RNS Number:7833B
Mallett PLC
09 August 2007
Mallett PLC ("Mallett" or the "Company")
Chairman's Statement
Dear Shareholder
The first six months of 2007 saw Mallett undertake a number of significant
one-off events. We sold 550 items of stock through an auction at Sotheby's; we
merged our restoration workshop with the restoration business, H J Hatfield &
Sons Limited ("Hatfields"); and we successfully returned #8.7m to shareholders
through a B Share Scheme and special interim dividend. In addition, we have
appointed three new non-executive directors, Lord Daresbury, James Heneage and
Eloy Michotte, and I am delighted to welcome them to the Board.
At the same time, trading continues to be challenging and unpredictable, but I
am pleased to report an increase in profits over the same period for last year
principally due to the impact of the Sotheby's stock sale.
Trading performance
Our interim results for the six months ended 30th June 2007 show an increase in
turnover of 21% from the same period last year to #10,666,000 (2006 -
#8,814,000) and an increase in operating profit of 3% to #1,143,000 (2006 -
#1,112,000). These results include #2,151,000 (net of VAT) of turnover and
#192,000 of operating profit from the Sotheby's stock sale, after taking account
of the #1,533,000 provision made in the results for the year ended 31st December
2006.
Trading from our US operation has been strong but Group results have been
adversely affected by the significantly weaker dollar than for the same period
last year. Our picture department has also enjoyed a successful first six months
of the year and this is an area we hope to expand over the next year. Trading
from the UK operation has been slower than for the same period last year,
excluding the one-off Sotheby's stock sale, reflecting fewer American visitors
and the current dominant fashion for contemporary art.
Profit before tax for the six months ended 30th June 2007 has increased 25% over
the same period last year to #1,446,000 (2006 - #1,156,000), buoyed by #195,000
of additional interest earned from the cash proceeds of the sale of Bourdon
House, the majority of which we have now returned to shareholders. This has
helped to increase basic and diluted earnings per share to 7.60 pence (2006 -
5.48 pence). Having paid a special interim dividend of 5 pence per share in June
as part of the return of #8.7m to shareholders, the Board has approved a further
interim dividend of 2.4 pence per share (2006 - 2.4 pence per share). This will
paid on 21st September 2007 to shareholders on the register on 24th August 2007.
Outlook for the second half
We expect little change in trading conditions for the second half of the year,
with a slow start over the summer period, but improving in the fourth quarter of
the year, all impacted by continued weakness in the dollar. We expect costs to
increase in the run up to the exciting launch of our first range of contemporary
designs products which is still planned for December and we expect a small
contribution from Hatfields, which is now operating satisfactorily following the
merger in April. In addition, we hope to finalise the level of contribution the
company should make into the pension scheme in order to address the funding
deficit and we will continue to reinvest the proceeds of the Sotheby's sale in
new stock acquisitions.
G.M. Magan
Chairman
9th August 2007
Contact: Lanto Synge (CEO) 020 7499 7411
Michael Smyth-Osbourne (FD) 020 7499 7411
Consolidated Interim Income Statement
for the 6 months ended 30th June 2007
Notes 6 months 6 months
ended ended
30th June 30th June
2007 2006
#,000 #,000
REVENUE 10,666 8,814
OPERATING PROFIT 1,143 1,112
Investment income (net) 303 44
PROFIT BEFORE TAXATION 1,446 1,156
Tax 3 (411) (401)
PROFIT AFTER TAX 1,035 755
Minority Interest 2 -
PROFIT FOR THE PERIOD 1,037 755
Basic and diluted earnings per share 4 7.60p 5.48p
Consolidated Statement of Recognised Income and Expenses
Notes 6 months 6 months
ended ended
30th June 30th June
2007 2006
#,000 #,000
PROFIT FOR THE PERIOD 1,037 755
Exchange difference on translation of foreign operation (109) 145
Actuarial gain on the defined benefit pension schemes 193 138
Merger investment costs (52) -
Total recognised income and expenses for the period 1,069 1,038
Consolidated Balance Sheet
at 30th June 2007
Notes 30th June 31st Dec
2007 2006
#,000 #,000
NON-CURRENT ASSETS
Property, plant and equipment 4,756 4,656
CURRENT ASSETS
Inventories 17,442 19,033
Trade and other receivables 3,430 4,103
