HMV Group PLC Interim Results -7-
December 13 2012 - 2:00AM
UK Regulatory
income (loss) - 0.5 1.6 - (48.5) (46.4) 1.0 (45.4)
Share premium
cancellation (342.9) - - 56.4 286.5 - - -
Share-based
payments - - - - 0.2 0.2 - 0.2
Share-based
payment
awards - - - 0.6 (0.6) - - -
Deferred tax on
share-based
payments - - - - 0.1 0.1 - 0.1
Payments to
non-controlling
interests - - - - - - (0.5) (0.5)
As at 29 October
2011 4.2 - 14.3 56.7 (180.9) (105.7) 1.3 (104.4)
----------------- --------- --------- ------------- ---------- ---------- -------- ------------------ --------
Interim consolidated cash flow statement
26 weeks 26 weeks 52 weeks
to to to
27 October 29 October 28 April
2012 2011 2012
(Restated)
Note GBPm GBPm GBPm
----------------------------------------- ----- ------------ ------------ ----------
Cash flows from operating activities
Loss before tax - continuing
operations (37.3) (45.7) (38.6)
Profit (loss) before tax - discontinued
operations 1.2 (4.6) (43.5)
Profit on disposal of discontinued
operations (11.6) (5.6) (5.5)
Net finance costs 11.2 10.6 24.4
Share of post-tax losses (profit)
of joint ventures accounted
for using the equity method (0.6) 0.7 1.1
Depreciation 9.1 10.6 21.4
Amortisation - - 0.2
Net impairment charges 10.4 - 41.5
Profit on disposal of investments - (0.4) -
Loss on disposal of property, 0.4 - -
plant and equipment
Equity-settled share-based payment
charge - 0.2 0.4
Pension contributions less income
statement charge (1.7) (4.2) (8.7)
(18.9) (38.4) (7.3)
Movement in inventories (11.1) (29.0) 13.9
Movement in trade and other
receivables 12.4 17.9 5.4
Movement in trade and other
payables (7.0) 37.7 (26.7)
Movement in provisions (1.9) (8.3) (6.0)
----------------------------------------- ----- ------------ ------------ ----------
Cash generated from operations (26.5) (20.1) (20.7)
Income tax received 0.7 7.5 7.4
----------------------------------------- ----- ------------ ------------ ----------
Net cash flows from operating
activities (25.8) (12.6) (13.3)
----------------------------------------- ----- ------------ ------------ ----------
Cash flows from investing activities
Purchase of property, plant
and equipment 10 (3.4) (11.6) (18.3)
Proceeds from sale of investments - 0.4 -
Interest received - - 0.2
Disposal costs 7 (3.0) (6.6) (6.7)
Proceeds from sale of businesses,
net of cash disposed 7 28.7 43.2 56.2
Investments in /contributions
to joint ventures - - (0.7)
Payments to non-controlling
interests (0.2) (0.5) (0.9)
Other movements in non-controlling
interests - - 0.5
Net cash flows from investing
activities 22.1 24.9 30.3
----------------------------------------- ----- ------------ ------------ ----------
Cash flows from financing activities
Movements in funding 10.8 11.6 1.2
Costs of raising debt (0.4) (6.3) (7.4)
Interest paid (4.3) (4.7) (10.7)
Settlement of interest rate (0.9) - -
swap
Repayment of capital element
of finance lease - (0.1) (0.1)
Net cash flows from financing
activities 5.2 0.5 (17.0)
----------------------------------------- ----- ------------ ------------ ----------
Net increase in cash and cash
equivalents 1.5 12.8 -
Opening cash and cash equivalents 28.7 28.4 28.4
Effect of exchange rate changes - 0.4 0.3
----------------------------------------- ----- ------------ ------------ ----------
Closing cash and cash equivalents 12 30.2 41.6 28.7
----------------------------------------- ----- ------------ ------------ ----------
Notes to the interim condensed consolidated financial
statements
1. General information
The Company is a public limited company incorporated and
domiciled in the UK. The address of its registered office is
Windsor House, Spittal Street, Marlow, Buckinghamshire, SL7
3HJ.
The Company is listed on the London Stock Exchange.
The interim condensed consolidated financial statements of the
Group were approved for issue on 12 December 2012.
These interim financial results do not comprise statutory
accounts within the meaning of Section 435 of the Companies Act
2006 and are unaudited. Statutory accounts for the 52 weeks ended
28 April 2012 were approved by the Board of Directors on 9 August
2012 and delivered to the Registrar of Companies. The report of the
auditors on those accounts was unqualified, did not contain an
emphasis of matter paragraph and did not contain any statement
under Section 498 of the Companies Act 2006.
2. Basis of preparation
The interim condensed consolidated financial statements for the
26 weeks ended 27 October 2012 have been prepared in accordance
with the Disclosure and Transparency Rules of the Financial
Services Authority and with IAS 34, "Interim Financial Reporting"
as adopted by the European Union. The interim condensed
consolidated financial report should be read in conjunction with
the annual financial statements for the year ended 28 April 2012,
which have been prepared in accordance with IFRSs as adopted by the
European Union.
Going Concern Review
In determining the appropriate basis of preparation of the
financial statements, the Directors are required to consider
whether the Group can continue in operational existence for the
foreseeable future.
As described in note 13, the amended debt facility contains
covenants in respect of gearing and fixed charge cover, together
with certain mandatory payments. The Group has complied with its
covenant obligations during the period. The current level of
Christmas trading has not been in line with the level expected and
the Directors have concluded that, it is probable that the January
2013 and April 2013 covenants will not be complied with.
The Directors are aware of further uncertainties facing the
business which are as follows:
- the ability to trade is dependent on continuity of supply. Any
reduction or withdrawal of supplier support and the inability to
negotiate more favourable commercial terms with suppliers, will
materially adversely affect the Group's margins. The Group
continues to work closely with its suppliers to secure the future
of the business and these discussions continue to be positive.
- future trading may not be in line with the assumptions in the
Group's latest forecasts. These are dependent on the current
economic environment, the strength of core physical product markets
in the important gifting season, the strength of the releases
relative to forecast, HMV's market share and the impact of the new
store service initiatives.
These uncertainties may lead to an inability of the Group to
maintain sufficient cash flow in order to operate within the
existing debt facilities, including the requirement to clear down
the GBP50 million working capital facility for a period of 31
consecutive days and repaying the amortisation payment of GBP30
million in January 2013.
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