TIDMLMR
RNS Number : 1964B
Luminar Group Holdings PLC
22 October 2009
Luminar Group Holdings Plc
Condensed consolidated financial information for the half year ended 27 August
2009
As at 27 August 2009, Luminar operated 88 high quality destination nightclubs
predominately under the brands of Oceana and Liquid.
Highlights
* 88 high quality trading venues
* Average venue EBITDA in last 12 months GBP0.6m
* Sales of GBP88.7m (H1 2009: GBP94.3m)
* Same outlet sales decline 4.5%*
* Average sales per head up 0.7% to GBP12.50
* Earnings before Interest, Tax, Depreciation and Amortisation** of GBP19.8m (H1
2009: GBP24.8m)
* Profit before tax** of GBP4.9m (H1 2009: GBP8.4m)
* Loss after tax including discontinued operations and exceptional items of
GBP9.6m (H1 2009: GBP22.4m loss)
* GBP9.9m impairment charge on 3D Entertainment investment
* Strong financial position following equity raise in August 2009
* Cash of GBP45.4m with net borrowings reduced to GBP104.4m (H1 2009: GBP158.7m)
* Bank facility, with significant covenant headroom, available until 2012
* Cash generative operation
* 36 venues owned freehold or long lease
* Current trading continues to be weak
* Same outlet sales down by 14.0% in the 7 weeks to 15 October 2009
* Full year outcome dependent on key trading period in second half
* adjusted for August Bank Holiday
** for continuing operations before exceptional items
Stephen Thomas, Chief Executive, said:
"Whilst our market is currently very tough we continue to have a clear
operational focus. This together with very tight cost control and significant
financial strength will ensure that Luminar maintains its market leading
position and prospers when our marketplace recovers."
22 October 2009
Enquiries
+------------------------------------+------------------------------------+
| Luminar Group Holdings plc | |
+------------------------------------+------------------------------------+
| Stephen Thomas, Chief Executive | Tel: 020 7457 2020 (today) |
+------------------------------------+------------------------------------+
| Robert McDonald, Finance Director | Tel: 01908 544100 (thereafter) |
+------------------------------------+------------------------------------+
| | |
+------------------------------------+------------------------------------+
| College Hill | |
+------------------------------------+------------------------------------+
| Matthew Smallwood | Tel: 020 7457 2020 |
+------------------------------------+------------------------------------+
Overview
Luminar Group Holdings plc is the leading operator of late night venues in the
UK, with 88 high quality trading units including the Oceana and Liquid brands.
Our market continues to be very challenging, such that the Group's trading
performance has become more volatile in recent months. The majority of our
customers are young people who have been particularly affected by rising
unemployment and other economic uncertainties. The late night market also
remains very competitive, with many of our competitors offering very low
discounted prices.
Within the context of this environment our venues continue to trade well,
attracting over 7 million customers in the 26 weeks to 27 August 2009. The
quality of our venues allows us to differentiate our offer and we are very
focused on using our strengths to deliver strong entertainment content targeted
to the local community, and providing good value for money. This strategy has
seen us continue to outperform our competitors and retain our position as the
leading specialist nightclub operator, well placed for when markets recover.
Sales revenue in the continuing business for the 26 weeks to 27 August 2009 was
5.9% below the same period in the previous year, with same outlet sales
(adjusted for the bank holiday) down 4.5% in the same period. Profit before tax
in the first half for the continuing business, excluding exceptional items, was
GBP4.9m, compared to GBP8.4m in the same period in the previous year.
These results were affected by the later August Bank Holiday which deferred some
sales to the second half, but also by a weakening of trading conditions in the
later part of the first half period. As highlighted in our trading update, dated
25 September 2009, these difficult trading conditions have continued into the
second half and will impact our earnings for the full year.
On 31 July 2009 the Group announced the issue of 39.5m new shares, raising gross
proceeds of GBP37.5m and providing the means for Luminar to take advantage of
new capacity investment opportunities, whilst at the same time strengthening its
financial position. In view of current sales trends, whilst we continue to
investigate and review investment opportunities, we will be particularly
selective in our approach to major investment until the trading picture
improves. Consequently our financial position remains very strong, with net
borrowings of GBP104.4m within banking facilities of GBP175m, which are not due
for renewal until 2012.
In our trading update on 25 September 2009 we highlighted that the difficult
market conditions were affecting results at 3D Entertainment Group Limited
("3DE") in which we hold a 49% shareholding. Within our half year results we
have taken the decision to impair the carrying value of our investment in 3DE
and provide against a proportion of the associated receivable balance, which has
created an exceptional charge of GBP9.9m within our discontinued operations.
Whilst we continue to actively investigate potential solutions to realise best
value for our investment in 3DE, the business continues to trade profitably at
arms length from Luminar, and it is important to note that there is no risk of
leases reverting to Luminar should the situation at 3DE change.
Background to Results and Strategy
Luminar currently operates 88 high quality late night venues in 77 towns and
cities, the largest estate of its kind in the UK. We trade 13 larger nightclubs
under the Oceana brand and 36 clubs under the Liquid brand, with all of our
clubs retaining an identity that reflects their local environment. The asset
base is strong, with 36 of our venues owned on a freehold or long lease basis,
and the estate is well invested and maintained, with modern facilities meeting
customer expectations and all regulations.
With two units (at Maidstone) merging operationally into one, there was no
significant disruption or downtime for development across the estate in the
period under review.
Our customers are predominantly in the 18 to 24 year age group, who have been
significantly impacted by the recession. Some 18% of this age group are now
unemployed, and many more are students or on low incomes. Whilst our customers
undoubtedly value the high energy experience of a Luminar nightclub, they are
more economically constrained in their leisure activities, as our lower
admission numbers demonstrate.
The late night market in general is reacting to the tighter economy by reducing
prices of admission and discounting the price of alcoholic drinks, with many
competitors operating on a marginal cash basis and providing little by way of
entertainment and customer service. Regulation too is unevenly enforced.
Luminar's operational strategy in this environment is to continue to play to its
strengths, by utilising higher quality assets and compliance to provide a better
customer experience, at a reasonable price. Our activity is focused on providing
strong entertainment content and reasons to visit, active vibrant sessions with
the focus on escapism and fun, whilst always targeted to the local community and
the social characteristics of the town. Mainstream dancing sessions on Fridays
and Saturdays are supplemented by differentiated speciality sessions in midweek,
reaching out to wider markets. Meanwhile our national scale and presence enables
the development of extremely successful themed products (such as UK Club
Culture, for younger audiences, and Vibe) and the rollout of our membership
network and updated e-commerce model. Our pricing strategy complements this
activity and reflects local markets, with admission and drink prices varying
significantly by venue, by session, and by day. Luminar's systems allow for
great flexibility in adjusting pricing. We recognise that price is important to
our customers, and we work hard to provide value for money.
A further strategic opportunity is to expand our asset base whilst our
competitors are weak, by taking advantage of property opportunities available in
the recession which may be able to generate a high return for the Group in the
future. There are at least 60 towns and cities in the UK where Luminar does not
trade, but which are large enough and with suitable demographics to sustain a
profitable Luminar nightclub. One such opportunity is Manchester, where we
already own the lease of a property suitable for conversion to an Oceana club.
We continue to actively evaluate suitable opportunities, but are not yet
committed to any new acquisitions or major development expenditure, and will be
particularly selective until the trading picture becomes clearer.
Operational Results
During the 26 weeks to 27 August 2009 we operated almost 10,000 sessions across
our 88 trading venues and attracted approximately 7.1 million customers,
compared with approximately 7.6 million in the previous year. Friday and
Saturday still account for the majority of admissions, although occupancy on
Saturday evenings fell in the period to 72% from 78% in the first half last
year, and midweek sessions are growing in importance. Over 60% of sales take
place after 12pm.
Average sales per head in the 26 weeks to 27 August 2009 were GBP12.50, an
increase of 0.7% over the previous year. Within this total, average admission
income per head rose 2.1% to GBP3.46, whilst drink sales per head reduced by
1.1% to GBP8.29. Average drink prices reduced year on year, reflecting the
significant deflation in prices that took place during the summer of 2008.
Actual prices this year have stabilised and improved slowly, mainly through
improved control of promotional activities. The average selling price per
measured drink was GBP2.10 in the first half of this year.
Overall sales in the continuing business in the 26 weeks to 27 August 2009
totalled GBP88.7m, a reduction of 5.9% from previous year. Sales benefited from
a catch up of GBP0.7m in machine income receipts, but the year on year
comparative suffered by approximately GBP1.1m of August Bank Holiday receipts,
with the later bank holiday this year falling in the second half. On a same
outlet basis which removes these anomalies and measures sales over a constant
estate of 87 venues, sales fell in the first half by 4.5% over the same period
last year. Within this same outlet basis, admission revenue fell by 0.2% on
footfall down by 2.9%, while drinks revenue was down by 6.6%.
