TIDMUCG
RNS Number : 7273Q
United Carpets Group plc
09 August 2010
UNITED CARPETS GROUP plc
Preliminary Results for the year ended 31 March 2010
United Carpets Group plc ("the Group" or "the Company" or "United Carpets"), the
second largest chain of specialist retail carpet and floor covering stores in
the UK, today announces its preliminary results for the year ended 31 March
2010.
Highlights
· Network sales grew by 7.4% to GBP69.9m (2009: GBP65.1m)
· Like for like sales up 1.0%
· Revenue increased by 2.5% to GBP27.47m (2009: GBP26.79m)
· Profit before tax and exceptional items increased by 7.3% to GBP1.463m
(2009: GBP1.364m)
· Profit before tax increased by 84.5% to GBP1.098m (2009: GBP0.595m)
· Store numbers increased by 2 to 82
· Number of corporate stores reduced as planned from 23 to 12 stores
· Recommending a final dividend of 0.5p per share (2009: 0.5p)
.
Paul Eyre, Chief Executive, said:
'Sales of flooring and beds remained stable during the period under review which
resulted in a good performance for the year. Revenues and profits both increased
and we achieved our objective of re-balancing the store portfolio with the
reduction in the number of corporate stores helped by a record number of new
franchisees this year reflecting the continued attractiveness of our business
model, even under current circumstances. However, the market environment
remains challenging, with little improvement in volume across the housing market
and an understandable sense of caution amongst consumers given the continuing
economic uncertainty in the UK. This was reflected in a slow trading period
since January which has continued into the current financial year.'
Enquiries:
+----------------------------------------------------------+----------------+
| United Carpets Group plc | |
| Paul Eyre, Chief Executive | |
| Ian Bowness, Finance Director | 01709 732 666 |
| Cardew Group | |
| Tim Robertson | |
| Jamie Milton | 020 7930 0777 |
| | |
+----------------------------------------------------------+----------------+
| Seymour Pierce | |
| Jonathan Wright | 020 7107 8000 |
+----------------------------------------------------------+----------------+
Chairman's statement
I am pleased to be able to announce that the Group delivered a solid trading
performance for the year. Revenues increased to GBP27.47m and profit before tax
and exceptional items, increased by 7.3% to GBP1.46 m. The year under review was
one of consolidation, following a significant increase in the number of stores
in the previous year, and the objective was to reduce the number of corporate
stores by matching them with new franchisees. We achieved this and introduced 24
new franchisees to the Group so that, at the period end, there were 82 stores of
which 12 were corporate stores compared to the 23 corporate stores at the start
of the financial year.
Financial review
Revenue, which as in previous years includes marketing and rental costs incurred
by the Group and recharged to franchisees, increased by 2.5% to GBP27.47m (2009:
GBP26.79m). Network sales across the Group, including the value of retail sales
by our franchisees (to give a measure of the Group's turnover on a more
comparable basis to a conventional retailer), increased 7.4% to GBP69.9m (2009:
GBP65.1m).
Like for like sales across the whole of the network were up 1.0% compared to the
previous year. We are pleased that we have continued the trend of overall
positive like for like sales, which compares well against the wider retail
sector, and we believe reflects positively on the franchise structure which
tends to reduce sales volatility and ensures each store is run by a
self-motivated management team.
As we always advise, given United Carpets' franchise structure, like for like
sales are not necessarily the best measure of the Group's financial performance
but they do provide a good steer on the overall trading performance. Within the
like for like sales performance, the core floor coverings business achieved a
1.0% like for like increase on the previous year and bed like for like sales
also increased by 1.0%.
Gross margin increased from 64.0% to 66.2% reflecting the increased proportion
of franchise related income to total revenue as corporate stores turnover, beds
and trade sales accounted for a smaller proportion of revenue as more corporate
stores were franchised.
Distribution costs include staff costs at the corporate stores and were similar
to the previous year with heavier costs at the beginning of the year offset
later in the year as corporate stores were franchised. Administrative expenses,
increased by 2.8% and included GBP0.4m of exceptional costs related to certain
loss making stores (2009: GBP0.8m).
Profit before tax and exceptional items was GBP1.46m (2009 GBP1.36m). Basic
earnings per share were 0.84p (2009: 0.40p).
The balance sheet continues to be robust with net funds of GBP2.1m at the year
end (2009: GBP1.7m).
Dividend
The Board is pleased to recommend a final dividend of 0.5p per share (2009:
0.5p), which together with the interim dividend of 0.25p per share (2009: Nil)
paid in January makes a total ordinary dividend of 0.75p per share for the year
(2009: 0.5p). Subject to approval at the Annual General Meeting, the final
dividend will be paid on 3 December 2010 to those shareholders whose names are
on the register on 5 November 2010.
Operations review
At the year end, the Group had 82 United Carpets branded stores across its core
areas of operation in Northern and Central England, up from 80 stores at the
beginning of the financial year. With the exception of 12 corporate stores, the
remainder were all franchises operating under the United Carpets' bespoke
franchise model, which aims to combine the advantages of a multiple retailer
with the entrepreneurial drive of an independent.
We continued to differentiate the United Carpets offer through a series of
planned advertising campaigns focusing on our key selling strengths namely:
· Extensive quality ranges of flooring and beds
· Affordable price points
· Superior customer service
Advertising campaigns were run throughout the year on regional television
channels in Northern and Central England supported by radio, print and direct
mail marketing. The United Carpets brand has very high recognition in our target
markets and has established an excellent reputation for value and service. Our
marketing objectives revolve around maintaining brand awareness and driving
sales led by innovative product offerings and selected price discounts.
