Interim Results - 28 Weeks to 6 November 1999
MFI Furniture Group PLC
15 December 1999
MFI FURNITURE GROUP PLC
Interim Results for the 28 weeks ended 6 November 1999
MFI Furniture Group Plc, the UK's largest manufacturer and retailer
of kitchen and bedroom furniture, announces its interim results for
the 28 weeks ended 6 November 1999.
Financial Highlights
* Underlying growth (excluding discontinued product lines) of
4%.
* Total sales down 3% to £431.7 m (H1 1998: £442.5 m)
- Improving sales trend in second quarter
* Operating profit up 35% to £18.0 m (H1 1998 : £13.3m)
* Profit before tax and exceptional items up 48% to £12.1 m (H1
1998: £8.2 m).
* Free cash flow of £53.1 m (H1 1998: £23 m); gearing down to
19% (H1 1998: 50%)
* Underlying earnings per ordinary share up 81% to 1.43p (H1
1998: 0.79p)
* Interim dividend of 0.7p per share declared (H1 1998: 0.7p)
Business Highlights
* Realisation of £108 million to come from sale and partial
leaseback of 10 retail properties
* Disposal of Hygena Packaging for £37 million
* Continued growth from Howden Joinery
* Successful launch of MFI's largest ever new range of kitchens
Commenting on the results John Hancock, Chief Executive said:
'The last six months have been a period of intense activity for MFI.
We have concentrated on stabilising the business - both financially
and operationally - and laying the foundations for sustainable
growth in the future. Much remains to be done, but I believe that we
have made an encouraging start.
'The Winter Sale represents a very important trading period for us,
and we will issue a Preliminary Results statement and a full update
on current trading in March.'
Contacts:
MFI Furniture Group PLC
John Hancock, Chief Executive 0181 913 5319
Michael Williamson, Finance Director 0181 913 5343
Brunswick Group Limited
Susan Gilchrist / William Cullum / Charlotte Elston 0171 404 5959
FINANCIAL HIGHLIGHTS
-------------------------------------------------------------------
28 weeks to 28 weeks to 52 weeks to
6 November 7 November 24 April
1999 1998 1999
(as restated)
Unaudited Unaudited Audited
CONSOLIDATED RESULTS £m £m £m
Turnover 431.7 442.5 810.4
Operating profit - before 18.0 13.3 26.4
exceptional items
Operating profit/(loss) - 18.0 (14.3) (8.4)
after exceptional items
Profit/(loss) before 12.1 (26.6) (24.8)
taxation
EARNINGS PER SHARE
(Undiluted)
Earnings/(loss) per 10p 1.43 p (4.12) p (4.17) p
ordinary share
Earnings per 10p ordinary 1.43 p 0.79 p 2.08 p
share before exceptional
items
DIVIDEND
Dividend per Ordinary 0.70 p 0.70 p 0.70 p
Share of 10p each
GROSS MARGIN -before 54.3% 52.8% 54.1%
exceptional items
OPERATING MARGIN -before 4.2% 3.0% 3.3%
exceptional items
GEARING 19% 50% 37%
NET BORROWINGS AT PERIOD £60.2 m £98.3 m £113.3 m
END
RETAIL TRADING AREA '000
SQ. FT. (at end of
period)
UK 4,742 5,224 4,678
France and Spain 742 750 712
RETAIL SALES PER SQ. FT.
(£)
UK 68.4 63.9 119.0
France and Spain 50.2 47.9 101.0
NUMBER OF EMPLOYEES - (at
end of period)
UK - Retail 4,598 5,278 4,592
- Trade 703 483 575
France and Spain 674 649 634
Manufacturing 2,785 2,617 2,662
Other operations 56 60 59
Total 8,816 9,087 8,522
--------------------------------------
NUMBER OF EMPLOYEES - 8,522 9,371 9177
(average)
CHAIRMAN'S STATEMENT
-------------------------------------------------------------------
Financial results
Turnover for the Group fell from £442.5 million to £431.7 million.
