TIDMTOYE
RNS Number : 8298E
Toye & Co PLC
16 May 2013
TOYE & COMPANY PLC
(AIM: TOYE)
Preliminary Final Results for the Year Ended 31 December
2012
The Board of Toye & Company Plc ("Toye" or "the Company")
announces today Final Results for the year ended 31 December
2012.
Contacts:
Toye & Company plc www.toye.com
Fiona Toye, Chief Executive +44 (0) 20 7242 0471
WH Ireland Limited www.wh-ireland.co.uk
Mike Coe +44 (0) 117 945 3470
Chief Executive's Report
Toye & Company is a rare breed. It has a long lineage,
unique characteristics in the combination of traditional textile,
enamel and metalworking skills, a reliable and adaptable workforce,
and design talents that have enabled it to serve many markets
through many generational changes.
These attributes make it difficult to categorize neatly into a
commercial genus:
-- It is a niche manufacturer of lower volume high quality and
high value metal and textile product
-- It is a designer of these products for its own brands and those of others
-- It is a designer, procurer and supplier of high volume, lower value product
-- It contract manages the supply of a range of all these
products and services to customers who want to 'buy-in' such
expertise
-- It supplies ranges of finished product direct to a number of niche markets
-- It competes for large volume, long term supply contracts for the core product range
-- It pursues business in the UK and overseas
Toye & Company's core business is the detail of identity and
status, which encompasses everything from State insignia and medals
to the lace trimming on the uniform of an air steward and the
badging for a policeman, to elegant cufflinks.
The Company has continued to focus on:
-- Nurturing and improving its four key skills of design, metals
and textile manufacture and specialist sourcing
-- Improving our customer service
-- Reducing and improving process at all stages of our supply chain
-- Reducing our overhead costs
-- Increasing UK and export business
The highlight of 2012 for the Company was the manufacture and
delivery of a large medal contract in collaboration with two other
companies from the Jewellery Quarter in Birmingham. This contract
demonstrated perfectly the superb craft skills of our factories,
(the medals stamped in Birmingham, the ribbon woven in Bedworth),
our project management abilities in terms of minimizing process and
delivering large volumes to specification and on time, and
successful co-operation with others in the trade.
RESULTS
Turnover for the year ended 31 December 2012 amounted to
GBP8,936,996 compared to GBP7,981,006 for the previous year. The
increase was substantially due to the large contract delivered
during the year. Trading conditions in our traditional markets
continue to be difficult.. Worldwide economic conditions and social
disturbances in some countries have without doubt affected our
export sales. Export revenue was GBP1,680,764 compared to
GBP1,870,949 the previous year. This is due to the scheduling of
deliveries on a large contract where we have reverted to supply at
maintenance levels having delivered the initial bulk quantities in
2011.
Our gross profits have improved in our Fraternal and Metals
segments, in textiles it has fallen slightly as our customers
demand evermore competitive pricing. Our labour costs are reduced
from the previous year.
The Company has made a profit of GBP453,872 before taxation. The
major contract previously referred to, which was completed in the
financial year, was a key contributor to this result.
TRADING CONDITIONS
The on-going economic recession continues to influence all our
markets in the UK and overseas. Buyers are cautious and lacking in
confidence. They want the lowest possible price, but are slow to
make the decision to order, which has resulted in reduced
lead-times for manufacture. Customers' demands are increasing in
terms of pre-order design and sampling work, rightly setting the
service of one supplier against another. This adds to our
origination costs before we have even won an order.
Even in our comparatively niche market areas there is increasing
global competition. We are all vying for reduced custom. Success
will depend on our ability to manage our operating costs and
maintain and even expand our operating capabilities. Formidable
challenges for a labour intensive traditional craft business.
It is essential to understand that the majority of our product
and services are bespoke. It is necessary to invest a considerable
amount of time and work before a contract/customer delivers
financial return.
