TIDMWKT
RNS Number : 7377P
Walker (Thomas) PLC
30 March 2009
Date: 30 March 2009
THOMAS WALKER PLC
Chairman's Statement on the Interim Results for the half year ending
31 December 2008
The Group's first half performance has suffered from the sharp decline in the
economy and a steep fall in demand since November 2008. This followed a moderate
decline in the earlier months.
As reported in our pre-close period trading statement, the accessories business
held up well in volume terms during the first half, although profitability was
reduced by higher import costs following the fall in sterling against the
American and Hong Kong dollars.
The stampings business has been more seriously affected by the current economic
conditions. The decline in traditional core markets of TW Stamping ("TWS"),
particularly in sectors related to the housing market, has been profound. This
has severely affected orders being placed with TWS, which are now mostly for
small quantities on short lead times. This makes order input less predictable
but does, however, favour the quick response capabilities of TWS.
To date, there is no sign of the recovery which we had originally anticipated
for early 2009, as customers have not yet exhausted their stocks or generated
new demand.
+-------------------+------------------+-------------------------------------+
| Financials | | |
+-------------------+------------------+-------------------------------------+
| Group Revenues | GBP3,555,000 | (2007: GBP4,499,000) declined by |
| | | 21% |
+-------------------+------------------+-------------------------------------+
| Loss before Tax | GBP388,000 | (2007: Loss before Tax GBP130,000) |
+-------------------+------------------+-------------------------------------+
| Loss after Tax | GBP358,000 | (2007: Loss GBP77,000) |
+-------------------+------------------+-------------------------------------+
| Net Debt | GBP2,273,000 | (2007: GBP1,943,000) |
+-------------------+------------------+-------------------------------------+
Dividend
In view of the Group's current trading performance and the unpredictable
outlook, the Board will not be declaring an interim dividend at the half-year
stage.
The Directors will review the position regarding future dividend payments once
the Company has returned to sustainable profitability.
Stamping
Sales at TWS were some 40% below the comparable period in 2007.
The improvements in control of raw materials have proved their worth as brass
prices continue to be volatile. Disciplines ensure that purchases are only made
against specific customer orders and that raw material stocks are kept to a
minimum.
Margins have been restored, whilst remaining competitive, but the flow of orders
has been severely restricted since late November 2008 as end users in the home
building and engineering sectors scaled down or suspended their activities and
as wholesale merchants and prime manufacturers reduced stocks and forward order
commitments.
Accessories: Thomas Walker (UK) Limited and Thomas Walker (SEA) Limited
The original Thomas Walker operations which manufacture and distribute clothing
accessories and identity products within the UK and Asia have experienced a
mixed first-half performance.
Volumes of garment accessories were maintained compared with the same trading
period in 2007. Demand for identity products has also held up well, with
marginal sales growth being reported for the first half of the financial year as
new ranges have been introduced. Overall profitability was adversely impacted by
the weakness of Sterling and the consequential reduction of margin.
Current trading and outlook
Trading since the half-year end continues to be extremely difficult and, if
anything, the trend in order intake up to February has become even more
depressed. Most orders for Stamping have been the result of successful promotion
with new customers. This is an encouraging feature even though it has not been
sufficient to compensate for lack of demand from traditional clients.
As announced in the trading update issued on 12 March, the Group has been taking
steps to reduce capacity and costs, regrettably including a number of
redundancies. In the first phase, these steps will yield total savings circa
GBP350,000 in a full year. Following a strategic review of the Group's business
and prospects a second series of actions was identified as being necessary
across all levels of the Company. Capital programmes have been suspended -
including the new CNC machines which had been announced - and Directors have
agreed to waive part of their salaries.
Cash availability is the prime concern in the short term and additional
financial resources are being sought, principally from the Group's bankers, to
fund the next wave of economies and to ensure the financial stability of the
Group following completion of the restructuring programme. This may also involve
an equity fundraising.
The Directors hope to be in a position shortly to announce a successful outcome
to these discussions.
As announced on 20 March 2009, the Directors have received an indicative offer
for a management buy-out of one of the Group's subsidiaries. Discussions are at
an early stage and there is no certainty that they will lead to an agreement.
Mr John Lomer, the Group Financial Director, is a party to the buy-out project
and has stood down temporarily from the Board and Management of the Group in
order to avoid a potential conflict of interest.
