Half Yearly Report

RNS Number : 3992F

John Lewis Of Hungerford PLC

26 April 2011

 



JOHN LEWIS OF HUNGERFORD PLC

("John Lewis of Hungerford" or the "Company")

Interim results - period ended 28 February 2011

CHAIRMAN'S STATEMENT

In the face of the continued challenging economic conditions I am pleased to be able to report that the business has built on the  positive  momentum of the last full financial year. Like for like sales are some 9% ahead of last year, which combined with the impact of new stores openings have contributed to the overall 18% growth in sales. Operating loss before the impact of share based payments has further narrowed and with a strong order book, the Board considers the business well positioned to build on the first half year. Nevertheless the current economic climate requires caution to be exercised and your Board remain alert to the risk presented by continuing weak consumer confidence.

As  previously reported, a key highlight during the period was the opening of our new showroom during November 2010 in Beaconsfield, Buckinghamshire. We are pleased with the showrooms initial trading and also trading at our Blackheath store which opened in August 2010. This validates the Board's strategy of seeking to complement organic growth through selective investment in new stores. Wider problems in the retail sector inevitably presents opportunities for further store openings, although your Board will continue to adopt a cautious approach taking into account the general economic conditions and the financial performance of the existing business.

The overall gross profit margin of the business in the 6 months to 28th February 2011 was 52.7% compared to 52.3% in 2010. This increase in gross margin is a result of increased  efficiencies  in production and reduced overtime costs. The Normalised Loss before taxation, share based payments and interest was £62k (2010 - £153k). The charge in respect of share based payments for the period amounted to  £53k (2010 - £81k) although your Board continues to  believe the arbitrary nature of the accounting methodology in arriving at this charge means it has little meaningful relevance to the reported financial results. The reduced loss was driven by both an increase in our core product sales which  increased  by 12.6%  to  £2,376k (2010: £2,110k)  and  The  Artisan  Installation Service  which has significantly increased sales of £341k (2010: £188k), giving total sales of £2,717k (2010: £2,298k).

Net cash inflow for the half year was £107k (2010: £330k  outflow) and at the balance sheet date, cash in bank stood at £925k (2010: £454k). This increase reflects the higher value of forward orders for the year compared with last year. Capital expenditure in the period was £104k (2010 - £79k) reflecting investments made in one new showroom and the factory.

Our sales and future order book look healthy with customer interest in our brand remaining strong and this is reflected in our advance order book which as of 28th February 2011 is some 20% ahead of last year. This reflects both the growth in our business and investment made in strengthening the customer facing teams  in some  of our  showrooms.  However, we are operating in difficult, if not unprecedented, economic times and so it is very difficult to predict the future with any degree of certainty. In particular the Board is vigilant of margin pressures through increases in raw material costs.

Nevertheless your Board continues to believe the strength of the John Lewis of Hungerford brand coupled with the expanded product range at reasonable prices means the business is well positioned to face the future with confidence.

Malcolm Hepworth

Chairman

26 April 2011

Enquiries:
Malcolm Hepworth, Chairman		John Lewis of Hungerford plc	01235 774300
Barrie Newton	Smith & Williamson Corporate Finance (Broking)		0117 376 2213
Nick Reeve, Martyn Fraser	Smith & Williamson Corporate Finance (Nomad)		0117 376 2213

PROFIT AND LOSS ACCOUNT

FOR THE SIX MONTHS ENDED 28 FEBRUARY 2011

			Unaudited 6 months ended				Audited   Year   ended
			28 February   2011   £'000		28 February   2010   £'000		31 August   2010   £'000
	Note
Turnover			2,717		2,298		5,355
Cost of sales			(1,284)		(1,097)		(2,516)
Gross profit			1,433		1,201		2,839
Selling and distribution costs			(179)		(242)		(475)
Administration expenses:
Share based payments			(53)		(81)		(154)
Other			(1,316)		(1,112)		(2,333)
Total			(1,369)		(1,193)		(2,487)
Operating profit before share based payments			(62)		(153)		31
Operating loss			(115)		(234)		(123)
Interest receivable			1		13		4
Interest payable			(18)		(9)		(8)
Loss on ordinary activities before taxation			(132)		(230)		(127)
Taxation			-		-		(16)
Loss on ordinary activities after taxation			(132)		(230)		(143)
Loss per share	3
Basic			(0.07)p		(0.12)p		(0.08)p
Fully diluted			(0.07)p		(0.12)p		(0.08)p

BALANCE SHEET

AS AT 28 FEBRUARY 2011

	Unaudited   28 February   2011   £'000		Unaudited   28 February   2010   £'000		Audited   31 August   2010   £'000
Fixed assets
Intangible assets	6		10		8
Tangible assets	1,805		1,715		1,799
	1,811		1,725		1,807
Current assets
Stocks	796		644		688
Debtors	315		314		273
Cash at bank and in hand	925		454		818
	2,036		1,412		1,779
Creditors: amounts falling due within one year	(1,597)		(1,215)		(1,253)
Net current assets	439		197		526
Total asset less current liabilities	2,250		1,922		2,333
Creditors: amounts falling due after more than one year	(473)		(243)		(477)
Provisions for liabilities and charges	(16)		-		(16)
Total net assets	1,761		1,679		1,840
Capital and Reserves
Called up share capital	187		187		187
Other reserves	1		1		1
Share premium account	1,188		1,188		1,188
Share based payment reserve	-		404		-
Profit and Loss account	385		(101)		464
Shareholders funds - all equity interests	1,761		1,679		1,840

CASH FLOW STATEMENT

FOR THE SIX MONTHS ENDED 28 FEBRUARY 2011

	Unaudited   6 months   ended   28 February   2011   £'000		Unaudited   6 months   ended   28 February   2010   £'000		Audited   Year   ended   31 August   2010   £'000
Operating loss	(115)		(234)		(123)
Depreciation and amortisation	100		88		176
Share based payments	53		81		154
Increase in Stock	(108)		(48)		(92)
(Increase) / decrease  in Debtors	(42)		(28)		13
Increase / (decrease) in Creditors	334		(172)		(114)
Profit on disposal of tangible fixed assets	-		-		(3)
Net cash inflow / (outflow) from operating activities	222		(313)		11
Returns on investment and servicing of finance	(17)		4		(10)
Corporation tax refunded	10		48		48
Capital expenditure	(104)		(79)		(249)
Financing	(4)		10		234
Increase / (decrease) in cash	107		(330)		34

NOTES:

1.   The interim accounts, which are unaudited, have been prepared under the historical cost convention using the accounting policies set out in the accounts for the year ended 31 August 2010.

2.   Basic and fully diluted loss per ordinary share is calculated as follows:

	6 months   ended   28 February   2011		6 months   ended   28 February   2010		Year   ended   31 August   2010
Loss attributable to ordinary shareholders (£'000)	(132)		(230)		(143)
Weighted average number of shares in issue	186,745,519		186,745,519		186,745,519
Loss per ordinary share (pence)	(0.07)p		(0.12)p		(0.08)p

3.   Copies of the 2011 interim accounts will be available toshareholders on the Company's website www.john-lewis.co.uk

 

END

 

 

IR PGUAUCUPGGQG