TIDMIGR
RNS Number : 3059P
International Greetings PLC
14 July 2010
14th July 2010
International Greetings PLC ('International Greetings' or 'the Group')
Preliminary Results for the year ended 31 March 2010
International Greetings PLC, one of the world's leading designers, innovators
and manufacturers of gift wrap, crackers, cards, stationery and accessories,
announces its Preliminary Results for the year ended 31 March 2010.
Financial Highlights
· Revenue from continuing operations decreased by 8% to GBP200m (2009:
GBP217m)
· Operating profit before exceptional items increased to GBP6.1m (2009
restated: GBP3.6m)
· Profit from continuing operations before exceptional items and tax
increased to GBP3.0m (2009: loss GBP0.3m)
· Exceptional items were GBP2.5m (2009: GBP22.8m)
· Adjusted earnings per share of 3.4p (2009: loss of GBP0.1p)
· Basic earnings per share of 0.1p (2009: loss of 59.0p)
· Cash generated from operations of GBP27.4m (2009: GBP11.9m)
· Net debt significantly reduced to GBP48.8 (2009: GBP68.5m)
· Principal banking facilities renewed and the Group's banks continue to
remain supportive
Operational Highlights
· Increased group-wide collaboration, driving efficiencies and use of best
practice across our operations
· Infrastructure established for direct sales from our China based
manufacturing facility in February 2010
· Sales and market share growth of our Group and licensed brands (up from
41% of revenue to 55%)
· Successful consolidation of operational sites in the UK, Europe and USA
· Customer and licensor awards for innovation and service
· Strengthened team at Board and operational level
Commenting on the results, Paul Fineman, CEO said:
"We are delighted to have met our key objectives in the year, of returning the
Group to profit, significantly reducing debt and improving our ability to
generate cash
"Our focus on providing great value, innovative products and excellent standards
of service to our global customer base means that we are well placed to meet
challenging market conditions.
"We continue to address further opportunities for improving efficiency and have
created a platform for continued profitable growth."
+-------------------------------+--------+--------------------+
| For further information, | | |
| please contact: | | |
| | | |
+-------------------------------+--------+--------------------+
| International Greetings plc | | Tel: 01707 630630 |
| Paul Fineman, Chief Executive | | |
| Sheryl Tye, Finance Director | | |
| | | |
+-------------------------------+--------+--------------------+
| Arden Partners plc | | Tel: 020 7398 1632 |
| Richard Day | | |
| Colin Smith | | |
| | | |
+-------------------------------+--------+--------------------+
| Financial Dynamics | | Tel: 020 7831 3113 |
| Jonathon Brill | | |
| Caroline Stewart | | |
+-------------------------------+--------+--------------------+
Chairman's Statement
A Year of Significant Progress
I am pleased to report that we are now seeing the actions taken over the past
few years bearing fruit. After two difficult years of trading during which the
business was reorganised and a recovery plan put in place by our new management
team, in 2010 the Group has returned to profit. At the same time the
indebtedness to the Group's bankers has been further reduced. It is particularly
encouraging that this progress has been made during a time of global economic
uncertainty and tough trading conditions in the markets in which we operate.
Revenues for the year ended 31 March 2010 were GBP200 million (2009: GBP217
million), reflecting our focus on more profitable sales. Profit before tax for
the year, before exceptional items, was GBP3.0 million (2009: loss of GBP0.3
million). The major restructuring of the Group has now been completed, although
minor restructuring continued during the year resulting in a net reduction by
way of exceptional items before tax of GBP2.5 million (2009: GBP22.4 million).
The basic earnings per share for the year was 0.1p (2009: basic loss per share
of 59p). After removing the effect of exceptional items, this increases to 3.4p
per share (2009: 1.0p loss).
The Board will review the dividend policy when it is satisfied that there is a
consistent upward trend in profits and when the Group's debt has been further
reduced.
Our future plan is to grow the business organically not through acquisitions.
The Board has approved a new plan which builds on the recent success and aims to
deliver sustainable profitable organic growth in the years ahead. The plan is
currently being implemented across the Group.
Operational achievements include:
- The consolidation of operational sites in the USA
- Establishing I.G. Europe which brings together our businesses on the
continent
- Growing our business in Australia and Asia through greater intra-group
cooperation
- Developing our "everyday" business thereby further reducing our dependence
on the Christmas trade
We were delighted to appoint John Charlton as a Non-Executive Director on 28
April 2010. John was, until recently, Senior Vice President of American
Greetings Corporation and Chief Executive of UK Greetings Limited. John's
management experience, combined with his knowledge of the greetings card and
giftware markets, will be invaluable in helping the Group fulfil its potential.
The Group's return to profit and its strengthened financial position underpin
our optimism for the future success of the business. Having successfully
restructured the business, Paul Fineman and his management team are now
concentrating on further improving the service to our existing customers,
particularly in the fields of design and delivery of products. At the same time
new customers are being targeted and new products introduced to the marketplace.
As the global economy slowly improves, the Group, with its spread of business
across four continents, is well placed to take advantage of the potential for
profitable growth.
I would like to thank all our employees for their commitment and enthusiasm in
developing the business and all our customers, suppliers and shareholders for
their continued support.
Keith James
Chairman
Chief Executive's Statement
I am pleased to report that we have met our key strategic objectives for 2009/10
of returning the Group to profit, improving cash generation, and significantly
reducing debt. Our focus on core activities has created a solid platform for
global growth through the exploitation of the many positive opportunities that
have been identified across the Group.
We will continue to deploy resources to businesses which deliver attractive
profitability, whilst ensuring that appropriate attention is given to the tasks
of continuously improving working capital management and operational efficiency.
Highlights during the year include:
· Returning the Group to profit (GBP3.0m before tax and exceptional items)
· Significantly reducing Net Debt by GBP20m from GBP68.5m to GBP48.8m
· Generating GBP27.4m of cash from operations (2009: GBP11.9m)
· Renewing our principal banking facilities and securing the support of the
Group's bankers
· Returning IG UK, our largest subsidiary, to profit
· Increasing group-wide collaboration, thereby driving efficiencies and the
sharing of best practices
· Creating the infrastructure for direct sales from our China based
manufacturing facility
· Market share growth of our Group and Licensed brands
· The consolidation of operational business units in the UK, mainland Europe
and in the USA
· Winning customer and licensor awards for innovation and service
Our dedication to ever improving standards of customer service and innovative
product development enabled us to strengthen and grow customer and licensor
relationships. We were delighted that these efforts resulted in further
industry recognition from our customers and licensors, who continue to demand
exceptionally high standards. Awards received in 2009/10 included a Vendor
Partner of the Year award from Target Corporation in the United States, from
Alliance Boots for Best Product and from Disney Consumer Products for quality
and innovation.
We continued to achieve our aim of reducing the impact of the seasonal nature of
our business through the creation of a more balanced product portfolio that
includes "everyday" greeting cards, stationery and associated product
categories. In 2010 we will continue to improve the shape of our business,
enabling us to further increase profitability and reduce debt.
UK
The UK accounted for 53% of the Group's revenue for the year.
Whilst market conditions remained challenging, our reshaped and further
integrated UK businesses met overall profit and cash generation objectives. The
improved visibility of all UK subsidiary activities has resulted in greater
inter-company cooperation, yielding operational efficiencies, particularly
relating to logistics and administrative processes. A more cohesive approach is
being adopted by our new management teams who have demonstrated the ability and
experience to continue to grow their businesses profitably.
Of particular note was IG UK returning to profit. A key contributory factor for
the turnaround of the business was an excellent order delivery and customer
service performance. This will provide ongoing momentum in the current financial
year.
Both Anker and Alligator enjoyed a profitable year. Sales growth was achieved
from both Group brand and licensed products and with significant success in the
discount and value markets.
Having been managed as independent businesses over many years, the integration
of our gift businesses - Scoop and Gift Design, has created an entity that
encompasses the best practices of each organisation in areas including product
development, sourcing, sales and customer support. Additionally, operational
costs have been reduced enabling the combined business to become more
competitive.
On the whole, we have successfully eliminated historically unprofitable sales
from our UK businesses. We will now accelerate the deployment of our teams to
those core business activities with scope for profitable growth.
Mainland Europe
Europe accounted for 18% of the Group's revenue for the year.
Our European businesses delivered an overall satisfactory performance, despite
difficult market conditions. Hoomark's focus on its "value" markets proved to
be a successful strategy as sales growth was, overwhelmingly, achieved at entry
level price points.
The establishment of IG Europe as a legal entity provides the foundation of
ever-increasing cooperation and the delivery of synergy benefits by our
rationalised European businesses. We have commenced the physical integration of
our Weltec business within Anchor BV and are developing effective collaboration
between the senior management teams across our European subsidiaries. This will
enable us to identify and exploit commercial opportunities for improving
results, particularly in Germany, France and Holland.
USA
USA accounted for 20% of the Group's revenue for the year.
The major improvement in the performance of our business in the US resulted from
withdrawing from unprofitable sales and from achieving significant efficiencies
in inventory management. This facilitated our exit from costly third party
offices and warehouses in New Jersey and Kentucky. As with other Group
companies, our focus on customer service ensured that sales were maximised
despite overall difficult market conditions.
Our growth initiatives for the US market include the introduction of the Paper
Craft(TM) brand of handcrafted greeting cards. This is a major new area of
growth and is already gaining traction in targeted markets within the USA and
throughout the globe. We have successfully introduced exciting new ranges of
licensed products and are delighted to have formed a close relationship with
many licensors, including one which resulted in the launch of products endorsed
by one of America's best loved celebrity cooks, Paula Deen.
Additionally, we have commenced activities in new channels of distribution,
including 'School Fundraising' - a market which provides income for schools via
sales of consumer products. Through our cooperation with Disney Consumer
Products in this market sector we have broadened and strengthened our
relationship with Disney. The product of this relationship includes the
introduction of "Toy Story 3" licensed gift wrap and related products to the
Schools Fundraising market.
Asia
Asia accounted for 1% of the Group's third party revenue for the year. The
majority of its sales are intercompany.
The reorganisation of our factory in Shenzhen, China has resulted in a 'step
change' in our ability to trade directly from the factory with our major
customers around the world.
Additionally, we have made significant and on-going improvements in line with
our commitment to excellent standards of technical and ethical compliance. This
has been recognised through several awards including the award of the Forestry
Stewardship Council (FSC) accreditation.
IG Asia and Anker in Hong Kong, together with the team in our manufacturing
facility in Shenzhen, have provided superb support to our businesses throughout
the world and their delivery performance over the past year has been exemplary.
We shall, nevertheless, continue to raise standards whilst providing great value
and service to our customers.
Australia
Australia accounted for 8% of the Group's revenue for the year.
Our colleagues at Artwrap have, once again, enjoyed a year of excellent growth
in both volume and profitability. Increased market share has been achieved
through growing existing customer relationships and building new ones. The broad
portfolio of products and licensor relationships provided to Artwrap from other
IG Group businesses helped in accelerating its positive growth momentum. This
proactive exploitation of the Group's synergy benefits was further enhanced by
the close cooperation between our businesses in Asia and Australia, and directly
contributed to establishing and maintaining Artwrap's successful growth trend.
Our Customers
Whilst ensuring that we continue to enhance our ability to create high quality,
innovative products, we are conscious of the need to provide our customers with
commercially viable product offers, with broad appeal. It is with this approach
in mind that we have successfully grown our portfolio of customers in the value
and discount market sectors which have proven to be most resilient to the global
economic downturn. At the intermediate-to-premium end of the market, we
continue to maintain and grow our presence profitably with our Tom Smith and
Gift Wrap Company brands. These brands form the platforms from which we create
bespoke products that are customised to achieve demanding Blue Chip retailer
standards.
Our Brands and Licences
Our portfolio of licences is of the highest quality and provides considerable
commercial appeal. As well as continuing to enjoy significant shares of
available markets for those licences with enduring appeal, we also benefit from
sales of newly launched licenses, and are confident that "Toy Story 3" product
ranges will prove to be very successful in 2010 and beyond. We are delighted to
have received the Disney Stationery Quality Product of the Year 2009 award, and
believe that this reflects our collaborative approach, and our understanding of
the product development demands of the market.
Environmental Responsibilities
The Board is committed to reducing carbon emissions, minimising waste and
raising ethical standards throughout the Group. This stance is compatible with
our business strategy and corporate culture.
Our Team
Whilst some new key appointments were made at Board and Senior Operational
levels of the business during the year, we have benefited from the successful
redeployment of management talent within the business. We were, as a result,
better able to combat the challenges presented by the difficult market
conditions and to take advantage of new business opportunities. I would like to
express my thanks to all colleagues for their commitment and congratulate them
for their efforts in meeting our key objectives during the year.
Outlook
We are encouraged by the progress we have made throughout the Group. We have
raised standards in all services we provide and we are committed to continuously
improving all aspects of our business. Our customers require, and we will
continue to supply, innovative and competitive products supported by the highest
possible standards of service that represent excellent value. We believe that
we are increasingly capable of fulfilling these requirements.
Whilst market conditions undoubtedly remain challenging, our order book is
encouraging and we are well positioned to meet our objectives and for profitable
global growth.
