Interim Results

Creightons PLC 28 November 2007 Creightons plc Interim financial report For the six months ended 30 September 2007 Chairman's Statement We have continued our drive to expand the business, so I am very pleased to report to you that this has resulted in an increase in sales over the past six months of over 30% generating £6,477,000 (2006 £4,944,000) sales in the half year to 30th September 2007. This organic growth has been achieved across all areas of our business, the main contributing factors being range launches with a major UK High Street supermarket and the introduction of a major drugstore chain as a new private label customer. This growth has been achieved in a period where the retail sales environment has become increasingly challenging and where increases in raw material costs, particularly for oil-price based products which constitute a major proportion of our product costs, are seriously eroding margins. As I have told you in previous reports, we decided several years ago to invest in our production, technical and sales teams to support the expansion of our branded business, including in particular the continued development of The Real Shaving Company brand which we first launched in December 2004, and subsequently gained several industry awards for this new and innovative brand. In May 2007 we established a subsidiary in the US to manage development of our brands into the North American market. Their sales in the six months to 30th September were £118,000 (2006: £nil) mostly from the launch of The Real Shaving Company range into a major Canadian retail chain in September. This means that The Real Shaving Company brand is now listed in over 3,000 stores in the UK and North America. We have made significant investment in developing opportunities across America. We anticipate a successful product listing will be achieved with a major US retail chain in the immediate future, which will continue the progress in developing equity in the brand. We have also continued to drive the development of the premium Potter & Moore brand in the UK and export markets, with product listings in many premium department stores. Whilst most of the brand ranges developed last year have been successful one range has not met expectations and we have commenced a planned withdrawal of this product which will continue into the second half of the year. Given the industry norm of failure for new brands of more than four out of every five new brand launches, this clearly vindicates your board's approach to new brand introduction. We have increased resources in production to meet the increase in demand and in sales and technical departments to facilitate our ability to drive the business and meet the technical requirements of supporting our customers. The impact of these changes is to increase overheads. We have achieved a Soil Association accreditation in the period which will help progress sales opportunities in the fast growing organic sector. Our operating loss in the period has decreased by £45,000 (31%) to £99,000 (2006:£144,000) compared to last year. This is a creditable improvement taking into consideration the investments made in the business and the pressure on gross margins. It should be noted that the Group trades at a loss in the first half ahead of the seasonally stronger second half. We have made significant investment in inventories to meet the demands of new product launches and new customers. The increase in inventories relates to seasonal stock build, with stock levels excluding seasonal stocks falling by £323,000 since March 2007. We anticipate that our programme to reduce stocks in a planned manner will produce further reductions in the second half of the year. Higher interest rates and increased costs to support the investment in stocks have resulted in an increased interest charge of £50,000 compared with the same period last year. I therefore believe that this half year's pre-tax loss at £179,000 (2006: loss of £174,000), whilst disappointingly a small increase on last year's, provides a good base for the second half of the year. W O McIlroy Executive Chairman 27 November 2007 Creightons plc Interim financial report For the six months ended 30 September 2007 Consolidated income statement - unaudited Six months ended 30 September Year ended 31 March 2007 2006 2007 Note £000 £000 £000 Revenue 6,477 4,944 12,917 Cost of sales (3,946) (2,910) (7,789) Gross profit 2,531 2,034 5,128 Distribution costs (222) (157) (378) Administration costs (2,408) (2,021) (4,289) (Loss)/profit from operations (99) (144) 461 Investment revenues - - 1 Finance costs (80) (30) (79) (Loss)/profit before tax (179) (174) 383 Tax - - - (Loss)/profit for the period attributable to the equity (179) (174) 383 holders of the parent company Earnings per share Basic 2 (0.33p) (0.32p) 0.71p Diluted 2 (0.30p) (0.30p) 0.65p Consolidated statement of recognised income and expense Six months ended 30 September Year ended 31 March 2007 2006 2007 £000 £000 £000 Exchange differences on translation of foreign operations (2) - - Net income recognised