25th Jul 2006 07:00
Games Workshop Group PLC25 July 2006 PRELIMINARY RESULTS Games Workshop Group PLC ("Games Workshop" or the "Group") announces itspreliminary results for the year ended 28 May 2006. Highlights * Revenue at £115.2m (2005: £136.6m)* Operating profit at £4.2m (2005: £14.3m)* Pre-tax profit at £3.7m (2005: £13.9m)* Earnings per share of 6.5p (2005: 29.4p)* Maintained final dividend per share of 14.025p (2005: 14.025p) Tom Kirby, Chairman and Chief Executive of Games Workshop, said: "Despite the short-term difficulties of this year, we remain confident that the Hobby is in good health. In addition we have come to the end of our investment programme, which leaves the business seriously well invested. "The directors believe the prospects for the business remain very good." For further information, please contact:Games Workshop Group PLC Today only: 01756 770 376Tom Kirby, Chairman and Chief Executive Thereafter: 0115 900 4001Michael Sherwin, Finance Director 0115 900 4001Julia Woodall, PR Manager 0115 900 4006 The analyst presentation may be viewed at the investor relations web site http://investor.games-workshop.comGeneral website www.games-workshop.com Rawlings Financial PR Limited Tel: 01756 770 376Catriona Valentine The 2006 annual report may be viewed at the investor relations web site at theaddress above. FINANCIAL HIGHLIGHTS 2006 2005 Revenue £115.2m £136.6m Operating profit £4.2m £14.3m Pre-tax profit £3.7m £13.9m Year end net (borrowings)/funds £(2.2m) £3.4m Earnings per share 6.5p 29.4p Dividend per share 18.975p 18.975p BUSINESS REVIEW BY THE CHAIRMAN AND CHIEF EXECUTIVE Summary of results- for the year to 28 May 2006 This year our sales and profits have fallen for two main reasons: firstly, thecontinuing decline in sales following an exceptional trading period*, andsecondly, the continued reduction in our sales to independent toy and hobbyretailers, notably in the US, where many smaller independent operators areceasing to trade. Following the decline in sales, management faced three issues. Firstly, the needfor all staff to be focused on the temporary nature of the decline. Secondly,during the rapid sales upturn between 2002 and 2004, some of the good habits onwhich we have built the business became eroded. Thirdly, over the same period,our traditional product stream became disrupted. The first was the easiest todeal with - we all knew the franchise was sound and undamaged - all we had to dowas to remind everyone to be patient. The second required us to work hard atre-training and re-invigorating our staff in the basics of providing our normal,exceptional, customer service. As regards the third we are now engaged in theprocess of re-establishing our normal product life cycles. We have also taken the opportunity to examine closely the costs that have comeinto the business over the last few years. We believe we have made significantinroads into the extra costs that had crept in. The results of this work leave the Company in a more healthy state at the end ofthis year than at its beginning. In the first half of the year we reported a sales decline of 20%. In the secondhalf this decline slowed to 12%. By the end of the year our Games Workshop Hobbystores in seven of our nine sales businesses, including both the US and the UK -our two largest businesses - were recording growth. Despite the lower production volumes resulting from the decline in sales, wehave been able to maintain and improve our gross profit margin to 70%. This isdue to price rises, improved operational efficiency from the capital investmentswhich have now been completed in our manufacturing facilities at both Nottinghamand Memphis, and the sourcing of bought-in components and print more costeffectively from both Europe and Asia. Additionally we have reduced overheads by £2.8 million during the year, whilstincreasing our expenditure on customer facing activities including a netincrease of ten new Hobby stores since May 2005. Sales by channel The Games Workshop Hobby is supported and promoted by our own Games WorkshopHobby stores, through which 48% of our 2005/6 sales were made. As we continue todevelop the Hobby we have opened sixteen and closed six stores during the year,taking our total to 337. Sales are also made through independent retailers anddirect, through the internet