Included in the prior half year's turnover was £29 million of
discontinued product which, when excluded, gives an underlying 4%
growth on a continuing products basis. This confirms the improving
sales trend indicated at the preliminary results stage in July and
at the AGM in September.
Group operating profit was £18.0 million. This represents a 35%
increase over last year, and demonstrates both the benefits from the
major restructuring of the UK retail business over the past 12
months and the continued growth of Howden Joinery.
Pre-tax profit at £12.1 million also shows a strong improvement
against pre-exceptional profits of £8.2 million last year.
Free cash flow generated was £53 million, and was used to reduce the
debt of the Group. With net borrowings of £60 million, gearing has
been reduced to 19% at the half year end. The Group has plans in
place to reduce debt further, to provide greater financial stability
and flexibility as a platform for improved operating performance.
As a result of the improved operating and cash flow performance and
the recently announced sale of some of our assets, the Board is
declaring an interim dividend of 0.7p, payable on 4 February 2000.
Review of operations
UK retail sales for the first quarter were relatively depressed.
The second quarter showed a substantial improvement, thanks in part
to the launch of MFI's largest-ever new range of kitchen products,
which has been rolled out progressively since August and has been
excellently received by the market. A major advertising and
promotional campaign, beginning in August, also helped re-
communicate MFI's core 'value' promise to the customer. Despite the
sharp reduction last year in the numbers of products carried in the
stores, footfall and sales have been relatively unaffected, showing
that the MFI retail brand retains its core appeal to the customer.
These are encouraging trends as we approach the peak post-Christmas
season.
The Manufacturing division maintained its position as the industry's
leading low-cost producer.
The introduction twelve months ago of the new system of home
delivery from distribution centres is expected to cut distribution
costs substantially over the next three years. Most of the initial
problems in the customer service area have been resolved, but there
are still issues which continue to be vigorously addressed, and we
are working to provide a 'right first time' service to all
customers.
Howden Joinery continued to grow strongly, with sales up by 57% and
profits up by 79%. Our overseas operations in France and Spain
increased sales in local currency by 14% and 19% respectively.
Major developments
We have devoted much of the past six months to strengthening the
management team and to a programme of financial and operational
stabilisation for the Group, as well as to laying the foundations
for sustainable growth in the future. Among the key developments
are:
- A strengthened management structure
Appointments have included: Mark Horgan (previously with Mars) as
Group Marketing Director; Gordon MacDonald (formerly of Safeway) as
Group Human Resources Director; and Michael Williamson (ex-Rhone
Poulenc Rorer and SmithKline Beecham) as Group Finance Director. A
management executive board representing all key divisions and
disciplines has been created in order to improve communications and
decision making across the Group.
- Improved financial stability
In the interests of strengthening the balance sheet to provide a
firmer foundation for future growth, we have announced that, subject
to shareholder approval, we will undertake the sale and partial
leaseback of ten freehold retail stores for a total of £108 million.
We plan a similar exercise with six freehold distribution centres
for proceeds of approximately £25 million.
Today we are announcing the sale of our subsidiary, Hygena
Packaging, to La Rochette SA of France for a consideration of
approximately £37 million. Hygena Packaging was regarded as a non-
core activity and this, together with the property disposal
proceeds, is being applied primarily to reduce the borrowings of the
Group.
The remaining £200 million property portfolio will continue to be
managed actively, with a view to maintaining financial flexibility
and to realising maximum value for the business and its
shareholders.
Change of year end/dividend policy
The Board has decided to change the Group's accounting reference
date to 31 December. The rationale for the change, which has been
reviewed by management and has received overwhelming support, is as
follows:
* it will improve the accuracy and control of the forecasting and
business planning processes;
* it will place the major trading period in the first quarter,
allowing management time to respond to trading accordingly; and
* it will enable the forecasting and communication of results to
shareholders and analysts to become more accurate and predictable.
