RNS Number:3210P
Regent Inns PLC
03 September 2003
Wednesday 3rd September 2003
PRESS RELEASE
Regent Inns PLC
Preliminary results for the 52 week period ending 5th July 2003
Regent Inns plc ("Regent" or "the Company"), the operator of late-night,
entertainment-led bars, today announces headline results for continuing
operations showing a 28.5% increase in sales and a 25.3% increase in EBITDA.
Following the Company's significant programme to dispose of its unbranded pub
estate, the results for the continuing operations are highlighted separately
below.
The Total Company results include the to be discontinued unbranded pub
operations, the disposal of which Regent is in the process of completing. As
advised last year, the strategic decision to dispose of the Company's unbranded
pub operations and focus entirely on its branded businesses has resulted in
reduced Total Company earnings for the year.
Financial highlights:
Continuing operations
* Turnover up by 28.5% to #110.8m (2002: #86.2m)
* Like for like sales for Walkabout and Bar Risa/Jongleurs brands down
6.7% and 7.6% respectively, as previously indicated
* EBITDA before exceptional items increased by 25.3% to #27.2m
(2002: #21.7m)
* Operating profits before goodwill amortisation and exceptional items up
by 19.4% to #20.0m (2002: #16.7m)
* Return on capital employed for Walkabout and Bar Risa/Jongleurs brands
of 28.5% and 25.3% respectively
* Profit before tax, goodwill amortisation and exceptional items #14.4m
Total Company
* Turnover #114.3m (2002: #124.6m)
* Operating profit before goodwill amortisation and exceptional items
#19.4m (2002: #21.5m)
* Exceptional losses and fundamental reorganisation costs #8.9m
* Earnings per share before goodwill amortisation and exceptional items
10.9p (2002: 12.2p)
* Final dividend maintained at 3.36p, totalling 5.18p (2002: 5.18p)
Corporate progress:
* Eight new Walkabouts opened and one further site converted in the year;
41 in total
* One new Bar Risa/Jongleurs opened and one further site converted in the
year; 15 in total
* Sales at Walkabout and Bar Risa/Jongleurs up 35.3% and 40.5% to #70.5m
and #27.7m respectively
* Average weekly sales of #43,400 and #44,300 achieved for Walkabout and
Bar Risa/Jongleurs respectively
* Combined operating profit margin increase of two percentage points to
45.8% for Walkabout and Bar Risa/Jongleurs brands
* Total disposal proceeds of #34.5m received
Commenting on the results, Peter Savage, Chairman of Regent, said:
"I am pleased to report on a strong financial performance from our branded
operations during the year, despite the most challenging of conditions in our
market place.
The strong trading performances of both the Walkabout and Bar Risa/Jongleurs
brands over the last 12 months not only fully endorse the decision to reposition
Regent as a focused operator of late-night, entertainment-led venues but also
reinforce the premium quality positioning of our brands.
We have continued to resist the temptation of heavy price discounting as we do
not believe that such actions will benefit either our brands or our market
sector in the long-term. We believe that focusing on the quality and
profitability of our brands will ensure that we maintain their differentiation
and long term success."
- Ends -
For further information, please contact:
Regent Inns plc Tel: 020 8375 3000
Stephen Haupt, Chief Executive
Simon Rowe, Finance Director
Merlin Financial Tel: 020 7606 1244
Paul Downes Mob: 07900 244 888
Vanessa Maydon Mob: 07802 961 902
Attached: Chairman's Statement
Chief Executive's Review
Financial Review
Group P&L, Balance Sheet, Cash Flow Statement.
Statement of Reorganised Gains & Losses,
Notes to the Accounts
Chairman's Statement
Review of the year
I am pleased to report on a strong financial performance from our branded
operations during the year, despite the most challenging of conditions in our
market place.
As advised last year, the strategic decision to dispose of the Company's
unbranded pub operations and focus entirely on its branded businesses has
resulted in reduced total Company earnings for the year. Nevertheless the strong
trading performance of both the Walkabout and Bar Risa/Jongleurs brands over the
last 12 months fully endorses the decision to reposition Regent as a focused
operator of late-night, entertainment-led venues.
These results not only support our decision to focus on developing and managing
our branded portfolio, but also reinforce its premium quality positioning. We
have continued to resist the temptation of heavy price discounting as we do not
believe that such actions will benefit either our brands or our market sector in
the long term. Whilst this decision has impacted our like-for-like sales
performance, we believe that focusing on the quality and profitability of our
brands will ensure that we maintain their differentiation and long term success.