There is enormous publicity and public debate on the 'green'
environmental agenda and human rights - the importance of reducing
our carbon footprint and improving working conditions and pay. You
would think this global agenda would favour a company such as our
own. However the reality is that for our customers it is price that
governs their purchasing decisions not provenance.
The Company response to these challenging trading
conditions:
-- Labour costs have been controlled - though it is important to
note that we need to ensure resilience of our skills base so it has
been necessary to take on apprentices in some key areas
-- Rationalise and improve process in both manufacture and administration
-- Achieve optimum margin on all transactions
-- Focus on increasing profitable sales in all market areas in the UK and overseas
-- Cease to trade in unprofitable product lines or markets or
transfer to solely e-commerce provision for these
-- Further review our establishment and operation costs for the
optimum benefit of the business
In my last annual report I stated that we intended to lease the
retail areas to a high covenant retailer and were close to
completion of the lease contract. This aroused intense interest in
the property from other quarters, and the Company received an offer
from Stability Investments that was so advantageous the Main Board
were persuaded to accept.
The agreement with Stability Investments, which was approved by
Shareholders at a General Meeting on 27 February 2013, is for
eventual purchase of the entire property at Great Queen Street,
London within eighteen months. Against this purchase they have
advanced the Company a significant sum subsequent to the year.
As part of this agreement two new Non-executive Directors have
joined the Main Board. They are Robin Edwards, whose background is
Hedge Fund management and Robert Luck who is a property developer.
They bring considerable commercial experience to the Board.
MANAGEMENT AND STAFF
During the year we have with regret made further redundancies
throughout all tiers of the business including senior
management.
From 1 September 2012 we reduced the weekly hours worked from
37.5 hours to 34 hours. This has resulted in production being
closed on Fridays. The sales and administration staff are working
flexible hours to cover customer services.
It has been challenging for the management to maintain morale
and engender enthusiasm for all the necessary changes. It is a
great compliment to all our staff and their loyalty that we are
successfully delivering improvements in our operation
Apprenticeship is essential to the maintenance and future of our
trade skills, so the Company has welcomed the government and local
authority initiatives to support recruitment of trainees. We have
been actively involved in the establishment of an apprenticeship
scheme with a rigorous curriculum matched to key qualification
stages in the Jewellery Quarter in Birmingham.
We currently have one apprentice in Birmingham, and are soon to
welcome two more. In Bedworth we have one in production and one in
administration. This introduction of fresh talent is essential to
the future of the business and the trades.
Facilities
Our production facilities in the Midlands are unique not only in
what they do, but in their strong ties to their locations. This is
essential when considering the further development of our
production capabilities.
PROGRESS AND OUTLOOK
2012 was an exciting and busy year for our Company as well as
the Nation. The successful delivery of the Queen's Diamond Jubilee
medal contract in collaboration with two other Jewellery Quarter
firms was a highlight, especially in terms of our bottom line. It
was also an incredible thrill and extremely satisfying for all the
employees of the firm to be able to watch the festivities and
ceremonies of the Jubilee year and see items they had made adorning
so many of those involved.
Although we did not contribute directly to the Olympics, apart
from the buttons for the equestrian team, our products have
featured on many other notable sporting occasions such as Henley
Royal Regatta and the FA Cup contests during the year.
We continue to expand our portfolio of brand development work
for retailers in this country and around the world. Our sales team
is concentrating on developing prospects overseas that we are
hopeful will come to fruition in the coming year. After the success
of our work towards the Kremlin restoration last year we are now
part of a new project for a different part of the complex.
We are busy in all our market areas responding to established
customers and acquiring new ones. New customers come to us through
our proactive sales efforts but also due to some of our competitors
failing in these difficult times.
All employees have worked hard to adapt, and continue our drive
to improve performance.
I am delighted to announce that our Company has been awarded
"Apprentice Employer of the Year 2013" by Holts Academy, at a
reception in London's Guildhall. This news came as we were going to
press.
