RNS Number:7160A
Bakery Services PLC
24 July 2007
Bakery Services plc
24 July 2007
Bakery Services plc preliminary results for the year ended 31 March 2007
HIGHLIGHTS
*Sales increase 3% to #3,225,476 (2006 - #3,120,836).
*Pre-tax loss of #124,985 (2006 - #143,550).
*Net cash inflows from operating activities #74,404 (2006 - #175,275).
CHAIRMAN'S STATEMENT
Overview
The results for the year are disappointing.
The reported Group loss of #124,985 is for the most part attributable to losses
incurred by Don Millers Limited. These losses are due to three factors:
Firstly, as previously announced, Don Millers Limited incurred an exceptional
administration charge of #45,000 in the period.
Secondly, the disposal of the lease at Temple Row, Birmingham, referred to in
previous statements, was finally completed in October 2006. This resulted in a
charge for the current year of #35,611.
Thirdly, trading losses at the Victoria Centre amounted to #42,496. In May 2006
a refit of this unit was completed and trading results since then have shown
improvement.
Without the above costs, the financial outcome for the year would have been
close to breakeven with the two operating companies performing close to your
Board's expectations.
For some time your Board has indicated that, given the underlying long term
decline of the Group's Inbake business and the lack of capital to expand the Don
Millers franchise business, it would be exploring opportunities outside the
Group to enhance shareholder value.
During the year and subsequently, a number of potential opportunities have been
assessed. Whilst to date none of these have been considered to be sufficiently
robust to put to shareholders, your Board remains committed to identifying an
opportunity capable of being recommended to shareholders.
In order to ensure that the Board is able to secure additional equity funding
for the evaluation and finalisation of any such opportunity that may materialise
in the coming year, a resolution will be proposed at the Annual General Meeting
to be held on 23 August 2007 to increase the authorised share capital of the
Company to #500,000 and to provide the Directors with authority to allot up to a
further 200 million ordinary shares in the Company, whether for cash or a
consideration other than cash. A special resolution will also be proposed to
disapply the statutory pre-emption rights in relation to any allotment of such
shares for cash, so as to provide the Board with flexibility to raise further
capital by means of a placing of new ordinary shares, if thought to be in the
Company's interests to do so.
The Directors unanimously recommend that you vote in favour of such resolutions
as they intend to do in respect of their own beneficial holdings amounting to
32,057,333 ordinary shares of the Company, representing 18.23 per cent. of the
current issued share capital.
Trading Results
Total Group sales for the year ended 31 March 2007 were #3,225,476 (2006 -
#3,120,836) broken down as follows:
2007 2006
# #
Inbake Limited 2,691,981 2,614,292
Don Millers Limited 533,495 506,544
--------------- --------------
Total 3,225,476 3,120,836
--------------- --------------
Inbake Limited
The Group's in-store bakery business, Inbake Limited, increased revenues by 3%
over the prior year and in most host stores increased total store sales
participation. This very modest sales increase needs to be seen against the
Company's host stores continuing to lose market share to larger retailers.
Gross margins were slightly improved at 42.2% (2006 - 41.1%). Operating profits
before Group management charges at Inbake Limited improved to #278,091 against
#240,500 for the prior year same period.
Once again these results are a considerable credit to our team at Inbake, led by
Colin Taylor.
The Directors have recently become aware of a potentially significant
competitive threat to the viability of an Inbake host store in the South East
region. If this threat were to materialise, this could have a material adverse
impact on the future of Inbake's operations in the South East region.
Don Millers Limited
Franchise revenue at Don Millers Limited is received in the form of fees based
on the underlying turnover of each franchise business.
Its revenues are split as follows:
2007 2006
# #
Franchise income 6 units (2006 - 6) 180,733 189,948
Managed store sales 1 unit (2006 - 1) 352,762 316,596
-------------- -------------
Total company 533,495 506,544
-------------- -------------
Underlying sales revenues in the year generated by Don Millers franchisees were
down by approximately 8% at #2.75M (2006 - #3.0M) after the closure
of one store during January 2006.
Overall franchise fee income declined 5% partly due to the disposal of one unit
during the prior year. Total fee income from other stores was broadly flat
compared to the prior year.
Operating losses for Don Millers Limited, before Group management charges, are
broken down as follows:
2007 2006
# #
Operating profit franchise stores 94,034 124,602
Operating loss managed stores (42,496) (55,453)
Millers Experience (total costs) (35,611) (68,194)
Legal claim settlement (45,000) -
-------------- -------------
Total company (29,073) 955
-------------- -------------
Total costs of #35,611 shown above for Millers Eating Experience represents
additional rent incurred up to the date of disposal of the retail premises at
Temple Row, Birmingham, referred to earlier in this report.
Group Summary
Retained losses for the year were #124,985 (2006 - #143,550) made up as follows:
2007 2006
# #
Operating loss (121,858) (139,378)
Interest (payable) net (3,127) (4,172)
-------------- -------------
Retained loss for year (124,985) (143,550)
-------------- -------------
Basic losses per share were 0.07p (2006 - 0.08p loss).
