Interim Results

Actif Group PLC 24 April 2002 24 April 2002 Actif Group plc Announcement of interim results for the six months ended 31 January 2002 Highlights • Turnover from continuing operations up 16.9% to £12.1 million (2001: £10.3 million) • Gross margins have increased to 42.5% from 40.8% as a result of the increasing proportion of retail business within the Group • Operating profit of £298,000 (2001: loss from continuing operations £584,000) • Profit before tax of £174,000 (2001: loss £1,637,000) • Basic Earnings per share of 0.27p (2001: loss per share 2.51p) • Recruitment of Julian Ghinn as Finance Director completes new management team Mark Evans, Chief Executive of Actif Group, commented: 'This has been an important period for the Group with an emphasis on the restoration of profitability to our core business. Our spring/summer collection has been well received, our retail business continues to trade ahead of last year, and in line with expectations, and wholesale forward orders are in line with budget. On this basis we remain cautiously optimistic for the outcome of the year,' Further information is available on the corporate website, www.actifgroup.com Enquiries: ACTIF GROUP PLC HUDSON SANDLER Mark Evans, Chief Executive Piers Hooper Tel: +44 (0)20 7436 3330 Tel: +44 (0)20 7796 4133 Actif Group plc - Interim Results 2002 CHAIRMAN'S STATEMENT I am pleased to report the Group's interim results for the six month period to 31 January 2002. This has been a period of some progress for the Group with sales, gross margins and profits for the period all ahead of last year. This improvement has been achieved through our ongoing strategy to concentrate on generating improving returns from our core ELLE brand, while significantly reducing our central overhead base. Results In the six months to 31 January 2002, Group turnover from continuing operations increased by 16.9% to £12.1 million (2001: £10.3 million). Composite gross margins have increased to 42.5% from 40.8% as a result of the retail business accounting for a higher proportion of sales than in the prior period. Operating profit from continuing operations was £298,000, against an operating loss last year of £584,000. Total profit before tax was £174,000 (2001: loss £1,637,000) and basic earnings per share were 0.27p (2001: loss per share 2.51p). Cash generated from operations in the period amounted to £0.6 million (2001: cash outflow £1.3 million) and net debt has been reduced to £2.6 million (2001: £3.6 million) ELLE Retail Retail sales in the period increased by 23.6% to £6.8 million (2001: £5.5 million). The growth in retail sales reflects a full period of trading from the stores and concessions opened in the first half of last year. Retail gross margins are slightly lower than the comparative period at 58.8% (2001: 59.3%). This is due to a limited clearance programme of old stock through our factory outlet concession business, which was undertaken to convert excess stock into cash. In our prime stores we have seen some margin growth in the period due to increased buying efficiencies. There were no new stores or concessions opened in the period under review. Since 31 January 2002 we have opened 3 further concessions in 2 department store groups and our retail selling space has now increased to 49,335 square feet. ELLE Wholesale Wholesale revenues from our ELLE collections in the period have increased by 18.9% to £4.4 million (2001: £3.7 million). Our wholesale sales particularly reflect the growth of the nightwear and sportswear product categories and sales of ELLE bags have also increased substantially. The Group acts as UK distributor for ELLE bags, rather than as a licensee, and consequently gross margins on bags are lower than those achieved on other licensed product groups. This has contributed to an overall reduction in wholesale margin rate to 24.3% (2001: 26.2%), resulting in a year on year increase in cash margins of 9.8%. As we have previously reported, the re-alignment of our ELLE licence has resulted in us relinquishing certain non-core product categories and territories. This will impact for the first time on the Autumn/Winter season 2002 and consequently we have anticipated a reduction in wholesale sales in the second half of the year. Board changes In March we announced that Simon Banfield, Finance Director, was leaving the Board to take up a new position in the house building sector. I would like to thank Simon for his valued contribution and to wish him success in his future endeavours. He has been succeeded by Julian Ghinn with effect from 2 April 2002. Julian previously held the positions of Finance Director and Business Development Director at Virgin Retail