Interim Results
September 27 2001 - 3:30AM
UK Regulatory
RNS Number:7190K
Wensum Company PLC
27 September 2001
The Wensum Company Plc
Interim Results for the six months ended 28 July 2001
Chairman's Statement
Results
Profits before tax were #552,831 (2000 - #1,148,789) on turnover of #7,762,355
(2000 - #7,923,818).
Earnings per share were 4.93p (2000 - 10.34p).
This is a disappointing result but is in line with indications made in the
chairman's statement in the January 2001 Report and Accounts in which it was
stated that the board anticipated continued pressure on turnover and margins,
particularly in the first half of the year. Additionally, in a subsequent
trading statement issued on 18 June 2001 it was reported that the results for
the year to 26 January 2002 were expected to be substantially below market
expectations.
We continue to have nil net gearing, with cash balances at the end of the
period under review standing at #2,041,996, an increase of #500,591 since the
start of the financial year.
The directors are recommending an interim dividend of 2.00p (2000 - 2.65p).
This will be paid on 11 October 2001 to all shareholders on the register on 5
October 2001.
Review of Operations
Wensum Corporate, our Gatwick based corporatewear operation, experienced a
difficult first half, with margins under pressure as the benefits of sourcing
production offshore are gradually being eroded by the increasingly competitive
nature of the industry.
In May this year British Airways selected Wensum to take responsibility for
supplying their external corporatewear customers, providing Wensum with a
foundation to develop a wider customer base. This new business opportunity
will accelerate plans to develop further our computer systems and internet
ordering processes. This service will complement our highly successful
customer order collection facility part of our Gatwick site.
Wensum Clothing, our Norwich based tailored clothing manufacturing company,
also experienced a difficult first half, reflecting increased pressure on
margins from the continued strength of sterling against our key European
competitors.
In addition, the reduced production levels referred to in the June trading
statement are proving more difficult to reverse than anticipated, despite an
increase in demand experienced in the last few weeks.
The planned development of the higher added value personal tailoring business
is proceeding extremely well with orders currently up 32% on the same time
last year. The #250,000 investment in new equipment and systems to accelerate
the development of personal tailoring is at the final stages of implementation
and is expected to be fully operational by late November. The board believes
that this should reduce lead times and substantially increase capacity for
personal tailoring.
Outlook
We continue to invest in machinery and systems to benefit from the
opportunities of developing added value products and services.
There are clear signs that the "dress down" trend is weakening and many of our
retail customers are reporting increased sales and a renewed interest in
suits. This should provide opportunities for future growth in our
manufacturing business, although this will not be reflected in this year's
results.
The board believes that the pressures faced in the first half will continue
into the second half. The recent tragedy in America is already affecting our
corporatewear business, particularly those customers in the airline and travel
sector. Consequently the full year results are likely to be significantly
below market expectations.
Andrew Hughes
Chairman
27 September 2001
Group Profit and Loss Account
6 months 6 months 12 months
ended ended ended
28 July 2001 29 July 2000 27 January 2001
(Unaudited) (Unaudited) (Audited)
#000 #000 #000
Turnover 7,762 7,924 15,606
------- ------- --------
Operating profit 514 1,114 1,859
Net interest 39 35 67
------- ------- --------
Profit before taxation 553 1,149 1,926
Tax charge (166) (345) (643)
------- ------- --------
Profit after taxation 387 804 1,283
Dividends (157) (206) (485)
------- ------- --------
Retained profit 230 598 798
------- ------- --------
Earnings per share
- basic 4.93p 10.34p 16.48p
- diluted 4.92p 10.30p 16.45p
------- ------- --------
1. The earnings per share were calculated on profits for the period of
#386,982 (2000 - #804,152) and on 7,852,231 ordinary shares, being the
weighted average number of shares in issue during the period (2000 -
7,751,806). The diluted earnings per share is based on the profit for the
period of #386,982 and on 7,860,340 ordinary shares.
2. An interim dividend of 2.00p (2000 - 2.65p) will be paid on 11 October 2001
to shareholders on the register on 5 October 2001.
3. The tax charge for the six months to 28 July 2001 is based on an estimated
rate of 30% (2000 - estimated rate 30%). The tax charge for the year to 27
January 2001 is the actual charge.
Group Balance Sheet
28 July 29 July 27 January
2001 2000 2001
(Unaudited) (Unaudited) (Audited)
#000 #000 #000
Fixed assets 2,147 2,223 2,165
Current assets
Stocks 1,842 2,619 2,240
Debtors 3,472 2,272 3,334
Cash at bank and in hand 2,042 2,480 1,541
------- ------- -------
7,356 7,371 7,115
Creditors: amounts falling due within one
year 2,627 2,879 2,644
------- ------- --------
Net current assets 4,729 4,492 4,471
------- ------- -------
Total assets less current liabilities 6,876 6,715 6,636
Creditors: amounts falling due after more
than one year - 437 -
Deferred taxation 289 178 289
------- ------- --------
6,587 6,100 6,347
------- ------- -------
Capital and reserves
Called up share capital 392 389 392
Share premium account 200 146 190
Profit and loss account 5,995 5,565 5,765
------- ------- -------
6,587 6,100 6,347
------- ------- -------
1. The above financial information does not constitute Statutory Accounts as
defined in Section 240 of the Companies Act 1985. The comparative
financial information is based on the Statutory Accounts for the financial
year ended 27 January 2001. Those accounts, upon which the auditors issued
an unqualified opinion, have been delivered to the Registrar of Companies.
2. The accounts have been prepared on a basis consistent with the full year
accounts to 27 January 2001. There have been no changes in accounting
policy. The Accounting Standard FRS19 - deferred tax has been adopted in
these accounts, however no prior year adjustment has been necessary
because the impact was not material.
3. The interim results will be sent to shareholders of the company and copies
will be available to the public at the company's registered office,
Northumberland Street, Norwich, Norfolk NR2 4EE.
Group Cash Flow Statement
6 months 6 months 12 months
ended ended ended
28 July 29 July 27 January
2001 2000 2001
(Unaudited) (Unaudited) (Audited)
#000 #000 #000
Net cash inflow from operating 980 875 1,216
activities
Returns on investment and servicing of
finance:
Interest paid (10) (25) (49)
Interest received 112 60 29
------- ------- -------
102 35 (20)
------- ------- -------
Taxation:
UK corporation tax paid (155) (224) (629)
Capital expenditure and financial
investment:
Payments to acquire tangible fixed (157) (106) (206)
assets
Equity dividends paid (279) (327) (532)
Financing:
Repayment of loan account - (63) (625)
Proceeds from issue of shares 10 4 52
------- ------- -------
10 (59) (573)
------- ------- -------
------- ------- -------
Increase/(decrease) in cash 501 194 (744)
------- ------- -------
Notes to Cash Flow
6 months 6 months 12 months
ended ended ended
28 July 29 July 27
2001 2000 January
2001
(Unaudited) (Unaudited) (Audited)
#000 #000 #000
Reconciliation of operating profit to net
cash inflow from operating activities
Operating profit 514 1,114 1,859
Depreciation 176 182 347
Decrease/(increase) in stocks 398 (471) (92)
(Increase)/decrease in operating
debtors and prepayments (212) 76 (878)
Increase/(decrease) in creditors and
accruals 104 (26) (13)
Profit on disposal of fixed assets - - (7)
------- ------- -------
980 875 1,216
------- -------- -------
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