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Creightons PLC (CRL)

  Print          Annual reports

Wednesday 22 November, 2017

Creightons PLC

Half-year Report

RNS Number : 1435X
Creightons PLC
22 November 2017
 

 

 

For Immediate Release                                                                                  22 November 2017

 

Creightons plc Group

(the "Group" or "Creightons")

 

Unaudited interim financial report

for the six months ended 30 September 2017

 

 

Financial highlights

 

 

·      Revenue increased by 7% £16.7m. (2016: £15.6m).

 

·      Operating profit margin of 5.8% (2016 5.1%).

 

·      Profit before tax increased by 21% to £956,000 (2016: £790,000).

 

·      Diluted EPS 1.09p (2016: 1.00p)

 

·      ROCE 10.7% (2016: 9.5%)

 

·      Paid final dividend of 0.23p per ordinary share in August 2017 (2016: No dividend).

 

·      Interim dividend of 0.15p per ordinary share to be paid in December 2017

 

 

Chairman's statement

 

The Group has continued to make progress in the first half of the year and the impact of the continuing growth can be seen in the results for the period ending 30 September 2017.

 

Sales

Group Sales were £16,734,000 for the six months ended 30 September 2017 (2016: £15,600,000) an increase of 7.3%.  This has been achieved in conjunction with an order intake during the period which is 13.5% up on the same period last year.  Sales have increased for the period through growth with key existing customers and by bringing on new customers.  Sales of our branded products for the first 6 months have exceeded group growth at 12% through existing customers, new export markets and ongoing development of licenced brands. During the period we have focused on winning and extending business with key UK retailers which are growing their personal care and beauty market share as well as a realignment of key contract accounts based on margin performance.

 

Margin and overheads

Our gross margin was 42.1% in the six months to 30 September 2017 (2016: 41.0%). We have continued to benefit from the economies of scale generated by the sales growth in the year to March 2017 and on supplier base consolidation. We intend to focus efforts to improve our margins through targeted investment in plant and machinery which will increase production capacity and improve unit cost of manufacture. This will be key to our success especially in the current economic climate as we continue to see the trend of consumers in the UK focussing on value.

We will continue to manage our overhead cost base and working capital requirements to ensure they are aligned with the anticipated sales levels of the Group, whilst retaining the skills necessary to meet growth opportunities as they arise.

 

Profit before tax

Profit before tax was £956,000 (2016: £790,000), which represents an increase of 21.0%. The increased sales together with the tight control on costs results in an operating profit margin of 5.8% (2016: 5.1%).

 

Tax

It should be noted that the Group utilised all of its historic tax losses in the financial year to 31 March 2017 and therefore we have provided a tax charge within these results of £232,000 (2016: £119,000 - reduced rate due to utilization of historic losses).

 

Earnings per share

I am pleased to report that the impact of the above is a diluted earnings per share of 1.09p (2016: 1.00p) an increase of 9%.

 

Dividend Payments

The Board is pleased to announce that it will be paying an interim dividend of 0.15 pence per ordinary share, reflecting the continued strong performance the group has shown in the first half. I anticipate that this will be paid before Christmas. This is in addition to the dividend of 0.23 pence per ordinary share we paid in August 2017, the charge for which is shown in the accounts to 30 September 2017. The total payment in relation to the dividend paid in August was £139,000 (2016: £0).

 

Working capital and loans

Net cash on hand (cash and cash equivalents less short term borrowings and loans) is a net borrowing of £246,000 (2016: £43,000). The main reason for the decrease in net cash on hand is the higher working capital requirement to support the sales growth during the period. 

 

 

The Board and I believe that this half year's sales of £16,734,000 and profit after tax of £724,000 continues to place the Group in a good position to take advantage of any opportunities that may arise.

 

I would like to take this opportunity to thank each and every one of the Group's employees for the hard work and effort they have put in over what has been a challenging period. I would also like to thank our customers, shareholders and suppliers for their support and loyalty to the Group.

