Half Yearly Report

RNS Number : 9619Z

Games Workshop Group PLC

25 January 2011

 



PRESS ANNOUNCEMENT

GAMES WORKSHOP GROUP PLC

                                                                                                                   25 January 2011

HALF-YEARLY REPORT

Games Workshop Group PLC ("Games Workshop" or the "Group") announces its half-yearly results for the six months to 28 November 2010.

Highlights:

·      Revenue at £60.0m (2009: £62.5m)

·      Revenue at constant currency* at £59.5m (2009: £62.5m)

·      Gross margin at 76.7% (2009: 74.4%)

·      Operating profit pre-royalties receivable at £5.8m (2009: £6.9m)

·      Operating profit at £6.7m (2009: £8.1m)

·      Pre-tax profit at £6.7m (2009: £7.9m)

·      Earnings per share of 15.3p (2009: 21.5p)

·      Net funds of £11.5m (2009: £4.3m)

Mark Wells, CEO of Games Workshop, said:

"Sales fell by 4% although this was largely offset by gross margin improvements.  Efficiency initiatives were implemented in both sales and manufacturing operations.  Pre-tax profit was down £1.2 million to £6.7 million.  The focus remains on investing in Hobby centre openings and improving retail volume.  Cash generation remains strong."

…Ends…

For further information, please contact:
Games Workshop Group PLC		0115 900 4001
Mark Wells, CEO
Kevin Rountree, CFO
Investor relations website	investor.games-workshop.com
General website	www.games-workshop.com

*Constant currency revenue is calculated by comparing results in the underlying currencies for 2009 and 2010, both converted at the average exchange rates for the six months ended 29 November 2009.

FIRST HALF HIGHLIGHTS

	Six months to	Six months to
	28 November	29 November
	2010	2009
Revenue	£60.0m	£62.5m
Revenue at constant currency*	£59.5m	£62.5m
Operating profit pre-royalties receivable	£5.8m	£6.9m
Royalties receivable	£0.9m	£1.2m
Operating profit	£6.7m	£8.1m
Pre-tax profit	£6.7m	£7.9m
Basic earnings per share	15.3p	21.5p
Net funds	£11.5m	£4.3m

INTERIM MANAGEMENT REPORT

Results

Sales fell by 4% although this was largely offset by gross margin improvements.  Efficiency initiatives were implemented in both sales and manufacturing operations.  Pre-tax profit was down £1.2 million to £6.7 million.  The focus remains on investing in Hobby centre openings and improving retail volume.  Cash generation remains strong.

First half performance

Sales were down largely as a result of shortfalls in Northern Europe and North American retail following staffing changes in Games Workshop Hobby centres to reduce overheads.  Continental Europe made similar staff reductions in retail a year ago and that territory is in growth in the first half.  The emphasis is now on customer service training to deliver like for like sales growth in all territories.  A net 16 new Hobby centres under the low cost format were opened during the period.

Sales through independent retailers grew in Northern Europe and North America.  Elsewhere the picture for trade was mixed although both Italy and Japan have delivered a steady increase in new account openings.  The Web business has performed satisfactorily as it settles into its normal trading patterns following a major upgrade last year.  Forge World and Black Library delivered a strong performance, the latter consistently topping the UK and US science fiction charts with its Warhammer 40,000 novels.

The successful relocation of the North American sales office to the Memphis facility has reduced overheads and simplified central operations to support geographical growth across this territory.  With the restructure completed ahead of plan, Tom Kirby will hand over responsibility for the North American sales business to its new Head of Sales, Sandra Casey, and return to the UK with effect from 1 March 2011.

The decision was taken in the first half to close the Shanghai facility as the global cost benefits no longer justify its continuance.  The paint and resin manufacturing operations have been consolidated in our Nottingham factory thereby achieving greater operational efficiencies.  Gross margins remain healthy and continuous improvement programmes at the Nottingham manufacturing facility have helped offset significant raw material and carriage cost increases this year.

