Final Results

RNS Number : 9481R

Swallowfield PLC

18 September 2014

 



Swallowfield plc

("Swallowfield" or the "Group")

Final Results for the year-ended 30 June 2014

Swallowfield plc, a market leader in the development, formulation, and supply of personal care and beauty products, whose customers include many of the world's leading brands, announces its final results for the year ended 30 June 2014.

Highlights

·      The business returned to profitability in the year, as planned. Adjusted operating profit was £0.77m, a significant improvement on the 2013 operating loss of £0.45m.

·      Adjusted earnings per share was 3.9p compared with a loss per share of 4.7p in the prior year. 

·      Revenues for the 53 weeks were £50.0m, £49.1m on a 52 week basis (2013: £48.6m) with the prior year including £2.0m of sales lost through the previously advised changes in the sourcing strategy of two significant customers.

·      Good underlying sales growth of 7% (52 weeks 5%) was achieved across the balance of customers, as a result of good innovation and new contract wins.

·      Continued strong performance in our export markets with direct exports increasing to 38% of revenue (2013: 35%).

·      A business review of the Group was completed during the year with a new, focused strategy now in place and starting to positively impact results.

·      Product category focus and cost savings already made contributed to a margin improvement of 1.9 percentage points.

·      Further action taken to optimise the cost base and improve productivity, resulting in exceptional costs of £0.37m (£0.1m cash cost), which will underpin future profitability.

·      Tight control of costs and working capital has reduced net debt to £5.1m (2013: £5.7m).

·      New banking facilities with HSBC put in place during March 2014.

Brendan Hynes, Non-Executive Chairman commented:

"I am pleased to report that, as planned, the business has returned to full year profitability. We have also made good progress during the year with a new, focused strategy now in place, as outlined in the interim results. We expect this strategy to continue to deliver improved profitability, cash generation and shareholder value over the coming years."

Chris How, Chief Executive commented:

"Our objectives this year were first to stabilize the business performance and secondly to re-focus on a clearer strategy aimed at creating sustainable growth and shareholder value. We are pleased to have made measurable and demonstrable progress against each of these objectives. We are confident that our clearly identified strategic pillars are the right ones to enable us to continue progress in what remains a challenging and competitive market."

For further information please contact:
Swallowfield plc
Chris How	Chief Executive Officer	01823 662 241
Mark Warren	Group Finance Director	01823 662 241
Jonny Franklin-Adams/Jen Boorer	N+1 Singer	0207 496 3000
Alan Bulmer	Investor Focus International	07831 654744
Chris Lawrance	JBP Public Relations	0117 907 3400

Chairman's Statement

I am pleased to report that the business returned to profitability in the year, as planned, with an adjusted operating profit of £0.77m which is a significant improvement on the 2013 operating loss of £0.45m. The new key strategic initiatives also delivered good underlying sales growth, improved operating margins and better cash generation, particularly in the second half year.

Results

£m unless otherwise stated	2014	2013 Restated ²
Reported Results (before exceptional items ¹)
Revenue ³	£50.0m	£48.6m
Operating profit / (loss) ¹	£0.77m	£(0.45)m
Adjusted earnings / (loss) per share ¹	3.9p	(4.7)p
Statutory Results (after exceptional items)
Operating profit / (loss)	£0.40m	£(0.94)m
Basic and diluted earnings / (loss) per share	1.4p	(8.1)p
Total Dividend per share	-	2.2p
Net debt	£5.1m	£5.7m

¹ Adjusted operating profit and adjusted earnings per share are calculated before exceptional items

² Prior Year comparatives restated to reflect impact of the adoption of IAS 19 (revised)

³ 2014 Revenue represents 53 weeks trading, adjusting for the 53 week would reduce reported revenue by £0.94m. Except for revenue, where the relevant adjustment has been shown above, no material changes would be required to the income statement to adjust the 2014 financial year numbers to a 52 week basis.

