RNS Number:7995J
Beattie (James) PLC
09 April 2003
Embargoed until 0700 9 April 2003
James Beattie PLC
("Beatties" or the "Company")
Preliminary Results for the Year Ended 31 January 2003
Financial Highlights
2003 2002
(Restated)
#m #m
Turnover 141.6 128.4
Operating Profit 7.0 8.0
Profit before tax 7.0 8.5
Earnings per share 12.0p 14.5p
Final Dividend 8.40p 8.40p
Total Dividend 11.90p 11.90p
- Total sales up 10.3% to #141.6 million
- Profit before tax #7.0 million (2002: #8.5 million).
- Operating profit #7.0 million (2002: #8.0 million)
- Profit reduction principally due to losses at Birmingham
- New store in Huddersfield (opened 1 March 2002) performing
well and generating profits
- Appointment of David Sankey and Terry Stannard as
independent non-executive directors
- New store in Telford opening 5 September 2003
- Dividend maintained at 11.9p for the year
- Total sales in February and March up 1.0%. Like for like
sales (excluding Birmingham and Huddersfield) up 0.1% for the
same period
Chris Jones, Chairman, commented:
"All the indications are that 2003 will be another challenging
year. Our business though is strong and with every effort being
made to improve all aspects of Birmingham's performance and with
the opening of the new Telford store on 5 September, the
Directors can be cautiously optimistic of growing the business
positively."
- ends -
For further information, please contact:
James Beattie PLC (9.4.03) 020 7067 0700
Chris Jones, Managing Director (Thereafter) 01902 643 350
Bill Kelly, Finance Director 01902 643 352
Weber Shandwick Square Mile 020 7067 0700
Becky Haywood / Cass Helstrip
James Beattie PLC
("Beatties" or the "Company")
Preliminary Results for the Year Ended 31 January 2003
CHAIRMAN'S STATEMENT
Results
James Beattie PLC, in the year ended 31 January 2003 achieved an
increase in turnover of 10.3% to #141.6 million (2002:
#128.4 million). Operating profit was #7.0 million (2002:
#8.0 million - restated) and profit before tax was #7.0 million
(2002: #8.5 million - restated).
New store pre-opening costs charged against profit were #250,000
(2002: #884,000).
Our results were affected by the very poor performance of our
Birmingham store (opened 1 September 2001). The figures
reported are after incurring a trading loss of #1.5 million
(2002: #0.2 million) from the store and the first full year of
the increased competition from the Touchwood Court development,
which affected sales at our Solihull and Sutton Coldfield stores
in particular. Excluding the loss at Birmingham and trading
impact of Touchwood Court, the Directors believe the result for
the year would have been comparable with the previous year.
Earnings per share were 12.0 p (2002: 14.5p - restated).
Dividend
The Board paid an unchanged dividend of 3.5p per share in
respect of the six months ended 31 July 2002.
Given the importance of the dividend to shareholders, the Board
announced in its January Trading Statement its intention to
maintain the final dividend at 8.4 p per share. I am pleased
to confirm that the Directors propose to seek approval for this
at the Annual General Meeting. The dividend will be paid on 13
June 2003 to shareholders on the register at 16 May 2003.
Board Changes
As previously announced, David Sankey and Terry Stannard joined
the Board as Non Executive Directors on 29 July 2002. Following
these appointments, I was then invited by the Board to become
Executive Chairman which I was delighted to accept. My dual
role as Managing Director and Chairman is not intended to be for
an extended period, however, the Board felt it to be the
appropriate measure at that time and for the time being.
The new Non Executive Directors have made an immediate
impression and will continue to contribute for the benefit of
the business.
Outlook and Current Trading
All the indications are that 2003 will be another challenging
year. Our business though is strong and with every effort being
made to improve all aspects of Birmingham's performance and with
the opening of the new Telford store on 5 September, the
Directors can be cautiously optimistic of growing the business
positively.
Total sales in February and March are 1% ahead of last year.
Like for like sales in the same period, excluding Birmingham and
Huddersfield, are 0.1% ahead of last year.
C. M. S. Jones
Chairman
9 April 2003
REVIEW OF THE YEAR
Overview
The results for the year have been mixed. The performance of
the established stores was satisfactory, with the exception of
Solihull and Sutton Coldfield which were adversely affected by
the first full year of the newly opened and adjacent Touchwood
Court Development. Of the two new stores, Huddersfield, opened
in March 2002, has performed in line with expectations and is
profitable; Birmingham, on the other hand, has been very
disappointing and equates to the profit shortfall against the
previous year.