Since November 2009, sterling has weakened by 5.3% against the US dollar, strengthened by 7.3% against the euro and weakened by 10.7% against the Australian dollar.  The net effect of currency movements on sales is a gain of £0.5 million in comparison with last year's first half.  Sales progression is shown below in constant currency terms to permit a more meaningful comparison.

Prospects

As a niche business, Games Workshop, in general terms, neither benefits nor suffers from macro economic factors.  The challenge is to ensure that all the Hobby centres deliver sustainable growth and consequently enhanced recruitment, training and reward programmes have been developed to ensure more consistency in future.

The principal risks and uncertainties for the balance of the year lie in the ability of the sales businesses to establish and maintain sales growth and for the product development and manufacturing operation to maintain gross margin.  The Hobby is healthy and the challenge is to stay focused on what needs to be done to service it efficiently and cost effectively.

Games Workshop's core business model remains strong.  The initiatives taken in the sales businesses are designed ultimately to lead to higher volumes whilst efficiency measures are maintained.  The board remains confident in the future growth and profitability of the Group.

Statement of directors' responsibilities

The directors confirm that this condensed set of financial statements has been prepared in accordance with IAS 34 as adopted by the European Union, and that the interim management report herein includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8.

The directors of Games Workshop Group PLC are listed in the annual report for the year to 30 May 2010.  A list of the current directors is maintained on the investor relations website at investor.games-workshop.com.

By order of the board

M N Wells

CEO

K D Rountree

CFO

25 January 2011

*Constant currency revenue is calculated by comparing results in the underlying currencies for 2009 and 2010, both converted at the average exchange rates for the six months ended 29 November 2009.

REVENUE BY SEGMENT IN
CONSTANT CURRENCY
	Six months to 28 November 2010 £m	Six months to 29 November 2009 £m
Northern Europe	17.0	18.2
Continental Europe	18.4	17.7
North America	13.7	14.8
Australia	4.5	5.2
Emerging Markets and Japan	1.6	1.9
All other sales businesses	4.3	4.7

 

CONSOLIDATED INCOME STATEMENT

		Six months to	Six months to	Year to
		28 November	29 November	30 May
		2010	2009	2010
	Notes	£000	£000	£000
Revenue	2	60,035	62,539	126,511
Cost of sales		(13,995)	(16,014)	(30,683)
		----------	----------	----------
Gross profit		46,040	46,525	95,828
Operating expenses		(40,261)	(39,635)	(82,839)
Other operating income - royalties receivable		891	1,175	3,056
		----------	----------	----------
Operating profit	2	6,670	8,065	16,045
Finance income		103	16	442
Finance costs		(59)	(185)	(367)
		----------	----------	----------
Profit before taxation	4	6,714	7,896	16,120
Income tax expense	5	(1,948)	(1,189)	(1,040)
		----------	----------	----------
Profit attributable to equity shareholders		4,766	6,707	15,080
		======	======	======
Basic earnings per ordinary share	6	15.3p	21.5p	48.4p
Diluted earnings per ordinary share	6	15.1p	21.4p	48.1p

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

	Six months to	Six months to	Year to
	28 November	29 November	30 May
	2010	2009	2010
	£000	£000	£000
Profit attributable to equity shareholders	4,766	6,707	15,080
Other comprehensive income
Exchange differences on translation of foreign operations	(726)	498	1,885
Cash flow hedges:
- transferred to the income statement	-	112	112
Net investment hedge	-	(208)	-
Tax on items recognised directly in equity	-	27	(31)
	----------	----------	----------
Other comprehensive income for the period	(726)	429	1,966
	----------	----------	----------
Total comprehensive income for the period	4,040	7,136	17,046
	======	======	======

 

The following notes form an integral part of this condensed consolidated interim financial information.

