TIDMIGR
RNS Number : 5551X
International Greetings PLC
08 December 2010
8th December 2010
International Greetings PLC ("the Company" or "the Group")
Interim Results
International Greetings PLC, one of the world's leading designers, innovators
and manufacturers of gift wrap, crackers, cards, stationery and accessories,
announces its Interim Results for the six months ended 30th September 2010 (2010
H1).
Financial highlights
· Sales up 13% to GBP104.5m (2009 H1 restated: GBP92.8m)
· Profit from continuing operations before tax up 110% to GBP2.1m (2009 H1
restated: GBP1.0m); no significant items in the period
· Profit after tax is GBP1.9m (2009 H1 restated: GBP0.3m)
· Operating profit was up 31% to GBP3.8m (2009 H1 restated: GBP2.9m)
· Net debt at 30th September GBP86.4m (2009 H1: GBP101.2m), down 15%
- Increased from 31st March 2010 due to normal seasonal working capital
requirements;
- Debt reduction programme remains on-track
Operational highlights
· Increasing innovation and cross-selling throughout the Group businesses
continues to deliver improved results
· Licences continue to perform well
- Results benefitted from success of Toy Story 3 related product sales
· Board confident in full year outlook
Paul Fineman, Chief Executive said:
"We are pleased that we have continued to deliver on our strategy and improve
the profitability and cash generation of the Group. We have a strong platform
in place and there remains considerable scope for our business to continue to
benefit from knowledge-sharing, cross selling and deriving efficiencies across
the Group.
"We expect conditions to remain challenging, but are pleased with our progress
and excited about the growth opportunities across the international markets in
which we operate."
+-------------------------------+--------+--------------------+
| For further information, | | |
| please contact: | | |
| | | |
+-------------------------------+--------+--------------------+
| International Greetings plc | | Tel: 01707 630617 |
| Paul Fineman, Chief Executive | | |
| Sheryl Tye, Finance Director | | |
| | | |
+-------------------------------+--------+--------------------+
| Arden Partners plc | | Tel: 020 7614 5917 |
| Richard Day | | |
| Fred Walsh | | |
| | | |
+-------------------------------+--------+--------------------+
| Financial Dynamics | | Tel: 020 7831 3113 |
| Jonathon Brill | | |
| Caroline Stewart | | |
| Georgia Mann | | |
+-------------------------------+--------+--------------------+
Chief Executive's Review
Overview
We made good progress in the first half of this year, continuing to deliver on
our strategy and achieving results in line with management's expectations. We
are pleased with the way the Group businesses are working together to improve
efficiencies and innovate new products and processes.
We are progressively reducing our debt and improving the Group's ability to
generate cash. We continue to drive cross-selling opportunities across our
businesses and we are particularly pleased with the sales growth of our everyday
greeting card products.
The Board remains confident that, despite market conditions remaining
challenging, the Group is well positioned for future growth and will continue to
improve shareholder value.
Financial Review
Revenue from continuing operations for the period was GBP104.5m (2009 H1
restated: GBP92.8m). On a constant exchange basis, like-for-like turnover for
the period increased by 6%. This was driven by growth mainly in UK and
Australia.
Gross profit margin at 18.3% (2009 H1 restated: 18.2%) reflects improved margin
performance in UK and USA, with price pressure in mainland Europe and slightly
reduced margin in Australia. It also reflects our continued success to sell
older stock and combat global significant inflationary pressures from raw
materials, sea freight, and in the Far East, from significant inflation in
labour costs and the strengthening Chinese currency.
Whilst underlying overheads were down 3% on a like for like basis, the full year
inclusion of the Group's Australian business, Artwrap PTY, in this period means
that, in total, operational overheads increased by 7% to GBP15.9m (2009 H1
restated: 14.8m).
Operating profit was up 31% to GBP3.7m (2009 H1 restated: GBP2.9m).
Finance expenses in the period were GBP1.6m (2009 H1 restated: GBP1.8m)
reflecting the overall debt reduction throughout the period, which mitigated the
increased bank charges.
Profit before tax was up 110% to GBP2.1m (2009 H1 restated: GBP1.0m).
There were no significant items during the period (2009: H1 nil).
The effective tax rate was 6% (2009 H1 restated: 54%). This reflects a tax
repayment in the USA pursuant to changes in the tax regulation to allow loss
carry back for 3 years, combined with a continuing recognition of losses that
had not previously been reflected on the balance sheet as an asset. There are
still GBP7.7m of tax losses not recognised as an asset in the UK and USA.
Basic earnings per share for the period were 3p (2009 H1 restated: 0.0p).
Net debt at 30th September 2010 was down 15% to GBP86.4m (2009 H1: GBP101.2m).
The usual seasonal working capital increase was as expected. Debt reduction
remains a key focus and our programme for this is on-track.
The Group's banks remain supportive, and further details of the Group's banking
facility are included in note 1 of the Interim Financial Statements.
Debtors and receivables at GBP67.5m are up 14% from GBP59.5m at 2009 H1, and 12%
on like for like exchange rates. This reflects the market trend for later
delivery of goods committed for the Christmas season.
Whilst stock levels are down by 4% from GBP66.0m to GBP63.5m, it is anticipated
that by the year end the stock reduction will be significantly greater.
Capital expenditure in the six months was GBP1.4m (2009 H1: GBP0.7m). The
Group's final commitment to deferred consideration for previous acquisitions was
settled in the period, by the issuance of 1.5m shares.
Cash used by operations was GBP35.7m (2009 H1: GBP28.6m) reflects the
seasonality of the business, as 58% of the sales in the six month period
occurred in the last two months.
As announced in the Annual Report and Accounts, in July 2010 the Board took the
difficult decision to close the Eickpack business. Eickpack made losses each
year since its acquisition in January 2007. The results of Eickpack are now
shown as a discontinued business, and the comparatives have been restated
accordingly. The results of Eickpack are shown in the Notes to the Interim
Statement.
The Board will not be declaring an interim dividend (2009 H1: nil).
Operational Review
Sales in the first half year have grown in line with market expectations whilst
we continue to deliver on our strategy of focusing our key efforts on debt
reduction, cash generation, product innovation and increasing profitability.
We have increasingly developed a cohesive and collaborative approach across all
Group businesses enabling us competitively to provide our customers with high
standards of products and services.
The UK saw an 8% increase in sales, caused by increased Christmas cracker sales
and the commencement of contracts for the supply of Everyday greeting cards with
two of the UK's leading multiple grocery chains.
Whilst US revenues were 6% down on prior year, mainly resulting from later
scheduling of Christmas orders, margins were up by 4% due to the focus on more
profitable sales.
Mainland Europe saw sales increasing by 8% including a strong performance in
Eastern Europe, but margins were impacted through product mix sold during the
period.
Artwrap continues to perform strongly, with like-for-like sales up by 21%. A 3
year contract for Everyday greeting cards has been won with a major retailer,
and the business continues to innovate with online ordering for bespoke
products.
Our portfolio of licences continues to provide considerable commercial appeal
and as anticipated Toy Story 3 licensed products proved to be extremely
successful with sales of over GBP2m during the period.
Current trading/outlook
Since the period end, trading has continued in line with our expectations. The
Christmas period remains an important time of year for the Group and we have
continued to focus on delivering high standards of goods and services to our
customers.
We expect conditions to remain challenging but are pleased with our progress and
excited about the growth opportunities across the international markets in which
we operate.