Paul Fineman
Chief Executive
Finance Review
Group performance
Revenuefrom continuing operations for the year to 31 March 2010 were down, in
line with expectations, by 8.0% to GBP200 million (2009: GBP217 million), due to
our drive to reduce unprofitable sales. The main reduction was in the US. The
inclusion of Artwrap as a subsidiary since August 1, 2009, as explained in note
8, mitigated the decrease by GBP15 million. The effect of US$ and Euro against
sterling mitigated a further GBP5.8 million (2.7%).
Gross profit margin from continuing operations and before exceptional items has
remained at 16.9% despite large scale clearance of slow moving stock at low
margins. This increases to 17.1% when translated at constant rates.
Overheadsbefore exceptional items have reduced year on year by GBP5. 3 million
(2009: GBP4.1 million) being a reduction of 15.2% (2009 restated: 10.6%). Of
the total of GBP9.4 million reduction over the past two years GBP1.7 million is
as a result of foreign exchange gains. The remaining GBP7.7 million is the
result of the restructuring carried out during 2008 and 2009.
Operating profit before exceptional items increased to GBP6.1 million (2009
restated: GBP3.5 million). After exceptional items, operating profit was GBP3.6
million (2009 restated: GBP17.5 million loss).
Exceptional items during the year amounted to GBP2.5 million before tax (2009:
GBP22.4 million, excluding discontinued business).
These relate to:
· Impairment of printing equipment, fittings, and stock (total of GBP1.4
million) in Eickpack following a decision made after year end to close the
business (see note 13)
· Following restructuring at Hatfield head office, staff numbers have
significantly reduced such that the existing property is now too large for the
Group's needs. This has led to a lease provision of GBP1.3 million and
impairment of leasehold improvements of GBP0.3million
· GBP0.9 million profits recycled through the income statement from the
translation reserves relating to the disposal of the Latvian companies
· Restructuring relating to the relocation of the Dutch Weltec business
into Anchor BV, and in the UK the relocation of the Gift Design business into
Scoop Design, incurring costs of GBP0.7 million, mainly in staff redundancy
· Insurance proceeds of GBP0.3 million relating to a fire at an Asian
supplier last year
Finance expenses in the year reduced to GBP3.0 million (2009 restated: GBP5.4
million, including GBP1.4 million of exceptional items relating to the
re-structuring of our finances). The fall in base rate interest, albeit
partially mitigated by the increased margins now being charged by the bank, and
our unrelenting pressure on keeping our overdraft as low as possible, have been
the main causes of this 24% decrease in finance costs (before prior year
exceptional charge).
Profit before exceptional items and tax was GBP3.0 million (2009:GBP0.3 million
loss).
Profit before tax was GBP0.5 million (2009: GBP22.8 million loss).
Discontinued operations:
There are no discontinued operations this year (2009: GBP3.9 million).
As disclosed in note 13, Post Balance Sheet Events, in July 2010 the Board took
the difficult decision to close the Eickpack business. Eickpack, a manufacturer
of gift wrap counter rolls, based in Germany, was acquired in January 2007, and
has made losses each year. At March 2010 it had gross assets of GBP1.5 million,
which have now been impaired by GBP1.4 million, which is the Directors' estimate
of the net provision required.In the year ended 31 March 2010, Eickpack
contributed revenues of GBP2.5 million and incurred a loss before tax of GBP0.5
million.
Profit for the year was GBP0.7 million (2009: GBP28.3 million loss).
Prior Year Adjustment
During the year it was discovered that one of our Dutch subsidiaries had been
overpaid for an insurance claim for a flood that occurred in June 2007, which
had been fully accounted for in the year to 31 March 2008. The Group has since
repaid this amount to the insurance company, and reduced the brought forward
reserves as at 1 April 2008 by GBP0.5 million. This is further explained in note
3.
Gains and losses on foreign exchange are now shown within Administration
expenses, rather than within Finance expenses. This reduced the Operating profit
for the year to 31 March 2009 by GBP0.4 million.
Taxation
The profits of the Group this year have enabled tax losses from previous years
to be recognised both against profits for this year and against foreseeable
profits in the future. In addition, translation gains recycled through the
Income statement from reserves on closure of our Latvian subsidiaries give rise
to income outside the scope of taxation. These have given an effective tax
credit of 34% (2009 charge of 7% against losses). The main segment able to use
the brought forward losses is the UK. Losses in the US remain fully provided.
During the last year our European businesses were transferred to be under one
Dutch holding company, IG Europe BV. As well as operational efficiencies this is
likely to achieve tax efficiency within Europe.
Earnings per share and Dividends
The basic earnings per share was 0.1p (2009: basic loss per share of 59p).
After removing the effect of exceptional items, the adjusted earnings per share
increases to 3.4p (2009: 1.0p loss).
No dividend was paid during the year (2009: GBPNil) and the Board do not propose
a final dividend for the year. Our core focus continues to be on growing the
profitability of the business and reducing bank debt. Dividends will be
recommended as soon as the Board considers it appropriate.
Balance sheet and cashflow
Net debt at 31 March 2010 was GBP48.8 million (2009: GBP68.5 million) (see note
9).
Our year end net debt includes amounts denominated in United States Dollars of
$18.9 million (2009: $52.0 million), and in Euros of EUR 18.1 million (2009: EUR
23.3 million). The year-end exchange rates were $1.51 (2009:$1.44), and EUR 1.12
(2009: EUR 1.09). Using the 2009 exchange rates our net debt at 31 March 2010
would have been GBP49.9 million, a reduction of 27.0% from 2009 (2009: 13.7%
reduction from 2008).
We have continued to focus a great deal of attention on reducing our outstanding
debtors, both to maximise cash but also to reduce our exposure to risky debts.
This was made easier as the service delivery from our operating units was even
better than prior years, minimising customer's late payments. Trade debtors fell
from GBP22.4 million to GBP17.6 million (21%). The effect of currency
translation on this reduction is minimal.
We are also continuing to reduce our stock levels. Stock fell from GBP51.9
million to GBP45.0 million, even after inclusion of GBP6.1 million stock held at
Artwrap, which is included for the first time this year. Excluding the effect of
currency and without Artwrap and the provisions for Eickpack, stock reduced by
22.3%. Reduction of stock remains a focus for the coming year.
Group cash generated from operations was GBP27.5 million (2009: GBP11.9
million).
Cash paid in respect of deferred consideration for acquisitions, accounted for
GBP0.8 million (2009: GBP1.3 million) and related to the deferred consideration
for Alligator which was acquired in 2006.
The Group made no new acquisitions during the year. However, in May 2007 it
acquired a 50% interest in Artwrap, in Australia. The purchase agreement allowed
the Group to acquire the remaining 50% interest at the Group's option. The Group
had waived this option, and had accounted for the business as an associate.
During the year the waiver expired, and hence from August 2009, since the option
allows the Group control of the business, the Group is required to account for
the business as a subsidiary. The Group results for this financial year
therefore include the results of Artwrap from 1 August 2009. At the date of
acquisition, Artwrap had an overdraft of GBP3.2m, and this is included as cash
paid on acquisition of subsidiary within the Cash Flow Statement (see note 8 for
details.)
The Group has kept capital expenditure at a low level being GBP1.8m for the year
(2009:GBP2.2 million). It realised GBP0.3 million (2009: GBP0.9 million) from
asset sales in the year.
Equity attributable to shareholders amounted to GBP42.6 million (2009 restated:
GBP40.7 million).
Key performance indicators
Our Key performance indicators are: reducing debt, reducing overheads, and
improving profits to regain our financial strength. On reducing debt, we are
managing both working capital and our investments in fixed assets. All of these
have been discussed above. Operationally we are increasing the spread of our
revenue base across:
· Different territories where UK turnover has reduced from 58% to 54% this
year (see note 2)
· Different products Gift wrap turnover has fallen from 40% to 37% of revenue
(see note 2)
· More even phasing sales of everyday products now represent 50% of revenue,
up from 44% last year
· Brands we have raised the profile of IG brands and licensed products and
these have grown from 41% of our revenue to 55%.
Treasury Operations
The Group continues to receive the full support of its bankers, and has met all
its bank forecasts and covenants since the facilities were negotiated in 2008.
During the year part of the overdraft was transferred to a revolving credit
facility. In June 2010, our facility with the Group's main bank was renewed for
a further year to 30 June 2011. The Directors have confidence that the current
bank facilities are sufficient to meet the Group's needs for the foreseeable
future. See note 1 to the Financial Statements for further information.
Sheryl Tye
Finance Director
Consolidated Income Statement
year ended 31 March 2010
+-------------------------+------+-------------+-------------+-----------+----------+-------------+-------------+-----------+
| | | 2010 | 2010 | 2010 | | 2009 | 2009 | 2009 |
+-------------------------+------+-------------+-------------+-----------+----------+-------------+-------------+-----------+
| | | | | | | restated | restated | restated |
+-------------------------+------+-------------+-------------+-----------+----------+-------------+-------------+-----------+
| | | Before | Exceptional | Total | | Before | Exceptional | Total |
| | | | | | | | | |
+-------------------------+------+-------------+-------------+-----------+----------+-------------+-------------+-----------+
| | | exceptional | items | | | exceptional | items | |
| | | | | | | | | |
+-------------------------+------+-------------+-------------+-----------+----------+-------------+-------------+-----------+
| | | items | (note | | | items | (note | |
| | | | 5) | | | | 5) | |
+-------------------------+------+-------------+-------------+-----------+----------+-------------+-------------+-----------+
| | Note | GBP000 | GBP000 | GBP000 | | GBP000 | GBP000 | GBP000 |
+-------------------------+------+-------------+-------------+-----------+----------+-------------+-------------+-----------+
| Continuing operations | | | | | | | | |
+-------------------------+------+-------------+-------------+-----------+----------+-------------+-------------+-----------+
| Revenue | 2 | 200,152 | - | 200,152 | | 216,917 | - | 216,917 |
+-------------------------+------+-------------+-------------+-----------+----------+-------------+-------------+-----------+
| Cost of sales | | (166,353) | (920) | (167,273) | | (180,318) | (8,360) | (188,678) |
+-------------------------+------+-------------+-------------+-----------+----------+-------------+-------------+-----------+
| Gross Profit | | 33,799 | (920) | 32,879 | | 36,599 | (8,360) | 28,239 |
+-------------------------+------+-------------+-------------+-----------+----------+-------------+-------------+-----------+
| | | 16.9% | | 16.4% | | 16.9% | | 13.0% |
+-------------------------+------+-------------+-------------+-----------+----------+-------------+-------------+-----------+
| Selling expenses | | (12,159) | (160) | (12,319) | | (12,189) | (3,206) | (15,395) |
+-------------------------+------+-------------+-------------+-----------+----------+-------------+-------------+-----------+
| Administration expenses | | (17,222) | (2,326) | (19,548) | | (22,455) | (9,431) | (31,886) |
+-------------------------+------+-------------+-------------+-----------+----------+-------------+-------------+-----------+
| Other operating income | | 1,643 | - | 1,643 | | 1,267 | - | 1,267 |
+-------------------------+------+-------------+-------------+-----------+----------+-------------+-------------+-----------+
| Disposal of subsidiary | | - | 907 | 907 | | - | - | - |
+-------------------------+------+-------------+-------------+-----------+----------+-------------+-------------+-----------+
| Profit/(loss) on sales | | 26 | - | 26 | | 324 | (16) | 308 |
| of property, plant and | | | | | | | | |
| equipment | | | | | | | | |
+-------------------------+------+-------------+-------------+-----------+----------+-------------+-------------+-----------+
| Operating profit/(loss) | | 6,087 | (2,499) | 3,588 | | 3,546 | (21,013) | (17,467) |
+-------------------------+------+-------------+-------------+-----------+----------+-------------+-------------+-----------+
| | | | | | | | | |
+-------------------------+------+-------------+-------------+-----------+----------+-------------+-------------+-----------+
| Finance expenses | | (3,024) | - | (3,024) | | (3,993) | (1,436) | (5,429) |
+-------------------------+------+-------------+-------------+-----------+----------+-------------+-------------+-----------+
| | | | | | | | | |
+-------------------------+------+-------------+-------------+-----------+----------+-------------+-------------+-----------+
| Share of (loss)/profit | | (39) | - | (39) | | 120 | - | 120 |
| of associates (net of | | | | | | | | |
| tax) | | | | | | | | |
