LENNOX HOLDINGS PLC
Results for the Year ended 31 December 2006
Lennox Holdings Plc (the `Company') the distributor of northern European
produce to Spain, announces final results for the year ended 31 December 2006.
Copies of the full accounts will be posted to shareholders on 29 June 2007.
Enquiries:
Financial Public Relations: 020 7451 7068
Nexus Financial Ltd nicholas.nelson@nexusgroup.co.uk
Nicholas Nelson/Kathy Boate
Nominated Advisor: 020 7512 0191
ARM Corporate Finance Ltd
Ian Fenn
27 June 2007
CHAIRMAN'S REVIEW
In his report to shareholders at the time of the release of the Company's
annual figures last June, my predecessor spoke of a period of turmoil for the
Company.
The Company entered the year to 31st December 2006 saddled with the legacy of
this period and the Board's first priority was to focus on strengthening the
operating base through a combination of rationalisation measures aimed at
bringing costs down, and a review of trading operations aimed at concentrating
on a smaller number of higher margin product lines.
I am pleased to report that although much remains to be done, we are beginning
to see some positive results from this strategy and we believe that the Company
is now on a stronger footing than it was a year ago. It is also encouraging to
be able to report that these efforts in recent months have seen a stabilisation
of sales and improved margins and we are hopeful of continuing improvements
FINANCIAL OVERVIEW
In the year ended 31st December 2006, revenue declined by approximately 27% to
�7,091,000 (2005: �9,779,000) as a result of the retrenchment of activities.
The marketplace for the Company's products, however, remains encouraging. The
Company's loss before tax increased to �2,435,000 (2005 loss: �1,587,000).
Administration expenses remained broadly similar year on year with the benefits
of the rationalisation measures, taken in January and February 2007 being felt
in the current year. Furthermore, these measures will have no impact on the
Company's ability to service its customers.
Following the refinancing in July 2006 the working capital position was further
strengthened in March when the Company announced that a new banking facility
with Bank Popular had been negotiated. Under this facility, Bank Popular will
discount up to Euro500,000 in respect of selected debtors. Lennox currently has a
debtor book of approximately Euro2.0m and it is proposed that a wider invoice
discounting facility will be made available over time.
THE BOARD
On the 26th July 2006 I was appointed as Executive Chairman. I have over 30
years business experience within the food industry and of the procurement
distribution and sales process industries, including Brakes Food Service and
Fisher Foods Limited. He is currently on the boards of Harpenden Building
Society and Pinguin Foods UK.
Rolf Silver, ACCA was appointed as Finance Director on the 26th July 2006. Rolf
Silver has been an accountant in practice for over ten years. He has worked as
a financial consultant for the last eight years for companies such as
Computerland plc and Experian Group Limited.
On the 17th January 2007 the company announced that Ray Greenwood had decided
to retire from the board. I have assumed his responsibilities.
STAFF
Following the review implemented early in the current year, the Board has
undertaken a rationalisation of all aspects of the Company's operations which
has included a reduction of the overall headcount, aimed at producing
commensurate cost reductions.
This has been a difficult period and we thank the staff for their loyalty and
support.
OUTLOOK
The Company is recognised in the food industry as being one of the prime means
of distributing northern European produce to Spain.
The product range has been proactively rationalised, by removing the low
margin, low turnover product lines and a greater emphasis placed on high value,
high volume products. In the past year we have concentrated on increasing the
range of products in our retail accounts whilst noting the potential to grow
into the commercial marketplace, taking in hotels, restaurants and other
caterers, which require catering package products.
The core strategy remains intact and the Company continues to strengthen
alliances with UK food manufacturers seeking to promote and distribute their
products into the Spanish domestic market. The board looks forward to building
on the opportunities available to the Company.
Nigel Terry
Chairman
LENNOX HOLDINGS PLC
YEAR ENDED 31 DECEMBER 2006
CONSOLIDATED INCOME STATEMENT
Notes 2006 � 2005 �
'000 '000
Continuing operations
Revenue 2 7,091 9,779
Cost of sales (5,624) (7,650)
GROSS PROFIT 1,467 2,129
Administrative expenses (3,860) (3,628)
OPERATING (LOSS) 4 (2,393) (1,499)
Finance income 5 67 -
Finance costs 5 (109) (88)
(LOSS)BEFORE TAXATION (2,435) (1,587)
Taxation 6 - -
(LOSS) ATTRIBUTABLE TO EQUITY SHAREHOLDERS (2,435) (1,587)
Basic (loss)per ordinary share 8 (9.4)p (6.6)p
Diluted earnings per ordinary share of 1p (2005: 10p)8 (2.5)p (6.6)p
The company has elected to take the exemption under section 230 of the
Companies Act 1985 to not present the parent company profit and loss account.
The loss for the parent company was � (474,043) (2005: � (736,000)).
