financial news
Interim Report and Accounts September 2010
13 December 2010
Chairman’s statement
Group profits for the six months ended 30 September 2010 were slightly ahead of the corresponding period last year. Profit before tax was £479,000 compared with £473,000 for the first half of 2009. Earnings per share were steady at 1.4p. Although sales fell by 12.8% reflecting the very difficult retail environment for beds and furniture, the Group benefited from a reduction in its direct operating costs and the release of unutilised provision in a prior period.
While operating profit before financing fell by £110,000 to £421,000, the Group recorded £74,000 of favourable interest adjustments on the pension scheme deficit, and finance costs were down due to tight cash control and low interest rates. Income tax is estimated to be at a somewhat lower level than last year's corresponding period, leaving profit after tax at £346,000 just ahead of the prior year's £317,000. Cash and cash equivalents ended the period at £2.3 million compared with £2.0 million one year earlier.
In a separate announcement to be released today, the Group will report that it has agreed terms for the acquisition of Collins and Hayes Furniture Limited. Collins and Hayes is an upmarket manufacturer of upholstered furniture with distribution through many of the UK's premium department stores, and has a successful management team and committed workforce. The addition of Collins and Hayes to Airsprung's furniture interests is expected to bring significant benefits to the Group.
The outlook for the Group's existing businesses for the remainder of the year will depend on the retail environment over Christmas and the New Year and the impact of a higher rate of VAT. On present trends, operating profits are likely to continue at the current level and, while a positive contribution is expected from Collins and Hayes in the last quarter, there will be non-recurring costs, including professional fees, for the acquisition. The directors believe the enlarged Group will have good prospects for 2011-12 and beyond.
Stuart Lyons CBE
Chairman
13 December 2010
Consolidated income statement
Unaudited
|
Notes |
6 months to |
6 months to |
12 months to |
Revenue |
|
20,147 |
23,101 |
46,532 |
Operating costs |
|
(19,726) |
(22,570) |
(45,485) |
Operating profit/(loss) before financing |
|
421 |
531 |
1074 |
Finance income |
2 |
74 |
- |
- |
Finance costs |
2 |
(16) |
(58) |
(96) |
Profit/(loss) before tax |
|
479 |
473 |
978 |
Income tax |
|
(133) |
(156) |
(218) |
Profit/(loss) attributable to equity holders of the parent |
|
346 |
317 |
760 |
Basic earnings/(loss) per share |
3 |
1.4p |
1.3p |
3.2p |
Diluted earnings/(loss) per share |
3 |
1.4p |
1.2p |
3.0p |
Consolidated statement of comprehensive income
Unaudited
|
6 months to |
6 months to |
12 months to |
Profit/(loss) for the period |
346 |
317 |
760 |
Actuarial (loss)/gain on defined benefit pension scheme |
(622) |
(1,760) |
(1,946) |
Total comprehensive (expense)/income for the period attributable to equity shareholders |
(276) |
(1,443) |
(1,186) |
All the above figures relate to continuing operations.
Consolidated balance sheet
Unaudited
|
|
30.09.09 |
|
Intangible assets |
219 |
253 |
236 |
Property, plant and equipment |
7,724 |
7,953 |
7,856 |
Deferred tax |
165 |
332 |
295 |
Total non-current assets |
8,108 |
8,538 |
8,387 |
Inventories |
3,034 |
3,033 |
3,293 |
Trade and other receivables |
7,559 |
7,229 |
7,776 |
Cash and cash equivalents |
2,266 |
1,997 |
2,405 |
Total current assets |
12,859 |
12,259 |
13,474 |
Total assets |
20,967 |
20,797 |
21,861 |
Called up share capital |
2,389 |
2,389 |
2,389 |
Share premium account |
2,348 |
2,348 |
2,348 |
Reserves |
3,065 |
3,066 |
3,065 |
Retained earnings |
1,919 |
2,058 |
2,195 |
Total equity |
9,721 |
9,861 |
9,997 |
Trade and other payables |
- |
146 |
- |
Financial liabilities |
42 |
282 |
153 |
Pension scheme deficit |
4,056 |
3,652 |
3,683 |
Total non-current liabilities |
4,098 |
4,080 |
3,836 |
Trade and other payables |
6,908 |
6,584 |
7,764 |
Financial liabilities |
240 |
272 |
264 |
Total current liabilities |
7,148 |
6,856 |
8,028 |
Total liabilities |
11,246 |
10,936 |
11,864 |
Total equity and liabilities |
20,967 |
20,797 |
21,861 |
Consolidated cash flow statement
Unaudited
|
6 months to |
6 months to |
12 months to |
Profit/(loss) before tax |
479 |
473 |
978 |
Adjustments for: |
|
|
|
Depreciation |
274 |
335 |
583 |
Amortisation |
17 |
17 |
34 |
Interest expense /(income) |
(58) |
58 |
96 |
Contributions to defined benefit pension scheme |
(175) |
(175) |
(366) |
Charge for share based payments |
- |
1 |
- |
Profit on sale of property, plant and equipment |
- |
- |
(23) |
Operating cash flows before movements in working capital |
537 |
709 |
1,302 |
Decrease in inventories |
259 |
124 |
(136) |
(Increase)/decrease in receivables |
217 |
(493) |
(1,040) |
Increase/(decrease) in payables |
(817) |
439 |
1,510 |
Cash generated from operations |
196 |
779 |
1,636 |
Interest paid |
(16) |
(18) |
(20) |
Net cash from operating activities |
180 |
761 |
1,616 |
Investing activities |
|
|
|
Acquisition |
(42) |
(51) |
(113) |
Proceeds on disposal of property, plant and equipment |
- |
- |
46 |
Purchase of property, plant and equipment |
(142) |
(26) |
(200) |
Net cash outflow from investing activities |
(184) |
(77) |
(267) |
Financing activities |
|
|
|
Dividends paid |
– |
— |
(120) |
Repayment of loan |
(113) |
(132) |
(244) |
Payment of finance lease liabilities |
(22) |
(24) |
(49) |
Net cash outflow from financing activities |
(135) |
(156) |
(413) |
Net increase/(decrease) in cash and cash equivalents |
(139) |
528 |
936 |
Cash and cash equivalents at beginning of period |
2,405 |
1,469 |
1,469 |
Cash and cash equivalents at end of period |
2,266 |
1,997 |
2,405 |
Notes to the financial statements
1 Basis of preparation
The financial information has been prepared using the accounting policies set out in the Annual Report and Accounts 2010.
The interim financial information has not been audited and does not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006. The Group’s statutory accounts for the year ended 31 March 2010, prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union and also in accordance with the IFRSs as issued by the International Accounts Standards Board, have been delivered to the Registrar of Companies; the report of the Auditors on these accounts was unqualified and did not contain a statement under Section 498 (2) or 498 (3) of the Companies Act 2006.
2 Finance costs
|
6 months to |
6 months to |
12 months to |
Other interest charges |
(13) |
(14) |
(13) |
Finance costs |
|
(4) |
(7) |
Interest on pension scheme liability |
74 |
(40) |
(76) |
|
58 |
(58) |
(96) |
3 Earnings per share
The earnings per share are calculated on profit after tax of £346,000 (2009: £317,000) and the weighted average number of ordinary shares of 23,888,698 (2009: 23,888,698) in issue during the period. The share options in existence during the six months ended 30 September 2010 have a dilutive effect. The diluted earnings per share are calculated on profit after tax of £346,000 (2009: £317,000) and the weighted average number of ordinary shares in issue adjusted to assume conversion of all dilutive potential ordinary shares which is 25,498,698 (2009: 25,648,698).