Business Review

A full review of the business has now been completed and a new, focused business strategy has been put in place. We expect the results of this to improve shareholder value, increase cash generation and improve profitability over the next three years. Further details are outlined in the strategic report below.

The Group has made good progress across its 4 strategic pillars (Product Category Focus, Cost Base Optimisation, New Product Development, and Emerging New Category) Particularly pleasing has been the positive impact achieved on contribution margin as a result of executing our Product Category Focus and continuing to improve our cost base.

This performance has offset a slight softness in sales revenues versus expectations. This softness has been due to the challenging retail market which has resulted in a slow-down in volumes from some of our brand holders.

Net Debt and Cash Flow

Net debt decreased to £5.1m (2013: £5.7m). We have maintained a tight control over working capital whilst accommodating an increase in the number of stock-holding accounts as we have secured new retail customers.

Financing costs of £0.28m (2013 restated: £0.39m) comprised an actual interest expense of £0.14m (2013: £0.17m) plus a pension scheme finance charge of £0.14m (2013: restated charge £0.22m).

Capital expenditure was £0.9m which was £0.4m lower than depreciation charges for the year. This was as expected due to the timing of a major aerosol capital project straddling our year-end date. Over a rolling three year cycle we expect capital expenditure to be broadly in line with depreciation and amortisation.

The Group has entered into a new full banking relationship with HSBC, which encompasses a £10m multi-currency invoice discounting facility. As a consequence of this transfer all remaining loans due to our previous lender were fully repaid in the year. These changes were concluded during March and provide the Group with increased flexibility to support the delivery of its strategic objectives.

Dividends

After a year of stabilisation and re-focus, the business is now progressing a number of strategic opportunities which are designed to build shareholder value in the medium and long term. These will require investment both in working capital and brand marketing / promotional support. Through this period of investment the dividend policy is expected to be relatively conservative.

The Board therefore will not be proposing a final dividend for approval at this year's Annual General Meeting (2013: Nil).

Looking forward, it is the directors' intention to reinstate a dividend and to align the level of dividend payment to the underlying earnings and cash flow of the business. The dividend will be set taking into account the level of gearing and the operational requirements of the business.

Board Changes

On 1st July 2014 Edward Beale joined the Board as a non-executive director. He will serve as chair of the Audit Committee and as a member of the Remuneration Committee. Edward is a Chartered Accountant and is the Chief Executive of City Group PLC as well as holding several other directorships. His broad business experience and strong financial background will be a valuable addition to the Swallowfield Board as we focus on the future development of the business.

Outlook

We expect the challenging retail market conditions currently being experienced in the UK and Europe to continue in the short and medium term.

However, the Board remains confident that the new strategy outlined earlier this year will gain further momentum, improve profitability and continue to build shareholder value.  In addition, the new financial year will benefit from improved run rate profitability, further efficiencies, tighter control of working capital and new product developments already progressed in the current financial year.  

STRATEGIC REPORT

Our Business and Strategy

Swallowfield plc is a market leader in the development, formulation, and supply of personal care and beauty products. Our customers include many of the world's leading brands.

Our Strategy

'Creating for Tomorrow, Delivering for Today'

Our business strategy is developed on two complimentary platforms. The first 'Creating for Tomorrow' identifies the strategic pillars that we believe will help us create a stronger business in the mid and long term. The second 'Delivering for Today' identifies some key operational focus areas that we need to drive in order to deliver our more immediate (i.e. current fiscal) performance.

The 4 strategic pillars of 'Creating for Tomorrow' are:

Product Category Focus

The business is focusing on a select number of 'drive' product categories where Swallowfield has an existing and sustainable competitive advantage. Future investment in both human and financial resources will be prioritised to drive higher growth and profitability in each of these categories

New Product Development

We will be utilising our product development, manufacturing, and distribution expertise to create an innovative range of products, which will be taken to market under our own brand names. These will be positioned to avoid any direct conflict with our existing valued customer base.