LENNOX HOLDINGS PLC
YEAR ENDED 31 DECEMBER 2006
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
GROUP Note Share Share Retained Total �
Capital Premium Earnings '000
�'000 �'000 �'000
Balance as at 31 December 2005 2,420 6,971 (8,525) 866
Prior year adjustment 19 - - 428 428
Restated balance at 31 December 2005 2,420 6,971 (8,097) 1,294
Exchange difference - - 47 47
Costs incurred on share issue 23 - (156) - (156)
Issue of shares during the year 21 245 - - 245
Net expense recognised directly in 2,665 6,815 (8,050) 1,430
Equity
Loss for the year - - (2,435) (2,435)
Dividends - - - -
Balance at 31 December 2006 2,665 6,815 (10,485) (1,005)
COMPANY Share Share Retained Total �
Capital Premium Earnings '000
�'000 �'000 �'000
Balance as at 1 January 2006 2,420 6,971 (8,317) 1,074
Costs incurred on share issue 23 - (156) - (156)
Issue of shares during the year 21 245 - - 245
Net expense recognised directly in 2,665 6,815 (8,317) 1,163
equity
Loss for the year - - (474) (474)
Balance at 31 December 2006 2,665 6,815 (8,791) 689
LENNOX HOLDINGS PLC
YEAR ENDED 31 DECEMBER 2006
CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2006
Notes 2006 � 2005 �
'000 '000
Restated
NON-CURRENT ASSETS
Property, plant and equipment 10 1,985 1,952
Intangible assets 9 1 1
1,986 1,953
CURRENT ASSETS
Inventories 12 1,156 1,546
Trade and other receivables 13 1,990 2,515
Cash and cash equivalents 299 269
3,445 4,330
TOTAL ASSETS 5,431 6,283
CAPITAL AND RESERVES ATTRIBUTABLE TO EQUITY
HOLDERS OF THE COMPANY
Ordinary shares 21 2,665 2,420
Share premium 23 6,815 6,971
Retained earnings 24 (10,485) (8,097)
(1,005) 1,294
Minority interest in equity - -
TOTAL EQUITY (1,005) 1,294
NON-CURRENT LIABILITIES
Tax liabilities 15 606 -
Borrowings 16 937 1,010
Convertible loan stock 18 2,717 -
4,260 1,010
CURRENT LIABILITIES
Trade and other payables 14 1,929 2,252
Current tax liabilities 157 131
Borrowings 16 90 120
Provisions for other liabilities and charges 19 - 1,476
2,176 3,979
TOTAL LIABILITIES 6,436 4,989
TOTAL EQUITY AND LIABILITIES 5,431 6,283
The financial statements were approved by the board of directors and authorised
for issue on 27th June 2007.
They were signed on its behalf by:
Rolf Silver
Finance Director
LENNOX HOLDINGS PLC
YEAR ENDED 31 DECEMBER 2006
COMPANY BALANCE SHEET AS AT 31 DECEMBER 2006
Notes 2006 2005
�'000 �'000
NON CURRENT ASSETS
Property, plant and equipment 10 38 -
Investments in subsidiaries 11 1,500 1,500
1,538 1,500
CURRENT ASSETS
Trade and other receivables 13 2,130 24
Cash and cash equivalents 46 7
2,176 31
TOTAL ASSETS 3,714 1,531
CAPITAL AND RESERVES ATTRIBUTABLE TO EQUITY HOLDERS
OF THE COMPANY
Ordinary shares 21 2,665 2,420
Share premium 23 6,815 6,971
Retained earnings (8,791) (8,317)
689 1,074
Minority interest - -
TOTAL EQUITY 689 1,074
NON-CURRENT LIABILITIES
Borrowings 16 22 -
Convertible loan stock 18 2,717 -
2,739 -
CURRENT LIABILITIES
Trade and other payables 14 276 430
Current tax liabilities - 27
Borrowings 16 10 -
286 457
TOTAL LIABILITIES 3,025 457
TOTAL EQUITY AND LIABILITIES 3,714 1,531
The financial statements were approved by the board of directors and authorised
for issue on 27th June 2007.
They were signed on its behalf by:
Rolf Silver
Finance Director
LENNOX HOLDINGS PLC
YEAR ENDED 31 DECEMEBER 2006
CONSOLIDATED CASH FLOW STATEMENT
Notes 2006 2005
�'000 �'000
NET CASH FROM OPERATING ACTIVITIES 27 (2,512) 28
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds on disposal of fixed assets 10 - 3
Purchases of property plant and equipment 10 (161) (433)
NET CASH USED IN INVESTING ACTIVITIES (161) (430)
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid - (154)
New borrowings 2,770 305
Repayment of borrowings (156) (50)
Costs incurred on share issue (156) -
Proceeds on issue of shares 245 -
(Decrease) in bank overdrafts - (201)
NET CASH USED IN FINANCING ACTIVITIES 2,703 (100)
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 30 (502)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 269 771
Effect of foreign exchange rate charges - -
CASH AND CASH EQUIVALENTS AT END OF YEAR 299 269
LENNOX HOLDINGS PLC
YEAR ENDED 31 DECEMBER 2006
NOTES TO THE FINANCIAL STATEMENTS
1. PRINCIPAL ACCOUNTING POLICIES
The principle accounting policies applied in the preparation of these
consolidated financial statements are set out below. These policies have been
consistently applied to all the years presented, unless otherwise stated.
The financial statements have been prepared under the going concern concept.
The continuation of the group's activities is dependent upon the continued
support of the bank, its creditors and the group's improving trading
performance.