Supporting our marketing strategies, our ongoing investment in training across
the Group is a key focus seeking to continually improve the quality of our staff
and management teams. To maintain high customer service levels, it is critical
to constantly seek to improve knowledge of the products ranges, sales techniques
and customer service levels. In the last year, in addition to our biannual
franchisee conferences designed to refresh product knowledge and spread best
practice across the Group, we have carried out numerous mystery shopper
exercises and customer surveys to obtain accurate feedback on our performance
and to seek ways to further improve our customer service.
Franchising
Having expanded the number of stores significantly in the previous financial
year, the focus was to match new stores and a significant proportion of the
existing corporate stores with new franchisees. We achieved this goal,
introducing 24 new franchisees during the year and as a result, the number of
corporate stores reduced from 23 to 12 during the period under review.
The Group started the year with 57 franchised stores and, during the period,
added 1 new franchised store in Peterborough. In addition, we converted 8
franchisee stores back into corporate stores. An additional 20 corporate stores
were also franchised, giving us 70 franchised stores at the period end.
Since the period end, we have converted 4 franchised stores into corporate
stores, refranchised 1 corporate store and opened a new franchised store in
Leeds, resulting in a current total of 68 franchised stores. There is a healthy
pipeline of new stores, some of which already have franchisees identified.
Flooring
The majority of Group revenues are derived from the sale of floor coverings,
predominantly carpet, laminate and vinyl flooring through franchised stores and
the Group's own corporate stores. Trading across the network started modestly in
the first quarter and improved strongly before being adversely affected by the
severe weather conditions experienced in the fourth quarter. However, the
overall result was positive with like for like sales up 1.0% over the period.
Having started the year with 23 corporate stores, 1 new corporate store opened
during the period in Halifax, 8 franchised stores were taken back into the
corporate arm and a total of 20 corporate stores were franchised during the year
leaving us with 12 corporate stores at the period end.
Of the 12 corporate stores, 3 are considered to be core, to be retained to
enable ongoing training and product development, with the Group seeking to
franchise the remainder with quality candidates. Since the year end, we have
successfully refranchised 1 corporate store and taken back 4 franchised stores
giving us a total of 15 corporate stores currently.
In the first 17 weeks since the year end, like for like sales were down 2.6%,
this period includes the World Cup, the general election and subsequent budget
which together have made for an exceptionally tough trading period.
Beds
The Beds division, which accounts for a little under 10% of network sales,
delivered a 1.0% increase in like for like sales. After such a strong result
from Beds in the previous period, this was a satisfactory result but we had
hoped to continue the momentum. While Beds are a natural extension of flooring
sales, they are typically a larger purchase, with an average sale price
approaching GBP300 compared to the average flooring sale which is c. GBP180.
With consumers once again becoming more cautious, the higher purchase cost of
beds slowed sales in the last quarter.
This has continued in the first 17 weeks of the new financial year when, against
strong comparatives in the previous year, like for like sales were down by
25.5%.
Trade sales
In addition to the introduction of 7 day a week coverage to the stores, the
Group has invested in developing its own in-house cutting operation for flooring
providing improvements in efficiency and service to the network. During the
year, a new cutting machine and sortation system was successfully introduced,
increasing the capacity and efficiency of this important facility.
People
I would like to thank all our employees for their hard work and commitment.
Since joining the AIM market, the business has grown substantially with revenues
more than doubling and the number of people who work under the United Carpets
brand has also increased significantly. We hope to continue to expand the
business and are grateful for the support of everyone involved with the Group.
Outlook
Given the uncertainty across the UK in terms of the impact of the tightened
fiscal regime and wider global trends it is hard to predict the future.
Certainly, the first 17 weeks of trading of the current year have continued to
reflect the weaker trading patterns of the last quarter of 2009/10. We are
therefore adopting a cautious approach to future trading although we will
continue to invest in marketing and store expansion where we believe we can
generate good returns. However, until confidence in the economy and the housing
market returns, we believe the trading environment will continue to be
challenging.
