TIDMAXN
RNS Number : 1547T
Alexon Group PLC
23 September 2010
ALEXON
Alexon Group plc Interim Results
for the 26 weeks to 31 July 2010
("Alexon" or "the Company" or "the Group")
Half year results for the 26 weeks ended 31 July 2010
Alexon Group plc announces its half year results for the 26 weeks ended 31 July
2010, demonstrating continued progress with the turnaround strategy.
Financial summary
· Gross turnover down 9% with like-for-like sales down 5.5%
· Profit before tax and exceptional items on continuing operations of
GBP0.95m (2009: GBP0.9m)
· Earnings per share from continuing operations after exceptional items
of 0.8p (2009: loss of 13.15p)
· No net debt as at 31 July 2010 (2009: net debt of GBP1.4m)
· No interim dividend is proposed to conserve cash for further
investment (2009: nil)
Current trading
· Trading since the half year has been encouraging with a like-for-like
sales increase of 3.1% for the first 7 weeks of the second half, with some
margin improvement
Strategic and operational highlights
· Continued progress with turnaround strategy
· Successful Refinancing and Capital Raising announced in March 2010
· Good progress on key priorities identified at the time of the Capital
Raising
o First phase of property portfolio reorganisation complete
o Further progress made with turnaround of brand and product design
o Online sales up 130% year on year
o First batch of store and concession refits complete
· 40 concession outlet refits completed
· 50 new concessions opened in the first half, with 80 further confirmed
openings (62 in the second half)
· Further strengthening of the management team and operational
structures
· Continued rigorous control of costs and focus on cash management
Commenting on the results, Jane McNally, Chief Executive, said:
"We are pleased to have returned to operating profit in the first half of the
year despite trading being impacted by a challenging market and restricted stock
levels. Following our successful Capital Raising in March, we made good progress
with the reorganisation of our property portfolio. We also began the necessary
investment in our internal systems and infrastructure, including website
development and a new logistics system as well as the continuation of our outlet
refurbishment programme.
Trading since the half year has been encouraging. The Autumn/Winter ranges have
been well received and are selling strongly across all the brands, resulting in
a like-for-like sales increase of 3.1% for the first 7 weeks to 18 September
2010 with some margin improvement, reflecting a particularly strong recovery
from Kaliko and Ann Harvey.
Despite the improved performance since the half year, we remain cautious about
the second half given the uncertainty over the impact of planned government cuts
and the expectation that the economic climate will remain tough for the
immediate future. The Alexon brands are, however, uniquely positioned to capture
a broad customer base in a growing sector. As such, we remain confident that
there is great potential for future profit growth."
Enquiries:
+-----------------------------------------------+-------------------+
| Alexon Group plc | 01582 723131 |
| Jane McNally, Chief Executive Officer | |
| John Boyle, Group Finance Director and | |
| Company Secretary | |
| | |
+-----------------------------------------------+-------------------+
| Brunswick Group LLP | 020 7404 5959 |
| Simon Sporborg / Zoë Bird | |
+-----------------------------------------------+-------------------+
Overview
Despite the tough retail environment, Alexon delivered pre-tax profit from
continuing operations, before exceptional items, for the 26 weeks ended 31 July
2010 of GBP0.95 million (2009: GBP0.9 million). Gross sales were 9% lower than
the prior year, with like-for-like sales down 5.5% and gross margins down 1.9 %
on the prior year. Earnings per share from continuing operations after
exceptional items was 0.8p (2009: loss per share of 13.15p). No interim dividend
is proposed (2009: nil).
Tight working capital control prior to the Group's refinancing in March 2010
resulted in significantly tighter stocks during the period. This, coupled with
the loss of high summer stock due to external disruptions such as air
transportation issues, led to lower sales during the period. Kaliko continued to
improve throughout the period, returning to weekly positive like-for-like growth
by the end of the half. Dash performed well, recording positive growth as new
openings added to its store portfolio. Eastex suffered a small like-for-like
decline as the core customer reacted cautiously during the period of the
election and emergency budget, but its performance improved towards the end of
the half with the pre-Autumn/Winter season. Minuet and Ann Harvey continued
their improvement, although the Ann Harvey Spring Summer range was
disproportionally affected by the external supply disruptions. Alex & Co
continued to be the poorest performer within the portfolio.
Update on strategy
Following the Capital Raising and refinancing in March 2010, good progress has
been made to accelerate the Group's turnaround strategy.
Property Portfolio Reorganisation
Of the GBP18.2 million raised at the Capital Raising, approximately GBP10
million was allocated to satisfy the consideration payable for the Property
Portfolio Reorganisation, which has progressed well. The portfolio has now been
reshaped and the Group now operates from 63 standalone stores. As well as the
agreed surrenders, four further properties have been returned to landlords and
two leases have been sold. Two leases have also been restructured. The
restructuring has to date cost GBP7.1m and generated annual cash cost savings of
GBP5.7m. Further work is underway to ensure that all remaining stores are
profitable and further lease disposals are planned where appropriate.
The expansion of the business through new concession openings has continued
strongly and the business has secured over 100 new outlets since the start of
the year. Of these, 50 were opened by the end of the first half and a further
62 are scheduled to be opened before the end of the year.
Whilst the new openings will not fully replace lost turnover in the current
financial year from the closures notified to the Group prior to the refinancing,
the projected full year turnover from these new concessions will more than
compensate for the closures on an annualised basis.
Logistics & Systems
The streamlining of the logistics function to improve efficiency commenced with
the closure of the Group's freehold Cardiff warehouse at the end of August 2010,
with its operation being moved into spare capacity in the Sywell warehouse. The
replacement warehouse management system is under development and on track for
completion in the first quarter of 2011. Our new store communications system is
also under development and due to be completed in the first half of 2011.
Following the successful implementation of these two new systems across the
Group, work on the replacement merchandising system will commence, with an
expected completion date of January 2013.
Concession/store re-fits
New brand identities have been developed for Dash and Eastex, the only two
brands yet to be revamped, with pilot stores now open in Bath and Marlborough
and concessions in Newcastle and Newton Abbott. An evolution of the Kaliko
re-brand is underway in the Henley store and is due to be complete by the end of
September 2010. The performance of these new identities is being monitored for
potential roll out. This now completes the reinvigoration of all brands in the
Alexon portfolio. The refit of concessions continues, with a further 40 refits
completed in the half, which will drive important linear density and improved
brand image.
New store openings
As announced at the time of the Capital Raising, we have adopted a rigorous and
disciplined approach to new store openings. We continue to closely monitor and
evaluate opportunities for new store openings and will not open a new store
unless the payback period on the capital investment required is less than 36
months.
Online
The Group now operates websites for all of its six own brands. All brands also
now feature on the House of Fraser and Debenhams websites, with Kaliko available
on the John Lewis website. The Group has also opened a stock clearance site on
eBay at the end of the half. Total sales through the web channel are up 130%
year on year. The development of our online offer will be further assisted by
the appointment of an e-commerce director which we hope to announce in due
course. .
Management
The Group has further strengthened its management team and recently made two key
senior appointments. Kevin Keaney joined the Group in September 2010 in the
newly created role of Commercial Director. Kevin, who joined from Animal where
he was most recently Chief Executive Officer, has a wealth of experience in the
retail sector, having worked at Marks & Spencer, Somerfield and J Sainsbury, and
will be taking responsibility for implementing Alexon's operational initiatives
to help facilitate the turnaround. Kirstie Watson also joined the group in
September as HR Director. Prior to working as a freelance HR consultant
providing strategic and operational HR advice to leading fashion organisations
including the British Fashion Council, Aurora , Mosaic, and Mint Velvet,
Kirstie was group HRD for the Rubicon Group.
The Group also welcomed Avril Palmer-Baunack and David Adams as Non-Executive
Directors in July and September 2010 respectively. Currently CEO of Autologic,
Avril has over 20 years of commercial experience in turnarounds and pioneering
e-commerce activity. David has been involved at an executive level in the retail
sector for many years, he is currently Chairman of Jessops, and was formerly
Deputy CEO and Group Finance Director at House of Fraser. Both Avril and David
are excellent additions to the Alexon Board and we are delighted to welcome them
to the team.
Balance Sheet and cash flow
Stock levels were 2.6% higher than at the same point last year, as a result of
accelerating the Autumn/Winter stock into the business. Spring/Summer terminal
stock was 12% below the prior year at the period end. Creditors were
significantly reduced from the year end level due to the repayment of the
overdraft, and the utilisation of GBP10m of the onerous lease provision to exit
onerous leases and offset losses on the remaining loss making stores.
The Group ended the half with a neutral cash position (30 January 2010: net debt
of GBP9m). The cash inflow from the refinancing of GBP18.2m was offset in the
period repaying the opening overdraft of GBP9m, with GBP7.1m paid to landlords
to exit onerous leases, capital expenditure of GBP0.8m and an operating cash
outflow of GBP1.4m.