1.1 Basis of Preparation
The consolidated financial statements of Lennox Holdings plc have been prepared
in accordance with EU Endorsed International Financial Reporting Standards
(IFRS), IFRIC interpretations and the Companies Act 1985 applicable to
companies reporting under IFRS. The consolidated financial statements have been
prepared under the historical cost convention, as modified by the revaluation
of certain properties.
IFRS, as adopted by the EU, differs in certain respects from IFRS as issued by
the IASB. However, the consolidated financial statements for the periods
presented would be no different had the group applied IFRS as issued by the
IASB. References to IFRS hereafter should be construed as references to IFRS as
adopted by the EU.
The preparation of financial statements in conformity with IFRS requires the
use of certain critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the group's accounting
policies.
1.2 Consolidation
The consolidated financial statements incorporate the financial statements of
the company and enterprises controlled by the company made up to 31st December
each year. Control is achieved where the company has the power to govern the
financial and operating policies of an investee enterprise so as to obtain
benefits from its activities.
On acquisition, the identifiable assets, liabilities and contingent liabilities
of a subsidiary are measured at their fair values at the date of acquisition.
The results of the subsidiaries acquired or disposed of during the year are
included in the consolidated income statement from the effective date of
acquisition or up to the effective date of disposal, as appropriate.
Where necessary, adjustments are made to financial statements of subsidiaries
to bring the accounting policies used in line with those used by other members
of the group.
All significant inter company transactions and balances between group
enterprises are eliminated on consolidation.
1.3 Segment reporting
A business segment is a group of assets and operations engaged in providing
products or services that are subject to risks and returns that are different
from those of other business segments. A geographical segment is engaged in
providing products or services within a particular environment that are subject
to risks and returns which are different from those segments operating in other
economic environments.
LENNOX HOLDINGS PLC
YEAR ENDED 31 DECEMBER 2006
NOTES TO THE FINANCIAL STATEMENTS
1. PRINCIPAL ACCOUNTING POLICIES - continued
1.4 Foreign Currency translation
Items included in the financial statements of each group's entities are
measured using the currency of the primary economic environment in which the
entity operates (`the functional currency'). The consolidated financial
statements are presented in Sterling (�), which is the company's functional and
presentational currency.
Foreign currency transactions are translated into the functional currency using
the exchange rates prevailing at the dates of the transactions. Foreign
exchange profit and losses relating from the settlement of such transactions
and from the translation at the year end exchange rates of monetary assets and
liabilities denominated in foreign currencies are recognised in the income
statement.
The results and financial position of all the group entities that have a
functional currency different from the presentation currency are translated
into the presentation currency. Assets and liabilities for each balance sheet
are translated at the closing rate at the date of the balance sheet. Income and
expenses for each income statement are translated at the average exchange rate.
All resulting exchange differences are recognised as a separate component of
equity.
1.5 Property, plant and equipment
Land and buildings held for use in the production or supply of goods and
services, or for administration purposes, are shown at fair value, based on
periodic, but at least triennial, valuations by external independent valuers,
less subsequent depreciation for buildings. Any accumulated depreciation at the
date of revaluation is eliminated against the gross carrying amount of the
asset, and the net amount is restated to the revalued amount of the asset. All
other property, plant and equipment is stated at historical cost less
depreciation. Historical cost includes expenditure that is directly
attributable to the acquisition of the items.
Increases in the carrying amount arising on revaluation of land and buildings
are credited to other reserves in shareholders' equity. Decreases that offset
previous increases of the same asset are charged against other reserves
directly in equity; all other decreases are charged to the income statement.
Each year the difference between depreciation based on the revalued carrying
amount of the asset charged to the income statement and depreciation based on
the asset's original cost is transferred from `other reserves' to `retained
earnings'.
Depreciation on assets is charged so as to write off the cost or valuation or
assets, over their estimated useful life, using the straight line method, on
the following basis:
Freehold property : 50 years
Vehicles : 3 - 5 years
Fixtures, fittings and equipment : 3 - 5 years
Assets held under finance leases are depreciated over their expected useful
lives on the same basis as owned assets.
The gain or loss arising on disposal of an asset is determined as the
difference between the sales proceeds and the carrying amount of the asset.
1.6 Goodwill
Goodwill arising on consolidation represents the excess of the cost of
acquisition over the Group's interest in the fair value of the identifiable
assets, liabilities and contingent liabilities of a subsidiary, associate or
jointly controlled entity at the date of acquisition. Goodwill is recognised as
an asset and is tested for impairment annually, or on such other occasions that
events or changes in circumstances indicate that it might be impaired.
LENNOX HOLDINGS PLC
YEAR ENDED 31 DECEMBER 2006
NOTES TO THE FINANCIAL STATEMENTS
1. PRINCIPAL ACCOUNTING POLICIES - continued
1.6 Goodwill - continued
Goodwill arising on the acquisition of an associate is included within the
carrying value of an associate. Goodwill arising on the acquisition of
subsidiaries and jointly controlled entities is presented separately in the
balance sheet.
On disposal of a subsidiary, associate or jointly controlled entity, the
attributable amount of unamortised goodwill which has not been subject to
impairment is included in the determination of the profit and loss on disposal.
