Interim Results

St. Ives PLC 11 April 2006 11 April 2006 ST IVES plc Interim Results for the 26 weeks ended 27 January 2006 St Ives plc, the UK's leading printing group, announces interim results for the 26 weeks ended 27 January 2006. Key Points â€¢ Revenue Â£205.2m (2005: Â£210.8m) â€¢ Pre tax profit Â£15.6m (2005: Â£20.6m) â€¢ Underlying* pre tax profit Â£12.8m (2005: Â£18.9m) â€¢ Basic earnings per share 10.24p (2005: 13.75p) â€¢ Underlying* earnings per share 8.36p (2005: 12.13p) â€¢ Interim dividend maintained at 5.00p per share *before restructuring costs and provision releases Commenting on the results, Chairman, Miles Emley said: 'With most of our markets continuing to experience over-capacity and intense downward pressure on pricing, we are increasing our focus on those parts of our business which supply customers with bespoke added value distribution, logistics and fulfilment services in addition to printed products. These markets have experienced more stable conditions and will, we believe, continue to offer more attractive returns. 'Our record of investment is unrivalled in our industry, our financial strength is second to none and our commitment to service is paramount. On the basis of these solid foundations, we expect to weather the current challenging conditions more successfully than our competitors and, in due course, to generate improving returns for our shareholders.' For further information contact: St Ives plc Miles Emley, Chairman Brian Edwards, Managing Director 020 7928 8844 Smithfield John Antcliffe 020 7360 4900 Results The results for the twenty six weeks ended 27 January 2006 show revenue of Â£205.2 million (2005 - Â£210.8 million) and profit before taxation of Â£15.6 million (2005 - Â£20.6 million). Profit before taxation and restructuring costs and provision releases was Â£12.8 million (2005 - Â£18.9 million). Restructuring costs and provision releases (before taxation) amounted in total to a credit of Â£2.8 million, representing the profit on sale of surplus assets and the release of provisions no longer required for previous business consolidations. Basic earnings per share were 10.24p (2005 - 13.75p). Earnings per share before provision releases and restructuring costs were 8.36p (2005 - 12.13p). For the first time our results are reported in accordance with International Financial Reporting Standards and the prior year's figures have been restated accordingly. In compliance with IFRS, segmental analysis is provided by reference to the three market segments which we supply - Media Products, Commercial Products and USA. Dividend An interim dividend of 5.00p per share (2005 - 5.00p per share) has been declared and will be paid on 19 May 2006 to shareholders on the register on 21 April 2006. Trading Conditions Most of our markets continued to experience over-capacity and intense downward pressure on pricing, especially in the case of longer-run and less time-sensitive products, both in the UK and the USA. Those parts of our businesses supplying customers with particularly demanding service requirements and complex distribution and fulfilment needs experienced more stable conditions. Our businesses in South Florida were disrupted for significant periods by power outages and telecommunications failures as a result of hurricanes in the autumn of 2005. Media Products Total revenue from Media Products was Â£99.2 million, 7.0 per cent below the previous year. The reduced revenues reflected the transfer of the Crayford point-of-sale business to SP Group at Redditch (included amongst Commercial Products below), lower sales of music and multimedia products from our facility in Holland and reduced sales of magazines and supplements. Profit before interest, restructuring costs and provision releases from this sector was Â£13.9 million, 4.0 per cent below the prior year. Books Book revenue was ahead of that achieved in the first half of last year; sales of cased books to the UK trade market, for which we again produced a high proportion of best-selling titles, were particularly strong. Some downward pressure on price was offset by increased volume, which enabled us to improve utilisation. Magazines Up to mid-December, magazine volumes were maintained at levels similar to those experienced in the same period in the previous year, although pricing pressure continued. We retained all the magazine work previously produced at St Ives Caerphilly, which closed towards the end of our last financial year. Shortly before Christmas magazine paginations reduced significantly and the resulting lower level of activity and unsatisfactory utilisation continued into January. The benefits of the cost reductions implemented last year were offset by price erosion and, more recently, weakening demand. Returns were below those achieved in the prior year. Music and Multimedia Revenue from special packaging mainly for DVD products grew, as music publishers and motion picture companies