The sale of the unbranded pub operations continued during the year. Of the 58
pubs originally identified for disposal, completion has now taken place on 39
sites with total proceeds received of #34.5m which have been used to reduce the
Company's debt. We were disappointed at the appointment of the administrative
receivers in June 2003 to Porter Black Holdings to whom we were in the final
stages of selling 17 pubs for #4.3m. These pubs, which the receivers are
currently managing on a day to day basis on our behalf, are now being
re-marketed along with four further unbranded pubs which had originally been
retained for potential future conversion to branded sites. Initial interest in
these pubs has been encouraging. In June 2003, administrative receivers were
appointed to the Unchained Growth Pub Companies which owed the Company #1.9m.
Results
Sales from continuing operations (ongoing) in the year increased by 28.5% to
#110.8m (2002: #86.2m). Operating profits from continuing operations (ongoing)
before goodwill amortisation and exceptional items increased by 19.4% to #20.0m
(2002: #16.7m). Earnings before interest, tax, depreciation and amortisation
(EBITDA) from continuing operations (ongoing) before exceptional items increased
by 25.3% to #27.2m.
Total Company profit before tax, goodwill amortisation and exceptional items in
the previous year which comprised 53 weeks, was #16.5m. This included operating
profits of #4.8m from the unbranded pub operations that subsequently became
categorised as continuing operations to be discontinued. In the year under
review profit before tax from continuing operations (ongoing), before goodwill
amortisation and exceptional items was #14.4m. Total Company earnings per share
before goodwill amortisation and exceptional items are 10.9p (2002: 12.2p).
Exceptional losses in the year are #8.9m which are analysed in the Financial
review.
Capital expenditure in the year was #42.8m, reflecting in particular the strong
roll out programme for Walkabout and Bar Risa/Jongleurs. Net bank debt increased
by #3.0m to #71.5m, with gearing increasing to 134% (2002: 123%).
Dividend
The Board is recommending an unchanged final dividend of 3.36p to shareholders
which, together with the interim dividend of 1.82p, totals 5.18p for the year.
This will be paid, subject to shareholders' consent, on 12 November 2003 to
those shareholders on the register at 17 October 2003. Once again, we are
pleased to offer a dividend reinvestment plan for shareholders.
Corporate Governance
Whilst changes in requirements in this area have had little impact on the
operation and management of the Company, we have increased the level of detail
in several sections of the Report and Accounts to meet the reporting
requirements of the new Combined Code, some of which take effect from November
this year. We will be putting the Directors' Remuneration Report itself to a
shareholder vote at this year's AGM for the first time.
People
In such a challenging trading environment, I am especially proud of our people
and particularly those who work tirelessly within our venues looking after our
customers. Their positive attitude and resourcefulness is a constant source of
enjoyment and motivation for everyone in the Company. On behalf of the Board I
would like to thank all of our staff for their unfailing contribution.
Current trading and prospects
The testing market conditions evidenced throughout most of last year have
continued into the early weeks of the current financial year as we had
anticipated. However, the Company continues to develop its brands to address
these conditions and they remain amongst the strongest licensed retail brands in
the sector.
In the eight weeks to 30th August 2003 sales growth from continuing operations
was 13.4% despite like-for-like sales for Walkabout and Bar Risa/Jongleurs
remaining negative at 9.0%. Whilst 9.0% is somewhat greater than we had
anticipated, reflecting the impact of the extraordinary hot weather during the
majority of this short period, we believe it to be unrepresentative of our
expectations for the year ahead. We therefore remain confident about the
prospects for the profitable development of the Company for the coming year.
Chief Executive's Review
Strategy
Regent's strategy is based upon the principles of profitable growth and
sustainability. The Company is focused upon the development of high quality
late-licensed venues which will be developed and managed as clearly
differentiated brands. We will continue to invest in both Walkabout and Bar Risa
/Jongleurs, the UK's leading liquor-led brands, in addition to creating further
High Street opportunities.
We will support this strategy by focusing on the development of our staff and
the pursuit of operating efficiencies and cost reductions. Growth will be
organic and through the opening of new venues.
Overview
Challenging market conditions, a weak sporting calendar and yet more
bureaucracy, regulation and associated costs have been the external themes of
the year.
By addressing these challenges in a prompt, robust and responsible fashion, the
Company and its brands have continued to make solid progress both operationally
and financially. Continued profit growth from Walkabout and Bar Risa/Jongleurs
has been achieved through tight control of retail pricing, labour costs and the
supply chain resulting in a combined operating profit margin increase of 2.0
percentage points to 45.8% for these brands. Other key financial measures
including average weekly sales, venue profitability and return on capital
employed have also remained at the top end of sector performance. In addition,
head office costs have been reduced by #1.3m mainly in connection with the
disposal of the unbranded pub estate.
