6th Sep 2005 09:44
Ideal Shopping Direct PLC06 September 2005 The following replaces the Interim Results announcement released today at 7.00amunder RNS number 8560Q. The interim dividend in the column for June 2005 underthe headline 'First half profits reflect major scale benefits from 53% salesrise' was stated as 10.p in error. The correct figure is 1.0p. The rest of theannouncement remains unchanged and is reproduced in full below. Ideal Shopping Direct Plc (the "Company") 6th September 2005 Interim results for the 26 weeks to 30 June 2005 First half profits reflect major scale benefits from 53% sales rise June 2005 June 2004 % Change FY 2004Turnover £36.977m £24.067m +53% £60.382m Operating Profit £ 3.467m £ 0.771m +350% £ 4.109mProfit before tax £ 3.660m £ 0.684m +435% £ 4.105m EPS 8.8p 1.6p 9.4pNet cash £17.078m £ 9.324m £14.517mInterim dividend 1.0p Nil 1.0p • First half trading has continued to show a strong improvement against last year • Turnover up 53.6%, again benefiting from first-time Freeview contribution • Sales since the Freeview anniversary (April 23rd) also up on like-for-like basis • Company continues to show improvements in its operational gearing • Net profits therefore reflect significant scale benefits of higher turnover • First half pre-tax profits at £3.7m compare with last year's £0.7m • Company is strongly cash generative: end June net cash £17.0m vs.Dec 04 £14.5m. • Interim net dividend of 1.0 pence • Paul Wright moves to Deputy Chairman to concentrate on new business development • Andrew Fryatt appointed Chief Executive with immediate effect. • Mike Camp joins as Finance Director. • Fourth TV shopping channel - Jewellery Vault - launched on July 1st Jim Hodkinson, Chairman, commented: "This excellent performance underlines the considerable benefits of thesignificant growth generated over the last year, but it also reflects ourefforts to improve the business and its management at every level. Trading inthe first eight weeks of the second half to date has continued strongly, despitea challenging and highly competitive trading environment. While we remain alertto the possibility of a slowing pattern of spending, the Board looks forward toreporting further good progress for the full year." Enquiries: Ideal Shopping Direct Plc: Tel: 08700 780 704Jim Hodkinson ChairmanAndrew Fryatt Chief Executive Reputation Inc: Tel: 020 7758 2800Tom Wyatt CHAIRMAN'S STATEMENT I am delighted to report that trading has continued to show a strong improvementin the six months to 30 June 2005. Sales have again benefited from a first-timecontribution from our Freeview channel, and from further year-on-year growthfrom other activities, including our core Ideal World channel. Whilst thebusiness has continued to grow rapidly, costs have been managed such thatprofitability has increased significantly over the equivalent period of 2004. The first half of 2005 saw a total profit of £3.7 million compared with a profitof £0.7 million in the corresponding period of 2004. This profit performance hashad a strong impact on the balance sheet, which shows an improved cash and shortterm deposit position. We ended the half year with net funds of £13.4 million,compared with £10.3 million at the end of 2004, and £4.6 million at the end ofJune 2004. This excellent performance underlines the continuing improvements over the lastyear in every area of the business, and the substantial progress made indeveloping promising new areas of activity. At the same time, we have investedin the strengthening of systems and management. Review of Trading Turnover was £37.0 million - an increase of 53.6% when compared to the £24.1million achieved in the same period last year. A significant element of thisincrease reflects the additional contribution from our Freeview channel, whichlaunched on 23 April 2004. The continuing growth in the number of householdswith access to Freeview has outstripped the growth of Sky, and helped usmaintain further year-on-year growth in the period following the anniversary ofthe Freeview launch. Our main channel, Ideal World, grew by 47.0% in the half year, including asubstantial increase in web sales as a result of relaunching the Ideal Worldwebsite in April 2005. Our niche market channels, Create and Craft and Ideal Vitality, have alsobenefited from our continuing investment and innovative new developments. Inparticular, our transactional websites have ensured that our web-based businessfor both channels has grown significantly, and we are continuing to promote theinternet as a valuable complementary sales vehicle. Create and Craft has shown particularly good progress, doubling sales comparedwith the same period last year. In April 2005 we launched the Create and CraftClub, which features an online interactive magazine and promotes our widercatalogue of speciality craft merchandise. Ideal Vitality has a new dedicatedmanagement team and, with the benefit of our experience of selling health andbeauty products via our main Ideal World channel, we are making good progress indetermining what sells well to this specialised audience. Administration and distribution costs as a proportion of sales have fallen from41.6% to 33.5%, showing the benefits of our rapid growth in scale over the lasteighteen months. Total operating costs increased from £10.0 million to £12.4million - the increase of 