sought to exploit their back catalogues more effectively. This increase offset declining demand for standard music packaging. We also experienced a sharp reduction in demand, especially for computer games-related products, shortly before Christmas. Lower sales in Holland resulted from the decision of a major customer to produce more of its work in-house. Improved returns in the UK reflected the transfer of point-of-sale work to Redditch and the benefit of the cost reductions of the prior year which helped to improve utilisation, while returns in Holland fell as a result of lower levels of activity. Commercial Products Total revenue from Commercial Products was Â£72.7 million, 2.7 per cent above the prior year, which included revenue of Â£9.7 million from Johler Druck (disposed of in April 2005). The increase in sales reflected strong growth in our point-of-sale business (as well as the transfer of the business previously carried out at Crayford) and some growth in commercial and direct response sales, partly offset by a further reduction in financial printing activity, particularly for corporate financial markets. Profit before interest, restructuring costs and provision releases from this sector was Â£1.4 million, as compared with Â£1.9 million in the prior year, reflecting further severe price pressure in our less specialist markets and unsatisfactory utilisation. Direct Response and Commercial Revenue from direct response and commercial markets increased but mainly in longer-run, more commoditised products and in the face of continuing fierce pricing pressure. Demand for direct mail and other more specialist products, especially from the financial services sector, was weak. As a result of the change in the mix of business, returns deteriorated. Financial In both the UK and USA corporate financial print activity levels remained subdued and pricing reached unsustainable levels, especially for the few larger, high profile deals that did occur. In the face of lower sales brought about by continuing weakness in volumes and pricing, losses continued despite the reductions in our cost base achieved in prior years. Point-of-Sale Point-of-sale revenue has grown significantly, partly as a result of our winning a contract to supply Marks & Spencer with all its point-of-sale requirements with effect from the beginning of August, but we have also increased levels of business undertaken for existing customers. The results reflect a full six months' contribution from SP Group (only twenty weeks in the first half of the previous year). Profit has grown, albeit more slowly than revenue, as we operated at less than optimal efficiency while assimilating the business transferred from Crayford, taking on Marks & Spencer's printing plant at Burnley and establishing our new logistics facility at Redditch. In addition, in the run-up to the Christmas period a number of customers made significant last minute changes to their specifications which made utilisation a challenge. USA Total revenue from our US businesses serving commercial, point-of-sale and magazine markets reduced in real terms by 5.0 per cent, reflecting the extremely competitive environment, but at Â£34.7 million was in line with last year when converted into sterling. Pricing pressure for non-recurring work was especially intense. As previously announced, our businesses in South Florida experienced significant disruption as a result of hurricanes in the autumn of 2005, which made it necessary to place a considerable volume of work out at significant cost in order to meet customers' needs. As a consequence we incurred a loss of Â£0.5 million before interest, restructuring costs and provision releases, as compared with a profit of Â£2.4 million in the first half of the previous year. Balance Sheet, Cash Flow and Investment We continued to invest throughout our business to lower our cost of production. Capital expenditure, together with the cost of the acquisition of the premises and plant comprising Marks & Spencer's printing facility at Burnley, amounted to approximately Â£23 million in the half year under review. Nonetheless our operating cash flow and balance sheet remain strong. Net debt at the end of the half year amounted to Â£20.8 million, reduced from Â£23.5 million at the start of the year, after dividend payments and despite significant capital expenditure, helped by proceeds from asset disposals. Outlook Over-capacity and fierce price competition continue to characterise most of our markets on both sides of the Atlantic, especially for longer-run and less time-sensitive products. Against this background, we continue to invest in our business to reduce the cost of production and to develop additional services which will enable us to reduce our customers' overall costs while providing us with improved returns. Wherever possible, we are providing bespoke added value services, usually involving complex distribution, logistics or fulfilment