18th Dec 2009 07:00
THEO FENNELL PLC
("Theo Fennell" or "the Group")
Interim Results for the six months ended 30 September 2009 and trading update
Theo Fennell PLC the international, luxury jeweller announces Interim Results for the six months ended 30 September 2009.
HIGHLIGHTS:
| Financial performance for first half in line with expectations: Turnover down 20% on a like for like basis at £4.3m (2008: £5.4m) Loss before taxation of £1,075,000 (2008: loss £840,000) |
| Turnaround strategy following return of Theo Fennell and Barbara Snoad and appointment half way through first half of new Board in June 2009 underway and delivering improved performance: Retail sales for October and November up 38% versus the prior year New collections exceeding expectations and receiving Celebrity endorsement New wholesale partner in Moscow appointed with store opening December 2009 Additional outlet opening at The Crane in Barbados |
| Strong start to Christmas trading - sales for the first two weeks of December up 39% on like-for-like basis Exploring options to raise further funds via an equity placing in 2010 |
Rupert Hambro, Chairman commented:
Your board is pleased by the amount of work completed since we took management control of the Company and is confident that the first steps have been made to return the Company to long term profitability. Although sales for the initial period of trading in the key Christmas trading have been very encouraging the final weeks to the 24 December remain vitally important. We continue to believe in the significant potential for the future growth of the business.
18 December 2009
|
Enquiries: |
|
|
Theo Fennell Plc Barbara Snoad |
Tel: 020 7591 5000 |
|
Pelham PR James Henderson Kate Catchpole |
Tel: 020 7337 1512 |
|
Seymour Pierce Limited Mark Percy Catherine Leftley |
Tel: 020 7107 8000 |
CHAIRMAN'S STATEMENT
Overview
I write this report about your company's trading results for the six months to 30 September 2009. The Company experienced difficult trading in the first half; impacted by the adverse and uncertain trading conditions and the difficult position the Company was in at the beginning of this financial year due to the previous management team.
As has been announced, there have been significant changes to the board during this period. Theo Fennell did not return to the board until June 2009 at the same time I became Chairman and Alasdair Hadden-Paton became Deputy Chairman. Barbara Snoad returned as Chief Executive in May 2009. Together we have begun to implement a new strategy compatible with the design-led ethos and core jewellery business which had been very successful in the past and which we believe will lead to a turnaround of the business in the medium term.
Financial
Trading in the first six months of the year continued to be difficult as consumers remained cautious in the current economic financial climate and the implementation of the new management team's turnaround strategy did not commence until August. Sales decreased in the first six months on a like for like basis by 20% to £4.3 million. The Company made a loss before taxation of £1,075,000 compared to a first half loss for the same period last year of £840,000.
Operational
Theo's return to the business as Creative Director, with responsibility for all creative aspects of the Company, has provided the Company with the direction missing in the last year.
This new creative impetus has enabled the Company to ensure we have an exciting selection of new one-off products, collections and unique silver pieces for the key Christmas selling period. In addition, the first new collection for two years, PHI, with new collections and ranges following fast behind, was launched in September and this we hope will lay the foundations for an improved second half and the turnaround in the Company's fortunes.
Consequently, we have seen a very positive improvement in sales in the first two months of the second half compared with the first two months of the second half last year with like for like retail sales up 38% in the period from 1 October to 30 November.
We therefore believe we are well positioned for the key Christmas trading period.
International
As reported to you in September, the Company has had a number of positive discussions with both new and existing wholesale partners. We are very pleased to report that we have secured a new wholesale partner in Moscow and will be opening on Moscow's premium shopping street, Stoleshnikov Street, in December 2009 and an additional outlet is to open at The Crane in Barbados. We continue to explore opportunities with a number of new partners in key International markets and are hopeful of securing additional distribution outlets in the near future.
