THE LONGMEAD GROUP PLC ("LONGMEAD" OR "THE COMPANY")
PRELIMINARY RESULTS FOR THE 52 WEEKS ENDED 28 OCTOBER 2006
CHAIRMAN'S STATEMENT
Trading Results
The overall trading result for the year shows some improvement on the previous year but we have not yet returned
to profit. Turnover for the period was �2.29 million (2005: �2.26 million), only a very slight improvement on the
previous year. Our general trade business, i.e. to retailers and distributors, has increased by nearly 9% which
is encouraging but our turnover to the large DIY stores has fallen by nearly 5%. The past year was a difficult
one for our major DIY customers, as reported at the half year, with the whole of the DIY sector experiencing a
downturn in business. There has been some improvement in this sector since the year end but sales are far from
buoyant. Export sales remained fairly static compared with the previous year.
Our gross margins have been maintained at the previous level in spite of the large increases in metal costs. The
major problem has been the rise in freight costs from the Far East and the increase in distribution costs in the
UK. In spite of this, our overheads show only a very tiny increase from 2005. The overall trading result shows a
loss of �170,102 (2005: �206,303) primarily caused by the poor sales to our major DIY customers. We have
continued to manufacture ceramic products in the UK and there are some signs that the demand for ceramics is
increasing. We have still not been able to find satisfactory alternatives in the Far East or Eastern Europe. The
number of employees has been maintained at the 2005 level.
New Products
The new products introduced during the year have performed well. The bathroom furniture has generated a good
level of turnover and we are seeing repeat business. The shower products and bathroom scales have also achieved a
satisfactory level of sales and we are increasing the stockists in this area.
New product development is under way with a view to launching products at the Kitchen & Bathroom Show at the NEC
Birmingham in January 2008.
Balance Sheet
At the end of our financial year, shareholders' funds stood at �1.45 million (2005: �1.62 million). Net assets
per share have, therefore, fallen to 26.0p per share. Stocks have been maintained at approximately the same level
as last year although the mix of stocks has changed towards a higher level of finished goods. Debtors have
increased significantly mainly due to increased general trade sales although we are affected by major customers
seeking longer credit terms. This has resulted in an increase in bank borrowings although we are operating within
our bank facilities. The medium term loan with HSBC Bank has been reduced by �56,000 during the year.
As a result of the loss for the year the Company, although operating within its facilities, was in breach of its
banking covenant at the year end. However, HSBC Bank has waived the requirement to comply. The banking facilities
are due for renewal in October 2007 at which time, subject to the Company achieving its sales budget, they will be
adequate for our requirements.
Future Prospects
A small amount of progress has been made over the past year but we still have a long way to go. We are budgeting
to increase our sales in 2006-2007 by over 10% and after four months of trading we are slightly ahead of budget.
However, the current trading climate is very uncertain which makes reliable forecasting very difficult. The ever
increasing price of houses and the very high level of credit card debt do not augur well for continuing growth in
the economy and this, together with political uncertainty, could lead to a re-appraisal of consumer spending.
We propose to keep our costs strictly under control and to make every effort to maintain our margins. We believe
we are making progress and we hope that the present year will see an improvement in our results. However, many
pitfalls lie ahead.
I would finally like to thank the management and staff of the Company for their efforts and support during the
year.
R E W Newman 21 March 2007
Chairman
CONSOLIDATED PROFIT AND LOSS ACCOUNT
52 weeks ended 28 October 2006
52 weeks 52 weeks
ended ended
28 October 29 October
Note 2006 2005
� �
TURNOVER - continuing operations 2,288,354 2,263,377
Cost of sales 1 (1,427,398) (1,449,229)
(includes 2005: exceptional cost �53,646)
_____________ _____________
GROSS PROFIT 860,956 814,148
Distribution costs (656,553) (638,362)
Administrative expenses (322,897) (333,298)
_____________ _____________
OPERATING LOSS
- continuing operations (118,494) (157,512)
Interest receivable and similar income 3 147
Interest payable and similar charges (51,611) (48,938)
_____________ _____________
LOSS ON ORDINARY
ACTIVITIES BEFORE TAXATION (170,102) (206,303)
Taxation on loss on ordinary activities - -
_____________ _____________
LOSS ON ORDINARY
ACTIVITIES AFTER TAXATION (170,102) (206,303)
_____________ _____________
LOSS FOR THE
FINANCIAL YEAR (170,102) (206,303)
_____________ _____________
LOSS PER ORDINARY SHARE
- Basic 2 (3.05)p (3.69)p
- Diluted 2 (3.05)p (3.69)p
There are no recognised gains and losses for the current or preceding financial period other than as stated in the
profit and loss account. Accordingly, no statement of total recognised gains and losses is given.