1.7 Impairment of non-financial assets
The entity assesses at each reporting date whether an asset may be impaired. If
any such indicator exists the entity tests for impairment by estimating the
recoverable amount. If the recoverable amount is less than the carrying value
of an asset an impairment loss is required. In addition to this, assets with
indefinite lives and goodwill are tested for impairment at least annually.
1.8 Inventories
Inventories are valued at the lower of cost and net realisable value. Cost is
determined on a first in, first out basis. Net realisable value is the
estimated selling price in the ordinary course of business, less applicable
variable selling expenses.
1.9 Financial Instruments
Financial assets and financial liabilities are recognised on the group's
balance sheet when the group has become a party to the contractual provisions
of the instrument.
1.10 Trade receivables
Trade receivables are stated at their nominal value as reduced by appropriate
allowances for estimated irrecoverable amounts.
1.11 Share capital
Ordinary shares are classified as equity. Redeemable shares are classified as
liabilities.
Incremental costs directly attributable to the issue of new shares or options
are shown in equity as a deduction, net of tax, from the proceeds.
1.12 Share Options
The share option programme allows certain directors to acquire shares in the
company subject to performance criteria. The fair value options are recognised
as an employee expense with a corresponding increase in equity. The fair value
of the option at the grant date is measured using the market value.
The directors consider that no charge should be made in the 31st December 2006
financial statements, as currently they feel the conditions for exercising the
options will not be met.
1.13 Trade payables
Trade payables are recognised initially at fair value and subsequently measured
at amortised cost using the effective interest method.
LENNOX HOLDINGS PLC
YEAR ENDED 31 DECEMBER 2006
NOTES TO THE FINANCIAL STATEMENTS
1. PRINCIPAL ACCOUNTING POLICIES - continued
1.14 Borrowings
Borrowings are recognised initially at fair value, net of transaction costs
incurred. Borrowings are subsequently stated at amortised cost; any difference
between the proceeds (net of transaction costs) and the redemption value is
recognised in the income statement over the period of the borrowings using the
effective interest method.
Borrowings are classified as current liabilities unless the group has an
unconditional right to defer settlement of the liability for at least 12 months
after the balance sheet date.
1.15 Finance and Operating Leases
Leases in which a significant portion of the risks and rewards of ownership are
retained by the leesor are classified as operating leases. Payments made under
operating leases are charged to the income statements on a straight line basis
over the term of the lease.
Leasing agreements, which transfer to the group substantially all the benefits
and risks of ownership of an asset, are treated as if the asset had been
purchased outright. The assets are included in fixed assets and the capital
element is applied to reduce the outstanding obligations and the interest
element is charged against profit so as to give a constant periodic rate of
charge on the remaining balance outstanding at each accounting period.
1.16 Convertible loan stock
Convertible loan stock is regarded as a compound instrument, consisting of a
liability component and an equity component. At the date of issue, the fair
value of the liability component is estimated using the prevailing market
interest rate for similar non-convertible debt. The difference between the
proceeds of the issue and the convertible loan stock and the fair value
assigned to the liability component, representing the embedded option to
convert the liability into equity of the group, is included in capital reserves
(equity).
The interest expense of the liability component is calculated by applying the
prevailing market rate similar non-convertible debt to the instrument. The
difference between this amount and the interest paid is added to the carrying
value of the convertible debt.
1.17 Deferred Taxation
The charge for current tax based on the results for the year as adjusted for
items which are non-assessable or disallowed. It is calculated using the rates
that have been enacted or substantively enacted by the balance sheet date.
Deferred tax is accounted for using the balance sheet liability method in
respect of temporary differences arising from differences between the carrying
amount of assets and liabilities in the financial statements and the
corresponding tax basis used in the computation of taxable profit. In
principle, deferred tax liabilities are recognised for all taxable temporary
differences and deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which deductible
temporary differences can be utilised. Such assets and liabilities are not
recognised if the temporary difference arises from goodwill or from initial
recognition of other assets and liabilities in a transaction which affects
neither the tax profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences
arising on investments in subsidiaries, except where the group is able to
control the reversal of the temporary difference and it is probable that the
temporary difference will not reverse in the foreseeable future.
LENNOX HOLDINGS PLC
YEAR ENDED 31 DECEMBER 2006
NOTES TO THE FINANCIAL STATEMENTS
1. PRINCIPAL ACCOUNTING POLICIES - continued
1.17 Deferred Taxation - continued
Deferred tax is calculated at the rates that are expected to apply when the
asset or liability is settled. Deferred tax is charged or credited to the
income statement, except when it relates to items credited or charged directly
to equity, in which case the deferred tax is also dealt with in equity.
1.18 Revenue recognition
Revenue comprises the fair value of the consideration received or receivable
for the sale of goods and services in the ordinary course of the group's
activities. Revenue is shown net of value added tax, returns, rebates and
discounts after eliminating sales within the group.
2. SEGMENTAL INFORMATION
Geographical segments
The groups' main business segments operate in two main geographical areas.
The home country of the company is the UK. The areas of operation are
principally the distribution of branded and own label British food and drink
products.
The groups' revenue is mainly within the UK and Spain.
