Final Results

29th Jan 2009 07:00



Preliminary Results for the 52 weeks ended 1 November 2008

29 January 2009

Beale PLC, the specialist department store operator, announces Preliminary Results for the 52 weeks ended 1 November 2008 (comparative period - 53 weeks ended 3 November 2007).

*	Like for like gross sales* declined by 6.8%.
*	Group revenue amounted to £47.9m (2007: £58.8m). Like for like revenue is down 7.8%.
*	Gross margins improved from 54.2% to 54.9%
*	Group loss before tax of £1.52m (2007: loss £1.39m)
*	Like for like sales excluding VAT in the first 11 weeks of the current financial year (to 17 January 2009), were 3.3% below those for the previous year.

Mike Killingley, Chairman, commented: "It is universally acknowledged that the depth of the current recession is such that 2009 is likely to be a very difficult year for retailers, and that there will be a further decline in gross domestic product. Thus the earliest we can expect any improvement in the trading environment is 2010. In consequence the executive team, ably and energetically led by Tony Brown, is focused on:

-	an aggressive promotional trading strategy,
-	margin improvement and the management of costs

Tony Brown, Chief Executive added: "I am pleased that we have been able to maintain margins in such a challenging environment, a central aspect of our current trading strategy.

"2009 will be more difficult than 2008 with the credit crunch deepening and consumer confidence continuing to decline. This coupled with the weakness of the pound against the dollar and the Euro, which affects our buying and therefore our buying in margins, will create further challenges. We have plans in place to reduce the effect of what can be described as the perfect storm of a downturn, a strong balance sheet and a good relationship with our bank. 

Your Board will continue its best efforts to come out of this downturn stronger, leaner and ready to take advantage of improved consumer confidence."

For further information:

Beale PLC	Tavistock Communications	Blue Oar Securities PLC
Tony Brown, Chief Executive	Lulu Bridges	Nick Lovering
Ken Owst, Finance Director	Polly Hutchinson
Tel: 01202 552022	Tel: 020 7920 3150	Tel: 020 7448 4478

* Gross sales include the full value of concession sales and VAT, but exclude the results of the Ealing store which closed in October 2007 and the sales in the 53 week's trading in that year and, in the opinion of the Directors, provides a more realistic indication of customers' spending patterns than revenue. See note 2 for further information.

Chairman's Statement 

Results

The Group loss before tax of £1.52 million for the 52 weeks ended 1 November 2008 (53 weeks ended 3 November 2007: loss £1.39 million) was broadly in line with our expectations and reflected the continuing exceptionally challenging economic environment.

Like for like gross sales were 6.8% lower than those of the previous year. Gross sales include concession sales and VAT, but exclude the results of the Ealing store which closed in October 2007 and the sales in the 53rd week's trading in that year. 

Like for like Group revenue declined by 7.8%. At £47.9 million, total revenue was 18.5% lower than in the previous year (2007: £58.8 million). The slightly higher percentage decline compared with gross sales reflects the higher percentage of concessions in the sales mix.

Gross margins improved from 54.2% to 54.9%, albeit that in the previous year there were some lower margin sales from the Ealing closing down sale. Two years ago gross margins were 54.9%. I am pleased that we have been able to maintain margins in such a challenging environment and, as outlined further below, the improvement of our margins is a central aspect of our current trading strategy.

Administrative expenses fell by £5.4 million and by £2.3 million if Ealing is excluded, as we continued to focus on reducing our cost base.

Since his arrival as chief executive in June 2008, Tony Brown has led a review of, and has made significant changes in, the business's trading strategy. The cornerstone of this strategy is the improvement in the bought-in margin, which has enabled us to improve underlying margins significantly. The importance of this in the present climate cannot be overstated, because it has allowed us much greater scope to implement the new promotional strategy, sharing some of the benefits of this improved margin with our customers without unduly threatening our own profit margins. 

I particularly commend you to read Tony Brown's more detailed Chief Executive's Statement, in which he outlines this strategy in more detail. More information on the Group's results, balance sheet and cash position is presented in Ken Owst's Finance Director's Review.

Trading update

Like for like sales excluding VAT for the first 11 weeks of our current financial year, to 17 January 2009, were 3.3% below those for the previous year.

