Final Results
29 Mai 2001 - 2:58PM
UK Regulatory
RNS Number:3072E
Charnos PLC
29 May 2001
STATEMENT BY THE CHAIRMAN ON THE PRELIMINARY ANNOUNCEMENT OF UNAUDITED RESULTS
FOR THE YEAR ENDED 31ST DECEMBER 2000
The preliminary announcement of the unaudited results for the year ended 31st
December 2000 show a pre tax loss of #6,754,000 for the Group compared to a
pre tax loss of #1,580,000 in 1999. External Group sales fell from #
81,959,000 to #73,828,000.
These are disappointing figures reflecting the problems we share with other
British textile companies, especially those associated closely with Marks &
Spencer. This historic association with Marks & Spencer has been central to
the development of the Charnos Group. Marks & Spencer continue to acknowledge
the value of our contribution by maintaining our role as a major supplier of
ladies' and children's hosiery, and of knitwear. During 2000 we were
re-introduced as a lingerie supplier following the successful launch of the
Bioform Bra. At the same time the continued pressures Marks & Spencer are
experiencing have had a severe impact on the Charnos results in terms of
reduced margins.
This reduction in margins, coupled with the sales decline, had a significant
impact on the cash flows during the year.
Whilst the Balance Sheet as at 31st December 2000 was robust the Group Board
are addressing the cash flow requirements within the Group and are actively
working with the Group's Bankers to ensure that appropriate funding is in
place to meet the Group requirement over the next 12 months taking into
account the significant seasonal trading of the business. The auditors have
advised that they may require an explanatory paragraph in their audit report
depending on the outcome of these discussions.
The rearrangement of various financial facilities does require an amendment to
the Company's Articles of Association in relation to borrowing powers and it
is for this reason that this announcement, prepared on a going concern basis,
is made ahead of the finalisation of the audited accounts.
Whilst trading remains difficult the Board are encouraged by performance in
the first quarter of 2001 which shows a significant improvement over the start
of 2000. They are also confident that measures have been put in place to
improve the performance of the business over the next 12 to 18 months.
Difficult decisions have had to be taken affecting our employees. Their
skills, enthusiasm and commitment are most vital assets within the business
and I am thankful for their understanding.
We believe the Group continues to have an important role in the British
textile industry and that this will be assured by our strong management and
our human and financial resources.
ROLF NOSKWITH
CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the year ended
31st DECEMBER 2000
2000 1999
(unaudited) (audited)
Notes #'000 #'000
TURNOVER.................................. 2 73,828 81,959
COST OF SALES................................ (64,477) (66,825)
GROSS PROFIT.................................... 9,351 15,134
NET OPERATING
EXPENSES...................................... (16,016) (17,021)
OPERATING LOSS BEFORE
EXCEPTIONAL ITEM............................. (6,057) (896)
EXCEPTIONAL ITEM............................ 3 (608) (991)
OPERATING LOSS AFTER
EXCEPTIONAL ITEM........................ (6,665) (1,887)
PROFIT ON SALE OF FIXED ASSETS............. 321 445
INTEREST RECEIVABLE & SIMILAR INCOME....... 75 130
INTEREST PAYABLE........................... (485) (268)
LOSS ON ORDINARY ACTIVITIES
BEFORE TAXATION................. (6,754) (1,580)
TAX ON LOSS ON ORDINARY ACTIVITIES......... 4 (2) 874
LOSS FOR THE FINANCIAL YEAR................ (6,756) (706)
DIVIDENDS (INCLUDING NON-EQUITY)........... 5 (35) (381)
TRANSFER FROM RESERVES............... (6,791) (1,087)
Loss per "A" ordinary share of 25p each... 6 (673.5)p (63.0)p
All amounts under each heading between turnover and operating profit relate to
continuing operations of the Group.
There have been no recognised gains or losses other than those shown above.