A total of nine new venues were opened in the year comprising eight Walkabouts
and one Bar Risa/Jongleurs, which was significantly down on our original
forecast, due to the more volatile and uncertain market conditions. The initial
success of these new venues, which include important locations such as
Blackpool, Middlesbrough, Bournemouth, Leeds and Plymouth has been encouraging.
We also converted three retained unbranded pubs. One in Wimbledon was converted
into a Walkabout, one in Reading was converted into a Bar Risa/Jongleurs and the
other one in Hertford was converted into our potential third brand, The Stone
House. These venues have exceeded our trading expectations since opening and, in
the case of The Stone House, encourage us to undertake further trials of this
potential brand in the year ahead, including the conversion of another unbranded
pub.
The development of The Stone House into a strong, complementary brand within our
portfolio will also initially enable us to maximise profitable performance from
both present and future Jongleurs venues by providing the opportunity to mix
Jongleurs with either Bar Risa, Walkabout or The Stone House.
The performance of the unbranded pubs retained for potential future conversion
was impacted by the difficult trading conditions and their overall trading was
disappointing. In the year, three pubs from this estate were converted into
branded operations and a further two will be converted in the current year.
Additionally four further pubs are now being marketed for sale as our more
measured approach to capital expenditure would have extended the periods before
their conversion to an unacceptable timescale.
Our property pipeline for new venues will also continue to take a more measured
approach for the current year, with six Walkabouts and two Jongleurs planned to
open. Total capital expenditure is therefore expected to be #30m in the year
ahead.
In a service-led business, the internal development of our management and staff
is of paramount importance. Our "Step Forward" staff training programme
initiated in 2001, is now embedded within the business. 78% of our front line
staff had completed all six basic modules at the year end with 2,500
intermediate modules having been voluntarily taken up by our staff. In addition,
23 Managers in Training have passed the final advanced stages of the programme
over the past two years and have now progressed to become venue managers. This
commitment to our staff and managers continues to underpin our passion to
deliver operational and financial excellence.
The Company-wide initiative to introduce an integrated purchase order system
(IPOS) has continued throughout the year. The system enables venue managers to
place orders electronically with suppliers, receipt the goods/services and then
automatically matches quantities and prices to supplier invoices. The system is
now live in 50% of our venues with full implementation due by December 2003.
Licensing Reform
The new licensing bill has now received Royal Assent and we are already making
preparations for the costly and time-consuming transitional process including
the change from Magistrates to Local Authority control. Even at this stage
however, the full impact of the Bill upon our business and the entire licensed
industry remains unclear and we therefore await the publication of detailed
guidelines with some apprehension.
Whilst we support many of the overall objectives of the Bill, we are dismayed at
the additional bureaucracy involved along with even more costs and barriers to
business growth.
Brand Review
Walkabout
2003 2002
Total sales - #m 70.5 52.1
Average gross weekly sales - #K 43.4 44.6
Like for like sales % (6.7) 10.6
ROCE % 28.5
This year we opened a further nine venues including two in Walkabout's original
heartland of Central London (Shaftesbury Avenue and Temple) where trading has
been particularly pleasing. This brought the total number of Walkabouts at the
year end to 41.
Total sales in the period increased by #18.4m to #70.5m with average gross
weekly sales remaining strong at #43,400. Operating margins improved by 1.0
percentage point with total operating profit before fixed costs increasing by
38.2%. Return on capital employed for the year was 28.5%.
The difficult trading environment coupled with aggressive discounting from many
other High Street operators and a relatively weak sporting calendar, contributed
to a fall in like-for-like sales of 6.7% (2002: +10.6%).
Several new initiatives for building sales in Walkabout were piloted during the
year. These included live music tours by Southern Hemisphere bands, Talkabout @
Walkabout and a Sports Model Search which have complemented ongoing sales
initiatives which focus on key calendar events such as Australia Day. Working in
conjunction with our suppliers to create an awesome occasion, sales on Australia
Day this year were four times those of a normal Sunday in January. Our focus for
the year ahead will be to continue this style of promotional activity and
concentrate on driving sales through creating customer experiences without the
need to introduce value destroying discounting.
Since the start of the current year, we have opened two new venues in Durham and
Edinburgh, with the Edinburgh location being our first totally integrated
Walkabout and Jongleurs venue. Four further venues are planned to open in the
year and we also plan to convert one further unbranded pub along with
re-branding the Bar Risa in Watford into a Walkabout.
New developments continue to benefit from constant re-evaluation of design and
fit-out following consultation with customers, operators, designers and
developers. Changes to lighting, flooring, furniture, infrastructure and general
decor have been introduced, thus ensuring the continual evolution of the brand.