Paul Fineman
Chief Executive
International Greetings PLC
Interim Report 2010
Consolidated Income Statement
For the six months ended 30 September 2010
+------------------------+-+-----------+----------+-----------+----------+-------------+----------+-------------+----------+-----------+
| | | Unaudited | | Unaudited | | | | | | |
+------------------------+-+-----------+----------+-----------+----------+-------------+----------+-------------+----------+-----------+
| | | six | | six | | | | | | |
| | | months | | months | | | | | | |
+------------------------+-+-----------+----------+-----------+----------+-------------+----------+-------------+----------+-----------+
| | | ended | | ended | | | | 12 | | |
| | | 30 | | 30 | | | | months | | |
+------------------------+-+-----------+----------+-----------+----------+-------------+----------+-------------+----------+-----------+
| | | September | | September | | | | to | | |
| | | | | | | | | March | | |
+------------------------+-+-----------+----------+-----------+----------+-------------+----------+-------------+----------+-----------+
| | | 2010 | | 2009 | | | | 2010 | | |
+------------------------+-+-----------+----------+-----------+----------+-------------+----------+-------------+----------+-----------+
| | | | | restated | | | | restated | | |
+------------------------+-+-----------+----------+-----------+----------+-------------+----------+-------------+----------+-----------+
| | | | | | | | | | | |
+------------------------+-+-----------+----------+-----------+----------+-------------+----------+-------------+----------+-----------+
| | | | | | | Before | | Exceptional | | Total |
+------------------------+-+-----------+----------+-----------+----------+-------------+----------+-------------+----------+-----------+
| | | | | | | exceptional | | items | | |
+------------------------+-+-----------+----------+-----------+----------+-------------+----------+-------------+----------+-----------+
| | | | | | | items | | | | |
+------------------------+-+-----------+----------+-----------+----------+-------------+----------+-------------+----------+-----------+
| | | GBP000 | | GBP000 | | GBP000 | | GBP000 | | GBP000 |
+------------------------+-+-----------+----------+-----------+----------+-------------+----------+-------------+----------+-----------+
| Continuing operations | | | | | | | | | | |
+------------------------+-+-----------+----------+-----------+----------+-------------+----------+-------------+----------+-----------+
| | | | | | | | | | | |
+------------------------+-+-----------+----------+-----------+----------+-------------+----------+-------------+----------+-----------+
| Revenue | | 104,453 | | 92,834 | | 198,246 | | - | | 198,246 |
+------------------------+-+-----------+----------+-----------+----------+-------------+----------+-------------+----------+-----------+
| Cost of sales | | (85,296) | | (75,894) | | (164,530) | | 333 | | (164,197) |
+------------------------+-+-----------+----------+-----------+----------+-------------+----------+-------------+----------+-----------+
| Gross Profit | | 19,157 | | 16,940 | | 33,716 | | 333 | | 34,049 |
+------------------------+-+-----------+----------+-----------+----------+-------------+----------+-------------+----------+-----------+
| | | 18.3% | | 18.2% | | 17.0% | | | | 17.2% |
+------------------------+-+-----------+----------+-----------+----------+-------------+----------+-------------+----------+-----------+
| Selling expenses | | (7,036) | | (6,099) | | (12,039) | | (160) | | (12,199) |
+------------------------+-+-----------+----------+-----------+----------+-------------+----------+-------------+----------+-----------+
| Administration | | (8,844) | | (8,678) | | (16,859) | | (2,181) | | (19,040) |
| expenses | | | | | | | | | | |
+------------------------+-+-----------+----------+-----------+----------+-------------+----------+-------------+----------+-----------+
| Other operating Income | | 501 | | 712 | | 1,643 | | - | | 1,643 |
+------------------------+-+-----------+----------+-----------+----------+-------------+----------+-------------+----------+-----------+
| Disposal of subsidiary | | - | | - | | - | | 907 | | 907 |
+------------------------+-+-----------+----------+-----------+----------+-------------+----------+-------------+----------+-----------+
| (Loss)/profit on sales | | (1) | | - | | 26 | | - | | 26 |
| of property, plant and | | | | | | | | | | |
| equipment | | | | | | | | | | |
+------------------------+-+-----------+----------+-----------+----------+-------------+----------+-------------+----------+-----------+
| Operating | | 3,777 | | 2,875 | | 6,487 | | (1,101) | | 5,386 |
| profit/(loss) | | | | | | | | | | |
+------------------------+-+-----------+----------+-----------+----------+-------------+----------+-------------+----------+-----------+
| | | | | | | | | | | |
+------------------------+-+-----------+----------+-----------+----------+-------------+----------+-------------+----------+-----------+
| Finance expenses | | (1,642) | | (1,792) | | (2,930) | | - | | (2,930) |
+------------------------+-+-----------+----------+-----------+----------+-------------+----------+-------------+----------+-----------+
| Share of loss of | | - | | (39) | | (39) | | - | | (39) |
| associates (net of | | | | | | | | | | |
| tax) | | | | | | | | | | |
+------------------------+-+-----------+----------+-----------+----------+-------------+----------+-------------+----------+-----------+
| Profit/(loss) before | | 2,135 | | 1,044 | | 3,518 | | (1,101) | | 2,417 |
| tax | | | | | | | | | | |
+------------------------+-+-----------+----------+-----------+----------+-------------+----------+-------------+----------+-----------+
| | | | | | | | | | | |
+------------------------+-+-----------+----------+-----------+----------+-------------+----------+-------------+----------+-----------+
| Income tax |6 | (138) | | (568) | | (649) | | 693 | | 44 |
| (charge)/credit | | | | | | | | | | |
+------------------------+-+-----------+----------+-----------+----------+-------------+----------+-------------+----------+-----------+
| Profit/(Loss) from | | 1,997 | | 476 | | 2,869 | | (408) | | 2,461 |
| continuing operations | | | | | | | | | | |
+------------------------+-+-----------+----------+-----------+----------+-------------+----------+-------------+----------+-----------+
| Discontinued | | | | | | | | | | |
| operations | | | | | | | | | | |
+------------------------+-+-----------+----------+-----------+----------+-------------+----------+-------------+----------+-----------+
| Loss from discontinued |3 | (78) | | (213) | | (494) | | (1,263) | | (1,757) |
| operations (net of | | | | | | | | | | |
| tax) | | | | | | | | | | |
+------------------------+-+-----------+----------+-----------+----------+-------------+----------+-------------+----------+-----------+
| Profit/(Loss) for the | | 1,919 | | 263 | | 2,375 | | (1,671) | | 704 |
| year | | | | | | | | | | |
+------------------------+-+-----------+----------+-----------+----------+-------------+----------+-------------+----------+-----------+
| | | | | | | | | | | |
+------------------------+-+-----------+----------+-----------+----------+-------------+----------+-------------+----------+-----------+
| Attributable to: | | | | | | | | | | |
+------------------------+-+-----------+----------+-----------+----------+-------------+----------+-------------+----------+-----------+
| Equity holders of the | | 1,563 | | 18 | | | | | | 55 |
| parent company | | | | | | | | | | |
+------------------------+-+-----------+----------+-----------+----------+-------------+----------+-------------+----------+-----------+
| Non-controlling | | 356 | | 245 | | | | | | 649 |
| interests | | | | | | | | | | |
+------------------------+-+-----------+----------+-----------+----------+-------------+----------+-------------+----------+-----------+
| | | 1,919 | | 263 | | | | | | 704 |
+------------------------+-+-----------+----------+-----------+----------+-------------+----------+-------------+----------+-----------+
| | | | | | | | | | | |
+------------------------+-+-----------+----------+-----------+----------+-------------+----------+-------------+----------+-----------+
| Earnings per ordinary |7 | | | | | | | | | |
| share | | | | | | | | | | |
+------------------------+-+-----------+----------+-----------+----------+-------------+----------+-------------+----------+-----------+
| | | | | | | | | | | |
+------------------------+-+-----------+----------+-----------+----------+-------------+----------+-------------+----------+-----------+
| Basic earnings per | | 3.0 | | 0.0 | | | | | | 0.1 |
| share | | p | | p | | | | | | p |
+------------------------+-+-----------+----------+-----------+----------+-------------+----------+-------------+----------+-----------+
| Diluted earnings per | | 2.7 | | 0.0 | | | | | | 0.1 |
| share | | p | | p | | | | | | p |
+------------------------+-+-----------+----------+-----------+----------+-------------+----------+-------------+----------+-----------+
| | | | | | | | | | | |
+------------------------+-+-----------+----------+-----------+----------+-------------+----------+-------------+----------+-----------+
| Continuing operations | | 3.1 | | 0.4 | | | | | | 3.6 |
| | | p | | p | | | | | | p |
+------------------------+-+-----------+----------+-----------+----------+-------------+----------+-------------+----------+-----------+
| Discontinued | | (0.1 | | (0.4 | | | | | | (3.5 |
| operations | | p) | | p) | | | | | | p) |
+------------------------+-+-----------+----------+-----------+----------+-------------+----------+-------------+----------+-----------+
