29th Apr 2010 07:00
Thursday 29 April 2009
HAVELOCK EUROPA PLC - PRELIMINARY ANNOUNCEMENT
Havelock (HVE.L), the retail and educational interiors and point of sale printing group, announces its results for the year to 31 December 2009.
Key points - financial
·; Revenue decreased by 21% to £108.5m.
·; The underlying† pre-tax result was a loss of £2.0m (2008: profit of £8.0m), a fully diluted loss per share of 3.1p (2008: EPS of 14.9p).
·; The reported pre-tax loss was £5.9m (2008: profit of £7.7m), a fully diluted loss per share of 10.7p (2008: EPS of 14.1p).
·; Year end net debt increased to £19.4m (2008: £11.7m). Havelock has now agreed new bank facilities totalling £33m, which the Board considers adequate.
·; No final dividend is proposed and no dividends for 2010 are expected.
† Underlying excludes exceptional costs of £3.6m (2008: nil) and amortisation of intangibles (other than software) of £0.3m (2008: £0.3m)
Key points - commercial
·; Educational Interiors revenue increased by 9% to £56.8m, but the Division made a loss, principally caused by the effects encountered in the integration of the IT systems and operations of ESA McIntosh and Retail Interiors.
·; Retail Interiors revenue reduced by 47% to £31.9m, as all customers reduced expenditure, and the Division also made a loss.
·; Revenue in Point of Sale Printing reduced by 21% to £19.7m, but the Division continued to make a satisfactory level of profit, with gross margins maintained as a result of recent investment in modern equipment.
Key point - Board
·; The Board's search for a new permanent Chief Executive is well underway.
Current trading and prospects
Malcolm Gourlay, Chairman, said: "Since the year end, Havelock has experienced an encouraging increase in the level of enquiries and in new orders received. The Board believes that it has rectified the operational issues which arose in 2009 and that the cost savings generated through the integration are now being realised. It is looking for opportunities to increase the level of savings above the £2m per annum achieved so far.
The Board's expectation for the half year is for the Interiors Division to trade at a lower level than in 2009 but with a second half performance in line with the historical pattern of a strong second half emphasis reflecting the demands of our retail and education customers. Since the end of the year, the Group has incurred exceptional costs relating to its refinancing and Board reorganisation, and its current cost saving programmes will lead to further one-off costs. For the full year, however, the Board continues to believe that there should be a significant improvement in the Group's trading".
|
Enquiries: |
|
|
Havelock Europa PLC |
|
|
David Hurcomb (Interim CEO) Grant Findlay (Finance Director)
|
07836 353 179 07768 745 960 |
Bankside Consultants Limited |
|
|
Charles Ponsonby Rose Oddy |
020 7367 8851 020 7367 8853
|
PRELIMINARY STATEMENT
The Board had expected 2009 to be an exceedingly challenging year, in a testing economic climate. Nevertheless, it is disappointing to announce an underlying pre-tax loss of £2 million in 2009.
FINANCIAL OVERVIEW
Revenue from continuing operations decreased by 21% to £108.5 million (2008: £137.6 million).
The underlying result, excluding exceptional costs of £3.6 million (2008: nil) and amortisation of intangibles other than software of £0.3 million (2008: £0.3 million), was a pre-tax loss of £2.0 million (2008: profit of £8.0 million). The fully diluted loss per share on this basis was 3.1p (2008: earnings of 14.9p). The reported pre-tax loss was £5.9 million (2008: profit of £7.7 million) and the reported fully diluted loss per share from operations amounted to 10.7p (2008: earnings of 14.1p).
£3.2 million of the £3.6 million exceptional costs are attributable to the transfer of the Retail Interiors manufacturing operation from Dalgety Bay to Kirkcaldy and its integration with ESA McIntosh, the principal Educational Interiors business. The balance of the costs related to cost saving initiatives at the other business units.