As a result, the more recent Walkabouts including those that have recently been
refurbished, combine a more comfortable and relaxing backdrop to daytime and
early week trading, whilst maintaining the durability and scale for high energy
late night trading later in the week.
As the leading venue for watching sport, Walkabout is well placed to benefit
from the Rugby World Cup this autumn and the Euro 2004 football finals during a
five-week period in June 2004. The success of the respective England sides will
have a major influence on customer interest in these events. On current form,
the prospects are encouraging - at least for rugby!
Bar Risa/Jongleurs
2003 2002
Total sales - #m 27.7 19.7
Average gross weekly sales - #K 44.3 39.2
Like for like sales % (7.7)
ROCE % 25.3
The combined attraction of a High Street bar alongside an exhilarating and
unique Jongleurs comedy club has been a winning formula for over 20 years.
Trading at our three latest openings, Birmingham (which opened in June 2002),
Leeds and Reading has been outstanding.
As a result, total sales for the brand grew by 40.5% to #27.7m with
corresponding average gross weekly sales increasing from #39,200 to #44,300 per
venue per week.
Strong disciplines over Jongleurs show capacity, yields and tariffs were
maintained throughout the year resulting in a 12% year on year reduction in
capacity at like-for-like venues. Although like-for-like sales were down 7.7%
the brand increased its overall operating profit margin by 4.6 percentage points
and achieved a total operating profit increase of 58.6% before fixed costs.
Return on capital employed was 25.3% for the year.
Following the introduction of the Customer Relationship Management System
earlier in the year, a new Jongleurs website and on-line booking facility was
launched during the Spring, embracing many innovative design features. As a
result visitor numbers to the website have doubled and costs per booking have
begun to reduce as customers book on-line in greater numbers.
Our customer database has increased from approximately 100,000 in 2001 to over
300,000 in 2003 following a series of successful data capture initiatives.
Customer feedback scores, a critical weekly measure of both the brands' and the
comedians' performance, have also continued to improve. "Word of mouth"
marketing now generates significant advance ticket sales.
Jongleurs has now become second only to the BBC as the world's largest employer
of stand-up comedy talent. To celebrate this achievement in conjunction with our
first new opening of the current year in Edinburgh, we launched a national
search for new talent under the banner headline "Stand and Deliver". From over
300 entrants the eventual winner performed live at Jongleurs during the
Edinburgh Fringe Festival and was subsequently awarded a 12 month contract to
perform throughout the Jongleurs estate.
In the current year we have already opened a new Jongleurs venue in Edinburgh
and plan to open a further venue, this time combined with The Stone House, later
in the year. This will bring the total number of Jongleurs venues to 17. We also
intend to rebrand three Bar Risa venues as The Stone House in addition to
rebranding the Watford Bar Risa into a Walkabout.
FINANCIAL REVIEW
Results
The results for the year under review report in separate columns the financial
performance of the continuing operations ongoing (continuing operations) and
continuing operations to be discontinued (discontinued operations). The
continuing operations comprise our branded operations; Walkabout and Bar Risa/
Jongleurs, the third brand development venues and 11 unbranded pubs retained for
future conversion to branded operations. The discontinued operations represent
the trading performance of the remaining unbranded pub operations, the disposal
of which was announced in the previous financial year.
Sales from continuing operations have increased by 28.5% to #110.8m, with sales
in Walkabout increasing by 35.2% and Bar Risa/Jongleurs by 40.5%. Operating
profits from continuing operations before goodwill amortisation and exceptional
items increased by 19.4% to #20.0m.
The progress made during the year on the disposal of unbranded pub operations
has significantly reduced the financial scale of the discontinued operations. At
the beginning of the year under review 24 unbranded pubs were in the
discontinued operations, compared with 58 at the beginning of the previous year.
Of the 24, with the exception of one unbranded pub, these pubs became the
subject of exchanged sales contracts during the year. In June 2003, as a result
of Porter Black Holdings Ltd and Unchained Growth Pub Companies entering
insolvency arrangements, 19 unbranded pubs reverted to and remained in
discontinued operations at 5th July 2003. Sales from discontinued operations
were #3.5m (2002: #38.4m) and the operating loss before exceptional items was
#0.6m (2002:profit of #4.8m).
Total Company sales and operating profits before goodwill amortisation and
exceptional items decreased by 8.3% to #114.3m and 10.0% to #19.4m.
A key measure of the cash generative qualities of the Company is earnings before
interest, tax, depreciation and amortisation (EBITDA). EBITDA before exceptional
items from continuing operations increased by 25.3% to #27.2m and the conversion
of sales to EBITDA (on the same basis) reduced slightly to 24.6% (2002: 25.2%).