and mail order. An analysis of sales for 2005/6 foreach of the channels is given below: 2006 2005 Independent retailers £48.1m 42% £61.0m 45% Hobby stores £54.9m 48% £62.9m 46% Direct £12.2m 10% £12.7m 9% Sales by territory An analysis of sales for 2005/6 for each of the geographical sectors is givenbelow: 2006 2005 DeclineContinental Europe £48.1m £59.5m -£11.4mUK £33.5m £40.1m -£6.6mThe Americas £26.2m £28.7m -£2.5mAsia Pacific £7.4m £8.3m -£0.9m Continental Europe There are five stand alone sales businesses in Continental Europe responsiblefor development of the Hobby in France, Germany, Northern Europe, Spain andItaly. We now have 106 Games Workshop Hobby stores, up from 101 last year. Oursales have fallen in all of these territories during the year, however, the rateof decline had slowed significantly by the end of the year, with three of thefive Hobby store chains recording growth in May 2006. Our progress in restoringgrowth in our sales to independent retailers has been slower, however, webelieve that the progress of our own stores is the lead indicator. UK We now have 119 Games Workshop Hobby stores in the UK (2005: 118). The declinein sales has impacted our own stores and sales to independent retailers bysimilar proportions. Our focus during the year has been on staff training,recruitment and retention, particularly for the key post of store manager. Allof our full time staff have attended refresher training courses to refocus theirefforts on the basics of Games Workshop customer service. We have also kept thecost base under close review, reducing both our back office costs and our storeopening hours. At our annual Games Day, held in September at a new larger venue(the National Exhibition Centre in Birmingham), we welcomed 10,000 people - arecord attendance. The Americas During the year we have opened two new Games Workshop Hobby stores in theAmericas, which for us comprises the USA and Canada, bringing our total to 83.As our independent retailer base has continued to struggle, our focus has beenon establishing and growing our own Games Workshop Hobby stores. We haveestablished that our best model both for the development of the Hobby and formanagement command and control is to focus upon selected metropolitan areaswhere we can cluster our stores to grow and nurture the Hobby community. Ourdevelopment plan moving forwards is to recruit staff, bring on middle managementand deliver great Games Workshop Hobby activity centred around this metropolitanarea strategy. We also believe that this strategy will support and develop theindependent retailer base in these major metropolitan areas. The shake out has,however, continued this year: in the USA we began the year with 875 activeaccounts and we have ended it with 729. As indicated above, however, our ownGames Workshop Hobby stores were enjoying healthy growth by the end of the year.During the year we held five Games Day events in the Americas, and theattendances continue to grow year on year. The appetite for the Games WorkshopHobby is as great in the Americas as elsewhere: our challenge remains inestablishing sound and profitable routes to market. We are confident that ourstrategy will be successful in doing this. Asia Pacific This territory comprises Australia, New Zealand and Japan, where we opened ourfirst Games Workshop Hobby store in Tokyo during the year. We now have 29 storesin the region (2005: 27). As in the UK, revenue has suffered with sales throughthe Games Workshop Hobby stores declining at a similar rate to those through ourindependent customers. However, also similar to the UK, at the end of the yearour own stores were enjoying growth. We see our first Japanese store as thebeginning of a long-term investment which has cost us £0.5m this year. Theinitial indications are promising, and we expect to open our second storeshortly. Manufacturing and Supply division This year we completed the final stages of our major investment programme in ourvertically integrated design, manufacturing and distribution supply chain withthe commissioning of the new European warehousing and distribution centre inNottingham and the move of our plastic injection moulding facility from Wisbechto Nottingham. Both of these moves were completed on time and on budget, withoutany disruption to the delivery of product to our