Year end net debt increased to £19.4 million from £11.7 million as a result of the pre-tax loss, the payment of dividends totalling £1.8m and the increased share of activity represented by Educational Interiors, requiring more working capital.
BANK FACILITIES
On 12 January 2010, the Board announced that it was discussing revised terms for its bank facilities and had obtained from its bank a waiver of the year end interest covenant test.
The Company has now agreed new facilities with its bank, which total £33 million. Of this, £22 million is committed until July 2012. The Board believes these facilities will be adequate for the Group's requirements.
TRADING OVERVIEW
Educational Interiors revenue increased by 9% to £56.8 million (2008: £52.1 million), but the Division made a loss. This was principally caused by the effects of considerable operational issues encountered in the integration of the IT systems and operations of ESA McIntosh and Retail Interiors. Exceptionally poor weather at the end of the year also contributed, with slippage in programmes and additional costs from aborted deliveries and unrecovered costs of site installation teams.
Retail Interiors revenue reduced by 47% to £31.9 million (2008: £60.4 million) and the Division also made a loss. The reduced revenue reflected lower levels of activity by all customers. Against this background, the programme to integrate ESA McIntosh and Retail Interiors into an Interiors Division was undertaken with the aim of streamlining operations and reducing costs. This project has now been completed and, following resolution of the problems in the IT integration previously referred to, is now generating cost savings of at least £2 million per annum.
Revenue in Point of Sale Printing reduced by 21% to £19.7 million (2008: £25.1 million), reflecting lower levels of activity by all customers. The Division continued to make a satisfactory level of profits, with gross margins maintained as a result of recent investment in modern equipment.
BOARD
On 1 April 2010, as part of the Board's succession planning process, Havelock announced that Hew Balfour had stepped down as Chief Executive and a director.
On the same day, the Board appointed David Hurcomb as interim Chief Executive and a director of the Company with immediate effect. David, who is aged 46, was until December 2009 a director of Carillion plc, a £5 billion revenue, fully listed, support services company with construction interests. Previously, David was a director of Mansell plc, a substantial construction contractor.
The Board's search for a permanent replacement appointment as Chief Executive is well under way.
DIVIDENDS
The Board is not proposing a final dividend in respect of the year to 31 December 2009 and does not expect, at this stage, to pay any dividends in respect of 2010.
An unchanged interim dividend of 1.2p per share was declared on 25 August 2009 and paid on 28 December 2009.
CURRENT TRADING AND PROSPECTS
Since the year end, Havelock has experienced an encouraging increase in the level of enquiries and in new orders received. The Board believes that it has rectified the operational issues which arose in 2009 and that the cost savings generated through the integration are now being realised. It is looking for opportunities to increase the level of savings above the £2 million per annum achieved so far.
In 2010, the Board is not expecting a full return to normal trading conditions in the markets in which the Group operates. The level of PFI related revenue in Educational Interiors will fall as a consequence of the reduction in activity in Scotland following the completion in 2009 of a large number of projects. However, Retail Interiors has been successful in winning business from new customers, including H&M and Orange. The business has also been appointed as one of four National Contractors to the Lloyds Banking Group. All of these opportunities will generate revenue in 2010, which is expected to increase in subsequent years. Order intake at Point of Sale has resumed growth over levels in 2009.
The Board's expectation for the half year is for the Interiors Division to trade at a lower level than in 2009 but with a second half performance in line with the historical pattern of a strong second half emphasis reflecting the demands of our retail and education customers. Since the end of the year, the Group has incurred exceptional costs relating to its refinancing and Board reorganisation, and its current cost saving programmes will lead to further one-off costs. For the full year, however, the Board continues to believe that there should be a significant improvement in the Group's trading.
