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Clinton Cards PLC (CC.)

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Thursday 29 March, 2012

Clinton Cards PLC

Interim Results

RNS Number : 3123A
Clinton Cards PLC
29 March 2012
 





 

 

           

 

 



 

29 March 2012

CLINTON CARDS PLC

 

Interim Results for the 26 weeks ended 29 January 2012

 

Clinton Cards PLC, the UK's largest specialist retailer of cards, today announces its Interim Results for the 26 week period ended 29 January 2012.

 

Financial Highlights

 

·        Like for like sales for the first half were -1.1% (Clintons:-1.0%, Birthdays:-2.0%).

·        Significantly weaker margins as a result of clearing old stock in the January Sale and an increase in lower margin gift sales throughout the half.

·        First half operating profit before exceptional items of £743k (Clintons: £3,588k and Birthdays: loss of £2,845k).

·        Basic loss per share of 1.70p (2011: basic earnings per share of 4.08p)

·        Cash generated from operations £46.9m (2011: £34.0m).

·        Net cash of £5.6m (Net debt of £34.3m at 31 July 2011 and £5.1m at 30 January 2011).

 

Operational Highlights

 

Group

 

·        The strategic review, begun by Darcy Willson-Rymer when he joined as CEO in October 2011, is on track for completion at the end of April and the Company will engage with its stakeholders (including lenders) post-completion. All elements of the business are being reviewed to ensure it is fit for purpose, with a single-minded focus on the customer.

·        Store Support Centre has been restructured, reducing net headcount by 15% and bringing new skills and capabilities into the business.

·        Management team strengthened with appointments of Sarah Morris as Group Trading Director, (previously ran Merchandising for John Lewis) and John Wrighthouse as Group HR Director (previously Group HR Director at the Nationwide Building Society).

 

Clintons

 

·        First steps towards the restructuring and strengthening of the store portfolio are underway, bringing total stores to 628. The Group has focused on stores that demonstrate value to the business and closed 17, which were in difficult locations and not meeting business targets. The long-term store portfolio strategy is being determined as part of the strategic review.

·        Continuing to work in partnership with our landlords, moving from quarterly to monthly rents - over 60% of stores now on monthly rents.

 

Birthdays

 

·        Examination of Birthdays within the strategic review.

·        Store portfolio restructured to total of 139 from 156, as loss-making stores were exited.

 

Borrowing Facilities

 

·        The Company secured new borrowing facilities in October 2011 for £55million, putting Clintons in a position to continue to restructure.

 

The Board

 

·        As a result of the amount of change to the Board and Leadership team, Don Lewin, OBE has been invited to continue in his role as Non-Executive Chairman until 31 July 2012, given his detailed knowledge of both the company and the greetings card industry.

·        Hazel Cameron is being appointed as Non-Executive Director, Hazel is a chartered accountant with corporate finance, private equity and non-executive directorship experience including LDC, Cross Atlantic Capital Partners, Bowman Capital and 3i.

·        Dave Hughes is being appointed as Non-Executive Director, Dave brings multichannel and retail knowledge, including experience with Sainsburys, Game and Marks & Spencer.

 

 

Darcy Willson-Rymer, Chief Executive Officer of Clinton Cards PLC, said:

 

"This has been a challenging period in a difficult retail environment, dominated by weak consumer confidence.  Margins have also been weaker as a result of the clearance of historic overbuys, obsolete stock and the sale of lower margin gifts.

 

"Since joining Clintons last year I have embarked on a journey of change, with a single-minded focus on the customer.  With the store portfolio undergoing significant restructuring and the management team and the Board strengthened, the business now has the ability to be stronger.  However, the legacy of the business cycle means that significant impact will only begin to come through from the end of the second half of the financial year.

 

"The strategic review - which examines the customer experience, the store portfolio, business efficiency, and the digital offering - is on target for completion at the end of April. This is the main platform for change and I am confident that the conclusions from the review will put the business in the best possible position for a turnaround.

 

"The outlook for the second half of the current year is below our previous expectations but the changes we are undertaking to the business will deliver significant benefits in future years."

 

 

 

Enquiries:

 

Clinton Cards

Darcy Willson-Rymer, Chief Executive Officer                               Tel No: 020 8502 3711

 

Speed Communications

Scott McLean                                                                                        Tel No: 020 7842 3260


CLINTON CARDS PLC

("the Company" or "the Group")

Interim Report for the 26 weeks ended 29 January 2012

 

 

 

Clinton Cards PLC, the UK's largest specialist retailer of cards, today announces its Interim Results for the 26 week period ended 29 January 2012.