In line with the current economic climate, capital expenditure, working capital
and operating costs continue to be rigorously monitored and controlled.
Dividend
The Board has decided not to declare an interim dividend to conserve cash for
further investment (2009: nil).
Outlets
A breakdown of the Group's outlets as at 31 July 2010 is as follows:-
+---------------------------+----------------+----------------+----------------------+----------------+
| | UK Shops |UK Concessions |European Concessions | Total |
+---------------------------+----------------+----------------+----------------------+----------------+
| Eastex | 0 | 250 | 27 | 277 |
+---------------------------+----------------+----------------+----------------------+----------------+
| Dash | 11 | 181 | 21 | 213 |
+---------------------------+----------------+----------------+----------------------+----------------+
| Ann Harvey* | 47 | 52 | 29 | 128 |
+---------------------------+----------------+----------------+----------------------+----------------+
| Minuet | 0 | 109 | 22 | 131 |
+---------------------------+----------------+----------------+----------------------+----------------+
| Alexon | 1 | 127 | 24 | 152 |
+---------------------------+----------------+----------------+----------------------+----------------+
| Kaliko | 11 | 113 | 27 | 152 |
+---------------------------+----------------+----------------+----------------------+----------------+
| Clearance-"Stock Trading" | 9 | 11 | 1 | 20 |
+---------------------------+----------------+----------------+----------------------+----------------+
| WEB | 6 | 13 | 0 | 19 |
+---------------------------+----------------+----------------+----------------------+----------------+
| Total | 85 | 856 | 151 | 1092 |
+---------------------------+----------------+----------------+----------------------+----------------+
*16 stores on temporary leases at zero rent
Principal Risks and uncertainties
The principal risks and uncertainties facing the Group over the remainder of the
financial year are contained within note 15 to the financial statements.
Current Trading and Outlook
Trading since the half year has been encouraging, with some margin improvement.
The Autumn/Winter ranges have been well received and are selling well across all
the brands, resulting in a like-for-like sales increase of 3.1% for the first 7
weeks to 18 September 2010. The Group has seen a particularly strong recovery
from Kaliko and Ann Harvey.
Despite the improved performance since the half year, we remain cautious about
the second half given the uncertainty over the impact of planned government cuts
and the expectation that the economic climate will remain tough for the
remainder of the year. The Alexon brands are uniquely positioned to capture a
broad customer base in a growing sector. As such, we remain confident on medium
and long term prospects.
CONSOLIDATED INCOME STATEMENT
+-----------------------------+----+-------------+-------------+----------+-------------+-------------+----------+-------------+-------------+-----------+
| | | Unaudited 26 weeks | Unaudited 26 weeks to | Audited 52 weeks to 30 |
| | | to 31 July 2010 | 1 August 2009 | January 2010 |
+-----------------------------+----+--------------------------------------+--------------------------------------+---------------------------------------+
| | | Pre- | | | Pre- | Exceptional | | Pre- | | |
| | | exceptional | Exceptional | | exceptional | items (see | | exceptional | Exceptional | |
| | | items | items (see | Total | items | note 4) | Total | items | items | Total |
| | | | note 4) | | | | | | | |
+-----------------------------+----+-------------+-------------+----------+-------------+-------------+----------+-------------+-------------+-----------+
| | | GBP000's | GBP000's | GBP000's | GBP000's | GBP000's | GBP000's | GBP000's | GBP000's | GBP000's |
+-----------------------------+----+-------------+-------------+----------+-------------+-------------+----------+-------------+-------------+-----------+
| | | | | | | | | | | |
+-----------------------------+----+-------------+-------------+----------+-------------+-------------+----------+-------------+-------------+-----------+
| Revenue - continuing | | 69,667 | - | 69,667 | 77,681 | - | 77,681 | 153,382 | - | 153,382 |
| operations | | | | | | | | | | |
+-----------------------------+----+-------------+-------------+----------+-------------+-------------+----------+-------------+-------------+-----------+
| Cost of sales | | (62,224) | - | (62,224) | (70,115) | (8,257) | (78,372) | (139,333) | (12,964) | (152,297) |
+-----------------------------+----+-------------+-------------+----------+-------------+-------------+----------+-------------+-------------+-----------+
| | | | | | | | | | | |
+-----------------------------+----+-------------+-------------+----------+-------------+-------------+----------+-------------+-------------+-----------+
| Gross profit/(loss) - | | 7,443 | - | 7,443 | 7,566 | (8,257) | (691) | 14,049 | (12,964) | 1,085 |
| continuing operations | | | | | | | | | | |
+-----------------------------+----+-------------+-------------+----------+-------------+-------------+----------+-------------+-------------+-----------+
| Administrative expenses | | (2,964) | - | (2,964) | (3,245) | (773) | (4,018) | (7,311) | (395) | (7,706) |
+-----------------------------+----+-------------+-------------+----------+-------------+-------------+----------+-------------+-------------+-----------+
| Distribution costs | | (3,278) | - | (3,278) | (3,214) | - | (3,214) | (7,102) | - | (7,102) |
+-----------------------------+----+-------------+-------------+----------+-------------+-------------+----------+-------------+-------------+-----------+
| | | | | | | | | | | |
+-----------------------------+----+-------------+-------------+----------+-------------+-------------+----------+-------------+-------------+-----------+
| Operating profit/(loss) - | | 1,201 | - | 1,201 | 1,107 | (9,030) | (7,923) | (364) | (13,359) | (13,723) |
| continuing operations | | | | | | | | | | |
+-----------------------------+----+-------------+-------------+----------+-------------+-------------+----------+-------------+-------------+-----------+
| Finance income | | 29 | - | 29 | 95 | - | 95 | 96 | - | 96 |
+-----------------------------+----+-------------+-------------+----------+-------------+-------------+----------+-------------+-------------+-----------+
| Finance expense | | (280) | - | (280) | (295) | - | (295) | (624) | - | (624) |
+-----------------------------+----+-------------+-------------+----------+-------------+-------------+----------+-------------+-------------+-----------+
| | | | | | | | | | | |
+-----------------------------+----+-------------+-------------+----------+-------------+-------------+----------+-------------+-------------+-----------+
| Profit/(loss) before | | 950 | - | 950 | 907 | (9,030) | (8,123) | (892) | (13,359) | (14,251) |
| taxation | | | | | | | | | | |
+-----------------------------+----+-------------+-------------+----------+-------------+-------------+----------+-------------+-------------+-----------+
| Income tax (expense)/credit | | (3) | - | (3) | (466) | 2,714 | 2,248 | 67 | - | 67 |
+-----------------------------+----+-------------+-------------+----------+-------------+-------------+----------+-------------+-------------+-----------+
| | | | | | | | | | | |
+-----------------------------+----+-------------+-------------+----------+-------------+-------------+----------+-------------+-------------+-----------+
| Profit/(loss) for the | | 947 | - | 947 | 441 | (6,316) | (5,875) | (825) | (13,359) | (14,184) |
| financial period from | | | | | | | | | | |
| continuing operations | | | | | | | | | | |
| attributable to equity | | | | | | | | | | |
| holders of the Company | | | | | | | | | | |
+-----------------------------+----+-------------+-------------+----------+-------------+-------------+----------+-------------+-------------+-----------+
| (Loss)/profit from | | - | (163) | (163) | - | 10,408 | 10,408 | - | 8,382 | 8,382 |
| discontinued operations | | | | | | | | | | |
+-----------------------------+----+-------------+-------------+----------+-------------+-------------+----------+-------------+-------------+-----------+
| | | | | | | | | | | |
+-----------------------------+----+-------------+-------------+----------+-------------+-------------+----------+-------------+-------------+-----------+
| Profit/(loss) for the | | 947 | (163) | 784 | 441 | 4,092 | 4,533 | (825) | (4,977) | (5,802) |
| financial period | | | | | | | | | | |
| attributable to equity | | | | | | | | | | |
| holders of the Company | | | | | | | | | | |
+-----------------------------+----+-------------+-------------+----------+-------------+-------------+----------+-------------+-------------+-----------+
CONSOLIDATED INCOME STATEMENT
+---------------------------------------------------------------------------------------------------------------------------+---------+---------+---------+---------+---------+----------+---------+----------+
| | Unaudited 26 | Unaudited 26 | Audited 52 weeks |
| | weeks to 31 July | weeks to 1 August | to 30 January |
| | 2010 | 2009 | 2010 |
+-----------------------------------------------------------------------------------------------------------------------------------------------+-------------------+--------------------+--------------------+
| Earnings/(losses) per share | | | | | | |
| from continuing operations | | | | | | |
| attributable to equity | | | | | | |
| holders of the Company | | | | | | |
| during the period | | | | | | |
+-----------------------------------------------------------------------------------------------------------------------------------------------+---------+---------+---------+----------+---------+----------+
| Basic | 6 | 6 | | 0.80p | | (13.15)p | | (31.74)p |
+---------------------------------------------------------------------------------------------------------------------------+---------+---------+---------+---------+---------+----------+---------+----------+
| Diluted | | 6 | | 0.79p | | (13.15)p | | (31.74)p |
+---------------------------------------------------------------------------------------------------------------------------+---------+---------+---------+---------+---------+----------+---------+----------+
| | | | | | | | | |
