Immediate release 8 December 2003
First Half Profits Increase by 24*% at International Greetings
Company confident for full year
Dividend up 15%
International Greetings plc, the leading designer and manufacturer of private
label greetings products and licensed stationery, today announced interim
results for the six months ended 30 September 2003.
Highlights
* Turnover up 9% to �53.5m (2002: �49.0m)
* Pre- tax profits up 24% to � 5.3*m (2002: �4.3m)
* Earnings per share up 24% at 8.8p* (2002: 7.1p)
* Acquisition of Hoomark leads development into continental Europe
* Licenced Christmas decorations business established
* Company optimistic for full year
* Interim dividend up 15% at 1.5p (2002:1.3p)
* Excluding exceptional item of �684,000 for costs relating to start up of
licenced Christmas decorations business
Nick Fisher, Joint Chief Executive commented: "In the first half we have seen a
strong underlying performance from our core business and the trading outlook
remains good. We are optimistic about the full year.
"The Hoomark acquisition provides us with a strong platform to develop the
continental European market, where we see substantial potential. We are
delighted to have further strengthened our relationship with Disney with the
acquisition of its pan-European licence for character Christmas decorations. We
are excited by both these developments."
-Ends-
For further information, please contact:
International Greetings
Nick Fisher, Joint Chief Executive Tel: 01707 630 630
Edelman Financial
Michael Henman Tel: 020 7344 1345
James Horsman Tel: 020 7344 1207
Chairman's Statement
I am delighted to report an excellent set of interim results for the six months
to 30th September 2003. Turnover for the period has increased by 9% to �53.5m.
Improvements in operating efficiency and continuing strong cash management have
resulted in an increase in operating profit* of 14% to �5.4m. Profit before
taxation* and earnings per share* both increased by 24% to �5.3m and 8.8p
respectively.
I am pleased to announce the recent introduction of a new product category into
our portfolio, licensed Christmas decorations. As a result of the strength of
our relationship with Disney Consumer Products, an opportunity arose in
September to acquire a Pan-European licence for this product category,
previously held by a licensee which had gone into liquidation. The exceptional
item of �684,000 represents the one-off costs associated with obtaining the
licence and personnel related costs incurred in establishing the business. We
expect this division to have a minimal impact on our results for the full year
to 31st March 2004, but are confident that this new product category will
deliver both turnover and profit growth next year.
We recently announced the acquisition of Hoomark Gift-Wrap Partners BV, a gift
wrap manufacturer based in Holland. This deal represents a major step forward
in our strategic development into mainland Europe, and provides the opportunity
to supply not only gift wrap, but all of the Group's product categories into
this important marketplace. Due to the seasonality of the business, we
anticipate that Hoomark will make a small loss for the period from the date of
acquisition (20th November 2003) to 31st March 2004, but will make a positive
contribution to Group profits in future years.
Licensed merchandise continues to represent an important part of our business,
and during the period the results from sales of the new film releases, the
Incredible Hulk and Disney's Finding Nemo, have met our expectations. With
continuing promotional activity and video releases leading into the Christmas
period, we expect consumer demand for licensed product to continue during the
second half of our financial year.
Due to the seasonality of our business, we are now actively engaged in planning
customers' ranges and developing new designs and products which will be
delivered during the next financial year. With the additions of both the
Hoomark and Christmas decorations divisions, and the continuing strength of our
existing businesses, we expect an exciting year ahead for International
Greetings.
