20th Jun 2007 07:01
Wynnstay Group PLC20 June 2007 WYN.L WYNNSTAY GROUP PLC ("Wynnstay" or "the Group") Interim Results for the Six Months ended 30 April 2007 Based in Wales, Wynnstay manufactures and supplies agricultural products andservices (including fertiliser, seeds, animal feed, animal health care products, pet and equine food, clothing etc) to farmers and country dwellers. KEY POINTS • Encouraging interim results - demonstrate the advantages of the Group's balanced spread of activities • Full contribution in the period from Glasson Group, acquired in August 2006, which performed excellently • Turnover increased by 52.6% to £79.90m (2006: £52.38m) • Pre-tax profit rose by 39.0% to £1.96m (2006: £1.41m) • Basic earnings per share up 15.5% to 12.43p (2006: 10.76p) • Net assets increased by 9.7% to £26.83m (2006: £24.45m) • Interim dividend of 1.875p up 7.1% (2006: 1.75p) • Key trends in period: - recovery in fertiliser market which benefited Arable Division where fertiliser sales rose 20% - rising raw material prices which produced overall net benefit for Group • First dedicated pet supplies store - "Just for Pets" - opened in Telford in June • Actively seeking further consolidation opportunities - currently in negotiations with agricultural distribution companies • Positive outlook for full year Chairman, John Davies, commented, "Trading results for the first six months of the financial year are encouragingand I am pleased to report that earnings have improved in line with ourexpectations. The balanced spread of our activities continues to ensure we areable to perform robustly in challenging market conditions. We believe that our twin track strategy of acting as a consolidator in theagricultural sector while expanding our higher margin retail activities willcontinue to bring ongoing benefits. Our position as a low cost, high qualitysupplier considerably strengthens this strategic approach. We remain positiveabout the outcome for the current financial year." Press enquiries: Wynnstay Group plc Bernard Harris, Managing Director T: 020 7448 1000 today Paul Roberts, Finance Director Thereafter: 01691 828512 Biddicks Katie Tzouliadis T: 020 7448 1000 WH Ireland Limited David Youngman T: 0161 832 2174 CHAIRMAN'S STATEMENT Introduction Trading results for the first six months of the financial year are encouragingand I am pleased to report that earnings have improved in line with ourexpectations. The balanced spread of our activities continues to ensure we areable to perform robustly in challenging market conditions. Importantly in the first half, we saw fertiliser ordering return to morenormalised patterns after the sharp decrease in sales during the same periodlast year. On a like-for-like basis, fertiliser orders in the first half were20% higher than the comparable period last year. The recovery was helped by morestable fertiliser pricing, which last year rose to a 10 year high as the priceof natural gas, a key component in fertiliser manufacture, soared. While our Arable Division benefited from these better trading conditions, ourFeed Division saw only modest volume increases. The very mild weather conditionsreduced demand for animal feeds and, in addition, margins were adverselyaffected by the sharp rise in raw material prices. The feed sector is stillsuffering from over capacity; also dairy producers remain under severe financialpressure and are resisting prices increases from feed suppliers. I am pleased to report that the Glasson Group, which we acquired in August 2006,performed very strongly and Glasson's trading results were ahead of ourexpectations and budget. Key to Glasson's out-performance over the period wererising raw materials prices, which greatly benefited its trading activities aswell as our grain trading arm, Shropshire Grain Ltd. The recovery in thefertiliser market also benefited Glasson's blending activities at Glasson Dockin Lancashire. While the considerable increase in raw material prices adversely affected ourfeed manufacture and feed sales, the gain for Glasson's trading activities hasmeant that these price increases produced a net benefit for the Group. Our Stores Division performed well and we are continuing to widen our range tobroaden the stores' appeal to all sections of the rural community. In June, weopened our first dedicated pet store, "Just for Pets" in Telford and areplanning further openings, subject to lease negotiations. Financial Results Including results from Glasson Group, turnover rose by 52.6% to £79.90m (2006:£52.38m) and operating profit by 40.4% to £2.15m (2006: £1.53m). Pre-tax profitrose by 39.0% to £1.96m from £1.41m last year. Basic earning per share rose byapproximately 15.5% to 12.43p (2006: 10.76p). Net