TIDMLTS
RNS Number : 4965R
Litho Supplies PLC
30 April 2009
30 April 2009
LITHO SUPPLIES Plc
Preliminary Results for the year ended 31 December 2008
HIGHLIGHTS
Litho Supplies Plc, the leading supplier of consumable products, analogue and
digital equipment and related services to the printing, graphic arts and
corporate markets in the UK, announces its results for the year ended 31
December 2008
Overview:
* Sales of GBP49.16m (2007: GBP43.25m)
* Pre-tax loss before reorganisation costs of GBP0.85m (2007 : profit GBP0.73m )
* Re-organisation programme continues in order to reduce overheads in response to
economic and trading conditions
* New banking facilities agreed, increasing headroom.
Litho Supplies Chief Executive Michael Hammond said:
"Market conditions have been extremely challenging in the year and have
continued in the first half of 2009. The board has responded by ensuring the
business is well positioned for the upturn, when it comes. The board is united
with the management team in its determination to bring the business back into
profit as quickly as possible".
Contacts:
Litho Supplies Plc Tel: 01332 873921
Michael Hammond, Chief Executive
Simon Wellings, Financial Director
Blue Oar Securities Plc Tel: 0207 448 4437
Andrew Raca
CHAIRMAN'S STATEMENT
Results for the Year Ended 31 December 2008
The audited results for the year ended 31 December 2008 show a pre-tax loss
before reorganisation costs of GBP0.85m ( 2007 : profit GBP0.73m ) on sales for
the year of GBP49.16m (2007 : GBP43.25m ).
Reorganisation charges were GBP0.69m ( 2007 : GBP0.21m ) and the pre-tax loss
for the year after these charges was GBP1.54m ( 2007 : profit GBP0.52m ).
Basic losses per share ( 2007 : earnings per share EPS ), before and after
reorganisation charges, were (3.85p) ( 2007 : EPS 3.31p ) and (6.98p) ( 2007 :
EPS (2.33p) ) respectively.
Since my half year statement on 29th August 2008 the company has issued two
trading statements, one on 19th November 2008 and one on 24th February 2009,
setting out the difficulties being encountered within the printing industry -
and forewarning shareholders - that the business would not declare a profit in
2008.
Given that the decline in business in the second half of the year was much
steeper than originally anticipated at the beginning of the year the board
responded by pursuing the reorganisation programme even more vigorously as the
year progressed, continuing into 2009 up to the present date.
Our recovery has not been helped by the banking crisis coming at a time when our
resources are under pressure from static sales and falling margins. Furthermore,
the weakness of sterling is impacting on our buying prices of products imported
from abroad which, due to the recession, we are only partly successful in
passing on to our customers. Indeed, many of these customers are experiencing
financial difficulties and have been forced out of business leaving us with a
greater number of bad debts than for many years.
However, the board is resolute in its efforts to maintain a strong balance
sheet. A continued focus has been given to undertaking up front credit
assessments for new customers and continuing the policy of assessing the credit
ratings of all customers on an ongoing basis. In addition we have maintained our
concentration on collecting cash within normal credit terms as well as keeping a
tight control of stock levels within the business.
Having invested our cash reserves in the acquisitions of Graphica Plus Limited
on 23 October 2007 and Graphic Arts Equipment Limited on 24 January 2008, both
of which were necessary for the continued growth of the business, the cash
balance at 31 December 2008 was overdrawn at GBP1.227m compared to a credit
balance of GBP3.543m at 31 December 2007.
So, given the cash position of the business and the loss for the year, the board
will not be recommending a final dividend for 2008 ( 2007 : 1.25p ). A
restoration of the dividend will be uppermost in the minds of the board but we
will not compromise our resolve to build up the balance sheet.
Trading performance
Sales amounted to GBP49.16m ( 2007 : GBP43.25m ) with the increased turnover
coming from the two acquisitions.
With overcapacity in the printing industry some of our margins came under
greater pressure and this is reflected in the figures for 2008.
Sales of digital electronic equipment declined in 2008 and with many customers
content to continue with their existing equipment, whilst finding it difficult
to obtain cash to buy new equipment, we took the decision to stop selling
digital equipment at the end of 2008 resulting in a one-off write down on
inventories which has impacted on the loss for the year.
We are pleased with the continued increase in the number of online orders being
placed and the increased efficiencies this brings has helped with our
reorganisation.
Telesales has also seen some growth in 2008 and margins on this method of
selling have held up well.
Reorganisation
As a result of the downturn in business we have accelerated our reorganisation
plans given the urgent need to further reduce overheads.
The installation of a new computer system during 2008 has enabled us to move to
a more centralised operation with our central administration and accounting
functions now based at Breaston in Derbyshire.
The reorganisation of the business throughout 2008 has regrettably resulted in a
large reduction in the numbers employed within the business but we shall benefit
from the cost savings in 2009 having taken the adverse effect of redundancy
costs in 2008, a further but necessary drain on our cash resources.
Pension Scheme
The decline in stock markets around the world affecting the value of
investments, further reductions in government bond yields and yet further
increases in longevity projections from the actuarial profession, continue to
affect the calculation of the deficit. However, the company continued to make
contributions throughout 2008 towards an agreed long- term plan to address the
funding shortfall.
Prospects
There is no doubt that for the majority of our businesses 2008 was a difficult
year.
We have though been very active in addressing the various issues facing the
business.
By reducing the cost base of the business and by continuing pressure to pass on
price increases to our customers we are being aggressive in making every effort
to recover and improve the margins which suffered in 2008.
While there is considerable uncertainty even from the major economic
forecasters for the reminder of the year, I believe that the significant
progress we have made in reshaping the business during the past year should put
us in a position where we should start to see some improvement in our results in
the second half of 2009.
More immediately however, sales since the beginning of 2009 are still following
the trend of the last quarter of 2008 and we have regrettably had to announce
further redundancies in January and again in March.
In other areas we have served notice to terminate leases on two of our premises
and we will amalgamate the business at neighbouring sites.
The board is united with the management team in its determination to bring the
business back into profit as quickly as possible.
On a more optimistic note, I am pleased to report that we have now agreed new
banking arrangements which gives the business more headroom to meet the costs of
the ongoing reorganisation - vitally necessary to keep pace with unprecedented
trading conditions.
As always we appreciate the ongoing support of our suppliers, our customers,
our bankers and our shareholders.
Finally, I have personally thanked all of our people for their efforts in
helping the business through this difficult period. Their loyal support and hard
work is appreciated. Their support and hard work is vitally important for the
Company and is very much appreciated.
Bernard Clark
Chairman
30 April 2009
Consolidated Income Statement
for the year ended 31 December 2008
+----------------------------------+----------+---+--------------+---+--------------+
| | Notes | | 2008 | | 2007 |
+----------------------------------+----------+---+--------------+---+--------------+
| | | | GBP'000 | | GBP'000 |
+----------------------------------+----------+---+--------------+---+--------------+
| | | | | | |
+----------------------------------+----------+---+--------------+---+--------------+
| Continuing operations | | | | | |
+----------------------------------+----------+---+--------------+---+--------------+
| | | | | | |
+----------------------------------+----------+---+--------------+---+--------------+
| Revenue | 2 | | 49,159 | | 43,254 |
+----------------------------------+----------+---+--------------+---+--------------+
| Cost of sales | 5 | | 42,565 | | 36,599 |
+----------------------------------+----------+---+--------------+---+--------------+
| Gross profit | | | 6,594 | | 6,655 |
+----------------------------------+----------+---+--------------+---+--------------+
| | | | | | |
+----------------------------------+----------+---+--------------+---+--------------+
| Distribution costs | | | 2,985 | | 2,235 |
+----------------------------------+----------+---+--------------+---+--------------+
| Administrative expenses | | | 4,386 | | 3,888 |
+----------------------------------+----------+---+--------------+---+--------------+
| Reorganisation costs | 4 | | 693 | | 211 |
+----------------------------------+----------+---+--------------+---+--------------+
| | | | | | |
+----------------------------------+----------+---+--------------+---+--------------+
| (Loss)/Profit from continuing | | | | | |
| operations before tax | | | | | |
+----------------------------------+----------+---+--------------+---+--------------+
| and net finance income | | | (1,470) | | 321 |
+----------------------------------+----------+---+--------------+---+--------------+
| Finance costs | 5 | | 102 | | 1 |
+----------------------------------+----------+---+--------------+---+--------------+
| Finance income | 5 | | 31 | | 198 |
+----------------------------------+----------+---+--------------+---+--------------+
| | | | | | |
+----------------------------------+----------+---+--------------+---+--------------+
| (Loss)/Profit before tax | | | (1,541) | | 518 |
+----------------------------------+----------+---+--------------+---+--------------+
| Income tax credit | 6 | | (264) | | (6) |
+----------------------------------+----------+---+--------------+---+--------------+
| | | | | | |
+----------------------------------+----------+---+--------------+---+--------------+
| | | | | | |
+----------------------------------+----------+---+--------------+---+--------------+
| (Loss)/Profit for the year | | | (1,277) | | 524 |
+----------------------------------+----------+---+--------------+---+--------------+
| Attributable to: | | | | | |
+----------------------------------+----------+---+--------------+---+--------------+
| Equity holders of the Company | | | (1,277) | | 501 |
+----------------------------------+----------+---+--------------+---+--------------+
| Minority interest | | | - | | 23 |
+----------------------------------+----------+---+--------------+---+--------------+
| | | | (1,277) | | 524 |
+----------------------------------+----------+---+--------------+---+--------------+
| | | | | | |
+----------------------------------+----------+---+--------------+---+--------------+
| Earnings per share from | 7 | | | | |
| continuing activities | | | | | |
+----------------------------------+----------+---+--------------+---+--------------+
| - basic | | | (6.95)p | | 2.33p |
+----------------------------------+----------+---+--------------+---+--------------+
| - diluted | | | (6.95)p | | 2.28p |
+----------------------------------+----------+---+--------------+---+--------------+
| | | | | | |
+----------------------------------+----------+---+--------------+---+--------------+
Consolidated Statement of Recognised Income and Expense
for the year ended 31 December 2008
+----------------------------------+----------+---+--------------+---+--------------+
| | Notes | | 2008 | | 2007 |
+----------------------------------+----------+---+--------------+---+--------------+
| | | | GBP'000 | | GBP'000 |
+----------------------------------+----------+---+--------------+---+--------------+
| | | | | | |
+----------------------------------+----------+---+--------------+---+--------------+
| Income and expense recognised | | | | | |
+----------------------------------+----------+---+--------------+---+--------------+
| directly in equity | | | | | |
+----------------------------------+----------+---+--------------+---+--------------+
| Actuarial (loss)/ gains for the | 23 | | (2,021) | | 1,834 |
| year | | | | | |
+----------------------------------+----------+---+--------------+---+--------------+
| Deferred tax credit/(charge) | 6c | | 566 | | (550) |
+----------------------------------+----------+---+--------------+---+--------------+
| Net (expense)/income recognised | | | (1,455) | | 1,284 |
| directly in equity | | | | | |
+----------------------------------+----------+---+--------------+---+--------------+
| (Loss)/ Profit for the year | | | (1,277) | | 524 |
+----------------------------------+----------+---+--------------+---+--------------+
| Total recognised (expense)/ | | | | | |
+----------------------------------+----------+---+--------------+---+--------------+
| Income for the year | | | (2,732) | | 1,808 |
+----------------------------------+----------+---+--------------+---+--------------+
| | | | | | |
+----------------------------------+----------+---+--------------+---+--------------+
| Attributable to: | | | | | |
+----------------------------------+----------+---+--------------+---+--------------+
| Equity holders of the company | | | (2,732) | | 1,785 |
+----------------------------------+----------+---+--------------+---+--------------+
| Minority interest | | | - | | 23 |
+----------------------------------+----------+---+--------------+---+--------------+
| | | | | | |
+----------------------------------+----------+---+--------------+---+--------------+
| | | | (2,732) | | 1,808 |
+----------------------------------+----------+---+--------------+---+--------------+
Consolidated Balance Sheet
at 31 December 2008
+---------------------------------------------+--+--------------+--+--------------+
| Notes | | 2008 | | 2007 |
+---------------------------------------------+--+--------------+--+--------------+
| | | GBP'000 | | GBP'000 |
+---------------------------------------------+--+--------------+--+--------------+
| Assets | | | | |
+---------------------------------------------+--+--------------+--+--------------+
| Non-current assets | | | | |
+---------------------------------------------+--+--------------+--+--------------+
| Property, plant and equipment 9 | | 973 | | 547 |
+---------------------------------------------+--+--------------+--+--------------+
| Intangible assets 10 | | 3,777 | | 2,393 |
+---------------------------------------------+--+--------------+--+--------------+
| Deferred tax asset 6c | | 1,895 | | 979 |
+---------------------------------------------+--+--------------+--+--------------+
| | | 6,645 | | 3,919 |
+---------------------------------------------+--+--------------+--+--------------+
| Current assets | | | | |
+---------------------------------------------+--+--------------+--+--------------+
| Inventories 14 | | 6,648 | | 4,437 |
+---------------------------------------------+--+--------------+--+--------------+
| Trade and other receivables 15 | | 9,704 | | 9,260 |
+---------------------------------------------+--+--------------+--+--------------+
| Income tax receivable | | 114 | | 208 |
+---------------------------------------------+--+--------------+--+--------------+
| Other current assets 16 | | 1,593 | | 1,284 |
+---------------------------------------------+--+--------------+--+--------------+
| Financial Instruments 20 | | 205 | | - |
+---------------------------------------------+--+--------------+--+--------------+
| Cash and cash equivalents 17 | | 402 | | 3,543 |
+---------------------------------------------+--+--------------+--+--------------+
| | | 18,666 | | 18,732 |
+---------------------------------------------+--+--------------+--+--------------+
| | | | | |
+---------------------------------------------+--+--------------+--+--------------+
| Total assets | | 25,311 | | 22,651 |
+---------------------------------------------+--+--------------+--+--------------+
| Equity | | | | |
+---------------------------------------------+--+--------------+--+--------------+
| Equity attributable to equity holders of | | | | |
| the parent | | | | |
+---------------------------------------------+--+--------------+--+--------------+
| Share capital 18 | | 2,219 | | 2,177 |
+---------------------------------------------+--+--------------+--+--------------+
| Share premium 18 | | 13,744 | | 13,587 |
+---------------------------------------------+--+--------------+--+--------------+
| Other reserves 18 | | 511 | | 511 |
+---------------------------------------------+--+--------------+--+--------------+
| Retained earnings | | (9,902) | | (6,791) |
+---------------------------------------------+--+--------------+--+--------------+
| | | 6,572 | | 9,484 |
+---------------------------------------------+--+--------------+--+--------------+
| Minority interest in equity | | - | | 23 |
+---------------------------------------------+--+--------------+--+--------------+
| Total equity | | 6,572 | | 9,507 |
+---------------------------------------------+--+--------------+--+--------------+
| | | | | |
+---------------------------------------------+--+--------------+--+--------------+
| Liabilities | | | | |
+---------------------------------------------+--+--------------+--+--------------+
| Non-current liabilities | | | | |
+---------------------------------------------+--+--------------+--+--------------+
| Interest bearing loans and borrowings 19 | | 73 | | - |
+---------------------------------------------+--+--------------+--+--------------+
| Retirement benefit obligation 23 | | 3,605 | | 2,531 |
+---------------------------------------------+--+--------------+--+--------------+
| | | 3,678 | | 2,531 |
+---------------------------------------------+--+--------------+--+--------------+
| Current liabilities | | | | |
+---------------------------------------------+--+--------------+--+--------------+
| Trade and other payables 21 | | 10,683 | | 9,263 |
+---------------------------------------------+--+--------------+--+--------------+
| Interest bearing loans and borrowings 19 | | 1,869 | | 2 |
+---------------------------------------------+--+--------------+--+--------------+
| Income tax payable | | 168 | | - |
+---------------------------------------------+--+--------------+--+--------------+
| Accruals and deferred income 24 | | 2,192 | | 1,348 |
+---------------------------------------------+--+--------------+--+--------------+
| Provisions for liabilities and charges 25 | | 149 | | - |
+---------------------------------------------+--+--------------+--+--------------+
| | | 15,061 | | 10,613 |
+---------------------------------------------+--+--------------+--+--------------+
| Total liabilities | | 18,739 | | 13,144 |
+---------------------------------------------+--+--------------+--+--------------+
| | | | | |
+---------------------------------------------+--+--------------+--+--------------+
| Total equity and liabilities | | 25,311 | | 22,651 |
+---------------------------------------------+--+--------------+--+--------------+
The accounts were approved by the Board on 29 April 2009 and authorised for
issue.
