RNS Number:4497Q
Bakery Services PLC
24 August 2005
Bakery Services PlC
Final Results - Amendment
The following replaces the final results announcement (RNS number: 4446Q)
released 13.04, 24 August 2005.
The previous announcement erroneously referred to capital expenditure in the
year to 31 March 2005 of #112,985 rather than #122,985 in the group cashflow
statement.
Bakery Services plc preliminary results for the year ended 31 March 2005
2005 HIGHLIGHTS
. Sales decline 7% to #3,374,145 (2004 - 3,629,363).
. Like-for-like sales growth +2.5% (2004 - +0.3%).
. Pre-tax profit before fixed asset impairment charge #126,580 (2004 - 57,880
loss).
. Legal claim settled for #400,000 before expenses.
. Development of Millers Eating Experience project abandoned.
CHAIRMAN'S STATEMENT
Overview
Trading Results
The year under review has been a mixture of disappointment and
success.
During the year the group launched the new Don Millers trading format Millers
Eating Experience at a trial store in Birmingham. As announced earlier in the
year, and after careful evaluation of initial trading results, your Board
decided that the trial store should be closed and further development of the
project abandoned. Your Board has always been of the view that the likelihood of
long-term success with this new trading format would become evident very shortly
after launch. Thus, given the poor initial results, a decision to terminate the
project was made to save further depletion of the Group's cash reserves. The
unit was closed on 13 October 2004. The total cost of this project has been
written off in the current financial statements as detailed below.
A major success during the year was securing closure of the long running legal
dispute relating to the acquisition of the Don Millers business in March 2000
(addressed extensively in previous reports). As announced earlier in the year,
this was settled in favour of the Group in an amount of #400,000. In your
Board's view this amount was considerably less than the economic loss sustained
by the Group in respect of the claims made. However the alternative of a
protracted and potentially costly court process would not in your board's view
have been in shareholders best interests. It is however difficult to over
estimate the negative impact this matter has had (and may well continue to have)
on the Group's overall financial performance.
As detailed below the Group's in-store bakery business - Inbake Limited
had a successful year's trading. Although total revenues continued to decline as
a result of further closures of host stores, the company's combined share of
host store revenues improved, as did gross margins.
The franchised units at Don Miller also performed satisfactorily but once again
the 2 managed units in the portfolio remained loss making. One unit was closed
in December 2004 and the lease (which expired in March 2005) has not been
renewed. A breakdown of the Don Millers financial performance is set out below.
Trading Results
Total Group sales for the year ended 31 March 2005 were #3,374,145 (2004 -
#3,629,363) broken down as follows:
2005 2004
# #
Inbake Limited 2,763,923 2,963,483
Don Millers Limited 610,222 665,880
_________ _________
Total 3,374,145 3,629,363
======== ========
Inbake Limited
The anticipated decline in sales revenues from the Group's in-store bakery
business, Inbake Limited, continues the pattern of prior years and is in the
main due to host store closures. However during the year like-for-like store
sales grew by 2.5% (2004 - growth 0.3%) and the company's participation of host
store sales continued to improve.
Gross margins also improved for the fourth consecutive year running to 41.1%
(2004 - 38.1%). Despite the fall in sales revenue, Inbake still achieved an
operating profit of #171,031 (2004 - #312,465), which is stated after charging
#26,724 (2004 - #35,000) of one-off closure and related costs.
Once again these results are a considerable credit to our team at Inbake lead by
Colin Taylor.
Don Millers Limited
Franchise revenue in Don Millers Limited is received in the form of fees based
on the underlying turnover of each franchise business.
Underlying sales revenues in the year generated by Don Millers franchisees were
#3.1M (2004 - #3.2M).
Don Millers revenues are split as follows:
2005 2004
# #
Franchise income 7 units (2004 - 7) 199,282 205,782
Managed store sales 1 unit (2004 - 2) 410,940 460,098
_________ _________
Total company 610,222 665,880
======== ========
Overall franchise fee income declined 3.2% due to the Nottingham store reverting
to company management. Total fee income from other stores was broadly flat
compared to the prior year.
Operating profits for Don Millers, before Group management charges, are broken
down as follows:
2005 2004
# #
Operating profit franchise stores 60,692 65,704
Operating loss managed stores (67,521) (35,204)
Millers experience (total costs) (219,947) -
Legal claim settlement 400,000 -
_________ _________
Total company 173,224 30,500
======== ========
Total costs of #219,947 shown above for Millers Eating Experience include all
trading losses, development and closing costs relating to this venture.