assets at 30 April 2007 stood at £26.83m from £24.46m last year, a rise of9.7%. Dividend Continuing our policy of progressive dividend payments, the Board is pleased todeclare an interim dividend of 1.875p per share, a 7.1% increase on last year(2006: 1.75p). The interim dividend will be paid on the 31 October 2007 toshareholders on the register at the 28 September 2007. Review of Operations Feed Division Feed volumes were largely maintained across our numerous activities although themild winter and the very early spring reduced demand at the end of the period.Margins remain under pressure, particularly in dairy feed sales and rapidlyrising ingredient and energy prices were not fully passed on to the market. Our joint venture business, Bibby Agriculture Ltd, which is run in conjunctionwith Carrs Milling Industries Plc, enjoyed another successful period, andcontributed volume to both our Llansantffraid and Carmarthen mills. Dairy feedvolumes were static, with an improvement in general cattle feed, while sheepfeed sales fell for the first time in a number of years; this being attributedto milder weather conditions and the smaller national flock. Pig feed salesdoubled due to the winning of new contracts. Our three blending operations,including the new feed blending plant in Rhosfawr, North Wales had a successfulwinter. This sector of the market is continuing to grow and sales of blendedproducts at Llansantffraid mill increased by 42% during the period. Our raw material trading business had a successful period and worked closelywith new colleagues at Glasson to maximise margins and volumes. Arable Division Fertiliser sales returned to a more normal buying pattern and volumes (on anorders received basis) increased by 20%. We expect this buying pattern tocontinue, helped by the increased confidence within the arable sector.Rationalisation in UK fertiliser manufacturing continues with news that YaraInternational, the world's leading producer of mineral fertilisers, haspurchased a 30% stake in Kemira Growhow, who itself is proposing a merger withTerra Fertiliser. The outcome of this consolidation could be the creation of asingle national fertiliser supplier. Our volumes put us in a good position tobenefit from this development with an additional opportunity to market increasedquantities of blended fertilisers from our Lancashire plant. Cereal seed sales improved substantially, as did those of herbage, againbenefiting from higher wheat prices. We are seeing new markets develop forcereals in bio-fuels and starch production alongside the more traditionaloutlets. Shropshire Grain achieved greater volumes; the more variable crop available fromthe 2006 harvest benefited the business and generally improved margins. Stores Division The Stores Division generally performed well. The mild weather affected thesales of seasonal animal nutrition products but other key retail product areasimproved, with pet food increasing by 4%, animal health care products by 6% andequine products by 6%. There was a strong performance from the hardware productgroup where sales grew by 12%. Our store improvement programme is ongoing and we are continuing to widen ourproduct range to cater for both the traditional agricultural customer and widergeneral public. Sales are supported by extensive market research and directmarketing initiatives, including the pet and equine club where membership isincreasing. Our first stand-alone pet store, 'Just for Pets', opened in June, at Telford.Customer reaction is very encouraging, and we hope to have at least one furtheroutlet open, at Brierley Hill in the West Midlands, before the financial yearend, subject to satisfactory lease negotiations. With the purchase of GlassonGroup, we have acquired a further store situated in Lancashire and this outletis currently being remodelled and developed. Glasson Group Glasson Group was acquired in August 2006 and enjoyed an excellent first half,helped considerably by rising raw material markets. Turnover of £23m wasconsiderably ahead of budget with tonnage increases of 6% across all commoditiestraded. Fertiliser volumes from Glasson's blending plant improved substantiallyduring the spring and the shipping activities handled more cargos and attractednew clients for the port of Glasson. Foxmoor Foxmoor enjoyed considerable sales growth during the first half of the financialyear and the second half, which includes the peak sales months of May and June,has started well. The business has benefited from lower unit power costs due tomore favourable energy pricing and has a strong order book for the remainder ofthe year. In conjunction with the Ideal Shopping Channel, we have launched a home shoppinggardening offering, which