Revenue 2006 � 2005 �
'000 '000
UK 11 -
Europe 7,080 9,779
Other - -
7,091 9,779
Revenue is allocated based on the country in which the
customer is located
Total assets 2006 � 2005 �
'000 '000
UK 34 -
Europe 1,951 1,952
Other - -
1,985 1,952
Total assets are allocated based on where the assets are
located
Capital expenditure 2006 � 2005 �
'000 '000
UK 39 -
Europe 122 433
Other - -
161 433
Capital expenditure is allocated based on where the assets
are located.
LENNOX HOLDINGS PLC
YEAR ENDED 31 DECEMBER 2006
NOTES TO THE FINANCIAL STATEMENTS
3. EMPLOYEE INFORMATION
Group Company Group Company
�'000 �'000 �'000 �'000
2006 2006 2005 2005
Staff Costs
Wages and salaries 1,610 98 851 55
Social security costs 393 12 231 7
Pension costs - - - -
2,003 110 1,082 62
Average number of employees 2006 2005
Administration 33 23
Sales 19 16
Warehouse 19 18
Distribution 18 17
89 74
4. OPERATING PROFIT
2006 2005
�'000 �'000
Operating profit is stated after
charging:
Depreciation charge for period 107 128
Staff costs 2,003 1,082
Auditors' remuneration 27 60
Rentals under operating leases:
Land and buildings 80 58
5. FINANCE INCOME AND COSTS
2006 2005
�'000 �'000
Interest expense:
Bank borrowings (109) (88)
(109) (88)
Finance income - interest income on 67 -
short-term bank deposits
(42) (88)
LENNOX HOLDINGS PLC
YEAR ENDED 31 DECEMBER 2006
NOTES TO THE FINANCIAL STATEMENTS
6. TAX ON PROFIT ON ORDINARY ACTIVITIES
2006 2005
�'000 �'000
Operating profit is stated after charging:
United Kingdom corporation tax at 30% - -
- -
No taxation is due on the results for the year due to the availability of tax
losses in the current year.
7. DIVIDENDS
Group and company 2006 � 2005 �
'000 '000
Interim paid: 1.35p per 10p share - 154
- 154
8. EARNINGS PER ORDINARY SHARE
Basic earnings per share are calculated by dividing the profit attributable to
equity holders of the company by the weighted average number of ordinary shares
in issue during the year.
2006 2005
(Loss) attributable to equity holders of the company (2,434,736) (1,587,000)
Weighted average number of ordinary shares in issue
Shares in issue for full year 24,201,652 24,201,652
Issued on 2 May 2006 (2,450,000 x 243/365) 1,631,096 -
Number of shares 25,832,748 24,201,652
Earnings per ordinary share of 1p (2005: 10p) (9.4)p (6.6)p
2006 2005
(Loss) attributable to equity holders of the company (2,434,736) (1,587,000)
Weighted average number of ordinary shares in issue 25,832,748 24,201,652
Adjustments for:
- assumed conversion of convertible loan stock 27,166,000 -
- share options 12,000,000 -
- warrants 31,278,617 -
Weighted average number of ordinary shares for 96,277,365 24,201,652
diluted earning per share
Diluted earnings per ordinary share of 1p (2005: (2.5)p (6.6)p
10p)
LENNOX HOLDINGS PLC
YEAR ENDED 31 DECEMBER 2006
NOTES TO THE FINANCIAL STATEMENTS
9. GOODWILL
The company has no intangible fixed assets. Details of those relating to the
group are as follows:-
Goodwill �'000
Cost
At 31 December 2005 and 31 December 2006 1
Net Book Value
At 31 December 2005 and 31 December 2006 1
10. PROPERTY PLANT AND EQUIPMENT
Group Freehold Vehicles Fixtures, Total �
Property �'000 Fittings '000
�'000 and
Equipment
�'000
Cost
As at 1 January 2006 1,692 181 211 2,084
Exchange adjustments (21) - - (21)
Additions - 99 62 161
Disposals - - (4) (4)
At 31 December 2006 1,671 280 269 2,220
Accumulated Depreciation
As at 1 January 2006 30 45 57 132
Charge for the year 23 30 54 107
Eliminated on disposals - - (4) (4)-
At 31 December 2006 53 75 107 235
Net Book Value
At 31 December 2006 1,618 205 162 1,985
At 31 December 2005 1,662 136 154 1,952
The net book value of tangible fixed assets includes an amount of �108,295
(2005: �92,220) in respect of assets held under finance leases and hire
purchase contracts.
The freehold property figure of �1,618,000 relates to the property at Benissa,
Spain, an asset of European Supplies S.L. This was valued at �2,498,205 by Alia
Tasaciones on 18th May 2006.
LENNOX HOLDINGS PLC
YEAR ENDED 31 DECEMBER 2006
NOTES TO THE FINANCIAL STATEMENTS
10. PROPERTY PLANT AND EQUIPMENT - Continued
Company Vehicles Total �
�'000 '000
Cost
As at 1 January 2006 - -
Additions 47 47
Disposals - -
At 31 December 2006 47 47
Accumulated Depreciation
As at 1 January 2006 - -
Charge for the year 9 9
Eliminated on disposals - -
At 31 December 2006 9 9
Net Book Value
At 31 December 2006 38 38
At 31 December 2005 - -
11. INVESTMENTS IN SUBSIDIARIES
Company: Interests in group undertakings 2006 � 2005 �
'000 '000
As at 1 January 1,500 9,241
Impairment provision made in year - (7,741)
At 31 December 1,500 1,500
In the previous year an impairment provision was calculated to reduce the value
of investment in subsidiaries to �1.5 million.