| | | | | | | | | | | |
+------------------------+-+-----------+----------+-----------+----------+-------------+----------+-------------+----------+-----------+
| Adjusted earnings per | | | | | | | | | | |
| share excluding | | | | | | | | | | |
+------------------------+-+-----------+----------+-----------+----------+-------------+----------+-------------+----------+-----------+
| exceptional items and | | 3.1 | | 0.4 | | | | | | 4.4 |
| discontinued | | p | | p | | | | | | p |
| operations | | | | | | | | | | |
+------------------------+-+-----------+----------+-----------+----------+-------------+----------+-------------+----------+-----------+
International Greetings PLC
Interim Report 2010
Consolidated Statement of Comprehensive Income
For the six months ended 30 September 2010
+------------------------+-+-------------------+----------+-----------+----------+--------+
| | | Unaudited | | Unaudited | | |
+------------------------+-+-------------------+----------+-----------+----------+--------+
| | | six | | six | | |
| | | months | | months | | |
+------------------------+-+-------------------+----------+-----------+----------+--------+
| | | ended | | ended | | 12 |
| | | 30 | | 30 | | months |
+------------------------+-+-------------------+----------+-----------+----------+--------+
| | | September | | September | | to |
| | | | | | | March |
+------------------------+-+-------------------+----------+-----------+----------+--------+
| | | 2010 | | 2009 | | 2010 |
+------------------------+-+-------------------+----------+-----------+----------+--------+
| | | | | restated | | |
+------------------------+-+-------------------+----------+-----------+----------+--------+
| | | GBP000 | | GBP000 | | GBP000 |
+------------------------+-+-------------------+----------+-----------+----------+--------+
| Profit for the period | | 1,919 | | 263 | | 704 |
+------------------------+-+-------------------+----------+-----------+----------+--------+
| | | | | | | |
+------------------------+-+-------------------+----------+-----------+----------+--------+
| Other comprehensive | | | | | | |
| income: | | | | | | |
+------------------------+-+-------------------+----------+-----------+----------+--------+
| Recycling translation | | - | | - | | (907) |
| reserves on closure of | | | | | | |
| subsidiary | | | | | | |
+------------------------+-+-------------------+----------+-----------+----------+--------+
| Exchange difference on | | (380) | | 590 | | 1,654 |
| translation of foreign | | | | | | |
| operations | | | | | | |
+------------------------+-+-------------------+----------+-----------+----------+--------+
| Net gain on cash flow | | - | | (111) | | - |
| hedges (net of tax) | | | | | | |
+------------------------+-+-------------------+----------+-----------+----------+--------+
| | | | | | | |
+------------------------+-+-------------------+----------+-----------+----------+--------+
| Other comprehensive | | (380) | | 479 | | 747 |
| (loss)/income for | | | | | | |
| period, net of tax | | | | | | |
+------------------------+-+-------------------+----------+-----------+----------+--------+
| | | | | | | |
+------------------------+-+-------------------+----------+-----------+----------+--------+
| Total comprehensive | | 1,539 | | 742 | | 1,451 |
| income for the period, | | | | | | |
| net of tax | | | | | | |
+------------------------+-+-------------------+----------+-----------+----------+--------+
| | | | | | | |
+------------------------+-+-------------------+----------+-----------+----------+--------+
| Attributable to: | | | | | | |
+------------------------+-+-------------------+----------+-----------+----------+--------+
| Equity holders to the | | 1,127 | | 497 | | 265 |
| parent company | | | | | | |
+------------------------+-+-------------------+----------+-----------+----------+--------+
| Non-controlling | | 412 | | 245 | | 1,186 |
| interests | | | | | | |
+------------------------+-+-------------------+----------+-----------+----------+--------+
| | | 1,539 | | 742 | | 1,451 |
+------------------------+-+-------------------+----------+-----------+----------+--------+
International Greetings PLC
Interim Report 2010
Consolidated Statement of Changes in Equity
+-----------------+---------+------------+----------+----------+--------------+----------+--------------+--------------+--------+
| For the six months | | | | | | | | |
| ended 30 September | | | | | | | | |
| 2010 | | | | | | | | |
+---------------------------+------------+----------+----------+--------------+----------+--------------+--------------+--------+
| | Share | Share | Merger | Hedging | Trans-lation | Retained | Share-holder | Non- | Total |
| | capital | premium | reserves | reserves | reserve | earnings | equity | cont-rolling | |
| | | and | | | | | | interest | |
| | | capital | | | | | | | |
| | | redemption | | | | | | | |
| | | reserve | | | | | | | |
+-----------------+---------+------------+----------+----------+--------------+----------+--------------+--------------+--------+
| | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+-----------------+---------+------------+----------+----------+--------------+----------+--------------+--------------+--------+
| At 1 April 2010 | 2,608 | 4,346 | 16,216 | - | 362 | 19,071 | 42,603 | 3,354 | 45,957 |
+-----------------+---------+------------+----------+----------+--------------+----------+--------------+--------------+--------+
| Profit for the | - | - | - | - | - | 1,563 | 1,563 | 356 | 1,919 |
| period | | | | | | | | | |
+-----------------+---------+------------+----------+----------+--------------+----------+--------------+--------------+--------+
| Other | - | - | - | - | (436) | - | (436) | 56 | (380) |
| comprehensive | | | | | | | | | |
| (loss)/income | | | | | | | | | |
+-----------------+---------+------------+----------+----------+--------------+----------+--------------+--------------+--------+
| Total | - | - | - | - | (436) | 1,563 | 1,127 | 412 | 1,539 |
| comprehensive | | | | | | | | | |
| (loss)/income | | | | | | | | | |
| for the period | | | | | | | | | |
+-----------------+---------+------------+----------+----------+--------------+----------+--------------+--------------+--------+
| Equity settled | - | - | - | - | - | 49 | 49 | - | 49 |
| share based | | | | | | | | | |
| payment | | | | | | | | | |
+-----------------+---------+------------+----------+----------+--------------+----------+--------------+--------------+--------+
| Shares issued | 74 | - | 948 | - | - | - | 1,022 | - | 1,022 |
| (note 5) | | | | | | | | | |
+-----------------+---------+------------+----------+----------+--------------+----------+--------------+--------------+--------+
| At 30 September | 2,682 | 4,346 | 17,164 | - | (74) | 20,683 | 44,801 | 3,766 | 48,567 |
| 2010 | | | | | | | | | |
+-----------------+---------+------------+----------+----------+--------------+----------+--------------+--------------+--------+
+-----------------+---------+------------+----------+----------+--------------+----------+--------------+------------------+--------+
| For the six months ended 30 | | | | | | | |
| September 2009 restated | | | | | | | |
+----------------------------------------+----------+----------+--------------+----------+--------------+------------------+--------+
| | Share | Share | Merger | Hedging | Trans-lation | Retained | Share-holder | Non-cont-rolling | Total |
| | capital | premium | reserves | reserves | reserve | earnings | equity | interest | |
| | | and | | | | | | | |
| | | capital | | | | | | | |
| | | redemption | | | | | | | |
| | | reserve | | | | | | | |
+-----------------+---------+------------+----------+----------+--------------+----------+--------------+------------------+--------+
| | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+-----------------+---------+------------+----------+----------+--------------+----------+--------------+------------------+--------+
| At 1 April 2009 | 2,425 | 4,346 | 14,885 | - | 152 | 18,934 | 40,742 | - | 40,742 |
| restated | | | | | | | | | |
+-----------------+---------+------------+----------+----------+--------------+----------+--------------+------------------+--------+
| Profit for the | - | - | - | - | - | 18 | 18 | 245 | 263 |
| period | | | | | | | | | |
+-----------------+---------+------------+----------+----------+--------------+----------+--------------+------------------+--------+
| Other | - | - | - | (111) | 590 | - | 479 | - | 479 |
| comprehensive | | | | | | | | | |
| (loss)/income | | | | | | | | | |
| restated | | | | | | | | | |
+-----------------+---------+------------+----------+----------+--------------+----------+--------------+------------------+--------+
| Total | - | - | - | (111) | 590 | 18 | 497 | 245 | 742 |
| comprehensive | | | | | | | | | |
| (loss) / income | | | | | | | | | |
| for the period | | | | | | | | | |
+-----------------+---------+------------+----------+----------+--------------+----------+--------------+------------------+--------+
| Equity settled | - | - | - | - | - | 37 | 37 | - | 37 |
| share based | | | | | | | | | |
| payment | | | | | | | | | |
+-----------------+---------+------------+----------+----------+--------------+----------+--------------+------------------+--------+
| Impairment | - | - | (1,331) | - | - | 1,331 | - | - | - |
| transferred | | | | | | | | | |
| from merger | | | | | | | | | |
| reserve to | | | | | | | | | |
| other | | | | | | | | | |
| comprehensive | | | | | | | | | |
| income | | | | | | | | | |
+-----------------+---------+------------+----------+----------+--------------+----------+--------------+------------------+--------+