has proved to be highly successful. Sales areconsiderably higher than budget and we have established a new packing anddispatch department in Somerset to deal with the new business. We believe thatthere is room for considerable growth in this market where we can offer a widerrange of group products in addition to our standard gardening offering. Joint Ventures & Associate Companies Joint Ventures Wyro Developments Ltd - Wyro experienced good demand at its largest site inNewtown, Powys and met sales targets. There has been some slowing in demand forthe more expensive properties on one of the smaller sites; however, demand atthe lower end of the price market remains strong despite the recent rise ininterest rates. We are seeking detailed planning permission on two further majorsites in Mid-Wales with a capacity for 110 dwellings. Youngs Animal Feeds - The business enjoyed increased demand for its high fibreequine products produced at our new plant in Staffordshire, which replaced ourproduction plant in Cheshire. The closure costs associated with this impact onthis year's financial result, but will bring considerable cost and efficiencybenefits for the future. We successfully launched a wild bird food brand,'Feathered Friends' during the period. We are looking to integrate some of theYoungs activities with those of Glasson, which operates in a similar market. Welsh Feed Producers - Welsh Feeds Producers had a successful winter for sales,but in common with our other feed activities, margins tightened. Extensive workwas carried out in the late spring to improve efficiency of the plant and therecent closure of a competitor's factory in Mid Wales will help future demand.Bibby Agriculture Ltd increased its offtake from the plant, which again helpedunit costs. Associate Company Wynnstay Fuels - A more volatile market made it difficult to repeat last year'sperformance and, owing to the mild winter, the fuels business experienced aslowing in sales growth for heating oils. However, overall volumes continue toimprove and the operation in North Wales established two years ago has developedfurther. We are looking to acquire other distributors in our trading area tohelp build market share. Outlook Rising costs are still an issue across many of our activities and, in thelivestock sector, the pressure on milk producers continues. Further work isrequired to bring feed margins back to more acceptable levels in the second halfof the year; however, I am pleased to report that progress is encouraging.Demand for most of our products remains good and we continue to win new businesson the basis of quality and value for money. Our strategy of acting as a consolidator in the agriculture sector whiledeveloping higher margin retail activities and joint ventures, continues. We arein active negotiations for the purchase of agricultural distribution companies,with the aim of increasing our geographical trading area and expanding ourproduct range. Our 'Just for Pets' stand-alone pet stores will increase in number and we areworking to acquire established outlets to complement organic growth. In the Arable sector there is much more confidence than the same time last year;capacity in seed production has been reduced in the Western half of the countryrecently, which will help our plant in Shropshire and we remain optimistic withregard to the outcome of the rationalisation of the fertiliser manufacturingindustry in the UK. We believe that our twin track strategy of acting as a consolidator in theagricultural sector while expanding our higher margin retail activities willcontinue to bring ongoing benefits. Our position as a low cost, high qualitysupplier considerably strengthens this strategic approach. We remain positiveabout the outcome for the current financial year. John DaviesChairman CONDENSED CONSOLIDATED INCOME STATEMENTFOR THE SIX MONTHS ENDED 30TH APRIL 2007 Unaudited Unaudited Audited six months six months year ended ended ended 30 April 30 April 31 October 2007 2006 2006 (as (as restated) restated) Note £'000 £'000 £'000 Revenue from continuing operations 79,899 52,375 110,883 Cost of sales (67,398) (42,140) (91,397) -------------------------------------- Gross Profit 12,501 10,235 19,486 Selling and distribution costs (9,109) (7,622) (14,865)Administrative expenses (574) (556) (1,141)Depreciation (673) (529) (1,135) -------------------------------------- Operating profit from continuing operations 2,145 1,528 2,345 - Share of profits in joint ventures andassociates 2 0 0 616 -------------------------------------- Profit from continuing operations 2,145 1,528 2,961 - Interest Receivable 122 63 196- Interest Payable and similar charges (304) (179) (426) -------------------------------------- Profit