customers. This now leaves theGroup with a well invested supply chain supporting the UK and Europe from ourNottingham facility and the Americas and Asia Pacific from Memphis. Other activities Computer games licensing We now have three third party licences in place with publishers of computergames: THQ Inc. for Warhammer 40,000, Namco Hometek Inc. for Warhammer andMythic Entertainment Inc. who are developing a massively multiplayer onlinerole-play game set in the Warhammer world. Most of the £1.2m of royalty incomewhich we earned this year came from THQ Inc. We expect this income to fluctuatefrom year to year, depending on the commercial success of the products createdby our licensees. BL Publishing Our publishing business, which made sales of £2.1m this year, has continued toenjoy growth and success primarily with novels based upon our Warhammer andWarhammer 40,000 intellectual properties. This business continues to develop asmall but profitable niche publishing portfolio, focusing on fantasy and sciencefiction titles, which continues to enhance and develop the existing GamesWorkshop intellectual property. Sabertooth Games This US based collectible card game business, which has been struggling to breakeven since we acquired it in 2002, has recently launched an exciting newproduct, the Universal Fighting System collectible card game (CCG), which hasreceived a promising reception from the CCG market in the Americas. We arewatching the progress of this game system with interest. Cash generation The Group generated £15.8m (2005: £21.2m) of cash from operations during theyear, and after capital expenditure of £9.2m we had net borrowings at the yearend of £2.2m (2005: net funds of £3.4m) Now that the investment in the Nottingham building and supply chain developmentsis complete, we do not expect to make any further major investments of thisnature for several years. For the foreseeable future we therefore expect thatcapital expenditure will be broadly similar to the level of annual depreciation/amortisation of capital assets. Management structure The Group is managed through four clearly defined divisions as follows: Hobby division - responsible for the development of the Hobby throughout theworld. This encompasses the sales businesses in each territory around the worldas well as the design studio based in Nottingham. Manufacturing and Supply division - responsible for the realisation of thedesigns into manufactured products, and the supply and distribution of thoseproducts to our sales businesses and their customers around the world. Other Activities division - responsible for the sales of all non-tabletopwargaming products, including publishing, collectible card games and computergames. Group - responsible for the financing and corporate governance of the activitiescarried out in the divisions. This also includes intellectual propertymanagement, legal, treasury, reporting and investor relations. This structure has been in place throughout this year, and in addition toproviding clear business focus we believe that the structure enables us toaddress the key areas of management recruitment, development and successionplanning in a systematic way. A development this year has been the removal ofareas of duplication of processes between the divisions, resulting in thecentralisation of some back office activities. Our vertically integrated manufacturing and supply division is dedicated to thesupply of products to the Hobby and Other Activities divisions. We consider thatthe risks and rewards of each division are similar, and that the Group has asingle business segment, the Games Workshop Hobby. Workforce This has been a hard year for everybody at Games Workshop as we have seen oursales and profits decline, and while most of our staff love what they do, theyalso love to succeed. It is part of our job as management here at Games Workshopto provide reassurance to our staff that success isn't just about beating lastyear's numbers (although that helps), it is about doing your best, every day, todevelop and further the business. So long as our staff are doing that, then theycontinue to get my wholehearted vote of confidence. So once again, I would like to use this annual report to say thank you to allour staff and I trust that our shareholders will join me. Risks facing the business