Emerging New Category

Development of capability in a new high growth, high margin product category that can become an additional 'drive' category by 2016.

Cost Base Optimisation

We will improve our asset utilisation across our locations, which will reduce the cost base and improve productivity. As an example we have consolidated our Bideford site into two buildings from three, and relocated selected manufacturing lines to Tabor in the Czech Republic. We will continue to evaluate options to optimise the use and location of our production assets across all Group sites.

Operational Review

Market and Economic Background

Over the year the retail markets in the UK and Europe have remained challenging and this has impacted on the toiletries and cosmetics sector. This has resulted in lower levels of underlying consumer demand, further exacerbated by a strong and prolonged period of promotional activity by a number of major global brands.

The momentum seen in the second half of the fiscal 2013 has continued, and we have driven further underlying net growth, with new customer wins and new product launches returning the group to growth as planned. This reduced dependency on certain clients and the broadening of the overall customer, geographic and product mix will continue to improve our risk profile.

Performance Review

Revenue for the 53 weeks was £50.0m (52 weeks £49.1m), a modest rate of growth versus the prior year (2013: £48.6m); it should be noted that the prior year included £2m of sales representing the final tranche of the previously advised losses, due to changes in the sourcing strategy of some of our largest customers. Good underlying sales growth of 7% (52 weeks 5%) was achieved across the balance of customers, reflecting strong innovation and contract wins.

In 2012 we had three customers accounting for 52% of revenue, with the largest customer representing 25%. Two years on we now have six customers representing the same proportion of revenue, with the largest customer now representing only 15% of revenue. We have driven good levels of net growth across new and existing customers with this reduced dependency on certain clients and the continuing broadening of the overall customer, geographic and product mix will continue to improve our risk profile.

Direct exports increased and now represent 38% of revenue compared with 35% last year. This growth has come from the USA, South Africa, China, and Europe.

Direct contribution margins - defined as net sales less materials, direct labour, and other direct costs - increased by 1.9 percentage points compared with the prior year.  This positive impact achieved on contribution margin is as a result of executing our Product Category Focus and continuing to improve our cost base.  

As previously advised we completed the sale of a surplus unit in Bideford in August 2013; this generated a gain on disposal of £0.08m in the year. This unit had been for sale since 2008.

Exceptional restructuring costs of £0.36m were taken in the year (2013: £0.49m) in relation to the cost base optimisation project, consolidating our Bideford site into two buildings from three, and the re-location of selected manufacturing lines to Tabor in the Czech Republic. This has resulted in a modest level of £0.10m one-off cash costs in the second half, and a £0.26m non-cash fixed asset impairment, but is expected to generate full year savings of £0.23m per annum.

The net effect is that the Group returned to an operating profit before exceptional items of £0.77m (2013: loss £0.45m) and an unadjusted profit before taxation of £0.14m (2013: loss £1.33m), resulting in an adjusted earnings per share of 3.9p versus an adjusted loss per share of (4.7)p (restated) during the prior year.

The Group's Chinese strategic investment of a 19% shareholding in Shanghai Colour Cosmetics Technology Company Limited (SCCTC) was re-valued during the year to fair value based on SCCTC's 30 June 2014 net assets.  The initial cost of this investment was £0.14m and this is now valued at £0.32m in addition to the £0.11m of dividend income since acquisition. A dividend of £0.02m was received in the year (2013: nil).

The overall effective rate of Group taxation for the year was a credit of 12% of pre-tax profits. This represents the current tax payable in the Czech Republic and that in the UK, the tax losses incurred in the current and prior year are assumed to be recoverable against future profits. The overall tax credit also includes the one-time benefit of a prior year adjustment on utilisation of Group tax relief.

 Defined Benefit Pension Scheme

The defined benefit pension scheme valuation at 5 April 2011 resulted in a revised schedule of contributions and a deficit reduction plan agreement with the Trustees, which was subsequently approved by the pensions regulator in April 2013. During the year the Group increased its deficit contributions and made a number of changes to the scheme, including an increase in member contributions and a reduction in accrual rates. The defined benefit pension scheme is currently undergoing its latest triennial valuation as of 5 April 2014 the results of which are expected to be finalised by the end of the current year. 

