27th Jan 2009 07:00
HALF-YEARLY REPORT
Games Workshop Group PLC ("Games Workshop" or the "Group") announces its half-yearly results for the six months to 30 November 2008.
Highlights:
|
Revenue at £61.2m (2007: £53.9m) |
|
|
Gross margin - pre-exceptional at 71.4% (2007: 70.1%) |
|
|
Operating profit - pre-exceptional and pre-royalties receivable at £3.3m (2007: £0.5m) |
|
|
Operating profit - pre-exceptional at £3.8m (2007: £1.2m) |
|
|
Operating profit at £3.8m (2007: £0.6m) |
|
|
Pre-tax profit/(loss) at £3.1m (2007: £(0.1)m) |
|
|
Earnings/(loss) per share of 4.9p (2007: (0.4)p) |
Mark Wells, Chief Executive of Games Workshop, said:
"The work needed to establish growth in all channels in all territories goes on with some significant progress being made in this half-year where, with the exception of Continental Europe, we have been able to deliver local currency sales growth in all territories."
|
For further information, please contact: |
||
|
Games Workshop Group PLC |
Today only: |
01653 618016 |
|
Tom Kirby, Chairman |
Thereafter: |
0115 900 4001 |
|
Mark Wells, Chief Executive |
0115 900 4001 |
|
|
Investor relations website |
investor.games-workshop.com |
|
|
General website |
www.games-workshop.com |
|
|
Rawlings Financial PR Limited |
Tel: |
01653 618016 |
|
Catriona Valentine |
||
FIRST HALF HIGHLIGHTS
|
Restated |
||
|
Six months to |
Six months to |
|
|
30 November |
2 December |
|
|
2008 |
2007 |
|
|
Revenue |
£61.2m |
£53.9m |
|
Operating profit - pre-exceptional and pre-royalties receivable |
£3.3m |
£0.5m |
|
Royalties receivable |
£0.5m |
£0.7m |
|
Operating profit - pre-exceptional |
£3.8m |
£1.2m |
|
Exceptional items - cost reduction programme |
£nil |
£(0.6)m |
|
Operating profit |
£3.8m |
£0.6m |
|
Pre-tax profit/(loss) |
£3.1m |
£(0.1)m |
|
Basic earnings/(loss) per share |
4.9p |
(0.4)p |
INTERIM MANAGEMENT REPORT
Results
The work needed to establish growth in all channels in all territories goes on with some significant progress being made in this half-year where, with the exception of Continental Europe, we have been able to deliver local currency sales growth in all territories.
As is usual, our three routes to market - independent retailers, direct via telephones and our web store, and our own Hobby centres - have had mixed fortunes. Those people looking for evidence about the health of the Hobby we service will take great comfort from the UK achieving sales growth in all three channels and Forge World's extremely strong showing (29% sales growth).
In a very difficult period for input costs - in particular with the price of commodities such as tin and our utility costs - it is pleasing to report that we have increased our gross margin from 70.1% in the last half-year report to 71.4% in this one. This speaks volumes both about the discipline and attention to detail shown by our supply side staff and the swift action taken in sales businesses to increase metal retail prices.
Following last year's restructuring, overheads remain under control. We have opened 14 Hobby centres during the period and closed eight, taking our total to 340.
Compared to November 2007, sterling has weakened by 12.7% against the US dollar and by 13.6% against the euro. We have shown below our sales progression in local currency terms to permit a more meaningful comparison.
Our net borrowings as at 30 November 2008 stood at £11.0 million, a reduction of £4.2 million from the balance at November 2007. Our banking facilities were renewed in July 2008, as set out in the 2008 annual report (page 11). We have complied with the conditions of all banking covenants during the period.
Prospects
As a niche business we do not usually suffer or benefit from, macro-economic factors. Whilst we are pleased with our half-year results, it would be foolish not to sound a note of caution for the short term as we sell through many independent retailers all over the world most of whom are far less well protected than we are.
The principal risks and uncertainties for the balance of the year remain as described in our 2008 annual report (page 6). These risks lie in the ability of our sales businesses to establish and maintain sales growth and in our manufacturing operation to control input costs. The Hobby is healthy and our challenge is to stay focused on what needs to be done to service it efficiently and cost effectively.
Games Workshop's core fundamentals remain strong. We continue to grow our sales, our gross margins are improving, our costs are under control, our return on capital is increasing and our cash flow is good. The board remains confident in the future growth and profitability of the Group.
Statement of directors' responsibilities
The directors confirm that this condensed set of financial statements has been prepared in accordance with IAS 34 as adopted by the European Union, and that the interim management report herein includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8.
The directors of Games Workshop Group PLC are listed in the annual report for the year to 1 June 2008, with the exception of M Sherwin who left the board and K D Rountree who was appointed to the board on 22 October 2008. A list of the current directors is maintained on the investor relations website at investor.games-workshop.com.