Peter Cowgill
Chairman
Preliminary announcement of results for the year ended 31 March 2010
Consolidated income statement
+----------------+------+-------------+----------+-------------+----------+----------+----------+-------------+----------+-------------+----------+----------+
| | Note | | | Exceptional | | 2010 | | | | Exceptional | | 2009 |
| | | | | items | | | | Results | | items | | |
| | | | | | | | | before | | | | |
| | | | | | | | | exceptional | | | | |
| | | Results | | | | | | items | | | | |
| | | before | | | | | | | | | | |
| | | exceptional | | | | | | | | | | |
| | | items | | | | | | | | | | |
+----------------+------+-------------+----------+-------------+----------+----------+----------+-------------+----------+-------------+----------+----------+
| | | | | | | | | | | | | |
+----------------+------+-------------+----------+-------------+----------+----------+----------+-------------+----------+-------------+----------+----------+
| | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 |
+----------------+------+-------------+----------+-------------+----------+----------+----------+-------------+----------+-------------+----------+----------+
| | | | | | | | | | | | | |
+----------------+------+-------------+----------+-------------+----------+----------+----------+-------------+----------+-------------+----------+----------+
| Revenue | | 27,475 | | - | | 27,475 | | 26,792 | | - | | 26,792 |
+----------------+------+-------------+----------+-------------+----------+----------+----------+-------------+----------+-------------+----------+----------+
| | | | | | | | | | | | | |
+----------------+------+-------------+----------+-------------+----------+----------+----------+-------------+----------+-------------+----------+----------+
| Cost of | | (9,295) | | - | | (9,295) | | (9,658) | | - | | (9,658) |
| sales | | | | | | | | | | | | |
+----------------+------+-------------+----------+-------------+----------+----------+----------+-------------+----------+-------------+----------+----------+
| | | | | | | | | | | | | |
+----------------+------+-------------+----------+-------------+----------+----------+----------+-------------+----------+-------------+----------+----------+
| | | | | | | | | | | | | |
+----------------+------+-------------+----------+-------------+----------+----------+----------+-------------+----------+-------------+----------+----------+
| Gross | | 18,180 | | - | | 18,180 | | 17,134 | | - | | 17,134 |
| profit | | | | | | | | | | | | |
+----------------+------+-------------+----------+-------------+----------+----------+----------+-------------+----------+-------------+----------+----------+
| | | | | | | | | | | | | |
+----------------+------+-------------+----------+-------------+----------+----------+----------+-------------+----------+-------------+----------+----------+
| Distribution | | (2,976) | | - | | (2,976) | | (2,898) | | - | | (2,898) |
| costs | | | | | | | | | | | | |
+----------------+------+-------------+----------+-------------+----------+----------+----------+-------------+----------+-------------+----------+----------+
| Administrative | 2 | (13,858) | | (365) | | (14,223) | | (13,065) | | (769) | | (13,834) |
| expenses | | | | | | | | | | | | |
+----------------+------+-------------+----------+-------------+----------+----------+----------+-------------+----------+-------------+----------+----------+
| Other | | 111 | | - | | 111 | | 119 | | - | | 119 |
| operating | | | | | | | | | | | | |
| income | | | | | | | | | | | | |
+----------------+------+-------------+----------+-------------+----------+----------+----------+-------------+----------+-------------+----------+----------+
| Profit | | 2 | | - | | 2 | | 4 | | - | | 4 |
| on | | | | | | | | | | | | |
| disposal | | | | | | | | | | | | |
| of | | | | | | | | | | | | |
| property, | | | | | | | | | | | | |
| plant and | | | | | | | | | | | | |
| equipment | | | | | | | | | | | | |
+----------------+------+-------------+----------+-------------+----------+----------+----------+-------------+----------+-------------+----------+----------+
| | | | | | | | | | | | | |
+----------------+------+-------------+----------+-------------+----------+----------+----------+-------------+----------+-------------+----------+----------+
| | | | | | | | | | | | | |
+----------------+------+-------------+----------+-------------+----------+----------+----------+-------------+----------+-------------+----------+----------+
| | | 1,459 | | (365) | | 1,094 | | 1,294 | | (769) | | 525 |
| Operating | | | | | | | | | | | | |
| profit | | | | | | | | | | | | |
| before | | | | | | | | | | | | |
| financing | | | | | | | | | | | | |
| costs | | | | | | | | | | | | |
+----------------+------+-------------+----------+-------------+----------+----------+----------+-------------+----------+-------------+----------+----------+
| | | | | | | | | | | | | |
+----------------+------+-------------+----------+-------------+----------+----------+----------+-------------+----------+-------------+----------+----------+
| Financial | | 10 | | - | | 10 | | 73 | | - | | 73 |
| income | | | | | | | | | | | | |
+----------------+------+-------------+----------+-------------+----------+----------+----------+-------------+----------+-------------+----------+----------+
| Financial | | (6) | | - | | (6) | | (3) | | - | | (3) |
| expenses | | | | | | | | | | | | |
+----------------+------+-------------+----------+-------------+----------+----------+----------+-------------+----------+-------------+----------+----------+
| | | | | | | | | | | | | |
+----------------+------+-------------+----------+-------------+----------+----------+----------+-------------+----------+-------------+----------+----------+
| | | | | | | | | | | | | |
+----------------+------+-------------+----------+-------------+----------+----------+----------+-------------+----------+-------------+----------+----------+
| Profit | | 1,463 | | (365) | | 1,098 | | 1,364 | | (769) | | 595 |
| before | | | | | | | | | | | | |
| tax | | | | | | | | | | | | |
+----------------+------+-------------+----------+-------------+----------+----------+----------+-------------+----------+-------------+----------+----------+
| | | | | | | | | | | | | |
+----------------+------+-------------+----------+-------------+----------+----------+----------+-------------+----------+-------------+----------+----------+
| Income | 4 | | | | | (415) | | | | | | (271) |
| tax | | | | | | | | | | | | |
| expense | | | | | | | | | | | | |
+----------------+------+-------------+----------+-------------+----------+----------+----------+-------------+----------+-------------+----------+----------+
| | | | | | | | | | | | | |
+----------------+------+-------------+----------+-------------+----------+----------+----------+-------------+----------+-------------+----------+----------+
| | | | | | | | | | | | | |
+----------------+------+-------------+----------+-------------+----------+----------+----------+-------------+----------+-------------+----------+----------+
| Profit | 7 | | | | | 683 | | | | | | 324 |
| for the | | | | | | | | | | | | |
| year | | | | | | | | | | | | |
+----------------+------+-------------+----------+-------------+----------+----------+----------+-------------+----------+-------------+----------+----------+
| | | | | | | | | | | | | |
+----------------+------+-------------+----------+-------------+----------+----------+----------+-------------+----------+-------------+----------+----------+
| Earnings | 5 | | | | | | | | | | | |
| per | | | | | | | | | | | | |
| share | | | | | | | | | | | | |
+----------------+------+-------------+----------+-------------+----------+----------+----------+-------------+----------+-------------+----------+----------+
| - Basic | | | | | | 0.84p | | | | | | 0.40p |
+----------------+------+-------------+----------+-------------+----------+----------+----------+-------------+----------+-------------+----------+----------+
| - | | | | | | 0.84p | | | | | | 0.40p |
| Diluted | | | | | | | | | | | | |
+----------------+------+-------------+----------+-------------+----------+----------+----------+-------------+----------+-------------+----------+----------+
| | | | | | | | | | | | | |
+----------------+------+-------------+----------+-------------+----------+----------+----------+-------------+----------+-------------+----------+----------+
All amounts are attributable to the equity holders of the parent, and all arise
from continuing activities. No amounts were recognised directly in equity, and
therefore no separate statement of other comprehensive income has been
presented.