Managing the risks which our business faces is what we do every day. Thedivisional management structure referred to above is how we make this processtransparent and accountable. The Hobby division is responsible for keeping theGames Workshop Hobby fresh and exciting and for managing market facing risks;the Manufacturing and Supply division is responsible for managing productdelivery risks; the Other Activities division is responsible for using ourintellectual property appropriately while not distracting our tabletop wargamingactivities, and Group is responsible for managing corporate risks. We have aformal risk reporting process as part of our annual budgeting and planningcycle, which is linked into the internal and external audit process, but themanagement of these risks is an integral part of the daily management process. Foremost amongst the market facing risks is our ability to forecast sales andfactory demand. Throughout this last year I have been encouraged by a clearimprovement in the capability of our central team to keep close to the driversand trends which underlie our sales in each business unit, and to ensure thatthe communication between the sales division and the manufacturing division isimmediate and effective. Amongst the product delivery risks are those relating to input prices. We haveseen significant increases in energy costs during the year, and the outlookremains uncertain. Our annual energy bill amounts to some £0.9m. The cost of rawmaterials, such as metal and plastic, represents no more than 2% of our annualsales and has been relatively stable during the year. We do not believe that theprice volatility of these inputs represents a significant threat to ourlong-term profitability. In the short term our buying team continues to workhard to minimise these risks and the Manufacturing and Supply division continuesto seek process efficiencies to offset any cost impact. Many of our risks are mitigated by the portfolio effect which we enjoy withdifferent geographies, different routes to market and different currencies. Thisleads me to conclude, as it does every year, that the main source of risk tothis business remains management error. This is why management recruitment,development and succession planning are so important. Prospects In the short term our trading prospects remain challenging: throughout Spring2006 our year on year performance has been improving and, as I have indicatedabove, by the end of the year our Games Workshop Hobby stores in seven of ournine sales territories, including both the US and the UK - our two largestbusinesses - were recording growth. We believe that the business is nowreturning to growth. With 42% of our sales made to independent retailers,however, 'calling the turn' is difficult. Nevertheless we remain confident that we are right to refer to these asshort-term trading issues. This confidence is based upon the following threefundamentals: 1. The long-term growth credentials of the business We continue to see Games Workshop as a growth business. Between 2002 and 2005our sales were above the normal growth line, since when they have beendeflating. We believe that it is only a matter of time before we re-establishour historic linear growth rate. 2. The market opportunity for our existing sales businesses The table below shows our sales per capita in our key sales markets, based uponour 2006 sales and the population statistics for each country. In the long termwe see no reason why we shouldn't achieve similar levels of sales penetration ineach of these markets to those that we currently have in the UK. Achieving thiswould at least treble the current level of our sales. Sales per capita by geographical area UK 51pAsia Pacific 35pContinental Europe 18pThe Americas 10pJapan 0p This is not a sales forecast but a rough indication of the potential sales ofGames Workshop. 