RNS Number:3143Q
Airea PLC
18 March 2008
AIREA plc (the "Company")
18 March 2008
Interim results
The Company is pleased to announce its interim results for the six months ended
31st December 2007.
For enquiries, please contact:
AIREA PLC 01924 203 742
Kevin Henry - Group Finance Director
Brewin Dolphin Investment Banking 0845 270 8610
Andrew Kitchingman
Sean Wyndham-Quin
OPERATING REVIEW
INTRODUCTION
In the six months to 31st December 2007 significant progress has been made on a
number of major strategic projects. These include the sale of the specialist
yarns division, the sale of surplus properties, re-engineering manufacturing of
residential carpets and creating a single management team for both commercial
and residential products. As a consequence of the disposal of the Sirdar
specialist yarns business the company changed its name to AIREA plc in December
2007.
The results
The results are presented under International Financial Reporting Standards for
the first time. There are a number of presentational changes, the most
significant of which is the analysis of the results between continuing
operations and discontinued operations on the face of the consolidated income
statement. Further details of this and the other presentational changes are set
out in the notes to the accompanying financial statements.
The only significant change to the results reported previously is that goodwill
is no longer amortised and the amounts previously amortised since 1st July 2006
have now been reinstated in the consolidated balance sheet. A provision for
impairment of the goodwill associated with the subsidiary yarn dyeing business
has then been included in the income statement for the current period.
Continuing Operations
Sales of floor covering products reduced by 1% to �25.8m (2006: �26.1m) in the
period with modest growth in commercial products being offset by a slight
decline in residential products. Operating profit was �9.0m (2006: �0.4m) but
the period to 31st December 2007 includes an exceptional profit on sale of
property of �9.6m (2006: �nil). After excluding this exceptional profit, a
provision for impairment of goodwill of �0.8m (2006: �nil) and other exceptional
costs of �0.3m (2006: �0.5m), operating profit before exceptional items was
�0.5m (2006: �0.9m).
Earnings per share from continuing operations were 20.80p (2006: loss per share
0.22p) and adjusted earnings per share, excluding the effect of the exceptional
profit on sale of property, the related release of deferred tax, the provision
for impairment of goodwill and the other exceptional costs, was 0.75p (2006:
0.49p).
Discontinued Operations
The specialist yarns business was sold on 2nd November 2007. Sales to the date
of disposal were �5.7m (2006: �8.1m). The operating loss was �2.3m (2006:
profit �1.1m) but this includes a loss on disposal of �2.7m (2006: �nil). After
excluding this item, operating profit was �0.4m (2006: �1.1m).
Discontinued operations generated a loss per share of 4.98p (2006: earnings per
share 1.22p). Adjusted earnings per share, excluding the effect of the loss on
disposal, were 0.79p (2006: 1.22p).
Group results
Profit for the period was �7.3m (2006: �0.5m). This includes the exceptional
profit on sale of property, the loss on sale of the specialist yarns business
and other exceptional items as detailed above. Earnings per share were 15.82p
(2006: 1.00p) and adjusted earnings per share, after excluding the effect of the
exceptional profit on sale of property, the related release of deferred tax, the
provision for impairment of goodwill, the loss on sale of the specialist yarns
business and other exceptional costs, were 1.54p (2006: 1.71p).
There was a cash outflow from operating activities of �4.3m (2006: �2.2m
inflow), due to a combination of an increase in working capital and increased
contributions to the defined benefit pension scheme. As a result of the
property disposals and the sale of the specialist yarns division, there was an
increase in cash and cash equivalents of �7.8m (2006: decrease �1.0m). Total
cash and cash equivalents at the end of the period amounted to �6.3m compared to
total net debt at the start of the period of �5.2m.
The board has declared an interim dividend of 0.80p per share (2006: 0.80p).
This dividend is payable on 6th May 2008 to those shareholders on the register
of members at the close of business on 4th April 2008.
Management and personnel
Following completion of a number of specific projects, Steve Harrison, the
former Chief Operating Officer, left the group on 29th February 2008. A process
of recruitment for a managing director is underway and we have appointed an
experienced manager to lead the floor coverings business in the interim.