| Shares issued | 182 | - | 1,331 | - | - | - | 1,513 | - | 1,513 |
+-----------------+---------+------------+----------+----------+--------------+----------+--------------+------------------+--------+
| Acquisition in | - | - | - | - | - | - | - | 2,385 | 2,385 |
| the period | | | | | | | | | |
+-----------------+---------+------------+----------+----------+--------------+----------+--------------+------------------+--------+
| At 30 September | 2,607 | 4,346 | 14,885 | (111) | 742 | 20,320 | 42,789 | 2,630 | 45,419 |
| 2009 restated | | | | | | | | | |
+-----------------+---------+------------+----------+----------+--------------+----------+--------------+------------------+--------+
+-----------------+----------------+-----------------+----------------+----------+-----------------+----------------+------------------+------------------+----------------+
| For the year ended 31 March | | | | | | | |
| 2010 restated | | | | | | | |
+----------------------------------------------------+----------------+----------+-----------------+----------------+------------------+------------------+----------------+
| | Share | Share | Merger | Hedging | Trans-lation | Retained | Share-holder | Non-cont-rolling | Total |
| | capital | premium | reserves | reserves | reserve | earnings | equity | interest | |
| | | and | | | | | | | |
| | | capital | | | | | | | |
| | | redemption | | | | | | | |
| | | reserve | | | | | | | |
+-----------------+----------------+-----------------+----------------+----------+-----------------+----------------+------------------+------------------+----------------+
| | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
| | | | | | | | | | |
+-----------------+----------------+-----------------+----------------+----------+-----------------+----------------+------------------+------------------+----------------+
| At 1 April 2009 | 2,425 | 4,346 | 14,885 | - | 152 | 18,934 | 40,742 | - | 40,742 |
+-----------------+----------------+-----------------+----------------+----------+-----------------+----------------+------------------+------------------+----------------+
| Profit for the | - | - | - | - | - | 55 | 55 | 649 | 704 |
| year | | | | | | | | | |
+-----------------+----------------+-----------------+----------------+----------+-----------------+----------------+------------------+------------------+----------------+
| Other | - | - | - | - | 210 | - | 210 | 537 | 747 |
| comprehensive | | | | | | | | | |
| income | | | | | | | | | |
+-----------------+----------------+-----------------+----------------+----------+-----------------+----------------+------------------+------------------+----------------+
| Total | - | - | - | - | 210 | 55 | 265 | 1,186 | 1,451 |
| comprehensive | | | | | | | | | |
| income for the | | | | | | | | | |
| year | | | | | | | | | |
+-----------------+----------------+-----------------+----------------+----------+-----------------+----------------+------------------+------------------+----------------+
| Equity settled | - | | - | - | - | 82 | 82 | - | 82 |
| share based | | | | | | | | | |
| payment | | | | | | | | | |
+-----------------+----------------+-----------------+----------------+----------+-----------------+----------------+------------------+------------------+----------------+
| Shares issued | 182 | - | 1,331 | - | - | - | 1,513 | - | 1,513 |
+-----------------+----------------+-----------------+----------------+----------+-----------------+----------------+------------------+------------------+----------------+
| Options | 1 | | - | - | - | - | 1 | - | 1 |
| exercised | | | | | | | | | |
+-----------------+----------------+-----------------+----------------+----------+-----------------+----------------+------------------+------------------+----------------+
| Acquisition in | - | - | - | - | - | - | - | 2,168 | 2,168 |
| the year | | | | | | | | | |
+-----------------+----------------+-----------------+----------------+----------+-----------------+----------------+------------------+------------------+----------------+
| At 31 March | 2,608 | 4,346 | 16,216 | | 362 | 19,071 | 42,603 | 3,354 | 45,957 |
| 2010 | | | | - | | | | | |
+-----------------+----------------+-----------------+----------------+----------+-----------------+----------------+------------------+------------------+----------------+
International Greetings PLC
Interim Report 2010
Consolidated Balance Sheet
as at 30 September 2010
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| | | Unaudited | | Unaudited | | |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| | | as at | | as at | | As at |
| | | 30 | | 30 | | |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| | | September | | September | | 31 |
| | | | | | | March |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| | | 2010 | | 2009 | | 2010 |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| | | | | restated | | |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| | Note | GBP000 | | GBP000 | | GBP000 |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Non-current assets | | | | | | |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Property, plant and equipment | | 32,404 | | 36,766 | | 34,199 |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Intangible assets | | 33,047 | | 31,468 | | 33,139 |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Deferred tax assets | | 3,456 | | 3,168 | | 3,501 |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Total non-current assets | | 68,907 | | 71,402 | | 70,839 |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Current assets | | | | | | |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Asset for resale | | 780 | | - | | - |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Inventory | | 63,465 | | 66,014 | | 44,911 |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Trade and other receivables | | 67,537 | | 59,462 | | 21,421 |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Cash and cash equivalents | 4 | 1,911 | | 2,568 | | 2,045 |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Total current assets | | 133,693 | | 128,044 | | 68,377 |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Total assets | | 202,600 | | 199,446 | | 139,216 |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Equity | | | | | | |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Share capital | | 2,682 | | 2,607 | | 2,608 |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Share premium | | 3,006 | | 3,006 | | 3,006 |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Reserves | | 18,430 | | 16,856 | | 17,918 |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Retained earnings | | 20,683 | | 20,320 | | 19,071 |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Total equity attributable to equity | | 44,801 | | 42,789 | | 42,603 |
| holders of the parent company | | | | | | |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Non-controlling interests | | 3,766 | | 2,630 | | 3,354 |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Total equity | | 48,567 | | 45,419 | | 45,957 |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Non-current liabilities | | | | | | |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Loans and borrowings | 4 | 8,602 | | 10,345 | | 9,397 |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Deferred income | | 2,704 | | 3,525 | | 2,979 |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Provisions | | 1,722 | | 1,368 | | 1,722 |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Other financial liabilities | | 44 | | - | | 253 |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Total non-current liabilities | | 13,072 | | 15,238 | | 14,351 |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Current liabilities | | | | | | |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Bank overdraft | 4 | 7,174 | | 66,290 | | 3,038 |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Loans and borrowings | 4 | 72,509 | | 27,156 | | 38,455 |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Deferred income | | 619 | | 751 | | 821 |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Provisions | | 260 | | - | | 467 |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Income Tax payable | | 686 | | 779 | | 26 |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Trade and other payables | | 45,112 | | 30,783 | | 21,422 |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Other financial liabilities | | 14,601 | | 13,030 | | 14,679 |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Total current liabilities | | 140,961 | | 138,789 | | 78,908 |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Total liabilities | | 154,033 | | 154,027 | | 93,259 |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Total equity and liabilities | | 202,600 | | 199,446 | | 139,216 |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
International Greetings PLC
Interim Report 2010
Consolidated Cash Flow Statement
For the six months ended 30 September 2010
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| | | Unaudited | | Unaudited | | |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| | | as at | | as at | | 12 |
| | | 30 | | 30 | | months |
| | | | | | | to |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| | | September | | September | | 31 |
| | | | | | | March |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| | | 2010 | | 2009 | | 2010 |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| | | | | restated | | restated |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| | Note | GBP000 | | GBP000 | | GBP000 |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Cash flows from operating | | | | | | |