Limited and has a strong background in a number of disciplines in the retail sector. Outlook This has been an important period for the Group with an emphasis on the restoration of profitability to our core business. As a consequence of achieving this objective, I believe that we are now well positioned to continue with the development of the ELLE brand. Our spring/summer collection has been well received, our retail business continues to trade ahead of last year and in line with expectations, and wholesale forward orders are in line with budget. On this basis we remain cautiously optimistic for the outcome for the year. David Brock Chairman CONSOLIDATED PROFIT AND LOSS ACCOUNT For the 6 months to 31 January 2002 Unaudited Unaudited Audited Six months to Six months to Year to Notes 31 January 2002 31 January 2001 31 July 2001 £'000 £'000 £'000 STARTTurnover Continuing operations 12,052 10,307 22,702 Discontinued operations - 851 1,732 __________ __________ __________ Group 12,052 11,158 24,434 __________ __________ __________ Operating profit/(loss) before exceptional costs Continuing operations 298 (584) (382) Discontinued operations - (173) (182) Exceptional costs: 2 Continuing operations - - (200) Discontinued operations - (341) (341) Operating profit/(loss) Continuing operations 298 (584) (582) Discontinued operations - (514) (523) __________ __________ __________ 298 (1,098) (1,105) Exceptional cost of termination of operation - (490) (662) __________ __________ __________ Profit/(loss) on ordinary activities before interest 298 (1,588) (1,767) Interest payable and similar charges (124) (49) (214) __________ __________ __________ Profit/(loss) on ordinary activities before taxation 174 (1,637) (1,981) Taxation - - 1 __________ __________ __________ Retained profit/(loss) for the period 174 (1,637) (1,980) __________ __________ __________ Earnings/(loss) per share Basic earnings/(loss) per share 3 0.27p (2.51p) (3.04p) __________ __________ __________ Adjusted earnings/(loss) per share 0.27p (1.24p) (1.19p) __________ __________ __________ Diluted earnings/(loss) per share 0.26p (2.51p) (3.04p) __________ __________ __________ Adjusted diluted earnings/(loss) per share 0.26p (1.24p) (1.19p) __________ __________ __________ CONSOLIDATED BALANCE SHEET As at 31 January 2002 Unaudited Unaudited Audited 31 January 2002 31 January 2001 31 July 2001 £'000 £'000 £'000 Fixed assets Intangible assets 49 80 50 Tangible assets 1,928 2,914 2,356 __________ __________ __________ 1,977 2,994 2,406 Current assets Stocks 3,892 4,328 4,347 Debtors 2,696 1,730 4,037 Cash at bank and in hand 7 - 7 __________ __________ __________ 6,595 6,058 8,391 Creditors: amounts falling due within one year (4,509) (3,928) (6,467) __________ __________ __________ Net current assets 2,086 2,130 1,924 __________ __________ __________ Total assets less current liabilities 4,063 5,124 4,330 Creditors: amounts falling due after more than one year (470) (1,343) (911) __________ __________ __________ Net assets 3,593 3,781 3,419 __________ __________ __________ Capital and reserves Called up share capital 655 655 655 Share premium account 4,322 4,340 4,322 Other reserves 89 89 89 Profit and loss account (1,473) (1,303) (1,647) _________ _________ __________ Equity Shareholders' funds 3,593 3,781 3,419 __________ __________ __________ CONSOLIDATED CASH FLOW STATEMENT For the 6 months to 31 January 2002 Notes Unaudited Unaudited Audited Six months to 31 Six months to 31 Six months to 31 January 2002 January 2001 July 2001 £'000 £'000 £'000 Net cash inflow/(outflow) from operating activities 4(a) 611 (1,338) (669) Returns on investments and servicing of finance Interest paid (124) (49) (214) Dividends paid - (3) (3) ________ ________ ________ Net cash outflow from servicing of finance (124) (52) (217) ________ ________ ________ Taxation paid - - (21) Capital expenditure and financial investment Purchase of tangible fixed assets (38) (1,445) (1,346) Sale of tangible fixed assets 3 - - ________ ________ ________ Net cash outflow from capital expenditure (35) (1,445) (1,346) ________ ________ ________ Net cash inflow/(outflow) before financing 452 (2,835) (2,253) Cost of issue of ordinary shares - - (19) Repayment of secured loans (308) (89) (303) New secured loan - 820 820 Capital element of lease payments (86) (163) (187) ________ ________ ________ Net cash (outflow)/inflow from financing (394) 568 311 ________ ________ ________ Increase/(decrease) in cash in the period 4(b) 58 (2,267) (1,942) ________ ________ ________ NOTES TO THE INTERIM FINANCIAL STATEMENTS 1. Basis of preparation The consolidated interim financial statements have been prepared under the historical cost convention