solutions for our customers. Examples of investment to this end include the new logistics facility at Redditch and our new mailing operation at Roche, both of which started operations during the half year under review. Since the period end, we have launched St Ives Group Sales which will enable customers who so wish to access all the Group's facilities and services through a single portal. This initiative is fully supported by on-line systems which enable customers to manage their pre-press workflow and to access asset management, artwork creation, order processing, inventory control and other applications in real-time. Amongst Media Products, the outlook for book markets is steady and our own market position remains unequalled. We expect the magazine market to remain extremely competitive and since the half year end as a result of our unwillingness to agree to prices which we do not consider to be sustainable certain contracts have not been renewed. In this market we are increasing our focus on shorter-run, more specialist titles for customers for whom consistent quality and reliable service are important. As always, there is limited forward visibility in the market for music and multimedia products, although we have recently increased the proportion of our revenues from these products which are under long-term agreements. Amongst Commercial Products, there is no sign of any improvement in the market for commercial, mail order and personalised products, although this is the area where we expect St Ives Group Sales to begin to make the most impact. Corporate financial markets in both the UK and USA continue to see low levels of activity and extremely competitive pricing. We are increasing our share of the market for company Annual Reports. The demand for point-of-sale products is steady and we expect to grow our business further and improve our returns on the strength of the range and responsiveness of our service. In the USA, the markets served by our commercial businesses remain intensely competitive. Our record of investment is unrivalled in our industry, our financial strength is second to none and our commitment to service is paramount. On the basis of these solid foundations, we expect to weather the current challenging conditions more successfully than our competitors and, in due course, to generate improving returns for our shareholders. Miles Emley Chairman 11 April 2006 CONSOLIDATED INCOME STATEMENT 26 weeks to 27 January 2006 ----------------------------------------------- Before Restructuring restructuring costs and 26 weeks 52 weeks costs and provision to to provision releases 28 January 29 July releases (note 6) Total 2005 2005 ------------ ------------ ----------- ------------ ----------- Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Revenue (note 2) +----------+ +---------+ +---------+ +----------+ +---------+ Existing activities | 201,019 | | - | | 201,019 | | 210,815 | | 419,477 | Acquired activities | 4,132 | | - | | 4,132 | | - | | - | +----------+ +---------+ +---------+ +----------+ +---------+ 205,151 - 205,151 210,815 419,477 Cost of sales (152,901) (113) (153,014) (155,431) (315,661) ------------ ------------ ----------- ------------ ----------- Gross profit 52,250 (113) 52,137 55,384 103,816 Sales and distribution costs (14,557) 8 (14,549) (14,160) (29,337) Administrative expenses (23,404) 300 (23,104) (20,585) (44,921) Other operating income +-----------+ +---------+ +---------+ +----------+ +---------+ Profit on disposal of fixed | | | | | | | | | | assets | - | | 2,084 | | 2,084 | | 626 | | 626 | Other income | 316 | | 481 | | 797 | | 366 | | 648 | +-----------+ +---------+ +---------+ +----------+ +---------+ 316 2,565 2,881 992 1,274 ------------ ------------ ----------- ------------ ----------- Profit from operations (note 2) +-----------+ +---------+ +---------+ +----------+ +---------+ Existing activities | 14,167 | | 2,760 | | 16,927 | | 21,631 | | 30,832 | Acquired activities | 438 | | - | | 438 | | - | | - | +-----------+ +---------+ +---------+ +----------+ +---------+ 14,605 2,760 17,365 21,631 30,832 Loss on disposal of subsidiary - - - - (8,135) Investment income 4,627 - 4,627 4,189 8,336 Finance costs (6,409) - (6,409) (5,254) (10,794) ------------ ------------ ----------- ------------ ----------- Profit before taxation 12,823 2,760 15,583 20,566 20,239 Income tax expense (note 3) (4,206) (828) (5,034) (6,426) (8,775) ------------ ------------ ----------- ------------ ----------- Profit for the period 8,617 1,932 10,549 14,140 11,464 ============ ============ =========== ============ =========== Basic earnings per share (note 5) 10.24p 13.75p 11.14p =========== ============ =========== Diluted earnings per share (note 5) 10.24p 13.74p 11.13p =========== ============ =========== Comparative figures for the twenty six weeks to 28 January 2005 and fifty two weeks to 29 July 2005 include restructuring costs and provision releases as detailed