The trend in same outlet sales worsened significantly towards the end of the
period, with July sales down by 6.3% and August by 8.1%. This trend was
unexpected, as the impact of unwinding the development programme in the first
half of last year was offset by drink price deflation in the same period. The
underlying cause of the worsening trend was primarily fewer admissions across
all venues in the estate.
Overall gross margin of 82.9%, which included 75.5% gross margin on drinks, was
below the 83.6% achieved in the first half last year but exceeded the margins
achieved as a whole for last year of 82.3%. However with lower sales, cash gross
margin in the first half was GBP5.3m lower than the same period in the previous
year.
Operating costs were tightly controlled and below last year's level despite
increased energy costs and the introduction of an asset financing charge of
GBP1.5m.
Financial Review
Earnings before interest, tax, depreciation and amortisation ("EBITDA") from
continuing operations before exceptional items totalled GBP19.8m in the first
half, GBP5.0m or 20% below that achieved in the same period in the previous year
due to lower sales and gross margins.
Lower capital investment in the period contributed to a reduced depreciation and
amortisation charge of GBP11.9m (H1 2009: GBP12.4m) and lower debts with
improved hedging reduced the net finance costs to GBP3.0m (H1 2009: GBP4.0m).
Net finance costs include a credit of GBP0.9m interest receivable in respect of
the loan note to 3DE. In view of the impairment taken against this loan (see
below) a matching provision will be made against interest accrued in future.
Profit before tax in the continuing business before exceptional items was
GBP4.9m (H1 2009: GBP8.4m), which, together with a tax charge of GBP1.5m, or
31%, gave rise to basic earnings per share of 5.4p (H1 2009: 9.7p).
Exceptional items in the continuing operations totalled GBP5.2m before tax,
including impairment provisions of GBP3.4m. A provision of GBP0.8m has been made
in anticipation of losses arising from the recent liquidation of Eminence
Leisure plc, previously a key supplier of DJs and live acts to our estate, and
in which Luminar held a 20% equity share.
Discontinued operations after tax contributed a loss of GBP8.5m, of which
GBP8.8m represented exceptional costs in the period. Discontinued operations
includes the Group's investment in former associate company 3DE, which operates
57 licensed venues primarily under the Chicago Rock brand. At 27 August 2009 the
Group's investment in 3DE was valued at GBP27.2m, comprising a GBP23.6m loan
note (GBP19.3m principal amount, accruing 8% pa interest, payable on disposal or
in 2014) and GBP3.6m relating to the value of our 49% equity share. In addition,
on 10 July 2009 Luminar agreed to guarantee a GBP2m term loan granted to 3DE by
their bank - this is assessed as a contingent liability, see note 14 to the
accounts. Following a review of recent trade and profitability at 3DE we have
decided to impair the valuation of our investment, writing down our equity value
in full and providing a further GBP6.3m against a proportion of the loan note
receivable, creating an exceptional charge of GBP9.9m. Discontinued operations
also include the companies and units sold to Cavendish Bars, of which the last
transaction completed on 27 May 2009.
The Group continues to generate cash. Net cash inflow from operations in the
first half was GBP5.8m, despite timing factors which cause more cash expenditure
to fall in the first half. Capital expenditure was restricted to capital
replacements and totalled GBP2.6m (H1 2009: GBP29.3m). A corporation tax rebate
of GBP2.2m was received, with no tax expected to be paid this financial year.
In addition to cash generated from operations, Luminar raised net proceeds of
GBP35.7m from the issue of new equity during August 2009. These proceeds
increased the cash held on the balance sheet at 27 August 2009 to GBP45.4m and
reduced the Group's net borrowing to GBP104.4m (H1 2009: GBP158.7m).
The Group's borrowing comprises a syndicated loan facility of GBP175m plus an
agreed overdraft of GBP5m, and extends to August 2012. Currently, GBP150m of the
facility is drawn, following the repayment of GBP20m in March 2009, and is
subject to interest at Libor plus a margin of up to 75 bps. Various hedges are
in place to cover Libor on borrowings of GBP140m over the period of the loan to
an effective rate of 5.2%. In addition, a further one year hedge was agreed in
May 2009 to fix the differential between one month and three month Libor. Whilst
commercially valuable, by its nature this hedge is deemed ineffective within
accounting convention and was fair valued accordingly at the half year date,
reducing net finance charges by GBP0.2m.
The borrowing facility is subject to financial covenants, the key one of which
requires the ratio of adjusted net borrowings to adjusted EBITDA to not exceed
3.0x. At 27 August 2009, the ratio was 2.2x, indicating debt headroom of
GBP39.8m within the covenant. The borrowing facility was not affected by the
raising of equity in August 2009, and there is no requirement to repay
borrowings from the cash received.
The Group decided to not make a final dividend payment for the year ended 26
February 2009 and no interim payment is proposed for the half year ended 27
August 2009. The Board intend to keep the dividend policy under review and to
restore dividend payments once sustainability of income growth is evident.
Current trading and outlook
The downturn in trading levels that we experienced in August has worsened in the
second half, with same outlet sales down by approximately 14.0% in the 7 weeks
to 15 October 2009 compared to the same period last year. Within this period,
same outlet admissions were down 16.6%, with admission income down 14.7% and
drink sales down 13.7%.
Luminar's action plan to deal with this situation in the short term is
particularly focused on local measures to boost admissions where possible and to
tightly control all costs and expenditure. Where necessary this will lead to the
reduction of all costs that are not business critical and very careful use of
capital investment. We have prepared well for the key trading month around
Christmas, and although the days do not fall kindly this year with Christmas Day
on a Friday, we are determined to maximise the opportunity.
We are confident that we operate the best venues in our industry and that
Luminar remains well positioned as market leader to survive and prosper when
markets recover.
Related parties
Related party transactions are disclosed in note 15 of this financial
information.
Principal risks and uncertainties
The principal risks and uncertainties that could affect the Group's business in
the remaining six months of the financial year are summarised below. Further
details of the Group's risk profile can be found in the 2009 Annual Report.
The key risk is that of continued or worsening economic conditions, particularly
as they affect young people. The Group competes for a share of the disposable
income of its customers with a wide range of other leisure activities and should
that income reduce, through greater unemployment or other economic factors, then
revenues available to the Group will reduce.
The seasonal pattern of the Group's income places great importance on trade over
the Christmas and New Year period. Environmental factors such as very poor
weather, or high incidence of swine flu or other factors could deter customers
from visiting the Group's venues.
Forward-looking statements
Certain statements in this consolidated financial information for the half year
ended 27 August 2009 are forward-looking. Although the Group believes that the
expectations reflected in these forward-looking statements are reasonable, it
can give no assurance that these expectations will prove to have been correct.
Because these statements involve risks and uncertainties, actual results may
differ materially from those expressed or implied by these forward-looking
statements.
The Group undertakes no obligation to update any forward-looking statements
whether as a result of new information, future events or otherwise.
Luminar Group Holdings plc
Luminar House
Deltic Avenue
Rooksley
Milton Keynes, Bucks
MK13 8LW
By order of the Board
+------------------------------------+------------------------------------+
| Stephen Thomas | Robert McDonald |
+------------------------------------+------------------------------------+
| 21 October 2009 | 21 October 2009 |
+------------------------------------+------------------------------------+
| Chief Executive | Finance Director |
+------------------------------------+------------------------------------+
Statement of Directors' responsibilities
The Directors confirm that this condensed financial information has been
prepared in accordance with IAS 34, Interim Financial Reporting, as adopted by
the European Union, and that the interim management report herein includes a
fair review of the information required by DTR 4.2.7 and DTR 4.2.8, namely:
* an indication of important events that have occurred during the first six months
and their impact on the condensed consolidated financial information, and a
description of the principal risks and uncertainties for the remaining six
months of the financial year; and
* material related party transactions in the first six months and any material
changes in the related party transactions described in the last annual report.
The Directors of Luminar Group Holdings plc are listed in the Luminar Group
Holdings plc Annual Report for the year ended 26 February 2009. A list of
current Directors is maintained on the Luminar Group Holdings plc website:
www.luminar.co.uk.
By order of the Board
+------------------------------------+------------------------------------+
| Stephen Thomas | Robert McDonald |
+------------------------------------+------------------------------------+
| 21 October 2009 | 21 October 2009 |
+------------------------------------+------------------------------------+
| Chief Executive | Finance Director |
+------------------------------------+------------------------------------+
Independent review report to Luminar Group Holdings plc
Introduction
We have been engaged by the Group to review the condensed consolidated financial
information for the half year ended 27 August 2009 which comprises the
Consolidated Statement of Comprehensive Income, the Consolidated Income
Statement, the Consolidated Balance Sheet, the Consolidated Cash Flow Statement,
the Net Debt Statement, the Consolidated Statement of Changes in Shareholders'
Equity, and the notes to the condensed consolidated financial information. We
have read the other information contained in the condensed consolidated
financial information for the half year ended 27 August 2009 and considered
whether it contains any apparent misstatements or material inconsistencies with
the condensed consolidated financial information.
