TIDMJLH
RNS Number : 0887T
John Lewis Of Hungerford PLC
18 March 2019
18 March 2019
John Lewis of Hungerford plc
(the "Company")
Half-year Report
John Lewis of Hungerford Plc (AIM: JLH), the specialist
manufacturer and retailer of kitchens, bedrooms and freestanding
furniture, is pleased to announce its interim results for the six
months ended 31 December 2018.
Overview
We are pleased to report that trading and sales for the half
year period ending 31 December 2018 was in line with management
expectations. This is due to the continued improvement in both the
levels of customer enquiries and the conversion improvements
following the investment in our sales training, marketing
literature and showroom estate. This improvement has continued over
the last 3 months with the launch of our new website in December
2018. We are now seen as a Destination Brand once again by our
customer audience.
As previously announced, we changed our year end to 30 June last
year and in line with that we have also changed the prior year
comparisons for the Interims reported, to provide comparative
figures for the half-year to 31 December 2017.
This comparable period for the half-year ending 31 December 2017
included the stronger than usual trading period in July and August
2017, being the first two months of the previous year comparison.
Trading in those two months was exceptionally strong, followed by a
strong Autumn 2017. As previously reported, the weakening of the
sector in early Spring 2018 resulting from the inclement weather
led to delayed building works until early Autumn 2018.
Against a continued weak retail environment, it is pleasing to
see that the combination of our dispatched orders, forward order
book against which a full deposit has been taken, together with our
future orders against which a first stage deposit has been taken,
are broadly in line with the previous year. We believe this is due
primarily to the strength of our focused marketing activities and
the ability of our team to deliver exceptionally high standards of
service throughout the customer journey.
Financial Review
As the comparable period is December 2017, the Board have taken
the decision to provide unaudited management information to allow
shareholders to compare more easily, the performance over the two
periods.
Turnover for the first half year was GBP3.7m (Dec 2017: GBP4.7m
- with the benefit of the year-end for FY17 included). The first
quarter of FY2019 showed an adverse comparison, followed by a 3%
(on a like-for-like basis "LFL") improvement in the second quarter.
This improvement has continued into the third quarter showing
strong LFL performance and a broadly comparable forward order book.
Dispatched sales and the forward order book at the end of the half
year stood at GBP5.0m (Dec 2017: GBP5.8m - with the benefit of the
year-end for FY2017 included). Future orders against which a first
stage deposit had been taken were ahead of the prior year at
GBP1.8m (Dec 2017: GBP1.0m).
The adverse sales variance for the period has led to an
increased operating loss of GBP318k, primarily due to reduction in
volume.
A summary of the financial results show:
Six months ended Six months ended
31 December 2018 31 December 2017
(Unaudited) (Unaudited) Movement
GBP'000 GBP'000 GBP'000
Turnover 3,666 4,748 (1,082)
Cost of Sales (1,973) (2,363) 390
Gross Margin 1,693 2,385 (692)
Gross Margin 46.2% 50.2% (4.0)%
Overheads/Other (2,011) (2,128) 117
(Loss)/Profit from
Operations (318) 257 (575)
------------------ ------------------ ---------
Inflationary pressures reported in the results for the 10 months
ended 30 June 2018 continue and the Board have taken the decision
to apply price increases to new business across both Kitchens and
Bedrooms from 1 July 2019. Fixed overheads, which are primarily our
skilled workforce, are an integral part of our business capability
and as such, we expect to see a recovery of the overhead over the
full year result. Additional margin pressures have arisen from a
continued shift in our product mix towards higher value appliances
and worktops, attracting lower margins, together with a higher
component of Bedrooms in the half year, now representing 8% of
revenue. Our City showrooms have accounted for 50% of the revenue
on Kitchens which also attract a lower installation charge. The
Board are committed to taking action where appropriate to ensure
the Company controls costs and margins over the remainder of the
year.
Operational Review
The first half year has seen the installation of our new paint
spray facilities, which represents a significant investment in our
production facility. We are keen to ensure that our production is
as efficient, as it is effective, and that we have the capacity to
absorb our planned growth over the next 2-3 years. Our
multi-skilled workforce are becoming increasingly more flexible
which we hope will allow us to adapt to our customer demands while
benefiting from continued economies of scale.
