These facilities provide the Group with the operational
flexibility it requires in a highly seasonal business on a cost
effective basis. As noted above, interest margins have been falling
as leverage has improved and the Group has been able to renegotiate
favourable terms on the two largest facilities during the year.
There are financial covenants attached to our facilities and the
Group comfortably complied with these throughout the year. These
covenants include:
* debt service, being the ratio of cash flow available
to finance costs on a rolling twelve-month basis;
* interest cover, being the ratio of earnings before
interest, depreciation and amortisation to interest
on a rolling twelve month basis;
* leverage being the ratio of debt to pre-exceptional
EBITDA on a rolling twelve month basis; and
* appropriate local covenants in the individual
businesses, which have asset backed facilities.
The Group has various interest rate swaps denominated in US
Dollars, Sterling and Euros to improve certainty over interest
charges. The Group adopts hedge accounting for these instruments.
No new interest rate contracts were entered into during the year.
The Group also actively manages FX transaction exposure in each of
its businesses, with advice and support from the central treasury
team.
Note 26 to the financial statements provides further information
in respect of treasury matters.
Post balance sheet event
On 5 June 2014 the Group announced the acquisition of the trade
and certain of the assets of Enper Giftwrap BV, a Dutch company
with sales of EUR5 million, for EUR1.9 million. This transaction is
expected to complete on 30 June 2014. While modest in scale, this
acquisition is an ideal step towards consolidation of the very
competitive European gift wrap marketplace. The Group's Dutch
management team plan to integrate Enper's customer base and
selected fixed assets into its own facilities within three months
of completion. We have allowed for the loss of some less profitable
customers but the synergies that should arise post integration
(2015/16 season) from such an integration into our modern printing
presses, installed in Hoogeveen in 2012, will more than offset this
and the cash payback after all costs of acquisition and integration
should be no more than four years.
This is the Group's first acquisition for some years and it is a
reflection of the our improving balance sheet and trading position
that we are now able to evaluate and execute on such opportunities
- albeit highly selectively. We do not anticipate that this
investment will impact materially on our debt reduction plans.
Conclusion
In conclusion, delivery has been ahead of plan in the year now
completed. Net debt and earnings per share performance was
especially pleasing and outperformance in the arena of cash
management is providing the Group with additional flexibility and
options to create value for shareholders in the future.
Anthony Lawrinson
Director
19 June 2014
Consolidated income statement
year ended 31 March 2014
Year ended Year ended
31 March 2014 31 March 2013
Before Exceptional Before Exceptional
exceptional items exceptional items
items (note 10) Total items (note 10) Total
Notes GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Revenue 4 224,462 - 224,462 225,211 - 225,211
Cost of sales (183,238) (2,006) (185,244) (183,941) (953) (184,894)
Gross profit 41,224 (2,006) 39,218 41,270 (953) 40,317
18.4% 17.5% 18.3% 17.9%
Selling expenses (12,108) - (12,108) (12,790) (455) (13,245)
Administration expenses (19,191) - (19,191) (18,789) (195) (18,984)
Other operating income 7 737 147 884 803 - 803
Profit on disposal of property, plant
and equipment - - - 252 - 252
Operating profit/(loss) 5 10,662 (1,859) 8,803 10,746 (1,603) 9,143
Finance expenses 8 (3,177) (439) (3,616) (3,466) - (3,466)
Profit/(loss) before tax 7,485 (2,298) 5,187 7,280 (1,603) 5,677
Income tax (charge)/credit 9 (1,840) 381 (1,459) (1,890) 289 (1,601)
Profit/(loss) for the period 5,645 (1,917) 3,728 5,390 (1,314) 4,076
Attributable to:
Owners of the Parent Company 3,010 3,401
Non-controlling interests 718 675
2014 2013
----- ------- ------ ------- ------
Notes Diluted Basic Diluted Basic
------------------------------------------------------------------------- ----- ------- ------ ------- ------
Adjusted earnings per share excluding exceptional items and LTIP charges 23 8.4p 8.6p 7.8p 7.8p
Loss per share on LTIP charges 23 (0.1p) (0.1p) - -
------------------------------------------------------------------------- ----- ------- ------ ------- ------
Adjusted earnings per share excluding exceptional items 23 8.3p 8.5p 7.8p 8.1p
Loss per share on exceptional items 23 (3.2p) (3.3p) (2.0p) (2.1p)
------------------------------------------------------------------------- ----- ------- ------ ------- ------
Earnings per share 5.1p 5.2p 5.8p 6.0p
------------------------------------------------------------------------- ----- ------- ------ ------- ------
Consolidated statement of comprehensive income
year ended 31 March 2014
2014 2013
GBP000 GBP000
---------------------------------------- ------- ------
Profit for the year 3,728 4,076
Other comprehensive income:
---------------------------------------- ------- ------
Exchange difference on translation
of foreign operations (2,257) 633
Transfer to profit and loss of maturing
cash flow hedges (net of tax) 451 446
Net loss on cash flow hedges (net
of tax) (577) (451)
---------------------------------------- ------- ------
Other comprehensive income for period,
net of tax items
which may be reclassified in to profit
and loss in subsequent periods (2,383) 628
Total comprehensive income for the
period, net of tax 1,345 4,704
Attributable to:
Owners of the Parent Company 1,366 3,796
Non-controlling interests (21) 908
---------------------------------------- ------- ------
1,345 4,704
---------------------------------------- ------- ------
Consolidated statement of changes in equity
year ended 31 March 2014
Share
premium
and capital Non--
Share redemption Merger Hedging Translation Retained Shareholder controlling
capital reserve reserves reserves reserve earnings equity interest Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 April 2012 2,750 4,480 17,164 (446) 446 23,410 47,804 4,744 52,548
Profit for the
year - - - - - 3,401 3,401 675 4,076
Other
comprehensive
income - - - (5) 400 - 395 233 628
Total
comprehensive
income for the
year - - - (5) 400 3,401 3,796 908 4,704
Equity-settled
share-based
payment (note
25) - - - - - 22 22 - 22
Options exercised
(note 22) 88 178 - - - - 266 - 266
Equity dividends
paid - - - - - - - (968) (968)
At 31 March 2013 2,838 4,658 17,164 (451) 846 26,833 51,888 4,684 56,572
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