Malcolm Gourlay 29 April 2010
Chairman
CONSOLIDATED INCOME STATEMENT
for the year ended 31 December 2009
|
|
|
2009 |
2009 |
2009 |
2008 |
|
|
|
Before |
Exceptional |
Total |
|
|
|
|
exceptional |
items |
|
|
|
|
|
items |
(note 5) |
|
|
|
|
Note |
£000 |
£000 |
£000 |
£000 |
|
|
|
|
|
|
|
|
Continuing operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
4 |
108,480 |
|
108,480 |
137,577 |
|
Cost of sales |
|
(94,024) |
(2,683) |
(96,707) |
(109,733) |
|
|
|
______ |
______ |
_____ |
______ |
|
Gross profit |
|
14,456 |
(2,683) |
11,773 |
27,844 |
|
Administrative expenses |
|
(15,670) |
(778) |
(16,448) |
(19,066) |
|
|
|
|
|
|
|
|
|
|
_______ |
______ |
_______ |
_______ |
|
Operating (loss)/profit |
4 |
(1,214) |
(3,461) |
(4,675) |
8,778 |
|
|
|
|
|
|
|
|
Finance costs |
|
(1,041) |
(180) |
(1,221) |
(1,103) |
|
|
|
______ |
______ |
______ |
______ |
|
(Loss)/profit before income tax |
|
(2,255) |
(3,641) |
(5,896) |
7,675 |
|
|
|
|
|
|
|
|
Income tax credit/(expense) |
6 |
893 |
1,020 |
1,913 |
(2,230) |
|
|
|
_______ |
______ |
______ |
_______ |
|
(Loss)/profit from continuing operations |
|
(1,362) |
(2,621) |
(3,983) |
5,445 |
|
|
|
|
|
|
|
|
Discontinued operation |
|
|
|
|
|
|
Loss net of income tax |
|
- |
- |
- |
(375) |
|
|
|
|
|
|
|
|
(Loss)/profit for the year(attributable to |
|
_______ |
_______ |
______ |
_______ |
|
equity holders of the parent) |
4 |
(1,362) |
(2,621) |
(3,983) |
5,070 |
|
|
|
_______ |
_______ |
_______ |
_______ |
|
|
|
|
|
|
|
|
Basic (loss)/earnings per share |
7 |
|
|
(10.7p) |
13.5p |
|
|
|
|
|
|
|
|
Diluted (loss)/earnings per share |
7 |
|
|
(10.7p) |
13.1p |
|
|
|
|
|
|
|
|
Continuing operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic (loss)/earnings per share |
7 |
|
|
(10.7p) |
14.5p |
|
|
|
|
|
|
|
|
Diluted (loss)/earnings per share |
7 |
|
|
(10.7p) |
14.1p |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2009
|
|
2009 |
|
2008 |
|
|
£000 |
|
£000 |
|
|
|
|
|
|
(Loss)/profit for the year |
(3,983) |
|
5,070 |
|
|
|
|
|
|
Actuarial gain/(loss) on defined benefit pension plan |
474 |
|
(2,169) |
|
Tax on items taken directly to equity |
(133) |
|
607 |
|
Cash flow hedges: |
|
|
|
|
Effective portion of changes in fair value |
48 |
|
( 348) |
|
|
|
|
|
|
Net expense recognised directly in equity |
389 |
|
(1,910) |
|
|
______ |
|
_______ |
|
Total recognised income and expense (attributable to equity holders of the parent) |
(3,594) |
|
3,160 |
|
|
______ |
|
_______ |
CONSOLIDATED BALANCE SHEET
as at 31 December 2009
|
|
|
|
|
|
|
|
2009 |
2008 |
|
|
|
£000 |
£000 |
|
|
Note |
|
|
|
Assets |
|
|
|
|
Non-current assets |
|
|
|
|
Property, plant and equipment |
|
11,780 |
13,025 |
|
Intangible assets |
|
14,641 |
14,714 |
|
Deferred tax assets |
|
1,478 |
1,803 |
|
|
|
_______ |
_______ |
|
Total non-current assets |
|
27,899 |
29,542 |
|
|
|
_______ |
_______ |
|
Current assets |
|
|
|
|
Inventories |
8 |
10,551 |
12,593 |
|
Trade and other receivables |
9 |
28,431 |
32,233 |
|
Income tax receivable |
|
