Information  X 
Enter a valid email address

Flying Flowers Ld (FBDU)

  Print      Mail a friend

Tuesday 28 March, 2000

Flying Flowers Ld

Final Results

Flying Flowers Ld
28 March 2000

                     Flying Flowers Limited
   Preliminary Results for the 52 weeks ended 31 December 1999
        Announcement of plans to demerge Stanley Gibbons

Flying Flowers Limited, the mail order and database marketing
company, today announces its preliminary results and unveils
plans to demerge Stanley Gibbons from its volume mail order

                                       52 weeks ended    52 weeks
                                          31 December       ended
                                                 1999   1 January
Turnover                                       49,632      52,061
Profit before exceptional items,  loss          5,101       5,068
on  sale of subsidiaries  and goodwill
Adjusted earnings per share                    15.43p      16.54p
Dividend per share                              7.35p       7.35p

* Completion of £13m Capital Expenditure programme, providing
  an excellent growth platform for the Volume Mail Order business.
* Plans to demerge Stanley Gibbons from the Volume Mail Order
  business to enhance shareholder value.
* Proposed  change  of  name from Flying  Flowers  to  Flying
  Brands, to better reflect the Company's activities.

Commenting on current trading Robert Norbury, Chairman, said:

'The  Spring  2000 selling season for Gardening  Direct  is  over
three quarters complete and the database orders are 11% ahead  of
the  orders  received at the equivalent date in 1999.  Production
has  been  better  controlled than in previous years  and  it  is
expected that we will have sufficient stock to meet demand,  with
any  surplus being within budgeted levels.  New propositions  and
routes  to  market  have been tested in recruitment  advertising,
resulting in a number of roll out opportunities for Spring 2001.

'Flying  Flowers database sales in the first quarter of 2000  are
2% below 1999, on a seasonally adjusted basis, a reduction in the
decline   seen   in  the  last  quarter  of  1999.    Recruitment
advertising  has  been  increased  over  Mothers'  Day  1999  and
responses are in line with expectations.  Orders via the internet
are likely to provide approximately 1.5% of Mothers' Day Sales.'

For further information, please contact:
Flying   Flowers   Limited                      c/o Grandfield
Robert Norbury

Grandfield                                     0171 417 4170
Clare Abbot

Chairman's Statement

1999  was  always going to be a difficult year of transition  for
the   new  Board.   We  needed  to  complete  a  massive  capital
expenditure programme costing £13 million over 1998 and 1999.  We
needed  to focus on the strengthening of the management  and  the
systems.   We  needed  to  unwind  what,  in  hindsight,  was  an
injudicious  expansion  programme and during  the  year  we  sold
Blooms  of  Bressingham and Clarke and Spears.  The new  economic
environment also had its effect, most notably at Stanley  Gibbons
where the patterns of trading are rapidly changing.  In the event
the Group produced operating profits before exceptional items and
goodwill  amortisation of £5.1m marginally ahead of the  previous
year's  £5.068  million.  The Board has decided to  maintain  the
final  dividend at 4.90p per share to give a maintained  dividend
of 7.35p for the year.


After a detailed review of our previous acquisition and expansion
programme  and  the exciting prospects for E-commerce  throughout
the Group, we have decided that shareholder value is best created
by demerging the Stanley Gibbons Group from the volume mail order
businesses of Flying Flowers, Gardening Direct, Benham  and  Urch
Harris.  We will be presenting to shareholders our detailed plans
for  the  demerger  as soon as practicable.   The  demerger  will
provide  a  new  focus and purpose to the two separate  entities.
The  volume  mail order business will change its name  to  Flying
Brands  Limited  reflecting more accurately  the  nature  of  the
underlying  businesses.  Tim Dunningham will be Chief  Executive,
David  Gilroy, Operations Director responsible for Flying Flowers
and  Gardening  Direct brands, David Harbord,  Finance  Director,
Tony  Grodecki, Specialist Sales Director responsible for  Benham
and  Urch  Harris brands, David Nightingale, E-commerce  and  New
Business Development Director and Paul Fraser, Director reporting
to  the  Chief  Executive for special  projects.    We  are  also
delighted that Alan Fryer, Michael de Kare-Silver and David Payne
are agreeing to stay on as Non-Executive Directors.

