TIDMJLH
RNS Number : 4928J
John Lewis Of Hungerford PLC
18 December 2015
JOHN LEWIS OF HUNGERFORD PLC
FINAL RESULTS - YEAR ENDED 31 AUGUST 2015
John Lewis of Hungerford plc ("John Lewis of Hungerford" or the
"Company") the specialist kitchen manufacturer and retailer
announces its final results for the year ended 31 August 2015.
Chairman's Statement
After a couple of years of steady growth the year just ended
served to remind us of the challenges we face as a small company.
Following a strong first quarter we experienced a series of
unplanned staffing changes in our showrooms including the
resignations of two of our most experienced designers. Whilst
disappointing these changes reflected a desire on the part of the
individuals to pursue new careers away from kitchen design and
consequently were outside of our control.
The quality of our designers is critical to our business making
it crucial that they were replaced with individuals of comparable
quality. Consequently senior management time was diverted to
addressing this and, whilst it was unquestionably the correct
decision, as a small business it came at the expense of initiatives
contained in our strategic growth plan.
Inevitability it takes time to identify suitable replacements
and a further lead time before they are able to generate sales. It
is therefore pleasing to be able to note the year ended on a
positive note with a strong trading performance in the final
quarter as showroom staffing levels slowly returned to normality
and long term customer projects came to fruition. However, this was
insufficient to recover the losses incurred earlier in the year
contributing to the overall loss for the full year we are reporting
today.
Operational and Financial Review
The loss for the year before taxation and share based payments
amounted to GBP197,000 (2014: GBP103,000 profit).
Overall, sales grew by 5% to GBP7,799,000 (2014: GBP7,416,000)
with the total number of kitchens sold during the year being 298
(2014: 307). We provide a bespoke design service to customers and
so the average sales value of a kitchen in any given year is
principally driven by the sales mix and in particular the
complexity of customers design requirements.
Like for like sales from a comparable showroom estate decreased
by 14%, reflecting a reduced volume of kitchen sales in those
showrooms. Our new showrooms continue to trade in line with
expectations with the aforementioned staffing issues principally
impacting on our mature estate. The new showrooms in Chiswick and
Cobham contributed 20% of total sales value and the design of these
stores reflects the particular markets they serve. In particular
the Chiswick store was designed to highlight the contemporary
aspects of our range and we are delighted with customer reaction.
We believe this provides a template for future store openings that
complements the more traditional feel of other stores in the
estate.
Whilst the growth in sales is welcome it was less than budgeted
and this coupled with the investments we were already committed to
making in support of our longer term growth strategy contributed to
the loss for the year. Some of the key investments made in the year
include the purchase and installation of a new spray and finishing
line and the refurbishment of the Bristol, Harrogate and Oxford
showrooms and the installation of the Pure kitchen range in two
further showrooms. The costs associated with the showroom
refurbishment are treated as capital expenditure in line with the
Company's accounting policies.
A slightly lower gross margin for the year at 52.0% (2014:
52.4%) was attributable to a slight reduction in product margins of
55.6% (2014:56.1%). The installations business grew its revenue by
7% to GBP1,030,000 (2014: GBP963,000) and achieved a higher gross
profit margin of 28% (2014: 27.5%)
Products 2015 2014
--------------- -------- --------
GBP000 GBP000
Turnover 6,769 6,453
Cost of sales (3,003) (2,832)
Gross margin 3,766 3,621
=============== ======== ========
Product sales include GBP242,000 (2014: GBP236,000) relating to
our new bedroom range. This range is now available in Fulham
showroom as well as a dedicated showroom based at our head office
in Wantage. We intend to install bedrooms into our Winchester
showroom in the coming 12 months reflecting the relatively cautious
approach we are taking in selectively rolling this out to showrooms
in our estate. Our award winning Pure kitchen range has now been
installed in 8 showrooms and we intend to continue this roll out in
the current year. Pure sales contributed a very encouraging 18% of
total sales for the year at GBP1,386,000.
Installations 2015 2014
--------------- ------- -------
GBP000 GBP000
Turnover 1,030 963
Cost of sales (741) (698)
Gross margin 289 265
=============== ======= =======
Installation sales include GBP91,000 (2014: GBP54,000) relating
to our new bedroom range.
Cash flow
We ended the year with cash at bank and in hand of GBP1,206,000
(2014: GBP1,490,000) reflecting the positive working capital
generated through customer deposits and advance payments. The net
cash inflow from operating activities was GBP120,000 (2014:
GBP763,000).
Bank loans, which are secured by a charge over the company's
freehold property stand at GBP780,000 (2014: GBP817,000). The
Company also had un-drawn committed borrowing facilities at the
year end of GBP250,000 (2014: GBP250,000).
Capital expenditure, including capitalised development costs, of
GBP453,000 was in line with budgeted amounts and principally arose
from expenditure on new spray and finishing lines together with the
continued refurbishment of showrooms and the installation of the
Pure kitchen range
Dividends
The Board is not recommending payment of a dividend.