Preliminary announcement of results for the year ended 31 March 2010
Consolidated balance sheet
+---------------------+-----------------+----------+---------+-----+---------+
| | Note | | 2010 | | 2009 |
+---------------------+-----------------+----------+---------+-----+---------+
| | | | | | |
+---------------------+-----------------+----------+---------+-----+---------+
| | | | GBP'000 | | GBP'000 |
+---------------------+-----------------+----------+---------+-----+---------+
| | | | | | |
+---------------------+-----------------+----------+---------+-----+---------+
| Non-current assets | | | | | |
+---------------------+-----------------+----------+---------+-----+---------+
| Property, plant and | | | 5,148 | | 5,455 |
| equipment | | | | | |
+---------------------+-----------------+----------+---------+-----+---------+
| | | | | | |
+---------------------+-----------------+----------+---------+-----+---------+
| | | | | | |
+---------------------+-----------------+----------+---------+-----+---------+
| | | | 5,148 | | 5,455 |
+---------------------+-----------------+----------+---------+-----+---------+
| | | | | | |
+---------------------+-----------------+----------+---------+-----+---------+
| | | | | | |
+---------------------+-----------------+----------+---------+-----+---------+
| Current assets | | | | | |
+---------------------+-----------------+----------+---------+-----+---------+
| Inventories | | | 2,670 | | 2,763 |
+---------------------+-----------------+----------+---------+-----+---------+
| Trade and other | | | 3,184 | | 2,766 |
| receivables | | | | | |
+---------------------+-----------------+----------+---------+-----+---------+
| Cash and cash | | | 2,201 | | 1,848 |
| equivalents | | | | | |
+---------------------+-----------------+----------+---------+-----+---------+
| | | | | | |
+---------------------+-----------------+----------+---------+-----+---------+
| | | | | | |
+---------------------+-----------------+----------+---------+-----+---------+
| | | | 8,055 | | 7,377 |
+---------------------+-----------------+----------+---------+-----+---------+
| | | | | | |
+---------------------+-----------------+----------+---------+-----+---------+
| | | | | | |
+---------------------+-----------------+----------+---------+-----+---------+
| Total assets | | | 13,203 | | 12,832 |
+---------------------+-----------------+----------+---------+-----+---------+
| | | | | | |
+---------------------+-----------------+----------+---------+-----+---------+
| | | | | | |
+---------------------+-----------------+----------+---------+-----+---------+
| Equity | | | | | |
+---------------------+-----------------+----------+---------+-----+---------+
| Issued capital | 7 | | 4,070 | | 4,070 |
+---------------------+-----------------+----------+---------+-----+---------+
| Share premium | 7 | | 1,106 | | 1,106 |
+---------------------+-----------------+----------+---------+-----+---------+
| Reserves | 7 | | (2,617) | | (2,699) |
+---------------------+-----------------+----------+---------+-----+---------+
| Retained earnings | 7 | | 2,418 | | 2,446 |
+---------------------+-----------------+----------+---------+-----+---------+
| | | | | | |
+---------------------+-----------------+----------+---------+-----+---------+
| | | | | | |
+---------------------+-----------------+----------+---------+-----+---------+
| Total shareholders' | | | 4,977 | | 4,923 |
| equity | | | | | |
+---------------------+-----------------+----------+---------+-----+---------+
| | | | | | |
+---------------------+-----------------+----------+---------+-----+---------+
| | | | | | |
+---------------------+-----------------+----------+---------+-----+---------+
| Non-current | | | | | |
| liabilities | | | | | |
+---------------------+-----------------+----------+---------+-----+---------+
| Financial | | | 76 | | 76 |
| liabilities - | | | | | |
| borrowings | | | | | |
+---------------------+-----------------+----------+---------+-----+---------+
| Trade and other | | | 2,349 | | 1,826 |
| payables | | | | | |
+---------------------+-----------------+----------+---------+-----+---------+
| Provisions | | | 743 | | 591 |
+---------------------+-----------------+----------+---------+-----+---------+
| Deferred tax | | | 106 | | 126 |
| liabilities | | | | | |
+---------------------+-----------------+----------+---------+-----+---------+
| | | | | | |
+---------------------+-----------------+----------+---------+-----+---------+
| | | | | | |
+---------------------+-----------------+----------+---------+-----+---------+
| | | | 3,274 | | 2,619 |
+---------------------+-----------------+----------+---------+-----+---------+
| | | | | | |
+---------------------+-----------------+----------+---------+-----+---------+
| | | | | | |
+---------------------+-----------------+----------+---------+-----+---------+
| Current liabilities | | | | | |
+---------------------+-----------------+----------+---------+-----+---------+
| Financial | | | 57 | | 39 |
| liabilities - | | | | | |
| borrowings | | | | | |
+---------------------+-----------------+----------+---------+-----+---------+
| Trade and other | | | 4,416 | | 5,011 |
| payables | | | | | |
+---------------------+-----------------+----------+---------+-----+---------+
| Current tax | | | 479 | | 240 |
| liabilities | | | | | |
+---------------------+-----------------+----------+---------+-----+---------+
| | | | | | |
+---------------------+-----------------+----------+---------+-----+---------+
| | | | | | |
+---------------------+-----------------+----------+---------+-----+---------+
| | | | 4,952 | | 5,290 |
+---------------------+-----------------+----------+---------+-----+---------+
| | | | | | |
+---------------------+-----------------+----------+---------+-----+---------+
| | | | | | |
+---------------------+-----------------+----------+---------+-----+---------+
| Total liabilities | | | 8,226 | | 7,909 |
+---------------------+-----------------+----------+---------+-----+---------+