+-------------------------+------+-------------+-------------+-----------+----------+-------------+-------------+-----------+
| Profit/(loss) before | | 3,024 | (2,499) | 525 | | (327) | (22,449) | (22,776) |
| tax | | | | | | | | |
+-------------------------+------+-------------+-------------+-----------+----------+-------------+-------------+-----------+
| | | | | | | | | |
+-------------------------+------+-------------+-------------+-----------+----------+-------------+-------------+-----------+
| Income tax | | (649) | 828 | 179 | | (164) | (1,453) | (1,617) |
| (charge)/credit | | | | | | | | |
+-------------------------+------+-------------+-------------+-----------+----------+-------------+-------------+-----------+
| Profit/(loss) from | | 2,375 | (1,671) | 704 | | (491) | (23,902) | (24,393) |
| continuing operations | | | | | | | | |
+-------------------------+------+-------------+-------------+-----------+----------+-------------+-------------+-----------+
| Discontinued operations | | | | | | | | |
+-------------------------+------+-------------+-------------+-----------+----------+-------------+-------------+-----------+
| Loss from discontinued | | - | - | - | | (2,649) | (1,297) | (3,946) |
| operations (net of tax) | | | | | | | | |
+-------------------------+------+-------------+-------------+-----------+----------+-------------+-------------+-----------+
| Profit /(loss) for the | | 2,375 | (1,671) | 704 | | (3,140) | (25,199) | (28,339) |
| year | | | | | | | | |
+-------------------------+------+-------------+-------------+-----------+----------+-------------+-------------+-----------+
| Attributable to: | | | | | | | | |
+-------------------------+------+-------------+-------------+-----------+----------+-------------+-------------+-----------+
| Owners of the Parent | | | | 55 | | | | (28,339) |
| Company | | | | | | | | |
+-------------------------+------+-------------+-------------+-----------+----------+-------------+-------------+-----------+
| Non-controlling | | | | 649 | | | | |
| interests | | | | | | | | - |
+-------------------------+------+-------------+-------------+-----------+----------+-------------+-------------+-----------+
| | | | | | | | | |
+-------------------------+------+-------------+-------------+-----------+----------+-------------+-------------+-----------+
| Earnings per ordinary | 11 | | | | | | | |
| share | | | | | | | | |
+-------------------------+------+-------------+-------------+-----------+----------+-------------+-------------+-----------+
| Basic & Diluted | | | | 0.1 | | | | (59.0 |
| earnings/(loss) per | | | | p | | | | p) |
| share | | | | | | | | |
+-------------------------+------+-------------+-------------+-----------+----------+-------------+-------------+-----------+
| Continuing operations | | | | 0.1 | | | | (50.8 |
| | | | | p | | | | p) |
+-------------------------+------+-------------+-------------+-----------+----------+-------------+-------------+-----------+
| Discontinued operations | | | | - | | | | (8.2p) |
| | | | | | | | | |
+-------------------------+------+-------------+-------------+-----------+----------+-------------+-------------+-----------+
| Adjusted | | 3.4p | | | | (1.0p) | | |
| earnings/(loss) per | | | | | | | | |
| share excluding | | | | | | | | |
| exceptional items and | | | | | | | | |
| discontinued operations | | | | | | | | |
+-------------------------+------+-------------+-------------+-----------+----------+-------------+-------------+-----------+
| | | | | | | |
+-------------------------+------+-------------+-------------+-----------+----------+-------------+-------------+-----------+
Consolidated Statement of Comprehensive Income
year ended 31 March 2010
+----------------------------+-+----------------------+----------+----------+
| | | 2010 | | 2009 |
+----------------------------+-+----------------------+----------+----------+
| | | | | restated |
+----------------------------+-+----------------------+----------+----------+
| | | GBP000 | | GBP000 |
+----------------------------+-+----------------------+----------+----------+
| Profit / (loss) for the | | 704 | | (28,339) |
| year | | | | |
+----------------------------+-+----------------------+----------+----------+
| | | | | |
+----------------------------+-+----------------------+----------+----------+
| Other comprehensive | | | | |
| income: | | | | |
+----------------------------+-+----------------------+----------+----------+
| Recyling translation | | (907) | | - |
| reserves on closure of | | | | |
| subsidiary | | | | |
+----------------------------+-+----------------------+----------+----------+
| Exchange difference on | 1,654 | | 1,637 |
| translation of foreign | | | |
| operations | | | |
+------------------------------+----------------------+----------+----------+
| Net gain on cash flow | | - | | 125 |
| hedges (net of tax) | | | | |
+----------------------------+-+----------------------+----------+----------+
| Other comprehensive income | | 747 | | 1,762 |
| for period, net of tax | | | | |
+----------------------------+-+----------------------+----------+----------+
| Total comprehensive income | | 1,451 | | (26,577) |
| / (loss) for the period, | | | | |
| net of tax | | | | |
+----------------------------+-+----------------------+----------+----------+
| | | | | |
+----------------------------+-+----------------------+----------+----------+
| Attributable to: | | | | |
+----------------------------+-+----------------------+----------+----------+
| Owners of the Parent | | 265 | | (26,577) |
| Company | | | | |
+----------------------------+-+----------------------+----------+----------+
| Non-controlling interests | | 1,186 | | - |
+----------------------------+-+----------------------+----------+----------+
| | | 1,451 | | (26,577) |
+----------------------------+-+----------------------+----------+----------+
Consolidated Statement of Changes in Equity
year ended 31 March 2010
+------------------+------------------+---------------+----------------+----------------+----------------+-----------------+----------------------+--------------------+----------------------+
| | Share | Share | Merger | Hedging | Translation | Retained | Share | Non | Total |
| | capital | premium | reserves | reserves | reserve | earnings | -holder | -controlling | |
| | | and | | | | | equity | interest | |
| | | capital | | | | | | | |
| | | redemption | | | | | | | |
| | | reserve | | | | | | | |
+------------------+------------------+---------------+----------------+----------------+----------------+-----------------+----------------------+--------------------+----------------------+
| | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+------------------+------------------+---------------+----------------+----------------+----------------+-----------------+----------------------+--------------------+----------------------+
| At 1 April 2008 | 2,353 | 4,346 | 15,533 | (125) | (1,485) | 46,679 | 67,301 | | 67,301 |
| previously | | | | | | | | - | |
| reported | | | | | | | | | |
+------------------+------------------+---------------+----------------+----------------+----------------+-----------------+----------------------+--------------------+----------------------+
| Prior year | | | | | | (470) | (470) | | (470) |
| adjustment (note | - | - | - | - | | | | - | |
| 3) | | | | | | | | | |
+------------------+------------------+---------------+----------------+----------------+----------------+-----------------+----------------------+--------------------+----------------------+
| At 1 April 2008 | 2,353 | 4,346 | 15,533 | (125) | (1,485) | 46,209 | 66,831 | | 66,831 |
| restated | | | | | | | | - | |
+------------------+------------------+---------------+----------------+----------------+----------------+-----------------+----------------------+--------------------+----------------------+
| Loss for the | | | | | | (28,339) | (28,339) | | (28,339) |
| year | - | - | - | - | - | | | - | |
+------------------+------------------+---------------+----------------+----------------+----------------+-----------------+----------------------+--------------------+----------------------+
| Other | | | | 125 | 1,637 | | 1,762 | | 1,762 |
| comprehensive | - | - | - | | | - | | - | |
| income | | | | | | | | | |
| (restated) | | | | | | | | | |
+------------------+------------------+---------------+----------------+----------------+----------------+-----------------+----------------------+--------------------+----------------------+
| Total | | | | 125 | 1,637 | (28,339) | (26,577) | | (26,577) |
| comprehensive | - | - | - | | | | | - | |
| loss for the | | | | | | | | | |
| year | | | | | | | | | |
+------------------+------------------+---------------+----------------+----------------+----------------+-----------------+----------------------+--------------------+----------------------+
| Equity settled | | | | | | 19 | 19 | | 19 |
| share based | - | - | - | - | - | | | - | |
| payment | | | | | | | | | |
+------------------+------------------+---------------+----------------+----------------+----------------+-----------------+----------------------+--------------------+----------------------+
| Transfer from | | | (1,045) | | | 1,045 | | | |
| merger reserve | - | - | | - | - | | - | - | - |
| to retained | | | | | | | | | |
| earnings | | | | | | | | | |
+------------------+------------------+---------------+----------------+----------------+----------------+-----------------+----------------------+--------------------+----------------------+
| Shares issued | 72 | | 397 | | | | 469 | | 469 |
| | | - | | - | - | - | | - | |
+------------------+------------------+---------------+----------------+----------------+----------------+-----------------+----------------------+--------------------+----------------------+
| At 31 March 2009 | 2,425 | 4,346 | 14,885 | | 152 | 18,934 | 40,742 | | 40,742 |
| restated | | | | - | | | | - | |
+------------------+------------------+---------------+----------------+----------------+----------------+-----------------+----------------------+--------------------+----------------------+
| Profit for the | | | | | | 55 | 55 | 649 | 704 |
| year | - | - | - | - | - | | | | |
+------------------+------------------+---------------+----------------+----------------+----------------+-----------------+----------------------+--------------------+----------------------+
| Other | | | | | 210 | | 210 | 537 | 747 |
| comprehensive | - | - | - | - | | - | | | |
| income | | | | | | | | | |
+------------------+------------------+---------------+----------------+----------------+----------------+-----------------+----------------------+--------------------+----------------------+
| Total | | | | | 210 | 55 | 265 | 1,186 | 1,451 |
| comprehensive | - | - | - | - | | | | | |
| income for the | | | | | | | | | |
| year | | | | | | | | | |
+------------------+------------------+---------------+----------------+----------------+----------------+-----------------+----------------------+--------------------+----------------------+
| Equity settled | | | | | | 82 | 82 | | 82 |
| share based | - | | - | - | - | | | - | |
| payment | | | | | | | | | |
+------------------+------------------+---------------+----------------+----------------+----------------+-----------------+----------------------+--------------------+----------------------+
| Shares issued | 182 | | 1,331 | | | | 1,513 | | 1,513 |
| | | - | | - | - | - | | - | |
+------------------+------------------+---------------+----------------+----------------+----------------+-----------------+----------------------+--------------------+----------------------+
| Options | 1 | | | | | | 1 | | 1 |
| exercised | | | - | - | - | - | | - | |
+------------------+------------------+---------------+----------------+----------------+----------------+-----------------+----------------------+--------------------+----------------------+
| Acquisition in | | | | | | | | 2,168 | 2,168 |
| the year | - | - | - | - | - | - | - | | |
+------------------+------------------+---------------+----------------+----------------+----------------+-----------------+----------------------+--------------------+----------------------+
| At 31 March 2010 | 2,608 | 4,346 | 16,216 | | 362 | 19,071 | 42,603 | 3,354 | 45,957 |
| | | | | - | | | | | |
+------------------+------------------+---------------+----------------+----------------+----------------+-----------------+----------------------+--------------------+----------------------+
| | | | | | | | | | |
+------------------+------------------+---------------+----------------+----------------+----------------+-----------------+----------------------+--------------------+----------------------+
Merger reserve
The merger reserve comprises premium on shares issued in relation to business
combinations. The amount of the merger reserve that relates to the Glitterwrap
investment has been transferred to retained earnings due to the previous
impairment of the goodwill in that business, as explained in note 7.
Capital redemption reserve
The capital redemption reserve comprises amounts transferred from retained
earnings in relation to the redemption of preference shares. For ease of
presentation the amount of GBP1,340,000 has been included within the column of
Share Premium and capital redemption reserve, in the balances at both the
beginning and end of each year, with no movements.
Hedging reserve
The hedging reserve comprises the effective portion of the cumulative net change
in the fair value of cash flow hedging instruments related to hedged
transactions that have not yet occurred.
Translation reserve
The translation reserve comprises all foreign currency differences arising from
the translation of the Financial Statements of
foreign operations.