The board would like to thank all personnel for their dedication and commitment
to the business during this period of change.
Current trading and future prospects
Like-for-like sales in the early part of 2008 are in line with last year with
growth in commercial products compensating for a decline in residential
products.
The commercial market appears to be growing but the residential market is more
challenging due to economic uncertainty and subdued consumer spending.
Increased resources are being devoted to new product development and innovation
and, combined with a lower cost base, we believe this will lead to improved
performance in the future.
18th March 2008
Consolidated Income Statement
6 months ended 31st December 2007
Unaudited Unaudited Unaudited
6 months 6 months year
ended ended ended
31st December 31st December 30th June
2007 2006 2007
Note �000 �000 �000
Continuing operations
Revenue 25,781 26,138 50,304
Operating costs (26,376) (25,756) (49,672)
Exceptional profit on sale of property 9,616 - -
Operating profit after exceptional items 9,021 382 632
Analysed between:
Operating profit before exceptional items 500 850 1,379
Exceptional operating costs 2 (250) (468) (747)
Impairment of goodwill (845) - -
Exceptional profit on sale of property 9,616 - -
Net interest payable and similar charges (135) (198) (477)
Other finance costs - (150) (186)
Profit/(loss) before taxation 8,886 34 (31)
Taxation 733 (135) (100)
Profit/(loss) from continuing operations 9,619 (101) (131)
Discontinued operations
Revenue 5,694 8,122 15,026
Operating costs (5,322) (7,046) (14,032)
Operating profit before exceptional item 372 1,076 994
Loss on disposal of discontinued operation 10 (2,668) - -
Operating/(loss) profit (2,296) 1,076 994
Net interest receivable/(payable) and similar charges 166 (39) (50)
Other finance costs - (100) (124)
(Loss)/profit before taxation (2,130) 937 820
Taxation (174) (373) (219)
(Loss)/profit from discontinued operations (2,304) 564 601
Profit for the period 7,315 463 470
Earnings per share
Basic and diluted 4 15.82p 1.00p 1.02p
Earnings/(loss) per share from continuing activities
Basic and diluted 4 20.80p (0.22)p (0.28)p
(Loss)/earnings per share from discontinued activities
Basic and diluted 4 (4.98)p 1.22p 1.30p
There is no difference between the profit before taxation and the profit for the period stated above and their
historical cost equivalents.
Consolidated Balance Sheet
as at 31st December 2007 Unaudited Unaudited Unaudited
31st December 31st December 30th June
2007 2006 2007
Note �000 �000 �000
Non-current assets
Property, plant and equipment 9,828 15,226 10,086
Goodwill 12,012 12,857 12,857
Deferred tax asset 5 1,163 1,749 416
23,003 29,832 23,359
Current assets
Inventories 10,084 14,613 13,312
Trade and other receivables 7,821 9,236 9,597
Prepayments and accrued income 1,396 1,086 1,085
Cash and cash equivalents 6,272 770 176
25,573 25,705 24,170
Non-current assets classified as held for resale 140 - 5,643
Total assets 48,716 55,537 53,172
Current liabilities
Trade and other payables (6,078) (7,696) (8,788)
Tax liabilities - (243) -
Accruals and deferred income (2,604) (3,535) (3,061)
Bank overdrafts and loans - (5,705) (5,394)
(8,682) (17,179) (17,243)
Non-current liabilities
Pension deficit (5,930) (13,000) (8,400)
Total liabilities (14,612) (30,179) (25,643)
34,104 25,358 27,529
Equity
Called up share capital 11,561 11,561 11,561
Share premium account 504 504 504
Capital redemption reserve 2,395 2,395 2,395
Profit and loss account 6 19,644 10,898 13,069
34,104 25,358 27,529
Consolidated Cash Flow Statement
6 months ended 31st December 2007 Unaudited Unaudited Unaudited
6 months ended 6 months ended year ended
31st December 31st December 30th June
2007 2006 2007
Note �000 �000 �000
Operating activities
Cash (used in)/from operations 8 (4,342) 3,006 4,482
Interest received/(paid) 37 (224) (602)
Income tax paid (9) (553) (635)
(4,314) 2,229 3,245
Investing activities
Purchase of property, plant and equipment (1,603) (1,282) (2,574)
Proceeds on disposal of property, plant and equipment 15,738 295 658
Disposal of subsidiary undertaking 10 2,409 - -
16,544 (987) (1,916)
Financing activities
Equity dividends paid 3 (740) (740) (1,110)
Redemption of loan notes (88) - (80)
(Decrease)/increase in bank loans (3,652) (1,519) 86
(4,480) (2,259) (1,104)
Net increase/(decrease) in cash and cash equivalents 7,750 (1,017) 225