| | | | | | |
+---------------------+-----------------+----------+---------+-----+---------+
| | | | | | |
+---------------------+-----------------+----------+---------+-----+---------+
| Total equity and | | | 13,203 | | 12,832 |
| liabilities | | | | | |
+---------------------+-----------------+----------+---------+-----+---------+
| | | | | | |
+---------------------+-----------------+----------+---------+-----+---------+
Preliminary announcement of results for the year ended 31 March 2010
Consolidated cash flow statement
+------------------------------+--------+----------+---------+-----+----------+
| | Note | | 2010 | | 2009 |
+------------------------------+--------+----------+---------+-----+----------+
| | | | | | |
+------------------------------+--------+----------+---------+-----+----------+
| | | | GBP'000 | | GBP'000 |
+------------------------------+--------+----------+---------+-----+----------+
| | | | | | |
+------------------------------+--------+----------+---------+-----+----------+
| Cash flows from operating | | | | | |
| activities | | | | | |
+------------------------------+--------+----------+---------+-----+----------+
| Cash generated from | 8 | | 1,879 | | 3,341 |
| operations | | | | | |
+------------------------------+--------+----------+---------+-----+----------+
| Interest paid | | | (6) | | (3) |
+------------------------------+--------+----------+---------+-----+----------+
| Income tax paid | | | (196) | | (393) |
+------------------------------+--------+----------+---------+-----+----------+
| | | | | | |
+------------------------------+--------+----------+---------+-----+----------+
| | | | | | |
+------------------------------+--------+----------+---------+-----+----------+
| Net cash from operating | | | 1,677 | | 2,945 |
| activities | | | | | |
+------------------------------+--------+----------+---------+-----+----------+
| | | | | | |
+------------------------------+--------+----------+---------+-----+----------+
| | | | | | |
+------------------------------+--------+----------+---------+-----+----------+
| Cash flows from investing | | | | | |
| activities | | | | | |
+------------------------------+--------+----------+---------+-----+----------+
| Proceeds from sale of | | | 20 | | 4 |
| property, plant and | | | | | |
| equipment | | | | | |
+------------------------------+--------+----------+---------+-----+----------+
| Acquisition of property, | | | (695) | | (2,141) |
| plant and equipment | | | | | |
+------------------------------+--------+----------+---------+-----+----------+
| Interest received | | | 10 | | 73 |
+------------------------------+--------+----------+---------+-----+----------+
| | | | | | |
+------------------------------+--------+----------+---------+-----+----------+
| | | | | | |
+------------------------------+--------+----------+---------+-----+----------+
| Net cash from investing | | | (665) | | (2,064) |
| activities | | | | | |
+------------------------------+--------+----------+---------+-----+----------+
| | | | | | |
+------------------------------+--------+----------+---------+-----+----------+
| | | | | | |
+------------------------------+--------+----------+---------+-----+----------+
| Cash flows from financing | | | | | |
| activities | | | | | |
+------------------------------+--------+----------+---------+-----+----------+
| Payment of finance lease | | | (48) | | (33) |
| liabilities | | | | | |
+------------------------------+--------+----------+---------+-----+----------+
| Dividends paid | | | (611) | | (448) |
+------------------------------+--------+----------+---------+-----+----------+
| | | | | | |
+------------------------------+--------+----------+---------+-----+----------+
| | | | | | |
+------------------------------+--------+----------+---------+-----+----------+
| Net cash from financing | | | (659) | | (481) |
| activities | | | | | |
+------------------------------+--------+----------+---------+-----+----------+
| | | | | | |
+------------------------------+--------+----------+---------+-----+----------+
| | | | | | |
+------------------------------+--------+----------+---------+-----+----------+
| Net increase in cash and | | | 353 | | 400 |
| cash equivalents | | | | | |
+------------------------------+--------+----------+---------+-----+----------+
| Cash and cash equivalents at | | | 1,848 | | 1,448 |
| the start of the year | | | | | |
+------------------------------+--------+----------+---------+-----+----------+
| | | | | | |
+------------------------------+--------+----------+---------+-----+----------+
| | | | | | |
+------------------------------+--------+----------+---------+-----+----------+
| Cash and cash equivalents at | 9 | | 2,201 | | 1,848 |
| the end of the year | | | | | |
+------------------------------+--------+----------+---------+-----+----------+
| | | | | | |
+------------------------------+--------+----------+---------+-----+----------+
Preliminary announcement of results for the year ended 31 March 2010
Notes to the preliminary announcement
1.Basis of preparation
The financial information contained in this unaudited preliminary announcement
does not constitute accounts as defined by section 435 of the Companies Act
2006. The financial information for the year ended 31 March 2009 is derived from
the statutory accounts for that period which have been delivered to the
Registrar of Companies. The auditors reported on those accounts; their report
was unqualified and did not contain a statement under either section 498(2) or
section 498(3) of the Companies Act 2006. The statutory accounts for the year
ended 31 March 2010 will be finalised based on the information in this unaudited
preliminary announcement and will be delivered to the Registrar of Companies in
due course. The Group has prepared its consolidated financial statements for the
year ended 31 March 2010 in accordance with International Financial Reporting
Standards ("IFRS") as adopted by the European Union.