 

 

PERFORMANCE

The last 26 weeks have been challenging given the difficult retail environment which has been dominated by weak consumer confidence.  These factors have significantly impacted on Group sales which have declined by 1.1% on a like for like basis. In addition, the clearance of old stock in the January Sale and an increase in the sales of lower margin gifts has resulted in a significant weakening in the margin for the first half. 

Total revenue in the period from the Clinton brand was £171.7m compared to £178.3m from 21 fewer stores than last year.  Like for like sales in the 26 weeks ended 29 January 2012 were 1.0% lower but transaction levels remained the same and spend per head decreased by 1.0%

Total revenue for the Birthdays brand in the UK for the 26 weeks ended 29 January 2012 was £25.5m compared to £28.6m in the corresponding period last year representing a reduction in like for like sales of 2.1%.

At 29 January 2012 Birthdays Retail Limited was trading from 139 stores in the UK compared to 157 at 30 January 2011.

 

Adjusted operating profit for the 26 weeks was £743k (Clintons: £3,588k, Birthdays: £2,845k loss) compared to an adjusted operating profit of £14.4m for the same period last year.

 

CASH, BORROWINGS AND INTEREST

Average net debt in the 26 weeks to 29 January 2012 was £22.1m in comparison to £23.6m in the 26 weeks to 30 January 2011, an improvement of £1.5m.  At the period end net cash, excluding capitalised financing costs, was £5.6m (Net debt 2011: £5.1m).  Cash generated from operating activities was £46.9m (2011: £34.0m).

Net interest payable in the 26 weeks to 29 January 2012 was £2.1m compared to £1.6m in the prior period. 

 

CURRENT TRADING

The start of the second half included both the key seasons of Valentine's Day and Mother's Day. Last year, Mother's Day was 2 weeks later and therefore outside the 8 week comparable period. While Group like for like sales are 11.8% up (Clintons: +12.5%, Birthdays +7.3%) for the first 8 weeks of the current year compared to last year, after adjusting for the timing of Mother's Day, the underlying trend is down by 4%.

 

RESTRUCTURING THE BUSINESS

Since October 2011, we have embarked on a significant journey of change with a single-minded focus on the customer.

 

Work to restructure the store portfolio has begun with the long-term strategy to be detailed within the strategic review. We are also working in partnership with our landlords, moving from quarterly to monthly rents with over 60% of our stores now on monthly rents.

 

We have strengthened the team at the Store Support Centre, ensuring the right skills and capabilities are in place to support the business while reducing net headcount by 15%.  We have also strengthened the Management team, with appointments of Sarah Morris as Group Trading Director, (previously ran Merchandising for John Lewis) and John Wrighthouse as Group HR Director (previously Group HR Director at the Nationwide Building Society).

 

The strategic review - examining the customer experience, the store portfolio, business efficiency, and the digital offering - is on target for completion at the end of April and we will engage with stakeholders (including lenders) post-completion.  This is the main platform for change and I am confident that the conclusions from the review will put the business in best possible position for a turnaround.

 

 

BOARD

As a result of the amount of change to the Board and Leadership team, Don Lewin, OBE has been invited to continue in his role as Non-Executive Chairman until the 31 July 2012, given his detailed knowledge of both the company and the greetings card industry.

Hazel Cameron is being appointed as Non-Executive Director, Hazel is a chartered accountant with corporate finance, private equity and non-executive directorship experience including LDC, Cross Atlantic Capital Partners, Bowman Capital and 3i.

 

Dave Hughes is being appointed as Non-Executive Director, Dave brings multichannel and retail knowledge, including experience with Sainsburys, Game and Marks & Spencer.

 

These new appointments replace Robert Gunlack and John Coleman who will be retiring from the Board on the 31 March 2012. In addition, John Robinson will be leaving the Board following his decision to resign from his position as Buying Director and Stuart Houlston will also be stepping down from the Board, but continuing in his role as Group Property Director. I would to take the opportunity to thank Robert Gunlack, John Coleman and John Robinson for their contribution to the business, Stuart for his contribution to the Board and welcome Hazel and Dave to the Board.

 

OUTLOOK

The outlook for the second half of the current year is below our previous expectations. The significant changes we are undertaking within the business, and those we will announce following the completion of the strategic review, will begin to benefit the business from the end of the second half and will position the business for long-term growth.