I  shall remain as Chairman of Flying Brands, but will hand  over
to Paul Fraser the Chairmanship of the new demerged company which
will  be named  This company will include Stanley
Gibbons,  Frasers  and  Collector Cafe  which  is  a  collectable
community  web  site.   Tony  McQuillan,  who  was  the  managing
director  of Stanley Gibbons prior to its acquisition  by  Flying
Flowers, will be the new Chief Executive.  A new Finance Director
and other Executive and Non-Executive Directors will be announced
at the planned launch of this new Company on the AIM Market.


Inevitably  the completion of the £13 million capital expenditure
programme  over the last two years was going to strain  not  only
our   cash   availability  but  also  our  management  resources.
However,  we  completed  the  call  centre  and  new  Information
Technology  systems  at Kelvedon Park, costing  £8  million,  the
Meadow  Springs  Jersey  new glasshouse  and  growing  facilities
costing  £3  million  with a further £1 million  spent  on  other
enhancements in Jersey at the Retreat Farm site.  These new state
of  the art facilities provide us with an excellent platform  for
growth.   We  also  invested  £1  million  replacing  Information
Technology systems throughout the rest of the Group.

Goodwill Write-off and Loss on Sale of Subsidiaries

In  accordance with accounting standards the Board carried out an
impairment  review  of  the value of the  investment  in  Stanley
Gibbons.  The £7.7 million write down reflects this review of the
original  investment but it excludes any value for  the  creation
and  development of Collector Cafe, referred to above, which will
be launched in May this year.

At  the  interim  we  reported the loss  on  sale  of  Blooms  of
Bressingham  and Clarke & Spears, the operating review  describes
the loss of £4.6 million under retail.

The Future

The  demerger  will provide us with a great opportunity  to  take
advantage   of   the   changing   economic   environment.     The
reorganisation of Flying Brands Limited under Tim  Dunningham  as
its  sole Chief Executive will enable senior management to  focus
on  developing the Volume Mail Order brands fully exploiting  the
new facilities in which we have invested.

The   opportunities  for  are  also  tremendously
exciting  with  a  new chief executive and with  Paul  Fraser  as
Chairman  putting  together  a management  team  that  can  drive
forward the company's e-commerce strategy.

Robert Norbury
28 March 2000

The final dividend of 4.9p will be paid on 17 May 2000 to those
shareholders on the register on the 14 April 2000.

Copies of the Annual Report will be posted to shareholders 
in the week commencing 4 April 2000, when copies will also 
be available from the Group's registered office, Retreat Farm, 
St Lawrence, Jersey JE3 1GX.

For the 52 weeks ended 31 December 1999

                            1999       1999   1998     1998
                                     Profit          Profit
                           Sales     before  Sales   before
                                       tax,            tax,
                                exceptional     exceptional
                                      items           items
                                        and             and
                                   goodwill        goodwill
                           £'000      £'000  £'000    £'000
Mail Order                                                 
Flying Flowers            13,816      3,089 15,566    3,141
Gardening Direct          12,816      1,055 13,704      561
                          _______     ______ ______  ______
                          26,632      4,144 29,270    3,702
Stanley Gibbons            8,433        144  4,908      508
(including Frasers)                                   
Benham                     4,011        462  4,506      837
Urch Harris                  940         89    677       65
                         _______     ______ ______   ______
                          13,384       695  10,091    1,410
Bellbourne                 9,369       376   9,580     375
Blooms                       247      (114)  3,120    (419)
                         _______     ______ ______   ______
                           9,616       262  12,700     (44)
                         _______     ______ ______   ______
                          49,632     5,101  52,061    5,068 
                         _______     ______ ______   ______

Reconciliation of Operating Review with Consolidated  Profit  and
Loss Account

                                        £'000       £'000
Profit  before  exceptional  items                    
and goodwill amortisation               5,101       5,068
Amortisation of goodwill                 (434)       (239)
Profit on sale of properties                          
                                           85           -
Group restructuring                      (275)       (580)
Impairment of goodwill                 (7,734)          -
Loss  on sale of subsidiaries  and     (4,574)          -
                                      ________   ________
Profit   on   ordinary  activities     (7,831)     4,249  
before taxation                                     
                                      ________    ________
Mail Order

Mail  order profits rose by 12% in 1999 due to a greatly improved
performance by Gardening Direct.  Total sales were down 9% mainly
due  to  reduced  advertising spend to reduce  risk  after  large
reductions in response rates in 1998.

