Partners Holdings - Interim Results
11 November 1998 - 8:30AM
UK Regulatory
RNS No 4854b
PARTNERS HOLDINGS PLC
11th November 1998
Partners Holdings plc
("Partners")
Interim Results for the 28 weeks ended 10 October 1998
Partners Holdings plc, the operator of 105 specialist retail
stationery stores, today announces Interim Results for the 28
weeks to 10 October 1998.
* From an enlarged estate of 105 stores, increased turnover of
11% to #18.34m
* Pre-tax loss of #1.17m
* Loss per share: 5.7p
* Proposed maintained interim dividend of 0.5p
* New Board appointments complete Board re-structuring
* First trial refurbished store in new format opened with a
further three refurbished stores opening before Christmas
* Store auto-replenishment fully implemented
Michael Scorey, Chairman, said:
"There are many positives in the business which we are building
upon in order to re-generate growth in our core stores. We have
now completed the strengthening of our Board and with our major
Christmas sales period almost upon us and the trials progressing
in our new store formats, I look forward to recording progress in
my next report."
11 November 1998
Enquiries:
Partners Holdings plc Tel: 01270 505888
Michael Scorey, Chairman
Peter Davey, Chief Executive
Alan Goodwin, Finance Director
College Hill Tel: 0171 457 2020
Matthew Smallwood
Kate Pope
PARTNERS HOLDINGS PLC
CHAIRMAN'S STATEMENT
RESULTS
Turnover during the period increased by 11% to #18.34 million.
Pre-tax losses were #1.17 million compared with a loss last year
of #64,000.
Net cash outflow for the period was #0.4million after capital
investment of #0.7million. Group net assets were #5.1million.
Net borrowings were #2.1 million, well within the facilities
available to us.
As previously announced the Board anticipated the current year to
be one of transition whilst the business was re-focused and re-
positioned for the future.
Sales growth during the period has, on a comparable basis,
remained positive but has been insufficient to compensate for the
significant and planned cost increases that have been incurred.
These costs relate to the expansion of stores opened last year
and the relocation of our distribution and administration
facilities to Crewe. Such costs, which amount to #0.6million,
were not included in our results for this period last year.
DIVIDEND
An interim ordinary share dividend of 0.5p (1997: 0.5p) has been
declared which will be paid on 31 December 1998 to shareholders
on the register on 4 December 1998.
BOARD
I am delighted to welcome Mike Kilcourse to our Board as
Marketing Director. Mike brings extensive retail marketing
experience gained with Dixons plc and Boots plc.
CURRENT DEVELOPMENTS AND TRADING
During the period the Group has completed its acquisition
programme for the year with five new stores opening. In addition
three under-performing stores have been closed and the Group is
now trading from 105 stores.
We have introduced a new product range of computer consumables
which was initially trialled in 30 stores. The trial has proved
to be successful and has now been rolled out to all stores.
The implementation of stock auto replenishment to all stores has
now been completed and we have set clear targets aimed at
reducing our stockholding with the consequent release of working
capital.
FUTURE PROSPECTS
Whilst our results are disappointing, there are many positives
within the business which we intend to build on. Our short term
strategy is focused on generating growth in our core stores by
means of a number of important initiatives. Our existing product
ranges have been fully reviewed and strengthened where
appropriate, as in the case of computer consumables. Following
the work undertaken earlier in the year by external consultants,
we have recently opened the first of four, refurbished stores.
This store at Retford in Nottinghamshire, fully incorporates the
new, more focused product range in an environment which is much
more customer friendly than previously. Initial indications are
positive and a further three stores will have been converted by
Christmas. We intend to closely monitor their performance in the
first quarter of next year.
Finally the appointment of Mike Kilcourse will add greater
experience and depth to our marketing team, which will result in
a more vibrant and more distinct customer value offer.
With our major Christmas sales period almost upon us everybody in
the business is focused on delivering growth and I look forward
to reporting progress in my next report.
