Final Results
March 20 2008 - 3:01AM
UK Regulatory
RNS Number:5278Q
Mallett PLC
20 March 2008
Mallett Plc
Preliminary results for the year ended 31 December 2007
2007 represented a year of significant change for Mallett which has impacted on
profits for the year but will provide the platform for future growth in the
company.
Highlights
* Turnover increased by 5% to �17,488,000 (2006 - �16,642,000)
* Profit before tax decreased by 42% to �1,318,000 (2006 - �2,267,000
pre-restructuring)
* Earnings per share decreased by 42% to 6.42p (2006 - 11.06p
pre-restructuring)
* 63 pence per share returned to shareholders in June 2007
* Proposed full year dividend decreased by 9% to 8.4 pence per share
(2006 - 9.2 pence per share)
* Continued strong balance sheet with a net cash surplus of �2,047,000.
CHAIRMAN'S STATEMENT
Trading performance
In the first half of the year both turnover and profits increased over the same
period for last year, helped by the sale of 550 items of stock through an
auction at Sotheby's. Trading in the second half of the year, however, weakened
significantly as customers in the UK and US became more cautious due to fears
over the economy. This generated an overall drop in profit before tax from last
year of 42% to �1,318,000 (2006 - �2,267,000 pre-restructuring) and drop in
earnings per share of 42% to 6.42 pence (2006 - 11.06 pence- pre-restructuring).
Our US business held up well during the year with turnover and profits being
similar to last year despite the dollar being significantly weaker against
sterling than last year.
The UK business had a difficult year. It was necessary to refocus our marketing
at the start of the year due to the number of sales outlets being reduced from
two to one with the sale of Bourdon House, and our senior sales team being
reduced by two with the retirement of one director and the reassignment of
another to deliver the exciting contemporary designs project. Turnover has
increased from the previous year due to the auction at Sotheby's, but profits
are significantly down on last year reflecting the difficulty of trading antique
furniture in a market where the current fashion for contemporary art is
dominant.
Despite this, we had some great successes during the year:
* In April we merged our in-house restoration team with the team from H. J.
Hatfield & Sons Limited to create an additional profit centre for the group.
The two teams have been integrated successfully and the business is now
trading profitably.
* In October we had an exhibition, in New York and then in London, of
furniture and photographs from the 20th century designer and photographer,
Willy Rizzo. The exhibitions were in partnership with leading fashion
designer, Paul Smith and generated great interest, particularly in New York,
and good sales. We aim to build on this success by expanding our range of
20th century products on offer.
* Our picture department has been reinvigorated by the return of James
Harvey from the US and it is now a profitable business unit once more. We
have now set our picture department up in a new gallery in Chelsea, trading
under the name of James Harvey British Art.
Corporate activity
In June we returned 63 pence per share (�8.7 million) to shareholders by way of
a B Share Scheme and special interim dividend. This represented the majority of
the after tax cash received on the sale of Bourdon House in December 2006. For
those who have retained their B shares, we expect that a repurchase offer will
be made (subject to obtaining the necessary shareholder approval) following the
company's Annual General Meeting which will be held on 3rd June 2008.
In July we welcomed three new non-executive directors, Lord Daresbury, James
Heneage and Eloy Michotte on to the Board all of whom have much to offer in the
future development of the company.
Dividends
Your Board is recommending a final dividend of 3.8 pence per share (2006 - 6.8
pence per share) for approval by shareholders at the forthcoming Annual General
Meeting. In addition, reflecting the strong balance sheet of the group and a net
cash surplus of over �2 million at the year end, your Board has approved the
payment of a further interim dividend of 2.2 pence per share. The final dividend
and the further interim dividend will be paid on 13th June 2008 to shareholders
on the register on 16th May 2008.
In September, we paid an interim dividend of 2.4 pence per share. Therefore, if
the final dividend is approved, the total dividend for the year will be 8.4
pence per share (2006 - 9.2 pence per share).
Outlook for 2008
Sales in the early part of the year have been reasonable and there have been
some encouraging results from the three fairs we have attended so far. We are
also very pleased with the progress of the contemporary designs project. Our
first range of products commissioned from five leading contemporary designers
has been agreed and is now in the course of production. We will launch this
range to the press in Milan starting on the 15th April at the Salone
Internazionale del Mobile 2008. This will be followed by the sales launch
starting on the 12th May in New York. The press reaction so far has been
encouraging and we are hoping for coverage in international press and specialist
magazines.