Total Company EBITDA before exceptional items was #26.8m (2002: #28.6m).
Interest
The net interest charge increased by #0.6m to #5.6m reflecting the increased
level of borrowings resulting from our capital expenditure on new venues offset
by proceeds from the disposal of the unbranded pub operations. Interest
capitalised as part of the new venue development totalled #0.7m (2002: #0.7m).
The net interest charge is covered 3.4 times (2002: 4.3 times) by operating
profits before exceptional items. Fixed charge cover is 1.9 times (2002: 2.1
times) representing the number of times interest plus rent costs is covered by
operating profits before rent.
Taxation
The Company has a cash tax rate payable on profits of 17.0% (2002: 16.0%) which
is significantly below the UK corporation tax rate of 30% due to the accelerated
capital cost allowances received on our investment in new venues.
The effective total tax rate on profits from continuing operations before the
prior period adjustment of #0.5m over provision for tax in prior years is 32.0%
(2002: 33.2%). This rate includes a provision for tax deferred into future years
that may become payable. The provision for future tax liabilities arises
predominantly from capital cost allowances deducted for tax purposes being
significantly greater than the depreciation charge used for accounting purposes.
The total provision for deferred taxation is #14.1m (2002: #11.9m) and as the
Company intends to continue to invest in the roll out of its branded venues,
this provision should increase and is therefore unlikely to become payable in
the foreseeable future.
Exceptional items
Exceptional losses for the year are #8.9m (2002: #17.1m) before the associated
tax credit of #1.7m (2002: #5.5m), which reduces the net loss to #7.2m (2002:
#11.6m). The losses include #1.9m in respect of operating exceptionals, #8.0m of
fundamental reorganisation costs and #1.0m profit on the sale of fixed assets.
The exceptional losses and fundamental reorganisation costs include:
* #1.9m provision against the debt due from the Unchained Growth Pub
Companies which entered administrative receivership in June 2003. The
proceeds from the sale of pubs that were the subject of a first charge as
security for the debt are not anticipated to be in excess of the related
costs of disposals and their net book value.
* A #3.4m loss arising from the reduced anticipated proceeds, net of
related costs, for the pubs that were the subject of a sale and purchase
agreement that did not complete with Porter Black Holdings Ltd.
* A provision for onerous leases of #3.1m has been made in accordance with
FRS 12 - "Provisions, contingent liabilities and contingent assets".
* Losses of #1.5m as a result of the net proceeds last year from the
disposal of our unbranded pub operations being lower than anticipated. The
losses include a #1.0m reduction in the value of pubs that have attracted
limited buyer interest. The previously estimated sales proceeds have been
reduced to nil and provisions made for the anticipated costs of financial
inducements to attract buyers.
The profit on sales of fixed assets include:-
* A #3.1m profit arising from a sale and leaseback transaction that
completed in March 2003.
* Losses on disposal of fixed assets total #2.1m and include a provision
for the anticipated shortfall between net sales proceeds and the net book
value of four pubs originally retained for conversion to our branded
operations.
Shareholder returns
Total Company earnings per share, before goodwill amortisation and exceptional
items reduced by 10.0% to 10.9p (2002: 12.2p).
The earnings per share from continuing operations calculated allocating net
interest payable to continuing operations in both years increased by 32.4% to
11.4p (2002: 8.6p).
The proposed dividend of 5.18p per share is covered 2.1 times by post tax
profits compared with 2.3 times in the prior year. The dividend yield based on
the mid market share price on 5th July 2003 of 68.5p, is 7.6%.
Cash flow
The Company continues to be highly cash generative. Net cash inflow from
operations, before cash exceptional items at #27.7m (2002: #28.6m) which
represents 143% (2002: 133%) of operating profits. Free cash flow (being cash
from operations less payments of interest, tax, dividends and refurbishment of
existing venues and cash exceptional items) was #10.7m (2002: #10.9m),
representing 11.9p per share (2002: 12.1p).
Total proceeds from sale of fixed assets were #24.3m. This includes #16.6m from
the disposal of the unbranded operations, bringing the cumulative total to
#34.5m. These funds were used initially to reduce debt before being reinvested
in the brand roll out programme.
Capital Expenditure
As a result of the more measured approach to new openings, capital expenditure
reduced to #42.8m from #48.9m in the prior year. Capital expenditure on new
branded venues and conversions was #36.6m, which includes #5.0m on venues due to
open in the current financial year. The Company continues to maintain the venues
to the highest standards reinvesting #5.1m in the refurbishment of existing
venues, representing 4.4% of sales (2002: 4.7%). The reinvestment programme
included a #1.0m refurbishment of Walkabout Nottingham, which since re-opening
has generated a return on the investment greater than the Company's hurdle rate
of 28%.