and in accordance with applicable accounting standards. The accounting policies applied are consistent with those set out in the financial statements of Actif Group plc for the year ended 31 July 2001. The interim financial statements are unaudited and do not constitute accounts within the meaning of section 240 of the Companies Act 1985. The financial information for the year ended 31 July 2001 has been extracted from the Group's statutory accounts for the period, which have been delivered to the Registrar of Companies. The auditors' report on those accounts was unqualified and did not contain any statement under section 237 of the Companies Act 1985. An element of the exceptional costs for the 6 months ended 31 January 2001 have been re-apportioned between pre and post operating profit to ensure that the comparatives are consistent with the statutory accounts for the year ended 31 July 2001. 2. Exceptional items The exceptional cost shown under Continuing Operations for the 6 months ended 31 January 2001 comprises the permanent impairment loss on a leasehold property. The exceptional item shown under Discontinued Operations for the 6 months ended 31 January 2001 and the year ended 31 July 2001 comprises the launch costs of the Joe Boxer operation. 3. Earnings per share Earnings per share and fully diluted earnings per share for the 6 months ended 31 January 2002, the year ended 31 July 2001 and the 6 months ended 31 January 2001 have been calculated on loss or profit after tax and non-equity dividends and on the weighted average number of shares in issue and under option during the period, as set out below: 6 months ended 6 months ended Year ended 31 January 2002 31 January 2001 31 July 2001 Weighted average number of ordinary shares 65,144,571 65,144,571 65,144,571 -------------------- ---------------------- ----------------- Weighted average number of ordinary and potential ordinary shares 68,197,463 82,040,140 68,829,858 -------------------- ---------------------- ----------------- For the periods ended 31 January 2001 and 31 July 2001 the potential ordinary shares are non-dilutive. Adjusted loss per share for the 6 months ended 31 January 2001 has been calculated on loss on ordinary activities after tax and non-equity dividends but excluding the exceptional items of £831,000 which comprise the launch and termination costs of the Joe Boxer operation. Adjusted loss per share for the year ended 31 July 2001 has been calculated on loss on ordinary activities after tax and non-equity dividends but excluding the exceptional items of £1,003,000 relating to the launch and termination costs of the Joe Boxer operation and a permanent impairment loss of £200,000 on a leasehold property. 4. Notes to the Consolidated Cash Flow Statement for the 6 months ended 31 January 2002 (a) Reconciliation of operating profit/loss to operating cash flows Unaudited Unaudited Audited 31 January 2002 31 January 2001 31 July 2001 £'000 £'000 £'000 Operating profit/(loss) 298 (1,098) (1,105) Exceptional cost of termination of operation - (490) (662) Depreciation charges 462 779 881 Amortisation of goodwill 1 1 9 Loss on sale of tangible fixed assets - - 26 Impairment loss on leasehold property - - 416 Decrease/(increase) in stock 455 (27) (46) Decrease/(increase) in debtors 1,341 529 (1,755) (Decrease)/increase in creditors (1,946) (1,032) 1,567 __________ __________ __________ Net cash inflow/(outflow) from operating activities 611 (1,338) (669) __________ __________ __________ (b) Reconciliation of cash flow to movement in net debt Unaudited Unaudited Audited 31 January 2002 31 January 2001 31 July 2001 £'000 £'000 £'000 Increase/(decrease) in cash in the period 58 (2,267) (1,942) Cash outflow from decrease in debt and lease financing 394 252 490 __________ __________ __________ Change in net debt resulting from cash flows 452 (2,015) (1,452) New secured loans - (820) (820) New finance leases - (392) (455) __________ __________ __________ Movement in net funds/(debt) in the period 452 (3,227) (2,727) Net debt at the beginning of the period (3,097) (370) (370) __________ __________ __________ Net debt at the end of the period (2,645) (3,597) (3,097) __________ __________ __________ 5. Dividend The Board has resolved not to declare an interim dividend (2001 - nil). 6. Copies of Interim Report The Interim Report will be sent by post to all registered shareholders. Copies of the Interim Report are available from the Company Secretary at the Registered Office of Actif Group plc, 20 Little Portland Street, London W1W 8AA. This information is provided by RNS The company news service from the London Stock Exchange

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