 

Darcy Willson-Rymer

Chief Executive Officer, Clinton Cards PLC



 







SUMMARY OF RESULTS

26 weeks ended


26 weeks ended


52 weeks ended


29 January 2012


30 January 2011


31 July 2011

Continuing operations

£'000


£'000


£'000

Revenue (excluding VAT)






    Clinton

 171,699 


 178,297 


 312,878 

    Birthdays Retail

 25,450 


 28,596 


 51,340 

Group revenue

 197,149 


 206,893 


 364,218 







Adjusted operating profit/(loss)






    Clinton

 3,588 


 14,703 


 7,004 

    Birthdays Retail

 (2,845)


 (292)


 (3,801)

Group adjusted operating profit

 743 


 14,411 


 3,203 







Operating profit/(loss)






    Clinton

 2,581 


 13,652 


 485 

    Birthdays Retail

 (4,361)


 (586)


 (8,597)

Group operating (loss)/profit

 (1,780)


 13,066 


 (8,112)







(Loss)/Profit before tax

 (3,674)


 11,733 


 (10,662)







Loss for the period from discontinued operations

 - 


 (3,643)


 (2,943)







Reconciliation of statutory values to adjusted measures






Group operating (loss)/profit

 (1,780)


 13,066 


 (8,112)

Net impairment of property, plant and equipment

 - 


 - 


 5,686 

Restructuring costs

 1,218 


 - 


 - 

Charges in respect of onerous leases

 407 


 - 


 4,644 

Loss on sale of property, plant and equipment

 898 


 1,345 


 985 

Group adjusted operating profit

 743 


 14,411 


 3,203 









Unaudited Consolidated Statement of Comprehensive Income

 



26 weeks ended


26 weeks ended


52 weeks ended


Note

29 January 2012


30 January 2011


31 July 2011

Continuing operations


£'000


£'000


£'000

Sales (including VAT)


 236,352 


243,371 


432,037 








Revenue (excluding VAT)

4

 197,149 


206,893 


364,218 

Cost of sales


 (188,688)


(185,596)


(357,589)

Gross profit


 8,461 


21,297 


6,629 

Other operating income


 42 


46 


94 

Profit/(loss) on sale of property, plant and equipment


 (898)


(1,345)


(985)

Administrative expenses


 (9,385)


(6,932)


(13,850)

Operating (loss)/profit

4

 (1,780)


13,066 


(8,112)








Analysed as:







Operating (loss)/profit before exceptional items


 (155)


13,066 


2,218 

Net impairment to property, plant and equipment *


 - 


 - 


(5,686)

Charges in respect of onerous leases *


 (407)


 - 


(4,644)

Restructuring costs *


 (1,218)


 - 


 - 








Operating (loss)/profit


 (1,780)


13,066 


(8,112)








Finance income


 63 


48 


96 

Finance costs

6

 (2,127)


(1,642)


(2,992)

Change in fair value of financial instruments


 218 


266 


356 

Unwinding of property provision discount


 (48)


(5)


(10)

(Loss)/Profit before taxation


 (3,674)


11,733 


(10,662)

Taxation


 166 


(3,286)


(1,428)

(Loss)/Profit from continuing operations


 (3,508)


8,447 


(12,090)

Loss for the period from discontinued operations

5

 - 


(3,643)


(2,943)

(Loss)/Profit for the period attributable to owners of the company


 (3,508)


4,804 


(15,033)

Other comprehensive expense (net of tax):







Currency translation differences


 - 


 - 


(233)

Total comprehensive (expenses)/income for the period attributable to owners of the company


 (3,508)


4,804 


(15,266)








(Loss)/Earnings per share for profit attributable to owners of the company

8






From continuing operations:







Basic earnings per share (pence)


(1.70)


4.08 


(5.84)

Diluted earnings per share (pence)


(1.70)


4.08 


(5.84)

From continuing and discontinued operations:







Basic earnings per share (pence)


(1.70)


2.32 


(7.26)

Diluted earnings per share (pence)


(1.70)


2.32 


(7.26)








*  Exceptional items










 

 

The notes on pages 10 to 20 are integral to these consolidated condensed financial statements.