By order of the board
M N Wells
Chief Executive
K D Rountree
Chief Financial Officer
|
REVENUE BY GEOGRAPHICAL AREA OF SALES OPERATION IN |
||
|
LOCAL CURRENCY |
||
|
Continuing operations |
Six months to 30 November 2008 |
Restated Six months to 2 December 2007 |
|
Continental Europe |
€27.3m |
€28.6m |
|
United Kingdom |
£21.1m |
£18.5m |
|
The Americas |
US$24.8m |
US$23.3m |
|
Asia Pacific |
Aus$10.0m |
Aus$9.2m |
CONSOLIDATED INCOME STATEMENT
|
Restated |
||||
|
Six months to |
Six months to |
Year to |
||
|
30 November |
2 December |
1 June |
||
|
2008 |
2007 |
2008 |
||
|
Notes |
£000 |
£000 |
£000 |
|
|
Continuing operations |
||||
|
Revenue |
2 |
61,225 |
53,908 |
110,345 |
|
Cost of sales |
(17,532) |
(16,386) |
(33,731) |
|
|
---------- |
---------- |
---------- |
||
|
Gross profit |
43,693 |
37,522 |
76,614 |
|
|
Operating expenses |
(40,443) |
(37,593) |
(75,798) |
|
|
Other operating income - royalties receivable |
549 |
670 |
1,736 |
|
|
---------- |
---------- |
---------- |
||
|
Operating profit |
2 |
3,799 |
599 |
2,552 |
|
Operating profit - pre-exceptional items and pre-royalties receivable |
3,250 |
490 |
3,181 |
|
|
Exceptional items - cost reduction programme |
15 |
- |
(561) |
(2,365) |
|
Royalties receivable |
549 |
670 |
1,736 |
|
|
Finance income |
106 |
163 |
425 |
|
|
Finance costs |
(848) |
(898) |
(1,918) |
|
|
---------- |
---------- |
---------- |
||
|
Profit/(loss) before taxation |
3,057 |
(136) |
1,059 |
|
|
Income tax expense |
4 |
(1,524) |
51 |
(613) |
|
---------- |
---------- |
---------- |
||
|
Profit/(loss) for the period from continuing operations |
1,533 |
(85) |
446 |
|
|
Discontinued operations |
||||
|
Loss for the period from discontinued operations |
5 |
- |
(30) |
(1,186) |
|
---------- |
---------- |
---------- |
||
|
Profit/(loss) attributable to equity shareholders |
1,533 |
(115) |
(740) |
|
|
====== |
====== |
====== |
||
|
Basic earnings/(loss) per ordinary share |
6 |
4.9p |
(0.4)p |
(2.4)p |
|
Diluted earnings/(loss) per ordinary share |
6 |
4.9p |
(0.4)p |
(2.4)p |
|
Basic earnings/(loss) per ordinary share - continuing operations |
6 |
4.9p |
(0.3)p |
1.4p |
|
Diluted earnings/(loss) per ordinary share - continuing operations |
6 |
4.9p |
(0.3)p |
1.4p |
The restatement of the results for the six months to 2 December 2007 relates to the reclassification of the results of the card games, role-playing games and board games activities from continuing operations to discontinued operations as detailed in note 5. The results for the year to 1 June 2008 were prepared on this basis.
CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE
|
Six months to |
Six months to |
Year to |
|
|
30 November |
2 December |
1 June |
|
|
2008 |
2007 |
2008 |
|
|
£000 |
£000 |
£000 |
|
|
Profit/(loss) attributable to equity shareholders |
1,533 |
(115) |
(740) |
|
Exchange differences on translation of foreign operations |
2,161 |
107 |
1,626 |
|
Cash flow hedges: |
|||
|
- fair value losses |
(246) |
(219) |
(940) |
|
- transferred to the income statement |
821 |
29 |
88 |
|
Net investment hedge |
(276) |
- |
(737) |
|
Tax on items recognised directly in equity |
(161) |
52 |
237 |
|
---------- |
---------- |
---------- |
|
|
Total recognised income/(expense) for the period |
3,832 |
(146) |
(466) |
|
====== |
====== |
====== |
CONSOLIDATED BALANCE SHEET
|
As at |
As at |
As at |
||
|
30 November |
2 December |
1 June |
||
|
2008 |
2007 |
2008 |
||
|
Notes |
£000 |
£000 |
£000 |
|
|
Non-current assets |
||||
|
Goodwill |
1,433 |
2,355 |
1,433 |
|
|
Other intangible assets |
10 |
6,163 |
5,545 |
6,059 |
|
Property, plant and equipment |
11 |
26,318 |
27,053 |
26,422 |
|
Trade and other receivables |
1,405 |
1,122 |
1,234 |
|
|
Financial assets - derivative financial instruments |
- |
- |
14 |
|
|
Deferred tax assets |
2,880 |
2,420 |
3,005 |
|
|
---------- |
---------- |
---------- |
||
|
38,199 |
38,495 |
38,167 |
||
|
---------- |
---------- |
---------- |
||
|
Current assets |
||||
|
Inventories |
11,807 |
11,623 |
10,392 |
|
|
Trade and other receivables |
12,642 |
12,691 |
9,870 |
|
|
Assets held for sale |
5 |
- |
- |
464 |
|
Current tax assets |
437 |
1,515 |
854 |
|
|
Financial assets - derivative financial instruments |
