5th Jun 2006 07:01
Theo Fennell PLC05 June 2006 5 June 2006 Theo Fennell PLC ("Theo Fennell" or "the Group") Preliminary Results for the year ended 31 March 2006 HIGHLIGHTS: Financial - a record year on all fronts • Turnover up 20% at £19.4 million (2005: £16.2 million) • Seven-fold increase in profit before tax of £732,451 (£105,988 in 2005) • EBITDA of nearly £4 million before central costs and £1.2 million after central costs • Strong growth against modest capital investment of £359,293 • Positive cash flow of £318,607 Operational - increased overseas footprint • 'Arts collection launched in 2005; one of our most successful jewellery launches • Overseas openings in Dubai, Hong Kong and Maldives have all met expectations. • Theo Fennell to launch in Moscow in July 2006 • Exceptional performances at the flagship Fulham Road store, Harrods Fine Jewellery room and the City shop in the Royal Exchange building • Duty free representation extended to Terminal 1 at Heathrow Airport Outlook - 2005 momentum continues into 2006 • Strong start to 2006 • Targeting aggressive overseas and UK expansion • Looking at the correct strategic option to further expand the business Richard Northcott, Chairman commented: "2005/2006 was a record year for Theo Fennell, with the Group performing well inall areas. I am delighted that the investment in the business over the lastthree years together with the established Management Team is now generatingstronger profitability. With a largely untapped overseas market and further UKdemand, the Group could not be better positioned for the future." 5 June 2006 Theo Fennell Richard Northcott 020 7591 5000 [email protected] Pelham Public Relations James Henderson 020 7743 6673 [email protected] Theo Fennell PLC CHAIRMAN'S STATEMENT 2006 was a record year for Theo Fennell with the Group increasing sales andprofits whilst expanding overseas. All sectors of the business grew. Overallsales were up 20% at £19.4 million compared to £16.2 million last year. Profitbefore tax rose almost seven fold at £732,451 compared to £105,988 in 2005.EBITDA before central costs was £3.9 million and £1.2 million after centralcosts. Earnings per share were 3.04p (2005: 0.39p). These results are a testament tothe strength of Theo Fennell today, given the current difficult retailconditions. The above was achieved with very modest capital expenditure of £359,293. TheGroup balance sheet is strong with a positive cash flow of £318,607 during theyear. Operational Update All stores and concessions have flourished, with excellent performances andimproved numbers on last year. Both Harrods Fine Jewellery room and the FulhamRoad flagship store have had an exceptional year, but another of the real starshas been the City shop in the Royal Exchange building. This year was the beginning of Theo Fennell's ambitious overseas expansion plan.The Group opened in Hong Kong and Dubai and sales to date have met expectations.We continue to look at other opportunities overseas. Duty Free representationwas extended to Terminal 1 at Heathrow Airport in addition to the alreadyexisting Terminals 3 and 4. Our resort destination stores in Barbados and theMaldives have performed well. We have been looking at opportunities to move into the important Russian marketfor some time. I am delighted that we have recently concluded a wholesaleagreement which will see Theo Fennell launched in a prominent jewellery store inMoscow in July this year. This is the first step in a number of plannedinitiatives for the Russian market. Licence Arrangements "TomFoolery" at Designers at Debenhams continues to do well. Theo Fennell fragrance will have a major launch in February 2007 and weanticipate significant additional income from these licensing deals. Product The "Arts" range, launched last year, was one of our most successful jewellerylaunches and epitomises what is distinctive about Theo Fennell; it is acollection that includes charm and humour, vibrant colours, but above allbeautifully realised designs. The distinctive Trellis range, also launched last year, which includes a numberof iconic signature pieces was another strong performer. In addition, there hasbeen continued demand for haute couture pieces for which Theo is renowned. Corporate Development The Group is delivering to its business plan, however we are cognisant of thefact that our current market value is unrealistic for reasons unassociated withthe business and therefore does not reflect either the global potential of thebrand or the profitability of the business. As we reported in November 2005,the Group had received an approach regarding a potentially significantinvestment in Theo Fennell. Since that time we have received other approachesfrom a number of interested parties with whom we are in discussion. These talkscontinue, however, the Board will only conclude a transaction which it believesto reflect fully the value of the business and is in the best interests of theshareholders and international development of the brand. Outlook 2005 was a record year for Theo Fennell, and this momentum has continued into2006 with the Group experiencing strong sales in the first two months of thisyear. The Company has now moved into a more profitable stage, with demandincreasing significantly. The perception and positioning of the brand is firmlyestablished and maintained by creative and