Directors' responsibilities
The condensed consolidated financial information for the half year ended 27
August 2009 is the responsibility of, and has been approved by, the Directors.
The Directors are responsible for preparing the condensed consolidated financial
information in accordance with the Disclosure and Transparency Rules of the
United Kingdom's Financial Services Authority.
As disclosed in note 2, the annual financial statements of Luminar Group
Holdings plc are prepared in accordance with IFRSs as adopted by the European
Union. The condensed consolidated financial information for the half year ended
27 August 2009 has been prepared in accordance with International Accounting
Standard 34, Interim Financial Reporting, as adopted by the European Union.
Our responsibility
Our responsibility is to express to the Group a conclusion on the condensed
consolidated financial information for the half year ended 27 August 2009 based
on our review. This report, including the conclusion, has been prepared for and
only for the Group for the purpose of the Disclosure and Transparency Rules of
the Financial Services Authority and for no other purpose. We do not, in
producing this report, accept or assume responsibility for any other purpose or
to any other person to whom this report is shown or into whose hands it may come
save where expressly agreed by our prior consent in writing.
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information
Performed by the Independent Auditor of the Entity' issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly, we
do not express an audit opinion.
Review conclusion
Based on our review, nothing has come to our attention that causes us to believe
that the condensed consolidated financial information for the half year ended 27
August 2009 is not prepared, in all material respects, in accordance with
International Accounting Standard 34 as adopted by the European Union and the
Disclosure and Transparency Rules of the United Kingdom's Financial Services
Authority.
PricewaterhouseCoopers LLP
Chartered Accountants
St Albans
21 October 2009
Notes:
(a)The maintenance and integrity of the Luminar Group Holdings plc website is
the responsibility of the Directors; the work carried out by the auditors does
not involve consideration of these matters and, accordingly, the auditors accept
no responsibility for any changes that may have occurred to the interim report
since it was initially presented on the website.
(b) Legislation in the United Kingdom governing the preparation and
dissemination of financial information may differ from legislation in other
jurisdictions.
Consolidated Income Statement
for the half year ended 27 August 2009
+----------------+------+-------------+-------------+------------+-------------+-------------+----------+
| | Half year ended 27 August 2009 | Half year ended 28 August |
| | (unaudited) | 2008 (unaudited) |
| | | |
+-----------------------+----------------------------------------+--------------------------------------+
| | Note | Pre- | Exceptional | Total | Pre- | Exceptional | Total |
| | | exceptional | items | GBPm | exceptional | items | GBPm |
| | | items | (note 9) | | items | (note 9) | |
| | | GBPm | GBPm | | GBPm | GBPm | |
+----------------+------+-------------+-------------+------------+-------------+-------------+----------+
| Continuing | | | | | | | |
| operations | | | | | | | |
+----------------+------+-------------+-------------+------------+-------------+-------------+----------+
| Revenue | 4 | 88.7 | - | 88.7 | 94.3 | - | 94.3 |
+----------------+------+-------------+-------------+------------+-------------+-------------+----------+
| | | | | | | | |
+----------------+------+-------------+-------------+------------+-------------+-------------+----------+
| Cost of sales | | (15.2) | - | (15.2) | (15.5) | - | (15.5) |
+----------------+------+-------------+-------------+------------+-------------+-------------+----------+
| Gross profit | | 73.5 | - | 73.5 | 78.8 | - | 78.8 |
+----------------+------+-------------+-------------+------------+-------------+-------------+----------+
| | | | | | | | |
+----------------+------+-------------+-------------+------------+-------------+-------------+----------+
| Administrative | | (65.6) | (5.2) | (70.8) | (66.4) | (5.0) | (71.4) |
| expenses | | | | | | | |
+----------------+------+-------------+-------------+------------+-------------+-------------+----------+
| Profit from | 4 | 7.9 | (5.2) | 2.7 | 12.4 | (5.0) | 7.4 |
| operations | | | | | | | |
+----------------+------+-------------+-------------+------------+-------------+-------------+----------+
| | | | | | | | |
+----------------+------+-------------+-------------+------------+-------------+-------------+----------+
| Finance | 5 | 1.1 | - | 1.1 | 0.9 | - | 0.9 |
| income | | | | | | | |
+----------------+------+-------------+-------------+------------+-------------+-------------+----------+
| | | | | | | | |
+----------------+------+-------------+-------------+------------+-------------+-------------+----------+
| Finance costs | 5 | (4.1) | - | (4.1) | (4.9) | - | (4.9) |
+----------------+------+-------------+-------------+------------+-------------+-------------+----------+
| (Loss) / | | 4.9 | (5.2) | (0.3) | 8.4 | (5.0) | 3.4 |
| profit before | | | | | | | |
| taxation | | | | | | | |
+----------------+------+-------------+-------------+------------+-------------+-------------+----------+
| | | | | | | | |
+----------------+------+-------------+-------------+------------+-------------+-------------+----------+
| Tax on (loss) | 6 | (1.5) | 0.7 | (0.8) | (2.5) | 0.8 | (1.7) |
| / profit | | | | | | | |
+----------------+------+-------------+-------------+------------+-------------+-------------+----------+
| (Loss) / | | 3.4 | (4.5) | (1.1) | 5.9 | (4.2) | 1.7 |
| profit for | | | | | | | |
| the period | | | | | | | |
| from | | | | | | | |
| continuing | | | | | | | |
| operations | | | | | | | |
| attributable | | | | | | | |
| to equity | | | | | | | |
| shareholders | | | | | | | |
+----------------+------+-------------+-------------+------------+-------------+-------------+----------+
| | | | | | | | |
+----------------+------+-------------+-------------+------------+-------------+-------------+----------+
| (Loss) / | 10 | 0.3 | (8.8) | (8.5) | (0.1) | (24.0) | (24.1) |
| profit from | | | | | | | |
| discontinued | | | | | | | |
| operations * | | | | | | | |
+----------------+------+-------------+-------------+------------+-------------+-------------+----------+
| (Loss) / | | 3.7 | (13.3) | (9.6) | 5.8 | (28.2) | (22.4) |
| profit for | | | | | | | |
| the period | | | | | | | |
| attributable | | | | | | | |
| to equity | | | | | | | |
| shareholders | | | | | | | |
+----------------+------+-------------+-------------+------------+-------------+-------------+----------+
| Earnings per | 8 | | | | | | |
| share from | | | | | | | |
| continuing | | | | | | | |
| and | | | | | | | |
| discontinued | | | | | | | |
| operations | | | | | | | |
+----------------+------+-------------+-------------+------------+-------------+-------------+----------+
| Basic | | | | (15.3p) | | | (36.8p) |
+----------------+------+-------------+-------------+------------+-------------+-------------+----------+
| Diluted** | | | | (15.3p) | | | (36.5p) |
+----------------+------+-------------+-------------+------------+-------------+-------------+----------+
* The loss is stated after tax
** At 27 August 2009, as the Group is loss-making,
any share options in issue are considered to be 'anti-dilutive' and as such, the
calculation is the same for both basic and
diluted earnings per share.