CONSOLIDATED BALANCE SHEET
At 28 October 2006
2006 2005
� � � �
FIXED ASSETS
Intangible assets 15,981 18,981
Tangible assets 1,306,049 1,398,547
_____________ ____________
1,322,030 1,417,528
CURRENT ASSETS
Stocks and work in progress 1,293,350 1,304,774
Debtors 540,685 420,866
Cash at bank and in hand 2,191 1,855
_____________ ____________
1,836,226 1,727,495
CREDITORS: AMOUNTS FALLING DUE
WITHIN ONE YEAR (972,091) (741,778)
_____________ ____________
NET CURRENT ASSETS 864,135 985,717
_____________ ____________
TOTAL ASSETS LESS CURRENT
LIABILITIES 2,186,165 2,403,245
CREDITORS: AMOUNTS FALLING DUE
AFTER MORE THAN ONE YEAR (731,921) (778,899)
_____________ ____________
TOTAL NET ASSETS 1,454,244 1,624,346
_____________ ____________
CAPITAL AND RESERVES
Called up share capital 558,439 558,439
Share premium account 1,397,747 1,397,747
Capital redemption reserve 19,000 19,000
Revaluation reserve 255,041 260,113
Profit and loss account (775,983) (610,953)
_____________ ____________
TOTAL EQUITY SHAREHOLDERS' FUNDS 1,454,244 1,624,346
_____________ ____________
These financial statements were approved by the Board of Directors on 21 March 2007.
Signed on behalf of the Board of Directors
R E W Newman
Director
CONSOLIDATED CASH FLOW STATEMENT
52 weeks ended 28 October 2006
2006 2005
� � � �
Net cash outflow from operating activities (41,858) (138,401)
Returns on investments and servicing of finance
Interest received 3 147
Interest paid (50,641) (48,513)
Interest element of finance lease rentals (914) (1,188)
___________ __________
(51,552) (49,554)
Capital expenditure and financial investment
Purchase of tangible fixed assets (6,600) (13,613)
Proceeds from sale of tangible fixed assets 4,650 4,750
___________ __________
(1,950) (8,863)
___________ __________
Net cash outflow before financing (95,360) (196,818)
Financing
Capital element of finance lease rentals (20,432) (30,927)
Loans advanced - 750,000
Loans repaid (56,331) (653,626)
___________ __________
Net cash (outflow)/inflow from financing (76,763) 65,447
___________ __________
Decrease in cash in the period (172,123) (131,371)
___________ __________
NOTES TO THE ACCOUNTS
52 weeks ended 28 October 2006
1. EXCEPTIONAL ITEMS
2006 2005
� �
Stock write-offs - 39,335
Factory closure costs and redundancy payments - 14,311
_________ _________
- 53,646
_________ _________
2. LOSS PER ORDINARY SHARE
The calculation of the basic loss per share is based on the weighted average number of shares in issue
during the financial year of 5,584,391 (2005: 5,584,391) and on the loss attributable to ordinary
shareholders of �170,102 (2005: �206,303 loss).
3. The financial information on the Group set out above does not constitute statutory financial information
within the meaning of section 240 of the Companies Act 1985. The statutory accounts for the 52 weeks ended 28
October 2006 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 Group's AnnualGeneral
Meeting.
4. Copies of the 2006 Report and Accounts will be sent to shareholders in due course. Further copies will be
available from the registered office of The Longmead Group plc, Millwey Industrial Estate, Axminster, Devon,
EX13 5HU and from the Company's nominated adviser, Smith & Williamson Corporate Finance Limited at 25 Moorgate, London,
EC2R 6AY for one month from the date of this announcement.
The Longmead Group PLC
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