Birmingham
In the first two months following its opening on 1 September
2001, the Birmingham store traded at some 40% above our
expectations. Since then, the store has been trading at some
30% below budget and continues to do so. The reasons have been
well publicised, but whilst the continuing disruption in the
centre of Birmingham has undoubtedly played a major part in the
underperformance and has affected many other traders in the City
centre similarly, changes and improvements are being made to
ensure that a turnaround is achieved.
Action has been taken to reduce costs as well as to stimulate
sales and our approach to marketing, presentation and our
merchandise selection are all being reviewed to improve sales
performance.
Gross Profit Margin
Intense high street competition immediately pre and post
Christmas led to a much higher level of discount trading
throughout the sector. This resulted in us selling a higher
than usual proportion of marked down merchandise in order to
remain competitive and to ensure that end of season ranges were
not carried forward. This action has impacted upon margin.
However, it has ensured that stocks are clean and in balance for
the commencement of the new trading year.
Merchandise
Across the business, our merchandise falls into six broad
categories, which are set out below together with their
performance in the year.
Ladies Apparel (31% of sales)- A satisfactory year for Ladies'
apparel, benefiting from the slight change in emphasis on brands
in favour of more younger, contemporary ranges - something we
intend to do more of in the coming year.
Menswear (10% of sales)- A difficult year for Menswear,
following a very strong performance in 2001/2002. Within the
numbers, we enjoyed much success from the development of our new
'Gifts for Men' section, particularly in the all important
Christmas trading period.
Fashion Accessories (13% of sales) - A good year for Fashion
Accessory division, with strong performances from sunglasses,
handbags and small leathers - the latter featuring a strong
fashion statement and excellent value for money.
Perfumery (11% of sales) - Another solid performance from our
Perfumery division, despite several weeks of disruption to our
Wolverhampton perfumery department in September and October
during extensive refurbishment. In the coming year, we look
forward to reaping the benefits of this major investment in our
flagship store.
Homewares & Leisure (30% of sales) - A disappointing year for
Homewares and Leisure, particularly from some of the household
brands which major on table top merchandise linked to formal
dining. However, we did manage to redress some of these
disappointments with a very strong performance from our own
bought china and glass divisions.
Catering (5% of sales) - Another year of good growth from our
popular customer restaurants with an excellent performance from
the introduction, a little over twelve months ago, of Costa
Coffee in our Wolverhampton store.
"Shop with Confidence"
We remain committed to delivering a total customer satisfaction
guarantee through the provision of our "shop with confidence"
policy - a cornerstone of our trading philosophy:
"If you are not completely satisfied,
simply return your purchase and we will
happily make an exchange, credit or
refund."
We are extremely pleased and grateful for our customers' support
and loyalty.
Store Developments
We are delighted by the response from the people of Huddersfield
to our new store which opened on 1 March 2002. It has traded
well and has produced a profit in the year.
We now look forward to the opening of our new 80,000 sq. ft.
store in Telford on 5 September 2003. We will be part of a
busy established shopping centre and a town which continues to
grow.
We are continuing to pursue similar new store opportunities in
order to grow the business.
Cash Flow Capital Expenditure
Gearing at 31 January 2003 stood at 1% (#0.4 million) down from
5.7% (#2.5 million) a year ago. With cash generated from
operations up 5% at #10 million and with routine capital
expenditure at just #1 million, cash generated was #2.2 million
compared to an outflow of #11.4 million in the previous year.
The year end represents the high point in the Company's cash
cycle. With the opening of Telford in September, the Company
will remain in borrowing for the year, with overall capital
expenditure exceeding cash generated from operations.
Systems
The Wolverhampton store has just been converted to the Company's
new EPOS system. The project roll out across the stores over
three years has cost in excess of #2 million and is now
complete.
We are well prepared for the implementation of the new "chip and
pin" technology for the more secure processing of credit and
debit cards so that by the middle of next year, the whole "till"
system will have been overhauled.
Investment in loss prevention systems, including full CCTV
coverage, remains a priority in order to provide a secure
shopping and working environment and reduce inventory shrinkage.
Pensions (James Beattie PLC Pension Scheme)
Despite the defined benefit scheme being closed to new entrants
since 5 April 2001 there remains an ongoing funding requirement
from the Company.
Falls in the Stock Market have impacted on the Pension Scheme
which traditionally has been heavily weighted into equities.
However some eighteen months ago the Trustees of the Scheme took
the decision to reduce its exposure to equities in favour of
bonds/gilts. This action has reduced the potential shortfall in
the fund.
Recognising the need for higher contributions the Trustees, in
conjunction with the Company, agreed to increase contribution
rates from 1 January 2003 with employee rates increasing from 5%
to 7% and the Company contribution rates increasing from 5% to
9%.