in note 6. All transactions are derived from continuing activities. CONSOLIDATED BALANCE SHEET 27 January 28 January 29 July 2006 2005 2005 ------------ ----------- ------------ Â£'000 Â£'000 Â£'000 ASSETS Non-current assets Property, plant and equipment 163,144 160,375 158,908 Goodwill 54,135 53,704 53,946 Other intangible assets 586 715 649 Deferred tax assets 17,340 14,556 16,173 Other non-current assets 139 234 140 ------------ ----------- ------------ 235,344 229,584 229,816 ------------ ----------- ------------ Current assets Inventories 13,739 15,514 13,344 Trade and other receivables 77,501 77,251 77,762 Derivative financial instruments 11 - - Cash and cash equivalents 7,577 10,242 5,594 ------------ ----------- ------------ 98,828 103,007 96,700 ------------ ----------- ------------ Total assets 334,172 332,591 326,516 ============ =========== ============ EQUITY AND LIABILITIES Equity Share capital 10,355 10,344 10,349 Other reserves 46,951 46,383 46,723 Retained earnings 101,395 120,919 107,265 ------------ ----------- ------------ Total equity 158,701 177,646 164,337 ------------ ----------- ------------ Non-current liabilities Retirement benefit obligations 73,590 58,515 66,584 Deferred tax liabilities 49 41 46 Deferred income 155 258 206 Other non-current liabilities 789 729 947 Long-term provisions 1,006 1,897 1,518 ------------ ----------- ------------ 75,589 61,440 69,301 ------------ ----------- ------------ Current liabilities Trade and other payables 62,943 58,748 54,408 Short-term borrowings 28,388 24,259 29,086 Current tax payable 6,238 7,968 5,623 Deferred income 102 248 102 Short-term provisions 2,121 2,282 3,659 Derivative financial instruments 90 - - ------------ ----------- ------------ 99,882 93,505 92,878 ------------ ----------- ------------ Total liabilities 175,471 154,945 162,179 ------------ ----------- ------------ Total equity and liabilities 334,172 332,591 326,516 ============ =========== ============ This interim statement was approved by the board of directors on 11 April 2006. CONSOLIDATED CASH FLOW STATEMENT 26 weeks 26 weeks 52 weeks to to 28 to 27 January January 29 July 2006 2005 2005 ------------ ----------- ------------ Â£'000 Â£'000 Â£'000 Operating activities Cash generated from operations (note 7) 35,958 17,935 41,788 Interest paid (757) (388) (711) Income taxes paid (3,716) (4,703) (8,882) ------------ ----------- ------------ Net cash from operating activities 31,485 12,844 32,195 ------------ ----------- ------------ Investing activities Acquisition of business (2,901) - - Acquisition of subsidiary - (29,742) (31,099) Purchase of property, plant and equipment (19,788) (12,547) (33,192) Purchase of other intangibles (214) (240) (379) Proceeds on disposal of property, plant and equipment 6,221 4,352 5,374 Disposal of subsidiary - - 685 Interest received 115 374 574 ------------ ----------- ------------ Net cash used in investing activities (16,567) (37,803) (58,037) ------------ ----------- ------------ Financing activities Proceeds from issue of share capital 198 429 606 Loan notes redeemed (2,194) - (3,449) Dividends paid (12,520) (12,499) (17,648) Increase in bank overdrafts 1,613 - 4,344 ------------ ----------- ------------ Net cash used in financing activities (12,903) (12,070) (16,147) ------------ ----------- ------------ Net increase/(decrease) in cash and cash equivalents 2,015 (37,029) (41,989) Cash and cash equivalents at beginning of period 5,594 47,455 47,455 Effect of foreign exchange rate changes (32) (184) 128 ------------ ----------- ------------ Cash and cash equivalents at end of period (note 8) 7,577 10,242 5,594 ============ =========== ============ CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE 26 weeks to 26 weeks to 52 weeks to 27 January 28 January 29 July 2006 2005 2005 ------------ ----------- ------------ Â£'000 Â£'000 Â£'000 Exchange differences on translating foreign operations (109) 101 1,081 Losses on cash flow hedges taken to equity (191) - - Actuarial losses on defined benefit pension schemes (5,518) (12,752) (21,078) Tax on items taken directly to equity 1,779 3,800 5,913 ------------ ----------- ------------ Net expense recognised directly in equity (4,039) (8,851) (14,084) Transfer to profit and loss from equity of exchange differences on disposal of foreign operation - - (101) Transfer to initial carrying amount of non-financial hedged items on cash flow hedges 75 - - Tax on items transferred from equity (22) - - Profit for the period 10,549 14,140 11,464 ------------ ----------- ------------ Total recognised income and expense 6,563 5,289 (2,721) =========== ============ Transition adjustment on adoption of IAS 32 and IAS 39(notes 1, 11) 24 ------------ Total recognised income and expense for the period 6,587 ============ NOTES TO THE FINANCIAL STATEMENTS 1. Basis of preparation St Ives plc previously reported under UK Generally Accepted Accounting Principles ('UK GAAP') for periods up