23.9% reflecting the costs of Freeview and increasedstaffing levels to support the continued growth in order levels and thestrengthening of our buying team. Our reported gross margin performance has been affected by the reclassificationof royalty costs payable to Freeview. Underlying product margin improved by0.5% points in the period, but after including royalty charges and other income,reported gross margin was 42.9% compared with 44.8% in 2004. Operating profit was £3.5 million, compared with £0.8 million in 2004. Profitbefore tax for the six months to 30 June 2005 was £3.7 million, against 2004's£0.7 million. Basic earnings per share increased from 1.6p to 8.8p in 2005. We are continuing with our progressive dividend policy and announcing an interimdividend of 1.0 pence per share. This will be paid on 12th October 2005 toshareholders on the register as at 16 September 2005. Management Changes I am pleased to announce that Andrew Fryatt has been appointed Chief Executiveof the company with immediate effect. Andrew joined us as Chief OperatingOfficer almost a year ago, allowing Paul Wright to focus more fully on thefuture and on the specific task of developing our exciting new businessopportunities. Andrew has demonstrated excellent leadership qualities over the last year andhas shown that he has the ability to continue to manage a fast growing businessas we face new challenges in the years ahead. Paul will become Deputy Chairman and will remain an executive director, withspecific responsibility for developing our new business initiatives. Over thelast few months, Paul has already been able to strengthen our position as one ofthe most innovative operators in the sector. His entrepreneurial flair andintuitive understanding of the TV shopping market are a vital asset which haskept us at the leading edge of the industry since he founded the business morethan twenty years ago. I am also pleased to announce the appointment of Mike Camp as Finance Director,with effect from September 19th. Mike joins us from the RAC, where he wasFinance Director of the Consumer Division, following a number of years at BookerPlc. I am confident that Mike will play a vital role in managing the businessthrough the next stage of its growth. On the 4th May 2005 Valerie Kaye stood down as an executive director to become anon-executive member of the Board, and I would like to thank Val for herdedication and commitment through the last few years, in particular in bringingIdeal Shopping Direct back from the fire of 2001. We look forward to hercontinuing strategic input in her new non executive role. Current Trading and Future Prospects The UK retail sector remains challenging and highly competitive. Against thisbackground, it would be prudent to expect that the retail market will remaindifficult, with significant discounting continuing to be the norm. Although TVshopping is slightly removed from the High Street, we should not assume that weare immune from the general economic situation. Nonetheless, trading in the first eight weeks of the second half has continuedstrongly, with sales in line with our expectations. On 1 July 2005 we opened a fourth TV shopping channel- Jewellery Vault. Thechannel is dedicated to the sale of jewellery via an auction. The channelbroadcasts 8 hours live per day on Sky Digital Satellite Channel 638. Althoughthe channel has only been operating for a few weeks, we are confident of itssuccess. We have an excellent multi channel business, an extremely able senior managementteam, strong finances and a robust strategy. This gives me great confidence inthe ability of Ideal Shopping Direct Plc to continue to deliver excellentresults and I look forward to reporting further good progress for the full year. Jim HodkinsonChairman 6 September 2005 Consolidated Profit and Loss Accounts Six months Six months Year to to to 31 December 30 June 2005 30 June 2004 2004 £'000 £'000 £'000 (unaudited) (unaudited) (audited) Turnover 36,977 24,067 60,382Cost of sales (21,114) (13,290) (34,113) Gross profit 15,863 10,777 26,269Administration and distribution costs (12,396) (10,006) (22,160) Operating profit 3,467 771 4,109 Net interest 193 (87) (4) Profit on ordinary activities 3,660 684 4,105Tax on profit on ordinary activities (1,098) (204) (1,349) Profit for the financial period 2,562 480 2,756 Dividends (292) - (292) Retained profit 2,562 480 2,464 Basic profit per share 8.8p 1.6p 9.4pDiluted profit per share 8.6p 1.6p 9.3p There were no recognised gains or losses other than the profits of the sixmonths ended 30 June 2005 Consolidated Balance Sheets 30 June 2005 30 June 2004 31 December 2004 £'000 £'000 £'000 (Unaudited) (Unaudited) (Audited) Fixed assets Tangible assets 7,784 8,387 7,908 Current assets Stocks 6,051 4,470 3,829Debtors: amounts falling due within one year 1,184 1,253 1,354Debtors: amounts falling due after more than one year - 1,394 -Current asset investment - Treasury Deposit 10,000 - -Cash 7,078 9,324 14,517 24,313 16,441 19,700 Creditors: amounts falling due within one year (16,454) (12,731) (13,941) Net current assets 7,859 3,710 5,759 Total assets less current liabilities 15,643 12,097 13,667 Creditors: amounts falling due after more thanone year (3,038) (3,797) (3,367) Provisions for liabilities and charges (773) (799) (794) Net assets 11,832 7,501 9,506 Capital and reserves Called up