With the change in year-end date, dividends will now be paid in
October (interim) and June (final). It is anticipated that future
interim and final dividends will be of approximately equal value.
D S Hunt 15 December 1999
Chairman
KPMG
-------------------------------------------------------------------
Independent review report by KPMG Audit Plc to MFI Furniture Group
Plc
Introduction
We have been instructed by the Company to review the financial
information set out on pages 5 to 12 and we have read the other
information contained in the interim report and considered whether
it contains any apparent misstatements or material inconsistencies
with the financial information.
Directors' responsibilities
The interim report, including the financial information contained
therein, is the responsibility of, and has been approved by, the
directors. The Listing Rules of the London Stock Exchange require
that the accounting policies and presentation applied to the interim
figures should be consistent with those applied in preparing the
preceding annual accounts except where they are to be changed in the
next annual accounts in which case any changes, and the reasons for
them, are to be disclosed.
Review work performed
We conducted our review in accordance with guidance contained in
Bulletin 1999/4: Review of Interim financial information issued by
Auditing Practices Board. A review consists principally of making
enquiries of Group management and applying analytical procedures to
the financial information and underlying financial data and, based
thereon, assessing whether the accounting policies and presentation
have been consistently applied unless otherwise disclosed. A review
is substantially less in scope than an audit performed in
accordance with Auditing Standards and therefore provides a lower
level of assurance than an audit. Accordingly we do not express an
audit opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material
modifications that should be made to the financial information as
presented for the 28 weeks ended 6 November 1999.
KPMG Audit Plc
Chartered Accountants
London
15 December 1999
CONSOLIDATED PROFIT AND LOSS ACCOUNT
-------------------------------------------------------------------
28 weeks to 6 November 1999
-----------------------------
Dis
Continuing continued
Total
Operations OperationsUnaudited
Note Unaudited Unaudited £m
£m £m
Turnover 2 417.6 14.1 431.7
Change in stocks (1.1) - (1.1)
Other operating income 12.2 - 12.2
---------------------------------
428.7 14.1 442.8
---------------------------------
Raw materials and 191.1 4.9 196.0
consumables
Staff costs 91.9 3.0 94.9
Depreciation of 17.1 1.0 18.1
tangible fixed assets
Other operating charges 112.6 3.2 115.8
---------------------------------
412.7 12.1 424.8
---------------------------------
Operating profit/(loss) 2 16.0 2.0 18.0
Profit/(loss) on 0.7 0.1 0.8
disposal of fixed
assets
---------------------------------
Profit/(loss) on 16.7 2.1 1
ordinary activities 8
before interest .
8
===================
Interest receivable and 0.8
similar income
Interest payable and (7.5)
similar charges
------------
Profit/(loss) before 2 12.1
taxation
Tax 4 (3.6)
------------
Profit/(loss) for the 8.5
financial period
Dividends 5 (4.2)
------------
Amount transferred to 6 4.3
reserves
============
Earnings per share
Earnings per 10p 7 1.43p
ordinary share
Diluted earnings per 7 1.43p