Balance sheet

There are two specific matters which I wish to draw to your attention. The first is that the revaluation of our principal freeholds and the long lease in Poole at the year-end gave rise to a £1.5 million reduction in their valuation. This of course has no impact on the underlying value of the properties to our trading activities, but is simply a reflection of the depressed open market values of commercial property in the current economic environment. The second is the very encouraging reduction in the value of our inventories at the year-end, by 17.4% to £8.4 million (2007: £10.2 million). 

Dividend

No dividend is proposed.

Board

Nigel Beale retired from the board at the end of October 2008, as his third three year term as a non-executive director expired during the year. On his retirement Nigel has assumed the role of President of the Company. This honorary position has been created to enable us to maintain Nigel's connection with the Company to which he has made such an enormous contribution over more than 40 years, 37 of them as an executive director, chairman, and latterly a non-executive director.

We are delighted to welcome Keith Edelman as a non-executive director. Keith joined us in September 2008 as an independent non-executive director. He has significant retail experience, which will be of great value to the board. He was managing director of Arsenal Football Club between 2000 and 2008, and was group chief executive of Storehouse plc (which comprised BHS and Mothercare) between 1993 and 1999.

He also holds and has held a number of non-executive appointments, including chairman of Glenmorangie plc and non-executive director of Eurotunnel plc.

Neil Jones, sales director, left the Company in November 2008. We wish him well for the future. He has not been directly replaced, as Tony Brown has taken direct responsibility for sales.

Staff

On behalf of the board and shareholders I would like to thank all our staff for their dedication and hard work in this difficult environment. 

Banking facilities and going concern

The Group has a good relationship with its bank, which continues to provide the Group with loan and overdraft facilities. This relationship, supported by a strong balance sheet, has enabled us to renegotiate our bank facilities since the year end. We have secured a new £9 million term loan facility, repayable in February 2011, in addition to the existing £500,000 overdraft facility, which is repayable on demand. The bank facilities are secured against the Group's freehold properties.

However, the year ahead will be challenging due to the current economic environment, and uncertain as we are unsure as to the depth and length of this recession. We believe we have positioned the business to deal with these market conditions; however this uncertainty, combined with the limited headroom in one of the banking covenants, may require the Group to renegotiate its bank covenants during the financial year. This creates a material uncertainty which may cast doubt on the Group and Company's ability to continue as a going concern. 

As discussed above, and in more detail in Tony Brown's chief executive's statement, the trading strategies we are implementing, coupled with further cost reductions and, if necessary, the potential for us to dispose of assets to reduce our borrowings, provide a reasonable expectation that the Group and Company has adequate resources to continue in operational existence for the foreseeable future. 

For these reasons the Board has adopted the going concern basis in preparing the annual report and accounts.

Outlook

It is universally acknowledged that the depth of the current recession is such that 2009 is likely to be a very difficult year for retailers, and that there will be a further decline in gross domestic product. Thus the earliest we can expect any improvement in the trading environment is 2010.

In consequence the executive team, ably and energetically led by Tony Brown, is focused on:

*	an aggressive promotional trading strategy, which Tony describes in more depth in his Chief Executive's Statement;
*	margin improvement, based on sharpening our focus on input margins;
*	continuing to take costs out of the business. £2.3 million (excluding Ealing) was taken out of the cost base in the year under review and further substantial savings are being implemented.

Mike Killingley

Chairman

Chief Executive's Statement

Introduction

I joined the business on the 1st June 2008 and immediately set about re-energising the business and implementing the turnaround plan. Simply put, this involves improving sales, margins, reducing our costs and giving the customers more choice and real value for money on top quality brands.

In September 2008, the economic outlook for the country was severely impacted by the banking crisis and the resultant knock-on effect on consumer confidence. This resulted in the most challenging retail environment with consumer confidence at an all time low. The turnaround strategy we employed in June, I am pleased to say, has reduced our exposure to this extraordinary environment. Sadly we are not immune from the economic backdrop and the full effect of the turnaround plan has been subdued by the trading environment. We would, however, have been in a much worse place had we not executed the plan in June. I believe we have the right trading strategy and the right team to implement that strategy to see us through the difficult times ahead.

