24th Jun 2008 07:00
24 June 2007
Theo Fennell PLC ("Theo Fennell" or "the Company")
Unaudited Final Results for the year ended 31 March 2008
HIGHLIGHTS:
Financial
Turnover up 10.6% to £28.06m (2007: £25.36m)
Profit before tax, pre exceptional up 16% to £1.9m (2007: £ 1.63m)
Approximately £500,000 exceptional charge as announced on 14 January 2008, relating to Board changes
Strong financial position
Unused bank facilities of £5m
Net Cash position of £945,000
Corporate
Appointment of Pamela Harper as Chief Executive in December 2007
New contract agreed with Theo Fennell, whereby he operates in a design consultancy and ambassadorial role. The Company retains the rights to the Theo Fennell name
Operational
UK and Ireland
Expanded UK presence with the opening of a full Theo Fennell branded concession in The Selfridges Room of Wonder, alongside Cartier, Tiffany and Bulgari
Intention to open in Bond Street giving the company a prime standalone London retail position alongside the world's global jewellery brands
Theo Fennell branded concession due to open in the new fine jewellery and watch hall in Brown Thomas, Dublin ahead of Christmas trading
International
Recent new presences in Kazakhstan, Bahrain and the Russian Federation continue to perform well.
Discussions are also well underway with potential partners for entry into the Japanese market, and into Greater China in the first half of 2009.
Product
The Company acquired the rights to their successful fragrance SCENT. A new UK distribution and product development contract has been signed with Fragrance Factory.
Two new fragrances will be launched in 2009.
A Theo Fennell watch is under development and this will be launched in 2009.
Richard Northcott, Chairman commented:
"The Company has had a very strong year in difficult financial markets, highlighting the strength of the brand today. I am delighted that we have concluded a mutually favourable design contract with Theo whereby he operates in a design and ambassadorial role for the Company.
Whilst current trading in the UK is uncertain, we believe that an accelerated investment programme in existing and new international markets is the best way to strengthen the brand's position for the medium and longer term."
24 June 2008
Enquiries:
|
Theo Fennell |
Richard Northcott |
020 7591 5000 |
|
Pelham Public Relations |
James Henderson Kate Catchpole |
020 7743 6673 020 7743 6678 |
|
Seymour Pierce Limited |
Mark Percy |
020 7107 8000 |
Theo Fennell PLC
CHAIRMAN'S STATEMENT
Overview
Last year was yet another record year for Theo Fennell with sales growth increasing for the third year running. Turnover increased 10.6% to £28.06million (2007: £25.4million) with profit before tax and pre exceptional items up 16% to £1.9million (2007: £1.63 million).
A very strong performance in the year has enabled the business to add nearly £1million of cash to its balance sheet, and has bank facilities of £5m to fund expansion plans, and invest back into the people and infrastructure of the business.
There was an exceptional charge of £500k which was in relation to the departure of the previous Managing Director and the appointment of Pamela Harper as Chief Executive.
Operational
The Company continues to expand both domestically and internationally. This past year Theo Fennell has opened in the Selfridges' Room of Wonder alongside Cartier, Tiffany and Bulgari and is due to open a concession at Brown Thomas in Dublin when the premier Irish department store launches its Fine Jewellery and Watch Hall in time for the Christmas market. The Company also won the contracts to operate the luxury watch and fine jewellery counters in the same room. This represents a very important development for the business.
Theo Fennell is continuing its expansion programme, which will include a standalone presence in Bond Street, which is important in developing the international profile of the brand.
Overseas, the brand continues to be rolled out with an expanded presence in Harvey Nichols, Dubai, and in Kazakhstan and Bahrain. The Company is in advanced discussions with its partners in the Middle East, and Moscow to develop its distribution. The Company is also in initial talks to enter the Japanese market, and to extend its presence in Greater China.
Product
The Company has acquired the rights to their successful fragrance 'SCENT' and announces a new UK distribution and product development contract with Fragrance Factory. The Company is preparing for the launch of new 'SCENT' products later this year and two new fragrance launches for 2009. Discussions are also underway with local distributors in Russia and in the Middle East.
The Quiver collection which was launched in September 2007 has been very successful in all markets and new collections will be launched in the second half of this year.
A new Theo Fennell watch is due to be launched in April 2009.
Corporate Development
This year saw the appointment of Pamela Harper as our new CEO. Pamela is one of the industry's most experienced luxury goods operators and joined us with 28 years of experience spanning Burberry, Escada, Hermes, Alfred Dunhill and Jaeger. She is the ideal person to lead Theo Fennell PLC to the next stage of growth and this programme is already well under way.
The brand is investing in experienced luxury goods operators to assist in the expansion of the brand, and is pleased to announce the appointment of Jill Butterworth to the newly created role of Retail Director, in which she will be responsible for the effective operation of the UK and International stores and concessions.