The Original Design Partnership
We continue to strengthen our relationship with Theo's new design business the Original Design Partnership ("ODP"). A new collaboration agreement has been signed between the two companies. The ODP has a contractual arrangement with the Company to provide design services to develop new products. It remains your Board's intention to acquire a minority interest in ODP to provide fresh investment capital for the ODP.
We have agreed a new contract with Theo Fennell that confirms Theo as Creative Director and ensures that he will commit the significant majority of his time focused on the development of the Theo Fennell business. As part of this agreement we have formalised the use by the Company of the Theo Fennell name.
Fund Raising
The board is exploring options to raise further funds via an equity placing in 2010 to ensure the Company has the resources to implement its strategy and to accelerate the growth of the business and establish Theo Fennell PLC as a unique International luxury niche business.
Outlook
Your board is pleased by the amount of work completed since we took management control of the Company and is confident that the first steps have been made to return the Company to long term profitability. Although sales for the initial period of trading in the key Christmas period have been very encouraging the final weeks to the 24 December remain vitally important. We continue to believe in the significant potential for the future growth of the business.
Rupert Hambro
Chairman
18 December 2009
Profit and Loss Account (Unaudited) for the six months ended 30 September 2009
|
Six months ended 30 September 2009 £ |
Six months ended 30 September 2008 £ |
Year ended 31 March 2009 £ |
||||
|
Turnover Continuing operations Discontinued operations |
4,324,761 - |
5,411,404 4,791,950 |
11,885,938 9,936,410 |
|||
|
Total turnover |
4,324,761 |
10,203,354 |
21,822,348 |
|||
|
Cost of sales Exceptional cost of sales |
(4,581,463) - |
(9,990,065) - |
(21,507,904 (1,063,358 |
) ) |
||
|
Total cost of sales |
(4,581,463 |
) |
(9,990,065 |
) |
(22,571,262 |
) |
|
Gross (loss) / profit |
(256,702 |
) |
213,289 |
(748,914 |
) |
|
|
Administrative expenses Exceptional administrative expenses |
(719,888 (55,000 |
) ) |
(1,061,023 - |
) |
(2,310,646 (248,700 |
) ) |
|
Total administrative expenses |
(774,888 |
) |
(1,061,023 |
) |
(2,559,346 |
) |
|
Operating loss Continuing operations Discontinued operations |
(1,031,590) - |
(955,689) 107,955 |
(2,463,057 (845,203 |
) ) |
||
|
Total operating loss |
(1,031,590 |
) |
(847,734 |
) |
(3,308,260 |
) |
|
Net interest (payable)/receivable |
(43,454 |
) |
7,460 |
(32,868 |
) |
|
|
Loss on ordinary activities before taxation |
(1,075,044 |
) |
(840,274 |
) |
(3,341,128 |
) |
|
Tax on loss on ordinary activities |
- |
268,887 |
391,394 |
|||
|
Retained loss for the financial period |
(1,075,044 |
) |
(571,387) |
(2,949,734 |
) |
|
|
Basic loss per share |
(5.72 |
)p |
(3.04) |
p |
(15.70) |
p |
|
Diluted loss per share |
(5.39 |
)p |
(2.80) |
p |
(15.70) |
p |
|
Basic loss per share from continuing operations |
(5.72 |
)p |
(3.62 |
)p |
(11.20) |
p |
|
Diluted loss per share from continuing operations |
(5.39 |
)p |
(3.30 |
)p |
(11.20) |
p |
Balance Sheet (Unaudited) as at 30 September 2009
|
As at 30 September 2009 £ |
As at 30 September 2008 £ |