Buying in margins improved 

In June we carried out a full review of every single product sold in our stores. This resulted in a 15% reduction in the number of lines that we carry with the removal of all slow, under-performing and low margin lines. This, in turn, has resulted in a reduction of our stock holding of some 17% or £1.8 million at cost at the end of the trading year. We continue to improve on this. This has enabled us to focus our minds on buying better and deeper stocks of our faster selling ranges and thereby at the same time improving our margins, resulting in a much improved January Sale and an ongoing promotional plan. We have been able to increase our direct buying from the Far East and which we will continue to do so. We also continue to improve our own buy mix whilst moving our ladies fashions business to a better concession mix and introducing new and exciting brands such as Chesca and Craghoppers.

Sales

Our Sales strategy is supported by the new promotional strategy featuring quality brands at great prices. This approach has proved to be very popular with our customers. We now have a promotional calendar that will give our customers new and exciting monthly promotions on top brands across the whole store. We have implemented a new buying and sales strategy on furniture, which is proving to be very successful and outperforming our key competitors. It is simply based on a smaller supply chain, better buying and cost prices, which we are able to then pass on to our customers with lower prices offering them enhanced value. To support our sales strategy we have implemented a new marketing strategy which is focused on communicating the brands across the store and the promotional lines through better window displays, clearer communication of our offers in our windows and a new approach to our media advertising. In September we changed our creative and marketing agency to a local company called Thinking Juice of Bournemouth which I am pleased to say has been a very successful move.

Whilst we continue to maintain our core business and improve our promotional and pricing strategy, we have also embarked on a number of new initiatives. One of note is the new Salt & Pepper ranges we have put into Horsham and our Worthing store. This is a range of traditional and contemporary housewares, which is designed and packaged for self-use or gifting. We have been encouraged by the initial performance and intend to roll out the concept to a number of other stores in the coming months. The team is working on a number of new concepts which, as in the case of Salt & Pepper, will be exclusive to Beales and another reason for customers to come to Beales as their first choice.

Service and People

One of the key elements that impressed me prior to joining Beales was the service level and attention to customer needs that I saw whilst visiting the stores. I live locally and have shopped in Beales for many years and this has always impressed me. We have a number of programmes in place that will enhance our current service levels, improve the customer experience whilst shopping with us, and deliver service our customers simply can't get anywhere else.

Cost Controls

In this challenging environment management of our cost base is uppermost in our minds whilst making sure we maintain our service levels, sales drive and our operating systems in Central Store Support. We continue to challenge ourselves and expect to make further cost savings during the coming year.

Principal risks and uncertainties

As previously noted, all retailers face a very challenging and competitive trading environment. The greatest risk to our business continues to be a sustained economic downturn with the need for increased discounting and promotions to drive sales. This has been a major feature of the 2007/2008 trading year and we have succeeded in maintaining good margins. In an environment where achieving sales increase is an ongoing challenge, it is also of major importance that cost saving targets are met. The Company continues to manage these risks by:

*	Balancing concession and own bought merchandise
*	Ensuring that challenging cost saving targets are achieved
*	Implementation of the Group Corporate Plan
*	Focusing on improvement in our product ranges, maximising margins from direct Far East sourcing whilst managing the impact of the decline in Sterling against the Dollar and the Euro.
*	Full integration of the new management accounting systems, which will ensure, inter alia, improved stock control and replenishment
*	Regular monitoring of strategic KPIs

Our ongoing relationship with the bank is of pivotal importance and we continue to manage this. As set out in Mike Killingley's Chairman's Statement, HSBC has renewed our banking facilities for the next two years with the appropriate covenants. We will continue to maintain and build on this important relationship.

Environment

We believe in working with and supporting the communities in which we operate and we are closely involved with the town centre and council management in many of the towns in which we trade. We continue to seek ways to reduce product packaging and bag usage in addition to increasing the recycling of cardboard, plastic and other waste. We also continue to pay particular attention to reducing the environmental impact of the Group's carrier bags and with assistance from the Carbon Trust seek opportunities for greater energy efficiency in our stores, service buildings and offices.

Outlook and Summary

Since joining Beales the economic climate has changed considerably. In my view 2009 will be more difficult than 2008 with the credit crunch deepening and consumer confidence continuing to decline. This coupled with the weakness of the pound against the dollar and the Euro, which affects our buying and therefore our buying in margins, will create further challenges.

We have plans in place to reduce the effect of what can be described as the perfect storm of a downturn, a strong balance sheet and a good relationship with our bank. Your Board will continue its best efforts to come out of this downturn stronger, leaner and ready to take advantage of improved consumer confidence.