+---------------------------------------------------------------------------------------------------------------------------+---------+---------+---------+---------+---------+----------+---------+----------+
| (Losses)/earnings per share from discontinued operations attributable to equity holders of the Company during the period | | | | | | | | |
+---------------------------------------------------------------------------------------------------------------------------+---------+---------+---------+---------+---------+----------+---------+----------+
| Basic and diluted | | 6 | | (0.13)p | | 23.29p | | 18.76p |
+---------------------------------------------------------------------------------------------------------------------------+---------+---------+---------+---------+---------+----------+---------+----------+
| | | | | | | | | |
+---------------------------------------------------------------------------------------------------------------------------+---------+---------+---------+---------+---------+----------+---------+----------+
| Earnings/(losses) per share from total operations attributable to equity holders of the Company during the period | | | | | | | | |
+---------------------------------------------------------------------------------------------------------------------------+---------+---------+---------+---------+---------+----------+---------+----------+
| Basic | | 6 | | 0.67p | | 10.14p | | (12.98)p |
+---------------------------------------------------------------------------------------------------------------------------+---------+---------+---------+---------+---------+----------+---------+----------+
| Diluted | | 6 | | 0.66p | | 10.14p | | (12.98)p |
+---------------------------------------------------------------------------------------------------------------------------+---------+---------+---------+---------+---------+----------+---------+----------+
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
+-------------------------------------+-----------+-+-----------+----------+-----------+
| | Unaudited | | Unaudited | | Audited |
| | | | | | |
+-------------------------------------+-----------+-+-----------+----------+-----------+
| | 26 weeks | | 26 | | 52 weeks |
| | to | | weeks | | to |
| | | | to | | |
+-------------------------------------+-----------+-+-----------+----------+-----------+
| | 31 July | | 1 | | 30 |
| | 2010 | | August | | January |
| | | | 2009 | | 2010 |
+-------------------------------------+-----------+-+-----------+----------+-----------+
| | GBP000's | | GBP000's | | GBP000's |
+-------------------------------------+-----------+-+-----------+----------+-----------+
| | | | | | |
+-------------------------------------+-----------+-+-----------+----------+-----------+
| | | | | | |
+-------------------------------------+-----------+-+-----------+----------+-----------+
| Profit/(loss) for the period | 784 | | 4,533 | | (5,802) |
+-------------------------------------+-----------+-+-----------+----------+-----------+
| | | | | | |
+-------------------------------------+-----------+-+-----------+----------+-----------+
| Other comprehensive income: | | | | | |
+-------------------------------------+-----------+-+-----------+----------+-----------+
| Actuarial (loss)/gain arising in | (112) | | 1,352 | | 117 |
| defined benefit pension scheme | | | | | |
+-------------------------------------+-----------+-+-----------+----------+-----------+
| Loss on cash flow hedges | (425) | | (4,399) | | (3,635) |
+-------------------------------------+-----------+-+-----------+----------+-----------+
| | | | | | |
+-------------------------------------+-----------+-+-----------+----------+-----------+
| Other comprehensive expense for the | (537) | | (3,047) | | (3,518) |
| period, net of tax | | | | | |
+-------------------------------------+-----------+-+-----------+----------+-----------+
| | | | | | |
+-------------------------------------+-----------+-+-----------+----------+-----------+
| Total comprehensive | 247 | | 1,486 | | (9,320) |
| income/(expense) for the period | | | | | |
| attributable to equity holders of | | | | | |
| the Company | | | | | |
+-------------------------------------+-----------+-+-----------+----------+-----------+
| | | | | | |
+-------------------------------------+-----------+-+-----------+----------+-----------+
| | | | | | |
+-------------------------------------+-----------+-+-----------+----------+-----------+
| | | | | | |
+-------------------------------------+-----------+-+-----------+----------+-----------+
| | | | | | |
+-------------------------------------+-----------+-+-----------+----------+-----------+
CONSOLIDATED BALANCE SHEET
+----------------------+----------+----------+----------+--------+--+--+--+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
| | | Unaudited as at | | Unaudited as at | | Audited as at |
+----------------------+----------+---------------------------------+-----+-----------------------------------------------------------------+----------+-------------------------------------------+
| | | 31 July 2010 | | 1 August 2009 | | 30 January 2010 |
+----------------------+----------+---------------------------------+-----+-----------------------------------------------------------------+----------+-------------------------------------------+
| | | | | (restated) | | |
+----------------------+----------+------------------------------------+-------------+------------------------------------------------------+---------------------+--------------------------------+
| | Note |GBP000's | GBP000's | | GBP000's | GBP000's | | GBP000's | GBP000's |
+----------------------+----------+----------+-------------------------+-------------+--------------------------------+---------------------+---------------------+---------------------+----------+
| Non-current assets | | | | | | | | | |
+----------------------+----------+----------+-------------------------+-------------+--------------------------------+---------------------+---------------------+---------------------+----------+
| Property, plant and | 7 | 5,339 | | | 5,115 | | | 5,116 | |
| equipment | | | | | | | | | |
+----------------------+----------+----------+-------------------------+-------------+--------------------------------+---------------------+---------------------+---------------------+----------+
| Deferred tax | | 2,552 | | | 3,889 | | | 2,343 | |
+----------------------+----------+----------+-------------------------+-------------+--------------------------------+---------------------+---------------------+---------------------+----------+
| | | | 7,891 | | | 9,004 | | | 7,459 |
+----------------------+----------+----------+-------------------------+-------------+--------------------------------+---------------------+---------------------+---------------------+----------+
| Current assets | | | | | | | | | |
+----------------------+----------+----------+-------------------------+-------------+--------------------------------+---------------------+---------------------+---------------------+----------+
| Inventory | | 26,354 | | | 25,691 | | | 27,705 | |
+----------------------+----------+----------+-------------------------+-------------+--------------------------------+---------------------+---------------------+---------------------+----------+
| Trade and other | | 10,920 | | | 16,353 | | | 10,917 | |
| receivables | | | | | | | | | |
+----------------------+----------+----------+-------------------------+-------------+--------------------------------+---------------------+---------------------+---------------------+----------+
| Derivative financial | | - | | | - | | | 452 | |
| instruments | | | | | | | | | |
+----------------------+----------+----------+-------------------------+-------------+--------------------------------+---------------------+---------------------+---------------------+----------+
| Cash and cash | | 5,955 | | | 632 | | | 650 | |
| equivalents | | | | | | | | | |
+----------------------+----------+----------+-------------------------+-------------+--------------------------------+---------------------+---------------------+---------------------+----------+
| | | | 43,229 | | | 42,676 | | | 39,724 |
+----------------------+----------+----------+-------------------------+-------------+--------------------------------+---------------------+---------------------+---------------------+----------+
| | | | | | | | | | |
+----------------------+----------+----------+-------------------------+-------------+--------------------------------+---------------------+---------------------+---------------------+----------+
| Current liabilities | | | | | | | | | |
+----------------------+----------+----------+-------------------------+-------------+--------------------------------+---------------------+---------------------+---------------------+----------+
| Trade and other | | (17,885) | | | (19,008) | | | (25,692) | |
| payables | | | | | | | | | |
+----------------------+----------+----------+-------------------------+-------------+--------------------------------+---------------------+---------------------+---------------------+----------+
| Derivative financial | | (306) | | | (1,193) | | | - | |
| instruments | | | | | | | | | |
+----------------------+----------+----------+-------------------------+-------------+--------------------------------+---------------------+---------------------+---------------------+----------+
| Short term | | - | | | (1,983) | | | (9,649) | |
| borrowings | | | | | | | | | |
+----------------------+----------+----------+-------------------------+-------------+--------------------------------+---------------------+---------------------+---------------------+----------+
| Current tax payable | | (825) | | | (614) | | | (885) | |
+----------------------+----------+----------+-------------------------+-------------+--------------------------------+---------------------+---------------------+---------------------+----------+
| | | | (19,016) | | | (22,798) | | | (36,226) |
+----------------------+----------+----------+-------------------------+-------------+--------------------------------+---------------------+---------------------+---------------------+----------+
| | | | | | | | | | |
+----------------------+----------+----------+-------------------------+-------------+--------------------------------+---------------------+---------------------+---------------------+----------+