Cash and cash equivalents at start of period (1,478) (1,703) (1,703)
Cash and cash equivalents at end of period 6,272 (2,720) (1,478)
Statement of Recognised Income and Expense
6 months ended 31st December 2007
Unaudited Unaudited Unaudited
6 months ended 6 months ended year ended
31st December 31st December 30th June
2007 2006 2007
�000 �000 �000
Profit attributable to shareholders of the group 7,315 463 470
Actuarial gains recognised in the pension scheme - - 2,534
Total recognised income and expense relating to the 7,315 463 3,004
period
NOTES
1. Accounting Policies
Accounting policies adopted under IFRS
These interim financial statements have been prepared using the recognition and
measurement principles of International Financial Reporting Standards as adopted
by the European Union ("IFRS").
The basis of preparation and accounting policies used in preparing the interim
financial statements for the six months ended 31st December 2007 are set out
below. The basis of preparation describes how IFRS have been applied under IFRS
1, the assumptions made by the group about the Standards and Interpretations
expected to be effective, and the policies expected to be adopted, when the
group issues its first complete set of IFRS financial statements for the year
ending 30th June 2008.
Basis of preparation
The financial information for the six months ended 31st December 2007, six
months ended 31st December 2006 and the year ended 30th June 2007 is unreviewed
and unaudited and, within the meaning of section 240 of the Companies Act 1985,
such accounts do not constitute full statutory accounts of the group.
The accounting policies which follow set out those policies which are expected
to apply in preparing the financial statements for the year ending 30th June
2008. These policies have been followed in producing these interim financial
statements.
The comparative figures for the financial year ended 30th June 2007 are not the
statutory financial statements of AIREA plc for that financial year. Those
financial statements, which were prepared under UK Generally Accepted Accounting
Principles ("UK GAAP"), have been reported on by the Company's auditors and
delivered to the registrar of companies. The report of the auditors was
unqualified and did not contain statements under section 237(2) or (3) of the
Companies Act 1985.
Significant accounting judgements and estimates
The preparation of these financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and reported amounts of
revenues and expenses during the reporting period. These judgements and
estimates are based on management's best knowledge of the relevant facts and
circumstances, having regard to prior experience, but actual results may differ
from the amounts included in the financial statements. Information about such
judgements and estimates is contained in the accounting policies and
accompanying notes to the financial statements.
Revenue recognition
Revenue, for all classes of business, comprises the invoice value, after
discounts and customer credits and excluding value added tax, of goods supplied
to customers and is recognised when the risks and rewards of ownership pass to
the customer. Transactions between members of the group are excluded.
Exceptional items
The group seeks to highlight certain items as exceptional operating income or
costs. These are considered to be exceptional in size and/or nature rather than
indicative of the underlying trading of the group. These may include items such
as restructuring costs, material profits or losses on disposal of property,
plant and equipment and profits or losses on the disposal of subsidiaries. All
of these items are charged or credited before calculating operating profit or
loss. Material profits or losses on disposal of property, plant and equipment
and profits or losses on the disposal of subsidiaries are shown as separate
items in arriving at operating profit or loss whereas other exceptional items
are charged or credited within operating costs and highlighted by analysis. The
Directors apply judgement in assessing the particular items, which by virtue of
their size and nature are disclosed separately in the income statement and the
notes to the financial statements as exceptional items. The Directors believe
that the separate disclosure of these items is relevant to understanding the
group's financial performance.