directly in equity (2) - - (Loss)/profit for the period (179) (174) 383 Total recognised income and expense for the period (181) (174) 383 attributable to the equity holders of the parent company Creightons plc Interim financial report 30 September 2007 Consolidated balance sheet - unaudited 30 September 31 March 2007 2006 2007 £000 £000 £000 Non-current assets Goodwill 331 331 331 Other intangible assets 75 75 136 Property, plant and equipment 534 448 517 940 854 984 Current assets Inventories 4,485 3,434 3,813 Trade and other receivables 2,313 1,669 2,056 Cash and cash equivalents 33 93 14 6,831 5,196 5,883 Total assets 7,771 6,050 6,867 Current liabilities Trade and other payables 2,365 1,903 2,359 Obligations under finance leases 13 11 11 Short term borrowings 3,010 2,140 1,951 Derivative financial instruments 17 - 4 5,405 4,054 4,325 Non-current liabilities Long term borrowings 45 45 40 45 45 40 Total liabilities 5,450 4,099 4,365 Net assets 2,321 1,951 2,502 Equity Share capital 543 543 543 Share premium account 1,229 1,229 1,229 Capital redemption reserve 18 18 18 Capital reserve 7 7 7 Special reserve 13 13 13 Share-based payment reserve 52 58 52 Retained earnings 459 83 640 Total equity available to the holders of the parent 2,321 1,951 2,502 company Creightons plc Interim financial report For the year ended 30 September 2007 Statement of changes in shareholders equity - unaudited Share Share Other Share-based Retained Total capital premium reserves payment earnings reserve £000 £000 £000 £000 £000 Balance at 1 April 2006 543 1,229 38 47 290 2,147 Prior year adjustment - - - - (33) (33) Balance at 1 April 2006 - restated 543 1,229 38 47 257 2,114 Loss for six months ended 30 September - - - - (174) (174) 2006 Credit to equity for share based - - - 11 - 11 payments Balance at 30 September 2006 543 1,229 38 58 83 1,951 Profit for six months ended 31 March - - - - 557 557 2007 Debit to equity for share based - - - (6) - (6) payments Balance at 31 March 2007 543 1,229 38 52 640 2,502 Loss for six months ended 30 September - - - - (179) (179) 2006 Credit to equity for share based - - - - - - payments Exchange differences on translation of - - - - (2) (2) foreign operations Balance at 30 September 2007 543 1,229 38 52 459 2,321 Creightons plc Interim financial report For the year ended 30 September 2007 Consolidated cash flow statement - unaudited Six months ended Year ended 30 September 31 March 2007 2006 2007 £000 £000 £000 Net cash (outflow) from operating activities (839) (1,646) (1,310) Cash flow from investing activities Proceeds on disposal of property, plant and equipment - 8 8 Purchase of property, plant and equipment (60) (126) (251) Expenditure on intangible assets (7) (24) (107) Net cash (used in) investing activities (67) (142) (350) Cash flow from financing activities Repayment of borrowings (7) (1) - Repayment of finance lease obligations (6) (3) (14) Increase/(decrease) in bank overdrafts 859 1,808 1,611 Net cash from financing activities 846 1,804 1,597 Net (decrease)/increase in cash and cash equivalents (60) 16 (63) Cash and cash equivalents at start of period 93 77 77 Cash and cash equivalents at end of period 33 93 14 Creightons plc Interim financial report For the year ended 30 September 2007 Notes to the interim financial report 1. Basis of preparation The financial statements presented in this Interim Report has been prepared in accordance with the Group's accounting policies under International Reporting standards (IFRS) as set out in the financial statements for the year ended 31 March 2007. The interim financial statements for the six months ended 30 September 2007 and the comparative figures for the six months ended 30 September 2006 are unaudited. The summary financial statements for the year ended 31 March 2007 represent an abbreviated version of the Group's full financial statements for that year, on which the Auditors issued an unqualified report and which have been filed with the Registrar of Companies. 2. Earnings per share The calculation of the basic and diluted earnings per share is based on the following data: Six months ended Year ended 30 September 31 March 2007 2006 2007 £000 £000 £000 Earnings Net (loss)/profit attributable to the equity holders of (179) (174) 383 the parent company Six months ended Year ended 30 September 31 March 2007 2006 2007 Number Number Number Number of shares Weighted average number of ordinary shares for the 54,275,876 54,275,876 54,275,876 purposes of basic earnings per share Effect of dilutive potential ordinary shares relating 5,376,550 4,256,550 4,256,550 to Share options Weighted average number of ordinary shares for the 59,652,426 58,532,426 58,532,426 purposes of diluted earnings per share 3. Availability of Interim Report The Interim Report is being sent to shareholders. Further copies can be obtained from the Company's Registered Office, 1210 Lincoln Road, Peterborough, Cambridgeshire, PE4 6ND. This information is provided by RNS The company news service from the London Stock Exchange

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