M J Hammond
Chief Executive
Company Balance Sheet
at 31 December 2008
+-----------------------------------+-------+--+---------------+--+------------------+
| | Notes | | 2008 | | 2007 |
+-----------------------------------+-------+--+---------------+--+------------------+
| | | | GBP'000 | | GBP'000 |
+-----------------------------------+-------+--+---------------+--+------------------+
| Assets | | | | | |
+-----------------------------------+-------+--+---------------+--+------------------+
| Non-current assets | | | | | |
+-----------------------------------+-------+--+---------------+--+------------------+
| Other financial assets | 13 | | 20,000 | | 20,000 |
+-----------------------------------+-------+--+---------------+--+------------------+
| | | | 20,000 | | 20,000 |
+-----------------------------------+-------+--+---------------+--+------------------+
| | | | | | |
+-----------------------------------+-------+--+---------------+--+------------------+
| Current assets | | | | | |
+-----------------------------------+-------+--+---------------+--+------------------+
| Other current assets | 16 | | 3 | | 184 |
+-----------------------------------+-------+--+---------------+--+------------------+
| Cash and cash equivalents | 17 | | 337 | | 293 |
+-----------------------------------+-------+--+---------------+--+------------------+
| | | | 340 | | 477 |
+-----------------------------------+-------+--+---------------+--+------------------+
| | | | | | |
+-----------------------------------+-------+--+---------------+--+------------------+
| Total assets | | | 20,340 | | 20,477 |
+-----------------------------------+-------+--+---------------+--+------------------+
| | | | | | |
+-----------------------------------+-------+--+---------------+--+------------------+
| Equity | | | | | |
+-----------------------------------+-------+--+---------------+--+------------------+
| Equity attributable to equity | | | | | |
+-----------------------------------+-------+--+---------------+--+------------------+
| holders of the parent | | | | | |
+-----------------------------------+-------+--+---------------+--+------------------+
| Share capital | 18 | | 2,219 | | 2,177 |
+-----------------------------------+-------+--+---------------+--+------------------+
| Share premium | 18 | | 13,744 | | 13,587 |
+-----------------------------------+-------+--+---------------+--+------------------+
| Other reserves | 18 | | 496 | | 496 |
+-----------------------------------+-------+--+---------------+--+------------------+
| Retained earnings | | | 3,725 | | 4,205 |
+-----------------------------------+-------+--+---------------+--+------------------+
| Total equity | | | 20,184 | | 20,465 |
+-----------------------------------+-------+--+---------------+--+------------------+
| Liabilities | | | | | |
| | | | | | |
+-----------------------------------+-------+--+---------------+--+------------------+
| Current liabilities | | | | | |
+-----------------------------------+-------+--+---------------+--+------------------+
| Accruals and deferred income | 24 | | 156 | | 12 |
+-----------------------------------+-------+--+---------------+--+------------------+
| | | | 156 | | 12 |
+-----------------------------------+-------+--+---------------+--+------------------+
| | | | | | |
+-----------------------------------+-------+--+---------------+--+------------------+
| Total liabilities | | | 156 | | 12 |
+-----------------------------------+-------+--+---------------+--+------------------+
| | | | | | |
+-----------------------------------+-------+--+---------------+--+------------------+
| Total equity and liabilities | | | 20,340 | | 20,477 |
+-----------------------------------+-------+--+---------------+--+------------------+
The accounts were approved by the Board on 29 April 2009 and authorised for
issue.
M J Hammond
Chief Executive
Consolidated Cash Flow
for the year ended 31 December 2008
+----------------------------------------+--------+--+--------------+--+--------------+
| | | | | | |
+----------------------------------------+--------+--+--------------+--+--------------+
| | Notes | | 2008 | | 2007 |
+----------------------------------------+--------+--+--------------+--+--------------+
| | | | GBP'000 | | GBP'000 |
+----------------------------------------+--------+--+--------------+--+--------------+
| | | | | | |
+----------------------------------------+--------+--+--------------+--+--------------+
| Cash flows from operating activities | | | | | |
+----------------------------------------+--------+--+--------------+--+--------------+
| Cash receipts from customers | | | 47,645 | | 45,074 |
+----------------------------------------+--------+--+--------------+--+--------------+
| Cash paid to suppliers and employees | | | (50,623) | | (45,057) |
+----------------------------------------+--------+--+--------------+--+--------------+
| Cash flows (used in)/from operations | | | (2,978) | | 17 |
+----------------------------------------+--------+--+--------------+--+--------------+
| Income tax repaid | | | 95 | | - |
+----------------------------------------+--------+--+--------------+--+--------------+
| Interest paid | | | (103) | | (1) |
+----------------------------------------+--------+--+--------------+--+--------------+
| | | | | | |
+----------------------------------------+--------+--+--------------+--+--------------+
| Net cash flows (used in)/from | | | (2,986) | | 16 |
| operating activities | | | | | |
+----------------------------------------+--------+--+--------------+--+--------------+
| | | | | | |
+----------------------------------------+--------+--+--------------+--+--------------+
| Cash flows from investing activities | | | | | |
+----------------------------------------+--------+--+--------------+--+--------------+
| Proceeds from sale of property, | | | 6 | | 12 |
| plant and equipment | | | | | |
+----------------------------------------+--------+--+--------------+--+--------------+
| Proceeds from sale of non-current | | | - | | 91 |
| assets held for sale | | | | | |
+----------------------------------------+--------+--+--------------+--+--------------+
| Interest received | | | 46 | | 216 |
+----------------------------------------+--------+--+--------------+--+--------------+
| Purchase of property, plant and | | | (417) | | (296) |
| equipment | | | | | |
+----------------------------------------+--------+--+--------------+--+--------------+
| Acquisitions net of cash acquired | | | (1,428) | | (683) |
+----------------------------------------+--------+--+--------------+--+--------------+
| Purchase of customer list | | | (65) | | - |
+----------------------------------------+--------+--+--------------+--+--------------+
| | | | | | |
+----------------------------------------+--------+--+--------------+--+--------------+
| Net cash flows used in investing | | | (1,858) | | (660) |
| activities | | | | | |
+----------------------------------------+--------+--+--------------+--+--------------+
| | | | | | |
+----------------------------------------+--------+--+--------------+--+--------------+
| | | | | | |
+----------------------------------------+--------+--+--------------+--+--------------+
| Cash flows from financing activities | | | | | |
+----------------------------------------+--------+--+--------------+--+--------------+
| Proceeds from issue of shares | | | 199 | | |
+----------------------------------------+--------+--+--------------+--+--------------+
| Finance lease | | | 253 | | - |
+----------------------------------------+--------+--+--------------+--+--------------+
| Payment of finance lease liabilities | | | (76) | | (4) |
+----------------------------------------+--------+--+--------------+--+--------------+
| Long term finance | | | 60 | | - |
+----------------------------------------+--------+--+--------------+--+--------------+
| Payment of long term finance | | | (17) | | |
+----------------------------------------+--------+--+--------------+--+--------------+
| Dividends paid to equity holders of | | | (379) | | (857) |
| the parent company | | | | | |
+----------------------------------------+--------+--+--------------+--+--------------+
| | | | | | |
+----------------------------------------+--------+--+--------------+--+--------------+
| Net cash flows used in financing | | | 40 | | (861) |
| activities | | | | | |
+----------------------------------------+--------+--+--------------+--+--------------+
| | | | | | |
+----------------------------------------+--------+--+--------------+--+--------------+
| Net decrease in cash and | | | (4,804) | | (1,505) |
| cash equivalents | | | | | |
+----------------------------------------+--------+--+--------------+--+--------------+
| Net cash and cash equivalents at 1 | 17 | | 3,543 | | 5,048 |
| January | | | | | |
+----------------------------------------+--------+--+--------------+--+--------------+
| | | | | | |
+----------------------------------------+--------+--+--------------+--+--------------+
| Net cash and cash equivalents at 31 | 17 | | (1,261) | | 3,543 |
| December | | | | | |
+----------------------------------------+--------+--+--------------+--+--------------+
| | | | | | |
+----------------------------------------+--------+--+--------------+--+--------------+
Company Cash Flow
for the year ended 31 December 2008
+----------------------------------------+--------+--+--------------+--+--------------+
| | | | | | |
+----------------------------------------+--------+--+--------------+--+--------------+
| | Notes | | 2008 | | 2007 |
+----------------------------------------+--------+--+--------------+--+--------------+
| | | | GBP'000 | | GBP'000 |
+----------------------------------------+--------+--+--------------+--+--------------+
| | | | | | |
+----------------------------------------+--------+--+--------------+--+--------------+
| Cash flows from operating activities | | | | | |
+----------------------------------------+--------+--+--------------+--+--------------+
| Cash receipts from customers | | | 275 | | 45 |
+----------------------------------------+--------+--+--------------+--+--------------+
| Cash paid to suppliers and employees | | | - | | (939) |
+----------------------------------------+--------+--+--------------+--+--------------+
| Cash flows generated from operations | | | 275 | | 894 |
+----------------------------------------+--------+--+--------------+--+--------------+
| Interest paid | | | (77) | | - |
+----------------------------------------+--------+--+--------------+--+--------------+
| | | | | | |
+----------------------------------------+--------+--+--------------+--+--------------+
| Net cash flows from operating | | | 198 | | 894 |
| activities | | | | | |
+----------------------------------------+--------+--+--------------+--+--------------+
| | | | | | |
+----------------------------------------+--------+--+--------------+--+--------------+
| Cash flows from investing activities | | | | | |
+----------------------------------------+--------+--+--------------+--+--------------+
| Interest received | | | 26 | | 200 |
+----------------------------------------+--------+--+--------------+--+--------------+
| | | | | | |
+----------------------------------------+--------+--+--------------+--+--------------+
| Net cash flows from investing | | | 26 | | 200 |
| activities | | | | | |
+----------------------------------------+--------+--+--------------+--+--------------+
| | | | | | |
+----------------------------------------+--------+--+--------------+--+--------------+
| | | | | | |
+----------------------------------------+--------+--+--------------+--+--------------+
| Cash flows from financing activities | | | | | |
+----------------------------------------+--------+--+--------------+--+--------------+
| Proceeds from issue of shares | | | 199 | | 200 |
+----------------------------------------+--------+--+--------------+--+--------------+
| Dividends paid to equity holders | | | (379) | | (857) |
+----------------------------------------+--------+--+--------------+--+--------------+
| | | | | | |
+----------------------------------------+--------+--+--------------+--+--------------+
| Net cash flows used in financing | | | (180) | | (657) |
| activities | | | | | |
+----------------------------------------+--------+--+--------------+--+--------------+
| | | | | | |
+----------------------------------------+--------+--+--------------+--+--------------+
| | | | | | |
+----------------------------------------+--------+--+--------------+--+--------------+
| Net increase in cash and | | | 44 | | 437 |
| cash equivalents | | | | | |
+----------------------------------------+--------+--+--------------+--+--------------+
| Cash and cash equivalents at start of | 17 | | 293 | | (144) |
| period | | | | | |
+----------------------------------------+--------+--+--------------+--+--------------+
| | | | | | |
+----------------------------------------+--------+--+--------------+--+--------------+
| Cash and cash equivalents at end of | 17 | | 337 | | 293 |
| period | | | | | |
+----------------------------------------+--------+--+--------------+--+--------------+
| | | | | | |
+----------------------------------------+--------+--+--------------+--+--------------+
Consolidated Statement of Changes in Equity
for the year ended 31 December 2008
Attributable to equity holders of the parent company
+-----------------------+---------+--+----------+--+----------+--+----------+--+---------+
| | Share | | Share | | Retained | | Other | | Total |
+-----------------------+---------+--+----------+--+----------+--+----------+--+---------+
| | Capital | | Premium | | Earnings | | Reserves | | Equity |
+-----------------------+---------+--+----------+--+----------+--+----------+--+---------+
| | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 |
+-----------------------+---------+--+----------+--+----------+--+----------+--+---------+
| | | | | | | | | | |
+-----------------------+---------+--+----------+--+----------+--+----------+--+---------+
| At 1 January 2007 | 2,144 | | 13,420 | | (7,719) | | 511 | | 8,356 |
+-----------------------+---------+--+----------+--+----------+--+----------+--+---------+
| Actuarial gains | - | | - | | 1,834 | | - | | 1,834 |
+-----------------------+---------+--+----------+--+----------+--+----------+--+---------+
| Deferred tax charge | - | | - | | (550) | | - | | (550) |
+-----------------------+---------+--+----------+--+----------+--+----------+--+---------+
| Net income recognised | - | | - | | 1,284 | | - | | 1,284 |
| directly in equity | | | | | | | | | |
+-----------------------+---------+--+----------+--+----------+--+----------+--+---------+
| Profit for the year | - | | - | | 524 | | - | | 524 |
+-----------------------+---------+--+----------+--+----------+--+----------+--+---------+
| Minority Interest | - | | - | | (23) | | - | | (23) |
+-----------------------+---------+--+----------+--+----------+--+----------+--+---------+
| Total recognised | - | | - | | 1,785 | | - | | 1,785 |
| income for the year | | | | | | | | | |
+-----------------------+---------+--+----------+--+----------+--+----------+--+---------+
| Issue of shares | 33 | | 167 | | - | | - | | 200 |
+-----------------------+---------+--+----------+--+----------+--+----------+--+---------+
| Dividends | - | | - | | (857) | | - | | (857) |
+-----------------------+---------+--+----------+--+----------+--+----------+--+---------+
| | | | | | | | | | |
+-----------------------+---------+--+----------+--+----------+--+----------+--+---------+
| At 31 December 2007 | 2,177 | | 13,587 | | (6,791) | | 511 | | 9,484 |
+-----------------------+---------+--+----------+--+----------+--+----------+--+---------+
| Actuarial (loss) | - | | - | | (2,021) | | - | | (2,021) |
+-----------------------+---------+--+----------+--+----------+--+----------+--+---------+
| Deferred tax credit | - | | - | | 566 | | - | | 566 |
+-----------------------+---------+--+----------+--+----------+--+----------+--+---------+
| Net expense | - | | - | | (1,455) | | - | | (1,455) |
| recognised directly | | | | | | | | | |
| in equity | | | | | | | | | |
+-----------------------+---------+--+----------+--+----------+--+----------+--+---------+
| Loss for the year | - | | - | | (1,277) | | - | | (1,277) |
+-----------------------+---------+--+----------+--+----------+--+----------+--+---------+