Flying   Flowers  UK  database  sales  were  4%  below  1998   at
£10,820,000 made up entirely of a volume fall.  This fall came in
the  last quarter and was due to a number of factors and  project
teams have been set up specifically to address these issues.  The
balance  of  the  decline in sales is as a result  of  a  planned
reduction  in  recruitment expenditure in order  to  limit  risk.
Recruitment  was still profitable and 159,000 new customers  were
recruited  against  222,000 in 1998.  The review  of  the  Flying
Flowers  service  is  now complete and a number  of  changes  and
enhancements  to  the  service will occur in  2000.   The  Flying
Flowers  website  went live in November 1999  and  1%  of  Flying
Flowers sales are currently being received via the Internet.

Gardening  Direct  database  sales were  72%  ahead  of  1998  at
£7,560,000 due in part to a larger database but mainly  a  result
of  an  enhanced mailing pattern and a wider product  range.   As
with Flying Flowers, recruitment expenditure was cut in order  to
limit  risk  and  253,000  new customers were  recruited  against
378,000  in  1998.   Profits rose significantly  in  spite  of  a
shortage of products in the spring season.


Profits  at  Stanley  Gibbons and Frasers declined  substantially
during  1999 for a number of reasons.  In the first half  of  the
year  the  business suffered from a lack of management focus  and
made  a  loss.  In July 1999 Paul Fraser returned to day  to  day
management  of  the  company and in the  second  half  there  was
significant  improvement  but still below  the  comparative  1998
result.  The second half also saw an improvement in controls  and
business processes, particularly in the areas of stock buying and
debtors,  which  resulted in a significant reduction  in  working
capital.   New IT systems were introduced in the year which  will
enable  greater analysis and exploitation of customer  databases,
providing  a  platform  for growth.  The Group  acquired  Stanley
Gibbons   with   the   intention   of   exploiting   mail   order
opportunities.  Developments over the past eighteen  months  have
led  the  board  to  the conclusion that the  greatest  potential
within Stanley Gibbons is to develop its publishing, auction  and
product expertise via the Internet.

Sales  and profit at Benham fell following the exceptional impact
in  1998  of  sales  of first day covers commemorating  the  late
Princess  of Wales.  During 1999 a significant amount of progress
was  made  in the development of new volume collectable products.
It  is  anticipated that the first of these new  volume  products
will be produced and sold in 2000.  The Urch Harris business  was
successfully transferred from Stanley Gibbons and integrated into
Benham during the year.


We announced on 5 March 1999 the disposal of the remaining Blooms
of  Bressingham business.  In addition the goodwill and  some  of
the assets of Clarke and Spears Limited were sold on 4 June 1999.
A  loss  on  sale  of £4,574,000 was made in disposing  of  these
businesses  which  includes  £4,605,000  of  goodwill  which  had
previously  been written off to reserves.   The Bellbourne  Group
performed  well  in the year in difficult trading conditions  and
matched  the  profit  achieved in 1998 despite  the  disposal  of
Clarke  and Spears Limited.   Blooms incurred losses of  £114,000
before exceptional items in the period before disposal.

Year 2000

The  Group has not suffered any adverse reactions as a result  of
the  Year  2000  date  change.   Core  business  and  accountancy
systems,  with  the  exception of Benham and  Urch  Harris,  were
replaced  in 1999.  The decision to replace systems was  made  as
part  of a strategy to develop the business and consequently  the
directors do not consider the costs attributable to the Year 2000
issue  to  be  separately identifiable from the  overall  systems
replacement project.

Loss  for  the financial year, total recognised gains and  losses
and shareholders' perspective

All   gains  and  losses  in  1999  are  reflected  through   the
Consolidated Profit and Loss Account except a £36,000 loss on the
translation   of   the  profits  and  net  assets   of   overseas
subsidiaries.  Return on Capital employed is not a valid  measure
for  the Group as the main assets are intangible and as such  not
reflected in the Balance Sheet.