Jill has 25 years of retail experience and joins the business from Burberry Company plc. Prior to joining Burberry Jill held senior posts at Scotch House, La Senza and House of Fraser, where she has gained a wealth of experience across all aspects of the retail sector.
Theo Fennell
Theo Fennell has signed a new contract as a design consultant to the Company whereby he will design collections and Haute Couture pieces for the business. He will continue to be an ambassador for the brand. The Company retains the rights to the Theo Fennell name.
Outlook
2007/8 was yet another record year for Theo Fennell PLC.
Current trading is tough, yet we ended the financial year in a very strong cash position, which is matched by a strong management team under our new Chief Executive, Pamela Harper.
This strong cash and management position allows us to continue our expansion strategy both at home and overseas. The Company has a very exciting and substantial investment programme planned in the current financial year across its retail infrastructure, international expansion, product development and strengthened operational team. This programme will give the Company enhanced UK and international distribution enabling it to realise its full potential. Whilst this will have an impact on profits in the current financial year it will position the Company for accelerated long term profit growth.
24 June 2008
Profit and Loss AccountFor the year ended 31 March 2008
|
|
2008 £ |
2007 £ |
||||
|
Turnover |
28,065,078 |
25,360,518 |
|
|||
|
Cost of sales |
(23,986,310 |
) |
(21,828,970 |
) |
||
|
Gross profit |
4,078,768 |
3,531,548 |
||||
|
Administrative expenses Exceptional administrative expenses |
(2,201,045 (500,600 |
) ) |
(1,854,190 (255,999 |
) ) |
||
|
Total administrative expenses |
(2,701,645 |
) |
(2,110,189 |
) |
||
|
Operating profit |
1,377,123 |
1,421,359 |
||||
|
Net interest receivable/(payable) |
25,350 |
(51,040 |
) |
|||
|
Profit on ordinary activities before taxation |
1,402,473 |
1,370,319 |
||||
|
Tax on profit on ordinary activities |
(432,853 |
) |
184,638 |
|||
|
Retained profit for the year |
969,620 |
1,554,957 |
||||
|
Basic earnings per share |
5.21 |
p |
9.57 |
p |
||
|
Diluted earnings per share |
4.74 |
p |
7.81 |
p |
Balance Sheetas at 31 March 2008
|
2008 |
2007 |
||||||||
|
£ |
£ |
£ |
£ |
||||||
|
Fixed assets Tangible assets |
737,907 |
641,964 |
|||||||
|
Current assets Stocks Debtors Cash at bank and in hand |
10,053,293 2,408,794 958,008 |
9,024,623 4,542,854 10,972 |
|||||||
|
13,420,095 |
13,578,449 |
||||||||
|
Creditors: amounts falling due within one year |
(4,046,526 |
) |
(5,036,722 |
) |
|||||
|
Net current assets |
9,373,569 |
8,541,727 |
|||||||
|
Total assets less current liabilities |
10,111,476 |
9,183,691 |
|||||||
|
Creditors: amounts falling due after more than one year |
|||||||||
|
Convertible loan note |
- |
(400,000 |
) |
||||||
|
Other |
(187,622 |
) |
(9,121 |
) |
|||||
|
(187,622 |
) |
(409,121 |
) |
||||||
|
Net assets |
9,923,854 |
8,774,570 |
|||||||
|
Capital and reserves Called up share capital Share premium account Profit and loss account Share options reserve |
935,533 4,552,857 4,380,463 55,001 |
913,791 4,423,850 3,410,843 26,086 |
|||||||
|
Equity shareholders' funds |
9,923,854 |
8,774,570 |
Cash Flow StatementFor the year ended 31 March 2008
|
2008 |
2007 |
||||||||
|
£ |
£ |
£ |
£ |
||||||
|
Net cash inflow from operating activities |
1,940,513 |
642,586 |
|||||||
|
Returns on investments and servicing of finance Interest paid on bank loans, overdrafts and other loans Interest element of finance lease payments Interest received |
(77,022 (6,138 108,510 |
) ) |
(140,456 (5,814 98,365 |
) ) |
|||||
|
25,350 |
(47,905 |
) |
|||||||
|
Taxation Corporation tax received / (paid) |
140,139 |
(211,638 |
) |
||||||
|
Capital expenditure Purchase of tangible fixed assets |
(482,281 |
) |
(95,459 |
) |
|||||
|
(482,281 |
) |
(95,459 |
) |
||||||
|
Equity Issue of share options |
79,665 |
75,086 |
|||||||
|
Net cash inflow before financing |
1,703,386 |
362,670 |
|||||||
|
Financing Capital element of finance lease payments Bank loan |
(19,848 203,154 |
) |
(46,542 (118,365 |
) ) |
|||||
|
Increase in cash |
1,886,692 |
197,763 |
1. Basis of preparation
The financial statements have been prepared under the historical cost convention and in accordance with applicable United Kingdom accounting standards. The principal accounting policies have remained unchanged from the previous year. These policies have been applied consistently in dealing with items which are considered material in relation to the Company's financial statements and have been reviewed in accordance with Financial Reporting Standard 18 "Accounting Policies".