| Total recognised | - | | - | | (2,732) | | - | | (2,732) |
| expense for the year | | | | | | | | | |
+-----------------------+---------+--+----------+--+----------+--+----------+--+---------+
| Issue of shares | 42 | | 157 | | - | | - | | 199 |
+-----------------------+---------+--+----------+--+----------+--+----------+--+---------+
| Dividends | - | | - | | (379) | | - | | (379) |
+-----------------------+---------+--+----------+--+----------+--+----------+--+---------+
| | | | | | | | | | |
+-----------------------+---------+--+----------+--+----------+--+----------+--+---------+
| At 31 December 2008 | 2,219 | | 13,744 | | (9,902) | | 511 | | 6,572 |
+-----------------------+---------+--+----------+--+----------+--+----------+--+---------+
| | | | | | | | | | |
+-----------------------+---------+--+----------+--+----------+--+----------+--+---------+
Company Statement of Changes in Equity
for the year ended 31 December 2008
+----------------------+---------+--+----------+--+----------+--+------------+--+---------+
| | Share | | Share | | Retained | | Other | | Total |
+----------------------+---------+--+----------+--+----------+--+------------+--+---------+
| | Capital | | Premium | | Earnings | | Reserves | | Equity |
+----------------------+---------+--+----------+--+----------+--+------------+--+---------+
| | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 |
+----------------------+---------+--+----------+--+----------+--+------------+--+---------+
| | | | | | | | | | |
+----------------------+---------+--+----------+--+----------+--+------------+--+---------+
| At 1 January 2007 | 2,144 | | 13,420 | | 4,919 | | 496 | | 20,979 |
+----------------------+---------+--+----------+--+----------+--+------------+--+---------+
| Profit for the year | - | | - | | 143 | | - | | 143 |
+----------------------+---------+--+----------+--+----------+--+------------+--+---------+
| Total recognised | - | | - | | 143 | | - | | 143 |
| income for the year | | | | | | | | | |
+----------------------+---------+--+----------+--+----------+--+------------+--+---------+
| Issue of Shares | 33 | | 167 | | - | | - | | 200 |
+----------------------+---------+--+----------+--+----------+--+------------+--+---------+
| Dividends | - | | - | | (857) | | - | | (857) |
+----------------------+---------+--+----------+--+----------+--+------------+--+---------+
| | | | | | | | | | |
+----------------------+---------+--+----------+--+----------+--+------------+--+---------+
| At 31 December 2007 | 2,177 | | 13,587 | | 4,205 | | 496 | | 20,465 |
+----------------------+---------+--+----------+--+----------+--+------------+--+---------+
| Loss for the year | - | | - | | (101) | | - | | (101) |
+----------------------+---------+--+----------+--+----------+--+------------+--+---------+
| Total recognised | - | | - | | (101) | | - | | (101) |
| expense for the year | | | | | | | | | |
+----------------------+---------+--+----------+--+----------+--+------------+--+---------+
| Issue of shares | 42 | | 157 | | - | | - | | 199 |
+----------------------+---------+--+----------+--+----------+--+------------+--+---------+
| Dividends | - | | - | | (379) | | - | | (379) |
+----------------------+---------+--+----------+--+----------+--+------------+--+---------+
| | | | | | | | | | |
+----------------------+---------+--+----------+--+----------+--+------------+--+---------+
| At 31 December 2008 | 2,219 | | 13,744 | | 3,725 | | 496 | | 20,184 |
+----------------------+---------+--+----------+--+----------+--+------------+--+---------+
| | | | | | | | | | |
+----------------------+---------+--+----------+--+----------+--+------------+--+---------+
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
at 31 December 2008
1. ACCOUNTING POLICIES
The results for the year ended 31 December 2008 have been prepared in accordance
with its accounting policies under International Financial Reporting Standards
(IFRS) as adopted by the European Union (EU).
The company is a public limited company listed on the London Stock Exchange
incorporated and domiciled in the United Kingdom and the registered office is
detailed in the front of these accounts.
At the date of authorisation of these financial statements, the following
Standards and Interpretations which have not been applied in these financial
statements were in issue but not yet effective:
IAS23 (Amended) - Borrowing costs
IFRS 8 - Operating Segments
IFRIC 11 - Group and Treasury Share Transactions
IFRIC 12 - Service Concession Arrangements
IFRIC 13 - Customer loyalty programmes
IFRIC 14 - IAS19 - The limit on a defined benefit asset, minimum funding
requirements and their interaction.
IFRIC 16 - Hedges of a net investment in a foreign operation
IFRIC 17 - Distributions of non-cash assets to owners
IFRIC 18 - Transfers of Assets from Customers
The directors anticipate that the adoption of these Standards and
Interpretations in future periods will have no material impact on the financial
statements of the Group when the relevant standards and interpretations come
into effect.
a) Basis of preparation
The accounts are prepared on a historical cost basis and in accordance with
applicable accounting standards. The accounts have been prepared on a going
concern basis; more details of this are contained within the "Prospects" section
of the Chairman's statement on pages 3 & 4. Having given due consideration to
the forecasts and cash flows produced and with a GBP5,000,000 finance
facility recently signed and in place, for a minimum 12 month period, the
directors have a reasonable expectation that the Group will continue in
operational existence for the foreseeable future and have therefore used the
going concern basis in preparing the financial statements.
b) Basis of consolidation
The consolidated financial statements comprise the financial statements of
Litho Supplies Plc and all of its subsidiary undertakings drawn up to 31
December each year. Subsidiaries are fully consolidated from the date on which
control is transferred to the Group and de-consolidated from the date on which
control ceases.
The purchase method of accounting is used to account for the acquisition of
subsidiaries by the Group. The cost of an acquisition is measured as the fair
value of the assets acquired and liabilities incurred at the date of exchange,
plus costs directly attributable to the acquisition. The excess of the cost of
acquisition over the fair value of the Group's share of the identifiable net
assets acquired is recorded as goodwill.
c) Goodwill
Goodwill represents the excess of the cost of the business combination over
the acquirer's interest in the net fair value of the identifiable assets,
liabilities and contingent liabilities. Goodwill is included in intangible
assets. Following initial recognition, goodwill is measured at cost less any
accumulated impairment losses. Goodwill is stated at the carrying amount at 1
January 2004 for all acquisitions made prior to that date and at cost for
subsequent acquisitions. Goodwill arising from acquisitions before the date of
transition to IFRS has been retained at the previous UK GAAP values, subject to
being tested for impairment at that date. Goodwill is not amortised but is
reviewed for impairment, annually or more frequently if events or changes in
circumstances indicate that the carrying value may be impaired. Any impairment
is recognised immediately in the income statement and is not subsequently
reversed.
As at the acquisition date, any goodwill acquired is allocated to each of the
cash-generating units expected to benefit from the combination's synergies.
Impairment is determined by assessing the recoverable amount of the
cash-generating unit, to which the goodwill relates. Where the recoverable
amount of the cash-generating unit is less than the carrying amount, an
impairment loss is recognised.
In the interim financial statements deferred consideration was estimated to be
GBP600,000 in respect of the acquisition of Graphic Arts Equipment Ltd on 24
January 2009. Following a review of forward forecasts this figure has been
revised and has been included at a value of GBP200,000 at the year end.
d) Foreign currencies
Transactions in foreign currencies are recorded at the rate ruling at the date
of the transaction. Monetary assets and liabilities denominated in foreign
currencies are retranslated at the rate of exchange ruling at the balance sheet
date or if appropriate at the forward contract rate. All differences are taken
to the consolidated income statement.
e) Critical accounting estimates and judgements
Estimates and judgements are continually evaluated and are based on historical
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances. Actual results may differ
from these estimates. The estimates and assumptions which may have a significant
risk of causing a material adjustment to the carrying amount of assets and
liabilities are discussed below:
1) Impairment of goodwill
The Group is required to test whether goodwill has suffered any impairment. The
recoverable amount is determined based on value in use calculations. The use of
this method requires the estimation of future cash flows and the choice of a
suitable discount rate in order to calculate the present value of these cash
flows. Actual outcomes could vary.
2) Impairment of property, plant and equipment
Property, plant and equipment are reviewed for impairment if events or changes
in circumstances indicate that the carrying amount may not be recoverable. When
a review for impairment is conducted, the recoverable amount is determined based
on value in use calculations prepared on the basis of management's assumptions
and estimates.
3) Depreciation of property, plant and equipment
Depreciation is provided so as to write down the assets to their residual values
over their estimated useful lives as set out above. The selection of these
residual values and estimated lives requires the exercise of management
judgement.
4) Impairment of inventories
Inventories are reviewed for impairment if events or changes in circumstances
indicate that the carrying amount may not be recoverable. When a review for
impairment is conducted, the recoverable amount is determined based on an
assessment of estimated realisable value. The selection of the realisable value
requires the exercise of management judgement. This has resulted in a write off
of inventories in the year of GBP158,000.
f) Property, plant and equipment
Plant and equipment is stated at cost less an accumulated depreciation and any
impairment in value. Depreciation is provided on all property, plant and
equipment other than freehold land and is calculated using the straight line
method at such rates as to write off the cost less estimated residual value of
those assets over their estimated useful lives. The principal rates of
depreciation used are:-
Freehold buildings : 2%
Short leaseholds : over the lease term
Motor vehicles
and equipment : 10% - 33%
The carrying values of property, plant and equipment are reviewed for impairment
in periods if events or changes in circumstances indicate the carrying value may
not be recoverable.
g) Intangible Assets
The customer list included within Intangible Assets is valued at cost. It has
been amortised at a rate of 15% on a straight line basis and charged to the
administration expenses in the profit and loss account.
h) Inventories
Inventories are valued at the lower of cost, on a FIFO basis, and estimated net
realisable value. Net realisable value is the estimated selling price in the
ordinary course of business, less applicable selling expenses. Obsolete and slow
moving items are reviewed with due allowance being made to value these items at
their net realisable value.
i) Trade receivables
Trade receivables are recognised and carried at original invoice amount less an
allowance for any uncollectable amounts. An estimate for doubtful debts is made
when collection of the full amount is no longer probable. Bad debts are written
off to the income statement when identified.
j) Trade payables
Trade payables are not interest bearing and are stated at their fair value.
k) Cash and cash equivalents
Cash and short-term deposits in the balance sheet comprise cash at bank and in
hand. For the purpose of the consolidated cash flow statement, cash and cash
equivalents consist of cash at bank and in hand, net of outstanding bank
overdrafts.
l) Revenue
Sales invoices are raised on dispatch of products and sales are recognised in
the income statement from the date of the sales invoice. Revenue from
maintenance contracts is recognised on a pro rata basis over the period of the
contract from the date of invoice.
m) Financial risk management
The Group has a credit control department, the main responsibilities of this
department are to review credit applications for all prospective customers,
obtain credit references and ratings from an external credit rating agency. The
department also sets and continually monitors credit limits, purchasing patterns
and cash collection on all customers.
n) Bank borrowings
Interest-bearing bank loans and overdrafts are recorded at the proceeds
received, net of direct issue costs. Finance charges, including premiums payable
on settlement or redemption, are accounted for on an accrual basis and are added
to the carrying amount of the instrument to the extent that they are not settled
in the period in which they arise.
o) Income tax
Deferred income tax is provided, using the liability method, on all temporary
differences at the balance sheet date between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary
differences.
Deferred income tax assets are recognised for all deductible temporary
differences, carry-forward of unused tax assets and unused tax losses, to the
extent that it is probable that taxable profit will be available against which
the deductible temporary differences, and the carry-forward of unused tax assets
and unused tax losses can be utilised.
The carrying amount of deferred income tax assets is reviewed at each balance
sheet date and reduced to the extent that it is no longer probable that
sufficient taxable profit will be available to allow all or part of the deferred
income tax asset to be utilised.
Deferred income tax assets and liabilities are measured at the tax rates that
are expected to apply to the year when the asset is realised or the liability is
settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the balance sheet date.
Income tax relating to items recognised directly in equity are recognised
in equity and not in the income statement.
Revenues, expenses and assets are recognised net of the amount of sales tax
except:
* Where the sales tax incurred on a purchase of goods and services is not
recoverable from the taxation authority, in which case the sales tax is
recognised as part of the cost of acquisition of the asset or as part of the
expense item as applicable; and
* Receivables and payables are stated with the amount of sales tax included.
The net amount of sales tax recoverable from, or payable to, the taxation
authority is included as part of receivables or payables in the balance sheet.
p) Pensions
The Group operates a defined benefit scheme. The liability recognised in the
balance sheet in respect of this scheme is the present value of the defined
benefit obligations at the balance sheet date less the fair value of the scheme
assets. The defined benefit obligation is calculated at the end of each
reporting period by independent actuaries. The cost of providing benefits is
charged to the income statement with actuarial gains and losses in the period
being taken directly to equity.
The Group also operates a defined contribution group personal pension plan.
Contributions are charged to the income statement as they become payable in
accordance with the rules of the scheme.
q) Share options
IFRS 2 'Share-based Payment' requires an expense to be recognised where the
Group buys goods or services in exchange for shares or rights over shares
('equity-settled transactions'), or in exchange for other assets equivalent in
value to a given number of shares or rights over shares ('cash-settled
transactions'). The main impact of IFRS 2 on the Group is the expensing of
directors' and employees' share options and other share-based incentives by
using an option-pricing model.