before tax from continuing operations 1,963 1,412 2,731 Taxation 3 (530) (343) (664) -------------------------------------- Profit for the period 1,433 1,069 2,067 ====================================== Earnings per share 4 - Headline 12.43p 10.76p 19.98p- Diluted 4 11.86p 8.89p 17.21p ====================================== CONDENSED CONSOLIDATED BALANCE SHEETAS AT 30TH APRIL 2007 Unaudited Unaudited Audited as at as at as at 30 April 30 April 31 October 2007 2006 2006 (as (as restated) restated) Note £'000 £'000 £'000Non-current assetsGoodwill 3,156 2,701 3,144Other intangible assets 10,949 2,975 3,334Property, plant and equipment 3,412 8,943 10,946 -------------------------------------------- 17,517 14,619 17,424 -------------------------------------------Current assetsInventories 11,612 9,497 9,626Trade and other 28,160 21,522 19,508receivablesFinancial assets: - loan to joint venture 4,630 2,483 2,750- cash and cash equivalents 480 6 1,181 ------------------------------------------- 44,882 33,508 33,065 -------------------------------------------Current liabilitiesTrade and other payables (21,765) (15,317) (17,760)Financial liabilities: - borrowings (9,724) (5,310) (4,316)Provisions (496) (594) (360) ------------------------------------------- (31,985) (21,221) (22,436) ------------------------------------------- Net current assets 12,897 12,287 10,629 Total assets less current liabilities 30,414 26,906 28,053 ------------------------------------------- Non-current liabilitiesFinancial liabilities: - borrowings (3,028) (2,242) (2,061)Provisions (561) (219) (561) ------------------------------------------- (3,589) (2,461) (2,622) -------------------------------------------Net assets 26,825 24,445 25,431 =========================================== EquityIssued share capital 5 2,933 2,560 2,867Share premium 7,976 5,195 7,673Other reserves 1,582 3,960 1,582Retained earnings 14,334 12,730 13,309 -------------------------------------------Total equity attributable to equity holders of theparent company 26,825 24,445 25,431 =========================================== CONDENSED UNAUDITED CONSOLIDATED STATEMENT OF CHANGESIN SHAREHOLDERS' EQUITY Share Share Profit & capital Premium Other loss Total reserves reserve equity £'000 £'000 £'000 £'000 £'000 Balance at 1 November 2005 2,438 4,253 4,735 12,195 23,621 --------------------------------------------Inventories fair value adjustment - IAS 41 (due to first-time adoption of IFRS) 72 72 Share based payment (due to first-time adoption of IFRS) (100) (100) Restated balance sheet at 1 November 2005 2,438 4,253 4,735 12,167 23,593 -------------------------------------------Prior period adjustment - equity dividend paid (506) (506)Net profit 1069 1,069Shares issued 122 942 (775) 289 ------------------------------------------- Balance at 30 April 2006 2,560 5,195 3,960 12,730 24,445 -------------------------------------------Net profit 998 998Equity dividend paid (202) (202)Shares issued 307 2,478 (2,417) 368Fair value re-assessment of goodwill 39 39 Adjustment in respect of ESOP (217) (217) -------------------------------------------Balance at 31 October 2006 2,867 7,673 1,582 13,309 25,431 -------------------------------------------Net profit 1,433 1,433Equity dividend paid (408) (408)Shares issued 66 303 369 -------------------------------------------Total shareholders' equity at 30 April 2007 2,933 7,976 1,582 14,334 26,825 ------------------------------------------- CONDENSED CONSOLIDATED CASH FLOW STATEMENTFOR THE SIX MONTHS ENDED 30TH APRIL 2007 Unaudited Unaudited Unaudited six months six months year ended ended ended 30 31 October 30 April 2007 April 2006 2006 (as (as restated) restated) Note £'000 £'000 £'000 Cash flow from operatingactivitiesCash (used in) / generatedfrom operations 6 (5,914) (5,381) 2,611Interest paid (302) (179) (426)Tax paid (331) (240) (482) ------------------------------------------Net cash used in operating activities (6,547) (5,800) 1,703 ------------------------------------------ Cash flows from investingactivitiesAcquisition of subsidiaries, net of cash acquired 0 0 (3,782)Purchase of property,plant and equipment (689) (922) (1,629)Purchase of intangible assets (12) (200) (604)Proceeds on sale ofproperty, plant andequipment 307 0 44Interest received 120 63 188Proceeds on sale of investments 0 40 40Purchase of investments (78) 0 (182)Dividends received 0 0 8 ------------------------------------------Net cash used in investing activities (352) (1,019) (5,917) ------------------------------------------ Equity dividends paid (408) (508) (708) Cash flows from financingactivitiesProceeds from the issue ofshare capital 369 289 657Repayments of borrowings (595) (257) (530)Net