| activities | | | | | | |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Profit for the period | | 1,919 | | 263 | | 704 |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Adjustments for: | | | | | | |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Depreciation | | 2,118 | | 2,305 | | 4,543 |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Impairment of tangible fixed assets | | - | | - | | 1,094 |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Amortisation of intangible assets | | 177 | | 73 | | 287 |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Financial expenses - continuing | | 1,642 | | 1,792 | | 2,930 |
| operations | | | | | | |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Financial expenses - discontinued | 3 | 26 | | 47 | | 94 |
| operations | | | | | | |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Share of loss of associates - | | - | | 39 | | 39 |
| continuing operations | | | | | | |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Recycling of translation reserves | | - | | - | | (907) |
| on closure of subsidary | | | | | | |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Income tax (credit)/charge - | | 138 | | 568 | | (44) |
| continuing operations | | | | | | |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Income tax credit - discontinued | 3 | - | | - | | (135) |
| operations | | | | | | |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Loss/(profit) on sales of property, | | 1 | | 10 | | (26) |
| plant and equipment | | | | | | |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Equity settled share-based payment | | 49 | | 37 | | 82 |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Operating profit before changes in | | 6,070 | | 5,134 | | 8,661 |
| working capital and provisions | | | | | | |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Change in trade and other | | (45,955) | | (31,942) | | 7,288 |
| receivables | | | | | | |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Change in inventory | | (18,589) | | (7,459) | | 13,524 |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Change in trade and other payables | | 24,498 | | 6,058 | | (2,181) |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Change in provisions and deferred | | (684) | | (440) | | 169 |
| income | | | | | | |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Cash used from operations | | (34,660) | | (28,649) | | 27,461 |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Tax received/(paid) | | 357 | | (134) | | (372) |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Interest and similar charges paid | | (1,552) | | (1,597) | | (3,421) |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Net cash (outflow)/inflow from | | (35,855) | | (30,380) | | 23,668 |
| operating activities | | | | | | |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Cash flow from investing activities | | | | | | |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Proceeds from sale of property | | 14 | | 25 | | 306 |
| plant and equipment | | | | | | |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Acquisition of subsidiary, | | - | | (3,918) | | (3,918) |
| including overdrafts acquired | | | | | | |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Acquisition of intangible assets | | (288) | | (251) | | (646) |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Acquisition of property for resale | | (780) | | - | | - |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Acquisition of property plant and | | (1,186) | | (458) | | (1,121) |
| equipment | | | | | | |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Net cash outflow from investing | | (2,240) | | (4,602) | | (5,379) |
| activities | | | | | | |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Cash flows from financing | | | | | | |
| activities | | | | | | |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Proceeds from issue of share | | - | | - | | 1 |
| capital | | | | | | |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Repayment of borrowings | | (471) | | (527) | | (3,064) |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Payment of finance lease | | (29) | | (12) | | (12) |
| liabilities | | | | | | |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| New bank loans raised | | 34,541 | | 15,154 | | 28,732 |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| New finance leases | | 74 | | - | | - |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Net cash inflow from financing | | 34,115 | | 14,615 | | 25,657 |
| activities | | | | | | |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Net (decrease)/increase in cash and | | (3,980) | | (20,367) | | 43,946 |
| cash equivalents | | | | | | |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Cash and cash equivalents at | | (993) | | (45,375) | | (45,375) |
| beginning of period | | | | | | |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Effect of exchange rate | | (290) | | 2,020 | | 436 |
| fluctuations on cash held | | | | | | |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
| Cash and cash equivalents at end of | 4 | (5,263) | | (63,722) | | (993) |
| period | | | | | | |
+-------------------------------------+------+-----------+----------+-----------+----------+----------+
International Greetings PLC
Interim Report 2010
Notes to the interim report
1 Accounting policies
Basis of preparation
The financial information contained in this interim report does not constitute
statutory accounts as defined in Section 434 of the Companies Act 2006 and is
unaudited.
The Group interim report has been prepared and approved by the Directors in
accordance with International Financial Reporting Standards as adopted by the EU
("Adopted IFRSs"). The financial information for the year ended 31 March 2010 is
extracted from the statutory accounts of the Group for that financial year and
does not constitute statutory accounts as defined in Section 434 of the
Companies Act 2006. The report of the auditors was (i) unqualified; (ii) did not
include a reference to any matters to which the auditors drew attention by way
of emphasis without qualifying their report, and (iii) did not contain a
statement under section 498 (2) of the Companies Act 2006.
Restatement
The comparatives balances as at 30 September 2009 have been restated due to a
prior year adjustment relating to 2007 as described in the Report and Accounts
for the year ended March 31, 2010. The effect of the restatement is to increase
current liabilities by GBP718,000, deferred tax assets by GBP183,000, and reduce
translation reserves by GBP65,000, and retained earnings by GBP470,000.
Bank loans and borrowings in the prior period have been restated to separate the
Asset Backed Loan that had previously been included as an element of the
overdraft.
Discontinued operation
The comparatives for the 6 months to 30 September 2009 and year to 31 March 10
have been restated to remove the results of a business that was discontinued in
July 10. See Note 3 for further details.
Going concern basis
The Financial Statements have been prepared on the going concern basis, not
withstanding the net current liabilities of GBP7.3 million (2009 H1:GBP10.7
million).
The Directors believe this to be appropriate because as in previous years, the
Group relies primarily on a short term facility for its working capital needs
without prejudice to the on demand nature of the facility, and assuming the
business performs in line with expectations, that sufficient of the current
facility will be renewed on 30 June 2011.
The borrowing requirement of the Group increases steadily over the period from
July 2010 and peaks in September and October 2010, due to the seasonality of the
business, as the sales of wrap and crackers are mainly for the Christmas market,
before then reducing.
As with any company placing reliance on external entities for financial support,
the Directors acknowledge that there can be no certainty that this support will
continue although, at the date of approval of this interim report, they have no
reason to believe it will not do so.
After making enquiries, the Directors have a reasonable expectation that the
Company and the Group have adequate resources to continue in operational
existence for the foreseeable future. Accordingly, they continue to adopt the
going concern basis in preparing this interim report.
The interim report does not include all the information and disclosures required
in the annual financial statements, and should be read in conjunction with the
Group's annual financial statements as at 31 March 2010.
Significant accounting policies
The accounting policies adopted in the preparation of the interim report are
consistent with those followed in the preparation of the Group's annual
financial statements for the year ended 31 March 2010, except for the adoption
of new Standards and Interpretations as of 1 April 2010, noted below:
IFRS 3 Business Combination (revised January 2008)
The revised Standard requires acquisition-related costs to be expensed and not
included in the purchase price and contingent consideration to be recognised at
fair value on the acquisition date (with subsequent changes recognised in the
income statement and not as a change to goodwill). The Standard also changes the
treatment of non-controlling interests (formally minority interests) with an
option to recognise these at full fair value as at the acquisition date and a
requirement for previously held non-controlling interests to be fair valued as
at the date control is obtained, with gains and losses recognised in the income
statement. The adoption of this amendment did not have any impact on the
financial position or performance of the Group.