 

 

 

W O McIlroy

Executive Chairman                                                                                                                     21 November 2017

 

 

 

 

Responsibility statement

 

The names and functions of the Directors of the Company are as follows:

 

William O McIlroy            Executive Chairman

Bernard Johnson             Executive Managing Director

Mary T Carney                Non-executive Director

Nicholas O'Shea              Non-executive Director

William Glencross            Non-executive Director

Martin Stevens                Deputy Managing Director

Pippa Clark                    Group Sales and Marketing Director

Paul Forster                    Group Finance and Commercial Director

 

 

The Board confirms that to the best of its knowledge the condensed set of financial statements gives a true and fair view of the assets and liabilities, financial position and profit of the Group and has been prepared in accordance with IAS 34 'Interim Financial Reporting', as adopted by the European Union and that the interim management report includes a fair review of the information required by the Disclosure and Transparency Rules as issued by the Financial Conduct Authority, namely:

·      DTR 4.2.7:  An indication of important events that have occurred during the first six months of the financial year, and their impact on the condensed set of financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year.

·    DTR 4.2.8:  Details of related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the enterprise during that period. Together with any changes in the related parties transactions described in the last annual report that could have a material effect on the enterprise in the first six months of the current financial year.

By order of the Board

 

 

 

Nicholas O'Shea

Company Secretary and Director                                                                                       21 November 2017

 

 

 

Principal risks and uncertainties

 

Risks

 

The Board regularly monitors exposure to key risks, such as those related to production efficiencies, cash position and competitive position relating to sales. It has also taken account of the economic situation over the past 12 months, and the impact that has had on costs and consumer purchases.

 

It also monitors those risks not directly or specifically financial, but capable of having a major impact on the business's financial performance if there is any failure, such as product contamination and manufacture outside specification, maintenance of satisfactory levels of customer and consumer service, accident ratios, failure to meet environmental protection standards or any of the areas of regulation mentioned above.

 

Capital structure, cash flow and liquidity

 

The business is funded using retained earnings and invoice discounting, with a bank facility secured against its assets.

 

 

 

Consolidated income statement - unaudited

 

 



Six months ended

30 September (Unaudited)

 

Year ended

31 March  (Audited)



2017

2016

2017


Note

£000

£000

£000

 





Revenue


16,734

15,600

30,586

Cost of sales


(9,691)

(9,201)

(17,598)






Gross profit


7,043

6,399

12,988






Distribution costs


(626)

(605)

(1,280)

Administrative expenses


(5,452)

(4,995)

(10,195)






Operating profit


965

799

1,513











Finance costs


(9)

(9)

(24)






Profit before tax


956

790

1,489






Taxation

3

(232)

(119)

(238)






Profit for the period from continuing operations attributable to the equity shareholders of the parent company


724

671

1,251

 

 

Dividend


Six months ended 30 September  (Unaudited)

Six months ended 30 September (Unaudited)

Year ended

31 March  (Audited)



2017

2016

2017






Dividend Paid in period (£'000)


139

-

-

Paid in period (pence per share)


0.23

-

-

 

 

Earnings per share

 

 


Six months ended 30 September (Unaudited)

Year ended 31 March (Audited)

 

Note

2017

2016

2017

Basic

2

1.20p

1.12p

2.09p

Diluted

2

1.09p

1.00p

1.88p

 

 

 

 

Consolidated statement of comprehensive income - Unaudited

 



Six months ended 30 September (Unaudited)

Year ended 31 March (Audited)



2017

2016

2017



£000

£000

£000

 





Profit for the year


724

671

1,251

 





Exchange differences on translating of foreign operations


-

-

3

Exercise of derivatives


30

-

26






Total comprehensive income for the period attributable to the equity holders of the company


754

671

1,280

 

 

 

Consolidated balance sheet - unaudited

 

 



30 September

31 March



2017

(Unaudited)

2016 (Unaudited)

2017 (Audited)



£000

£000

£000

Non-current assets





Goodwill


331

331

331

Other intangible assets


320

180

212

Property, plant and equipment


1,767

1,582

1,637



2,418

2,093

2,180

Current assets





Inventories


5,736

4,554

4,024

Trade and other receivables


7,901

6,373

4,861

Cash and cash equivalents


213

1,001

2,631

Derivative financial instruments


56

14

19








13,906

11,942

11,535






Total assets


16,324

14,035

13,715






Current liabilities





Trade and other payables


6,618

5,097

4,564

Short term borrowings


459

455

68

Bank loan - under 12 months


-

132

116

Derivative financial instruments


-

40

56



7,077

5,724

4,804

Net current assets


6,829

6,218

6,731






Non-current liabilities





Deferred tax liability


66

-

26

Bank loan


-

457

418



66

457

444






Total liabilities


7,143

6,181

5,248






Net assets


9,181

7,854

8,467






Equity





Share capital


606

599

606

Share premium account


1,260

1,249

1,259

Other reserves


25

25

25

Translation reserve


(9)

