Interim Results

22nd Dec 2008 08:30



22 December 2008

THEO FENNELL PLC

("Theo Fennell" or "the Group")

Interim Results for the six months ended 30 September 2008

Theo Fennell PLC the international, luxury jeweller announces Interim Results for the six months ended 30 September 2008.

HIGHLIGHTS:

Turnover down 20% at £10.2m (2007: £12.8m)

Loss of £840,000 (pre-tax profit 2007: £434k) reflecting first half investment programme

Opened new concession in Brown Thomas, Dublin in November 2008

Building on established international base with two new standalone openings planned in Emirates Towers, Dubai and in Kuwait City

Talks continuing with third party investor

Richard Northcott, Chairman commented: 

"As we mentioned in our October trading update, sales have been significantly impacted by the current recession and trading has been difficult. This is immensely frustrating given the initiatives we had planned, but given the downturn in consumer spending further expansion plans are being reviewed.

The fundamentals of our business remain; our unique, design-led jewellery makes the Theo Fennell brand stand apart and allows it to compete comfortably with other major international brands in all key markets. We expect next year to be difficult but are taking the necessary actions across all areas of the business to reduce our investment programme and cost base to ensure it is correctly positioned as consumer confidence returns."

22 December 2008

Enquiries:
Theo Fennell Plc Richard Northcott	Tel: 020 7591 5000
Pelham PR James Henderson Kate Catchpole	Tel: 020 7743 6678
Seymour Pierce Limited Mark Percy	Tel: 020 7107 8000

CHAIRMAN'S STATEMENT

Overview

The Company experienced difficult trading in the first half; impacted by the downturn in consumer confidence. Until this point, Theo Fennell PLC had experienced sustained growth year-on-year; led by the demand for design-led pieces that make Theo Fennell unique. The Company has continued to be active in overseas markets; most recently Dublin and the Middle East.

Financial 

Trading has been difficult as consumers become more cautious in the current economic climate. Sales decreased 20% on the same period last year to £10.2 million (2007: £12.8 million). The Company made a loss of £840,000 compared to a first half profit for the same period last year of £434,000. This was partly due to the Company's heavy first half investment programme of expansion into Dublin and other overseas markets.

Operational

In November, the Company opened a concession in the fine jewellery and watch hall in Brown Thomas, Dublin; the premier Irish department store. The Company also won the contracts to operate the luxury watch and fine jewellery counters in the same room. The Company's Middle East partners expect to open a new standalone Theo Fennell store in Emirates Towers, Dubai and in Kuwait City in 2009 as well as smaller concessions in Jeddah Saudi Arabia and Qatar. The Company continues to operate and explore further opportunities in the former Soviet Union States.

Third party investment 

Talks with the third party interested in making a significant investment by investing through the subscription of new equity in the Company in order to fulfil our expansion plans are continuing. Progress has been slower than anticipated due to the current economic environment, but will continue in the New Year although there is still no guarantee a transaction will complete.

Outlook

Theo Fennell PLC has been affected by the economic downturn. Our key challenge is to ensure the business is correctly positioned for when consumer confidence returns and the board are taking steps to ensure overheads are appropriate to the current trading environment. We still believe in the significant potential for the future growth of the business and when confidence does return, believe the Company is well placed to capitalise on this, maintain its market position and continue to develop Theo Fennell into a major, luxury brand. 

Richard Northcott

Chairman

 Profit and Loss Account (Unaudited) for the six months ended 30 September 2008

	Six months ended 30 September 2008 £		Six months ended 30 September 2007 £		Year ended 31 March 2008 £
Turnover	10,203,354		12,808,456		28,065,078
Cost of sales	(9,990,065)		(11,459,380)		(23,986,310)
Gross profit	213,289		1,349,076		4,078,768
Administrative expenses Exceptional administrative expenses	(1,061,023) -		(928,763) -		(2,201,045) (500,600)
Operating (loss) / profit	(847,734)		420,313		1,377,123
Net interest receivable	7,460		13,973		25,350
(Loss) / Profit on ordinary activities before taxation	(840,274)		434,286		1,402,473
Tax on (loss) / profit on ordinary activities	268,887		(138,972)		(432,853)
(Loss) / Profit for the financial period	(571,387)		295,314		969,620
Basic (loss) / earningsper share	(3.04p)		1.59p		5.21p
Diluted (loss) / earningsper share	(2.76p)		1.45p		4.74p