Consolidated Balance Sheet
at 31 March 20010
+-------------------------------+------+--+----------+----------+----------+----------+----------+
| | | | As at | | As at | | As at |
| | | | 31 | | 31 | | 01 |
| | | | March | | March | | April |
| | | | 2010 | | 2009 | | 2008 |
+-------------------------------+------+--+----------+----------+----------+----------+----------+
| | | | | | restated | | restated |
+-------------------------------+------+--+----------+----------+----------+----------+----------+
| | | | 2010 | | 2009 | | 2008 |
+-------------------------------+------+--+----------+----------+----------+----------+----------+
| | | | GBP000 | | GBP000 | | GBP000 |
+-------------------------------+------+--+----------+----------+----------+----------+----------+
| | Note | | | | | | |
+-------------------------------+------+--+----------+----------+----------+----------+----------+
| Non-current assets | | | | | | | |
+-------------------------------+------+--+----------+----------+----------+----------+----------+
| Property, plant and equipment | 6 | | 34,199 | | 39,722 | | 42,871 |
+-------------------------------+------+--+----------+----------+----------+----------+----------+
| Intangible assets | 7 | | 33,139 | | 30,380 | | 35,544 |
+-------------------------------+------+--+----------+----------+----------+----------+----------+
| Investments in associates | 8 | | - | | 3,086 | | 3,106 |
+-------------------------------+------+--+----------+----------+----------+----------+----------+
| Deferred tax assets | | | 3,501 | | 3,070 | | 4,354 |
+-------------------------------+------+--+----------+----------+----------+----------+----------+
| Total non-current assets | | | 70,839 | | 76,258 | | 85,875 |
+-------------------------------+------+--+----------+----------+----------+----------+----------+
| Current assets | | | | | | | |
+-------------------------------+------+--+----------+----------+----------+----------+----------+
| Inventory | | | 44,911 | | 51,913 | | 57,022 |
+-------------------------------+------+--+----------+----------+----------+----------+----------+
| Income tax receivable | | | - | | - | | 1,221 |
+-------------------------------+------+--+----------+----------+----------+----------+----------+
| Trade and other receivables | | | 21,421 | | 28,464 | | 32,312 |
+-------------------------------+------+--+----------+----------+----------+----------+----------+
| Cash and cash equivalents | 9 | | 2,045 | | 2,060 | | 2,137 |
+-------------------------------+------+--+----------+----------+----------+----------+----------+
| Assets classified as held for | | | - | | - | | 1,718 |
| sale | | | | | | | |
+-------------------------------+------+--+----------+----------+----------+----------+----------+
| Total current assets | | | 68,377 | | 82,437 | | 94,410 |
+-------------------------------+------+--+----------+----------+----------+----------+----------+
| Total assets | | | 139,216 | | 158,695 | | 180,285 |
+-------------------------------+------+--+----------+----------+----------+----------+----------+
| Equity | | | | | | | |
+-------------------------------+------+--+----------+----------+----------+----------+----------+
| Share capital | | | 2,608 | | 2,425 | | 2,353 |
+-------------------------------+------+--+----------+----------+----------+----------+----------+
| Share premium | | | 3,006 | | 3,006 | | 3,006 |
+-------------------------------+------+--+----------+----------+----------+----------+----------+
| Reserves | | | 17,918 | | 16,377 | | 15,263 |
+-------------------------------+------+--+----------+----------+----------+----------+----------+
| Retained earnings | | | 19,071 | | 18,934 | | 46,209 |
+-------------------------------+------+--+----------+----------+----------+----------+----------+
| Equity attributable to owners | | | 42,603 | | 40,742 | | 66,831 |
| of the Parent Company | | | | | | | |
+-------------------------------+------+--+----------+----------+----------+----------+----------+
| Non-controlling interests | | | 3,354 | | - | | - |
+-------------------------------+------+--+----------+----------+----------+----------+----------+
| Total equity | | | 45,957 | | 40,742 | | 66,831 |
+-------------------------------+------+--+----------+----------+----------+----------+----------+
| Non-current liabilities | | | | | | | |
+-------------------------------+------+--+----------+----------+----------+----------+----------+
| Loans and borrowings | 10 | | 9,397 | | 11,143 | | 1,815 |
+-------------------------------+------+--+----------+----------+----------+----------+----------+
| Deferred income | | | 2,979 | | 3,801 | | 4,752 |
+-------------------------------+------+--+----------+----------+----------+----------+----------+
| Provisions | | | 1,722 | | 1,067 | | 1,345 |
+-------------------------------+------+--+----------+----------+----------+----------+----------+
| Other financial liabilities | | | 253 | | 1,205 | | 2,834 |
+-------------------------------+------+--+----------+----------+----------+----------+----------+
| Total non-current liabilities | | | 14,351 | | 17,216 | | 10,746 |
+-------------------------------+------+--+----------+----------+----------+----------+----------+
| Current liabilities | | | | | | | |
+-------------------------------+------+--+----------+----------+----------+----------+----------+
| Bank overdraft | 9 | | 3,038 | | 47,435 | | 64,898 |
+-------------------------------+------+--+----------+----------+----------+----------+----------+
| Loans and borrowings | 10 | | 38,455 | | 11,996 | | 193 |
+-------------------------------+------+--+----------+----------+----------+----------+----------+
| Deferred income | | | 821 | | 952 | | 954 |
+-------------------------------+------+--+----------+----------+----------+----------+----------+
| Provisions | | | 467 | | - | | 510 |
+-------------------------------+------+--+----------+----------+----------+----------+----------+
| Income tax payable | | | 26 | | 494 | | 59 |
+-------------------------------+------+--+----------+----------+----------+----------+----------+
| Trade and other payables | | | 21,422 | | 26,356 | | 21,698 |
+-------------------------------+------+--+----------+----------+----------+----------+----------+
| Other financial liabilities | | | 14,679 | | 13,504 | | 14,396 |
+-------------------------------+------+--+----------+----------+----------+----------+----------+
| Total current liabilities | | | 78,908 | | 100,737 | | 102,708 |
+-------------------------------+------+--+----------+----------+----------+----------+----------+
| Total liabilities | | | 93,259 | | 117,953 | | 113,454 |
+-------------------------------+------+--+----------+----------+----------+----------+----------+
| Total equity and liabilities | | | 139,216 | | 158,695 | | 180,285 |
+-------------------------------+------+--+----------+----------+----------+----------+----------+
Consolidated Cash Flow Statement
year ended 31 March 2010
+------------------------------------------+------+----------+----------+
| | | 2010 | 2009 |
+------------------------------------------+------+----------+----------+
| | | | restated |
+------------------------------------------+------+----------+----------+
| | | GBP000 | GBP000 |
+------------------------------------------+------+----------+----------+
| |Note | | |
+------------------------------------------+------+----------+----------+
| Cash flows from operating activities | | | |
+------------------------------------------+------+----------+----------+
| Profit/(loss) for the year | | 704 | (28,339) |
+------------------------------------------+------+----------+----------+
| Adjustments for: | | | |
+------------------------------------------+------+----------+----------+
| Depreciation | 6 | 4,543 | 5,058 |
+------------------------------------------+------+----------+----------+
| Impairment of tangible fixed assets | 6 | 1,094 | 4,441 |
+------------------------------------------+------+----------+----------+
| Amortisation of intangible assets | 7 | 287 | 387 |
+------------------------------------------+------+----------+----------+
| Impairment of intangible assets | 7 | - | 5,763 |
+------------------------------------------+------+----------+----------+
| Finance expenses - continuing | | 3,024 | 5,429 |
| operations | | | |
+------------------------------------------+------+----------+----------+
| Finance expenses - discontinued | | - | 150 |
| operations | | | |
+------------------------------------------+------+----------+----------+
| Share of profit of associates - | | 39 | (120) |
| continuing operations | | | |
+------------------------------------------+------+----------+----------+
| Recycling of translation reserves on | 5 | (907) | - |
| closure of subsidiary | | | |
+------------------------------------------+------+----------+----------+
| Income tax (credit)/charge - continuing | 4 | (179) | 1,617 |
| operations | | | |
+------------------------------------------+------+----------+----------+
| Profit on sales of property, plant and | | (26) | (308) |
| equipment | | | |
+------------------------------------------+------+----------+----------+
| Equity settled share - based payment | | 82 | 19 |
+------------------------------------------+------+----------+----------+
| Operating Profit/(loss) before changes | | 8,661 | (5,903) |
| in working capital and provisions | | | |
+------------------------------------------+------+----------+----------+
| Change in trade and other receivables | | 7,288 | 7,856 |
+------------------------------------------+------+----------+----------+
| Change in inventory | | 13,524 | 6,858 |
+------------------------------------------+------+----------+----------+
| Change in trade and other payables | | (2,181) | 4,889 |
+------------------------------------------+------+----------+----------+
| Change in provisions and deferred income | | 169 | (1,779) |
+------------------------------------------+------+----------+----------+
| Cash generated from operations | | 27,461 | 11,921 |
+------------------------------------------+------+----------+----------+
| Tax (paid)/received | | (372) | 1,862 |
+------------------------------------------+------+----------+----------+
| Interest and similar charges paid | | (3,421) | (5,429) |
+------------------------------------------+------+----------+----------+
| Net cash inflow from operating | | 23,668 | 8,354 |
| activities | | | |
+------------------------------------------+------+----------+----------+
| Cash flow from investing activities | | | |
+------------------------------------------+------+----------+----------+
| Proceeds from sale of property plant and | | 306 | 944 |
| equipment | | | |
+------------------------------------------+------+----------+----------+
| Acquisition of subsidiary, including | 8 | (3,918) | (469) |
| overdrafts acquired | | | |
+------------------------------------------+------+----------+----------+
| Acquisition of shares in associates | | - | (781) |
+------------------------------------------+------+----------+----------+
| Acquisition of intangible assets | 7 | (646) | (453) |
+------------------------------------------+------+----------+----------+
| Acquisition of property plant and | 6 | (1,121) | (1,725) |
| equipment | | | |
+------------------------------------------+------+----------+----------+
| Receipts from sales of investments | | - | 1,796 |
+------------------------------------------+------+----------+----------+
| Dividends received from associates | | - | 166 |
+------------------------------------------+------+----------+----------+
| Net cash outflow from investing | | (5,379) | (522) |
| activities | | | |
+------------------------------------------+------+----------+----------+
| Cash flows from financing activities | | | |
+------------------------------------------+------+----------+----------+
| Proceeds from issue of share capital | | 1 | - |
+------------------------------------------+------+----------+----------+
| Repayment of borrowings | | (3,064) | (470) |
+------------------------------------------+------+----------+----------+
| Payment of finance lease liabilities | | (12) | (52) |
+------------------------------------------+------+----------+----------+
| New bank loans raised | | 28,732 | 20,390 |
+------------------------------------------+------+----------+----------+
| Net cash inflow from financing | | 25,657 | 19,868 |
| activities | | | |
+------------------------------------------+------+----------+----------+
| Net increase in cash and cash | | 43,946 | 27,700 |
| equivalents | | | |
+------------------------------------------+------+----------+----------+
| Cash and cash equivalents at 1 April | | (45,375) | (62,761) |
+------------------------------------------+------+----------+----------+
| Effect of exchange rate fluctuations on | | 436 | (10,314) |
| cash held | | | |
+------------------------------------------+------+----------+----------+
| Cash and cash equivalents at 31 March | 9 | (993) | (45,375) |
+------------------------------------------+------+----------+----------+
Notes to the Financial Statements
1 Accounting policies
International Greetings plc is a public limited company, incorporated and
domiciled in England and Wales. The Company's ordinary shares are listed on AIM.
The Group Financial Statements consolidate those of the Company and its
subsidiaries (together referred to as the "Group") and equity account for the
Group's interest in associates prior to gaining control of the former associate
during 2009/2010. The Parent Company Financial Statements present information
about the Company as a separate entity and not about its Group.
The Group Financial Statements have been prepared and approved by the Directors
in accordance with International Financial Reporting Standards as adopted by the
EU ("Adopted IFRSs"). The Company has elected to prepare its Parent Company
Financial Statements in accordance with UK GAAP.
The accounting policies set out below have, unless otherwise stated, been
applied consistently to all periods presented in these group Financial
Statements.
Judgements made by the Directors in the application of these accounting policies
that have significant effect on the Financial Statements and estimates with a
significant risk of material adjustment in the next year are discussed in the
policies below.
Going Concern basis
The Financial Statements have been prepared on the going concern basis, not with
standing the net current liabilities of GBP10.5 million (2009 restated: GBP18.3
million).
As in previous years, the Group relies primarily on short term debt facilities
for its working capital needs. Details of the maturity of the Group's financial
liabilities are set out in note 10.
The Board has prepared a working capital forecast which shows that the borrowing
requirement of the Group increases steadily over the period from July 2010 and
peaks in September 2010, due to the seasonality of the business, before then
reducing. Over this period, due to production lead times, the orders for pre -
Christmas delivery have largely been received and therefore the principal
sensitivities considered in the forecasts relate to the exchange rate between
the US dollar and Sterling for both trade and borrowing requirements.
Additionally, the bank have also confirmed that, subject to the on demand nature
of the facility, a) it is their present intention that the facility will be made
available until 30 June 2011 when the continued availability and level of
facilities will be reviewed; and b) assuming that the business continues to
perform in line with expectations, that the facility will be renewed (at a level
adequate to meet the Group's funding requirement). The Directors consider that
this will enable the Company and the Group to continue to meet their liabilities
as they fall due for payment.
After making enquiries, the Directors have a reasonable expectation that the
Company and the Group have adequate resources to continue in operational
existence for the foreseeable future. Accordingly, they continue to adopt the
going concern basis in preparing the annual report and financial statements.
Measurement convention
The Financial Statements are prepared on the historical cost basis except that
financial instruments used for hedging are stated at their fair value.
Changes in accounting policies
The accounting policies adopted in the preparation of the Financial Statements
are consistent with those followed in the preparation of the Group's Financial
Statements for the year ended 31 March 2009, except for the adoption of new
Standards and Interpretations as of 1 April 2009, noted below. These Standards
were all effective for the year commencing 1 January 2009.
IFRS 2 Share-based Payment - Vesting Conditions and Cancellations
The Standard has been amended to clarify the definition of vesting conditions
and to prescribe the accounting treatment of an award that is effectively
cancelled because a non-vesting condition is not satisfied. The adoption of this
amendment did not have any impact on the financial position or performance of
the Group.
IFRS 8 Operating Segments
This Standard requires disclosure of information about the Group's operating
segments and replaces the requirement to determine primary (business) and
secondary (geographical) reporting segments of the Group. Additional disclosures
about each of these segments are shown in note 2, including revised comparative
information.
IAS 1 Revised Presentation of Financial Statements
The revised Standard separates owner and non-owner changes in equity. The
statement of changes in equity includes only details of transactions with
owners, with non-owner changes in equity presented as a single line. In
addition, the Standard introduces the statement of comprehensive income: it
presents all items of recognised income and expense, either in one single
statement, or in two linked statements. The Group has elected to present two
statements.
2 Segmental information
The Group has one material business activity being the design, innovation and
manufacture of gift wrap, crackers, cards, stationery and gift accessories.
For management purposes the Group is organised into five geographic business
units.
The results below are allocated based on the region in which the businesses are
located; this reflects the Group's management and internal reporting structure.
