2nd Nov 2005 07:00
Theo Fennell PLC02 November 2005 Theo Fennell PLC ("Theo Fennell" or "the Group") Interim Results for the six months ended 30 September 2005 HIGHLIGHTS: Financial: • Turnover up 4.5% at £7,556,537 (2004: £7,234,120) • 104k general capital investment in the business • Improved trading resulted in minimal first half post tax loss of £64,520 (2004: £169,751) • Encouraging result given that a larger proportion of sales fall in the second half against flat fixed costs throughout the year Operational: • Refurbished flagship store generating higher level of sales • New collections and "signature crosses" and "keys" driven sales growth • Increased demand for Haute Couture pieces Overseas - Immediate presence in the Middle East and Asia with potential todevelop representation and franchises across these regions • Theo Fennell to launch a concession shortly in Hong Kong in the newly refurbished Pacific Place Lane Crawford store • First Theo Fennell Middle East franchise in Harvey Nichols Dubai starts trading in December • Duty Free representation has been extended to Terminal One Heathrow Airport, alongside Theo Fennell at Terminals Three and Four • Overseas luxury resort representation has been expanded with the opening of a store in the prestigious Soneva Fushi resort in the Maldives, complementing its representation in the Sandy Lane Hotel and Marbella stores Corporate Development: • The Group has received an approach regarding a potentially significant investment in the business Outlook • Well positioned to become a leading global luxury goods business • Critically acclaimed new collections currently being launched ahead of the Christmas period Richard Northcott, Chairman commented: "The Group's investment and development in the brand over the last few years isbeginning to generate returns. Following an approach regarding a potentiallysignificant investment in the Group, the Board believes now is the optimum timeto consider new investment to accelerate our development into a global luxurygoods business." 2 November 2005 Theo Fennell Richard Northcott 020 7591 5032 [email protected] Barbara Snoad 0207 591 5047 [email protected] Public Relations James Henderson 020 7743 6673 [email protected] CHAIRMAN'S STATEMENT The Company made excellent progress in the first half of the year and is nowclearly starting to benefit from its continued investment and development in thebrand over the last few years. In the first six months of the year salesincreased by 4.5% and important overseas agreements were signed in the MiddleEast and Asia. The Company also extended its duty free representation toTerminal One and its overseas luxury resort representation to the Maldives. In financial terms the Group's performance in the first half was strong giventhe overall depressed UK consumer climate. Sales for the six months ended 30September 2005 rose to £7.6 million compared with £7.2 million last year. TheCompany is benefiting from unique design, last year's investment in the flagshipstore, the expansion of its wholesale network and the increasing strength of theTheo Fennell brand. The Group's loss after tax for the first six months was significantly reduced to£64,520 (2004:£169,751), which is an encouraging result given that a larger proportion of sales fall in the second half against flat fixed costs throughoutthe year. The Group is confident that its increased overseas representation and its newlylaunched collections will have a positive effect on the bottom line in thesecond half. Earnings per share were a loss of 0.4 pence (2004: (1.05p)). Operational Update Stores/ Concessions The Group's investment last year in its flagship store was beneficial with thestore trading well in the first six months. The Fine Jewellery Room at Harrodswas reopened in September after a major refit with Theo Fennell occupying one ofthe larger areas. Wholesale New collections continue to stimulate wholesale demand. The Group has increasedits UK wholesale network in the first six months with representation in TerminalOne, Duty Free. Product Theo Fennell continues to be at the forefront of creating signature piecesincluding those set with rare semi-precious stones, which have becomeinternationally sort after. The Company will shortly launch an important new collection "Arts'' which hasreceived critical acclaim within the fashion and luxury goods media. Licence Agreements Following the major licensing deal the Group signed last year to launch a TheoFennell fragrance, good progress has been made and plans are on track to launchthe fragrance in 2006 with a trade preview scheduled for December this year. Overseas Theo Fennell recently announced that it had concluded important internationalexpansion agreements giving the Company an immediate presence in the Middle Eastand Asia with the potential to develop representation and franchises acrossthese regions. Later this month Theo Fennell will be launched in the newly refurbished PacificPlace Lane Crawford store in Hong Kong and in December the first of the Group'sMiddle East franchise concessions will open in Harvey Nichols in Dubai. Duty Free representation has also been extended to Terminal One HeathrowAirport, alongside Theo Fennell at Terminals Three and Four. Theo Fennell's