Interim Results
November 07 2002 - 9:43AM
UK Regulatory
RNS Number:5058D
Bakery Services PLC
07 November 2002
BAKERY SERVICES PLC
INTERIM RESULTS FOR THE SIX MONTHS TO 30 SEPTEMBER 2002
CHAIRMAN 'S STATEMENT
Overview
I am pleased to report on the Group's progress during the last six months.
This is the first period during which the results of the substantial reduction
in the Groups' overhead cost base are apparent. This cost reduction had become
necessary following a demerger in December 2001 of the Group's Polish business
trading as coffeeheaven and a decline in revenues from the UK businesses.
During the six-month period the Group returned to generating positive cash flows
and reported a nominal profit. It is your Board's intention to build on this
achievement and return the Group to acceptable levels of profitability.
This turnaround has been achieved not only as a result of cost reductions but
also because the Group's executive management has been able, following the
demerger, to fully focus its efforts on the Group's two UK businesses.
I am also pleased to report that by the end of the period covered by this
report, the significant losses from the one managed shop in the Don Miller
portfolio have now been stemmed. Whilst your Board considers that it is in the
Group's best interest to proceed with the contemplated legal action in respect
of this managed property, every effort will be made to resolve this dispute at
an early stage by mutual agreement. This matter was referred to in the Company's
Annual Report for the year ended 31 March 2002.
Review of Operations
Bakery Division - Inbake(R)
Inbake Limited operates in-store bakeries trading from concession sites in large
United Kingdom based supermarkets. Most Inbake stores now trade under the Don
Millers brand name.
Trading over the last six months has been in line with your Directors
expectations.
The results are follows:
Unaudited 6 months Unaudited 6 months
ending 30:09:02 ending 30:09:01
#000s' #000's
Sales 1,731 1,847
Gross Margins %age 34.7% 32.8%
Operating profit 130 135
No stores were opened or closed during the period. The decline in sales revenues
against the prior year same period reflects in the main store closures since or
during that prior period.
Franchise Division -Don Millers (R)
Don Millers Limited is the franchisor for eleven retail bakery and sandwich cafe
franchises operating in high street and shopping centre locations, predominantly
in the midlands and north of England. The company also operates one managed
unit.
Trading over the last six months has been in line with your Directors
expectations. The results are as follows:
Unaudited 6 months Unaudited 6 months
ending 30:09:02 ending 30:09:01
#000's #000's
Franchise income 121 124
Managed store sales 145 113
Total 266 237
Operating profit franchise 74 75
Operating loss managed store (22) (49)
Provision released prior year - 49
Total 52 75
No new franchises were granted during the period. However one unit changed
franchisee since when sales have improved. The small reduction in franchise fee
income is not considered significant
Summary of Financial Results
Group turnover for the period was #2,006,530 (2001 - #2,392,308). Group profits
before and after and taxation were #622 (2001 - #364,467 loss).
Taxation in the current and prior year comparative period was nil.
Net cash inflows from operating activities before working capital changes were
#46,005 (2001 - #170,433 outflow). Inflows from operating activities were
#140,120 (2001 #75,081 outflow)
Cash balances at 30 September 2002 were #132,736 (2001 - # 300,906) and the
Group's Balance Sheet remains materially debt free (other than trade related)
Basic and fully diluted earnings per share were 0.0004p (2001 - losses 0.26p)
Outlook
The Group retains two fundamentally sound businesses with good cash generative
potential.
With the Group's overhead cost base cut and nominal profitability restored your
Board is now able to focus on the future.
An immediate task is to address the legal and other issues with the one managed
store in the Don Miller portfolio as mentioned above. Your Board believes that
the Don Miller franchise business remains a growth opportunity for the Group and
will be looking to initiate further development.
At Inbake, although there are no immediate prospects for expanding the business,
your Board will continue to seek appropriate opportunities.
The Group has come through a very difficult period but is now well positioned to
capitalise on opportunities within it core business sectors.