As at 31 March 2009 £ |
||||
|
Fixed assetsTangible assets |
484,843 |
715,827 |
594,829 |
|||
|
Current assets Stocks Debtors Cash at bank and in hand |
7,643,646 833,421 916,381 |
11,421,857 2,205,013 13,471 |
8,506,093 1,295,645 1,418,330 |
|||
|
9,393,448 |
13,640,341 |
11,220,068 |
||||
|
Creditors: amounts falling due within one year |
(2,154,214 |
) |
(4,552,797 |
) |
(2,951,860 |
) |
|
Net current assets |
7,239,234 |
9,087,544 |
8,268,208 |
|||
|
Total assets less current liabilities |
7,724,077 |
9,803,371 |
8,863,037 |
|||
|
Creditors: amounts falling due after one year Convertible loan note Other |
(300,000 (1,500,000 |
) ) |
(300,000 (125,903 |
) ) |
(300,000 (1,563,917 |
) ) |
|
Net assets |
5,924,077 |
9,377,468 |
6,999,120 |
|||
|
Capital and reservesCalled up share capital Share premium account Profit and loss account Share options reserve |
940,533 4,572,857 376,763 33,924 |
940,533 4,572,857 3,809,077 55,001 |
940,533 4,572,857 1,451,806 33,924 |
|||
|
Shareholders' funds |
5,924,077 |
9,377,468 |
6,999,120 |
Cash Flow Statement (Unaudited) for the six months ended 30 September 2009
|
Six months ended 30 September 2009 £ |
Six months ended 30 September 2008 £ |
Year ended 31 March 2009 £ |
||||
|
Net cash outflow from operating activities |
(362,193 |
) |
(1,281,691 |
) |
(608,259 |
) |
|
Returns on investment and servicing of finance Net interest (paid) / received |
(43,454 |
) |
5,761 |
(32,868 |
) |
|
|
Taxation Corporation tax paid/repayment |
- |
- |
- |
|||
|
Capital expenditure Purchase of fixed assets |
(34,584 |
) |
(154,332 |
) |
(305,072 |
) |
|
Net cash outflow before financing |
(440,231 |
) |
(1,430,262 |
) |
(946,199 |
) |
|
Financing Issue of share options Capital element of hire purchase agreements Bank loan repayments Bank loan |
- (2,405) (59,313) - |
|
25,000
(4,021) (55,040) - |
25,000 (6,302) - 1,387,823 |
||
|
(Decrease) / Increase in cash |
(501,949 |
) |
(1,464,323 |
) |
460,322 |
Notes
|
Six months ended 30 September 2009 £ |
Six months ended 30 September 2008 £ |
Year ended 31 March 2009 £ |
|||
|
Loss for the financial year |
(1,075,044) |
(571,387) |
(2,949,734) |
||
|
Effect of convertible loan note |
7,560 |
7,560 |
- |
||
|
Adjusted loss for dilutive earnings per share |
(1,067,484) |
(563,827) |
(2,949,734) |
||
|
Weighted average number of ordinary shares |
18,810,661 |
18,793,995 |
18,793,994 |
||
|
Effect of dilutive share options |
- |
339,359 |
- |
||
|
Effect of convertible loan note |
1,000,000 |
1,000,000 |
- |
||
|
Adjusted weighted average number of ordinary shares |
19,810,661 |
20,133,354 |
18,793,994 |
||
|
Loss per share - basic |
(5.72p) |
(3.04p) |
(15.70p) |
||
|
Loss per share - diluted |
(5.39p) |
(2.80p) |
(15.70p) |
4. Cash flow from operating activities:
|
Six months ended 30 September 2009 £ |
Six months ended 30 September 2008 £ |
Year ended 31 March 2009 £ |
||||||||||
|
Operating (loss) Depreciation charges Loss on sale of fixed assets Decrease / (Increase) in stocks Decrease in debtors (Decrease) / Increase in creditors |
(1,031,590) 144,570 - 862,447 462,224 (799,844 |
) |
(847,734) 176,412 - (1,368,564) 203,781 554,414 |
(3,308,260) 363,872 84,278 1,547,200 1,042,826 (338,175) |
||||||||
|
Net cash outflow from operating activities |
(362,193 |
) |
(1,281,691 |
) |
(608,259 |
) |
||||||
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TFL.L