262 |
- |
17 |
|
|
Cash and cash equivalents |
7,861 |
6,722 |
7,723 |
|
|
---------- |
---------- |
---------- |
||
|
33,009 |
32,551 |
29,320 |
||
|
---------- |
---------- |
---------- |
||
|
Total assets |
71,208 |
71,046 |
67,487 |
|
|
---------- |
---------- |
---------- |
||
|
Current liabilities |
||||
|
Financial liabilities - borrowings |
9 |
(1,830) |
(6,889) |
(2,791) |
|
Financial liabilities - derivative financial instruments |
(885) |
(463) |
(1,401) |
|
|
Trade and other payables |
(14,799) |
(15,208) |
(15,351) |
|
|
Current tax liabilities |
(441) |
(218) |
(222) |
|
|
Provisions |
12 |
(615) |
(1,459) |
(1,155) |
|
---------- |
---------- |
---------- |
||
|
(18,570) |
(24,237) |
(20,920) |
||
|
---------- |
---------- |
---------- |
||
|
Net current assets |
14,439 |
8,314 |
8,400 |
|
|
---------- |
---------- |
---------- |
||
|
Non-current liabilities |
||||
|
Financial liabilities - borrowings |
9 |
(17,000) |
(15,004) |
(15,001) |
|
Deferred tax liabilities |
(310) |
- |
- |
|
|
Other non-current liabilities |
(718) |
(842) |
(723) |
|
|
Provisions |
12 |
(1,196) |
(1,173) |
(1,317) |
|
---------- |
---------- |
---------- |
||
|
(19,224) |
(17,019) |
(17,041) |
||
|
---------- |
---------- |
---------- |
||
|
Net assets |
33,414 |
29,790 |
29,526 |
|
|
====== |
====== |
====== |
||
|
Capital and reserves |
||||
|
Called up share capital |
16 |
1,556 |
1,556 |
1,556 |
|
Share premium account |
16 |
7,822 |
7,822 |
7,822 |
|
Other reserves |
16 |
1,564 |
(1,103) |
(321) |
|
Retained earnings |
16 |
22,472 |
21,515 |
20,469 |
|
---------- |
---------- |
---------- |
||
|
Total shareholders' equity |
33,414 |
29,790 |
29,526 |
|
|
====== |
====== |
====== |
CONSOLIDATED CASH FLOW STATEMENT
|
Six months to |
Six months to |
Year to |
||
|
30 November |
2 December |
1 June |
||
|
2008 |
2007 |
2008 |
||
|
Notes |
£000 |
£000 |
£000 |
|
|
Cash flows from operating activities |
||||
|
Cash generated from operations |
7 |
3,833 |
623 |
11,097 |
|
UK corporation tax (paid)/received |
(27) |
(3) |
6 |
|
|
Overseas tax paid |
(395) |
(142) |
(418) |
|
|
---------- |
---------- |
---------- |
||
|
Net cash from operating activities |
3,411 |
478 |
10,685 |
|
|
---------- |
---------- |
---------- |
||
|
Cash flows from investing activities |
||||
|
Purchases of property, plant and equipment |
(3,164) |
(2,887) |
(5,705) |
|
|
Proceeds on disposal of other intangible assets |
- |
- |
44 |
|
|
Proceeds on disposal of property, plant and equipment |
9 |
9 |
50 |
|
|
Proceeds on disposal of assets held for sale |
500 |
- |
- |
|
|
Purchases of other intangible assets |
(720) |
(802) |
(1,557) |
|
|
Expenditure on product development |
(1,210) |
(1,138) |
(2,266) |
|
|
Interest received |
112 |
162 |
415 |
|
|
---------- |
---------- |
---------- |
||
|
Net cash from investing activities |
(4,473) |
(4,656) |
(9,019) |
|
|
---------- |
---------- |
---------- |
||
|
Cash flows from financing activities |
||||
|
Proceeds from borrowings |
2,000 |
5,190 |
5,189 |
|
|
Repayment of principal under finance leases |
(6) |
(6) |
(10) |
|
|
Interest paid |
(437) |
(792) |
(1,681) |
|
|
---------- |
---------- |
---------- |
||
|
Net cash from financing activities |
1,557 |
4,392 |
3,498 |
|
|
---------- |
---------- |
---------- |
||
|
Effects of foreign exchange rates |
601 |
(24) |
124 |
|
|
---------- |
---------- |
---------- |
||
|
Net increase in cash and cash equivalents |
1,096 |
190 |
5,288 |
|
|
---------- |
---------- |
---------- |
||
|
Opening cash and cash equivalents |
4,944 |
(344) |
(344) |
|
|
---------- |
---------- |
---------- |
||
|
Closing cash and cash equivalents |
8 |
6,040 |
(154) |
4,944 |
|
====== |
====== |
====== |
NOTES TO THE FINANCIAL INFORMATION
1. Basis of preparation
The half-year results for the six months to 30 November 2008 and for the comparative six months to 2 December 2007 are neither audited or reviewed and do not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006. Statutory accounts for the year to 1 June 2008 have been delivered to the Registrar of Companies. The auditors' report on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under section 237 of the Companies Act 1985.