Richard D. Worthington
Non-Executive Chairman and Financial Director
7 November 2002
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Unaudited six months Audited
ended 30 September 31 March
Total Total Total
2002 2001 2002
Note #'000 #'000 #'000
Turnover 2,007 2,392 4,553
Cost of Sales (1,215) (1,480) (2,813)
Gross Profit 792 912 1,740
Gross Margin 39.5% 38.1% 38.2%
Distribution costs (268) (333) (622)
Administrative expenses (518) (825) (2,750)
Operating profit/(loss) 6 (246) (1,632)
Demerger expenses - (130) (132)
Net interest receivable / (payable) (5) (2) 10
Profit/(loss) on ordinary activities before
taxation 1 (378) (1,754)
Taxation 3 - - -
Profit/(loss) on ordinary activities after
taxation 1 (378) (1,754)
Minority interests - 14 42
Increase in reserves on demerger - - 328
Retained profit/(loss) for the period 1 (364) (1,384)
Earnings/(loss) per share 4
- Basic 0.0004 p (0.26) p (1.26) p
- Fully diluted 0.0004 p (0.26) p (1.26) p
CONSOLIDATED BALANCE SHEET
Unaudited six months Audited
ended 30 September 31 March
2002 2001 2002
#'000 #'000 #'000
Fixed assets
- Intangible assets - 761 -
- Tangible assets 384 1,240 418
- Investments 990 - 990
1,374 2,001 1,408
Current assets
- Stocks 108 142 131
- Debtors 481 493 398
- Cash at bank and in hand 133 301 62
722 936 591
Creditors: amounts falling due within one
year (915) (740) (813)
Net Current assets/(liabilities) (193) 196 (222)
Total assets less current liabilities 1,181 2,197 1,186
Creditors: amounts falling due after more than one year (16) (35) (22)
Provisions for liabilities and charges - (132) -
Minority interests - all equity - 98 -
Net assets 1,165 2,128 1,164
Capital and reserves
- Called up share capital 141 141 141
- Share premium 2,569 2,569 2,569
- Profit and loss account (1,545) (582) (1,546)
Shareholders' funds - all equity 1,165 2,128 1,164
CONSOLIDATED CASHFLOW STATEMENT
Unaudited six months Audited
ended 30 September 31 March
2002 2001 2002
#'000 #'000 #'000
Net cash inflow/(outflow) from operating activities 140 (75) (182)
Returns on investments and servicing of finance (5) (3) 9
Taxation - - -
Capital expenditure (13) (109) (158)
122 (187) (331)
Equity dividends paid - - -
122 (187) (331)
Financing (9) 222 206
113 35 (125)
Reconciliation of net cash flow to movement in net funds / (debt)
Increase / (decrease) in cash in the period 113 35 (125)
Decrease in debt and lease financing 9 15 31
New finance leases - (42) (43)
Other non cash changes - - (44)
Change in net funds/(debt) 122 8 (181)
Net (debt)/funds at start of period (97) 84 84
Net funds/(debt) at end of period 25 92 (97)
Notes
1. Publication of Non-Statutory Accounts
The financial information contained in this interim statement does not constitute accounts as defined by section
240 of the Companies Act 1985. The financial information for the full preceding year is based on the statutory
accounts for the year ended 31 March 2002. Those accounts, upon which the Auditors issued an unqualified opinion
have been delivered to the Registrar of Companies.
2. Basis of Preparation of Interim Financial Information
The interim financial information has been prepared on the basis of the accounting policies set out in the
Group's statutory accounts for the year ended 31 March 2002.
3 Taxation
The Directors believe that tax losses brought forward will result in no tax charge for the period.
4 Loss per share
The calculation of earnings per share is based on the profit after tax for the financial period divided by the
weighted average number of ordinary shares in issue during the period. The weighted average number of ordinary
shares in issue for the periods reported were as follows:
Unaudited six months Audited
ended 30 September 31 March
2002 2001 2002
Basic:
Weighted average number of ordinary shares in issue 140,833,333 139,463,470 139,463,470
Fully diluted:
Weighted average number of ordinary shares in issue 140,833,333 139,463,470 139,463,470
5 Copies of this Announcement
Copies of this announcement will be available from the nominated adviser, Smith & Williamson Corporate Finance,
No 1 Riding House Street, London W1A 3AS, free of charge, for one month from the date of this announcement and
on the Company's website, www.bakeryservices.co.uk in due course.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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