overseas luxury resort representation has been expanded with theopening of a store in the prestigious Soneva Fushi resort in the Maldives,complementing its representation in the Sandy Lane Hotel and Marbella stores. We continue to progress discussions regarding shop in shop concessions in theUS, development of wholesale business in Russian market and a potential presencein China. Corporate Development The Company's progress and ongoing development into a leading luxury goodsbusiness is reflected in recent sales growth, overseas expansion and brandpositioning making the "Theo Fennell" brand increasingly more significant. TheoFennell is one of the few major design-led British luxury brands to be createdover the last twenty years. This development of the brand has been achieved withlimited capital investment and through organic growth. However, there remainsconsiderable unexploited potential. The current business plan of expanding overseas through concessions andfranchises could be accelerated by significant new investment. Following anapproach, talks are currently taking place with a view to securing such aninvestment subject to it being in the best interests of shareholders. Outlook I am very pleased at the progress the Company has made in the first half of theyear with the business performing strongly in a difficult retail climate; Ibelieve the overseas expansion will not only drive sales growth but also supportTheo Fennell's development into a major international brand. Richard Northcott Chairman 2 November 2005 Profit and Loss Account (Unaudited) for the six months ended 30 September 2005 Six months ended 30 Six months ended Year September 2005 30 September ended 31 March £ 2004 2005 £ £Turnover 7,556,537 7,234,120 16,266,231Cost of sales (6,903,455) (6,799,607) (14,574,777)Gross profit 653,082 434,513 1,691,454Administrative expenses (660,165) (615,632) (1,451,356)Operating (loss) / profit (7,083) (181,119) 240,098Net interest payable (87,797) (68,514) (134,110)(Loss) / profit on ordinary activities (94,880) (249,633) 105,988before taxationTax on (loss) / profit on ordinary 30,360 79,882 (42,579)activities(Loss) / profit for the financial (64,520) (169,751) 63,409periodBasic and diluted earnings per share (0.40)p (1.05)p 0.39p Balance Sheet (Unaudited) as at 30 September 2005 As at 30 As at 30 As at 31 March September 2005 September 2004 2005 £ £ £Fixed AssetsTangible assets 862,400 754,198 921,251Current assetsStocks 8,441,693 8,334,689 7,972,108Debtors 2,573,717 2,615,649 2,281,609Cash at bank and in hand 10,500 10,978 9,638 11,025,910 10,961,316 10,263,355Creditors: amounts falling due within (4,698,877) (4,810,197) (3,843,417)one yearNet current assets 6,327,033 6,151,119 6,419,938Total assets less current liabilities 7,189,433 6,905,317 7,341,189 Creditors: amounts falling due afterone yearConvertible loan note (1,000,000) (1,000,000) (1,000,000)Other (200,462) (84,985) (287,697)Net assets 5,988,971 5,820,332 6,053,492Capital and reservesCalled up share capital 808,892 808,892 808,892Share premium account 3,879,752 3,879,752 3,879,752Profit and loss account 1,300,327 1,131,688 1,364,848Shareholders' funds 5,988,971 5,820,332 6,053,492 Cash Flow Statement (Unaudited)for the six months ended 30 September 2005 Six months ended 30 Six months ended Year September 2005 30 September 2004 ended 31 March £ £ 2005 £Net cash (outflow) / inflow from (370,773) 218,274 1,083,686operating activitiesReturns on investment and servicing offinanceNet interest paid (84,802) (45,476) (150,730)TaxationCorporation tax paid - - (85,233)Capital expenditurePurchase of fixed assets (104,045) (110,142) (416,083)Net cash (outflow)/inflow before (559,620) 62,656 431,640financingFinancingCapital element of hire (25,652) (12,822) (36,604)purchase agreementsBank loan (54,687) - 323,297(Decrease)/Increase in cash (639,959) 49,834 718,333 Notes to the accounts 1. The financial statements for the period under review have not been audited or reviewed by the Company's auditors, Grant Thornton UK LLP, but have been reviewed and approved by the Audit Committee. 2. The results for the year ended 31 March 2005 are taken from the statutory financial statements, which were reported on by the Company's auditors without qualification. These have been filed with the Registrar of Companies. 3. The calculation of loss per share is based upon the loss on ordinary activities after taxation of £64,520 (six months ended 30 September 2004: loss of £169,751; year ended 31 March 2005: profit of £63,409) and the weighted average number of shares of 16,177,831 for all periods. 4. Cash flow from operating activities: Six months ended Six months ended Year 30 September 30 September ended 31 2005 2004 March £ £ 2005 £Operating (loss) / profit (7,083) (181,119) 240,098Depreciation charges 162,896 122,107 279,691(Increase)/Decrease in stocks (469,585) (244,645) 117,936(Increase)/Decrease in debtors (292,108) 103,567 396,068 Increase in creditors 235,107 418,364 49,893 Net cash (outflow)/inflow from (370,773) 218,274 1,083,686operating activities 5. A copy of the interim statement will be posted to shareholders and madeavailable 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. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
TFL.L