LENNOX HOLDINGS PLC
YEAR ENDED 31 DECEMBER 2006
NOTES TO THE FINANCIAL STATEMENTS
11. INVESTMENTS IN SUBSIDIARIES - continued
Name of Undertaking Country of Description of Proportion Principal
Incorporation Shares Held of Nominal Activity
Value of
Shares
Held
Farm Holdings Guernsey 1,000 shares of �1 100% Holding
Limited each company
European Supplies England 1 shares of �1 100% Freight
Logistics Limited each transportation
Owned by Farm Holdings Limited:
European Supplies Spain 100 shares of 100% Food
S.L. 5,000 ptas each distribution
Mediterranean Spain 3,006 shares of Euro1 100% Food
Supplies S.L. each distribution
Milenio Foods S.L. Spain 60 shares of 100% Food
10,000 ptas each distribution
12. INVENTORIES
Group Company Group Company
2006 � 2006 �'000 2005 � 2005 �'000
'000 '000
Goods held for resale 1,156 - 1,546 -
13.TRADE AND OTHER RECEIVABLES
Group Company Group Company
2006 � 2006 �'000 2005 � 2005 �'000
'000 '000
Trade debtors 1,837 - 2,448 -
Amount owed by group - 2,113 - -
undertakings
Other debtors 104 10 58 15
Prepayments and accrued income 49 7 9 9
1,990 2,130 2,515 24
LENNOX HOLDINGS PLC
YEAR ENDED 31 DECEMBER 2006
NOTES TO THE FINANCIAL STATEMENTS
14. TRADE AND OTHER PAYABLES
Group Company Group Company
2006 � 2006 �'000 2005 � 2005 �'000
'000 '000
Amounts owed to group - - - 162
undertakings
Trade creditors 1,227 124 1,989 123
Accruals and deferred income 491 104 248 130
Other creditors 211 48 15 15
1,929 276 2,252 430
15. OTHER NON-CURRENT LIABILITIES
Group Company Group Company
2006 � 2006 �'000 2005 � 2005 �'000
'000 '000
Tax liabilities 606 - - -
606 - - -
The tax liability is secured by a fixed charge on the freehold property.
16. BORROWINGS
Group Company Group Company
2006 � 2006 �'000 2005 � 2005 �'000
'000 '000
Non Current
Bank loans 899 - 990 -
Finance lease obligations 38 22 20 -
937 22 1,010 -
Current
Bank overdraft - - - -
Bank borrowings 51 - 67 -
51 - 67 -
Finance lease obligations 39 10 53 -
90 10 120 -
Total borrowings 1,027 32 1,130 -
LENNOX HOLDINGS PLC
YEAR ENDED 31 DECEMBER 2006
NOTES TO THE FINANCIAL STATEMENTS
16. BORROWINGS - Continued
Group Company Group Company
2006 � 2006 � 2005 � 2005 �'000
'000 '000 '000
On demand or written one 90 10 120 -
year notice
1 - 2 years 138 10 96 -
3 - 5 years 212 12 229 -
After five years 587 - 685 -
1,027 32 1,130 -
Group - Analysis of borrowings by currency
2006 � 2005 �
'000 '000
Pounds - -
Euros 950 1,057
950 1,057
The loan is payable in 162 monthly instalments starting 1st March 2006. The
total facility available is Euro1,500,000 (�1,032,000 at Balance Sheet exchange
rate) of which all has been drawn down at 31st December 2005. Interest is
payable at 0.75% above EURIBOND rate. The first 18 months repayments are
interest only. The loan is secured by a fixed charge on the freehold property.
17. OBLIGATIONS UNDER FINANCE LEASES
Minimum lease Present value of
payments minimum lease
payments
2006 � 2005 � 2006 � 2005 �
'000 '000 '000 '000
Amounts payable under finance leases
Within one year 45 55 39 53
In second to fifth years 44 21 38 20
89 76 77 73
Less: future finance charges (12) (3)
Present value of lease obligations 77 73
Less: Amounts due for settlement within (39) (53)
12 months
Amounts due for settlement after 12 38 20
months
LENNOX HOLDINGS PLC
YEAR ENDED 31 DECEMBER 2006
NOTES TO THE FINANCIAL STATEMENTS
18. CONVERTIBLE LOAN STOCK
Group Company Group Company
2006 � 2006 �'000 2005 � 2005 �'000
'000 '000
Convertible loan stock 2,717 2,717 - -
2,717 2,717 - -
On the 2nd May 2006 and 27th July 2006 the company issued �2,695,000 of
convertible loan stock. The loan stock is convertible at the holder's option at
any time until 31st July 2011 at the rate of one ordinary share for every 10p
nominal value of stock. In addition, subscribers of stock received one warrant
for every 10p nominal of stock subscribed, which entitled the holder to
subscribe for one ordinary share at a price of 1p per share for each warrant
held, at any time in the three years commencing 1st August 2006. The
subscribers to the new shares issued during the year also received one warrant
for every share subscribed with similar rights to the subscribers of stock.