Group Summary
Retained losses for the year were #55,854 (2004 - #57,880) made up as follows:
2005 2004
# #
Operating loss (47,594) (59,324)
Interest receivable/(payable) net (8,260) 1,444
_________ _________
Retained loss for year (55,854) (57,880)
======== ========
Basic losses per share were 0.04p (2004 - 0.04p loss).
Cash at bank and in hand at 31 March 2005 was #47,444 (2004 - #232,796). This
position is significantly enhanced by #109,858 (2004 - #97,053) of total debtors
representing cash collected by third parties. During April 2005, the Group
received cash of #384,890, being the net amount of the legal claim settlement
referred to earlier in this statement.
The Group's Balance Sheet remains materially debt free (other than trade
related). Bank overdraft facilities (recently renewed) of #50,000 are available
to the Group.
Your Board proposes no dividend for the year.
Operational Review Bakery Division - Inbake
The Company's principal customer base remains the various regions of the
Co-operative Group (CWS) Limited. Outlets are generally operated as in-store
bakery concessions within supermarkets and are located in England and Northern
Ireland.
Bakery concessions fall into three classifications broadly reflecting activity.
. "Scratch" bakeries where the finished product is made from ingredients mixed
and baked as one process by craft bakers. These bakeries are equipped with
Company assets and operated by Company staff.
. "Mini" bakeries where French bread and rolls are finished, cream cakes are
made and traditional breads delivered from one of our "scratch"bakeries.
. "Satellites" where all products are "delivered-in" from one of our
"scratch" bakeries.
Sales from most outlets are made direct to the consumer and the cash collected
through the checkout tills of the host supermarket.
During the year one 'scratch'bakery closed following the sale of the CWS host
store. This has resulted in an estimated annual loss of sales revenue to Inbake
of some #200,000, which includes sales from 4 satellite stores that can no
longer be supplied following the scratch bakery closure.
As indicated in previous reports, revenues for Inbake continue to decline as its
principal customer, the CWS, increasingly focuses on smaller market town stores.
We expect this trend to continue.
However Inbake business is profitable and is expected to remain so unless the
rate of host stores closures increases.
It is possible that further CWS stores, in which Inbake trades may, at some
point in the future, be sold or close. However as at July 2005 the Company had
not been advised by CWS of any further store closures.
Your Board's challenge in respect of the Inbake business remains to manage the
revenue decline in a way that maximises cash flow and profit yet is consistent
with maintaining the Company's high standard of customer service.
Franchise Division - Don Millers
Don Millers Limited operates 7 retail bakery and sandwich cafe franchises from
high street and shopping centre locations, predominantly in the Midlands and
north of England, under the brand name Don Millers.
Don Millers is an established retail bakery business which has been trading
since 1972. Your Board believes that the brand has strong consumer awareness and
can be revitalised into a viable franchise business.
You Board is actively seeking new sites for franchising.
Future Prospects
In the current financial year both the Group's businesses are trading in line
with your Board's expectations. Your Board continues to review opportunities for
enhancing shareholder value.
Richard D. Worthington
Non-Executive Chairman and Financial Director
24 August 2005
Consolidated Profit and Loss Account for the year ended 31 March 2005
2005 2004
# #
Turnover 3,374,145 3,629,363
Cost of sales (1,943,035) (2,166,245)
__________ __________
Gross profit 1,431,110 1,463,118
Distribution costs (339,334) (435,858)
Administrative expenses (1,366,461) (1,086,584)
Other operating income 409,525 -
Impairment charge against tangible
fixed assets (182,434) -
__________ __________
Operating loss (47,594) (59,324)
Interest receivable 902 5,924
Interest payable (9,162) (4,480)
__________ __________
Loss on ordinary activities before tax (55,854) (57,880)
Taxation on profit on ordinary activities - -
__________ __________
Retained loss for the period (55,854) (57,880)
========= =========
Loss per share
- Basic (0.04p) (0.04p)
- Fully diluted (0.04p) (0.04p)
Statement of total recognised gains and losses for the year ended
31 March 2005
The company has no recognised gains or losses other than the loss for the
above two financial years.