The disclosure has been extended in the current year with the inclusion of
Australia pursuant to the acquisition of Artwrap, which was previously accounted
for as an associate. The Chief Operating Decision Maker is the Executive Board.
Intra-segment pricing is determined on an arm's length basis. Segment results
include items directly attributable to a segment as well as those that can be
allocated on a reasonable basis.
Financial performance of each segment is measured on operating profit. Interest
expense or revenue and tax are managed on a Group basis and not split between
reportable segments.
Segment assets are all non-current and current assets, excluding Deferred tax
and income tax receivable. Where cash is shown in one segment, which nets under
the Group's banking facilities, against overdrafts in other segments, the
movement to net the two are shown in the eliminations column. Similarly inter
segment receivables and payables are eliminated in the eliminations
column.
+-------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| | UK | Europe | USA | Asia | Australia | Eliminations | Group |
+-------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| | GBP000 | GBP000 | GBP000 | GBP000 | | GBP000 | GBP000 |
+-------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| Year ended 31 March | | | | | | | |
| 2010 | | | | | | | |
+-------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| Continuing operations | | | | | | | |
+-------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| Revenue - external | 107,060 | 35,027 | 40,839 | 1,933 | 15,293 | - | 200,152 |
+-------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| - intra | 3,070 | 1,621 | 50 | 6,292 | - | (11,033) | - |
| segment | | | | | | | |
+-------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| Total segment revenue | 110,130 | 36,648 | 40,889 | 8,225 | 15,293 | (11,033) | 200,152 |
+-------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| | | | | | | | |
+-------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| Segment result before | 4,111 | 651 | 415 | (1,062) | 1,930 | 42 | 6,087 |
| exceptional items and | | | | | | | |
| discontinued operations | | | | | | | |
+-------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| Exceptional items | (1,508) | (1,778) | 175 | 158 | - | 454 | (2,499) |
+-------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| Segment result from | 2,603 | (1,127) | 590 | (904) | 1,930 | 496 | 3,588 |
| continuing operations | | | | | | | |
+-------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| Net finance expenses | | | | | | | (3,024) |
+-------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| Share of loss of | | | | | | | (39) |
| associates | | | | | | | |
+-------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| Income tax | | | | | | | 179 |
+-------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| Profit from continuing | | | | | | 704 |
| operations for the | | | | | | |
| year ended 31 March 2010 | | | | | | |
+------------------------------------+----------+----------+---------+-----------+--------------+----------+
| | | | | | | | |
+-------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| Balances at 31 March | | | | | | | |
| 2010 | | | | | | | |
+-------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| Continuing operations | | | | | | | |
+-------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| Segment assets | 93,578 | 24,740 | 17,416 | 8,320 | 7,516 | (12,354) | 139,216 |
+-------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| Segment liabilities | (43,774) | (23,186) | (39,359) | 162 | (2,121) | 15,019 | (93,259) |
+-------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| Capital expenditure | | | | | | | |
+-------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| - property, plant and | 681 | 283 | 34 | 71 | 52 | - | 1,121 |
| equipment | | | | | | | |
+-------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| - intangible | 456 | 6 | 8 | - | 176 | - | 646 |
+-------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| | | | | | | | |
+-------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| Depreciation | 1,983 | 1,123 | 750 | 602 | 85 | - | 4,543 |
+-------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| Amortisation | 123 | 39 | 125 | - | - | - | 287 |
+-------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| Impairment of property, | 327 | 767 | - | - | - | - | 1,094 |
| plant and equipment | | | | | | | |
+-------------------------+----------+----------+----------+---------+-----------+--------------+----------+
| | | | | | | | |
+-------------------------+----------+----------+----------+---------+-----------+--------------+----------+
2 Segmental information (continued)
+----------------------------+----------+----------+----------+---------+-----------+--------------+-----------+
| | UK | Europe | USA | Asia |Australia |Eliminations | Group |
+----------------------------+----------+----------+----------+---------+-----------+--------------+-----------+
| | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+----------------------------+----------+----------+----------+---------+-----------+--------------+-----------+
| Year ended 31 March 2009 | | | | | | | |
| restated | | | | | | | |
+----------------------------+----------+----------+----------+---------+-----------+--------------+-----------+
| Revenue - external | 126,114 | 34,211 | 43,143 | 13,449 | - | - | 216,917 |
+----------------------------+----------+----------+----------+---------+-----------+--------------+-----------+
| - intra | 2,530 | 2,544 | - | 7,090 | - | (12,164) | - |
| segment | | | | | | | |
+----------------------------+----------+----------+----------+---------+-----------+--------------+-----------+
| Total segment revenue | 128,644 | 36,755 | 43,143 | 20,539 | - | (12,164) | 216,917 |
+----------------------------+----------+----------+----------+---------+-----------+--------------+-----------+
| | | | | | | | |
+----------------------------+----------+----------+----------+---------+-----------+--------------+-----------+
| Segment result before | 2,122 | 1,633 | (686) | 164 | - | 313 | 3,546 |
| exceptional items and | | | | | | | |
| discontinued operations | | | | | | | |
+----------------------------+----------+----------+----------+---------+-----------+--------------+-----------+
| Exceptional items | (8,612) | (707) | (9,837) | (1,857) | - | - | (21,013) |
+----------------------------+----------+----------+----------+---------+-----------+--------------+-----------+
| Segment result from | (6,490) | 926 | (10,523) | (1,693) | - | 313 | (17,467) |
| continuing operations | | | | | | | |
+----------------------------+----------+----------+----------+---------+-----------+--------------+-----------+
| Pre-tax loss from | - | - | (3,946) | - | - | - | (3,946) |
| discontinued operations | | | | | | | |
+----------------------------+----------+----------+----------+---------+-----------+--------------+-----------+
| Segment result | (6,490) | 926 | (14,469) | (1,693) | - | 313 | (21,413) |
+----------------------------+----------+----------+----------+---------+-----------+--------------+-----------+
| Pre-tax loss from | | | | | | | 3,946 |
| discontinued operations | | | | | | | |
+----------------------------+----------+----------+----------+---------+-----------+--------------+-----------+
| Net finance expenses | | | | | | | (5,429) |
+----------------------------+----------+----------+----------+---------+-----------+--------------+-----------+
| Share of profit of | | | | | | | 120 |
| associates | | | | | | | |
+----------------------------+----------+----------+----------+---------+-----------+--------------+-----------+
| Income tax | | | | | | | (1,617) |
+----------------------------+----------+----------+----------+---------+-----------+--------------+-----------+
| Loss from continuing | | | | | | | (24,393) |
| operations year ended 31 | | | | | | | |
| March 2009 | | | | | | | |
+----------------------------+----------+----------+----------+---------+-----------+--------------+-----------+
| | | | | | | | |
+----------------------------+----------+----------+----------+---------+-----------+--------------+-----------+
| Balances at 31 March 2009 | | | | | | | |
| restated | | | | | | | |
+----------------------------+----------+----------+----------+---------+-----------+--------------+-----------+
| Segment assets | 85,281 | 28,379 | 27,026 | 18,219 | - | (3,296) | 155,609 |
+----------------------------+----------+----------+----------+---------+-----------+--------------+-----------+
| Investment in associate | 3,086 | - | - | - | - | - | 3,086 |
+----------------------------+----------+----------+----------+---------+-----------+--------------+-----------+
| Segment assets from | 88,367 | 28,379 | 27,026 | 18,219 | - | (3,296) | 158,695 |
| continuing operations | | | | | | | |
+----------------------------+----------+----------+----------+---------+-----------+--------------+-----------+
| Segment assets from | - | - | - | - | - | - | - |
| discontinued operations | | | | | | | |
+----------------------------+----------+----------+----------+---------+-----------+--------------+-----------+
| Segment assets | 88,367 | 28,379 | 27,026 | 18,219 | - | (3,296) | 158,695 |
+----------------------------+----------+----------+----------+---------+-----------+--------------+-----------+
| Segment liabilities | (46,096) | (28,269) | (49,261) | (1,145) | - | 6,818 | (117,953) |
+----------------------------+----------+----------+----------+---------+-----------+--------------+-----------+
| | | | | | | | |
+----------------------------+----------+----------+----------+---------+-----------+--------------+-----------+
| Capital expenditure | | | | | | | |
+----------------------------+----------+----------+----------+---------+-----------+--------------+-----------+
| - property, plant and | 519 | 515 | 266 | 425 | - | - | 1,725 |
| equipment | | | | | | | |
+----------------------------+----------+----------+----------+---------+-----------+--------------+-----------+
| - intangible | 145 | 218 | 90 | - | - | - | 453 |
+----------------------------+----------+----------+----------+---------+-----------+--------------+-----------+
| | | | | | | | |
+----------------------------+----------+----------+----------+---------+-----------+--------------+-----------+
| Depreciation | 2,502 | 1,003 | 980 | 573 | - | - | 5,058 |
+----------------------------+----------+----------+----------+---------+-----------+--------------+-----------+
| Amortisation | 105 | 2 | 280 | - | - | - | 387 |
+----------------------------+----------+----------+----------+---------+-----------+--------------+-----------+
| Impairment of fixed | 600 | 51 | 2,121 | 1,669 | - | - | 4,441 |
| property, plant and | | | | | | | |
| equipment | | | | | | | |
+----------------------------+----------+----------+----------+---------+-----------+--------------+-----------+
| Impairment of intangible | - | 68 | 5,695 | - | - | - | 5,763 |
| assets | | | | | | | |
+----------------------------+----------+----------+----------+---------+-----------+--------------+-----------+
2 Segmental information (continued)
The Group's information about its segmental assets (Non-current assets,
excluding deferred tax assets and other financial assets) and revenue by
customer destination are detailed below:
Geographical information
+-----------------------------+--------+--------+---+---------+---------+
| | Non-current | | Revenue by |
| | assets | | destination |
+-----------------------------+-----------------+---+-------------------+
| | 2010 | 2009 | | 2010 | 2009 |
+-----------------------------+--------+--------+---+---------+---------+
| | GBP000 | GBP000 | | GBP000 | GBP000 |
+-----------------------------+--------+--------+---+---------+---------+
| UK | 41,241 | 45,765 | | 81,818 | 97,642 |
+-----------------------------+--------+--------+---+---------+---------+
| USA | 7,856 | 9,169 | | 53,761 | 65,744 |
+-----------------------------+--------+--------+---+---------+---------+
| Europe | 14,105 | 15,106 | | 45,957 | 49,276 |
+-----------------------------+--------+--------+---+---------+---------+
| Rest of the world | 4,136 | 3,148 | | 18,616 | 4,255 |
+-----------------------------+--------+--------+---+---------+---------+
| | 67,338 | 73,188 | | 200,152 | 216,917 |
+-----------------------------+--------+--------+---+---------+---------+
+--------------------------------------------------+-------------------+---------------+
| | 2010 | 2009 |
+--------------------------------------------------+-------------------+---------------+
| | GBP000 | GBP000 |
+--------------------------------------------------+-------------------+---------------+
| Gift Wrap | 74,551 | 87,617 |
+--------------------------------------------------+-------------------+---------------+
| Books & Stationery | 34,251 | 37,200 |
+--------------------------------------------------+-------------------+---------------+
| Greetings Cards | 18,148 | 14,000 |
+--------------------------------------------------+-------------------+---------------+
| Bags & Boxes | 15,744 | 18,600 |
+--------------------------------------------------+-------------------+---------------+
| Crackers | 14,322 | 16,600 |
+--------------------------------------------------+-------------------+---------------+
| Albums and Frames | 10,367 | 10,649 |
+--------------------------------------------------+-------------------+---------------+
| Other | 32,769 | 32,251 |
+--------------------------------------------------+-------------------+---------------+
| Total | 200,152 | 216,917 |
+--------------------------------------------------+-------------------+---------------+
| | | |
+--------------------------------------------------+-------------------+---------------+
(1) Capital expenditure consists of additions of property, plant and equipment,
intangible assets and goodwill.
(2) No single customer accounts for over 10% of total revenue.
(3) Eliminations on the balance sheet consist of inter-segment balances, and
cash and bank borrowing adjustments between segments, and deferred tax assets of
GBP3,501,000 (2009: 3,070,000), income tax payable of GBP26,000 (2009:
GBP494,000).
(4) No operating segment has been aggregated in determining reportable
segments.
3 Prior year adjustments and reclassifications
Income Statement
Gain/loss on foreign exchange has been reclassified from Finance expenses to
Administrative expenses as Directors consider this a more appropriate
classification. The reclassification has decreased the 2009 profit before
interest and tax, and correspondingly, the finance expense by GBP409,000. There
is no impact on profit before tax.
Balance Sheet
During the year local management discovered that an overpayment had been made by
one of our insurers in respect of an insurance claim which a Dutch subsidiary
had submitted in respect of storm damage to its factory in 2007. We have been in
contact with the relevant insurer and in April 2010 repaid that element of the
claim, plus the interest totalling GBP725,000.
All the costs and proceeds of the claim were accounted for in the Financial
Statements for the year ended 31 March, 2008. With the related tax credit of
GBP185,000, the net reduction to reserves, when translated at 1 April, 2008 is
GBP470,000. There is no impact on the earnings per share for the year (2009:
Nil). At March 31, 2009, this is retranslated to be an adjustment of GBP540,000,
and the related GBP70,000 adjustment has been deducted from the translation
reserve in the Consolidated Statement of Comprehensive Income, and added to
current liabilities.
