79,805
--------- ---------- ------------ -------------
Group borrowings (41,566)
---------
Net assets as at 1 August
2010 38,239
---------
Other segment information
Clinton Birthdays Continuing Discontinued
Cards Retail operations operations Group
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Non current assets
52 weeks ended 31 July
2011
Additions to property,
plant and equipment 5,927 682 6,608 4 6,612
Depreciation 7,352 988 8,340 40 8,380
Impairment recognised
in the period 4,511 1,602 6,113 - 6,113
Impairment reversed
in the period (384) (43) (427) - (427)
52 weeks ended 1 August
2010
Additions to property,
plant and equipment 2,860 1,465 4,325 - 4,325
Depreciation 8,279 1,208 9,487 - 9,487
Impairment recognised
in the period 1,681 100 1,781 180 1,961
Impairment reversed
in the period (1,317) 13 (1,304) - (1,304)
Revenue principally arises from the provision of goods. There
are no sales between the business segments.
5 Discontinued operations
After a period of actively seeking to sell the Birthdays Ireland
business, a decision was taken to explore alternative options. On 1
March 2011 following a petition placed before the Courts, Birthdays
(Ireland) Limited was placed into liquidation. As control of the
Company ceased at that date the results and assets were
deconsolidated and treated as discontinued in the results of the 52
weeks ended 31 July 2011.
As a result, the prior period comparatives have been restated to
remove the results of Birthdays (Ireland) Limited which are shown
as discontinued operations.
52 weeks 52 weeks
ended ended
31 July 1 August
2011 2010
GBP'000 GBP'000
Revenue 3,347 6,035
Expenses (3,905) (6,987)
--------- ---------
Loss before tax of discontinued operations (558) (952)
Tax 386 -
--------- ---------
Loss after tax of discontinued operations (172) (952)
Net assets written off at liquidation (1,360) -
Provision for onerous lease (1,411) -
--------- ---------
(2,943) (952)
--------- ---------
The cash flows of Birthdays' Republic of
Ireland operations up to the date of the
liquidation are shown below:
Operating cash flows 332 (661)
Investing cash flows (4) (7)
--------- ---------
Total cash flows 328 (669)
--------- ---------
Balance Sheet
Property, plant and equipment 455 491
Inventories 913 736
Deferred tax asset (116) (116)
Trade and other receivables 279 379
Cash and cash equivalents 486 158
Trade, other payables and provisions (658) (484)
--------- ---------
Net assets written off relating to discontinued
operations 1,360 1,165
--------- ---------
Basic and diluted loss per share (pence) (1.42) (0.46)
6 Finance Costs
Discontinued
Continuing operations operations
------------------------ --------------------
52 weeks 52 weeks 52 weeks 52 weeks
2011 2010 2011 2010
Finance income: GBP'000 GBP'000 GBP'000 GBP'000
Interest on bank deposits 96 253 - -
Total finance income 96 253 - -
----------- ----------- --------- ---------
Finance costs:
Interest payable on bank loans
and overdraft (2,008) (2,189) - -
Amortisation of finance costs (984) (985) - -
Total finance costs (2,992) (3,174) - -
----------- ----------- --------- ---------
Change in fair value of derivative
financial instruments 356 (824) - -
----------- ----------- --------- ---------
Unwinding of property provision
discount (10) (7) - -
----------- ----------- --------- ---------
Finance costs - net (2,550) (3,752) - -
----------- ----------- --------- ---------
7 Taxation
Discontinued
Continuing operations operations
------------------------ --------------------
52 weeks 52 weeks 52 weeks 52 weeks
2011 2010 2011 2010
Analysis of charge in period: GBP'000 GBP'000 GBP'000 GBP'000
UK corporation tax
Current period 386 3,991 (386) -
Previous periods (535) (584) - -
----------- ----------- --------- ---------
Total current tax (credit)/charge (149) 3,407 (386) -
----------- ----------- --------- ---------
Deferred tax
Current period (1,065) (183) - -
Previous periods 2,642 422 - -
----------- ----------- --------- ---------
Total deferred tax charge 1,577 239 - -
----------- ----------- --------- ---------
Taxation charge/(credit) for
the period 1,428 3,646 (386) -
----------- ----------- --------- ---------
Reconciliation between expected
and actual tax charge:
(Loss)/profit before taxation (10,662) 11,976 (3,329) (952)
----------- ----------- --------- ---------
(Loss)/profit before tax at
standard rate of UK corporation
tax of 27.33% (2010: 28%) (2,914) 3,353 (910) (266)
Tax rate differences 245 29 40 (29)
Expenses not deductible for
tax purposes 1,092 336 251 -
Prior year adjustment to corporation
tax (534) (584) - -
Group relief surrendered (229) (222) 229 222
Non qualifying depreciation
and disposal of fixed assets 1,126 312 4 73
Prior year adjustment to deferred
tax 2,642 422 - -
----------- ----------- --------- ---------
Taxation charge/(credit) for
the period 1,428 3,646 (386) -
----------- ----------- --------- ---------
There is no tax associated with items within Other Comprehensive
Income (2010: Nil)
8 Earnings per share
The basic earnings per share is calculated by dividing the
(loss)/profit after taxation by the weighted average number of
shares in issue during the period. For diluted earnings per share
the weighted average number of ordinary shares is increased to
assume conversion of all dilutive potential ordinary shares.
