7th Oct 2009 07:00
Coburg Group plc
Results for the year ended 30 April 2009
Chairman's Statement
Overview
Whilst it was gratifying that sales for the year were only slightly down at £3,544,000 in a difficult economic environment and that the Loss before tax was slightly reduced at £123,000, we were nonetheless very disappointed to have to report another year of trading losses, given the hopes we had for a positive result.
During the year we continued with our programme of cost reductions and we were on target to produce a breakeven position for the year ending April 2009. However, during the second half of the year there was a dramatic change in the sterling dollar exchange rate which had the effect of substantially increasing the cost of green coffee purchases.
The inevitable delay in being able to pass some of these cost increases on to our customers contributed to the loss reported above. While this was a disappointing loss, it was an improvement of £10,000 over the previous year and hides some real fundamental improvements in the underlying profitability of the Group. Since the end of the financial year, the margins have recovered after price increases were successfully passed through to customers and we look forward to reporting first half profits in this new financial year.
Recently, in a trading update we reported that Caffe Nero our largest customer had taken the decision to do its roasting 'in house' and that this would have a material adverse effect on profitability of the Company particularly in the next financial year. The financial effect on the current year will be mitigated by the transitional arrangements that we have entered into with Caffe Nero to ensure a smooth transfer of their business. Gerry Ford, CEO and Chairman of Caffe Nero, said recently: "Coburg has successfully maintained the high quality of coffee that we demand with an unblemished record of on-time delivery and we would like to thank them for all their work since the inception of Caffe Nero. We wish Coburg every success for the future".
While we are disappointed by the loss of an important customer your board remains confident about the long term prospects of the business as it concentrates on supplying outstanding coffee to a wide spread of catering and retail industry outlets. In view of the fact that Caffe Nero's departure takes place relatively late in the financial year, and with the Company being ever more conscious of the need to control costs, we expect to be able to report an improved performance in the current financial year.
Chris Birkle the Managing Director of the Company since 2005 is relinquishing his executive responsibilities. Chris has done a great deal to improve our factory processes, internal systems and, generally, to raise the profile of the business in the industry. He has also been responsible for the restructuring of the group into two operating companies. Coburg Coffee Company Ltd specialises as a contract coffee roaster. The other, Café d'Or Coffee Services, acts as a coffee distributor supplying our well established coffee brands. I am delighted to report that Chris has agreed to remain on the board as a non-executive director of the Company. He has also agreed to provide consultancy services to the group as appropriate.
I will become part-time Executive Chairman of the Company and am pleased to report that Bryan Stockley, currently our Production Manager, has accepted a new role as General Manager of the Company and will be responsible for all day to day operations. With previous experience in general management at Ashbys, I am confident that Bryan will bring all the necessary skills to the role.
In order to mitigate the financial effects of the changes in our business profile it has been necessary to make a number of long serving factory employees redundant. This is very much regretted and I would like to thank them for all their hard work and support over the years.
There is no doubt that we shall have a very difficult time during the next year. However I believe that there will be increasing opportunities for consolidation in our sector. The board continues to look at a number of acquisition and co-operation opportunities.
