Interim Results
22 7์ 2004 - 4:30PM
UK Regulatory
THE LONGMEAD GROUP plc
Interim results for 26 weeks ended 1 May 2004
CHAIRMAN'S STATEMENT
Trading Results
In the six months under review, turnover has increased by nearly 8% to ๏ฟฝ1.400 million (๏ฟฝ1.299 million)
with the trading loss, before exceptional items, falling to just ๏ฟฝ34,000 (๏ฟฝ172,000). This result
represents a steady improvement compared with the previous three half-year periods but we still have a
long way to go. However, as reported earlier, we were successful in selling our warehouse premises in
the period and this resulted in an exceptional profit of ๏ฟฝ350,000 which means that the outcome for the
half year, after exceptional items, is a profit of ๏ฟฝ316,000 (๏ฟฝ647,000 loss).
We are starting to see the benefits of our overseas sourcing policy through improved margins in the
period, particularly due to improved exchange rates. However it would be unwise to rely on a
continuation of a strong pound with the present state of uncertainty in international affairs. We have
still retained our ceramic manufacturing facility as we have not yet been able to find suitable overseas
alternatives.
Sales
During the period, we launched nine new ranges of metal bathroom accessories together with a number of
ancillary products. These were presented at the Kitchen, Bedroom and Bathroom Exhibition at the NEC
Birmingham in January. We received a very positive response to our new products and we are now seen in
the trade as a leader in design and presentation.
All the new products are being sourced from the Far East but, unfortunately, we have experienced delays
in getting deliveries which has affected the level of sales in the period. We are working with our
agents to correct the problems but as some of the ranges are completely new to our manufacturers there
have been a number of teething problems. These have now been, mostly, resolved and we expect improved
service from our suppliers from now on.
Our sales to the major DIY stores have been disappointing as some groups are now starting to import
direct themselves. Although they have retained some of our ranges, it does limit our opportunities to
develop new product ranges with them. This makes it increasingly important that we increase our sales to
the general retail outlets and hence the emphasis we are placing on design, presentation and
merchandising.
New Product Development
Our programme of product development continues. We are finalising an additional range of new products
which we intend to launch in September 2004. These products will substantially broaden our product
offering which is essential if we are to compete successfully with the very large number of other
companies who are supplying products similar to our own.
Balance Sheet
The results for the year, after exceptional items mean that, at the half year end, our net assets per
share have increased to 37.5p (33.4p). Bank borrowings have also fallen and at the half year represented
37.4% of shareholders' funds. Stocks have inevitably increased as a result of bringing in new ranges of
products. With our suppliers in many cases 6,000 miles away, it is essential to hold higher levels of
stocks as the replacement time is quite long. It was not considered necessary to make any abnormal
provisions against stocks at the half year.
Dividend
We have reduced the deficit on the Profit and Loss Account as a result of the reported profit. However,
as long as the deficit remains we are unable to recommend the payment of a dividend.
Future Prospects
The market place is difficult at present with intense competition and a proliferation of new companies
entering the market. In addition, more and more large chains are seeking to import their products direct
from overseas manufacturers. It is for this reason that we are placing great emphasis on design,
development and product presentation.
The increase in house prices is also a source of concern as it may lead to an eventual fall in prices and
a consequent reduction in household expenditure which, inevitably, would result in a lower demand for our
type of products.
To counter these factors we are broadening our product base. There are still many opportunities which we
can exploit provided that our product offering is right.
R E W Newman
Chairman
22 July 2004
UNAUDITED CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR 26 WEEKS ENDED 1 MAY 2004
Unaudited 26 weeks to 1 May 2004 Unaudited Audited
Before Exceptional Total 26 weeks to 52 weeks to
Exceptional Item 3 May 2003 1 Nov 2003
Item
๏ฟฝ'000 ๏ฟฝ'000 ๏ฟฝ'000 ๏ฟฝ'000 ๏ฟฝ'000
TURNOVER 1,400 - 1,400 1,299 2,598
Cost of sales (812) - (812) (1,412) (2,256)
_____ _____ _____ _____ _____
Gross profit 588 - 588 (113) 342
Operating costs (592) 351 (241) (494) (998)
