Interim Results
29 Novembro 2001 - 5:01AM
UK Regulatory
RNS Number:8758N
International Greetings PLC
29 November 2001
For immediate release 29 November 2001
Interim results and trading statement
Agreement signed with Manchester United
International Greetings PLC, one of the world's leading designers and
manufacturers of greeting products and licensed stationery, today reported an
11% rise in pre-tax profits for the six months ended 30 September 2001.
H I G H L I G H T S
* Turnover up 25% to #47.4m (2000: #37.9m)
* Pre-tax profits up 11% at #3m (2000: #2.7m)
* EPS up 11% at 5p (2000: 4.5p)
* Interim dividend maintained at 1.2p per share
* Three year agreement signed with Manchester United
* Management and production problems in UK gift wrap impact upon full year
outlook
* Appointment of additional Non-executive Director
Joint Chief Executive, Nick Fisher, commented:
"We are delighted to deliver another strong set of results at the interim
stage, demonstrating that our growth strategy has been successful. However, we
are clearly disappointed in the performance of the UK gift wrap division,
where management and production problems have marred what would otherwise have
been a confident outlook for the full year.
"We have taken prompt action to remedy the situation and management changes
have been made. Anders Hedlund, Joint Chief Executive and founder, has
returned to the day to day running of the division and, although profits will
suffer this year, we have maintained customer service levels and goodwill,
ensuring that our business in the longer term remains robust."
-ends-
For further information, please contact:
International Greetings 01707 630630
Nick Fisher
Grandfield 020 7417 4170
Clare Abbot/Laura Foster
INTERIM RESULTS AND TRADING STATEMENT 2001
The results for the six months to 30 September 2001 reflect our strategy of
organic growth and market share enhancement in each of the Group's main
divisions. Turnover for the period was up by 25% to #47.4m. Profit before tax
was up by 11% to #3m, after exceptional costs of #317,000, resulting from an
unpaid claim against the company's previous insurers, Independent Insurance.
Earnings per share increased by 11% to 5p per share.
This growth strategy has proved to be successful, and with the exception of
the UK gift wrap division, all other Group companies are currently trading in
line with or ahead of our expectations. Unfortunately, the sales growth
achieved at the UK gift wrap division was offset by unforeseen management and
production problems. A full review has taken place and the necessary
management changes have been made. Anders Hedlund, Joint Chief Executive, has
returned to the day to day running of the division and an ongoing review of
the operational structure is taking place.
With customer service being considered key to the success of our business,
priority has been given to maintaining this. The additional cost of this,
together with costs associated with management and production problems, will
have a major impact on the profitability of the division in the second half of
the current financial year. As this division has historically accounted for
approximately 30% of Group profit, this problem will result in a reduction in
the Group's profit for the full year to a level materially below current
market expectations. We are confident however that this division will make a
strong recovery as a result of our review and the changes already in progress.
In the US we have continued to maximise the opportunities afforded by our
position as market leader in the premium gift wrap sector and, even in the
current climate, have identified new growth opportunities. In the UK Copywrite
has firmly established itself as the leading supplier of licensed stationery
with Pepperpot, acquired last year, making significant progress in the gift
stationery sector.
Design and licensing remains at the forefront of our business and I am
delighted to announce that, consistent with our portfolio approach to
licensing strong brands, we have signed a three year agreement with Manchester
United to produce our core greetings products from Spring 2002. With the
enormous success of the film launch, sales of the Harry Potter range have
exceeded our internal expectations.
I am pleased to report the appointment of an additional non-executive Director
to the Board. With considerable experience in the retail sector, Hugh Child, a
Chartered Accountant, was previously Joint Managing Director of Peacock's
Stores Ltd., where he joined as Finance Director. His experience in, and
knowledge of retailing, Far East sourcing, buying and logistics, will make an
invaluable contribution to the Group.
Notwithstanding the global economic climate, our business continues to be
resilient. Retail Christmas sales to date are very encouraging and with
service levels and delivery performance meeting our customers' requirements,
we are optimistic regarding commitments for the Christmas 2002 order book.
We remain confident in the underlying strength of the business. Reflecting
this, your Board proposes to maintain the interim dividend at last year's
level of 1.2p per share. The dividend will be paid on 15 January 2002 to all
shareholders on the register on 4 January 2002.
Group Profit & Loss Account
Six months ended 30th September 2001
Unaudited Unaudited Audited
6 months to 6 months to year ended
30 September 30 September 31 March
2001 2000 2001
#000 #000 #000
Turnover
Continuing 47,355 36,733 92,028
Acquisitions - 1,193 3,316
47,355 37,926 95,344
Operating profit/(loss) - see Note 4
below
Continuing 4,009 3,424 11,857
Acquisitions - (156) 62
4,009 3,268 11,919
Interest payable (1051) (615) (1,399)
Profit before taxation 2,958 2,653 10,520
Taxation (928) (826) (3,248)
Profit after taxation 2,030 1,827 7,272
Dividend (490) (489) (1,836)
Retained profit 1,540 1,338 5,436
Earnings per share 5.0p 4.5p 17.9p
Diluted earnings per share 4.8p 4.4p 17.3p
Dividend per ordinary share 1.2p 1.2p 4.5p
Note:
1. The figures for the year ended 31 March 2001 are an abridged version of the
published accounts, which have been reported on without qualification by
the auditors, and without any statement under Section 237 (2) or (3) of
the Companies Act 1985, and have been delivered to the Registrar of
Companies.
2. The calculation of earnings per share is based on 40,808,924 (6 months to
September 2000: 40,670,091, 12 months to 31 March 2001: 40,697,466)
ordinary shares being the average number of shares in issue during the
period. The calculation of diluted earnings per share is based on
42,088,336 (6 months to 30 September 2000 : 41,980,353, 12 months to 31
March 2001: 42,081,299) ordinary shares calculated in accordance with FRS
14.
3. The taxation charge for the six months ended 30th September 2001 is based
on the estimated tax rate for the full year.
4. Operating profit is stated after allowing for an exceptional cost of #
317,000 representing full provision against an insurance claim debtor. In
June this year, the company's insurers, Independent Insurance Company, was
put into liquidation. As a result, the company now ranks as an unsecured
creditor and it has assumed that no distribution will be received from the
liquidator in respect of this claim.
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