imaginative marketing initiatives.With further overseas expansion and development underway we have every reason toview the future with great confidence. Richard Northcott Chairman 5 June 2006 Profit and Loss Account For the year ended 31 March 2006 Unaudited 2006 2005 £ £Turnover 19,433,422 16,266,231 Cost of sales (16,924,808) (14,574,777) Gross profit 2,508,614 1,691,454Administrative expenses (1,639,368) (1,451,356) Operating profit 869,246 240,098 Net interest payable (136,795) (134,110)Profit on ordinary activities before taxation 732,451 105,988Tax on profit on ordinary activities (241,413) (42,579)Retained profit for the year 491,038 63,409Basic earnings per share 3.04p 0.39pDiluted earnings per share 2.77p - There were no recognised gains or losses other than the profit for the financialyear. All turnover arises from continuing operations. Balance Sheetas at 31 March 2006 Unaudited 2006 2005 £ £ £ £Fixed assetsTangible assets 923,983 921,251 Current assetsStocks 8,053,624 7,972,108 Debtors 3,024,332 2,281,609Cash at bank and in hand 12,515 9,638 11,090,471 10,263,355Creditors: amounts falling due within one year (4,347,156) (3,843,417) Net current assets 6,743,315 6,419,938Total assets less current liabilities 7,667,298 7,341,189 Creditors: amounts falling due after more than one year Convertible loan note (1,000,000) (1,000,000)Other (122,768) (287,697) (1,122,768) (1,287,697) Net assets 6,544,530 6,053,492 Capital and reservesCalled up share capital 808,892 808,892 Share premium account 3,879,752 3,879,752 Profit and loss account 1,855,886 1,364,848Equity shareholders' funds 6,544,530 6,053,492 Cash Flow Statement For the year ended 31 March 2006 Unaudited 2006 2005 £ £ £ £Net cash inflow from operating activities 985,984 1,083,686 Returns on investments and servicing of financeInterest paid on bank loans, overdrafts and other loans (182,262) (193,998)Interest element of finance lease payments (14,764) (14,781)Interest received 54,946 58,049 (142,080) (150,730) TaxationCorporation tax paid (1,909) (85,233)Capital expenditurePurchase of tangible fixed assets (359,293) (416,083) (359,293) (416,083)Net cash inflow before financing 482,702 431,640 Financing Capital element of finance lease payments (52,968) (36,604)Bank loan (111,127) 323,297 Increase in cash 318,607 718,333 Notes the Financial StatementsFor the year ended 31 March 2006 1. Tax on profit on ordinary activities The taxation charge is based on the profit for the year and represents: Unaudited 2006 2005 £ £Current tax:UK Corporation tax at 30% (2005: 30%) 219,755 12,031Adjustment in respect of prior years (5,366) (4,756) 214,389 7,275Deferred Tax:Origination and reversal of timing differences 27,024 35,304 241,413 42,579 2. Earnings per share Profit per share is calculated by dividing the profit attributable to ordinaryshareholders by the weighted average number of ordinary shares during the year.Share options are generally dilutive if the exercise price was below the averagemarket price for the year ended 31 March 2006 of £0.32. Unaudited 2005 2006 £ £Profit for the financial year 491,038 63,409Effect of convertible loan note 49,000 -Adjusted profit for dilutive earnings per share 540,038 63,409 Weighted average number of ordinary shares 16,177,831 16,177,831Effect of dilutive share options 12,050 -Effect of convertible loan note 3,333,333 -Adjusted weighted average number of ordinary shares 19,523,214 16,177,831 Earnings per share - basic 3.04p 0.39pEarnings per share - diluted 2.77p - 3. Share Capital Unaudited 2006 2005 £ £Authorised30,000,000 Ordinary Shares of 5p 1,500,000 1,500,000Allotted, called up and fully paid16,177,831 Ordinary Shares of 5p 808,892 808,892 4. Basis of preparation The financial statements have been prepared under the historical cost conventionand in accordance with applicable United Kingdom accounting standards. Theprincipal accounting policies which are set out below have remained unchangedfrom the previous year, apart from the Company recognising the presentation anddisclosure requirement of FRS25. These have been applied consistently in dealingwith items which are considered material in relation to the Company's financialstatements. These polices have been reviewed in accordance with FinancialReporting Standard 18 Accounting Policies. The financial statements have been prepared on a going concern basis whichassumes that the company will continue in operational existence for theforeseeable future, and that the Company's banking facilities will continue tobe available. The directors therefore believe that it is appropriate for thefinancial statements to be prepared on a going concern basis. 5. Dividend The Group does not propose to pay a dividend for the year ended 31 March 2006. 6. Publication of Non-Statutory Accounts The financial information set out in this preliminary announcement does notconstitute statutory accounts as defined in section 240 of the Companies Act1985. The summarised balance sheet at 31 March 2006 and the summarised profitand loss account, summarised cash flow statement and associated notes for theyear then ended have been extracted from the Company's unaudited financialstatements. Those financial statements have not yet been delivered to theregistrar of companies. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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