Unaudited Consolidated Balance Sheet

 



As at


As at


As at



29 January 2012


30 January 2011


31 July 2011


Note

£'000


£'000


£'000

Non current assets







Goodwill

9

17,326 


17,326 


17,326 

Other intangible assets

9

1,750 


1,750 


1,750 

Property, plant and equipment

9

48,003 


55,443 


48,729 

Deferred tax asset



288 


-



67,079 


74,807 


67,805 

Current assets







Inventories


40,976 


42,910 


43,202 

Trade and other receivables

10

16,016 


20,270 


18,917 

Current tax asset


887 


-


886 

Cash and cash equivalents


8,582 


9,376 


19,673 



66,461 


72,556 


82,678 

Assets held by discontinued operations

13


180 


-



66,461 


72,736 


82,678 








Total assets


133,540 


147,543 


150,483 








Current liabilities







Borrowings


(151)


(13,559)


(53,527)

Trade and other payables

11

(96,071)


(73,413)


(55,458)

Derivative financial instruments



(308)


(218)

Current tax liabilities



(3,284)


-

Provisions

12

(6,680)


(639)


(5,221)



(102,902)


(91,203)


(114,424)

Liabilities held by discontinued operations

13


(411)




(102,902)


(91,614)


(114,424)








Net current liabilities


(36,441)


(18,878)


(31,746)








Non current liabilities







Deferred tax liabilities


(1,123)


-


(1,289)

Provisions

12

(1,468)


(3,457)


(2,772)

Other non current liabilities


(8,582)


(9,429)


(9,025)



(11,173)


(12,886)


(13,086)








Total liabilities


(114,075)


(104,500)


(127,510)








Net assets


19,465 


43,043 


22,973 








Shareholders' equity







Called up share capital


20,693 


20,693 


20,693 

Share premium account


5,873 


5,873 


5,873 

Capital redemption reserve


50 


50 


50 

Translation reserve



233 


-

Other reserves


308 


308 


308 

(Accumulated losses)/retained earnings


(7,459)


15,886 


(3,951)

Total equity


19,465 


43,043 


22,973 


Unaudited Consolidated Statement of Changes in Equity

 










Called-up share capital

Share premium account

Capital redemption reserve

Translation reserve

Other reserves

Retained earnings

Total equity


£'000

£'000

£'000

£'000

£'000

£'000

£'000

At 1 August 2010

20,693 

5,873 

50 

233 

308 

11,082 

38,239 









Profit for the period

-

-

-

-

-

4,804 

4,804 

Total comprehensive income/(expense) for the period

-

-

-

-

-

4,804 

4,804 

At 30 January 2011

20,693 

5,873 

50 

233 

308 

15,886 

43,043 









Loss for the period

-

-

-

-

-

(19,837)

(19,837)

Currency translation differences

-

-

-

(233)

-

-

(233)

Total comprehensive expense for the period

(233)

(19,837)

(20,070)

At 31 July 2011

20,693 

5,873 

50 

308 

(3,951)

22,973 









Loss for the period

 - 

 - 

 - 

 - 

 - 

(3,508)

(3,508)

At 29 January 2012

20,693 

5,873 

50 

308 

(7,459)

19,465 


Unaudited Consolidated Cash Flow Statement

 



26 weeks ended


26 weeks ended


52 weeks ended



29 January 2012


30 January 2011


31 July 2011

Cash flows from operating activities

Note

£'000


£'000


£'000

(Loss)/Profit before tax from continuing operations


(3,674)


11,733 


(10,662)

Loss before tax from discontinued operations


-


(3,643)


(3,329)

Adjustments for:







  Net finance costs *


1,894 


1,333 


2,550 

  Depreciation


3,437 


4,084 


8,380 

  Net impairment of property, plant and equipment


-


-


5,686 

Net assets written off relating to discontinued operations


 - 


 1,345 


1,360 

  Loss on sale of property, plant and equipment


898 


1,620 


985 

Operating cash flows before movements in working capital


2,555 


16,472 


4,970 








Decrease/(Increase) in inventories


 2,226 


(5,994)


(6,283)

Decrease/(increase) in trade and other receivables


2,901 


(2,767)


(1,647)

Increase in trade and other payables


40,161 


26,325 


8,270 

Increase in provisions and financial instruments


155 


1,548 


5,445 

Cash generated from operations


47,998 


35,584 


10,755 








Interest received


63 


48 


96 

Interest paid


(1,203)


(1,143)


(1,977)

Net taxation paid


 - 


(457)


(808)

Net cash generated from operating activities


46,858 


34,032 


8,066 








Cash flows from investing activities







Fees paid for refinancing


(3,295)


 - 


 - 

Cash disposed of with discontinued operations


 - 



(486)

Payments relating to disposal of property, plant and equipment


(206)


(386)


539 

Purchase of property, plant and equipment


(3,448)


(2,815)


(6,671)

Net cash used in investing activities


(6,949)


(3,201)


(6,618)








Cash flows from financing activities







(Decrease)/increase in borrowings


(51,000)


(28,500)