The fair value of the employees' services rendered in exchange for the grant of
options is recognised as an expense. The total amount to be expensed pro-rated
over the vesting period is determined by reference to the fair value of the
options at the grant date, excluding the impact of any vesting conditions. The
vesting conditions are included in assumptions about the number of options that
are expected to be exercisable. The estimate is revised at each balance sheet
date and the difference is charged or credited to the income statement, with a
corresponding adjustment to equity. The proceeds received on exercise of the
options net of any directly attributable transaction cost are credited to
equity.
The Group has adopted IFRS 2 for accounting periods beginning on 1 January 2004.
r ) Leases
Finance leases, which transfer to the Group substantially all the risks and
benefits incidental to ownership of the leased item, are capitalised at the
inception of the lease at the fair value of the leased property or, if lower, at
the present value of the minimum lease payments.
Lease payments are apportioned between the finance charges and reduction of the
lease liability so as to achieve a constant rate of interest on the remaining
balance of the liability. Finance charges are charged directly against income.
Capitalised leased assets are depreciated over the shorter of the estimated
useful life of the asset or the lease term.
Leases where the lessor retains substantially all the risks and benefits of
ownership of the asset are classified as operating leases. Initial direct costs
incurred in negotiating an operating lease are added to the carrying amount of
the leased asset and recognised over the lease term on the same bases as the
lease income. Operating lease payments are recognised as an expense in the
income statement on a straight-line basis over the lease term.
2.TURNOVER AND SEGMENTAL ANALYSIS
All sales originate within Europe from a single class of business, namely the
supply of printing and graphic arts materials and equipment.
3.FINANCIAL RISK MANAGEMENT
The Group's activities expose it to a variety of financial risks: foreign
currency risk, credit risk and liquidity risk. The Group's overall risk
management focuses on the level of working capital and seeks to minimise adverse
effects on the Group's financial performance. Risk management is carried out by
senior managers in close co-operation with the employees at the Group's
operating units in line with policies approved by the board.
a) Foreign currency risk
The Group purchases products from international suppliers and is exposed to
foreign currency risks, primarily with respect to the Euro and US dollar.
Foreign exchange risk arises from future commercial transactions.
Management monitor the exposure to foreign currency risks by reviewing the
movements in exchange rates and the recognised gains or losses resulting from
these movements as reported in the income statements. If any specific
transaction is considered to be significant, either by its nature or size,
management will consider using forward foreign currency contracts in order to
limit the potential risk of the transaction.
b) Credit risk
Credit risk is managed on a Group basis and arises from credit exposures to
customers from outstanding receivables and committed transactions. All credit
applications are reviewed for prospective customers together with credit
references and ratings from an external credit rating agency. All current and
prospective customers have credit limits which are continually monitored by the
credit control department. The ageing of receivables is monitored by senior
management.
c) Liquidity risk
Liquidity risk management is monitored on a Group basis. Senior management
continually monitor the level of working capital. Inventories are kept at a
level which will continue to meet the demands of the customers but also ensuring
the cash flow requirements are at an acceptable level.
4.REORGANISATION COSTS
The reorganisation costs relate to the continued process of streamlining the
business, including the centralisation of the accounting function and the
consolidation of the distribution network. Costs incurred relate to redundancy
and related expenditure, dilapidation provisions, relocation costs and legal
expenditure.
5.PROFIT FOR THE YEAR
a) Revenue and Expenses
Profit on continuing operations is after charging/(crediting)
+---------------------------------------------+-----+---------+---------+---------+
| | | 2008 | | 2007 |
| | | GBP'000 | | GBP'000 |
+---------------------------------------------+-----+---------+---------+---------+
| Write down of inventories | | 158 | | - |
+---------------------------------------------+-----+---------+---------+---------+
| Foreign exchange losses | | 397 | | - |
+---------------------------------------------+-----+---------+---------+---------+
| Foreign Exchange forward contract | | | | |
+---------------------------------------------+-----+---------+---------+---------+
| - net foreign exchange gains | | (205) | | - |
+---------------------------------------------+-----+---------+---------+---------+
| Remuneration of Auditors: | | | | |
+---------------------------------------------+-----+---------+---------+---------+
| Baker Tilly UK Audit LLP: | | | | |
+---------------------------------------------+-----+---------+---------+---------+
| Audit Services - company and consolidation | 13 | | 15 | |
+---------------------------------------------+-----+---------+---------+---------+
| - subsidiaries | 57 | | 45 | |
+---------------------------------------------+-----+---------+---------+---------+
| * pension scheme | 4 | 74 | 3 | 63 |
+---------------------------------------------+-----+---------+---------+---------+
| Baker Tilly Tax and Accounting Limited | | | | |
+---------------------------------------------+-----+---------+---------+---------+
| (2007: Baker Tilly Tax and Advisory | | | | |
| Services LLP) | | | | |
+---------------------------------------------+-----+---------+---------+---------+
| Non audit services - taxation | | 3 | | 6 |
+---------------------------------------------+-----+---------+---------+---------+
| Depreciation of owned assets | | 208 | | 140 |
+---------------------------------------------+-----+---------+---------+---------+
| Depreciation of leased assets | | 12 | | 4 |
+---------------------------------------------+-----+---------+---------+---------+
| Profit on sale of property, plant and | | (5) | | (6) |
| equipment | | | | |
+---------------------------------------------+-----+---------+---------+---------+
| Profit on sale of non-current assets held | | - | | (4) |
| for sale | | | | |
+---------------------------------------------+-----+---------+---------+---------+
| Operating lease rentals: | | 684 | | 554 |
| - land and buildings | | | | |
+---------------------------------------------+-----+---------+---------+---------+
| - plant and machinery | | 632 | | 525 |
+---------------------------------------------+-----+---------+---------+---------+
| | | | | |
+---------------------------------------------+-----+---------+---------+---------+
| Finance costs and income: | | | | |
+---------------------------------------------+-----+---------+---------+---------+
| Bank loans and overdrafts | | 93 | | - |
+---------------------------------------------+-----+---------+---------+---------+
| Finance charges payable under finance | | 4 | | 1 |
| leases and hire purchase contracts | | | | |
+---------------------------------------------+-----+---------+---------+---------+
| Other Interest Payable | | 5 | | - |
+---------------------------------------------+-----+---------+---------+---------+
| | | | | |
+---------------------------------------------+-----+---------+---------+---------+
| Total finance costs | | 102 | | 1 |
+---------------------------------------------+-----+---------+---------+---------+
| | | | | |
+---------------------------------------------+-----+---------+---------+---------+
| Other Interest receivable | | 10 | | - |
+---------------------------------------------+-----+---------+---------+---------+
| Bank interest receivable | | 21 | | 198 |
+---------------------------------------------+-----+---------+---------+---------+
| | | | | |
+---------------------------------------------+-----+---------+---------+---------+
| Total Finance Income | | 31 | | 198 |
+---------------------------------------------+-----+---------+---------+---------+
| | | | | |
+---------------------------------------------+-----+---------+---------+---------+
Depreciation and amortisation included in consolidated income statement.
+----------------------------------------------------------+---------+---------+
| | 2008 | 2007 |
+----------------------------------------------------------+---------+---------+
| | GBP'000 | GBP'000 |
+----------------------------------------------------------+---------+---------+
| Included in administrative expenses: | | |
+----------------------------------------------------------+---------+---------+
| Depreciation | 220 | 144 |
+----------------------------------------------------------+---------+---------+
| Amortisation | 10 | - |
+----------------------------------------------------------+---------+---------+
| | | |
+----------------------------------------------------------+---------+---------+
| | 2008 | 2007 |
+----------------------------------------------------------+---------+---------+
| | GBP'000 | GBP'000 |
+----------------------------------------------------------+---------+---------+
| Employee benefits expenses: | | |
+----------------------------------------------------------+---------+---------+
| Wages and saleries | 6,228 | 6,358 |
+----------------------------------------------------------+---------+---------+
| Social Security costs | 644 | 708 |
+----------------------------------------------------------+---------+---------+
| Pension costs | 171 | 335 |
+----------------------------------------------------------+---------+---------+
| | 7,043 | 7,401 |
+----------------------------------------------------------+---------+---------+
| | | |
+----------------------------------------------------------+---------+---------+
| Average numbers employed: | No. | No. |
+----------------------------------------------------------+---------+---------+
| Selling and distribution | 94 | 80 |
+----------------------------------------------------------+---------+---------+
| Warehouse and service | 108 | 86 |
+----------------------------------------------------------+---------+---------+
| Administration | 72 | 70 |
+----------------------------------------------------------+---------+---------+
| | 274 | 236 |
+----------------------------------------------------------+---------+---------+
| | | |
+----------------------------------------------------------+---------+---------+
b) Directors' Remuneration
Details of directors' emoluments, pension entitlements and share options (in
aggregate and for each director) are included in the audited part of the
directors' remuneration report
c) Profit Attributable to Members of the Parent Company
The loss dealt with in the accounts of the parent undertaking was GBP101,000
(2007: profit GBP143,000). An income statement for the parent company has not
been presented in these accounts in accordance with Section 230 of the Companies
Act 1985.
6.INCOME TAX
(a) Consolidated income statement
The income tax expense is made up as follows:
+----------------------------------------------------------+---------+---------+
| | 2008 | 2007 |
+----------------------------------------------------------+---------+---------+
| | GBP'000 | GBP'000 |
+----------------------------------------------------------+---------+---------+
| Current income tax: | | |
+----------------------------------------------------------+---------+---------+
| Current income tax charge | 61 | (113) |
+----------------------------------------------------------+---------+---------+
| Adjustments in respect of previous years | - | (51) |
+----------------------------------------------------------+---------+---------+
| Deferred income tax: | | |
+----------------------------------------------------------+---------+---------+
| Origination and reversal of timing differences | (325) | 158 |
+----------------------------------------------------------+---------+---------+
| | | |
+----------------------------------------------------------+---------+---------+
| Income tax reported in consolidated income statement | (264) | (6) |
+----------------------------------------------------------+---------+---------+
(b) Reconciliation of income tax expense
A reconciliation of income tax expense applicable to accounting profit before
income tax at the statutory income tax rate to income tax expense at the Group's
effective income tax rate for the years ended 31 December 2008 and 2007 is as
follows:
+----------------------------------------------------------+---------+---------+
| | 2008 | 2007 |
+----------------------------------------------------------+---------+---------+
| | GBP'000 | GBP'000 |
+----------------------------------------------------------+---------+---------+
| | | |
+----------------------------------------------------------+---------+---------+
| Accounting (loss)/profit before income tax | (1,541) | 517 |
+----------------------------------------------------------+---------+---------+
| | | |
+----------------------------------------------------------+---------+---------+
| At statutory income tax rate of 28% (2007 - 30%) | (433) | 155 |
+----------------------------------------------------------+---------+---------+
| Expenditure not allowable for income tax purposes | 20 | 5 |
+----------------------------------------------------------+---------+---------+
| Capital allowances | (4) | (16) |
+----------------------------------------------------------+---------+---------+
| Pension charge | (265) | (247) |
+----------------------------------------------------------+---------+---------+
| Utilisation of tax losses | 14 | 84 |
+----------------------------------------------------------+---------+---------+
| Other timing differences | 744 | - |
+----------------------------------------------------------+---------+---------+
| Tax refund arising from losses carried back | (15) | (94) |
+----------------------------------------------------------+---------+---------+
| Adjustments in respect of current income tax of previous | - | (51) |
| years | | |
+----------------------------------------------------------+---------+---------+
| | | |
+----------------------------------------------------------+---------+---------+
| At effective income tax rate of 3.9% (2007: -31.7%) | 61 | (164) |
+----------------------------------------------------------+---------+---------+
c) Deferred income tax
The deferred income tax asset included in the balance sheet is as follows:
+----------------------------------------------------------+---------+---------+
| | 2008 | 2007 |
+----------------------------------------------------------+---------+---------+
| | GBP'000 | GBP'000 |
+----------------------------------------------------------+---------+---------+
| | | |
+----------------------------------------------------------+---------+---------+
| Included in non-current assets | 1,895 | 979 |
+----------------------------------------------------------+---------+---------+
| | | |
+----------------------------------------------------------+---------+---------+
| Decelerated capital allowances | (41) | 83 |
+----------------------------------------------------------+---------+---------+
| Pensions | 1,009 | 759 |
+----------------------------------------------------------+---------+---------+
| Losses c/f | 905 | 108 |
+----------------------------------------------------------+---------+---------+
| Other timing differences | 22 | 29 |
+----------------------------------------------------------+---------+---------+
| | | |
+----------------------------------------------------------+---------+---------+
| Deferred tax asset | 1,895 | 979 |
+----------------------------------------------------------+---------+---------+
| | | |
+----------------------------------------------------------+---------+---------+
| At 1 January 2008 | 979 | 1,575 |
+----------------------------------------------------------+---------+---------+
| Deferred tax charge income statement (note 5(a)) : | 325 | (158) |
| Current year | | |
+----------------------------------------------------------+---------+---------+
| Deferred tax charge in statement in changes in equity | 566 | (550) |
+----------------------------------------------------------+---------+---------+
| Deferred tax asset of subsidiary at date of acquisition | 25 | 112 |
+----------------------------------------------------------+---------+---------+
| | | |
+----------------------------------------------------------+---------+---------+
| At 31 December 2008 | 1,895 | 979 |
+----------------------------------------------------------+---------+---------+
7. EARNINGS PER SHARE
The earnings per share have been calculated as follows:
+--------------------------------------------------+--------------+-------------+
| | 2008 | 2007 |
+--------------------------------------------------+--------------+-------------+
| | GBP'000 | GBP'000 |
+--------------------------------------------------+--------------+-------------+
| Net (loss)/profit attributable to equity holders | (848) | 712 |
| before reorganisation costs | | |
+--------------------------------------------------+--------------+-------------+
| Reorganisation costs | (693) | (211) |
+--------------------------------------------------+--------------+-------------+
| Net (loss)/profit attributable to equity holders | (1,541) | 501 |
| after reorganisation costs | | |
+--------------------------------------------------+--------------+-------------+
| Weighted average number of Ordinary Shares | | |
+--------------------------------------------------+--------------+-------------+
| Basic | 22,165,204 | 21,499,847 |
+--------------------------------------------------+--------------+-------------+
| Dilutive share options | - | 445,000 |
+--------------------------------------------------+--------------+-------------+
| Diluted | 22,165,204 | 21,944,148 |
+--------------------------------------------------+--------------+-------------+
| | | |
+--------------------------------------------------+--------------+-------------+