Group Statement of Comprehensive Income

For the year ended 30 June 2014

		2014	2013 Restated
	Notes	£'000	£'000
Revenue	5	50,033	48,591
Cost of sales		(44,859)	(44,615)
Gross profit		5,174	3,976
Commercial and administrative costs		(4,406)	(4,425)
Operating profit/(loss) before exceptional items		768	(449)
Exceptional items		(366)	(491)
Operating profit/(loss)		402	(940)
Finance income		16	-
Finance costs		(278)	(394)
Profit/(loss) before taxation	6	140	(1,334)
Taxation	7	17	424
Profit/(loss) for the year		157	(910)
Other comprehensive income/(loss):
Items that will not be reclassified subsequently to profit or loss: Re-measurement of defined benefit liability /(asset) Items that will be reclassified subsequently to profit or loss: Exchange differences on translating foreign operations (Loss)/Gain on available for sale financial assets		608 (167) (47)	1,804 76 177
Other comprehensive income/(loss) for the year		394	2,057
Total comprehensive income/(loss) for the year		551	1,147
Profit/(loss) attributable to:
Equity shareholders		157	(910)
Total comprehensive income/(loss) attributable to:
Equity shareholders		551	1,147
Earnings per share
- basic and diluted	8	1.4p	(8.1p)
Dividends
Paid in year (£'000) Paid in year (pence per share) Proposed (£'000) Proposed (pence per share)		- - - -	712 6.3 - -

Group Statement of Financial Position

As at 30 June 2014

		2014		2013 Restated	2012 Restated
		£'000		£'000	£'000
ASSETS
Non-current assets
Property, plant and equipment		10,406		10,923	11,405
Intangible assets		114		134	164
Deferred tax assets		275		297	692
Investments		322		369	192
Total non-current assets		11,117		11,723	12,453
Current assets
Inventories		7,065		7,294	8,297
Trade and other receivables		12,818		13,131	13,629
Cash and cash equivalents Current tax receivable		533 232		1,093 254	923 -
		20,648		21,772	22,849
Assets held for sale		-		167	167
Total current assets		20,648		21,939	23,016
Total assets		31,765		33,662	35,469
LIABILITIES
Current liabilities
Trade and other payables		16,876		18,237	17,771
Interest-bearing loans and borrowings		-		395	471
Current tax payable		54		-	106
Total current liabilities		16,930		18,632	18,348
Non-current liabilities
Interest-bearing loans and borrowings		-		37	433
Post-retirement benefit obligations		2,212		2,912	5,011
Deferred tax liabilities		63		72	103
Total non-current liabilities		2,275		3,021	5,547
Total liabilities		19,205		21,653	23,895
Net assets		12,560		12,009	11,574
EQUITY
Share capital		566		566	566
Share premium		3,830		3,830	3,830
Other components of equity		178		225	48
Capital reserve		-		-	-
Exchange reserve Pension re-measurement reserve		(315) 279		(148) (329)	(224) (2,133)
Retained earnings		8,022		7,865	9,487
Total equity		12,560		12,009	11,574

Group Statement of Changes in Equity

As at 30 June 2014

	Share Capital	Share Premium	Exchange Reserve	Retained Earnings	Available  for Sale Financial Assets	Net defined benefit liability /(asset)	Total Equity
Group	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance as at 30 June 2013 restated	566	3,830	(148)	7,865	225	(329)	12,009
Dividends	-	-	-	-	-	-	-
Transactions with owners	-	-	-	-	-	-	-
Profit/(loss) for the year	-	-	-	157	-	-	157
Other comprehensive income:
Exchange difference on translating foreign operations (Loss) on available for sale financial assets Re-measurement of defined benefit liability/(asset)	-              -              -	-                -                -	(167)                 -                  -	-                -               -	-            (47)               -	-            -       608	(167)         (47)         608
Total comprehensive income for the year	-	-	(167)	157	(47)	608	551
Balance as at 30 June 2014	566	3,830	(315)	8,022	178	279	12,560