Progress against 3 year strategic plan
The financial performance of the newer stores validates the
growth strategy adopted by the Board in recent years. We continue
to believe selective opportunities exist to add new stores although
this was put on hold during the year as we sought to stabilise the
business. The Board have subsequently determined not to pursue
further openings until such time as we have secured an improved
financial performance from our mature showrooms. This will include
installing our current ranges of products throughout the estate and
making further investments in our design capability.
Once these changes have been implemented the Board remain
confident that the business will return to profitable growth.
However, the Board no longer consider our previously announced
aspirational target of growing turnover to GBP10 million with a 5%
operating profit by the end of FY 2016 to be a realistic
target.
Current Trading and outlook
On 6 November 2015 we reported that despatched sales and forward
orders for Q1 stood at GBP1.9 million (2014: GBP2.0 million). As we
reported at the same time, a change in our operating policy for
orders linked to associated building work has had the impact of
deferring the point at which some sales are now reported. This was
borne out by the significant increase in the forward order book, at
the same date, for deliveries in Q2 and beyond which stood at
GBP1.3m (2014: GBP0.7m). Going forward we believe it is necessary
to consider both measures in assessing the current trend within the
business and we intend to provide both measures.
After the first 15 weeks of the current financial year our
current sales and order book stood at GBP3.1 million (2014
GBP3.1m). Our forward order book at the same date, for which
deposits have already been taken stood at GBP1.4m (GBP2014
GBP0.7m). We are pleased with this performance which represents a
significant achievement in light of the staffing challenges we have
faced in the past 12 months.
I would like to record my appreciation for the effort and
dedication of all of our employees who have helped steer us through
a tough and challenging year.
Malcolm R. Hepworth
Non Executive Chairman
Enquiries:
Malcolm Hepworth
Non Executive John Lewis of Hungerford
Chairman plc 01235 774300
Karen Stanley
Finance Director
Smith & Williamson Corporate 0117 376
Martyn Fraser Finance Limited 2213
Income Statement for the year ended 31 August 2015
2015 2014
GBP GBP
Revenue 7,798,821 7,416,441
Cost
of sales (3,744,065) (3,530,279)
------------ ------------
Gross
profit 4,054,756 3,886,162
Selling and distribution
costs (482,273) (498,668)
Administrative
expenses
Share based
payments 43,139 (43,139)
Other (3,717,690) (3,250,184)
------------ ------------
Total (3,674,551) (3,293,323)
(Loss)/Profit from operations
before share
based payments (145,207) 137,310
--------------------------------- ------------ ------------
(Loss)/Profit from
operations (102,068) 94,171
Finance
income 2,199 2,464
Finance
expenses (53,958) (36,895)
------------ ------------
(Loss)/Profit
before tax (153,827) 59,740
Tax credit
/ (expense) 15,276 (15,377)
------------ ------------
(Loss)/Profit
(MORE TO FOLLOW) Dow Jones Newswires
December 18, 2015 02:00 ET (07:00 GMT)
for the year (138,551) 44,363
============ ============
Earnings per
share
Basic (0.07)p 0.02p
Fully
diluted (0.07)p 0.02p
Balance Sheet as at 31 August 2015
2015 2014
GBP GBP
Non-current
assets
Intangible
assets 92,087 108,874
Property, plant
and equipment 2,784,262 2,689,988
Trade and
other receivables 57,075 57,075
------------ ------------
2,933,424 2,855,937
Current
assets
Inventories 190,209 183,111
Trade and other
receivables 306,824 294,152
Cash and cash
equivalents 1,206,171 1,489,714
------------ ------------
1,703,204 1,966,977
Total
assets 4,636,628 4,822,914
------------ ------------
Current liabilities
Current tax
payable - -
Trade and
other payables (1,823,312) (1,864,637)
Borrowings (83,252) (39,948)
------------ ------------
(1,906,564) (1,904,585)
Non-current
liabilities
Borrowings (785,765) (777,064)
Deferred tax
liabilities (15,997) (31,273)
------------ ------------
(801,762) (808,337)
Total liabilities (2,708,326) (2,712,922)
------------ ------------
Net assets 1,928,302 2,109,992
============ ============
Equity
Share Capital 186,745 186,745
Share Premium 1,188,021 1,188,021
Other Reserves 1,421 1,421
Retained
Earnings 552,115 733,805
------------ ------------
Total
equity 1,928,302 2,109,992
============ ============
Statement of Changes in Equity for the year ended 31 August
2015
Share Share Other Retained
Capital Premium Reserves Earnings Total
GBP GBP GBP GBP GBP
----------------- -------- ---------- --------- ---------- ----------
At 01 September
2013 186,745 1,188,021 1,421 646,303 2,022,490
Profit
for the
year - - - 44,363 44,363
Share based
payments - - - 43,139 43,139
-------------------- -------- ---------- --------- ---------- ----------
At 31 August
2014 186,745 1,188,021 1,421 733,805 2,109,992
Loss for
the year - - - (138,551) (138,551)
Share based
payments - - - (43,139) (43,139)
At 31 August
2015 186,745 1,188,021 1,421 552,115 1,928,302
------------------- -------- ---------- --------- ---------- ----------
The total comprehensive income
for the year is (GBP138,551) (2014:
GBP44,363).