  Balance Sheet (Unaudited) as at 30 September 2008

	As at 30 September 2008 £		As at 30 September 2007 £		As at 31 March 2008 £
Fixed AssetsTangible assets	715,827		734,176		737,907
Current assets Stocks Debtors Cash at bank and in hand	11,421,857 2,205,013 13,471		10,835,275 4,194,371 11,989		10,053,293 2,408,794 958,008
	13,640,341		15,041,635		13,420,095
Creditors: amounts falling  due within one year	(4,552,797)		(6,343,179)		(4,046,526)
Net current assets	9,087,544		8,698,456		9,373,569
Total assets less current liabilities	9,803,371		9,432,632		10,111,476
Creditors: amounts falling  due after one year Convertible loan note Other	(300,000) (125,903)		- (256,345)		-  (187,622)
Net assets	9,377,468		9,176,287		9,923,854
Capital and reservesCalled up share capital Share premium account Profit and loss account Share Options Reserve	940,533 4,572,858 3,809,076 55,001		930,533 4,507,857 3,706,157 31,740		935,533 4,552,857 4,380,463 55,001
Shareholders' funds	9,377,468		9,176,287		9,923,854

  Cash Flow Statement (Unaudited) for the six months ended 30 September 2008

	Six months ended 30 September 2008 £		Six months ended 30 September 2007 £		Year ended 31 March 2008 £
Net cash (outflow) / inflow from operating activities	(1,281,691)		(398,179)		1,940,513
Returns on investment and servicing of finance Net interest received	5,761		11,060		25,350
Taxation Corporation tax paid/repayment	-		140,138		140,139
Capital expenditure Purchase of fixed assets	(154,332)		(282,746)		(482,281)
Net cash (outflow)/inflow before financing	(1,430,262)		(529,727)		1,623,721
Financing Issue of Share Options Capital element of hire  purchase agreements Bank loan repayments Bank loan	25,000 (4,021) (55,040) -		750 (16,043) (62,035) 350,000		79,665 (19,848) (146,846) 350,000
(Decrease) / Increase in cash	(1,464,323)		(257,055)		1,886,692

  Notes

	Six months ended 30 September 2008 £		Six months ended 30 September 2007 £		Year ended 31 March 2008 £
(Loss) / Profit for the financial year	(571,387)		295,314		969,620
Effect of convertible loan note	14,700		10,617		14,700
Adjusted (loss)/profit for dilutive earnings per share	(556,687)		305,931		984,320
Weighted average number of ordinary shares	18,793,995		18,553,980		18,607,508
Effect of dilutive share options	339,359		1,155,834		1,143,119
Effect of convertible loan note	1,000,000		1,388,888		1,027,777
Adjusted weighted average number of ordinary shares	20,133,354		21,098,702		20,778,404
(Loss) / Earnings per share - basic	(3.04p)		1.59p		5.21p
(Loss) / Earnings per share - diluted	(2.76p)		1.45p		4.74p

 

4. Cash flow from operating activities:

	Six months ended 30 September 2008£	Six months ended 30 September 2007£	Yearended 31 March2008£
Operating (loss) / profit	(847,734)	420,313	1,377,123
Depreciation charges	(176,412)	190,534	386,338
Increase in stocks	(1,368,564)	(1,810,652)	(1,028,670)
Decrease in debtors	203,781	176,719	2,105,204
Increase / (Decrease) in creditors	554,414	624,907	(899,482)
Net cash (outflow) / inflow from operating activities	(1,281,691)	(398,179)	1,940,513

 

5. A copy of the interim statement will be posted to shareholders and made available to the public at the Company's Registered Office, 2b Pond Place, London SW3 6TF for one month from the date thereof.

6. No interim dividend is declared on the ordinary shares.

ENDIR UKRBRWVRUAAA

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