3. The health of the Games Workshop Hobby Despite the short-term difficulties of this year, we remain confident that theHobby is in good health. In addition we have come to the end of our investmentprogramme, which leaves the business seriously well invested. These are the reasons why the directors believe the prospects for the businessremain very good. Tom KirbyChairman and Chief Executive *see 2005 annual report, page 4; 2004 annual report, page 5; 2003 annual report,page 6. CONSOLIDATED INCOME STATEMENT Year to Year to 28 May 2006 29 May 2005 Notes £000 £000 Revenue 3 115,150 136,647Cost of sales (34,265) (42,126) --------- ---------Gross profit 80,885 94,521Operating expenses (77,838) (80,594)Other operating income - royalties receivable 1,170 374 --------- ---------Operating profit 3 4,217 14,301Finance income 238 348Finance costs (797) (740) --------- ---------Profit before taxation 3,658 13,909Income tax expense 5 (1,660) (4,889) --------- ---------Profit attributable to equity shareholders 1,998 9,020 --------- --------- Basic earnings per ordinary share 6.5p 29.4pDiluted earnings per ordinary share 6.4p 29.0p All items dealt with in arriving at the profit before taxation relate tocontinuing activities. CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE Year to Year to 28 May 2006 29 May 2005 £000 £000 Profit attributable to equity shareholders 1,998 9,020 Exchange differences on translation of foreign operations (131) 486Cash flow hedges:- fair value gains 86 331- transferred to the income statement (331) (615)Net investment hedge (2) -Tax on items recognised directly in equity 73 85 --------- ---------Total recognised income for the year 1,693 9,307 --------- --------- CONSOLIDATED BALANCE SHEET As at As at 28 May 2006 29 May 2005 Notes £000 £000 Non-current assetsGoodwill 2,449 2,468Other intangible assets 4,320 4,008Property, plant and equipment 29,475 28,959Other receivables 712 674Deferred income tax assets 2,121 2,178 --------- --------- 39,077 38,287 --------- ---------Current assetsInventories 12,407 12,838Trade and other receivables 9,081 10,075Current tax assets 382 308Financial assets - derivative financialinstruments 181 476Cash and cash equivalents 6,444 8,622 --------- --------- 28,495 32,319 --------- ---------Total assets 67,572 70,606 --------- ---------Current liabilitiesFinancial liabilities - borrowings (1,705) (143)Financial liabilities - derivative financialinstruments (14) (109)Trade and other payables (15,714) (17,726)Current income tax liabilities (415) (2,005)Provisions (584) (322) --------- --------- (18,432) (20,305) --------- ---------Net current assets 10,063 12,014 --------- ---------Non-current liabilitiesFinancial liabilities - borrowings (6,960) (5,038)Other non-current liabilities (1,317) (640)Provisions (927) (881) --------- --------- (9,204) (6,559) --------- ---------Net assets 39,936 43,742 --------- --------- Capital and reservesCalled up share capital 7 1,556 1,553Share premium 7 7,822 7,592Other reserves 7 (536) (231)Retained earnings 7 31,094 34,828 --------- ---------Total shareholders' equity 7 39,936 43,742 --------- --------- CONSOLIDATED CASH FLOW STATEMENT Year to Year to 28 May 2006 29 May 2005 Notes £000 £000 Cash flows from operating activitiesCash generated from operations 9 15,789 21,152UK corporation tax paid (1,665) (4,141)Overseas tax paid (1,838) (2,186) ------- --------Net cash from operating activities 12,286 14,825 ------- --------Cash flows from investing activitiesPurchases of property, plant and equipment (8,321) (10,726)Proceeds on disposal of property, plant andequipment 32 49Purchases of other intangible assets (830) (1,186)Expenditure on product development (2,505) (2,102)Interest received 234 346 ------- --------Net cash from investing activities (11,390) (13,619) ------- --------Cash flows from financing activitiesProceeds from issue of ordinary share capital 207 727Proceeds from borrowings 1,955 5,000Repayment of principal under finance leases (143) (165)Equity dividends paid (5,874) (5,818)Interest paid (886) (716) ------- --------Net cash from financing activities (4,741) (972) ------- --------Effects of foreign exchange rates (5) 223 ------- --------Net (decrease)/increase in cash and cashequivalents (3,850) 457 ------- --------Opening cash and cash equivalents 8,622 8,165 ------- --------Closing cash and cash equivalents 8 4,772 8,622 ------- -------- NOTES TO THE PRELIMINARY RESULTS 1. The consolidated financial statements of Games Workshop Group PLC are now prepared in accordance with International Financial Reporting Standards (IFRS) and International Financial Reporting Interpretations Committee interpretations, that are endorsed by the European Union and with those parts of the Companies Act 1985 applicable to those