Interim Results
November 07 2003 - 2:00AM
UK Regulatory
RNS Number:7799R
Bakery Services PLC
07 November 2003
BAKERY SERVICES PLC
INTERIM RESULTS FOR THE SIX MONTHS TO 30 SEPTEMBER 2003
CHAIRMAN 'S STATEMENT
Highlights
*Profitability maintained.
*Cash inflows from operating activities before working capital changes
#50,409 (2002 - #46,005).
*Sale of investment realising #250,000 before expenses.
*Development of Don Millers franchise business progressing.
Overview
I am pleased to report on the Group's progress during the last six months.
Following the release of development capital from the sale of an investment
asset as detailed under post balance sheet events in the Group's Annual Report
dated 10 September 2003, your Board's primary focus has been on expansion of the
Don Millers franchise business. In this respect considerable progress has been
made.
During the period Inbake's in-store concession business performed
satisfactorily. However a further 'host store' closure shortly after the
half-year end will result in a reduction in Inbake sales for the full year.
Overall the Group has performed to your Boards expectations remaining profitable
and cash generative.
In the Group's Annual Report dated 10 September 2003, your Board detailed the
circumstances surrounding its decision to prosecute a legal claim against its
former solicitors in respect of the acquisition of the Don Millers business in
March 2000. Damages in excess of #400,000 are being sought. The legal processing
of this claim continues.
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 and reflects success in the management of Inbake's gradually
contracting business.
The results are as follows:
Unaudited 6 Unaudited 6
months months
ending 30:09:03 ending 30:09:02
#000s' #000's
Sales 1,557 1,731
Gross Margins %age 35.5% 34.7%
Operating profit 186 130
Franchise Division -Don Millers (R)
As at the date of this report, Don Millers Limited had eight retail bakery and
sandwich cafe franchises operating in high street and shopping centre locations,
predominantly in the midlands and north of England. In addition Don Millers also
operates one managed unit.
During the period two franchises closed due to expiration of the unit leases. In
one case it was decided for commercial reasons not to seek renewal of the lease.
In the second case the unit was subject to redevelopment for which net
compensation of #16,125 is anticipated in the second half-year.
After allowing for the changes in the franchised estate, trading over the last
six months has been broadly in line with your Directors expectations.
The loss shown for the managed units reflects seasonality factors exacerbated by
the exceptionally warm summer weather which reduced customer traffic in the
shopping mall in which one of the managed units is located. Also at the
beginning of the period a non-performing franchised unit became a
company-managed unit. This unit is now currently trading at breakeven and once
adequate profitability has been restored, a new franchisee will be sought.
Subsequent to the end of the half-year, one of the then two, managed units was
successfully franchised.
The results are as follows:
Unaudited 6 Unaudited 6
months months
ending 30:09:03 ending 30:09:02
#000's #000's
Franchise income 96 121
Managed store sales 296 145
Total 392 266
Operating profit franchise 42 74
Operating profit / (loss) managed (12) (22)
stores
- -
Total 30 52
The period under review has been one of intensive development activity for Don
Millers. Now that financial resources are available, a major drive is underway
to open further trading units. In support of this, Don Millers recently
recruited a highly experienced development manager to work exclusively on the
acquisition and commissioning of new stores.
Summary of Financial Results
Group turnover for the period was #1,954,181 (2002 - #2,006,530). Group profits
before and after taxation were #3,398 (2002 - #622).
Taxation in the current and prior year comparative period was nil.
Net cash inflows from operating activities before working capital changes were
#50,409 (2002 - #46,005). Inflows from operating activities were #59,346 (2002
#140,120)
Cash balances at 30 September 2002 were #404,875 (2002 - # 132,736) and the
Group's Balance Sheet remains materially debt free (other than trade related)
Basic and fully diluted earnings per share were 0.0024p (2002 - 0.0004p)
Outlook
As indicated in previous reports to shareholders, the Group's long-term future
lies with the success of Don Millers. However the larger part of the Groups
activities is, and will continue for some time to be, Inbake's in- store bakery
business.
The impact of increased flour prices from the failure of the 2003 grain harvests
in Central Europe which we flagged in our Annual Report have to date, been
passed on to Inbake's customers through higher prices without any apparent
negative effect on trading.
