Intnl Greetings PLC - Final Results
08 Julho 1997 - 4:32AM
UK Regulatory
RNS No 729v
INTERNATIONAL GREETINGS PLC
8th July 1997
International Greetings Plc
Record Results: Pretax Profit Up 58%
International Greetings PLC (IG) today announces final
results for the year ended 31 March 1997, showing pretax
profit up 58% to #5.1 million (before exceptional credit
of #740,000), normalised earnings per share up 57% to 26
pence and dividends up 33%.
The principal activities of the company are the design
and manufacture of gift wrapping paper, greeting cards,
crackers and other decorative accessories. IG is a major
supplier of private label greetings products to leading
UK multiples including Woolworths, Tesco and Boots.
Highlights of the year's performance include:
* Pretax profit up 58% to #5.1 million (after
exceptionals #5.9 million)
* EPS up 57% to 26 pence (after exceptionals 31.7
pence)
* Dividend per share for the year up 33% to 6.67
pence
* Net margins up 43%
* Progress across all sectors of the business
* Encouraging start to current year
Commenting on today's results, IG's Chairman John Elfed
Jones said:
'IG has had another very good year. Our results show
improvements across the board with higher sales and
margins achieved. Our relationships with key customers
remain strong and Christmas orders to date have been
very encouraging. We look forward to the future with
confidence.'
The Board has recommended a final dividend of 4.5 pence
per share, making a total for the year of 6.67 pence per
share. The final dividend, if approved, will be paid on
31 July 1997 to shareholders on the register on 18 July
1997.
In the course of the year under review, IG has adopted
a more conventional capital structure by redeeming its
preference shares and associated warrants, thus putting
the company on a sound footing for a future listing on
the Official List of the London Stock Exchange. IG was
admitted to the Alternative Investment Market (AIM) on
31 October 1995.
IG's 1996/97 Annual Report and Accounts was posted to
shareholders today.
For further information contact:
Belinda Keheyan
Grandfield 0171 417 4170
Nick Fisher, Joint Chief Executive
International Greetings PLC 01727 844 888
Anders Hedlund, Joint Chief Executive
International Greetings 01727 844 888
CHAIRMAN'S STATEMENT
I am delighted to report another excellent year for the
Group. The year's activities are reviewed in detail in
the Review of Operations below. However, the key
highlights are:
* Profit before taxation+ up 58% to #5.1m
* Earnings per share+ up 57% to 26p
* Gross and net margins show healthy improvements
* Dividend for the year up 33% to 6.67p per share
+ Figures exclude exceptional items
Balance Sheet
In February this year, the company took the opportunity
to redeem the preference shares and associated warrants
to purchase ordinary shares, held by Throgmorton
Preferred Income Trust PLC. Your Board considered it
appropriate to adopt a more conventional capital
structure putting the company on a sound footing for a
future listing on the Official List of the London Stock
Exchange, at a suitable time. The total consideration
paid for the preference shares and warrants was #3.6m,
which was funded by a #1.6m issue of new ordinary
shares, with the balance being provided from the group's
own resources. At the same time, in order to assist the
marketability and liquidity of the company's shares, the
Board decided to make a two for one bonus issue to
ordinary shareholders. Despite the net #2m cash outflow
resulting from the redemption of the preference shares,
excellent cash management during the year enabled
gearing to be maintained at 38% of shareholder's funds.
Staff
A major factor in the year's excellent performance has
been the hard work, commitment and motivation of our
employees and on behalf of the Board, I would like to
thank everyone for their contribution to our success.
Our people are our greatest asset and our belief in
their importance to continuing future success is
demonstrated by our commitment to implement new training
and development programmes for all employees. We are
working towards attaining an Investors in People
accreditation throughout the group and are also
currently examining ways to encourage employee equity
participation in the business through the introduction
of an employee share purchase scheme.
Outlook and Dividend
Your Board is determined to ensure the group continues
to build on its success and looks forward to the future
with confidence. Early indications of the current year's
trading are encouraging and as a result, we are
recommending a final dividend of 4.5 pence per share
making a total for the year of 6.67 pence per share.
This represents an increase of 33% whilst at the same
time improves the dividend cover from 3.3 to 3.9 times
earnings per share=.
JE Jones CBE DL
Chairman
8 July 1997
REVIEW OF OPERATIONS
Overview
This year's excellent results clearly reflect the
success of the group's continuing strategy to focus on
the improvement of productivity and margins at the
operating level of business.
Emphasis on the efficient management of customer orders
from the purchase of materials to manufacture and final
distribution has resulted in the gross margin increasing
from 28% to 30% and net profit+ margin increasing by
over 43% from 7.4% to 10.6%.
This improvement has been an ongoing process and your
Board is committed to maintaining this trend.
United Kingdom
The group's printing capacity and capabilities have been
enhanced during the year by the purchase of two new
printing presses, one 5 colour press has been
commissioned and work is currently in hand to bring an
additional 8 colour printing press into operation during
the latter part of this year. We expect that these major
investments together with the relocation of our group
print facility to a new site much closer to the giftwrap
conversion facilities, will result in further
efficiencies and cost savings. This extra print capacity
will also provide additional support for our expansion
plans in the US.