proceeds from drawdownof new loans 1,863 3,000 3,000Finance lease principal re-payments (150) (166) (338) ------------------------------------------Net cash generated from financing activities 1,487 2,866 2,789 ------------------------------------------Net decrease in cash and cash equivalents (5,820) (4,461) (2,133)Cash and cash equivalentsat beginning of period (696) 1,437 1,437 ------------------------------------------Cash and cash equivalents atend of period (6,516) (3,024) (696) ------------------------------------------ NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS 1. Basis of preparation. The Interim Report was approved by the Board of Directors on 19th June 2007. The consolidated interim financial statements have been prepared in accordancewith the IFRS accounting policies that are set out below and are those that areexpected to apply for the full year 2007 financial statements. A summary ofthese key accounting policies is set out below in the Appendix to this report. In selecting the accounting policies, the Directors have made assumptions aboutthe IFRS expected to be applied when the first annual IFRS statements areprepared for the year ending 31 October 2007. Further standards and interpretations may be issued that could be applicable forthe financial years beginning on or after 1 January 2007 or that are applicableto later accounting periods but with the option for companies to adopt forearlier periods. The Group's first annual financial statements prepared underIFRS may, therefore, be prepared in accordance with different accountingpolicies to those used in the preparation of the financial information in thisdocument. The financial information for the Group for the year ended 31 October 2006 setout above does not constitute "statutory accounts" within the meaning of Section240 of the Companies Act 1985. A copy of the statutory accounts for that yearhas been delivered to the Registrar of Companies. The auditors report was notqualified and did not contain statements under section 237(2) or (3) of theCompanies Act 1985. The information for the year ended 31st October 2006 hasbeen extracted from the statutory accounts of Wynnstay Group plc and restatedunder IFRS. The financial information for the six months ended 30th April 2007 and for thesix months ended 30th April 2007 is unaudited. 2. Consolidation of share of results of profits in joint ventures & associates. As the Group has a policy of using audited accounts for the consolidation of itsshare of the profits of joint venture & associate activities, no suchconsolidation has occurred during the six months to April 2007. Relevant resultswill be accounted for during the second half of the financial year. 3. Taxation. The tax charge for the six months to 30th April 2007 is based on anapportionment of the estimated tax charge for the full year. 4. Earnings per Share. Earnings per share have been calculated based on the profit attributable toordinary shareholders of £1,433,000 (six months ended 30 April 2006 : profit of£1,069,000) and the weighted average number of shares in issue of 11,526,432(2006: 9,931,675). Diluted earnings per share are based on the aggregateweighted average number of shares and all potential shares, adjusted for theproposed issue price, of 12,080,448 (2006: 12,016,324). 5. Share capital and Convertible Loanstock. During the current period a total of 263,957 (2006: 491,950) shares were issuedwith an aggregate nominal value of £65,990 (2006: £122,988) fully paid up forequivalent cash of £369,402 (2006: £1,064,508). Included in these issues were64,517 (2006: 73,943) shares allotted to shareholders exercising their rights toreceive dividends under the Company's scrip dividend scheme and nil (2006:410,132) allotted to holders of Convertible Loanstock in the Company. At thedate of this report a total of 11,731,257 shares are in issue. 6. Cash (used in) / generated from operations. Unaudited Unaudited Audited as at as at as at 30 April 30 April 31 October 2007 2006 2006 (as (as restated) restated) £'000 £'000 £'000 Profit for the period from operations 1,433 1,069 2,067Taxation 331 240 482Depreciation of tangible fixed assets 673 529 1,135Amortisation of other intangible fixed assets 0 125 1Profit on sale of property, plant and equipment (156) 0 (27)Interest payable 302 179 426Interest receivable (120) (63) (188)Dividends received 0 0 (8)Group share of associates andjoint ventures' operating profit 0 0 (616)Loans made to joint venture (1,880) (1,233) (1,500)(Increase) / decrease in inventories (1,986) (1,141) 728(Increase) / decrease in tradeand other receivables (8,652) (3,614) 1,701Increase / (decrease) in creditors 4,141 (1,472) (1,340)Increase / (decrease) in