The financial information has been prepared in accordance with the accounting policies under International Financial Reporting Standards ('IFRS') as adopted by the European Union which are detailed in the financial statements for the year to 1 June 2008. These accounting policies are expected to be followed in the full financial statements for the year ending 31 May 2009. This half-yearly report has been prepared in accordance with the Disclosure and Transparency Rules of the Financial Services Authority and with IAS 34 'Interim Financial Reporting'.
The half-yearly report is available to shareholders and members of the public on the Company's website at investor.games-workshop.com.
2. Segmental analysis
Six months to 30 November 2008
|
Continental Europe |
United Kingdom |
The Americas |
Asia Pacific |
Rest of the world |
Central/ unallocated |
Service centres |
Design and development |
Royalty income |
Group |
|
|
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
|
|
Sales by operation |
21,720 |
21,135 |
13,900 |
4,470 |
- |
- |
- |
- |
- |
61,225 |
|
Inter-segment sales |
2,001 |
(4,604) |
1,887 |
477 |
239 |
- |
- |
- |
- |
- |
|
Sales by location of customers |
23,721 |
16,531 |
15,787 |
4,947 |
239 |
- |
- |
- |
- |
61,225 |
|
Pre-exceptional operating profit/ segment result by location of customers |
5,529 |
3,817 |
322 |
491 |
108 |
(3,282) |
(2,475) |
(1,260) |
549 |
3,799 |
|
Exceptional items |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
|
Operating profit/ segment result by location of customers |
5,529 |
3,817 |
322 |
491 |
108 |
(3,282) |
(2,475) |
(1,260) |
549 |
3,799 |
Restated
Six months to 2 December 2007
|
Continental Europe |
United Kingdom |
The Americas |
Asia Pacific |
Rest of the world |
Central/ unallocated |
Service centres |
Design and development |
Royalty income |
Group |
|
|
Continuing operations |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
|
Sales by operation |
19,705 |
18,550 |
11,742 |
3,911 |
- |
- |
- |
- |
- |
53,908 |
|
Inter-segment sales |
287 |
(1,973) |
1,266 |
269 |
151 |
- |
- |
- |
- |
- |
|
Sales by location of customers |
19,992 |
16,577 |
13,008 |
4,180 |
151 |
- |
- |
- |
- |
53,908 |
|
Pre-exceptional operating profit/ segment result by location of customers |
3,489 |
2,757 |
501 |
184 |
75 |
(2,854) |
(2,158) |
(1,504) |
670 |
1,160 |
|
Exceptional items |
(20) |
(322) |
(89) |
- |
- |
(130) |
- |
- |
- |
(561) |
|
Operating profit/ segment result by location of customers |
3,469 |
2,435 |
412 |
184 |
75 |
(2,984) |
(2,158) |
(1,504) |
670 |
599 |
Year to 1 June 2008
|
Continental Europe |
United Kingdom |
The Americas |
Asia Pacific |
Rest of the world |
Central/ unallocated |
Service centres |
Design and development |
Royalty income |
Group |
|
|
Continuing operations |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
|
Sales by operation |
41,139 |
36,760 |
24,011 |
8,435 |
- |
- |
- |
- |
- |
110,345 |
|
Inter-segment sales |
1,952 |
(5,704) |
2,833 |
645 |
274 |
- |
- |
- |
- |
- |
|
Sales by location of customers |
43,091 |
31,056 |
26,844 |
9,080 |
274 |
- |
- |
- |
- |
110,345 |
|
Pre-exceptional operating profit/segment result by location of customers |
7,648 |
7,338 |
610 |
207 |
110 |
(5,235) |
(4,532) |
(2,965) |
1,736 |
4,917 |
|
Exceptional items |
(382) |
(1,453) |
(568) |
2 |
- |
- |
- |
36 |
- |
(2,365) |
|
Operating profit/segment result by location of customers |
7,266 |
5,885 |
42 |
209 |
110 |
(5,235) |
(4,532) |
(2,929) |
1,736 |
2,552 |
The restatement of the six months to 2 December 2007 relates to the reclassification of the results of the card games, role-playing games and board games activities from continuing operations to discontinued operations as detailed in note 5.
Central/unallocated, service centres, design and development and royalty income segments (costs)/income comprise the (costs)/income arising in the United Kingdom that cannot be directly attributed to an individual geographical segment.