to and including the fifty two weeks to 29 July 2005. In June 2002 the Council of the European Union announced that listed companies in Europe would be required to adopt International Financial Reporting Standards ('IFRS') for accounting periods beginning on or after 1 January 2005. The interim statements have therefore been prepared in accordance with IFRS. The accounting policies adopted and the restated comparative information for the twenty six weeks to 28 January 2005 and fifty two weeks to 29 July 2005 are set out in a separate document, 'Restated Financial Information for International Financial Reporting Standards', published on 31 January 2006. The same accounting policies have been consistently applied to the financial information in the interim statements except where the Group has taken advantage of the exemption in International Financial Reporting Standard 1: 'First-time Adoption of International Financial Reporting Standards' ('IFRS 1') from the requirement to restate comparative information for International Accounting Standard 32: ' Financial Instruments: Disclosure and Presentation' ('IAS 32') and International Accounting Standard 39: 'Financial Instruments: Recognition and Measurement' (' IAS 39'). These standards have been adopted from 30 July 2005 and the restated opening balance sheet is set out in note 11. The interim statements are neither audited nor reviewed. The financial information in these statements does not comprise statutory accounts for the purposes of Section 240 of the Companies Act 1985. The abridged information for the fifty two weeks to 29 July 2005 has been prepared from the Group's statutory accounts for that period, restated for IFRS, which have been filed with the Registrar of Companies. The auditors' report on the accounts of the Group for that period was unqualified and did not contain a statement under either Section 237(2) or Section 237(3) of the Companies Act 1985. 2. Segment reporting (a) Business segments 26 weeks to 27 January 2006 --------------------------------------------------------- Media Commercial Products Products USA Elimination Total ---------- --------- ---------- ---------- ---------- Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Revenue External sales 98,800 71,715 34,636 - 205,151 Inter-segment sales 411 1,025 51 (1,487) - ---------- --------- ---------- ---------- ---------- Total revenue 99,211 72,740 34,687 (1,487) 205,151 ========== ========= ========== ========== ========== Result Segment result 14,228 1,452 (546) - 15,134 Add back restructuring costs and provision releases (350) (26) - - (376) ---------- --------- ---------- ---------- ---------- Segment result before restructuring costs and provision releases 13,878 1,426 (546) - 14,758 ========== ========= ========== ========== Unallocated corporate expenses (net) (153) ---------- Profit from operations before restructuring costs and provision releases 14,605 Restructuring costs and provision releases 2,760 ---------- Profit from operations 17,365 Investment income 4,627 Finance costs (6,409) Income tax expense (5,034) ---------- Profit for the period 10,549 ========== 26 weeks to 28 January 2005 --------------------------------------------------------- Media Commercial Products Products USA Elimination Total ---------- --------- ---------- ---------- ---------- Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Revenue External sales 106,314 69,765 34,736 - 210,815 Inter-segment sales 351 1,035 105 (1,491) - ---------- --------- --------- ---------- ---------- Total revenue 106,665 70,800 34,841 (1,491) 210,815 ========== ========== ========= ========== ========== Result Segment result 14,434 1,923 3,486 - 19,843 Add back restructuring costs and provision releases 21 18 (1,062) - (1,023) ---------- --------- ---------- ---------- ---------- Segment result before restructuring costs and provision releases 14,455 1,941 2,424 - 18,820 ========== ========== ========== ========== Unallocated corporate income (net) 1,162 ---------- Profit from operations before restructuring costs and provision releases 19,982 ---------- Restructuring costs and provision releases 1,649 ---------- Profit from operations 21,631 Investment income 4,189 Finance costs (5,254) Income tax expense (6,426) ---------- Profit for the period 14,140 ========== 52 weeks to 29 July 2005 --------------------------------------------------------------- Media Commercial Products Products USA Elimination Total ---------- ---------- --------- ---------- ----------- Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Revenue External sales 204,598 147,870 67,009 - 419,477 Inter-segment sales 821 2,346 198 (3,365) - ---------- ---------- --------- ---------- ----------- Total revenue 205,419 150,216 67,207 (3,365) 419,477 ========== ========== ========= ========== =========== Result Segment result 21,432 3,612 5,158 - 30,202 Add back restructuring costs and provision releases 7,238 3,067 (1,674) - 