_____ _____ _____ _____ _____
OPERATING (LOSS)/
PROFIT (4) 351 347 (607) (656)
Interest receivable - - - - -
Interest payable (31) - (31) (40) (78)
_____ _____ _____ _____ _____
PROFIT/(LOSS) ON
ORDINARY ACTIVITIES
BEFORE TAXATION (35) 351 316 (647) (734)
_____ _____
Tax on profit on ordinary
Activities
- - -
_____ _____ _____
PROFIT/(LOSS) ON ORDINARY
ACTIVITIES AFTER TAXATION 316 (647) (734)
Dividends - - -
_____ _____ _____
RETAINED PROFIT/(LOSS)
FOR THE PERIOD 316 (647) (734)
_____ _____ _____
EARNINGS/(LOSS) PER SHARE
(PENCE) 17.66p (11.59)p (13.15)p
UNAUDITED CONSOLIDATED BALANCE SHEET
AT 1 MAY 2004
Unaudited Unaudited Audited
as at as at as at
1 May 2004 3 May 2003 1 Nov 2003
๏ฟฝ'000 ๏ฟฝ'000 ๏ฟฝ'000
FIXED ASSETS
Intangible Assets 23 26 25
Tangible Assets 1,510 1,999 1,980
_____ _____ _____
1,533 2,025 2,005
_____ _____ _____
CURRENT ASSETS
Stocks 1,275 1,162 1,202
Debtors 548 542 670
Cash at bank and in hand 4 4 9
_____ _____ _____
1,827 1,708 1,881
CREDITORS: amounts
falling due within one year (634) (1,150) (956)
_____ _____ _____
NET CURRENT ASSETS 1,193 558 925
_____ _____ _____
TOTAL ASSETS LESS
CURRENT LIABILITIES 2,726 2,583 2,930
CREDITORS: amounts
falling due after one year (632) (718) (1,153)
PROVISIONS FOR
LIABILITIES & CHARGES - - -
_____ _____ _____
2,094 1,865 1,777
_____ _____ _____
CAPITAL AND RESERVES
Called up share capital 558 558 558
Share premium account 1,398 1,398 1,398
Capital redemption reserve 19 19 19
Revaluation reserve 268 273 270
Profit and loss account (149) (383) (468)
_____ _____ _____
TOTAL EQUITY
SHAREHOLDERS' FUNDS 2,094 1,865 1,777
_____ _____ _____
UNAUDITED CASH FLOW STATEMENT
FOR 26 WEEKS ENDED 1 MAY 2004
Unaudited Unaudited Audited
26 weeks to 26 weeks to 52 weeks to
1 May 2004 3 May 2003 1 Nov 2003
๏ฟฝ'000 ๏ฟฝ'000 ๏ฟฝ'000
CASH FLOW FROM OPERATING
ACTIVITIES (Note 1) 42 (21) (198)
Returns on investment and
servicing of finance (34) (38) (80)
Taxation - - -
Capital expenditure and
financial investment 782 (21) (48)
_____ _____ _____
NET CASH INFLOW/(OUTFLOW)
BEFORE FINANCING 790 (80) (326)
Financing - (Decrease)/increase in debt (587) (53) 395
_____ _____ _____
INCREASE/(DECREASE)
IN CASH 203 (133) 69
_____ _____ _____
Note 1: Reconciliation of operating profit to net cash inflow from operating activities
Unaudited Unaudited Audited
26 weeks to 26 weeks to 52 weeks to
1 May 2004 3 May 2003 1 Nov 2003
๏ฟฝ'000 ๏ฟฝ'000 ๏ฟฝ'000
Operating profit/(loss) 347 (607) (656)
Depreciation 55 246 295
(Profit) on sale of fixed assets (351) (1) (2)
(Increase)/decrease in stock (73) 202 162
Decrease in debtors 122 191 63
(Decrease) in creditors (58) (52) (60)
_____ _____ _____
Net cash inflow/(outflow) from
operating activities 42 (21) (198)
_____ _____ _____
Note 2: Reconciliation of net cash flow to movement in net debt
Unaudited Unaudited Audited
26 weeks to 26 weeks to 52 weeks to
1 May 2004 3 May 2003 1 Nov 2003
๏ฟฝ'000 ๏ฟฝ'000 ๏ฟฝ'000
Increase/(decrease) in cash in the period 203 (133) 69
Cash inflow/(outflow) from increase in
debt and lease and hire purchase financing 587 53 (395)
_____ _____ _____
790 (80) (326)
New finance lease and hire
purchase obligations (14) (22) (22)
_____ _____ _____
Movement in net debt in period 776 (102) (348)
Net debt at beginning of period (1,619) (1,271) (1,271)
_____ _____ _____
Net debt at end of period (843) (1,373) (1,619)
_____ _____ _____
ANALYSIS OF NET DEBT
At Other At
1 Nov 2003 Cash flow non-cash 1 May 2004
changes
๏ฟฝ'000 ๏ฟฝ'000 ๏ฟฝ'000 ๏ฟฝ'000
Cash 9 (5) - 4
Overdraft (314) 208 - (106)
_____ _____ _____ _____
(305) 203 - (102)
Debt due within one year (130) 51 5 (74)
Debt due after one year (1,138) 535 (5) (608)
Finance leases (46) 1 (14) (59)
_____ _____ _____ _____
TOTAL (1,619) 790 (14) (843)
_____ _____ _____ _____
Note 3: Earnings per share
The loss per ordinary share is calculated on the loss on ordinary activities after taxation and on a weighted
average of ordinary shares in issue of 5,584,391 in the period (26 weeks to 3 May 2003: 5,584,391 and 52
weeks to 1 November 2003: 5,584,391).
Note 4: Preparation of interim financial statements
These unaudited financial statements have been prepared on the basis of the accounting policies set out in the
Group's 2003 statutory financial statements.
Note 5: Copies of the Accounts
Copies of the interim accounts will be sent to shareholders. Further copies will be available from the
Company's head office at The Longmead Group plc, Millwey Industrial Estate, Axminster, Devon, EX13 5HU
and from the Company's nominated adviser, Smith & Williamson Corporate Finance Limited, at No. 1 Riding
House Street, London, W1A 3AS for at least one month from the date of this announcement.
The Longmead Group PLC
Longmead (LSE:LGM)
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