At this time of year, having completed the majority of our Christmas deliveries,
we are encouraged by the trading forecasts for our products by our customers,
and are optimistic about our full year's performance. Your Board is therefore
proposing a dividend of 1.5p per share, an increase of 15% over last year. The
dividend will be paid on 15 January 2004 to all shareholders on the register on
19 December 2003.
John Elfed Jones CBE DL
Chairman
8 December 2003
* excluding exceptional item of �684,000
International Greetings PLC
Consolidated profit and loss account
for the 6 months to 30th September 2003
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
30th September 2003 30th September 2002 31st March 2003
Note �000 �000 �000
Turnover 53,471 48,950 113,732
_______________________________________________________________________________________
Operating profit before
exceptional item 5,444 4,790 11,621
Exceptional item 2 (684) - -
_______________________________________________________________________________________
Operating profit 4,760 4,790 11,621
Net interest payable (154) (531) (690)
_______________________________________________________________________________________
Profit before taxation 4,606 4,259 10,931
Taxation 4 (1,403) (1,330) (3,299)
_______________________________________________________________________________________
Profit after taxation 3,203 2,929 7,632
Dividend proposed (662) (535) (2,385)
_______________________________________________________________________________________
Retained profit 2,541 2,394 5,247
_______________________________________________________________________________________
Earnings per share 3
Basic 7.7p 7.1p 18.5p
Excluding exceptional item 8.8p 7.1p 18.5p
Diluted 7.6p 7.0p 18.3p
Dividend per ordinary share 1.5p 1.3p 5.75p
______________________________________________________________________________________
Statement of recognised gains and losses
for the six months to 30 September 2003
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
30th September 2003 30th September 2002 31st March 2003
�000 �000 �000
Profit for the period 3,203 2,929 7,632
Currency translation differences
arising on foreign currency net
investments (243) (534) (602)
______________________________________________________________________________________
Total recognised gains and losses
related to the period 2,960 2,395 7,030
______________________________________________________________________________________
International Greetings PLC
Consolidated balance sheet
at 30th September 2003
Unaudited Unaudited Audited
30th September 2003 30th September 2002 31st March 2003
Note �000 �000 �000
Fixed assets
Intangible assets - goodwill 978 1,161 1,071
Tangible assets 21,856 22,176 21,721
_____________________________________________________________________________________________
22,834 23,337 22,792
Current assets
Stocks 36,629 36,038 21,860
Debtors 44,059 43,073 9,856
Cash at bank and in hand 1 18 10,547
_____________________________________________________________________________________________
80,689 79,129 42,263
Creditors: amounts falling due
within one year (56,172) (59,599) (21,438)
_____________________________________________________________________________________________
Net current assets 24,517 19,530 20,825
_____________________________________________________________________________________________
Total assets less current
liabilities 47,351 42,867 43,617
Creditors: amounts falling due
after more than one year (3,315) (3,935) (2,278)
Provisions for liabilities
and charges (382) (800) (394)
Deferred income (2,824) (3,280) (3,016)
_____________________________________________________________________________________________
Net assets 40,830 34,852 37,929
_____________________________________________________________________________________________
Capital and reserves
Called up share capital 2,109 2,056 2,077
Share premium account 1,652 809 1,081
Other reserves 773 1,085 1,016
Profit and loss account 36,296 30,902 33,755
_____________________________________________________________________________________________
Equity shareholders'
funds 5 40,830 34,852 37,929
_____________________________________________________________________________________________
International Greetings PLC
Consolidated cash flow statement
for the six months to
30th September 2003 Unaudited Unaudited Audited
6 months to 6 months to 12 months to
30th September 2003 30th September 2002 31st March 2003
Note �000 �000 �000
Net cash (outflow)/inflow
from operating activities 6 (27,105) (21,194) 22,510
Returns on investments
and servicing of finance 7 (151) (563) (707)
Taxation (1,165) (1,068) (2,980)
Capital expenditure 7 (2,221) 1,607 752
Equity dividends paid (1,878) (1,357) (1,892)
______________________________________________________________________________________________
Cash (outflow)/ inflow
before financing (32,520) (22,575) 17,683
Financing 7 4,977 534 (1,553)
______________________________________________________________________________________________
(Decrease)/increase in cash (27,543) (22,041) 16,130
______________________________________________________________________________________________
Reconciliation of net cash flow to movement in net (debt)/funds
for the six months to 30th September 2003
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
30th September 2003 30th September 2002 31st March 2003
�000 �000 �000
(Decrease)/increase in cash
in the period (27,543) (22,041) 16,130
Cash (inflow)/outflow from debt
and lease financing (4,374) (502) 1,877
______________________________________________________________________________________________
Change in net debt resulting
from cash flows (31,917) (22,543) 18,007
Inception of finance leases - - (695)
Translation differences 327 912 1,028
______________________________________________________________________________________________
Movement in net debt in the period (31,590) (21,631) 18,340
Net funds/(debt) at beginning
of period 3,433 (14,907) (14,907)
______________________________________________________________________________________________
Net (debt)/funds at end of period (28,157) (36,538) 3,433
______________________________________________________________________________________________
Notes:
1 Basis of preparation
The interim statement has been prepared under the same accounting policies as
those used for the financial statements for the year ended 31st March 2003.
The figures for the year ended 31st March 2003 are an abridged version of the
published accounts which have been reported on without qualification by the
auditors, and without any statement under Section 237 (2) or (3) of the
Companies Act 1985, and have been delivered to the Registrar of Companies.