Sales over the four weeks since the period end have increased by
3.2% on a comparable basis with last year.
Michael Scorey
Chairman
11 November 1998
PARTNERS HOLDINGS PLC
INTERIM RESULTS FOR THE 28 WEEKS ENDED 10 OCTOBER 1998
CONSOLIDATED PROFIT AND LOSS ACCOUNT (Unaudited)
28 weeks 28 weeks Year to
10 October 11 October 31 March
1998 1997 1998
#000 #000 #000
TURNOVER 18,336 16,535 35,641
Cost of sales (17,828) (15,345) (32,352)
GROSS PROFIT 508 1,190 3,289
Distribution costs (234) (171) (369)
Administrative expenses (1,386) (1,125) (2,232)
(1,112) (106) 688
Other net operating income 20 20 40
OPERATING (LOSS) / PROFIT (1,092) (86) 728
Interest receivable 2 32 49
Interest payable (80) (10) (22)
(LOSS) / PROFIT ON ORDINARY
ACTIVITIES
BEFORE TAXATION (1,170) (64) 755
Tax on loss / (profit) on 100 20 (286)
ordinary activities
(LOSS) / PROFIT FOR THE PERIOD (1,070) (44) 469
Dividend on equity shares (93) (93) (280)
RETAINED (LOSS) / PROFIT (1,163) (137) 189
(Loss)/earnings per share (5.7)p (0.2)p 2.5p
There are no recognised gains or losses other than the net
(loss)/profit for the relevant periods.
PARTNERS HOLDINGS PLC
INTERIM RESULTS FOR THE 28 WEEKS ENDED 10 OCTOBER 1998
CONSOLIDATED BALANCE SHEET (Unaudited)
As at As at As at
10 11 31 March
October October
1998 1997 1998
#000 #000 #000
FIXED ASSETS
Tangible Assets 7,010 5,965 7,157
CURRENT ASSETS
Stock 5,928 5,109 4,763
Debtors 2,305 1,940 1,958
Cash at bank and in hand 60 440 57
8,293 7,489 6,778
CREDITORS: amounts falling due (9,512) (6,712) (6,895)
within one year
NET CURRENT ASSETS / (1,219) 777 (117)
(LIABILITIES)
TOTAL ASSETS LESS CURRENT 5,791 6,742 7,040
LIABILITIES
PROVISIONS FOR LIABILITIES AND
CHARGES
Deferred taxation (253) (139) (253)
ACCRUALS AND DEFERRED INCOME
Deferred income (754) (941) (840)
(1,007) (1,080) (1,093)
4,784 5,662 5,947
CAPITAL AND RESERVES
Called up share capital 187 187 187
Share premium account 5,691 5,851 5,691
Capital redemption reserve 9 9 9
Profit and loss account (1,103) (385) 60
Shareholder's funds:
Equity 4,784 5,662 5,947
Non-equity - - -
4,784 5,662 5,947
PARTNERS HOLDINGS PLC
INTERIM RESULTS FOR THE 28 WEEKS ENDED 10 OCTOBER 1998
GROUP CASH FLOW STATEMENT (Unaudited)
28 weeks 28 weeks Year to
10 October 11 October 31 March
1998 1997 1998
#000 #000 #000
NET CASH INFLOW FROM OPERATING 677 749 283
ACTIVITIES
RETURNS ON INVESTMENTS AND SERVICING
OF FINANCE
Interest paid (80) (10) (22)
Interest received 2 32 49
NET CASH INFLOW / (OUTFLOW) FROM
RETURNS
ON INVESTMENTS AND SERVICING OF (78) 22 27
FINANCE
TAXATION
Corporation tax paid (including ACT) (47) (50) (574)
CAPITAL EXPENDITURE AND FINANCIAL
INVESTMENTS
Capital Expenditure (724) (2,642) (4,505)
Sale of tangible fixed assets - - 882
NET CASH OUTFLOW FROM INVESTING (724) (2,6420) (3,623)
ACTIVITIES
EQUITY DIVIDENDS PAID (187) - (93)
FINANCING
Issue of Ordinary shares - 5,500 5,500
Costs incurred in the issue of - (515) (521)
Ordinary Shares
Deferred ordinary share issue costs - - (35)
Repayment of capital element of
finance lease rentals
And hire purchase contract (18) (27) (39)
payments
Repayment of Loans - (275) (320)
Redemption of Deferred Ordinary - (1,967) (1,967)
Shares
NET CASH INFLOW / (OUTFLOW) FROM (18) 2,716 2,618
FINANCING
(DECREASE) / INCREASE IN CASH (377) 795 (1,362)
PARTNERS HOLDINGS PLC