Bryan C Knight
Chairman
Consolidated Income Statement
+----------------------------------------+-----+-------+-------+-------+-------+-------+
| Six months ended 31 December 2008 | | | |
+----------------------------------------+-----+---------------+---------------+
| | Unaudited | Unaudited | Audited Year |
| | 6mths to | 6mths to | ended |
| | 31/12/08 | 31/12/07 | 30/06/08 |
+----------------------------------------+-------------+---------------+---------------+
| | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------------+-------------+---------------+---------------+
| Revenue | 3,555 | 4,499 | 9,215 |
+----------------------------------------+-------------+---------------+---------------+
| Operating expenses | (3,879) | (4,386) | (8,851) |
+----------------------------------------+-------------+---------------+---------------+
| One off costs | - | (161) | (161) |
+----------------------------------------+-------------+---------------+---------------+
| | | | |
+----------------------------------------+-------------+---------------+---------------+
| Operating (loss)/profit | (324) | (48) | 203 |
+----------------------------------------+-------------+---------------+---------------+
| | | | |
+----------------------------------------+-------------+---------------+---------------+
| Finance cost | (64) | (82) | (200) |
+----------------------------------------+-------------+---------------+---------------+
| | | | |
+----------------------------------------+-------------+---------------+---------------+
| (Loss)/Profit before income tax | (388) | (130) | 3 |
+----------------------------------------+-------------+---------------+---------------+
| | | | |
+----------------------------------------+-------------+---------------+---------------+
| Income tax credit/(expense) | 30 | 53 | (15) |
+----------------------------------------+-------------+---------------+---------------+
| | | | |
+----------------------------------------+-------------+---------------+---------------+
| Loss for the period attributable to | (358) | (77) | (12) |
| the equity holders of the parent | | | |
| company | | | |
+----------------------------------------+-------------+---------------+---------------+
| Basic and diluted (loss)/earnings per | (5.81) | (1.25) | (0.2) |
| share (pence) (note 3) | | | |
+----------------------------------------+-----+-------+-------+-------+-------+-------+
Consolidated Statement of Recognised Income and Expense
+------------------------------------------+-----------+-----------+----------+
| Six months ended 31 December 2008 | | | |
+------------------------------------------+-----------+-----------+----------+
| | Unaudited | Unaudited | Audited |
| | 6mths to | 6mths to | Year |
| | 31/12/08 | 31/12/07 | ended |
| | | | 30/06/08 |
+------------------------------------------+-----------+-----------+----------+
| | GBP'000 | GBP'000 | GBP'000 |
+------------------------------------------+-----------+-----------+----------+
| Actuarial (losses)/gains on defined | - | - | (109) |
| benefit pension scheme | | | |
+------------------------------------------+-----------+-----------+----------+
| Deferred tax on actuarial (gain)/Loss | - | - | 31 |
+------------------------------------------+-----------+-----------+----------+
| Exchange differences on translation of | 56 | - | 2 |
| foreign operations | | | |
+------------------------------------------+-----------+-----------+----------+
| Net (loss)/gain recognised directly in | 56 | - | (76) |
| equity | | | |
+------------------------------------------+-----------+-----------+----------+
| Loss for the period attributable to the | (358) | (77) | (12) |
| equity holders of the parent company | | | |
+------------------------------------------+-----------+-----------+----------+
| Total recognised income and expense for | (302) | (77) | (88) |
| the period | | | |
+------------------------------------------+-----------+-----------+----------+
+------------------------------------------+-----------+-----------+----------+
| Group Balance Sheet | | | |
+------------------------------------------+-----------+-----------+----------+
| As at 31 December 2008 | | | |
+------------------------------------------+-----------+-----------+----------+
| | Unaudited | Unaudited | Audited |
| | as at | as at | as at |
| | 31/12/08 | 31/12/07 | 30/06/08 |
+------------------------------------------+-----------+-----------+----------+
| | GBP'000 | GBP'000 | GBP'000 |
+------------------------------------------+-----------+-----------+----------+
| Non-current assets | | | |
+------------------------------------------+-----------+-----------+----------+
| Intangible Assets | 551 | 551 | 555 |
+------------------------------------------+-----------+-----------+----------+
| Property, plant and equipment | 3,705 | 3,886 | 3,861 |
+------------------------------------------+-----------+-----------+----------+