| Net current assets | | | 24,213 | | | 19,878 | | | 3,498 |
+----------------------+----------+----------+-------------------------+-------------+--------------------------------+---------------------+---------------------+---------------------+----------+
| | | | | | | | | | |
+----------------------+----------+----------+-------------------------+-------------+--------------------------------+---------------------+---------------------+---------------------+----------+
| Non-current | | | | | | | | | |
| liabilities | | | | | | | | | |
+----------------------+----------+----------+-------------------------+-------------+--------------------------------+---------------------+---------------------+---------------------+----------+
| Long term provisions | 10 | (8,736) | | | (20,285) | | | (12,038) | |
+----------------------+----------+----------+----------------------+-----+--------------------------------+--------------------------------+----------+--------------------------------+----------+
| Accruals and | | (227) | | | (265) | | | (227) | |
| deferred income | | | | | | | | | |
+----------------------+----------+---------------------+--------+-----+------------------------+--------------------------------+----------+--------------------------------+---------------------+
| Long term borrowings | | (6,000) | | | - | | | - | |
+----------------------+----------+----------+-------------------------+-------------+--------------------------------+---------------------+---------------------+---------------------+----------+
| Pension liabilities | 9 | (3,447) | | | (2,238) | | | (3,404) | |
+----------------------+----------+----------+-------------------------+-------------+--------------------------------+---------------------+---------------------+---------------------+----------+
| Total non-current | | | (18,410) | | | (22,788) | | | (15,669) |
| liabilities | | | | | | | | | |
+----------------------+----------+----------+-------------------------+-------------+--------------------------------+---------------------+---------------------+---------------------+----------+
| | | | | | | | | | |
+----------------------+----------+----------+-------------------------+-------------+--------------------------------+---------------------+---------------------+---------------------+----------+
| Net | | | 13,694 | | | 6,094 | | | (4,712) |
| assets/(liabilities) | | | | | | | | | |
+----------------------+----------+----------+-------------------------+-------------+--------------------------------+---------------------+---------------------+---------------------+----------+
| | | | | | | | | | |
+----------------------+----------+----------+-------------------------+-------------+--------------------------------+---------------------+---------------------+---------------------+----------+
| Equity attributable | | | | | | | | | |
| to equity holders of | | | | | | | | | |
| the Company | | | | | | | | | |
+----------------------+----------+----------+-------------------------+-------------+--------------------------------+---------------------+---------------------+---------------------+----------+
| Share capital | 8 | | 18,389 | | | 5,689 | | | 5,689 |
+----------------------+----------+----------+-------------------------+-------------+--------------------------------+---------------------+---------------------+---------------------+----------+
| Share premium | 8 | | 19,905 | | 8 | 22,066 | | | 22,066 |
+----------------------+----------+----------+-------------------------+-------------+--------------------------------+---------------------+---------------------+---------------------+----------+
| Capital redemption | | | 20,215 | | | 20,215 | | | 20,215 |
| reserve | | | | | | | | | |
+----------------------+----------+---------------------+-----------+-----+--------------------------------+---------------------+----------+--------------------------------+---------------------+
| Cash flow hedge | | | (89) | | | (428) | | | 336 |
| reserve | | | | | | | | | |
+----------------------+----------+---------------------+-----------+-----+--------------------------------+---------------------+----------+--------------------------------+---------------------+
| Retained deficit | | | (44,726) | | | (41,448) | | | (53,018) |
+----------------------+----------+---------------------+-----------+-----+--------------------------------+---------------------+----------+--------------------------------+---------------------+
| | | | | | | | | | |
+----------------------+----------+---------------------+-----------+-----+--------------------------------+---------------------+----------+--------------------------------+---------------------+
| Total equity | | | 13,694 | | | 6,094 | | | (4,712) |
+----------------------+----------+---------------------+-----------+-----+--------------------------------+---------------------+----------+--------------------------------+---------------------+
| | | | | | | | | | | | | | | | | | | |
+----------------------+----------+----------+----------+--------+--+--+--+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
CONSOLIDATED CASH FLOW STATEMENT
+----------------------+---------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
| | | Unaudited | | | Unaudited | | | Audited |
+----------------------+---------+---------------------+----------+----------+---------------------+----------+----------+----------+
| | | 26 weeks to | | 26 weeks to | | 52 weeks to |
+----------------------+---------+---------------------+----------+--------------------------------+----------+---------------------+
| | Note | 31 July 2010 | | 1 August 2009 | | 30 January 2010 |
+----------------------+---------+---------------------+----------+--------------------------------+----------+---------------------+
| | | | | | | | | | |
+----------------------+---------+----------+----------+----------+----------+---------------------+----------+----------+----------+
| | | GBP000's | GBP000's | | GBP000's | GBP000's | | GBP000's | GBP000's |
+----------------------+---------+----------+----------+----------+----------+---------------------+----------+----------+----------+
| Cash flow from operating | | | | | | | | |
| activities | | | | | | | | |
+--------------------------------+----------+----------+----------+----------+---------------------+----------+----------+----------+
| Cash used in | 13 | (8,121) | | | (4,273) | | | (8,409) | |
| continuing | | | | | | | | | |
| operations | | | | | | | | | |
+----------------------+---------+----------+----------+----------+----------+---------------------+----------+----------+----------+
| Interest received (continuing | 29 | | | 95 | | | 96 | |
| operations) | | | | | | | | |
+--------------------------------+----------+----------+----------+----------+---------------------+----------+----------+----------+
| Interest paid | | (136) | | | (22) | | | (59) | |
| (continuing | | | | | | | | | |
| operations) | | | | | | | | | |
+----------------------+---------+----------+----------+----------+----------+---------------------+----------+----------+----------+
| Tax received (continuing | - | | | 1,741 | | | 2,310 | |
| operations) | | | | | | | | |
+--------------------------------+----------+----------+----------+----------+---------------------+----------+----------+----------+
| Tax paid (continuing | | (63) | | | - | | | (694) | |
| operations) | | | | | | | | | |
+----------------------+---------+----------+----------+----------+----------+---------------------+----------+----------+----------+
| Cash used in | 13 | (163) | | | (4,025) | | | (6,100) | |
| discontinued | | | | | | | | | |
| operations | | | | | | | | | |
+----------------------+---------+----------+----------+----------+----------+---------------------+----------+----------+----------+
| | | | | | | | | | |
+----------------------+---------+----------+----------+----------+----------+---------------------+----------+----------+----------+
| | (8,454) | | | (6,484) | | | (12,856) |
+-------------------------------------------+----------+----------+---------------------+----------+----------+----------+----------+
| | | | | | | | | |
+--------------------------------+----------+----------+----------+----------+---------------------+----------+----------+----------+
| Investing activities | | | | | | | | |
+--------------------------------+----------+----------+----------+----------+---------------------+----------+----------+----------+
| Disposal of subsidiary | - | | | 623 | | | 423 | |
| undertaking | | | | | | | | |
+--------------------------------+----------+----------+----------+----------+---------------------+----------+----------+----------+
| Purchase of property, plant | (751) | | | (708) | | | (1,808) | |
| and equipment (continuing | | | | | | | | |
| operations) | | | | | | | | |
+--------------------------------+----------+----------+----------+----------+---------------------+----------+----------+----------+
| Purchase of property, plant | - | | | (99) | | | (99) | |
| and equipment (discontinued | | | | | | | | |
| operations) | | | | | | | | |
+--------------------------------+----------+----------+----------+----------+---------------------+----------+----------+----------+
| Proceeds of disposals of | - | | | 33 | | | 57 | |
| property, plant and equipment | | | | | | | | |
| (continuing operations) | | | | | | | | |
+--------------------------------+----------+----------+----------+----------+---------------------+----------+----------+----------+
| Net cash used in | | | (751) | | | (151) | | | (1,427) |
| investing activities | | | | | | | | | |
+----------------------+---------+----------+----------+----------+----------+---------------------+----------+----------+----------+
| | | | | | | | | | |
+----------------------+---------+----------+----------+----------+----------+---------------------+----------+----------+----------+
| Financing activities | | | | | | | | | |
+----------------------+---------+----------+----------+----------+----------+---------------------+----------+----------+----------+
| Long term borrowings | | 6,000 | | | - | | | - | |
+----------------------+---------+----------+----------+----------+----------+---------------------+----------+----------+----------+
| Issue of ordinary | | 20,320 | | | - | | | - | |
| shares | | | | | | | | | |
+----------------------+---------+----------+----------+----------+----------+---------------------+----------+----------+----------+