10p ordinary share
28 weeks to 7 November 1998 (as restated)
------------------------------------------
Con
tinuin Total
g Dis Opera
Opera Con tions
tions tinued Pre Excep
Pre Opera Excep tional
excep tions tionals Items Total
tional Un Un Un Un
s audited audited audited audite
Un £m £m £m d
audite £m
d
£m
Turnover 428.3 14.2 442.5 - 442.5
Change in stocks 2.0 - 2.0 (4.2) (2.2)
Other operating 11.1 - 11.1 - 11.1
income
-------------------------------------------
441.4 14.2 455.6 (4.2) 451.4
-------------------------------------------
Raw materials and 205.2 5.6 210.8 1.0 211.8
consumables
Staff costs 96.1 2.7 98.8 6.7 105.5
Depreciation of 20.5 0.9 21.4 - 21.4
tangible fixed
assets
Other operating 108.0 3.3 111.3 15.7 127.0
charges
-------------------------------------------
429.8 12.5 442.3 23.4 465.7
-------------------------------------------
Operating 11.6 1.7 13.3 (27.6) (14.3)
profit/(loss)
Profit/(loss) on (0.8) - (0.8) (6.5) (7.3)
disposal of fixed
assets
------------------------------------------
Profit/(loss) on 10.8 1.7 12.5 (34.1) (21.6)
ordinary activities
before interest
=================
Interest receivable 1.0 - 1.0
and similar income
Interest payable and (5.3) (0.7) (6.0)
similar charges
-------------------------
Profit/(loss) before 8.2 (34.8) (26.6)
taxation
Tax (3.5) 5.6 2.1
-------------------------
Profit/(loss) for 4.7 (29.2) (24.5)
the financial period
Dividends (4.2) - (4.2)
-------------------------
Amount transferred 0.5 (29.2) (28.7)
to reserves
=========================
Earnings per share
Earnings per 10p 0.79p (4.91)p (4.12)p
ordinary share
Diluted earnings per 0.79p (4.91)p (4.12)p
10p ordinary share
52 weeks to 24 April 1999
-------------------------------------------
Con
tinuin Total
g Dis Opera
Opera Con tions
tions tinued Pre Excep
Pre Opera excep tional
excep tions tionals Items Total
tional Audited Audited Audited Audite
s £m £m £m d
Audite £m
d
£m
784.6 25.8 810.4 - 810.4
Turnover (8.3) - (8.3) (4.2) (12.5)
Change in stocks 20.5 - 20.5 - 20.5
Other operating
income
-------------------------------------------
796.8 25.8 822.6 (4.2) 818.4
-------------------------------------------
354.1 9.3 363.4 1.0 364.4
Raw materials and 176.4 5.1 181.5 6.7 188.2
consumables
Staff costs 35.9 1.7 37.6 7.2 44.8
Depreciation of 207.3 6.4 213.7 15.7 229.4
tangible fixed
assets
Other operating
charges
-------------------------------------------
773.7 22.5 796.2 30.6 826.8
-------------------------------------------
23.1 3.3 26.4 (34.8) (8.4)
Operating
profit/(loss)
(1.3) - (1.3) (6.5) (7.8)
Profit/(loss) on
disposal of fixed
assets
-------------------------------------------
21.8 3.3 25.1 (41.3) (16.2)
================
Profit/(loss) on
ordinary activities
before interest
2.2 - 2.2
Interest receivable (10.1) (0.7) (10.8)
and similar income
Interest payable and
similar charges
-------------------------
17.2 (42.0) (24.8)
Profit/(loss) before (4.8) 4.8 -
taxation
Tax -------------------------
12.4 (37.2) (24.8)
Profit/(loss) for (4.2) - (4.2)
the financial period
Dividends -------------------------
8.2 (37.2) (29.0)
=========================
2.08p (6.25)p (4.17)p
2.08p (6.25)p (4.17)p
CONSOLIDATED BALANCE SHEET
-------------------------------------------------------------------
As at As at As at
6 November 7 November 24 April
1999 1998 1999
(as
restated)
Notes Unaudited Unaudited Audited
FIXED ASSETS £m £m £m