Basis of Consolidation
The consolidated financial statements comprise the financial statements of AIREA
plc and its subsidiaries. Acquisitions of subsidiaries are dealt with by the
acquisition method of accounting. The results of subsidiaries are included from
the effective date of their acquisition to the effective date of their sale.
Any difference between the fair value of assets acquired and the consideration
paid is treated as goodwill in the consolidated balance sheet.
Goodwill and business combinations
Goodwill results from the acquisition of subsidiary and associated undertakings
and equates to the amount by which the consideration for the subsidiary or
associated undertaking differs from the fair value of net assets acquired.
Goodwill written off to reserves prior to the date of transition to IFRS has not
been reinstated on the balance sheet. This goodwill is not written back to
profit or loss on disposal.
Impairment testing of goodwill and property, plant and equipment
For the purposes of assessing impairment, assets are grouped at the lowest
levels for which there are separately identifiable cash flows (cash-generating
units). As a result, some assets are tested individually for impairment and
some are tested at cash-generating unit level. Goodwill is allocated to those
cash-generating units that are expected to benefit from synergies of the related
business combination and represent the lowest level within the group at which
management monitors the related cash flows.
Goodwill is not amortised but is tested for impairment at least annually. All
other individual assets or cash-generating units are tested for impairment
whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable.
An impairment loss is recognised for the amount by which the asset's or
cash-generating unit's carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of fair value, reflecting market conditions
less costs to sell, and value in use based on an internal discounted cash flow
evaluation. With the exception of goodwill, all assets are subsequently
reassessed for indications that an impairment loss previously recognised may no
longer exist.
Foreign currency
Transactions in foreign currencies are translated at the exchange rate ruling at
the date of the transaction. Assets and liabilities denominated in foreign
currencies are translated at rates of exchange ruling at the balance sheet date.
Exchange differences of a trading nature are dealt with in the income
statement.
Financial instruments
The group uses derivative financial instruments to manage its exposures to
fluctuations in foreign currency exchange rates. Derivative instruments
utilised are forward currency contracts. The fair value of forward currency
contracts is assessed at the balance sheet date and any profit or loss is
recognised in the income statement.
Financial assets
Trade and other receivables are recognised initially at fair value and
subsequently measured at amortised cost using the effective interest method,
less any required allowances for uncollectible amounts.
Financial liabilities
Trade and other receivables are recognised initially at fair value and
subsequently measured at amortised cost using the effective interest method.
Taxation
Current tax payable is provided on taxable profits at prevailing rates for the
period.
Deferred income tax is calculated using the liability method on temporary
differences arising between the carrying value of assets and liabilities and
their tax bases. However, deferred tax is not provided on the initial
recognition of goodwill. Deferred tax liabilities are provided in full with no
discounting.
A deferred income tax asset is recognised only to the extent that it is probable
that there will be future taxable profits on which this asset can be charged.
Deferred income tax assets are reduced to the extent that it is no longer likely
that a sufficient taxable benefit will arise.
Deferred taxation is shown on the balance sheet separately from current tax
assets and liabilities and is categorised among non-current items. Changes in
deferred tax balances are recognised as a component of the tax expense in the
income statement.
Pensions
The current service cost of providing retirement pensions and related benefits
under the group defined benefit scheme is charged against operating profit as
part of operating costs and the expected return on pension scheme assets and the
interest on pension scheme liabilities is included in other finance costs.
Actuarial gains and losses, net of the related deferred taxation, are recognised
in the statement of total income and expense. Other amounts paid to defined
contribution schemes are charged against operating profit as part of operating
costs as incurred.
Scheme assets are measured at fair values. Scheme liabilities are measured on
an actuarial basis using the projected unit method and are discounted at
appropriate high quality corporate bond rates that have terms to maturity
approximating to the terms of the related liability. The surplus or deficit as
calculated by the scheme's actuary is presented separately on the balance sheet.
The related deferred tax is shown with other deferred tax balances. A surplus
is recognised only to the extent that it is recoverable by the group.