| Retirement benefit surplus | 247 | 337 | 247 |
+------------------------------------------+-----------+-----------+----------+
| | 4,503 | 4,774 | 4,663 |
+------------------------------------------+-----------+-----------+----------+
| Current Assets | | | |
+------------------------------------------+-----------+-----------+----------+
| Inventories | 1,823 | 1,820 | 1,874 |
+------------------------------------------+-----------+-----------+----------+
| Trade and other receivables | 1,787 | 2,337 | 2,096 |
+------------------------------------------+-----------+-----------+----------+
| Cash and cash equivalents | 102 | 449 | 28 |
+------------------------------------------+-----------+-----------+----------+
| | 3,712 | 4,606 | 3,998 |
+------------------------------------------+-----------+-----------+----------+
| | | | |
+------------------------------------------+-----------+-----------+----------+
| Total assets | 8,215 | 9,380 | 8,661 |
+------------------------------------------+-----------+-----------+----------+
| | | | |
+------------------------------------------+-----------+-----------+----------+
| Current liabilities | | | |
+------------------------------------------+-----------+-----------+----------+
| Trade and other payables | (1,239) | (1,781) | (1,691) |
+------------------------------------------+-----------+-----------+----------+
| Current tax liabilities | - | (199) | - |
+------------------------------------------+-----------+-----------+----------+
| Obligations under finance lease | (21) | (46) | (41) |
+------------------------------------------+-----------+-----------+----------+
| Bank loans | (1,113) | (1,021) | (679) |
+------------------------------------------+-----------+-----------+----------+
| | (2,373) | (3,047) | (2,411) |
+------------------------------------------+-----------+-----------+----------+
| Non Current liabilities | | | |
+------------------------------------------+-----------+-----------+----------+
| Bank loans | (1,242) | (1,305) | (1,286) |
+------------------------------------------+-----------+-----------+----------+
| Deferred tax liabilities | (225) | (230) | (225) |
+------------------------------------------+-----------+-----------+----------+
| Obligations under finance leases | - | (20) | - |
+------------------------------------------+-----------+-----------+----------+
| | (1,467) | (1,555) | (1,511) |
+------------------------------------------+-----------+-----------+----------+
| Total liabilities | (3,840) | (4,602) | (3,922) |
+------------------------------------------+-----------+-----------+----------+
| NET ASSETS | 4,375 | 4,778 | 4,739 |
+------------------------------------------+-----------+-----------+----------+
| | | | |
+------------------------------------------+-----------+-----------+----------+
| Capital and Reserves | | | |
+------------------------------------------+-----------+-----------+----------+
| Called up Share Capital | 308 | 308 | 308 |
+------------------------------------------+-----------+-----------+----------+
| Share Premium Account | 15 | 15 | 15 |
+------------------------------------------+-----------+-----------+----------+
| Other Reserve | 62 | 4 | 6 |
+------------------------------------------+-----------+-----------+----------+
| Retained earnings | 3,990 | 4,451 | 4,410 |
+------------------------------------------+-----------+-----------+----------+
| TOTAL EQUITY | 4,375 | 4,778 | 4,739 |
+------------------------------------------+-----------+-----------+----------+
+----------------------------------------+-----------+-----------+----------+
| Group Statement of Cash Flows | | | |
+----------------------------------------+-----------+-----------+----------+
| For the six months ended 31 December | | | |
| 2008 | | | |
+----------------------------------------+-----------+-----------+----------+
| | Unaudited | Unaudited | Audited |
| | 6mths to | 6mths to | Year |
| | 31/12/08 | 31/12/07 | ended |
| | | | 30/06/08 |
+----------------------------------------+-----------+-----------+----------+
| | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------------+-----------+-----------+----------+
| Loss for the period | (358) | (77) | (12) |
+----------------------------------------+-----------+-----------+----------+
| Adjustments for: | | | |
+----------------------------------------+-----------+-----------+----------+
| Finance costs | 64 | 82 | 200 |
+----------------------------------------+-----------+-----------+----------+
| Income tax (Income)/expense | (30) | (53) | 15 |
+----------------------------------------+-----------+-----------+----------+
| Gain on sale of property, plant and | - | - | (28) |
| equipment | | | |
+----------------------------------------+-----------+-----------+----------+
| Depreciation of property, plant and | 252 | 209 | 472 |
| equipment | | | |