Konrad P Legg
Chairman
Consolidated Income Statement
FOR THE YEAR ENDED 30 APRIL 2009
|
2009 |
2008 |
||
|
£000 |
£000 |
||
|
Revenue |
3,544 |
3,586 |
|
|
Cost of sales |
(2,514) |
(2,289) |
|
|
Gross profit |
1,030 |
1,297 |
|
|
Distribution costs |
(308) |
(494) |
|
|
Administrative expenses |
(806) |
(910) |
|
|
Group operating loss |
(84) |
(107) |
|
|
Loss on sale of property, plant and equipment |
- |
(5) |
|
|
(84) |
(112) |
||
|
Finance costs |
(39) |
(21) |
|
|
Loss before tax |
(123) |
(133) |
|
|
Tax |
- |
- |
|
|
Loss for the year |
(123) |
(133) |
|
|
Loss per share expressed in pence per share: |
|||
|
Basic |
(0.52) |
(0.56) |
|
|
Diluted |
(0.52) |
(0.56) |
Consolidated Statement of Changes in Equity
FOR THE YEAR ENDED 30 APRIL 2009
|
Issued |
Share |
||||
|
share |
premium |
Other |
Retained |
||
|
capital |
account |
reserves |
earnings |
Total |
|
|
£000 |
£000 |
£000 |
£000 |
£000 |
|
|
Balance as at 1 May 2007 |
1,190 |
418 |
437 |
(1,498) |
547 |
|
Loss for the year |
- |
- |
- |
(133) |
(133) |
|
Decrease in share option reserve |
- |
- |
(2) |
- |
(2) |
|
Balance as at 30 April 2008 |
1,190 |
418 |
435 |
(1,631) |
412 |
|
Balance as at 1 May 2008 |
1,190 |
418 |
435 |
(1,631) |
412 |
|
Loss for the year |
- |
- |
- |
(123) |
(123) |
|
Decrease in share option reserve |
- |
- |
(9) |
- |
(9) |
|
Balance as at 30 April 2009 |
1,190 |
418 |
426 |
(1,754) |
280 |
Consolidated Balance Sheet
AS AT 30 APRIL 2009
|
2009 |
2008 |
||
|
£000 |
£000 |
||
|
Assets |
|||
|
Non-current assets |
|||
|
Goodwill |
198 |
198 |
|
|
Intangible assets |
- |
12 |
|
|
Property, plant and equipment |
358 |
465 |
|
|
556 |
675 |
||
|
Current assets |
|||
|
Inventories |
211 |
255 |
|
|
Trade and other receivables |
446 |
413 |
|
|
Cash and cash equivalents |
2 |
2 |
|
|
659 |
670 |
||
|
Liabilities |
|||
|
Current liabilities |
|||
|
Trade and other payables |
741 |
640 |
|
|
Financial liabilities - borrowings |
|||
|
Bank overdrafts |
70 |
40 |
|
|
Interest bearing loans and borrowings |
96 |
125 |
|
|
907 |
805 |
||
|
Net current liabilities |
(248) |
(135) |
|
|
Non-current liabilities |
|||
|
Trade and other payables |
6 |
84 |
|
|
Financial liabilities - borrowings |
|||
|
Interest bearing loans and borrowings |
22 |
44 |
|
|
28 |
128 |
||
|
Net assets |
280 |
412 |
|
|
Shareholders' equity |
|||
|
Called up share capital |
1,190 |
1,190 |
|
|
Share premium |
418 |
418 |
|
|
Other reserves |
426 |
435 |
|
|
Retained earnings |
(1,754) |
(1,631) |
|
|
Total equity |
280 |
412 |
Consolidated Cash Flow Statement
FOR THE YEAR ENDED 30 APRIL 2009
|
2009 |
2008 |
||
|
£000 |
£000 |
||
|
Cash flows from operating activities |
|||
|
Cash generated from operations |
66 |
165 |
|
|
Interest paid |
(27) |
(9) |
|
|
Interest element of hire purchase payments paid |
(12) |
(12) |
|
|
Net cash from operating activities |
27 |
144 |
|
|
Cash flows from investing activities |
|||
|
Purchase of shares in subsidiary undertaking |
- |
(9) |
|
|
Purchase of tangible fixed assets |
(6) |
(48) |
|
|
Net cash from investing activities |
(6) |
(57) |
|
|
Cash flows from financing activities |
|||
|
Loans advanced in the year |
29 |
- |
|
|
Capital repayments in year |
(80) |
(33) |
|
|
Net cash from financing activities |
(51) |
(33) |
|
|
Increase/(decrease) in cash and cash equivalents |
(30) |
54 |
|
|
Cash and cash equivalents at beginning of year |
(38) |
(92) |
|
|
Cash and cash equivalents at end of year |
(68) |
(38) |
Notes
|
1. |
Basis of preparation These consolidated financial statements have been presented in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC) and have been prepared in accordance with AIM rules and the Companies Act 2006, as applicable to companies reporting under IFRS. These consolidated financial statements have been prepared in accordance with the accounting policies set out in the annual report and accounts for the year ended 30 April 2009, and under the historical cost convention, except where modified by the revaluation of certain financial instruments and commodities. The Group incurred a net loss of £123,000 during the year ended 30 April 2009 and at that date the Group's balance sheet showed a retained loss of £1,754,000. The Group's financial projections indicate that the Group requires additional cash resources to continue to meet its liabilities as they fall due over the next 12 following the loss of a key customer as disclosed in the Report of Directors and note 25 in the annual report and accounts for the year ended 30 April 2009. In order to ensure the company can continue as a going concern the directors are: Discussing its banking facilities with its bankers; and Have negotiated a supply agreement with Caffe Nero to supply green coffee which would provide additional working capital. The Group's major shareholder has also indicated his willingness to provide additional funding via a loan from his company, Tudeley Holdings Limited, to bridge the forecast shortfall in funding should it be required. |