8,631 ---------- ---------- --------- ---------- ----------- Segment result before restructuring costs and provision releases 28,670 6,679 3,484 - 38,833 ========== ========== ========= ========== Unallocated corporate income (net) 1,844 ----------- Profit from operations before restructuring costs and provision releases 40,677 Restructuring costs and provision releases (9,845) ----------- Profit from operations 30,832 Disposal of subsidiary (8,135) Investment income 8,336 Finance costs (10,794) Income tax expense (8,775) ----------- Profit for the period 11,464 =========== (b) Geographical segments 26 weeks to 27 January 2006 ---------------------------------------------- *United United States Rest of Kingdom of America the World Total --------- ---------- --------- --------- Â£'000 Â£'000 Â£'000 Â£'000 Revenue 156,561 41,773 6,817 205,151 ========= ========== ========= ========= Result Segment result 17,733 (872) 504 17,365 Add back restructuring costs and provision releases (2,760) - - (2,760) --------- ---------- --------- --------- Segment result before restructuring costs and provision releases 14,973 (872) 504 14,605 ========= ========== ========= ========= 26 weeks to 28 January 2005 ---------------------------------------------------- *United United States Rest of Kingdom of America the World Total ---------- ---------- ---------- ---------- Â£'000 Â£'000 Â£'000 Â£'000 Revenue 149,039 43,207 18,569 210,815 ========== ========== ========== ========== Result Segment result 17,714 3,251 666 21,631 Add back restructuring costs and provision releases (587) (1,062) - (1,649) ---------- ---------- ---------- ---------- Segment result before restructuring costs and provision releases 17,127 2,189 666 19,982 ========== ========== ========== ========== 52 weeks to 29 July 2005 ----------------------------------------------------- *United United States Rest of Kingdom of America the World Total ---------- ---------- ---------- ---------- Â£'000 Â£'000 Â£'000 Â£'000 Revenue 307,421 84,282 27,774 419,477 ========== ========== ========== ========== Result Segment result 24,211 5,492 1,129 30,832 Add back restructuring costs and provision releases 11,803 (1,958) - 9,845 ---------- ---------- ---------- ---------- Segment result before restructuring costs and provision releases 36,014 3,534 1,129 40,677 ========== ========== ========== ========== *The geographical segment United States of America includes St Ives Financial Inc, which is included in Commercial Products, and the USA business segment. 3. Income taxes The income tax charge is analysed below: 26 weeks to 26 weeks to 52 weeks to 27 January 28 January 29 July 2006 2005 2005 ---------- ---------- ---------- Â£'000 Â£'000 Â£'000 United Kingdom income tax 4,831 5,223 8,561 Overseas income tax 203 1,203 214 ---------- ---------- ---------- 5,034 6,426 8,775 ========== ========== ========== The income tax charge for the twenty six weeks to 27 January 2006 is based on the estimated annual charge for the fifty two weeks to 28 July 2006. 4. Dividends 26 weeks to 26 weeks to 52 weeks to 27 January 28 January 29 July 2006 2005 2005 ---------- ---------- ---------- per share Â£'000 Â£'000 Â£'000 Final dividend paid for the 52 weeks ended 30 July 2004 12.15p - 12,499 12,499 Interim dividend paid for the 26 weeks to 28 January 2005 5.00p - - 5,149 Final dividend paid for the 52 weeks ended 29 July 2005 12.15p 12,520 - - ---------- ---------- ---------- Dividends paid during the period 12,520 12,499 17,648 ========== ========== ========== Proposed interim dividend for the 26 weeks to 27 January 2006 5.00p 5,178 ========== 5. Earnings per share 26 weeks 26 weeks 52 weeks to to to 27 January 28 January 29 July 2006 2005 2005 ---------- ---------- ---------- million million million Basic weighted average number of shares 103.0 102.9 102.9 Dilutive potential ordinary shares from share options - - 0.1 ---------- ---------- ---------- Diluted weighted average number of shares 103.0 102.9 103.0 ========== ========== ========== 26 weeks to 26 weeks to 52 weeks to 27 January 2006 28 January 2005 29 July 2005 ------------------- ------------------- ------------------- Earnings Earnings Earnings Earnings per share Earnings per share Earnings per share --------- --------- --------- --------- --------- --------- Â£'000 pence Â£'000 pence Â£'000 pence Earnings and basic earnings per share 10,549 10.24 14,140 13.75 11,464 11.14 Restructuring costs and provision releases (1,932) (1.88) (1,665) (1.62) 13,983 13.59 --------- --------- --------- --------- --------- --------- Adjusted earnings and adjusted earnings per share 8,617 8.36 12,475 12.13 25,447 24.73 ========= ========= ========= ========= ========= ========= Diluted earnings per share 10.24 13.74 11.13 ========= ========= ========= Adjusted earnings is calculated by adding back restructuring costs and provision releases, as adjusted for tax, to the profit for the period. 