Tangible assets 424.7 359.7 456.2
Investments 8.0 8.0 8.0
-----------------------------------
432.7 367.7 464.2
----------------------------------
CURRENT ASSETS
Stocks 88.3 90.7 85.9
Debtors 44.5 45.1 70.1
Investments 10 0.6 0.6 0.6
Cash at bank and in 10 53.0 30.4 52.9
hand
----------------------------------
186.4 166.8 209.5
-----------------------------------
CREDITORS FALLING DUE
WITHIN ONE YEAR
Borrowings 10 105.5 115.5 155.5
Other amounts 172.4 179.7 178.2
----------------------------------
277.9 295.2 333.7
----------------------------------
Net current (91.5) (128.4) (124.2)
liabilities
TOTAL ASSETS LESS 341.2 239.3 340.0
CURRENT LIABILITIES
CREDITORS FALLING DUE
AFTER
MORE THAN ONE YEAR
Borrowings 10 8.3 13.8 11.3
Other amounts 2.6 0.7 0.8
-----------------------------------
10.9 14.5 12.1
-----------------------------------
PROVISIONS FOR 17.0 26.6 18.7
LIABILITIES AND
CHARGES
-----------------------------------
Net assets 313.3 198.2 309.2
===================================
CAPITAL AND RESERVES
Called up share 59.5 59.5 59.5
capital
Share premium account 6 43.9 43.9 43.9
Other reserves 6 16.5 14.1 15.3
Revaluation Reserve 6 110.0 - 111.8
Profit and loss 6 83.4 80.7 78.7
account
-----------------------------------
Equity shareholders' 313.3 198.2 309.2
funds
==================================
CONSOLIDATED CASH FLOW STATEMENT
-------------------------------------------------------------------
As at As at As at
6 November 7 November 24 April
1999 1998 1999
Notes Unaudited Unaudited Audited
£m £m £m
Cash inflow from 8 46.7 38.1 59.3
operating activities
Returns on 9 (6.6) (5.3) (9.0)
investments and
servicing of finance
Taxation - 0.5 (17.7)
Capital expenditure 9 13.2 (40.1) (49.5)
Equity dividends paid - (18.4) (22.6)
-----------------------------------
53.3 (25.2) (39.5)
Management of liquid 9 - - -
resources
Financing 9 (53.0) 17.4 54.7
-----------------------------------
Increase/(decrease) 0.3 (7.8) 15.2
in cash in the period
===================================
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
Increase/(decrease) 0.3 (7.8) 15.2
in cash in the period
Cash movement on :
- debt and lease 9 53.0 (17.4) (54.7)
financing
-----------------------------------
Change in net debt 53.3 (25.2) (39.5)
resulting from cash
flows
Effect of foreign 10 (0.2) 0.6 0.1
exchange rate changes
-----------------------------------
Movement in net debt 53.1 (24.6) (39.4)
in the period
Net debt at the 10 (114.0) (74.6) (74.6)
beginning of the
period
-----------------------------------
Net debt at the end 10 (60.9) (99.2) (114.0)
of the period
===================================
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
------------------------------------------------------------------
28 weeks to 28 weeks to 52 weeks to
6 November 7 November 24 April
1999 1998 1999
(as
restated)
Unaudited Unaudited Audited
£m £m £m
Profit/(loss) for the 8.5 (24.5) (24.8)
financial period
Unrealised surplus on 111.8
revaluation of
properties
--------------------------------------
8.5 (24.5) 87.0
Translation differences
on foreign currency (0.2) 0.6 0.1
denominated net
investments
--------------------------------------
Total recognised gains 8.3 (23.9) 87.1
and losses for the
period
===========
Prior period adjustment (13.8) (13.8)
(Note 11)
-------------------------
Total gains and losses (37.7) 73.3
recognised since the
last annual report.