Cash at bank and in hand at 31 March 2007 was #48,282 (2006 - #116,283).
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.
Future Prospects
Your Board remains of the view that the present trading activities of the Group
offer little opportunity for growth. As a result the Directors are committed to
identifying suitable alternative opportunities for enhancing shareholder value
and, as explained above, are seeking additional authority at the Annual General
Meeting to issue further ordinary shares as a means of ensuring the Company
retains funding flexibility in the pursuit of any suitable such opportunity.
Richard D. Worthington
Non-Executive Chairman
24 July 2007
Group Profit and Loss Account for the year ended 31 March 2007
2007 2006
Note # #
Turnover 3,225,476 3,120,836
Cost of sales (1,793,408) (1,758,319)
----------- -----------
Gross profit 1,432,068 1,362,517
Distribution costs (354,555) (335,849)
Administrative expenses (1,199,371) (1,166,046)
----------- -----------
Operating loss (121,858) (139,378)
Interest receivable 761 526
Interest payable (3,888) (4,698)
----------- -----------
Loss on ordinary activities before taxation (124,985) (143,550)
Taxation on loss on ordinary activities - -
----------- -----------
Retained loss for the period (124,985) (143,550)
----------- -----------
Loss per share
- Basic 3 (0.07p) (0.08p)
- Fully diluted 3 (0.07p) (0.08p)
The Group's turnover and expenses all relate to continuing operations.
Statement of Total Recognised Gains and Losses for the year ended
31 March 2007
The Group has no recognised gains or losses other than the loss for the above
two financial years.
Group Balance Sheet as at 31 March 2007
2007 2006
Note # #
Fixed assets
Tangible assets 149,857 159,183
Current assets
Stocks 86,590 86,332
Debtors 208,555 310,484
Cash at bank and in hand 48,282 116,283
----------- -----------
343,427 513,099
Creditors: amounts falling due within one year (303,728) (344,442)
----------- -----------
Net current assets 39,699 168,657
----------- -----------
Total assets less current liabilities 189,556 327,840
Creditors: amounts falling due after more than
one year (5,056) (18,355)
----------- -----------
Net assets 184,500 309,485
----------- -----------
Capital and reserves
Called up share capital 175,833 175,833
Share premium 2,633,912 2,633,912
Profit and loss account (2,625,245) (2,500,260)
----------- -----------
Shareholders' funds - all equity 2 184,500 309,485
----------- -----------
Company Balance Sheet as at 31 March 2007
2007 2006
# #
Fixed assets
Tangible assets 1,179 1,179
Current assets
Debtors 71,669 101,058
Cash at bank and in hand - 590
----------- -----------
71,669 101,648
Creditors: amounts falling due within one year (20,859) (21,325)
----------- -----------
Net current assets 50,810 80,323
----------- -----------
Total assets less current liabilities 51,989 81,502
Creditors: amounts falling due after more than one
year - (53,371)
----------- -----------
Net assets 51,989 28,131
----------- -----------
Capital and reserves
Called up share capital 175,833 175,833
Share premium 2,633,912 2,633,912
Profit and loss account (2,757,756) (2,781,614)
----------- -----------
Shareholders' funds - all equity 51,989 28,131
----------- -----------
Group Cash Flow Statement for the period from 1 April 2006 to 31 March 2007
2007 2006
# #
Net cash inflow from operating activites 74,404 175,275
Returns on investments and servicing of finance (3,127) (4,172)
Capital expenditure (71,254) (44,549)
----------- -----------
23 126,554
Equity dividends paid - -
----------- -----------
23 126,554
Financing (22,603) (29,912)
----------- -----------
(Decrease)/increase in cash (22,580) 96,642
----------- -----------
Reconciliation of net cash flow to movement in net
debt
(Decrease)/increase in cash in the period (22,580) 96,642
Decrease in debt and lease financing 22,603 29,912
----------- -----------
Change in net debt 23 126,554
Net debt at 1 April (17,633) (144,187)
----------- -----------
Net debt at 31 March (17,610) (17,633)
----------- -----------
Notes
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 and in accordance with
the accounting policies set out in the Company's 2007 financial statements.
2.Movements on shareholders' funds
2007 2006
# #
At 1 April 309,485 453,035
Retained loss (124,985) (143,550)
----------- -----------
At 31 March 184,500 309,485
----------- -----------
3.Loss per share
Loss per ordinary share is calculated as follows:
Basic Fully Diluted
2007 2006 2007 2006
# # # #
Loss
attributable
to ordinary
shareholders (124,985) (143,550) (124,985) (143,550)
Weighted
average number
of ordinary
shares 175,833,333 175,833,333 175,833,333 175,833,333
Loss per
ordinary share (0.07p) (0.08p) (0.07p) (0.08p)
---------- ---------- ---------- ----------
4.2007 report and accounts
The 2007 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.
5. 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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