3. Dividends
No dividend was paid in the six months to 30 November 2008. In addition, no interim dividend is proposed for the year ending 31 May 2009 (2007: £nil).
4. Tax
The taxation charge for the six months to 30 November 2008 is based on an estimate of the full year effective rate of 15% (2007: 40%) reflecting a deferred tax credit in respect of a proportion of the US losses previously unrecognised. In addition, following a change in the UK corporation tax legislation in the Finance Act 2008, the Group has taken a one-off charge of £1,060,000 in the current year to reflect the phasing out of industrial buildings allowances.
5. Discontinued operations
On 14 February 2008, the Group disposed of the trading activities of Sabertooth Games Inc., its collectible card game business, and entered into a licensing agreement for the publishing of board games, card games and role-playing games with Fantasy Flight Games Inc. The net result of these operations has been presented as a discontinued operation in the Group's income statement for all periods presented in these financial statements.
These operations, which were previously treated as a separate cash-generating unit due to their non-core nature, have been classified as discontinued.
The table below shows the results of the discontinued operations included in the results of the Group:
Income statement
|
Six months to |
Six months to |
Year to |
||
|
30 November |
2 December |
1 June |
||
|
2008 |
2007 |
2008 |
||
|
£000 |
£000 |
£000 |
||
|
Revenue |
- |
722 |
1,308 |
|
|
Cost of sales |
- |
(309) |
(514) |
|
|
---------- |
---------- |
--------- |
||
|
Gross profit |
- |
413 |
794 |
|
|
Operating expenses |
- |
(469) |
(1,900) |
|
|
---------- |
---------- |
---------- |
||
|
Operating loss |
- |
(56) |
(1,106) |
|
|
Operating profit/(loss) - pre-exceptional items |
- |
(56) |
86 |
|
|
Exceptional items |
- |
- |
(1,192) |
|
|
Income tax credit/(expense) |
- |
26 |
(80) |
|
|
---------- |
---------- |
---------- |
||
|
Loss for the period |
- |
(30) |
(1,186) |
|
|
====== |
====== |
====== |
||
Cash flow statement
|
Six months to |
Six months to |
Year to |
|
|
30 November |
2 December |
1 June |
|
|
2008 |
2007 |
2008 |
|
|
£000 |
£000 |
£000 |
|
|
Cash flows from operating activities |
- |
308 |
491 |
|
Cash flows from investing activities |
- |
(110) |
(167) |
|
---------- |
---------- |
---------- |
|
|
Net increase in cash and cash equivalents |
- |
198 |
324 |
|
====== |
====== |
====== |
The table below shows the net assets disposed of in the year to 1 June 2008 and the consideration received:
|
Year to |
|
|
1 June |
|
|
2008 |
|
|
£000 |
|
|
Goodwill |
922 |
|
Inventories |
139 |
|
Trade and other receivables |
255 |
|
--------- |
|
|
Assets disposed of |
1,316 |
|
Consideration receivable |
(198) |
|
---------- |
|
|
Loss on disposal |
1,118 |
|
====== |
All cash flows arising from discontinued operations arise from operating activities.
Assets held for sale
Following the closure of the tool making facility at Wisbech, UK, the related freehold land and buildings were reclassified from non-current assets to assets held for sale during the year to 1 June 2008. No gain or loss was recognised on reclassification to current assets. The Wisbech facility was sold in July 2008 for a consideration of £500,000.
6. Earnings/(loss) per ordinary share
Basic earnings/(loss) per share
Basic earnings/(loss) per share is calculated by dividing the profit/(loss) attributable to equity shareholders by the weighted average number of ordinary shares in issue throughout the relevant period, excluding ordinary shares purchased by the Company and held as treasury shares.
|
Restated |
|||
|
Six months to |
Six months to |
Year to |
|
|
30 November |
2 December |
1 June |
|
|
2008 |
2007 |
2008 |
|
|
Profit/(loss) attributable to equity shareholders (£000): |
|||
|
Continuing operations |
1,533 |
(85) |
446 |
|
Discontinued operations |
- |
(30) |
(1,186) |
|
---------- |
---------- |
--------- |
|
|
Total |
1,533 |
(115) |
(740) |
|
---------- |
---------- |
---------- |
|
|
Weighted average number of ordinary shares in issue (thousands) |
31,129 |
31,117 |
31,123 |
|
---------- |
---------- |
---------- |
|
|
Basic earnings/(loss) per share - continuing operations (pence per share) |
4.9 |
(0.3) |
1.4 |
|
====== |
====== |
====== |
|
|
Basic earnings/(loss) per share (pence per share) |
4.9 |
(0.4) |
(2.4) |
|
====== |
====== |
====== |
Diluted earnings/(loss) per share
The calculation of diluted earnings/(loss) per share has been based on profit/(loss) attributable to equity shareholders and the weighted average number of shares in issue throughout the period, adjusted for the dilution effect of share options outstanding at the period end.