Finance lease liabilities have been moved from within 'Bank loans and
overdrafts' to 'Other financial liabilities'. These amounts are not material.
The changes in the 2008 and 2009 balance sheets are shown below:
+-----------------------------------+------------+------------+-----------+----------+----------+
| | 2009 | 2008 | | 2009 | 2008 |
+-----------------------------------+------------+------------+-----------+----------+----------+
| | previously | previously | | restated | restated |
+-----------------------------------+------------+------------+-----------+----------+----------+
| | stated | stated | Insurance | | |
+-----------------------------------+------------+------------+-----------+----------+----------+
| | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+-----------------------------------+------------+------------+-----------+----------+----------+
| Non-current assets | | | | | |
+-----------------------------------+------------+------------+-----------+----------+----------+
| Deferred tax assets | 2,885 | 4,169 | 185 | 3,070 | 4,354 |
+-----------------------------------+------------+------------+-----------+----------+----------+
| Other non-current assets | 73,188 | 81,521 | - | 73,188 | 81,521 |
+-----------------------------------+------------+------------+-----------+----------+----------+
| Total non-current assets | 76,073 | 85,690 | 185 | 76,258 | 85,875 |
+-----------------------------------+------------+------------+-----------+----------+----------+
| Total current assets | 82,437 | 94,410 | - | 82,437 | 94,410 |
+-----------------------------------+------------+------------+-----------+----------+----------+
| Total assets | 158,510 | 180,100 | 185 | 158,695 | 180,285 |
+-----------------------------------+------------+------------+-----------+----------+----------+
| Equity | | | | | |
+-----------------------------------+------------+------------+-----------+----------+----------+
| Share capital and share premium | 5,431 | 5,359 | - | 5,431 | 5,359 |
+-----------------------------------+------------+------------+-----------+----------+----------+
| Reserves | 16,447 | 15,263 | (70) | 16,377 | 15,263 |
+-----------------------------------+------------+------------+-----------+----------+----------+
| Retained earnings | 19,404 | 46,679 | (470) | 18,934 | 46,209 |
+-----------------------------------+------------+------------+-----------+----------+----------+
| Total equity attributable to the | 41,282 | 67,301 | (540) | 40,742 | 66,831 |
| owners of the Parent Company | | | | | |
+-----------------------------------+------------+------------+-----------+----------+----------+
| Total non-current liabilities | 17,216 | 10,746 | - | 17,216 | 10,746 |
+-----------------------------------+------------+------------+-----------+----------+----------+
| Total current liabilities | 100,012 | 102,053 | 725 | 100,737 | 102,708 |
+-----------------------------------+------------+------------+-----------+----------+----------+
| Total liabilities | 117,228 | 112,799 | 725 | 117,953 | 113,454 |
+-----------------------------------+------------+------------+-----------+----------+----------+
| Total equity and liabilities | 158,510 | 180,100 | 185 | 158,695 | 180,285 |
+-----------------------------------+------------+------------+-----------+----------+----------+
Bank loans and borrowings
Bank loans and borrowings in the prior year have been rotated to separate the
Asset Backed Loan that had previously been included has an element of the
overdraft.
4 Taxation
+------------------------------------+------+------+--------+------+--------+
| Recognised in the Income Statement | | | 2010 | | 2009 |
+------------------------------------+------+------+--------+------+--------+
| | | | GBP000 | | GBP000 |
+------------------------------------+------+------+--------+------+--------+
| Current tax expenses | | | | | |
+------------------------------------+------+------+--------+------+--------+
| Current year - UK corporation tax | | | - | | (30) |
+------------------------------------+------+------+--------+------+--------+
| Current year - foreign tax | | | 569 | | 295 |
+------------------------------------+------+------+--------+------+--------+
| Adjustments for prior years | | | (643) | | (458) |
+------------------------------------+------+------+--------+------+--------+
| | | | (74) | | (193) |
+------------------------------------+------+------+--------+------+--------+
| Deferred tax expense | | | | | |
+------------------------------------+------+------+--------+------+--------+
| Original and reversal of temporary | | | 79 | | (49) |
| differences | | | | | |
+------------------------------------+------+------+--------+------+--------+
| Adjustments in respect of previous | | | (184) | | 1,859 |
| periods | | | | | |
+------------------------------------+------+------+--------+------+--------+
| | | | (105) | | 1,810 |
+------------------------------------+------+------+--------+------+--------+
| Total tax in Income Statement | | | (179) | | 1,617 |
+------------------------------------+------+------+--------+------+--------+
+------------------------------------+------+------+--------+------+----------+
| Reconciliation of effective tax | | | 2010 | | 2009 |
| rate | | | | | |
+------------------------------------+------+------+--------+------+----------+
| | | | GBP000 | | GBP000 |
+------------------------------------+------+------+--------+------+----------+
| Profit/(loss) before tax | | | 525 | | (22,776) |
+------------------------------------+------+------+--------+------+----------+
| Tax using the UK corporation tax | | | 147 | | (6,377) |
| rate of 28% (2009:28%) | | | | | |
+------------------------------------+------+------+--------+------+----------+
| | | | | | |
+------------------------------------+------+------+--------+------+----------+
| Expenses not deductible for | | | 349 | | 369 |
| corporation tax purposes | | | | | |
+------------------------------------+------+------+--------+------+----------+
| Goodwill impairment not tax | | | - | | 2,159 |
| deductible | | | | | |
+------------------------------------+------+------+--------+------+----------+
| Recycle of translation gain on | | | (262) | | - |
| closure of subsidiary | | | | | |
+------------------------------------+------+------+--------+------+----------+
| Tax losses on which deferred tax | | | 479 | | 5,690 |
| has not been recognised | | | | | |
+------------------------------------+------+------+--------+------+----------+
| Non-taxable income | | | (80) | | (13) |
+------------------------------------+------+------+--------+------+----------+
| Differences between the accounting | | | - | | (100) |
| and tax cost of capital assets | | | | | |
| disposed | | | | | |
+------------------------------------+------+------+--------+------+----------+
| Tax credit on loss carry back at | | | - | | (1) |
| 30% | | | | | |
+------------------------------------+------+------+--------+------+----------+
| Differences between UK and | | | 15 | | (1,511) |
| overseas tax rates | | | | | |
+------------------------------------+------+------+--------+------+----------+
| Under/(over) provided in prior | | | (827) | | 1,401 |
| years | | | | | |
+------------------------------------+------+------+--------+------+----------+
| Total tax in Income Statement | | | (179) | | 1,617 |
+------------------------------------+------+------+--------+------+----------+
5 Exceptional items
+-----------------------------+---------+-----------+----------+----------+----------+---------+
| | Cost | Selling | Admin | Profit | Finance | Total |
| | of | | | or | | |
| | | | | loss | | |
+-----------------------------+---------+-----------+----------+----------+----------+---------+
| | sales | expenses | expenses | on | expenses | |
| | | | |disposal | | |
+-----------------------------+---------+-----------+----------+----------+----------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-----------------------------+---------+-----------+----------+----------+----------+---------+
| 2010 Continuing operations | | | | | | |
+-----------------------------+---------+-----------+----------+----------+----------+---------+
| Impairment in respect of | | | | | | |
| restructuring of | | | | | | |
| operational activities: | | | | | | |
+-----------------------------+---------+-----------+----------+----------+----------+---------+
| Fixed assets within German | 622 | - | 145 | - | - | 767 |
| subsidiary (note a) | | | | | | |
+-----------------------------+---------+-----------+----------+----------+----------+---------+
| Impairment of stock at | 631 | - | - | - | - | 631 |
| German subsidiary (note a) | | | | | | |
+-----------------------------+---------+-----------+----------+----------+----------+---------+
| Leasehold improvements and | - | - | 327 | - | - | 327 |
| fittings at Hatfield Head | | | | | | |
| office (note b) | | | | | | |
+-----------------------------+---------+-----------+----------+----------+----------+---------+
| Total impairments | 1253 | | 472 | | | 1725 |
| | | - | | - | - | |
+-----------------------------+---------+-----------+----------+----------+----------+---------+
| Other costs | | | | | | |
+-----------------------------+---------+-----------+----------+----------+----------+---------+
| Restructuring of | | | | | | |
| operational activities | | | | | | |
+-----------------------------+---------+-----------+----------+----------+----------+---------+
| - lease provision (note b) | - | - | 1,300 | - | - | 1,300 |
+-----------------------------+---------+-----------+----------+----------+----------+---------+
| - redundancies (note c) | - | 160 | 554 | - | - | 714 |
+-----------------------------+---------+-----------+----------+----------+----------+---------+
| Recycling of translation | - | - | - | (907) | - | (907) |
| reserve on closure of | | | | | | |
| subsidiary (note d) | | | | | | |
+-----------------------------+---------+-----------+----------+----------+----------+---------+
| Asia supplier disruption - | (333) | - | - | - | - | (333) |
| insurance proceeds (note e) | | | | | | |
+-----------------------------+---------+-----------+----------+----------+----------+---------+
| | 920 | 160 | 2,326 | (907) | - | 2,499 |
+-----------------------------+---------+-----------+----------+----------+----------+---------+
| Income tax charge | | | | | | (828) |
+-----------------------------+---------+-----------+----------+----------+----------+---------+
| | | | | | | 1,671 |
+-----------------------------+---------+-----------+----------+----------+----------+---------+
| | | | | | | |
+-----------------------------+---------+-----------+----------+----------+----------+---------+
| 2009 Continuing operations | | | | | | |
+-----------------------------+---------+-----------+----------+----------+----------+---------+
| Impairment in respect of | | | | | | |
| restructuring of | | | | | | |
| operational activities: | | | | | | |
+-----------------------------+---------+-----------+----------+----------+----------+---------+
| US goodwill | - | - | 5,695 | - | - | 5,695 |
+-----------------------------+---------+-----------+----------+----------+----------+---------+
| US fixed assets | 2,121 | - | - | - | - | 2,121 |
+-----------------------------+---------+-----------+----------+----------+----------+---------+
| US engravings | 911 | - | - | - | - | 911 |
+-----------------------------+---------+-----------+----------+----------+----------+---------+
| Latvian printing press | 1,669 | - | - | - | - | 1,669 |
+-----------------------------+---------+-----------+----------+----------+----------+---------+
| UK fixed assets | 600 | - | - | - | - | 600 |
+-----------------------------+---------+-----------+----------+----------+----------+---------+
| | 5,301 | - | 5,695 | - | - | 10,996 |
+-----------------------------+---------+-----------+----------+----------+----------+---------+
| Other costs | | | | | | |
+-----------------------------+---------+-----------+----------+----------+----------+---------+
| Restructuring of | 1,693 | 277 | 1,067 | 16 | - | 3,053 |
| operational activities | | | | | | |
+-----------------------------+---------+-----------+----------+----------+----------+---------+
| Debtors in administration | 252 | 2,889 | - | - | - | 3,141 |
+-----------------------------+---------+-----------+----------+----------+----------+---------+
| Financial restructuring | - | - | 1,220 | - | 1,417 | 2,637 |
+-----------------------------+---------+-----------+----------+----------+----------+---------+
| Restructuring of management | 157 | - | 1,416 | - | - | 1,573 |
| functions | | | | | | |
+-----------------------------+---------+-----------+----------+----------+----------+---------+
| Asia supplier disruption | 957 | 40 | 33 | - | 19 | 1,049 |
+-----------------------------+---------+-----------+----------+----------+----------+---------+
| | 8,360 | 3,206 | 9,431 | 16 | 1,436 | 22,449 |
+-----------------------------+---------+-----------+----------+----------+----------+---------+
| Income tax credit | | | | | | 1,453 |
+-----------------------------+---------+-----------+----------+----------+----------+---------+
| | | | | | | 23,902 |
+-----------------------------+---------+-----------+----------+----------+----------+---------+
Year ended 31 March 2010
(a) As explained in note 13, since the year end, the Group have taken the
decision to close its German subsidiary, and have hence impaired fixed assets,
being printing equipment and fittings totalling GBP767,000 to the Directors'
estimate of its fair value on sale less costs of sale, which net to GBPNil. In
addition, the Group has reviewed the carrying value of the related inventory and
have provided a further GBP631,000. All other assets and liabilities are deemed
sufficiently provided.
(b) During the year the Group announced the relocation of its IG UK design
studio from the Hatfield head office to the IG UK site in Wales. A lease
provision in respect of the Hatfield offices was therefore made of
GBP1.3million, of which GBP200,000 was utilised during the year to 31 March,
2010. In addition, the leasehold improvements and fittings have been impaired to
the Directors' estimate of fair value on sale less cost of sale, being an
impairment of GBP327,000.
(c) During the year the Board took the decision to relocate the operations of
the Weltec business in Holland into Anchor BV and, in the UK, to relocate the
Gift Design business into Scoop Design. These, and other minor restructuring,
incurred costs of GBP714,000 mainly in staff redundancy, and some equipment
operational contracts.