1,971 |
- |
|
Cash and cash equivalents |
|
461 |
4,736 |
|
|
|
_______ |
_______ |
|
Total current assets |
|
41,414 |
49,562 |
|
|
|
|
|
|
|
|
_______ |
_______ |
|
Total assets |
4 |
69,313 |
79,104 |
|
|
|
_______ |
_______ |
|
Liabilities |
|
|
|
|
Current liabilities |
|
|
|
|
Interest-bearing loans and borrowings |
10 |
(2,572) |
(1,531) |
|
Derivative financial instruments |
|
(351) |
(399) |
|
Income tax payable |
|
- |
(1,148) |
|
Trade and other payables |
11 |
(23,382) |
(28,240) |
|
|
|
_______ |
_______ |
|
Total current liabilities |
|
(26,305) |
(31,318) |
|
|
|
_______ |
_______ |
|
Non-current liabilities |
|
|
|
|
Interest-bearing loans and borrowings |
10 |
(17,311) |
(14,880) |
|
Retirement benefit obligations |
|
(5,279) |
(6,441) |
|
Deferred tax liabilities |
|
(556) |
(907) |
|
|
|
_______ |
_______ |
|
Total non-current liabilities |
|
(23,146) |
(22,228) |
|
|
|
_______ |
_______ |
|
Total liabilities |
|
(49,451) |
(53,546) |
|
|
|
_______ |
_______ |
|
Net assets |
|
19,862 |
25,558 |
|
|
|
_______ |
_______ |
|
Equity |
|
|
|
|
Issued share capital |
|
3,853 |
3,853 |
|
Share premium |
|
7,013 |
7,013 |
|
Other reserves |
|
2,827 |
2,779 |
|
Revenue reserves |
|
6,169 |
11,913 |
|
|
|
_______ |
_______ |
|
Total equity attributable to equity holders of the parent |
|
19,862 |
25,558 |
|
|
|
_______ |
_______ |
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 December 2009
|
|
|
|
|
|
|
|
2009 |
2008 |
|
|
|
£000 |
£000 |
|
Cash flows from operating activities |
|
|
|
|
(Loss)/profit for the year |
|
(3,983) |
5,070 |
|
Adjustments for: |
|
|
|
|
Depreciation of property, plant and equipment |
|
1,821 |
1,811 |
|
Amortisation of intangible assets |
|
475 |
441 |
|
Impairment losses on assets classified as held for sale |
|
- |
244 |
|
Loss on sale of property, plant and equipment |
|
157 |
1 |
|
Net financing costs (before exceptional items) |
|
1,041 |
1,103 |
|
IFRS 2 charge and net movements relating to equity- settled plans |
|
(330) |
210 |
|
Loss on sale of asset held for resale |
|
- |
379 |
|
Income tax (credit) / expense |
|
(1,913) |
2,084 |
|
Operating cash flows before changes in working capital and provisions
|
|
(2,732) |
11,343 |
|
Decrease/(increase) in trade and other receivables |
|
3,802 |
(5,861) |
|
Decrease/(increase) in inventories |
|
2,042 |
(1,260) |
|
(Decrease)/increase in trade and other payables |
|
(4,788) |
2,214 |
|
Movement relative to defined benefit pension scheme |
|
(1,017) |
(867) |
|
|
|
_______ |
_______ |
|
Cash (used in)/generated from operations |
|
(2,693) |
5,569 |
|
|
|
_______ |
_______ |
|
Interest paid |
|
(691) |
(1,121) |
|
Income taxes paid |
|
(1,365) |
(1,905) |
|
|
|
_______ |
_______ |
|
Net cash (used in)/from operating activities |
|
(4,749) |
2,543 |
|
|
|
_______ |
_______ |
|
Cash flows from investing activities |
|
|
|
|
Disposal of discontinued operation net of cash disposed of |
|
(91) |
192 |
|
Acquisition of property, plant and equipment |
|
(733) |
(720) |
|
Acquisition of intangible assets |