Consolidated Statement of Comprehensive Income
for the half year ended 27 August 2009
+------------------------------------------------------+----------------+-----------------+
| | Half year | Half year ended |
| | ended | 28 August 2008 |
| | 27 August 2009 | |
+------------------------------------------------------+----------------+-----------------+
| | (unaudited) | (unaudited) |
+------------------------------------------------------+----------------+-----------------+
| | GBPm | GBPm |
+------------------------------------------------------+----------------+-----------------+
| Loss for the period | (9.6) | (22.4) |
+------------------------------------------------------+----------------+-----------------+
| Other comprehensive income: | | |
+------------------------------------------------------+----------------+-----------------+
| Cash flow hedges (net of tax) | 1.1 | 1.2 |
+------------------------------------------------------+----------------+-----------------+
| Other comprehensive income for the period, net of | 1.1 | 1.2 |
| tax | | |
+------------------------------------------------------+----------------+-----------------+
| | | |
+------------------------------------------------------+----------------+-----------------+
| Total comprehensive income for the period | (8.5) | (21.2) |
| attributable to equity shareholders | | |
+------------------------------------------------------+----------------+-----------------+
Consolidated Balance Sheet
As at 27 August 2009
+------------------------------------+------+---------------+--------------+---------------+
| |Note | 27 August | 28 August | 26 February |
| | | 2009 | 2008 | 2009 |
| | | (unaudited) | (unaudited) | (audited) |
| | | GBPm | GBPm | GBPm |
+------------------------------------+------+---------------+--------------+---------------+
| Non-current assets | | | | |
+------------------------------------+------+---------------+--------------+---------------+
| Goodwill | | 171.9 | 171.9 | 171.9 |
+------------------------------------+------+---------------+--------------+---------------+
| Other intangible assets | | 2.5 | 2.8 | 3.1 |
+------------------------------------+------+---------------+--------------+---------------+
| Property, plant and equipment | | 297.7 | 325.8 | 308.9 |
+------------------------------------+------+---------------+--------------+---------------+
| Other non-current assets | | 2.0 | 4.0 | 3.9 |
+------------------------------------+------+---------------+--------------+---------------+
| Trade and other receivables | | 17.3 | 21.9 | 22.7 |
+------------------------------------+------+---------------+--------------+---------------+
| | | 491.4 | 526.4 | 510.5 |
+------------------------------------+------+---------------+--------------+---------------+
| Current assets | | | | |
+------------------------------------+------+---------------+--------------+---------------+
| Inventories | | 2.4 | 2.5 | 2.1 |
+------------------------------------+------+---------------+--------------+---------------+
| Trade and other receivables | | 11.8 | 11.0 | 7.4 |
+------------------------------------+------+---------------+--------------+---------------+
| Cash and cash equivalents | | 45.4 | 5.9 | 27.9 |
+------------------------------------+------+---------------+--------------+---------------+
| Assets classified as held for sale | 10 | 59.6 | 19.4 | 37.4 |
| | | 2.4 | 7.2 | 2.4 |
| Investment in associate held for | | - | 3.6 | 3.6 |
| sale | | | | |
+------------------------------------+------+---------------+--------------+---------------+
| Total current assets held for sale | | 2.4 | 10.8 | 6.0 |
+------------------------------------+------+---------------+--------------+---------------+
| Total current assets | | 62.0 | 30.2 | 43.4 |
+------------------------------------+------+---------------+--------------+---------------+
| | | | | |
+------------------------------------+------+---------------+--------------+---------------+
| Total assets | | 553.4 | 556.6 | 553.9 |
+------------------------------------+------+---------------+--------------+---------------+
| | | | | |
+------------------------------------+------+---------------+--------------+---------------+
| Current liabilities | | | | |
+------------------------------------+------+---------------+--------------+---------------+
| Trade and other payables | | (12.1) | (23.4) | (17.8) |
+------------------------------------+------+---------------+--------------+---------------+
| Current tax liabilities | | (45.0) | (40.9) | (42.7) |
+------------------------------------+------+---------------+--------------+---------------+
| Deferred income | | (0.5) | (0.5) | (0.5) |
+------------------------------------+------+---------------+--------------+---------------+
| Provisions | | (1.9) | (2.9) | (1.5) |
+------------------------------------+------+---------------+--------------+---------------+
| | | (59.5) | (67.7) | (62.5) |
+------------------------------------+------+---------------+--------------+---------------+
| Liabilities classified as held for | 10 | (4.0) | (5.4) | (6.0) |
| sale | | | | |
+------------------------------------+------+---------------+--------------+---------------+
| | | (63.5) | (73.1) | (68.5) |
+------------------------------------+------+---------------+--------------+---------------+
| | | | | |
+------------------------------------+------+---------------+--------------+---------------+
| Net current liabilities | | (1.5) | (42.9) | (25.1) |
+------------------------------------+------+---------------+--------------+---------------+
| Total assets | | 489.9 | 483.5 | 485.4 |
+------------------------------------+------+---------------+--------------+---------------+
| | | | | |
+------------------------------------+------+---------------+--------------+---------------+
| Non-current liabilities | | | | |
+------------------------------------+------+---------------+--------------+---------------+
| Borrowings and loans | 13 | (149.8) | (164.6) | (169.7) |
+------------------------------------+------+---------------+--------------+---------------+
| Derivative financial instruments | | (11.9) | (1.5) | (13.2) |
+------------------------------------+------+---------------+--------------+---------------+
| Deferred income | | (6.0) | (6.5) | (6.3) |
+------------------------------------+------+---------------+--------------+---------------+
| Obligations under finance leases | | (7.9) | (7.9) | (7.9) |
+------------------------------------+------+---------------+--------------+---------------+
| Provisions | | (0.7) | (0.7) | (0.7) |
+------------------------------------+------+---------------+--------------+---------------+
| Deferred tax liabilities | | (18.9) | (23.8) | (20.3) |
+------------------------------------+------+---------------+--------------+---------------+
| | | (195.2) | (205.0) | (218.1) |
+------------------------------------+------+---------------+--------------+---------------+
| | | | | |
+------------------------------------+------+---------------+--------------+---------------+
| Net assets | | 294.7 | 278.5 | 267.3 |
+------------------------------------+------+---------------+--------------+---------------+
| | | | | |
+------------------------------------+------+---------------+--------------+---------------+
| Capital and reserves | | | | |
+------------------------------------+------+---------------+--------------+---------------+
| Share capital | | 131.8 | 121.9 | 121.9 |
+------------------------------------+------+---------------+--------------+---------------+
| Share premium | | 25.8 | - | - |
+------------------------------------+------+---------------+--------------+---------------+
| Capital reserve | | - | - | - |
+------------------------------------+------+---------------+--------------+---------------+
| Capital redemption reserve | | 42.1 | 42.1 | 42.1 |
+------------------------------------+------+---------------+--------------+---------------+
| Merger reserve | | - | - | - |
+------------------------------------+------+---------------+--------------+---------------+
| Equity reserve | | 1.4 | 1.2 | 1.2 |
+------------------------------------+------+---------------+--------------+---------------+
| Retained earnings | | 93.6 | 113.3 | 102.1 |
+------------------------------------+------+---------------+--------------+---------------+
| Shareholders' equity | | 294.7 | 278.5 | 267.3 |
+------------------------------------+------+---------------+--------------+---------------+
Consolidated Cash Flow Statement
for the half year ended 27 August 2009
+---------------------------------------------+------+----------------+----------------+
| |Note | Half year | Half year |
| | | ended | ended |
| | | 27 August 2009 | 28 August 2008 |
| | | (unaudited) | (unaudited) |
| | | GBPm | GBPm |
+---------------------------------------------+------+----------------+----------------+
| Cash flows from operating activities | | | |
+---------------------------------------------+------+----------------+----------------+
| Net cash inflow from operations | 11 | 5.8 | 17.9 |
+---------------------------------------------+------+----------------+----------------+
| Finance costs paid | | (4.0) | (5.0) |
+---------------------------------------------+------+----------------+----------------+
| Tax received | | 2.2 | - |
+---------------------------------------------+------+----------------+----------------+
| | | | |
+---------------------------------------------+------+----------------+----------------+
| | | 4.0 | 12.9 |
+---------------------------------------------+------+----------------+----------------+
| Cash flows from investing activities | | | |
+---------------------------------------------+------+----------------+----------------+
| Purchase of property, plant and equipment | | (2.5) | (28.5) |
+---------------------------------------------+------+----------------+----------------+
| Purchase of intangible assets | | (0.1) | (0.8) |
+---------------------------------------------+------+----------------+----------------+
| Net proceeds from sale of property, plant | | 0.4 | 3.6 |
| and equipment | | | |
+---------------------------------------------+------+----------------+----------------+
| Finance income received | | - | 0.1 |
+---------------------------------------------+------+----------------+----------------+
| | | | |
+---------------------------------------------+------+----------------+----------------+
| | | (2.2) | (25.6) |
+---------------------------------------------+------+----------------+----------------+
| Cash flows from financing activities | | | |
+---------------------------------------------+------+----------------+----------------+
| Repayment of long-term borrowings | | (20.0) | - |
+---------------------------------------------+------+----------------+----------------+
| Drawdown of new facility | | - | 20.0 |
+---------------------------------------------+------+----------------+----------------+
| Net proceeds from issue of shares | | 35.7 | - |
+---------------------------------------------+------+----------------+----------------+
| Dividends paid | 7 | - | (8.5) |
+---------------------------------------------+------+----------------+----------------+
| | | | |
+---------------------------------------------+------+----------------+----------------+