The Board's focus remains:
*development of Don Millers
*managing the contraction of the Inbake business to ensure it remains
profitable and cash generative.
The Board remains confident that the successful restructuring of the Group over
the past few years has positioned it well for the future
Richard D. Worthington
Non-Executive Chairman and Financial Director
7 November 2003
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Unaudited six months Audited
ended 30 September 31 March
Total Total Total
2003 2002 2003
Note #'000 #'000 #'000
Turnover 1,954 2,007 3,888
Cost of Sales (1,191) (1,215) (2,352)
------- ------- -------
Gross Profit 763 792 1,536
Gross Margin 39.0% 39.5% 39.5%
Distribution costs (224) (268) (496)
Administrative expenses (536) (518) (970)
------- ------- -------
Operating profit 3 6 70
Loss on disposal of investment - - (760)
Net interest receivable / (payable) - (5) (7)
------- ------- -------
Profit/(loss) on ordinary activities before 3 1 (697)
taxation
Taxation 3 - - -
------- ------- -------
Profit/(loss) on ordinary activities after taxation 3 1 (697)
------- ------- -------
Retained profit/(loss) for the period 3 1 (697)
======= ======= =======
Earnings/(loss) per share 4
- Basic 0.0024 p 0.0004 p (0.49 p)
- Fully diluted 0.0024 p 0.0004 p (0.49 p)
======= ======= =======
CONSOLIDATED BALANCE SHEET
Unaudited six Audited
months
ended 30 September 31 March
2003 2002 2003
#'000 #'000 #'000
Fixed assets
- Tangible assets 354 384 363
- Investments - 990 230
------- ------- -------
354 1,374 593
Current assets
- Stocks 116 108 107
- Debtors 392 481 356
- Cash at bank and in hand 405 133 171
------- ------- -------
913 722 634
Creditors: amounts falling due within one (782) (915) (752)
year
Net Current assets/(liabilities) 131 (193) (118)
Total assets less current liabilities 485 1,181 475
Creditors: amounts falling due
after more than one year (15) (16) (8)
------- ------- -------
Net assets 470 1,165 467
======= ======= =======
Capital and reserves
- Called up share capital 141 141 141
- Share premium 2,569 2,569 2,569
- Profit and loss account (2,240) (1,545) (2,243)
------- ------- -------
Shareholders' funds - all equity 470 1,165 467
======= ======= =======
CONSOLIDATED CASH FLOW STATEMENT
Unaudited six Audited
months
ended 30 31 March
September
2003 2002 2003
#'000 #'000 #'000
Net cash inflow/(outflow) from
operating activities 59 140 246
Returns on investments and
servicing of finance - (5) (7)
Taxation - - -
Capital expenditure 207 (13) (46)
------- ------- -------
266 122 193
Equity dividends paid - - -
------- ------- -------
266 122 193
Financing (8) (9) (17)
------- ------- -------
258 113 176
======= ======= =======
Reconciliation of net cash flow to movement in net funds /
(debt)
Increase / (decrease) in cash in the 258 113 176
period
Decrease in debt and lease financing 8 9 17
New finance leases (15) - -
------- ------- -------
Change in net funds/(debt) 251 122 193
Net funds/(debt) at start of period 96 (97) (97)
------- ------- -------
Net funds at end of period 347 25 96
======= ======= =======
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 2003.
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 2003.
3 Taxation
The Directors believe that tax losses brought forward will result in
no tax charge for the period.
4 Earnings per Share
The calculation of earnings per share is based on the profit or loss
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
2003 2002 2003
Basic:
Weighted average number of 140,833,333 140,833,333 140,833,333
ordinary shares in issue
Fully diluted:
Weighted average number of 140,833,333 140,833,333 140,833,333
ordinary shares in issue
5 Copies of the interim statement
Copies of the interim statement will be sent to shareholders. Further
copies will be available from Smith & Williamson Corporate Finance
Limited, No 1 Riding House Street, London, W1A 3AS.
6 Copies of this Announcement
Copies of this announcement will be available from the nominated
adviser, Smith & Williamson Corporate Finance Limited, 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
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