CONSOLIDATED BALANCE SHEET - 31st DECEMBER 2000
2000 1999
(unaudited) (audited)
#'000 #'000 #'000 #'000
FIXED ASSETS
Tangible assets................. 14,509 16,007
CURRENT ASSETS
Stocks........................... 13,560 15,078
Debtors.......................... 7,792 7,050
Investments...................... 1,065 5,500
Cash at bank and in hand......... 2,435 3,185
24,852 30,813
Less:
CURRENT LIABILITIES
Creditors - amounts falling due
within one year............. (15,812) (15,821)
NET CURRENT ASSETS
9,040 14,992
TOTAL ASSETS LESS CURRENT LIABILITIES 23,549 30,999
CREDITORS - amounts falling due after more
than one year........... (4,239) (4,898)
PROVISIONS FOR LIABILITIES
AND CHARGES.................... - -
19,310 26,101
CAPITAL AND RESERVES
CALLED UP SHARE CAPITAL 1,000 1,000
PROFIT AND LOSS ACCOUNT 16,285 23,076
OTHER RESERVES 2,025 2,025
Equity shareholders' funds 18,810 25,601
Non-equity shareholders' funds 500 500
TOTAL SHAREHOLDERS' FUNDS 19,310 26,101
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31st DECEMBER 2000
2000 1999
(unaudited) (audited)
#'000 #'000 #'000 #'000
Net cash (outflow)/inflow (2,123) 3,301
from operating activities
Returns on investments and
servicing of finance
Interest received 59 155
Interest paid (484) (268)
Preference (35) (35)
dividends paid
Net cash outflow from
returns on investments (460) (148)
and servicing of finance
Taxation
Corporation tax repaid 446 140
(including advance
corporation tax)
Capital expenditure and
financial investment
Payments to (2,774) (2,841)
acquire tangible
fixed assets
Receipts - 540
from sales
of freehold
property
Receipts 513 241
from sales
of tangible
fixed
assets
Government 560 866
grants
received
Net cash outflow from
capital expenditure and
financial investment (1,701) (1,194)
Equity dividends paid (347) (5,554)
Net cash (outflow)
before management of
liquid resources and (4,185) (3,455)
financing
Management of
liquid resources:
Sale of current 4,435 1,000
asset investments
Financing
Bank loan (1,000) (1,000)
(Decrease) in cash (750) (3,455)
Reconciliation of operating profit to net 2000 1999
cash (outflow)/inflow from operating profits #'000 #'000
Operating loss (6,665) (1,887)
Depreciation charges 4,116 5,719
Amortisation of Government grants (1,604) (2,418)
Profit on sale of tangible fixed assets (357) (100)
Decrease in stocks 1,518 1,622
(Increase)/decrease in debtors (1,177) 1,589
Increase/(decrease) in creditors 2,046 (1,224)
Net cash (outflow)/inflow (2,123) 3,301
from operating activities
NOTES TO THE PRELIMINARY UNAUDITED RESULTS
1. Preparation of Preliminary Unaudited Results
This preliminary announcement has been agreed with the company's auditors.
The consolidated profit and loss account, balance sheet and cash flow
statement, as shown in the preliminary announcement, do not constitute the
statutory accounts of Charnos plc for the year ended 31 December 2000.
The 1999 statutory accounts have been filed with the Registrar of Companies
and contained an unqualified audit report and did not contain a statement
under Section 237(2) or 237(3) of the Companies Act 1985.
As explained in the attached Chairman's statement, rearrangements are
currently being made to various financial facilities which require an
amendment to the Company's Articles of Association relating to borrowing
powers and it is for this reason that this announcement is made ahead of the
audited accounts.
The accounts for the year ended 31 December 2000 have not yet been delivered
to the Registrar, nor have the auditors reported on them. The auditors have
indicated that their report may contain an explanatory paragraph relating to
the financial facilities referred to above.
2. Turnover
Turnover is derived in the main in the United Kingdom and represents one
business segment.
3. Exceptional Item
The exceptional item represents costs associated with reorganisation and
severance payments.
4. Taxation
The Group has no tax charge for the year due to losses arising. The credit in
1999, calculated at 30%, arose on the losses for the year being relieved
against previous year's profits.
5. Dividend
The Board is not recommending a dividend on either 'A' or 'B' ordinary shares
(1999: 'A' ordinary #34.3425; 'B' ordinary #nil). Preference share dividends
continue to be paid on the appropriate due dates.
6. Loss per Ordinary Share
The basic loss per ordinary share is calculated on the loss for the year of
#6,756,000 (1999: #706,000) less preference dividends of #35,000 (1999: #35,000)
and the weighted average number of 'A' ordinary shares in issue during 2000
which was 1,008,300 (1999: 1,176,753).
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