The unpredictable nature of the arts market, however, makes it impossible to
forecast trading for the rest of the year with any clarity. The prospect of a
recession in the US and in the UK, and the continuing taste for contemporary
art, means that 2008 will be another challenging year for the antique art
market. In addition, our cost structure will be affected by the current rent
review on our New Bond Street premises. In light of this, and with the benefit
of the experience of the three new non-executive directors, the Board is
undertaking a detailed operational review of the business, the result of which
we will report on in due course.
MALLETT PLC
UNAUDITED CONSOLIDATED INCOME STATEMENT
for the year ended 31st December 2007
2007 2006
�'000 �'000
Revenue 17,488 16,642
Cost of sales (14,922) (12,997)
Gross profit 2,566 3,645
Other operating income 2 2
Distribution costs (196) (270)
Administrative expenses (1,430) (1,202)
Operating profit before restructuring 942 2,175
Restructuring - 10,404
Operating profit after restructuring 942 12,579
Investment income 397 95
Finance costs (21) (3)
Profit before tax 1,318 12,671
Tax (444) (2,744)
Profit for the period 874 9,927
Basic and diluted earnings per share 6.42p 72.78p
Basic and diluted earnings per share before restructuring 6.42p 11.06p
All of the activities of the company are classed as continuing.
CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSES
2007 2006
�'000 �'000
Profit for the year 874 9,927
Exchange differences on translation of foreign operations (238) 64
Actuarial gains on the defined benefit pension scheme 740 653
Movement of deferred tax on actuarial gains (222) (196)
Release of deferred tax on revalued property - 9
Total recognised income and expenses for the year 1,154 10,457
MALLETT PLC
UNAUDITED CONSOLIDATED BALANCE SHEET
at 31st December 2007
2007 2006
�'000 �'000
Non-current assets
Property, plant and equipment 4,749 4,656
Current assets
Inventories 18,372 19,033
Trade and other receivables 3,701 4,103
Cash and cash equivalents 2,410 16,175
24,483 39,311
Total assets 29,232 43,967
Equity
Share capital 690 690
Share premium account - 5,168
Capital redemption reserve 5168 -
Own shares (468) (494)
Retained profit 20,761 29,897
Minority interests (1) -
Total equity 26,150 35,261
Current liabilities
Trade and other payables 2,447 4,914
Bank overdrafts and loans 363 -
Tax liabilities 86 2,934
2,896 7,848
Non current liabilities
Retirement benefit pension obligations 204 1,126
Deferred tax liabilities (18) (268)
186 858
Total liabilities 3,082 8,706
Total equity and liabilities 29,232 43,967
MALLETT PLC
UNAUDITED CONSOLIDATED CASHFLOW STATEMENT
for the year ended 31st December 2007
2007 2006
�'000 �'000
Operating profit 942 12,579
Adjustments for:
Depreciation 252 246
Profit on disposal of property - (11,938)
Movements in working capital:
Decrease in inventories 661 2,743
Decrease/(increase) in receivables 403 (1,320)
(Decrease)/increase in payables (2,249) 1,548
Cash generated by operations 9 3,858
Tax paid (3,248) (513)
NET CASH FROM OPERATING ACTIVITIES (3,239) 3,345
INVESTING ACTIVITIES
Interest received 397 95
Interest paid (21) (3)
Proceeds from sale of property, plant and equipment - 14,250
Purchase of property, plant and equipment (345) (2,008)
NET CASH FROM INVESTING ACTIVITIES 31 12,334
FINANCING ACTIVITIES
Purchases of own shares (84) (14)
Dividends paid (1,960) (1,270)
B share scheme payments (8,280) -
Merger investment costs (52) -
NET CASH USED IN FINANCING ACTIVITIES (10,376) (1,284)
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (13,584) 14,395
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 15,869 1,410
Effect of foreign exchange rate changes (238) 64
CASH AND CASH EQUIVALENTS AT END OF YEAR 2,047 15,869
The financial information set out in this document does not constitute the
company's statutory accounts. Statutory accounts for the year ended 31
December 2006 have been delivered to the Registrar of Companies, and those for
the year ended 31 December 2007 will be delivered in due course. The auditors
have reported on the accounts for the year ended 31 December 2006; their report
was (i) unqualified, (ii) did not include any references to any matters to which
the auditors drew attention by way of emphasis without qualifying their reports
and (iii) did not contain statements under section 237(2) or (3) of the
Companies Act 1985.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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