Discontinued operations
A discontinued operation is a cash-generating unit, or a group of
cash-generating units, that either has been disposed of, or is classified as
held for sale, and represents a separate major line of business or geographical
area of operations or is part of a single co-ordinated plan to dispose of a
separate major line of business or geographical area of operations. The
disclosures for discontinued operations in prior periods relate to all
operations that have been discontinued by the balance sheet date for the latest
period presented.
Leased assets
In accordance with IAS 17, the economic ownership of a leased asset is
transferred to the lessee if the lessee bears substantially all the risks and
rewards related to the ownership of the leased asset. The related asset is
recognised at the time of inception of the lease at the fair value of the leased
asset or, if lower, the present value of the minimum lease payments plus
incidental payments, if any, to be borne by the lessee. A corresponding amount
is recognised as a finance leasing liability. Leases of land and buildings are
split into land and buildings elements according to the relative fair values of
the leasehold interests at the date the asset is initially recognised.
The interest element of leasing payments represents a constant proportion of the
capital balance outstanding and is charged to the income statement over the
period of the lease.
All other leases are regarded as operating leases and the payments made under
them are charged to the income statement on a straight line basis over the lease
term. Lease incentives are spread over the term of the lease.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and on short term deposit,
together with other short-term, highly liquid, investments that are readily
convertible into known amounts of cash and which are subject to an insignificant
risk of changes in value.
2. EXCEPTIONAL OPERATING COSTS
6 months ended 6 months ended Year ended
31st December 31st December 30th June
2007 2006 2007
�000 �000 �000
Severance payments and incentives 215 315 746
Relocation costs 12 68 191
Loss/(profit) on disposal of plant and equipment - 85 (190)
Legal and professional expenses 23 - -
250 468 747
The severance payments and incentives, relocation costs and the loss/(profit) on disposal of plant and
equipment relate to the reorganisation of the residential floor coverings operation. The legal and
professional expenses in the period relate to the change of name of the company.
3. DIVIDENDS
6 months 6 months Year
ended ended ended
31st December 31st December 30th June
2007 2006 2007
�000 �000 �000
Paid during the period:
Final dividend for the year ended 30th June 2007
- 1.60p per share 740 - -
Interim dividend for the year ended 30th June 2007
- 0.80p per share - - 370
Final dividend for the year ended 30th June 2006
- 1.60p per share - 740 740
740 740 1,110
Proposed after the period end (not
recognised as a liability):
Interim dividend for the year ending 30th June 2008
- 0.80p per share 370 - -
Final dividend for the year ended 30th June 2007
- 1.60p per share - - 740
Interim dividend for the year ended 30th June 2007
- 0.80p per share - 370 -
370 370 740
The interim dividend will be paid on 6th May 2008 to members registered at the close of
business on 4th April 2008.
4. EARNINGS PER SHARE
The calculation of basic earnings per share is based on earnings of �7,315,000 (31st December 2006:
�463,000, 30th June 2007: �470,000) and on 46,242,455 (31st December 2006: 46,242,455, 30th June 2007:
46,242,455) ordinary shares, being the number in issue during the period. Adjusted earnings per share is
calculated after excluding exceptional profit on sale of property, the related release of deferred tax,
exceptional operating costs, impairment of goodwill and the loss on disposal of discontinued operations as
set out below.
6 months 6 months Year
ended ended ended
31st December 31st December 30th June
2007 2006 2007
�000 pence �000 pence �000 pence
Earnings and basic earnings per share 7,315 15.82 463 1.00 470 1.02
Exceptional profit on sale of property (net of tax) (8,982) (19.42) - - - -
Release of deferred tax provision on sale of property (1,310) (2.83) - - - -
Exceptional operating costs (net of tax) 175 0.38 328 0.71 523 1.13
Impairment of goodwill 845 1.82 - - - -
Loss on disposal of discontinued operations 2,668 5.77 - - - -
Adjusted earnings and basic earnings per share 711 1.54 791 1.71 993 2.15
Continuing operations
The calculation of basic earnings per share from continuing operations is based on earnings of �9,619,000
(31st December 2006: loss �101,000, 30th June 2007: loss �131,000) and on 46,242,455 (31st December 2006:
46,242,455, 30th June 2007: 46,242,455) ordinary shares, being the number in issue during the period.