6. Restructuring costs and provision releases Restructuring costs and provision releases included within the income statement are as follows: 26 weeks to 26 weeks to 52 weeks to 27 January 28 January 29 July 2006 2005 2005 ---------- --------- ---------- Â£'000 Â£'000 Â£'000 Income/(costs) Cost of sales (113) 354 (6,837) Sales and distribution costs 8 - (843) Administrative expenses 300 613 (2,863) Profit on disposal of fixed assets 2,084 626 626 Other income 481 56 72 Loss on disposal of subsidiary - - (8,135) ---------- --------- ---------- 2,760 1,649 (17,980) ========== ========= ========== Profit on disposal of fixed assets relates to properties sold. Other income is profit on disposal of other fixed assets. 7. Reconciliation of cash generated from operations 26 weeks 26 weeks 52 weeks to to to 27 January 28 January 29 July 2006 2005 2005 ---------- ---------- ---------- Â£'000 Â£'000 Â£'000 Profit from operations 17,365 21,631 30,832 Adjustments for: Depreciation of property, plant and equipment 13,453 14,989 29,701 Impairment of fixed assets - - 3,278 Gain on disposal of property, plant and equipment (2,881) (992) (1,274) Foreign exchange losses - 86 84 Deferred income (51) (200) (398) Share-based payment charge/(credit) 99 (327) (654) Decrease in provisions (2,044) (3,886) (3,839) ---------- ---------- ---------- Operating cash flows before movements in working 25,941 31,301 57,730 capital Increase in inventories (422) (3,285) (1,568) Decrease/(increase) in receivables 184 (4,771) (6,142) Increase/(decrease) in payables 10,255 (5,310) (8,232) ---------- ---------- ---------- Cash generated from operations 35,958 17,935 41,788 ========== ========== ========== 8. Analysis of net debt 29 July Exchange 27 January 2005 Cash flow movements 2006 ---------- ---------- ---------- ---------- Â£'000 Â£'000 Â£'000 Â£'000 Cash and cash equivalents 5,594 2,015 (32) 7,577 Bank overdrafts (4,386) (1,613) - (5,999) Debt due within one year (24,700) 2,194 117 (22,389) ---------- ---------- ---------- ---------- (23,492) 2,596 85 (20,811) ========== ========== ========== ========== 9. Movement in equity 26 weeks to 26 weeks to 52 weeks to 27 January 28 January 29 July 2006 2005 2005 ---------- ---------- ---------- Â£'000 Â£'000 Â£'000 Opening equity 164,337 184,754 184,754 Transition adjustment on adoption of IAS 32 and IAS 39 24 - - ---------- ---------- ---------- Opening equity (restated) 164,361 184,754 184,754 Foreign exchange adjustments (42) 75 671 Losses on cash flow hedges (81) - - Profit for the period 10,549 14,140 11,464 New shares issued 198 429 606 Recognition of share-based payments 99 (327) (654) Actuarial losses on defined benefit pension schemes (3,863) (8,926) (14,755) Transfer to profit and loss from equity of exchange differences on disposal of foreign operation - - (101) Dividends (12,520) (12,499) (17,648) ---------- ---------- ---------- Closing equity 158,701 177,646 164,337 ========== ========== ========== 10. Retirement benefits The Group's pension obligations under International Accounting Standards 19: 'Employee Benefits' ('IAS 19') are recognised on the balance sheet for the first time. The liability of Â£73,590,000 (Â£51,513,000 net of deferred tax) is higher than at 30 July 2005 principally due to a fall in AA bond yields used to discount liabilities from 5.0% to 4.7%. All other assumptions remain in line with those at 30 July 2005. 11. Adoption of IAS 32 and IAS 39 Following the Group's adoption of IAS 32 and IAS 39 from 30 July 2005, we set out below the accounting policies under these standards and the impact on the financial information as at 30 July 2005. Accounting policy The Group's activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates. The Group uses derivative financial instruments to hedge its exposure to foreign exchange for the purchase of capital equipment denominated in foreign currencies and the sale of goods similarly denominated. The use of financial derivatives is governed by the Group's policies approved by the board of directors, which provide written principles on the use of financial derivatives consistent with the Group's risk management strategy. The Group does not hold or issue derivative financial instruments for speculative purposes. All derivatives are held at fair value in the balance sheet within 'derivative financial instruments' and are classified as current or non-current depending on the maturity of the derivative. Changes in the fair value of derivative financial instruments that are designated and effective as cash flow hedges of forecast transactions are recognised directly in equity and the ineffective portion is recognised immediately in the income statement. If the cash flow hedge of a firm commitment or forecast transaction results in the recognition of an asset or liability, then, at the time the asset or liability is recognised, the associated gains and losses on the derivative that had previously been recognised in equity are included in the initial measurement of the asset or liability. For the hedges that do not result in the recognition of an asset or liability, amounts deferred in equity are recognised in the income statement in the same period in which the hedged item affects the net profit or loss. The gain or loss on hedging instruments relating to the effective portion of a net investment hedge is recognised in equity and the ineffective portion is recognised immediately in the income statement. Gains or losses accumulated in equity are included in the income statement when the foreign operations are disposed of. Changes in the fair value of derivative financial instruments that do not qualify for hedge accounting are recognised in the income statement as they arise. Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or no longer qualifies for hedge accounting. At that time, any cumulative gain or loss on the hedging instrument recognised in equity is retained in equity until the forecast transaction occurs. If a hedge transaction is no longer expected to occur, the net cumulative gain or loss previously recognised in equity is included in the income statement for the period. Impact of IAS 32 and IAS 39 At 30 July 2005 the fair values of forward contracts held at that date have been recorded on the balance sheet and directly in equity. The balance sheet includes derivative financial instruments within current assets of Â£62,000 and within current liabilities of Â£38,000. Closing Opening balance IAS 32 and balance sheet IAS 39 sheet at 29 July adjustments at 30 July 2005 2005 ---------- ---------- ---------- Â£'000 Â£'000 Â£'000 Assets Non-current assets 229,816 - 229,816 Current assets 96,700 62 96,762 ---------- ---------- ---------- 326,516 62 326,578 ========== ========== ========== Equity and liabilities Equity 164,337 24 164,361 Non-current liabilities 69,301 - 69,301 Current liabilities 92,878 38 92,916 ---------- ---------- ---------- 326,516 62 326,578 ========== ========== ========== During the period to 27 January 2006 losses on cash flow hedges of Â£191,000 were taken to equity and Â£75,000 was transferred to the initial carrying amount of non-financial hedged items on cash flow hedges. The related deferred tax taken directly to equity totalled Â£35,000. The resulting fair values of forward contracts held at 27 January 2006 were Â£11,000 recorded in current assets and Â£90,000 recorded in current liabilities on the balance sheet. 12. Reconciliation between UK GAAP and IFRS On 31 January 2006 the Group published its restated balance sheet for 30 July 2004 and restated financial information for the twenty six weeks to 28 January 2005 and fifty two weeks to 29 July 2005, as required by IFRS 1. This separate document is available on the Group's website, www.st-ives.co.uk, entitled ' Restated Financial Information for International Financial Reporting Standards'. The document includes explanations of the significant UK GAAP to IFRS differences and detailed IFRS accounting policies. A summary of the financial information presented in this document is provided below: Reconciliation of equity 29 July 28 January 31 July 2005 2005 2004 ---------- ---------- ---------- Â£'000 Â£'000 Â£'000 Total equity presented under UK GAAP 214,621 230,739 222,758 Proposed dividend adjustment 12,517 5,147 12,491 Employee benefits (64,450) (58,624) (49,583) Rolled over gains (1,234) (825) (825) Reversal of goodwill amortisation 2,773 1,289 - Share-based payments 110 (80) (87) ---------- ---------- ---------- Total equity presented under IFRS 164,337 177,646 184,754 ========== ========== ========== Reconciliation of profit for the period 52 weeks 26 weeks to to 29 July 28 January 2005 2005 ---------- ---------- Â£'000 Â£'000 Profit for the period under UK GAAP* 2,780 13,326 Rolled over gains (409) - Employee benefits (113) (115) Foreign exchange gains/(losses) 42 (60) Reversal of goodwill amortisation 2,773 1,289 Reversal of goodwill previously written-off 6,806 - Share-based payments (415) (300) ---------- ---------- Profit for the period under IFRS 11,464 14,140 ========== ========== *In the twenty six weeks to 28 January 2005 certain costs totalling Â£1,505,000 have been reallocated from administrative expenses to sales and distribution costs in order to ensure consistency of presentation. Reconciliation of cash flows There was no material effect on the cash flows of the Group on adopting IFRS. 13. A copy of the interim statement will be sent to all shareholders. This information is provided by RNS The company news service from the London Stock Exchange

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Sivota (SIV)

Thursday, 23rd May 2024

COMPANIES COVERED:

HL. QQ. AJB

Another day and another round of takeover talk with Hargreaves Lansdown being eyed by private equity suitors. AJ Bell also advances on upbeat earnings news whilst QinetiQ upgrades its profit guidance, too.

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