2. Exceptional items
+-------------------------------------------+----------+---------+--+---------+
| | | 2010 | | 2009 |
+-------------------------------------------+----------+---------+--+---------+
| | | GBP'000 | | GBP'000 |
+-------------------------------------------+----------+---------+--+---------+
| | | | | |
+-------------------------------------------+----------+---------+--+---------+
| Impairment of property, plant and | | 138 | | 200 |
| equipment | | | | |
+-------------------------------------------+----------+---------+--+---------+
| Provision against onerous leases | | 227 | | 569 |
+-------------------------------------------+----------+---------+--+---------+
| | | | | |
| | | 365 | | 769 |
+-------------------------------------------+----------+---------+--+---------+
| | | | | |
| | | | | |
+-------------------------------------------+----------+---------+--+---------+
At the end of each financial year, loss making stores are reviewed and where the
directors consider that the fair value of the related fixed assets less the
costs to sell those assets is lower than their net book value an impairment
charge has been included in administrative expenses. Where there is an onerous
property lease on such stores this has also been provided as an exceptional
item.
3. Business segments
Segment information is presented in respect of the Group's business segments,
which are the primary basis of segment reporting. The business segment reporting
format reflects the Group's management and internal reporting structure.
Inter segment pricing is determined on an arm's length basis.
Segment results include items directly attributable to a segment as well as
those that can be allocated on a reasonable basis.
+-------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| | Franchising | Flooring | Beds | Trade | Consolidated |
| | | | | Sales | |
+-------------+-------------------+-------------------+-------------------+-------------------+-------------------+
| | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 |
+-------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| | | | | | | | | | | |
+-------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| Segment | 11,347 | 9,172 | 8,032 | 10,348 | 4,834 | 4,439 | 3,262 | 2,833 | 27,475 | 26,792 |
| revenue | ____ | ____ | ____ | ____ | ____ | ____ | ____ | ____ | ____ | ____ |
+-------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| | | | | | | | | | | |
+-------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| Segment | 2,034 | 1,227 | (71) | (162) | 391 | 394 | (56) | 55 | 2,298 | 1,514 |
| results | ____ | ____ | ____ | ____ | ____ | ____ | ____ | ____ | | |
+-------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| | | | | | | | | | | |
+-------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| Unallocated | | | | | | | | | (1,204) | (989) |
| expenses | | | | | | | | | ____ | ____ |
+-------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| | | | | | | | | | | |
+-------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| Operating | | | | | | | | | 1,094 | 525 |
| profit | | | | | | | | | | |
| before | | | | | | | | | | |
| financing | | | | | | | | | | |
| costs | | | | | | | | | | |
+-------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| Net | | | | | | | | | 4 | 70 |
| financing | | | | | | | | | | |
| costs | | | | | | | | | | |
+-------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| Income tax | | | | | | | | | (415) | (271) |
| expense | | | | | | | | | ____ | ____ |
+-------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| | | | | | | | | | | |
| Profit for | | | | | | | | | 683 | 324 |
| the year | | | | | | | | | _____ | _____ |
+-------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| | | | | | | | | | | |
+-------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| | | | | | | | | | | |
+-------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
4. Taxation on ordinary activities
Analysis of charge for the year:
+--------------------------+------------------+---------+--+---------+
| | | 2010 | | 2009 |
+--------------------------+------------------+---------+--+---------+
| | | GBP'000 | | GBP'000 |
+--------------------------+------------------+---------+--+---------+
| | | | | |
+--------------------------+------------------+---------+--+---------+
| Current tax: | | | | |
+--------------------------+------------------+---------+--+---------+
| UK corporation tax | | 433 | | 353 |
+--------------------------+------------------+---------+--+---------+
| Adjustments in respect | | 1 | | 26 |
| of prior years | | | | |
+--------------------------+------------------+---------+--+---------+
| | | 434 | | 379 |
+--------------------------+------------------+---------+--+---------+
| Deferred tax: | | | | |
+--------------------------+------------------+---------+--+---------+
| Release for the year | | (21) | | (82) |
+--------------------------+------------------+---------+--+---------+
| Adjustments in respect | | 2 | | (26) |
| of prior years | | | | |
+--------------------------+------------------+---------+--+---------+
| | | | | |
| Tax on profit on | | 415 | | 271 |
| ordinary activities | | | | |
| | | | | |
+--------------------------+------------------+---------+--+---------+
| | | | | |
| | | | | |
+--------------------------+------------------+---------+--+---------+
The tax assessed on ordinary activities for the year differs to the standard
rate of corporation tax in the UK of 28% (2009: 28%).