| Costs arising from | | (2,161) | | | - | | | - | |
| the issue of shares | | | | | | | | | |
+----------------------+---------+----------+----------+----------+----------+---------------------+----------+----------+----------+
| | | | | | | | | | |
+----------------------+---------+----------+----------+----------+----------+---------------------+----------+----------+----------+
| Net cash generated | | | 24,159 | | | - | | | - |
| by financing | | | | | | | | | |
| activities | | | | | | | | | |
+----------------------+---------+----------+----------+----------+----------+---------------------+----------+----------+----------+
| | | | | | | | | | |
+----------------------+---------+----------+----------+----------+----------+---------------------+----------+----------+----------+
| Net | | | 14,954 | | | (6,635) | | | (14,283) |
| increase/(decrease) | | | | | | | | | |
| in cash and cash | | | | | | | | | |
| equivalents | | | | | | | | | |
+----------------------+---------+----------+----------+----------+----------+---------------------+----------+----------+----------+
| | | | | | | | | | |
+----------------------+---------+----------+----------+----------+----------+---------------------+----------+----------+----------+
| Cash and cash | | | (8,999) | | | 5,284 | | | 5,284 |
| equivalents at the | | | | | | | | | |
| beginning of the | | | | | | | | | |
| period | | | | | | | | | |
+----------------------+---------+----------+----------+----------+----------+---------------------+----------+----------+----------+
| | | | | | | | | | |
+----------------------+---------+----------+----------+----------+----------+---------------------+----------+----------+----------+
| Cash and cash | | | 5,955 | | | (1,351) | | | (8,999) |
| equivalents at the | | | | | | | | | |
| end of the period | | | | | | | | | |
+----------------------+---------+----------+----------+----------+----------+---------------------+----------+----------+----------+
| | | | | | | | | | |
+----------------------+---------+----------+----------+----------+----------+---------------------+----------+----------+----------+
| Included in cash and | | | 5,955 | | | 632 | | | 650 |
| cash equivalents on | | | | | | | | | |
| the balance sheet | | | | | | | | | |
+----------------------+---------+----------+----------+----------+----------+---------------------+----------+----------+----------+
| Included in short | | | - | | | (1,983) | | | (9,649) |
| term borrowings on | | | | | | | | | |
| the balance sheet | | | | | | | | | |
+----------------------+---------+----------+----------+----------+----------+---------------------+----------+----------+----------+
| | | | 5,955 | | | (1,351) | | | (8,999) |
+----------------------+---------+----------+----------+----------+----------+---------------------+----------+----------+----------+
| | | | | | | | | | | |
+----------------------+---------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
+--------------------------+---------+----------+--------------+----------+------------+----------+----------+----------+---------+----------+-------------+----------+-----------+
| | Share | | Share | | Capital | | Cash | | Merger | | Retained | | Total |
| | capital | | premium | | redemption | | flow | | reserve | | earnings | | |
| | | | | | reserve | | hedge | | | | | | |
| | | | | | | | reserve | | | | | | |
+--------------------------+---------+----------+--------------+----------+------------+----------+----------+----------+---------+----------+-------------+----------+-----------+
| | GBP000 | | GBP000 | | GBP000 | | GBP000 | | GBP000 | | GBP000 | | GBP000 |
+--------------------------+---------+----------+--------------+----------+------------+----------+----------+----------+---------+----------+-------------+----------+-----------+
| | | | | | | | | | | | | | |
+--------------------------+---------+----------+--------------+----------+------------+----------+----------+----------+---------+----------+-------------+----------+-----------+
| At 31 January 2009 as | 5,689 | | 22,066 | | 20,215 | | 5,515 | | - | | (48,877) | | 4,608 |
| previously stated | | | | | | | | | | | | | |
+--------------------------+---------+----------+--------------+----------+------------+----------+----------+----------+---------+----------+-------------+----------+-----------+
| Reclassification | - | | - | | - | | (1,544) | | - | | 1,544 | | - |
+--------------------------+---------+----------+--------------+----------+------------+----------+----------+----------+---------+----------+-------------+----------+-----------+
| At 31 January 2009 as | 5,689 | | 22,066 | | 20,215 | | 3,971 | | - | | (47,333) | | 4,608 |
| restated | | | | | | | | | | | | | |
+--------------------------+---------+----------+--------------+----------+------------+----------+----------+----------+---------+----------+-------------+----------+-----------+
| | | | | | | | | | | | | | |
+--------------------------+---------+----------+--------------+----------+------------+----------+----------+----------+---------+----------+-------------+----------+-----------+
| Profit for the period | - | | - | | - | | - | | - | | 4,533 | | 4,533 |
+--------------------------+---------+----------+--------------+----------+------------+----------+----------+----------+---------+----------+-------------+----------+-----------+
| | | | | | | | | | | | | | |
+--------------------------+---------+----------+--------------+----------+------------+----------+----------+----------+---------+----------+-------------+----------+-----------+
| Other comprehensive | | | | | | | | | | | | | |
| income: | | | | | | | | | | | | | |
+--------------------------+---------+----------+--------------+----------+------------+----------+----------+----------+---------+----------+-------------+----------+-----------+
| Actuarial gain arising | - | | - | | - | | - | | - | | 1,352 | | 1,352 |
| in defined benefit | | | | | | | | | | | | | |
| pension scheme, net of | | | | | | | | | | | | | |
| tax | | | | | | | | | | | | | |
+--------------------------+---------+----------+--------------+----------+------------+----------+----------+----------+---------+----------+-------------+----------+-----------+
| Loss on cash flow | - | | - | | - | | (4,399) | | - | | - | | (4,399) |
| hedges, net of tax | | | | | | | | | | | | | |
+--------------------------+---------+----------+--------------+----------+------------+----------+----------+----------+---------+----------+-------------+----------+-----------+
| | | | | | | | | | | | | | |
+--------------------------+---------+----------+--------------+----------+------------+----------+----------+----------+---------+----------+-------------+----------+-----------+
| At 1 August 2009 | 5,689 | | 22,066 | | 20,215 | | (428) | | - | | (41,448) | | 6,094 |
+--------------------------+---------+----------+--------------+----------+------------+----------+----------+----------+---------+----------+-------------+----------+-----------+
| | | | | | | | | | | | | | |
+--------------------------+---------+----------+--------------+----------+------------+----------+----------+----------+---------+----------+-------------+----------+-----------+
| At 31 January 2010 | 5,689 | | 22,066 | | 20,215 | | 336 | | - | | (53,018) | | (4,712) |
+--------------------------+---------+----------+--------------+----------+------------+----------+----------+----------+---------+----------+-------------+----------+-----------+
| | | | | | | | | | | | | | |
+--------------------------+---------+----------+--------------+----------+------------+----------+----------+----------+---------+----------+-------------+----------+-----------+
| Profit for the period | - | | - | | - | | - | | - | | 784 | | 784 |
+--------------------------+---------+----------+--------------+----------+------------+----------+----------+----------+---------+----------+-------------+----------+-----------+
| | | | | | | | | | | | | | |
+--------------------------+---------+----------+--------------+----------+------------+----------+----------+----------+---------+----------+-------------+----------+-----------+
| Issue of ordinary | 12,700 | | (2,161) | | - | | - | | 7,620 | | - | | 18,159 |
| shares, net | | | | | | | | | | | | | |
| of transaction costs | | | | | | | | | | | | | |
+--------------------------+---------+----------+--------------+----------+------------+----------+----------+----------+---------+----------+-------------+----------+-----------+
| Transfer of merger | - | | - | | - | | - | | (7,620) | | 7,620 | | - |
| reserve to profit and | | | | | | | | | | | | | |
| loss account | | | | | | | | | | | | | |
+--------------------------+---------+----------+--------------+----------+------------+----------+----------+----------+---------+----------+-------------+----------+-----------+
| Other comprehensive | | | | | | | | | | | | | |
| income: | | | | | | | | | | | | | |
+--------------------------+---------+----------+--------------+----------+------------+----------+----------+----------+---------+----------+-------------+----------+-----------+
| Actuarial loss arising | - | | - | | - | | - | | - | | (112) | | (112) |
| in defined benefit | | | | | | | | | | | | | |
| pension scheme, net of | | | | | | | | | | | | | |
| tax | | | | | | | | | | | | | |
+--------------------------+---------+----------+--------------+----------+------------+----------+----------+----------+---------+----------+-------------+----------+-----------+
| Loss on cash flow | - | | - | | - | | (425) | | - | | - | | (425) |
| hedges, net of tax | | | | | | | | | | | | | |
+--------------------------+---------+----------+--------------+----------+------------+----------+----------+----------+---------+----------+-------------+----------+-----------+
| | | | | | | | | | | | | | |
+--------------------------+---------+----------+--------------+----------+------------+----------+----------+----------+---------+----------+-------------+----------+-----------+
| At 31 July 2010 | 18,389 | | 19,905 | | 20,215 | | (89) | | - | | (44,726) | | 13,694 |
+--------------------------+---------+----------+--------------+----------+------------+----------+----------+----------+---------+----------+-------------+----------+-----------+
1 General information
The Company is a limited liability company incorporated and domiciled in the UK.