IAS 27 Consolidated and Separate Financial Statement (revised January 2008)
The revised Standard no longer restricts the allocation to non-controlling
interest of losses incurred by a subsidiary to the amount of the minority equity
investment in the subsidiary. Any future partial disposal of equity interest in
a subsidiary that does not result in a loss of control will be accounted for as
an equity transaction and will have no impact on goodwill, nor will it give rise
to any gain or loss. Where there is loss of control of a subsidiary, any
retained interest will have to be remeasured to fair value, which will impact
the gain or loss recognised on disposal. The adoption of this amendment did not
have any impact on the financial position or performance of the Group.
2. Segmental information
Segmental information is presented in respect of the Group's geographical
segments which are the primary basis of segmental reporting.
Geographical analysis
The results below are allocated based on the region in which the businesses are
located; this reflects the Group's management and internal reporting structure.
Management monitors the operating results of its business units separately for
the purpose of making decisions about resource allocation and performance
assessment.
Intra-segment pricing is determined on an arm's length basis. Segment results
include items directly attributable to a segment as well as those that can be
allocated on a reasonable basis.
+--------------------------+----------+----------+----------+----------+-----------+---------------+-----------+
| | UK | Europe | USA | Asia |Australia |Elim-inations | Group |
+--------------------------+----------+----------+----------+----------+-----------+---------------+-----------+
| | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+--------------------------+----------+----------+----------+----------+-----------+---------------+-----------+
| Six months ended 30 | | | | | | | |
| September 2010 | | | | | | | |
+--------------------------+----------+----------+----------+----------+-----------+---------------+-----------+
| Continuing operations | | | | | | | |
+--------------------------+----------+----------+----------+----------+-----------+---------------+-----------+
| Revenue - external | 57,428 | 11,635 | 22,575 | 1,288 | 11,527 | - | 104,453 |
+--------------------------+----------+----------+----------+----------+-----------+---------------+-----------+
| - intra | 1,327 | 1,034 | - | 6,605 | - | (8,966) | - |
| segment | | | | | | | |
+--------------------------+----------+----------+----------+----------+-----------+---------------+-----------+
| | | | | | | | |
+--------------------------+----------+----------+----------+----------+-----------+---------------+-----------+
| Total segment revenue | 58,755 | 12,669 | 22,575 | 7,893 | 11,527 | (8,966) | 104,453 |
+--------------------------+----------+----------+----------+----------+-----------+---------------+-----------+
| | | | | | | | |
+--------------------------+----------+----------+----------+----------+-----------+---------------+-----------+
| Segment result from | 2,419 | 816 | 262 | (765) | 1,077 | (32) | 3,777 |
| continuing operations | | | | | | | |
+--------------------------+----------+----------+----------+----------+-----------+---------------+-----------+
| Pre-tax loss from | - | (78) | - | - | - | - | (78) |
| discontinued operations | | | | | | | |
+--------------------------+----------+----------+----------+----------+-----------+---------------+-----------+
| Segment result | 2,419 | 738 | 262 | (765) | 1,077 | (32) | 3,699 |
+--------------------------+----------+----------+----------+----------+-----------+---------------+-----------+
| Pre-tax loss from | | | | | | | 78 |
| discontinued operations | | | | | | | |
+--------------------------+----------+----------+----------+----------+-----------+---------------+-----------+
| Net finance expenses | | | | | | | (1,642) |
+--------------------------+----------+----------+----------+----------+-----------+---------------+-----------+
| Income tax | | | | | | | (138) |
+--------------------------+----------+----------+----------+----------+-----------+---------------+-----------+
| Profit from continuing | | | | | | | 1,997 |
| operations six months | | | | | | | |
| ended 30 September 2010 | | | | | | | |
+--------------------------+----------+----------+----------+----------+-----------+---------------+-----------+
| | | | | | | | |
+--------------------------+----------+----------+----------+----------+-----------+---------------+-----------+
| Balances at 30 September | | | | | | | |
| 2010 | | | | | | | |
+--------------------------+----------+----------+----------+----------+-----------+---------------+-----------+
| Continuing operations | | | | | | | |
+--------------------------+----------+----------+----------+----------+-----------+---------------+-----------+
| Segment assets | 134,096 | 30,887 | 13,272 | 24,632 | 13,209 | (13,496) | 202,600 |
+--------------------------+----------+----------+----------+----------+-----------+---------------+-----------+
| Segment liabilities | (70,528) | (29,615) | (46,299) | (16,805) | (6,252) | 15,466 | (154,033) |
+--------------------------+----------+----------+----------+----------+-----------+---------------+-----------+
| | | | | | | | |
+--------------------------+----------+----------+----------+----------+-----------+---------------+-----------+
| Capital expenditure | | | | | | | |
+--------------------------+----------+----------+----------+----------+-----------+---------------+-----------+
| - property, plant and | 637 | 132 | 38 | 211 | 168 | - | 1,186 |
| equipment | | | | | | | |
+--------------------------+----------+----------+----------+----------+-----------+---------------+-----------+
| - asset for resale | - | - | 780 | - | - | - | 780 |
| | | | | | | | |
+--------------------------+----------+----------+----------+----------+-----------+---------------+-----------+
| - intangible | 121 | - | 61 | - | 106 | - | 288 |
| | | | | | | | |
+--------------------------+----------+----------+----------+----------+-----------+---------------+-----------+
| | | | | | | | |
+--------------------------+----------+----------+----------+----------+-----------+---------------+-----------+
| Depreciation | 899 | 444 | 413 | 285 | 74 | 3 | 2,118 |
+--------------------------+----------+----------+----------+----------+-----------+---------------+-----------+
| Amortisation | 100 | 15 | 38 | - | 24 | - | 177 |
+--------------------------+----------+----------+----------+----------+-----------+---------------+-----------+
| Impairment of property, | 3 | - | - | - | - | (3) | - |
| plant and equipment | | | | | | | |
+--------------------------+----------+----------+----------+----------+-----------+---------------+-----------+
2 Segmental informationcontinued
+--------------------------+----------+----------+----------+---------+-----------+---------------+-----------+
| | UK | Europe | USA | Asia |Australia |Elim-inations | Group |
+--------------------------+----------+----------+----------+---------+-----------+---------------+-----------+
| | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+--------------------------+----------+----------+----------+---------+-----------+---------------+-----------+
| Six months ended 30 | | | | | | | |
| September 2009 restated | | | | | | | |
+--------------------------+----------+----------+----------+---------+-----------+---------------+-----------+
| Revenue - external | 52,713 | 11,441 | 22,862 | 1,001 | 4,817 | - | 92,834 |
+--------------------------+----------+----------+----------+---------+-----------+---------------+-----------+
| - intra | 2,463 | 704 | - | 5,198 | - | (8,365) | - |
| segment | | | | | | | |
+--------------------------+----------+----------+----------+---------+-----------+---------------+-----------+
| Total segment revenue | 55,176 | 12,145 | 22,862 | 6,199 | 4,817 | (8,365) | 92,834 |
+--------------------------+----------+----------+----------+---------+-----------+---------------+-----------+
| | | | | | | | |
+--------------------------+----------+----------+----------+---------+-----------+---------------+-----------+
| Segment result from | 1,289 | 832 | (350) | 343 | 742 | 19 | 2,875 |
| continuing operations | | | | | | | |
+--------------------------+----------+----------+----------+---------+-----------+---------------+-----------+
| Pre-tax loss from | - | (213) | | - | - | - | (213) |
| discontinued operations | | | | | | | |
+--------------------------+----------+----------+----------+---------+-----------+---------------+-----------+
| Segment result | 1,289 | 619 | (350) | 343 | 742 | 19 | 2,662 |
+--------------------------+----------+----------+----------+---------+-----------+---------------+-----------+
| Pre-tax loss from | | | | | | | 213 |
| discontinued operations | | | | | | | |
+--------------------------+----------+----------+----------+---------+-----------+---------------+-----------+
| Net finance expenses | | | | | | | (1,792) |
+--------------------------+----------+----------+----------+---------+-----------+---------------+-----------+
| Share of loss of | | | | | | | (39) |
| associates | | | | | | | |
+--------------------------+----------+----------+----------+---------+-----------+---------------+-----------+
