RNS Number:9655S
Faupel PLC
08 December 2003
EMBARGOED UNTIL 7.30AM ON MONDAY 8TH DECEMBER 2003
Faupel plc
Interim results
Faupel plc, the UK based company involved in the design, importation and
distribution of home furnishings, branded clothing and PPE safety equipment from
China and the Far East, has today announced unaudited interim results for the
six months ended 30th September 2003.
Key Points:
* Loss before tax decreased by 86% to #40,000 (2002: loss #288,000).
* Loss per share 0.25p (2002: loss per share 1.83p).
* No interim dividend payable (2002: nil).
* Bank debt (net of cash) 15% down on last year; cash resources of #0.9
million (2002: #1.5 million).
* Margin improvement initiatives continue. Improvement of 2.2% on same
period last year.
Commenting on the results, David Newbigging, Chairman, said:
"The six months results are slightly behind our expectations but well ahead of
the same period last year, mainly due to a combination of a 2.2% improvement in
trading margins and a 6% reduction in overheads.
The general business environment remains difficult and unpredictable, but we
anticipate that the trading performance in the second half year will be similar
to that of the first half."
Enquiries:
Faupel Plc
Laurence Mead, Group Chief Executive
James McClean, Finance Director Tel: 020 8339 3100
Buchanan Communications Ltd
Tim Thompson / Catherine Miles Tel: 020 7466 5000
Chairman's Interim Statement
Results
The Group made a reduced loss before tax in the six months to 30th September
2003 of #40,000 (2002: loss of #288,000). Losses per share were 0.25p compared
to 1.83p last year. Turnover was down #1.16m (8%). This decline was largely
in the Home Furnishings division where turnover fell by #0.93m because of the
continuing focus on improving margins, and from the closure of unprofitable
businesses.
Despite this decline in turnover, the six months results are only slightly
behind our expectations but well ahead of the same period last year, mainly due
to a combination of a 2.2% improvement in trading margins and a 6% reduction in
overheads. The interest charge has been reduced by #28,000 to #155,000 in the
six month period.
Dividends
The Board is not recommending the payment of an interim dividend. No interim
dividend was paid last year.
Trading
The Home Furnishings division, which began operating as a combined unit from 1st
April 2003, achieved turnover and profit broadly in line with our expectations.
Margins have also improved in this division.
Our ongoing Garments business under the Champion brand name increased its
turnover by 8% with margins ahead of expectation. The turnover is slightly
disappointing at this point in the year as a result of the very dry autumn
weather, but it is expected to improve in the second half. A new spring range
is being introduced for sale before the financial year-end. Last year's
turnover for the Garments division as a whole included #0.29m from the now
discontinued Discount Garments division.
The inability to travel to China in the summer because of the SARS virus has
delayed the start of the Faupel Safety Products business until early 2004
because the travel restrictions fell at the same time as our final factory
audits were due to take place. The Industrial Products business is being held
back by lower revenue than anticipated but profit is ahead of last year. Sales
of airline products declined by 20% due to the loss of a major contract but we
continue to tender on a significant number of contracts on an on-going basis.
Agency commission income remains broadly unchanged.
Finance
Stocks continued to be carefully managed and were #0.24m (5.6%) below last
year's figure. It remains a key management priority to retain tight control of
working capital. The end of the first half-year traditionally sees our working
capital needs increase as we gear up for Christmas sales, and that is the case
again this year. However, bank debt net of cash at 30th September had been
further reduced on a comparative basis to #4.09m (2002: #4.81m). Cash at bank
and in hand at 30th September was #0.89m.
Significant disposal
As announced in August 2003, Faupel House has been sold for #1.25m. This is in
line with the last valuation and will generate neither profit nor loss. A
non-refundable deposit of #125,000 has been received and the balance of the
proceeds will be received in January 2004 at the earliest, with the latest
completion date being 31st May 2004.
Relocation plans
With the sale of Faupel House, a number of administrative functions will be
relocated to the Company's Manchester offices where we have signed an agreement
for a 10 year lease with a 5 year break option on a refurbished office suite of
6,400 square feet. Occupation is expected before Christmas 2003. Meanwhile,
suitable premises are being sought for the resultant smaller head office on the
south side of the M25.
We have also signed an agreement for a 10 year lease with a 7 year break option
on a combined warehouse and office unit of 75,500 square feet in West Bromwich,
West Midlands. This will house all of the Company's distribution and logistics
activities currently in Oldbury, West Midlands. This move is expected to take
place in mid April 2004.
Prospects
The general business environment remains difficult and unpredictable, but we
anticipate that the trading performance in the second half year will be similar
to that of the first half.
D K Newbigging
Chairman
8th December 2003
Interim Results
for the six months ended 30 September 2003
6 months 6 months Year ended
30 September 30 September 31 March
2003 2002 2003
as restated as restated
(see note) (see note)
(unaudited) (unaudited) (audited)
Notes #'000 #'000 #'000
Turnover 2 12,710 13,867 26,937
--------- -------- --------
Cost of sales 9,595 10,781 20,689
--------- -------- --------
Gross profit 3,115 3,086 6,248
Distribution costs (1,902) (1,934) (4,210)
Administration expenses (1,098) (1,257) (2,565)
--------- --------- ---------
Operating profit/(loss) 2 115 (105) (527)
Interest (155) (183) (348)
-------- -------- --------
Loss on ordinary activities
before taxation (40) (288) (875)
Taxation - - -
-------- -------- --------
Retained loss (40) (288) (875)
-------- -------- --------
Loss per share, basic and diluted 3 (0.25)p (1.83)p (5.6)p
-------- -------- --------
Note: The comparative figures have been amended to reflect the current treatment
of certain costs as overheads rather than cost of sales.
