RNS Number:6917V
Wensum Company PLC
30 April 2007
THE WENSUM COMPANY PLC
PRELIMINARY RESULTS FOR THE YEAR ENDED 27 JANUARY 2007
HIGHLIGHTS
The directors are pleased to announce the results for the year ended 27 January
2007
* Net profit (after losses from discontinued operations) increased to
#602,000 (2006: #279,000)
* Earnings per share increased to 7.68p (2006: 3.57p)
* Dividend for the year increased to 6.6p (2006: 6.5p); final dividend
maintained at 4.4p per share
* Disposal of men's tailoring business completed in the year
* Cash balances and bank deposits up to #3.3m (2006: #1.9m)
* Adopted International Financial Reporting Standards for the first time
* Completed the sale of the Norwich manufacturing site post the balance
sheet date on 16 February 2007, with an initial receipt of #729,000.
The Chairman, Stuart Lyons CBE said:
"The reshaping of the group's business has taken approximately three years. This
has been achieved smoothly and without detriment to the Company's dividend
policy. The directors and management are now focusing entirely on the corporate
uniform sector, which has for some time been the core strength of the Company.
Wensum's extremely strong cash position now provides a good platform for growth,
either organically or by other means. Although sales prospects for the first
half of the current year remain unexciting, the directors are confident that the
group is now in good shape to move forward."
For further information contact:
The Wensum Company plc
Jean Phillips - Chief Executive 01293 422 700
Sandra Badman - Finance director 01293 422 700
Brewin Dolphin Securities Limited (Nomad)
Ian Stanway 0121 236 7000
THE WENSUM COMPANY PLC
PRELIMINARY RESULTS FOR THE YEAR ENDED 27 JANUARY 2007
CHAIRMAN'S STATEMENT
Results
The results for the year are presented under the new International Financial
Reporting Standards ("IFRS") for the first time.
Following the disposal of the men's tailoring business Wensum Clothing, group
sales and operating profits for the year to end January 2007 reflect the
performance of the front-of-house corporate uniform business Wensum Corporate.
Sales fell to #6.4 million as a result of the disposal and the difficult trading
environment foreseen at the half year. Percentage gross margins held up in
spite of lower throughput and costs were well controlled. Profit before tax was
#1.20 million compared with the prior year's #1.56 million as restated under
IFRS.
The release of working capital from Wensum Clothing and surpluses generated from
trading resulted in total group deposits and cash balances rising at the year
end to nearly #3.3 million against #1.9 million one year earlier. Finance income
less costs rose to #97,000 compared with #29,000 in 2006.
Profit from continuing operations after tax fell to #831,000 compared with
#1,114,000 the previous year, but the cost of discontinued operations was much
reduced, leaving net profit for the period well ahead at #602,000 compared with
#279,000 the previous year, and providing full dividend cover on total earnings
of 7.68p per share.
In the group balance sheet under IFRS, the asset held for resale refers to the
land and buildings at the former manufacturing site in Norwich. As announced on
16 February, the Company has now completed the sale of the site and received an
initial consideration of #729,000. On receipt by the purchaser of final
planning permission, Wensum will receive a further payment, depending on the
number of dwellings created, which the directors expect will bring the total
realisation to approximately #1.3 million.
Dividends
The directors recommend a final dividend of 4.4p which, together with the
increased interim dividend of 2.2p, will give a total for the year of 6.6p. The
final dividend, if approved by shareholders, will be payable on 29 June 2007 to
shareholders on the register on 11 May 2007.
Operating Review
Following a period of substantial change, which has inevitably diverted the
company from its core trading operations, the group's management has now been
able to restore its focus on the Wensum Corporate business. This operates in a
sector where Wensum has an excellent reputation for quality and commitment, and
competitive advantage in design and service capability. The impact of
globalisation has made the sector extremely price competitive and there is
downward pressure on margins. Wensum has to manage its pricing policy in order
to deliver a satisfactory balance of sales and profits for shareholders.
During the year, the company won new business with airline and leisure
companies, and succeeded in holding some important key accounts after the end of
the initial contract period. Against this, some contracts which were up for
renewal were lost as a result of competitive tender or policy decisions taken by
clients.
After a buoyant previous year when sales benefited from the fulfilment of
initial contract deliveries to a major customer, sales in 2006-07 fell back to
#6.4 million, a reduction of 37%. Distribution costs, however, fell by over
#200,000, and administrative costs fell by nearly #500,000. Profit from
operations fell by some 28% to #1.1 million.
Directors and Staff
I would like to thank Jean Phillips our Chief Executive, and the executive
directors, management and staff for their high level of commitment to the
Company, and Michael Hall for his valuable contribution as a non-executive
director, particularly in successfully negotiating the sale of the Norwich site.
Prospects
The reshaping of the group's business has taken approximately three years. This
has been achieved smoothly and without detriment to the Company's dividend
policy. The directors and management are now focusing entirely on the corporate
uniform sector, which has for some time been the core strength of the Company.
Wensum's extremely strong cash position, including the sum received after the
year end from the Norwich site disposal, now provides a good platform for
growth, either organically or by other means. Although sales prospects for the
first half of the current year remain unexciting, the directors are confident
that the group is now in good shape to move forward.
