TIDMTFL
RNS Number : 9727T
Theo Fennell PLC
20 December 2012
20 December 2012
THEO FENNELL PLC
("Theo Fennell" or "the Company")
Interim results for the six months ended 30 September 2012
Theo Fennell PLC, the international luxury jeweller, announces
interim results for the six months ended 30 September 2012.
HIGHLIGHTS:
-- Financial performance for first half in line with Board expectations:
- Turnover down 8% at GBP4.94 million (2011: GBP5.36 million)
- Losses more than halved to GBP610,083 (2011: loss of GBP1,390,739)
-- Online performed strongly with sales up 176%
-- Wholesale sales up 12%
-- New wholesale concessions launched in Kuwait and in Baku, Azerbaijan
-- Frank McKay appointed as a non-executive director
-- Ongoing investment in unique one off pieces including a
series of opening rings, sculptured flora and fauna suites and
portrait brooches
-- Launch of new pieces and collections including the Tryst and
Wild Rose collections, new Spangle pieces and the new Meadow
collection within the Alias range
Rupert Hambro, Chairman, commented:
"These results reflect the substantial cuts to overheads, which
together with the restructuring of the business, have significantly
reduced our losses for the period.
The major focus of the business is to increase sales which will
return the Company to profit. We continue to explore exciting
opportunities for Theo Fennell in overseas markets including the
Far East, Middle East and Eastern Europe.
The outlook for the economy and the retail sector remains
uncertain however the work that we have undertaken in the last
period ensures we are better positioned for the future."
Enquiries:
Theo Fennell Plc
Theo Fennell Tel: 020 7591
5000
Pelham Bell Pottinger
James Henderson Tel: 020 7861
Lucy Miles 3885
Seymour Pierce Limited
Mark Percy/ Catherine Leftley (Corporate Tel: 020 7107
Finance) 8000
David Banks/ Katie Ratner (Corporate Broking)
Opus Corporate Finance
Malcolm Strang / John McElroy (Rule 3 advisor) Tel: 0207 025
3600
CHAIRMAN'S STATEMENT
Overview
I write this report about the Company's trading results for the
six months to 30(th) September 2012. The Company has performed
encouragingly over the last six months. Despite sales being down 8%
versus the prior year, the loss for the period has been more than
halved, which is in line with our expectations, and is the lowest
it has been for the past four years. We are therefore pleased with
the progress that has been made. We do however remain cautious as
we enter the Christmas trading period due to the continued economic
uncertainty impacting the UK retail sector.
Financial
Sales in the first six months of the year reduced by 8% to
GBP4.94 million (2011: GBP5.36 million). The bulk of these sales
were lost during the key summer months due to the reduction in
international clients because of the Olympics. The Company made a
first half loss before taxation of GBP610,083 compared to a first
half loss for the same period last year of GBP1,390,739.
Operations & product
We have continued to invest in unique one-off pieces which we
believe give us a clear advantage in the jewellery market. These
include our opening rings which have had extensive press coverage,
detailed and sculptured flora and fauna suites and portrait
brooches.
We have extended our Spangle range into new and colourful styles
and the Tryst range is being developed into new products. We will
also present a new diamond collection in Spring 2013; it is a
quirky and original collection which will have a broad price range
and appeal. The new Meadow collection in our Alias range is proving
very popular and we will be expanding this in the coming year.
Website
We have continued the development of our website including the
online store. Sales for the period were 176% ahead of the same
period last year, albeit from a low base.
Our online sales currently account for 1.4% of our overall
business and we see this as a key growth area for the Company.
International
We are exploring opportunities in key international markets
including the Far East, Middle East and Eastern Europe. We have
opened a new wholesale concession in Kuwait and continue to have
discussions with distributors and potential partners in the
important Far East and Chinese markets. The Ukraine, Russia and
Kazakhstan continue to do good business and we have recently opened
a concession in Baku, Azerbaijan. The ongoing economic uncertainty
continues to make discussions with new partners more protracted
than we had expected but we hope to secure additional distribution
outlets in the latter part of this financial year. We remain
focused on appointing the right partners to represent the Theo
Fennell brand.
The Board
On 24(th) September 2012, we announced the appointment of Frank
McKay as a non-executive director. As I said at the time, we are
delighted that Frank has joined us. He has extensive experience of
improving Company performance and has been involved in a number of
public and private companies.
On 27(th) November we announced that Gavin Saunders, Finance
Director, would resign from the board on the 7(th) December and
that Alasdair Hadden-Paton, currently executive Deputy Chairman,
would replace him. Theo Fennell continues in the role of Managing
Director.
Offer talks
As notified in a recent statement, we are in ongoing discussions
with EME Capital about a potential takeover of the business and
will inform the market when there are further developments to
report.
Outlook
Our immediate focus is the important Christmas period and in the
New Year we will be reviewing our strategic business plan to
accelerate the development of the brand and our international
network. We remain cautious about the outlook as we enter the key
Christmas period given the challenging economic environment;
however we believe strongly in the long term potential of the
brand.