Loss for the financial year, dividends and earnings per share

During  the year exceptional costs were incurred in the 2  months
prior  to  disposal of Blooms of Bressingham and at  other  group
companies.   These costs are shown separately in the Consolidated
Profit and Loss Account and an adjusted Earnings Per Share figure
has been calculated.

The  Company's  dividend  policy  is  to  maintain  a  cover   of
approximately three, however due to the cash generative nature of
the  Company's business the 1999 dividend has been maintained  in
spite of the fall in profits.

For 52 weeks ended 31 December 1999

                      Continuing  Acquisitions  Discontinued    Total
                      Operations                  Operations
                           £'000         £'000         £'000    £'000
Turnover                 48,693              -         939     49,632
Cost of                 (30,639)             -        (751)   (31,390)
Sales                    ______         ______       ______   ________
Gross Profit             18,054              -          188    18,242
Net                     (12,932)             -         (312)  (13,244)
operating expenses
                         ______         ______       ______   ________
Profit before            5,122               -         (124)    4,998
exceptional items
Exceptional items       (7,959)              -          (50)   (8,009)
                         ______         ______        ______  ________
Operating               (2,837)              -         (174)  (3,011)
Loss on sale                                   
of subsidiaries              -               -       (4,574)  (4,574)
and businesses
Profit on                   85               -            -       85 
sale of properties
Net interest                                   
payable and               (341)              -            10     (331)
similar charges
                        ______          ______         ______    _____
(Loss)/profit on        (3,093)             -         (4,738)   (7,831)
ordinary activities
after taxation
Taxation                (1,009)             -            (19)   (1,028)
                        ______         ______          ______   ______
(Loss)/profit for the   (4,102)             -         (4,757)   (8,859)
financial year
Dividends               (1,945)             -              -    (1,945)       
                         _____         ______         ______    ______
(loss)/profit           (6,047)             -         (4,757)  (10,804)
for the year
                        ______         ______         ______     _____
Earnings per                                                   (33.55)p
Ordinary Share                              
items                                                           30.33p
Goodwill                                                         1.64p
     Net loss on sale of                                        17.01p
      subsidiaries and property
Adjusted Earnings per                                
Ordinary Share                                                  15.43p
Earnings per                                
Ordinary Share                                                (33.43)p
There is no material difference between the loss on ordinary activities
activities before taxation and the retained loss for the year stated          
above and their historical cost equivalents.                                  

The Group has no material recognised gains and losses other than
those included in the loss above and therefore no separate statement
of total recognised gains and losses has been presented.
                     Continuing   Acquisitions  Discontinued    Total
                     Operations                 Operations         
                          £'000          £'000        £'000     £'000
Turnover                 43,269          5,672        3,120    52,061
Cost of                 (31,214)        (2,405)      (2,047)  (35,666)
                       ________       ________       ______   _______
Gross Profit             12,055          3,267        1,073    16,395
Net                      (7,117)        (2,882)      (1,379)  (11,378)
                        _______        ________      _______  _______
Profit before             4,938            385         (306)    5,017
exceptional items
Exceptional items          (103)           (55)        (422)     (580)
                       ________        ________       ______   _______
Operating                 4,835            330         (728)    4,437
Loss on sale of               -              -            -         -
subsidiaries and
Profit on                     -              -            -         -
sale of properties
Net interest payable        (64)           (11)        (113)     (188)
and similar charges
                        ________       ________      ______      _____
(Loss)/profit on           4,771           319         (814)     4,249
ordinary activities
after taxation
Taxation                    (878)         (108)         161      (825)
                        ________       ________    ________    _______ 
(Loss)/profit for the      3,893           211         (680)    3,424
financial year
Dividends                 (1,942)            -            -    (1,942)
                        ________        ________   ________    ________
Retained (loss)/profit     1,951           211        (680)     1,482
for the year
                        ________        ________   ________    ________
Earnings per                                                    13.70p
Ordinary Share                                           
Exceptional items                                                1.88p
Goodwill                                                         0.96p
  Net loss on sale of                                  
  subsidiaries and                                               0.96p
Adjusted Earnings per                                           16.54p
Ordinary Share                                          
Diluted Earnings per                                            13.38p
Ordinary Share                                          
There is no material difference between the loss on ordinary activities
activities before taxation and the retained loss for the year stated          
above and their historical cost equivalents.