| | | 15.7 | 11.5 |
+---------------------------------------------+------+----------------+----------------+
| | | | |
+---------------------------------------------+------+----------------+----------------+
| Net increase / (decrease) in cash and cash | | 17.5 | (1.2) |
| equivalents | | | |
+---------------------------------------------+------+----------------+----------------+
| | | | |
+---------------------------------------------+------+----------------+----------------+
| Cash and cash equivalents at beginning of | | 27.9 | 7.1 |
| period | | | |
+---------------------------------------------+------+----------------+----------------+
| | | | |
+---------------------------------------------+------+----------------+----------------+
| Cash and cash equivalents at end of period | | 45.4 | 5.9 |
+---------------------------------------------+------+----------------+----------------+
Net Debt Statement
for the half year ended 27 August 2009
+--------------------------------------+------+--------------+-------------+---------------+
| | | Half year | Half year | Year ended |
| | | ended | ended | 26 February |
| | | 27 August | 28 August | 2009 |
| | | 2009 | 2008 | |
+--------------------------------------+------+--------------+-------------+---------------+
| | | (unaudited) | (unaudited) | (audited) |
+--------------------------------------+------+--------------+-------------+---------------+
| |Note | GBPm | GBPm | GBPm |
+--------------------------------------+------+--------------+-------------+---------------+
| Net (increase) / decrease in cash in | | (17.5) | 1.2 | (20.8) |
| the period / year | | | | |
+--------------------------------------+------+--------------+-------------+---------------+
| Non-cash changes: | | - | - | - |
| - movement in finance lease | | | | |
| liabilities | | | | |
+--------------------------------------+------+--------------+-------------+---------------+
| Cash inflow from increases in debt | | - | 20.0 | 25.0 |
| (post-issue costs) | | | | |
+--------------------------------------+------+--------------+-------------+---------------+
| Cash outflow from repayment of debt | | (20.0) | - | - |
+--------------------------------------+------+--------------+-------------+---------------+
| | | | | |
+--------------------------------------+------+--------------+-------------+---------------+
| Movement in net debt in the period / | | (37.5) | 21.2 | 4.2 |
| year | | | | |
+--------------------------------------+------+--------------+-------------+---------------+
| | | | | |
+--------------------------------------+------+--------------+-------------+---------------+
| Opening net debt | | 150.0 | 145.8 | 145.8 |
+--------------------------------------+------+--------------+-------------+---------------+
| | | | | |
+--------------------------------------+------+--------------+-------------+---------------+
| Closing net debt | 11 | 112.5 | 167.0 | 150.0 |
+--------------------------------------+------+--------------+-------------+---------------+
Consolidated Statement of Changes in Shareholders' Equity
(unaudited)
for the half year ended 27 August 2009
+--------------------+---------+---------+---------+------------+---------+---------+----------+--------+
| | Share | Share | Capital | Capital | Merger | Equity | Retained | Total |
| | capital | premium | reserve | redemption | reserve | reserve | earnings | GBPm |
| | GBPm | GBPm | GBPm | reserve | GBPm | GBPm | GBPm | |
| | | | | GBPm | | | | |
+--------------------+---------+---------+---------+------------+---------+---------+----------+--------+
| Brought forward at | 134.2 | - | - | 29.8 | - | 1.2 | 142.7 | 307.9 |
| 29 February 2008 | | | | | | | | |
+--------------------+---------+---------+---------+------------+---------+---------+----------+--------+
| Loss for the | - | - | - | - | - | - | (22.4) | (22.4) |
| period | | | | | | | | |
+--------------------+---------+---------+---------+------------+---------+---------+----------+--------+
| Share-based | - | - | - | - | - | 0.3 | - | 0.3 |
| payment charge | | | | | | | | |
+--------------------+---------+---------+---------+------------+---------+---------+----------+--------+
| Change in fair | - | - | - | - | - | - | 1.2 | 1.2 |
| value of cash flow | | | | | | | | |
| hedge | | | | | | | | |
+--------------------+---------+---------+---------+------------+---------+---------+----------+--------+
| Issue of shares | - | - | - | - | - | (0.3) | 0.3 | - |
| out of Luminar plc | | | | | | | | |
| Employee trust | | | | | | | | |
+--------------------+---------+---------+---------+------------+---------+---------+----------+--------+
| Dividends paid | - | - | - | - | - | - | (8.5) | (8.5) |
| (note 7) | | | | | | | | |
+--------------------+---------+---------+---------+------------+---------+---------+----------+--------+
| Cancellation of | (12.3) | | | 12.3 | | | | |
| deferred shares | | | | | | | | |
+--------------------+---------+---------+---------+------------+---------+---------+----------+--------+
| Carried forward at | 121.9 | - | - | 42.1 | - | 1.2 | 113.3 | 278.5 |
| 28 August 2008 | | | | | | | | |
+--------------------+---------+---------+---------+------------+---------+---------+----------+--------+
| | | | | | | | | |
+--------------------+---------+---------+---------+------------+---------+---------+----------+--------+
| | | | | | | | | |
+--------------------+---------+---------+---------+------------+---------+---------+----------+--------+
| Brought forward at | 121.9 | - | - | 42.1 | - | 1.2 | 102.1 | 267.3 |
| 27 February 2009 | | | | | | | | |
+--------------------+---------+---------+---------+------------+---------+---------+----------+--------+
| Loss for the | - | - | - | - | - | - | (9.6) | (9.6) |
| period | | | | | | | | |
+--------------------+---------+---------+---------+------------+---------+---------+----------+--------+
| Share-based | - | - | - | - | - | 0.2 | - | 0.2 |
| payment charge | | | | | | | | |
+--------------------+---------+---------+---------+------------+---------+---------+----------+--------+
| Change in fair | - | - | - | - | - | - | 1.1 | 1.1 |
| value of cash flow | | | | | | | | |
| hedge | | | | | | | | |
+--------------------+---------+---------+---------+------------+---------+---------+----------+--------+
| Issue of shares | 9.9 | 25.8 | - | - | - | - | - | 35.7 |
+--------------------+---------+---------+---------+------------+---------+---------+----------+--------+
| Carried forward at | 131.8 | 25.8 | - | 42.1 | - | 1.4 | 93.6 | 294.7 |
| 27 August 2009 | | | | | | | | |
+--------------------+---------+---------+---------+------------+---------+---------+----------+--------+
Notes to the condensed consolidated financial information
for the half year ended 27 August 2009
1General information
The Company is a public limited company incorporated and domiciled in the UK.
The address of its registered office is Luminar House, Deltic Avenue, Rooksley,
Milton Keynes, Bucks, MK13 8LW.
The Company is listed on the London Stock Exchange.
This condensed consolidated financial information for the half year ended 27
August 2009 was approved for issue on 21 October 2009.
This condensed consolidated financial information does not comprise statutory
accounts within the meaning of Section 240 of the Companies Act 1985 (section
434 of the Companies Act 2006). Statutory accounts for the year ended 26
February 2009 were approved by the Board of Directors on 13 May 2009 and
delivered to the Registrar of Companies. The report of the auditors on those
accounts was unqualified, did not contain an emphasis of matter paragraph and
did not contain any statement under Section 237 of the Companies Act 1985
(section 498 of the Companies Act 2006).
This condensed consolidated interim financial information has been reviewed, not
audited.
2 Basis of preparation
This condensed consolidated financial information for the half year ended 27
August 2009 has been prepared in accordance with the Disclosure and Transparency
Rules of the Financial Services Authority and with IAS 34, Interim Financial
Reporting, as adopted by the European Union. The condensed consolidated
financial information should be read in conjunction with the annual financial
statements for the year ended 26 February 2009, which have been prepared in
accordance with IFRSs as adopted by the European Union.
As a result of the deferred shares being redeemed and cancelled in July 2008,
issued share capital and capital redemption reserve comparatives have been
represented in this condensed consolidated financial information for the half
year ended 27 August 2009.
3 Accounting policies
Except as described below, the accounting policies adopted are consistent with
those of the annual financial statements for the year ended 26 February 2009, as
described in those annual financial statements.
Taxes on income in the interim periods are accrued using the tax rate that would
be applicable to expected total annual earnings.
The following new standards, amendments to standards or interpretations are
mandatory for the first time for the financial year beginning 27 February 2009.
Revised IAS 1, Presentation of financial statements, effective for annual
periods beginning on or after 1 January 2009. This standard changes the
presentation of items of income and expenses in the statement of changes in
equity, requiring 'non-owner changes in equity' to be presented separately from
owner changes in equity. The standard also introduces additional requirements
for entities that are making restatements or reclassifications of comparative
information. This only affects the disclosure of items within the Group
financial statements.
Revised IAS 23, Borrowing costs, effective for annual periods beginning on or
after 1 January 2009. This standard requires an entity to capitalise borrowing
costs directly attributable to the acquisition construction or production of a
qualifying asset as part of the cost of that asset. The option of immediately
expensing those borrowing costs has been removed. This has had no impact on the
Group as these borrowing costs are already being capitalised.
Amendment to IFRS 2, Share-based payment, effective for annual periods beginning
on or after 1 January 2009. This standard deals with vesting conditions and
cancellations. It clarifies that vesting conditions are service conditions and
performance conditions only, and that all cancellations, whether by the entity
or by other parties, should receive the same accounting treatment. Adoption of
this standard has had no impact on the Group's accounting for the existing share
option schemes.
Amendment to IAS 32, Financial instruments: Presentation, effective for annual
periods beginning on or after 1 January 2009. This standard requires entities to
classify certain types of financial instruments as equity, provided they have
particular features and meet specific conditions. Adoption of this standard has
had no impact on the Group.
IFRIC 13, Customer loyalty programmes relating to IAS 18, Revenue, effective for
annual periods beginning on or after 1 January 2008. This standard deals with
the required accounting for customer loyalty programmes where goods or services
are sold together with a customer loyalty incentive. Adoption of this standard
has not had a material impact on the Group.