Stuart Lyons CBE
30 April 2007
GROUP INCOME STATEMENT
For the year ended 27 January 2007
2007 2006
#000 #000
Continuing operations
Revenue 6,368 10,152
Cost of sales (3,168) (5,856)
Gross profit 3,200 4,296
Distribution costs (575) (789)
Administrative costs (1,518) (1,978)
Profit from operations 1,107 1,529
Finance income 98 31
Finance costs (1) (2)
Profit before tax 1,204 1,558
Income tax expense (373) (444)
Profit for the period from continuing operations 831 1,114
(Loss) for the period from discontinued operations (229) (835)
Profit for the period 602 279
Earnings per share - basic 7.68p 3.57p
- diluted 7.68p 3.57p
Earnings per share from continuing activities
- basic 10.60p 14.24p
- diluted 10.60p 14.24p
Dividends
Proposed dividend per share 4.4p 4.4p
Proposed dividend (#'000) 345 345
Dividends paid during the year 6.6p 6.5p
Dividends paid during the year (#'000) 517 509
GROUP BALANCE SHEET
At 27 January 2007
2007 2006
#000 #000
Non current assets
Intangible assets 63 76
Property, plant and equipment 135 1,032
Deferred tax assets 45 69
243 1,177
Current assets
Inventories 1,561 2,637
Receivables and prepayments 1,752 2,530
Current corporation tax - 42
Loans and receivables:
Term deposit at bank 1,500 -
Cash and cash equivalents 1,754 1,910
6,567 7,119
Assets held for resale 653 -
7,220 7,119
Current liabilities
Trade and other payables 1,313 2,502
Current corporation tax 261 -
1,574 2,502
Non current liabilities
Deferred tax liabilities 45 35
Net assets 5,844 5,759
Equity attributable to equity holders of the parent
Share capital 392 392
Share premium account 189 189
Capital redemption reserve 2 2
Profit and loss account 5,261 5,176
Total equity 5,844 5,759
GROUP STATEMENT OF CHANGES IN EQUITY
For the year ended 27 January 2007
Share Capital Share premium Capital Profit and Total equity
Redemption loss account
Reserve
#000 #000 #000 #000 #000
Balance at 30 January 2005 391 171 2 5,406 5,970
Shares issued 1 18 - - 19
Profit for the year - - - 279 279
Dividends paid - - - (509) (509)
Balance at 28 January 2006 392 189 2 5,176 5,759
Profit for the year - - - 602 602
Dividends paid - - - (517) (517)
Balance at 27 January 2007 392 189 2 5,261 5,844
GROUP CASH FLOW STATEMENT
For the year ended 27 January 2007
Cashflows from operating activities: 2007 2006
#000 #000
Profit before tax 1,204 1,558
Loss before tax on discontinued operations (287) (1,182)
Depreciation and amortisation 154 292
Loss on disposal of fixed assets - 227
Impairment of intangibles - 88
Decrease in inventories 532 1,561
Decrease / (increase) in receivables and prepayments 772 (302)
(Decrease) in trade and other payables (993) (1,237)
Finance income (98) (31)
Finance costs 1 2
Corporation tax received / (paid) 8 (253)
Interest paid (1) (2)
1,292 721
Cashflow from investing activities:
Payments to acquire property, plant and equipment (6) (34)
Payments to acquire intangible assets (24) (3)
Disposal of discontinued operations 532 -
Placement of monies on long term deposit (1,500) -
Interest received 67 33
(931) (4)
Cashflow from financing activities:
Equity dividends paid (517) (509)
Proceeds from the issue of shares - 19
Loan repayment - (31)
Capital element of finance lease paid - (19)
(517) (540)
(Decrease) / increase in cash and cash equivalents: (156) 177
Cash and cash equivalents at the beginning of period 1,910 1,733
Cash and cash equivalents at end of period 1,754 1,910
In accordance with IAS 58 term deposits of #1,500,000 have been excluded from
the cash and cash equivalent balances.
NOTES THE FINANCIAL INFORMATION
1 First time adoption of International Financial Reporting Standards
The Company has adopted International Financial Reporting Standards ("IFRS") for the first time in
its consolidated financial statements. The Group has applied IFRS1 ("First time adoption of IFRS") to
provide a starting point for reporting under IFRS. The date of transition to IFRS was 30 January 2005
and all comparative information in the above financial information has been restated to reflect the
Group's adoption of IFRS. The accounting policies that have been applied in the opening balance sheet
have also been applied throughout all periods presented in the financial information.
2 Earnings per share
The earnings per share are based on profits for the year of #602,000 (2006: #279,000) and on 7,833,916
(2006: 7,823,971) ordinary shares, being the weighted average number of shares in issue during the
year. There is no dilution of earnings per share for 2007 or 2006 as all employee share options had
been exercised at 28 January 2006 and no options were granted after this date.
3 Dividends
The Directors recommend a final dividend of 4.4p (2006: 4.4p) in addition to the interim dividend paid
in the year of 2.2p (2006:2.1p). If approved by shareholders at the Annual General Meeting to be held
on 28 June 2007 dividend will be paid on 29 June 2007 to shareholders on the register on 11 May 2007.
The shares will become ex dividend on 9 May 2007.
4 Annual General Meeting
The Annual General Meeting of the Company will be held at The Wensum Company plc, South Corner, Old
Brighton Road, Lowfield Heath, Crawley, RH11 0PH on 28 June 2007 commencing at 11:00 a.m.
5 Financial Information
The above audited financial information does not amount to Statutory Accounts within the meaning of
section 240 of the Companies Act 1985. The Statutory Accounts for the year ended 28 January 2006 which
the auditors issued an unqualified opinion, have been delivered to the Registrar of Companies.
6 Annual Report
The Annual Report and Financial Statements will be despatched to shareholders by 14 May 2007 and will
be available from that date from the Company Secretary at the Company's registered office South Corner,
Old Brighton Road, Lowfield Heath, Crawley, RH11 0PH.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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