| Taking into consideration the exercise price of the options, the number of |
| dilutive potential shares from unexercised executive share options granted at |
| 31 December 2008 is nil. |
+-------------------------------------------------------------------------------+
| |
+-------------------------------------------------------------------------------+
| Basic: | 22,165,204 | 21,499,847 |
| | | |
| Weighted average number of Ordinary shares of | | |
| 10p each in issue | | |
+--------------------------------------------------+--------------+-------------+
| | | |
+--------------------------------------------------+--------------+-------------+
| Earnings per share before reorganisation costs | (3.83)p | 3.31p |
+--------------------------------------------------+--------------+-------------+
| Earnings per share after reorganisation costs | (6.95)p | 2.33p |
+--------------------------------------------------+--------------+-------------+
| | | |
+--------------------------------------------------+--------------+-------------+
| Diluted: | | |
+--------------------------------------------------+--------------+-------------+
| | | |
+--------------------------------------------------+--------------+-------------+
| Weighted average number of Ordinary shares of | 22,165,204 | 21,944,847 |
| 10p each in issue | | |
+--------------------------------------------------+--------------+-------------+
| | | |
+--------------------------------------------------+--------------+-------------+
| Earnings per share before reorganisation costs | (3.83)p | 3.24p |
+--------------------------------------------------+--------------+-------------+
| Earnings per share after reorganisation costs | (6.95)p | 2.28p |
+--------------------------------------------------+--------------+-------------+
8. DIVIDENDS PAID AND PROPOSED
Declared and paid during the year:
+----------------------------------------------------------+---------+---------+
| | 2008 | 2007 |
+----------------------------------------------------------+---------+---------+
| | GBP'000 | GBP'000 |
+----------------------------------------------------------+---------+---------+
| Ordinary final dividend paid | 268 | 429 |
| 1.25p (2007: 2.00p) per share | | |
+----------------------------------------------------------+---------+---------+
| | | |
+----------------------------------------------------------+---------+---------+
| Ordinary interim dividend paid | 111 | 428 |
| 0.50p (2007: 2.00p) per share | | |
+----------------------------------------------------------+---------+---------+
| | | |
+----------------------------------------------------------+---------+---------+
| | 379 | 857 |
+----------------------------------------------------------+---------+---------+
| | | |
+----------------------------------------------------------+---------+---------+
| The Directors do not propose a final dividend for 2008 (2007: 1.25p) |
+----------------------------------------------------------+---------+---------+
9. PROPERTY, PLANT AND EQUIPMENT
+----------------------------------------------+-----------+------------+---------+
| | Land and | Plant and | Total |
| | Buildings | Equipment | |
+----------------------------------------------+-----------+------------+---------+
| | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------------------+-----------+------------+---------+
| Cost or Valuation | | | |
+----------------------------------------------+-----------+------------+---------+
| | | | |
+----------------------------------------------+-----------+------------+---------+
| At 1 January 2007 | - | 1,166 | 1,166 |
+----------------------------------------------+-----------+------------+---------+
| Additions | - | 296 | 296 |
+----------------------------------------------+-----------+------------+---------+
| Disposals | - | (459) | (459) |
+----------------------------------------------+-----------+------------+---------+
| Acquired through business combinations | 6 | 34 | 40 |
+----------------------------------------------+-----------+------------+---------+
| At 31 December 2007 | 6 | 1,037 | 1,043 |
+----------------------------------------------+-----------+------------+---------+
| | | | |
+----------------------------------------------+-----------+------------+---------+
| Additions | 82 | 335 | 417 |
+----------------------------------------------+-----------+------------+---------+
| Disposals | - | (38) | (38) |
+----------------------------------------------+-----------+------------+---------+
| Acquired through business combinations(note | - | 230 | 230 |
| 11) | | | |
+----------------------------------------------+-----------+------------+---------+
| At 31 December 2008 | 88 | 1,564 | 1,652 |
+----------------------------------------------+-----------+------------+---------+
| | | | |
+----------------------------------------------+-----------+------------+---------+
| Accumulated Depreciation | | | |
+----------------------------------------------+-----------+------------+---------+
| | | | |
+----------------------------------------------+-----------+------------+---------+
| At 1 January 2007 | - | 805 | 805 |
+----------------------------------------------+-----------+------------+---------+
| Depreciation charge for the year | - | 144 | 144 |
+----------------------------------------------+-----------+------------+---------+
| Disposals | - | (453) | (453) |
+----------------------------------------------+-----------+------------+---------+
| | | | |
+----------------------------------------------+-----------+------------+---------+
| At 31 December 2007 | - | 496 | 496 |
+----------------------------------------------+-----------+------------+---------+
| | | | |
+----------------------------------------------+-----------+------------+---------+
| Depreciation charge for the year | 8 | 212 | 220 |
+----------------------------------------------+-----------+------------+---------+
| Disposals | - | (37) | (37) |
+----------------------------------------------+-----------+------------+---------+
| | | | |
+----------------------------------------------+-----------+------------+---------+
| At 31 December 2008 | 8 | 671 | 679 |
+----------------------------------------------+-----------+------------+---------+
+-----------------------------------------------+------------+------------+------------+
| | Land and | Plant and | Total |
| | Buildings | Equipment | |
+-----------------------------------------------+------------+------------+------------+
| | GBP'000 | GBP'000 | GBP'000 |
+-----------------------------------------------+------------+------------+------------+
| Net Book Value | | | |
+-----------------------------------------------+------------+------------+------------+
| | | | |
+-----------------------------------------------+------------+------------+------------+
| At 1 January 2007 | - | 361 | 361 |
+-----------------------------------------------+------------+------------+------------+
| | | | |
+-----------------------------------------------+------------+------------+------------+
| At 31 December 2007 | 6 | 541 | 547 |
+-----------------------------------------------+------------+------------+------------+
| | | | |
+-----------------------------------------------+------------+------------+------------+
| At 31 December 2008 | 80 | 893 | 973 |
+-----------------------------------------------+------------+------------+------------+
| | | | |
+-----------------------------------------------+------------+------------+------------+
| Net book value of leased assets | | | |
+-----------------------------------------------+------------+------------+------------+
| | | | |
+-----------------------------------------------+------------+------------+------------+
| At 31 December 2008 | 80 | 1 | 81 |
+-----------------------------------------------+------------+------------+------------+
| | | | |
+-----------------------------------------------+------------+------------+------------+
| At 31 December 2007 | 6 | 5 | 11 |
+-----------------------------------------------+------------+------------+------------+
10. INTANGIBLE ASSETS
+-----------------------------------------------+------------+------------+------------+
| Group | Customer | Goodwill | Total |
| | List | | |
+-----------------------------------------------+------------+------------+------------+
| | GBP'000 | GBP'000 | GBP'000 |
+-----------------------------------------------+------------+------------+------------+
| Cost or Valuation | | | |
+-----------------------------------------------+------------+------------+------------+
| | | | |
+-----------------------------------------------+------------+------------+------------+
| At 1 January 2007 | - | 1,356 | 1,356 |
+-----------------------------------------------+------------+------------+------------+
| Acquisitions of subsidiary | - | 1,304 | 1,304 |
+-----------------------------------------------+------------+------------+------------+
| | | | |
+-----------------------------------------------+------------+------------+------------+
| At 31 December 2007 | - | 2,660 | 2,660 |
+-----------------------------------------------+------------+------------+------------+
| | | | |
+-----------------------------------------------+------------+------------+------------+
| Acquisitions of customer list | 65 | - | 65 |
+-----------------------------------------------+------------+------------+------------+
| Acquisitions of subsidiary (note 11) | - | 1,329 | 1,329 |
+-----------------------------------------------+------------+------------+------------+
| | | | |
+-----------------------------------------------+------------+------------+------------+
| At 31 December 2008 | 65 | 3,989 | 4,054 |
+-----------------------------------------------+------------+------------+------------+
| | | | |
+-----------------------------------------------+------------+------------+------------+
| Accumulated amortisation and impairment | | | |
+-----------------------------------------------+------------+------------+------------+
| | | | |
+-----------------------------------------------+------------+------------+------------+
| At 1 January 2007 and 31 December 2007 | - | 267 | 267 |
+-----------------------------------------------+------------+------------+------------+
| | | | |
+-----------------------------------------------+------------+------------+------------+
| Amortisation charge for year | 10 | - | 10 |
+-----------------------------------------------+------------+------------+------------+
| | | | |
+-----------------------------------------------+------------+------------+------------+
| At 31 December 2008 | 10 | 267 | 277 |
+-----------------------------------------------+------------+------------+------------+
| | | | |
+-----------------------------------------------+------------+------------+------------+
+----------------------------------------+------------+------------+----------+
| Group | Customer | Goodwill | Total |
| | List | | |
+----------------------------------------+------------+------------+----------+
| | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------------+------------+------------+----------+
| | | | |
+----------------------------------------+------------+------------+----------+
| Net Book Value | | | |
+----------------------------------------+------------+------------+----------+
| | | | |
+----------------------------------------+------------+------------+----------+
| At 1 January 2007 | - | 1,089 | 1,089 |
+----------------------------------------+------------+------------+----------+
| | | | |
+----------------------------------------+------------+------------+----------+
| At 31 December 2007 | - | 2,393 | 2,393 |
+----------------------------------------+------------+------------+----------+
| | | | |
+----------------------------------------+------------+------------+----------+
| At 31 December 2008 | 55 | 3,722 | 3,777 |
+----------------------------------------+------------+------------+----------+
The goodwill has arisen upon business acquisitions. No impairment provision has
been made in this year because the acquired businesses continue to generate
profits and based on forecasts prepared, the directors expect that this will
continue to be the case in the foreseeable future. The goodwill is allocated to
the business as a whole as the directors consider there to be only one CGU. The
recoverable amount of the CGU has been determined by value in use calculations,
using pre tax cashflow projections. Growth rates of 5% have been assumed, with a
discount rate of 2%.
11. ACQUISITIONS
On 24 January 2008, Litho Supplies (UK) Limited acquired 100% of the
shareholding of Payrite Services Limited, it's main trading subsidiary; Graphic
Arts Equipment Limited, and the remaining 49% of the share capital of Shinohara
(UK) Limited as part of the same deal.
Graphic Arts Equipment Limited's principal activity is the sale, installation
and servicing of leading lines of printing equipment with exclusive distribution
agreements for Horizon and Perfecta in the UK and Ireland. Shinohara (UK)
Limited, markets, sells and services the Shinohara Printing Press.
The acquired businesses contributed revenues of GBP8,765,000 and net profit of
GBP682,000 to the Group for the period 24 January 2008 to 31 December 2008. If
the acquisition had occurred on 1 January 2008, revenue would have been
GBP8,926,000 and profit before tax would have been GBP566,000 excluding any
reorganisation, integration costs and other pre-acquisition income statement
costs that would not have been incurred if the acquisition had occurred on 1
January 2008. These amounts have been calculated using the Group's accounting
policies and by adjusting the results of the subsidiary to reflect the
additional depreciation and amortisation that would have been charged assuming
the fair value adjustments to property, plant and equipment and intangible
assets had applied from 1 January 2008, together with the consequential tax
effects.
Details of total net assets acquired and goodwill for both acquisitions are as
follows:
+----------------------------------------------------------------+------------+
| | GBP'000 |
+----------------------------------------------------------------+------------+
| Purchase consideration: | |
+----------------------------------------------------------------+------------+
| Cash paid | 1,400 |
+----------------------------------------------------------------+------------+
| Direct costs relating to the acquisition | 78 |
+----------------------------------------------------------------+------------+
| Fair value of shares issued (note 18) | 199 |
+----------------------------------------------------------------+------------+
| Deferred Consideration | 200 |
+----------------------------------------------------------------+------------+
| Total purchase consideration | 1,877 |
+----------------------------------------------------------------+------------+
| Fair value of net assets acquired | 548 |
+----------------------------------------------------------------+------------+
| | |
+----------------------------------------------------------------+------------+
| Goodwill (note 10) | 1,329 |
+----------------------------------------------------------------+------------+
It has not been possible to accurately allocate a fair value to the goodwill
which represents the experienced management, sales and technical team acquired
and the customer relationships, therefore the excess of the purchase
consideration over the asset and liabilities acquired has been treated as
goodwill.
The fair value of the shares issued was based on the average mid-market price of
the company's shares for the seven business days immediately preceding the
completion date. A total of 423,602 ordinary shares were issued as part of the
consideration for Payrite Services Limited and it's main trading subsidiary;
Graphic Arts Equipment Limited.
The assets and liabilities as of 24 January 2008 arising from the acquisition
are as follows:
+----------------------------------------------------+------------+------------+
| | Fair | Net Book |
| | Value | Value |
+----------------------------------------------------+------------+------------+
| | GBP'000 | GBP'000 |
+----------------------------------------------------+------------+------------+
| | | |
+----------------------------------------------------+------------+------------+
| Cash and cash equivalent | 236 | 236 |
+----------------------------------------------------+------------+------------+
| Property, plant and equipment (note 9) | 230 | 230 |
+----------------------------------------------------+------------+------------+
| Inventories | 1,835 | 1,835 |
+----------------------------------------------------+------------+------------+
| Trade and other receivables | 413 | 413 |
+----------------------------------------------------+------------+------------+
| Trade and other payables | (2,034) | (2,034) |
+----------------------------------------------------+------------+------------+
| Investments | (132) | (132) |
+----------------------------------------------------+------------+------------+
| Net assets acquired | 548 | 548 |
+----------------------------------------------------+------------+------------+
| | | |
+----------------------------------------------------+------------+------------+
| Purchase consideration settled in cash | 1,643 | |
+----------------------------------------------------+------------+------------+
| | | |
+----------------------------------------------------+------------+------------+
| Total cash outflow on acquisition | 1,407 | |
+----------------------------------------------------+------------+------------+
In addition to the acquisition of Payrite Services Limited and Graphic Arts
Equipment Limited the Group also had additional costs of GBP21,000 in respect of
previous acquisitions.
12. INVESTMENTS
The company holds 100% of the ordinary share capital of Litho Supplies
Investments Limited at a cost and net book value of GBP1 (2007: GBP1). Litho
Supplies Investments Limited is registered in England and Wales.
Litho Supplies Investments Limited holds the ordinary share capital of Litho
Supplies (UK) Limited at cost and net book value of GBP21,186,000. Litho
Supplies (UK) Limited is registered in England and Wales and operates within
England, Wales and Scotland as a supplier of graphics arts materials and
equipment and remains 100% indirectly held by Litho Supplies Plc.