In the year, the Company increased the percentage of capital expenditure funded
from free cash flow to 25.0% compared to 22.3% in the prior year. Capital
expenditure funded from disposal proceeds was 56.7% (2002: 36.5%)
Funding
Net debt increased in the year by #3.0m to #81.0m, which includes #7.0m of
convertible loan notes. Net bank gearing at the balance sheet date was 134%
(2002: 123%). Net bank gearing before full provision for deferred tax would be
106% (2002: 101%).
The Company has #39.9m of unutilised committed bank facilities at the balance
sheet date.
Treasury policy
The Company's treasury policy is to ensure the availability of funds to meet its
future requirements and minimise exposure to fluctuations in interest rates. The
Board monitors and approves treasury policy.
To manage the Company's exposure to fluctuations in interest rates, the majority
of the borrowings are hedged using interest rate swaps. At the balance sheet
date the Company had negotiated interest rate swaps agreements for #70m of its
debt, covering a three year period at an average rate of interest of 6.16%. 98%
of net bank debt is now the subject of fixed rate swaps.
The Company maintains business and cash flow models that forecast cash
requirements in the short, medium and long term. These forecasts are reviewed
regularly by the Board.
CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the 52 weeks ended 5 July 2003
Continuing 52 weeks 53 weeks
Continuing operations ended ended
operations to be 5 July 2003 6 July 2002
ongoing discontinued Total Total
(note 6)
Note #'000 #'000 #'000 #'000
Turnover 110,757 3,505 114,262 124,642
--------- --------- --------- ---------
Net operating costs 5 (91,186) (4,145) (95,331) (103,566)
Net operating costs exceptional 5 - (1,912) (1,912) (890)
--------- --------- --------- ---------
(91,186) (6,057) (97,243) (104,456)
--------- --------- --------- ---------
Operating profit 19,571 (2,552) 17,019 20,186
Profit on sales of fixed assets 1,001 - 1,001 -
Fundamental reorganisation - (7,958) (7,958) (16,224)
--------- ---------- --------- ---------
20,572 (10,510) 10,062 3,962
Net interest payable (5,642) - (5,642) (5,047)
--------- ---------- --------- ---------
Profit/(loss) on ordinary
activities before taxation 14,930 (10,510) 4,420 (1,085)
Taxation 3 (4,045) 1,847 (2,198) 63
--------- ---------- --------- ---------
Profit/(loss) on ordinary
activities after taxation 10,885 (8,663) 2,222 (1,022)
Dividends 4 (4,695) - (4,695) (4,692)
--------- ---------- --------- ---------
Retained profit/(loss)
for the period 6,190 (8,663) (2,473) (5,714)
--------- ---------- --------- ---------
Earnings per share before
goodwill amortisation and
exceptional items
- basic 2 10.9p 12.2p
- diluted 2 10.8p 11.8p
Earnings per share
- basic 2 2.5p (1.1)p
- diluted 2 2.4p (1.1)p
CONSOLIDATED BALANCE SHEET
at 5 July 2003
5 July 2003 6 July 2002
Note #'000 #'000
Fixed assets
Intangible assets 7,361 7,792
Tangible assets 7 154,292 126,955
Investments 213 48
---------- ---------
161,866 134,795
Current assets
Assets for sale 4,078 6,069
Stocks 1,432 1,896
Debtors 8 6,901 28,665
Cash at bank and in hand 8 9,763
---------- ---------
12,419 46,393
Creditors: amounts falling due within
one year 9 (35,475) (41,361)
---------- ----------
Net current (liabilities)/assets (23,056) 5,032
----------- ----------
Total assets less current liabilities 138,810 139,827
Creditors: amounts falling due after 10 (68,422) (70,507)
more than one year
Provision for liabilities and charges (17,132) (13,591)
----------- ----------
53,256 55,729
----------- ----------
Capital and reserves
Called up share capital 4,531 4,531
Share premium account 34,340 34,340
Profit and loss account 14,385 16,858
----------- ----------
Equity shareholders' funds 53,256 55,729
----------- ----------
Approved by the Board on 3 September 2003
Simon Rowe
FINANCE DIRECTOR
CONSOLIDATED CASH FLOW STATEMENT
for the 52 weeks ended 5 July 2003
52 weeks 53 weeks
ended ended
5 July 2003 6 July 2002
Note #'000 #'000
Net cash inflow from operating 11 27,651 27,722
activities
Returns on investments and servicing of finance
Interest received 559 86
Interest paid (6,952) (4,586)
---------- ---------
(6,393) (4,500)
---------- ---------
Taxation
Corporation tax paid (818) (2,879)
---------- ---------
Capital expenditure and financial investment
Purchases of tangible fixed assets (42,765) (48,948)