4 Segmental information
As reported at 26 February 2009, the Group early adopted IFRS 8 'Operating
segments'.
IFRS 8 requires operating segments to be identified on the basis of internal
reports about components of the Group that are regularly reviewed by the Chief
Operating Decision Maker (CODM) to allocate resources to the segments and to
assess their performance.
We report our segment information on the same basis as our internal management
reporting structure, which drives how our company is organised and managed.
The Group is principally engaged as owner, developer and operator of nightclubs
and themed bars in the UK. The CODM has been identified as the Senior Executive
Management (SEM) that exercises the day-to-day management function of the Group.
Operational and financial information, which is primarily at an individual unit
level, is received by the CODM on a monthly basis. Luminar do not distinguish
between geography or brand. The unit information does not meet the quantitative
thresholds as required by IFRS 8, as such management have judged it appropriate
to aggregate the financial information relating to all units into a single
reportable segment.
All revenue is earned from sales to external customers.
5 Net finance costs
Net finance costs relating to continuing operations were as follows:
+---------------------------------------------+--------------+-------------+
| | Half year | Half year |
| | ended | ended |
| | 27 August | 28 August |
| | 2009 | 2008 |
| | GBPm | GBPm |
+---------------------------------------------+--------------+-------------+
| Interest payable on bank borrowings | (3.8) | (4.8) |
+---------------------------------------------+--------------+-------------+
| Interest payable on obligations under | (0.2) | (0.2) |
| finance leases | | |
+---------------------------------------------+--------------+-------------+
| Amortisation of issue costs on bank loan | (0.1) | (0.1) |
+---------------------------------------------+--------------+-------------+
| Total borrowing costs | (4.1) | (5.1) |
+---------------------------------------------+--------------+-------------+
| Less amounts capitalised in the cost of | - | 0.2 |
| qualifying assets | | |
+---------------------------------------------+--------------+-------------+
| Finance costs | (4.1) | (4.9) |
+---------------------------------------------+--------------+-------------+
| | | |
+---------------------------------------------+--------------+-------------+
| Income on bank deposits | - | 0.1 |
+---------------------------------------------+--------------+-------------+
| Interest on loan to associate | 0.9 | 0.8 |
+---------------------------------------------+--------------+-------------+
| Fair value movements on derivatives that | 0.2 | - |
| are not hedge accounted for | | |
+---------------------------------------------+--------------+-------------+
| Finance income | 1.1 | 0.9 |
+---------------------------------------------+--------------+-------------+
| Net finance costs | (3.0) | (4.0) |
+---------------------------------------------+--------------+-------------+
6 Tax on (loss) / profit
The taxation charge is based on the (losses) / profits for the period and
represents:
+---------------------------------------------+--------------+-------------+
| | Half year | Half year |
| | ended | ended |
| | 27 August | 28 August |
| | 2009 | 2008 |
| | GBPm | GBPm |
+---------------------------------------------+--------------+-------------+
| Current tax (charge) / credit | | |
+---------------------------------------------+--------------+-------------+
| Continuing operations: | | |
+---------------------------------------------+--------------+-------------+
| - Current period | (2.1) | (2.8) |
+---------------------------------------------+--------------+-------------+
| - Adjustments in respect of prior periods | 0.2 | - |
+---------------------------------------------+--------------+-------------+
| | | |
+---------------------------------------------+--------------+-------------+
| Discontinued operations: | | |
+---------------------------------------------+--------------+-------------+
| - Current period | 1.8 | 0.1 |
+---------------------------------------------+--------------+-------------+
| | (0.1) | (2.7) |
+---------------------------------------------+--------------+-------------+
| | | |
+---------------------------------------------+--------------+-------------+
| Deferred tax credit / (charge) | | |
+---------------------------------------------+--------------+-------------+
| - Continuing operations | 1.1 | 1.1 |
+---------------------------------------------+--------------+-------------+
| - Discontinued operations | 0.2 | 0.4 |
+---------------------------------------------+--------------+-------------+
| | 1.3 | 1.5 |
+---------------------------------------------+--------------+-------------+
| | | |
+---------------------------------------------+--------------+-------------+
| Total taxation credit / (charge) | | |
+---------------------------------------------+--------------+-------------+
| - Continuing operations | (0.8) | (1.7) |
+---------------------------------------------+--------------+-------------+
| - Discontinued operations | 2.0 | 0.5 |
+---------------------------------------------+--------------+-------------+
| | 1.2 | (1.2) |
+---------------------------------------------+--------------+-------------+
Income tax expense is recognised based on management's best estimate of the full
year effective rate of tax which is then applied to the first half year results.
Luminar's policy is to recognise liabilities for uncertain tax positions
relating to open tax years, based on management's assessment of the potential
outcomes at the balance sheet date. During the half year a tax charge of
GBP1.5m (2008: GBP2.5m) was recognised against a continuing profit before
taxation pre-exceptional items figure of GBP4.9m (2008: GBP8.4m pre-loss from
associate). This gives an effective rate of 30.6% (2008: 29.8%), which is
broadly comparable with that for the prior year half year end.
Notes to the condensed consolidated financial information (continued)
for the half year ended 27 August 2009
7 Dividends
+---------------------------------------------+--------------+-------------+
| | Half year | Half year |
| | ended | ended |
| | 27 August | 28 August |
| | 2009 | 2008 |
| | GBPm | GBPm |
+---------------------------------------------+--------------+-------------+
| Ordinary shares - previous year final | - | 8.5 |
| dividend paid: nil pence per share (28 | | |
| August 2008: 13.95 pence per share) | | |
+---------------------------------------------+--------------+-------------+
| | | |
+---------------------------------------------+--------------+-------------+
| | - | 8.5 |
+---------------------------------------------+--------------+-------------+
As reported in the Annual Report approved on 13 May 2009, the Board did not
recommend a final dividend for the year ended 26 February 2009.
8(Loss) / Earnings per share
The calculation of basic earnings per share (EPS) is calculated by dividing the
earnings attributed to equity shareholders by the weighted average number of
shares in issue during the half year. For diluted earnings per share the
weighted average number of ordinary shares in issue is adjusted to assume
conversion of all dilutive potential ordinary shares. The Group has one class of
dilutive potential ordinary shares: share options granted to Directors and
employees where the exercise price is less than the average market price of the
Group's ordinary shares during the half year. At the half year end an assessment
is made as to whether the performance criteria for the vesting of awards under
the share option schemes of the Group is likely to be met and any potential
shares unlikely to be exercised are excluded from the diluted EPS calculation.
An alternative measure of earnings per share has also been presented below, that
being earnings per share from continuing operations pre-exceptional items, as
the Directors believe that this measure of pre-exceptional earnings from
continuing operations is more reflective of the ongoing trading of the Group.
A reconciliation of the earnings and weighted average number of shares used in
the calculations is set out below:
+---------------------------------+-------------+-------------+------------+
| | Half year ended 27 August 2009 |
+---------------------------------+----------------------------------------+
| | Earnings | Weighted | Per share |
| | GBPm | average | amount |
| | | number of | (pence) |
| | | shares | |
| | | (in | |
| | | millions) | |
+---------------------------------+-------------+-------------+------------+
| Basic and diluted EPS | | | |
+---------------------------------+-------------+-------------+------------+
| Earnings attributable to | (9.6) | 62.7 | (15.3) |
| ordinary shareholders | | | |
+---------------------------------+-------------+-------------+------------+
| | | | |
+---------------------------------+-------------+-------------+------------+
| Basic and diluted EPS from | (1.1) | 62.7 | (1.8) |
| continuing operations | | | |
+---------------------------------+-------------+-------------+------------+
| | | | |
+---------------------------------+-------------+-------------+------------+
| Basic and diluted EPS from | (8.5) | 62.7 | (13.6) |
| discontinued operations | | | |
+---------------------------------+-------------+-------------+------------+
| | | | |
+---------------------------------+-------------+-------------+------------+
| EPS from continuing operations | | | |
| pre-exceptional items | | | |
+---------------------------------+-------------+-------------+------------+
| Basic and diluted EPS from | 3.4 | 62.7 | 5.4 |
| continuing operations | | | |
| pre-exceptional items | | | |
+---------------------------------+-------------+-------------+------------+
+---------------------------------+----------------+------------+-------------+
| | Half year ended 28 August 2008 |
+---------------------------------+-------------------------------------------+
| | Earnings | Weighted | Per share |
| | (reclassified) | average | amount |
| | GBPm | number of | (pence) |
| | | shares | |
| | | (in | |
| | | millions) | |
+---------------------------------+----------------+------------+-------------+
| Basic EPS | | | |
+---------------------------------+----------------+------------+-------------+
| Earnings attributable to | (22.4) | 60.9 | (36.8) |
| ordinary shareholders | | | |
+---------------------------------+----------------+------------+-------------+
| Effect of dilutive options and | - | 0.5 | - |
| warrants | | | |
+---------------------------------+----------------+------------+-------------+
| Diluted EPS | (22.4) | 61.4 | (36.5) |
+---------------------------------+----------------+------------+-------------+
| | | | |
+---------------------------------+----------------+------------+-------------+
| Basic EPS from continuing | 1.7 | 60.9 | 2.8 |
| operations | | | |
+---------------------------------+----------------+------------+-------------+
| Diluted EPS from continuing | 1.7 | 61.4 | 2.8 |
| operations | | | |
+---------------------------------+----------------+------------+-------------+
| | | | |
+---------------------------------+----------------+------------+-------------+
| Basic EPS from discontinued | (24.1) | 60.9 | (39.6) |
| operations | | | |
+---------------------------------+----------------+------------+-------------+
| Diluted EPS from discontinued | (24.1) | 61.4 | (39.3) |
| operations | | | |
+---------------------------------+----------------+------------+-------------+
| | | | |
+---------------------------------+----------------+------------+-------------+
| EPS from continuing operations | | | |
| pre-exceptional items | | | |
+---------------------------------+----------------+------------+-------------+
| Basic EPS from continuing | 5.9 | 60.9 | 9.7 |
| operations pre-exceptional | | | |
| items | | | |
+---------------------------------+----------------+------------+-------------+
| Diluted EPS from continuing | 5.9 | 61.4 | 9.6 |
| operations pre-exceptional | | | |
| items | | | |
+---------------------------------+----------------+------------+-------------+
All amounts included in the column headed 'Earnings' are taken from the face of
the Consolidated Income Statement.