(d) In early 2008 the Group decided to close the Latvian business, with the
final few staff leaving and the premises shut during this current year. The
Latvian companies are now in administration and hence, in accordance with IAS 21
the element of the translation reserve relating to that business has been
recycled through the Income Statement (GBP907,000).
5 Exceptional items (continued)
(e) In relation to the fire incurred at one of our Asia suppliers last year
(see below), the Group has submitted an insurance claim. To date we have
received an interim payment of GBP158,000, and the Directors are virtually
certain of receiving an additional payment of at least GBP175,000, which has
been recognised as a receivable in these Financial Statements.
Year ended 31 March 2009
In the US we closed our Party business, and the Board impaired the goodwill
acquired on Glitterwrap leading to a charge to the income statement of GBP5.7
million, and we also impaired some property, plant and equipment totalling
GBP5.3 million across the Group.
The restructuring and refocusing the business in the UK and Latvia was largely
completed by March 2009, incurring GBP2.6 million of staff redundancy costs, and
a further GBP0.5 million on write downs of stock transferred from Latvia and the
disposal and relocation of assets.
Due to the difficult economic climate in 2009 the Group experienced a number of
mainly UK based high street retailers going into administration, causing GBP3.1
million of inventory and debtors to be written off.
To restructure its Bank financing the Group incurred substantial additional bank
facility fees and related charges of GBP1.4 million, with a further GBP1.2
million being incurred on advisors to both the Bank and the Board.
The Group restructured the Board and strengthened the senior financial
management both centrally and at an operating company level. The Group incurred
termination fees of GBP1.2 million, just under half of which relate to Directors
with a further GBP0.4 million incurred in respect of recruitment costs and
interim senior management.
A disruption of supply of goods from Asian subcontractors during the peak supply
period cost the Group GBP1.0 million. One supplier suffered a fire and two
experienced severe financial difficulties. The costs relate to incremental
expenditure incurred by switching to alternative suppliers and for air freight
to customers.
The income tax charge for the year of GBP1,453,000 is due to a provision of
GBP1,708,000 against US losses brought forward due to the restructuring of US
manufacturing activities. This is offset by GBP255,000 of net credits from the
other business segments.
6 Property, plant and equipment
+--------------------------+----------+----------+-----------+-----------+----------+----------+----------+
| | | | | Plant | Fixtures | Motor | Total |
| | | | | and | | | |
+--------------------------+----------+----------+-----------+-----------+----------+----------+----------+
| | |Freehold |Leasehold | equipment | and | Vehicles | |
+--------------------------+----------+----------+-----------+-----------+----------+----------+----------+
| | | | | | fittings | | |
+--------------------------+----------+----------+-----------+-----------+----------+----------+----------+
| | | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+--------------------------+----------+----------+-----------+-----------+----------+----------+----------+
| Cost | | | | | | | |
+--------------------------+----------+----------+-----------+-----------+----------+----------+----------+
| Balance at 1 April 2008 | | 20,945 | 6,979 | 43,333 | 5,982 | 1,479 | 78,718 |
+--------------------------+----------+----------+-----------+-----------+----------+----------+----------+
| Additions | | 300 | 257 | 879 | 280 | 9 | 1,725 |
+--------------------------+----------+----------+-----------+-----------+----------+----------+----------+
| Disposals | | (174) | (2,106) | (1,185) | (304) | (672) | (4,441) |
+--------------------------+----------+----------+-----------+-----------+----------+----------+----------+
| Transfers between | | - | - | (219) | 219 | - | - |
| categories | | | | | | | |
+--------------------------+----------+----------+-----------+-----------+----------+----------+----------+
| Effect of movements in | | 1,112 | 2,194 | 5,284 | 2,012 | 60 | 10,662 |
| foreign exchange | | | | | | | |
+--------------------------+----------+----------+-----------+-----------+----------+----------+----------+
| Balance at 31 March 2009 | | 22,183 | 7,324 | 48,092 | 8,189 | 876 | 86,664 |
+--------------------------+----------+----------+-----------+-----------+----------+----------+----------+
| Balance at 1 April 2009 | | 22,183 | 7,324 | 48,092 | 8,189 | 876 | 86,664 |
+--------------------------+----------+----------+-----------+-----------+----------+----------+----------+
| Additions | | 220 | - | 286 | 589 | 26 | 1,121 |
+--------------------------+----------+----------+-----------+-----------+----------+----------+----------+
| Acquisition through | | - | - | 129 | 100 | 68 | 297 |
| business combinations | | | | | | | |
+--------------------------+----------+----------+-----------+-----------+----------+----------+----------+
| Disposals | | (392) | (31) | (624) | (639) | (234) | (1,920) |
+--------------------------+----------+----------+-----------+-----------+----------+----------+----------+
| Transfers between | | (22) | 1,455 | 1,545 | (3,620) | 231 | (411) |
| categories, and to | | | | | | | |
| intangibles | | | | | | | |
+--------------------------+----------+----------+-----------+-----------+----------+----------+----------+
| Effect of movements in | | (223) | (312) | (784) | (299) | 21 | (1,597) |
| foreign exchange | | | | | | | |
+--------------------------+----------+----------+-----------+-----------+----------+----------+----------+
| Balance at 31 March 2010 | | 21,766 | 8,436 | 48,644 | 4,320 | 988 | 84,154 |
+--------------------------+----------+----------+-----------+-----------+----------+----------+----------+
| Depreciation and | | | | | | | |
| impairment | | | | | | | |
+--------------------------+----------+----------+-----------+-----------+----------+----------+----------+
| Balance as at 1 April | | (5,692) | (1,372) | (23,948) | (3,847) | (988) | (35,847) |
| 2008 | | | | | | | |
+--------------------------+----------+----------+-----------+-----------+----------+----------+----------+
| Depreciation charge for | | (856) | (295) | (2,864) | (839) | (204) | (5,058) |
| the year | | | | | | | |
+--------------------------+----------+----------+-----------+-----------+----------+----------+----------+
| Disposals | | 118 | 1,737 | 1,183 | 261 | 506 | 3,805 |
+--------------------------+----------+----------+-----------+-----------+----------+----------+----------+
| Impairment | | - | (30) | (4,398) | (11) | (2) | (4,441) |
+--------------------------+----------+----------+-----------+-----------+----------+----------+----------+
| Transfers between | | - | - | 38 | (38) | - | - |
| categories | | | | | | | |
+--------------------------+----------+----------+-----------+-----------+----------+----------+----------+
| Effect of movements in | | (106) | (410) | (3,231) | (1,601) | (53) | (5,401) |
| foreign exchange | | | | | | | |
+--------------------------+----------+----------+-----------+-----------+----------+----------+----------+
| Balance at 31 March 2009 | | (6,536) | (370) | (33,220) | (6,075) | (741) | (46,942) |
+--------------------------+----------+----------+-----------+-----------+----------+----------+----------+
| Balance as at 1 April | | (6,536) | (370) | (33,220) | (6,075) | (741) | (46,942) |
| 2009 | | | | | | | |
+--------------------------+----------+----------+-----------+-----------+----------+----------+----------+
| Depreciation charge for | | (894) | (349) | (2,387) | (742) | (171) | (4,543) |
| the year | | | | | | | |
+--------------------------+----------+----------+-----------+-----------+----------+----------+----------+
| Disposals | | 231 | 31 | 540 | 616 | 222 | 1,640 |
+--------------------------+----------+----------+-----------+-----------+----------+----------+----------+
| Impairment | | - | (290) | (622) | (182) | - | (1,094) |
+--------------------------+----------+----------+-----------+-----------+----------+----------+----------+
| Transfers between | | 3 | (1,389) | (1,151) | 2,804 | (28) | 239 |
| categories, and to | | | | | | | |
| intangibles | | | | | | | |
+--------------------------+----------+----------+-----------+-----------+----------+----------+----------+
| Effect of movements in | | 25 | (15) | 509 | 230 | (4) | 745 |
| foreign exchange | | | | | | | |
+--------------------------+----------+----------+-----------+-----------+----------+----------+----------+
| Balance at 31 March 2010 | | (7,171) | (2,382) | (36,331) | (3,349) | (722) | (49,955) |
+--------------------------+----------+----------+-----------+-----------+----------+----------+----------+
| Net book value | | | | | | | |
+--------------------------+----------+----------+-----------+-----------+----------+----------+----------+
| At 31st March 2009 | | 15,647 | 6,954 | 14,872 | 2,114 | 135 | 39,722 |
+--------------------------+----------+----------+-----------+-----------+----------+----------+----------+
| At 31st March 2010 | | 14,595 | 6,054 | 12,313 | 971 | 266 | 34,199 |
+--------------------------+----------+----------+-----------+-----------+----------+----------+----------+
Depreciation is charged to either cost of sales, selling costs or administration
costs within the Income Statement depending on the department to which the
assets relate.
7 Intangible assets
+------------------------------+---+----------+----------+----------+----------+-------------+----------+----------+
| | | | | Computer | | Other | | |
+------------------------------+---+----------+----------+----------+----------+-------------+----------+----------+
| | | Goodwill | | software | | intangibles | | Total |
+------------------------------+---+----------+----------+----------+----------+-------------+----------+----------+
| | | GBP000 | | GBP000 | | GBP000 | | GBP000 |
+------------------------------+---+----------+----------+----------+----------+-------------+----------+----------+
| Cost | | | | | | | | |
+------------------------------+---+----------+----------+----------+----------+-------------+----------+----------+
| Balance at 1 April 2008 | | 37,235 | | 1,202 | | 532 | | 38,969 |
+------------------------------+---+----------+----------+----------+----------+-------------+----------+----------+
| Additions | | - | | 453 | | - | | 453 |
+------------------------------+---+----------+----------+----------+----------+-------------+----------+----------+
| Disposals | | - | | - | | (71) | | (71) |
+------------------------------+---+----------+----------+----------+----------+-------------+----------+----------+
| Effect of movements in | | 1,657 | | 184 | | 10 | | 1,851 |
| foreign exchange | | | | | | | | |
+------------------------------+---+----------+----------+----------+----------+-------------+----------+----------+
| Balance at 31 March 2009 | | 38,892 | | 1,839 | | 471 | | 41,202 |
+------------------------------+---+----------+----------+----------+----------+-------------+----------+----------+
| Balance at 1 April 2009 | | 38,892 | | 1,839 | | 471 | | 41,202 |
+------------------------------+---+----------+----------+----------+----------+-------------+----------+----------+
| Acquisitions through | | 1,023 | | - | | 18 | | 1,041 |
| business combinations | | | | | | | | |
+------------------------------+---+----------+----------+----------+----------+-------------+----------+----------+
| Reclassified to / from property | - | | 411 | | - | | 411 |
| plant and machinery | | | | | | | |
+----------------------------------+----------+----------+----------+----------+-------------+----------+----------+
| Additions | | - | | 646 | | - | | 646 |
+------------------------------+---+----------+----------+----------+----------+-------------+----------+----------+
| Disposals | | - | | (65) | | - | | (65) |
+------------------------------+---+----------+----------+----------+----------+-------------+----------+----------+
| Effect of movements in | | 1,043 | | (13) | | 5 | | 1,035 |
| foreign exchange | | | | | | | | |
+------------------------------+---+----------+----------+----------+----------+-------------+----------+----------+
| Balance at 31 March 2010 | | 40,958 | | 2,818 | | 494 | | 44,270 |
+------------------------------+---+----------+----------+----------+----------+-------------+----------+----------+
| Amortisation and impairment | | | | | | | | |
+------------------------------+---+----------+----------+----------+----------+-------------+----------+----------+
| Balance at 1 April 2008 | | (2,489) | | (883) | | (53) | | (3,425) |
+------------------------------+---+----------+----------+----------+----------+-------------+----------+----------+
| Amortisation for the year | | - | | (338) | | (49) | | (387) |
+------------------------------+---+----------+----------+----------+----------+-------------+----------+----------+
| Impairments | | (5,705) | | - | | (58) | | (5,763) |
+------------------------------+---+----------+----------+----------+----------+-------------+----------+----------+
| Disposals | | - | | - | | 71 | | 71 |
+------------------------------+---+----------+----------+----------+----------+-------------+----------+----------+
| Effect of movements in | | (1,179) | | (132) | | (7) | | (1,318) |
| foreign exchange | | | | | | | | |
+------------------------------+---+----------+----------+----------+----------+-------------+----------+----------+
| Balance at 31 March 2009 | | (9,373) | | (1,353) | | (96) | | (10,822) |
+------------------------------+---+----------+----------+----------+----------+-------------+----------+----------+
| Balance at 1 April 2009 | | (9,373) | | (1,353) | | (96) | | (10,822) |
+------------------------------+---+----------+----------+----------+----------+-------------+----------+----------+
| Amortisation for the year | | - | | (239) | | (48) | | (287) |
+------------------------------+---+----------+----------+----------+----------+-------------+----------+----------+
| Reclassified to / from property | - | | (239) | | - | | (239) |
| plant and machinery | | | | | | | |
+----------------------------------+----------+----------+----------+----------+-------------+----------+----------+
| Disposals | | - | | 65 | | - | | 65 |
+------------------------------+---+----------+----------+----------+----------+-------------+----------+----------+
| Effect of movements in | | 135 | | 17 | | - | | 152 |
| foreign exchange | | | | | | | | |
+------------------------------+---+----------+----------+----------+----------+-------------+----------+----------+
| Balance at 31 March 2010 | | (9,238) | | (1,749) | | (144) | | (11,131) |
+------------------------------+---+----------+----------+----------+----------+-------------+----------+----------+
| | | | | | | | | |
+------------------------------+---+----------+----------+----------+----------+-------------+----------+----------+
| Net book value | | | | | | | | |
+------------------------------+---+----------+----------+----------+----------+-------------+----------+----------+
| At 31 March 2009 | | 29,519 | | 486 | | 375 | | 30,380 |
+------------------------------+---+----------+----------+----------+----------+-------------+----------+----------+
| At 31 March 2010 | | 31,720 | | 1,069 | | 350 | | 33,139 |
+------------------------------+---+----------+----------+----------+----------+-------------+----------+----------+
8 Acquisition of subsidiaries
+------------------------------------------------------------+---------+
| Cash paid on acquisition | 2010 |
+------------------------------------------------------------+---------+
| | GBP000 |
+------------------------------------------------------------+---------+
| Deferred consideration of Alligator (note a) | 750 |
+------------------------------------------------------------+---------+
| Overdraft acquired on the change of control in Artwrap | 3,168 |
| (note b) | |
+------------------------------------------------------------+---------+
| Total cash outlay | 3,918 |
+------------------------------------------------------------+---------+
a) On 6 April 2006, the Group acquired 100% of the issued share capital of
Alligator Books Ltd ("Alligator"), a publisher and distributor of children's
books and stationery. Initial consideration of GBP2,569,000 (including costs)
was paid, GBP2,319,000 in cash and GBP250,000 by the issue of 62,703 new
ordinary shares. During the year ended 31 March 2008 a payment of GBP3,350,000
was made, GBP1,850,000 in cash and GBP1,500,000 by the issue of 366,505 new
ordinary shares.