|
(402) |
(502) |
|
|
|
_______ |
_______ |
|
Net cash used in investing activities |
|
(1,226) |
(1,030) |
|
|
|
_______ |
_______ |
|
Cash flows from financing activities |
|
|
|
|
Increase in bank loans |
|
5,000 |
- |
|
Repayment of loan notes |
|
- |
(476) |
|
Repayment of bank borrowings |
|
(996) |
(997) |
|
Repayment of finance lease/HP liabilities |
|
(532) |
(329) |
|
New finance leases/HP contracts |
|
- |
2,350 |
|
Dividends paid |
|
(1,772) |
(1,772) |
|
|
|
_______ |
_______ |
|
Net cash from/(used in) financing activities |
|
1,700 |
(1,224) |
|
|
|
_______ |
_______ |
|
Net (decrease)/increase in cash and cash equivalents |
|
(4,275) |
289 |
|
Cash and cash equivalents at 1 January |
|
4,736 |
4,447 |
|
|
|
_______ |
_______ |
|
Cash and cash equivalents at 31 December |
|
461 |
4,736 |
|
|
|
_______ |
_______ |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2009
|
|
Share capital |
Share prem-ium |
Merger reserve |
Hedg-ing reserve |
Other reserve |
Revenue reserve |
Total |
|
|
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
|
Current period |
|
|
|
|
|
|
|
|
At 1 January 2009 |
3,853 |
7,013 |
2,184 |
(399) |
994 |
11,913 |
25,558 |
|
Total comprehensive income for the period |
- |
- |
- |
48 |
- |
(3,642) |
(3,594) |
|
Movements relating to share-based payments and the ESOP trust |
- |
- |
- |
- |
- |
(330) |
(330) |
|
Dividends to shareholders |
- |
- |
- |
|
- |
(1,772) |
(1,772) |
|
At 31 December 2009 |
3,853 |
7,013 |
2,184 |
(351) |
994 |
6,169 |
19,862 |
|
|
|
|
|
|
|
|
|
|
Previous period |
|
|
|
|
|
|
|
|
At 1 January 2008 |
3,853 |
7,013 |
2,184 |
(51) |
994 |
9,967 |
23,960 |
|
Total comprehensive income for the period |
- |
- |
- |
(348) |
- |
3,508 |
3,160 |
|
Movements relating to share-based payments and the ESOP trust |
- |
- |
- |
- |
- |
210 |
210 |
|
Dividends to shareholders |
- |
- |
- |
|
- |
(1,772) |
(1,772) |
|
At 31 December 2008 |
3,853 |
7,013 |
2,184 |
(399) |
994 |
11,913 |
25,558 |
NOTES TO THE STATEMENTS
1. The financial information set out above does not constitute the Company's statutory accounts for the years ended 31 December 2009 or 2008 but is derived from the 2009 accounts. Statutory accounts for 2008 have been delivered to the Registrar of Companies and those for 2009 will be delivered in due course. The auditors have reported on those accounts; their reports (i) were unqualified, (ii) did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their reports and (iii) did not contain statements under either section 498(2) or section 498(3) of the Companies Act 2006.
2. Basis of consolidation
The consolidated financial statements comprise Havelock Europa PLC and its subsidiaries. The financial statements of subsidiaries are prepared to the same reporting date using accounting policies consistent with those of the parent company. Intra-group transactions and balances, including any unrealised gains and losses or income and expenses arising from intra-group transactions, are eliminated in full.