companies reporting under IFRS. The Group had previously reported under UK GAAP. The date of transition to IFRS was 31 May 2004, which is the beginning of thecomparative period for the year to 29 May 2005. The Group has applied IFRS 1'First-time Adoption of International Financial Reporting Standards' and haselected to use the following exemptions: - IFRS 3 'Business Combinations' has not been applied retrospectively to business combinations that occurred before 31 May 2004. - The Group has elected to set the foreign currency translation differences reserve to nil at 31 May 2004. - Share-based payment exemption. It has applied IFRS 2 'Share-based Payment' from 31 May 2004 to those options that were issued after 7 November 2002 and had not vested by 30 May 2005. 2. These results for the year to 28 May 2006 together with the corresponding amounts for the year to 29 May 2005 are extracts from the 2006 annual report and do not constitute statutory accounts within the meaning of section 240 of the Companies Act 1985 (as amended). The annual report for the year to 28 May 2006, on which the auditors have issueda report that does not contain a statement under section 237(2) or (3) of theCompanies Act 1985, will be posted to shareholders on 26 July 2006 and will bedelivered to the Registrar of Companies in due course. Copies will also beavailable from Michael Sherwin, Games Workshop Group PLC, Willow Road, Lenton,Nottingham NG7 2WS. This information is also available on the company web siteat investor.games-workshop.com. The annual general meeting will be held at Willow Road, Lenton, Nottingham NG72WS at 10.00am on 13 September 2006. 3. Segmental analysis The Group has one business segment, the Games Workshop Hobby. Geographicalsegments represent the dominant source and nature of the Group's risk andreturns and is therefore provided below as the primary reporting format. Year ended 28 May 2006 Rest Continental United The Asia of the Central/ Design and Royalty Europe Kingdom Americas Pacific world unallocated development income Group £000 £000 £000 £000 £000 £000 £000 £000 £000 Total gross segment salesby operation 48,112 33,507 26,121 7,410 - - - - 115,150Inter-segment sales 1,348 (3,489) 1,645 444 52 - - - - -------- ------- ------- ------ ------ -------- -------- ------- -------Total gross segment salesby location of customers 49,460 30,018 27,766 7,854 52 - - - 115,150 -------- ------- ------- ------ ------ -------- -------- ------- -------Operating profit/segmentresult by location ofcustomers 8,154 3,799 (487) 470 22 (4,872) (4,039) 1,170 4,217 -------- ------- ------- ------ ------ -------- -------- ------- ------- Year ended 29 May 2005 Rest Continental United The Asia of the Central/ Design and Royalty Europe Kingdom Americas Pacific world unallocated development income Group £000 £000 £000 £000 £000 £000 £000 £000 £000 Total gross segment salesby operation 59,539 40,166 28,670 8,272 - - - - 136,647Inter-segment sales 2,193 (3,500) 954 258 95 - - - - -------- ------- ------- ------ ------ -------- -------- ------ -------Total gross segment salesby location of customers 61,732 36,666 29,624 8,530 95 - - - 136,647 -------- ------- ------- ------ ------ -------- -------- ------ -------Operating rofit/segmentresult by location ofcustomers 15,336 6,887 314 1,012 38 (5,677) (3,983) 374 14,301 -------- ------- ------- ------ ------ -------- -------- ------ ------- 4. The calculation of basic earnings per ordinary share has been based on profitattributable to equity shareholders of £2.0 million (2005: £9.0 million) and the weighted average number of shares in issue throughout the year. The calculation of diluted earnings per ordinary share has been based on profitfor the year and the weighted average number of shares in issue throughout theyear, adjusted for the dilution effect of share options outstanding at the yearend. 