=========================
RECONCILIATION OF MOVEMENTS IN EQUITY SHAREHOLDERS' FUNDS
------------------------------------------------------------------
28 weeks to 28 weeks to 52 weeks to
6 November 7 November 24 April
1999 1998 1999
(as
restated)
Unaudited Unaudited Audited
£m £m £m
Profit/(loss) for the 8.5 (24.5) (24.8)
financial period
Dividends (4.2) (4.2) (4.2)
--------------------------------------
Retained profit/(loss) 4.3 (28.7) (29.0)
for the financial period
Unrealised surplus on - - 111.8
revaluation of
properties
Other recognised losses (0.2) 0.6 0.1
---------------------------------------
Net addition/(reduction) 4.1 (28.1) 82.9
to equity shareholders'
funds
Equity shareholders' 309.2 226.3 226.3
funds at beginning of
the period *
---------------------------------------
Equity shareholders' 313.3 198.2 309.2
funds at end of the
period
======================================
* Equity shareholders' funds have been restated for both
comparative periods with the shareholders' funds being reduced by
£13.8m at April 1998 which affects the opening reserves of both 6
November 1998 and 24 April 1999 respectively.
NOTES TO THE FINANCIAL STATEMENTS
-------------------------------------------------------------------
1 BASIS OF PREPARATION
The financial information for the 28 weeks ended 6 November 1999 and
7 November 1998 are unaudited and have been prepared using
accounting policies which are consistent with those applied to the
audited financial statements for the 52 weeks ended 24 April 1999.
These statements do not constitute statutory financial statements
within the meaning of Section 240 of the Companies Act 1985. The
comparative figures for the 52 weeks ended 24 April 1999 are an
abridged statement of the Group's full financial statements for that
period which have been delivered to the Registrar of Companies and
on which the auditors made an unqualified report.
2 SEGMENTAL ANALYSIS
28 weeks to 7 November 1998 52 weeks to 24
(as restated) April 1999
---------------------------------------------
28 weeks Before Before Excep
to 6 Excep Excep Excep tion
November tional tional tional al
1999 items items Total items items Total
TURNOVER £m £m £m
UK - 323.9 354.7 636.1
Retail
- Trade 55.4 35.2 70.5
France 36.6 35.4 73.2
and
Spain
Other 1.7 3.0 4.8
opera
tions
----- ---- ----
Continu 417.6 428.3 784.6
ing
Opera
tions
Disconti 14.1 14.2 25.8
nued
Opera
tions
----- ---- ----
431.7 442.5 810.4
PROFIT/ £m £m £m £m £m £m £m
(LOSS)
BEFORE
TAXATION
UK - 10.5 8.3 (27.6) (19.3) 7.9 (34.8) (26.9)
Retail
- Trade 5.0 2.8 - 2.8 7.7 - 7.7
France 0.5 - - - 6.6 - 6.6
and
Spain
Other - 0.5 - 0.5 0.9 - 0.9
opera
tions
-------------------------------------------------------
Continu 16.0 11.6 (27.6) (16.0) 23.1 (34.8) (11.7)
ing
Opera
tions
Discon 2.0 1.7 - 1.7 3.3 - 3.3
tinued
Opera
tions
-------------------------------------------------------
18.0 13.3 (27.6) (14.3) 26.4 (34.8) (8.4)
Profit/( 0.8 (0.8) (6.5) (7.3) (1.3) (6.5) (7.8)
Loss) on
disposal
of fixed
assets
Net (6.7) (4.3) (0.7) (5.0) (7.9) (0.7) (8.6)
interest
payable
-------------------------------------------------------
Profit/( 12.1 8.2 (34.8) (26.6) 17.2 (42.0) (24.8)
loss)
before
taxation
-------------------------------------------------------
NET £m £m £m
ASSETS
/(LIABIL
ITIES)
UK - 327.4 232.9 347.6
Retail
- Trade 28.9 19.9 33.0
France 9.0 24.9 25.4
and
Spain
Other 12.3 18.8 16.5
opera
tions
-------- ----- -----
377.6 296.5 422.5
Un (64.3) (98.3) (113.3)
Allocate
d net
liabil
ities
-------- ----- -----
313.3 198.2 309.2
-------- ----- -----
Manufacturing operating profit has been apportioned across the
separate divisions in proportion to its sales to those divisions.
Unallocated net liabilities comprise balances in respect of
dividends and net borrowings.
The analysis of turnover by destination is not materially different
to the analysis of turnover by origin.