Interest will accrue from May 2007 at a fixed rate of 8% per annum, payable
quarterly in arrears. The company will repay the loan stock to holders on the
earlier of the liquidation of the company or 31st July 2011 at 15p per 10p
nominal stock plus outstanding interest unless previously converted or repaid.
�21,600 of the convertible redeemable secured loan stock was issued during the
year in lien of �15,200 of salary sacrificed by Ray Greenwood and Rolf Silver,
and �6,400 of fees sacrificed by Nigel Terry. This management loan stock has
216,000 warrants attached to subscribe for ordinary shares, on the same basis
as the loan stock.
The values of the liability component as equity conversion component were
calculated at the issue of the stock. The fair liability of the liability
component was calculated using a market interest rate of 10%.
The directors consider the equity element to be worthless, as all the proceeds
have been classed as a liability component.
No charge has been made in the 31st December 2006 financial statements but in
future years there will be a considerable charge for the interest element and
the uplift in the agreement of 15p per 10p raised, unless stock holders convert
to equity.
The loan stock is secured by a debenture over the assets of the company, and a
charge over the group's freehold property in Benissa, Spain.
LENNOX HOLDINGS PLC
YEAR ENDED 31 DECEMBER 2006
NOTES TO THE FINANCIAL STATEMENTS
19. PROVISIONS
2006 � 2005 �
'000 '000
Restated
At 1 January 1,476 1,514
Prior year adjustment - (428)
Restated 1 January 1,476 1,086
Additional provision - 390
Provision utilised (1,476) -
At 31 December - 1,476
The provisions relate to potential Spanish tax liabilities identified in the
previous year. The amount payable has now been agreed with the Spanish tax
authorities, and the prior year adjustment relates to a reduction in this
amount.
20. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The group is exposed to credit, liquidity and currency risks in its normal
course of business. There is no significant exposure to interest risk as the
group whilst having material borrowings has tied these borrowings to the
Euribor. Based upon the composition of the borrowings at 31 December 2006, an
increase in interest rates of 0.5% would increase costs by circa �5,000.
Currencyrisk
Exchange risk is not currently hedged with the group, due to the availability
of funds, and all exchange transactions are at spot rates. This area will be
addressed by the company when it is practically possible.
Credit risk
Exposure to credit risk associated with trade receivables is monitored on an
ongoing basis by the local credit control teams with close involvement of the
finance department. The majority of the receivables are held with customers
whom have a long standing trading relationship with the company. Provisions are
made against doubtful trade receivables, and reviewed on a monthly basis.
Liquidity risk
Liquidity risk is managed by a review of monthly reports within the group.
LENNOX HOLDINGS PLC
YEAR ENDED 31 DECEMBER 2006
NOTES TO THE FINANCIAL STATEMENTS
21. SHARE CAPITAL
2006 � 2005 �
'000 '000
Authorised
200,000,000 ordinary shares of 1p each 2,000 -
800,000,000 deferred shares of 1p each 8,000 -
100,000,000 ordinary shares of 10p each - 10,000
10,000 10,000
Number of 2006 � 2005 �
shares '000 '000
Allotted, called up and fully paid
Ordinary 10p shares
As at 1 January 24,201,652 2,420 2,420
Issued during the year 2,450,000 245 -
As at 26 July 26,651,652 2,665 2,420
Subdivision of 10p ordinary shares (26,651,652) (2,665)
- - 2,420
Ordinary 1p shares 26,651,652 266 -
Deferred 1p shares 239,864,868 2,399 -
266,516,520 2,665 2,420
On the 26th July 2006 the company reduced the nominal value of the ordinary
shares from the present value of 10p per share.
Each ordinary share was subdivided into:
* One new ordinary share (with a nominal value of 1p), and
* Nine deferred shares (with a nominal value of 1p)
The company currently has in issue 26,651,652 ordinary shares of 1p each, with
each share carrying the right to vote and 239,864,868 deferred shares of 1p
each, which carry no right to receive notice of or to attend or to vote at any
general meeting of the company, or to receive any dividends or other
distributions. They carry the right to participate in any return of capital on
liquidation to the extent of 1p per share but only after each ordinary share
has received in aggregate capital repayments totalling �100,000 per share.
J.M Finn & Co has warrants to subscribe for 922,975 ordinary shares at 5.5p per
share and 922,975 shares at 10p per share taking the closing prices at 2nd May
2006 and 14th June 2006.
266,667 warrants to subscribe for 266,667 ordinary shares at 45p per share are
also held by Keith, Bayley, Rogers and Co Limited.
LENNOX HOLDINGS PLC
YEAR ENDED 31 DECEMBER 2006
NOTES TO THE FINANCIAL STATEMENTS
22. SHARE OPTIONS
The group granted share options to certain directors on 26th July 2006. The
option price granted is 10p per share, the share options currently in issue
vest between three and six years from the date of the grant. The 8,000,000
options that vest from 26th July 2008 are only exercisable after the company
has reported fully diluted earnings per share of 1p per share. The 4,000,000
options that vest from 26th July 2009 are only exercisable after the company
has reported fully diluted earnings per share of 2p per share. The share price
at grant date was 4.5p.
No charge has been made in the accounts as the directors consider the
conditions for exercising the options will not be met.