Our ongoing focus on our priorities within marketing continue to
pay dividends, with high levels of recommendations resulting from
our improved capability to deliver an outstanding customer
experience. With the new website live in December, we have enjoyed
a strong uplift in enquiries with a higher degree of relevance and
interest across all our product categories. Our Social channels
also continue to increase in the quality and quantity of
engagement. The marketing module for our CRM system has now been
installed and is beginning to show results in our lead nurturing
capabilities to allow our customers to enjoy a more personalised
journey. Successful installations have led to many inspirational
photo shoots, which continue to provide us with opportunities to
showcase our product and our talented design team, through
innovative, unique and truly bespoke designs.
The Board have worked hard to ensure that the three key
investments above are scheduled to deliver an ROI within a fixed
period and we plan to monitor this closely.
Our Bedrooms category continues to develop and has allowed us
the opportunity to diversify in cabinetry across the home. Our
costing project is now almost complete and we look forward to how
this may inform the management team going forward on the
progression of this product category.
Cash Flow
Cash at bank and in hand at the end of the period was GBP479k
(2017: GBP710k) this includes customer deposits and advance
payments. Our bank loans at the end of the period were GBP535k
repayable over 10 years. Our overdraft facility of GBP250k remained
unused at the end of the period.
Current Trading
We believe the best measure of current trading to be the
aggregate of our dispatched sales and the forward order book, being
committed orders for which deposits have been taken. At the end of
the period the aggregate of these stood at GBP5.0m (Dec 2017:
GBP5.8m). As previously highlighted our statutory revenue
recognition policy is to recognise sales only at the point orders
are dispatched.
Post period end, the momentum has continued, and shows after 10
weeks into the second half, our year-to-date aggregate of
dispatched sales and the forward order book are now at GBP6.1m (Dec
2017: GBP6.7m). Future orders against which a first stage deposit
has been taken continue to grow ahead of the previous year at
GBP1.9m (Mar 2018: GBP1.5m).
The above gives us confidence that our full year trading will be
in line with the prior year.
Our business remains sensitive to the prevailing market
conditions within the retail and home improvement sectors and as
such, the Board continues to monitor the situation closely. At this
time, we remain confident that we expect to recover much, if not
all, of the first half loss for the year ended 30 June 2019.
Kiran Noonan Gary O'Brien
Chief Executive Officer Non-Executive Chairman
15 March 2019 15 March 2019
Enquiries:
John Lewis of Hungerford plc
Gary O'Brien - Chairman 01235 774300
Cenkos Securities plc
Katy Birkin
Azhic Basirov 0207 397 8900
Certain information contained in this announcement would have
been deemed inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 until the release of this
announcement.
INCOME STATEMENT
For the six months ended 31 December
2018
6 months 6 months 10 months
ended ended ended
31 December 31 December 30 June
2018 2017 2018
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
Revenue 3,666 4,748 6,715
Cost of sales (1,973) (2,363) (3,465)
Gross profit 1,693 2,385 3,250
Selling and distribution
costs (253) (277) (443)
Administration expenses:
Other (1,758) (1,851) (3,156)
------------- ------------- -----------
Total (1,758) (1,851) (3,156)
(Loss)/Profit from operations (318) 257 (349)
Finance expenses (17) (19) (25)
(Loss)/Profit before tax (335) 238 (374)
Taxation - 14 181
(Loss)/Profit after taxation (335) 252 (193)
============= ============= ===========
(Loss)/Profit per share
Basic (0.18)p 0.13p (0.10)p
Fully diluted (0.18)p 0.13p (0.10)p
STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 31 December
2018
6 months 6 months 10 months
ended ended ended
31 December 31 December 30 June
2018 2017 2018
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
(Loss)/Profit for the
period (335) 252 (193)
Total Comprehensive Income (335) 252 (193)
============= ============= ===========
BALANCE SHEET
AS AT 31 December 2018
6 months 6 months 10 months
ended ended ended
31 December 31 December 30 June
2018 2017 2018
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
Non-Current Assets
Intangible assets 179 53 56
Tangible assets 2,368 2,342 2,357
Deferred Tax Asset 69 69
Trade and other receivables 43 43 43