Tony Brown

Chief Executive

Finance Director's Review

Results

The consolidated financial statements for the Group are compiled for trading periods to the Saturday closest to 31 October each year. The period to 1 November 2008 was 52 weeks, though the previous period was 53 weeks. The Group closed its store in Ealing at the end of the 2007 trading period. In accordance with IAS 8 the Group now deducts staff discounts from revenue rather than including it in administrative expense. As a result the prior year numbers have been restated, £351,000 has been adjusted in both expenses and revenue, having no impact on operating profit.

For 2008 the gross sales, including VAT and concessions were £89.0 million being 17.6% below the previous period of £107.8 million. On a like for like comparison, excluding Ealing's sales and £1.7 million generated in the previous year due to the extra trading week, gross sales including VAT and concessions would show a 6.8% decline. The revenue for the Group was £47.9 million being 18.5% below the previous year (2007: £58.8million). On a like for like basis revenue is 7.8% down due to concessions representing a greater proportion of total sales in the year, as shown in note 2 of the financial statements.

Gross profit for the year of £26.3 million (2007: £31.8million) was achieved at a margin of 54.9% (2007: 54.2%). It is particularly pleasing to see a margin improvement in the year, when there have also been considerable efforts put into stock management, with inventories shown on balance sheet falling by £1.8 million, 17.4% below previous year-end. It should be remembered that the closure sale of Ealing last year will have reduced margins, but also facilitated stock reduction. This is the second consecutive year that the Group has reduced inventory levels with stock being 27% lower than two years ago.

The Group has continued to maintain a close focus on reducing administrative expenses. The total for the year of £27.5 million is 16.4% lower than the restated previous year (2007: £32.9 million). Ealing store expenses in the previous year related directly to £3.1 million of the total reduction of £5.4 million.

The net cost of financing at £296,000 (2007: £317,000) fell marginally due to reducing interest rates in the year. The resulting loss on ordinary activities before taxation was £1,522,000 (2007: £1,391,000).

Taxation

The tax credit for the year was £131,000 (2007: £417,000) relating to the variation of deferred tax resulting from the loss in the year, being offset by losses on non-qualifying depreciation and reduced by the non recognition of the deferred tax asset on trading losses.

Earnings per share

The adverse trading performance resulted in a loss per share of 6.78p (2007: 4.75p). No dividends were paid during the year (2007: 1.1p per share). The Board considers that a significant trading improvement will be necessary before further dividends are paid.

Accounting policies and standards

Other than the application of IAS 8 referred to earlier, there have been no changes to the accounting policies adopted.

Pensions

The Group offers new employees the opportunity to join the Beale's defined contribution pension scheme. The defined benefit scheme was closed to new entrants in April 1997. The Group also has responsibility for the Denners' pension scheme, which was closed to new members and future accrual when Denners Limited was acquired by the Group in 1999.

The Group's final salary pension liability under IAS 19 at the year-end reduced to £1.4 million (2007: £2.3 million). At the year-end the latest triennial valuation from October 2007 of the Beale's defined benefit pension scheme was still being discussed with the trustees. An agreement for a new schedule of contributions should result from the discussions.

Whilst negotiations have continued the Group has continued to meet the existing schedule of contributions by paying annually cash of £1.8 million into the scheme.

The next Denners pension scheme valuation is based on the year-end to October 2008. Under IAS 19 there is a small surplus in the scheme valuation at year-end.

Group systems

During the year the Group has continued the replacement of its major systems platform with the implementation of upgraded sales ledger systems linked to EPOS and new email infrastructure.

Balance sheet and cash flow

In accordance with IAS 16 the Group revalued its major property assets at the year-end; the principal freeholds of Bedford, Kendal and Yeovil and the long leasehold in Poole. The Group revaluation reduced fixed assets by £2.1 million, which when offset by £0.6 million reduction in deferred tax liability, resulted in a reduction of £1.5 million in the Group revaluation reserve. Group capital expenditure in the year was £0.6 million (2007: £1.0 million) with the major spend relating to refurbishment in the Bournemouth store and the new systems.

