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Lees Foods Plc (LEE)

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Tuesday 08 May, 2012

Lees Foods Plc

Preliminary Results

RNS Number : 9055C
Lees Foods Plc
08 May 2012
 



 

 

 

 

LEES FOODS Plc ("Lees" or the "Company")

 

Preliminary results for the year ended 31st December 2011

 

 

Highlights

 

·      Sales up 8.9% to £20.3m (2010 : £18.7m)

·      6.1% increase in pre-tax profit* to £1.09m (2010 : £1.03m)

·      Gross margin reduced to 33.1% (2010 : 33.8%)

·      Basic earnings per share increased to 31.94p (2010 : 29.28p)

 

*Pre-tax profit is stated prior to share based payment deductions

 

 

 

Enquiries

 

Lees Foods Plc                                                                        01236 441 600

Clive Miquel - Chief Executive

David Simson - Finance Director

Shore Capital and Corporate - Nomad and Broker                        0207 408 4090

Stephane Auton/Patrick Castle


 

 

 

Chief Executive's Report

 

I am pleased to report that our profits before tax and share based payments have increased to approximately £1.09 million (2010 £1.03 million). This was achieved through an 8.9% growth in sales with sales turnover reaching £20.3 million (2010 £18.7 million). This increase was achieved across a number of customers and categories.

The higher level of turnover was balanced by an overall reduction in our gross margin from approximately 33.8% to approximately 33.1%, caused by significantly higher input prices. In January 2011, I referred to the cost increases that we would be facing in 2011, due to the general rise in world-wide commodity prices and the specific cost increases in our raw materials and packaging. The steps we have taken to combat the impact of these cost increases have been successful in mitigating the effect of these cost increases during 2011. These steps included a programme of continuous investment in our plant to drive production efficiencies, a strategic review of our product packaging that has resulted in a meaningful reduction in packaging usage, and targeted price increases across our customer base for our range of Lees and Waverley products.

Successful and careful cash management, particularly around the lead up to the year end, meant the final year end cash position was £2.02m (2010 £1.02m). The current cash position, which includes the payments received from HMRC announced on 27 January 2012, is slightly below the level at 31 December 2011.

Protecting margins through managing the impact of considerable ingredient and packaging cost increases continues to be our main focus. The cost increases we face in 2012 on two of our key ingredients, sugar and egg, are significant. In order to meet the current challenge of rising ingredient costs, it is vitally important that we successfully introduce new products at improved margin levels to continue our profitable growth. In this regard, during 2011 we launched Lees mini meringue cake decorations which take us into a new product area with our retail customers.

 

Offer for the Company

On 10 April 2012, Randotte (No. 555) Limited announced an offer by way of a scheme of arrangement for Lees Foods plc. As stated in Part 1 of the Scheme Document, 'Letter from the Board of Lees Foods plc', posted to shareholders on 19 April 2012, the Directors stated that "the Company would be better placed as a private company given the ongoing costs associated with being on AIM and the time demands on key members of the team associated with the listing.  The Board also believes that the size of the Company and the lack of liquidity in its shares do not make it suited to being admitted to trading on AIM."

 

Dr Chris Greig

It was with great sadness that we said goodbye to our Non-executive Chairman, Dr Chris Greig, who passed away earlier this year. Chris made a terrific contribution to the Lees business and he bravely continued to fulfil his role fully until the very end. His knowledge, experience and friendship will be sadly missed.

 

Clive Miquel

Chief Executive

Date: 8 May 2012

 

 

 

 

 

 

 

LEES FOODS Plc                                                                                                                    

 

Consolidated Income Statement

For the year ended 31 December 2011

 

 




2011

2010




£

£






Revenue



20,300,494

18,648,443

Cost of sales



(13,587,246)

(12,350,567)




───────

───────

Gross profit



6,713,248

6,297,876











Selling and distribution costs



(3,207,210)

(2,990,768)

Administrative costs



(2,416,412)

(2,272,876)

Share based payments



(100,409)

(79,416)

Other operating income



16,240

16,540




───────

───────




(5,707,791)

(5,326,520)




───────

───────

Operating profit



1,005,457

971,356






Finance Income



35,284

43,576

Finance costs



(48,661)

(64,964)




───────

───────






Profit before Tax



992,080

949,968






Tax



(214,230)

(253,863)




───────

───────

Profit for the year



777,850

696,105




════════

════════






 

Earnings per Share








Basic (pence per share)


31.94

29.28

Diluted (pence per share)


31.81

29.01

 

 

Consolidated Statement of Comprehensive Income

For the year ended 31 December 2011





Profit for the period / Total comprehensive income


777,850

696,105



════════

════════





Attributable to :




Owners of the parent company


777,850

696,105



════════

════════

 

 



LEES FOODS Plc                                                                                                                    

 

Consolidated Statement of Financial Position

As at 31 December 2011







2011

2010







£

£

Non-Current Assets




Intangible assets


1,803,414

1,803,414

Property, plant and equipment


2,256,012

2,325,500



───────

───────



4,059,426

4,128,914

Current Assets




Inventories


1,623,368

1,448,951

Trade and other receivables


3,090,634

2,976,589

Cash at bank and in hand


2,019,280

1,016,568



───────

───────



6,733,282

5,442,108

Current liabilities




Trade and other payables


(4,810,701)