The Group has no material recognised gains and losses other than
those included in the loss above and therefore no separate statement
of total recognised gains and losses has been presented.

For 52 weeks ended 31 December 1999
                                Group                  Company
                            1999       1998        1999     1998
                           £'000      £'000       £'000    £'000
Fixed assets                                                    
Intangible assets            347      7,952          -        -
Tangible assets           19,161     14,283          -        -
Investments                1,181      1,225     36,598    30,783
                       ________    ________   ________   ________
                         20,689     23,460      36,598    30,783
                      ________    ________    ________  ________
Current assets                                                  
Stocks                    7,318      8,679          -        -
- due after more                                           
than one year             1,623      1,674          -        -
- due within one year     3,920      5,887         41        39
Cash at bank and in hand      -        253          -         -
                       ________    _______   ________  ________      
                         12,861     16,493         41        39
Creditors: amounts      (12,610)   (12,915)    (3,571)   (1,890)         
falling due within                   
one year
                       ________    _______   ________  ________
Net current                                            
assets/(liabilities)       251      3,578      (3,530)   (1,851)
                       ________   ________   ________  ________
Total assets less       20,940     27,038      33,068    28,932
current liabilities    
Creditors: amounts                                         
falling due after       (4,701)    (4,715)     (2,300)   (3,400)
more than one year                                    
Provision for                                              
liabilities and         (114)          -           -          -
                     ________    ________    ________  ________
Net assets            16,125       22,323      30,768   25,532
                     ________    ________    ________  ________
Capital and                                                     
share capital            270         269        269        268
Share premium         22,709      22,669     22,709      22,669
Revaluation reserve      486         486          -          -
Capital                  (17)        (17)       670         670
Profit and            (7,323)     (1,084)     7,120       1,925
loss account                     
                      ________   ________    ________  ________
Shareholders' funds    16,125     22,323      30,768   25,532                 
                      ________   ________    ________  ________
The accounts were approved by the Board
of Directors on 27 March 2000
T Dunningham
D C Harbord

For 52 weeks to 31 December 1999
                                             1999      1998
                                            £'000     £'000
Operating activities                                            
Net cash inflow from operating              7,358     4,133  
                                          _______     _______
Returns on investments and                                      
servicing of finance
Interest received                             149        74
Interest paid                                (396)     (230)
Interest element of finance lease             (84)      (32)  
                                          _______     _______
                                             (331)     (188)
                                          _______     _______
Jersey tax paid                            (1,010)     (704)
UK corporation tax paid                      (208)     (291)
Dutch corporation tax paid                    (98)      (56)
                                          _______     _______
                                           (1,316)    (1,051)
                                          _______        _______
Capital expenditure and financial                        
Receipts from sales of own shares             166           169        
held in ESOP                                          
Payments to acquire tangible fixed assets  (5,432)      (6,144)              
Receipts from sales of tangible              382            439
fixed assets
Payments to acquire intangible             (390)             -       
fixed assets                                             
Investment in Flower Farm Direct Inc.      (122)             -
                                           _______        _______

                                          (5,396)        (5,536)
                                          _______        _______
Acquisitions and disposals                               
Purchase of subsidiary                          -         (345) 
Net overdraft acquired with                     -         (285)
Adjustments to purchase                                  
consideration of subsidiaries                  -            115
Receipt of deferred consideration            101             -  
Disposal of subsidiaries and                1,736            -
                                           _______        _______
                                           1,837            (515)
                                           _______        _______
Equity dividends paid                     (1,937)          (1,806)
                                          _______         _______
Inflow/(outflow) before financing            215           (4,963)
                                          _______        _______
Capital element of finance lease            (541)           (423)
Issue of ordinary share capital               41             250             
New bank loan                              1,000           4,000              

Bank loan repayments                        (500)         (1,800)
Other loan repayments                        (28)           (274)
                                           _______        _______
Net cash (outflow)/inflow from               (28)          1,753
                                          _______        _______
Increase/(Decrease) in cash                  187          (3,210)
                                          _______        _______


a d v e r t i s e m e n t