3. Profit before tax
|
|
|
Cost of sales |
Administrative |
Total |
|||
|
|
|
costs |
|
|
|||
|
|
|
2009 |
2008 |
2009 |
2008 |
2009 |
2008 |
|
|
Note |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
|
Profit before tax is stated after charging/(crediting): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation of property, plant and equipment |
|
881 |
901 |
940 |
910 |
1,821 |
1,811 |
|
Amortisation of intangible assets |
|
- |
- |
475 |
441 |
475 |
441 |
|
(Loss)/gain on sale of property, plant and equipment |
|
(157) |
- |
- |
1 |
(157) |
1 |
|
Non-recurring property costs |
|
- |
- |
- |
300 |
- |
300 |
4. Segment reporting
The Group has adopted IFRS 8 Operating Segments in the year. As required by this standard, the Group's operating segments have been determined based on the management information provided to the main board which takes the role of Chief Operating Decision Maker in the Group. This information is presented by business activity and, within each reporting segment, operating segments have been aggregated as they are considered to be economically similar and meet the aggregation criteria as set out in IFRS 8. The Group has concluded that the Group's reportable business segments are presented by product/service as follows:
·; Retail Interiors - design, manufacture and installation of interiors for retailers, financial services, hotels and healthcare premises;
·; Educational Interiors - design, manufacture and installation of classrooms, fitted and loose furniture, teaching aids, display boards and fume cupboards for the education sector;
·; Point of Sale - printing of promotional graphics for use in retail, financial services and branded goods businesses.
. An analysis of the Group's revenue and results by operating segment for the year is presented below.
|
|
Retail Interiors |
Educational Interiors |
Point of Sale |
Elimination |
Total |
|||||
|
|
2009 |
2008 |
2009 |
2008 |
2009 |
2008 |
2009 |
2008 |
2009 |
2008 |
|
|
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
External sales |
31,939 |
60,449 |
56,839 |
52,055 |
19,702 |
25,073 |
- |
- |
108,480 |
137,577 |
|
Inter-segment sales |
574 |
1,380 |
479 |
551 |
34 |
39 |
(1,087) |
(1,970) |
- |
- |
|
|
32,513 |
61,829 |
57,318 |
52,606 |
19,736 |
25,112 |
(1,087) |
(1,970) |
108,480 |
137,577 |
|
Operating (loss)/ profit before net restructuring costs |
(1,538) |
3,728 |
(1,427) |
2,643 |
3,105 |
4,665 |
- |
- |
140 |
11,036 |
|
Net restructuring costs (excluding central restructuring costs) |
(1,541) |
- |
(1,797) |
- |
(78) |
- |
- |
- |
(3,416) |
- |
|
Unallocated costs (including central restructuring costs of £45,000) |
|
|
|
|
|
|
|
|
(1,399) |
(2,258) |
|
(Loss)/profit from operations |
(3,079) |
3,728 |
(3,224) |
2,643 |
3,027 |
4,665 |
- |
- |
(4,675) |
8,778 |
|
Net financing costs (including restructuring costs of £180,000) |
|
|
|
|
|
|
|
|
(1,221) |
(1,103) |
|
(Loss)/profit before tax |
|
|
|
|
|
|
|
|
(5,896) |
7,675 |
|
Tax |
|
|
|
|
|
|
|
|
1,913 |
(2,230) |
|
Discontinued operations net of tax |
|
|
|
|
|
|
|
|
- |
(375) |
|
(Loss)/profit for the year |
|
|
|
|
|
|
|
|
(3,983) |
5,070 |
|
Depreciation and amortisation |
464 |
439 |
939 |
946 |
837 |
815 |
- |
- |
2,240 |
2,200 |
|
Unallocated depreciation |
|
|
|
|
|
|
|
|
56 |
52 |
|
Total amortisation and depreciation |
|
|
|
|
|
|
|
|
2,296 |
2,252 |
Segment assets