CONSOLIDATED STATEMENT OF CHANGES IN TOTAL EQUITY

	Called up	Share
	share	premium	Other	Retained	Total
	capital	account	reserves	earnings	equity
	£000	£000	£000	£000	£000
At 31 May 2010	1,557	7,837	3,722	42,187	55,303
Profit for the six months to 28 November 2010	-	-	-	4,766	4,766
Exchange differences on translation of foreign operations	-	-	(726)	-	(726)
	----------	----------	----------	----------	----------
Total comprehensive income for the period	-	-	(726)	4,766	4,040
Transactions with owners:
Share-based payments	-	-	-	85	85
Shares issued under employee sharesave scheme	4	188	-	-	192
Dividends paid	-	-	-	(7,784)	(7,784)
	----------	----------	----------	----------	----------
Total transactions with owners	4	188	-	(7,699)	(7,507)
	----------	----------	----------	----------	----------
At 28 November 2010	1,561	8,025	2,996	39,254	51,836
	======	======	======	======	======

	Called up	Share
	share	premium	Other	Retained	Total
	capital	account	reserves	earnings	equity
	£000	£000	£000	£000	£000
At 1 June 2009	1,556	7,822	1,837	26,776	37,991
Profit for the six months to 29 November 2009	-	-	-	6,707	6,707
Exchange differences on translation of foreign operations	-	-	498	-	498
Cash flow hedges: - transferred to the income statement (net of tax)	-	-	-	81	81
Net investment hedge (net of tax)	-	-	(150)	-	(150)
	----------	----------	----------	----------	----------
Total comprehensive income for the period	-	-	348	6,788	7,136
Transactions with owners:
Share-based payments	-	-	-	68	68
Shares issued under employee sharesave scheme	-	4	-	-	4
	----------	----------	----------	----------	----------
Total transactions with owners	-	4	-	68	72
	----------	----------	----------	----------	----------
At 29 November 2009	1,556	7,826	2,185	33,632	45,199
	======	======	======	======	======

	Called up	Share
	share	premium	Other	Retained	Total
	capital	account	reserves	earnings	equity
	£000	£000	£000	£000	£000
At 1 June 2009	1,556	7,822	1,837	26,776	37,991
Profit for the year to 30 May 2010	-	-	-	15,080	15,080
Exchange differences on translation of foreign operations	-	-	1,885	-	1,885
Cash flow hedges: - transferred to the income statement (net of tax)	-	-	-	81	81
	----------	----------	----------	----------	----------
Total comprehensive income for the period	-	-	1,885	15,161	17,046
Transactions with owners:
Share-based payments	-	-	-	170	170
Shares issued under employee sharesave scheme	1	15	-	-	16
Deferred tax credit relating to share options	-	-	-	80	80
	----------	----------	----------	----------	----------
Total transaction with owners	1	15	-	250	266
	----------	----------	----------	----------	----------
At 30 May 2010	1,557	7,837	3,722	42,187	55,303
	======	======	======	======	======

The following notes form an integral part of this condensed consolidated financial information.

CONSOLIDATED BALANCE SHEET

		As at	As at	As at
		28 November	29 November	30 May
		2010	2009	2010
	Notes	£000	£000	£000
Non-current assets
Goodwill		1,433	1,433	1,433
Other intangible assets	10	5,416	5,391	5,889
Property, plant and equipment	11	22,278	24,243	23,264
Trade and other receivables		1,793	1,688	1,678
Deferred tax assets		5,509	5,242	5,917
		----------	----------	----------
		36,429	37,997	38,181
		----------	----------	----------
Current assets
Inventories		10,285	10,001	10,138
Trade and other receivables		11,634	12,617	10,043
Current tax assets		236	35	301
Financial assets - derivative financial instruments		-	61	-
Cash and cash equivalents	8	11,478	8,311	17,089
		----------	----------	----------
		33,633	31,025	37,571
		----------	----------	----------
Total assets		70,062	69,022	75,752
		----------	----------	----------
Current liabilities
Trade and other payables		(13,826)	(13,566)	(15,550)
Current tax liabilities		(693)	(2,909)	(1,027)
Provisions	12	(1,772)	(1,034)	(1,848)
		----------	----------	----------
		(16,291)	(17,509)	(18,425)
		----------	----------	----------
Net current assets		17,342	13,516	19,146
		----------	----------	----------
Non-current liabilities
Financial liabilities - borrowings	9	-	(4,000)	-
Other non-current liabilities		(485)	(562)	(582)
Provisions	12	(1,450)	(1,752)	(1,442)
		----------	----------	----------
		(1,935)	(6,314)	(2,024)
		----------	----------	----------
Net assets		51,836	45,199	55,303
		======	======	======
Capital and reserves
Called up share capital		1,561	1,556	1,557
Share premium account		8,025	7,826	7,837
Other reserves		2,996	2,185	3,722
Retained earnings		39,254	33,632	42,187
		----------	----------	----------
Total shareholders' equity		51,836	45,199	55,303
		======	======	======