Consolidated Balance Sheet
at 30 September 2003
6 months 6 months Year ended
30 September 30 September 31 March
2003 2002 2003
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
Fixed assets
Tangible assets 1,496 1,701 1,556
Investments - 85 -
-------- -------- --------
1,496 1,786 1,556
-------- -------- --------
Current assets
Stocks and goods in transit 4,052 4,291 3,407
Trade debtors 4,470 5,097 4,652
Other debtors 371 392 286
Cash at bank and in hand 894 1,473 1,072
-------- -------- --------
9,787 11,253 9,417
-------- -------- --------
Creditors: amounts falling due within one year
Bills of exchange payable 4,982 6,285 4,400
Other creditors 2,034 1,860 2,016
-------- -------- --------
7,016 8,145 6,416
-------- -------- --------
Net current assets 2,771 3,108 3,001
-------- -------- --------
Provisions for liabilities and charges - - (250)
-------- -------- --------
Net assets 4,267 4,894 4,307
-------- -------- --------
Capital and reserves
Called up share capital 785 785 785
Share premium account 2,882 2,882 2,882
Other reserve 93 93 93
Revaluation reserve 674 682 674
Profit and loss account (167) 452 (127)
--------- ------- --------
Equity shareholders' funds 4,267 4,894 4,307
--------- ------- --------
Summary Consolidated Cash Flow Statement
for the six months ended 30 September 2003
6 months ended 6 months ended Year ended
30 September 30 September 31 March
2003 2002 2003
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
Operating profit/(loss) 115 (105) (527)
Depreciation 66 75 165
Net (increase)/decrease in working capital (534) (284) 1,313
Impairment of property - - 100
Loss on disposal of investments - - 27
(Decrease)/increase in provisions
for liabilities and charges (250) - 250
-------- -------- --------
Cash (outflow)/inflow from operating activities (603) (314) 1,328
Returns on investments and servicing of finance (155) (183) (348)
Taxation 4 - (6)
Capital expenditure and financial investment (6) (28) (15)
-------- -------- --------
Cash (outflow)/inflow before use of liquid
resources (760) (525) 959
Management of liquid resources 582 529 (1,356)
-------- -------- --------
(Decrease)/increase in cash in the period (178) 4 (397)
-------- -------- --------
Reconciliation of net cash flow to movement in cash balances
(Decrease)/increase in cash in the period and
movement in net debt in the year (178) 4 (397)
Cash at beginning of period 1,072 1,469 1,469
-------- -------- --------
Cash at end of period 894 1,473 1,072
-------- -------- --------
Summary of net bank debt
Bills of exchange at end of period (4,982) (6,285) (4,400)
Cash at end of period 894 1,473 1,072
-------- -------- --------
Bank debt net of cash at end of period (4,088) (4,812) (3,328)
-------- -------- --------
Notes
1. Results for the six months ended 30 September 2002 and 2003 are unaudited
and have been prepared on the basis of the accounting policies set out in the
company's statutory accounts for the year ended 31 March 2003.
The results for the year ended 31 March 2003 have been abridged from the
published group accounts, for which an unqualified audit report was issued and
which have been filed with the Registrar of Companies. The financial
information set out on pages 4 to 6 does not comprise full financial
statements within the meaning of the Companies Act 1985.
2. Analysis of turnover and operating profit
6 months ended 6 months ended Year ended
30 September 2003 30 September 2002 31 March 2003
Operating Operating Operating
Sales profit/ Sales profit/ Sales profit/
(loss) (loss) (loss)
as restated as restated as restated
#'000 #'000 #'000 #'000 #'000 #'000
Home Furnishings 9,602 601 10,533 633 20,194 1,050
Brands - Garments 1,145 10 1,341 (168) 2,753 (61)
Industrial Products 1,963 89 1,993 53 3,990 125
Central admin costs - (585) - (623) - (1,264)
-------- -------- -------- --------- -------- --------
12,710 115 13,867 (105) 26,937 (150)
Charge for dilapidations on
warehouse leases (250)
Loss on sale of investment (27)
Impairment of freehold
property (100)
-------- -------- --------- -------- -------- --------
12,710 115 13,867 (105) 26,937 (527)
-------- -------- --------- -------- -------- --------
3. Losses per share for the six months ended 30 September 2003 are based on
the group loss after taxation of #40,000 (2002: loss after tax #288,000) and
ordinary shares in issue during the period of 15,709,447 (2002: 15,709,447).
Diluted losses per share calculated in accordance with FRS14, is unchanged from
the basic losses per share.
4. The Company has exchanged unconditional contracts on the sale of Faupel
House for #1.25m and received a 10% deposit. However, completion is not until
May 2004 and so the asset will remain on the balance sheet until then. The
deposit is held at the Company's solicitors and is not included on the balance
sheet.
5. Copies of this statement of interim results will be sent to shareholders
and copies will also be available on application to the group's headquarters and
registered office at Faupel House, Giggs Hill Road, Thames Ditton, Surrey KT7
0TR.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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