(12)

(9)

Cash flow hedge reserve


56

(26)

(37)

Retained earnings


7,243

6,019

6,623

Total equity attributable to the equity shareholders


9,181

7,854

8,467

 

 

Statement of changes in shareholders' equity - unaudited

 

 


Share capital

 

Share premium account

Other reserves

Translation reserve

Cash flow hedge reserve

Retained earnings

Total


£000

£000

£000

£000

£000

£000

£000









Balance at 1 April 2016

599

1,249

25

(12)

(26)

5,307

7,142

Profit for six months ended 30 September 2016

-

-

-

-

-

671

671

Share based payments

-

-

-

-

-

41

41

Exercise of derivatives

-

-

-

-

26

-

26

Charge in relation to derivative financial instruments

-

-

-

-

(26)

-

(26)

Balance at 30 September 2016

599

1,249

25

(12)

(26)

6,019

7,854

 

Profit for six months ended 31 March 2017

-

-

-

-

-

580

580

Share based payments

-

-

-

-

-

49

49

Exchange differences on translation of foreign operations




3

-

-

3

Exercise of options

7

10

-

-

-

-

17

Charge in relation to derivative financial instruments

-

-

-


(11)

-

(11)

Deferred tax through Equity






(25)

(25)

Balance at 31 March 2017

606

1,259

25

(9)

(37)

6,623

8,467

Profit for six months ended 30 September 2017

-

-

-

-

-

724

724

Payment of dividend

-

-

-

-

-

(139)

(139)

Share based payments

-

-

-

-

-

35

35

Exercise of options

-

1

-

-

-

-

1

Exercise of derivatives

-

-

-

-

30

-

30

Charge in relation to derivative financial instruments

-

-

-

-

63

-

63

Balance at 30 September 2017

606

1,260

25

(9)

56

7,243

9,181

 

 

 

 

Consolidated cash flow statement - unaudited

 


Note

Six months ended 30 September (Unaudited)

Year ended

31 March (Audited)



2017

2016

2017



£000

£000

£000

 





Net cash (outflow) / inflow from operating activities

4

(1,532)

(403)

2,058






Cash flow from investing activities





Purchase of property, plant and equipment


(296)

(350)

(551)

Expenditure on intangible assets


(309)

(98)

(306)






Net cash (used in) investing activities


(605)

(448)

(857)






Cash flow from financing activities





Repayment of finance lease obligations


-

(7)

(7)

Proceeds on issue of shares


1

-

17

Payment of dividend


(139)

-

-

(Repayment) / increase of bank loans and invoice finance facilities


(143)

1,044

602

Net cash (used in) / generated from financing activities


(281)

1,037

612






Net (decrease) / increase in cash and cash equivalents


(2,418)

186

1,813






Cash and cash equivalents at start of period


2,631

814

814






Effect of foreign exchange rate changes


-

1

4






Cash and cash equivalents at end of period


213

1,001

2,631

 

 

Notes to the unaudited interim financial report

 

1.   Basis of preparation

 

The interim financial statements for the six months ended 30 September 2016 and 30 September 2017 and for the twelve months ended 31 March 2017 do not constitute statutory accounts for the purposes of Section 434 of the Companies Act 2006. The Annual Report and Financial Statements for the year ended 31 March 2017 have been filed with the Registrar of Companies. The Independent Auditors' Report on the Annual Report and Financial Statements for the year ended 31 March 2017 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under sections 498(2) or 498(3) of the Companies Act 2006. The 30 September 2017 statements were approved by the Board of Directors on 21 November 2017. This unaudited interim report has not been audited or reviewed by auditors pursuant to the Financial Reporting Council guidance on Review of Interim Financial Information.