provisions 0 0 (250) -----------------------------------------Cash (used in) / generated from operations (5,914) (5,381) 2,611 ========================================= 7. Glasson Group (Lancaster) Limited The Group purchased Glasson Group (Lancaster) Limited on 4 August 2006. GlassonGroup (Lancaster) Limited contributed £22,868,829 to turnover and £488,952 tooperating profit in the half year to 30 April 2007. APPENDIX Reporting under International Financial Reporting Standards (IFRS) For the year ended 31 October 2007, Wynnstay Group plc will produce itsconsolidated financial statements in accordance with the IFRS for the firsttime. The financial information presented in its interim financial statementsfor the six months ended 30 April 2007 has been prepared on the basis of theIFRS expected to be applicable at 31 October 2007. To help understand the impact of the likely transition to IFRS, reconciliationshave been produced to show the changes made to statements previously reportedunder UK GAAP in arriving at the equivalent statements under IFRS. The followingare the six unaudited reconciliations which are included in this Appendix: a) Consolidated balance sheet and equity at 1 November 2005b) Consolidated income statement for the six months ended 30 April 2006c) Consolidated balance sheet and equity at 30 April 2006d) Consolidated income statement for the year ended 31 October 2006e) Consolidated balance sheet at 31 October 2006f) Consolidated cash flows First time adoption IFRS 1 "First time adoption of International Financial Reporting Standards" setsout the approach to be followed when IFRS are applied for the first time. Ingeneral, IFRS 1 requires that accounting policies be applied retrospectivelyalthough there are certain exceptions where the cost of compliance is deemed toexceed the benefits to the users of financial statements. Where applicable, theoptions selected by management under IFRS 1 are set out in the footnotes to theIFRS reconciliation and later in this Appendix. RECONCILIATION BETWEEN UK GAAP REPORTING & IFRS a) Reconciliation of consolidated balance sheet and equity at 1 November 2005 UK GAAP Opening IFRS balance adjustment - Effect of transition to IFRS Footnote £'000 £'000 £'000Non-current assetsGoodwill 2,501 2,501Other intangible assets 2,763 2,763Property, plant & equipment 8,769 8,769 ------------------------------------- 14,033 14,033 -------------------------------------Current assetsInventories ii 8,284 72 8,356Trade and other receivables 17,908 17,908Financial assets: 1,250 1,250- cash and cash equivalents 1,646 1,646 ------------------------------------- 29,088 72 29,160 -------------------------------------Current liabilitiesTrade and other payables iii (16,411) (100) (16,511)Financial liabilities - borrowings (1,789) (1,789)Provisions (516) (516) ------------------------------------- (18,716) (100) (18,816) -------------------------------------Net current assets 10,372 (28) 10,344 -------------------------------------Total assets less current liabilities 24,405 (28) 24,377 -------------------------------------Non-current liabilitiesFinancial liabilities - borrowings (345) (345)Provisions (439) (439) ------------------------------------- (784) (784) -------------------------------------Net assets 23,621 (28) 23,593 -------------------------------------EquityIssued share capital 2,438 2,438Share premium 4,253 4,253Other reserves 1,582 1,582Loanstock redemption 3,153 3,153Retained earnings ii, iii 12,195 (28) 12,167 -------------------------------------Total equity attributable toequity holders of the parentcompany 23,621 (28) 23,593 ------------------------------------- b) Reconciliation of consolidated income statement for the six months ended 30April 2006 UK GAAP Effect of IFRS transition to IFRS (current period) Footnote £'000 £'000 £'000 Revenue from continuing operations 52,375 52,375 Cost of sales ii (42,140) (42,140) ------------------------------------Gross Profit 10,235 10,235 Selling and distribution costs (7,622) (7,622)Administrative expenses i, iii (536) (20) (556)Depreciation (529) (529)Amortisation of intangible assets (125) 125 0 ------------------------------------Operating profit 1,423 105 1,528 Share of profits in joint ventures 0 0Net interest payable (116) (116) ------------------------------------Profit before taxation 1,307 105 1,412 Tax on profit (313) (30) (343) ------------------------------------Profit for the period 994 75 1,069 ====================================Attributable to:Equity holders of the parent company 994 75 1,069 ------------------------------------Profit for the period 994 75 1,069 ==================================== c) Reconciliation of consolidated balance sheet and equity