NOTES TO THE FINANCIAL STATEMENTS
-------------------------------------------------------------------
3 EXCEPTIONAL ITEMS
The exceptional items charged in the Group profit and loss account
for the prior periods arise from the restructuring of the UK Retail
business.
4 TAXATION
The taxation charge is calculated at 29.8% per cent on profit (28
weeks to 7 November 1998 - 39.8% ; 52 weeks to 24 April 1999 -
27.9%), being the estimated effective rate of taxation for the
36 weeks ending 1 January 2000.
5 DIVIDEND
The interim dividend will be paid on 4 February 2000 to shareholders
on the register of members at the close of business on 6 January
2000. The shares will be quoted ex-dividend on 29 December 1999.
6 RESERVES
Share Profit and
premium Other Revaluation loss
account reserves Reserve account
£m £m £m £m
As at 24 April 1999 43.9 15.3 111.8 78.7
Retained profit for - - - 4.3
the period
Realised on disposal - - (1.8) 1.8
Amortisation of - 1.2 - (1.2)
goodwill
Currency translation - - - (0.2)
adjustments
-------------------------------------------
As at 6 November 43.9 16.5 110.0 83.4
1999
===========================================
7 EARNINGS PER SHARE
28 weeks to 7
28 weeks to 6 November 1998 52 weeks to 24
November 1999 (as restated) April 1999
-----------------------------------------------------------
Weigh
ted
aver Weight Weigh
age ed ted
num aver aver
ber Earn age Earn age Earn
of ings number ings numbe ings
Earn shar per Earn of per Earn r of per
ings es share ings shares share ings share share
s
£m m p £m m P £m m p
Basic
earning
s per
share
(eps)
Earning 8.5 594.9 1.43 (24.5) 594.9 (4.12) (24.8) 594.9 (4.17)
s per
ordinar
y
shares
Effect - 0.4 - - - - - - -
of
dilutiv
e share
options
------------------------------------------------------------
Diluted 8.5 595.3 1.43 (24.5) 594.9 (4.12) (24.8 594.9) (4.17)
earning
s per
share
------------------------------------------------------------
eps
before
excep
tional
items
Basic 8.5 594.9 1.43 (24.5) 594.9 (4.12) (24.8) 594.9 (4.17)
earn
ings
per
share
Excep - - - 29.2 - 4.91 37.2 - 6.25
tional
items
net
of
tax
-------------------------------------------------------------
Basic 8.5 594.9 1.43 4.7 594.9 0.79 12.4 594.9 2.08
eps
pre
excep
tional
items
Dilut 8.5 594.9 1.43 (24.5) 594.9 (4.12) (24.8) 594.9 (4.17)
ed
earn
ings
per
share
Excep - 0.4 - 29.2 - 4.91 37.2 - 6.25
tional
items
net
of
tax
-------------------------------------------------------------
Dilut 8.5 595.3 1.43 4.7 594.9 0.79 12.4 594.9 2.08
ed
eps
pre
excep
tional
items
-------------------------------------------------------------
NOTES TO THE FINANCIAL STATEMENTS
-------------------------------------------------------------------
8 CASH FLOW STATEMENT
Reconciliation of operating profit/(loss) to operating cash flows:-
28 weeks to 28 weeks to 52 weeks to
6 November 7 November 24 April
1999 1998 1999
£m £m £m
Operating profit/(loss) 18.0 (14.3) (8.4)
Depreciation charge 18.1 21.4 44.8
(Increase)/decrease in (2.2) 3.7 15.4
stocks
Decrease/(Increase) in 25.8 (8.3) (30.0)
debtors
(Decrease)/increase in (13.0) 35.6 37.5
creditors and provisions
---------- --------- ----------
Net cash inflow from 46.7 38.1 59.3
operating activities
========= ========= ==========
9 ANALYSIS OF CASH FLOWS FOR HEADINGS NETTED IN THE CASH FLOW
STATEMENT
28 weeks to 28 weeks to 52 weeks to
6 November 7 November 24 April
1999 1998 1999
£m £m £m