52 weeks to 31 July 52 weeks to 1 August
2011 2010
-------------------------------- --------------------------------
Weighted Weighted
average Per average Per
number share number share
Earnings of shares amount Earnings of shares amount
GBP'000s '000 pence GBP'000s '000 pence
(Loss)/profit
from continuing
operations (12,090) 206,925 (5.84) 8,330 206,925 4.03
Loss from discontinued
operations (2,943) - (1.42) (952) - (0.46)
--------- ----------- -------- --------- ----------- --------
Basic (loss)/profit
per share (15,033) 206,925 (7.26) 7,378 206,925 3.57
Effect of dilutive
warrants issued - - - - 1,210 -
--------- ----------- -------- --------- ----------- --------
Diluted (loss)/profit
per share (15,033) 206,925 (7.26) 7,378 208,135 3.54
========= =========== ======== ========= =========== ========
Supplementary earnings per share figures are presented as set
out below. These exclude the effect of losses on sale of property,
plant and equipment, the change in the fair value of financial
instruments and exceptional items.
52 weeks to 31 July 52 weeks to 1 August
2011 2010
-------------------------------- --------------------------------
Weighted Weighted
average Per average Per
number share number share
Earnings of shares amount Earnings of shares amount
GBP'000s '000 pence GBP'000s '000 pence
Basic (loss)/profit
per share (15,033) 206,925 (7.26) 7,378 206,925 3.57
Net impairment
to property,
plant and equipment 5,686 - 2.74 477 - 0.23
Charges in respect
of onerous leases 4,644 - 2.24 1,189 - 0.57
Loss from discontinued
operations before
tax 3,329 - 1.61 952 - 0.46
Change in fair
value of financial
instruments (356) - (0.17) 824 - 0.40
Loss on sale
of property,
plant and equipment 985 - 0.48 1,469 - 0.71
Related taxation
effect (3,905) - (1.89) (1,375) - (0.66)
--------- ----------- -------- --------- ----------- --------
Basic adjusted
(loss)/profit
from continuing
operations (4,651) 206,925 (2.25) 10,914 206,925 5.28
Effect of dilutive
warrants issued - - - - 1,210 (0.02)
--------- ----------- -------- --------- ----------- --------
Diluted adjusted
(loss)/ profit
from continuing
operations (4,651) 206,925 (2.25) 10,914 208,135 5.26
========= =========== ======== ========= =========== ========
9 Property, plant and equipment
Freehold
land Short Fixtures
and leasehold and Motor Computer
buildings property fittings Vehicles equipment Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Group
Cost
At 2 August 2009 5,585 16,730 82,961 2,108 8,722 116,106
Additions - 782 1,210 509 1,824 4,325
Disposals - (350) (2,651) (632) - (3,633)
----------- ----------- ---------- ---------- ----------- --------
At 1 August 2010 5,585 17,162 81,520 1,985 10,546 116,798
Additions - 929 2,715 436 2,532 6,612
Disposals - (643) (3,510) (356) (271) (4,780)
Transfer to discontinued
operations - (261) (2,023) - (40) (2,324)
----------- ----------- ---------- ---------- ----------- --------
At 31 July 2011 5,585 17,187 78,702 2,065 12,767 116,306
----------- ----------- ---------- ---------- ----------- --------
Accumulated depreciation
and impairment
At 2 August 2009 325 6,755 39,379 1,442 3,001 50,902
Charge for the period 32 1,126 6,782 275 1,272 9,487
Impairment recognised
in the period - 541 1,420 - - 1,961
Impairment reversed
in the period - (355) (949) - - (1,304)
Disposals - (238) (1,698) (474) - (2,410)
----------- ----------- ---------- ---------- ----------- --------
At 1 August 2010 357 7,829 44,934 1,243 4,273 58,636
Charge for the period 32 979 5,524 286 1,559 8,380
Impairment recognised
in the period - 1,463 4,650 - - 6,113
Impairment reversed
in the period - (194) (233) - - (427)