The Board are working together to develop a clear strategy to
achieve a business that is commercially robust and continues to
nurture the range of skills and talents that makes this Company
such a valuable rare breed. Market conditions remain difficult but
we remain resilient.
Fiona Toye
Chief Executive
16 May 2013
Group Statement of Comprehensive Income
for the year ended 31 December 2012
2012 2011
GBP GBP
Revenue 8,936,996 7,981,006
Operating expense (8,416,291) (8,369,796)
------------------------------------------ ------------- -------------
Operating profit/(loss) 520,705 (388,790)
Finance costs (66,833) (50,601)
Profit/(loss) before taxation 453,872 (439,391)
Taxation - -
Profit/(loss) for the year 453,872 (439,391)
------------------------------------------ ------------- -------------
Other comprehensive income
Other comprehensive income - -
for the year
------------------------------------------ ------------- -------------
Total comprehensive income
for the year 453,872 (439,391)
------------------------------------------ ------------- -------------
All of the comprehensive income for the year is attributable
to equity holders of the parent.
All activities relate to continuing operations.
Earnings per share
Earnings/(loss) per share (basic
and diluted) 20.19p (19.55)p
Statements of Financial Position
at 31 December 2012
The Group The Company
2012 2011 2012 2011
GBP GBP GBP GBP
Assets
Non-current assets
Property, plant & equipment 1,959,086 1,934,241 1,858,786 1,802,720
Investments in subsidiary undertakings - - 1,155,852 1,155,852
----------------------------------------- ----------- ----------- ------------- -----------
1,959,086 1,934,241 3,014,638 2,958,572
----------------------------------------- ----------- ----------- ------------- -----------
Current assets
Inventories 1,154,462 1,351,304 - -
Trade and other receivables 1,115,709 968,469 3,041 3,406
Cash and cash equivalents 4,390 5,665 - -
----------------------------------------- ----------- ----------- ------------- -----------
2,274,561 2,325,438 3,041 3,406
----------------------------------------- ----------- ----------- ------------- -----------
Liabilities
Current liabilities
Trade and other payables 1,133,324 1,335,847 946,760 781,414
Current borrowings 559,687 715,977 - -
Current portion of long term
borrowings 120,607 124,724 120,607 124,724
----------------------------------------- ----------- ----------- ------------- -----------
1,813,618 2,176,548 1,067,367 906,138
----------------------------------------- ----------- ----------- ------------- -----------
Net current assets / (liabilities) 460,943 148,890 (1,064,326) (902,732)
----------------------------------------- ----------- ----------- ------------- -----------
Non-current liabilities
Non-current borrowings 742,147 859,121 742,147 859,121
742,147 859,121 742,147 859,121
----------------------------------------- ----------- ----------- ------------- -----------
Net assets 1,677,882 1,224,010 1,208,165 1,196,719
----------------------------------------- ----------- ----------- ------------- -----------
Equity attributable to equity
holders of the parent
Ordinary shares 562,000 562,000 562,000 562,000
Share premium 2,677 2,677 2,677 2,677
Retained earnings 1,113,205 659,333 643,488 632,042
----------------------------------------- ----------- ----------- ------------- -----------
Total equity 1,677,882 1,224,010 1,208,165 1,196,719
----------------------------------------- ----------- ----------- ------------- -----------
Statements of Changes in Equity
for the year ended 31 December
2012
Ordinary Share Retained Total
shares premium earnings equity
GBP GBP GBP GBP
The Group
Balance at 1 January 2011 562,000 2,677 1,098,724 1,663,401
Changes in equity for 2011
(Loss) and total comprehensive
income for the year - - (439,391) (439,391)
Balance at 31 December 2011 562,000 2,677 659,333 1,224,010
Changes in equity for 2012
Profit and total comprehensive
income for the year - - 453,872 453,872
Balance at 31 December 2012 562,000 2,677 1,113,205 1,677,882
---------------------------------- ---------- ---------- ----------- -----------
All equity is attributable to
equity holders of the parent.