During the year there was a net cash outflow of £2.7 million (2007: £1.8 million inflow). As noted earlier inventories were reduced by 17.4% to £8.4 million (2007: £10.2 million). Trade payables at year-end were reduced to £4.7 million (2007: £7.8 million) and accruals and deferred income were £2.5 million (2007: £3.9 million). The liability reductions are primarily as a result of the impacts of the October 2007 period being a 5 week month which when coupled with the closure of the Ealing store produced higher year-end liabilities in 2007. These liability reductions have had a consequential adverse impact on borrowings in the year under review. As always the Group has ensured that creditor payments have been prioritised in order to benefit from maximum early settlement discount.

Group net assets at year-end were £17.4 million (2007: £20.7 million). Net asset per share at year-end was 84.9p (2007: 100.7p).

Treasury and banking

Treasury activities are governed by procedures and policies approved by the Board. The Group's policy is to take a conservative stance on treasury matters and no speculative positions are taken in financial instruments. The treasury function manages the Group's financial resources in the most appropriate and cost-effective manner, minimising the Group's exposure to risk arising from interest rate and foreign exchange fluctuations. During the year the Group operated within its borrowing facilities of £9.5 million in term loans, plus an overdraft of £0.5 million. 

Since year end the Group has completed renegotiation of its bank facilities with the bank providing a £9.0 million two-year term loan facility and an operating overdraft at the same level to replace the total facilities as from February 2009. The facilities include key financial covenants which require testing based on interim as well as full year financial information. As noted in the Chairman's statement; the year ahead will be challenging due to the current economic climate. However the Board believes that the business is able to meet these challenges. Limited headroom in one of the banking covenants may require the Group to renegotiate its banking covenants during the year. This creates material uncertainty, which may cast doubt on the Group's ability to continue as a going concern. The directors have prepared forecast information for the 2008/9 and 2009/10 years, covering a period of more than 12 months from the date of their approval of these financial statements. Based on the forecast results and cash flow, coupled with the strategies set out in the Chairman's and Chief Executive's statements the Group and Company has adequate resources to continue in operational existence for the foreseeable future and on this basis the directors consider that the Group and Company will continue to operate as a going concern.

The Group net debt at year-end was £7.8 million (2007: £5.1 million) primarily resulting from reduction in year-end liabilities as referred to earlier. Gearing is 44.9% (2007: 24.7%).

Ken Owst

Finance Director

Consolidated Income Statement

For the 52 weeks ended 1 November 2008

	Notes	52 weeks to  1 November  2008  £000	#Restated  53 weeks to  3 November 2007  £000
Gross sales*	2	88,982	107,759
Revenue - continuing operations	2	47,881	58,781
Cost of sales		(21,615)	(26,933)
Gross profit		26,266	31,848
Administrative expenses		(27,492)	(32,922)
Operating loss - continuing operations		(1,226)	(1,074)
Interest payable		(314)	(331)
Interest receivable		18	14
Loss on ordinary activities before tax		(1,522)	(1,391)
Tax		131	417
Loss for the period from continuing operations  attributable to equity members		(1,391)	(974)
Basic and diluted loss per share	3	(6.78p)	(4.75p)
Dividend paid per share	4	-	1.1p

* Gross sales reflect revenue from concession sales and VAT from continued operations.

# See note 1 for details of restatement.

Consolidated Balance Sheet

As at 1 November 2008

		1 November  2008  £000	3 November  2007  £000
Non-current assets
Goodwill		892	892
Property, plant and equipment		25,219	28,986
Financial assets		16	16
		26,127	29,894
Current assets
Inventories		8,449	10,238
Trade and other receivables		4,684	5,962
Tax asset		-	43
Cash and cash equivalents		76	91
		13,209	16,334
Total assets		39,336	46,228
Current liabilities
Trade and other payables		(7,484)	(12,162)
Tax liabilities		(35)	(15)
Bank overdrafts and loans		(2,904)	(4,957)
		(10,423)	(17,134)
Net current assets/(liabilities)		2,786	(800)
Non-current liabilities
Bank loan		(5,000)	(250)
Retirement benefit obligations		(1,369)	(2,304)
Deferred tax liabilities		(4,135)	(4,886)
Obligations under finance leases		(978)	(976)
Total liabilities		(11,482) (21,905)	(8,416) (25,550)
Net assets		17,431	20,678
Equity
Share capital		1,026	1,026
Share premium account		440	440
Revaluation reserve		7,559	9,152
Capital redemption reserve		242	242
ESOP reserve		(27)	(48)
Retained earnings		8,191	9,866
Total equity		17,431	20,678