2 Exceptional item
During the six months to 30th September 2003, the group has established a new
business division involved in the design and selling of licensed Christmas
decorations. The exceptional item of �684,000 (6 months to 30th September 2002:
�nil, 12 months to 31st March 2003: �nil) represents the one-off start-up costs
associated with this business.
3 Earnings per share
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
30th September 2003 30th September 2002 31st March 2003
Earnings per share excluding
exceptional item 8.8p 7.1p 18.5p
Loss per share on exceptional item (1.1p) - -
______________________________________________________________________________________________
Basic earnings per share 7.7p 7.1p 18.5p
______________________________________________________________________________________________
Diluted earnings per share 7.6p 7.0p 18.3p
______________________________________________________________________________________________
The calculation of basic earnings per share is based on 41,788,924 (6 months to
30th September 2002: 41,117,257, 12 months to 31st March 2003: 41,229,758)
ordinary shares being the average number of shares in issue during the period.
The calculation of diluted earnings per share is based on 41,993,399 (6 months
to 30th September 2002: 41,890,805, 12 months to 31st March 2003: 41,760,588)
ordinary shares. The difference of 204,475 (6 months to 30th September 2002:
773,548, 12 months to 31st March 2003: 530,830) represents the dilutive effect
of outstanding employee share options which have been calculated in accordance
with FRS 14.
Earnings per share excluding exceptional item is based upon the earnings as
above after adjusting for the exceptional item of �684,000 (6 months to 30th
September 2002: �nil, 12 months to 31st March 2003: �nil) and the tax relief
thereon.
4 Taxation
The taxation charge for the six months ended 30th September 2003 is based on the
estimated tax rate for the full year.
5 Reconciliation of movements in shareholders' funds
Unaudited Unaudited Audited
6 months to 6 months to 12 months
30th September 2003 30th September 2002 31st March 2003
�000 �000 �000
Profit for the period 3,203 2,929 7,632
Dividend (662) (535) (2,385)
_____________________________________________________________________________________
2,541 2,394 5,247
Other recognised gains and losses
relating to the period (net) (243) (534) (602)
New share capital subscribed 603 32 324
____________________________________________________________________________________
Net addition to
shareholders' funds 2,901 1,892 4,969
Opening shareholders' funds 37,929 32,960 32,960
_____________________________________________________________________________________
Closing shareholders' funds 40,830 34,852 37,929
_____________________________________________________________________________________
6 Reconciliation of operating profit to net cash (outflow)/ inflow from
operating activities
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
30th September 2003 30th September 2002 31st March 2003
�000 �000 �000
Operating profit 4,760 4,790 11,621
Depreciation charge 1,896 1,966 3,922
(Increase)/decrease in stocks (15,027) (11,718) 2,365
(Increase)/decrease in debtors (34,556) (27,334) 5,990
Increase/(decrease) in creditors 15,927 11,044 (1,270)
Grant income (192) (29) (293)
Goodwill amortisation 87 87 175
________________________________________________________________________________________
Net cash (outflow)/inflow (27,105) (21,194) 22,510
________________________________________________________________________________________
7 Gross cash flows
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
30th September 2003 30th September 2002 31st March 2003
�000 �000 �000
Returns on investment and servicing of finance
Net interest paid (137) (547) (678)
Interest element of finance
lease repayments (14) (16) (29)
_____________________________________________________________________________________
(151) (563) (707)
_____________________________________________________________________________________
Capital expenditure
Purchase of tangible
fixed assets (2,322) (1,287) (2,242)
Disposal of tangible
fixed assets 101 166 266
Grants received in relation
to capital expenditure - 2,728 2,728
_____________________________________________________________________________________
(2,221) 1,607 752
_____________________________________________________________________________________
Financing
New shares issued 603 32 324
New net loans 4,466 614 (1,662)
Capital element of finance
lease payments (92) (112) (215)
_____________________________________________________________________________________
4,977 534 (1,553)
_____________________________________________________________________________________
8 Analysis of movement in net (debt)/funds
At 31st March Cash Flow Exchange Movement At 30th September
�000 �000 �000 �000
Cash at bank
and in hand 10,547 (10,546) - 1
Overdrafts and
bills of
exchange (4,434) (16,997) 217 (21,214)
__________________________________________________________________________________________
6,113 (27,543) 217 (21,213)
Bank loans (1,848) (4,466) 78 (6,236)
Finance leases (832) 92 32 (708)
__________________________________________________________________________________________
(2,680) (4,374) 110 (6,944)
__________________________________________________________________________________________
Total net funds/(debt) 3,433 (31,917) 327 (28,157)