|
|
Retail Interiors |
Educational Interiors |
Point of Sale |
Unallocated |
Total |
|||||
|
|
2009 |
2008 |
2009 |
2008 |
2009 |
2008 |
2009 |
2008 |
2009 |
2008 |
|
|
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock and debtors |
14,546 |
18,940 |
19,336 |
19,723 |
4,588 |
5,671 |
512 |
492 |
38,982 |
44,826 |
|
Property, plant, equipment and software |
2,576 |
2,876 |
3,778 |
4,054 |
5,676 |
6,315 |
565 |
445 |
12,595 |
13,690 |
|
Total segment assets |
17,122 |
21,816 |
23,114 |
23,777 |
10,264 |
11,986 |
1,077 |
937 |
51,577 |
58,516 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible assets (excluding software) |
|
|
|
|
|
|
|
|
13,826 |
14,049 |
|
Deferred tax assets |
|
|
|
|
|
|
|
|
1,478 |
1,803 |
|
Current tax assets |
|
|
|
|
|
|
|
|
1,971 |
- |
|
Cash and cash equivalents |
|
|
|
|
|
|
|
|
461 |
4,736 |
|
Total assets |
|
|
|
|
|
|
|
|
69,313 |
79,104 |
5. Exceptional costs
An analysis of exceptional costs is as follows:
2009
£000
Costs of integration of business units (note (a)) 3,260
Other restructuring costs (note (b)) 201
3,461
Charged to financing costs:
Bank fees (note (c)) 180
Total exceptional costs 3,641
(a) During the period, the manufacturing operation at Dalgety Bay was transferred to Kirkcaldy and the Havelock Interiors business was integrated with ESA McIntosh. The costs comprise redundancy, removal and exceptional operating costs directly related to the integration.
(b) Redundancy costs were incurred in the restructuring of the Educational Supplies and Point of Sale businesses.
(c) Fee paid in respect of waiver of bank covenant.
6. Income tax expense
Recognised in the income statement
|
Continuing operations |
|
|
|
|
|
|
2009 |
2008 |
|
|
|
£000 |
£000 |
|
Current tax credit/(expense) |
|
|
|
|
Current year |
|
1,684 |
(2,326) |
|
Adjustments for prior years |
|
70 |
217 |
|
|
|
1,754 |
(2,109) |
|
|
|
|
|
|
Deferred tax credit/(expense) |
|
|
|
|
Origination and reversal of temporary differences |
|
8 |
(165) |
|
Adjustments for prior years |
|
151 |
44 |
|
|
|
159 |
(121) |
|
Total tax credit/(expense) in respect of continuing operations |
|
1,913 |
(2,230) |
|
Discontinued operations |
|
- |
146 |
|
Total income tax credit/(expense) recognised in the consolidated income statement |
|
1,913 |
(2,084) |
7. Earnings per share
The calculation of basic earnings per share and underlying earnings per share at 31 December 2009 is based on the profit attributable to ordinary shareholders as follows:
|
|
2009 |
2008 |
2009 |
2008 |
|
|
Earnings |
Earnings |
EPS |
EPS |
|
|
£000 |
£000 |
pence |
pence |
|
Basic |
(3,983) |
5,070 |
(10.7) |
13.5 |
|
Adjusted for: |
|
|
|
|
|
Exceptional items (net of associated tax credit) |
2,621 |
- |
7.0 |
- |
|
Amortisation of intangibles that attract no corporate tax deduction |
223 |
296 |
0.6 |
0.7 |
|
Adjusted |
(1,139) |
5,366 |
(3.1) |
14.2 |
|
Diluted (loss)/earnings per share |
|
|
(10.7) |
13.1 |
|
Diluted adjusted (loss)/earnings per share |
|
|
(3.1) |
13.9 |
Continuing operations
|
|
2009 |
2008 |
2009 |
2008 |
|
|
Earnings |
Earnings |
EPS |
EPS |
|
|
£000 |
£000 |
pence |
pence |
|
Basic |
(3,983) |
5,445 |
(10.7) |
14.5 |
|
Adjusted for: |
|
|
|
|
|
Exceptional items (net of associated tax credit) |
2,621 |
- |
7.0 |
- |
|
Amortisation of intangibles that attract no corporate tax deduction |
223 |
296 |
0.6 |
0.7 |
|
Adjusted |