|
Restated |
||||
|
Six months to |
Six months to |
Year to |
||
|
30 November |
2 December |
1 June |
||
|
2008 |
2007 |
2008 |
||
|
Profit/(loss) attributable to equity shareholders (£000): |
||||
|
Continuing operations |
1,533 |
(85) |
446 |
|
|
Discontinued operations |
- |
(30) |
(1,186) |
|
|
---------- |
---------- |
--------- |
||
|
Total |
1,533 |
(115) |
(740) |
|
|
---------- |
---------- |
---------- |
||
|
Weighted average number of ordinary shares in issue (thousands) |
31,129 |
31,117 |
31,123 |
|
|
Adjustment for share options (thousands) |
32 |
- |
- |
|
|
---------- |
---------- |
---------- |
||
|
Weighted average number of ordinary shares for diluted earnings per share (thousands) |
31,161 |
31,117 |
31,123 |
|
|
---------- |
---------- |
---------- |
||
|
Diluted earnings/(loss) per share - continuing operations (pence per share) |
4.9 |
(0.3) |
1.4 |
|
|
====== |
====== |
====== |
||
|
Diluted earnings/(loss) per share (pence per share) |
4.9 |
(0.4) |
(2.4) |
|
|
====== |
====== |
====== |
||
7. Reconciliation of profit/(loss) attributable to equity shareholders to net cash from operations
|
Six months to |
Six months to |
Year to |
|
|
30 November |
2 December |
1 June |
|
|
2008 |
2007 |
2008 |
|
|
£000 |
£000 |
£000 |
|
|
Operating profit - continuing operations |
3,799 |
599 |
2,552 |
|
Operating loss - discontinued operations |
- |
(56) |
(1,106) |
|
Depreciation of property, plant and equipment |
3,264 |
3,377 |
6,778 |
|
Impairment reversal on property, plant and equipment |
- |
- |
(52) |
|
Loss on disposal of property, plant and equipment |
- |
116 |
210 |
|
Profit on disposal of assets held for sale |
(36) |
- |
- |
|
Loss on disposal of goodwill |
- |
- |
922 |
|
Amortisation of capitalised development costs |
1,292 |
1,009 |
2,236 |
|
Amortisation of other intangibles |
592 |
372 |
753 |
|
Net fair value (gains)/losses on derivative financial instruments |
(171) |
61 |
421 |
|
Share-based payments |
56 |
79 |
135 |
|
Changes in working capital: |
|||
|
-(Increase)/decrease in inventories |
(550) |
(437) |
811 |
|
-Increase in trade and other receivables |
(2,392) |
(3,988) |
(847) |
|
-(Decrease)/increase in trade and other payables |
(1,271) |
1,393 |
480 |
|
-Decrease in provisions |
(750) |
(1,902) |
(2,196) |
|
---------- |
---------- |
---------- |
|
|
Cash generated from operations |
3,833 |
623 |
11,097 |
|
====== |
====== |
====== |
The cash outflow relating to exceptional items in the six months to 30 November 2008 was £649,000 (year to 1 June 2008: £3,734,000 and six months to 2 December 2007: £2,088,000).
8. Cash and cash equivalents
Cash and cash equivalents and bank overdrafts include the following for the purposes of the cash flow statement:
|
30 November |
2 December |
1 June |
|
|
2008 |
2007 |
2008 |
|
|
£000 |
£000 |
£000 |
|
|
Cash and cash equivalents |
7,861 |
6,722 |
7,723 |
|
Bank overdraft |
(1,821) |
(6,876) |
(2,779) |
|
---------- |
---------- |
---------- |
|
|
6,040 |
(154) |
4,944 |
|
|
====== |
====== |
====== |
9. Financial liabilities - borrowings
|
30 November |
2 December |
1 June |
|
|
2008 |
2007 |
2008 |
|
|
£000 |
£000 |
£000 |
|
|
Current |
|||
|
Bank overdraft |
1,821 |
6,876 |
2,779 |
|
Obligations under finance leases |
9 |
13 |
12 |
|
---------- |
---------- |
---------- |
|
|
1,830 |
6,889 |
2,791 |
|
|
---------- |
---------- |
---------- |
|
|
Non-current |
|||
|
Bank loans |
17,000 |
15,000 |
15,000 |
|
Obligations under finance leases |
- |
4 |
1 |
|
---------- |
---------- |
---------- |
|
|
17,000 |
15,004 |
15,001 |
|
|
---------- |
---------- |
---------- |
|
|
Total borrowings |
18,830 |
21,893 |
17,792 |
|
====== |
====== |
====== |
During the period to 30 November 2008, the Group increased its revolving credit facility to £20,000,000 and reduced its working capital facility to £5,000,000. These facilities are secured on UK assets. The seasonal facilities have been removed in favour of a higher revolving credit facility.