11,000 

Net cash used in financing activities


(51,000)


(28,500)


11,000 








Net (decrease)/increase in cash and cash equivalents


(11,091)


2,331 


12,448 








Cash and cash equivalents at beginning of period


19,673 


7,225 


7,225 








Cash and cash equivalents at end of period

14

8,582 


9,556 


19,673 

Included in the assets of the discontinued operations


 - 


(180)


-

Included in cash and equivalents per the Balance Sheet


8,582 


9,376 


19,673 








* Net finance costs includes movement in financial instruments and unwinding of property provision discount



Notes to the Interim Consolidated Condensed Financial Statements


 

 

1       General information                                                                                                                                                         

         The principal activity of the Group is the specialist retailing of greetings cards and associated products.  This is carried out through two brands on the high street, Clinton Cards and Birthdays.

         Clinton Cards PLC is a Public Limited Company incorporated and domiciled in England and Wales.

         These interim consolidated condensed financial statements and the comparative figures for the 26 weeks ended 30 January 2011 do not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006.  Statutory accounts for the 52 weeks ended 31 July 2011 were approved by the Board of Directors on 30 November 2011 and delivered to the Registrar of Companies.  The report of the auditors on those accounts was unqualified, did not contain an emphasis of matter and did not contain statements under Section 498 of the Companies Act 2006.

         The interim results are unaudited and were approved by the Board of Directors on 28 March 2012.


 

 

2       Basis of preparation

         The interim consolidated condensed financial report for the 26 weeks ended 29 January 2012 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 interim financial report should be read in conjunction with the annual financial statements for the 52 weeks ended 31 July 2011 which were prepared in accordance with IFRS's as adopted by the European Union.

         The Group meets its day to day working capital requirements through a secured revolving credit facility which is due to expire in July 2013 with a maximum draw down available of £55m. The Group's forecasts and projections, taking account of reasonable possible changes in trading performance, show that the Group should be able to operate within the level of its current facility to the end of the financial year. Over the next four months, the directors will be in discussions with the lenders to secure future facilities. The directors have a reasonable expectation that the Group have adequate resources to continue in operational existence for the foreseeable future and therefore continue to adopt the going concern basis of accounting in preparing financial statements.

         Use of adjusted measures

         Adjusted operating profits or losses and adjusted net profits or losses are defined as operating profits or losses and net profits or losses before charging impairment and losses on sale of property, plant and equipment, the movement in the fair value of financial instruments, losses on discontinued operations, charges in respect of onerous leases and restructuring costs.


 

 

3              Accounting policies

         The accounting policies adopted are consistent with those of the annual financial statements for the 52 weeks ended 31 July 2011 as described in those financial statements.

The financial statements have been prepared on the historical cost basis.


4

Segmental Information














Store information

Clinton Cards


Birthdays Retail


Group



No.


No.


No.


Store numbers







Stores at 30 January 2011

649 


157 


806 


   Additions


-



   Disposals (including relocations)

(15)


(3)


(18)


   Relocations




Stores at 31 July 2011

641 


156 


797 


   Additions




   Disposals (including relocations)

(17)


(17)


(34)


   Relocations




Stores at 29 January 2012

628 


139 


767 









Trading area (square feet)

000


000


000


Trading area at 30 January 2011

1,250 


272 


1,522 


   Additions


(3)



   Disposals

(36)


-


(36)


   Relocations

20 



23 


Trading area at 31 July 2011

1,237 


272 


1,509 


   Additions




   Disposals

(28)


(26)


(54)


   Relocations




Trading area at 29 January 2012

1,218 


246 


1,464 









Average store size

sq ft


sq ft


sq ft


At 30 January 2011

1,926 


1,735 


1,889 


At 31 July 2011

 1,931 


 1,746 


 1,895 


At 29 January 2012

 1,941 


 1,767 


 1,909 



 

4

Segmental information (continued)





















Income statement

Clinton Cards


Birthdays Retail


Continuing operations


Discontinued operations


Group



£'000


£'000


£'000


£'000


£'000


26 weeks ended 29 January 2012











Revenue (excluding VAT)

171,699 


25,450 


197,149 



197,149 


Adjusted operating profit

3,588 


(2,845)


743 



743 


Provision for onerous lease

138 


(545)


(407)



(407)


Restructuring costs

(1,052)


(166)


(1,218)



(1,218)


Loss on sale of property, plant and equipment

(93)


(805)


(898)



(898)


Operating profit/(loss)

2,581 


(4,361)


(1,780)



(1,780)


Net finance costs





(1,894)