at 30 April 2006 UK GAAP Opening Effect of IFRS balance transition adjustment to IFRS to IFRS (current period) Footnote £'000 £'000 £'000 £'000Non-current assetsGoodwill i 2,576 125 2,701Other intangible assets 2,975 2,975Property, plant & equipment 8,943 8,943 ------------------------------------------------------- 14,494 125 14,619 -------------------------------------------------------Current assetsInventories ii 9,425 72 0 9,497Trade and other receivables 21,522 21,522Financial assets 2,483 2,483- cash and cash equivalents 6 6 ------------------------------------------------------- 33,436 72 0 33,508 -------------------------------------------------------Current liabilitiesTrade and other iii payables (15,197) (100) (20) (15,317)Financial liabilities- borrowings (5,310) (5,310)Current tax liabilities (594) (594) ------------------------------------------------------- (21,101) (100) (20) (21,221) -------------------------------------------------------Net current assets 12,335 (28) (20) 12,287 -------------------------------------------------------Total assets lesscurrent liabilities 26,829 (28) 105 26,906 -------------------------------------------------------Non-currentliabilitiesFinancial liabilities - borrowings (2,242) (2,242)Provisions (189) (30) (219) ------------------------------------------------------- (2,431) 0 (30) (2,461) -------------------------------------------------------Net assets 24,398 (28) 75 24,445 =======================================================EquityIssued share capital 2,560 2,560Share premium 5,195 5,195Other reserves 1,582 1,582Loanstock redemption 2,378 2,378Retained earnings i, ii,iii 12,683 (28) 75 12,730 -------------------------------------------------------Total equityattributable toequity holders of theparent company 24,398 (28) 75 24,445 ======================================================= d) Reconciliation of consolidated income statement for the year ended 31 October2006 UK GAAP Effect of IFRS transition to IFRS (current period) Footnote £'000 £'000 £'000 Revenue from continuing operations 110,883 110,883 Cost of sales ii (91,394) (3) (91,397) -------------------------------------Gross Profit 19,489 (3) 19,486 Selling and distribution costs (14,865) (14,865)Administrative expenses (1,135) (6) (1,141)Depreciation (1,135) (1,135)Amortisation of intangible i assets (262) 262 0 -------------------------------------Operating profit 2,092 253 2,345 Net interest payable (230) (230)Share of profits in joint ventures 672 (56) 616 Profit before taxation 2,534 197 2,731 Tax on profit (664) (664) -------------------------------------Profit for the period iii 1,870 197 2,067 -------------------------------------Attributable to:Equity holders of the parent company 1,870 197 2,067 -------------------------------------Profit for the period 1,870 197 2,067 ------------------------------------- e) Reconciliation of consolidated balance sheet and equity at 31 October 2006 UK GAAP Opening Effect of IFRS balance transition to adjustment IFRS (current to IFRS period) Footnote £'000 £'000 £'000 £'000Non-current assetsGoodwill i 2,882 262 3,144Other intangible assets 3,390 (56) 3,334Property, plant & equipment 10,946 10,946 -------------------------------------------------- 17,218 0 206 17,424 --------------------------------------------------Current assetsInventories ii 9,557 72 (3) 9,626Trade and other receivables 19,508 19,508Financial assets 2,750 2,750- cash and cash equivalents 1,181 1,181 -------------------------------------------------- 32,996 72 (3) 33,065 --------------------------------------------------Current liabilitiesTrade and other iii payables (17,654) (100) (6) (17,760)Financial liabilities - borrowings (4,316) (4,316)Provisions (393) 33 (360) -------------------------------------------------- (22,363) (100) 27 (22,436) --------------------------------------------------Net current assets 10,633 (28) 24 10,629 --------------------------------------------------Total assets lesscurrent liabilities 27,851 (28) 230 28,053 -------------------------------------------------- Non-current liabilitiesFinancial liabilities - borrowings (2,061) (2,061)Deferred tax ii liabilities (528) (33) (561) -------------------------------------------------- (2,589) (33) (2,622) --------------------------------------------------Net assets 25,262 (28) 197 25,431 ==================================================EquityIssued share capital 2,876 2,867Share premium 7,673 7,673Other reserves 1,582 1,582Retained earnings i,ii,iii 13,140 (28) 197 13,309 --------------------------------------------------Total equityattributable to equityholders of the parentcompany 25,262 (28) 197 25,431 ================================================== f) Reconciliation