DIRECTORS' RESPONSIBILITY STATEMENT
We confirm that to the best of our knowledge:
-- The condensed set of financial statements gives a true and fair view of the assets, liabilities,
financial position and profit or loss of the issuer and have been prepared in accordance with
pronouncements on interim reporting issued by the Accounting Standards Board;
-- The interim management report includes a fair review of the information required by:
a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an
indication of important events during the first six months of the
financial year and their impact on the condensed set of financial
statements; and a description of the principal risks and
uncertainties for the remaining six months of the year; and
b) DTR 4.2.8R of the Disclosure and Transparency Rules, being
related party transactions that have taken place in the first six
months of the current financial year and that have materially
affected the financial position or performance of the entity during
that period; and any changes in the related party transactions
described in the last annual report that could do so.
Related parties transactions are disclosed in note 8.
The directors of Theo Fennell plc are listed in the Directors
and Advisors page of this interim report.
On behalf of the Board
Rupert Hambro
Chairman
20 December 2012
Condensed Profit and Loss Account (Unaudited)
for the six months ended 30 September 2012
Six months Six months Year
ended 30 ended 30 ended 31
September September March
2012 2011 2012
GBP GBP GBP
Turnover 4,937,363 5,364,775 12,383,774
Cost of sales (2,286,255) (2,454,716) (5,727,887)
---------- ----------- ------------
Gross profit 2,651,108 2,910,059 6,655,887
Selling & distribution
expenses (2,444,672) (2,862,540) (5,896,236)
Administrative expenses (754,879 ) (1,043,247 ) (1,870,049 )
Exceptional administrative
expenses - (345,000) (488,442)
---------- ----------- ------------
Total expenses (3,199,551) (4,250,787) (8,254,727)
----------
Operating loss (548,443) (1,340,728) (1,598,840)
Net interest payable (61,640) (50,011) (103,781)
---------- ----------- ------------
Loss on ordinary activities
before taxation (610,083) (1,390,739) (1,702,621)
Tax on loss on ordinary
activities - - -
---------- ----------- ------------
Retained loss for the financial
period (610,083) (1,390,739) (1,702,621)
========== =========== ============
Basic loss per share (2.63)p (6.05)p (7.39)p
========== =========== ============
Diluted loss per share (2.63)p (6.05)p (7.39)p
========== =========== ============
All transactions arise from continuing operations
Condensed Balance Sheet (Unaudited)
as at 30 September 2012
As at 30 As at 30 As at 31
September September March
2012 2011 2012
GBP GBP GBP
Fixed assets
Tangible assets 612,414 594,420 522,542
Investments 182,000 182,000 182,000
----------- ----------- ------------
794,414 776,420 704,542
----------- ----------- ------------
Current assets
Stocks 7,618,287 8,793,216 7,658,812
Debtors 1,704,588 1,640,050 1,529,321
Cash at bank and in hand 3,628 28,862 -
----------- ----------- ------------
9,326,503 10,462,128 9,188,133
Creditors: amounts falling
due within one year (4,740,973) (3,813,372) (3,958,036)
----------- ----------- ------------
Net current assets 4,585,530 6,648,756 5,230,097
----------- ----------- ------------
Total assets less current liabilities 5,379,944 7,425,176 5,934,639
Creditors: amounts falling
due after one year (44,395 ) (1,216,881) -
----------- ----------- ------------
Net assets 5,335,549 6,208,295 5,934,639
=========== =========== ============
Capital and reserves
Called up share capital 1,157,901 1,157,901 1.157,901
Share premium account 5,741,166 5,741,166 5,741,166
Profit and loss account (1,758,042 (836,079) (1,147,959)
Share options reserve 194,524) 145,307 183,531
----------- ----------- ------------
Shareholders' funds 5,335,549 6,208,295 5,934,639
=========== =========== ============
Condensed Cash Flow Statement (Unaudited)
for the six months ended 30 September 2012
Six months Six months Year
ended 30 ended 30 ended 31
September September March
2012 2011 2012
GBP GBP GBP
Net cash outflow from
operating activities (766,068) (773,539) 32,853
Returns on investment
and servicing of finance
Net interest paid (61,640) (50,011) (103,781)
Taxation
Corporation tax paid/repayment - - -
Capital expenditure &
financial investment
Purchase of fixed assets (243,346 ) (65,971 ) (165,027)
Net cash outflow before
financing (1,071,054) (889,521) (235,955)
Financing
Issue of shares - 68,000 68,000
Expenses of share issue - - -
Bank loan repayments (1,083,267 ) (79,466 ) (160,810)
----------- ---------- -----------
Decrease in cash (2,154,321) (900,987) (328,765)
=========== ========== ===========
Notes
1. The financial information for the period under review has not
been audited or reviewed by the Company's auditors, Grant Thornton
UK LLP. The Company is not required to adopt IFRS and the Board
considers there would be no advantage to do so voluntarily, so will
continue to prepare the financial statements under UK GAAP.