Average Options
exercise (thousands)
price in
� per
share
At 1 January 2006 - -
Granted 0.10 12,000
Forfeited - -
Exercised - -
Expired - -
At 31 December 2006 0.10 12,000
23. SHARE PREMIUM ACCOUNT
Group and company 2006 �
'000
At 1 January 2006 6,971
Costs incurred on the issue of shares (156)
At 31 December 2006 6,815
24. RETAINED EARNINGS
2006 �
'000
As at 1 January 2006 (8,525)
Prior year adjustment 428
(8,097)
Dividends paid -
Net loss for the year (2,435)
(10,532)
Goodwill Impairment -
Exchange differences 47
Retained earnings 31 December 2006 (10,485)
LENNOX HOLDINGS PLC
YEAR ENDED 31 DECEMBER 2006
NOTES TO THE FINANCIAL STATEMENTS
25. CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE
2006 2005
�'000 �'000
Exchange difference on consolidation 47 2
Goodwill impairment losses - (5,306)
Net income/ (expense) recognised directly in equity 47 (5,304)
Loss for the year (2,435) (1,741)
Total recognised income/ (expense) for the year (2,388) (7,045)
Attributable to:
Equity holders of the company (2,388) (7,045)
26. FINANCIAL COMMITMENTS
At 31st December 2006 the group had annual commitments under non-cancellable
operating leases as follows:-
Land and Buildings
2006 � 2005 �
'000 '000
Expiring within one year - 36
Expiring between two and five years - 22
Expiring after more than five years - -
- 58
LENNOX HOLDINGS PLC
YEAR ENDED 31 DECEMBER 2006
NOTES TO THE FINANCIAL STATEMENTS
27. NOTES TO THE CASH FLOW STATEMENT
2006 � 2005 �
'000 '000
Operating profit from continuing operations (2,435) (1,587)
Adjustments for:
Depreciation of property, plant and equipment 107 128
Foreign exchange adjustments 68 48
Interest income (67) -
Interest expense 109 88
Operating cash flows before movements in working capital (2,218) (1,323)
Taxation paid (364) -
(Increase)/decrease in inventories 390 110
(Increase)/decrease in receivables 525 (346)
Increase/(decrease) in payables (323) 1,675
Increase/(decrease) in provisions (480) -
Cash generated by operations (2,470) 116
Interest net (42) (88)
NET CASH FROM OPERATING ACTIVITIES (2,512) 28
28. RELATED PARTY TRANSACTIONS
During the year the group paid consultancy fees of �33,600 to Redbrook
Associates, a partnership in which Nigel Terry is a partner.
During the year the group paid storage fees of �3,430 to Riverside Holdings
Limited, a company in which Ray Greenwood is a director.
The group also made purchases from Riverside Holdings Limited totalling �
127,072. At the year end �8,749 was owing to Riverside Holdings Limited.
There were no other related party transactions during the year which require
disclosure.
29. BUSINESS COMBINATIONS
On the 26th January 2006 the group acquired 100% of the share capital in
European Supplies Logistics Limited, a freight distribution company operating
in the UK. European Supplies Logistics Limited is a newly incorporated company.
The acquired business contributed revenues of �11,120 and a net loss of �
140,141 to the group for the period 26th January 2006 to 31st December 2006.
These amounts have been calculated using the groups accounting policies.
LENNOX HOLDINGS PLC
YEAR ENDED 31 DECEMBER 2006
NOTES TO THE FINANCIAL STATEMENTS
30. EVENTS AFTER THE BALANCE SHEET DATE
a. In June 2006 the company successfully negotiated settlement of certain
warranty and other claims with the original vendors of the company.
The original vendors have agreed to surrender a total of 5,704,108 shares of
10p each. Of these 3,779,107 will be cancelled and the remaining 1,925,001
surrendered to the company.
The details are as follows:
P Voller/Farm Holdings (Spain) Limited 3,204,108
D Franks 1,000,000
S Robinson 500,000
J. L Tedesco 500,000
R Burns 500,000
5,704,108
As at the balance sheet date the shares had not been cancelled as the company
had insufficient funds to finance the cancellation of the shares.
b. On the 17th January 2007 the company announced that Ray Greenwood, managing
director had decided to retire from the board. Nigel Terry, executive
chairman will assume his responsibilities.
c. David L Read, an individual has purchased 3,850,000 ordinary shares,
representing 14.45% of the company's issued share capital since the year
end. The directors have received no approaches from any party.
d. The company has secured new banking facilities with Bank Popular. Bank
Popular will initially advance up to Euro500,000 in respect of certain
debtors, and it is proposed that a wider invoice discounting facility will
be available over time.
31. GOING CONCERN
The continuation of the group's activities is dependent upon the continued
support of the bank, its creditors and the group's improving trading
performance. The group have put in place a cost reduction process which
includes a reduction in its payroll commitments. The directors are currently
negotiating an invoice discounting facility which will provide the additional
working capital required to provide the forecasted return to profitability.
END
Lennox (LSE:LNX)
과거 데이터 주식 차트
부터 4월(4) 2024 으로 5월(5) 2024
Lennox (LSE:LNX)
과거 데이터 주식 차트
부터 5월(5) 2023 으로 5월(5) 2024