Litho Supplies Plc indirectly holds 100% of the ordinary share capital of a
number of other companies as detailed below:
+------------------------------------------+----------------------------------+
| Company | Nature of Business |
+------------------------------------------+----------------------------------+
| | |
+------------------------------------------+----------------------------------+
| Graphic Arts Equipment Limited | Printing Equipment and Supplies |
+------------------------------------------+----------------------------------+
| Shinohara (UK) Limited | Printing Press Equipment |
+------------------------------------------+----------------------------------+
| Graphica Plus Limited | Printing Equipment and Supplies |
+------------------------------------------+----------------------------------+
| United Graphics Limited | (dormant) |
+------------------------------------------+----------------------------------+
| Ocean Reprographics Holdings Limited | (dormant) |
+------------------------------------------+----------------------------------+
| Ocean Reprographics Limited | (dormant) |
+------------------------------------------+----------------------------------+
| Muromail Limited | (dormant) |
+------------------------------------------+----------------------------------+
| Universal Presentation Products Limited | (dormant) |
+------------------------------------------+----------------------------------+
| L.S. Digital Limited | (dormant) |
+------------------------------------------+----------------------------------+
| Lonchem Limited | (dormant) |
+------------------------------------------+----------------------------------+
| Destolane Limited | (dormant) |
+------------------------------------------+----------------------------------+
| Brittons Printing Inks Limited | (dormant) |
+------------------------------------------+----------------------------------+
| Lights Graphic Supplies Limited | (dormant) |
+------------------------------------------+----------------------------------+
| Payrite Services Limited | (dormant) |
+------------------------------------------+----------------------------------+
| Horizon Finishing Systems Limited | (dormant) |
+------------------------------------------+----------------------------------+
| Flexo Supplies Limited | (dormant) |
+------------------------------------------+----------------------------------+
| Muro Limited | (dormant) |
+------------------------------------------+----------------------------------+
| L S Holdings Limited | (dormant) |
+------------------------------------------+----------------------------------+
| L S Group Limited | (dormant) |
+------------------------------------------+----------------------------------+
| L S Employee Share Scheme Limited | (dormant) |
+------------------------------------------+----------------------------------+
All of the above companies are registered in England and Wales.
13. OTHER FINANCIAL ASSETS (NON-CURRENT)
+-----------------------------------+--------+---------+----------+----------+
| | Group | Group | Company | Company |
+-----------------------------------+--------+---------+----------+----------+
| | 2008 | 2007 | 2008 | 2007 |
+-----------------------------------+--------+---------+----------+----------+
| | | | | |
+-----------------------------------+--------+---------+----------+----------+
| Amount owed by Group Undertakings | - | - | 20,000 | 20,000 |
+-----------------------------------+--------+---------+----------+----------+
14. INVENTORIES
+----------------------------------------------------+----------+----------+
| | Group | Group |
+----------------------------------------------------+----------+----------+
| | 2008 | 2007 |
+----------------------------------------------------+----------+----------+
| | GBP'000 | GBP'000 |
+----------------------------------------------------+----------+----------+
| | | |
+----------------------------------------------------+----------+----------+
| Raw materials (at cost) | 38 | 65 |
+----------------------------------------------------+----------+----------+
| Finished Goods | 6,610 | 4,372 |
+----------------------------------------------------+----------+----------+
| | | |
+----------------------------------------------------+----------+----------+
| | 6,648 | 4,437 |
+----------------------------------------------------+----------+----------+
The cost of inventories is recognised as an expense, included in the cost of
sales, which amounted to GBP42,565,000 (2007: GBP36,599,000).
15. TRADE AND OTHER RECEIVABLES
+----------------------------------------------------+----------+----------+
| | Group | Group |
+----------------------------------------------------+----------+----------+
| | 2008 | 2007 |
+----------------------------------------------------+----------+----------+
| | GBP'000 | GBP'000 |
+----------------------------------------------------+----------+----------+
| | | |
+----------------------------------------------------+----------+----------+
| Trade receivables | 9,704 | 9,260 |
+----------------------------------------------------+----------+----------+
Trade receivables are non-interest bearing.
The directors consider that the book value and the fair value is the same.
The net amount of sales tax receivable and sales tax payable is non-interest
bearing and is remitted to the appropriate taxation authorities on a quarterly
basis.
16. OTHER CURRENT ASSETS
+---------------------------------+---------+----------+----------+----------+
| | Group | Group | Company | Company |
+---------------------------------+---------+----------+----------+----------+
| | 2008 | 2007 | 2008 | 2007 |
+---------------------------------+---------+----------+----------+----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+---------------------------------+---------+----------+----------+----------+
| | | | | |
+---------------------------------+---------+----------+----------+----------+
| Other receivables | 266 | 193 | 2 | 3 |
+---------------------------------+---------+----------+----------+----------+
| | | | | |
+---------------------------------+---------+----------+----------+----------+
| Prepayments and accrued income | 1,327 | 1,091 | 1 | 12 |
+---------------------------------+---------+----------+----------+----------+
| | | | | |
+---------------------------------+---------+----------+----------+----------+
| Amounts owed by Group | | | | |
+---------------------------------+---------+----------+----------+----------+
| undertakings | - | - | 0 | 169 |
+---------------------------------+---------+----------+----------+----------+
| | 1,593 | 1,284 | 3 | 184 |
+---------------------------------+---------+----------+----------+----------+
The directors consider that the book value and the fair value is the same.
17. CASH AND CASH EQUIVALENTS
+--------------------------------+----------+----------+----------+----------+
| | Group | Group | Company | Company |
+--------------------------------+----------+----------+----------+----------+
| | 2008 | 2007 | 2008 | 2007 |
+--------------------------------+----------+----------+----------+----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+--------------------------------+----------+----------+----------+----------+
| | | | | |
+--------------------------------+----------+----------+----------+----------+
| Cash at bank and in hand | 402 | 3,543 | 337 | 293 |
+--------------------------------+----------+----------+----------+----------+
Cash at bank and in hand earns interest at floating rates based on daily bank
deposit rates.
For the purposes of the consolidated cash flow statement, cash and cash
equivalents comprise the following at 31 December:
+--------------------------------+----------+----------+----------+----------+
| | Group | Company |
| | | |
+--------------------------------+---------------------+---------------------+
| | 2008 | 2007 | 2008 | 2007 |
+--------------------------------+----------+----------+----------+----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+--------------------------------+----------+----------+----------+----------+
| | | | | |
+--------------------------------+----------+----------+----------+----------+
| Cash at bank and in hand | 402 | 3,543 | 337 | 293 |
+--------------------------------+----------+----------+----------+----------+
| Bank overdrafts (note 17) | (1,663) | - | - | - |
+--------------------------------+----------+----------+----------+----------+
| | | | | |
+--------------------------------+----------+----------+----------+----------+
| | (1,261) | 3,543 | 337 | 293 |
+--------------------------------+----------+----------+----------+----------+
18. ISSUED CAPITAL AND RESERVES
+------------------------------------------+----------+----------+----------+
| | | No. | No. |
+------------------------------------------+----------+----------+----------+
| | | 2008 | 2007 |
+------------------------------------------+----------+----------+----------+
| Authorised | | '000 | '000 |
+------------------------------------------+----------+----------+----------+
| | | | |
+------------------------------------------+----------+----------+----------+
| Ordinary shares of 10p each | | 32,000 | 32,000 |
+------------------------------------------+----------+----------+----------+
| | | | |
+------------------------------------------+----------+----------+----------+
| | | Share | Share |
+------------------------------------------+----------+----------+----------+
| | No. | Capital | Premium |
+------------------------------------------+----------+----------+----------+
| Ordinary shares issued and fully paid | '000 | GBP'000 | GBP'000 |
+------------------------------------------+----------+----------+----------+
| | | | |
+------------------------------------------+----------+----------+----------+
| As at 1 January 2007 and 1 January 2008 | 21,768 | 2,177 | 13,587 |
+------------------------------------------+----------+----------+----------+
| Issued during 2008 | 424 | 42 | 157 |
+------------------------------------------+----------+----------+----------+
| | | | |
+------------------------------------------+----------+----------+----------+
| At 31 December 2008 | 22,192 | 2,219 | 13,744 |
+------------------------------------------+----------+----------+----------+
The company has a share option scheme under which options to subscribe for the
company's shares have been granted to certain executives and senior employees
(note 22).
Other reserves
+------------------------+--------------+------------+------------+--------------+
| | Group | Group | Group | Company |
| | Capital | Other | Total | Capital |
| | Redemption | Reserve | | Redemption |
| | Reserve | | | Reserve |
+------------------------+--------------+------------+------------+--------------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+------------------------+--------------+------------+------------+--------------+
| | | | | |
+------------------------+--------------+------------+------------+--------------+
| At 31 December 2007 | | | | |
+------------------------+--------------+------------+------------+--------------+
| and 31 December 2008 | 496 | 15 | 511 | 496 |
+------------------------+--------------+------------+------------+--------------+
The other reserve relates to the movement in share based payments.
19. INTEREST BEARING LOANS AND BORROWINGS
+------------------+-----------+----------+---------+---------+----------+----------+
| | Effective | | Group | Group | Company | Company |
+------------------+-----------+----------+---------+---------+----------+----------+
| | Interest | | 2008 | 2007 | 2008 | 2007 |
+------------------+-----------+----------+---------+---------+----------+----------+
| | Rate % | Maturity | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+------------------+-----------+----------+---------+---------+----------+----------+
| | | | | | | |
+------------------+-----------+----------+---------+---------+----------+----------+
| Current | | | | | | |
+------------------+-----------+----------+---------+---------+----------+----------+
| | | | | | | |
+------------------+-----------+----------+---------+---------+----------+----------+
| Bank Loans | Base | | 32 | - | - | - |
| | rate | | | | | |
| | +2.50 | | | | | |
+------------------+-----------+----------+---------+---------+----------+----------+
| Obligations | | | | | | |
| under | | | | | | |
+------------------+-----------+----------+---------+---------+----------+----------+
| finance leases | | | | | | |
+------------------+-----------+----------+---------+---------+----------+----------+
| and hire | | | | | | |
| purchase | | | | | | |
+------------------+-----------+----------+---------+---------+----------+----------+
| contracts | 8.5 - | | 174 | 2 | - | - |
| | 10.7 | | | | | |
+------------------+-----------+----------+---------+---------+----------+----------+
| Bank Overdrafts | Base | On | 1,663 | - | - | - |
| | rate | demand | | | | |
| | +3.00 | | | | | |
+------------------+-----------+----------+---------+---------+----------+----------+
| | | | | | | |
+------------------+-----------+----------+---------+---------+----------+----------+
| | | | 1,869 | 2 | - | - |
+------------------+-----------+----------+---------+---------+----------+----------+
| | | | | | | |
+------------------+-----------+----------+---------+---------+----------+----------+
| Non Current | | | | | | |
+------------------+-----------+----------+---------+---------+----------+----------+
| | | | | | | |
+------------------+-----------+----------+---------+---------+----------+----------+
| Bank Loans | Base | | 18 | - | - | - |
| | rate | | | | | |
| | +2.50 | | | | | |
+------------------+-----------+----------+---------+---------+----------+----------+
| Obligations | | | | | | |
| under | | | | | | |
+------------------+-----------+----------+---------+---------+----------+----------+
| finance leases | | | | | | |
+------------------+-----------+----------+---------+---------+----------+----------+
| and hire | | | | | | |
| purchase | | | | | | |
+------------------+-----------+----------+---------+---------+----------+----------+
| contracts | 8.5 - | | 55 | - | - | - |
| | 10.7 | | | | | |
+------------------+-----------+----------+---------+---------+----------+----------+
| | | | | | | |
+------------------+-----------+----------+---------+---------+----------+----------+
| | | | 73 | - | - | - |
+------------------+-----------+----------+---------+---------+----------+----------+
20. DERIVATIVE FINANCIAL INSTRUMENTS
+------------------------------+---------+-------------+---------+-------------+
| Group | 2008 | 2007 |
+------------------------------+-----------------------+-----------------------+
| | | | | |
+------------------------------+---------+-------------+---------+-------------+
| | Assets | Liabilities | Assets | Liabilities |
+------------------------------+---------+-------------+---------+-------------+
| | | | | |
+------------------------------+---------+-------------+---------+-------------+
| Forward foreign exchange | 205 | - | - | - |
| contracts | | | | |
+------------------------------+---------+-------------+---------+-------------+
| | | | | |
+------------------------------+---------+-------------+---------+-------------+
| Total | 205 | - | - | - |
+------------------------------+---------+-------------+---------+-------------+
| | | | | |
+------------------------------+---------+-------------+---------+-------------+
| Less non- current portion | - | - | - | - |
+------------------------------+---------+-------------+---------+-------------+
| | | | | |
+------------------------------+---------+-------------+---------+-------------+
| Current Portion | 205 | - | - | - |
+------------------------------+---------+-------------+---------+-------------+
The Group entered into derivative transactions during the year; namely forward
currency contracts. The purpose of these transactions was to manage the interest
rate and currency risks arising from the groups operations.
Foreign currency exposures arise from the import of goods sourced directly from
overseas supplies. These exposures have been managed using forward foreign
exchange contracts up to 60% out to 6 months.
The portion recognised in the Income Statement that arises from fair value
amounts to a loss of GBP58,000 (2007: GBPnil).
The notional principal amounts of the outstanding forward foreign exchange
contracts at 31 December 2008 were GBP910,000 (2007: GBPnil).
The forward foreign exchange contract transactions denominated in foreign
currency are expected to occur at various dates during the next 12 months. Gains
and losses on forward foreign exchange contracts as of 31 December 2008 are
recognised in the income statement in the period or periods during which the
transaction affects the income statement.
The Group has the option to purchase GBP60,000 of yen for a period of 4 months
following the year end at a rate of GBP1:150 yen (the protection rate).
21. TRADE AND OTHER PAYABLES (CURRENT)
+------------------------------------------------------+---------+---------+
| | Group | Group |
+------------------------------------------------------+---------+---------+
| | 2008 | 2007 |
+------------------------------------------------------+---------+---------+
| | GBP'000 | GBP'000 |
| | | |
+------------------------------------------------------+---------+---------+
| Trade payables | 9,988 | 8,375 |
+------------------------------------------------------+---------+---------+
| Other payables | 695 | 888 |
+------------------------------------------------------+---------+---------+
| | 10,683 | 9,263 |
+------------------------------------------------------+---------+---------+
Trade payables are non interest bearing and are normally settled on 60 day
terms. Other payables are non interest bearing and are normally settled within
30 days.
The net of sales tax payable and sales tax receivable is remitted to the
appropriate tax body on a quarterly basis.
22. EMPLOYEE BENEFITS
Employee share option plans
The Group has an employee share option plan (ESOP) for the granting of
non-transferable options to certain senior executives. Options granted under the
plan vest on the first day on which they become exercisable which is three years
after grant date. These options are settled in equity once exercised. The
exercise of the options is also dependent on the Group meeting performance
criteria. The options are only exercisable if the percentage growth in the
earnings per share in the three years up to 31 December prior to the date from
which the option is first exercisable be equal to or greater than 5% per annum
compound. The options are settled in equity once exercised. The vesting period
is 3 years and if options remain unexercised after a period of 7 years from the
date of vesting, the options expire. Furthermore, options are forfeited if the
employee leaves the Group before the options vest.