(4,259,593)

Current tax liabilities


(105,813)

(157,809)



───────

───────

Net Current Assets


1,816,768

1,024,706





Total Assets less Current Liabilities


5,876,194

5,153,620





Non-current liabilities




Other payables


(228,659)

(171,444)





Accruals and deferred income


(80,432)

(96,672)





Provisions for Liabilities




Deferred tax


(189,830)

(239,424)



───────

───────



5,377,273

4,646,080



═══════

═══════

Equity




Called up share capital


2,444,751

2,414,751

Share premium account


833,512

833,512

Share-based payment reserve


64,152

51,903

Capital redemption reserve


65,000

65,000

Retained earnings


1,502,551

901,767

Merger reserve


579,934

579,934

Employee Share Ownership Trust


(112,627)

(200,787)



───────

───────

Total Equity Shareholders' Funds


5,377,273

4,646,080



═══════

═══════

 

 



 

LEES FOODS Plc                                                                                                                    

 

Consolidated Statement of Cash Flows

For the year ended 31 December 2011

 



2011

2010







£

£





Net cash inflow from operating activities


1,381,414

1,289,898



───────

───────

Investing activities








Interest received


35,284

43,576

Proceeds on disposal of property, plant and equipment


10,964

5,250

Purchases of property, plant and equipment


(157,831)

(341,361)



───────

───────

Net cash used in investing activities


(111,583)

(292,535)



───────

───────





Financing activities








Dividends paid


(177,065)

(162,321)

Repayment of borrowings


-

(125,000)

Repayment of obligations under finance leases


(120,054)

(78,262)

Proceeds from issuance of share capital


30,000

10,000



───────

───────

Net cash used in financing activities


(267,119)

(355,583)



───────

───────





Net increase in cash and cash equivalents


1,002,712

641,780





Cash and cash equivalents at beginning of year


1,016,568

374,788



───────

───────

Cash and cash equivalents at end of year


2,019,280

1,016,568



═══════

═══════





Cash and cash equivalents








Bank and cash in hand


2,019,280

1,016,568



═══════

═══════





 

 

 



LEES FOODS Plc 

 

Consolidated Statement of Cash Flows (continued)

For the year ended 31 December 2011

 



2011

2010







£

£





Profit from operations


1,005,457

971,356





Adjustment for:




Depreciation of property, plant and equipment


433,096

387,911

Loss / (gain) on disposal of property, plant and equipment


46,134

(413)

Development grant release


(16,240)

(16,540)

ESOP shares vested unconditionally with employees


88,160

88,160

Share based payments


12,249

(8,744)



───────

───────

Operating cash flows before movements in working capital


 

1,568,856

 

1,421,730



═══════

═══════









Increase in inventories


(174,417)

(226,126)

(Increase)/decrease in receivables


(114,045)

9,511

Increase in payables


465,502

411,979





Income taxes paid


(315,821)

(262,232)

Interest paid - bank overdraft and loan


(31,157)

(47,134)

Interest paid - HP and finance lease


(17,504)

(17,830)



───────

───────

Net cash flow from operating activities


1,381,414

1,289,898



═══════

═══════

 













































































 

 

 

 

 

 

 

 



 

LEES FOODS Plc                                                                                                                    

 

Notes to the Consolidated Financial Statements

For the year ended 31 December 2011

 

1.       Accounting Policies

 

Statement of compliance

 

The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) issued by the International Accounting Standards Board, International Financial Reporting Interpretations Committee (IFRIC) interpretations endorsed by the European Union and the requirements of the Companies Act 2006 applicable to companies reporting under IFRS.

 

Basis of preparation

 

The financial statements have been prepared on the historical cost basis.  Historical cost is generally based on the fair value of the consideration given in exchange for assets. The functional and presentational currency of the Group is Sterling.

 

Going concern

 

The Company's business activities, together with the factors likely to affect future performance, are set out in the Chief Executives Report.  In addition, note 19 to the financial statements includes the Company's policies for managing capital and its exposures to interest rate risk, credit risk and liquidity risk.

The company has no long term debt, has significant cash resources, is cash generative and has a diversified customer base.  As a consequence, the directors believe that the company is well placed to manage its business risks and has adequate resources to continue in operational existence for the foreseeable future.  Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements.