	Share Capital	Share Premium	Exchange Reserve	Retained Earnings	Available for Sale Financial Assets	Net defined benefit liability /(asset)	Total Equity
Group	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance as at 1 July 2012	566	3,830	(224)	9,487	48	-	13,707
Restatement for IAS19R Restated Balance as at 1 July 2012 Dividends	- 566 -	- 3,830 -	- (224) -	- 9,487 (712)	- 48 -	(2,133) (2,133)	(2,133) 11,574 (712)
Transactions with owners	-	-	-	(712)	-	-	(712)
(Loss)/profit for the year	-	-	-	(910)	-	-	(910)
Other comprehensive income:
Exchange difference on translating foreign operations Gain on available for sale financial assets Re-measurement of defined benefit liability/(asset)	- - -	- - -	76 - -	- - -	- 177 -	- -      1,804	76 177      1,804
Total comprehensive income for the year	-	-	76	(910)	177	1,804	1,147
Balance as at 30 June 2013	566	3,830	(148)	7,865	225	(329)	12,009

Group Cash Flow Statement

For the year ended 30 June 2014

	2014	2013 Restated
	£'000	£'000
Cash flow from operating activities
Profit/(loss) before taxation	140	(1,334)
Depreciation	1,306	1,233
Amortisation	66	65
(Profit)/loss on disposal of property, plant and equipment	(78)	2
Finance income	(16)	-
Finance cost	278	394
Decrease/ (increase) in inventories	229	1,003
Decrease / (increase) in trade and other receivables	157	498
(Decrease) / Increase in trade and other payables	(582)	(1,687)
Contributions to defined benefit plans Current service cost of defined benefit plan	(413) 342	(380) 401
Cash generated from operations	1,429	195
Finance expense paid	(138)	(171)
Taxation paid	(42)	(84)
Net cash flow from operating activities	1,249	(60)
Cash flow from investing activities
Finance income received	16	-
Purchase of property, plant and equipment	(879)	(752)
Purchase of intangible assets	(46)	(36)
Sale of property, plant and equipment	250	-
Net cash flow from investing activities	(659)	(788)
Cash flow from financing activities
(Repayment of) / proceeds from new debt facility	- (718)	- 2,202
Repayment of loans	(432)	(472)
Dividends paid	-	(712)
Net cash flow from financing activities	(1,150)	1,018
Net (decrease) / increase in cash and cash equivalents	(560)	170
Cash and cash equivalents at beginning of year	1,093	923
Cash and cash equivalents at end of year	533	1,093
Cash and cash equivalents consist of:
Cash	533	1,093
Cash and cash equivalents at end of year	533	1,093

NOTES:

1.   Statutory Accounts

The financial information does not constitute statutory accounts as defined in section 435 of the Companies Act 2006, but has been extracted from the statutory accounts for the year ended 30 June 2014 on which an unqualified audit report has been issued and which will be delivered to the Registrar following their adoption at the Annual General Meeting.

The statutory accounts for the financial year ended 30 June 2013 have been delivered to the Registrar of Companies with an unqualified audit report and did not contain a statement under section 498 of the Companies Act 2006.

Copies of the 2014 Annual Report and Accounts will be posted to shareholders with the notice of the Annual General Meeting.  Further copies may be obtained by contacting the Company Secretary at Swallowfield plc, Swallowfield House, Station Road, Wellington, Somerset, TA21 8NL.  An electronic copy will be available on the Group's web site (www.swallowfield.com).

2.    Basis of preparation

The Group has prepared its consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and also in accordance with IFRS issued by the International Accounting Standards Board.  These financial statements have been prepared under the historical cost convention, modified to include the revaluation of certain non-current assets and financial instruments.