+-------------------------------+------------+-----------+------------+-----------+
| | 2008 | 2007 |
+-------------------------------+------------------------+------------------------+
| | | Weighted | | Weighted |
+-------------------------------+------------+-----------+------------+-----------+
| | | Average | | Average |
+-------------------------------+------------+-----------+------------+-----------+
| | | Excise | | Excise |
+-------------------------------+------------+-----------+------------+-----------+
| | Options | Price (p) | Options | Price (p) |
+-------------------------------+------------+-----------+------------+-----------+
| | | | | |
+-------------------------------+------------+-----------+------------+-----------+
| Outstanding at 1 January 2008 | 1,685,000 | 57.2 | 1,685,000 | 57.2 |
+-------------------------------+------------+-----------+------------+-----------+
| Granted during the year | 526,000 | 37.5 | - | - |
+-------------------------------+------------+-----------+------------+-----------+
| Expired during the year | - | - | - | - |
+-------------------------------+------------+-----------+------------+-----------+
| Exercised during the year | - | - | - | - |
+-------------------------------+------------+-----------+------------+-----------+
| | | | | |
+-------------------------------+------------+-----------+------------+-----------+
| Outstanding at 31 December | 2,211,000 | 52.5 | 1,685,000 | 57.2 |
| 2008 | | | | |
+-------------------------------+------------+-----------+------------+-----------+
+---------------------------------------+------------+------------+------------+
| | | | Weighted |
+---------------------------------------+------------+------------+------------+
| | | Excise | Average |
+---------------------------------------+------------+------------+------------+
| | | Price | Remaining |
+---------------------------------------+------------+------------+------------+
| | Options | (p) | Life |
| | | | (years) |
+---------------------------------------+------------+------------+------------+
| | | | |
+---------------------------------------+------------+------------+------------+
| Outstanding at 31 December 2007 | | | |
+---------------------------------------+------------+------------+------------+
| | | | |
+---------------------------------------+------------+------------+------------+
| Granted 16 June 2004 | 445,000 | 50.0 | 5.4 |
+---------------------------------------+------------+------------+------------+
| Granted 9 June 2005 | 635,000 | 59.0 | 6.4 |
+---------------------------------------+------------+------------+------------+
| Granted 24 April 2006 | 605,000 | 60.5 | 7.3 |
+---------------------------------------+------------+------------+------------+
| | 1,685,000 | 57.2 | |
+---------------------------------------+------------+------------+------------+
| | | | |
+---------------------------------------+------------+------------+------------+
| Granted 18 April 2008 | 526,000 | 37.2 | 9.3 |
+---------------------------------------+------------+------------+------------+
| | | | |
+---------------------------------------+------------+------------+------------+
| Outstanding at 31December 2008 | 2,211,000 | 52.5 | 7.2 |
+---------------------------------------+------------+------------+------------+
445,000 of these options are exercisable between 16 June 2007 and 16 June
2014 at 50p each.
The inputs into the Black-Scholes model are as follows:
+---------------------------------------------------+------------+------------+
| | 2008 | 2007 |
| | | |
+---------------------------------------------------+------------+------------+
| Weighted average share price | 52.5 | 57.2 |
+---------------------------------------------------+------------+------------+
| Weighted average exercise price | 52.5 | 57.2 |
+---------------------------------------------------+------------+------------+
| Expected volatility | 167% | 2% |
+---------------------------------------------------+------------+------------+
| Weighted average risk free rate | 5.0% | 3.7% |
+---------------------------------------------------+------------+------------+
Expected volatility was determined by the current share price and the total
shareholders return on investment.
The Group recognised total expense of GBPnil (2007: GBPnil) relating to
equity-settled share-based payment transactions.
23. PENSION COMMITMENTS
The Group has operated a funded defined benefit pension scheme for certain
employees of Litho Supplies (UK) Limited, the assets of which are held as a
segregated fund, administered by trustees. However, pension accruals under the
defined benefit scheme ceased for almost all employee members with effect from
30 June 2003.
The weighted expected rate of return for the total assets is 6.2% (2007: 6.7%)
allowing for the relative proportions held in each asset class as at 31 December
2008. This rate of return should be considered a net rate after allowance for
investment expenses.
The Group also provides a group personal pension arrangement. This operates on a
defined contribution basis, and the assets are invested with insurance
companies. The pension cost represents contributions payable by the Group to the
insurance companies and amounted to GBP189,335 (2007: GBP193,284) over the year
and GBP20,720 (2007: GBP417) of these contributions were outstanding at the year
end.
1. Financial assumptions
+---------------------------------------------+---------------+---------------+
| | At | At |
+---------------------------------------------+---------------+---------------+
| | 31 December | 31 December |
+---------------------------------------------+---------------+---------------+
| | 2008 | 2007 |
+---------------------------------------------+---------------+---------------+
| | % pa | % pa |
+---------------------------------------------+---------------+---------------+
| | | |
+---------------------------------------------+---------------+---------------+
| a. Inflation | 3.0 | 3.2 |
+---------------------------------------------+---------------+---------------+
| b. Rate of increase in salaries | 3.5 | 3.7 |
+---------------------------------------------+---------------+---------------+
| c. Rate of increase of pensions in payment | | |
+---------------------------------------------+---------------+---------------+
| - for service between 1 July 1991 and 5 | 2.6 | 2.7 |
| April 1997 | | |
+---------------------------------------------+---------------+---------------+
| - for service before 1 July 1991 and after | 3.0 | 3.1 |
| 5 April | | |
| 1997 | | |
+---------------------------------------------+---------------+---------------+
| d. Rate of increase for deferred pensioners | 3.0 | 3.2 |
+---------------------------------------------+---------------+---------------+
| e. Discount rate | 6.7 | 5.8 |
+---------------------------------------------+---------------+---------------+
Post retirement mortality has been assumed to be in line with the PA92 tables
(calendar year 2005) with allowance for projected improvements in mortality by
reducing the assumed discount rate by 0.25% per annum. This was the same basis
for the prior year.
2.Scheme assets and liabilities
+---------------------+------------+---------------+------------+---------------+
| | | At 31 | | At 31 |
| | | December | | December |
+---------------------+------------+---------------+------------+---------------+
| | Fair | 2008 | Fair | 2007 |
+---------------------+------------+---------------+------------+---------------+
| | Value | Expected rate | Value | Expected rate |
| | | | | |
+---------------------+------------+---------------+------------+---------------+
| | | of return | | of return |
+---------------------+------------+---------------+------------+---------------+
| | GBP'000 | %pa | GBP'000 | %pa |
+---------------------+------------+---------------+------------+---------------+
| | | | | |
+---------------------+------------+---------------+------------+---------------+
| Equities | 17,687 | 7.9 | 12,700 | 7.9 |
+---------------------+------------+---------------+------------+---------------+
| Bonds | 46 | 6.7 | 7,732 | 5.0 |
+---------------------+------------+---------------+------------+---------------+
| Cash | 873 | 2.0 | 907 | 4.3 |
+---------------------+------------+---------------+------------+---------------+
| Total market value | | | | |
| of | | | | |
+---------------------+------------+---------------+------------+---------------+
| scheme assets | 18,606 | | 21,339 | |
+---------------------+------------+---------------+------------+---------------+
| Present value of | | | | |
+---------------------+------------+---------------+------------+---------------+
| scheme liabilities | (22,211) | | (23,870) | |
+---------------------+------------+---------------+------------+---------------+
| Pension liability | | | | |
+---------------------+------------+---------------+------------+---------------+
| before deferred tax | (3,605) | | (2,531) | |
+---------------------+------------+---------------+------------+---------------+
| Related deferred | 566 | | 759 | |
| tax | | | | |
+---------------------+------------+---------------+------------+---------------+
| | | | | |
+---------------------+------------+---------------+------------+---------------+
| Net pension | (3,039) | | (1,772) | |
| liability | | | | |
+---------------------+------------+---------------+------------+---------------+
| | | | | |
+---------------------+------------+---------------+------------+---------------+
3.Components of defined benefit cost for year ended 31 December 2008
+--------------------------------------------+---------------+---------------+
| | Year ended | Year ended |
+--------------------------------------------+---------------+---------------+
| | 31 December | 31 December |
+--------------------------------------------+---------------+---------------+
| Analysis of amounts charged to | 2008 | 2007 |
| administrative expenses: | GBP'000 | GBP'000 |
+--------------------------------------------+---------------+---------------+
| | | |
+--------------------------------------------+---------------+---------------+
| Current service cost | 30 | 44 |
+--------------------------------------------+---------------+---------------+
| | | |
+--------------------------------------------+---------------+---------------+
| b. Total operating charge | 30 | 44 |
+--------------------------------------------+---------------+---------------+
| | | |
+--------------------------------------------+---------------+---------------+
| | Year ended | Year ended |
+--------------------------------------------+---------------+---------------+
| | 31 December | 31 December |
+--------------------------------------------+---------------+---------------+
| | 2008 | 2007 |
+--------------------------------------------+---------------+---------------+
| | GBP'000 | GBP'000 |
+--------------------------------------------+---------------+---------------+
| | | |
+--------------------------------------------+---------------+---------------+
| c. Interest on pension scheme liabilities | 1,304 | 1,246 |
+--------------------------------------------+---------------+---------------+
| d. Expected return on pension scheme | (1,432) | (1,257) |
| assets | | |
+--------------------------------------------+---------------+---------------+
| | | |
+--------------------------------------------+---------------+---------------+
| * e. Net (income)/charge to | (128) | (11) |
| administrative expenses | | |
+--------------------------------------------+---------------+---------------+
| | | |
+--------------------------------------------+---------------+---------------+
| Total income statement charge before | (98) | 33 |
| deduction for tax b + e | | |
+--------------------------------------------+---------------+---------------+
| | | |
+--------------------------------------------+---------------+---------------+
| | Year ended | Year ended |
+--------------------------------------------+---------------+---------------+
| | 31 December | 31 December |
+--------------------------------------------+---------------+---------------+
| Analysis of the amount recognised in the | 2008 | 2007 |
| Statement of Changes in Equity: | GBP'000 | GBP'000 |
+--------------------------------------------+---------------+---------------+
| | | |
+--------------------------------------------+---------------+---------------+
| f. Actuarial loss/(gain) arising during | 2,021 | (1,834) |
| the period | | |
+--------------------------------------------+---------------+---------------+
| | | |
+--------------------------------------------+---------------+---------------+
| g. Actuarial loss/(gain) recognised in | 2,021 | (1,834) |
| the statement of changes in equity | | |
+--------------------------------------------+---------------+---------------+
| | | |
+--------------------------------------------+---------------+---------------+
| h. Cumulative actuarial (gain) | (131) | (2,152) |
| recognised in the statement of changes in | | |
| equity before adjustment of tax | | |
+--------------------------------------------+---------------+---------------+
| | | |
+--------------------------------------------+---------------+---------------+
4. History of experience gains and losses
+----------------------+----------+----------+----------+----------+----------+
| | Year | Year | Year | Year | Year |
| | ended | ended | ended | ended | ended |
+----------------------+----------+----------+----------+----------+----------+
| | 31 Dec | 31 Dec | 31 Dec | 31 Dec | 31 Dec |
+----------------------+----------+----------+----------+----------+----------+
| | 2008 | 2007 | 2006 | 2005 | 2004 |
+----------------------+----------+----------+----------+----------+----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------------------+----------+----------+----------+----------+----------+
| a. Present value of | | | | | |
+----------------------+----------+----------+----------+----------+----------+
| defined benefit | | | | | |
+----------------------+----------+----------+----------+----------+----------+
| obligation | | | | | |
+----------------------+----------+----------+----------+----------+----------+
| Amount (GBP'000) | 22,211 | 23,870 | 24,772 | 24,618 | 20,930 |
+----------------------+----------+----------+----------+----------+----------+
| | | | | | |
+----------------------+----------+----------+----------+----------+----------+
| b. Fair value of | | | | | |
+----------------------+----------+----------+----------+----------+----------+
| scheme assets | | | | | |
+----------------------+----------+----------+----------+----------+----------+
| Amount (GBP'000) | 18,606 | 21,339 | 19,584 | 17,769 | 14,925 |
+----------------------+----------+----------+----------+----------+----------+
| | | | | | |
+----------------------+----------+----------+----------+----------+----------+
| c. Net (surplus)/ | | | | | |
+----------------------+----------+----------+----------+----------+----------+
| deficit of the | | | | | |
| plan | | | | | |
+----------------------+----------+----------+----------+----------+----------+
| Amount (GBP'000) | 3,605 | 2,531 | 5,188 | 6,849 | 6,005 |
+----------------------+----------+----------+----------+----------+----------+
| | | | | | |
+----------------------+----------+----------+----------+----------+----------+
| d. Gain on | | | | | |
+----------------------+----------+----------+----------+----------+----------+
| scheme assets | | | | | |
+----------------------+----------+----------+----------+----------+----------+
| Amount (GBP'000) | 4,240 | (374) | (496) | (1,816) | (531) |
+----------------------+----------+----------+----------+----------+----------+
| % of scheme | | | | | |
| liabilities | | | | | |
+----------------------+----------+----------+----------+----------+----------+
| at end of year | 22.79% | 1.75% | 2.53% | 10.22% | 3.56% |
+----------------------+----------+----------+----------+----------+----------+
| | | | | | |
+----------------------+----------+----------+----------+----------+----------+
| e. Experience gain | | | | | |
| on | | | | | |
+----------------------+----------+----------+----------+----------+----------+
| scheme | | | | | |
| liablilities | | | | | |
+----------------------+----------+----------+----------+----------+----------+
| Amount (GBP'000) | 402 | - | 28 | (196) | (192) |
+----------------------+----------+----------+----------+----------+----------+
| % of scheme | | | | | |
| liabilities | | | | | |
+----------------------+----------+----------+----------+----------+----------+
| at end of year | 1.81% | 0.00% | 0.11% | 0.80% | 0.92% |
+----------------------+----------+----------+----------+----------+----------+
5. Analysis of deficit
+---------------------------------------------+---------------+---------------+
| | Year ended | Year ended |
+---------------------------------------------+---------------+---------------+
| | 31 December | 31 December |
+---------------------------------------------+---------------+---------------+
| Analysis of the movement in deficit during | 2008 | 2007 |
| the year: | GBP'000 | GBP'000 |
+---------------------------------------------+---------------+---------------+
| | | |
+---------------------------------------------+---------------+---------------+
| Deficit in the scheme at beginning of the | (2,531) | (5,188) |
| year | | |
+---------------------------------------------+---------------+---------------+
| Contributions paid | 849 | 856 |
+---------------------------------------------+---------------+---------------+
| Total operating charge | 98 | (33) |
+---------------------------------------------+---------------+---------------+
| (Loss)/gain recognised in the statement of | | |
+---------------------------------------------+---------------+---------------+
| changes in equity | (2,021) | 1,834 |
+---------------------------------------------+---------------+---------------+
| | | |
+---------------------------------------------+---------------+---------------+
| Deficit in the scheme at the end of the | (3,605) | (2,531) |
| year | | |
+---------------------------------------------+---------------+---------------+
6. Change in defined benefit obligation over the period
+---------------------------------------------+---------------+---------------+