The address of its registered office is 40-48 Guildford Street, Luton, LU1 2PB.
The Company has its primary listing on the London Stock Exchange.
This condensed consolidated financial information for the 26 weeks to 31 July
2010 was approved for issue on 22 September 2010.
This condensed consolidated interim financial information does not comprise
statutory accounts within the meaning of sections 434 and 435 of the Companies
Act 2006. Statutory accounts for the 52 weeks ended 30 January 2010 were
approved by the Board of Directors on 11 May 2010 and delivered to the Registrar
of Companies. The report of the auditors on those accounts was unqualified and
did not contain any statement under sections 498(2) or 498(3) of the Companies
Act 2006.
2 Basis of preparation
This condensed consolidated financial information for the 26 weeks ended 31 July
2010 has been prepared in accordance with the Disclosure and Transparency Rules
of the Financial Services Authority and with IAS 34, 'Interim financial
reporting' as adopted by the European Union. The condensed consolidated
financial report should be read in conjunction with the annual financial
statements for the 52 weeks ended 30 January 2010, which have been prepared in
accordance with IFRSs as adopted by the European Union. These condensed
consolidated financial statements are unaudited.
3 Accounting policies
In addition to the accounting policies described in the annual financial
statements for the 52 weeks ended 30 January 2010, the Group has applied the
following amendments to standards and interpretations to existing standards for
the first time in producing these condensed consolidated financial statements:
· IFRS 3 (revised), 'Business combinations';
· IAS 39 (Amendment), 'Financial instruments: Recognition and measurement';
and
· IFRIC 9 (Amendment), 'Reassessment of embedded derivatives'.
A full list of revised or amended standards and interpretations effective but
not relevant to these condensed consolidated financial statements are contained
within the annual financial statements for the 52 weeks ended 30 January 2010.
Taxes on income in the interim periods are accrued using the tax rate that would
be applicable to expected total annual earnings.
4 Exceptional Items
Continuing operations
The following exceptional costs were incurred by the Group in 2009 in relation
to continuing operations.
+---------------------------------------------+---------+------------+
| | | 26 weeks |
| | | to |
| | | 1 August |
| | | 2009 |
+---------------------------------------------+---------+------------+
| | | GBP000's |
+---------------------------------------------+---------+------------+
| Provision for onerous lease commitments | | 8,257 |
| (see note 10) | | |
+---------------------------------------------+---------+------------+
| Costs arising from the administration of | | 773 |
| Epcoscan Limited | | |
+---------------------------------------------+---------+------------+
| | | 9,030 |
+---------------------------------------------+---------+------------+
Onerous lease provisions are made in respect of those leases which are
considered onerous on the basis that the stores to which they relate are
expected to generate net cash outflows over the remaining lease term. The
provision represents the lowest net unavoidable cost of a lease contract. It is
calculated as either:
· the negotiated exit cost in circumstances where agreement to exit
the lease has been agreed with the landlord, or
· the lower of the forecast trading loss of the lease, or lease
rental cost for the remainder of the lease term.
Discontinued operations
On 27 April 2009 the Group placed Epcoscan Limited, which operated the Bay
Trading business, into administration. The profit included in discontinued
operations is analysed below:
+---------------------------------------------------+----------+----------+
| | 26 | 26 |
| | weeks | weeks |
| | to 31 | to |
| | July | 1 |
| | 2010 | August |
| | | 2009 |
+---------------------------------------------------+----------+----------+
| | GBP000's | GBP000's |
+---------------------------------------------------+----------+----------+
| Operating loss | | |
+---------------------------------------------------+----------+----------+
| Revenue | - | 12,339 |
+---------------------------------------------------+----------+----------+
| Expenses | (163) | (17,223) |
+---------------------------------------------------+----------+----------+
| Operating loss | (163) | (4,884) |
+---------------------------------------------------+----------+----------+
| Net finance income | - | 2 |
+---------------------------------------------------+----------+----------+
| Loss before taxation | (163) | (4,882) |
+---------------------------------------------------+----------+----------+
| Tax on operating loss | - | - |
+---------------------------------------------------+----------+----------+
| Loss after taxation | (163) | (4,882) |
+---------------------------------------------------+----------+----------+
| | | |
+---------------------------------------------------+----------+----------+
| Net liabilities of subsidiary company disposed | - | 13,990 |
+---------------------------------------------------+----------+----------+
| Proceeds of disposal | - | 1,300 |
+---------------------------------------------------+----------+----------+
| Profit on disposal | - | 15,290 |
+---------------------------------------------------+----------+----------+
| | | |
+---------------------------------------------------+----------+----------+
| Total (loss)/profit from discontinued operations | (163) | 10,408 |
+---------------------------------------------------+----------+----------+
5 Segmental information
The Group considers that its operations comprise a single business segment as it
meets the aggregation criteria included within IFRS8 on the basis that the
individual clothing brands have similar economic characteristics and are similar
in respect of their products, production processes, type of customer and method
of distribution.
6 Earnings per share
Continuing operations
The calculation of basic earnings per ordinary share is based on profits from
continuing operations of GBP947,000 (2009: losses of GBP5,875,000) and on
117,817,059 ordinary shares (2009: 44,686,680) being the weighted average number
of ordinary shares in issue.
In calculating diluted earnings per share the weighted average number of
ordinary shares in issue is adjusted to assume the exercise of warrants to
subscribe for ordinary shares which were granted as part of the Capital Raising
in March 2010.
+----------+-------------+----------+-------------+--------+----------+-------------+------------+---------+
| | | 26 weeks to 31 July | | 26 weeks to 1 August |
| | | 2010 | | 2009 |
+----------+-------------+---------------------------------+----------+------------------------------------+
| | |Earnings | Weighted | Per | | Losses | Weighted | Per |
| | | (GBP) | average | share | | (GBP) | average | share |
+----------+-------------+----------+-------------+--------+----------+-------------+------------+---------+
| | | | number | pence | | | number | pence |
| | | | of | | | | of | |
| | | | shares | | | | shares | |
+----------+-------------+----------+-------------+--------+----------+-------------+------------+---------+
| Basic | 947,000 | 117,817,059 | 0.80 | |(5,875,000) | 44,686,680 | (13.15) |
| earnings/(losses) | | | | | | | |
+------------------------+----------+-------------+--------+----------+-------------+------------+---------+
| Effect of dilutive | - | 1,477,654 | (0.01) | | - | - | - |
| securities: warrants | | | | | | | |
+------------------------+----------+-------------+--------+----------+-------------+------------+---------+
| Diluted | 947,000 | 119,294,713 | 0.79 | |(5,875,000) | 44,686,680 | (13.15) |
| earnings/(losses) | | | | | | | |
+----------+-------------+----------+-------------+--------+----------+-------------+------------+---------+
Discontinued operations
The calculation of basic earnings per ordinary share is based on losses from
discontinued operations of GBP163,000 (2009: profits of GBP10,408,000) and on
117,817,059 ordinary shares (2009: 44,686,680) being the weighted average number
of ordinary shares in issue.
+----------+-------------+-----------+-------------+--------+----------+------------+------------+-------+
| | | 26 weeks to 31 July | | 26 weeks to 1 August |
| | | 2010 | | 2009 |
+----------+-------------+----------------------------------+----------+---------------------------------+
| | | Losses | Weighted | Per | | Earnings | Weighted | Per |
| | | (GBP) | average | share | | (GBP) | average | share |
+----------+-------------+-----------+-------------+--------+----------+------------+------------+-------+
| | | | number | pence | | | number | pence |
| | | | of | | | | of | |
| | | | shares | | | | shares | |
+----------+-------------+-----------+-------------+--------+----------+------------+------------+-------+
| Basic |(163,000) | 117,817,059 | (0.13) | |10,408,000 | 44,686,680 | 23.29 |
| (losses)/earnings | | | | | | | |
+----------+-------------+-----------+-------------+--------+----------+------------+------------+-------+
Total operations
The calculation of basic earnings per ordinary share is based on profits from
total operations of GBP784,000 (2009: GBP4,533,000) and on 117,817,059 (2009:
44,686,680) ordinary shares being the weighted average number of ordinary shares
in issue.
In calculating diluted earnings per share the weighted average number of
ordinary shares in issue is adjusted to assume the exercise of warrants to
subscribe for ordinary shares which were granted as part of the Capital Raising
in March 2010.