Sales of tangible fixed assets 7,654 -
Payments to acquire investments (247) -
---------- ---------
(35,358) (48,948)
---------- ---------
Acquisitions and disposals
Net cash acquired with subsidiary undertaking - (200)
Costs of acquisition - (1,042)
---------- ---------
- (1,242)
Fundamental reorganisation - proceeds from
asset sales 16,601 17,874
---------- ---------
16,601 16,632
---------- ---------
Dividends
Dividends paid (4,695) (4,542)
Net cash outflow before financing (3,012) (16,515)
Financing
Repayment of long term loans (6,743) (47,496)
New long term loans - 78,265
Loan notes due within one year - (776)
Net proceeds from issue of shares - 156
---------- ---------
Net cash (outflow)/inflow from financing (6,743) 30,149
---------- ---------
(Increase)/decrease in cash (9,755) 13,634
---------- ---------
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
For the 52 weeks ended 5 July 2003
52 weeks 53 weeks
ended ended
5 July 6 July
2003 2002
#'000 #'000
Profit/(loss) attributable to shareholders' for the
financial period 2,222 (1,022)
Dividends (4,695) (4,692)
-------- --------
(2,473) (5,714)
New share capital subscribed - 156
Goodwill previously written off - 1,227
-------- --------
Net reduction to shareholders' funds (2,473) (4,331)
Opening shareholders' funds 55,729 60,060
-------- --------
Closing shareholders' funds 53,256 55,729
======== ========
NOTES
for the 52 weeks ended 5 July 2003
1. The unaudited financial information set out in the announcement does
not constitute the company's statutory accounts for the 52 weeks ended 5 July
2003. The financial information for the 53 weeks ended 6 July 2002 is derived
from the statutory accounts for that year, which have been delivered to the
Registrar of Companies. The auditors reported on those accounts; their report
was unqualified and did not contain a statement under section 237 of the
Companies Act 1985. The statutory accounts for the 52 weeks ended 5 July 2003
will be finalised on the basis of the financial information presented by the
Directors in this preliminary announcement and will be delivered to the
Registrar of Companies following the company's Annual General Meeting.
2. Earnings per share have been calculated using the weighted average
number of shares in issue during the relevant financial years. The weighted
average number of shares in issue is 90,126,738 (2002 - 90,379,666) and the
earnings, being profits on ordinary activities after taxation, are #2,222,000
(2002 - loss #1,022,000). The earnings on a diluted basis exclude #nil (2002 -
#418,000) of interest on the convertible unsecured loan stock less tax thereon
of #nil (2002 - #125,000).
Diluted earnings per share have been calculated using the weighted average
number of shares in issue diluted for the effect of share options and
convertible unsecured loan stock, where the option price or conversion rate has
a diluting effect. The diluted weighted average number of shares is 91,075,919
(2002 - 95,774,814).
Earnings per share before goodwill amortisation and exceptional items excludes
fundamental reorganisation costs of #7,958,000 (2002 - #16,224,000), profit on
sales of fixed assets of #1,001,000 (2002 - #nil), goodwill amortisation of
#431,000 (2002- #431,000) and other exceptional losses of #1,912,000 (2002-
#890,000) together with a taxation credit thereon of #1,655,000 (2002 - credit
#5,529,000).
3. TAXATION
Continuing 52 weeks 53 weeks
Continuing operations ended ended
operations to be 5 July 2003 6 July 2002
ongoing discontinued Total Total
#'000 #'000 #'000 #'000
UK corporation tax
Profit/(loss) for the
period 2,441 (1,847) 594 1,646
--------- ---------- --------- ---------
Adjustment in respect
of prior periods (550) - (550) -
--------- ---------- --------- ---------
1,891 (1,847) 44 1,646
--------- ---------- --------- ---------
UK deferred tax:
Originating timing
differences 2,154 - 2,154 2,832
Reversing timing
differences - - - (4,541)
--------- ---------- --------- ---------
Total deferred tax 2,154 - 2,154 (1,709)
--------- ---------- --------- ---------
Tax on profit/(loss)
on ordinary activities 4,045 (1,847) 2,198 (63)
--------- ---------- --------- ---------
4. The directors have recommended a final dividend of 3.36p (2002 - 3.36p)
per share giving a total for the year of 5.18p (2002 - 5.18p), to be paid on 12
November 2003 to shareholders on the register at the close of business on 17
October 2003.