The Company
Balance at 1 January 2011 562,000 2,677 1,055,015 1,619,692
Changes in equity for 2011
(Loss) and total comprehensive
income for the year - - (422,973) (422,973)
Balance at 31 December 2011 562,000 2,677 632,042 1,196,719
Changes in equity for 2012
Profit and total comprehensive
income for the year - - 11,446 11,446
Balance at 31 December 2012 562,000 2,677 643,488 1,208,165
---------------------------------- ---------- ---------- ----------- -----------
Statements of Cash Flows
for the year ended 31 December
2012
The Group The Company
2012 2011 2012 2011
GBP GBP GBP GBP
Cash flows from/(used by) operating
activities
Cash generated from operating
activities 464,475 232,281 211,778 121,855
Interest received - - 72,000 159,922
Interest paid (66,833) (50,601) (66,833) (50,601)
--------------------------------------- ------------- ------------- ----------- -------------
Net cash generated from operating
activities 397,642 181,680 216,945 231,176
--------------------------------------- ------------- ------------- ----------- -------------
Cash flows from investing activities
Purchase of property, plant
and equipment (121,536) (40,149) (95,854) -
Proceeds from sale of property,
plant and equipment - 10,873 - -
--------------------------------------- ------------- ------------- ----------- -------------
Net cash flows (used in) investing
activities (121,536) (29,276) (95,854) -
--------------------------------------- ------------- ------------- ----------- -------------
Cash flows from financing activities
Repayment of borrowings (121,091) (122,012) (121,091) (122,012)
--------------------------------------- ------------- ------------- ----------- -------------
Net cash flows (used in) financing
activities (121,091) (122,012) (121,091) (122,012)
--------------------------------------- ------------- ------------- ----------- -------------
Net increase in cash and cash
equivalents 155,015 30,392 - 109,164
Cash and cash equivalents at
the beginning of the year (710,312) (740,704) - (109,164)
--------------------------------------- ------------- ------------- ----------- -------------
Cash and cash equivalents at
the end of the financial year (555,297) (710,312) - -
--------------------------------------- ------------- ------------- ----------- -------------
1 Basis of preparation
These consolidated financial statements have been prepared in accordance
with IFRS and International Financial Reporting Interpretations Committee
("IFRIC") interpretations as adopted by the European Union, and those
parts of the Companies Act 2006 applicable to companies reporting
under IFRS.
2. Segmental reporting
In identifying its operating segments, management generally follow
the manufacturing or sourcing of the products.
The Group operates in the supply of identity products to a large
and varied market and customer base. The type of products sold into
this market generally fall under either a textile or metals (including
corporate gifts) umbrella. The exception to this being the friendly
societies market.
Each of the textile, metals and friendly societies operating segments
is managed separately as each of these segments requires different
resources and core skills. All transfers between the segments are
carried out at cost.
The measurement policies the Group uses for segment reporting under
IFRS 8 are the same as those used in its financial statements.
Management currently identifies three units as operating segments
as described above. These operating segments are monitored and strategic
decisions are made on the basis of segment operating results.