Adjusted earnings per share from continuing operations is calculated after excluding the exceptional profit
on sale of property, the related release of deferred tax, exceptional operating costs and impairment of
goodwill as set out below.
6 months 6 months Year
ended ended ended
31st December 31st December 30th June
2007 2006 2007
�000 pence �000 pence �000 pence
Earnings/(loss) and basic earnings/(loss) per share 9,619 20.80 (101) (0.22) (131) (0.28)
Exceptional profit on sale of property (net of tax) (8,982) (19.42) - - - -
Release of deferred tax provision on sale of property (1,310) (2.83) - - - -
Exceptional operating costs (net of tax) 175 0.38 328 0.71 523 1.13
Impairment of goodwill 845 1.82 - - - -
Adjusted earnings and basic earnings per share 347 0.75 227 0.49 392 0.85
Discontinued operations
The calculation of basic earnings per share from discontinued operations is based on a loss of �2,304,000
(31st December 2006: earnings �564,000, 30th June 2007: earnings �601,000) and on 46,242,455 (31st December
2006: 46,242,455, 30th June 2007: 46,242,455) ordinary shares, being the number in issue during the period.
Adjusted earnings per share from discontinued operations is calculated after excluding the loss on
disposal of discontinued operations as set out below.
6 months 6 months Year
ended ended ended
31st December 31st December 30th June
2007 2006 2007
�000 pence �000 pence �000 pence
(Loss)/earnings and basic (loss)/earnings per share (2,304) (4.98) 564 1.22 601 1.30
Loss on disposal of discontinued operations 2,668 5.77 - - - -
Adjusted earnings and basic earnings per share 364 0.79 564 1.22 601 1.30
5. DEFERRED TAX
31st December 31st December 30th June
2007 2006 2007
�000 �000 �000
Deferred tax asset brought forward 416 2,039 2,039
Profit and loss account 1,387 (80) (33)
Movement on deferred tax on pension (740) (210) (1,590)
deficit
Disposal of subsidiary undertaking 100 - -
Deferred tax asset carried forward 1,163 1,749 416
6. PROFIT AND LOSS ACCOUNT
31st December 31st December 30th June
2007 2006 2007
�000 �000 �000
Brought forward 13,069 11,175 11,175
Profit for the period 7,315 463 470
Other recognised gains - - 2,534
Equity dividends paid (740) (740) (1,110)
Carried forward 19,644 10,898 13,069
7. STATEMENT OF CHANGE IN EQUITY
31st December 31st December 30th June
2007 2006 2007
�000 �000 �000
Equity brought forward 27,529 25,635 25,635
Profit for the period 7,315 463 470
Other recognised gains - - 2,534
Equity dividends paid (740) (740) (1,110)
Equity carried forward 34,104 25,358 27,529
8. RECONCILIATION OF OPERATING PROFIT TO NET CASH (USED IN)/FROM OPERATIONS
6 months 6 months Year
ended ended ended
31st December 31st December 30th June
2007 2006 2007
�000 �000 �000
Operating profit 6,725 1,458 1,626
Depreciation 749 877 1,720
Impairment of goodwill 845 - -
(Profit)/loss on disposal of property, plant and (9,632) 71 (245)
equipment
Loss on disposal of discontinued operation 2,668 - -
Current service pension cost 130 130 180
Decrease in inventories 153 1,904 3,205
(Increase)/decrease in receivables (2,289) (23) 26
(Decrease)/increase in payables (1,091) (331) 140
Contributions to defined benefit pension scheme (2,600) (1,080) (2,170)
Net cash (used in)/from operations (4,342) 3,006 4,482
9. TRANSITION TO IFRS
Restatement of Income Statement for the 6 months ended 31st December 2006
UK GAAP Reversal of IFRS
goodwill
amortisation
6 months ended 6 months ended 6 months ended
31st December 31st December 31st December
2006 2006 2006
�000 �000 �000
Revenue 34,260 - 34,260
Operating costs (32,774) 440 (32,334)
Exceptional costs (468) - (468)
Total operating costs (33,242) 440 (32,802)
Operating profit 1,018 440 1,458
Net interest payable and similar charges (237) - (237)
Other finance costs (250) - (250)
Profit before taxation 531 440 971
Taxation (508) - (508)
Profit for the period 23 440 463
Earnings per share
(basic and diluted) 0.05p 0.95p 1.00p
In addition to the above adjustment, the results have been analysed between continuing operations and
discontinued operations on the face of the consolidated income statement.