|
2. |
The consolidated financial statements incorporate the financial statements of the company and all principal subsidiaries for the year ended 30 April 2009. The results of any subsidiaries acquired during the year are included in the statements from the effective date of acquisition. |
|
3. |
Loss per share for the year ended 30 April 2009 is calculated on the consolidated loss on ordinary activities after tax of £123,000, divided by 23,790,914, being the weighted average number of ordinary shares in issue during the year. |
|
4. |
The financial information set out in this announcement does not constitute the Company's statutory accounts for the year ended 30th April 2009 or 30th April 2008, but is derived from those accounts. Statutory accounts for the year ended 30th April 2008 have been delivered to the Registrar of Companies and those for the year ended 30th April 2009 will be delivered following the Company's annual general meeting. The auditors have reported on those accounts; their reports were unqualified and did not contain statements under S237 (2) or (3) Companies Act 1985. |
|
5. |
Copies of the annual report and accounts will be posted to shareholders today and will be made available to the public on the Company's website, www.coburg-group.com and at Unit 3, Harrington Way, Warspite Road, Woolwich, London SE18 5NU. The Annual General Meeting of the Company is due to take place at 11.00 a.m. on 30th October 2009 at the same address, at which resolutions will be proposed as set out in the copy of the notice of AGM appended below. |
Notice of AGM
Annual General Meeting
The directors advise that this document contains the formal Notice of the Annual General Meeting of Coburg Group Plc which you will find on page 48. The Notice convenes the Annual General Meeting of the company to be held at Unit 3 Harrington Way, Warspite Road, Woolwich, London. SE18 5NU for 11.00 a.m. on 30 October 2009 at which the following resolutions will be proposed:
Ordinary Business
To receive the company's financial statements for the year ended 30 April 2009 together with the directors' report, the directors' remuneration report and the auditors' report on those accounts.
To re-appoint Konrad Legg as a director who retires by rotation.
To re-appoint Horwath Clark Whitehill LLP as auditors of the company to hold office from the conclusion of the meeting to the conclusion of the next meeting at which accounts are laid before the company at a remuneration to be determined by the directors.
Special Business
To consider and if thought fit pass the following resolutions as Ordinary Resolutions:
up to an aggregate nominal amount of £250,000 for cash; and
up to an aggregate nominal amount of £600,000 where such securities form the whole or part of the consideration for the acquisition of any other company;
provided this authority shall expire at the conclusion of the next Annual General Meeting of the Company after the passing of this resolution save that the directors may allot relevant securities pursuant to an offer or agreement made by the Company on or before that date as if such authority had not expired.
To consider and if thought fit pass the following resolutions as a Special Resolution:
6. THAT in substitution for all existing authorities to the extent unused, and subject to the passing of the resolution 5 the directors be generally empowered pursuant to Section 551 of the Act to allot equity securities (within the meaning of Section 560 of the Act) pursuant to the authority conferred by resolution 5 as if Section 561 of the Act did not apply to any such allotment provided that this power shall be limited to the allotment of equity securities:
provided this authority shall expire at the conclusion of the next Annual General Meeting of the Company after the passing of this resolution save that the directors may allot relevant securities pursuant to an offer or agreement made by the Company on or before that date as if such authority had not expired.
For further enquiries please contact:
|
Chris Birkle |
Coburg Group PLC |
+44 (0)20 8317 6410 |
|
Colin Aaronson |
Grant Thornton Corporate Finance |
+44 (0)20 7383 5100 |
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