At 27 August 2009, as the Group is loss-making, any share options in issue are
considered to be 'anti-dilutive' and as such, the calculation is the same for
both basic and diluted earnings per share.
9 Exceptional items
(a) Continuing operations
The Group incurred exceptional items on continuing operations as follows:
+------------------------------------------------------------+-------------------+-----------------+
| | Half year ended | Half year ended |
| | 27 August 2009 | 28 August 2008 |
| | GBPm | GBPm |
+------------------------------------------------------------+-------------------+-----------------+
| Exceptional items relating to trading | | |
+------------------------------------------------------------+-------------------+-----------------+
| Asset impairments | (3.4) | (4.0) |
+------------------------------------------------------------+-------------------+-----------------+
| Provision for loss on liquidation of supplier | (0.8) | - |
+------------------------------------------------------------+-------------------+-----------------+
| Provision for onerous lease commitments | (0.2) | (0.9) |
+------------------------------------------------------------+-------------------+-----------------+
| Costs relating to reorganisation and rationalisation | (0.8) | (0.1) |
+------------------------------------------------------------+-------------------+-----------------+
| Pre-tax exceptional items relating to continuing | (5.2) | (5.0) |
| operations | | |
+------------------------------------------------------------+-------------------+-----------------+
| Tax on exceptional items | 0.7 | 0.8 |
+------------------------------------------------------------+-------------------+-----------------+
| Post-tax exceptional items relating to continuing | | |
| operations | (4.5) | (4.2) |
+------------------------------------------------------------+-------------------+-----------------+
Impairments of GBP3.4m (half year end 28 August 2008: GBP4.0m) relate to
property, plant and equipment (GBP1.6m) and lease premiums (GBP1.8m), reflecting
the difference between the value in use of cash generating units (e.g. discrete
trading units) and their carrying value.
A GBP0.8m provision has been recognised in relation to anticipated losses
arising from the recent liquidation of Eminence Leisure plc, a key supplier of
DJ's and live acts to the Group, and in which the Group held a 20% equity share.
(b) Discontinued operations
The Group incurred exceptional items relating to discontinued operations as
follows:
+------------------------------------------------------------+-------------------+-----------------+
| | Half year ended | Half year ended |
| | 27 August 2009 | 28 August 2008 |
| | GBPm | GBPm |
+------------------------------------------------------------+-------------------+-----------------+
| Impairment of property, plant and equipment | (0.1) | (0.1) |
+------------------------------------------------------------+-------------------+-----------------+
| Net increase in provision for onerous lease commitments | (0.3) | (0.3) |
+------------------------------------------------------------+-------------------+-----------------+
| Impairment of investment in associate | (3.6) | (24.1) |
+------------------------------------------------------------+-------------------+-----------------+
| Provision against receivable due from associate | (6.3) | - |
+------------------------------------------------------------+-------------------+-----------------+
| Realised profit on disposals | - | 0.7 |
+------------------------------------------------------------+-------------------+-----------------+
| Costs relating to reorganisation and rationalisation | (0.3) | (0.6) |
+------------------------------------------------------------+-------------------+-----------------+
| Pre-tax exceptional items relating to discontinued | | |
| operations | (10.6) | (24.4) |
+------------------------------------------------------------+-------------------+-----------------+
| Tax on exceptional items | 1.8 | 0.4 |
+------------------------------------------------------------+-------------------+-----------------+
| Post-tax exceptional items relating to discontinued | | |
| operations | (8.8) | (24.0) |
+------------------------------------------------------------+-------------------+-----------------+
A non-cash impairment of GBP3.6m (half year ended 28 August 2008: GBP24.1m) has
been recognised against the carrying value of the investment held in The 3D
Entertainment Group Limited, reflecting the Board's commitment to dispose of
this investment in the short-term and as a result, recognising the difference
between management's latest estimate of the recoverable value of the investment
and its carrying value. A further GBP6.3m has been provided against the
receivable balance due from The 3D Entertainment Group in relation to the Vendor
Loan Note and associated accrued interest. Management's best estimate of
recoverable value is based a range of valuation methodology's using the latest
available information but the actual value achieved through a disposal could
vary materially from the estimate included in the interim statements depending
on the specific circumstances of the disposal and the expected future
profitability of 3DE.
10 Discontinued operations and non-current assets held for sale
Comparative income statement and cash flow information is restated at each
balance sheet date to reflect the composition of discontinued operations at the
latest balance sheet date.
(a) Results of discontinued operations
The results of discontinued operations, which comprise units either disposed of,
or held for sale and forming part of the Group's plan to exit from non-core
operations, included within the Consolidated Income Statement were as follows:
+-----------------------------------------+--------------+---------------+
| | Half year | Half year |
| | ended | ended |
| | 27 August | 28 August |
| | 2009 | 2008 |
+-----------------------------------------+--------------+---------------+
| | GBPm | GBPm |
+-----------------------------------------+--------------+---------------+
| Revenue | 0.1 | 1.1 |
+-----------------------------------------+--------------+---------------+
| Cost of sales and administrative | - | (1.3) |
| expenses | | |
+-----------------------------------------+--------------+---------------+
| Profit/(loss) before tax | 0.1 | (0.2) |
| pre-exceptional items | | |
+-----------------------------------------+--------------+---------------+
| Attributable tax credit | 0.2 | 0.1 |
+-----------------------------------------+--------------+---------------+
| Profit /(loss) after tax | 0.3 | (0.1) |
| pre-exceptional items | | |
+-----------------------------------------+--------------+---------------+
| Exceptional items (see note 9) | (10.6) | (24.4) |
+-----------------------------------------+--------------+---------------+
| Attributable tax credit | 1.8 | 0.4 |
+-----------------------------------------+--------------+---------------+
| Loss from discontinued operations | (8.5) | (24.1) |
+-----------------------------------------+--------------+---------------+
(b) Assets and liabilities of units held for sale
At 27 August 2009 four units were classified as held for sale.