(1,894)


Loss before tax





(3,674)



(3,674)


Taxation





166 



166 


Loss after tax





(3,508)



(3,508)













26 weeks ended 30 January 2011











Revenue (excluding VAT)

178,297 


28,596 


206,893 


3,408 


210,301 


Adjusted operating profit

14,703 


(292)


14,411 


(523)


13,888 


Assets impaired

-


-


-


(1,620)


(1,620)


Provision for onerous lease

-


-


-


(1,500)


(1,500)


Loss on sale of property, plant and equipment

(1,051)


(294)


(1,345)


-


(1,345)


Operating profit/(loss)

13,652 


(586)


13,066 


(3,643)


9,423 


Net finance costs





(1,333)


-


(1,333)


Profit/(loss) before tax





11,733 


(3,643)


8,090 


Taxation





(3,286)


-


(3,286)


Profit/(loss) after tax





8,447 


(3,643)


4,804 













52 weeks ended 31 July 2011











Revenue (excluding VAT)

312,878 


51,340 


364,218 


3,347 


367,565 


Adjusted operating profit/(loss)

7,004 


(3,801)


3,203 


(558)


2,645 


Net impairment to property, plant and equipment

(4,126)


(1,560)


(5,686)


-


(5,686)


Charges in respect of onerous leases

(1,819)


(2,825)


(4,644)


(1,411)


(6,055)


Loss on sale of property, plant and equipment

(574)


(411)


(985)


-


(985)


Operating profit/(loss)

485 


(8,597)


(8,112)


(1,969)


(10,081)


Assets written off on liquidation





-


(1,360)


(1,360)


Net finance costs





(2,550)


-


(2,550)


Loss before tax





(10,662)


(3,329)


(13,991)


Taxation





(1,428)


386 


(1,042)


Loss after tax





(12,090)


(2,943)


(15,033)
















 

4

Segmental information (continued)






















Balance Sheet

Clinton Cards


Birthdays Retail


Continuing operations


Discontinued operations


Group



£'000


£'000


£'000


£'000


£'000


Assets as at 29 January 2012

108,999 


24,541 


133,540 



133,540 


Liabilities as at 29 January 2012

(98,575)


(15,349)


(113,924)



(113,924)


Net assets excluding Group borrowings

10,424 


9,192 


19,616 



19,616 


Group borrowings









(151)


Net assets as at 29 January 2012









19,465 













Assets as at 30 January 2011

122,658 


24,705 


147,363 


180 


147,543 


Liabilities as at 30 January 2011

(78,190)


(12,340)


(90,530)


(411)


(90,941)


Net assets excluding Group borrowings

44,468 


12,365 


56,833 


(231)


56,602 


Group borrowings









(13,559)


Net assets as at 30 January 2011









43,043 













Assets at 31 July 2011

126,742 


23,741 


150,483 


-


150,483 


Liabilities as at 31 July 2011

(61,649)


(12,334)


(73,983)


-


(73,983)


Net assets excluding Group borrowings

65,093 


11,407 


76,500 


-


76,500 


Group borrowings









(53,527)


Net assets at 31 July 2011









22,973 


5       Discontinued operations

        After a period of actively seeking to sell the Birthdays Ireland business, a decision was taken to explore alternative options. On 1 March 2011 following a petition placed before the Courts, Birthdays (Ireland) Limited was placed into liquidation. As control of the Company ceased at that date the results and assets were deconsolidated and treated as discontinued in the results of the 26 weeks ended 30 January 2011.

               



26 weeks ended


26 weeks ended



29 January 2012


30 January 2011



£'000


£'000


Revenue

 - 


3,408 


Expenses

 - 


(3,931)


Trading loss of discontinued operations

 - 


(523)


Assets impaired

 - 


(1,620)


Provision for onerous leases

 - 


(1,500)


Total loss of discontinued operations


(3,643)







The cash flows of Birthdays (Ireland) Limited operations are shown below:





Operating cash flows

 - 


26 


Investing cash flows

 - 


(4)


Total cash flows

 - 


22 







Balance Sheet





Property, plant and equipment

 - 


461 


Inventories

 - 


874 


Trade and other receivables

 - 


285 



 - 


1,620 


Cash and cash equivalents

 - 


180 


Trade and other payables

 - 


(295)


Deferred tax liability

 - 


(116)



 - 


1,389 


Assets impaired

 - 


(1,620)


Net (liabilities)/assets of discontinued operations (excluding inter company debt)

 - 


(231)












Loss per share from discontinued operations





From discontinuing operations:





Basic and diluted loss per share(pence)

 - 


(1.76)


6

Finance costs














Continuing operations


Discontinued operations



26 weeks ended


26 weeks ended


52 weeks ended


26 weeks ended


26 weeks ended


52 weeks ended



29 January 2012


30 January 2011


31 July 2011


29 January 2012


30 January 2011


31 July 2011



£'000


£'000


£'000


£'000


£'000


£'000


Finance income:













Interest on bank deposits

61 


40 


96 



-


-


Other interest received



-



-


-


Total finance income

63 


48 


96 



-


-















Finance costs:













Interest payable on bank loans and overdraft

(1,203)


(839)


(2,007)



-


-


Amortisation of finance costs

(919)


(493)


(985)



-


-


Other interest paid

(5)


(310)


-



-


-


Total finance costs

(2,127)


(1,642)


(2,992)



-


-















Change in fair value of derivative financial instruments

218 


266 


356 



-


-















Unwinding of property provision discount

(48)


(5)


(10)



-


-















Finance costs - net

(1,894)


(1,333)


(2,550)



-


-


 

 

 

7       Taxation

         The tax charge is based on the expected effective tax rate of 25% for the 52 weeks to 29 July 2012 (30 January 2011: 28%).


8       Earnings/(loss) per share

        The basic earnings per share is calculated by dividing the (loss)/profit after taxation by the weighted average number of shares in issue during the period.  For diluted earnings per share the weighted average number of ordinary shares is increased to assume conversion of all dilutive potential ordinary shares.  The adjusted basic earnings per share shown below is calculated after excluding the adjustments detailed below.

        The weighted number of shares of 206,925,115 is the same for all three periods. The number of dilutive shares applicable in the 52 weeks to 31 July 2011 was nil.

 



26 weeks to


26 weeks to


52 weeks to



29 January 2012


30 January 2011


31 July 2011



Earnings

Per share


Earnings

Per share


Earnings

Per share



£'000s

pence


£'000s

pence


£'000s

pence


(Loss)/profit from continuing operations

(3,508)

(1.70)


8,447 

4.08 


(12,090)

(5.84)


Loss from discontinued operations


(3,643)

(1.76)


(2,943)

-


Basic (loss)/profit per share

(3,508)

(1.70)


4,804 

2.32 


(15,033)

(7.26)


Effect of dilutive warrants issued


-

-


-

-


Diluted (loss)/profit per share

(3,508)

(1.70)


4,804 

2.32 


(15,033)

(7.26)























26 weeks to


26 weeks to


52 weeks to



29 January 2012


30 January 2011


31 July 2011



Earnings

Per share


Earnings

Per share


Earnings

Per share



£'000s

pence


£'000s

pence


£'000s

pence


Basic (loss)/profit per share

(3,508)

(1.70)


4,804 

2.32 


(15,033)

(7.26)


Net impairment to property, plant and equipment

 - 

 - 


 - 

 - 


5,686 

2.74 


Onerous lease adjustment

407 

0.20 


 - 

 - 


4,644 

2.24 


Loss from discontinued operations before tax

 - 

 - 


3,643 

1.76 


3,329 

1.61 


Restructuring costs

1,218 

0.59 


 - 

 - 


 - 

 - 


Change in fair value of financial instruments

(218)

(0.11)


(266)

(0.13)


(356)

(0.17)


Loss on sale of property, plant and equipment

898 

0.43 


1,345 

0.65 


985 

0.48 


Related taxation effect

576 

0.28 


(1,322)

(0.64)


(3,905)

(1.89)


Basic adjusted (loss)/profit from continuing operations

(627)

(0.31)


8,204 

3.96 


(4,650)

(2.25)


9

Goodwill, intangible assets and property, plant and equipment







Goodwill


Intangible assets


Property, plant and equipment



£'000


£'000


£'000


Opening net book value at 1 August 2010

17,326 


1,750 


58,162 


Additions

-


-


2,815 


Disposals

-


-


(959)


Depreciation and amortisation

-


-


(4,084)


Net impairment

-


-


(491)


Closing net book value at 30 January 2011

17,326 


1,750 


55,443 


Additions

-


-


3,797 


Disposals

-


-


(565)


Depreciation and amortisation

-


-


(4,296)


Discontinued operations

-


-


36 


Net impairment

-


-


(5,686)


Closing net book value at 31 July 2011

17,326 


1,750 


48,729 


Additions



3,448 


Disposals



(737)


Depreciation and amortisation



(3,437)


Discontinued operations




Closing net book value at 29 January 2012

17,326 


1,750 


48,003 

 

         The goodwill relates to the acquisition of GSG Holdings Limited in 1998.