The Directors have considered trading and cash flow forecasts prepared for the Group, and based on these, and the confirmed banking facilities, are satisfied that the Group will continue to be able to meet its liabilities as they fall due for at least one year from the date of signing of these accounts.  On this basis, they consider it appropriate to adopt the going concern basis in the preparation of these accounts.

The consolidated financial statements are presented in sterling and all values are rounded to the nearest thousand (£'000) except where otherwise indicated.

3.   Basis of consolidation

The Group financial statements consolidate the financial statements of the Company and its subsidiary undertakings. The results and net assets of undertakings acquired or disposed of during a financial year are included in the Group Statement of Comprehensive Income and Group Statement of Financial Position from the effective date of acquisition or to the effective date of disposal.  Subsidiary undertakings have been consolidated using the purchase method of accounting.  In accordance with the exemptions given by section 408 of the Companies Act 2006, the Company has not presented its own Statement of Comprehensive Income.

4.   Accounting Policies

The principal accounting policies which apply in preparing the financial statements for the year ended 30 June 2014 are consistent with those disclosed in the Group's audited accounts for the year ended 30 June 2013, with the following exception. The 2011 amendments to IAS 19 made a number of changes to the accounting for employee benefits, the most significant relating to defined benefit plans. IAS 19 has been applied retrospectively in accordance with its transitional provisions. Consequently, the Group has restated its reported results throughout the comparative periods presented and reported cumulative effect as at 1 July 2012 as an adjustment to opening equity. 

5. Segmental Analysis

Management have determined that there is only one operating segment of the group as all sales, purchasing, production and operational decisions are taken based on the overall Group operating performance.  The results of this segment are as reported to the Chief Operating Decision Maker through the Group Statement of Comprehensive Income, Group Statement of Financial Position and Group Cash Flow Statement.  The distribution of the group's external revenue by destination is shown below and attributable to individual countries based on the location of the customer.

                                                                                                                                         2014                                              2013

                                                                                                                                        £'000                                             £'000

                                                   UK                                                       31,173                                           31,768

                       Other European Union countries                                                  16,559                                           15,160

                                                  Rest of the World                                                     2,301                                             1,663

                                                                                                                                       50,033                                           48,591

In the year ended 30 June 2014, the Group had two customers that exceeded 10% of total revenues, being 15% and 11% respectively.

6. (Loss) / Profit before taxation

                                                                                                                                            2014                                              2013

                                                                                                                                           £'000                                             £'000

(a) This is stated after charging/ (crediting)

                             Depreciation of property, plant

                     and equipment of purchased assets                                               1,306                                             1,233

                         Amortisation of intangible assets                                                       66                                                  65

                                   Research and development                                                    845                                                847

                         Foreign exchange (gains) / losses                                                    (62)                                                  27

                                                   Operating leases:

                                  Hire of plant and machinery                                                        95                                                113

                                                     Rent of buildings                                                         614                                                594

         (Gain) / loss on disposal of property, plant                                                    (78)                                                    2

                                                        and equipment                                                                                                                       

(b) Auditors' remuneration

Fees payable to the Company's auditors

for the audit of the Company financial statements                                               42                                                  41

Fees payable to the auditors of the subsidiary undertakings                                5                                                    4

Fees payable to the Company's auditors for other services:

                  Other services pursuant to legislation                                                        6                                                    6

                        Other services relating to taxation                                                        9                                                    9

(c) Earnings before interest, taxation, depreciation and amortisation ('EBITDA')

                             Operating profit / (loss) before

                                                    exceptional items                                                         768                                               (449)

                             Depreciation of property, plant                                                   1,306                                             1,233

                                                        and equipment                                                                                                                       

                         Amortisation of intangible assets                                                          66                                                  65

        (Gain) / loss on disposal of property, plant,                                                       (78)                                                   2

                                                        and equipment                                                                                                                       

EBITDA before exceptional operating items                                                          2,062                                                851

Exceptional operating items                                                                                        (366)                                             (491)

EBITDA after exceptional operating items                                                              1,696                                                360

Exceptional items relate to restructure of the Bideford site. This includes £264,000 of accelerated depreciation on fixed asset items and a £92,000 accrual for employee redundancies.