+---------------+----------+-------------+--------+----------+-----------+------------+-------+
| | 26 weeks to 31 July | | 26 weeks to 1 August |
| | 2010 | | 2009 |
+---------------+---------------------------------+----------+--------------------------------+
| | | Weighted | Per | | | Weighted | Per |
| | | average | share | | | average | share |
+---------------+----------+-------------+--------+----------+-----------+------------+-------+
| | Earnings | number | pence | | Earnings | number | pence |
| | (GBP) | of | | | (GBP) | of | |
| | | shares | | | | shares | |
+---------------+----------+-------------+--------+----------+-----------+------------+-------+
| Basic | 784,000 | 117,817,059 | 0.67 | | 4,533,000 | 44,686,680 | 10.14 |
| earnings | | | | | | | |
+---------------+----------+-------------+--------+----------+-----------+------------+-------+
| Effect of | - | 1,477,654 | (0.01) | | - | - | - |
| dilutive | | | | | | | |
| securities: | | | | | | | |
| warrants | | | | | | | |
+---------------+----------+-------------+--------+----------+-----------+------------+-------+
| Diluted | 784,000 | 119,294,713 | 0.66 | | 4,533,000 | 44,686,680 | 10.14 |
| earnings | | | | | | | |
+---------------+----------+-------------+--------+----------+-----------+------------+-------+
7 Property, plant and equipment
+-----------------------------------------------------+-----------+
| | Property, |
| | plant and |
| | equipment |
+-----------------------------------------------------+-----------+
| | GBP000's |
+-----------------------------------------------------+-----------+
| 26 weeks ended 31 July 2010 | |
+-----------------------------------------------------+-----------+
| | |
+-----------------------------------------------------+-----------+
| Opening net book amount 30 January 2010 | 5,116 |
+-----------------------------------------------------+-----------+
| | |
+-----------------------------------------------------+-----------+
| Additions | 751 |
+-----------------------------------------------------+-----------+
| Disposals | (31) |
+-----------------------------------------------------+-----------+
| Depreciation, amortisation, impairment and other | (497) |
| movements | |
+-----------------------------------------------------+-----------+
| | |
+-----------------------------------------------------+-----------+
| Closing net book amount 31 July 2010 | 5,339 |
+-----------------------------------------------------+-----------+
| | |
+-----------------------------------------------------+-----------+
| 26 weeks ended 1 August 2009 | |
+-----------------------------------------------------+-----------+
| Opening net book amount 31 January 2009 | 6,298 |
+-----------------------------------------------------+-----------+
| | |
+-----------------------------------------------------+-----------+
| Additions | 807 |
+-----------------------------------------------------+-----------+
| Disposals | (64) |
+-----------------------------------------------------+-----------+
| Disposal of subsidiary undertaking | (1,161) |
+-----------------------------------------------------+-----------+
| Depreciation, amortisation, impairment and other | (765) |
| movements | |
+-----------------------------------------------------+-----------+
| | |
+-----------------------------------------------------+-----------+
| Closing net book amount 1 August 2009 | 5,115 |
+-----------------------------------------------------+-----------+
8 Share capital
+----------------------------------+----------+-------------------+-------------+----------+----------+----------+----------+
| | | Ordinary | | Share | | Merger |
| | | 12.5p | | premium | | reserve |
| | | shares | | | | |
+----------------------------------+----------+---------------------------------+----------+----------+----------+----------+
| | | No | GBP000's | | GBP000's | | GBP000's |
| | | of | | | | | |
| | | shares | | | | | |
+----------------------------------+----------+-------------------+-------------+----------+----------+----------+----------+
| | | | | | | | |
+----------------------------------+----------+-------------------+-------------+----------+----------+----------+----------+
| Balance at 31 January 2009 and | | 45,511,768 | 5,689 | | 22,066 | | - |
| 1 August 2009 | | | | | | | |
+----------------------------------+----------+-------------------+-------------+----------+----------+----------+----------+
| | | | | | | | |
+----------------------------------+----------+-------------------+-------------+----------+----------+----------+----------+
| Opening balance at 30 January | | 45,511,768 | 5,689 | | 22,066 | | - |
| 2010 | | | | | | | |
+----------------------------------+----------+-------------------+-------------+----------+----------+----------+----------+
| | | | | | | | |
+----------------------------------+----------+-------------------+-------------+----------+----------+----------+----------+
| Issued in financing | | 101,600,985 | 12,700 | | (2,161) | | 7,620 |
+----------------------------------+----------+-------------------+-------------+----------+----------+----------+----------+
| Transfer of merger reserve to | | - | - | | - | | (7,620) |
| profit and loss account | | | | | | | |
+----------------------------------+----------+-------------------+-------------+----------+----------+----------+----------+
| Balance at 31 July 2010 | | 147,112,753 | 18,389 | | 19,905 | | - |
+----------------------------------+----------+-------------------+-------------+----------+----------+----------+----------+
The Company issued an additional 101,600,985 ordinary shares of 12.5p each on 24
March 2010 following a firm placing and open offer of new ordinary shares. The
issue utilised a cash box structure and therefore qualified for merger relief
under Section 612 of the Companies Act 2006. The premium of GBP7,620,000 arising
on the share issue was initially credited to a merger reserve and subsequently
transferred to the profit and loss reserve. Costs of GBP2,161,000 associated
with the firm placing and open offer have been charged to the Company's share
premium account.
9 Retirement benefit plans
The amounts recognised in the income statement were as follows:
+---------------------------------------------+----------+----------+----------+
| | 26 weeks | | 26 |
| | to | | weeks |
| | 31 July | | to |
| | 2010 | | 1 |
| | | | August |
| | | | 2009 |
+---------------------------------------------+----------+----------+----------+
| | GBP000's | | GBP000's |
+---------------------------------------------+----------+----------+----------+
| | | | |
+---------------------------------------------+----------+----------+----------+
| Current service cost | - | | (120) |
+---------------------------------------------+----------+----------+----------+
| Interest cost | (892) | | (1,016) |
+---------------------------------------------+----------+----------+----------+
| Expected return on plan assets | 855 | | 774 |
+---------------------------------------------+----------+----------+----------+
| | (37) | | (362) |
+---------------------------------------------+----------+----------+----------+
| | | | |
+---------------------------------------------+----------+----------+----------+
| The amounts recognised in the balance sheet | | | |
| were as follows: | | | |
+---------------------------------------------+----------+----------+----------+
| | As at | | As at |
| | 31 July | | 1 |
| | 2010 | | August |
| | | | 2009 |
+---------------------------------------------+----------+----------+----------+
| | GBP000's | | GBP000's |
+---------------------------------------------+----------+----------+----------+
| | | | |
+---------------------------------------------+----------+----------+----------+
| Present value of scheme liabilities | (32,090) | | (30,673) |
+---------------------------------------------+----------+----------+----------+
| Fair value of scheme assets | 28,643 | | 28,435 |
+---------------------------------------------+----------+----------+----------+
| | | | |
+---------------------------------------------+----------+----------+----------+
| Liability in the balance sheet | (3,447) | | (2,238) |
+---------------------------------------------+----------+----------+----------+
10 Provision for liabilities and charges
+----------------------------+--------+----------+----+----+--+----------+------------+
| | | | | | | | Property |
| | | | | | | | provisions |
+----------------------------+--------+----------+----+----+--+----------+------------+
| 26 weeks ended 31 July | | | | | | | GBP000's |
| 2010 | | | | | | | |
+----------------------------+--------+----------+----+----+--+----------+------------+
| Opening net book amount at | | | | | | | 12,038 |
| 30 January 2010 | | | | | | | |
+----------------------------+--------+----------+----+----+--+----------+------------+
| Utilised during the period | | | | | | | (3,302) |
+----------------------------+--------+----------+----+----+--+----------+------------+
| Closing net book amount at | | | | | | | 8,736 |
| 31 July 2010 | | | | | | | |
+----------------------------+--------+----------+----+----+--+----------+------------+
+----------------------------+--------+----------+----+----+--+----------+------------+
| | | | | | | | |
+----------------------------+--------+----------+----+----+--+----------+------------+
| 26 weeks ended 1 August | | | | | | | GBP000's |
| 2009 | | | | | | | |
+----------------------------+--------+----------+----+----+--+----------+------------+
| Opening net book amount at | | | | | | | 25,712 |
| 31 January 2009 | | | | | | | |
+----------------------------+--------+----------+----+----+--+----------+------------+
| Charged to the income | | | | | | | 8,257 |
| statement | | | | | | | |
+----------------------------+--------+----------+----+----+--+----------+------------+
| Disposal of subsidiary | | | | | | | (12,792) |
| undertaking | | | | | | | |
+----------------------------+--------+----------+----+----+--+----------+------------+
| Utilised during the period | | | | | | | (892) |
+----------------------------+--------+----------+----+----+--+----------+------------+
| Closing net book amount at | | | | | | | 20,285 |
| 1 August 2009 | | | | | | | |
+----------------------------+--------+----------+----+----+--+----------+------------+
11 Income taxes
Income tax expense is recognised based on management's best estimate of the
weighted average annual income tax rate expected for the full financial year.