of cashflows There is no difference between the cash flows previously reported under UK GAAPand those reported under IFRS. Certain presentational difference between UK GAAPand IFRS have been reflected in the 30 April 2007 cash flow statement. Footnotes to the reconciliation of equity i) Goodwill Goodwill on business combinations (from date of transition to IFRS ) is notamortised under IFRS 3, but is tested annually for impairment. Goodwillamortisation charged under UK GAAP has been written back by: * £125,000 for the six months ended 30 April 2006, and* £262,000 for the year ended 31 October 2006. Annual impairment reviews have not resulted in any adjustments to the carryingvalues of goodwill. ii) Inventories Included within inventories are saleable growing stocks, comprising pottedplants and shrubs. In accordance with IAS 41 - Agriculture, these stocks, whichare classed as biological assets, have been uplifted to reflect their fair valueless estimated point-of-sale costs at the balance sheet date. iii) Share based payments Share based payments included Executive and employee share option schemes. Fairvalue is determined at the date of the grant and is calculated using theBlack-Scholes method. Under UK GAAP an expense would have been recorded inrespect of share options granted based upon their intrinsic value (which wasconsidered nil as options were granted at market value). In restating thefinancial results of the Group, an expense has been recorded based upon the fairvalue of the share options granted. IFRS 2 requires the fair value of all share-based payments to be charged againstthe income statement over the respective vesting periods. The Group has takenadvantage of the transitional provisions of IFRS 1 not to recalculate equitysettled awards granted before 7 November 2002. SIGNIFICANT ACCOUNTING POLICIES The significant accounting policies adopted in the preparation of the interimfinancial statements for the six months ended 30 April 2007 are set out below. Basis of consolidation The Group's consolidated financial statements include the results of the ParentCompany and its subsidiaries up to the relevant balance sheet date. Intra-groupsales, profits and balances are eliminated on consolidation. Goodwill Goodwill arising on consolidation represents the excess of the cost of theacquisition over the fair value of the identifiable assets, liabilities andcontingent liabilities of the acquired entity at the date of acquisition.Goodwill is recognised as an asset and reviewed for impairment annually.Goodwill is carried at cost less any accumulated impairment losses. Anyimpairment is recognised in the period in which it is identified. Property, plant & equipment Tangible assets are stated at cost, net of depreciation and any provision forimpairment. Depreciation is provided on all tangible fixed assets at ratescalculated to write off the cost less their estimated residual value of eachasset over its expected useful life as follows: Freehold property 2.5% - 5% per annum straight lineLeasehold land and buildings 3% per annum straight linePlant and machinery / office 10% - 33% per annum straight lineequipmentMotor vehicles 20% - 30% per annum straight line Inventories Inventories are stated at the lower of cost and net realisable value for allstocks, with the exception of biological growing stock which is stated at fairvalue less estimated point-of-sales costs. Taxation Current tax, including corporation tax is provided to at amounts expected to bepaid (or recovered) using tax rates enacted or substantially enacted at thebalance sheet date. Deferred tax is accounted for using the liability method in respect of temporarytiming differences arising from differences between the carrying value of assetsand liabilities in the financial statements and the corresponding tax base usedin the computation of taxable profits. Deferred tax assets are recognised to the extent that it is more likely than notthat they will be recovered. Revenue recognition Revenue (excluding VAT) from the sale of goods or services is measured at thefair value of the consideration. Revenue is recognised when the group hastransferred the significant risks and rewards of ownership of the goods to thebuyer. Share based payments The Group operates a number of share option and save schemes. For all grants ofshare options and awards, the date of the grant is calculated using theBlack-Scholes option pricing model and the corresponding expense is recognisedover the vesting period. Financial instruments Borrowings are measured at amortised cost. Trade and other receivables aremeasured at cost less any provision for impairment. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Wynnstay