 

The condensed financial statements in this Interim Report have been prepared in accordance with the requirements of IAS 34 'Interim Financial Reporting' as adopted by the European Union.

 

As required by the Disclosure and Transparency Rules of the UK's Financial Conduct Authority, the condensed set of financial statements has been prepared by applying the accounting policies and presentation that were applied in the preparation on the Company's published consolidated financial statements for the year ended 31 March 2017, which were prepared in accordance with International Financial Reporting Standards as adopted by the European Union.

 

The condensed interim financial statements for the six months ended 30 September 2017 and the comparative figures for the six months ended 30 September 2016 are unaudited. The figures for the year ended 31 March 2017 have been extracted from the Annual Report on which the Auditors issued an unqualified audit report and which have been filed with the Registrar of Companies.

 

2.   Earnings per share

 

The calculation of the basic and diluted earnings per share is based on the following data:

 



Six months ended

30 September (Unaudited)

Year ended

31 March (Audited)



2017

2016

2017



£000

£000

£000

Earnings





Net profit attributable to the equity holders of the parent company


724

671

1,251

 



Six months ended

30 September (Unaudited)

Year ended

31 March (Audited)



2017

2016

2017



Number

Number

Number

Number of shares





Weighted average number of ordinary shares for the purposes of basic earnings per share


60,563,551

59,837,243

 59,905,805






Effect of dilutive potential ordinary shares relating to Share options


5,928,689

7,005,000

 6,850,137






Weighted average number of ordinary shares for the purposes of diluted earnings per share


66,492,240

66,842,243

 66,755,942

 

 

3.   Taxation

 



Six months ended

30 September (Unaudited)

Year ended

31 March (Audited)



2017

2016

2017



£000

£000

£000

 





Current tax


192

119

237

Deferred tax


40

-

1






Total


232

119

238

 

 

The charge for the period can be reconciled to the profit per the income statement as follows:

 

 



Six months ended

30 September (Unaudited)

Year ended

31 March (Audited)



2017

2016

2017



£000

£000

£000

 





Profit before taxation


956

790

1,489

 





Tax charge at the UK corporation tax rate of 19% (2016 - 20%)


(182)

(158)

(298)

Tax effect of expenses that are not deductible in determining taxable profit


(7)

-

(1)

Deferred tax charge on temporary differences


(1)

-

(1)

Deferred tax credited directly to retained earnings


-

-

25

Adjustment in respect of prior periods


(56)

-

-

Tax effect of utilisation of brought forward tax losses


-

54

54

Adjust closing deferred tax to average rate


(12)

-

5

Adjust opening deferred tax to average rate


(3)

-

1

Deferred tax not recognised


-

-

9

Other differences


29

(15)

(32)

Total expense and effective rate for the year


(232)

(119)

(238)

 

 

4.   Notes to cash flow statement

 



Six months ended

30 September (Unaudited)

Year ended 31 March (Audited)



2017

2016

2017










£000






Profit from operations


733

680

1,275






Adjustments for:





Depreciation on property, plant and equipment


166

142

288

Amortisation of intangible assets


201

157

333

Share based payment charge


35

41

90








1,135

1,020

1,986






Increase in inventories


(1,712)

(640)

(112)

Increase in trade and other receivables


(3,040)

(2,324)

(813)

Increase in trade and other payables


2,054

1,551

1,021

Increase in deferred tax provision


40

-

26

Movement in non-cash derivatives


-

-

(26)






Cash (utilised in) / generated from operations


(1,523)

(393)

2,082






Interest (paid)


(9)

(8)

(24)






Net cash (outflow) / inflow from operating activities


(1,532)

(401)

2,058

 

 

 

5.    Related party transactions

 

The related party transactions that occurred in the six months ended 30 September 2017 are not materially different in size or nature to those reported in the Company's Annual Report for the year ended 31 March 2017.

 

6.    Availability of Interim Report

 

The Interim Report is being made available to shareholders on the company website www.creightonsplc.com. Further copies can be obtained from the Company's Registered Office, 1210 Lincoln Road, Peterborough, PE4 6ND.

 

 

 

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014

 

 

For more information:

 

Nicholas O'Shea, Director, Creightons plc                    01733 281000

 

Roland Cornish, Beaumont Cornish Limited                 0207 628 3396

 

 

 


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