The following notes form an integral part of this condensed consolidated interim financial information.

CONSOLIDATED CASH FLOW STATEMENT

		Six months to	Six months to	Year to
		28 November	29 November	30 May
		2010	2009	2010
	Notes	£000	£000	£000
Cash flows from operating activities
Cash generated from operations	7	7,488	10,864	29,787
UK corporation tax paid		(1,486)	(386)	(1,802)
Overseas tax paid		(593)	(652)	(1,417)
		----------	----------	----------
Net cash from operating activities		5,409	9,826	26,568
		----------	----------	----------
Cash flows from investing activities
Purchases of property, plant and equipment		(2,255)	(2,653)	(4,611)
Proceeds on disposal of property, plant and equipment		7	-	10
Purchases of other intangible assets		(188)	(52)	(900)
Expenditure on product development		(863)	(1,170)	(2,524)
Interest received		22	27	51
		----------	----------	----------
Net cash from investing activities		(3,277)	(3,848)	(7,974)
		----------	----------	----------
Cash flows from financing activities
Proceeds from issue of ordinary share capital		192	4	16
Repayment of borrowings		-	(8,000)	(12,000)
Repayment of principal under finance leases		-	(2)	(2)
Interest paid		(53)	(152)	(315)
Dividends paid to company's shareholders		(7,784)	-	-
		----------	----------	----------
Net cash from financing activities		(7,645)	(8,150)	(12,301)
		----------	----------	----------
Net (decrease)/increase in cash and cash equivalents		(5,513)	(2,172)	6,293
Opening cash and cash equivalents		17,089	10,355	10,355
Effects of foreign exchange rates on cash and cash equivalents		(98)	128	441
		----------	----------	----------
Closing cash and cash equivalents	8	11,478	8,311	17,089
		======	======	======

The following notes form an integral part of this condensed consolidated interim financial information.

 

NOTES TO THE FINANCIAL INFORMATION

1.          Basis of preparation

The Company is a limited liability company, incorporated and domiciled in the United Kingdom.  The address of its registered office is Willow Road, Lenton, Nottingham, NG7 2WS.

The Company has its listing on the London Stock Exchange.

This condensed consolidated interim financial information does not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006.  Statutory accounts for the year ended 30 May 2010 were approved by the board of directors on 26 July 2010 and have been delivered to the Registrar of Companies.  The report of the auditors on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under either section 498 (2) or section 498 (3) of the Companies Act 2006.

This condensed consolidated interim financial information has not been audited or reviewed pursuant to the Auditing Practices Board guidance on 'Review of Interim Financial Information' and does not include all of the information required for full annual financial statements.

This condensed consolidated interim financial information for the six months ended 28 November 2010 has been prepared in accordance with the Disclosure and Transparency Rules of the Financial Services Authority and with IAS 34, 'Interim Financial Reporting' as adopted by the European Union.  The condensed consolidated interim financial information should be read in conjunction with the annual financial statements for the year ended 30 May 2010 which have been prepared in accordance with IFRSs as adopted by the European Union.

This condensed consolidated interim financial information is available to shareholders and members of the public on the Company's website at investor.games-workshop.com.

Except as described below, the accounting policies applied are consistent with those of the annual financial statements for the year ended 30 May 2010, as described in those financial statements.

Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual earnings.

There are no new standards, amendments to standards or interpretations which are expected to have a significant impact on the Group.