| Income tax | | | | | | | (568) |
+--------------------------+----------+----------+----------+---------+-----------+---------------+-----------+
| Profit from continuing | | | | | | | 476 |
| operations six months | | | | | | | |
| ended 30 September 2009 | | | | | | | |
+--------------------------+----------+----------+----------+---------+-----------+---------------+-----------+
| | | | | | | | |
+--------------------------+----------+----------+----------+---------+-----------+---------------+-----------+
| Balances at 30 September | | | | | | | |
| 2009 restated | | | | | | | |
+--------------------------+----------+----------+----------+---------+-----------+---------------+-----------+
| Segment assets from | 125,962 | 32,101 | 28,945 | 24,909 | 12,137 | (26,472) | 197,582 |
| continuing operations | | | | | | | |
+--------------------------+----------+----------+----------+---------+-----------+---------------+-----------+
| Segment assets from | - | 1,864 | - | - | - | - | 1,864 |
| discontinued operations | | | | | | | |
+--------------------------+----------+----------+----------+---------+-----------+---------------+-----------+
| Segment assets | 125,962 | 33,965 | 28,945 | 24,909 | 12,137 | (26,472) | 199,446 |
+--------------------------+----------+----------+----------+---------+-----------+---------------+-----------+
| Segment liabilities | (81,114) | (32,648) | (46,683) | (9,367) | (6,879) | 22,664 | (154,027) |
+--------------------------+----------+----------+----------+---------+-----------+---------------+-----------+
| | | | | | | | |
+--------------------------+----------+----------+----------+---------+-----------+---------------+-----------+
| Capital expenditure | | | | | | | |
+--------------------------+----------+----------+----------+---------+-----------+---------------+-----------+
| - property, plant and | 250 | 153 | 23 | 32 | - | - | 458 |
| equipment | | | | | | | |
+--------------------------+----------+----------+----------+---------+-----------+---------------+-----------+
| - intangible | 243 | 8 | - | | - | - | 251 |
| | | | | - | | | |
+--------------------------+----------+----------+----------+---------+-----------+---------------+-----------+
| Depreciation | 1,019 | 554 | 402 | 309 | 21 | - | 2,305 |
+--------------------------+----------+----------+----------+---------+-----------+---------------+-----------+
| Amortisation | 48 | 3 | 22 | - | - | - | 73 |
+--------------------------+----------+----------+----------+---------+-----------+---------------+-----------+
+--------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| | UK | Europe | USA | Asia |Australia |Eliminations | Group |
+--------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+--------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| Year ended 31 March 2010 | | | | | | | |
| restated | | | | | | | |
+--------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| Continuing operations | | | | | | | |
+--------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| Revenue - external | 107,060 | 33,121 | 40,839 | 1,933 | 15,293 | - | 198,246 |
+--------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| - intra | 3,070 | 1,043 | 50 | 6,292 | - | (10,455) | - |
| segment | | | | | | | |
+--------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| | | | | | | | |
+--------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| Total segment revenue | 110,130 | 34,164 | 40,889 | 8,225 | 15,293 | (10,455) | 198,246 |
+--------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| | | | | | | | |
+--------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| Segment result before | 4,111 | 1,051 | 415 | (1,062) | 1,930 | 42 | 6,487 |
| exceptional items and | | | | | | | |
| discontinued operations | | | | | | | |
+--------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| Exceptional items | (1,508) | (380) | 175 | 158 | - | 454 | (1,101) |
+--------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| Segment result from | 2,603 | 671 | 590 | (904) | 1,930 | 496 | 5,386 |
| continuing operations | | | | | | | |
+--------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| Pre-tax loss from | - | (1,757) | - | - | - | - | (1,757) |
| discontinued operations | | | | | | | |
+--------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| Segment result | 2,603 | (1,086) | 590 | (904) | 1,930 | 496 | 3,629 |
+--------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| Pre-tax loss from | | | | | | | 1,757 |
| discontinued operations | | | | | | | |
+--------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| Net finance expenses | | | | | | | (2,930) |
+--------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| Share of loss of | | | | | | | (39) |
| associates | | | | | | | |
+--------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| Income tax | | | | | | | 44 |
+--------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| Profit from continuing | | | | | | | 2,461 |
| operations year ended 31 | | | | | | | |
| March 2010 | | | | | | | |
+--------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| | | | | | | | |
+--------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| | | | | | | | |
+--------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| Balances at 31 March | | | | | | | |
| 2010 | | | | | | | |
+--------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| Segmental assets from | 93,578 | 24,578 | 17,416 | 8,320 | 7,516 | (12,354) | 139,054 |
| continuing operations | | | | | | | |
+--------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| Segmental assets from | - | 162 | - | - | - | - | 162 |
| discontinued operations | | | | | | | |
+--------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| Segment assets | 93,578 | 24,740 | 17,416 | 8,320 | 7,516 | (12,354) | 139,216 |
+--------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| Segment liabilities | (43,774) | (23,186) | (39,359) | 162 | (2,121) | 15,019 | (93,259) |
+--------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| | | | | | | | |
+--------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| Capital expenditure | | | | | | | |
+--------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| - property, plant and | 681 | 283 | 34 | 71 | 52 | - | 1,121 |
| equipment | | | | | | | |
+--------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| - intangible | 456 | 6 | 8 | - | 176 | - | 646 |
+--------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| | | | | | | | |
+--------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| Depreciation | 1,983 | 1,123 | 750 | 602 | 85 | - | 4,543 |
+--------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| Amortisation | 123 | 39 | 125 | - | - | - | 287 |
+--------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| Impairment of property, | 327 | 767 | - | - | - | - | 1,094 |
| plant and equipment | | | | | | | |
+--------------------------+----------+----------+----------+---------+-----------+--------------+----------+
3 Discontinued operation
As noted in the Annual Report and Accounts, in July 2010, the Board took the
difficult decision to close the Eickpack counter-rolls business that was bought
in 2007, resulting in the businesses becoming a discontinued operation. The
results of Eickpack are presented below:
+------------------------------------+-----------+-----------+---------+
| | 6 | 6 | |
| | months | months | |
+------------------------------------+-----------+-----------+---------+
| | ended | ended | 12 |
| | 30 | 30 | months |
+------------------------------------+-----------+-----------+---------+
| | September | September | to 31 |
| | | | March |
+------------------------------------+-----------+-----------+---------+
| | 2010 | 2009 | 2010 |
+------------------------------------+-----------+-----------+---------+
| | GBP000 | GBP000 | GBP000 |
+------------------------------------+-----------+-----------+---------+
| Revenue | 391 | 920 | 1,906 |
+------------------------------------+-----------+-----------+---------+
| Cost of sales | (338) | (862) | (3,076) |
+------------------------------------+-----------+-----------+---------+
| Gross profit/(loss) | 53 | 58 | (1,170) |
+------------------------------------+-----------+-----------+---------+
| | | | |
+------------------------------------+-----------+-----------+---------+
| Selling expenses | (17) | (54) | (120) |
+------------------------------------+-----------+-----------+---------+
| Administration expenses | (88) | (170) | (508) |
+------------------------------------+-----------+-----------+---------+
| Operating loss | (52) | (166) | (1,798) |
+------------------------------------+-----------+-----------+---------+
| Finance expenses | (26) | (47) | (94) |
+------------------------------------+-----------+-----------+---------+
| Loss before tax | (78) | (213) | (1,892) |
+------------------------------------+-----------+-----------+---------+
| Income tax credit | - | - | 135 |
+------------------------------------+-----------+-----------+---------+
| Loss for the period from | (78) | (213) | (1,757) |
| discontinued operation | | | |
+------------------------------------+-----------+-----------+---------+
| | | | |
+------------------------------------+-----------+-----------+---------+
| The tax credit/(expense) is | | | |