 

Consolidated Statement of Recognised Income and Expense

		52 weeks to  1 November  2008  £000	53 weeks to  3 November  2007 £000
Actuarial (loss)/gain on pension scheme		(385)	1,579
Tax on items taken directly to equity		34	(869)
Revaluation		(1,505)	-
Impact of change in tax rate		-	256
Net (loss)/income recognised directly in equity		(1,856)	966
Loss for the period		(1,391)	(974)
Total recognised income and expense for the period		(3,247)	(8)

Consolidated Reconciliation of Movements in Equity

		52 weeks to  1 November  2008  £000	53 weeks to  3 November  2007  £000
Opening equity		20,678	20,912
Total recognised income and expense for the period		(3,247)	(8)
Dividends paid		-	(226)
Total movements in equity for the period		(3,247)	(234)
Closing equity		17,431	20,678

Consolidated Cash Flow Statement

For the 52 weeks ended 1 November 2008

	Notes	52 weeks to  1 November  2008  £000	53 weeks to  3 November  2007  £000
Cash flows from operating activities before interest and tax	5	(1,931)	3,176
Interest paid		(305)	(332)
Interest received		18	14
Tax received		63	160
Net cash flow (used in)/ generated from operating activities		(2,155)	3,018
Cash flows from investing activities
Purchase of property, plant and equipment		(559)	(1,014)
Proceeds from sale of financial assets		-	1
Net cash used in investing activities		(559)	(1,013)
Cash flows from financing activities
Dividends paid		-	(226)
Increase in/(repayment of) loans		2,750	(1,750)
Net proceeds from obligations under finance leases		2	2
Net cash generated from/(used in) financing activities		2,752	(1,974)
Net increase in cash and cash equivalents in the period		38	31
Cash and cash equivalents (including overdrafts) at  beginning of period		(366)	(397)
Cash and cash equivalents (including overdrafts) at end of period		(328)	(366)

Notes to the financial statements
1	Accounting policies
General information
The financial information set out above does not constitute the Company's statutory accounts for the years ended 1 November 2008 or 3 November 2007. The financial information for 2008 and 2007 is derived from the statutory accounts for those years. The statutory accounts for 2007 have been delivered to the Registrar of Companies. The statutory accounts for 2008 will be delivered to the Registrar of Companies following the Company's annual general meeting. The Group auditors, Deloitte LLP, have reported on the 2008 and Deloitte & Touche LLP on the 2007 accounts, their reports were unqualified and did not contain a statement under 237(2) or (3) of the Companies Act 1985. The preliminary announcement has been prepared on the basis of the accounting policies as stated in the financial statements for the 52 week period ended 1 November 2008. While the information included in this preliminary announcement has been computed in accordance with International Financial Reporting Standards (IFRS), this announcement does not itself contain sufficient information to comply with IFRS. The Company expects to publish full financial statements that comply with IFRS on 16 February 2009.

Revenue - change in policy Staff discount under IAS8 should be accounted for on a net basis within revenue. 2007 figures have been restated to comply with this change in accounting policy. In the 2007 accounts, staff discount was not offset against revenue but included in administrative expenses. See below the effect of restatement which has no impact on operating profit:
	Figures prior to  restatement  53 weeks to  3 November  2007  £000	£000	Restated  53 weeks to  3 November  2007  £000
Gross sales	108,171	(412)	107,759
Revenue - continuing operations Cost of sales	59,132  (26,933)	(351) -	58,781  (26,933)
Gross profit Administrative expenses	32,199  (33,273)	(351) 351	31,848  (32,922)
Operating loss - continuing operations	(1,074)	-	(1,074)

2

Revenue

The entire Group's revenue is derived from retail sales made in the UK. Revenue excludes the non-commission element of sales made by concession outlets.
	52 weeks to  1 November  2008  £000	Restated  53 weeks to  3 November  2007  £000
Gross sales	88,982	107,759
VAT	(13,091)	(15,892)
Gross sales (exc. VAT) Agency sales less commission	75,891  (28,010)	91,867  (33,086)
Revenue	47,881	58,781