Statement of Cash Flows for the year ended 31 August 2015
2015 2014
GBP GBP
Cash flows from
operating activities
(Loss) / profit
from operations (102,068) 94,171
Amortisation of
intangible assets 16,787 17,754
Depreciation of
property, plant
and equipment 280,315 269,856
Share based payments (43,139) 43,139
Loss on disposal
of property, plant
and equipment 29,528 4,035
(Increase)/decrease
in Inventories (7,098) 9,210
Increase in receivables (12,672) (57,469)
Increase in payables (41,325) 382,272
Cash generated
from operations 120,328 762,968
Net taxation paid - -
Net cash from operating
activities 120,328 762,968
---------- ----------
Cash flows from
investing activities
Purchase of intangible
assets - -
Purchase of property,
plant and equipment (357,161) (676,069)
Net proceeds from
sale of property,
plant and equipment 49,044 53,674
Interest received 2,199 2,464
Net cash used in
investing activities (305,918) (619,931)
---------- ----------
Cash flows from
financing activities
Interest
paid (53,958) (36,895)
Increase in
borrowings - 300,000
Repayment
of borrowings (43,995) (38,680)
Net cash used in
financing activities (97,953) 224,425
---------- ----------
Net increase/(decrease)
in cash and cash
equivalents (283,543) 367,462
---------- ----------
Net cash and cash
equivalents at
the start of the
year 1,489,714 1,122,252
Net cash and cash
equivalents at
the end of the
year 1,206,171 1,489,714
========== ==========
Net cash and cash equivalents
comprise:
Cash at bank and
in hand 1,206,171 1,489,714
Bank overdrafts - -
1,206,171 1,489,714
========== ==========
Notes
1. Statutory Accounts
The financial information does not constitute statutory accounts
as defined in section 435 of the Companies Act 2006, but has been
extracted from the statutory accounts for the year ended 31 August
2015 on which an unqualified audit report has been issued and which
will be delivered to the Registrar following their adoption at the
Annual General Meeting.
The statutory accounts for the financial year ended 31 August
2014 have been delivered to the Registrar of Companies with an
unqualified audit report.
2. Basis of preparation
The Company's statutory accounts have been prepared under the
historical cost convention and in accordance with International
Financial Reporting Standards (IFRS) as adopted by the European
Union and those parts of the Companies Act 2006 applicable to
companies reporting under IFRS.
3. Going concern
The Directors, after reviewing the Company's operating budgets,
investments plans and financing arrangements, consider that the
Company has, at the date of preparing its statutory accounts,
sufficient financing available for the estimated requirements for
the foreseeable future. Accordingly, the Directors are satisfied
that it is appropriate to adopt the going concern basis in
preparing the financial information.
4. Earnings/(loss) per share
Basic
The calculation of basic Earnings/(loss) per share is based on a
loss of GBP138,551 (2014: GBP44,363 profit) and a weighted average
number of ordinary shares in issue of 186,745,519 (2014:
186,745,519).
Diluted
The calculation of fully diluted Earnings/(loss) per share is
based on a loss of GBP138,551 (2014 GBP44,363 profit) and a
weighted average number of ordinary shares in issue and under
option of 186,745,519 (2014: 203,008,741).
5. Share based payments
2015 2014
GBP GBP
Share based payments
(income)/expense (43,139) 43,139
--------- -------
During the year ended 31 August 2015 the Company provided three
types of share-based incentive arrangements:
Vesting Vesting
Type of arrangement period conditions
Individual share 3 years
option agreements Three years service
Employee Share
Incentive Plan 2 years Two years service
Long Term Incentive 2.64 Performance targets
Plan years relating to revenues
and pre-tax profit
for the year to
31 August 2016
The Company established the Employee Share Incentive Plan on 25
June 2010 and the Long Term Incentive Plan Plan on 29 April 2014.
The Company has calculated charges for the share option awards
using a Black-Scholes model. Volatility and risk free rates have
been calculated for each share option award based on expected
volatility over the vesting period and current risk free rates at
the time of each award. Volatility assumptions are based on
historic volatility for the Company's share price in the three
years prior to the award.
(MORE TO FOLLOW) Dow Jones Newswires
December 18, 2015 02:00 ET (07:00 GMT)
John Lewis Of Hungerford (LSE:JLH)
Historical Stock Chart
From Jun 2024 to Jul 2024
John Lewis Of Hungerford (LSE:JLH)
Historical Stock Chart
From Jul 2023 to Jul 2024