2. The financial information set out in this interim report does
not constitute statutory accounts as defined in Section 435 of the
Companies Act 2006. The Company's statutory financial statements
for the year ended 31 March 2012, prepared in accordance with
United Kingdom Generally Accepted Accounting Practice (UKGAAP),
have been filed with the Registrar of Companies. The auditor's
report on those financial statements was unqualified. The report
did not contain a statement under Section 498(2) of the Companies
Act 2006.
3. The financial information set out in this interim report has been prepared in accordance with pronouncements on interim reporting issued by the Accounting Standards Board.
4. Loss per share and diluted loss per share. Average market
price for the six months ended 30 September 2012 was 10.58p (31
March 2012: 11.25p)
Six months Six months Year
ended 30 ended 30 ended
September September 31 March
2012 2011 2012
GBP GBP GBP
Loss for the financial
period (610,083) (1,390,739) (1,702,621)
Weighted average number
of ordinary shares 23,158,029 22,998,466 23,034,696
Effect of dilutive - - -
share options
Adjusted weighted
average number of
ordinary shares 23,158,029 22,998,466 23,034,696
Loss per share - basic
and diluted (2.63p) (6.05p) (7.39p)
============= ============= =============
5. Cash flow from operating activities:
Six months Six months Year
ended 30 ended 30 ended 31
September September March
2012 2011 2012
GBP GBP GBP
Operating loss (548,443) (1,340,728 (1,598,840)
Depreciation charges 153,474 160,418) 331,352
Share option charge 10,993 26,199 64,423
Decrease / (increase)
in stocks 40,525 (286,404 848,000
(Increase) / decrease
in debtors (175,267) (43,082 ) 67,647
(Decrease) / increase
in creditors (247,350) 710,058 ) 320,271
----------
Net cash outflow from
operating activities (766,068) (773,539) 32,853
========== ========================== ============
6. The exceptional administrative charge for the six months to
30 September 2011 relates to the costs of the departure of the
Chief Executive and legal fees in relation to the defence of an
employment tribunal hearing.
7. The Company purchased a minority interest (20%) in the
Original Design Partnership on 23 June 2010. This is treated as a
fixed asset investment as the Company does not exert significant
influence over ODP.
8. Related party transactions. For the six months to 30
September 2012 the Original Design Partnership were paid
design/consultancy fees of GBP157,650 (2011: GBP157,650), purchases
of stock GBP26,819 (2011: GBP34,615), and expenses GBPNil (2011:
GBPNil). The Company also held GBP123,511 (2011: GBP102,153) of
consignment stock from the Original Design Partnership. The
Original Design Partnership qualifies as a related party because it
is an entity under the control of an individual (Theo Fennell) who
is key management personnel of Theo Fennell plc
9. Creditors: amounts falling due within one year
Six months Six months Year
ended 30 ended 30 ended
September September 31 March
2012 2011 2012
GBP GBP GBP
Bank loans 172,488 164,611 1,300,148
Bank overdrafts 2,850,221 1,293,357 692,271
Trade creditors 852,501 1,082,906 642,776
Social security and other taxes 230,793 363,702 354,429
Other creditors 57,279 160,673 214,847
Accruals and deferred income 577,691 748,123 753,565
----------
4,740,973 3,813,372 3,958,036
========== =========================== ==========
During the six months to 30 September 2012 the GBP1million bank
loan was repaid, the banking facility has been restructured and
this amount is now payable as part of the bank overdraft.
10. Burlington Arcade opened 18 July 2012 and capital
expenditure during the six months to 30 September 2012 was
GBP196,640.
11. The Company has changed its accounting policy in respect of
the overheads attributable to cost of sales, as the change more
appropriately and clearly represents the Company's actual cost of
sales. The overheads previously attributed to cost of sales are now
separately disclosed as selling and distribution expenses. All
comparatives in the financial information have been restated in
accordance with the above changes in accounting policy.
12. The current economic conditions continue to create
uncertainty over the level of demand for the Company's products and
the Board has therefore undertaken detailed forecasting of the
Company's activities, including sensitivity analysis, through to
March 2014. Cash flow projections are based on conservative
assumptions and the continued availability of an overdraft facility
totalling GBP3 million to 31 January 2013, reducing to GBP2.5
million thereafter to 31 July 2013. Our bank overdraft with
Clydesdale Bank plc currently runs until 31 July 2013. Based on the
continued availability of this facility the board do not envisage a
shortfall in working capital during the coming twelve months.
Accordingly, based on the Company's plans for 2012/13 and after
making enquiries, the Directors have a reasonable expectation that
the Company has adequate resources available from funds generated
from trading and from banking facilities to continue operations for
at least 12 months.
13. A copy of the interim statement will be posted to
shareholders and made available to the public at the Company's
Registered Office, 2b Pond Place, London SW3 6TF for one month from
the date thereof.
14. No interim dividend is declared on the ordinary shares.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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