The financial statements have been prepared on a going concern basis which assumes that the company will continue in operational existence for the foreseeable future, and that the Company's banking facilities will continue to be available. The directors therefore believe that it is appropriate for the financial statements to be prepared on a going concern basis.
2. Exceptional administrative expenses
The exceptional administrative charge in the year to 31 March 2008 relates to the costs of the departure of the previous Managing Director and the appointment of Pamela Harper as Chief Executive.
The exceptional charge of £255,999 to administrative expenses for the year to 31 March 2007 relates to employers' national insurance payable on the effective gain made on the redemption of the convertible loan note by certain directors in March 2007.
The Company benefited from tax relief available on the effective gain made on the conversion of the Loan Note resulting in a tax credit of £600,000. By also taking into account the corporation tax effect of the exceptional administrative expenses the net effect of the loan note conversion on the prior year results was to increase Profit after tax by £420,800.
3. Tax on profit on ordinary activities
The taxation charge is based on the profit for the year and represents:
|
2008 |
2007 |
|||
|
£ |
£ |
|||
|
Current tax: |
||||
|
UK Corporation tax at 30% (2007: 30%) |
461,717 |
(140,130 |
) |
|
|
Adjustment in respect of prior years |
(9 |
) |
(12,874 |
) |
|
461,708 |
(153,004 |
) |
||
|
Deferred Tax: |
||||
|
Origination and reversal of timing differences |
(28,855 |
) |
(31,634 |
) |
|
432,853 |
(184,638 |
) |
4. Earnings per share
Profit per share is calculated by dividing the profit attributable to ordinary shareholders by the weighted average number of ordinary shares during the year. Share options are generally dilutive if the exercise price was below the average market price for the year end 31 March 2008 of £0.985.
|
2008 |
2007 |
|||
|
£ |
£ |
|||
|
Profit for the financial year |
969,620 |
1,554,957 |
||
|
Effect of convertible loan note |
14,700 |
49,000 |
||
|
Adjusted profit for dilutive earnings per share |
984,320 |
1,603,957 |
||
|
Weighted average number of ordinary shares |
18,607,508 |
16,243,353 |
||
|
Effect of dilutive share options |
1,143,119 |
966,916 |
||
|
Effect of convertible loan note |
1,027,777 |
3,316,893 |
||
|
Adjusted weighted average number of ordinary shares |
20,778,404 |
20,527,162 |
||
|
Earnings per share - basic |
5.21p |
9.57p |
||
|
Earnings per share - diluted |
4.74p |
7.81p |
Earnings per share excluding exceptional items is calculated as follows;
|
2008 |
2007 |
||||
|
£ |
£ |
||||
|
Profit for the financial year |
969,620 |
1,554,957 |
|||
|
Effect of partial redemption of convertible loan note |
- |
(420,800 |
) |
||
|
Board Reorganisation |
350,420 |
- |
|||
|
Adjusted profit excluding exceptional items for basic earnings per share |
1,320,040 |
1,134,157 |
|||
|
Effect of convertible loan note |
14,700 |
49,000 |
|||
|
Adjusted profit excluding exceptional items for dilutive earnings per share |
1,334,740 |
1,183,157 |
|||
|
Weighted average number of ordinary shares |
18,607,508 |
16,243,353 |
|||
|
Effect of dilutive share options |
1,143,119 |
966,916 |
|||
|
Effect of convertible loan note |
1,027,777 |
3,316,893 |
|||
|
Adjusted weighted average number of ordinary shares |
20,778,404 |
20,527,162 |
|||
|
Earnings per share excluding exceptional items - basic |
7.09p |
6.98p |
|||
|
Earnings per share excluding exceptional items - diluted |
6.42p |
5.76p |
The earnings per share excluding exceptional items shows the basic and diluted earnings per share had the partial redemption of the convertible loan note not occurred during the year.
5. Share Capital
|
2008 |
2007 |
|||
|
£ |
£ |
|||
|
Authorised |
||||
|
30,000,000 Ordinary Shares of 5p |
1,500,000 |
1,500,000 |
||
|
Allotted, called up and fully paid |
||||
|
18,710,661 Ordinary Shares of 5p |
935,533 |
913,791 |
During the year 101,500 shares were issued as a result of the exercise of share options. The nominal value of these shares was £5,075 and the consideration was £50,750. Loan notes were converted during the year resulting in the issue of 333,332 shares. The nominal value of these shares was £16,667 and the consideration was £100,000.
6. Dividend
The Company does not propose to pay a dividend for the year ended 31 March 2008.
7. Publication of Non-Statutory Accounts
The financial information set out in this preliminary announcement does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. The summarised balance sheet at 31 March 2008 and the summarised profit and loss account, summarised cash flow statement and associated notes for the year then ended have been extracted from the Company's unaudited financial statements.
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