(1,139) |
5,741 |
(3.1) |
15.2 |
|
Diluted (loss)/earnings per share |
|
|
(10.7) |
14.1 |
|
Diluted adjusted (loss)/earnings per share |
|
|
(3.1) |
14.9 |
Amortisation of intangible assets
|
|
2009 |
2008 |
|
|
£000 |
£000 |
|
Total amortisation of intangible assets |
475 |
441 |
|
Less amortisation of computer software |
(252) |
(145) |
|
Amortisation of intangibles that attract no tax deduction |
223 |
296 |
The weighted average number of shares used in each calculation is as follows:
Undiluted earnings per share
|
In thousands of shares |
|
|
|
|
|
|
2009 |
2008 |
|
|
|
|
|
|
Issued ordinary shares at 1 January |
|
38,532 |
38,532 |
|
Effect of own shares held |
|
(1,264) |
(852) |
|
Weighted average number of ordinary shares for the year ended 31 December |
|
37,268 |
37,680 |
Diluted earnings per share
|
In thousands of shares |
|
|
|
|
|
|
2009 |
2008 |
|
|
|
|
|
|
Weighted average number of ordinary shares for the year ended 31 December |
|
37,268 |
37,680 |
|
Effect of share options on issue |
|
1,085 |
985 |
|
Weighted average number of ordinary shares (diluted) for the year ended 31 December |
|
38,353 |
38,665 |
|
|
2009 |
2008 |
|
|
£000 |
£000 |
|
Raw materials and consumables |
3,975 |
3,446 |
|
Work in progress |
2,202 |
1,987 |
|
Finished goods |
4,374 |
7,160 |
|
|
10,551 |
12,593 |
9. Trade and other receivables
|
|
2009 |
2008 |
|
|
£000 |
£000 |
|
Trade receivables |
27,157 |
30,886 |
|
Other receivables |
216 |
154 |
|
Prepayments |
1,058 |
1,193 |
|
|
28,431 |
32,233 |
10. Interest-bearing loans and borrowings
|
|
|
|
|
Current liabilities |
2009 |
2008 |
|
|
£000 |
£000 |
|
Secured bank loans |
2,000 |
1,000 |
|
Obligations under hire purchase contracts and finance leases |
572 |
531 |
|
|
2,572 |
1,531 |
|
|
|
|
|
Non-current liabilities |
2009 |
2008 |
|
|
£000 |
£000 |
|
Secured bank loans |
15,981 |
12,977 |
|
Obligations under hire purchase contracts and finance leases |
1,330 |
1,903 |
|
|
17,311 |
14,880 |
11. Trade and other payables
Amounts disclosed in current liabilities
|
|
|
|
|
|
2009 |
2008 |
|
|
£000 |
£000 |
|
Trade payables |
15,692 |
20,373 |
|
Other taxes and social security |
2,285 |
3,204 |
|
Accruals |
5,405 |
4,663 |
|
|
23,382 |
28,240 |
12. Bank facilities
Subsequent to the year end, new facilities have been agreed with Bank of Scotland which are as follows:
·; A committed working capital facility of £5.5 million, reducing to £5.0 million on 1 July 2010 and to £4.5 million on 1 January 2011, is available until it is next reviewed on 31 July 2011.
·; An increased, committed revolving credit facility of £12.5 million is available until 31 July 2012.
·; The existing £13.0 million term loan, on which annual repayments remain at £2.0 million each September, will now end in 2013 instead of 2015.
·; Existing HP drawings, which total £1.8 million, will remain in place.
The costs of renegotiating these bank facilities will be charged as an exceptional cost in 2010. The interest margin that the Group pays for its bank facilities has increased and most of its borrowings will now be based on LIBOR interest rates instead of base rates. The Group maintains its existing level of interest cover with approximately £7m of its debt set at fixed interest rates.
13. The accounts for the year ended 31 December 2009 were approved by the Directors on 29 April 2010.
Related Shares:
Havelock Europa