Analysis of gross sales (excluding VAT) and revenue:
	Gross sales £000	Revenue £000		Gross sales £000	Revenue £000
Own bought sales	39,115	39,115		48,351	48,351
Concession sales	36,338	8,328		42,966	9,880
Interest on customer accounts	438	438		550	550
	75,891	47,881		91,867	58,781

3	Loss per share

	52 weeks to  1 November  2008	53 weeks to  3 November  2007
Weighted average number of shares in issue for the purpose  of basic earnings per share	20,524,797	20,524,797
Dilution - option schemes	-	-
Diluted weighted average number of shares in issue	20,524,797	20,524,797
	£000	£000
Loss for basic and diluted earnings per share	(1,391)	(974)
	Pence	Pence
Basic loss per share	(6.78)	(4.75)
Diluted loss per share	(6.78)	(4.75)

4

Dividends

	52 weeks to  1 November  2008  £000	53 weeks to  3 November  2007  £000
Amounts recognised as distributions to equity holders in the period
Final dividend for 53 weeks ended 3 November 2007 of nil per share
(2007: final dividend for 52 weeks ended 28 October 2006 of 1.1p per share).	-	226
Interim dividend	-	-
	-	226
The proposed final dividend for 52 weeks ended 1 November 2008 is nil (2007: nil) per share	-	-

5	Reconciliation of operating loss to net cash flow from operating activities

	Group
	52 weeks to  1 November  2008  £000	53 weeks to  3 November  2007  £000
Operating loss	(1,226)	(1,074)
Adjustments for:
Cash disbursements of pension obligations (net of charge included within the income statement)	(1,320)	(1,316)
Depreciation	2,235	2,552
Loss on fixed asset disposal	-	174
Decrease in inventories	1,789	1,322
Decrease/(increase) in trade and other receivables	1,278	(169)
(Decrease)/increase in trade and other payables	(4,687)	1,687
Cash (utilised in)/generated from operations	(1,931)	3,176

6	Analysis of net debt

	3 November  2007  £000	Cash flow  £000	1 November  2008  £000
Cash at bank and in hand Overdraft	91  (457)	(15) 53	76  (404)
Debt due within one year Debt due after one year	(366) (4,500) (250)	38  2,000  (4,750)	(328) (2,500) (5,000)
	(5,116)	(2,712)	(7,828)
Finance lease	(976)	(2)	(978)

7.	Report and Accounts
Copies of the Company's Annual Report and Accounts will be sent to shareholders in due course. Further copies may be obtained from the company secretary, Beale PLC, The Granville Chambers, 21 Richmond Hill, Bournemouth BH2 6BJ.
8.	Going Concern
The Group and Company has met its day to day working capital requirements through the use of two principal bank loans of £4.5million and £5 million, which were due for repayment in February 2008 and October 2011, and an overdraft facility of £500k which is repayable on demand. Subsequent to the year end, the Group secured a new bank loan facility (pending finalisation of documentation) of £9 million, repayable in February 2011 in addition to the existing overdraft facility of £500k which continues to be repayable on demand. The total facilities are secured on the freehold properties of the Group including the two minor investment properties and the Bolton warehouse. The freehold properties, excluding the investment properties and the Bolton warehouse, were independently revalued to £12.9 million as at 1 November 2008.
The facilities include key financial covenants which require testing based on interim as well as full year financial information. The directors have prepared forecast information for the 2008/9 and 2009/10 years, covering a period of more than 12 months from the date of their approval of these financial statements. Based on the forecast results and cashflow the Group and Company will be able to meet the bank covenants, and on this basis the directors consider that the Group and Company will continue to operate within the available facilities.
The directors are aware that the forecasts referred to above may be difficult to meet due to the current challenging economic conditions and due to limited headroom in the operating result covenant which may result in a need to renegotiate the bank covenants during the year. Given the above, there is a material uncertainty which may cast significant doubt as the Group and Company's ability to continue as a going concern and therefore it may be unable to realise its assets and discharge its liabilities in the normal course of business. The financial statements do not include any adjustments that would result if the going concern basis were not appropriate.
However, the directors have a reasonable expectation that the Group and Company has adequate resources to continue in operational existence for the foreseeable future. For this reason, the financial statements are prepared adopting the going concern basis.
9.	Audit Report
The audit report for the 52 week period ended 1 November 2008 is not qualified but contains an emphasis of matter paragraph on going concern which draws attention to the matters set out above on going concern.

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