2.          Segment information

The chief operating decision-maker has been identified as the executive directors.  They review the Group's internal reporting in order to assess performance and allocate resources.  Management has determined the segments based on these reports.

As Games Workshop is a vertically integrated business, management assess the performance of sales businesses and manufacturing and distribution businesses separately.  At 28 November 2010, the Group is organised as follows:

-       Sales businesses.  These businesses sell product to external customers, through the Group's network of Hobby centres, independent retailers and direct via the Global Web store.  The sales businesses have been aggregated into segments where they sell products of a similar nature, have similar production processes, similar customers, similar distribution methods and are affected by similar economic factors. The segments are as follows:

-       Northern Europe.  This sales business operates in the UK, Ireland and Scandinavia.

-       Continental Europe.  This combines the France, Germany, Italy, Spain and the Netherlands sales businesses.

-       North America.  This combines the United States and Canada sales businesses.

-       Australia.  This is the Australian sales business.

-       Emerging Markets and Japan.  This combines the Emerging Markets and Japan sales businesses.

-       Other.  This includes the other operating segments reviewed by the chief operating decision-maker.  These are the Forge World business, the Black Library business and Warhammer World. 

-       Product and supply.  This includes the design and manufacture of the products and incorporates production facilities in the UK, North America and China.

-       Logistics and stock management.  This represents the warehousing and distribution activities needed to supply product to the sales businesses and includes facilities in the UK, North America, China and Australia.

-       Licensing.  This is the net income receivable from third party licensees after deducting directly attributable costs.

-       Service centre.  The service centre is established in the UK to provide support services (IT, accounting, payroll, HR, production planning, supplier development, legal and property) to activities across the Group.

-       Web costs.  These are the costs associated with the running of the Games Workshop Global Web store.

-       Central costs.  These include the Company overheads, head office site costs and the costs of running the Games Workshop Academy.

The chief operating decision-maker assesses the performance of each business based on operating profit, excluding share option charges recognised under IFRS2, 'share-based payment'.  This has been reconciled to the Group's total profit before taxation below.

 

	Six months to	Six months to	Year to
	28 November	29 November	30 May
	2010	2009	2010
	£000	£000	£000
External revenue
Sales businesses
Northern Europe	16,999	18,250	36,769
Continental Europe	17,514	17,756	35,974
North America	14,520	14,840	31,270
Australia	5,032	5,159	10,795
Emerging Markets and Japan	1,647	1,857	3,416
All other sales businesses	4,323	4,677	8,287
	-------------	-------------	-------------
Total external revenue	60,035	62,539	126,511
	-------------	-------------	-------------
Internal revenue
Sales businesses
All other sales businesses	875	604	1,214
Other segments
Product and supply	30,303	27,744	52,071
	-------------	-------------	-------------
Total internal revenue	31,178	28,348	53,285
Intra-group sales eliminations	(31,178)	(28,348)	(53,285)
	-------------	-------------	-------------
Total revenue	60,035	62,539	126,511
	========	========	========

 

Segment revenue of £874,000 and segment profit of £182,000 for the Netherlands sales business for the six months to 29 November 2009 have been restated since the last interim report into Continental Europe rather than being shown in Northern Europe.  The segment results for the year to 30 May 2010 have not been restated as these already include the Netherlands sales business in Continental Europe.  Certain costs have been reclassified between product and supply, logistics and stock management, service centre costs and central costs for the six months to 29 November 2009 and the year to 30 May 2010 to reflect current management structures.  Overall group profit remains unchanged in both periods.

Segment revenue and segment profit include transactions between business segments; these transactions are eliminated on consolidation. Sales between segments are carried out at arm's length.  The revenue from external parties reported to the executive directors is measured in a manner consistent with that in the income statement.