Our new purpose built 125,000 sq ft distribution
warehouse in South Wales was completed on time and has
been in operation since April this year. This facility,
sited between our giftwrap and cracker manufacturing
plants will improve stock management and distribution of
our products, and reinforces our continuing commitment
to customer service. We are grateful for the continued
support of the Welsh Development Agency and local
authorities who have helped us considerably with our
expansion plans over the years.
United States of America
We were honoured that the Governor of the State of
Georgia, Zell Miller, took time out of his busy schedule
on his trip to the UK last August, to visit us at our
head office in St Albans. It was a clear demonstration
of the tremendous assistance and commitment we have
received both from the State of Georgia and the local
Development Corporation with our US factory relocation.
The new facility has now been operational for over a
year and the teething problems associated with the move
have now been resolved. With the increased manufacturing
capacity of this facility, our US division now has a
solid platform from which to grow. Capitalising on the
benefit of the UK's design resource and expenditure,
improvements in product ranges have resulted in the
development of new distribution channels. We are now
well placed to achieve a new level of market
penetration.
Group Design
We continue to invest in both equipment and qualified
creative staff in this area to take advantage of the
many advances in computer aided design and reprographic
equipment in recent years. Expenditure on design and
artwork during this financial year amounted to #1.5m,
demonstrating our continuing commitment to meet
customers' requirements for design innovation and
product presentation.
+ Figures exclude exceptional items
Group Sales
The development of major multiple retail accounts in the
UK is still the key element of our sales and marketing
plan and the group continues to enjoy close
relationships with its customers.
We are committed to our plans to develop and expand
export sales to Continental Europe, but obviously the
current strength of sterling has been a concern.
Nevertheless, we continue to believe in the long term
opportunity for the group in this area and with many of
our UK customers now becoming 'Euro' retailers we are
well placed to benefit from their expansion programmes.
Further afield we have identified new and developing
markets for our products, which we are actively
pursuing.
SA Hedlund
N Fisher
Joint Chief Executives
8 July 1997
CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the year ended 31 March 1997
1997 1996
#'000 #'000 #'000 #'000
Turnover 48,431 44,167
Cost of Sales (33,945) (31,795)
-------- --------
Gross Profit 14,486 12,372
Distribution
expenses (2,924) (2,723)
Administrative
expenses
Ongoing items (5,742) (5,386)
Exceptional
costs - (169)
-------- --------
(5,742) (5,555)
-------- --------
Operating profit 5,820 4,094
Exceptional surplus
on disposal
of fixed assets 742 -
Interest receivable
and similar income - 6
Interest payable
and similar charges (686) (1,014)
-------- --------
Profit on ordinary
activities before
taxation 5,876 3,086
Tax on profit on
ordinary activities (1,726) (1,036)
-------- --------
Profit on ordinary
activities after
taxation 4,150 2,050
Minority interests (17) (31)
-------- --------
Profit for the
financial year 4,133 2,019
Dividends
Equity (866) (628)
Non-equity (135) (112)
-------- --------
Retained profit
for the financial
year 3,132 1,279
-------- --------
Earnings per share
Basic 31.7p 15.2p+
Excluding
exceptional items 26.0p 16.5p+
+ Figures have been adjusted to reflect the bonus issue
of ordinary shares made in February 1997.
CONSOLIDATED BALANCE SHEET
as 31 March 1997
1997 1996
#'000 #'000 #'000 #'000
Tangible Assets 9,614 7,715
-------- --------
Current Assets
Stocks 9,846 10,906
Debtors 7,161 2,989
Cash at bank
and in hand 1 41
-------- --------
17,008 13,936
Creditors:
amounts falling
due within
one year (14,637) (10,256)
-------- --------
Net current
assets 2,371 3,680
-------- --------
Total assets
less current
liabilities 11,985 11,395
-------- --------
Creditors:
amounts falling
due after
more than one year (721) (1,033)
Provisions for
liabilities and
charges (355) (409)
Deferred income (745) (875)
-------- --------
Net assets 10,164 9,078
-------- --------
Capital and reserves
Called up share capital 660 3,210
Share premium account 1,582 -
Other reserves 1,254 (4)
Profit and loss account 6,609 5,830
-------- --------
Shareholders'
funds
Equity 10,105 6,036
Non-equity - 3,000
-------- --------
10,105 9,036
Minority interests 59 42
-------- --------
10,164 9,078
-------- --------
These financial statements were approved by the board of
directors on 8 July 1997 and were signed on its behalf
by:
N Fisher
Director
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 March 1997
1997 1996
(restated)
#'000 #'000
Net cash inflow
from operating
activities (see below) 6,719 5,446
Returns on investments
and servicing of finance (885) (1,082)
Taxation (1,229) (565)
Capital expenditure (2,537) (1,742)
Acquisitions and disposals - (55)
Equity dividends paid (691) (209)
------- -------
Cash inflow before
financing 1,377 1,793
Financing (2,723) 3,588
------- -------
(Decrease)/increase
in cash (1,346) 5,381
------- -------
Reconciliation of operating profit to net cash inflow
from operating activities
1997 1996
(restated)
#'000 #'000
Operating profit 5,820 4,094
Depreciation charge 1,375 1,198
Decrease in stocks 950 750
(Increase)/decrease
in debtors (4,015) 1,017
Increase/(decrease)
in creditors 2,918 (1,322)
Grant income (329) (291)
------- -------
Net cash inflow
from operating
activities 6,719 5,446
------- -------
END
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