share capital 883 881 882Share premium account 139 64 84Special reserve - 5,709 -Profit and loss account 10,810 847 8,540 Shareholders' funds 11,832 7,501 9,506 Consolidated Cash Flow Statements Six months to Six months to Year to 30 June 2005 30 June 2004 31 December 2004 £'000 £'000 £'000 (Unaudited) (Unaudited) (Audited) Net cash inflow from operating activities 3,495 3,394 9,225 Returns on investments and servicing of finance Interest received 245 81 236Interest paid (22) (103) (103)Finance lease interest paid (30) (65) (137) Net cash inflow/(outflow) from returns oninvestments and servicing of finance 193 (87) (4) Capital expenditure Purchase of tangible fixed assets (372) (132) (231) Net cash outflow from capital expenditure (372) (132) (231) Financing New finance lease - 119 -Issue of shares 56 - 21Receipts from borrowings - 212 212Repayment of borrowings (169) (66) (235)Capital element of finance lease payments (350) (463) (818) Net cash outflow from financing (463) (198) (820) Equity Dividend Paid (292) Management of liquid resources Purchase of short term deposits (10,000) - - (Decrease)/Increase in cash (7,439) 2,977 8,170 The Company generated £2.56 million (2004 £2.98 million) of cash during the sixmonth period to 30 June 2005. At the period end this is represented by cash of£7.08 million (2004 £9.32 million) and short term treasury deposits of £10million (2004 Nil). Short term treasury deposits are classified separately asper Financial Reporting Standard 1. Notes to the Interim Informationfor the six months ended 30 June 2005 1. Basis of preparation The interim financial information has been prepared on the basis of theaccounting policies set out in the company's 2004 statutory financialstatements. The financial information set out above does not constitute the company'sfinancial statements for the year ended 31 December 2004. The statutoryfinancial statements for the year ended 31 December 2004 have been delivered tothe Registrar of Companies and the auditors' report on those financialstatements was unqualified and did not contain statements under Section 240 ofthe Companies Act 1985. The financial statements for the six months ended 30June 2005 and 30 June 2004 are unaudited. 2. Earnings per ordinary share The calculation of the basic earnings per share is based on the profitsattributable to ordinary shareholders divided by the weighted average number ofshares in issue during the period. Profits attributable to ordinary Weighted average number of Basic earnings per share amount shareholders shares in pence Six months ended 30 June 2005 £2,562,000 29,276,043 8.8p Six months ended 30 June 2004 £480,000 29,200,570 1.6p Year ended 31 December 2004 £2,756,000 29,203,449 9.4p During the period ended 30 June 2005, options existed which had the dilutiveeffect of increasing the weighted average number of shares by 667,103 to29,943,146. The diluted profit per share for the period ended 30 June 2005 was8.6p. During the year ended 30 June 2004, options existed which had the dilutiveeffect of increasing the weighted average number of shares by 428,847 to29,629,417. The diluted profit per share for the period ended 30 June 2003 was1.6p. During the period ended 31 December 2004 options existed which had the dilutiveeffect of increasing the weighted average number of shares by 379,884 to29,583,333. The diluted profit per share for the year ended 31 December 2004was 9.3p. 3. Reconciliation of movements in shareholders funds Six months to Six months to Year to 31 30 June 2005 30 June 2004 December 2004 £'000 £'000 £'000 Profit in the period 2,562 480 2,756Dividends (292) - (292) 2,270 480 2,464Issue of shares in the period 56 - 21Net increase in shareholders' funds 2,326 480 2,485Shareholders' funds at start of period 9,506 7,021 7,021Shareholders' funds at end of period 11,832 7,501 9,506 4. Net cash inflow from operating activities Six months to Six months to Year to 31 30 June 30 June December 2005 2004 2004 £'000 £'000 £'000 Operating profit 3,467 771 4,109Depreciation 496 627 1,326(Increase)/decrease in stocks (2,222) (170) 581(Increase)/decrease in debtors (108) (4) 43Increase in creditors 1,862 2,170 3,166Net cash inflow from operating activities 3,495 3,394 9,225 5. Reconciliation of net cash flow to movement in net funds Six months to 30 Six months to Year to 31 June 2005 30 June 2004 December 2004 £'000 £'000 £'000 (Decrease)/Increase in cash in the period (7,439) 2,977 8,170Cash outflow/(inflow) from financing 169 (146) 23Cash outflow from finance leases 350 463 818Cash outflow from Treasury Deposits 10,000 - -Change in net funds resulting from cash flows 3,080 3,294 9,011Inception of finance leases - (119) (119)Movement in net funds in the period 3,080 3,175 8,892Net funds at start of period 10,324 1,432 1,432Net funds at end of period 13,404 4,607 10,324 6. Analysis of changes in net funds At 1 January Cash At 30 June 2005 flow 2005 £'000 £'000 £'000 Cash in hand and at bank 14,517 (7,439) 7,078Debt (3,218) 169 (3,049)Finance leases (975) 350 (625)Treasury Deposits - 10,000 10,000 10,324 3,080 13,404 7. Distribution This statement will be sent to all shareholders and can be obtained from thecompany's registered office: Ideal Home House, Newark Road, Peterborough PE15WG. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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