10. Other intangible assets
|
30 November |
2 December |
1 June |
|
|
2008 |
2007 |
2008 |
|
|
£000 |
£000 |
£000 |
|
|
Net book value at beginning of period |
6,059 |
4,963 |
4,963 |
|
Additions |
1,986 |
1,957 |
4,088 |
|
Exchange differences |
1 |
6 |
41 |
|
Disposals |
- |
- |
(44) |
|
Amortisation charge |
(1,883) |
(1,381) |
(2,989) |
|
---------- |
---------- |
---------- |
|
|
Net book value at end of period |
6,163 |
5,545 |
6,059 |
|
====== |
====== |
====== |
11. Property, plant and equipment
|
30 November |
2 December |
1 June |
|
|
2008 |
2007 |
2008 |
|
|
£000 |
£000 |
£000 |
|
|
Net book value at beginning of period |
26,422 |
27,986 |
27,986 |
|
Additions |
2,615 |
2,569 |
5,591 |
|
Exchange differences |
553 |
- |
295 |
|
Disposals |
(8) |
(125) |
(260) |
|
Charge for the period |
(3,264) |
(3,377) |
(6,778) |
|
Impairment reversal |
- |
- |
52 |
|
Reclassifications |
- |
- |
(464) |
|
---------- |
---------- |
---------- |
|
|
Net book value at end of period |
26,318 |
27,053 |
26,422 |
|
====== |
====== |
====== |
12. Provisions
|
Employee |
||||
|
Redundancy |
benefits |
Property |
Total |
|
|
£000 |
£000 |
£000 |
£000 |
|
|
As at 4 June 2007 |
1,556 |
888 |
2,064 |
4,508 |
|
Charged to the income statement |
415 |
44 |
35 |
494 |
|
Exchange differences |
29 |
28 |
(4) |
53 |
|
Utilised |
(1,657) |
(42) |
(724) |
(2,423) |
|
---------- |
---------- |
---------- |
---------- |
|
|
As at 2 December 2007 |
343 |
918 |
1,371 |
2,632 |
|
====== |
====== |
====== |
====== |
|
Employee |
||||
|
Redundancy |
benefits |
Property |
Total |
|
|
£000 |
£000 |
£000 |
£000 |
|
|
As at 4 June 2007 |
1,556 |
888 |
2,064 |
4,508 |
|
Charged/(credited) to the income statement |
1,164 |
(78) |
(101) |
985 |
|
Exchange differences |
46 |
81 |
33 |
160 |
|
Increase in provision - discount unwinding |
- |
- |
30 |
30 |
|
Utilised |
(2,344) |
(37) |
(830) |
(3,211) |
|
---------- |
---------- |
---------- |
---------- |
|
|
As at 1 June 2008 and 2 June 2008 |
422 |
854 |
1,196 |
2,472 |
|
(Credited)/charged to the income statement |
(16) |
17 |
(16) |
(15) |
|
Exchange differences |
7 |
23 |
37 |
67 |
|
Utilised |
(294) |
(16) |
(403) |
(713) |
|
---------- |
---------- |
---------- |
---------- |
|
|
As at 30 November 2008 |
119 |
878 |
814 |
1,811 |
|
====== |
====== |
====== |
====== |
13. Seasonality
The Group's monthly sales profile demonstrates an element of seasonality around the Christmas period. This impacts sales in the months of September and December.
14. Related-party transactions
There were no material related-party transactions during the period.
15. Exceptional items
The exceptional item relates to the cost reduction programme announced in May 2007. As part of this programme, in the six months to 2 December 2007, £42,000 was incurred in closing loss making Hobby centres, £356,000 in rationalising the manufacturing and supply chain and £163,000 in simplifying the support infrastructure. There are no exceptional items in the six months to 30 November 2008.