Restatement of Statement of Recognised Income and Expense for the 6 months ended 31st December 2006
UK GAAP Reversal of IFRS
goodwill
amortisation
6 months ended 6 months ended 6 months ended
31st December 31st December 31st December
2006 2006 2006
�000 �000 �000
Profit attributable to shareholders of the 23 440 463
group
Actuarial gains recognised in the pension - - -
scheme
Total recognised gains relating to the 23 440 463
period
Restatement of Income Statement for the year ended 30th June 2007
UK GAAP Reversal of Reclassification IFRS
goodwill of profit on sale
amortisation of property
year ended year ended year ended year ended
30th June 2007 30th June 2007 30th June 2007 30th June 2007
�000 �000 �000 �000
Revenue 65,330 - - 65,330
Operating costs (63,838) 881 - (62,957)
Exceptional costs (937) - 190 (747)
Total operating costs (64,775) 881 190 (63,704)
Operating profit 555 881 190 1,626
Exceptional profit on sale of property 190 - (190) -
Net interest payable and similar charges (527) - - (527)
Other finance costs (310) - - (310)
(Loss)/profit before taxation (92) 881 - 789
Taxation (319) - - (319)
(Loss)/profit for the period (411) 881 - 470
(Loss)/earnings per share
(basic and diluted) (0.89)p 1.91p 0.00p 1.02p
In addition to the above adjustments, the results have been analysed between continuing operations
and discontinued operations on the face of the consolidated income statement.
Restatement of Statement of Recognised Income and Expense for the year ended 30th June 2007
UK GAAP Reversal of Reclassification IFRS
goodwill of profit on sale
amortisation of property
year ended year ended year ended year ended
30th June 2007 30th June 2007 30th June 2007 30th June 2007
�000 �000 �000 �000
(Loss)/profit attributable to shareholders of (411) 881 - 470
the group
Actuarial gains recognised in the pension 2,534 - - 2,534
scheme
Total recognised gains relating to the period 2,123 881 - 3,004
Restatement of Balance Sheet as at 31st December 2006
UK GAAP Reversal of Reclassification IFRS
goodwill of deferred tax
amortisation
31st December 31st December 31st December 2006 31st December
2006 2006 2006
�000 �000 �000 �000
Non-current assets
Property, plant and equipment 15,226 - - 15,226
Goodwill 12,417 440 - 12,857
Deferred tax asset - - 1,749 1,749
27,643 440 1,749 29,832
Current assets
Inventories 14,613 - - 14,613
Trade and other receivables 9,236 - - 9,236
Prepayments and accrued income 1,086 - - 1,086
Cash and cash equivalents 770 - - 770
25,705 - - 25,705
Total assets 53,348 440 1,749 55,537
Current liabilities
Trade and other payables (7,696) - - (7,696)
Tax liabilities (243) - - (243)
Accruals and deferred income (3,535) - - (3,535)
Bank overdrafts and loans (5,705) - - (5,705)
(17,179) - - (17,179)
Non-current liabilities
Deferred taxation (2,151) - 2,151 -
Pension deficit (9,100) - (3,900) (13,000)
(11,251) - (1,749) (13,000)
Total liabilities (28,430) - (1,749) (30,179)
24,918 440 - 25,358
Equity
Called up share capital 11,561 - - 11,561
Share premium account 504 - - 504
Capital redemption reserve 2,395 - - 2,395
Profit and loss account 10,458 440 - 10,898
24,918 440 - 25,358
Restatement of Balance Sheet as at 30th June 2007
UK GAAP Reversal of Reclassification Reclassification IFRS
goodwill of deferred tax of assets held
amortisation for resale
30th June 30th June 30th June 2007 30th June 2007 30th June
2007 2007 2007
�000 �000 �000 �000 �000
Non-current assets
Property, plant and equipment 15,729 - - (5,643) 10,086
Goodwill 11,976 881 - - 12,857
Deferred tax asset - - 416 - 416