Textiles Friendly societies Metals Total
2012 2012 2012 2012
GBP GBP GBP GBP
Revenue 3,140,400 1,049,822 4,746,774 8,936,996
----------------------------- ----------- -------------------- ----------- -----------
Gross profit 1,503,728 384,028 2,156,602 4,044,358
Works overheads 538,755 47,744 564,104 1,150,603
----------------------------- ----------- -------------------- ----------- -----------
Manufacturing contribution
by segment 964,973 336,284 1,592,498 2,893,755
----------------------------- ----------- -------------------- -----------
Selling and administration costs 2,207,490
-----------
Profit before finance and costs associated with AIM the listing 686,265
Costs associated with the
AIM listing 83,377
Other bank charges and leasing costs 82,183
Interest 66,833
------------------------------------------ -------------------- ----------- -----------
Net profit 453,872
----------------------------- ----------- -------------------- ----------- -----------
Textiles Friendly societies Metals Total
2011 2011 2011 2011
GBP GBP GBP GBP
Revenue 3,641,625 911,162 3,428,219 7,981,006
------------------------------------------- --------------- ------------- ---------------- -------------
Gross profit 1,617,241 267,475 1,344,741 3,229,457
Works overheads 526,256 94,472 663,739 1,284,467
------------------------------------------- --------------- ------------- ---------------- -------------
Manufacturing contribution
by segment 1,090,985 173,003 681,002 1,944,990
------------------------------------------- --------------- ------------- ----------------
Selling and administration costs 2,178,368
-------------
Loss before finance and costs associated with the AIM listing (233,378)
Costs associated with the AIM
listing 83,530
Other bank charges and leasing costs 71,882
Interest 50,601
--------------------------------------------------------------------- ---- ---------------- -------------
Net loss (439,391)
------------------------------------------------- ---- ------------ ---- ---------------- -------------
The Group's revenues from external customers are divided into the following
geographical markets:
2012 2011
GBP GBP
United Kingdom 7,256,232 6,110,057
Rest of World 1,680,764 1,870,949
---------------- -------------
8,936,996 7,981,006
---------------- -------------
All non-current assets are held within the United Kingdom. Additions
to fixed assets are disclosed in note 11.
During 2012, GBP1,955,450 or 21.9% of the Group's revenues depended
on a single customer whose sales were made from the metals segment.
During 2011 no single customer accounted for more than 10% of the Group's
revenue.
The assets of the business have been attributed to the segments on
the following basis.
Textiles Friendly societies Metals Total
2012 2012 2012 2012
GBP GBP GBP GBP
Inventories 624,088 258,746 271,628 1,154,462
Unallocated assets 3,079,185
Unallocated liabilities (2,555,765)
2011 2011 2011 2011
GBP GBP GBP GBP
Inventories 665,588 281,326 404,390 1,351,304
Unallocated assets 2,908,375
Unallocated liabilities (3,035,669)
Non-current assets are not allocated between segments.
All segments of the Group sell into the same markets and share many
of the same customers and thus receivables are not attributed to the
individual business segments.
Similarly all segments of the Group purchase from the same suppliers
and as such the trade payables are not attributed to the business segments.
Borrowing and finance costs are arranged centrally by the Group and
are not attributed to the business segments.
3. Operating expenses by nature
2012 2011
GBP GBP
Changes in inventories of finished goods and
work in progress 199,824 (47,094)
Raw materials and consumables used 3,697,883 3,780,877
Employee benefits 2,930,599 3,121,532
Depreciation - owned assets 96,691 93,977
Audit and non-audit services 36,350 34,545
Hire of plant and machinery 35,599 21,442
Other expenses 1,419,345 1,364,517
------------------------------------------------ ----------- -----------
8,416,291 8,369,796
------------------------------------------------ ----------- -----------
Included in cost of raw materials and consumables used is a credit
of GBP19,209 (2011: credit GBP9,146) in respect of the movement in
the inventory provision.
4. Profit for the financial year
The profit dealt with in the accounts of the Parent Company was GBP11,446
(2011: GBP422,973 loss). The Parent Company had no other comprehensive
income for the year other than the profit for the year (2011: GBPnil).
5. Earnings per ordinary 25p
share
The earnings per ordinary 25p share is based on the profit or loss
after taxation and the average number of shares in issue throughout
the year.
2012 2011
Profit/(loss) GBP453,872 GBP(439,391)
Average number of shares in
issue 2,248,000 2,248,000
Profit/(loss) per share - basic
and diluted 20.19p (19.55)p
There were no potentially dilutive ordinary
shares in issue.