The scheme is currently subject to its biennial Actuarial
Valuation, the results of which will confirm the extent of the
Schemes deficit and the need for future funding. However, in
advance of these results, the Company has decided, with effect
from 1 April 2003, to increase its contribution level by a
further 4% to 13%. Member contribution rates remain unchanged
at the present level of 7%, giving a total contribution level of
20%.
The Company recognises the importance and value of the Scheme to
its members and is committed, as far as it can be, to
maintaining it and is prepared to support the Scheme through
additional contributions if necessary.
The accounts for the year ended 31st January 2003 include the
full adoption of FRS17, the new Accounting Standard for pensions
and retirement benefits. Whilst adoption results in the
Scheme's deficit at the year end being recognised in the Balance
Sheet, the Standard does offer the advantage of taking future
volatility out of the charge to the Profit and Loss Account.
Members joining the Company since April 2001 are invited to join
a Stakeholder pension arrangement administered by Legal and
General with Members' contributions supplemented by the Company.
Our People
We continue to benefit from a membership who are totally
committed to the Company's longstanding belief in the highest
levels of customer service. The Board extends its thanks and
appreciation to all members for their hard work and support.
We were delighted to be awarded Learning and Skills Council
Beacon status by the Secretary of State at the Department for
Education and Skills in June 2002 in recognition of the
excellence of our Foundation Modern Apprenticeship scheme.
Outlook
The current economic and political climate is clearly one that
will make 2003 challenging. The continued lack of sales
price inflation in our sector of retail, at a time when prime
costs such as salaries, pensions, National Insurance, rents
and insurances continue to increase, provides a further
challenge.
However, we have a number of opportunities available to us.In
particular improving the performance of the Birmingham store
and the opening of Telford on 5 September 2003 provide scope
for positive growth.
C. M. S. Jones
Chairman
9 April 2003
JAMES BEATTIE PLC
PROFIT AND LOSS ACCOUNT
For the year ended 31 January 2003
2003 2002
(Restated)
#000 #000
Turnover 141,589 128,401
__________ ___________
Gross profit 47,916 44,033
Operating expenses (40,901) (36,365)
Other operating income - 350
__________ ___________
Operating profit 7,015 8,018
________________________________________________________________________
Operating profit before pre opening costs 7,265 8,902
Pre opening costs (250) (884)
Operating profit 7,015 8,018
________________________________________________________________________
Net interest (payable) (384) (67)
Other finance income 380 500
__________ ___________
Profit on ordinary activities before taxation 7,011 8,451
________________________________________________________________________
Profit on ordinary activities before taxation
and pre opening costs 7,261 9,335
Pre opening costs (250) (884)
Profit on ordinary activities before taxation 7,011 8,451
________________________________________________________________________
Taxation (2,129) (2,589)
__________ ___________
Profit for the financial year 4,882 5,862
Dividends (4,860) (4,835)
__________ ___________
Retained profit for the year 22 1,027
========== ===========
Pence Pence
Dividends - Interim paid 3.50 3.50
Final proposed 8.40 8.40
__________ ___________
11.90 11.90
========== ===========
Earnings per share 12.0p 14.5p
Diluted earnings per share 11.9p 14.4p
Earnings per share, excluding pre opening costs 12.4p 16.0p
All of the company's activities are from continuing operations.
JAMES BEATTIE PLC
BALANCE SHEET
As at 31 January 2003
2003 2002
(Restated)
#000 #000 #000 #000
Fixed assets
Tangible assets 45,957 48,317
Current assets
Stock 17,923 17,437
Debtors 2,260 2,288
Cash at bank and in hand - 797
_________ _________
20,183 20,522
Creditors:
Amounts falling due within one year (18,130) (22,994)
_________ _________
Net current assets/(liabilities) 2,053 (2,472)
_________ _________
Total assets less current liabilities 48,010 45,845
Creditors:
Amounts falling due after more
than one year (938) -
Provisions for liabilities and charges (2,711) (1,902)
_________ _________
Net assets excluding pension 44,361 43,943
(liability)/asset
Pension (liability)/asset (4,551) 2,121
_________ _________
Net assets including pension
(liability)/assets 39,810 46,064
_________ _________
Capital and reserves
Called up equity share capital 10,196 10,171
Share premium account 3,248 3,138
Capital redemption reserve 2,809 2,809
_________ _________
16,253 16,118
Profit and loss account 23,557 29,946
_________ _________
Equity shareholders' funds 39,810 46,064
_________ _________
JAMES BEATTIE PLC
CASHFLOW STATEMENT
For the year ended 31 January 2003
2003 2002
#000 #000 #000 #000
Net cash inflow from operating activities 10,180 9,672