 

7. Taxation

		2014		2013 Restated
(a) Analysis of tax charge in the year		£'000		£'000
UK corporation tax:
- on profit for the year		-		(241)
- adjustment in respect of previous years		35		(63)
-foreign tax		94		84
-double tax relief		-		(12)
Total current tax charge		129		(232)
Deferred tax:
-current year (credit)/ charge		(76)		(173)
-prior year (credit) / charge		(72)		(21)
-effect of tax rate change on opening balance		2		2
Total deferred tax		(146)		(192)
Tax charge		(17)		(424)

(b) Factors affecting total tax charge for the year

The tax assessed on the profit before taxation for the year is lower (2013: lower) than the standard rate of UK corporation tax of 22.56% (2013: 23.75%).  The differences are reconciled below:

		2014		2013 Restated
		£'000		£'000
Profit/(loss) before taxation		140		(1,334)
Tax at the applicable rate of 22.56% (2013: 23.75 %)		32		(317)
Effect of:
Adjustment in respect of previous years		35		(63)
Adjustment to deferred tax in previous years		(72)		(21)
Differences between UK and foreign tax rates		(12)		(23)
Actual tax charge		(17)		(424)

 

8. Earnings per share

		2014		2013 Restated
Basic and Diluted
(Loss)/profit for the year (£'000)		157		(910)
Basic weighted average number of ordinary shares in issue during the year		11,306,416		11,306,416
		11,306,416		11,306,416
Basic earnings per share		1.4p		(8.1p)
Diluted earnings per share		1.4p		(8.1p)

Basic earnings per share has been calculated by dividing the (loss) / profit for each financial year by the weighted average number of ordinary shares in issue at 30 June 2014 and 30 June 2013 respectively.  There is no significant difference at 30 June 2014 between the basic net earnings per share and the diluted net earnings per share. 

		2014		2013
Adjusted earnings per share
Adjusted Profit/(loss) for the year (£'000)		440		(536)
Basic weighted average number of ordinary shares in issue during the year		11,306,416		11,306,416
		11,306,416		11,306,416
Basic earnings per share		3.9p		(4.7p)
Diluted earnings per share		3.9p		(4.7p)

Adjusted profit for the year of £0.44m is shown after adding back £0.28m in respect of exceptional items (exceptional items of £0.36m less notional tax credit of £0.08m on those items). Adjusted earnings per share has been calculated by dividing the adjusted profit of £0.44m by the weighted average number of ordinary shares in issue at 30 June 2014 and 30 June 2013 respectively. 

9. Note to Cash Flow Statement

Group
(a) Reconciliation of cash and cash equivalents to movement in net debt:
		2014				2013
		£'000				£'000
(Decrease)/ increase  in cash and cash equivalents		(560)				170
Net cash outflow / (inflow) from increase in borrowings		1,150				(1,730)
Change in net debt		590				(1,560)
Net debt at 1 July 2013		(5,667)				(4,107)
Net debt at 30 June 2014		(5,077)				(5,667)
(b) Analysis of net debt:		1 July 2013	Cash Flow	Non-Cash Movement		30 June 2014
		£'000	£'000	£'000		£'000
Cash at bank and in hand		1,093	(560)	-		533
Secured debt facility		(6,328)	718	-		(5,610)
Borrowings due within one year		(395)	395	-		-
Borrowings due after one year		(37)	37	-		-
		(5,667)	590	-		(5,077)

10. Annual General Meeting

The Annual General Meeting will be held on Thursday 13 November 2014 at the Company's Registered Office, at 12.00 noon.

 

END

 

 

FR EALNXFEXLEFF