 

 

 

10

Trade and other receivables








As at


As at


As at



29 January 2012


30 January 2011


31 July 2011



£'000


£'000


£'000


Other receivables

1,156 


782 


1,780 


Prepayments

14,860 


19,488 


17,137 



16,016 


20,270 


18,917 









Movement on the provision for impairment of trade and other receivables are as follows:














Beginning of financial period




Provision for receivables impairment


-



Amounts utilised


-


-


End of financial period




 

 

 

11

Trade and other payables








As at


As at


As at



29 January 2012


30 January 2011


31 July 2011



£'000


£'000


£'000


Trade payables

64,267 


44,693 


31,793 


Other taxation and social security

10,689 


9,801 


3,710 


Other payables

11,334 


7,496 


9,397 


Deferred income

1,593 


1,759 


1,632 


Other accruals

8,188 


9,664 


8,926 



96,071 


73,413 


55,458 


 

 

 

12

Provisions








Onerous leases


Employee benefits


Total



£'000


£'000


£'000


Group







At 1 August 2010

2,415 


133 


2,548 


Utilised in the period

(306)


-


(306)


Charged in the period

1,849 


-


1,849 


Unwinding of discount


-



At 30 January 2011

3,963 


133 


4,096 


Utilised in the period

(305)


(83)


(388)


Charged in the period

4,206 


74 


4,280 


Unwinding of discount


-



At 31 July 2011

7,869 


124 


7,993 


Utilised in the period

(300)



(300)


Charged in the period

407 



407 


Unwinding of discount

48 



48 


At 29 January 2012

8,024 


124 


8,148 









Amounts due within one year





6,680 


Amounts due after more than one year





1,468 







8,148 

 

         The provision for onerous leases relates to empty properties or properties sub-let at less than their passing rent over the life of the lease.  For the period ended 29 January 2012 the discount rate used in calculating the provision was 0.5% (30 January 2011: 0.5%).


13

Assets and liabilities of discontinued operations






As at


As at



29 January 2012


30 January 2011



£'000


£'000


Assets of discontinued operations





Cash and cash equivalents

 - 


180 







Liabilities of discontinued operations





Trade and other payables

 - 


(295)


Deferred tax liability

 - 


(116)



 - 


(411)


 

 

 

14

Reconciliation of net debt








Cash


Borrowings


Net debt



£'000


£'000


£'000


Balance at 1 August 2010

7,225 


(41,566)


(34,341)


Cash flow movement

2,331 


28,500 


30,831 


Cash held by discontinued operations

(180)


-


(180)


Amortisation of finance costs

-


(493)


(493)


Balance at 30 January 2011

9,376 


(13,559)


(4,183)


Cash flow movement

10,117 


(39,500)


(29,383)


Cash held by discontinued operations

180 


23 


203 


Amortisation of finance costs

-


(491)


(491)


Balance Sheet at 31 July 2011

19,673 


(53,527)


(33,854)


Cash flow movement

(11,091)


51,000 


39,910 


Additional finance costs


3,295 


3,295 


Amortisation of finance costs


(919)


(919)


Balance Sheet at 29 January 2012

8,582 


(151)


8,432 


Financing costs capitalised


(2,849)


(2,849)


Net cash before financing costs

8,582 


(3,000)


5,583 


15     Risks and uncertainties

         The Board and senior management are responsible for identifying and managing potential risks and uncertainties which could have an impact on the performance of the Group.  These are set out in the Annual Report and Financial Statements 2011 and the Board considers that these remain the principal risks which could affect the Group in respect of the current financial year. 

 

 

16     Forward looking statements

         To the extent that any statement in this interim report can be considered forward looking, the Board can give no assurance that these statements will prove to be correct.  Because any such statement involves risk and uncertainty, actual results may differ materially from any expressed or implied by these forward looking statements.

         The Board undertakes no obligation to update any forward looking statement whether as a result of new information, future events or otherwise. 

 

17     Statement of directors' responsibilities

         The directors confirm, to the best of their knowledge and belief, 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 report herein includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8.

         The directors of Clinton Cards PLC are listed in the Clinton Cards PLC Annual Report and Financial Statements 2011 and on the company website at www.clintoncards.co.uk.

         By order of the Board

 

 

 

         __________________________________                                           __________________________________

         D J Lewin, OBE                                                                                      Darcy Willson-Rymer

         Chairman                                                                                                Chief Executive Officer

 

        

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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