27,705 881 416 (5,643) 23,359
Current assets
Inventories 13,312 - - - 13,312
Trade and other receivables 9,597 - - - 9,597
Prepayments and accrued income 1,085 - - - 1,085
Cash and cash equivalents 176 - - - 176
24,170 - - - 24,170
Non-current assets classified as held - - - 5,643 5,643
for resale
Total assets 51,875 881 416 - 53,172
Current liabilities
Trade and other payables (8,788) - - - (8,788)
Tax liabilities - - - - -
Accruals and deferred income (3,061) - - - (3,061)
Bank overdrafts and loans (5,394) - - - (5,394)
(17,243) - - - (17,243)
Non-current liabilities
Deferred taxation (2,104) - 2,104 - -
Pension deficit (5,880) - (2,520) - (8,400)
(7,984) - (416) - (8,400)
Total liabilities (25,227) - (416) - (25,643)
26,648 881 - - 27,529
Equity
Called up share capital 11,561 - - - 11,561
Share premium account 504 - - - 504
Capital redemption reserve 2,395 - - - 2,395
Profit and loss account 12,188 881 - - 13,069
26,648 881 - - 27,529
Restatement of Balance Sheet as at 30th June 2006
UK GAAP Reclassification IFRS
of deferred tax
30th June 2006 30th June 2006 30th June 2006
�000 �000 �000
Non-current assets
Property, plant and equipment 15,107 - 15,107
Goodwill 12,857 - 12,857
Deferred tax asset - 2,039 2,039
27,964 2,039 30,003
Current assets
Inventories 16,517 - 16,517
Trade and other receivables 9,150 - 9,150
Prepayments and accrued income 1,266 - 1,266
Cash and cash equivalents 537 - 537
27,470 - 27,470
Total assets 55,434 2,039 57,473
Current liabilities
Trade and other payables (7,945) - (7,945)
Tax liabilities (570) - (570)
Accruals and deferred income (3,649) - (3,649)
Bank overdrafts and loans (5,235) - (5,235)
(17,399) - (17,399)
Non-current liabilities
Bank loans and loan notes (739) - (739)
Deferred taxation (2,071) 2,071 -
Pension deficit (9,590) (4,110) (13,700)
(12,400) (2,039) (14,439)
Total liabilities (29,799) (2,039) (31,838)
25,635 - 25,635
Equity
Called up share capital 11,561 - 11,561
Share premium account 504 - 504
Capital redemption reserve 2,395 - 2,395
Profit and loss account 11,175 - 11,175
25,635 - 25,635
10. DISPOSAL OF SUBSIDIARY UNDERTAKING
On 2nd November 2007 the group disposed of its interest in the entire
issued share capital of Sirdar Spinning Limited which comprised the whole
of the group's specialist yarns division. Net assets disposed of
comprised:
�000
Plant and equipment 721
Inventories 3,075
Receivables 3,871
Cash and cash equivalents 150
Payables (2,152)
Corporation tax (188)
Deferred tax (100)
5,377
Loss on disposal (2,668)
Proceeds of disposal (net of expenses of �91,000) 2,709
The disposal proceeds consisted of �2,500,000 paid in cash at completion
plus �300,000 of loan notes.
In the consolidated balance sheet these loan notes are included in trade
and other receivables.
The results of the subsidiary disposed of are presented as discontinued
activities in the income statement.
Operations of discontinued activities used cash of �3,145,000 in the
period (31st December 2006: generated �527,000, 30th June 2007: generated
�1,086,000) and investing activities of discontinued activities used cash
of �3,000 in the period (31st December 2006: �435,000, 30th June 2007:
�624,000).
OTHER INFORMATION
The interim results are unaudited.
Further copies of this report are available from the Company Secretary at
the registered office at Victoria Mills, The Green, Ossett, Wakefield, West
Yorkshire WF5 0AN.
ENDS
This information is provided by RNS
The company news service from the London Stock Exchange
END
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