+---------------------------------------------+----------+--+---------+
| | 2010 | | 2009 |
+---------------------------------------------+----------+--+---------+
| | GBP'000 | | GBP'000 |
+---------------------------------------------+----------+--+---------+
| | | | |
+---------------------------------------------+----------+--+---------+
| Profit before tax | 1,098 | | 595 |
+---------------------------------------------+----------+--+---------+
| | | | |
+---------------------------------------------+----------+--+---------+
| | | | |
+---------------------------------------------+----------+--+---------+
| Profit by rate of tax | 307 | | 167 |
+---------------------------------------------+----------+--+---------+
| | | | |
+---------------------------------------------+----------+--+---------+
| Effect of: | | | |
+---------------------------------------------+----------+--+---------+
| Expenses not deductible for tax purposes | 38 | | 34 |
+---------------------------------------------+----------+--+---------+
| Non qualifying depreciation | 76 | | 79 |
+---------------------------------------------+----------+--+---------+
| Marginal relief | (4) | | (9) |
+---------------------------------------------+----------+--+---------+
| Adjustment to tax charge in respect of | 3 | | - |
| prior years | | | |
+---------------------------------------------+----------+--+---------+
| Other | (5) | | - |
+---------------------------------------------+----------+--+---------+
| | | | |
| Total tax | 415 | | 271 |
+---------------------------------------------+----------+--+---------+
5. Basic and diluted earnings per share
Basic earnings per share
The calculation of basic earnings per share for the year ended 31 March
2010 was based on the profit attributable to ordinary shareholders of GBP683,000
(2009: GBP324,000) and a weighted average number of ordinary shares outstanding
during the year ended 31 March 2010 of 81,400,000 (2009: 81,400,000).
Diluted earnings per share
The calculation of diluted earnings per share for the year ended 31 March
2010 was based on profit attributable to ordinary shareholders of GBP683,000 and
a weighted average number of ordinary shares outstanding during the year ended
31 March 2010 of 81,480,759. Diluted earnings per share for the year ended 31
March 2009 was the same as basic earnings per share as the share options in
issue were non-dilutive during that year.
Weighted average number of ordinary shares (diluted)
+---------------------------------------------+------------+----------+------------+
| | 2010 | | 2009 |
+---------------------------------------------+------------+----------+------------+
| For the year ended 31 March 2010 | | | |
+---------------------------------------------+------------+----------+------------+
| Weighted average number of ordinary shares | 81,400,000 | | 81,400,000 |
| at 31 March | | | |
+---------------------------------------------+------------+----------+------------+
| Effect of share options in issue | 80,759 | | - |
| | | | |
+---------------------------------------------+------------+----------+------------+
| | | | |
| Weighted average number of ordinary shares | 81,480,759 | | 81,400,000 |
| (diluted) at 31 March | | | |
+---------------------------------------------+------------+----------+------------+
6. Dividends
Dividends on equity shares:
+---------------------------------------------+---------+----------+---------+
| | 2010 | | 2009 |
+---------------------------------------------+---------+----------+---------+
| | GBP'000 | | GBP'000 |
| | | | |
| | | | |
+---------------------------------------------+---------+----------+---------+
| Dividends paid during the year on ordinary | 611 | | 448 |
| shares | | | |
+---------------------------------------------+---------+----------+---------+
7. Capital and reserves
Share capital and share premium
The Group recorded the following amounts within shareholder's equity as a
result of the issuance of ordinary shares.
+------------------------------------------+----------+----------+----------+
| | Share Capital |
+------------------------------------------+--------------------------------+
| | 2010 | | 2009 |
+------------------------------------------+----------+----------+----------+
| | GBP'000 | | GBP'000 |
| | | | |
| | | | |
+------------------------------------------+----------+----------+----------+
| 81,400,000 ordinary shares of 5 pence | | | |
| each | 4,070 | | 4,070 |
| | | | |
+------------------------------------------+----------+----------+----------+
+----------+----------+----------+
| Share Premium |
+--------------------------------+
| 2010 | | 2009 |
+----------+----------+----------+
| GBP'000 | | GBP'000 |
| | | |
| | | |
+----------+----------+----------+
| | | |
| 1,106 | | 1,106 |
| | | |
+----------+----------+----------+
Reserves
+---------------------------------+---------+----------+-------------+----------+---------+
| | | | | | |
| | Merger | | Share-based | | |
| | reserve | | payment | | Total |
| | | | reserve | | |
| | | | | | |
+---------------------------------+---------+----------+-------------+----------+---------+
| | | | | | |
+---------------------------------+---------+----------+-------------+----------+---------+
| | | | | | |
| | GBP'000 | | GBP'000 | | GBP'000 |
| | | | | | |
| | | | | | |
+---------------------------------+---------+----------+-------------+----------+---------+
| At 1 April 2009 | (3,110) | | 411 | | (2,699) |
+---------------------------------+---------+----------+-------------+----------+---------+
| Charge for the year | - | | 82 | | 82 |
+---------------------------------+---------+----------+-------------+----------+---------+
| | | | | | |
+---------------------------------+---------+----------+-------------+----------+---------+
| | (3,110) | | 493 | | (2,617) |
| At 31 March 2010 | | | | | |
+---------------------------------+---------+----------+-------------+----------+---------+
The merger reserve is the difference between the nominal value of shares issued
in order to acquire the merged entities and the share capital and share premium
account of the merged entities.