Returns on investments and
servicing of finance
Interest received 0.8 1.0 2.2
Interest paid (7.4) (6.3) (11.2)
---------- ---------- ----------
Outflow on investments and (6.6) (5.3) (9.0)
servicing of finance
========== ========== ==========
Capital expenditure and
financial investment
Payments to acquire fixed - (7.2) (7.2)
assets investments
Payments to acquire tangible (11.9) (34.6) (48.4)
fixed assets
Receipts from sales of 25.1 1.7 6.1
tangible fixed assets
---------- ---------- ----------
Inflow/(outflow) for capital 13.2 (40.1) (49.5)
expenditure and financial
investment
========== ========== ==========
Cash inflow from liquid - - -
resources
========== ========== ==========
Financing
(Decrease)/increase in bank (53.0) 17.3 54.8
finance
Capital element of finance - 0.1 (0.1)
lease rental payments
---------- ---------- ----------
Outflow /(inflow) for (53.0) 17.4 54.7
financing
Issue of ordinary share - - -
capital
---------- ---------- ----------
Financing (53.0) 17.4 54.7
========== ========== ==========
NOTES TO THE FINANCIAL STATEMENTS
-------------------------------------------------------------------
10 ANALYSIS OF NET DEBT
Cash
at Curren Revol Short Fi
bank t ving term Net nance Total
asset
and Invest credit loans Bor leases Net
in ments fa Row debt
hand cility ings
£m £m £m £m £m £m £m
As at 25 37.6 0.6 (90.0) (22.0) (73.8) (0.8) (74.6)
April 1998
Cash flow (7.8) - (20.0) 2.7 (25.1) (0.1) (25.2)
Exchange 0.6 - - - 0.6 - 0.6
movement
----------------------------------------------------
-
As at 7 30.4 0.6 (110.0) (19.3) (98.3) (0.9) (99.2)
November
1998
Cash flow 23.0 - (40.0) 2.5 (14.5) 0.1 (14.4)
Exchange (0.5) - - - (0.5) 0.1 (0.4)
movement
----------------------------------------------------
-
As at 24 52.9 0.6 (150.0) (16.8) (113.3) (0.7) (114.0)
April 1999
Cash flow 0.3 - 50.0 3.0 53.3 - 53.3
Exchange (0.2) - - - (0.2) - (0.2)
movement
----------------------------------------------------
-
As at 6 53.0 0.6 (100.0) (13.8) (60.2) (0.7) (60.9)
November
1999
====================================================
11 PRIOR PERIOD ADJUSTMENT
During the period ended 24 April 1999 the sales recognition policy
of MFI Furniture Centres Limited was changed from recognising sales
on an order basis to a despatch basis. This change in accounting
policy has necessitated adjustments to stock, debtors and creditors.
Prior to the adoption of this accounting policy MFI Furniture
Centres Limited recognised sales, in full, together with the retail
element of the profit at the time that the customer placed the order
and paid the deposit, subject to provisions. Now sales are
recognised when goods are despatched. As a result of this change in
accounting policy, prior period figures have been restated.
The effects of this change in accounting policy on revenue
recognition are shown below :-
28 weeks to 52 weeks to
7 November 24 April
1998 1999
£m
Decrease in operating profit (0.6) -
Taxation - (5.3)*
--------------------------
Loss for the financial period (0.6) (5.3)
--------------------------
Stocks 8.0 6.1
Debtors due within one year (35.4) (34.4)
Creditors falling due within one 13.0 9.1
year
--------------------------
(14.4) (19.2)
Provisions for liabilities and - -
charges
--------------------------
Reduction in net assets (14.4) (19.2)
--------------------------
* Release of deferred tax asset.
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