|
Restated |
Restated |
||
|
Restated |
Continuing |
Six months to |
|
|
Continuing |
exceptional |
2 December |
|
|
pre-exceptional |
items |
2007 |
|
|
£000 |
£000 |
£000 |
|
|
Revenue |
53,908 |
- |
53,908 |
|
Cost of sales |
(16,125) |
(261) |
(16,386) |
|
---------- |
--------- |
---------- |
|
|
Gross profit |
37,783 |
(261) |
37,522 |
|
Operating expenses |
(37,293) |
(300) |
(37,593) |
|
Other operating income-royalties receivable |
670 |
- |
670 |
|
---------- |
--------- |
---------- |
|
|
Operating profit/(loss) |
1,160 |
(561) |
599 |
|
====== |
====== |
====== |
|
Continuing |
Year to |
||
|
Continuing |
exceptional |
1 June |
|
|
pre-exceptional |
items |
2008 |
|
|
£000 |
£000 |
£000 |
|
|
Revenue |
110,345 |
- |
110,345 |
|
Cost of sales |
(32,896) |
(835) |
(33,731) |
|
---------- |
--------- |
---------- |
|
|
Gross profit |
77,449 |
(835) |
76,614 |
|
Operating expenses |
(74,268) |
(1,530) |
(75,798) |
|
Other operating income-royalties receivable |
1,736 |
- |
1,736 |
|
---------- |
--------- |
---------- |
|
|
Operating profit/(loss) |
4,917 |
(2,365) |
2,552 |
|
====== |
====== |
====== |
16. Consolidated statement of changes in shareholders' equity
|
Other |
reserves |
Retained |
earnings |
|||||||||||
|
Called |
Share |
Capital |
||||||||||||
|
up share |
premium |
redemption |
Translation |
Other |
Hedging |
Treasury |
Profit and |
Total |
||||||
|
capital |
account |
reserve |
reserve |
reserve |
reserve |
shares |
loss |
equity |
||||||
|
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
||||||
|
As at 4 June 2007 |
1,556 |
7,822 |
101 |
(261) |
(1,050) |
(62) |
(49) |
21,800 |
29,857 |
|||||
|
Exchange adjustments |
- |
- |
- |
107 |
- |
- |
- |
- |
107 |
|||||
|
Loss for the period |
- |
- |
- |
- |
- |
- |
- |
(115) |
(115) |
|||||
|
Shares vested |
- |
- |
- |
- |
- |
- |
49 |
(49) |
- |
|||||
|
Share-based payments |
- |
- |
- |
- |
- |
- |
- |
79 |
79 |
|||||
|
Deferred tax |
- |
- |
- |
- |
- |
52 |
- |
- |
52 |
|||||
|
Cash flow hedges: |
||||||||||||||
|
- fair value losses in the period |
- |
- |
- |
- |
- |
(219) |
- |
- |
(219) |
|||||
|
- transferred to net profit |
- |
- |
- |
- |
- |
29 |
- |
- |
29 |
|||||
|
--------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
--------- |
||||||
|
As at 2 December 2007 |
1,556 |
7,822 |
101 |
(154) |
(1,050) |
(200) |
- |
21,715 |
29,790 |
|||||
|
====== |
====== |
====== |
====== |
====== |
====== |
====== |
======= |
====== |
||||||
|
Other |
reserves |
Retained |
earnings |
|||||||||||
|
Called |
Share |
Capital |
||||||||||||
|
up share |
premium |
redemption |
Translation |
Other |
Hedging |
Treasury |
Profit and |
Total |
||||||
|
capital |
account |
reserve |
reserve |
reserve |
reserve |
shares |
loss |
equity |
||||||
|
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
||||||
|
As at 4 June 2007 |
1,556 |
7,822 |
101 |
(261) |
(1,050) |
(62) |
(49) |
21,800 |
29,857 |
|||||
|
Exchange adjustments |
- |
- |
- |
1,626 |
- |
- |
- |
- |
1,626 |
|||||
|
Loss for the year |
- |
- |
- |
- |
- |
- |
- |
(740) |
(740) |
|||||
|
Net investment hedge |
- |
- |
- |
(737) |
- |
- |
- |
- |
(737) |
|||||
|
Share-based payments |
- |
- |
- |
- |
- |
- |
- |
135 |
135 |
|||||
|
Shares vested |
- |
- |
- |
- |
- |
- |
49 |
(49) |
- |
|||||
|
Deferred tax |
- |
- |
- |
- |
- |
237 |
- |
- |
237 |
|||||
|
Cash flow hedges: |
||||||||||||||
|
- fair value losses in the period |
- |
- |
- |
- |
- |
(940) |
- |
- |
(940) |
|||||
|
- transferred to net profit |
- |
- |
- |
- |
- |
88 |
- |
- |
88 |
|||||
|
--------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
--------- |
||||||
|
As at 1 June 2008 and 2 June 2008 |
1,556 |
7,822 |
101 |
628 |
(1,050) |
(677) |
- |
21,146 |
29,526 |
|||||
|
Exchange adjustments |
- |
- |
- |
2,161 |
- |
- |
- |
- |
2,161 |
|||||
|
Net investment hedge |
- |
- |
- |
(276) |
- |
- |
- |
- |
(276) |
|||||
|
Profit for the period |
- |
- |
- |
- |
- |
- |
- |
1,533 |
1,533 |
|||||
|
Share-based payments |
- |
- |
- |
- |
- |
- |
- |
56 |
56 |
|||||
|
Deferred tax |
- |
- |
- |
- |
- |
(161) |
- |
- |
(161) |
|||||
|
Cash flow hedges: |
||||||||||||||
|
- fair value losses in the period |
- |
- |
- |
- |
- |
(246) |
- |
- |
(246) |
|||||
|
- transferred to net profit |
- |
- |
- |
- |
- |
821 |
- |
- |
821 |
|||||
|
--------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
--------- |
||||||
|
As at 30 November 2008 |
1,556 |
7,822 |
101 |
2,513 |
(1,050) |
(263) |
- |
22,735 |
33,414 |
|||||
|
====== |
====== |
====== |
====== |
====== |
====== |
====== |
======= |
====== |
||||||
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