| analysed as follows: | | | |
+------------------------------------+-----------+-----------+---------+
| On profit/(loss) on ordinary | - | - | - |
| activities for the year | | | |
+------------------------------------+-----------+-----------+---------+
| On the loss on discontinuance | - | - | 135 |
+------------------------------------+-----------+-----------+---------+
| | - | - | 135 |
+------------------------------------+-----------+-----------+---------+
| | 6 | 6 | |
| | months | months | |
+------------------------------------+-----------+-----------+---------+
| | ended | ended | 12 |
| | 30 | 30 | months |
+------------------------------------+-----------+-----------+---------+
| | September | September | March |
+------------------------------------+-----------+-----------+---------+
| | 2010 | 2009 | 2010 |
+------------------------------------+-----------+-----------+---------+
| | GBP000 | GBP000 | GBP000 |
+------------------------------------+-----------+-----------+---------+
| Operating cash flows | (13) | 34 | (25) |
+------------------------------------+-----------+-----------+---------+
| Investing cash flows | - | (61) | 10 |
+------------------------------------+-----------+-----------+---------+
| Finance cash flows | - | - | - |
+------------------------------------+-----------+-----------+---------+
| Net cash outflow | (13) | (27) | (15) |
+------------------------------------+-----------+-----------+---------+
| | | | |
+------------------------------------+-----------+-----------+---------+
| Loss per share from discontinued | | | |
| operation (pence): | | | |
+------------------------------------+-----------+-----------+---------+
| Basic | (0.1 | (0.4 | (3.5 |
| | p) | p) | p) |
+------------------------------------+-----------+-----------+---------+
| Diluted | (0.1 | (0.4 | (3.2 |
| | p) | p) | p) |
+------------------------------------+-----------+-----------+---------+
4 Cash, loans and borrowings
+------------------------------------+-----------+-----------+----------+
| | As at | As at | As at |
| | 30 | 30 | 31 |
+------------------------------------+-----------+-----------+----------+
| | September | September | March |
+------------------------------------+-----------+-----------+----------+
| | 2010 | 2009 | 2010 |
+------------------------------------+-----------+-----------+----------+
| | GBP000 | GBP000 | GBP000 |
+------------------------------------+-----------+-----------+----------+
| Secured bank loan (short term) | (1,042) | (1,086) | (1,070) |
+------------------------------------+-----------+-----------+----------+
| Secured bank loan (long term) | (8,602) | (10,345) | (9,397) |
+------------------------------------+-----------+-----------+----------+
| Assets backed loan | (22,999) | (26,070) | (8,760) |
+------------------------------------+-----------+-----------+----------+
| Revolving credit facilities | (48,468) | - | (28,625) |
| | | | |
+------------------------------------+-----------+-----------+----------+
| Total loans | (81,111) | (37,501) | (47,852) |
+------------------------------------+-----------+-----------+----------+
| | | | |
+------------------------------------+-----------+-----------+----------+
| Cash and bank deposit | 1,911 | 2,568 | 2,045 |
+------------------------------------+-----------+-----------+----------+
| Bank overdraft | (7,174) | (66,290) | (3,038) |
+------------------------------------+-----------+-----------+----------+
| Cash and cash equivalents per Cash | (5,263) | (63,722) | (993) |
| Flow Statement | | | |
+------------------------------------+-----------+-----------+----------+
| | | | |
+------------------------------------+-----------+-----------+----------+
| Net debt as used in the Chief | (86,374) | (101,223) | (48,845) |
| Executive's Review | | | |
+------------------------------------+-----------+-----------+----------+
5 Business Combination
On 4 September 2007, the Group acquired 100% of the issued share capital of
Glitterwrap Inc, a supplier of giftware and party products based in the USA.
Initial consideration was GBP1,295,000, plus attributable costs of GBP178,000.
Deferred consideration was paid during the year ended 31 March 2009 of
GBP938,000, and during the year ended 31 March 2010 of GBP1,513,000. At 31 March
2010, the deferred consideration payable was GBP1,043,000 at the exchange rate
prevailing at that date. On 3rd September 2010, the Company paid the remaining
deferred consideration by issuing 1,492,000 shares at 68.58p per share.
The goodwill recognised on Glitterwrap was impaired in full during the year
ended 31 March 2009 due to the economic conditions and the revised manufacturing
strategy for the US.
6. Income tax
The major components of income tax expense in the interim report are:
+----------------------------------+----------+-----------+------------------+--------+
| | | Six | Six | 12 |
| | | months | months | months |
+----------------------------------+----------+-----------+------------------+--------+
| | | ended | ended | ended |
| | | 30 | 30 | 30 |
+----------------------------------+----------+-----------+------------------+--------+
| | | September | September | March |
+----------------------------------+----------+-----------+------------------+--------+
| | | 2010 | 2009 | 2010 |
+----------------------------------+----------+-----------+------------------+--------+
| | | GBP000 | GBP000 | GBP000 |
+----------------------------------+----------+-----------+------------------+--------+
| Current income tax | | | | |
+----------------------------------+----------+-----------+------------------+--------+
| Current income tax | | (243) | 431 | (74) |
| (charge)/credit | | | | |
+----------------------------------+----------+-----------+------------------+--------+
| Deferred tax | | | | |
+----------------------------------+----------+-----------+------------------+--------+
| Relating to origination and | | 105 | 137 | (105) |
| reversal of temporary | | | | |
| differences | | | | |
+----------------------------------+----------+-----------+------------------+--------+
| Income tax (charge)/credit | | (138) | 568 | (179) |
+----------------------------------+----------+-----------+------------------+--------+
Taxation for the six months to 30 September is based on the effective rate of
taxation, which is estimated to apply in each country for the year ending 31
March 2011.
7 Earnings per share
+----------------------------------+----------+-----------+-----------+-------+
| | | As at | As at | As at |
| | | 30 | 30 | 31 |
+----------------------------------+----------+-----------+-----------+-------+
| | | September | September | March |
+----------------------------------+----------+-----------+-----------+-------+
| | | 2010 | 2009 | 2010 |
+----------------------------------+----------+-----------+-----------+-------+
| Adjusted basic earnings per | | 3.1 p | 0.4 p | 4.4 p |
| share excluding exceptional | | | | |
| items and discontinued | | | | |
| operations | | | | |
+----------------------------------+----------+-----------+-----------+-------+
| Loss per share on exceptional | | | | (0.8 |
| items | | - | - | p) |
+----------------------------------+----------+-----------+-----------+-------+
| Loss per share on discontinued | | (0.1 | (0.4 | (3.5 |
| operations | | p) | p) | p) |
+----------------------------------+----------+-----------+-----------+-------+
| Basic earnings per share | | 3.0 p | 0.0 p | 0.1 p |
+----------------------------------+----------+-----------+-----------+-------+
| Diluted earnings per share | | 2.7 p | 0.0 p | 0.1 p |
+----------------------------------+----------+-----------+-----------+-------+
The basic earnings per share is based on the profit of GBP1,563,000 (2009:
GBP18,000) and a weighted average number of ordinary shares in issue of
52,371,295 (2009: 48,676,872) calculated as follows:
+----------------------------------+----------+------------------+------------------+-------------------+
| Weighted average number of | | September | September | March |
| shares | | | | |
+----------------------------------+----------+------------------+------------------+-------------------+
| in thousands of shares | | 2010 | 2009 | 2010 |
+----------------------------------+----------+------------------+------------------+-------------------+
| Issued ordinary shares at start | | 52,150 | 48,498 | 48,498 |
| of period | | | | |
+----------------------------------+----------+------------------+------------------+-------------------+
| Shares issued in respect of | | 221 | 179 | 1,876 |
| acquisitions | | | | |
+----------------------------------+----------+------------------+------------------+-------------------+
| Shares issued in respect of | | | | 1 |
| exercising of share options | | - | - | |
+----------------------------------+----------+------------------+------------------+-------------------+
| Weighted average number of | | 52,371 | 48,677 | 50,375 |
| shares at the end of the period | | | | |
+----------------------------------+----------+------------------+------------------+-------------------+
Total number of options, over 5p ordinary shares, in issue as at 30 September
2010 was 6,222,556. The average number in issue during the period was 6,222,556.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR LFFLIFELDIII
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