Total segment operating profit is as follows and is reconciled to total profit before taxation below:
	Six months to	Six months to	Year to
	28 November	29 November	30 May
	2010	2009	2010
	£000	£000	£000
Operating profit
Sales businesses
Northern Europe	2,524	2,293	4,824
Continental Europe	1,328	669	635
North America	1,306	1,572	3,270
Australia	(159)	468	654
Emerging Markets and Japan	(251)	143	(174)
All other sales businesses	1,687	1,792	3,254
Other segments
Product and supply	11,356	10,850	20,865
	-------------	-------------	-------------
Total segment operating profit	17,791	17,787	33,328
Logistics and stock management	(4,939)	(4,836)	(8,824)
Licensing	550	993	2,546
Service centre costs	(2,914)	(2,601)	(5,453)
Web costs	(991)	(778)	(1,937)
Central costs	(2,742)	(2,432)	(3,445)
Share-based payments charge	(85)	(68)	(170)
	-------------	-------------	-------------
Total group operating profit	6,670	8,065	16,045
Finance income	103	16	442
Finance costs	(59)	(185)	(367)
	-------------	-------------	-------------
Profit before taxation	6,714	7,896	16,120
	========	========	========

3.             Dividends

A dividend of £7,784,000 (25.0 pence per share) was paid in the six months to 28 November 2010.  No interim dividend is proposed for the year ending 29 May 2011 (year ended 30 May 2010: £nil).

4.             Profit before taxation

The following costs have been incurred in the reported periods in respect of ongoing redundancies, impairments and loss-making Hobby centres:

	Six months to	Six months to	Year to
	28 November	29 November	30 May
	2010	2009	2010
	£000	£000	£000
Redundancy costs and compensation for loss of office	636	175	906
Impairment of property, plant and equipment	96	106	139
Net charge to property provisions for closed or loss-making Hobby centres	564	379	782

5.             Tax

The taxation charge for the six months to 28 November 2010 is based on an estimate of the full year effective rate of 29% reflecting higher overseas tax rates offset by deferred tax credits in respect of a proportion of losses previously unrecognised. (2009: 15%, reflecting a deferred tax credit in respect of a proportion of the US and Canadian losses previously unrecognised).

6.             Earnings per share

Basic earnings per share

Basic earnings per share is calculated by dividing the profit attributable to equity shareholders of the Company by the weighted average number of ordinary shares in issue throughout the relevant period. 

	Six months to	Six months to	Year to
	28 November	29 November	30 May
	2010	2009	2010
Profit attributable to equity shareholders (£000)	4,766	6,707	15,080
	-------------	-------------	-------------
Weighted average number of ordinary shares in issue (thousands)	31,146	31,130	31,131
	-------------	-------------	-------------
Basic earnings per share (pence per share)	15.3	21.5	48.4
	========	========	========

Diluted earnings per share

The calculation of diluted earnings per share has been based on profit attributable to equity shareholders and the weighted average number of shares in issue throughout the period, adjusted for the dilution effect of share options outstanding at the period end.

	Six months to				Six months to			Year to
	28 November				29 November			30 May
	2010				2009			2010
Profit attributable to equity shareholders (£000)	4,766			6,707			15,080
	-------------			-------------			-------------
Weighted average number of ordinary shares in issue (thousands)	31,146			31,130			31,131
Adjustment for share options (thousands)	317			165			220
	-------------			-------------			-------------
Weighted average number of ordinary shares for diluted earnings per share (thousands)	31,463	31,295				31,351
	-------------		-------------			-------------
Diluted earnings per share (pence per share)	15.1		21.4			48.1
	========		========			========

7.          Reconciliation of profit to net cash from operating activities

	Six months to	Six months to	Year to
	28 November	29 November	30 May
	2010	2009	2010
	£000	£000	£000
Operating profit	6,670	8,065	16,045
Depreciation of property, plant and equipment	2,979	3,567	6,772
Net impairment charge on property, plant and equipment	96	106	139
Loss on disposal of property, plant and equipment	33	11	91
Loss on disposal of intangible assets	-	26	18
Amortisation of capitalised development costs	818	1,273	2,438
Amortisation of other intangibles	594	363	952
Share-based payments	85	68	170
Changes in working capital:
-(Increase)/decrease in inventories	(407)	640	1,004
-(Increase)/decrease in trade and other receivables	(1,496)	(2,548)	122
-(Decrease)/increase in trade and other payables	(1,854)	(786)	1,601
-(Decrease)/increase in provisions	(30)	79	435
	----------	----------	----------
Net cash from operating activities	7,488	10,864	29,787
	======	======	======