6. Share Capital
2012 2011
GBP GBP
Authorised
3,000,000 Ordinary shares
of 25p each 750,000 750,000
----------------------------- ----------- -----------
Allotted and fully paid
2,248,000 Ordinary shares
of 25p each 562,000 562,000
----------------------------- ----------- -----------
7. Cash generated from/(used by) operating activities
The Group The Company
2012 2011 2011 2011
GBP GBP GBP GBP
Operating profit/(loss) 520,705 (388,790) 6,279 (532,294)
Depreciation - property, plant
and equipment 96,691 93,977 39,788 39,020
(Profit) on sale of fixed assets - (125) - -
Addition to provision against
investments - - - 409,390
(Increase) in loans to group
companies - - - (98,228)
Decrease/(increase) in inventories 196,842 (17,486) - -
(Increase)/decrease in trade and
other receivables (147,240) 692,173 365 1,861
(Decrease)/increase in trade and
other payables (202,523) (147,468) 165,346 302,106
------------------------------------- ----------- ----------- --------- -----------
464,475 232,281 211,778 121,855
------------------------------------- ----------- ----------- --------- -----------
8. Events after the reporting period
On 28 January 2013 the Company entered into an unconditional loan
facility agreement, legal charge, and conditional sale agreement
to dispose of its leasehold property at 19-21 Great Queen Street
("the Property") to Stability Investments Limited for a consideration
of at least GBP2.75 million. At 31 December 2012 the Property had
a carrying value of GBP945,000. The Company may be entitled to additional
consideration of GBP500,000 and a share of any ultimate development
profit relating to the Property.
Loan Facility Agreement and Legal Charge
The loan facility agreement provides that Stability Investments Limited
advances to the Company an amount of up to GBP2.5 million. This advance
is secured by a legal charge and all other outstanding charges over
the Company's interest in the Property have been redeemed.
Of the advance, GBP2,000,000 has been paid to the Company on 28 January
2013. The balance of the advance, some GBP500,000, is available to
be released to the Company, in line with the business plan.
GBP2,000,000 of the advance has been applied by the Company to repay
in full the indebtedness of the Group to Lloyds TSB Bank plc and
to meet the working capital requirements of the Group.
The advance attracts compound interest at a rate of 3.75 per cent
above the Bank of England base rate.
Under the terms of the loan facility agreement, two representatives
of Stability Investments Limited, Robin Edwards and Robert Luck,
have been appointed as Non-Executive Directors of the Company subsequent
to the year end.
Sale Agreement
The sale agreement provides that Stability Investments Limited shall
on or before 18 months from the date of the sale agreement acquire
the Company's interest in the Property. The purchase price is payable
on completion of the transfer of the Company's interest in the Property,
which is then applied to repay in full amounts advanced under the
loan facility agreement, and accrued interest. The Company's entitlement
to such additional consideration and/or to any share of development
profit is contingent upon certain future events occurring which,
if they occur, will be payable at future dates which cannot yet be
determined.
The financial information, which has been prepared on the same
basis as set out in the 2011 Annual Accounts, does not constitute
statutory accounts as defined in section 435 of the Companies Act
2006. The financial information for the year ended 31 December 2012
has been extracted from the statutory accounts on which an
unqualified audit opinion has been issued. Statutory accounts for
the year ended 31 December 2012 will be delivered to the registrar
in due course. The comparative financial information is based on
the statutory accounts for the financial year ended 31 December
2011. Those accounts, upon which the auditors issued an unqualified
opinion, have been delivered to the registrar of companies.
The Report and Accounts will be posted later today to
Shareholders and the Annual General Meeting will be held on 18 June
2013 at 12.30 pm at the company's offices at 77 Warstone Lane,
Birmingham B18 6NL. The Report and Accounts will also be available
from the Company's website, www.toye.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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