 

Standards affecting presentation and disclosure

 

In the current year, the following new and revised Standards have been adopted but have not had any material impact on the amounts reported in these financial statements:

IFRS 1 (amended 2010)    Additional exemptions for first time adopters

IFRS 3 (amended 2010)    Business combinations             

IFRS 7(amended 2010)     Financial instruments: disclosures

IAS 1 (amended 2010)      Presentation of financial statements

IAS 21 (amended 2010)    The effects of foreign exchange rates

IAS 24 (revised 2009)       Related party disclosures

IAS 27                            Consolidated and separate financial statements

IAS 34 (amended 2010)    Interim financial reporting

IFRIC 19                          Extinguishing financial liabilities with equity instruments

 



LEES FOODS Plc                                                                                                                    

 

Notes to the Consolidated Financial Statements

For the year ended 31 December 2011

 

1.       Accounting Policies (continued)

 

Standards affecting presentation and disclosure (continued)

 

At the date of authorisation of the financial statements, the following Standards and Interpretations which have not been applied in the financial statements were in issue but not yet effective (and in some cases had not yet been adopted by the EU):

 

IFRS 1 (amended 2010)    First time adoption of IFRS: Hyperinflation

IFRS 7 (amended 2010)    Financial instruments disclosures: transfers of financial assets

IFRS 7 (amended 2011)    Financial instruments disclosures: offsetting financial assets and financial liabilities

IFRS 9                            Financial instruments

IFRS 10                          Consolidated financial statements

IFRS 11                          Joint arrangements

IFRS 12                          Disclosure of interests in other entities

IFRS 13                          Fair value measurement

IAS 1 (amended 2011)      Presentation of other comprehensive income

IAS 12 (amended 2010)    Income taxes: deferred tax

IAS 19 (amended 2011)    Employee benefits

IAS 27 (amended 2011)    Separate financial statements

IAS 28 (amended 2011)    Investments in associates and joint ventures

IAS 32 (amended 2011)    Financial instruments presentation: offsetting financial assets and financial liablilities

 

The Directors do not expect that the adoption of these Standards or Interpretations in future periods will have a material impact on the financial statements of the Company or the Group.

 

Basis of consolidation

 

The consolidated financial statements incorporate the financial statements of the company and all principal subsidiaries for the year ended 31 December 2011.  The results of subsidiaries acquired are included in the consolidated income statement from the effective date of acquisition.

 

All intra-group transactions, balances, income and expenses are eliminated in full on consolidation.



LEES FOODS Plc 

 

Notes to the Consolidated Financial Statements

For the year ended 31 December 2011

 

2.

Share based payments

2011

2010



£

£






Share based payments

100,409

79,416



═══════

═══════

 

A charge of £100,409 was made in the year in accordance with IFRS 2 "Share-based payment" to recognise the cost of issuing shares to employees (2010 - £79,416).

 





 

3.       Earnings per share

         

          Basic earnings per share

 

          Basic earnings per share is calculated by dividing the result for the financial year by the weighted average number of ordinary shares in issue during the year.  The weighted average number of ordinary shares in 2011 has been calculated based on the following assumptions;

 

(a)     2,414,751 ordinary shares were in issue up to 13 January 2011.

 

(b)     20,000 ordinary shares were issued on 14 January 2011, giving a total of 2,434,751 shares

 

(c)     10,000 ordinary shares were issued on 11 November 2011, giving a total of 2,444,751 shares at 31 December 2011

         

          Diluted earnings per share

 

          In accordance with IAS 33 "Earnings Per Share", diluted earnings per share takes into account the dilutive effect of outstanding share options.  The following assumptions have been made:

 

          (a)     The weighted average number of shares under option is 20,000 (2010: 50,000).

 

          (b)     The weighted average number of shares that would have been issued at the average market value is 10,417 (2010: 27,322).

 

          (c)    The average market value of £1.92 during 2011 (2010: £1.83) per ordinary share has been used in the calculation.

 



LEES FOODS Plc 

 

Notes to the Consolidated Financial Statements

For the year ended 31 December 2011

 

 

3.       Earnings per share (continued)

 


Basic Earnings

Basic

Shares

 

EPS


£

Number

Pence

2011








Profit attributable to ordinary equity holders

777,850

-

-

Weighted average shares during year

-

2,435,672

-

Basic EPS

-

-

31.94

Weighted average number of shares under option

 

-

 

20,000

 

-

Weighted average number of shares that would have been issued at the market value

 

-

 

(10,417)

 

-

Diluted EPS

-

-

31.81


───────

───────

───────

2010








Profit attributable to ordinary equity holders

696,105

-

-

Weighted average shares during year

-

2,376,847

-

Basic EPS

-

-

29.28

Weighted average number of shares under option

 

-

 

50,000

 

-

Weighted average number of shares that would have been issued at the market value

 

-

 

(27,322)

 

-

Diluted EPS

-

-

29.01


───────

───────

───────

 

4.

Dividend

£

£






Dividend paid in the year on 2,434,751 ordinary shares at 7.5p per share (2010 - 2,349,751 ordinary shares at 7.2p)

 

182,606

 

169,182






Less proportion of dividend due to Lees Group Holdings




Limited Employee Share Ownership Trust

(5,540)

(6,861)



───────

───────



177,066

162,321



═══════

═══════

5.       Despatch of documents

 

These preliminary results for the year ended 31 December 2011 do not constitute audited statutory accounts for the Company. Copies of the Group's statutory accounts for the year ended 31 December 2011, upon which the auditors have still to report, will be available and despatched to shareholders in due course. 

 

 


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