+----------------------------------------+-----------+-----------+----------+
| Amortisation of Intangible assets | - | - | 10 |
+----------------------------------------+-----------+-----------+----------+
| Operating cash flows before movement | (72) | 161 | 657 |
| in working capital | | | |
+----------------------------------------+-----------+-----------+----------+
| | | | |
+----------------------------------------+-----------+-----------+----------+
| Decrease/(increase) in inventories | 51 | (26) | (80) |
+----------------------------------------+-----------+-----------+----------+
| Decrease/(increase) in trade and other | 395 | 205 | 447 |
| receivables | | | |
+----------------------------------------+-----------+-----------+----------+
| (Decrease)/increase in trade and other | (451) | 198 | (33) |
| payables | | | |
+----------------------------------------+-----------+-----------+----------+
| Increase/(decrease) in deferred tax | - | - | 16 |
| liabilities | | | |
+----------------------------------------+-----------+-----------+----------+
| | | | |
+----------------------------------------+-----------+-----------+----------+
| Cash flow from operations | (77) | 538 | 1,007 |
+----------------------------------------+-----------+-----------+----------+
| | | | |
+----------------------------------------+-----------+-----------+----------+
| Net Interest paid | (64) | (82) | (180) |
+----------------------------------------+-----------+-----------+----------+
| Tax paid | - | - | (150) |
+----------------------------------------+-----------+-----------+----------+
| | | | |
+----------------------------------------+-----------+-----------+----------+
| Net cash from/(used in) operating | (141) | 456 | 677 |
| activities | | | |
+----------------------------------------+-----------+-----------+----------+
| | | | |
+----------------------------------------+-----------+-----------+----------+
| Cash flow from investing activities | | | |
+----------------------------------------+-----------+-----------+----------+
| Purchase of property, plant and | (92) | (123) | (375) |
| equipment | | | |
+----------------------------------------+-----------+-----------+----------+
| Proceeds from sale of property, plant | - | - | 27 |
| and equipment | | | |
+----------------------------------------+-----------+-----------+----------+
| | | | |
+----------------------------------------+-----------+-----------+----------+
| Net cash used in investing activities | (92) | (123) | (348) |
+----------------------------------------+-----------+-----------+----------+
| | | | |
+----------------------------------------+-----------+-----------+----------+
| Cash flow from financing activities | | | |
+----------------------------------------+-----------+-----------+----------+
| Bank loan repayments | (44) | (42) | (62) |
+----------------------------------------+-----------+-----------+----------+
| Proceeds /(repayment) new bank | 433 | (5) | (347) |
| facilities | | | |
+----------------------------------------+-----------+-----------+----------+
| Finance lease repayments | (20) | (24) | (49) |
+----------------------------------------+-----------+-----------+----------+
| Equity dividends paid (note 2) | (62) | (62) | (92) |
+----------------------------------------+-----------+-----------+----------+
| | | | |
+----------------------------------------+-----------+-----------+----------+
| Net cash (used in)/from financing | 307 | (133) | (550) |
| activities | | | |
+----------------------------------------+-----------+-----------+----------+
| | | | |
+----------------------------------------+-----------+-----------+----------+
| Net increase/(decrease) in cash, cash | 74 | 200 | (221) |
| equivalents | | | |
+----------------------------------------+-----------+-----------+----------+
| | | | |
+----------------------------------------+-----------+-----------+----------+
| Cash, cash equivalents at beginning of | 28 | 249 | 249 |
| period | | | |
+----------------------------------------+-----------+-----------+----------+
| | | | |
+----------------------------------------+-----------+-----------+----------+
| Cash, cash equivalents at end of the | 102 | 449 | 28 |
| period | | | |
+----------------------------------------+-----------+-----------+----------+
Notes to the statements
At 31 December 2008
1. Basis of Preparation
This interim report does not constitute statutory accounts of the group within
the meaning of section 240 of the Companies Act 1985. Statutory accounts for the
year ended 30 June 2008, which were prepared in accordance with International
Financial Reporting Standards (IFRS), and those parts of the Companies Act 1985
that remain applicable to companies reporting under IFRS, have been filed with
the Registrar of Companies. The auditor's report on those accounts was
unqualified and did not contain a statement under section 237 of the Companies
Act 1985.