Disposals - (324) (2,404) (257) (271) (3,256)
Transfer to discontinued
operations - (150) (1,694) - (25) (1,869)
----------- ----------- ---------- ---------- ----------- --------
At 31 July 2011 389 9,603 50,777 1,272 5,536 67,577
----------- ----------- ---------- ---------- ----------- --------
Net book value at
31 July 2011 5,196 7,584 27,925 793 7,231 48,729
----------- ----------- ---------- ---------- ----------- --------
Net book value at
1 August 2010 5,228 9,333 36,586 742 6,273 58,162
----------- ----------- ---------- ---------- ----------- --------
10 Inventories
Inventories represent finished goods for resale, excluding any
inventories held on a sale or return basis. The value of sale or
return inventories at 31 July 2011 was GBP1.0m (2010: GBP0.7m).
11 Trade and other receivables
31 July 1 August
2011 2010
GBP'000 GBP'000
Other receivables 1,780 957
Prepayments 17,137 16,925
-------- ---------
18,917 17,882
-------- ---------
Movement on the provision for impairment of
trade and other receivables are as follows:
Beginning of financial period 4 214
Provision for receivables impairment 3 -
Amounts utilised - (210)
-------- ---------
End of financial period 7 4
-------- ---------
12 Cash and cash equivalents
31 July 1 August
2011 2010
GBP'000 GBP'000
Cash in hand and at bank held in Sterling 14,749 5,427
Sterling equivalent of cash in hand and at
bank held in Euros - 148
Short term deposits held in Sterling 4,924 1,650
19,673 7,225
-------- ---------
13 Trade and other payables
31 July 1 August
2011 2010
GBP'000 GBP'000
Trade payables 31,793 24,879
Other taxation and social security 3,710 3,980
Other payables 9,397 6,765
Deferred income 1,632 1,443
Other accruals 8,926 10,303
-------- ---------
55,458 47,370
-------- ---------
14 Provisions
Onerous Employee
leases benefits Total
Group GBP'000 GBP'000 GBP'000
At 2 August 2009 1,556 108 1,664
Utilised in the period (337) (30) (367)
Charged in the period 1,189 55 1,244
Unwinding of discount 7 - 7
-------- ---------- ---------
At 1 August 2010 2,415 133 2,548
Utilised in the period (611) (83) (694)
Charged in the period 6,055 74 6,129
Unwinding of discount 10 - 10
-------- ---------- ---------
At 31 July 2011 7,869 124 7,993
-------- ---------- ---------
The maturity profile of the provisions
is as follows:
As at As at
31 July 1 August
2011 2010
GBP'000 GBP'000
Within one year 5,221 639
---------- ---------
Current liabilities 5,221 639
---------- ---------
Between one and five years 2,031 1,816
More than five years 741 93
---------- ---------
Non current liabilities 2,772 1,909
---------- ---------
Total provisions 7,993 2,548
---------- ---------
The Company has no provisions.
15 Reconciliation of net debt
Cash Borrowings Total
Group GBP'000 GBP'000 GBP'000
Balance at 2 August 2009 9,056 (56,581) (47,525)
Cash flow (1,831) 16,000 14,169
-------- ----------- ---------
Amortisation of finance costs - (985) (985)
Balance at 1 August 2010 7,225 (41,566) (34,341)
-------- ----------- ---------
Cash flow 12,448 (11,000) 1,448
Additional finance costs - 23 23
Amortisation of finance costs - (984) (984)
-------- ----------- ---------
Balance at 31 July 2011 19,673 (53,527) (33,854)
Financing costs capitalised - (473) (473)
-------- ----------- ---------
Net debt before financing costs 19,673 (54,000) (34,327)
======== =========== =========
16 Dividends
The directors are not proposing a final dividend in respect of
the financial period ended 31 July 2011 (2010:Nil).
This information is provided by RNS
The company news service from the London Stock Exchange
END
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