2006 2005Weighted average number of shares (thousands):For basic earnings per ordinary share 30,959 30,691Dilution effect of share options outstanding 47 385 -------- --------For diluted earnings per ordinary share 31,006 31,076 -------- -------- 5. Income tax expense 2006 2005 £000 £000Current taxationUK corporation tax 530 3,633Overseas tax 1,072 1,823 -------- --------Total current taxation 1,602 5,456 Deferred taxation 58 (567) -------- -------- Income tax expense 1,660 4,889 -------- -------- 2006 2005 £000 £000 Profit before taxation 3,658 13,909 -------- --------Profit on ordinary activities multiplied by the standard rate of corporation tax in the UK of 30% 1,097 4,173Effects of:Expenses not deductible for tax purposes 274 143Movement in deferred tax not recognised 677 518Losses attributable to minority interests - 22Higher rates on overseas earnings 26 28Adjustments to tax charge in respect of previous years (414) 5 -------- --------Total tax charge for the year 1,660 4,889 -------- -------- 6. The proposed final dividend per share of 14.025p will be paid on 27 October 2006 to shareholders on the register at the close of business on 6 October 2006. 7. Consolidated statement of changes in shareholders' equity Other reserves Retained earnings ------------------------------------------ ------------------ Called up Capital share Share redemption Translation Other Hedging Treasury Profit Total capital premium reserve reserve reserve reserve shares and loss equity £000 £000 £000 £000 £000 £000 £000 £000 £000 As at 29 May 2005 1,553 7,592 101 486 (1,050) 232 (1,132) 35,960 43,742Exchange adjustments - - - (131) - - - - (131)Profit attributable to equity shareholders - - - - - - - 1,998 1,998Shares vested - - - - - - 1,083 (1,083) -Dividends paid - - - - - - - (5,874) (5,874)Share-based payments - - - - - - - 168 168Current tax - - - - - 73 - - 73Cash flow hedges:- fair value gains in the year - - - - - 86 - - 86- transfers to net profit - - - - - (331) - - (331)Net investment hedge - - - (2) - - - - (2)Issue of ordinary sharecapital 3 230 - - - - (26) 207 ------- ------ ------- ------- ------ ------- ------- ------ -------As at 28 May 2006 1,556 7,822 101 353 (1,050) 60 (49) 31,143 39,936 ------- ------ ------- ------- ------ ------- ------- ------ ------- Other reserves Retained earnings ------------------------------------------ ------------------ Called up Capital share Share redemption Translation Other Hedging Treasury Profit Total capital premium reserve reserve reserve reserve shares and loss equity £000 £000 £000 £000 £000 £000 £000 £000 £000 As at 30 May 2004 1,542 6,301 101 - (1,050) 431 (1,011) 33,067 39,381Exchange adjustments - - - 486 - - - - 486Profit attributable toequity shareholders - - - - - - - 9,020 9,020Shares vested - - - - - - 29 121 150Purchase of treasury shares - - - - - - (150) - (150)Dividends paid - - - - - - - (5,818) (5,818)Share-based payments - - - - - - - 145 145Deferred tax - - - - - 85 - - 85Cash flow hedges:- fair value gains in the year - - - - - 331 - - 331- transfers to net profit - - - - - (615) - - (615)Issue of ordinary sharecapital 11 1,291 - - - - (575) 727 ------- ------ ------- ------- ------ ------- ------- ------ -------As at 29 May 2005 1,553 7,592 101 486 (1,050) 232 (1,132) 35,960 43,742 ------- ------ ------- ------- ------ ------- ------- ------ ------- 8. Analysis of net funds/(debt) As at As at 29 May Cash Exchange 28 May 2005 flow movement 2006 £000 £000 £000 £000 Cash at bank and in hand 8,622 (2,178) - 6,444Current borrowings - bank overdraft - (1,667) (5) (1,672) ------- ------- -------- --------Cash and cash equivalents 8,622 (3,845) (5) 4,772 Non-current borrowings (5,000) (1,955) - (6,955) Finance leases (181) 143 - (38) ------- ------- -------- --------Net funds/(debt) 3,441 (5,657) (5) (2,221) ------- ------- -------- -------- 9. Reconciliation of profit to net cash from operations 2006 2005 £000 £000 Profit attributable to equity shareholders 1,998 9,020Income tax expense 1,660 4,889Depreciation of property, plant and equipment 7,145 6,239Loss on disposal of property, plant and equipment 113 57Amortisation of capitalised development costs 2,289 1,809Amortisation of other intangibles 736 667Interest income (238) (348)Interest expense 908 734Net fair value (gains)/losses on derivative financialinstruments (43) 294Share-based payments 168 145Exchange (gains)/losses on borrowings (111) 6Changes in working capital:Decrease/(increase) in inventories 465 (644)Decrease in trade and other receivables 948 1,498Decrease in trade and other payables (562) (3,033)Increase/(decrease) in provisions 313 (181) -------- --------Net cash from operating activities 15,789 21,152 -------- -------- This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Games Workshop