Cash and cash equivalents 4,861 16,175
25,733 39,311
TOTAL ASSETS 30,489 43,967
EQUITIES AND LIABILITIES
Share capital 690 690
Share premium account - 5,168
Capital redemption reserve 5,168 -
Own shares (457) (494)
Revenue reserve 21,065 29,897
Minority Interests 38 -
TOTAL EQUITY 26,504 35,261
CURRENT LIABILITIES
Trade and other payables 3,111 4,914
Tax liabilities 276 2,934
3,387 7,848
NON-CURRENT LIABILITIES
Retirement benefit pension obligations 925 1,126
Deferred tax 2 (327) (268)
598 858
TOTAL LIABILITIES 3,985 8,706
TOTAL EQUITY AND LIABILITIES 30,489 43,967
Consolidated Cash Flow Statement
for the 6 months ended 30th June 2007
6 months 6 months
ended ended
30th June 30th June
2007 2006
#,000 #,000
Net cash from operating activities 1,898 1,462
Returns on investment and servicing of finance 305 44
Tax paid (3,102) (321)
Capital expenditure and financial investment (224) (75)
B Share Scheme payments (8,173) -
Merger investment costs (52) -
Equity dividends paid (1,628) (938)
Exchange differences (274) 145
Net (decrease)/increase in cash for the period (11,250) 317
Consolidated interim statement of changes in shareholders' equity for the 6
months ended 30th June 2007
Share Share Capital Revaluation Own Revenue Minority Total
capital premium redemption reserve shares reserve interests
reserve
#'000 #'000 #'000 #'000 #'000 #'000 #'000 #'000
Balances at 30th June 690 5,168 - 1,018 (480) 20,729 - 27,125
2006
Income in 6 months to
31st December 2006 8,951 8,951
Deferred taxation (12) (187) (199)
Net exchange profit 64 64
Transfer to income (987) (987)
statement on disposal
of property
Net (purchase)/ write (14) (14)
off of investments in
own shares
Actuarial gains 653 653
Equity dividends paid (332) (332)
Transfer on revalued (19) 19 -
assets
Balances at 31st
December 2006 690 5,168 - - (494) 29,897 - 35,261
Income in 6 months to
30th June 2007 1,035 1,035
Minority Interest 2 (2) -
Equity dividends paid (1,628) (1,628)
Merger investment (52) (52)
costs
Net exchange loss (108) (108)
Actuarial gain 193 193
Return of cash to (5,168) 5,168 (8,274) (8,274)
shareholders through B
Share Scheme
Minority Interest 40 40
Net (purchase)/ write 37 37
off of investments in
own shares
Balances at 30th June 690 - 5,168 - (457) 21,065 38 26,504
2007
On 8th June 2007 the Company issued 13,800,060 B Shares of 37.45 pence each to
its shareholders on the register on 7th June 2007 out of the share premium
account. Those shareholders then had the choice of receiving 58 pence per B
Share by way of a dividend or by way of a repurchase offer, as set out in a
Circular to Shareholders dated 14th May 2007. On 15th June 2007, following
elections received from shareholders, dividends totalling #3,953,000 became
payable in respect of 6,816,000 B Shares, which were then converted into
deferred shares of negligible value, and 6,837,000 B Shares were repurchased for
a total cost of #3,965,000 and were cancelled. 147,000 B Shares remain
outstanding which have been re-classified under current liabilities.
Notes to the Interim Report
These accounts have been prepared in accordance with International Financial
Reporting Standards (IFRS).
The interim statement for the six months are unaudited and do not constitute
statutory accounts for the purposes of the Companies Acts. The accounts for the
year ended 31st December 2006 have been filed with the Registrar of Companies
and the auditors' report on those accounts was not qualified.
The deferred tax asset reflects the tax recoverable on the defined benefit
obligations.
Taxation has been provided for at an estimated rate of 30% (2006 - 30%) taking
into account #59,000 movement on deferred tax.
Basic and diluted earnings per share have been calculated on the profits for the
period after taxation and divided by the weighted average number of shares in
issue during the period of 13,640,144.
The directors have declared an interim dividend of 2.4p (net) (2006 - 2.4p) per
ordinary share payable on 21st September 2007 to shareholders on the register on
24th August 2007.
Company Information
DIRECTORS George M. Magan, F.C.A.* Chairman
*Non-executive Lanto M. Synge Group CEO
Lord Daresbury*
James Heneage*
Giles H. Hutchinson Smith
Eloy Michotte*
M. Henry G. Neville
Michael Smyth-Osbourne Secretary
Thomas E. Woodham-Smith
REGISTERED OFFICE 141 New Bond Street
London W1S 2BS
COMPANY NUMBER 1838233
WEBSITE www.mallettantiques.com
This information is provided by RNS
The company news service from the London Stock Exchange
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