5. NET OPERATING COSTS
Continuing 52 weeks 53 weeks
Continuing operations ended ended
operations to be 5 July 2003 6 July 2002
ongoing discontinued Total Total
#'000 #'000 #'000 #'000
Cost of sales (27,572) (1,212) (28,784) (34,255)
Operating expenses (49,075) (2,663) (51,738) (54,396)
Depreciation (7,219) (223) (7,442) (7,044)
Goodwill amortisation (431) - (431) (431)
Head office expenses (7,169) (221) (7,390) (8,712)
Other operating income
Management fees - 121 121 974
Other 280 53 333 298
-------- ---------- --------- ---------
Net operating costs (91,186) (4,145) (95,331) (103,566)
Net operating costs - (1,912) (1,912) (890)
exceptional
-------- ---------- --------- ---------
(91,186) (6,057) (97,243) (104,456)
-------- ---------- --------- ---------
6. CONTINUING OPERATIONS TO BE DISCONTINUED
52 weeks 53 weeks
ended ended
5 July 2003 6 July 2002
#'000 #'000
Operating loss on continuing operations to be
discontinued (640) 4,761
UGP debt write off (1,912) -
--------- ----------
(2,552) 4,761
--------- ----------
Fundamental reorganisation of discontinuing activities
Loss on sales of fixed assets and related costs (4,908) (13,334)
Provision for onerous leases (3,050) -
UGP provision - (1,663)
Goodwill previously written off - (1,227)
---------- ----------
(7,958) (16,224)
---------- ----------
Taxation 1,847 3,948
---------- ----------
(8,663) (7,515)
---------- ----------
7. TANGIBLE ASSETS
5 July 2003 6 July 2002
#'000 #'000
Opening book value 126,955 135,119
Additions 43,021 53,909
Depreciation (7,442) (7,044)
Disposals/transfers (8,242) (55,029)
---------- ----------
Closing book value 154,292 126,955
---------- ----------
8. DEBTORS
5 July 2003 6 July 2002
#'000 #'000
Amounts falling due within one year:
Trade debtors 827 1,030
Corporation tax 520 -
Other debtors 1,742 23,552
Prepayments and accrued income 3,812 4,083
---------- ----------
6,901 28,665
---------- ----------
9. Creditors - Amounts falling due within one year
5 July 2003 6 July 2002
#'000 #'000
Bank loans 9,100 10,000
Loan notes 3,492 7,250
Trade creditors 6,959 10,277
Corporation tax - 254
Tax and social security 1,601 1,104
Accruals and deferred income 9,016 7,310
Proposed dividend 3,045 3,045
Other creditors 2,262 2,121
---------- ----------
35,475 41,361
---------- ----------
10. CREDITORS - AMOUNTS FALLING DUE AFTER ONE YEAR
5 July 2003 6 July 2002
#'000 #'000
Bank loans 1-2 years 9,100 10,000
Loan notes 1-2 years - 992
Bank loans 2-5 years 53,322 58,265
Loan notes 2-5 years 6,000 1,250
---------- ----------
68,422 70,507
---------- ----------
11. RECONCILIATION OF OPERATING PROFIT TO OPERATING CASH FLOWS
2 weeks ended 53 weeks ended
5 July 2003 6 July 2002
#'000 #'000
Operating profit 17,019 20,186
Depreciation 7,442 7,044
Amortisation of goodwill 431 431
Amortisation of investment 82 -
Decrease/(increase) in stocks 464 (295)
Decrease/(increase) in debtors 3,125 (1,452)
(Decrease)/increase in creditors (912) 1,808
---------- ----------
27,651 27,722
---------- ----------
12. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
52 weeks ended 53 weeks ended
5 July 2003 6 July 2002
#'000 #'000
(Decrease)/increase in cash in the period (9,755) 13,634
Cash inflow from increase in loans 6,743 (78,265)
Repayment of long term loans - 48,272
---------- ----------
Change in net debt resulting from cash flows (3,012) (16,359)
Borrowings of businesses acquired - (1,000)
Loan notes issued to acquire new business - (992)
---------- ----------
Movement in net debt in the period (3,012) (18,351)
Net debt at beginning of the period (77,994) (59,643)
---------- ----------
Net debt at end of the period (81,006) (77,994)
---------- ----------
13. The report and financial statements will be sent to all shareholders in the
week commencing 22 September 2003 and copies will be available from the Group's
registered office at 77 Muswell Hill, London N10 3PJ.
The Annual General Meeting of the Company will be held at the Walkabout Temple
on Wednesday, 5 November 2003 at 11.00am.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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