Returns on investments and servicing
of finance
Investment income and interest
received 91 208
Interest paid (528) (389)
_________ _________
Net cash (outflow) from returns on
investments and servicing of finance (437) (181)
_________ _________
9,743 9,491
Taxation (1,784) (3,105)
Capital expenditure
Payments to acquire tangible
fixed assets (1,092) (13,840)
Receipts from sales of tangible
fixed assets 15 18
_________ _________
Net cash outflow for capital
expenditure (1,077) (13,822)
Equity dividends paid (4,850) (4,765)
_________ _________
Cash inflow/(outflow) before
management of liquid resources and
financing 2,032 (12,201)
Management of liquid resources
Decrease in short term investments - 7,000
Financing
Issue of Ordinary shares including share
premium less expenses 135 849
_________ _________
Increase/(decrease) in cash 2,167 (4,352)
_________ _________
JAMES BEATTIE PLC
STATEMENT OF TOTAL RECOGNISED GAINS & LOSSES
For the year ended 31 January 2003
2003 2002
(Restated)
#000 #000
Profit for the financial year 22 1,027
Actuarial loss recognised in the pension scheme (9,270) (8,436)
Deferred tax arising on (losses)/gains in
the pension scheme 2,859 2,531
__________ __________
Total recognised gains and (losses) relating
to the financial year (6,389) (4,878)
==========
Prior year adjustment 726
___________
Total gains and (losses) (5,663)
===========
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
2003 2002
(Restated)
#000 #000
Profit for the financial year 4,882 5,862
Dividends (4,860) (4,835)
Share capital issued 135 849
Other recognised gains and (losses) (6,411) (5,905)
__________ __________
Decrease in equity shareholders' funds (6,254) (4,029)
As at 1 February (originally #45,338,000
restated for prior year adjustment of #726,000) 46,064 50,093
__________ __________
As at 31 January 39,810 46,064
__________ __________
JAMES BEATTIE PLC
NOTES TO THE CASH FLOW
For the year ended 31 January 2003
2003 2002
(Restated)
#000 #000
(i) Reconcilation of operating profit to
operating cashflow:
Operating profit (after pre opening costs) 7,015 8,018
Depreciation of tangible fixed assets 3,377 2,977
Profit on sales of tangible fixed assets (13) (11)
(Increase) in stocks (486) (3,487)
Decrease/(Increase) in debtors 284 (600)
(Decrease)/Increase in creditors (377) 2,055
Non-cash adjustment in respect of pensions 380 720
__________ __________
Net cash inflow from operating activities 10,180 9,672
__________ __________
2003 2002
(ii) Reconciliation of net cash flow to #000 #000
movement in net (debt):
Increase/(decrease) in cash 2,167 (4,352)
(Decrease) in short term investments - (7,000)
__________ __________
Movement in net funds 2,167 (11,352)
At 1 February 2002 (2,533) 8,819
__________ __________
At 31 January 2003 (366) (2,533)
__________ __________
(iii) Analysis of net (debt): At Cash At
1 February inflow/ 31 January
2002 (outflow) 2003
#000 #000 #000
Development of bank account 3330 (3043) 287
Cash at bank and in hand/(overdraft) (2533) 2167 (366)
Development bank account (3,330) 3,043 (287)
__________ __________ ___________
(2,533) 2,167 (366)
__________ __________ ___________
JAMES BEATTIE PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 January 2003
* The company has adopted FRS17 - Retirement Benefits resulting
in the restatement of comparative figures. Reported profit
before tax for the year ended 31 January 2002 has been
decreased by #220,000. Net assets at 31 January 2002
increased by #726,000.
The calculation of earnings per share is based upon profit for
the year after taxation amounting to #4,882,000 (2002:
#5,862,000) and a time-weighted average of Ordinary shares
40,746,004 (2002: 40,278,974).
The calculation of diluted earnings per share is based on the
profit for the year after taxation and the time-weighted
average number of shares adjusted for the dilutive effect of
outstanding share options 281,376 (2002: 321,555).
The calculation of earnings per share excluding new store pre
opening costs and property profits is based upon a profit for
the year after taxation amounting to #5,056,000 (2002:
#6,654,000) and a time weighted average of 40,746,004
ordinary shares (2002: 40,278,974).
* The financial information set out above does not constitute the
company's statutory accounts for the years ended 31 January
2003 or 2002. The financial information for 2002 is derived
from the statutory accounts for 2002 which have been
delivered to the registrar of companies. The auditors have
reported on the 2002 accounts; their report was unqualified
and did not contain a statement under section 237(2) or (3)
of the Companies Act 1985. The statutory accounts for 2003
will be finalised on the basis of the financial information
presented by the directors in this preliminary announcement
and will be delivered to the registrar of companies following
the company's annual general meeting.
This information is provided by RNS
The company news service from the London Stock Exchange
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