 

8.             Cash and cash equivalents

Cash, cash equivalents and bank overdrafts include the following for the purposes of the cash flow statement:

	28 November	29 November	30 May
	2010	2009	2010
	£000	£000	£000
Cash and cash equivalents	11,478	8,311	17,089
	======	======	======

9.             Financial liabilities - borrowings

	28 November	29 November	30 May
	2010	2009	2010
	£000	£000	£000
Non-current
Bank loans	-	4,000	-
	----------	----------	----------
Total borrowings	-	4,000	-
	======	======	======

Bank loans represent a medium-term revolving credit facility which can be drawn in both sterling and euros.  This facility is secured on UK assets.

10.                   Other intangible assets

	28 November	29 November	30 May
	2010	2009	2010
	£000	£000	£000
Net book value at beginning of period	5,889	5,811	5,811
Additions	1,051	1,222	3,424
Exchange differences	(11)	20	62
Disposals	-	(26)	(18)
Amortisation charge	(1,412)	(1,636)	(3,390)
Reclassifications	(101)	-	-
	----------	----------	----------
Net book value at end of period	5,416	5,391	5,889
	======	======	======

11.           Property, plant and equipment

	28 November	29 November	30 May
	2010	2009	2010
	£000	£000	£000
Net book value at beginning of period	23,264	25,380	25,380
Additions	2,198	2,483	4,546
Exchange differences	(170)	64	350
Disposals	(40)	(11)	(101)
Charge for the period	(2,979)	(3,567)	(6,772)
Impairment	(96)	(106)	(139)
Reclassifications	101	-	-
	----------	----------	----------
Net book value at end of period	22,278	24,243	23,264
	======	======	======

12.           Provisions

Analysis of total provisions:

	28 November	29 November	30 May
	2010	2009	2010
	£000	£000	£000
Current	1,772	1,034	1,848
Non-current	1,450	1,752	1,442
	----------	----------	----------
	3,222	2,786	3,290
	======	======	======

		Employee
	Redundancy	benefits	Property	Total
	£000	£000	£000	£000
As at 1 June 2009	98	868	1,666	2,632
(Credited)/charged to the income statement	(20)	7	379	366
Exchange differences	3	32	12	47
Increase in provision - discount unwinding	-	-	28	28
Utilised	(7)	(13)	(267)	(287)
	----------	----------	----------	----------
As at 29 November 2009	74	894	1,818	2,786
	======	======	======	======

		Employee
	Redundancy	benefits	Property	Total
	£000	£000	£000	£000
As at 1 June 2009	98	868	1,666	2,632
Charged/(credited) to the income statement	142	(15)	782	909
Exchange differences	10	38	119	167
Increase in provision - discount unwinding	-	-	57	57
Utilised	(7)	(33)	(435)	(475)
	----------	----------	----------	----------
As at 30 May 2010 and 31 May 2010	243	858	2,189	3,290
Charged to the income statement	23	18	564	605
Exchange differences	(12)	6	(47)	(53)
Increase in provision - discount unwinding	-	-	15	15
Utilised	(139)	-	(496)	(635)
	----------	----------	----------	----------
As at 28 November 2010	115	882	2,225	3,222
	======	======	======	======

 

13.    Seasonality

The Group's monthly sales profile demonstrates an element of seasonality around the Christmas period.  This impacts sales in the months of September and December.

14.   Commitments

Capital expenditure contracted for at the balance sheet date but not yet incurred is £569,000 (2009: £nil).

15.   Post balance sheet events

Since the balance sheet date the Company has cancelled the £5,000,000 revolving credit facility.  The uncommitted working capital facility of £3,000,000 (including an overdraft facility of £2,500,000) remains in place and is available until 31 July 2011.

16.   Related-party transactions

There were no material related-party transactions during the period.

 

END

 

 

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