The Group expects to make a profit in the 52 weeks to 29 January 2011, however,
any tax due will be offset against trading losses brought forward from previous
years. The full year tax charge is therefore expected to be nil.
12 Dividends
No dividends were paid in the period (2009: nil) in respect of the 52 weeks
ending 30 January 2010.
The board has decided not to declare an interim dividend in respect of the 52
weeks ending 29 January 2011.
13 Reconciliation of operating profit to net cash inflow from operating
activities
+--------------------------+--+----------+----------+----------+----------+--+-----------+
| | | | 26 | | 26 weeks | | 52 weeks |
| | | | weeks | | to | | to |
| | | | to | | | | |
+--------------------------+--+----------+----------+----------+----------+--+-----------+
| | | | 31 July | | 1 August | | 30 |
| | | | 2010 | | 2009 | | January |
| | | | | | | | 2010 |
+--------------------------+--+----------+----------+----------+----------+--+-----------+
| | | | GBP000's | | GBP000's | | GBP000's |
+--------------------------+--+----------+----------+----------+----------+--+-----------+
| Cash generated from continuing | | | | | |
| operations: | | | | | |
+----------------------------------------+----------+----------+----------+--+-----------+
| Operating profit/(loss) - | | 1,201 | | (7,923) | | (13,723) |
| continuing operations | | | | | | |
+-----------------------------+----------+----------+----------+----------+--+-----------+
| Adjustments for: | | | | | | | |
+--------------------------+--+----------+----------+----------+----------+--+-----------+
| Depreciation | | | 497 | | 552 | | 1,127 |
+--------------------------+--+----------+----------+----------+----------+--+-----------+
| Impairment of property, | | | - | | - | | 460 |
| plant and equipment | | | | | | | |
+--------------------------+--+----------+----------+----------+----------+--+-----------+
| Loss on disposal of property, plant | 31 | | 31 | | 66 |
| and equipment | | | | | |
+----------------------------------------+----------+----------+----------+--+-----------+
| Net adjustment in respect | | (150) | | (263) | | (999) |
| of retirement benefit | | | | | | |
| obligations | | | | | | |
+-----------------------------+----------+----------+----------+----------+--+-----------+
| Changes in working | | | | | | | |
| capital: | | | | | | | |
+--------------------------+--+----------+----------+----------+----------+--+-----------+
| (Increase)/decrease in | | (3) | | (3,158) | | 2,478 |
| trade and other receivables | | | | | | |
+-----------------------------+----------+----------+----------+----------+--+-----------+
| Decrease/(increase) in | | | 1,351 | | 1,226 | | (788) |
| inventories | | | | | | | |
+--------------------------+--+----------+----------+----------+----------+--+-----------+
| (Decrease)/increase in | | (7,746) | | (2,070) | | 3,923 |
| trade and other payables | | | | | | |
+-----------------------------+----------+----------+----------+----------+--+-----------+
| (Decrease)/increase in long term | (3,302) | | 7,332 | | (953) |
| provisions, accruals and deferred | | | | | |
| income | | | | | |
+----------------------------------------+----------+----------+----------+--+-----------+
| Cash used in continuing | | (8,121) | | (4,273) | | (8,409) |
| operations | | | | | | |
+--------------------------+--+----------+----------+----------+----------+--+-----------+
13 Reconciliation of operating profit to net cash inflow from operating
activities (continued)
+---------------------------------+----------+----------+----------+-+-----------+
| | 26 | | 26 weeks | | 52 weeks |
| | weeks | | to | | to |
| | to | | | | |
+---------------------------------+----------+----------+----------+-+-----------+
| | 31 | | 1 August | | 30 |
| | July | | 2009 | | January |
| | 2010 | | | | 2010 |
+---------------------------------+----------+----------+----------+-+-----------+
| | GBP000's | | GBP000's | | GBP000's |
+---------------------------------+----------+----------+----------+-+-----------+
| Cash used in discontinued | | | | | |
| operations: | | | | | |
+---------------------------------+----------+----------+----------+-+-----------+
| Operating loss - discontinued | (163) | | (4,884) | | (5,863) |
| operations | | | | | |
+---------------------------------+----------+----------+----------+-+-----------+
| Adjustments for: | | | | | |
+---------------------------------+----------+----------+----------+-+-----------+
| Depreciation | - | | 213 | | 212 |
+---------------------------------+----------+----------+----------+-+-----------+
| Changes in working capital: | | | | | |
+---------------------------------+----------+----------+----------+-+-----------+
| Decrease in trade and other | - | | 1,578 | | 1,546 |
| receivables | | | | | |
+---------------------------------+----------+----------+----------+-+-----------+
| Increase in inventories | - | | (2,107) | | (1,490) |
+---------------------------------+----------+----------+----------+-+-----------+
| Increase/(decrease) in trade | - | | 1,173 | | (507) |
| and other payables | | | | | |
+---------------------------------+----------+----------+----------+-+-----------+
| Cash used in discontinued | (163) | | (4,027) | | (6,102) |
| operations | | | | | |
+---------------------------------+----------+----------+----------+-+-----------+
| | | | | | |
+---------------------------------+----------+----------+----------+-+-----------+
| Interest received | - | | 3 | | 3 |
+---------------------------------+----------+----------+----------+-+-----------+
| Interest paid | - | | (1) | | (1) |
+---------------------------------+----------+----------+----------+-+-----------+
| | | | | | |
+---------------------------------+----------+----------+----------+-+-----------+
| Cash flows from operating | (163) | | (4,025) | | (6,100) |
| activities - discontinued | | | | | |
| operations | | | | | |
+---------------------------------+----------+----------+----------+-+-----------+
14 Related party transactions
There are no related party transactions for the 26 weeks to 31 July 2010.
15 Principal risks and uncertainties
The Group is exposed to the risks of the prevailing economic climate and
uncertain outlook which has led to reduced consumer demand and reduced income.
The UK high street is a highly competitive environment and the Group also faces
competition from the increasing popularity of purchasing via the internet.
The success of the Group is dependent on its ability to provide quality designs
and fashions and to anticipate and respond to changing consumer taste and
fashion trends. Product design and selection is therefore key to retaining
market share and generating revenue, particularly in periods in which consumer
confidence is negatively affected. The Group depends on the reputation of the
Alexon brand names which are important assets of its business. Any events that
negatively affect the reputation of its brand names could have a material
adverse effect on the business.
The retail business is subject to seasonal peaks. If sales during its peak
seasons, particularly the Christmas season, are significantly lower than
forecast, it may be left with substantial unsold stock which can only be sold at
reduced prices. Unseasonal weather conditions can also significantly affect
sales and increase the volume of stock which must be sold at reduced prices.
The Group generates a significant proportion of its turnover from concessions
within third party department stores and the loss of a significant host store
relationship could have an adverse effect on the Group's business. The Group
attempts to minimise the risk by maintaining regular dialogue with the host
stores in relation to sales performance and planned range developments.
The Group has a number of short leasehold premises which are subject to regular
rent reviews. Significant increases in rents could affect the economic viability
of individual units.
The Group has an occupational defined benefit pension scheme which is exposed to
various risks which could affect its funding obligations in the longer term. The
scheme's assets are subject to the risks inherent with movements in market
values of equity and bond investments. The risk attaching to the scheme's
liabilities has been reduced by the decision to close the scheme to future
benefit accrual from 31 July 2009 and the consequent loss of the link to future
salary increases.
A substantial proportion of the Group's imports are paid for in US dollars. The
business is therefore subject to risks arising from fluctuations in currency
exchange rates which its foreign exchange hedging strategies may not protect.
Factors outside the Group's control which may materially adversely affect the
business include changes to law, governmental regulations or taxes in the
countries in which it operates; damage or interruptions due to operational
disruption; increases in energy costs; natural disasters and terrorist activity.
Statement of directors' responsibilities
The directors confirm that this condensed consolidated interim financial
information has been prepared in accordance with IAS 34 as adopted by the
European Union and that the interim management report includes a fair review of
the information required by DTR 4.2.7 and DTR 4.2.8, namely:
i. an indication of important events that have occurred during the first 26
weeks and their impact on the condensed set of financial statements, and a
description of the principal risks and uncertainties for the remaining 26 weeks
of the financial period; and
ii. material related-party transactions in the first 26 weeks and any material
changes in the related-party transactions described in the last annual report.
During the period two additions have been made to the directors listed in the
2010 Annual Report:
· Avril Palmer-Baunack was appointed as a non-executive director on 1 July
2010, and
· David Adams was appointed as a non-executive director on 1 September
2010.
By order of the Board
J. McNally
J. Boyle
Chief Executive
Group Finance Director and Company
Secretary
This information is provided by RNS
The company news service from the London Stock Exchange
END
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