The accounting policies applied in these un-audited interim financial statements
are those that the group expects to apply in its annual financial statements for
the year ended 30 June 2009, which will be prepared in accordance with
International Financial Reporting Standards (IFRS), and those parts of the
Companies Act 1985 that remain applicable to companies reporting under IFRS.
As noted in the Chairman's Statement, the directors are in discussion with the
Group's bankers regarding increased borrowing facilities and are also exploring
a number of alternative options to facilitate rationalisation.
The directors hope to be in a position shortly to announce a successful outcome
to these discussions. They have therefore prepared the interim financial
statements on the basis of a going concern.
2. Dividends paid
Final equity dividend relating to year ended 30th June 2008 paid on ordinary
shares of 1p per share, Company total of GBP61,600, (2007: Final equity dividend
relating to year ended 30th June 2007 paid on ordinary shares of 1p per share,
Company total of GBP61,600).
3. Earnings per share
The calculation of basic earnings per share is based on the loss on ordinary
activities after taxation (GBP358,000) for the period ending 31 December 2008
(31 December 2007: loss (GBP77,000)) and on 6,160,000 ordinary shares (2007:
6,160,000 ordinary shares), being the weighted average number of ordinary shares
in issue during the period.
4. Analysis of changes in net debt
+-----------------------------------------+---------+----------+-----------+
| | As at |Cashflow | As at |
| | 1 July | | 31 |
| | 2008 | | December |
| | | | 2008 |
+-----------------------------------------+---------+----------+-----------+
| | GBP'000 | GBP'000 | GBP'000 |
+-----------------------------------------+---------+----------+-----------+
| Cash at bank and in hand | 28 | 74 | 102 |
+-----------------------------------------+---------+----------+-----------+
| | | | |
+-----------------------------------------+---------+----------+-----------+
| | 28 | 74 | 102 |
+-----------------------------------------+---------+----------+-----------+
| | | | |
+-----------------------------------------+---------+----------+-----------+
| Bank loans due within one year | (65) | - | (65) |
+-----------------------------------------+---------+----------+-----------+
| Bank loans due after more than one year | (1,286) | 44 | (1,242) |
+-----------------------------------------+---------+----------+-----------+
| Finance leases due within one year | (41) | 20 | (21) |
+-----------------------------------------+---------+----------+-----------+
| Debt resulting from new invoice | (614) | (433) | (1,047) |
| financing | | | |
+-----------------------------------------+---------+----------+-----------+
| | | | |
+-----------------------------------------+---------+----------+-----------+
| | (1,978) | (295) | (2,273) |
+-----------------------------------------+---------+----------+-----------+
5. Capital and Reserves
Reconciliation of movement in capital and reserves
+----------------------+---------+---------+----------+----------+------------+
| | Share | Share | Foreign | Retained | Total |
| | capital | premium | exchange | earnings | equity |
| | | account | | | |
+----------------------+---------+---------+----------+----------+------------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------------------+---------+---------+----------+----------+------------+
| Balance at 1 July | 308 | 15 | 6 | 4,410 | 4,739 |
| 2008* | | | | | |
+----------------------+---------+---------+----------+----------+------------+
| Dividends paid | - | - | - | (62) | (62) |
+----------------------+---------+---------+----------+----------+------------+
| Other reserves | - | - | 56 | - | 56 |
+----------------------+---------+---------+----------+----------+------------+
| Profit/(Loss) for | - | - | - | (358) | (272) |
| the period | | | | | |
+----------------------+---------+---------+----------+----------+------------+
| | | | | | |
+----------------------+---------+---------+----------+----------+------------+
| At 31 December 2008 | 308 | 15 | 62 | 3,990 | 4,375 |
+----------------------+---------+---------+----------+----------+------------+
The Interim Statement will be sent to shareholders and is available to the
public at the registered office: Catesby Park, Eckersall Road, Kings Norton,
Birmingham B38 8SE and on the Company website at www.thomaswalker.co.uk.
Contacts
Bill Good
Managing Director
Tel: 0121 486 4100
Mobile: 07790 742316
Katie Dale
Golley Slater Financial PR
Tel: 0121 384 9743
Mobile: 07918 716754
Colin Smith
Arden Partners
Tel: 0121 423 8940
This information is provided by RNS
The company news service from the London Stock Exchange
END
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