7. Capital and reserves (continued)
+------------------------------------------------------------+----------+
| | |
| | Retained |
| | earnings |
| | |
+------------------------------------------------------------+----------+
| | |
| | GBP'000 |
| | |
| | |
+------------------------------------------------------------+----------+
| | |
+------------------------------------------------------------+----------+
| At 1 April 2009 | 2,446 |
+------------------------------------------------------------+----------+
| Profit for the year | 683 |
+------------------------------------------------------------+----------+
| Dividends paid | (611) |
+------------------------------------------------------------+----------+
| Share-based payments | (100) |
+------------------------------------------------------------+----------+
| | |
+------------------------------------------------------------+----------+
| | |
| At 31 March 2010 | 2,418 |
+------------------------------------------------------------+----------+
8. Reconciliation of operating profit to net cash inflow from operating
activities
+-------------------------------------------------+---------+----------+---------+
| | 2010 | | 2009 |
+-------------------------------------------------+---------+----------+---------+
| | GBP'000 | | GBP'000 |
+-------------------------------------------------+---------+----------+---------+
| | | | |
+-------------------------------------------------+---------+----------+---------+
| Operating profit | 1,094 | | 525 |
+-------------------------------------------------+---------+----------+---------+
| Profit on disposal of property, plant and | (2) | | (4) |
| equipment | | | |
+-------------------------------------------------+---------+----------+---------+
| Depreciation of property, plant and equipment | 912 | | 838 |
+-------------------------------------------------+---------+----------+---------+
| Impairment of property, plant and equipment | 138 | | 200 |
+-------------------------------------------------+---------+----------+---------+
| Provision against onerous leases | 152 | | 569 |
+-------------------------------------------------+---------+----------+---------+
| Share-based payments | (18) | | 90 |
+-------------------------------------------------+---------+----------+---------+
| Decrease/(increase) in inventories | 93 | | (416) |
+-------------------------------------------------+---------+----------+---------+
| (Increase)/decrease in trade and other | (418) | | 472 |
| receivables | | | |
+-------------------------------------------------+---------+----------+---------+
| (Decrease)/increase in trade and other payables | (72) | | 1,067 |
+-------------------------------------------------+---------+----------+---------+
| | | | |
+-------------------------------------------------+---------+----------+---------+
| | 1,879 | | 3,341 |
+-------------------------------------------------+---------+----------+---------+
9. Analysis of changes in net funds
+---------------------+---------+----------+----------+----------+-----------+----------+---------+
| | | | | | Non-cash | | |
| | 2009 | | Cashflow | | movements | | 2010 |
+---------------------+---------+----------+----------+----------+-----------+----------+---------+
| | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 |
+---------------------+---------+----------+----------+----------+-----------+----------+---------+
| | | | | | | | |
+---------------------+---------+----------+----------+----------+-----------+----------+---------+
| Bank and cash | 1,848 | | 353 | | - | | 2,201 |
+---------------------+---------+----------+----------+----------+-----------+----------+---------+
| | | | | | | | |
+---------------------+---------+----------+----------+----------+-----------+----------+---------+
| Hire purchase | | | | | | | |
| contracts: | | | | | | | |
+---------------------+---------+----------+----------+----------+-----------+----------+---------+
| Due within one year | (39) | | 48 | | (66) | | (57) |
+---------------------+---------+----------+----------+----------+-----------+----------+---------+
| Due after more than | (76) | | - | | - | | (76) |
| one year | | | | | | | |
+---------------------+---------+----------+----------+----------+-----------+----------+---------+
| | | | | | | | |
| Net funds | 1,733 | | 401 | | (66) | | 2,068 |
+---------------------+---------+----------+----------+----------+-----------+----------+---------+
| | | | | | | | |
+---------------------+---------+----------+----------+----------+-----------+----------+---------+
10. Reconciliation of net cash flow to movement in net funds
+---------------------------------+----------------+---------+----------+---------+
| | | 2010 | | 2009 |
+---------------------------------+----------------+---------+----------+---------+
| | | GBP'000 | | GBP'000 |
| | | | | |
+---------------------------------+----------------+---------+----------+---------+
| Increase in cash in the year | | 353 | | 400 |
+---------------------------------+----------------+---------+----------+---------+
| Cash outflow from hire purchase | | 48 | | 33 |
| financing | | | | |
+---------------------------------+----------------+---------+----------+---------+
| Assets acquired under hire | | (66) | | (35) |
| purchase agreements | | | | |
+---------------------------------+----------------+---------+----------+---------+
| Change in net funds resulting | | 335 | | 398 |
| from cash flows | | | | |
| | | | | |
+---------------------------------+----------------+---------+----------+---------+
| Net funds at start of year | | 1,733 | | 1,335 |
| | | | | |
+---------------------------------+----------------+---------+----------+---------+
| | | | | |
| Net funds at end of year | | 2,068 | | 1,733 |
| | | | | |
+---------------------------------+----------------+---------+----------+---------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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