The final consideration of GBP750,000 in cash was paid on 1 July 2009.
b) Consolidation of Artwrap Pty Ltd
On 3 October 2007, the Group acquired 50% of the ordinary shares in Artwrap
Pty Ltd ('Artwrap'), a designer and distributor of gift wrap and greetings
products based in Australia. Initial consideration of GBP1,701,000 was paid in
October 2007 and deferred consideration of GBP781,000 was paid in August 2008.
The purchase agreement contained an option for the Group to buy any of the
remaining 50% of its share. Previously the Group had waived all rights to this
option. However, this waiver expired on 31 July 2009, and accordingly from 1
August 2009, Artwrap has been consolidated as a subsidiary and the remaining 50%
interest is shown as a Non-controlling interest. Previously, Artwrap had been
recorded as an associate of the Group. The option is not considered by the
Directors to hold material value.
The fair values of the identifiable assets and liabilities of Artwrap, which
were the same as the book values, as at 1 August 2009, the date of consolidation
were:
+--------------------------------------------------------+-------------+
| | Fair value |
| | and book |
| | value on 1 |
| | August 2009 |
+--------------------------------------------------------+-------------+
| | GBP000 |
+--------------------------------------------------------+-------------+
| Intangible assets | 18 |
+--------------------------------------------------------+-------------+
| Property, plant and equipment | 297 |
+--------------------------------------------------------+-------------+
| Deferred tax assets | 282 |
+--------------------------------------------------------+-------------+
| Inventory | 6,809 |
+--------------------------------------------------------+-------------+
| Trade and other receivables | 2,009 |
+--------------------------------------------------------+-------------+
| | 9,415 |
+--------------------------------------------------------+-------------+
| Bank overdrafts | (3,168) |
+--------------------------------------------------------+-------------+
| Trade and other payables | (1,911) |
+--------------------------------------------------------+-------------+
| | (5,079) |
+--------------------------------------------------------+-------------+
| | |
+--------------------------------------------------------+-------------+
| Net assets | 4,336 |
+--------------------------------------------------------+-------------+
| 50% interest on consolidation | 2,168 |
+--------------------------------------------------------+-------------+
| Goodwill arising on consolidation | 1,023 |
+--------------------------------------------------------+-------------+
| Total cost of investment | 3,191 |
+--------------------------------------------------------+-------------+
9 Cash and cash equivalents/bank overdrafts
+----------------------------+--------+--------+---------+-----+----------+
| | | | 2010 | | 2009 |
+----------------------------+--------+--------+---------+-----+----------+
| | | | | | restated |
+----------------------------+--------+--------+---------+-----+----------+
| | | | GBP000 | | GBP000 |
+----------------------------+--------+--------+---------+-----+----------+
| Cash and cash equivalents | | | 2,045 | | 2,060 |
+----------------------------+--------+--------+---------+-----+----------+
| Bank overdrafts | | | (3,038) | | (47,435) |
+----------------------------+--------+--------+---------+-----+----------+
| Cash and cash equivalents per Cash | | (993) | | (45,375) |
| Flow Statement | | | | |
+----------------------------+--------+--------+---------+-----+----------+
9 Cash and cash equivalents/bank overdrafts (continued)
Net Debt
+----------------------------+--------+--------+---------+-----+----------+
| | | | 2010 | | 2009 |
+----------------------------+--------+--------+---------+-----+----------+
| | | | GBP000 | | GBP000 |
+----------------------------+--------+--------+---------+-----+----------+
| Cash and cash equivalents | | | 2,045 | | 2,060 |
+----------------------------+--------+--------+---------+-----+----------+
| Bank loans and overdrafts | | | (3,038) | | (47,435) |
| (note 10) | | | | | |
+----------------------------+--------+--------+---------+-----+----------+
| Net Debt as used in the | | | (993) | | (45,375) |
| Financial Review | | | | | |
+----------------------------+--------+--------+---------+-----+----------+
10 Loans and borrowings
This note provides information about the contractual terms of the Group's
interest-bearing loans and borrowings.
+----------------------------+--------+-------+---------+----------+----------+
| | | | 2010 | 2009 | 2008 |
+----------------------------+--------+-------+---------+----------+----------+
| | | | | restated | restated |
+----------------------------+--------+-------+---------+----------+----------+
| | | | GBP000 | GBP000 | GBP000 |
+----------------------------+--------+-------+---------+----------+----------+
| Non-current liabilities | | | | | |
+----------------------------+--------+-------+---------+----------+----------+
| Secured bank loans (see | | | 9,397 | 11,143 | 1,612 |
| below) | | | | | |
+----------------------------+--------+-------+---------+----------+----------+
| Other loans | | | - | - | 203 |
+----------------------------+--------+-------+---------+----------+----------+
| | | | 9,397 | 11,143 | 1,815 |
+----------------------------+--------+-------+---------+----------+----------+
| | | | | | |
+----------------------------+--------+-------+---------+----------+----------+
| Current liabilities | | | | | |
+----------------------------+--------+-------+---------+----------+----------+
| Asset backed loan | | | 8,760 | 10,916 | - |
+----------------------------+--------+-------+---------+----------+----------+
| Revolving credit | | | 28,625 | - | - |
| facilities | | | | | |
+----------------------------+--------+-------+---------+----------+----------+
| Current portion of secured bank | | 1,070 | 1,080 | 193 |
| loans (see below) | | | | |
+-------------------------------------+-------+---------+----------+----------+
| Bank loans and borrowings | | | 38,455 | 11,996 | 193 |
+----------------------------+--------+-------+---------+----------+----------+
The Asset backed loans are secured on the inventory and receivables in the
larger business units within the UK and Europe
business segments.
The revolving credit facilities were put in place during the year to replace
part of the overdraft with the principal bank. It is secured on the assets of
the Group, in the same way as the bank overdraft above. The interest rate is
2.5% over LIBOR. The facilities are drawn for periods from one day up to 6
months.
11 Earnings per share
+----------------------------+--------+--------+--------+-----+---------+
| | | | 2010 | | 2009 |
+----------------------------+--------+--------+--------+-----+---------+
| | | | | | |
+----------------------------+--------+--------+--------+-----+---------+
| Adjusted earnings/(loss) per share | | 3.4p | | (1.0p) |
| excluding exceptional items and | | | | |
| discontinued operations | | | | |
+-------------------------------------+--------+--------+-----+---------+
| Loss per share on | | | (3.3p) | | (49.8p) |
| exceptional items | | | | | |
+----------------------------+--------+--------+--------+-----+---------+
| Loss per share on | | | - | | (8.2p) |
| discontinued operations | | | | | |
+----------------------------+--------+--------+--------+-----+---------+
| Basic earnings/ (loss) per | | | 0.1p | | (59.0p) |
| share | | | | | |
+----------------------------+--------+--------+--------+-----+---------+
| Diluted earnings / (loss) | | | 0.1p | | (59.0p) |
| per share | | | | | |
+----------------------------+--------+--------+--------+-----+---------+
The basic earnings per share is based on the profit attributable to the owners
of the Parent Company of GBP55,000 (2009: GBP28,339,000 loss) and the weighted
average number of ordinary shares in issue of 50,375,104 (2009: 48,017,616)
calculated as follows:
+-------------------------------------+----------+-------+--------+----+--------+
| Weighted average number of shares in thousands | | 2010 | | 2009 |
| of shares | | | | |
+------------------------------------------------+-------+--------+----+--------+
| Issued ordinary shares at 1 April | | | 48,498 | | 47,057 |
+-------------------------------------+----------+-------+--------+----+--------+
| Shares issued in respect of | | | 1,876 | | 959 |
| acquisitions | | | | | |
+-------------------------------------+----------+-------+--------+----+--------+
| Shares issued in respect of exercising of | | 1 | | 2 |
| share options | | | | |
+------------------------------------------------+-------+--------+----+--------+
| Weighted average number of shares at 31 March | | 50,375 | | 48,018 |
+-------------------------------------+----------+-------+--------+----+--------+
Adjusted basic loss per share excludes exceptional items charged of GBP2,499,000
(2009 restated: GBP22,449,000), the tax relief attributable to those items of
GBP828,000 (2009: GBP1,453,000 charge), and the loss on discontinued operations
(net of tax) of GBPNil
(2009 : GBP3,946,000).
12 Related parties
Identity of related parties
During the year ended 31 March 2010 the Group made sales of goods of GBP193,000
(2009: GBP266,000) to AB Alrick Hedlund. AB Alrick Hedlund is under the ultimate
control of the Hedlund family. The Group also made sales of goods of GBP148,000
(2009: GBP119,000) to Hedlunds Pappers Industri AB. SA Hedlund is a director of
Hedlunds Pappers Industri AB which is under the ultimate control of the Hedlund
family. The Group made sales of goods of GBP36,000 (2009: GBPNil) to Festive
Productions Limited, a subsidiary undertaking of Malios AG, a company under the
ultimate control of the Hedlund family. The Group made no purchase of goods
from Festive Productions Limited in the year (2009: GBP225,000). The Group also
made sales of goods of GBP3,000 to Mrs L Hedlund, who is the wife of Mr SA
Hedlund.
At 31 March 2010, AB Alrick Hedlund owed the Group GBP6,000 (2009: GBP60,000).
Hedlunds Pappers Industri AB owed the Group GBP2,000 (2009: GBP115,000). Festive
Productions Limited owed the Group GBP11,000 (2009: GBPnil).
The above trading takes place in the ordinary course of business and on normal
commercial terms.
Other related party transactions
Directors of the Company and their immediate relatives have an interest in 55
percent (2009: 55 percent) of the voting shares of the Company. The
shareholdings of Directors are shown in the Director's report, no shares were
issued to Directors during the year (2009: Nil).
13 Post balance sheet events
Subsequent to the year end, in July 2010, the Board took the difficult decision
to close the Eickpack business that it bought in 2007. It has made losses since
its acquisition, and despite investing extra management time over the last year,
and further sales resource during this calendar year, there are insufficient
indicators that a sustained improvement will be made. Since this closure
occurred after the year end, it is not disclosed as a discontinued operation in
these financial statements, but does require the Board to reconsider the
carrying value of the assets. As a result it has impaired the property, plant
and equipment and stock by GBP1.4million.
The results to 31 March 2010 have included the following in respect of Eickpack:
Revenue of GBP2.5 million, Gross profit of GBP0.1 million, Operating loss of
GBP0.4 million, Finance expense of GBP0.1 million, Loss before tax of GBP0.5
million, and Exceptional Items of GBP1.4 million.
14. Preliminary information
The financial information in the preliminary statement of results does not
constitute the Group's statutory accounts for the year ended 31 March 2010, but
is derived from those accounts and the accompanying Directors' report. Statutory
accounts for the year ended 31 March 2010 will be delivered to the Registrar of
Companies following the Company's Annual General Meeting. The auditors have
reported on those accounts; their report was unqualified and did not contain
statements under Section 498 (2) or Section 498 (3) of the Companies Act 2006.
The financial statements, and this preliminary statement, of the Group for the
year ended 31 March 2010 were authorised for issue by the Board of Directors on
14 July 2010 and the balance sheet was signed on behalf of the Board by S. Tye
and P. Fineman.
The statutory accounts have been delivered to the Registrar of Companies in
respect of the year ended 31 March 2009. The report of the auditors was
unqualified and did not contain statements under Section 237 (2) or (3) of the
Companies Act 1985.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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