INTERIM RESULTS FOR THE 28 WEEKS ENDED 10 OCTOBER 1998
NOTES TO THE ACCOUNTS
1. Reconciliation of operating (loss) / profit to net cash inflow
from operating activities
28 weeks 28 weeks Year to
10 October 11 October 31 March
1998 1997 1998
#000 #000 #000
Operating (loss) / profit (1,092) (86) 728
Depreciation 871 618 1,284
Amortisation of deferred income (231) 128 31
Profit on disposal of fixed assets - - (4)
(Increase) / decrease in debtors (347) 330 (450)
Increase in stocks (1,165) (1,539) (1,193)
(Decrease) / increase in creditors 2,641 1,298 (113)
Net cash inflow from
continuing operating activities 677 749 283
2. Reconciliation of net cash flow to movement in net debt
As at 31 March Cash at 10 October
1998 Flows 1998
#000 #000 #000
Cash in hand 57 3 60
Overdrafts (1,774) (380) (2,154)
(1,717) (377) (2,094)
Debt due within 1 year (53) 18 (35)
Total (1,770) (359) (2,129)
3. The Group results for the 28 weeks ended 10 October 1998 are
unaudited but have been reviewed by the auditors whose report to
the shareholders is shown below. The results for the year ended
31 March 1998 set out above are an abridged version of the
Group's full accounts for that year. Full 1998 accounts,
incorporating an unqualified auditors' report, have been
delivered to the Registrar of Companies.
4. The interim financial information has been prepared in
accordance with the accounting policies set out in the Annual
Report and Financial Statements for the year ended 31 March 1998,
with the exception of the accounting policy for goodwill and
earnings per share
5. This report is being posted to shareholders on 25 November
1998 and copies are available at the Company's registered
office, Savoy Road, Off Weston Gate, Crewe,Cheshire,
CW1 6NA.
AUDITORS' REVIEW
We have reviewed the interim financial information set out on
pages 1 to 7 in respect of the 28 weeks ended 10 October 1998,
which is the responsibility of, and has been approved by, the
directors. Our responsibility is to report on the results of our
review.
Our review was carried out having regard to the Bulletin, Review
of interim financial information, issued by the Auditing
Practices Board. This review consisted principally of obtaining
an understanding of the process for the preparation of the
interim financial information, applying analytical procedures to
the underlying financial data, assessing whether accounting
policies have been consistently applied, and making enquiries of
the Group's management responsible for the financial and
accounting matters. This review excluded audit procedures such as
tests and verification of assets and liabilities and was
therefore substantially less in scope than an audit performed in
accordance with Auditing Standards. Accordingly, we do not
express an audit opinion on the interim financial information.
On the basis of our review:
We are not aware of any material modifications that should be
made in the interim financial information as presented:
And
In our opinion the interim financial information has been
prepared using accounting policies consistent with those adopted
by the Group in its statutory accounts for the year ended 31
March 1998, except for the change in accounting policy for
goodwill and earnings per share.
Ernst & Young
Chartered Accountants
Manchester
END
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