| | Year ended | Year ended |
+---------------------------------------------+---------------+---------------+
| | 31 December | 31 December |
+---------------------------------------------+---------------+---------------+
| | 2008 | 2007 |
| | GBP'000 | GBP'000 |
| | | |
+---------------------------------------------+---------------+---------------+
| a. Defined benefit obligation at beginning | 23,870 | 24,772 |
| of year | | |
+---------------------------------------------+---------------+---------------+
| b. Interest cost | 1,304 | 1,185 |
+---------------------------------------------+---------------+---------------+
| c. Current service cost | 30 | 44 |
+---------------------------------------------+---------------+---------------+
| d. Actual member contributions | 13 | 15 |
+---------------------------------------------+---------------+---------------+
| e. Actual benefit payments by the scheme | (787) | (747) |
+---------------------------------------------+---------------+---------------+
| f. Gain on change of assumptions | - | (1,399) |
+---------------------------------------------+---------------+---------------+
| g. Actuarial gain | (2,219) | - |
+---------------------------------------------+---------------+---------------+
| | | |
+---------------------------------------------+---------------+---------------+
| Defined benefit obligation at end of year | 22,211 | 23,870 |
+---------------------------------------------+---------------+---------------+
7. Change in scheme assets over the period
+---------------------------------------------+---------------+---------------+
| | Year ended | Year ended |
+---------------------------------------------+---------------+---------------+
| | 31 December | 31 December |
+---------------------------------------------+---------------+---------------+
| | 2008 | 2007 |
| | GBP'000 | GBP'000 |
+---------------------------------------------+---------------+---------------+
| | | |
+---------------------------------------------+---------------+---------------+
| * a. Fair value of scheme assets at | 21,339 | 19,584 |
| beginning of year | | |
+---------------------------------------------+---------------+---------------+
| * b. Actual total benefit payments | (787) | (747) |
+---------------------------------------------+---------------+---------------+
| * c. Actual company contributions | 849 | 856 |
| (including benefits paid directly by the | | |
| company) | | |
+---------------------------------------------+---------------+---------------+
| * d. Actual member contributions | 13 | 15 |
+---------------------------------------------+---------------+---------------+
| * e. Expected return on plan assets | 1,432 | 1,257 |
+---------------------------------------------+---------------+---------------+
| * f. Actuarial (loss)/gain | (4,240) | 374 |
+---------------------------------------------+---------------+---------------+
| | | |
+---------------------------------------------+---------------+---------------+
| g. Fair value of scheme assets at end of | 18,606 | 21,339 |
| year | | |
+---------------------------------------------+---------------+---------------+
Analysis of expected versus actual return on assets
+---------------------------------------------+---------------+---------------+
| | Year ended | Year ended |
+---------------------------------------------+---------------+---------------+
| | 31 December | 31 December |
+---------------------------------------------+---------------+---------------+
| | 2008 | 2007 |
| | GBP'000 | GBP'000 |
+---------------------------------------------+---------------+---------------+
| | | |
+---------------------------------------------+---------------+---------------+
| h. Expected return on scheme assets | 1,432 | 1,257 |
+---------------------------------------------+---------------+---------------+
| i. Actuarial gain/(loss) on scheme assets | (4,240) | 374 |
+---------------------------------------------+---------------+---------------+
| | | |
+---------------------------------------------+---------------+---------------+
| j. Actual (loss)/return on scheme assets | (2,808) | 1,631 |
+---------------------------------------------+---------------+---------------+
8. Additional disclosures
+---------------------------------------------+---------------+---------------+
| | Year | Year |
+---------------------------------------------+---------------+---------------+
| | commencing | commencing |
+---------------------------------------------+---------------+---------------+
| | 31 December | 31 December |
+---------------------------------------------+---------------+---------------+
| | 2009 | 2008 |
| | GBP'000 | GBP'000 |
+---------------------------------------------+---------------+---------------+
| | | |
+---------------------------------------------+---------------+---------------+
| a. Expected company contributions for | 1 | 857 |
| year starting 1 January | | |
+---------------------------------------------+---------------+---------------+
| | | |
+---------------------------------------------+---------------+---------------+
| b. Expected member contributions for year | - | 16 |
| starting 1 January | | |
+---------------------------------------------+---------------+---------------+
| | | |
+---------------------------------------------+---------------+---------------+
| c. Expected benefits paid by the company | 750 | 500 |
| for the year starting 1 January | | |
+---------------------------------------------+---------------+---------------+
| | | |
+---------------------------------------------+---------------+---------------+
24.ACCRUALS AND DEFERRED INCOME
+--------------------+--------------+-------------+---------------+------------+
| | Group | Group | Company | Company |
+--------------------+--------------+-------------+---------------+------------+
| | 2008 | 2007 | 2008 | 2007 |
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+--------------------+--------------+-------------+---------------+------------+
| | | | | |
+--------------------+--------------+-------------+---------------+------------+
| Accruals | 2,192 | 1,348 | 20 | 12 |
+--------------------+--------------+-------------+---------------+------------+
| Amounts owed to | - | - | 136 | - |
| group companies | | | | |
+--------------------+--------------+-------------+---------------+------------+
| | | | | |
+--------------------+--------------+-------------+---------------+------------+
| | 2,192 | 1,348 | 156 | 12 |
+--------------------+--------------+-------------+---------------+------------+
| | | | | |
+--------------------+--------------+-------------+---------------+------------+
25. PROVISIONS
+---------------------------+---------+-------------+---------------+------------+
| | Group | Group | Company | Company |
+---------------------------+---------+-------------+---------------+------------+
| | 2008 | 2007 | 2008 | 2007 |
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+---------------------------+---------+-------------+---------------+------------+
| At 1 January 2008 | - | - | - | - |
+---------------------------+---------+-------------+---------------+------------+
| Additional provisions | 149 | - | - | - |
| made during the period | | | | |
+---------------------------+---------+-------------+---------------+------------+
| Amounts used during the | - | - | - | - |
| period | | | | |
+---------------------------+---------+-------------+---------------+------------+
| | | | | |
+---------------------------+---------+-------------+---------------+------------+
| 31 December 2008 | 149 | - | - | - |
+---------------------------+---------+-------------+---------------+------------+
Provisions relate to the ongoing reorganisation of the business and
dilapidations costs for leases which expire in 2009.
It is anticipated that all of this provision will be utilised in 2009.
26. COMMITMENTS AND CONTINGENCIES
Operating lease commitments - Group as lessee
The Group has entered into commercial leases on certain motor vehicles,
items of small machinery and commercial properties where it is not in the best
interest of the Group to purchase these assets. The vehicle and machinery leases
have an average life of between 2 and 3 years. The commercial property leases
vary from 1 year terms to 25 year terms. Renewals are at the option of the
specific entity that holds the lease. There are no restrictions placed upon the
lessee by entering into these leases.
Future minimum rentals payable under non-cancellable operating leases as at
31 December are as follows:
+---------------------------------------------------+------------+------------+
| | 2008 | 2007 |
+---------------------------------------------------+------------+------------+
| | GBP'000 | GBP'000 |
+---------------------------------------------------+------------+------------+
| | | |
+---------------------------------------------------+------------+------------+
| Within one year | 950 | 880 |
+---------------------------------------------------+------------+------------+
| After one year but not more than five years | 1,630 | 2,215 |
+---------------------------------------------------+------------+------------+
| More than five years | 748 | 895 |
+---------------------------------------------------+------------+------------+
| | | |
+---------------------------------------------------+------------+------------+
| | 3,328 | 3,990 |
+---------------------------------------------------+------------+------------+
Finance lease and hire purchase commitments
The Group has finance leases and hire purchase contracts for items of plant
and machinery, these leases have no terms of renewal or purchase options and
escalation clauses. Future minimum lease payments under finance leases and hire
purchase contracts together with the present value of the net minimum lease
payments are as follows:
+---------------------------+----------+------------+----------+------------+
| | Minimum | 2008 | Minimum | 2007 |
+---------------------------+----------+------------+----------+------------+
| | payments | Present | payments | Present |
+---------------------------+----------+------------+----------+------------+
| | | value of | | value of |
+---------------------------+----------+------------+----------+------------+
| | | payments | | payments |
+---------------------------+----------+------------+----------+------------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+---------------------------+----------+------------+----------+------------+
| | | | | |
+---------------------------+----------+------------+----------+------------+
| Within one year | - | - | 2 | 2 |
+---------------------------+----------+------------+----------+------------+
| After one year but not | | | | |
+---------------------------+----------+------------+----------+------------+
| more than five years | - | - | - | - |
+---------------------------+----------+------------+----------+------------+
| | | | | |
+---------------------------+----------+------------+----------+------------+
| Total minimum lease | | | | |
+---------------------------+----------+------------+----------+------------+
| payments | - | - | 2 | 2 |
+---------------------------+----------+------------+----------+------------+
| Less amounts representing | | | | |
+---------------------------+----------+------------+----------+------------+
| finance charges | - | - | - | - |
+---------------------------+----------+------------+----------+------------+
| | | | | |
+---------------------------+----------+------------+----------+------------+
| Present value of minimum | | | | |
+---------------------------+----------+------------+----------+------------+
| lease payments | - | - | 2 | 2 |
+---------------------------+----------+------------+----------+------------+
At the year end the group had a contingent liability in respect of the
repurchase of capital equipment sold amounting to GBP282,000. This has not been
provided for in the accounts as the resale value is in excess of the liability
and is unlikely to crystallise.
27. CAPITAL COMMITMENTS
The Group has no capital commitments.
28. DIRECTORS' INTERESTS
There were no contracts of significance subsisting during or at the end of the
period under review in which any director had a material interest.
29. RELATED PARTY TRANSACTIONS
Company
The amounts owed by subsidiary undertakings are disclosed in notes 12 and 15.
During the year the company received GBP199,000 from Litho Supplies (UK) Limited
for shares issued as part of the acquisition disclosed in note 11.
There were no sales and purchase transactions during the year between the
company and its subsidiaries.
FIVE YEAR SUMMARY
INCOME STATEMENT
+----------------------------+------+-----------+----------+----------+----------+---------+
| | | | | | | |
+----------------------------+------+-----------+----------+----------+----------+---------+
| | Note | IFRS | IFRS | IFRS | IFRS | IFRS |
+----------------------------+------+-----------+----------+----------+----------+---------+
| | | 2008 | 2007 | 2006 | 2005 | 2004 |
+----------------------------+------+-----------+----------+----------+----------+---------+
| | | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------------------------+------+-----------+----------+----------+----------+---------+
| | | | | | | |
+----------------------------+------+-----------+----------+----------+----------+---------+
| Sale of goods | | 49,159 | 43,254 | 42,877 | 44,048 | 45,042 |
+----------------------------+------+-----------+----------+----------+----------+---------+
| Cost of goods | | 42,565 | 36,599 | 35,607 | 36,725 | 37,582 |
+----------------------------+------+-----------+----------+----------+----------+---------+
| | | | | | | |
+----------------------------+------+-----------+----------+----------+----------+---------+
| Gross profit | | 6,582 | 6,655 | 7,270 | 7,323 | 7,460 |
+----------------------------+------+-----------+----------+----------+----------+---------+
| Distribution costs | | 2,985 | 2,235 | 2,209 | 2,111 | 2,209 |
+----------------------------+------+-----------+----------+----------+----------+---------+
| Administrative expenses | | 4,386 | 3,855 | 3,981 | 3,609 | 3,976 |
+----------------------------+------+-----------+----------+----------+----------+---------+
| Pension provision | a. | - | 33 | 109 | 222 | 301 |
+----------------------------+------+-----------+----------+----------+----------+---------+
| Reorganisation | | 693 | 211 | 128 | 50 | 343 |
+----------------------------+------+-----------+----------+----------+----------+---------+
| | | | | | | |
+----------------------------+------+-----------+----------+----------+----------+---------+
| Operating (loss)/profit | | (1,470) | 321 | 843 | 1,331 | 631 |
+----------------------------+------+-----------+----------+----------+----------+---------+
| | | | | | | |
+----------------------------+------+-----------+----------+----------+----------+---------+
| Finance (costs)/income | | (71) | 197 | 170 | 105 | 138 |
+----------------------------+------+-----------+----------+----------+----------+---------+
| | | | | | | |
+----------------------------+------+-----------+----------+----------+----------+---------+
| (Loss)/ profit before | | (1,541) | 518 | 1,013 | 1,436 | 769 |
| taxation | | | | | | |
+----------------------------+------+-----------+----------+----------+----------+---------+
| | | | | | | |
+----------------------------+------+-----------+----------+----------+----------+---------+
| Income tax expense | | (264) | (6) | 237 | 373 | 372 |
+----------------------------+------+-----------+----------+----------+----------+---------+
| | | | | | | |
+----------------------------+------+-----------+----------+----------+----------+---------+
| (Loss)/ profit for the | | | | | | |
| year | | | | | | |
+----------------------------+------+-----------+----------+----------+----------+---------+
| from continuing operations | | (1,277) | 524 | 776 | 1,063 | 397 |
+----------------------------+------+-----------+----------+----------+----------+---------+
| | | | | | | |
+----------------------------+------+-----------+----------+----------+----------+---------+
| | | | | | | |
+----------------------------+------+-----------+----------+----------+----------+---------+
| (Loss)/profit for the year | | (1,277) | 524 | 776 | 1,063 | 397 |
+----------------------------+------+-----------+----------+----------+----------+---------+
| | | | | | | |
+----------------------------+------+-----------+----------+----------+----------+---------+
| Attributable to: | | | | | | |
+----------------------------+------+-----------+----------+----------+----------+---------+
| Equity holders of the | | (1,277) | 501 | 776 | 1,063 | 397 |
| parent | | | | | | |
+----------------------------+------+-----------+----------+----------+----------+---------+
| Minority interests | | - | 23 | - | - | - |
+----------------------------+------+-----------+----------+----------+----------+---------+
| | | | | | | |
+----------------------------+------+-----------+----------+----------+----------+---------+
| | | (1,277) | 524 | 776 | 1,063 | 397 |
+----------------------------+------+-----------+----------+----------+----------+---------+
| | | | | | | |
+----------------------------+------+-----------+----------+----------+----------+---------+
| Ordinary share - basic | | (6.95)p | 2.33p | 3.62p | 4.95p | 1.83p |
+----------------------------+------+-----------+----------+----------+----------+---------+
| Ordinary share - diluted | | (6.95)p | 2.28p | 3.36p | 4.71p | 1.83p |
+----------------------------+------+-----------+----------+----------+----------+---------+
| | | | | | | |
+----------------------------+------+-----------+----------+----------+----------+---------+
a. Additional pension scheme provisions recognised in accordance with IAS 19.
SHAREHOLDER INFORMATION
The share price is listed in the following publications:
ISIN: GB 0005196257
Ticker Code: LTS.L
Market Makers
Winterflood Securities Limited
Annual Report & AGM
Report and Accounts published - 30 April 2009
Annual General Meeting - 1 July 2009
Payment of Dividends
Final : No final dividend is proposed
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR URAURKBRSOAR
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