The major classes of assets and liabilities comprising the units classified as
held for sale were as follows:
+--------------------------------+--------------+-------------+--------------+
| | 27 August | 28 August | 26 February |
| | 2009 | 2008 | 2009 |
+--------------------------------+--------------+-------------+--------------+
| | GBPm | GBPm | GBPm |
+--------------------------------+--------------+-------------+--------------+
| Property, plant and equipment | 2.3 | 6.8 | 2.3 |
+--------------------------------+--------------+-------------+--------------+
| Inventories | - | 0.1 | - |
+--------------------------------+--------------+-------------+--------------+
| Trade and other receivables | 0.1 | 0.3 | 0.1 |
+--------------------------------+--------------+-------------+--------------+
| Cash and cash equivalents | - | - | - |
+--------------------------------+--------------+-------------+--------------+
| Total assets classified as | 2.4 | 7.2 | 2.4 |
| held for sale | | | |
+--------------------------------+--------------+-------------+--------------+
| | | | |
+--------------------------------+--------------+-------------+--------------+
| Trade and other payables | (0.2) | (0.4) | (0.1) |
+--------------------------------+--------------+-------------+--------------+
| Deferred income | - | (0.1) | - |
+--------------------------------+--------------+-------------+--------------+
| Obligations under finance | - | - | - |
| leases | | | |
+--------------------------------+--------------+-------------+--------------+
| Provisions | (3.7) | (4.8) | (5.8) |
+--------------------------------+--------------+-------------+--------------+
| Deferred tax liabilities | (0.1) | (0.1) | (0.1) |
+--------------------------------+--------------+-------------+--------------+
| Total liabilities classified | (4.0) | (5.4) | (6.0) |
| as held for sale | | | |
+--------------------------------+--------------+-------------+--------------+
| | | | |
+--------------------------------+--------------+-------------+--------------+
| Net (liabilities) / | (1.6) | 1.8 | (3.6) |
| assets classified as held for | | | |
| sale | | | |
+--------------------------------+--------------+-------------+--------------+
11Cash flow from operating activities and reconciliation of movement in net
debt
A reconciliation of net cash inflow from operations is provided below:
+---------------------------------------------+--------------+-------------+
| | Half year | Half year |
| | ended | ended |
| | 27 August | 28 August |
| | 2009 | 2008 |
+---------------------------------------------+--------------+-------------+
| | GBPm | GBPm |
+---------------------------------------------+--------------+-------------+
| (Loss) / profit before taxation - | (0.3) | 3.4 |
| continuing operations | | |
+---------------------------------------------+--------------+-------------+
| Loss before taxation - discontinued | (10.5) | (24.6) |
| operations | | |
+---------------------------------------------+--------------+-------------+
| (Loss) /profit before taxation | (10.8) | (21.2) |
+---------------------------------------------+--------------+-------------+
| Depreciation and amortisation | 11.8 | 12.3 |
+---------------------------------------------+--------------+-------------+
| Amortisation of lease premiums | 0.1 | 0.1 |
+---------------------------------------------+--------------+-------------+
| Amortisation of issue costs on bank loan | 0.1 | 0.1 |
+---------------------------------------------+--------------+-------------+
| Impairment of property, plant and | 1.7 | 3.4 |
| equipment | | |
+---------------------------------------------+--------------+-------------+
| Impairment of goodwill | - | 0.7 |
+---------------------------------------------+--------------+-------------+
| Impairment of lease premiums | 1.8 | - |
+---------------------------------------------+--------------+-------------+
| Impairment of investment in associate | 3.6 | 24.1 |
+---------------------------------------------+--------------+-------------+
| Movement in exceptional accrued costs and | 5.0 | (2.2) |
| provisions | | |
+---------------------------------------------+--------------+-------------+
| Loss / (profit) on sale of property, plant | 0.3 | (0.7) |
| and equipment | | |
+---------------------------------------------+--------------+-------------+
| Loss on sale of motor vehicles | - | 0.1 |
| (non-exceptional) | | |
+---------------------------------------------+--------------+-------------+
| Loss on disposal of intangible assets | - | 0.1 |
+---------------------------------------------+--------------+-------------+
| Non-cash charges for share-based payments | 0.2 | 0.3 |
+---------------------------------------------+--------------+-------------+
| Net finance costs | 3.0 | 4.0 |
+---------------------------------------------+--------------+-------------+
| | 16.8 | 21.1 |
+---------------------------------------------+--------------+-------------+
| Increase in inventories | (0.3) | (0.2) |
+---------------------------------------------+--------------+-------------+
| Increase in receivables | (4.2) | (3.2) |
+---------------------------------------------+--------------+-------------+
| (Decrease) / increase in trade and other | (6.1) | 5.0 |
| payables | | |
+---------------------------------------------+--------------+-------------+
| Decrease in provisions | (0.4) | (4.8) |
+---------------------------------------------+--------------+-------------+
| Net cash inflow from operations | 5.8 | 17.9 |
+---------------------------------------------+--------------+-------------+
The movement in net debt during the half year is analysed as follows:
+-----------------------------+--------------+--------------+--------------+
| | 26 February | Cash flow | 27 August |
| | 2009 | GBPm | 2009 |
| | GBPm | | GBPm |
+-----------------------------+--------------+--------------+--------------+
| Cash and cash equivalents | 27.9 | 17.5 | 45.4 |
+-----------------------------+--------------+--------------+--------------+
| Loans due in more than 1 | (170.0) | 20.0 | (150.0) |
| year | | | |
+-----------------------------+--------------+--------------+--------------+
| Cash net debt | (142.1) | 37.5 | (104.6) |
+-----------------------------+--------------+--------------+--------------+
| Finance leases | (7.9) | - | (7.9) |
+-----------------------------+--------------+--------------+--------------+
| Net debt | (150.0) | 37.5 | (112.5) |
+-----------------------------+--------------+--------------+--------------+
12 Property, plant and equipment
During the half year the Group acquired GBP2.5m (half year ended 28 August 2008:
GBP26.7m) of assets and disposed of GBP0.6m (half year ended 28 August 2008:
GBP0.1m) of assets. GBP11.2m (half year ended 28 August 2008: GBP12.1m) of
depreciation was charged in the half year, and an impairment provision of
GBP1.7m (half year ended 28 August 2008: GBP3.3m) was recognised.
13 Borrowings and loans
Amounts falling due after more than one year were as follows:
+-------------------------------+--------------+-------------+--------------+
| | 27 August | 28 August | 26 February |
| | 2009 | 2008 | 2009 |
| | GBPm | GBPm | GBPm |
+-------------------------------+--------------+-------------+--------------+
| Non-current: | | | |
+-------------------------------+--------------+-------------+--------------+
| Bank loan | 150.0 | 165.0 | 170.0 |
+-------------------------------+--------------+-------------+--------------+
| Issue costs | (0.2) | (0.4) | (0.3) |
+-------------------------------+--------------+-------------+--------------+
| | 149.8 | 164.6 | 169.7 |
+-------------------------------+--------------+-------------+--------------+
The movements in bank loans were analysed as follows:
+---------------------------------------------------------+--------------+
| | GBPm |
+---------------------------------------------------------+--------------+
| | |
+---------------------------------------------------------+--------------+
| Opening amount as at 29 February 2008 | 144.5 |
+---------------------------------------------------------+--------------+
| Additional drawdowns | 20.0 |
+---------------------------------------------------------+--------------+
| Issue costs amortisation | 0.1 |
+---------------------------------------------------------+--------------+
| | |
+---------------------------------------------------------+--------------+
| Closing amount as at 28 August 2008 | 164.6 |
+---------------------------------------------------------+--------------+
| | |
+---------------------------------------------------------+--------------+
| Opening amount as at 27 February 2009 | 169.7 |
+---------------------------------------------------------+--------------+
| Repayment of borrowings | (20.0) |
+---------------------------------------------------------+--------------+
| Issue costs amortisation | 0.1 |
+---------------------------------------------------------+--------------+
| | |
+---------------------------------------------------------+--------------+
| Closing amount as at 27 August 2009 | 149.8 |
+---------------------------------------------------------+--------------+
14 Contingent assets and contingent liabilities
On 27 May 2009 the Group completed on the final company of five individual
companies disposed to Cavendish Bars Limited. As part of the transaction the
Group has entered into a six month indemnity, capped at GBP0.7m, in favour of
Cavendish Bars Limited in respect of unforeseen liabilities covered by the
warranties. As at 27 August 2009, the Group are not aware of any expected claims
on this indemnity and as a result, costs associated with this indemnity have not
been accrued.
On 10 July 2009 the Group provided a guarantee for GBP2m on behalf of The 3D
Entertainment Group in relation to a bank loan. The loan is secured over the
assets of The 3D Entertainment Group and as such, the Group would expect to
recover any monies called upon following realisation of value from these assets.
The Group is currently pursuing a case against HM Revenue and Customs in respect
of VAT of GBP5.1m (2008: GBP5.1m) that is believed to have been overpaid. No
receivable has been recognised for these amounts due to the uncertainty of any
recovery.
15 Related party transactions
The Group incurred costs of GBP6.4m (half year ended 28 August 2008: GBP5.1m)
from Eminence Leisure Limited, which is an associate of the Group, in respect of
entertainment acts and bookings, of which GBPnil (28 August 2008: GBP0.5m)
remained outstanding at the half year end.
On 19 January 2007 the Group sold certain trade and assets of its units to The
3D Entertainment Group Limited. Post completion a transitional services
agreement was put in place between the Group and The 3D Entertainment Group
Limited (an associate of the Group) for the provision of certain services.
GBP0.7m (half year ended 28 August 2008: GBP0.7m) of income has been credited
within administrative expenses in relation to the provision of these services.
Of the amount recognised, GBP0.7m remained outstanding at the half year end.A
further GBP0.1m remains outstanding in relation to income booked in the year
ended 26 February 2009. At 27 August 2009 GBP23.6m (28 August 2008: GBP21.9m)
was also owed to the Group in relation to the loan note and accrued interest,
and GBP0.2m (28 August 2008: GBP0.1m) was owed in respect of capital amounts and
other recharges.
During the half year, the Group recognised income of GBPnil (half year ended 28
August 2008: GBP0.1m) from Lucien Barriere for costs incurred relating to the
Waterimage Limited joint venture. Of the amount recognised GBPnil (28 August
2008: GBP0.1m) remained outstanding at the half year end.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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