-----------
2,659 2,438 2,525
------------- ------------- -----------
Current assets
Inventories 194 241 169
Trade and other receivables 661 382 530
Cash and cash equivalents 479 710 686
------------- ------------- -----------
1,334 1,333 1,385
Current liabilities (2,406) (1,746) (1,942)
Net current liabilities (1,072) (413) (557)
Total assets less current
liabilities 1,587 2,025 1,968
Non-current liabilities (462) (568) (508)
Provisions for liabilities
and charges (101) (101) (101)
Net Assets 1,024 1,356 1,359
============= ============= ===========
Equity
Share capital 187 187 187
Other reserves 1 1 1
Share premium account 1,188 1,188 1,188
Retained Earnings (352) (20) (17)
Total Equity 1,024 1,356 1,359
============= ============= ===========
STATEMENT OF CHANGES IN
EQUITY
For the six months ended 31 December
2018
Share Share Other Retained
Capital Premium Reserves Earnings Total
--------------------------------- -------- -------- --------- --------- --------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 31 August 2017 (Audited) 187 1,188 1 176 1,552
Loss for the period (4
months) - - - (196) (196)
--------------------------------- -------- -------- --------- --------- --------
At 31 December 2017 187 1,188 1 (20) 1,356
Loss for the period - - - 3 3
--------------------------------- -------- -------- --------- --------- --------
At 30 June 2018 (Audited) 187 1,188 1 (17) 1,359
Loss for the period - - - (335) (335)
At 30 December 2018 (Unaudited) 187 1,188 1 (352) 1,024
================================= ======== ======== ========= ========= ========
STATEMENT OF CASH FLOWS
For the six months ended 31 December
2018
6 months 6 months 10 months
ended 31 ended 31 ended 30
December December June 2018
2018 2017 (Audited)
(Unaudited) (Unaudited) GBP'000
GBP'000 GBP'000
(Loss)/Profit from operations (318) 257 (349)
Depreciation, impairment
and amortisation 123 129 223
(Increase) / Decrease in
inventories (25) 27 8
(Increase) / Decrease in
receivables (131) 88 (31)
Increase / (Decrease) in
payables 469 (499) (352)
(Profit) / Loss on disposal
of property plant and equipment - 15 31
Increase / (Decrease) in
provisions - - -
Net cash from operating
activities 118 17 (470)
Cash flows from financing
activities (68) (69) (115)
Cash flows from investing
activities (257) (81) (232)
Net decrease in cash and
cash equivalents (207) (133) (817)
------------- ------------- -----------
Net cash and cash equivalents
at the start of the period 686 843 1,503
Net cash and cash equivalents
at the end of the period 479 710 686
============= ============= ===========
NOTES:
1. These interim financial statements have been prepared on the
basis of accounting policies adopted by the Company and set out in
the annual report and accounts for the period ended 30 June 2018.
The Company does not anticipate any change in these accounting
policies for the year ended 30 June 2019. As permitted, this
interim report has been prepared in accordance with the AIM Rules
and not in accordance with IAS 34 "Interim financial reporting".
The principal risks and uncertainties facing the Company are
disclosed in the Company's financial statements for the period
ended 30 June 2018, available from www.john-lewis.co.uk and remain
unchanged.
2. Basic and fully diluted loss per ordinary share is calculated as follows:
6 months 6 months 10 Months
ended ended ended
31 December 31 December 30 June
2018 2017 2018
Profit / (loss) attributable
to ordinary shareholders (GBP'000) (335) 252 (193)
Weighted average number
of shares in issue 186,745,519 186,745,519 186,745,519
Shares used to calculate diluted
earnings per share 186,745,519 186,745,519 186,745,519
Basic earnings per ordinary
share (pence) (0.18)p 0.13p (0.10)p
Diluted earnings per
ordinary share (pence) (0.18)p 0.13p (0.10)p
At 31 December 2018 the basic and diluted loss per share is the
same, as the vesting of share option awards would reduce the loss
per share and is, therefore, anti-dilutive.
3. Copies of the 2018 interim accounts will be available to
shareholders on the Company's website www.john-lewis.co.uk
shortly.
4. Following the change of the Company's year end from 31 August
to 30 June, the Company reported final results for the 10 months
ended 30 June 2018 on 6 November 2018. The unaudited comparative
figures for the six months ended 31 December 2017 are therefore
reproduced for comparative purposes only and have not been
previously reported.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR BRGDXBUBBGCU
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March 18, 2019 03:00 ET (07:00 GMT)
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