Consolidated balance sheet as at 31 March 2005
2005 2004
# #
Fixed assets
Tangible assets 216,402 346,916
________ ________
216,402 346,916
Current assets
Stocks 92,574 131,549
Debtors 560,818 373,927
Cash at bank and in hand 47,444 232,796
________ ________
700,836 738,272
Creditors: amounts falling due within one year (423,358) (651,382)
________ ________
Net current assets 277,478 86,890
________ ________
Total assets less current liabilities 493,880 433,806
Creditors: amounts falling due after more than one
year (40,845) (24,667)
________ ________
Net assets 453,035 409,139
======= =======
Capital and reserves
Called up share capital 175,833 140,833
Share premium 2,633,912 2,569,162
Profit and loss account (2,356,710) (2,300,856)
________ ________
Shareholders' funds - all equity 453,035 409,139
======= =======
Approved and signed on behalf of the Board of Directors on 24 August 2005.
Keith A. Bentley Richard D. Worthington
Director Director
Group cash flow statement from the period 1 April 2004 to 31 March 2005
2005 2004
# #
Net cash outflow from operating activities (38,805) (252,812)
Returns on investments and servicing of finance (8,260) 1,444
Capital expenditure (122,985) 183,848
________ ________
(170,050) (67,520)
Equity dividends paid - -
________ ________
(170,050) (67,520)
Financing 66,874 (20,968)
________ ________
Decrease in cash (103,176) (88,488)
======= =======
Reconciliation of net cash flow to movement in net debt
Decrease in cash in the period (103,176) (88,488)
Decrease in debt and lease financing 32,876 20,968
New finance leases (64,138) (45,159)
Redemption of finance leases - 7,106
________ ________
Change in net debt (134,438) (105,573)
Net(debt)/funds at 1 April (9,749) 95,824
________ ________
Net debt at 31 March (144,187) (9,749)
======= =======
NOTES TO THE FINANCIAL STATEMENTS
1. Preliminary Results
These preliminary results have been extracted from the Company's audited
accounts which have been approved and signed by the directors and auditors,
but have not yet been delivered to the Registrar of Companies. The audited
accounts have been prepared under the historical cost convention using the
accounting policies set out in the Company's 2005 financial statements.
2. Movements on shareholders funds
2005 2004
# #
At 1 April 409,139 467,019
Retained loss (55,854) (57,880)
Net proceeds of share issue 99,750 -
__________ __________
As at 31 March 453,035 409,139
======== ========
3. Share capital
2005 2004
Authorised:
Ordinary shares of 0.1 pence
each 250,000,000 250,000,0000
=========== ===========
2005 2004 2005 2004
Number Number # #
Allotted, called up and
fully paid:
Ordinary shares of 0.1
pence 175,833,333 140,833,333 175,833 140,833
each
=========== =========== ======= =======
4. Movements in share capital
2005 2004
# #
At 1 April 140,833 140,833
Shares issued in the period 35,000 -
________ ________
As at 31 March 175,833 140,833
======== ========
5. Share premium account
2005 2004
# #
At 1 April 2004 2,569,162 2,569,162
Premium on shares issued 70,000 -
Expenses of share issue (5,250) -
________ ________
As at 31 March 2005 2,633,912 2,569,162
======== ========
6. Earnings per share
Earnings per ordinary share is calculated as follows:-
Basic Fully diluted
2005 2004 2005 2004
# # # #
Loss attributable to
ordinary shareholders (55,854) (57,880) (55,854) (57,880)
Weighted average
number of ordinary
shares 155,121,004 140,833,333 155,121,004 140,833,333
Earnings per ordinary
share (0.04p) (0.04p) (0.04p) (0.49p)
========= ========= ========= =========
7. Post Balance Sheet Event
In August 2005, the Company received a legal claim for breach of contract from
its former design consultants who acted on the Millers Experience project. The
Company has taken legal advice and on the basis of this advice the Directors
believe that the claim is unfounded. In addition the Directors have been further
advised that the Company has grounds for a substantial counterclaim in addition
to defending the claim against the Company.
8. 2005 Report and Accounts
The 2005 report and accounts will be published and copies sent to shareholders.
Further copies will be available from the nominated adviser: Smith & Williamson
Corporate Finance Limited, 25 Moorgate, London, EC2R 6AY.
9. Copy of Announcement
A copy of this announcement will be available from the nominated adviser: Smith
& Williamson Corporate Finance Limited, 25 Moorgate, London, EC2R 6AY for one
month from the date of this announcement
This information is provided by RNS
The company news service from the London Stock Exchange
END
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